Exhibit 10(16)
AMENDMENT NUMBER TWO
TO LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER TWO TO LOAN AND SECURITY AGREEMENT (the
"Amendment") is entered into as of November 26, 2002, between FOOTHILL CAPITAL
CORPORATION, a California corporation ("Agent"), with a place of business
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, as Agent for the Lenders (as defined herein), and as a Lender, the
lenders identified on the signature pages hereof (such lenders, together with
their respective successors and assigns, are referred to hereinafter each
individually as a "Lender" and collectively as the "Lenders", and together with
Agent, as the "Lender Group"), and THE HOTEL GROUP, INC., a Kansas corporation
("Borrower"), and SHOLODGE, INC., a Tennessee corporation ("Holdings"), with its
chief executive office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, with reference to the following:
WHEREAS, Borrower and Holdings previously entered into that
certain Loan and Security Agreement, dated as of August 27, 1999 (as amended,
restated, supplemented, or otherwise modified from time to time, the "Loan
Agreement"), with Agent and Lenders pursuant to which Lenders have made certain
loans and financial accommodations available to Borrower and Holdings, which was
amended pursuant to that certain Amendment Number One to Loan and Security
Agreement dated as of October 3, 2001;
WHEREAS, Borrower and Holdings have requested that the Lender
Group consent to the addition of Real Property Collateral located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ (the "Additional Properties") to the Collateral securing the Obligations
and to amend the Loan Agreement in accordance therewith;
WHEREAS, subject to the terms and conditions set forth herein,
the Lender Group is willing to consent to the addition of the Additional
Properties to the Collateral and to so amend the Loan Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. Defined Terms. All terms used herein and not otherwise defined
shall have the meanings ascribed thereto in the Loan Agreement.
2. Amendments To The Loan Agreement.
(a) Section 1.1 of the Loan Agreement is hereby amended
as follows:
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(i) The definition of "Aggregate NOI" is hereby
amended and restated in its entirety to read
as follows:
"Aggregate NOI" means, for any period of
determination, the actual total NOI generated by the Real
Property Collateral and the Underlying Real Property
Collateral securing repayment of Eligible Notes, as set forth
in the monthly report delivered to Agent pursuant to Section
6.2(e).
(ii) The definition of "Availability" is hereby
amended and restated in its entirety to read
as follows:
"Availability" means, as of the date of the
determination thereof, the amount that Borrower is entitled to
borrow as Advances under Section 2.1, such amount being the
difference derived when (a) the sum of the principal amount of
Advances (including Agent Advances and Swing Loans) then
outstanding (including any amounts that the Lender Group may
have paid for the account of Borrower pursuant to any of the
Loan Documents and that have not been reimbursed by Borrower)
is subtracted from (b) the lesser of (i) the Maximum Revolver
Amount less the Letter of Credit Usage, or (ii) the Borrowing
Base, less the Letter of Credit Usage, less the outstanding
principal amount of the Term Loan.
(iii) The definition of "Go-forward Reserve" is
hereby amended and restated in its entirety
to read as follows:
"Go-forward Reserve" means a reserve against
the Borrowing Base in an amount equal to the product of 5
times the Average Quarterly NOI Decline. Schedule 1.1 sets
forth an example of the calculation of the Go-forward Reserve.
(iv) The definition of "Minimum NOI Maintenance"
is hereby amended and restated in its
entirety to read as follows:
"Minimum NOI Maintenance" means an
obligation on the part of the Obligors to maintain Aggregate
NOI for the immediately preceding 12 month period, as reported
by the Obligors to Agent in the monthly report delivered
pursuant to Section 6.2(e), equal to at least 90% of the
Baseline NOI set forth on Schedule A-1.
(v) The following definition is hereby added in
alphabetical order:
"NOI Limit Amount" means an amount equal to
the product of (a) the Aggregate NOI for the immediately
preceding 12 month period, times (b) the Applicable NOI
Multiple.
(b) Section 2.1(a) of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:
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"2.1 REVOLVER ADVANCES. (a) Subject to the terms and
conditions of this Agreement, and during the term of this
Agreement, each Lender agrees to make advances ("Advances") to
Borrower in an amount at any one time outstanding not to
exceed such Lender's Pro Rata Share of an amount equal to the
lesser of (i) the Maximum Revolver Amount less the Letter of
Credit Usage, or (ii) the Borrowing Base less the Letter of
Credit Usage, less the outstanding principal amount of the
Term Loan. For purposes of this Agreement, "Borrowing Base,"
as of any date of determination, shall mean the result of:
(x) the least of
(i) (A) 85% of the
aggregate outstanding principal
amount of Pledged Notes that are
Eligible Notes, plus (B) 65% of the
aggregate appraised Market Value of
the Real Property Collateral;
(ii) 65% of the aggregate
appraised Market Value of the Real
Property Collateral and the
Underlying Real Property Collateral
that secures Pledged Notes that are
Eligible Notes (in each case as
determined by Agent from time to
time in its Permitted Discretion,
and based upon such factors and
information as Agent deems
relevant); and
(iii) the NOI Limit
Amount;
minus
(y) the aggregate amount of reserves,
if any, established by Agent under Section
2.1(b)."
(c) Section 2.1(c) of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:
"(c) In the event that Availability is limited due to
any of clauses (i), (ii) or (iii) of part (x) of Section
2.1(a), the Obligors may, with the consent of Agent, pledge
additional Real Property Collateral or Eligible Notes, in the
manner provided in Section 4.5, to increase the Availability.
(d) Section 4.8 of the Loan Agreement is hereby amended
by deleting the words "set forth in Section 2.1(c)" from the end of the first
proviso to the first sentence of such Section.
(e) Section 7.20 of the Loan Agreement is hereby amended
by deleting from subsection (a) thereof the dollar amount "$75,000,000" and
inserting "$65,000,000" in lieu thereof.
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(f) Schedule A-1 to the Loan Agreement (Real Estate
Collateral) is hereby deleted in its entirety and the new Schedule A-1 attached
hereto shall be inserted in lieu thereof.
(g) Schedule 1.1 to the Loan Agreement (Go-forward
Reserve) is hereby deleted in its entirety and the new Schedule 1.1 attached
hereto shall be inserted in lieu thereof.
(h) Exhibit B-1 to the Loan Agreement (Borrowing Base
Certificate) is hereby deleted in its entirety and the new Exhibit B-1 attached
hereto shall be inserted in lieu thereof.
3. Consent to Addition of Real Property Collateral. The Lender
Group hereby consents to the inclusion of the Additional Properties to the
Collateral securing the Obligations.
4. Conditions Precedent to Amendment. The satisfaction of each of
the following, unless waived or deferred by Agent in its sole discretion, shall
constitute conditions precedent to the effectiveness of this Amendment and each
and every provision hereof:
(a) Agent shall have received this Amendment, duly
executed by the parties hereto, and the same shall be in full force and effect.
(b) Agent shall have received a reaffirmation and consent
substantially in the form attached hereto as Exhibit A, duly executed and
delivered by each Guarantor.
(c) The representations and warranties in this Amendment,
the Loan Agreement and the other Loan Documents shall be true and correct in all
respects on and as of the date hereof, as though made on such date (except to
the extent that such representations and warranties relate solely to an earlier
date).
(d) After giving effect to this Amendment, no Event of
Default or event which with the giving of notice or passage of time would
constitute an Event of Default shall have occurred and be continuing on the date
hereof, nor shall result from the consummation of the transactions contemplated
herein.
(e) No injunction, writ, restraining order, or other
order of any nature prohibiting, directly or indirectly, the consummation of the
transactions contemplated herein shall have been issued and remain in force by
any Governmental Authority against Borrower, Holdings, Agent or any Lender, or
any of their respective Affiliates.
(f) Agent shall have received an amendment fee in the
amount of $300,000, which amount the Obligors authorize Agent, for the benefit
of the Lenders, to charge to the Loan Account; provided that if the Obligors
terminate the Loan Agreement and pay the Obligations in full (including
providing cash collateral to Agent, for the benefit of the Lender Group, in an
amount equal to 105% of the maximum amount of the Lender Group's obligations
under outstanding Letters of Credit or causing such Letters of Credit to be
returned to Agent) on or before January 31, 2003, Agent shall refund $100,000 of
such fee to the Obligors.
(g) Agent shall have received an opinion of Obligors'
counsel in form and substance satisfactory to Agent in its Permitted Discretion.
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(h) The Obligors shall have complied with the following
with respect to the Additional Properties:
(1) Agent shall have received Mortgages with
respect to the , Additional Properties, in form and substance
satisfactory to Agent, duly executed, and each such Mortgage
shall be in full force and effect.
(2) Agent shall have received real estate
appraisals, in form and substance, and from real estate
appraisers, satisfactory to Agent with respect to each of the
Additional Properties.
(3) Agent shall have received title reports and
title insurance policies, in form and substance, and from
title companies, satisfactory to Agent with respect to each of
the Additional Properties.
(4) Agent shall have received such environmental
reports with respect to each of the Additional Properties, and
the environmental consultants retained for such reports, the
scope of the reports, and the results of the reports shall be
satisfactory to Agent, in its Permitted Discretion.
5. Release. To the extent permitted by applicable law, each
Obligor, and its respective predecessors, successors and assigns, hereby fully,
finally, irrevocably, forever and unconditionally releases, discharges and
acquits each member of the Lender Group and such member of the Lender Group's
officers, employees and agents, from all Released Claims (as hereinafter
defined). As used herein the term "Released Claims" means all claims of an
Obligor against any member of the Lender Group, including but not limited to all
claims, demands, obligations, liabilities, indebtedness, responsibilities,
disputes, breaches of contract, breaches of duty or any relationship, acts,
omissions, misfeasance, malfeasance, cause or causes of action (whether at law
or in equity), debts, sums of money, accounts, compensations, contracts,
controversies, promises, damages, costs, rights of offset, losses and expenses,
of every type, kind, nature, description or character, known and unknown,
whensoever arising and occurring at any time up to and through the date hereof,
whether known or unknown, suspected or unsuspected, liquidated or unliquidated,
matured or unmatured, fixed or contingent, which in any way arise out of, are
connected with or relate to the Loan Documents or the administration of the
lender-borrower relationship provided in the Loan Documents.
6. Waiver of Statutory Benefits. The Obligors intend that, to the
extent permitted by applicable law, the foregoing release shall be effective as
a full and final accord and satisfaction of Released Claims, and each Obligor
hereby agrees, represents and warrants that, to the extent permitted by
applicable law, the matters released herein are not limited to matters which are
known or disclosed. In this connection, each Obligor hereby agrees, represents
and warrants that it realizes and acknowledges that (a) factual matters now
existing and unknown to it may have given or may hereafter give rise to Released
Claims which are presently unknown, unsuspected, unliquidated, unmatured and/or
contingent, (b) such Released Claims may be unknown, unsuspected, unliquidated,
unmatured and/or contingent due to ignorance, oversight, error, negligence or
otherwise, and (c) if such Released Claims had been known, suspected,
liquidated, matured and/or unconditional, such Obligor's decision to enter into
this release may have been
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materially affected. Each Obligor further agrees, represents and warrants that
this release has been negotiated and agreed upon in view of these realizations.
Nevertheless, each Obligor hereby intends, to the extent permitted by applicable
law, to release, discharge, and acquit the Lender Group of and from any such
unknown, unsuspected, unliquidated, unmatured and/or contingent Released Claims
which are in any way set forth in or related to the matters identified
hereinabove. EACH OBLIGOR, TO THE EXTENT PERMITTED BY APPLICABLE LAW, HEREBY
EXPLICITLY WAIVES ALL RIGHTS UNDER AND ANY BENEFITS OF ANY COMMON LAW OR
STATUTORY RULE OR PRINCIPLE WITH RESPECT TO THE RELEASE OF SUCH CLAIMS,
INCLUDING, WITHOUT LIMITATION, SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH
PROVIDES AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH A CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.
EACH OBLIGOR, TO THE EXTENT PERMITTED BY APPLICABLE LAW, AGREES THAT NO SUCH
COMMON LAW OR STATUTORY RULE OR PRINCIPLE, INCLUDING SECTION 1542 OF THE
CALIFORNIA CIVIL CODE, SHALL AFFECT THE VALIDITY OR SCOPE OR ANY OTHER ASPECT OF
THIS RELEASE.
7. Representations and Warranties. Each of the Borrower and
Holdings hereby represents and warrants to the Agent that (a) the execution,
delivery, and performance of this Amendment and of the Loan Agreement, as
amended hereby, are within its powers, have been duly authorized by all
necessary action, and are not in contravention of any law, rule, or regulation,
or any order, judgment, decree, writ, injunction, or award of any arbitrator,
court, or Governmental Authority, or of the terms of its Governing Documents, or
of any contract or undertaking to which it is a party or by which any of its
properties may be bound or affected, (b) this Amendment and the Loan Agreement,
as amended hereby, constitute its legal, valid, and binding obligation,
enforceable against it in accordance with its terms, and (c) this Amendment has
been duly executed and delivered by it.
8. Choice of Law. The validity of this Amendment, its
construction, interpretation and enforcement, the rights of the parties
hereunder, shall be determined under, governed by, and construed in accordance
with the laws of the State of California.
9. Counterparts; Telefacsimile Execution. This Amendment may be
executed in any number of counterparts and by different parties and separate
counterparts, each of which when so executed and delivered, shall be deemed an
original, and all of which, when taken together, shall
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constitute one and the same instrument. Delivery of an executed counterpart of a
signature page to this Amendment by telefacsimile shall be effective as delivery
of a manually executed counterpart of this Amendment. Any party delivering an
executed counterpart of this Amendment by telefacsimile also shall deliver a
manually executed counterpart of this Amendment, but the failure to deliver a
manually executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.
10. Effect on Loan Documents.
(a) The Loan Agreement, as amended hereby, and each of
the other Loan Documents shall be and remain in full force and effect in
accordance with its respective terms and hereby is ratified and confirmed in all
respects. The execution, delivery, and performance of this Amendment shall not,
except as expressly set forth herein, operate as a waiver of or, except as
expressly set forth herein, as an amendment of, any right, power, or remedy of
Agent or any Lender under the Loan Agreement, as in effect prior to the date
hereof. The waivers, consents, and modifications herein are limited to the
specifics hereof, shall not apply with respect to any facts or occurrences other
than those on which the same are based, shall not excuse future non-compliance
with the Loan Agreement, and shall not operate as a consent to any further or
other matter, under the Loan Documents.
(b) Upon and after the effectiveness of this Amendment,
each reference in the Loan Agreement to "this Agreement", "hereunder", "herein",
"hereof" or words of like import referring to the Loan Agreement, and each
reference in the other Loan Documents to "the Agreement", "thereunder",
"therein", "thereof" or words of like import referring to the Loan Agreement,
shall mean and be a reference to the Loan Agreement as modified and amended
hereby.
(c) To the extent that any terms and conditions in any of
the Loan Documents shall contradict or be in conflict with any terms or
conditions of the Loan Agreement, after giving effect to this Amendment, such
terms and conditions are hereby deemed modified or amended accordingly to
reflect the terms and conditions of the Loan Agreement as modified or amended
hereby.
11. Further Assurances. Each of Borrower and Holdings shall
execute and deliver all agreements, documents, and instruments, in form and
substance satisfactory to Agent, and take all actions as Agent may reasonably
request from time to time, to perfect and maintain the perfection and priority
of Agent's security interests in the Collateral (for the benefit of the Lenders)
and to fully consummate the transactions contemplated under this Amendment and
the Loan Agreement.
12. Entire Agreement. This Amendment, together with all other
instruments, agreements, and certificates executed by the parties in connection
herewith or with reference thereto, embody the entire understanding and
agreement between the parties hereto and thereto with respect to the subject
matter hereof and thereof and supersede all prior agreements, understandings,
and inducements, whether express or implied, oral or written.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have entered into this Amendment as of
the date first above written.
SHOLODGE, INC., a Tennessee corporation
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Title: Executive Vice President
THE HOTEL GROUP, INC., a Kansas corporation
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Title: Executive Vice President
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent and as a
Lender
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Title: Vice President
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EXHIBIT A
REAFFIRMATION AND CONSENT
Dated as of November 26, 2002
Reference hereby is made to that certain Amendment Number Two to Loan
and Security Agreement, dated as of the date hereof (the "Amendment"), among
ShoLodge, Inc., a Tennessee corporation ("Holdings"), The Hotel Group, Inc., a
Kansas corporation ("Borrower and together with Holdings, the "Obligors"),
Foothill Capital Corporation, a California corporation, as Agent ("Agent") and
as a Lender and the lenders signatory thereto. Capitalized terms used herein
shall have the meanings ascribed to them in that certain Loan and Security
Agreement, dated as of August 27, 1999 (as amended, restated, supplemented, or
otherwise modified from time to time, the "Loan Agreement"), between the
Obligors, Agent and the Lenders signatory thereto. Each of the undersigned
hereby (a) represents and warrants to Agent that the execution, delivery, and
performance of this Reaffirmation and Consent ("Consent") are not in
contravention of any law, rule, or regulation, or any order, judgment, decree,
writ, injunction, or award of any arbitrator, court, or Governmental Authority
or of any contract or undertaking to which it is a party or by which any of its
properties may be bound or affected; (b) consents to the amendment of the Loan
Agreement by the Amendment; (c) acknowledges and reaffirms all obligations owing
by it to the Lender Group under any Loan Document to which it is a party;(d)
agrees that each Loan Document to which it is a party is and shall remain in
full force and effect, and (e) ratifies and confirms its consent to any previous
amendments of the Loan Agreement. Although the undersigned have been informed of
the matters set forth herein and have acknowledged and agreed to same, the
undersigned understand that Agent shall have no obligation to inform the
undersigned of such matters in the future or to seek the undersigned's
acknowledgement or agreement to future amendments or modifications, and nothing
herein shall create such a duty.
IN WITNESS WHEREOF, the undersigned have executed this Consent as of
the date first set forth above.
SHOLODGE, INC.,
a Tennessee corporation
By
-------------------------------------
Title:
A-1
▇▇▇▇▇▇ VENTURES, INC.,
a Tennessee corporation formerly known as
Airport Inn, Inc. and successor by merger to
Shoney's Inn, Inc., Two Seventeen, Inc., Inn
Partners, Inc., Far West Inns, Inc. and
Delaware Inns, Inc.
By:
-------------------------------------
Title:
ALABAMA LODGING CORPORATION,
a Tennessee corporation
By:
-------------------------------------
Title:
CAROLINA INNS, INC.,
a Tennessee corporation
By:
-------------------------------------
Title:
SLI ENTERPRISES INC.,
a Tennessee corporation formerly known as
LAFLA Inn, Inc.
By:
-------------------------------------
Title:
MIDWEST INNS, INC.,
a Tennessee corporation
By:
-------------------------------------
Title:
A-2
MOBAT, INC.,
a Tennessee corporation
By:
-------------------------------------
Title:
SHONEY'S INN OF LEBANON, INC.,
a Tennessee corporation
By:
-------------------------------------
Title:
SOUTHEAST TEXAS INNS, INC.,
a Tennessee corporation
By:
-------------------------------------
Title:
SUNSHINE INNS, INC.,
a Tennessee corporation
By:
-------------------------------------
Title:
VIRGINIA INNS, INC.,
a Tennessee corporation
By:
-------------------------------------
Title:
A-3
▇▇▇▇▇ AND ASSOCIATES, INC.,
a Tennessee corporation
By:
-------------------------------------
Title:
NASHVILLE AIR ASSOCIATES, INC.,
a Tennessee corporation
By:
-------------------------------------
Title:
A-4
SCHEDULE A-1
SHOLODGE, INC.
FOOTHILL CAPITAL CORPORATION CREDIT FACILITY
AMENDMENT #2 - NOVEMBER, 2002
10/31/2002
------------------------------------------------------------------------------------------------------------------------------------
PROPERTIES THE TRAILING BALANCE MORTGAGE VALUE
SUBJECT OF PAYEE/ 12 MONTHS MORTGAGE NOTE/ ADVANCE MAXIMUM VALUE ESTIMATES
PLEDGED NOTES OBLIGOR ROOMS NOI NOTE NOI RATE ADVANCE ESTIMATES* AT 65%
---------------- -------- ------ --------- --------- -------- ------- ---------- ----------- ----------
BATON ROUGE, LA BORROWER 197 401,862 6,252,873 15.56 85% 5,314,942 3,700,000 2,405,000
DELAWARE BORROWER 142 499,368 5,439,890 10.89 85% 4,623,906 3,500,000 2,275,000
DOUGLASVILLE, GA BORROWER 92 230,059 4,045,731 17.59 85% 3,438,871 3,200,000 2,080,000
GALLATIN, TN BORROWER 86 - 1,776,042 #DIV/0! 85% 1,509,635 800,000 520,000
GREENSBORO, NC BORROWER 115 259,964 4,358,707 16.77 85% 3,704,901 3,000,000 1,950,000
INDEPENDENCE, MO BORROWER 114 220,501 3,473,634 15.75 85% 2,952,589 2,600,000 1,690,000
NEW ORLEANS, LA BORROWER 145 737,923 4,668,399 6.33 85% 3,968,139 4,000,000 2,600,000
LAFAYETTE, LA BORROWER 105 213,738 2,704,420 12.65 85% 2,298,757 1,600,000 1,040,000
PENSACOLA, FL BORROWER 115 164,175 3,861,874 23.52 85% 3,282,593 2,450,000 1,592,500
TALLAHASSEE, FL BORROWER 112 250,590 2,699,791 10.77 85% 2,294,822 2,600,000 1,690,000
TUSCALOOSA, AL BORROWER 113 95,694 1,640,710 17.15 85% 1,394,604 1,500,000 975,000
BOSSIER CITY, LA BORROWER 121 296,914 4,490,016 15.12 85% 3,816,514 2,400,000 1,560,000
DEMONBREUN, TN HOLDINGS 147 454,262 6,764,504 14.89 85% 5,749,828 4,300,000 2,795,000
JACKSON, MS BORROWER 137 202,420 2,688,717 13.28 85% 2,285,410 1,600,000 1,040,000
MURFREESBORO, TN HOLDINGS 125 221,932 3,040,517 13.70 85% 2,584,440 1,800,000 1,170,000
--------------------------------------------- -------------------------------------
TOTALS 1,866 4,249,403 57,905,825 13.63 85% 49,219,951 39,050,000 25,382,500
--------------------------------------------- -------------------------------------
PROPERTIES THE
SUBJECT OF
PLEDGED MORTGAGES
ALBUQUERQUE, NM HOLDINGS 125 906,586 4,225,000 6,500,000 4,225,000
HATTIESBURG, MS HOLDINGS 92 501,988 2,405,000 3,700,000 2,405,000
--------------------------------------------- -------------------------------------
SUBTOTALS 217 1,408,574 6,630,000 10,200,000 6,630,000
--------------------------------------------- -------------------------------------
TOTALS 2,083 5,657,977 57,905,825 12.60 85% 55,849,951 49,250,000 32,012,500
============================================= =====================================
NOTE: NOI OF THE PROPERTIES THE SUBJECT OF PLEDGED NOTES IS FOR THE 12 MONTHS
ENDED OCTOBER 31, 2002.
* BASED UPON VALUES ESTIMATED BY TRIGILD CORPORATION PER FOOTHILL CAPITAL
CORPORATION IN 2002.
SCHEDULE 1.1
GO-FORWARD RESERVE CALCULATION EXAMPLE
GO FORWARD RESERVE:
Aggregate NOI for 4 quarters ended (Initially 9/30/01)
--------------
minus Aggregate NOI for 4 quarters ended (Initially 9/30/02) -
============== ==================
= decline in Aggregate NOI
Decline in Aggregate NOI
------------------
divided by Aggregate NOI for 4 quarters ended (Initially 9/30/01) divided by
-------------- ------------------
times Aggregate NOI for 4 quarters ended (Initially 9/30/02) x
-------------- ------------------
= Aggregate NOI percentage decline
divided by 4 divided by 4
------------------
= Average Quarterly NOI Decline
times 5 x 5
------------------
Equals GO FORWARD RESERVE
==================
EXHIBIT B-1
BORROWING BASE CERTIFICATE
OBLIGORS: THE HOTEL GROUP, INC.
SHOLODGE, INC.
DATE: ______________________
COMPUTATION OF COLLATERAL PURSUANT TO SECTION 2.1(a)(x)(i)
A. Aggregate Principal Balance of Pledged Notes (as of _____)
__________________
B. Ineligible Pledged Notes for prior month end ___________________
C. Eligible Notes (A minus B) _________________
D. LOAN VALUE OF ELIGIBLE NOTES (85% of C) ______________
E. Market Value of the Real Property Collateral (as of _______) __________
F. LOAN VALUE OF REAL PROPERTY COLLATERAL (65% of E) ________________
G. SUM OF D AND F (Section 2.1(a)(x)(i)) __________________
COMPUTATION OF COLLATERAL PURSUANT TO SECTION 2.1(a)(x)(ii)
H. Market Value of the Underlying Real Property Collateral that secures
the Pledged Notes that are Eligible Notes (as of _______)
________________
I. Market Value of the Real Property Collateral (as of _______)
_________________
J. Market Value of Real Property Collateral and Underlying Real Property
Collateral (H plus I) _________________
K. LOAN VALUE OF REAL PROPERTY COLLATERAL AND UNDERLYING REAL PROPERTY
COLLATERAL (65% of J) (2.1(a)(x)(ii)) __________________
COMPUTATION OF COLLATERAL PURSUANT TO SECTION 2.1(a)(x)(iii)
L. Aggregate NOI for immediately preceding 12 month period (as of _____)
____________
M. Applicable NOI Multiple __________
N. NOI LIMIT AMOUNT (L times M) (Section 2.1(a)(x)(iii)) _________________
▇-▇-▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇. ▇▇▇▇▇ ▇▇ ▇, ▇ and N ___________________
P. Reserves (Section 2.1(a)(y)) ________________
Q. BORROWING BASE (O minus P) _______________
COMPUTATION OF AVAILABILITY
R. TOTAL AVAILABILITY (THE LESSER OF: (1) $20,000,000 MINUS LETTER OF
CREDIT USAGE OR (2) Q MINUS OUTSTANDING PRINCIPAL BALANCE OF THE TERM
LOAN MINUS LETTER OF CREDIT USAGE) ___________________
S. Outstanding Advances per previous Borrowing Base Certificate __________
T. Net Advances/repayments since previous Borrowing Base Certificate _____
U. Adjusted outstanding Advances (S plus/minus T) _________________
V. EXCESS AVAILABILITY (R MINUS U) _________________
The undersigned represents and warrants that the foregoing is true, complete,
and correct, and that the information reflected in this Borrowing Base
Certificate complies with the representations, warranties, definitions and
conditions set forth in the Loan and Security Agreement, dated as of August 27,
1999, among the undersigned, the financial institutions identified therein as
"Lenders", and Foothill Capital Corporation, a California corporation, as agent
for the Lenders.
SHOLODGE, INC., for itself and THE HOTEL GROUP, INC.
By:
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Name:
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Title: Responsible Officer
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