EXHIBIT 2.3
FIRST AMENDMENT
TO SETTLEMENT AGREEMENT
This First Amendment to Settlement Agreement (the "First Amendment") is
made and entered into as of this 1st day of October by and among Crescent Real
Estate Equities Limited Partnership ("Crescent"), Crescent Real Estate Equities
Company ("Crescent REIT"), Crescent Operating, Inc. ("COPI"), Rosestar
Management LLC, Canyon Ranch Leasing, L.L.C., Wine Country Hotel, LLC d/b/a
Vintage Resorts, LLC, Rosestar Southwest, LLC and COI Hotel Group (collectively,
the "Transferring Subsidiaries").
WHEREAS, the parties hereto previously entered into that certain
Settlement Agreement, dated as of February 14, 2002, relating to the various
agreements among the parties that are documented therein (the "Effective
Agreement");
WHEREAS, the parties have consummated certain of the transactions
provided for in the Effective Agreement and have commenced performance of other
transactions;
WHEREAS, COPI has requested that, in addition to the funds Crescent has
already advanced to COPI under the COPI Budget Note for specified budgeted
expenses, Crescent advance additional funds to COPI for additional operating
expenses, and Crescent is willing to advance these funds to COPI in accordance
with specified terms;
WHEREAS, the parties have determined that they wish to change certain
of the provisions of the Effective Agreement relating to transactions that have
not yet been performed, to clarify certain provisions of the Effective Agreement
and to enter into additional or revised agreements as to various matters; and
WHEREAS, the parties desire to amend the Effective Agreement, in
accordance with Section 10.07 of the Effective Agreement, to reflect such
changes;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto,
intending legally to be bound, hereby agree as follows.
1. CLARIFICATION AND AMENDMENT OF DEFINED TERM. The defined term "CEI/COPI
Payments" contained in Section 1.01 is hereby deleted in its entirety
and replaced with the following:
"CEI/COPI Payments" means all amounts paid,
pre-paid, advanced, incurred or accrued up to and including
the Confirmation Date by or on behalf of Crescent, Crescent
REIT or their Affiliates in connection with the preparation of
this Agreement, the Operative Agreements and the consummation
of the transactions contemplated hereby and thereby, or
relating hereto or thereto, including, without limitation, all
such amounts paid, advanced, incurred or accrued by Crescent
or Crescent REIT pursuant to, and in accordance with, Sections
2.07, 2.08, 2.09 and/or 2.15, and all fees and expenses of
agents, representatives,
counsel and accountants employed by Crescent, Crescent REIT or
any of their Affiliates. Notwithstanding any of the foregoing,
CEI/COPI Payments shall be reduced by the total amount of all
optional or mandatory payments or prepayments, if any, whether
applied to accrued interest or principal, on the Revised COPI
Budget Note or the Second COPI Budget Note made by COPI.
In connection with the foregoing clarification and amendment, the
parties hereto agree and acknowledge that the deletion of the phrase "for
out-of-pocket expenses," which was set forth immediately following the phrase
"means all amounts paid, advanced, incurred or accrued" in the Effective
Agreement constitutes a clarification of the original intent of the parties to
the Effective Agreement as to the meaning of the defined term "CEI/COPI
Payments," and not an amendment, change or other alteration of the meaning of
such defined term.
2. AMENDMENT OF SECTION 1.02. Section 1.02 of the Effective Agreement is
hereby amended to include, from and after the effective date of this
First Amendment, the cross-references set forth below.
A. On the line immediately following the line containing the
term "Registration Statement" and the reference to Section 2.10(b), the
following shall be added to the list contained in Section 1.02 as a new
line:
Revised COPI Budget Note 2.09(a)
with the term "Revised COPI Budget Note" included under the column
designated "Term" and the number "2.09(a)" inserted under the column
designated "Section".
B. On the line immediately following the line containing the
term "SEC" and the reference to Section 2.04(a), the following shall be
added to the list contained in Section 1.02 as a new line:
Second COPI Budget Note 2.09(c)
with the term "Second COPI Budget Note" included under the column
designated "Term" and the number "2.09(c)" inserted under the column
designated "Section".
3. REPLACEMENT OF EXHIBIT E AND AMENDMENT OF SECTION 2.03(a). From and
after the date hereof, (i) the Plan of Reorganization attached to the
Effective Agreement as Exhibit E is hereby superseded and replaced in
its entirety by the new Exhibit E attached hereto, and (ii) all
references to the "Plan" shall refer to such new Exhibit E.
4. AMENDMENT OF SECTION 2.09.
A. Section 2.09 of the Effective Agreement is hereby amended
to include, prior to subparagraph (a) of Section 2.09 the following:
Pursuant to advances made by Crescent to COPI pursuant to the
original "COPI Budget Note" attached hereto as Exhibit H, Crescent has
advanced the principal amount of $3,631,000 as of September 30, 2002.
B. Section 2.09(a) of the Effective Agreement is hereby
deleted in its entirety and replaced with the following:
(a) Subject to Section 5.05, Crescent has advanced
funds to COPI sufficient for COPI to pay the reasonable and
necessary budgeted and documented out-of-pocket operating
expenses of COPI and its Subsidiaries (other than expenses
attributed to, related to or incurred by CMC and its
Subsidiaries), to the extent COPI and such Subsidiaries were
unable to do so from their own resources, in accordance with the
original "COPI Budget Note," which is that certain promissory
note in the form attached as Exhibit H, in the original principal
amount of up to $8,575,000. From and after the date hereof, the
promissory note attached hereto as Exhibit H is superseded and
replaced in its entirety by the amended and restated promissory
note attached hereto as Exhibit H-1 (the "Revised COPI Budget
Note").
C. Section 2.09(b) of the Effective Agreement is hereby
deleted in its entirety and replaced with the following:
(b) Crescent also has advanced funds to COPI
in accordance with the COPI Budget Note for the purposes, and
in the amounts, specified in the Revised COPI Budget Note. In
addition, Crescent agrees to advance funds to COPI in
accordance with the Revised COPI Budget Note for the purposes,
and in the amounts, specified therein.
D. Section 2.09(c) of the Effective Agreement is hereby
redesignated as Section 2.09(d), and a new Section 2.09(c), in the form
set forth below, is hereby inserted in substitution of Section 2.09(c)
of the Effective Agreement.
(c) Subject to Section 5.05, Crescent agrees
(i) to advance funds to COPI sufficient for COPI to pay the
reasonable and necessary documented out-of-pocket operating
expenses of COPI and its Subsidiaries (other than expenses
attributed to, related to or incurred by CMC and its
Subsidiaries), to the extent COPI and such Subsidiaries are
unable to do so from their own resources, and (ii) to advance
additional funds of up to $641,000.00 to COPI, in each case in
accordance with a promissory note in the form attached as
Exhibit H-2, in the original principal amount of up to
$2,900,000 (the "Second COPI Budget Note"). The Second COPI
Budget Note will be secured by a security interest in the
claim, thing in action, general intangible and other
collateral described in that certain Security Agreement of
even date herewith made by COPI in favor of Crescent, on the
terms set forth in such Security Agreement.
E. Section 2.09(d) of the Effective Agreement is hereby
deleted in its entirety and replaced with the following, which shall be
designated as Section 2.09(e).
(e) The provisions of (i) this Section 2.09,
the COPI Budget Note, the Revised COPI Budget Note and the
Second COPI Budget Note, on the one hand, and (ii) Section
2.01(e), on the other, are mutually exclusive.
5. AMENDMENT OF SECTION 2.10(a). Section 2.10(a) of the Effective
Agreement is hereby deleted in its entirety and replaced with the
following:
(a) In the event that the COPI Stockholder
Acceptances are obtained, then on the Effective Date, each
person who is a holder of shares of COPI Common Stock on the
date the confirmation order has been entered by the Bankruptcy
Court (the "Confirmation Date") shall be entitled to receive
the number of common shares of beneficial interest, par value
$.01 per share, of Crescent REIT (the "Crescent REIT Common
Shares"), equal to the product of (i) (A) the number of shares
of COPI Common Stock owned by such stockholder on the
Confirmation Date, divided by (B) the total number of shares
of COPI Common Stock outstanding on the Confirmation Date, and
(ii) the quotient of (A) the Consideration Amount (as defined
below), and (B) the average of the daily closing prices per
Crescent REIT Common Share as reported on the New York Stock
Exchange Composite Transactions reporting system for the 10
consecutive trading days immediately preceding the
Confirmation Date. For purposes of this section, the
"Consideration Amount" shall be an amount equal to the greater
of (x) $10,828,497, less an amount, if any, equal to the
amount by which the CEI/COPI Payments exceed $5,200,000, and
(y) $2,165,699.40. No certificate or scrip representing
fractional Crescent REIT Common Shares shall be issued, and
all fractional shares shall be rounded up or down to the
nearest whole Crescent REIT Common Share.
6. ADDITION OF NEW SECTION 2.15. A new Section 2.15, which shall read as
follows, is hereby inserted immediately following Section 2.14 of the
Effective Agreement:
2.15 Claims of Unsecured Creditors.
(a) The parties hereby acknowledge that,
after the execution of the Effective Agreement, the Official
Committee of Unsecured Creditors of CMC established in
connection with the bankruptcy of CMC has advised COPI, and
COPI subsequently advised Crescent, that such Committee has
asserted certain claims against COPI and that it may assert
additional or supplemental claims against COPI and certain of
COPI's current and former directors and officers. COPI has
also advised Crescent that it disputes these claims and
believes they are without merit.
(b) The parties further acknowledge that
other unsecured creditors not currently Known to COPI may in
the future make claims in connection with the COPI bankruptcy.
(c) In connection with any claim or claims
that either are specified or are of the type specified in
subsections (a) or (b) of this Section 2.15, Crescent shall
have the right, but no obligation, to offer, and COPI shall
have the right to permit Crescent, to settle or assume any one
or more of such claims on such terms, including the value of
the settlement or assumption, as shall be agreed by and among
COPI, Crescent and Crescent REIT on or before the Effective
Date.
7. AMENDMENT OF SECTION 3.12. Section 3.12 of the Effective Agreement is
hereby deleted in its entirety and replaced with the following:
3.12 Claims Against COPI.
Other than the claims referred to in Sections 2.06
through 2.09 and in Section 2.15(a), to COPI's Knowledge,
there are no obligations or claims existing or assertable
against COPI.
8. AUTHORITY. Each party to this First Amendment represents that such
party has full power and authority to enter into this First Amendment,
and that this First Amendment constitutes a legal, valid and binding
obligation of such party, enforceable against such party in accordance
with its terms.
9. DEFINED TERMS CONTAINED IN EFFECTIVE AGREEMENT. Except as the context
may otherwise require, any terms used in this First Amendment which are
defined in the Effective Agreement shall have the same meaning for
purposes of this First Amendment as in the Effective Agreement.
10. EFFECTIVE DATE OF FIRST AMENDMENT. This Amendment will become effective
as of the date first above written. From and after the effective date
of this First Amendment, each reference in the Agreement to "this
Agreement," "hereunder," "hereof," "herein" or words of like import,
and each reference in the Operative Agreements or any other documents
entered into in connection with the Agreement, shall mean and be a
reference to the Effective Agreement as amended by this First
Amendment.
11. REMAINDER OF EFFECTIVE AGREEMENT NOT AFFECTED. Except as specifically
amended by this First Amendment, the Effective Agreement is hereby
ratified, confirmed, and reaffirmed for all purposes and in all
respects.
12. COUNTERPARTS. This First Amendment may be executed in one or more
counterparts, each of which will be deemed to be an original, but all
of which will constitute one and the same agreement.
IN WITNESS WHEREOF, the undersigned have executed this First Amendment
as of the date first written above.
CRESCENT REAL ESTATE EQUITIES
LIMITED PARTNERSHIP
By: Crescent Real Estate Equities, Ltd.,
its general partner
By: /s/ XXXXX XXXX
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Name: Xxxxx Xxxx
Title: Executive Vice President,
Law and Administration
CRESCENT REAL ESTATE EQUITIES COMPANY
By: /s/ XXXXX XXXX
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Name: Xxxxx Xxxx
Title: Executive Vice President,
Law and Administration
CRESCENT OPERATING, INC.
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President
ROSESTAR MANAGEMENT LLC
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. Xxxxxxx
Title: Manager
CANYON RANCH LEASING, L.L.C.
By: Rosestar Management, LLC, its manager
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. Xxxxxxx
Title: Manager
WINE COUNTRY HOTEL, LLC
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. Xxxxxxx
Title: Manager
ROSESTAR SOUTHWEST, LLC
By: RSSW Corp., its manager
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. Xxxxxxx
Title: President
COI HOTEL GROUP, INC.
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. Xxxxxxx
Title: Chairman