Common use of Director Approval Required For Certain Action Clause in Contracts

Director Approval Required For Certain Action. (a) Subject to paragraph (b) of this Section 2.4, so long as at least 5% of the shares of Class A Preferred Stock issued pursuant to the terms hereof remain outstanding, the Company hereby agrees that none of the following actions may be taken by the Company without the consent of Five Arrows or the director(s) of the Company designated by Five Arrows: (i) the sale, lease, assignment, transfer or other disposition of any of the Company's property, business or assets (including, without limitation, receivables and leasehold interests), whether now owned or hereafter acquired and whether by distribution or otherwise, or, in the case of any Subsidiary, the issuance or sale any shares of such Subsidiary's Capital Interest to any Person other than the Company or any wholly owned Subsidiary of the Company or the entering into a merger or consolidation with another Person, other than sales of furniture, fixtures and equipment (i) in the ordinary course of business and not exceeding in the aggregate $300,000 in any twelve month period, or (ii) that the Board deems necessary to insure that the rents received by the Company from personal property leased by the Company with real property do not exceed 10%, as provided in the regulations promulgated under Section 512 of the Code; (ii) the acquisition or leasing of assets (other than pursuant to the leases or management agreements related to the management of the Hotels) or Investments by the Company other than (A) the Portfolio Investments and (B) Investments in U.S. government backed securities or "no-load" mutual funds that are restricted to investing solely in U.S. government backed securities of reserves taken for working capital accounts; (iii) the material amendment or modification of the Management Agreement (the "Management Agreement"), dated the date hereof, between the Company and CNL Hospitality Advisors, Inc.; (iv) the discontinuance or disqualification of the Company's status as a Real Estate Investment Trust within the meaning of the Code; provided, however, that the consent of the director(s) of the -------- ------- Company designated by Hospitality Partners would be required if CHP would (with or without the passage of time) be disqualified as a Real Estate Investment Trust thereby and; (v) the incurrence of Indebtedness, other than (A) Indebtedness outstanding pursuant to the Senior Loan Facility as in existence on the Effective Date and (B) other Indebtedness in connection with (1) capital expenditures so long as such Indebtedness incurred for such capital expenditures is, in the aggregate, in an amount not exceeding $1,500,000 at any one time outstanding or (2) the payment of distributions required for the Company to maintain its REIT status and (C) Permitted Refinancing. (b) The Company hereby agrees that none of the following actions may be taken by the Company without the consent of both (1) Five Arrows or the directors of the Company designated by Five Arrows, and (2) Hospitality Partners or the directors of the Company designated by Hospitality Partners: (i) the entering into or conducting any business other than the Business and matters reasonably related to the Business; (ii) even if the Articles of Incorporation were amended to provide otherwise, for so long as the Company is or may be a "pension-held REIT" as defined in Section 856(h)(3)(D) of the Code as determined by the counsel to the holders of a majority of shares of Class A Preferred Stock, engaging in any business or taking any action that would result in the Company realizing "unrelated business taxable income" within the meaning of Section 512 of the Code, if the Company were a "qualified trust' as defined in Section 856(h)(3)(E) of the Code; and (iii) the entering into any transaction or series of related transactions (including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service or the making of any Investment) with or in any affiliate other than (A) as provided by the Management Agreement and (B) leases to tenants affiliated with Rothschild Realty, Inc.

Director Approval Required For Certain Action. (a) Subject to paragraph (b) of this Section 2.4, so long as at least 5% of the shares of Class A Preferred Stock issued pursuant to the terms hereof remain outstanding, the Company hereby agrees that none of the following actions may be taken by the Company without the consent of Five Arrows or the director(s) of the Company designated by Five Arrows: (i) the sale, lease, assignment, transfer or other disposition of any of the Company's property, business or assets (including, without limitation, receivables and leasehold interests), whether now owned or hereafter acquired and whether by distribution or otherwise, or, in the case of any Subsidiary, the issuance or sale any shares of such Subsidiary's Capital Interest to any Person other than the Company or any wholly owned Subsidiary of the Company or the entering into a merger or consolidation with another Person, other than sales of furniture, fixtures and equipment (i) in the ordinary course of business and not exceeding in the aggregate $300,000 in any twelve month period, or (ii) that the Board deems necessary to insure that the rents received by the Company from personal property leased by the Company with real property do not exceed 10%, as provided in the regulations promulgated under Section 512 of the Code; (ii) the acquisition or leasing of assets (other than pursuant to the leases or management agreements related to the management of the Hotels) or Investments by the Company other than (A) the Portfolio Investments and (B) Investments in U.S. government backed securities or "no-load" mutual funds that are restricted to investing solely in U.S. government backed securities of reserves taken for working capital accounts; (iii) the material amendment or modification of the Management Agreement (the "Management Agreement"), dated the date hereof, between the Company and CNL Hospitality Advisors, Inc.; (iv) the discontinuance or disqualification of the Company's status as a Real Estate Investment Trust within the meaning of the Code; provided, however, that the consent of the director(s) of the -------- ------- Company designated by Hospitality Partners would be required if CHP would (with or without the passage of time) be disqualified as a Real Estate Investment Trust thereby and; (v) the incurrence of Indebtedness, other than (A) Indebtedness outstanding pursuant to the Senior Loan Facility as in existence on the Effective Date and (B) other Indebtedness in connection with (1) capital expenditures so long as such Indebtedness incurred for such capital expenditures is, in the aggregate, in an amount not exceeding $1,500,000 at any one time outstanding or (2) the payment of distributions required for the Company to maintain its REIT status and (C) Permitted Refinancing. (b) The Company hereby agrees that none of the following actions may be taken by the Company without the consent of both (1) Five Arrows or the directors of the Company designated by Five Arrows, and (2) Hospitality Partners or the directors of the Company designated by Hospitality Partners: (i) the entering into or conducting any business other than the Business and matters reasonably related to the Business; (ii) even if the Articles of Incorporation were amended to provide otherwise, for so long as the Company is or may be a "pension-held REIT" as defined in Section 856(h)(3)(D) of the Code as determined by the counsel to the holders of a majority of shares of Class A Preferred Stock, engaging in any business or taking any action that would result in the Company realizing "unrelated business taxable income" within the meaning of Section 512 of the Code, if the Company were a "qualified trust' as defined in Section 856(h)(3)(E) of the Code; and (iii) the entering into any transaction or series of related transactions (including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service or the making of any Investment) with or in any affiliate other than (A) as provided by the Management Agreement and (B) leases to tenants affiliated with Rothschild Realty, Inc.

Director Approval Required For Certain Action. (a) Subject to paragraph (b) of this Section 2.4, so long as at least 5% of the shares of Class A Preferred Stock issued pursuant to the terms hereof remain outstanding, the The Company --------------------------------------------- hereby agrees that none of the following actions may be taken by the Company without the consent of Five Arrows or the director(s) nominated or designated by the Purchaser: (a) the acquisition or disposition of any assets or business of the Company designated by Five Arrows:with a book value or cost in excess of $50,000; (ib) the sale, lease, assignment, transfer merger or consolidation of the Company with or into any corporation or other disposition of any of the Company's property, business or assets entity; (including, without limitation, receivables and leasehold interests), whether now owned or hereafter acquired and whether by distribution or otherwise, or, in the case of any Subsidiary, c) the issuance or sale any redemption (other than scheduled redemptions) of shares of such Subsidiary's Capital Interest to any Person other than capital stock of the Company or any wholly owned Subsidiary of the Company or the entering into a merger or consolidation with another Person, other than sales of furniture, fixtures and equipment (i) in the ordinary course of business and not exceeding in the aggregate $300,000 in any twelve month period, or (ii) that the Board deems necessary to insure that the rents received by the Company from personal property leased by the Company with real property do not exceed 10%, as provided in the regulations promulgated under Section 512 of the Code; (ii) the acquisition or leasing of assets (other than pursuant to the leases or management agreements related to the management of the Hotels) or Investments by the Company other than (A) the Portfolio Investments and (B) Investments in U.S. government backed debt securities or "no-load" mutual funds that are restricted to investing solely in U.S. government backed securities of reserves taken for working capital accounts; (iii) the material amendment or modification of the Management Agreement (the "Management Agreement"), dated the date hereof, between the Company and CNL Hospitality Advisors, Inc.; (iv) the discontinuance or disqualification of the Company's status as a Real Estate Investment Trust within the meaning of the Code; provided, however, that the consent of the director(s) of the -------- ------- Company designated by Hospitality Partners would be required if CHP would (with or without the passage of time) be disqualified as a Real Estate Investment Trust thereby and; (v) the incurrence of Indebtedness, other than (A) Indebtedness outstanding pursuant to the Senior Loan Facility as in existence on the Effective Date commercial borrowing facilities and (B) other Indebtedness in connection with (1pursuant to any stock option or stock bonus plan or agreement adopted or approved by the Stockholder pursuant to Section 5.01(f) capital expenditures so long as such Indebtedness incurred for such capital expenditures is, in the aggregate, in an amount not exceeding $1,500,000 at any one time outstanding or (2) the payment of distributions required for the Company to maintain its REIT status and (C) Permitted Refinancing.below; (bd) The an initial public offering of shares of Company hereby agrees that none Common Stock pursuant to a registration statement filed with, and declared effective by, the Securities and Exchange Commission ("SEC), other than a registration on Form S-4 or S-8 (or its equivalent); (e) adoption of the following actions may be taken annual budget of the Company, and the taking of any action which would constitute a material deviation, on a line by line basis, from such budget; (f) adoption of any stock option or stock bonus plan or agreement, provided, however, that in no event shall the total number -------- ------- of shares of Company without Common Stock issuable pursuant to all such plans or agreements exceed 10% of the consent of both (1) Five Arrows or the directors capital stock of the Company designated by Five Arrowson a fully diluted basis; (g) appointment, removal or replacement of a President, Chief Operating Officer and Chief Financial Officer (2which consent will not be unreasonably withheld); (h) Hospitality Partners or the directors of Stockholder entering into an affiliated transaction with the Company designated by Hospitality Partners:Company; (i) the acceptance of additional capital contributions by the Stockholder or the issuance of additional Company Common Stock, any preferred stock or any debt in the Company to persons not a party to this Agreement on the date hereof; (j) the adopting, altering or amending of the by-laws of the Company; (k) the amending or altering of the Company's Certificate of Incorporation; (l) the borrowing of money over the amount permitted by the Term Loan Agreement; (m) the entering into or conducting any a new line of business other than the Business and matters reasonably related to the BusinessCompany's current line of business; (iin) even if the Articles selection of Incorporation were amended an independent accounting firm to provide otherwise, for so long as general accounting services other than Ernst & Young; (o) the determination on behalf of the Company is that any cash dividend payments shall be made to the Stockholder out of net income in respect of either Company Common Stock or may be a "pension-held REIT" as defined in Section 856(h)(3)(D) any preferred stock of the Code as determined by the counsel to the holders of a majority of shares of Class A Preferred Stock, engaging in any business or taking any action that would result in the Company realizing "unrelated business taxable income" within the meaning of Section 512 of the Code, if the Company were a "qualified trust' as defined in Section 856(h)(3)(E) of the CodeCompany; and (iiip) the entering into any transaction or series of related transactions (including, without limitation, any purchase, sale, lease or exchange of property or the rendering taking of any service other action that could reasonably be expected to materially impair the rights or obligations of the making of any Investment) with or in any affiliate other than (A) as provided by the Management Agreement and (B) leases to tenants affiliated with Rothschild Realty, Inc.Purchaser hereunder.