EXHIBIT 10.27
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (the "Agreement") is made and
entered as of this 17th day of October, 1995, by and among PROMUS
HOTELS, INC. ("Promus"), a Delaware corporation, FELCOR SUITE
HOTELS, INC. (the "Company"), a Maryland corporation, and FELCOR
SUITES LIMITED PARTNERSHIP (the "Partnership"), a Delaware limited
partnership.
RECITALS
A. Promus owns, operates and franchises hotels under the
trademark and service xxxx Embassy Suites ("Embassy Suites
hotels").
B. The Company owns an approximate 82.8% general partner
interest in the Partnership, which currently owns interests in
thirteen Embassy Suites hotels, all of which hotels are leased by
the Partnership to DJONT Operations, L.L.C. (the "Lessee").
C. All of the Embassy Suites hotels currently owned by the
Partnership are operated by the Lessee under franchise licenses
from Promus pursuant to franchise license agreements between the
Lessee and Promus, and twelve of the Embassy Suites hotels
currently owned by the Partnership are managed on behalf of the
Lessee by Promus pursuant to management agreements between the
Lessee and Promus.
D. As of September 19, 1995, Felcor/CSS Holdings, L.P. and
PFS Ventures, Inc. ("FelCor") entered into documents (as in effect
on such date and without regard to any subsequent amendments or
modifications thereto, the "Acquisition Documents") regarding the
acquisition by FelCor of fee ownership of thirteen Crown Sterling
hotels, ground leases in three Crown Sterling hotels, general and
limited partnership interests in the LAX and Mandalay Crown
Sterling hotels (the "Partnership Interests"), the Crown Sterling
trademark and related intellectual property and all management and
license agreements with respect to Crown Sterling (collectively the
"Crown Sterling Hotel Chain"). The acquisition contemplated by the
Acquisition Documents is intended to be closed in two or more
phases. At a closing anticipated for November 15, 1995 (the "First
Crown Sterling Closing"), it is contemplated that FelCor will
acquire up to seven Crown Sterling hotels, the Partnership
Interests, the Crown Sterling trademark and related intellectual
property, and the management and license agreements relating to
such hotels. It is contemplated that FelCor will acquire the
remaining Crown Sterling hotels and the remainder of the Crown
Sterling Hotel Chain at a second closing (the "Second Crown
Sterling Closing") anticipated for January 3, 1996, but extendible
to a date not later than February 15, 1996.
E. The Company intends to undertake a public offering of its
common stock, $0.01 par value (the "Common Stock") pursuant to a
registration statement to be filed with the Securities and Exchange
Commission on or shortly after October 18, 1995 (the "Public
Offering"), all of the proceeds of which will be contributed by the
Company to the Partnership for use by the Partnership, in part, to
complete the acquisition by FelCor contemplated by the Acquisition
Documents. Concurrently with the Public Offering, Promus shall
purchase Common Stock in the amount of Twenty-Five Million Dollars
($25,000,000), at a per share price equal to the per share price at
which shares of Common Stock are sold in the Public Offering,
pursuant to the same registration statement in a concurrent
offering (the "Promus Offering").
F. Also in connection with the acquisition contemplated by
the Acquisition Documents and certain other acquisitions as set
forth herein, Promus has agreed to subscribe for the purchase of up
to Twenty-Five Million Dollars ($25,000,000) in Common Stock and/or
units of limited partner interest of the Partnership (the "Units")
upon the terms outlined in this Agreement (the "Crown Sterling
Subscription"). Subject to the terms and conditions set forth in
this Agreement, the aggregate amount committed by Promus in
connection with the Promus Offering and the Crown Sterling
Subscription shall be up to Fifty Million Dollars ($50,000,000),
subject to compliance with applicable law.
G. The parties to this Agreement agree that Promus will have
the right to sell to the public any Common Stock and/or Units
received in the Promus Offering and/or pursuant to the Crown
Sterling Subscription at any time following one year from the date
of first issuance of said Common Stock and/or Units to Promus.
AGREEMENT
NOW, THEREFORE, FOR AND IN CONSIDERATION of the mutual
promises and covenants contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties do hereby agree as follows:
1. Terms of Subscription
(a) Promus Offering. Promus hereby
subscribes for and agrees to consummate the Promus
Offering at the purchase price determined in
accordance with Section 2 below.
(b) Crown Sterling Subscription. Promus
hereby subscribes for and agrees to purchase, from
time to time, Common Sock and/or Units in
consummation of the Crown Sterling Subscription,
subject to the limitations set forth in Section
1(e) below, at the purchase price determined in
accordance with Section 2 below. The Crown
Sterling Subscription shall consist exclusively of
Common Stock unless, at the time of any incremental
purchase (each a "Crown Sterling Incremental
Purchase"), Promus owns the maximum amount of
Common Stock (the "Limit") permitted under the
charter of the Company and no waiver of such Limit
can be made without jeopardizing the Company's REIT
status.
(c) Units. Any Crown Sterling Incremental
Purchase which, if consisting exclusively of Common
Stock, would result in Promus owning an amount of
Common Stock in excess of the Limit shall consist
of (i) in those instances where, prior to
undertaking the Crown Sterling Incremental Purchase
in question, Promus did not own an amount of Common
Stock equal to or in excess of the Limit, (A)
Common Stock up to and until such point as Promus
owns the Limit of Common Stock and (B) Units in
sufficient number to satisfy any difference between
the dollar amount of such Crown Sterling
Incremental Purchase and the dollar amount of
Common Stock received by Promus pursuant to clause
(A) above, or (ii) in those instances where, prior
to undertaking the Crown Sterling Incremental
Purchase in question, Promus owns an amount of
Common Stock equal to or in excess of the Limit,
Units exclusively. To the extent that any
provision of the charter of the Company would
restrict the amount of Common Stock which Promus
could acquire, the Company agrees to waive such
restriction so long as its REIT status would not be
jeopardized as a result of such waiver.
(d) Redemption of Units. Each Unit shall be
redeemable by Promus, at any time following one
year after the date of first issuance of such Units
pursuant to this Section 1 for one share of Common
Stock, subject only to the restrictions contained
in Section 7.5 of the Amended and Restated
Agreement of Limited Partnership of the
Partnership, dated as of July 25, 1994 (as in
effect as of the date of this Agreement and without
regard to any subsequent amendments or
modifications thereto, the "Partnership
Agreement"); provided, that if Promus would be
subject to the recovery of profits under
Section 16(b) of the Securities Exchange Act of
1934, as amended, with respect to the redemption of
such Units for cash, the Partnership shall not
satisfy such redemption in whole or in part with
cash without the prior consent of Promus.
(e) Limitations. Promus' agreement herein to
purchase Common Stock and/or Units in the Crown
Sterling Subscription, the proceeds of which are to
be used by the Partnership to complete the
acquisition by FelCor pursuant to the Acquisition
Documents shall not exceed at any time the amount
(the "Aggregate Subscription Limit") by which the
Closed Hotel Amount (as hereinafter defined)
exceeds Twenty-Five Million Dollars ($25,000,000).
The "Closed Hotel Amount" shall equal Fifty Million
Dollars ($50,000,000) times a fraction, the
numerator of which is the sum of the Allocated
Purchase Price (as set forth on Exhibit A hereto)
for all hotels the purchase of which has been
closed pursuant to the Acquisition Documents, and
the denominator of which shall equal Four Hundred
Eighty-Five Million Five Hundred Thirty-Eight
Thousand Seven dollars ($485,538,007). The
difference between the Aggregate Subscription Limit
and Twenty Five Million Dollars ($25,000,000) shall
be available for purchases of Qualifying Hotels, as
defined in, and pursuant to the terms and
conditions of, that certain Subscription Agreement,
dated as of May 3, 1995 by and among Embassy
Suites, Inc., the Company and the Partnership (the
"Prior Subscription Agreement") as though such
terms and conditions of the Prior Subscription
Agreement were set forth herein, and in no event
shall the amount of Common Stock and/or Units
purchased by Promus hereunder (other than pursuant
to the Promus Offering) exceed Twenty Five Million
Dollars ($25,000,000).
(f) Sale. Subject to Section 8(d) hereof,
Promus may not sell to the public any Common Stock
and/or Units received in the Promus Offering,
pursuant to the Crown Sterling Subscription or upon
redemption of such Units until at least one year
following the date of first issuance of said Common
Stock and/or Units.
2. Purchase Price. The purchase price for each share of
Common Stock and each Unit acquired hereunder (the "Crown Sterling
Purchase Price") shall be equal to the public offering price per
share at which shares of Common Stock are sold in the Public
Offering.
3. Conditions to Purchase. The following shall be
conditions precedent to the obligation of Promus to purchase Common
Stock and/or Units in connection with the Crown Sterling
Subscription:
(a) FelCor shall have made a formal request
upon Promus in connection with either (i) the First
Crown Sterling Closing, (ii) the Second Crown
Sterling Closing, (iii) an interim closing of the
purchase by FelCor of interests in one or more
Crown Sterling hotels pursuant to the Acquisition
Documents or (iv) following the date on which a
minimum of fourteen (14) of the hotels listed on
Exhibit A have been acquired pursuant to the
Acquisition Documents, the purchase of any other
Qualifying Hotel.
(b) With respect to acquisitions pursuant to
the Acquisition Documents, any request for a Crown
Sterling Incremental Purchase from the Company
shall be for an amount which, when aggregated with
all amounts previously purchased hereunder, shall
not exceed the Aggregate Subscription Limit. No
request hereunder shall, when aggregated with all
amounts previously subscribed hereunder, exceed
Twenty-Five Million Dollars ($25,000,000) in the
aggregate.
4. Purchase Closings. In connection with the Crown
Sterling Subscription, Promus shall pay to the Partnership, by wire
transfer or by certified or bank cashier's check, amounts as
designated by the Partnership from time to time, the aggregate
amount not to exceed the Aggregate Subscription Limit with respect
to the acquisition pursuant to the Acquisition Documents, and
Twenty Five Million Dollars ($25,000,000) in the aggregate. In
connection with each Crown Sterling Incremental Purchase, the
Partnership shall issue to Promus one or more certificates
representing the whole number of shares of Common Stock and/or
Units, as provided in Section 1 hereof, equal to the quotient of
(i) the amount paid by Promus to the Partnership in connection with
such incremental purchase divided by (ii) the Crown Sterling
Purchase Price. The Partnership shall not be required to issue
fractional shares of Common Stock or Units in connection with such
incremental purchase and, in lieu thereof, the Partnership shall
refund to Promus the cash amount represented by the fractional
share of Common Stock or Unit based upon the Crown Sterling
Purchase Price.
5. Term. Promus' obligations in connection with the
Crown Sterling Subscription shall terminate (a) upon the earliest
to occur of (i) the date that Promus shall have completed its
subscription obligation in connection with the Crown Sterling
Subscription, (ii) delivery of written notice to Promus that the
Partnership has terminated Promus' obligation in connection with
the Crown Sterling Subscription and (iii) with respect to hotels
acquired pursuant to the Acquisition Documents, the date on which
the final Crown Sterling Closing occurs, but not later than March
31, 1996, and (b) with respect to any other Qualifying Hotels, June
30, 1996.
6. Representations and Warranties of Promus. Promus
hereby represents and warrants to the Company and the Partnership
as follows:
(a) The execution, delivery and performance
of this Agreement by Promus has been duly
authorized by all necessary corporate action. This
Agreement constitutes a valid and binding
obligation of Promus, enforceable in accordance
with its terms.
(b) It is familiar with the business and
financial condition of the Company and the
Partnership, and is not relying upon any
representations made to it by the Company, the
Partnership or any of the officers, employees or
agents of either of them that are not contained
herein.
(c) It is aware of the risks involved in
making an investment in the Common Stock and in the
Units. It has had an opportunity to ask questions
of, and to receive answers from, the Partnership
and the Company, or a person or persons authorized
to act on their behalf, concerning the terms and
conditions of this investment. Promus confirms
that all documents, records and books pertaining to
its investment in the Partnership that have been
requested by it have been made available or
delivered to it prior to the date hereof.
(d) It understands that neither the Common
Stock nor the Units to be issued pursuant to the
Crown Sterling Subscription have been registered
under the Securities Act of 1933, as amended, or
any state securities acts, and are instead being
offered and sold in reliance on an exemption from
such registration requirements. The Common Stock
and Units for which Promus hereby subscribes are
being acquired solely for its own account, for
investment, and are not being purchased with a view
to, or for resale in connection with, any
distribution, subdivision or fractionalization
thereof, in violation of such laws and Promus has
no present intention to enter into any contract,
undertaking, agreement or arrangement with respect
to any such resale.
(e) It is an accredited investor as that term
is defined in Rule 501 and Regulation D of the
Securities Act of 1933, as amended.
The foregoing representations and warranties are true and
accurate as of the date hereof and shall be true and accurate as of
the date of each incremental purchase pursuant to the terms of this
Agreement. If in any respect such representations and warranties
shall not be true and accurate as of any such incremental purchase,
Promus shall give written notice of such fact to the Company and
the Partnership prior to such purchase, specifying which
representations and warranties are not true and accurate and the
reasons therefor.
7. Representations and Warranties of the Company and the
Partnership. Each of the Company and the Partnership hereby
jointly and severally represents and warrants to Promus that the
representations and warranties set forth in Exhibit B attached
hereto and by this reference incorporated herein shall be true and
correct in all material respects as of the date of the consummation
of the Public Offering, and each of the Company and the Partnership
further jointly and severally represents and warrants to Promus as
follows:
(a) The Company and the Partnership each have
full legal right, power and authority to enter into
this Agreement and the registration rights
agreement referred to in Section 8 hereof, and to
consummate the transactions contemplated herein and
therein. This Agreement has been, and the
registration rights agreement referred to in
Section 8 hereof will be, duly authorized by all
necessary corporate and partnership action, and
each will constitute the valid and binding
obligation of each of the Company and the
Partnership, enforceable in accordance with their
respective terms. The Partnership Agreement
constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms.
(b) Units, when issued to Promus, will have
been duly and validly authorized and issued, free
of any preemptive or similar rights, and be fully
paid and nonassessable, without any obligation to
restore capital except as required by the Delaware
Revised Uniform Limited Partnership Act (the
"Delaware Act"). As a holder thereof, Promus shall
be admitted as a limited partner of the Partnership
entitled to all of the rights and protections of
limited partners under the Delaware Act and the
provisions of the Partnership Agreement, with the
same rights, preferences and privileges as all
existing limited partners on a pari passu basis.
The Common Stock has been validly authorized and,
when issued to Promus, will be duly and validly
issued, fully paid, nonassessable and free of
preemptive or similar rights. Authorized and
unissued shares of Common Stock sufficient to
satisfy the Company's obligation to issue such
shares to Promus upon redemption of Units shall at
all times be reserved by the Company, and the
Company shall take no action to prevent the
redemption of the Units by virtue of Section
7.5(c)(v) of the Partnership Agreement.
(c) Assuming the accuracy of the
representations of Promus set forth in Section 6
hereof, (i) the Common Stock and Units will have
been issued, offered and sold to Promus in
compliance with all applicable laws (including,
without limitation, federal and state securities
laws), (ii) any share of Common Stock issued to
Promus, either in connection with an incremental
purchase pursuant to the terms of this Agreement or
upon redemption of Units so received, shall have
been issued, offered and sold in compliance with
all applicable laws (including, without limitation,
federal and state securities laws) and (iii) each
consent, approval, authorization, order, license,
certificate, permit, registration, designation or
filing by or with any governmental agency or body
necessary for the valid authorization, issuance,
sale and delivery of any Common Stock or Units to
Promus, the valid authorization, issuance, sale and
delivery of such shares upon redemption of the
Units, the execution, delivery and performance of
this Agreement and the registration rights
agreement referred to in Section 8 hereof and the
consummation by the Company and the Partnership of
the transactions contemplated hereby and thereby
has been made or obtained and is in full force and
effect.
(d) Neither the issuance, sale and delivery
to Promus by the Partnership of the Units, nor the
issuance, sale and delivery to Promus by the
Company of the Common Stock directly or upon
redemption of the Units, nor the execution,
delivery and performance of this Agreement and the
registration rights agreement referred to in
Section 8 hereof, nor the consummation of the
transactions contemplated hereby or thereby by the
Company or the Partnership, as applicable, will
conflict with or result in a breach or violation of
any of the terms and provisions of, or (with or
without the giving of notice or passage of time or
both) constitute a default under, any agreement to
which the Company, the Partnership, the Lessee or
FelCor is a party, the certificate of
incorporation, bylaws, certificate of limited
partnership, partnership agreement or limited
liability company agreement, as the case may be, of
the Company, the Partnership or the Lessee, any
indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument to
which the Company, the Partnership or the Lessee is
a party or to which any of them, any of their
respective properties or other assets or any hotel
is subject, or any applicable statute, judgment,
decree, rule or regulation of any court or
governmental agency or body applicable to any of
the foregoing or any of their respective
properties, or result in the creation or imposition
of any lien, charge, claim or encumbrance upon any
property or asset of any of the foregoing.
The foregoing representations and warranties are true
and accurate as of the date hereof, or such other date as of which
they are deemed to be made, and shall be true and accurate as of
the date of the first subscription pursuant to the terms of this
Agreement, and shall survive such date; and the representations and
warranties set forth in Exhibit B hereto, and paragraphs (a)
through (d) above, shall also be true and accurate as of the date
of each subsequent Crown Sterling Incremental Purchase, and shall
survive each such date.
8. Registration Rights. Prior to the earlier to occur
of the first purchase of Units hereunder and the closing of the
Promus Offering, the Company shall enter into with Promus a
registration rights agreement in form and substance agreeable to
Promus and the Company, providing, among other things, for the
following with respect to Common Stock purchased by Promus pursuant
to the Promus Offering, Common Stock acquired by Promus pursuant to
the Crown Sterling Subscription and Common Stock issued upon
redemption of the Units:
(a) On or before July 1, 1996, the Company shall
file and use its best efforts to cause to become
effective, a registration statement under the Securities
Act of 1933, as amended, and necessary qualifications or
registrations under the securities laws covering the
resale by Promus of all shares of Common Stock issued to
Promus under and pursuant to this Agreement and pursuant
to the redemption of any Units issued to Promus under and
pursuant to this Agreement. The Company shall use its
best efforts to maintain the effectiveness of such
registration statement and such qualifications or
registrations (except during periods when Promus shall be
restricted from selling shares hereunder) until the
earlier of (i) such time as all of the shares of Common
Stock issuable upon redemption of the Units and pursuant
to the Promus Offering have been issued to and sold by
Promus, (ii) such time as all remaining shares of Common
Stock issuable upon redemption of the Units and pursuant
to the Promus Offering have been issued to and may be
resold by Promus without restriction under the Securities
Act of 1933, as amended, and (iii) December 31, 2000.
(b) During any consecutive three month period,
Promus shall be prohibited, unless the Company shall
otherwise consent thereto in writing, from selling more
than 3% of the outstanding shares of Common Stock,
whether pursuant to said registration statement or
otherwise, except in an underwritten public offering in
which the managing underwriter is one reasonably
acceptable to the Company.
(c) All expenses of such registration statement,
other than any underwriting discounts or commissions or
transfer taxes, but including the reasonable fees and
expenses of all separate counsel for Promus, shall be
borne by the Company.
(d) (i) Promus shall refrain from the sale of any
shares of Common Stock for one or more periods of not
more than sixty (60) days following written notice from
the Company that the registration statement is not then
current, due to the existence of material non-public
information disclosure of which would materially
adversely affect the business interests of the Company,
and prior to Promus' receipt from the Company of written
notice that such registration statement is again current,
provided that Promus shall not be precluded from
effecting sales pursuant to this clause (i) for more than
ninety (90) days during any 360-day period.
(ii) Following written notice from the Company
that it has filed and caused to become effective a
registration statement including an offering of shares of
Common Stock for sale by the Company to the public in an
underwritten public offering, Promus shall enter into
agreements with the underwriters of such public offering,
substantially in the same form as agreements entered into
by the officers and directors of the Company, precluding
the sale of Common Stock by Promus for a period not to
exceed one hundred eighty (180) days following such
notice, provided that Promus was given the opportunity to
include its shares for sale in such public offering.
9. Use of Proceeds. The Company and the Partnership
agree with Promus that the proceeds of the sale of Common Stock
and/or Units in connection with the Crown Sterling Subscription
will be used solely to complete the acquisition by FelCor of the
Crown Sterling Hotel Chain pursuant to the Acquisition Documents
or, prior to June 30, 1996, as a portion of the purchase price for
the Partnership or FelCor to acquire other Qualifying Hotels
(provided that a minimum of fourteen (14) of the hotels listed on
Exhibit A have been acquired pursuant to the Acquisition
Documents).
10. Miscellaneous
(a) All notices or other communications given
or made hereunder shall be in writing and shall be
delivered or mailed by registered or certified
mail, return receipt requested, postage prepaid, to
Promus at 000 Xxxxx Xxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxxx 00000, Attention: General
Counsel, with a copy to the same address,
Attention: Chief Financial Officer, and to the
Company or the Partnership at 0000 X. X'Xxxxxx
Xxxx., Xxxxx 000, Xxxxxx, Xxxxx 00000.
(b) NOTWITHSTANDING THE PLACE WHERE THIS
AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES
HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL OF THE
TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS (WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES), APPLICABLE TO AGREEMENTS MADE AND TO
BE WHOLLY PERFORMED THEREIN.
(c) This Agreement supersedes that certain
Memorandum of Terms, dated as of September 20,
1995, by and between Promus and the Company, and
constitutes the entire agreement between the
parties hereto with respect to the subject matter
hereof. This Agreement may be amended only by an
instrument in writing executed by all parties.
Promus may assign and transfer its rights and
obligations hereunder, and the Common Stock or
Units it acquires, to any direct or indirect
subsidiary thereof.
(d) This Agreement shall inure to the benefit
of and be binding upon the successors and assigns
of the parties hereto.
(e) All terms used herein shall be deemed to
include the masculine and the feminine and the
singular and the plural as the context requires.
Captions herein are for convenience of reference
only and shall not alter or affect the meaning or
construction of the paragraphs hereof to which they
relate.
(f) The parties hereto agree to take all
actions, including the entering into of any
documents, agreements or instruments, or amendments
thereof, as may be necessary or appropriate to
effectuate the intents and purposes hereof and
consummate and make effective the transactions
contemplated hereby.
(g) Counterparts. This Agreement may be
executed in two or more counterparts, any one of
which need not contain the signatures of more than
one party, but all such counterparts taken together
will constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on and as of the date first above written.
PROMUS HOTELS, INC.,
a Delaware corporation
By:
Name:
Title:
FELCOR SUITE HOTELS, INC.,
a Maryland corporation
By:
Name:
Title:
FELCOR SUITES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: FELCOR SUITE HOTELS, INC.,
a Maryland corporation and its sole
general partner
By:
Name:
Title:
EXHIBIT A
PURCHASE PRICE ALLOCATION
October 17, 1995
LOCATION SUITES AMOUNT
Phase I
Burlingame 339 $41,004,865
Mandalay-Beach 249 24,058,551
Los Angeles Airport 350 26,770,178
Minneapolis-Airport 311 42,918,886
Minneapolis-Downtown 218 18,267,959
Napa 205 18,548,195
St. Xxxx 210 19,469,864
Phase II
Anaheim, CA 222 $ 17,823,484
Xxxxx Xxxxx, XX 000 21,882,805
Birmingham, AL 242 32,162,141
Deerfield Beach, FL 224 34,905,960
Ft. Lauderdale, FL 359 53,833,588
Miami Airport 314 30,228,707
Milpitas 267 28,194,773
Phoenix 233 39,767,715
S. San Francisco 312 35,700,343
------------
TOTAL PURCHASE PRICE $485,538,007
============
EXHIBIT B
REPRESENTATIONS & WARRANTIES
Representations and warranties under the Underwriting
Agreement relating to the Public Offering shall be attached hereto
and incorporated herein provided that they are satisfactory to
Promus. In the event that an Exhibit B which is reasonably
satisfactory to Promus has not been attached hereto and
incorporated herein prior to the closing of the Public Offering,
Promus shall have the right to terminate this Agreement upon
written notice to FelCor with no liability to Promus whatsoever.
