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EXHIBIT 10.17
AMENDED AND RESTATED
MASTER HOTEL AGREEMENT
THIS AMENDED AND RESTATED MASTER HOTEL AGREEMENT ("Agreement")
is made as of 3:00 p.m. Central Time on July 27, 1998, among Bristol Hotels &
Resorts, Inc., a Delaware corporation that intends to change its name to Bristol
Hotels & Resorts ("BHR"), FelCor Suite Hotels, Inc., a Maryland corporation that
intends to change its name to FelCor Lodging Trust Incorporated ("FelCor"),
FelCor Suites Limited Partnership, a Delaware limited partnership that intends
to change its name to FelCor Lodging Limited Partnership ("FSLP"), and each of
the affiliates thereof signing below.
RECITALS:
A. Bristol Hotel Company, a Delaware corporation ("Bristol Hotel
Company"), and FelCor have entered into an Agreement and Plan of Merger dated as
of March 23, 1998, (the "Merger Agreement") pursuant to which, inter alia, BHR
will be spun-off to the shareholders of Bristol Hotel Company, Bristol Hotel
Company will merge with and into FelCor (the "Merger") and, as a condition to
such Merger, the Lessors (as hereinafter defined) shall have leased the Existing
Hotels (as hereinafter defined) to Lessees (as hereinafter defined).
B. BHR, FelCor and FSLP are parties to that certain Master Hotel
Agreement dated as of May 29, 1998 (the "MHA"), pursuant to which the parties
have set forth certain rights and obligations with respect to the Existing
Hotels.
C. The parties desire to amend and restate the MHA in order to set
forth and clarify the terms and conditions on which Lessors will lease the
Existing Hotels to Lessees, and to reaffirm certain other agreements as set
forth herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree, and the MHA is hereby amended and
restated to read in its entirety, as follows:
1. Certain Definitions. As used in this Agreement, the following terms
have the meanings set forth in this Section or in the Section indicated. Unless
the context otherwise requires, (a) references to the singular shall include the
plural and vice versa, (b) references to gender shall
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include all genders, (c) references to designated "Sections" or other
subdivisions are references to the designated Sections or other subdivisions of
this Agreement, (d) all accounting terms not otherwise defined herein shall have
the meanings assigned to them in accordance with GAAP and, if applicable, the
Uniform System (as defined in the Percentage Leases), and (e) the words
"herein," "hereof," and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular Section or other
subdivision. CAPITALIZED TERMS USED AND NOT DEFINED HEREIN SHALL HAVE THE
RESPECTIVE MEANINGS, IF ANY, SET FORTH IN THE PERCENTAGE LEASES.
Affiliate--shall mean, with respect to any Person, any Person that,
directly or indirectly, controls or is controlled by or is under common control
with such Person, or any other Person that owns, beneficially, directly or
indirectly, fifty percent (50%) or more of the outstanding capital stock, shares
or equity interests of such Person. For the purposes of this definition,
"control" (including the correlative meanings of the terms "controlled by" and
"under common control with"), as used with respect to any entity shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity, through the ownership
of voting securities, partnership interests or other equity interests.
Affiliated Manager--shall mean an entity that is a manager of one of
the Hotels and an Affiliate of BHR or a Lessee.
Agreement--shall have the meaning set forth in the Preamble.
Closing Date--shall mean the effective date of the Merger.
Code--shall mean the Internal Revenue Code of 1986, as amended.
Credit Enhancement--shall mean an unconditional letter of credit in
form reasonably acceptable to FelCor, provided by Bankers Trust Company or any
other financial institution reasonably acceptable to FelCor for the benefit of
the applicable Lessor(s) and FelCor, or a guaranty in the form of the Guaranty
provided by BHR (or, if permitted by Lessor, other Affiliates of Lessee), or
other form of credit enhancement with respect to the Percentage Leases that is
reasonably acceptable to the applicable Lessor(s). The form of any Credit
Enhancement shall be subject to the reasonable approval of Lessor, and any
Credit Enhancement shall be subject to the reasonable approval of FelCor's REIT
tax counsel.
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Credit Enhancement Amount--shall mean the aggregate amount that is
currently available, (without material restriction) under all forms of Credit
Enhancement obtained by a Lessee, to make payments due under the Percentage
Leases to which it is a party.
Default by Lessee--shall have the meaning set forth in Section 10(a).
Existing Hotels--shall mean the Hotels listed on Exhibit A attached
hereto, as such Exhibit A is amended or supplemented from time to time by
written agreement between FelCor and BHR.
GAAP--shall mean, as of any date of determination, accounting
principles (a) set forth as generally accepted in then currently effective
Opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (b) set forth as generally accepted in then
currently effective Statements of the Financial Accounting Standards Board or
(c) that are then approved by such other entity as may be approved by a
significant segment of the accounting profession in the United States of
America. The term "consistently applied," as used in connection therewith, means
that the accounting principles applied are consistent in all material respects
to those applied at prior dates or for prior periods.
Guaranty--shall mean a Guaranty of a Percentage Lease substantially in
the form attached hereto as Exhibit C.
Hostile Change of Control--shall mean, at the relevant time, (i) any
event resulting in any "person" or "group" (within the meaning of Sections 13(d)
and 14(d) of the 1934 Act), other than United/Harvey Holdings, L.P. or any
Affiliate thereof, becoming the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the 1934 Act) directly or indirectly, of more than fifty percent
(50%) of the total voting power of all classes of capital stock of BHR or, if
applicable, the ultimate parent ("Parent"), at the relevant time, of BHR or a
Lessee or an Affiliated Manager then outstanding and entitled to vote generally
in elections of directors ("Voting Stock") and such beneficial ownership was
acquired within a period of two (2) years following a tender offer by such
person (or any of its Affiliates) for shares of Voting Stock of such Parent or a
solicitation of proxies with respect to Voting Stock of such Parent by such
person, if, in either case, such tender offer or solicitation of proxies was not
approved by a majority of the Board of Directors of such Parent in office at the
time such tender offer or proxy solicitation was commenced, or (ii) a majority
of the Board of Directors of the Parent, at the relevant time, being constituted
of individuals who were elected pursuant to a
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solicitation of proxies with respect to Voting Stock of such Parent, if such
solicitation of proxies was not approved by a majority of the Board of Directors
of such Parent in office at the time such solicitation of proxies was commenced.
Hotels--shall mean, with respect to any pertinent date, the Existing
Hotels and any New Hotels which are then currently leased by a Lessor to a
Lessee and, with respect to any pertinent period, the Existing Hotels and any
New Hotels, that are leased by a Lessor to a Lessee at any time during such
period.
Lessee--shall mean each of the direct or indirect subsidiaries of BHR
that is a lessee of a Hotel under a Percentage Lease, including, without
limitation, those listed under the heading "Lessee" on the signature pages of
this Agreement that have entered into the Percentage Leases effective as of the
Closing Date.
Lessee Income Before Corporate Overhead--shall mean, for any period,
the amount (not less than zero) by which the Gross Revenues of a Hotel for such
period exceed the sum of (i) the Gross Operating Expenses for such period for
which Lessee is responsible under the Percentage Lease covering such Hotel
(other than management fees payable to any Affiliated Manager) and (ii) the Rent
payable to Lessor for such period under such Percentage Lease.
Lessor--shall mean any one of the owners of the Hotels that is an
Affiliate of FelCor from and after the Closing Date and that is a lessor of a
Hotel under a Percentage Lease, including, without limitation, those listed
under the heading "Lessor" on the signature pages of this Agreement.
Liquid Assets Amount--shall mean, for any Person, the sum of (i) the
Person's and the proportionate share of its Subsidiaries' Working Capital and
(ii) the lesser of the aggregate GAAP book value and the aggregate current fair
market value of such Person's assets, and the proportionate share of its
Subsidiaries' assets, of the following types: (A) any contracts to lease or
manage hotels or other hospitality properties owned by Persons other than
Lessor, Lessee and their Affiliates, (B) any hotels, hospitality properties or
other marketable real property owned by such Person and its Subsidiaries, and
(C) to the extent reasonably acceptable to Lessor, any other income-producing or
readily marketable tangible property, equity interests, securities or other
investments owned by such Person and its Subsidiaries. In the case of assets
described in clause (ii) of the preceding sentence, both the GAAP book value and
the current market value of any such assets shall be
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determined net of any indebtedness or liabilities (including such Person's
liability under any Guaranty) not expressly or structurally subordinated to the
payment of Rent on terms reasonably acceptable to Lessor. Any disputes regarding
the fair market value of an asset will be resolved in accordance with the
appraisal procedures set forth in Article 33 of the Percentage Leases.
Liquid Net Worth--shall mean the lesser of (i) the sum of (A) the Net
Worth of a Lessee and (B) the Lessee's Credit Enhancement Amount, and (ii) the
sum of (C) the Lessee's Liquid Assets Amount and (D) the Lessee's Credit
Enhancement Amount, as reasonably approved by FelCor's REIT tax counsel, which
Liquid Net Worth is required to be not less than $30,000,000 as of the Closing
Date.
Merger--shall have the meaning set forth in the Preamble.
Merger Agreement--shall have the meaning set forth in the Preamble.
Minimum Liquid Net Worth--shall mean, as of any pertinent date,
aggregate Liquid Net Worth for a Lessee (or, where appropriate, all of the
Lessees in the aggregate) equal to fifteen percent (15%) of the Rent projected
(budgeted) to be paid by such Lessee (or, where appropriate, all Lessees) under
approved Revenue Budgets prepared in conformity with the Percentage Leases
during the then current calendar year (or as otherwise projected by FelCor and
BHR in the case of 1998 and the final year of the Term, including any extension
thereof), as adjusted from time to time as set forth below. To the extent that a
Lessee leases one or more New Hotels from Lessor, the Minimum Liquid Net Worth
requirement for the respective Lessee (for the remainder of the then current
calendar year or until another adjustment is required hereunder, whichever first
occurs) will be increased as a result of each such New Hotel by an amount equal
to fifteen percent (15%) of the Percentage Rent projected to be paid during the
first twelve (12) months of the Percentage Lease for such New Hotel. In
addition, to the extent that the Percentage Lease for any Hotel is terminated or
expires, the Minimum Liquid Net Worth requirement with respect to the respective
Lessee will be reduced (for the remainder of the then current calendar year or
until another adjustment is required hereunder, whichever first occurs) by the
amount of the Minimum Liquid Net Worth requirement attributable to such Hotel.
Each Lessee's allocable Minimum Liquid Net Worth shall be determined based on
the Rent projected to be paid by such Lessee.
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Net Economic Benefit--shall mean, with respect to a proposed,
terminated or replacement Percentage Lease or a replacement management agreement
hereunder, the net present value of the Lessee Income Before Corporate Overhead
that is projected to be earned by the related Lessee or Affiliate of BHR during
the remaining term of such Percentage Lease or management agreement (including,
in the case of a proposed, terminated or replacement Percentage Lease, the First
Extension, regardless of whether the Lessee has exercised its option with
respect to such First Extension, and the Second Extension if, but only if, the
Lessee has properly exercised its option with respect to such Second Extension
prior to the date on which the Lessor provides notice to the Lessee of an
anticipated Percentage Lease termination), calculated using an agreed discount
rate based upon a then market discount rate. In addition, the parties shall make
any mutually agreeable adjustments to the foregoing calculation that are
necessary or appropriate to assure that the calculation properly reflects the
economic value of the Percentage Lease or management agreement to the Lessee or
Affiliate of BHR.
Net Worth--shall mean the excess of total assets over total
liabilities, total assets and total liabilities each to be determined in
accordance with GAAP, excluding, however, from the determination of total
assets: (a) unamortized goodwill, organizational expenses, research and
development expenses, trademarks, trade names, copyrights, patents, patent
applications, and other similar intangibles; (b) all deferred charges that are
required to be capitalized in accordance with GAAP or unamortized debt discounts
and expense; (c) treasury stock; (d) securities which are not readily
marketable, (e) any write-up in the book value of any asset resulting from a
revaluation thereof, other than as recognized pursuant to the terms of this
Agreement; (f) the Percentage Leases; and (g) any items (other than assets
included in Liquid Assets Amount) that are not included in clauses (a) through
(f) above that are treated as intangibles in conformity with GAAP.
New Hotels--shall mean the hotels (if any) other than the Existing
Hotels that, as of any pertinent date, are then currently leased by a Lessor to
a Lessee and have not been excluded from treatment as a New Hotel under this
Agreement as provided in Section 4 below.
Non-Consent Hotels--shall mean any Hotel as to which:
(i) with respect to an Existing Hotel, the Ground Lessor or
Mortgagee refuses to give any required consent to the subjecting of such Hotel
to a proposed Percentage Lease (or any other
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required consent) in connection with the Merger and neither BHR nor an Affiliate
of BHR is retained to manage, or offered the right to manage, the Hotel pursuant
to a management agreement providing the hotel manager with substantially the
same (or greater) projected Net Economic Benefit as would have a Percentage
Lease entered into pursuant to this Agreement; provided, however, that any such
Hotel shall not be deemed a Non-Consent Hotel in the event that the Ground Lease
or Lessor's interest therein is terminated by the Ground Lessor or Mortgagee as
a result of the failure to obtain any such consent to (or in connection with)
the Merger or a Percentage Lease of such Hotel; or
(ii) With respect to any Hotel, Lessor hereafter defaults
under the Mortgage (other than as a result of a default by Lessee under the
Percentage Lease) and the Mortgagee, its designee or a purchaser at foreclosure
acquires the Hotel (by foreclosure or transfer in lieu of foreclosure) free of
the interest of Lessee therein and does not retain BHR or an Affiliate thereof
to manage the Hotel.
1933 Act--shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
1934 Act--shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
Percentage Lease--shall mean, with respect to one or more Existing
Hotels, a lease entered into between Lessor and Lessee on or about the date
hereof with respect to such Hotel substantially in the form executed of even
date herewith with respect to the Existing Hotels and, with respect to each New
Hotel, any lease as entered into between a Lessor and a Lessee pursuant to
Section 4 hereof.
Post-Default Operating Expenses--shall mean the Gross Operating
Expenses of continuing to operate a Hotel under a Percentage Lease as to which
an Event of Default has occurred and is continuing, to the extent incurred prior
to the effective date of termination of such Percentage Lease by the Lessor,
other than amounts (including management fees) payable to Affiliates of Lessee;
provided, however, that Post-Default Operating Expenses may include (i)
reasonable out-of-pocket Gross Operating Expenses reimbursable to such Affiliate
and (ii) the portion of any monthly management fee due by Lessee to an
Affiliated Manager in an amount not in excess of one and one-half percent (1.5%)
of the then current monthly amount of Gross Revenues of the Hotel.
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Recognition Agreement--shall mean any agreement entered into between
FelCor and/or the Lessors, on the one hand, and any senior lender to BHR and/or
the Lessees, on the other hand, providing such senior lender with notice of and
an opportunity to cure defaults by Lessee and other commercially reasonable
provisions reasonably acceptable to FelCor designed to protect the interests of
such senior lender.
REIT Restrictions--shall have the meaning set forth in Section 8 below
Rent--shall mean the rent payable under each Percentage Lease
(including both Base Rent and Percentage Rent).
Sale Hotels--Any Existing Hotel heretofore identified by BHR and FelCor
as not properly within FelCor's strategic target portfolio and therefore likely
to be sold within a reasonable time following the Closing Date rather than
renovated by Lessor, as listed on Exhibit B attached hereto.
Short Term Sale Hotels--Any Sale Hotel that has been owned by the
related Lessor, as of the effective date of the Termination Fee Payment Event,
for less than eighteen (18) months following the Commencement Date.
SEC--shall mean the U.S. Securities and Exchange Commission.
Termination Fee--shall mean all amounts paid or credited under Section
3(e) below.
Termination Fee Base Amount--shall mean (i) an amount equal to
seventy-five percent (75%) of the Lessee Income Before Corporate Overhead for an
Existing Hotel (other than a Short-Term Sale Hotel) for the twelve (12) full
calendar months prior to the effective date of the Termination Fee Payment Event
with respect to such Existing Hotel; (ii) an amount equal to fifty percent (50%)
of the Lessee Income Before Corporate Overhead for a Short-Term Sale Hotel for
the twelve (12) full calendar months prior to the effective date of the
Termination Fee Payment Event with respect to such Short-Term Sale Hotel; and
(iii) an amount equal to one hundred percent (100%) of the Lessee Income Before
Corporate Overhead for a New Hotel for the twelve (12) full calendar months
prior to the effective date of the Termination Fee Payment Event with respect to
such New Hotel. In the case of a Hotel that has been owned by the related Lessor
for less than twelve (12) full calendar months following the Commencement Date
and prior to the effective date of the Termination Fee Payment Event, the Lessee
Income Before Corporate Overhead for such Hotel for the twelve-month measuring
period will be determined on a pro forma basis as though the related Percentage
Lease had
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been in effect for the entire measuring period. Notwithstanding the foregoing,
no Termination Fee shall be payable with respect to the sale of the Holiday Inn
Express - Atlanta Northeast (#257), which is scheduled for closing in August,
1998.
Termination Fee Payment Event--shall mean:
(i) a sale or other transfer by Lessor of a Hotel (other than
a Short-Term Sale Hotel) as to which (A) the Percentage Lease covering such
Hotel is to be terminated by Lessor solely as a result of such sale or other
transfer as permitted by the Percentage Lease, and (B) neither any Lessee nor
any Affiliate of BHR shall continue to be (or become) the lessee or manager of
such Hotel or, with respect to the Sale Hotels (other than Short-Term Sale
Hotels), one or more other hotels offered by FelCor in substitution therefor and
accepted by a Lessee or another Affiliate of BHR in the exercise of its sole
discretion pursuant to a replacement Percentage Lease and/or management
agreement, in either case, projected to provide equal or greater Net Economic
Benefit to such Lessee or other Affiliate of BHR; or
(ii) a sale or other transfer by Lessor of a Short-Term Sale
Hotel as to which (A) the Percentage Lease covering such Hotel is to be
terminated by Lessor solely as a result of such sale or other transfer as
permitted by the Percentage Lease, and (B) neither any Lessee nor any Affiliate
of BHR shall continue to be (or become) the lessee or manager of such Short-Term
Sale Hotel or one or more other hotels offered by FelCor in substitution
therefor (at any time within eighteen (18) months following the Termination Fee
Payment Event), and accepted by a Lessee or another Affiliate of BHR (in the
exercise of their reasonable discretion if not accepted prior to the sale or
other transfer of such Short-Term Sale Hotel) pursuant to a replacement
Percentage Lease and/or management agreement, in either case, projected to
provide equal or greater Net Economic Benefit to such Lessee or other Affiliate
of BHR; provided, however, that the Percentage Leases for the Four Points,
Leominster, Massachusetts, the Meadowlands Hilton, Secaucus, New Jersey, and the
Holiday Inn Select, University Center, Pittsburgh, Pennsylvania, each a New
Hotel recently purchased by Affiliates of FelCor, shall be deemed to be
accepted, replacement Percentage Leases hereunder with respect to any Percentage
Leases for Short-Term Sale Hotels that are terminated as a result of the sale of
the related Short-Term Sale Hotel, to the extent that the Net Economic Benefit
of the Percentage Lease associated with the Short-Term Sale Hotel that is sold,
when aggregated with the
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Net Economic Benefit of the Percentage Leases associated with Short-Term Sale
Hotels that previously have been sold, does not exceed the aggregate Net
Economic Benefit of the Percentage Leases associated with those three (3)
replacement New Hotels; or
(iii) an event by which an Existing Hotel shall become a
Non-Consent Hotel, unless any Lessee or other Affiliate of BHR shall become the
lessee or manager of another hotel offered by FelCor (or the Mortgagee, its
designee or a purchaser at foreclosure or transfer in lieu of foreclosure of the
Hotel) in substitution therefor, and accepted by a Lessee or another Affiliate
of BHR in the exercise of its sole discretion, pursuant to a replacement
Percentage Lease and/or management agreement, in either case, projected to
provide equal or greater Net Economic Benefit to such Lessee or other Affiliate
of BHR.
Transfer--(i) any merger, sale of the stock of any Transferor, or sale,
transfer or conveyance of all or substantially all of the assets of any
Transferor if, as a result thereof, Transferor or any surviving entity or
purchaser of the assets of Transferor (each, the "Transferee") would cease to be
controlled by BHR or (ii) any event resulting in a "person" or "group" (within
the meaning of Sections 13(d) and 14(d) of the 1934 Act), other than
United/Harvey Holdings, L.P. or any Affiliate thereof, becoming the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the 1934 Act) directly or
indirectly, of more than fifty percent (50%) of the Voting Stock of BHR or, if
applicable, the Parent of BHR, or a Lessee or an Affiliated Manager, or (iii)
any sale or assignment of the leasehold interest in any of the Percentage Leases
to any third party that is not an Affiliate of BHR.
Transferor--shall mean any one or more of BHR, the Parent of BHR, a
Lessee, or an Affiliated Manager involved in a transaction that will constitute
a Transfer.
Working Capital--shall mean the excess of a Lessee's current assets
over such Lessee's current liabilities, both as determined in accordance with
GAAP.
2. Effective Date. All of the terms and conditions of this Agreement
shall become effective upon the Closing Date. The effectiveness of this
Agreement is conditioned upon the occurrence of Closing under the Merger
Agreement. If the condition to the effectiveness of this Agreement described
above has not been satisfied on or before the date three (3) months after the
date of this Agreement, this Agreement shall be null and void, subject to the
rights of the parties at
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law or in equity if the failure of such conditions to occur is the result of the
default of any party hereto.
3. Execution of Percentage Leases; Computation of Rent; Basic
Assumptions; Contemplated Renovations; SPE Financings; Termination Payments.
(a) Execution of Percentage Leases. Prior to the Closing Date,
Lessors and Lessees shall execute and deliver the Percentage Leases, pursuant to
which the Existing Hotels shall be leased by a Lessor to a Lessee.
(b) Computation of Rent; Basic Assumptions. The Base Rent and
Percentage Rent for each Percentage Lease of an Existing Hotel has been
reasonably agreed by Lessors and Lessees in good faith. The intent of the
parties is for the aggregate of Base Rent and Percentage Rent for all Existing
Hotels for the years 1998, 1999 and 2000 to be approximately equal to 95% of the
forecast (utilized by FelCor and BHR as the basis for negotiating the Merger) of
aggregate Lessee Income Before Corporate Overhead, minus Lessees' corporate
overhead ("Splitable Income") of Lessees from such Existing Hotels; provided,
however, that to the extent that the actual performance of the Existing Hotels
for such period(s) deviates from such forecasted Splitable Income, the terms of
the Percentage Leases as written will prevail and no adjustment will be made to
the Rent solely as a result of any such deviation. Notwithstanding the terms of
each Percentage Lease, aggregate Rent thereunder for the month of August 1998
(in the amount of approximately $10.9 million) shall be due and payable on or
before February 28, 1999, together with interest on the outstanding amount of
such deferred Rent at a floating rate of interest equal to LIBOR plus 150 basis
points; provided, however, that Lessees may only prepay such amount upon at
least two (2) business days notice to Lessors, and in minimum payments of at
least $500,000.
For purposes of Section 3.6 of the Percentage Leases, the basic
assumptions underlying the computation of Base Rent and Percentage Rent are set
forth in this Section 3(b) above and in Schedule 1 attached hereto.
(c) Contemplated Renovations; Land Use Flexibility. The
Percentage Leases will require Lessors to be responsible for the completion of
certain contemplated renovations to Existing Hotels as generally set forth in
the budgets on Schedule 1 hereto, with the nature and timing of such renovations
to be agreed to between the parties in good faith. The parties agree that such
budgets
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are preliminary only and may be reasonably adjusted upwards or downwards, and/or
accelerated or delayed, following further review and analysis.
In addition, however, FelCor and BHR agree to cause Lessors and Lessees
to negotiate in good faith with respect to the exclusion (before or after the
execution of the Percentage Leases for the Existing Hotels) from the Leased
Property under any Percentage Lease of Land or Improvements not reasonably
necessary for, and directly related to, the operation of the Hotel at the time
of such determination ("Excess Realty"), which FelCor proposes to put to more
profitable use, redevelopment or disposition (such as, by example, but without
limitation, by the construction of a parking structure on Land used for surface
parking for a Hotel, in connection with which a portion of the Land may be sold
by Lessor as no longer reasonably necessary to the operation of the Hotel
following construction of such parking structure) as long as (1) the applicable
Lessor pays its share of any direct or indirect costs or expenses fairly
allocable to the Excess Realty (including, but not limited to, the cost of
utilities servicing both the leased property and the excess realty, the cost to
maintain and repair elevators, HVAC systems and other systems serving both the
Leased Property and the Excess Realty, and the cost of security, janitorial and
other services provided to both the Leased Property and the Excess Realty) and
enters into an expense allocation agreement if requested by the applicable
Lessee, and (2) Lessee is reasonably compensated for any detrimental effect upon
its Hotel operations or its Lessee Income Before Corporate Overhead as a result
of such use, redevelopment or disposition by Lessor, including, without
limitation, by an appropriate reduction in the Rent under such Percentage Lease
and/or the payment of a fee to Lessee.
(d) SPE Financings. If requested by FelCor or a Lessor, BHR
and each Lessee agree that it will cooperate, and will cause any New Financing
Lessees (defined below) to cooperate, in good faith to promptly form one or more
new entities which are wholly-owned by such Lessee and/or the general partner
and/or the parent of the general partnership of such Lessee (each, a "New
Financing Lessee"), to serve as the lessee for one or more Hotels designated by
FelCor, and will assign to the New Financing Lessee, and cause the New Financing
Lessee to assume, the Percentage Leases with respect to such Hotels, except with
respect to obligations accrued through the date of such assignment assumption.
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Lessee and any New Financing Lessee will (a) include in its
and/or its general partner's organizational documents, or promptly amend its
and/or its general partner's existing organizational documents to include,
provisions sufficient to qualify such entity as a single-purpose,
bankruptcy-remote entity (or a similar entity) as determined by Lessor's lender
with reference to rating agency requirements, (b) operate in accordance with
such provisions so as to qualify or continue to qualify as such a single
purpose, bankruptcy-remote entity (or a similar entity) and (c) reasonably
cooperate with FelCor and Lessor and the Lessor's lender in connection with the
foregoing, and with the Lessor's counsel, including with respect to such
counsel's legal opinion regarding the bankruptcy-remoteness and/or
non-consolidation of the Lessee or New Financing Lessee and/or its general
partner with any other persons or entities and other customary matters. Such
Lessor will pay Lessee's reasonable out-of-pocket costs incurred in connection
with this Section 3(d), including, without limitation, organizing or amending
the organizational documents of the New Financing Lessees and in obtaining such
legal opinions.
(e) Termination Fee Payments. In the event of the occurrence
of a Termination Fee Payment Event with respect to a Percentage Lease (the
"Terminated Lease"), the Lessor shall be obligated to pay (in the manner
described below) the Monthly Termination Payment (as defined below) to the
Lessee for the number of months remaining following the effective date of the
Termination Fee Payment Event (or, with respect to a Sale Hotel, any later date
permitted for commencement of monthly payments by Lessor hereunder) through (i)
in the case of a Sale Hotel, the end of the original Term of the Terminated
Lease or (ii) in the case of a Hotel other than a Sale Hotel, the end of the
First Extension of the Terminated Lease (regardless of whether the Lessee has
exercised its option with respect to such First Extension) or, if the Lessee has
properly exercised its option with respect to the Second Extension of the
Terminated Lease prior to the date on which the Lessor provides notice to the
Lessee of an anticipated Termination Fee Payment Event, the end of the Second
Extension of the Terminated Lease (the "Payment Period"). The "Monthly
Termination Payment" shall be an amount equal to one-twelfth (1/12) of the
amount of the Termination Fee Base Amount.
The amount of any Monthly Termination Payment or, at Lessor's option,
the entire Termination Fee Base Amount, shall be applied in accordance with this
paragraph. First, all or any
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portion of the Monthly Termination Payment (or the Termination Fee Base Amount,
as applicable) shall, at the Lessor's option, be applied first to past due Rent
under the Terminated Lease or any other Percentage Leases, without curing any
Event of Default that has occurred and is continuing thereunder, and each Lessee
hereby authorizes the offset of any Monthly Termination Payment (or the
Termination Fee Base Amount, as applicable) due against past due Rent under the
Terminated Lease or other Percentage Lease to which it is a party or under any
other Terminated Lease or other Percentage Lease with any Lessee, as determined
in the exercise of its sole discretion by the Lessor. Second, any remaining
Monthly Termination Payment then shall be applied to Rent due or to become due
(as it becomes due) under other Percentage Leases (with such Lessee or any other
Lessee) during the Payment Period.
Notwithstanding the foregoing, in the event of the termination
(in the same transaction or series of transactions) of a sufficient number of
Percentage Leases that the aggregate monthly amount owed to Lessee(s) for
Monthly Termination Payments is greater than the aggregate monthly amount of
Rent payable to Lessor(s) under the remaining Percentage Leases during the
applicable Payment Period(s), the aggregate amount of Monthly Termination
Payments that would have been paid over the remaining term(s) of the applicable
Payment Period(s) shall be discounted to net present value at an agreed
reasonable discount rate and such amount shall be paid to BHR or Lessee(s) in a
lump sum in satisfaction of all of Lessor(s) obligations with respect to such
aggregate Termination Fees, and Lessee(s) shall continue to pay Rent on all
remaining Percentage Leases, if any, as set forth therein.
4. Future Percentage Leases. FelCor and BHR hereby agree that, unless
otherwise agreed by FelCor and BHR in their sole discretion in connection with
the acquisition of a New Hotel, the form of Percentage Lease between Lessor and
Lessee with respect to each New Hotel shall be in substantially the form of the
Percentage Leases for the Existing Hotels; provided, however, that all economic
terms of such new Percentage Lease for a New Hotel shall be negotiated in good
faith by the parties at the time. In the event that FelCor or an Affiliate
acquires the "Bristol House" hotel in Dallas, Texas, it will offer a Lessee the
opportunity to enter into a Percentage Lease for such Hotel upon terms
negotiated in good faith by the parties at the time; provided, however, that
FelCor and its Affiliates shall have no obligation to offer any other hotels to
BHR or its Affiliates.
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5. Minimum Liquid Net Worth Requirements; Lessee Reporting Obligations;
Letter of Credit Adjustments; Limitations on Distributions.
(a) Liquid Net Worth. At all times during the Terms of the
Percentage Leases, the Lessees collectively shall maintain an aggregate Liquid
Net Worth in an amount at least equal to the Minimum Liquid Net Worth for all
Lessees. Furthermore, at all times during the Terms of the Percentage Leases
relating to a particular Lessee, such Lessee shall maintain a Liquid Net Worth
in an amount at least equal to such Lessee's allocable Minimum Liquid Net Worth.
(b) Lessee Reporting Obligations; Letter of Credit
Adjustments. Concurrently with (i) the delivery of all financial statements to
FelCor and Lessors pursuant to Section 7(a)(i) hereof, and (ii) the execution of
any Percentage Lease for any New Hotel (and, at Lessee's option, in connection
with the termination of any then existing Percentage Lease or at any other
time), each Lessee shall certify to FelCor and its REIT tax counsel as to (i)
the amount of its Liquid Net Worth and its then-applicable Minimum Liquid Net
Worth in a certificate signed by the chief financial officer, chief accounting
officer or treasurer of BHR and by such Lessee and (ii) the aggregate Liquid Net
Worth and Minimum Liquid Net Worth then applicable to the Lessees collectively
(a "Liquid Net Worth Certificate"). Each Lessee's Liquid Net Worth and Minimum
Liquid Net Worth shall be determined from time to time (x) from the most recent
Liquid Net Worth Certificate delivered by BHR and such Lessee, or (y) in the
absence of a timely Liquid Net Worth Certificate when required hereunder, as
reasonably determined (or estimated) by FelCor pending receipt of such Liquid
Net Worth Certificate. In the event that a letter of credit has been provided to
any Lessor as Credit Enhancement, then within ten (10) days after receipt of a
Liquid Net Worth Certificate, each applicable Lessor and Lessee agrees to
deliver a notice of reduction to the issuer of the letter of credit or take such
other action as any Lessee or Lessor may reasonably request in order to reduce
the amount of such letter of credit to such amount as BHR or such Lessee shall
request, which amount may not be less than that necessary to ensure that the
individual Lessee's or the Lessees' aggregate Liquid Net Worth is at least equal
to the individual Lessee's or the Lessees' aggregate Minimum Liquid Net Worth,
each as reflected on such Liquid Net Worth Certificate.
(c) Obligation of BHR to Supplement Liquid Net Worth. If, upon
any determination of Liquid Net Worth, the Liquid Net Worth of any Lessee (or
the Lessees collectively)
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is less than the then-applicable Minimum Liquid Net Worth, but Lessors are
prohibited by any Lessor's mortgage financing from exercising their rights under
Section 10(b) to terminate all Percentage Leases, BHR shall have the obligation,
to the extent of cash, cash equivalents and other liquid assets reasonably
available to BHR (as certified in writing by BHR to FelCor), to contribute (or
cause to be contributed) to such Lessee(s), promptly after written notice from
Lessor, additional cash, marketable securities or other assets that qualify for
the Liquid Assets Amount with a current fair market value (as of the date of
such contribution), or to provide additional Credit Enhancement, at least equal
to such deficiency in the Liquid Net Worth of such Lessee(s). Except as
expressly set forth in this Section 5(c), or in a Guaranty, BHR shall have no
obligation to make or cause to be made any other capital contributions to any
Lessee.
(d) Limitation on Distributions. No dividends or other
distributions (other than distributions in the form of additional equity
interests in a Lessee) shall, for any period, be declared, paid or set apart for
payment on any equity interest in any Lessee (the "Lessee's Capital"), and no
Lessee Capital shall be redeemed, purchased or otherwise acquired by Lessee for
any consideration (except by conversion into or exchange for other equity
interests in Lessee), unless, after giving effect to such proposed distribution,
(i) the Liquid Net Worth of each Lessee (and the Lessees collectively) equals or
exceeds the Minimum Liquid Net Worth then applicable to such Lessee(s), and (ii)
no uncured monetary default of any Lessee exists under this Agreement nor any
uncured default in the payment of Rent (including, without limitation, estimated
or actual monthly payments of Percentage Rent) under any Percentage Lease
(unless such dividend or other distribution will be used to cure such default).
(e) Payments to Affiliates. Except for Post-Default Operating
Expenses and distributions to holders of equity interests permitted under
Section 5(d) above, no Lessee shall make, directly or indirectly, any payments
(for services or otherwise) to Affiliates of Lessee unless, after giving effect
to such proposed payment, (i) the Liquid Net Worth of each Lessee (and the
Lessees collectively) shall equal or exceed the Minimum Liquid Net Worth then
applicable to such Lessee(s), and (ii) no uncured monetary default of any Lessee
exists under this Agreement nor any uncured default in the payment of Rent
(including, without limitation, estimated or actual monthly payments of
Percentage Rent) under any Percentage Lease.
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6. Changes of Control and Activities of Lessees.
(a) Voluntary Transfers or Changes in Structure. BHR
represents that, except with respect to the Percentage Lease for, and Lessee of,
the Chateau LeMoyne Hotel (to the extent included in the Existing Hotels), on
the Closing Date, each Lessee will be a wholly-owned subsidiary of BHR and BHR
will have sole economic and voting interest in each Lessee. During the Term of
the Percentage Leases, BHR and Lessees may, but shall not be obligated to, seek
the prior written consent of FelCor (following not less than sixty (60) days
prior written notice to FelCor), which consent shall not be unreasonably
withheld, to a Transfer. If requested, FelCor shall not have the right to
withhold its consent to any Transfer if (i) the Transferee (or its parent) has
Liquid Net Worth at least equal to that of, and otherwise is as creditworthy as,
BHR as of the end of the Fiscal Year preceding such Transfer, and (ii) the
Transferee (A) has a good reputation in the U.S. hospitality industry and (B)
either (x) has substantial expertise in the management of hotels comparable to
the Hotels or (y) will retain a substantial number of hotel management
employees, including executive management, of Transferor. In the event of a
Transfer to which FelCor does not consent, (i) the percentage hurdle for
purposes of a Revenue Performance Shortfall under the Percentage Leases affected
by such Transfer shall increase from eighty percent (80%) to ninety percent
(90%), (ii) the Overall Shortfall Cure Percentage shall be increased from ninety
percent (90%) to one hundred percent (100%), (iii) the Revenue Performance
Shortfall test period shall be reduced from three (3) years to one (1) year, and
(iv) the respective Lessee shall have no opportunity to cure any Revenue
Performance Shortfall thereafter (including but not limited to the first full
Fiscal Year following the effective date of any such Transfer).
(b) Hostile Change of Control. In the event of a Hostile
Change of Control, Lessors shall have the absolute right and option (in its
sole, unreviewable discretion) to terminate any or all of the Percentage Leases
upon not less than thirty (30) days prior written notice to the respective
Lessee, without payment of any Termination Fee.
(c) Other Business Activities. After the occurrence and during
the continuance of a Default by Lessee, without the prior written consent of
FelCor, no Lessee shall engage in or incur any expenses or liabilities related
to any business or activity in which it is not engaged at the time of such
Default.
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7. Financial Statements; Indemnification; Due Diligence;
Confidentiality.
(a) Financial Disclosure.
(i) During the term of any Percentage Lease, BHR and Lessees agree:
(A) to deliver, and otherwise make available, to
FelCor, FSLP and Lessors,
(1) not more than forty-five (45) days
following the end of each calendar quarter of each year during the
Terms of the Percentage Leases, quarterly unaudited financial
statements, including balance sheet, statement of operations, statement
of shareholders' equity, statement of cash flows for Lessee for the
most recently ended calendar quarter and the comparable prior year
period prepared in conformity with GAAP;
(2) not more than ninety (90) days after the
end of each calendar year during the Terms of the Percentage Leases,
(A) a hotel-by-hotel breakdown of revenue by source, occupied and
available rooms, and maintenance and repair expenses, and (B) audited
annual financial statements and schedules for the most recently ended
calendar year prepared in accordance with GAAP, audited by a nationally
recognized certified public accounting firm reasonably acceptable to
FelCor, FSLP and Lessors;
(3) any historical financial information
reasonably necessary to re-state historical financial information to
conform to the presentation of FelCor's, FSLP's or Lessor's audited and
unaudited financial statements at any future time; and
(4) on a timely basis, any other information
reasonably requested by FelCor, FSLP and Lessors to permit FelCor, FSLP
and Lessors to meet their filing and reporting requirements under the
1934 Act and to file and have declared effective registration
statements under the 1933 Act, including providing information
necessary to complete the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section of FelCor's 1934
Act reports and 1933 Act registration statements as it may relate to
BHR, Lessees or the Hotels; and
(B) that BHR or Lessees shall bear the cost of
obtaining, preparing and providing all information required to be furnished to
FelCor, FSLP and Lessors under this Section 7(a)(i), including the cost and
related expenses of the annual audit of Lessees' financial statements.
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(ii) During the term of any Percentage Lease, FelCor and Lessor agree
to make available to BHR and Lessees on a timely basis, any information
reasonably requested by BHR and Lessees to permit BHR to meet its filing and
reporting requirements under the 1934 Act and to file and have declared
effective registration statements under the 1933 Act, including providing
information necessary to complete the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section of BHR's 1934 Act reports
and 1933 Act registration statements as it may relate to Lessors or the Hotels.
(b) Indemnification.
(i) FelCor, FSLP and each Lessor agree, jointly and severally, to
indemnify, defend (with counsel reasonably acceptable to BHR and Lessees), and
hold harmless BHR, each Lessee and each Affiliated Manager, and their
stockholders, partners, limited liability company members, officers, directors
and controlling persons (collectively, "Lessee Indemnified Parties") from and
against any losses, claims, damages, expenses or liabilities (or actions in
respect thereof) to which the Lessee Indemnified Parties may become subject
under the 1933 Act, the 1934 Act or otherwise, insofar as such losses, claims,
damages, expenses or liabilities or actions in respect thereof arise out of or
are based upon the 1934 Act reports or 1933 Act registration statements of
FelCor, FSLP or Lessors, except to the extent any such claims, liabilities,
losses, damages, expenses, or liabilities (or actions in respect thereof) result
from any untrue statement of a material fact or omission of any material fact in
the information provided by (or on behalf of) a Lessee Indemnified Party to
FelCor, FSLP or Lessor pursuant to Section 7(a)(i) above.
(ii) BHR and each Lessee agree, jointly and severally, to indemnify,
defend (with counsel reasonably acceptable to FelCor, FSLP and Lessors) and hold
harmless FelCor, FSLP and Lessors, and their respective stockholders, partners,
limited liability company members, officers, directors and controlling persons
(collectively, "Lessor Indemnified Parties") from and against any losses,
claims, damages, expenses or liabilities (or actions in respect thereof) to
which the Lessor Indemnified Parties may become subject under the 1933 Act, the
1934 Act or otherwise, insofar as such losses, claims, damages, expenses or
liabilities or actions in respect thereof arise out of or are based upon the
1934 Act reports or 1933 Act registration statements of BHR or Lessees, except
to the extent any such claims, liabilities, losses, damages, expenses, or
liabilities (or actions in respect thereof) result from
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any untrue statement of a material fact or omission of any material fact in the
information provided by (or on behalf of) a Lessor Indemnified Party to BHR or
Lessees pursuant to Section 7(a)(ii) above.
(c) Due Diligence. During the term of each Percentage Lease,
BHR and Lessees agree:
(i) to permit FelCor, FSLP and Lessees, together with
their independent public accountants, counsel, financial advisors, underwriters,
underwriters' counsel, rating agencies, lenders and others having a legitimate
interest in Lessees' or the Hotels' financial condition and results of
operations, during regular business hours, upon reasonable notice and at the
sole cost of FelCor, FSLP or Lessors (provided there shall be no charge by
Lessees or BHR to FelCor, FSLP or Lessors for the reasonable time of Lessees'
and BHR's officers or employees), to interview officers and employees of Lessees
or BHR and to have access to and review:
(A) the general accounting records of
Lessees or any Hotel for purposes of performing an audit of FelCor,
FSLP, Lessors or any Hotel in accordance with generally accepted
auditing standards and to conduct reasonable due diligence with respect
to Lessees and their business activities and the Hotels; and
(B) Lessees' entity records, minute books,
contracts and other information, documents, agreements or items
relating to the operation of the Hotels and Lessees' financial
condition.
(ii) to cooperate promptly and fully with FelCor,
FSLP and Lessors upon request and at the cost of FelCor, FSLP or Lessors (except
with respect to the cost of obtaining, preparing and providing the information
required to be furnished to FelCor, FSLP and Lessors under Section 7(a)(i) above
and any costs relating to the reasonable time of employees or officers of
Lessees or BHR), in making available such information with respect to Lessees or
the Hotels as may be then required by any regulatory agency, including the SEC
or any stock exchange on which FelCor's, FSLP's or Lessors' securities may be
registered, listed or traded.
(iii) to use their reasonable best efforts to cause
the independent public accountants preparing audits of BHR and Lessees to
provide FelCor, FSLP and Lessors, at the sole cost of FelCor, FSLP or Lessors
with all consents and comfort letters of such accountants required
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for FelCor's or Lessors' filings under the 1933 Act or the 1934 Act or to have
FelCor's or Lessors' registration statements be declared effective under the
1933 Act.
During the term of each Percentage Lease, FelCor, FSLP and
Lessors agree:
(i) to permit BHR and Lessees, together with their
independent public accountants, counsel, financial advisors, underwriters,
underwriters' counsel, rating agencies, lenders and others having a legitimate
interest in Lessors' or the Hotels' financial condition and results of
operations, during regular business hours, upon reasonable notice and at the
sole cost of BHR and Lessees (provided there shall be no charge by FelCor, FSLP
or Lessors to Lessees or BHR for the reasonable time of FelCor's, FSLP's or
Lessors' officers or employees), to interview officers and employees of FelCor,
FSLP and Lessors) and to have access to and review:
(A) the general accounting records of
Lessors or any Hotel for purposes of performing an audit of BHR,
Lessees or any Hotel in accordance with generally accepted auditing
standards and to conduct reasonable due diligence with respect to
Lessors and their business activities and the Hotels; and
(B) Lessors' entity records, minute books,
contracts and other information, documents, agreements or items
relating to the operation of the Hotels and Lessors' financial
condition.
(ii) to cooperate promptly and fully with Lessees and
BHR, upon request and at the cost of Lessees, in making available such
information with respect to FelCor, FSLP or Lessors as may be then required by
any regulatory agency, including the SEC or any stock exchange on which BHR's or
Lessees' securities may be registered, listed or traded.
(iii) to use their reasonable best efforts to cause
the independent public accountants preparing audits of FelCor, FSLP or Lessors
to provide BHR and Lessees, at the sole cost of Lessees and BHR, with all
consents and comfort letters of such accountants required for BHR's or Lessees'
filings under the 1933 Act or the 1934 Act or to have BHR's or Lessees'
registration statements be declared effective under the 1933 Act.
(d) Confidentiality. To the extent Lessors or FelCor on the
one hand, or Lessees or BHR on the other, obtains information or becomes aware
of material information concerning the other that is not disclosed in a public
announcement or filing under the 1933 Act or
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the 1934 Act by BHR or FelCor, each party agrees that it shall not improperly
disclose or unlawfully utilize such information or otherwise act unlawfully with
respect thereto.
8. REIT Requirements.
(a) BHR has been advised by FelCor and understands that, in
order for FelCor to qualify as a real estate investment trust under the Code
("REIT"), the following requirements (the "REIT Requirements") must be
satisfied:
(i) The average of the adjusted tax bases of a
Lessor's personal property that is leased to a Lessee under a Percentage Lease
at the beginning and end of a calendar year cannot exceed fifteen percent (15%)
of the average of the aggregate adjusted tax bases of such Lessor's real and
personal property that is leased to such Lessee under such Percentage Lease at
the beginning and end of such calendar year.
(ii) No Lessee can sublet the Hotels and related
property that are leased to it by a Lessor, or enter into any similar
arrangement, on any basis such that the rental or other amounts paid by the
sublessee thereunder would be based, on whole or in part, on either (i) the net
income or profits derived by the business activities of the sublessee or (ii)
any other formula such that any portion of the Percentage Rent or other rent
paid by the Lessee to the Lessor would fail to qualify as "rents from real
property" within the meaning of Section 856(d) of the Code.
(iii) No Lessee can sublease the Hotels and related
property leased to it by a Lessor to, or enter into any similar arrangement
with, any person in which FelCor owns, directly or indirectly, a ten percent
(10%) or greater ownership interest, within the meaning of Section 856(d)(2)(B)
of the Code.
(iv) FelCor cannot own, directly or indirectly, a ten
percent (10%) or greater ownership interest in BHR or any Lessee, within the
meaning of Section 856(d)(2)(B) of the Code.
(v) Unless specifically permitted by the Board of
Directors of FelCor, no person can own, directly or indirectly, capital stock of
FelCor that exceeds the limit set forth in FelCor's Charter.
(b) BHR and Lessees agree, and agree to use reasonable efforts
to cause their Affiliates, to use their reasonable best efforts to permit the
REIT Requirements to be satisfied. BHR
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and Lessees agree, and agree to use their reasonable best efforts to cause their
Affiliates, to cooperate in good faith with FelCor, FSLP and Lessors to ensure
that the REIT Requirements are satisfied, including but not limited to,
providing FelCor with information about the ownership of BHR, Lessees, and their
Affiliates to the extent that such information is reasonably available, and
complying with the related obligations of Lessees under each Percentage Lease.
BHR and Lessees agree, and agree to use their reasonable best efforts to cause
their Affiliates, upon request by FelCor (and, where appropriate action not
already required by the terms hereof or of the Percentage Leases is required by
this Section 8(b), at FelCor's expense), to take reasonable action necessary to
ensure compliance with the REIT Requirements. Immediately after becoming aware
that any REIT Requirement is not, or will not be, satisfied, BHR or Lessees
shall notify, or use reasonable efforts to cause their Affiliates to notify,
FelCor of such noncompliance.
9. Cross Default. From and after the Closing Date, a Financial Default
(as hereinafter defined) by any Lessee under the Percentage Lease with respect
to any Hotel will constitute and continue to create an Event of Default (until
cured, if curable) under the Percentage Leases with respect to all other Hotels,
except to the extent prohibited by Lessors' mortgage financing secured by a lien
upon any such other Hotel. A "Financial Default" shall mean and refer to any
Event of Default under a Percentage Lease consisting of one or more of the
following:
(i) if Lessee fails to pay Base Rent or Percentage Rent to
Lessor as and when due (following any applicable grace or cure period);
(ii) if Lessee (A) shall file a petition in bankruptcy or
reorganization for an arrangement pursuant to any federal or state
bankruptcy law or any similar federal or state law, or shall be
adjudicated a bankrupt or shall make an assignment for the benefit of
creditors or shall admit in writing its inability to pay its debts
generally as they become due, or if a petition or answer proposing the
adjudication of Lessee as a bankrupt or its reorganization pursuant to
any federal or state bankruptcy law or any similar federal or state law
shall be filed in any court and Lessee shall be adjudicated a bankrupt
and such adjudication shall not be vacated or set aside or stayed
within sixty (60) days after the entry of an order in respect thereof,
or if a receiver of Lessee or of the whole or substantially all of the
assets of Lessee shall be appointed in any proceeding brought by Lessee
or if any such receiver, trustee or liquidator shall be appointed in
any proceeding brought against Lessee and shall not be vacated or set
aside or stayed within sixty (60) days after such appointment, or (B)
is liquidated or dissolved, or begins proceedings toward such
liquidation or dissolution, or, in any manner, permits the sale or
divestiture of substantially all of its assets, except as permitted
hereunder; or
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(iii) if a material Event of Default (including, without
limitation, any of those listed above) occurs under any Percentage
Lease at any time during any period of twelve (12) consecutive months
in which any material Events of Default have occurred under at least
four (4) other Percentage Leases.
10. Default by Lessee.
(a) A "Default by Lessee" shall exist under this Agreement if
any one or more of the following occur:
(i) Liquid Net Worth Covenants. During the term of
any Percentage Lease, a Lessee (or the Lessees collectively) fails to maintain
its (or their aggregate) Minimum Liquid Net Worth as required in, or makes
distributions or payments prohibited by, Sections 5 hereof (each, a "LNW
Deficiency"), and fails to cure such LNW Deficiency within thirty (30) days
following notice thereof from FelCor to BHR; provided, however that if BHR is
required to raise debt or equity capital in order to supply cash, marketable
securities or other assets that qualify for the Liquid Assets Amount or Credit
Enhancement to cure such LNW Deficiency, and in good faith commences and
continues to raise such debt or equity capital within thirty (30) days after
such determination of Liquid Net Worth, BHR shall have a reasonable period not
to exceed ninety (90) days to raise such debt or equity capital and to cause
such required cash, marketable securities or other assets that qualify for the
Liquid Assets Amount or Credit Enhancement to be included in such Lessee's
Liquid Net Worth in order to eliminate any LNW Deficiency.
(ii) Default Under Percentage Leases. A Financial
Default occurs under any of the Percentage Leases to which such Lessee is a
party.
(iii) Other Breaches. BHR or any Lessee fails to
comply with any other provision of this Agreement for a period of thirty (30)
days after being notified by FelCor in writing of the provisions of this
Agreement with which such Lessee has failed to comply; provided that if such
default (other than if Lessee fails to pay any Base Rent or Percentage Rent
under any Percentage Lease, when due after any applicable cure period, which
failure shall be subject to the provisions set forth in the Percentage Leases,
or if Lessee fails to maintain its Minimum Liquid Net Worth as required in, or
makes distributions or payments prohibited by, Section 5 hereof) cannot with due
diligence be cured within a thirty (30) day period, such period shall be
extended for such reasonable
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time as BHR or such Lessee promptly and with due diligence commences and
continues the cure thereof but in no event for a period of more than ninety (90)
days following the date of notice from FelCor to BHR.
(b) In the event of a Default by Lessee, and without prejudice
to the rights and remedies of any Lessor under any Percentage Lease, Lessors
may, subject to its compliance with the terms of any Recognition Agreement,
elect to terminate all of the Percentage Leases (or all of the Percentage Leases
to which the Lessee in default is a party), except to the extent expressly
prohibited by mortgage financing of Lessors that is secured by a lien upon the
Hotel covered by such Percentage Lease. In no event shall Lessors have the
option to terminate less than all Percentage Leases (or all Percentage Leases to
which the Lessee in default is a party) as to which they have both the
contractual and legal right so to terminate.
11. Recognition Agreement. FelCor and Lessors agree to negotiate in
good faith and enter into Recognition Agreements with Bankers Trust Company
prior to the Closing Date and, if an agreement can be reached on mutually
acceptable terms, with any other lender to BHR and/or any Lessees subsequent to
the Closing Date, addressing such matters as are reasonably required by any such
lender and reasonably acceptable to FelCor and Lessors. Without limiting the
generality of the foregoing, FelCor would agree to lender protection provisions,
in any Recognition Agreement to which BHR's lenders and a Lessee that is a
Subsidiary of BHR are parties, substantially in the form attached hereto as
Exhibit D.
12. Miscellaneous.
(a) Entire Agreement; Modification, Amendments and Waivers.
This Agreement, together with the Percentage Leases and instruments and
agreements referenced herein and therein, constitutes the entire agreement among
the parties hereto with respect to the subject matter of this Agreement and
supersedes the MHA and any prior oral agreements among the parties hereto. No
modification, amendment or waiver of any provision of this Agreement shall be
effective unless the same is in a writing signed by FelCor and BHR.
(b) Notices. All notices, demands, requests, consents
approvals and other communications ("Notice") hereunder shall be in writing and
personally served, mailed (by registered
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or certified mail, return receipt requested and postage prepaid), sent by Fed Ex
or other nationally recognized overnight courier, or sent by facsimile to the
parties as set forth below:
If to BHR or any Lessee:
Bristol Hotels & Resorts, Inc.
14295 Midway Road
Dallas, Texas 75244
Facsimile: 972/391-3497
Attention: President (with a copy to
Attention: General Counsel)
If to FelCor, FSLP or any Lessor:
FelCor Suite Hotels, Inc.
545 E. John Carpenter Frwy, Suite 1300
Irving, Texas 75062
Facsimile: 972/444-4949
Attention: President (with a copy to
Attention: General Counsel)
or to such other address or addresses as either party may hereafter designate.
Personally delivered Notice (including any confirmed facsimile transmission or
delivery by nationally recognized overnight courier) shall be effective upon
receipt at the specified address. Notice given by mail shall be complete at the
time of deposit in the U.S. Mail system, but any prescribed period of Notice and
any right or duty to do any act or make any response within any prescribed
period or on a date certain after the service of such Notice given by mail shall
be extended five (5) days.
(c) Successors and Assigns. The provisions of this Agreement
shall be binding upon the parties hereto and all of their permitted successors
and assigns and inure to the benefit of the parties hereto and their permitted
successors and assigns.
(d) Termination. This Agreement (other than the parties'
indemnification rights and obligations hereunder) shall terminate (without
prejudice to any accrued claims hereunder) at such time as all of the Percentage
Leases have terminated.
(e) Governing Law. This Agreement shall be governed by the
laws of the State of Texas.
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(f) Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall be an original once all parties have signed a
counterpart hereof, with the same force and effect as if the signatures thereto
and hereto were upon the same instrument.
(g) WAIVERS. EACH PARTY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY PROCEEDINGS BROUGHT BY
EITHER PARTY TO ENFORCE THE PROVISIONS OF THIS AGREEMENT. IN ANY SUIT OR OTHER
CLAIM BROUGHT BY EITHER PARTY SEEKING DAMAGES AGAINST THE OTHER PARTY FOR BREACH
OF ITS OBLIGATIONS UNDER THIS AGREEMENT, THE PARTY AGAINST WHOM SUCH CLAIM IS
MADE SHALL BE LIABLE TO THE OTHER PARTY ONLY FOR ACTUAL DAMAGES AND NOT FOR
CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES.
(h) Time of the Essence. Time is of the essence of this
Agreement.
(i) Conflict. In the event of any actual conflict or
inconsistency between the terms of this Agreement and the terms of any
Percentage Lease, the terms of this Agreement shall take precedence.
(j) Further Assurances. From time to time, as when requested
by a party hereto, the other parties will execute and deliver, or cause to be
executed and delivered, all such other documents and instruments as may be
reasonably required to further or better evidence the agreements herein.
(k) Interpretation; Arbitration. No provision of this
Agreement will be interpreted in favor of, or against, any of the parties hereto
by reason of the extent to which any such party or its counsel participated in
the drafting hereof or by reason of the extent to which any such provision is
inconsistent with any prior draft hereof. Any disputes arising under this
Agreement will be resolved in accordance with the arbitration procedures set
forth in Section 22.1 of the Percentage Leases.
(l) Future Affiliates. Any currently existing or future
Affiliate of FelCor or the Lessors that is or in the future may be a Lessor
under a Percentage Lease shall become a party to this Agreement, entitled to the
same rights, benefits and remedies to which FelCor and the Lessors are entitled
hereunder by execution of an addendum to this Agreement. Any currently existing
or
27
28
future Affiliate of BHR or the Lessees that is or in the future may be a Lessee
under a Percentage Lease shall become a party to this Agreement, entitled to the
same rights, benefits and remedies to which BHR and the other Lessees are
entitled hereunder by execution of an addendum to this Agreement. Upon the
request of any party, such future Lessors and Lessees shall execute any
documents, instruments or amendments hereto reasonably requested by a party
hereto to further evidence any such Affiliate's rights, benefits and remedies
hereunder.
(m) Representatives. This Agreement provides the Lessors
certain rights, benefits and remedies. FelCor is hereby designated and appointed
the representative of the Lessors, and the Lessees and BHR shall be permitted to
rely upon any written or oral communication or notification from FelCor as being
from the respective Lessor. Any notice required to be given hereunder shall be
given to FelCor as representative for any and all of the Lessors.
This Agreement provides the Lessees certain rights,
benefits and remedies. BHR is hereby designated and appointed the representative
of the Lessees, and the Lessors and FelCor shall be permitted to rely upon any
written or oral communication or notification from BHR as being from the
respective Lessee. Any notice required to be given hereunder shall be given to
BHR as representative for any or all of the Lessees.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
BRISTOL HOTELS & RESORTS, INC.
By: /s/ JEFFREY P. MAYER
-------------------------------------
Jeffrey P. Mayer, Vice President
FELCOR SUITE HOTELS, INC.
By: /s/ LAWRENCE D. ROBINSON
-------------------------------------
Lawrence D. Robinson, Senior Vice
President
28
29
FELCOR SUITES LIMITED PARTNERSHIP
By: FelCor Suite Hotels, Inc., its
general partner
By: /s/ LAWRENCE D. ROBINSON
---------------------------------
Lawrence D. Robinson
Senior Vice President
LESSORS:
By: /s/ JEFFREY P. MAYER
-------------------------------------
Jeffrey P. Mayer, Vice President of
each of the Lessors, or the
Subsidiaries of Bristol Hotel
Company acting on behalf of the
Lessors, listed on Schedule 3
attached hereto
LESSEES:
By: /s/ JEFFREY P. MAYER
-------------------------------------
Jeffrey P. Mayer, Vice President of
each of the Lessees, or the
Subsidiaries of BHR acting on behalf
of the Lessees, listed on Schedule 2
attached hereto
29
30
Exhibit A - Existing Hotels
Exhibit B - Sale Hotels
Exhibit C - Form of Guaranty
Exhibit D - Leasehold Lender Protection Provisions
Schedule 1 - Contemplated Renovations
Schedule 2 - Lessors
Schedule 3 - Lessees
30
31
EXHIBIT A
EXISTING HOTELS
LEGEND:
"BLTC" Bristol Lodging Tenant Company, a Delaware corporation
"FHAC" FelCor Hotel Asset Company, L.L.C., a Delaware limited liability company
"FLC" FelCor Lodging Company, L.L.C., a Delaware limited liability company
"FOHC" FelCor Omaha Hotel Company, L.L.C., a Delaware limited liability company
LEASED PROPERTY NO. STATE LESSOR (OWNER): LESSEE:
- ----------------------------------------- ------- ----------------- --------------------------------- -------------
1. Holiday Inn - Montgomery East I-85 806 AL FHAC BHTC
(O)
2. Holiday Inn - Texarkana I-30 (GL) 822 AR FHAC BHTC
3. Days Inn - Flagstaff (O) 721 AZ FHAC BHTC
4. Fairfield Inn - Downtown Scottsdale 522 AZ FHAC BHTC
(GL)
5. Crowne Plaza - Pleasanton (O) 842 CA FHAC BHTC
6. Holiday Inn - San Diego On the Bay 836 CA FHAC BHTC
(GL)
7. Holiday Inn - San Francisco Financial 840 CA FHAC BHTC
District (GL)
8. Holiday Inn - San Francisco 841 CA FHAC BHTC
Fisherman's Wharf (GL)
9. Holiday Inn - San Jose North 843 CA FHAC BHTC
(Milpitas) (O)
10. Holiday Inn - Santa Barbara (O) 531 CA FLC BLTC
11. Holiday Inn Select - Irvine Orange 837 CA FHAC BHTC
County Airport (O)
12. Holiday Inn Select - San Francisco 838 CA FHAC BHTC
Union Square (O)
13. Holiday Inn - Cambridge (O) 858 CN FelCor Canada Co. BHTC Canada, Inc.
14. Holiday Inn - Kitchener Waterloo (O) 857 CN FelCor Canada Co. BHTC Canada, Inc.
15. Holiday Inn - Peterborough - 859 CN FelCor Canada Co. BHTC Canada, Inc.
Waterfront (O)
16. Holiday Inn - Sarnia (O) 860 CN FelCor Canada Co. BHTC Canada, Inc.
17. Holiday Inn - Toronto Yorkdale (O) 856 CN FelCor Canada Co. BHTC Canada, Inc.
18. Holiday Inn - Toronto Airport (O) 855 CN FelCor Canada Co. BHTC Canada, Inc.
19. Holiday Inn Express - Colorado 711 CO FHAC BHTC
Springs Central (O)
32
LEASED PROPERTY NO. STATE LESSOR (OWNER): LESSEE:
- ----------------------------------------- ------- ----------------- --------------------------------- -------------
20. Ramada Inn - Colorado Springs 712 CO FHAC BHTC
North (O)
21. Holiday Inn - Hartford Downtown (O) 850 CT FHAC BHTC
22. Holiday Inn Select - Stamford (GL) 849 CT FHAC BHTC
23. Holiday Inn - Cocoa Beach 812 FL FHAC BHTC
Oceanfront Resort (O)
24. Holiday Inn - Near Bush Gardens 813 FL FHAC BHTC
Tampa (GL)
25. Holiday Inn - Nikki Bird Resort 809 FL FHAC BHTC
(Disney Main Gate) (GL)
26. Holiday Inn - Orlando International 810 FL FHAC BHTC
Drive Resort (O)
27. Holiday Inn Select - Miami 814 FL FHAC BHTC
International Airport (O)
28. Holiday Inn Select - Orlando 808 FL FHAC BHTC
International Airport (O)
29. Courtyard by Marriott - Downtown 234 GA FHAC BHTC
Atlanta (O)
30. Crowne Plaza - Airport Atlanta (O, 562 GA FHAC BHTC
but GL on portion of parking lot)
31. Fairfield Inn - Downtown Atlanta (O) 235 GA FHAC BHTC
32. Hampton Inn - Marietta (O) 690 GA FHAC BHTC
33. Harvey Hotel - Atlanta Powers Ferry 374 GA FLC BLTC
(O)
(converting to Crowne Plaza)
34. Holiday Inn - Atlanta Airport North (O, 287 GA FLC BLTC
but GL on portion of parking lot)
35. Holiday Inn - Atlanta South (prior to 365 GA FLC BLTC
9/4/97 Jonesboro) (O)
36. Holiday Inn - Columbus Airport North 805 GA FHAC BHTC
(GL)
37. Holiday Inn Express - Atlanta I-20 759 GA FHAC BHTC
East (O)
38. Holiday Inn Express - Atlanta 257 GA FHAC BHTC
Northeast (O)
39. Holiday Inn Select - Atlanta Perimeter 680 GA FLC BLTC
Dunwoody (O)
40. Hampton Inn - Davenport (O) 875 IA FOHC BHTC
41. Holiday Inn - Davenport (O) 874 IA FOHC BHTC
2
33
LEASED PROPERTY NO. STATE LESSOR (OWNER): LESSEE:
- ----------------------------------------- ------- ----------------- --------------------------------- -------------
42. Allerton Hotel - Chicago (O) 800 IL FHAC BHTC
43. Hampton Inn - Moline (Lots 2 and 4) 871 IL FelCor Moline Hotel, L.L.C. BHTC
(O)
44. Hampton Inn - Moline Airport (O) 873 IL FelCor Moline Hotel, L.L.C. BHTC
45. Holiday Inn and Holiday Inn Express - 872 IL FelCor Moline Hotel, L.L.C. BHTC
Moline Airport (O)
46. Hampton Inn - Hays (O) 877 KS FOHC BHTC
47. Holiday Inn - Great Bend (O) 880 KS FOHC BHTC
48. Holiday Inn - Hays (O) 876 KS FOHC BHTC
49. Holiday Inn - Salina (GL) 878 KS FOHC BHTC
50. Holiday Inn Express - Colby (O) 881 KS FOHC BHTC
51. Holiday Inn Express Hotel & Suites - 879 KS FOHC BHTC
Salina I-70 (GL)
52. Holiday Inn - New Orleans French 830 LA FLC BLTC
Quarter (GL)
53. Holiday Inn Select - Boston 846 MA FHAC BHTC
Government Center (GL)
54. Holiday Inn - Kansas City Northeast 845 MO FHAC BHTC
(O)
55. Holiday Inn - Westport (O) 863 MO FelCor St. Louis Company, BHTC
L.L.C.
56. Crowne Plaza - Downtown Jackson 369 MS FLC BLTC
(O) (prior to 10-1-97 Harvey Hotel)
57. Hampton Inn - Jackson North (O) 686 MS FHAC BHTC
58. Harvey Hotel & Suites - Jackson 709 MS FLC BHTC
North (O)
(Converting to Holiday Inn)
59. Holiday Inn - Executive Conference 826 MS FHAC BHTC
Center Olive Branch (O)
(Converting to Whispering Woods)
60. Holiday Inn - Jackson Southwest (O) 227 MS FLC BLTC
61. Hampton Inn - Omaha Southwest (O) 869 NE FOHC BHTC
62. Hampton Inn - Omaha Central (O) 866 NE FOHC BHTC
63. Holiday Inn - Omaha Northwest (Old 868 NE FOHC BHTC
Mill) (O)
64. Holiday Inn Express & Suites - 870 NE FOHC BHTC
Omaha Southwest (O)
3
34
LEASED PROPERTY NO. STATE LESSOR (OWNER): LESSEE:
- ----------------------------------------- ------- ----------------- --------------------------------- -------------
65. Holiday Inn - Omaha Central I-80 (O) 865 NE FOHC BHTC
66. Homewood Suites Hotel - Omaha (O) 867 NE FOHC BHTC
67. Holiday Inn - Albuquerque 844 NM FHAC BHTC
Mountainview (O)
68. Holiday Inn - Independence Mall (O) 864 PA FelCor Pennsylvania Company, BHTC
L.L.C.
69. Holiday Inn Select - Philadelphia 847 PA Center City Hotel Associates BHTC
Center City (O)
(Converting to Crowne Plaza)
70. Holiday Inn - Columbia Airport (O) 804 SC FHAC BHTC
71. Holiday Inn - Spartanburg West (O) 803 SC FHAC BHTC
72. Holiday Inn Select - Greenville 802 SC FHAC BHTC
(Roper) (O)
73. The Mills House Hotel - Charleston 801 SC FHAC BHTC
Holiday Inn (O)
74. Holiday Inn - Chattanooga Southeast 807 TN FHAC BHTC
I-75 (O)
75. Holiday Inn - Knoxville West (GL) 824 TN FHAC BHTC
76. Holiday Inn Select - Nashville 827 TN FHAC BHTC
Opryland/Airport
(Nashville-Briley Parkway) (GL)
77. Crowne Plaza Suites - Dallas (GL) 550 TX FelCor Hotel Company, Ltd. BHTC
(Bristol Suites prior to 7//98)
78. Courtyard by Marriott - Houston Near 299 TX FHAC BHTC
The Galleria (O)
79. Fairfield Inn - Dallas Regal Row (O) 505 TX FHAC BHTC
80. Fairfield Inn - Houston I-10 East (O) 729 TX FHAC BHTC
81. Fairfield Inn - Houston Near The 396 TX FHAC BHTC
Galleria (O)
82. Hampton - Downtown Dallas/West 564 TX FHAC BHTC
End (O)
83. Hampton Inn - Houston I-10 East (O) 792 TX FHAC BHTC
84. Crowne Plaza - Addison (O) 546 TX FelCor Hotel Company, Ltd. BHTC
(prior to 7/98 Harvey Hotel)
85. Harvey Hotel - Dallas (GL) 542 TX FelCor Hotels Investments II, BHTC
Ltd.
86. Crowne Plaza Hotel - Dallas 607 TX FLC BLTC
Brookhollow (Harvey Hotel prior to
7/98)(O)
4
35
LEASED PROPERTY NO. STATE LESSOR (OWNER): LESSEE:
- ----------------------------------------- ------- ----------------- --------------------------------- -------------
87. Harvey Hotel - DFW Airport (GL) 560 TX FelCor Hotel Company, Ltd. BHTC
88. Harvey Hotel - Plano (O) 544 TX FelCor Hotels Investments I, Ltd. BHTC
89. Harvey Suites - DFW Airport (O) 548 TX FLC BLTC
90. Harvey Suites - Houston Medical 556 TX FLC BLTC
Center (GL)
(Converting to Holiday Inn Hotel and
Suites)
91. Holiday Inn - Amarillo I-40 (GL) 820 TX FHAC BHTC
92. Holiday Inn - Austin Town Lake (GL 815 TX FHAC BHTC
on parking garage)
93. Holiday Inn - Beaumont Midtown I-10 821 TX FHAC BHTC
(O)
94. Holiday Inn - Houston Intercontinental 747 TX FLC BLTC
Airport (O)
95. Holiday Inn - Medical Center Houston 667 TX FLC BLTC
Medical Center (O)
96. Holiday Inn - Midland County Villa (O) 882 TX FelCor Country Villa Hotel, BHTC
L.L.C.
97. Holiday Inn - Plano (O) 545 TX FHAC BHTC
98. Holiday Inn - San Antonio Downtown 818 TX FHAC BHTC
(GL)
99. Holiday Inn - Waco I-35 (O) 823 TX FHAC BHTC
100. Holiday Inn Express Hotel & Suites - 884 TX FelCor Country Villa Hotel, BHTC
Odessa Parkway Blvd. (O) L.L.C.
101. Holiday Inn Hotel & Suites - Odessa 883 TX FelCor Country Villa Hotel, BHTC
Centre (O) L.L.C.
102. Holiday Inn Select - Houston I-10 816 TX FHAC BHTC
West (O)
103. Holiday Inn Select - Houston Near 554 TX FLC BLTC
Greenway Plaza (O)
104. Holiday Inn Select - San Antonio 817 TX FHAC BHTC
International Airport (O)
105. Holiday Inn - Salt Lake City Airport 862 UT FelCor Salt Lake, Inc. Bristol Salt Lake Tenant
(GL) Company
5
36
EXHIBIT B
SALE HOTELS
[INTENTIONALLY OMITTED]
37
EXHIBIT C
FORM OF GUARANTY
GUARANTY
[INTENTIONALLY OMITTED]
Bristol Hotels & Resorts, Inc.
By:
-------------------------------------
Jeffrey P. Mayer, Vice President
38
EXHIBIT D
LEASEHOLD LENDER PROTECTION PROVISIONS
[INTENTIONALLY OMITTED]
1
39
SCHEDULE 1
CONTEMPLATED RENOVATIONS
[INTENTIONALLY OMITTED]
40
SCHEDULE 2
LESSORS(1)
FelCor Hotel Asset Company, L.L.C.
FelCor Lodging Company, L.L.C.
FelCor Omaha Hotel Company, L.L.C.
FelCor Canada Co., a Nova Scotia unlimited liability company
FelCor Moline Hotel, L.L.C.
FelCor St. Louis Company, L.L.C.
FelCor Pennsylvania Company, L.L.C.
Center City Hotel Associates, a Pennsylvania limited partnership
(by FelCor Philadelphia Center, L.L.C., as general partner of, and on its
behalf)
FelCor Hotel Company, Ltd., a Texas limited partnership
(by FelCor Hotels GenPar, L.L.C., as general partner of and on behalf
of FelCor HHHC GenPar, P.P., a Delaware limited partnership, as general
partner of, and on its behalf)
FelCor Hotels Investments I, Ltd., a Texas limited partnership
(by FelCor Hotels Financing I, L.L.C., as general partner of, and on its
behalf)
FelCor Hotels Investments II, Ltd., a Texas limited partnership
(by FelCor Hotels Financing I, L.L.C., as general partner of, and on its
behalf)
FelCor Country Villa Hotel, L.L.C.
FelCor Salt Lake, L.L.C.
FelCor Hospitality Company, L.L.C.
- --------------------------------------
(1) Each a Delaware limited liability company, unless otherwise
specified.
41
SCHEDULE 3
LESSEES(2)
BHTC Canada, Inc., an Ontario corporation
Bristol Hospitality Tenant Company
Bristol Hotel Tenant Company
Bristol Lodging Tenant Company
Bristol Salt Lake Tenant Company
- --------------------------------------
(2) Each a Delaware corporation, unless otherwise specified.