EXHIBIT 99.4
SUBSCRIPTION
AND
STOCKHOLDERS' AGREEMENT
dated as of February 24, 1999
among
CNL HOTEL INVESTORS, INC.
and
THE STOCKHOLDERS
NAMED HEREIN
TABLE OF CONTENTS
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...2
1.4 Default and Consequences of Default...........................3
1.5 Conditions to each Drawdown...................................5
1.6 Purchase of Class D Junior Preferred Stock....................6
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.................8
2.5 Covenant to Vote.............................................10
2.6 No Voting or Conflicting Agreements..........................10
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.....................16
4.1 Definitions..................................................16
4.2 Exchange of Class A Preferred Stock..........................18
ARTICLE V LEGENDS ON STOCK CERTIFICATES...........................24
5.1 Legends on Stock Certificates................................24
ARTICLE VI CLOSING.................................................24
6.1 Closing......................................................24
ARTICLE VII REPRESENTATIONS AND COVENANTS...........................24
7.1 Representations of CHP.......................................24
7.2 Covenants of CHP.............................................25
7.3 Representations of Five Arrows...............................26
7.4 Covenants of Five Arrows.....................................26
7.5 Representations of Hospitality Partners......................26
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
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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)
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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
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Stockholders. Subject to Section 1.4 hereof, the Capital Stockholders
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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
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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
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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
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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.
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(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
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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
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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
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Schedule 2.1C, respectively.
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2.2 Number of Directors. The Company shall be governed by
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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.
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(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.
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(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
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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.
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(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
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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
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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
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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,
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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
Name: Xxxxx X. Xxxxxx
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
Name: Xxxxx X. Xxxxxx
Title:
CNL HOSPITALITY PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
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.