5. Debt

Credit Facility. During a portion of the six months ended June 30, 2012, 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. The credit facility was established during the second quarter of 2006 and replaced a $23.0 million secured, revolving credit facility with BB&T. On March 5, 2012, the Company extinguished the credit facility in conjunction with the refinance of the mortgage on the Hilton Philadelphia Airport.

Mortgage Debt. As of June 30, 2013 and December 31, 2012, the Company had approximately $134.9 million and $135.7 million of outstanding mortgage debt, respectively. The following table sets forth the Company’s mortgage debt obligations on its hotels as of June 30, 2013:

Balance Outstanding as of

Prepayment
Penalties

Maturity
Date

Amortization
Provisions

Interest Rate

Property

June 30, 2013

December 31, 2012

(unaudited)

Crowne Plaza Hampton Marina

5,999,500

7,559,625

None

06/2014

⁽¹⁾

16,000

⁽²⁾

LIBOR plus 4.55

%⁽³⁾

Crowne Plaza Jacksonville Riverfront

13,948,116

14,135,234

None

07/2015

⁽⁴⁾

25 years

LIBOR plus 3.00

Crowne Plaza Tampa Westshore

13,738,236

13,872,077

None

06/2017

25 years

5.60

DoubleTree by Hilton Brownstone – University

9,958,327

7,816,867

None

10/2016

⁽⁵⁾

25 years

5.25

Hilton Philadelphia Airport

29,118,931

29,502,666

None

08/2014

⁽⁶⁾

25 years

LIBOR plus 3.00

%⁽⁷⁾

Hilton Savannah DeSoto

21,822,392

22,051,314

Yes

⁽⁸⁾

07/2017

25 years

⁽⁹⁾

6.06

Hilton Wilmington Riverside

21,171,831

21,416,922

Yes

⁽⁸⁾

03/2017

25 years

⁽¹⁰⁾

6.21

Holiday Inn Laurel West

7,221,697

7,300,465

Yes

⁽¹¹⁾

08/2021

25 years

5.25

%⁽¹²⁾

Sheraton Louisville Riverside

11,914,659

12,019,262

⁽¹³⁾

01/2017

25 years

6.24

Total

134,893,689

135,674,432

(1)	The note provides that the mortgage can be extended until June 2015 if certain conditions have been satisfied.

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

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

(4)	The note provides that the mortgage can be extended until July 2016 if certain conditions have been satisfied.

(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 five-year U.S. Treasury rate of interest.

(6)	The note provides that the mortgage can be extended until March 2017 if certain conditions have been satisfied.

(7)	The note bears a minimum interest rate of 3.50%.

(8)	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.

(9)	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.

(10)	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.

(11)	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.

(12)	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 five-year U.S. Treasury rate of interest, with a floor of 5.25%.

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

Total mortgage debt maturities as of June 30, 2013 without respect to any additional loan extensions for the following twelve-month periods were as follows:


June 30, 2014	$	9,031,123
June 30, 2015		30,706,188
June 30, 2016		15,262,169
June 30, 2017		53,659,368
June 30, 2018		19,920,622
Thereafter		6,314,219

Total future maturities	$	134,893,689

Other Loans. 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 entity that is the other member of such joint venture (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 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 both June 30, 2013 and December 31, 2012 was $3,650,220 and $4,025,220, respectively.

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 until May 31, 2013. The principal amount borrowed bore interest at the rate of 9.25% per annum, payable quarterly in arrears. The outstanding balance on the Bridge Financing at June 30, 2013 and December 31, 2012 was $0.0 million.