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EXHIBIT 10.4
MASTER ALLIANCE AGREEMENT
This MASTER ALLIANCE AGREEMENT (this "AGREEMENT") is made and entered
into as of January 9, 1997 by and among American General Hospitality
Corporation, a Maryland corporation, which operates as a real estate investment
trust (the "COMPANY"), American General Hospitality Operating Partnership,
L.P., a Delaware limited partnership (the "OPERATING PARTNERSHIP" and together
with the Company, "AGT"), WHC Franchise Corporation ("WYNDHAM"), a Delaware
corporation and a wholly-owned subsidiary of Wyndham Hotel Corporation ("WYN"),
and WHC Development Corporation, a Delaware corporation ("WHC"). For the
limited purposes set forth herein, WYN shall be a party to this Agreement.
WHEREAS, the Company was formed for the purpose of continuing and
expanding the hotel acquisition, development and repositioning operations of
American General Hospitality, Inc. ("▇▇▇▇");
WHEREAS, the Company owns a portfolio of sixteen hotels and intends to
continue to purchase and acquire hotels; and
WHEREAS, the Company and Wyndham desire to pursue a strategic alliance
pursuant to which (i) Wyndham would have the non-exclusive right, but not the
obligation, to franchise hotels acquired by AGT after the date of this
Agreement if the Company shall determine that any such hotel should undergo
brand conversion, (ii) Wyndham shall purchase a certain number of shares of
Common Stock or OP Units (as hereinafter defined) with respect to certain
hotels acquired by AGT that Wyndham shall franchise, and (iii) with respect to
hotels acquired by Wyndham or WHC after the date of this Agreement, AGT would
have the non-exclusive right to be included in any solicitation of real estate
investment trusts ("REITS") to (A) purchase those hotels with respect to which
Wyndham or WHC intends to assign the purchase agreement to a REIT or (B) enter
into a sale-leaseback arrangement with Wyndham or WHC pursuant to those sale-
leaseback arrangements that Wyndham or WHC intend to enter into with a REIT
simultaneously upon the acquisition of such hotel by Wyndham or WHC.
NOW, THEREFORE, the parties hereto, in consideration of the foregoing,
the mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereby agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"ACCEPTED FINANCIAL PROJECTIONS" shall have the meaning set forth in
Section 2(d) hereof.
"ACQUISITION NOTICE" shall have the meaning set forth in Section 2(c)
hereof.
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"▇▇▇▇" shall mean American General Hospitality, Inc., a Texas
corporation.
"AGREEMENT" shall have the meaning set forth in the Preamble.
"AGT'S REPRESENTATIVES" shall mean any of AGT's affiliates, directors,
officers, employees and representatives (including, without limitation,
lenders, financial advisors, attorneys and accountants).
"BANK FACILITY" shall have the meaning set forth in Section 2(b)
hereof.
"CLOSING" shall have the meaning set forth in Section 4(c) hereof.
"COMMON STOCK" shall mean shares of common stock, $0.01 par value per
share, of the Company.
"COMPANY" shall have the meaning set forth in the Preamble and also
shall include the Company's successors.
"CONTROL" shall have the meaning set forth in Section 3 hereof.
"CONTROLLING INTEREST" shall have the meaning set forth in Section 3
hereof.
"CROW INTERESTS" shall have the meaning set forth in Section 13(b)
hereof.
"ENTITIES" shall have the meaning set forth in Section 13 hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"FRANCHISE AGREEMENT" shall have the meaning set forth in Section 2(a)
hereof.
"FRANCHISED HOTEL" shall have the meaning set forth in Section 2(a)
hereof.
"FTC RULE" shall have the meaning set forth in Section 3 hereof.
"HSR ACT" shall have the meaning set forth in Section 4(g) hereof.
"LENDERS" shall have the meaning set forth in Section 4(a) hereof.
"LESSEE" shall mean AGH Leasing, L.P., a Delaware limited partnership.
"LESSEE ENTITIES" shall have the meaning set forth in Section 3 hereof.
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"LINE OF CREDIT" shall mean AGT's $100 million line of credit with
Societe General, Southwest Agency, Bank One, Texas, N.A.
"MANAGEMENT AGREEMENT" shall have the meaning set forth in Section 2(b)
hereof.
"NYSE" shall have the meaning set forth in Section 6(e) hereof.
"OFFER" shall have the meaning set forth in Section 2(d) hereof.
"OP UNITS" shall have the meaning set forth in Section 4(a) hereof.
"OPERATING PARTNERSHIP" shall mean set forth in the Preamble.
"PENDING HOTEL" shall have the meaning set forth in Section 2(a) hereof.
"PERSON" shall mean an individual, partnership, corporation, trust,
estate, or unincorporated organization, or other entity, or a government or
agency or political subdivision thereof.
"REGISTRATION RIGHTS AGREEMENT" shall have the meaning set forth in
Section 9.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended from
time to time.
"WHC" shall have the meaning set forth in the Preamble.
"WYNDHAM'S REPRESENTATIVES" shall mean any of Wyndham's affiliates,
directors, officers, employees and representatives (including, without
limitation, lenders, financial advisors, attorneys and accountants).
2. Right to Franchise.
(a) Non-Exclusive Right. Wyndham shall have a non-exclusive
right during the term of this Agreement, but not an obligation, to franchise
each hotel acquired by AGT, or as to which it enters into an acquisition
agreement, during the term hereof and to cause such hotel to be operated under
the "Wyndham" name (a "FRANCHISED HOTEL") pursuant to a franchise agreement
substantially in the form attached hereto as Exhibit A (the "FRANCHISE
AGREEMENT"); provided, however, that Wyndham shall only have such non-exclusive
right pursuant to this Section 2(a) in the event that (i) AGT shall
affirmatively elect, in AGT's sole and absolute discretion, to change or
otherwise replace the existing franchise under which such hotel shall be
operating at the time of such hotel's acquisition by AGT and (ii) AGT shall
acquire the Franchised Hotel and elect to lease such hotel to the Lessee and
the Lessee shall elect to retain ▇▇▇▇ to manage and operate such hotel.
(b) Pending Hotel. The parties hereby agree that the hotel set
forth on Exhibit B (the "PENDING HOTEL") hereto will be a Franchised Hotel for
purposes of this Agreement subject to the
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satisfaction of the conditions to be set forth in the Franchise Agreement to be
entered into with respect to such hotel and all applicable franchise regulatory
requirements, as determined by Wyndham, whether pursuant to Section 3 or
otherwise. The parties further agree that such Franchise Agreement will be
entered into not later than fifteen (15) days following the date of this
Agreement.
(c) Management. Each Franchised Hotel shall initially be (i)
leased by AGT to the Lessee and (ii) managed by ▇▇▇▇. Wyndham shall have the
right to approve any management agreement between the Lessee and ▇▇▇▇ with
respect to any Franchised Hotel that is other than substantially in the form
attached hereto as Exhibit C (the "MANAGEMENT AGREEMENT"). The Company
represents and warrants to Wyndham that the form of the Management Agreement is
substantially the form of management agreement that is utilized as of the date
hereof between the Lessee and ▇▇▇▇ with respect to the management of hotels
owned by AGT.
(d) Notice of Acquisition Agreement. AGT shall notify Wyndham
in writing no later than fifteen (15) calendar days (or at such earlier time as
any other non-affiliated AGT Person shall be so notified by AGT) following the
execution by AGT of any definitive agreement to purchase a hotel that is
eligible to become a Franchised Hotel (each, an "ACQUISITION NOTICE").
Following delivery of the Acquisition Notice, AGT shall promptly provide to
Wyndham such information as Wyndham shall reasonably request concerning the
hotel or hotels referred to in such notice, including AGT's bona fide pro forma
financial projections for such hotel or hotels following its or their
conversion to the "Wyndham" name and any such other information as Wyndham
shall reasonably request to substantiate its compliance with all federal and
state franchise laws and whether Common Stock or OP Units would be issued to
Wyndham pursuant to Section 4 hereof.
(e) Offer and Election to Franchise. Wyndham shall have
fourteen (14) calendar days immediately following the receipt by Wyndham of the
information described in Section 2(d) hereof to deliver to AGT in writing
Wyndham's irrevocable, binding offer (the "OFFER") to AGT to make the hotel(s)
that are the subject of the Acquisition Notice a Franchised Hotel. In the
event that Wyndham shall make such Offer, Wyndham shall be deemed to have
affirmatively accepted the pro forma projections (the "ACCEPTED FINANCIAL
PROJECTIONS") provided to Wyndham by AGT pursuant to Section 2(d) hereof;
provided, however, that Wyndham's acceptance of the Accepted Financial
Projections shall not be deemed to constitute, and the Company hereby
acknowledges that such acceptance shall not constitute, a representation by
Wyndham that such Accepted Financial Projections shall be achieved or realized
at such hotel or hotels. AGT shall have fourteen (14) calendar days after the
receipt of the Offer (or such longer period as may be required by applicable
law) to deliver to Wyndham a notice (the "Acceptance Notice") accepting the
Offer.
(f) Execution of Franchise Agreement. In the event that AGT
shall accept the Offer, Wyndham, AGT and the Lessee shall enter into and
execute a Franchise Agreement with respect to such hotel or hotels on or prior
to the date on which the acquisition of such hotel by AGT shall be consummated,
or at such other time as shall be mutually agreed upon by the parties thereto.
(g) Confidentiality. Any and all information provided by AGT or
any of the AGT's Representatives to Wyndham or any of Wyndham's Representatives
pursuant to Section 2(d) hereof shall be kept confidential and, except as may
be required by law or pursuant to a request by a governmental department or
agency, shall not, without AGT's prior written consent, be disclosed
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by Wyndham or Wyndham's Representatives, in any manner whatsoever, in whole or
in part, and shall not be used for any other purposes.
3. Fractional Franchise. The transactions contemplated by Section
2(b) of this Agreement (as well as certain other future transactions
contemplated by Section 2(a) hereof) are intended to satisfy the requirements
of the fractional franchise exemption pursuant to the Federal Trade
Commission's Trade Regulation Rule entitled "Disclosure Requirements and
Prohibitions Concerning Franchising and Business Opportunity Ventures" ("FTC
RULE") and other exemptions under applicable state laws. Accordingly, on the
date of this Agreement and as a condition to the execution of a Franchise
Agreement, AGT shall be required to represent and warrant to Wyndham the
following: (a) that the Lessee and/or its current directors or executive
officers (or the directors or executive officers of the Lessee's corporate
general partner) have been in the type of business represented by the franchise
relationship for more than the past two (2) years; (b) that the Lessee does not
anticipate that it will execute more than one (1) Franchise Agreement in any
one (1) year, or, if the Lessee anticipates that it will execute more than one
(1) Franchise Agreement in any one (1) year, that the aggregate sales arising
from the relationships by the Franchise Agreements to be executed pursuant
hereto will not represent more than twenty percent (20%) of the sales in dollar
volume of the Lessee or, in Wyndham's discretion and if applicable, of the
Lessee Entities (as hereinafter defined); and (c) that neither the Lessee nor,
as applicable, the Lessee Entities, have any present plans to sell, prior to
one (1) year after the opening of any of the Pending Hotels any portion of
their business, where such sale would result in a decrease in the aggregate of
the Lessee's, or as applicable, the Lessee Entities', gross sales, such that
the gross sales of such Pending Hotels would represent more than twenty percent
(20%) of such aggregate gross sales. "LESSEE ENTITIES" means the Lessee,
together with any subsidiaries in which Lessee owns a Controlling Interest (as
hereinafter defined), and any Person with a Controlling Interest in the Lessee.
"CONTROLLING INTEREST" means, with respect to the Lessee, any other Person
controlling, controlled by or under common control with the Lessee as
determined by Wyndham in its sole discretion. For purposes of this Section 3,
"CONTROL" means the ability to direct the policies and operations of a Person.
4. Subscription of Common Stock and OP Units.
(a) Subscription. Except with respect to the Pending Hotel and
those other hotels set forth below in this Section 4(a), for each and every
Franchised Hotel with respect to which a Franchise Agreement shall be entered
into, Wyndham will be deemed to have subscribed to and shall purchase shares of
Common Stock, in an amount and at a purchase price as provided in Section 4(b)
hereof; provided, however, that if the issuance of the Common Stock will (i)
violate the Company's share ownership limitations set forth in its articles of
incorporation that are designed to preserve its status as a REIT, or (ii)
violate the Securities Act or the Exchange Act, or any of the rules promulgated
under either the Securities Act or the Exchange Act, including, without
limitation, the integration of that issuance with any other securities offering
by the Company, as shall be reasonably determined by the Company based upon the
advice of independent legal counsel, then Wyndham (i) shall have no right or
obligation pursuant to this Section 4(a) to purchase shares of Common Stock,
and (ii) will be deemed to have subscribed to and shall purchase units of
limited partnership interest ("OP UNITS") in the Operating Partnership, in an
amount and at a purchase price as provided in Section 4(b) hereof. In the
event the Pending Hotel becomes a Franchised Hotel, Wyndham will be deemed to
have subscribed to and shall purchase 112,969 shares of Common Stock at a price
of
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$22.13 per share, equal to an aggregate purchase price of $2,500,000; provided,
however, that Wyndham shall have no right or obligation to purchase such shares
of Common Stock unless it obtains the prior written consent of its lenders
under its bank credit facility (whether current or future, the "BANK
FACILITY"); provided, further, however that in the event that Wyndham shall not
obtain such prior written consent of its lenders under the Bank Facility prior
to the date of the Closing, Wyndham's franchise fees with respect to the
Pending Hotel shall be reduced by fifty (50) basis points. For purposes of
this Section 4(a), the Four Points by Sheraton located in Marietta, Georgia,
the ▇▇▇▇ ▇▇▇▇▇▇ Albuquerque Airport Hotel located in Albuquerque, New Mexico
and the Days Inn located in Orlando, Florida shall not, upon their conversion
to a Wyndham brand, be considered a Franchised Hotel. The obligation to
purchase Common Stock or OP Units pursuant to this Agreement is subject to the
satisfaction of the conditions set forth in Section 4(g) and Section 11 of this
Agreement and to Wyndham obtaining the prior written consent of its lenders
under the Bank Facility; provided, however, that in the event that Wyndham
shall not obtain such prior written consent of its lenders under the Bank
Facility prior to the date of a Closing, Wyndham's franchise fees with respect
to the hotel in question shall be reduced by fifty (50) basis points.
(b) Number of Shares of Common Stock and OP Units; Purchase
Price. The number of shares of Common Stock or OP Units to be purchased
pursuant to Section 4(a) hereof shall be equal to the nearest whole number
determined by dividing (i) an amount equal to nine (9) times the total
estimated franchise fees, based on the Accepted Financial Projections, to be
paid to Wyndham in respect of the Franchised Hotel during the first twelve (12)
months following conversion to the "Wyndham" name, by (ii) the price per share
of Common Stock or per OP Unit to be paid by Wyndham determined as set forth
below. The price per share of Common Stock or OP Unit to be paid by Wyndham
shall be paid in cash and shall be equal to the average closing sale price of
the Common Stock on the New York Stock Exchange for the thirty (30) trading
days immediately preceding the earlier of (i) the public announcement by AGT of
its proposed acquisition of the hotel in question or (ii) Wyndham's Offer to
AGT to make the hotel a Franchised Hotel.
(c) Closing. Each and every closing (a "CLOSING") for the
purchase of the shares of Common Stock or OP Units by Wyndham pursuant to
Section 4(a) hereof shall be held not later than thirty (30) calendar days
immediately following the conversion of a Franchised Hotel by AGT to the
"Wyndham" name pursuant to a Franchise Agreement.
(d) Certificates. At each and every Closing at which Common
Stock is issued pursuant to this Agreement, the Company shall issue to Wyndham
one or more certificates representing the whole number of shares of Common
Stock that shall have been purchased by Wyndham pursuant to Section 4(a)
hereof. All certificates representing shares of Common Stock issued pursuant
to this Section 4 shall bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS
OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS
WHICH, IN THE OPINION OF COUNSEL FOR
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THE HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY
TO THE ISSUER, IS AVAILABLE.
(e) Issuance of OP Units. In the event that the Company shall
issue to Wyndham OP Units pursuant to Section 4(a) hereof, (i) the Company
shall cause the books and records of the Operating Partnership to reflect the
ownership and purchase of such OP Units by Wyndham, and if requested by
Wyndham, cause the Operating Partnership to furnish to Wyndham evidence of such
ownership, and (ii) the Company, the Operating Partnership and Wyndham shall
enter into and execute on the date of the Closing of such issuance an Exchange
Rights Agreement substantially in the form attached hereto as Exhibit D.
(f) Payment for Common Stock and Units. Upon receipt by Wyndham
of certificates representing shares of Common Stock or OP Units, Wyndham shall
promptly pay to the Company or the Operating Partnership, as the case may be,
by wire transfer in immediately available funds or by certified or bank
cashier's check, the purchase price for such shares of Common Stock or OP Units
as shall be calculated pursuant to Section 4(b) hereof.
(g) Certain Filings. If necessary and as required by
applicable law in order to permit the sale of Common Stock or OP Units to occur
pursuant to this Agreement, the Company and Wyndham shall together, or pursuant
to an allocation of responsibility to be agreed upon between them, coordinate
and cooperate in any action by or in respect of, or filing with, the Federal
Trade Commission or the United States Department of Justice pursuant to the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
ACT") or any other action by or in respect of, or filing with, or permit,
authorization, consent or approval of, any court, arbitral tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency. If required by applicable law, the expiration or early
termination of the waiting period under the HSR Act shall be a condition to
Closing any sale of Common Stock or OP Units pursuant to this Agreement.
5. Lock-up. In the event that Wyndham shall purchase or otherwise
acquire shares of Common Stock or OP Units pursuant to Section 4 hereof,
Wyndham hereby irrevocably agrees that, without the prior written consent of
the Company, Wyndham shall not (and shall not announce or disclose any
intention to), and shall cause each of its affiliates not to, sell, offer to
sell, solicit an offer to buy, contract to sell, grant any option to purchase,
or otherwise transfer or dispose of, any shares of Common Stock or OP Units
acquired pursuant to this Agreement, for a period of 180 calendar days
immediately following the date such shares of Common Stock or OP Units shall
have been issued to Wyndham pursuant to Section 4(d) or Section 4(e) hereof;
provided, however, that the foregoing shall not restrict any transfer of Common
Stock or OP Units acquired pursuant to this Agreement to WYN or any direct or
indirect wholly-owned subsidiary of WYN, or any bona fide pledge to secure
indebtedness or any transfer upon foreclosure thereof, if the transfer or
pledge is subject to the condition that the transferee is bound by the
foregoing restrictions. At each Closing, Wyndham shall enter into a lock-up
letter substantially in the form attached hereto as Exhibit E.
6. Representations and Warranties of the Company and the Operating
Partnership.
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The Company and the Operating Partnership hereby represent and
warrant to Wyndham as follows:
(a) Organization of the Company and the Operating Partnership.
The Company is duly organized, validly existing and in good standing as a
corporation under the laws of the State of Maryland, has full power and
authority to conduct its business as presently being conducted and to own and
lease its properties and assets. The Operating Partnership is duly organized,
validly existing and in good standing as a limited partnership under the laws
of the State of Delaware, has full power and authority to conduct its business
as presently being conducted and to own and lease its properties and assets.
Each of the Company and the Operating Partnership is duly qualified to do
business and is in good standing in each jurisdiction in which such
qualification is necessary under applicable laws as the result of the conduct
of its business, or the ownership of its properties, except where the failure
to be so qualified and in good standing would not have a material adverse
effect.
(b) Authorization. Each of the Company and the Operating
Partnership has all necessary power and authority and has taken all corporate
or partnership action (as the case may be) and has obtained all corporate or
partnership approvals (as the case may be) necessary to execute, deliver and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby, and no other proceedings on the part of the Company or the
Operating Partnership are necessary to authorize this Agreement or the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Company and the Operating Partnership and is a valid, binding
and enforceable obligation of the Company and the Operating Partnership,
enforceable against each of them in accordance with its terms.
(c) No Conflict or Violation. Except for the consents
required under the Line of Credit with respect to the issuance of OP Units
pursuant to Section 4(a) hereof, neither the execution, delivery and
performance of this Agreement by the Company or the Operating Partnership nor
the consummation of the transactions contemplated hereby will result in (i) a
violation of or a conflict with any provision of the certificate of
incorporation or by-laws of the Company, or the limited partnership agreement
of the Operating Partnership, (ii) a breach of, or a default under any term or
provision of any contract, agreement, indebtedness, lease, commitment, license,
franchise, permit, authorization or concession to which the Company or the
Operating Partnership is a party, which breach or default would have a material
adverse effect, or (iii) a violation by the Company or the Operating
Partnership of any law, statute, rule, regulation, ordinance, standard, code,
order, judgment, decision, writ, injunction, decree, award or other
governmental restriction including, without limitation, any policy or procedure
issued or enforced by any governmental authority, which violation would have a
material adverse effect.
(d) Authorized Shares of Common Stock and the Operating
Partnership. Any and all shares of Common Stock and OP Units that may be
issued to Wyndham pursuant to this Agreement shall be duly and validly issued,
fully paid and nonassessable, and shall be delivered free and clear of all
liens, charges, claims, and encumbrances of any kind or nature whatsoever
(other than those created by Wyndham or pursuant to Section 5 hereof),
including any preemptive rights.
(e) Consents and Approvals. Except for all filings, consents
and approvals as may be required under, and other applicable requirements of,
the HSR Act, the consent and approval
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of the Lenders in connection with the issuance of OP Units pursuant to Section
4(a) hereof, and any Company stockholder approvals required by the rules of the
New York Stock Exchange, Inc. (the "NYSE"), no consent, approval or
authorization of, or declaration, filing or registration with, any governmental
authority, or any other person, organization or entity, is required to be made
or obtained by the Company or the Operating Partnership in connection with the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby.
The foregoing representations and warranties are true and
accurate as of the date hereof, or such other date as of which they are deemed
to be made, and shall be true and accurate as of the date of each Closing as a
condition to the obligation of Wyndham to purchase Common Stock and OP Units on
the Closing.
7. Representations and Warranties of Wyndham and WHC.
Wyndham and WHC hereby represent and warrant to the Company and
the Operating Partnership as follows:
(a) Organization of Wyndham. Each of Wyndham and WHC is duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has full power and authority to conduct its business as presently
being conducted and to own and lease its properties and assets. Each of
Wyndham and WHC is duly qualified to do business and is in good standing in
each jurisdiction in which such qualification is necessary under applicable
laws as the result of the conduct of its business, or the ownership of its
properties, except where the failure to be so qualified and in good standing
would not have a material adverse effect.
(b) Authorization. Each of Wyndham and WHC has all necessary
corporate power and authority and has taken all corporate action and has
obtained all corporate approvals necessary to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby, and no other proceedings on the part of Wyndham or WHC are
necessary to authorize this Agreement or the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Wyndham and WHC and is a
valid, binding and enforceable obligation of Wyndham and WHC, enforceable
against each of them in accordance with its terms.
(c) No Conflict or Violation. Except for the consents
required under the Bank Facility, neither the execution, delivery and
performance of this Agreement by Wyndham or WHC nor the consummation of the
transactions contemplated hereby will result in (i) a violation of or a
conflict with any provision of the certificate of incorporation, by-laws of
Wyndham or WHC, (ii) a breach of, or a default under any term or provision of
any contract, agreement, indebtedness, lease, commitment, license, franchise,
permit, authorization or concession to which Wyndham or WHC is a party, which
breach or default would have a material adverse effect, or (iii) a violation by
Wyndham or WHC of any law, statute, rule, regulation, ordinance, standard,
code, order, judgment, decision, writ, injunction, decree, award or other
governmental restriction including, without limitation, any policy or procedure
issued or enforced by any governmental authority, which violation would have a
material adverse effect.
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(d) Consents and Approvals. Except for all filings, consents
and approvals as may be required under, and other applicable requirements of,
the Bank Facility and the HSR Act, no consent, approval or authorization of, or
declaration, filing or registration with, any governmental authority, or any
other person, organization or entity, is required to be made or obtained by
Wyndham or WHC in connection with the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby.
(e) Purchase Not for Distribution. Each of Wyndham and WHC
understands that neither the shares of Common Stock nor the OP Units to be
issued hereby have been registered under the Securities Act, or any state
securities acts, and are instead being offered and sold in reliance on an
exemption from such registration requirements. The shares of Common Stock and
OP Units for which Wyndham hereby subscribes are being acquired solely for its
own account, for investment, and are not being purchased with a view to, or for
resale in connection with, any distribution, subdivision or fractionalization
thereof, in violation of such laws and Wyndham has no present intention to
enter into any contract, undertaking, agreement or arrangement with respect to
any such resale.
(f) Awareness of Risks. Wyndham is aware of the risks
involved in making an investment in the shares of Common Stock and in the OP
Units. Wyndham has had an opportunity to ask questions of, and to receive
answers from, the Company and the Operating Partnership, or a person or persons
authorized to act on their behalf, concerning the terms and conditions of this
investment.
(g) Accredited Investor. Wyndham is an accredited investor as
that term is defined in Rule 501 and Regulation D of the Securities Act.
The foregoing representations and warranties are true and
accurate as of the date hereof, or such other date as of which they are deemed
to be made, and shall be true and accurate as of the date of each Closing as a
condition to the obligation of the Company and the Operating Partnership to
issue shares of Common Stock and OP Units on the Closing.
8. Non-Exclusive Right to Purchase. (a) During the term of this
Agreement, in the event that (x) WYN or WHC shall enter into a definitive
agreement to purchase a hotel or a group of hotels, and (y) WYN or WHC either
(A) intends to assign such agreement to a REIT or (B) intends to enter into a
sale-leaseback arrangement with a REIT simultaneously with such purchase, WYN
or WHC, as the case may be, shall, prior to assigning such agreement or
entering into such sale-leaseback arrangement, include AGT in any solicitation
of REITs to acquire such hotels by sending AGT a copy of such definitive
agreement not later than the time it is furnished to any other REIT. The
confidentiality of the information provided in this Section 8(a) shall be
maintained by AGT on the same basis as is set forth in Section 2(g) hereof.
(b) WYN covenants and agrees that during the term of this
Agreement if any direct or indirect wholly-owned subsidiary of WYN other than
WHC proposes to enter into a transaction of the type described in Section 8(a)
hereof, WYN shall cause such subsidiary to comply in all respects with the
requirements set forth above.
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9. Registration Rights Agreement. At the initial Closing, the
parties hereto shall enter into and execute a registration rights agreement
substantially in the form attached hereto as Exhibit F (the "REGISTRATION
RIGHTS AGREEMENT") with respect to shares of Common Stock issued to Wyndham
pursuant to Section 4(a) hereof or upon exchange of OP Units.
10. NYSE Listing. The Company shall use its best efforts to list
prior to a Closing any and all shares of Common Stock issued to Wyndham
pursuant to Section 4(a) hereof on the NYSE.
11. Stockholder Approval. In the event that any NYSE rule or
regulation shall require stockholder approval of any action taken by the
Company pursuant to this Agreement, the Company shall not be required to issue
shares of Common Stock or OP Units to Wyndham pursuant to Section 4(a) hereof
without first obtaining such stockholder approval pursuant to such NYSE rule or
regulation, and the Company shall use its reasonable best efforts to cause such
approval to be effectuated as soon as practicable.
12. Consent of Lenders. Wyndham shall use its reasonable best
efforts to obtain the written consent of its lenders under its Bank Facility
prior to the consummation of any Closing.
13. Termination. (a) Consent of Lenders. In the event that Wyndham
shall not obtain the prior written consent of its lenders under its Bank
Facility in any two Closings during the term hereof, the Company shall have the
right to terminate this Agreement; provided, however, that any transactions
consummated prior to such termination shall not be terminated and shall remain
valid and in full force and effect, and such termination shall have no effect
on any Franchise Agreement, Registration Rights Agreement, Exchange Rights
Agreement or lock-up letter executed pursuant to this Agreement.
(b) Change of Control. Upon the occurrence of a "change in
control" (as hereinafter defined) in any of the Lessee, WYN, ▇▇▇▇ or AGT
(collectively, the "ENTITIES"), each of Wyndham and AGT shall have the right at
any time following such occurrence to terminate this Agreement; provided,
however, that any transactions consummated prior to such termination shall not
be terminated and shall remain valid and in full force and effect, and such
termination shall have no effect on any Franchise Agreement, Registration
Rights Agreement, Exchange Rights Agreement or lock-up letter executed pursuant
to this Agreement. For purposes of this Section 13, "change of control" shall
mean:
(x) any merger or consolidation of any of the Entities with or
into any Person, or any sale, transfer or other conveyance,
whether direct or indirect, of all or substantially all of the
assets of any of the Entities, in one transaction or a series of
related transactions, if, immediately after giving effect to such
transaction any "person" or "group" (as such terms are used for
purposes of Section 13(d) and 14(d) of the Exchange Act, whether
or not applicable), is or becomes the beneficial owner, directly
or indirectly, of more than fifty percent (50%) of the shares of
the total voting power of such Entity; provided, however, that
the foregoing shall not apply to the acquisition of such shares
by any "person" or "group" comprised solely of ▇▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇▇ ▇▇▇▇, or any lineal descendant of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
▇▇▇▇, or any trust of which not less than 75% of the beneficial
interests are held by
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▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ ▇▇▇▇ or such lineal descendants, or any
partnership, corporation or other entity of which not less than
75% of the outstanding equity interests are owned directly or
indirectly by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ ▇▇▇▇ or such descendants (the
"CROW INTERESTS");
(y) any "person" or "group" (as such terms are used for purposes
of Section 13(d) and 14(d) of the Exchange Act, whether or not
applicable) is or becomes the beneficial owner, directly or
indirectly, of more than fifty percent (50%) of the total voting
power of such Entity provided, however, that the foregoing shall
not apply to the acquisition of such voting power by any "person"
or "group" comprised solely of the Crow Interests; or
(z) during any period of twelve (12) consecutive months,
individuals who at the beginning of such twelve-month period
constituted the Board of Directors of any of the Entities cease
for any reason to constitute a majority of the Board of Directors
of such Entity then in office.
14. Miscellaneous.
(a) Term. Except as otherwise provided in Section 13 hereof, the
terms and provisions of this Agreement shall commence on the date hereof and
shall terminate on December 31, 1999.
(b) Public Announcements. So long as this Agreement is in effect,
neither the Company nor Wyndham nor any of the affiliates which either of them
control shall issue or cause the publication of any press release or other
public statement or announcement with respect to this Agreement or the
transactions contemplated hereby (including those under the Registration Rights
Agreement) without the prior consultation of the other party, except as may be
required by law or by obligations pursuant to any listing agreement with a
national securities exchange, provided that each party shall use its best
efforts to consult with the other party prior to any such issuance.
(c) Expenses. Except as otherwise provided in the Registration
Rights Agreement and the Franchise Agreement, all costs and expenses incurred
in connection with this Agreement, the Registration Rights Agreement and the
Franchise Agreement, and the consummation of the transactions contemplated
hereby and thereby shall be paid by the party incurring such expenses.
(d) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given without the written consent of the Company and Wyndham.
(e) Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given: (i) upon receipt if personally
delivered; (ii) when transmitted with confirmation of transmission if
transmitted by telecopy or facsimile; (iii) the day after it is sent, if sent
for next day delivery to a domestic address by recognized overnight courier
service (e.g., Federal Express); and
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(iv) upon receipt, if sent by certified or registered mail, return receipt
requested. In each case notice shall be sent:
If to the Company, to:
American General Hospitality Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
Battle ▇▇▇▇▇▇ LLP
Park Avenue Tower
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
If to Wyndham, to:
Wyndham Hotel & Resorts
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ Rain ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: M. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
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(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAW PROVISIONS THEREOF.
(i) Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of any other party
under this Agreement in accordance with the terms and conditions of this
Agreement in any court of the United States or any State thereof having
jurisdiction.
(j) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
(k) Assignability. The parties to this Agreement may not assign
their rights or obligations under this Agreement without the prior written
consent of the other party to this Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or caused this Agreement to be duly executed on its behalf, as of
the date first written above.
AMERICAN GENERAL HOSPITALITY CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
AMERICAN GENERAL HOSPITALITY
OPERATING PARTNERSHIP, L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
WHC FRANCHISE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Authorized Agent
WHC DEVELOPMENT CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Authorized Agent
Accepted and agreed with
respect to Section 8(b) hereof:
WYNDHAM HOTEL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Authorized Agent
16
================================================================================
MASTER ALLIANCE AGREEMENT
Dated as of January 9, 1997
by and among
AMERICAN GENERAL HOSPITALITY CORPORATION,
AMERICAN GENERAL HOSPITALITY OPERATING PARTNERSHIP, L.P.
and
WHC FRANCHISE CORPORATION,
WHC DEVELOPMENT CORPORATION
================================================================================
17
EXHIBIT A
[FORM OF FRANCHISE AGREEMENT]
18
EXHIBIT B
1. ▇▇▇▇▇▇▇▇ Hotel in San Jose, California
19
EXHIBIT C
[FORM OF MANAGEMENT AGREEMENT]
20
EXHIBIT D
[FORM OF EXCHANGE RIGHTS AGREEMENT]
21
EXHIBIT E
[FORM OF LOCK-UP LETTER]
22
EXHIBIT F
[FORM OF REGISTRATION RIGHTS AGREEMENT]