EXHIBIT 10.2
U.S. $100,000,000
SUBORDINATE UNSECURED CREDIT AGREEMENT
Dated as of February 13, 1998
Among
AMERICAN GENERAL HOSPITALITY OPERATING PARTNERSHIP, L.P.
as the Borrower,
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SOCIETE GENERALE, SOUTHWEST AGENCY
as Arranger, Syndication Agent, and Documentation Agent,
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BANK ONE, TEXAS, N.A.
as Administrative Agent,
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and
THE BANK OF NOVA SCOTIA and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
as Managing-Agents
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and
THE BANKS NAMED HEREIN
as the Banks
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TABLE OF CONTENTS
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Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms.................................... 1
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Section 1.02 Computation of Time Periods.............................. 32
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Section 1.03 Accounting Terms; Changes in GAAP........................ 32
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Section 1.04 Types of Advances........................................ 33
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Section 1.05 Miscellaneous............................................ 33
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ARTICLE II
THE ADVANCES
Section 2.01 The Advances............................................. 33
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Section 2.02 Method of Borrowing...................................... 33
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Section 2.03 Fees..................................................... 37
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Section 2.04 Reduction of the Commitments............................. 38
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Section 2.05 Repayment of Advances.................................... 39
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Section 2.06 Interest, Late Payment Fee............................... 39
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Section 2.07 Prepayments.............................................. 40
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Section 2.08 Breakage Costs........................................... 42
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Section 2.09 Increased Costs.......................................... 43
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Section 2.10 Payments and Computations................................ 44
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Section 2.11 Taxes.................................................... 46
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Section 2.12 Illegality............................................... 48
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Section 2.13 [Intentionally Left Blank]............................... 48
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Section 2.14 Determination of Total Availability...................... 48
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Section 2.15 Bank Replacement......................................... 49
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Section 2.16 Sharing of Payments, Etc................................. 50
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ARTICLE III
CONDITIONS OF LENDING
Section 3.01 Conditions Precedent to initial Advance......................51
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Section 3.02 Conditions Precedent for each Borrowing......................53
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Existence; Qualification; Partners; Subsidiaries.............54
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Section 4.02 Partnership and Corporate Power..............................56
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Section 4.03 Authorization and Approvals..................................56
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Section 4.04 Enforceable Obligations......................................57
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Section 4.05 Parent Common Stock..........................................57
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Section 4.06 Financial Statements.........................................57
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Section 4.07 True and Complete Disclosure.................................58
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Section 4.08 Litigation...................................................58
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Section 4.09 Use of Proceeds..............................................58
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Section 4.10 Investment Company Act.......................................59
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Section 4.11 Taxes........................................................59
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Section 4.12 Pension Plans................................................60
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Section 4.13 Condition of Hotel Property; Casualties; Condemnation........60
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Section 4.14 Insurance....................................................60
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Section 4.15 No Burdensome Restrictions; No Defaults......................60
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Section 4.16 Environmental Condition......................................61
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Section 4.17 Legal Requirements, Zoning, Utilities, Access................62
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Section 4.18 Existing Indebtedness........................................62
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Section 4.19 Title; Encumbrances..........................................63
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Section 4.20 Leasing Arrangements.........................................63
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Section 4.21 Franchise Agreements.........................................63
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ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.01 Compliance with Laws, Etc.............................................. 64
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Section 5.02 Preservation of Corporate Existence; Corporate Separateness, Etc....... 64
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Section 5.03 Payment of Taxes, Etc.................................................. 66
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Section 5.04 Visitation Rights; Bank Meeting........................................ 67
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Section 5.05 Reporting Requirements................................................. 67
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Section 5.06 Maintenance of Property and Required Work.............................. 71
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Section 5.07 Insurance.............................................................. 72
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Section 5.08 Casualty; Condemnation................................................. 72
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Section 5.09 Supplemental Guaranties................................................ 73
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Section 5.10 Participating Leases................................................... 73
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ARTICLE VI
NEGATIVE COVENANTS
Section 6.01 Liens, Etc............................................................. 73
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Section 6.02 Indebtedness........................................................... 74
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Section 6.03 Agreements Restricting Distributions From Subsidiaries................. 76
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Section 6.04 Restricted Payments.................................................... 76
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Section 6.05 Fundamental Changes; Asset Dispositions................................ 76
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Section 6.06 Personal Property Leases............................................... 77
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Section 6.07 Investments, Loans, Future Properties.................................. 77
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Section 6.08 Affiliate Transactions................................................. 79
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Section 6.09 Sale and Leaseback..................................................... 80
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Section 6.10 Sale or Discount of Receivables........................................ 80
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Section 6.11 No Further Negative Pledges............................................ 80
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Section 6.12 Franchise Agreements................................................... 80
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Section 6.13 Material Documents..................................................... 80
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Section 6.14 Limitations on Development, Construction, Renovation and Purchase
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of Hotel Properties.................................................... 81
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ARTICLE VII
FINANCIAL COVENANTS
7.01 Interest Coverage Ratio............................................. 82
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7.02 Debt Service Coverage Ratio......................................... 82
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7.03 Maintenance of Net Worth............................................ 82
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7.04 Limitations on Total Indebtedness................................... 82
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7.05 Limitations on Secured Recourse Indebtedness........................ 82
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7.06 Limitations on Secured Non-Recourse Indebtedness.................... 83
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7.07 Limitations on Secured Indebtedness................................. 83
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7.08 Permitted Non-Voting Stock Company Adjustment....................... 83
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ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.01 Events of Default......................................... 84
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Section 8.02 Optional Acceleration of Maturity......................... 90
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Section 8.03 Automatic Acceleration of Maturity........................ 90
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Section 8.04 Cash Collateral Account................................... 90
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Section 8.05 Non-exclusivity of Remedies............................... 91
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Section 8.06 Right of Set-off.......................................... 91
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ARTICLE IX
AGENCY PROVISIONS
Section 9.01 Authorization and Action................................. 92
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Section 9.02 Agents' Reliance, Etc.................................... 92
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Section 9.03 Each Agent and Its Affiliates............................ 93
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Section 9.04 Bank Credit Decision..................................... 93
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Section 9.05 Indemnification.......................................... 93
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Section 9.06 Successor Agent.......................................... 94
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Section 9.07 Arranger, Syndication Agent and Managing Agents.......... 94
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ARTICLE X
SUBORDINATION
Section 10.01 Subordination........................................... 95
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Section 10.02 Payment Blockage........................................ 95
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Section 10.03 Remedy Blockage......................................... 96
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Section 10.04 Certain Distributions................................... 96
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Section 10.05 Payment in Trust........................................ 97
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Section 10.06 Liens................................................... 97
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Section 10.07 Miscellaneous........................................... 97
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ARTICLE XI
MISCELLANEOUS
Section 11.01 Amendments, Etc........................................ 98
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Section 11.02 Notices, Etc........................................... 101
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Section 11.03 No Waiver; Remedies.................................... 101
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Section 11.04 Costs and Expenses..................................... 101
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Section 11.05 Binding Effect......................................... 102
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Section 11.06 Bank Assignments and Participations.................... 102
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Section 11.07 Indemnification........................................ 105
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Section 11.08 Execution in Counterparts.............................. 106
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Section 11.09 Survival of Representations, Indemnifications, etc..... 106
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Section 11.10 Severability........................................... 106
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Section 11.11 Business Loans......................................... 106
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Section 11.12 Usury Not Intended..................................... 107
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Section 11.13 Certain Office and Retail Space........................ 107
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Section 11.14 Governing Law.......................................... 108
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Section 11.15 Consent to Jurisdiction................................ 108
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Section 11.16 Knowledge of Borrower.................................. 108
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Section 11.17 Banks Not in Control................................... 108
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Section 11.18 Headings Descriptive................................... 109
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Section 11.19 Time is of the Essence................................. 109
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Section 11.20 WAIVERS OF JURY TRIAL............................. 109
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Section 11.21 ENTIRE AGREEMENT.................................. 109
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EXHIBITS:
Exhibit A - Form of Note
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Environmental Indemnity
Exhibit E - Form of Notice of Borrowing
Exhibit F - Form of Notice of Conversion or Continuation
Exhibit G - Form of Property Adjustment Report
Exhibit H - Form of Subordinate Guaranty
Exhibit I - Form of Battle ▇▇▇▇▇▇ L.L.P. Opinion
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SCHEDULES:
Schedule 1.01(a) - Commitments
Schedule 1.01(b) - Initial Properties, Cost Basis and Hotel Value
Schedule 1.01(c) - Engineer Report Scope of Services
Schedule 1.01(d) - Approved Engineers
Schedule 1.01(e) - Environmental Report Scope of Services
Schedule 1.01(f) - Approved Environmental Consultants
Schedule 1.01(g) - Franchisors
Schedule 1.01(h) - Ground Leases
Schedule 1.01(i) - Guarantors
Schedule 1.01(j) - Participating Leases
Schedule 4.01 - Subsidiaries
Schedule 4.08 - Litigation
Schedule 4.17 - Legal Requirements; Zoning; Utilities; Access
Schedule 4.18 - Existing Indebtedness
Schedule 4.21 - Franchise Agreements
Schedule 4.22 - Management Agreements
Schedule 5.06 - Required Work
Schedule 5.07 - Insurance
Schedule 11.02 - Notice Information
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SUBORDINATE UNSECURED CREDIT AGREEMENT
SUBORDINATE UNSECURED CREDIT AGREEMENT, dated as of February 13, 1998, is
among AMERICAN GENERAL HOSPITALITY OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership, as the Borrower, SOCIETE GENERALE, SOUTHWEST AGENCY, as
Arranger, Syndication Agent, and Documentation Agent, BANK ONE, TEXAS, N.A., as
Administrative Agent, THE BANK OF NOVA SCOTIA and ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as Managing Agents and the Banks.
In consideration of the provisions contained in this Agreement, the parties
hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms. As used in this Agreement, the
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following terms shall have the following meanings (unless otherwise indicated,
such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Accession Agreement" means an Accession Agreement in the form attached
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respectively to the Subordinate Guaranty and Environmental Indemnity as Annex 1
thereto, which agreement causes the Person executing and delivering the same to
the Administrative Agent to become a party to the Subordinate Guaranty and
Environmental Indemnity.
"Acquisition Agreements" means for any Hotel Property the agreements
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entered into in connection with the acquisition of such Hotel Property.
"Adjusted EBITDA" means, for any Person or Hotel Property, as applicable,
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for any period, the EBITDA of such Person or Hotel Property, as applicable, for
such period less the aggregate FF&E Reserves for such period in respect of, as
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applicable, each Hotel Property owned by such Person or its Subsidiaries
(whether located on land owned by or land leased to such owner of the Hotel
Property) or such Hotel Property. For any New Property or any Person who owns or
leases a New Property, Adjusted EBITDA shall include the Adjusted EBITDA for
such New Property incurred before the date of acquisition of such New Property
adjusted upward or downward to provide for a deemed management equal to a three
percent (3%) of gross revenues from such New Property incurred before the date
of acquisition of such New Property regardless of the actual management
fees paid in connection with such New Property incurred before the date of
acquisition of such New Property.
"Adjusted Net Worth" means, for the Parent as of any date, the sum of (a)
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the Parent's Net Worth on such date plus (b) the minority interest of the Parent
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on such date determined in accordance with GAAP.
"Adjusted Prime Rate" means, for any day, the fluctuating rate per annum of
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interest equal to the greater of (a) the Prime Rate in effect on such day and
(b) the Federal Funds Rate in effect on such day plus 1/2%.
"Adjustment Event" has the meaning set forth in Section 2.14(b).
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"Administrative Agent" means Bank One, Texas, N.A. in its capacity as
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Administrative Agent for the Banks pursuant to Article IX and any successor
Administrative Agent appointed pursuant to Section 9.06.
"Advance" means an Advance by a Bank to the Borrower, any such Advance
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being either a Prime Rate Advance or a LIBOR Rate Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
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indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person. The
term "control" (including the terms "controlled by" or "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of a Control Percentage, by contract or otherwise.
"Agents" means the Administrative Agent and the Documentation Agent, and
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"Agent" means either such agent.
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"▇▇▇▇" means American General Hospitality, Inc., a Texas corporation.
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"AGH Leasing" means AGH Leasing, L.P., a Delaware limited partnership.
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"AGH LP" means AGH LP, Inc., a Nevada corporation.
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"Agreement" has the meaning given such term in the initial paragraph of
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this agreement.
"Allocation Percentage" means, for any Person, with respect to a Person's
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Non Wholly-Owned Subsidiary, the percentage ownership interest of such Person in
such Non Wholly-Owned Subsidiary.
"Applicable Lending Office" means, with respect to each Bank, such Bank's
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Domestic Lending Office in the case of a Prime Rate Advance and such Bank's
LIBOR Lending Office in the case of a LIBOR Rate Advance.
"Applicable Margin" means, with respect to each Type of Advance at any
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date, the applicable percentage per annum set forth below based upon the Status
then in effect under the column for such Type of Advance.
Prime Rate LIBOR
Advances Rate Advances
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Level I .375% 1.875%
Status
Level II .50% 2.00%
Status
"Asset Disposition" means (a) any sale, lease of substantially all of a
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Hotel Property (in which the Borrower or a Guarantor is lessor but exclusive of
the Participating Leases), conveyance, exchange, transfer, or assignment of any
Property by the Borrower or a Guarantor to a Person other than the Borrower or a
Guarantor; and (b) any insured loss or casualty of Hotel Property owned by the
Borrower or any Guarantor if the insurance proceeds in connection therewith are
required by the provisions of this Agreement to be used to repay Obligations.
"Assignment and Acceptance" means an assignment and acceptance entered into
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by a Bank and an Eligible Assignee, and accepted by the Administrative Agent, in
substantially the form of the attached Exhibit B.
"Associates" means, for any individual, the Associates (as such term is
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defined in Rule 12b-2 promulgated under the Exchange Act) of such individual.
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"Banks" means the lenders listed on the signature pages of this Agreement
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and each Eligible Assignee that shall become a party to this Agreement pursuant
to Section 11.06.
"Blockage Period" has the meaning set forth in Section 10.02.
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"Borrower" means American General Hospitality Operating Partnership, L.P.,
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a Delaware limited partnership.
"Borrower Controlled Group" means all members of a controlled group of
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corporations and all trades (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414 of the Code.
"Borrowing" means a borrowing consisting of simultaneous Advances of the
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same Type made by each Bank pursuant to Section 2.01 or Converted by each Bank
to Advances of a different Type pursuant to Section 2.02(b).
"Business Day" means a day of the year on which banks are not required or
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authorized to close in New York City or Dallas, Texas and, if the applicable
Business Day relates to any LIBOR Rate Advances, any day other than a Saturday
or Sunday or a day on which banking institutions are generally authorized or
obligated by law or executive order to close in the City of London, England
"Capital Expenditure" means any payment made directly or indirectly for the
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purpose of acquiring or constructing fixed assets, Real Property or equipment
which in accordance with GAAP would be capitalized in the fixed asset accounts
of such Person making such expenditure, including, without limitation, amounts
paid or payable for such purpose under any conditional sale or other title
retention agreement or under any Capital Lease, but excluding repairs of
Property in the normal and ordinary course of business in keeping with the past
practices of the Borrower.
"Capitalization Event" means either (a) any sale or issuance by the Parent
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or any of its Subsidiaries of equity securities except for the issuance of the
Borrower's operating partnership units in exchange for a direct or indirect
ownership interest in a Person that owns a Hotel Property, or (b) any issuance
or incurrence by the Parent or any of its Subsidiaries of any Indebtedness
except for Indebtedness permitted pursuant to the provisions of Section 6.02.
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"Capital Lease" means, for any Person, any lease of any Property (whether
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real, personal or mixed) by that Person as lessee which, in accordance with
GAAP, is or should be accounted for as a capital lease on the balance sheet of
that Person.
"Capitalized Lease Obligations" means, as to any Person, the capitalized
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amount of all obligations of such Person or any of its Subsidiaries under
Capitalized Leases, as determined on a consolidated basis in conformity with
GAAP.
"Cash Collateral Account" means a special cash collateral account
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containing cash deposited pursuant to the terms of this Agreement to be
maintained at the Administrative Agent's office in accordance with Section 8.04.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
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Liability Act of 1980, as amended, state and local analogs, and all rules and
regulations and requirements thereunder in each case as now or hereafter in
effect.
"Closing Date" means February 13, 1998.
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"Code" means the Internal Revenue Code of 1986, as amended, and any
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successor statute.
"Commitment" means, with respect to any Bank, the amount set opposite such
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Bank's name on Schedule 1.01(a) as its Commitment, or if such Bank has entered
into any Assignment and Acceptance, the amount set forth for such Bank as its
Commitment in the Register maintained by the Administrative Agent pursuant to
Section 11.06(c), as such amount may be reduced pursuant to Section 2.04.
"Compliance Certificate" means a certificate of the Borrower in
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substantially the form of the attached Exhibit D.
"Conditions to Asset Disposition" shall for any Asset Disposition include
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all of the following requirements: (a) no Default has occurred and is continuing
or would occur upon the consummation of such Asset Disposition, as certified by
the Borrower; (b) the Borrower shall have delivered to the Administrative Agent
a Property Adjustment Report in connection with such Asset Disposition; and (c)
if required pursuant to the provisions of Section 2.07(c)(ii), the Borrower
makes a prepayment
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of the Advances in an amount of not less than the amount of Advances that would
need to be repaid, if any, to cure a Total Availability deficiency under Section
2.07(c)(ii).
"Consolidated" refers to the consolidation of the accounts of the Borrower
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with the Borrower's Subsidiaries and the Parent with the Parent's Subsidiaries,
as applicable, in accordance with GAAP, including, when used in reference to the
Borrower, principles of consolidation consistent with those applied in the
preparation of the Financial Statements.
"Control Percentage" means, with respect to any Person, the percentage of
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the outstanding capital stock of such Person having ordinary voting power which
gives the direct or indirect holder of such stock the power to elect a majority
of the Board of Directors of such Person.
"Controlled Group" means each of the Borrower Controlled Group, the
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Participating Lessee Controlled Group and the Manager Controlled Group, and
"Controlled Groups" means, collectively, all of such groups.
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"Convert", "Conversion", and "Converted" each refers to a conversion of
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Advances of one Type into Advances of another Type pursuant to Section 2.02(b).
"Cost Basis" means for any Hotel Property the sum of (a) for any Initial
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Property, the amount set forth for such Initial Property on Schedule 1.01(b)
attached hereto, and for any other Hotel Property, the aggregate purchase price
paid by the Borrower or its Subsidiary for such other Hotel Property (giving
effect to any securities used to purchase a Hotel Property at the fair market
value of the securities at the time of purchase based upon the price at which
such securities could be exchanged into the Parent's common stock assuming such
exchange occurred on the date of acquiring the Hotel Property), and (b) the
actual cost of any Capital Expenditures or expenditures for FF&E for such Hotel
Property made by the Borrower or its Subsidiaries pursuant to a Preliminary
Property Plan; provided that with respect to the Cost Basis for a Hotel Property
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owned or leased by a Non Wholly-Owned Subsidiary, the Cost Basis for such Hotel
Property shall be deemed to be the Allocation Percentage of the Cost Basis for
such Hotel.
"Credit Documents" means this Agreement, the Notes, the Subordinate
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Guaranties, the Environmental Indemnities, the Fee Letter, and each other
agreement, instrument or document executed by the Borrower or any of its
Subsidiaries at any time in connection with this Agreement.
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"Debt Service" means, for any Person for the period for which such amount
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is being determined, the amount (without duplication) of all mandatory principal
payments scheduled to be made (excluding optional prepayments and scheduled
principal payments in respect of any such Indebtedness which is payable in a
single installment at final maturity), Interest Expense and all payments
scheduled to be made in respect of Capital Leases of such Person.
"Debt Service Coverage Ratio" means, as of the end of any Rolling Period, a
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ratio of (a) Adjusted EBITDA to (b) Debt Service, for such Rolling Period.
"Default" means (a) an Event of Default or (b) any event or condition which
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with notice or lapse of time or both would, unless cured or waived, become an
Event of Default.
"Documentation Agent" means Societe Generale, Southwest Agency in its
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capacity as Documentation Agent for the Banks pursuant to Article IX and any
successor Documentation Agent pursuant to Section 9.06.
"Dollar Equivalent" means the equivalent in another currency of an amount
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in U.S. Dollars to be determined by reference to the rate of exchange quoted by
the Administrative Agent, at 11:00 a.m. (Dallas, Texas time) on the date of
determination, for the spot purchase in the foreign exchange market of such
amount of Dollars with such other currency.
"Dollars" and "$" means lawful money of the United States of America.
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"Domestic Lending Office" means, with respect to any Bank, the office of
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such Bank specified as its "Domestic Lending Office" opposite its name on
Schedule 11.02 or such other office of such Bank as such Bank may from time to
time specify to the Borrower and the Administrative Agent.
"EBITDA" means for any Person or Hotel Property, as applicable, for any
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period for which such amount is being determined, an amount equal to (a) the Net
Income for such Person or Hotel Property, as applicable, for such period plus
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(b) to the extent deducted in determining Net Income, Interest Expense, income
taxes, depreciation, amortization, and other non-cash items for such period, as
determined in accordance with GAAP; provided that if any Property of a Person
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has been sold or conveyed by such Person in such period, the amounts referred to
in clauses (a)-(b) above arising from such Property shall be excluded from the
calculation of EBITDA for such Person for such
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period; and provided further that if such Person has acquired any Property in
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such period, the amounts referred to in clauses (a)-(b) above arising from such
Property during such entire period shall be included in the calculation of
EBITDA for such Person for such period.
"Effective Date" means the date all of the conditions precedent set forth
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in Section 3.01 have been satisfied.
"Eligible Assignee" means (a) a commercial bank organized under the laws of
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the United States, or any State thereof, and having primary capital of not less
than $250,000,000 and approved by the Agents, which approvals will not be
unreasonably withheld, (b) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development and having primary capital (or its equivalent) of not less than
$250,000,000 (or its Dollar Equivalent) and approved by the Agents, which
approvals will not be unreasonably withheld, (c) a Bank, and (d) an Affiliate of
the respective assigning Bank, without approval of any Person but otherwise
meeting the eligibility requirements of (a) or (b) above.
"Eligible Property" means a Hotel Property deemed an "Eligible Property"
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under the Senior Credit Agreement.
"Engineering Report" means with respect to any Hotel Property, an
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engineering report in accordance with the scope of services attached hereto as
Schedule 1.01 (c) reasonably satisfactory to the Agents prepared for the Banks
by a Person set forth on Schedule 1.01(d) or otherwise satisfactory to the
Agents covering the physical condition of the Hotel Property, including without
limitation the structural, electrical, plumbing, mechanical and other essential
components of the Hotel Property.
"Environment" or "Environmental" shall have the meanings set forth in 42
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U.S.C. (S) 9601(8), as amended.
"Environmental Claim" means any third party (including governmental
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agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation (including claims or proceedings under the
Occupational Safety and Health Acts or similar laws or requirements relating to
health or safety of employees) which seeks to impose liability under any
Environmental Law.
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"Environmental Indemnity" means one or more environmental indemnity
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agreements dated of even date herewith in substantially the form of the attached
Exhibit D executed or to be executed by the Borrower, the Parent and all
Subsidiaries of the Borrower (excluding the Permitted Other Subsidiaries), and
any future environmental indemnities executed in connection with any Hotel
Property, as any of such environmental indemnities may be amended hereafter in
accordance with the terms of such agreements.
"Environmental Law" means all Legal Requirements arising from, relating to,
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or in connection with the Environment, health, or safety, including without
limitation CERCLA, relating to (a) pollution, contamination, injury,
destruction, loss, protection, cleanup, reclamation or restoration of the air,
surface water, groundwater, land surface or subsurface strata, or other natural
resources; (b) solid, gaseous or liquid waste generation, treatment, processing,
recycling, reclamation, cleanup, storage, disposal or transportation; (c)
exposure to pollutants, contaminants, hazardous, medical, infectious, or toxic
substances, materials or wastes; (d) the safety or health of employees; or (e)
the manufacture, processing, handling, transportation, distribution in commerce,
use, storage or disposal of hazardous, medical, infectious, or toxic substances,
materials or wastes.
"Environmental Permit" means any permit, license, order, approval or other
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authorization under Environmental Law.
"Environmental Report" means with respect to any Hotel Property, an
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environmental report in accordance with the scope of services attached hereto as
Schedule 1.01 (e) prepared for the Banks by a Person set forth on Schedule
1.01(f) or otherwise satisfactory to the Agents certifying to the Agents and the
Banks that the Hotel Property and the soil and the groundwater thereunder do not
contain Hazardous Substances except for Permitted Hazardous Substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"Eurocurrency Liabilities" has the meaning assigned to that term in
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Regulation D of the Federal Reserve Board (or any successor), as in effect from
time to time.
"Event of Default" has the meaning set forth in Section 8.01.
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"Exchange Act" has the meaning set forth in Section 2.04.
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"Federal Funds Rate" means, for any period, a fluctuating interest rate per
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annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for any such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
---------------------
System or any of its successors.
"Fee Letter" means the letter agreement dated as of January 15, 1998 among
----------
the Borrower, the Documentation Agent, the Administrative Agent and the Managing
Agents, as amended.
"FF&E" means furniture, fixtures and equipment.
----
"FF&E Reserve" means, for any Person or any Hotel Property for any period,
------------
a reserve equal to four percent (4%) of gross revenues from any Hotel Property
owned by such Person or from such Hotel Property, as applicable, for such
period, excluding, however, from such calculation for the applicable Persons and
Hotel Properties the gross revenues generated by the office portion of the
Houston, Texas Marriott and the gross revenues generated by the retail portion
of the St. Tropez hotel, Las Vegas, Nevada.
"Financial Covenant Default" has the meaning set forth in Section 10.02.
--------------------------
"Financial Statements" means the financial statements of the Parent, the
--------------------
Borrower and their respective Subsidiaries dated as of September 30, 1997.
"Fiscal Quarter" means each of the three-month periods ending on March 31,
--------------
June 30, September 30 and December 31.
"Fiscal Year" means the twelve-month period ending on December 31.
-----------
-10-
"Florida Liens" means the Liens securing the Senior Credit Documents on the
-------------
Initial Properties located in the State of Florida.
"Franchise Agreements" means those certain Agreements listed on Schedule
--------------------
4.21 attached hereto and any future franchise or license agreement for a Hotel
Property with a Franchisor.
"Franchisor" means those certain franchisors listed on Schedule 1.01(g)
----------
attached hereto, or any other reputable, nationally known, third party
franchisor or licensor of a Hotel Property approved by the Agents in writing.
"Free Cash Flow" means, for any Person for any period, the Funds From
--------------
Operations for such period plus any amortization of deferred financing costs for
----
such period less (a) the aggregate FF&E Reserves for such Person and its
----
Subsidiaries for such period, and (b) the aggregate amount of scheduled
principal payments on the Total Indebtedness of such Person (excluding optional
prepayments and scheduled principal payments in respect of any such Indebtedness
which is payable in a single installment at final maturity) required to be made
during such period.
"Fund," "Trust Fund," or "Superfund" means the Hazardous Substance Response
---- ---------- ---------
Trust Fund, established pursuant to 42 U.S.C. (S) 9631 (1988) and the Post-
closure Liability Trust Fund, established pursuant to 42 U.S.C. (S) 9641 (1988),
which statutory provisions have been amended or repealed by the Superfund
Amendments and Reauthorization Act of 1986, and the "Fund," "Trust Fund," or
"Superfund" that are now maintained pursuant to 42 U.S.C. (S) 9507.
"Funds From Operations" means, for any Person for any period for which such
---------------------
amount is being determined, an amount equal to such Person's Net Income for such
period excluding gains (losses) from debt restructuring and sales of property
(including furniture and equipment) plus depreciation and amortization
(excluding amortization of deferred financing costs) and after adjustments for
unconsolidated partnerships and joint ventures.
"Future Property" means any Hotel Property except for the Initial
---------------
Properties which the Borrower or any Subsidiary of the Borrower acquires.
"GAAP" means United States generally accepted accounting principles as in
----
effect from time to time, applied on a basis consistent with the requirements of
Section 1.03.
-11-
"General Partner" means AGH GP, Inc., a Nevada corporation.
---------------
"Governmental Authority" means any foreign governmental authority, the
----------------------
United States of America, any state of the United States of America and any
subdivision of any of the foregoing, and any agency, department, commission,
board, authority or instrumentality, bureau or court having jurisdiction over
any Bank, the Parent, the Borrower, any Subsidiaries of the Borrower or the
Parent, the Participating Lessee, the Manager or any of their respective
Properties.
"Governmental Proceedings" means any action or proceedings by or before any
------------------------
Governmental Authority, including, without limitation, the promulgation,
enactment or entry of any Legal Requirement.
"Ground Lease" means each of the ground leases or subground leases set
------------
forth on Schedule 1.01(h) hereto and for a Future Property means any ground
lease (a) which is a direct ground lease granted by the fee owner of real
property, (b) which may be transferred and/or assigned without the consent of
the lessor (or as to which the lease expressly provides that (i) such lease may
be transferred and/or assigned with the consent of the lessor and (ii) such
consent shall not be unreasonably withheld or delayed), (c) which has a
remaining term (including any renewal terms exercisable at the sole option of
the lessee) of at least twenty five (25) years, (d) under which no material
default has occurred and is continuing, (e) with respect to which a Lien may be
granted without the consent of the lessor, and (f) which contains lender
protection provisions acceptable to the Documentation Agent, including, without
limitation, provisions to the effect that (i) the lessor shall notify any holder
of a Lien in such lease of the occurrence of any default by the lessee under
such lease and shall afford such holder the option to cure such default, and
(ii) in the event that such lease is terminated, such holder shall have the
option to enter into a new lease having terms substantially identical to those
contained in the terminated lease.
"Guarantor" means Parent and each Subsidiary of the Borrower (except the
---------
Permitted Other Subsidiaries). The Guarantors on the Effective Date are
identified on Schedule 1.01(i).
"Hazardous Substance" means the substances identified as such pursuant to
-------------------
CERCLA and those regulated under any other Environmental Law, including without
limitation pollutants, contaminants, petroleum, petroleum products, radio
nuclides, radioactive materials, and medical and infectious waste.
-12-
"Hazardous Waste" means the substances regulated as such pursuant to any
---------------
Environmental Law.
"Hotel Capital Lease Limit" means for any Hotel Property $1,000 per room in
-------------------------
such Hotel Property or such other amount of Capital Leases as is approved by the
Agents in writing (which approval will not be unreasonably withheld).
"Hotel Operating Lease Limit" means for any Hotel Property $750 per room in
---------------------------
such Hotel Property or such other amount of operating leases as is approved by
the Agents in writing (which approval will not be unreasonably withheld).
"Hotel Property" for any hotel means the Real Property and the Personal
--------------
Property for such hotel, and the property referred to in Section 11.13.
"Hotel Value" means, with respect to any Hotel Property, at any date, the
-----------
value thereof to be calculated as follows:
(a) For a Seasoned Property, (i) the Adjusted EBITDA for such Seasoned
Property for the preceding Rolling Period divided by (ii) ten percent (10.0%);
----------
and
(b) For a New Property, the Cost Basis in such New Property.
The initial Hotel Value for the Initial Properties is set forth on Schedule
1.01(b) attached hereto.
"Improvements" for any hotel means all buildings, structures, fixtures,
------------
tenant improvements and other improvements of every kind and description now or
hereafter located in or on or attached to the Land for such hotel; and all
additions and betterments thereto and all renewals, substitutions and
replacements thereof.
"Indebtedness" means (without duplication), at any time and with respect to
------------
any Person, (a) indebtedness of such Person for borrowed money (whether by loan
or the issuance and sale of debt securities) or for the deferred purchase price
of property or services purchased (other than amounts constituting trade
payables or bank drafts arising in the ordinary course); (b) indebtedness of
others in the amount which such Person has directly or indirectly assumed or
guaranteed or otherwise provided credit support therefor or for which such
Person is liable as a partner of such Person; (c)
-13-
indebtedness of others in the amount secured by a Lien on assets of such Person,
whether or not such Person shall have assumed such indebtedness; (d) obligations
of such Person in respect of letters of credit, acceptance facilities, or drafts
or similar instruments issued or accepted by banks and other financial
institutions for the account of such Person (other than trade payables or bank
drafts arising in the ordinary course); (e) obligations of such Person under
Capital Leases; and (f) obligations under interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements or other similar
agreements or arrangements designed to protect against fluctuations in interest
rates.
"Initial Properties" means collectively the Hotel Properties listed on
------------------
Schedule 1.01(b), and "Initial Property" means any of such Hotel Properties.
----------------
"Interest Coverage Ratio" means, as of the end of any Rolling Period, a
-----------------------
ratio of (a) Adjusted EBITDA to (b) Interest Expense, for such Rolling Period.
"Interest Expense" means, for any Person for any period for which such
----------------
amount is being determined, the total interest expense (including that properly
attributable to Capital Leases in accordance with GAAP) and all charges incurred
with respect to letters of credit determined on a consolidated basis in
conformity with GAAP, plus capitalized interest of such Person and its
----
Subsidiaries.
"Interest Period" means, for each LIBOR Rate Advance comprising part of the
---------------
same Borrowing, the period commencing on the date of such Advance or the date of
the Conversion of any Prime Rate Advance into such an Advance and ending on the
last day of the period selected by the Borrower pursuant to the provisions below
and Section 2.02 and, thereafter, each subsequent period commencing on the last
day of the immediately preceding Interest Period and ending on the last day of
the period selected by the Borrower pursuant to the provisions below and Section
2.02. The duration of each such Interest Period shall be one, two, or three
months, in each case as the Borrower may select, upon notice received by the
Administrative Agent not later than 11:00 a.m. (Dallas, Texas time) on the third
Business Day prior to the first day of such Interest Period, provided, however,
-------- -------
that:
(a) Interest Periods for Advances of the same Borrowing shall be of the
same duration;
(b) whenever the last day of any Interest Period would otherwise occur on
a day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next
-14-
succeeding Business Day, provided that if such extension would cause the last
--------
day of such Interest Period to occur in the next following calendar month, the
last day of such Interest Period shall occur on the next preceding Business Day;
(c) any Interest Period which begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month; and
(d) each successive Interest Period shall commence on the day on which the
next preceding Interest Period expires; and
(e) no Interest Period with respect to any portion of any Advance shall
extend beyond the Maturity Date.
"Interest Rate Agreements" means any interest rate swap agreement, interest
------------------------
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement designed to protect the Borrower, the Parent or any of their
respective Subsidiaries against fluctuations in interest rates.
"Investment" means, with respect to any Person, (a) any loan or advance to
----------
any other Person, (b) the ownership, purchase or other acquisition of, any
Stock, Stock Equivalents, other equity interest, obligations or other securities
of, (i) any other Person, (ii) or all or substantially all of the assets of any
other Person, or (iii) all or substantially all of the assets constituting the
business of a division, branch or other unit operation of any other Person, or
(c) any joint venture or partnership with, or any capital contribution to, or
other investment in, any other Person or any real property.
"Land" for any hotel means the real property upon which the hotel is
----
located, together with all rights, title and interests appurtenant to such real
property, including without limitation all rights, title and interests to (a)
all strips and gores within or adjoining such property, (b) the streets, roads,
sidewalks, alleys, and ways adjacent thereto, (c) all of the tenements,
hereditaments, easements, reciprocal easement agreements, rights-of-way and
other rights, privileges and appurtenances thereunto belonging or in any way
pertaining thereto, (d) all reversions and remainders, (e) all air space rights,
and all water, sewer and wastewater rights, (e) all mineral, oil, gas,
hydrocarbon substances and other rights to produce or share in the production of
anything related to such
-15-
property, and (f) all other appurtenances appurtenant to such property,
including without limitation, any now or hereafter belonging or in anywise
appertaining thereto.
"Legal Requirement" means any law, statute, ordinance, decree, requirement,
-----------------
order, judgment, rule, regulation (or official interpretation of any of the
foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority.
"Leverage Ratio" means the ratio of (a) the Parent's Total Indebtedness to
--------------
(b) the Hotel Value of the Parent's and the Parent's Subsidiaries' Hotel
Properties which meet the Parent Property Requirements.
"LIBOR Lending Office" means, with respect to any Bank, the office of such
--------------------
Bank specified as its "LIBOR Lending Office" opposite its name on Schedule 11.02
(or, if no such office is specified, its Domestic Lending Office) or such other
office of such Bank as such Bank may from time to time specify to the Borrower
and the Administrative Agent.
"LIBOR Rate" means, for the Interest Period for each LIBOR Rate Advance
----------
comprising part of the same Borrowing, an interest rate per annum (rounded
upward to the nearest whole multiple of 1/16 of 1% per annum) equal to (A) the
rate per annum at which deposits in Dollars are offered to prime banks in the
London interbank market at 11:00 a.m. (London time) three Business Days before
the first day of such Interest Period as shown on the display designated
"British Banker's Association Interest Settlement Rates" on the Telerate System
("Telerate") at Page 3750 or Page 3740, or such other page or pages as may
replace such pages on Telerate for purposes of displaying such rate, in an
amount substantially equal to the Administrative Agent's LIBOR Rate Advance
comprising part of such Borrowing and for a period equal to such Interest Period
divided by (B) one minus the LIBOR Reserve Requirement; provided, however, that
if such rate is not available on Telerate then such offered rate shall be
otherwise independently determined by Administrative Agent from an alternate,
substantially similar source available to Administrative Agent or shall be
calculated by Administrative Agent by a substantially similar methodology as
that theretofore used to determine such offered rate in Telerate. It is agreed
that for purposes of this definition, LIBOR Rate Advances made hereunder shall
be deemed to constitute Eurocurrency Liabilities as defined in Regulation D and
to be subject to the reserve requirements of Regulation D.
"LIBOR Rate Advance" means any Advance which bears interest as provided in
------------------
Section 2.06(b).
-16-
"LIBOR Reserve Requirement" shall mean, on any day, that percentage
-------------------------
(expressed as a decimal fraction) which is in effect on such date, as provided
by the Federal Reserve System for determining the maximum reserve requirements
generally applicable to financial institutions regulated by the Federal Reserve
Board comparable in size and type to the Administrative Agent (including,
without limitation, basic, supplemental, marginal and emergency reserves) under
Regulation D with respect to "Eurocurrency liabilities" as currently defined as
Regulation D, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding (or other category of
liabilities which includes deposits by reference to which the interest rate on a
LIBOR Rate Advance is determined or any category or extensions of credit which
includes loans by a non-United States office of the Administrative Agent to
United States residents). Each determination by the Administrative Agent of the
LIBOR Reserve Requirement, shall, in the absence of manifest error, be
conclusive and binding upon the Borrower.
"Lien" means any mortgage, lien, pledge, charge, deed of trust, security
----
interest, encumbrance or other type of preferential arrangement to secure or
provide for the payment of any obligation of any Person, whether arising by
contract, operation of law or otherwise (including, without limitation, the
interest of a vendor or lessor under any conditional sale agreement, Capital
Lease or other title retention agreement).
"Liquid Investments" means:
------------------
(a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States;
(b) (i) negotiable or nonnegotiable certificates of deposit, time
deposits, or other similar banking arrangements maturing within 180 days from
the date of acquisition thereof ("bank debt securities"), issued by (A) any Bank
or (B) any other bank or trust company which has a combined capital surplus and
undivided profit of not less than $250,000,000 or the Dollar Equivalent thereof,
if at the time of deposit or purchase, such bank debt securities are rated not
less than "A" (or the then equivalent) by the rating service of S&P or of
Moody's, and (ii) commercial paper issued by (A) any Bank or (B) any other
Person if at the time of purchase such commercial paper is rated not less than
"A-2" (or the then equivalent) by the rating service of S&P or not less than "P-
2" (or the then equivalent) by the rating service of Moody's, or upon the
discontinuance of both of such services, such other nationally recognized rating
service or services, as the case may be, as shall be selected by the Borrower
with the consent of the Administrative Agent;
-17-
(c) repurchase agreements relating to investments described in clauses (a)
and (b) above with a market value at least equal to the consideration paid in
connection therewith, with any Person who regularly engages in the business of
entering into repurchase agreements and has a combined capital surplus and
undivided profit of not less than $250,000,000 or the Dollar Equivalent thereof,
if at the time of entering into such agreement the debt securities of such
Person are rated not less than "A" (or the then equivalent) by the rating
service of S&P or of Moody's; and
(d) such other instruments (within the meaning of Article 9 of the Texas
Business and Commerce Code) as the Borrower may request and the Administrative
Agent may approve in writing, which approval will not be unreasonably withheld.
"Majority Banks" means, at any time, Banks holding at least 51% of the then
--------------
aggregate unpaid principal amount of the Notes at such time, or, if no such
principal amount of the Notes is then outstanding, Banks having at least 51% of
the aggregate amount of the Commitments at such time.
"Management Agreements" means those certain Management Agreements listed on
---------------------
Schedule 4.22 attached hereto and any future management agreement for a Hotel
Property in substantially the same form or as otherwise approved by the Agents
in writing.
"Manager" means ▇▇▇▇, or any other manager of a Hotel Property approved by
-------
the Agents in writing.
"Manager Controlled Group" means all members of a controlled group of
------------------------
corporations and all trades (whether or not incorporated) under common control
which, together with the Manager, are treated as a single employer under Section
414 of the Code.
"Managing Agents" means The Bank of Nova Scotia and ▇▇▇▇▇ Fargo Bank,
---------------
National Association as Managing Agents, and any successor Managing Agents.
"Material Adverse Change" shall mean a material adverse change in the
-----------------------
business, financial condition, or results of operations of the Borrower, the
Parent or any Guarantor, in each case since the date of the most recent
financial statements of the Borrower or the Parent delivered to the Banks.
"Maturity Date" means May 20, 2001.
-------------
-18-
"Maximum Rate" means the maximum nonusurious interest rate under applicable
------------
law.
"Minimum Tangible Net Worth" means, with respect to the Parent, at any
--------------------------
time, the sum of $450,000,000 plus (a) 75% of the aggregate net proceeds
----
received by the Parent or any of its Subsidiaries after the date of this
Agreement in connection with any offering of Stock or Stock Equivalents of the
Parent or its Subsidiaries taken as a whole and (b) 75% of the value of any
partnership interests in Borrower issued after the date of this Agreement for
the acquisition of a Hotel Property or any interest in a Hotel Property
permitted hereunder.
"Minority Interest Adjustment" means an amount equal to the fair market
----------------------------
value on the date of issuance of all partnership interests in the Borrower which
(a) are not directly or indirectly owned by the Parent and (b) have been
conveyed to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or Persons owned or controlled by such
individuals in exchange for a Hotel Property or an ownership interest in a
Person which own a Hotel Property.
"Moody's" means ▇▇▇▇▇'▇ Investor Service Inc.
-------
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
------------------
4001(a)(3) of ERISA to which the Borrower or any member of a Controlled Group is
making or accruing an obligation to make contributions.
"Net Cash Proceeds" means (a) the aggregate cash proceeds (including,
-----------------
without limitation, insurance proceeds) received by the Parent, the Borrower or
any of their respective Subsidiaries (as applicable) in connection with any
Asset Disposition or Capitalization Event, minus (b) the reasonable expenses of
-----
such Person in connection with such Asset Disposition or such Capitalization
Event.
"Net Income" means, for any Person or Hotel Property for any period for
----------
which such amount is being determined, the net income of such Person (on a
consolidated basis) or Hotel Property, as applicable, after taxes, as determined
in accordance with GAAP, excluding, however, extraordinary items, including but
not limited to (i) any net gain or loss during such period arising from the
sale, exchange, or other disposition of capital assets (such term to include all
fixed assets and all securities) other than in the ordinary course of business
and (ii) any write-up or write-down of assets; provided that with respect to Net
--------
Income received from a Non Wholly-Owned Subsidiary or for a
-19-
Hotel Property owned by a Non Wholly-Owned Subsidiary, such Person or Hotel
Property shall only be deemed to have received the Allocation Percentage of such
Net Income, and provided further that to the extent that the Net Income for any
----------------
Hotel Property does not include a reasonable allocation of administrative,
accounting or other overhead of the Person or Persons who directly or indirectly
own or lease such Hotel Property which directly pertains to the operation of
Hotel Properties, then such allocation amount shall be deemed subtracted from
such Net Income for purposes of the financial tests and other definitions
contained in this Agreement which utilize Hotel Property Net Income.
"Net Worth" means, for any Person, stockholders equity of such Person
---------
determined in accordance with GAAP.
"New Property" means, as at any date, any Hotel Property (including any
------------
Renovating Property) that is not a Seasoned Property.
"Non Wholly-Owned Subsidiary" of a Person means any Subsidiary of such
---------------------------
Person which is controlled and managed by such Person, except for a Wholly-Owned
Subsidiary.
"Note" means a subordinated promissory note of the Borrower payable to the
----
order of any Bank, in substantially the form of the attached Exhibit A,
evidencing indebtedness of the Borrower to such Bank resulting from Advances
owing to such Bank, and "Notes means all of such promissory notes.
-----
"Notice of Borrowing" means a notice of borrowing in the form of the
-------------------
attached Exhibit E signed by a Responsible Officer of the Borrower.
"Notice of Conversion or Continuation" means a notice of conversion or
------------------------------------
continuation in the form of the attached Exhibit F signed by a Responsible
Officer of the Borrower.
"Obligations" means all Advances, and other amounts payable by the Borrower
-----------
to the Documentation Agent, the Administrative Agent, or the Banks under the
Credit Documents.
"Parent" means American General Hospitality Corporation, a Maryland
------
corporation.
"Parent Common Stock" means the common stock of Parent, par value $.01 per
-------------------
share.
-20-
"Parent Properties" means all Hotel Properties owned or leased by the
-----------------
Parent or one of the Parent's Subsidiaries.
"Parent Property Requirements" means collectively that (a) all Parent
----------------------------
Properties must be located within the United States and must be either an
Eligible Property or a Permitted Non-Eligible Property under the Senior Credit
Agreement; (b) the Cost Basis for the Parent Properties which are located in any
one state shall not exceed 20% (except for Florida which shall not exceed 35%)
of the Cost Basis for all Parent Properties; (c) the Cost Basis for the Parent
Properties which are limited service hotels or extended stay shall not
collectively in the aggregate exceed 20% of the Cost Basis for all Parent
Properties (for purposes of this definition Courtyards by Marriott shall not be
deemed limited service hotels); (d) the Cost Basis for the Parent Properties
which are not operated under any franchise or license agreement shall not exceed
15% of the Cost Basis for all Parent Properties; (e) no Hotel Property or other
Property shall cause the Parent to forfeit the Parent's tax status as a REIT;
and (f) the Cost Basis for Parent Properties which are subject to a ground lease
shall not exceed 22.5% of the Cost Basis or 22.5% of the total guest rooms for
all Parent Properties.
"Parent Total Cost Basis" means the sum of (a) the Minority Interest
-----------------------
Adjustment plus (b) the cost of all Hotel Properties owned or leased by the
----
Parent and its Subsidiaries on a Consolidated basis determined in accordance
with GAAP.
"Participating Leases" means those certain Participating Leases listed on
--------------------
Schedule 1.01(j) attached hereto and any future participating lease for a Hotel
Property approved by the Agents in writing (which approval shall not be
unreasonably withheld).
"Participating Lessee" means AGH Leasing, TT Leasing, Prime Hospitality and
--------------------
any future participating lessee for a Hotel Property approved by the Agents in
writing (which approval shall not be unreasonably withheld as long as such
Person is at least 65% owned by the same individuals required of a Participating
Lessee pursuant to the provisions of Section 8.01(r)).
"Participating Lessee Controlled Group" means all members of a controlled
-------------------------------------
group of corporations and all trades (whether or not incorporated) under common
control which, together with the Participating Lessee, are treated as a single
employer under Section 414 of the Code.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
-21-
"Permitted Encumbrances" means the Liens permitted to exist pursuant to
----------------------
Section 6.01.
"Permitted Hazardous Substances" means (a) Hazardous Substances, petroleum
------------------------------
and petroleum products which are (i) used in the ordinary course of business and
in typical quantities for a hotel and (ii) generated, used and disposed of in
accordance with all Legal Requirements and good hotel industry practice and (b)
non-friable asbestos to the extent (i) that no applicable Legal Requirements
require removal of such asbestos from the Hotel Property and (ii) such asbestos
is encapsulated in accordance with all applicable Legal Requirements and such
reasonable operations and maintenance program as may be required by the Agents.
"Permitted Hotel Sale" means the Asset Disposition of all, but not a
--------------------
portion, of (a) a Hotel Property or (b) the ownership interest in a Subsidiary
of the Borrower which owns a Hotel Property, in either case for which the
Conditions to Asset Disposition are satisfied or will be satisfied within the
time periods required under this Agreement; provided, however, that the Borrower
shall be entitled to sell the office building portion of the Houston, Texas
Marriott as long as the other Conditions to Asset Disposition are satisfied in
connection with such sale.
"Permitted Non-Eligible Property" means a Hotel Property deemed a
-------------------------------
"Permitted Non-Eligible Property" under the Senior Credit Agreement.
"Permitted Non-Voting Stock Company" means a corporation (a) which has one
----------------------------------
class of voting common stock which is 91% owned by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and 9% owned
by the Borrower or a Subsidiary of the Borrower and one class of non-voting
common stock (the "Non-Voting Stock") owned entirely by the Borrower or a
Subsidiary of the Borrower, (b) which has ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ as its president or
chief executive officer, (c) which has articles of incorporation, by-laws or
other organizational documents which provide that the Non-Voting Stock
stockholder is entitled to at least 95% of all dividends declared by the Board
of Directors of the Permitted Non-Voting Stock Company, (d) which has no Liens
on any of the Hotel Properties owned by such Person except Permitted
Encumbrances and Liens which are held by the Borrower, and (e) the ownership of
which by the Borrower or any Subsidiary of the Borrower would not cause a
Material Adverse Change.
"Permitted Non-Voting Stock Investment" means (a) the Non-Voting Stock of a
-------------------------------------
Permitted Non-Voting Stock Company and (b) a loan to a Permitted Non-Voting
Stock Company which may or may not be secured by a Permitted Non-Voting Stock
Mortgage.
-22-
"Permitted Non-Voting Stock Mortgage" means a Lien on a Hotel Property
-----------------------------------
owned by a Permitted Non-Voting Stock Company which is held by the Borrower.
"Permitted Officer Assignment" means such sales, assignments or pledges of
----------------------------
such legal and beneficial interests in the Parent or the Borrower by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or any of their respective
Associates which for any such individual and such individual's Associates either
(a) does not result in a decrease in such individual's or individual's
Associates' ownership interests below 50% of the ownership interests in the
Borrower and the Parent's common stock represented by the sum of (i) the
interests that are owned on the date of this Agreement by such individual or
such individual's Associates and which is not subject to forfeiture on the date
of this Agreement and (ii) for which such individual or such individual's
Associates have vested options to acquire as of the date of this Agreement, (b)
occurs following such individual's termination of employment with the Parent or
(c) involves the exchange of ownership interests in the Borrower for the
Parent's common stock.
"Permitted Other Subsidiaries" means Persons deemed "Permitted Other
----------------------------
Subsidiaries" under the Senior Credit Agreement.
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, trust, unincorporated association, limited
liability company, joint venture or other entity, or a government or any
political subdivision or agency thereof or any trustee, receiver, custodian or
similar official.
"Personal Property" for any Hotel Property means all FF&E, inventory and
-----------------
other personal property of every kind, whether now existing or hereafter
acquired, tangible and intangible, now or hereafter located on or about the
Land, and used or to be used in the future in connection with the operation of
such Hotel Property.
"Plan" means an employee benefit plan (other than a Multiemployer Plan)
----
maintained for employees of the Borrower or any member of a Controlled Group and
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code.
"Preliminary Property Plan" means for any Hotel Property, the preliminary
-------------------------
financial projections of the Capital Expenditures and the expenditures for FF&E
for such Hotel Property in
-23-
connection with a renovation or expansion (but not maintenance) of such Hotel
Property, as such projections may be amended by the Borrower from time to time.
"Prime Hospitality" means Prime Hospitality Corp. or an Affiliate of Prime
-----------------
Hospitality Corp.
"Prime Rate" means a fluctuating interest rate per annum as shall be in
----------
effect from time to time equal to the rate of interest publicly announced by the
Administrative Agent as its prime commercial lending rate (which may not be the
lowest rate offered to its customers), whether or not the Borrower has notice
thereof.
"Prime Rate Advance" means an Advance which bears interest as provided in
------------------
Section 2.06(a).
"Property" of any Person means any property or assets (whether real,
--------
personal, or mixed, tangible or intangible) of such Person.
"Property Adjustment Report" means a certificate of the Borrower in
--------------------------
substantially the form of the attached Exhibit G.
"Property Information" for any Hotel Property means:
--------------------
(a) an Engineering Report and Environmental Report for such Hotel
Property,
(b) a commitment for a Title Policy for such Hotel Property, together with
a legible copy of all documents referred to in such commitment,
(c) a copy of each of the following for such Hotel Property certified as
true and correct by the Borrower:
i. If the Hotel Property is subject to a franchise agreement, the
franchise agreement and any requirements or conditions imposed by the
Franchisor at such time in connection with the franchise agreement,
including without limitation any requirements with respect to Capital
Expenditures or expenditures for FF&E for the Hotel Property;
ii. Management Agreement;
-24-
iii. Participating Lease;
iv. If the Hotel Property is subject to a ground lease, the ground
lease; and
v. The Property Owner's articles of incorporation, by-laws,
partnership agreements, as applicable, and certificates of existence, good
standing and authority to do business from each appropriate state
authority, and partnership or corporate, as applicable, authorizations
authorizing the execution, delivery and performance of the Accession
Agreement all certified to be true and complete by a duly authorized
officer of such Property Owner;
(d) if the Borrower has received a survey of the Real Property, a copy of
such survey;
(e) (i) a description of such Hotel Property, such description to include
the age, location and number of rooms or suites of such Hotel Property, and (ii)
to the extent available, statistics with respect to the occupancy of the Hotel
Property, operating statements, and an analysis of the revenue per available
room, in each case for the prior Fiscal Year and the completed Fiscal Quarters
of the current Fiscal Year;
(f) certificates and policies of insurance evidencing that the Hotel
Property is covered by the insurance required pursuant to Section 5.07 hereof,
provided that for the required earthquake insurance for the Initial Properties
the policy or policies for such earthquake insurance need only be delivered
within 30 days of the date of this Agreement;
(g) If the Hotel Property serves as collateral for any Indebtedness, a
description of the chief financial terms of such Indebtedness; and
(h) all other documents reasonably required by either Agent.
"Property Owner" for any Initial Property or Future Property, means the
--------------
Person who owns fee or leasehold title interest (as applicable) in, and to such
Property.
"Pro Rata Share" means, at any time with respect to any Bank, either (a)
--------------
the ratio (expressed as a percentage) of such Bank's Commitment at such time to
the aggregate Commitments at such time or (b) if the Commitments have been
terminated, the ratio (expressed as a percentage) of such
-25-
Bank's aggregate outstanding Advances at such time to the aggregate outstanding
Advances of all the Banks at such time.
"Real Property" for any hotel means the Land and the Improvements for such
-------------
hotel, including without limitation, parking and other ancillary functions
necessary for the operation of such hotel, and, (a) with respect to the Houston,
Texas Marriott shall include the Land and the Improvements for the office
building owned by the Borrower or a Guarantor other than the Parent in
connection with such hotel and (b) with respect to the St. Tropez hotel, Las
Vegas, Nevada shall include the Land and the Improvements for the retail
property owned by the Borrower or a Guarantor other than the Parent in
connection with such hotel.
"Register" has the meaning set forth in paragraph (c) of Section 11.06.
--------
"REIT" means a real estate investment trust under Sections 856-860 of the
----
Code.
"Release" shall have the meaning set forth in CERCLA or under any other
-------
Environmental Law.
"Remedial Action" has the meaning set forth in Section 10.03.
---------------
"Renovating Property" means a Hotel Property (i) that has been owned for
-------------------
four or more, but less than six, consecutive full Fiscal Quarters by the
Borrower or by a Person that has been a Subsidiary of the Borrower during such
entire period and (ii) with respect to which renovation, consisting of
alterations, remodeling and other similar work having an aggregate cost
exceeding ten percent (10%) of the Cost Basis in such Hotel Property, was
commenced within 180 days of such acquisition and was completed, or is
reasonably expected to be completed, within eighteen (18) months of such
acquisition.
"Reportable Event" means any of the events set forth in Section 4043(b) of
----------------
ERISA.
"Response" shall have the meaning set forth in CERCLA or under any other
--------
Environmental Law.
"Responsible Officer" means the Chief Executive Officer, President,
-------------------
Executive Vice President or Chief Financial Officer of any Person.
-26-
"Restricted Payment" means (a) any direct or indirect payment, prepayment,
------------------
redemption, purchase, or deposit of funds or Property for the payment (including
any sinking fund or defeasance), prepayment, redemption or purchase of
Indebtedness not permitted by this Agreement, and (b) the making by any Person
of any dividends or other distributions (in cash, property, or otherwise) on, or
payment for the purchase, redemption or other acquisition of, any shares of any
capital stock, any limited liability company interests or any partnership
interests of such Person, other than dividends or distributions payable in such
Person's stock, limited liability company interests or any partnership
interests.
"Required Work" means for any Initial Property, the work described on
-------------
Schedule 5.06 attached hereto as may be modified by agreement between the
Borrower and the Agents, and for any Future Property, the work agreed upon by
the Borrower and the Agents, if any, as the Required Work for such Future
Property, if any.
"Rolling Period" means, as of any date, the four Fiscal Quarters ending
--------------
immediately preceding such date.
"S&P" means Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇,
---
Inc., or any successor thereof.
"Seasoned Property" means, as at any date, a Hotel Property (excluding any
-----------------
Renovating Property) that has been owned for four (4) or more Fiscal Quarters,
by the Borrower or by a Person that has been a Subsidiary of the Borrower during
such entire period.
"Secured Non-Recourse Indebtedness" of any Person means all Indebtedness of
---------------------------------
such Person with respect to which recourse for payment is limited to specific
assets encumbered by a Lien securing such Indebtedness; provided, however, that
-------- -------
personal recourse of a holder of Indebtedness against any obligor with respect
thereto for fraud, misrepresentation, misapplication of cash, non-payment of
real estate taxes or ground lease rent, waste and other circumstances
customarily excluded from non-recourse provisions in non-recourse financing of
real estate shall not, by itself, prevent any Indebtedness from being
characterized as Secured Non-Recourse Indebtedness, provided further that if a
-------- ------- ----
personal recourse claim is made in connection therewith, such claim shall not
constitute Secured Non-Recourse Indebtedness for the purposes of this Agreement.
-27-
"Secured Recourse Indebtedness" of any Person means any Total Indebtedness
-----------------------------
(excluding any Secured Non-Resource Indebtedness) of such Person for which the
obligations thereunder are secured by a Lien on any assets of such Person or its
Subsidiaries.
"Senior Administrative Agent" means the administrative agent under the
---------------------------
Senior Credit Agreement.
"Senior Credit Agreement" means that Amended and Restated Senior Unsecured
-----------------------
Credit Agreement dated as of even date herewith, between the Borrower and
certain lenders, as may be amended, modified or extended in accordance with the
provisions of this Agreement.
"Senior Credit Documents" means that Senior Credit Agreement and the
-----------------------
promissory notes, guaranties and other documents executed in connection with the
Senior Credit Agreement.
"Senior Creditors" means the holders of the Senior Obligations.
----------------
"Senior Obligations" means the Indebtedness of the Borrower, the Parent and
------------------
their respective Subsidiaries under the Senior Credit Documents, including
interest (including interest accruing after the filing of a petition initiating
any proceeding pursuant to any bankruptcy law with respect to the Borrower as
debtor) and reimbursement obligations thereunder.
"Senior Payment Default" has the meaning set forth in Section 10.02.
----------------------
"Status" means the existence of Level I Status or Level II Status, as the
------
case may be. As used in this definition:
"Level I Status" exists at any date if, at such date, the Leverage
--------------
Ratio is less than 55%; and
"Level II Status" exists at any date if, at such date, the Leverage
---------------
Ratio is equal to or greater than 55%.
Status shall be determined and changed as of the 50th day following any Fiscal
Quarter. Notwithstanding the foregoing, until the 50th day following the Fiscal
Quarter ending March 31, 1998, the Status in effect under this Agreement shall
be Level I Status.
-28-
"Stock" means shares of capital stock, beneficial or partnership interests,
-----
participations or other equivalents (regardless of how designated) of or in a
corporation or equivalent entity, whether voting or non-voting, and includes,
without limitation, common stock and preferred stock.
"Stock Equivalents" means all securities (other than Stock) convertible
-----------------
into or exchangeable for Stock and all warrants, options or other rights to
purchase or subscribe for any stock, whether or not presently convertible,
exchangeable or exercisable.
"Subordinate Guaranty" means one or more Subordinate Guaranty and
--------------------
Contribution Agreements in substantially the form of the attached Exhibit H
executed by the Borrower and all of the Subsidiaries of the Borrower (excluding
the Permitted Other Subsidiaries), evidencing the joint and several guaranty by
the signatories thereto of the obligations of Borrower in respect of the Credit
Documents and the obligations of landlords under Participating Leases, and any
future guaranty and contribution agreement executed to secure Advances except
for Supplemental Guaranties, as any of such agreements may be amended hereafter
in accordance with the terms of such agreements.
"Subsidiary" of a Person means any corporation, association, partnership or
----------
other business entity of which more than 50% of the outstanding shares of
capital stock (or other equivalent interests) having by the terms thereof
ordinary voting power under ordinary circumstances to elect a majority of the
board of directors or Persons performing similar functions (or, if there are no
such directors or Persons, having general voting power) of such entity
(irrespective of whether at the time capital stock (or other equivalent
interests) of any other class or classes of such entity shall or might have
voting power upon the occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more
Subsidiaries of such Person or by one or more Subsidiaries of such Person. A
Permitted Non-Voting Stock Company shall not be deemed a Subsidiary of either
the Borrower or the Parent for all purposes under this Agreement.
"Super Majority Banks" means, at any time, Banks holding at least 66 2/3%
--------------------
of the then aggregate unpaid principal amount of the Notes at such time, or, if
no such principal amount of the Notes is then outstanding, Banks having at least
66 2/3% of the aggregate amount of the Commitments at such time.
"Supplemental Guarantor" means any partner of the Borrower except for the
----------------------
Parent, the Guarantors, the General Partner or AGH LP that executes a
Supplemental Guaranty.
-29-
"Supplemental Guaranty" means any future assumption of liability in a form
---------------------
reasonably acceptable to the Agents executed by a Supplemental Guarantor to
secure Advances, as such future supplemental guaranties may be amended hereafter
in accordance with their terms.
"Termination Event" means (a) the occurrence of a Reportable Event with
-----------------
respect to a Plan, as described in Section 4043 of ERISA and the regulations
issued thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations), (b) the withdrawal of the
Borrower or any of a Controlled Group from a Plan during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the
giving of a notice of intent to terminate a Plan under Section 4041(c) of ERISA,
(d) the institution of proceedings to terminate a Plan by the PBGC, or (e) any
other event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan.
"Total Assets" of any Person means, at any date, the total assets of such
------------
Person and its Subsidiaries at such date determined on a consolidated basis in
conformity with GAAP.
"Total Availability" means, at any date of its determination, an amount
------------------
equal to (a) the Parent's and the Parent's Subsidiaries' Consolidated Adjusted
EBITDA for the Rolling Period immediately preceding such date multiplied by (i)
on or prior to December 31, 1998, six (6) and (ii) after December 31, 1998, five
(5), minus (b) the sum of (i) all Indebtedness of the Parent and its
-----
Subsidiaries outstanding on such date, including without limitation the Senior
Obligations, Secured Recourse Indebtedness and Secured Non-Recourse Indebtedness
and (ii) to the extent not included in the preceding clause (i), the aggregate
face amount of any letters of credit issued under the Senior Credit Agreement.
"Total Availability Determination Date" means any date the Total
-------------------------------------
Availability is determined in accordance with Section 2.14.
"Total Indebtedness" of any Person means the sum of the following (without
------------------
duplication): (a) all Indebtedness of such Person and its Subsidiaries
determined on a Consolidated basis in conformity with GAAP, plus (b) such
----
Person's Unconsolidated Entity Percentage of Indebtedness (including Secured
Non-Recourse Indebtedness) of such Person's Unconsolidated Entities, minus (c)
-----
to the extent included in the calculation of either of the preceding clauses (a)
or (b), trade
-30-
payables and accruals permitted under the provisions of Section 6.02(e) hereof
and the amount of any minority interests.
"TT Leasing" means Twin Towers Leasing, L.P., a Delaware limited
----------
partnership.
"Type" has the meaning set forth in Section 1.04.
----
"Unconsolidated Entity" means, with respect to any Person, at any date, any
---------------------
other Person in whom such Person holds an Investment, which Investment is
accounted for in the financial statements of such Person on an equity basis of
accounting and whose financial results would not be consolidated under GAAP with
the financial results of such Person on the consolidated financial statements of
such Person, if such statements were prepared as of such date.
"Unconsolidated Entity Percentage" means, for any Person, with respect to a
--------------------------------
Person's Unconsolidated Entity, the percentage ownership interest of such Person
in such Unconsolidated Entity, provided that, in the event that such Person is
--------------
the general partner of such Unconsolidated Entity, such Person's Unconsolidated
Entity Percentage with respect to such Unconsolidated Entity shall be the
percentage of the general partner interests owned by such Person in such
Unconsolidated Entity with respect to any Indebtedness for which recourse may be
made against any general partner of such Unconsolidated Entity.
"Unencumbered" means, with respect to any Hotel Property, at any date of
------------
determination, the circumstance that such Hotel Property on such date:
(a) is not subject to any Liens (including restrictions on
transferability or assignability) of any kind (including any such Lien or
restriction imposed by (i) any agreement governing Indebtedness, and (ii) the
organizational documents of the Borrower or any of its Subsidiaries, but
excluding Permitted Encumbrances and, in the case of any Ground Lease (to the
extent permitted by the definition thereof), restrictions on transferability or
assignability in respect of such Ground Lease);
(b) is not subject to any agreement (including (i) any agreement
governing Indebtedness, and (ii) if applicable, the organizational documents of
the Borrower or any of its Subsidiaries) which prohibits or limits the ability
of the Borrower or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon such Hotel Property, other than Permitted
-31-
Encumbrances (excluding any agreement or organizational document which limits
generally the amount of Indebtedness which may be incurred by the Borrower or
its Subsidiaries); and
(c) is not subject to any agreement (including any agreement governing
Indebtedness) which entitles any Person to the benefit of any Lien (other than
Permitted Encumbrances) on such Hotel Property, or would entitle any Person to
the benefit of any such Lien upon the occurrence of any contingency (including,
without limitation, pursuant to an "equal and ratable" clause).
For the purposes of this Agreement, any Hotel Property owned by a Subsidiary of
the Borrower shall not be deemed to be Unencumbered unless both (i) such Hotel
Property and (ii) all Stock owned directly or indirectly by Borrower in such
Subsidiary is Unencumbered.
"Wholly-Owned Subsidiary" of a Person means any Subsidiary for which such
-----------------------
Person's ownership interest is 99% or more.
Section 1.02 Computation of Time Periods. In this Agreement in the
---------------------------
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
Section 1.03 Accounting Terms; Changes in GAAP.
---------------------------------
(a) All accounting terms not specifically defined in this Agreement shall
be construed in accordance with GAAP applied on a consistent basis with those
applied in the preparation of the Financial Statements.
(b) Unless otherwise indicated, all financial statements of the Borrower
and the Parent, all calculations for compliance with covenants in this
Agreement, and all calculations of any amounts to be calculated under the
definitions in Section 1.01 shall be based upon the Consolidated accounts of the
Borrower, the Parent and their respective Subsidiaries (as applicable) in
accordance with GAAP.
(c) If any changes in accounting principles after December 31, 1997
required by GAAP or the Financial Accounting Standards Board of the American
Institute of Certified Public Accountants or similar agencies results in a
change in the method of calculation of, or affects the
-32-
results of such calculation of, any of the financial covenants, standards or
terms found in this Agreement, then the parties shall enter into and diligently
pursue negotiations in order to amend such financial covenants, standards or
terms so as to equitably reflect such change, with the desired result that the
criteria for evaluating the financial condition of Borrower and its Subsidiaries
(determined on a Consolidated basis) shall be the same after such change as if
such change had not been made.
Section 1.04 Types of Advances. Advances are distinguished by "Type". The
-----------------
"Type" of an Advance refers to the determination whether such Advance is a LIBOR
Rate Advance or Prime Rate Advance, each of which constitutes a Type.
Section 1.05 Miscellaneous. Article, Section, Schedule and Exhibit
-------------
references are to Articles and Sections of and Schedules and Exhibits to this
Agreement, unless otherwise specified.
ARTICLE II
THE ADVANCES
Section 2.01 The Advances. Each Bank severally agrees, on the terms and
------------
conditions set forth in this Agreement, to make Advances to the Borrower from
time to time on any Business Day on or prior to September 30, 1998 in an
aggregate amount not to exceed at any time outstanding an amount equal to such
Bank's Commitment. The aggregate amount of all outstanding Advances at any time
may not exceed either the lesser of (i) the aggregate Commitments at such time
or (ii) the Total Availability at such time. After September 30, 1998 the
Borrower cannot request any additional Advances; provided that the Borrower can
request that Advances outstanding on September 30, 1998 be continued or
Converted as provided in this Agreement. The Borrower may from time to time
prepay Advances pursuant to Section 2.07. Any Advances that are repaid cannot be
------
reborrowed.
Section 2.02 Method of Borrowing.
-------------------
(a) Notice. Each Borrowing shall be made pursuant to a Notice of
------
Borrowing, given not later than 11:00 a.m. (Dallas, Texas time) (i) on the third
Business Day before the date of the proposed Borrowing, in the case of a
Borrowing consisting of LIBOR Rate Advances, or (ii) on the Business Day before
the date of the proposed Borrowing, in the case of a Borrowing consisting of
Prime Rate Advances, by the Borrower to the Administrative Agent, which shall
give each Bank
-33-
prompt notice on the day of receipt of such timely Notice of Borrowing of such
proposed Borrowing by telecopier. Each Notice of Borrowing shall be in writing
or by telecopier specifying the requested (i) date of such Borrowing, (ii) Type
of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing,
and (iv) if such Borrowing is to be comprised of LIBOR Rate Advances, the
Interest Period for each such Advance. In the case of a proposed Borrowing
comprised of LIBOR Rate Advances, the Administrative Agent shall promptly notify
each Bank of the applicable interest rate under Section 2.06(b). Each Bank
shall, before 11:00 a.m. (Dallas, Texas time) on the date of such Borrowing,
make available for the account of its Applicable Lending Office to the
Administrative Agent at its address referred to in Section 11.02, or such other
location as the Administrative Agent may specify by notice to the Banks, in same
day funds, such Bank's Pro Rata Share of such Borrowing. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower at its account with the Administrative
Agent.
(b) Conversions and Continuations. In order to elect to Convert or
-----------------------------
continue Advances comprising part of the same Borrowing under this Section, the
Borrower shall deliver an irrevocable Notice of Conversion or Continuation to
the Administrative Agent at the Administrative Agent's office no later than
11:00 a.m. (Dallas, Texas time) (i) on the date which is at least three Business
Days in advance of the proposed Conversion or continuation date in the case of a
Conversion to or a continuation of a Borrowing comprised of LIBOR Rate Advances
and (ii) on the Business Day prior to the proposed conversion date in the case
of a Conversion to a Borrowing comprised of Prime Rate Advances. Each such
Notice of Conversion or Continuation shall be in writing or by telecopier,
specifying (i) the requested Conversion or continuation date (which shall be a
Business Day), (ii) the Borrowing amount and Type of the Advances to be
Converted or continued, (iii) whether a Conversion or continuation is requested,
and if a Conversion, into what Type of Advances, and (iv) in the case of a
Conversion to, or a continuation of, LIBOR Rate Advances, the requested Interest
Period. Promptly after receipt of a Notice of Conversion or Continuation under
this paragraph, the Administrative Agent shall provide each Bank with a copy
thereof and, in the case of a Conversion to or a continuation of LIBOR Rate
Advances, notify each Bank of the applicable interest rate under Section
2.06(b). For purposes other than the conditions set forth in Section 3.02, the
portion of Advances comprising part of the same Borrowing that are Converted to
Advances of another Type shall constitute a new Borrowing. If the Borrower shall
fail to specify an Interest Period for a LIBOR Rate Advance including the
continuation of a LIBOR Rate Advance, the Borrower shall be deemed to have
selected a Prime Rate Advance.
-34-
(c) Certain Limitations. Notwithstanding anything in paragraphs (a) and
-------------------
(b) above:
(i) in the case of LIBOR Rate Advances each Borrowing shall be in an
aggregate amount of not less than $2,000,000 or greater multiples of
$100,000;
(ii) except for Borrowings for the acquisition of Future Properties
by the Borrower or its Subsidiary, the Borrower may not request Borrowings
on more than three days in any calendar month.
(iii) at no time shall there be more than five Interest Periods
applicable to outstanding LIBOR Rate Advances;
(iv) the Borrower may not select LIBOR Rate Advances for any
Borrowing to be made, Converted or continued if a Default has occurred and
is continuing;
(v) if any Bank shall, at any time prior to the making of any
requested Borrowing comprised of LIBOR Rate Advances, notify the
Administrative Agent that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or that any
central bank or other governmental authority asserts that it is unlawful,
for such Bank or its LIBOR Lending Office to perform its obligations under
this Agreement to make LIBOR Rate Advances or to fund or maintain LIBOR
Rate Advances, then such Bank's Pro Rata Share of such Borrowing shall be
made as a Prime Rate Advance, provided that such Prime Rate Advance shall
be considered part of the same Borrowing and interest on such Prime Rate
Advance shall be due and payable at the same time that interest on the
LIBOR Rate Advances comprising the remainder of such Borrowing shall be due
and payable; and such Bank agrees to use commercially reasonable efforts
(consistent with its internal policies and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the
making of such designation would avoid the effect of this paragraph and
would not, in the reasonable judgment of such Bank, be otherwise materially
disadvantageous to such Bank;
(vi) if the Administrative Agent is unable to determine the LIBOR
Rate for LIBOR Rate Advances comprising any requested Borrowing, the right
of the Borrower to select LIBOR Rate Advances for such Borrowing or for any
subsequent Borrowing shall be suspended until the Administrative Agent
shall notify the Borrower and the Banks that the
-35-
circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be a Prime Rate Advance;
(vii) if the Majority Banks shall, at least one Business Day before
the date of any requested Borrowing, notify the Administrative Agent that
the LIBOR Rate for LIBOR Rate Advances comprising such Borrowing will not
adequately reflect the cost to such Banks of making or funding their
respective LIBOR Rate Advances, as the case may be, for such Borrowing, the
right of the Borrower to select LIBOR Rate Advances for such Borrowing or
for any subsequent Borrowing shall be suspended until the Administrative
Agent shall notify the Borrower and the Banks that the circumstances
causing such suspension no longer exist, and each Advance comprising such
Borrowing shall be a Prime Rate Advance; and
(viii) if the Borrower shall fail to select the duration or
continuation of any Interest Period for any LIBOR Rate Advances in
accordance with the provisions contained in the definition of "Interest
Period" in Section 1.01 and paragraph (a) or (b) above, the Administrative
Agent will forthwith so notify the Borrower and the Banks and such Advances
will be made available to the Borrower on the date of such Borrowing as
Prime Rate Advances or, if an existing Advance, Converted into Prime Rate
Advances.
(d) Notices Irrevocable. Each Notice of Borrowing and Notice of Conversion
-------------------
or Continuation shall be irrevocable and binding on the Borrower. In the case
of any Borrowing which the related Notice of Borrowing specifies is to be
comprised of LIBOR Rate Advances, the Borrower shall indemnify each Bank against
any loss, out-of-pocket cost or expense incurred by such Bank as a result of any
condition precedent for Borrowing set forth in Article III not being satisfied
for any reason, including, without limitation, any loss, cost or expense
actually incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Bank to fund the Advance to be made by such Bank as
part of such Borrowing when such Advance, as a result of such failure, is not
made on such date.
(e) Administrative Agent Reliance. Unless the Administrative Agent shall
-----------------------------
have received notice from a Bank before the date of any Borrowing that such Bank
will not make available to the Administrative Agent such Bank's Pro Rata Share
of the Borrowing, the Administrative Agent may assume that such Bank has made
its Pro Rata Share of such Borrowing available to the Administrative Agent on
the date of such Borrowing in accordance with paragraph (a) of this Section 2.02
and the Administrative Agent may, in reliance upon such assumption, make
available to the
-36-
Borrower on such date a corresponding amount. If and to the extent that such
Bank shall not have so made its Pro Rata Share of such Borrowing available to
the Administrative Agent, such Bank and the Borrower severally agree to
immediately repay to the Administrative Agent on demand such corresponding
amount, together with interest on such amount, for each day from the date such
amount is made available to the Borrower until the date such amount is repaid to
the Administrative Agent, at (i) in the case of the Borrower, the interest rate
applicable on each such day to Advances comprising such Borrowing and (ii) in
the case of such Bank, the Federal Funds Rate for each such day. If such Bank
shall repay to the Administrative Agent such corresponding amount and interest
as provided above, such corresponding amount so repaid shall constitute such
Bank's Advance as part of such Borrowing for purposes of this Agreement even
though not made on the same day as the other Advances comprising such Borrowing.
(f) Bank Obligations Several. The failure of any Bank to make the Advance
------------------------
to be made by it as part of any Borrowing shall not relieve any other Bank of
its obligation, if any, to make its Advance on the date of such Borrowing. No
Bank shall be responsible for the failure of any other Bank to make the Advance
to be made by such other Bank on the date of any Borrowing.
(g) Notes. The indebtedness of the Borrower to each Bank resulting from
-----
Advances owing to such Bank shall be evidenced by the Note of the Borrower
payable to the order of such Bank in substantially the form of Exhibit A.
Section 2.03 Fees.
----
(a) Fee Letter. The Borrower agrees to pay to the Agents and the Managing
----------
Agents for their benefit the fees set forth in the Fee Letter as and when the
same are due and payable pursuant to the terms of the Fee Letter.
(b) Real Estate Acquisition Finance Fees. The Borrower agrees to pay to
------------------------------------
the Administrative Agent for the benefit of each Bank on the date of this
Agreement, a real estate acquisition finance fee equal to .50% of such Bank's
Commitment.
(c) New Advance Fees. The Borrower agrees to pay to the Administrative
----------------
Agent for the benefit of each Bank on the date of each Borrowing under this
Agreement except for the Conversion or continuation of existing Advances, an
advance fee equal to .50% of the amount of such Bank's Advance made under such
Borrowing.
-37-
(d) Outstanding Advance Fees. The Borrower agrees to pay to the
------------------------
Administrative Agent for the benefit of each Bank on the applicable date of
calculation, .1875% on such Bank's outstanding Advances on September 30, 1998;
.375% on such Bank's outstanding Advances on December 31, 1998; .50% on such
Bank's outstanding Advances on March 31, 1999, June 30, 1999, September 30, 1999
and December 31, 1999; and .75% on such Bank's outstanding Advances on the last
day of each quarter thereafter.
Section 2.04 Reduction of the Commitments.
----------------------------
(a) Upon the occurrence of any of the following:
(i) a change in control is reported by the Borrower, the Parent, AGH
Leasing or any other Participating Lessee which is an Affiliate of the
Borrower, or ▇▇▇▇ in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934 (the "Exchange
Act"), or
(ii) any "person" (as such term is used in Section 13(d) and Section
14(d)(2) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Borrower, the Parent, AGH Leasing or any other
Participating Lessee which is an Affiliate of the Borrower, or ▇▇▇▇
representing the Control Percentage or more of the combined voting power of
the Borrower's, the Parent's, such Participating Lessee's or AGHI's, as
applicable, then outstanding securities;
then, in such event the Majority Banks may, at their sole option upon written
notice to the Borrower (a "Termination Notice"), declare the obligation of each
Bank to make Advances to be terminated, whereupon the same shall forthwith
terminate and the Commitments shall reduce to zero.
Notwithstanding the foregoing, a "change of control" shall not be deemed to
occur as a result of the acquisition of securities of the Borrower, the Parent,
AGH Leasing or any other Participating Lessee which is an Affiliate of the
Borrower or ▇▇▇▇ by any of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or their respective
Associates (as such term is defined in Rule 12b-2 promulgated under the Exchange
Act) or controlled Affiliates.
-38-
Section 2.05 Repayment of Advances. The Borrower shall repay the
---------------------
outstanding principal amount of each Advance on the Maturity Date.
Section 2.06 Interest, Late Payment Fee. The Borrower shall pay interest
--------------------------
on the unpaid principal amount of each Advance made by each Bank from the date
of such Advance until such principal amount shall be paid in full, at the
following rates per annum:
(a) Prime Rate Advances. If such Advance is a Prime Rate Advance, a rate
-------------------
per annum (computed on the actual number of days elapsed, including the first
day and excluding the last, based on a 365 day year) equal at all times to the
lesser of (i) the Adjusted Prime Rate in effect from time to time plus the
----
Applicable Margin and (ii) the Maximum Rate, payable in arrears on the last
Business Day of each calendar month and on the date such Prime Rate Advance
shall be paid in full, provided that during the continuance of an Event of
--------
Default, Prime Rate Advances shall bear interest at a rate per annum equal at
all times to the lesser of (i) the rate required to be paid on such Advance
immediately prior to the date on which such amount becomes due plus three
----
percent (3%) and (ii) the Maximum Rate.
(b) LIBOR Rate Advances. If such Advance is a LIBOR Rate Advance, a rate
-------------------
per annum (computed on the actual number of days elapsed, including the first
day and excluding the last, based on a 360 day year) equal at all times during
the Interest Period for such Advance to the lesser of (i) the LIBOR Rate for
such Interest Period plus the Applicable Margin and (ii) the Maximum Rate,
----
payable in arrears on the last day of such Interest Period, and on the date such
LIBOR Rate Advance shall be paid in full, and, with respect to LIBOR Rate
Advances having an Interest Period in excess of 30 days, the last day of each
calendar month during such Interest Period excluding the month in which such
LIBOR Rate Advance shall be paid in full; provided that during the continuance
--------
of an Event of Default, LIBOR Rate Advances shall bear interest at a rate per
annum equal at all times to the lesser of (i) the rate required to be paid on
such Advance immediately prior to the date on which such amount became due plus
----
three percent (3%) and (ii) the Maximum Rate.
(c) Usury Recapture. In the event the rate of interest chargeable under
---------------
this Agreement or the Notes at any time is greater than the Maximum Rate, the
unpaid principal amount of the Notes shall bear interest at the Maximum Rate
until the total amount of interest paid or accrued on the Notes equals the
amount of interest which would have been paid or accrued on the Notes if the
stated rates of interest set forth in this Agreement had at all times been in
effect. In the event, upon payment in full of the Notes, the total amount of
interest paid or accrued under the terms of this
-39-
Agreement and the Notes is less than the total amount of interest which would
have been paid or accrued if the rates of interest set forth in this Agreement
had, at all times, been in effect, then the Borrower shall, to the extent
permitted by applicable law, pay the Administrative Agent for the account of the
Banks an amount equal to the difference between (i) the lesser of (A) the amount
of interest which would have been charged on the Notes if the Maximum Rate had,
at all times, been in effect and (B) the amount of interest which would have
accrued on the Notes if the rates of interest set forth in this Agreement had at
all times been in effect and (ii) the amount of interest actually paid or
accrued under this Agreement on the Notes. In the event the Banks ever receive,
collect or apply as interest any sum in excess of the Maximum Rate, such excess
amount shall, to the extent permitted by law, be applied to the reduction of the
principal balance of the Notes, and if no such principal is then outstanding,
such excess or part thereof remaining shall be paid to the Borrower.
(d) Other Amounts Overdue. If any amount payable under this Agreement
---------------------
other than the Advances is not paid when due and payable, including without
limitation, accrued interest and fees, then such overdue amount shall accrue
interest hereon due and payable on demand at a rate per annum equal to the
Adjusted Prime Rate plus three percent (3%), from the date such amount became
----
due until the date such amount is paid in full.
(e) Late Payment Fee. Subject to the provisions of Section 11.12, if any
----------------
interest payable under this Agreement is not paid when due and payable (after
taking into account any applicable grace period), then the Borrower will pay to
the Banks contemporaneously with the payment of such past due interest a late
payment fee equal to an amount equal to the product of (i) such overdue interest
times (ii) four percent (4%).
-----
Section 2.07 Prepayments.
-----------
(a) Right to Prepay. The Borrower shall have no right to prepay any
---------------
principal amount of any Advance except as provided in this Section 2.07.
(b) Optional Prepayments. The Borrower may elect to prepay any of the
--------------------
Advances, after giving by 11:00 a.m. (Dallas, Texas time) (i) in the case of
LIBOR Rate Advances, at least three Business Days' or (ii) in case of Prime Rate
Advances, at least one Business Day's prior written notice to the Administrative
Agent stating the proposed date and aggregate principal amount of such
prepayment, and if applicable, the relevant Interest Period for the Advances to
be prepaid. If any such notice is given, the Borrower shall prepay Advances
comprising part of the same Borrowing
-40-
in whole or ratably in part in an aggregate principal amount equal to the amount
specified in such notice, and shall also pay accrued interest to the date of
such prepayment on the principal amount prepaid and amounts, if any, required to
be paid pursuant to Section 2.08 as a result of such prepayment being made on
such date; provided, however, that each partial prepayment shall be in an
-------- -------
aggregate principal amount not less than $1,000,000 and in integral multiples of
$100,000.
(c) Mandatory Prepayments.
---------------------
(i) Change of Control. On the fifth Business Day following the
-----------------
Borrower's receipt of a Termination Notice pursuant to Section 2.04(a)
hereof, the Borrower shall be required to prepay all outstanding Advances
in full.
(ii) Total Availability Deficiency. (A) On or prior to the fifth
-----------------------------
(5th) Business Day following a Total Availability Determination Date
occurring under the provisions of Sections 2.14(b) or (c) and (B) on or
prior to the thirtieth (30th) Business Day following a Total Availability
Determination Date occurring under the provisions of Sections 2.14(a), the
Borrower shall be required to prepay Advances or prepay Senior Obligations
in an aggregate amount equal to the excess of (Y) the aggregate amount of
outstanding Advances on such date over (Z) the lesser of (1) the Total
Availability, as determined on such Total Availability Determination Date
or (2) the aggregate Commitments at such time.
(iii) Capitalization Event. If any Capitalization Event shall occur
--------------------
and any Net Cash Proceeds of such Capitalization Event are not used to make
an Investment permitted pursuant to the provisions of Section 6.07, then at
the Borrower's election the Borrower shall prepay either (A) Advances (if
no Blockage Period is in effect) or (B) the Senior Obligations on the
Business Day such Net Cash Proceeds are received by the Borrower or the
Parent, as applicable, in an amount equal to the lesser of (A) the amount
of the outstanding Advances and Senior Obligations on such Business Day and
(B) 100% of the Net Cash Proceeds of such Capitalization Event not used to
make an Investment permitted pursuant to the provisions of Section 6.07.
(iv) Accrued Interest. Each prepayment pursuant to this Section
----------------
2.07(c) shall be accompanied by accrued interest on the amount prepaid to
the date of such prepayment and amounts, if any, required to be paid
pursuant to Section 2.08 as a result of such prepayment being made on such
date.
-41-
(v) Avoidance of Breakage Costs. In the event that the amount of
---------------------------
any mandatory prepayment of Advances under this Section 2.07(c) exceeds the
aggregate principal amount of Advances which consist of Prime Rate Advances
(the amount of such excess being the "Excess Amount"), the Borrower shall
-------------
have the right, in lieu of making such prepayment in full, to prepay such
outstanding Advances which are Prime Rate Advances and to deposit an amount
equal to the Excess Amount with the Administrative Agent in the Cash
Collateral Account maintained by and in the sole dominion and control of
the Administrative Agent for the ratable benefit of the Banks. Any amount
so deposited shall be held by the Administrative Agent as collateral for
the Obligations, earn interest on behalf of the Borrower and be applied to
the prepayment of Advances which are LIBOR Rate Advances at the end of the
current Interest Period(s) applicable thereto. On any day on which amounts
collected in the Cash Collateral Account remain on deposit in or to the
credit of the Cash Collateral Account after giving effect to the payment
made on such day pursuant to this Section 2.07(c), and the Borrower shall
have delivered to the Administrative Agent a written request or a
telephonic request (which shall be promptly confirmed in writing) prior to
11:00 am (Dallas, Texas time) that such remaining collected amounts be
invested in cash equivalents specified in such request, the Administrative
Agent shall invest such funds, to the extent the Administrative Agent is
reasonably able to do so, in such cash equivalents as are acceptable to,
and with no risk to, the Administrative Agent on an overnight basis or with
maturities such that amounts will be available to pay the Obligations
secured thereby as they become due, whether at maturity, by acceleration or
otherwise; provided, however, that any loss resulting from such investments
-------- -------
shall be charged to and be immediately payable by the Borrower on demand by
the Administrative Agent.
(d) Ratable Payments. Each payment of any Advance pursuant to this
----------------
Section 2.07 or any other provision of this Agreement shall be made in a manner
such that all Advances comprising part of the same Borrowing are paid in whole
or ratably in part.
(e) Effect of Notice. All notices given pursuant to this Section 2.07
----------------
shall be irrevocable and binding upon the Borrower.
Section 2.08 Breakage Costs. If (a) any payment of principal of any
--------------
LIBOR Rate Advance is made other than on the last day of the Interest Period for
such Advance as a result of any payment pursuant to Section 2.07 or the
acceleration of the maturity of the Notes pursuant to Article VIII or otherwise;
(b) any Conversion of a LIBOR Rate Advance is made other than on the last day of
the
-42-
Interest Period for such Advance pursuant to Section 2.12 or otherwise; or (c)
the Borrower fails to make a principal or interest payment with respect to any
LIBOR Rate Advance on the date such payment is due and payable, the Borrower
shall, within 10 days of any written demand sent by any Bank to the Borrower
through the Administrative Agent, pay to the Administrative Agent for the
account of such Bank any amounts (without duplication of any other amounts
payable in respect of breakage costs) required to compensate such Bank for any
additional losses, out-of-pocket costs or expenses which it may reasonably incur
as a result of such payment or nonpayment, including, without limitation, any
loss, cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Bank to fund or maintain such Advance.
Section 2.09 Increased Costs.
---------------
(a) LIBOR Rate Advances. If, due to either (i) the introduction of or any
-------------------
change (other than any change by way of imposition or increase of reserve
requirements included in the calculation of the LIBOR Rate) in or in the
interpretation of any law or regulation following the date of this Agreement or
(ii) the compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) not complied
with prior to the date of this Agreement, there shall be any increase in the
cost to any Bank of agreeing to make or making, funding or maintaining LIBOR
Rate Advances, then the Borrower shall from time to time, upon demand by such
Bank (with a copy of such demand to the Administrative Agent), immediately pay
to the Administrative Agent for the account of such Bank additional amounts
(without duplication of any other amounts payable in respect of increased costs)
sufficient to compensate such Bank for such increased cost; provided, however,
-------- -------
that, before making any such demand, each Bank agrees to use commercially
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost and would not, in the reasonable judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate as to the amount of such
increased cost and detailing the calculation of such cost submitted to the
Borrower and the Administrative Agent by such Bank at the time such Bank demands
payment under this Section shall be conclusive and binding for all purposes,
absent manifest error.
(b) Capital Adequacy. If any Bank determines in good faith that
----------------
compliance with any law or regulation or any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law) implemented or effective after the date of this Agreement affects or would
affect the amount of capital required or expected to be maintained by such Bank
and
-43-
that the amount of such capital is increased by or based upon the existence of
such Bank's commitment to lend and other commitments of this type, then, upon 30
days prior written notice by such Bank(with a copy of any such demand to the
Administrative Agent), the Borrower shall immediately pay to the Administrative
Agent for the account of such Bank from time to time as specified by such Bank,
additional amounts (without duplication of any other amounts payable in respect
of increased costs) sufficient to compensate such Bank, in light of such
circumstances, to the extent that such Bank reasonably determines such increase
in capital to be allocable to the existence of such Bank's commitment to lend
under this Agreement. A certificate as to such amounts and detailing the
calculation of such amounts submitted to the Borrower and the Administrative
Agent by such Bank shall be conclusive and binding for all purposes, absent
manifest error.
Section 2.10 Payments and Computations.
-------------------------
(a) Payment Procedures. Except if otherwise set forth herein, the
------------------
Borrower shall make each payment under this Agreement and under the Notes not
later than 11:00 a.m. (Dallas, Texas time) on the day when due in Dollars to the
Administrative Agent at the location referred to in the Notes (or such other
location as the Administrative Agent shall designate in writing to the Borrower)
in same day funds. The Administrative Agent will on the same day cause to be
distributed like funds relating to the payment of principal, interest or fees
ratably (other than amounts payable solely to the Administrative Agent, or a
specific Bank pursuant to Section 2.03(b), 2.03(c), 2.06(c), 2.08, 2.09, 2.11,
2.12, or 2.13(c) but after taking into account payments effected pursuant to
Section 11.04) to the Banks in accordance with each Bank's Pro Rata Share for
the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Bank for the account
of its Applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement.
(b) Computations. All computations of interest based on the Adjusted
------------
Prime Rate shall be made by the Administrative Agent on the basis of a year of
365 days and all computations of fees and interest based on the LIBOR Rate and
the Federal Funds Rate shall be made by the Administrative Agent on the basis of
a year of 360 days, in each case for the actual number of days (including the
first day, but excluding the last day) occurring in the period for which such
interest or fees are payable. Each determination by the Administrative Agent of
an interest rate shall be conclusive and binding for all purposes, absent
manifest error.
-44-
(c) Non-Business Day Payments. Whenever any payment shall be stated to be
-------------------------
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided, however, that if such extension would cause payment of interest on or
--------
principal of LIBOR Rate Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.
(d) Administrative Agent Reliance. Unless the Administrative Agent shall
-----------------------------
have received written notice from the Borrower prior to the date on which any
payment is due to the Banks that the Borrower will not make such payment in
full, the Administrative Agent may assume that the Borrower has made such
payment in full to the Administrative Agent on such date and the Administrative
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such date an amount equal to the amount then due such Bank. If and to
the extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each Bank shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Bank, together with
interest, for each day from the date such amount is distributed to such Bank
until the date such Bank repays such amount to the Administrative Agent, at the
Federal Funds Rate for each such day.
(e) Application of Payments. Unless otherwise specified in Section 2.07
-----------------------
hereof, whenever any payment received by the Administrative Agent under this
Agreement is insufficient to pay in full all amounts then due and payable under
this Agreement and the Notes, such payment shall be distributed and applied by
the Administrative Agent and the Banks in the following order: first, to the
-----
payment of fees and expenses due and payable to the Administrative Agent under
and in connection with this Agreement or any other Credit Document; second, to
------
the payment of all expenses due and payable under Section 2.11(c), ratably among
the Banks in accordance with the aggregate amount of such payments owed to each
such Bank; third, to the payment of all other fees due and payable under Section
-----
2.03; and fourth, to the payment of the interest accrued on and the principal
------
amount of all of the Notes, regardless of whether any such amount is then due
and payable, ratably among the Banks in accordance with the aggregate accrued
interest plus the aggregate principal amount owed to such Bank.
(f) Register. The Administrative Agent shall record in the Register the
--------
Commitment and the Advances from time to time of each Bank and each repayment or
prepayment in respect to the principal amount of such Advances of each Bank.
Any such recordation shall be conclusive and binding on the Borrower and each
Bank, absent manifest error; provided however, that failure to
-------- -------
-45-
make any such recordation, or any error in such recordation, shall not affect
the Borrower's obligations hereunder in respect of such Advances.
Section 2.11 Taxes.
-----
(a) No Deduction for Certain Taxes. Any and all payments by the Borrower
------------------------------
shall be made, in accordance with Section 2.10, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Bank and the Administrative Agent, taxes imposed on its income,
and franchise taxes imposed on it, by the jurisdiction under the laws of which
such Bank or the Administrative Agent (as the case may be) is organized or any
political subdivision of the jurisdiction (all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes") and, in the case of each Bank, Taxes by the jurisdiction
of such Bank's Applicable Lending Office or any political subdivision of such
jurisdiction. If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable to any Bank or the Administrative Agent, (i)
the sum payable shall be increased as may be necessary so that, after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.11), such Bank or the Administrative Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made; provided, however, that if the Borrower's obligation to
--------
deduct or withhold Taxes is caused solely by such Bank's or the Administrative
Agent's failure to provide the forms described in paragraph (e) of this Section
2.11 and such Bank or the Administrative Agent could have provided such forms,
no such increase shall be required; (ii) the Borrower shall make such
deductions; and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
Legal Requirements.
(b) Other Taxes. In addition, the Borrower agrees to pay any present or
-----------
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Notes, or the other Credit Documents (hereinafter referred to as "Other Taxes").
(c) Indemnification. The Borrower indemnifies each Bank and the
---------------
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any Governmental
Authority on amounts payable under this Section 2.11) paid by such Bank or the
Administrative Agent (as the case may be) and any liability (including interest
and
-46-
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Each payment required to be
made by the Borrower in respect of this indemnification shall be made to the
Administrative Agent for the benefit of any party claiming such indemnification
within 30 days from the date the Borrower receives written demand detailing the
calculation of such amounts therefor from the Administrative Agent on behalf of
itself as Administrative Agent, or any such Bank. If any Bank or the
Administrative Agent receives a refund in respect of any Taxes or Other Taxes
paid by the Borrower under this paragraph (c), such Bank or the Administrative
Agent, as the case may be, shall promptly pay to the Borrower the Borrower's
share of such refund.
(d) Evidence of Tax Payments. The Borrower will pay prior to delinquency
------------------------
all Taxes and Other Taxes payable in respect of any payment. Within 30 days
after the date of any payment of Taxes, the Borrower will furnish to the
Administrative Agent, at its address referred to in Section 11.02, the original
or a certified copy of a receipt evidencing payment of such Taxes or Other
Taxes.
(e) Foreign Bank Withholding Exemption. Each Bank that is not
----------------------------------
incorporated under the laws of the United States of America or a state thereof
agrees that it will deliver to the Borrower and the Administrative Agent on the
date of this Agreement or upon the effectiveness of any Assignment and
Acceptance (i) two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224 or successor applicable form, as the case may be,
certifying in each case that such Bank is entitled to receive payments under
this Agreement and the Notes payable to it, without deduction or withholding of
any United States federal income taxes, (ii) if applicable, an Internal Revenue
Service Form W-8 or W-9 or successor applicable form, as the case may be, to
establish an exemption from United States backup withholding tax, and (iii) any
other governmental forms which are necessary or required under an applicable tax
treaty or otherwise by law to reduce or eliminate any withholding tax, which
have been reasonably requested by the Borrower. Each Bank which delivers to the
Borrower and the Administrative Agent a Form 1001 or 4224 and Form W-8 or W-9
pursuant to the next preceding sentence further undertakes to deliver to the
Borrower and the Administrative Agent two further copies of Form 1001 or 4224
and Form W-8 or W-9, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower and
the Administrative Agent, and such extensions or renewals thereof as may
reasonably be requested by the Borrower and the Administrative Agent certifying
in the case of a Form 1001 or 4224 that such Bank is entitled to
-47-
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes. If an event (including without limitation
any change in treaty, law or regulation) has occurred prior to the date on which
any delivery required by the preceding sentence would otherwise be required
which renders all such forms inapplicable or which would prevent any Bank from
duly completing and delivering any such letter or form with respect to it and
such Bank advises the Borrower and the Administrative Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax, and in the case of a Form W-8 or W-9, establishing an
exemption from United States backup withholding tax, such Bank shall not be
required to deliver such forms. The Borrower shall withhold tax at the rate and
in the manner required by the laws of the United States with respect to payments
made to a Bank failing to timely provide the requisite Internal Revenue Service
forms.
Section 2.12 Illegality. If any Bank shall notify the Administrative
----------
Agent and the Borrower that the introduction of or any change in or in the
interpretation of any Legal Requirement makes it unlawful, or that any central
bank or other Governmental Authority asserts that it is unlawful for such Bank
or its LIBOR Lending Office to perform its obligations under this Agreement to
maintain any LIBOR Rate Advances of such Bank then outstanding hereunder, then,
notwithstanding anything herein to the contrary, the Borrower shall, if demanded
by such Bank by notice to the Borrower and the Administrative Agent no later
than 11:00 a.m. (Dallas, Texas time), (a) if not prohibited by Legal Requirement
to maintain such LIBOR Rate Advances for the duration of the Interest Period, on
the last day of the Interest Period for each outstanding LIBOR Rate Advance of
such Bank or (b) if prohibited by Legal Requirement to maintain such LIBOR Rate
Advances for the duration of the Interest Period, on the second Business Day
following its receipt of such notice from such Bank, Convert all LIBOR Rate
Advances of such Bank then outstanding to Prime Rate Advances, and pay accrued
interest on the principal amount Converted to the date of such Conversion and
amounts, if any, required to be paid pursuant to Section 2.08 as a result of
such Conversion being made on such date. Each Bank agrees to use commercially
reasonable efforts (consistent with its internal policies and legal and
regulatory restrictions) to designate a different Applicable Lending Office if
the making of such designation would avoid the effect of this paragraph and
would not, in the reasonable judgment of such Bank, be otherwise disadvantageous
to such Bank.
Section 2.13 [Intentionally Left Blank]
--------------------------
Section 2.14 Determination of Total Availability. The Total Availability
-----------------------------------
shall be determined by the Administrative Agent, as follows:
-48-
(a) Quarterly. On the 50th day following each calendar quarter the
---------
Administrative Agent shall determine the Total Availability upon receipt of a
Compliance Certificate setting forth the Parent's and the Parent's Subsidiaries'
Consolidated Adjusted EBITDA for the Rolling Period just ended.
(b) Property Adjustments. Following each acquisition of a Hotel Property
--------------------
or Asset Disposition (an "Adjustment Event"), and the Administrative Agent's
----------------
receipt of a Property Adjustment Report with respect thereto, the Administrative
Agent shall adjust the Total Availability accordingly.
(c) Reduction of Commitments. Following each reduction of the Commitments
------------------------
pursuant to the provisions of Section 2.04.
(d) Notice of Total Availability Change. Promptly following any date the
-----------------------------------
Total Availability is redetermined in accordance with the preceding paragraphs,
the Administrative Agent shall give notice to the Banks and the Borrower of the
new Total Availability.
Section 2.15 Bank Replacement.
----------------
(a) Right to Replace. The Borrower shall have the right to replace each
----------------
Bank affected by a condition under Section 2.02(c)(v), 2.09, 2.11, or 2.12 for
more than 90 days (each such affected Bank, an "Affected Bank") in accordance
with the procedures in this Section 2.15 and provided that no reduction of the
total Commitments occurs as a result thereof.
(b) First Right of Refusal; Replacement.
-----------------------------------
(i) Upon the occurrence of any condition permitting the replacement
of a Bank, each Bank which is not an Affected Bank shall have the right,
but not the obligation, to elect to increase its respective Commitment by
an amount not to exceed the amount of the Commitments of the Affected
Banks, which election shall be made by written notice from each such Bank
to the Administrative Agent and the Borrower given within 30 days after the
date such condition occurs specifying the amount of such proposed increase
in such Bank's Commitment.
-49-
(ii) If the aggregate amount of the proposed increases in
Commitments of all such Banks making such an election is in excess of the
Commitments of the Affected Banks, (A) the Commitments of the Affected
Banks shall be allocated pro rata among such Banks based on the respective
amounts of the proposed increases to Commitments elected by each of such
Banks, and (B) the respective Commitments of such Banks shall be increased
by the respective amounts as so allocated so that after giving effect to
such termination and increases the aggregate amount of the Commitments of
the Banks will be the same as prior to such termination.
(iii) If the aggregate amount of the proposed increases to
Commitments of all Banks making such an election equals the Commitments of
the Affected Banks, the respective Commitments of such Banks shall be
increased by the respective amounts of their proposed increases, so that
after giving effect to such termination and increase the aggregate amount
of the Commitments of all of the Banks will be the same as prior to such
termination.
(iv) If the aggregate amount of the proposed increases to
Commitments of all Banks making such an election is less than the
Commitments of the Affected Banks, (A) the respective Commitments of such
Banks shall be increased by the respective amounts of their proposed
increases, and (B) the Borrower shall have the right to add additional
Banks which are Eligible Assignees to this Agreement to replace such
Affected Banks, which additional Banks would have aggregate Commitments no
greater than those of the Affected Banks minus the amounts thereof assumed
-----
by the other Banks pursuant to such increases.
(c) Procedure. Any assumptions of Commitments pursuant to this Section
---------
2.15 shall be (i) made by the purchasing Bank or Eligible Assignee and the
selling Bank entering into an Assignment and Assumption and by following the
procedures in Section 11.06 for adding a Bank. In connection with the increase
of the Commitments of any Bank pursuant to the foregoing paragraph (b), each
Bank with an increased Commitment shall purchase from the Affected Banks at par
such Bank's ratable share of the outstanding Advances of the Affected Banks.
Section 2.16 Sharing of Payments, Etc. If any Bank shall obtain any
------------------------
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) on account of its Advances in excess of its Pro Rata Share
of payments on account of the Advances obtained by all the Banks, such Bank
shall notify the Administrative Agent and forthwith purchase from the other
Banks such participations in the Advances made by them as shall be necessary to
cause such
-50-
purchasing Bank to share the excess payment ratably in accordance with the
requirements of this Agreement with each of them; provided, however, that if all
--------
or any portion of such excess payment is thereafter recovered from such
purchasing Bank, such purchase from each Bank shall be rescinded and such Bank
shall repay to the purchasing Bank the purchase price to the extent of such
Bank's ratable share (according to the proportion of (a) the amount of the
participation sold by such Bank to the purchasing Bank as a result of such
excess payment to (b) the total amount of such excess payment) of such recovery,
together with an amount equal to such Bank's ratable share (according to the
proportion of (a) the amount of such Bank's required repayment to the purchasing
Bank to (b) the total amount of all such required repayments to the purchasing
Bank) of any interest or other amount paid or payable by the purchasing Bank in
respect of the total amount so recovered. The Borrower agrees that any Bank so
purchasing a participation from another Bank pursuant to this Section 2.16 may,
to the fullest extent permitted by Legal Requirement, unless and until rescinded
as provided above, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Bank were the
direct creditor of the Borrower in the amount of such participation.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01 Conditions Precedent to initial Advance. The obligation of
---------------------------------------
each Bank to make its initial Advance as part of the initial Borrowing are
subject to the following conditions precedent being satisfied on or prior to
February 28, 1998:
(a) Documentation. The Documentation Agent or the Administrative Agent
-------------
shall have received counterparts of this Agreement executed by the Borrower and
the Banks, and the following duly executed by all the parties thereto, in form
and substance satisfactory to the Agents, and, with respect to this Agreement,
all Subordinate Guaranties and the Environmental Indemnity, in sufficient
copies for each Bank:
(i) the Notes, all Subordinate Guaranties, and the Environmental
Indemnity;
(ii) a certificate from the Chief Executive Officer, President or
Chief Financial Officer of the General Partner on behalf of the Borrower
dated as of the Effective Date stating that as of the Effective Date (A)
all representations and warranties of the Borrower
-51-
set forth in this Agreement and the Credit Documents are true and correct
in all material respects; (B) no Default has occurred and is continuing;
(C) the conditions in this Section 3.01 have been met or waived in writing;
and (D) to the best of the Borrower's knowledge there are no claims,
defenses, counterclaims or offsets against the Banks under the Credit
Documents;
(iii) a certificate of the Secretary or an Assistant Secretary of the
General Partner on behalf of the Borrower and each Guarantor dated as of
the date of this Agreement certifying as of the date of this Agreement (A)
the names and true signatures of officers or authorized representatives of
the general partner of the Borrower and such Guarantor authorized to sign
the Credit Documents to which such Person is a party as general partner of
such Person, (B) resolutions of the Board of Directors or the members of
the general partner of such Person with respect to the transactions herein
contemplated, (C) either (x) the copies of the organizational documents of
the general partner of such Person delivered to the Banks are still true
and correct and have not been amended or modified since such date or (y)
copies of any modification or amendment to the organizational documents of
the general partner of such Person made since such date, (D) a true and
correct copy of the partnership agreement for such Person, (E) a true and
correct copy of all partnership authorizations necessary or desirable in
connection with the transactions herein contemplated and (F) a true and
correct copy of all Senior Credit Documents;
(iv) a certificate of the Secretary or an Assistant Secretary of the
Parent dated as of the date of this Agreement certifying as of the date of
this Agreement (A) resolutions of the Board of Directors of such Person
with respect to the transactions herein contemplated, (B) the copies of the
charter and bylaws of the Parent and any modification or amendment to the
articles or certificate of incorporation or bylaws of the Parent made since
such date and (C) the calculation of the Parent's and the Parent's
Subsidiaries Consolidated Adjusted EBITDA for the Rolling Period preceding
such date and Total Availability as of such date in such detail as the
Agents shall reasonably request;
(v) (A) one or more favorable written opinions of Battle ▇▇▇▇▇▇
L.L.P., special counsel for the Borrower, the Parent, and their
Subsidiaries, substantially in the form of the attached Exhibit I, in each
case dated as of the Closing Date and with such changes as the Agents may
approve, (B) one or more favorable written opinions of Kane, Russell,
▇▇▇▇▇▇▇ & ▇▇▇▇▇, special Texas counsel for the Borrower, the Parent, and
the Manager and their
-52-
Subsidiaries, in a form reasonably acceptable to the Agents, in each case
dated as of the Closing Date and with such changes as the Agents may
approve, and (C) such other legal opinions as either of the Agents shall
reasonably request, in each case dated as of the Closing Date and with such
changes as the Agents may approve; and
(vi) such other documents, governmental certificates, agreements,
lien searches as either Agent may reasonably request.
(b) Representations and Warranties. The representations and warranties
------------------------------
contained in Article IV hereof, the Subordinate Guaranties, and the
Environmental Indemnities shall be true and correct in all material respects.
(c) Certain Payments. The Borrower shall have paid the fees required to be
----------------
paid as of the execution of this Credit Agreement pursuant to the Fee Letter.
(d) Senior Credit Agreement. The Senior Credit Documents shall have been
-----------------------
fully-executed.
Section 3.02 Conditions Precedent for each Borrowing. The obligation of
---------------------------------------
each Bank to fund an Advance on the occasion of each Borrowing (other than the
Conversion or continuation of any existing Borrowing) shall be subject to the
further conditions precedent that on the date of such Borrowing:
(a) the following statements shall be true (and each of the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of such Borrowing shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing):
(i) the representations and warranties contained in Article IV
hereof, the Subordinate Guaranties, and the Environmental Indemnities and
are correct in all material respects on and as of the date of such
Borrowing, before and after giving effect to such Borrowing and to the
application of the proceeds from such Borrowing, as though made on and as
of such date; and
(ii) no Default has occurred and is continuing or would result from
such Borrowing or from the application of the proceeds therefrom;
-53-
(b) the Borrower shall have executed and delivered to the Administrative
Agent a certificate dated not earlier than the date 10 days prior to the
anticipated date of such Borrowing setting forth the calculation of the Parent's
and the Parent's Subsidiaries Consolidated Adjusted EBITDA for the Rolling
Period preceding such date and Total Availability as of such date in such detail
as the Agents shall reasonably request; and
(c) the Administrative Agent shall have received such other approvals,
opinions or documents deemed necessary or desirable by any Bank, the
Documentation Agent or the Administrative Agent as such party may reasonably
request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
Section 4.01 Existence; Qualification; Partners; Subsidiaries.
------------------------------------------------
(a) The Borrower is a limited partnership duly organized, validly
existing, and in good standing under the laws of Delaware and in good standing
and qualified to do business in each jurisdiction where its ownership or lease
of property or conduct of its business requires such qualification, except where
the failure to so qualify would not have a material adverse effect on the
Borrower.
(b) The Parent is a corporation duly organized, validly existing, and in
good standing under the laws of Maryland and in good standing and qualified to
do business in each jurisdiction where its ownership or lease of property or
conduct of its business requires such qualification, except where the failure to
so qualify would not have a material adverse effect on the Parent. The Parent
owns 100% of the issued and outstanding shares of the General Partner and AGH
LP. The Parent has no first tier Subsidiaries (other than the General Partner
and AGH LP).
(c) The General Partner is the Borrower's sole general partner with full
power and authority to bind the Borrower. The General Partner is a corporation
duly organized, validly existing, and in good standing under the laws of Nevada
and in good standing and qualified to do business in each jurisdiction where its
ownership or lease of property or conduct of its business
-54-
requires such qualification, except where the failure to so qualify would not
have a material adverse effect on the General Partner.
(d) AGH LP is a limited partnership duly organized, validly existing, and
in good standing under the laws of Nevada and in good standing and qualified to
do business in each jurisdiction where its ownership or lease of property or
conduct of its business requires such qualification, except where the failure to
so qualify would not have a material adverse effect on AGH LP.
(e) As of the date of this Agreement, the General Partner owns a 1%
general partner interest in and AGH LP owns an approximately 83.83% limited
partnership interest in the Borrower.
(f) Each Subsidiary of the Borrower is a limited partnership, general
partnership or limited liability company duly organized, validly existing, and
in good standing under the laws of its jurisdiction of formation and in good
standing and qualified to do business in each jurisdiction where its ownership
or lease of property or conduct of its business requires such qualification,
except where the failure to so qualify would not have a material adverse effect
on such Subsidiary. The Borrower has no Subsidiaries on the date of this
Agreement other than the Subsidiaries listed on the attached Schedule 4.01, and
Schedule 4.01 lists the jurisdiction of formation and the address of the
principal office of each such Subsidiary existing on the date of this Agreement.
As of the date of this Agreement, the Borrower owns, directly or indirectly, at
least 99% of the interests in each such Subsidiary.
(g) To the knowledge of the Borrower, each Participating Lessee is a
limited partnership duly organized, validly existing, and in good standing under
the laws of the state of its creation and in good standing and qualified to do
business in each jurisdiction where its ownership or lease of property or
conduct of its business requires such qualification, except where the failure to
so qualify would not have a material adverse effect on the Participating Lessee.
To the knowledge of the Borrower, the sole general partner of AGH Leasing is
AGHL GP, Inc. As of the date of this Agreement, to the knowledge of Borrower,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇ legally and beneficially own, directly
or indirectly, approximately 77% of the partnership interests in AGH Leasing.
As of the date of this Agreement, to the knowledge of Borrower, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ legally and beneficially own approximately
23% of the partnership interests in AGH Leasing. To the knowledge of the
Borrower, the sole general partner of TT Leasing is AGH Leasing. As of the date
of this Agreement, to the knowledge of Borrower, AGH
-55-
Leasing legally and beneficially owns, directly or indirectly, approximately 51%
of the partnership interests in TT Leasing.
(h) To the knowledge of Borrower, ▇▇▇▇ is a corporation duly organized,
validly existing, and in good standing under the laws of Texas and in good
standing and qualified to do business in each jurisdiction where its ownership
or lease of property or conduct of its business requires such qualification,
except where the failure to so qualify would not have a material adverse effect
on ▇▇▇▇. To the knowledge of the Borrower, as of the date of this Agreement,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇ legally and beneficially own, directly
or indirectly, approximately 79% of the outstanding shares of ▇▇▇▇ common stock.
To the knowledge of the Borrower, as of the date of this Agreement, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇ legally and beneficially own approximately 21% of the
outstanding shares of ▇▇▇▇ common stock.
Section 4.02 Partnership and Corporate Power. The execution, delivery,
-------------------------------
and performance by the Borrower, the Parent, and each Guarantor of the Credit
Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby (a) are within such Persons' partnership,
limited liability company and corporate powers, as applicable, (b) have been
duly authorized by all necessary corporate, limited liability company and
partnership action, as applicable, (c) do not contravene (i) such Person's
certificate or articles, as the case may be, of incorporation or by-laws,
operating agreement or partnership agreement, as applicable, or (ii) any law or
any contractual restriction binding on or affecting any such Person, the
contravention of which could reasonably be expected to cause a Material Adverse
Change, and (d) will not result in or require the creation or imposition of any
Lien prohibited by this Agreement. At the time of each Borrowing, such
Borrowing and the use of the proceeds of such Borrowing will be within the
Borrower's partnership ▇▇▇▇▇▇, ▇▇▇▇ have been duly authorized by all necessary
partnership action, (a) will not contravene (i) the Borrower's partnership
agreement or (ii) any law or any contractual restriction binding on or affecting
the Borrower, the contravention of which could reasonably be expected to cause a
Material Adverse Change, and (b) will not result in or require the creation or
imposition of any Lien prohibited by this Agreement.
Section 4.03 Authorization and Approvals. No authorization or approval
---------------------------
or other action by, and no notice to or filing with, any Governmental Authority
is required for the due execution, delivery and performance by the Borrower, the
Parent, or any Guarantor of the Credit Documents to which it is a party or the
consummation of the transactions contemplated thereby. At the time of each
Borrowing, no authorization or approval or other action by, and no notice to or
filing with, any
-56-
Governmental Authority will be required for such Borrowing or the use of the
proceeds of such Borrowing the absence of which could reasonably be expected to
cause a Material Adverse Change.
Section 4.04 Enforceable Obligations. This Agreement, the Notes, and the
-----------------------
other Credit Documents to which the Borrower is a party have been duly executed
and delivered by the Borrower; each Subordinate Guaranty and the other Credit
Documents to which each Guarantor and the Parent is a party have been duly
executed and delivered by such Guarantor and the Environmental Indemnity has
been duly executed and delivered by the parties thereto. Each Credit Document
is the legal, valid, and binding obligation of the Borrower, the Parent, and
each Guarantor which is a party to it enforceable against the Borrower, the
Parent, and each such Guarantor in accordance with its terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium, or similar law affecting creditors' rights generally
and by general principles of equity (whether considered in proceeding at law or
in equity).
Section 4.05 Parent Common Stock. The entire authorized capital stock of
-------------------
the Parent consists of 100,000,000 shares of Parent Common Stock of which
21,804,480 shares of Parent Common Stock are duly and validly issued and
outstanding, fully paid and nonassessable as of February 1, 1998. The issuance
and sale of such Parent Common Stock either (i) has been registered under
applicable federal and state securities laws or (ii) was issued pursuant to an
exemption therefrom. The Parent Common Stock shall at all times be duly listed
on the New York Stock Exchange, Inc. and the Parent shall use commercially
reasonable efforts to timely file all reports required to be filed by it with
the New York Stock Exchange, Inc. and the Securities and Exchange Commission.
The Parent qualifies as a REIT.
Section 4.06 Financial Statements.
--------------------
The Consolidated balance sheet of the Parent and its Subsidiaries, and
the related Consolidated statements of operations, shareholders' equity and cash
flows, of the Parent and its Subsidiaries contained in the Financial Statements,
fairly present the financial condition in all material respects and reflects the
Indebtedness of the Parent and its Subsidiaries as of the dates indicated in the
Financial Statements and the results of the operations of the Parent and its
Subsidiaries for the periods indicated, and such balance sheet and statements
were prepared in accordance with GAAP, subject to year-end adjustments. Since
the date of such statements, no Material Adverse Change has occurred. The
Minority Interest Adjustment amount as of December 31, 1997 is approximately
$10,300,000.
-57-
Section 4.07 True and Complete Disclosure. No representation, warranty,
----------------------------
or other statement made by the Borrower (or on behalf of the Borrower) in this
Agreement or any other Credit Document contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which they were made as of the date of this Agreement. There is no fact known
to any Responsible Officer of the Borrower or the Parent on the date of this
Agreement that has not been disclosed to the Agents which could reasonably be
expected to cause a Material Adverse Change. All projections, estimates, and
pro forma financial information furnished by the Borrower and the Parent or on
behalf of the Borrower or the Parent were prepared on the basis of assumptions,
data, information, tests, or conditions believed to be reasonable at the time
such projections, estimates, and pro forma financial information were furnished.
No representation, warranty or other statement made in the Parent's latest 10K,
the 10Q or the annual report contains any untrue statement of material fact or
omits to state any material fact necessary to make the statements contained
therein not misleading in light of the circumstances in which they were made as
of the date same were made. Borrower and/or Parent have made all filings
required by the Exchange Act.
Section 4.08 Litigation. Except as set forth in the attached Schedule
----------
4.08, there is no pending or, to the best knowledge of the Borrower, threatened
action or proceeding affecting the Borrower, the Parent, the Manager, any
Participating Lessee or any of their respective Subsidiaries before any court,
Governmental Authority or arbitrator (provided that with respect to the giving
of this representation after the date of this Agreement, the representation
shall only be deemed to apply to those matters for which Administrative Agent
would have been entitled to notice under Section 5.05(n)).
Section 4.09 Use of Proceeds.
---------------
(a) Advances. The proceeds of the Advances have been, and will be used by
--------
the Borrower (i) to refinance other existing Indebtedness secured by Hotel
Properties, (ii) to make investments permitted pursuant to the provisions of
Section 6.07, (iii) to finance the renovation, repair, restoration and expansion
of Hotel Properties, Capital Expenditures for and expenditures for FF&E for any
Hotel Properties in accordance with the provisions of Section 5.06 and as
permitted pursuant to the provisions of Sections 6.07 and 6.14, (iv) for general
corporate purposes of the Borrower and its Subsidiaries, (v) for costs incurred
in connection with any Capitalization Event done in compliance with this
Agreement.
-58-
(b) Regulations. No proceeds of Advances will be used to purchase or carry
-----------
any margin stock in violation of Regulations G, T, U or X of the Federal Reserve
Board, as the same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U of the Federal Reserve Board).
Section 4.10 Investment Company Act. Neither the Borrower, the Parent
----------------------
nor any of their respective Subsidiaries is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 4.11 Taxes. All federal, state, local and foreign tax returns,
-----
reports and statements required to be filed (after giving effect to any
extension granted in the time for filing) by the Borrower, its Subsidiaries, or
any member of a Controlled Group have been filed with the appropriate
governmental agencies in all jurisdictions in which such returns, reports and
statements are required to be filed, and where the failure to file could
reasonably be expected to cause a Material Adverse Change, except where
contested in good faith and by appropriate proceedings; and all taxes and other
impositions due and payable (which are material in amount) have been timely paid
prior to the date on which any fine, penalty, interest, late charge or loss
(which are material in amount) may be added thereto for non-payment thereof
except where contested in good faith and by appropriate proceedings. As of the
date of this Agreement, neither the Borrower nor any member of a Controlled
Group has given, or been requested to give, a waiver of the statute of
limitations relating to the payment of any federal, state, local or foreign
taxes or other impositions. None of the Property owned by the Borrower or any
other member of a Controlled Group is Property which the Borrower or any member
of a Controlled Group is required to be treated as being owned by any other
Person pursuant to the provisions of Section 168(f)(8) of the Code. Proper and
accurate amounts have been withheld by the Borrower and all members of each
Controlled Group from their employees for all periods to comply in all material
respects with the tax, social security and unemployment withholding provisions
of applicable federal, state, local and foreign law. Timely payment of all
material sales and use taxes required by applicable law have been made by the
Borrower and all other members of each Controlled Group, the failure to timely
pay of which could reasonably be expected to cause a Material Adverse Change.
The amounts shown on all tax returns to be due and payable have been paid in
full or adequate provision therefor is included on the books of the appropriate
member of the applicable Controlled Group.
-59-
Section 4.12 Pension Plans. All Plans are in compliance in all material
-------------
respects with all applicable provisions of ERISA. No Termination Event has
occurred with respect to any Plan, and each Plan has complied with and been
administered in all material respects in accordance with applicable provisions
of ERISA and the Code. No "accumulated funding deficiency" (as defined in
Section 302 of ERISA) has occurred and there has been no excise tax imposed
under Section 4971 of the Code. To the knowledge of any Responsible Officer of
the Borrower, no Reportable Event has occurred with respect to any Multiemployer
Plan, and each Multiemployer Plan has complied with and been administered in all
material respects with applicable provisions of ERISA and the Code. To the
knowledge of any Responsible Officer of the Borrower, neither the Borrower nor
any member of a Controlled Group has had a complete or partial withdrawal from
any Multiemployer Plan for which there is any material withdrawal liability. As
of the most recent valuation date applicable thereto, neither the Borrower nor
any member of a Controlled Group has received notice that any Multiemployer Plan
is insolvent or in reorganization.
Section 4.13 Condition of Hotel Property; Casualties; Condemnation.
-----------------------------------------------------
Except as disclosed in an Engineering Report, each Initial Property and any
Future Property except a Permitted Non-Eligible Property (a) is and will
continue to be in good repair, working order and condition, normal wear and tear
excepted, (b) is free of structural defects, (c) is not subject to material
deferred maintenance and (d) has and will have all building systems contained
therein and all other FF&E in good repair, working order and condition, normal
wear and tear excepted. None of the Properties of the Borrower or of any of its
Subsidiaries has been materially and adversely affected as a result of any fire,
explosion, earthquake, flood, drought, windstorm, accident, strike or other
labor disturbance, embargo, requisition or taking of property or cancellation of
contracts, permits or concessions by a Governmental Authority, riot, activities
of armed forces or acts of God or of any public enemy. No condemnation or other
like proceedings that has had, or could reasonably be expected to result in, a
Material Adverse Effect, are pending and served nor, to the knowledge of the
Borrower, threatened against any Property in any manner whatsoever. No casualty
has occurred to any Property that could reasonably be expected to have a
Material Adverse Effect.
Section 4.14 Insurance. The Borrower and each of its Subsidiaries carry
---------
the insurance required pursuant to the provisions of Section 5.07.
Section 4.15 No Burdensome Restrictions; No Defaults.
---------------------------------------
-60-
(a) Except in connection with Indebtedness which is (i) either permitted
pursuant to the provisions of Section 6.02, or (ii) being repaid with the
proceeds of the initial Borrowing, neither the Borrower nor any of its
Subsidiaries is a party to any indenture, loan or credit agreement. Neither the
Borrower, the Parent nor any of their respective Subsidiaries is a party to any
agreement or instrument or subject to any charter or corporate restriction or
provision of applicable law or governmental regulation which could reasonably be
expected to cause a Material Adverse Change. Neither the Borrower, the Parent
nor any of their Subsidiaries is in default under or with respect to (i) any
contract, agreement, lease or other instrument which could reasonably be
expected to cause a Material Adverse Change or (ii) any ground lease,
Participating Lease, franchise agreement or management agreement except as
disclosed to the Administrative Agent in writing prior to the date such
representation is deemed given. Neither the Borrower, the Parent nor any of
their Subsidiaries has received any notice of default under any material
contract, agreement, lease or other instrument which is continuing and which, if
not cured, could reasonably be expected to cause a Material Adverse Change.
(b) No Default has occurred and is continuing (or with respect to the
giving of this representation after the date of this Agreement, as otherwise
disclosed to the Administrative Agent in writing after the date of this
Agreement and prior to the date such representation is deemed given).
Section 4.16 Environmental Condition.
-----------------------
(a) Except as disclosed in the Environmental Reports (or with respect to
the giving of this representation after the date of this Agreement, as otherwise
disclosed to the Administrative Agent in writing after the date of this
Agreement and prior to the date such representation is deemed given), to the
knowledge of the Borrower, the Borrower and its Subsidiaries (i) have obtained
all Environmental Permits material for the ownership and operation of their
respective Properties and the conduct of their respective businesses; (ii) have
been and are in material compliance with all terms and conditions of such
Environmental Permits and with all other requirements of applicable
Environmental Laws; (iii) have not received notice of any violation or alleged
violation of any Environmental Law or Environmental Permit; and (iv) are not
subject to any actual or contingent Environmental Claim.
(b) Except as set forth in the Environmental Reports or the surveys for
the Hotel Properties, to the knowledge of Borrower, none of the present or
previously owned or operated Property of the Borrower or of any of its present
or former Subsidiaries, wherever located, (i) has
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been placed on or proposed to be placed on the National Priorities List, the
Comprehensive Environmental Response Compensation Liability Information System
list, or their state or local analogs, or have been otherwise investigated,
designated, listed, or identified as a potential site for removal, remediation,
cleanup, closure, restoration, reclamation, or other response activity under any
Environmental Laws which could reasonably be expected to cause a Material
Adverse Change; (ii) is subject to a Lien, arising under or in connection with
any Environmental Laws, that attaches to any revenues or to any Property owned
or operated by the Borrower or any of its Subsidiaries, wherever located; (iii)
has been the site of any Release, use or storage of Hazardous Substances or
Hazardous Wastes from present or past operations except for Permitted Hazardous
Substances, which Permitted Hazardous Substances have not caused at the site or
at any third-party site any condition that has resulted in or could reasonably
be expected to result in the need for Response or (iv) none of the Improvements
are constructed on land designated by any Governmental Authority having land use
jurisdiction as wetlands.
Section 4.17 Legal Requirements, Zoning, Utilities, Access. Except as
---------------------------------------------
set forth on Schedule 4.17 attached hereto, the use and operation of each Hotel
Property as a commercial hotel with related uses constitutes a legal use under
applicable zoning regulations (as the same may be modified by special use
permits or the granting of variances) and complies in all material respects with
all Legal Requirements, and does not violate in any material respect any
material approvals, material restrictions of record or any material agreement
affecting any Hotel Property (or any portion thereof). The Borrower and its
Subsidiaries possess all certificates of public convenience, authorizations,
permits, licenses, patents, patent rights or licenses, trademarks, trademark
rights, trade names rights and copyrights (collectively "Permits") required by
Governmental Authority to own and operate the Hotel Properties, except for those
Permits if not obtained would not cause a Material Adverse Change. The Borrower
and its Subsidiaries own and operate their business in material compliance with
all applicable Legal Requirements. To the extent necessary for the full
utilization of each Hotel Property in accordance with its current use, telephone
services, gas, steam, electric power, storm sewers, sanitary sewers and water
facilities and all other utility services are available to each Hotel Property,
are adequate to serve each such Hotel Property, exist at the boundaries of the
Land and are not subject to any conditions, other than normal charges to the
utility supplier, which would limit the use of such utilities. All streets and
easements necessary for the occupancy and operation of each Hotel Property are
available to the boundaries of the Land.
Section 4.18 Existing Indebtedness. Except for the Obligations and the
---------------------
Senior Obligations, the only Indebtedness of the Borrower, the Parent or any of
their respective Subsidiaries existing as
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of the Effective Date is the Secured Non-Recourse Indebtedness and Secured
Recourse Indebtedness set forth on Schedule 4.18 attached hereto. No "default"
or "event of default", however defined, has occurred and is continuing under any
such Indebtedness (or with respect to the giving of this representation after
the date of this Agreement, as otherwise disclosed to the Administrative Agent
in writing after the date of this Agreement and prior to the date such
representation is deemed given).
Section 4.19 Title; Encumbrances. With respect to the Initial
-------------------
Properties, the Borrower or any Guarantor, as the case may be, has (i) good and
marketable fee simple title to the Real Property (other than for Real Property
subject to a ground lease, as to which it has a valid leasehold or subleasehold
interest) and (ii) good and marketable title to the Personal Property (other
than Personal Property for any Hotel Property (A) which has been leased which
does not in the aggregate exceed the Hotel Operating Lease Limit or the Hotel
Capital Lease Limit, as applicable, for such Hotel Property and (B) for which
the Property Owner has a valid leasehold interest) free and clear of all Liens,
and there exists no Liens or other charges against such Property or leasehold
interest or any of the real or personal, tangible or intangible, Property of the
Borrower or any Guarantor (including without limitation statutory and other
Liens of mechanics, workers, contractors, subcontractors, suppliers, taxing
authorities and others; provided that certain Capital Expenditures have been
made to the Hotel Properties prior to the Effective Date for which the payment
is not past due), except (A) Permitted Encumbrances and (B) the Personal
Property (plus any replacements thereof) owned by the Participating Lessee.
Section 4.20 Leasing Arrangements. The only material leases of Real
--------------------
Property for which either the Borrower or a Guarantor is a lessee are the Ground
Leases. The Property Owner for a Real Property subject to a ground lease is the
lessee under such ground lease and no consent is necessary to such Person being
the lessee under such ground lease which has not already been obtained. The
Ground Leases are in full force and effect and no defaults exist thereunder.
The only material leases burdening the Hotel Properties for which the lessee is
entitled to participate in the increased revenues of the Hotel Properties are
the Participating Leases. The Participating Leases are in full force and
effect and no defaults by the Borrower or any Subsidiary exist thereunder.
Section 4.21 Franchise Agreements. The only hotel franchise agreements
--------------------
burdening the Initial Properties (excluding the Permitted Non-Eligible
Properties) are the Franchise Agreements. The Participating Lessee for a Hotel
Property subject to a Franchise Agreement is the licensee under such Franchise
Agreement and no consent is necessary to such Person being the licensee under
such Franchise Agreement which has not already been obtained. The Franchise
Agreements are in full
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force and effect and no material defaults by the Borrower or any Subsidiary
exist thereunder (or with respect to the giving of this representation after the
date of this Agreement, as otherwise disclosed to the Administrative Agent in
writing after the date of this Agreement and prior to the date such
representation is deemed given). Schedule 4.21 sets forth, as of the date of
this Agreement, (a) which Franchise Agreements the Borrower expects to
terminate, (b) the expected date of such termination, (c) the expected fees, if
any, which will be owed to the Franchisor being terminated in connection with
such termination and (d) the expected replacement Franchisor and the material
terms of the expected replacement Franchise Agreement.
Section 4.22 Management Agreements. The only management agreements
---------------------
burdening the Initial Properties (excluding the Permitted Non-Eligible
Properties) are the Management Agreements. To the knowledge of the Borrower, the
Participating Lessee for a Hotel Property subject to a Management Agreement is
the owner under such Management Agreement and no consent is necessary to such
Person being the owner under such Management Agreement which has not already
been obtained. To the knowledge of the Borrower, the Management Agreements are
in full force and effect and no material defaults by the Participating Lessee
exist thereunder (or with respect to the giving of this representation after the
date of this Agreement, as otherwise disclosed to the Administrative Agent in
writing after the date of this Agreement and prior to the date such
representation is deemed given).
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid,, or any Bank shall have any Commitment hereunder, unless the
Administrative Agent shall otherwise consent in writing, the Borrower agrees to
comply with the following covenants.
Section 5.01 Compliance with Laws, Etc. The Borrower will comply, and
-------------------------
cause each of its Subsidiaries to comply, in all material respects with all
Legal Requirements.
Section 5.02 Preservation of Corporate Existence; Corporate Separateness,
------------------------------------------------------------
Etc.
---
(a) The Borrower will preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, its partnership, limited liability
company or corporate (as applicable)
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existence, rights, franchises and privileges in the jurisdiction of its
formation, and qualify and remain qualified, and cause each such Subsidiary to
qualify and remain qualified, as a foreign partnership or corporation as
applicable in each jurisdiction in which qualification is necessary or desirable
in view of its business and operations or the ownership of its properties, and,
in each case, where failure to qualify or preserve and maintain its rights and
franchises could reasonably be expected to cause a Material Adverse Change.
(b) The Borrower shall cause the Permitted Other Subsidiaries which have
Indebtedness and own a Hotel Property to, (i) maintain financial statements,
payroll records, accounting records and other corporate records and other
documents separate from each other and any other Person, (ii) maintain its own
bank accounts in its own name, separate from each other and any other Person,
(iii) pay its own expenses and other liabilities from its own assets and incur
(or endeavor to incur) obligations to other Persons based solely upon its own
assets and creditworthiness and not upon the creditworthiness of each other or
any other Person, and (iv) file its own tax returns or, if part of a
consolidated group, join in the consolidated tax return of such group as a
separate member thereof. The Borrower shall use reasonable efforts to correct
any known misunderstanding or misrepresentation regarding the independence of
the Permitted Other Subsidiaries from the Borrower and the Borrower's other
Subsidiaries.
(c) The Borrower shall, and shall cause the Permitted Other Subsidiaries
which have Indebtedness and own a Hotel Property to, take all actions necessary
to keep such Permitted Other Subsidiaries, separate from the Borrower and the
Borrower's other Subsidiaries, including, without limitation, (i) the taking of
action under the direction of the Board of Directors, members or partners, as
applicable, of such Permitted Other Subsidiaries and, if so required by the
Certificate of Incorporation or the Bylaws, operating agreement or partnership
agreement, as applicable, of such Permitted Other Subsidiaries or by any Legal
Requirement, the approval or consent of the stockholders, members or partners,
as applicable, of such Permitted Other Subsidiaries, (ii) the preparation of
corporate, partnership or limited liability company minutes for or other
appropriate evidence of each significant transaction engaged in by such
Permitted Other Subsidiaries, (iii) the observance of separate approval
procedures for the adoption of resolutions by the Board of Directors or consents
by the partners, as applicable, of such Permitted Other Subsidiaries, on the one
hand, and of the Borrower and the Borrower's other Subsidiaries, on the other
hand, (iv) the holding of the annual stockholders meeting, if applicable, of
such Permitted Other Subsidiaries, which are corporations on a date other than
the date of the annual stockholders' meeting of the General Partner or AGH LP,
and (v) preventing the cash, cash equivalents, credit card receipts or other
revenues of
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the Hotel Properties owned by such Permitted Other Subsidiaries or any other
assets of such Permitted Other Subsidiaries from being commingled with the cash,
cash equivalents, credit card receipts or other revenues collected by the
Borrower or the Borrower's other Subsidiaries.
(d) The Borrower shall, and shall cause the Permitted Other Subsidiaries
to, manage the business of and conduct the administrative activities of the
Permitted Other Subsidiaries independently from the business of the Borrower,
any of the Borrower's other Subsidiaries and any other Person. Any moneys earned
by the Permitted Other Subsidiaries on their assets or proceeds of the sale of
any of their assets shall be deposited in bank accounts separate from any of the
assets of the Borrower, any of the Borrower's other Subsidiaries and any other
Person, and no assets of the Permitted Other Subsidiaries shall become
commingled with assets of such Persons.
(e) The Borrower shall hold itself out, and shall continue to hold itself
out, to the public and to its creditors as a legal entity, separate and distinct
from all other entities, and shall continue to take all steps reasonably
necessary to avoid (i) misleading any other Person as to the identity of the
entity with which such Person is transacting business or (ii) implying that the
Borrower is, directly or indirectly, absolutely or contingently, responsible for
the Indebtedness or other obligations of the Permitted Other Subsidiaries or any
other Person.
Section 5.03 Payment of Taxes, Etc. The Borrower will pay and discharge,
---------------------
and cause each of its Subsidiaries to pay and discharge, before the same shall
become delinquent (a) all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or Property that are material in
amount, prior to the date on which penalties attach thereto and (b) all lawful
claims that are material in amount which, if unpaid, might by Legal Requirement
become a Lien upon its Property; provided, however, that neither the Borrower
-------- -------
nor any such Subsidiary shall be required to pay or discharge any such tax,
assessment, charge, levy, or claim (a) which is being contested in good faith
and by appropriate proceedings, (b) with respect to which reserves in conformity
with GAAP have been provided, (c) such charge or claim does not constitute and
is not secured by any ▇▇▇▇▇▇ ▇▇▇▇ on any portion of any Hotel Property and no
portion of any Hotel Property is in jeopardy of being sold, forfeited or lost
during or as a result of such contest, (d) neither the Agents nor any Bank could
become subject to any civil fine or penalty or criminal fine or penalty, in each
case as a result of non-payment of such charge or claim and (e) such contest
does not, and could not reasonably be expected to, result in a Material Adverse
Change.
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Section 5.04 Visitation Rights; Bank Meeting. At any reasonable time and
-------------------------------
from time to time and so long as any visit or inspection will not unreasonably
interfere with the Borrower's or any of its Subsidiaries' operations, upon
reasonable notice, the Borrower will, and will cause its Subsidiaries to, permit
the Agents and any Bank or any of its agents or representatives thereof, to
examine and make copies of and abstracts from the records and books of account
of, and visit and inspect at its reasonable discretion the properties of, the
Borrower and any such Subsidiary, to discuss the affairs, finances and accounts
of the Borrower and any such Subsidiary with any of their respective officers or
directors. Without in any way limiting the foregoing, the Borrower will, upon
the request of either Agent, participate in a meeting with the Agents and the
Banks once during each calendar year to be held at the Borrower's office in
Dallas, Texas (or such other location as may be agreed to by the Borrower and
the Agents) at such time as may be agreed to by the Borrower and the Agents.
Section 5.05 Reporting Requirements. The Borrower will furnish to the
----------------------
Administrative Agent and each Bank:
(a) Quarterly Financials. As soon as available and in any event not later
--------------------
than 50 days after the end of each Fiscal Quarter of the Parent, the unaudited
Consolidated balance sheets of the Parent and its Subsidiaries as of the end of
such quarter and the related unaudited statements of income, shareholders'
equity and cash flows of the Parent and its Subsidiaries for the period
commencing at the end of the previous year and ending with the end of such
Fiscal Quarter, and the corresponding figures as at the end of, and for, the
corresponding period in the preceding Fiscal Year, all duly certified with
respect to such statements (subject to year-end audit adjustments) by a
Responsible Officer of the Parent as having been prepared in accordance with
GAAP, together with (i) a Compliance Certificate duly executed by a Responsible
Officer of the Parent, (ii) written notice of any anticipated material variation
to an operating budget prepared pursuant to Section 5.05(e) and (iii) a report
certified by a Responsible Officer of the Parent setting forth for each of the
Hotel Properties owned or leased by the Parent or any of its Subsidiaries for
the Fiscal Quarter just ended the average daily rate, the average occupancy, the
RevPAR, the total gross revenues, the total expenses and the Adjusted EBITDA for
such Hotel Properties..
(b) Annual Financials. As soon as available and in any event not later
-----------------
than 95 days after the end of each Fiscal Year of the Parent, a copy of the
Consolidated balance sheets of the Parent and its Subsidiaries as of the end of
such Fiscal Year and the related Consolidated statements of income,
shareholders' equity and cash flows of the Parent and its Subsidiaries for such
Fiscal Year,
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and the corresponding figures as at the end of, and for, the preceding Fiscal
Year, and certified by Coopers & ▇▇▇▇▇▇▇ L.L.P. or other independent certified
public accountants of nationally recognized standing reasonably acceptable to
the Agents in an opinion, without qualification as to the scope, and including,
if requested by either Agent, any management letters delivered by such
accountants to the Parent in connection with such audit, together with (i) a
Compliance Certificate duly executed by a Responsible Officer of the Parent,
(ii) written notice of any anticipated material variation to an operating budget
prepared pursuant to Section 5.05(e) and (iii) the document required in clause
(iii) of the preceding Section 5.05(a).
(c) Manager Financials. As soon as available and in any event not later
------------------
than 120 days after the end of each Fiscal Year of ▇▇▇▇, as applicable, a copy
of the annual audit report for such year for ▇▇▇▇ and its Subsidiaries, if any,
including therein an audited Consolidated balance sheet of ▇▇▇▇ and its
Consolidated Subsidiaries as of the end of such Fiscal Year and the related
Consolidated statements of income, shareholders' equity and cash flows of ▇▇▇▇
and its Subsidiaries for such Fiscal Year, and the corresponding figures as at
the end of, and for, the preceding Fiscal Year, in each case certified by an
independent certified public accountant reasonably acceptable to the Agents and
including, if requested by either Agent, any management letters delivered by
such accountants to ▇▇▇▇ in connection with such audit.
(d) AGH Leasing Financials. As soon as available and in any event not
----------------------
later than 50 days after the end of each Fiscal Quarter of AGH Leasing, the
unaudited Consolidated balance sheets of AGH Leasing and its Subsidiaries as of
the end of such quarter and the related unaudited statements of income,
shareholders' equity and cash flows of AGH Leasing and its Subsidiaries for the
period commencing at the end of the previous year and ending with the end of
such Fiscal Quarter, and the corresponding figures as at the end of, and for,
the corresponding period in the preceding Fiscal Year, all duly certified with
respect to such statements (subject to year-end audit adjustments) by a
Responsible Officer of AGH Leasing as having been prepared in accordance with
GAAP. As soon as available and in any event not later than 120 days after the
end of each fiscal year of AGH Leasing, as applicable, (i) a copy of the annual
audit report for such year for AGH Leasing and its Subsidiaries, if any,
including therein audited Consolidated balance sheets of AGH Leasing and its
Consolidated Subsidiaries as of the end of such fiscal year and the related
Consolidated statements of income, shareholders' equity and cash flows of AGH
Leasing and its Subsidiaries for such fiscal year, and the corresponding figures
as at the end of, and for, the preceding fiscal year, in each case certified by
an independent certified public accountant reasonably
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acceptable to the Agents and including, if requested by either Agent, any
management letters delivered by such accountants to AGH Leasing in connection
with such audit.
(e) Annual Budgets. Prior to the start of each Fiscal Year, the
--------------
Consolidated annual operating budget of the Parent and its Subsidiaries for such
upcoming Fiscal Year in reasonable detail and duly certified by a Responsible
Officer of the Parent as the budgets presented or to be presented to the
Parent's Board of Directors for their review.
(f) Securities Law Filings. Promptly and in any event within 15 days after
----------------------
the sending or filing thereof, copies of all proxy material, reports and other
information which the Borrower, the Parent or any of their respective
Subsidiaries sends to or files with the United States Securities and Exchange
Commission or sends to all shareholders of the Parent or partners of the
Borrower.
(g) Defaults. As soon as possible and in any event within five days after
--------
the occurrence of each Default known to a Responsible Officer of the Borrower,
the Parent or any of their respective Subsidiaries, a statement of an authorized
financial officer or Responsible Officer of the Borrower setting forth the
details of such Default and the actions which the Borrower has taken and
proposes to take with respect thereto.
(h) ERISA Notices. As soon as possible and in any event (i) within 30 days
-------------
after the Borrower or any of a Controlled Group knows to know that any
Termination Event described in clause (a) of the definition of Termination Event
with respect to any Plan has occurred, (ii) within 10 days after the Borrower or
any of a Controlled Group knows that any other Termination Event with respect to
any Plan has occurred, a statement of the Chief Financial Officer of the
Borrower describing such Termination Event and the action, if any, which the
Borrower or such member of such Controlled Group proposes to take with respect
thereto; (iii) within 10 days after receipt thereof by the Borrower or any of a
Controlled Group from the PBGC, copies of each notice received by the Borrower
or any such member of such Controlled Group of the PBGC's intention to terminate
any Plan or to have a trustee appointed to administer any Plan; and (iv) within
10 days after receipt thereof by the Borrower or any member of a Controlled
Group from a Multiemployer Plan sponsor, a copy of each notice received by the
Borrower or any member of such Controlled Group concerning the imposition or
amount of withdrawal liability pursuant to Section 4202 of ERISA.
(i) Environmental Notices. Promptly upon the knowledge of any Responsible
---------------------
Officer of the Borrower of receipt thereof by the Borrower or any of its
Subsidiaries, a copy of any form of
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notice, summons or citation received from the United States Environmental
Protection Agency, or any other Governmental Authority concerning (i) violations
or alleged violations of Environmental Laws, which seeks to impose liability
therefor, (ii) any action or omission on the part of the Parent or Borrower or
any of their present or former Subsidiaries in connection with Hazardous Waste
or Hazardous Substances which, based upon information reasonably available to
the Borrower, could reasonably be expected to cause a Material Adverse Change or
an Environmental Claim in excess of $1,000,000, (iii) any notice of potential
responsibility under CERCLA, or (iv) concerning the filing of a Lien upon,
against or in connection with the Parent, Borrower, their present or former
Subsidiaries, or any of their leased or owned Property, wherever located.
(j) Other Governmental Notices or Actions. Promptly and in any event
-------------------------------------
within five Business Days after receipt thereof by the Borrower, the Parent or
any of their respective Subsidiaries, (i) a copy of any notice, summons,
citation, or proceeding seeking to adversely modify in any material respect,
revoke, or suspend any license, permit, or other authorization from any
Governmental Authority, which action could reasonably be expected to cause a
Material Adverse Change, and (ii) any revocation or involuntary termination of
any license, permit or other authorization from any Governmental Authority,
which revocation or termination could reasonably be expected to cause a Material
Adverse Change.
(k) Reports Affecting the Total Availability. On or prior to the 5th day
----------------------------------------
following any Adjustment Event, a Property Adjustment Report with respect to
such Adjustment Event.
(l) Press Releases. Promptly and in any event within 5 days after the
--------------
sending or releasing thereof, copies of all press releases or other releases of
information to the public by the Borrower, the Parent or any of their respective
Subsidiaries or releases of information to the Parent's shareholders.
(m) Other Notices.
-------------
(i) Upon the request of either Agent, a certified rent roll listing
all of the Real Property of the Borrower and the Guarantors that are
subject to leases and containing such other information regarding such
leases that such Agent may reasonably request,
(ii) As soon as received, a copy of any notice of default or any
other material notice (including without limitation property condition
reviews) received by the Borrower
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or any Guarantor from any holder of any of the Senior Obligations or any
Franchisor, Manager, or any ground lessor under a ground lease, and
(iii) Promptly following any merger or dissolution of any Subsidiary
of the Borrower which is permitted hereunder or event which would make any
of the representations in Section 4.01-4.04 untrue, notice thereof.
(n) Material Litigation. As soon as possible and in any event within five
-------------------
days of any Responsible Officer of the Borrower, the Parent or any of their
respective Subsidiaries having knowledge thereof, notice of any litigation,
claim or any other event which could reasonably be expected to cause a Material
Adverse Change.
(o) Preliminary Property Plan. Prior to making Capital Expenditures or
-------------------------
FF&E expenditures for the renovation or expansion of a Hotel Property, the
Preliminary Property Plan for such renovation or expansion in sufficient detail
as the Documentation Agent shall reasonably request.
(p) Future Property. (i) at least 10 days prior to the acquisition of a
---------------
Hotel Property by the Parent or one of the Parent's Subsidiaries, an
Environmental Report for such Hotel Property, (ii) not later that the date 10
days following the date of the acquisition of a Hotel Property by the Parent or
one of the Parent's Subsidiaries or a Permitted Non-Voting Stock Company, (A)
the remaining Property Information and (B) if the Property Owner for such Hotel
Property is not the Borrower or a Guarantor and such Hotel Property does not
serve as collateral for either Secured Recourse Indebtedness or Secured Non-
Recourse Indebtedness, then the Borrower will cause such Property Owner to
execute and deliver to the Administrative Agent either (1) an original
Subordinate Guaranty and Environmental Indemnity executed by such Person or (2)
an Accession Agreement executed by such Person.
(q) Other Information. Such other information respecting the business or
-----------------
Properties, or the condition or operations, financial or otherwise, of the
Borrower, the Parent or any of their respective Subsidiaries, as any Bank
through the Administrative Agent may from time to time reasonably request.
Section 5.06 Maintenance of Property and Required Work. The Borrower
-----------------------------------------
will, and will cause each of its Subsidiaries to, (a) maintain their owned,
leased, or operated Property in a manner
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consistent for hotel properties and related property of the same quality and
character and shall keep or cause to be kept every part thereof and its other
properties in good condition and repair, reasonable wear and tear excepted, and
make all reasonably necessary repairs, renewals or replacements thereto as may
be reasonably necessary to conduct the business of the Borrower and its
Subsidiaries, (b) not remove, demolish or structurally alter, or permit or
suffer the removal, demolition or structural alteration of, any of the
Improvements except for the renovation or expansion of a Hotel Property (i) for
which the Borrower has delivered a Preliminary Property Plan to the
Administrative Agent and (ii) complies with the limitations set forth in this
Agreement on the aggregate amount of renovations and expansions the Borrower,
the Parent and their Subsidiaries are permitted at any one time, (c) not
knowingly or willfully permit the commission of waste or other injury, or the
occurrence of pollution, contamination or any other condition in, on or about
any Hotel Property, (d) maintain and repair each Hotel Property as required by
any franchise agreement, management agreement or ground lease for such Hotel
Property, and (e) commence the Required Work for any Hotel Property by a date
which would allow a reasonable period of time to complete such work on or prior
to the deadline set for such Required Work in Schedule 5.06 or otherwise agreed
to by the Borrower and the Agents, (f) after any commencement of any of work for
any Hotel Property diligently perform such work (i) for the Required Work, by
the required deadline and as described in the Engineering Reports and/or the
Environmental Reports referred to in Schedule 5.06 or as otherwise described for
any Future Property, (ii) in a good and workmanlike manner and (iii) in
compliance in all material respects with all Legal Requirements. Except as may
be required to maintain the Parent's status as a REIT under the Code, any
Capital Expenditures or expenditures or leases for FF&E made for any Hotel
Property shall be in the name of the Property Owner for such Hotel Property.
Section 5.07 Insurance. The Borrower will maintain, and cause each of its
---------
Subsidiaries to maintain, the insurance required pursuant to Schedule 5.07.
Section 5.08 Casualty; Condemnation. Any proceeds collected (the
----------------------
"Proceeds") under any fire or other physical damage insurance policy described
in this Agreement pertaining to any Hotel Property (excluding the Permitted Non-
Eligible Properties) shall be disbursed as provided in this Section 5.08. If
such casualty would result in a decrease to the Total Availability which would
require a prepayment of the Obligations pursuant to the provisions of this
Agreement and the Borrower is not obligated pursuant to the terms of the Senior
Credit Agreement to use such proceeds to repay Senior Obligations, then the
Borrower shall deliver such Proceeds, up to the amount of the required
prepayment, to the Administrative Agent as a prepayment of the Obligations. If
the
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Proceeds do not need to be applied against the Obligations pursuant to the
foregoing sentence, then the Borrower is entitled to retain such Proceeds.
Section 5.09 Supplemental Guaranties. The Borrower has requested and the
-----------------------
Agents have agreed that any partner of the Borrower except the General Partner,
AGH LP or any Guarantor may execute a Supplemental Guaranty. However, the
execution of or release of any Supplemental Guaranty shall not be construed as a
release or modification of any obligation of a Guarantor under a Subordinate
Guaranty or Environmental Indemnity.
Section 5.10 Participating Leases. Upon knowledge of a material default
--------------------
by a Participating Lessee under a Participating Lease, the Borrower will send,
or will cause the Guarantor who is a party to such Participating Lease to send,
a notice of such default to such Participating Lessee as provided in the
document under which such default has occurred.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, or any Bank shall have any Commitment, the Borrower agrees, unless the
Administrative Agent shall otherwise consent in writing, to comply with the
following covenants.
Section 6.01 Liens, Etc. The Borrower will not create, assume, incur or
----------
suffer to exist, or permit any of its Subsidiaries (except for Permitted Other
Subsidiaries) to create, assume, incur, or suffer to exist, any Lien on or in
respect of any of its Property whether now owned or hereafter acquired, or
assign any right to receive income, except that the Borrower and its
Subsidiaries may create, incur, assume or suffer to exist Liens:
(a) securing the Obligations;
(b) for taxes, assessments or governmental charges or levies on Property
of the Borrower or any Guarantor to the extent not required to be paid pursuant
to Sections 5.03;
(c) Liens imposed by law (such as landlords', carriers', warehousemen's
and mechanics' liens or otherwise arising from litigation) (a) which are being
contested in good faith and by
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appropriate proceedings, (b) with respect to which reserves in conformity with
GAAP have been provided, (c) which have not resulted in any Hotel Property being
in jeopardy of being sold, forfeited or lost during or as a result of such
contest, (d) neither the Agents nor any Bank could become subject to any civil
fine or penalty or criminal fine or penalty, in each case as a result of non-
payment of such charge or claim and (e) such contest does not, and could not
reasonably be expected to, result in a Material Adverse Change;
(d) on leased personal property to secure solely the lease obligations
associated with such property;
(e) Liens securing Secured Recourse Indebtedness and Secured Non-Recourse
Indebtedness permitted pursuant to the provisions of Section 6.02;
(f) Liens under the Permitted Non-Voting Stock Mortgages; and
(g) The Florida Liens securing the Senior Obligations.
Section 6.02 Indebtedness. The Borrower, the Parent and their respective
------------
Subsidiaries will not incur or permit to exist any Indebtedness other than the
Obligations and the following:
(a) Senior Obligations for which the sum of the principal outstanding and
face amount of outstanding letters of credit is less than or equal to
$500,000,000;
(b) Secured Recourse Indebtedness and Secured Non-Recourse Indebtedness
incurred by Permitted Other Subsidiaries (and possibly guaranteed by the Parent)
to the extent (i) that the covenants contained in Article VII are complied with,
(ii) the Secured Recourse Indebtedness secured by a Hotel Property does not
exceed 65% of the market value of such Hotel Property and all Secured Recourse
Indebtedness in the aggregate secured by Hotel Properties does not exceed 65% of
the aggregate market value of such Hotel Properties, (iii) the Secured Non-
Recourse Indebtedness secured by a Hotel Property does not exceed 70% of the
market value of such Hotel Property and all Secured Non-Recourse Indebtedness in
the aggregate secured by Hotel Properties does not exceed 70% of the aggregate
market value of such Hotel Properties and (iv) such Indebtedness does not in the
aggregate exceed $70,000,000;
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(c) Indebtedness in the form of Capital Leases for any particular Hotel
Property which have over the term of such Capital Leases payments in the
aggregate for all such Capital Leases for such Hotel Property for an amount
which does not exceed the Hotel Capital Lease Limit for such Hotel Property;
(d) Indebtedness in the form of Interest Rate Agreements; provided that
(i) such agreements shall be unsecured, (ii) the dollar amount of indebtedness
subject to such agreements and the indebtedness subject to Interest Rate
Agreements in the aggregate shall not exceed the sum of the amount of the
Commitments and the amount of Senior Obligations, and (iii) the agreements shall
be at such interest rates and otherwise in form and substance reasonably
acceptable to the Agents.
(e) Any of the following Indebtedness incurred by the Parent:
(i) guaranties in connection with the Indebtedness secured by a
Hotel Property of (A) if the Hotel Property is subject to a ground lease,
the payment of rent under such ground lease, (B) real estate taxes relating
to such Hotel Property, (C) capital reserves required under such
Indebtedness, and (D) after a default under such Indebtedness, the rent
under the applicable Participating Lease will be applied to such
Indebtedness;
(ii) indemnities for certain acts of malfeasance, misappropriation
and misconduct and an environmental indemnity for the lender under
Indebtedness permitted under to this Agreement;
(iii) indemnities for certain acts of malfeasance, misappropriation
and misconduct by the Permitted Other Subsidiaries and environmental
indemnities, all for the benefit of the lenders of other Permitted Other
Subsidiary Indebtedness in connection with such Indebtedness; and
(iv) guaranties of the franchise agreements.
(f) extensions, renewals and refinancing of any of the Indebtedness
specified in paragraphs (a) - (e) above so long as the principal amount of such
Indebtedness is not thereby increased.
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Section 6.03 Agreements Restricting Distributions From Subsidiaries. The
------------------------------------------------------
Borrower will not, nor will it permit any of its Subsidiaries (other than
Permitted Other Subsidiaries) to, enter into any agreement (other than a Credit
Document or the Senior Credit Documents) which limits distributions to or any
advance by any of the Borrower's Subsidiaries to the Borrower.
Section 6.04 Restricted Payments. Neither the Parent, the Borrower, nor
-------------------
any of their respective Subsidiaries, will make any Restricted Payment, except
that:
(a) provided no Default has occurred and is continuing or would result
therefrom, the Parent may in any Fiscal Quarter, based on the immediately
preceding Rolling Period, make cash payments to its shareholders (including in
connection with the repurchase of Stock or Stock Equivalents) which with the
previous such cash payments in the three immediately preceding Fiscal Quarters
are not in excess of the greater of (i) the lesser of (A) ninety percent (90%)
of the Funds From Operations of the Parent during such Rolling Period or (B) one
hundred percent (100%) of Free Cash Flow of the Parent during such Rolling
Period and (ii) the amount required for the Parent to maintain its status as a
REIT;
(b) provided no Default has occurred and is continuing or would result
therefrom, the Borrower shall be entitled to make cash distributions to its
partners and such partners shall be entitled to make cash distributions to the
Parent;
(c) a Subsidiary of the Borrower may make a Restricted Payment to the
Borrower,
(d) the limited partners of the Borrower shall be entitled to exchange
limited partnership interests in the Borrower for the Parent's stock; and
(e) the Borrower shall be entitled to issue limited partnership interests
in the Borrower in exchange of ownership interests in Subsidiaries and
Unconsolidated Entities which own a Future Property to the extent such
Investment is permitted pursuant to the provisions of Section 6.07.
Section 6.05 Fundamental Changes; Asset Dispositions. Neither the
---------------------------------------
Parent, the Borrower, nor any of their respective Subsidiaries (other than the
Permitted Other Subsidiaries) will, (a) merge or consolidate with or into any
other Person, unless (i) a Guarantor is merged into the Borrower and the
Borrower is the surviving Person or a Subsidiary (other than a Permitted
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Other Subsidiary which has Indebtedness other than the Obligations) is merged
into any Subsidiary (other than a Permitted Other Subsidiary which has
Indebtedness other than the Obligations), and (ii) immediately after giving
effect to any such proposed transaction no Default would exist; (b) sell,
transfer, or otherwise dispose of all or any of the such Person's material
property except for a Permitted Hotel Sale, dispositions or replacements of
personal property in the ordinary course of business, or Hotel Properties which
are not Eligible Properties; (c) enter into a lease (other than a Participating
Lease) of all or substantially all of any Eligible Property with any Person
without the consent of the Agents; (d) sell or otherwise dispose of any material
shares of capital stock, membership interests or partnership interests of any
Subsidiary (except for a Permitted Other Subsidiary); (e) except for sales of
ownership interests permitted under this Agreement and the issuance of limited
partnership interests in the Borrower in exchange for ownership interests in
Subsidiaries and Unconsolidated Entities to the extent permitted pursuant to the
provisions of Section 6.04, materially alter the corporate, capital or legal
structure of any such Person (except for a Permitted Other Subsidiary); (f)
liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution)
provided that nothing herein shall prohibit the Borrower from dissolving any
Subsidiary which has no assets on the date of dissolution or (g) materially
alter the character of their respective businesses from that conducted as of the
date of this Agreement.
Section 6.06 Personal Property Leases. For any Eligible Property, the
------------------------
Borrower will not, and will not permit any of its Subsidiaries to (a) enter into
leases of Personal Property which constitute Capital Leases in excess of the
Hotel Capital Lease Limit or (b) enter into leases of Personal Property which do
not constitute Capital Leases in excess of the Hotel Operating Lease Limit.
Section 6.07 Investments, Loans, Future Properties. Neither the Parent
-------------------------------------
nor the Borrower shall, or shall permit any of their respective Subsidiaries to,
acquire by purchase or otherwise all or substantially all the business, property
or fixed assets of any Person or any Hotel Property, make or permit to exist any
loans, advances or capital contributions to, or make any Investments in
(including without limitation, loans and advances to, and other Investments in,
Subsidiaries), or purchase or commit to purchase any evidences of indebtedness
of, stock or other securities, partnership interests, member interests or other
interests in any Person, except the following (provided that after giving effect
thereto there shall exist no Default):
(a) the purchase of Liquid Investments with any Person which qualifies as
an Eligible Assignee;
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(b) trade and customer accounts receivable (including in connection with
the sale of used FF&E) which are for goods furnished or services rendered in the
ordinary course of business and are payable in accordance with customary trade
terms;
(c) a Future Property which qualifies as an Eligible Property or a
Permitted Non-Eligible Property;
(d) Investments in unimproved land that either (i) is under development
for operation of a Hotel Property or with respect to which such Hotel Property
development is planned to commence within twelve months of the acquisition of
such land or (ii) does not qualify under the preceding clause (i) and does not
in the aggregate have a Cost Basis which exceeds $20,000,000;
(e) Stock or Stock Equivalents (i) received in settlement of liabilities
created in the ordinary course of business, and (ii) if the Leverage Ratio on
the date of such Investment is less than or equal to 50%, then additional Stock
or Stock Equivalents of publicly-traded Unconsolidated Entities which in the
aggregate do not exceed $25,000,000;
(f) Stock, Stock Equivalents, and other Investments in Unconsolidated
Entities which are not publicly-traded Persons, and Permitted Non-Voting Stock
Investments, provided that the aggregate of all such Stock, Stock Equivalents,
Investments and Permitted Non-Voting Stock Investments shall not exceed
$50,000,000 in the aggregate without the approval of the Majority Banks;
(g) Indebtedness of a Person to the Borrower or to a Subsidiary of the
Borrower that is secured by a Lien on one or more Hotel Properties owned by such
Person, which Hotel Properties (A) were previously owned by the Borrower or a
Subsidiary of the Borrower or (B) the Borrower reasonably expects to acquire
(through trustee's sale, foreclosure, deed in lieu of foreclosure or otherwise),
provided, however, that the aggregate amount of all Investments permitted under
-------- -------
this clause (g) shall not at any time exceed an amount equal to five percent
(5%) of the Cost Basis in all the Parent's or the Parent's Subsidiaries Hotel
Properties;
(h) Investments in real estate other than Hotel Properties, provided that
--------
(i) excluding the Borrower's Investment in the office portion of the Marriott
Hotel in Houston, Texas, such Investments do not, in the aggregate, exceed five
percent (5%) of the Total Assets of the Parent or (ii) the Borrower intends to
convert such real estate into Hotel Properties, provided that the Borrower
--------
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(A) so notifies the Administrative Agent within ninety (90) days after the date
of such acquisition and (B) commences construction of such conversion within
twelve (12) months after the date of such acquisition;
(i) a loan to a Participating Lessee in amount sufficient to allow such
Participating Lessee to purchase Personal Property from the Property Owners of
the Hotel Properties which qualify as either an Eligible Property or a Permitted
Non-Eligible Property so that the ownership of Personal Property by such
Property Owners does not cause the Parent to forfeit the Parent's status as a
REIT under the Code;
(j) receivables purchased in connection with the acquisition of a Hotel
Property; and
(k) other assets owned in the ordinary course of owning the Parent's and
the Parent's Subsidiaries' Hotel Properties.
Notwithstanding the foregoing, (a) neither the Borrower, nor the Parent, nor
their respective Subsidiaries shall make an Investment which would (i) cause the
Parent Properties in the aggregate to violate in any material way the Parent
Property Requirements without the Agents' written consent, (ii) cause a Default,
or (iii) cause or result in the Borrower or the Parent failing to comply with
any of the financial covenants contained herein, and (b) neither the Borrower,
nor the Parent, nor their respective Subsidiaries shall make an Investment with
the Net Cash Proceeds from any Asset Disposition except for those Investments
for which the Parent has publicly announced as of December, 31, 1997 and the
acquisition of the Olivier House, New Orleans, Louisiana.
Section 6.08 Affiliate Transactions. Except for the Management
----------------------
Agreements, the Participating Lease Agreements, certain liquor license
agreements, the transactions described in Section 6.07(i) and the purchase by
the Borrower or one of its Subsidiaries of the Madison, Wisconsin Ramada at a
purchase price equal to or less than (a) the fair market value for such property
at the time of entering into such purchase agreement, as confirmed by an
appraisal plus (b) the costs of Capital Expenditures and FF&E for such property
incurred in connection with the major renovation of such property contemplated
by such agreement, the costs of financing such expenditures, and carrying costs
and pre-opening costs for such property during the period of construction, and
as expressly permitted elsewhere in this Agreement, the Borrower will not, and
will not permit any of its Subsidiaries to, make, directly or indirectly: (a)
any transfer, sale, lease, assignment or other disposal of any assets to any
Affiliate of the Borrower which is not a Guarantor
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or any purchase or acquisition of assets from any such Affiliate except for
sales of new Personal Property (i) which in any calendar year do not exceed
$1,000,000 in the aggregate and (ii) for which the sales price is the actual
cost to the party selling; or (b) any arrangement or other transaction directly
or indirectly with or for the benefit of any such Affiliate (including without
limitation, guaranties and assumptions of obligations of an Affiliate), other
than in the ordinary course of business and at market rates.
Section 6.09 Sale and Leaseback. The Borrower will not, and will not
------------------
permit any of its Subsidiaries to, enter into any arrangement with any Person,
whereby in contemporaneous transactions the Borrower or such Subsidiary sells
essentially all of its right, title and interest in a material asset and the
Borrower or such Subsidiary acquires or leases back the right to use such
property.
Section 6.10 Sale or Discount of Receivables. The Borrower will not, and
-------------------------------
will not permit any of its Subsidiaries to, directly or indirectly, sell with
recourse, or discount or otherwise sell for less than the face value thereof,
any of its notes or accounts receivable.
Section 6.11 No Further Negative Pledges. Except for those restrictions
---------------------------
stated in the Senior Credit Agreement, the Borrower will not, and will not
permit any of its Subsidiaries to, enter into or suffer to exist any agreement
(other than this Agreement and the Credit Documents) (a) prohibiting the
creation or assumption of any Lien upon the Properties of the Borrower or any of
its Subsidiaries (except for the Permitted Other Subsidiaries), whether now
owned or hereafter acquired, or (b) requiring an obligation to be secured if
some other obligation is or becomes secured.
Section 6.12 Franchise Agreements. The Borrower will not, nor will it
--------------------
permit any of its Subsidiaries (other than Permitted Other Subsidiaries) or any
Participating Lessee (other than as a lessee of a Permitted Non-Eligible
Property) to enter into any termination, material modification or amendment of
any Franchise Agreement except in connection with the conversion of a Hotel
Property from a Franchise Agreement with one Franchisor to a Franchise Agreement
with another Franchisor.
Section 6.13 Material Documents. The Borrower will not, nor will it
------------------
permit any of its Subsidiaries (other than Permitted Other Subsidiaries) or any
Participating Lessee (other than as a lessee of a Permitted Non-Eligible
Property) to, enter into any termination, material modification or amendment of
any:
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(a) Management Agreement;
(b) Participating Lease;
(c) Ground Lease; and
(d) Any other material agreement.
Any termination, modification or amendment prohibited under this Section 6.13
without the Administrative Agent's written consent shall, to the extent
permitted by applicable law, be void and of no force and effect.
Section 6.14 Limitations on Development, Construction, Renovation and
--------------------------------------------------------
Purchase of Hotel Properties. Neither the Parent nor the Borrower shall or
----------------------------
shall permit any of their respective Subsidiaries to engage in the development,
construction or expansion of any Hotel Properties with respect to which the cost
to complete the same shall at any time exceed $75,000,000 for all such
development, construction and expansion in the aggregate or enter into any
agreements to purchase Hotel Properties or other assets, unless the Parent, the
Borrower or such Subsidiary (as applicable) at all times has available sources
of capital equal to the total cost to complete such development or construction
and to pay in full the cost of the purchase of such Hotel Properties or other
assets (to the extent that the payment of such cost of purchase constitutes a
recourse obligation of the Parent, the Borrower or its Subsidiary), which
available sources of capital may include Advances to the extent that the
Borrower may borrow the same for the purposes required or other Indebtedness
permitted by the terms of this Agreement.
ARTICLE VII
FINANCIAL COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, or any Bank shall have any Commitment hereunder, unless the Super
Majority Banks shall otherwise consent in writing, the Borrower agrees to comply
and cause the Parent and the Parent's Subsidiaries to comply with the following
covenants.
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7.01 Interest Coverage Ratio. The Parent shall maintain at the end of each
-----------------------
Rolling Period (a) for the Rolling Periods ending on March 31, 1998 through
December 31, 1998, an Interest Coverage Ratio of not less than 2.15 to 1.0 and
(b) for any Rolling Period thereafter, an Interest Coverage Ratio of not less
than 2.50 to 1.0.
7.02 Debt Service Coverage Ratio. The Parent shall maintain at the end of
---------------------------
each Rolling Period commencing with the Rolling Period ending on March 31, 1998,
a Debt Service Coverage Ratio of not less than 2.0 to 1.0.
7.03 Maintenance of Net Worth. The Parent shall at all times maintain an
------------------------
Adjusted Net Worth of not less than the Minimum Tangible Net Worth.
7.04 Limitations on Total Indebtedness. The Parent shall not on any date
---------------------------------
permit the Total Indebtedness (including, without limitation, the Obligations
and all Capitalized Lease Obligations) of the Parent to exceed the lesser of:
------
(a) the sum of (i) for Seasoned Properties, (A) Adjusted EBITDA (on a
Consolidated basis) of such Seasoned Properties for the preceding Rolling
Period multiplied by (B) for the Rolling Periods ending on or before
-------------
September 30, 1998, six (6), and for any Rolling Periods ending thereafter,
five (5); and (ii) for New Properties (including Hotel Properties to be
immediately acquired using the proceeds from any Indebtedness), (A) the
Cost Basis in such New Properties multiplied by (B) on or before September
-------------
30, 1998, sixty percent (60%), and for any date thereafter, fifty percent
(50%); and
(b) (i) the Parent Total Cost Basis (including Hotel Properties to be
immediately acquired using the proceeds from any Indebtedness) multiplied
----------
by (ii) on or before September 30, 1998, sixty percent (60%), and for any
--
date thereafter, fifty percent (50%);
provided that, in no event shall the Borrower or the Parent permit the Total
-------- ----
Indebtedness of the Parent to exceed the amount permitted under the Articles of
Incorporation of the Parent.
7.05 Limitations on Secured Recourse Indebtedness. The Parent shall not
--------------------------------------------
on any date on a Consolidated basis permit the Secured Recourse Indebtedness of
the Parent, to exceed the lesser of:
------
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(a) the sum of (i) for Seasoned Properties, Adjusted EBITDA (on a
consolidated basis) of such Seasoned Properties for the preceding Rolling
Period multiplied by two (2), and (ii) for New Properties (including Hotel
Properties to be immediately acquired using the proceeds from any
Indebtedness), twenty percent (20%) of the Cost Basis in such New
Properties; and
(b) fifteen percent (15%) of the Parent Total Cost Basis (including
Hotel Properties to be immediately acquired using the proceeds from any
Indebtedness).
7.06 Limitations on Secured Non-Recourse Indebtedness. The Parent shall
------------------------------------------------
not on any date on a Consolidated basis permit the Secured Non-Recourse
Indebtedness of the Parent, to exceed the lesser of:
------
(a) the sum of (i) for Seasoned Properties, Adjusted EBITDA (on a
consolidated basis) of such Seasoned Properties for the preceding Rolling
Period multiplied by three (3), and (B) for New Properties (including Hotel
Properties to be immediately acquired using the proceeds from any
Indebtedness), thirty percent (30%) of the Cost Basis in such New
Properties; and
(b) thirty percent (30%) of the Parent Total Cost Basis (including
Hotel Properties to be immediately acquired using the proceeds from any
Indebtedness).
7.07 Limitations on Secured Indebtedness. The Parent shall not at any time
-----------------------------------
on a Consolidated basis permit the sum of the Parent's Secured Non-Recourse
Indebtedness and Secured Recourse Indebtedness to exceed thirty percent (30%) of
the Parent Total Cost Basis (including Hotel Properties to be immediately
acquired using the proceeds from any Indebtedness).
7.08 Permitted Non-Voting Stock Company Adjustment. If the Parent or any
---------------------------------------------
of its Subsidiaries have a Permitted Non-Voting Stock Investment, then (a) to
the extent not already included in the Adjusted EBITDA of the Parent and its
Subsidiaries the lesser of (i) the dividends and interest received by the Parent
or any of its Subsidiaries from a Permitted Non-Voting Stock Company and (ii)
the Adjusted EBITDA of the Hotel Properties owned or leased by such Permitted
Non-Voting Stock Company shall be included in Adjusted EBITDA for purposes of
the financial covenants in this
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Article VII, and (b) the Cost Basis of a Hotel Property owned by such Permitted
Non-Voting Stock Company shall be included, as applicable, in those financial
covenants in this Article VII which use Cost Basis and Parent Total Cost Basis.
Applicability for a particular test shall be based upon whether a Hotel Property
owned by such Permitted Non-Voting Stock Company constitutes either a Seasoned
Property or a New Property.
ARTICLE VII
EVENTS OF DEFAULT; REMEDIES
Section 8.01 Events of Default. The occurrence of any of the following
-----------------
events shall constitute an "Event of Default" under any Credit Document:
(a) Principal Payment. The Borrower shall fail to pay any principal of
-----------------
any Note when the same becomes due and payable as set forth in this Agreement;
(b) Interest or Other Obligation Payment. The Borrower shall fail to pay
------------------------------------
any interest on any Note or any fee or other amount payable hereunder or under
any other Credit Document when the same becomes due and payable as set forth in
this Agreement, provided however that the Borrower will have a grace period of
five days after the payments covered by this Section 8.01(b) becomes due and
payable for the first two defaults under this Section 8.01(b) in every calendar
year;
(c) Representation and Warranties. Any representation or warranty made or
-----------------------------
deemed to be made (i) by the Borrower in this Agreement or in any other Credit
Document, (ii) by the Borrower (or any of its officers) in connection with this
Agreement or any other Credit Document, or (iii) by any Subsidiary in any Credit
Document shall prove to have been incorrect in any material respect when made or
deemed to be made;
(d) Covenant Breaches. (i) The Borrower shall fail to perform or observe
-----------------
any covenant contained in Sections 5.02, 5.03, or 5.08, ▇▇▇▇▇▇▇ ▇.▇▇ (▇), (▇),
(▇), (▇), (▇) or (n), Article VI or Article VII of this Agreement or the
Borrower shall fail to perform or observe, or shall fail to cause any Guarantor
to perform or observe any covenant in any Credit Document beyond any notice
and/or cure period for such default expressly provided in such Credit Document
or (ii) the Borrower or any Guarantor shall fail to perform or observe any term
or covenant set forth in any Credit Document which is not covered by clause (i)
above or any other provision of this Section 8.01, in each case if such failure
shall remain unremedied for 30 days after the earlier of the date written notice
of such
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default shall have been given to the Borrower or such Guarantor by the
Administrative Agent or any Bank or the date a Responsible Officer of the
Borrower or any Guarantor has actual knowledge of such default, unless such
default in this clause (ii) cannot be cured in such 30 day period and the
Borrower is diligently proceeding to cure such default, in which event the cure
period shall be extended to 90 days;
(e) Cross-Defaults.
--------------
(i) any "Event of Default" as defined in the Senior Credit Agreement
shall occur; or
(ii) with respect to (A) any Secured Non-Recourse Indebtedness which
is outstanding in a principal amount of at least $20,000,000 individually
or when aggregated with all such Secured Non-Recourse Indebtedness of the
Borrower, the Parent or any of their respective Subsidiaries or (B) any
other Indebtedness (but excluding Indebtedness evidenced by the Notes)
which is outstanding in a principal amount of at least $5,000,000
individually or when aggregated with all such Indebtedness of the Borrower,
the Parent or any of their respective Subsidiaries any of the following:
(1) any such Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof,
(2) the Borrower, the Parent or any of their respective
Subsidiaries shall fail to pay any principal of or premium or interest
of any of such Indebtedness (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness, or
(3) any other event shall occur or condition shall exist under
any agreement or instrument relating to such Indebtedness, and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is
to permit the holders of such Indebtedness to accelerate the maturity
of such Indebtedness;
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(f) Insolvency. The Borrower, the Parent, any of their respective
----------
Subsidiaries, or the Participating Lessee (except for Prime Hospitality) for
four (4) or more Eligible Properties shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Borrower, the Parent, any
of their respective Subsidiaries, or the Participating Lessee (except for Prime
Hospitality) for four (4) or more Eligible Properties seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against the
Borrower, the Parent, any of their respective Subsidiaries, or the Participating
Lessee (except for Prime Hospitality) for four (4) or more Eligible Properties,
either such proceeding shall remain undismissed for a period of 60 days or any
of the actions sought in such proceeding shall occur; or the Borrower, the
Parent, any of their respective Subsidiaries, or the Participating Lessee
(except for Prime Hospitality) for four (4) or more Eligible Properties shall
take any corporate action to authorize any of the actions set forth above in
this paragraph (f);
(g) Judgments. Any judgment or order for the payment of money in excess
---------
of $5,000,000 (reduced for purposes of this paragraph for the amount in respect
of such judgment or order that a reputable insurer has acknowledged being
payable under any valid and enforceable insurance policy) shall be rendered
against the Borrower, the Parent or any of their respective Subsidiaries which,
within 30 days from the date such judgment is entered, shall not have been
discharged or execution thereof stayed pending appeal;
(h) ERISA. (i) Any Person shall engage in any "prohibited transaction"
-----
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is likely to result in the termination of such Plan for
purposes of Title IV of ERISA, unless such Reportable Event, proceedings or
appointment are being contested by the Borrower in good faith and by appropriate
proceedings, (iv) any Plan shall terminate for purposes of Title IV of ERISA,
(v) the Borrower or any member of a Controlled Group shall incur any liability
in connection with a
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withdrawal from a Multiemployer Plan or the insolvency (within the meaning of
Section 4245 of ERISA) or reorganization (within the meaning of Section 4241 of
ERISA) of a Multiemployer Plan, unless such liability is being contested by the
Borrower in good faith and by appropriate proceedings, or (vi) any other event
or condition shall occur or exist, with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all other
such events or conditions, if any, could subject the Borrower or any Guarantor
to any tax, penalty or other liabilities in the aggregate exceeding $10,000,000;
(i) Subordinate Guaranty. Any provision of any Subordinate Guaranty
--------------------
except a Supplemental Guaranty shall for any reason cease to be valid and
binding on any Guarantor or any Guarantor shall so state in writing;
(j) Environmental Indemnity. Any Environmental Indemnity shall for any
-----------------------
reason cease to be valid and binding on any Person party thereto or any such
Person shall so state in writing;
(k) Invalidity of Subordination Provisions. The provisions or documents
--------------------------------------
which provide for the subordination of any claims by a Participating Lessee
under the Participating Leases against the applicable Property Owner to the
Obligations or the Subordinate Indebtedness shall be invalidated or otherwise
cease to be in full force and effect;
(l) Franchise Agreement. With respect to any Hotel Properties owned or
-------------------
leased by the Parent or any of its Subsidiaries (i) any of the Ramada-branded
Hotel Properties contained within the Prime Hospitality portfolio (excluding
Ramada Inn - Danbury, CT and Ramada Inn - Elmsford, NY) fail to be subject to a
Franchise Agreement within 18 months from the date of acquisition, (ii) if at
the time of acquisition of any other Hotel Property such Hotel Property is
operated pursuant to a franchise or license agreement with a Person who is not a
Franchisor, then on or prior to the first anniversary (18 months for Hotel
Properties which in the aggregate at any one time have a Cost Basis of less than
or equal to $100,000,000) of the acquisition thereof such Hotel Property fails
to be converted to a Franchise Agreement with a Franchisor, and (iii) any four
(4) Franchise Agreements shall be in default at the same time;
(m) Default Under Ground Lease. The occurrence of a default under any
--------------------------
ground lease (other than a Ground Lease affecting a Permitted Non-Eligible
Property) which has not been cured or waived (i) 10 days prior to the date the
ground lessor under such ground lease would have the
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right to terminate such ground lease and (ii) in any event within 30 days of the
occurrence of such default;
(n) Manager. The Participating Lessee of a Hotel Property other than a
-------
Permitted Non-Eligible Property shall not have replaced the Manager with a
reputable, nationally known, third party manager acceptable to the Agents within
120 days of the occurrence of any of the following: Any Management Agreement
shall have been terminated except in connection with an Asset Disposition, or
any Manager shall generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Manager or any of its Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee or other similar official for it or
for any substantial part of its property and, in the case of any such proceeding
instituted against the Manager or any of its Subsidiaries, either such
proceeding shall remain undismissed for a period of 60 days or any of the
actions sought in such proceeding shall occur; or the Manager or any of its
Subsidiaries shall take any corporate action to authorize any of the actions set
forth above in this paragraph (n);
(o) Parent's REIT Status. There shall be a determination from the
--------------------
applicable Governmental Authority from which no appeal can be taken that the
Parent's tax status as a REIT has been lost;
(p) Parent Common Stock; Capitalization Event The Parent at any time
-----------------------------------------
hereafter fails to (a) cause the Parent Common Stock to be duly listed on the
New York Stock Exchange, Inc. and (b) file timely all reports required to be
filed by the Parent with the New York Stock Exchange, Inc. and the Securities
and Exchange Commission and, with respect to a failure under clause (b), such
failure remains uncured on the date which is the earlier of (i) the date 30 days
following the initial occurrence of such failure and (ii) the date specified by
the New York Stock Exchange, Inc. or the Securities and Exchange Commission as
the date such failure needs to be cured by. Upon the receipt by the Parent of
any Net Cash Proceeds from a Capitalization Event, (a) the Parent fails to
immediately make a capital contribution to the Borrower in the aggregate amount
of such Net Cash Proceeds or (b) the Borrower fails to apply such Net Cash
Proceeds in accordance with this Agreement and the Senior Credit Documents
either (i) to repay any outstanding principal of the Notes, and accrued and
unpaid interest thereon and other amounts payable by the Borrower in
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respect thereof, (ii) to repay any Senior Obligations or (iii) to make
Investments permitted by this Agreement;
(q) Changes in Ownership and Control. Any of the following occur without
--------------------------------
the written consent of the Agents: (a) the Parent owns less than 100% of the
stock and beneficial ownership interest in the General Partner and AGH LP; (b)
the General Partner and AGH LP (i) amend the Borrower's partnership agreement in
any material respect, (ii) admit a new general partner to the Borrower, or (iii)
own less than 51% of the partnership interests in and beneficial ownership of
the Borrower; (c) the General Partner resigns as general partner of the
Borrower; (d) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and their respective Associates
legally and beneficially own less than 20% of the outstanding shares of the
Manager common stock; (e) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ or any of their
respective Associates sells or assigns either the legal or beneficial interest
in any outstanding shares of the Manager common stock except to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇ or any of their respective Associates; (f) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and their respective Associates legally and
beneficially owns less than 20% of the partnership interests in AGH Leasing; (g)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or any of their respective
Associates sells or assigns either the legal or beneficial interest in any
partnership interests in AGH Leasing except to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or any of their respective Associates; (h) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or any of their respective Associates sells or assigns either
the legal or beneficial interest in the Parent or the Borrower except (1) to
their respective Associates and (2) in connection with a Permitted Officer
Assignment; (i) the Parent shall cease to employ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ as the
president and chief executive officer of the Parent and, within 180 days
following the termination of such employment of ▇▇. ▇▇▇▇▇ for any reason,
another person acceptable to the Majority Banks in their sole discretion is not
employed as the president and chief executive officer of the Parent; (j) the
Parent shall cease to employ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ as the chief financial officer of
the Parent and, within 180 days following the termination of such employment of
▇▇. ▇▇▇▇ for any reason, another person acceptable to the Majority Banks in
their sole discretion is not employed as the chief financial officer of the
Parent; (k) unless TT Leasing is no longer a Participating Lessee or has been
merged into AGH Leasing, AGH Leasing sells or assigns either the legal or
beneficial interest in any partnership interests in TT Leasing except to ▇▇▇▇▇▇
▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or any of their respective Associates
or (l) AGH Leasing, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or any of
their respective Associates is no longer the sole general partner of TT Leasing,
provided, however, TT Leasing can be merged into AGH Leasing; or
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(r) Participating Lessee. Either (i) a material default by the
--------------------
Participating Lessee shall occur under any Participating Lease related to four
(4) or more Eligible Properties which shall remain uncured following any notice
and cure period under such document, (ii) with respect to four (4) or more
Eligible Properties, the Participating Lease for any Hotel Property is
terminated, or (iii) the Participating Lessee enters into a Participating Lease
or other material agreement except those directly related to a Hotel Property
owned by the Borrower or any of the Borrower's Subsidiaries.
Section 8.02 Optional Acceleration of Maturity. If any Event of Default
---------------------------------
(other than an Event of Default pursuant to paragraph (f) of Section 8.01) shall
have occurred and be continuing, then, and in any such event,
(a) the Administrative Agent (i) shall at the request, or may with the
consent, of the Super Majority Banks, by notice to the Borrower, declare the
obligation of each Bank to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Super Majority Banks, by notice to the Borrower, declare the
Notes, all interest thereon, and all other amounts payable under this Agreement
to be forthwith due and payable, whereupon the Notes, all such interest, and all
such amounts shall become and be forthwith due and payable in full, without
presentment, demand, protest or further notice of any kind (including, without
limitation, any notice of intent to accelerate or notice of acceleration), all
of which are hereby expressly waived by the Borrower, and
(b) the Administrative Agent shall at the request of, or may with the
consent of, the Super Majority Banks proceed to enforce its rights and remedies
under the Credit Documents for the ratable benefit of the Banks by appropriate
proceedings.
Section 8.03 Automatic Acceleration of Maturity. If any Event of Default
----------------------------------
pursuant to paragraph (f) of Section 8.01 shall occur, then the obligation of
each Bank to make Advances shall immediately and automatically be terminated and
the Notes, all interest on the Notes, and all other amounts payable under this
Agreement shall immediately and automatically become and be due and payable in
full, without presentment, demand, protest or any notice of any kind (including,
without limitation, any notice of intent to accelerate or notice of
acceleration), all of which are hereby expressly waived by the Borrower.
Section 8.04 Cash Collateral Account.
-----------------------
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(a) Pledge. The Borrower hereby pledges, and grants to the Administrative
------
Agent for the benefit of the Banks, a security interest in all funds held in the
Cash Collateral Account from time to time and all proceeds thereof, as security
for the payment of the Obligations.
(b) Duty of Care. The Administrative Agent shall exercise reasonable care
------------
in the custody and preservation of any funds held in the Cash Collateral Account
and shall be deemed to have exercised such care if such funds are accorded
treatment substantially equivalent to that which the Administrative Agent
accords its own property, it being understood that the Administrative Agent
shall not have any responsibility for taking any necessary steps to preserve
rights against any parties with respect to any such funds.
Section 8.05 Non-exclusivity of Remedies. No remedy conferred upon the
---------------------------
Administrative Agent or the Banks is intended to be exclusive of any other
remedy, and each remedy shall be cumulative of all other remedies existing by
contract, at law, in equity, by statute or otherwise.
Section 8.06 Right of Set-off. Upon (a) the occurrence and during the
----------------
continuance of any Event of Default and (b) the making of the request or the
granting of the consent, if any, specified by Section 8.02 to authorize the
Administrative Agent to declare the Notes and any other amount payable hereunder
due and payable pursuant to the provisions of Section 8.02 or the automatic
acceleration of the Notes and all amounts payable under this Agreement pursuant
to Section 8.03, each Bank is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Bank to or for the credit
or the account of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement, the Note held by such
Bank, and the other Credit Documents, irrespective of whether or not such Bank
shall have made any demand under this Agreement, such Note, or such other Credit
Documents, and although such obligations may be unmatured. Each Bank agrees to
promptly notify the Borrower after any such set-off and application made by such
Bank, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Bank under this
Section are in addition to any other rights and remedies (including, without
limitation, other rights of set-off) which such Bank may have.
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ARTICLE IX
AGENCY PROVISIONS
Section 9.01 Authorization and Action. Each Bank hereby appoints and
------------------------
authorizes each Agent to take such action as Agent on its behalf and to exercise
such powers under this Agreement and the other Credit Documents as are delegated
to such Agent by the terms hereof and of the other Credit Documents, together
with such powers as are reasonably incidental thereto. As to any matters not
expressly provided for by this Agreement or any other Credit Document
(including, without limitation, enforcement or collection of the Notes), the
Agents shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Majority
Banks, and such instructions shall be binding upon all Banks and all holders of
Notes; provided, however, that neither Agent shall be required to take any
--------
action which exposes such Agent to personal liability or which is contrary to
this Agreement, any other Credit Document, or applicable law. The functions of
the Agents are administerial in nature and in no event shall the Agents have a
fiduciary or trustee relation in respect of any Bank by reason of this Agreement
or any other Credit Document. Within 5 Business Days of the Administrative
Agent receiving actual notice (without any duty to investigate) of a Default,
the Administrative Agent will provide written notice of such Default to the
Banks.
Section 9.02 Agents' Reliance, Etc. Neither the Agents nor any of their
---------------------
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken (including such Person's own negligence) by
it or them under or in connection with this Agreement or the other Credit
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, each Agent: (a) may
treat the payee of any Note as the holder thereof until such Agent receives
written notice of the assignment or transfer thereof signed by such payee and in
form satisfactory to the Administrative Agent; (b) may consult with legal
counsel (including counsel for the Borrower), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Bank and shall not be responsible to any Bank for any statements, warranties or
representations made in or in connection with this Agreement or the other Credit
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or any other Credit Document on the part of
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the Borrower or its Subsidiaries or to inspect the property (including the books
and records) of the Borrower or its Subsidiaries; (e) shall not be responsible
to any Bank for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Credit
Document; and (f) shall incur no liability under or in respect of this Agreement
or any other Credit Document by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopier, telegram, cable or
telex) believed by it to be genuine and signed or sent by the proper party or
parties.
Section 9.03 Each Agent and Its Affiliates. With respect to its
-----------------------------
Commitment, the Advances made by it and the Notes issued to it, each Agent shall
have the same rights and powers under this Agreement as any other Bank and may
exercise the same as though it were not an Agent. The term "Bank" or "Banks"
shall, unless otherwise expressly indicated, include each Agent in its
individual capacity. Each Agent and its Affiliates may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with, the Borrower or any of its Subsidiaries, and any Person
who may do business with or own securities of the Borrower or any such
Subsidiary, all as if such Agent were not an Agent hereunder and without any
duty to account therefor to the Banks.
Section 9.04 Bank Credit Decision. Each Bank acknowledges that it has,
--------------------
independently and without reliance upon either Agent or any other Bank and based
on the financial statements referred to in Section 4.06 and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it
will, independently and without reliance upon either Agent or any other Bank and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.
Section 9.05 Indemnification. The Banks severally agree to indemnify
---------------
each Agent (to the extent not reimbursed by the Borrower), according to their
respective Pro Rata Shares from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against such Agent in any way relating to or
arising out of this Agreement or any action taken or omitted by such Agent under
this Agreement or any other Credit Document (including such Agent's own
negligence), provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. Without limitation of the
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foregoing, each Bank agrees to reimburse each Agent promptly upon demand for its
Pro Rata Share of any out-of-pocket expenses (including counsel fees) incurred
by such Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or any other Credit Document,
to the extent that such Agent is not reimbursed for such expenses by the
Borrower.
Section 9.06 Successor Agent. Either Agent may resign at any time by
---------------
giving written notice thereof to the Banks and the Borrower and may be removed
at any time with cause by the Super Majority Banks upon receipt of written
notice from the Super Majority Banks to such effect. Upon receipt of notice of
any such resignation or removal, the Super Majority Banks shall have the right
to appoint a successor Agent. If no successor Agent shall have been so
appointed, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation or the Super Majority Banks'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Banks and the Borrower, appoint a successor Agent, which shall be a commercial
bank meeting the financial requirements of an Eligible Assignee. Upon the
acceptance of any appointment as Agent by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement and the other
Credit Documents. After any retiring Agent's resignation or removal hereunder as
Documentation Agent or Administrative Agent, the provisions of this Article IX
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was such Agent under this Agreement and the other Credit Documents.
Section 9.07 Arranger, Syndication Agent and Managing Agents. The Bank
-----------------------------------------------
of Nova Scotia and ▇▇▇▇▇ Fargo Bank, National Association shall each be named a
Managing Agent under the Credit Documents, but the Managing Agents shall have no
right or duty to act as agent on behalf of the Banks. Societe Generale,
Southwest Agency shall be named Arranger and Syndication Agent under the Credit
Documents, but the Arranger and the Syndication Agent shall have no right or
duty to act as agent on behalf of the Banks in such capacities; provided that
the provisions of this sentence shall in no way effect Societe Generale,
Southwest Agency's rights or duties as Documentation Agent on behalf of the
Banks.
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ARTICLE X
SUBORDINATION
Section 10.01 Subordination. The payment of any Obligations (including
-------------
interest accruing after the filing of a petition initiating any proceeding
pursuant to any bankruptcy law with respect to the Borrower as debtor) is
subordinated to the payment of any Senior Obligations, as the Senior Obligations
may be amended, renewed, extended, increased, substituted, refinanced,
restructured, replaced, supplemented or otherwise modified from time to time;
provided that the aggregate principal amount and face amount of outstanding
--------
letters of credit under the Senior Credit Agreement which shall be senior to the
Obligations shall not exceed $500,000,000.00 on the terms and conditions
contained in this Article X.
Section 10.02 Payment Blockage. No payment by the Borrower on the
----------------
Obligations (whether pursuant to the terms of the Obligations or upon
acceleration or otherwise) shall be made if, at the time of any such payment,
there exists a default in the payment of any Senior Obligations (a "Senior
Payment Default"), and such Senior Payment Default shall not have been cured or
waived by or on behalf of the holders of such Senior Obligations. In addition,
during the continuance of the breach of any provision in Article VII of the
Senior Credit Agreement ("Financial Covenant Default"), upon the giving by the
Senior Administrative Agent of written notice to the Administrative Agent of
such breach, no such payment may be made by the Borrower upon the Obligations
for a period (the "Blockage Period") commencing on the date of the giving of
such notice and ending 180 days after the date of the giving of such notice.
Not more than one Blockage Period may be commenced with respect to the
Obligations during any period of 360 consecutive days. No Financial Covenant
Default which existed or was continuing on the date of commencement of any
Blockage Period shall be, or be made, the basis for commencement of a second
Blockage Period whether within or without a period of 360 consecutive days
unless such Financial Covenant Default shall have been cured for a period of not
less than 30 consecutive days or waived. During any period in which payments on
the Obligations are not restricted pursuant to this Section 10.02, the holders
of the Obligations shall be entitled to receive payments in accordance with the
terms of the Obligations, including any payments that were previously restricted
in accordance with this Section 10.02.
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Section 10.03 Remedy Blockage.
---------------
(a) At any time when any Senior Obligations remain outstanding, the
holders of the Obligations will not have any of the following rights: (i) to
demand, ▇▇▇ for or take from the Borrower, by set-off or in any other manner,
any moneys which may then or thereafter be owing by the Borrower on the
Obligations, (ii) to commence, or to join with any Person in commencing, any
suit, action or proceeding against the Borrower (A) to enforce payment of or to
collect all or any portion of the Obligations or (B) to commence judicial
enforcement of any of the rights and remedies under the documents or instruments
governing the Obligations or applicable law, (iii) to accelerate the principal
of or interest on or any other amount under the Obligations, or (iv) as a holder
of the Obligations, to commence, or to join with any Person in commencing,
against Borrower or any of its property a bankruptcy, reorganization,
insolvency, receivership or other similar proceeding (each of the foregoing a
"Remedial Action") until the earlier of:
1. the commencement by the Senior Administrative Agent or any holder
of the Senior Obligations of any Remedial Action;
2. the commencement of a liquidation or dissolution proceeding with
respect to the Borrower or a bankruptcy, reorganization, insolvency,
receivership, or other similar proceeding with respect to the Borrower or
any of its property; or
3. the occurrence of an Event of Default and the continuance thereof
unwaived for 360 days.
(b) Notwithstanding the foregoing, the holders of the Obligations and the
Administrative Agent may (i) charge interest at a default rate, (ii) ▇▇▇ for
specific performance, but not for damages or other sums of money, or obtain
injunctive relief, in either case, in respect of the covenants of the
Obligations which do not require, directly or indirectly, the payment by the
Borrower of money, (iii) give notices and file law suits to prevent the running
of the relevant statute of limitations, pursue rights in bankruptcy,
reorganization, insolvency, receivership, or other similar proceedings, and
otherwise protect legal rights and (iv) send notices of default under the Credit
Agreement.
Section 10.04 Certain Distributions. Upon any distribution to creditors
---------------------
of the Borrower in a liquidation or dissolution of the Borrower or in a
bankruptcy, reorganization, insolvency, receivership, or other similar
proceeding with respect to the Borrower or any of its property, (a) the
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holders of the Senior Obligations will be entitled to receive payment in full in
cash, or to have such payment duly provided for in cash, of all amounts payable
under or in respect of the Senior Obligations (including interest accrued after
the commencement of such proceeding) before the holders of the Obligations will
be entitled to receive from the Borrower or its assets any payment under or in
respect of the Obligations and (b) until the holders of the Senior Obligations
have received such payment in full in cash, or such payment is duly provided for
in cash, any distribution from the Borrower or its assets to which the holders
of the Obligations would otherwise be entitled will be made to the holders of
the Senior Obligations (or one or more trustees or representatives acting on
their behalf). Subject to the prior payment in full in cash of all Senior
Obligations (or provision made for payment in full in cash of all Senior
Obligations), the holders of the Obligations shall be subrogated to the rights
of the holders of the Senior Obligations to receive payments or distribution of
assets of the Borrower applicable to the Senior Obligations until all amounts
owing on the Obligations shall be paid in full.
Section 10.05 Payment in Trust. The Administrative Agent and each of the
----------------
Banks (or a trustee, representative, or agent acting on their behalf) will be
obligated to hold in trust for, and to pay over promptly to, the holders of the
Senior Obligations (or one or more trustees, representatives, or agents acting
on their behalf) all payments and distributions received by the Administrative
Agent or such Bank in contravention of the restrictions contained in this
Article X; provided, however, that notwithstanding such restrictions, the
Administrative Agent and the Banks shall be entitled to receive and to retain
any and all payments (a) made in securities of the Borrower provided the same
are subordinated to the Senior Obligations at least to the same extent as the
Obligations or (ii) made in accordance with any relevant court order respecting
the subordination provided for herein.
Section 10.06 Liens. The Administrative Agent and the Banks will not
-----
create, assume, or suffer to exist any Lien securing the repayment of the
Obligations. Any such Lien existing in violation of the foregoing shall be
fully subordinate to any Lien in favor of the Senior Administrative Agent or
the Senior Creditors which secures any of the Senior Obligations. At the
request of the Senior Administrative Agent, the Administrative Agent, the Banks,
and the Borrower will take any and all steps necessary to fully effect the
release of any such Lien.
Section 10.07 Miscellaneous.
-------------
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(a) The Administrative Agent, the Banks, and the Borrower agree to execute
any and all other instruments requested by the Senior Administrative Agent to
further evidence the subordination of the Obligations to the Senior Obligations
as herein provided.
(b) The provisions of this Article X are irrevocable and the Senior
Administrative Agent and the Senior Creditors may, without notice to any of the
parties hereto and without impairing or releasing the obligations of the
Borrower, the Administrative Agent, and the Banks hereunder, (i) create Senior
Obligations by extending credit under the Senior Credit Agreement; (ii) subject
to the limitation on total principal contained in Section 10.01, change the
terms of or increase the amount of the Senior Obligations by increasing,
extending, rearranging, amending, supplementing, or otherwise modifying any
instrument or agreement creating Senior Obligations; (iii) sell, exchange,
release, or otherwise deal with any collateral securing any Senior Obligations;
(iv) release anyone, including the Borrower or any guarantor, liable in any
manner for the payment or collection of any Senior Obligations; (v) exercise or
refrain from exercising any rights against the Borrower or any other Person; and
(vi) apply any sums received by any Senior Creditor, from whatever source, to
the payment of the Senior Obligations.
(c) The foregoing provisions will be enforceable against the
Administrative Agent and the Banks, by or on behalf of the holders of the Senior
Obligations and such holders are intended third party beneficiaries of this
Article X.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Amendments, Etc. No amendment or waiver of any provision of
---------------
this Agreement, the Notes, or any other Credit Document, nor consent to any
departure by the Borrower or any Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Documentation
Agent, the Administrative Agent or the Agents, as specified in the particular
provisions of the Credit Documents, and the Borrower, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment shall increase the
--------
Commitment of any Bank without the written consent of such Bank, and no
amendment, waiver or consent shall, unless in writing and signed by all the
Banks, do any of the following: (a) increase the aggregate Commitments of the
Banks,
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(b) reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder or under any other Credit Document or otherwise
release the Borrower from any Obligations, (c) postpone any date fixed for any
payment of principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, (d) change the number of Banks which shall be required for
the Banks or any of them to take any action hereunder or under any other Credit
Document, (e) amend this Section 11.01, (f) amend the definition of "Majority
Banks" or "Super Majority Banks", (g) amend the definition of "Total
Availability", but not the definitions that are used in the definition of "Total
Availability", (h) release the Parent from its obligations under the Subordinate
Guaranty or (i) amend the provisions of Article X; and provided, further, that
--------
no amendment, waiver or consent shall, unless in writing and signed by the
Documentation Agent or the Administrative Agent, in addition to the Banks
required above to take such action, affect the rights or duties of the
Documentation Agent or the Administrative Agent, as the case may be, under this
Agreement or any other Credit Document. In addition, none of the following
decisions shall be made without the written consent of the Super Majority Banks:
(a) release any Guarantor except the Parent from its obligations
under any of the Subordinate Guaranties (provided that the Administrative
Agent can (i) release any Supplemental Guarantor from its obligations under
any of the Supplemental Guaranties and (ii) if no Default then exists,
release any Subsidiary of the Borrower which no longer is a Property Owner
of an Eligible Property);
(b) release any Person from its obligations under any of the
Environmental Indemnities;
(c) any determination to make a Borrowing after the occurrence and
during the continuance of an Event of Default;
(d) increases the maximum duration of Interest Periods permitted
under this Agreement;
(e) any waiver for a period of more than 60 days of, or any material
amendment to, the financial covenants contained in Article VII of this
Agreement;
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(f) any material waiver of the covenants contained in Sections 6.01,
6.02 or 6.04;
(g) amends any of the definitions that are used in the definition of
"Total Availability";
(h) any amendment, supplement or modification to, or waiver of, the
provisions of Section 8.01 of this Agreement;
(i) any determination to send notice to the Borrower of, or otherwise
declare, an Event of Default pursuant to Section 8.01 of this Agreement;
(j) any determination to accelerate the Obligations pursuant to
Section 8.02 of this Agreement; and
(k) any exercise remedies under any Credit Document, provided,
however, that if an Event of Default has occurred and is continuing and the
Super Majority Banks cannot agree on a course of action within 60 days
following the occurrence of such Event of Default, the Administrative Agent
shall commence exercising remedies against the Borrower, the Parent and the
other Guarantors.
In addition, none of the following decisions shall be made without the written
consent of the Majority Banks:
(a) any waiver for more than 30 days of, or any material amendment
to, of the reporting requirements set forth in clauses (a)-(f) or (h) of
Section 5.05 of this Agreement;
(b) any material waiver of, or any material amendment to any section
of Article VI not previously referenced in this Section 11.01; and
(c) any material decision regarding the operation, maintenance, sale
or other disposition of any Property after the foreclosure upon such
Property, provided that Administrative Agent shall be able to take any
action it determines necessary to preserve or
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maintain any such Property and provided further that if the Majority Banks
cannot agree on the sale or disposition of such Property, the
Administrative Agent shall not sell or dispose of such Property, but shall
continue to hold such Property for the benefit of the Banks.
Any amendment to a covenant of the Parent or any of its Subsidiaries or
amendment to a definition shall require the Borrower's written consent.
Section 11.02 Notices, Etc. All notices and other communications shall be
------------
in writing (including telecopy or telex) and mailed, telecopied, telexed, hand
delivered or delivered by a nationally recognized overnight courier, if to the
Borrower, at its address at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇; if to any Bank at its Domestic Lending Office
specified opposite its name on Schedule 11.02; if to the Documentation Agent, at
its address at 4900 ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. Day, Vice President (telecopy: (▇▇▇) ▇▇▇-▇▇▇▇; telephone:
(▇▇▇) ▇▇▇-▇▇▇▇); if to Bank One, Texas, N.A., in its capacity as Administrative
Agent, at its office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: Commercial Real Estate Department - ▇▇▇▇ ▇▇▇▇▇, Vice President
(telecopy: (▇▇▇) ▇▇▇-▇▇▇▇; telephone: (▇▇▇) ▇▇▇-▇▇▇▇); or, as to each party, at
such other address or teletransmission number as shall be designated by such
party in a written notice to the other parties. All such notices and
communications shall, when mailed, telecopied, telexed or hand delivered or
delivered by overnight courier, be effective three days after deposited in the
mails, when telecopy transmission is completed, when confirmed by telex answer-
back or when delivered, respectively, except that notices and communications to
the Administrative Agent pursuant to Article II or Article IX shall not be
effective until received by the Administrative Agent.
Section 11.03 No Waiver; Remedies. No failure on the part of any Bank or
-------------------
any Agent to exercise, and no delay in exercising, any right hereunder or under
any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies provided in this Agreement and the
other Credit Documents are cumulative and not exclusive of any remedies provided
by law.
Section 11.04 Costs and Expenses. The Borrower agrees to pay on demand
------------------
all out-of-pocket costs and expenses of the Agents in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Agreement, the Notes and the other Credit Documents and syndication
(syndication costs shall not exceed $5,000 per Eligible Assignee) of the
Obligations including, without limitation, (a) the reasonable fees and out-of-
pocket expenses of
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▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P., counsel for the Documentation Agent, and, with
respect to advising either Agent as to its rights and responsibilities under
this Agreement, the Agents, (b) the reasonable fees and out-of-pocket expenses
of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., counsel for the Administrative Agent, and
(c) all reasonable out-of-pocket costs and expenses, if any, of each Agent and
each Bank (including, without limitation, reasonable counsel fees and expenses
of each Agent and each Bank) in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement and the other
Credit Documents, and (d) to the extent not included in the foregoing, the costs
of any local counsel, travel expenses, Engineering Reports, Environmental
Reports, and any title or Uniform Commercial Code search costs, any flood plain
search costs, insurance consultant costs and other costs usual and customary in
connection with a credit facility of this type.
Section 11.05 Binding Effect. This Agreement shall become effective when
--------------
it shall have been executed by the Borrower and the Agents, and when the
Documentation Agent shall have, as to each Bank, either received a counterpart
hereof executed by such Bank or been notified by such Bank that such Bank has
executed it and thereafter shall be binding upon and inure to the benefit of the
Borrower, each Agent, and each Bank and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights or
delegate its duties under this Agreement or any interest in this Agreement
without the prior written consent of each Bank.
Section 11.06 Bank Assignments and Participations.
-----------------------------------
(a) Assignments. Any Bank may assign to one or more banks or other
-----------
entities all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment, the Advances
owing to it, the Notes held by it); provided, however, that (i) each such
-------- -------
assignment shall be of a constant, and not a varying, percentage of all of such
Bank's rights and obligations under this Agreement and shall involve a ratable
assignment of such Bank's Commitment and such Bank's Advances, (ii) the amount
of the resulting Commitment and Advances of the assigning Bank (unless it is
assigning all its Commitment) and the assignee Bank pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000 and shall
be an integral multiple of $1,000,000, (iii) each such assignment shall be to an
Eligible Assignee, (iv) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with the Notes subject to such
assignment, (v) the Agents shall consent to such assignment, which consent shall
not be unreasonably withheld
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or delayed, and (vi) each Eligible Assignee (other than the Eligible Assignee of
either Agent or an Eligible Assignee which is an Affiliate of the assigning
Bank) shall pay to the Administrative Agent a $2,500 administrative fee. Upon
such execution, delivery, acceptance and recording, from and after the effective
date specified in each Assignment and Acceptance, which effective date shall be
at least three Business Days after the execution thereof, (A) the assignee
thereunder shall be a party hereto for all purposes and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder
and (B) such Bank thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of such Bank's rights and obligations under this Agreement, such Bank
shall cease to be a party hereto). Notwithstanding anything herein to the
contrary, any Bank may assign, as collateral or otherwise, any of its rights
under the Credit Documents to any Federal Reserve Bank.
(b) Term of Assignments. By executing and delivering an Assignment and
-------------------
Acceptance, the Bank thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency of
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
Guarantors or the performance or observance by the Borrower or the Guarantors of
any of their obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Sections 4.06 and 5.05, if applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon either Agent, such Bank
or any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to such Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and (vi)
such assignee agrees that it will perform in accordance with their terms
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all of the obligations which by the terms of this Agreement are required to be
performed by it as a Bank.
(c) The Register. The Administrative Agent shall maintain at its address
------------
referred to in Section 11.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Banks and the Commitments of, and principal amount of the
Advances owing to, each Bank from time to time (the "Register"). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, each Agent, and the Banks may treat each Person whose
name is recorded in the Register as a Bank hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or
any Bank at any reasonable time and from time to time upon reasonable prior
notice.
(d) Procedures. Upon its receipt of an Assignment and Acceptance executed
----------
by a Bank and an Eligible Assignee, together with the Note subject to such
assignment, the Administrative Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of the attached Exhibit B,
(i) accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register, and (iii) give prompt notice thereof to the Borrower.
Within five Business Days after its receipt of such notice, the Borrower, at its
own expense, shall execute and deliver to the Administrative Agent in exchange
for the surrendered Note, a new Note payable to the order of such Eligible
Assignee in amount equal to, respectively, the Commitment and the outstanding
Advances assumed by it pursuant to such Assignment and Acceptance, and if the
assigning Bank has retained any Commitment hereunder, a new Note payable to the
order of such Bank in an amount equal to, respectively, the Commitment and the
outstanding Advances retained by it hereunder. Such new Note shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of the attached Exhibit A.
(e) Participations. Each Bank may sell participations to one or more banks
--------------
or other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it, and the Notes held by it); provided,
--------
however, that (i) such Bank's obligations under this Agreement (including,
-------
without limitation, its Commitment to the Borrower hereunder) shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Bank shall remain the
holder of any such Note for all purposes of this Agreement, (iv) the Borrower,
each Agent, and the other Banks shall continue to deal solely and directly with
such Bank
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in connection with such Bank's rights and obligations under this Agreement, (v)
such Bank shall not require the participant's consent to any matter under this
Agreement, except for change in the principal amount of any Note in which the
participant has an interest, reductions in fees or interest, or extending the
Maturity Date except as permitted in this Agreement, and (vi) such Bank shall
give prompt notice to the Borrower of each such participation sold by such Bank.
The Borrower hereby agrees that participants shall have the same rights under
Sections 2.08, 2.09, 2.11(c), and 11.07 hereof as the Bank to the extent of
their respective participations.
(f) Confidentiality. Each Bank may furnish any information concerning the
---------------
Borrower and its Subsidiaries in the possession of such Bank from time to time
to assignees and participants (including prospective assignees and
participants); provided that, prior to any such disclosure, the assignee or
--------
participant or proposed assignee or participant shall agree in writing to
preserve the confidentiality of any confidential information relating to the
Borrower and its Subsidiaries received by it from or on behalf of such Bank.
Such Bank shall promptly deliver a signed copy of any such confidentiality
agreement to the Borrower.
Section 11.07 Indemnification. The Borrower shall indemnify each Agent,
---------------
the Banks (including any lender which was a Bank hereunder prior to any full
assignment of its Commitment), and each affiliate thereof and their respective
directors, officers, employees and agents from, and discharge, release, and hold
each of them harmless against, any and all losses, liabilities, claims or
damages to which any of them may become subject, insofar as such losses,
liabilities, claims or damages arise out of or result from (i) any actual or
proposed use by the Borrower or any Affiliate of the Borrower of the proceeds of
any Advance, (ii) any breach by the Borrower or any Guarantor of any provision
of this Agreement or any other Credit Document, (iii) any investigation,
litigation or other proceeding (including any threatened investigation or
proceeding) relating to the foregoing, or (iv) any Environmental Claim or
requirement of Environmental Laws concerning or relating to the present or
previously-owned or operated properties, or the operations or business, of the
Borrower or any of its Subsidiaries, and the Borrower shall reimburse each Agent
and each Bank, and each affiliate thereof and their respective directors,
officers, employees and agents, upon demand for any reasonable out-of-pocket
expenses (including legal fees) incurred in connection with any such
investigation, litigation or other proceeding; and expressly including any such
losses, liabilities, claims, damages, or expense incurred by reason of the
Person being indemnified's own negligence, but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified.
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THE BORROWER ACKNOWLEDGES AND AGREES THAT CERTAIN OF ITS OBLIGATIONS AND
INDEMNITIES UNDER THIS AGREEMENT INCLUDE ANY CLAIMS RESULTING FROM THE
NEGLIGENCE OR ALLEGED NEGLIGENCE OF THE DOCUMENTATION AGENT, THE ADMINISTRATIVE
AGENT, THE BANKS, OR ANY OTHER PERSON BEING INDEMNIFIED.
Section 11.08 Execution in Counterparts. This Agreement may be executed
-------------------------
in any number of counterparts and by different 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.
Section 11.09 Survival of Representations, Indemnifications, etc. All
--------------------------------------------------
representations, warranties contained in this Agreement or made in writing by or
on behalf of the Borrower in connection herewith shall survive the execution and
delivery of this Agreement and the Credit Documents, the making of the Advances
and any investigation made by or on behalf of the Banks, none of which
investigations shall diminish any Bank's right to rely on such representations
and warranties. All obligations of the Borrower provided for in Sections 2.08,
2.09, 2.11(c), 9.05 and 11.07 shall survive any termination of this Agreement
and repayment in full of the Obligations.
Section 11.10 Severability. In case one or more provisions of this
------------
Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
not be affected or impaired thereby.
Section 11.11 Business Loans. The Borrower warrants and represents that
--------------
the Advances evidenced by the Notes are and shall be for business, commercial,
investment or other similar purposes and not primarily for personal, family,
household or agricultural use, as such terms are used in Chapter One of the
Texas Credit Code. For purposes of determining the Maximum Rate under the
applicable laws of the State of Texas, the applicable rate ceiling shall be the
indicated rate ceiling computed in accordance with Article 5069-1H of the Texas
Revised Civil Statutes, if applicable, and, if Article 5069-1H is not
applicable, then Article 5069-1D of the Texas Revised Civil Statutes; provided
that, to the extent permitted by applicable laws and subject to any notice or
other requirements under applicable laws, the Administrative Agent may from time
to time change the rate ceiling; and provided, further, that the "Maximum Rate"
for purposes of this Agreement shall not be limited to the applicable rate
ceiling under Article 5069-1D or Article 5069-1H if the United
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States federal law or Texas law now or hereafter in effect and applicable to
this Agreement (and the interest contracted for, charged and collected
hereunder) shall permit a higher rate of interest.
Section 11.12 Usury Not Intended. It is the intent of the Borrower and
------------------
each Bank in the execution and performance of this Agreement and the other
Credit Documents to contract in strict compliance with applicable usury laws,
including conflicts of law concepts, governing the Advances of each Bank
including such applicable laws of the State of Texas and the United States of
America from time to time in effect. In furtherance thereof, the Banks and the
Borrower stipulate and agree that none of the terms and provisions contained in
this Agreement or the other Credit Documents shall ever be construed to create a
contract to pay, as consideration for the use, forbearance or detention of
money, interest at a rate in excess of the Maximum Rate and that for purposes
hereof "interest" shall include the aggregate of all charges which constitute
interest under such laws that are contracted for, charged or received under this
Agreement; and in the event that, notwithstanding the foregoing, under any
circumstances the aggregate amounts taken, reserved, charged, received or paid
on the Advances, include amounts which by applicable law are deemed interest
which would exceed the Maximum Rate, then such excess shall be deemed to be a
mistake and each Bank receiving same shall credit the same on the principal of
its Notes (or if such Notes shall have been paid in full, refund said excess to
the Borrower). In the event that the maturity of the Notes is accelerated by
reason of any election of the holder thereof resulting from any Event of Default
under this Agreement or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest may never include
more than the Maximum Rate and excess interest, if any, provided for in this
Agreement or otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited on the
applicable Notes (or, if the applicable Notes shall have been paid in full,
refunded to the Borrower). The provisions of this Section shall control over all
other provisions of this Agreement or the other Credit Documents which may be in
apparent conflict herewith.
Section 11.13 Certain Office and Retail Space. The Banks acknowledge and
-------------------------------
agree that the office portion of the Houston, Texas Marriott and the retail
portion of the St. Tropez hotel in Las Vegas, Nevada (a) will or may not be
subject to a Participating Lease, Franchise Agreement or Management Agreement,
(b) will be included in the calculation of the Total Availability, and (c) may
be sold or transferred separately from the hotel portion of such Hotel Property
in accordance with the requirements of a Permitted Hotel Sale. If in connection
with any such sale or transfer, the office or retail, as applicable, portions
and hotel portions of such Hotel Property need to enter into
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any agreements pertaining to the joint use of facilities, such agreements will
be subject to the reasonable approval of the Documentation Agent.
Section 11.14 Governing Law. This Agreement, the Notes and the other
-------------
Credit Documents shall be governed by, and construed and enforced in accordance
with, the laws of the State of Texas.
Section 11.15 Consent to Jurisdiction. The Borrower hereby irrevocably
-----------------------
submits to the jurisdiction of any Texas state or federal court sitting in
Dallas, Texas in any action or proceeding arising out of or relating to this
Agreement, the Notes and the other Credit Documents, and the Borrower hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such court. The Borrower hereby irrevocably waives,
to the fullest extent it may effectively do so, any right it may have to the
defense of an inconvenient forum to the maintenance of such action or
proceeding. The Borrower hereby agrees that service of copies of the summons
and complaint and any other process which may be served in any such action or
proceeding may be made by mailing or delivering a copy of such process to the
Borrower at its address specified in Section 11.02. The Borrower agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section shall affect the rights of any Bank,
the Documentation Agent, or the Administrative Agent to serve legal process in
any other manner permitted by the law or affect the right of any Bank, the
Documentation Agent or the Administrative Agent to bring any action or
proceeding against the Borrower or its Property in the courts of any other
jurisdiction.
Section 11.16 Knowledge of Borrower. For purposes of this Agreement,
---------------------
"knowledge of the Borrower" means the actual knowledge of any of the executive
officers and all other Responsible Officers of the Parent or the general manager
of each Hotel Property except the general manager for those Hotel Properties for
which Prime Hospitality is the Participating Lessee.
Section 11.17 Banks Not in Control. None of the covenants or other
--------------------
provisions contained in the Credit Documents shall or shall be deemed to, give
the Banks the rights or power to exercise control over the affairs and/or
management of the Borrower, any of its Subsidiaries or any Guarantor, the power
of the Banks being limited to the right to exercise the remedies provided in the
Credit Documents; provided, however, that if any Bank becomes the owner of any
stock, or other equity interest in, any Person whether through foreclosure or
otherwise, such Bank shall be entitled
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(subject to requirements of law) to exercise such legal rights as it may have by
being owner of such stock, or other equity interest in, such Person.
Section 11.18 Headings Descriptive. The headings of the several Sections
--------------------
and paragraphs of the Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
Section 11.19 Time is of the Essence. Time is of the essence under the
----------------------
Credit Documents.
SECTION 11.20 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE
---------------------
BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER CREDIT DOCUMENT
OR TO ANY COUNTERCLAIM THEREIN.
SECTION 11.21 ENTIRE AGREEMENT. PURSUANT TO SECTION 26.02 OF THE TEXAS
----------------
BUSINESS AND COMMERCE CODE, A LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED IN THE
LOAN AGREEMENT EXCEEDS $50,000 IN VALUE IS NOT ENFORCEABLE UNLESS THE LOAN
AGREEMENT IS IN WRITING AND SIGNED BY THE PARTY TO BE BOUND OR THAT PARTY'S
AUTHORIZED REPRESENTATIVE.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO AN AGREEMENT SUBJECT TO THE
PRECEDING PARAGRAPH SHALL BE DETERMINED SOLELY FROM THE WRITTEN LOAN AGREEMENT,
AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED
INTO THE LOAN AGREEMENT. THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS, AS
DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
THE BORROWER ACKNOWLEDGES AND AGREES THAT CERTAIN OF ITS OBLIGATIONS AND
INDEMNITIES UNDER THIS AGREEMENT INCLUDE ANY CLAIMS RESULTING FROM THE
NEGLIGENCE OR ALLEGED NEGLIGENCE OF
-109-
THE DOCUMENTATION AGENT, THE ADMINISTRATIVE AGENT, THE BANKS, OR ANY OTHER
PERSON BEING INDEMNIFIED.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-110-
[SIGNATURE PAGE OF SUBORDINATE UNSECURED CREDIT AGREEMENT]
EXECUTED as of the date first referenced above.
BORROWER:
--------
AMERICAN GENERAL HOSPITALITY
OPERATING PARTNERSHIP, L.P.
By: AGH GP, Inc., its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Title: EXECUTIVE VICE PRESIDENT
-------------------------------
[SIGNATURE PAGE OF SUBORDINATE UNSECURED CREDIT AGREEMENT]
BANK ONE, TEXAS, N.A., individually and
as Administrative Agent
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Title: VICE PRESIDENT
-----------------------------------
SOCIETE GENERALE, SOUTHWEST AGENCY,
individually and as Arranger, Syndication Agent,
and Documentation Agent
_________________________________________
By:______________________________________
Title:___________________________________
[SIGNATURE PAGE OF SUBORDINATE UNSECURED CREDIT AGREEMENT]
BANK ONE, TEXAS, N.A., individually and
as Administrative Agent
_________________________________________
By:______________________________________
Title:___________________________________
SOCIETE GENERALE, SOUTHWEST AGENCY,
individually and as Arranger, Syndication Agent,
and Documentation Agent
/s/ ▇▇▇▇▇▇ ▇. Day
-----------------------------------------
By: ▇▇▇▇▇▇ ▇. DAY
--------------------------------------
Title: VICE PRESIDENT
-----------------------------------
[SIGNATURE PAGE OF SUBORDINATE UNSECURED CREDIT AGREEMENT]
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, individually and as Managing Agent
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Title: VICE PRESIDENT
----------------------------------
$100,000,000.00
SUBORDINATE UNSECURED CREDIT AGREEMENT
AMONG AMERICAN GENERAL HOSPITALITY OPERATING PARTNERSHIP, L.P.,
as the Borrower
SOCIETE GENERALE, SOUTHWEST AGENCY, as Arranger, Syndication Agent and
Documentation Agent,
BANK ONE, TEXAS, N.A., as Administrative Agent,
THE BANK OF NOVA SCOTIA and ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION as Managing Agents
and THE BANKS
EXHIBITS TO CREDIT AGREEMENT Tab No.
-------
A. Form of Note................................................... 1
B. Form of Assignment and Acceptance.............................. 2
C. Form of Compliance Certificate................................. 3
D. Form of Environmental Indemnification Agreement................ 4
E. Form of Notice of Borrowing.................................... 5
F. Form of Notice of Conversion or Continuation................... 6
G. Form of Property Adjustment Report............................. 7
H. Form of Subordinate Guaranty................................... 8
I. Form of Battle ▇▇▇▇▇▇, L.L.P. Legal Opinion.................... 9
SCHEDULES TO CREDIT AGREEMENT
1. Credit Documents...............................................10
1.01(a) Commitments....................................................11
1.01(b) Initial Properties, Cost Basis and Hotel Value.................12
1.01(c) Engineer Report Scope of Services..............................13
1.01(d) Approved Engineers.............................................14
1.01(e) Environmental Report Scope of Services.........................15
1.01(f) Approved Environmental Consultants.............................16
1.01(g) Franchisors....................................................17
1.01(h) Ground Leases..................................................18
1.01(i) Guarantors.....................................................19
1.01(j) Participating Leases...........................................20
4.01 Subsidiaries...................................................21
4.08 Litigation.....................................................22
4.17 Legal Requirements; Zoning; Utilities; Access..................23
4.18 Existing Indebtedness..........................................24
4.21 Franchise Agreements...........................................25
4.22 Management Agreements..........................................26
5.06 Required Work..................................................27
5.07 Insurance......................................................28
11.02 Notice Information.............................................29
-2-
EXHIBIT A
FORM OF SUBORDINATE NOTE
This instrument is subordinated to the extent and in the manner provided in the
Subordinate Unsecured Credit Agreement referred to below. By acceptance of this
instrument, the holder of this instrument agrees to be bound by all of the terms
of the Subordinate Unsecured Credit Agreement as if the holder had been an
original party to the Subordinate Unsecured Credit Agreement.
$ _______________ ____________, 1998
For value received, the undersigned American General Hospitality Operating
Partnership L.P., a Delaware limited partnership ("Borrower"), hereby promises
to pay to the order of ________________________ ("Bank") the principal amount of
_______________ and _______/100 Dollars ($_____) or, if less, the aggregate
outstanding principal amount of each Advance (as defined in the Subordinate
Unsecured Credit Agreement referred to below) made by the Bank to the Borrower,
together with interest on the unpaid principal amount of each Advance from the
date of such Advance until such principal amount is paid in full, at such
interest rates, and at such times, as are specified in the Subordinate Unsecured
Credit Agreement referred to below.
This Note is one of the Notes referred to in, and is entitled to the
benefits of, and is subject to the terms of, the Subordinate Unsecured Credit
Agreement dated as of February 13, 1998 (as the same may be amended or modified
from time to time, the "Credit Agreement"), among the Borrower, the Banks, Bank
One, Texas, N.A., as Administrative Agent, Societe Generale. Southwest Agency,
as Arranger, Syndication Agent, and Documentation Agent, the Bank of Nova Scotia
as Managing Agent, and ▇▇▇▇▇ Fargo Bank, National Association, as Managing
Agent. Capitalized terms used in this Note that are defined in the Credit
Agreement and not otherwise defined in this Note have the meanings, assigned to
such terms in the Credit Agreement. The Credit Agreement, among other things,
(a) provides for the making of Advances by the Bank to the Borrower from time to
time in an aggregate amount not to exceed at any time outstanding the Dollar
amount first above mentioned, the indebtedness of the Borrower resulting from
each such Advance being evidenced by this Note and (b) contains provisions for
acceleration of the maturity of this Note upon the happening of certain events
stated in the Credit Agreement and for prepayments of principal prior to the
maturity of this Note upon the terms and conditions specified in the Credit
Agreement.
Both principal and interest are payable in lawful money of the United
States of America to the Administrative Agent at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, P.O. Box
655415. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (or at
such other location or address as may be specified by the Administrative Agent
to the Borrower) in same day funds. The Bank shall record all Advances and
payments of principal made under this Note, but no failure of the Bank to make
such recordings shall affect the Borrower's repayment obligations under this
Note.
Except as specifically provided in the Credit Agreement, the Borrower
hereby waives presentment, demand, protest, notice of intent to accelerate,
notice of acceleration, and any other notice of any kind. No failure to
exercise, and no delay in exercising, any rights hereunder on the part of the
holder of this Note shall operate as a waiver of such rights.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the state of Texas (except that Chapter 346 of the Texas
Finance Code, which regulates certain revolving credit loan accounts shall not
apply to this Note).
AMERICAN GENERAL HOSPITALITY OPERATING
PARTNERSHIP, L.P.
By: AGH GP. Inc., its general partner
By:__________________________________________
Name:________________________________________
Title:_______________________________________
-2-
EXHIBIT B
ASSIGNMENT AND ACCEPTANCE
Dated ______, 1998
Reference is made to the Amended and Restated Senior Unsecured Credit
Agreement dated as of February 13, 1998 (as the same may be amended or modified
from time to time, the "Credit Agreement") among American General Hospitality
Operating Partnership, L.P., a Delaware limited partnership (the "Borrower"),
the Banks, Bank One, Texas, N.A., as Administrative Agent, Societe Generale,
Southwest Agency, as Arranger, Syndication Agent, and Documentation Agent (the
"Documentation Agent"), the Bank of Nova Scotia, as Managing Agent, and ▇▇▇▇▇
Fargo Bank, National Association, as Managing Agent. Capitalized terms not
otherwise defined in this Assignment and Acceptance shall have the meanings
assigned to them in the Credit Agreement.
Pursuant to the terms of the Credit Agreement, __________ wishes to assign
and delegate ___%/1/ of its rights and obligations under the Credit Agreement.
Therefore, _________________ ("Assignor"), ___________________ ("Assignee"), and
the Administrative Agent agree as follows:
1. As of the Effective Date (as defined below), the Assignor hereby sells
and assigns and delegates to the Assignee, and the Assignee hereby purchases and
assumes from the Assignor, without recourse to the Assignor and without
representation or warranty except for the representations and warranties
specifically set forth in clauses (i), (ii), and (iii) of Section 2, a ____%
interest in and to all of the Assignor's rights and obligations under the Credit
Agreement in connection with its Commitment, including, without limitation, such
percentage interest in the Assignor's Commitment and the Advances owing to the
Assignor, the participation interest in the Letter of Credit Obligations held by
the Assignor, and the Note held by the Assignor.
2. The Assignor (i) represents and warrants that, prior to executing this
Assignment and Acceptance, its Commitment is $____________________, the
aggregate outstanding principal amount of Advances owed to it by the Borrower is
$___________________, and its Pro Rata Share of the Letter of Credit Exposure is
/1/ Specify percentage in no more than 5 decimal points.
$________________; (ii) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (iii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties, or representations made in or in connection with the Credit
Agreement or any other Credit Document or the execution, legality, validity,
enforceability, genuineness, sufficiency, or value of the Credit Agreement or
any other Credit Document or any other instrument or document furnished pursuant
thereto; (iv) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or any Guarantor or the
performance or observance by the Borrower or any Guarantor of any of its
obligations under the Credit Agreement or any other Credit Document or any other
instrument or document furnished pursuant thereto; and (v) attaches the Note
referred to in paragraph 1 above and requests that the Administrative Agent
exchange such Note for a new Note dated ____________, 19__ in the principal
amount of $_____________, payable to the order of the Assignee, [and a new Note
dated ___________, 19__ in the principal amount of $_________________, payable
to the order of Assignor].
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.06 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Documentation Agent, the Administrative Agent, either of the
Managing Agents, the Assignor, or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement or
any other Credit Document; (iii) appoints and authorizes the Administrative
Agent to take such action as administrative agent on its behalf and to exercise
such powers under the Credit Agreement and any other Credit Document as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (iv) appoints and authorizes the
Documentation Agent to take such action as documentation agent on its behalf and
to exercise such powers under the Credit Agreement and any other Credit Document
as are delegated to the Documentation Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (v) agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the Credit Agreement or any other Credit Document are required to be
performed by it as a Bank; (vi) specifies as its Domestic
-2-
Lending Office (and address for notices) and LIBOR Lending Office the offices
set forth beneath its name on the signature pages hereof; (vii) attaches the
forms prescribed by the Internal Revenue Service of the United States certifying
as to the Assignee's status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to the Assignee
under the Credit Agreement and its Note or such other documents as are necessary
to indicate that all such payments are subject to such rates at a rate reduced
by an applicable tax treaty/1/, and (viii) represents that it is an Eligible
Assignee.
4. The effective date for this Assignment and Acceptance shall be
________________ (the "Effective Date")/2/ and following the execution of this
Assignment and Acceptance, the Administrative Agent will record it.
5. Upon such recording, and as of the Effective Date, (i) the Assignee
shall be a party to the Credit Agreement for all purposes, and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Bank thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights (other than rights against the
Borrower pursuant to Sections 2.09, 2.11(c) and 9.07 of the Credit Agreement,
which shall survive this assignment) and be released from its obligations under
the Credit Agreement.
6. Upon such recording, from and after the Effective Date, the
Administrative Agent shall make all payments under the Credit Agreement and the
Notes in respect of the interest assigned hereby (including, without limitation,
all payments of principal, interest, and commitment fees) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments under
the Credit Agreement and the Notes for periods prior to the Effective Date
directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed and
enforced in accordance with, the laws of the State of Texas.
__________________
/2/ If the Assignee is organized under the laws of a jurisdiction outside
the United States.
/3/ See Section 9.06. Such date shall be at least three Business Days
after the execution of this Assignment and Acceptance.
-3-
The parties hereto have caused this Assignment and Acceptance to be duly
executed as of the date first above written.
[ASSIGNOR]
By:_______________________________________
Name:_____________________________________
Title:____________________________________
Address:__________________________________
__________________________________
Attention:________________________________
Telecopy:_________________________________
Telephone:________________________________
[ASSIGNEE]
By:_______________________________________
Name:_____________________________________
Title:____________________________________
Domestic Lending Office:
Address:__________________________________
__________________________________
Attention:________________________________
Telecopy:_________________________________
Telephone:________________________________
-4-
LIBOR Lending Office:
Address:__________________________________
__________________________________
Attention:________________________________
Telecopy:_________________________________
Telephone:________________________________
Bank One, Texas, N.A.,
as Administrative Agent
By:_______________________________________
▇▇▇▇ ▇▇▇▇▇
Vice President
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
P.O. Box 655415
Commercial Real ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
-5-
Exhibit "C"
COMPLIANCE CERTIFICATE
----------------------
This Compliance Certificate is executed this ____ day of _________, ______,
and is prepared pursuant to that certain Senior Unsecured Credit Agreement (the
"Agreement") between AMERICAN GENERAL HOSPITALITY OPERATING PARTNERSHIP, L.P., a
---------
Delaware limited partnership (the "Borrower"), SOCIETE GENERALE, SOUTHWEST
--------
AGENCY, as Arranger, Syndication Agent and Documentation Agent, BANK ONE, TEXAS,
N.A., as Administrative Agent, THE BANK OF NOVA SCOTIA and ▇▇▇▇▇ FARGO BANK,
NATIONAL ASSOCIATION, a Managing Agents, and the Banks parties to the Agreement.
Capitalized terms used herein but not otherwise defined herein shall have the
meanings specified by the Agreement. This Compliance Certificate is also being
provided to the Senior Administrative Agent in compliance with the requirements
of the Subordinate Credit Agreement.
1. Representations, Covenants, Defaults: Borrower hereby certifies to the
------------------------------------
Agents and the Banks, effective as of the date of execution of this
Compliance Certificate, as follows:
1.1 Covenants. All covenants of Borrower set forth in Articles V and VI
---------
of the Agreement required to be performed as of the date hereof have
been performed and maintained in all material respects, and such
Covenants continue to be performed and maintained as of the execution
date of this certificate, except as follows:
_________________________________ [specify]
_________________________________
1.2 Representations and Warranties. All representations and warranties of
------------------------------
Borrower set forth in Article IV of the Agreement are true and correct
in all material respects as of the execution date of this certificate,
except as follows:
_________________________________ [specify]
_________________________________
1.3 Event of Default. There exists no Event of Default except as follows:
----------------
_________________________________ [specify]
_________________________________
COMPLIANCE CERTIFICATE - Page 1 of 17
----------------------
2. Operating Covenants. Borrower hereby certifies to the Agents and the
-------------------
Banks, effective as of the calendar quarter ending ____________, ___, that
the amounts and calculations made hereunder pursuant to Article VII of the
Agreement are true and correct. Borrower acknowledges that if the Parent
or any of its Subsidiaries have a Permitted Preferred Stock Investment,
then (a) the Permitted Preferred Stock Percentage of the Adjusted EBITDA of
the Hotel Properties owned by such Permitted Preferred Stock Company shall
be included, as applicable, in those calculations herein which use Adjusted
EBITDA, and (b) the Cost Basis of a Hotel Property owned by such Permitted
Preferred Stock Company shall be included, as applicable, in those
calculations herein which use Cost Basis or Parent Total Cost Basis.
2.1 Parent Interest Coverage Ratio (Section 7.01 of the Agreement).
------------------------------
The Interest Coverage Ratio for the Parent, as of
the Rolling Period ending on _____________, ____,
is set forth in (c) below, based on the ratio of:
(a) Adjusted EBITDA: $__________
(b) Interest Expense: $__________
(c) Interest Coverage Ratio of (a) to
(b) above, maintained by the
Parent for the stated Rolling
equals: ___________
Required by the Agreement:
For any Rolling Period ending on March 31, 1998 through
December 31, 1998, a ratio of not less than 2.15 to
1.0. 2.15 to 1.0
For any Rolling Period thereafter, a ratio of not less
than 2.50 to 1.0. 2.50 to 1.0
2.2 Parent Debt Service Coverage Ratio (Section 7.02 of the Agreement).
----------------------------------
The Debt Service Coverage Ratio for the Parent, as
of the Rolling Period ending on _________, ______,
is as set forth in (c) below, based on the ratio of:
(a) Adjusted EBITDA, to $__________
COMPLIANCE CERTIFICATE - Page 2 of 17
----------------------
(b) Debt Service $__________
(c) DEBT SERVICE COVERAGE RATIO
MAINTAINED BY THE PRENT FOR THE
STATED ROLLING PERIOD EQUALS $__________
Required by the Agreement:
For any Rolling Period commencing with the Rolling Period
ending on March 31, 1998, a ratio of not less than 2.0 to 1.0.
2.3 Maintenance of Net Worth (Section 7.03 of the Agreement).
------------------------
The Adjusted Net Worth for the Parent, as of the
Rolling Period ending on , , is as set forth in (c)
below, based on the sum of:
(a) Net Worth (determined in accordance
with GAAP) $__________
(b) Minority Interest Adjustment $__________
(c) ADJUSTED NET WORTH OF PARENT
EQUAL (A) + (B) $__________
The Minimum Tangible Net Worth for the Parent, as of
the Rolling Period ending on , , is as set forth in (d)
below, based on the sum of:
(a) $450,000 $450,000.00
(b) 75% of aggregate net proceeds received by Parent
or any of its Subsidiaries after the date of the
Agreement in connection with any offering of Stock
or Stock Equivalents of the Parent or its
Subsidiaries taken as a whole, plus $__________
COMPLIANCE CERTIFICATE - Page 3 of 17
----------------------
(c) 75% of the consideration for any partnership
interests in Borrower issued after the date of the
Agreement for the acquisition of a Hotel Property
or any interest in a Hotel Property permitted
under the Agreement. $__________
(d) THE MINIMUM TANGIBLE NET WORTH OF PARENT
EQUALS (A) + (B) + (C) $__________
Required by the Agreement:
The Parent shall at all times maintain an Adjusted Net
Worth of not less than the Minimum Tangible Net Worth.
2.4 Limitations onTotal Indebtedness of Parent (Section 7.04 of the
-------------------------------------------
Required by the Agreement:
Total Indebtedness (including, without limitation, the
Obligations and all Capitalized Lease Obligations) of
the Parent shall not exceed at any time the lesser of
------
(a) and (b) below:
(a) The sum of:
(i) for Seasoned Properties, (A) Adjusted
EBITDA (on a Consolidated basis) of
such Seasoned Properties for the
preceding Rolling Period multiplied by
(B) for any Rolling Period ending on or
before September, to 1998, six (6), and
for any Rolling period ending
thereafter, five (5); and
COMPLIANCE CERTIFICATE - Page 4 OF 17
----------------------
.................................. $_________
(ii) for New Properties (including Hotel
Properties to be immediately acquired
using the proceeds from any
Indebtedness), (A) the Cost Basis in such
New Properties multiplied by (B) for any
Rolling Period ending on or before
September 30, 1998,sixty percent (60%),
or (B) for any Rolling Period ending
thereafter, fifty percent (50%)
.................................. $_________
(iii) Total of (ii) an (ii) above:...... $__________
OR
(b) The Parent Total Cost Basis (including
Hotel Properties to be immediately
acquired using the proceeds from any
Indebtedness) multiplied by, for any
Rolling Period ending on or before
September 30, 199 8, sixty percent (60%),
and for any Rolling Period ending
thereafter, fifty (50%), based upon the
following calculation
(A) $___________, the Minority
Interest Adjustment
(B) Cost Basis of all Hotel Property
which meet the Parent Propeerty
Requirement
(C) Parent Total Cost Basis equal sum of
(A) + (B) above = $_____________
multiplied by ___%, which is $__________
(c) Lesser of (a) and (b) above:...... $__________
COMPLIANCE CERTIFICATE - Page 5 OF 17
Required by the Agreement:
In no event shall the_ Borrower or the Parent permit
the Total Indebtedness of the Parent to exceed the
amount permitted under the Artic es of Incorporation of
the Parent.
Total Indebtedness of Parent, based upon the
foregoing calculation, as of the date of
execution of this Compliance Certificate
equals: $__________
2.5 Limitations on Secured Recourse Indebtedness of Parent (Section
------------------------------------------------------
7.05of the Agreement).
Required by the Agreement:
The Secured Recourse Indebtedness (excluding the
Obligations) of the Parent shall not at any time on a
Consolidated basis, exceed the lesser of (a) or (b)
below:
(a) The sum of:
(i) for Secured Properties, Adjusted EBITDA (on a
Consolidated basis) of such Seasoned
Properties for the preceeding Rolling Period
multiplied by two (2); and
................................... $__________
(ii) for New Properties (including Hotel
Properties to be immediately acquired using
the proceeds from any Indebtedness), twenty
percent (20%) of the Cost Basis in such New
Properties:
................................... $__________
(iii) Total of (i) and (ii) above........ $__________
OR
COMPLIANCE CERTIFICATE - Page 6 OF 17
(b) Fifteen percent (15%) of the Parent Total Cost
Basis (including Hotel Properties to be
immediately acquired using the proceeds from any
Indebtedness):
............................................... $__________
THE SECURED RECOURSE INDEBTEDNESS OF PARENT AS OF
THE DATE OF EXECUTION OF THIS COMPLIANCE CERTIFICATE
EQUALS: $__________
2.6 Limitations on Secured Non-Recourse Indebtedness of Parent (Section
----------------------------------------------------------
7.06 of the Agreement).
Required by the Agreement:
The Secured Non-Recourse Indebtedness of the Parent
shall not at any time on a Consolidated basis, exceed
the lesser of (a) or (b) below:
(a) The sum of:
(i) for Seasoned Properties, Adjusted EBITDA (on
a Consolidated basis) of such Seasoned
Properties for the preceding Rolling Period
multiplied by three (3): and
.......................................... $__________
(ii) for New Properties (including Hotel
Properties to be immediately acquired using
the proceeds from any Indebtedness), thirty
percent (30%) of the Cost Basis in such New
Properties:
.......................................... $__________
(iii) Total of (i) and (ii) above............... $__________
OR
COMPLIANCE CERTIFICATE - Page 7 OF 17
(b) Thirty percent (30%) of the Parent Total Cost
Basis (including Hotel Properties to be
immediately acquired using the proceeds from any
Indebtedness)
................................................ $__________
THE SECURED NON-RECOURSE INDEBTEDNESS OF PARENT
AS OF THE DATE OF EXECUTION OF THIS COMPLIANCE
CERTIFICATE EQUALS: $__________
2.7 Limitations on Secured Indebtedness of Parent
---------------------------------------------
(Section 7.07 of the Agreement).
Required by the Agreement:
The Parent shall not at any time on a Consolidated
basis permit the sum of the Parent's Secured Non-
Recourse Indebtedness and Secured Recourse to exceed
thirty percent (30%) of the Parent Total Cost Basis
(including Hotel Properties to be immediately acquired
using the proceeds from any Indebtedness).
Calculation of Parent Total Cost Basis:
(a) 10,420,273.00 $10,420,273.00
(b) The sum of the Cost Basis of all Hotel Properties
which meet the Parent Property Requirements: $__________
(c) Parent Total Cost Basis equals the sum of
(a) and (b) above: $__________
(d) 30% of Parent Total Cost Basis: $__________
(e) Secured Non-Recourse Indebtedness: $__________
(f) Secured Recourse Indebtedness: $__________
(g) Sum of (e) and (f) above: $__________
COMPLIANCE CERTIFICATE - Page 8 OF 17
2.8 Borrowing Limitation (Section 2.01 of the Agreement)
--------------------
Required by the Agreement:
The maximum aggregate amount outstanding under the
facility (for Advances and Letters of Credit) shall
not exceed the Borrowing Base
(a) The Borrowing Base for the Rolling Period ending
on ___________, _____ equals: $__________
(b) Actual amount outstanding under the facility
(for Advances and Letters of Credit): $__________
2.9 Total Availability. (Section 2.01 of the
------------------
Subordinate Credit Agreement)
Required by the Subordinate Credit Agreement:
The aggregate amount of all outstanding advances under
the Subordinate Credit Agreement at any one time may
not exceed the lesser of the aggregate Commitments
under the Subordinate Credit Agreement at such time or
the Total Availability at such time.
The Adjusted Net Worth as of the date of this
Compliance Certificate is as set forth in (f) below,
based on the following calculation:
(a) The Parent's and the Parent's Subsidiaries
Consolidated Adjusted EBITDA for the Rolling
Period ending , equals: $__________
(b) Line (a) above multiplied by (i) on or before
December 31, 1998, six (6), and (ii) after
December 31, 1998, five (5), equals: $__________
COMPLIANCE CERTIFICATE - Page 9 OF 17
(c) All Indebtedness of the Parent and its
outstanding as of such date, including without
Subsidiaries limitation, the Senior Obligations,
Secured Recourse Indebtedness and Secured
Non-Recourse Indebtedness equals: $__________
(d) Line (b) above minus Line (c) above equals: $__________
(e) issued under the Agreement equals: The
aggregate face amount of all Letters of
Credit $__________
(f) Total Availability equals Line (d) above
minus (e) above: Line $__________
3. Other Covenants. Borrower hereby certifies to the Agents and the Banks,
---------------
effective as of the Rolling Period ending _________, ___, that the
following amounts and calculations made pursuant to the Agreement are true
and correct:
3.1 Leverage Ratio (Article 1 of the Agreement)
--------------
The Leverage Ratio for the Parent, as of the Rolling
Period ending on ___________, ______, is as set forth
in (c) below, based on the ratio of:
(a) Parent's Total Indebtedness: $__________
(b) Hotel Value of Hotel Properties owned by the
Parent and Parent's Subsidiaries which meet the
Parent Property Requirements: $__________
(c) THE LEVERAGE RATIO BASED ON THE RATIO OF (A) TO
(B) ABOVE MAINTAINED BY THE PARENT FOR THE STATED
ROLLING PERIOD EQUALS $__________
COMPLIANCE CERTIFICATE - Page 10 OF 17]
3.2 Status; Applicable Margin (Article 1 of the Agreement)
-------------------------
Pursuant to Article 1 of the Agreement, the Status
applicable to the loan facility is ______________,
based upon a Leverage Ratio of ____________ (as
calculated above). Based on the foregoing, the
Applicable Margin for each subsequent Advance is as
follows:
Prime Rate Advances: $__________
LIBOR Rate Advances: $__________
Unused Commitment Fee: $__________
3.3 Parent Property Requirements (Article 1 of the Agreement)
----------------------------
Attach schedule with detail for each Parent Property
----------------------------------------------------
(a) The Cost Basis for any of the Parent Properties located in one
state shall not exceed 20% (except Florida which shall not exceed
35%) of the Cost Basis for all of the Parent Properties:
(i) Highest Cost Basis for all Parent Properties
in any one state: $_________
(ii) Total Cost Basis for all Parent Properties $_________
(iii) Ratio of (i) to (ii) above
(iv) Cost Basis of Parent Properties in Florida $_________
(b) The Cost Basis for all of the Parent Properties
which are limited service hotels or extended stay
hotels (Marriott Courtyards shall not be deemed
limited service hotels) shall not exceed, in the
aggregate, 20% of the Cost Basis for all of the
Parent Properties, as follows:
COMPLIANCE CERTIFICATE - Page 11 OF 17
(i) Cost Basis for Parent Properties which are
limited service or extended stay hotels: $_________
(ii) Cost Basis of all of the Paren Properties: $_________
(iii) Ratio of (i) to (ii) above
(c) The Cost Basis for Hotel Properties which do not
have franchise or license agreements shall not
exceed 15% of the Cost Basis for all Parent
Properties:
(i) Cost Basis for Parent Properties which do
not have franchise or license agreements: $_________
(ii) Cost Basis of all Parent Properties: $_________
(iii) Ratio of (i) to (ii) above
(d) The Cost Basis for Hotel Properties which are
subject to a ground lease shall not exceed 22.5%
of the Cost Basis for all of the Parent Properties
or 22.5% of the total guest rooms for all Parent
Properties, as follows:
(i) Cost Basis of all Parent Properties which
are subject to a ground lease: $_________
(ii) Total guest rooms for all Parent Properties:
(iii) Cost Basis for all of the Parent
Properties: $_________
COMPLIANCE CERTIFICATE - Page 12 OF 17
(iv) Ratio of (iii) to (i) above
(v) Ratio of (iii) to (ii) above:
3.4 Parent Total Cost Basis (Article 1 of the Agreement)
-----------------------
Parent Total Cost Basis, as of the Rolling Period
ending on , , is as set forth in (c) below, based on
the sum of
(a) Cost Basis of all Parent Properties which meet the
Parent Property Requirements $_________
(b) Minority Interest Adjustment $_________
(c) Sum of (a) and (b) above $_________
3.5 Restricted Liens (Section 6.01 of the Agreement)
----------------
Required by the Agreement:
Borrower, Parent and their respective Subsidiaries will
not incur or permit to exist any Indebtedness other
than the Obligations and the following:
COMPLIANCE CERTIFICATE - Page 13 OF 17
(a) Subordinate Indebtedness for which the cumulative
principal outstanding prior to the Maturity Date
is less than or equal to $125,000,000
Actual principal balance of Subordinate Indebtedness as
of the date of this Compliance Certificate: $_________
(b) If all of the Subordinate Indebtedness is repaid
in full and no more Subordinate Indebtedness may
be incurred pursuant to (a) above, then
Indebtedness which is less than or equal to
$30,000,000
Actual other Indebtedness incurred in accordance with
(b) above $_________
(c) Secured Recourse Indebtedness and Secured Non-
Recourse Indebtedness incurred by Permitted Other
Subsidiaries to the extent (i) the covenants in
Article VII of the Agreement are complied with,
(ii) the Secured Recourse Indebtedness secured by
a Hotel Property does not exceed 65% of the market
value of such Hotel Property, (iii) all Secured
Recourse Indebtedness in the aggregate secured by
Hotel Properties does not exceed 65% of the
aggregate market value of such Hotel Properties,
and (iv) the Secured Non-Recourse Indebtedness
secured by a Hotel Property does not exceed 70% of
the market value of such Hotel Property, (iii) all
Secured Recourse Indebtedness in the aggregate
secured by Hotel Properties does not exceed 70% of
the aggregate market value of such Hotel
Properties.
COMPLIANCE CERTIFICATE - Page 14 OF 17
Indicate whether Borrower is in compliance with Section
6.01 of the Agreement. If not, explain why and provide
detail.
(d) Certain other restrictions detailed in
Section 6.02(d) through (g) of the
Agreement
Indicate whether Borrower is in compliance with the
foregoing restrictions. If not, explain why and
provide detail.
3.6 Agreements Regarding Distributions From Subsidiaries
----------------------------------------------------
(Section 6.03 of the Agreement)
Required by the Agreement:
Borrower will not create, assume, incur or suffer to
exist, or permit any of its Subsidiaries (except for
Permitted Other Subsidiaries) to create, assume, incur,
or suffer to exist, any Lien, except as permitted under
Section 6.01 of the Agreement.
Indicate whether Borrower, Parent and their
Subsidiaries are in compliance with the foregoing and
attach schedule of values and Indebtedness. If not,
explain why and provide detail.
Indicate whether Borrower, Parent and their
Subsidiaries are in compliance with the foregoing
restrictions. If not, explain why and provide detail.
3.7 Restricted Payments (Section 6.04 of the Agreement)
-------------------
Required by the Agreement:
Neither The Parent, Borrower, nor any their respective
Subsidiaries, may not make any Restricted Payment,
except as provided in Section 6.04 of the Agreement.
COMPLIANCE CERTIFICATE - Page 15 OF 17
Parent may, if no Default has occurred and is
continuing or would result therefrom, make payments to
its shareholders (including in connection with the
repurchase of Stock or Stock Equivalents) which with
the previous such cash payments in the three
immediately preceding Fiscal Quarters are not in excess
of the greater of (i) the lesser of (A) ninety percent
(90%) of the Funds From Operations of the Parent during
such Rolling Period or (B) one hundred percent (100%)
of Free Cash Flow of the Parent during such Rolling
Period and (ii) the amount required for the Parent to
maintain its status as a REIT:
(a) Payments to Shareholders during the Rolling Period
ending on : $_________
(b) Funds From Operations of the Parent during the
Rolling Period ending on $_________
(c) Ratio of Payments to Funds From Operations
(d) Free Cash Flow of the Parent during the Rolling
Period ending on $_________
Certain other restrictions detailed in Section 6.04(b)
through (e) of the Agreement
Indicate whether Borrower, the Parent and their
Subsidiaries, as applicable, are in compliance with the
foregoing restrictions. If not, explain why and provide
detail.
3.8 Other Restrictions and Covenants (Article 6 of the
--------------------------------
Agreement)
Indicate whether Borrower, the Parent and their
Subsidiaries, as applicable, are in compliance with the
covenants and restrictions set forth in Sections 6.05
through 6.14 of the Agreement. If not, explain why and
provide detail.
COMPLIANCE CERTIFICATE - Page 16 OF 17
3.19 Parent's REIT Status
--------------------
Indicate whether the Parent has maintained its REIT tax
status. If not, explain why and provide detail.
EXECUTED as of the date first referenced above.
BORROWER:
--------
AMERICAN GENERAL HOSPITALITY
OPERATING PARTNERSHIP, L.P.
By: AGH GP, Inc., its general partner
By:_____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Executive Vice President
COMPLIANCE CERTIFICATE - Page 17 OF 17
3.9 Parent's REIT Status
Indicate whether the Parent has maintained its REIT tax status.
If not, explain why and provide detail.
EXECUTED as of the date first referenced above.
BORROWER:
--------
AMERICAN GENERAL HOSPITALITY
OPERATING PARTNERSHIP, L.P.
By: AGH GP, Inc., its general partner
By:________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Executive Vice President
COMPLIANCE CERTIFICATE - Page 17 of 17
EXHIBIT "D"
FORM OF ENVIRONMENTAL INDEMNIFICATION AGREEMENT
This Environmental Indemnification Agreement (this "Agreement") is made
and entered into effective for all purposes as of the 13th day of February,
1998, by the parties signatory hereto or to an Accession Agreement (as
hereinafter defined) (collectively, the "Indemnitor" whether one or more), to
and for the benefit of BANK ONE, TEXAS, N.A., as Administrative Agent (the
"Administrative Agent"), SOCIETE GENERALE, SOUTHWEST AGENCY, as Arranger,
Syndication Agent, and Documentation Agent (the "Documentation Agent"), THE BANK
OF NOVA SCOTIA and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as Managing Agents
(the "Managing Agents"), and the banks and other lenders named in the Credit
Agreement herein described.
INTRODUCTION
WHEREAS, this Agreement is given in connection with that certain
Subordinate Unsecured Credit Agreement dated as of February 13, 1998 ("Credit
Agreement"), among AMERICAN GENERAL HOSPITALITY OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership (the "Borrower"), Administrative Agent,
Documentation Agent, Managing Agents and the banks and other lenders party
thereto (collectively the "Banks") pursuant to which the Banks are considering
making a loan in an amount up to $100,000,000.00 (the "Loan") to Borrower as
more specifically described therein;
WHEREAS, the Borrower and Subsidiaries of the Borrower now or hereafter
will own certain Hotel Properties which include without limitation the Initial
Properties, the Future Properties, the Permitted Non-Eligible Properties and the
properties owned by the Permitted Other Subsidiaries (said properties together
with all property owned by the Participating Lessees in connection with such
Hotel Properties, all rights and appurtenances to such Hotel Properties and all
improvements presently located or hereafter constructed on such Hotel Properties
are hereinafter collectively called the "Properties");
WHEREAS, the Borrower is the principal financing entity for capital
requirements of its Subsidiaries, and from time to time the Borrower has made
and will continue to make capital contributions and advances to its
Subsidiaries, including the Subsidiaries which are parties hereto. Other than
the Parent, each Indemnitor is a direct or indirect subsidiary of the Borrower.
Each Indemnitor will derive substantial direct and indirect benefit from the
transactions contemplated by the Credit Agreement; and
WHEREAS, the Banks have required the execution and delivery of this
Agreement as a condition precedent to the execution of the Credit Agreement.
The Banks would not be willing to execute the Credit Agreement in the absence of
the execution and delivery by Indemnitor of this Agreement.
AGREEMENT
---------
NOW, THEREFORE, Indemnitor, as an inducement to the Banks to make the Loan,
hereby covenants and agrees to and for the benefit of the Banks as follows:
1. Defined Terms. All terms used in this Agreement, but not defined
-------------
herein, shall have the meaning given such terms in the Credit Agreement.
2. Hazardous Material. As used in this Agreement, the term "Hazardous
------------------
Materials" shall mean any flammable explosives, radioactive materials, hazardous
wastes, hazardous materials, hazardous or toxic substances, or related materials
as defined in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. (S) 9601 et. seq.), the Hazardous
Materials Transportation Act, as amended (49 U.S.C. (S) 1801 et seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S.C. (S) 6901 et seq.),
and in the regulations adopted and publications promulgated pursuant thereto,
and all friable asbestos, petroleum derivatives, polychlorinated biphenyls, and
materials defined as hazardous materials under any federal, state or local laws,
ordinances, codes, rules, orders, regulations or policies governing the use,
storage, treatment, transportation, manufacture, refinement, handling,
production or disposal thereof (collectively, "Environmental Laws").
3. Representation. Except as set forth in the Environmental Reports,
--------------
Indemnitor warrants and represents to the Banks that it has no knowledge of (a)
the presence of any Hazardous Materials on any of the Properties except for
Permitted Hazardous Substances; or (b) any material spills, releases, discharges
or disposal of Hazardous Materials that have occurred or are presently occurring
off any of the Properties as a result of any construction on or operation and
use of any of the Properties. In connection with the operation and use of any
of the Properties, Indemnitor warrants and represents that, as of the date of
this Agreement, it has no knowledge of any failure to comply in all material
respects with all applicable law, state and federal environmental laws,
regulations, ordinances and administrative and judicial orders relating to the
generation, recycling, reuse, sale, storage, handling, transport and disposal of
any Hazardous Materials other than as set forth in the Environmental Reports.
-2-
4. Covenant. Indemnitor covenants and agrees not to cause or permit the
--------
presence, use, generation, release, discharge, storage, disposal or
transportation of any Hazardous Materials on, under, in, about, to or from any
of the Properties except for Permitted Hazardous Substances.
5. Indemnification. Indemnitor shall exonerate, indemnify, pay and
---------------
protect, defend (with counsel approved pursuant to the Credit Agreement) and
save the Administrative Agent, the Documentation Agent, the Managing Agents, the
Banks, and their respective directors, trustees, beneficiaries, officers,
shareholders, employees and agents of the Banks (collectively, the "Indemnified
Parties"), harmless from and against any claims (including, without limitation,
third party claims for personal injury or real or personal Properties damage),
actions, administrative proceedings (including informal proceedings), judgments,
damages, punitive damages, penalties, fines, costs, taxes, assessments,
liabilities (including, without limitation, sums paid in settlements of claims),
interest or losses, including reasonable attorneys' fees and expenses
(including, without limitation, any such reasonable fees and expenses incurred
in enforcing this Agreement or collecting any sums due hereunder), consultant
fees, and expert fees, together with all other reasonable costs and expenses of
any kind or nature (collectively, the "Costs") that arise directly or indirectly
in connection with the presence, suspected presence, release or suspected
release of any Hazardous Materials in or into the air, soil, ground water,
surface water or improvements at, on, about, under or within any of the
Properties, or any portion thereof, or elsewhere in connection with the
transportation of Hazardous Materials to or from any of the Properties (any such
release being referred to herein as a "Release"; provided however that
Indemnitor shall not be so liable for any Costs arising because of the gross
negligence or wilful misconduct of an Indemnified Party or Costs arising because
of a Release for a Property after the Administrative Agent or the Administrative
Agent's nominee acquires title to such Property. INDEMNITOR'S OBLIGATION TO SO
INDEMNIFY THE INDEMNIFIED PARTIES SHALL INCLUDE INDEMNIFICATION FOR ANY OF SUCH
MATTERS CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED
PARTIES. The indemnification provided in this Section shall specifically apply
to and include claims or actions brought by or on behalf of tenants or employees
of Indemnitor; Indemnitor hereby expressly waives (with respect to any claims of
the Indemnified Parties arising under this Agreement) any immunity to which
Indemnitor may otherwise be entitled under any industrial or worker's
compensation laws. In the event any of the Indemnified Parties shall suffer or
incur any such Costs, Indemnitor shall pay to the Administrative Agent for the
benefit of the Indemnified Party the total of all such Costs suffered or
incurred by such Indemnified Party within ten (10) days after demand therefor,
such payment to be disbursed by the Administrative Agent in accordance with the
Credit Agreement. Without limiting the generality of the foregoing, the
indemnification provided by this Section 5 shall specifically cover Costs,
including, without limitation, capital, operating and maintenance costs,
incurred in connection with any
-3-
investigation or monitoring of site conditions, any clean-up, containment,
remedial, removal or restoration work required or performed by any federal,
state or local governmental agency or political subdivision ("Governmental
Agency") or performed by any non-governmental entity or person as required or
requested, by any Governmental Agency because of the presence, suspected
presence, release or suspected release of any Hazardous Materials in or into the
air, soil, groundwater, surface water or improvements at, on, under or within
any of the Properties (or any portion thereof), or elsewhere in connection with
the transportation of Hazardous Materials to or from any of the Properties, and
any claims of third parties for loss or damage due to such Hazardous Materials.
6. Remedial Work. In the event any investigation or monitoring of site
-------------
conditions or any clean-up, containment, restoration, removal or other remedial
work ("Remedial Work") is required (a) under any Environmental Law, (b) by any
judicial, arbitral or administrative order, (c) in order to comply with any
agreements affecting any of the Properties, or (d) to maintain any of the
Properties in a standard of environmental condition which prevents the release
or generation of any Hazardous Materials except for Permitted Hazardous
Substances, Indemnitor shall perform or cause to be performed such Remedial
Work; provided, that Indemnitor may withhold commencement of such Remedial Work
pending resolution of any good faith contest regarding the application,
interpretation or validity of any law, regulation, order or agreement, subject
to the requirements of Section 7 below. All Remedial Work shall be conducted
(i) in a diligent and timely fashion by a licensed environmental engineer, (ii)
pursuant to a detailed written plan for the Remedial Work approved by any
Governmental Agency with a legal or contractual right to such approval, (iii)
with such insurance coverage pertaining to liabilities arising out of the
Remedial Work as is then customarily maintained with respect to such activities
and (iv) only following receipt of all required permits, licenses or approvals.
In addition, Indemnitor shall submit to the Banks promptly upon receipt or
preparation, copies of any and all reports, studies, analyses, correspondence,
governmental comments or approvals, proposed removal or other Remedial Work
contracts and similar information prepared or received by Indemnitor in
connection with any Remedial Work or Hazardous Materials relating to any of the
Properties. All costs and expenses of such Remedial Work shall be paid by
Indemnitor, including, without limitation, the charges of the Remedial Work
contractors and the consulting environmental engineer, any taxes or penalties
assessed in connection with the Remedial Work and the Banks' reasonable fees and
costs incurred in connection with monitoring or review of such Remedial Work.
In the event Indemnitor should fail to commence or cause to be commenced such
Remedial Work, in a timely fashion, or fail diligently to prosecute to
completion, such Remedial Work, the Administrative Agent following consent of
the Majority Banks (following thirty (30) days written notice to Indemnitor)
may, but shall not be required to, cause such Remedial Work to be performed, and
all costs and expenses thereof, or incurred in connection therewith shall be
-4-
Costs within the meaning of Section 5 above. All such Costs shall be due and
payable to the Administrative Agent by Indemnitor upon thirty (30) days after
demand therefor, such payments to be disbursed by the Administrative Agent in
accordance with the Credit Agreement.
7. Permitted Contests. Notwithstanding any provision of this Agreement
------------------
to the contrary, Indemnitor may contest by appropriate action any Remedial Work
requirement imposed by any Governmental Agency provided that (a) if the Loan
then remains outstanding, no "Event of Default" has occurred and is continuing
under the Credit Agreement or any Credit Documents, (b) Indemnitor has given the
Banks written notice that Indemnitor is contesting or shall contest and
Indemnitor does in fact contest the application, interpretation or validity of
the law, regulation, order or agreement pertaining to the Remedial Work by
appropriate legal or administrative proceedings conducted in good faith and with
due diligence and dispatch, (c) such contest shall not subject any of the
Indemnified Parties nor any assignee of all or any portion of the Banks'
interest in the Loan nor any of the Properties to civil or criminal liability
and does not jeopardize any such party's lien upon or interest in any of the
Properties and (d) if the estimated cost of the Remedial Work is greater than
$2,500,000, Indemnitor shall give such security or assurances as may be
reasonably required by the Banks as determined pursuant to the Credit Agreement
to ensure ultimate compliance with all legal or contractual requirements
pertaining to the Remedial Work (and payment of all costs, expenses, interest
and penalties in connection therewith) and to prevent any sale, forfeiture or
loss by reason of nonpayment or noncompliance.
8. Reports and Claims. Indemnitor shall deliver to the Banks copies of
------------------
any reports, analyses, correspondence, notices, licenses, approvals, orders or
other written materials relating to the environmental condition of any of the
Properties promptly upon receipt, completion or delivery thereof. Indemnitor
shall give notice to the Banks of any claim, action, administrative proceeding
(including, without limitation, informal proceedings) or other demand by any
governmental agency or other third party involving Costs or Remedial Action at
the time such claim or other demand first becomes known to Indemnitor. Receipt
of any such notice shall not be deemed to create any obligation on the Banks to
defend or otherwise respond to any claim or demand. All notices, approvals,
consents, requests and demands upon the respective parties hereto shall be in
writing, including telegraphic communication and delivered or teletransmitted to
the Administrative Agent, as set forth in the Credit Agreement and to each
Indemnitor, at the address set forth beneath such Indemnitor's signature or in
the Accession Agreement executed by such Indemnitor, or to such other address as
shall be designated by any Indemnitor or the Administrative Agent in written
notice to the other parties. All such notices and other communications shall be
effective when delivered or teletransmitted to the above addresses.
-5-
9. Banks as Owner. If for any reason, the Administrative Agent or any
--------------
of the Banks (or any successor or assign of such parties) becomes the fee owner
of any of the Properties and any claim, action, notice, administrative
proceeding (including, without limitation, informal proceedings) or other demand
is made by any governmental agency or other third party which implicate Costs or
Remedial Work, Indemnitor shall cooperate with such party in any defense or
other appropriate response to any such claim or other demand; provided however
that Indemnitor shall not be so liable for any Costs arising because of the
gross negligence or wilful misconduct of an Indemnified Party. Indemnitor's
duty to cooperate and right to participate in the defense or response to any
such claim or demand shall not be deemed to limit or otherwise modify
Indemnitor's obligations under this Agreement. Any party subject to a claim or
other proceeding referenced in the first sentence of this Section 9 shall give
notice to Indemnitor of any claim or demand governed by this Section 9 at the
time such claim or other demand first becomes known to such party.
10. Subrogation of Indemnity Rights. If Indemnitor fails to fully perform
-------------------------------
its obligations under Sections 5 and 6 above, the Indemnified Parties shall be
subrogated to any rights or claims Indemnitor may have against any present,
future or former owners, tenants or other occupants or users of any of the
Properties, any portion thereof or any adjacent or proximate properties,
relating to the recovery of Costs or the performance of Remedial Work.
11. Assignment by Agents and Banks. No consent by Indemnitor shall be
------------------------------
required for any assignment or reassignment of the rights of the Administrative
Agent, the Documentation Agent, the Managing Agents or the Banks under this
Agreement to any successor of such party or a purchaser of the Loan or any
interest in or portion of the Loan including participation interests.
12. Merger, Consolidation or Sale of Assets. In the event Indemnitor is
---------------------------------------
dissolved, liquidated or terminated or all or substantially all the assets of
Indemnitor are sold or otherwise transferred to one or more persons or other
entities, the surviving entity or transferee or assets, as the case may be, (i)
shall be formed and existing under the laws of a state, (ii) shall deliver to
the Banks an acknowledged instrument in recordable form assuming all
obligations, covenants and responsibilities of Indemnitor under this Agreement.
13. Independent Obligations; Survival. The obligations of Indemnitor
---------------------------------
under this Agreement shall survive the consummation of the Loan transaction
described above and the repayment of the Loan. The obligations of Indemnitor
under this Agreement are separate and distinct from the obligations of
Indemnitor under the Credit Documents. This Agreement may be enforced by the
Banks without regard to or affecting any rights and remedies the Administrative
-6-
Agent and/or the Banks may have against Indemnitor under the Credit Documents
and without regard to any limitations on the Administrative Agent's or Banks'
recourse for recovery of the Loan as may be provided in the Credit Documents.
Enforcement of this Agreement is not and shall not be deemed to constitute an
action for recovery of the indebtedness of the Loan.
14. Default Interest. In addition to all other rights and remedies of the
----------------
Banks against Indemnitor as provided herein, or under applicable law, Indemnitor
shall pay to the Administrative Agent, immediately upon demand therefor,
Default Interest (as defined below) on any Costs and other payments required to
be paid by Indemnitor to the Banks under this Agreement which are not paid
within ten (10) days after demand therefor, such payments to be disbursed by the
Administrative Agent in accordance with the Credit Agreement. Default Interest
shall be paid by Indemnitor from the date such payment becomes delinquent
through and including the date of payment of such delinquent sums. "Default
Interest" shall mean a per annum interest rate equal to three points above the
Adjusted Prime Rate or reference rate for the then current calendar month, as of
the first day of such calendar month, which is publicly announced from time to
time by the Administrative Agent.
15. Contribution. As a result of the transactions contemplated by the
------------
Credit Agreement, each of the Indemnitors will benefit, directly and indirectly,
from the Obligations and in consideration thereof desire to enter into a
contribution agreement among themselves as set forth in this Section 15 to
allocate such benefits among themselves and to provide a fair and equitable
arrangement to make contributions in the event any payment is made by any
Indemnitor hereunder to the Administrative Agent, the Documentation Agent, the
Managing Agents or the Banks (such payment being referred to herein as a
"Contribution," and for purposes of this Agreement, includes any exercise of
recourse by the Administrative Agent against any Property of a Contributor
designated as collateral under any Credit Document and application of proceeds
of such collateral in satisfaction of such Indemnitor's obligations under this
Agreement). The Indemnitors hereby agree as follows:
15.01 Calculation of Contribution. In order to provide for just and
---------------------------
equitable contribution among the Indemnitors in the event any Contribution
is made by a Indemnitor (a "Funding Indemnitor"), such Funding Indemnitor
shall be entitled to a contribution from certain other Indemnitors for all
payments, damages and expenses incurred by that Funding Indemnitor in
discharging any of the obligations under this Agreement (the
"Obligations"), in the manner and to the extent set forth in this Section.
The amount of any Contribution under this Agreement shall be equal to the
payment made by the Funding Indemnitor to the Administrative Agent or any
other beneficiary
-7-
pursuant to this Agreement and shall be determined as of the date on which
such payment is made.
15.02 Benefit Amount Defined. For purposes of this Agreement, the
----------------------
"Benefit Amount" of any Indemnitor as of any date of determination shall be
the net value of the benefits to such Indemnitor and all of its
Subsidiaries (including any Subsidiaries which may be Indemnitors) from
extensions of credit made by the Banks to the Borrower under the Credit
Agreement; provided, that in determining the contribution liability of any
Indemnitor which is a Subsidiary to its direct or indirect parent
corporation or of any Indemnitor to its direct or indirect Subsidiary, the
Benefit Amount of such Subsidiary and its Subsidiaries, if any, shall be
subtracted in determining the Benefit Amount of the parent corporation.
Such benefits shall include benefits of funds constituting proceeds of
Advances made to the Borrower by the Banks which are in turn advanced or
contributed by the Borrower to such Indemnitor or its Subsidiaries and
benefits of Letters of Credit issued pursuant to the Credit Agreement on
behalf of, or the proceeds of which are advanced or contributed or
otherwise benefit, directly or indirectly, such Indemnitor and its
Subsidiaries (collectively, the "Benefits"). In the case of any proceeds of
Advances or Benefits advanced or contributed to a Person (an "Owned
Entity") any of the equity interests of which are owned directly or
indirectly by a Indemnitor, the Benefit Amount of a Indemnitor with respect
thereto shall be that portion of the net value of the benefits attributable
to Advances or Benefits equal to the direct or indirect percentage
ownership of such Indemnitor in its Owned Entity.
15.03 Contribution Obligation. Each Indemnitor shall be liable to a
-----------------------
Funding Indemnitor in an amount equal to the greater of (A) the (i) ratio
of the Benefit Amount of such Indemnitor to the total amount of
Obligations, multiplied by (ii) the amount of Obligations paid by such
Funding Indemnitor and (B) 95% of the excess of the fair saleable value of
the property of such Indemnitor over the total liabilities of such
Indemnitor (including the maximum amount reasonably expected to become due
in respect of contingent liabilities) determined as of the date on which
the payment made by a Funding Indemnitor is deemed made for purposes of
this Agreement (giving effect to all payments made by other Funding
Indemnitors as of such date in a manner to maximize the amount of such
contributions).
15.04 Allocation. In the event that at any time there exists more
than one Funding Indemnitor with respect to any Contribution (in any such
case, the "Applicable Contribution"), then payment from other Indemnitors
pursuant to this Agreement shall be allocated among such Funding
Indemnitors in proportion to the total amount of the
-8-
Contribution made for or on account of the Borrower by each such Funding
Indemnitor pursuant to the Applicable Contribution. In the event that at
any time any Indemnitor pays an amount under this Agreement in excess of
the amount calculated pursuant to clause (A) of Subsection 15.03 above,
that Indemnitor shall be deemed to be a Funding Indemnitor to the extent of
such excess and shall be entitled to contribution from the other
Indemnitors in accordance with the provisions of this Section.
15.05 Subsidiary Payment. The amount of contribution payable under
------------------
this Section by any Indemnitor shall be reduced by the amount of any
contribution paid hereunder by a Subsidiary of such Indemnitor.
15.06 Equitable Allocation. If as a result of any reorganization,
--------------------
recapitalization, or other corporate change in the Borrower or any of its
Subsidiaries, or as a result of any amendment, waiver or modification of
the terms and conditions of other Sections of this Agreement or the
Obligations, or for any other reason, the contributions under this Section
become inequitable as among the Indemnitors, the Indemnitors shall promptly
modify and amend this Section to provide for an equitable allocation of
contributions. Any of the foregoing modifications and amendments shall be
in writing and signed by all Indemnitors.
15.07 Asset of Party to Which Contribution is Owing. The Indemnitors
---------------------------------------------
acknowledge that the right to contribution hereunder shall constitute an
asset in favor of the Indemnitor to which such contribution is owing.
15.08 Subordination. No payments payable by a Indemnitor pursuant to
-------------
the terms of this Section 15 shall be paid until all amounts then due and
payable by the Borrower to the Administrative Agent, the Documentation
Agent, the Managing Agents or any Bank, pursuant to the terms of the Credit
Documents, are paid in full in cash. Nothing contained in this Section 15
shall affect the obligations of any Indemnitor to the Administrative Agent,
the Documentation Agent, the Managing Agents or any Bank under the Credit
Agreement or any other Credit Documents.
16. Miscellaneous. If there shall be more than one Indemnitor hereunder,
-------------
or pursuant to any other indemnification of Banks relating to Hazardous
Materials arising out of or in connection with the Loan ("Other Indemnitor"),
each Indemnitor and Other Indemnitor agrees that (a) the obligations of the
Indemnitor hereunder, and each Other Indemnitor, are joint and several, (b) a
release of any one or more Indemnitors or Other Indemnitors or any limitation of
this Agreement in favor of or for the benefit of one or more Indemnitors or
Other Indemnitors
-9-
shall not in any way be deemed a release of or limitation in favor of or for the
benefit of any other Indemnitor or Other Indemnitor and (c) a separate action
hereunder may be brought and prosecuted against any or all Indemnitors or Other
Indemnitors. If any term of this Agreement or any application thereof shall be
invalid, illegal or unenforceable, the remainder of this Agreement and any other
application of such term shall not be affected thereby. No delay or omission in
exercising any right hereunder shall operate as a waiver of such right or any
other right. This Agreement shall be binding upon, inure to the benefit of and
be enforceable by Indemnitor and the Banks, and their respective successors and
assigns, including (without limitation) any assignee or purchaser of all or any
portion of the Banks' interest in (i) the Loan, (ii) the Credit Documents, or
(iii) any of the Properties.
17. Governing Law. This Agreement shall be governed by, and construed and
-------------
enforced in accordance with, the laws of the State of Texas. Each Indemnitor
hereby irrevocably submits to the jurisdiction of any Texas state or federal
court sitting in Dallas, Texas in any action or proceeding arising out of or
relating to this Agreement and the other Credit Documents, and such Indemnitor
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such court. Each Indemnitor hereby
irrevocably waives, to the fullest extent it may effectively do so, any right it
may have to the defense of an inconvenient forum to the maintenance of such
action or proceeding. Each Indemnitor hereby agrees that service of copies of
the summons and complaint and any other process which may be served in any such
action or proceeding may be made by mailing or delivering a copy of such process
to such Indemnitor at its address specified below. Each Indemnitor agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section shall affect the rights of any of the
Banks to serve legal process in any other manner permitted by the law or affect
the right of any of the Banks to bring any action or proceeding against any
Indemnitor or its Property in the courts of any other jurisdiction.
18. Waivers of Jury Trials. EACH INDEMNITOR HEREBY IRREVOCABLY AND
----------------------
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATING TO THIS
AGREEMENT OR THE NOTES OR ANY OTHER CREDIT DOCUMENT OR TO ANY COUNTERCLAIM
THEREIN.
19. Amendments/Accession Agreement. No waiver of any provision of this
-------------------------------
Agreement nor consent to any departure by any Indemnitor therefrom shall be
effective unless the same shall be in writing and signed by the Administrative
Agent and the Majority Banks, and no amendment of this Agreement shall be
effective unless the same shall be in writing and signed by the Administrative
Agent, with the consent of the Majority Banks; provided that any
--------
-10-
amendment or waiver releasing any Indemnitor from any liability hereunder shall
be signed by all the Banks; and provided further that any waiver or consent
----------------
shall be effective only in the specific instance and for the specific purpose
for which given. Notwithstanding the foregoing, in the event that any Subsidiary
or Affiliate of the Borrower hereafter is required in accordance with the terms
of the Credit Agreement or otherwise agrees to become a Indemnitor under this
Agreement, then such Subsidiary or Affiliate may become a party to this
Agreement by executing an Accession Agreement ("Accession Agreement") in the
form attached hereto as Annex 1, and each Indemnitor and the Administrative
-------
Agent hereby agrees that upon such Subsidiary's or Affiliate's execution of such
Accession Agreement, this Agreement shall be deemed to have been amended to make
such Person an Indemnitor hereunder for all purposes and a party hereto and no
signature is required on behalf of the other Indemnitors or the Administrative
Agent to make such an amendment to this Agreement effective.
[INTENTIONALLY BLANK]
-11-
IN WITNESS WHEREOF, Indemnitor has caused this Agreement to be executed as
of the day and year first written above.
INDEMNITORS:
AMERICAN GENERAL HOSPITALITY
CORPORATION, a Maryland corporation
By:__________________________________________
Name:________________________________________
Title:_______________________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
AGH UPREIT, LLC, a Delaware limited liability company
By: American General Hospitality Corporation, member
By:_____________________________________
Name:___________________________________
Title:__________________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-12-
3100 GLENDALE JOINT VENTURE,
an Ohio general partnership
By: AGH UPREIT, LLC, its partner
By: American General Hospitality
Corporation, member
By:________________________________
Name:______________________________
Title:_____________________________
By: American General Hospitality Operating
Partnership, L.P., member
By: AGH GP, Inc., its general partner
By:___________________________
Name:_________________________
Title:________________________
By: American General Hospitality Operating
Partnership, L.P., its partner
By: AGH GP, Inc., general partner
By:________________________________
Name:______________________________
Title:_____________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-13-
MDV LIMITED PARTNERSHIP,
a Texas limited partnership
By: AGH UPREIT LLC, its general partner
By: American General Hospitality Corporation,
member
By:________________________________
Name:______________________________
Title:_____________________________
By: American General Hospitality Operating
Partnership, L.P., member
By: AGH GP, Inc.,
general partner
By:___________________________
Name:_________________________
Title:________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-14-
MADISON MOTEL ASSOCIATES,
a Wisconsin general partnership
By: AGH UPREIT, LLC, its partner
By: American General Hospitality
Corporation, member
By:________________________________
Name:______________________________
Title:_____________________________
By: American General Hospitality Operating
Partnership, L.P., member
By: AGH GP, Inc., its general partner
By:________________________________
Name:______________________________
Title:_____________________________
By: American General Hospitality Operating
Partnership, L.P., its partner
By: AGH GP, Inc., general partner
By:________________________________
Name:______________________________
Title:_____________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-15-
183 HOTEL ASSOCIATES, LTD.,
a Texas limited partnership
By: AGH UPREIT LLC, its general partner
By: American General Hospitality Corporation,
member
By:________________________________
Name:______________________________
Title:_____________________________
By: American General Hospitality Operating
Partnership, L.P., member
By: AGH GP, Inc.,
general partner
By:___________________________
Name:_________________________
Title:________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ASSOCIATES, LTD., a
Texas limited partnership
By: AGH UPREIT LLC, its general partner
By: American General Hospitality Corporation,
member
By:________________________________
Name:______________________________
Title:_____________________________
By: American General Hospitality Operating
Partnership, L.P., member
By: AGH GP, Inc.,
general partner
By:___________________________
Name:_________________________
Title:________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-17-
2929 ▇▇▇▇▇▇▇▇ LIMITED LIABILITY COMPANY, a
Delaware limited liability company
By: AGH UPREIT, LLC, its member
By: American General Hospitality
Corporation, member
By:________________________________
Name:______________________________
Title:_____________________________
By: American General Hospitality Operating
Partnership, L.P., member
By: AGH GP, Inc., general partner
By:________________________________
Name:______________________________
Title:_____________________________
By: American General Hospitality Operating
Partnership, L.P., its member
By: AGH GP, Inc., general partner
By:________________________________
Name:______________________________
Title:_____________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ PARTNERS, LTD.,
a Florida limited partnership
By: AGH UPREIT LLC, general partner
By: American General Hospitality
Corporation, member
By:________________________________
Name:______________________________
Title:_____________________________
By: American General Hospitality Operating
Partnership, L.P., member
By: AGH GP, Inc.,
general partner
By:___________________________
Name:_________________________
Title:________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-19-
BCHI ACQUISITION, L.L.C.,
a Delaware limited liability company
By: AGH UPREIT LLC, its member
By: American General Hospitality
Corporation, member
By:________________________________
Name:______________________________
Title:_____________________________
By: American General Hospitality
Operating Partnership, L.P., member
By: AGH GP, Inc., general partner
By:___________________________
Name:_________________________
Title:________________________
By: American General Hospitality Operating
Partnership, L.P., its member
By: AGH GP, Inc., general partner
By:________________________________
Name:______________________________
Title:_____________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-20-
COCOA BEACH HOTELS, LTD.,
a Florida limited partnership
By: AGH UPREIT LLC, its general partner
By: American General Hospitality
Corporation, Member
By:___________________________
Name:_________________________
Title:________________________
By: American General Hospitality
Operating Partnership, L.P., Member
By: AGH GP, INC., its general
partner
By:______________________
Name:____________________
Title:___________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇▇▇ ▇-▇▇ LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: AGH UPREIT LLC, its general partner
By: American General Hospitality
Corporation, Member
By:___________________________
Name:_________________________
Title:________________________
By: American General Hospitality
Operating Partnership, L.P., Member
By: AGH GP, INC., its general
partner
By:______________________
Name:____________________
Title:___________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-22-
Parent may, if no Default has occurred and is continuing or
would result therefrom make payments to its shareholders
(including in connection with the repurchase of Stock or
Stock Equivalents) which with the previous such cash
payments in the three immediately preceding Fiscal Quarters
are not in excess of the greater of (i) the lesser of (A)
ninety percent (90%) of the Funds From Operations of the
Parent during such Rolling Period or (B) one hundred percent
(100%) of Free Cash Flow of the Parent during such Rolling
Period and (ii) the amount required for the Parent to
maintain its status as a REIT:
(a) Payments to Shareholders during the Rolling
Period ending on
$
(b) Funds From Operations of the Parent during the
Rolling Period ending on
$
(C) Ratio of Payments from Funds From Operations
(d) Free Cash Flow of the Parent during the Rolling
Period ending on
$
Certain other restrictions detailed in Section 6.04(b)
through (e) of the Agreement
Indicate whether Borrower is in compliance with
the foregoing restrictions. If not, explain why and
provide detail.
3.8 Other Restrictions and Covenants (Article 6 of the
Agreement)
Indicate whether Borrower is in compliance with the
covenants and restrictions set forth in Sections 6.05
through 6.14 of the Agreement. If not, explain why and
provide detail.
COMPLIANCE CERTIFICATE -Page 16 of 17
----------------------
EXHIBIT E
FORM OF NOTICE OF BORROWING
_________, ▇▇__
▇▇▇▇ ▇▇▇, ▇▇▇▇▇, N.A.,
as Administrative Agent under the Credit Agreement herein described
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
P.O. Box 655415
Commercial Real ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, American General Hospitality Operating Partnership, L.P., a
Delaware limited partnership (the "Borrower"), refers to the Subordinate
Unsecured Credit Agreement dated as of February 13, 1998 (as the same may be
amended or modified from time to time, the "Credit Agreement," the defined terms
of which are used in this Notice of Borrowing unless otherwise defined in this
Notice of Borrowing) among the Borrower, the Banks, the Arranger, Syndication
Agent and Documentation Agent, the Administrative Agent and the Managing Agents,
and hereby gives you irrevocable notice pursuant to Section 2.02(a) of the
Credit Agreement that the undersigned hereby requests a Borrowing, and in
connection with that request sets forth below the information relating to such
Borrowing (the "Proposed Borrowing") as required by Section 2.02(a) of the
Credit Agreement:
(a) Business Day of the Proposed Borrowing is _____________, 19_____.
(b) The Proposed Borrowing will be a Borrowing composed of [Prime Rate
Advances] [LIBOR Rate Advances].
(c) The aggregate amount of the Proposed Borrowing is $____________.
(d) The Interest Period for each LIBOR Rate Advance made as part of the
Proposed Borrowing is [_____ month[s]].
Bank One, Texas, N.A.
[Date]
Page 2
The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the Proposed Borrowing:
(a) the representations and warranties contained in the Credit Agreement
and the other Credit Documents are correct in all material respects,
before and after giving effect to the Proposed Borrowing and the
application of the proceeds therefrom, as though made on the date of the
Proposed Borrowing; and
(b) no Default has occurred and remains uncured, or would result from such
Proposed Borrowing or from the application of the proceeds therefrom.
Very truly yours,
AMERICAN GENERAL HOSPITALITY OPERATING
PARTNERSHIP, L.P.
By: AGH GP, Inc., its general partner
By:__________________________
Name:________________________
Title:_______________________
EXHIBIT F
FORM OF NOTICE OF CONVERSION OR CONTINUATION
[Date]
Bank One, Texas, N.A.,
as Administrative Agent under the Credit Agreement herein described
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
P.O. Box 655415
Real Estate Department
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, American General Hospitality Operating Partnership, L.P., a
Delaware limited partnership (the "Borrower"), refers to the Subordinate
Unsecured Credit Agreement dated as of February 13, 1998 (as the same may be
amended or modified from time to time, the "Credit Agreement," the defined terms
of which are used in this Notice of Conversion or Continuation unless otherwise
defined in this Notice of Conversion or Continuation), among the Borrower, the
Banks, the Arranger, Syndication Agent and Documentation Agent, the
Administrative Agent, and the Managing Agents, and hereby gives you irrevocable
notice pursuant to Section 2.02(b) of the Credit Agreement that the undersigned
hereby requests a Conversion or continuation of an outstanding Borrowing, and in
connection with that request sets forth below the information relating to such
Conversion or continuation (the "Proposed Borrowing") as required by Section
2.02(b) of the Credit Agreement:
(a) The Business Day of the Proposed Borrowing is _______________, 19 ____.
(b) The Proposed Borrowing will be composed of [Prime Rate Advances] [LIBOR
Rate Advances].
(c) The aggregate amount of the Borrowing to be Converted or continued is $
_______ and consists of [Prime Rate Advances] [LIBOR Rate Advances].
Bank One, Texas, N.A.
[Date]
Page 2
(d) The Proposed Borrowing consists of [a Conversion to [Prime Rate
Advances] [LIBOR Rate Advances]] [a continuation of [Prime Rate Advances]
[LIBOR Rate Advances]].
(e) The Interest Period for each LIBOR Rate Advance made as part of the
Proposed Borrowing is [____ month[s]].
Very truly yours,
AMERICAN GENERAL HOSPITALITY OPERATING
PARTNERSHIP, L.P.
By: AGH GP, Inc., its general partner
By:_____________________________
Name:___________________________
Title:__________________________
SUBORDINATE UNSECURED CREDIT AGREEMENT
EXHIBIT G
FORM OF PROPERTY ADJUSTMENT REPORT
This Property Adjustment Report is executed this ___ day of _____________,
1998 and is prepared pursuant to Section 2.14 of that certain Subordinate
Unsecured Credit Agreement (the "Agreement") between AMERICAN GENERAL
HOSPITALITY OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the
"Borrower"), SOCIETE GENERALE, SOUTHWEST AGENCY, as Arranger, Syndication Agent
and Documentation Agent, BANK ONE, TEXAS, N.A., as Administrative Agent, THE
BANK OF NOVA SCOTIA, as Co-Agent, AND ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as
Co-Managers, and the Banks party to the Credit Agreement. Capitalized terms used
herein but not otherwise defined herein shall have the meanings specified by the
Agreement:
Total Availability
as of last Property Adjusted
Compliance Adjustment Total
Certificate Availability
1. Adjusted EBITDA of all Parent
Properties $_________ $_________ $_________
2. Line 1 above multiplied by 6 $_________ $_________ $_________
(5 after December 31, 1998)
3. All of Parent's consolidated
outstanding Indebtedness
including face amount of
outstanding letters of credit $_________ $_________ $_________
4. TOTAL AVAILABILITY (Line 2 minus
Line 3) $_________ $_________ $_________
The Borrower has caused this Property Adjustment Report to be executed this
____ day of _________, 19__.
AMERICAN GENERAL HOSPITALITY
OPERATING PARTNERSHIP, L.P.
By: AGH GP, Inc., its general partner
By:_________________________________
Name:_______________________________
Title:______________________________
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EXHIBIT "H"
FORM OF SUBORDINATE GUARANTY AND CONTRIBUTION AGREEMENT
This Subordinate Guaranty and Contribution Agreement (this "Agreement") is
made and entered into effective for all purposes as of the 13th day of February,
1998, by the parties signatory hereto or to an Accession Agreement (as
hereinafter defined) (collectively, the "Guarantor" whether one or more) to and
for the benefit of BANK ONE, TEXAS, N.A., as Administrative Agent (the
"Administrative Agent"), SOCIETE GENERALE, SOUTHWEST AGENCY, as Arranger,
Syndication Agent, and Documentation Agent (the "Documentation Agent"), THE BANK
OF NOVA SCOTIA and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as Managing Agents
(the "Managing Agents"), and the banks and other lenders named in the Credit
Agreement herein described.
INTRODUCTION
WHEREAS, this Agreement is given in connection with that certain
Subordinate Unsecured Credit Agreement dated as of February 13, 1998 ("Credit
Agreement"), among AMERICAN GENERAL HOSPITALITY OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership (the "Borrower"), Administrative Agent,
Documentation Agent, the Managing Agents and the banks and other lenders party
thereto (collectively the "Banks");
WHEREAS, pursuant to the Credit Agreement the Banks are considering making
a loan (the "Loan") to Borrower as more specifically described therein;
WHEREAS, the Borrower is the principal financing entity for capital
requirements of its Subsidiaries, and from time to time the Borrower has made
and will continue to make capital contributions and advances to its
Subsidiaries, including the Subsidiaries which are parties hereto. Other than
the Parent, each Guarantor is a direct or indirect subsidiary of the Borrower.
Each Guarantor will derive substantial direct and indirect benefit from the
transactions contemplated by the Credit Agreement; and
WHEREAS, the Banks have required the execution and delivery of this
Agreement as a condition precedent to the execution of the Credit Agreement.
The Banks would not be willing to execute the Credit Agreement in the absence of
the execution and delivery by Guarantor of this Agreement.
AGREEMENT
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NOW, THEREFORE, in order to induce the Banks to make the Advances and the
Issuing Bank to issue its Letters of Credit, each Guarantor hereby agrees as
follows:
Section 1. Defined Terms. All terms used in this Agreement, but not
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defined herein, shall have the meaning given such terms in the Credit Agreement.
Section 2. Guaranty. Each Guarantor hereby unconditionally and
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irrevocably guarantees (a) the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all obligations of the Borrower now
or hereafter existing under the Credit Agreement, the Notes and any other Credit
Document, whether for principal, interest, fees, expenses, or otherwise and (b)
the payment and performance of the lessor's obligations under the Participating
Leases (such obligations being the "Guaranteed Obligations") and any and all
expenses (including reasonable counsel fees and expenses) incurred by the
Administrative Agent, the Documentation Agent, the Managing Agents or any Bank
in enforcing any rights under this Agreement. Each Guarantor agrees that its
guaranty obligation under this Agreement is a guarantee of payment, not of
collection and that such Guarantor is primarily liable for the payment of the
Guaranteed Obligations.
Section 3. Limit of Liability. Each Guarantor that is a Subsidiary of
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the Borrower shall be liable under this Agreement with respect to the Guaranteed
Obligations only for amounts aggregating up to the largest amount that would not
render its guaranty obligation hereunder subject to avoidance under Section 548
of the United States Bankruptcy Code or any comparable provisions of any state
law.
Section 4. Guaranty Absolute. Each Guarantor guarantees that the
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Guaranteed Obligations will be paid and performed strictly in accordance with
the terms of the Credit Agreement, the other Credit Documents and the
Participating Leases, as applicable, regardless of any law, regulation, or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Administrative Agent, the Documentation Agent, the Managing
Agents, the Banks or the Participating Lessees with respect thereto. The
liability of each Guarantor under this Agreement shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit Agreement, any
other Credit Document, any Participating Lease or any other agreement or
instrument relating thereto;
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(b) any change in the time, manner, or place of payment of, or in any
other term of, any of the Guaranteed Obligations, or any other amendment or
waiver of or any consent to departure from the Credit Agreement, any Credit
Document or any Participating Lease;
(c) any exchange, release, or nonperfection of any collateral, if
applicable, or any release or amendment or waiver of or consent to departure
from any other agreement or guaranty, for any of the Guaranteed Obligations; or
(d) any other circumstances which might otherwise constitute a defense
available to, or a discharge of the Borrower or a Guarantor.
Section 5. Continuation and Reinstatement, Etc. Each Guarantor agrees
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that, to the extent that the Borrower makes payments to the Administrative
Agent, the Documentation Agent, the Managing Agents or any Bank or the
Administrative Agent, the Documentation Agent, the Managing Agents or any Bank
receives any proceeds of any property of Borrower or any Guarantor and such
payments or proceeds or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside, or otherwise required to be repaid,
then to the extent of such repayment the Guaranteed Obligations shall be
reinstated and continued in full force and effect as of the date such initial
payment or collection of proceeds occurred. The Guarantor shall defend and
indemnify the Administrative Agent, the Documentation Agent, the Managing Agents
and each Bank from and against any claim or loss under this Section 5 (including
reasonable attorneys' fees and expenses) in the defense of any such action or
suit.
Section 6. Certain Waivers.
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6.01. Notice. Each Guarantor hereby waives promptness, diligence, notice of
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acceptance, notice of acceleration, notice of intent to accelerate and any other
notice with respect to any of the Guaranteed Obligations and this Agreement.
6.02. Other Remedies. Each Guarantor hereby waives any requirement that the
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Administrative Agent, the Documentation Agent, the Managing Agents or any Bank
protect, secure, perfect, or insure any Lien or any Property subject thereto or
exhaust any right or take any action against the Borrower or any other Person or
any collateral, if any, including any action required by Chapter 34 of the Texas
Business and Commerce Code.
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6.03. Waiver of Subrogation.
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(a) Each Guarantor hereby irrevocably waives, until payment in full of
all Guaranteed Obligations and termination of all Commitments, any claim or
other rights which it may acquire against the Borrower that arise from such
Guarantor's obligations under this Agreement or any other Credit Document,
including, without limitation, any right of subrogation (including, without
limitation, any statutory rights of subrogation under Section 509 of the
Bankruptcy Code, 11 U.S.C. (S) 509, or otherwise), reimbursement, exoneration,
contribution, indemnification, or any right to participate in any claim or
remedy of the Administrative Agent, the Documentation Agent, the Managing Agents
or any Bank against the Borrower or any collateral which the Administrative
Agent, the Documentation Agent, the Managing Agents or any Bank now has or
acquires. If any amount shall be paid to any Guarantor in violation of the
preceding sentence and the Guaranteed Obligations shall not have been paid in
full and all of the Commitments terminated, such amount shall be held in trust
for the benefit of the Administrative Agent, the Documentation Agent, the
Managing Agents or any Bank and shall promptly be paid to the Administrative
Agent for the benefit of Administrative Agent, the Documentation Agent, the
Managing Agents and the Banks to be applied to the Guaranteed Obligations,
whether matured or unmatured, as the Administrative Agent may elect. Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Credit Agreement and that the
waiver set forth in this Section 6.03(a) is knowingly made in contemplation of
such benefits.
(b) Each Guarantor further agrees that it will not enter into any
agreement providing, directly or indirectly, for any contribution,
reimbursement, repayment, or indemnity by the Borrower or any other Person on
account of any payment by such Guarantor to the Administrative Agent, the
Documentation Agent, the Managing Agents or the Banks under this Agreement.
6.04. California Waivers.
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(a) Guarantor understands and agrees that the waivers contained in this
Section 6.04 are waivers of substantive rights and defenses to which Guarantor
might otherwise be entitled under state and federal law. The rights and
defenses waived include, without limitation, those provided by California laws
of suretyship and guaranty, antideficiency laws, and the Uniform Commercial
Code. Guarantor acknowledges that Guarantor has provided these waivers of
rights and defenses with the intention that they be fully relied upon by the
Banks and/or Agents.
(b) Guarantor waives Guarantor's rights of subrogation, reimbursement,
indemnity and contribution, and any other rights and defenses available to
Guarantor by reason of Sections 2787 to 2855, inclusive, of the California Civil
Code, as amended or recodified from time to time, including without limitation
(i) any defenses Guarantor may have to the Guaranteed Obligations by
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reason of an election of remedies by the Banks and/or Agents, and (ii) any
rights or defenses Guarantor may have by reason of protection afforded to
Borrower with respect to the Guaranteed Obligations pursuant to the
antideficiency or other laws of the State of California limiting or discharging
Borrower's indebtedness, including, without limitation, Sections 580a, 580b,
580d, or 726 of the California Code of Civil Procedure, as amended or recodified
from time to time.
(c) If and to the extent such waivers of Guarantor's rights of
subrogation, reimbursement, indemnity and contribution, and any other rights and
defenses waived by Guarantor hereunder are unenforceable, Guarantor hereby
agrees that all such rights shall be junior and subordinate to the rights of the
Banks and/or Agents to obtain payment and performance of the Guaranteed
Obligations and to all rights of the Banks and/or Agents in and to any property,
including the Property, which now or hereafter serves or could serve as
collateral security for the Guaranteed Obligations.
(d) The above waivers include, but are not limited to, the waiver by
Guarantor of:
(i) all rights and defenses arising out of an election of remedies
by the Banks and/or Agents, even though that election of remedies has
destroyed Guarantor's rights or subrogation and/or reimbursement against
Borrower by the operation of Section 580d of the California Code of Civil
Procedure or otherwise;
(ii) all rights and protections of any kind which Guarantor may have
for any reason which would affect or limit the amount of any recovery by
the Banks and/or Agents from Guarantor including, without limitation, the
right to any fair market value hearing pursuant to Section 580a of the
California Code of Civil Procedure.
(iii) any and all benefits available to sureties and creditors which
might otherwise be available to Guarantor under California Civil Code
Sections 2809 (reduction of surety's obligation where larger than
principal's), 2810 (liability of surety when principal is not liable), 2815
(revocation of continuing guaranty), 2819 (exoneration of surety), 2839
(performance of principal obligation or offer of performance), 2845
(requiring creditor to proceed against principal), 2849 (security for
performance of principal obligation), 2850 (hypothecation of surety's
property), 2899 (order of resort to property), and 3433 (creditor's
entitlement to satisfy claim from several funds), as amended or recodified
from time to time; and
(e) Guarantor shall not be discharged, released or exonerated, in any way,
from its absolute, unconditional and independent liabilities hereunder, even
though any rights or defenses which Guarantor may have against Borrower, the
Banks, the Agents or others may be destroyed, diminished or otherwise affected,
by:
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(i) Any declaration by the Banks and/or Agents of a default in
respect of any of the Guaranteed Obligations;
(ii) The exercise by the Banks and/or Agents of any rights or
remedies against Borrower or any other person;
(iii) The failure of the Banks and/or Agents to exercise any rights
or remedies against Borrower or any other person; or
Section 7. Representations and Warranties. Each Guarantor hereby
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represents and warrants as follows:
7.01. Corporate Authority. Such Guarantor is either a corporation, limited
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liability company or limited partnership duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization. The
execution, delivery and performance by such Guarantor of this Agreement are
within such Guarantor's organizational powers, have been duly authorized by all
necessary organizational action and do not contravene (a) such Guarantor's
organizational authority or (b) any law or material contractual restriction
affecting such Guarantor or its Property.
7.02. Government Approval. No authorization or approval or other action by
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and no notice to or filing with, any Governmental Authority is required for the
due execution, delivery and performance by such Guarantor of this Agreement.
7.03. Binding Obligations. This Agreement is the legal, valid and binding
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obligation of such Guarantor enforceable against such Guarantor in accordance
with its terms subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium, or similar law affecting creditors' rights (whether
considered in a proceeding at law or in equity).
Section 8. Covenants. Each Guarantor will comply with all covenant
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provisions of Article V and Article VI of the Credit Agreement to the extent
such provisions are applicable.
8.01. Additional Covenant. As soon as possible and in any event within
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five days after the incurrence of any Indebtedness by the Parent or any
Subsidiary of the Parent other than the Obligations or any other Indebtedness
permitted under the Credit Agreement, the Parent shall notify the Administrative
Agent in writing of such incurrence.
Section 9. Contribution. As a result of the transactions contemplated
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by the Credit Agreement, each of the Guarantors will benefit, directly and
indirectly, from the Guaranteed Obligations and in consideration thereof desire
to enter into a contribution agreement among
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themselves as set forth in this Section 9 to allocate such benefits among
themselves and to provide a fair and equitable arrangement to make contributions
in the event any payment is made by any Guarantor hereunder to the
Administrative Agent, the Documentation Agent, the Managing Agents or the Banks
(such payment being referred to herein as a "Contribution," and for purposes of
this Agreement, includes any exercise of recourse by the Administrative Agent
against any Property of a Contributor and application of proceeds of such
Property in satisfaction of such Guarantor's obligations under this Agreement).
The Guarantors hereby agree as follows:
9.01. Calculation of Contribution. In order to provide for just and
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equitable contribution among the Guarantors in the event any Contribution is
made by a Guarantor (a "Funding Guarantor"), such Funding Guarantor shall be
entitled to a contribution from certain other Guarantors for all payments,
damages and expenses incurred by that Funding Guarantor in discharging any of
the Guaranteed Obligations, in the manner and to the extent set forth in this
Section. The amount of any Contribution under this Agreement shall be equal to
the payment made by the Funding Guarantor to the Administrative Agent or any
other beneficiary pursuant to this Agreement and shall be determined as of the
date on which such payment is made.
9.02. Benefit Amount Defined. For purposes of this Agreement, the "Benefit
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Amount" of any Guarantor as of any date of determination shall be the net value
of the benefits to such Guarantor and all of its Subsidiaries (including any
Subsidiaries which may be Guarantors) from extensions of credit made by the
Banks to the Borrower under the Credit Agreement and the benefit of entering
into the Participating Leases; provided, that in determining the contribution
liability of any Guarantor which is a Subsidiary to its direct or indirect
parent corporation or of any Guarantor to its direct or indirect Subsidiary, the
Benefit Amount of such Subsidiary and its Subsidiaries, if any, shall be
subtracted in determining the Benefit Amount of the parent corporation. Such
benefits shall include benefits of funds constituting proceeds of Advances made
to the Borrower by the Banks which are in turn advanced or contributed by the
Borrower to such Guarantor or its Subsidiaries and benefits of Letters of Credit
issued pursuant to the Credit Agreement on behalf of, or the proceeds of which
are advanced or contributed or otherwise benefit, directly or indirectly, such
Guarantor and its Subsidiaries (collectively, the "Benefits"). In the case of
any proceeds of Advances or Benefits advanced or contributed to a Person (an
"Owned Entity") any of the equity interests of which are owned directly or
indirectly by a Guarantor, the Benefit Amount of a Guarantor with respect
thereto shall be that portion of the net value of the benefits attributable to
Advances or Benefits equal to the direct or indirect percentage ownership of
such Guarantor in its Owned Entity.
9.03. Contribution Obligation. Each Guarantor shall be liable to a Funding
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Guarantor in an amount equal to the greater of (A) the (i) ratio of the Benefit
Amount of such Guarantor to the total amount of Guaranteed Obligations,
multiplied by (ii) the amount of Guaranteed Obligations paid by such Funding
Guarantor and (B) 95% of the excess of the fair saleable value of the property
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of such Guarantor over the total liabilities of such Guarantor (including the
maximum amount reasonably expected to become due in respect of contingent
liabilities) determined as of the date on which the payment made by a Funding
Guarantor is deemed made for purposes of this Agreement (giving effect to all
payments made by other Funding Guarantors as of such date in a manner to
maximize the amount of such contributions).
9.04. Allocation. In the event that at any time there exists more than one
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Funding Guarantor with respect to any Contribution (in any such case, the
"Applicable Contribution"), then payment from other Guarantors pursuant to this
Agreement shall be allocated among such Funding Guarantors in proportion to the
total amount of the Contribution made for or on account of the Borrower by each
such Funding Guarantor pursuant to the Applicable Contribution. In the event
that at any time any Guarantor pays an amount under this Agreement in excess of
the amount calculated pursuant to clause (A) of Subsection 9.03 above, that
Guarantor shall be deemed to be a Funding Guarantor to the extent of such excess
and shall be entitled to contribution from the other Guarantors in accordance
with the provisions of this Section.
9.05. Subsidiary Payment. The amount of contribution payable under this
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Section by any Guarantor shall be reduced by the amount of any contribution paid
hereunder by a Subsidiary of such Guarantor.
9.06. Equitable Allocation. If as a result of any reorganization,
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recapitalization, or other corporate change in the Borrower or any of its
Subsidiaries, or as a result of any amendment, waiver or modification of the
terms and conditions of other Sections of this Agreement or the Guaranteed
Obligations, or for any other reason, the contributions under this Section
become inequitable as among the Guarantors, the Guarantors shall promptly modify
and amend this Section to provide for an equitable allocation of contributions.
Any of the foregoing modifications and amendments shall be in writing and signed
by all Guarantors.
9.07. Asset of Party to Which Contribution is Owing. The Guarantors
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acknowledge that the right to contribution hereunder shall constitute an asset
in favor of the Guarantor to which such contribution is owing.
9.08. Subordination. No payments payable by a Guarantor pursuant to the
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terms of this Section 9 shall be paid until all amounts then due and payable by
the Borrower to any Bank, pursuant to the terms of the Credit Documents, are
paid in full in cash. Nothing contained in this Section 9 shall affect the
obligations of any Guarantor to any Bank under the Credit Agreement or any other
Credit Documents.
Section 10. Subordination.
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10.01. Subordination. The payment of any Guaranteed Obligations (including
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interest accruing after the filing of a petition initiating any proceeding
pursuant to any bankruptcy law with respect to the Guarantor as debtor) is
subordinated to the guaranteed obligations (the "Senior Guaranteed Obligations")
as defined in that certain Guaranty and Contribution Agreement (the "Senior
Guaranty") dated as of even date herewith given for the benefit of the Senior
Administrative Agent and the Senior Creditors in connection with the Senior
Credit Agreement, as the Senior Guaranty may be amended, renewed, extended,
increased, substituted, refinanced, restructured, replaced, supplemented or
otherwise modified from time to time; provided that the aggregate principal
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amount and face amount of outstanding letters of credit of the Senior Guaranteed
Obligations which shall be senior to the Guaranteed Obligations shall not exceed
$500,000,000.00 on the terms and conditions contained in this Section 10.
10.02. Payment Blockage. No payment by the Guarantor on the Guaranteed
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Obligations (whether pursuant to the terms of the Guaranteed Obligations or upon
acceleration or otherwise) shall be made if, at the time of any such payment,
there exists a default in the payment of any Senior Guaranteed Obligations (a
"Senior Payment Default"), and such Senior Payment Default shall not have been
cured or waived by or on behalf of the holders of such Senior Guaranteed
Obligations. In addition, during the continuance of the breach of any provision
in Article VII of the Senior Credit Agreement ("Financial Covenant Default"),
upon the giving by the Senior Administrative Agent of written notice to the
Administrative Agent of such breach, no such payment may be made by the
Guarantor upon the Guaranteed Obligations for a period (the "Blockage Period")
commencing on the date of the giving of such notice and ending 180 days after
the date of the giving of such notice. Not more than one Blockage Period may be
commenced with respect to the Guaranteed Obligations during any period of 360
consecutive days. No Financial Covenant Default which existed or was continuing
on the date of commencement of any Blockage Period shall be, or be made, the
basis for commencement of a second Blockage Period whether within or without a
period of 360 consecutive days unless such Financial Covenant Default shall have
been cured for a period of not less than 30 consecutive days or waived. During
any period in which payments on the Guaranteed Obligations are not restricted
pursuant to this Section 10.02, the holders of the Guaranteed Obligations shall
be entitled to receive payments in accordance with the terms of the Guaranteed
Obligations, including any payments that were previously restricted in
accordance with this Section 10.02.
Section 10.03. Remedy Blockage.
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(a) At any time when any Senior Guaranteed Obligations remain outstanding,
the holders of the Guaranteed Obligations will not have any of the following
rights: (i) to demand, ▇▇▇ for or take from the Guarantor, by set-off or in any
other manner, any moneys which may then or thereafter be owing by the Guarantor
on the Guaranteed Obligations, (ii) to commence, or to join with any Person in
commencing, any suit, action or proceeding against the Guarantor (A) to enforce
payment
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of or to collect all or any portion of the Guaranteed Obligations or (B) to
commence judicial enforcement of any of the rights and remedies under the
documents or instruments governing the Guaranteed Obligations or applicable law,
(iii) to accelerate the principal of or interest on or any other amount under
the Guaranteed Obligations, or (iv) as a holder of the Guaranteed Obligations,
to commence, or to join with any Person in commencing, against Guarantor or any
of its property a bankruptcy, reorganization, insolvency, receivership or other
similar proceeding (each of the foregoing a "Remedial Action") until the earlier
of:
(i) the commencement by the Senior Administrative Agent or any
holder of the Senior Guaranteed Obligations of any Remedial Action;
(ii) the commencement of a liquidation or dissolution proceeding
with respect to the Guarantor or a bankruptcy, reorganization, insolvency,
receivership, or other similar proceeding with respect to the Guarantor or
any of its property; or
(iii) the occurrence of an Event of Default and the continuance
thereof unwaived for 360 days.
(b) Notwithstanding the foregoing, the holders of the Guaranteed
Obligations and the Administrative Agent may (i) charge interest at a default
rate, (ii) ▇▇▇ for specific performance, but not for damages or other sums of
money, or obtain injunctive relief, in either case, in respect of the covenants
of the Guaranteed Obligations which do not require, directly or indirectly, the
payment by the Guarantor of money, (iii) give notices and file law suits to
prevent the running of the relevant statute of limitations, pursue rights in
bankruptcy, reorganization, insolvency, receivership, or other similar
proceedings, and otherwise protect legal rights and (iv) send notices of default
under the Credit Agreement.
Section 10.04. Certain Distributions. Upon any distribution to creditors
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of the Guarantor in a liquidation or dissolution of the Guarantor or in a
bankruptcy, reorganization, insolvency, receivership, or other similar
proceeding with respect to the Guarantor or any of its property, (a) the holders
of the Senior Guaranteed Obligations will be entitled to receive payment in full
in cash, or to have such payment duly provided for in cash, of all amounts
payable under or in respect of the Senior Guaranteed Obligations (including
interest accrued after the commencement of such proceeding) before the holders
of the Guaranteed Obligations will be entitled to receive from the Guarantor or
its assets any payment under or in respect of the Guaranteed Obligations and (b)
until the holders of the Senior Guaranteed Obligations have received such
payment in full in cash, or such payment is duly provided for in cash, any
distribution from the Guarantor or its assets to which the holders of the
Guaranteed Obligations would otherwise be entitled will be made to the holders
of the Senior Guaranteed Obligations (or one or more trustees or representatives
acting on their behalf).
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Subject to the prior payment in full in cash of all Senior Guaranteed
Obligations (or provision made for payment in full in cash of all Senior
Guaranteed Obligations), the holders of the Guaranteed Obligations shall be
subrogated to the rights of the holders of the Senior Guaranteed Obligations to
receive payments or distribution of assets of the Guarantor applicable to the
Senior Guaranteed Obligations until all amounts owing on the Guaranteed
Obligations shall be paid in full.
Section 10.05. Payment in Trust. The Administrative Agent and each of
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the Banks (or a trustee, representative, or agent acting on their behalf) will
be obligated to hold in trust for, and to pay over promptly to, the holders of
the Senior Guaranteed Obligations (or one or more trustees, representatives, or
agents acting on their behalf) all payments and distributions received by the
Administrative Agent or such Bank in contravention of the restrictions contained
in this Section 10; provided, however, that notwithstanding such restrictions,
the Administrative Agent and the Banks shall be entitled to receive and to
retain any and all payments (a) made in securities of the Guarantor provided the
same are subordinated to the Senior Guaranteed Obligations at least to the same
extent as the Guaranteed Obligations or (ii) made in accordance with any
relevant court order respecting the subordination provided for herein.
Section 10.06. Liens. The Administrative Agent and the Banks will not
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create, assume, or suffer to exist any Lien securing the repayment of the
Guaranteed Obligations. Any such Lien existing in violation of the foregoing
shall be fully subordinate to any Lien in favor of the Senior Administrative
Agent or the Senior Creditors which secures any of the Senior Guaranteed
Obligations. At the request of the Senior Administrative Agent, the
Administrative Agent, the Banks, and the Guarantor will take any and all steps
necessary to fully effect the release of any such Lien.
Section 10.07. Miscellaneous.
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(a) The Administrative Agent, the Banks, and the Guarantor agree to
execute any and all other instruments requested by the Senior Administrative
Agent to further evidence the subordination of the Guaranteed Obligations to the
Senior Guaranteed Obligations as herein provided.
(b) The provisions of this Section 10 are irrevocable and the Senior
Administrative Agent and the Senior Creditors may, without notice to any of the
parties hereto and without impairing or releasing the obligations of the
Guarantor, the Administrative Agent, and the Banks hereunder, (i) create Senior
Guaranteed Obligations by extending credit under the Senior Credit Agreement;
(ii) subject to the limitation on total principal contained in Section 10.01,
change the terms of or increase the amount of the Senior Guaranteed Obligations
by increasing, extending, rearranging, amending, supplementing, or otherwise
modifying any instrument or agreement creating Senior Guaranteed
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Obligations; (iii) sell, exchange, release, or otherwise deal with any
collateral securing any Senior Guaranteed Obligations; (iv) release anyone,
including the Guarantor or any other guarantor, liable in any manner for the
payment or collection of any Senior Guaranteed Obligations; (v) exercise or
refrain from exercising any rights against the Guarantor or any other Person;
and (vi) apply any sums received by any Senior Creditor, from whatever source,
to the payment of the Senior Guaranteed Obligations.
(c) The foregoing provisions will be enforceable against the Administrative
Agent and the Banks, by or on behalf of the holders of the Senior Guaranteed
Obligations and such holders are intended third party beneficiaries of this
Section 10.
Section 11. Miscellaneous.
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11.01. Addresses for Notices. All notices and other communications
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provided for hereunder shall be in writing, including telegraphic communication
and delivered or teletransmitted to the Administrative Agent, as set forth in
the Credit Agreement and to each Guarantor, at the address set forth under such
Guarantor's signature hereto or in the Accession Agreement executed by such
Guarantor, or to such other address as shall be designated by any Guarantor or
the Administrative Agent in written notice to the other parties. All such
notices and other communications shall be effective when delivered or
teletransmitted to the above addresses.
11.02. Amendments, Etc. No waiver of any provision of this Agreement nor
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consent to any departure by any Guarantor therefrom shall be effective unless
the same shall be in writing and signed by the Administrative Agent, the
Majority Banks and the Borrower and no amendment of this Agreement shall be
effective unless the same shall be in writing and signed by each Guarantor and
the Administrative Agent, with the consent of the Majority Banks; provided that
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any amendment or waiver releasing any Guarantor from any liability hereunder
shall be signed by all the Banks; and provided further that any waiver or
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consent shall be effective only in the specific instance and for the specific
purpose for which given. Notwithstanding the foregoing, in the event that any
Subsidiary or Affiliate of the Borrower hereafter is required in a accordance
with the terms of the Credit Agreement or otherwise agrees to become a guarantor
of the Borrower's obligations under the Credit Documents, then such Subsidiary
or Affiliate may become a party to this Agreement by executing an Accession
Agreement ("Accession Agreement") in the form attached hereto as Annex 1 and
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each Guarantor and the Administrative Agent hereby agrees that upon such
Subsidiary's or Affiliate's execution of such Accession Agreement, this
Agreement shall be deemed to have been amended to make such Person a Guarantor
hereunder for all purposes and a party hereto and no signature is required on
behalf of the other Guarantors or the Administrative Agent to make such an
amendment to this Agreement effective.
-12-
11.03. No Waiver; Remedies. No failure on the part of Administrative
-------------------
Agent, the Documentation Agent, the Managing Agents or any Bank to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
11.04. Right of Set-Off. Upon the occurrence and during the continuance of
----------------
any Event of Default, the Administrative Agent, the Documentation Agent, the
Managing Agents and the Banks are hereby authorized at any time, to the fullest
extent permitted by law, to set off and apply any deposits (general or special,
time or demand, provisional or final) and other indebtedness owing by the
Administrative Agent, the Documentation Agent, the Managing Agents or the Banks
to the account of any Guarantor against any and all of the obligations of such
Guarantor under this Agreement, irrespective of whether or not the
Administrative Agent, the Documentation Agent, the Managing Agents or the Banks
shall have made any demand under this Agreement and although such obligations
may be contingent and unmatured. The Administrative Agent, the Documentation
Agent, the Managing Agents and the Banks agree promptly to notify each Guarantor
affected by any such set-off after any such set-off and application made by the
Administrative Agent, the Documentation Agent, the Managing Agents or the Banks
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Administrative Agent, the
Documentation Agent, the Managing Agents and the Banks under this Section 11.04
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) which the Administrative Agent, the Documentation
Agent, the Managing Agents and the Banks may have.
11.05. Continuing Guaranty; Transfer of Interest. This Agreement shall
-----------------------------------------
create a continuing guaranty and shall (a) remain in full force and effect until
payment in full and termination of the Guaranteed Obligations, (b) be binding
upon each Guarantor, its successors and assigns, and (c) inure, together with
the rights and remedies of the Administrative Agent hereunder, to the benefit of
the Administrative Agent, the Documentation Agent, the Managing Agents, the
Banks and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause, when any Bank assigns or
otherwise transfers any interest held by it under the Credit Agreement or other
Credit Document to any other Person pursuant to the terms of the Credit
Agreement or other Credit Document, that other Person shall thereupon become
vested with all the benefits held by such Bank under this Agreement. Upon the
payment in full and termination of the Guaranteed Obligations, the guaranties
granted hereby shall terminate and all rights hereunder shall revert to each
Guarantor to the extent such rights have not been applied pursuant to the terms
hereof. Upon any such termination, the Administrative Agent will, at each
Guarantor's expense, execute and deliver to such Guarantor such documents as
such Guarantor shall reasonably request and take any other actions reasonably
requested to evidence or effect such termination.
-13-
11.06. Governing Law. This Agreement shall be governed by and construed
-------------
and enforced in accordance with, the laws of the State of Texas. Each Guarantor
hereby irrevocably submits to the jurisdiction of any Texas state or federal
court sitting in Dallas, Texas in any action or proceeding arising out of or
relating to this Agreement and the other Credit Documents and such Guarantor
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such court. Each Guarantor hereby
irrevocably waives, to the fullest extent it may effectively do so, any right it
may have to the defense of an inconvenient forum to the maintenance of such
action or proceeding. Each Guarantor hereby agrees that service of copies of the
summons and complaint and any other process which may be served in any such
action or proceeding may be made by mailing or delivering a copy of such process
to such Guarantor at its address specified below. Each Guarantor agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section shall affect the rights of any Bank,
the Documentation Agent or the Administrative Agent to serve legal process in
any other manner permitted by the law or affect the right of any Bank, the
Documentation Agent or the Administrative Agent to bring any action or
proceeding against any Guarantor or its Property in the courts of any other
jurisdiction.
11.07 WAIVERS OF JURY TRIAL. THE GUARANTORS HEREBY IRREVOCABLY AND
---------------------
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATING TO THIS
AGREEMENT OR THE NOTES OR ANY OTHER CREDIT DOCUMENT OR TO ANY COUNTERCLAIM
THEREIN.
11.08. ENTIRE AGREEMENT. PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS
----------------
AND COMMERCE CODE, A LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED IN THE LOAN
AGREEMENT EXCEEDS $50,000 IN VALUE IS NOT ENFORCEABLE UNLESS THE LOAN AGREEMENT
IS IN WRITING AND SIGNED BY THE PARTY TO BE BOUND OR THAT PARTY'S AUTHORIZED
REPRESENTATIVE.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO AN AGREEMENT SUBJECT TO THE
PRECEDING PARAGRAPH SHALL BE DETERMINED SOLELY FROM THE WRITTEN LOAN AGREEMENT
AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED
INTO THE LOAN AGREEMENT. THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS, AS
DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
[INTENTIONALLY BLANK]
-14-
Each Guarantor has caused this Agreement to be duly executed as of the date
first above written.
GUARANTORS:
AMERICAN GENERAL HOSPITALITY
CORPORATION, a Maryland corporation
By:__________________________________________
Name:________________________________________
Title:_______________________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-15-
AGH UPREIT, LLC, a Delaware limited liability company
By: American General Hospitality Corporation, member
By:__________________________________________
Name:________________________________________
Title:_______________________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-16-
3100 GLENDALE JOINT VENTURE,
an Ohio general partnership
By: AGH UPREIT, LLC, its partner
By: American General Hospitality
Corporation, member
By:____________________________________
Name:__________________________________
Title:_________________________________
By: American General Hospitality Operating
Partnership, L.P., member
By: AGH GP, Inc., its general partner
By:_______________________________
Name:_____________________________
Title:____________________________
By: American General Hospitality Operating
Partnership, L.P., its partner
By: AGH GP, Inc., general partner
By:____________________________________
Name:__________________________________
Title:_________________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-17-
MDV LIMITED PARTNERSHIP,
a Texas limited partnership
By: AGH UPREIT LLC, its general partner
By: American General Hospitality Corporation,
member
By:______________________________________
Name:____________________________________
Title:___________________________________
By: American General Hospitality Operating
Partnership, L.P., member
By: AGH GP, Inc.,
general partner
By:_________________________________
Name:_______________________________
Title:______________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-18-
MADISON MOTEL ASSOCIATES,
a Wisconsin general partnership
By: AGH UPREIT, LLC, its partner
By: American General Hospitality
Corporation, member
By:___________________________________
Name:_________________________________
Title:________________________________
By: American General Hospitality Operating
Partnership, L.P., member
By: AGH GP, Inc., its general partner
By:___________________________________
Name:_________________________________
Title:________________________________
By: American General Hospitality Operating
Partnership, L.P., its partner
By: AGH GP, Inc., general partner
By:___________________________________
Name:_________________________________
Title:________________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-19-
183 HOTEL ASSOCIATES, LTD.,
a Texas limited partnership
By: AGH UPREIT LLC, its general partner
By: American General Hospitality Corporation,
member
By:___________________________________
Name:_________________________________
Title:________________________________
By: American General Hospitality Operating
Partnership, L.P., member
By: AGH GP, Inc.,
general partner
By:______________________________
Name:____________________________
Title:___________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ASSOCIATES, LTD.,
a Texas limited partnership
By: AGH UPREIT LLC, its general partner
By: American General Hospitality Corporation,
member
By:___________________________________
Name:_________________________________
Title:________________________________
By: American General Hospitality Operating
Partnership, L.P., member
By: AGH GP, Inc.,
general partner
By:______________________________
Name:____________________________
Title:___________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-21-
2929 ▇▇▇▇▇▇▇▇ LIMITED LIABILITY COMPANY, a Delaware
limited liability company
By: AGH UPREIT, LLC, its member
By: American General Hospitality
Corporation, member
By:___________________________________
Name:_________________________________
Title:________________________________
By: American General Hospitality Operating
Partnership, L.P., member
By: AGH GP, Inc., general partner
By:___________________________________
Name:_________________________________
Title:________________________________
By: American General Hospitality Operating
Partnership, L.P., its member
By: AGH GP, Inc., general partner
By:___________________________________
Name:_________________________________
Title:________________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ PARTNERS, LTD.,
a Florida limited partnership
By: AGH UPREIT LLC, general partner
By: American General Hospitality
Corporation, member
By:___________________________________
Name:_________________________________
Title:________________________________
By: American General Hospitality Operating
Partnership, L.P., member
By: AGH GP, Inc., general partner
By:___________________________________
Name:_________________________________
Title:________________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-23-
BCHI ACQUISITION, L.L.C.,
a Delaware limited liability company
By: AGH UPREIT LLC, its member
By: American General Hospitality
Corporation, member
By:___________________________________
Name:_________________________________
Title:________________________________
By: American General Hospitality
Operating Partnership, L.P., member
By: AGH GP, Inc., general partner
By:______________________________
Name:____________________________
Title:___________________________
By: American General Hospitality Operating
Partnership, L.P., its member
By: AGH GP, Inc., general partner
By:___________________________________
Name:_________________________________
Title:________________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-24-
COCOA BEACH HOTELS, LTD.,
a Florida limited partnership
By: AGH UPREIT LLC, its general partner
By: American General Hospitality
Corporation, Member
By:______________________________
Name:____________________________
Title:___________________________
By: American General Hospitality
Operating Partnership, L.P., Member
By: AGH GP, INC., its general
partner
By:_________________________
Name:_______________________
Title:______________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇▇▇ ▇-▇▇ LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: AGH UPREIT LLC, its general partner
By: American General Hospitality
Corporation, Member
By:______________________________
Name:____________________________
Title:___________________________
By: American General Hospitality
Operating Partnership, L.P., Member
By: AGH GP, INC., its general
partner
By:_________________________
Name:_______________________
Title:______________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-26-
EXHIBIT "I"
[LETTER HEAD OF BATTLE ▇▇▇▇▇▇ LLP APPEARS HERE]
February 13, 1998
Societe Generale
Southwest Agency
▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Bank One, Texas, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, 4th Floor
Commercial Real Estate Department Lending
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
The Banks and the other financial
institutions party to the hereinafter
described Credit Agreement
Re: Subordinate Unsecured Credit Agreement dated of even date
herewith (the "CREDIT AGREEMENT") by and between American General
Hospitality Operating Partnership, L.P., a Delaware limited
partnership (the "BORROWER") and Societe Generale, a French
banking corporation acting through its Southwest Agency as
arranger, syndication agent and documentation agent; Bank One,
Texas N.A., as administrative agent, The Bank of Nova Scotia and
▇▇▇▇▇ Fargo Bank, National Association, as co-agents and other
financial institutions party thereto dated as of even date
herewith (the "BANKS")
----------------------
BATTLE ▇▇▇▇▇▇ LLP Page 2
Ladies and Gentlemen:
We have acted as counsel to the Borrower in connection with the Credit
Agreement. This opinion is being furnished pursuant to Section 3.01(a)(v) of the
Credit Agreement. Capitalized terms used herein and not defined herein shall
have the meanings ascribed to such terms in the Credit Agreement.
In connection with this opinion, we have examined the following
materials:
(a) the Credit Agreement and the other documents executed and
delivered in connection therewith identified on Schedule I hereto
----------
(collectively referred to herein as the "CREDIT DOCUMENTS");
(b) the certificate of limited partnership, as amended (the "BORROWER
PARTNERSHIP CERTIFICATE"), of the Borrower, as certified by the Secretary of
State of the State of Delaware, as being as a true and correct copy of such
document as filed in the office of the Secretary of State;
(c) the amended and restated agreement of limited partnership (the
"OPERATING PARTNERSHIP AGREEMENT") of the Borrower, dated as of July 31, 1996,
as certified by the Secretary of AGH GP, Inc., a Nevada corporation ("AGH GP"),
as general partner of the Borrower, on the date hereof as being complete,
correct and in effect;
(d) the amended and restated articles of incorporation (the
"CHARTER") of American General Hospitality Corporation (the "COMPANY"), as
certified by the State Department of Assessments and Taxation of the State of
Maryland as being a true and complete copy of such document as filed in the
office of the State Department of Assessments and Taxation (the "SDAT");
(e) the Bylaws of the Company as certified by the Secretary of the
Company and as the case may be, as of the date hereof as being complete, correct
an in effect;
(f) the certificate of limited partnership (the "DURHAM PARTNERSHIP
CERTIFICATE") of Durham I-8 Limited Partnership, a Delaware limited partnership
("DURHAM" and together with AGH GP, the Company and the Borrower, each a "LOAN
PARTY" and, collectively, the "LOAN PARTIES"), as certified by the Secretary of
State of Delaware, as being as a true and correct copy of such document as filed
in the office of the Secretary of State;
(g) the amended and restated agreement of limited partnership (the
"DURHAM PARTNERSHIP AGREEMENT") of Durham, dated as of November 30, 1997, as
certified by the Secretary of AGH UPREIT LLC ("UPREIT") as general partner of
Durham on the date hereof as being complete, correct and in effect;
(h) certificates of good standing issued by the State of
incorporation or formation, as applicable, of each Loan Party;
(i) a certificate of the Secretary of the Company and a certificate
of the Secretary of AGH GP, each dated as of the date hereof, as to the
incumbency and signatures of certain officers of the Company and AGH GP,
respectively;
(j) an executed copy of each of the Credit Documents; and
(k) the other instruments and documents delivered at today's closing,
including certificates or telegrams of public officials as to matters set forth
therein and certificates of representatives of the Borrower as to matters set
forth therein.
In rendering this opinion, we have assumed the capacity to sign and
the genuineness of all signatures of all persons executing agreements,
instruments or documents examined or relied upon by us, the authenticity of all
agreements, instruments or documents submitted to us as originals and the
conformity with the original agreements, instruments or documents of all
agreements, instruments or documents submitted to us as copies.
We have also assumed that as to all parties other than Loan Parties
the due authorization, execution, acknowledgement as indicated thereon and
delivery of documents referred to herein, and the validity, binding effect and
enforceability thereof against all parties thereto other than the Loan Parties
and that each of the Agents and each of the Banks has full power, authority and
legal right, under its charter and other governing documents and all applicable
laws to execute, deliver and perform their respective obligations under the
Credit Agreement, the other Credit Documents and the other documents referred to
therein and herein to which it is a party.
With respect to matters of fact, we have relied upon the written
statements and certificates of officers AGH GP (on behalf of the Borrower), or
UPREIT (on behalf of Durham) and authorized representatives of the Company
(including, without limitation, in the certificate attached hereto as Exhibit A
---------
and referred to herein as the "OFFICERS CERTIFICATE"), representations made by
the Borrower in the Credit Documents, and certificates of public officials.
Where matters are stated to be "to the best of our knowledge" or "known to us,"
our knowledge is limited to the actual knowledge of those attorneys in our
office who have directly participated in this engagement, their review of
documents provided to us by the Loan Parties in connection with this engagement
and inquires of officers of AGH GP, UPREIT and the Company, the results of which
are reflected in the Officers Certificate. We have not independently verified
the accuracy of the matters set forth in the written statements or certificates
upon which we have relied, including the organization, existence, good standing,
assets, business or affairs of the Loan Parties.
BATTLE ▇▇▇▇▇▇ LLP Page 4
Insofar as our opinion relates to matters of (i) Maryland law, we
have relied upon the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll, LLP addressed
to us, dated the date hereof, a copy of which is attached hereto as Exhibit B
---------
and (ii) Nevada law, we have relied exclusively upon the opinion ▇▇▇▇▇▇▇▇
Carano ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP a copy of which is attached
hereto as Exhibit C.
---------
Except for the opinions set forth in paragraphs (1) through (3)
below, we express no opinions and no opinions should be implied.
We are not admitted to practice law in any jurisdiction other
than the State of New York and we do not express any opinion as to the laws of
any states or jurisdictions except as to New York law, the Delaware General
Corporation Law, the Delaware Revised Uniform Limited Partnership Act, the
Delaware Limited Liability Company Act and the Federal law of the United States
of America.
Upon the basis of and subject to the foregoing and solely in
reliance thereon, we are of the opinion that:
1. Each of the Borrower and Durham is a limited partnership
duly formed validly existing and in good standing under the laws of its
jurisdiction of formation with full partnership power and authority to own,
lease and operate its properties and to conduct its business as currently
conducted and to execute and perform its obligations under the Credit Documents
to which it is a party.
2. The execution and delivery of, and the performance by each
of the Borrower and Durham of its obligations under, the Credit Documents to
which it is a party have been duly and validly authorized.
3. Each of the Credit Documents has been duly executed and
delivered by each Loan Party which is a party thereto.
This opinion is being rendered to you and the other Banks and the
Bank's respective counsel for your and their sole use and may not be made
available to or relied upon by any other person, firm or entity without our
express prior written consent except for future Banks or participants in the
Credit Agreement.
Very truly yours,
/s/ Battle ▇▇▇▇▇▇ LLP
BATTLE ▇▇▇▇▇▇ LLP
SCHEDULE I
----------
CREDIT DOCUMENTS
----------------
1. Notes in the aggregate amount of $100,000,000 executed by the Borrower in
favor of Bank One, SG, Co-Agents and the banks;
2. Environmental Indemnification Agreement by the Company and certain of its
subsidiaries in favor of the Agents and the banks; and
3. Subordinate Guaranty and Contribution Agreement by the Company and certain
of its subsidiaries in favor of the Agents and the banks.
Exhibit A
---------
OFFICER'S CERTIFICATE
Exhibit B
---------
[Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP]
Exhibit C
---------
[Opinion Of ▇▇▇▇▇▇▇▇ Carano as to Nevada Law]
SCHEDULE I
----------
CREDIT DOCUMENTS
----------------
1. Notes in the aggregate amount of $100,000,000 executed by the Borrower in
favor of Bank One, SG, Co-Agents and the banks;
2. Environmental Indemnification Agreement by the Company and certain of its
subsidiaries in favor of the Agents and the banks; and
3. Subordinate Guaranty and Contribution Agreement by the Company and certain
of its subsidiaries in favor of the Agents and the banks.
SUBORDINATE UNSECURED CREDIT AGREEMENT
Schedule 1.01(a)
BANK COMMITMENT
---- ----------
Societe Generale, Southwest Agency $ 20,000,000.00
Bank One, Texas, N.A. $ 15,000,000.00
▇▇▇▇▇ Fargo Bank, National Association $ 30,000,000.00
The Bank of Nova Scotia $ 5,000,000.00
NationsBank of Texas, N.A. $ 15,000,000.00
BANKBOSTON, N.A. $ 15,000,000.00
---------------
TOTAL $100,000,000.00
===============
SCHEDULE 1.01 (b)
AMERICAN GENERAL HOSPITALITY CORPORATION
BORROWING BASE COMPLIANCE CERTIFICATE
DECEMBER 31, 1997
------------------------------------------------------------------------------------------------------------------------------
Hotel Properties Owned by Type of Service Total Rooms Hotel Eligible
the Parent at Parent's (Limited/Extended Number Out of Acquisition Yes - Y Adjusted
Subsidiaries Stay/Full) of Rooms Service Date No - N EBITDA EBITDA
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Eligible Properties
------------------------------------------------------------------------------------------------------------------------------
1. Holiday Inn, DFW West, Full Service 243 31-Jul-95 Y $ 1,735,673 $ 1,487,024
Bedford, TX
------------------------------------------------------------------------------------------------------------------------------
2. Hampton Inn - Richmond, VA Limited Service 124 39 31-Jul-95 Y 1,216,570 1,111,794
------------------------------------------------------------------------------------------------------------------------------
3. Hilton Hotel - Toledo, OH Full Service 213 31-Jul-95 Y 1,045,298 792,323
------------------------------------------------------------------------------------------------------------------------------
4. Holiday Inn - N.O. Full Service 304 31-Jul-95 Y 3,525,305 3,173,783
Airport, Kenner, LA
------------------------------------------------------------------------------------------------------------------------------
5. Crowne Plaza - Madison, WI Full Service 227 31-Jul-95 Y 2,651,247 2,327,254
------------------------------------------------------------------------------------------------------------------------------
6. Holiday Inn - San Jose, CA Full Service 239 31-Jul-95 Y 2,952,221 2,589,050
------------------------------------------------------------------------------------------------------------------------------
7. Wyndham Hotel - Full Service 276 31-Jul-96 Y 1,349,379 1,097,097
Albuquerque, NM
------------------------------------------------------------------------------------------------------------------------------
8. Hotel Maison de Ville - Full Service 23 31-Jul-96 Y 448,717 360,105
New Orleans, LA
------------------------------------------------------------------------------------------------------------------------------
9. Hampton Inn - Ocean City, Limited Service 168 31-Jul-96 Y 1,115,369 1,013,522
MD
------------------------------------------------------------------------------------------------------------------------------
10. Holiday Inn - San Siego, Ca Full Service 317 48 31-Jul-96 Y 2,392,816 2,091,858
------------------------------------------------------------------------------------------------------------------------------
11. Wyndham Hotel - San ▇▇▇▇, Full Service 356 31-Jul-96 Y 3,495,516 3,017,111
CA
------------------------------------------------------------------------------------------------------------------------------
12. Durham ▇▇▇▇▇▇ - ▇▇▇▇▇▇, Full Service 184 08-Jan-97 Y 1,718,195 1,492,107
N.C.
------------------------------------------------------------------------------------------------------------------------------
13. Holiday Inn Resort - Full Service 204 82 21-Nov-95 Y 1838,117 1,578,204
Monteray, CA
------------------------------------------------------------------------------------------------------------------------------
14. Wyndham LBV - Orlando, FL Full Service 480 22-Oct-95 Y 3,484,016 3,009,225
------------------------------------------------------------------------------------------------------------------------------
15. Westin Resort - Key Largo, Full Service 200 17-Mar-97 Y 2,889,885 2,493,768
FL
------------------------------------------------------------------------------------------------------------------------------
16. Wyndham Gardens - Full Service 219 17-Mar-97 Y 1,280,857 1,104,095
Marletta, GA
------------------------------------------------------------------------------------------------------------------------------
17. Holiday Inn - Phoenix, AZ Full Service 249 2 04-Apr-97 Y 1,445,743 1,205,534
------------------------------------------------------------------------------------------------------------------------------
18. Hilton Hotel - Grand Full Service 226 18-Apr-97 Y 1,855,801 1,849,394
Rapids, MI
------------------------------------------------------------------------------------------------------------------------------
19. Marriott West Loop - Full Service 302 25-Jun-97 Y 2,651,985 2,368,847
Houston, TX
------------------------------------------------------------------------------------------------------------------------------
▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ - 25-Jun-97 935,583 843,338
Houston, TX
------------------------------------------------------------------------------------------------------------------------------
20. Ralison Twin Towers - Full Service 742 25-Jun-97 Y 8,383,761 7,382,733
Orlando, FL
------------------------------------------------------------------------------------------------------------------------------
21. Hilton Hotel - Coral Full Service 285 54 27-Jun-97 Y 2,802,481 2,560,017
Beach, FL
------------------------------------------------------------------------------------------------------------------------------
22. Holiday Inn - Bucks Full Service 215 20-Jun-97 Y 2,399,851 2,076,030
County, PA
------------------------------------------------------------------------------------------------------------------------------
23. Holiday Inn - Alexandria, Full Service 176 22-Jan-96 Y 1,851,320 1,673,061
VA
------------------------------------------------------------------------------------------------------------------------------
24. Ramada Old Town - Full Service 258 22-Jan-96 Y 2,241,651 1,921,645
Alexandria, VA
------------------------------------------------------------------------------------------------------------------------------
25. Holiday Inn - Annapolis, MD Full Service 280 22-Jan-96 Y 1,519,896 1,380,723
------------------------------------------------------------------------------------------------------------------------------
26. Holiday Inn BLM - Hanover, Limited Service 159 22-Jan-96 Y 1,353,241 1,219,997
MD
------------------------------------------------------------------------------------------------------------------------------
27. Courtyard by ▇▇▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇-▇▇▇-▇▇ Y 783,247 690,871
Durham, NC
------------------------------------------------------------------------------------------------------------------------------
28. Sharaton Crossroads - Full Service 225 08-Jan-96 Y 4,051,005 3,448,127
Mahwah, NJ
------------------------------------------------------------------------------------------------------------------------------
29. Ramada Inn - Mahwah, NJ Full Service 128 08-Jan-96 Y 1,329,122 1,212,293
------------------------------------------------------------------------------------------------------------------------------
30. Crowne Plaza - Las Vegas, Full Service 201 08-Jan-96 Y 2,419,526 2,135,153
NV
------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Hotel Properties Owned by Adjusted Adjusted EBITDA Cost Cost Cost Basis
the Parent at Parent's EBITDA Divided by 10% Basis Basis (Limited/
Subsidiaries Seasoned Seasoned All Hotels New Hotels Extended Stay)
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Eligible Properties
----------------------------------------------------------------------------------------------------------------------
1. Holiday Inn, DFW West, $1,487,024 $14,870,240 $ 13,650,714 $ - $ -
Bedford, TX
----------------------------------------------------------------------------------------------------------------------
2. Hampton Inn - Richmond, VA - - 8,165,545 8,165,545 8,165,545
----------------------------------------------------------------------------------------------------------------------
3. Hilton Hotel - Toledo, OH 792,323 7,923,228 10,868,248 - -
----------------------------------------------------------------------------------------------------------------------
4. Holiday Inn - N.O. 3,173,763 31,737,828 28,435,480 - -
Airport, Kenner, LA
----------------------------------------------------------------------------------------------------------------------
5. Crowne Plaza - Madison, WI 2,327,254 23,272,540 23,280,637 - -
----------------------------------------------------------------------------------------------------------------------
6. Holiday Inn - San Jose, CA - - 21,163,741 21,153,741 -
----------------------------------------------------------------------------------------------------------------------
7. Wyndham Hotel - - - 10,028,914 19,028,994 -
Albuquerque, NM
----------------------------------------------------------------------------------------------------------------------
8. Hotel Maison de Ville - 380,195 3,801,946 3,289,203 - -
New Orleans, LA
----------------------------------------------------------------------------------------------------------------------
9. Hampton Inn - Ocean City, - - 9,962,732 9,952,732 9,952,732
MD
----------------------------------------------------------------------------------------------------------------------
10. Holiday Inn - San Siego, Ca - - 22,437,436 22,437,438 -
----------------------------------------------------------------------------------------------------------------------
11. Wyndham Hotel - San ▇▇▇▇, - - 30,001,018 30,006,018 -
CA
----------------------------------------------------------------------------------------------------------------------
12. Durham ▇▇▇▇▇▇ - ▇▇▇▇▇▇, - - 15,471,747 15,471,747 -
N.C.
----------------------------------------------------------------------------------------------------------------------
13. Holiday Inn Resort - - - 17,676,654 17,376,651 -
Monteray, CA
----------------------------------------------------------------------------------------------------------------------
14. Wyndham LBV - Orlando, FL - - 44,617,816 41,647,995 -
----------------------------------------------------------------------------------------------------------------------
15. Westin Resort - Key Largo, - - 20,340,011 29,340,099 -
FL
----------------------------------------------------------------------------------------------------------------------
16. Wyndham Gardens - - - 18,050,129 16,680,129 -
Marletta, GA
----------------------------------------------------------------------------------------------------------------------
17. Holiday Inn - Phoenix, AZ - - 21,121,039 21,121,038 -
----------------------------------------------------------------------------------------------------------------------
18. Hilton Hotel - Grand - - 17,070,985 17,070,918 -
Rapids, MI
----------------------------------------------------------------------------------------------------------------------
19. Marriott West Loop - - - 28,910,433 26,810,433 -
Houston, TX
----------------------------------------------------------------------------------------------------------------------
▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ - - - 12,893,005 12,893,808 -
Houston, TX
----------------------------------------------------------------------------------------------------------------------
20. Ralison Twin Towers - - - 80,870,002 80,570,092 -
Orlando, FL
----------------------------------------------------------------------------------------------------------------------
21. Hilton Hotel - Coral - - 23,794,328 23,794,328 -
Beach, FL
----------------------------------------------------------------------------------------------------------------------
22. Holiday Inn - Bucks - - 21,847,142 21,87,142 -
County, PA
----------------------------------------------------------------------------------------------------------------------
23. Holiday Inn - Alexandria, - - 15,315,875 15,316,675 -
VA
----------------------------------------------------------------------------------------------------------------------
24. Ramada Old Town - - - 17,241,100 17,241,100 -
Alexandria, VA
----------------------------------------------------------------------------------------------------------------------
25. Holiday Inn - Annapolis, MD - - 14,329,050 14,329,050 -
----------------------------------------------------------------------------------------------------------------------
26. Holiday Inn BLM - Hanover, - - 6,784,175 6,764,176 6,764,175
MD
----------------------------------------------------------------------------------------------------------------------
27. Courtyard by Marriott - - - 11,501,049 11,501,049 -
Durham, NC
----------------------------------------------------------------------------------------------------------------------
28. Sharaton Crossroads - - - 24,915,000 24,895,000 -
Mahwah, NJ
----------------------------------------------------------------------------------------------------------------------
29. Ramada Inn - Mahwah, NJ - - 8,432,000 8,432,000 -
----------------------------------------------------------------------------------------------------------------------
30. Crowne Plaza - Las Vegas, - - 26,800,000 28,800,000 -
NV
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Hotel Properties Owned by Cost Basis Cost Basis Cost Basis
the Parent at Parent's Non-Wholly Non- Ground
Subsidiaries Owned Franchised Leases
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Eligible Properties
----------------------------------------------------------------------------------------------
1. Holiday Inn, DFW West, $ - $ -
Bedford, TX
----------------------------------------------------------------------------------------------
2. Hampton Inn - Richmond, VA - 10,888,248
----------------------------------------------------------------------------------------------
3. Hilton Hotel - Toledo, OH - -
----------------------------------------------------------------------------------------------
4. Holiday Inn - N.O. - -
Airport, Kenner, LA
----------------------------------------------------------------------------------------------
5. Crowne Plaza - Madison, WI -
----------------------------------------------------------------------------------------------
6. Holiday Inn - San Jose, CA - -
----------------------------------------------------------------------------------------------
7. Wyndham Hotel - - 19,028,991
Albuquerque, NM
----------------------------------------------------------------------------------------------
8. Hotel Maison de Ville - 3,288,203 -
New Orleans, LA
----------------------------------------------------------------------------------------------
9. Hampton Inn - Ocean City, - -
MD
----------------------------------------------------------------------------------------------
10. Holiday Inn - San Siego, Ca - -
----------------------------------------------------------------------------------------------
11. Wyndham Hotel - San ▇▇▇▇, - 30,006,016
CA
----------------------------------------------------------------------------------------------
12. ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇, - -
▇.▇.
----------------------------------------------------------------------------------------------
13. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ - - -
▇▇▇▇▇▇▇▇, ▇▇
----------------------------------------------------------------------------------------------
14. Wyndham LBV - Orlando, FL - -
----------------------------------------------------------------------------------------------
15. Westin Resort - Key Largo, - -
FL
----------------------------------------------------------------------------------------------
16. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - - -
▇▇▇▇▇▇▇▇, ▇▇
----------------------------------------------------------------------------------------------
17. Holiday Inn - Phoenix, AZ - -
----------------------------------------------------------------------------------------------
18. Hilton Hotel - Grand - -
Rapids, MI
----------------------------------------------------------------------------------------------
19. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ - - -
▇▇▇▇▇▇▇, ▇▇
----------------------------------------------------------------------------------------------
▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ - - -
▇▇▇▇▇▇▇, ▇▇
----------------------------------------------------------------------------------------------
20. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - - -
▇▇▇▇▇▇▇, ▇▇
----------------------------------------------------------------------------------------------
21. Hilton Hotel - Coral - -
Beach, FL
----------------------------------------------------------------------------------------------
22. Holiday Inn - Bucks - -
County, PA
----------------------------------------------------------------------------------------------
23. Holiday Inn - Alexandria, - -
VA
----------------------------------------------------------------------------------------------
24. Ramada Old Town - - -
Alexandria, VA
----------------------------------------------------------------------------------------------
25. Holiday Inn - Annapolis, MD - -
----------------------------------------------------------------------------------------------
26. Holiday Inn BLM - Hanover, - -
MD
----------------------------------------------------------------------------------------------
27. Courtyard by Marriott - - -
Durham, NC
----------------------------------------------------------------------------------------------
28. Sharaton Crossroads - - -
Mahwah, NJ
----------------------------------------------------------------------------------------------
29. Ramada Inn - Mahwah, NJ - -
----------------------------------------------------------------------------------------------
30. Crowne Plaza - Las Vegas, - -
NV
----------------------------------------------------------------------------------------------
AMERICAN GENERAL HOSPITALITY CORPORATION
BORROWING BASE COMPLIANCE CERTIFICATE
OCTOBER 31, 1997
------------------------------------------------------------------------------------------------------------------------------
Hotel Properties Owned by Type of Service Total Rooms Hotel Eligible
the Parent at Parent's (Limited/Extended Number Out of Acquisition Yes - Y Adjusted
Subsidiaries Stay/Full) of Rooms Service Date No - N EBITDA EBITDA
Eligible Properties
------------------------------------------------------------------------------------------------------------------------------
31. St. Tropez - Las Vegas, NV Full Service 149 08-Jan-96 Y 2,492,283 2,314,683
------------------------------------------------------------------------------------------------------------------------------
32. Ramada Place - Meriden, CT Full Service 150 08-Jan-96 Y 1,256,418 1,045,649
------------------------------------------------------------------------------------------------------------------------------
33. Tampa Airport Hotel - Full Service 495 13-Feb-96 Y 2,381,327 1,951,714
Tampa, FL
------------------------------------------------------------------------------------------------------------------------------
34. Radisson Inn - Rochester, Full Service 171 13-Feb-96 Y 701,922 525,558
NY
------------------------------------------------------------------------------------------------------------------------------
35. Courtyard By Marriott - Full Service 276 13-Feb-96 Y 2,670,662 2,625,052
Marina del Ray, CA
------------------------------------------------------------------------------------------------------------------------------
36. Courtyard By Marriott - Full Service 134 13-Feb-96 Y 1,822,118 1,839,538
Century City, CA
------------------------------------------------------------------------------------------------------------------------------
37. Holiday Inn - Madeira Full Service 149 13-Feb-96 Y 709,406 641,687
Beach, FL
------------------------------------------------------------------------------------------------------------------------------
38. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Resort - Limited Service 100 13-Feb-96 Y 1,228,204 1,122,877
Key Largo, FL
------------------------------------------------------------------------------------------------------------------------------
39. Holiday Inn - Ft. Full Service 240 13-Feb-96 Y 2,037,728 1,776,859
Lauderdale, FL
------------------------------------------------------------------------------------------------------------------------------
40. Courtyard By Marriott LBV Full Service 323 13-Feb-96 Y 4,024,708 3,458,819
- Orlando, FL
------------------------------------------------------------------------------------------------------------------------------
41. Clearwater Beach Resort - Full Service 428 13-Feb-96 Y 6,216,622 4,514,218
Clearwater FL
------------------------------------------------------------------------------------------------------------------------------
Total Borrowing Base Pool 9,858 225 $ 94,803,697 $ 12,001,177
------------------------------------------------------------------------------------------------------------------------------
2.3%
------------------------------------------------------------------------------------------------------------------------------
42. Holiday Inn - St. Louis, MO Full Service 120 13-Feb-96 N 814,269 698,688
------------------------------------------------------------------------------------------------------------------------------
43. Holiday Inn - Richmond, VA Full Service 280 13-Feb-96 N 1,291,114 1,074,008
------------------------------------------------------------------------------------------------------------------------------
44. Ramada Inn Gulfview - Full Service 789 13-Feb-96 N 1,913,602 1,718,928
Clearwater, FL
------------------------------------------------------------------------------------------------------------------------------
45. Lodge At The Seaport - Limited Service 77 13-Feb-96 N 584,428 610,911
Mystic, CT
------------------------------------------------------------------------------------------------------------------------------
46. Four Points Hotel - Mt. Full Service 124 08-Jan-96 N 612,599 435,455
Arlington, NJ
------------------------------------------------------------------------------------------------------------------------------
47. Holiday Inn DFW South, Full Service 409 31-Jul-96 N 3,421,916 2,955,108
Irving TX
------------------------------------------------------------------------------------------------------------------------------
48. Courtyard By Marriott - Full Service 165 31-Jul-96 N 2,003,049 1,768,258
Secaucus, NJ
------------------------------------------------------------------------------------------------------------------------------
49. Radisson Hotel, Arlington Full Service 201 24-Feb-97 N 1,380,060 1,161,033
Heights, IL
------------------------------------------------------------------------------------------------------------------------------
50. Double Tree Galaria, Full Service 165 28 17-Mar-97 N 1,406,902 1,818,142
Atlanta, GA
------------------------------------------------------------------------------------------------------------------------------
51. Holiday Inn, Chicago, IL Full Service 507 03-Feb-96 N 5,117,452 4,146,141
------------------------------------------------------------------------------------------------------------------------------
52. Crowne Plaza, Portland, OR Full Service 161 08-Jan-96 N 2,176,725 1,947,995
------------------------------------------------------------------------------------------------------------------------------
53. Ramada Plaza Hotel, Full Service 155 08-Jan-96 N 2,451,228 2,212,342
Shallon, CT
------------------------------------------------------------------------------------------------------------------------------
Total Parent 12,699 254 $117,668,626 $101,849,075
------------------------------------------------------------------------------------------------------------------------------
1.0%
------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Hotel Properties Owned by Adjusted Adjusted EBITDA Cost Cost Cost Basis
the Parent at Parent's EBITDA Divided by 10% Basis Basis (Limited/
Subsidiaries Seasoned Seasoned All Hotels New Hotels Extended Stay)
Eligible Properties
--------------------------------------------------------------------------------------------------------------------
31. St. Tropez - Las Vegas, NV - - 26,355,000 28,355,000 -
--------------------------------------------------------------------------------------------------------------------
32. Ramada Place - Meriden, CT - - 9,785,000 1,785,000 -
--------------------------------------------------------------------------------------------------------------------
33. Tampa Airport Hotel - - - 23,045,408 23,845,408 -
Tampa, FL
--------------------------------------------------------------------------------------------------------------------
34. Radisson Inn - Rochester, - - 7,216,181 7,216,181 -
NY
--------------------------------------------------------------------------------------------------------------------
35. Courtyard By Marriott - - - 27,213,151 27,241,161 -
Marina del Ray, CA
--------------------------------------------------------------------------------------------------------------------
36. Courtyard By Marriott - - - 19,180,537 18,160,537 -
Century City, CA
--------------------------------------------------------------------------------------------------------------------
37. Holiday Inn - Madeira - - 15,240,767 16,240,787 -
Beach, FL
--------------------------------------------------------------------------------------------------------------------
38. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Resort - - - 15,245,449 15,245,449 15,245,449
Key Largo, FL
--------------------------------------------------------------------------------------------------------------------
39. Holiday Inn - Ft. - - 19,738,782 19,798,782 -
Lauderdale, FL
--------------------------------------------------------------------------------------------------------------------
40. Courtyard By Marriott LBV - - 46,979,146 46,979,145 -
- Orlando, FL
--------------------------------------------------------------------------------------------------------------------
41. Clearwater Beach Resort - - - 52,075,112 12,076,112 -
Clearwater FL
--------------------------------------------------------------------------------------------------------------------
Total Borrowing Base Pool $8,140,878 $81,408,782 $ 806,787,837 $ 620,261,606 $42,137,901
--------------------------------------------------------------------------------------------------------------------
4.6%
--------------------------------------------------------------------------------------------------------------------
42. Holiday Inn - St. Louis, MO - - 6,657,600 4,067,500 -
--------------------------------------------------------------------------------------------------------------------
43. Holiday Inn - Richmond, VA - - 9,742,000 9,742,500 -
--------------------------------------------------------------------------------------------------------------------
44. Ramada Inn Gulfview - - - 21,619,687 21,619,687 -
Clearwater, FL
--------------------------------------------------------------------------------------------------------------------
45. Lodge At The Seaport - - - 5,582,800 5,582,600 5,682,500
Mystic, CT
--------------------------------------------------------------------------------------------------------------------
46. Four Points Hotel - Mt. - - 4,700,000 4,700,000 -
Arlington, NJ
--------------------------------------------------------------------------------------------------------------------
47. Holiday Inn DFW South, - - 27,914,872 27,914,612 -
Irving TX
--------------------------------------------------------------------------------------------------------------------
48. Courtyard By Marriott - 1,768,258 17,681,158 8,167,886 - -
Secaucus, NJ
--------------------------------------------------------------------------------------------------------------------
49. Radisson Hotel, Arlington - - 12,241,000 12,241,000 -
Heights, IL
--------------------------------------------------------------------------------------------------------------------
50. Double Tree Galaria, - - 21,083,487 21,883,487 -
Atlanta, GA
--------------------------------------------------------------------------------------------------------------------
51. Holiday Inn, Chicago, IL - - 65,600,000 65,600,000 -
--------------------------------------------------------------------------------------------------------------------
52. Crowne Plaza, Portland, OR - - 24,875,000 24,875,000 -
--------------------------------------------------------------------------------------------------------------------
53. Ramada Plaza Hotel, - - 14,525,000 14,525,000 -
Shallon, CT
--------------------------------------------------------------------------------------------------------------------
Total Parent $8,905,834 $99,081,331 $1,128,787,070 $1,044,102,862 $47,730,401
--------------------------------------------------------------------------------------------------------------------
4.2%
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Hotel Properties Owned by Cost Basis Cost Basis Cost Basis
the Parent at Parent's Non-Wholly Non- Ground
Subsidiaries Owned Franchised Leases
Eligible Properties
--------------------------------------------------------------------------------------------
31. St. Tropez - Las Vegas, NV 28,355,000 -
--------------------------------------------------------------------------------------------
32. Ramada Place - Meriden, CT - -
--------------------------------------------------------------------------------------------
33. Tampa Airport Hotel - 23,945,406 -
Tampa, FL
--------------------------------------------------------------------------------------------
34. Radisson Inn - Rochester, - 7,216,191
NY
--------------------------------------------------------------------------------------------
35. Courtyard By Marriott - - -
Marina del Ray, CA
--------------------------------------------------------------------------------------------
36. Courtyard By Marriott - - -
Century City, CA
--------------------------------------------------------------------------------------------
37. ▇▇▇▇▇▇▇ ▇▇▇ - ▇▇▇▇▇▇▇ - -
▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------------------
38. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Resort - - -
Key Largo, FL
--------------------------------------------------------------------------------------------
39. Holiday Inn - Ft. - -
Lauderdale, FL
--------------------------------------------------------------------------------------------
40. Courtyard By Marriott LBV - 46,978,146
- Orlando, FL
--------------------------------------------------------------------------------------------
41. Clearwater Beach Resort - 62,076,112 52,075,112
Clearwater FL
--------------------------------------------------------------------------------------------
Total Borrowing Base Pool $ - $105,553,721 $161,173,709
--------------------------------------------------------------------------------------------
0.0% 11.7% 10.3%
--------------------------------------------------------------------------------------------
42. Holiday Inn - St. Louis, MO 8,657,600 - -
--------------------------------------------------------------------------------------------
43. Holiday Inn - Richmond, VA 9,742,600 - -
--------------------------------------------------------------------------------------------
44. Ramada Inn Gulfview - 21,619,687 - -
Clearwater, FL
--------------------------------------------------------------------------------------------
45. Lodge At The Seaport - 6,592,600 6,692,500
Mystic, CT
--------------------------------------------------------------------------------------------
46. Four Points Hotel - Mt. - 4,790,000
Arlington, NJ
--------------------------------------------------------------------------------------------
47. Holiday Inn DFW South, - -
Irving TX
--------------------------------------------------------------------------------------------
48. Courtyard By Marriott - - 8,187,880
Secaucus, NJ
--------------------------------------------------------------------------------------------
49. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ - -
▇▇▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------------------
50. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, - -
▇▇▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------------------
51. Holiday Inn, Chicago, IL - -
--------------------------------------------------------------------------------------------
52. Crowne Plaza, Portland, OR - -
--------------------------------------------------------------------------------------------
53. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, - -
▇▇▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------------------
Total Parent $ 43,312,111 $111,246,221 $178,131,888
--------------------------------------------------------------------------------------------
3.8% 9.8% 10.9%
--------------------------------------------------------------------------------------------
SCHEDULE 1.01(c)
ENGINEER REPORT
SCOPE OF SERVICES
PROPERTY CONDITION REVIEW
(PCR)
ASSIGNMENT OBJECTIVES
---------------------
The purpose of the Property Condition Review (PCR) is: To determine the existing
conditions of the building(s) and its systems including structural, plumbing,
heating and ventilating, air conditioning, electrical, fire protection, finish
materials, exterior facades, roof, and site amenities. To identify any areas of
materials which may require repair or corrective action due to deferred
maintenance or present deficient conditions. To identify and list any
outstanding code violations against the property on file with the various
Municipal and Federal agencies, including the local building department, fire
department, etc. To evaluate the adequacy of the capacities of the HVAC and
electrical systems. To perform an Americans with Disabilities Act (ADA) survey
of the existing building(s) and property to determine compliance with the
legislation. To estimate the cost of the required remedial work indicated by any
of the preceding determinations. Note: The Property Condition Review (PCR)
assignment does not include any work with environmental issues, but Consultant
should be generally aware of and note any obvious existing or potential
conditions. Consultant shall utilize personnel having the appropriate
professional designations for those tasks outlined above (at a minimum, an ALA
and PE).
The Property Condition Review (PCR) assignment should include, at a minimum, a
review and description of the following aspects of the Project:
1. A description of the site and all improvements thereon, based upon field
observations as well as a review of all available documents.
2. Determine the general conformance of visible construction of the building
and site development to the construction documents, soils report, and
industry standards for such construction.
3. Consultant shall list all codes, regulations and public sector criteria
with which the Project must comply, including special permits, zoning,
development orders and other actions of local, state, and federal
authorities. Copies of the actual documents (building permits,
certificates of occupancy, etc.) should be included in the report.
4. Review of existing conditions of the building including exterior, roof,
interior spaces, MEP systems, structural members (including seismic
conditions, where applicable), site drainage, parking, landscaping and site
utilities; with conclusions and recommendations for conceivable repairs and
deficiencies along with cost estimates for the suggested repairs.
Estimates should be provided in the following format: IMMEDIATE, SHORT-
TERM (1-5 years), and LONG-TERM REPAIRS (1-10 years).
5. Review should include interviews and discussions with the property manager,
building engineer, maintenance staff, etc. Interior spaces reviewed should
include an adequate number of units or leased spaces to conclude an
opinion.
6. Determine the appropriateness of the existing building materials found in
place, with regard to the need for extraordinary maintenance or low
durability potential, and with respect to the quality of materials and
findings for the type of facility as built.
7. Conduct a replacement cost analysis (insurable value) to determine the
potential cost of all construction in current year's dollars adjusted for
project location.
8. Consultant shall determine and state the estimated remaining useful life of
the property.
9. Conduct a through review of the overall project for owner-related Americans
with Disabilities Act (ADA) requirements to determine compliance with this
legislation, listing all current violations and cost estimates for their
recommended implementation.
10. Consultant shall provide two original reports, including color photographs
with labeled descriptions to more clearly define examples of unique
features, overall building condition, defective conditions and potential
repair/maintenance requirements as determined by any of the proceeding
findings. Consultant shall also provide statement of qualifications
information on their respective firm, including evidence of required
insurance coverages (naming Societe Generale, Southwest Agency, as
additional insured).
SAMPLE OUTLINE REPORT FORMAT
PROPERTY CONDITION REVIEW
-------------------------
I. Executive Summary
II. Objectives
III Project Description and Overview
IV. Replacement Cost Analysis
V. ADA Survey Results
VI. Conclusions
VII. Project Documentation Log - listing and copies of documents received and
reviewed.
VIII Project Observations - note date of review, parties present, and
interviews held.
IX. Photographs
SCHEDULE 1.01(d)
APPROVED ENGINEERS
SOCIETE GENERALE
U.S. REAL ESTATE GROUP
May 30, 1997
APPROVED LIST OF CONSULTANTS
PROPERTY CONDITION REVIEW (P? & DOCUMENT AND CONSTRUCTION REVIEW (DCR)
-----------------------------------------------------------------------
▇▇▇▇▇▇▇ CONSULTANTS, INC. CONSTRUCTION ASSET ADVISORS, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
THE BENTLEY GROUP WOZGROUP
The Lincoln Building ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ FAX
EMJ CONSTRUCTION CONSULTANTS INC. ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, INC.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ FAX (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, INC. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & ASSOC., INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
HNTB CORPORATION ▇▇▇▇/▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Denver, CO
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ T. ▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ & PARTNERS, INC. LAW ENGINEERING
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Park Central I, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ INTERNATIONAL
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇/▇▇▇ ▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE 1.01(e)
ENVIRONMENTAL REPORT
SCOPE OF SERVICES
PHASE I ENVIRONMENTAL SITE ASSESSMENT
(ESA)
ASSIGNMENT OBJECTIVES
---------------------
The Phase I Environmental Site Assessment (ESA) survey is for the determination
of the condition of the Property (building(s) and site) as it relates to any
existing and potential hazardous waste materials or situations. The Scope of
the ESA should address and comply with the current ASTM Environmental Assessment
standards or the standards set forth below, whichever is more stringent.
The ESA assignment should include at a minimum a review and description of the
following aspects of the Property:
1. Identify project name, legal description, geographic coordinates, local
address, city, county and state for each site.
2. Provide a general description of the Property and site improvements,
including acres, square footages and age of improvements.
3. Identify the inspection date and consultant performing the inspection.
Describe the qualifications of the individual conducting the inspection.
4. Conduct and review a fifty-year recorded Chain of Title search. Identify
and review historical and current property uses/ownership's. Use ▇▇▇▇▇▇▇
maps and local directories when available and appropriate.
5. Review historical and current aerial photographs, and provide in the report
at least two original aerials (one from pre-1975, and one after 1985).
Provide a narrative discussion of the aerial photo review. Aerial
photographs should show the subject Property and surrounding areas.
6. Perform an on-site environmental inspection of the subject Property.
Interview on-site personnel and adjacent property owners where appropriate,
and provide records of all such communications. Review the available on-
site environmental records, including the compliance history of the subject
Property, if any.
7. Review and discuss ground water and surface water characteristics. Include
a general direction of the gradient as well as depth to potable and shallow
groundwater. Include a description of groundwater uses and surface water
bodies on-site. Discuss any available existing data on water quality.
Consultant should have someone with Hydrology or Hydro-Geology credentials
specifically comment on this matter.
8. Review and discus area geology and soil characteristics. Identify the
general soil permeability and corrosiveness tendencies. Discuss any
available data on soil conditions.
1
9. Identify and describe any hazardous materials used or stored on-site,
significant spills, dumping, emissions, evidence of contaminated soils or
water. Specifically,
a) Describe uses for hazardous materials; identify all wastestreams
generated at the site; and describe handling the disposal methods and
waste management handling, storage, and disposal areas. Also include a
discussion about areas previously used for thee purposes, if any.
b) List permits and authorization held, and describe permitted activities,
operating restrictions, and compliance reports, inspections, and
orders.
c) Discuss whether on-site electrical equipment contains PCBs, and
identify the party with compliance responsibility.
d) Describe in detail the observed on-site conditions of waters, soils,
vegetation, and production and waste management areas.
e) Review records of spills and release events, and describe materials and
area involved, remediation activities, and regulatory agency
involvement, if any.
f) Consultant should address all environmental concerns, including but not
limited to special statutory issues, lead paint, lead in drinking
water and wetlands.
10. Perform and discuss a one mile area reconnaissance, and describe all
adjacent site usages. Identify all potential sources of off-site
contamination and the impact of these findings, including landfills,
gasoline stations, industrial facilities, tank terminals, airports and
military bases or installations.
11. Review and provide all applicable local, state and federal regulatory
agency inquire (EPA, DERM, TWC, etc.) results for the site - as well as for
properties contained within a one mile radius of the site. Specifically
discuss: The NPL List, CERCLIS, ▇▇▇▇ Title III, RCRA Notifiers List, TSD
List, UST List, LUST List, and Landfill List. For Properties found on
these lists, identify distance, direction and any potential impact to the
subject site.
12. For LUST's UST's and AST's on-site or within one mile radius - identify the
number of tanks, registration, size, age, tank contents and tank material
for each. For offsite tanks, identify distance, direction and subsurface
gradient direction from site for each. Describe former UST's on-site and
also the compliance status of current on-site UST's.
13. Review and provide local government and municipal inquiry results. Include
at least the following: the electric company, water/sewer authorities,
city/county health department and local fire ▇▇▇▇▇▇▇▇'▇ office. Provide a
record of these communications.
14. If applicable, a sufficient number of asbestos, lead (paint, water), and
radon samples should be taken, analyzed, and discussed to provide a
representative sampling. The number of samples may vary, but the rationale
for determining the number and location of the samples should be described.
Provide information on: methods of analysis and laboratory used, sample
collection method, and certification of the inspectors, as per the attached
Exhibit A (for asbestos only). Describe and locate on plan the locations
and materials sampled.
15. Provide a color topographical area site map, with scale, nothing the
subject site.
2
16. If available, describe the circumstances of any known citizen complaints in
the area, the nature of the facility's relationship with its neighbors and
citizens, etc.
17. Provide a professionally prepared and detailed site map of the project,
noting all adjacent properties, location of any LUST's UST's AST's, drums,
transformers, areas of contamination, waste management areas, etc.
18. Provide a minimum of eight color labeled photographs depicting the site and
adjacent sites.
19. A copy of all records of communications (ROC's) should be provided in the
report for each including: date and time of a conversation, name and title
of person, name of company and a brief summary of the topic discussed.
Also provide a copy of all related permits, available soil and water data,
and any available enforcement records and documents.
20. Provide a list of any and all published references utilized.
21. Provide a statement of qualifications on the firm conducting the
assessment, and evidence of all required insurance coverage's (naming
Societe Generale, Southwest Agency, as additional insured).
22. Two original reports are required for this assignment, and should follow,
in general, the outline on the last page of this document.
3
EXHIBIT "A"
ASBESTOS SURVEY
The asbestos survey shall be performed by appropriately trained personnel,
trained in accordance with the most recent federal, state and local
requirements, including but not limited to AHERA. The personnel shall determine
if suspect ACM is present. Suspect friable ACM shall be reported on and sampled
according to the following scope. Suspect non-friable ACM shall be reported on
according to the following scope, but without sampling.
The consultant's report shall include the following:
---------------------------------------------------
- The date(s) the inspections/sampling was performed.
- A general description of construction, mechanical, and electrical
systems at the property based on the site visit and a cursory review of
construction documents (drawings, specifications, change orders, etc.), if
available.
- A description of the history of the property, including the dates of
original construction and the dates and scopes of major remodeling work.
- A description of any prior asbestos abatement work that was performed
at the property and on evaluation of the work's compliance with governing codes,
statutes, regulations and ordinances.
- A review of the suspect materials throughout the property and a
description of the sampling strategy. A sufficient number of samples should be
obtained in order to conclude the specific results required.
- An evaluation of the condition of any and all positive material found
at the property in accordance with a hazard ranking system. Note material
locations with respect to building occupants, potential for disturbance and air
flow.
- A description of the process for inspection and representative
sampling for asbestos-containing materials.
- A summary of testing results and graphic representation of the
locations from which the samples were taken indicating which samples are
positive.
- An estimate of the total quantity of ACM (friable and non-friable)
within the entire facility, including each tenant space, mechanical area, office
area, maintenance area and common area. Provide an estimate of probable costs
to correct or remove ACM's identified from the positive sampling process and
survey.
- A list of tenants at the property, by name and space number, the
materials sampled and the results of the analysis and the quantity of asbestos
found.
- The signature of the responsible individual. The individual shall
certify that the sampling and report has been conducted and prepared according
to the licensing requirements of the state in which the property is located.
4
SAMPLE OUTLINE REPORT FORMAT
PHASE I ENVIRONMENTAL SITE ASSESSMENT
1. Executive Summary
2. Objectives
3. Site Overview
4. Site Background/Operating History
a) Current Ownership
b) Prior Ownership
c) Review of Aerial Photographs
d) Historical City Directories/Fire Insurance Maps
5. Environmental Setting
a) Surface Water Characteristics
b) Ground Water Characteristics
c) Soils/Geology
6. Results of the On-Site Inspection
a) Observations
b) Hazardous Substance Identification/Inventory
c) Area Reconnaissance
d) Sampling Results (Asbestos) (Radon)
7. Regulatory/Governmental Agency Inquiries
a) Federal and State Regulatory Agency Inquires
b) City Government Inquiries
8. Conclusions
9. Recommendations
a) Additional Studies (File Review, Phase 2, etc.)
b) O & M Program
10. References
11. Appendices
a) Recorded Chain of Title
b) Aerial Photographs
c) Photographs
d) Permits/Records
12. Tables
a) Asbestos, Lead, and Radon Sampling Results
5
SCHEDULE 1.01(f)
APPROVED LIST OF CONSULTANTS
ENVIRONMENTAL SITE ASSESSMENTS
------------------------------
DAMES & ▇▇▇▇▇ LAW ENGINEERING
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Ft. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (817) 740-1177
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ & ▇▇▇▇, INC.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ O'Sick
(▇▇▇) ▇▇▇-▇▇▇▇
FUGRO/ENSR GROUNDWATER TECHNOLOGY
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
San Francisco, CA (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
EMG
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ENGINEERS, INC. G.M.T. ENVIRONMENTAL
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
G. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇ ▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
ENVIRONMENTAL SITE ASSESSMENTS (ESA)(Continued)
-----------------------------------------------
ATEC ASSOCIATES, INC. MAXIM ENGINEERS, INC.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
FLOUR ▇▇▇▇▇▇ GTI
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇ ▇▇▇▇▇▇▇
KERAMIDA ENVIRONMENTAL,INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇ Keramida/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
APPRAISAL ASSIGNMENT REPORT (AAR)
---------------------------------
(See Scope of Services)
STRUCTUAL ENGINEERS
-------------------
▇▇▇▇▇▇ AND ▇▇▇▇▇▇-TECHNI STRUCTURES
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇-▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
K.S. ▇▇▇▇▇▇▇▇▇▇▇ (Raja)
▇▇▇ ▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
TMBP
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
SCHEDULE 1.01(g)
Franchisors
Brand or Affiliation Consideration for AGHC Future Acquisitions
Double Tree Hotels Corporation DoubleTree Hotel or Resort
DoubleTree Club Hotel
DoubleTree Guest Suites Hotel
Hilton Hotels Corporation Hilton Hotel, Inn or Resort
Hilton Suites Hotel
Hilton Garden Inn
Holiday Inn Worldwide Crowne Plaza Hotel or Resort
Holiday Inn
Holiday Inn Express
Holiday Inn Hotel & Suites
Holiday Inn Select
Holiday Inn Sunspree Resort
Hyatt Hotels Corporation Hyatt Regency Hotel or Resort
Hyatt Hotel
ITT Sheraton Corporation Sheraton Hotel or Resort
Sheraton Suites Hotel
Four Points Hotel
Mariott Corporation Marriott Hotel or Resort
Mariott Suite Hotel
Residence Inn
Fairfield Inn, Inn & Suites
Courtyard by Marriott
Omni Hotels Omni Hotel or Resort
Promus Hotel Corporation Embassy Suite Hotel or Resort
Homewood Suites
Homewood Suites
Hampton Inn, Inn & Suites
Radisson Hotels Worldwide Radisson Hotel, Plaza Hotel or
Resort Radisson Inn
Radisson Suite Hotel
Westin Hotels & Resorts Westin Hotel or Resort
Wyndham Hotels and Resorts Wyndham Hotel or Resort
Wynham Garden Hotel
Possible (If franchising becomes available) Renaissance Hotels & Resorts
Red Lion Hotels & Inns
▇▇▇▇-▇▇▇▇▇▇▇
Inter-Continental
Four Seasons
Sofitel/Novotel
Nikkko
Le Meridian/Forte
AmeriSuites
Vista/Hilton International
Fairmont
▇▇▇▇'▇ ▇▇▇▇
SCHEDULE 1.01(h)
Ground Leases
-------------
ALBUQUERQUE, NEW MEXICO
That certain ground lease by and between the City of Albuquerque, New
Mexico and ▇▇▇▇ ▇▇▇▇▇▇, Inc. dated November 10, 1969 as amended by the
First Supplemental Lease Agreement dated May 17, 1971 and the Second
Supplemental Lease Agreement dated October 2, 1972.
NOTE: Ground Lessee may not assign or mortgage its interest without the
consent of Ground Lessor.
NEW ORLEANS, LOUISIANA
That certain Sublease Agreement between ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as sub-lessor,
and Grantor, as sublessee, dated July 8, 1994 and recorded in ▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of that certain Lease of Commercial
Property granted by Mon-Tay Enterprises, Inc., as owner, and ▇▇▇▇▇
▇▇▇▇▇▇▇▇, as lessee, dated December 11, 1985 recorded in COB ▇▇▇▇, ▇▇▇▇▇
▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
SAN JOSE, CALIFORNIA
That certain Sublease dated as of February 1, 1973 executed by and between
Claitor Properties Co. and Hotel Circle, Inc. and recorded on February 7,
1973 in Book 0225, Page 727 of the Official Records, as assigned to ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Company, as recorded on June 14, 1976 in Book C080, Page
157 in the Official Records, as further assigned to The Chase Manhattan
Bank (National Association), and recorded on September 17, 1976 in Book
C288, Page 36, as further assigned to North First-▇▇▇▇ Corporation, as
recorded on September 17, 1976 in Book C288, Page 45, as amended by that
certain Amendment to Sublease dated December 1, 1978 by and between Claitor
Properties Co. and North First-▇▇▇▇ Corporation and recorded on March 13,
1979 in Book E340, Page 285, as further assigned to ▇▇ ▇▇▇▇▇ Hotels, Inc.
and recorded on March 13, 1979 in Book E341, Page 258, and as further
amended by that certain Consent to Amendment of Sublease and Release of
Reserved Right dated April 11, 1980 executed by and between ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, as Trustees, ▇▇ ▇▇▇▇▇ Hotels, Inc. and The Chase Manhattan
Bank, N.A. and recorded on April 29, 1980 in Book F298, Page 632 of the
Official Records.
TOLEDO, OHIO
That certain Lease by and among the State of Ohio, acting by and through
the Department of Administrative Services, the Medical College of Ohio at
Toledo, an Ohio College of Medicine authorized and created by Section
3350.01, Ohio Revised Code ("MCO"), and Toledo Hotel Investors Limited
Partnership, an Ohio limited partnership ("Original Lessee"), recorded at
Recorder's Number 86-0812A01 of the records of the ▇▇▇▇▇ County Recorder,
under which State and MCO leased to Original Lessee a certain unimproved
approximately 8.781 acre tract of land located on the campus of MCO in
Toledo, Lucas County, Ohio; as modified by an Affidavit dated November 15,
1986, recorded December 16, 1986, at Recorder's Number 86-1943A08 of the
records of the ▇▇▇▇▇ County Recorder; as further amended by First Amendment
to Lease by and among State, MCO, and Original Lessee, recorded March 24,
1988, at Recorder's Number 88-332C11 of the records of the ▇▇▇▇▇ County
Recorder; as further amended by Second Amendment to Lease by and among
State, MCO, and Original Lessee, recorded October 30, 1992, at Recorder's
Number 92-3155C04 of the records of the ▇▇▇▇▇ County Recorder; as further
affected by that certain Cooperating Agreement dated May 23, 1986, by and
between MCO and Original Lessee.
NOTE: Leasehold Mortgage requires consent of Ground Lessor. Ground Lessor
is not required to enter into a new lease with Leasehold Mortgagee upon
foreclosure.
LAKE BUENA VISTA, FLORIDA
That certain Lease Agreement dated September 28, 1971, between Buena Vista
Land Company, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Company (Inc.) ("HJC"); as amended by
that certain Amendment to Lease dated August 15, 1978 between Lake Buena
Vista Communities, Inc. (f/k/a Buena Vista Land Company, Inc.) ("LBV") and
HJC; that certain Amendment to Lease dated December 18, 1986 between LBV
and Southeast Hotel Associates ("SHA"); that certain Amendment to Lease
dated November 6, 1989 between LBV and SHA; and that certain Fourth
Amendment to Lease effective as of September 5, 1996, between LBV and FSA
ZETA LBV Hotel, Inc.
Note: Ground Lessee's interest may be assigned only to a subsidiary.
Mortgage of the Leasehold Estate requires the consent of Ground Lessor
which shall not be unreasonably withheld so long as certain criteria are
met (including, Leasehold Mortgagee must be a
-2-
financial institution with a good reputation, insurance requirements,
Ground Lease not in default).
CLEARWATER BEACH, FLORIDA
That certain Ground Lease dated as of February 14, 1980, by and among ▇▇▇▇
▇. ▇▇▇▇▇▇, III, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, H. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇, and ▇.▇. ▇▇▇▇▇▇▇ Properties,
Inc., a Georgia corporation.
ROCHESTER, NEW YORK
That certain Lease dated as of January 1, 1971, between Rochester Institute
of Technology ("RIT") and Inn Camp, Inc. ("IC") as amended by that certain
Lease Amendment I dated November 8, 1971 between RIT and IC; that certain
Lease Amendment II dated as of April 30, 1981, between RIT and Rochilt
Associates; and that certain Lease Amendment III dated as of November 10,
1988, between RIT and Hotel Partners of Rochester.
-3-
SCHEDULE 1.01(i)
Guarantors
----------
American General Hospitality Corporation, a Maryland corporation
AGH UPREIT, LLC, a Delaware limited liability company
3100 Glendale Joint Venture, an Ohio general partnership
MDV Limited Partnership, a Texas limited partnership
Madison Motel Associates, a Wisconsin general partnership
183 Hotel Associates, Ltd., a Texas limited partnership
Richmond Williamsburg Associates, Ltd., a Texas limited partnership
2929 ▇▇▇▇▇▇▇▇ Limited Liability Company, a Delaware limited liability company
Lake Buena Vista Partners, Ltd., a Florida limited partnership
BCHI Acquisition, L.L.C., a Delaware limited liability company
Cocoa Beach Hotels, Ltd., a Florida limited partnership
Durham I-85 Limited Partnership, a Delaware limited partnership
Mt. Arlington New Jersey, LLC, a Delaware limited liability company
Schedule 1.01(j)
Participating Leases
1. Lease Agreement between American General Hospitality Operating Partnership,
L.P. ("Borrower") and AGH Leasing, L.P. (the "Lessee") with respect to
Holiday Inn Select Mission Valley, CA, dated July 31, 1996.
2. Lease Agreement between Borrower and Lessee with respect to Hampton Inn
Ocean City, dated July 31, 1996.
3. Lease Agreement between Borrower and Lessee with respect to Courtyard by
Marriott-Secaucus, NJ, dated July 31, 1996.
4. Lease Agreement between Borrower and Lessee with respect to Wyndham Hotel-
San Jose, CA, dated July 31, 1996.
5. Lease Agreement between Borrower and Lessee with respect to Wyndham
Albuquerque Hotel, dated July 31, 1996.
6. Lease Agreement between 2929 ▇▇▇▇▇▇▇▇ Limited Liability Company and Lessee
with respect to Holiday Inn Select New Orleans Airport Kenner, dated July
31, 1996.
7. Lease Agreement between 3100 Glendale Joint Venture and Lessee with respect
to Hilton Hotel Toledo, dated July 31, 1996
8. Lease Agreement between MDV Limited Partnership and Lessee with respect to
Hotel Maison de Ville, dated July 31, 1996.
9. Lease Agreement between Madison Motel Associates and Lessee with respect to
Crowne Plaza Madison, dated July 31, 1996.
10. Lease Agreement between 183 Hotel Associates, Ltd. And Lessee with respect
to Holiday Inn Dallas DFW Airport West, dated July 31, 1996.
11. Lease Agreement between Richmond Williamsburg Associates, Ltd. and Lessee
with respect to Hampton Inn - Richmond Airport, dated July 31, 1996.
12. Lease Agreement between Borrower and Lessee with respect to the Wyndham
Safari Hotel, Lake Buena Vista, FL, dated October 22, 1996.
13. Lease Agreement between 2780 Atlanta Limited Partnership, L.P. and Lessee
with respect to Doubletree Guest Suites Hotel-Atlanta, GA, dated March 17,
1997.
14. Lease Agreement between Borrower and Lessee with respect to Hilton Hotel -
Durham, dated January 6, 1997.
15. Lease Agreement between Borrower and Lessee with respect to Holiday Inn
Select DFW South, dated July 31, 1996.
16. Lease Agreement between Borrower and Lessee with respect to Grand Rapids
Hilton dated April 18, 1997.
17. Lease Agreement between Borrower and Lessee with respect to Crowne Plaza
Phoenix, dated April 1, 1997.
18. Lease Agreement between Lessee and Manager with respect to Holiday Inn
Resort - Monterey, dated November 20, 1996.
19. Lease Agreement between 75 Arlington Heights Limited Partnership, L.P. and
Lessee with respect to Radisson Hotel - Arlington Heights, dated February
28, 1997.
20. Lease Agreement between Borrower and Lessee with respect to Westin Key
Largo Resort, dated March 17, 1997.
21. Lease Agreement between Borrower and Lessee with respect to Wyndham Garden
Hotel-Marietta, GA, dated March, 17, 1997.
22. Lease Agreement between BCHI Acquisitions, L.L.C and Lessee with respect
to Holiday Inn Select-Bucks County, PA, dated June 20, 1997.
23. Lease Agreement between Borrower and Lessee with respect to Radisson Twin
Tower-Orlando, FL, dated June 25, 1997.
24. Lease Agreement between Borrower and Lessee with respect to Marriott West
Loop-Houston, TX, dated June 25, 1997.
25. Lease Agreement between Cocoa Beach Hotels, Ltd. and Lessee with respect
to Hilton Hotel-Cocoa Beach, FL, dated June 27, 1997.
26. Lease Agreement between Borrower and Lessee with respect to Courtyard by
Marriott-Durham, NC, dated November 26, 1997.
27. Lease Agreement between Borrower and Clinton Holding Corp. with respect to
Ramada Hotel-Mahwah, NJ, dated January 8, 1998.
28. Lease Agreement between Borrower and Mahwah Holding Corp. with respect to
Sheraton Crossroads-Mahwah, NJ, dated January 8, 1998.
29. Lease Agreement between Borrower and Clinton Holding Corp. with respect to
Ramada Plaza-Meriden, CT, dated January 8, 1998.
30. Lease Agreement between Portland/Shelton LLC and Fairfield Holding Corp.
with respect to Ramada Plaza-Shelton, CT, dated January 8, 1998.
31. Lease Agreement between Portland/Shelton LLC and Fairfield Holding Corp.
with respect to Crowne Plaza-Portland, OR, dated January 8, 1998.
32. Lease Agreement between Borrower and Clinton Holding Corp. with respect to
Crowne Plaza Suites-Las Vegas, NV, dated January 8, 1998.
33. Lease Agreement between Borrower and Clinton Holding Corp. with respect to
St. Tropez Suites-Las Vegas, NV, dated January 8, 1998.
34. Lease Agreement between Mt. Arlington New Jersey, LLC and Clinton Holding
Corp. with respect to Four Points-Mt. Arlington, NJ, dated January 8, 1998.
35. Lease Agreement between Borrower and Lessee with respect to Holiday Inn
Express-Hanover, MD, dated January 22, 1998.
36. Lease Agreement between Borrower and Lessee with respect to Holiday Inn-
Annapolis, MD, dated January 22, 1998.
37. Lease Agreement between Borrower and Lessee with respect to Ramada Hotel
Old Town-Alexandria, VA, dated January 22, 1998.
38. Lease Agreement between Borrower and Lessee with respect to Holiday Inn &
Suites-Alexandria, VA, dated January 22, 1998.
39. Lease Agreement between AGH ▇'▇▇▇▇ International LLC and Lessee with
respect to the Holiday Inn-▇'▇▇▇▇ International, Rosemont, IL, dated
February 3, 1998.
40. Lease Agreement between Borrower and Lessee with respect to Doubletree
Resort-Clearwater Beach, FL, dated February 13, 1998.
41. Lease Agreement between Borrower and Lessee with respect to Courtyard by
Marriott-Lake Buena Vista, FL, dated February 13, 1998.
42. Lease Agreement between Borrower and Lessee with respect to Doubletree
Hotel, Tampa, FL, dated February 13, 1998.
43. Lease Agreement between Borrower and Lessee with respect to Courtyard by
Marriott-Marina del Rey, CA, dated February 13, 1998.
44. Lease Agreement between Borrower and Lessee with respect to Holiday Inn-
Ft. Lauderdale, FL, dated February 13, 1998.
45. Lease Agreement between Borrower and Lessee with respect to Ramada Inn-
Clearwater Beach, FL, dated February 13, 1998.
46. Lease Agreement between Borrower and Lessee with respect to Courtyard by
Marriott-Century City, CA, dated February 13, 1998.
47. Lease Agreement between Borrower and Lessee with respect to Holiday Inn-
Madeira Beach, FL, dated February 13, 1998.
48. Lease Agreement between Borrower and Lessee with respect to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-
Key Largo, FL, dated February 13, 1998.
49. Lease Agreement between Borrower and Lessee with respect to Holiday Inn-
Richmond, VA, dated February 13, 1998.
50. Lease Agreement between Borrower and Lessee with respect to Holiday Inn-
St. Louis, MO, dated February 13, 1998.
51. Lease Agreement between Borrower and Lessee with respect to Radisson
Hotel-▇▇▇▇▇▇▇▇▇, NY, dated February 13, 1998.
52. Lease Agreement between Borrower and Lessee with respect to Mystic Hotel-
Mystic, CT, dated February 13, 1998.
53. Lease Agreement between Borrower and Lessee with respect to Select Inn-
Bloomington, MN, dated February 13, 1998.
Schedule 4.01
SUBSIDIARIES
NAME STATE OF FORMATION PRINCIPAL OFFICE
---- ------------------ ----------------
2929 ▇▇▇▇▇▇▇▇ Limited Liability Company Delaware ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
BCHI Acquisition, L.L.C. Delaware ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
3100 Glendale Joint Venture Ohio ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
MDV Limited Partnership Texas ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Madison Motel Associates Wisconsin ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
183 Hotel Associates, Ltd. Texas ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
455 Meadowlands Associates, Ltd.* Texas ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
DFW South Limited Partnership* Texas ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Richmond Williamsburg Associates, Ltd. Texas ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
AGH UPREIT LLC Delaware ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
AGH Secaucus LLC* Delaware ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
AGH DFW South LLC* Delaware ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Lake Buena Vista Partners, Ltd. Florida ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Cocoa Beach Hotels, Ltd. Florida ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Durham I-85 Limited Partnership Delaware ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Portland/▇▇▇▇▇▇▇ LLC* Delaware ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Mt. Arlington New Jersey, LLC* Delaware ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
AGH ▇'▇▇▇▇ International, LLC* Delaware ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
-2-
75 Arlington Heights Limited Partnership, L.P.* Delaware ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
2780 Atlanta Limited Partnership, L.P.* Delaware ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
AGH PSS I, Inc. Delaware ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
___________________________
*Permitted other subsidiary
SCHEDULE 4.03
AMERICAN GENERAL HOSPITALITY CORPORATION
----------------------------------------
(LISTING OF ALL PENDING OR THREATENED LEGAL PROCEEDINGS, WHETHER OR NOT COVERED
-------------------------------------------------------------------------------
BY INSURANCE, TO WHICH THE AGHC, THE LESSEE, THE OPERATING PARTNERSHIP OR ANY
-----------------------------------------------------------------------------
SUBSIDIARY IS A PARTY OR WHICH MAY AFFECT THEIR RESPECTIVE PROPERTIES OR
------------------------------------------------------------------------
BUSINESS.)
----------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ VS. AMERICAN GENERAL HOSPITALITY, INC.; HOLIDAY INNS, INC.;
HOLIDAY INNS B.V.; HOLIDAY INN PARK CENTER PLAZA; PARK CENTER HOTEL COMPANY
COURT: SUPERIOR COURT OF CALIFORNIA, COUNTY OF SANTA ▇▇▇▇▇
CASE NUMBER CV768996
Date of Service:
10/20/97
Date of Incident:
9/26/96
Hotel Address:
Courtyard by Marriott
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇ reported that a headboard fell on his head. The Chief Maintenance
Engineer examined the headboard and noted that the brackets were secure
suggesting the event may not have occurred as described by the Plaintiff. ▇▇.
▇▇▇▇▇▇▇▇ retained legal counsel immediately after the event. The amount the
Plaintiff is seeking is not specified in the Complaint. There will be no cost
to the Company for this event. There is a zero deductible insurance program
through Fireman's Fund Insurance Company for the first 2 million and a $10,000
deductible for the next 50 million of insurance. This is presently being
monitored by the Fraud Unit at Fireman's Fund.
MILES ▇▇▇▇▇▇▇▇ VS. RED ▇▇▇▇▇, ▇▇▇▇▇, INC., DAYS HOTEL, AMERICAN GENERAL CORP,
ABC-XYZ CORPORATION & ▇▇▇▇ ▇▇▇-▇▇▇▇▇▇▇ ▇▇▇ (A SERIES OF FICTITIOUS NAMES)
COURT: SUPERIOR COURT OF NEW JERSEY
LAW DIVISION: ▇▇▇▇▇▇ COUNTY
DOCKET NUMBER : HUD-L-8048-97
Date of Service: 9/30/97
Date of Incident: 10/18/96
The Plaintiff alleges his slip and fall in the restaurant, Red ▇▇▇▇▇ was a
result of not taking certain actions to alleviate the dangerous condition of the
property. The Date of Service was our first notice of this event. It is our
intention to seek a dismissal from this litigation since at the time of the
event Red ▇▇▇▇▇ was operated as a separate business entity which assumed all
responsibility for occurrences within the restaurant area. The
responsible parties for this law suit should be Magic Restaurant, Inc. and Red
▇▇▇▇▇. The Plaintiff Attorney has been advised of such. The amount of damages
the Plaintiff is seeking is no specified in the Complaint. Until dismissed from
this matter Fireman's Fund insurance company will defend and indemnify American
General Hospitality Corporation with the limits noted above. We seek a Voluntary
Discontinuance.
VISTANA DEVELOPMENT, LTD, A FLORIDA LIMITED PARTNERSHIP VS. LAKE BUENA VISTA
PARTNERS, LTD., A FLORIDA LIMITED PARTNERSHIP
COURT: CIRCUIT COURT OF THE NINTH JUDICIAL CIRCUIT IN AND FOR
ORANGE COUNTY, FL
CASE NO. = CI 97-7023
Date of Service: 8/20/97
Date of Incident: 8/20/97
Temporarily prohibited from evicting the Plaintiff from the leased premises. The
Plaintiff wants to remain at the information service desk or booth for the
purpose of providing guests of the Hotel with information on timeshare resort
sales and tours, and all related tourist information, etc. They will remain on
the premises until this matter is resolved. The Plaintiff continues to pay
rent. So, there is no fiscal loss to the Company.
February 3, 1998
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ARM
Director, Risk and Insurance Services
###-##-####
SCHEDULE 4.17
Legal Requirements; Zoning; Utilities; Access
None
SCHEDULE 4.18
NAME OF PROPERTY NAME OF MORTGAGE HOLDER OUTSTANDING BALANCE
---------------- ----------------------- -------------------
Radisson-Arlington Heights Farmers Bank $ 8,218,755.05
Holiday Inn Select-DFW South Midland Loan Services $13,674,675.29
Courtyard by Marriott-Secaucus Fleet Bank $ 4,406,056.95
Doubletree-Atlanta First Union $ 9,346,513.06
Crowne Plaza-Portland Bank One Mortgage $ 5,296,995.61
Ramada Plaza-▇▇▇▇▇▇▇ Bank One Mortgage $ 4,919,417.54
Holiday Inn-▇'▇▇▇▇ International Travelers Insurance Co. $21,756,299.16
Schedule 4.21
LIST OF FRANCHISORS
NAME OF PROPERTY NAME OF FRANCHISOR TERM
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇ ▇▇▇▇, ▇▇ Holiday Inn 10 years
Holiday Inn Select Mission Valley-San Diego, CA Holiday Inn Select 10 years
Hampton Inn-Ocean City, MD Hampton Inn 12 years
Wyndham Hotel-San Jose, CA Wyndham Hotel 12 years
Courtyard by Marriott/Meadowlands Courtyard by Marriott 12 years
Wyndham Albuquerque Hotel-Albuquerque, NM Wyndham Hotel 12 years
Holiday Inn Select New Orleans Airport-Kenner, LA Holiday Inn Select 10 years
Hilton Hotel-Toledo, OH Hilton Hotel 10 years
Hotel Maison de Ville-New Orleans, LA Small Luxury Hotels 12 years
Crowne Plaza Hotel-Madison, WI Crowne Plaza 10 years
Holiday Inn DFW West-Bedford, TX Holiday Inn 10 years
Hampton Inn-Richmond Airport Hampton Inn 12 years
Wyndham Royal Safari LBV-Orlando, FL Wyndham Royal Safari 12 years
Doubletree Guest Suites-Atlanta, GA Doubletree Guest Suites 12 years
Hilton Hotel-Durham, NC Hilton Hotel 12 years
Holiday Inn Select DFW South Holiday Inn Select 10 years
Hilton Hotel-Grand Rapids, MI Hilton Hotel 12 years
Crowne Plaza-Phoenix, AZ Crowne Plaza 10 years
Holiday Inn Resort-Monterey, CA Holiday Inn Resort 10 years
Radisson Hotel-Arlington Heights, IL Radisson Hotel 12 years
Westin Resort-Key Largo, FL Westin Resort 12 years
Wyndham Garden Hotel-Marietta, GA Wyndham Garden Hotel 12 years
Holiday Inn Select-Bucks County, PA Holiday Inn Select 10 years
Radisson Twin Towers-Orlando, FL Radisson 12 years
Marriott West Loop-Houston, TX Marriott 20 years
Hilton Hotel-Cocoa Beach, FL Hilton 12 years
Courtyard by Marriott-Durham, NC Courtyard by Marriott 20 years
Holiday Inn Express-Hanover, MD Holiday Inn Express 10 years
Ramada Old Town-Alexandria, VA Ramada Hotel Old Town 10 years
Holiday Inn-Alexandria, VA Holiday Inn 10 years
Holiday Inn-Annapolis, MD Holiday Inn 10 years
Holiday Inn-▇'▇▇▇▇ International Holiday Inn 10 years
Doubletree Hotel-Tampa, FL Doubletree 10 years
Holiday Inn-St. Louis, MO Holiday Inn 10 years
Radisson Hotel-Rochester, NY Radisson 10 years
Holiday Inn-Richmond, VA Holiday Inn 10 years
Ramada Inn-Clearwater Beach, FL Ramada Inn 15 years
Courtyard by Marriott-Marina del Rey, CA Courtyard by Marriott 20 years
Courtyard by Marriott-Century City, CA Courtyard by Marriott 20 years
Holiday Inn-Madeira Beach, FL Holiday Inn 10 years
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Resort-Key Largo, FL ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1 year
Holiday Inn-Ft. Lauderdale, FL Holiday Inn 10 years
Courtyard by Marriott-Lake Buena Vista, FL Courtyard by Marriott 20 years
Doubletree Resort-Clearwater Beach, FL Doubletree 10 years
Schedule 4.22
MANAGEMENT AGREEMENTS
1. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇ ▇▇▇▇, ▇▇ - Management Agreement between
AGH Leasing, L.P. ("Lessee") and American General Hospitality, Inc.
("Manager"), dated July 31, 1996.
2. Holiday Inn Select Mission Valley-San Diego, CA - Management Agreement
between Lessee and Manager, dated July 31, 1996.
3. Hampton Inn-Ocean City, MD - Management Agreement between Lessee and
Manager, dated July 31, 1996.
4. Wyndham Hotel-San Jose, CA - Management Agreement between Lessee and
Manager, dated July 31, 1996.
5. Courtyard by Marriott/Meadowlands-Secaucus, NJ - Management Agreement
between Lessee and Manager, dated July 31, 1996.
6. Wyndham Albuquerque Hotel-Albuquerque, NM - Management Agreement between
Lessee and Manager, dated July 31, 1996.
7. Holiday Inn Select New Orleans Airport-Kenner, LA - Management Agreement
between Lessee and Manager, dated July 31, 1996.
8. Hilton Hotel-Toledo, OH - Management Agreement between Lessee and Manager,
dated July 31, 1996
9. Hotel Maison de Ville-New Orleans, LA - Management Agreement between Lessee
and Manager, dated July 31, 1996.
10. Crowne Plaza Hotel-Madison, WI - Management Agreement between Lessee and
Manager, dated July 31, 1996.
11. Holiday Inn DFW West-Bedford, TX - Management Agreement between Lessee and
Manager, dated July 31, 1996.
12. Hampton Inn-Richmond Airport - Management Agreement between Lessee and
Manager, dated July 31, 1996.
13. Wyndham Royal Safari Lake Buena Vista, FL - Management Agreement between
Lessee and Manager, dated October 22, 1996.
14. Doubletree Guest Suites-Atlanta, GA - Management Agreement between Lessee
and Manager, dated March 17, 1997.
15. Hilton Hotel-Durham, NC - Management Agreement between Lessee and Manager,
dated January 8, 1997.
16. Holiday Inn Select DFW South - Management Agreement between Lessee and
Manager, dated July 31, 1996.
17. Grand Rapids Hilton Hotel - Management Agreement between Lessee and
Manager, dated April 18, 1997.
18. Crowne Plaza-Phoenix, AZ - Management Agreement between Lessee and
Manager, dated April 1, 1997.
19. Holiday Inn Resort-Monterey, CA - Management Agreement between Lessee and
Manager, dated November 20, 1996.
20. Radisson Hotel-Arlington Heights, IL - Management Agreement between Lessee
and Manager, dated February 28, 1997.
21. Westin Resort-Key Largo - Management Agreement between Lessee and Manager,
dated March 17, 1997.
22. Wyndham Garden Hotel-Marietta, GA - Management Agreement between Lessee
and Wyndham Management Corporation, dated March, 17, 1997.
23. Holiday Inn Select-Bucks County, PA - Management Agreement between Lessee
and Manager, dated June 20, 197.
24. Marriott Hotel West Loop-Houston, TX - Management Agreement between Lessee
and Manager, dated June 25, 1997.
25. Radisson Twin Towers-Orlando, FL - Management Agreement between Lessee and
Manager, dated June 25, 1997.
26. Hilton Hotel-Cocoa Beach, FL - Management Agreement between Lessee and
Manager dated June 27, 1997.
27. Courtyard by Marriott-Durham, NC - Management Agreement between Lessee and
Manager dated November 26, 1997.
28. Holiday Inn Express-Hanover, MD - Management Agreement between Lessee and
Manager dated January 22, 1998.
29. Holiday Inn-Annapolis, MD - Management Agreement between Lessee and Manager
dated January 22, 1998.
30. Ramada Hotel Old Town-Alexandria, VA - Management Agreeement between Lessee
and Manager dated January 22, 1998.
31. Holiday Inn Hotel & Suites-Alexandria, VA - Management Agreement between
Lessee and Manager dated January 22, 1998.
32. Holiday Inn-▇'▇▇▇▇ International-Rosemont, IL - Management Agreement
between Lessee and Manager dated February 3, 1998.
33. Doubletree Resort-Clearwater Beach, FL - Management Agreement between
Lessee and Manager dated February 13, 1998.
34. Courtyard by Marriott-Lake Buena Vista, FL - Management Agreement between
Lessee and Manager dated February 13, 1998.
35. Doubletree Hotel-Tampa, FL - Management Agreement between Lessee and
Manager dated February 13, 1998.
36. Courtyard by Marriott-Marina del Rey, CA - Management Agreement between
Lessee and Manager dated February 13, 1998.
37. Holiday Inn-Ft. Lauderdale, FL - Management Agreement between Lessee and
Manager dated February 13, 1998.
38. Ramada Inn-Clearwater Beach, FL - Management Agreement between Lessee and
Manager dated February 13, 1998.
39. Courtyard by Marriott-Century City, CA - Management Agreement between
Lessee and Manager dated February 13, 1998.
40. Holiday Inn-Madeira Beach, FL - Management Agreement between Lessee and
Manager dated February 13, 1998.
41. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇-Key Largo, FL - Management Agreement between Lessee
and Manager dated February 13, 1998.
42. Holiday Inn-Richmond, VA - Management Agreement between Lessee and Manager
dated February 13, 1998.
43. Holiday Inn-St. Louis, MO - Management Agreement between Lessee and Manager
dated February 13, 1998.
44. Radisson Hotel-▇▇▇▇▇▇▇▇▇, NY - Management Agreement between Lessee and
Manager dated February 13, 1998.
45. Mystic Hotel-Mystic, CT - Management Agreement between Lessee and Manager
dated February 13, 1998.
46. Select Inn-Bloomington, MN - Management Agreement between Lessee and
Manager dated February 13, 1998.
Section 5.05
ESA REQUIRED WORK
----------------------------------------------------------------------------------------------------
AMERICAN GENERAL HOSPITALITY TRUST
----------------------------------------------------------------------------------------------------
ENVIRONMENTAL SITE ASSESSMENT (ESA)
----------------------------------------------------------------------------------------------------
REQUIRED ITEMS
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
FIRM REPORT DATE
----------------------------------------------------------------------------------------------------
PROPERTY NAME LOCATION NAME DATE DESCRIPTION REQ'D
------------- -------- ---- ---- ----------- -----
Wyndham Lake Orlando, FL ATEC 10/21/96 Annual testing and quarterly 5/14/98
----------------------------------------------------------------------------------------------------
Buena Vista reporting on the status of the
----------------------------------------------------------------------------------------------------
nearby Texaco an ▇-▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ENSR 1/6/98 Semi-annual reporting on 8/13/98
----------------------------------------------------------------------------------------------------
status of ongoing
----------------------------------------------------------------------------------------------------
remediation efforts/site
----------------------------------------------------------------------------------------------------
closure by Ford.
Ramada Inn Clearwater Dames 12/8/97 Provide documentation on 5/14/98
----------------------------------------------------------------------------------------------------
Gulfview Beach, FL & the former on-site UST's
----------------------------------------------------------------------------------------------------
▇▇▇▇▇ removal in November of
----------------------------------------------------------------------------------------------------
1997.
Holiday Inn Madeira Dames 12/15/97 Obtain NFA status for the 5/14/98
----------------------------------------------------------------------------------------------------
Beach, FL & site from the Pinellas
----------------------------------------------------------------------------------------------------
▇▇▇▇▇ County Health
----------------------------------------------------------------------------------------------------
Department.
Lodge at the Mystic, CT Dames 12/5/97 Confirm and provide 5/14/98
----------------------------------------------------------------------------------------------------
Seaport & documentation on the
----------------------------------------------------------------------------------------------------
▇▇▇▇▇ integrity of the two on-site
----------------------------------------------------------------------------------------------------
UST's.
----------------------------------------------------------------------------------------------------
Section 5.06
PCR REQUIRED WORK
----------------------------------------------------------------------------------------------------
AMERICAN GENERAL HOSPITALITY TRUST
----------------------------------------------------------------------------------------------------
PROPERTY CONDITION REVIEW (PCR)
----------------------------------------------------------------------------------------------------
REQUIRED REPAIRS
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
FIRM REPORT DATE
----------------------------------------------------------------------------------------------------
PROPERTY NAME LOCATION NAME DATE DESCRIPTION REQ'D
------------- -------- ---- ---- ----------- -----
None required
----------------------------------------------------------------------------------------------------
SCHEDULE 5.07
INSURANCE
(a) INSURANCE POLICIES REQUIRED. While any obligation of the Borrower or
---------------------------
any Guarantor under any Credit Document remains outstanding, the Borrower shall
procure and maintain or shall cause to be procured and maintained continuously
in effect policies of insurance in form and amounts and issued by companies,
associations or organizations licensed to do business in the states the Hotel
Properties are located, with a Best's Rating of no less than A, XI and otherwise
satisfactory to the Agents covering such casualties, risks, perils, liabilities
and other hazards required by Agents. All original policies, or certificates
thereof, and endorsements and renewals thereof shall be delivered to and
retained by the Administrative Agent unless the Administrative Agent waives this
requirement in writing. Without limiting the generality of the foregoing, the
Borrower shall provide or cause to be provided the following types of insurance
coverage:
i. until repayment of the Notes and satisfaction of all obligations
under the Credit Documents: (i) property insurance on an "all risks" full
replacement cost basis without deduction for depreciation (or fire,
extended coverage and difference in conditions basis), including flood,
earthquake (for any Hotel Property located in the State of California, or
in any other location that, according to determination by the appropriate
agency of the United States Government, has an above average risk of
seismic activity) and sinkhole coverages in an amount equal to the
replacement cost of the Improvements (except for earthquake insurance which
for each required Hotel Property shall be in an amount which is equal to or
greater than the maximum probable loss determined pursuant to a written
report by a seismic engineer, which report and engineer are acceptable to
the Agents, provided, however, that the aggregate amount of such earthquake
-------- -------
insurance coverage and the deductibles thereunder may be modified at the
request of the Borrower based upon industry standards, subject to approval
of the Agents); (ii) Comprehensive General Liability Insurance (including
contractual liability, owners and contractors protective coverages,
products & completed operations, personal & advertising injury liability,
fire damage legal liability and alienated premises coverage) and
Comprehensive Auto Liability Insurance in a minimum amount of $50,000,000
each occurrence; (iii) Statutory Workers' Compensation and Employer's
Liability Insurance in the minimum amounts of $1,000,000 each accident,
$1,000,000 each employee - disease, $1,000,000 policy limit - disease; and
(iv) Rent loss insurance against loss of income by reason of any hazard
covered under the insurance required under this subparagraph (a) in an
amount sufficient to avoid any co-insurance penalty, but in any event for
not less than two (2) years gross receipts from all sources of income from
the Hotel Property. Each such policy of property insurance shall contain a
replacement cost
endorsement and such other endorsements as are sufficient to prevent the
Borrower, the Agents and/or the Borrower's Subsidiaries from becoming a co-
insurer with respect to such buildings and improvements.
ii. During the renovation or expansion of any Hotel Property the
Borrower will additionally provide: (i) Builder's Risk Insurance on an "all
risks" basis including flood, earthquake (if required pursuant to the
provisions of and in the amount stated in clause (a)) and sinkhole
coverages, and also including Stored Materials and materials while in
transit, and (ii) Statutory Workers' Compensation and Employer's Liability
Insurance in the minimum amounts of $1,000,000 each accident, $1,000,000
each employee - disease, $1,000,000 policy limit - disease, covering each
contractor and all other contractors or subcontractors who may have
occasion to be at the job site.
iii Such additional insurance as may be reasonably required by the
Administrative Agent from time to time in the event that any Hotel Property
is exposed to hazards and risks with respect to which the Administrative
Agent deems the existing insurance inadequate to properly protect its
interests.
All policies of liability insurance shall name the Agents, the Banks and
their respective directors, officers, representatives, agents and employees (the
"Banks' Parties") as additional insureds. The Borrower shall furnish the
Administrative Agent with a certified copy of an original or a certificate of
insurance of all policies of insurance required. All policies or certificates,
as the case may be, of insurance shall set forth the coverage, the limits of
liability, the name of the carrier, the policy number, the Best's Rating of the
carrier and the period of coverage. In addition, all policies of insurance
required under the terms hereof shall contain an endorsement or agreement by the
insurer that any loss shall be payable in accordance with the terms of such
policy notwithstanding any act or negligence of the Borrower, the Participating
Lessee, the Manager or any party holding under any such Person which might
otherwise result in a forfeiture of said insurance and the further agreement of
the insurer waiving all rights of setoff, counterclaim or deductions against the
Borrower. At least 15 days prior to the expiration of each required policy, the
Borrower shall deliver to the Administrative Agent evidence of the renewal or
replacement of such policy, continuing such insurance in the form as required by
this Agreement. All such policies shall contain a provision that
notwithstanding any contrary agreement between the Borrower and the applicable
insurance company, such policies will not be canceled, allowed to lapse without
renewal, surrendered or amended (which provision shall include any reduction in
the scope or limits of coverage) without at least 15 days' prior written notice
to the Administrative Agent.
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SUBORDINATE UNSECURED CREDIT AGREEMENT
SCHEDULE 11.02
Notices
-------
DOMESTIC LENDING OFFICE LIBOR LENDING OFFICE
----------------------- --------------------
SOCIETE GENERALE, SOUTHWEST AGENCY SOCIETE GENERALE, SOUTHWEST AGENCY
4900 ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center 4900 ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. Day Attn: ▇▇. ▇▇▇▇▇▇ ▇. Day
Vice President Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
BANK ▇▇▇, ▇▇▇▇▇, ▇.▇. ▇▇▇▇ ▇▇▇, ▇▇▇▇▇, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Commercial Real Estate Department Attn: Commercial Real Estate Department
▇▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇
Vice President Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ 94119 ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇-Izumi
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: ▇▇▇ ▇▇▇▇▇▇: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇ ▇▇▇-Izumi: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
BANKBOSTON, N.A. BANKBOSTON, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 115 Perimeter Center Northeast, Suite 500
Atlanta, Georgia 30346 ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
NATIONSBANK OF TEXAS, N.A. NATIONSBANK OF TEXAS, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, 51st Floor ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇ ▇. ▇▇▇▇, III Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇ ▇. ▇▇▇▇, III
Real Estate Administration Officer Real Estate Administration Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
-2-