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Exhibit 10.70
EXECUTION COPY
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT is made as of the 23rd day of February,
1998, by and among Starwood Hotels & Resorts (the "REIT"), a Maryland real
estate investment trust, Starwood Hotels & Resorts Worldwide, Inc., a Maryland
corporation (the "OPCO") (the REIT and the OPCO, each a "Company" and together
the "Companies"), Xxxxxxx Xxxxx International ("MLI"), and Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, on behalf of itself and as agent acting for
the account of MLI ("Xxxxxxx Xxxxx" and, collectively with MLI, the "Xxxxxxx
Xxxxx Parties").
IN CONSIDERATION of the mutual covenants contained in this Purchase
Agreement, the Companies and the Xxxxxxx Xxxxx Parties hereby agree as follows:
SECTION 1. Authorization of Sale of the Shares. Subject to the terms
and conditions of this Purchase Agreement, the REIT has authorized the sale to
the Xxxxxxx Xxxxx Parties of 1,547,000 shares of beneficial interest, $.01 par
value per share, of the REIT (the "REIT Shares") and the OPCO has authorized the
sale to the Xxxxxxx Xxxxx Parties of 1,547,000 shares of common stock, $.01 par
value per share, of the OPCO (the "OPCO Shares"), which REIT Shares and OPCO
Shares are paired as a unit consisting of one (1) REIT Share and one (1) OPCO
Share (hereinafter each such paired unit is referred to as a "Paired Share") and
the Paired Shares referred to in this sentence are herein called the "Purchase
Shares"). In addition, the REIT and the OPCO may issue to MLI additional Paired
Shares in settlement of certain of their obligations under that certain
Agreement (the "Agreement"), dated as of the date hereof, between the REIT, the
OPCO and MLI (the "Additional Shares"). The Paired Shares and the Additional
Shares are hereinafter collectively called the "Shares."
SECTION 2. Agreement to Sell and Purchase the Purchase Shares.
Subject to the terms and conditions of this Purchase Agreement, on the Closing
Date (as defined in Section 3 hereof), the Companies will sell to the Xxxxxxx
Xxxxx Parties the Purchase Shares for a per Paired Share purchase price equal to
98.00% of the Closing Price. The "Closing Price" shall equal the closing price
reported on the New York Stock Exchange for a Paired Share on February 23, 1998.
SECTION 3. Delivery of the Purchase Shares at the Closing.
3.1. Closing. The completion of the purchase and sale of the
Purchase Shares (the "Closing") shall occur as soon as practicable on or after
the date hereof on a business day to be agreed upon by the Companies and the
Xxxxxxx Xxxxx Parties, but in no event later than five business days after the
execution of this Purchase Agreement (hereinafter, the "Closing Date").
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3.2. Conditions. At Closing, the Companies shall deliver to the
Xxxxxxx Xxxxx Parties one or more stock certificates registered in the name of
MLI representing the number of Purchase Shares set forth in Section 2 above.
The obligation of the Companies to complete the purchase and sale of
the Purchase Shares and deliver such stock certificate(s) to the Xxxxxxx Xxxxx
Parties at the Closing shall be subject to the following conditions, any one or
more of which may be waived by both of the Companies acting together: (i)
receipt by the Companies of Federal Funds (or other mutually agreed upon form of
payment) in the full amount of the purchase price for the Purchase Shares being
purchased hereunder, (ii) the accuracy in all material respects as of the
Closing Date, of the representations and warranties made by the Xxxxxxx Xxxxx
Parties herein and the fulfillment, in all material respects, of those
undertakings of the Xxxxxxx Xxxxx Parties to be fulfilled prior to the Closing,
(iii) execution and delivery of the Agreement by MLI, (iv) receipt by the
Companies of a cross-receipt with respect to the Purchase Shares executed by
Xxxxxxx Xxxxx and (v) receipt by the Companies of a certificate by an officer or
authorized representative of Xxxxxxx Xxxxx to the effect that the
representations and warranties of the Xxxxxxx Xxxxx Parties set forth in Section
5 hereof are true and correct as of the date of this Purchase Agreement and as
of the Closing Date.
The Xxxxxxx Xxxxx Parties' obligation to accept delivery of such
stock certificate(s) and to pay for the Purchase Shares evidenced thereby shall
be subject to the following conditions, any one or more of which may be waived
by the Xxxxxxx Xxxxx Parties: (i) the accuracy in all material respects, as of
the Closing Date, of the representations and warranties made by the Companies
herein and the fulfillment, in all material respects, of those undertakings of
the Companies to be fulfilled prior to the Closing, (ii) receipt by the Xxxxxxx
Xxxxx Parties of all opinions, letters and certificates to be delivered by the
Companies pursuant to this Purchase Agreement, (iii) execution and delivery of
the Agreement by each of the Companies, and (iv) receipt by the Xxxxxxx Xxxxx
Parties of a cross-receipt with respect to the purchase price for the Purchase
Shares executed by the Companies.
SECTION 4. Representations, Warranties and Covenants of the
Companies. Except as disclosed in the Companies' SEC Filings (as defined below),
each of the REIT and the OPCO, severally and not jointly, hereby represents and
warrants to the Xxxxxxx Xxxxx Parties, and covenants with the Xxxxxxx Xxxxx
Parties, with respect to such Company and its Subsidiaries (as defined below)
only, as follows:
4.1. Organization and Qualification of the Companies. Each of the
REIT and the OPCO has been duly organized and is validly existing in good
standing under the laws of Maryland with power and authority to own and lease
its properties and to conduct its business as currently conducted. Each of the
REIT and the OPCO is duly qualified to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing or
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managing of property or the conduct of business, except where the failure to so
qualify would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, assets, business affairs or business prospects of
the Companies and the Subsidiaries of the Companies considered as one enterprise
(a "Material Adverse Effect"). Entities in which either of the Companies
directly or indirectly has at least a 50% ownership interest are herein referred
to as the "Subsidiaries," and each individually, as a "Subsidiary."
4.2. Organization and Qualification of Subsidiaries. Each of the
Subsidiaries has been duly organized and is validly existing as a corporation,
limited partnership, or limited liability company, as the case may be, in good
standing under the laws of its respective jurisdiction of organization, with
full power and authority to own, lease and operate its properties and to conduct
the business in which it currently is engaged. Each of the Subsidiaries is duly
qualified as a foreign corporation, limited partnership, or limited liability
company, as the case may be, to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except where
the failure to so qualify would not have a Material Adverse Effect. All of the
issued and outstanding shares of capital stock of each of the corporate
Subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable. The ownership by the Companies or the Subsidiaries of the shares
of capital stock or limited partnership or equity interests, as the case may be,
of each of the Subsidiaries is as described in the Companies' SEC Filings.
4.3. Authorized Capital Stock. The REIT has the following authorized
shares:1,000,000,000 REIT shares par value $0.01 per share, 200,000,000 excess
shares of beneficial interest, par value $.01 per share, 100,000,000 shares of
trust preferred shares, par value $.01 per share, and 50,000,000 shares of
excess preferred stock, par value $0.01 per share. The OPCO has the following
authorized shares: 1,000,000,000 OPCO shares, par value $0.01 per share,
200,000,000 shares of preferred stock, par value $0.01 per share, 50,000,000
shares of excess common stock, par value $0.01 per share and 100,000,000 shares
of excess preferred shares, par value $0.01 per share. As of January 20, 1998,
there were 55,392,389 Paired Shares, 6,285,765 Class A Exchangeable Preferred
Shares of the Trust and 5,502,711 Class B Exchangeable Preferred Shares of the
Trust outstanding, and 21,292,005 REIT shares and 21,292,005 OPCO shares were
reserved for issuance. The issued and outstanding Paired Shares of the Companies
have been duly authorized and validly issued, are fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, were
not issued in violation of or subject to any preemptive rights or other rights
to subscribe for or purchase securities, and conform to the description thereof
in the Companies' SEC Filings. Other than as described in the Companies' SEC
Filings, the REIT does not have outstanding any options to purchase, or other
rights to subscribe for or purchase, any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its capital
stock or any such options, rights, convertible securities or obligations. The
description of the
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Companies' stock, stock bonus and other stock plans or arrangements and the
options or other rights granted and exercised thereunder in the Companies' SEC
Filings accurately and fairly presents the information required to be shown with
respect to such plans, arrangements, options and rights.
4.4. Issuance, Sale and Delivery of the Shares. The Purchase Shares
to be sold by the Companies have been duly authorized for issuance and, when
issued, delivered and paid for in the manner set forth in this Purchase
Agreement, will be validly issued, fully paid and non-assessable. The Additional
Shares, if and when issued pursuant to the Agreement, have been duly authorized
and will be validly issued, fully paid and non-assessable. Upon payment of the
purchase price and delivery of the Shares in accordance with this Purchase
Agreement, MLI will receive good, valid and marketable title to the Shares, free
and clear of all security interests, mortgages, pledges, liens, encumbrances and
claims. No approval of or authorization by the respective shareholders or boards
of trustees or directors of the Companies will be required for the issuance
and/or sale of the Shares to be sold by the Companies as contemplated herein or
in the Agreement, except such as shall have been obtained on or before the
Closing Date or the applicable Settlement Date. The issuance and/or sale of the
Shares to the Xxxxxxx Xxxxx Parties by the Companies pursuant to this Purchase
Agreement or the Agreement (as the case may be), the compliance by the Companies
with the other provisions of this Purchase Agreement or the Agreement and the
consummation of the other transactions contemplated hereby or thereby do not
require the consent, approval, authorization, registration or qualification of
or with any court, governmental authority or agency, except such as shall have
been obtained on or before the Closing Date or in connection with any Resale
Registration Statement filed with respect to any of the Shares. The Companies
meet and will continue to meet the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations of the U.S. Securities and Exchange Commission (the "Commission")
under the Securities Act (the "1933 Act Regulations"). The Companies have filed
and will file all documents which they are required to file under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and the rules and
regulations promulgated thereunder (the "1934 Act Regulations") within the time
periods prescribed by the Exchange Act and the 1934 Act Regulations since
December 31, 1996 and all such documents (collectively, together with the
Companies' registration statements filed under the Securities Act which have
been declared effective since January 1, 1997 and have not been withdrawn, the
"Companies' SEC Filings") comply and will comply in all material respects with
the requirements of the Exchange Act and the 1934 Act Regulations, as
applicable, and none of such documents, when so filed, contained or will contain
any untrue statement of a material fact or omitted or will omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. No Resale Registration Statement filed in respect of any of the
Shares, when so filed, contained or will contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading.
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4.5. Due Execution, Delivery and Performance by the Company. Each of
the Companies has full right, power and authority to enter into this Purchase
Agreement and the Agreement and perform the transactions contemplated hereby and
thereby. This Purchase Agreement and the Agreement have been duly authorized,
executed and delivered by each of the Companies. The execution and delivery of
the Purchase Agreement and the Agreement by each of the Companies and the
consummation of the transactions and the performance of the obligations herein
and therein contemplated will not violate any provision of the declaration of
trust, certificate of incorporation, bylaws, or other organizational documents
of either of the Companies, and will not conflict with, result in the breach or
violation of, or constitute, either by itself or upon notice or the passage of
time or both, a default under any material agreement, mortgage, deed of trust,
credit agreement, lease, franchise, license, indenture, note, permit or other
instrument to which either Company is a party or by which either Company or its
respective properties may be bound or affected, any statute or any
authorization, judgment, decree, order, rule or regulation of any court or any
regulatory body, administrative agency or other governmental body applicable to
either Company or any of its respective properties other than violations,
conflicts, breaches or defaults that individually or in the aggregate would not
have a Material Adverse Effect. No consent, approval, authorization or other
order of any court, regulatory body, administrative agency or other governmental
body is required for the execution and delivery of this Purchase Agreement, the
Agreement or the consummation of the transactions contemplated hereby or
thereby, except in connection with the filing of any Resale Registration
Statements pursuant to Section 7 below or for compliance with the blue sky laws
applicable to the offering of the Shares.
4.6. Accountants. The Companies' independent certified public
accountants, who have expressed their opinion with respect to the Most Recent
Financial Statements (as defined below) are independent accountants as required
by the Securities Act and the 1933 Act Regulations.
4.7. No Defaults. Except as to defaults, violations and breaches
which individually or in the aggregate would not have a Material Adverse Effect,
neither of the Companies nor any of their respective Subsidiaries is in
violation or default of any provision of its declaration of trust, certificate
of incorporation or bylaws, or other organizational documents, and is not in
breach of or default with respect to any provision of any agreement, judgment,
decree, order, mortgage, deed of trust, credit agreement, lease, franchise,
license, indenture, permit or other instrument to which it is a party or by
which it or any of its properties are bound.
4.8. No Actions. There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of each Company, threatened against or affecting such Company
or any of its Subsidiaries, any real property or improvements thereon owned or
leased by such Company or its Subsidiaries, including any property underlying
indebtedness held by
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such Company (each, individually, a "Property" and collectively, the
"Properties"), or any officer of such Company or any of its Subsidiaries that,
if determined adversely to such Company or any Subsidiary, any Property,
including any property underlying indebtedness held by such Company and any of
its Subsidiaries, or any such officer, would reasonably be expected to (A)
result in any Material Adverse Effect or (B) materially and adversely affect the
consummation of the transactions contemplated by this Purchase Agreement or the
Agreement.
4.9. Properties. (A) Each Company and its respective Subsidiaries,
as the case may be, has good and marketable title to all the properties and
assets reflected as owned by such entities in the Most Recent Financial
Statements, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except (i) those, if any, reflected in the Most Recent Financial
Statements, or (ii) those which would not have a Material Adverse Effect, (B)
the leases of any real property and buildings held under lease by such Company
or any of its Subsidiaries are in full force and effect, and such entities are
not in default in respect of any of the terms or provisions of such leases and
have not received notice of the assertion of any claim by anyone adverse to such
entities' rights as lessee under such leases, or affecting or questioning such
entity's right to the continued possession or use of the real property and
buildings held under such leases or of a default under such leases, in each case
with such exceptions as would not have a Material Adverse Effect; (C) neither
Company nor any of its respective Subsidiaries or any tenant of any of the
Properties is in default under any of the leases pursuant to which such Company
or its Subsidiaries, as lessor, leases its Property (and to the best knowledge
of such Company no event has occurred which, but for the passage of time or the
giving of notice, or both, would constitute a default under any of such leases)
other than such defaults that would not have a Material Adverse Effect; (D) no
person has an option or right of first refusal to purchase all or part of any
Property or any interest therein, other than such options or rights of first
refusal which would not have a Material Adverse Effect; (E) each of the
Properties complies with all applicable codes, laws and regulations (including,
without limitation, building and zoning codes, laws and regulations and laws
relating to access to the Properties), except for such failures to comply that
would not individually or in the aggregate have a Material Adverse Effect; and
(F) neither Company has knowledge of any pending or threatened condemnation
proceedings, zoning change, or other proceeding or action that will in any
manner affect the size of, use of, improvements on, construction on or access to
the Properties, including any property underlying indebtedness held by either
Company or any of its respective Subsidiaries, except such proceedings or
actions that would not have a Material Adverse Effect.
4.10. REIT Qualification. The REIT qualified as a real estate
investment trust under the Internal Revenue Code of 1986, as amended (the
"Code"), with respect to its taxable years ended December 31, 1995, December 31,
1996 and December 31, 1997, and is organized in conformity with the requirements
for qualification as a real estate investment trust, and its manner of operation
has enabled it to meet the requirements for qualification as a real estate
investment trust as of the date hereof,
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and its proposed manner of operation will enable it to meet the requirements for
qualification as a real estate investment trust in the future.
4.11. No Material Change. Since the date of the Most Recent
Financial Statements, and except as otherwise disclosed in the Companies' SEC
Filings as of the Closing Date, (i) no material casualty loss or material
condemnation or other material adverse event with respect to any Property or any
of the Subsidiaries, has occurred that would singly or in the aggregate have a
Material Adverse Effect; (ii) neither of the Companies, nor any of their
respective Subsidiaries is in default in the payment of principal or interest on
any outstanding debt obligations; (iii) except as a result of (a) the Companies'
acquisition of Westin Hotels & Resorts Worldwide, Inc. and certain affiliates
and the related financing transactions and (b) the OPCO's acquisition of ITT
Corporation and the related financing transactions, there has not been any
change in the capital stock of either Company or the Subsidiaries (other than
the sale of the Purchase Shares hereunder or those reserved for issuance
pursuant to the Agreement, issuances pursuant to the incentive compensation
plans of the Companies), or any increase in the indebtedness of either Company
or their respective Subsidiaries that is material to such entities, considered
as one enterprise; (iv) and except for regular quarterly distributions on the
REIT Shares, there has been no dividend or distribution of any kind declared,
paid or made by the REIT or the OPCO; and (v) there has not been any material
adverse change in the condition, financial or otherwise, or in the earnings,
assets, business affairs or business prospects of the Companies and the
Subsidiaries, considered as one enterprise, whether or not arising in the
ordinary course of business.
4.12. Intellectual Property. Neither of the Companies nor the
Subsidiaries is required to own or possess trademarks, trade names, patent
rights, copyrights, licenses, approvals and governmental authorizations, which
it does not already own or possess to conduct its businesses as now conducted;
and neither Company has knowledge of any material infringement by it of
trademark, trade name rights, patent rights, copyrights, licenses, trade secrets
or other similar rights of others, and has not received any notice that any
claim has been made against such Company regarding trademark, trade name,
patent, copyright, license, trade secrets or other infringement that would not
singly or in the aggregate have a Material Adverse Effect.
4.13. Compliance. Neither Company has been advised, or has reason to
believe, that it is not conducting business in compliance with all applicable
laws, rules and regulations of the jurisdictions in which it is conducting
business, except where failure to be so in compliance will not have a Material
Adverse Effect.
4.14. Taxes. Each of the Companies and its Subsidiaries have filed
all material federal, state and foreign income and franchise tax returns which
have been required to be filed and has paid or accrued all taxes shown as due
thereon (except for those taxes which are being contested in good faith through
appropriate proceeding, for which adequate reserves have been established and
which are either reflected in the Most Recent Financial Statements or disclosed
by the Companies to the Xxxxxxx Xxxxx
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Parties), and neither Company has any knowledge of any tax deficiency which has
been or might be asserted or threatened against such Company and its
Subsidiaries which would singly or in the aggregate have a Material Adverse
Effect.
4.15. Transfer Taxes. On the Closing Date, all stock transfer or
other taxes, if any (other than income taxes) which are required to be paid in
connection with the sale and transfer of the Purchase Shares to be sold to the
Xxxxxxx Xxxxx Parties hereunder will be, or will have been, fully paid or
provided for by the Companies and all laws imposing such taxes will be or will
have been fully complied with.
4.16. Investment Company. Neither of the Companies nor any of their
Subsidiaries is required to register as an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
4.17. Offering Materials. Neither the REIT nor the OPCO has
distributed nor will distribute prior to the Closing Date any offering material
in connection with the offering and sale of the Purchase Shares other than the
documents and information provided to the Xxxxxxx Xxxxx Parties pursuant to this
Section 4.
4.18. Additional Information. Each of the Companies represents and
warrants that the information contained in the following documents, which the
Companies have furnished to the Xxxxxxx Xxxxx Parties, or will be furnished or
made available upon request prior to the Closing, is true and correct in all
material respects as of their respective filing dates:
(a) Joint Annual Report on Form 10-K for the year ended December
31, 1996, which Joint Annual Report includes the Companies'
most recently available audited financial statements together
with the report thereon of the independent certified public
accountants (the "Most Recent Financial Statements"),
(b) Joint Quarterly Reports on Form 10-Q, as amended if
applicable, for the quarters ended March 31, 1997, June 30,
1997 and September 30, 1997;
(c) the Companies' proxy statements on Form 14A relating to (i)
the most recent Annual Meetings of the REIT's Shareholders and
the OPCO's Shareholders and (ii) the Special Meetings of the
REIT's Shareholders and the OPCO's Shareholders which occurred
during the 12 month period prior to the date hereof or for
which a meeting date has been fixed and a proxy statement
distributed;
(d) all other documents, if any, filed by or with respect to the
REIT and the OPCO with the Commission since January 1, 1997
pursuant to Section 13, 15(d) or 16(a) of the Exchange Act;
and
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(e) covenant compliance certificates stating that none of the
REIT, the OPCO or their respective Subsidiaries are in default
under any of their respective credit agreements or other
financing arrangements.
4.19. Legal Opinion. At or prior to the Closing, counsel to the
Companies will deliver their legal opinions dated the Closing Date to the
Xxxxxxx Xxxxx Parties in substantially the form of Exhibit A hereto.
4.20. ERISA. Each of the Companies and their respective Subsidiaries
are in compliance with all applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended and the rules and regulations
promulgated thereunder ("ERISA"), except for such failures to comply as will not
have a Material Adverse Effect. Neither a Reportable Event (as defined under
ERISA) nor a Prohibited Transaction (as defined under ERISA) has occurred with
respect to any Plan (as defined below) of the Companies and/or their respective
affiliates; no notice of intent to terminate a Plan has been filed nor has any
Plan been terminated within the past five years; to the Companies' knowledge, no
circumstance exists which constitutes grounds under Section 402 of ERISA
entitling the Pension Benefit Guaranty Corporation ("PBGC") to institute
proceedings to terminate, or appoint a trustee to administer, a Plan, nor has
the PBGC instituted any such proceedings; neither Company nor their respective
affiliates has completely or partially withdrawn under Section 4201 or 4202 of
ERISA from any Multiemployer Plan (as defined therein); each of the Companies
and their respective affiliates have met the minimum funding requirements of
Section 412 of the Code and Section 302 of ERISA with respect to each Plan and
there is no unfunded current liability (as defined below) with respect to any
Plan; each of the Companies and their respective affiliates have not incurred
any liability to the PBGC under ERISA (other than for the payment of premiums
under Section 4007 of ERISA); no part of the funds to be used by the Companies
in satisfaction of their respective obligations under this Purchase Agreement or
the Agreement constitute "plan assets" of any "employee benefit plan" within the
meaning of ERISA or of any "plan" within the meaning of Section 4957(e)(I) of
the Code, as interpreted by the Internal Revenue Service and the U.S. Department
of Labor in rules, regulations, releases and bulletins or as interpreted under
applicable case law. As used below, "Plan" means an "employee benefit plan" or
"plan" as described in Section 3(3) of ERISA; and "unfunded current liability"
has the meaning provided in Section 302(d)(8)(A) of ERISA.
4.21. Environmental Protection. Except as otherwise disclosed in the
Companies' SEC Filings and except for such exceptions as would not singly or in
the aggregate have a Material Adverse Effect, none of the REIT's or the OPCO's
or their respective affiliates' properties contain any Hazardous Materials that,
under any Environmental Law, (i) would impose liability on such Company or any
affiliate that is likely to have a Material Adverse Effect or (ii) is likely to
result in the imposition of a lien on any material asset owned, directly or
indirectly, by such Company. Neither Company nor any affiliate is subject to any
existing, pending or, to the best knowledge
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of each Company, threatened investigation or proceeding by any governmental
agency or authority with respect to pursuant to any Environmental law, except
any which, if adversely determined, would not have a Material Adverse Effect. As
used herein, "Environmental Laws" mean all federal, state, local and foreign
environmental, health and safety laws, codes and ordinances and all rules and
regulations promulgated thereunder, including, without limitation laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including, without limitation, air, surface water, ground
water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage disposal,
transport or handling of pollutants, contaminants, chemicals, or industrial,
solid, toxic or hazardous substances or wastes; and "Hazardous Material"
includes, without limitation, (i) all substances which are designated pursuant
to Section 311(b)(2)(A) of the Federal Water Pollution Control Act ("FWPCA"), 33
U.S.C. Section 1251 et seq.; (ii) any element, compound, mixture, solution, or
substance which is designated pursuant to Section 102 of the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seq.; (iii) any hazardous waste having the characteristics which
are identified under or listed pursuant to Section 3001 of the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 6901 et seq.; (iv) any
toxic pollutant listed under Section 307(a) of the FWPCA; (v) any hazardous air
pollutant which is listed under Section 112 of the Clean Air Act, 42 U.S.C.
Section 7401 et seq.; (vi) any imminently hazardous chemical substance or
mixture with respect to which action has been taken pursuant to Section 7 of the
Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; and (vii)
petroleum, petroleum products, petroleum by-products, petroleum decomposition
by-products, and waste oil.
4.22. Solvency. Immediately following (i) the execution of this
Purchase Agreement and the Agreement, (ii) the purchase of the Purchase Shares
pursuant hereto and (iii) the completion of any other transaction contemplated
by this Purchase Agreement and the Agreement, each of the Companies will be
solvent and able to pay its debts as they mature, will have capital sufficient
to carry on its business and all businesses in which it is to engage, and will
have assets which will have a present fair market valuation greater than the
amount of all of its liabilities. This Purchase Agreement and the Agreement have
been executed and delivered by the Companies in good faith and in exchange for
reasonably equivalent value. Neither of the Companies intends to incur debts
beyond its ability to pay them as they become due. Each of the Companies' assets
and capital are now, and are expected in the future to be, sufficient to pay the
Companies' ongoing expenses as they are incurred and to discharge all of the
Companies' liabilities in the event that the business of the Companies is
required to be liquidated. The Companies have not entered into this Purchase
Agreement or the Agreement or any transaction contemplated hereby or thereby
with an intent to hinder, delay or defraud creditors of any persons or entity.
4.23. Certificate. At or prior to the Closing, each Company shall
deliver an officer's certificate to be dated the Closing Date in form and
substance satisfactory
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to the Xxxxxxx Xxxxx Parties to the effect that (i) the representations and
warranties of such Company set forth in this Section 4 are true and correct in
all material respects as of the date of this Purchase Agreement and as of the
Closing Date and (ii) such Company has complied in all material respects with
all the covenants and satisfied in all material respects all the conditions on
its respective part to be performed or satisfied pursuant to this Purchase
Agreement or the Agreement on or prior to such Closing Date.
4.24. Financial Statements. The Most Recent Financial Statements
(including the notes thereto) present fairly in all material respects the
financial position of the respective entity or entities presented therein at the
respective dates indicated and the results of their operations for the
respective periods specified, and except as otherwise stated in the Most Recent
Financial Statements, said financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis. The
supporting schedules included in the Companies' SEC Filings fairly present in
all material respects the information required to be stated therein. The
financial information and data included in the Companies' SEC Filings present
fairly in all material respects the information included therein and have been
prepared on a basis consistent with that of the financial statements included in
the Companies' SEC Filings and the books and records of the respective entities
presented therein. The pro forma financial information included in the
Companies' SEC Filings has been prepared in accordance with the applicable
requirements of Rules 11-01 and 11-02 of Regulation S-X under the Securities Act
and other 1933 Act Regulations and American Institute of Certified Public
Accountants ("AICPA") guidelines with respect to pro forma financial information
and includes all adjustments necessary to present fairly in all material
respects the pro forma financial position of the respective entity or entities
presented therein at the respective dates indicated and the results of their
operations for the respective periods specified. Other than the historical and
pro forma financial statements (and schedule) included therein, no other
historical or pro forma financial statements (or schedules) are required to be
included in the Companies' SEC Filings. Except as reflected or disclosed in the
financial statements included in the Companies' SEC Filings, none of the
Companies or any of the Subsidiaries is subject to any material indebtedness,
obligation, or liability, contingent or otherwise.
4.25. Labor Disputes. No labor dispute with the employees of either
of the Companies or their respective Subsidiaries exists or, to the knowledge of
the such Company is imminent.
4.26. Regulation M. Each Company, its Subsidiaries and, to such
Company's knowledge, any of their respective trustees, directors, executive
officers or controlling persons, has not taken or will not take, directly or
indirectly, any action resulting in a material violation of Regulation M under
the Exchange Act, or designed to cause or result under the Exchange Act or
otherwise in, or which has constituted or which reasonably might be expected to
constitute, the unlawful stabilization or manipulation of the price of Paired
Shares in connection with the public sale or
12
distribution of the Shares.
SECTION 5. Representations, Warranties and Covenants of Xxxxxxx
Xxxxx or MLI.
5.1. Investment. The Xxxxxxx Xxxxx Parties represent and warrant to,
and covenants with each of the Companies that: (i) the Xxxxxxx Xxxxx Parties are
knowledgeable, sophisticated and experienced in making, and is qualified to
make, decisions with respect to investments in shares presenting an investment
decision like that involved in the purchase of the Purchase Shares, including
investments in securities issued by the Companies; (ii) MLI is acquiring the
number of Purchase Shares set forth in Section 2 above in the ordinary course of
its business and for its own account for investment (as defined for purposes of
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 and the regulations
thereunder) only and with no present intention of distributing any of such
Purchase Shares or any arrangement or understanding with any other persons
regarding the distribution of such Purchase Shares, except pursuant to a
registration statement declared effective under, or an exemption from the
registration requirements of, the Securities Act, (iii) neither Xxxxxxx Xxxxx
Party will directly or indirectly, sell or otherwise dispose of (or solicit any
offers to purchase or otherwise acquire) any of the Purchase Shares except in
compliance with the Securities Act, the Rules and Regulations and any applicable
state securities or blue sky laws; (iv) each Xxxxxxx Xxxxx Party has completed
or caused to be completed the Registration Statement Questionnaire and the Stock
Certificate Questionnaire, both attached hereto as Appendix I, for use in
preparation of the Resale Registration Statement and the answers thereto are
true and correct as of the date hereof and will be true and correct as of the
effective date of the Resale Registration Statement; (v) the Xxxxxxx Xxxxx
Parties have, in connection with their decision to purchase the number of
Purchase Shares set forth in Section 2 above, relied solely upon the documents
identified in Section 4.17, the information referred to in Section 7.7 and the
representations and warranties of each of the Companies contained herein; (vi)
the Xxxxxxx Xxxxx Parties have had access to such additional information, if
any, concerning the Companies as they have considered necessary in connection
with their investment decision to acquire the Purchase Shares; (vii) each of the
Xxxxxxx Xxxxx Parties is an "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act;
and (viii) the Xxxxxxx Xxxxx Parties understand that until the Shares are sold
under an appropriate Resale Registration Statement that has been declared
effective by the Commission, the Shares will contain a legend to the following
effect:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THESE SHARES UNDER THE SECURITIES ACT OF 1933 OR
AN OPINION OF COUNSEL
13
REASONABLY SATISFACTORY TO THE COMPANIES THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT.
5.2. Resale. The Xxxxxxx Xxxxx Parties acknowledge and agree that in
connection with any transfer of any Shares they will provide to the transfer
agent prompt notice of any Shares sold pursuant to a Resale Registration
Statement or otherwise transferred in compliance with applicable federal and
state securities laws. The Xxxxxxx Xxxxx Parties acknowledge that there may
occasionally be times when, subject to the provisions of Section 7.2(a)(v), the
Companies must suspend the right of the Xxxxxxx Xxxxx Parties to effect sales of
the Shares through the use of the Resale Prospectus (as defined below) forming a
part of a Resale Registration Statement until such time as an amendment to such
Resale Registration Statement has been filed by the Companies and declared
effective by the Commission, or until such time as the Companies have filed an
appropriate report with the Commission pursuant to the Exchange Act (each, a
"Black-out Period"); provided that no Black-out Period shall exceed 90
consecutive days. The Xxxxxxx Xxxxx Parties hereby covenant that they will not
effect sales of any Shares pursuant to said Resale Prospectus during the period
commencing at the time at which the Companies give the Xxxxxxx Xxxxx Parties
written notice (which such notice shall have been given by the Companies as
promptly as practicable) of the suspension of the use of said Resale Prospectus
and ending at the time the Companies give the Xxxxxxx Xxxxx Parties written
notice that the Xxxxxxx Xxxxx Parties may thereafter effect sales pursuant to
said Resale Prospectus. The Xxxxxxx Xxxxx Parties further covenant to notify the
Companies promptly of the sale of all of the Shares.
5.3. Due Execution, Delivery and Performance of this Purchase
Agreement. The Xxxxxxx Xxxxx Parties further represent and warrant to, and
covenant with, the Companies that (i) each Xxxxxxx Xxxxx Party has full right,
power, authority and capacity to enter into this Purchase Agreement and the
Agreement and to perform its obligations hereunder and thereunder and consummate
the transactions contemplated hereby and thereby and has taken all necessary
action to authorize the execution, delivery and performance of this Purchase
Agreement and the Agreement, and (ii) upon the execution and delivery of this
Purchase Agreement and the Agreement, this Purchase Agreement and the Agreement
shall constitute valid and binding obligations of the Xxxxxxx Xxxxx Parties
enforceable against the Xxxxxxx Xxxxx Parties in accordance with their terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except that the enforcement of the
indemnification agreements in Section 7.5 hereof may be limited by public
policy.
5.4. Residence of Xxxxxxx Xxxxx. Xxxxxxx Xxxxx is organized in the
State of Delaware and has its principal place of business in the State of New
York.
14
5.5. Certain Tax Considerations. MLI represents and warrants that it
is fully eligible for the benefits of the "Business Profits" or "Industrial and
Commercial Profits" provision, as the case may be, the "Interest" provision or
the "Other Income" provision (if any) of the 0000 Xxxxxx Xxxxxx-Xxxxxx Kingdom
Income Tax Treaty with respect to any payment described in such provisions and
received or to be received by it in connection with this Purchase Agreement and
no such payment is attributable to a trade or business carried on by it through
a permanent establishment in the United States.
SECTION 6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Purchase Agreement,
all covenants, agreements, representations and warranties made by each of the
Companies and the Xxxxxxx Xxxxx Parties herein shall survive the execution of
this Purchase Agreement, the
Agreement, the delivery to Xxxxxxx Xxxxx of the Purchased Shares being purchased
and the payment therefor and the consummation of any other transactions
contemplated hereby or thereby.
SECTION 7. Registration of the Shares; Compliance with the
Securities Act.
7.1. Registration Procedures and Expenses. The Companies shall:
(a) within 45 days after the Closing, prepare and file with
the Commission a Resale Registration Statement (as defined below) covering the
resale by the Xxxxxxx Xxxxx Parties, from time to time, of a number of Shares
equal to the number of Purchase Shares in any of the manners specified in the
Agreement (the "Initial Resale Registration Statement") and use its best efforts
to obtain effectiveness of the Initial Resale Registration Statement within 90
days after the Closing Date. If the total number of Shares exceeds the number of
Shares covered by the Initial Resale Registration Statement, then the Companies
shall promptly prepare and file with the Commission such additional Resale
Registration Statement or Statements as shall be necessary to cover the resale
by the Xxxxxxx Xxxxx Parties of such excess Shares in the same manner as
contemplated by the Initial Registration Statement for the Shares covered
thereby (each, an "Additional Resale Registration Statement"); provided that,
except as provided for in Section 5 of the Agreement, prior to issuing any such
excess Shares to the Xxxxxxx Xxxxx Parties, the Companies shall cause such
Resale Registration Statement to have become effective. For purposes of this
Purchase Agreement, "Resale Registration Statement" means the Initial Resale
Registration Statement,
15
any Additional Resale Registration Statement or any other registration statement
under the Securities Act on Form S-3 covering the resale by the Xxxxxxx Xxxxx
Parties of up to a specified number of Shares, filed and maintained continuously
effective by the Companies pursuant to the provisions of this Section 7,
including the prospectus contained therein (the "Resale Prospectus"), any
amendments and supplements to such registration statement, including all post-
effective amendments thereto, and all exhibits and all material incorporated by
reference into such registration statement;
(b) use commercially reasonable best efforts to prevent the
issuance of any order suspending the effectiveness of such Resale Registration
Statement or Resale Prospectus or suspending the qualification (or exemption
from qualification) of any of the Shares in any jurisdiction;
(c) prepare and file with the Commission such amendments and
supplements to each Resale Registration Statement and the Resale Prospectus as
may be reasonably requested by the Xxxxxxx Xxxxx Parties in order to accomplish
the public resale or other disposition of any Shares in accordance with the
terms of the Agreement, or as may be necessary to keep such Resale Registration
Statement effective until the date on which either (i) the Shares covered
thereby have been sold by or on behalf of the Xxxxxxx Xxxxx Parties or (ii) the
Xxxxxxx Xxxxx Parties have advised the Companies that they no longer require
that such Resale Registration Statement remain effective;
(d) furnish to the Xxxxxxx Xxxxx Parties with respect to the
Shares registered under any Resale Registration Statement such reasonable number
of copies of Resale Prospectuses, including any supplements and amendments
thereto, in order to facilitate the public sale or other disposition of all or
any of the Shares by the Xxxxxxx Xxxxx Parties;
(e) in order to facilitate the public sale or other
disposition of all or any of the Shares by the Xxxxxxx Xxxxx Parties, furnish to
the Xxxxxxx Xxxxx Parties with respect to the Shares registered under any Resale
Registration Statement, in connection with any such public sale or other
disposition, an opinion of counsel to the Companies covering such matters as are
customarily covered by legal opinions delivered in connection with secondary
public offerings of equity
16
securities and such other documents as the Xxxxxxx Xxxxx Parties may reasonably
request (including a comfort letter from the Companies' independent certified
public accountants and a certificate of bring down of representations and
warranties in connection with sale of Shares under the Resale Registration
Statement) (collectively, the "Resale Closing Documents") (i) upon the
effectiveness of the Initial Resale Registration Statement, (ii) upon the
commencement of any continuous offering of Shares under any Resale Registration
Statement and on the last day of every 30-day period thereafter for the duration
of such continuous offering, and (iii) in the event the public sale or other
disposition of the Shares is effected through an underwritten offering or a
block trade, as of the date of the closing of any sale of such Shares or date of
pricing with respect to the sale of such Shares, as applicable upon prior notice
from the Xxxxxxx Xxxxx Parties to the Companies as to which date applies;
provided, however, that the Companies shall not be required to deliver any
Resale Closing Documents in the event that the aggregate offering price of any
Shares offered in a public sale or other distribution is less than $20,000,000,
unless as of the date of any such public sale or other distribution, the
Companies have not made any previous delivery of Resale Closing Documents to the
Xxxxxxx Xxxxx Parties in connection with any other public sale or other
disposition of the Shares;
(f) use its reasonable best efforts to prevent the happening
of any event that would cause any such Resale Registration Statement to contain
a material misstatement or omission or to be not effective and continuously
useable for resale of the Shares during the period that such Resale Registration
Statement is required to be effective and useable;
(g) file documents required of the Companies for normal blue
sky clearance in states specified in writing by the Xxxxxxx Xxxxx Parties,
provided, however, that the Companies shall not be required to qualify to do
business or consent to service of process in any jurisdiction in which it is not
now so qualified or has not so consented;
(h) bear all reasonable expenses in connection with the
procedures in paragraphs (a) through (g) of this Section 7.1 and Section 7.2(a)
and the registration of the Shares pursuant to each Resale Registration
Statement, which
17
expenses shall not include brokerage or underwriting commissions and taxes of
any kind (including without limitation, transfer bonuses) with respect to any
disposition, sale or transfer of Shares sold by the Xxxxxxx Xxxxx Parties and
for any legal, accounting and other expenses incurred by the Xxxxxxx Xxxxx
Parties which expenses shall be borne by the Xxxxxxx Xxxxx Parties; and
(i) promptly file any necessary listing applications or
amendments to existing listing applications to cause any Shares registered under
any Resale Registration Statement to be listed or admitted to trading, on or
prior to the effectiveness of any Resale Registration Statement, on the New York
Stock Exchange or any national stock exchange or automated quotation system on
which the Paired Shares are then listed or traded.
7.2. Covenants in Connection With Registration.
(a) Each of the Companies hereby covenants with the Xxxxxxx Xxxxx
Parties that (i) such Company shall not file any Resale Registration Statement
or Resale Prospectus relating to the resale of the Shares or any amendment or
supplement thereto, unless a copy thereof shall have been first submitted to the
Xxxxxxx Xxxxx Parties and the Xxxxxxx Xxxxx Parties did not object thereto in
good faith (provided that if the Xxxxxxx Xxxxx Parties do not object within two
business days of receiving any such material, there shall be deemed to have been
no objection thereto); (ii) such Company shall immediately notify the Xxxxxxx
Xxxxx Parties of the issuance by the Commission of any stop order suspending the
effectiveness of such Resale Registration Statement or the initiation of any
proceedings for such purpose; (iii) such Company shall make every reasonable
effort to promptly obtain the withdrawal of any order suspending the
effectiveness of such Resale Registration Statement at the earliest possible
moment; (iv) such Company shall immediately notify the Xxxxxxx Xxxxx Parties of
the receipt of any notification with respect to the suspension of the
qualification of the Shares for sale under the securities or blue sky laws of
any jurisdiction or the initiation of any proceeding for such purpose; and (v)
such Companies shall as soon as practicable notify the Xxxxxxx Xxxxx Parties in
writing of the happening of any event or the failure of any event to occur or
the existence of any fact or otherwise which results in any Resale Registration
Statement, any amendment or post-effective amendment thereto, the Resale
Prospectus, any prospectus supplement, or any document incorporated therein
18
by reference containing an untrue statement of a material fact or omitting to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and promptly shall prepare, file with the
Commission and promptly furnish to the Xxxxxxx Xxxxx Parties a reasonable number
of copies of a supplement or post-effective amendment to such Resale
Registration Statement or the Resale Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Shares, the Resale Prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading provided that this
clause (v) shall in no way limit the Companies' right to suspend the right of
the Xxxxxxx Xxxxx Parties to affect sales under the Resale Registration
Statement during any Black-out Period as specified in Section 5.2 above.
(b) The Xxxxxxx Xxxxx Parties shall cooperate with the Companies in
connection with the preparation of the Resale Registration Statement and shall
furnish to the Companies, in a timely manner, all information in their
possession or reasonably obtainable by them and necessary for inclusion in the
Resale Registration Statement (including, without limitation, information
relating to the ownership by each of them of Paired Shares and the plan of
distribution).
(c) The Xxxxxxx Xxxxx Parties shall notify the Companies at least
two business days prior to the earlier of the date on which they intend to
commence effecting any resales of Shares under a Resale Registration Statement
or the date of pricing with respect to the public sale or other disposition of
any Shares under a Resale Registration Statement effected through an
underwritten offering or block trade and if the Companies do not, within such
two day period, advise the Xxxxxxx Xxxxx Parties of the existence of any facts
of the type referred to in Section 7.2(a) above, then the Companies shall be
deemed to have certified and represented to the Xxxxxxx Xxxxx Parties that no
such facts then exist and the Xxxxxxx Xxxxx Parties may rely on such certificate
and representations in making such sales. The preceding sentence shall in no way
limit the Companies' obligations under Section 7.2(a) above.
(d) the Companies shall cooperate with the Xxxxxxx Xxxxx Parties to
facilitate the timely preparation and delivery of certificates representing the
Shares to be sold under the Resale Registration Statements and not bearing any
restrictive legends and in such denominations and registered in such names as
the Xxxxxxx Xxxxx Parties may reasonably request at least two business days
prior to the closing of any sale of the Shares.
(e) If the Companies notify the Xxxxxxx Xxxxx Parties that they wish
the Xxxxxxx Xxxxx Parties to effect an underwritten offering or block trade of
Shares, (i) the Xxxxxxx Xxxxx Parties shall have the right to select the
managing underwriters or the executing dealer, as the case may be, who shall be
subject to the approval of the Companies, which approval shall not be
unreasonably withheld (it being understood that Xxxxxxx Xxxxx is, in any event,
reasonably acceptable to the Companies for this purpose) and (ii) the Companies
shall (A) enter into written agreements (including underwriting agreements) as
are customary in underwritten offerings or block trades, as the case may be; (B)
obtain an opinion of counsel to the Companies and other entities reasonably
requested by the underwriters or the executing dealer, as the case may be, and
updates thereof (which may be in the form of a reliance letter) in form and
substance reasonably satisfactory to the managing underwriters or the executing
19
dealer, as the case may be, and the Xxxxxxx Xxxxx Parties addressed to the
underwriters or the executing dealer, as the case may be, and the Xxxxxxx Xxxxx
Parties covering the matters customarily covered in opinions requested in
underwritten offerings or block trades, as the case may be, and such other
matters as may be reasonably requested by such underwriters or the executing
dealer, as the case may be, and the Xxxxxxx Xxxxx Parties (it being agreed that
the matters to be covered by such opinion may be subject to customary
qualifications and exceptions); (C) obtain "cold comfort" letters and updates
thereof in form and substance reasonably satisfactory to the managing
underwriters or the executing dealer, as the case may be, and the Xxxxxxx Xxxxx
Parties from the independent certified public accountants of the Companies (and,
if necessary, other independent certified public accountants of any affiliate or
Subsidiary of either of the Companies or of any business acquired by the
Companies for which financial statements and financial data are, or are required
to be, included in the Resale Registration Statement), addressed to each of the
underwriters or the executing dealer, as the case may be, and, if permitted by
applicable accounting rules and statements, the Xxxxxxx Xxxxx Parties, such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten offerings or
block trades, as the case may be, and such other matters as may be reasonably
requested by such underwriters or the executing dealer, as the case may be, in
accordance with Statement on Auditing Standards No. 72; (D) ensure that any
underwriting agreement contains indemnification provisions and procedures not
less favorable than that included herein (or such other provisions and
procedures acceptable to the Xxxxxxx Xxxxx Parties and the underwriters) with
respect to all parties to be indemnified pursuant to said section (including,
without limitation, the underwriters and the Xxxxxxx Xxxxx Parties); and (E)
deliver such other documents as are customarily delivered in connection with
closing of underwritten offerings or block trades, as the case may be.
(f) The Companies will make reasonably available for inspection by
the Xxxxxxx Xxxxx Parties, any underwriter, agent or broker-dealer participating
in any disposition of Shares such information and corporate documents as shall
be reasonably necessary to enable them to exercise any applicable due diligence
responsibilities for the purposes of applicable law, and cause the officers of
the Companies and their "significant subsidiaries" (as that term is defined in
Regulation S-X) to be available, upon request at least two business days in
advance, to respond to questions relevant to such due diligence inquiries.
(g) The parties hereby acknowledge and agree that the Companies may
suspend the right of the Xxxxxxx Xxxxx Parties to effect sales of the Paired
Shares through use of the Resale Prospectus forming a part of a Resale
Registration Statement for a period of 90 days (or fewer if the Xxxxxxx Xxxxx
Parties are notified to that effect by the Companies) in connection with a
public offering or a sale pursuant to Rule 144A under the Securities Act (an
"Offering") of Paired Shares (or shares of capital stock convertible into Paired
Shares) by the Companies (a "Suspension Period"); provided that (i) there shall
be no more than three Suspension Periods during any 12-month period, and (ii)
the total number of days of all Suspension Periods during
20
any 12-month period shall not exceed 120. The Xxxxxxx Xxxxx Parties hereby
covenant that they will not sell any Paired Shares pursuant to said Resale
Prospectus during a Suspension Period which shall commence at the time the
Companies give the Xxxxxxx Xxxxx Parties written notice of such Suspension
Period; provided further, that no Suspension Period shall be applicable or in
any way restrict the Xxxxxxx Xxxxx Parties after the occurrence of the Maturity
Date or a Price Decline Termination Event. The ability of the Companies to
suspend the right of the Xxxxxxx Xxxxx Parties to effect sales of the Paired
Shares pursuant to this Section 7.2(g) shall not be construed to limit the
Companies' rights under Section 5.2.
7.3. Extension of Required Effectiveness. In the event that the
Companies shall give any notice required by Section 7.2(a)(v) hereof, the period
during which the Companies are required to keep such Resale Registration
Statement effective and useable shall be extended by the number of days during
the period from and included in such Black-out Period.
7.4. Transfer of Shares After Registration. The Xxxxxxx Xxxxx
Parties agree that they will not effect any disposition of the Shares or their
right to purchase the Shares that would constitute a sale within the meaning of
the Securities Act or pursuant to any applicable state securities or blue sky
laws expect as contemplated in each Resale Registration Statement referred to in
Section 7.1 or except pursuant to any exemption from the registration
requirements of the Securities Act (including, without limitation, Rule 144
promulgated thereunder and any successor thereto) and that it will promptly
notify the Companies of any changes in the information set forth in any such
Resale Registration Statement regarding the Xxxxxxx Xxxxx Parties or their plan
of distribution.
7.5. Indemnification. For the purpose of this Section 7.5 only, the
term "Resale Registration Statement" shall include any final prospectus,
exhibit, supplement or amendment included in or relating to any Resale
Registration Statement referred to in Section 7.1.
(a) Indemnification by the Companies. Each of the Companies agrees,
severally and not jointly, to indemnify and hold harmless the Xxxxxxx Xxxxx
Parties and each person, if any, who controls the Xxxxxxx Xxxxx Parties within
the meaning of Section 15 of the Securities Act, and any director, officer,
employee or affiliate thereof, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Resale Registration
Statement (or any amendment thereto), including the information deemed to be
part of any Resale Registration Statement pursuant to Rule 430A(b) of the 1933
Act Regulations, if applicable, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising
21
out of any untrue statement or alleged untrue statement of a material fact
contained in any related Resale Prospectus or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the Companies shall not be required under this
subsection (i) to indemnify the Xxxxxxx Xxxxx Parties with respect to any loss,
liability, claim, damage or expense to the extent such loss, liability, claim,
damage or expense arises out of (A) any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Companies by the Xxxxxxx Xxxxx Parties
specifically for inclusion in any Resale Registration Statement or any related
Resale Prospectus or (B) any statement or omission in any Resale Prospectus that
is corrected in any subsequent Resale Prospectus that was delivered to a Xxxxxxx
Xxxxx Party prior to the pertinent sale or sales by a Xxxxxxx Xxxxx Party and
not delivered in connection with such sale, when such delivery was required by
the Securities Act or any state securities law;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation or of any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
for which indemnification is provided under subsection (i) above, only if such
settlement is effected with the written consent of the Companies; and
(iii) against any and all expense whatsoever (including,
without limitation, the fees and other charges of counsel chosen by you)
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceedings by any governmental agency or
body, commenced or threatened, or any claim whatsoever for which indemnification
is provided under subsection (i) above, to the extent that any such expense is
not paid under subsection (i) (other than expenses not paid pursuant to the
proviso to subsection (i)) or (ii) above.
(b) Indemnification by the Xxxxxxx Xxxxx Parties. The Xxxxxxx Xxxxx
Parties agree to indemnify and hold harmless the Companies, and each person, if
any, who controls the Companies within the meaning of Section 15 of the
Securities Act, and any trustee, director, officer, employee or affiliate
thereof, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section 7.5, as
incurred, but only with respect to (A) untrue statements or omissions, or
alleged untrue statements or omissions, made in any Resale Registration
Statement (or any amendment thereto) or any related Resale Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Companies by the Xxxxxxx Xxxxx Parties specifically
for inclusion in any Resale Registration Statement or any related Resale
Prospectus or (B) any statement or omission in any Resale Prospectus that is
corrected in any subsequent Resale Prospectus that was delivered to a Xxxxxxx
Xxxxx Party prior to the pertinent sale or sales by a Xxxxxxx Xxxxx Party and
not delivered in connection with
22
such sale, when such delivery was required by the Securities Act or any state
securities law.
(c) Proceedings. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially prejudiced
as a result thereof and in any event shall not relive it from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. If it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action with counsel chosen by it and
reasonably acceptable to the indemnified parties defendant in such action,
unless such indemnified parties reasonably object to such assumption on the
ground that the named parties to any such action (including any impleaded
parties) include both such indemnified parties and an indemnifying party, and
such indemnified parties reasonably believe that there may be legal defenses
available to them which are different from or in addition to those available to
such indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7.5 (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 7.5(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
23
(d) Contribution. If the indemnification provided for in this
Section 7.5 is required by its terms but is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party
under paragraph (a), (b) or (c) of this Section 7.5 in respect of any losses,
claims, damages, liabilities or expenses referred to herein, then each
applicable indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of any losses, claims, damages, liabilities
or expenses referred to herein, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Companies and the Xxxxxxx Xxxxx
Parties from the purchase and sale of the Shares or (ii) if the allocation
provided in clause (i) is not permitted by applicable law, in such proportion or
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Companies and the Xxxxxxx
Xxxxx Parties in connection with the statements or omissions or inaccuracies in
the representations and warranties in this Purchase Agreement which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The respective relative benefits received by
the Companies on the one hand and the Xxxxxxx Xxxxx Parties on the other shall
be deemed to be in the same proportion as the amount paid by the Xxxxxxx Xxxxx
Parties to the Companies pursuant to this Purchase Agreement and the Agreement
and the net proceeds retained or discounts received by the Xxxxxxx Xxxxx Parties
from the transactions contemplated by this Purchase Agreement and the Agreement.
The relative fault of the Companies and the Xxxxxxx Xxxxx Parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or the alleged omission to
state a material fact or the inaccurate or the alleged inaccurate representation
and/or warranty relates to information supplied by the Companies or by the
Xxxxxxx Xxxxx Parties and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in paragraph (c) of this Section 7.5 any
reasonable legal or other fees or expenses incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in
paragraph (c) of this Section 7.5 with respect to notice of commencement of any
action shall apply if a claim for contribution is to be made under this
paragraph (d); provided, however, that no additional notice shall be required
with respect to any action for which notice has been given under paragraph (c)
for purposes of indemnification. The Companies and the Xxxxxxx Xxxxx Parties
agree that it would not be just and equitable if contribution pursuant to this
Section 7.5 were determined solely by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to in this paragraph (d). Notwithstanding the provisions of this
Section 7.5, the Xxxxxxx Xxxxx Parties shall not be required to contribute any
amount in excess of the amount by which the aggregate net proceeds retained or
discounts received by the Xxxxxxx Xxxxx Parties from the transactions
contemplated hereby and by the Agreement exceeds the amount of any damages that
the Xxxxxxx Xxxxx Parties has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or
24
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) Relationship Between the REIT and OPCO. The obligations set
forth in this Section 7.5 shall in no way limit the ability of the Companies to
allocate liability between themselves.
7.6. Information Available. So long as any Resale Registration
Statement covering the resale of any shares owned by the Xxxxxxx Xxxxx Parties
is effective, the Companies will furnish to the Xxxxxxx Xxxxx Parties:
(a) as soon as practicable after available, one copy of (i) their
Joint Annual Report to Shareholders, (ii) their Joint Annual Report on Form
10-K, (iii) their Joint Quarterly Reports to Shareholders, (iv) their Joint
Quarterly Reports on Form 10-Q, (v) a full copy of the particular Resale
Registration Statement covering the Shares (the foregoing, in each case,
excluding exhibits) and (iv) upon request, any or all other filings made with
the Commission by the Companies; and
(b) upon the reasonable request of the Xxxxxxx Xxxxx Parties, a
reasonable number of copies of the Resale Prospectuses to supply to any other
party requiring such Resale Prospectuses;
and the Companies, upon the reasonable request of the Xxxxxxx Xxxxx Parties,
will meet with the Xxxxxxx Xxxxx Parties or a representative thereof at the
Companies' headquarters to discuss all information relevant for disclosure in
such Resale Registration Statement covering the Shares, subject to appropriate
confidentiality limitations.
7.7. Remedies. The Companies and the Xxxxxxx Xxxxx Parties
acknowledge that there would be no adequate remedy at law if the Companies fail
to perform any of their obligations under this Section 7, and accordingly agree
that the Xxxxxxx Xxxxx Parties, in addition to any other remedy to which it may
be entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of the Companies under this Section 7, and the
Companies hereby waive the defense that a remedy at law would be adequate.
7.8. Notice Requirement. The REIT and the OPCO each covenants and
agrees that it will notify the Xxxxxxx Xxxxx Parties at any time it becomes
aware that as a result of a change in the REIT's and the OPCO's capital stock,
the Xxxxxxx Xxxxx Parties beneficially hold more than 4.9% of the REIT's and the
OPCO's Paired Shares.
SECTION 8. Broker's Fee. Other than any fees payable under or in
25
connection with the Agreement, each of the parties hereto represents that, on
the basis of any actions and agreements by it, there are no brokers or finders
entitled to compensation in connection with the sale or issuance of the Shares
to Xxxxxxx Xxxxx.
SECTION 9. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, by telegram or telecopy or sent by nationally
recognized overnight express courier postage prepaid, and shall be deemed given
when so mailed or for telecopies, when transmitted and receipt confirmed, and
shall be delivered as addressed as follows:
(a) if to the Companies, to:
Starwood Hotels & Resorts
Starwood Hotels & Resorts Worldwide, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxx 000 and 410
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx/Xxxx X. Xxxxxxx
Telecopier: 000-000-0000
with copies so mailed to:
Sidley & Austin
000 Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopier: 000-000-0000
or to such other person at such other place as the Companies
shall designate to Xxxxxxx Xxxxx in writing; and
(b) if to Xxxxxxx Xxxxx or MLI, to:
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxx
SECTION 10. Changes. This Purchase Agreement may not be modified or
amended except pursuant to an instrument in writing signed by each of the
26
Companies and the Xxxxxxx Xxxxx Parties.
SECTION 11. Headings. The headings of the various sections of this
Purchase Agreement have been inserted for convenience of reference only and
shall not be deemed to be part of this Purchase Agreement.
SECTION 12. Severability. In case any provision contained in this
Purchase Agreement should be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
SECTION 13. Successors and Assigns. The Companies or the Xxxxxxx
Xxxxx Parties may assign any of their respective rights, or delegate any of
their respective duties under this Purchase Agreement, if the other party first
consents to such assignment in writing. This Purchase Agreement shall inure to
the benefit of and be binding upon (i) the successors of the Xxxxxxx Xxxxx
Parties and (ii) any assignee or transferee of rights and obligations of MLI
pursuant to the Agreement and any assignee or transferee of rights and
obligations of the Xxxxxxx Xxxxx Parties pursuant to this Purchase Agreement. A
transferee of MLI pursuant to the Agreement and a transferee of the Xxxxxxx
Xxxxx Parties pursuant to this Purchase Agreement, and, in each case, any
successor, assignee, or transferee, shall be held subject to all of the terms of
this Purchase Agreement.
SECTION 14. Governing Law; Jurisdiction. This Purchase Agreement
shall be governed by and construed in accordance with the laws of the State of
New York without regard to the conflicts of law principles thereof.
SECTION 15. Transfer to Affiliate. Notwithstanding anything herein
to the contrary, MLI may transfer the Purchase Shares to any affiliate of MLI,
together with all of MLI's rights hereunder, provided that (i) such affiliate
shall be an "accredited investor" within the meaning of Rule 501 (a)(1), (2),
(3) or (7) of Regulation D promulgated under the Securities Act, and (ii) such
transfer shall be consistent with the investment representations set forth at
Section 5.1 hereto. In the event of such an assignment, such affiliate shall in
all respects be substituted for MLI as a party hereto.
SECTION 16. Counterparts. This Purchase Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties.
SECTION 17. Recourse. Each Xxxxxxx Xxxxx Party acknowledges and
agrees that the name "Starwood Hotels & Resorts" is a designation of the REIT
and its Trustees (as Trustees but not personally) under a Declaration of Trust
dated August 25, 1969, as amended and restated as of June 6, 1988, as further
amended on February 1,
27
1995, June 19, 1995, January 2, 1998 and February 23, 1998 and as the same may
be further amended from time to time, and all persons dealing with the REIT
shall look solely to the REIT's assets for the enforcement of any claims against
the REIT, as the Trustees, officers, agents and security holders of the REIT
assume no personal liability for obligations entered into on behalf of the REIT,
and their respective individual assets shall not be subject to the claims of any
person relating to such obligations.
28
IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
STARWOOD HOTELS & RESORTS
By:
Name:
Title:
STARWOOD HOTELS & RESORTS
WORLDWIDE, INC.
By:
Name:
Title:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
Name:
Title:
XXXXXXX XXXXX INTERNATIONAL
By:
Name:
Title:
29
Appendix I
(one of two)
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 5 of the Purchase Agreement, please provide us with
the following information:
1. The exact name that your Shares are to be registered in (this is the
name that will appear on your stock certificate(s)). You may use a
nominee name if appropriate:
____________________________________
2. All relationships between the Xxxxxxx Xxxxx Parties and the
Registered Holder listed in response to Item 1 above:
____________________________________
____________________________________
3. The mailing address of the Registered Holder listed in response to
Item 1 above:
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
4. The Social Security Number or Tax Identification Number of the
Registered Holder listed in response to Item 1 above:
____________________________________
30
Appendix I
(two of two)
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information:
1. Pursuant to the "Selling Shareholders" section of the Registration
Statement, please state your or your organization's name exactly as it should
appear in the Registration Statement:
2. Please provide the number of shares that you or your organization
(including all affiliates) will own immediately after Closing, including those
Shares purchased by you or your organization (including all affiliates) pursuant
to this Purchase Agreement and those shares purchased by you or your
organization (including all affiliates) through other transactions:
3. Have you or your organization had any position, office or other
material relationship within the past three years with the Company or its
affiliates:
_____ Yes _____ No
If yes, please indicate the nature of any such relationships below:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
31
Appendix II
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, [an officer of, or other person duly authorized by]
______________________________ hereby certifies that he/she [fill in official
name of individual or institution] [said institution] is the Purchaser of the
shares evidenced by the attached certificate, and as such, sold such shares on
[date] in accordance with Registration Statement number [fill in the number of
or otherwise identify Registration Statement], the Securities Act of 1933, as
amended, and any applicable state securities or blue sky laws and the
requirement of delivering a current prospectus by the Company has been complied
with in connection with such sale.
Print or Type:
NAME OF PURCHASER
(Individual or Institution):
NAME OF INDIVIDUAL
representing Purchaser
(if an Institution)
TITLE OF INDIVIDUAL
representing Purchaser
(if an Institution)
Signature by:
Individual Purchaser
or Individual representing
Purchaser:
32
EXHIBIT A
FORM OF CLOSING OPINION OF COUNSEL TO THE COMPANY
33
AGREEMENT
THIS AGREEMENT is made as of the 23rd day of February, 1998, by and
between Starwood Hotels & Resorts (the "REIT"), Starwood Hotels & Resorts
Worldwide, Inc. ("OPCO," and together with the REIT, the "Companies") and
Xxxxxxx Xxxxx International ("MLI"), through its agent Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated ("MLPF&S").
The purpose of this Agreement is to confirm the terms and conditions of
the transaction (the "Transaction") entered into between MLI and the Companies.
IN CONSIDERATION of the mutual representations, warranties and
covenants herein contained, and on the terms and subject to the conditions
herein set forth, the Companies and MLI hereby agree as follows:
Section 1 Definitions.
As used in this Agreement, the following terms shall have the meanings
set forth below:
(a) Ability to Settle in Paired Shares. As of the date hereof,
the Companies have not, and after the date hereof, the Companies will
not, enter into any obligation that would contractually prohibit the
Companies from delivering Paired Shares pursuant to Sections 3.2, 4.2
or 5 of this Agreement.
(b) Certain Adjustments to Reference Price or Number of
Notional Shares. In the event of:
(i) a subdivision, consolidation or reclassification
of the Paired Shares, or a free distribution or
dividend of any Paired Shares to all existing holders
of Paired Shares by way of bonus, capitalization or
similar issue; or
(ii) a distribution or dividend to all existing
holders of Paired Shares of (A) additional Paired
Shares or (B) other share capital or securities
granting right to payment of dividends and/or the
proceeds of liquidation of the Companies equally or
proportionally with such payments to holders of
Paired Shares,
an adjustment shall thereupon be effected to the
Reference Price and/or the Notional Shares at the
time of such event with the intent that following
such adjustment, the value of this Transaction is
economically equivalent to the value immediately
prior to the occurrence of the event causing the
adjustment.
34
(c) Block Sale. any privately negotiated sales of the Paired
Shares involving at least a block of such security (as defined in Rule
10b-18 under the Exchange Act).
(d) Business Day. Any day other than a Saturday, Sunday, or
any other day on which banking institutions in the States of Delaware
or New York are not open for business.
(e) Calculation Agent. MLI, whose calculations and
determinations shall be made in a reasonable manner.
(f) Closing Price. The last sale price of the Paired Shares on
the Relevant Exchange on the relevant date.
(g) Commission. The Securities and Exchange Commission.
(h) Compounding Period. Means each period commencing on and
including:
(i) in the case of the first Compounding Period, the
Initial Settlement Date and ending on but excluding
the first Reset Date, and
(ii) for each period thereafter, a Reset Date and
ending on (but excluding) the next following Reset
Date.
(i) Distribution Amount. Means, on each Reset Date, an amount
in U.S. Dollars equal to:
(i) the sum of all cash distributions paid on a
single Paired Share during the relevant Compounding
Period; plus
(ii) an amount representing interest that could have
been earned on such distributions at the USD LIBOR
rate having a designated maturity of three months,
plus Spread, for the period from the date that such
distributions would have been received by a holder of
a single Paired Share until such Reset Date.
(j) DRIP Distribution. Sales to any Distribution Reinvestment
Plan now or hereafter established by the Companies, or to any agent
acting on behalf of such Plan, for sale to participants in such Plan.
(k) Effective Date. February 24, 1998.
35
(l) Exchange Act. The Securities Exchange Act of 1934, as
amended.
(m) Exchange Trading Day. Each day on which the Relevant
Exchange is open for trading.
(n) Execution Price. The Closing Price on the Effective Date`.
(o) Gradual Market Distribution. An offering of the Paired
Shares into the existing trading market for outstanding shares of the
same class at other than (i) a fixed price on or through the facilities
of a national securities exchange or (ii) to or through a market maker
otherwise than on an exchange.
(p) Initial Price. Means,
(i) for the Compounding Period ending on the first
Reset Date, an amount in U.S. Dollars equal to
$53.875, and
(ii) for each subsequent Reset Date, the Reference
Price as calculated on or adjusted as of the prior
Reset Date.
(q) Initial Settlement Date. February 24, 1998.
(r) Interim Settlement Amount. With respect to a given Reset
Date, means the amount by which the Reference Amount minus $5,000,000
exceeds the product of (x) the Closing Price on such Reset Date and (y)
the number of Notional Shares.
(s) Interim Settlement Shares. The Interim Settlement Amount
divided by the Closing Price on such Reset Date.
(t) Maturity Date. March 1, 1999.
(u) Notional Shares. 1,547,000 Paired Shares, as may be
adjusted from time to time pursuant to Section 1(b), reduced by the
number of Settlement Shares that have been settled prior to the date of
calculation pursuant to Section 3.1 or Section 4.1.
(v) Paired Shares. Units consisting of one share of beneficial
interest, $.01 par value per share, in the REIT and one share of common
stock, par value $.01 per share, of OPCO, which shares are paired and
traded as a unit.
(w) Pooled Underwritten Secondary Offering. An underwritten
fixed price offering of Paired Shares, in which the Settlement Shares
and other Paired Shares, which may include the Paired Shares of other
selling shareholders and previously unissued Paired Shares.
36
(x) Pooling Exit Fee. 50 basis points on the Settlement Amount
in connection with the related Pooled Underwritten Secondary Offering.
(y) Purchase Shares. Paired Shares sold to MLI pursuant to the
Purchase Agreement.
(z) Purchase Agreement. The Purchase Agreement, dated as of
February 23, 1998 (the "Purchase Agreement"), among the Companies, MLI
and MLPF&S
(aa) Reference Amount. On each Reset Date, the Reference Price
multiplied by the Notional Shares or Settlement Shares, as applicable.
(bb) Reference Price. On each Reset Date, the Reference Price
shall be determined by:
(i) compounding the Initial Price for the previous
Compounding Period at USD LIBOR rate plus Spread for
a designated maturity of three months (Actual/360 day
count fraction) to such Reset Date and
(ii) subtracting the Distribution Amount at that
date.
(cc) Relevant Exchange. Means, with respect to any Exchange
Trading Day, the principal Stock Exchange on which the Paired Shares
are traded on that day.
(dd) Reset Date. Means, through the final Trade Date, (i) the
last day of each three-month period, beginning on May 31, 1998
(provided, that if such day is not a Business Day then the Reset Date
shall be the next Business Day), (ii) as to any Settlement Shares, but
only as to such Settlement Shares, the related Trade Date and (iii) as
to any Gross Settlement Shares, but only as to such Gross Settlement
Shares, the Exchange Trading Day immediately prior to the date on which
the related Gross Settlement Notice is delivered.
(ee) Securities Act. The Securities Act of 1933, as amended.
(ff) Settlement. Has the meaning set forth in Section 3.1 or
Section 4.1, as applicable.
(gg) Settlement Amount. Except as set forth in subsection (iv)
below, the net sales proceeds realized by or on behalf of MLI for all
sales of Paired Shares in connection with any Settlement, calculated as
follows:
(i) if the manner of Settlement Sale pursuant to
Section 3.1 or
37
4.1 is an Underwritten Secondary Offering, the
Settlement Amount will equal the gross proceeds
realized, net of a negotiated underwriting discount;
(ii) if the manner of Settlement Sale pursuant to
Section 3.1 or 4.1 is a Block Sale, the Settlement
Amount will equal the gross sales proceeds realized,
net of a negotiated underwriting discount;
(iii) if the manner of Settlement Sale pursuant to
Section 3.1 or 4.1 is a Gradual Market Distribution,
the Settlement Amount will equal the gross sales
proceeds realized from sales to the market over the
period of the distribution, net of a resale spread of
50 basis points;
(iv) with respect to a given Trade Date, if the
manner of Settlement Sale pursuant to Section 3.1 or
4.1 is a VWAP Sale, the Settlement Amount will equal
the product of (a) the volume weighted average price
of the Paired Shares for such Trade Date and (b) the
number of Paired Shares determined by the Company to
be sold by MLI on such Trade Date, net of a resale
spread of 50 basis points;
(v) if the manner of Settlement Sale pursuant to
Section 3.1 or 4.1 is a DRIP Distribution, the
Settlement Amount will equal the gross sales proceeds
realized from sales to any Purchase Agent for a
Company Distribution Reinvestment Plan, net of a
resale spread of 50 basis points; and
(vi) if the manner of Settlement Sale pursuant to
Section 3.1 or 4.1 is a Pooled Underwritten Secondary
Offering, the Settlement Amount will equal a pro rata
share of the gross proceeds realized, net of a
negotiated
underwriting discount.
(hh) Settlement Date. The date after each Trade Date on which,
in accordance with standard market practice, any Paired Shares are
delivered and the funds received, in respect of any Settlement in
accordance with Section 3.2 or Price Decline Termination Event in
accordance with Section 4.2.
(ii) Settlement Shares. The number of Notional Shares which
will be settled on a given Settlement Date pursuant to Section 3.2 or
Section 4.2, as applicable.
(jj) Spread. 175 basis points, subject to adjustment pursuant
to Section 6.3.
38
(kk) Stock Exchange. Means the New York Stock Exchange, the
American Stock Exchange or NASDAQ.
(ll) Trade Date. Any date on which MLI executes a settlement
trade or trades as part of a Settlement in any of the manners of
Settlement Sale set forth in Section 3.1, pursuant to either Section
3.1 or 4.1.
(mm) Underwritten Secondary Offering. An underwritten fixed
price offering of the Paired Shares.
(nn) USD LIBOR. The London Inter Bank Offered Rate in respect
of U.S. Dollars for the designated maturity as quoted on Page 3750 on
the Telerate Service (or such other page as may replace Page 3750 on
that service) as of 11:00 a.m., London time, on the date on which it is
to be determined.
(oo) VWAP Sale. A sale of the Paired Shares into the existing
trading market for outstanding shares of the same class effected in
order to approximate the volume weighted average price of the Paired
Shares on the Relevant Exchange on the relevant date.
39
Section 2 Representations and Warranties.
The representations and warranties of the Companies in Section 4 of the
Purchase Agreement are hereby incorporated by reference herein, and
each Company hereby so represents and warrants to MLI, and the
representations and warranties of the Xxxxxxx Xxxxx Parties in Section
5 of the Purchase Agreement are hereby incorporated by reference, and
the MLI hereby so represents and warrants to each Company. The
provisions of Section 6 of the Purchase Agreement shall also be
applicable to any Paired Shares delivered to MLI under this Agreement.
Section 3 Settlement.
3.1 Settlement Sale.
On any Reset Date of the type referred to in clause (i) of the
definition of Reset Date, on any Exchange Trading Day that is one month
or two months following such a Reset Date or on any other Exchange
Trading Day (in each case, if other than such a Reset Date, the related
Settlement (as defined below) will include standard market interest
breakage fees), up to and including the Maturity Date, the Companies
may give telephonic notice to MLI to settle, and MLI shall settle, in a
commercially reasonable manner (which may require sales over a period
of more than 1 day), all or a portion of the Notional Shares to be
settled on the related Settlement Date or Dates, as specified by the
Companies ("Settlement"), through sale of not less than the number of
Paired Shares, the sale of which would result in a Settlement Amount
equal to 100% of the Reference Amount on the Settlement Date, and not
more than the number of Paired Shares, the sale of which would result
in a Settlement Amount equal, to 105% of the Reference Amount on the
Settlement Date, in any of the manners set forth below, as selected by
the Companies:
(i) an Underwritten Secondary Offering (for which the
Companies shall provide at least 21 Business Days
prior notice to MLI);
(ii) a Block Sale (for which the Companies shall
provide at least 3 Business Days prior notice to
MLI);
(iii) a Gradual Market Distribution (for which the
Companies shall provide at least 1 Business Day prior
notice to MLI);
(iv) a VWAP Sale (for which the Companies shall
provide at least 1 Business Day prior notice to MLI);
(v) a DRIP Distribution (for which the Companies
shall provide at
40
least 1 Business Day prior notice to MLI); or
(vi) a Pooled Underwritten Secondary Offering (for
which the Companies shall provide at least 21
Business Day prior notice to MLI).
If the Companies do not specify a manner of sale, a Gradual Market
Distribution shall be used. If the Paired Shares delivered by the
Companies to MLI pursuant to the Purchase Agreement and this Agreement
are not, on the applicable trade date, the subject of an Effective
Resale Registration Statement (as defined in Section 6.3), the
Companies may not select a VWAP Sale as the manner of Settlement. The
number of shares sold as part of a VWAP Sale on any Trade Date shall
not be less than 20% of the six-month daily average trading volume of
the Paired Shares as calculated by the Calculation Agent and shall not
exceed 40% of the six-month daily average trading volume of the Paired
Shares as calculated by the Calculation Agent, unless both parties
agree otherwise prior to the execution of any trades in connection with
such VWAP Sale. In connection with any Underwritten Secondary Offering
or Block Sale, MLPF&S shall be the sole manager and underwriter. In
connection with a Pooled Underwritten Secondary Offering, MLI and
MLPF&S may, in their discretion, elect to (a) participate in such
offering as a first-tier co-manager on the same terms as all other
first-tier co-managers or (b) receive the Pooling Exit Fee; provided,
however, that regardless of the election of MLI and MLPF&S, all of the
Notional Shares shall be included in the Pooled Underwritten Secondary
Offering. Settlement procedures shall begin as soon as commercially
practicable, as determined by MLI, after MLI receives notice from the
Companies and no later than the first Exchange Trading Day after
expiration of the notice period unless otherwise agreed by the
Companies and MLI. At such time as the Companies deliver notice
pursuant to this Section 3.1, the Companies may direct MLI to sell not
less than the number of Paired Shares equal to the number of Settlement
Shares, and MLI shall comply with such direction in a commercially
reasonable manner. In connection with a Gradual Market Distribution,
there shall be a separate Settlement Date for each Trade Date. Final
Settlement shall occur no later than the Maturity Date. However, if the
Companies have not given MLI notice to settle by the Maturity Date,
then MLI shall settle the Notional Shares using a Gradual Market
Distribution to begin as soon as commercially practicable, as
determined by MLI, on or after the Maturity Date.
3.2 Settlement.
(a) If, on a Settlement Date, the Settlement Amount is greater
than the Reference Amount, MLI, on such Settlement Date, will pay the
Companies an amount in cash or Paired Shares (valued at the Closing
Price on the Trade Date), at the election of the Companies, equal to
the difference.
(b) If the number of Paired Shares sold by MLI pursuant to
Section 3.1
41
is greater than the number of Settlement Shares, the Companies shall
deliver to MLI, on the Settlement Date, a number of Paired Shares equal
to the difference. If the number of Paired Shares sold by MLI pursuant
to Section 3.1 is less than the number of Settlement Shares, MLI shall
deliver to the Companies, on the Settlement Date, a number of Paired
Shares equal to the difference.
(c) In all events, MLI will pay to the Companies an amount
equal to all cash distributions payable to MLI but not paid prior to
the Settlement Date, on a number of Paired Shares equal to the
Settlement Shares on the Business Day after the relevant distribution
payment date declared by the Board of Directors of the REIT and OPCO.
(d) If MLI, in connection with any Settlement, receives net
sales proceeds, as calculated pursuant to the definition of Settlement
Amount, from the sale of Paired Shares prior to the applicable
Settlement Date, MLI, on the Settlement Date, shall pay the Companies
an amount in cash representing interest that could have been earned on
such net sales proceeds at the USD LIBOR rate having a designated
maturity of three months, plus Spread, for the period from the date
that such net sales proceeds are received by MLI until such Settlement
Date.
3.3 Gross Share Settlement.
(a) The Companies may elect, in their sole discretion, to
settle all or any portion of the then outstanding Notional Shares by
delivering Paired Shares in exchange for such number of Notional Shares
(a "Gross Share Settlement"). The Companies may effect a Gross Share
Settlement by delivering a written notice (the "Gross Settlement
Notice") to MLI indicating the date of such Gross Share Settlement and
the number of then outstanding Notional Shares subject to such Gross
Share Settlement; provided that such notice must be accompanied by a
notice pursuant to Section 3.1 to effect settlement of all Paired
Shares delivered pursuant to this Section 3.3(a). To effect a Gross
Share Settlement, MLI Shall deliver to the Companies the number of
Notional Shares subject to such Gross Share Settlement ("Gross
Settlement Shares") against delivery by the Companies to MLI of a
number of Paired Shares equal to the product of (i) the number of Gross
Settlement Shares and (ii) the quotient obtained by dividing (A) the
Reference Price by (B) the Closing Price, in each case, on the Reset
Date for such Gross Settlement Shares. The deliveries set forth in the
immediately preceding sentence shall be made on the Exchange Trading
Day immediately following the date on which the Gross Settlement Notice
is delivered. All Paired Shares delivered to the Companies by MLI as
part of a Gross Share Settlement shall be immediately retired and shall
cease to be issued and outstanding Paired Shares.
(b) For purposes of the Settlement of the Paired Shares
delivered to
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MLI pursuant to Section 3.3(a), the Settlement Shares shall be deemed
to be equal to the Gross Settlement Shares, provided that for purposes
of Section 3.2(b), the Settlement Shares shall be deemed to be equal to
the Paired Shares so delivered to MLI pursuant to Section 3.3(a), and
provided further that, for purposes of Section 3.2(c), with respect to
any distribution payable to MLI but not paid prior to the Settlement
Date for which the record date occurs after the date on which the Gross
Settlement Notice is delivered, the Settlement Shares shall be deemed
to be equal to the Paired Shares delivered to MLI pursuant to Section
3.3(a).
(c) The amount of any distribution referred to in clause (i)
of the definition of Distribution Amount for which the record date
occurs after a Gross Share Settlement with respect to the Paired Shares
delivered to MLI pursuant to Section 3.3 shall be multiplied by the
quotient obtained in clause (ii) of Section 3.3(a).
Section 4 Price Decline Termination Event.
4.1 Price Decline Termination Event Sale.
If the Closing Price on any Exchange Trading Day falls below any
Termination Price listed in the following schedule ("Price Decline
Termination Event"), MLI will, at its discretion, in a commercially
reasonable manner (which may require sales over a period of more than 1
day) following notice to the Companies, settle the percentage of the
Notional Shares indicated in the table below ("Settlement") through
sale of not less than the number of Paired Shares, the sale of which
would result in a Settlement Amount equal to 100% of the Reference
Amount on the Settlement Date, and not more than the number of Paired
Shares, the sale of which would result in a Settlement Amount equal to
105% of the Reference Amount on the Settlement Date, in any of the
manners specified in Section 3.1, as specified by the Companies:
Percentage of Initial
Notional Shares to be
Settled Termination Price
------- -----------------
25% $37.7125
50% $35.0188
75% $33.6719
100% $32.3250
Settlement procedures shall commence on the date specified by MLI.
4.2 Price Decline Termination Event Settlement.
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(a) If, on the Settlement Date, the Settlement Amount is
greater than the Reference Amount, MLI, on the Settlement Date, will
pay the Companies an amount in cash or Paired Shares (valued at the
Closing Price on the Trade Date), at the election of the Companies,
equal to the difference.
(b) If the number of Paired Shares sold by MLI pursuant to
Section 4.1 is greater than the number of Settlement Shares, the
Companies shall deliver to MLI, on the Settlement Date, a number of
Paired Shares equal to the difference. If the number of Paired Shares
sold by MLI pursuant to Section 4.1 is less than the number of
Settlement Shares, MLI shall deliver to the Companies, on the
Settlement Date, a number of Paired Shares equal to the difference.
(c) In all events, MLI will pay to the Companies an amount
equal to all cash distributions payable to MLI but not paid prior to
the Settlement Date, on a number of Paired Shares equal to the
Settlement Shares on the Business Day after the relevant distribution
payment date declared by the Boards of Directors of the REIT and OPCO.
(d) If MLI, in connection with any Settlement, receives net
sales proceeds, as calculated pursuant to the definition of Settlement
Amount, from the sale of Paired Shares prior to the applicable
Settlement Date, MLI, on the Settlement Date, shall pay the Companies
an amount in cash representing interest that could have been earned on
such net sales proceeds at the USD LIBOR rate having a designated
maturity of three months, plus Spread, for the period from the date
that such net sales proceeds are received by MLI until such Settlement
Date.
Section 5 Interim Settlements.
Within 5 Business Days following each Reset Date of the type referred
to in clause (i) of the definition of Reset Date, the Companies shall
(i) deliver the Interim Settlement Amount, if any, in Interim
Settlement Shares to MLI. Interim Settlement Shares shall be the
subject of a registration statement covering any sale of such Interim
Settlement Shares by MLPF&S that has been declared effective under the
Securities Act by the Commission (an "Effective Registration
Statement"). Interim Settlement Shares shall be registered in the stock
register of the Companies as instructed by MLI and shall be held by
MLPF&S or a custodian or depository designated by MLPF&S. If the
Companies are unable to deliver Interim Settlement Shares in accordance
with the preceding sentence, the Companies shall deliver "restricted"
Interim Settlement Shares that are not the subject of an Effective
Registration Statement in an amount equal to the Interim Settlement
Amount. If the Interim Settlement Shares are not the subject of an
Effective Registration Statement, the Companies shall deliver
additional Interim Settlement Shares equal to 20% of the Interim
Settlement Shares. At
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such time as the Interim Settlement Shares are the subject of an
Effective Registration Statement, the Companies may elect to have
returned all additional Interim Settlement Shares - delivered pursuant
to the preceding sentence. On any Reset Date, if Interim Settlement
Shares are held by MLI, MLI shall deliver to the Companies within five
(5) Business Days after such Reset Date, the amount in Interim
Settlement Shares by which the amount in Interim Settlement Shares held
by MLI (valued at the Closing Price on such Reset Date) plus any cash
amounts in the collateral account exceeds the Interim Settlement Amount
(or 120% of the Interim Settlement Amount, in the event that MLI holds
restricted Interim Settlement Shares that are not the subject of an
Effective Registration Statement). Distributions on the Interim
Settlement Shares will be deposited in a collateral account at MLPF&S
or a custodian or depositary designated by MLPF&S. All Interim
Settlement Shares will be, when delivered, duly authorized, validly
issued, fully paid and non-assessable. Interim Settlement Shares shall
not be voted by MLI or MLPF&S. All distributions received in respect of
the Interim Settlement Shares shall be held in the collateral account
at MLPF&S or a depositary designated by MLPF&S. The cash amounts in the
collateral account will be immediately returned to the Companies by
MLI, but should MLI fail to return any cash amounts in the collateral
account, such cash amounts will earn interest at the USD LIBOR rate
having a designated maturity of three months. Upon final Settlement,
MLI shall immediately release all claims to cash held in the collateral
account, if any (including interest earned thereon), and Interim
Settlement Shares and deliver such amounts and all Interim Settlement
Shares to the Companies.
Section 6 Certain Covenants and Other Provisions.
6.1 Par Value.
MLI shall pay to the Companies $.01 par value per share for each share
comprising a Paired Share delivered to MLI pursuant to this Agreement,
including any Interim Settlement Shares.
6.2 Allocation of Payment and Deliveries
As between the REIT and OPCO, any delivery of, or payments
attributable to, the REIT portion of Paired Shares pursuant to this
Agreement shall be made to or by the REIT, and any delivery of, or
payments attributable to, the OPCO portion of Paired Shares pursuant to
this Agreement shall be made to or by OPCO. When making any payment to
the Companies pursuant to this Agreement, MLI shall allocate such
payment between the REIT and OPCO in the manner specified by the
Companies.
6.3 Resale Registration Statement.
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The Companies shall file a resale registration statement covering any
resales of Paired Shares delivered by the Companies to MLI pursuant to
this Agreement and the Purchase Agreement (a "Resale Registration
Statement") within 45 Business Days of the Closing Date and the
Companies shall use their best efforts to obtain effectiveness of such
Resale Registration Statement within 90 Business Days of the Closing
Date. If the Paired Shares delivered by the Companies to MLI pursuant
to the Purchase Agreement are not the subject of a Resale Registration
Statement that has been declared effective under the Securities Act by
the Commission (an "Effective Resale Registration Statement") within 90
Business Days of the Closing Date, the Spread shall increase,
retroactively effective commencing on the Initial Settlement Date, to
the Spread plus 125 basis points. At such time as the Purchase Shares
are the subject of an Effective Resale Registration Statement, the
Spread shall be reduced, from and after such time, to the Spread. The
Companies further agree that they will cause any Resale Registration
Statement to remain in effect until the earliest of the date on which
(i) the Notional Shares plus all of the Interim Settlement Shares and
any other Paired Shares delivered by the Companies to MLI pursuant this
Agreement have been sold by or on behalf of MLI, or (ii) MLI has
advised the Companies that it no longer requires that such registration
be effective. The provisions of Section 5.2 and Section 7.2 of the
Purchase Agreement shall be deemed to apply to any Resale Registration
Statement filed by the Companies pursuant to this Agreement.
6.4 Delivery of Paired Shares.
Each Company covenants and agrees with MLI that Paired Shares delivered
by the Companies pursuant to settlement events in accordance herewith
will be duly authorized, validly issued, fully paid and nonassessable.
The issuance of such Paired Shares will not require the consent,
approval, authorization, registration, or qualification of any
government authority, except such as shall have been obtained on or
before the delivery date to MLI in connection with any registration
statement filed with respect to any Paired Shares. Each party agrees
that the Companies shall not deliver Paired Shares to MLI or any other
person in connection with an Interim Settlement or the final Settlement
until such time as such delivery would not cause MLI or any other
person to violate the "Ownership Limit" set forth in the Amended and
Restated Declaration of Trust of the REIT or the Articles of Amendment
and Restatement of OPCO, in each case, as in effect on the date hereof.
6.5 Securities Law Compliance.
Each party agrees that it will comply, in connection with this
Transaction and all related or contemporaneous sales and purchases of
the Companies' Paired Shares, with the applicable provisions of the
Securities Act, the Exchange Act and the rules and regulations
thereunder.
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6.6 Regulatory Compliance.
Each party agrees that if the delivery of Paired Shares upon settlement
is subject to any restriction imposed by a regulatory authority, it
shall not be an event of default, and the parties will negotiate in
good faith a procedure to effect settlement of such Paired Shares in a
manner which complies with any relevant rules of such regulatory
authority and which is satisfactory in form and substance to their
respective counsel, subject to Section 6.2 of this Agreement and
Section 7 of the Purchase Agreement. Each party further agrees that any
sale pursuant to Section 3.1 may be delayed or postponed if, in MLI's
reasonable judgement, such delay or postponement is necessary to comply
with the requirements of applicable law or regulation; provided,
however, that MLI will act in good faith to end such delay or
postponement or otherwise effect such sale on a reasonably timely basis
in a manner which complies with any such applicable law or regulation
and which is satisfactory in form and substance to its respective
counsel.
6.7 Settlement Transfer.
All settlements shall occur through DTC or any other mutually
acceptable depository.
6.8 Trading Authorization.
The following individuals and/or any individual authorized in writing
by the respective officers of the Companies are authorized by the
Companies to provide trading instructions to MLI with regard to this
transaction:
Xxxxxx X. Xxxxx
0000 X. Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
and
Xxxxxxx Xxxxx
0000 X. Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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6.9 Specific Performance.
The parties acknowledge and agree that the failure of the Companies or
MLI to deliver Paired Shares in accordance with the provisions hereof
would result in damage to the other party that could not be adequately
compensated by a monetary award. The parties therefore agree that, if
either party fails to deliver Paired Shares in accordance with the
provisions hereof, the other party may, in addition to all other
remedies, seek an order of specific performance from a court of
appropriate jurisdiction.
6.10 Recourse. MLI acknowledges and agrees that the name
"Starwood Hotels & Resorts" is a designation of the REIT and its
Trustees (as Trustees but not personally) under a Declaration of Trust
dated August 25, 1969, as amended and restated as of June 6, 1988, as
further amended on February 1, 1995, on June 19, 1995, January 2, 1998
and February 23, 1998 and as the same may be further amended from time
to time, and all persons dealing with the REIT shall look solely to
REIT's assets for the enforcement of any claims against the REIT, as
the Trustees, officers, agents and security holders of the REIT assume
no personal liability for obligations entered into on behalf of the
REIT, and their respective individual assets shall not be subject to
the claims of any person relating to such obligations.
6.11 Successors and Assigns. The Companies or MLI may assign
any of their respective rights, or delegate any of their respective
duties under this Agreement, if the other party first consents to such
assignment in writing. This Agreement shall inure to the benefit of and
be binding upon (i) the successors of MLI and (ii) any assignee or
transferee of rights and obligations of the Xxxxxxx Xxxxx Parties
pursuant to the Purchase Agreement and any assignee or transferee of
rights and obligations of MLI pursuant to this Agreement. A transferee
of the Xxxxxxx Xxxxx Parties pursuant to the Purchase Agreement and a
transferee of MLI pursuant to this Agreement, and, in each case, any
successor, assignee, or transferee, shall be held subject to all of the
terms of this Agreement.
6.12 Transfer to Affiliate. Notwithstanding anything herein to
the contrary, if MLI transfers the Purchase Shares to any affiliate of
MLI, together with all of MLI's rights under the Purchase Agreement
pursuant to Section 15 of the Purchase Agreement, then MLI's rights and
obligations under this Agreement shall be transferred to such affiliate
of MLI. In the event of such an assignment, such affiliate shall in all
respects be substituted for MLI as a party hereto.
6.13 Governing Law.
The Agreement will be governed by and construed in accordance with the
laws of the State of New York without reference to choice of law
doctrine.
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6.14 Confidentiality.
Subject to the other applicable subsections of this Section 6, to any
contrary requirement of law, including any disclosure obligations of
the Companies under the Securities Act, the Exchange Act and the rules
and regulations thereunder, and to the right of each party to enforce
its rights hereunder in any legal action, each party shall keep
strictly confidential and shall cause its employees and agents to keep
strictly confidential the terms of this Agreement and any information
relating to or concerning the other party which it or any of its agents
or employees may acquire pursuant to, or in the course of performing
its obligation under, any provision of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
STARWOOD HOTELS & RESORTS
WORLDWIDE, INC.
By:________________________________
Name:
Title:
STARWOOD HOTELS & RESORTS
By:________________________________
Name:
Title:
XXXXXXX XXXXX INTERNATIONAL
By:________________________________
Name:
Title:
