This SECOND RESTRUCTURING AGREEMENT (the "Agreement") is entered into as of May 27, 1997 by and among TEACHER RETIREMENT SYSTEM OF TEXAS ("TRS"), WESTIN HOTEL COMPANY ("Westin"), WESTIN REALTY CORP. ("Westin Realty"), ST. FRANCIS HOTEL CORPORATION ("St. Francis Hotel Corporation"), THE WESTIN ST. FRANCIS LIMITED PARTNERSHIP ("St. Francis Hotel Partnership"), 909 NORTH MICHIGAN AVENUE CORPORATION ("Chicago Hotel Corporation"), THE WESTIN CHICAGO LIMITED PARTNERSHIP ("Chicago Hotel Partnership") and WESTIN HOTELS LIMITED PARTNERSHIP ("WHLP," and together with Westin, Westin Realty, St. Francis Hotel Corporation, St. Francis Hotel Partnership, Chicago Hotel Corporation and Chicago Hotel Partnership, collectively, the "Westin Parties").
R E C I T A L S
A. On or about August 21, 1986, TRS made a loan (the "St. Francis Loan") to St. Francis Hotel Corporation in the principal amount of $83,325,000. The St. Francis Loan is evidenced by that certain Promissory Note dated as of August 21, 1986, by St. Francis Hotel Corporation in favor of TRS, as amended by that certain First Amendment To Promissory Note dated as of June 2, 1994 and by that certain Second Amendment to Promissory Note of even date herewith (as further amended from time to time, the "St. Francis Note"), and is secured by a first-priority, properly recorded lien on The Westin St. Francis (the "St. Francis Hotel") and other Mortgaged Property (as defined in the St. Francis Deed of Trust, as hereinafter defined) pursuant to that certain Deed Of Trust, Financing Statement, Security Agreement And Fixture Filing (With Assignment Of Rents And Leases) dated as of August 21, 1986, by St. Francis Hotel Corporation, as Trustor, to Transnation Title Insurance Company (formerly known as Transamerica Title Insurance Company), as Trustee (the "Trustee") for the benefit of TRS, as Beneficiary, as amended by that certain First Amendment To Deed Of Trust, Financing Statement, Security Agreement And Fixture Filing (With Assignment Of Rents And Leases) dated as of June 2, 1994 and by that certain Second Amendment to Deed of Trust, Financing Statement, Security Agreement and Fixture Filing of even date herewith (as further amended from time to time, the "St. Francis Deed of Trust"). The St. Francis Note, the St. Francis Deed of Trust and all other Loan Documents (as defined in the St. Francis Deed of Trust) shall hereinafter be referred to as the "St. Francis Loan Documents."
B. On or about August 21, 1986, TRS made a loan (the "Chicago Loan," and together with the St. Francis Loan, collectively, the "Loans") to Chicago Hotel Corporation in the principal amount of $32,825,000. The Chicago Loan is evidenced by that certain Promissory Note dated as of August 21, 1986, by Chicago Hotel Corporation in favor of TRS, as amended by that certain First Amendment To Promissory Note dated as of June 2, 1994 and by that certain Second Amendment to Promissory Note of even date herewith (as further amended from time to time, the "Chicago Note"), and is secured by a first-priority, properly recorded lien on The
4 2 Westin Hotel, Chicago (the "Chicago Hotel," and together with the St. Francis Hotel, collectively, the "Hotels") and other Premises (as defined in the Mortgage, as defined below) pursuant to that certain Mortgage and Security Agreement by Chicago Hotel Corporation, as Mortgagor, in favor of TRS, as Mortgagee, as amended by that certain First Amendment To Mortgage And Security Agreement dated as of June 2, 1994 and by that certain Second Amendment to Mortgage and Security Agreement of even date herewith (as further amended from time to time, the "Chicago Mortgage"). The Chicago Note, the Chicago Mortgage and all other Loan Documents (as defined in the Chicago Mortgage) shall hereinafter be referred to as the "Chicago Loan Documents," and the St. Francis Loan Documents and the Chicago Loan Documents shall hereinafter be collectively referred to as the "Loan Documents."
C. Contemporaneously with the making of the St. Francis Loan, pursuant to that certain Agreement for the Contribution of Assets and the Transfer of Limited Partnership Interests dated as of August 28, 1986, between St. Francis Hotel Corporation and St. Francis Hotel Partnership, St. Francis Hotel Corporation transferred all of its right, title and interest in and to the St. Francis Hotel and the other Property (as defined therein) to St. Francis Hotel Partnership. As the assignee of St. Francis Hotel Corporation, St. Francis Hotel Partnership became subject to all of the provisions of the St. Francis Note, the St. Francis Deed of Trust and the other St. Francis Loan Documents in the same capacity as St. Francis Hotel Corporation, and consequently became jointly and severally liable with St. Francis Hotel Corporation for all of St. Francis Hotel Corporation's obligations and liabilities under the St. Francis Note, the St. Francis Deed of Trust and the other St. Francis Loan Documents. St. Francis Hotel Corporation and St. Francis Hotel Partnership shall hereinafter be referred to individually and collectively as the "St. Francis Debtor."
D. Contemporaneously with the making of the Chicago Loan, pursuant to that certain Agreement for the Contribution of Assets and the Transfer of Limited Partnership Interests dated as of August 28, 1986, between Chicago Hotel Corporation and Chicago Hotel Partnership, Chicago Hotel Corporation transferred all of its right, title and interest in and to the Chicago Hotel and the other Property (as defined therein) to Chicago Hotel Partnership. As the assignee of Chicago Hotel Corporation, Chicago Hotel Partnership became subject to all of the provisions of the Chicago Note, the Chicago Mortgage and the other Chicago Loan Documents in the same capacity as Chicago Hotel Corporation, and consequently became jointly and severally liable with Chicago Hotel Corporation for all of Chicago Hotel Corporation's obligations and liabilities under the Chicago Note, the Chicago Mortgage and the other Chicago Loan Documents. Chicago Hotel Corporation and Chicago Hotel Partnership shall hereinafter be individually and collectively referred to as the "Chicago Debtor."
E. Pursuant to that certain Amended and Restated Management Agreement among Westin, St. Francis Hotel Corporation, St. Francis Hotel Partnership and WHLP dated as of August 21, 1986 (the "Original St. Francis Management Agreement," and as amended from time to time, the "St. Francis Management Agreement"), and that certain Amended and Restated Management Agreement among Westin, Chicago Hotel Corporation, Chicago Hotel Partnership
5 3 and WHLP dated as of August 21, 1986 (the "Original Chicago Management Agreement," and as amended from time to time, the "Chicago Management Agreement," and together with the St. Francis Management Agreement, collectively, the "Management Agreements"), Westin, among other things, manages the operations of the St. Francis Hotel and the Chicago Hotel, respectively.
F. St. Francis Hotel Corporation is the sole general partner of St. Francis Hotel Partnership, and Chicago Hotel Corporation is the sole general partner of Chicago Hotel Partnership. Each of St. Francis Hotel Corporation and Chicago Hotel Corporation is a wholly-owned subsidiary of Westin. In addition, Westin Realty, a wholly-owned subsidiary of Westin, is the sole general partner of WHLP, which in turn is the sole limited partner of each of St. Francis Hotel Partnership and Chicago Hotel Partnership.
G. The Parties hereto are also parties to a Restructuring Agreement dated as of June 2, 1994 (the "First Restructuring Agreement") which provided for various modifications to the Loans.
H. The parties hereto previously executed a Term Sheet dated April 16, 1997 which set forth certain parameters of a second restructuring (the "Restructuring") more particularly described in this Agreement and the other Restructuring Documents (as hereinafter defined), pursuant to which, among other things, (i) TRS has agreed, subject to the terms and conditions set forth in the applicable Restructuring Documents, to (i) reduce the interest rates on the St. Francis Loan and the Chicago Loan, (ii) amend the prepayment provisions of those Loans, (iii) extend the maturity date of each Loan, and (iv) modify the amortization requirements of each Loan. This Agreement supercedes the Term Sheet in its entirety.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing recitals and the agreements, promises and covenants set forth below and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth below:
1.1 "Restructuring Documents" shall mean (i) all of the agreements referenced in clauses (i) through (vi) of the first sentence of Section 2 hereof; and (ii) all other agreements, instruments, authorizations, and documents executed or to be executed in connection with any of the foregoing or any of the transactions contemplated thereby, as each of the foregoing agreements, instruments, authorizations and documents may be amended, restated, supplemented or otherwise modified from time to time.
6 4
2. Effectiveness of Restructuring Documents Executed by TRS. Contemporaneously with the execution of this Agreement, TRS has executed the following Restructuring Documents: (i) that certain Second Amendment to Promissory Note of even date herewith among St. Francis Hotel Corporation and St. Francis Hotel Partnership, as Maker, and TRS, as Holder, (ii) that certain Second Amendment To Deed Of Trust, Financing Statement, Security Agreement And Fixture Filing (With Assignment Of Rents And Leases) of even date herewith among St. Francis Hotel Corporation and the St. Francis Hotel Partnership, as Trustor, TRS, as Beneficiary, and Transamerica Title Insurance Company, as Trustee for the benefit of TRS ("Second Amendment to St. Francis Deed of Trust"), (iii) that certain Second Amendment to Assignment of Leases, Assignment of Management Agreement and Subordination of Management Agreement of even date herewith among TRS, Westin, WHLP, St. Francis Hotel Corporation and St. Francis Hotel Partnership, (iv) that certain Second Amendment to Promissory Note of even date herewith among Chicago Hotel Corporation and Chicago Hotel Partnership, as Maker, and TRS, as Holder, (v) that certain Second Amendment to Mortgage and Security Agreement of even date herewith among Chicago Hotel Corporation and Chicago Hotel Partnership, as Mortgagor, and TRS, as Mortgagee ("Second Amendment to Chicago Mortgage"), and (vi) that certain Second Amendment to Assignment of Rents and Leases, Assignment of Management Agreement and Subordination of Management Agreement of even date herewith among TRS, Westin, WHLP, Chicago Hotel Corporation and Chicago Hotel Partnership. The foregoing Restructuring Documents executed by TRS shall become effective on the date (the "Effective Date") on which the following conditions have been satisfied (as determined by TRS in its sole discretion):
2.1 Documents. TRS shall have received, in form and substance satisfactory to TRS and its counsel, fully executed originals of each of the Restructuring Documents executed by all other parties thereto.
2.2 Corporate and Partnership Action of the Westin Parties. TRS shall have received, in form and substance satisfactory to TRS and its counsel:
(a) certified copies of all corporate or partnership
action taken by each of the Westin Parties to authorize the
execution, delivery and performance of this Agreement and the other
Restructuring Documents to which such Westin Party is a signatory;
(b) a certificate of incumbency with respect to the
officers of each Westin Party authorized and directed to execute
and deliver this Agreement and the other Restructuring Documents to
which such Westin Party is a signatory;
(c) certified copies of the certificate or articles of
incorporation, by-laws, partnership agreements and other
7 5
organizational or governing documents of each of the Westin
Parties, as amended through the date hereof;
(d) certificate(s) of good standing for each of the
Westin Parties from the appropriate authority in its jurisdiction
of incorporation or formation and in California and Illinois.
2.3 Consents. TRS shall have received all of the consents necessary, in the opinion of TRS and its counsel, to accomplish the transactions contemplated by this Agreement and the other Restructuring Documents.
2.4 Officer's Certificate. TRS shall have received, as an inducement to TRS to enter into this Agreement and the other Restructuring Documents, a certificate of St. Francis Hotel Corporation and St. Francis Hotel Partnership, in the case of the St. Francis Loan Documents, and Chicago Hotel Corporation and Chicago Hotel Partnership, in the case of the Chicago Loan Documents, in each case executed by a designated officer of such entity reasonably acceptable to TRS and dated the date hereof, certifying to the best of such person's knowledge that as of such date:
(a) no Event of Default (as defined in the St. Francis
Deed of Trust or the Chicago Mortgage, as applicable) has occurred
and is continuing under any of the St. Francis Loan Documents or
the Chicago Loan Documents, as applicable; and
(b) the representations and warranties of the Chicago
Debtor or the St. Francis Debtor, as applicable, contained in this
Agreement, the other Restructuring Documents and the Loan Documents
to which the Chicago Debtor or the St. Francis Debtor, as
applicable, is a party, and in any certificate, document or
financial or other statement furnished by the Chicago Debtor or the
St. Francis Debtor, as applicable, are true and correct.
2.5 Financing Fee. The Chicago Debtor and the St. Francis Debtor shall have paid TRS a single financing fee in the amount of $200,000 (the "Financing Fee"), payable in cash on the Effective Date.
2.6 Payment of Professional Fees and Other Expenses. The Chicago Debtor and the St. Francis Debtor shall have paid in full (i) all reasonable fees, expenses and disbursements of Latham & Watkins for which invoices have been submitted to them on or before the Effective Date, (ii) all title insurance fees incurred in connection with the title insurance described in Section 2.9, (iii) appraisal fees and (iv) all recording and other expenses incurred by TRS in connection herewith. This condition precedent shall not derogate from the continuing obligations of the Chicago Debtor and the St. Francis Debtor under the applicable
8 6 indemnification and reimbursement provisions of the Chicago Mortgage and the St. Francis Deed of Trust.
2.7 Documentation and Proceedings. All corporate, partnership and other legal proceedings and all instruments in connection with the transactions contemplated by this Agreement and the other Restructuring Documents shall be satisfactory in form and substance to TRS and its counsel, and TRS shall have received all information and copies of all documents, including records of corporate and partnership proceedings, governmental approvals and incumbency certificates which it may have reasonably requested in connection with the transactions contemplated by this Agreement and the other Restructuring Documents, such documents where appropriate to be certified by proper officers.
2.8 Legal Opinions. TRS shall have received the opinion of the Westin Parties' Illinois local counsel, California local counsel and Delaware local counsel addressed to TRS, and such other opinions of counsel as TRS may reasonably request, in each case, in form and substance satisfactory to TRS and its counsel.
2.9 Title Insurance. TRS shall have received title insurance policies (or endorsements to the existing title insurance policies), in form and substance satisfactory to TRS and its counsel, issued by title insurance companies satisfactory to TRS, with endorsements satisfactory to TRS (i) showing the St. Francis Deed of Trust and the Chicago Mortgage to be a first and prior lien or charge upon the Mortgaged Property (as defined in the St. Francis Deed of Trust) and the Premises (as defined in the Chicago Mortgage), respectively, (ii) bringing the existing title insurance policies in favor of TRS to date and (iii) insuring the Second Amendment to St. Francis Deed of Trust and the Second Amendment to Chicago Mortgage, respectively.
2.10 FF&E Escrow Agreements. The Chicago Hotel Partnership, TRS, and American National Bank & Trust Company of Chicago, as Escrow Agent ("ANB") are parties to that certain Chicago FF&E Escrow Agreement dated as of June 2, 1994. The St. Francis Hotel Partnership, TRS, and Wells Fargo Bank, as Escrow Agent are parties to that certain St. Francis FF&E Escrow Agreement dated as of June 2, 1994. (The Chicago FF&E Escrow Agreement and the St. Francis FF&E Escrow Agreement are collectively referred to herein as the "Escrow Agreements.") The parties agree that the Escrow Agreements shall remain in full force and effect so long as the indebtedness owed to TRS pursuant to the Loans remains outstanding. All references in either of the Escrow Agreements to the St. Francis Note, the St. Francis Deed of Trust, the Chicago Note, the Chicago Mortgage, or any other document affected by this Agreement or any of the Restructuring Documents shall after the Effective Date be deemed to be a reference to such document as amended in connection with this Agreement. The parties agree that within 10 days after the Effective Date, they shall cooperate to send the Escrow Agents under the Escrow Agreements a joint notification of this Agreement substantially in the form of Exhibits B-1 and B-2 hereto.
9 7
2.11 Additional Matters. All other documents and legal matters in connection with the transactions contemplated by this Agreement and the other Restructuring Documents shall be satisfactory in form and substance to TRS and its counsel.
3. Disbursement of Escrowed Funds. The Westin Parties agree that on the Effective Date, the $250,000 ("Escrowed Funds") previously deposited by the St. Francis Hotel Partnership and the Chicago Hotel Partnership with TRS pursuant to the terms of the Term Sheet shall be disbursed as follows:
a. $200,000 shall be paid to TRS as payment for the
Financing Fee as provided in Section 2.5.
b. An amount equal to the fees and expenses payable as
of the Effective Date pursuant to Section 2.6 shall
be paid to TRS or as TRS may direct.
c. The balance of the Escrowed Funds, if any, and any
interest earned on the Escrowed Funds shall be
disbursed to, WHLP, which entity shall be responsible
for any tax liabilities owed on the interest paid to
WHLP.
4. Consents.
4.1 Subject to satisfaction of the conditions to effectiveness set forth in Section 6, Westin hereby consents to the execution and delivery by the parties thereto of the Restructuring Documents referenced in Section 2 hereof.
5. Release of Guarantees. Upon the Effective Date, all obligations of Westin to TRS pursuant to that certain Payment Guaranty and Reimbursement Agreement (St. Francis Loan) dated June 2, 1994 by Westin in favor of TRS (the "Westin St. Francis Guaranty") and that certain Payment Guaranty and Reimbursement Agreement (Chicago Loan) dated June 2, 1994 by Westin in favor of TRS (the "Westin Chicago Guaranty"), in each case executed by Westin, shall terminate and thereafter be null and void.
6. Effectiveness of Restructuring Documents Executed by the Westin Parties. Contemporaneously with the execution of this Agreement, each of the Westin Parties has executed the Restructuring Documents to which it is a party. Those Restructuring Documents shall become effective on the Effective Date upon TRS's execution and delivery of the Restructuring Documents referenced in Section 2 hereof.
7. Representations and Warranties.
10 8
7.1 Representations and Warranties by the St. Francis Debtor. To induce TRS to enter into this Agreement and the other applicable Restructuring Documents, each of St. Francis Hotel Corporation and St. Francis Hotel Partnership jointly and severally represents and warrants to TRS that as of the Effective Date:
(a) Reaffirmation. All of the covenants, representations,
warranties and agreements made by St. Francis Hotel Corporation and
St. Francis Hotel Partnership in each of the St. Francis Loan
Documents are hereby reaffirmed and ratified in all respects (as if
St. Francis Hotel Partnership were a signatory to each of the St.
Francis Loan Documents in the same capacity as St. Francis Hotel
Corporation), and all such covenants, representations, warranties
and agreements shall have the same force and effect as if each were
separately stated herein and made as of the date hereof (and as if
St. Francis Hotel Partnership were a signatory to each of the St.
Francis Loan Documents in the same capacity as St. Francis Hotel
Corporation).
(b) Corporate/Partnership Existence. Each of St. Francis Hotel
Corporation and St. Francis Hotel Partnership (i) is duly
organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or formation, (ii) has the
corporate or partnership power and authority to own and operate its
property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, and (iii) is
duly qualified as a foreign corporation or a foreign partnership,
as applicable, and is in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification.
(c) Corporate Power; Authorization; Enforceable Obligations.
Each of St. Francis Hotel Corporation and St. Francis Hotel
Partnership has the corporate or partnership power and authority to
execute, deliver and perform this Agreement, the other
Restructuring Documents and all other agreements or documents
executed or to be executed by it in connection herewith or
therewith, and has taken all necessary corporate or partnership
action to authorize the execution, delivery and performance of this
Agreement, the other Restructuring Documents and all other
agreements or documents executed or to be executed by it in
connection herewith or therewith. No consent or authorization of,
filing with or other act by or in respect of any governmental
authority or any other person or entity (except as heretofore
11 9
obtained) is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement, the
other Restructuring Documents or the other agreements or documents
executed or to be executed by it in connection herewith or
therewith. Each of the St. Francis Loan Documents, this Agreement,
the other Restructuring Documents to which St. Francis Hotel
Corporation or St. Francis Hotel Partnership is a party and any
other agreement or document executed or to be executed by St.
Francis Hotel Corporation or St. Francis Hotel Partnership in
...
*End of Preview*
Click the 'Add to Cart' button to download the complete and formatted agreement.