<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
SCHEDULE 14D-1
TENDER OFFER STATEMENT
(Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934)
UNITED INNS, INC.
(Name of Subject Company)
UNITED/HARVEY HOLDINGS, L.P.
(Bidder)
Common Stock, par value $1.00 per share 910688 10 0
(Title of Class of Securit (CUSIP Number of Class of Securities)
____________________
Robert A. Profusek, Esq. Mark E. Betzen, Esq.
Jones, Day, Reavis & Pogue Jones, Day, Reavis & Pogue
599 Lexington Avenue 2300 Trammell Crow Center
New York, New York 10022 2001 Ross Avenue
(212) 326-3800 Dallas, Texas 75201
(214) 220-3939
(Name, Address and Telephone Number of Persons Authorized to Receive Notices
and Communications on Behalf of the Persons Filing Statement)
____________________
Calculation of Filing Fee
<TABLE>
<CAPTION>
Transaction valuation Amount of Filing Fee
--------------------- --------------------
<S> <C>
$67,622,475* $13,524.50
</TABLE>
* For purposes of calculating fee only. This amount assumes the
purchase of 2,704,899 shares of Common Stock, par value $1.00 per
share, of United Inns, Inc. at $25.00 per share net to the seller in
cash. The amount of the filing fee calculated in accordance with
Regulation 240.0-11 of the Securities Exchange Act of 1934 equals 1/50
of 1% of the value of the shares to be purchased.
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2).
Page 1 of __ Pages
Exhibit Index on Page 11
<PAGE> 2
This Schedule 14D-1 Tender Offer Statement (this "Statement") relates
to a tender offer by United/Harvey Holdings, L.P., a Delaware limited
partnership ("Purchaser"), to purchase all of the outstanding shares of Common
Stock, par value $1.00 per share (the "Shares"), of United Inns, Inc., a
Delaware corporation (the "Company"), at $25.00 per Share, net to the seller in
cash, on the terms and subject to the conditions set forth in Purchaser's Offer
to Purchase, dated November 21, 1994 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which together constitute the "Offer"), and is
intended to satisfy the reporting requirements of Section 14(d) of the
Securities Exchange Act of 1934, as amended. Copies of the Offer to Purchase
and the related Letter of Transmittal are filed as Exhibits (a)(1) and (a)(2),
respectively, hereto.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is United Inns, Inc., and the
address of its principal executive offices is 5100 Poplar Avenue, Suite 2300,
Memphis, Tennessee 38137.
(b) The class of the securities to which this Statement relates is the
Common Stock, par value $1.00 per share, of the Company. The information set
forth in "Introduction" in the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends and Distributions") of the Offer to Purchase is incorporated herein
by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) The information set forth in "Introduction" and
Section 9 ("Certain Information Concerning Purchaser") of, and Schedule I
("Certain Information Concerning Controlling Persons of Purchaser") to, the
Offer to Purchase is incorporated herein by reference.
(e)-(f) During the last five years, none of the persons filing this
Statement nor, to their knowledge, any of the persons listed on Schedule I to
the Offer to Purchase (i) has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, federal or state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) Not applicable.
(b) The information set forth in Section 11 ("Past Contacts and
Negotiations") and Section 12 ("Purpose of the Offer and the Merger; Plans for
the Company") of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in Section 10 ("Sources and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(b)-(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in Section 12 ("Purpose of the Offer
and the Merger; Plans for the Company") of the Offer to Purchase is
incorporated herein by reference.
(f)-(g) The information set forth in Section 7 ("Effect of the Offer
on the Market for Shares; Exchange Act Registration; Margin Regulations") of
the Offer to Purchase is incorporated herein by reference.
2
<PAGE> 3
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) The information set forth in Section 9 ("Certain Information
Concerning Purchaser") and Section 12 ("Purpose of the Offer and the Merger;
Plans for the Company") of the Offer to Purchase is incorporated herein by
reference.
(b) Not applicable.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY SECURITIES.
The information set forth in Section 11 ("Past Contacts and
Negotiations") and Section 12 ("Purpose of the Offer and the Merger; Plans for
the Company") of the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Introduction" and Section 16 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
ITEM 10. ADDITIONAL INFORMATION.
(a), (e) Not applicable.
(b)-(c) The information set forth in Section 15 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 ("Effect of the Offer on
the Market for Shares; Exchange Act Registration; Margin Regulations") of the
Offer to Purchase is incorporated herein by reference.
(f) Additional information with respect to the Offer contained in
Exhibit (a)(1) and (a)(2) is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
99.(a) (1) Offer to Purchase, dated November 21, 1994.
99.(a) (2) Letter of Transmittal.
99.(a) (3) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
99.(a) (4) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
99.(a) (5) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
99.(b) Not applicable.
99.(c) (1) Agreement and Plan of Merger, dated as of November 14,
1994, among Purchaser, United/Harvey Hotels, Inc.,
United/Harvey Sub, Inc. and the Company.
99.(c) (2) Combination Agreement, dated as of November 14, 1994, among
Purchaser, United/Harvey Hotels, Inc., United/Harvey Sub,
Inc., Harvey Hotel Company, Ltd. and other persons
signatory thereto.
3
<PAGE> 4
99.(c) (3) Letter Agreement, dated November 4, 1994, among Purchaser,
Harvey Hotel Company, Ltd. and the Company.
99.(c) (4) Confidentiality Agreement, dated July 14, 1994, between
Hampstead Investments, Inc. and the Company.
99.(c) (5) Letter Agreement, dated November 21, 1994, between
Purchaser and Cockroft Consolidated Corporation.
99.(d)-(f) Not applicable.
99.(g) (1) Powers of Attorney
4
<PAGE> 5
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: November 21, 1994.
UNITED/HARVEY HOLDINGS, L.P.
By: Hampstead Genpar, L.P., its General Partner
By: HH Genpar Partners, its General Partner
By: Hampstead Associates, Inc., its
General Partner
By: /s/ Daniel A. Decker
Name: Daniel A. Decker
Title: Executive Vice President
5
<PAGE> 6
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: November 21, 1994.
HAMPSTEAD GENPAR, L.P.
By: HH Genpar Partners, its General Partner
By: Hampstead Associates, Inc., its
General Partner
By: /s/ Daniel A. Decker
Name: Daniel A. Decker
Title: Executive Vice President
6
<PAGE> 7
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: November 21, 1994.
HH GENPAR PARTNERS
By: Hampstead Associates, Inc., its
General Partner
By: /s/ Daniel A. Decker
Name: Daniel A. Decker
Title: Executive Vice President
7
<PAGE> 8
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: November 21, 1994.
HAMPSTEAD ASSOCIATES, INC.
By: /s/ Daniel A. Decker
Name: Daniel A. Decker
Title: Executive Vice President
8
<PAGE> 9
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: November 21, 1994.
RAW GENPAR, INC.
By: /s/ Robert A. Whitman
Name: Robert A. Whitman
Title: President
9
<PAGE> 10
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: November 21, 1994.
INCAP, INC.
By: /s/ Daniel A. Decker
Name: Daniel A. Decker
Title: President
10
<PAGE> 11
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBITS PAGE
- -------- -----------
<S> <C> <C>
99.(a) (1) Offer to Purchase, dated November 21, 1994 . . . . . . . . . . . . . . . . . . . .
99.(a) (2) Letter of Transmittal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99.(a) (3) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99.(a) (4) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees . . . . . . . . . . . . . . . . . . . . . . . .
99.(a) (5) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99.(c) (1) Agreement and Plan of Merger, dated as of November 14, 1994, among Purchaser,
United/Harvey Hotels, Inc., United/Harvey Sub, Inc. and the Company . . . . . . . .
99.(c) (2) Combination Agreement, dated as of November 14, 1994, among Purchaser,
United/Harvey Hotels, Inc., United/Harvey Sub, Inc., Harvey Hotel Company,
Ltd. and other persons signatory thereto . . . . . . . . . . . . . . . . . . . . .
99.(c) (3) Letter Agreement, dated November 4, 1994, among Purchaser, Harvey Hotel Company,
Ltd. and the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99.(c) (4) Confidentiality Agreement, dated July 14, 1994, between Hampstead Investments,
Inc. and the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99.(c) (5) Letter Agreement, dated November 21, 1994, between Purchaser and Cockroft
Consolidated Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99.(g) (1) Powers of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
11
<PAGE> 1
EXHIBIT 99.(a)(1)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
UNITED INNS, INC.
AT $25.00 NET PER SHARE
by
UNITED/HARVEY HOLDINGS, L.P.
***************************************************************************
* *
* THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK *
* CITY TIME, ON FRIDAY, JANUARY 20, 1995, UNLESS THE OFFER IS *
* EXTENDED. *
* *
***************************************************************************
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY (I) DETERMINED
THAT THE OFFER AND THE PROPOSED CASH MERGER BETWEEN THE COMPANY AND AN INDIRECT
SUBSIDIARY OF PURCHASER ARE IN THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS
AND (II) APPROVED THE RELATED MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE CASH MERGER.
THE OFFER IS CONDITIONED ON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THAT
NUMBER OF SHARES THAT, WHEN TAKEN AS A WHOLE WITH ALL OTHER SHARES OWNED OR
ACQUIRED BY PURCHASER, WOULD CONSTITUTE A MAJORITY OF THE OUTSTANDING SHARES ON
A FULLY DILUTED BASIS. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS
CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTION 14.
____________________
IMPORTANT
Any stockholder desiring to tender all or any portion of its Shares
should either (i) complete and sign the Letter of Transmittal or a facsimile
copy thereof in accordance with the instructions in the Letter of Transmittal,
mail or deliver it and any other required documents to the Depositary and
either deliver the certificates for such Shares to the Depositary together with
the Letter of Transmittal or tender such Shares to the Depositary pursuant to
the procedures for book-entry transfer set forth in Section 3 or (ii) request
its broker, dealer, commercial bank, trust company or nominee to effect the
transaction. A stockholder having Shares registered in the name of a broker,
dealer, commercial bank, trust company or nominee must contact such person if
it desires to tender such Shares. No provisions for tendering Shares by
guaranteed delivery have been made. Accordingly, stockholders are urged to
review carefully the requirements for the valid tendering of Shares set forth
in Section 3.
Questions and requests for assistance or for additional copies of this
Offer to Purchase and the Letter of Transmittal may be directed to the
Information Agent at its address and telephone numbers set forth on the back
cover of this Offer to Purchase. Stockholders may also contact their brokers,
dealers, commercial banks, trust companies or nominees for assistance
concerning the Offer.
____________________
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.
November 21, 1994
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Certain Actions of the Company's Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agreement with Substantial Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Certain Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1. Terms of the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Acceptance for Payment and Payment for Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. Procedure for Tendering Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. Withdrawal Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5. Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6. Price Range of Shares; Dividends and Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7. Effect of the Offer on the Market for Shares; Exchange Act Registration;
Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8. Certain Information Concerning the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
9. Certain Information Concerning Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10. Sources and Amount of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
11. Past Contacts and Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
12. Purpose of the Offer and the Merger; Plans for the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
13. Dividends and Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14. Certain Conditions of the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
15. Certain Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
16. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
17. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
Schedule I - Certain Information Concerning Controlling Persons of Purchaser
<PAGE> 3
To the Stockholders of United Inns, Inc.:
INTRODUCTION
THE OFFER
United/Harvey Holdings, L.P. ("Purchaser") hereby offers to purchase
all of the outstanding shares of common stock (the "Shares") of United Inns,
Inc. (the "Company") at $25.00 per Share, net to the seller in cash (the "Offer
Price"), on the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which together constitute
the "Offer").
The Offer is being made pursuant to an Agreement and Plan of Merger
(the "Merger Agreement") among Purchaser, United/Harvey Hotels, Inc., a wholly
owned subsidiary of Purchaser ("United/Harvey"), United/Harvey Sub, Inc., a
wholly owned subsidiary of United/Harvey ("Merger Sub"), and the Company. The
Merger Agreement provides, among other things, for the commencement of the
Offer by Purchaser and further provides that, subject to the satisfaction or
waiver of certain conditions (including the condition that the Offer shall have
been consummated), Merger Sub will be merged with the Company (the "Merger"),
with the Company thereby becoming a direct wholly owned subsidiary of
United/Harvey. The Merger Agreement provides that each outstanding Share
(other than Shares owned by United/Harvey, the Company or any subsidiary of the
Company and Shares owned by stockholders who have properly exercised their
appraisal rights under Delaware law) will be converted at the effective time of
the Merger (the "Effective Time") into the right to receive the Offer Price in
cash, without interest and less any required withholding taxes. See Section 12
for additional information concerning the Merger Agreement and the Merger.
As described in Section 11, the various proposals made by or on behalf
of Purchaser with respect to the acquisition of the Company contemplated that
the Company's stockholders would be given the option to receive in exchange for
Shares either cash or common stock of United/Harvey, which was formed by
Purchaser to acquire all of the outstanding equity interests in the Company and
Harvey Hotel Company, Ltd. and Harvey Hotel Management Company (collectively,
"Harvey Hotels"). See Section 12 for additional information concerning the
manner in which United/Harvey intends to acquire all of the outstanding equity
interests in the Company and Harvey Hotels.
The Merger Agreement as presently in effect provides for the
conversion of nontendered Shares into the right to receive the Offer Price in
cash, as described above. However, Purchaser expressly reserves the right
following the consummation of the Offer to cause the Merger Agreement to be
amended to provide nontendering stockholders the option (the "Cash/Stock
Option") to elect to receive in exchange for each Share converted in the Merger
either (i) cash in an amount at least equal to the Offer Price or (ii) common
stock of United/Harvey ("United/Harvey Shares"). Whether or not Purchaser
makes the Cash/Stock Option available to nontendering stockholders will depend
upon a number of factors, including the number of Shares outstanding and owned
by persons other than Purchaser following the consummation of the Offer, and
will be subject to compliance with applicable legal requirements, including the
Securities Act of 1933, as amended (the "Securities Act"), and applicable state
securities laws. Accordingly, there can be no assurance as to whether the
Cash/Stock Option will be made available to nontendering stockholders or, if
so, as to the timing thereof. See Section 12 for additional information
concerning the Cash/Stock Option. Regardless of whether the Cash/Stock Option
is made available, Purchaser will, either pursuant to the Merger Agreement as
presently in effect or otherwise, subject to conditions no more favorable to
Purchaser than those contained in the Merger Agreement as presently in effect,
provide nontendering stockholders an opportunity following the consummation of
the Offer to receive cash in an amount at least equal to the Offer Price in
exchange for each Share not tendered pursuant to the Offer.
It is contemplated that, upon the purchase of Shares by Purchaser
pursuant to the Offer, the Company's Board of Directors will be reconstituted
in its entirety to consist solely of Purchaser's designees. Any action of the
Company's Board of Directors following the consummation of the Offer with
respect to any amendment to the Merger Agreement to provide for the Cash/Stock
Option will constitute an action of the Company's Board of Directors as then
reconstituted. PURCHASER HAS BEEN ADVISED BY THE COMPANY THAT ITS BOARD OF
DIRECTORS
-1-
<PAGE> 4
AS PRESENTLY CONSTITUTED (I) HAS NOT MADE AND IS NOT EXPECTED TO MAKE ANY
DETERMINATION AS TO WHETHER THE CASH/STOCK OPTION OR ANY SUCH AMENDMENT TO THE
MERGER AGREEMENT WOULD BE IN THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS
AND (II) HAS NOT APPROVED AND IS NOT EXPECTED TO APPROVE THE CASH/STOCK OPTION
OR ANY SUCH AMENDMENT. SIMILARLY, THE SMITH BARNEY OPINION (AS HEREINAFTER
DEFINED) DOES NOT ADDRESS AND IS NOT INTENDED TO ADDRESS THE FAIRNESS, FROM A
FINANCIAL POINT OF VIEW, TO THE COMPANY'S STOCKHOLDERS OF ANY NONCASH
CONSIDERATION THAT MAY BE RECEIVED BY HOLDERS OF SHARES PURSUANT TO THE MERGER
IF THE MERGER AGREEMENT WERE AMENDED TO PROVIDE FOR THE CASH/STOCK OPTION, AND
NEITHER THE COMPANY NOR PURCHASER HAS SOUGHT OR OBTAINED ANY ADVICE OR OPINION
FROM ANY INDEPENDENT FINANCIAL ADVISOR WITH RESPECT THERETO. THE OFFER DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OF UNITED/HARVEY; ANY SUCH OFFER MAY BE MADE ONLY PURSUANT TO A
PROSPECTUS SATISFYING THE REQUIREMENTS OF THE SECURITIES ACT.
Certain federal income tax consequences of the sale of Shares pursuant
to the Offer and the conversion of Shares pursuant to the Merger are described
in Section 5.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 7 to the Letter of
Transmittal, transfer taxes on the sale of Shares pursuant to the Offer.
Purchaser will pay all charges and expenses of American Stock Transfer & Trust
Company, as the depositary (the "Depositary"), and MacKenzie Partners, Inc., as
the information agent (the "Information Agent"), incurred in connection with
the Offer. See Section 16.
CERTAIN ACTIONS OF THE COMPANY'S BOARD
WITHOUT MAKING ANY DETERMINATION WITH RESPECT TO OR APPROVING THE
POSSIBLE CASH/STOCK OPTION OR ANY RELATED AMENDMENT TO THE MERGER AGREEMENT
THAT MAY BE APPROVED BY ANY SUCCESSOR BOARD OF DIRECTORS, THE BOARD OF
DIRECTORS OF THE COMPANY AS PRESENTLY CONSTITUTED HAS UNANIMOUSLY (I)
DETERMINED THAT THE OFFER AND THE MERGER ARE IN THE BEST INTERESTS OF THE
COMPANY'S STOCKHOLDERS AND (II) APPROVED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER.
Smith Barney Inc., the Company's financial advisor ("Smith Barney"),
has delivered to the Board of Directors of the Company a written opinion, dated
November 14, 1994, to the effect that, as of the date of such opinion and based
upon and subject to certain matters stated therein, the cash consideration to
be received by holders of Shares pursuant to the Offer and the Merger was fair,
from a financial point of view, to such holders. A copy of the opinion of
Smith Barney (the "Smith Barney Opinion"), which sets forth the assumptions
made, matters considered and limitations on the review undertaken by Smith
Barney, will be contained in the Company's Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") to be filed with the
Securities and Exchange Commission (the "Commission") in connection with the
Offer and furnished to stockholders by the Company. The Smith Barney Opinion
is directed only to the fairness, from a financial point of view, of the cash
consideration to be received by holders of Shares pursuant to the transactions
contemplated by the Merger Agreement as presently in effect and is not intended
to constitute, and does not constitute, a recommendation to any stockholder of
the Company as to whether such stockholder should tender Shares pursuant to the
Offer.
AGREEMENT WITH SUBSTANTIAL STOCKHOLDER
Purchaser has entered into an agreement (the "Cockroft Agreement")
with Cockroft Consolidated Corporation ("Cockroft"), pursuant to which Cockroft
has agreed to tender pursuant to the Offer and not withdraw all of the
1,209,214 Shares (the "Cockroft Shares"), constituting approximately 45.4% of
the total number of outstanding Shares, owned by it. Pursuant to the Cockroft
Agreement, Purchaser also has the right to purchase all (but not less than all)
of the Cockroft Shares from Cockroft if, in general, the Offer is not
consummated after (i) a competing tender offer has been proposed or commenced
at a price per Share in excess of the Offer Price, (ii) a person or group of
persons acting in concert has acquired beneficial ownership of more than 25% of
the outstanding Shares, or (iii) a proxy or consent solicitation seeking
approval by the Company's stockholders of a competing transaction has been
commenced, at a price per share equal to the Offer Price (subject to increase
in certain circumstances under which Purchaser has the right to terminate the
Merger Agreement). See Section 12 for additional information concerning the
Cockroft Agreement.
CERTAIN CONDITIONS
The Offer is conditioned on, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer at least that
number of Shares that, when taken as a whole with all other Shares owned or
acquired by Purchaser, would constitute a majority of the outstanding Shares on
a fully diluted basis (the "Minimum Tender Condition"). The Offer is also
subject to certain conditions contained in this Offer to Purchase. See Section
14. Subject to the terms of the Merger Agreement, Purchaser expressly reserves
the right (but shall not be obligated) to waive any condition of the Offer.
See Section 1.
The consummation of the Merger is subject to the satisfaction or
waiver of a number of conditions, including, if required, the adoption of the
Merger Agreement by the requisite vote or consent of the stockholders of the
Company. Under the Delaware General Corporation Law (the "DGCL"), the
stockholder vote or consent necessary to adopt the Merger Agreement will be the
affirmative vote or consent of at least a majority of the
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<PAGE> 5
outstanding Shares, including Shares held by Purchaser and its affiliates. If
the Minimum Tender Condition is satisfied and Purchaser purchases Shares
pursuant to the Offer, Purchaser will be able to effect the adoption of the
Merger Agreement (whether in its present form or as it may be amended to
provide for the Cash/Stock Option), either at a meeting of the Company's
stockholders or pursuant to a written consent in lieu of such a meeting,
without the affirmative vote or consent of any other stockholder of the
Company.
STOCKHOLDERS ARE URGED TO READ THIS OFFER TO PURCHASE AND THE RELATED
LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER THEIR SHARES.
1. TERMS OF THE OFFER
On the terms and subject to the conditions of the Offer, Purchaser
will accept for payment, and thereby purchase, all Shares validly tendered
prior to the Expiration Date and not properly withdrawn in the manner described
in Section 4. The term "Expiration Date" means 5:00 P.M., New York City time,
on January 20, 1995, unless and until Purchaser, in accordance with the terms
of the Offer and the Merger Agreement, shall have extended the period of time
for which the Offer is open, in which event the term "Expiration Date" will
mean the latest time and date on which the Offer, as so extended, expires.
In the event that the Offer is not consummated, Purchaser may seek to
acquire additional Shares through open market purchases, privately negotiated
transactions or otherwise, upon such terms and conditions and at such prices as
it shall determine, which may be more or less than the Offer Price and could be
for cash or other consideration.
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Tender Condition and the expiration or termination of any waiting
periods applicable to the Offer under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the regulations thereunder (the "HSR
Act"). The Offer is also subject to certain other conditions set forth in
Section 14. Subject to the terms of the Merger Agreement, Purchaser expressly
reserves the right (but shall not be obligated) to waive any such condition of
the Offer, to increase the price per Share payable in the Offer or to make any
other changes in the terms and conditions of the Offer (provided that no change
may be made that (i) decreases the price per Share payable in the Offer (except
to reflect the difference, if any, between 2,704,899 Shares (see Section 7) and
the number of Shares outstanding as of the Expiration Date, calculated on a
fully diluted basis), (ii) reduces the maximum number of Shares to be purchased
in the Offer, (iii) changes the form of consideration to be paid in the Offer,
or (iv) imposes conditions to the Offer in addition to those set forth in
Section 14.
Subject to the terms of the Merger Agreement, Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time,
and regardless of the circumstances, upon the occurrence of any of the
conditions specified in Section 14, to delay acceptance for payment of or
payment for any Shares, regardless of whether the Shares were theretofore
accepted for payment, or to terminate the Offer and not accept for payment or
pay for any Shares not theretofore accepted for payment or paid for, by giving
oral or written notice of such delay in payment or termination to the
Depositary. Any extension, termination or amendment will be followed as
promptly as practicable by public announcement thereof, such announcement, in
the case of an extension, to be issued no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date
in accordance with the public announcement requirements of Rule 14d-4(c) under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Without
limiting the obligations of Purchaser under such Rule or the manner in which
Purchaser may choose to make any public announcement, Purchaser shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to the Dow Jones News Service. If
the Offer is extended, then without prejudice to Purchaser's rights under the
Offer, the Depositary may retain tendered Shares on behalf of Purchaser, and
such Shares may not be withdrawn, except to the extent tendering stockholders
are entitled to withdrawal rights as described in Section 4.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c) and 14d-6(d) under the Exchange
Act. The minimum
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<PAGE> 6
period during which an offer must remain open following material changes in the
terms of the offer or information concerning the offer, other than a change in
price or a change in percentage of securities sought, will depend upon the
facts and circumstances, including the relative materiality of the terms or
information changed. In a public release, the Commission has stated that, in
its view, an offer must remain open for a minimum period of time following a
material change in the terms of the offer and that a waiver of a material
condition is a material change in the terms of the offer. The release states
that an offer shall remain open for a minimum of five business days from the
date a material change is first published, sent or given to security holders
and that, if material changes are made with respect to information not
materially less significant than the offer price and the number of shares being
sought, a minimum of 10 business days may be required to allow adequate
dissemination and investor response. The requirement to extend the Offer will
not apply to the extent that the number of business days remaining between the
occurrence of the change and the then-scheduled Expiration Date equals or
exceeds the minimum extension period that would be required because of such
amendment. As used in this Offer to Purchase, "business day" means any day,
other than Saturday, Sunday or a federal holiday, and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
The Company has furnished to Purchaser a list of the holders of Shares
and lists of securities positions of Shares held in stock depositories for the
purpose of disseminating the Offer to holders of Shares. The Offer to
Purchase, the Letter of Transmittal and other relevant materials are being
mailed by Purchaser to record holders of Shares and are being furnished to
brokers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the Company's stockholder lists or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
On the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such
extension or amendment), Purchaser will accept for payment, and thereby
purchase, and will pay for, all Shares validly tendered prior to the Expiration
Date (and not properly withdrawn in the manner described in Section 4) as soon
as practicable after the later of (i) the Expiration Date and (ii) the
satisfaction or waiver of all of the conditions to the Offer set forth herein.
Purchaser expressly reserves the right, in its discretion, subject to
applicable laws and regulations, to delay acceptance for payment of or payment
for Shares in order to comply, in whole or in part, with any applicable law,
government regulation or condition contained herein.
In all cases, payment for Shares purchased pursuant to the Offer will
be made only after timely receipt by the Depositary of (i) certificates for
such Shares or timely confirmation (a "Book-Entry Confirmation") of the
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company, the Midwest Securities Trust Company or the
Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer
Facilities") in accordance with the procedures described in Section 3, (ii) the
Letter of Transmittal (or a manually signed facsimile thereof), properly
completed and duly executed with all required signature guarantees, and (iii)
all other documents required by the Letter of Transmittal. See Section 3.
For purposes of the Offer, Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not withdrawn
if, as and when Purchaser gives oral or written notice to the Depositary of its
acceptance of such Shares for payment. Payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for the tendering stockholders for
purposes of receiving payments from Purchaser and transmitting such payments to
the tendering stockholders. If, for any reason, acceptance for payment of any
Shares tendered pursuant to the Offer is delayed, or Purchaser is unable to
accept for payment Shares tendered pursuant to the Offer, then, without
prejudice to Purchaser's rights under Section 14, the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares
may not be withdrawn, except to the extent that the tendering stockholders are
entitled to withdrawal rights as described in Section 4 and as otherwise
required by Rule 14e-1(c) under the Exchange Act. Under no circumstances will
interest on the purchase price for Shares be paid, regardless of any delay in
making such payment.
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<PAGE> 7
If any tendered Shares are not purchased for any reason, or if
certificates representing more Shares than are tendered are submitted to the
Depositary, certificates for such unpurchased or untendered Shares will be
returned pursuant to the instructions of the tendering stockholder, without
expense to the tendering stockholder (or, in the case of Shares tendered by the
book-entry transfer of such Shares into the Depositary's account at a
Book-Entry Transfer Facility in accordance with the procedures set forth in
Section 3, such Shares will be credited to an account maintained within such
Book-Entry Transfer Facility), as promptly as practicable following the
expiration, termination or withdrawal of the Offer.
If, prior to the Expiration Date, Purchaser increases the
consideration offered to stockholders pursuant to the Offer, such increased
consideration will be paid to all stockholders whose Shares are purchased
pursuant to the Offer, whether or not such Shares were tendered prior to such
increase in consideration.
Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of its affiliates the right to purchase
Shares tendered pursuant to the Offer. Any transfer or assignment contemplated
in this paragraph will not relieve Purchaser of its obligations under the Offer
and will in no way prejudice the rights of tendering stockholders to receive
payment for Shares validly tendered and accepted for payment pursuant to the
Offer.
3. PROCEDURE FOR TENDERING SHARES
Valid Tenders. For Shares to be validly tendered pursuant to the
Offer, a Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed with any required signature guarantees and
all other documents required by the Letter of Transmittal, must be received by
the Depositary at its address set forth on the back cover of this Offer to
Purchase on or prior to the Expiration Date. In addition, certificates for
such Shares must be received by the Depositary, together with the Letter of
Transmittal, at such address, or such Shares must be tendered pursuant to the
procedures for book-entry tender described below and a Book-Entry Confirmation
received by the Depositary, in each case on or prior to the Expiration Date.
No alternative, conditional or contingent tenders will be accepted, and no
provisions have been made for tendering Shares pursuant to any guaranteed
delivery procedure.
Book-Entry Transfer. The Depositary will establish accounts with
respect to the Shares at the Book-Entry Transfer Facilities for purposes of the
Offer within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in a Book-Entry Transfer Facility's
system may make book-entry delivery of Shares by causing such Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account in
accordance with such Book-Entry Transfer Facility's procedure for such
transfer. Although delivery of Shares may be effected through book-entry at a
Book-Entry Transfer Facility, a Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed with any required
signature guarantees and all other documents required by the Letter of
Transmittal, must, in any case, be transmitted to and received by the
Depositary at its address set forth on the back cover of this Offer to Purchase
prior to the Expiration Date. Delivery of documents to an account established
by the Depositary at a Book-Entry Transfer Facility does not constitute
delivery to the Depositary.
In all cases, Shares will not be deemed validly tendered unless a
properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof) is received by the Depositary on or prior to the
Expiration Date.
The method of delivery of certificates for Shares, the Letter of
Transmittal and any other required documents is at the option and risk of the
tendering stockholder. If delivery is made by mail, registered mail with
return receipt requested, properly insured, is recommended. In all cases,
sufficient time should be allowed to ensure timely delivery.
In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of certificates for such Shares or of a Book-Entry Confirmation relating to
such Shares and a Letter of Transmittal (or manually signed facsimile thereof),
properly completed
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<PAGE> 8
and duly executed with any required signature guarantees and all other
documents required by the Letter of Transmittal.
Signature Guarantees. If Shares are tendered otherwise than (i) by a
registered holder of such Shares or (ii) for the account of a firm that is a
bank, broker, dealer, credit union, savings association or other entity which
is a member in good standing in the Securities Transfer Agents Medallion
Program, the Stock Exchange Medallion Program or the New York Stock Exchange,
Inc. Medallion Signature Program (each an "Eligible Institution"), all
signatures on the Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 1 of the Letter of Transmittal. If the
certificates representing Shares are registered in the name of a person other
than the signer of a Letter of Transmittal, or if payment is to be made, or
unpurchased or untendered Shares are to be issued to a person other than the
registered holder, the certificates for Shares must be endorsed or accompanied
by appropriate stock powers, in either case signed exactly as the name or names
of the registered holder or holders appear on the certificates, with the
signatures on the certificates or stock powers guaranteed as provided in the
Letter of Transmittal. See Instruction 1 of the Letter of Transmittal.
Backup Federal Income Tax Withholding. To prevent backup federal
income tax withholding on payments made to certain stockholders with respect to
the purchase price of Shares purchased pursuant to the Offer, each such
stockholder must provide the Depositary with its correct taxpayer
identification number and certify that such stockholder is not subject to
backup federal income tax withholding by completing the Substitute Form W-9
included as part of the Letter of Transmittal.
Determination of Validity. In order for any tender of Shares to be
valid, it must be in proper form. All questions as to the form of documents
and the validity, eligibility (including time of receipt) and acceptance for
payment of any tender of Shares will be determined by Purchaser, in its sole
discretion, which determination will be final and binding on all parties.
Purchaser reserves the right to waive any defect or irregularity in the tender
of any Shares. No tender of Shares will be deemed to have been validly made
until all defects and irregularities have been cured or waived. None of
Purchaser, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defects or irregularities in tenders
or will incur any liability for failure to give any such notification.
Purchaser's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and instructions thereto) will be final and binding.
Other Requirements. By executing a Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's attorneys-in-fact and proxies, each with full power of
substitution and resubstitution, in the manner set forth in the Letter of
Transmittal, to the full extent of such stockholder's rights with respect to
the Shares tendered by such stockholder and accepted for payment by Purchaser
and with respect to any and all other shares or other securities issued or
issuable in respect of such Shares on or after the date of this Offer to
Purchase. All such proxies will be considered coupled with an interest in the
tendered Shares. Such appointment will be effective when, and only to the
extent that, Purchaser accepts such Shares for payment pursuant to the Offer.
Upon such appointment, all prior proxies given by such stockholder (with
respect to such Shares and such other shares and securities) will be revoked,
without further action, and no subsequent proxies may be given by such
stockholder (and, if given, will not be deemed effective). The designees of
Purchaser will be empowered, among other things, to exercise all voting and
other rights of such stockholder as they in their sole discretion may deem
proper at any annual, special or adjourned meeting of the stockholders or
otherwise. In order for Shares to be validly tendered, upon the acceptance for
payment of such Shares, Purchaser must be able to exercise full voting rights
with respect to such Shares (or other securities or rights), including voting
at any meeting of stockholders, whether or not scheduled, and consenting to any
action to be taken by stockholders in the absence of a meeting.
The tender of Shares pursuant to the procedures described above will
constitute a binding agreement between the tendering stockholder and Purchaser
on the terms and subject to the conditions of the Offer, including the
tendering stockholder's representation and warranty that (i) such stockholder
has full power and authority to tender, sell, assign and transfer such Shares
and (ii) when the same are accepted for payment by Purchaser, Purchaser will
acquire good, marketable and unencumbered title thereto, free and clear of all
liens, restrictions, charges and encumbrances and will not be subject to any
adverse claim.
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<PAGE> 9
4. WITHDRAWAL RIGHTS
Except as otherwise stated below, tenders of Shares made pursuant to
the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by Purchaser pursuant to the Offer, may also be withdrawn
at any time after January 20, 1995. If Purchaser extends the Offer, is delayed
in its purchase of or payment for Shares or is unable to purchase or pay for
Shares for any reason, then, without prejudice to the rights of Purchaser
hereunder, tendered Shares may be retained by the Depositary on behalf of
Purchaser and may not be withdrawn except to the extent that tendering
stockholders are entitled to withdrawal rights as set forth in this Section 4.
The reservation by Purchaser of the right to delay the acceptance or
purchase of or payment for Shares is subject to the provisions of Rule 14e-1(c)
under the Exchange Act, which requires Purchaser to pay the consideration
offered or return Shares deposited by or on behalf of stockholders promptly
after the termination or withdrawal of the Offer.
For a withdrawal to be effective, a written, telegraphic or facsimile
notice of withdrawal must be timely received by the Depositary at its address
set forth on the back cover of this Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the names in which the
certificates representing the Shares to be withdrawn are registered, if
different from that of the person who tendered such Shares. If certificates
representing Shares have been delivered or otherwise identified to the
Depositary, then, prior to the release of such certificates, the tendering
stockholder must also submit the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn and, unless such Shares have
been tendered for the account of an Eligible Institution, the signature(s) on
the notice of withdrawal must be guaranteed by an Eligible Institution. If
Shares have been tendered pursuant to the procedures for book-entry transfer
set forth in Section 3, any notice of withdrawal must also specify the name and
number of the account at the appropriate Book-Entry Transfer Facility to be
credited with the withdrawn Shares.
All questions as to the form and validity (including time of receipt)
of any notice of withdrawal will be determined by Purchaser, in its sole
discretion, which determination will be final and binding on all parties. No
withdrawal of Shares will be deemed to have been properly made until all
defects and irregularities have been cured or waived. None of Purchaser, the
Depositary, the Information Agent nor any other person will be under any duty
to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give such notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to
the Expiration Date by again following one of the procedures described in
Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
General. The following is a general summary of the material federal
income tax consequences of the Offer and the Merger to holders whose Shares are
purchased pursuant to the Offer or converted pursuant to the Merger (including
any cash amounts received by dissenting stockholders pursuant to the exercise
of appraisal rights). The discussion applies only to holders of Shares in
whose hands Shares are capital assets, and may not apply to Shares received
pursuant to the exercise of employee stock options or otherwise as
compensation, or to holders of Shares who are not citizens or residents of the
United States.
The federal income tax consequences set forth below are included for
general informational purposes only and are based upon present law. BECAUSE
INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES SHOULD CONSULT SUCH
HOLDER'S OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES DISCUSSED
BELOW TO SUCH STOCKHOLDER AND THE PARTICULAR TAX EFFECTS OF THE OFFER AND THE
MERGER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND OTHER TAX
LAWS.
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<PAGE> 10
Receipt of Cash in the Offer or the Merger. The sale of Shares for
cash pursuant to the Offer or the conversion of Shares into the right to
receive cash pursuant to the Merger (including any cash amounts received by
dissenting stockholders pursuant to the exercise of appraisal rights) will be a
taxable transaction for federal income tax purposes (and in addition will
probably be a taxable transaction under applicable state, local and other
income tax laws). In general, for federal income tax purposes, a holder of
Shares will recognize gain or loss equal to the difference between such
holder's adjusted tax basis in the Shares sold pursuant to the Offer or
converted to cash in the Merger and the amount of cash received therefor. Gain
or loss must be determined separately for each block of Shares (i.e., Shares
acquired at the same cost in a single transaction) sold pursuant to the Offer
or converted to cash in the Merger. Such gain or loss generally will be capital
gain or loss and will be long-term gain or loss if, on the date of sale (or,
if applicable, the date of the Merger), the Shares were held for more than one
year.
Under present federal income tax laws, in certain circumstances
capital gains are subject to more favorable federal income tax rates than
ordinary income. From time to time, there has been legislation introduced in
Congress designed to further enhance the favorable tax treatment of capital
gains. However, there can be no assurance that any such legislation will be
enacted or, if so, as to the possible timing thereof.
Payments in connection with the Offer or the Merger may be subject to
"backup withholding" at a 31% rate. Backup withholding generally applies if
the stockholder (i) fails to furnish such stockholder's social security number
or other taxpayer identification number ("TIN"), (ii) furnishes an incorrect
TIN, (iii) fails properly to report interest or dividends, or (iv) under
certain circumstances, fails to provide a certified statement, signed under
penalties of perjury, that the TIN provided is such stockholder's correct
number and that such stockholder is not subject to backup withholding. Backup
withholding is not an additional tax but merely an advance payment, which may
be refunded to the extent it results in an overpayment of tax. Certain persons
generally are exempt from backup withholding, including corporations and
financial institutions. Certain penalties apply for failure to furnish correct
information and for failure to include the reportable payments in income. Each
stockholder should consult with such stockholder's own tax advisor as to such
stockholder's qualifications for exemption from withholding and the procedure
for obtaining such exemption.
Possible Exchanges of Shares for United/Harvey Shares. In the event
that, following the consummation of the Offer, the Merger Agreement is amended
to provide for the Cash/Stock Option (see "Introduction -- The Offer"), the
Merger and the other transactions pursuant to which the Company and Harvey
Hotels will become wholly owned subsidiaries of United/Harvey are expected to
be structured to include holders of Shares who elect to exchange their Shares
for United/Harvey Shares in the Merger as participants, together with Purchaser
and the holders of equity interests in Harvey Hotels, in an overall plan
designed to qualify as a non-recognition transaction under Section 351 of the
Code. Assuming that such transactions are so structured and that the
requirements for such qualification are satisfied, holders of Shares who
exchange their Shares for United/Harvey Shares pursuant to the Merger will not
recognize any gain or loss on such exchange for federal income tax purposes.
Conversions of Shares for cash in the Merger will be treated as discussed in "
- -- Receipt of Cash in the Offer or the Merger."
6. PRICE RANGE OF SHARES; DIVIDENDS AND DISTRIBUTIONS
The Shares are listed and traded on the New York Stock Exchange
("NYSE") under the symbol "UI." The Company has not paid a cash dividend on
Shares during the two most recent fiscal years, and certain of the Company's
debt instruments contain covenants that limit the Company's ability to pay
dividends on Shares. The following table sets forth, for the periods
indicated, the reported high and low sale prices for the Shares on the NYSE
Composite Tape as reported in the Company's Annual Report on Form 10-K for its
fiscal year ended September 30, 1993 (the "Company's 1993 Form 10-K") or in
published financial sources.
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<PAGE> 11
<TABLE>
<CAPTION>
High Low
------ -----
<S> <C> <C>
FISCAL 1993 (ENDING SEPTEMBER 30, 1993)
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . 2 3/8 1 1/2
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . 5 2 3/8
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . 4 3/8 3 5/8
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . 6 3/4 3 5/8
FISCAL 1994 (ENDING SEPTEMBER 30, 1994)
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . 9 1/4 5 1/2
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . 14 1/2 7 1/2
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . 14 1/4 8 7/8
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . 18 12
FISCAL 1995 (ENDING SEPTEMBER 30, 1995)
First Quarter (through November 18, 1994) . . . . . . . . . . . 24 7/8 14 1/2
</TABLE>
On November 11, 1994, the last full trading day prior to the
announcement of the execution of the Merger Agreement, the reported closing
price on the NYSE Composite Tape for the Shares was $19 1/4 per Share. On
November 18, 1994, the last full trading day prior to the commencement of the
Offer, the reported closing price on the NYSE Composite Tape for the Shares was
$24 3/4 per Share. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION
FOR THE SHARES.
7. EFFECT OF THE OFFER ON THE MARKET FOR SHARES; EXCHANGE ACT REGISTRATION;
MARGIN REGULATIONS
General. The following discussion addresses certain possible effects
of the Offer and the Merger on the market for Shares, the registered status of
Shares under the Exchange Act and the status of Shares as "margin securities."
Shares will remain outstanding during the period between the consummation of
the Offer and the consummation of the Merger. However, no Shares will remain
outstanding after the consummation of the Merger.
If, following the consummation of the Offer, the Merger Agreement is
amended to provide for the Cash/Stock Option (see "Introduction -- The Offer"),
United/Harvey intends to seek to cause the United/Harvey Shares to be
registered under the Exchange Act and traded on one of the organized domestic
securities markets such as the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ"). The eligibility of the United/Harvey
Shares for such authorization or acceptance will be contingent upon the
satisfaction of criteria similar to those described below with respect to the
Shares, as to which there can be no assurance.
Market for Shares. According to the Company, there were approximately
1,225 stockholders of record as of November 10, 1994. The Company has informed
Purchaser that, as of November 14, 1994, (i) 2,665,899 Shares were issued and
outstanding and (ii) 39,000 Shares were subject to being issued upon the
exercise of outstanding options. The purchase of Shares pursuant to the Offer
will reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly, and could adversely affect the liquidity and market
value of the remaining Shares held by the public.
Depending upon the number of Shares purchased pursuant to the Offer,
the Shares may no longer meet the requirements of the NYSE for continued
listing. According to the NYSE's published guidelines, the NYSE would consider
delisting the Shares if, among other things, the number of record holders of at
least 100 Shares should fall below 1,200, the number of publicly held Shares
(exclusive of management or other concentrated holdings) should fall below
600,000 or the aggregate market value of publicly held Shares should not exceed
$5 million. If, as a result of the purchase of Shares pursuant to the Offer,
Shares no longer meet the requirements of the NYSE for continued listing and
the listing of the Shares is discontinued, the liquidity and market for the
Shares could be adversely affected.
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<PAGE> 12
If the NYSE were to delist the Shares, it is possible that the Shares
would continue to trade on other securities exchanges or in the
over-the-counter market and that price quotations would be reported by such
exchanges or through NASDAQ or other sources. The extent of the public market
for the Shares and the availability of such quotations would, however, depend
upon the number of stockholders remaining at such time, the interest in
maintaining a market in the Shares on the part of securities firms, the
possible termination of registration under the Exchange Act, as described
below, and other factors.
Exchange Act Registration. The Shares presently are registered under
the Exchange Act. The purchase of Shares pursuant to the Offer may result in
the Shares becoming eligible for deregistration under the Exchange Act.
Registration of the Shares may be terminated upon application by the Company to
the Commission at any time if such Shares are not listed on a national exchange
and there are fewer than 300 record holders of Shares. The termination of the
registration of the Shares under the Exchange Act would substantially reduce
the information required to be furnished by the Company to stockholders and the
Commission and would make certain of the provisions of the Exchange Act
(including the short-swing profit recovery provisions of Section 16(b), the
proxy statement and annual report requirements of Sections 14(a) and 14(c) and
the requirements of Rule 13e-3 with respect to going private transactions) no
longer applicable with respect to the Shares or to the Company. Furthermore,
the ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144
under the Securities Act may be impaired or eliminated. If registration of the
Shares under the Exchange Act were terminated, the Shares would no longer be
margin securities or eligible for stock exchange listing or NASDAQ reporting.
Purchaser believes that the purchase of the Shares pursuant to the
Offer may result in the Shares becoming eligible for deregistration under the
Exchange Act. Purchaser presently intends to seek to cause the Company to
terminate registration of the Shares under the Exchange Act as soon after the
consummation of the Offer as the requirements for such termination are met. If
the registration of the Shares under the Exchange Act is not terminated prior
to the consummation of the Merger, such registration will be terminated
following the consummation of the Merger.
Margin Regulations. The Shares are "margin securities," as that term
is defined under the rules of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), which designation has the effect, among
other things, of allowing brokers to extend credit on the collateral of such
Shares. Depending upon factors such as the number of record holders of the
Shares and the number and market value of publicly held Shares following the
purchase of Shares pursuant to the Offer, it is possible that the Shares might
no longer constitute margin securities for purposes of the Federal Reserve
Board's margin regulations and, therefore, could no longer be used as
collateral for margin loans made by brokers. Moreover, if the registration of
the Shares under the Exchange Act were terminated as described above, the
Shares would no longer constitute margin securities.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
General. The Company is a Delaware corporation with its principal
executive offices located at 5100 Poplar Avenue, Suite 2300, Memphis, Tennessee
38137. The Company owns and operates 25 hotels under the Holiday Inn, Holiday
Inn Express, Hampton Inns, Ramada, Days Inns and Howard Johnson flags. The
Company's hotels are located in Atlanta, Georgia (eight hotels), Dallas and
Houston, Texas (eight hotels), Jackson, Mississippi (four hotels), Colorado
Springs, Colorado (two hotels), Scottsdale and Flagstaff, Arizona (two hotels),
and Santa Barbara, California (one hotel). In addition, the Company owns 11
non-hotel properties, consisting principally of small parcels of land.
Summary Historical Financial Information of the Company. Certain
summary historical consolidated financial information with respect to the
Company is set forth below. Such financial information is derived from the
Company's 1993 Form 10-K and the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1994. More comprehensive financial information is
included in such reports and other documents filed by the Company with the
Commission, and the following summary financial information is qualified in its
entirety by reference to such reports and other documents and all of the
financial information (including any related
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<PAGE> 13
notes) contained therein. Such reports and other documents should be available
for inspection and copies thereof should be obtainable in the manner set forth
below under "Available Information."
UNITED INNS, INC.
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
June 30, September 30,
-------------------------- -----------------------------
1994 1993 1993 1992
----------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
Income Statement Data:
Total revenues . . . . . . . . . . . . . 67,792 68,683 92,923 $ 99,161
Income from operations . . . . . . . . . 6,454 4,090 7,503 4,846
Extraordinary gain . . . . . . . . . . . 0 0 0 1,907
Net income (loss) . . . . . . . . . . . (4,946) (1,410) (816) (3,044)
Net income (loss) per share . . . . . . (1.87) (0.53) (0.31) (1.15)
</TABLE>
<TABLE>
<CAPTION>
At September 30,
-----------------------------
At June 30, 1994 1993 1992
-------------------------- ------------- --------------
<S> <C> <C> <C>
Balance Sheet Data:
Current assets . . . . . . . . . . . . . $ 27,551 $ 15,817 $ 16,412
Total assets . . . . . . . . . . . . . . 137,532 146,733 152,517
Current liabilities . . . . . . . . . . . 24,814 16,948 19,511
Long-term debt . . . . . . . . . . . . . 91,691 101,165 101,603
Total liabilities . . . . . . . . . . . . 121,508 125,763 130,731
Stockholders' equity . . . . . . . . . . 16,024 20,970 21,786
</TABLE>
Available Information. The Company is subject to the information and
reporting requirements of the Exchange Act. In accordance therewith the
Company is required to file reports and other information with the Commission
relating to its business, financial statements and other matters. Information
as of particular dates concerning the company's directors and officers, their
remuneration, the principal holders of the company's securities and any
material interests of such persons in transactions with the Company and other
matters is required to be disclosed in proxy statements distributed to the
Company's stockholders and filed with the Commission. These reports and other
information may be inspected at the public reference facilities maintained by
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 and also should be available for inspection and copying at the registered
offices of the Commission located at Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60611 and 7 World Trade Center, New York, New York 10048.
Copies of such material may be obtained by mail, upon payment of the
Commission's prescribed fees, from the Commission's principal office at 450
Fifth Street, N.W., Washington, D.C. 20549.
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been furnished to Purchaser by the
Company or taken from or based upon publicly available documents on file with
the Commission and other publicly available information. Although Purchaser
has no knowledge that any such information is untrue, Purchaser accepts no
responsibility for the accuracy or completeness of such information or for any
failure by the Company to disclose events that may have occurred and may affect
the significance or accuracy of any such information.
-11-
<PAGE> 14
9. CERTAIN INFORMATION CONCERNING PURCHASER, UNITED HARVEY AND MERGER SUB
Purchaser is a Delaware limited partnership with its principal
executive offices at 4200 Texas Commerce Tower West, 2200 Ross Avenue, Dallas,
Texas 75201. The principal business of Purchaser is to make equity investments
in the Company and other similar hotel-oriented entities. Since its formation,
Purchaser has not engaged in any activities unrelated to the Offer and the
Combination Transactions (as defined in Section 12). As of the date of this
Offer to Purchase, Purchaser owned no Shares. Purchaser was formed by The
Hampstead Group, Inc., the principal business of which is making and managing
real estate and healthcare related investments.
Schedule I hereto sets forth the following information with respect to
certain persons related to Purchaser: (i) name; (ii) business address; (iii)
present principal occupation or employment and the name, principal business
address of any corporation or other organization in which such employment or
occupation is conducted; (iv) material occupations, positions, offices or
employments during the last five years, giving the starting and ending dates of
each and the name, principal business and address of any business corporation
or other organization in which such occupation, position, office or employment
was carried on; and (v) place of citizenship.
Each of United/Harvey and Merger Sub is a Delaware corporation with
principal executive offices at 4200 Texas Commerce Tower West, 2200 Ross
Avenue, Dallas, Texas 75201. United/Harvey is a wholly owned subsidiary of
Purchaser, and Merger Sub is a wholly owned subsidiary of United/Harvey.
United/Harvey was formed to act as a holding company for the Company and Harvey
Hotels following the consummation of the Offer and the Combination
Transactions, and Merger Sub was formed to effect the Merger. Since their
formation, neither United/Harvey nor Merger Sub has engaged in any activities
unrelated to the Offer and the Combination Transactions.
10. SOURCES AND AMOUNT OF FUNDS
Assuming that all Shares are validly tendered and not withdrawn, the
maximum amount of funds required to purchase Shares pursuant to the Offer and
to pay related fees and expenses is estimated to be $68.0 million. Purchaser
will obtain these funds from capital contributions of its partners, pursuant to
funding commitments of such partners (a portion of which may be funded pursuant
to a standby credit facility provided by Bankers Trust Company and certain
other participating lenders to an affiliate of Purchaser providing for advances
of up to $125.0 million to effect acquisitions or investments). None of
Purchaser, United/Harvey and Merger Sub presently intends to incur substantial
borrowings to fund the purchase of Shares pursuant to the Offer.
The Company is required under the Merger Agreement to pay or reimburse
Purchaser for all reasonable documented fees, costs and expenses incurred in
connection with the Offer and the Merger, provided that, except as described in
the next following sentence, each party has agreed to pay its own fees, costs
and expenses in the event the Offer is not consummated. In certain
circumstances, the Company is required under the Merger Agreement to pay or
reimburse all reasonable documented fees, costs and expenses in an amount not
to exceed $1,000,000 incurred by Purchaser and its affiliates in connection
with the Offer in the event that the Offer is not consummated. See Sections 12
and 16.
11. PAST CONTACTS AND NEGOTIATIONS
The Offer represents the culmination of an effort formally commenced
by the Company in July 1994 to consider possible transactions intended to
maximize value for stockholders of the Company, including but not limited to a
business combination or recapitalization involving the Company. After
retaining Smith Barney in July 1994 to act as the Company's financial advisor
in connection with such effort, more than 100 persons or entities, including
representatives of an affiliate of Purchaser, were contacted on a confidential
basis to determine whether they would be interested in considering such a
transaction involving the Company. Following such initial contact, the Company
and an affiliate of Purchaser entered into a confidentiality agreement (the
"Confidentiality
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<PAGE> 15
Agreement") relating to certain information furnished to such affiliate of
Purchaser by or on behalf of the Company.
In accordance with procedures established by the Company, on September
1, 1994, representatives of an affiliate of Purchaser submitted a nonbinding
indication of interest stating that they would be interested in pursuing a
possible transaction in which stockholders of the Company would be offered
$16.00 per Share in cash plus a right to share in the proceeds from the sale of
certain of the Company's properties. On October 20, 1994, representatives of
an affiliate of Purchaser submitted a proposal on substantially the terms set
forth in the September 1, 1994 indication of interest. On October 31, 1994,
following further discussions with representatives of the Company,
representatives of an affiliate of Purchaser increased the consideration
proposed to be paid to the Company's stockholders to $23.01 per Share in cash,
subject to reduction based on certain contingencies, and eliminated the sale
proceeds participation right referred to in the September 1, 1994 indication of
interest and provided for in the October 20, 1994 proposal. In response to a
request that Purchaser (and, representatives of Purchaser were informed, any
other potential bidder) submit its best and final offer, on November 4, 1994
Purchaser amended the October 31, 1994 proposal to increase the cash price to
be paid to $25.00 per Share in cash and to eliminate certain contingencies
pursuant to which the price could be reduced. Each of the proposals made by or
on behalf of Purchaser provided that the Company's stockholders would be given
the opportunity to receive either cash consideration or shares of common stock
in a new enterprise proposed to be formed by the combination of the Company and
Harvey Hotels.
On November 4, 1994, the Company publicly announced that it was
entering into exclusive negotiations relating to the possible sale of the
Company. On such date, the Company and Purchaser entered into an agreement
providing, on the terms and subject to the conditions set forth therein, that
the Company would negotiate exclusively with Purchaser and Harvey Hotels during
the period prior to January 31, 1995, would indemnify Purchaser and Harvey
Hotels for liabilities arising out of litigation based upon facts relating to
such negotiations and, under certain circumstances, would reimburse Purchaser
and Harvey Hotels for their expenses (not to exceed $500,000) and pay to them a
termination fee of $500,000 (increasing to $1,000,000 and then $1,500,000 at
specified dates). Following further negotiations, on November 14, 1994 the
Company and Purchaser entered into the Merger Agreement.
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY
Purpose of the Offer and the Merger. The purpose of the Offer is to
enable Purchaser to acquire a controlling equity interest in the Company and to
facilitate the Merger and the other transactions pursuant to which the Company
and Harvey Hotels will become wholly owned subsidiaries of the Company
(collectively, the "Combination Transactions"). The companies constituting
Harvey Hotels are independent, privately held companies which own and operate
eight hotels (six in the Dallas, Texas area and two in Houston, Texas), and
operate pursuant to management contracts two additional hotels (one in each of
Dallas, Texas and Wichita, Kansas). Additional information concerning the
Combination Transactions is set forth below.
Under the DGCL, the approval of the Company's Board of Directors and,
under certain circumstances, the affirmative vote or consent of the holders of
a majority of the outstanding Shares is required to approve and adopt the
Merger Agreement and the transactions contemplated thereby, including the
Merger. The Board of Directors of the Company has unanimously approved the
Merger Agreement in its present form and the transactions contemplated thereby.
The only remaining corporate action of the Company required in connection with
the Merger Agreement in its present form is the adoption of the Merger
Agreement by the affirmative vote or consent of the holders of a majority of
the Shares. If the Minimum Tender Condition is satisfied and Purchaser
purchases Shares pursuant to the Offer, Purchaser will be able to effect the
adoption of the Merger Agreement (whether in its present form or as it may be
amended to provide for the Cash/Stock Option) either at a meeting of the
Company's stockholders or pursuant to a written consent in lieu of such a
meeting, without the affirmative vote or consent of any other stockholder of
the Company.
Plans for the Company. Purchaser believes that the business of the
Company can be operated more efficiently and effectively on a combined basis
with the business of Harvey Hotels than separately. In this regard, Purchaser
believes that the combination of such businesses will create and enhance
economies of scale and
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<PAGE> 16
synergies that, in conjunction with the selective utilization of the best
practices and personnel from the companies' two organizations, will result in a
lower overall cost structure and enable United/Harvey to offer better value to
its customers than the Company could offer separately. Accordingly, Purchaser
intends to seek to consummate the Merger and the other Combination Transactions
as promptly as practical after the consummation of the Offer, subject to
compliance with applicable legal and regulatory requirements.
See "Introduction -- The Offer" for a discussion of the possible
Cash/Stock Option. As discussed therein, there can be no assurance as to
whether the Cash/Stock Option will be made available to nontendering
stockholders or, if so, as to the possible timing thereof.
THE MERGER AGREEMENT
The following is a summary of the material terms of the Merger
Agreement. This summary is not a complete description of the terms and
conditions thereof and is qualified in its entirety by reference to the full
text thereof, which is incorporated herein by reference and a copy of which has
been filed with the Commission as an exhibit to Purchaser's Tender Offer
Statement on Schedule 14D-1 (the "Schedule 14D-1") filed with the Commission in
connection with the Offer. The Merger Agreement may be examined, and copies
thereof may be obtained, in the manner described in Section 17.
The Offer. The Merger Agreement provides for the commencement by
Purchaser of the Offer. Pursuant to the Merger Agreement, Purchaser has
expressly reserved the right to (i) waive any condition of the Offer, (ii)
increase the Offer Price, or (iii) make any other changes in the terms and
condition of the Offer, but has agreed not to (a) decrease the Offer Price
(except for decreases, if any, to reflect the difference, if any, between
2,704,899 Shares (see Section 7) and the number of Shares outstanding as of the
Expiration Date, calculated on a fully diluted basis), (b) reduce the maximum
number of Shares sought to be purchased pursuant to the Offer, (c) change the
form of consideration to be paid pursuant to the Offer, or (d) impose
additional conditions to the Offer. In addition, Purchaser has agreed not to
extend the expiration date of the Offer, except (1) in the event that any
condition to the Offer is not satisfied on the initial expiration date of the
Offer, (2) as may be required by law, or (3) with the Company's written
permission.
Board Representation. The Merger Agreement provides that, upon
Purchaser's acquisition of a majority of the outstanding Shares pursuant to the
Offer (the "Share Acquisition"), Purchaser will be entitled, subject to
compliance with applicable law, to designate up to that number of members
(rounded up to the nearest whole number) of the Company's Board of Directors as
will make the percentage of the members designated by Purchaser equal to the
percentage of outstanding Shares held by Purchaser and its affiliates, and the
Company has agreed that it will increase the size of the Company's Board of
Directors and/or use its reasonable efforts to secure the resignation of such
number of directors as is necessary to enable Purchaser's designees to be so
elected effective immediately upon the Share Acquisition. In connection with
the foregoing, the Company has represented to Purchaser, that (i) the Company's
Board of Directors has taken written action to (a) increase the number of
directors of the Company from six to nine, such increase to be effective
immediately prior to the Share Acquisition, (b) elect Messrs. J. Peter Kline,
Donald J. McNamara and Robert A. Whitman (collectively, the "Purchaser
Designees"), as designees of Purchaser, to fill the vacancies created by such
increase, with such elections to be effective immediately upon the Share
Acquisition, and (c) accept the written resignation as a director of the
Company of each of the existing members of the Board of Directors of the
Company, such resignations being effective immediately upon the Share
Acquisition, and (ii) such action will be in effect immediately prior to the
Share Acquisition. If any Purchaser Designee becomes unable or unwilling to
serve as a member of the Company's Board of Directors, it is contemplated that
an appropriate substitute will be elected to such Board in place of such
Purchaser Designee.
The Merger Agreement provides that, from the date of the Merger
Agreement to the date on which the Purchaser Designees first become directors
of the Company as described above, the Company will notify Purchaser in advance
of every meeting of the Company's Board of Directors (or any committee thereof)
and will permit a representative of Purchaser to attend, as an observer, each
such meeting.
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<PAGE> 17
The Merger. The Merger Agreement provides that, on the terms and
subject to the conditions set forth in the Merger Agreement and the applicable
provisions of the DGCL, at the Effective Time Merger Sub will be merged with
and into the Company, with the Company, as the surviving corporation in the
Merger (the "Surviving Corporation") becoming a direct wholly owned subsidiary
of United/Harvey. Unless the Merger Agreement is amended to provide for the
Cash/Stock Option (see "Introduction -- The Offer"), at the Effective Time each
Share issued and outstanding immediately prior to the Effective Time (other
than Shares owned by United/Harvey, the Company or any subsidiary of the
Company and Shares owned by stockholders who have properly exercised their
appraisal rights under Delaware law) will be converted into the right to
receive an amount, in cash, equal to the Offer Price, without any interest
thereon, and each share of the capital stock of Merger Sub issued and
outstanding immediately prior to the Effective Time will be converted into and
become one fully paid and nonassessable share of common stock of the Surviving
Corporation. The Merger Agreement provides that the Merger will be consummated
as promptly as practicable after the satisfaction or waiver of the conditions
set forth in the Merger Agreement. The Merger will become effective at the
time of filing of a certificate of merger as required by the DGCL.
Stockholder Meeting. The Merger Agreement provides that, if required
following the consummation of the Offer, the Company will promptly take all
action necessary to duly call a meeting of its stockholders (the "Special
Meeting") to consider and vote upon the adoption of the Merger and the Merger
Agreement. Purchaser has agreed to cause all Shares then owned by Purchaser or
any affiliate thereof to be voted at the Special Meeting in favor of the
Merger. As noted above, if the Minimum Tender Condition is satisfied and
Purchaser purchases Shares pursuant to the Offer, Purchaser will be able to
effect the adoption of the Merger Agreement (whether in its present form or as
it may be amended to provide for the Cash/Stock Option), either at a meeting of
the Company's stockholders or pursuant to a written consent in lieu of such a
meeting, without the affirmative vote or consent of any other stockholder of
the Company.
Representations and Warranties. The Merger Agreement contains various
representations and warranties of the parties thereto. These include
representations and warranties by the Company with respect to corporate
existence and power, capital structure, authorization, conflicts, consents and
approvals, Commission filings, information supplied, absence of changes,
litigation, employee benefits, labor matters, taxes, environmental matters,
receipt of an opinion of a financial advisor and other matters. Purchaser,
United/Harvey and Merger Sub have also made certain representations and
warranties with respect to partnership and corporate existence and power,
partnership and corporate authorization, conflicts, consents and approvals,
information supplied, financial capacity and other matters.
Conduct of Business Pending the Merger. Pursuant to the Merger
Agreement, the Company has agreed that, between the date of the Merger
Agreement and the Effective Time, except as otherwise provided in the Merger
Agreement or unless Purchaser otherwise agrees in writing, the businesses of
the Company and its subsidiaries will be conducted only in, and the Company and
its subsidiaries will not take any action except in, the ordinary course of
business consistent with past practices. The Company has further agreed that
it will (i) use its reasonable best efforts to (a) preserve substantially
intact the business organization of the Company and its subsidiaries, (b) keep
available the services of the present officers, employees and consultants of
the Company and its subsidiaries, and (c) preserve the present relationships of
the Company and its subsidiaries with customers, suppliers and other persons
with which the Company or any of its subsidiaries has significant business
relations, (ii) continue in full force and effect without material modification
all existing policies or binders of insurance currently maintained in respect
of the Company and each of its subsidiaries and their respective assets, and
(iii) pay, and cause each of its subsidiaries to pay, its indebtedness and
otherwise discharge its liabilities punctually when and as the same become due
and payable and perform and observe, and cause each of its subsidiaries to
perform and observe, its duties and obligations under its material contracts.
The Company has agreed that, except as expressly contemplated by the
Merger Agreement, neither the Company nor any of its subsidiaries will, between
the date of the Merger Agreement and the Effective Time, directly or
indirectly, do, or propose to do, any of the following without the prior
written consent of Purchaser: (i) amend or otherwise change its Certificate of
Incorporation or By-Laws or equivalent organizational documents; (ii) issue,
sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge,
disposition or encumbrance of, (a) any shares of capital stock of any class, or
any options, warrants, convertible securities
-15-
<PAGE> 18
or other rights of any kind to acquire any shares of capital stock, or any
other ownership interests, of the Company or any of its subsidiaries, (except
for the issuance of shares pursuant to certain options and other arrangements
previously disclosed to Purchaser) or (b) any assets of the Company or any of
its subsidiaries (except for the sale of non-material assets in the ordinary
course of business consistent with past practices); (iii) declare, set aside,
make or pay any dividend or other distribution, payable in cash, stock,
property or otherwise, with respect to any of its capital stock; (iv)
reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire,
directly or indirectly, any of its capital stock; (v) (a) acquire (by merger,
consolidation or acquisition of stock or assets) any corporation, partnership
or other business organization or division thereof, (b) incur any indebtedness
or issue any debt securities or assume, guarantee or endorse or otherwise as an
accommodation or become responsible for, the obligations of any person, or make
any loans or advances, (c) enter into any contract or agreement (except for
certain specified contracts and agreements and except for those non-material
contracts and agreements entered into in the ordinary course of business
consistent with past practices), (d) authorize new capital expenditures (other
than expenditures incurred in the ordinary course of business consistent with
past practices or as required by the direction or acts of a franchisor and
expenditures required by governmental direction), or (e) amend any contract,
agreement, commitment or arrangement (other than certain specified contracts
and agreements) with respect to any of the foregoing matters; (vi) increase the
compensation payable or to become payable to, or grant or pay any severance or
termination pay to, the officers or employees of the Company or its
subsidiaries (except as may be necessary to comply with applicable law, except
for increases in salary or wages of employees of the Company or its
subsidiaries in accordance with existing policies or past practice, and except
pursuant to the terms of contracts, policies or benefit arrangements in effect
on the date of the Merger Agreement), enter into any employment or severance
agreement with, any director, officer or other employee of the Company or any
of its subsidiaries, or establish, adopt, enter into or amend any bonus, profit
sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, termination severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any of the
directors, officers or employees of the Company or any of its subsidiaries
(except as may be necessary to comply with applicable law); (vii) take any
action other than in the ordinary course of business consistent with past
practices (none of which actions shall be unreasonable or unusual) with respect
to accounting policies or procedures (including without limitation procedures
with respect to the payment of accounts payable and collection of accounts
receivable); (viii) make any tax election or settle or compromise any tax
liability; or (ix) pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction of the same in the ordinary course
of business consistent with past practices (including payment of the Company's
liabilities in accordance with their terms).
Access. Pursuant to the Merger Agreement, the Company has agreed
that, from the date of the Merger Agreement to the Effective Time, it will, and
will cause its subsidiaries, officers, directors, employees, auditors and
agents to, afford the officers, employees and agents of Purchaser reasonable
access to its officers, employees, agents, properties, offices, plants and
other facilities and to all books and records, and will furnish Purchaser with
all financial, operating and other data and information as Purchaser, through
its officers, employees or agents, may reasonably request. In this regard,
Purchaser has agreed to comply with the terms of the Confidentiality Agreement,
which provides generally that confidential information furnished by or on
behalf of the Company will be used solely for the purpose of evaluating a
possible investment in the Company and that the recipient of such information
will take appropriate measures to safeguard the confidentiality thereof.
No Solicitation. In the Merger Agreement, the Company has represented
that, on November 4, 1994, it ceased and caused to be terminated any existing
negotiations, or prior negotiations, with any person previously conducted, with
respect to a business combination with the Company or a change in control of
the Company (a "Change in Control Transaction"). In addition, the Company has
agreed that, from and after the execution and delivery of the Merger Agreement,
it will not, and will cause its affiliates and its or their representatives not
to, solicit any offers from any person in respect of, or, except as described
in the following paragraph, engage in any negotiations relating to or provide
any information in respect of, any Change of Control Transaction.
The Merger Agreement provides that if any person (other than a person
who participated in the process pursuant to which the Company selected
Purchaser to make the Offer and effect the Merger (a "Prior Person")) publicly
announces or notifies the Company in writing that it intends to commence a
tender or exchange offer to purchase Shares on financial and legal terms which
the Board of Directors of the Company determines, based
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<PAGE> 19
upon advice from the Company's independent financial and legal advisors, are
more favorable to the Company than those contemplated by the Merger Agreement
(an "Unsolicited Proposal"), the Company will notify Purchaser in writing of
such Unsolicited Proposal by 5:00 P.M., New York City time, on the business day
next following the business day on which the Company receives notice of the
Unsolicited Proposal. Any such notice given by the Company (a "Proposal
Notice") is required to state the terms and conditions of such Unsolicited
Proposal and the identity of the person making it (and to include a copy of
such Unsolicited Proposal). The Merger Agreement further provides that, if the
Board of Directors of the Company determines, based upon advice from the
Company's independent legal advisors, that its fiduciary duties under
applicable law require that the Company commence negotiations with respect to
such Unsolicited Proposal or furnish information in respect thereof, Purchaser
will have the option to terminate the Merger Agreement, whereupon Purchaser
will be entitled to its expenses and a termination fee as described under "--
Fees and Expenses" below. The Merger Agreement also provides that, in the
event that a Prior Person makes an Unsolicited Proposal, the Company will
deliver to the Purchaser a Proposal Notice with respect thereto, but will not
recommend any such Unsolicited Proposal to its stockholders.
Certain Other Agreements. Pursuant to the Merger Agreement, each of
the Company, Purchaser, United/Harvey and Merger Sub has agreed to use its
reasonable best efforts to take, or cause to be taken, all actions and to do,
or cause to be done, all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by the Merger Agreement and to obtain in a timely manner all
necessary waivers, consents and approvals and to effect all necessary
registrations and filings.
Purchaser and the Company have agreed to file, if necessary,
Notification and Report Forms under the HSR Act with the Federal Trade
Commission and the Antitrust Division of the Department of Justice and to use
their respective reasonable best efforts to respond as promptly as practicable
to all inquiries received from such agencies for additional information or
documentation. Subject to the expense reimbursement provisions described
below, Purchaser has agreed to pay all filing fees required to be paid in
connection with all such filings made by the parties under the HSR Act.
In addition to the foregoing, each of the Company, Purchaser,
United/Harvey and Merger Sub has agreed to use its reasonable best efforts to
obtain (or cause its subsidiaries to obtain) all authorizations, consents,
orders, licenses, permits and approvals of all governmental authorities and
officials and third parties that may be or become necessary for the performance
of its obligations pursuant to the Merger Agreement, and such parties have
agreed to cooperate fully with each other in promptly seeking to obtain all
such authorizations, consents, orders and approvals. The Company has agreed
that it will cause its subsidiaries to use all reasonable best efforts to give
such notices to third parties and use all reasonable best efforts to obtain
such third party consents, licenses or permits as Purchaser may reasonably deem
necessary or desirable in connection with the transactions contemplated by the
Merger Agreement.
Directors/Officers Indemnification and Insurance. The Merger
Agreement provides that the Company will, to the fullest extent permitted under
applicable law or under the Company's Certificate of Incorporation or By-Laws
or pursuant to Directors/Officers Indemnification Agreements previously entered
into and in effect on the date of the Merger Agreement and regardless of
whether the Merger becomes effective, indemnify and hold harmless, and after
the Effective Time, the Surviving Corporation will, to the fullest extent
permitted under applicable law or under the Surviving Corporation's Certificate
of Incorporation or By-Laws, indemnify and hold harmless, each present and
former director, officer, employee, fiduciary and agent of the Company or any
of its subsidiaries (collectively, the "Indemnified Persons") against any costs
or expenses (including attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and amounts paid in settlement in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to any action or
omission occurring prior to the Effective Time (including without limitation
any claim, action, suit, proceeding or investigation arising out of or
pertaining to the transactions contemplated by the Merger Agreement) for a
period of seven years after the date of the Merger Agreement. In addition, the
Merger Agreement provides that the indemnification provisions contained in the
Certificate of Incorporation and By-Laws of the Surviving Corporation to be in
effect immediately after the Effective Time will not be amended or otherwise
modified for a period of seven years following the Effective Time in any manner
that would
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adversely affect the rights thereunder of individuals who were directors,
officers, employees or agents of the Company at the date of the Merger
Agreement, unless such modification is required by law.
The Merger Agreement further provides that for five years from the
Effective Time, the Surviving Corporation will maintain in effect, if
available, directors' and officers' liability insurance substantially
comparable in scope and coverage to the Company's current directors' and
officers' liability insurance policy covering those persons who are presently
covered by such current policy to the extent that the cost thereof does not
exceed $177,840 per annum; provided, however, that in the event such cost would
exceed $177,840 per annum, the Surviving Corporation will obtain such coverage
of the nature described above as may be obtained through the expenditure of
such amount for each such year.
Benefit Plans. The Merger Agreement provides generally that the
Surviving Corporation will pay, in accordance with their terms as in effect on
the date of the Merger Agreement, all amounts which are or become due and
payable under the terms of all written employment, severance and termination
contracts, agreements, plans, policies and commitments of the Company and its
subsidiaries with or with respect to its current or former employees, officers
and directors as described in the Company's filings with the Commission or as
otherwise disclosed in writing to Purchaser on or prior to the date of the
Merger Agreement.
The Merger Agreement further provides that the Surviving Corporation
will maintain for a period of not less than one year after the Effective Time
employee plans of the Company in effect on the date of the Merger Agreement or
provide benefits to employees of the Surviving Corporation who were employees
of the Company and its subsidiaries immediately prior to the Effective Time
("United Employees") that are at least substantially comparable to the benefits
provided to similarly situated employees of the Surviving Corporation who are
not United Employees.
The Company has agreed to use its reasonable efforts to enter into
employment contracts, to be effective not later than the Effective Time, with
those persons identified by United/Harvey to the Company on or before December
1, 1994, provided that the Company's obligations under each such contract will
be conditioned upon the agreement of the employee party thereto to cancel any
severance or termination agreement between the Company and such employee in
effect on the date of the Merger Agreement.
Indemnification. Subject to the terms of the Merger Agreement, the
Company has agreed to indemnify and hold harmless each of Purchaser and its
affiliates (including without limitation United/Harvey and Merger Sub), and
their respective partners, officers, directors, employees, agents and
controlling persons (collectively, "Indemnified Parties"), from and against any
loss, damage or expense, including without limitation reasonable attorneys' and
accountants' fees (each such individual occurrence is hereinafter referred to
as a "Loss" and collectively, as "Losses") suffered by any Indemnified Party
(i) directly or indirectly, as a result of any action, suit, proceeding or
investigation which, in whole or in part, is based upon, relates to or results
from the Merger Agreement or any of the transactions contemplated thereby,
except to the extent that it is finally judicially determined by a court of
competent jurisdiction that the Loss in question resulted from a breach by
Purchaser of any of the representations, warranties or covenants of Purchaser
set forth in the Merger Agreement, or (ii) from and after the Effective time,
or, if applicable, the termination of the Merger Agreement, directly or
indirectly, as a result of any inaccuracy in or breach of any of the
representations, warranties or covenants of the Company set forth in the Merger
Agreement. Similarly, Purchaser, New Parent and Merger Sub have agreed, from
and after the Effective Time, or, if applicable, the termination of the Merger
Agreement, to indemnify and hold harmless the Company and its current and
future officers, directors, employees and agents from and against damage or
expense (including without limitation reasonable attorneys' and accountants'
fees) suffered by any of them as a result of any inaccuracy in or breach of any
of the representations, warranties or covenants made by Purchaser, New Parent
or Merger Sub under the Merger Agreement.
Conditions to the Merger. Under the Merger Agreement, the respective
obligations of each party to effect or cause to be effected the Merger are
subject to the satisfaction or waiver at or prior to the Effective Time of each
of the following conditions: (i) the Offer shall have been consummated; (ii)
the Merger Agreement shall have been adopted by the requisite vote of the
stockholders of the Company if required by applicable law; (iii) any waiting
period (and any extension thereof) applicable to the consummation of the Merger
under the
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<PAGE> 21
HSR Act shall have expired or been terminated; and (iv) no United States or
state governmental authority or other agency or commission or United States or
state court shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, writ, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and has the effect of making the
Merger or the Offer illegal or otherwise prohibiting consummation of the
transactions contemplated by the Merger Agreement. None of the obligations of
any party to effect or cause to be effected the Merger is conditioned upon the
consummation of the other Combination Transactions, which are described below
under the caption "The Combination Agreement."
Termination. The Merger Agreement may be terminated at any time prior
to the Effective Time: (i) by mutual consent of Purchaser, United/Harvey and
the boards of directors of Merger Sub and the Company; (ii) by either Purchaser
or the Company if (a) the Merger shall not have been consummated by March 31,
1995; provided, however, that such right to terminate the Merger Agreement
shall not effect a rescission of the purchase of the Shares pursuant to the
Offer and shall not be available to any party whose failure to fulfill any
obligation under the Merger Agreement has been the cause of, or resulted in,
the failure of the Merger to occur on or before such date, or (b) a court of
competent jurisdiction or governmental, regulatory or administrative agency or
commission shall have issued an order, decree or ruling or taken any other
action (which order, decree, ruling or other action the parties have agreed to
use their best efforts to vacate), in each case permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by the Merger
Agreement; (iii) by Purchaser if (a) due to an occurrence that would result in
a failure to satisfy any of the conditions of the Offer set forth in Section
14, and only in the event of such occurrence, Purchaser shall have (1)
terminated the Offer or (2) failed to pay for Shares pursuant to the Offer
within 180 days after the commencement of the Offer or (b) prior to the
purchase of Shares pursuant to the Offer, the Board shall have withdrawn or
modified in a manner adverse to Purchaser its approval or recommendation of the
Offer or the Merger or shall have recommended another offer or transaction;
(iv) by the Company if (a) due to an occurrence that would result in a failure
to satisfy any of the conditions of the Offer set forth in Section 14, and only
in the event of such occurrence, the Purchaser shall have (1) terminated the
Offer or (2) failed to pay for Shares pursuant to the Offer within 180 days
after commencement of the Offer or (b) prior to the purchase of Shares pursuant
to the Offer, the Board shall have withdrawn its recommendation to the
Company's stockholders to accept the Offer and shall have recommended another
offer or transaction (except that the Company may not recommend another offer
or transaction if such offer is made by or such transaction is to be with a
Prior Person and, accordingly, may not terminate the Merger Agreement under
such circumstances); or (v) by Purchaser as described under the caption "-- No
Solicitation" above. In the event of the termination of the Merger Agreement
as described the Merger Agreement will forthwith become null and void and there
shall be no liability on the part of any party thereto except that the
provisions thereof described under the caption "-- Indemnification" above and
under the caption "-- Fees and Expenses" below will remain in full force and
effect and nothing will relieve any party from liability for any wilful breach
thereof.
Fees and Expenses. The Merger Agreement provides that all reasonable
out-of-pocket fees, costs and expenses incurred in connection with the Offer,
the Merger Agreement and the transactions contemplated thereby (including
without limitation fees paid by Purchaser in connection with filings under the
HSR Act) will be paid or reimbursed by the Company, provided that, except as
described in the following paragraph, each party will pay its own fees, costs
and expenses in the event that the Offer is not consummated.
Pursuant to the Merger Agreement, the Company will pay or reimburse to
Purchaser an amount equal to the sum of all reasonable documented fees
(including without limitation fees paid by Purchaser in connection with filings
under the HSR Act), costs and expenses in an amount not to exceed $1,000,000
incurred by Purchaser and its affiliates in connection with the Merger
Agreement and the transactions contemplated thereby subsequent to October 26,
1994, immediately upon the first to occur of: (i) prior to the acceptance for
payment of Shares pursuant to the Offer, the Board (a) having withdrawn or
modified in a manner adverse to Purchaser its approval or recommendation of the
Offer or (b) having recommended another offer or transaction; (ii) the Company
having (a) failed to perform or comply with in any material respect any
obligation or covenant required by the Merger Agreement to be performed or
complied with by it or (b) breached any representation or warranty of the
Company set forth in the Merger Agreement in any material respect (or with
respect to those representations and warranties qualified by material adverse
effect, in any respect); or (iii) if the Merger Agreement is terminated by
Purchaser as described under the caption "-- No Solicitation" above; provided
that no such payment
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<PAGE> 22
shall be made to Purchaser if Purchaser, United/Harvey or Merger Sub, as the
case may be, has (a) failed to perform or comply with in any material respect
any obligation or covenant required by the Merger Agreement to be performed or
complied with by it or (b) breached any representation or warranty of it set
forth in the Merger Agreement in any material respect (or with respect to those
representations and warranties qualified by material adverse effect, in any
respect). The Merger Agreement further provides that the Company will pay to
Purchaser immediately upon termination of the Merger Agreement by Purchaser as
described in clause (iii) (b) of the paragraph under the caption "--
Termination" above, by the Company as described in clause (iv) (b) of the
paragraph under "-- Termination" above or by Purchaser as described under the
caption "-- No Solicitation" above, an amount equal to $1,000,000 if such
termination occurs on or before November 30, 1994, and an amount equal to
$1,500,000 if such termination occurs after November 30, 1994. The parties
have agreed that any amount to be paid as described in this paragraph will be
the exclusive remedy of Purchaser in connection with any such termination.
Amendment. The Merger Agreement may be amended at any time, but only
by action taken by Purchaser, United/Harvey and the boards of directors of the
Company and Merger Sub and by the stockholders of the Company (if required by
applicable law).
Guaranty of Performance. Pursuant to the Merger Agreement,
United/Harvey, Merger Sub and The Hampstead Group, Inc. have jointly and
severally (i) represented and warranted to the Company that the representations
and warranties of Purchaser set forth in the Merger Agreement are true and
correct in all material respects and (ii) agreed to cause Purchaser to perform
and comply in all material respects with the obligations and covenants required
by the Merger Agreement to be performed or complied with by it. The provisions
of the Merger Agreement described in the immediately preceding sentence will
terminate at the Effective Time and thereupon become null and void.
Delaware Law. The Board of Directors of the Company has approved the
acquisition by Purchaser or any affiliate thereof of Shares pursuant to the
Offer with the result that the restrictions of Section 203 of the DGCL will not
apply to any subsequent transaction between the Company and Purchaser or any
affiliate thereof. Section 203 of the DGCL prevents an "interested
stockholder" (generally, a stockholder owning 15% or more of a corporation's
outstanding voting stock or an affiliate or associate thereof) from engaging in
a "business combination" (defined to include a merger and certain other
transactions) with a Delaware corporation for a period of three years following
the date on which such stockholder became an interested stockholder unless (i)
prior to such date, the corporation's board of directors approved either the
business combination or the transaction which resulted in such stockholder
becoming an interested stockholder, (ii) upon consummation of the transaction
which resulted in such stockholder becoming an interested stockholder, the
interested stockholder owned at least 85% of the corporation's voting stock
outstanding at the time the transaction commenced (excluding shares owned by
certain employee stock plans and persons who are directors and also officers of
the corporation), or (iii) on or subsequent to such date the business
combination is approved by the corporation's board of directors and authorized
at an annual or special meeting of stockholders by the affirmative vote of the
holders of at least two-thirds of the outstanding voting stock not owned by the
interested stockholder.
THE COMBINATION AGREEMENT
Concurrently with the execution and delivery of the Merger Agreement,
Purchaser, United/Harvey and Merger Sub entered into a Combination Agreement
(the "Combination Agreement") with Harvey Hotel Company, Ltd. ("HHC"), Harvey
Hotel Management Corporation ("HHMC" and, together with HHC, "Harvey Hotels"),
and the holders of equity interests in Harvey Hotels (the "Harvey Equity
Holders"). The following is a summary of the material terms of the Combination
Agreement. This summary is not a complete description of the terms and
conditions thereof and is qualified in its entirety by reference to the full
text thereof, which is incorporated herein by reference and a copy of which has
been filed with the Commission as an exhibit to the Schedule 14D-1. The
Combination Agreement may be examined, and copies thereof may be obtained, in
the manner described in Section 17.
Contributions by Purchaser. The Combination Agreement provides that,
on the date of the consummation (the "Closing") of the Combination Transactions
(the "Closing Date"), Purchaser will (i) contribute
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each Share then owned by it to United/Harvey in exchange for one United/Harvey
Share and (ii) contribute to United/Harvey cash in an amount equal to the
aggregate amount required to be paid by United/Harvey as described below in the
first two paragraphs under the caption "Contribution by Harvey Equity Holders"
(the "Huie Family Cash Amount") in exchange for a number of United/Harvey
Shares equal to the quotient that results from dividing (a) the Huie Family
Cash Amount by (b) the Offer Price.
Contributions by Harvey Equity Holders. The Combination Agreement
provides that, on the Closing Date, H.K. Huie, Jr. ("Huie") will contribute
the outstanding equity interests in Harvey Hotels owned by him (which will
constitute 50.6% of the then-outstanding partnership interests in HHC and 50.6%
of the then-outstanding shares of capital stock of HHMC) to United/Harvey in
exchange for (i) an amount in cash equal to the product of 25.3% and the Harvey
Equity Value and (ii) a number of United/Harvey Shares equal to the quotient
that results from dividing (a) the product of 25.3% and the Harvey Equity Value
by (b) the Offer Price. For purposes of the Combination Agreement, the term
"Harvey Equity Value" means the agreed upon value of the aggregate equity
interests in Harvey Hotels of $53,090,273, subject to adjustment as described
below.
The Combination Agreement further provides that, on the Closing Date,
each of Molly Ann Huie, Mindy Sue Huie and Melissa Huie Chenault (collectively,
the "Huie Daughters"), provided that she becomes a signatory to the Combination
Agreement, will contribute the outstanding equity interests in Harvey Hotels
owned by her (which in each case will constitute 1.0% of the then-outstanding
partnership interests in HHC and 1.0% of the then-outstanding shares of capital
stock of HHMC) to United/Harvey in exchange for, at her option, (i) an amount
in cash equal to the product of 1.0% and the Harvey Equity Value, (ii) a number
of United/Harvey Shares equal to the quotient that results from dividing (a)
the product of 1.0% and the Harvey Equity Value by (b) the Offer Price, or
(iii) a combination of such consideration (provided that the aggregate amount
of such consideration, with each United/Harvey Share being deemed to have a
value equal to the Offer Price, will not exceed 1.0% of the Harvey Equity
Value). Under the Combination Agreement, the failure by any of the Huie
Daughters to make an election will be deemed an election to receive solely
United/Harvey Shares.
Under the Combination Agreement, each Harvey Equity Holder (other than
Huie and the Huie Daughters) will contribute the equity interests in Harvey
Hotels owned by such Harvey Equity Holder (which in the aggregate will
constitute 46.4% of the then-outstanding partnership interests in HHC and 46.4%
of the then-outstanding capital stock of HHMC) to United/Harvey in exchange for
a number of United/Harvey Shares equal to the quotient that results from
dividing (i) the product of (a) the percentage of the total outstanding equity
interests in Harvey Hotels so contributed by such Harvey Equity Holder and (b)
the Harvey Equity Value by (ii) the Offer Price.
Possible Adjustments to Harvey Equity Value. The estimated Harvey
Equity Value of $53,090,273 is based upon the application of an agreed-upon
valuation methodology to certain unaudited financial information concerning
Harvey Hotels. SUCH VALUATION IS BASED UPON ARM'S-LENGTH NEGOTIATIONS AMONG
THE PARTIES TO THE COMBINATION AGREEMENT AND VARIOUS ASSUMPTIONS AND DOES NOT
PURPORT NECESSARILY TO REPRESENT THE INTRINSIC VALUE OF HARVEY HOTELS OR THE
AGGREGATE VALUE THAT HARVEY HOTELS WOULD CONTRIBUTE TO THE AGGREGATE VALUATION
OF UNITED/HARVEY IF UNITED/HARVEY SHARES WERE TRADED IN AN ORGANIZED SECURITIES
MARKET OR OTHERWISE.
The Combination Agreement provides that, as promptly as practicable
(and in no event later than December 10, 1994), Harvey Hotels will deliver to
Purchaser specified financial statements (the "Harvey Audited Financial
Statements"). Under the Combination Agreement, as promptly as practicable
after such delivery of the Harvey Audited Financial Statements, Purchaser and
Harvey Hotels, utilizing the same valuation methodology used in determining the
estimated Harvey Equity Value of $53,090,273, will recompute the Harvey Equity
Value based upon the financial information contained in the Harvey Audited
Financial Statements and will add thereto an amount (not to exceed $1.0
million) equal to the aggregate amount of documented capital expenditures made
by Harvey Hotels subsequent to September 30, 1994.
The Combination Agreement provides that, as promptly as practicable
after a specified date, Purchaser will notify Harvey Hotels as to whether
Purchaser has discovered any of certain specified matters ("Adjustment
Matters") which, in the aggregate, in Purchaser's good faith judgment, impair
the value of the equity interests in Harvey Hotels (relative to the Harvey
Equity Value computed as described above) by more than $500,000 (the
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"Adjustment Hurdle") and, if so, Purchaser's good faith estimate of the amount
of such excess (the "Adjustment Amount") over the Adjustment Hurdle. Under the
Combination Agreement, if the Adjustment Amount is equal to or less than
$1,000,000, the Harvey Equity Value determined as described above will be
reduced by an amount equal to the Adjustment Amount, and if the Adjustment
Amount is greater than $1,000,000, Harvey Hotels may elect either (i) to reduce
the Harvey Equity Value determined as described above by an amount equal to the
Adjustment Amount or (ii) to the extent that Adjustment Matters affect only a
particular property or properties, to transfer to a third party prior to the
Closing Date such property or properties (the "Transferable Properties") as, in
the aggregate, give rise to the smallest portion of the Adjustment Amount
necessary to reduce the Adjustment Amount to $1,000,000 or less (in which case
the Harvey Equity Value, as determined as described above and as reduced by the
sum of (a) the Adjustment Amount, as reduced in the manner described in this
clause (ii), and (b) the value of the Transferable Properties, determined in
accordance with the valuation methodology referred to above, will be the Harvey
Equity Value for all purposes).
Additional Contributions by Purchaser. The Combination Agreement
provides that, at the Effective Time, Purchaser will contribute cash to
United/Harvey in an amount equal to the Merger Cash Amount in exchange for a
number of United/Harvey Shares equal to the quotient that results from dividing
(i) the Merger Cash Amount by (ii) the Offer Price. For purposes of the
Combination Agreement, the term "Merger Cash Amount" means an amount equal to
the product of (i) the Offer Price and (ii) the number of Shares that are to be
converted into the right to receive cash in the Merger.
In addition, the Combination Agreement provides that, following the
Effective Time and on or before July 1, 1995, Purchaser will contribute to
United/Harvey $10,000,000 in cash in exchange for shares of 9% Cumulative
Convertible Preferred Stock, par value $0.01 per share, of United/Harvey
("United/Harvey Preferred Shares") having an aggregate liquidation preference
of $10,000,000 and such other preferences and rights to which Purchaser and
Harvey Hotels may mutually agree prior to the Closing Date.
Under the Combination Agreement, except as described below, the Board
of Directors of United/Harvey, from time to time, during the period commencing
at the Effective Time and ending on the third anniversary of the Effective
Time, may require Purchaser to contribute to United/Harvey one or more amounts
(which in any event must be at least $5,000,000 or an integral multiple of
$1,000,000 in excess of $5,000,000) in cash, not to exceed $20,000,000 in the
aggregate and, upon making any such contribution, Purchaser will receive in
exchange a number of United/Harvey Preferred Shares having an aggregate
liquidation preference equal to the amount of such contribution. The
provisions described in this paragraph will be of no force or effect if,
pursuant to the Merger, each Share outstanding immediately prior to the
Effective Time (other than Shares owned by United/Harvey, the Company or any
subsidiary of the Company and Shares owned by persons who have properly
exercised their appraisal rights under Delaware law) is converted into a right
to receive cash.
Working Capital Adjustments. The Combination Agreement provides that,
as promptly as practicable after the Closing Date, United/Harvey will prepare
and deliver to a designated representative (the "Representative") of the Harvey
Equity Holders a statement (the "WC Statement") setting forth the amount that
results from subtracting the current liabilities of Harvey Hotels as of the
Closing Date from the current assets of Harvey Hotels as of the Closing Date
(the "Closing Date WC Amount"). The Combination Agreement further provides
that (i) United/Harvey will pay to the Harvey Equity Holders an amount in cash
equal to the product of (a) the percentage of the total outstanding equity
interests in Harvey Hotels contributed by such Harvey Equity Holder to
United/Harvey as described above and (b) the amount, if any, by which the
Closing Date WC Amount exceeds zero, or (ii) each of the Harvey Equity Holders
will contribute to United/Harvey, without additional consideration therefor, an
amount in cash equal to the product of (a) the percentage of the total
outstanding equity interests in Harvey Hotels contributed by such Harvey Equity
Holder to United/Harvey as described above and (b) the amount, if any, by which
the Closing Date WC Amount is less than zero.
Stockholders' Agreement. The Combination Agreement contemplates that,
in connection with the consummation of the Combination Transactions, Purchaser
and the Harvey Equity Holders will enter into a stockholders' agreement
providing for, among other things, the reconstitution of the Board of Directors
of United/Harvey to consist of 10 persons (five of which shall be nominated by
Purchaser, three of which shall be nominated by the Harvey Equity Holders and
the remaining two of which shall be mutually satisfactory to such
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persons), restrictions on transfer of voting securities of United/Harvey and
related rights of first refusal and certain options to purchase and sell voting
securities of United/Harvey.
Conditions. The respective obligations of each party to effect or
cause to be effected the Combination Transactions will be subject to the
satisfaction or waiver at or prior to the Closing of each of the following
conditions: (i) any waiting period (and any extension thereof) applicable to
the consummation of the Combination Transactions under the HSR Act shall have
expired or been terminated and (ii) no United States or state governmental
authority or other agency or commission or United States or state court of
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, writ, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and has the effect of making the
Combination Transactions illegal or otherwise prohibiting consummation of the
Combination Transactions, and there shall exist no other legal restraint which
has such effect.
The obligations of Purchaser to effect or cause to be effected the
Combination Transactions will be further subject to the satisfaction or waiver
on or prior to the Closing Date of each of the following conditions: (i) Harvey
Hotels shall have received certain specified consents and approvals (including
the consents of certain of HHC's lenders); (ii) the representations and
warranties of Harvey Hotels and the Harvey Equity Holders contained in the
Combination Agreement shall have been true and correct when made and shall be
true and correct in all material respects (other than those qualified by
material adverse effect, which shall be true and correct in all respects) as of
the Closing Date other than such representations and warranties as are
expressly made as of another date, and the covenants and agreements contained
in this Agreement to be performed or complied with by Harvey Hotels and the
Harvey Equity Holders (other than such covenants and agreements that are
expressly contemplated hereby to be performed or complied with solely after the
Closing Date) shall have been complied with in all material respects as of the
Closing Date; and (iii) Purchaser shall have accepted Shares for purchase
pursuant to the Offer.
The obligations of Harvey Hotels and the Harvey Equity Holders to
effect or cause to be effected the Combination Transactions will be further
subject to the satisfaction or waiver on or prior to the Closing Date of each
of the following conditions: (i) each Harvey Equity Holder shall have been
released, effective as of the Closing Date, from any and all liability in
respect of any indebtedness of HHC, or HHC or United/Harvey shall have
delivered to each Harvey Equity Holder that shall not have been so released an
undertaking of HHC or United/Harvey to indemnify such Harvey Equity Holder from
any and all personal liability in respect of such indebtedness and (ii) the
representations and warranties of Purchaser, United/Harvey and Merger Sub
contained in the Combination Agreement shall have been true and correct when
made and shall be true and correct in all material respects (other than those
qualified by a material adverse effect, which shall be true and correct in all
respects) as of the Closing Date other than such representations and warranties
as are expressly made as of another date, and the covenants and agreements
contained in the Combination Agreement to be performed or complied with by
Purchaser, United/Harvey and Merger Sub (other than such covenants and
agreements that are expressly contemplated hereby to be performed or complied
with solely after the Closing Date) shall have been performed and complied with
in all material respects as of the Closing Date.
Termination. The Combination Agreement may be terminated: (i) by
mutual consent of Harvey Hotels and Purchaser at any time prior to the Closing
Date or (ii) by either Harvey Hotels or Purchaser if at any time prior to the
Closing Date a court of competent jurisdiction or governmental, regulatory or
administrative agency or commission shall have issued an order, decree or
ruling or taken any other action (which order, decree, ruling or other action
the parties have agreed to use their best efforts to vacate), in each case
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by the Combination Agreement.
AGREEMENT WITH SUBSTANTIAL STOCKHOLDER
The following is a summary of the material terms of the Cockroft
Agreement. This summary is not a complete description of the terms and
conditions thereof and is qualified in its entirety by reference to the full
text thereof which is incorporated herein by reference and a copy of which has
been filed with the Commission as an exhibit to the Schedule 14D-1. The
Cockroft Agreement may be examined, and copies thereof may be obtained, in the
manner described in Section 17.
Commitment by Purchaser. Pursuant to the Cockroft Agreement, Purchaser
agreed to provide that the Expiration Date will occur in January 1995,
subject to extension only as provided in the Merger Agreement, and further
agreed that, regardless of whether the Cash/Stock Option is made available,
Purchaser will, either pursuant to the Merger Agreement as presently in effect
or otherwise, subject to conditions no more favorable to Purchaser than those
contained in the Merger Agreement as presently in effect, provide nontendering
stockholders an opportunity following the consummation of the Offer to receive
cash in an amount at least equal to the Offer Price in exchange for each Share
not tendered pursuant to the Offer.
Tender of the Cockroft Shares. Pursuant to the Cockroft Agreement,
Cockroft has agreed to tender pursuant to the Offer and not withdraw all of the
Cockroft Shares.
Option to Purchase the Cockroft Shares. Pursuant to the Cockroft
Agreement, Cockroft has granted to Purchaser an irrevocable option (the
"Cockroft Option") to purchase all (but not less than all) of the Cockroft
Shares. The Cockroft Option is exercisable on or after January 1, 1995 and on
or prior to March 31, 1995, provided that one of the events referred to in
paragraph (d) or paragraph (e) of Section 14 has occured. The price per share
payable upon the exercise of the Cockroft Option is the greater of (i) the
Offer Price and (ii) the per share amount of any competing offer which gives
Purchaser the right to terminate the Merger Agreement in the manner described
in the second paragraph under the caption "The Merger Agreement -- No
Solicitation" above.
Other Matters. Pursuant to the Cockroft Agreement, Cockroft has
represented to Purchaser that Cockroft has good and valid title to all of the
Cockroft Shares and sole and unrestricted voting power and power of disposition
with respect thereto. In addition, Cockroft has agreed, prior to the expiration
of the Cockroft Option, not to, among other things, (i) sell or otherwise
dispose of or encumber any of the Cockroft Shares, (ii) grant any proxy with
respect to any of the Cockroft Shares (other than to Purchaser), or (iii)
exercise any voting or consent rights with respect to any of the Cockroft
Shares in a manner inconsistent with the intent and purposes of the Merger
Agreement or the Cockroft Agreement.
OTHER MATTERS
Appraisal Rights. No appraisal rights are available in connection
with the Offer. Except as described in the following paragraph, however,
nontendering holders of Shares will have certain rights under Section 262 of
the DGCL to dissent and demand appraisal of, and payment in cash for the fair
value of, their Shares in connection with the consummation of the Merger. Such
rights, if the statutory procedures are complied with, could lead to a judicial
determination of their value (excluding any element of value arising from
accomplishment
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<PAGE> 26
or expectation of the Merger) required to be paid in cash to such dissenting
holders for their Shares. Any such judicial determination of the fair value of
Shares could be based upon considerations other than or in addition to the
Offer Price and the market value of the Shares, including asset values and the
investment value of the Shares. The value so determined could be more or less
than the Offer Price. If any holder of Shares who demands appraisal under
Section 262 of the DGCL fails to perfect, or effectively withdraws or loses his
right to appraisal, as provided in the DGCL, the Shares of such holder will be
converted into the merger consideration in accordance with the Merger
Agreement. A stockholder may withdraw such stockholder's demand for appraisal
by delivery of a written withdrawal of such stockholder's demand for appraisal
and acceptance of the Merger. Failure to follow the steps required by Section
262 of the DGCL for perfecting appraisal rights may result in the loss of such
rights.
If the Merger Agreement is amended following the consummation of the
Offer (see "Introduction -- The Offer") to provide for the Cash/Stock Option,
nontendering holders of Shares may not have appraisal rights with respect to
their Shares in connection with the consummation of the Merger if certain
requirements are satisfied. Under the DGCL, no appraisal rights are available
for shares of stock which, at the record date fixed to determine the
stockholders entitled to act upon a merger agreement, are either (i) listed on
a national securities exchange or designated as a national market system
security on an inter-dealer quotation system by the National Association of
Securities Dealers, Inc. or (ii) held of record by more than 2,000
stockholders; provided appraisal rights will be available for shares of stock
if the holders thereof are required by the terms of the merger agreement to
accept for such Shares anything except (a) shares of stock of the corporation
surviving or resulting from such merger, (b) shares of stock of any other
corporation which at the effective time of the merger will be either listed on
a national securities exchange or designated as a national market system
security on a inter-dealer quotation system by the National Association of
Securities Dealers, Inc. or are held of record by more than 2,000 stockholders,
(c) cash in lieu of fractional shares of the corporations described in clauses
(a) and (b), or (d) any combination of the shares of stock and cash in lieu of
fractional shares described in clauses (a), (b) and (c).
"Going Private" Transactions. The Commission has adopted Rule 13e-3
under the Exchange Act which is applicable to certain "going private"
transactions and which may under certain circumstances be applicable to the
Merger. However, Rule 13e-3 would be inapplicable if (i) the Shares are
deregistered under the Exchange Act prior to the consummation of the Merger or
(ii) the Merger is consummated within one year after the purchase of the Shares
pursuant to the Offer and the amount paid per Share in the Merger or other
business combination is at least equal to the amount paid per Share in the
Offer. If applicable, Rule 13e-3 requires, among other things, that certain
financial information concerning the fairness of the proposed transaction and
the consideration offered to minority stockholders in such transaction be filed
with the Commission and disclosed to stockholders prior to the consummation of
the transaction.
13. DIVIDENDS AND DISTRIBUTIONS
If, on or after the date of the Merger Agreement, the Company should
(i) split, combine or otherwise change the Shares or its capitalization, (ii)
acquire presently outstanding Shares or otherwise cause a reduction in the
number of outstanding Shares, or (iii) issue or sell any shares of any class or
any securities convertible into any such shares, or any rights, warrants or
options to acquire any such shares or convertible securities (other than Shares
issued pursuant to, and in accordance with the terms in effect on the date of
the Merger Agreement, of, stock options disclosed to Purchaser in connection
therewith) then Purchaser, in its sole discretion, may make such adjustments in
the purchase price and other terms of the Offer as it deems appropriate.
If, on or after the date of the Merger Agreement, the Company should
declare or pay any cash or stock dividend or other distribution on, or issue
any rights with respect to, the Shares, payable or distributable to
stockholders of record on a date prior to the transfer to the name of Purchaser
or its nominees or transferees on the Company's stock transfer of the Shares
purchased pursuant to the Offer, then (i) the Offer Price may, in the sole
discretion of Purchaser, be reduced by the amount of any such cash dividend or
distribution, and (ii) any non-cash dividend, distribution or right to be
received by the tendering stockholders will (a) be received and held by the
tendering stockholders for the account of Purchaser and will be required to be
promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of Purchaser, accompanied by appropriate
documentation of transfer, or (b) at the direction of Purchaser, be exercised
for the benefit of
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<PAGE> 27
Purchaser, in which case the proceeds of such exercise will promptly be
remitted to Purchaser. Pending such remittance, Purchaser will be entitled to
all rights and privileges as owner of any such non-cash dividend, distribution
or right or such proceeds and may withhold the entire Offer Price or deduct
from the Offer Price the amount or value thereof, as determined by Purchaser in
its sole discretion.
Pursuant to the terms of the Merger Agreement, the Company is
prohibited from taking any of the actions described in the two preceding
paragraphs, and nothing herein shall constitute a waiver by Purchaser or
United/Harvey of any of its rights under the Merger Agreement or a limitation
of remedies available to Purchaser or United/Harvey for any breach of the
Merger Agreement, including termination thereof.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, Purchaser will not
be required to accept for payment, or to purchase or pay for any tendered
Shares, and Purchaser may terminate or amend the Offer and may postpone the
purchase of, and payment for, Shares if, (i) prior to the Expiration Date there
have not been validly tendered and not withdrawn at least that number of Shares
that, when taken as a whole with all other Shares owned or acquired by
Purchaser, would constitute at least a majority of the total number of
outstanding Shares on a fully diluted basis on the date of purchase, (ii) prior
to the time of payment for any such Shares, any waiting period (and any
extension thereof) applicable to the Offer under the HSR Act shall not have
expired or otherwise been terminated, or (iii) at any time on or after the date
hereof and prior to the time of payment for any such Shares:
(a) there shall have been threatened, instituted or pending
any action, proceeding, application or counterclaim by or before any
governmental, regulatory or administrative agency or authority,
domestic, foreign or transnational, which (1) seeks to restrain or
prohibit the making or consummation of the Offer or the consummation
of the Merger, (2) seeks to prohibit or restrict the ownership or
operation by Purchaser (or any of its affiliates or subsidiaries) of
any portion of its or the Company's business or assets which is
material to the business of all such entities taken as a whole, or to
compel Purchaser (or any of its affiliates or subsidiaries) to dispose
of or hold separate any portion of the Company's business or assets
which is material to the business of all such entities taken as a
whole, (3) seeks to impose material limitations on the ability of
Purchaser effectively to acquire or to hold or to exercise full rights
of ownership of the Shares, including without limitation the right to
vote the Shares purchased by Purchaser on all matters properly
presented to the stockholders of the Company, (4) seeks to impose any
limitations on the ability of Purchaser or any of its affiliates or
subsidiaries effectively to control in any material respect the
business and operations of the Company, or (5) would otherwise be
reasonably likely to have a material adverse effect on the business,
operations, property or condition (financial or otherwise) of the
Company and its subsidiaries, taken as a whole; or
(b) the representations and warranties of the Company set
forth in the Merger Agreement shall have been breached in any material
respect (or, with respect to those representations and warranties
qualified by material adverse effect, in any respect) or the Company
shall have failed to perform any obligation or covenant required by
the Merger Agreement to be performed or complied with by it in any
material respect; provided, however, that Purchaser will not have the
right to decline or accept for payment or purchase or pay for or
terminate or amend the Offer or postpone the purchase of or payment
for Shares as a result of a breach of the Company's representation
regarding the absence of certain litigation, except for a breach of
such representation when made; or
(c) there shall have occurred (1) any general suspension of,
or limitation on prices for, or trading in, securities on the NYSE,
(2) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (3) a commencement
of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States, (4) any
material limitation (whether or not mandatory) by a governmental
authority, or any other event that is reasonably likely to materially
adversely affect the extension of credit by banks or other financial
institutions, or (5) in the case of any of the foregoing existing at
the time of the commencement of the Offer, a material acceleration or
worsening thereof; or
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<PAGE> 28
(d) a tender or exchange offer for some portion of or all the
Shares shall have been publicly proposed to be made or shall have been
commenced at an all cash price per Share in excess of the Offer Price
(or at any other price if the Board of Directors of the Company does
not promptly announce publicly that it is recommending that the
Company's stockholders not tender into such offer) by another person
or Purchaser shall have otherwise learned that any person, entity or
"group" (within the meaning of Section 13(d)(3) of the Exchange Act)
shall have acquired or proposed to acquire, beneficial ownership of
more than 25% of the Shares, through the acquisition of stock, the
formation of a group or otherwise, or shall have been granted any
right, option or warrant, conditional or otherwise, to acquire
beneficial ownership of more than 25% of the Shares other than
acquisitions for bona fide arbitrage purposes only and other than by
persons, entities or groups that have publicly disclosed such
ownership in a Schedule 13D or 13G on file with the Commission on the
date of the Merger Agreement; or
(e) any other person or entity shall have commenced a proxy
or consent solicitation of the Company's stockholders to approve a
transaction other than transactions contemplated by the Merger
Agreement; or
(f) the Merger Agreement shall have been terminated in
accordance with its terms; or
(g) the Board of Directors of the Company shall not have
taken all necessary actions to fulfill the Company's obligations under
the Merger Agreement to reconstitute the Board of Directors of the
Company as provided therein immediately upon the Share Acquisition; or
(h) Purchaser and the Company shall have agreed that
Purchaser shall amend or terminate the Offer or postpone the payment
for Shares pursuant thereto.
The foregoing conditions are for the sole benefit of Purchaser. Such
conditions may be waived by Purchaser with the approval of the Board of
Directors of the Company. Any determination by Purchaser will be final and
binding upon all parties including tendering stockholders.
The failure by Purchaser at any time to exercise any of the foregoing
rights will not be deemed a waiver of any such right and each such right will
be deemed an ongoing right which may be asserted by Purchaser at any time and
from time to time. Any determination by Purchaser concerning the events
described above will be final and binding.
The Offer is not conditioned upon the consummation of the Merger or
any of the other Combination Transactions.
15. CERTAIN LEGAL MATTERS
General. Except as described in this Section 15, based on its review
of publicly available filings by the Company with the Commission and other
publicly available information regarding the Company, Purchaser is not aware of
any license or other regulatory permit which appears to be material to the
business of the Company and that might be adversely affected by Purchaser's
acquisition of Shares pursuant to the Offer or the Merger, any approval or
other action by any domestic or foreign governmental or administrative agency
that would be required prior to the acquisition of Shares by Purchaser pursuant
to the Offer or the Merger (as provided for in the Merger Agreement as
presently in effect) or any state takeover statute that is applicable to the
Offer or the Merger. Should any such approval or other action be required, or
any such state takeover statute be applicable, Purchaser presently intends that
such approval or action would be sought or compliance with such takeover
statute would be effected, as applicable. There can be no assurance that any
such approval, action or compliance, if needed, would be obtained or effected
or, if obtained or effected, would be obtained or effected without substantial
conditions or adverse consequences. If certain types of adverse action were
taken with respect to such matters, Purchaser could decline to accept for
payment or pay for any Shares tendered pursuant to the Offer. See Section 14.
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<PAGE> 29
State Takeover Laws. A number of states (including Delaware, where
the Company is incorporated) have adopted takeover laws and regulations which
purport, to varying degrees, to be applicable to attempts to acquire securities
of corporations which are incorporated in such states or which have substantial
assets, security holders, principal executive offices or principal places of
business therein. In 1982, the Supreme Court of the United States, in Edgar v.
Mite Corp., invalidated on constitutional grounds the Illinois Business
Takeovers Statute, which as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult, and the reasoning in
such decision is likely to apply to certain other state takeover statutes. In
1987, however, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court of
the United States held that the State of Indiana could, as a matter of
corporate law and, in particular, those aspects of corporate law concerning
corporate governance, constitutionally disqualify a potential acquiror from
voting on the affairs of a target corporation without the prior approval of the
remaining stockholders, provided that such laws were applicable only under
certain conditions.
Section 203 of the DGCL limits the ability of a Delaware corporation
to engage in business combinations with "interested stockholders" (defined as
any beneficial owner of 15% or more of the outstanding voting stock of the
corporation) unless, among other things, the corporation's board of directors
has given its prior approval to either the business combination or the
transaction which resulted in the stockholder becoming an "interested
stockholder." The Company has represented in the Merger Agreement that it
properly approved the acquisition of Shares by Purchaser or any affiliate
thereof pursuant to the Offer and the Merger for purposes of Section 203 of the
DGCL.
Based on its review of publicly available filings by the Company with
the Commission, other publicly available information regarding the Company and
the Company's representations in the Merger Agreement, Purchaser does not
believe that any state takeover statutes apply to the Offer or the Merger.
Purchaser has not currently complied with any state takeover statute or
regulation. Purchaser reserves the right to challenge the applicability or
validity of any state law purportedly applicable to the Offer or the Merger and
nothing in this Offer to Purchase or any action taken in connection with the
Offer or the Merger is intended as a waiver of such right. If it is asserted
that any state takeover statute is applicable to the Offer or the Merger and an
appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer or the Merger, Purchaser might be required to file certain
information with, or to receive approvals from, the relevant state authorities,
and Purchaser might be unable to accept for payment or pay for Shares tendered
pursuant to the Offer, or be delayed in consummating the Offer or the Merger.
In such case, Purchaser may not be obligated to accept for payment or pay for
any Shares tendered pursuant to the Offer.
Antitrust. The HSR Act provides that certain acquisition transactions
may not be consummated unless certain information has been furnished to the
Antitrust Division of the Department of Justice and the Federal Trade
Commission and certain waiting period requirements have been satisfied.
Purchaser has determined that the HSR Act is not applicable to the purchase of
Shares pursuant to the Offer.
16. FEES AND EXPENSES
Purchaser has retained American Stock Transfer & Trust Company to act
as the Depositary, and MacKenzie Partners, Inc. to act as the Information
Agent, in connection with the Offer. Each of the Depositary and the
Information Agent will receive reasonable and customary compensation for its
services, will be reimbursed for certain reasonable out-of-pocket expenses, and
will be indemnified against certain liabilities and expenses in connection
therewith, including certain liabilities under the federal securities laws.
Except as set forth above, Purchaser will not pay any fee or
commission to any broker, dealer or other person for soliciting tenders of
Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies will be reimbursed by Purchaser for customary mailing expenses
incurred by them in forwarding material to their customers.
The Company is required under the Merger Agreement to pay or reimburse
Purchaser for all reasonable documented fees, costs and expenses incurred in
connection with the Offer, provided that, except as described in the next
following sentence, each party has agreed to pay its own fees, costs and
expenses in the event the
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<PAGE> 30
Offer is not consummated. In certain circumstances, the Company is required
under the Merger Agreement to pay or reimburse all reasonable documented fees,
costs and expenses in an amount not to exceed $1,000,000 incurred by Purchaser
and its affiliates in connection with the Offer in the event that the Offer is
not consummated. See Section 12.
17. MISCELLANEOUS
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OTHER THAN AS CONTAINED IN THIS OFFER TO
PURCHASE OR THE RELATED LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR
ON BEHALF OF) HOLDERS OF SHARES RESIDING IN ANY JURISDICTION IN WHICH THE
MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH
THE SECURITIES, BLUE SKY OR OTHER LAWS OF SUCH JURISDICTION. However, the
Purchaser may, in its discretion, take such action as it may deem necessary to
make the Offer in any jurisdiction and extend the Offer to holders of Shares in
such jurisdiction. In any jurisdiction where the securities, blue sky or other
laws require the Offer to be made by a licensed broker or dealer, the Offer
will be deemed to be made on behalf of Purchaser by one or more registered
brokers or dealers that are licensed under the laws of such jurisdiction.
Certain of the information concerning the Company and its subsidiaries
contained in this Offer to Purchase has been taken from or based upon publicly
available documents and records on file with the Commission and other public
sources. Although Purchaser does not have any knowledge that would indicate
that any statements contained herein based on such documents and records are
untrue, neither Purchaser nor any of its affiliates accept any responsibility
for the accuracy or completeness of the information contained in such documents
and records, or for any failure by the Company to disclose events which may
have occurred or may affect the significance or accuracy of any such
information.
Certain additional information with respect to the Offer is contained
in the Schedule 14D-1, including the exhibits thereto, filed with the
Commission by Purchaser pursuant to Rule 14d-3 under the Exchange Act. The
Schedule 14D-1 and any amendments thereto, including exhibits, may be examined
and copies may be obtained at the same places and in the manner set forth in
Section 8 (except that they will not be available in the regional offices of
the Commission).
Questions and requests for assistance or for additional copies of this
Offer to Purchase and the Letter of Transmittal may be directed to MacKenzie
Partners, Inc., the Information Agent, at its address and telephone numbers set
forth on the back cover of this Offer to Purchase. Stockholders may also
contact their brokers, dealers, commercial banks, trust companies or nominees
for assistance concerning the Offer.
UNITED/HARVEY HOLDINGS, L.P.
November 21, 1994
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<PAGE> 31
SCHEDULE I
CERTAIN INFORMATION CONCERNING CONTROLLING PERSONS OF PURCHASER
The following sets forth information with respect to the general
partner of Purchaser and certain related persons:
Hampstead Genpar, L.P., a Delaware limited partnership ("Hampstead"),
is the general partner of Purchaser. The principal business of Hampstead is to
act as the sole general partner of Purchaser. HH Genpar Partners, a Texas
general partnership ("HH Genpar"), is, and its principal business is to act as,
the managing general partner of Hampstead (and various other partnerships).
Hampstead Associates, Inc., a Texas corporation ("Associates"), is, and its
principal business is to act as, the managing general partner of HH Genpar.
RAW Genpar, Inc., a Texas corporation ("RAW Genpar"), and InCap, Inc., a Texas
corporation ("InCap"), are the only other general partners of HH Genpar. The
principal business of each of RAW Genpar and InCap is to invest in HH Genpar.
The address of the principal executive office of Hampstead, HH Genpar,
Associates, RAW Genpar and InCap is 4200 Texas Commerce Tower West, 2200 Ross
Avenue, Dallas, Texas 75201.
The principal occupation of each of Donald J. McNamara, Robert A.
Whitman and Daniel A. Decker, each of whom is a United States citizen, is to be
employed by The Hampstead Group, Inc. ("HGI"): Mr. McNamara is the Chairman
and Co- Chief Executive Officer of HGI, Mr. Whitman is the President and
Co-Chief Executive Officer of HGI, and Mr. Decker is the Executive Vice
President and General Counsel of HGI. The principal business of HGI is making
and managing real estate and healthcare related investments. The business
address of HGI and of each such individuals is 4200 Texas Commerce Tower West,
2200 Ross Avenue, Dallas, Texas 75201.
Mr. McNamara is the sole owner, officer and director of Associates.
Mr. McNamara has been the Chairman and Co- Chief Executive Officer of HGI since
1992. From prior to 1989 until 1992, Mr. McNamara served as the President,
Chairman and Chief Executive Officer of HGI.
Mr. Whitman is the sole owner, officer and director of RAW Genpar.
Mr. Whitman has been the President and Co- Chief Executive Officer of HGI since
1992. From June 1993 until October 1994, Mr. Whitman served as President and
Chief Executive Officer of Forum Group, Inc., an owner and operator of
retirement communities, and Mr. Whitman has served as Chairman of the Board of
Forum Group, Inc. since June 1993. From prior to 1989 to 1992, Mr. Whitman
served as Managing Partner and Chief Executive Officer for Trammell Crow
Ventures, the real estate investment, banking and investment management unit of
the Trammell Crow Company, and was also Chief Financial Officer for Trammell
Crow Group and Trammell Crow Company from prior to 1989 to 1991.
Mr. Decker is the sole owner, officer and director of InCap. Mr.
Decker has been an Executive Vice President and General Counsel of HGI, since
1990. From prior to 1989 to 1990, Mr. Decker was a partner in the law firm of
Decker, Hardt, Kopf, Harr, Munsch & Dinan, P.C. Mr. Decker was of counsel to
such firm from 1990 to 1992.
<PAGE> 32
Manually signed facsimile copies of the Letter of Transmittal will be accepted.
The Letter of Transmittal and certificates for Shares and any other required
documents should be sent by each stockholder or his broker, dealer, commercial
bank, trust company, or nominee to the Depositary at the address set forth
below:
______________________________
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
____________________
By Mail, Hand or Overnight
Courier:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
By Facsimile Transmission:
(718) 234-5001
For Information or Confirmation by Telephone:
(718) 921-8200
______________________________
Any questions or requests for assistance or additional copies of this Offer to
Purchase and the Letter of Transmittal may be directed to the Information Agent
at the telephone numbers and address set forth below. You may also contact
your broker, dealer, commercial bank, trust company or nominee for assistance
concerning this Offer.
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
Call Toll Free (800) 322-2885
<PAGE> 1
EXHIBIT 99.(a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
UNITED INNS, INC.
PURSUANT TO THE OFFER TO PURCHASE,
DATED NOVEMBER 21, 1994,
BY
UNITED/HARVEY HOLDINGS, L.P.
***************************************************************************
* *
* THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK *
* CITY TIME, ON FRIDAY, JANUARY 20, 1995, UNLESS THE OFFER IS *
* EXTENDED. *
* *
***************************************************************************
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By Mail, Hand or Overnight Courier: By Facsimile Transmission:
American Stock Transfer & Trust Company (For Eligible Institutions Only)
40 Wall Street, 46th Floor (718) 234-5001
New York, New York 10005 For Confirmation:
(718) 921-8200
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE,
OR TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN AS SET FORTH
ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal can be used only if (i) certificates for Shares
(as defined below) are to be delivered herewith or (ii) Shares are being
delivered concurrently by book-entry transfer to the account maintained by the
Depositary at The Depository Trust Company, Midwest Securities Trust Company,
or Philadelphia Depository Trust Company (collectively, the "Book-Entry
Transfer Facilities") as set forth in Section 3 of the Offer to Purchase (as
defined below).
The name(s) and address(es) of the registered holder(s) should be printed
below, if they are not already printed below, exactly as they appear on the
certificate(s) representing the Shares tendered herewith. The certificates and
the number of Shares that the registered holder(s) wish(es) to tender should be
indicated in the appropriate boxes below.
<TABLE>
<CAPTION>
======================================================================================================================
DESCRIPTION OF SHARES TENDERED
(See Instructions)
- ----------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) Shares Tendered
(Please fill in exactly as name(s) appear(s) on certificate(s)) (Attach additional list if necessary)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
------------ --------------- -----------
Number
of Shares Number of
Represented Shares
Certificate by Tendered**
Number(s)* Certificate(s)*
------------ --------------- -----------
------------ --------------- -----------
------------ --------------- -----------
------------ --------------- -----------
Total
======================================================================================================================
</TABLE>
* Need not be completed by stockholders delivering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered.
See Instruction 4.
<PAGE> 2
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY
PARTICIPANTS IN A BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY
BOOK-ENTRY TRANSFER):
Name of Tendering Institution______________________________________________
Check box of applicable Book-Entry Transfer Facility:
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depository Trust Company
Account Number_____________________________________________________________
Transaction Code Number____________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to United/Harvey Holdings, L.P.
("Purchaser") the above-described shares of Common Stock, par value $1.00 per
share (the "Shares"), of United Inns, Inc. (the "Company"), pursuant to
Purchaser's offer to purchase all outstanding Shares at $25.00 per Share, net
to the seller in cash (the "Offer Price"), on the terms and subject to the
conditions set forth in the Offer to Purchase, dated November 21, 1994 (the
"Offer to Purchase"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which together constitute the "Offer").
Subject to and effective upon acceptance for payment of the Shares
tendered herewith in accordance with the terms of the Offer (including, if the
Offer is extended or amended, the terms or conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of Purchaser all right, title and interest in and to all of the Shares
that are being tendered hereby and any and all distributions (including without
limitation the issuance of additional Shares, other securities or rights for
the purchase of any security and/or property) in respect of such Shares that
are declared or paid on or after November 14, 1994 and are payable or
distributable to stockholders of record on or prior to the transfer into the
name of Purchaser or its nominee (collectively, "Distributions"), and hereby
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares (and any
Distributions), with full power of substitution and resubstitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (i) deliver or transfer ownership of such Shares (and any Distributions) on
the account books maintained by a Book-Entry Transfer Facility, together, in
any such case, with all accompanying evidences of transfer and authenticity, to
or upon the order of Purchaser, upon receipt by the Depositary, as the
undersigned's agent, of the Offer Price with respect to such Shares; (ii)
present certificates for such Shares (and any Distributions) for transfer on
the books of the Company; and (iii) receive all benefits and otherwise exercise
all rights of beneficial ownership of such Shares (and any Distributions), all
in accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints Daniel A. Decker, J. Peter
Kline, Donald J. McNamara and Robert A. Whitman, and each of them, or any
other designee of Purchaser, the attorneys and proxies of the undersigned, each
with full power of substitution and resubstitution, to vote in such manner as
each such attorney and proxy or his substitute shall in his sole discretion
deem proper, to execute any written consent as each such attorney and proxy or
his substitute shall in his sole discretion deem proper and otherwise to act
with respect to all of the Shares (and any Distributions) tendered hereby which
have been accepted for payment by Purchaser prior to the time of such vote,
consent or other action. This power of attorney and proxy is coupled with an
interest in the Shares tendered hereby is irrevocable, and is granted in
consideration of, and is effective upon, the acceptance for payment of such
Shares by Purchaser in accordance with the terms of the Offer. Such acceptance
for payment will revoke all powers of attorney and proxies given by the
undersigned at any time with respect to such Shares (and any Distributions) and
no subsequent powers of attorney or proxies will be given with respect thereto
by the undersigned (and, if given, will be deemed ineffective). The
undersigned understands that Purchaser reserves
-2-
<PAGE> 3
the right to require that, in order for Shares to be validly tendered,
immediately upon Purchaser's acceptance for payment of such Shares, Purchaser
will be able to exercise full voting rights and other rights of a record and
beneficial holder with respect to such Shares and any securities received
through Distributions, including without limitation voting at a meeting of
stockholders or acting by written consent.
The undersigned hereby represents and warrants that: (i) the undersigned
has full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and (ii) when the same are accepted for payment by Purchaser,
Purchaser will acquire good, marketable and unencumbered title thereto, free
and clear of all liens, restrictions, charges and encumbrances, and the same
will not be subject to any adverse claim. The undersigned, upon request, will
execute and deliver any additional documents the Depositary or Purchaser deems
necessary or desirable to complete the assignment, transfer and purchase of the
Shares (and any Distributions) tendered hereby. In addition, the undersigned
will promptly remit and transfer to the Depositary for the account of Purchaser
any and all Distributions in respect of the Shares tendered hereby, accompanied
by appropriate instruments of transfer and, pending remittance or appropriate
assurance thereof, then Purchaser will be entitled to all rights and privileges
as owner of any such Distributions, and may withhold the entire purchase price
or deduct from the purchase price of Shares tendered hereby, the amount of
value thereof, as determined by Purchaser in its sole discretion.
The undersigned understands that the valid tender of Shares pursuant to
any one of the procedures described in Section 3 of the Offer to Purchase and
in the instructions hereto will constitute a binding agreement between the
undersigned and Purchaser on the terms and subject to the conditions of the
Offer. The undersigned recognizes that, under certain circumstances set forth
in the Offer to Purchase, Purchaser may terminate or amend the Offer or may not
be required to accept for payment any of the Shares tendered herewith.
All authority herein conferred or herein agreed to be conferred will not
be affected by, and will survive, the death or incapacity of the undersigned,
and any obligation of the undersigned hereunder will be binding upon the heirs,
personal representatives, successors, and assigns of the undersigned.
Please issue the check for the Purchase Price in the name(s) of the
undersigned. Unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the Offer Price and/or any certificates(s) evidencing
any Shares not tendered or not accepted for payment (and accompanying
documents, as appropriate) to the undersigned at the address appearing below
the undersigned's signature. In the case of book-entry delivery of Shares,
please credit the account maintained by the Book-Entry Transfer Facility
indicated above with any Shares not accepted for payment.
IF ANY SURRENDERED SHARES ARE REGISTERED IN DIFFERENT NAMES, IT WILL BE
NECESSARY TO COMPLETE, SIGN AND SUBMIT AS MANY SEPARATE COPIES OF THIS LETTER
OF TRANSMITTAL AS THERE ARE DIFFERENT REGISTRATIONS.
-3-
<PAGE> 4
________________________________________________________________________________
PLEASE SIGN HERE
(Also Complete Substitute W-9 Below)
(See Instructions 1, 2, and 3 and the following paragraph)
X_______________________________________________________, ___________________
X_______________________________________________________, ___________________
Signature(s) of Owner(s) Date
Area Code and Tel. No.: ____________________
(Must be signed by the registered holder(s) exactly as the name(s)
appear(s) on the certificate(s) for Shares or on a security position listing
or by person(s) authorized to become registered holder(s) by certificates
and documents transmitted herewith. If signature is by a trustee, executor,
administrator, guardian, officer or other person acting in a fiduciary or
representative capacity, please set forth the following information. See
Instructions 2 and 3.)
Name(s):________________________________________________________________
________________________________________________________________
(Please Type or Print)
Capacity:________________________________________________________________
________________________________________________________________
Address:________________________________________________________________
________________________________________________________________
(Include Zip Code)
SIGNATURE GUARANTEE
(If required by Instruction 1)
Signature(s) Guaranteed by
an Eligible Institution:_____________________________________________________
(Authorized Signature)
________________________________________________________________
(Title)
________________________________________________________________
(Name of Firm)
________________________________________________________________
(Address)
________________________________________________________________
(Area Code and Telephone No.)
Dated:__________________________________________________________
________________________________________________________________________________
SPECIAL DELIVERY INSTRUCTIONS
(Also Complete Substitute W-9 Below)
(See Instructions 1, 3 and 5)
To be completed ONLY if certificates for Shares not tendered or not accepted
for payment and/or the check for the Purchase Price of Shares accepted for
payment are to be sent to someone other than the undersigned or to the
undersigned at an address other than that above.
Mail: [ ] Check and/or [ ] Certificates(s) to:
Name: ________________________________________________________________
(Please Print)
Address: ________________________________________________________________
________________________________________________________________
(Include Zip Code)
________________________________________________________________________________
-4-
<PAGE> 5
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURE(S). No signature guarantee is required on
this Letter of Transmittal if (i) this Letter of Transmittal is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in a Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of such Shares) tendered
herewith, unless such holder(s) has completed the box entitled "Special
Delivery Instructions" above or (ii) such Shares are tendered for the account
of a financial institution that is a member in good standing in the Securities
Transfer Agents Medallion Program, the Stock Exchange Medallion Program or the
New York Stock Exchange, Inc. Medallion Signature Program (each an "Eligible
Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 3.
2. DELIVERY OF THIS LETTER OF TRANSMITTAL AND THE SHARE(S). This Letter
of Transmittal is to be completed by stockholders either if certificates are to
be forwarded herewith or if delivery of Shares is to be made pursuant to the
procedures for book-entry transfer set forth in Section 3 of the Offer to
Purchase. For Shares to be validly tendered pursuant to the Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees and any other documents required by this
Letter of Transmittal, must be received by the Depositary at its address set
forth herein and either certificates in proper form for transfer must be
received by the Depositary at such address or a book-entry transfer of such
Shares into the Depositary's account at a Book-Entry Transfer Facility must be
completed, in each case prior to the Expiration Date (as defined in the Offer
to Purchase).
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution
of this Letter of Transmittal (or facsimile hereof), waive any right to receive
any notice of the acceptance of their Shares for payment. None of Purchaser,
the Depositary, the Information Agent or any other person is obligated to give
notice of defects or irregularities in any tender, nor will any of them incur
any liability for failure to give any such notice.
3. SIGNATURE(S) ON LETTER OF TRANSMITTAL, CERTIFICATES AND STOCK POWERS;
ENDORSEMENT(S).
(a) If this Letter of Transmittal is signed by the registered holder(s)
of the Shares tendered hereby, the signature(s) must correspond with the
name(s) as written on the face of the certificates without alteration,
enlargement or any change whatsoever.
(b) If any of the Share(s) are held of record by two or more persons, all
such persons must sign this Letter of Transmittal.
(c) If any of the Share(s) are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal and any necessary accompanying documents as
there are different registrations of certificates.
(d) If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, and in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on such
certificates. Signatures on any such certificates or stock powers must be
guaranteed by an Eligible Institution (unless signed by an Eligible
Institution).
(e) If this Letter of Transmittal or any certificates or stock powers are
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Purchaser of the authority of such person to so
act must be submitted with this Letter of Transmittal.
4. PARTIAL TENDERS. (Not applicable to stockholders who tender by
book-entry transfer.) If fewer than all the Shares evidenced by any
certificates submitted are to be tendered, fill in the number of Shares that
are to be tendered in the box
-5-
<PAGE> 6
entitled "Number of Shares Tendered." In such case, new certificates for the
remainder of the Shares that were evidenced by the certificates will be issued
in the name of the person signing this Letter of Transmittal and, unless
otherwise provided in the box of this Letter of Transmittal entitled "Special
Delivery Instructions," will be mailed to the person signing this Letter of
Transmittal at the address set forth below such person's signature. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. SPECIAL DELIVERY INSTRUCTIONS. If certificates representing Shares
not tendered or not accepted for payment and/or the check for the Offer Price
of Shares accepted for payment are to be sent to someone other than the person
signing this Letter of Transmittal or to the person signing the Letter of
Transmittal at an address other than that set forth below such person's
signature, the box of this Letter of Transmittal entitled "Special Delivery
Instructions" should be completed.
6. SUBSTITUTE FORM W-9. The tendering holder is required to provide the
Depositary with a correct Taxpayer Identification Number ("TIN") on Substitute
Form W-9, which is provided under "Important Tax Information" below, and to
certify that the holder is not subject to backup withholding. Failure to
provide the information on the Substitute Form W-9 may subject the tendering
holder to 31% federal income tax withholding on the payment of the Purchase
Price. The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked and the
Depositary is not provided with a TIN within 60 days, the Depositary will
withhold 31% on all payments of the Purchase Price thereafter until a TIN is
provided to the Depositary.
7. TRANSFER TAXES. Purchaser will pay all transfer taxes, if any,
applicable to the transfer of Shares to it pursuant to the Offer. If, however,
tendered certificates are registered in the name of any person(s) other than
the person(s) signing this Letter of Transmittal, and accordingly payment of
the Offer Price is to be sent to and, if applicable, certificates for Shares
not tendered or not accepted for payment are to be registered in the name of
the person(s) signing this Letter of Transmittal and not the registered
holder(s), the amount of any transfer taxes (whether imposed on the registered
holder(s) or the person(s) signing this Letter of Transmittal) payable on
account of the transfer to the person(s) signing this Letter of Transmittal
will be deducted from the Offer Price unless satisfactory evidence of payment
of such taxes, or exemption therefrom, is submitted. Except as provided in
this Subsection 7, it will not be necessary for transfer tax stamps to be
affixed to the certificates tendered herewith or funds to cover such stamps to
be provided with this Letter of Transmittal.
8. WITHDRAWALS. Shares tendered pursuant to the Offer may be withdrawn
only as set forth in Section 4 of the Offer to Purchase.
9. MUTILATED, LOST, STOLEN OR DESTROYED CERTIFICATES. If any
certificate(s) representing Shares has been mutilated, lost, stolen or
destroyed, the stockholder should promptly notify the Depositary as indicated
above for further instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of this Letter of Transmittal and
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 should be directed to MacKenzie Partners, Inc., the Information Agent
for the Offer, at the telephone numbers and address set forth below or to your
broker, dealer, commercial bank, trust company or other nominee.
IMPORTANT TAX INFORMATION
Backup Withholding. Federal income tax law requires that a stockholder
whose tendered Shares are accepted for payment provide the Depositary with such
stockholder's correct TIN on Substitute Form W-9, which in the case of a
surrendering stockholder who is an individual is his or her social security
number, and to certify that the stockholder is not subject to backup
withholding. If the Depositary is not provided with the correct TIN, such
stockholder may be subject to a $50 penalty imposed by the Internal Revenue
Service (the "IRS"). In addition, payments that are made to such stockholder
may be subject to 31% backup withholding.
Certain stockholders (including, among others, all corporations and
certain foreign individuals) are not subject to backup withholding and
reporting requirements and should indicate their status by writing "exempt"
across the face of the Substitute Form W-9. In order for a foreign individual
to qualify as an exempt recipient, the stockholder must submit a Form W-8,
signed under penalties of perjury, attesting to that individual's exempt
status. A Form W-8 can be obtained from the Depositary. See the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for more instructions.
-6-
<PAGE> 7
If backup withholding applies, the Depositary is required to withhold 31%
of any payment made to the stockholder. Backup withholding is not an
additional tax. Rather, the federal income tax liability of persons subject to
backup withholding will be reduced by the amount of such withholding. If
backup withholding results in an overpayment of taxes, a refund may be obtained
from the IRS.
Purpose of Substitute Form W-9. To prevent backup withholding, each
stockholder tendering Shares must provide such stockholder's correct TIN by
completing the form below, certifying that the TIN provided on the Substitute
Form W-9 is correct (or that such stockholder is awaiting a TIN) and that (i)
the stockholder has not been notified by the IRS that the stockholder is
subject to backup withholding as a result of a failure to report all interest
or dividends or (ii) the IRS has notified the stockholder that the stockholder
is no longer subject to backup withholding.
The stockholder is required to give the TIN (e.g., the social security
number or employer identification number) of the record owner of the Shares.
If the Shares are in more than one name or are not in the name of the actual
owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for information on which TIN to
report. The box in Part 2 of the Substitute Form W-9 may be checked if you
have not been issued a TIN and have applied for a TIN or intend to apply for a
TIN in the near future. If the box in Part 2 is checked and the Depositary is
not provided with a TIN within 60 days, backup withholding will begin and
continue until you furnish your TIN to the Depositary.
PAYOR'S NAME: AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
_______________________________________________________________________________________________________________________
<S> <C> <C>
SUBSTITUTE Part 1-PLEASE PROVIDE YOUR TIN IN THE BOX AT TIN:____________________________
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW Social Security Number or
Employee Identification Number
________________________________________________________________________________________
Department of the Treasury Part 2-
Internal Revenue Service Awaiting TIN [ ]
________________________________________________________________________________________
CERTIFICATION-UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT (1) the number shown on
this form is my correct taxpayer identification number (or I am waiting for a number
to be issued to me) and (2) I am not subject to backup withholding either because I
Payor's Request for have not been notified by the Internal Revenue Service (the "IRS") that I am subject
Taxpayer Identification to backup withholding as a result of a failure to report all interest or dividends or
Number (TIN) and the IRS has notified me that I am no longer subject to backup withholding. (You must
Certification cross out Item (2) above if you have been notified by the IRS that you are subject to
backup withholding because of underreporting interest or dividends on your return.
However, if after being notified by the IRS that you were subject to backup
withholding you received another notification from the IRS that you are no longer
subject to backup withholding, do not cross out Item (2).)
Signature: _____________________________________________________ Date: __________
_______________________________________________________________________________________________________________________
</TABLE>
________________________________________________________________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR
ADDITIONAL DETAILS.
________________________________________________________________________________
-7-
<PAGE> 8
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 2 OF SUBSTITUTE FORM W-9
________________________________________________________________________________
CERTIFICATE OF AWAITING TAX IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or
delivered an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to mail or deliver an application
in the near future. I understand that if I do not provide a taxpayer
identification number within 60 days, 31% of all reportable payments made to
me thereafter will be withheld until I provide a number.
______________________________________________________ _____________________
Signature Date
________________________________________________________________________________
Any questions or requests for assistance or additional copies of the
Offer to Purchase and this Letter of Transmittal may be directed to the
Information Agent at the telephone numbers and address set forth below. You
may also contact your broker, dealer, commercial bank, trust company or other
nominee for assistance in the Offer.
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
Call Toll Free (800) 322-2885
-8-
<PAGE> 1
EXHIBIT 99.(a)(3)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
UNITED INNS, INC.
AT
$25.00 NET PER SHARE
BY
UNITED/HARVEY HOLDINGS, L.P.
***************************************************************************
* *
* THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK *
* CITY TIME, ON FRIDAY, JANUARY 20, 1995, UNLESS THE OFFER IS *
* EXTENDED. *
* *
***************************************************************************
November 21, 1994
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We are enclosing the material listed below relating to the offer by
United/Harvey Holdings, L.P. ("Purchaser") to purchase all of the outstanding
shares of Common Stock, par value $1.00 per share (the "Shares"), of United
Inns, Inc. (the "Company") at $25.00 per Share, net to the seller in cash, on
the terms and subject to the conditions set forth in the Offer to Purchase,
dated November 21, 1994 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which together constitute the "Offer").
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible.
Enclosed are copies of the following documents:
1. The Offer to Purchase, dated November 21, 1994;
2. The Letter of Transmittal to be used by holders of Shares to
tender Shares;
3. A form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or the name
of your nominee, with space provided for obtaining such
clients' instructions with regard to the Offer;
4. Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9; and
5. Return envelope addressed to American Stock Transfer & Trust
Company, the Depositary for the Offer.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE
NOTE THAT, UNLESS EXTENDED, THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON FRIDAY, JANUARY 20, 1995.
Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Depositary and the Information Agent for the
Offer) for soliciting tenders of Shares pursuant to the Offer. You will
<PAGE> 2
be reimbursed for customary mailing and handling expenses incurred by you in
forwarding any of the enclosed materials to your clients. Purchaser will pay
all transfer taxes applicable to the purchase of Shares pursuant to the Offer,
except as set forth in Instruction 7 of the Letter of Transmittal.
Please note that the Offer is conditioned on, among other things,
there being validly tendered and not withdrawn at least that number of Shares
that, when taken as a whole with all other Shares owned or acquired by
Purchaser, would constitute a majority of the outstanding Shares on a fully
diluted basis and certain other conditions. See "Introduction" and Section 14
("Certain Conditions of the Offer") of the Offer to Purchase.
Any requests for additional copies of the enclosed material and any
inquiries you may have with respect to the Offer should be addressed to
MacKenzie Partners, Inc., the Information Agent for the Offer, at the telephone
numbers and address set forth on the back cover of the Offer to Purchase.
Very truly yours,
UNITED/HARVEY HOLDINGS, L.P.
_____________________________________
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS AN AGENT OF PURCHASER, ANY AFFILIATE OF PURCHASER, THE
COMPANY, ANY AFFILIATE OF THE COMPANY, THE DEPOSITARY OR THE INFORMATION AGENT
OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER, EXCEPT FOR
STATEMENTS EXPRESSLY MADE IN THE MATERIAL ENCLOSED HEREWITH AND THE STATEMENTS
CONTAINED HEREIN.
-2-
<PAGE> 1
EXHIBIT 99.(a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
UNITED INNS, INC.
AT
$25.00 NET PER SHARE
BY
UNITED/HARVEY HOLDINGS, L.P.
***************************************************************************
* *
* THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK *
* CITY TIME, ON FRIDAY, JANUARY 20, 1995, UNLESS THE OFFER IS *
* EXTENDED. *
* *
***************************************************************************
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated November
21, 1994 (the "Offer to Purchase"), and the Related Letter of Transmittal
(which together constitute the "Offer") relating to the Offer by United/Harvey
Holdings, L.P. ("Purchaser") to purchase all of the outstanding shares of
Common Stock, par value $1.00 per share (the "Shares"), of United Inns, Inc. at
$25.00 per share, net to the seller in cash, on the terms and subject to the
conditions set forth in the offer.
This material is being forwarded to you as the beneficial owner of
shares held by us for your account but not registered in your name. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND ONLY PURSUANT
TO YOUR INSTRUCTIONS. THE ENCLOSED LETTER OF TRANSMITTAL IS FURNISHED TO YOU
FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US
FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender any
or all such Shares held by us for your account, on the terms and subject to the
conditions of the Offer.
Your attention is invited to the following:
1. The tender price is $25.00 per share, net to you in cash.
2. The Offer is subject to there being validly tendered and not
withdrawn prior to the expiration of the Offer at least that
number of Shares that, when taken as a whole with all other
Shares owned or acquired by Purchaser, would constitute a
majority of the outstanding Shares on a fully diluted basis
and certain other conditions. See "Introduction" and Section
14 of the Offer to Purchase.
3. The Offer is being made for all outstanding Shares.
4. You will not be obligated to pay any brokerage fees or
commissions or, except as set forth in Instruction 7 of the
Letter of Transmittal, any transfer taxes on the purchase of
Shares by Purchaser pursuant to the offer.
5. The Offer and withdrawal rights will expire at 5:00 P.M., New
York City time, on Friday, January 20, 1995, unless extended.
6. Without making any determination with respect to or approving
the possible Cash/Stock Option (as defined in the Offer to
Purchase) or any related amendment to the Merger Agreement (as
defined in the Offer to Purchase) that may be approved by any
successor Board of Directors, the Board of Directors of the
Company as presently constituted has unanimously (i)
determined that the Offer and the Merger (as defined in the
Offer to Purchase) are in the best interests of the Company's
stockholders and (ii) approved the Merger Agreement and the
transactions contemplated thereby, including the Offer and the
Merger.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing and returning to us the instruction form
set forth on the reverse side of this page. If you authorize us to tender your
Shares, all such Shares will be tendered unless otherwise indicated. Your
instructions to us should be forwarded to us promptly to permit us to submit a
tender on your behalf prior to the expiration of the Offer.
<PAGE> 2
INSTRUCTIONS WITH RESPECT
TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
UNITED INNS, INC.
AT
$25.00 NET PER SHARE
BY
UNITED/HARVEY HOLDINGS, L.P.
The undersigned acknowledge(s) receipt of your letter enclosing the
Offer to Purchase, dated November 21, 1994 (the "Offer to Purchase"), and the
related Letter of Transmittal, relating to the offer by United/Harvey Holdings,
L.P. to purchase all outstanding Shares of Common Stock, par value $1.00 per
share (the "Shares"), of United Inns, Inc.
This will instruct you to tender the number of Shares indicated below
held by you for the account of the undersigned upon the terms and subject to
the conditions set forth in such Offer to Purchase and the related Letter of
Transmittal.
<TABLE>
<S> <C>
___________________________________________________
Number of Shares to be Tendered: ___________________________________________________
SIGNATURE(S)
_____________________________ Shares*
___________________________________________________
*I (we) understand that if I (we) sign
these instructions without indicating a ___________________________________________________
lesser number of Shares in the space PLEASE PRINT NAME(S)
above, all Shares held by you for my
(our) account will be tendered.
___________________________________________________
___________________________________________________
ADDRESS(ES)
___________________________________________________
TELEPHONE NUMBER(S) (INCLUDING AREA CODE)
___________________________________________________
TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER(S)
</TABLE>
-2-
<PAGE> 1
EXHIBIT 99.(a)(5)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-000. Employer Identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- ------------------------------------------------------- ---------------------------------------------------------
For this type of Give the SOCIAL SECURITY For this type of Give the EMPLOYER
account: number of-- account: IDENTIFICATION number of--
- ------------------------------------------------------- ---------------------------------------------------------
<S> <C> <C> <C> <C>
1. An individual's The individual 9. A valid trust, The legal entity (Do not
account estate, or pension furnish the identifying
trust number of the personal
representative or trustee
unless the legal entity
itself is not designated in
the account title.)(5)
2. Two or more The actual owner of the 10. Corporate account The corporation
individuals (joint account or, if combined
account) funds, any one of the
individuals(1)
3. Husband and wife The actual owner of the 11. Religious, The organization
(joint account) account or, if joint charitable, or
funds, either person(1) educational
organization account
4. Custodian account of The minor(2) 12. Partnership account The partnership
a minor (Uniform held in the name of
Gift to Minors Act) the business
5. Adult and minor The adult or, if the 13. Association, club, The organization
(joint account) minor is the only or other tax-exempt
contributor, the organization
minor(1)
6. Account in the name The ward, minor, or 14. A broker or The broker or nominee
of guardian or incompetent person(3) registered nominee
committee for a
designated ward,
minor, or
incompetent person
7. a. The usual The grantor-trustee(1) 15. Account with the The public entity
revocable savings Department of
trust account Agriculture in the
(grantor is also name of a public
trustee) entity (such as a
State or local
b. So-called trust government, school
account that is The actual owner(1) district, or prison)
not a legal or that receives
valid trust under agriculture program
State law payments
8 Sole proprietorship The owner(4)
account
- ------------------------------------------------------- ---------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
Notes: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and apply
for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
o A corporation.
o A financial institution.
o An organization exempt from tax under Internal Revenue Code ("IRC")
section 501(a), or an individual retirement plan.
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof.
o An international organization or any agency or instrumentality thereof.
o A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under IRC section 584(a).
o An exempt charitable remainder trust, or a non-exempt trust described
in IRC section 4947(a)(1).
o An entity registered at all times under the Investment Company Act of
1940.
o A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
o Payments to nonresident aliens subject to withholding under IRC section
1441.
o Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
o Payments of patronage dividends where the amount received is not paid
in money.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to backup withholding include
the following:
o Payments of interest on obligations issued by individuals. Note: You
may be subject to backup withholding if this interest is $600 or more
and is paid in the course of the payer's trade or business and you have
not provided your correct taxpayer identification number to the payer.
o Payments of tax exempt interest (including exempt interest dividends
under IRC section 852).
o Payments described in IRC section 6049(b)(5) to nonresident aliens.
o Payments on tax-free covenant bonds under IRC section 1451.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under IRC sections 6041,
6041A(a), 6045, and 6050A.
PRIVACY ACT NOTICE--IRC section 6109 requires most recipients of dividend,
interest or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Beginning January 1, 1993, payers
must generally withhold 31% of taxable interest, dividend, and certain other
payments to a payee who does not furnish a taxpayer identification number to a
payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
<PAGE> 1
EXHIBIT 99.(c)(1)
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made
and entered into as of November 14, 1994 by and between United/Harvey Holdings,
L.P., a Delaware limited partnership ("Purchaser"), United/Harvey Hotels, Inc.,
a Delaware corporation ("New Parent"), United/Harvey Sub, Inc., a Delaware
corporation ("Merger Sub"), and United Inns, Inc., a Delaware corporation (the
"Company").
RECITALS
A. Purchaser has agreed, on the terms and subject to the
conditions set forth herein, to make a cash tender offer to acquire all shares
of issued and outstanding common stock, par value $1.00 per share, of the
Company (the "Company Common Stock") (all issued and outstanding shares of
Company Common Stock being hereinafter collectively referred to as the
"Shares") at a price of $25.00 per Share (such amount, or such other amount in
cash as Purchaser may pay pursuant to the Offer, being hereinafter referred to
as the "Per Share Amount"), net to the seller in cash (the "Offer").
B. The Board of Directors of the Company has approved
the making of the Offer and resolved and agreed to recommend that the
stockholders of the Company tender their Shares pursuant to the Offer.
C. In connection with the foregoing, the Board of
Directors of the Company has approved the merger (the "Merger") of Merger Sub
with and into the Company following the Offer in accordance with the General
Corporation Law of the State of Delaware (the "Delaware Law") and upon the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Purchaser, New Parent, Merger Sub and the Company hereby agree as
follows:
ARTICLE I
THE OFFER
SECTION 1.1 The Offer.
(a) Provided that (i) this Agreement shall not have been
terminated in accordance with Section 8.1 and (ii) none of the events set forth
in Annex I hereto shall have occurred or be existing, Purchaser will commence
the Offer as promptly as practicable after the date hereof, but in no
<PAGE> 2
event later than five business days after the date hereof. Subject to the
terms and conditions of the Offer, Purchaser shall accept for payment and pay
for Shares which have been validly tendered and not withdrawn pursuant to the
Offer at the Per Share Amount net to the Seller in cash at the earliest such
time following expiration of the Offer that all conditions to the Offer shall
have been satisfied or waived by Purchaser. The Offer will not be extended for
any reason except (i) to provide additional time within which to satisfy any
conditions to the Offer which are not satisfied on the expiration date
originally set forth in the Offer to Purchase (as defined below), or (ii) as
may be required by applicable law. The obligation of Purchaser to accept for
payment any Shares tendered pursuant to the Offer will be subject only to the
satisfaction of the conditions set forth in Annex I hereto. Purchaser
expressly reserves the right to waive any such condition, to increase the price
per Share payable in the Offer or to make any other changes in the terms and
conditions of the Offer (provided that no change may be made (A) that decreases
the price per Share, payable in the Offer, except for decreases, if any, to
reflect the difference, if any, between 2,704,899 shares and the number of
shares of Common Stock outstanding, calculated on a fully diluted basis, (B)
that reduces the maximum number of Shares to be purchased in the Offer, (C)
that changes the form of consideration to be paid in the Offer, or (D) that
imposes conditions to the Offer in addition to those set forth in Annex I
hereto). The Offer will be made by means of an offer to purchase (the "Offer
to Purchase") having provisions consistent in all material respects with the
terms set forth in this Agreement and the conditions set forth in Annex I
hereto.
(b) As soon as practicable on the date the Offer is
commenced, Purchaser will file with the Securities and Exchange Commission (the
"SEC") a Tender Offer Statement on Schedule 14D-1 (together with all amendments
and supplements thereto the "Schedule 14D-1") with respect to the Offer. The
Schedule 14D-1 will contain or incorporate by reference the Offer to Purchase
(or portions thereof) and a form of the related letter of transmittal (such
Schedule 14D-1, Offer to Purchase and other documents, together with all
supplements or amendments thereto, being collectively referred to as the "Offer
Documents"). The Offer Documents will comply in all material respects with the
provisions of the applicable federal securities laws. The Company will
cooperate with Purchaser in its preparation of the Offer Documents. Each of
Purchaser and the Company will promptly correct any information provided by it
for use in the Offer Documents that shall have become false or misleading in
any material respect, and Purchaser will take all steps necessary to cause the
Schedule 14D-1 as so corrected to be
-2-
<PAGE> 3
filed with the SEC and the other Offer Documents as so corrected to be
disseminated to holders of Shares, in each case as and to the extent required
by applicable law.
SECTION 1.2 Company Action.
(a) The Company represents and warrants to Purchaser that
(i) its Board of Directors has unanimously (A) approved this Agreement and the
transactions contemplated hereby, (B) resolved to recommend that the
stockholders of the Company accept the Offer and adopt this Agreement, if
necessary under applicable law, and the transactions contemplated hereby, and
(C) determined that the Offer and the Merger are in the best interests of the
holders of Shares; (ii) Smith Barney Inc. ("Smith Barney") has rendered to the
Board of Directors of the Company its written opinion (a true and correct copy
of which has been delivered to Purchaser), to the effect that as of the date of
this Agreement the Per Share Amount to be received by holders of the Shares in
the Offer and the Merger is fair to such holders from a financial point of
view, and (iii) pursuant to Section 203(a)(1) of the Delaware Law, its Board of
Directors has approved the acquisition by Purchaser (or any Affiliate (as
hereinafter defined) thereof) of shares of Company Common Stock pursuant to the
Offer, or pursuant to any other legally permissible purchase of Company Common
Stock at the Per Share Amount with the result that Section 203(a) will not
apply to any subsequent transaction between the Company and Purchaser (or any
Affiliate thereof).
(b) The Company will file with the SEC, contemporaneously
with the filing by Purchaser of the Schedule 14D-1, a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing the
recommendation of the Board of Directors of the Company described in Section
1.2(a) and will disseminate such Schedule 14D-9 as required by Rule 14d-9
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Purchaser will cooperate with the Company in its preparation
of the Schedule 14D-9. Each of the Company and Purchaser will promptly correct
any information provided by it for use in the Schedule 14D-9 that shall have
become false or misleading in any material respect, and the Company further
will take all steps necessary to cause the Schedule 14D-9 as so corrected to be
filed with the SEC and disseminated to holders of Shares, in each case as and
to the extent required by applicable law.
(c) The Company will promptly furnish Purchaser with
mailing labels containing the names and addresses of all record holders of
Shares and security position listings
-3-
<PAGE> 4
of Shares held in stock depositories, each as of a recent date, and thereafter
will promptly furnish Purchaser with such additional information, including
updated lists of stockholders, mailing labels and security position listings,
and such other assistance as Purchaser or its agents may reasonably request in
connection with the Offer.
(d) Subject to the requirements of law, and except for
such steps as are necessary to disseminate the Offer Documents, Purchaser and
each of its Affiliates and associates will hold in confidence the information
contained in any of such labels and lists, will use such information only in
connection with the Offer, and, if this Agreement shall be terminated, will
deliver to the Company all copies of such information then in their possession.
SECTION 1.3 Board of Directors of the Company.
(a) Upon Purchaser's acquisition of a majority of the outstanding
Shares pursuant to the Offer, Purchaser will be entitled, subject to compliance
with applicable law, to designate up to that number of members, rounded up to
the nearest whole number, of the Company's Board of Directors as will make the
percentage of the members designated by Purchaser equal to the percentage of
outstanding Shares held by Purchaser and its Affiliates (other than the Company
and its Subsidiaries). The Company will increase the size of its Board of
Directors and/or use its reasonable efforts to secure the resignation of such
number of directors as is necessary to enable Purchaser's designees to be
elected to the Company's Board of Directors as hereinabove contemplated and
will cause Purchaser's designees to be so elected effective immediately upon
Purchaser's acquisition of a majority of the outstanding Shares as described
above pursuant to the Offer or otherwise. In addition, the Company will cause
persons designated by Purchaser to constitute the same percentage (rounded up
to the nearest whole number) on each of the following as the designees of
Purchaser then constitute on the Board of Directors of the Company: (i) each
committee of such Board designated by Purchaser, (ii) each board of directors
of each Subsidiary of the Company designated by Purchaser, and (iii) each
committee of each such board designated by Purchaser.
(b) Without limiting the generality or effect of Section 1.3(a),
the Company hereby represents and warrants that the Board of Directors of the
Company duly adopted the written action in lieu of a meeting, attached hereto
as Annex I-A, and that such written action is, and as of immediately prior to
the purchase of Shares pursuant to the Offer will be, in full force and effect
in the form so adopted.
-4-
<PAGE> 5
(c) The Company's obligations to appoint designees to the
Company's Board of Directors will be subject to Section 14(f) of the Exchange
Act and Rule 14f-1 thereunder. The Company will promptly take all actions
required pursuant to Section 14(f) and Rule 14f-1 in order to fulfill the
Company's obligations under this Section 1.3, and Purchaser will provide the
Company with all necessary assistance, in order to fulfill the Company's
obligations under this Section 1.3. The Company will include in the Schedule
14D-9 such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1. Purchaser will
supply to the Company any information with respect to Purchaser and its
nominees required by Section 14(f) and Rule 14f-1 and Purchaser shall be solely
responsible for such information.
ARTICLE II
THE MERGER
SECTION 2.1 The Merger. On the terms and subject to the
conditions of this Agreement and the applicable provisions of Delaware Law, at
the Effective Time (as hereinafter defined) Merger Sub will be merged with and
into the Company (the "Merger"), the separate corporate existence of Merger Sub
will cease, and the Company will continue as the surviving corporation (the
Company as the surviving corporation after the Merger being sometimes
hereinafter referred to as the "Surviving Corporation").
SECTION 2.2 Effective Time. As promptly as practicable after
the satisfaction or waiver of the conditions set forth in Article VIII-A, the
parties hereto will cause the Merger to be consummated by filing a certificate
of merger with the Secretary of State of the State of Delaware and making such
other filings as may be required by the Delaware Law, in such form as may be
required by, and executed in accordance with, the relevant provisions of the
Delaware Law. The Merger will become effective at the time of the filing of
such certificate of merger (the "Effective Time").
SECTION 2.3 Effect of the Merger. At the Effective Time, the
effect of the Merger will be as provided in the applicable provisions of the
Delaware Law. Without limiting the generality of the foregoing, at the
Effective Time all the property, rights, privileges, powers and franchises of
the Company and Merger Sub will vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and Merger Sub will become the
debts, liabilities and duties of the Surviving Corporation.
-5-
<PAGE> 6
SECTION 2.4 Certificate of Incorporation; By-Laws.
(a) The Certificate of Incorporation of the Surviving
Corporation to be in effect from and after the Effective Time until amended in
accordance with its terms and the Delaware Law will be the Certificate of
Incorporation of the Company, as amended and restated in the form of Annex II
hereto.
(b) The By-Laws of the Surviving Corporation to be in
effect immediately from and after the Effective Time until amended in
accordance with its terms and the Delaware Law will be the By-Laws of the
Company, as amended and restated in the form of Annex III hereto.
SECTION 2.5 Directors and Officers. The directors of Merger
Sub immediately prior to the Effective Time will be the initial directors of
the Surviving Corporation, and the officers of Merger Sub immediately prior to
the Effective Time will be the initial officers of the Surviving Corporation,
each to hold office in accordance with the Certificate of Incorporation and
By-Laws of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified.
SECTION 2.6 Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any action on the part of Merger Sub, the
Company or New Parent,
(a) each Share of Company Common Stock, issued and
outstanding immediately prior to the Effective Time (other than Company Common
Stock held by New Parent and any Dissenting Shares (as hereinafter defined))
will be converted into and become the right to receive the Per Share Amount, in
cash, without interest thereon;
(b) each Share of Company Common Stock held in the
Company's treasury, by any Subsidiary of the Company or by New Parent
immediately prior to the Effective Time will be cancelled without the payment
of any consideration therefor;
(c) each Share of common stock, par value $0.01 per
share, of Merger Sub ("Merger Sub Common Shares") issued and outstanding
immediately prior to the Effective Time will be converted into and become one
share of Common Stock, par value $0.01 per share, of the Surviving Corporation
("Surviving Corporation Common Share"); and
(d) each Merger Sub Common Share held in Merger Sub's
treasury or by any Subsidiary of Merger Sub
-6-
<PAGE> 7
immediately prior to the Effective Time will be cancelled without the payment
of any consideration therefor.
SECTION 2.7 Dissenting Shares
(a) Notwithstanding any provision of this Agreement to
the contrary, any Company Common Stock held by a holder who has demanded and
perfected the right for appraisal of such shares in accordance with the
Delaware Law and who, as of the Effective Time, has not effectively withdrawn
or lost such right to such appraisal ("Dissenting Shares"), will not be
converted into or represent a right to receive the Per Share Amount in cash
pursuant to Section 2.6, but the holder thereof will be entitled only to such
rights as are granted by the Delaware Law.
(b) Notwithstanding the provisions of Section 2.7(a), if
any holder of Company Common Stock who demands appraisal of such shares under
the Delaware Law shall effectively withdraw or lose (through failure to perfect
or otherwise) the right to such appraisal, then, as of the later of the
Effective Time or the occurrence of such event, such holder's shares will
automatically be converted into and represent only the right to receive the Per
Share Amount in cash as provided in Section 2.6, without interest thereon, upon
surrender of the certificate or certificates evidencing such shares in the
manner provided by Section 2.8.
(c) The Company will give New Parent (i) prompt notice of
any written demands for appraisal of any Company Common Stock, withdrawals of
such demands, any other instruments served pursuant to the Delaware Law and
received by the Company and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under the Delaware Law. The
Company will not, except with the prior written consent of New Parent,
voluntarily make any payment with respect to any demands for appraisal of
Company Common Stock or offer to settle or settle any such demands.
SECTION 2.8 Surrender of Shares; Stock Transfer Books.
(a) New Parent will act or appoint a bank or trust
company or other entity with fiduciary powers to act as agent for the holders
of Company Common Stock (in such capacity, the "Exchange Agent") to receive and
disburse the funds to which holders of Company Common Stock shall become
entitled pursuant to Section 2.6.
(b) Promptly after the Effective Time, New Parent will
cause to be mailed to each Person who was, at the
-7-
<PAGE> 8
Effective Time, a holder of record of Company Common Stock entitled to receive
the Per Share Amount in cash pursuant to Section 2.6 a form of letter of
transmittal and instructions for use in effecting the surrender of the
certificates (mutually agreed to by New Parent and the Company) that,
immediately prior to the Effective Time, evidenced Company Common Stock to be
exchanged pursuant to the Merger. Upon surrender to the Exchange Agent of such
certificates, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, and such other
documents as may be reasonably requested, New Parent will promptly cause to be
delivered to the Persons entitled thereto the Per Share Amount in cash to which
the former holder of Company Common Stock shall have become entitled pursuant
to Section 2.6. Until so surrendered and exchanged, each such certificate that
immediately prior to the Effective Time evidenced Company Common Stock shall,
after the Effective Time, be deemed to evidence only the right to receive the
Per Share Amount in cash to which the holder thereof is entitled pursuant to
Section 2.6. No interest will be paid or will accrue on such amount payable in
cash upon surrender of such certificate.
(c) If payment of the Per Share Amount in cash in respect
of cancelled Company Common Stock is to be made to a Person other than the
Person in whose name the surrendered certificate formerly evidencing such
Company Common Stock is registered, it will be a condition to such payment that
the certificate so surrendered be properly endorsed or otherwise in proper form
for transfer and that the Person requesting such payment shall have paid any
transfer and other taxes required by reason of such payment or shall have
established to the satisfaction of the Exchange Agent that such tax either has
been paid or is not payable.
(d) At the Effective Time, the stock transfer books of
the Company will be closed and there will be no further registration of
transfers of Company Common Stock thereafter on the records of the Company.
(e) From and after the Effective Time, the holders of
certificates evidencing ownership of Company Common Stock outstanding
immediately prior to the Effective Time will cease to have any rights with
respect to such shares except as otherwise provided herein or by law.
(f) Notwithstanding anything to the contrary in this
Section 2.8, none of New Parent, the Exchange Agent (if other than New Parent)
and the Surviving Corporation will be liable to a holder of a certificate or
certificates formerly evidencing Company Common Stock for any amount properly
paid
-8-
<PAGE> 9
to a public official pursuant to any applicable property, escheat or similar
law.
ARTICLE III-A
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company that:
SECTION 3A.1 Organization. Purchaser is a limited
partnership duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite power and authority and any
necessary governmental authority to own, operate or lease the properties that
it purports to own, operate or lease and to carry on its business as it is now
being conducted, except where the failure of the foregoing to be true would not
have a material adverse effect on Purchaser's ability to perform its
obligations under this Agreement.
SECTION 3A.2 Authority Relative to this Agreement. Purchaser
has all necessary limited partnership power and authority to enter into this
Agreement and to carry out its obligations hereunder. The execution and
delivery of this Agreement by Purchaser, the performance by Purchaser of its
obligations hereunder and the consummation by Purchaser of the transactions
contemplated hereby have been duly authorized by all necessary limited
partnership action on the part of Purchaser. This Agreement has been duly
executed and delivered by Purchaser and, assuming the due authorization,
execution and delivery by the Company, this Agreement constitutes a legal,
valid and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms.
SECTION 3A.3 No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this
Agreement do not and will not (i) conflict with or violate any material law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award applicable to Purchaser or by which Purchaser or any of its properties is
bound or affected, (ii) violate or conflict with the partnership agreement of
Purchaser or the constituent documents of any of its partners, or (iii) result
in any breach of or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or
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result in the creation of any Encumbrance (as hereinafter defined) on any of
the property or assets of Purchaser pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Purchaser is a party or by which Purchaser or
any of its properties may be bound or affected, except where the failure of the
foregoing to be true would not have a material adverse effect on Purchaser's
ability to perform its obligations under this Agreement.
(b) The execution and delivery of this Agreement by
Purchaser do not, and the performance of this Agreement by Purchaser will not,
require any consent, approval, authorization or other action by, or filing with
or notification to, any governmental or regulatory authority, domestic or
foreign, or any third party or parties, except (i) for (A) applicable
requirements, if any, of the Exchange Act, state securities laws ("Blue Sky
laws") and state takeover laws, (B) the notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder (the "HSR Act"), and (C) approvals under relevant
state environmental control laws, and (ii) where failure to obtain such
consents, approvals, authorizations or actions, or to make such filings or
notifications, would not prevent Purchaser from performing its obligations
under this Agreement.
SECTION 3A.4 Offer Documents. The Offer Documents (and any
other documents required to be filed with the SEC by Purchaser in connection
with the transactions contemplated hereby) will not, at the time the Offer
Documents or such other documents (including any amendments or supplements
thereto) are filed with the SEC or are first published, sent or given to
stockholders, as the case may be, contain any untrue statement of material fact
or omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. Notwithstanding the foregoing, Purchaser makes no representation
or warranty with respect to any Company Information (as hereinafter defined)
contained in any of the Offer Documents (or such other documents). The Offer
Documents (and any other documents required to be filed with the SEC by
Purchaser in connection with the transactions contemplated hereby) and any
amendments or supplements thereto will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and regulations
promulgated thereunder.
SECTION 3A.5 Financing. Purchaser will have available or
will cause to be made available all the funds necessary to pay for the Shares
pursuant to the Offer and the Merger.
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SECTION 3A.6 Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by and on behalf of Purchaser.
ARTICLE III-B
REPRESENTATIONS AND WARRANTIES OF NEW PARENT AND MERGER SUB
New Parent and Merger Sub hereby represent and warrant to the
Company that:
SECTION 3B.1 Corporate Organization. Each of New Parent and
Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the requisite power
and authority and any necessary governmental authority to own, operate or lease
the properties that it purports to own, operate or lease and to carry on its
business as it is now being conducted, except where the failure of the
foregoing to be true would not have a material adverse effect on its ability to
perform its obligations under this Agreement.
SECTION 3B.2 Authority Relative to this Agreement. Each of
New Parent and Merger Sub has all necessary corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement by each of New Parent
and Merger Sub, the performance by New Parent and Merger Sub of their
respective obligations hereunder and the consummation by each of New Parent and
Merger Sub of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of New Parent and Merger Sub. This
Agreement has been duly executed and delivered by each of New Parent and Merger
Sub and, assuming the due authorization, execution and delivery by the other
parties hereto and thereto, this Agreement constitutes the legal, valid and
binding obligation of each of New Parent and Merger Sub, enforceable against
each of New Parent and Merger Sub in accordance with its terms.
SECTION 3B.3 No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this
Agreement by New Parent or Merger Sub do not and will not (i) conflict with or
violate any material law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award applicable to New Parent or Merger Sub or by
which either of New Parent or Merger Sub or any of
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<PAGE> 12
their respective properties is bound or affected, (ii) violate or conflict with
the Certificate of Incorporation or By- Laws of New Parent or the Certificate
of Incorporation or By-laws of Merger Sub, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of any
Encumbrance on any of the property or assets of New Parent or Merger Sub
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which New
Parent or Merger Sub is a party or by which New Parent or Merger Sub or any of
their respective properties may be bound or affected, except where the failure
of the foregoing to be true would not have a material adverse effect on the
ability of either New Parent or Merger Sub to perform its obligations under
this Agreement.
(b) The execution and delivery of this Agreement by New
Parent and Merger Sub do not, and the performance of this Agreement by New
Parent and Merger Sub will not, require any consent, approval, authorization or
other action by, or filing with or notification to, any governmental or
regulatory authority, domestic or foreign, or any third party or parties,
except (i) for (A) applicable requirements, if any, of the Exchange Act, Blue
Sky laws and state takeover laws, (B) the notification requirements of the HSR
Act, (C) approvals under relevant state environmental control laws, and (D) the
filing of a Certificate of Merger in accordance with the Delaware Law, and (ii)
where failure to obtain such consents, approvals, authorizations or actions, or
to make such filings or notifications, would not prevent New Parent or Merger
Sub from performing its obligations under this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser, New
Parent and Merger Sub that:
SECTION 4.1 Organization and Qualification; Subsidiaries.
Each of the Company and each of its Subsidiaries (as hereinafter defined) is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has the requisite power and
authority and any necessary governmental authority to own, operate or lease the
properties that it purports to own, operate or lease and to carry on its
business as it is now being conducted, and is duly qualified
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<PAGE> 13
or licensed to do business as a foreign corporation in good standing in each
jurisdiction where the character of its properties owned, operated or leased or
the nature of its activities makes such qualification or license necessary,
except as disclosed in Schedule 4.1, Part A of the Disclosure Schedule attached
as Annex IV hereto (the "Disclosure Schedule"), or except where such failure
would not have a Material Adverse Effect. The term "Material Adverse Effect"
as used in this Agreement means the existence or occurrence of any event or
circumstance which would have a material adverse affect on the business,
operations, property or condition (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole. A true and complete list of all the
Company's Subsidiaries, together with the jurisdiction of incorporation of each
such Subsidiary and the percentage of each such Subsidiary's outstanding
capital stock owned by the Company or another Subsidiary, is set forth in
Schedule 4.1, Part B of the Disclosure Schedule. For purposes of this
Agreement, a "Subsidiary" of a Person (as hereinafter defined) means any
corporation, partnership, joint venture, association or other entity, wherever
and however organized, in which such Person owns directly or indirectly or has
the right to acquire any capital stock, equity or beneficial interest, is a
partner, or otherwise controls management of, by having the right or ability to
designate a majority of the directors or members of the governing body thereof,
whether by agreement or otherwise.
SECTION 4.2 Certificates of Incorporation and By-Laws. The
Company has heretofore furnished, or has made available, to Purchaser a
complete and correct copy of the Certificates of Incorporation and the By-Laws
or equivalent organizational documents, each as amended to date, of the Company
and each of its Subsidiaries. Such Certificates of Incorporation, By-Laws and
equivalent organizational documents are in full force and effect. Neither the
Company nor any of its Subsidiaries is in violation of any of the provisions of
its Certificate of Incorporation or By-Laws or equivalent organizational
documents.
SECTION 4.3 Capitalization; Validity of the Shares. The
authorized capital stock of the Company consists of 10,000,000 shares of
Company Common Stock. As of the date hereof, (i) 2,665,899 shares of Company
Common Stock are issued and outstanding, all of which are duly authorized,
validly issued, fully paid and nonassessable, (ii) 1,451,914 shares of Company
Common Stock are held in the treasury of the Company, of which 39,000 shares
are subject to being issued upon the exercise of outstanding options, (iii) no
shares of Company Common Stock are held by Subsidiaries of the Company, and
(iv) 300,000 shares of Company Common Stock are reserved for issuance pursuant
to
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<PAGE> 14
the Company's 1993 Stock Incentive Plan. Except for the obligations under this
Agreement and as set forth in Schedule 4.3, Part A of the Disclosure Schedule,
there are no options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock
of the Company or any of its Subsidiaries or obligating the Company or any of
its Subsidiaries to issue or sell any shares of capital stock or other equity
interests in the Company or any of its Subsidiaries. Except as set forth in
Schedule 4.3, Part B of the Disclosure Schedule, there are no outstanding
contractual obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of Company Common Stock or
to provide funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any such Subsidiary or any other entity. Each of
the outstanding shares of capital stock of each of the Company's Subsidiaries
is duly authorized, validly issued, fully paid and nonassessable and, except as
set forth in Schedule 4.3, Part C of the Disclosure Schedule, such shares are
owned by the Company, directly or indirectly, free and clear of any and all
liens, claims, charges, encumbrances, restrictions on voting or alienation or
otherwise, or adverse interests (collectively, "Encumbrances").
SECTION 4.4 Authority Relative to this Agreement. The
Company has all necessary corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. The execution and
delivery of this Agreement by the Company, the performance by the Company of
its obligations hereunder and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to the adoption of this
Agreement by the Company's stockholders, if required by applicable law. This
Agreement has been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by the other parties hereto, this
Agreement constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
SECTION 4.5 No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this
Agreement by the Company do not and will not (i) conflict with or violate any
material law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award applicable to the Company or any of its Subsidiaries or
by which any of its or any of their respective properties are bound or
affected, (ii) violate or
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<PAGE> 15
conflict with the Certificates of Incorporation or By-Laws or equivalent
organizational documents of the Company or any of the Subsidiaries, or (iii)
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of any Encumbrance on any of the properties or assets of the
Company or any of its Subsidiaries, pursuant to (A) any note, bond, mortgage,
indenture or other evidence of indebtedness, except as set forth in Schedule
4.5, Part A of the Disclosure Schedule, (B) any contract, service agreement,
lease, license or permit, except as set forth in Schedule 4.5, Part B of the
Disclosure Schedule, or (C) any franchise instrument or obligation related
thereto, except as set forth in Schedule 4.5, Part C of the Disclosure
Schedule, in each case to which the Company or any of its Subsidiaries is a
party or by any of which the Company or any of its Subsidiaries or any of its
or any of their respective properties may be bound or affected, where such
breach, default, termination, acceleration, cancellation, or Encumbrance would
have a Material Adverse Effect.
(b) The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company will not,
require any consent, approval, authorization or other action by, or filing with
or notification to, any governmental or regulatory authority, domestic or
foreign, or any third party or parties, except (i) for (A) applicable
requirements, if any, of the Exchange Act, Blue Sky laws and state takeover
laws, (B) the notification requirements of the HSR Act, (C) approvals under
relevant state environmental control laws, and (D) the filing of a Certificate
of Merger in accordance with the Delaware Law, (ii) as set forth in Schedule
4.5, Part D of the Disclosure Schedule, and (iii) where failure to obtain such
consents, approvals, authorizations or actions, or to make such filings or
notifications, would not prevent the Company from performing its obligations
under this Agreement and would not have a Material Adverse Effect.
SECTION 4.6 SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports and
documents required to be filed with the SEC since September 30, 1989, and has
heretofore delivered or will promptly deliver to Purchaser for the fiscal years
ended September 30, 1992, September 30, 1993 and September 30, 1994, (i) its
Annual Reports on Form 10-K (it being acknowledged that the Company's Annual
Report on Form 10-K for the fiscal year ended September 30, 1994 may not be
available prior to the expiration of the Offer and has not yet been filed),
(ii) all definitive proxy statements
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relating to the Company's meetings of stockholders (whether annual or special),
and (iii) all other reports, registration statements or schedules filed by the
Company with the SEC, including all Quarterly Reports on Form 10-Q for the
Company's Fiscal Year ended September 30, 1994 (all such forms, reports,
documents and statements being hereinafter called, collectively, the "SEC
Reports"). The SEC Reports (i) were or will be prepared in accordance with the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
or the Exchange Act, as the case may be, and (ii) did not or will not at the
time they were or will be filed contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were or will be made, not misleading. None of the Subsidiaries of
the Company is required to file any reports, statements, forms or other
documents with the SEC.
(b) Each of the consolidated financial statements
(including, in each case, any related notes) contained in the SEC Reports has
been or will be prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods involved
(except as may be otherwise indicated in the notes thereto) and each fairly
presents either, as the case may be, the consolidated financial position of the
Company and its Subsidiaries at the respective dates thereof or the
consolidated results of its operations or changes in financial position for the
period indicated.
(c) Except as and to the extent set forth on the
unaudited trial balance of the Company and its Subsidiaries as of August 31,
1994 (the "Trial Balance"), and except for liabilities with respect to the
transactions contemplated hereby, and except as set forth in Schedule 4.6 of
the Disclosure Schedule, neither the Company nor any of its Subsidiaries has
any liabilities or obligations whether or not accrued, contingent or otherwise
that would be required to be included on a balance sheet prepared in accordance
with generally accepted accounting principles, except for liabilities or
obligations incurred in the ordinary course of business consistent with past
practices since August 31, 1994 (which liabilities or obligations would not,
individually or in the aggregate, have a Material Adverse Effect). The Trial
Balance is subject to adjusting and consolidating and reclassification entries
to properly categorize asset, liability and equity accounts for presentation of
a balance sheet prepared in accordance with generally accepted accounting
principles. Substantially all such required entries were reflected in the
Company's balance sheet included in the Company's quarterly report on SEC Form
10-Q for the quarterly period ending June 30, 1994.
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(d) The Company has heretofore furnished to Purchaser
true and complete copies of all amendments or modifications, which have not yet
been filed with the SEC, to the agreements, documents and other instruments
which previously have been filed by the Company with the SEC pursuant to the
Exchange Act.
SECTION 4.7 Absence of Certain Changes or Events. Since
August 31, 1994, except as contemplated in this Agreement or as disclosed in
Schedule 4.7 of the Disclosure Schedule, (i) there has not been (A) any event
with respect to the Company or any of its Subsidiaries having a Material
Adverse Effect, (B) any change by the Company in its accounting principles or
practices (other than changes required by changes in generally accepted
accounting principles), (C) any declaration, payment or setting aside for
payment of any dividends, or any redemption, purchase or other acquisition of
any securities of the Company, or (D) any revaluation by the Company of any of
its assets, including without limitation any writing down of the value of
inventory or writing off of notes or accounts receivable other than in the
ordinary course of business consistent with past practices, (ii) the Company
and its Subsidiaries have conducted their respective businesses only in the
ordinary course of business consistent with past practices and have not made
any material change in the conduct of the business or operations of the Company
or any of its Subsidiaries, and (iii) the Company has not made any increase in
the compensation payable or to become payable by the Company and its
Subsidiaries to their employees, and the Company has not entered into or made
any increase in any bonus, insurance, pension or other employee benefit plan,
payment or arrangement made to, for or with any such employees, except in the
ordinary course of business consistent with past practices.
SECTION 4.8 Absence of Litigation. Except as disclosed in
the SEC Reports or in Schedule 4.8, Part A of the Disclosure Schedule, there
are no claims, actions, suits, proceedings or investigations pending or, to the
best knowledge of the Company, threatened against the Company or any of its
Subsidiaries, or any properties or rights of the Company or any of its
Subsidiaries, before any court, arbitrator, or administrative, governmental or
regulatory authority or body, domestic or foreign, that, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect. As of the
date hereof, except as disclosed in Schedule 4.8, Part B of the Disclosure
Schedule, none of the Company, its Subsidiaries or any of their respective
properties is subject to any order, writ, judgment, injunction, decree,
determination or award having a Material Adverse Effect.
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SECTION 4.9 Employee Benefit Plans. Schedule 4.9 of the
Disclosure Schedule lists all employee benefit plans (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), and all bonus, stock option, stock purchase, incentive, deferred
compensation, supplemental retirement, severance and other material fringe or
employee benefit plans, programs or arrangements, and any employment or
compensation agreements, written or otherwise, for the benefit of, or relating
to, any employee of the Company or any of its Subsidiaries (the "Employee
Plans"). Except as otherwise disclosed in Schedule 4.9 of the Disclosure
Schedule, none of the Employee Plans is a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA (a "Multiemployer Plan"). There have been no
"prohibited transactions", as such term is defined in Section 406 of ERISA and
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"),
with respect to any Employee Plan. All Employee Plans are in compliance in all
material respects with the requirements prescribed by any and all applicable
statutes, orders or governmental rules or regulations currently in effect with
respect thereto, and the Company and each of its Subsidiaries have performed in
all material respects all obligations required to be performed by them under,
are not in default under or in violation of, and have no knowledge of any
default or violation by any other party to, any of the Employee Plans. Each
Employee Plan intended to qualify under Section 401(a) of the Code has
heretofore been determined by the Internal Revenue Service (the "IRS") to so
qualify, and each trust created thereunder has heretofore been determined by
the IRS to be exempt from tax under the provisions of Section 501(a) of the
Code, and nothing has since occurred which may reasonably be expected to cause
the loss of such qualification or exemption. No Employee Plan subject to Part
3 of Subtitle I of ERISA or Section 412 of the Code has incurred any
"accumulated funding deficiency" (as defined in ERISA or the Code), whether or
not waived. Except as set forth in Schedule 4.9 of the Disclosure Schedule,
with respect to each Employee Plan subject to Title IV of ERISA, no "reportable
event" within the meaning of Section 4043 of ERISA nor any event described in
Section 4062, 4063 or 4041 of ERISA has occurred which could result in
liability to the Company or any of its Subsidiaries. Neither the Company nor
any of its Subsidiaries has incurred or reasonably expects to incur any
liability under Title IV of ERISA with respect to any Employee Plan (other than
a liability for premiums pursuant to Section 4007 of ERISA). All contributions
required to be made to any Employee Plan have been made on or before their due
dates. The Company has no obligation to make payments in respect of retiree
health care or death benefits. With respect to each Employee Plan, the Company
has furnished Purchaser with true and correct copies of (i) such Employee
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Plan, (ii) each summary plan description and summary of material modification,
(iii) the most recently filed IRS Form 5500, and (iv) the most recently
received IRS determination letter.
SECTION 4.10 Labor and Employment Matters.
(a) Except as set forth in Schedule 4.10, Part A of the
Disclosure Schedule, (i) neither the Company nor any of its Subsidiaries is a
party to any collective bargaining agreement or agreement of any kind with any
union or labor organization, (ii) no union or other collective bargaining unit
has been certified or recognized by the Company or any of its Subsidiaries as
representing any employee thereof nor is a union or other collective bargaining
unit seeking recognition for such purpose, (iii) there are no controversies
pending or, to the best knowledge of the Company, threatened between the
Company or any of its Subsidiaries and any labor union or collective bargaining
unit representing, or seeking to represent, any employees of the Company, and
(iv) neither the Company nor any of its Subsidiaries has received notice that
there has been any attempt by any union or other labor organization to organize
any employees of the Company or any of its Subsidiaries at any time since
October 1, 1989. Except as set forth in Schedule 4.10, Part B of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries has
received notice or charges that it has not complied with all its obligations
under the National Labor Relations Act, as amended, Title VII of the Civil
Rights Act of 1964, as amended, the Age Discrimination in Employment Act, as
amended, or any other federal, state and local labor or labor-related laws
applicable to persons employed in connection with the businesses of the Company
or any of its Subsidiaries, including without limitation those laws, rules and
regulations relating to wages, hours, health and safety, payment of social
security withholding and other taxes, maintenance of workers' compensation
insurance, labor and employment relations and employment discrimination.
Except as set forth in Schedule 4.10, Part C of the Disclosure Schedule, the
consent of the unions which are parties to the collective bargaining agreements
of the Company or any of its Subsidiaries is not required to consummate the
transactions contemplated by this Agreement.
(b) Schedule 4.10, Part D of the Disclosure Schedule lists all
material employment, consulting and severance agreements to which the Company
or any of its Subsidiaries is a party with any of their respective employees
and consultants, including any such agreements providing for the payment of
severance or other compensation, or the vesting of options, in the event of a
change in Control of the Company or such Subsidiary.
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SECTION 4.11 Offer Documents, Etc. Neither the Schedule
14D-9, nor any Company Information (as hereinafter defined) contained in the
Offer Documents will, at the respective times the Schedule 14D-9, the Offer
Documents and any amendments thereof or supplements thereto are or were filed
with the SEC or are first published, sent or given to stockholders, as the case
may be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not misleading. For the purposes of this Agreement, the term "Company
Information" means all information with respect to the Company and its
Affiliates provided specifically for use in the Offer Documents or derived from
the SEC Reports. The Schedule 14D-9 will comply in all material respects as to
form with the requirements of the Exchange Act and the rules and regulations
thereunder.
SECTION 4.12 Taxes. Except as disclosed in Schedule 4.12 of
the Disclosure Schedule, each of the Company and each of its Subsidiaries has
timely filed all tax returns and reports, including information returns and
reports, required to be filed by it. Except as disclosed in the SEC Reports,
each of the Company and each of its Subsidiaries has timely paid, or has timely
withheld and paid over, to the proper authority (or the Company has paid, or
withheld and paid over, on its behalf) all Taxes (as hereinafter defined)
required to be paid or withheld by it, and the Trial Balance reflects an
adequate reserve for all Taxes payable by the Company and its Subsidiaries for
all taxable periods and portions thereof through September 30, 1994. Except as
disclosed in the SEC Reports or in Schedule 4.12 of the Disclosure Schedule, no
deficiencies for any Taxes have been proposed, asserted or assessed against the
Company or any of its Subsidiaries, and no requests for waivers of the time to
assess any such Taxes have been granted or are pending. The Company's Federal
income tax returns for all periods through September 30, 1986, have been
accepted by the IRS. The statute of limitations has expired with respect to
the Company's fiscal years ended 1987 through 1990. Except as disclosed in
Schedule 4.12, the "Deferred Taxes" as shown in the Trial Balance represents an
adequate reserve for all amounts of income realized but not recognized prior to
the date thereof by the Company and its Subsidiaries whether by reason of the
use of any method of accounting (including the installment method), the
existence of deferred intercompany transactions or otherwise, which are
required to be reserved in accordance with generally accepted accounting
principles. (As used in this Agreement, the term "Taxes" includes all Federal,
state, local and foreign income, property, sales, excise and other taxes or
similar charges of any nature
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whatsoever, including any interest, penalties and additions to tax.)
SECTION 4.13 Environmental. Except as disclosed by the
environmental audits and reports listed in Schedule 4.13, Part A of the
Disclosure Schedule, copies of which have heretofore been delivered to
Purchaser, or in Schedule 4.13, Part B, Schedule 4.13, Part C and Schedule
4.13, Part D of the Disclosure Schedule, each of the representations and
warranties set forth in paragraphs (a) through (g) of this Section 4.13 is true
and correct with respect to each parcel of real property owned, leased,
operated or used by the Company or any Subsidiary or Affiliate of the Company
or any predecessor of any of the foregoing Persons if any of the foregoing
Persons may have liability as a result thereof (the "Properties"), except as
circumstances giving rise to any such failure to be so true and correct would
not have a Material Adverse Effect:
(a) The Properties do not contain, and have not
previously contained, therein, thereon or thereunder, including
without limitation the soil and groundwater thereunder, any Hazardous
Materials (as hereinafter defined) in concentrations which violate
Environmental Laws (as hereinafter defined).
(b) The Properties, and all operations and facilities at
the Properties, are in compliance with all Environmental Laws, and
there is no Hazardous Materials contamination or violation of any
Environmental Law that would interfere with the continued operation of
any of the Properties or impair the fair saleable value thereof.
(c) Neither the Company nor any of its Subsidiaries has
received any written complaint, or notice of violation, alleged
violation, investigation, advisory action, potential liability or
potential responsibility regarding environmental protection matters or
compliance with any permit with regard to the Properties, nor to the
best knowledge of the Company is any governmental authority
contemplating delivering to the Company or any of its Subsidiaries any
such notice.
(d) Except in compliance with Environmental Laws,
Hazardous Materials have not been generated, released, treated, stored
or disposed of at, on or under any of the Properties, nor have any
Hazardous Materials been transferred from the Properties to any other
location.
(e) There are no governmental, administrative or judicial
actions or proceedings pending or to the best
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knowledge of the Company contemplated under any Environmental Laws to which the
Company or any of the Subsidiaries is or will be named as a party with respect
to the Properties, nor are there any consent decrees, other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements, outstanding under any Environmental Law with respect to
any of the Properties.
(f) Except as disclosed in Schedule 4.13, Part C, there
are no underground storage tanks located on the Properties.
(g) Except as disclosed in Section 4.13, Part D, there
are no claims associated with any underground storage tanks previously
located on the Properties.
For the purposes of this Agreement the following terms have the following
meanings: (i) "Environmental Laws" means any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees or requirements of any governmental authority regulating, relating to
or imposing liability or standards of conduct concerning public or occupational
health and safety, the environment or any Hazardous Material as now in effect
and applied, or as in effect and applied at the time the event occurred which
gave rise to the alleged violation, as the case may be, and (ii) "Hazardous
Materials" means (A) petroleum and petroleum products, radioactive materials,
asbestos in any form that is or could become friable, transformers or other
equipment that contained polychlorinated biphenyls, and radon gas, (B) any
other chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants," "contaminants" or "pollutants," or words of
similar import, under any applicable Environmental Law, and (C) any other
chemical, material or substance exposure to which is regulated by any
governmental authority.
SECTION 4.14 Brokers. No broker, finder or investment banker
(other than Smith Barney and Laurence Geller/Geller and Co.) is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by and
on behalf of the Company or any of its Subsidiaries. The Company has
heretofore furnished or made available to Purchaser a complete and correct copy
of all agreements between the Company and Smith Barney and the Company and
Laurence Geller/Geller and Co. pursuant to which such firms would be
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entitled to any payment relating to the transactions contemplated by this
Agreement.
SECTION 4.15 Breaches, Violations and Defaults. Except as
set forth on Schedule 4.15 of the Disclosure Schedule, or except where any of
the following described events or occurrences would not reasonably be expected
to have a Material Adverse Effect, neither the Company nor any of its
Subsidiaries is (a) in breach of or default under, nor has an event occurred
which, with notice or lapse of time or both, would become a default under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of an Encumbrance on any of the
properties or assets of the Company or any of its Subsidiaries pursuant to, (i)
any note, bond, mortgage, indenture or other evidence of indebtedness, (ii) any
contract, service agreement, lease, license or permit, or (iii) any franchise
instrument or obligation related thereto, in each case to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any of its or any of their respective properties may be bound
or affected, or (b) in violation of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award applicable to the Company
or any of its Subsidiaries or by which any of its or any of their respective
properties are bound or affected.
ARTICLE V
CONDUCT OF BUSINESS PENDING COMPLETION OF THE MERGER
SECTION 5.1 Conduct of Business by the Company Pending the
Merger. Between the date of this Agreement and the Effective Time, except as
otherwise provided in this Agreement or unless Purchaser shall otherwise agree
in writing, the businesses of the Company and its Subsidiaries will be
conducted only in, and the Company and its Subsidiaries will not take any
action except in, the ordinary course of business consistent with past
practices. The Company further will (i) use its reasonable best efforts to (A)
preserve substantially intact the business organization of the Company and its
Subsidiaries, (B) keep available the services of the present officers,
employees and consultants of the Company and its Subsidiaries, and (C) preserve
the present relationships of the Company and its Subsidiaries with customers,
suppliers and other Persons with which the Company or any of its Subsidiaries
has significant business relations, (ii) continue in full force and effect
without material modification all existing policies or binders of insurance
currently maintained in respect of the Company and each of its Subsidiaries and
their respective assets, and (iii) pay, and cause each of
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its Subsidiaries to pay, its indebtedness and otherwise discharge its
liabilities punctually when and as the same becomes due and payable and perform
and observe, and to cause each of its Subsidiaries to perform and observe, its
duties and obligations under its material contracts.
By way of amplification and not in limitation of the
foregoing, and, except as expressly contemplated by this Agreement, neither the
Company nor any of its Subsidiaries will, between the date of this Agreement
and the Effective Time, directly or indirectly, do, or propose to do, any of
the following without the prior written consent of Purchaser:
(i) amend or otherwise change its Certificate of
Incorporation or By-Laws or equivalent organizational
documents;
(ii) issue, sell, pledge, dispose of, encumber, or
authorize the issuance, sale, pledge, disposition or
encumbrance of, (A) any shares of capital stock of any class,
or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of capital stock, or
any other ownership interests, of the Company or any of its
Subsidiaries, except for the issuance of shares pursuant to
the options, warrants, or other rights or arrangements set
forth in Schedule 4.3, Part A of the Disclosure Schedule, or
(B) any assets of the Company or any of its Subsidiaries,
except for the disposition of the assets and properties listed
in Schedule 5.1, Part A of the Disclosure Schedule and except
for the sale of non-material assets in the ordinary course of
business consistent with past practices;
(iii) declare, set aside, make or pay any dividend
or other distribution, payable in cash, stock, property or
otherwise, with respect to any of its capital stock;
(iv) reclassify, combine, split, subdivide or
redeem, purchase or otherwise acquire, directly or indirectly,
any of its capital stock;
(v) (A) acquire (by merger, consolidation or
acquisition of stock or assets) any corporation, partnership
or other business organization or division thereof; (B) incur
any indebtedness or issue any debt securities or assume,
guarantee or endorse or otherwise as an accommodation or
become responsible for, the obligations of any Person, or make
any loans or advances; (C) except for the
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contracts and agreements set forth in Schedule 5.1, Part B of
the Disclosure Schedule, enter into any contract or agreement
and except for those non-material contracts and agreements
entered into in the ordinary course of business consistent
with past practices; (D) except as set forth in Schedule 5.1,
Part C of the Disclosure Schedule, authorize new capital
expenditures, other than expenditures incurred in the ordinary
course of business consistent with past practices or is
required by the direction or acts of a franchisor and
expenditures required by governmental direction; or (E) except
as set forth in Schedule 5.1, Part D of the Disclosure
Schedule, amend any contract, agreement, commitment or
arrangement with respect to any of the matters set forth in
this Section 5.1(v);
(vi) except as set forth in Schedule 5.1, Part E,
or as may be necessary to comply with applicable law, increase
the compensation payable or to become payable to, or grant or
pay any severance or termination pay to, the officers or
employees of the Company or its Subsidiaries, except for
increases in salary or wages of employees of the Company or
its Subsidiaries in accordance with existing policies or past
practice, and except pursuant to the terms of contracts,
policies or benefit arrangements in effect on the date hereof,
enter into any employment or severance agreement with, any
director, officer or other employee of the Company or any of
its Subsidiaries, or establish, adopt, enter into or amend any
bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation,
termination severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any of the directors,
officers or employees of the Company or its Subsidiaries;
(vii) take any action other than in the ordinary
course of business consistent with past practices (none of
which actions shall be unreasonable or unusual) with respect
to accounting policies or procedures (including without
limitation procedures with respect to the payment of accounts
payable and collection of accounts receivable);
(viii) make any Tax election or settle or
compromise any Tax liability; or
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(ix) pay, discharge or satisfy any claim,
liability or obligation (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction of the same in the ordinary course
of business consistent with past practices (including payment
of the Company's liabilities in accordance with their terms).
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 Proxy Statement. Following the completion of the
Offer and if required by the Exchange Act, the Company will as promptly as
practicable prepare and file with the SEC a preliminary proxy statement,
related proxy materials and any other information statements or reports that
may be required by applicable law (collectively, and, together with any
amendments or supplements thereto, the "Proxy Statement") to be used in
soliciting proxies of the stockholders of the Company in connection with the
United Stockholders' Meeting (as hereinafter defined) or in respect of the
Merger. The Proxy Statement will contain the recommendation of the Board of
Directors of the Company as then constituted substantially to the effect that
stockholders vote in favor of the Merger and the approval and adoption of this
Agreement. The Company will use reasonable efforts to respond to any comments
of the SEC or its staff and have the Proxy Statement cleared by the SEC and to
cause a definitive Proxy Statement to be mailed to the stockholders of the
Company as soon as practicable thereafter. Each party hereto represents and
warrants to the other that the information supplied in writing by such party
specifically for inclusion in the Proxy Statement, at the time first mailed,
the time of the United Stockholders' Meeting and at the Effective Time, will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of circumstances under which they were made, not misleading.
Each party hereto will promptly notify the other party hereto if at any time
before the Effective Time it becomes aware (i) that the Proxy Statement
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they were made,
not misleading or (ii) that an event shall have occurred that should be set
forth in an amendment or a supplement to the Proxy Statement. In such event,
the Company will prepare a supplement correcting such misstatement or omission,
and will cause the same to be
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filed with the SEC and distributed to the stockholders of the Company. The
Company will pay all fees, costs and expenses of the preparation, filing and
clearance of the Proxy Statement and all other costs and expenses relating to
the solicitation of proxies and the United Stockholders' Meeting.
SECTION 6.2 Meeting of Stockholders of the Company. If
required following the completion of the Offer, the Company will promptly take
all action necessary in accordance with the Delaware Law and its Certificate of
Incorporation and By-Laws to duly call, give notice of, convene and hold a
meeting of its Stockholders (the "United Stockholders' Meeting") to consider
and vote upon the approval and adoption of the Merger. The Company will use
its best efforts to solicit from the stockholders of the Company proxies in
favor of the Merger and the adoption of this Agreement and will take all other
action necessary or advisable to secure the vote or consent of stockholders
required by the Delaware Law to effect the Merger and the other transactions
contemplated hereby. Purchaser agrees to cause all Shares purchased pursuant
to the Offer and all other Shares owned by Purchaser or any Affiliate thereof
to be voted in favor of the approval of the Merger.
SECTION 6.3 Access to Information.
(a) From the date hereof to the Effective Time, the
Company will, and will cause its Subsidiaries, officers, directors, employees,
auditors and agents to, afford the officers, employees and agents of Purchaser
reasonable access to its officers, employees, agents, properties, offices,
plants, other facilities and to all books and records, and will furnish
Purchaser with all financial, operating and other data and information as
Purchaser, through its officers, employees or agents, may reasonably request.
(b) Purchaser will comply with the provisions with
respect to confidentiality set forth in the letter agreement, dated July 14,
1994, between the Company and Hampstead Investments, Inc., as if it were a
party thereto.
(c) No investigation pursuant to this Section 6.3 or
otherwise will affect any representations or warranties of the parties herein
or the conditions to the obligations of the parties hereto.
SECTION 6.4 No Solicitation of Transactions.
(a) The Company represents and warrants that, on
November 4, 1994 it ceased and caused to be terminated any
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existing negotiations, or prior negotiations with any Person previously
conducted, with respect to a business combination with the Company or a change
in control of the Company (a "Change in Control Transaction"). From and after
the execution and delivery of this Agreement, the Company will not, and will
cause its Affiliates and its or their representatives not to, solicit any
offers from any Person in respect of, or, except as provided in Section 6.4(b),
engage in any negotiations relating to or provide any information in respect
of, any Change of Control Transaction.
(b) (i) In the event that, after execution of this
Agreement, any Person, other than a Person who participated in the process
pursuant to which the Company selected the Purchaser to make the Offer and
effect the Merger ["Prior Person"] publicly announces or notifies the Company
in writing that it intends to commence a tender or exchange offer to purchase
Shares on financial and legal terms which the Board of Directors of the Company
determines, based upon advice from the Company's independent financial and
legal advisors, are more favorable to the Company than those contemplated by
this Agreement (an "Unsolicited Proposal"), the Company will notify Purchaser
in writing of each such Unsolicited Proposal. Such notice ("Proposal Notice")
will state the terms and conditions of such Unsolicited Proposal and the
identity of the Person making it (together with a copy of such Unsolicited
Proposal) by 5:00 p.m. Eastern Time on the business day next following the
business day on which it receives notice of the Unsolicited Proposal. If the
Board of Directors of the Company determines, based upon advice from the
Company's independent legal advisors, that its fiduciary duties under
applicable law require that the Company commence negotiations with respect to
such Unsolicited Proposal or furnish information in respect thereof (which
determination shall be made promptly after receipt of the Unsolicited Proposal,
and which determination shall be communicated to Purchaser by facsimile
transmission prior to commencement of such negotiations), Purchaser will have
the option to terminate the Agreement, whereupon Purchaser will be entitled to
its expenses as provided in Section 8.3(b) and the applicable termination fee
as provided in Section 8.3(c). If Purchaser elects to so terminate this
Agreement, Purchaser will, as soon as practicable, advise the Company of such
election by delivery of a facsimile transmission; and (ii) in the event that,
after the execution of this Agreement, a Prior Person makes an Unsolicited
Proposal, the Company will (A) send a Proposal Notice to the Purchaser as set
forth above and (B) not make a positive recommendation to its stockholders with
respect to such Unsolicited Proposal.
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SECTION 6.5 Notification of Certain Matters. From the date
hereof until the Effective Time, the Company will give prompt notice to
Purchaser, and Purchaser for itself and on behalf of New Parent and Merger Sub,
will give prompt notice to the Company, of (i) the occurrence or nonoccurrence
of any event the occurrence or nonoccurrence of which would be likely to cause
any representation or warranty of the Company, or Purchaser, New Parent and
Merger Sub, as the case may be, contained in this Agreement to be
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untrue or inaccurate in any material respect (or, with respect to those
representations or warranties qualified by Material Adverse Effect, in any
respect) at or prior to the Effective Time and (ii) any failure of the Company,
or Purchaser, New Parent, and Merger Sub, as the case may be, to comply with or
satisfy in all material respects any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 6.5 will not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
SECTION 6.6 Further Action. On the terms and subject to the
conditions hereof, each of the parties hereto will use its reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all other things, necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement and to obtain in a timely manner all necessary waivers, consents and
approvals and to effect all necessary registrations and filings.
SECTION 6.7 Public Announcements. From the date hereof until
the Effective Time, Purchaser and the Company will consult with each other
before issuing any press release or otherwise making any public statements with
respect to the transactions contemplated by this Agreement and will not issue
any such press release or make any such public statement prior to such
consultation or without the consent of the other, unless such party has been
advised by counsel that it is required by law to do so.
SECTION 6.8 HSR Act. Purchaser and the Company will, as soon
as practicable after the date of this Agreement, but in no event later than
five business days after the date of this Agreement, file Notification and
Report Forms under the HSR Act with the Federal Trade Commission and the
Antitrust Division of the Department of Justice and will use their respective
reasonable best efforts to respond as promptly as practicable to all inquiries
received from such agencies for additional information or documentation.
Purchaser will pay all filing fees required to be paid in connection with all
such filings made by the parties under the HSR Act.
SECTION 6.9 Other Authorizations; Notices and Consents.
(a) Each party hereto will use its reasonable best
efforts to obtain (or cause its Subsidiaries to obtain) all authorizations,
consents, orders, licenses, permits and approvals of all governmental
authorities and officials and third parties that may be or become necessary for
its
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execution and delivery of, and the performance of its obligations pursuant to,
this Agreement, and the parties hereto will cooperate fully with each other in
promptly seeking to obtain all such authorizations, consents, orders and
approvals.
(b) The Company will and will cause its Subsidiaries to
use all reasonable best efforts to give such notices to third parties and use
all reasonable best efforts to obtain such third party consents, licenses or
permits as Purchaser may reasonably deem necessary or desirable in connection
with the transactions contemplated by this Agreement.
SECTION 6.10 Board Attendance. From the date hereof to the
date on which designees of Purchaser first become directors of the Company
pursuant to Section 1.3, the Company will notify Purchaser at least 48 hours
(or, if shorter, when a general notice is given pursuant to the By-Laws of the
Company) in advance of every meeting of the Board of Directors of the Company
(or any committee thereof) and will permit a representative of Purchaser to
attend, as an observer, each such meeting (including, at the option of
Purchaser, by telephone); provided that, if the Chairman in his sole
discretion, requests such representative to leave the meeting, such
representative shall immediately do so.
SECTION 6.11 Indemnification and Insurance.
(a) The Certificate of Incorporation of the Surviving
Corporation will contain the provisions with respect to limitation of liability
of directors set forth in Annex III hereto, and the By-Laws of the Surviving
Corporation will contain the provisions with respect to indemnification set
forth in Annex III hereto, and such provisions will not be amended, repealed,
contradicted by any other provision of such Certificate of Incorporation or
By-Laws or otherwise modified for a period of seven years from the Effective
Time in any manner that would adversely affect the rights thereunder of
individuals who at the time of execution and delivery of this Agreement were
directors, officers, employees or agents of the Company, unless such
modification is required by a change in applicable law.
(b) The Company will, to the fullest extent permitted
under applicable law or under the Company's Certificate of Incorporation or
By-Laws or pursuant to Directors/Officers Indemnification Agreements previously
entered into and in effect on the date hereof ("Indemnification Agreements")
and regardless of whether the Merger becomes effective, indemnify and hold
harmless, and after the Effective Time, the Surviving Corporation will, to the
fullest extent permitted under applicable law or under
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the Surviving Corporation's Certificate of Incorporation or By-Laws, indemnify
and hold harmless, each present and former director, officer, employee,
fiduciary and agent of the Company or any of its Subsidiaries (collectively,
the "Indemnified Persons") against any costs or expenses (including attorneys'
fees), judgments, fines, losses, claims, damages, liabilities and amounts paid
in settlement in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative,
arising out of or pertaining to any action or omission occurring prior to the
Effective Time (including without limitation any claim, action, suit,
proceeding or investigation arising out of or pertaining to the transactions
contemplated by this Agreement) for a period of seven years after the date
hereof and in the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i) the
Company or the Surviving Corporation, as the case may be, will pay the
reasonable fees and expenses of counsel selected by the Indemnified Persons,
which counsel shall be reasonably satisfactory to the Company or the Surviving
Corporation, promptly after statements therefor are received, (ii) the Company
and the Surviving Corporation will cooperate in the defense of any such matter,
and (iii) any determination required to be made with respect to whether an
Indemnified Persons' conduct complies with the standards set forth under the
Delaware Law and the Company's or the Surviving Corporation's Certificate of
Incorporation or By-Laws will be made by independent counsel mutually
acceptable to the Surviving Corporation and the Indemnified Person; provided,
however, that neither the Company nor the Surviving Corporation will be liable
for any settlement effected without its written consent (which consent will not
be unreasonably withheld) and provided further that, in the event any claim or
claims for indemnification are asserted or made within such seven-year period,
all rights to indemnification in respect of any such claim or claims will
continue until the disposition of any and all such claims.
(c) Notwithstanding anything to the contrary contained
herein, if (a) an Indemnified Person elects to retain counsel in connection
with any claim, action, suit, preceding or investigation in respect of which
indemnification may be sought by the Indemnified Person against the Surviving
Corporation pursuant to this Agreement and (b) any other Indemnified Person may
also be subject to liability arising out of such claim, action, suit, preceding
or investigation and in connection with such claim, action, suit, preceding or
investigation may seek indemnification against the Company pursuant to this
Agreement, all such Indemnified Persons will employ counsel to represent
jointly such Indemnified Persons unless the Board of Directors of the Surviving
Corporation, upon the written request of an
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Indemnified Person delivered to the Surviving Corporation (to the attention of
the Secretary) setting forth in reasonable detail the basis for such request,
determines that such joint representation would be precluded under the
applicable standards of professional conduct then prevailing under the law of
the State of Delaware, in which case such Indemnified Person will be entitled
to be represented by separate counsel. In the event that the Board or
Directors of the Surviving Corporation fails to act on such request within 30
calendar days after receipt thereof by the Surviving Corporation, the
Indemnified Person will be deemed to be entitled to be represented by separate
counsel in connection with such claim, action, suit, preceding or
investigation.
(d) For five years from the Effective Time, the Surviving
Corporation will maintain in effect, if available, directors' and officers'
liability insurance substantially comparable in scope and coverage to the
Company's current directors' and officers' liability insurance policy (a copy
of which has been heretofore delivered to New Parent) covering those Persons
who are presently covered by such current policy to the extent that the cost
thereof does not exceed $177,840 per annum; provided, however, that in the
event such cost would exceed $177,840 per annum, the Surviving Corporation will
obtain such coverage of the nature described above as may be obtained through
the expenditure of such amount for each such year.
(e) In the event any action, suit, proceeding or
investigation relating hereto or to the transactions contemplated hereby is
commenced, whether before or after the Effective Time, the parties hereto agree
to cooperate and use their best efforts to defend against and respond thereto.
SECTION 6.12 Benefit Plans.
(a) Except as provided in Section 6.12(c), the Surviving
Corporation will pay, in accordance with their terms as in effect on the date
hereof, all amounts which are or become due and payable under the terms of all
written employment, severance and termination contracts, agreements, plans,
policies and commitments of the Company and its Subsidiaries with or with
respect to its current or former employees, officers and directors as described
in the SEC Documents or as otherwise disclosed in writing to Purchaser on or
prior to the date hereof.
(b) The Surviving Corporation will maintain for a period
of not less than one year after the Effective Time Employee Plans in effect on
the date of this Agreement or
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provide benefits to employees of the Surviving Corporation who were employees
of the Company and its Subsidiaries immediately prior to the Effective Time
("United Employees") that are at least substantially comparable to the benefits
provided to similarly situated employees of the Surviving Corporation who are
not United Employees.
(c) From the date hereof and until the Effective Time,
the Company will use reasonable efforts to enter into employment contracts,
effective not later than the Effective Time, with those persons identified by
New Parent to the Company on or before December 1, 1994, on terms to be agreed
upon. The Company will condition its obligations under each such contract upon
the agreement of the employee party thereto to cancel any severance or
termination agreement between the Company and such employee in effect on the
date hereof.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Indemnification of Purchaser. Subject to the
terms of this Article VII, the Company will indemnify and hold harmless each of
Purchaser and its Affiliates (including without limitation New Parent and
Merger Sub), and their respective partners, officers, directors, employees,
agents and controlling persons (collectively, "Indemnified Parties") from and
against any loss, damage or expense, including without limitation reasonable
attorneys' and accountants' fees (each such individual occurrence is
hereinafter referred to as a "Loss" and collectively, as "Losses") suffered by
any Indemnified Party, (a) directly or indirectly, as a result of any action,
suit, proceeding or investigation which, in whole or in part, is based upon,
relates to or results from this Agreement or any of the transactions
contemplated hereby, except to the extent that it is finally judicially
determined by a court of competent jurisdiction that the Loss in question
resulted from a breach by Purchaser of any of the representations, warranties
or covenants of the Purchaser set forth in this Agreement, or (b) from and
after the Effective Time, or, if applicable, the termination of this Agreement,
directly or indirectly, as a result of any inaccuracy in or breach of any of
the representations, warranties or covenants of the Company set forth in this
Agreement.
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SECTION 7.2 Procedure for Claims.
(a) Notice of Claim. After obtaining knowledge of any
claim or demand which has given rise to, or could reasonably give rise to, a
claim for indemnification under this Article VII (referred to herein as an
"Indemnification Claim"), an Indemnified Party shall give written notice to the
party obligated to provide indemnification pursuant to this Article VII (the
"Indemnitor") of such Indemnification Claim ("Notice of Claim"). A Notice of
Claim shall be given with respect to each Indemnification Claim; provided,
however, that the failure to give Notice of Claim to the Indemnitor will
relieve the Indemnitor from its liability hereunder only if, and to the extent
that, such failure results in the forfeiture by the Indemnitor of substantial
rights and defenses. If reasonably practicable, the Notice of Claim shall set
forth the amount (or a reasonable estimate) of the Loss or Losses suffered, or
which may be suffered, by an Indemnified Party as a result of such
Indemnification Claim. The Indemnified Party shall furnish to the Indemnitor
such information (in reasonable detail) it may have with respect to such
Indemnification Claim (including copies of any summons, complaint or other
pleading which may have been served on it and any written claim, demand,
invoice, billing or other document evidencing or asserting the same).
(b) Third Party Claims.
(i) If the claim or demand set forth in the
Notice of Claim is a claim or demand asserted by a third party (a "Third Party
Claim"), the Indemnitor shall have 15 days after the date of receipt by the
Indemnitor of the Notice of Claim (the "Notice Date") to notify the Indemnified
Parties in writing of the election by the Indemnitor to defend the Third Party
Claim on behalf of the Indemnified Parties.
(ii) If the Indemnitor elects to defend a Third
Party Claim on behalf of the Indemnified Parties, the Indemnified Parties shall
make available to the Indemnitor and its agents and representatives all records
and other materials in their possession which are reasonably required in the
defense of the Third Party Claim and the Indemnitor shall pay all expenses
payable in connection with the defense of the Third Party Claim as they are
incurred.
(iii) In no event may the Indemnitor settle or
compromise any Third Party Claim without the Indemnified Parties' consent,
which shall not be unreasonably withheld; provided, however, that if a
settlement is presented by the Indemnitor to the Indemnified Parties for
approval and the Indemnified Parties withhold their consent thereto, then any
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amount by which the final Losses (including reasonable attorneys' fees)
resulting from the resolution of the matter exceeds the rejected settlement
amount, plus attorneys' fees incurred to such date, shall be excluded from the
amount covered by the indemnification provided for in this Agreement and shall
be borne by the Indemnified Parties.
(iv) If the Indemnitor elects to defend a Third
Party Claim, the Indemnified Parties shall have the right to participate in the
defense of the Third Party Claim, at the Indemnified Parties' expense (and
without the right to indemnification for such expense under this Agreement);
provided, however, that the reasonable fees and expenses of counsel retained by
the Indemnified Parties shall be at the expense of the Indemnitor if (A) the
use of the counsel chosen by the Indemnitor to represent the Indemnified
Parties would present such counsel with a conflict of interest; (B) the parties
to such proceeding include both Indemnified Parties and the Indemnitor and
there may be legal defenses available to Indemnified Parties which are
different from or additional to those available by the Indemnitor; or (C) the
Indemnitor shall authorize the Indemnified Parties to retain a single separate
counsel at the expense of the Indemnitor.
(v) If the Indemnitor does not elect to defend a
Third Party Claim, or does not defend a Third Party Claim in good faith, the
Indemnified Parties shall have the right, in addition to any other right or
remedy it may have hereunder, at the sole and exclusive expense of the
Indemnitor, to defend such Third Party Claim.
(c) Cooperation in Defense. The Indemnified Parties
shall cooperate with the Indemnitor in the defense of a Third Party Claim and
make reasonably available the facts relating to the Third Party Claim. Subject
to the foregoing, (A) no Indemnified Party shall have any obligation to
participate in the defense of or to defend any Third Party Claim, and (B) no
Indemnified Parties' defense or of their participation in the defense of any
Third Party Claim shall in any way diminish or lessen their right to
indemnification as provided in this Agreement.
SECTION 7.3 Indemnification of the Company. From and after
the Effective Time, or, if applicable, the termination of this Agreement,
Purchaser, New Parent and Merger Sub will indemnify and hold harmless the
Company and its current and future officers, directors, employees and agents
from and against damage or expense (including without limitation reasonable
attorneys' and accountants' fees) suffered by any of them as a result of any
inaccuracy in or breach of any of the representations, warranties or covenants
made by Purchaser, New Parent or Merger Sub under
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this Agreement or the Merger Agreement. The procedures for indemnification in
respect of the obligations of Purchaser under this Section 7.3 will be the same
as those set forth in Section 7.2.
ARTICLE VIII-A
CONDITIONS OF MERGER
SECTION 8A.1 Conditions to Obligations of Each Party. The
respective obligations of each party to effect or cause to be effected the
Merger will be subject to the satisfaction or waiver at or prior to the
Effective Time of each of the following conditions:
(a) Offer. The Offer shall have been consummated.
(b) Stockholder Approval. This Agreement shall have been
adopted by the requisite vote of the stockholders of the Company if
required by applicable law.
(c) HSR Act. Any waiting period (and any extension
thereof) applicable to the consummation of the Merger under the HSR
Act shall have expired or been terminated.
(d) No Order. No United States or state governmental
authority or other agency or commission or United States or state
court of jurisdiction shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, writ, injunction or
other order (whether temporary, preliminary or permanent) which is in
effect and has the effect of making the Merger or the Offer illegal or
otherwise prohibiting consummation of the transactions contemplated
hereby.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination. This Agreement may be terminated at
any time prior to the Effective Time:
(a) By mutual consent of Purchaser, New Parent and the
Boards of Directors of Merger Sub and the Company; or
(b) By either Purchaser or the Company if (i) the Merger
shall not have been consummated by March 31, 1995; provided, however, that the
right to terminate this Agreement under this Section 8.1(b) shall not effect a
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rescission of the purchase of the Shares pursuant to the Offer and shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Merger to
occur on or before such date or (ii) a court of competent jurisdiction or
governmental, regulatory or administrative agency or commission shall have
issued an order, decree or ruling or taken any other action (which order,
decree, ruling or other action the parties hereto shall use their best efforts
to vacate), in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement; or
(c) By Purchaser if (i) due to an occurrence that would
result in a failure to satisfy any of the conditions set forth in Annex I
hereto, and only in the event of such occurrence, Purchaser shall have (A)
failed to commence the Offer within 30 days of the date hereof, (B) terminated
the Offer, or (C) failed to pay for Shares pursuant to the Offer within 180
days after the commencement of the Offer, or (ii) prior to the purchase of
Shares pursuant to the Offer, the Company's Board of Directors shall have
withdrawn or modified in a manner adverse to Purchaser its approval or
recommendation of the Offer, or the Merger or shall have recommended another
offer or transaction; or
(d) By the Company if (i) due to an occurrence that would
result in a failure to satisfy any of the conditions set forth in Annex I
hereto, and only in the event of such occurrence, Purchaser shall have (A)
failed to commence the Offer within 30 days of the date hereof, (B) terminated
the Offer, or (C) failed to pay for Shares pursuant to the Offer within 180
days after commencement of the Offer, or (ii) prior to the purchase of Shares
pursuant to the Offer, the Company's Board of Directors shall have withdrawn
its recommendation to the Company's stockholders to accept the Offer and shall
have recommended another offer or transaction, provided that, the Company shall
not recommend another Offer or transaction if such Offer is made by or such
transaction is to be with a Prior Person, and accordingly, may not terminate
this Agreement pursuant to this Section 8.1(d) under such circumstances; or
(e) By Purchaser as provided in Section 6.4(b).
SECTION 8.2 Effect of Termination. In the event of the
termination of this Agreement as provided in Section 8.1, this Agreement will
forthwith become null and void and there shall be no liability on the part of
any party hereto except that (A) Article VII and Sections 8.3 and 9.1 will
remain in full force and effect and (B) nothing herein will relieve any party
from liability for any wilful breach hereof.
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SECTION 8.3 Fees and Expenses.
(a) All reasonable out-of-pocket fees, costs and expenses
incurred in connection with the Offer, this Agreement, and the transactions
contemplated hereby (including, without limitation, fees paid by Purchaser
pursuant to Section 6.8) will be paid or reimbursed by the Company, provided
that, except as provided in Sections 8.3(b) and 8.3(c), each party will pay its
own fees, costs and expenses in the event that the Offer is not consummated.
(b) The Company will pay or reimburse to Purchaser an
amount equal to the sum of all reasonable documented fees (including, without
limitation, fees paid by Purchaser pursuant to Section 6.8), costs and expenses
in an amount not to exceed $1,000,000 incurred by Purchaser and its Affiliates
in connection with this Agreement and the transactions contemplated hereby
subsequent to October 26, 1994, immediately upon the first to occur of: (i)
prior to the acceptance for payment of Shares pursuant to the Offer, the
Company's Board of Directors (A) having withdrawn or modified in a manner
adverse to Purchaser its approval or recommendation of the Offer or (B) having
recommended another offer or transaction; (ii) the Company having (A) failed to
perform or comply with in any material respect any obligation or covenant
required by this Agreement to be performed or complied with by it or (B)
breached any representation or warranty of the Company set forth in this
Agreement in any material respect (or with respect to those representations and
warranties qualified by Material Adverse Effect, in any respect); or (iii) if
this Agreement is terminated pursuant to Section 8.1(e); provided that no
payment shall be made to Purchaser under this Section 8.3(b) if Purchaser, New
Parent or Merger Sub, as the case may be, shall have (A) failed to perform or
comply with in any material respect any obligation or covenant required by this
Agreement to be performed or complied with by it or (B) breached any
representation or warranty of it set forth in this Agreement in any material
respect (or with respect to those representations and warranties qualified by
material adverse effect, in any respect).
(c) The Company will pay to Purchaser immediately upon
termination of this Agreement pursuant to Sections 8.1(c)(ii), 8.1(d)(ii) or
8.1(e), an amount equal to $1,000,000 if such termination occurs on or before
November 30, 1994, and an amount equal to $1,500,000 if such termination occurs
after November 30, 1994; and the parties hereto agree that the amount to be
paid pursuant to Section 8.3(b) and this Section 8.3(c) shall be the exclusive
remedies of Purchaser in connection with any such termination.
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SECTION 8.4 Amendment. This Agreement may be amended only by
action taken by Purchaser, New Parent and the Boards of Directors of Company
and Merger Sub at any time before or after approval of this Agreement and by
the stockholders of the Company (if required by applicable law).
SECTION 8.5 Waiver. Any party hereto may (a) extend the time
for the performance of any of the obligations or other acts of the other
parties hereto, (b) waive any inaccuracies in the representations and
warranties of the other parties contained herein, and (c) waive compliance with
any of the agreements or conditions of the other parties contained herein. Any
such extension or waiver shall be valid if set forth in an instrument in
writing signed by the party or parties to be bound thereby. Any waiver of any
term or condition shall not be construed as a waiver of any subsequent breach
or a subsequent waiver of the same term or condition, or a waiver of any other
term or condition, of this Agreement. The failure of any party to assert any
of its rights hereunder shall not constitute a waiver of any of such rights.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Survival of Representations, Warranties and
Covenants.
(a) Each of the representations and warranties contained
in this Agreement will survive the Effective Time and remain in full force and
effect until the sixth anniversary thereof. Any claim for indemnification
asserted under Article VII within such period of survival will be timely made
for purposes hereof.
(b) Unless a specified period is set forth in this
Agreement (in which event such specified period will control), the covenants
contained in this Agreement will survive the Effective Time and remain in
effect indefinitely.
SECTION 9.2 Notices. All notices and other communications
given or made pursuant hereto will be in writing and will be deemed to have
been duly given or made as of the date delivered or mailed if delivered
personally or mailed by registered or certified mail (postage prepaid, return
receipt requested), or transmitted by confirmed facsimile, to the parties at
the following addresses or facsimile numbers, as the case may be, or at such
other address or facsimile number for a party as shall be
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specified by like notice, except that notices of changes of address or
facsimile number shall be effective upon receipt:
(a) if to Purchaser, New Parent or Merger Sub:
UNITED/HARVEY HOLDINGS, L.P.
4200 Texas Commerce Tower West
2200 Ross Avenue
Dallas, Texas 75201
Attn: Daniel A. Decker
Facsimile: (214) 220-4949
with a copy to:
JONES, DAY, REAVIS & POGUE
599 Lexington Avenue
New York, New York 10022
Attn: Robert A. Profusek
Facsimile: (212) 755-7306
(b) if to the Company:
UNITED INNS, INC.
Suite 2300, Clark Tower
5100 Poplar Avenue
Memphis, Tennessee 38137
Attn: A.B. Randle, III, Esq.
Secretary and General Counsel
Facsimile: (901) 767-4278
with a copy to:
PAUL, HASTINGS, JANOFSKY & WALKER
Suite 4200
133 Peachtree Street
Atlanta, Georgia 30303
Attn: Paul J. Connell
Facsimile: (404) 527-6882
SECTION 9.3 Certain Definitions. For purposes of this
Agreement, the term:
(a) "Affiliate" of a Person means a Person that directly
or indirectly, through one or more intermediaries, Controls, is Controlled by,
or is under common Control with, the first mentioned Person;
(b) "Beneficial Owner" with respect to any shares means a
Person who shall be deemed to be the Beneficial Owner of such Shares (i) which
such Person or any of its Affiliates or associates beneficially owns, directly
or indirectly, (ii) which such Person or any of its Affiliates or associates
(as such term is defined in Rule 12b-2 of the
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Exchange Act) has, directly or indirectly, (A) the right to acquire (whether
such right is exercisable immediately or subject only to the passage of time),
pursuant to any agreement, arrangement or understanding or upon the exercise of
consideration rights, exchange rights, warrants or options, or otherwise, or
(B) the right to vote pursuant to any agreement, arrangement, or understanding
or (iii) which are beneficially owned, directly or indirectly, by any other
Persons with whom such Person or any of its Affiliates or Person with whom such
Person or any of its Affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
shares;
(c) "Control" (including the terms "controlled by" and
"under common control with") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
management policies of a Person, whether through the ownership of stock, as
trustee or executor, by contract or credit arrangement or otherwise; and
(d) "Person" means an individual, corporation,
partnership, association, trust or any unincorporated organization.
SECTION 9.4 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule
of law, or public policy, all other conditions and provisions of this Agreement
will nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto will negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
greatest extent possible.
SECTION 9.5 Entire Agreement. This Agreement constitutes the
entire agreement, and supersede all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the
subject matter hereof and are not intended to confer upon any other Person any
rights or remedies hereunder.
SECTION 9.6 Assignment. This Agreement shall not be assigned
by operation of law or otherwise, except that Purchaser may assign all or any
of its rights hereunder to any Affiliate of Purchaser provided that no such
assignment will relieve the assigning party of its obligations
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<PAGE> 43
hereunder and the assignee shall specifically assume the obligations of the
assignor hereunder.
SECTION 9.7 Headings. Article and Section headings in this
Agreement are included herein for convenience of reference only and will not
constitute a part of this Agreement for any other purpose.
SECTION 9.8 Governing Law. This Agreement will be governed
by, and construed in accordance with, the law of the State of New York, without
giving effect to the principles of conflict of laws of such State.
SECTION 9.9 Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when so executed will be deemed to be an original
but all of which taken together will constitute one and the same instrument.
SECTION 9.10 Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this
Agreement was not performed in accordance with the terms hereof and that the
parties will be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity.
SECTION 9.11 Guaranty of Performance. New Parent, Merger
Sub, and The Hampstead Group, Inc., jointly and severally, (a) represent and
warrant to the Company that the representations and warranties of Purchaser set
forth in this Agreement are true and correct in all material respects and (b)
agree to cause Purchaser to perform and comply with in all material respects
the obligations and covenants required by this Agreement to be performed or
complied with by it. Notwithstanding anything to the contrary contained
herein, this Section 9.11 will terminate automatically at the Effective Time
and will forthwith become null and void and there shall be no further liability
under this Section 9.11 on the part of New Parent, Merger Sub or The Hampstead
Group, Inc.
IN WITNESS WHEREOF, Purchaser, New Parent, Merger Sub and the
Company have caused this Agreement to be executed as of the date first written
above by their respective representatives thereunto duly authorized.
PURCHASER:
UNITED/HARVEY HOLDINGS, L.P.
By: Hampstead Genpar, L.P., its
General Partner
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<PAGE> 44
By: HH Genpar Partners, its
General Partner
By: Hampstead Associates
Inc., its General
Attest: Partner
/s/ Richard M.FitzPatrick By: /s/ Donald J. McNamara
Name: Richard M. FitzPatrick Name: Donald J. McNamara
Title: Secretary Title: Authorized Officer
NEW PARENT:
UNITED/HARVEY HOTELS, INC.
Attest:
/s/ Richard M.FitzPatrick By: /s/ Donald J. McNamara
Name: Richard M. FitzPatrick Name: Donald J. McNamara
Title: Secretary Title: Authorized Officer
MERGER SUB:
UNITED/HARVEY SUB, INC.
Attest:
/s/ Richard M.FitzPatrick By: /s/ Donald J. McNamara
Name: Richard M. FitzPatrick Name: Donald J. McNamara
Title: Secretary Title: Authorized Officer
COMPANY:
UNITED INNS, INC.
Attest:
/s/ Augustus B. Randle, III By: /s/ Don Wm. Cockroft
Name: Augustus B. Randle, III Name: Don Wm. Cockroft
Title: Secretary Title: President
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<PAGE> 45
The undersigned is a signatory hereto solely for the purpose of agreeing to the
provisions of Section 9.11 solely as it relates to the undersigned.
THE HAMPSTEAD GROUP, INC.
By: /s/ Donald J. McNamara
Name: Donald J. McNamara
Title:Authorized Officer
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<PAGE> 46
ANNEX I
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED NOVEMBER 14, 1994
Conditions to the Offer
Notwithstanding any other provision of the Offer, Purchaser will not
be required to accept for payment, or to purchase or pay for, any tendered
Shares and Purchaser may terminate or amend the Offer and may postpone the
purchase of, and payment for, Shares if (i) there shall not have been validly
tendered to Purchaser pursuant to the Offer and not withdrawn immediately prior
to the expiration of the Offer at least that number of Shares that, when taken
as a whole with all other Shares owned or acquired by Purchaser (whether
pursuant to the Offer or otherwise), constitutes at least a majority of the
Shares on a fully diluted basis, (ii) prior to the time of payment for any such
Shares, any waiting period (and any extension thereof) applicable to the Offer
under the HSR Act shall not have expired or otherwise been terminated or (iii)
at any time on or after the date hereof and prior to the time of payment for
any such Shares:
(a) there shall have been threatened, instituted or pending any
action, proceeding, application or counterclaim by or before any governmental,
regulatory or administrative agency or authority, domestic, foreign or
transnational, which (1) seeks to restrain or prohibit the making or
consummation of the Offer or the Merger or seeks damages in connection
therewith or resulting therefrom, (2) seeks to prohibit or restrict the
ownership or operation by Purchaser (or any of its Affiliates or Subsidiaries)
of any portion of its or the Company's business or assets which is material to
the business of all such entities taken as a whole, or to compel Purchaser (or
any of its Affiliates or Subsidiaries) to dispose of or hold separate any
portion of the Company's business or assets which is material to the business
of all such entities taken as a whole, (3) seeks to impose material limitations
on the ability of Purchaser effectively to acquire or to hold or to exercise
full rights of ownership of the Shares, including without limitation the right
to vote the Shares purchased by Purchaser on all matters properly presented to
the stockholders of the Company, (4) seeks to impose any limitations on the
ability of Purchaser or any of its Affiliates or Subsidiaries
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<PAGE> 47
effectively to control in any material respect the business and operations of
the Company, or (5) would otherwise be reasonably likely to have a Material
Adverse Effect on the Company; or
(b) the representations and warranties of the Company set forth in
this Agreement shall have been breached in any material respect (or, with
respect to those representations and warranties qualified by Material Adverse
Effect, in any respect) or the Company shall have failed to perform any
obligation or covenant required by this Agreement to be performed or complied
with by it in any material respect; provided, however, that Purchaser will not
have the right to decline or accept for payment or purchase or pay for or
terminate or amend the Offer or postpone the purchase of or payment for Shares
as a result of a breach of the representation set forth in Section 4.8 of this
Agreement except for a breach of such representation when made; or
(c) there shall have occurred (1) any general suspension of, or
limitation on prices for, or trading in, securities on the New York Stock
Exchange, (2) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (3) a commencement of a war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States, (4) any material limitation (whether or
not mandatory) by a governmental authority, or any other event that is
reasonably likely to materially adversely affect the extension of credit by
banks or other financial institutions, or (5) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or
(d) a tender or exchange offer for some portion of or all the
Shares shall have been publicly proposed to be made or shall have been
commenced at an all cash price per share in excess of the Per Share Amount (or
at any other price if the Board of Directors of the Company does not promptly
announce publicly that it is recommending that the Company's stockholders not
tender into such offer) by another Person or Purchaser shall have otherwise
learned that any Person, entity or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) shall have acquired beneficial ownership of more
than 25% of the Shares, through the acquisition of stock, the formation of a
group or otherwise, or shall have been granted any right, option or warrant,
conditional or otherwise, to acquire beneficial ownership of more than 25% of
the Shares other than acquisitions for bona fide arbitrage purposes only and
other than by Persons, entities or groups that have publicly disclosed such
ownership in a Schedule 13D or 13G on file with the SEC on the date hereof; or
(e) any other Person shall have commenced a proxy or consent
solicitation of the Company's stockholders to approve
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<PAGE> 48
a transaction other than transactions contemplated by this Agreement; or
(f) this Agreement shall have been terminated in accordance with
its terms; or
(g) the Board of Directors of the Company shall not have taken all
necessary actions to fulfill the Company's obligations under Section 1.3; or
(h) Purchaser and the Company shall have agreed that Purchaser
shall amend or terminate the Offer or postpone the payment for Shares pursuant
thereto.
The foregoing conditions are for the sole benefit of Purchaser. Such
conditions may be waived by Purchaser with the approval of the Board of
Directors of the Company. Any determination by Purchaser will be final and
binding upon all parties including tendering stockholders.
The failure by Purchaser at any time to exercise any of the foregoing
rights will not be deemed a waiver of any such right and each such right will
be deemed an ongoing right which may be asserted by any time and from time to
time.
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<PAGE> 49
ANNEX I-A
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
ACTION BY
WRITTEN CONSENT OF DIRECTORS
OF UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
Pursuant to Section 141(f) of the General Corporation Law of the sate
of Delaware, the undersigned, being all of the directors of United Inns, Inc.,
a Delaware corporation (the "Company"), hereby consent to the adoption of the
following resolutions by unanimous written consent:
WHEREAS, the Company has entered into an Agreement and Plan of Merger,
dated as of November 14, 1994 (the "Merger Agreement"), with United/Harvey
Holdings, L. P. ("Purchaser"), United/Harvey Hotels, Inc. and United/Harvey
Sub, Inc., pursuant to which Purchaser has agreed to make a cash tender offer
(the "Offer") to acquire all shares of issued and outstanding common stock, par
value $1.00 per share, of the Company (the "Shares"); and
WHEREAS, the Merger Agreement provides that, upon Purchaser's
acquisition of a majority of the outstanding Shares pursuant to the Offer or as
otherwise provided in the Agreement (such time hereinafter being referred to as
the "Effective Time"), Purchaser will be entitled to designate up to that
number of members of the Company's Board of Directors as will make the
percentage of members designated by Purchaser equal to the percentage of
outstanding Shares held by Purchaser and its affiliates, and that the Company
will increase the size of its Board of Directors and/or use its best efforts to
secure the resignation of such number of directors as is necessary to enable
Purchaser's designees to be elected to the Company's Board of Directors and
will cause Purchaser's designees to be so elected effective immediately upon
the Effective Time;
<PAGE> 50
NOW, THEREFORE, be it:
RESOLVED, that, pursuant to Section 4 of the Company's Bylaws, the
number of directors of the Company is hereby increased from six to nine, such
increase to be effective immediately prior to the Effective time;
RESOLVED FURTHER, that the three individuals identified on Exhibit A
hereto as the designees of Purchaser are hereby elected to fill the vacancies
created by the increase in the number of directors of the Company to be
effected pursuant to the immediately preceding resolution, the election of such
individuals to be effective immediately upon the Effective Time; and
RESOLVED FURTHER, that the written resignations previously submitted
to the Secretary of the Company by the directors of the Company identified on
Exhibit B hereto are hereby accepted, such resignations being effective
immediately upon the Effective Time.
The undersigned hereby acknowledge that the foregoing resolutions have
been adopted in accordance with the Section 1.3 of the Merger Agreement and
that the Purchaser will be relying hereon in connection with the execution and
delivery of the Merger Agreement.
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<PAGE> 51
EXECUTED as of November 14, 1994 and effective as provided above.
/s/ Don Wm. Cockroft
Don Wm. Cockroft
/s/ J. Howard Lammons
J. Howard Lammons
/s/ Robert L. Cockroft
Robert L. Cockroft
/s/ Howard W. Loveless
Howard W. Loveless
/s/ Janet C. Virgin
Janet C. Virgin
/s/ Ronald J. Wareham
Ronald J. Wareham
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<PAGE> 52
EXHIBIT A
DESIGNEES OF PURCHASER
J. Peter Kline
Donald J. McNamara
Robert A. Whitman
<PAGE> 53
EXHIBIT B
Don Wm. Cockroft
J. Howard Lammons
Robert L. Cockroft
Howard W. Loveless
Janet C. Virgin
Ronald J. Wareham
<PAGE> 54
Annex II
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
UNITED INNS, INC.
FIRST. The name of the corporation is United Inns, Inc. (the
"Corporation").
SECOND. The address of the Corporation's registered office in the
State of Delaware is 1209 Orange Street, City of Wilmington, County of New
Castle, Delaware 19801. The name of the Corporation's registered agent at such
address is The Corporation Trust Company.
THIRD. The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware (the "DGCL").
FOURTH. The total number of shares which the Corporation will have
authority to issue is 100 shares of Common Stock, par value $0.01 per share.
Each holder of Common Stock will have one vote for each share of Common Stock
held.
FIFTH. In furtherance of, and not in limitation of, the powers
conferred by statute, the Board of Directors of the Corporation (the "Board")
is expressly authorized and empowered to adopt, amend, or repeal the By-Laws of
the Corporation, without any action on the part of the stockholders, but the
stockholders may make additional By-Laws and may amend or repeal any By-Law
whether adopted by them or otherwise. The Corporation may in its By-Laws
confer powers upon the Board in addition to the foregoing and in addition to
the powers and authorities expressly conferred upon the Board by applicable
law.
SIXTH. To the full extent permitted by the DGCL or any other
applicable law currently or hereafter in effect, no Director of the Corporation
will be personally liable to the Corporation or its stockholders for or with
respect to any acts or omissions in the performance of his or her duties as a
Director of the Corporation. Any repeal or modification of this Article Sixth
will not adversely affect any right or protection of a Director of the
Corporation existing immediately prior to such repeal or modification.
<PAGE> 55
SEVENTH. Each person who is or was or had agreed to become a Director
or officer of the Corporation, or each such person who is or was serving or who
had agreed to serve at the request of the Board or an officer of the
Corporation as an employee or agent of the Corporation or as a director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust, or other entity (including the heirs, executors, administrators, or
estate of such person) will be indemnified by the Corporation to the full
extent permitted by the DGCL or any other applicable law as currently or
hereafter in effect. The right of indemnification provided in this Article
Seventh will not be exclusive of any other rights to which any person seeking
indemnification may otherwise be entitled, and will be applicable to matters
otherwise within its scope whether or not such matters arose or arise before or
after the adoption of this Article Seventh. Without limiting the generality or
the effect of the foregoing, the Corporation may adopt By-Laws, or enter into
one or more agreements with any person, which provide for indemnification
greater or different than that provided in this Article Seventh. Any
amendment, or repeal of, or adoption of any provision inconsistent with, this
Article Seventh will not adversely affect any right or protection existing
hereunder immediately prior to such amendment, repeal, or adoption.
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Annex III
UNITED INNS, INC.
BY-LAWS
As Adopted and in Effect
on _________ __, 199_
<PAGE> 57
UNITED INNS, INC.
BY-LAWS
TABLE OF CONTENTS
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STOCKHOLDERS' MEETINGS
1. Time and Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
4. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
5. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
6. Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
DIRECTORS
7. Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
8. Number and Term of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
9. Vacancies and New Directorships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
10. Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
11. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
12. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
13. Written Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
14. Participation in Meetings by Telephone
Conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
15. Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
16. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
17. Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
NOTICES
18. Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
19. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
OFFICERS
20. Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
21. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
22. Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
23. Authority and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
24. Execution of Documents and Action with
Respect to Securities of Other Corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
STOCK
25. Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
26. Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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INDEMNIFICATION
27. Damages and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
28. Insurance, Contracts, and Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
GENERAL
29. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
30. Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
31. Reliance upon Books, Reports, and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
32. Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
33. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
34. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
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STOCKHOLDERS' MEETINGS
1. Time and Place of Meetings. All meetings of the stockholders
for the election of Directors or for any other purpose will be held at such
time and place, within or without the State of Delaware, as may be designated
by the Board or, in the absence of a designation by the Board, the Chairman,
the President, or the Secretary and stated in the notice of meeting.
2. Annual Meeting. An annual meeting of the stockholders will be
held at such date and time as may be designated from time to time by the Board,
at which meeting the stockholders will elect by a plurality vote the Directors
to succeed those whose terms expire and will transact such other business as
may properly be brought before the meeting.
3. Special Meetings. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by law or by the Certificate
of Incorporation, may be called by the Chairman or the President and will be
called by the President or the Secretary at the request in writing of
stockholders owning a majority in interest of the entire capital stock of the
Company issued and outstanding and entitled to vote. Any such request must be
sent to the President and the Secretary and must state the purpose or purposes
of the proposed meeting.
4. Notice of Meetings. Written notice of every meeting of the
stockholders, stating the place, date, and hour of the meeting and, in the case
of a special meeting, the purpose or purposes for which the meeting is called,
will be given not less than 10 nor more than 60 calendar days before the date
of the meeting to each stockholder of record entitled to vote at such meeting,
except as otherwise provided herein or by law. When a meeting is adjourned to
another place, date or time, written notice need not be given of the adjourned
meeting if the place, date, and time thereof are announced at the meeting at
which the adjournment is taken; provided, however, that if the adjournment is
for more than 30 calendar days, or if after the adjournment a new record date
is fixed for the adjourned meeting, written notice of the place, date and time
of the adjourned meeting must be given in conformity herewith. At any
adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
5. Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, will constitute a quorum at all meetings of the stockholders for the
transaction of
<PAGE> 60
business thereat. If, however, such quorum is not present or represented at
any meeting of the stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, will have the power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum is present or represented.
6. Voting. Except as otherwise provided by law or by the
Certificate of Incorporation, each stockholder will be entitled at every
meeting of the stockholders to one vote for each share of stock having voting
power standing in the name of such stockholder on the books of the Company on
the record date for the meeting and such votes may be cast either in person or
by written proxy. Every proxy must be duly executed and filed with the
Secretary. A stockholder may revoke any proxy that is not irrevocable by
attending the meeting and voting in person or by filing an instrument in
writing revoking the proxy or another duly executed proxy bearing a later date
with the Secretary. The vote upon any question brought before a meeting of the
stockholders may be by voice vote, unless otherwise required by these By-Laws
or unless the holders of a majority of the outstanding shares of all classes of
stock entitled to vote thereon present in person or by proxy at such meeting
otherwise determine. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock which has voting power present in person or
represented by proxy and which has actually voted will decide any question
properly brought before such meeting, unless the question is one upon which by
express provision of law, the Certificate of Incorporation, or these By-Laws, a
different vote is required, in which case such express provision will govern
and control the decision of such question.
DIRECTORS
7. Function. The business and affairs of the Company will be
managed under the direction of the Board.
8. Number and Term of Office. The Board will consist of one or
more members. The number of Directors will be fixed by resolution of the Board
or by the stockholders at the annual meeting or a special meeting. The
Directors will be elected at the annual meeting of the stockholders, except as
provided in By-Law 9, and each Director elected will hold office until his or
her successor is elected and qualified, except as required by law. Any
decrease in the authorized number of Directors will not be effective until the
expiration of the term of the Directors then in office, unless, at the time of
such decrease, there are vacancies on the Board which are being eliminated by
such decrease.
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9. Vacancies and New Directorships. Vacancies and newly created
directorships resulting from any increase in the authorized number of Directors
which occur between annual meetings of the stockholders may be filled by a
majority of the Directors then in office, though less than a quorum, or by a
sole remaining Director, and the Directors so elected will hold office until
the next annual meeting of the stockholders and until their successors are
elected and qualified, except as required by law.
10. Regular Meetings. Regular meetings of the Board may be held
immediately after the annual meeting of the stockholders and at such other time
and place as may from time to time be determined by the Board. Notice of
regular meetings of the Board need not be given.
11. Special Meetings. Special meetings of the Board may be called
by the Chairman or the President on one day's notice to each Director by whom
such notice is not waived, given either personally or by mail, telephone,
telegram, telex, facsimile, or similar medium of communication.
12. Quorum. At all meetings of the Board, a majority of the total
number of Directors then in office will constitute a quorum for the transaction
of business and the act of a majority of the Directors present at any meeting
at which there is a quorum will be the act of the Board. If a quorum is not
present at any meeting of the Board, the Directors present thereat may adjourn
the meeting from time to time to another place, time, or date, without notice
other than announcement at the meeting, until a quorum is present.
13. Written Action. Any action required or permitted to be taken at
any meeting of the Board or of any committee thereof may be taken without a
meeting if all members of the Board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes or
proceedings of the Board or committee.
14. Participation in Meetings by Telephone Conference. Members of
the Board, or any committee designated by the Board, may participate in a
meeting of the Board, or any such committee, by means of telephone conference
or similar means by which all persons participating in the meeting can hear
each other, and such participation in a meeting will constitute presence in
person at the meeting.
15. Committees. The Board, by resolution passed by a majority of
the Board, may designate one or more committees, each committee to consist of
one or more Directors and each to have such lawfully delegable powers and
duties as the Board may confer. Each such committee will serve at the pleasure
of the Board. The Board may designate one or more
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Directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. Except as otherwise
provided by law, any such committee, to the extent provided in the resolution
of the Board, will have and may exercise all the powers and authority of the
Board in the direction of the management of the business and affairs of the
Company. Any committee or committees so designated by the Board will have such
name or names as may be determined from time to time by resolution adopted by
the Board. Unless otherwise prescribed by the Board, a majority of the members
of the committee will constitute a quorum for the transaction of business, and
the act of a majority of the members present at a meeting at which there is a
quorum will be the act of such committee. Each committee will prescribe its
own rules for calling and holding meetings and its method of procedure, subject
to any rules prescribed by the Board, and will keep a written record of all
actions taken by it.
16. Compensation. The Board may establish such compensation for,
and reimbursement of the expenses of, Directors for attendance at meetings of
the Board or committees, or for other services by Directors to the Company, as
the Board may determine.
17. Rules. The Board may adopt rules and regulations for the
conduct of its meetings and the management of the affairs of the Company.
NOTICES
18. Generally. Whenever by law or under the provisions of the
Certificate of Incorporation or these By-Laws, notice is required to be given
to any Director or stockholder, it will not be construed to require personal
notice, but such notice may be given in writing, by mail, addressed to such
Director or stockholder, at his address as it appears on the records of the
Company, with postage thereon prepaid, and such notice is deemed to be given at
the time when the same is deposited in the United States mail. Notice to
Directors may also be given by telephone, telegram, telex, facsimile, or
similar medium of communication or as may otherwise be permitted by these
By-Laws.
19. Waivers. Whenever any notice is required to be given by law or
under the provisions of the Certificate of Incorporation or these By-Laws, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time of the event for which notice is to be
given, will be deemed equivalent to such notice. Attendance of a person at a
meeting will constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at
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the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.
OFFICERS
20. Generally. The officers of the Company will be elected by the
Board and will consist of a President, a Secretary, and a Treasurer. The Board
may also choose any or all of the following: a Chairman, one or more Vice
Chairmen, one or more Vice Presidents, and such other officers as the Board may
from time to time determine. Notwithstanding the foregoing, by specific action
the Board may authorize the Chairman to appoint any person to any office other
than Chairman, President, Secretary, or Treasurer. Any number of offices may
be held by the same person.
21. Compensation. The compensation of all officers and agents of
the Company who are also Directors of the Company will be fixed by the Board or
by a committee of the Board. The Board may fix, or delegate the power to fix,
the compensation of other officers and agents of the Company to an officer of
the Company.
22. Succession. The officers of the Company will hold office until
their successors are elected and qualified. Any officer may be removed at any
time by the affirmative vote of a majority of the Directors. Any vacancy
occurring in any office of the Company may be filled by the Board.
23. Authority and Duties. Each of the officers of the Company will
have such authority and will perform such duties as are customarily incident
to their respective offices or as may be specified from time to time by the
Board.
24. Execution of Documents and Action with Respect to Securities of
Other Corporations. The President will have, and is hereby given, full power
and authority, except as otherwise required by law or directed by the Board,
(a) to execute, on behalf of the Company, all duly authorized contracts,
agreements, deeds, conveyances, or other obligations of the Company,
applications, consents, proxies, and other powers of attorney, and other
documents and instruments and (b) to vote and otherwise act on behalf of the
Company, in person or by proxy, at any meeting of stockholders (or with respect
to any action of such stockholders) of any other corporation in which the
Company may hold securities and otherwise to exercise any and all rights and
powers which the Company may possess by reason of its ownership of securities
of such other corporation. In addition, the President may delegate to other
officers,
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employees, and agents of the Company the power and authority to take any action
which the President is authorized to take under this By-Law 24, with such
limitations as the President may specify; such authority so delegated by the
President may not be re-delegated by the person to whom such execution
authority has been delegated.
STOCK
25. Certificates. Certificates representing shares of stock of the
Company will be in such form as is determined by the Board, subject to
applicable legal requirements. Each such certificate will be numbered and its
issuance recorded in the books of the Company, and such certificate will
exhibit the holder's name and the number of shares and will be signed by, or in
the name of, the Company by the Chairman or the President and the Secretary or
an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any or all
of the signatures and the seal of the Company, if any, upon such certificates
may be facsimiles, engraved, or printed.
26. Transfers. Upon surrender to the Company of a certificate for
shares duly endorsed or accompanied by proper evidence of succession,
assignment, or authority to transfer, it will be the duty of the Company to
issue a new certificate to the person entitled thereto, cancel the old
certificate, and record the transaction upon its books.
INDEMNIFICATION
27. Damages and Expenses. (a) Without limiting the generality or
effect of Article Seventh of the Certificate of Incorporation, the Company will
to the fullest extent permitted by applicable law as then in effect indemnify
any person (an "Indemnitee") who is or was involved in any manner (including
without limitation as a party or a witness) or is threatened to be made so
involved in any threatened, pending, or completed investigation, claim, action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
(including without limitation any action, suit, or proceeding by or in the
right of the Company to procure a judgment in its favor) (a "Proceeding") by
reason of the fact that such person is or was or had agreed to be a Director,
officer, employee, or agent of the Company, or is or was serving at the request
of the Board or an officer of the Company as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
entity, whether or not for profit (including the heirs, executors,
administrators, or estate of such person), or anything done
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<PAGE> 65
or not done by such person in any such capacity, against all expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by such person in connection with such
Proceeding. Such indemnification will be a contract right and will include the
right to receive payment in advance of any expenses incurred by an Indemnitee
in connection with such Proceeding, consistent with the provisions of
applicable law as then in effect.
(b) The right of indemnification provided in this By-Law 27 will not
be exclusive of any other rights to which any person seeking indemnification
may otherwise be entitled, and will be applicable to Proceedings commenced or
continuing after the adoption of this By-Law 27, whether arising from acts or
omissions occurring before or after such adoption.
(c) In furtherance, but not in limitation of the foregoing
provisions, the following procedures, presumptions, and remedies will apply
with respect to advancement of expenses and the right to indemnification under
this By-Law 27:
(i) All reasonable expenses incurred by or on behalf of an
Indemnitee in connection with any Proceeding will be advanced to the
Indemnitee by the Company within 30 calendar days after the receipt by
the Company of a statement or statements from the Indemnitee requesting
such advance or advances from time to time, whether prior to or after
final disposition of such Proceeding. Such statement or statements will
reasonably evidence the expenses incurred by the Indemnitee and, if and
to the extent required by law at the time of such advance, will include
or be accompanied by an undertaking by or on behalf of the Indemnitee to
repay such amounts advanced as to which it may ultimately be determined
that the Indemnitee is not entitled. If such an undertaking is required
by law at the time of an advance, no security will be required for such
undertaking and such undertaking will be accepted without reference to
the recipient's financial ability to make repayment.
(ii) To obtain indemnification under this By-Law 27, the
Indemnitee will submit to the Secretary a written request, including
such documentation supporting the claim as is reasonably available to
the Indemnitee and is reasonably necessary to determine whether and to
what extent the Indemnitee is entitled to indemnification (the
"Supporting Documentation"). The determination of the Indemnitee's
entitlement to indemnification will be made not less than 60 calendar
days after receipt by the Company of the written request
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for indemnification together with the Supporting Documentation. The
Secretary will promptly upon receipt of such a request for
indemnification advise the Board in writing that the Indemnitee has
requested indemnification. The Indemnitee's entitlement to
indemnification under this By-Law 27 will be determined in one of the
following ways: (A) by a majority vote of the Disinterested Directors
(as hereinafter defined), if they constitute a quorum of the Board, or,
in the case of an Indemnitee that is not a present or former officer of
the Company, by any committee of the Board or committee of officers or
agents of the Company designated for such purpose by a majority of the
Board of Directors; (B) by a written opinion of Independent Counsel if
(1) a Change of Control has occurred and the Indemnitee so requests or
(2) in the case of an Indemnitee that is a present or former officer of
the Company, a quorum of the Board consisting of Disinterested Directors
is not obtainable or, even if obtainable, a majority of such
Disinterested Directors so directs; (C) by the stockholders (but only if
a majority of the Disinterested Directors, if they constitute a quorum
of the Board, presents the issue of entitlement to indemnification to
the stockholders for their determination); or (D) as provided in
subparagraph (iii) below. In the event the determination of entitlement
to indemnification is to be made by Independent Counsel pursuant to
clause (B) above, a majority of the Disinterested Directors will select
the Independent Counsel, but only an Independent Counsel to which the
Indemnitee does not reasonably object; provided, however, that if a
Change of Control has occurred, the Indemnitee will select such
Independent Counsel, but only an Independent Counsel to which the Board
does not reasonably object.
(iii) Except as otherwise expressly provided in this By-Law
27, the Indemnitee will be presumed to be entitled to indemnification
under this By-Law 27 upon submission of a request for indemnification
together with the Supporting Documentation in accordance with
subparagraph (c)(ii) above, and thereafter the Company will have the
burden of proof to overcome that presumption in reaching a contrary
determination. In any event, if the person or persons empowered under
subparagraph (c)(ii) to determine entitlement to indemnification has not
been appointed or has not made a determination within 60 calendar days
after receipt by the Company of the request therefor together with the
Supporting Documentation, the Indemnitee will be deemed to be entitled
to indemnification and the Indemnitee will be entitled to such
indemnification unless (A) the Indemnitee misrepresented or failed to
disclose a material fact in making the request for indemnification
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<PAGE> 67
or in the Supporting Documentation or (B) such indemnification is
prohibited by law. The termination of any Proceeding described in
paragraph (a) of this By-Law 27, or of any claim, issue, or matter
therein, by judgment, order, settlement, or conviction, or upon a plea
of nolo contendere or its equivalent, will not, of itself, adversely
affect the right of the Indemnitee to indemnification or create a
presumption that the Indemnitee did not act in good faith and in a
manner which the Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company or, with respect to any criminal
Proceeding, that the Indemnitee had reasonable cause to believe that his
conduct was unlawful.
(iv) (A) In the event that a determination is made
pursuant to subparagraph (c)(ii) that the Indemnitee is not entitled to
indemnification under this By-Law 27, (1) the Indemnitee will be
entitled to seek an adjudication of his entitlement to such
indemnification either, at the Indemnitee's sole option, in (x) an
appropriate court of the State of Delaware or any other court of
competent jurisdiction or (y) an arbitration to be conducted by a single
arbitrator pursuant to the rules of the American Arbitration
Association, (2) any such judicial proceeding or arbitration will be de
novo and the Indemnitee will not be prejudiced by reason of such adverse
determination, and (3) in any such judicial proceeding or arbitration
the Company will have the burden of proving that the Indemnitee is not
entitled to indemnification under this By-Law 27.
(B) If a determination is made or deemed to have been made,
pursuant to subparagraph (c)(ii) or (iii) of this By-Law 27 that the
Indemnitee is entitled to indemnification, the Company will be obligated
to pay the amounts constituting such indemnification within five
business days after such determination has been made or deemed to have
been made and will be conclusively bound by such determination unless
(1) the Indemnitee misrepresented or failed to disclose a material fact
in making the request for indemnification or in the Supporting
Documentation or (2) such indemnification is prohibited by law. In the
event that advancement of expenses is not timely made pursuant to
subparagraph (c)(i) of this By-Law 27 or payment of indemnification is
not made within five business days after a determination of entitlement
to indemnification has been made or deemed to have been made pursuant to
subparagraph (c)(ii) or (iii) of this By-Law 27, the Indemnitee will be
entitled to seek judicial enforcement of the Company's obligation to pay
to the Indemnitee such advancement of expenses or indemnification.
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Notwithstanding the foregoing, the Company may bring an action, in an
appropriate court in the State of Delaware or any other court of
competent jurisdiction, contesting the right of the Indemnitee to
receive indemnification hereunder due to the occurrence of any event
described in subclause (1) or (2) of this clause (B) (a "Disqualifying
Event"); provided, however, that in any such action the Company will
have the burden of proving the occurrence of such Disqualifying Event.
(C) The Company will be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to the provisions
of this subparagraph (c)(iv) that the procedures and presumptions of
this By-Law 27 are not valid, binding, and enforceable and will
stipulate in any such court or before any such arbitrator that the
Company is bound by all the provisions of this By-Law 27.
(D) In the event that the Indemnitee, pursuant to the
provisions of this subparagraph (c)(iv), seeks a judicial adjudication
of, or an award in arbitration to, enforce his rights under, or to
recover damages for breach of, this By-Law 27, the Indemnitee will be
entitled to recover from the Company, and will be indemnified by the
Company against, any expenses actually and reasonably incurred by the
Indemnitee if the Indemnitee prevails in such judicial adjudication or
arbitration. If it is determined in such judicial adjudication or
arbitration that the Indemnitee is entitled to receive part but not all
of the indemnification or advancement of expenses sought, the expenses
incurred by the Indemnitee in connection with such judicial adjudication
or arbitration will be prorated accordingly.
(v) For purposes of this paragraph (c):
(A) "Change in Control" means the occurrence of any of
the following events:
(1) The Company is merged, consolidated, or
reorganized into or with another corporation or other
legal entity, and as a result of such merger,
consolidation, or reorganization less than a majority
of the combined voting power of the then-outstanding
securities of such corporation or entity immediately
after such transaction are held in the aggregate by the
holders of the then-outstanding securities entitled to
vote generally in the election of directors ("Voting
Stock") of the Company immediately prior to such
transaction;
-10-
<PAGE> 69
(2) The Company sells or otherwise transfers all or
substantially all of its assets to another corporation
or other legal entity and, as a result of such sale or
transfer, less than a majority of the combined voting
power of the then-outstanding securities of such other
corporation or entity immediately after such sale or
transfer is held in the aggregate by the holders of
Voting Stock of the Company immediately prior to such
sale or transfer;
(3) There is a report filed on Schedule 13D or
Schedule 14D-1 (or any successor schedule, form, or
report or item therein), each as promulgated pursuant
to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), disclosing that any person (as the
term "person" is used in Section 13(d)(3) or Section
14(d)(2) of the Exchange Act) has become the beneficial
owner (as the term "beneficial owner" is defined under
Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of securities
representing 30% or more of the combined voting power
of the Voting Stock of the Company;
(4) The Company files a report or proxy statement
with the Securities and Exchange Commission pursuant to
the Exchange Act disclosing in response to Form 8-K or
Schedule 14A (or any successor schedule, form, or
report or item therein) that a change in control of the
Company has occurred or will occur in the future
pursuant to any then-existing contract or transaction;
or
(5) If, during any period of two consecutive years,
individuals who at the beginning of any such period
constitute the Directors cease for any reason to
constitute at least a majority thereof; provided,
however, that for purposes of this clause (5) each
Director who is first elected, or first nominated for
election by the Company's stockholders by a vote of at
least two-thirds of the Directors (or a committee of
the Directors), then still in office who were Directors
at the beginning of any such period will be deemed to
have been a Director at the beginning of such period.
Notwithstanding the foregoing provisions of clauses (3) or (4) of the paragraph
(c)(v)(A), unless otherwise determined in a specific case by majority vote of
the Board, a "Change
-11-
<PAGE> 70
in Control" will not be deemed to have occurred for purposes of such clauses
(3) or (4) solely because (x) the Company, (y) an entity in which the Company,
directly or indirectly, beneficially owns 50% or more of the voting securities
(a "Subsidiary"), or (z) any employee stock ownership plan or any other
employee benefit plan of the Company or any Subsidiary either files or becomes
obligated to file a report or a proxy statement under or in response to
Schedule 13D, Schedule 14D-1, Form 8-K, or Schedule 14A (or any successor
schedule, form, or report or item therein) under the Exchange Act disclosing
beneficial ownership by it of shares of Voting Stock of the Company, whether in
excess of 30% or otherwise, or because the Company reports that a change in
control of the Company has occurred or will occur in the future by reason of
such beneficial ownership.
(B) "Disinterested Director" means a Director of the Company
who is not or was not a party to the Proceeding in respect of which
indemnification is sought by the Indemnitee.
(C) "Independent Counsel" means a law firm or a member of a law
firm that neither presently is, nor in the past five years has been,
retained to represent (1) the Company or the Indemnitee in any matter
material to either such party or (2) any other party to the Proceeding
giving rise to a claim for indemnification under this By-Law 27.
Notwithstanding the foregoing, the term "Independent Counsel" will not
include any person who, under the applicable standards of professional
conduct then prevailing under the law of the State of Delaware, would be
precluded from representing either the Company or the Indemnitee in an
action to determine the Indemnitee's rights under this By-Law 27.
(d) If any provision or provisions of this By-Law 27 are held to be
invalid, illegal, or unenforceable for any reason whatsoever: (i) the validity,
legality, and enforceability of the remaining provisions of this By-Law 27
(including without limitation all portions of any paragraph of this By-Law 27
containing any such provision held to be invalid, illegal, or unenforceable,
that are not themselves invalid, illegal, or unenforceable) will not in any way
be affected or impaired thereby and (ii) to the fullest extent possible, the
provisions of this By-Law 27 (including without limitation all portions of any
paragraph of this By-Law 27 containing any such provision held to be invalid,
illegal, or unenforceable, that are not themselves invalid, illegal, or
unenforceable) will be construed so as to give effect to the intent manifested
by the provision held invalid, illegal, or unenforceable.
-12-
<PAGE> 71
28. Insurance, Contracts, and Funding. The Company may purchase and
maintain insurance to protect itself and any Indemnitee against any expenses,
judgments, fines, and amounts paid in settlement or incurred by any Indemnitee
in connection with any Proceeding referred to in By-Law 27 or otherwise, to the
fullest extent permitted by applicable law as then in effect. The Company may
enter into contracts with any person entitled to indemnification under By-Law
27 or otherwise, and may create a trust fund, grant a security interest, or use
other means (including without limitation a letter of credit) to ensure the
payment of such amounts as may be necessary to effect indemnification as
provided in By-Law 27.
GENERAL
29. Fiscal Year. The fiscal year of the Company will be fixed from
time to time by the Board.
30. Seal. The Board may adopt a corporate seal and use the same by
causing it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise.
31. Reliance upon Books, Reports, and Records. Each Director, each
member of a committee designated by the Board, and each officer of the Company
will, in the performance of his or her duties, be fully protected in relying in
good faith upon the records of the Company and upon such information, opinions,
reports, or statements presented to the Company by any of the Company's
officers or employees, or committees of the Board, or by any other person or
entity as to matters the Director, committee member, or officer believes are
within such other person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Company.
32. Time Periods. In applying any provision of these By-Laws that
requires that an act be done or not be done a specified number of days prior to
an event or that an act be done during a period of a specified number of days
prior to an event, calendar days will be used, the day of the doing of the act
will be excluded and the day of the event will be included.
33. Amendments. These By-Laws may be amended or repealed, or new
By-Laws may be adopted, by the stockholders or by the Board.
34. Certain Defined Terms. Terms used herein with initial capital
letters that are defined in the Certificate of Incorporation are used herein as
so defined.
-13-
<PAGE> 72
NOVEMBER 14, 1994
ANNEX IV
DISCLOSURE SCHEDULES
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
<TABLE>
<S> <C>
Schedule 4.1(A) Exceptions to Good Standing and Qualification to do Business
Schedule 4.1(B) List of Company's Subsidiaries, Jurisdiction of Incorporation and Percentage of
Outstanding Capital Stock
Schedule 4.3(A) Options, Warrants or Other Rights, Agreements, Arrangements or Commitments of Issued or
Unissued Capital Stock
Schedule 4.3(B) Material Outstanding Contractual Obligations Regarding the Shares
Schedule 4.3(C) Security Interests in Subsidiaries' Stock
Schedule 4.5(A) Violations of or Liens on Any Note, Bond, Mortgage or Indenture on the Properties or
Assets of the Company or Its Subsidiaries
Schedule 4.5(B) Violations of or Liens or Other Encumbrances on Any Contract, Service Agreement, Lease
License or Permit of the Company or Its Subsidiaries
Schedule 4.5(C) Violations of or Liens or Other Encumbrances on Any Franchise or Other Instrument or
Obligation of the Company or Its Subsidiaries
</TABLE>
<PAGE> 73
<TABLE>
<S> <C>
Schedule 4.5(D) Required Consents, Approvals, Authorizations or Actions
Schedule 4.6 Liabilities or Obligations Not Included on the Balance Sheet, Nor Contemplated by the
Agreement, Nor Incurred in Ordinary Course of Business Since August 31, 1994
Schedule 4.7 Certain Changes or Events Since August 31, 1994
Schedule 4.8(A) Pending Claims, Actions, Suits, Proceedings or Investigations (Not Otherwise Disclosed in
SEC Reports)
Schedule 4.8(B) Outstanding Court Orders
Schedule 4.9 List of all Material Employee Benefit Plans and ERISA - "Prohibited Transactions" -
"Reportable Events"
Schedule 4.10(A) Collective Bargaining Agreements
Schedule 4.10(B) Compliance With Obligations Under the National Labor Relations Act, etc.
Schedule 4.10(C) Consent of the Unions
Schedule 4.10(D) List of All Material Employment, Consulting and Severance Agreements
Schedule 4.12 Material Deficiencies and Waiver With Respect to Taxes
Schedule 4.13(A) Environmental Audits and Reports
Schedule 4.13(B) Governmental Investigations or Proceedings Regarding Environmental Matters
Schedule 4.13(C) Underground Storage Tanks
Schedule 4.13(D) Underground Storage Tanks -- Claims
Schedule 4.15 Breaches, Violations and Defaults
Schedule 5.1(A) Disposition of Assets and Properties
Schedule 5.1(B) Contracts and Agreements
</TABLE>
- ii -
<PAGE> 74
<TABLE>
<S> <C>
Schedule 5.1(C) New Capital Expenditures
Schedule 5.1(D) Amendment to Contracts, Agreements, Commitments or Arrangements
Schedule 5.1(E) Increase in Compensation or Grants or Payments of Severance or Termination Pay
</TABLE>
- iii -
<PAGE> 75
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.1(A)
EXCEPTIONS TO GOOD STANDING AND
QUALIFICATION TO DO BUSINESS
See Schedule 4.12 with respect to the Tennessee Tax Matter (as defined
therein).
- 1 -
<PAGE> 76
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.1(B)
LIST OF COMPANY'S SUBSIDIARIES,
JURISDICTION OF INCORPORATION AND
PERCENTAGE OF OUTSTANDING CAPITAL STOCK
The Company is the owner of 100% of the capital stock, directly or indirectly,
of each listed subsidiary, unless otherwise indicated.
<TABLE>
<CAPTION>
State of
Corporation Relationship Incorporation
- ----------- ------------ -------------
<S> <C> <C>
United Inns Inc. of Tennessee Subsidiary Tennessee
United Inns of Colorado, Inc. Subsidiary Colorado
United Supply Company Subsidiary Tennessee
Gary Hotel Courts, Inc. Subsidiary Georgia
Stagner Hotel Courts, Inc. Subsidiary Georgia
Kizer Motel Courts, Inc. Subsidiary Texas
Lammons Hotel Courts, Inc. Subsidiary Georgia
Turley Inns, Inc. Subsidiary Texas
Rodgers Hotel Courts, Inc. Subsidiary Georgia
Dotson, Inc. Subsidiary Texas
Haywood Hotel Courts, Inc. Subsidiary Georgia
Sepp Hotel Courts, Inc. Subsidiary Georgia
Scott Inn, Inc. Subsidiary Texas
Johnson Inn, Inc. Subsidiary Texas
South Jacksonville Inn, Inc. Subsidiary Florida
Eastex Inn, Inc. Subsidiary Texas
Croswell Inn, Inc. Subsidiary Texas
</TABLE>
[CONTINUED]
- 2 -
<PAGE> 77
<TABLE>
<CAPTION>
State of
Corporation Relationship Incorporation
- ----------- ------------ -------------
<S> <C> <C>
Rier Inn Inc. Subsidiary Texas
Clayton County Inn, Inc. Subsidiary Georgia
Houston Airport Inn, Inc. Subsidiary Texas
Peachtree Lenox Inn, Inc. Subsidiary Georgia
I-20 East Inn, Inc. Subsidiary Georgia
Jackson Downtown Inn, Inc. Subsidiary Mississippi
Northside Inn, Inc. Subsidiary Georgia
Old National Inn, Inc. Subsidiary Georgia
Gaines, Inc. Subsidiary Tennessee
Friscia Inn, Inc. Subsidiary Texas
Airport Utilities, Inc. Subsidiary Texas
Transcontinental Motor Hotels, Inc. Subsidiary Texas
Ellison Hotel Corporation Subsidiary Texas
Glenjon, Inc. Subsidiary Texas
TMH Motor Hotels, Inc. Subsidiary California
Houston Inns Service Co., Inc. Subsidiary1/ Texas
Ox John, Inc. Subsidiary2/ Texas
La Mancha Club, Inc. Subsidiary3/ Texas
La Strada Club, Inc. Subsidiary3/ Texas
Roswell Road Inn, Inc. Subsidiary Georgia
Memorial Katy Inn, Inc. Subsidiary Texas
Greenway Plaza Inn, Inc. Subsidiary Texas
Hobby Inn, Inc. Subsidiary Texas
Chamblee-Dunwoody Inn, Inc. Subsidiary Georgia
Southwest, Inc. Subsidiary Mississippi
Mid-Atlanta Investment Company Subsidiary4/ Georgia
Penrod Club Subsidiary3/ Texas
The Thicket Club Subsidiary3/ Texas
Limited Service Inns, Inc. of Georgia Subsidiary Georgia
Austin Innkeepers, Inc. Subsidiary Texas
Indian Trail Inn, Inc. Subsidiary Georgia
Memphis Carwash, Inc. Subsidiary Tennessee
Carwash Number 2, Inc. Subsidiary Tennessee
9 Up Club, Inc. Subsidiary3/ Texas
Limited Service Inns, Inc. of Houston Subsidiary Texas
Limited Service Inns, Inc. of Mississippi Subsidiary Mississippi
Limited Service Inns, Inc. of Georgia No. 2 Subsidiary Georgia
Rier Properties Inc. Subsidiary Texas
</TABLE>
_____________________
1/ 49% Actual Ownership
2/ 45% Actual Ownership
3/ Beneficial Interest
4/ 75% Owned
- 3 -
<PAGE> 78
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.3(A)
OPTIONS, WARRANTS OR OTHER RIGHTS,
AGREEMENTS, ARRANGEMENTS OR COMMITMENTS
OF ISSUED OR UNISSUED CAPITAL STOCK
1. Consultant Agreement dated August 13, 1993 between Lawrence Geller and
the Company providing for Mr. Geller's option right to 60,000 shares
of common stock. Mr. Geller has exercised his right to acquire 25,000
shares of common stock and continues to hold an option right to
acquire an additional 35,000 shares of common stock. A Form S-1 under
the Securities Act of 1933, as amended (the "Act") has been filed
registering the 25,000 shares of common stock owned outright and the
35,000 options to purchase common stock held by Mr. Geller.
2. Option Agreement dated February 11, 1994 between Robert L. Cockroft
and the Company providing for Mr. Cockroft's right to 1000 shares of
common stock under the UII 1993 Stock Incentive Plan as a Director of
the Company.
3. Option Agreement dated February 11, 1994 between Howard W. Loveless
and the Company providing for Mr. Loveless' right to 1000 shares of
common stock under the UII 1993 Stock Incentive Plan as a Director of
the Company.
4. Option Agreement dated February 11, 1994 between Janet C. Virgin and
the Company providing for Ms. Virgin's right to 1000 shares of common
stock under UII 1993 Stock Incentive Plan as a Director of the
Company.
- 4 -
<PAGE> 79
5. Option Agreement dated February 11, 1994 between Ronald J. Wareham and
the Company providing for Mr. Wareham's right to 1000 shares of common
stock under UII 1993 Stock Incentive Plan as a Director of the
Company.
6. Under the terms of the Covenant Agreement dated December 22, 1992 (the
"Covenant Agreement") between Rier Properties Inc. and Texas Commerce
Bank National Association ("TCB"), a subsidiary of the Company, Rier
Inn Inc., may purchase additional shares of its subsidiary
corporation, Rier Properties Inc., in order to make equity
contributions to Rier Properties Inc. so as to prevent a default under
the Covenant Agreement. All such shares are to be delivered to TCB
under the terms of a Pledge and Security Agreement dated December 22,
1992 (the "Pledge Agreement") between TCB and Rier Inn Inc. As of the
date hereof, three (3) shares of Rier Properties Inc. had been
purchased by Rier Inn Inc. under the terms of the Covenant Agreement
and have been delivered to TCB pursuant to the Pledge Agreement.
7. The Company has adopted and the Shareholders have approved the
Company's 1993 Stock Incentive Plan pursuant to which the options
disclosed in items 2-5 of this Schedule 4.3(A) were granted. None of
such options or the shares to be issued upon the exercise thereof have
been registered under the Act. It is contemplated that such options
for 4,000 shares in the aggregate will be exercised and tendered into
the Offer.
- 5 -
<PAGE> 80
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.3(B)
MATERIAL OUTSTANDING CONTRACTUAL OBLIGATIONS REGARDING THE SHARES
See Schedule 4.3(A), particularly Item 6
- 6 -
<PAGE> 81
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.3(C)
SECURITY INTERESTS IN SUBSIDIARIES' STOCK
See Schedule 4.3(A), particularly Item 6
- 7 -
<PAGE> 82
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.5(A)
VIOLATIONS OF OR LIENS ON ANY NOTE,
BOND, MORTGAGE OR INDENTURE ON THE
PROPERTIES OR ASSETS OF THE COMPANY OR
ITS SUBSIDIARIES
LISTING OF MORTGAGES - HOTEL PROPERTY LOCATIONS
<TABLE>
<S> <C>
N/F 1. Houston Airport - Deed of trust between Houston Airport Inn, Inc. (Grantor) and Woodmen of
the World Life Insurance Society (Beneficiary), dated August 23, 1977.
N 2. Houston I-10 West Silber - Deed of Trust between Memorial Katy Inn, Inc. and United Inns
Inc. (Mortgagor) and Seventy-Six Eleven Corporation (Mortgagee), dated December 22, 1980.
Y/F 3. Houston West Loop - Deed of Trust between Scott Inn, Inc. and The Fidelity Mutual Life
Insurance Company, dated December 29, 1977.
N 4. Jackson Downtown - Deed of Trust between Jackson Downtown Inn, Inc. (Trustor) and Robert
J. Conrad (Trustee) and Prudential Life Insurance Co. (Beneficiary), dated January 6,
1976.
N/F/MD 5. Jackson Southwest - Deed of Trust and Security Agreement among Jackson Downtown Inn, Inc. and
United Inns, Inc. (Borrower) and First Tennessee Bank, N.A. Memphis (Lender), dated July 17, 1981;
and modified January 1, 1993.
</TABLE>
- 8 -
<PAGE> 83
<TABLE>
<S> <C>
Y/MD 6. Atlanta Downtown - Deed to Secure Debt and Security Agreement between Mid-Atlanta
Investment Co. (Borrower) and Bell Atlantic Tricon Leasing Corporation (Lender), dated
December 8, 1989.
N/F/MF 7. Atlanta I-20 East - Deed to Secure Debt between I-20 East Inn, Inc. and Cauble and
Company, which later sold its interest to Washington National Insurance Company, dated
June 27, 1973.
N/MD 8. Atlanta Powers Ferry - Security Deed between Northside Hotel Investors, a Joint Venture,
composed of Allied Investments and Northside Inn, Inc. (Grantor) and The Prudential
Insurance Company of America (Grantee), dated April 15, 1981.
N 9. Deed of Trust between Northside Inn, Inc. (Maker) and the general partners of Allied
Investments (Holder), dated July 29, 1992, with note secured by Allen Road Site.
N/F 10. Houston Medical Center - Deed of Trust between Rier Inn Inc. (Mortgagor) and First
National Bank of Memphis (Mortgagee), dated August 31, 1972 and later transferred to
Southwestern Life Insurance Co. on April 29, 1974. (See also Texas Commerce Bank below).
N/MF/MD 11. Chamblee-Dunwoody; Marietta Hampton; Stemmons Brook Hollow; Hampton Briarwood; Jackson
Hampton; and Houston Medical Center (all of which are hotels) and one closed car wash in
Houston, Texas, and one closed car wash in Dallas, Texas are part of the collateral under
portfolio financing (Rier Properties Inc./Texas Commerce Bank). The portfolio financing
outline is not indexed herein but an outline is being provided related to these properties
collateralized under the Texas Commerce Bank portfolio financing.
N/MF/MD 12. Note Purchase and Loan Agreement, Master Note, Mortgage Document and Security Agreement
between Transcontinental Motor Hotels, Inc. (Santa Barbara, Scottsdale, Dallas Regal Row),
Sepp Hotel Courts, Inc. (Atlanta Airport North), Haywood Hotel Courts, Inc. (Atlanta
Northeast) and Clayton County Inn, Inc. (Atlanta South) (Grantors); United Inns, Inc.; and
Salomon Brothers and the First National Bank of Boston (Grantee), dated September 30,
1986.
N 13. Deed of Trust and Security Agreement between Transcontinental Motor Hotels, Inc.
(Unimproved Central Expressway)(Borrower) and Republic National Life
</TABLE>
- 9 -
<PAGE> 84
<TABLE>
<S> <C>
Insurance Company (Lender), dated December 19, 1984, with the current mortgage holder
being American General Life Insurance Co. Mortgage is on a 20'x400' strip of burdened
property of which an 8000 square foot strip is all that remains of the original parcel
that was sold to the City of Dallas/State Department of Transportation.
N 14. Land Deed of Trust between Limited Service Inns, Inc. of Mississippi, and McDonalds
Corporation (unimproved land located in Jackson, Mississippi), dated May 27, 1993.
</TABLE>
- --------------------------------------------------------------
Y = Change of control causes default
N = Change of control does not cause default
F = Loss of franchise creates default
MF = Modification of franchise may create default
MD = Change of control may cause default if corporate
structure relating to ownership and management is
not maintained
- 10 -
<PAGE> 85
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.5(B)
VIOLATIONS OF OR LIENS OR OTHER ENCUMBRANCES
ON ANY CONTRACT, SERVICE AGREEMENT, LEASE LICENSE
OR PERMIT OF THE COMPANY OR ITS SUBSIDIARIES
1. Except as disclosed in (2) below, that the execution, performance
and delivery of the Agreement by the Company will not result in
the breach of, or constitute a default thereunder, or give to
others any right to terminate under the contracts, service
agreements, personal property leases, licenses and permits
affecting its properties, where such breach, default or
termination would have a Material Adverse Effect.
2. There are a large number of agreements entered into by the Company
and its subsidiaries relating to the procurement of goods and
services for the operation of the hotel properties such as pest
control contracts, none of which, if terminated, would have a
Material Adverse Effect and most of which are terminable by either
party on 30 days prior written notice.
- 11 -
<PAGE> 86
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.5(C)
VIOLATIONS OF OR LIENS OR OTHER ENCUMBRANCES
ON ANY FRANCHISE OR OTHER INSTRUMENT OR OBLIGATION
OF THE COMPANY OR ANY OF ITS SUBSIDIARIES
The following Franchise Agreements and all instruments related thereto,
including reservation system, sign and other trademark related agreements, may
be terminated by the franchisor in the event that a change in control occurs:
<TABLE>
<CAPTION>
LOCATION DATE OF LICENSE EXPIRATION DATE
- -------- --------------- ---------------
<S> <C> <C>
ATLANTA:
H.J. Exp. I-20 East 07-31-91 12-01-2002
H.I. South 06-02-88 09-07-2003
H.I. Airport North 10-28-85 09-12-2000
H.I. Exp. Northeast 07-31-91 03-15-2003
Ramada Downtown 09-17-91 09-17-2001
H.I. Powers Ferry 01-23-81 01-22-2001
H.I. Perimeter/Dunwoody 12-22-92 01-16-2006
Marietta Hampton 12-22-92 07-09-2006
HOUSTON:
Days Inn I-10 East 12-29-89 12-19-2005
H.I. Airport 05-31-85 12-07-2001
H.I. Medical Center 12-22-92 10-22-2003
H.I. West Loop 12-19-80 01-24-1998
H.I. I-10 at Silber 04-02-81 03-15-1995
Hampton Inn 03-20-91 03-19-2011
</TABLE>
- 12 -
<PAGE> 87
<TABLE>
<CAPTION>
LOCATION DATE OF LICENSE EXPIRATION DATE
- -------- --------------- ---------------
<S> <C> <C>
JACKSON:
H.I. Downtown 03-05-76 12-15-1994
H.I. Southwest 05-02-79 05-01-1999
H.I. North 06-25-76 06-24-1995
Hampton Inn 12-22-92 10-22-2005
DALLAS:
Days Inn Regal Row 02-07-90 12-31-2005
H.I. Brook Hollow 12-22-92 05-11-2003
ARIZONA:
Flagstaff Days Inn 04-07-89 10-01-1999
H.J. Scottsdale 08-24-93 08-24-2003
CALIFORNIA:
H.I. Santa Barbara 06-18-91 08-20-2003
COLORADO SPRINGS:
H.I. North 09-01-78 08-31-1998
H.I. Exp. Central 06-18-91 12-15-2003
</TABLE>
- 13 -
<PAGE> 88
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.5(D)
REQUIRED CONSENTS, APPROVALS, AUTHORIZATIONS OR ACTIONS
1. See Schedule 4.5(A)
2. See Schedule 4.5(B)
3. See Schedule 4.5(C)
4. In addition to the foregoing, the execution,
performance and delivery of the Agreement by the Company may necessitate
consents, approvals, authorizations or other actions under the contracts,
service agreements, leases, licenses and permits (e.g., liquor permits)
affecting its properties. The failure of the Company to obtain any such
consent, approval or authorization or to take such other actions will not
prevent the Company form performing its obligations under this Agreement and
will not have a Material Adverse Effect.
- 14 -
<PAGE> 89
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.6
LIABILITIES OR OBLIGATIONS NOT INCLUDED ON THE
BALANCE SHEET, NOR CONTEMPLATED BY THE AGREEMENT
NOR INCURRED IN THE ORDINARY COURSE OF BUSINESS
SINCE AUGUST 31, 1994
1. See Schedule 4.12 with respect to the Tennessee Tax Matter.
2. See Items 6-11 on Schedule 4.10(D) with respect to employee
severance payments.
3. See Schedule 4.8(A) with respect to pending claims, actions,
suits, etc.
4. Franchise Termination Fees - See Attached Annex.
- 15 -
<PAGE> 90
ANNEX TO SCHEDULE 4.6
FRANCHISE AGREEMENT TERMINATION CHARGES
Following are general terms under existing franchise agreements concerning
termination provisions. It is possible that arrangements with franchisors can
be negotiated on specific agreements which differ from those set forth herein,
but this is subject to interested parties due diligence.
CONTINUING OPERATIONS:
1. Atlanta Holiday Inn - Airport North - 12 months notice plus 6-1/2
percent of gross room revenues for the preceding 24 months.
2. Atlanta Holiday Inn - South (1-75/U.S. 41) - 12 months notice plus
6-1/2 percent of gross room revenues for the preceding 24 months.
3. Atlanta Holiday Inn - Chamblee/Dunwoody - 6-1/2 percent of gross
room revenues for the preceding 36 months.
4. Atlanta Holiday Inn - Powers Ferry - 12 months notice plus 8
percent of gross room revenues for the preceding 24 months.
5. Atlanta Hampton Inn - Marietta - 12 months notice plus 8 percent
of gross revenues for the preceding 24 months.
6. Atlanta Holiday Express - Northeast - 12 months notice plus 6-1/2
percent of gross room revenues for the preceding 24 months. No
fee if terminated on or before April 30, 1995.
7. Atlanta Ramada Inn - Downtown - Greater of $50,000.00 or preceding
12 months of gross room revenues times 3%.
8. Atlanta Holiday Express - I-20 East - 12 months notice plus 6-1/2
percent of gross room revenues for the preceding 24 months.
9. Dallas Days Inn - Regal Row - 12 months of aggregate monthly
royalties with a minimum of $1,000.00 per room (200 rooms).
10. Dallas Holiday Inn - Brook Hollow - Preceding 36 months gross room
revenues times 6-1/2 percent.
11. Houston Hampton Inn - Preceding 36 months gross room revenues
times 8 percent.
- 16 -
<PAGE> 91
12. Houston Days Inn - East - 12 months of aggregate monthly royalty
with a minimum of $1,000.00 per room (156 rooms).
13. Houston Holiday Inn - Airport - 12 months notice plus 6-1/2
percent of gross room revenues for the preceding 24 months.
14. Houston Holiday Inn - West Loop Galleria - 12 months notice plus
6-1/2% of gross room revenues for the preceding 24 months.
15. Houston Holiday Inn - I-10 West at Silber - 12 months notice plus
6-1/2 percent of gross room revenues for the preceding 24 months.
No fee if terminated on or before March 15, 1995, as is presently
contemplated.
16. Houston Holiday Inn - Medical Center - 36 months of gross room
revenues times 6-1/2 percent.
17. Jackson Holiday Inn - Downtown - No fee if terminated on or before
December 15, 1994, as is presently contemplated.
18. Jackson Holiday Inn - North - 6-1/2 percent of last months' gross
revenue times remaining term under agreement.
19. Jackson Holiday Inn - Southwest - 12 months notice plus 6-1/2
percent of gross room revenues for the preceding 24 months.
20. Jackson Hampton Inn - Briarwood - 12 months notice plus 6-1/2
percent of gross room revenues for the preceding 24 months.
21. Santa Barbara Holiday Inn - 12 months notice plus 6-1/2 percent of
gross room revenues for the preceding 24 months.
22. Scottsdale Howard Johnson - Licensee may terminate from 9-1-95
through 8-31-96 with no fee.
23. Flagstaff Days Inn - 12 months of aggregate monthly royalties with
a minimum of $1,000.00 per room (157 rooms).
24. Colorado Springs Holiday Express - Central - 12 months notice plus
6-1/2 percent of gross room revenues for the preceding 24 months.
No fee if terminated on or before April 30, 1995.
- 17 -
<PAGE> 92
25. Colorado Springs Holiday Inn - North - 12 months notice plus 6-1/2
percent of gross room revenues for the preceding 24 months. No
fee if terminated on or before April 30, 1995.
Schedule does not include Dallas Howard Johnson - Downtown Agreement.
Negotiations regarding the possible amendment of this lease or the entering
into of a management agreement are ongoing, but it is uncertain whether
agreement can be reached. No fee is payable if the franchise is terminated on
or before November 30, 1994.
- 18 -
<PAGE> 93
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.7
CERTAIN CHANGES OR EVENTS SINCE AUGUST 31, 1994
1. See Schedule 4.8(A) with respect to pending claims, actions,
suits, etc.
2. See Item 3 on Schedule 4.15
- 19 -
<PAGE> 94
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.8(A)
PENDING CLAIMS, ACTIONS, SUITS, PROCEEDINGS OR INVESTIGATIONS
(NOT OTHERWISE DISCLOSED IN SEC REPORTS)
General Comments
1. The Company self-insures for the first $250,000 per occurrence
under each policy.
2. The estimated liability on none of the claims or lawsuits
described in this Schedule 4.8(A), including the Annex, exceeds
the self-insurance amount plus applicable insurance coverage.
3. There are worker's compensation and other general liability claims
incurred in the ordinary course of business, which are not listed.
The Company will provide information regarding those claims on
request. The Company believes that the estimated liability with
respect to each such claim is within the self- insurance amount
plus applicable insurance coverage.
4. Detailed Loss Runs for claims and lawsuits for the previous three
(3) years are available for inspection.
5. See attached Annex for current lawsuits as well as claims not in
the ordinary course of business.
- 20 -
<PAGE> 95
ANNEX TO SCHEDULE 4.8(A)
CURRENT LAWSUITS AGAINST VARIOUS ENTITIES IN UNITED INNS
SYSTEM -- INSURED; OTHER CLAIMS
<TABLE>
<CAPTION>
DATE OF INCIDENT AMOUNT OF DEMAND
NAME OF CLAIMANT OR ON WHICH CLAIM MADE IN COMPLAINT BI OR PD
PLAINTIFF COMPANY DEFENDANT IS BASED OR LETTER RESERVES
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Burnett et al. Stagner Hotel Courts, Inc. et 09-Jun-90 No specific $31,000.00
al. liquidated demand
Busbice, Tommie Rier Properties Inc. d/b/a 13-Aug-90 No specific $5,000.00
Houston Medical Center liquidated demand
Ciprotti, Laura United Inns Inc. of Tennessee 25-Nov-89 $450,000.00 No reserves set
and Northside Inn, Inc. up
Cortez, Jose T. United Inns Inc. of Tennessee 10-Jan-93 No specific No reserves
d/b/a Mr. Pride Car Wash liquidated demand available
Couey, Richard Memorial Katy Inn, Inc. and 02-Mar-92 Less than $100,000 $10,000.00
Stanley Smith Security
Curry, Jack Jackson Downtown Inn, Inc. 12-Jul-91 $750,000.00 $15,000.00
d/b/a Jackson North
Flores, Gloria et al. Houston Inns Service Company, 05-Nov-88 No specific $75,000.00
The Petals Restaurant, Holiday liquidated demand
Inns, Inc. et al.
</TABLE>
<TABLE>
<CAPTION>
NAME OF CLAIMANT OR CUMULATIVE SUMS
PLAINTIFF OPEN RESERVES TOTAL RESERVES PAID DESCRIPTION OF BASIS OF LAWSUIT
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Burnett et al. $45,894.00 $106,020.00 $60,126.00 Three plaintiffs claim to have been
mugged while unloading vehicle at hotel
Busbice, Tommie $8,245.00 $20,000.00 $11,754.00 Plaintiff claims to have suffered
injuries acquired when she sat on arm
rest that did not have padding and metal
exposed
Ciprotti, Laura No reserves No reserves No reserves set Is bringing a third lawsuit pro se
set up set up up against hotel; still seeks money for
false arrest and other theories even
though limitation problems; two lawsuits
have previously been dismissed on
basically the same theories either
through appeal or on her own motion
Cortez, Jose T. No reserves No reserves No reserves Mr. Pride truck in Louisiana struck
available available available Cortez car after Cortez car had gone out
of control; at or near the commencement
of the suit USF&G adjuster told me that
she has reserved for $15,000
Couey, Richard $17,933.00 $30,000.00 $12,067.00 Plaintiff mugged by two assailants in
parking lot of hotel
Curry, Jack $21,019.00 $35,000.00 $13,980.00 Plaintiff claims injuries after he
slipped and fell in public restroom of
hotel
Flores, Gloria et $88,074.00 $235,000.00 $146,925.00 Claims one and a half years later her
al. husband died from salmonella poisoning
from oysters served
</TABLE>
-21-
<PAGE> 96
ANNEX TO SCHEDULE 4.8(A)
CURRENT LAWSUITS AGAINST VARIOUS ENTITIES IN UNITED INNS
SYSTEM -- INSURED; OTHER CLAIMS
<TABLE>
<CAPTION>
DATE OF INCIDENT AMOUNT OF DEMAND
NAME OF CLAIMANT OR ON WHICH CLAIM MADE IN COMPLAINT BI OR PD
PLAINTIFF COMPANY DEFENDANT IS BASED OR LETTER RESERVES
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Foster, Delia United Inns, Inc. of Tennessee 15-Aug-91 $346,218.45 $15,000.00
d/b/a Holiday Inn Downtown,
Jackson
Goelz, Jeffrey W. and Rier Properties Inc. d/b/a 11-May-92 $250,000.00 $5,000.00
Kenneth Rivi Hampton Marietta, PRGV, Inc.
d/b/a King's Head Pub, and
David Michael Breeden
Hughes, Dorothy and United Inns of Colorado, Inc. 21-Nov-91 No specific $130,000.00
Mutual of Omaha d/b/a Holiday Inn North liquidated demand
Insurance Company
Lambert, R.W. and Vink, Lammons Hotel Courts, Inc. 29-Jul-93 $1,000,000.00 $10,000.00
Peter d/b/a Ramada Hotel Downtown
Nelson, Tom A. and Houston Days Inn I-10 East 17-Nov-91 $90,000.00 $20,000.00
Crystal
Reyna, Maria Rier Properties Inc. d/b/a 30-Jul-93 No specific $5,000.00
Holiday Inn Medical Center liquidated demand
Nancy Rodriguez Holiday Inn Airport & 07-Jan-93 No specific $5,000.00
K. Anderson liquidated demand
Shaw, Marie Sepp Hotel Courts, Inc. d/b/a 16-Nov-91 No specific $10,000.00
Holiday Inn Airport North liquidated demand
</TABLE>
<TABLE>
<CAPTION>
NAME OF CLAIMANT OR CUMULATIVE SUMS
PLAINTIFF OPEN RESERVES TOTAL RESERVES PAID DESCRIPTION OF BASIS OF LAWSUIT
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Foster, Delia $22,394.00 $25,000.00 $2,606.00 Plaintiff claims injuries after she
slipped and fell in hotel restaurant
Goelz, Jeffrey W. $7,474.00 $7,500.00 $25.00 Plaintiff Goelz shot in parking lot by
and Kenneth Rivi person from a lounge they had just
returned from; Rivi is claiming
hedonistic type damages
Hughes, Dorothy and $130,160.00 $140,000.00 $9,840.00 Plaintiff slipped and fell on ice on
Mutual of Omaha sidewalk at hotel, claiming multiple
Insurance Company injuries
Lambert, R.W. and $14,130.00 $20,050.00 $5,920.00 Plaintiffs claim they were kidnapped from
Vink, Peter hotel
Nelson, Tom A. and $27,075.00 $27,500.00 $425.00 Plaintiffs had belongings and rental
Crystal truck stolen while at hotel; claim of PD
and personal damages
Reyna, Maria $5,200.00 $5,200.00 $0.00 Plaintiff claims she was injured when the
automatic door closed on her while
exiting
Nancy Rodriguez $7,985.00 $15,000.00 $7,104.00 Plaintiff and hotel van driver dispute
who had the green light when proceeding
through an intersection
Shaw, Marie $28,412.00 $30,000.00 $1,587.00 Claims she was injured when her car and
hotel van sideswiped each other at the
airport
</TABLE>
-22-
<PAGE> 97
ANNEX TO SCHEDULE 4.8(A)
CURRENT LAWSUITS AGAINST VARIOUS ENTITIES IN UNITED INNS
SYSTEM -- INSURED; OTHER CLAIMS
<TABLE>
<CAPTION>
DATE OF INCIDENT AMOUNT OF DEMAND
NAME OF CLAIMANT OR ON WHICH CLAIM MADE IN COMPLAINT BI OR PD
PLAINTIFF COMPANY DEFENDANT IS BASED OR LETTER RESERVES
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Spears, Edith Houston Airport Inn, Inc. 26-Mar-91 No specific $50,000.00
d/b/a Holiday Inn liquidated demand
Intercontinental Airport
Sylvester, Sheila et Holiday Inn (Jackson 23-Apr-94 $15,000.000.00 $10,000.00
al. Mississippi), The Salvation
Army, and Pendleton Detectives
of MS, Inc. et al.
Lestin, Eric H. Croswell Inn, Inc. 01-May-91 Specific Uninsured claim;
performance and no reserves
other contract available
remedies
Rader, Homer J., Jr. Transcontinental Motor Hotels, Not all'd No specific Uninsured claim;
Inc. (Howard Johnson Hotel liquidated demand no reserves
Downtown) available
Rothschild's Rier Properties Inc. d/b/a 03-Mar-93 $50,145.00 Uninsured claim;
Holiday Inn Perimeter no reserves
Mall/Dunwoody area available
Gerl Brandon Houston Airport Inn, Inc. dba 28-Oct-92 $95,000 Served too
Holiday Inn Airport recently for any
reserve figures
</TABLE>
<TABLE>
<CAPTION>
NAME OF CLAIMANT OR CUMULATIVE SUMS
PLAINTIFF OPEN RESERVES TOTAL RESERVES PAID DESCRIPTION OF BASIS OF LAWSUIT
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Spears, Edith $56,208.00 $65,000.00 $8,791.00 Plaintiff mugged in parking lot of hotel.
Sylvester, Sheila $45,211.00 $50,000.00 $4,788.00 Lawsuit filed after their daughter was
et al. found in the bottom of the pool
Lestin, Eric H. Uninsured Uninsured Uninsured claim; Defendant has filed counterclaim against
claim; no claim; no no reserves defendant for specific performance of
reserves reserves available alleged oral agreement for purchase of
available available property owned by Croswell Inn, Inc.
Rader, Homer J., Uninsured Uninsured Uninsured claim; Plaintiff claims hotel breached its lease
Jr. claim; no claim; no no reserves when hotel among other things changed
reserves reserves available franchises
available available
Rothschild's Uninsured Uninsured Uninsured claim; Claims front desk lost box of artificial
claim; no claim; no no reserves limbs after the box had been left at
reserves reserves available front desk
available available
Gerl Brandon Served too Served too Served too Plaintiff claims injury when she fell out
recently for recently for recently for any of company vehicle
any reserve any reserve reserve figures
figures figures
</TABLE>
-23-
<PAGE> 98
ANNEX TO SCHEDULE 4.8(A)
CURRENT LAWSUITS AGAINST VARIOUS ENTITIES IN UNITED INNS
SYSTEM -- INSURED; OTHER CLAIMS
<TABLE>
<CAPTION>
DATE OF INCIDENT AMOUNT OF DEMAND
NAME OF CLAIMANT OR ON WHICH CLAIM MADE IN COMPLAINT BI OR PD
PLAINTIFF COMPANY DEFENDANT IS BASED OR LETTER RESERVES
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cyprian Mammah, Peter Cruckshank, G.M., --- $16 Billion Served too
President, Olympic Holiday Inn, Inc. Med. Ctr.; recently for any
Executive Limo Wilbert Lee, night auditor, reserve figures
Holiday Inn Incorporated Med.
Ctr.; Rier Inn, Inc.; Holiday
Inn; and other Defendants
Houston Colony Ltd. Dotson Inc. - Friscia Inn Inc. ______ $155,000 Uninsured claim;
(former Hotel in Houston) no reserves
available
State of Texas Highway Holiday Inn West Loop Pending ______ ______
Dept.
</TABLE>
<TABLE>
<CAPTION>
NAME OF CLAIMANT OR CUMULATIVE SUMS
PLAINTIFF OPEN RESERVES TOTAL RESERVES PAID DESCRIPTION OF BASIS OF LAWSUIT
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cyprian Mammah, Served too Served too Served too Plaintiff's claim is extremely ambiguous
President, Olympic recently for recently for recently for any to the point that it appears he is
Executive Limo any reserve any reserve reserve figures failing to state a claim upon which
figures figures relief can be granted. He is alleging
that somehow there is a conspiracy
against him by a number of hotels in the
Med. Ctr. area and various Houston City
depts. because of some ticket he
received. At this time, this is
considered to be no more than a frivolous
claim.
Houston Colony Ltd. Uninsured Uninsured Uninsured claim, Claim (not lawsuit) alleging that seller
claim; no claim; no no reserves violated the Texas Deceptive Trade
reserves reserves available Practices Act in selling hotel to
available available purchaser on June 27, 1994. Hotel had
been closed since January 22, 1988.
Purchaser alleges seller had stated that
Certificate of Occupancy had remained in
effect.
State of Texas ______ ______ ______ Intent of Texas State Highway Dept. to
Highway Dept. take a significant portion of property
for highway development of Loop 610 and
Highway 59 in Houston
</TABLE>
-24-
<PAGE> 99
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.8(B)
OUTSTANDING COURT ORDERS
The State of California has filed an injunction against Transcontinental Motor
Hotels (doing business as Holiday Inn and Pelican's Restaurant), a wholly-owned
subsidiary of the Company (the "Defendant"), enjoining the Defendant in Santa
Barbara County, California from operating its restaurant business until it
substantially complies with the County Health and Safety Code.
- 25 -
<PAGE> 100
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.9
LIST OF ALL MATERIAL EMPLOYEE BENEFIT PLANS AND ERISA
"PROHIBITED TRANSACTIONS" - "REPORTABLE EVENTS"
1. United Inns, Inc. Retirement and Savings Plan (401(K) Plan)
effective as of January 1, 1992.
2. United Inns, Inc. Comprehensive Major Medical Benefits, Group Life
Insurance, Accidental Death and Dismemberment Insurance and
Accident and Sickness Benefits Plans effective as of December 1,
1961.
3. United Inns, Inc. 1993 Stock Incentive Plan effective as of
February 11, 1994.
4. Executive Bonus Plan effective as of September 30, 1973.
5. Employee Severance Pay Policy effective as of September 16, 1994
for Memphis and Regional Office employees. Estimated cost is
$256,000.
6. Employment Continuation Bonus Plan for Memphis and Regional Office
critical position employees effective as of September 16, 1994.
Estimated cost is $412,000.
7. Employment Continuation Agreement for Mr. Pride Houston critical
position employees dated June 8, 1993. Estimated cost is $13,350.
- 26 -
<PAGE> 101
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.10(A)
COLLECTIVE BARGAINING AGREEMENTS
1. Agreement between Holiday Inn of Santa Barbara (the "Santa Barbara
Employer") and the Culinary Alliance and Bartenders, Hotel and
Motel Service Workers Union Local 498 (the "Union"). There are 17
employees covered under this collective bargaining agreement.
Negotiations are in process with regard to the terms of a new
agreement.
2. Agreement between the Santa Barbara Employer, Holiday Inn San Jose
Airport (the "Employer") and the Union, Hotel Employees and
Restaurant Employees. This contract was scheduled to expire on
October 31, 1994; however, the Santa Barbara Employer closed the
hotel on September 26, 1994, and terminated all employees covered
by this collective bargaining agreement on or prior to September
26, 1994. There were 7 employees covered by this collective
bargaining agreement on September 1, 1994. The Company has made
all payments to the employees of the Union as required by the
collective bargaining agreement, and the Union has no disagreement
with the Company in regard to the final payments to the employees.
3. Agreement between Holiday Inn San Jose (the "San Jose Employer")
and Freight Checkers and Helpers Union Local No. 856 (the "Freight
Union"). This contract, was scheduled to expire on April 30, 1994
but was extended pending renegotiation of the contract; however,
the San Jose Employer closed the hotel on September 26, 1994, and
- 27 -
<PAGE> 102
terminated all employees covered by this collective bargaining
agreement on or prior to September 26, 1994. There were 15
employees covered by this collective bargaining agreement on
September 1, 1994. The Company has made all payments to the
employees of the Freight Union as required by the collective
bargaining agreement, and the Freight Union has no disagreement
with the Company in regard to the final payment to the Freight
Union members.
4. The Company has received notice from the National Labor Relations
Board that a Petition has been filed by the United Steel Workers
of America, AFL-CIO (the "AFL-CIO"), requesting recognition as the
Bargaining Representative for the majority of the employees at the
Atlanta Airport Holiday Inn located at 1380 Virginia Avenue, East
Point, Georgia. An election was held on October 26, 1994, and
there were not enough votes for the AFL-CIO to be entitled to
become the Bargaining Representative for the hotel's employees.
The AFL-CIO has filed objections to the election. It is too early
to determine what if any effect the objections will have on the
election.
- 28 -
<PAGE> 103
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.10(B)
COMPLIANCE WITH OBLIGATIONS UNDER
THE NATIONAL LABOR RELATIONS ACT, ETC.
1. The Holiday Inn Airport located at 1380 Virginia Avenue, East
Point, Georgia, has received a Notice of Charge of Discrimination
from the Equal Employment Opportunity Commission (the "EEOC").
The charging party has alleged that the hotel, in failing to hire
the party, discriminated against him because of his race in
violation of Title VII of the Civil Rights Act of 1965 ("Title
VII"). The charge is without merit and will in all probability
either be no-caused by the EEOC or settled for a nominal amount.
The Company has offered to settle this matter for $250.
2. The Hampton Inn I-10 East located at 828 Mercury Drive, Houston,
Texas, has received a Notice of Charge of Discrimination from the
EEOC. The charging party has alleged that the hotel, in
terminating the party's employment, discriminated against her
because of her national origin in violation of Title VII. The
charge is without merit and will in all probability either be
no-caused by the EEOC or settled for a nominal amount. The
Company has offered to settle this matter for $500.
3. The Holiday Inn Airport at 1380 Virginia Avenue, Atlanta, Georgia
has received a letter from an attorney representing a former
employee who alleges that she was wrongfully terminated and has
offered to enter into a pre-litigation settlement agreement. The
monetary
- 29 -
<PAGE> 104
damages claimed are for damages, back wages and pay for a
professional outplacement services. The attorney is asking for 52
weeks of pay totalling $21,226 plus $3,000 for outplacement
services. The claim is without merit and should be settled for a
reasonable sum.
- 30 -
<PAGE> 105
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.10(C)
CONSENT OF THE UNIONS
None
- 31 -
<PAGE> 106
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.10(D)
LIST OF ALL MATERIAL EMPLOYMENT,
CONSULTING AND SEVERANCE AGREEMENTS
1. Consulting Agreement between the Company and Geller and Co. dated
August 13, 1993. Estimated cost (excluding stock and Geller's
shares of Paragraphs 2 and 3) is $0.
2. Consulting Agreement between the Company and Smith Barney, Inc.,
dated July 11, 1994, as amended on September 1, 1994.
3. Compensation Agreement between the Company, Smith Barney, Inc.,
Geller and Co., and Laurence Geller, individually, dated August
31, 1994.
The Company's maximum liability under the Agreements set forth
Paragraph 2 and this Paragraph 3 is approximately $2,100,000.
4. Consulting Agreement between the Company and Michael McNulty dated
July 15, 1994. Estimated cost is approximately $174,500.
5. Ronald J. Wareham is retained by the Company from time to time to
provide consulting services on a time and expenses basis.
6. Severance Agreement between the Company and John M. Dollar dated
June 1, 1987. Estimated cost is approximately $236,000 for two
years salary, plus an additional amount for benefits.
- 32 -
<PAGE> 107
7. Severance Agreement between the Company and J. Don Miller dated
June 1, 1987. Estimated cost is approximately $178,000 for two
years salary, plus an additional amount for benefits.
8. Severance Agreement between the Company and Augustus B. Randle III
dated June 1, 1987. Estimated cost is approximately $172,000 for
two years salary, plus an additional amount for benefits.
9. Employee Severance Pay Policy for Memphis and Regional Office
employees effective September 16, 1994. Estimated cost is
$256,000.
10. Employment Continuation Agreement for Mr. Pride Houston critical
position employees dated June 8, 1993. Estimated cost is $13,500.
11. Employment Continuation Bonus Plan for Memphis and Regional Office
critical position employees effective September 16, 1994.
Estimated cost is $412,000.
12. Agreement to transfer Company vehicle to Don William Cockroft upon
termination from the Company.
13. Agreement to transfer Company vehicle to Augustus B. Randle III
upon termination from the Company.
14. Agreement to transfer Company vehicle to J. Don Miller upon
termination from the Company.
15. Agreement to transfer Company vehicle to John M. Dollar upon
termination from the Company.
16. Indemnification Agreements between the Company and each of its
Directors and the following Officers: Augustus B. Randle, III, J.
Don Miller and John M. Dollar.
- 33 -
<PAGE> 108
MICHAEL S. MCNULTY
4401 Rheimes
DALLAS, TEXAS 75205
November 14, 1994
Mr. Don Wm. Cockroft
United Inns, Inc. 5100 Poplar Avenue
Suite 2300
Memphis, Tennessee 38137
Dear Don:
This will memorialize our agreement that United Inns, Inc. will agree to pay
fees equal to $124,000 under the Letter Agreements dated July 15, 1994, October
4, 1994 and an additional incentive bonus of $50,000 upon completion of the
tendered offer by Hampstead/Harvey.
Sincerely yours,
/s/ Michael S. McNulty
Michael S. McNulty
AGREED TO BY: UNITED INNS, INC.
/s/ Don Wm. Cockroft
Don Wm. Cockroft
President
- 34 -
<PAGE> 109
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.12
MATERIAL DEFICIENCIES AND WAIVER
WITH RESPECT TO TAXES
The Tennessee Department of Revenue ("DOR") has requested that the Company
provide information regarding its operations, pertaining to certain franchise
and/or excise taxes that may be payable (the "Tennessee Tax Matter"). The DOR
contends that the Company has not filed returns required to be filed and has
not paid taxes which would have been payable if such filings had been made.
The DOR has not indicated the amount in question or the years affected and no
assessment has been made. The Company has requested that its legal counsel and
auditors develop the requested information and analyze the issues raised by the
DOR's inquiry in order to quantify the Company's exposure, if any, to the DOR
for back taxes. This analysis is underway.
At this time, the Company cannot predict the outcome of the DOR information
request.
- 35 -
<PAGE> 110
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.13(A)
ENVIRONMENTAL AUDITS AND REPORTS
PHASE I ENVIRONMENTAL SITE ASSESSMENT REPORTS
<TABLE>
<CAPTION>
SITE REPORT PREPARER DATE OF REPORT
---- --------------- --------------
<S> <C> <C>
Holiday Inn/Perimeter Dunwoody1/ Viro Group August 22, 1994
4836 Chamblee-Dunwoody Road
Atlanta, GA
Holiday Inn/Airport North2/ Viro Group August 22, 1994
1380 Virginia Avenue
Atlanta, GA
Holiday Inn/Powers Ferry2/ Viro Group August 22, 1994
6345 Powers Ferry Rd.
Atlanta, GA
</TABLE>
____________________
1/ Report of Survey to Identify Asbestos-Containing Materials prepared by
Law Associates, Inc. dated October 20, 1989.
2/ Limited asbestos survey also conducted.
- 36 -
<PAGE> 111
<TABLE>
<CAPTION>
SITE REPORT PREPARER DATE OF REPORT
---- --------------- --------------
<S> <C> <C>
Holiday Inn Express/I-20 East2/ Viro Group August 22, 1994
4300 Snapfinger Woods Way
Decatur, GA
Holiday Inn Express/Northeast2/ Viro Group August 22, 1994
4422 Northeast Freeway
Doraville, GA
Downtown Ramada Inn3/ ATEC July 27, 1989
175 Piedmont Road, N.E.
Atlanta, GA
Hampton/Marietta4/ Viro Group August 22, 1994
455 Franklin Rd.
Marietta, GA
Holiday Inn/South2/ Viro Group August 22, 1994
6288 Old Dixie HIghway
Jonesboro, GA
Out Parcel No. 1 Viro Group August 22, 1994
455 Franklin Road
Marietta, GA
Out Parcel No. 2 Viro Group August 22, 1994
455 Franklin Road
Marietta, GA
Former Mr. Pride Carwash2/ ATEC September 14, 1994
2081 Northlake Parkway
Tucker, GA
Days Inn Motor Hotel2/ ATEC August 8, 1994
1575 Regal Row
Dallas, TX
Holiday Inn Brookhollow2/ ATEC August 8, 1994
7050 Stemmons Freeway
Dallas, TX
</TABLE>
____________________
3/ Also conducted an asbestos survey; Supplemental Asbestos Bulk Survey
conducted on October 4, 1989.
4/ Phase I Environmental Site Assessment Asbestos Survey also prepared for
location dated September 20, 1994.
- 37 -
<PAGE> 112
<TABLE>
<CAPTION>
SITE REPORT PREPARER DATE OF REPORT
---- --------------- --------------
<S> <C> <C>
7.75 Acres of Land5/ ATEC September 26, 1994
4070 North Central Expressway
Dallas, TX
5 Acres Vacant Land Environmental Engineering August 29, 1994
In a Corner of I-40 and Country Club Consultants, Inc.
Drive
Flagstaff, AZ
Howard Johnson2/ Environmental Engineering July 22, 1994
5101 North Scottsdale Rd. Consultants, Inc.
Scottsdale, AZ
Mr. Pride Carwash2/ Sharpstown ATEC September 9, 1994
7585 Bellaire Blvd.
Houston, TX
Days Inn, I-10 East2/ ATEC August 18, 1994
1055 East Freeway
Houston, TX
Hampton Inn2/ ATEC August 18, 1994
828 Mercury Drive
Houston, TX
Holiday Inn Medical Center2/ ATEC August 18, 1994
6701 South Main St.
Houston, TX
Holiday Inn West Loop2/ ATEC August 18, 1994
3131 West Loop South
Houston, TX
Holiday Inn - Airport2/6/ ATEC August 18, 1994
3702 North Sam Houston Parkway
Houston, TX
</TABLE>
____________________
5/ Asbestos survey performed by ATEC at former hotel facility located on
site on July 8, 1992.
6/ A waste treatment facility is located on the hotel property and notices of
violation from the Harris County Pollution Control Department have been
received, each of which have been remedied. The last such notice was received
on May 22, 1990.
- 38 -
<PAGE> 113
<TABLE>
<CAPTION>
SITE REPORT PREPARER DATE OF REPORT
---- --------------- --------------
<S> <C> <C>
Holiday Inn I-10 West2/ ATEC August 18, 1994
7611 Katy Freeway
Houston, TX
Mr. Pride Carwash2/ ATEC September 21, 1994
1219 East Pioneer Parkway
Arlington, TX
Holiday Inn Santa Barbara2/ Fugro West, Inc. August, 1994
5650 Calle Road
Goleta, CA
Vacant Lot Fronting Environmental Protection August, 1994
Holiday Inn Southwest Systems
2649 U.S. Highway 80 West
Jackson, MS
Holiday Inn North2/ ATEC October 5, 1994
3125 Sinton Road
Colorado Springs, CO
Holiday Inn North2/ Environmental Protection August, 1994
5075 I-55 North Systems
Jackson, MS
Hampton Inn2/7/ Environmental Protection August, 1994
465 Briarwood Drive Systems
Jackson, MS
Holiday Inn Downtown2/ Environmental Protection August, 1994
200 East Amite Street Systems
Jackson, MS
Holiday Inn Southwest2/ Environmental Protection August, 1994
2649 U.S. Highway Southwest Systems
Jackson, MS
Vacant Land - Holiday Inn ATEC September 9, 1994
Medical Center
6703-6719 South Main Street
Houston, TX
</TABLE>
____________________
7/ Includes Report of Soil and Ground Water Investigation of former
McDonald's site, owned by the Company.
- 39 -
<PAGE> 114
<TABLE>
<CAPTION>
SITE REPORT PREPARER DATE OF REPORT
---- --------------- --------------
<S> <C> <C>
6.30 Acres - Vacant Land ATEC September 9, 1994
3800 Block of North Sam
Houston Parkway
Houston, TX
Mr. Pride Carwash ATEC October 25, 1994
Westheimer Site
5320 Westheimer
Houston, TX
Former Mr. Pride Car Wash2/ ATEC September 9, 1994
7211 South Loop East
Houston, TX
Holiday Inn Express2/ ATEC October 5, 1994
725 West Cimmaron Street
Colorado Springs, CO
Days Inn 2/ American Environmental September 30, 1994
1000 West U.S. Highway 66 Network
Flagstaff, AZ
</TABLE>
- 40 -
<PAGE> 115
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.13(B)
GOVERNMENTAL INVESTIGATIONS OR PROCEEDINGS
REGARDING ENVIRONMENTAL MATTERS
The Company calls to your attention new OSHA regulations which
require employers to give notice to employees working in buildings that may be
asbestos-contaminated. The Company is in the process of evaluating these
regulations.
- 41 -
<PAGE> 116
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.13(C)
UNDERGROUND STORAGE TANKS
A 550-gallon diesel petroleum underground storage tank used as a holding tank
for the emergency power generator for the Holiday Inn/Perimeter Dunwoody hotel
location.
- 42 -
<PAGE> 117
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.13(D)
UNDERGROUND STORAGE TANKS -- CLAIMS
See attached Annex
- 43 -
<PAGE> 118
ANNEX TO SCHEDULE 4.13(D)
UNDERGROUND STORAGE TANKS -- CLAIMS
MR. PRIDE CAR WASH SITES
UPDATED AS OF 10/29/94
<TABLE>
<CAPTION>
TTL TTL
ANTICIPATED PAID REIMBURSEMENT REIMBURSEMENT ADMINISTRATIVE
COST TO DATE TO DATE ANTICIPATED STATUS(8)
----------- ------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
ATLANTA
2 Chamblee Unit $ 53,034 $ 53,034 $ 29,274 $ 29,274 Closure
2, 6 Roswell City $128,761 $128,761 $101,294 $101,294
Sandy Springs $131,393 $131,393 $101,062 $101,062 Closure
2 Cobb Parkway $ 73,306 $ 73,306 $ 45,622 $ 45,622 Closure
2 Roswell Road (Buckhead) $103,142 $103,142 $ 68,337 $ 68,337 Closure
Northlake Unit $ 60,554 $ 60,554 $ 37,670 $ 37,670 Closure
-----------------------------------------------------------------------
SUB-TOTAL $550,190 $550,190 $383,259 $383,259
HOUSTON
Memorial Drive $191,427 $191,427 $ 1,424 $134,262 Closure
3 Meyerland (Beechnut) $150,000 $142,734 $126,279 $135,000
Sharpstown $100,000 $ 37,665 $ 0 $ 56,000
Gulfgate $ 68,164 $ 68,164 $ 61,060 $ 61,060 Closure
Westheimer $ 40,000 $ 18,756 $ 0 $ 15,000
-----------------------------------------------------------------------
SUB-TOTAL $509,591 $439,990 $188,763 $386,322
DALLAS
North Richland Hills $ 39,541 $ 39,541 $ 36,778 $ 36,778 Closure
Mid-Cities Unit $ 48,251 $ 48,251 $ 5,525 $ 25,581 Closure
Irving Unit $ 21,840 $ 21,840 $ 0 $ 0 Closure
-----------------------------------------------------------------------
SUB-TOTAL $109,632 $109,632 $ 42,303 $ 62,359
</TABLE>
- 44 -
<PAGE> 119
ANNEX TO SCHEDULE 4.13(D) - CONTINUED
UNDERGROUND STORAGE TANKS -- CLAIMS
<TABLE>
<CAPTION>
TTL TTL
ANTICIPATED PAID REIMBURSEMENT REIMBURSEMENT ADMINISTRATIVE
COST TO DATE TO DATE ANTICIPATED STATUS(8)
----------- ------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
MEMPHIS(7)
4 Park Avenue $ 150,000 $ 120,830 $ 54,391 $ 120,000
4 Union Avenue $ 347,816 $ 299,061 $ 214,645 $ 304,577
Poplar Avenue $ 100,962 $ 100,962 $ 21,574 $ 22,569 Closure
5 Whitehaven $ 281,500 $ 150,931 $ 91,927 $ 247,500
4 Summer Avenue $ 281,500 $ 138,005 $ 81,115 $ 222,500
7 Mt. Moriah $ 41,000 $ 40,036 $ 0 $ 0 Closure
--------------------------------------------------------------------------
SUB-TOTAL $1,202,778 $ 849,825 $ 463,652 $ 917,146
TOTAL $2,372,191 $1,949,638 $1,068,945 $1,749,086
</TABLE>
NOTES
1 All numbers rounded to the nearest dollar.
2 Paid To Date has been adjusted to included work outside the Corrective
Action Plan requirements which was subsequently reimbursed by the
purchaser of the site. The reimbursement has also been reflected in
the Reimbursement To Date column.
3 Water remediation has been placed on hold by state. Will have
quarterly monitoring of water chemistry at approximately $2,400.
4 Water remediation in progress.
5 Water remediation will be required.
6 Not in Schedule. $65,000 held in escrow to be delivered to the
Company by the purchaser of the Roswell City location upon completion
of the remediation of the site.
7 Not in Schedule. $150,000 held in escrow to be delivered to the
Company by the purchaser of the Memphis carwash sites upon completion
of the remediation of the sites.
8 Indicates that the Company has received closure letters from
appropriate regulatory authorities indicating acceptance of the site
under current laws and regulations.
- 45 -
<PAGE> 120
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 4.15
BREACHES, VIOLATIONS AND DEFAULTS
1. The Company has received notice from Holiday Inn that the $250,000
deductible under the Company's general liability insurance policy is
excessive. The Company is negotiating a resolution of this issue
either by obtaining a waiver from Holiday Inn or by posting cash of
$250,000 with insurer to cover the deductible.
2. The Company has failed to meet the "Minimum Cash Flow Coverage Ratio"
with respect to the loan on the Holiday Inn Southwest located in
Jackson, Mississippi. If such failure continues through December 31,
1994, the Company will be in default under the Loan Agreement.
3. Hotel properties that have failed Quality Inspection along with date
of Quality Inspection Report:
(a) Holiday Inn Airport North, Atlanta - 9/29/93
(b) Holiday Inn South, Atlanta - 7/28/94
(c) Holiday Inn Express - I-20 East, Atlanta - 11/3/93
(d) Holiday Inn Brook Hollow, Dallas - 7/7/94
(e) Holiday Inn West Loop near Galleria, Houston - 7/21/94
(f) Holiday Inn North, Jackson - 8/4/94
(g) Holiday Inn Southwest, Jackson - 8/3/94
(h) Holiday Inn Downtown, Jackson - 5/18/94
- 46 -
<PAGE> 121
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 5.1(A)
DISPOSITION OF ASSETS AND PROPERTIES
NONE
- 47 -
<PAGE> 122
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 5.1(B)
CONTRACTS AND AGREEMENTS
1. Execution of Management Agreement or Amendment of Lease Agreement
related to the Atlanta Downtown Ramada Hotel.
2. Execution of documents relating to extension of the Note and Mortgage
of the Ramada Downtown Hotel, Atlanta.
3. Execution of Management Agreement or Amendment of Lease Agreement
related to the Dallas Downtown Howard Johnson Hotel.
4. Execution of Application and related documents for Radisson Hotel
related to the Holiday Inn Downtown in Jackson, Mississippi, which is
scheduled to be removed from the Holiday Inn System on December 15,
1994. The Application has been executed and delivered to Radisson.
5. Execution of Application and related documents to renew the License
for the Holiday Inn located at 5075 I-55 N. Frontage Road, Jackson,
Mississippi. Holiday Inn has denied the Application and the Company
is considering whether to appeal the decision.
6. An Agreement to lease Building "D," consisting of approximately 96
rooms and approximately five (5) meeting rooms which were formerly a
part of the Holiday Inn Airport in Houston, Texas to Continental
Airlines for a period of three (3) years has been executed.
- 48 -
<PAGE> 123
7. Execution of Application and related documents for Ramada Hotel
relating to the Holiday Inn Silber in Houston, Texas which is
scheduled to be removed from the Holiday Inn System on March 15, 1995.
8. Termination of Sublease Agreement between Glenjon Inc. and Market
Center Hotel Company dated December 19, 1985 related to land and
building used as a storage area in Dallas, Texas.
9. See also Schedule 5.1(A).
- 49 -
<PAGE> 124
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 5.1(C)
NEW CAPITAL EXPENDITURES
Although the Company had not anticipated any capital expenditures
outside of the ordinary course of business, the Company may, with the prior
written consent of Purchaser, make substantial capital expenditures to correct
notices of defect with respect to the Holiday Inn Downtown and the Holiday Inn
North in Jackson, Mississippi listed in Item 3 on Schedule 4.15.
- 50 -
<PAGE> 125
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 5.1(D)
AMENDMENT TO CONTRACTS, AGREEMENTS,
COMMITMENTS OR ARRANGEMENTS
See Schedule 5.1(B) and Schedule 5.1(C)
- 51 -
<PAGE> 126
ANNEX IV
DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG UNITED/HARVEY HOLDINGS, L.P.,
UNITED/HARVEY HOTELS, INC.,
UNITED/HARVEY SUB, INC.
AND
UNITED INNS, INC.
DATED AS OF NOVEMBER 14, 1994
SCHEDULE 5.1(E)
INCREASE IN COMPENSATION OR GRANTS OR
PAYMENTS OF SEVERANCE OR TERMINATION PAY
None
- 52 -
<PAGE> 1
EXHIBIT 99.(c)(2)
COMBINATION AGREEMENT
This COMBINATION AGREEMENT (this "Agreement") is made and
entered into as of November 14, 1994 by and among United/Harvey Holdings, L.P.,
a Delaware limited partnership ("Holdings"), United/Harvey Hotels, Inc., a
Delaware corporation ("New Parent"), United/Harvey Sub, Inc., a Delaware
corporation ("Merger Sub"), Harvey Hotel Company, Ltd., a Texas limited
partnership ("Harvey Hotels"), Harvey Hotel Management Corporation, a Texas
corporation ("Harvey Management"), and each of the other persons signatory
hereto (collectively the "Harvey Equity Holders").
RECITALS
A. Contemporaneously with the execution and delivery of
this Agreement, Holdings, New Parent, Merger Sub and United Inns, Inc., a
Delaware corporation ("United"), entered into an Agreement and Plan of Merger,
dated as of the date hereof (as the same may be amended from time to time, the
"Merger Agreement"), which provides for, among other things, (1) the
commencement by Holdings of a tender offer (the "Offer") to purchase all issued
and outstanding shares of Common Stock, par value $1.00 per share, of United
(the "United Common Shares") at a price of $25.00 per share, net to the seller
in cash (as from time to time increased or decreased, the "Per Share Amount"),
and (2) the merger of Merger Sub with and into United (the "United Merger"), in
each case on the terms and subject to the conditions set forth therein.
B. The parties hereto desire to provide for the
consummation of the transactions provided for herein, which will, among other
things, result in (1) all of the equity interests in each of Harvey Hotels,
Harvey Management and United being owned by New Parent and (2) all of the
equity interests in New Parent being owned by Holdings, former holders of
equity interests in Harvey Hotels and Harvey Management and, under certain
circumstances, former stockholders of United, in each case on the terms and
subject to the conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants herein contained, and intending to be legally bound hereby,
the parties hereby agree as follows:
<PAGE> 2
ARTICLE I
THE COMBINATION TRANSACTIONS
SECTION 1.1 Contributions by Holdings to New Parent.
On the terms and subject to the conditions set forth herein, on the Closing
Date (as hereinafter defined), Holdings will (a) contribute each United Common
Share then owned by it to New Parent in exchange for one share of Common Stock,
par value $0.01 per share, of New Parent (a "New Parent Common Share") and (b)
contribute to New Parent cash in an amount equal to the Huie Family Cash Amount
in exchange for a number of New Parent Common Shares equal to the quotient that
results from dividing (i) the Huie Family Cash Amount by (ii) the Per Share
Amount. For purposes of this Agreement, the term "Huie Family Cash Amount"
means the aggregate amount of cash distributable by New Parent pursuant to
Section 1.2.
SECTION 1.2 Contributions by Harvey Equity Holders to New
Parent.
(a) On the terms and subject to the conditions set forth
herein, on the Closing Date (i) H.K. Huie, Jr. ("Huie") will contribute the
outstanding equity interests in each of Harvey Hotels and Harvey Management
(together, the "Harvey Companies") owned by him (which will constitute 50.6% of
the then-outstanding partnership interests in Harvey Hotels and 50.6% of the
then-outstanding shares of capital stock of Harvey Management) to New Parent in
exchange for (A) an amount in cash equal to the product of 25.3% and the Harvey
Equity Value and (B) a number of New Parent Common Shares equal to the quotient
that results from dividing (1) the product of 25.3% and the Harvey Equity Value
by (2) the Per Share Amount. For purposes of this Agreement, the term "Harvey
Equity Value" means the agreed upon value of the aggregate equity interests in
the Harvey Companies of $53,090,273, subject to adjustment in accordance with
Section 1.3 (with any such adjustment and all effects thereof being deemed for
all purposes to constitute an adjustment to the amount of consideration
received or receivable by the Harvey Equity Holders in exchange for their
respective contributions to New Parent pursuant to this Section 1.2).
(b) On the terms and subject to the conditions set forth
herein, on the Closing Date (i) each of Molly Ann Huie, Mindy Sue Huie and
Melissa Huie Chenault (collectively, the "Huie Daughters"), provided that she
is a signatory to this Agreement, will contribute the outstanding equity
interests in each of Harvey Hotels and Harvey Management owned by her (which in
each case will constitute 1.0% of the then-outstanding partnership interests in
Harvey Hotels and 1.0% of the then-outstanding shares of capital stock of
Harvey Management) to New Parent in exchange for, at her option as set forth in
a written notice delivered to Holdings at least five business days prior to the
Closing Date, (A) an amount in cash equal to the product of 1.0%
-2-
<PAGE> 3
and the Harvey Equity Value, (B) a number of New Parent Common Shares equal to
the quotient that results from dividing (1) the product of 1.0% and the Harvey
Equity Value by (2) the Per Share Amount, or (C) a combination of the
consideration described in clauses (A) and (B) of this sentence (provided that
the aggregate amount of such consideration, with each New Parent Common Share
being deemed to have a value equal to the Per Share Amount, shall not exceed
1.0% of the Harvey Equity Value). The failure by any of the Huie Daughters who
is a signatory hereto to make a timely election as aforesaid will be deemed an
election to receive solely the consideration described in clause (B) of the
immediately preceding sentence.
(c) Each other Harvey Equity Holder will contribute the
equity interests in the Harvey Companies owned by such Harvey Equity Holder
(which in the aggregate will constitute 46.4% of the then-outstanding
partnership interests in Harvey Hotels and 46.4% of the then-outstanding
capital stock of Harvey Management) to New Parent in exchange for a number of
New Parent Common Shares equal to the quotient that results from dividing (i)
the product of (A) the percentage of the total outstanding equity interests in
the Harvey Companies so contributed by such Harvey Equity Holder and (B) the
Harvey Equity Value by (ii) the Per Share Amount.
SECTION 1.3 Possible Adjustments to Harvey Equity Value.
(a) The valuation methodology pursuant to which the
estimated Harvey Equity Value of $53,090,273 was determined (the "Valuation
Methodology") is set forth in an agreement, dated October 31, 1994, between the
Harvey Companies and The Hampstead Group, Inc. The estimated Harvey Equity
Value, as determined pursuant to the Valuation Methodology, is based upon
unaudited financial information concerning the Harvey Companies and their
consolidated Subsidiaries (as hereinafter defined) as of and for the fiscal
year ended September 30, 1994 (the "Unaudited Financial Statements") provided
to Holdings by the Harvey Companies. Subject to the last sentence of this
Section 1.3(a), as promptly as practicable after the date hereof (and in no
event later than December 10, 1994), the Harvey Companies will deliver to
Holdings true, correct and complete copies of (i) audited Balance Sheets of the
Harvey Companies and their consolidated Subsidiaries as of September 30, 1994
and 1993, (ii) audited Statements of Operations of the Harvey Companies and
their consolidated Subsidiaries for the fiscal years ended September 30, 1994,
1993 and 1992, and (iii) audited Statements of Cash Flows of the Harvey
Companies and their consolidated Subsidiaries for the fiscal years ended
September 30, 1994, 1993 and 1992, together with the related notes thereto.
Such financial statements (the "Audited Financial Statements") will be prepared
using the same accounting principles, practices and procedures used in
preparing the Unaudited Financial Statements and will reflect such audit
adjustments as may be necessary so that Price Waterhouse L.L.P. is able to
render its written report thereon to
-3-
<PAGE> 4
the effect that the Audited Financial Statements present fairly the financial
position, results of operations and cash flows of the Harvey Companies and
their consolidated Subsidiaries as of the dates and for the periods presented.
As promptly as practicable (and in any event within two business days) after
such delivery of the Audited Financial Statements, Holdings and the Harvey
Companies will recompute the Harvey Equity Value based upon the financial
information contained in the Audited Financial Statements, utilizing the
Valuation Methodology and will add thereto an amount (not to exceed $1.0
million) equal to the aggregate amount of documented capital expenditures made
by the Harvey Companies subsequent to September 30, 1994; it being agreed and
acknowledged that (i) the Harvey Companies' Greenway Plaza renovation project
is over budget and the ultimate cost thereof will be approximately $625,000
over the unfunded portion of the related loan commitment, (ii) New Parent will
be responsible for funding the cost of such project in excess of the related
loan commitment, and (iii) no adjustment will be made to the value of the
equity interests in the Harvey Companies or pursuant to Section 1.6 on account
of the matters referred to in the preceding clauses (i) and (ii). Such
recomputed Harvey Equity Value, as so increased, will thereupon be the Harvey
Equity Value for all purposes of this Agreement, subject to possible adjustment
pursuant to Section 1.3(b). Notwithstanding anything to the contrary herein
contained, the Harvey Companies will provide to Holdings, as promptly as
practicable after the date hereof, a draft of the Audited Financial Statements
and will thereafter provide Holdings and its representatives a reasonable
opportunity to review and consult with the Harvey Companies and Price
Waterhouse L.L.P. regarding the same prior to the time at which they are
finalized.
(b) As promptly as practicable (and in any event within
15 business days) after the date on which the Harvey Disclosure Schedule (as
hereinafter defined) is finalized and attached to this Agreement pursuant to
Section 5.16, Holdings will notify the Harvey Companies as to whether Holdings
shall have discovered Adjustment Matters (as hereinafter defined) which, in the
aggregate, in Holdings' good faith judgment, impair the value of the equity
interests in the Harvey Companies (relative to the Harvey Equity Value computed
in accordance with Section 1.3(a)) by more than $500,000 (the "Adjustment
Hurdle") and, if so, Holdings' good faith estimate of the amount of such excess
(the "Adjustment Amount") over the Adjustment Hurdle. If the Adjustment Amount
is equal to or less than $1,000,000, the Harvey Equity Value determined
pursuant to Section 1.3(a) will be reduced by an amount equal to the Adjustment
Amount and, as so reduced, will be the Harvey Equity Value for all purposes of
this Agreement. If the Adjustment Amount is greater than $1,000,000, the
Harvey Companies may elect, by delivering to Holdings a written notice setting
forth such election within five business days following the Harvey Companies'
receipt of Holdings' estimate of the Adjustment Amount, either (i) to reduce
the Harvey Equity Value determined pursuant to Section 1.3(a) by an
-4-
<PAGE> 5
amount equal to the Adjustment Amount (in which case the Harvey Equity Value,
as so determined and reduced, will be the Harvey Equity Value for all purposes
of this Agreement) or (ii) to the extent that Adjustment Matters affect only a
particular property or properties, to transfer to a third party (other than any
Subsidiary of either of the Harvey Companies) prior to the Closing Date such
property or properties (the "Transferable Properties") as, in the aggregate,
give rise to the smallest portion of the Adjustment Amount necessary to reduce
the Adjustment Amount to $1,000,000 or less (in which case the Harvey Equity
Value, as determined pursuant to Section 1.3(a) and as reduced by the sum of
(A) the Adjustment Amount, as reduced in the manner contemplated in this clause
(ii), and (B) the value of the Transferable Properties, determined in
accordance with the Valuation Methodology, will be the Harvey Equity Value for
all purposes of this Agreement). For purposes of this Agreement, the term
"Adjustment Matters" means any matter or matters within the scope of the
representations and warranties of the Harvey Companies set forth in Article III
or the covenants of the Harvey Companies set forth in Article IV which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect (as hereinafter defined).
(c) To the extent that the applicable parties are unable
to agree upon the amount of any adjustment to the Harvey Equity Value provided
for in Sections 1.3(a) or (b), as applicable, prior to the Closing Date (each
party hereby agreeing to negotiate in good faith and otherwise to use its
reasonable best efforts to reach agreement thereupon prior to the Closing
Date), (i) the Combination Transactions (as hereinafter defined) will be
consummated on the Closing Date on the basis of the estimated Harvey Equity
Value of $53,090,273, as adjusted in accordance with Section 1.3(a) and/or (b),
as applicable, in each case to the extent the parties are able to agree
thereupon prior to the Closing Date, (ii) any accounting or computational
issues remaining in dispute as of the Closing will be resolved in accordance
with Section 1.3(d), (iii) any non-accounting or non-computational issues will
be resolved in accordance with Section 1.3(e), and (iv) following the
resolution of all such issues, (A) any Person (as hereinafter defined) that
received more cash and/or New Parent Common Shares at the Closing than such
Person would have received had all such issues been so resolved prior to the
Closing will promptly deliver to New Parent all such excess cash and/or New
Parent Common Shares and (B) New Parent will promptly deliver to any Person
that received less cash and/or New Parent Common Shares at the Closing than
such Person would have received had all such issues been so resolved prior to
the Closing an amount of cash and/or a number of New Parent Common Shares equal
to such shortfall.
(d) New Parent and J. Peter Kline ("Kline"), as the
representative of the Harvey Equity Holders (in such capacity, the
"Representative"), will promptly submit any dispute described in clause (ii) of
Section 1.3(c) to a "Big Six" accounting firm
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mutually agreed to by New Parent and the Representative (the "Accountants").
The Accountants will make a determination as to each of the items in dispute,
which determination will be (i) in writing, (ii) furnished to each party to the
dispute as promptly as practicable, (iii) made in accordance with this
Agreement, and (iv) conclusive and binding for all purposes of this Agreement.
In connection with their determination of the items in dispute, the Accountants
will be entitled to rely on the workpapers, trial balances and similar
materials prepared by Price Waterhouse L.L.P. in connection with such firm's
examination of the financial statements of the Harvey Companies (and the Harvey
Companies will use reasonable efforts to cause such materials to be made
available to the Accountants). The fees and expenses of the Accountants will
be borne by New Parent. New Parent and the Representative will use reasonable
efforts to cause the Accountants to render their determination as soon as
practicable, including without limitation by promptly complying with all
reasonable requests by the Accountants for information, books, records and
similar items.
(e) New Parent and the Representative will promptly
submit any dispute described in clause (iii) of Section 1.3(c) to an arbitrator
to be settled by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction in
respect thereof. All costs and expenses of the arbitration, including actual
attorneys' fees, will be allocated among the parties to the arbitration
according to the arbitrator's discretion. The arbitrator's award resulting
from such arbitration may be confirmed and entered as a final judgment in any
court of competent jurisdiction and enforced accordingly, and proceeding to
arbitration and obtaining an award pursuant thereto will be a condition
precedent to bringing or maintaining any action in any court with respect to
any such dispute, except for the institution of a civil action to maintain the
status quo during the pendency of any arbitration proceeding.
SECTION 1.4 The Closing.
(a) The consummation (the "Closing") of the transactions
contemplated by the foregoing provisions of this Article I (the "Combination
Transactions") will take place at the offices of Jones, Day, Reavis & Pogue,
2001 Ross Avenue, Dallas, Texas at 10:00 a.m., local time, on the date (the
"Closing Date") that is five business days after satisfaction or waiver of the
conditions (other than any conditions to be satisfied concurrently with the
Closing) set forth in Article VI (or such other date as the parties may
otherwise agree); provided in any event that (i) all of the conditions set
forth in Article VI shall have been satisfied or waived prior to or at the
Closing and (ii) the Closing shall not occur prior to January 1, 1995.
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(b) At the Closing:
(i) Holdings will deliver to New Parent (A) such
documents and instruments as New Parent may determine to be
reasonably necessary to permit New Parent to acquire good and
valid title to all United Common Shares owned by Holdings,
free and clear of any and all liens, claims, charges,
encumbrances or other restrictions of any kind or character
(collectively, "Encumbrances"), and (B) cash in the amount
equal to the Huie Family Cash Amount;
(ii) New Parent will deliver to Holdings, against
delivery by Holdings of the items described in the preceding
clause (i), the consideration therefor as provided in Section
1.1;
(iii) each Harvey Equity Holder will deliver to New
Parent such documents and instruments as New Parent may
determine to be reasonably necessary to permit New Parent to
acquire good and valid title to all of the equity interests in
the Harvey Companies owned by such Harvey Equity Holder, free
and clear of any and all Encumbrances;
(iv) New Parent will deliver to each Harvey Equity
Holder, against delivery by such Harvey Equity Holder of the
items described in the preceding clause (iii), the
consideration therefor as provided in Section 1.2; and
(v) Holdings will deliver to the Harvey Companies
a certificate to the effect that, prior to the Closing,
Holdings was afforded access to the books, records and
contracts of the Harvey Companies, and an opportunity to ask
questions of and receive answers from representatives of the
Harvey Companies, in connection with the transactions
contemplated hereby.
(c) Each of the Harvey Equity Holders hereby represents
and warrants to each of Holdings, New Parent and Merger Sub that, upon delivery
thereof as provided in Section 1.4(b), New Parent will obtain good and valid
title to the equity interests in the Harvey Companies set forth on the
signature page of this Agreement opposite such Harvey Equity Holder's name,
free and clear of any and all Encumbrances, and the sole and unrestricted
voting power and power of disposition with respect to such equity interests.
(d) Except as expressly contemplated by this Agreement,
during the period from the date hereof until the earlier to occur of the
Closing or the termination of this Agreement in accordance with its terms, none
of the Harvey Equity Holders will, directly or indirectly:
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(i) sell, offer for sale, transfer, assign,
pledge, hypothecate or otherwise dispose of or encumber in any
manner or limit its right to vote in any manner any of its
equity interests in the Harvey Companies;
(ii) take any other action or omit to take any
action that would be reasonably likely to cause any
representation or warranty contained in Section 1.4(c) to be
untrue or incorrect; or
(iii) solicit or initiate or engage in negotiations
or discussions concerning any proposal or offer from any
Person relating to any acquisition or purchase of any of its
equity interests in the Harvey Companies.
(e) Notwithstanding anything to the contrary herein
contained, at the Closing, only whole numbers of New Parent Common Shares will
be issued pursuant Sections 1.1 and 1.2. When any distribution of New Parent
Common Shares to any Person in accordance with Section 1.1 or Section 1.2 would
otherwise result in the issuance of a number of New Parent Common Shares that
is not a whole number, the number of New Parent Common Shares to which such
Person will be entitled will be rounded to the next higher or lower whole
number as follows: (i) fractions of one-half or greater will be rounded to the
next higher whole number and (ii) fractions of less than one-half will be
rounded to the next lower whole number.
SECTION 1.5 Additional Contributions by Holdings.
(a) At the effective time of the United Merger (the
"Effective Time"), Holdings will contribute cash to New Parent in an amount
equal to the United Merger Cash Amount in exchange for a number of New Parent
Common Shares equal to the quotient that results from dividing (i) the United
Merger Cash Amount by (ii) the Per Share Amount. For purposes of this
Agreement, the term "United Merger Cash Amount" means an amount equal to the
product of (i) the Per Share Amount and (ii) the number of United Common Shares
that are to be converted into the right to receive cash pursuant to the Merger
Agreement.
(b) In addition to the contributions of Holdings to New
Parent provided for in Sections 1.1 and 1.5(a), following the Effective Date
and on or before July 1, 1995, Holdings will contribute to New Parent
$10,000,000 in cash in exchange for shares of 9% Cumulative Convertible
Preferred Stock, par value $0.01 per share, of New Parent ("New Parent
Preferred Shares") having an aggregate liquidation preference of $10,000,000
and such other preferences and rights to which Holdings and the Harvey
Companies may mutually agree prior to the Closing Date. Holdings will deliver
to New Parent a written notice specifying the date, time and place for the
closing of the transaction contemplated by this Section 1.5(b), which date will
be no fewer
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than three nor more than 15 business days from the date such notice is given.
(c) Subject to the last sentence of this Section 1.5(c),
the Board of Directors of New Parent, from time to time, during the period
commencing at the Effective Time and ending on the third anniversary of the
Effective Time, may require Holdings to contribute to New Parent one or more
amounts in cash, not to exceed $20,000,000 in the aggregate. Upon making any
such contribution, Holdings will receive in exchange a number of New Parent
Preferred Shares having an aggregate liquidation preference equal to the amount
of such contribution. The Board of Directors of New Parent may exercise its
right pursuant to this Section 1.5(c) by delivering to Holdings a written
request specifying the amount to be contributed by Holdings (which in any event
shall be $5,000,000 or an integral multiple of $1,000,000 in excess of
$5,000,000) and the date, time and place for the closing of such transaction,
which date will be no fewer than 10 nor more than 15 business days from the
date such notice is given and not later than the third anniversary of the
Effective Time. Notwithstanding anything to the contrary herein contained, the
preceding provisions of this Section 1.5(c) will be of no force or effect if,
pursuant to the United Merger, each United Common Share outstanding immediately
prior to the Effective Time (other than United Common Shares owned by New
Parent or by any Person that shall have demanded and perfected appraisal rights
with respect to United Common Shares) is converted into a right to receive
cash.
SECTION 1.6 Harvey Working Capital Adjustments.
(a) As promptly as practicable (and in any event within
20 calendar days) after the Closing Date, New Parent will prepare and deliver
to the Representative a statement (the "WC Statement") setting forth the amount
that results from subtracting the current liabilities of the Harvey Companies
and their consolidated Subsidiaries as of the Closing Date from the current
assets of the Harvey Companies as of the Closing Date (the "Closing Date WC
Amount"). For purposes of preparing the WC Statement and determining the
Closing Date WC Amount to be set forth therein, the current assets and
liabilities of the Harvey Companies and their consolidated Subsidiaries as of
the Closing Date will be determined using the same accounting principles,
practices and procedures used in the preparation of the Balance Sheets of the
Harvey Companies and their consolidated Subsidiaries as of September 30, 1994
included in the Audited Financial Statements.
(b) The Representative will have 10 calendar days
following delivery of the WC Statement during which to review the WC Statement.
Within the 10-day period (the "WC Dispute Notice Period"), the Representative
may give notice (a "WC Dispute Notice") to New Parent in the event that the
Representative determines in good faith that the WC Statement was not prepared
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in accordance with this Agreement and, as a result, any amount required to be
set forth therein is misstated by more than $50,000. Any WC Dispute Notice
will specify in reasonable detail the basis for the Representative's
disagreement with any such amount. If the Representative fails to deliver a WC
Dispute Notice to New Parent within the WC Dispute Notice Period, the
Representative will be deemed to have irrevocably waived the right to deliver a
WC Dispute Notice and the WC Statement will thereupon become final and binding
for all purposes of this Agreement. New Parent and the Representative may, at
any time, resolve any disagreement between them and, upon the execution of a
written instrument to that effect by each of New Parent and the Representative,
the WC Statement, as modified to reflect such resolution, will become final and
binding for all purposes of this Agreement. If New Parent and the
Representative are unable to resolve any disagreement between them within 10
calendar days following delivery of a WC Dispute Notice, the items of
disagreement will be referred to the Accountants. The Accountants will make a
determination (the "Accountants' Determination") as to each of the items of
disagreement, which determination will be (A) in writing, (B) furnished to New
Parent and the Representative as promptly as practicable after the items of
disagreement have been referred to the Accountants, (C) made in accordance with
this Agreement, and (D) conclusive and binding for all purposes of this
Agreement. In connection with their determination of the items of
disagreement, the Accountants will be entitled to rely on the workpapers, trial
balances and similar materials prepared by Price Waterhouse L.L.P. in
connection with such firm's examination of the financial statements of the
Harvey Companies (and the Harvey Companies will use reasonable efforts to cause
such materials to be made available to the Accountants). The fees and expenses
of the Accountants will be borne by New Parent. New Parent and Representative
will use reasonable efforts to cause the Accountants to render the Accountants'
Determination as soon as practicable, including without limitation by promptly
complying with all reasonable requests by the Accountants for information,
books, records and similar items. Upon the delivery of the Accountants'
Determination to each of New Parent and the Representative, the WC Statement,
as modified to reflect the Accountants' Determination, will become final and
binding for all purposes of this Agreement. As promptly as practicable (and in
any event within five calendar days) following the date on which the WC
Statement becomes final and binding in accordance with this Section 1.6(b), New
Parent will notify the Harvey Equity Holders in writing that the WC Statement
has become final and binding. Such notice will be accompanied by copies of the
final WC Statement.
(c) Within 10 calendar days following the date on which
the WC Statement becomes final and binding in accordance with Section 1.6(b),
(i) New Parent will pay to the Harvey Equity Holders an amount in cash equal to
the product of (A) the percentage of the total outstanding equity interests in
the Harvey Companies contributed by such Harvey Equity Holder to New
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Parent pursuant to Section 1.2 and (B) the amount, if any, by which the Closing
Date WC Amount exceeds zero, or (ii) each of the Harvey Equity Holders will
contribute to New Parent, without additional consideration therefor, an amount
in cash equal to the product of (A) the percentage of the total outstanding
equity interests in the Harvey Companies contributed by such Harvey Equity
Holder to New Parent pursuant to Section 1.2 and (B) the amount, if any, by
which the Closing Date WC Amount is less than zero
SECTION 1.7 Tax Reporting. The parties hereto agree that the
transactions described in Section 1.2 constitute an exchange described in
section 351 of the Internal Revenue Code of 1986, as amended (the "Code"). In
that regard, New Parent and each of the other parties hereto hereby covenants
to the other parties that its books and records and tax returns will be
prepared in a manner that is consistent with the treatment of such transactions
as exchanges described in said section 351. None of the parties hereto will
take any action or cause or permit any action to be taken by any other Person
controlled by such party that could result in such transactions not qualifying
under said section 351.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
HOLDINGS, NEW PARENT AND MERGER SUB
Holdings, New Parent and Merger Sub hereby jointly and
severally represent and warrant to each of Harvey Hotels and Harvey Management
that:
SECTION 2.1 Corporate Organization. Each of Holdings, New
Parent and Merger Sub is a limited partnership or corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite power and authority and any necessary governmental
authority to own, operate or lease the properties that it purports to own,
operate or lease and to carry on its business as it is now being conducted,
except where the failure of the foregoing to be true would not have a material
adverse effect on its ability to perform its obligations under this Agreement.
The Certificate of Incorporation and By-Laws of New Parent in effect on the
Closing Date will be in substantially the forms attached hereto as Annexes I
and II, respectively.
SECTION 2.2 Authority Relative to this Agreement. Each of
Holdings, New Parent and Merger Sub has all necessary limited partnership or
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement by each of
Holdings, New Parent and Merger Sub, the performance by Holdings, New Parent
and Merger Sub of their respective obligations hereunder
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and the consummation by Holdings, New Parent and Merger Sub of the transactions
contemplated hereby have been duly authorized by all necessary limited
partnership or corporate action on the part of Holdings, New Parent or Merger
Sub, as applicable. This Agreement has been duly executed and delivered by
each of Holdings, New Parent and Merger Sub and, assuming the due
authorization, execution and delivery by the other parties hereto, this
Agreement constitutes a legal, valid and binding obligation of each of
Holdings, New Parent and Merger Sub, enforceable against each of Holdings, New
Parent and Merger Sub in accordance with its terms.
SECTION 2.3 No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this
Agreement by Holdings, New Parent and Merger Sub do not and will not (i)
conflict with or violate any material law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award applicable to Holdings,
New Parent or Merger Sub or by which Holdings, New Parent or Merger Sub or any
of their respective properties is bound or affected, (ii) violate or conflict
with the constituent documents of Holdings, New Parent or Merger Sub, or (iii)
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of any Encumbrance on any of the property or assets of Holdings,
New Parent or Merger Sub pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Holdings, New Parent or Merger Sub is a party or by which
Holdings, New Parent or Merger Sub or any of their respective properties may be
bound or affected, except where the failure of the foregoing to be true would
not have a material adverse effect on the ability of Holdings, New Parent or
Merger Sub to perform its obligations under this Agreement.
(b) The execution and delivery of this Agreement by
Holdings, New Parent and Merger Sub do not, and the performance of this
Agreement by Holdings, New Parent and Merger Sub will not, require any consent,
approval, authorization or other action by, or filing with or notification to,
any governmental or regulatory authority, domestic or foreign, or any third
party or parties, except (i) for compliance with (A) applicable requirements,
if any, of the Securities Act of 1933, as amended (the "Securities Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), state
securities laws ("Blue Sky laws") and state takeover laws, (B) the notification
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder (the "HSR Act"), and (C) the
applicable requirements, if any, of state environmental control laws, and (ii)
where failure to obtain such consents, approvals, authorizations or actions, or
to make such
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filings or notifications, would not prevent Holdings, New Parent or Merger Sub
from performing its obligations under this Agreement.
SECTION 2.4 Issuance of New Parent Shares. All New Parent
Common Shares and New Parent Preferred Shares to be issued and delivered
pursuant to this Agreement will, upon such issuance and delivery in accordance
with the applicable provisions hereof, be duly authorized, validly issued,
fully paid and nonassessable.
SECTION 2.5 Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by and on behalf of Holdings, New Parent or Merger Sub.
SECTION 2.6 Investment Intent. Holdings is acquiring the New
Parent Common Shares and New Parent Preferred Shares to be acquired by it
hereunder for its own account and for investment purposes, and does not intend
to redistribute such New Parent Common Shares or New Parent Preferred Shares
(except in a transaction or transactions exempt from registration under the
federal and state securities laws or pursuant to an effective registration
statement under such laws).
SECTION 2.7 Sole Bidder in the Offer. The execution and
delivery of this Agreement by the Harvey Companies, and the consummation of the
transactions contemplated hereby, will not result in either of the Harvey
Companies or any of the Harvey Equity Holders being deemed to be a "bidder"
within the meaning of Rule 14d-1(c)(1) under the Exchange Act with respect to
the Offer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF HARVEY HOTELS AND HARVEY MANAGEMENT
Harvey Hotels and Harvey Management hereby jointly and
severally represent and warrant to each of Holdings, New Parent and Merger Sub
that:
SECTION 3.1 Organization and Qualification; Subsidiaries.
Each of Harvey Hotels and Harvey Management and each of their respective
Subsidiaries (collectively, the "Harvey Entities") is a corporation or limited
partnership duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has the
requisite corporate or limited partnership power and authority and any
necessary governmental authority to own, operate or lease the properties that
it purports to own, operate or lease and to carry on its business as it is now
being conducted, and is duly qualified or licensed to do business as a
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foreign corporation or limited partnership in good standing in each
jurisdiction where the character of its properties owned, operated or leased or
the nature of its activities makes such qualification or license necessary,
except as disclosed in Schedule 3.1, Part A of the Disclosure Schedule attached
as Annex III hereto (the "Harvey Disclosure Schedule"), or except where such
failure would not have a Material Adverse Effect. For purposes of this
Agreement, the term "Material Adverse Effect" means a material adverse affect
on the business, operations, property or condition (financial or otherwise) of
the Harvey Entities taken as a whole. A true and complete list of all of the
Harvey Entities, together with the jurisdiction of incorporation or
organization of each Harvey Entity and the percentage of each Harvey Entity's
outstanding capital stock or partnership interests owned by Harvey Hotels,
Harvey Management or another Harvey Entity, is set forth in Schedule 3.1, Part
B of the Harvey Disclosure Schedule. For purposes of this Agreement, a
"Subsidiary" of a Person means any corporation, partnership, joint venture,
association or other entity, wherever and however organized, in which such
Person owns directly or indirectly or has the right to acquire any capital
stock, equity or beneficial interest, is a partner, or otherwise controls
management of, by having the right or ability to designate a majority of the
directors or members of the governing body thereof, whether by agreement or
otherwise.
SECTION 3.2 Organizational Documents. Harvey Hotels and
Harvey Management have heretofore furnished to United and Holdings a complete
and correct copy of the Articles of Incorporation and By-Laws, partnership
agreement or equivalent organizational documents, each as amended to date, of
each of the Harvey Entities. Such Articles of Incorporation, By-Laws,
partnership agreements and equivalent organizational documents are in full
force and effect. None of the Harvey Entities is in violation of any of the
provisions of its Articles of Incorporation, By-Laws, partnership agreement or
equivalent organizational documents.
SECTION 3.3 Capitalization. The names of all of the partners
of Harvey Hotels and their respective partnership interests of each such
partner therein (collectively, the "Harvey Hotels Partnership Interests") are
as set forth on the signature page hereto. All such partnership interests are
validly issued and outstanding. The authorized capital stock of Harvey
Management consists of 5,000,000 shares of Common Stock, par value $1.00 per
share (the "Harvey Management Common Shares"), of which 1,219 shares are issued
and outstanding. The names of all of the holders of issued and outstanding
Harvey Management Common Shares and the respective holdings of each such holder
of such shares are as set forth on the signature page hereto. All issued and
outstanding Harvey Management Common Shares are duly authorized, validly
issued, fully paid and nonassessable. Except for the obligations under this
Agreement, and as set forth in Schedule 3.3, Part B of the Harvey Disclosure
Schedule, there are
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no options, warrants or other rights, agreements, arrangements or commitments
of any character relating to the issued or unissued capital stock of or
partnership interests in any of the Harvey Entities or obligating any of the
Harvey Entities to issue or sell any shares of capital stock or partnership or
other equity interests in any of the Harvey Entities. Except as set forth in
Schedule 3.3, Part C of the Harvey Disclosure Schedule, there are no
outstanding contractual obligations of any of the Harvey Entities to
repurchase, redeem or otherwise acquire any Harvey Management Common Shares or
any Harvey Hotels Partnership Interests, or to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in any
Harvey Entity or any other entity. Each of the outstanding shares of capital
stock of or partnership interests in each of the Harvey Entities is duly
authorized, validly issued, fully paid and nonassessable.
SECTION 3.4 Authority Relative to this Agreement. Each of
Harvey Hotels and Harvey Management has all necessary corporate or limited
partnership power and authority to enter into this Agreement and to carry out
its obligations hereunder. The execution and delivery of this Agreement by
Harvey Hotels and Harvey Management, the performance by Harvey Hotels and
Harvey Management of their obligations hereunder and the consummation by Harvey
Hotels and Harvey Management of the transactions contemplated hereby have been
duly authorized by all necessary corporate or limited partnership action on the
part of Harvey Hotels and Harvey Management, as applicable. This Agreement has
been duly executed and delivered by Harvey Hotels and Harvey Management and,
assuming due authorization, execution and delivery by the other parties hereto,
this Agreement constitutes a legal, valid and binding obligations of Harvey
Hotels and Harvey Management, enforceable against Harvey Hotels and Harvey
Management in accordance with its terms.
SECTION 3.5 No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this
Agreement by Harvey Hotels and Harvey Management do not and will not (i)
conflict with or violate any material law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award applicable to any of the
Harvey Entities or by which any of their respective properties are bound or
affected, (ii) violate or conflict with the Articles of Incorporation, By-Laws,
partnership agreement or equivalent organizational documents of any of the
Harvey Entities, or (iii) result in any breach of or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of any Encumbrance on any of the
properties or assets of any of the Harvey Entities, pursuant to (A) any note,
bond, mortgage, indenture or other evidence of indebtedness, except as
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set forth in Schedule 3.5, Part A of the Harvey Disclosure Schedule, (B) any
contract, service agreement, lease, license or permit, except as set forth in
Schedule 3.5, Part B of the Harvey Disclosure Schedule, or (C) any franchise
instrument or obligation related thereto, except as set forth in Schedule 3.5,
Part C of the Harvey Disclosure Schedule, in each case to which any of the
Harvey Entities is a party or by any of which any of the Harvey Entities or any
of their respective properties may be bound or affected, where such breach,
default, termination, acceleration, cancellation or Encumbrance would have a
Material Adverse Effect.
(b) The execution and delivery of this Agreement by
Harvey Hotels and Harvey Management do not, and the performance of this
Agreement by Harvey Hotels and Harvey Management will not, require any consent,
approval, authorization or other action by, or filing with or notification to,
any governmental or regulatory authority, domestic or foreign, or any third
party or parties, except (i) for compliance with (A) applicable requirements,
if any, of the Securities Act, the Exchange Act, Blue Sky laws and state
takeover laws, (B) the notification requirements of the HSR Act, and (C)
approvals under relevant state environmental control laws, (ii) as set forth in
Schedule 3.5, Part D of the Harvey Disclosure Schedule, and (iii) where failure
to obtain such consents, approvals, authorizations or actions, or to make such
filings or notifications, would not prevent Harvey Hotels and Harvey Management
from performing their respective obligations under this Agreement and would not
have Material Adverse Effect.
SECTION 3.6 Financial Statements.
(a) Attached as Schedule 3.6, Part A of the Harvey
Disclosure Schedule are true and correct copies of the consolidated financial
statements of Harvey Hotels and its Subsidiaries as of and for the periods
indicated therein (the "Harvey Hotels Financial Statements"). The Harvey
Hotels Financial Statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except as may be otherwise indicated in the notes thereto)
and fairly present either, as the case may be, the consolidated financial
position of Harvey Hotels at the respective dates thereof or its consolidated
results of operations or changes in financial position for the period
indicated.
(b) Except as and to the extent set forth on the most
recent consolidated balance sheet of Harvey Hotels and its Subsidiaries
included within the Harvey Hotels Financial Statements (the "Harvey Hotels
Balance Sheet"), and except for liabilities with respect to the transactions
contemplated hereby, and except as set forth in Schedule 3.6, Part A of the
Harvey Disclosure Schedule, neither Harvey Hotels nor any of its Subsidiaries
has any liabilities or obligations, whether or not
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accrued, contingent or otherwise, that would be required to be included on a
balance sheet prepared in accordance with generally accepted accounting
principles, except for liabilities or obligations incurred in the ordinary
course of business consistent with past practices since the date of the Harvey
Hotels Balance Sheet (the "Harvey Hotels Balance Sheet Date") (which
liabilities or obligations would not, individually or in the aggregate, have a
Material Adverse Effect).
(c) Attached as Schedule 3.6, Part B of the Harvey
Disclosure Schedule are true and correct copies of the consolidated financial
statements of Harvey Management and its Subsidiaries as of and for the periods
indicated therein (the "Harvey Management Financial Statements"). The Harvey
Management Financial Statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except as may be otherwise indicated in the notes thereto)
and fairly present either, as the case may be, the consolidated financial
position of Harvey Management at the respective dates thereof or the
consolidated results of operations or changes in financial position for the
period indicated.
(d) Except as and to the extent set forth on the most
recent consolidated balance sheet of Harvey Management and its Subsidiaries
included within the Harvey Management Financial Statements (the "Harvey
Management Balance Sheet"), and except for liabilities with respect to the
transactions contemplated hereby, and except as set forth in Schedule 3.6, Part
B of the Harvey Disclosure Schedule, neither Harvey Management nor any of its
Subsidiaries has any liabilities or obligations, whether or not accrued,
contingent or otherwise, that would be required to be included on a balance
sheet prepared in accordance with generally accepted accounting principles,
except for liabilities or obligations incurred in the ordinary course of
business consistent with past practices since the date of the Harvey Management
Balance Sheet (the "Harvey Management Balance Sheet Date") (which liabilities
or obligations would not, individually or in the aggregate, have a Material
Adverse Effect).
SECTION 3.7 Absence of Certain Changes or Events.
(a) Since the Harvey Hotels Balance Sheet Date, except as
contemplated in this Agreement or as disclosed in Schedule 3.7, Part A of the
Harvey Disclosure Schedule, (i) there has not been (A) any event with respect
to Harvey Hotels or any of its Subsidiaries having a Material Adverse Effect,
(B) any change by Harvey Hotels in its accounting principles or practices
(other than changes required by changes in generally accepted accounting
principles), (C) any declaration, payment or setting aside for payment of any
dividends, or any redemption, purchase or other acquisition of any securities
of Harvey Hotels, or (D) any revaluation by Harvey Hotels of any of its assets,
including without limitation any writing down of the value of
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inventory or writing off of notes or accounts receivable other than in the
ordinary course of business consistent with past practices, (ii) Harvey Hotels
and its Subsidiaries have conducted their respective businesses only in the
ordinary course of business consistent with past practices and have not made
any material change in the conduct of the business or operations of Harvey
Hotels or any of its Subsidiaries, and (iii) Harvey Hotels has not made any
increase in the compensation payable or to become payable by Harvey Hotels and
its Subsidiaries to their employees, and Harvey Hotels has not entered into or
made any increase in any bonus, insurance, pension or other employee benefit
plan, payment or arrangement made to, for or with any such employees, except in
the ordinary course of business consistent with past practices.
(b) Since the Harvey Management Balance Sheet Date,
except as contemplated in this Agreement or as disclosed in Schedule 3.7, Part
B of the Harvey Disclosure Schedule, (i) there has not been (A) any event with
respect to Harvey Management or any of its Subsidiaries having a Material
Adverse Effect, (B) any change by Harvey Management in its accounting
principles or practices (other than changes required by changes in generally
accepted accounting principles), (C) any declaration, payment or setting aside
for payment of any dividends, or any redemption, purchase or other acquisition
of any securities of Harvey Management, or (D) any revaluation by Harvey
Management of any of its assets, including without limitation any writing down
of the value of inventory or writing off of notes or accounts receivable other
than in the ordinary course of business consistent with past practices, (ii)
Harvey Management and its Subsidiaries have conducted their respective
businesses only in the ordinary course of business consistent with past
practices and have not made any material change in the conduct of the business
or operations of Harvey Management or any of its Subsidiaries, and (iii) Harvey
Management has not made any increase in the compensation payable or to become
payable by Harvey Management and its Subsidiaries to their employees, and
Harvey Management has not entered into or made any increase in any bonus,
insurance, pension or other employee benefit plan, payment or arrangement made
to, for or with any such employees, except in the ordinary course of business
consistent with past practices.
SECTION 3.8 Absence of Litigation. Except as in Schedule
3.8, Part A of the Harvey Disclosure Schedule, there are no claims, actions,
suits, proceedings or investigations pending or, to the best knowledge of
Harvey Hotels or Harvey Management, threatened against any of the Harvey
Entities or any properties or rights of the Harvey Entities, before any court,
arbitrator, or administrative, governmental or regulatory authority or body,
domestic or foreign, that, individually or in the aggregate, is reasonably
likely to have a Material Adverse Effect. As of the date hereof, except as
disclosed in Schedule 3.8, Part B of the Harvey Disclosure Schedule, none of
the Harvey Entities or any of their respective properties is subject to any
order, writ,
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judgment, injunction, decree, determination or award having a Material Adverse
Effect.
SECTION 3.9 Employee Benefit Plans. Schedule 3.9 of the
Harvey Disclosure Schedule lists all employee benefit plans (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), and all bonus, stock option, stock purchase, incentive, deferred
compensation, supplemental retirement, severance and other material fringe or
employee benefit plans, programs or arrangements, and any employment or
compensation agreements, written or otherwise, for the benefit of, or relating
to, any employee of any of the Harvey Entities (the "Harvey Employee Plans").
Except as otherwise disclosed in Schedule 3.9 of the Harvey Disclosure
Schedule, none of the Harvey Employee Plans is a multiemployer plan, as defined
in Section 4001(a)(3) of ERISA (a "Multiemployer Plan"). There have been no
"prohibited transactions", as such term is defined in Section 406 of ERISA and
Section 4975 of the Code, with respect to any Harvey Employee Plan. All Harvey
Employee Plans are in compliance with the requirements prescribed by any and
all applicable statutes, orders or governmental rules or regulations currently
in effect with respect thereto, and each of the Harvey Entities has performed
all obligations required to be performed by it under, is not in default under
or in violation of, and has no knowledge of any default or violation by any
other party to, any of the Harvey Employee Plans. Each Harvey Employee Plan
intended to qualify under Section 401(a) of the Code has heretofore been
determined by the Internal Revenue Service (the "IRS") to so qualify, and each
trust created thereunder has heretofore been determined by the IRS to be exempt
from tax under the provisions of Section 501(a) of the Code, and nothing has
since occurred which may reasonably be expected to cause the loss of such
qualification or exemption. No Harvey Employee Plan subject to Part 3 of
Subtitle I of ERISA or Section 412 of the Code has incurred any "accumulated
funding deficiency" (as defined in ERISA or the Code), whether or not waived.
Except as set forth in Schedule 3.9 of the Harvey Disclosure Schedule, with
respect to each Harvey Employee Plan subject to Title IV of ERISA, no
"reportable event" within the meaning of Section 4043 of ERISA nor any event
described in Section 4062, 4063 or 4041 of ERISA has occurred which could
result in liability to any of the Harvey Entities. None of the Harvey Entities
has incurred or reasonably expects to incur any liability under Title IV of
ERISA with respect to any Harvey Employee Plan (other than a liability for
premiums pursuant to Section 4007 of ERISA). All contributions required to be
made to any Harvey Employee Plan have been made on or before their due dates.
None of the Harvey Entities has any obligation to make payments in respect of
retiree health care or death benefits. With respect to each Harvey Employee
Plan, Harvey Hotels has furnished United with true and correct copies of (i)
such Harvey Employee Plan, (ii) each summary plan description and summary of
material modification, (iii) the most recently filed IRS Form 5500, and (iv)
the most recently received IRS determination letter.
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SECTION 3.10 Labor and Employment Matters.
(a) Except as set forth in Schedule 3.10, Part A of the
Harvey Disclosure Schedule, (i) none of the Harvey Entities is a party to any
collective bargaining agreement or agreement of any kind with any union or
labor organization, (ii) no union or other collective bargaining unit has been
certified or recognized by any of the Harvey Entities as representing any
employee thereof nor is a union or other collective bargaining unit seeking
recognition for such purpose, (iii) there are no controversies pending or, to
the best knowledge of Harvey Hotels or Harvey Management, threatened between
any of the Harvey Entities and any labor union or collective bargaining unit
representing, or seeking to represent, any employees of any of the Harvey
Entities, (iv) none of the Harvey Entities has received notice that there has
been any attempt by any union or other labor organization to organize any
employees of any of the Harvey Entities at any time since January 1, 1991.
Except as set forth in Schedule 3.10, Part B of the Harvey Disclosure Schedule,
none of the Harvey Entities has received notice or charges that it has not
complied with all its obligations under the National Labor Relations Act, as
amended, Title VII of the Civil Rights Act of 1964, as amended, the Age
Discrimination in Employment Act, as amended, or any other federal, state and
local labor or labor-related laws applicable to persons employed in connection
with the businesses of any of the Harvey Entities, including without limitation
those laws, rules and regulations relating to wages, hours, health and safety,
payment of social security withholding and other taxes, maintenance of workers'
compensation insurance, labor and employment relations and employment
discrimination. Except as set forth in Schedule 3.10, Part C of the Harvey
Disclosure Schedule, the consent of the unions which are parties to the
collective bargaining agreements of any of the Harvey Entities is not required
to consummate the transactions contemplated by this Agreement.
(b) Schedule 3.10, Part D of the Harvey Disclosure
Schedule lists all material employment, consulting and severance agreements to
which any of the Harvey Entities is a party with any of their respective
employees and consultants, and all incentive and bonus payment plans in which
any such employees or consultants are participants, including any such
agreements or plans providing for the payment of severance or other
compensation, or the vesting of options, in the event of a change in Control
(as hereinafter defined) of any such Harvey Entity.
SECTION 3.11 Taxes. Except as disclosed in Schedule 3.11 of
the Harvey Disclosure Schedule, each of the Harvey Entities has timely filed
all tax returns and reports, including information returns and reports,
required to be filed by it. Each of the Harvey Entities has timely paid, or
has timely withheld and paid over, to the proper authority (or Harvey Hotels or
Harvey Management has paid, or withheld and paid over, on its behalf) all Taxes
(as hereinafter defined) required to be
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paid or withheld by it, the Harvey Hotels Balance Sheet reflects an adequate
reserve for all Taxes payable by Harvey Hotels and its Subsidiaries for all
taxable periods and portions thereof through the Harvey Hotels Balance Sheet
Date, and the Harvey Management Balance Sheet reflects an adequate reserve for
all Taxes payable by Harvey Management and its Subsidiaries for all taxable
periods and portions thereof through the Harvey Management Balance Sheet Date.
Except as disclosed in Schedule 3.11 of the Harvey Disclosure Schedule, no
deficiencies for any Taxes have been proposed, asserted or assessed against any
of the Harvey Entities, and no requests for waivers of the time to assess any
such Taxes have been granted or are pending. Harvey Hotels' Federal income tax
returns for all periods through the Harvey Balance Sheet Date, and Harvey
Management's Federal income tax returns for all periods through the Harvey
Management Balance Date, have been timely filed with the IRS. The normal
statute of limitations has expired with respect to Harvey Hotels' fiscal years
ended 1987 through 1990 and Harvey Management's fiscal years ended 1987 through
1990. Except as disclosed in Schedule 3.11 of the Harvey Disclosure Schedule,
the "Deferred Taxes" as shown in the Harvey Hotels Balance Sheet represents an
adequate reserve for all amounts of income realized but not recognized prior to
the date thereof by Harvey Hotels and its Subsidiaries and the "Deferred Taxes"
as shown in the Harvey Management Balance Sheet represents an adequate reserve
for all amounts of income realized but not recognized prior to the date thereof
by Harvey Management and its Subsidiaries, in each case whether by reason of
the use of any method of accounting (including the installment method), the
existence of deferred intercompany transactions or otherwise, which are
required to be reserved in accordance with generally accepted accounting
principles. (For purposes of this Agreement, the term "Taxes" includes all
Federal, state, local and foreign income, property, sales, excise and other
taxes or similar charges of any nature whatsoever, including any interest,
penalties and additions to tax.)
SECTION 3.12 Environmental. Except as disclosed by the
environmental audits and reports listed in Schedule 3.12, Part A of the Harvey
Disclosure Schedule, copies of which have heretofore been delivered to
Holdings, or in Schedule 3.12, Part B of the Harvey Disclosure Schedule, each
of the representations and warranties set forth in paragraphs (a) through (g)
of this Section 3.12 is true and correct with respect to each parcel of real
property owned, leased, operated or used by any Harvey Entity or Affiliate (as
hereinafter defined) of any Harvey Entity or any predecessor of any of the
foregoing if any of the foregoing may have liability as a result thereof (the
"Harvey Properties"), except as circumstances giving rise to any such failure
to be so true and correct would not have a Material Adverse Effect:
(a) The Harvey Properties do not contain, and have not
previously contained, therein, thereon or thereunder,
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including without limitation the soil and groundwater thereunder, any
Hazardous Materials (as hereinafter defined) in concentrations which
violate Environmental Laws (as hereinafter defined).
(b) The Harvey Properties, and all operations and
facilities at the Harvey Properties, are in compliance with all
Environmental Laws, and there is no Hazardous Materials contamination
or violation of any Environmental Law that would interfere with the
continued operation of any of the Harvey Properties or materially
impair the fair saleable value thereof.
(c) None of the Harvey Entities has received any written
complaint, or notice of violation, alleged violation, investigation,
advisory action, potential liability or potential responsibility
regarding environmental protection matters or permit compliance with
regard to the Harvey Properties, nor is any governmental authority
contemplating delivering to any of the Harvey Entities any such
notice.
(d) Except in compliance with Environmental Laws,
Hazardous Materials have not been generated, released, treated, stored
or disposed of at, on or under any of the Harvey Properties.
(e) There are no governmental, administrative or judicial
actions or proceedings pending or contemplated under any Environmental
Laws to which any of the Harvey Entities is or will be named as a
party with respect to the Harvey Properties, nor are there any consent
decrees, other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements, outstanding
under any Environmental Law with respect to any of the Harvey
Properties.
(f) There are no underground storage tanks located on the
Harvey Properties.
(g) There are no claims associated with any underground
storage tanks previously located on the Harvey Properties.
For the purposes of this Agreement the following terms have the following
meanings: (i) "Environmental Laws" means any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees or requirements of any governmental authority regulating, relating to
or imposing liability or standards of conduct concerning public or occupational
health and safety, the environment or any Hazardous Material as now in effect
and applied, or as in effect and applied at the time the event occurred which
gave rise to the alleged violation, as the case may be, and (ii) "Hazardous
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Materials" means (A) petroleum and petroleum products, radioactive materials,
asbestos in any form that is or could become friable, transformers or other
equipment that contained polychlorinated biphenyls, and radon gas, (B) any
other chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants," "contaminants" or "pollutants," or words of
similar import, under any applicable Environmental Law, and (C) any other
chemical, material or substance exposure to which is regulated by any
governmental authority.
SECTION 3.13. Assets. Harvey Hotels has good and valid title
to all assets reflected in the Harvey Hotels Balance Sheet or thereafter
acquired, except assets sold or otherwise disposed of in the ordinary course of
business before, on or after the date hereof, in each case free and clear of
all Encumbrances except (i) Encumbrances described on Schedule 3.13, Part A of
the Harvey Disclosure Schedule, (ii) mechanics', carriers, workmen's,
repairmen's or similar liens arising in the ordinary course of business
consistent with past practices, (iii) liens for taxes which are not due and
payable or which may thereafter be paid without penalty, or (iv) other
Encumbrances, if any, which in each case do not materially detract from the
value of the property subject thereto and do not materially impair the use of
such property or the operation of the business in which it is used
(collectively, "Permitted Encumbrances"). Harvey Management has good and valid
title to all assets reflected in the Harvey Management Balance Sheet or
thereafter acquired, except assets sold or otherwise disposed of in the
ordinary course of business before, on or after the date hereof, in each case
free and clear of any Encumbrances except Permitted Encumbrances. Except as
disclosed on Schedule 3.13, Part B of the Harvey Disclosure Schedule, all of
the material operating assets of the Harvey Companies are in good repair and
condition, normal wear and tear excepted. The assets which Harvey Hotels owns,
leases or otherwise has a legally enforceable right to use include all assets
necessary to permit Harvey Hotels to conduct its business and operations in all
material respects in the manner in which it has been conducted since October 1,
1993. The assets which Harvey Management owns, leases or otherwise has a
legally enforceable right to use on the date hereof include all of the assets
necessary to permit Harvey Management to conduct its business and operations in
all material respects in the manner in which it has been conducted since
October 1, 1993.
SECTION 3.14 Breaches, Violations and Defaults. Except as
set forth on Schedule 3.14 of the Harvey Disclosure Schedule, none of the
Harvey Entities is (a) in breach of or default under, nor has an event occurred
which, with notice or lapse of time or both, would become a default under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of any Encumbrance on
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any of the properties or assets of any of the Harvey Entities pursuant to, (i)
any note, bond, mortgage, indenture or other evidence of indebtedness, (ii) any
contract, service agreement, lease, license or permit, or (iii) any franchise
instrument or obligation related thereto, in each case to which any of the
Harvey Entities is a party or by which any of the Harvey Entities or any of
their respective properties may be bound or affected, or (b) in violation of
any material law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award applicable to any of the Harvey Entities or by which any
of their respective properties are bound or affected, except where such breach,
default, termination, acceleration, Encumbrance or violation would not have a
Material Adverse Effect.
SECTION 3.15 Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by and on behalf of any of the Harvey Entities.
SECTION 3.16 Investment Intent. Each of the Harvey Equity
Holders is acquiring the New Parent Common Shares to be acquired by such Harvey
Equity Holder hereunder for his or her own account and for investment purposes,
and no Harvey Equity Holder intends to redistribute such New Parent Common
Shares (except in a transaction or transactions exempt from registration under
the federal and state securities laws or pursuant to an effective registration
statement under such laws, whether pursuant to the registration rights
agreement contemplated by Section 5.9 or otherwise).
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE CLOSING DATE
SECTION 4.1 Conduct of Business by the Harvey Entities
Pending the Closing Date. Between the date of this Agreement and the Closing
Date, except as otherwise provided in this Agreement or unless the other
parties hereto otherwise shall agree in writing, such agreement not to be
unreasonably withheld, the businesses of the Harvey Entities will be conducted
only in, and the Harvey Entities will not take any action except in, the
ordinary course of business consistent with past practices. Each of Harvey
Hotels and Harvey Management further will use commercially reasonable efforts
to (A) preserve substantially intact its business organization and that of its
Subsidiaries, (B) keep available the services of its present officers,
employees and consultants and that of its Subsidiaries, and (C) preserve its
present relationships and that of its Subsidiaries with customers, suppliers
and other Persons with which it or any of its Subsidiaries has significant
business relations, (ii) continue in full force and effect without material
modification all existing policies or binders of
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insurance currently maintained in respect of it and each of its Subsidiaries
and their respective assets, and (iii) pay, and cause each of its Subsidiaries
to pay, its indebtedness and otherwise discharge its liabilities punctually
when and as the same becomes due and payable and perform and observe, and to
cause each of its Subsidiaries to perform and observe, its duties and
obligations under its material contracts.
By way of amplification and not in limitation of the above
agreements of Harvey Hotels and Harvey Management, and, except as expressly
contemplated by this Agreement, none of the Harvey Entities will, between the
date of this Agreement and the Closing Date, directly or indirectly do, or
propose to do, any of the following without the prior written consent of the
other parties hereto:
(a) amend or otherwise change its Articles of
Incorporation, By-Laws, partnership agreement or equivalent
organizational documents;
(b) issue, sell, pledge, dispose of, encumber, or
authorize the issuance, sale, pledge, disposition or encumbrance of,
any shares of capital stock of any class, or any options, warrants,
convertible securities or other rights of any kind to acquire any
shares of capital stock, or any partnership or other ownership
interests, of any Harvey Entity, or any assets of any Harvey Entity,
except (i) as specified inSchedule 4.1, Part A of the Harvey
Disclosure Schedule and (ii) the sale of non-material assets in the
ordinary course of business consistent with past practices;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock or partnership or other equity
interests, other than year-end bonus payments in the ordinary course
of business consistent with past practice and cash distributions to
holders of equity interests in the Harvey Companies in anticipation of
the Closing (provided in each case that such cash distributions are
paid prior to the Closing and are not reasonably expected to impair
the ability of the Harvey Entities to conduct their businesses prior
to the Closing Date in the ordinary course consistent with past
practice);
(d) reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any of its
capital stock or partnership or other equity interests;
(e) except as specified in Schedule 4.1, Part B of the
Harvey Disclosure Schedule, (A) acquire (by merger, consolidation or
acquisition of stock or assets) any corporation, partnership or other
business organization or
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division thereof; (B) incur any indebtedness or issue any debt
securities or assume, guarantee or endorse or otherwise as an
accommodation or become responsible for, the obligations of any
Person, or make any loans or advances; (C) enter into any contract or
agreement and except for those non-material contracts and agreements
entered into in the ordinary course of business consistent with past
practices; (D) authorize new capital expenditures, other than
expenditures incurred in the ordinary course of business consistent
with past practices or as required by the direction or acts of a
franchisor and expenditures required by governmental direction; or (E)
amend any contract, agreement, commitment or arrangement with respect
to any of the matters set forth in this Section 4.1(e);
(f) increase the compensation payable or to become
payable to, or grant or pay any severance or termination pay to, the
officers or employees of any Harvey Entity, except for increases in
salary or wages of employees of Harvey Entities in accordance with
existing policies or past practice, and except pursuant to the terms
of contracts, policies or benefit arrangements in effect on the date
hereof, or enter into any employment or severance agreement with, any
director, officer or other employee of any Harvey Entity, or
establish, adopt, enter into or amend any bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, termination severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of
any of the directors, officers or employees of any Harvey Entity;
(g) take any action other than in the ordinary course of
business consistent with past practices (none of which actions shall
be unreasonable or unusual) with respect to accounting policies or
procedures (including without limitation procedures with respect to
the payment of accounts payable and collection of accounts
receivable);
(h) make any Tax election or settle or compromise any Tax
liability; or
(i) pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction of the
same in the ordinary course of business consistent with past practices
(including payment of liabilities of Harvey Entities in accordance
with their terms).
SECTION 4.2 Conduct of Business by New Parent and Merger Sub
Pending the Closing Date. Except as expressly contemplated hereby or by the
Merger Agreement, Holdings will (a) cause New Parent not to issue any shares of
its capital stock
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or options or other rights to subscribe for or purchase any shares of its
capital stock, conduct any business or engage in any other activity prior to
the Closing Date and (b) cause New Parent to cause Merger Sub not to issue any
shares of its capital stock or options or rights to subscribe for or purchase
any shares of its capital stock, conduct any business or engage in any other
activity prior to the Closing Date.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 Compliance with Securities Laws. To the extent,
if any, that the consummation of the Combination Transactions or the United
Merger requires the filing of any statement or report under any federal or
state securities laws, the Harvey Companies will cooperate with and assist
Holdings and New Parent in preparing and filing with the SEC and/or any other
applicable governmental agency as promptly as practicable (in each case to the
extent required by applicable federal or state securities laws) (i) a
registration statement of New Parent on Form S-4 under the Securities Act
(together with any amendment or supplement thereto, the "Registration
Statement") to register the New Parent Common Shares to be issued pursuant to
the Combination Transactions and/or the United Merger and (ii) an information
statement (together with any amendments or supplements thereto, the
"Information Statement") of United under the Exchange Act to be provided to
stockholders of United in connection with the United Merger. Each party hereto
represents and warrants to each other party hereto that the information
supplied in writing by such party specifically for inclusion in (i) the
Registration Statement, when declared effective by the SEC and at the Effective
Time, (ii) the Information Statement, at the time first mailed to stockholders
of United and at the Effective Time, and (iii) any other filing that may be
required under any federal or state securities laws in connection with the
transactions contemplated hereby or by the Merger Agreement, including any
amendments or supplements to any such filings, at the respective times such
filings are made or any portions thereof are disseminated, will not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of circumstances under which they were made, not misleading. Each party
hereto will promptly notify each other party hereto if at any time before the
Effective Time it becomes aware that the Registration Statement, Information
Statement or any other securities law filing contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. In such event, the
Harvey Companies will cooperate with and assist Holdings and New Parent in
preparing a supplement or amendment to the applicable securities law filing
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correcting such misstatement or omission, and causing the same to be filed with
the SEC and/or any other applicable governmental agency and disseminated, in
each case in accordance with and to the extent required by applicable federal
or state securities laws.
SECTION 5.2 Access to Information.
(a) From the date hereof to the Closing Date, each of
Harvey Hotels and Harvey Management will, and will cause its Subsidiaries,
officers, directors, employees, auditors and agents to, afford the officers,
employees and agents of the other parties hereto reasonable access to its
officers, employees, agents, properties, offices, plants, other facilities and
to all books and records, and will furnish any other party hereto with all
financial, operating and other data and information as such party, through its
officers, employees or agents, may reasonably request.
(b) No investigation pursuant to this Section 5.2 or
otherwise will affect any representations or warranties of the parties herein
or the conditions to the obligations of the parties hereto.
SECTION 5.3 No Solicitation of Transactions.
(a) From the date hereof until the Closing Date, neither
Harvey Hotels nor Harvey Management will, directly or indirectly, through any
director, officer, employee, agent or otherwise, solicit or initiate the
submission of proposals or offers from any Person relating to any acquisition
or purchase of all or (other than in the ordinary course of business consistent
with past practices) any portion of the assets of, or any equity interest in,
any Harvey Entity or any business combination with any Harvey Entity or
participate in any negotiations regarding, or furnish to any other Person any
information with respect to any effort by any other Person to attempt to do or
seek any of the foregoing. Each of Harvey Hotels and Harvey Management will
immediately cease and cause to be terminated any existing discussions or
negotiations with any parties (other than Holdings and its Affiliates)
conducted heretofore with respect to any of the foregoing.
SECTION 5.4 Notification of Certain Matters. Each party
hereto will give prompt notice to each other party hereto of (i) the occurrence
or nonoccurrence of any event the occurrence or nonoccurrence of which would be
likely to cause any representation or warranty contained in this Agreement to
be untrue or inaccurate in any material respect at or prior to the Closing Date
and (ii) any material failure to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder; provided,
however, that the delivery of any notice pursuant to this Section 5.4 will not
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limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
SECTION 5.5 Further Action. Upon the terms and subject to
the conditions hereof, each of the parties hereto will use its reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all other things, necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement and to obtain in a timely manner all necessary waivers, consents and
approvals and to effect all necessary registrations and filings.
SECTION 5.6 Public Announcements. From the date hereof until
the Closing Date, each of the parties hereto will use its reasonable best
efforts to consult with each other party hereto before issuing any press
release or otherwise making any public statements with respect to the
transactions contemplated hereby and will not issue any such press release or
make any such public statement prior to such consultation or without the
consent of the other, unless such party has been advised by counsel that it is
required by law to do so.
SECTION 5.7 HSR Act. Each party hereto will, as soon as
practicable after the date of this Agreement, but in no event later than five
business days after the date of this Agreement, file any required Notification
and Report Forms under the HSR Act with the Federal Trade Commission and the
Antitrust Division of the Department of Justice and will use its reasonable
best efforts to respond as promptly as practicable to all inquiries received
from such agencies for additional information or documentation.
SECTION 5.8 Other Authorizations; Notices and Consents.
(a) Each party hereto will use its reasonable best
efforts to obtain (or cause its Subsidiaries to obtain) all authorizations,
consents, orders, licenses, permits and approvals of all governmental
authorities and officials and third parties that may be or become necessary for
its execution and delivery of, and the performance of its obligations pursuant
to, this Agreement and the other documents contemplated hereby, and the parties
hereto will cooperate fully with each other in promptly seeking to obtain all
such authorizations, consents, orders and approvals.
(b) Each of parties hereto will (and each will cause its
Subsidiaries to) use all reasonable best efforts to give such notices to third
parties and use all reasonable best efforts to obtain such third party
consents, licenses or permits as any other party hereto may reasonably deem
necessary or desirable in connection with the transactions contemplated by this
Agreement, provided that nothing contained in this Section 5.8(b) will
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affect the rights or obligations of any party pursuant to Section 5.10.
SECTION 5.9 Registration Rights. On the Closing Date, New
Parent will provide to Holdings, Huie and each other Person who is an Affiliate
of New Parent immediately following the Closing an opportunity to enter into a
registration rights agreement in form and substance mutually satisfactory to
such Persons.
SECTION 5.10 Certain Releases. Each of New Parent and Harvey
Hotels will use reasonable efforts to obtain releases of each Harvey Equity
Holder (in form and substance reasonably acceptable to such Harvey Equity
Holder), to be effective as of the Closing Date, from any and all liability in
respect of any indebtedness of Harvey Hotels. If such releases are not
obtained on or before the Closing Date, from and after the Closing Date, Harvey
Hotels will indemnify each Harvey Equity Holder from any and all personal
liability in respect of any such indebtedness other than any liability arising
from the intentional misconduct of such Harvey Equity Holder.
SECTION 5.11 Allocation of United Termination Fee. Promptly
following the receipt by Holdings of any amount from United pursuant to Section
8.3(c) of the Merger Agreement, Holdings will retain two-thirds of the amount
so received by Holdings and will remit to Harvey Hotels and Harvey Management
jointly, to be shared by them in such manner as they may determine, the
remaining one-third of the amount so received by Holdings.
SECTION 5.12 Stockholders' Agreement. In connection with the
consummation of the Combination Transactions on the Closing Date, the parties
hereto will use their respective reasonable best efforts to cause a
Stockholders' Agreement containing substantially the terms described in Annex
IV to be executed and delivered by the parties thereto and the Board of
Directors and officers of New Parent to be reconstituted in accordance
therewith.
SECTION 5.13 Employment Contracts. New Parent will use
reasonable efforts to enter into employment contracts, effective as of the
Closing Date, with Kline and certain other key executives of the Harvey
Companies to be agreed by New Parent and the Harvey Companies on terms
comparable to those afforded similarly situated employees of similar companies,
and otherwise in form and substance reasonably satisfactory to New Parent and
such individual, provided that the five most highly compensated employees of
the Harvey Companies who become employees of New Parent will receive cash
compensation (salary and bonus) for 1995 not less than the compensation
received by such individuals from the Harvey Companies (or, in the case of
Robert L. Miars, an Affiliate thereof) for 1994.
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SECTION 5.14 Equity Incentive Plan. New Parent will adopt,
effective as of the Closing Date, an equity incentive plan for executives and
employees of New Parent providing for options and/or other equity-based awards
covering a number of New Parent Common Shares equal to 10% of the New Parent
Common Shares outstanding following the United Merger and otherwise in form and
substance mutually satisfactory to New Parent and the Harvey Companies.
SECTION 5.15 Option to Purchase Huie Interests.
(a) If the Closing does not occur, Holdings will have the
option (the "Option"), exercisable by written notice to Huie during the 60
calendar day period immediately following the later of termination of this
Agreement and December 31, 1994, to purchase all of Huie's equity interests in
the Harvey Companies (collectively, the "Optioned Interests") for an aggregate
cash purchase price equal to the product of 50.6% and the Harvey Equity Value
(with the amount thereof being determined for purposes of this Section 5.15 in
a manner as nearly the same as practicable as the manner in which the Harvey
Equity Value would have been determined in accordance with the provisions of
Section 1.3 had the Closing occurred). The closing of the purchase and sale of
the Optioned Interests pursuant to the Option (the "Option Closing") will take
place as promptly as practicable following the exercise of the Option. At the
Option Closing, Huie will deliver to Holdings, against payment of the purchase
price therefor, good and valid title to the Optioned Interests, free and clear
of any and all Encumbrances.
SECTION 5.16 Disclosure Schedule, Etc. The parties hereto
acknowledge that the Harvey Disclosure Schedule has not been prepared or
appended to this Agreement as Annex III as of the date hereof. The Harvey
Companies hereby undertake to deliver a draft of the Harvey Disclosure Schedule
to Holdings for its review and comment as promptly as practicable (and in any
event within 10 business days after the date hereof), whereupon the Harvey
Companies and Holdings will use their reasonable best efforts to finalize the
Harvey Disclosure Schedule to be in form and substance reasonably satisfactory
to Holdings. Upon such finalization of the Harvey Disclosure Schedule, the
same will be attached hereto as Annex III and will thereupon become a part of
this Agreement.
SECTION 5.17 Rights in "Harvey" Name. As between the Harvey
Entities and the Harvey Equity Holders, the Harvey Entities shall have the sole
and exclusive right to use the name "Harvey" and any variation thereof in
connection with the ownership or operation of hotels or other similar or
related businesses and none of the Harvey Equity Holders will, under any
circumstances, before, on or after the Closing Date make any claim of
infringement or misappropriation relating to the use by the Harvey Entities of,
or otherwise challenge or question the
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right of the Harvey Companies to use, the name "Harvey" or any variation
thereof.
SECTION 5.18 Tax Loans. To the extent requested, Holdings
and the Harvey Companies will use commercially reasonable efforts to assist
Kline, Robert L. Miars, John A. Beckert, Richard N. Beckert and Edward J.
Rohling in their efforts to obtain from a commercial or investment bank loans
(which loans will be secured by the New Parent Common Shares owned by such
persons) in amounts (not exceeding $5,000,000 in the aggregate) necessary to
fund such persons' tax liabilities resulting from the transactions contemplated
hereby. In the event that any of such persons is unable to obtain a loan from
a commercial or investment bank in an amount sufficient to fund the full amount
of any such tax liabilities, New Parent will loan to, or arrange (by providing
credit support) for a loan to, such person, on terms mutually acceptable to New
Parent and such person, the additional amount necessary to permit such person
to fund the full amount of such tax liabilities; provided, however, that New
Parent will not be required to make loans (or provide credit support) under
this Section 5.18 for more than $5,000,000 in the aggregate.
ARTICLE VI
CONDITIONS OF COMBINATION TRANSACTIONS
SECTION 6.1 Conditions to Obligations of Each Party. The
respective obligations of each party to effect or cause to be effected the
Combination Transactions will be subject to the satisfaction or waiver at or
prior to the Closing of each of the following conditions:
(a) HSR Act. Any waiting period (and any extension
thereof) applicable to the consummation of the Combination
Transactions under the HSR Act shall have expired or been terminated.
(b) No Order. No United States or state governmental
authority or other agency or commission or United States or state
court of jurisdiction shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, writ, injunction or
other order (whether temporary, preliminary or permanent) which is in
effect and has the effect of making the Combination Transactions
illegal or otherwise prohibiting consummation of the Combination
Transactions, and there shall exist no other legal restraint which has
such effect.
SECTION 6.2 Additional Conditions to Obligations of Holdings,
New Parent and Merger Sub. The obligations of Holdings to effect or cause to
be effected the Combination Transactions
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will be further subject to the satisfaction or waiver on or prior to the
Closing Date of each of the following conditions:
(a) Consents and Approvals. Harvey Hotels or Harvey
Management, as applicable, shall have received, in form and substance
satisfactory to Holdings in its reasonable good faith determination,
all authorizations, consents, orders and approvals set forth in
Schedule 6.2 of the Harvey Disclosure Schedule.
(b) Representations, Warranties and Covenants. The
representations and warranties of the Harvey Companies and the Harvey
Equity Holders contained in this Agreement shall have been true and
correct when made and shall be true and correct in all material
respects (other than those qualified by Material Adverse Effect, which
shall be true and correct in all respects) as of the Closing Date
other than such representations and warranties as are expressly made
as of another date, and the covenants and agreements contained in this
Agreement to be performed or complied with by the Harvey Companies and
the Harvey Equity Holders (other than such covenants and agreements
that are expressly contemplated hereby to be performed or complied
with solely after the Closing Date) shall have been complied with in
all material respects as of the Closing Date. Each of Harvey
Companies and the Harvey Equity Holders shall have delivered to
Holdings a certificate dated the Closing Date certifying the matters
set forth in the preceding sentence.
(c) Consummation of the Offer. Holdings shall have
accepted United Common Shares for purchase pursuant to the Offer.
SECTION 6.3 Additional Conditions to Obligations of Harvey
Hotels and Harvey Management . The obligations of the Harvey Companies and the
Harvey Equity Holders to effect or cause to be effected the Combination
Transactions will be further subject to the satisfaction or waiver on or prior
to the Closing Date of each of the following conditions:
(a) Releases and Indemnities. Each Harvey Equity Holder
shall have been released, effective as of the Closing Date, from any
and all liability in respect of any indebtedness of Harvey Hotels, or
Harvey Hotels or New Parent shall have delivered to each Harvey Equity
Holder that shall not have been so released an undertaking (in form
and substance reasonably acceptable to such Harvey Equity Holder) of
Harvey Hotels or New Parent to indemnify such Harvey Equity Holder
from any and all personal liability in respect of such indebtedness.
(b) Representations, Warranties and Covenants. The
representations and warranties of Holdings, New Parent and Merger Sub
contained in this Agreement shall have been true
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and correct when made and shall be true and correct in all material
respects (other than those qualified by a material adverse effect,
which shall be true and correct in all respects) as of the Closing
Date other than such representations and warranties as are expressly
made as of another date, and the covenants and agreements contained in
this Agreement to be performed or complied with by Holdings, New
Parent and Merger Sub (other than such covenants and agreements that
are expressly contemplated hereby to be performed or complied with
solely after the Closing Date) shall have been performed and complied
with in all material respects as of the Closing Date. Each of
Holdings, New Parent and Merger Sub shall have delivered to Harvey
Hotels and Harvey Management a certificate dated the Closing Date
certifying the matters set forth in the preceding sentence.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Indemnification by Harvey Companies and Harvey
Equity Holders. Subject to the terms of this Article VII, including the
limitations set forth in Section 7.3, each of the Harvey Companies (prior to
the Closing), and each of the Harvey Equity Holders (from and after the
Closing), will indemnify and hold harmless each of Holdings, New Parent and
Merger Sub and their respective partners, officers, directors, employees,
agents and Affiliates (collectively, the "Holdings Indemnified Parties") from
and against any loss, damage or expense, including without limitation
reasonable attorneys' and accountants' fees (each such individual occurrence is
hereinafter referred to as a "Holdings Loss" and collectively, as "Holdings
Losses") suffered by any Holdings Indemnified Party, directly or indirectly, as
a result of any inaccuracy in or breach of any of the representations,
warranties or covenants of the Harvey Companies or any Harvey Equity Holder set
forth in this Agreement.
SECTION 7.2 Procedure for Holdings Claims.
(a) Notice of Claim. After obtaining knowledge of any
claim or demand which has given rise to, or could reasonably give rise to, a
claim for indemnification under Section 7.1 (referred to herein as a "Holdings
Indemnification Claim"), an indemnified party (a "Holdings Indemnified Party")
shall give written notice to the party obligated to provide indemnification
pursuant to Section 7.1 (the "Harvey Indemnitor") of such Indemnification Claim
("Holdings Notice of Claim"). A Holdings Notice of Claim will be given with
respect to each Holdings Indemnification Claim; provided, however, that the
failure to give a Holdings Notice of Claim to the Harvey Indemnitor will
relieve the Harvey Indemnitor from its liability hereunder only if, and to the
extent that, such failure results in the forfeiture by the Harvey Indemnitor of
substantial rights and defenses. If reasonably
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practicable, the Holdings Notice of Claim will set forth the amount (or a
reasonable estimate) of the Holdings Loss or Holdings Losses suffered, or which
may be suffered, by a Holdings Indemnified Party as a result of such Holdings
Indemnification Claim. The Holdings Indemnified Party will furnish to the
Harvey Indemnitor such information (in reasonable detail) it may have with
respect to such Holdings Indemnification Claim (including copies of any
summons, complaint or other pleading which may have been served on it and any
written claim, demand, invoice, billing or other document evidencing or
asserting the same).
(b) Third Party Holdings Claims.
(i) If the claim or demand set forth in the
Holdings Notice of Claim is a claim or demand asserted by a third party (a
"Holdings Third Party Claim"), the Harvey Indemnitor shall have 15 days after
the date of receipt by the Harvey Indemnitor of the Holdings Notice of Claim
(the "Holdings Notice Date") to notify the Holdings Indemnified Party in
writing of the election by the Harvey Indemnitor to defend the Third Party
Holdings Claim on behalf of the Holdings Indemnified Party.
(ii) If the Harvey Indemnitor elects to defend a
Third Party Holdings Claim on behalf of the Holdings Indemnified Party, the
Holdings Indemnified Party will make available to the Harvey Indemnitor and its
agents and representatives all records and other materials in their possession
which are reasonably required in the defense of the Third Party Holdings Claim
and the Harvey Indemnitor will pay all expenses payable in connection with the
defense of the Third Party Holdings Claim as they are incurred.
(iii) In no event may the Harvey Indemnitor settle
or compromise any Third Party Holdings Claim without the Holdings Indemnified
Party's consent, which will not be unreasonably withheld or delayed; provided,
however, that if a settlement is presented by the Harvey Indemnitor to the
Holdings Indemnified Party for approval and the Holdings Indemnified Party
withholds its consent thereto, then any amount by which the final Holdings
Losses (including reasonable attorneys' fees) resulting from the resolution of
the matter exceeds the rejected settlement amount, plus attorneys' fees
incurred to such date, will be excluded from the amount covered by the
indemnification provided for in this Agreement and will be borne by the
Holdings Indemnified Party.
(iv) If the Harvey Indemnitor elects to defend a
Third Party Holdings Claim, the Holdings Indemnified Party shall have the right
to participate in the defense of the Third Party Holdings Claim, at the
Holdings Indemnified Party's expense (and without the right to indemnification
for such expense under this Agreement); provided, however, that the reasonable
fees and expenses of counsel retained by the Holdings Indemnified Party will be
at the expense of the Harvey Indemnitor if (A) the use of the counsel chosen by
the Harvey Indemnitor to represent the
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Holdings Indemnified Party would present such counsel with a conflict of
interest; (B) the parties to such proceeding include both the Holdings
Indemnified Party and the Harvey Indemnitor and there may be legal defenses
available to the Holdings Indemnified Party which are different from or
additional to those available by the Harvey Indemnitor; or (C) the Harvey
Indemnitor authorizes the Holdings Indemnified Party to retain a single
separate counsel at the expense of the Harvey Indemnitor.
(v) If the Harvey Indemnitor does not elect to
defend a Third Party Holdings Claim, or does not defend a Third Party Holdings
Claim in good faith, the Holdings Indemnified Party shall have the right, in
addition to any other right or remedy it may have hereunder, at the sole and
exclusive expense of the Harvey Indemnitor, to defend such Third Party Holdings
Claim.
(c) Cooperation in Defense. The Holdings Indemnified
Party will cooperate with the Harvey Indemnitor in the defense of a Third Party
Holdings Claim and make reasonably available the facts relating to the Third
Party Holdings Claim. Subject to the foregoing, (A) no Holdings Indemnified
Party shall have any obligation to participate in the defense of or to defend
any Third Party Holdings Claim, and (B) no Holdings Indemnified Party's defense
or of their participation in the defense of any Third Party Holdings Claim will
in any way diminish or lessen their right to indemnification as provided in
this Agreement.
SECTION 7.3 Limitations on Obligations of Harvey Equity
Holders. Notwithstanding anything to the contrary herein contained, (a) each
Harvey Equity Holder will be severally liable hereunder with respect to any
breach by him or her of any representation, warranty or covenant herein
contained, (b) no Harvey Equity Holder will have any liability hereunder with
respect to any breach by any other Harvey Equity Holder of any representation,
warranty or covenant herein contained, and (c) the liability of each Harvey
Equity Holder with respect to any breach by either of the Harvey Companies of
any representation, warranty or covenant herein contained (other than that of
the Huie Daughters, who shall have no liability with respect thereto) will be
(i) several, (ii) proportionate to the percentage of the total equity interests
of the Harvey Companies contributed by such Harvey Equity Holder to New Parent
at the Closing, and (iii) limited to a maximum aggregate amount equal to the
value ascribed to such equity interests as of the Closing Date pursuant to
Article I.
SECTION 7.4 Indemnification by Holdings, New Parent and
Merger Sub. Subject to the terms of this Article VII, each of Holdings, New
Parent and Merger Sub will indemnify and hold harmless each of the Harvey
Companies and the Harvey Equity Holders and their respective partners,
officers, directors, employees, agents and Affiliates (collectively, the
"Harvey Indemnified Parties") from and against any loss, damage or
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expense, including without limitation reasonable attorneys' and accountants'
fees (each such individual occurrence is hereinafter referred to as a "Harvey
Loss" and collectively, as "Harvey Losses") suffered by any Harvey Indemnified
Party, directly or indirectly, as a result of any inaccuracy in or breach of
any of the representations, warranties or covenants of the Holdings, New Parent
or Merger Sub set forth in this Agreement.
SECTION 7.5 Procedure for Harvey Claims.
(a) Notice of Claim. After obtaining knowledge of any
claim or demand which has given rise to, or could reasonably give rise to, a
claim for indemnification under Section 7.4 (referred to herein as a "Harvey
Indemnification Claim"), an indemnified party (a "Harvey Indemnified Party")
shall give written notice to the party obligated to provide indemnification
pursuant to Section 7.4 (the "Holdings Indemnitor") of such Indemnification
Claim ("Harvey Notice of Claim"). A Harvey Notice of Claim will be given with
respect to each Harvey Indemnification Claim; provided, however, that the
failure to give a Harvey Notice of Claim to the Holdings Indemnitor will
relieve the Holdings Indemnitor from its liability hereunder only if, and to
the extent that, such failure results in the forfeiture by the Holdings
Indemnitor of substantial rights and defenses. If reasonably practicable, the
Harvey Notice of Claim will set forth the amount (or a reasonable estimate) of
the Harvey Loss or Harvey Losses suffered, or which may be suffered, by a
Harvey Indemnified Party as a result of such Harvey Indemnification Claim. The
Harvey Indemnified Party will furnish to the Holdings Indemnitor such
information (in reasonable detail) it may have with respect to such Harvey
Indemnification Claim (including copies of any summons, complaint or other
pleading which may have been served on it and any written claim, demand,
invoice, billing or other document evidencing or asserting the same).
(b) Third Party Harvey Claims.
(i) If the claim or demand set forth in the
Harvey Notice of Claim is a claim or demand asserted by a third party (a
"Harvey Third Party Claim"), the Holdings Indemnitor shall have 15 days after
the date of receipt by the Holdings Indemnitor of the Harvey Notice of Claim
(the "Harvey Notice Date") to notify the Harvey Indemnified Party in writing of
the election by the Holdings Indemnitor to defend the Third Party Harvey Claim
on behalf of the Harvey Indemnified Party.
(ii) If the Holdings Indemnitor elects to defend a
Third Party Harvey Claim on behalf of the Harvey Indemnified Party, the Harvey
Indemnified Party will make available to the Holdings Indemnitor and its agents
and representatives all records and other materials in their possession which
are reasonably required in the defense of the Third Party Harvey Claim and the
Holdings Indemnitor will pay all expenses payable
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in connection with the defense of the Third Party Harvey Claim as they are
incurred.
(iii) In no event may the Holdings Indemnitor
settle or compromise any Third Party Harvey Claim without the Harvey
Indemnified Party's consent, which will not be unreasonably withheld or
delayed; provided, however, that if a settlement is presented by the Holdings
Indemnitor to the Harvey Indemnified Party for approval and the Harvey
Indemnified Party withholds its consent thereto, then any amount by which the
final Harvey Losses (including reasonable attorneys' fees) resulting from the
resolution of the matter exceeds the rejected settlement amount, plus
attorneys' fees incurred to such date, will be excluded from the amount covered
by the indemnification provided for in this Agreement and will be borne by the
Harvey Indemnified Party.
(iv) If the Holdings Indemnitor elects to defend a
Third Party Harvey Claim, the Harvey Indemnified Party shall have the right to
participate in the defense of the Third Party Harvey Claim, at the Harvey
Indemnified Party's expense (and without the right to indemnification for such
expense under this Agreement); provided, however, that the reasonable fees and
expenses of counsel retained by the Harvey Indemnified Party will be at the
expense of the Holdings Indemnitor if (A) the use of the counsel chosen by the
Holdings Indemnitor to represent the Harvey Indemnified Party would present
such counsel with a conflict of interest; (B) the parties to such proceeding
include both the Harvey Indemnified Party and the Holdings Indemnitor and there
may be legal defenses available to the Harvey Indemnified Party which are
different from or additional to those available by the Holdings Indemnitor; or
(C) the Holdings Indemnitor authorizes the Harvey Indemnified Party to retain a
single separate counsel at the expense of the Holdings Indemnitor.
(v) If the Holdings Indemnitor does not elect to
defend a Third Party Harvey Claim, or does not defend a Third Party Harvey
Claim in good faith, the Harvey Indemnified Party shall have the right, in
addition to any other right or remedy it may have hereunder, at the sole and
exclusive expense of the Holdings Indemnitor, to defend such Third Party Harvey
Claim.
(c) Cooperation in Defense. The Harvey Indemnified Party
will cooperate with the Holdings Indemnitor in the defense of a Third Party
Harvey Claim and make reasonably available the facts relating to the Third
Party Harvey Claim. Subject to the foregoing, (A) no Harvey Indemnified Party
shall have any obligation to participate in the defense of or to defend any
Third Party Harvey Claim, and (B) no Harvey Indemnified Party's defense or of
their participation in the defense of any Third Party Harvey Claim will in any
way diminish or lessen their right to indemnification as provided in this
Agreement.
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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination. This Agreement may be terminated:
(a) By mutual consent of the Harvey Companies and
Holdings at any time prior to the Closing Date; or
(b) By either the Harvey Companies or Holdings if at any
time prior to the Closing Date a court of competent jurisdiction or
governmental, regulatory or administrative agency or commission shall have
issued an order, decree or ruling or taken any other action (which order,
decree, ruling or other action the parties hereto shall use their best efforts
to vacate), in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement.
SECTION 8.2 Effect of Termination. In the event of the
termination of this Agreement as provided in Section 8.1, this Agreement will
forthwith become null and void and there shall be no liability on the part of
any party hereto except (A) as set forth in Section 5.15, Article VII and
Section 10.1 and (B) nothing herein will relieve any party from liability for
any breach hereof occurring prior to such termination.
SECTION 8.3 Fees and Expenses. Each party hereto will pay
all fees, costs and expenses incurred by it in connection with this Agreement
and the transactions contemplated hereby.
SECTION 8.4 Amendment. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
SECTION 8.5 Waiver. At any time prior to the Closing Date,
any party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto, or (c) waive compliance with any of the
agreements or conditions contained herein. Any such extension or waiver will
be valid if set forth in an instrument in writing signed by the party or
parties to be bound thereby. No waiver of any term or condition will be
construed as a waiver of any subsequent breach or a subsequent waiver of the
same term or condition, or a waiver of any other term or condition, of this
Agreement. The failure of any party to assert any of its rights hereunder will
not constitute a waiver of any of such rights.
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ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Survival of Representations, Warranties and
Agreements.
(a) Each of the representations and warranties contained
in this Agreement will survive the Closing and remain in full force and effect
until the second anniversary thereof. Any claim for indemnification asserted
under Article VII within such period of survival will be timely made for
purposes hereof.
(b) Unless a specified period is set forth in this
Agreement (in which event such specified period will control), the covenants
contained in this Agreement will survive the Closing and remain in effect
indefinitely.
SECTION 9.2 Notices. All notices and other communications
given or made pursuant hereto will be in writing and will be deemed to have
been duly given or made as of the date delivered or mailed if delivered
personally or mailed by registered or certified mail (postage prepaid, return
receipt requested), or transmitted by confirmed facsimile, to the parties at
the following addresses or facsimile numbers, as the case may be, or at such
other address or facsimile number for a party as shall be specified by like
notice, except that notices of changes of address or facsimile number will be
effective upon receipt:
(a) if to Holdings, New Parent or Merger Sub:
UNITED/HARVEY HOLDINGS, L.P.
4200 Texas Commerce Tower West
2200 Ross Avenue
Dallas, Texas 75201
Attn: Daniel A. Decker
Facsimile: (214) 220-4949
with a copy to:
JONES, DAY, REAVIS & POGUE
599 Lexington Avenue
New York, New York 10022
Attn: Robert A. Profusek
Facsimile: (214) 755-7306
(b) if to either Harvey Company or a Harvey Equity Holder:
c/o HARVEY HOTEL COMPANY, LTD.
14400 Dallas Parkway, Suite 400
Dallas, Texas 75240
Attn: J. Peter Kline
Facsimile: (214) 233-3909
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with a copy to:
McKINLEY HINTON RINGER LLP
1400 Meadow Park
10440 N. Central Expressway
Dallas, Texas 75231
Attn: G. David Ringer
Facsimile: (214) 360-1010
SECTION 9.3 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule
of law, or public policy, all other conditions and provisions of this Agreement
will nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto will negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
greatest extent possible.
SECTION 9.4 Entire Agreement. This Agreement and the
agreements referred to herein constitute the entire agreement, and supersede
all prior agreements and undertakings, both written and oral, between the
parties, with respect to the subject matter hereof.
SECTION 9.5 Assignment. This Agreement shall not be assigned
by operation of law or otherwise, except that each of Holdings, New Parent and
Merger Sub may assign all or any of its rights hereunder to any Affiliate of
Holdings provided that no such assignment will relieve the assigning party of
its obligations hereunder.
SECTION 9.6 Headings. Article and Section headings in this
Agreement are included herein for convenience of reference only and will not
constitute a part of this Agreement for any other purpose.
SECTION 9.7 Governing Law and Venue. This Agreement will be
governed by, and construed in accordance with, the law of the State of Texas,
without giving effect to the principles of conflict of laws of such State.
Each of the parties hereto hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any Texas state
court or federal court of the United States of America sitting in Dallas
County, Texas, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement.
SECTION 9.8 Certain Definitions. For purposes of this
Agreement:
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<PAGE> 42
(a) "Affiliate" of a Person means a Person that directly
or indirectly, through one or more intermediaries, Controls, is Controlled by,
or is under common Control with, the first mentioned Person;
(b) "Control" (including the terms "controlled by" and
"under common control with") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
management policies of a Person, whether through the ownership of stock, as
trustee or executor, by contract or credit arrangement or otherwise; and
(c) "Person" means an individual, corporation,
partnership, association, trust or any unincorporated organization.
SECTION 9.9 Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when so executed will be deemed to be an original
but all of which taken together will constitute one and the same instrument.
-42-
<PAGE> 43
IN WITNESS WHEREOF, Holdings, New Parent, Merger Sub, Harvey
Hotels, Harvey Management and the Harvey Equity Holders have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
UNITED/HARVEY HOLDINGS, L.P.
By: Hampstead Genpar, L.P.,
its General Partner
By: HH Genpar Partners, its
General Partner
By: Hampstead Associates, Inc.,
its General Partner
By: /s/ Daniel A. Decker
Name: Daniel A. Decker
Title: Executive Vice President
UNITED/HARVEY HOTELS, INC.
By: /s/ Daniel A. Decker
Name: Daniel A. Decker
Title: Executive Vice President
UNITED/HARVEY SUB, INC.
By: /s/ Daniel A. Decker
Name: Daniel A. Decker
Title: Executive Vice President
HARVEY HOTEL COMPANY, LTD.
By: /s/ H. K. Huie, Jr.
H. K. Huie, Jr.,
Managing General Partner
HARVEY HOTEL MANAGEMENT CORPORATION
By: /s/ J. Peter Kline
Name: J. Peter Kline
Title: Authorized Officer
(Signatures continued on next page)
<PAGE> 44
<TABLE>
<CAPTION>
GENERAL
PARTNERSHIP LIMITED PARTNERSHIP
INTERESTS IN INTERESTS IN HARVEY MANAGEMENT
HARVEY HOTELS HARVEY HOTELS COMMON SHARES
------------- ------------------- ----------------
<S> <C> <C> <C>
/s/ H.K. Huie, Jr. 40.6% 10.0% 617
-----------------------------------------
H.K. Huie, Jr.
/s/ J. Peter Kline 16.4% 0.0% 200
-----------------------------------------
J. Peter Kline
/s/ Robert L. Miars 14.8% 0.0% 181
-----------------------------------------
Robert L. Miars
/s/ John A. Beckert 9.6% 0.0% 117
-----------------------------------------
John A. Beckert
/s/ Richard N. Beckert 2.8% 0.0% 34
-----------------------------------------
Richard N. Beckert
/s/ Edward J. Rohling 2.8% 0.0% 34
-----------------------------------------
Edward J. Rohling
</TABLE>
(Signatures continued on next page)
<PAGE> 45
<TABLE>
<CAPTION>
GENERAL
PARTNERSHIP LIMITED PARTNERSHIP
INTERESTS IN INTERESTS IN HARVEY MANAGEMENT
HARVEY HOTELS HARVEY HOTELS COMMON SHARES
------------- ------------------ -----------------
<S> <C> <C> <C>
0.0% 1.0% 12
-----------------------------------------
Molly Ann Huie
</TABLE>
(Signatures continued on next page)
<PAGE> 46
<TABLE>
<CAPTION>
GENERAL
PARTNERSHIP LIMITED PARTNERSHIP
INTERESTS IN INTERESTS IN HARVEY MANAGEMENT
HARVEY HOTELS HARVEY HOTELS COMMON SHARES
------------- ------------------ -----------------
<S> <C> <C> <C>
0.0% 1.0% 12
-----------------------------------------
Mindy Sue Huie
</TABLE>
(Signatures continued on next page)
<PAGE> 47
<TABLE>
<CAPTION>
GENERAL
PARTNERSHIP LIMITED PARTNERSHIP
INTERESTS IN INTERESTS IN HARVEY MANAGEMENT
HARVEY HOTELS HARVEY HOTELS COMMON SHARES
------------- ------------------- -----------------
<S> <C> <C> <C>
0.0% 1.0% 12
-----------------------------------------
Melissa Huie Chenault
</TABLE>
<PAGE> 48
Annex I
to
Combination Agreement
CERTIFICATE OF INCORPORATION
OF
UNITED/HARVEY HOTELS, INC.
FIRST. The name of the corporation is United/Harvey Hotels, Inc. (the
"Company").
SECOND. The address of the Company's registered office in the State
of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle,
Delaware 19801. The name of the Company's registered agent at such address is
The Corporation Trust Company.
THIRD. The purpose of the Company is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "Delaware General Corporation Law").
FOURTH. Section 1. Authorized Capital Stock. The Company is
authorized to issue two classes of capital stock, designated Common Stock and
Preferred Stock. The total number of shares of capital stock that the Company
is authorized to issue is 50,000,000 shares, consisting of 40,000,000 shares of
Common Stock, par value $0.01 per share, and 10,000,000 shares of Preferred
Stock, par value $0.01 per share.
Section 2. Preferred Stock. The Preferred Stock may be issued in one
or more series. The Board of Directors of the Company (the "Board") is hereby
authorized to issue the shares of Preferred Stock in such series and to fix
from time to time before issuance the number of shares to be included in any
such series and the designation, relative powers, preferences, and rights and
qualifications, limitations, or restrictions of all shares of such series. The
authority of the Board with respect to each such series will include, without
limiting the generality of the foregoing, the determination of any or all of
the following:
(a) the number of shares of any series and the
designation to distinguish the shares of such series from the shares
of all other series;
(b) the voting powers, if any, and whether such voting
powers are full or limited in such series;
(c) the redemption provisions, if any, applicable to such
series, including the redemption price or prices to be paid;
<PAGE> 49
(d) whether dividends, if any, will be cumulative or
noncumulative, the dividend rate of such series, and the dates and
preferences of dividends on such series;
(e) the rights of such series upon the voluntary or
involuntary dissolution of, or upon any distribution of the assets of,
the Company;
(f) the provisions, if any, pursuant to which the shares
of such series are convertible into, or exchangeable for, shares of
any other class or classes or of any other series of the same or any
other class or classes of stock, or any other security, of the Company
or any other corporation or other entity, and the price or prices or
the rates of exchange applicable thereto;
(g) the right, if any, to subscribe for or to purchase
any securities of the Company or any other corporation or other
entity;
(h) the provisions, if any, of a sinking fund applicable
to such series; and
(i) any other relative, participating, optional, or other
special powers, preferences, rights, qualifications, limitations, or
restrictions thereof;
all as may be determined from time to time by the Board and stated in the
resolution or resolutions providing for the issuance of such Preferred Stock
(collectively, a "Preferred Stock Designation").
Section 3. Common Stock. Except as may otherwise be provided in a
Preferred Stock Designation, the holders of Common Stock will be entitled to
one vote on each matter submitted to a vote at a meeting of stockholders for
each share of Common Stock held of record by such holder as of the record date
for such meeting.
FIFTH. The Board may make, amend, and repeal the By-Laws of the
Company. Any By-Law made by the Board under the powers conferred hereby may be
amended or repealed by the Board (except as specified in any such By-Law so
made or amended) or by the stockholders in the manner provided in the By-Laws
of the Company. Notwithstanding the foregoing and anything contained in this
Certificate of Incorporation to the contrary, By-Laws 1, 3, 8, 10, 11, 12, 13,
and 39 may not be amended or repealed by the stockholders, and no provision
inconsistent therewith may be adopted by the stockholders, without the
affirmative vote of the holders of at least 80% of the Voting Stock, voting
together as a single class. The Company may in its By-Laws confer powers upon
the Board in addition to the foregoing and in addition to the powers and
authorities expressly conferred upon the Board by applicable law. For the
purposes of this Certificate of
-2-
<PAGE> 50
Incorporation, "Voting Stock" means stock of the Company of any class or series
entitled to vote generally in the election of Directors. Notwithstanding
anything contained in this Certificate of Incorporation to the contrary, the
affirmative vote of the holders of at least 80% of the Voting Stock, voting
together as a single class, is required to amend or repeal, or to adopt any
provisions inconsistent with, this Article Fifth.
SIXTH. Subject to the rights of the holders of any series of
Preferred Stock:
(a) any action required or permitted to be taken by the
stockholders of the Company must be effected at a duly called annual
or special meeting of stockholders of the Company and may not be
effected by any consent in writing of such stockholders; and
(b) special meetings of stockholders of the Company may
be called only by (1) the Chairman of the Board (the "Chairman") and
(2) the Secretary of the Company (the "Secretary") within 10 calendar
days after receipt of the written request of a majority of the total
number of Directors that the Company would have if there were no
vacancies (the "Whole Board").
At any annual meeting or special meeting of stockholders of the Company, only
such business will be conducted or considered as has been brought before such
meeting in the manner provided in the By-Laws of the Company. Notwithstanding
anything contained in this Certificate of Incorporation to the contrary, the
affirmative vote of at least 80% of the Voting Stock, voting together as a
single class, will be required to amend or repeal, or adopt any provision
inconsistent with, this Article Sixth.
SEVENTH. Section 1. Number, Election, and Terms of Directors.
Subject to the rights, if any, of the holders of any series of Preferred Stock
to elect additional Directors under circumstances specified in a Preferred
Stock Designation, the number of the Directors of the Company will not be less
than three nor more than ten and will be fixed from time to time in the manner
described in the By-Laws of the Company. The Directors, other than those who
may be elected by the holders of any series of Preferred Stock, will be
classified with respect to the time for which they severally hold office into
three classes, as nearly equal in number as possible, designated Class I, Class
II, and Class III. At any meeting of stockholders at which Directors are to be
elected, the number of Directors elected may not exceed the greatest number of
Directors then in office in any class of Directors. The Directors first
appointed to Class I will hold office for a term expiring at the annual meeting
of stockholders to be held in 1995; the Directors first appointed to Class II
will hold office for a term expiring at the annual meeting of stockholders to
be held in 1996; and the Directors first appointed to Class III will hold
office for a term expiring
-3-
<PAGE> 51
at the annual meeting of stockholders to be held in 1997, with the members of
each class to hold office until their successors are elected and qualified. At
each succeeding annual meeting of the stockholders of the Company, the
successors of the class of Directors whose terms expire at that meeting will be
elected by plurality vote of all votes cast at such meeting to hold office for
a term expiring at the annual meeting of stockholders held in the third year
following the year of their election. Subject to the rights, if any, of the
holders of any series of Preferred Stock to elect additional Directors under
circumstances specified in a Preferred Stock Designation, Directors may be
elected by the stockholders only at an annual meeting of stockholders.
Election of Directors of the Company need not be by written ballot unless
requested by the Chairman or by the holders of a majority of the Voting Stock
present in person or represented by proxy at a meeting of the stockholders at
which Directors are to be elected.
Section 2. Nomination of Director Candidates. Advance notice of
stockholder nominations for the election of Directors must be given in the
manner provided in the By-Laws of the Company.
Section 3. Newly Created Directorships and Vacancies. Subject to the
rights, if any, of the holders of any series of Preferred Stock to elect
additional Directors under circumstances specified in a Preferred Stock
Designation, newly created directorships resulting from any increase in the
number of Directors and any vacancies on the Board resulting from death,
resignation, disqualification, removal, or other cause will be filled solely by
the affirmative vote of a majority of the remaining Directors then in office,
even though less than a quorum of the Board, or by a sole remaining Director.
Any Director elected in accordance with the preceding sentence will hold office
for the remainder of the full term of the class of Directors in which the new
directorship was created or the vacancy occurred and until such Director's
successor has been elected and qualified. No decrease in the number of
Directors constituting the Board may shorten the term of any incumbent
Director.
Section 4. Removal. Subject to the rights, if any, of the holders of
any series of Preferred Stock to elect additional Directors under circumstances
specified in a Preferred Stock Designation, any Director may be removed from
office by the stockholders only for cause and only in the manner provided in
this Section 4. At any annual meeting or special meeting of the stockholders,
the notice of which states that the removal of a Director or Directors is among
the purposes of the meeting, the affirmative vote of the holders of at least
80% of the Voting Stock, voting together as a single class, may remove such
Director or Directors for cause.
Section 5. Amendment, Repeal, Etc. Notwithstanding anything contained
in this Certificate of Incorporation to the
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<PAGE> 52
contrary, the affirmative vote of at least 80% of the Voting Stock, voting
together as a single class, is required to amend or repeal, or adopt any
provision inconsistent with, this Article Seventh.
EIGHTH. Section 1. Director Indemnification. To the full extent
permitted by the Delaware General Corporation Law or any other applicable law
currently or hereafter in effect, no Director of the Company will be personally
liable to the Company or its stockholders for or with respect to any acts or
omissions in the performance of his or her duties as a Director of the Company.
Any repeal or modification of this Article Eighth will not adversely affect any
right or protection of a Director of the Company existing prior to such repeal
or modification.
Section 2. Business Opportunities and Other Activities. The officers,
directors and stockholders may be investors in or otherwise participate in
other business activities which may be, directly or indirectly, inconsistent
with the interests of the Company or one or more of its affiliates. Nothing
herein or by common law will impose any liability or obligation on any such
person (whether based upon the common law doctrine relating to so-called
"corporate opportunities" or any other general or specific fiduciary obligation
or legal concept) in respect of any act or failure to act the material facts of
which are publicly disclosed or described to the Board of Directors or any
committee thereof.
NINTH. Each person who is or was or had agreed to become a Director
or officer of the Company, and each such person who is or was serving or who
had agreed to serve at the request of the Board or an officer of the Company as
an employee or agent of the Company or as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
entity, whether for profit or not for profit (including the heirs, executors,
administrators, or estate of such person), will be indemnified by the Company
to the full extent permitted by the Delaware General Corporation Law or any
other applicable law as currently or hereafter in effect. The right of
indemnification provided in this Article Ninth (a) will not be exclusive of any
other rights to which any person seeking indemnification may otherwise be
entitled, including without limitation pursuant to any contract approved by a
majority of the Whole Board (whether or not the Directors approving such
contract are or are to be parties to such contract or similar contracts), and
(b) will be applicable to matters otherwise within its scope whether or not
such matters arose or arise before or after the adoption of this Article Ninth.
Without limiting the generality or the effect of the foregoing, the Company may
adopt By-Laws, or enter into one or more agreements with any person, which
provide for indemnification greater or different than that provided in this
Article Ninth or the Delaware General Corporation Law. Any amendment or repeal
of, or adoption of any provision inconsistent with, this Article Tenth will not
adversely affect any right or
-5-
<PAGE> 53
protection existing hereunder, or arising out of events occurring or
circumstances existing, prior to such amendment, repeal, or adoption and no
such amendment, repeal, or adoption, will affect the legality, validity, or
enforceability of any contract entered into or right granted prior to the
effective date of such amendment, repeal, or adoption.
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<PAGE> 54
Annex II
to
Combination Agreement
================================================================================
UNITED/HARVEY HOTELS, INC.
BY-LAWS
As Adopted and in
Effect on __________, 199_
================================================================================
<PAGE> 55
UNITED/HARVEY HOTELS, INC.
BY-LAWS
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
STOCKHOLDERS' MEETINGS
1 . Time and Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 . Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3 . Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
4 . Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
5 . Inspectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
6 . Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
7 . Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
8 . Order of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
DIRECTORS
9 . Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
10. Number, Election, and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
11. Vacancies and Newly Created Directorships . . . . . . . . . . . . . . . . . . . . . . 4
12. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
13. Nominations of Directors; Election . . . . . . . . . . . . . . . . . . . . . . . . . 5
14. Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
15. Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
16. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
17. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
18. Participation in Meetings by Telephone
Conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
19. Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
20. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
21. Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
NOTICES
22. Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
23. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
OFFICERS
24. Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
25. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
26. Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
27. Authority and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
STOCK
28. Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
29. Classes of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
(i)
<PAGE> 56
<TABLE>
<CAPTION>
Page
----
<S> <C>
30. Lost, Stolen, or Destroyed Certificates . . . . . . . . . . . . . . . . . . . . . . . 10
31. Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
32. Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
INDEMNIFICATION
33. Damages and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
34. Insurance, Contracts, and Funding . . . . . . . . . . . . . . . . . . . . . . . . . . 17
GENERAL
35. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
36. Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
37. Reliance Upon Books, Reports, and Records . . . . . . . . . . . . . . . . . . . . . . 17
38. Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
39. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
40. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
(ii)
<PAGE> 57
STOCKHOLDERS' MEETINGS
1. Time and Place of Meetings. All meetings of the stockholders
for the election of Directors or for any other purpose will be held at such
time and place, within or without the State of Delaware, as may be designated
by the Board or, in the absence of a designation by the Board, the Chairman,
the President, or the Secretary, and stated in the notice of meeting. The
Board may postpone and reschedule any previously scheduled annual or special
meeting of the stockholders.
2. Annual Meeting. An annual meeting of the stockholders will be
held at such date and time as may be designated from time to time by the Board,
at which meeting the stockholders will elect by a plurality vote the Directors
to succeed those whose terms expire at such meeting and will transact such
other business as may properly be brought before the meeting in accordance with
By-Law 8.
3. Special Meetings. Special meetings of the stockholders may be
called only by (i) the Chairman and (ii) the Secretary within 10 calendar days
after receipt of the written request of a majority of the total number of
Directors that the Company would have if there were no vacancies (the "Whole
Board"). Any such request by a majority of the Whole Board must be sent to the
Chairman and the Secretary and must state the purpose or purposes of the
proposed meeting. Special meetings of holders of the outstanding Preferred
Stock, if any, may be called in the manner and for the purposes provided in the
applicable Preferred Stock Designation.
4. Notice of Meetings. Written notice of every meeting of the
stockholders, stating the place, date, and hour of the meeting and, in the case
of a special meeting, the purpose or purposes for which the meeting is called,
will be given not less than 10 nor more than 60 calendar days before the date
of the meeting to each stockholder of record entitled to vote at such meeting,
except as otherwise provided herein or by law. When a meeting is adjourned to
another place, date, or time, written notice need not be given of the adjourned
meeting if the place, date, and time thereof are announced at the meeting at
which the adjournment is taken; provided, however, that if the adjournment is
for more than 30 calendar days, or if after the adjournment a new record date
is fixed for the adjourned meeting, written notice of the place, date, and time
of the adjourned meeting must be given in conformity herewith. At any
adjourned meeting, any business may be transacted which properly could have
been transacted at the original meeting.
5. Inspectors. The Board may appoint one or more inspectors of
election to act as judges of the voting and to determine those entitled to vote
at any meeting of the stockholders, or any adjournment thereof, in advance of
such
<PAGE> 58
meeting. The Board may designate one or more persons as alternate inspectors
to replace any inspector who fails to act. If no inspector or alternate is
able to act at a meeting of stockholders, the presiding officer of the meeting
may appoint one or more substitute inspectors.
6. Quorum. Except as otherwise provided by law or in a Preferred
Stock Designation, the holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, will constitute a quorum at all meetings of the stockholders for the
transaction of business thereat. If, however, such quorum is not present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, will have the power to
adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum is present or represented.
7. Voting. Except as otherwise provided by law, by the
Certificate of Incorporation, or in a Preferred Stock Designation, each
stockholder will be entitled at every meeting of the stockholders to one vote
for each share of stock having voting power standing in the name of such
stockholder on the books of the Company on the record date for the meeting and
such votes may be cast either in person or by written proxy. Every proxy must
be duly executed and filed with the Secretary. A stockholder may revoke any
proxy that is not irrevocable by attending the meeting and voting in person or
by filing an instrument in writing revoking the proxy or another duly executed
proxy bearing a later date with the Secretary. The vote upon any question
brought before a meeting of the stockholders may be by voice vote, unless
otherwise required by the Certificate of Incorporation or these By-Laws or
unless the Chairman or the holders of a majority of the outstanding shares of
all classes of stock entitled to vote thereon present in person or by proxy at
such meeting otherwise determine. Every vote taken by written ballot will be
counted by the inspectors of election. When a quorum is present at any
meeting, the affirmative vote of the holders of a majority of the stock present
in person or represented by proxy at the meeting and entitled to vote on the
subject matter and which has actually been voted will be the act of the
stockholders, except in the election of Directors or as otherwise provided in
these By-Laws, the Certificate of Incorporation, a Preferred Stock Designation,
or by law.
8. Order of Business. (a) The Chairman, or such other officer of
the Company designated by a majority of the Whole Board, will call meetings of
the stockholders to order and will act as presiding officer thereof. Unless
otherwise determined by the Board prior to the meeting, the presiding officer
of the meeting of the stockholders will also determine the order of business
and have the authority in his or her sole discretion to regulate the conduct of
any such meeting, including without limitation by imposing restrictions on the
persons (other than
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stockholders of the Company or their duly appointed proxies) who may attend any
such stockholders' meeting, by ascertaining whether any stockholder or his
proxy may be excluded from any meeting of the stockholders based upon any
determination by the presiding officer, in his sole discretion, that any such
person has unduly disrupted or is likely to disrupt the proceedings thereat,
and by determining the circumstances in which any person may make a statement
or ask questions at any meeting of the stockholders.
(b) At an annual meeting of the stockholders, only such business
will be conducted or considered as is properly brought before the meeting. To
be properly brought before an annual meeting, business must be (i) specified in
the notice of meeting (or any supplement thereto) given by or at the direction
of the Board in accordance with By-Law 4, (ii) otherwise properly brought
before the meeting by the presiding officer or by or at the direction of a
majority of the Whole Board, or (iii) otherwise properly requested to be
brought before the meeting by a stockholder of the Company in accordance with
By-Law 8(c).
(c) For business to be properly requested by a stockholder to be
brought before an annual meeting, the stockholder must (i) be a stockholder of
the Company of record at the time of the giving of the notice for such annual
meeting provided for in these By-Laws, (ii) be entitled to vote at such
meeting, and (iii) have given timely notice thereof in writing to the
Secretary. To be timely, a stockholder's notice must be delivered to or mailed
and received at the principal executive offices of the Company not less than 60
calendar days prior to the annual meeting; provided, however, that in the event
public announcement of the date of the annual meeting is not made at least 75
calendar days prior to the date of the annual meeting, notice by the
stockholder to be timely must be so received not later than the close of
business on the 10th calendar day following the day on which public
announcement is first made of the date of the annual meeting. A stockholder's
notice to the Secretary must set forth as to each matter the stockholder
proposes to bring before the annual meeting (A) a description in reasonable
detail of the business desired to brought before the annual meeting and the
reasons for conducting such business at the annual meeting, (B) the name and
address, as they appear on the Company's books, of the stockholder proposing
such business and the beneficial owner, if any, on whose behalf the proposal is
made, (C) the class and number of shares of the Company that are owned
beneficially and of record by the stockholder proposing such business and by
the beneficial owner, if any, on whose behalf the proposal is made, and (D) any
material interest of such stockholder proposing such business and the
beneficial owner, if any, on whose behalf the proposal is made in such
business. Notwithstanding the foregoing provisions of this By-Law 8(c), a
stockholder must also comply with all applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder with
respect to the
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matters set forth in this By-Law 8(c). For purposes of this By-Law 8(c) and
By-Law 13, "public announcement" means disclosure in a press release reported
by the Dow Jones News Service, Associated Press, or comparable national news
service or in a document publicly filed by the Company with the Securities and
Exchange Commission pursuant to Sections 13, 14, or 15(d) of the Securities
Exchange Act of 1934, as amended, or furnished to stockholders. Nothing in
this By-Law 8(c) will be deemed to affect any rights of stockholders to request
inclusion of proposals in the Company's proxy statement pursuant to Rule 14a-8
under the Securities Exchange Act of 1934, as amended.
(d) At a special meeting of stockholders, only such business may
be conducted or considered as is properly brought before the meeting. To be
properly brought before a special meeting, business must be (i) specified in
the notice of the meeting (or any supplement thereto) given by or at the
direction of the Chairman or a majority of the Whole Board in accordance with
By-Law 4 or (ii) otherwise properly brought before the meeting by the presiding
officer or by or at the direction of a majority of the Whole Board.
(e) The determination of whether any business sought to be brought
before any annual or special meeting of the stockholders is properly brought
before such meeting in accordance with this By-Law 8 will be made by the
presiding officer of such meeting. If the presiding officer determines that
any business is not properly brought before such meeting, he or she will so
declare to the meeting and any such business will not be conducted or
considered.
DIRECTORS
9. Function. The business and affairs of the Company will be
managed under the direction of its Board.
10. Number, Election, and Terms. Subject to the rights, if any,
of any series of Preferred Stock to elect additional Directors under
circumstances specified in a Preferred Stock Designation and to the minimum and
maximum number of authorized Directors provided in the Certificate of
Incorporation, the authorized number of Directors may be determined from time
to time only (i) by a vote of a majority of the Whole Board or (ii) by the
affirmative vote of the holders of at least 80% of the Voting Stock, voting
together as a single class. The Directors, other than those who may be elected
by the holders of any series of the Preferred Stock, will be classified with
respect to the time for which they severally hold office in accordance with the
Certificate of Incorporation.
11. Vacancies and Newly Created Directorships. Subject to the
rights, if any, of the holders of any series of Preferred Stock to elect
additional Directors under circumstances specified
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in a Preferred Stock Designation, newly created directorships resulting from
any increase in the number of Directors and any vacancies on the Board
resulting from death, resignation, disqualification, removal, or other cause
will be filled solely by the affirmative vote of a majority of the remaining
Directors then in office, even though less than a quorum of the Board, or by a
sole remaining Director. Any Director elected in accordance with the preceding
sentence will hold office for the remainder of the full term of the class of
Directors in which the new directorship was created or the vacancy occurred and
until such Director's successor is elected and qualified. No decrease in the
number of Directors constituting the Board will shorten the term of an
incumbent Director.
12. Removal. Subject to the rights, if any, of the holders of any
series of Preferred Stock to elect additional Directors under circumstances
specified in a Preferred Stock Designation, any Director may be removed from
office by the stockholders only for cause and only in the manner provided in
the Certificate of Incorporation and, if applicable, any amendment to this
By-Law 12.
13. Nominations of Directors; Election. (a) Subject to the
rights, if any, of the holders of any series of Preferred Stock to elect
additional Directors under circumstances specified in a Preferred Stock
Designation, only persons who are nominated in accordance with the following
procedures will be eligible for election at a meeting of stockholders as
Directors of the Company.
(b) Nominations of persons for election as Directors of the
Company may be made only at an annual meeting of stockholders (i) by or at the
direction of the Board or (ii) by any stockholder who is a stockholder of
record at the time of giving of notice provided for in this By-Law 13, who is
entitled to vote for the election of Directors at such meeting, and who
complies with the procedures set forth in this By-Law 13. All nominations by
stockholders must be made pursuant to timely notice in proper written form to
the Secretary.
(c) To be timely, a stockholder's notice must be delivered to or
mailed and received at the principal executive offices of the Company not less
than 60 calendar days prior to the annual meeting of stockholders; provided,
however, that in the event that public announcement of the date of the annual
meeting is not made at least 75 calendar days prior to the date of the annual
meeting, notice by the stockholder to be timely must be so received not later
than the close of business on the 10th calendar day following the day on which
public announcement is first made of the date of the annual meeting. To be in
proper written form, such stockholder's notice must set forth or include (i)
the name and address, as they appear on the Company's books, of the stockholder
giving the notice and of the beneficial owner, if any, on whose behalf the
nomination is made; (ii) a
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representation that the stockholder giving the notice is a holder of record of
stock of the Company entitled to vote at such annual meeting and intends to
appear in person or by proxy at the annual meeting to nominate the person or
persons specified in the notice; (iii) the class and number of shares of stock
of the Company owned beneficially and of record by the stockholder giving the
notice and by the beneficial owner, if any, on whose behalf the nomination is
made; (iv) a description of all arrangements or understandings between or among
any of (A) the stockholder giving the notice, (B) the beneficial owner on whose
behalf the notice is given, (C) each nominee, and (D) any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder giving the notice; (v) such other
information regarding each nominee proposed by the stockholder giving the
notice as would be required to be included in a proxy statement filed pursuant
to the proxy rules of the Securities and Exchange Commission had the nominee
been nominated, or intended to be nominated, by the Board; and (vi) the signed
consent of each nominee to serve as a director of the Company if so elected.
At the request of the Board, any person nominated by the Board for election as
a Director must furnish to the Secretary that information required to be set
forth in a stockholder's notice of nomination which pertains to the nominee.
The presiding officer of any annual meeting will, if the facts warrant,
determine that a nomination was not made in accordance with the procedures
prescribed by this By-Law 13, and if he or she should so determine, he or she
will so declare to the meeting and the defective nomination will be
disregarded. Notwithstanding the foregoing provisions of this By-Law 13, a
stockholder must also comply with all applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder with
respect to the matters set forth in this By-Law 13.
14. Resignation. Any Director may resign at any time by giving
written notice of his resignation to the Chairman or the Secretary. Any
resignation will be effective upon actual receipt by any such person or, if
later, as of the date and time specified in such written notice.
15. Regular Meetings. Regular meetings of the Board may be held
immediately after the annual meeting of the stockholders and at such other time
and place either within or without the State of Delaware as may from time to
time be determined by the Board. Notice of regular meetings of the Board need
not be given.
16. Special Meetings. Special meetings of the Board may be called
by the Chairman or the President on one day's notice to each Director by whom
such notice is not waived, given either personally or by mail, telephone,
telegram, telex, facsimile, or similar medium of communication, and will be
called by the Chairman or the President in, like manner and on like notice on
the written request of five or more Directors. Special meetings
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of the Board may be held at such time and place either within or without the
State of Delaware as is determined by the Board or specified in the notice of
any such meeting.
17. Quorum. At all meetings of the Board, a majority of the total
number of Directors then in office will constitute a quorum for the transaction
of business. Except for the designation of committees as hereinafter provided
and except for actions required by these By-Laws or the Certificate of
Incorporation to be taken by a majority of the Whole Board, the act of a
majority of the Directors present at any meeting at which there is a quorum
will be the act of the Board. If a quorum is not present at any meeting of the
Board, the Directors present thereat may adjourn the meeting from time to time
to another place, time, or date, without notice other than announcement at the
meeting, until a quorum is present.
18. Participation in Meetings by Telephone Conference. Members of
the Board or any committee designated by the Board may participate in a meeting
of the Board or any such committee, as the case may be, by means of telephone
conference or similar means by which all persons participating in the meeting
can hear each other, and such participation in a meeting will constitute
presence in person at the meeting.
19. Committees. (a) The Board, by resolution passed by a majority
of the Whole Board, will designate an executive committee (the "Executive
Committee") of not less than three members of the Board. The Executive
Committee will have and may exercise the powers of the Board, except the power
to amend these By-Laws or the Certificate of Incorporation (except, to the
extent authorized by a resolution of the Whole Board, to fix the designation,
preferences, and other terms of any series of Preferred Stock), adopt an
agreement of merger or consolidation, authorize the issuance of stock, declare
a dividend, or recommend to the stockholders the sale, lease, or exchange of
all or substantially all of the Company's property and assets, a dissolution of
the Company, or a revocation of a dissolution, and except as otherwise provided
by law. A majority of the members of the Executive Committee will constitute a
quorum for the transaction of business, and the act of a majority of the
members of the Executive Committee will constitute the act of such committee.
(b) The Board, by resolution passed by a majority of the Whole
Board, may designate one or more additional committees, each such committee to
consist of one or more Directors and each to have such lawfully delegable
powers and duties as the Board may confer.
(c) The Executive Committee and each other committee of the Board
will serve at the pleasure of the Board or as may be specified in any
resolution from time to time adopted by the Board. The Board may designate one
or more Directors as
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alternate members of any such committee, who may replace any absent or
disqualified member at any meeting of such committee. In lieu of such action
by the Board, in the absence or disqualification of any member of a committee
of the Board, the members thereof present at any such meeting of such committee
and not disqualified from voting, whether or not they constitute a quorum, may
unanimously appoint another member of the Board to act at the meeting in the
place of any such absent or disqualified member.
(d) Except as otherwise provided in these By-Laws or by law, any
committee of the Board, to the extent provided in Paragraph (a) of this By-Law
or, if applicable, in the resolution of the Board, will have and may exercise
all the powers and authority of the Board in the direction of the management of
the business and affairs of the Company. Any such committee designated by the
Board will have such name as may be determined from time to time by resolution
adopted by the Board. Except as provided in Paragraph (a) of this By-Law 19 or
as otherwise prescribed by the Board, a majority of the members of any
committee of the Board will constitute a quorum for the transaction of
business, and the act of a majority of the members present at a meeting at
which there is a quorum will be the act of such committee. Each committee of
the Board may prescribe its own rules for calling and holding meetings and its
method of procedure, subject to any rules prescribed by the Board, and will
keep a written record of all actions taken by it.
20. Compensation. The Board may establish the compensation for,
and reimbursement of the expenses of, Directors for membership on the Board and
on committees of the Board, attendance at meetings of the Board or committees
of the Board, and for other services by Directors to the Company or any of its
majority-owned subsidiaries.
21. Rules. The Board may adopt rules and regulations for the
conduct of meetings and the oversight of the management of the affairs of the
Company.
NOTICES
22. Generally. Except as otherwise provided by law, these
By-Laws, or the Certificate of Incorporation, whenever by law or under the
provisions of the Certificate of Incorporation or these By-Laws notice is
required to be given to any Director or stockholder, it will not be construed
to require personal notice, but such notice may be given in writing, by mail,
addressed to such Director or stockholder, at the address of such Director or
stockholder as it appears on the records of the Company, with postage thereon
prepaid, and such notice will be deemed to be given at the time when the same
is deposited in the United States mail. Notice to Directors may also be given
by telephone,
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telegram, telex, facsimile, or similar medium of communication or as otherwise
may be permitted by these By-Laws.
23. Waivers. Whenever any notice is required to be given by law
or under the provisions of the Certificate of Incorporation or these By-Laws, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time of the event for which notice is to be
given, will be deemed equivalent to such notice. Attendance of a person at a
meeting will constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened.
OFFICERS
24. Generally. The officers of the Company will be elected by the
Board and will consist of a Chairman (who, unless the Board specifies
otherwise, will also be the Chief Executive Officer), a President, a Secretary,
and a Treasurer. The Board of Directors may also choose any or all of the
following: one or more Vice Chairmen, one or more Assistants to the Chairman,
one or more Vice Presidents (who may be given particular designations with
respect to authority, function, or seniority), and such other officers as the
Board may from time to time determine. Notwithstanding the foregoing, by
specific action the Board may authorize the Chairman to appoint any person to
any office other than Chairman, President, Secretary, or Treasurer. Any number
of offices may be held by the same person. Any of the offices may be left
vacant from time to time as the Board may determine. In the case of the
absence or disability of any officer of the Company or for any other reason
deemed sufficient by a majority of the Board, the Board may delegate the absent
or disabled officer's powers or duties to any other officer or to any Director.
25. Compensation. The compensation of all officers and agents of
the Company who are also Directors of the Company will be fixed by the Board or
by a committee of the Board. The Board may fix, or delegate the power to fix,
the compensation of other officers and agents of the Company to an officer of
the Company.
26. Succession. The officers of the Company will hold office
until their successors are elected and qualified. Any officer may be removed
at any time by the affirmative vote of a majority of the Whole Board. Any
vacancy occurring in any office of the Company may be filled by the Board or by
the Chairman as provided in By-Law 24.
27. Authority and Duties. Each of the officers of the Company
will have such authority and will perform such duties as
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are customarily incident to their respective offices or as may be specified
from time to time by the Board.
STOCK
28. Certificates. Certificates representing shares of stock of
the Company will be in such form as is determined by the Board, subject to
applicable legal requirements. Each such certificate will be numbered and its
issuance recorded in the books of the Company, and such certificate will
exhibit the holder's name and the number of shares and will be signed by, or in
the name of, the Company by the Chairman and the Secretary or an Assistant
Secretary, or the Treasurer or an Assistant Treasurer, and will also be signed
by, or bear the facsimile signature of, a duly authorized officer or agent of
any properly designated transfer agent of the Company. Any or all of the
signatures and the seal of the Company, if any, upon such certificates may be
facsimiles, engraved, or printed. Such certificates may be issued and delivered
notwithstanding that the person whose facsimile signature appears thereon may
have ceased to be such officer at the time the certificates are issued and
delivered.
29. Classes of Stock. The designations, preferences, and relative
participating, optional, or other special rights of the various classes of
stock or series thereof, and the qualifications, limitations, or restrictions
thereof, will be set forth in full or summarized on the face or back of the
certificates which the Company issues to represent its stock or, in lieu
thereof, such certificates will set forth the office of the Company from which
the holders of certificates may obtain a copy of such information.
30. Lost, Stolen, or Destroyed Certificates. The Secretary may
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Company alleged to have
been lost, stolen, or destroyed, upon the making of an affidavit of that fact,
satisfactory to the Secretary, by the person claiming the certificate of stock
to be lost, stolen, or destroyed. As a condition precedent to the issuance of
a new certificate or certificates, the Secretary may require the owners of such
lost, stolen, or destroyed certificate or certificates to give the Company a
bond in such sum and with such surety or sureties as the Secretary may direct
as indemnity against any claims that may be made against the Company with
respect to the certificate alleged to have been lost, stolen, or destroyed or
the issuance of the new certificate.
31. Transfers. Upon surrender to the Company or the transfer
agent of the Company of a certificate for shares duly endorsed or accompanied
by proper evidence of succession, assignment, or authority to transfer, it will
be the duty of the Company to issue, or to cause its transfer agent to issue, a
new
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certificate to the person entitled thereto, cancel the old certificate, and
record the transaction upon its books.
32. Record Dates. (a) In order that the Company may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the Board may fix a record date, which will not be
more than 60 nor less than 10 calendar days before the date of such meeting.
If no record date is fixed by the Board, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders will
be at the close of business on the calendar day next preceding the day on which
notice is given, or, if notice is waived, at the close of business on the
calendar day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of the stockholders will apply to any adjournment of the meeting;
provided, however, that the Board may fix a new record date for the adjourned
meeting.
(b) In order that the Company may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion, or exchange of stock, or for the purpose of any other
lawful action, the Board may fix a record date, which record date will not be
more than 60 calendar days prior to such action. If no record date is fixed,
the record date for determining stockholders for any such purpose will be at
the close of business on the calendar day on which the Board adopts the
resolution relating thereto.
(c) The Company will be entitled to treat the person in whose name
any share of its stock is registered as the owner thereof for all purposes, and
will not be bound to recognize any equitable or other claim to, or interest in,
such share on the part of any other person, whether or not the Company has
notice thereof, except as expressly provided by applicable law.
INDEMNIFICATION
33. Damages and Expenses. (a) Without limiting the generality or
effect of Article Ninth of the Certificate of Incorporation, the Company will
to the fullest extent permitted by applicable law as then in effect indemnify
any person (an "Indemnitee") who is or was involved in any manner (including
without limitation as a party or a witness) or is threatened to be made so
involved in any threatened, pending, or completed investigation, claim, action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
(including without limitation any action, suit, or proceeding by or in the
right of the Company to procure a judgment in its favor) (a "Proceeding") by
reason of the fact that such person is or was or had agreed to become a
Director, officer, employee, or agent of the Company, or
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is or was serving at the request of the Board (as evidenced by a resolution or
other action adopted by the Board) or an officer of the Company (evidenced by a
writing executed by the officer) as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other entity,
whether for profit or not for profit (including the heirs, executors,
administrators, or estate of such person), or anything done or not by such
person in any such capacity, against all expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and reasonably
incurred by such person in connection with such Proceeding. Such
indemnification will be a contract right and will include the right to receive
payment in advance of any expenses incurred by an Indemnitee in connection with
such Proceeding, consistent with the provisions of applicable law as then in
effect.
(b) The right of indemnification provided in this By-Law 33 will
not be exclusive of any other rights to which any person seeking
indemnification may otherwise be entitled, and will be applicable to
Proceedings commenced or continuing after the adoption of this By-Law 33,
whether arising from acts or omissions occurring before or after such adoption.
(c) In furtherance, but not in limitation of the foregoing
provisions, the following procedures, presumptions, and remedies will apply
with respect to advancement of expenses and the right to indemnification under
this By-Law 33:
(i) All reasonable expenses incurred by or on behalf of
an Indemnitee in connection with any Proceeding will be advanced to
the Indemnitee by the Company within 30 calendar days after the
receipt by the Company of a statement or statements from the
Indemnitee requesting such advance or advances from time to time,
whether prior to or after final disposition of such Proceeding. Such
statement or statements will describe in reasonable detail the
expenses incurred by the Indemnitee and, if and to the extent required
by law at the time of such advance, will include or be accompanied by
an undertaking by or on behalf of the Indemnitee to repay such amounts
advanced as to which it may ultimately be determined that the
Indemnitee is not entitled. If such an undertaking is required by law
at the time of an advance, no security will be required for such
undertaking and such undertaking will be accepted without reference to
the recipient's financial ability to make repayment.
(ii) To obtain indemnification under this By-Law 33, the
Indemnitee will submit to the Secretary a written request, including
such documentation supporting the claim as is reasonably available to
the Indemnitee and is reasonably necessary to determine whether and to
what extent the Indemnitee is entitled to indemnification (the
"Supporting Documentation"). The determination of the
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Indemnitee's entitlement to indemnification will be made not less than
60 calendar days after receipt by the Company of the written request
for indemnification together with the Supporting Documentation. The
Secretary will promptly upon receipt of such a request for
indemnification advise the Board in writing that the Indemnitee has
requested indemnification. The Indemnitee's entitlement to
indemnification under this By-Law 33 will be determined in one of the
following ways: (A) by a majority vote of the Disinterested Directors
(as hereinafter defined), if they constitute a quorum of the Board,
or, in the case of an Indemnitee that is not a present or former
officer of the Company, by any committee of the Board or committee of
officers or agents of the Company designated for such purpose by a
majority of the Whole Board; (B) by a written opinion of Independent
Counsel if (1) a Change of Control has occurred and the Indemnitee so
requests or (2) in the case of an Indemnitee that is a present or
former officer of the Company, a quorum of the Board consisting of
Disinterested Directors is not obtainable or, even if obtainable, a
majority of such Disinterested Directors so directs; (C) by the
stockholders (but only if a majority of the Disinterested Directors,
if they constitute a quorum of the Board, presents the issue of
entitlement to indemnification to the stockholders for their
determination); or (D) as provided in subparagraph (iii) below. In
the event the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to clause (B) above, a majority
of the Disinterested Directors will select the Independent Counsel,
but only an Independent Counsel to which the Indemnitee does not
reasonably object; provided, however, that if a Change of Control has
occurred, the Indemnitee will select such Independent Counsel, but
only an Independent Counsel to which the Board does not reasonably
object.
(iii) Except as otherwise expressly provided in this By-Law
33, the Indemnitee will be presumed to be entitled to indemnification
under this By-Law 33 upon submission of a request for indemnification
together with the Supporting Documentation in accordance with
subparagraph (c)(ii) above, and thereafter the Company will have the
burden of proof to overcome that presumption in reaching a contrary
determination. In any event, if the person or persons empowered under
subparagraph (c)(ii) to determine entitlement to indemnification has
not been appointed or has not made a determination within 60 calendar
days after receipt by the Company of the request thereof or together
with the Supporting Documentation, the Indemnitee will be deemed to be
entitled to indemnification and the Indemnitee will be entitled to
such indemnification unless (A) the Indemnitee misrepresented or
failed to disclose a material fact in making the request for
indemnification or in the Supporting Documentation or (B) such
indemnification is
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prohibited by law. The termination of any Proceeding described in
paragraph (a) of this By-Law 33, or of any claim, issue, or matter
therein, by judgment, order, settlement, or conviction, or upon a plea
of nolo contendere or its equivalent, will not, of itself, adversely
affect the right of the Indemnitee to indemnification or create a
presumption that the Indemnitee did not act in good faith and in a
manner which the Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any
criminal Proceeding, that the Indemnitee had reasonable cause to
believe that his conduct was unlawful.
(iv) (A) In the event that a determination is made
pursuant to subparagraph (c)(ii) that the Indemnitee is not entitled
to indemnification under this By-Law 33, (1) the Indemnitee will be
entitled to seek an adjudication of his or her entitlement to such
indemnification either, at the Indemnitee's sole option, in (x) an
appropriate court of the State of Delaware or any other court of
competent jurisdiction or (y) an arbitration to be conducted by a
single arbitrator pursuant to the rules of the American Arbitration
Association; (2) any such judicial proceeding or arbitration will be
de novo and the Indemnitee will not be prejudiced by reason of such
adverse determination; and (3) in any such judicial proceeding or
arbitration the Company will have the burden of proving that the
Indemnitee is not entitled to indemnification under this By-Law 33.
(B) If a determination is made or deemed to have been
made, pursuant to subparagraph (c)(ii) or (iii) of this By-Law 33,
that the Indemnitee is entitled to indemnification, the Company will
be obligated to pay the amounts constituting such indemnification
within five business days after such determination has been made or
deemed to have been made and will be conclusively bound by such
determination unless (1) the Indemnitee misrepresented or failed to
disclose a material fact in making the request for indemnification or
in the Supporting Documentation or (2) such indemnification is
prohibited by law. In the event that advancement of expenses is not
timely made pursuant to subparagraph (c)(i) of this By-Law 33 or
payment of indemnification is not made within five business days after
a determination of entitlement to indemnification has been made or
deemed to have been made pursuant to subparagraph (c)(ii) or (iii) of
this By-Law 33, the Indemnitee will be entitled to seek judicial
enforcement of the Company's obligation to pay to the Indemnitee such
advancement of expenses or indemnification. Notwithstanding the
foregoing, the Company may bring an action, in an appropriate court in
the State of Delaware or any other court of competent jurisdiction,
contesting the right of the Indemnitee to receive indemnification
hereunder due to the occurrence of any event described in subclause
(1) or (2) of this clause
-14-
<PAGE> 71
(B) (a "Disqualifying Event"); provided, however, that in any such
action the Company will have the burden of proving the occurrence of
such Disqualifying Event.
(C) The Company will be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to the
provisions of this subparagraph (c)(iv) that the procedures and
presumptions of this By-Law 33 are not valid, binding, and enforceable
and will stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this By-Law 33.
(D) In the event that the Indemnitee, pursuant to the
provisions of this subparagraph (c)(iv), seeks a judicial adjudication
of, or an award in arbitration to enforce, his rights under, or to
recover damages for breach of, this By-Law 33, the Indemnitee will be
entitled to recover from the Company, and will be indemnified by the
Company against, any expenses actually and reasonably incurred by the
Indemnitee if the Indemnitee prevails in such judicial adjudication or
arbitration. If it is determined in such judicial adjudication or
arbitration that the Indemnitee is entitled to receive part but not
all of the indemnification or advancement of expenses sought, the
expenses incurred by the Indemnitee in connection with such judicial
adjudication or arbitration will be prorated accordingly.
(v) For purposes of this paragraph (c):
(A) "Change in Control" means the occurrence of any of
the following events:
(1) The Company is merged, consolidated, or
reorganized into or with another corporation or other legal
entity, and as a result of such merger, consolidation, or
reorganization less than a majority of the combined voting
power of the then-outstanding securities of such corporation
or entity immediately after such transaction are held in the
aggregate by the holders of the Voting Stock immediately prior
to such transaction;
(2) The Company sells or otherwise transfers all
or substantially all of its assets to another corporation or
other legal entity and, as a result of such sale or transfer,
less than a majority of the combined voting power of the
then-outstanding securities of such other corporation or
entity immediately after such sale or transfer is held in the
aggregate by the holders of Voting Stock immediately prior to
such sale or transfer;
(3) The Company files a report or proxy statement
with the Securities and Exchange Commission pursuant to
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<PAGE> 72
the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), disclosing in response to Form 8-K or
Schedule 14A (or any successor schedule, form, or report or
item therein) that a change in control of the Company has
occurred or will occur in the future pursuant to any then-
existing contract or transaction; or
(4) If, during any period of two consecutive
years, individuals who at the beginning of any such period
constitute the Directors cease for any reason to constitute at
least a majority thereof; provided, however, that for purposes
of this clause (4) each Director who is first elected, or
first nominated for election by the Company's stockholders, by
a vote of at least two-thirds of the Directors (or a committee
of the Board) then still in office who were Directors at the
beginning of any such period will be deemed to have been a
Director at the beginning of such period.
Notwithstanding the foregoing provisions of clause (3) of this
paragraph (c)(v)(A), unless otherwise determined in a specific case by
majority vote of the Board, a "Change in Control" will not be deemed
to have occurred for purposes of such clause (3) solely because (x)
the Company, (y) an entity in which the Company, directly or
indirectly, beneficially owns 50% or more of the voting securities (a
"Subsidiary"), or (z) any employee stock ownership plan or any other
employee benefit plan of the Company or any Subsidiary either files or
becomes obligated to file a report or a proxy statement under or in
response to Form 8-K or Schedule 14A (or any successor schedule, form,
or report or item therein) under the Exchange Act disclosing
beneficial ownership by it of shares of Voting Stock or because the
Company reports that a change in control of the Company has occurred
or will occur in the future by reason of such beneficial ownership.
(B) "Disinterested Director" means a Director of the
Company who is not or was not a party to the Proceeding in respect of
which indemnification is sought by the Indemnitee.
(C) "Independent Counsel" means a law firm or a member of
a law firm that neither presently is, nor in the past five years has
been, retained to represent (1) the Company or the Indemnitee in any
matter material to either such party or (2) any other party to the
Proceeding giving rise to a claim for indemnification under this
By-Law 33. Notwithstanding the foregoing, the term "Independent
Counsel" will not include any person who, under the applicable
standards of professional conduct then prevailing under the law of the
State of Delaware, would be precluded from representing either the
Company or the Indemnitee in an
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<PAGE> 73
action to determine the Indemnitee's rights under this By-Law 33.
(d) If any provision or provisions of this By-Law 33 are held to
be invalid, illegal, or unenforceable for any reason whatsoever: (i) the
validity, legality, and enforceability of the remaining provisions of this
By-Law 33 (including without limitation all portions of any paragraph of this
By-Law 33 containing any such provision held to be invalid, illegal, or
unenforceable, that are not themselves invalid, illegal, or unenforceable) will
not in any way be affected or impaired thereby and (ii) to the fullest extent
possible, the provisions of this By-Law 33 (including without limitation all
portions of any paragraph of this By-Law 33 containing any such provision held
to be invalid, illegal, or unenforceable, that are not themselves invalid,
illegal, or unenforceable) will be construed so as to give effect to the intent
manifested by the provision held invalid, illegal, or unenforceable.
34. Insurance, Contracts, and Funding. The Company may purchase
and maintain insurance to protect itself and any Indemnitee against any
expenses, judgments, fines, and amounts paid in settlement or incurred by any
Indemnitee in connection with any Proceeding referred to in By-Law 33 or
otherwise, to the fullest extent permitted by applicable law as then in effect.
The Company may enter into contracts with any person entitled to
indemnification under By-Law 33 or otherwise, and may create a trust fund,
grant a security interest, or use other means (including without limitation a
letter of credit) to ensure the payment of such amounts as may be necessary to
effect indemnification as provided in By-Law 33. Notwithstanding anything to
the contrary contained in By-Law 33, in the event that the Company enters into
a contract with any person providing for indemnification of such person, the
provisions of such contract will exclusively govern the Company's obligations
in respect of indemnification for or advancement of fees or disbursements of
such person's counsel or any other professional engaged by such person.
GENERAL
35. Fiscal Year. The fiscal year of the Company will end on
__________________ of each year or such other date as may be fixed from time to
time by the Board.
36. Seal. The Board may adopt a corporate seal and use the same
by causing it or a facsimile thereof to be impressed or affixed or reproduced
or otherwise.
37. Reliance Upon Books, Reports, and Records. Each Director,
each member of a committee designated by the Board, and each officer of the
Company will, in the performance of his or her duties, be fully protected in
relying in good faith upon the
-17-
<PAGE> 74
records of the Company and upon such information, opinions, reports, or
statements presented to the Company by any of the Company's officers or
employees, or committees of the Board, or by any other person or entity as to
matters the Director, committee member, or officer believes are within such
other person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Company.
38. Time Periods. In applying any provision of these By-Laws that
requires that an act be done or not be done a specified number of days prior to
an event or that an act be done during a period of a specified number of days
prior to an event, calendar days will be used unless otherwise specified, the
day of the doing of the act will be excluded, and the day of the event will be
included.
39. Amendments. Except as otherwise provided by law or by the
Certificate of Incorporation or these By-Laws, these By-Laws or any of them may
be amended in any respect or repealed at any time, either (i) at any meeting of
stockholders, provided that any amendment or supplement proposed to be acted
upon at any such meeting has been described or referred to in the notice of
such meeting, or (ii) at any meeting of the Board, provided that no amendment
adopted by the Board may vary or conflict with any amendment adopted by the
stockholders.
40. Certain Defined Terms. Terms used herein with initial capital
letters that are not otherwise defined are used herein as defined in the
Certificate of Incorporation.
-18-
<PAGE> 75
Annex IV
to
Combination Agreement
United/Harvey Stockholders Agreement
BOARD REPRESENTATION: Ten directors (initially five named by
Hampstead, three named by Harvey (Mr. Huie,
J. Peter Kline and John Beckert) and two
others mutually acceptable to Hampstead and
Harvey); if Mr. Huie sells his shares, he
will not stand for reelection, and the board
will be reduced to nine. A representative of
Hampstead will be chairman of the board, at
least initially.
If there is a meaningful reduction (the
amount to be defined) in the ownership of J.
Peter Kline or John Beckert for any reason
other than a sale for the purpose of
generating proceeds to pay off any
outstanding tax loans, the agreement will
provide for a decrease in Harvey's board
representation.
EXECUTIVE COMMITTEE: Two Hampstead nominees and one Harvey
nominee; any other members must be mutually
acceptable to Hampstead and Harvey.
OPTION ON MR. HUIE SHARES: Hampstead will have a 5-year option to
purchase Mr. Huie's shares; for the first 30
days after closing of the United/Harvey
combination, the purchase price will be the
same price paid to the tendering shareholders
of United ($25.00 per share). After this
30-day period:
(1) Hampstead's option price will be a
"market" price, but not less than the
price per share specified above, and
(2) Mr. Huie will have the right to sell his
shares for cash to a third party at any
price; however, upon receipt of notice
of Mr. Huie's intention to sell to a
third party, Hampstead will have an
option for 10 days to purchase any or
all of such shares at the same price at
which Mr. Huie proposes to sell to the
third party.
TRANSFERS OF SHARES: Transfers to certain related parties or in a
registered public offering and any transfers
by Mr. Huie to Hampstead pursuant to the
foregoing paragraph will not be subject to
any restrictions. Other transfers by any
individual member of the Harvey group will be
subject to Hampstead's prior right during a
10-day period to purchase on the terms
offered to or by the third party; in lieu of
exercising such purchase rights, Hampstead
may elect to participate in the proposed
third party sale on a ratable basis. The
Harvey owners will have the same right, with
respect to shares owned by Hampstead.
PURCHASES OF SHARES: This agreement will incorporate our business
deal on the $20 million of "Preferred Stock"
(which will provide that Harvey will not be
obligated or have the right to purchase its
pro rata share of the Preferred Stock).
Additionally, if Hampstead or Harvey proposes
to acquire more than [100,000] additional
shares, it will permit the other to
participate in the purchase in proportion to
its relative voting power. Furthermore, if
Hampstead or Harvey does not intend to fully
exercise any purchase rights which are made
available to stockholders generally, the
participating party
<PAGE> 76
may require such rights to be exercised for
its account (by making the required capital
available) and immediately transferring the
securities received from United/Harvey.
VOTING: This agreement will not limit the directors
of United/Harvey in any way; instead, it is
limited to voting by Hampstead and Harvey as
shareholders with respect to certain issues
such as election of directors and the
buy/sell matters mentioned above.
TERM; TERMINATION: Five-year term; subject to earlier
termination upon: (1) dissolution or
insolvency of United/Harvey, (2) Hampstead
and the Harvey group ceasing to own at least
30% of voting power, collectively, or (3) if
Hampstead or the Harvey group reduces its
ownership below levels to be agreed upon.
OTHER PROVISIONS: Customary for agreements of this type.
-2-
<PAGE> 1
EXHIBIT 99.(c)(3)
United Inns, Inc.
c/o Smith Barney, Inc.
1345 Avenue of the Americas
New York, New York 10007
November 4, 1994
United/Harvey Holdings, L.P.
c/o The Hampstead Group, Inc.
4200 Texas Commerce Tower West
2200 Ross Avenue
Dallas, Texas 75201
Attention: Robert Whitman
Harvey Hotel Company, Ltd.
14400 Dallas Parkway
Suite 400
Dallas, Texas 75240
Attention: J. Peter Kline
Ladies and Gentlemen:
In connection with your proposal to us dated October 31, 1994, as
amended on the date hereof ("Your Proposal"), we are pleased to advise you that
we will enter into exclusive negotiations with you regarding the definitive
terms of a business combination between the two parties based upon Your
Proposal. This will confirm that we expect to proceed immediately to negotiate
the definitive documentation in order to arrive at definitive documentation
acceptable to each of us.
In order to induce you to commence negotiations to arrive at the
definitive documentation, United agrees to the following:
<PAGE> 2
United/Harvey Holdings, L.P.
Harvey Hotel Company, Ltd.
November 4, 1994
Page 2
1. No Shop, etc.
From and after the execution of this letter, United
shall immediately cease and cause to be terminated any
existing negotiations, or prior negotiations with any party
previously conducted, with respect to a business combination
or a change in control (a "Change in Control Transaction").
Further, from and after the execution of this letter,
United shall not, and will cause its respective
representatives not to, solicit any offers from any other
party relating to a Change of Control Transaction during the
period preceding the signing of a definitive agreement, but
not later than January 31, 1995 (the "Exclusivity Period").
In addition, except as may otherwise be required by
fiduciary obligations under applicable law, as advised by
counsel, in respect of an Unsolicited Proposal (as defined
below), United shall, during the Exclusivity Period,
exclusively negotiate with you in good faith to reach a
definitive agreement and to enter
<PAGE> 3
United/Harvey Holdings, L.P.
Harvey Hotel Company, Ltd.
November 4, 1994
Page 3
into definitive documentation relating to a business
combination.
Subject to applicable legal requirements, including
our obligations under the various State and Federal securities
acts and the Rules of the New York Stock Exchange, the
contents of this letter and the transactions contemplated
hereby and all negotiations related hereto and thereto will be
held confidential and not disclosed by United without your
prior approval (which approval will not be unreasonably
withheld). We call to your attention that, because United has
filed a Registration Statement on Form S-1 with the Securities
and Exchange Commission covering the sale of 60,000 shares of
stock, we believe that additional disclosure regarding a
business combination, which may include disclosure of the
existence of, and some terms of, this letter, may be required.
2. Unsolicited Proposals.
In the event that, after execution of this agreement
and during the Exclusivity Period, United
<PAGE> 4
United/Harvey Holdings, L.P.
Harvey Hotel Company, Ltd.
November 4, 1994
Page 4
receives an unsolicited proposal providing for a Change in
Control Transaction from any person or entity who or which was
not given an opportunity prior to the date hereof to propose a
Change in Control Transaction, which unsolicited proposal is
on financial and legal terms more favorable to United than
those in Your Proposal (an "Unsolicited Proposal"), United
will notify you in writing of each such Unsolicited Proposal.
Such notice ("Proposal Notice") will state the terms and
conditions of such Unsolicited Proposal and the identity of
the person or entity making it (together with a copy of such
Unsolicited Proposal), by 5:00 p.m. Eastern Time on the
business day next following the business day on which it
receives the Unsolicited Proposal.
If United, in the exercise of its fiduciary duties
under applicable law, selects to commence negotiations with
respect to such Unsolicited Proposal (which election shall be
made promptly after receipt of the Unsolicited Proposal, and
which election shall be communicated to you by facsimile
transmission prior to commencement of such negotiations), you
shall have the
<PAGE> 5
United/Harvey Holdings, L.P.
Harvey Hotel Company, Ltd.
November 4, 1994
Page 5
option to terminate your negotiations with United, whereupon
you shall be entitled to your expenses as provided in Section
3 hereof and your applicable termination fee as provided in
Section 4 hereof.
If you elect to terminate negotiations with us, you
shall, as soon as practicable, advise us of such decision by
delivery of a facsimile transmission.
3. Reimbursement of Expenses in Certain Circumstances.
If (i) you elect to terminate our negotiations as set
forth in Section 2 or (ii) United enters into an agreement
providing for a Change in Control Transaction with any person
other than you (or your affiliates) prior to January 31, 1995,
United agrees to reimburse you for all your reasonable,
out-of- pocket expenses incurred, from and after October 26,
1994, relating to the matters contemplated in Your Proposal,
but only as they relate to United's assets and the
documentation with United, in an amount not to exceed
$500,000. We contemplate that such expenses will include
Phase I and Phase II Environmental audits and structural
<PAGE> 6
United/Harvey Holdings, L.P.
Harvey Hotel Company, Ltd.
November 4, 1994
Page 6
engineering audits of United's assets, accounting and legal
fees relating to an analysis of the Tennessee franchise and
excise tax situation and attorneys' fees arising from the
documentation of, and other reasonable out-of-pocket expenses
relating to, any business combination relating to United only.
4. Termination Fee.
If (i) you elect to terminate our negotiations as set
forth in Section 2 or (ii) United enters into an agreement
providing for a Change in Control Transaction with any person
other than you (or your affiliates) prior to January 31, 1995,
United agrees to pay you a fee, which is in addition to
reimbursing you for expenses under Section 3 above, in the
amount of $500,000 if the Proposal Notice is delivered to you,
or such agreement is entered into, on or before November 10,
1994; in the amount of $1,000,000 if the Proposal Notice is
delivered to you, or such agreement is entered into, after
November 10 and on or before November 20, 1994; and in the
amount of $1,500,000 if the Proposal Notice is delivered to
you, or such
<PAGE> 7
United/Harvey Holdings, L.P.
Harvey Hotel Company, Ltd.
November 4, 1994
Page 7
agreement is entered into, after November 20, 1994 and during
the balance of the Exclusivity Period.
5. Indemnity.
United will, upon your request, indemnify and hold
you and your respective affiliates and representatives,
harmless for any loss, cost, damage, expense (including
reasonable attorneys' fees and charges) or liability relating
to, resulting from or arising out of any action, suit or
proceeding initiated by any shareholder, other security holder
or lender of United, any employee or former employee of United
or by any other person or entity (including any potential
bidder and any governmental authority) based upon or relating
to, in whole or in part, facts arising out of our negotiations
during the Exclusivity Period or relating to this letter
agreement.
Sincerely,
UNITED INNS, INC.
By: /s/ Don William Cockroft
President
<PAGE> 8
United/Harvey Holdings, L.P.
Harvey Hotel Company, Ltd.
November 4, 1994
Page 8
Accepted and agreed to
as of the date first
above written:
UNITED/HARVEY HOLDINGS, L.P.
By:/s/ Donald J. McNamara
Duly Authorized
HARVEY HOTEL CO., LTD.
By:/s/ J. Peter Kline
Duly Authorized
<PAGE> 1
EXHIBIT 99.(c)(4)
United Inns, Inc.
Suite 2300, Clark Tower
5100 Poplar Avenue
Memphis, TN 38137
Phone (901) 767-2880
Don Wm. Cockroft
President
CONFIDENTIALITY AGREEMENT
July 14, 1994
It is our understanding that Hampstead Investments, Inc. are interested in
evaluating a possible investment with United Inns, Inc. (the "Company"). We
are prepared to provide you with further information concerning the operations
and business of the Company. You understand that such information and any
additional materials that the Company may provide in connection with your
evaluation will contain confidential and proprietary information about the
business of the Company and/or its affiliates (any such materials or
information contained in or developed from such materials by us or by you, in
either written or verbal form shall hereinafter be collectively referred to as
the "Evaluation Materials", but such term shall not include any information
which is publicly available or is obtained by the undersigned from sources not
bound by a similar confidentiality agreement.) This letter sets forth your
agreement to maintain the confidentiality of the Evaluation Materials, and by
signing this letter and returning it to us, Hampstead Investments, Inc. agree
to be bounds by its terms.
By execution of this Agreement, you acknowledge that the Evaluation Materials
are the valuable confidential property of the Company and agree:
a. To use the Evaluation Materials solely for the purpose of
evaluating a possible investment/franchise in the Company, and
to refrain from allowing such information to be used in any
way for private use or commercial purpose by you or any other
party;
b. To take all appropriate measures to safeguard the
confidentiality of the Evaluation Materials and to discuss
them only with those employees and outside advisors or
financing sources to whom disclosure is required for your
analysis;
c. Prior to showing the Evaluation Materials to, or discussing
them with, any of the individuals described in paragraph (b)
above, to advise such individuals of the confidentiality of
the Evaluation Materials and to
<PAGE> 2
require that such individuals agree to and maintain the
confidentiality of the Evaluation Materials.
d. Upon written request from the Company, to return all of the
Evaluation Materials to the Company and to destroy all notes,
reports, analyses, compilations, abstracts, studies and other
materials prepared by or for you based upon the Evaluation
Materials, and to provide the Company with written
confirmation that all such materials have been returned or
destroyed.
e. It is also agreed that Hampstead Investments, Inc. or any
principals of this company decline to actively engage in the
purchase or sale of United Inns, Inc. publicly traded Common
Shares on the open market without prior approval from United
Inns, Inc. General Counsel.
f. Without written approval from the Company, you are not to
contact any mortgagee, note holder, bond holder, Lessor or
Hotel Franchisor of the Company.
You understand and agree that the Company might be irreparably harmed by
violation of this agreement, and that the use of the Evaluation Materials for
the business purpose of any party other than the Company (or its related
entities conducting its business) could enable such a party to compete unfairly
with the Company. In the event that you become aware of any breach of the
confidentiality of, or the misappropriation of, any of the Evaluation
Materials, you agree to promptly given notice thereof to the Company. In
addition you agree that the Company shall be entitled to injunctive relief and
to enforcement by specific performance of this agreement in addition to any
other relief to which it may be entitled at law and in equity.
You understand and agree that neither this agreement nor the disclosure to you
of the Evaluation Materials shall confer upon you any license to or any other
right, title or interest in, or ownership of, any portion of the Evaluation
Materials.
You understand and agree that your agreement to maintain the confidentiality of
the Evaluation Materials shall survive for a period of three years from the
date of this agreement.
You understand and agree that the Company and its representatives make no
representation or warranty as to the accuracy or completeness of the Evaluation
Materials and you further agree, to the extent permitted by law, that neither
the Company nor any of its representatives shall have any liability to you as a
result of our participation in the evaluation of the confidential material.
Only those particular representations or warranties which may be made in a
definite agreement when, and if executed, and subject to such limitations and
restrictions as may be specified therein, shall have any legal effect and only
the
<PAGE> 3
parties to such definitive agreement shall have any rights with respect
thereto.
This agreement shall be binding upon you, your successors and assigns and you
agree that it shall be governed by and construed in accordance with the law of
the State of Tennessee.
Sincerely,
UNITED INNS, INC. (Company)
By:/s/ Don Wm. Cockroft
Don Wm. Cockroft
Date: 7/14/94
Confirmed and Agreed to:
HAMPSTEAD INVESTMENTS, INC.
By:/s/ Donald J. McNamara
Donald J. McNamara, Chairman
Date: 8/1/94
<PAGE> 1
EXHIBIT 99.(c)(5)
UNITED/HARVEY HOLDINGS, L.P.
4200 Texas Commerce Tower West
2200 Ross Avenue
Dallas, Texas 75201
November 21, 1994
Cockroft Consolidated Corporation
5100 Poplar Avenue, Suite 2200
Memphis, Tennessee 38137
Ladies and Gentlemen:
This letter sets forth the agreement of the parties with respect to
certain matters involving the Agreement and Plan of Merger (the "Agreement")
among United/Harvey Holdings, L.P. and certain of its affiliates and United
Inns, Inc. Terms used herein with initial capital letters which are defined in
the Agreement are used herein as so defined.
1. Undertakings by Purchaser. The expiration date of the Offer will
occur in January of 1995, subject to extension only as provided in the
Agreement. The language relating to the completion of the Merger will be
revised to read as set forth on page 1 of the attached revised draft of the
Offer to Purchase.
2. Agreement To Tender. Not later than November 29, 1994, Cockroft
Consolidated Corporation ("Stockholder") will validly tender and not withdraw
all 1,209,214 shares of Company Common Stock owned by it (the "Stockholder
Shares") pursuant to and in accordance with the Offer.
3. Option. Stockholder grants to Purchaser an irrevocable option
(the "Option") to purchase all (but not less than all) the Stockholder Shares.
The price per share payable upon the exercise of the Option is the greater of
(i) the Per Share Amount (presently $25.00 per share) or (ii) the per share
amount of any competing cash offer made by another person which the Company's
Board of Directors determines it is required, in the exercise of its fiduciary
duties, to consider under Section 6.4(b) of the Agreement and which gives
Purchaser a right to terminate the Agreement under Section 8.1(e) thereof. The
Option will be exercisable upon written notice given on or after January 1,
1995 and on or prior to March 31, 1995 provided that one of the events referred
to in Paragraph (d) or (e) of Annex I to the Agreement has occurred. Upon
Purchaser's exercise of the Option, Stockholder will deliver to Purchaser,
against payment by Purchaser to Stockholder of the aggregate purchase price
therefor, certificates representing all of the Stockholder Shares, duly
endorsed for transfer to Purchaser or accompanied by duly executed stock
powers, such delivery to be made at the Company's headquarters on a date
specified by Purchaser within five business days of the date of notice.
<PAGE> 2
Cockroft Consolidated Corporation
November 21, 1994
Page 2
4. Representations and Warranties. Stockholder represents and
warrants to Purchaser that (a) this Agreement has been duly authorized,
executed and delivered by Stockholder and constitutes a legal, valid and
binding obligation of Stockholder, enforceable against Stockholder in
accordance with its terms, and (b) Stockholder has (i) good and valid title to
all of the Stockholder Shares, free and clear of all liens or other
encumbrances or adverse interests (collectively, "Encumbrances") and (ii) sole
and unrestricted voting and disposition power with respect to all of the
Stockholder Shares, subject in each case only to the rights of Purchaser
hereunder.
5. Certain Restrictions. Except as expressly provided herein, during
the period from the date hereof until the expiration of the Option, Stockholder
will not, directly or indirectly, (a) sell or transfer, offer for sale or
transfer, subject to any Encumbrance or grant any proxy (other than to
Purchaser) with respect to or otherwise limit its right to vote in any manner
any Stockholder Shares; (b) take or omit to take any action that would be
reasonably likely to (i) cause any representation or warranty of Stockholder
herein to be untrue or incorrect or (ii) prevent the performance by Stockholder
of any covenant herein; or (c) exercise any voting or consent rights with
respect to any of the Stockholder Shares in any manner inconsistent with the
intent and purposes of the Agreement or this agreement.
6. Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto will execute and
deliver such additional documents and take all such further lawful action as
may be necessary or desirable to effectuate fully the intent and purposes
hereof.
7. Miscellaneous. This agreement (a) contains the entire agreement
of the parties with respect to the subject matter hereof and supersedes all
prior agreements with respect thereto; (b) will be governed by and construed in
accordance with New York law, without regard to conflict of laws principles;
and (c) may be executed in any number of counterparts, each of which will be
deemed to be an original but all of which together will constitute but one
instrument.
Very truly yours,
UNITED/HARVEY HOLDINGS, L.P.
By: Hampstead Genpar, L.P.,
its General Partner
By: HH Genpar Partners,
its General Partner
<PAGE> 3
Cockroft Consolidated Corporation
November 21, 1994
Page 3
By: Hampstead Associates, Inc.,
its General Partner
By: /s/ Robert A. Whitman
Name: _____________________
Title: ____________________
ACCEPTED AND AGREED TO:
COCKROFT CONSOLIDATED CORPORATION
By: /s/ Don Wm. Cockroft
Name: Don Wm. Cockroft
Title: President
<PAGE> 4
To the Stockholders of United Inns, Inc.:
INTRODUCTION
THE OFFER
United/Harvey Holdings, L.P. ("Purchaser") hereby offers to purchase all of
the outstanding shares of common stock (the "Shares") of United Inns, Inc. (the
"Company") at $25.00 per Share, net to the seller in cash (the "Offer Price"),
on the terms and subject to the conditions set forth in this Offer to Purchase
and in the related Letter of Transmittal (which together constitute the
"Offer").
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement") among Purchaser, United/Harvey Hotels, Inc., a wholly owned
subsidiary of Purchaser ("United/Harvey"), United/Harvey Sub, Inc., a wholly
owned subsidiary of United/Harvey ("Merger Sub"), and the Company. The Merger
Agreement provides, among other things, for the commencement of the Offer by
Purchaser and further provides that, subject to the satisfaction or waiver of
certain conditions (including the condition that the Offer shall have been
consummated), Merger Sub will be merged with the Company (the "Merger"), with
the Company thereby becoming a direct wholly owned subsidiary of United/Harvey.
The Merger Agreement provides that each outstanding Share (other than Shares
owned by United/Harvey, the Company or any subsidiary of the Company and Shares
owned by stockholders who have properly exercised their appraisal rights under
Delaware law) will be converted at the effective time of the Merger (the
"Effective Time") into the right to receive the Offer Price in cash, without
interest and less any required withholding taxes. See Section 12 for
additional information concerning the Merger Agreement and the Merger.
As described in Section 11, the various proposals made by or on behalf of
Purchaser with respect to the acquisition of the Company contemplated that the
Company's stockholders would be given the option to receive in exchange for
Shares either cash or common stock of United/Harvey, which was formed by
Purchaser to acquire all of the outstanding equity interests in the Company and
Harvey Hotel Company, Ltd. and Harvey Hotel Management Company (collectively,
"Harvey Hotels"). See Section 12 for additional information concerning the
manner in which United/Harvey intends to acquire all of the outstanding equity
interests in the Company and Harvey Hotels.
The Merger Agreement as presently in effect provides for the conversion of
nontendered Shares into the right to receive the Offer Price in cash, as
described above. However, Purchaser expressly reserves the right following the
consummation of the Offer to cause the Merger Agreement to be amended to
provide nontendering stockholders the option (the "Cash/Stock Option") to elect
to receive in exchange for each Share converted in the Merger either (i) cash
in an amount at least equal to the Offer Price or (ii) common stock of
United/Harvey ("United/Harvey Shares"). Whether or not Purchaser makes the
Cash/Stock Option available to nontendering stockholders will depend upon a
number of factors, including the number of Shares outstanding and owned by
persons other than Purchaser following the consummation of the Offer, and will
be subject to compliance with applicable legal requirements, including the
Securities Act of 1933, as amended (the "Securities Act"), and applicable state
securities laws. Accordingly, there can be no assurance as to whether the
Cash/Stock Option will be made available to nontendering stockholders or, if
so, as to the timing thereof. See Section 12 for additional information
concerning the Cash/Stock Option. Regardless of whether the Cash/Stock Option
is made available, Purchaser will, either pursuant to the Merger Agreement as
presently in effect or otherwise, subject to conditions no more favorable to
Purchaser than those contained in the Merger Agreement as presently in effect,
provide nontendering stockholders an opportunity following the consummation of
the Offer to receive cash in an amount at least equal to the Offer Price in
exchange for each Share not tendered pursuant to the Offer.
It is contemplated that, upon the purchase of Shares by Purchaser pursuant
to the Offer, the Company's Board of Directors will be reconstituted in its
entirety to consist solely of Purchaser's designees. Any action of the
Company's Board of Directors following the consummation of the Offer with
respect to any amendment to the Merger Agreement to provide for the Cash/Stock
Option will constitute an action of the Company's Board
<PAGE> 1
EXHIBIT 99.(g)(1)
POWER OF ATTORNEY
UNITED/HARVEY HOLDINGS, L.P. (the "Partnership") hereby constitutes
and appoints Wendy Dann Adato, Mark E. Betzen, Virginia Bugh, Joan M. Hyde,
Troy B. Lewis, Robert A. Profusek and Candace A. Ridgway, and each of them, as
the Partnership's true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, to sign on the Partnership's behalf any and
all Tender Offer Statements on Schedule 14D-1, and any or all amendments
thereto, relating to the Common Stock, par value $1.00 per share, of United
Inns, Inc., and to file the same, with all exhibits thereto, and all other
documents required in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact or agents and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, hereby ratifying
and confirming all that said attorneys-in-fact or agents, or any of them or
their substitutes, may lawfully do or cause to be done by virtue hereof.
UNITED/HARVEY HOLDINGS, L.P.
By: Hampstead Genpar, L.P.,
its General Partner
By: HH Genpar Partners, its
General Partner
By: Hampstead Associates, Inc.,
its General Partner
By: /s/ Daniel A. Decker
Name: Daniel A. Decker
Title: Executive Vice President
Dated: November 21, 1994
<PAGE> 2
POWER OF ATTORNEY
HAMPSTEAD GENPAR, L.P. (the "Partnership") hereby constitutes and
appoints Wendy Dann Adato, Mark E. Betzen, Virginia Bugh, Joan M. Hyde, Troy B.
Lewis, Robert A. Profusek and Candace A. Ridgway, and each of them, as the
Partnership's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, to sign on the Partnership's behalf any and
all Tender Offer Statements on Schedule 14D-1, and any or all amendments
thereto, relating to the Common Stock, par value $1.00 per share, of United
Inns, Inc., and to file the same, with all exhibits thereto, and all other
documents required in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact or agents and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, hereby ratifying
and confirming all that said attorneys-in-fact or agents, or any of them or
their substitutes, may lawfully do or cause to be done by virtue hereof.
HAMPSTEAD GENPAR, L.P.
By: HH Genpar Partners, its
General Partner
By: Hampstead Associates, Inc.,
its General Partner
By: /s/Daniel A. Decker
Name: Daniel A. Decker
Title: Executive Vice President
Dated: November 21, 1994
<PAGE> 3
POWER OF ATTORNEY
HH GENPAR PARTNERS (the "Partnership") hereby constitutes and appoints
Wendy Dann Adato, Mark E. Betzen, Virginia Bugh, Joan M. Hyde, Troy B. Lewis,
Robert A. Profusek and Candace A. Ridgway, and each of them, as the
Partnership's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, to sign on the Partnership's behalf any and
all Tender Offer Statements on Schedule 14D-1, and any or all amendments
thereto, relating to the Common Stock, par value $1.00 per share, of United
Inns, Inc., and to file the same, with all exhibits thereto, and all other
documents required in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact or agents and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, hereby ratifying
and confirming all that said attorneys-in-fact or agents, or any of them or
their substitutes, may lawfully do or cause to be done by virtue hereof.
HH GENPAR PARTNERS
By: Hampstead Associates, Inc.,
its General Partner
By: /s/Daniel A. Decker
Name: Daniel A. Decker
Title: Executive Vice President
Dated: November 21, 1994
<PAGE> 4
POWER OF ATTORNEY
HAMPSTEAD ASSOCIATES, INC. (the "Company") hereby constitutes and
appoints Wendy Dann Adato, Mark E. Betzen, Virginia Bugh, Joan M. Hyde, Troy B.
Lewis, Robert A. Profusek and Candace A. Ridgway, and each of them, as the
Company's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, to sign on the Company's behalf any and all
Tender Offer Statements on Schedule 14D-1, and any or all amendments thereto,
relating to the Common Stock, par value $1.00 per share, of United Inns, Inc.,
and to file the same, with all exhibits thereto, and all other documents
required in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact or agents and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, hereby ratifying and confirming
all that said attorneys- in-fact or agents, or any of them or their
substitutes, may lawfully do or cause to be done by virtue hereof.
HAMPSTEAD ASSOCIATES, INC.
By: /s/Daniel A. Decker
Name: Daniel A. Decker
Title: Executive Vice President
Dated: November 21, 1994
<PAGE> 5
POWER OF ATTORNEY
RAW GENPAR, INC., (the "Company") hereby constitutes and appoints
Wendy Dann Adato, Mark E. Betzen, Virginia Bugh, Joan M. Hyde, Troy B. Lewis,
Robert A. Profusek and Candace A. Ridgway, and each of them, as the Company's
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to sign on the Company's behalf any and all Tender Offer
Statements on Schedule 14D-1, and any or all amendments thereto, relating to
the Common Stock, par value $1.00 per share, of United Inns, Inc., and to file
the same, with all exhibits thereto, and all other documents required in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys- in-fact or agents and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, hereby ratifying and confirming
all that said attorneys-in-fact or agents, or any of them or their substitutes,
may lawfully do or cause to be done by virtue hereof.
RAW GENPAR, INC.
By: /s/Daniel A. Decker
Name: Daniel A. Decker
Title: President
Dated: November 21, 1994
<PAGE> 6
POWER OF ATTORNEY
INCAP, INC., (the "Company") hereby constitutes and appoints Wendy
Dann Adato, Mark E. Betzen, Virginia Bugh, Joan M. Hyde, Troy B. Lewis, Robert
A. Profusek and Candace A. Ridgway, and each of them, as the Company's true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to sign on the Company's behalf any and all Tender Offer
Statements on Schedule 14D-1, and any or all amendments thereto, relating to
the Common Stock, par value $1.00 per share, of United Inns, Inc., and to file
the same, with all exhibits thereto, and all other documents required in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys- in-fact or agents and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, hereby ratifying and confirming
all that said attorneys-in-fact or agents, or any of them or their substitutes,
may lawfully do or cause to be done by virtue hereof.
INCAP, INC.
By: /s/Daniel A. Decker
Name: Daniel A. Decker
Title: President
Dated: November 21, 1994
