FIFTH AMENDMENT OF LOAN AGREEMENT
Exhibit 10.25
FIFTH AMENDMENT OF
LOAN AGREEMENT
LOAN AGREEMENT
THIS FIFTH AMENDMENT OF LOAN AGREEMENT (“Amendment”) is made this 12th day of April, 2006 by
Summit Hotel Properties, LLC, a South Dakota limited liability company (“Borrower”) and First
National Bank of Omaha, a national banking association (“Bank”) and amends that certain Loan
Agreement dated July 20, 2004 between Borrower and Bank (“Loan Agreement”).
WHEREAS, pursuant to the Loan Agreement and the other Loan Documents, Bank extended to
Borrower a Line of Credit in the maximum principal amount of $18,000,000.00 more fully described in
the Loan Agreement;
WHEREAS, pursuant to that certain First Amendment of Loan Agreement dated October 1, 2004 and
under the terms and conditions thereof, Borrower requested and Bank advanced the Boise Acquisition
Advance;
WHEREAS, under the terms of that certain Second Amendment of Loan Agreement dated June of 2005
and under the terms and conditions thereof, the maximum principal amount available under the Line
of Credit was increased to $25,000,000.00, and Borrower was permitted to use Advances to construct
improvements to Property acquired by Borrower;
WHEREAS, under the terms of that certain Third Amendment of Loan Agreement dated August 24,
2005, the Termination Date was extended to June 24, 2007; and
WHEREAS, under the terms of that certain Fourth Amendment of Loan Agreement dated March 1,
2006, the maximum principal amount available under the Line of Credit was increased to
$30,000,000.00, West Bank became a participant in the Line of Credit and the Loan Agreement was
otherwise amended as provided for therein; and
WHEREAS, Borrower has requested that the Line of Credit be used to support the issuance, for
the account of Borrower, of letters of credit.
NOW, THEREFORE, in consideration of the amendments to the Loan Agreement provided for below,
the mutual covenants herein and other good and valuable consideration, the sufficiency and receipt
of which is hereby acknowledged, the parties agree to amend the Loan Agreement as follows:
1. Capitalized terms used herein shall have the meaning given to such terms in the Loan
Agreement, unless specifically defined herein.
2. Section 1.1 of the Loan Agreement is hereby deleted in its entirety and the following shall
be inserted in lieu thereof:
Section 1.1. Line of Credit. Subject to the terms of this Agreement, Lender
may lend Company, from time to time until the termination hereof and subject to the
limitations set forth below, such sums as Company may request, but which shall not exceed
in the aggregate principal amount at any time outstanding Thirty Million and No/100 Dollars
($30,000,000.00), with a Ten Million and No/100 Dollars ($10,000,000.00) sub-limit on the
Line of Credit to support the issuance of letters of
credit for the account of Company. The maximum principal amount available under the Line
of Credit shall be reduced by the face amount of letters of credit issued under the Line of
Credit outstanding from time to time. Such letters of credit shall be evidenced and
governed by Lender’s standard letter of credit documentation if effect at the time of
issuance of a letter of credit and Company shall be responsible for the payment of Lender’s
letter of credit fees in effect at the time of issuance of a letter of credit. In
consideration of Lender’s issuance of the letters of credit, Company shall pay Lender a fee
equal to one percent (1%) of the face amount of the letters of credit outstanding, payable
quarterly in arrears. Subject to the conditions and limitations set forth herein, advances
or readvances under the Line of Credit (each, an “Advance”, and collectively, “Advances”)
will be made to Company, from time to time during the period commencing on the date hereof
to but not including June 24, 2007 (the “Termination Date”), unless renewed by written
agreement between Lender and Company. Lender will complete a renewal review of the Line of
Credit on every anniversary date of this Agreement. In addition to the foregoing, the Line
of Credit shall be deemed to automatically terminate if Lender accelerates any Term Note
evidencing an Advance following an Event of Default, or if the occurrence of an Event of
Default (as defined under Article VI hereof) causes any Term Note to become immediately due
and payable.
3. Section 1.2 of the Loan Agreement is hereby deleted in its entirety and the following shall
be inserted in lieu thereof:
1.2. Purpose. Company shall use the Advances for the following purposes: (i)
to finance Company’s purchase of a limited service hotel(s) (an Advance used for such
purpose shall be hereinafter referred to as an “Acquisition Advance”); (ii) to finance the
equity to be raised by Company from investors in connection with the purchase of a limited
service hotel, with the remainder of the purchase price for the limited service hotel
financed through other financial accommodations obtained by Company (an Advance used for
such purpose shall be hereinafter referred to as an “Equity Advance”); (iii) to finance
Company’s working capital needs (an Advance used for working capital needs shall be
hereinafter referred to as a “Working Capital Advance”); (iv) to support the issuance, for
the account of Company, of letters of credit subject to a sub-limit of Ten Million and
No/100 Dollars ($10,000,000.00) as provided for in Section 1.1 above; and (v) to fund the
construction of a limited service hotel and related improvements on real property acquired
by Company (an Advance to construct a limited service hotel and related improvements on
Property shall be hereafter referred to as a “Construction Advance” and the limited service
hotel and related improvements to be financed with each Construction Advance shall be
referred to as a “Project”). As used in this Agreement, the term “Property” shall mean a
limited service hotel and all assets related thereto purchased by Company and financed with
Lender with an Acquisition Advance or with the equity financed with an Equity Advance. The
term Advance shall refer collectively to Acquisition Advances, Equity Advances, Working
Capital Advances and Construction Advances (including a Construction Advance converted to a
Construction Term Note as provided for below). The term Equity Investor shall mean a
person or entity who contributes cash capital as part of the equity raised to purchase a
Property. The term Investor Equity shall mean the cash capital contributed to a Property
by an Equity Investor.
An initial Advance in the amount of $9,952,000.00 will be used to refinance Company’s
existing indebtedness to Lender evidenced by that certain Term Note in the principal amount
of $3,000,000.00 dated February 12, 2004 executed and delivered by
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Company to Lender and the indebtedness owed to the other Equity Lenders on the Hotels
described in and as such terms are defined in that certain Loan Agreement dated February
12, 2004 between Company and Lender . Such Advance shall be an Equity Advance and shall be
evidenced by a Term Note in the form of the Term Note form attached hereto as Exhibit A.
4. The definition of the term “Loan” in the Loan Agreement is hereby amended to include any
and all letters of credit issued by Bank for the account of Borrower as provided for in this
Amendment.
5. Section 1.3 of the Loan Agreement is hereby amended by adding the following at the end of
such Section: “Advances supporting the issuance of letters of credit shall at no time exceed
$10,000,000.00 at any one time in the aggregate.”
6. Except as modified and amended herein, all other terms, provisions, conditions and
obligations imposed under the terms of the Loan Agreement and the other Loan Documents shall remain
in full force and effect and are hereby ratified and affirmed by Borrower. To the extent
necessary, the other Loan Documents are hereby amended to be consistent with the terms of this
Amendment.
7. Borrower certifies and reaffirms by its execution hereof that the representations and
warranties set forth in the Loan Agreement and the other Loan Documents are true as of this date,
and that no Event of Default under the Loan Agreement or any other Loan Document, and no event
which, with the giving of notices or passage of time or both, would become such an Event of
Default, has occurred as of execution hereof.
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment on the date first
written above.
| FIRST NATIONAL BANK OF OMAHA | ||||||
| /s/ Marc. T. Wisdom | ||||||
| By: | Xxxx X. Xxxxxx | |||||
| Title: | Second Vice President | |||||
| SUMMIT HOTEL
PROPERTIES, LLC, a South Dakota limited liability company, by its Company Manager, THE SUMMIT GROUP, INC. |
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| By: | /s/ Xxxxx X. Xxxxxxxxxxx
|
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| President | ||||||
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Acknowledged, accepted and consented to this 12th day of April, 2006 by:
| THE SUMMIT GROUP, INC. | ||||
By:
|
/s/ Xxxxx X. Xxxxxxxxxxx
|
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