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EXHIBIT 10.2
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HOTEL PROPERTIES AGREEMENT
BETWEEN
HOLIDAY HOSPITALITY CORP.
AND
BRISTOL HOTELS & RESORTS, INC.
DATED __________, 1998
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TABLE OF CONTENTS
Page
ARTICLE 1
HOTEL PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Franchise Offer . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Right of First Offer on Future Opportunities . . . . . . . . . 3
1.3. Right of First Offer on Research & Training
Hotels . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.4. Assignment and Conversion of Certain Hotels . . . . . . . . . 5
ARTICLE 2
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 5
2.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3. Amendment; Waiver; Termination . . . . . . . . . . . . . . . . 6
2.4. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.5. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 7
2.6. Counterparts; Effectiveness . . . . . . . . . . . . . . . . . 7
2.7. Successors and Assigns . . . . . . . . . . . . . . . . . . . . 7
2.8. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.9. Specific Enforcement . . . . . . . . . . . . . . . . . . . . . 7
2.10. Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . 7
2.11. Original Agreement . . . . . . . . . . . . . . . . . . . . . . 8
2.12. Cooperation. . . . . . . . . . . . . . . . . . . . . . . . . 8
2.13. Acknowledgment of No Liability. . . . . . . . . . . . . . 8
2.14. Failure of Merger to Occur. . . . . . . . . . . . . . . . . . 8
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HOTEL PROPERTIES AGREEMENT
This Hotel Properties Agreement is entered into as of _______________,
1998 (this "Agreement") between Holiday Hospitality Corp., a Delaware
corporation ("HHC"), and Bristol Hotels & Resorts, Inc., a Delaware corporation
("BHR").
W I T N E S S E T H:
WHEREAS, HHC and its affiliates are engaged in, among other things, the
business of franchising certain hotel properties under the Holiday Hospitality
Hotel Brands (as defined herein), including certain hotels owned, leased or
managed by Bristol Hotel Company, a Delaware corporation ("Bristol"), or its
subsidiaries, which are the subject of franchise agreements with HHC (the
"Existing Hotels");
WHEREAS, pursuant to the Spin-Off Agreement dated as of March 23, 1998
(the "Spin-Off Agreement") among Bristol, Bristol Hotel Management Corporation
and BHR, (i) BHR and its subsidiaries will continue Bristol's hotel management
business and will manage, lease and operate, or own and operate all of the
hotels presently owned, managed, or leased by Bristol, a list of which is set
forth on Exhibit A hereto, (ii) Bass America Inc., a Delaware corporation
("BAI"), and Holiday Corporation, a Delaware corporation ("HC") will acquire in
the aggregate ________ shares of common stock, par value $.01 per share, of BHR
and (iii) BHR or one of its subsidiaries will become the franchisee under one
or more franchise agreements with HHC in respect of the Existing Hotels;
WHEREAS, HC and Bristol are parties to the Hotel Properties Agreement
dated April 28, 1997 (the "Original Agreement"), and they now desire to
terminate that agreement in its entirety.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
HOTEL PROPERTIES
1.1. Franchise Offer. (a) BHR and its subsidiaries may offer from time
to time to HHC, or an Affiliate (as defined in the Spin-Off Agreement) thereof,
the opportunity to enter into a standard franchise agreement in effect at such
time (a "Standard Franchise Agreement") for a Hotel (a "Franchise Offer"). BHR
must make any such Franchise Offer to HHC pursuant to a written notice from BHR
to the Vice President of Franchise Development at HHC for the particular
Holiday Hospitality Hotel Brand desired by BHR (a "Franchise Offer Notice").
If HHC desires to accept such Franchise Offer (which acceptance shall not be
unreasonably withheld), HHC must so notify BHR in writing (a "Franchise
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Acceptance Notice") within 30 days of its receipt of the notice from BHR. If
HHC delivers a Franchise Acceptance Notice within that 30-day period, BHR and
HHC will cause the Hotel to become subject to a Standard Franchise Agreement on
market terms. As used in this Section 1.1, "Hotel" means a lodging facility
providing a degree of sophistication and amenities and facilities which is of a
type and standard generally consistent with hotels operated as Holiday
Hospitality Hotel Brand hotels. As used in this Agreement, "Holiday
Hospitality Hotel Brands" means Holiday Inn, Holiday Inn Select, Holiday Inn
Express, Crowne Plaza, Inter-Continental, and any other hotel brand owned or
controlled by HHC or any of its Affiliates (the "HC Entities").
(b) BHR and its subsidiaries must make Franchise Offers and enter
into Standard Franchise Agreements with respect to Hotels (other than Existing
Hotels) having an aggregate of 3,000; 5,200; and 8,700 rooms (each, a
"Threshold") by April 1, 2001, April 1, 2002 and April 1, 2003 (each, a
"Measurement Date"), respectively. If BHR fails to meet the applicable
Threshold by a Measurement Date, BHR will pay to HHC a monthly fee equal to
$73.50 multiplied by the excess of the applicable Threshold over the number of
rooms that were subjected to Standard Franchise Agreements under Section 1.1(a)
through that Measurement Date. BHR will continue to pay that fee until the
earlier of (i) with respect to the first Measurement Date, March 31, 2002; with
respect to the second Measurement Date, March 31, 2003; and with respect to the
third Measurement Date, March 31, 2006, or (ii) the date on which BHR satisfies
the applicable Threshold. Notwithstanding the foregoing, if on any Measurement
Date no more than 15% of the aggregate number of rooms in Hotels which BHR or
any of its subsidiaries develops, acquires, leases, or is appointed manager
after the date of this Agreement, are not subjected to Standard Franchise
Agreements, BHR will not be required to make any payment under this Section
1.1(b) as to that Measurement Date. Any Hotel that was the subject of a
Franchise Offer that HHC failed to accept will not be taken into consideration
in calculating the percentage of rooms in Hotels not subject to Standard
Franchise Agreements pursuant to this Section 1.1(b).
(c) BHR's obligations under this Section 1.1 will terminate on the
earliest to occur of (i) the effectiveness of HHC's termination notice
described in Section 1.2(b), (ii) the HC Entities are no longer holding a
Controlling interest in the entities that directly or indirectly hold the
intellectual property rights related to the Holiday Inn, Holiday Inn Express or
Crowne Plaza brands, and (iii) BHR having made Franchise Offers with respect to
Hotels which are subjected to Standard Franchise Agreements and have an
aggregate of at least 8,700 rooms. For purposes of this Section 1.1, any Hotel
that is subjected to a Standard Franchise Agreement under Section 2.1 of the
Original Agreement after March 31, 1998 (other than those
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acquired in the transaction with Omaha Hotel, Inc.), will be deemed to have
been the subject of a Franchise Offer and a Standard Franchise Agreement under
this Section 1.1.
1.2. Right of First Offer on Future Opportunities. (a) If the HC
Entities wish to acquire a direct or indirect equity, or other similar interest
in, or the right to develop, a Mid-Scale Lodging Facility located in the United
States or Canada (each an "Opportunity"), subject to Sections 1.2(c) and (d),
the HC Entities will first offer the Opportunity to BHR pursuant to a written
notice (an "Opportunity Notice") that describes the Opportunity and will be
accompanied by any relevant information held by the HC Entities regarding the
Opportunity, and any analysis performed by the HC Entities regarding the
Opportunity. If BHR desires to pursue the Opportunity, it will notify the HC
Entities in writing of its desire to pursue the Opportunity within 10 days of
receipt of the Opportunity Notice. Upon receipt of BHR's notice that it
desires to pursue the Opportunity, (i) the HC Entities will assign to BHR all
rights the HC Entities may have in respect of the Opportunity and will take all
reasonable actions to permit BHR to acquire all rights related to the
Opportunity and to enter into definitive agreements with any other Person
related or necessary to the Opportunity, (ii) BHR will actively pursue the
Opportunity, (iii) the HC Entities will not be entitled to pursue any aspect of
the Opportunity (other than entering into a franchise arrangement under Section
1.1 with BHR) and (iv) BHR and the HC Entities will enter into a Standard
Franchise Agreement with respect to the Mid-Scale Lodging Facility that is
subject to the Opportunity. If requested by HHC, but subject to
confidentiality or other requirements applicable to BHR, BHR will provide to
HHC drafts of letters of intent or material agreements relating to BHR's
pursuit of the Opportunity. HHC will hold any such information in strict
confidence and will not provide any such information to any Person who does not
have an appropriate reason to receive such information. If BHR determines that
it no longer wishes to actively pursue an Opportunity, BHR will promptly
deliver written notice of such determination to HHC (an "Abandonment Notice").
If BHR delivers an Abandonment Notice to HHC, or if the HC Entities do not
receive a notice from BHR indicating its desire to pursue an Opportunity within
that 10-day period, the HC Entities may pursue the Opportunity without being
subject to Section 1.2(b) and BHR will have no further rights regarding the
Opportunity. The HC Entities shall not be subject to the provisions of this
Section 1.2(a) if (i) the HC Entities pursue minority equity interests in or
advance loans to Opportunities provided that such equity interests or loans are
primarily taken or made as an inducement to a Person to enter into or maintain
franchise arrangements for the Holiday Hospitality Hotel Brands or enter into
or maintain a management opportunity pursuant to Section 1.2(d) below or (ii)
the HC Entities would beneficially own less than 5 percent of the
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Opportunity in a publicly-traded company. As used herein, "Mid-Scale Lodging
Facility" means a full service lodging facility providing a degree of
sophistication and full service amenities and facilities which (i) is of a type
and standard generally consistent with hotels operated as Holiday Inn hotels in
the United States and Canada (which will include any Hotel that is then
operated as a Holiday Inn or Holiday Inn Select Hotel), (ii) does not primarily
offer suites, (iii) is not designed to accommodate "extended stays" (generally
more than five days) and (iv) does not generally compete as an "upscale" or
"economy" hotel. By way of example and for the guidance of the parties, the
parties acknowledge that as of this date they would, without dispute, classify
the hotel operations listed on Schedules 1.2(a)(1) and 1.2(a)(2) as "upscale"
hotels and "economy" hotels, respectively.
(b) At any time after October 28, 1998, the HC Entities may terminate
their obligations under Section 1.2(a) upon six months' advance written notice
to BHR.
(c) From the date of the Original Agreement, HHC will be permitted to
acquire up to five hotels in the United States and Canada that will not be
subject to the provisions of this Section 1.2 for research and training
("Research & Training Hotels"); provided that (i) HHC must provide BHR with
prior written notice of its intention to acquire any Research & Training Hotel
and (ii) none of such hotels is located in the same geographic markets of the
hotels owned, leased or managed by BHR or any of its subsidiaries. Subject to
clauses (i) and (ii) of the foregoing sentence, HHC will be permitted to
develop an unlimited number of Research & Training Hotels. If an HC Entity
proposes to pursue a sale of any facility under this Section 1.2(c), such
facility will be subject to Section 1.3 of this Agreement.
(d) Nothing in this Section 1.2 is intended to prohibit the HC
Entities from engaging in the business of managing Mid-Scale Lodging
Facilities; provided however, the HC Entities will notify BHR pursuant to a
written notice that the HC Entities intend to engage in such business. Upon
receipt of the HC Entities' notice that they intend to engage in such
management business, Section 1.2(a) will no longer apply to such management
Opportunities. The HC Entities will provide BHR an additional written notice
of their intent to pursue each management opportunity. That additional notice
must be delivered contemporaneously with their bidding on the management
Opportunity and will identify the hotel subject to the management Opportunity.
1.3. Right of First Offer on Research & Training Hotels. If an HC
Entity proposes to pursue a sale of any Research & Training Hotel that it owns,
the HC Entity will provide written
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notice to BHR of its intention to pursue such sale. If BHR desires to purchase
the hotel, BHR and the HC Entity will promptly enter into good faith
negotiations to finalize a definitive agreement to acquire such hotel, but the
parties will have no obligation to enter into such an agreement.
1.4. Assignment and Conversion of Certain Hotels. (a) Upon BHR's
submission of appropriate documentation in accordance with HHC's standard
practices, HHC will consent to BHR's or its subsidiary's becoming the
franchisee under the existing franchise agreements that relate to an Existing
Hotel and each existing franchise agreement will continue on the same terms.
The fee for effecting such assignments shall be $1,000 per Hotel.
(b) HHC and BHR will use their respective reasonable efforts to cause
the hotels described in Section 2.4 of the Original Agreement to enter into
franchise agreements with HHC for the Holiday Hospitality Hotel Brand as agreed
upon, such franchise agreements to be on the same terms contemplated by the
Original Agreement.
ARTICLE 2
MISCELLANEOUS
2.1. Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and supersedes
all prior agreements and understandings, both written and oral, with respect to
the subject matter hereof and except as otherwise expressly provided herein and
therein. This Agreement will have no effect on any rights or obligations HC,
BAI, Holdings (as defined in the Spin-Off Agreement) or BHR may have under any
registration rights agreement or shareholders agreement.
2.2. Notices. (a) All notices, requests and other communications to
any party hereunder shall be in writing (including telecopy or similar writing)
and shall be given,
if to BHR, to:
Bristol Hotels & Resorts, Inc.
00000 Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
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with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
if to HHC, to:
Holiday Corporation
Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx
Telecopy: (000) 000-0000
with copies to:
Crowne Plaza - Corporate Headquarters
Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
and
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
(b) Each party hereto may hereafter specify such other address or
telecopy number for the purpose by notice to the other parties hereto. Each
such notice, request or other communication shall be effective (a) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified in
this Section 2.2(a) and the appropriate telecopy confirmation is received or
(b) if given by any other means, when delivered at the address specified in
this Section 2.2(a).
2.3. Amendment; Waiver; Termination. (a) No provision of this
Agreement may be waived except by an instrument in writing executed by the
party against whom the waiver is to be effective. No provision of this
Agreement may be amended or otherwise modified except by an instrument in
writing executed by each party.
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(b) This Agreement shall terminate on the earliest of (i) 6 months
after the HC Entities have delivered to BHR the notice described in Section
1.2(b) and (ii) the mutual agreement of the parties hereto.
2.4. Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense; provided, however, that, in any action or
proceeding brought to enforce any provision of this Agreement or where any
provision of this Agreement is validly asserted as a defense, the successful
party will be entitled to recover its cost and expense (including reasonable
attorneys' fees and charges) in addition to any other available remedy.
2.5. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE REGARDLESS OF THE LAWS
THAT MIGHT OTHERWISE GOVERN UNDER THE PRINCIPLES OF CONFLICT OF LAWS APPLICABLE
THERETO.
2.6. Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have
received counterparts hereof signed by all of the other parties hereto.
2.7. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto.
2.8. Headings. The headings contained in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
2.9. Specific Enforcement. Each party hereto acknowledges that the
remedies at law of the other parties for a breach or threatened breach of this
Agreement would be inadequate and, in recognition of this fact, any party to
this Agreement, without posting any bond, and in addition to all other remedies
which may be available, shall be entitled to obtain equitable relief in the
form of specific performance, a temporary restraining order, a temporary or
permanent injunction or any other equitable remedy which may then be available.
2.10. Consent to Jurisdiction. Any suit, action or proceeding seeking
to enforce any provision of; or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in the Court
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of Chancery in the State of Delaware, and each of the parties hereby consents
to the non-exclusive jurisdiction of such court (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 2.2 shall
be deemed effective service of process on such party.
2.11. Original Agreement. Upon the effectiveness of the Spin-Off (as
defined in the Spin-Off Agreement), the Original Agreement will terminate and
the parties to the Original Agreement will be released from any obligations
under the Original Agreement other than with respect to any claims asserted in
writing before the effectiveness of the Spin-Off.
2.12. Cooperation. BHR will follow HHC's standard procedures for
entering into franchise arrangements in entering into any Standard Franchise
Agreement with respect to Hotels pursuant to this Agreement.
2.13. Acknowledgment of No Liability. HC and HHC acknowledge that the
obligations of BHR under this Agreement shall not be assumed by FelCor pursuant
to the merger of Bristol with and into FelCor pursuant to the Merger Agreement,
dated March 23, 1998, between Bristol and FelCor (the "Merger Agreement") or
otherwise.
2.14. Failure of Merger to Occur. If the Spin-Off is consummated and
the Merger Agreement is terminated, the parties to this Agreement and the
Original Agreement will negotiate in good faith to amend the provisions of this
Agreement in such a manner that the terms of this Agreement will provide
substantially the same effect as those under the Original Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
HOLIDAY HOSPITALITY CORP.
By:
----------------------------------
Name:
Title:
BRISTOL HOTELS & RESORTS, INC.
By:
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Name:
Title:
The undersigned hereby agree
to the terms of Sections 2.11,
2.13 and 2.14.
BRISTOL HOTEL COMPANY
By:
----------------------------------
Name:
Title:
HOLIDAY CORPORATION
By:
----------------------------------
Name:
Title:
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SCHEDULE 1.2(a)(1)
"UPSCALE HOTELS"
Crowne Plaza
Doubletree
Hilton Hotels
Marriott
Hyatt
Westin
Inter-Continental
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SCHEDULE 1.2(a)(2)
"ECONOMY HOTELS"
Budgetel
Comfort Inn
Days Inn
Holiday Inn Express
Red Roof Inn
Ramada Limited
Econo Lodge
Motel 6
