5. Debt

Credit Facility. As of December 31, 2011, the Company had a secured credit facility with a syndicated bank group comprised of BB&T, Key Bank National Association and Manufacturers and Traders Trust Company.

On February 19, 2009, the Company entered into a third amendment to its credit agreement modifying certain provisions of the agreement as well as increasing the rate of interest on the credit facility by 1.125%.

On June 4, 2010, the Company entered into a fifth amendment to its credit agreement modifying certain provisions of the agreement including an increase in the rate of interest to LIBOR plus additional interest of 4.00%; a LIBOR floor of 0.75%; a conversion to a non-revolving facility; a provision for mandatory quarterly pre-payments based on excess cash flow, as defined in the amendment, as well as a mandatory prepayment if the Company raises equity within certain parameters; and provides an option to extend the maturity for one year if certain conditions are met.

On April 18, 2011, the Company entered into a sixth amendment to the credit agreement which, among other things, (i) extends the final maturity date of advances under the credit agreement to May 8, 2014; (ii) provides that no additional advances may be made and no currently outstanding advances subsequently repaid or prepaid may be re-borrowed; (iii) adjusts the release amounts with respect to secured hotel properties; (iv) reduces the additional interest from 4.00% to 3.50% and removes the LIBOR floor of 0.75%; and (v) adjusts certain financial covenants including restrictions relating to payment of dividends. In connection with the amendment, the Company reduced the outstanding balance on its existing credit facility by approximately $22.7 million.

The Company had borrowings under the credit facility of approximately $25.5 million and approximately $75.2 million at December 31, 2011 and December 31, 2010, respectively.

At December 31, 2011, the credit facility was secured by the Hilton Philadelphia Airport and the Crowne Plaza Tampa Westshore, as well as a lien on all business assets of those properties including, but not limited to, equipment, accounts receivable, inventory, furniture, fixtures and proceeds thereof. At December 31, 2011, the two properties had a net carrying value of approximately $60.4 million. Under the terms of the credit agreement, the Company must satisfy certain financial and non-financial covenants. The Company was in compliance with all required covenants as of December 31, 2011.

Mortgage Debt. As of December 31, 2011, the Company had approximately $94.2 million of outstanding mortgage debt. The following table sets forth the Company's mortgage debt obligations on our hotels.

Property

Balance Outstanding as of

Prepayment
Penalties

Maturity
Date

Amortization
Provisions

Interest Rate

December 31,
2011

December 31,
2010

Crowne Plaza Hampton Marina

8,151,625

9,000,000

None

06/2012

16,000

⁽¹⁾

LIBOR plus 4.55

%⁽²⁾

Crowne Plaza Jacksonville Riverfront

14,000,000

18,000,000

None

⁽³⁾

01/2013

Interest Only

8.00

DoubleTree by Hilton Brownstone – University

7,980,385

—

Yes

⁽⁴⁾

10/2016

⁽⁵⁾

25 years

5.25

Hilton Savannah DeSoto

22,488,916

22,867,464

⁽⁶⁾

07/2017

25 years

⁽ ⁷ ⁾

6.06

Hilton Wilmington Riverside

21,884,909

22,324,789

⁽⁶⁾

03/2017

25 years

⁽ ⁸ ⁾

6.21

Holiday Inn Laurel West

7,451,990

—

Yes

⁽ ⁹ ⁾

08/2021

25 years

5.25

%⁽ ¹⁰ ⁾

Sheraton Louisville Riverside

12,200,000

—

⁽¹¹⁾

01/2017

25 years

6.24

Total

94,157,825

72,192,253

(1)	The Company is required to make monthly principal payments of $16,000.

(2)	The note bears a minimum interest rate of 5.00%.

(3)	The note could not be prepaid prior to July 2009, but a prepayment may be made currently without penalty.

(4)	The note may be partially prepaid to a maximum of 20% of the original loan amount without penalty. Pre-payment greater than 20% of the original loan amount can be made with penalty until 180 days before the original maturity or as extended maturity, if applicable.

(5)	The note provides that after five years, the mortgage can be extended if certain conditions have been satisfied for additional five year period at a rate of 3.00% per annum plus the then-current 5-year U.S. Treasury rate of interest.

(6)	The notes may not be prepaid during the first six years of the terms. Prepayment can be made with penalty thereafter until 90 days before maturity.

(7)	The note provided for payments of interest only until August 2010 after which payments of principal and interest under a 25-year amortization schedule are due until the note matures in July 2017.

(8)	The note provided for payments of interest only until March 2009 after which payments of principal and interest under a 25-year amortization schedule are due until the note matures in March 2017.

(9)	Pre-payment can be made with penalty until 180 days before the fifth anniversary of the commencement date of the loan or from such date until 180 days before the maturity.

(10)	The note provides that after five years, the rate of interest will adjust to a rate of 3.00% per annum plus the then-current 5-year U.S. Treasury rate of interest, with a floor of 5.25%.

(11)	With limited exception, the note may not be prepaid until two months before maturity.

Total mortgage debt maturities, without respect to any extension of loan maturity, as of December 31, 2011 were as follows (in thousands):


December 31, 2012	$	9,551
December 31, 2013		15,499
December 31, 2014		1,592
December 31, 2015		1,690
December 31, 2016		8,880
December 31, 2017 and thereafter		56,946

Total future maturities	$	94,158

Loan from Carlyle Affiliate Lender. On February 9, 2009, the indirect subsidiary of the Company which is a member of the joint venture entity that owns the Crowne Plaza Hollywood Beach Resort, borrowed $4.75 million from the Carlyle Affiliate Lender for the purpose of improving the Company's liquidity. In June 2008, the joint venture that owns the property purchased a junior participation in a portion of the mortgage loan from the lender. The amount of the loan from the Carlyle Affiliate Lender approximated the amount the Company contributed to the joint venture to enable the joint venture to purchase its interest in the mortgage loan. The interest rate and maturity date of the loan are tied to a note that is secured by a mortgage on the property. The loan, which currently bears a rate of LIBOR plus additional interest of 3.00%, requires monthly payments of interest and principal payments equal to 50.0% of any distributions it receives from the joint venture. The mortgage to which the loan is tied matures in August 2014. The outstanding balance on the loan at December 31, 2011 and December 31, 2010 was $4,275,220 and $4,493,970, respectively.

Available Bridge Financing. On April 18, 2011, the Company entered into an agreement with Essex Equity High Income Joint Investment Vehicle, LLC, pursuant to which the Company had the right to borrow up to $10.0 million before the earlier of December 31, 2011 or the redemption in full of the Preferred Stock. On December 21, 2011, the Company entered into an amendment to the agreement extending the right to borrow the remainder of the available financing to May 31, 2013. The principal amount borrowed bears interest at the rate of 9.25% per annum, payable quarterly in arrears. The Bridge Financing will mature on April 18, 2015 or upon the redemption in full of the Preferred Stock, if earlier. The outstanding balance may be prepaid at the Company's option in whole or in part at any time without penalty. Further, the Company is obligated (i) to make prepayments in the event of, and to the extent of the proceeds from, new equity issuances, certain debt incurrences and sales of assets which do not secure the Company's obligations under the Company's credit agreement and (ii) to repay the Bridge Financing in full following certain trigger events which also give rise to an obligation to redeem the outstanding shares of Preferred Stock. The agreement provides for certain future securities pledges and/or asset liens to be granted from time to time to the lender to secure the Bridge Financing, under the circumstances and upon the conditions set forth in the agreement. At December 31, 2011, the Company had borrowings under the Bridge Financing of $5.0 million.