Exhibit 10.2
ACQUISITION AGREEMENT
This Acquisition Agreement (the "Agreement") dated as of February
13, 1997, is made by and among Brookriver Hotel Partnership, L.P., a Texas
limited partnership ("BROOKRIVER"), Mockingbird Hotel Properties Joint Venture,
a Texas general partnership ("MOCKINGBIRD"), GQ Indianapolis Hospitality, Ltd.,
a Texas limited partnership ("GQ"), 361719 Alberta Limited, an Alberta
corporation ("CALGARY"), Centennial Hotel Ltd., a British Columbia corporation
("SURREY") (each of the foregoing parties, a "TRANSFEROR", and collectively, the
"TRANSFERORS"), Highgate Hotels, Inc., a Texas corporation ("HIGHGATE"), KFP
Dunwoody, Inc., a Texas corporation ("DUNWOODY"), Pontch Limited Partnership, a
Delaware limited partnership ("PONTCH"), CapStar Management Company, L.P., a
Delaware limited partnership ("CAPSTAR"), and CapStar Hotel Company, a Delaware
corporation ("CAPSTAR CORP.").
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. For the purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "BROOKRIVER" shall mean Brookriver Hotel Partnership, L.P., a
Texas limited partnership.
(b) "BROOKRIVER CONTRIBUTION AGREEMENT" shall mean that certain
Contribution Agreement dated of even date herewith pursuant to which Brookriver
agrees to contribute in part, and to sell in part, the Holiday Select to
CapStar, and CapStar agrees to acquire the Holiday Select on the terms and
subject to the conditions set forth in such contribution agreement.
(c) "CALGARY" shall mean 361719 Alberta Limited, an Alberta
corporation.
(d) "CALGARY CONTRIBUTION AGREEMENT" shall mean that certain
Contribution Agreement dated of even date herewith pursuant to which Calgary
agrees to contribute in part, and to sell in part, the Holiday Airport to
CapStar, and CapStar agrees to acquire the Holiday Airport on the terms and
subject to the conditions set forth in such contribution agreement.
(e) "CAPSTAR" shall mean CapStar Management Company, L.P., a
Delaware limited partnership.
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(f) "CAPSTAR CORP." shall mean CapStar Hotel Company, a
Delaware corporation.
(g) "CLOSING" shall mean a meeting at which the actions shall take
place and the executed agreements, documents and instruments shall be exchanged
as necessary to consummate the transaction contemplated by this Agreement and
the Contribution Agreements.
(h) "COMMON STOCK" shall mean the common stock, $0.01 par value, of
CapStar Corp.
(i) "CONTRIBUTION AGREEMENTS" shall mean the Brookriver
Contribution Agreement, the Calgary Contribution Agreement, the GQ Contribution
Agreement, the Mockingbird Contribution Agreement, the Surrey Contribution
Agreement, and the Vancouver Contribution Agreement.
(j) "DOUBLETREE" shall mean the 137 room hotel owned by GQ located
in Indianapolis, Indiana.
(k) "DUNWOODY" shall mean KFP Dunwoody, Inc., a Texas
corporation.
(l) "FIRST AMENDMENT" shall mean the First Amendment to Amended and
Restated Agreement of Limited Partnership of CapStar Management Company, L.P.,
which amendment shall be in the form of Exhibit "A".
(m) "FOUR POINTS" shall mean the 400 room hotel owned by KFP
Dunwoody, Inc. located in Dunwoody, Georgia.
(n) "FOUR POINTS MANAGEMENT AGREEMENT" shall mean the agreement
pursuant to which CapStar will manage the operations of Four Points, which
agreement shall be in the form of Exhibit "B".
(o) "GQ" shall mean GQ Indianapolis Hospitality, Ltd., a Texas
limited partnership.
(p) "GQ CONTRIBUTION AGREEMENT" shall mean that certain Contribution
Agreement dated of even date herewith pursuant to which GQ agrees to contribute
in part, and to sell in part, the Doubletree to CapStar, and CapStar agrees to
acquire the Doubletree on the terms and subject to the conditions set forth in
such contribution agreement.
(q) "HIGHGATE" shall mean Highgate Hotels Inc., a Delaware
corporation, and its successors.
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(r) "HOLIDAY SELECT" shall mean the 348 room hotel owned by
Brookriver located in Dallas, Texas.
(s) "HOLIDAY AIRPORT" shall mean the 170 room hotel owned by Calgary
located in Calgary, Alberta.
(t) "MOCKINGBIRD" shall mean Mockingbird Hotel Properties Joint
Venture, a Texas general partnership.
(u) "MOCKINGBIRD CONTRIBUTION AGREEMENT" shall mean that certain
Contribution Agreement dated of even date herewith pursuant to which Mockingbird
agrees to contribute in part, and to sell in part, the Radisson to CapStar, and
CapStar agrees to acquire the Radisson on the terms and subject to the
conditions set forth in such contribution agreement.
(v) "PARTNERSHIP AGREEMENT" shall mean the Amended and Restated
Partnership Agreement of CapStar Management Company, L.P., dated as of August
23, 1996.
(w) "PARTNERSHIP UNIT" shall mean a Partnership Unit, as that term
will be defined in the Partnership Agreement as it is to be amended by the First
Amendment (other than a Preferred Unit).
(x) "PONTCH" shall mean Pontch Limited Partnership, a Delaware
limited partnership.
(y) "PONTCHARTRAIN" shall mean the 400 room hotel owned by Pontch
located in Detroit, Michigan.
(z) "PONTCHARTRAIN MANAGEMENT AGREEMENT" shall mean the agreement
pursuant to which CapStar shall manage the operations of Pontchartrain, which
agreement shall be in the form of Exhibit "C".
(aa) "PREFERRED UNIT" shall mean a Preferred Unit, as that term will
be defined in the Partnership Agreement as it is to be amended by the First
Amendment.
(bb) "PROPERTIES" shall mean the Doubletree, Holiday Select,
Holiday Airport, Radisson, Ramada, and Sheraton.
(cc) "RADISSON" shall mean the 305 room hotel owned by Mockingbird
located in Dallas, Texas.
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(dd) "RAMADA" shall mean the 118 room hotel owned by Surrey located
in Surrey, British Columbia.
(ee) "SHERATON" shall mean Continental Pacific Interfund, Ltd., a
British Columbia corporation.
(ff) "SURREY" shall mean Continental Pacific Interfund, Ltd., a
British Columbia corporation.
(gg) "SURREY CONTRIBUTION AGREEMENT" shall mean that certain
Contribution Agreement dated of even date herewith pursuant to which Surrey
agrees to contributed in part, and to sell in part, the Sheraton to CapStar, and
CapStar agrees to acquire the Sheraton o the terms and subject to the conditions
set forth in such contribution agreement.
(hh) VANCOUVER shall mean Centennial Hotel Ltd., a British Columbia
corporation.
(ii) VANCOUVER CONTRIBUTION AGREEMENT shall mean that certain
Contribution Agreement dated of even date herewith pursuant to which Vancouver
agrees to contribute in part, and to sell in part, the Ramada to CapStar, and
CapStar agrees to acquire the Ramada on the terms and subject to the conditions
set forth in such contribution agreement.
ARTICLE II
AGREEMENTS
2.1 TRANSFER OF THE PROPERTIES. At the Closing:
(a) each Transferor will convey to CapStar or its designee, on the
terms and subject to the conditions contained in the
Contribution Agreement to which such Transferor is a party,
the Property which is the subject of such Contribution
Agreement;
(b) Dunwoody will execute and deliver to CapStar the Four Points
management Agreement; and
(c) Pontch will execute and delivery to CapStar the Pontch
Management Agreement.
It is understood and agreed by Dunwoody and CapStar that at or prior to the
Closing, Dunwoody will cause the existing management agreement relating to the
management of the Four Points to be terminated. It is understood and agreed by
Pontch and
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CapStar that at or prior to the Closing, Pontch will cause the existing
management agreement relating to the management of the Pontchartrain to be
terminated.
Notwithstanding the provisions of clause (a) of this Section 2.1, if
one or more of Calgary, Surrey, and Vancouver (collectively, the "Canadian
Companies") determines that the prospective economic return of the parties would
be enhanced if CapStar were to acquire all of the outstanding shares of the
capital stock of Calgary, Surrey and/or Vancouver rather than acquiring the
Properties owned by such Transferors directly, CapStar and each of the Canadian
Companies seeking to restructure this Agreement (the "Subject Company") will
negotiate in good faith to modify this Agreement as to such Subject Company to
provide that as a part of CapStar's acquisition of the Property owned by such
Subject Company, CapStar will acquire from the stockholders of such Company all
of the outstanding capital stock of such Subject Company, free and clear of all
liens, claims and encumbrances, on the basis of the following principles:
(i) Neither (a) the consideration to be received by the Transferors
pursuant to Section 2.2 nor (b) CapStar's Canadian tax position shall be
affected by the restructuring of any transaction as to any Subject
Company;
(ii) The Subject Company will have no liabilities or obligations
outstanding as of the Closing Date, other than liabilities and obligations
that would be Permitted Encumbrances (as defined in the Contribution
Agreement to which the Subject Company is a party);
(iii) CapStar will be indemnified by parties reasonably acceptable
to CapStar for any loss, cost or expense that CapStar incurs in connection
with its acquisition and ownership of the capital stock the Subject
Company as a result of any condition existing immediately prior to the
Closing or any event that has occurred prior to the Closing, other than
liabilities and obligations that would be Permitted Encumbrances (as
defined in the Contribution Agreement to which the Subject Company is a
party); and
(iv) The terms and conditions of this Agreement and the Contribution
Agreement to which the Subject Company is a party will be modified as
necessary to provide for and reflect the restructuring of the transaction
as the Subject Company.
2.2 DELIVERY OF CONSIDERATION. In consideration for the transfer of
the Properties as described in the Contribution Agreements, the execution and
delivery of the Four Points Management Agreement and the Pontch Management
Agreement, CapStar agrees:
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(a) to pay to the Transferors, the existing manager of the Four
Points, and the existing manager of the Pontchartrain cash in the
aggregate amount of $68,000,000.00; and
(b) issue to the Transferors or their respective designees
809,523.81 Partnership Units and 392,156.86 Preferred Units.
The cash payable to the Transferors, the existing manager of the Four Points,
and the existing manager of the Pontchartrain as set forth in clause (a) of this
Section 2.2 be paid in United States dollars in immediately available funds and
shall be paid by wire transfer to such accounts as the parties to be paid such
cash shall direct CapStar in writing. To the extent that any Property is not
transferred to CapStar or its designee in accordance with the Contribution
Agreement relating thereto and the remainder of the transactions contemplated
hereby and by the remaining Contribution Agreements are consummated, the number
of Partnership Units and the Preferred Units and the amount of cash to be issued
and paid by CapStar hereunder to the Transferors, the existing manager of the
Four Points, and the existing manager of the Pontchartrain shall be reduced by
the amounts to be mutually agreed by CapStar and those Transferors who do
transfer Properties to CapStar, which amounts shall be negotiated by such
parties in good faith.
2.3 ADDITIONAL CONSIDERATION. In connection with the acquisition
of the Properties by CapStar and the issuance of the Partnership Units and the
Preferred Units to the various Transferors, CapStar and CapStar Corp. also agree
as follows:
(a) CapStar and CapStar Corp. agree that prior to the Closing, the
Partnership Agreement shall be amended, and CapStar Corp. agrees to cause
the Partnership Agreement to be amended, by the adoption, execution and
delivery by all of the parties in CapStar of the First Amendment.
(b) CapStar Corp. agrees to grant to each Transferor receiving
Partnership Units and Preferred Units or its designee certain registration
rights and enter into a registration rights agreement with each Transferor
or its designee setting forth the terms and conditions of such
registration rights, which registration rights agreement shall be in the
form of Exhibit "D" (the "REGISTRATION RIGHTS AGREEMENT").
(c) CapStar Corp. agrees that in connection with the annual
election of directors of CapStar at the annual meeting CapStar Corp. that
CapStar Corp. shall:
(1) as long as the parties acquiring the Partnership Units and
Preferred Units in accordance with this Agreement (the "Holders")
continue to hold in the aggregate a number of Partnership Units,
Preferred Units and shares of Common Stock equal to at least 50% of
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the aggregate number of Partnership Units and the Preferred Units
issued in accordance with this Agreement, which calculation shall be
made as appropriate to take into account any conversions,
reclassifications, reorganizations, in-kinds dividends, splits, and
reverse splits that may occur with respect to the Partnership Units,
Preferred Units and/or shares of Common Stock after the issuance of
the Partnership Units and Preferred Units hereunder, CapStar Corp.
shall nominate for election as a directors as a part of the
management slate, a person designated by Highgate and shall nominate
for appointment as an advisory, non-voting director of CapStar Corp.
a second person;
(2) as long as the Holders to hold in the aggregate a number of
Partnership Units, Preferred Units and shares of Common Stock equal
to less than 50%, but equal to at least 20% of the aggregate number
of Partnership Units and the Preferred Units issued in accordance
with this Agreement, which calculation shall be made as appropriate
to take into account any conversions, reclassifications,
reorganizations, in-kind dividends, splits, and reverse splits that
may occur with respect to the Partnership Units, Preferred Units
and/or shares of Common Stock after the issuance of the Partnership
Units and Preferred Units hereunder, CapStar Corp. shall nominate
for election as a director as a part of the management slate, one
person designated by Highgate;
(3) provide the same type of support for the election of the
Highgate designee as a director as CapStar Corp., its affiliates and
its management provides to the other persons standing for election
as directors of CapStar Corp. as a part of the management slate; and
(4) if the Board of Directors of CapStar may, consistent with its
certificate of incorporation and its by-laws as in effect on the
date of the Closing, applicable law and the terms of CapStar Corp.'s
listing agreement with, and the rules for listed companies of, the
New York Stock Exchange, elect an additional director of CapStar
Corp. by a vote of the existing directors, CapStar Corp. agrees to
use its best efforts to cause its existing directors to elect the
designee of Highgate as an advisory director of CapStar Corp.
promptly after the Closing. If the board of directors of CapStar
Corp. cannot elect a director by its vote, a second designee of
Highgate will be appointed an advisory director of CapStar Corp. to
serve in such position until the next annual meeting of the
stockholders of CapStar Corp.
Highgate agrees to designate a nominee for election as a director of CapStar
Corp. and a person to be appointed as an advisory director for so long as it
shall be entitled to have a designee nominated for election pursuant to this
Section 2.3. Highgate shall designate its nominees for election as directors and
appointment as advisory directors
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of CapStar Corp. by giving written notice of its designation to the Chief
Executive Officer of CapStar Corp. (x) by the Closing Date as to the person to
be elected as a director and the person to be appointed as an advisory director
by the existing directors of CapStar and (y) by no later than February 15 of
each year as to the other elections of directors of CapStar Corp. Such designee
shall be one or more of the following persons: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, and
any of the persons who are from time to time executive officers of Highgate or
any of its affiliates. CapStar Carp. agrees for the benefit of each person who
is a designee of Highgate and is elected as a director of CapStar Corp. and each
person who is a designee of Highgate and who is appointed as an advisory
director of CapStar Corp. to pay each such person the compensation and to
provide each such person with all benefits provided to the directors of CapStar
Corp. who are not employees of CapStar Corp. or its affiliates.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
3.1 REPRESENTATIONS AND WARRANTIES OF CAPSTAR. CapStar represents
and warrants to each of the Transferors as follows:
(a) CapStar Corp. is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware, with all
requisite partnership and other power and authority required to enter into,
execute, and deliver this Agreement and each other agreement, instrument and
other documents to be entered into, executed and delivered pursuant hereto, and
to perform its obligation under this Agreement and under any agreement,
instrument and other documentation entered into, executed, and delivered
pursuant hereto.
(b) The execution and delivery of this Agreement and the other
agreements, documents, and other instruments to be executed and delivered by
CapStar under this Agreement, and the consummation by CapStar of the
transactions contemplated by this Agreement and that will be contemplated by
such other agreements, documents, and other instruments, have been duly
authorized by all necessary and appropriate partnership and other action of
CapStar.
(c) No consent, approval, or authorization of, or any filing with,
any person, entity, or governmental authority is required to be obtained or made
with respect to the execution and delivery by CapStar of this Agreement, the
consummation by CapStar of its obligations under this Agreement, or under any
other agreement, instrument, or other document entered into, executed, and
delivered pursuant hereto except for such consents, approvals, or
authorizations, as shall be obtained, or filings which shall have been made, by
CapStar prior to Closing.
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(d) There is no claim, action, litigation, suit, arbitration or
other proceeding pending or, to the knowledge of CapStar, threatened against or
affecting CapStar, at law or in equity, or before or by any federal, state,
municipal or other department, commission, board, bureau, agency or
instrumentality that, if determined adversely to CapStar, would have a
materially adverse effect on the business, assets, properties, operations or
prospects or on the condition, financial or otherwise, of CapStar.
(e) The execution and delivery by CapStar of this Agreement and of
each agreement, document, and instrument to be executed and delivered by CapStar
pursuant to this Agreement, and the consummation of the transactions
contemplated hereby and thereby do not and will not (i) conflict with or violate
the Partnership Agreement as in effect on the date of this Agreement or as the
Partnership Agreement will be amended by the First Amendment, (ii) subject to
the conflict with or violate any laws, rules, or regulations applicable to
CapStar, (iii) subject to the obtaining of the consent, approvals, and
authorizations to be obtained as contemplated by clause (c) of this Section 3.1,
violate, result in any material breach of, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others rights of termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any of the properties or
assets of CapStar, pursuant to the Partnership Agreement, as in effect on the
date of this Agreement or as the Partnership Agreement will be amended by the
First Amendment or any material note, bond, mortgage, indenture, contract,
agreement, lease, license, permit franchise or other instrument or obligation of
CapStar, to which CapStar is a party or by or to which CapStar or its assets are
bound or are subject, or (iv) cause CapStar to violate any judgment, order, or
decree of any governmental authority by which CapStar or any of its assets is
bound.
(f) This Agreement and the Contribution Agreements constitute the
legal, valid, and binding agreements of CapStar, enforceable against CapStar in
accordance with their respective terms. Upon their execution and delivery, all
other agreements, documents, and instruments to be executed and delivered by
CapStar under this Agreement will constitute the legal, valid and binding
agreements of CapStar, enforceable against CapStar in accordance with their
respective terms.
(g) Except as set forth in CapStar Corp.'s Quarterly Report on Form
10-Q for the quarter ended September 30, 1996, filed with the Securities and
Exchange Commission (the "10-Q"), the information relating to CapStar contained
in CapStar Corp.'s Prospectus dated as of August 20, 1996, relating to the offer
and sale of 9,250,000 shares of the common stock, $0.01 par value, of CapStar
Corp. and each post-effective amendment thereto (the "Prospectus") and the
information contained therein based on information relating to CapStar did not
contain any misstatement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading as of the
date of such prospectus.
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(h) The information relating to CapStar contained in the 10-Q and
the information contained therein based on information relating to CapStar did
not contain any misstatement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading as of the
date of the 10- Q.
(i) Since the date of the 10-Q, there has been no material adverse
change in the business, assets, properties, operations or prospects of the
condition, financial or otherwise, of CapStar.
(j) Upon the issuance of the Partnership Units and the Preferred
Units as contemplated by this Agreement and the Contribution Agreements, each of
the Transferors will be a limited partner in CapStar, shall have the rights of a
limited partner holding the Partnership Units and Preferred Units as set forth
in the Partnership Agreement, as it is to be amended by the First Amendment,
shall not be subject to any liabilities of CapStar, except to the extent of the
capital contributed to CapStar by such Transferor, and shall not have any
further obligation to contribute any capital to CapStar, except as may be
required by the Delaware Revised Uniform Limited Partnership Act as in effect
from time to time.
3.2 REPRESENTATIONS AND WARRANTIES OF CAPSTAR CORP. CapStar
Corp. represents and warrants to each of the Transferors as follows:
(a) CapStar is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with all requisite
corporation and other power and authority required to enter into this Agreement
and other agreements, documents and instruments it is to enter into, execute and
deliver pursuant to this Agreement and to perform its obligation under this
Agreement and under any agreement, instrument and other document entered into,
executed, and delivered pursuant hereto.
(b) The execution and delivery of this Agreement and the other
agreements, documents, and other instruments to be executed and delivered by
CapStar Corp. under this Agreement, and the consummation by CapStar Corp. of the
transactions contemplated by this Agreement and that will be contemplated by
such other agreements, documents, and other instruments, have been duly
authorized by all necessary and appropriate partnership and other action of
CapStar Corp.
(c) No consent, approval, or authorization of, or any filing with,
any person, entity, or governmental authority is required to be obtained or made
with respect to the execution and delivery by CapStar Corp., the consummation by
CapStar Corp. of the transactions contemplated thereby, or the performance by
CapStar Corp. of its obligations under, this Agreement, or under any other
agreement, instrument, or other document entered into, executed, and delivered
pursuant hereto except for such
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consents, approvals, or authorizations, as shall be obtained, or filings which
shall have been made, by CapStar Corp. prior to Closing.
(d) There is no claim, action, litigation, suit, arbitration or
other proceeding pending or, to the knowledge of CapStar Corp., threatened
against or affecting CapStar Corp., at law or in equity, or before or by any
federal, state, municipal or other department, commission, board, bureau, agency
or instrumentality that, if determined adversely to CapStar Corp., would have a
materially adverse effect on the business, assets, properties, operations or
prospects or on the condition, financial or otherwise, of CapStar Corp.
(e) The execution and delivery by CapStar Corp. of this Agreement
and of each agreement, documents and instrument to be executed and delivered by
CapStar Corp. pursuant to this Agreement, and the consummation of the
transactions contemplated hereby and thereby do not and will not (i) conflict
with or violate the certificate of incorporation or bylaws of CapStar Corp. as
in effect on the date of this Agreement, (ii) subject to the conflict with or
violate any laws, rules, or regulations applicable to CapStar Corp., (iii)
subject to the obtaining of the consent, approvals, and authorizations to be
obtained as contemplated by clause (c) of this Section 3.2, violate, result in
any material breach of, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of CapStar
Corp., pursuant to the certificate of incorporation or bylaws of CapStar Corp.,
or any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit franchise or other instrument or obligation of CapStar Corp., to
which CapStar Corp. is a party or by or to which CapStar Corp. or its assets are
bound or are subject, or (iv) cause CapStar Corp. to violate any judgment,
order, or decree of any governmental authority by which CapStar Corp. or any of
its assets is bound or is subject.
(f) This Agreement constitutes the legal, valid, and binding
agreements of CapStar Corp., enforceable against CapStar Corp. in accordance
with its terms. Upon their execution and delivery, all other agreements,
documents, and instruments to be executed and delivered by CapStar Corp. under
this Agreement will constitute the legal, valid and binding agreements of
CapStar Corp., enforceable against CapStar Corp. in accordance with their
respective terms.
(g) CapStar Corp. has previously provided the Transferors with a
copy of the Prospectus. Except as set forth in the 10-Q, the Prospectus, at the
time it became effective, complied in all material respects with the provisions
of the Securities Act of 1933, as amended, and the rules and regulations of the
Securities and Exchange Commission thereunder as then in effect, did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated
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therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(h) CapStar Corp. has previously provided the Transferors with a
copy of the 10-Q. The information contained in the 10-Q did not contain any
misstatement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading as of the date of the
10-Q.
(i) Since the date of the 10-Q, there has been no material adverse
change in the business, assets, properties, operations or prospects of the
condition, financial or otherwise, of CapStar Corp.
(j) Upon the exchange of the Partnership Units or the Preferred
Units for shares of Common Stock upon redemption of the Partnership Units and/or
the Preferred Units as contemplated in the Partnership Agreement, as it is to be
amended by the First Amendment, (1) each person redeeming Partnership Units
and/or Preferred Units will receive good and indefeasible title to that number
of shares of Common Stock issuable as provided in the Partnership Agreement, as
it is to be amended by the First Amendment and (2) the shares of Common Stock so
issued to such person will be validly issued, fully paid, and non-assessable
shares of the Common Stock, not issued in violation of any preemptive or other
rights of any other stockholder or security holder of CapStar Corp. or any other
person, free of any restrictions and encumbrances, except for restrictions on
transferability as imposed on such shares of Common Stock by applicable
securities laws, and not subject to any agreement or understandings among any
persons with respect to the voting or transfer of such shares of Common Stock
except as the Transferors may enter into or become parties.
(k) CapStar Corp. will reserve and have available authorized, but
unissued shares of Common Stock or shares of Common Stock in its treasury as
necessary for CapStar to redeem the Partnership Units and the Preferred Units
upon the exercise of the rights to exchange the Partnership Units and the
Preferred Units for shares of Common Stock in accordance with the terms of the
Partnership Agreement as it is to be amended by the First Amendment.
3.3 REPRESENTATIONS AND WARRANTIES OF THE TRANSFERORS, DUNWOODY AND
PONTCH. Each of the Transferors, Dunwoody, and Pontch, severally, but not
jointly, represents and warrants as follows:
(a) It is duly organized, validly existing and in good standing and,
as applicable, in good standing under the laws of the jurisdiction of domicile,
with all requisite corporate partnership power, as the case may be, and other
power and authority required to enter into, execute, and deliver this Agreement
and each other agreement, instrument and other documents to be entered into,
executed, and
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delivered pursuant hereto, as to perform its obligations under this Agreement
and under any agreement, instrument and other document entered into, executed,
and delivered pursuant hereto.
(b) Its execution and delivery of this Agreement and the other
agreements, documents, and other instruments to be executed and delivered by it
under this Agreement, and its consummation of the transactions contemplated by
this Agreement and that will be contemplated by such other agreements,
documents, and other instruments, have been duly authorized by all necessary and
appropriate corporate or partnership action, as the case may be, and all other
action necessary for it to take.
(c) No consent, approval, or authorization of, or any filing with,
any person, entity, or governmental authority is required to be obtained or made
with respect to its execution and delivery of this Agreement, its consummation
of the transactions contemplated by, or its performance of its obligations under
this Agreement, or under any other agreement, instrument, or other document
entered into, executed, and delivered by it pursuant hereto except for such
consents, approvals, or authorizations, as shall be obtained, or filings which
shall have been made, by it to Closing.
(d) There is no claim, action, litigation, suit, arbitration or
other proceeding pending or, to its knowledge, threatened against or affecting
it, at law or in equity, or before or by any federal, state, municipal or other
department, commission, commission, board, bureau, agency or instrumentality
that, if determined adversely to it, would have a materially adverse effect on
the business, assets, properties, operations or prospects or on the condition,
financial or otherwise.
(e) Its execution and delivery of this Agreement and of each
agreement, documents and instrument to be executed and delivered by it pursuant
to this Agreement, and the consummation of the transactions contemplated hereby
and thereby do not and will not (i) conflict with or violate its organizational
documents as in effect on the date of this Agreement, (ii) conflict with or
violate any laws, rules or regulations applicable to it, (iii) subject to the
obtaining of the consent, approvals, and authorizations contemplated to be
obtained pursuant to clause (c) of this Section 3.3, violate, result in any
material breach of, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets, pursuant
to its organizational documents or any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit franchise or other instrument or
obligation to which it is a party or by or to which it or its assets are bound
or are subject, or (iv) cause it to violate any judgment, order, or decree of
any governmental authority by which it or any of its assets is bound.
14
(f) This Agreement and any Contribution Agreement to which it is a
party constitutes its legal, valid, and binding agreements, enforceable against
it in accordance with their respective terms. Upon their execution and delivery,
all other agreements, documents, and instruments to be executed and delivered by
it under this Agreement will constitute its legal, valid and binding agreements,
enforceable against CapStar Corp. in accordance with their respective terms.
3.4 REPRESENTATION OF EACH TRANSFEROR. Each Transferor hereby
represents to CapStar and CapStar Corp. that each person exercising the
authority to cause the representatives of such Transferor to execute and deliver
this Agreement for and on behalf of the Transferor is an "accredited investor"
as that term is defined in Rule 501 of the Securities and Exchange Commission
promulgated under the Securities Act of 1933, as amended.
3.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and Warranties of each of the parties set forth in this Article III shall
service the Closing and the execution and delivery of any document or instrument
delivered pursuant to this Agreement or any Contribution Agreement.
ARTICLE IV
CONDITIONS TO CLOSING
4.1 CONDITIONS PRECEDENT TO CAPSTAR'S AND CAPSTAR CORP.'S
OBLIGATIONS.
(a) The obligation of CapStar to consummate the transactions
contemplated by this Agreement and the obligations of CapStar and CapStar Corp.
to perform their respective obligations under this Agreement are subject to the
satisfaction or waiver of the following conditions as of the Closing Date:
(i) CapStar or the respective Transferor shall not have
terminated the Brookriver Contribution Agreement, the Mockingbird
Contribution Agreement or the Surrey Contribution Agreement pursuant to a
termination right granted in such Contribution Agreement.
(ii) Each of Brookriver, Mockingbird, and Surrey shall have
delivered all of the items required to be delivered in connection with
such Transferors by them as described in Section 5.2(a) of this Agreement.
(iii) Each of the representations and warranties of each of
Brookriver, Mockingbird, and Surrey set forth in Section 4.3 hereof shall
be true, complete, and correct as of the Closing, and each of Brookriver,
15
Mockingbird, and Surrey shall have provided CapStar and CapStar Corp. a
certificate certifying that such is the case.
(iv) The conditions to the obligation of CapStar to consummate
the transactions contemplated by the Brookriver Contribution Agreement,
the Mockingbird Contribution Agreement and the Surrey Contribution
Agreement as set forth therein shall have been satisfied or waived
by CapStar.
(v) CapStar and CapStar Corp. shall have made all necessary
filings with any governmental authority necessary to be made, and shall
have obtained all necessary governmental and other consents, approvals,
and authorizations required to be obtained, by CapStar and CapStar Corp.
in connection with the consummation of the transactions contemplated by
this Agreement with respect to Brookriver, Mockingbird, and Surrey and as
contemplated by the Brookriver Contribution Agreement, the Mockingbird
Contribution Agreement, and the Surrey Contribution Agreement.
If any of the foregoing conditions have not been satisfied or waived
by CapStar as of the Closing Date, then CapStar shall be entitled to terminate
this Agreement by giving each of the Transferors, Dunwoody, and Pontch written
notice that it is terminating this Agreement, and upon such termination CapStar
and CapStar Corp. shall have no further obligation hereunder. CapStar and
CapStar Corp. shall use their reasonably efforts to make the filings and to
obtain the consent, approvals, and authorizations referred to in clause (a)(v)
of this Section 4.1.
(b) The obligation of CapStar to consummate the transactions
contemplated by this Agreement with respect to a particular Property and the
Contribution Agreement relating thereto and the obligation of CapStar and
CapStar Corp. to perform their respective obligations under this Agreement to
the Transferor with respect to such Property and Contribution Agreement are
subject to the satisfaction or waiver of the following condition as of the
Closing Date:
(i) CapStar or such Transferor shall not have terminated such
Contribution Agreement pursuant to a termination right granted in such
Contribution Agreement.
(ii) Such Transferor shall have delivered all of the items are
to be delivered in connection with such Transferor as described in SECTION
5.2(A) of this Agreement.
(iii) Each of the representations and warranties of such
Transferor set forth in Section 4.3 hereof shall be true, complete, and
correct as of thee Closing, and such Transferor shall have provided
CapStar and CapStar Corp. a certificate certifying that such is the case.
16
(iv) The conditions to the obligation of CapStar to consummate
the transactions contemplated by such Contribution Agreement as set forth
therein shall have been satisfied or waived by CapStar.
(v) CapStar and CapStar Corp. shall have made all necessary
filings with any governmental authority necessary to be made, and shall
have obtained all necessary governmental and other consents, approvals,
and authorizations required to be obtained, by CapStar and CapStar Corp.
in connection with the consummation of the transactions contemplated by
this Agreement with respect to such Contribution Agreement and such
Contribution Agreement.
If any of the foregoing conditions have not been satisfied or waived
by CapStar as of the Closing Date, then CapStar shall be entitled to terminate
this Agreement as to such Transferor, such Property and such Contribution
Agreement by giving such Transferor written notice that it is terminating this
Agreement as to such Transferor, its Property, and the Contribution Agreement to
which such Transferor is a party, and upon such termination CapStar and CapStar
Corp. shall have no further obligation hereunder to such Transferor. CapStar and
CapStar Corp. shall use their reasonable efforts to make the filings and to
obtain the consent, approvals, and authorizations referred to in clause (b)(v)
of this Section 4.1.
4.2 CONDITIONS PRECEDENT TO TRANSFERORS' OBLIGATIONS. The
obligations of each of the Transferors, Dunwoody, Pontch, and Highgate to
consummate the transactions contemplated by this Agreement to be consummated by
it and to perform its obligations under this Agreement are conditioned upon the
satisfaction of t he following conditions as of the Closing Date:
(a) CapStar or the respective Transferor shall not have terminated
the Brookriver Contribution Agreement, the Mockingbird Contribution Agreement
and the Surrey Contribution Agreement pursuant to a termination right granted in
such agreements;
(b) CapStar and CapStar Corp. shall have delivered all of the items
described in Section 5.2(b) of this Agreement.
(c) Each of the representations and warranties of CapStar set forth
in Section 4.1 hereof shall be true, complete, and correct as of the Closing,
and the General Partner shall have provided each Transferor, Dunwoody, Pontch,
and Highgate a certificate certifying that such is the case.
(d) Each of the representations and warranties of CapStar Corp.
set forth in Section 4.2 hereof shall be true, complete, and correct as of the
Closing, and CapStar Corp. shall have provided each Transferor, Dunwoody, and
Highgate a certificate certifying that such is the case.
17
(e) Subject to Section 7.10, the Partnership Agreement shall not
have been amended, restated or modified prior to the Closing Date, and no class
or series of Partnership Units or Preferred Units shall have been established
and units thereof issued for less than fair value of such units prior to the
Closing Date.
(f) Each Transferor, Dunwoody, Pontch, and Highgate shall each have
made all necessary filings with any governmental authority necessary to be made
by it, and shall have obtained, by i tin connection with the consummation of the
transactions contemplated to be entered into by it by this Agreement, and as to
each Transferor, by the Contribution Agreement to which it is a party.
(g) Specifically as to the obligations of a Transferor with respect
to its obligations under this Agreement, the conditions to its obligation to
consummate the transactions contemplated by the Contribution Agreement to which
it is a party as set forth in such Contribution Agreement shall have been
satisfied or waived by such Transferor.
If any of the foregoing conditions have not been satisfied or waived
by a Transferor, Dunwoody, Pontch, or Highgate, as the case may be, as of the
Closing Date with respect to its obligations under this Agreement, and as to
each Transferor, the Contribution Agreement to which such Transferor is a party,
then such Transferor, Dunwoody, Pontch, or Highgate, as the case may be, shall
be entitled to terminate this Agreement as to itself by giving CapStar and
CapStar Corp. written notice that it is terminating this Agreement, and upon
such termination such Transferor, Dunwoody, Pontch, or Highgate, as the case may
be, shall have no further obligation hereunder to CapStar or CapStar Corp.
ARTICLE V
CLOSING
5.1 CLOSING DATE. The Closing shall be held at the offices of ▇▇▇▇▇▇
& ▇▇▇▇, L.L.P., Dallas, Texas on April 14, 1997 or such other place and/or date
as Transferors and CapStar shall mutually agree (the "CLOSING DATE").
5.2 CLOSING DOCUMENTS.
(a) At Closing:
(i) Dunwoody will execute and deliver to CapStar the Four
Points Management Agreement;
(ii) Pontch will execute and deliver to CapStar the
Pontchartrain Management Agreement;
18
(iii) Dunwoody will deliver to CapStar an appropriate
instrument executed by Dunwoody and the current manager of Pontchartrain
pursuant to which the existing management agreement for the Four Points is
terminated as of the Closing Date;
(iv) Pontch will deliver to CapStar an appropriate instrument
executed by Pontch and the current manager of Pontchartrain pursuant to
which the existing management agreement for the Pontchartrain is
terminated as of the Closing Date;
(v) Dunwoody and Pontch will deliver a letter agreement to
CapStar pursuant to which it will guarantee to CapStar the minimum base
management fee of $400,000 in the aggregate under both the Four Points
Management Agreement and the Pontchartrain Management Agreement combined
payable for the 12 months immediately following the Closing Date;
(vi) each Transferor will execute and deliver to CapStar all
agreements, instruments and documents that it is required by the
Contribution Agreement to which it is a party to execute and deliver to
CapStar;
(vii) each party to the Partnership Agreement and the First
Amendment, other than the partners in CapStar immediately prior to the
Closing, shall execute and deliver a counterpart signature page to the
First Amendment to CapStar;
(viii)each party to the Registration Rights Agreement, other
than CapStar Corp., will execute and deliver a counterpart of the
Registration Rights Agreement to CapStar Corp.;
(ix) each of the Transferors shall deliver to CapStar and
CapStar Corp. an executed certificate of the type contemplated by Section
4.1(c);
(x) each party who will become a partner in CapStar and hold
the Partnership Units and Preferred Units to be issued as provided in
Section 2.2 will deliver to CapStar an executed certificate in the form of
Exhibit "E"; and
(xi) Highgate will execute and deliver to CapStar a
counterpart of the development agreement in the form of Exhibit "F".
(b) At Closing, CapStar and CapStar Corp. shall deliver or cause to
be delivered to each of the Transferors, Dunwoody, Pontch, and Highgate, as
appropriate, the following:
19
(i) the Pontchartrain Management Agreement, duly executed
by CapStar;
(ii) the Four Points Management Agreement, duly executed
by CapStar;
(iii) a true and complete copy of the Partnership Agreement;
(iv) the First Amendment, duly executed by CapStar Corp. as
the general partner of CapStar, and each other partner in CapStar;
(v) $68,000,000.00 of cash a provided in Section 2.2, which
amount of cash shall include the aggregate amount of all ▇▇▇▇▇▇▇ money
delivered to the Transferors under the terms of the Contribution
Agreements;
(vi) a legal opinion of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇, Diamond & Ash, counsel to CapStar and CapStar Corp.,
addressing such legal matters as are customary in similar transactions and
as the Transferors, Dunwoody, and/or Pontch may reasonably request;
(vii) a certified copy of such corporate or partnership
existence certificates, authorizations, approvals, officers' certificates
and incumbencies of CapStar as Transferors shall reasonably require;
(viii)an executed certificate of CapStar of the type
contemplated by Section 4.2(c);
(ix) an executed certificate of CapStar Corp. of the type
contemplated by Section 4.2(d); and
(x) CapStar will executed and deliver, or, if applicable,
cause its wholly-owned subsidiary which purchases the Ramada to execute
and deliver, to Highgate a counterpart of the development agreement in the
form of Exhibit "F", and, if such a subsidiary is the party to such
development agreement, a guaranty of CapStar guaranteeing to Highgate the
performance of the obligations of such subsidiary under such development
agreement, which guaranty shall be in form and substance reasonably
satisfactory to Highgate.
ARTICLE VI
REMEDIES
6.1 TRANSFERORS' REMEDIES. If CapStar or CapStar Corp. fails to
perform its obligations under this Agreement for any reason except (a) as a
result of
20
any condition precedent to CapStar's and CapStar Corp.'s obligations under this
Agreement not being satisfied or (b) CapStar's or CapStar Corp.'s termination of
this Agreement in accordance with its terms, then the Transferors shall be
entitled, as their sole and exclusive remedy, to terminate this Agreement as to
one or more of the Contribution Agreements and to terminate such Contribution
Agreements as to which this Agreement is terminated by giving CapStar written
notice of such election prior to or at the Closing Date and the Title Company
shall deliver the ▇▇▇▇▇▇▇ money under each of the Contribution Agreements as to
which this Agreement is terminated to the Transferors. Such amounts shall be
paid to the Transferors as liquidated damages and not as a penalty, in full
satisfaction of any claims against CapStar and CapStar Corp. Transferors,
CapStar and CapStar Corp. agree that Transferors' actual damages resulting from
CapStar's and/or CapStar Corp.'s default are difficult to ascertain and the
payment of the ▇▇▇▇▇▇▇ money amounts to Transferors as described above is a fair
estimate of those damages.
6.2 CAPSTAR'S REMEDIES. If any the Transferors, Dunwoody, or Pontch
fails to perform its obligations under this Agreement for any reason except (x)
as a result of any condition precedent to such Transferor's obligations under
this Agreement not being satisfied or (y) such Transferor's termination of this
Agreement as to such Transferor in accordance with its terms, then CapStar's and
CapStar Corp.'s sole remedies shall be: (a) as to such Transferor, to terminate
this Agreement and the Contribution Agreement to which such Transferor is a
party by giving such Transferor written notice of such election prior to or at
Closing whereupon the Escrow Agent shall promptly return to CapStar the ▇▇▇▇▇▇▇
money with respect to under the Contribution Agreement of such Transferor; (b)
to waive the default and consummate the transactions with such party; or (c) to
enforce specific performance of the obligations of such party under this
Agreement. In the event, pursuant to the terms of this Agreement, CapStar is
entitled to enforce specific performance of a Transferor's obligations under
this Agreement, any lawsuit for specific performance mus be filed within two
years after the Closing Date or CapStar shall be deemed to have irrevocably
waived such remedy, this Agreement shall terminate and the parties shall have
any further rights or obligations hereunder except as expressly provided herein.
In order for CapStar to have the right to bring such lawsuit for specific
performance, CapStar mus send Transferors notice within 90 days after the
Closing Date that CapStar intends to pursue a claim for specific performance.
ARTICLE VII
MISCELLANEOUS
7.1 ENTIRE AGREEMENT. This Agreement, together with the
Contribution Agreements, contain the entire agreement of the parties hereto with
respect to the subject hereof. There are no other agreements, oral or written,
and this
21
Agreement can be amended only by written agreement signed by the Transferors,
CapStar and CapStar Corp.
7.2 BINDING EFFECT. This Agreement shall inure to the benefit of and
be binding upon the heirs, personal representatives, successors and assigns of
each of the parties to this Agreement. CapStar may assign its rights under this
Agreement without Transferor's consent to any partnership or limited liability
company in which CapStar or any entity controlling, controlled by or under
common control with CapStar is a managing partner, general partner, or limited
liability company or to any corporation in which CapStar or any entity
controlling, controlled by or under common control with CapStar owns 50% or more
of the voting stock.
7.3 NOTICES. Any notice, communication, request, reply or advice
(collectively, "NOTICE") provided for or permitted by this Agreement to be made
or accepted by either party must be in writing. Notice may, unless otherwise
provided herein, be given or served by hand delivery, by delivery by overnight
courier or by facsimile transmission. Notice by overnight courier shall be
effective one business day after deposit with the courier service. Notice given
by hand delivery or by facsimile transmission shall be effective on the business
date delivered. For the purposes of Notice, the addresses of the parties shall
be:
Transferors: Highgate Hotels, Inc.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
CapStar: CapStar Management Company, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇, Diamond & Ash
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
22
The parties shall have the right from time to time to change their respective
addresses for notice by at least five days' written notice to the other party.
7.4 GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Delaware.
7.5 SECTION HEADINGS. The section headings contained in this
Agreement are for convenience only and shall in no way enlarge or limit the
scope or meaning of the various and several sections of this Agreement.
7.6 OBLIGATIONS. To the extent necessary to carry out the terms and
provisions of this Agreement, the terms, conditions, representations,
obligations, and rights set forth in this Agreement shall not be terminated at
the time of Closing, nor will they merge into the various documents executed and
delivered at the time of Closing.
7.7 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.
7.8 CONFIDENTIALITY. Other than with respect to required
governmental disclosure, or with respect to customary financial reporting the in
the ordinary course of business, and except as otherwise required by law,
neither Transfers nor CapStar shall, without the prior written consent of the
other, disclose to any person or party (except the parties hereto, their
respective legal counsel, brokers, accountants, lenders or the title company
involved in such transaction) the existence of or economic terms of this
Agreement or of the contribution agreements or the identities of the parties
hereto or thereto. This covenant shall survive the termination of this
Agreement.
7.9 SEVERABILITY. If one or more of the provisions contained in this
Agreement or in any document delivered pursuant to this Agreement shall for any
reason, be held to be invalid, illegal, or unenforceable in any respect in any
jurisdiction, such provision shall be ineffective to the extent of such
invalidity, illegality, or unenforceability, and such invalidity, illegality, or
unenforceability of a provision shall not affect or render invalid, illegal or
unenforceable any other provision of this Agreement or any other such document
or affect or render invalid, illegal or unenforceable such provisions of this
Agreement or any other such document in any other jurisdiction.
7.10 POTENTIAL RESTRUCTURING. The Transferors understand that
CapStar Corp. may, in connection with its state and local tax planning, elect to
effect a restructuring of CapStar Corp. and its subsidiaries. Such restructuring
may include the establishment of a second operating partnership (the "New
Operating Partnership") and the transfer to the New Operating Partnership of
certain assets owned by CapStar.
23
CapStar Corp. agrees that no restructuring that involves a New Operating
Partnership shall be effected prior to the Closing without the prior consent of
the Transferors, which consent shall not be withheld unless such restructuring,
or the modifications hereinafter referred to, would have a material adverse
effect on the Transferors (taking into account, among other relevant factors,
the state and local tax savings resulting from such restructuring). In the event
such restructuring is effected, the parties shall enter into such modifications
to this Agreement and the Contribution Agreements as shall be reasonably
necessary to reflect such restructuring (including, without limitation, if
requested by CapStar Corp., modifications pursuant to which one or more of the
hotels being contributed by the Transferors pursuant to the Contribution
Agreements are contributed to the New operating Partnership rather than
CapStar). CapStar Corp., CapStar, and the Transferors agree that no modification
made to this Agreement and/or any Contribution Agreement or to the terms and
conditions on which the transactions contemplated by this Agreement and the
Contribution Agreements are consummated made in connection with such
restructuring of CapStar Corp. and its subsidiaries will, when considered in the
context of all of the benefits of the restructuring to the holders of the
Partnership Units, the Preferred Units and shares of the Common Stock and the
adverse effects of the restructuring to such holders, result in any reduction or
lessening of any of the benefits to be provided to the Transferors or any of
their respective designees by this Agreement and the Contribution Agreements. If
such restructuring is not effected prior to the Closing, then, at CapStar's
election, the first Amendment shall be modified to impose on the partners of
CapStar the obligations to agree to, and to implement, such restructuring on
terms and conditions consistent with those hereinabove set forth.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
24
IN WITNESS WHEREOF, this Agreement has been duly executed in
multiple counterparts by the parties hereto on the date and year first above
written.
HIGHGATE HOTELS, INC.,
a Delaware Corporation
By: /S/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Authorized Signatory
BROOKRIVER HOTEL PARTNERSHIP, L.P.,
a Texas limited partnership
By: Brookriver Hotels, Inc.,
a Texas corporation,
General Partner
By: /S/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
MOCKINGBIRD HOTEL PROPERTIES JOINT
VENTURE, a Texas joint venture
By: Mockingbird Hotel, Inc.,
a Texas corporation,
General Partner
By: /S/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
25
PONTCH LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Pontch, Inc.,
a Delaware corporation,
General Partner
By: /S/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
KFP DUNWOODY, INC.,
a Texas corporation
By: /S/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
CONTINENTAL PACIFIC INTERFUND, LTD.,
a British Columbia corporation
By: /S/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
GQ INDIANAPOLIS ASSOCIATES, LTD.,
a Texas limited partnership
By: GQ Indianapolis Hospitality, Inc.,
a Texas corporation,
General Partner
By: /S/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
26
CENTENNIAL HOTEL LIMITED,
a British Columbia corporation
By: /S/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Authorized Signatory
361719 ALBERTA LIMITED,
an Alberta corporation
By: /S/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Authorized Signatory
CAPSTAR:
CAPSTAR MANAGEMENT COMPANY, L.P.,
a Delaware limited partnership
By: CapStar Hotel Company,
a Delaware corporation,
General Partner
By: /S/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President
CAPSTAR CORP.:
CAPSTAR HOTEL COMPANY,
a Delaware corporation
By: /S/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President