0688d
Exhibit 10b.
LINE OF CREDIT AND REIMBURSEMENT AGREEMENT
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This LINE OF CREDIT AND REIMBURSEMENT AGREEMENT ("Agreement") is made as
of the 24 day of November, 1986 by and between MARRIOTT CORPORATION, a Delaware
corporation ("Marriott") MARRIOTT HANOVER HOTEL CORPORATION (the "General
Partner") and HANOVER MARRIOTT LIMITED PARTNERSHIP, a Delaware limited
partnership (the "Partnership").
PRELIMINARY STATEMENT
Subsequent to or concurrent with the entering into of this Agreement,
the Partnership intends to further amend the Limited Partnership Agreement under
which it is organized, such amended and restated partnership agreement to be in
the form of Exhibit C to that certain Private Offering Memorandum dated October
23, 1986 (said partnership agreement as so amended to hereafter be referred to
as the "Partnership Agreement").
Simultaneously with the entering into of this Agreement, the Partnership
has entered into that First Mortgage, Security Agreement, Financing Statement
and Fixture Filing of even date herewith (the "Loan Agreement") with the
National Bank of Canada (the "Lender") pursuant to which the Lender has agreed
to loan the Partnership $36.5 million to provide permanent
financing for the Hanover Marriott Hotel (the "Hotel"). In order to induce the
Lender to provide the financing under the Loan Agreement, Marriott and the
General Partner have entered into (i) a debt service guarantee of even date
herewith (the "Debt Service Guarantee") pursuant to which Marriott and the
General Partner have agreed to advance funds to the Partnership in an amount up
to $3.5 million to enable the Partnership to pay debt service on the loan
provided pursuant to the Loan Agreement and (ii) a foreclosure guarantee of even
date herewith (the "Foreclosure Guarantee") pursuant to which the General
Partner has guaranteed an amount not exceeding $10 million of principal upon a
foreclosure on the Hotel by the Lender. In addition, from time to time, Marriott
and/or the General Partner may advance funds to the Partnership to meet
liabilities or obligations of the Partnership.
The Hotel will be operated by Marriott Hotel Services, Inc., a wholly
owned subsidiary of Marriott, pursuant to an amended and restated operating
lease dated as of July 29, 1986 (the "Operating Lease").
This Agreement is being entered into for the purpose of evidencing the
obligation of Marriott and the General Partner to make the advances enumerated
in section 1 hereof and of the Partnership to repay Marriott and the General
Partner the principal amount of any advances to the Partnership under the Debt
Service Guarantee and Foreclosure Guarantee and other
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advances to meet the obligations and liabilities of the Partnership, said
advances to accrue interest as hereafter provided. The mutual obligations
hereunder will provide consideration to the entering into of this Agreement and
of the Debt Service Guarantee and the Foreclosure Guarantee.
NOW, THEREFORE, the parties hereby agree as follows:
AGREEMENT
1. Obligation to Make Advances
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Marriott and the General Partner agree to advance to the Partnership
$3.5 million, on a revolving basis, to pay debt service under the Loan
Agreement. Advances shall be made hereunder at such time as funds of the
Partnership from day to day operations of the Hotel or funds otherwise available
to the Partnership are insufficient to fulfill the Partnership's obligations
under the Loan Agreement and the promissory note thereunder.
2. Repayment of Advances under the Debt Service Guarantee and Foreclosure
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Guarantee
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Any advances by Marriott and/or the General Partner to the Partnership
under the Debt Service Guarantee or Foreclosure Guarantee shall constitute
indebtedness owing to Marriott and/or the General Partner. Such indebtedness
shall bear interest at one percentage point in excess of the prime rate of
interest announced from time-to-time by Bankers Trust Company, New York, New
York. Unless sooner paid as permitted by Section
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6 of this Agreement, such indebtedness and any accrued interest thereon shall
mature and be due and payable on November 15th, 1993 (the "Maturity Date") and
will be paid in accordance with Section 5.06 of the Partnership Agreement.
Advances under the Debt Service Guarantee may be secured by a mortgage on the
Hotel junior to the mortgage provided pursuant to the Loan Agreement. At the
request of Marriott or the General Partner, the Partnership will execute and
deliver one or more promissory notes to further evidence any indebtedness owing
to Marriott or the General Partner hereunder. Any such promissory note shall be
in the form of Exhibit A hereto.
3. Repayment of Other Advances
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Any advances by Marriott, the General Partner or any of their affiliates
to the Partnership to meet any liabilities or obligations of the Partnership,
other than obligations under the Debt Service Guarantee and Foreclosure
Guarantee which are to be repaid pursuant to Section 2 above, shall be deemed
loans to the Partnership and shall accrue interest per annum at one percentage
point in excess of the Prime Rate payable in arrears on the first day of each of
the Partnership's fiscal quarters and such amounts shall be due and payable upon
that date which is the fifth anniversary of the date on which such advances were
made; provided, however, that any and all such advances shall be paid (i) prior
to distributions to partners (the "Partners") of the Partnership out of the
Partnership's Cash Available for Distribution (as defined in the Partnership
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Agreement) to the Partners, (ii) upon liquidation of the Partnership, or (iii)
upon the sale of the Hotel and the receipt by the Partnership of the proceeds of
such sale.
4. Subordination
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Payment of any indebtedness owing to Marriott and/or the General Partner
pursuant to Section 2 or Section 3 of this Agreement shall be subject and
subordinate to and shall be paid only after payment of "Indebtedness" as defined
in the Loan Agreement. Except as provided in the prior sentence, the
indebtedness owing to Marriott and/or the General Partner hereunder shall rank
pari passu with all other indebtedness or obligations of the Partnership to
third parties.
5. Security
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At the request of Marriott or the General Partner and if permitted under
the terms of the Loan Agreement, the Partnership will execute and deliver a
mortgage or deed of trust on the Hotel securing the payment of any indebtedness
hereunder. Any such mortgage or deed of trust shall conform to the requirements
of the Loan Agreement or any loan agreement pursuant to a refinancing of
indebtedness owing by the Partnership pursuant to the Loan Agreement. The
Partnership shall not be required to execute or deliver such mortgage or deed of
trust if (i) prohibited by the terms of the Loan Agreement or other collateral
instrument securing the financing provided by the Lender thereunder, or (ii)
prohibited by the
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terms of any instrument evidencing or securing indebtedness incurred to
refinance any indebtedness owing by Partnership pursuant to the Loan Agreement.
Marriott and the General Partner further agree to subordinate any lien or
security interest they may have pursuant to this Section 5 to the lien or
security interest of the Lender under the Loan Agreement or any lender under a
refinancing of the Loan Agreement.
6. Optional Prepayment
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Partnership may at any time prior to the Maturity Date repay any
indebtedness owing hereunder plus any accrued interest thereon at any time
without penalty or premium of any kind.
7. Exculpation
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No Partner shall have any personal liability with respect to the
indebtedness owing to Marriott and/or the General Partner hereunder. Marriott
and the General Partner agree to look solely to the assets of the Partnership or
to any security provided by the Partnership as the sole source of repayment
hereunder.
8. Compliance with Loan Agreement
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The Partnership agrees to faithfully abide by the provisions of the Loan
Agreement and to make prompt payment of any and all amounts due the Lender.
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9. Default
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In the event the Partnership is in default of any of its obligations
hereunder, unless such default is cured within thirty (30) days after written
notice thereof or within such longer period as may reasonably be required to
effect a cure in the case of a non-monetary default, or in the event the
Partnership defaults on its obligations under the Loan Agreement in consequence
of which the maturity of any indebtedness thereunder is accelerated, Marriott
and the General Partner shall, in any of such events, have the right to
accelerate the maturity of any indebtedness owing to it hereunder and upon such
acceleration the indebtedness hereunder shall be immediately due and payable. As
long as the mortgage under the Loan Agreement is in force, Marriott shall have
no right to cause a foreclosure on the Hotel, or exercise any other remedy,
because of a default under this Agreement.
10. Loan Agreement
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For so long as the Loan Agreement remains in place, this Agreement shall
not be amended, rescinded or terminated without the consent of the Lender.
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11. Governing Law
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This Agreement shall be governed by and construed under the laws of the
State of New York, without regard to principles of conflicts of laws thereof
which might refer such interpretations to the laws of another jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.
MARRIOTT CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxxx
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Vice President
MARRIOTT HANOVER HOTEL
CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxxx
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Vice President
HANOVER MARRIOTT LIMITED
PARTNERSHIP
By: Marriott Hanover Hotel
Corporation as general
partner
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------
Vice President
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Exhibit A
PROMISSORY NOTE
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$ , 19
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For value received, HANOVER MARRIOTT LIMITED PARTNERSHIP, a Delaware
limited partnership (the "Payor"), hereby promises to pay to the order of
MARRIOTT CORPORATION or MARRIOTT HANOVER HOTEL CORPORATION (the "Payees"), on
November 15, 1993 or such earlier maturity date as is provided in the Agreement
hereinafter referred to, at the Payees' offices at 00000 Xxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx, in lawful money of the United States, the principal amount
of $3.5 million, or, if less than such principal amount, the aggregate unpaid
principal amount of all advances made by the Payees to Payor pursuant to the
Agreement hereinafter referred to and outstanding hereunder as shown on the
schedule attached hereto and the Payor further promises to pay interest at said
office, in like money, from the date hereof on the principal amount owing
hereunder from time to time, at the borrowing rate provided for in Section 2 of
the Line of Credit and Reimbursement Agreement (the "Agreement") dated as of
November __, 1986, between the Payor and the Payees. Interest and principal
shall be payable at the times stated in the Agreement, at maturity (whether by
acceleration or otherwise) and upon any prepayment hereon (to the extent
thereof).
This Note is the Note referred to in the Agreement and is entitled to
the benefits thereof. No partner of the Payor shall have individual liability
with respect to the indebtedness owing to the Payees hereunder. Payees agree to
look solely to the assets of the Payor as the sole source of repayment
hereunder.
In case an event of default shall occur and be continuing under the
Agreement and not be cured within applicable grace periods, the principal of and
accrued interest on this Note may be declared to be due and payable in the
manner and with the effect provided in the Agreement, presentment, demand,
protest or notice of any kind being expressly waived.
This Note and the rights and obligations of the Payor and the Payees
shall be construed in accordance with and governed by the laws of the State of
New York.
HANOVER MARRIOTT LIMITED
PARTNERSHIP
By: Marriott Hanover Hotel
Corporation as general
partner
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Vice President
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SCHEDULE TO PROMISSORY NOTE
Loans and Payments of Principal
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Amount of Balance
Amount Principal Remaining Notation
Date Deferred Paid Unpaid Made By
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