Exhibit 10.29
10/22/99
LOAN AGREEMENT
This loan agreement (this "Agreement") is made and entered
into as of the 22nd day of October, 1999, by and among Marquette Capital Bank,
N. A. ("Marquette") and Xxxxxx Bank, National Association ("Bremer")
(collectively, the "Lender") and Supertel Hospitality, Inc., a Delaware
corporation (including its subsidiaries, the "Borrower").
In consideration of the mutual agreements set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by the parties, the Borrower and the Lender agree
as follows:
1. Loan. Subject to the provisions of this Agreement, upon
satisfaction of the conditions herein contained, the Lender shall make one or
more loans to the Borrower in an aggregate amount equal to $26,000,000.00
(collectively, the "Loan"). The Loan is not a revolving line of credit. The
Borrower shall use all proceeds of the Loan solely for refinancing existing
indebtedness on existing properties owned by Borrower and for other corporate
purposes in anticipation of the merger of Borrower into Xxxxxxxx Hospitality
Trust, Inc., a Virginia corporation ("Xxxxxxxx") contemplated by the Plan of
Merger dated June 11, 1999 (the "Xxxxxxxx Merger"). Pursuant to and following
the Xxxxxxxx Merger, Xxxxxxxx, as the surviving entity, will be responsible for
all liabilities and obligations of Borrower with respect to the Loan under the
Loan Documents (defined below) and Xxxxxxxx Hospitality Limited Partnership, a
Virginia limited partnership ("HHLP") will assume and agree to pay and perform
all such liabilities and obligations; from and after such time as the Xxxxxxxx
Merger becomes effective, Xxxxxxxx shall be and become the Borrower hereunder
and for all purposes hereof.
a. Conditions. Lender's obligation to make the Loan is
contingent upon the following:
(i) Borrower's repayment, either prior to funding of the
Loan or out of the proceeds of the Loan, of certain
existing loans to Borrower by Marquette affiliates in
the approximate aggregate amount of $11,300,000.00;
(ii) Lender's receipt of the Notes, Mortgages, Assignment
of Leases, Franchise Assignments, Indemnity and
Financing Statements, in each case duly executed by
Borrower;
(iii) Lender's approval of environmental assessments,
engineering reports, quality inspections, surveys and
title work of the Multi-State Collateral, franchisor
consents, organizational documents and resolutions,
and supporting opinions; and
(iv) Lender's approval of a Year 2000 Readiness survey
completed by Borrower and its affiliates.
b. Notes. Borrower's obligation to repay the Loan and to pay
interest and other charges, fees and expenses thereon is evidenced by the
Borrower's promissory note of even date herewith payable to the order of
Marquette in the principal amount of Sixteen Million and No/100 Dollars
($16,000,000.00) and by Borrower's promissory note of even date herewith payable
to the order of Bremer in the principal amount of Ten Million and No/100 Dollars
($10,000,000.00) (together with any amendments, extensions, renewals and
replacements thereof, collectively called the "Notes"). Unless and until
Borrower shall receive written notice from either of Marquette or Bremer
instructing Borrower to make separate payments to each of Marquette and Bremer
under the Notes, Borrower shall make all payments due under the Notes to
Marquette, and Marquette shall remit the appropriate portion of such payments to
Bremer for application against the Note held by it.
c. Mortgages. The Notes are secured by the mortgages and deeds
of trust of even date herewith encumbering the Multi-State Collateral executed
by Borrower in favor of Lender described on Exhibit A hereto (collectively, the
"Mortgages").
d. Assignment of Leases and Rents. The Notes are further
secured by assignments of leases and rents of even date herewith executed by
Borrower in favor of Lender with respect to the same property encumbered by the
Mortgages (the "Assignment of Leases").
e. Franchise Assignments. The Notes are further secured by
Collateral Assignments of Franchise Agreements of even date herewith executed by
Borrower in favor of Lender (the "Franchise Assignments").
f. Environmental, ADA and ERISA Indemnification Agreement. To
induce Lender to enter into this Loan Agreement, Borrower has also executed and
delivered in favor of Lender an Environmental, ADA and ERISA Indemnification
Agreement (the "Indemnity").
g. Financing Statements. To further evidence Lender's interest
in the Multi-State Collateral, Borrower shall deliver Financing Statements in
such form as Lender may request (the "Financing Statements").
2. Fees. In consideration of Lender's agreement to make the
Loan, Borrower shall pay the following fees to Lender:
a. Due Diligence Fee. Lender acknowledges receipt of a
non-refundable Due Diligence Fee in the amount of $65,000.
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b. Commitment Fee. Borrower has paid or concurrently with the
execution of this Agreement will pay to Lender a non-refundable Commitment Fee
in an amount equal to $65,000.
c. Closing Fee. Borrower shall pay Lender a Closing Fee in the
amount of 1.50% of the Loan on the date on which the Loan closes (the "Closing
Date"). The Due Diligence Fee and the Commitment Fee shall be credited against
the Closing Fee at closing.
3. Take-Out Broker. Borrower has retained Northland/Marquette
Capital Group ("Northland") to attempt to obtain take-out financing for the
Loan; provided, however, that Borrower shall be under no obligation to accept
any financing proposed by Northland, and Northland need not be Borrower's
exclusive source of take-out financing during the term of the Loan.
4. Covenants. As long as any now existing or hereafter arising
debt, obligation or liability of the Borrower to the Lender (including but not
limited to any debt, obligation or liability relating to any letter of credit)
shall remain outstanding, the Borrower shall comply with the following
requirements:
a. Reporting. Borrower shall deliver to each of Marquette and
Bremer, in form and substance acceptable to the Lender, the following:
(i) within 120 days after the close of each fiscal year
of Borrower, a consolidated and consolidating
statement of Borrower's (and, following the Xxxxxxxx
Merger, Xxxxxxxx'x) equity and a consolidated and
consolidating statement of cash flow of the Borrower
(and Xxxxxxxx) and any subsidiaries for such fiscal
year--all such statements to be in reasonable detail,
including all supporting schedules and comments; the
consolidated statements to be audited by independent
certified public accountants selected by Borrower and
certified by such accountants to have been prepared
in accordance with GAAP and accompanied by such
unqualified accountants' opinion thereon that such
documents have been audited in compliance with the
American Institute of Certified Public Accounts
Statements of Auditing standards in effect as of the
execution hereof;
(ii) within 120 days after the close of each fiscal year
of Borrower, consolidated and consolidating income
statements and balance sheets of the Borrower (and,
following the Xxxxxxxx Merger, Xxxxxxxx and HHLP) and
any subsidiaries as of the end of such fiscal
year--all such statements to be in reasonable detail,
including all supporting schedules and comments; the
consolidated income statements and balance sheets of
the Borrower (and Xxxxxxxx) to be audited by
independent certified public accountants selected by
Borrower and certified by such accountants to have
been prepared in accordance with GAAP and to present
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fairly the consolidated financial position and
results of operations of the Borrower (and Xxxxxxxx)
and any subsidiaries (including HHLP) and accompanied
by such unqualified accountants' opinion thereon that
such documents have been audited in compliance with
the American Institute of Certified Public Accounts
Statements of Auditing standards in effect as of the
execution hereof; the Lender shall have the right,
from time to time, to discuss the affairs of the
Borrower (and Xxxxxxxx) directly with such
independent certified public accountants after notice
to the Borrower (and Xxxxxxxx) and opportunity of the
Borrower (and Xxxxxxxx) to be represented at such
discussions;
(iii) As soon as available, and in any event within 45 days
after the end of each fiscal quarter of Borrower,
quarterly operating statements for each hotel
encumbered by the Mortgages, together with a summary
of key statistics relating to such operations,
including average daily rates, occupancy levels, and
revenue per available room, all in substantially the
form as such statements have previously been
furnished to Lender, and such other information as
Lender may request;
(iv) As soon as available, and in any event within 45 days
after the end of each fiscal quarter of Borrower, its
quarterly 10-Q with consolidated financials; and
(v) As soon as available, and in any event within 120
days after the end of each fiscal year of Borrower,
its annual 10-K with consolidated financials.
b. Financial. The Borrower (and, following the Xxxxxxxx
Merger, Xxxxxxxx) shall maintain:
(i) A Combined Debt Service Coverage Ratio of more than
1.5:1 for the Multi-State Collateral on a combined
basis. The Combined Debt Service Coverage Ratio shall
be measured as of December 31, 1999, and at quarterly
intervals thereafter.
(ii) A Consolidated Debt Service Coverage Ratio of more
than 1.5:1 for all of Borrower's properties and
obligations on a consolidated basis. The Consolidated
Debt Service Coverage Ratio shall be measured as of
December 31, 1999, and at quarterly intervals
thereafter.
(iii) A Combined Loan to Value Ratio not in excess of 65%,
to be tested on a quarterly basis, with respect to
the Multi-State Collateral and the outstanding
balance of the Loan and a Consolidated Loan to Value
Ratio not in excess of 60%, to be tested on a
quarterly basis, with respect to all properties owned
by Borrower and all debt obligations of Borrower on a
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consolidated basis. For purposes of calculation of
the Combined Loan to Value Ratio and the Consolidated
Loan to Value Ratio, respectively, as of December 31,
1999, and at quarterly measurement intervals
thereafter the value of the Multi-State Collateral
and of all properties owned by Borrower,
respectively, shall be determined by applying a
capitalization rate of 12% to the trailing twelve
(12) months Adjusted Net Operating Income determined
with respect to the Multistate Collateral and all
properties owned by Borrower, respectively.
(iv) After the Xxxxxxxx Merger, the foregoing ratios
continue to be applicable to Xxxxxxxx (including HHLP
and all Xxxxxxxx affiliates).
(v) The failure of Borrower to maintain the Consolidated
Debt Service Coverage Ratio or the Consolidated Loan
to Value Ratio shall constitute an Event of Default
hereunder. The failure of Borrower to maintain the
Combined Debt Service Coverage Ratio or the Combined
Loan to Value Ratio shall constitute an Event of
Default hereunder, unless (A) within 30 days of such
failure the Borrower shall deliver to the Lender, and
the Lender shall agree to accept, additional security
for the Loan (together with supporting documents,
title policies, opinions and other materials required
by Lender) acceptable in all respects to the Lender
in its sole discretion, and (B) the additional
security would cause the Borrower (on a pro forma
basis, as if the additional security had been
included as part of the Multi-State Collateral on the
relevant covenant measurement date) to be in
compliance with the relevant ratio.
c. Compliance with Other Agreements. Borrower will take all
necessary steps to preserve its existence and franchises, will permit no uncured
event of default to exist under any loan or loan document with any other lender,
and will comply with all present and future laws applicable to it in the
operation of its business, and all material agreements to which it is subject.
If Supertel Hospitality Management, Inc., as tenant, shall be in default of its
obligations under the Lease (referred to in the Mortgages), Borrower shall,
unless Lender otherwise agrees, promptly institute and pursue appropriate
enforcement action. The Borrower will cause all franchise and license agreements
which are the subject of the Franchise Assignments to be and remain in full
force and effect.
d. Litigation. Borrower will give immediate notice to Lender
of (i) any litigation or proceeding in which it is a party if an adverse
decision therein would require it to pay more than $100,000 or deliver assets,
the value of which exceeds such sum (whether or not the claim is considered to
be covered by insurance); and (ii) the institution of any other suit or
proceeding involving it that might materially and adversely affect its
operation, financial condition, property, or business prospects.
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e. Debt Service. Borrower will pay when due all of its
material indebtedness due third Persons within any applicable grace and or cure
periods except when the amount thereof is being contested in good faith by
appropriate proceedings and with adequate reserves therefor being set aside on
its books; for purposes hereof, indebtedness of the Borrower aggregating
$100,000 or less shall not be deemed material.
f. Lender Notification. Borrower will notify Lender
immediately (i) if it becomes aware of the occurrence of any Event of Default or
of any fact, condition, or event that only with the giving of notice or passage
of time, or both, could become an Event of Default; (ii) if it becomes aware of
any material adverse change in the business prospects, financial condition
(including, without limitation, proceedings in bankruptcy, insolvency, or
reorganization), or results of operations of the Borrower; or (iii) upon the
failure of the Borrower to observe any of its respective undertakings hereunder
or under any one or more of the Loan Documents.
g. ERISA. Borrower will (i) fund any of its Employee Pension
Benefit Plans in accordance with no less than the minimum funding standards of
29 U.S.C. Sec. 1082 (Section 302 of ERISA) and (ii) furnish the Lender, promptly
after the filing of the same, with copies of any reports or other statements
filed with any applicable governmental agency.
h. Year 2000 Compliance. "Year 2000 Compliance" means, with
regard to any person or entity, that all software, embedded microchips, and
other processing capabilities utilized by, and material to the business
operations or financial condition of, such person or entity are able to
interpret and manipulate data on and involving all calendar dates correctly and
without causing any abnormal ending scenario, including but not limited to all
dates in and after the year 2000. The Borrower represents and warrants to the
Lender and agrees that: (a) the Borrower has made due inquiry to determine
whether the computer applications and hardware the Borrower and the Borrower's
material suppliers and customers will be Year 2000 Compliant by January 1, 2000;
and (b) the Borrower has a plan to become Year 2000 compliant. By January 1,
2000, and the Borrower agrees to devote adequate resources toward, diligently
pursue, and take all actions necessary to complete such plan and become Year
2000 Compliant by January 1, 2000; and (c) to the best of the Borrower's
knowledge, all of the Borrower's material suppliers and customers will be Year
2000 Compliant by January 1, 2000; and (d) the Borrower agrees to deliver to the
Lender such information regarding the plans and progress of the Borrower and the
Borrower's material suppliers and customers toward becoming Year 2000 Compliant
as the Lender may reasonably request from time to time, including but not
limited to any assessment by a third party of the Borrower's efforts to become
Year 2000 Compliant; (e) at the Lender's request from time to time, the Borrower
shall order, obtain, and deliver to the Lender a copy of audits of the
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Borrower's plans and progress to become Year 2000 Compliant by January 1, 2000,
and the Borrower shall permit the Lender and the Lender's representatives to
conduct audits of the Borrower's operations for such purpose, and (f) the
Borrower has substantially completed implementation of the Borrower's plan and
remediation of material Year 2000 problems. Breach of any representation,
warranty or agreement in this paragraph, or failure of the Borrower or a
significant portion of the Borrower's material suppliers and customers to become
Year 2000 Compliant by January 1, 2000 shall constitute an Event of Default
hereunder, if such breach or failure would have a material, adverse effect on
the operations of Borrower.
i. Inspection. Borrower shall keep accurate books and records
in which true and complete entries will be made in accordance with GAAP. Upon
request of Lender, Borrower, during normal business hours, shall give any
representatives of Lender access to and permit such representatives to examine
and copy all books, records and other writings in its possession, to inspect its
property and to discuss its finances, accounts, property and business with any
of its officers and directors. Borrower will permit the Lender, or its
employees, accountants, attorneys or agents, to examine and inspect any of the
Multi-State Collateral, other collateral covered by any other document securing
the Loan or any other property of the Borrower at any time during ordinary
business hours.
j. Sale or Transfer of Assets; Suspension of Business
Operations. Except as permitted by the Mortgages, Borrower will not sell, lease,
assign, transfer or otherwise dispose of (i) the stock of any Subsidiary (except
that, after the Xxxxxxxx Merger, Simplex, Inc., and Motel Developers Inc., may
be merged into Borrower), (ii) all or a substantial part of its assets, or (iii)
any Multi-State Collateral or any interest therein (whether in one transaction
or in a series of transactions) to any other Person and will not liquidate,
dissolve or suspend business operations. Borrower may purchase and sell personal
property in the ordinary course of its business, provided Lender shall be given
a first priority security interest in any replacement property relating to the
Multi-State Collateral. Borrower will not in any manner transfer any property
without prior or present receipt of full and adequate consideration.
k. Consolidation and Merger; Asset Acquisitions. Borrower will
not consolidate with or merge into any Person without the prior written approval
of Lender, except for any consolidation or merger which occurs in connection
with Borrower's acquisition of additional hotel properties (provided, however,
that Lender's approval shall nonetheless be required if the merger or
consolidation occurs in connection with a single transaction or series of
related transactions by which Borrower seeks to acquire more than 10 additional
hotel properties).
l. Sale and Leaseback. Borrower will not enter into any
arrangement, directly or indirectly, with any other Person whereby the Borrower
shall sell or transfer any real or personal property, whether now owned or
hereafter acquired, and then or thereafter rent or lease as lessee such property
or any part thereof or any other property which the Borrower intends to use for
substantially the same purpose or purposes as the property being sold or
transferred.
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m. Restrictions on Nature of Business. Borrower will not
engage in any line of business materially different from that presently engaged
in by Borrower and will not purchase, lease or otherwise acquire assets not
related to its business.
n. Accounting. Borrower will not adopt any material change in
accounting principles other than as required by GAAP. Borrower will not adopt,
permit or consent to any change in its fiscal year.
o. Place of Business; Name. Except in connection with the
Xxxxxxxx Merger, Borrower will not transfer its chief executive office or
principal place of business, or move, relocate, close or sell any business
location, unless Borrower gives Lender 30 days prior written notice of such
change, together with such amendments to financing statements as Lender may
request. Borrower will not permit any tangible Multi-State Collateral or any
records pertaining to the Multi-State Collateral to be located in any state or
area in which, in the event of such location, a financing statement covering
such Multi-State Collateral would be required to be, but has not in fact been,
filed in order to perfect the Security Interest. Borrower will not change its
name.
p. Organizational Documents. Except in connection with the
Xxxxxxxx Merger, Borrower will not amend its certificate of incorporation,
articles of incorporation or bylaws.
q. REIT Status. Upon completion of the Xxxxxxxx Merger,
Xxxxxxxx will be a Real Estate Investment Trust within the meaning of the
Internal Revenue Code of 1986, as amended, and shall not change or rescind its
status as a Real Estate Investment Trust.
r. Capital Expenditure Account. Borrower shall establish an
interest-bearing Capital Expenditure Account with Marquette (for the benefit of
both Marquette and Bremer) upon the execution of this Agreement, and shall
maintain the account until all amounts owed to the Lender have been repaid.
Borrower shall deposit, or shall direct any tenant, lessor or manager to
deposit, 4% of the room revenue from the Multi-State Collateral into the Capital
Reserve Account to be used solely for the purpose of maintenance and capital
expenditures relating to properties owned by the Borrower. Until the occurrence
of an Event of Default, or until otherwise notified by the Lender, Borrower may
use the funds in the Capital Expenditure Account at its discretion for the
purposes set forth herein.
s. Covenant Compliance. As soon as available, and in any event
within 45 days after the end of each fiscal quarter of Borrower, Borrower shall
execute and deliver to Lender a Covenant Compliance Certificate in the form of
Exhibit B attached hereto.
5. Definitions. In this Agreement:
a. "Adjusted Net Operating Income" means the remainder of the
Net Operating Income from the Multi-State Collateral or all properties owned by
Borrower, as the case may be, after reducing Net Operating Income by an amount
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equal to the sum of (i) 4% of gross room revenue for FF&E reserve, plus (ii) 4%
of gross room revenue for management fees and expenses.
b. "Combined Debt Service Coverage Ratio" for any period shall
be determined as the quotient obtained by dividing (i) Adjusted Net Operating
Income derived from the Multi-State Collateral for the most recent trailing
12-month period by (ii) the amount of debt service payments (principal and
interest) (computed on an annualized basis, based upon the loan terms in effect
on the date of determination) which would be required to be made under this
Agreement and related Loan Documents during such period.
c. "Consolidated Debt Service Coverage Ratio" for any period
shall be determined by dividing (i) the Adjusted Net Operating Income derived
from all properties of Borrower for the most recent trailing 12-month period by
(ii) the required debt service for all of the Borrower's indebtedness (computed
on an annualized basis, based upon the loan terms in effect on the date of
determination). For purposes of determining this ratio, the debt service on any
non-amortizing indebtedness shall be assumed to equal the monthly payment
required to fully amortize such indebtedness over a 25-year term at the interest
rate in effect at the end of each quarter.
d. "Debt" means (i) all items of indebtedness or liability of
the Borrower which in accordance with GAAP would be included in determining
total liabilities as shown on the liabilities side of the Borrower's balance
sheet on the date as of which Debt is to be determined, plus (ii) indebtedness
secured by any mortgage, pledge, lien or security interest on property of the
Borrower, whether or not the indebtedness secured thereby shall have been
assumed, plus (iii) guaranties, endorsements (other than for purposes of
collection in the ordinary course of business) and other contingent obligations
of the Borrower in respect of, or to purchase or otherwise acquire indebtedness
of others.
e. "Events of Default" means the occurrence and continuance of
any of the following events shall constitute an "Event of Default" hereunder:
(i) the Borrower shall fail to pay any installment of
principal on the Loan when due, whether at stated
maturity, upon acceleration or otherwise, or pay when
due any interest, fees or other amounts payable
hereunder or under the other Loan Documents, and such
failure shall continue for ten (10) days after the
due date thereof; or
(ii) any representation or warranty made by the Borrower
herein or in any other Loan Document shall at the
time made be incorrect in any material respect; or
(iii) the Borrower shall fail to perform or observe any
term, covenant or agreement contained in this Loan
Agreement or any other Loan Document, and such
failure shall remain unremedied for thirty (30) days
after written notice thereof from the Lender to the
Borrower; or
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(iv) any event of default (however described) under any
other Loan Document shall occur and not be cured
within the applicable grace period, if any; or
(v) the Borrower shall fail to comply with any of the
financial covenants set forth in Paragraph 4(b); or
(vi) a material event of default shall occur under any
loan or credit agreement relating to Debt in excess
of $100,000 of the Borrower; or
(vii) both Xxxx Xxxxxxx is no longer the Chief Executive
Officer of Borrower and Xxxxx Xxxxxxxx is no longer a
senior officer of Borrower; provided, however, that
if Xxxx Xxxxxxx and Xxxxx Xxxxxxxx no longer hold
such positions due to death or disability, it shall
not be an Event of Default hereunder if Lender has
approved in writing (which approval will not be
unreasonably withheld) the replacement officers; or
(viii) the Xxxxxxxx Merger has not occurred pursuant to the
Plan of Merger referred to in Section 1 hereof within
90 days of the date hereof.
f. "GAAP" means generally accepted accounting principles
consistently applied. Except as otherwise approved by the Lender in writing, all
financial reporting, financial record keeping, and financial calculations in
connection with this Agreement shall be made on the basis of accounting
principles, methods, elections and estimates that are consistent and that are
consistent with the accounting principles, methods, elections and estimates used
in the last annual financial statements of the Borrower delivered by the
Borrower to the Lender before or upon the execution of this Agreement, and that
fairly present the financial condition or results of operations for the period
then ended.
g. "Loan Documents" means, collectively, all documents
executed by Borrower in connection with or as security for the Loan.
h. "Multi-State Collateral" means, collectively, all property
encumbered by the Mortgages.
i. "Net Operating Income" means gross income generated by or
at the property in question from whatever source, less the direct operating
expenses (not including depreciation or other non-cash items) for such property.
j. "Person" means any individual, corporation, partnership,
joint venture, limited liability company, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
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6. Jurisdiction; Choice of Law. The Borrower consents to the
personal jurisdiction of the state and federal courts located in the State of
Minnesota in connection with any controversy relating in any way to this
Agreement or to any transaction or matter relating to this Agreement, waives any
argument that venue in such forums is not convenient, and agrees that any
litigation initiated by the Borrower against the Lender relating in any way to
this Agreement or to any transaction or matter relating to this Agreement shall
be venued in either the Minnesota District Court of the county where the Lender
is located, or the United States District Court, District of Minnesota. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Minnesota.
7. Modifications; Successors and Assigns. No provision of this
Agreement can be amended, modified, waived or terminated, except by a writing
executed by the Borrower and the Lender. This Agreement shall bind and benefit
the parties and their respective successors and assigns; provided, the Borrower
shall not assign any of its rights or obligations under this Agreement without
the prior written consent of the Lender, and any assignment in violation of this
sentence shall be null and void. Lender consents to the Xxxxxxxx Merger and the
assignment of Borrower's rights and obligations under this Agreement in
connection therewith.
8. Lender's Expenses. Regardless of whether the Loan closes,
the Borrower shall pay to the Lender on demand all of the Lender's costs and
expenses, (including legal expenses, appraisals, and environmental assessments)
to perform due diligence and to document and close the transaction contemplated
by this Agreement.
9. Further Assurances.
a. Borrower will, at its sole cost and expense, do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged and
delivered all such further acts, conveyances, notes, mortgages, deeds of trust,
assignments, security agreements, financing statements and assurances as Lender
shall from time to time reasonably require (a) to carry into effect the purposes
of this Agreement and the other Loan Documents, (b) for the better assuring,
conveying, mortgaging, assigning and confirming unto Lender of all property and
rights mortgaged, granted, bargained, alienated, confirmed, pledged,
hypothecated, conveyed or assigned by this Agreement, or any of the other Loan
Documents or property intended now or hereafter to be, or which Borrower may be
or may hereafter become bound to convey or assign to Lender, (c) for the
perfection of any such lien or security interest granted herein or in the other
Loan Documents, and (d) for the better assuring and confirming of all of
Lender's rights, powers and remedies hereunder. Borrower, within ten (10) days
after Lender's request, will execute and deliver and hereby authorizes Lender to
execute in the name of Borrower or without the signature of Borrower to the
extent Lender may lawfully do so, one or more financing statements, chattel
mortgages or other instruments, to evidence more effectively the security
interest of Lender in the Multi-State Collateral and the other collateral under
the Loan Documents.
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b. Borrower forthwith upon the execution and delivery of this
Agreement and thereafter, from time to time, will cause the Mortgages and any
security instrument creating a lien or security interest or evidencing the lien
of the Mortgages and the other applicable Loan Documents upon the Multi-State
Collateral or other property and each instrument of further assurance to be
filed, registered or recorded in such manner and in such places as may be
required in order to publish notice of and fully to protect the lien or security
interest of, and the priority of, each of the Mortgages and the other Loan
Documents upon, and the interest of Lender in, the Multi-State Collateral or
other applicable property. Borrower will pay all filing, registration or
recording fees, and all expenses incidental to the foregoing and all taxes,
duties, assessments and charges arising out of or in connection with the
execution and delivery of the Mortgages, any other security instrument, any
instrument of further assurance or any other Loan Document. Upon Lender's
request, Borrower shall, from time to time, furnish Lender with evidence
reasonably satisfactory to Lender that such property is free of liens and
security interests (except as permitted hereunder), including searches of
applicable public records.
c. Upon any failure by Borrower to do so as provided in this
Paragraph 9, Lender may make, execute, record, file, re-record or refile any and
all such mortgages, deeds of trust, instruments, certificates and documents for
and in the name of Borrower, and Borrower hereby irrevocably appoints (which
appointment is coupled with an interest and with full power of substitution)
Lender the agent and attorney-in-fact of Borrower to do so; and Borrower shall
reimburse Lender, on demand, for all costs and expenses (including reasonable
attorneys' fees) incurred by Lender in connection therewith.
10. Prior Agreements Superseded. This Agreement supersedes and
replaces all prior commitment letters, proposal letters, term sheets, and other
statements of loan terms issued by the Lender to the Borrower, and all such
letters and term sheets are terminated.
12
[Signature Page to Loan Agreement]
Sincerely,
Marquette Capital Bank, National Association Xxxxxx Bank, National Association
By By
-------------------------------- ----------------------------------
Title Title
----------------------------- -------------------------------
The Borrower agrees to this Agreement.
THE BORROWER REPRESENTS AND WARRANTS TO THE LENDER AND AGREES
THAT THE BORROWER HAS READ ALL OF THIS AGREEMENT AND UNDERSTANDS ALL OF THE
PROVISIONS OF THIS AGREEMENT.
Supertel Hospitality, Inc. Date: October __, 1999
By
------------------------------------
Title
---------------------------------
13
EXHIBIT A
[List of Mortgages]
Mortgages and Deeds of Trust executed by Borrower in favor of
Lender and encumbering the following properties:
PROPERTY LOCATION TITLE
-------- -------- -----
Creston Super 8 Motel 000 X Xxxxxx Xx. CTIC NBU 180981260
Xxxxxxx, XX 00000 (Union Co.) 2601642
X'Xxxxx Super 8 Motel 000 X 0xx Xxxxxx CTIC NBU 180 981287
Xxxxxxx, XX 00000-0000 (Xxxx Co.) TC 2962
Keokuk Super 8 Motel 0000 Xxxx Xxxxxx CTIC NBU 180 981262
Keokuk, IA (Xxx Co.) 2601638
Iowa City Super 8 Motel 000 Xxxxx Xxxxxx CTIC NBU 180 981261
Xxxxxxxxxx, XX 00000 (Xxxxxxx Co.) 2601637
Burlington Super 8 Motel 0000 Xxxxxxxx Xxxxxx CTIC NBU 180 981258
Burlington, IA (Des Moines Co.) 2601644
Pittsburgh Super 8 Motel 3108 N Broadway CTIC NBU
Pittsburg, KS (Xxxxxxxx Co.) T-19137
Clinton Super 8 Motel 1711 Lincoln Way CTIC NBU 180 981259
Xxxxxxx, XX 00000 (Clinton Co.) 2601643
Mt. Pleasant Super 8 Motel 0000 X Xxxxx Xxx CTIC NBU 180 981286
Mt. Pleasant, IA (Xxxxx Co.) 9851017264
Pella Super 8 Motel 000 X Xxxxxxxxx Xxxxxx CTIC NBU 180 981264
Xxxxx, XX 00000 (Xxxxxx Co.) 2601640
Storm Lake Super 8 Motel 000 X Xxxxxxxxx Xxx CTIC NBU 180 981265
Xxxxx Xxxx, XX 00000 (Buena Vista Co.) 2601639
XxXxxxxx Super 8 Motel 910 N Central Expressway CTIC NBU 180 990140
XxXxxxxx, XX 00000 (Collin Co.) GF# 236793-H
Xxxxxx Super 8 Motel 000 Xxxxx X-00 Xxxx CTIC GF# 236793-D
Xxxxxx, XX 00000 (Xxxxxx Co.) 44-901-80-236793-D
Grapevine Super 8 Motel 000 X Xxx 000 CTIC GF# 236793-C
Xxxxxxxxx, XX 00000 (Tarrant Co.) 44-901-80-236793-C
Menomonie Super 8 Motel 1622 N Broadway CTIC NBU 180 990147
Menomonie, WI (Xxxx Co.) DUN00311
Las Colinas Xxxxxxx Inn 000 X Xxxxxx Xxxx Xxxx CTIC NBU 180 990139
Xxxxxx, XX 00000 (Dallas Co.) GF# 236793-I
Houston Xxxxxxx Inn ________________________________ CTIC NBU 180 990137
Houston, TX (Xxxxxx Co.) GF# 236793-A
Portage Super 8 Motel 3000 New Pinery Road CTIC NBU 180 990149
Xxxxxxx, XX 00000 (Columbia Co.) CP-168456
A-1
EXHIBIT B
COVENANT COMPLIANCE CERTIFICATE
-------------------------------
I,_________________, the ___________of ____________ , a ______________
(the "Borrower"), pursuant to the letter agreement dated (the "Agreement"),
hereby certify to Marquette Bank, National Association and to Xxxxxx Bank,
National Association (the "Lender") as follows:
As of the close of business on __________________, the
following was true and correct:
[Borrower to confirm compliance with each covenant contained in
Section 4 of Agreement]
AS OF THE DATE OF THIS CERTIFICATE, NO EVENT HAS OCCURRED
WHICH CONSTITUTES AN EVENT OF DEFAULT AS DEFINED IN THE AGREEMENT.
Date of Certificate:
--------------------------------------
Signature
-------------------------------------------------
B-1
