EXHIBIT 10.23
CONFIDENTIAL
------------
January 15, 1997
American General Hospitality Operating Partnership, L.P.
0000 X. Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxx
American General Hospitality Corporation
0000 X. Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxx
Re: Credit Agreement dated as of July 31, 1996 by and between American
General Hospitality Operating Partnership, L.P. ("Borrower"),
Societe Generale, Southwest Agency, as Structuring Agent, Bank One,
Texas, N.A., as Administrative Agent, and the banks named therein
(the "Banks"), as amended by First Amendment to Credit Agreement
dated as of October 18, 1996 by and among such parties (the Credit
Agreement as so amended being referred to herein as the "Credit
Agreement"). The Administration Agent and the Structuring Agent are
hereinafter referred to as the "Agents".
Ladies and Gentlemen:
Reference is made to the Credit Agreement. All terms used, but not defined in
this letter (this "Commitment Letter"), shall have the meaning given to them in
the Credit Agreement.
Societe Generale, Southwest Agency ("SocGen") and Bank One, Texas, N.A. ("BOT")
(SocGen and BOT are hereinafter collectively referred to as the "Arrangers")
are pleased to advise you that each such institution is willing, subject to the
terms and conditions contained in this Commitment Letter, in the letter executed
contemporaneously with this Commitment Letter between yourselves and the
Arrangers related to certain fees earned or to be earned by the Arrangers in
connection with the transactions contemplated by this Commitment Letter (the
"Fee Letter") and in the attached letter from Xxxxxx X. Day with SocGen to Xx.
Xxxxxxx Xxxx with the Borrower (the "Term Sheet"), to each commit to increase
their respective Commitments under the Credit Agreement by $25,000,000 for an
aggregate increase of the Commitments of the Banks under the Credit Agreement
from the current $100,000,000 Commitment level to $150,000,000 (such increase
shall be referred to herein as the "Facility Modification"). The Facility
Modification will be used for the purposes
American General Hospitality Operating Partnership, L.P.
January 15, 1997
Page 2
provided in the Credit Agreement and to pay related fees and expenses of
Borrower and American General Hospitality Corporation ("Company").
In consideration for agreeing to provide the additional Commitments needed for
the Facility Modification, Borrower and Company jointly and severally agree to
pay to the Arrangers the fees set forth in the Fee Letter.
The Term Sheet attached hereto and incorporated herein by this reference, sets
forth certain terms and conditions which will govern the Facility Modification.
This Commitment Letter and the Term Sheet are not meant to be and shall not be
construed as an attempt to define all of the terms and conditions of the
Facility Modification which shall be set forth in the definitive financing
agreements. The date a definitive amendment to the Credit Agreement evidencing
the Facility Modification is executed by the parties thereto shall be referred
to herein as the "Modification Date".
As provided in the Term Sheet, the Arrangers plan to syndicate all or a portion
of the Commitments for the Facility Modification. To assist the Arrangers in
their syndication effort, you agree to reasonably assist and cooperate with
the Arrangers in their syndication efforts, including, but not limited to
promptly preparing and providing upon their request all information reasonably
deemed necessary by them to complete successfully the syndication of the
Commitments for the Facility Modification, including but not limited to
information and projections prepared by you or on your behalf relating to the
transactions contemplated hereby. Subject to the provisions of the Credit
Agreement requiring that the Arrangers retain a certain dollar amount of the
Commitments under the Credit Agreement, the Arrangers reserve the right to
allocate the Commitments offered by the Banks.
In addition to the conditions to funding or closing set forth in the Term Sheet,
SocGen and BOTs' Commitment to provide financing hereunder is subject to, among
other conditions, (i) the negotiation and execution of a definitive amendment
to the Credit Agreement and the other Credit Documents, and other related
documentation satisfactory to the Agents, (ii) there being no material adverse
change in the reasonable opinion of the Agents in the financial condition,
business, operations, properties or prospects of Borrower, Company and
Borrower's subsidiaries from the date of the financial statements (the
"Financial Statements") most recently provided prior to the date hereof, (iii)
there being no Event of Default under the Credit Agreement which remains
uncured, (iv) the consummation by Company of a secondary common stock offering
pursuant to which at least $100,000,000 in gross proceeds are raised by Company
and the net proceeds therefrom used to pay down existing Borrowings, (v) at the
time of the proposed initial funding, no injunction or other restraining order
shall have been issued or filed, or a hearing therefor be pending or noticed and
(vi) the payment to the Arrangers of the fees set forth in the Fee Letter.
American General Hospitality Operating Partnership, L.P.
January 15, 1997
Page 3
Whether or not the transactions contemplated hereby are consummated, Borrower
and Company jointly and severally hereby agrees to indemnify and hold harmless
each of the Arrangers and the Agents, and their respective directors, officers,
employees and affiliates (each, an "indemnified person") from and against any
and all losses, claims, damages, liabilities (or actions or other proceedings
commenced or threatened in respect thereof) and expenses that arise out of,
result from or in any way relate to this Commitment Letter, or the providing or
syndication of the Facility Modification, and to reimburse each indemnified
person, upon its demand, for any legal or other expenses incurred in connection
with investigation, defending or participating in any such loss, claim, damage,
liability or action or other proceeding (whether or not such indemnified person
is a party to any action or proceeding out of which any such expenses arise),
other than any of the foregoing claimed by any indemnified person to the extent
incurred by reason of the gross negligence or willful misconduct of such person.
Neither the Arrangers nor the Agents, nor any of their affiliates, shall be
responsible or liable to Borrower, Company or any other person for any
consequential damages which may be alleged. The obligations contained in this
paragraph will survive the closing of the Facility Modification.
In addition, the Borrower and Company jointly and severally hereby agree to
reimburse the Arrangers and the Agents from time to time upon demand for the
reasonable out-of-pocket costs and expenses of Xxxxxxxxx & Xxxxxxxxx, L.L.P.,
special counsel to SocGen and the Agents, and the reasonable out-of-pocket costs
and expenses of Xxxxxxx, Xxxxxxx & Xxxxxxx, P.C., special counsel to BOT, in
connection with the Facility Modification, regardless of whether the
Modification Date ever occurs.
The terms contained in this Commitment Letter and the Term Sheet are
confidential and, except for disclosure to your Board of Directors, officers and
employees, professional advisors retained by you in connection with this
transaction, or as may be required by law, may not be disclosed in whole or in
part to any other person or entity without our prior written consent, except
that, following your acceptance hereof, you may make public disclosure of this
Commitment Letter (but not the Fee Letter) and may file a copy of this
Commitment Letter and the Term Sheet (but not the Fee Letter) in any public
record in which it is required to be filed, based upon the advice of your
counsel.
Termination. This offer will terminate on January 20, 1997 unless on or before
that date you sign and return an enclosed counterpart of this Commitment Letter,
and it will expire on February 28, 1997 (the "Termination Date") if the
Modification Date has not occurred on or before that date. Furthermore, the
Arrangers may terminate this Commitment Letter and their obligations hereunder
to provide the Facility Modification if prior to the closing of the transactions
contemplated hereby (a) Borrower or Company shall fail or refuse to comply in a
timely manner with any of the terms or conditions set forth herein, (b) any
material adverse change since the date of this Commitment Letter shall occur
with respect to any of the business, assets, condition (financial or otherwise)
or operations of Borrower or
American General Hospitality Operating Partnership, L.P.
January 15, 1997
Page 4
Company at any time prior to the closing of the transactions contemplated
hereby, (c) any Event of Default under the Credit Agreement shall remain
uncured, (d) Borrower or Company shall be insolvent or involved as debtor in any
arrangement, bankruptcy, reorganization or insolvency proceeding, or (e) the
Arrangers determine based on the advice of independent counsel that the funding
of the Facility Modification or performance of Borrower's or Company's duties or
obligations under this Commitment Letter (including the Term Sheet) or the
documents evidencing or securing the Facility Modification would violate, or be
prohibited by, applicable Federal, State or local law, including usury
limitations, or any applicable rule, order, statute, judgment or decree of any
legislative body, board, court, tribunal, commission, or governmental authority
or agency having jurisdiction over the Arrangers. The Arrangers may terminate
this Commitment Letter and the obligations of the Arrangers hereunder to provide
the Facility Modification if, (i) in the reasonable opinion of the Arrangers,
any information or documentation submitted to the Arrangers proves to be
inaccurate, incomplete or misleading in any material respect, (ii) Borrower or
Company withholds any information which, in the reasonable opinion of the
Arrangers, is material to the decisions of the Arrangers to provide the Facility
Modification to Borrower, (iii) any of the fees or expenses required to be paid
by Borrower hereunder, under the Fee Letter or under the Credit Agreement are
not paid when due, or (iv) the ability of the Arrangers to conduct due diligence
in a manner satisfactory to the Arrangers is, in the reasonable opinion of the
Arrangers, hampered in any material respect. Notwithstanding any termination of
this Commitment Letter, the compensation, reimbursement and indemnification
provisions hereof shall survive any termination hereof.
The Commitment Letter, the Fee Letter and the Term Sheet shall be governed by,
and construed in accordance with, the internal laws of the State of Texas
without reference to principles of conflict of law. ALL PARTIES TO THIS
COMMITMENT LETTER AGREEMENT IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING ARISING OUT OF THIS COMMITMENT LETTER, THE FEE LETTER AND
THE TERM SHEET OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. IN THE EVENT
OF LITIGATION, THIS COMMITMENT LETTER MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
This Commitment Letter, the Fee Letter and the Term Sheet shall not be
assignable by you without the prior written consent of the Arrangers and may not
be amended or any provision hereof or thereof waived or modified except by an
instrument in writing signed by each of the parties hereto.
This Commitment Letter, the Fee Letter and the Term Sheet constitute the entire
agreement among the parties pertaining to the subject matter hereof and thereof
and supersede all prior and contemporaneous agreements, understandings,
representations or other arrangements, whether express or implied, written or
oral, of the parties in connection therewith except to the extent expressly
incorporated or specifically referred to herein or therein.
American General Hospitality Operating Partnership, L.P.
January 15, 1997
Page 5
If the foregoing is satisfactory to you, please indicate your agreement and
acceptance below and return a copy of this Commitment Letter to us. Upon your
delivery to us of a signed copy of this Commitment Letter and the Fee Letter,
this Commitment Letter shall become a binding agreement under laws of the State
of Texas as of the date so accepted. This Commitment Letter may be executed in
multiple counterparts, each of which shall be an original, but all of which
shall constitute but one Commitment Letter.
American General Hospitality Operating Partnership, L.P.
January 15, 1997
Page 6
Signature Page to the Commitment Letter
We are pleased to have this opportunity and look forward to working with you.
Very truly yours,
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ Xxxxxx X. Day
------------------------------------------
Xxxxxx X. Day
Vice President
BANK ONE, TEXAS, N.A.
By: /s/ Xxxx Xxxxxxx
------------------------------------------
Xxxx Xxxxxxx
Vice President
Accepted and Agreed to:
AMERICAN GENERAL HOSPITALITY OPERATING PARTNERSHIP, L.P.
By: AGH GP, Inc., its general partner
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
-------------------------------
Title: Executive Vice-President
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AMERICAN GENERAL HOSPITALITY CORPORATION
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
---------------------------
Title: Executive Vice-President
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[LOGO OF SOCIETE GENERALE APPEARS HERE]
XXXXXXXX XXXX CENTER
SUITE 4900
0000 XXXX XXXXXX
XXXXXX, XXXXX 00000
000 000 0000
FAX: 000 000 0000
U.S. REAL ESTATE GROUP
Via Fax: 000-0000
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January 14, 1997
Xx. Xxxxxxx X. Xxxx
Senior Vice President - Finance
American General Hospitality, Inc.
0000 X. Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
RE: Proposed $50 Million Increase to the Revolving Credit Facility
Dear Xxx:
Summarized below are the proposed modifications to the American General
Hospitality Operating Partnership, L.P. revolving credit facility:
Facility Amount: Increase from $100,000,000 to $150,000,000.
Additional Indebtedness: Subject to compliance with all other facility
terms and conditions, American General
Hospitality Corporation and/or its single-asset
affiliates may incur up to $50 million in
recourse and property-specific debt. Included in
the $50 million are the existing mortgages on
the Secaucus - Marriott and DFW South properties.
Except as set forth above, the Borrower may not
incur additional indebtedness outside of the
proposed $150 million facility.
Other Terms/Conditions: Modification of existing collateral documents,
title insurance, legal opinions, etc., and other
matters customary for a modification of this
type. All other terms and conditions will remain
as they currently are under the existing credit
facility.
Xx. Xxxxxxx X. Xxxx
January 14, 1997
Costs & Expenses: American General Hospitality Operating Partnership, L.P.
will be responsible for all costs associated with the
facility increase including but not limited to
syndication expenses and the legal expenses incurred by
Societe Generale (Xxxxxxxxx & Xxxxxxxxx) and Bank One
(Xxxxxxx, Xxxxxxx & Xxxxxxx).
As done at the outset of the transaction, Societe Generale will lead the
syndication efforts with assistance from Bank One. Societe Generale and Bank
One intend to increase their respective commitment levels from $30 million to
$55 million in order to assure a timely increase to $150 million. We will then
syndicate our positions to a to-be-determined amount. Each of the existing
syndicate banks have expressed interest in increasing their portion of the
credit facility. Based upon the level of interest expressed by each of the
syndicate banks, I anticipate that we will be adding one additional bank to the
bank group.
Please be advised that the proposed modifications are being outlined solely for
discussion purposes and are exclusively intended to communicate the general
business terms and financing parameters being considered by Societe Generale and
Bank One. Neither this outline nor the participation in discussions shall be
construed as a commitment to modify the existing financing. Societe Generale
and Bank One may terminate financing discussions at any time, in their sole
discretion, without notice and liability of any kind.
Very truly yours,
/s/ Xxxxxx X. Day
Xxxxxx X. Day
Vice President
cc: Xx. Xxxx Xxxxxxx (via fax: 000-0000)
Xx. Xxxx Xxxxxxxx (via fax: 000-000-0000)
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