Exhibit 10.20
Subscription and Stockholders' Agreement among
CNL Hotel Investors, Inc.,
Five Arrows Realty Securities II L.L.C.,
CNL Hospitality Partners, LP
and CNL Hospitality Properties, Inc.,
dated February 24, 1999
SUBSCRIPTION
AND
STOCKHOLDERS' AGREEMENT
dated as of February 24, 1999
among
CNL HOTEL INVESTORS, INC.
and
THE STOCKHOLDERS
NAMED HEREIN
TABLE OF CONTENTS
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Page
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ARTICLE I CAPITAL STRUCTURE........................................ 2
1.1 Authorized Capital................................................ 2
1.2 Capital Commitments............................................... 2
1.3 Drawdowns of Capital Commitment of the Capital Stockholders....... 3
1.4 Default and Consequences of Default............................... 4
1.5 Conditions to each Drawdown....................................... 5
1.6 Purchase of Class D Junior Preferred Stock........................ 7
ARTICLE II CORPORATE GOVERNANCE..................................... 7
2.1 Articles of Incorporation and By-laws............................. 7
2.2 Number of Directors............................................... 7
2.3 Initial Board of Directors........................................ 7
2.4 Director Approval Required For Certain Action..................... 9
2.5 Covenant to Vote..................................................10
2.6 No Voting or Conflicting Agreements...............................11
2.7 Actions Consistent with Agreement.................................11
2.8 Conflict with Articles or Bylaws..................................11
ARTICLE III RESTRICTIONS ON TRANSFER OR ISSUANCE OF COMMON STOCK.....12
3.1 General Prohibition on Transfers..................................12
3.2 Compliance with Securities Laws...................................12
3.3 Permitted Transfers...............................................13
3.4 Sales of Stock by Five Arrows; Company Sale Transactions..........13
3.5 Hospitality Partners' Right of First Offer........................15
3.6 Mandatory Exchange at the Option of Hospitality Partners..........16
ARTICLE IV EXCHANGE OF CLASS A PREFERRED STOCK......................17
4.1 Definitions.......................................................17
4.2 Exchange of Class A Preferred Stock...............................19
ARTICLE V LEGENDS ON STOCK CERTIFICATES............................24
5.1 Legends on Stock Certificates.....................................24
ARTICLE VI CLOSING..................................................25
6.1 Closing .........................................................25
ARTICLE VII REPRESENTATIONS AND COVENANTS............................25
7.1 Representations of CHP............................................25
7.2 Covenants of CHP..................................................25
7.3 Representations of Five Arrows....................................27
7.4 Covenants of Five Arrows..........................................27
7.5 Representations of Hospitality Partners...........................27
ARTICLE VIII MISCELLANEOUS............................................28
8.1 Expenses .........................................................28
8.2 Injunctive Relief.................................................28
8.3 Notice .........................................................28
8.4 Successors and Assigns............................................28
8.5 Governing Law.....................................................29
8.6 Headings .........................................................29
8.7 Entire Agreement; Amendment.......................................29
8.8 Inspection........................................................29
8.9 Counterparts......................................................29
SUBSCRIPTION AND STOCKHOLDERS' AGREEMENT
AGREEMENT, dated as of February 24, 1999, by and among CNL
Hotel Investors, Inc., a Maryland corporation (the "Company"), Five Arrows
Realty Securities II L.L.C., a Delaware limited liability company ("Five
Arrows"), CNL Hospitality Partners, LP, a Delaware limited partnership
("Hospitality Partners", and together with Five Arrows, individually and
collectively, the "Capital Stockholders") and CNL Hospitality Properties, Inc.,
a Maryland corporation ("CHP"), which owns, through its wholly-owned
subsidiaries, all of the outstanding equity interests of Hospitality Partners.
Five Arrows, Hospitality Partners, CHP and any other person who shall hereafter
acquire shares of Common Stock, $.01 par value, of the Company (the "Common
Stock") or shares of Class A Preferred Stock, Class B Preferred Stock, Class C
Preferred Stock or Class D Junior Preferred Stock of the Company (the "Preferred
Stock" together with the Common Stock, the "Stock"), pursuant to the provisions
of, and subject to the restrictions and rights set forth in, this Agreement are
sometimes hereinafter referred to individually as a "Stockholder" or,
collectively, as the "Stockholders." Capitalized terms not otherwise defined
herein shall have the meanings ascribed to such terms in the Articles and the
Articles Supplementary (each as defined herein) of the Company.
RECITALS
Five Arrows, CHP, and Hospitality Partners have formed the
Company to acquire, hold, own, develop, maintain, operate, sell, transfer,
exchange and otherwise dispose of real property as a real estate investment
trust within the meaning of Sections 856 through 860 of the Internal Revenue
Code of 1986, as amended (the "Code").
A purpose of the Company is to acquire from various sellers
affiliated with Western International ("WI") 100% of the partnership interests
in partnerships that own certain hotels identified on Exhibit 1.3 hereto or,
with the consent of Five Arrows, such other hotels as may be substituted in lieu
thereof of similar quality, characteristics and subject to the same
cross-default obligations as the hotels identified on Exhibit 1.3 (the "Hotels")
and to manage the Hotels (the "Business").
The Hotels are expected to be subject to leases with a new
entity affiliated with WI.
Concurrently herewith, Five Arrows and CHP are entering into
that certain Securities Purchase Agreement (the "CHP Securities Purchase
Agreement"), dated the date hereof, pursuant to which Five Arrows has committed
to purchase from time to time up to 1,578,947 shares of CHP common stock, par
value $.01 per share ("CHP Common Stock") for a maximum aggregate purchase price
of up to $14,999,996.50 (the "CHP Investment Amount").
Concurrently herewith, Five Arrows and CNL Hospitality
Advisors, Inc. ("Advisor"), an affiliate of CHP and Hospitality Partners, are
entering into that certain Securities Purchase Agreement, dated the date hereof
(together with the agreements contemplated thereby, the "Advisor Investment
Documents"), pursuant to which Advisor will sell to Five Arrows 200 shares of
Advisor Class A common stock.
Concurrently herewith, the Company and Advisor are entering
into the Management Agreement, dated the date hereof, pursuant to which Advisor
will provide to the Company the services provided therein with respect to the
Hotels.
In connection with the acquisition of the Hotels and to
provide a portion of the funds required therefor, the Stockholders have agreed,
among other things, to contribute to the Company up to a maximum amount of
$90,868,997.76, upon the terms and conditions set forth herein.
The Company and the Stockholders also deem it in their
respective best interests to provide for the corporate governance of the Company
and desire to enter into this Agreement in order to effectuate that purpose. The
Stockholders also desire to restrict the sale, assignment, transfer, encumbrance
or other disposition of the Stock (including Stock issued and outstanding as of
the date hereof, as well as Stock which may be issued hereafter), and to provide
for certain rights and obligations in respect thereto as hereinafter provided.
In consideration of the promises and of the terms and
conditions herein contained, the parties hereto mutually further agree as
follows:
ARTICLE I
CAPITAL STRUCTURE
1.1 Authorized Capital. As of the date hereof, the Company
represents and warrants that it has the following authorized capital stock, none
of which has been issued: (i) 99,776 shares of Common Stock; and (ii) 151,854
shares of Preferred Stock of which 50,886 shares have been designated as 8%
Class A Cumulative Preferred Stock, liquidation preference $1,000 per share (the
"Class A Preferred Stock"), 39,982 shares of 9.76% Class B Cumulative Preferred
Stock, liquidation preference $1,000 per share (the "Class B Preferred Stock"),
50,986 shares of 8% Class C Cumulative Preferred Stock, liquidation preference
$1,000 per share (the "Class C Preferred Stock"), and 10,000 shares of Class D
Junior Preferred Stock, liquidation preference $1,000 per share (the "Class D
Junior Preferred Stock"). The foregoing Stock has the rights, privileges and
limitations provided in the Articles of Incorporation and the respective
Articles Supplementary designating each a class of preferred stock.
1.2 Capital Commitments. By its execution hereof, (a) Five
Arrows hereby commits to purchase, upon the terms and subject to the conditions
set forth herein, from the Company up to 50,886 shares of Common Stock at a
purchase price of $.01 per share, and up to 50,886 shares of Class A Preferred
Stock at a purchase price of $1,000 per share for a maximum aggregate purchase
price of up to $50,886,508.86 (the "Five Arrows Capital Commitment"), and (b)
Hospitality Partners hereby commits to purchase, upon the terms and subject to
the conditions set forth herein, from the Company up to 48,890 shares of Common
Stock at a purchase price of $.01 per share and up to 39,982 shares of Class B
Preferred Stock at a purchase price of $1,000 per share for a maximum aggregate
purchase price of up to $39,982,488.90 (the "Hospitality Partners Capital
Commitment", and together with the Five Arrows Capital Commitment, the "Capital
Commitments").
1.3 Drawdowns of Capital Commitments of the Capital
Stockholders. Subject to Section 1.4 hereof, the Capital Stockholders shall be
required to fund a portion of their Capital Commitments from time to time,
subject to the following terms and conditions:
(a) Each Capital Stockholder shall be required to fund its
Capital Commitment only in connection with and for the purposes of
facilitating (by the use of the proceeds for the acquisition price and
related unaffiliated third party expenses including, without
limitation, costs related to the incorporation of the Company, purchase
price deposits and fees and expenses incurred by the Company in
connection with the Senior Loan Facility) the acquisition of a Hotel
identified on Exhibit 1.3 attached hereto (each Hotel acquisition and
the related acquisition expenses thereof, a "Portfolio Investment") by
the Company pursuant to the related Hotel purchase agreement.
(b) The Company shall provide to each Capital Stockholder
notice (a "Notice of Drawdown") at least 10 business days prior to the
date any portion of the Capital Commitment is required (a "Drawdown").
Each Notice of Drawdown shall give in reasonable detail a description
of the Portfolio Investment, the material terms and conditions of the
acquisition, any purchase price deposit or other expenditure, and the
proposed closing date of such Portfolio Investment. The Notice of
Drawdown shall specify the aggregate purchase price of the Portfolio
Investment and the portion of such Capital Stockholder's Capital
Commitment required in connection with such Drawdown (determined in
accordance with subparagraph (d) below) and number of shares of Class A
or Class B Preferred Stock, as applicable, and Common Stock to be
purchased by such Capital Stockholder in proportion to such Capital
Stockholder's Capital Commitment.
(c) Each Capital Stockholder shall deliver to the Company the
portion of such Capital Stockholder's Capital Commitment specified in
the Notice of Drawdown, in cash or other immediately available funds,
on the date of Drawdown specified in the Notice of Drawdown. Upon
receipt of such portion of such Capital Stockholder's Capital
Commitment, the Company shall deliver to each Capital Stockholder that
number of shares of Class A or Class B Preferred Stock, as applicable,
and Common Stock equal to the amount specified in the Notice of
Drawdown.
(d) Subject to Section 1.4, the required portion of each
Capital Stockholder's Capital Commitment shall be equal to the lesser
of (A) such Capital Stockholder's pro rata share (based on remaining
Capital Commitments of the Capital Stockholders) of the aggregate
amount required for the Company to acquire such Portfolio Investment
(or to make the purchase price deposit or other expenditure which is
the subject of the applicable Notice of Drawdown) and (B) such Capital
Stockholder's remaining Capital Commitment.
(e) No Capital stockholder shall be required to contribute to
the Company any portion of such Capital Stockholder's Capital
Commitment after December 31, 1999.
1.4 Default and Consequences of Default. (a) In the event that
a Stockholder fails to contribute to the Company its required Capital Commitment
by the date specified in the Notice of Drawdown (a "Default") any portion of the
Capital Commitment required to be contributed (a "Defaulted Capital Commitment")
by such Stockholder (a "Defaulting Stockholder"), the non-Defaulting
Stockholder, in its sole discretion, may take or cause to be taken any and all
of the following actions individually but not in combination:
(i) loan to the Company an amount equal to the
Defaulted Capital Commitment, bearing an interest rate equal to the
prime rate as announced by Citibank, N.A. on the date of such loan plus
400 basis points per annum and on such other terms and conditions as
are satisfactory to the non-Defaulting Stockholder;
(ii) contribute to the Company an amount equal to the
Defaulted Capital Commitment in exchange for additional shares of
either Class A or Class B Preferred Stock as determined by the
non-Defaulting Stockholder (in either case at a purchase price of
$1,000 per share) and Common Stock (calculated as provided in Section
1.4(b); or
(iii) notwithstanding any provision to the contrary
contained in this Agreement, arrange for and cause the Company to
borrow from a third party an amount not to exceed the Defaulted Capital
Commitment.
(b) (i) If the non-Defaulting Stockholder funds such Defaulted
Capital Commitment (or causes it to be funded) pursuant to this Section
1.4, then the percentage ownership of the Common Stock owned by the
non-Defaulting Stockholder (the "Default Adjusted Percentage") shall be
equal to the sum of (A) the product of (1) 200% times (2) a fraction
the numerator of which is the Defaulted Capital Commitment and the
denominator of which is $90,868,000 plus (B) 51%, if Five Arrows is the
non-Defaulting Stockholder, or 49%, if Hospitality Partners is the
non-Defaulting Stockholder, as the case may be. The percentage
ownership of Common Stock owned by the Defaulting Stockholder, if any,
shall be, after giving effect to the Default Adjusted Percentage, to
the extent a positive number, 100% minus the Default Adjusted
Percentage. The Company shall promptly issue to the non-Defaulting
Stockholder, for no additional consideration, such shares of Common
Stock as are necessary to implement this Section 1.4(b)(i).
(ii) Notwithstanding the foregoing, if the Defaulting
Stockholder shall contribute within 60 days of the date originally
specified in the Notice of Drawdown an amount equal to all of the
Defaulted Capital Commitment, plus an amount equal to 10% of such
Defaulted Capital Commitment, plus, if any, the amount of premiums,
prepayments penalties, charges and reasonable out-of-pocket expenses
incurred by the Company and the non-Defaulting Stockholder, as the case
may be, in connection with the alternative financing arranged pursuant
to Section 1.4(a) above (the "Increased Capital Commitment"), then the
percentage ownership of Common Stock by the Defaulting Stockholder and
the non-Defaulting Stockholder shall revert back to the amount it would
have been without giving effect to the adjustment provided in Section
1.4(b)(i), and any shares of Preferred Stock and Common Stock purchased
by the non-Defaulting Stockholder by contributing the Defaulted Capital
Commitment shall be canceled (and in connection therewith the Company
shall refund to the non-Defaulting Stockholder the Defaulted Capital
Commitment) and the Defaulting Stockholder shall receive the class and
number of shares of Preferred Stock and Common Stock that such
Stockholder would have received had no such default occurred. Within 5
days of the receipt of the Increased Capital Commitment by the Company,
the Company shall pay to the non-Defaulting Stockholder the excess, if
any, of the Increased Capital Commitment over (A) any premiums,
prepayment penalties, charges and out-of-pocket expenses reasonably
incurred and paid by the Company in connection with the alternative
Financing arranged pursuant to clause (iii) above and (B) the Defaulted
Capital Commitment.
(c) In no event shall Hospitality Partners be deemed a
Defaulting Stockholder to the extent the amount of any Defaulted
Capital Commitment is less than or equal to the amount that Five Arrows
has defaulted on its obligation to contribute capital to CHP in
accordance with and to the extent required by the CHP Securities
Purchase Agreement.
1.5 Conditions to each Drawdown.
(a) The obligation of Five Arrows to make contributions
pursuant to any Notice of Drawdown shall be subject to the following
conditions precedent (and, if any such condition is not satisfied,
other than solely due to actions or omissions of Five Arrows, then Five
Arrows shall not be deemed to be a Defaulting Stockholder with respect
to such Notice of Drawdown):
(i) no default by Hospitality Partners in the
observance or performance of any material agreement contained in this
Agreement shall have occurred and be continuing;
(ii) no Event of Default under Section 11(a) of the
Articles Supplementary designating the Class A Preferred Stock shall
have occurred and be continuing;
(iii) no default by the Company in the observance or
performance of any material agreement contained in this Agreement or
the Articles Supplementary designating the Class A Preferred Stock
shall have occurred and be continuing;
(iv) no default by CHP in the observance or
performance of any material agreement contained in the CHP Securities
Purchase Agreement or the agreements contemplated thereby shall have
occurred and be continuing;
(v) all documents related to the financing of the
Hotels by the Company and all other material documents required to be
delivered by the Company thereunder or in connection with the
transactions contemplated hereunder and thereunder and any material
changes, amendments, modifications or waivers thereto shall have been
approved by Five Arrows, in its sole discretion;
(vi) all documents related to the leases of the
Hotels and all the governing documents relating to each of the tenants
thereunder shall have been approved by Five Arrows, in its sole
discretion;
(vii) the acquisition of the Portfolio Investment to
which such Notice of Drawdown relates shall be made by the Company in
all material respects in accordance with the purchase agreement related
to such acquisition and any material amendment, modification, changes
or waiver thereto shall have been approved by each Stockholder;
(viii) no material default or breach under any
Advisor Investment Document shall have occurred and be continuing and
such agreements shall be in full force and effect; and
(ix) the Company shall have purchased officers' and
directors' liability insurance in such amounts and on such terms as are
customary for entities engaged in the same or similar business as the
Company and as are reasonably acceptable to Five Arrows.
(b) The obligation of Hospitality Partners to make
contributions pursuant to any Notice of Drawdown shall be subject to
the following conditions precedent (and, if any such condition is not
satisfied, other than solely due to actions or omissions of Hospitality
Partners, then Hospitality Partners shall not be deemed to be a
Defaulting Stockholder with respect to such Notice of Drawdown):
(i) no default by Five Arrows in the observance or
performance of any material agreement contained in this Agreement shall
have occurred and be continuing;
(ii) in the event that the directors designated by
Five Arrows constitute a majority of the Board (as defined herein), no
default by the Company in the observance or performance of any material
agreement contained in the Articles Supplementary designating the Class
B Preferred Stock shall have occurred and be continuing;
(iii) no default by Five Arrows in the observance or
performance of any material agreement contained in the CHP Securities
Purchase Agreement or the agreements contemplated thereby shall have
occurred and be continuing;
(iv) in the event that the directors designated by
Five Arrows constitute a majority of the Board, the acquisition of the
Portfolio Investment to which such Notice of Drawdown relates shall be
made by the Company in all material respects in accordance with the
purchase agreement related to such acquisition and any material
amendment, modification, changes or waiver thereto shall have been
approved by each Stockholder;
(v) no material default or breach under any Advisor
Investment Document shall have occurred and be continuing and such
agreements shall be in full force and effect; and
(vi) the Company shall have purchased officers' and
directors' liability insurance in such amounts and against such risks
as is customary for an entity engaged in the same or similar business
as the Company.
1.6 Purchase of Class D Junior Preferred Stock. If a
Distribution Nonpayment Event under the Articles Supplementary designating the
Class A Preferred Stock occurs and the election has been made to increase the
Distribution Rate by 2.5% per annum as provided in Section 11(A) of such
Articles Supplementary, then Hospitality Partners may, if it desires, within 15
days of such election purchase from the Company a sufficient number of shares of
Class D Junior Preferred Stock (and no more than such number rounded to the
nearest whole share) as is necessary to permit the Company to pay to the holders
of Class A Preferred Stock the defaulted amount of any such distribution and
shall be entitled, if it desires, to purchase on or before any subsequent
Distribution Payment Date on the Class A Preferred Stock a sufficient number of
shares of Class D Junior Preferred Stock (and no more than such number rounded
to the nearest whole share) to permit the Company to pay the full distribution
due on such Distribution Payment Date in respect of the outstanding Class A
Preferred Stock. The Company shall promptly distribute, in cash, the proceeds of
any sale of Class D Junior Preferred Stock to the holders of shares of Class A
Preferred Stock.
ARTICLE II
CORPORATE GOVERNANCE
2.1 Articles of Incorporation and By-laws. The Articles of
Incorporation (the "Articles"), the Articles Supplementary to the Articles (the
"Articles Supplementary") and the By-laws of the Company (the "By-laws") are
annexed hereto as Schedule 2.1A, Schedule 2.1B and Schedule 2.1C, respectively.
2.2 Number of Directors. The Company shall be governed by a
Board of Directors (the "Board") initially consisting of three (3) members. The
number of directors may thereafter be increased or decreased in accordance with
the Certificate and the By-laws and the provisions of this Agreement.
2.3 Initial Board of Directors.
(a) Initially, and until the next meeting of stockholders, the
Board shall consist of the following directors:
Xxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Each initial director shall hold his office until the 1999
annual meeting of stockholders of the Company (or a special meeting of
stockholders in lieu thereof) and until his successor is duly elected
and qualified or until his earlier resignation or removal. Each Capital
Stockholder agrees to vote all of its shares of Common Stock and use
its best efforts to elect to the Board at the 1999 annual meeting of
stockholders of the Company and subsequent annual meetings or at any
special stockholders' meeting at which directors are to be elected
(except as otherwise provided in this Section 2.3) two directors to be
designated by Hospitality Partners, and one director to be designated
by Five Arrows; provided that each such director designated pursuant to
this Section 2.3(a) is reasonably acceptable to the Capital Stockholder
not designating such director. Each Capital Stockholder agrees to take
all actions necessary to vote all of its shares of Common Stock and use
its best efforts to elect a successor to such director designated by
the Capital Stockholder or Capital Stockholders that designated such
former director; provided that such successor is reasonably acceptable
to the non-designating Capital Stockholder. Except as otherwise
provided herein and subject to the rights of holders of one or more
classes or series of Preferred Stock to elect or remove one or more
directors, any director or the entire Board may be removed from office
at any time with cause by the affirmative vote of a majority of the
votes of all shares of capital stock of the Company then outstanding
entitled to vote in the election of directors, voting as a single
class. Any director shall be removed upon a showing of cause by a
Capital Stockholder that did not designate such director reasonably
satisfactory to the Capital Stockholder that designated such director,
and the designating Capital Stockholder agrees to take all actions
necessary to vote all of its shares of Common Stock and use its best
efforts to remove such director.
(b) Notwithstanding the preceding paragraphs of this Section
2.3, (i) if an Event of Default (as defined in the Articles
Supplementary designating the Class A Preferred Stock ) shall have
occurred and the holders of Class A Preferred Stock elect, under the
Articles Supplementary classifying such class, the remedy of
designating two (2) additional directors, the number of directors
constituting the Board shall be increased by two (2) directors, and the
holders of shares of Class A Preferred Stock voting as a single class
shall be entitled to elect the two additional directors to serve on the
Board until no Event of Default is continuing (at which time the
holders of Class A Preferred Stock shall vote to remove such additional
directors) or (ii) if Hospitality Partners is the Defaulting
Stockholder in connection with a Defaulted Capital Commitment, the
number of directors constituting the Board shall be increased by two
(2) directors, and the holders of shares of Class A Preferred Stock
voting as a single class shall be entitled to elect the two additional
directors to serve on the Board as a permanent and fixed right of the
Class A Preferred Stock; provided that such right shall terminate (at
which time the holders of Class A Preferred Stock shall vote to remove
such additional directors) if Hospitality Partners pays the Increased
Capital Commitment in accordance with Section 1.4.
Any director elected to the Board by the holders of Class A
Preferred Stock shall be removed, with or without cause, only by the affirmative
vote of a majority of votes of all shares of Class A Preferred Stock then
outstanding entitled to vote thereon or in accordance with the provisions of the
Articles Supplementary of such preferred stock.
2.4 Director Approval Required For Certain Action.
(a) Subject to paragraph (b) of this Section 2.4, so long as
at least 5% of the shares of Class A Preferred Stock issued pursuant to
the terms hereof remain outstanding, the Company hereby agrees that
none of the following actions may be taken by the Company without the
consent of Five Arrows or the director(s) of the Company designated by
Five Arrows:
(i) the sale, lease, assignment, transfer or other
disposition of any of the Company's property, business or assets
(including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired and whether by distribution or
otherwise, or, in the case of any Subsidiary, the issuance or sale any
shares of such Subsidiary's Capital Interest to any Person other than
the Company or any wholly owned Subsidiary of the Company or the
entering into a merger or consolidation with another Person, other than
sales of furniture, fixtures and equipment (i) in the ordinary course
of business and not exceeding in the aggregate $300,000 in any twelve
month period, or (ii) that the Board deems necessary to insure that the
rents received by the Company from personal property leased by the
Company with real property do not exceed 10%, as provided in the
regulations promulgated under Section 512 of the Code;
(ii) the acquisition or leasing of assets (other than
pursuant to the leases or management agreements related to the
management of the Hotels) or Investments by the Company other than (A)
the Portfolio Investments and (B) Investments in U.S. government backed
securities or "no-load" mutual funds that are restricted to investing
solely in U.S. government backed securities of reserves taken for
working capital accounts;
(iii) the material amendment or modification of the
Management Agreement (the "Management Agreement"), dated the date
hereof, between the Company and CNL Hospitality Advisors, Inc.;
(iv) the discontinuance or disqualification of the
Company's status as a Real Estate Investment Trust within the meaning
of the Code; provided, however, that the consent of the director(s) of
the Company designated by Hospitality Partners would be required if CHP
would (with or without the passage of time) be disqualified as a Real
Estate Investment Trust thereby and;
(v) the incurrence of Indebtedness, other than (A)
Indebtedness outstanding pursuant to the Senior Loan Facility as in
existence on the Effective Date and (B) other Indebtedness in
connection with (1) capital expenditures so long as such Indebtedness
incurred for such capital expenditures is, in the aggregate, in an
amount not exceeding $1,500,000 at any one time outstanding or (2) the
payment of distributions required for the Company to maintain its REIT
status and (C) Permitted Refinancing.
(b) The Company hereby agrees that none of the following
actions may be taken by the Company without the consent of both (1)
Five Arrows or the directors of the Company designated by Five Arrows,
and (2) Hospitality Partners or the directors of the Company designated
by Hospitality Partners:
(i) the entering into or conducting any business
other than the Business and matters reasonably related to the Business;
(ii) even if the Articles of Incorporation were
amended to provide otherwise, for so long as the Company is or may be a
"pension-held REIT" as defined in Section 856(h)(3)(D) of the Code as
determined by the counsel to the holders of a majority of shares of
Class A Preferred Stock, engaging in any business or taking any action
that would result in the Company realizing "unrelated business taxable
income" within the meaning of Section 512 of the Code, if the Company
were a "qualified trust' as defined in Section 856(h)(3)(E) of the
Code; and
(iii) the entering into any transaction or series of
related transactions (including, without limitation, any purchase,
sale, lease or exchange of property or the rendering of any service or
the making of any Investment) with or in any affiliate other than (A)
as provided by the Management Agreement and (B) leases to tenants
affiliated with Rothschild Realty, Inc.
2.5 Covenant to Vote.
(a) Each Stockholder shall appear in person or by proxy at any
annual or special meeting of stockholders for the purpose of
establishing a quorum and shall vote all of the shares of Common Stock
owned by such Stockholder upon any matter in a manner so as to be
consistent and not in conflict with, and to implement, the terms of
this Agreement. Each Stockholder also agrees to execute and deliver
unanimous written consents in lieu of special meetings of stockholders
to implement the terms of this Agreement if requested to do so by any
Stockholder.
(b) In accordance with the provisions of Section 2.5(a) above
and subject to Section 3.5 below, (i) if (A) an Event of Default under
the Articles Supplementary designating the Class A Preferred Stock has
occurred, (B) CHP shall breach or default under any provision of the
CHP Securities Purchase Agreement, or (C) by the sixth anniversary of
this Agreement, (1) shares of CHP Common Stock have not been listed on
a recognized U.S. national securities exchange or included in the
National Association of Securities Dealers Inc.-National Market System,
or (2) shares of CHP Common Stock shall have been so listed or included
but shall have failed to achieve a 30 trading day average trading price
per share (during any 30-day period) of $12.50 or greater, or (3) upon
exchange of all shares of Class A Preferred Stock held by Five Arrows
into shares of CHP Common Stock, Five Arrows would own more than 10% of
the outstanding shares of CHP Common Stock (each of the events
described in clause (1), (2) and (3) individually and collectively, a
"Trigger Date Event"), then each Stockholder shall, at the request of
holders of a majority of the shares of Class A Preferred Stock,
promptly vote all shares of Common Stock or Preferred Stock owned by
such Stockholder to liquidate, dissolve or wind-up the Company or (ii)
if the holders of a majority of Class A Preferred Stock desire to sell,
transfer or otherwise dispose of any or all of the Hotels (a "Hotel
Sale"), then each Stockholder shall, at the request of such holders of
Class A Preferred Stock, promptly vote all shares of Common Stock and
Preferred Stock owned by such Stockholder in favor of the resolution
proposed by the holders of a majority of the Class A Preferred Stock to
sell, transfer or otherwise dispose of any or all such Hotels. Each of
the Stockholders hereby agrees that in the event of a liquidation,
dissolution or winding-up of the Company, such liquidation, dissolution
or winding-up shall be completed and the proceeds therefrom shall be
distributed within two years from the date thereof.
(c) If Five Arrows is a Defaulting Stockholder and has not
cured its default within 60 days, then at the request of the holders of
shares of Class B Preferred Stock, Five Arrows shall promptly vote all
shares of Common Stock and Class A Preferred Stock then owned by Five
Arrows in favor of the liquidation, dissolution or winding-up of the
Company.
2.6 No Voting or Conflicting Agreements. No Stockholder shall
grant any proxy or enter into or agree to be bound by any voting trust with
respect to its Common Stock, nor shall any Stockholder enter into any
stockholder agreements or arrangements of any kind with any person with respect
to Preferred Stock or Common Stock, inconsistent with the provisions of this
Agreement (whether or not such agreements and arrangements are with other
Stockholders or holders of Preferred Stock or Common Stock that are not parties
to this Agreement). The foregoing prohibition includes, but is not limited to,
agreements or arrangements with respect to the acquisition, disposition or
voting of shares of Preferred Stock or Common Stock. No Stockholder shall act,
for any reason, as a member of a group or in concert with any other persons in
connection with the acquisition, disposition or voting of Preferred Stock or
Common Stock in any manner which is inconsistent with the provisions of this
Agreement. Actions taken by the Board or the Stockholders to find purchasers to
acquire shares of capital stock or to find purchasers to acquire the Company as
contemplated by this Agreement shall not be deemed prohibited hereunder.
2.7 Actions Consistent with Agreement. Neither the Company nor
the Stockholders shall circumvent this Agreement by taking any action indirectly
through a subsidiary, affiliate or otherwise that would be prohibited under this
Agreement.
2.8 Conflict with Articles or By-laws. In the event of any
conflict or inconsistency between or among the provisions of this Agreement and
the Articles, Articles Supplementary or By-laws in effect at any time during the
term of this Agreement, the provisions of this Agreement shall govern and be
deemed controlling and each Stockholder agrees to vote all of its or his shares
of capital stock and to cause the Board to authorize and approve such amendments
to the Articles and/or the By-laws as shall resolve and remove any such
conflicts or inconsistencies.
ARTICLE III
RESTRICTIONS ON TRANSFER OR ISSUANCE OF COMMON STOCK
3.1 General Prohibition on Transfers.
(a) Notwithstanding anything to the contrary set forth herein,
(i) no Stockholder shall directly or indirectly Transfer (as defined in
the Articles) any shares of Preferred Stock without at the same time
transferring a proportionate number of shares of Common Stock then held
by it, and vice versa, and (ii) except as provided in Section 3.3
(Permitted Transfers), 3.4 (Sales of Preferred and Common Stock by Five
Arrows and Company Sale Transactions), and 3.5 (Hospitality Partners'
Right of First Refusal), and except for sales pursuant to any
registration statement which becomes effective under the Securities Act
of 1933, as amended (the "Securities Act"), no Stockholder shall
directly or indirectly Transfer any Stock during the term hereof,
unless such Transfer shall have been effected in accordance with the
terms of this Agreement or with the prior written consent of all of the
Stockholders.
(b) Except in the event of (i) the Transfer of all of the then
outstanding Preferred Stock and Common Stock of the Company to one or
more purchasers in a contemporaneous transaction, (ii) the merger or
consolidation of the Company, (iii) the sale or other transfer of all
or substantially all of the assets and business of the Company or (iv)
any similar transaction resulting in a change in control of the
Company, in each case consummated with another person or entity which
is not an affiliate of the Company prior to the consummation of such
transaction (each such transaction being a "Company Sale Transaction"),
no Transfer by any Stockholder of any Preferred Stock or Common Stock
permitted under this Agreement shall be effective at any time prior to
the termination of this Agreement unless the transferee shall have
executed an appropriate document confirming that (i) the transferee
takes such Stock subject to all of the terms and conditions of this
Agreement and (ii) the certificates or other instruments representing
such Stock shall bear a legend that such Stock is subject to the terms
of this Agreement, and such document shall have been delivered to the
Board prior to such transferee's acquisition of Stock. The Company
shall not transfer upon its books any Stock held or owned by any
Stockholder to any person except in accordance with this Agreement.
3.2 Compliance with Securities Laws. Unless otherwise
explicitly provided herein, except in connection with a sale of Stock included
in a registered public offering in accordance with the Securities Act, or sales
of Stock pursuant to Rule 144 thereunder, no Stockholder shall Transfer any
Stock to any person (regardless of the manner in which such Stockholder
initially acquired such Stock) at any time prior to the termination of this
Agreement unless the certificates or other instruments representing such
securities bear legends as provided in Article IV to the effect that such
securities are not registered under the Securities Act and are subject to the
terms of this Agreement. No Stockholder shall Transfer any Stock at any time if
such action would constitute a violation of any state securities or blue sky
laws or a breach of the conditions to any exemption from registration of Stock
under any such laws or a breach of any undertaking or agreement of such
Stockholder entered into pursuant to such laws or in connection with obtaining
an exemption thereunder.
3.3 Permitted Transfers. Except as otherwise provided in this
Agreement, the restrictions contained in Section 3.1(a) of this Agreement with
respect to Transfers of Stock shall not apply to: (a) any Transfer to a
Stockholder or to a designee of a Stockholder permitted by this Agreement; (b)
any Transfer to any wholly-owned subsidiary or parent entity of any Stockholder,
or any other wholly-owned subsidiary of such parent entity (it being understood
with respect to a wholly-owned subsidiary or parent entity or other wholly-owned
subsidiary of such parent entity that the later sale of such subsidiary or any
shares of capital stock of such subsidiary or parent entity or any other
wholly-owned subsidiary of such parent entity would constitute an indirect sale
of Stock by such corporate Stockholder which sale may only be made within the
terms of this Agreement); (c) any Transfer that would not violate the Company's
obligations under Section 2.1 of the Consent and Amendment to Management
Agreements, each dated as of February 24, 1999, among the Company, the
respective tenant and the respective property of manager named therein by Five
Arrows to a third party (a "Section 3.3.(c) Transferee") which has a similar
reputation and financial stability to that of Five Arrows and which is not a
direct competitor of CHP; (d) any Transfer to the members, partners or
stockholders of any Stockholder; (e) any Transfer to a party to this Agreement;
and (f) any Transfer approved by the unanimous vote of the Board; provided, that
(i) in each of clauses (a) through (f), such Transfer otherwise complies with
the provisions of this Agreement, with each transferee, donee or distributee (a
"Permitted Transferee") agreeing in writing to take subject to and to comply
with all of the provisions of this Agreement in accordance with Section 3.1(b)
and each such Permitted Transferee shall be deemed to take such securities
subject to all of the other provisions of this Agreement, and shall be deemed to
take such securities subject to the restrictions endorsed thereon, and any
certificates issued by the Company to reflect such transfer shall be
appropriately legended, and (ii) in the case of a Transfer by a corporate
Stockholder to a wholly-owned subsidiary or parent entity or any other
wholly-owned subsidiary of such parent entity, such subsidiary or parent entity
or other wholly-owned subsidiary of such parent entity shall agree to have its
shares of equity stock legended to note the restrictions on transfer contained
in this Agreement as if they were Stock, any Permitted Transferee so acquiring
Stock, as a successor or assignee hereunder, be deemed to take such securities
subject to all of the other provisions of this Agreement, and shall be deemed to
take such securities subject to the restrictions endorsed thereon, and any
certificates issued by the Company to reflect such Transfer shall be
appropriately legended.
3.4 Sales of Stock by Five Arrows; Company Sale Transactions.
(a) Subject to the provisions of paragraph (b) of this Section
3.4 relating to Company Sale Transactions (as defined in Section 3.1(b)
hereof) and Section 3.5, at any time from and after a Trigger Date
Event if Five Arrows seeks to Transfer any of its shares of Common
Stock and an equal number of shares of Class A Preferred Stock (a
"Share Sale Transaction") to one or more unaffiliated third parties
(other than a Permitted Transferee) (each an "Independent Third
Party"), Five Arrows shall give Hospitality Partners and the other
Stockholders, (the "Remaining Stockholders") a written notice which
specifies the identity of the proposed purchaser(s), the number of
shares of Common Stock and Class A Preferred Stock proposed to be
purchased and the consideration proposed to be paid by such
purchaser(s) for each share of Common Stock and Class A Preferred Stock
(the "Share Sale Notice"). If the Share Sale Notice so directs, the
Remaining Stockholders shall Transfer, on the same terms and conditions
as Five Arrows proposes to Transfer shares of Common Stock and Class A
Preferred Stock, the number of shares of Common Stock and Preferred
Stock, owned by the Remaining Stockholders (the "Included Shares")
which is calculated in the manner specified the second succeeding
sentence. If the Share Sale Notice does not direct the Remaining
Stockholders to include their shares in the proposed Transfer, then the
Remaining Stockholders shall have the option, exercisable in writing no
later than within fifteen (15) days following the delivery to the
Remaining Stockholders of the Share Sale Notice, to require Five Arrows
to include in such proposed Transfer, on the same terms and conditions
as Five Arrows proposes to Transfer its shares of Common Stock and
Class A Preferred Stock, the Included Shares of such Remaining
Stockholders, calculated in the manner specified in the following
sentence. The Included Shares of any Remaining Stockholders shall equal
the number which is determined by multiplying the number of shares of
Common Stock or Preferred Stock owned by the Remaining Stockholders on
the date that the Sale Notice is delivered by a fraction, the numerator
of which is the number of shares of Common Stock or Preferred Stock
which the proposed purchaser desires to purchase and the denominator of
which is the total number of shares of Common Stock or Preferred Stock
which are outstanding on the date that the Sale Notice is mailed. In
the event that the number so determined includes a fraction which is
greater than .50, the Included Shares shall be the next larger whole
integer and in the event that the number so determined includes a
fraction which is equal to or less than .50, the Included Shares shall
be the next smaller whole integer. Without limiting the generality of
the preceding sentence, if Five Arrows proposes to Transfer all shares
owned by Five Arrows then the Included Shares would include all shares
owned by the Remaining Stockholder. The net consideration per share of
Common Stock or Preferred Stock sold in accordance with this paragraph
(a) shall be computed based on (and, to the extent available, equal to)
the amount that would be payable to the Stockholders upon a liquidation
of the Company. All fees and expenses associated with any Transfer of
shares of Common Stock or Preferred Stock pursuant to this Section
3.4(a) shall be shared by the Stockholders in proportion to the
respective number of their shares of Common Stock or Preferred Stock
which are included in such Transfer. Subject to the provisions of
Section 3.4(d), the Remaining Stockholders shall cooperate and take all
necessary action to facilitate consummation of any Share Sale
Transaction, including the Transfer of all Included Shares owned by the
Remaining Stockholders.
(b) Subject to the provisions of Section 3.5, at any time from
and after a Trigger Date Event, Five Arrows shall have the right to
effectuate a Company Sale Transaction to or with an Independent Third
Party. Five Arrows may propose a Company Sale Transaction by giving the
Company and the Board notice of its intention to commence an initiative
to seek a Company Sale Transaction to an Independent Third Party. To
the extent Five Arrows seeks to provide any potential purchasers with
confidential information regarding the Company or any of its
subsidiaries, the Company and all other Stockholders shall provide to
such potential purchasers any information regarding the Company and its
subsidiaries, if any, requested by Five Arrows, provided that Five
Arrows shall, on behalf of the Company, obtain confidentiality
agreements in customary form signed by such potential purchasers. Five
Arrows shall deliver written notice to the Company setting forth the
net consideration per share of Common Stock and Preferred Stock to be
paid in connection with any such Company Sale Transaction and the terms
of payment thereof (the "Company Sale Notice") and the Company shall
promptly upon receipt thereof deliver a copy thereof to the Remaining
Stockholder. If the Company Sale Transaction is structured as a sale of
assets, the net consideration per share of Common Stock shall be
computed based upon the consideration that would be payable to the
Stockholders upon a liquidation of the Company immediately after such
sale of assets, taking into account any taxes payable by the Company
and any liabilities retained by the Company, in connection with such
sale of assets. The Remaining Stockholders shall cooperate and take all
necessary action including without limitation, voting their shares in
favor of such transaction and transfer of all shares owned by the
Remaining Stockholders to facilitate consummation of any Company Sale
Transaction.
(c) In the event of any proposed Share Sale Transaction or
Company Sale Transaction, the Company and all Stockholders shall
cooperate in all reasonable respects with the efforts of Five Arrows in
connection with any such proposed transaction, including without
limitation, by voting all Common Stock to approve such transaction and
agreeing to sell all Common Stock or Preferred Stock owned by them in
such transaction.
3.5 Hospitality Partners' Right of First Offer.
(a) In the event Five Arrows seeks to (i) effect a Hotel Sale,
or a Share Sale Transaction or a Company Sale Transaction, (ii) at any
time after a Trigger Date Event, liquidate, dissolve or wind-up the
Company or (iii) Transfer shares to a Section 3.3(c) Transferee, Five
Arrows shall deliver a notice notifying Hospitality Partners of its
intent to effect such a transaction.
(b) Hospitality Partners shall have the option (the "Option"),
exercisable in writing (the "Option Notice") no later than 15 days
following the delivery to Hospitality Partners of notice by Five
Arrows, to agree to:
(i) in the case of a Share Sale Transaction or a
Transfer to a Section 3.3 Transferee, purchase all or a portion of such
shares of Preferred Stock and Common Stock proposed to be disposed of
by Five Arrows for an amount equal to that which Five Arrows would have
received had the Company sold all of its assets and liquidated and
distributed the net proceeds to the Stockholders;
(ii) in the case of a Company Sale Transaction or a
liquidation, dissolution or winding-up of the Company, purchase all
shares of Preferred Stock and Common Stock then held by Five Arrows for
an amount equal to that which Five Arrows would have received had the
Company sold all of its assets and liquidated and distributed the net
proceeds to the Stockholders; or
(iii) in the case of a Hotel Sale, purchase such
number of shares of Preferred Stock and Common stock then held by Five
Arrows that would have been redeemed pursuant to the Mandatory
Redemption provisions of the Articles Supplementary applicable to Asset
Sales (as defined therein) had such Hotel Sale been an Asset Sale.
The amount payable to Five Arrows pursuant to this Section 3.5
shall be determined by a nationally recognized investment bank engaged by the
Company and selected by Five Arrows from a list of three investments banks
selected by Hospitality Partners from the investment banks listed on Exhibit 3.5
attached hereto, whose determination shall be final and binding on the parties.
(c) If at any time during and up until the third anniversary
of this Agreement Hospitality Partners has elected to exercise the
Option, Hospitality Partners shall pay to Five Arrows upon delivery of
the Option Notice $500,000 in cash, which shall be credited against the
purchase price of such shares of Stock, and shall consummate such
purchase within 90 days after delivery of the Option Notice to Five
Arrows. If at any time after the third anniversary of this Agreement
Hospitality Partners has elected to exercise the Option, Hospitality
Partners shall pay to Five Arrows upon delivery of the Option Notice
$200,000 in cash, which shall be credited against the purchase price of
such shares of Stock, and shall consummate such purchase within 45 days
after delivery of the Option Notice to Five Arrows. In the event
Hospitality Partners fails to consummate such purchase within the
applicable period, the payment made to Five Arrows upon delivery of the
Option Notice shall be forfeited.
(d) In the event Hospitality Partners does not elect to
purchase the shares of Stock held by Five Arrows within such 15-day
period, Five Arrows shall be entitled to dispose of such shares of
Stock, effect a Company Sale Transaction or Hotel Sale, or liquidate,
dissolve or wind-up the Company, as the case may be, in accordance with
the terms hereof.
3.6 Mandatory Exchange at the Option of Hospitality Partners.
Hospitality Partners shall have the option, exercisable in writing, to require
Five Arrows to exchange all shares of Class A Preferred Stock held by Five
Arrows into shares of CHP Common Stock in accordance with the terms of Article
IV hereof, if (i) shares of CHP Common Stock are listed on a recognized U.S.
national securities exchange or over-the-counter market, (ii) the 30 day average
trading price per share of the CHP Common Stock is $12.50 or greater (during any
30-day period) and (iii) after such exchange Five Arrows would not own more than
10% of the outstanding shares of CHP Common Stock.
ARTICLE IV
EXCHANGE OF CLASS A PREFERRED STOCK
4.1 Definitions. For purposes of this Article IV, the
following terms shall have the following meanings:
"Adjusting Distribution" shall have the meaning set forth in
paragraph (d)(ii) of Section 4.2 hereof.
"CHP Common Stock" shall mean the Common Stock, par value $.01
per share, of CHP.
"Capital Interests" shall mean any shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation (other than the Class A Preferred Stock of the Company), any and all
units or interests, participations (however designated) or other equivalents of
a partnership, and any and all equivalent ownership interests in a Person (other
than a partnership or a corporation) and any and all warrants or options to
purchase any of the foregoing.
"Company Operation Funds" of the Company for any Reported
Quarter, shall mean the sum of (a) $20, unless no cash dividends have been paid
to the holders of shares of Class B Preferred Stock with respect to such
Reported Quarter, in which event the lesser of $20 and the amount of cash
dividends per share of Class A Preferred Stock actually paid to the holders of
shares of Class A Preferred Stock during such Reported Quarter, (b) the amount
of cash dividends per share actually paid to the holders of shares of Common
Stock who also hold shares of Class A Preferred Stock during such Reported
Quarter, (c) the quotient obtained by dividing (i) the amount of all loan
principal amortization during such Reported Quarter by (ii) the number of shares
of Common Stock outstanding at the end of such Reported Quarter, and (d) the
quotient obtained by dividing (i) the amount of any increase in reserves in
working capital accounts during such Reported Quarter by (ii) the number of
shares of Common Stock outstanding at the end of such Reported Quarter, less (e)
the quotient obtained by dividing (i) the sum of (a) the amount of amortization
expense for capitalized financing costs (excluding amortization of goodwill and
other intangibles) incurred during such Reported Quarter and (b) the amount of
amortization expense for organizational costs and expenses of the Company
incurred during such Reported Quarter by (ii) the number of shares of Common
Stock outstanding at the end of such Reported Quarter.
"Constituent Person" shall have the meaning set forth in
paragraph (e) of Section 4.2 hereof.
"Exchange Date" shall mean a date on which any of the shares
of Class A Preferred Stock are exchanged for shares of CHP Common Stock pursuant
to Section 4.2 hereof.
"Exchange Ratio" shall mean the ratio for which the Class A
Preferred Stock is exchangeable as of any date, which shall be equal to the
quotient obtained by dividing the Company Operation Funds per share by the CHP
Funds From Operations per share, as such Exchange Ratio may be adjusted pursuant
to Section 4.2 hereof.
"Exchange Shares" shall have the meaning set forth in
paragraph (a) of Section 4.2 hereof.
"Fair Market Value" on any date of determination with respect
to the CHP Common Stock or any other Capital Interest, shall mean (a) $10 at
such time as the CHP Common Stock is not listed on a national securities
exchange and does not have its quotations reported through the National
Association of Securities Dealers, Inc. Automated Quotation System or (b) at
such time as the CHP Common Stock is so listed or its quotations so reported,
the average of the daily Market Prices for the 10 consecutive Trading Days
immediately preceding such date. The term "Market Price" on any date shall mean
the Closing Price for CHP Common Stock on such date. The "Closing Price" on any
date shall mean the last sale price for CHP Common Stock, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, for CHP Common Stock, as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if CHP Common Stock is
not listed or admitted to trading on the New York Stock Exchange, as reported on
the principal national securities exchange on which CHP Common Stock is are
listed or admitted to trading or, if CHP Common Stock is not listed or admitted
to trading on any national securities exchange, the last sale price in the
over-the counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System.
"Funds From Operations" shall mean as to any Person the funds
from operations of such Person per quarter as computed using such Person's most
recent quarterly financial statements but calculated in accordance with the
guidelines of the National Association of Real Estate Investment Trusts in
effect on the date hereof.
"Market Price" shall have the meaning set forth in the
definition of "Fair Market Value".
"Non-Electing Share" shall have the meaning set forth in
paragraph (e) of Section 4.2 hereof.
"Regular Quarterly Distribution" shall mean any regular cash
distributions of CHP that do not in the aggregate exceed the CHP Funds From
Operations for the quarter relating to such distribution.
"Reported Quarter" shall mean as to any Person the most recent
quarter for which Funds From Operations have been publicly reported (or would
have been reported if such Person were required to publicly report).
"Rights" shall have the meaning set forth in paragraph
(d)(iii) of Section 4.2 hereof.
"Rights Agreement" shall have the meaning set forth in
paragraph (d)(iii) of Section 4.2 hereof.
"Trading Day" shall mean any day on which the securities in
question are traded on the New York Stock Exchange, or if such securities are
not listed or admitted for trading on the New York Stock Exchange, on the
principal national securities exchange on which such securities are listed or
admitted, or if not listed or admitted for trading on any national securities
exchange, on the NASDAQ National Market, or if such securities are not quoted on
such NASDAQ National Market, in the applicable securities market in which the
securities are traded.
"Transaction" shall have the meaning set forth in paragraph
(e) of Section 4.2 hereof.
4.2 Exchange of Class A Preferred Stock. Subject to the
ownership limitations contained in Sections 7.6 and 7.7 of CHP's Articles of
Incorporation as such Articles are in effect at the time of any such exchange,
taking into account the waiver of certain ownership limitations referred to in
Section 4.3(a) of the CHP Securities Purchase Agreement, Holders of shares of
Class A Preferred Stock shall have the right to exchange all or a portion of
such shares for shares of CHP Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of this
Section 4.2, holders of shares of Class A Preferred Stock shall have
the right, at any time and from time to time, to exchange all or a
portion of such stock into the number of fully paid and non-assessable
shares of CHP Common Stock obtained by multiplying the number of shares
of Class A Preferred Stock to be exchanged (the "Exchange Shares") by
the then extant Exchange Ratio, by surrendering the Exchange Shares
together with an equal number of shares of Common Stock, such surrender
to be made in the manner provided in paragraph (b) of this Section 4.2.
(b) (i) In order to exercise the exchange right, the holder of
Exchange Shares shall surrender the certificate representing such
Exchange Shares and the certificate representing an equal number of
shares Common Stock to CHP, accompanied by written notice to the
Company and CHP that the holder thereof elects to exchange such
Exchange Shares.
(ii) Holders of Exchange Shares at the close of
business on a Distribution Payment Record Date shall be entitled to
receive the distribution payable with respect to such Exchange Shares
on the corresponding Distribution Payment Date, notwithstanding the
exchange or transfer thereof following such Distribution Payment Record
Date and prior to such Distribution Payment Date. Except as provided
above, the Company shall make no payment or allowance for unpaid
distributions, whether or not in arrears, on exchanged Exchange Shares
at the time of such exchange.
(iii) Subject to Section 4.2(c), each exchange shall
be deemed to have been effected immediately prior to the close of
business on the date on which the certificates for Exchange Shares and
the applicable number of shares of Common Stock shall have been
surrendered and such notice shall have been received by the Company and
CHP, and the person or persons in whose name or names any certificate
or certificates for shares of CHP Common Stock shall be issuable upon
such exchange shall be deemed to have become the holder or holders of
record of the shares of CHP Common Stock represented thereby at such
time on such date, and such exchange shall be at the Exchange Ratio in
effect at such time and on such date; provided, however, that if CHP
fails to deliver the CHP Common Stock deliverable upon any such
exchange, the holder of the Exchange Shares and the applicable number
of shares of Common Stock surrendered for exchange shall continue to be
deemed the holder thereof until CHP complies with such exchange.
(iv) Upon the delivery of the Exchange Shares and the
applicable number of shares of Common Stock to CHP and the consummation
of the exchange, the Exchange Shares then held by CHP shall
automatically be converted on a one for one basis into shares of Class
C Preferred Stock.
(c) The consummation of the exchange of Exchange Shares shall
be subject to compliance with any required approvals of CHP's
Stockholders or required filings with the Securities and Exchange
Commission or any stock exchange on which the shares of CHP Common
Stock may at the time be listed and the expiration or termination of
the applicable waiting period, if any, under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended. CHP shall make, at its
sole cost and expense, all filings necessary to secure such approval or
compliance and achieve such expiration or termination, if applicable,
promptly after receiving notice of the holder's election to exchange.
Each holder of Exchange Shares shall cooperate with CHP in providing
information relating to such holder as may be reasonably required in
connection with such filings and approvals.
(d) (i) The CHP Funds From Operation per share of CHP Common
Stock as reported in the Reported Quarter shall be adjusted from time
to time as follows:
If CHP shall (A) make a distribution on its
CHP Common Stock (other than Regular Quarterly Distributions), (B)
subdivide its outstanding CHP Common Stock into a greater number of
shares or (C) combine its outstanding CHP Common Stock into a smaller
number of shares after the most recent Reported Quarter, then the CHP
Funds From Operations per share of CHP Common Stock as reported in the
Reported Quarter shall be recalculated to give effect to such
distribution, subdivision or combination.
(ii) If CHP shall, by dividend or otherwise,
distribute to any holders of shares of its CHP Common Stock evidence of
its indebtedness or assets (other than Regular Quarterly Distributions)
or rights or warrants to subscribe for or purchase any of its
securities or any shares of CHP Common Stock (excluding those which are
referred to in and treated under subparagraph (i) above) (any of the
foregoing being hereinafter in this subparagraph (ii) called the
"Securities" and any dividend or distribution referred to in this
subparagraph (ii) called an "Adjusting Distribution"), then, and in
each such case, the holders of Class A Preferred Stock shall be
entitled to receive concurrently with the receipt by holders of the CHP
Common Stock the kind and amount of such Securities or Adjusting
Distribution that they would have owned or been entitled to receive had
such Class A Preferred Stock been exchanged immediately prior to such
distribution or the related record date, as the case may be. In the
event of any dividend or distribution to holders of Class A Preferred
Stock pursuant to this Section 4.2(d)(ii) in the form of assets,
properties or evidence of indebtedness, the fair market value of such
dividend or distribution, as of the date of such dividend or
distribution, shall be deducted from any amounts payable to holders of
Class A Preferred Stock upon the liquidation, dissolution or winding-up
of the Company. The fair market value of any dividend or distribution
received by the holders of Class A Preferred Stock pursuant to this
Section 4.2(d)(ii) shall be determined by a nationally recognized
investment bank engaged by the Company and selected by the holders of a
majority of Class A Preferred Stock from a list of three investments
banks selected by the Company from the investment banks listed on
Exhibit 3.5 attached hereto, whose determination shall be final and
binding on the parties.
(iii) The occurrence of a distribution or the
occurrence of any other event as a result of which holders of shares of
CHP Common Stock shall be entitled to receive rights, including
exchange rights (the "Rights"), pursuant to any shareholders protective
rights agreement (the "Rights Agreement") that may be adopted by CHP
shall not be deemed a distribution of Securities for the purposes of
any dividend or distribution pursuant to this subparagraph (ii) or
otherwise give rise to any adjustment of the CHP Funds From Operation
pursuant to this Section 4.2; provided, however, that in lieu of any
dividend, distribution or adjustment as a result of any such a
distribution or occurrence, CHP shall make provision so that Rights, to
the extent issuable at the time of exchange of any shares of Class A
Preferred Stock into shares of CHP Common Stock, shall issue and attach
to such shares of CHP Common Stock then issued upon exchange in the
amount and manner and to the extent and as provided in the Rights
Agreement in respect of issuances at the time of shares of CHP Common
Stock other than upon exchange.
(iv) All calculations under this Section 4.2
(including, without limitation, the calculation of Company Operation
Funds, Exchange Ratio and Funds From Operations) shall be made out to
the sixth decimal place (with $.000005 being rounded upward) or to the
nearest whole share, as the case may be.
(e) If CHP shall be a party to any transaction (including
without limitation a merger, consolidation, statutory share exchange,
self tender offer for all or substantially all shares of CHP Common
Stock, sale of all or substantially all of its assets or
recapitalization of the CHP Common Stock (excluding any transaction as
to which subparagraph (d)(i) of this Section 4.2 applies) (each of the
foregoing being referred to herein as a "Transaction"), in each case as
a result of which shares of CHP Common Stock shall be converted into
the right to receive stock, partnership interests, securities or other
property (including cash or any combination thereof), each share of
Class A Preferred Stock shall thereafter be exchangeable for the kind
and amount of shares of stock, partnership interests, securities and
other property (including cash or any combination thereof) receivable
upon the consummation of such Transaction by a holder of that number of
shares of CHP Common Stock for which one share of Class A Preferred
Stock was exchangeable immediately prior to such Transaction, assuming
such holder of shares of CHP Common Stock (i) is not a Person with
which CHP consolidated or into which the CHP merged or which merged
into the CHP or to which such sale or transfer was made, as the case
may be (a "Constituent Person"), or an Affiliate of a Constituent
Person, and (ii) failed to exercise his or her rights of the election,
if any, as to the kind or amount of stock, partnership interests,
securities and other property (including cash) receivable upon such
Transaction (provided that if the kind or amount of stock, partnership
interests, securities and other property (including cash) receivable
upon such Transaction is not the same for each share of CHP Common
Share held immediately prior to such Transaction by other than a
Constituent Person or an Affiliate thereof and in respect of which such
rights of election shall not have been exercised ("Non-Electing
Share"), then for the purpose of this paragraph (e) the kind and amount
of stock, partnership interests, securities and other property
(including cash) receivable upon such Transaction by each Non-Electing
Share shall be deemed to be the kind and amount so receivable per share
by a plurality of the Non-Electing Shares). The provisions of this
paragraph (e) shall similarly apply to successive Transactions.
(f) (i) If:
(1) CHP shall declare an Adjusting
Distribution; or
(2) CHP shall authorize the granting to the
holders of shares of CHP Common Stock or rights or warrants to
subscribe for or purchase any shares of any class or any other rights
or warrants (other than Rights to which the subparagraph (d)(ii) of
this Section 4.2 applies); or
(3) there shall be any reclassification of
the CHP Common Stock (other than an event to which subparagraph
(d)(i)(A) of this Section 4.2 applies) or any consolidation or merger
to which CHP is a party and for which approval of any shareholders of
CHP is required, or a statutory share exchange involving the conversion
or exchange of CHP Common Stock into securities or other property, or a
self tender offer by CHP for all or substantially all of its
outstanding CHP Common Stock, or the sale or transfer of all or
substantially all of the assets of CHP as an entirety and for which
approval of any shareholders of CHP is required; or
(4) there shall occur the voluntary or
involuntary liquidation, dissolution or winding-up of the Company or
CHP,
then the Company shall cause to be mailed to
the holders of the Class A Preferred Stock at their addresses as shown
on the records of the Company, as promptly as possible, but at least 15
days prior to the applicable date hereinafter specified, a notice
stating (A) the date on which a record is to be taken for the purpose
of such Adjusting Distribution, or granting of rights or warrants, or,
if a record is not to be taken, the date as of which the holders of
record of shares of CHP Common Stock to be entitled to such Adjusting
Distribution, or granting of rights or warrants are to be determined or
(B) the date on which such reclassification, consolidation, merger,
statutory share exchange, sale, transfer, liquidation, dissolution or
winding-up is expected to become effective, and the date as of which it
is expected that holders or record of shares of CHP Common Stock shall
be entitled to exchange their CHP Common Stock for securities or other
property, if any, deliverable upon such reclassification,
consolidation, merger, statutory share exchange, sale, transfer,
liquidation, dissolution or winding-up or (C) the date on which shares
are to be redeemed and the number of shares to be redeemed. Failure to
give or receive such notice or any defect therein shall not affect the
legality or validity of the proceedings described in this Section 4.2.
(ii) If any holders of Class A Preferred Stock have
exercised their exchange rights after receiving a notice pursuant to
this paragraph (f) but are unable to exchange such Exchange Shares for
CHP Common Stock (including, without limitation, as a result of the
circumstances described in paragraph (c) of this Section 4.2 hereof ),
CHP shall make appropriate arrangements to enable such holders to
receive the intended protections afforded by this paragraph (f).
(g) Whenever the CHP Funds From Operations per share of CHP
Common Stock as reported in the Reported Quarter is adjusted as herein
provided, CHP shall (i) promptly prepare (A) an officer's certificate
setting forth the CHP Funds From Operations per share of CHP Common
Stock after such adjustment and setting forth a brief statement of the
facts requiring such adjustment, and (B) a notice of such adjustment of
the CHP Funds From Operations per share of CHP Common Stock setting
forth the adjusted CHP Funds From Operations per share of CHP Common
Stock and the effective date that such adjustment becomes effective,
which certificate and notice shall be conclusive evidence of the
correctness of such adjustment absent manifest error, and (ii) promptly
mail such notice of such adjustment of the Exchange Ratio and a copy of
such certificate to the holders of shares of Class A Preferred Stock at
such holders' last address as shown on the records of the Company.
(h) In any case in which paragraph (d) of this Section 4.2
provides that an adjustment shall become effective on the day next
following the record date for an event, CHP may defer until the
occurrence of such event issuing to the holder of any Exchange Shares
exchanged after such record date and before the occurrence of such
event the additional shares of CHP Common Stock issuable upon such
exchange by reason of the adjustment required by such event over and
above the CHP Common Stock issuable upon such exchange before giving
effect to such adjustment.
(i) If any action or transaction would require adjustment of
the Exchange Ratio pursuant to more than one paragraph of this Section
4.2, only one adjustment shall be made, and such adjustment shall be
the amount of adjustment that results in the lowest Exchange Ratio.
(j) If CHP shall take any action affecting the CHP Common
Stock, other than action described in this Section 4.2, that would
materially adversely affect the exchange rights of the holders of
shares of the Class A Preferred Stock, the Exchange Ratio for the Class
A Preferred Stock shall be adjusted, to the extent permitted by law, in
such manner, if any, and at such time, as the holders of a majority of
the then outstanding shares of Class A Preferred Stock and the
Independent Directors (as defined in the Articles of Incorporation of
CHP) of the Board of Directors of CHP shall mutually agree.
(k) CHP shall pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
shares of CHP Common Stock or other securities or property on exchange
of the Exchange Shares pursuant hereto.
(l) The giving of a Redemption Notice by the Company shall not
affect the right of the holders of Class A Preferred Stock to exercise
the exchange right pursuant to this Section 4.2 prior to the Redemption
Date; provided, however, that if a majority of such holders require the
Company to sell, transfer or otherwise dispose of any or all of the
Hotels pursuant to Section 2.5(b)(ii) hereof, none of the holders of
Class A Preferred Stock shall be entitled to exercise such exchange
right after receiving a Notice of Redemption with respect to such sold,
transferred or otherwise disposed of Hotel or Hotels, as the case may
be.
ARTICLE V
LEGENDS ON STOCK CERTIFICATES
5.1 Legends on Stock Certificates. A copy of this Agreement
shall be filed with the Secretary of the Company and kept with the records of
the Company. Each Stockholder hereby agrees that each outstanding certificate or
other instrument representing Common Stock or Class A Preferred Stock or Class B
Preferred Stock shall bear legends reading substantially as follows:
"The securities represented by this certificate were acquired
for investment only and not for resale. They have not been registered under the
Securities Act of 1933, as amended, or any state securities law. These
securities may not be sold, transferred, pledged, or hypothecated or otherwise
disposed of unless first registered under such laws, or unless the Company has
received evidence satisfactory to it that registration under such laws is not
required."
"The securities represented by this certificate are subject to
significant restrictions on resale and transfer and certain other restrictions
as set forth in a Subscription and Stockholder's Agreement, dated as of February
24, 1999, a copy of which may be obtained from the Company or from the holder of
this certificate. No transfer of such securities will be made on the books of
the Company unless accompanied by evidence of compliance with the terms of such
Agreement."
Each such certificate or other instrument shall bear any
additional legends which may be required for compliance with state securities or
blue sky laws.
ARTICLE VI
CLOSING
6.1 Closing. Any Stockholder who is selling (a "Selling
Stockholder") and any person who is purchasing any Common Stock or Preferred
Stock from a Stockholder pursuant to Section 3.3 or 3.4 shall mutually determine
a closing date (the "Closing Date") no later than 30 days after the notice
triggering such sale has been delivered in a manner consistent with any
applicable provisions contained in this Agreement. The closing shall be held at
such time or place as the parties may agree. On the Closing Date, any Selling
Stockholder shall deliver certificates with appropriate transfer tax stamps
affixed and with stock powers endorsed in blank, representing the shares of
Common Stock or Preferred Stock to be purchased by the person exercising an
option hereunder, who shall deliver to such Stockholder the purchase price which
is payable in cash, by wire transfer of immediately available funds or by
certified check payment in New York Clearing House funds, and/or the other
consideration, if any, permitted by the terms of this Agreement to be given in
exchange for such shares.
ARTICLE VII
REPRESENTATIONS AND COVENANTS
7.1 Representations of CHP. CHP hereby represents and
warrants, as of the date hereof and as of each date Capital Stockholders are
required to contribute to the Company any portion of their respective Capital
Commitments, as follows:
(a) CHP has the full legal right, power and authority to enter
into this Agreement, the CHP Securities Purchase Agreement and the
other agreements contemplated hereby and thereby, and such instruments
do not conflict with any contract or agreement to which it is a party
or by which it is bound.
(b) The acquisition of the Portfolio Investments by the
Company does not conflict with any agreement or contract to which CHP
is bound or constitute a taking of a corporate opportunity by the
Company from CHP.
7.2 Covenants of CHP. CHP hereby covenants, for so long as any
shares of Class A Preferred Stock are outstanding, as follows:
(a) CHP shall not be a party to any sale, merger or
consolidation transaction unless the terms of such transaction are
consistent with the provisions hereof, and it shall not consent or
agree to the occurrence of any such transaction until CHP has entered
into an agreement with the successor or purchasing entity, as the case
may be, for the benefit of the holders of the Class A Preferred Stock
that will contain provisions enabling the holders of the Class A
Preferred Stock that remain outstanding after such transaction to
exchange their shares of Class A Preferred Stock into the consideration
received by holders of shares of CHP Common Stock at the Exchange Ratio
in effect, immediately prior to such transaction.
(b) CHP shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued shares of
CHP Common Stock, for the purpose of effecting the exchange of shares
of Class A Preferred Stock, the full number of shares of CHP Common
Stock that at any time and from time to time would be deliverable upon
the exchange of all of the shares of Class A Preferred Stock not
theretofore exchanged.
(c) CHP further covenants that any shares of CHP Common Stock
issued upon exchange of shares of CHP Common Stock into which the
shares of Class A Preferred Stock are exchangeable shall be validly
issued, fully paid and non-assessable. Before taking any action that
would cause an adjustment reducing the Exchange Ratio below the
then-par value of shares of CHP Common Stock deliverable upon such
exchange, CHP shall take any corporate action that in the opinion of
its counsel, may be necessary in order that CHP may validly and legally
issue fully paid and non-assessable shares of CHP Common Stock at such
adjusted Exchange Ratio.
(d) CHP further covenants that as promptly as practicable
after the surrender of certificates of shares of Class A Preferred
Stock, CHP shall cause to be delivered to such holder, or on such
holders written order, a certificate or certificates for the number of
shares of CHP Common Stock issuable upon exchange of such Class A
Preferred Stock in accordance with the terms hereof.
(e) CHP further covenants that upon receipt of any certificate
representing shares of Class A Preferred Stock, which pursuant to
Section 4.2(b)(iv) hereof shall have been automatically converted into
shares of Class C Preferred Stock, CHP shall promptly deliver such
certificate to the Company so that the Company may issue to CHP a
certificate or certificates representing an identical number of shares
of Class C Preferred Stock.
(f) Other than in accordance with and pursuant to employee
benefit plans approved by the Board of Directors of CHP, CHP shall not
issue any shares of CHP Common Stock (or rights, warrants or other
securities convertible into or exchangeable for CHP Common Stock) after
the date hereof at a purchase price per share (or having a conversion,
exchange or exercise price per share of CHP Common Stock) (excluding
the value of services and other intangible assets) of less than $9.50.
7.3 Representations of Five Arrows. Five Arrows hereby
represents and warrants, as of the date hereof and as of each date Capital
Stockholders are required to contribute to the Company any portion of their
respective Capital Commitments as follows:
(a) Five Arrows has the full legal right, power and authority
to enter into this Agreement, the CHP Securities Purchase Agreement and
the other agreements contemplated hereby and thereby.
(b) The acquisition of the Portfolio Investments by the
Company does not conflict with any agreement or contract to which Five
Arrows is bound or constitute a taking of a corporate opportunity by
the Company from Five Arrows.
(c) Five Arrows is an accredited investor as defined in Rule
501 under the Securities Act of 1933, as amended.
7.4 Covenants of Five Arrows. If at any time Five Arrows takes
control of a majority of the Board in accordance with the terms hereof and the
Articles Supplementary, and at such time terminates the Management Agreement and
elects to enter into another agreement pursuant to which the Company would
receive services similar to those provided under the Management Agreement, Five
Arrows covenants that it will cause the Company to enter into such agreement,
having a term of not more than two (2) years and that may be terminated within
six (6) months of such termination date (or such other term or termination
provisions as are required by then applicable rules, guidelines or regulations),
only with unaffiliated third parties.
7.5 Representations of Hospitality Partners. Hospitality
Partners hereby represents and warrants, as of the date hereof and as of each
date Capital Stockholders are required to contribute to the Company any portion
of their respective Capital Commitments, as follows:
(a) Hospitality Partners has the full legal right, power and
authority to enter into this Agreement and the other agreements
contemplated hereby, and such instruments do not conflict with any
contract or agreement to which it is a party or by which it is bound.
(b) The acquisition of the Portfolio Investments by the
Company does not conflict with any agreement or contract to which
Hospitality Partners is bound or constitute a taking of a corporate
opportunity by the Company from Hospitality Partners.
(c) Hospitality Partners is an accredited investor as defined
in Rule 501 under the Securities Act of 1933, as amended.
ARTICLE VIII
MISCELLANEOUS
8.1 Expenses. The reasonable costs and expenses, including,
without limitation, attorney's and accountant's fees and expenses, of each of
Five Arrows, Rothschild Realty, Inc. ("Rothschild") and Hospitality Partners
shall be paid by the Company on the date on which Five Arrows and Hospitality
Partners contribute the initial portion of their respective Capital Commitments
hereunder. In addition, the Company shall pay to Rothschild a commitment fee in
an amount equal to $523,860 (the "Commitment Fee") in cash, by wire transfer to
an account specified by Rothschild. Prior to the date hereof, the Company has
paid $100,000 to Rothschild and shall pay to Rothschild the balance of the
Commitment Fee shall be payable on the date on which Five Arrows contributes the
initial portion of its Capital Commitment hereunder.
8.2 Injunctive Relief. It is acknowledged that it will be
impossible to measure in money the damages that would be suffered if the parties
hereto fail to comply with any of the obligations herein imposed on them and
that in the event of any such failure, an aggrieved person will be irreparably
damaged and will not have an adequate remedy at law. Except with respect to
Section 1.3 hereof, in addition to any other remedies available at law or in
equity, any such person shall, therefore, be entitled to injunctive relief,
including specific performance, to enforce such obligations, and if any action
should be brought in equity to enforce any of the provisions of this Agreement,
none of the parties hereto shall raise the defense that there is an adequate
remedy at law.
8.3 Notice. All notices, statements, instructions or other
documents required to be given hereunder, shall be in writing and shall be given
either personally, by telecopy (followed by first class U.S. mail), by Federal
Express or other reputable express delivery service for overnight delivery, or
by mailing the same in a sealed envelope, first-class mail, postage prepaid and
either certified or registered, return receipt requested, addressed to the
Company at its principal offices and to the other parties at their addresses
reflected in the stock records of the Company. Each Stockholder, by written
notice given to the Company in accordance with this Section 8.3 may change the
address to which notices, statements, instructions or other documents are to be
sent to such Stockholder. All notices, statements, instructions and other
documents shall be deemed to have been given on the date of delivery, if given
personally, by telecopy, or by overnight courier, or two days after the date of
mailing, if mailed. Whenever pursuant to this Agreement any notice is required
to be given by any Stockholder to any other Stockholder or Stockholders, such
Stockholder may request from the Company a list of addresses of all Stockholders
of the Company, which list shall be promptly furnished to such Stockholder.
8.4 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties, and their respective
successors and assigns. If any transferee of any Stockholder shall acquire any
Common Stock, in any manner, whether by operation of law or otherwise, such
Common Stock shall be held subject to all of the terms of this Agreement, and by
taking and holding such Common Stock such person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement; provided, however, that nothing in this Section 8.4 shall give
any Stockholder any right to transfer any shares of Common Stock on
contravention of the terms of this Agreement.
8.5 Governing Law. Regardless of the place of execution, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Maryland, applicable to agreements made and to be wholly performed in
such State, without regard to principles of conflicts of laws of Maryland or of
any other jurisdiction.
8.6 Headings. Section headings are inserted herein for
convenience only and do not form a part of this Agreement. Unless otherwise
indicated, reference in this Agreement to a Section shall be deemed to refer to
such Section of this Agreement.
8.7 Entire Agreement; Amendment. This Agreement (together with
all exhibits hereto) contains the entire agreement among the parties hereto with
respect to the transactions contemplated herein, supersede all prior written
agreements and negotiations and oral understandings among the parties hereto,
and may not be discharged except by performance, or amended or supplemented
except by an instrument in writing signed by the Company, CHP, and each person
or entity which at the time of such amendment beneficially owns any shares of
Class A Preferred Stock or Class B Preferred Stock. The parties hereto
acknowledge and agree that in the event that any conflict or inconsistency
between the provisions of this Agreement and the CNL Hospitality Properties,
Inc. Subscription Agreement to be delivered pursuant to the CHP prospectus, the
provisions of this Agreement shall govern and be deemed controlling.
8.8 Inspection. So long as this Agreement shall be in effect,
this Agreement shall be made available for inspection by any stockholder of the
Company at the principal offices of the Company.
8.9 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[The remainder of this page has been intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the date first written above.
CNL HOTEL INVESTORS, INC.
By:/s/ Xxxxx X. Xxxxxx, Xx.
----------------------------
Name:Xxxxx X. Xxxxxx, Xx.
Title:Chairman and Chief Executive
Officer
FIVE ARROWS REALTY SECURITIES II L.L.C.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Manager
CNL HOSPITALITY PARTNERS, LP
By: CNL Hospitality GP Corp., its
general partner
By: /s/ Xxxxx X. Xxxxxx, Xx.
------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title:Chairman and Chief Executive
Officer
CNL HOSPITALITY PROPERTIES, INC.
By:/s/ Xxxxx X. Xxxxxx, Xx.
---------------------------
Name:Xxxxx X. Xxxxxx, Xx.
Title:Chairman and Chief Executive
Officer
SCHEDULE 2.1A
Articles of Incorporation of the Company
SCHEDULE 2.1B
Articles Supplementary of the Company
SCHEDULE 2.1C
Bylaws of the Company
EXHIBIT 1.3
Hotels
Project Owner
------------------------------- ----------------------------------
Courtyard:
Addison, TX Acourt Property, Ltd.
Plano, TX PLC Hotel Property, Ltd.
Scottsdale, AZ XXXX Property, L.P.
Seattle, WA Westlake Hotel Property, L.P.
Residence Inn:
Las Vegas, NV LVHC Hotel Property,
Limited Partnership
Phoenix, AZ PARI Hotel Property, L.P.
Plano, TX PLRI Hotel Property, Ltd.
Marriott Suites:
Dallas, TX Marcen Property, Ltd.
EXHIBIT 3.5
Investment Bank Choices
AG Xxxxxxx
Xxxxx & Company Incorporated
BancBoston Xxxxxxxxx Xxxxxxxx Inc.
Bear Xxxxxxx & Co. Inc.
BT Alex. Xxxxx Incorporated
CS First Boston Corporation
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Xxxxxxx Sachs & Co.
ING Barings Xxxxxx Xxxx L.L.C.
Xxxx Xxxxx
XX Xxxxxx Securities Inc.
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Nationsbanc Xxxxxxxxxx Securities L.L.C.
Xxxxx Xxxxxx Incorporated
Xxxxxxx Xxxxx Barney Inc.
