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EXHIBIT 10.101
 

 
SECOND AMENDMENT TO
 
LOAN AND SECURITY AGREEMENT
 
THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated
as of February 9, 2005, but effective as of October 13, 2004, is made by and
among CNL HOSPITALITY PARTNERS, LP, a limited partnership organized under the
laws of the state of Delaware (the “Borrower”); CNL HOTELS & RESORTS, INC., a
corporation organized under the laws of the State of Maryland (“CNL REIT”) as a
Guarantor; DEUTSCHE BANK TRUST COMPANY AMERICAS (“DBTCA”), as a Lender and as
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”); and the other Lenders party to the Loan Agreement (as hereinafter
defined).
 
R E C I T A L S:
 
Borrower and DBTCA are parties to a Loan and Security Agreement, made and dated
as of the 13th day of October, 2004, by and among Borrower, CNL REIT, the
Lenders from time to time party thereto, and Administrative Agent, as amended by
a First Amendment to Loan and Security Agreement dated as of December 7, 2004
(as so amended, the “Loan Agreement”). Terms used but not defined herein shall
have the respective meanings ascribed to such terms in Annex 1 to the Loan
Agreement (the “Glossary”), as amended hereby.
 
The parties hereto have agreed to amend certain provisions of the Loan Agreement
as herein provided.
 
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows, effective as of the date
hereof:
 
Section 1.  Cash Management Collateral Accounts.
 
1.1  Each of Section 8.1 of the Loan Agreement and the Glossary is amended
hereby to delete all references to the Debt Service Account. In furtherance of
the deletion of the concept of the Debt Service Account, Paragraph (4) of
Section 8.1 of the Loan Agreement is amended hereby to read as follows:
 
“(4) Disbursements from Collateral Account.
 
“(i) Subject to Section 8.1(1), the Borrower hereby irrevocably authorizes the
Administrative Agent to transfer or allocate, as applicable, and the
Administrative Agent shall transfer or allocate (or cause DBTCA to transfer or
allocate pursuant to disbursement instructions from the Administrative Agent),
as applicable, from the Payments Account, funds in the amounts, at the times and
in the order of priority, as follows:
 

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“(a) for the payment of Debt Service funds equal all interest to be paid on the
next applicable Payment Dates in respect of all Interest Periods then
outstanding (e.g., in the event there are multiple Interest Periods then
outstanding, the amount deposited would equal the aggregate of all sums payable
on the next Payment Date applicable to each such Interest Period);
 
“(b) during any Low DSCR Period or if a Noticed Event of Default shall have
occurred and is then continuing, on the 15th day of each calendar month (or the
next succeeding Business Day with respect to any month in which the 15th day is
not a Business Day), funds in an amount equal to the balance (if any) deposited
in the Payments Account to the extent remaining after the foregoing allocation
set forth in Section 8.1(4)(i)(a) and apply the same, to the prepayment of the
Loan and payment of accrued but unpaid interest on the amount prepaid, pursuant
to Sections 3.3.(2)(E) and 3.3(3) (and all amounts payable pursuant to
Section 2.8 as a result of such prepayment); and
 
“(c) provided no Noticed Event of Default or Low DSCR Period shall have occurred
and is then continuing, on the 1st day of each calendar month (or the next
succeeding Business Day with respect to any month in which the 1st day is not a
Business Day), funds in an amount equal to the balance (if any) deposited in the
Payments Account to the extent remaining after the foregoing allocation and
deposit set forth in Sections 8.1(4)(i)(a) through (b) (the “Excess Cash Flow”)
and transfer the same to the Borrower’s Account free of any Lien or continuing
security interest.
 
“(ii) Not less than five (5) days prior to each Payment Date, Administrative
Agent shall notify the Borrower of the balance on deposit in the Payments
Account (or in the Suspense Account) allocated for the payment of Debt Service
as of such notice date. On any Payment Date, any deficiency in amounts on
deposit in the Payments Account (or in the Suspense Account) relative to the
Debt Service required to be paid on such date shall constitute an Event of
Default hereunder; provided, that if the Administrative Agent has not provided
timely notice of the balance on deposit in the Payments Account (or in the
Suspense Account) allocated for the payment of Debt Service prior to such
Payment Date pursuant to the preceding sentence, such Event of Default will only
occur if the Debt Service required to be paid on such Payment Date remains
unpaid in full five (5) days following the earlier of the date such notice is
provided or the date the notice contemplated by the following sentence is
provided. Upon the occurrence of a deficiency in the Payments Account (or in
amounts held in the Suspense Account) allocated for the payment of Debt Service
on any Payment Date relative to the Debt Service required to be paid on such
date, Administrative Agent shall notify Borrower of said deficiency within five
(5) Business Days thereafter; provided, however, Administrative Agent’s failure
to notify Borrower shall not be deemed a waiver of any Event of Default arising
from such deficiency. Notwithstanding anything to the contrary contained in this
Agreement or in the other Loan Documents, no Event of Default shall be deemed to
have occurred hereunder or thereunder (and no Default Rate shall be applicable)
in the event funds sufficient for a required transfer are held in an appropriate
Collateral Account and the Administrative Agent or DBTCA fails to timely make
any transfer from such Collateral Account as contemplated by this Agreement.
 

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“(iii) Notwithstanding anything to the contrary contained herein or in the
Security Instruments, but subject to Section 7.4(3), to the extent that the
Borrower shall fail to pay any mortgage recording tax, costs, expenses or other
amounts pursuant to Section 7.1(23) of this Agreement within the time period set
forth therein, the Administrative Agent shall have the right, at any time, upon
five (5) Business Days’ notice to the Borrower, to withdraw from funds
constituting Excess Cash Flow in the Payments Account, an amount equal to such
unpaid taxes, costs, expenses and/or other amounts and pay such amounts to the
Person(s) entitled thereto.
 
“(iv) Subject to Section 8.1(1), the Borrower irrevocably authorizes the
Administrative Agent to make and, provided no Event of Default shall have
occurred and be continuing, the Administrative Agent hereby agrees to make, to
the extent of the monies on deposit in the Payments Account allocated for
payment of Debt Service, payment of funds from such account to the
Administrative Agent sufficient to pay Debt Service on each Payment Date, and
the Administrative Agent, on each Payment Date, shall apply such funds to the
payment of the Debt Service payable on such Payment Date.”
 
1.2  The definition of “Debt Service Account” in the Glossary is deleted hereby.
 
Section 2.  Refinancing of the Hotel del Coronado.
 
2.1  Notwithstanding anything to the contrary contained in the Loan Agreement,
in the event that a refinancing of the existing Indebtedness secured by the
Project commonly known as the “Hotel del Coronado” for a maximum cumulative
principal amount of up to $410,000,000 (the “HDC Refinancing”) is consummated,
the Net Cash Proceeds of the HDC Refinancing shall not be required to be applied
to the prepayment of the outstanding principal balance of the Loan under Section
3.3(2)(C) of the Loan Agreement but may be used for any general corporate
purpose of CNL REIT, Borrower or any of their respective Subsidiary Entities.
 
Section 3.  Glossary Modifications.
 
3.1  The definition of “Cash Available for Distribution” in the Glossary is
amended hereby to read as follows:
 
“Cash Available for Distribution” shall mean, for any period, (i) EBITDA for
such period, less (ii) the aggregate amount of scheduled principal repayments on
Indebtedness of the Consolidated Entities required to be made during such period
(other than optional principal prepayments and Bullet Payments), less (iii)
Interest Expense payable during such period, less (iv) Tax Expense payable
during such period, less (v) FF&E Reserves, plus (vi) any amounts actually
expended for FF&E and other capital expenditures and deducted in determining Net
Income.
 
3.2  The definition of “EBITDA” in the Glossary is amended hereby to read as
follows:
 

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“EBITDA” shall mean, for any period, solely with respect to the Consolidated
Entities, Net Income, plus (without duplication) (A) Interest Expense, (B) Tax
Expense, and (C) Depreciation and Amortization Expense, in each case for such
period, provided that (x) EBITDA shall exclude minority interests and the
results of unconsolidated subsidiaries, and (y) with respect to Section
7.2(22)(A) of the Loan Agreement, EBITDA for any period shall be adjusted on a
pro forma basis to include (or exclude) amounts attributable to hotel operations
acquired (or sold) during such period as if such acquisition (or disposition)
had occurred on the first day of such period.
 
3.3  The definition of “FF&E Reserves” in the Glossary is amended hereby to read
as follows:
 
“FF&E Reserves” shall mean, with respect to any Mortgaged Property or Person for
any period, and without duplication, an assumed reserve for FF&E and other
capital expenditures equal to four percent (4%) of gross hotel operating
revenues of such Mortgaged Property or such Person’s Projects, as applicable,
for such period.
 
3.4  The definition of “Permitted Debt” in the Glossary is amended hereby to
delete the word “and” at the end of clause (iv) and insert the following after
clause (v):
 
“(vi) the HDC Refinancing; and
 
“(vii) the TRS Lease Guaranty.”
 
3.5  The Glossary is amended hereby to add the following definition:
 
“TRS Lease Guaranty” shall mean the guaranty(ies) relating to the limited
service Marriott-flagged Projects commonly known as the Marriott Village Hotels
at Little Lake Bryan, located in Orange County, Florida (the “LLB Projects”), in
the maximum aggregate amount of the difference of (i) $6,000,000 per year minus
(ii) the amount of all net cash flow received by the LLB Lessee (as hereinafter
defined) from the LLB Projects during such year, made by CNL REIT and/or
Borrower, as guarantor, to CNL LLB SHS Management, LP, CNL LLB F-Inn Management,
LP and CNL LLB C-Hotel Management, LP (collectively, “LLB Lessor”), as the
beneficiaries, of the rent obligations of LLB Tenant Corporation or its
successor(s) as the Subsidiary “TRS” tenant of the LLB Projects (“LLB Lessee”)
under the leases, dated on or about October 12, 2000, between LLB Lessor and LLB
Lessee for the LLB Projects (the “LLB Leases”) or any replacement “TRS” leases
for the LLB Projects which replacement leases have no greater minimum rent
payable thereunder in aggregate than under the LLB Leases.
 
Section 4.  Merger of RFS and Borrower.
 
4.1  Notwithstanding anything to the contrary contained in the Loan Agreement
(including, without limitation, Sections 7.2 and 7.5 of the Loan Agreement), CNL
REIT is permitted hereby to effect one or more Transfers pursuant to which RFS
Partnership, L.P. shall be merged into or become a direct subsidiary of
Borrower, and the constituent and subsidiary entities of RFS Partnership, L.P.
appropriately merged into the balance of the CNL REIT corporate structure
consistent with the core organizational structure of CNL REIT and Borrower, as
CNL REIT’s “operating partnership.”
 
Section 5.  Assignment of the TRS Lease Guaranty.
 
5.1  In conjunction with the recent restructuring of the management, LLB Leases
and operation of the LLB Projects, LLB Lessor may assign the TRS Lease Guaranty
to the lender (or agent for the lenders) under the Permitted Debt secured by the
LLB Projects if such assignment is required by such lender (or agent for the
lenders) as a condition of approval of such restructuring.
 
Section 6.  Leverage.
 
6.1  The preamble to Section 7.2(22)(A) is modified hereby to read as follows:
 
“Maximum Leverage. At any time during the periods indicated below, the ratio of
Total Liabilities as of the end of the Fiscal Quarter then most recently ended
to EBITDA for the four Fiscal Quarters then most recently ended, shall not be
less than the ratios set forth below:”
 
Section 7.  Expenses.
 
7.1  Borrower hereby acknowledges and agrees that it shall be responsible for
the payment of any out-of-pocket costs, fees and expenses of Administrative
Agent incurred in connection with the preparation, negotiation, execution or
delivery of this Amendment (including, without limitation, the fees and
disbursements of counsel to Administrative Agent).
 
Section 8.  Covenants, Representations and Warranties.
 
8.1  Each of Borrower and CNL REIT hereby remakes all of its respective
representations and warranties contained in the Loan Documents, as amended
hereby, as of the date hereof.
 
8.2  Each of Borrower and CNL REIT hereby reaffirms all terms and covenants made
in the Loan Documents binding upon it as amended hereby or pursuant hereto.
 
8.3  Each of Borrower and CNL REIT hereby represents and warrants to
Administrative Agent and the Lenders that (a) this Amendment and the Loan
Agreement as modified and amended hereby, constitute the legal, valid and
binding obligation of Borrower and CNL REIT, enforceable against Borrower and
CNL REIT in accordance with their terms, and (b) the execution and delivery by
each of Borrower and CNL REIT of this Amendment has been duly authorized by all
requisite action on the part of Borrower and CNL REIT and will not violate any
provision of the organizational documents of Borrower or CNL REIT.
 

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8.4  Each of Borrower and CNL REIT hereby represents and warrants to
Administrative Agent and the Lenders that, as of the date hereof, (a) to
Borrower’s and CNL REIT’s knowledge, no Event of Default has occurred and is
continuing, and no Event of Default will occur as a result of the execution,
delivery and performance by Borrower and CNL REIT of this Amendment and (b) none
of the Transaction Parties has any offsets, defenses, counterclaims, set offs,
or similar rights with respect to its obligations of payment and performance
under the Loan Documents.
 
Section 9.  Effect Upon Loan Documents.
 
9.1  Except as specifically set forth herein, the Loan Documents shall remain in
full force and effect and are hereby ratified and confirmed. All references to
the “Loan Agreement” in the Loan Documents (or to “the Agreement” in the Loan
Agreement) shall mean and refer to the Loan Agreement as modified and amended
hereby.
 
9.2  The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of Administrative Agent or any
Lender under the Loan Documents, or any other document, instrument or agreement
executed and/or delivered in connection therewith.
 
Section 10.  Governing Law. THIS AMENDMENT SHALL BE CONSTRUED, INTERPRETED AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT
OF LAWS PRINCIPLES.
 
Section 11.  Counterparts. This Amendment may be executed in any number of
counterparts, and all such counterparts shall together constitute the same
agreement.
 
[REST OF PAGE INTENTIONALLY LEFT BLANK]
 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the day and year first above written.
 
BORROWER:
 
                                CNL HOSPITALITY PARTNERS, LP,
                                a Delaware limited partnership
 
By: CNL HOSPITALITY GP CORP., a Delaware Corporation
                                Its: general partner
 
By:  /s/ John X. Brady, Jr.
                                Name: John X. Brady, Jr.
                                Title:  Vice President 
 
CNL REIT: 
 
CNL HOTELS & RESORTS, INC.,
                                a Maryland corporation
 
By:  /s/ Mark E. Patten   
                                Name:  Mark E. Patten
                                Title: Senior Vice President
 

 

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ADMINISTRATIVE AGENT:
 
DEUTSCHE BANK TRUST COMPANY AMERICAS
 
By: /s/ George R. Reynolds
                                    Name: George R. Reynolds
                                    Title:   Vice President
 

 

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LENDERS:
 
DEUTSCHE BANK TRUST COMPANY AMERICAS
 
By:  /s/ George R. Reynolds
                                    Name:  George R. Reynolds
                                    Title:  Vice President
 

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