Item 1.01. Entry into a Material Definitive Agreement.
The information set forth under Item 2.03 of this Current Report on Form 8-K is
hereby incorporated by reference into this Item 1.01.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
Amendment of Barcelo Promissory Notes to Provide Additional Flexibility in
connection with the Closing of the Equity Inns Portfolio Acquisition
On August 25, 2014, American Realty Capital Hospitality Operating Partnership,
L.P. (the "OP" and together with American Realty Capital Hospitality Trust,
Inc., the "Company") entered into a First Amendment to Promissory Notes (the
"Amendment") with Barcelo Crestline Corporation ("BCC") to amend certain terms
of (a) the $58,074,056.52 promissory note (the "First Note") and (b) the
$5,000,000 promissory note (the "Second Note" and together with the First Note,
the "Notes") each of which were executed by the OP in favor of BCC on March 21,
2014. Pursuant to the Amendment, the OP and BCC agreed to (1) pool the
promissory notes into one combined note (the "Note") with an outstanding
principal amount of $63,074,056.52 to be governed by the terms set forth in the
First Note; (2) amend the maturity date such that the Note will be due and
payable (the "Maturity Date") within ten business days after the date the
Company raises $70.0 million in common equity excluding any common equity raised
on or prior to the closing of the acquisition of the portfolio of 126 hotels
pursuant to the Real Estate Sale Agreement, dated as of May 23, 2014 (the
"Equity Inns Closing"); and (3) change the payment date of the $3,000,000
payment by the OP to BCC originally due on March 21, 2015 and the $500,000
payment by the OP to BCC originally due on March 21, 2016 (collectively, the
"Payments") to the Maturity Date. Prior to the Amendment, the maturity date of
the Notes was within ten business days after the date the Company raised $150.0
million in common equity without regard for the timing of the Equity Inns
Closing. The Company believes the Amendment will provide it with greater
flexibility to complete the Equity Inns Closing.
If the Equity Inns Closing does not occur prior to 11:59 PM EDT on March 31,
2015 the Amendment shall become null and void, the OP and BCC shall become bound
by the original terms of the Notes and the payment dates of the Payments will
revert back to March 21, 2015 and March 21, 2016, respectively.
The foregoing description of the Amendment is a summary and is qualified in its
entirety by the terms thereof. The Company will file the Amendment with the
Securities and Exchange Commission as an exhibit to its next Quarterly Report on