UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 5, 1998
CAPSTAR HOTEL COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 1-12017 52-1979383
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
1010 Wisconsin Avenue, N.W., Suite 650, Washington, D.C. 20007
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (202) 965-4455
Not applicable
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
CapStar Hotel Company ("CapStar") is filing this Current Report on Form
8-K in connection with Amendment No. 1 to the Agreement and Plan of Merger,
dated June 5, 1998, among CapStar, CapStar Management Company, L.P. and CapStar
Management Company II, L.P., on the one hand, and American General Hospitality
Corporation and American General Hospitality Operating Partnership, L.P., on the
other hand.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit No. Description of Exhibit
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2.1 Amendment No. 1 to the Agreement and Plan of Merger,
dated June 5, 1998, among CapStar, CapStar Management
Company, L.P. and CapStar Management Company II,
L.P., on the one hand, and American General Hospitality
Corporation and American General Hospitality Operating
Partnership, L.P., on the other hand.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CAPSTAR HOTEL COMPANY
Date: June 10, 1998
By: /s/ John Emery
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John Emery
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
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2.1 Amendment No. 1 to the Agreement and Plan of Merger,
dated June 5, 1998, among CapStar, CapStar Management
Company, L.P. and CapStar Management Company II, L.P.,
on the one hand, and American General Hospitality
Corporation and American General Hospitality Operating
Partnership, L.P., on the other hand.
AMENDMENT NO. 1
TO AGREEMENT AND PLAN OF MERGER
This Amendment No. 1 to Agreement and Plan of Merger (this
"Amendment"), dated as of June 5, 1998, by and among American General
Hospitality Corporation, a Maryland corporation ("AGH"), American General
Hospitality Operating Partnership, L.P., a Delaware limited partnership ("AGH
OP" and together with AGH, the "AGH Parties"), on the one hand, and the CapStar
Hotel Company, a Delaware corporation ("CapStar"), CapStar Management Company,
L.P., a Delaware limited partnership ("CapStar Management I"), and CapStar
Management Company II, L.P., a Delaware limited partnership ("CapStar Management
II" and together with CapStar Management I, the "CapStar Partners"). (The
CapStar Partners and CapStar sometimes collectively referred to herein as the
"CapStar Parties").
RECITALS:
The AGH Parties and CapStar Parties are parties to the Agreement and
Plan of Merger, dated as of March 15, 1998 (the "Merger Agreement"). The parties
now desire to amend certain provisions of the Merger Agreement as provided
hereby.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree to amend certain provisions of the Merger
Agreement as follows:
1. Recital D of the Merger Agreement is hereby amended and restated in
its entirety to read as follows:
"D. In connection with the Merger, the following additional
transactions will be effected (the Merger, together with the
other documents, agreements and transactions, including
without limitation, the Spin-Off Transaction and the OP
Reorganization (as defined below), contemplated by this
Agreement, being referred to collectively herein as the
"TRANSACTIONS"): (i) pursuant to a series of merger,
contribution and redemption transactions as more fully set
forth in Sections 7.17 and 7.18, CapStar Management LLC and
CapStar Management II LLC (as defined herein) will each
contribute or transfer all of their management agreements and
substantially all of their leasehold interests to a newly
formed Delaware limited partnership ("CAPSTAR MANAGEMENT OP"
and "CAPSTAR MANAGEMENT II OP"), the general partner of which
will be a newly formed Delaware corporation and a wholly-owned
subsidiary of CapStar ("OPCO"), and, immediately prior to the
Merger, CapStar will distribute the stock of OPCO to CapStar's
stockholders (the "SPIN-OFF TRANSACTION"); (ii) pursuant to a
series of merger, contribution and
<PAGE>
redemption transactions as more fully set forth in Sections
7.17 and 7.18, CapStar Management LLC and CapStar Management
II LLC will each contribute or transfer all their hotel assets
to a newly formed Delaware limited liability company (the
"CAPSTAR HOTEL LLC" and "CAPSTAR HOTEL II LLC") and,
concurrent with the Merger, the CapStar Parties and the AGH
Parties will effect a business combination of the CapStar
Hotel LLC and CapStar Hotel II LLC with the AGH OP as
contemplated by Section 3.1, with the AGH OP as the survivor
(the "OP REORGANIZATION"); and (iii) the AGH Parties will
enter into an Exchange Rights Agreement in substantially the
form attached hereto as Exhibit B (the "EXCHANGE RIGHTS
AGREEMENT"), with certain holders (the "CAPSTAR MEMBERS" or
"CAPSTAR LPS") of limited liability company membership
interests in CapStar Hotel LLC and CapStar Hotel II LLC (prior
to giving effect to the OP Reorganization)."
2. Section 3.1 of the Merger Agreement is hereby amended and restated
in its entirety to read as follows:
"3.1 OP BUSINESS COMBINATION.
(a) Immediately prior to the Effective Time,
AGH shall cause AGH GP (as defined herein), AGH's Subsidiary
that acts as general partner of the AGH OP, to merge with and
into AGH. Immediately following the Effective Time, the
Surviving Corporation shall, consistent with the AGH Operating
Partnership Agreement (as defined herein), contribute all of
its assets (other than AGH OP Units) (as such term is defined
herein) to the AGH OP and the Surviving Corporation shall
expressly assume all obligations of the General Partner
thereunder (the "SURVIVING CORPORATION CONTRIBUTION AND
ASSUMPTION").
(b) Immediately following the Surviving
Corporation Contribution and Assumption, the Surviving
Corporation shall cause CapStar Hotel LLC and CapStar Hotel II
LLC to merge (the "OP MERGER") with and into the AGH OP in
accordance with the Delaware Revised Uniform Limited
Partnership Act ("DRULPA") and the Delaware Limited Liability
Act (the "LLC ACT"), with the AGH OP as the surviving entity
(the "OP BUSINESS COMBINATION"). At the Effective Time, the
Surviving Corporation shall cause CapStar Hotel LLC and
CapStar Hotel II LLC to execute the Agreement and Plan of
Merger and Certificate of Merger (the "OP MERGER ARTICLES") in
the form attached hereto as Exhibit D, which certificate shall
then be executed by the AGH OP and filed with the Secretary of
State of the State of Delaware. The effects of the OP Merger
Articles are set forth in the OP Merger Articles, the DRULPA
and the LLC Act. The OP Business Combination shall have, to
the extent applicable, the same economic and tax consequences
for the members of CapStar Hotel LLC and CapStar Hotel II LLC
and the limited partners of AGH OP as the Merger has for
holders of CapStar
<PAGE>
Common Stock and the AGH Common Stock, respectively; provided,
however, that the holders of preferred units of limited
partnership interest in the AGH OP and the holders of CapStar
Preferred OP Units (as defined herein) which will be converted
into preferred membership limited liability company units in
CapStar Hotel LLC and CapStar Hotel II LLC, if applicable,
will be provided with substantially the same rights,
privileges, and preferences that such holders currently have
in effect.
(c) Concurrently with the issuance
contemplated by Section 2.2(b), the Surviving Corporation
shall (i) cause to be issued to the CapStar Members, units of
limited partnership in the AGH OP issuable upon consummation
of the OP Business Combination and (ii) enter into, and cause
the AGH OP to enter into, an Exchange Rights Agreement with
each CapStar LLC."
3. Section 7.17 of the Merger Agreement is hereby amended and restated
in its entirety to read as follows:
"7.17 PRE-MERGER TRANSACTIONS. Prior to the Effective Time,
the CapStar Parties shall effectuate the following
transactions as part of the OP Reorganization:
(a) CapStar General Corp., the general
partner of CapStar Management II, will merge
with and into CapStar, CapStar Limited
Corp., the limited partner of CapStar
Management II, will merge with and into
CapStar, CapStar LP Corporation, a limited
partner of CapStar Management I, will merge
with and into CapStar; CapStar Limited I
Corp., a limited partner of CapStar
Management I, will merge with and into
CapStar; CapStar Limited II Corp., a limited
partner of CapStar Management I, will merge
with and into CapStar; CapStar Limited III
Corp., a limited partner of CapStar
Management I, will merge with and into
CapStar; CapStar Limited IV Corp., a limited
partner of CapStar Management I, will merge
with and into CapStar; CapStar Limited V
Corp., a limited partner of CapStar
Management I, will merge with and into
CapStar; CapStar Limited VI Corp., a limited
partner of CapStar Management I, will merge
with and into CapStar; and CapStar Limited
VII Corp., a limited partner of CapStar
Management I, will merger with and into
CapStar;
(b) CapStar Management I and CapStar
Management II will each convert into a
limited liability company, CapStar
Management Company, L.L.C. ("CAPSTAR
MANAGEMENT LLC") and CapStar Management
Company II, L.L.C. ("CAPSTAR MANAGEMENT II
LLC"), respectively, and each
<PAGE>
limited liability company will have CapStar
and the CapStar Members as its members;
(c) CapStar Management LLC will contribute
all of its hotel related assets as set forth
on Schedule 7.17(c) to the CapStar
Disclosure Letter, together will all its
other assets (except those set forth on
Schedule 7.17(d) to the CapStar Disclosure
Letter), subject to all of its liabilities
except for such liabilities set forth on
Schedule 7.17(d), to CapStar Hotel LLC in
exchange for interests in CapStar Hotel LLC;
(d) CapStar Management II LLC will
contribute all of its hotel related assets
as set forth on Schedule 7.17(c) to the
CapStar Disclosure Letter, together will all
its other assets (except those set forth on
Schedule 7.17(d) to the CapStar Disclosure
Letter), subject to all of its liabilities
except for such liabilities set forth on
Schedule 7.17(d), to CapStar Hotel II LLC in
exchange for interests in CapStar Hotel II
LLC;
(e) CapStar Management LLC will contribute
all of its management and substantially all
of its leasehold related assets (inclusive
of certain leases, interests in joint
ventures and certain notes, each as set
forth on Schedule 7.17(d) to the CapStar
Disclosure Letter), subject to $30 million
in indebtedness and such other liabilities
as set forth on Schedule 7.17(d) to the
CapStar Disclosure Letter, to CapStar
Management OP in exchange for interests in
CapStar Management OP;
(f) CapStar Management II LLC will
contribute all its management and
substantially all of its leasehold related
assets (inclusive of certain leases,
interests in joint ventures and certain
notes, each as set forth on Schedule 7.17(d)
to the CapStar Disclosure Letter), subject
to $30 million in indebtedness and such
other liabilities as set forth on Schedule
7.17(d) to the CapStar Disclosure Letter, to
CapStar Management II OP in exchange for
interests in CapStar Management II OP;
(g) CapStar Management LLC will redeem
CapStar's interests in CapStar Management
LLC in exchange for CapStar's pro rata share
of its interests in CapStar Management OP
and CapStar Hotel LLC;
(h) CapStar Management II LLC will redeem
CapStar's interests in CapStar Management II
LLC in exchange for CapStar's pro rata share
of its interests in CapStar Management II OP
and CapStar Hotel II LLC;
<PAGE>
(i) CapStar will contribute its interests in
CapStar Management OP and CapStar Management
II OP to OPCO in exchange for 100% of the
outstanding capital stock of OPCO; and
(j) CapStar will distribute 100% of the OPCO
stock to CapStar's stockholders in
connection with the Spin-Off Transaction.
4. Section 7.18 of the Merger Agreement is hereby amended and restated
in its entirety to read as follows:
"7.18 SPIN-OFF TRANSACTION. Immediately prior to the Effective
Time, CapStar will effectuate the Spin-Off Transaction as
follows:
(a) CapStar Management II LLC will merge
with and into CapStar Management LLC, with
CapStar Management LLC being the surviving
entity ("CAPSTAR MANAGEMENT LLC");
(b) CapStar Management II OP will merge with
and into CapStar Management OP, which will
be the surviving entity and will have OPCO
as its general partner and CapStar
Management LLC as its limited partner;
(c) CapStar Hotel LLC and CapStar Hotel II
LLC will merge with and into AGH OP;
(d) Pursuant to the transactions as set
forth in Section 7.17(d), all of the assets
set forth on Schedule 7.17(d) to the CapStar
Disclosure Letter, subject to $30.0 million
in indebtedness and such other liabilities
as set forth on such schedule, will be held
by CapStar Management OP, a Subsidiary of
OPCO;
(e) CapStar will distribute pro rata to its
stockholders, as a distribution taxable
under Section 301 or 356 of the Code, all of
the issued and outstanding shares of common
stock of OPCO (the "OPCO STOCK");
(f) CapStar will cause the OPCO Stock to be
listed or quoted on either the NYSE, the
American Stock Exchange or the Nasdaq
National Market (as applicable), subject to
official notification of issuance;
(g) OPCO and CapStar will enter into a
Contribution, Assumption and Indemnity
Agreement in the form attached hereto as
Exhibit F in connection with the Spin-Off
Transaction;
<PAGE>
(h) CapStar will cause OPCO to tender
employment agreements, make offers of
employment and grant restricted stock and
stock options to certain existing employees
of CapStar and AGH as set forth on Schedule
7.6 to the CapStar Disclosure Letter;
(i) CapStar will cause OPCO to enter into
the Intercompany Agreement in the form
attached hereto as Exhibit G (the
"INTERCOMPANY AGREEMENT") with the Surviving
Corporation;
(j) CapStar will cause the persons set forth
on Schedule 7.18(g)(i) of the CapStar
Disclosure Letter to be elected to the Board
of Directors of OPCO and the persons set
forth on Schedule 7.18(g)(ii) of the CapStar
Disclosure Letter to be elected as officers
of OPCO to hold such positions set forth
beside their respective names; and
(k) CapStar shall cause the organizational
documents of OPCO and its Subsidiaries to be
submitted to AGH for its review, comment and
approval, which approval shall not be
unreasonably withheld, prior to such
documents being adopted by OPCO."
5. Section 8.1 clause (n) of the Merger Agreement is hereby amended and
restated in its entirety to read as follows:
"(n) CREDIT FACILITY. The AGH Parties shall have obtained a $1
billion dollar revolving and term loan credit facility."
6. Section 8.3 clause (h) of the Merger Agreement is hereby amended and
restated in its entirety to read as follows:
"(h) NET WORTH CERTIFICATE. KPMG Peat Marwick LLP will include in
its "cold comfort" letter as provided in section 8.3(b) herein,
"cold comfort," pursuant to specific procedures which are customary
in scope and substance for "cold comfort" letters, to the effect
that the pro forma balance sheet of OPCO as of March 31, 1998
reflects that OPCO's owners'/stockholders' equity does not exceed
$75 million (after taking into account the transactions contemplated
by this Agreement).
7. Exhibit D to the Merger Agreement is hereby amended and restated in
its entirety to read as set forth in Exhibit D to this Amendment.
8. Exhibit G to the Merger Agreement is hereby amended and restated in
its entirety to read as set forth in Exhibit G to this Amendment.
<PAGE>
9. The Agreement is hereby amended to provide that (a) all references
to "CapStar Hotel OP" shall be changed to "CapStar Hotel LLCs", (b) all
references to "CapStar LPs" shall be changed to "CapStar Members".
10. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
11. Except as hereby modified, the Merger Agreement is hereby ratified
and affirmed in its entirety.
<PAGE>
IN WITNESS WHEREOF, the AGH Parties and the CapStar Parties have caused
this Amendment to be signed by the respective officers thereunto duly authorized
all as of the date first written above.
ATTEST: AMERICAN GENERAL HOSPITALITY
CORPORATION, a Maryland corporation
By: /s/ Bruce G. Wiles By: /s/ Steven D. Jorns
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Assistant Secretary Name: Steven D. Jorns
Title: Chairman,Chief Executive
Officer and President
AMERICAN GENERAL HOSPITALITY
OPERATING PARTNERSHIP, L.P.,
By: AGH GP, Inc., its general partner
By: /s/ Bruce G. Wiles By: /s/ Steven D. Jorns
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Assistant Secretary Name: Steven D. Jorns
Title: Chairman,Chief Executive
Officer and President
ATTEST: CAPSTAR HOTEL COMPANY,
a Delaware corporation
By: /s/ William H. Diamond By: /s/ Paul W. Whetsell
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Assistant Secretary Name: Paul W. Whetsell
Title: Chief Executive Officer and
President
CAPSTAR MANAGEMENT COMPANY,
L.P.,
By: CapStar Hotel Company, its general
partner
By: /s/ William H. Diamond By: /s/ Paul W. Whetsell
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Assistant Secretary Name: Paul W. Whetsell
Title: Chief Executive Officer and
President
CAPSTAR MANAGEMENT COMPANY
II, L.P.
By: CapStar General Corp., its general
partner
By: /s/ William H. Diamond By: /s/ Paul W. Whetsell
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Assistant Secretary Name: Paul W. Whetsell
Title: Chief Executive Officer and
President
<PAGE>
Exhibit D
FORM OF
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of ________, 1998 (this "Agreement"),
among CAPSTAR HOTEL OPERATING COMPANY, L.L.C., a Delaware limited liability
company (the "CapStar Hotel LLC"), CAPSTAR HOTEL OPERATING COMPANY II, L.L.C., a
Delaware limited liability company (the
"CapStar Hotel II LLC"; and together with the CapStar Hotel LLC, the "CapStar
Hotel LLCs"), and AMERICAN GENERAL HOSPITALITY OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership (the "Operating Partnership").
WITNESSETH:
WHEREAS, the Operating Partnership desires to acquire the properties
and other assets, and to assume all of the liabilities and obligations, of the
CapStar Hotel LLCs by means of a merger of the CapStar Hotel LLCs with and into
the Operating Partnership;
WHEREAS, Section 17-211 of the Delaware Revised Uniform Limited
Partnership Act, 6 Del.C. ss.17-101, et seq. (the "Delaware RULPA"), and Section
18-209 of the Delaware Limited Liability Act, 6 Del.C. ss. 18-101, et seq. (the
"LLC Act"), authorizes the merger of a Delaware limited liability company with
and into a Delaware limited partnership;
WHEREAS, the CapStar Hotel LLCs and the Operating Partnership now
desire to merge (the "Merger"), following which the Operating Partnership shall
be the surviving limited entity;
WHEREAS, AGH GP, Inc., in its capacity as the general partner of the
Operating Partnership, and any successor thereto of such general partner
interest (the "Operating Partnership GP"), and the requisite number of the
limited partners of the Operating Partnership, have approved this Agreement and
the consummation of the Merger;
NOW THEREFORE, the parties hereto, intending to he legally bound,
hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01 The Merger.
(a) On the date hereof, the Operating Partnership, which shall be the
surviving limited partnership, shall merge with the CapStar Hotel LLCs and shall
file a certificate of merger substantially in the form of Exhibit 1 hereto (the
"Certificate of Merger") with the Secretary of State of the State of Delaware
and make all other filings or recordings required by Delaware law in connection
with the Merger. The Merger shall become effective at such time as is specified
in the Certificate of Merger (the "Effective Time").
<PAGE>
(b) At the Effective Time, the CapStar Hotel LLCs shall be merged with
and into the Operating Partnership, whereupon the separate existence of the
CapStar Hotel LLCs shall cease, and the Operating Partnership shall be the
surviving limited partnership of the Merger (the "Surviving Partnership") in
accordance with Section 17-211 of the Delaware RULPA and Section 18-209 of the
LLC Act.
SECTION 1.02 Exchange of Interests. At the Effective Time:
(a) Each common unit of limited liability company interest in the
CapStar Hotel LLCs held by the members in the CapStar Hotel LLCs shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into and become 1.0 Class B unit of limited partner interest in the
Surviving Partnership;
(b) Each preferred unit of limited liability company interest in the
CapStar Hotel LLCs shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into and become 1.0 Class D unit of
limited partner interest in the Surviving Partnership, with the rights,
privileges and preferences set forth on Exhibit 2 hereof (the "Class D
Certificate of Designation");
(c) Each unit of limited partner interest in the Operating Partnership
outstanding immediately prior to the Effective Time that is classified as a
general partner unit shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted into and become .8475 units of
general partner interest in the Surviving Partnership;
(d) Each unit of limited partner interest in the Operating Partnership
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and become .8475 units of limited partner interest in
the Surviving Partnership;
(e) Each Class B unit of limited partner interest in the Operating
Partnership shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into and become .8475 Class B units of limited
partner interest in the Surviving Partnership; and
(f) Each Class C unit of limited partner interest in the Operating
Partnership shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into and become .8475 Class C units of limited
partner interest in the Surviving Partnership.
ARTICLE II
THE SURVIVING PARTNERSHIP
SECTION 2.01 Partnership Agreement. (a) The partnership agreement of
the Operating Partnership in effect at the Effective Time and as amended at the
Effective Time to include the Class D Certificate of Designation shall be the
partnership agreement of the Surviving Partnership unless and until amended in
accordance with its terms and applicable law. The name of the Surviving
Partnership shall be "MeriStar Hospitality Operating Partnership."
<PAGE>
(b) Without the need for any further action or consent of any person or
entity, at the Effective Time, each member of the CapStar Hotel LLCs shall be
deemed admitted to the Surviving Partnership as a limited partner of the
Surviving Partnership.
ARTICLE III
TRANSFER AND CONVEYANCE OF ASSETS
AND ASSUMPTION OF LIABILITIES
SECTION 3.01 Transfer, Conveyance and Assumption. At the Effective
Time, the Operating Partnership shall continue in existence as the Surviving
Partnership, and without further transfer, succeed to and possess all of the
rights, privileges and powers of the CapStar Hotel LLCs, and all of the assets
and property of whatever kind and character of the CapStar Hotel LLCs shall vest
in the Operating Partnership without further act or deed; thereafter, the
Operating Partnership, as the Surviving Partnership, shall be liable for all of
the liabilities and obligations of the CapStar Hotel LLCs, and any claim or
judgment against the CapStar Hotel LLCs may be enforced against the Operating
Partnership, as the Surviving Partnership, in accordance with Section 17-211 of
the Delaware RULPA and Section 18-209 of the LLC Act.
SECTION 3.02 Further Assurances. If at any time the Operating
Partnership shall consider or be advised that any further assignment, conveyance
or assurance is necessary or advisable to vest, perfect or confirm of record in
the Operating Partnership the title to any property, or right of the CapStar
Hotel LLCs, or otherwise to carry out the provisions hereof, the proper
representatives of the CapStar Hotel LLCs as of the Effective Time shall execute
and deliver any and all proper deeds, assignments, and assurances and do all
things necessary or proper to vest, perfect or convey title to such property, or
right in the Surviving Partnership, and otherwise to carry out the provisions
hereof.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01 General Partner Authorization. The general partner of the
Surviving Partnership shall be authorized, at such time in its sole discretion
as it deems appropriate to execute, acknowledge, verify, deliver, file and
record, for and in the name of the Operating Partnership and, to the extent
necessary, the Operating Partnership GP, the limited partners of the Operating
Partnership, and the members of the CapStar Hotel LLCs, any and all documents
and instruments including, without limitation, the partnership agreement of the
Surviving Partnership and the Certificate of Merger, and shall do and perform
any and all acts required by applicable law which the general partner of the
Surviving Partnership deems necessary or advisable, in order to effectuate the
Merger.
SECTION 4.02 No Waivers. No failure or delay by any party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
<PAGE>
SECTION 4.03 Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware, without
giving effect to principles of conflicts of law.
SECTION 4.04 Counterparts, Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
the counterpart hereof signed by the other party hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized representatives as of the day and
year first above written.
Attest: AMERICAN GENERAL HOSPITALITY
OPERATING PARTNERSHIP, L.P.
By: American General Hospitality
Corporation, as General Partner
By: ______________________________,
Secretary
Name:
Title:
Attest: CAPSTAR HOTEL OPERATING
COMPANY, L.L.C.
By: ______________________________,
as Member
By: ______________________________
Name:
Title:
Attest: CAPSTAR HOTEL OPERATING
COMPANY II, L.L.C.
By: ______________________________,
as Member
By: ______________________________
Name:
Title:
<PAGE>
Exhibit 1
CERTIFICATE OF MERGER
OF
CAPSTAR HOTEL OPERATING COMPANY, L.L.C.
AND
CAPSTAR HOTEL OPERATING COMPANY II, L.L.C.
INTO
MERISTAR HOSPITALITY
OPERATING PARTNERSHIP, L.P.
DATED: _______________, 1998
The undersigned limited partnership formed and existing under and by
virtue of the Delaware Revised Uniform Limited Partnership Act, 6 Del. C.
ss.17-101, et seq. (the "Act"),
DOES HEREBY CERTIFY:
FIRST: The name and jurisdiction of formation or organization of each
of the constituent entities which is to merge are as follows:
Jurisdiction of
Name Formation or Organization
---- -------------------------
CapStar Hotel Operating Company, L.L.C. Delaware
CapStar Hotel Operating Company II, L.L.C. Delaware
MeriStar Hospitality
Operating Partnership, L.P. Delaware
SECOND: An Agreement and Plan of Merger has been approved and executed
in accordance with Section 17-211 of the Act and Section 18-209 of the Delaware
Limited Liability Company Act by (i) CapStar Hotel Operating Company, L.L.C.
("CapStar Hotel LLC"), (ii) CapStar Hotel Operating Company II, L.L.C. ("CapStar
Hotel II, LLC," and together with CapStar Hotel LLC, the "CapStar Parties") and
(iii) MeriStar Hospitality Operating Partnership, L.P. ("MeriStar OP").
THIRD: The name of the surviving Delaware limited partnership is
"MeriStar Hospitality Operating Partnership, L.P."
FOURTH: The merger of the CapStar Parties into MeriStar OP shall be
effective upon the filing of this Certificate of Merger with the Secretary of
State of the State of Delaware.
FIFTH: The executed Agreement and Plan of Merger is on file at the
principal place of business of the surviving limited partnership. The address of
the
<PAGE>
principal place of business of the surviving limited partnership is 1010
Wisconsin Avenue, NW, Washington, D.C. 20007.
SIXTH: A copy of the Agreement and Plan of Merger will be furnished by
the surviving limited partnership, on request and without cost, to any member of
the CapStar Parties and to any partner of MeriStar OP.
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.
By: MeriStar Hospitality Corporation,
as General Partner
By:
Name:
Title:
<PAGE>
Exhibit G
FORM OF INTERCOMPANY AGREEMENT
THIS INTERCOMPANY AGREEMENT (the "Agreement") is made and entered into
as of _________, 1998, among MeriStar Hospitality Corporation, a Maryland
corporation ("MSH"), MeriStar Hospitality Operating Partnership, L.P., a
Delaware limited partnership ("MSH OP" and together with MSH, the "MSH
Parties"), CMC Operating Company, a Delaware corporation ("OPCO") and CMC
Operating Partnership, L.P., a Delaware limited partnership ("OPCO OP" and
together with OPCO, the "OPCO Parties").
WITNESSETH:
WHEREAS, MSH owns, directly or indirectly, a 1% general partnership
interest and an approximately __% limited partnership interest, in MSH OP;
WHEREAS, OPCO owns, directly or indirectly, a __ % general partnership
interest and an approximately __ % limited partnership interest, in OPCO OP;
WHEREAS, the MSH Parties may in certain circumstances determine that
they are precluded from pursuing, or are limited in the manner in which they
pursue, various business opportunities due to the status of MSH as a real estate
investment trust ("REIT") under Sections 856 through 860 of the Internal Revenue
Code of 1986, as amended (the "Code");
WHEREAS, OPCO is a newly created corporation that was formed for the
purposes of, among other things, becoming a lessee and operator of various types
of assets, including hotel properties owned by the MSH OP and its subsidiaries
and others; and
WHEREAS, in light of the purposes for which OPCO was formed, the MSH
Parties and the OPCO Parties desire to enter into this Agreement in order (a) to
provide to each other a right of first opportunity with respect to certain
investment opportunities available to each of them, (b) for the OPCO Parties to
provide certain corporate and other general services to the MSH Parties, and (c)
to set forth certain terms regarding cooperation and coordination between the
MSH Parties and the OPCO Parties.
NOW, THEREFORE, in consideration of the premises and mutual
undertakings herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by each of the parties hereto,
the undersigned parties hereby agree as follows:
1. Definitions. Except as may be otherwise herein expressly provided,
the following terms and phrases shall have the meanings set forth below:
(a) "Change in Control" shall mean a change in ownership or
control of a party effected through either of the following transactions:
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(i) any person or related group of persons (other
than such party or a Controlled Affiliate of such party) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of securities possessing more than
fifty percent (50%) of the total combined voting power of such party's
outstanding securities; or
(ii) there is a change in the composition of such
party's Board of Directors over a period of thirty-six (36) consecutive months
(or less) such that a majority of Board members (rounded up to the nearest whole
number) ceases, by reason of one or more proxy contests for the election of
Board members, to be comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B) have been elected
or nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still in office
at the time such election or nomination was approved by the Board.
(b) "Company Affiliate" means any entity in which a majority
of the beneficial ownership interests are owned by MSH OP or by any entity
controlled by, controlling or under common control with MSH OP.
(c) "Controlled Affiliate" shall mean, with respect to any
party, any entity controlled by, controlling or under common control with such
party.
(d) "Governmental Authority" means any federal, state, local,
foreign or international court, government, department, commission, board,
bureau, agency, official or other regulatory, administrative or governmental
authority.
(e) "Information" means information, whether or not patentable
or copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product), and other technical, financial,
employee or business information or data.
(f) "Merger" means the merger of CapStar Hotel Company
("CapStar") with and into MSH pursuant to the Agreement and Plan of Merger among
CapStar, MSH, the MSH OP and the other parties specified therein, dated March
15, 1998.
(g) "Registration Statement" means any registration statement
filed under the Securities Act that covers a Securities Issuance, including the
related prospectus, all amendments and supplements to such registration
statement (including post-effective amendments), all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
(h) "REIT Opportunity" means a direct or indirect opportunity
to invest in (i) real estate or hotel properties, real estate mortgages, real
estate derivatives, or entities that invest primarily in or have a substantial
portion of their assets in the
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aforementioned types of real estate assets, or (ii) any other investments which
may be structured in a manner so as to be REIT-Qualified Investments (as
hereinafter defined), as determined by the MSH Parties in their sole discretion.
The MSH Parties shall have the right from time to time to provide written notice
to the OPCO Parties specifying certain criteria for a REIT Opportunity in
addition to the criteria specified above in this definition of REIT Opportunity.
Any such written notice from the MSH Parties may be modified or canceled by
written notice given by the MSH Parties at any time. The definition of REIT
Opportunity shall be modified as appropriate from time to time in accordance
with any such written notices sent by the MSH Parties.
(i) "Securities Act" means the Securities Act of 1933, as
amended.
(j) "Securities Issuance" means a private or public offering,
sale, issuance or delivery of, or commitment or agreement to commit to offer,
sell, issue or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class, any limited partnership interests or units, or any other debt or
equity securities (including, without limitation, indebtedness having the right
to vote, indebtedness convertible into any equity of any class or any other
securities), or equity equivalents of either (including, without limitation,
stock appreciation rights). Securities Issuance shall also mean any
reorganization, recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares for other shares of the companies,
repurchase or redemption of shares, change in corporate structure or the like in
which the outstanding securities would be increased, decreased or changed into
or exchanged for a different number or kind of securities.
(k) "Tenant Opportunity" means the opportunity to become the
lessee under a mutually agreed upon lease arrangement of a property owned or
subsequently acquired by the MSH Parties if the MSH Parties, in their sole
discretion, determine that (i) consistent with MSH's status as a REIT, the MSH
Parties are required to enter into such a lease arrangement for such property,
including without limitation a hotel or similar type of facility and (ii) the
OPCO Parties or an entity that the OPCO Parties control is qualified to be the
lessee based on experience in the industry and financial and legal
qualifications. A Tenant Opportunity shall not include (1) a property which
already has an existing lessee as of the date of this Agreement (or, with
respect to a property acquired subsequent to the date of this Agreement, which
has an existing binding lessee arrangement that predates the acquisition of the
property by the MSH Parties), provided that the MSH Parties shall offer any such
lessee interest to the OPCO Parties if the lessee interest subsequently becomes
available), (2) an opportunity in which the seller of the property (or any
affiliate or designee of the seller) desires to enter into a lease agreement
with the MSH Parties, or (3) a property which has at any time been leased from
any of the MSH Parties to any of the OPCO Parties. The OPCO Parties shall have
the right from time to time to provide written notice to the MSH Parties
specifying certain criteria for a Tenant Opportunity in addition to the criteria
specified above in this definition of Tenant Opportunity. Any such written
notice from the OPCO Parties may be modified or canceled by written notice given
by the OPCO Parties at any time. The definition of Tenant Opportunity shall be
modified as appropriate from time to time in accordance with any such written
notices sent by the OPCO Parties.
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2. MeriStar Right of First Opportunity.
(a) During the term of this Agreement, if the OPCO Parties
develop a REIT Opportunity, or if any REIT Opportunity otherwise becomes
available to the OPCO Parties, the OPCO Parties shall first offer such REIT
Opportunity to the MSH Parties. The offer shall be made by written notice (the
"OPCO Notice") from the OPCO Parties to the MSH Parties, which OPCO Notice shall
contain a detailed description of the material terms and conditions of the REIT
Opportunity. The MSH Parties shall have twenty days (the "Twenty-Day Period")
from the date of receipt of the OPCO Notice to notify the OPCO Parties in
writing that it has accepted or rejected the REIT Opportunity. If the MSH
Parties do not respond by the end of the Twenty-Day Period, the MSH Parties
shall be deemed to have rejected the REIT Opportunity. If the MSH Parties accept
a REIT Opportunity, but subsequently decide not to pursue such opportunity, or
for any other reason fail to consummate the REIT Opportunity, the MSH Parties
shall immediately provide written notice that they are no longer pursuing such
REIT Opportunity to the OPCO Parties. Notwithstanding the provisions set forth
in this Section 2(a), the OPCO Parties may make a limited minority investment or
contribution as part of a lease arrangement with a party that is not a
Controlled Affiliate of the OPCO Parties in a bona fide arm's-length
transaction; provided that such investment does not materially impact the OPCO
Parties' financial and legal qualifications to lease and manage additional
MeriStar properties.
(b) If the MSH Parties reject a REIT Opportunity, or accept
such REIT Opportunity but thereafter provide, or are required by the provisions
hereof to provide, written notice to the OPCO Parties that they are no longer
pursuing such REIT Opportunity, the OPCO Parties shall, for a period of one year
after the MSH Withdrawal Date (as hereinafter defined), be entitled to acquire
the REIT Opportunity (i) at a price, and on terms and conditions, that are not
more favorable to the OPCO Parties in any material respect than the price and
terms and conditions set forth in the OPCO Notice relating to such REIT
Opportunity or (ii) if the MSH Parties, at any time after the OPCO Notice,
negotiated a different price, terms or conditions with the seller, then at a
price, and on terms and conditions, that are not more favorable than, the price
and terms and conditions negotiated by the MSH Parties with the seller. If the
OPCO Parties do not enter into a binding agreement to acquire the REIT
Opportunity within such one-year period, or if the price and terms and
conditions are more favorable to the OPCO Parties in any material respect than
the price and terms and conditions set forth in the OPCO Notice (or, if
applicable, than the price and terms and conditions negotiated by the MeriStar
Parties with the seller subsequent to the OPCO Notice), the OPCO Parties shall
again be required to comply with the procedures set forth above in Section 2(a)
if they desire to acquire such REIT Opportunity. The MSH Withdrawal Date means
any one of the following dates, as applicable: (i) the date that the MSH Parties
notify the OPCO Parties that they have rejected the REIT Opportunity, (ii) if
the MSH Parties do not respond to the OPCO Parties regarding the REIT
Opportunity, the expiration date of the Twenty-Day Period, or (iii) if the MSH
Parties accept the REIT Opportunity but subsequently cease to pursue the
opportunity, the earlier of (A) 30 days after the date on which the MSH Parties
cease to pursue the REIT Opportunity or (B) the date of receipt by the OPCO
Parties of written notice from the MSH Parties that they are no longer pursuing
the REIT Opportunity.
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(c) The OPCO Parties agree to use their commercially
reasonable efforts to assist the MSH Parties in structuring and consummating any
REIT Opportunity accepted by the MSH Parties, on terms determined by the MSH
Parties (including without limitation structuring such investment opportunity as
a "REIT-Qualified Investment," as hereinafter defined). A "REIT-Qualified
Investment" means an investment, the income from which would qualify under the
95% gross income test set forth in Section 856(c)(2) of the Code, the ownership
of which would not cause a REIT to violate the asset limitations set forth in
Section 856(c)(5) of the Code, and which otherwise meets the federal income tax
requirements applicable to REITs. Any expenses incurred that are directly
related to structuring an investment as a REIT-Qualified Investment shall be
borne solely by the MSH Parties.
3. OPCO Right of First Opportunity for Tenant Opportunity.
(a) During the term of this Agreement, if the MSH Parties
develop a Tenant Opportunity, or if a Tenant Opportunity otherwise becomes
available to the MSH Parties, the MSH Parties shall first offer such Tenant
Opportunity to the OPCO Parties. The offer shall be made by written notice (the
"MSH Notice") from the MSH Parties to the OPCO Parties, which MSH Notice shall
contain a detailed description of the material terms and conditions under which
the MSH Parties propose to offer such Tenant Opportunity to the OPCO Parties.
The MSH Parties shall thereafter provide or cause to be provided promptly to the
OPCO Parties such additional information relating to the Tenant Opportunity as
the OPCO Parties reasonably may request. For a period of 30 days after the date
that the MSH Parties deliver the MSH Notice to the OPCO Parties, the MSH Parties
and the OPCO Parties shall negotiate with each other on an exclusive basis with
respect to such Tenant Opportunity. If the MSH Parties and the OPCO Parties are
unable to enter into a mutually satisfactory arrangement with respect to the
Tenant Opportunity within such 30-day period, or if the OPCO Parties indicate
that they are not interested in pursuing such Tenant Opportunity (in which event
the OPCO Parties shall provide written notice to the MSH Parties as soon as the
OPCO Parties decide against pursuing such opportunity), then the MSH Parties
shall be free for a period of one year after the expiration of such 30-day
period to enter into a binding agreement with respect to such Tenant Opportunity
with any party at a price and on terms and conditions that are not materially
more favorable to the tenant than the price and terms and conditions last
proposed in writing by the MSH Parties to the OPCO Parties. If the MSH Parties
do not enter into a binding agreement with respect to such Tenant Opportunity
within such one-year period, or if the price and terms and conditions are more
favorable to the tenant in any material respect than the price and terms and
conditions last proposed in writing by the MSH Parties to the OPCO Parties, the
MSH Parties shall again be required to comply with the procedures set forth
above in this Section 3(a) if they desire to pursue such Tenant Opportunity.
(b) The OPCO Parties agree to cooperate with the MSH Parties
in structuring all dealings with outside parties in connection with any Tenant
Opportunity that the OPCO Parties and the MSH Parties agree to enter into
pursuant to Section 3(a) above. The OPCO Parties agree to cooperate with the MSH
Parties in structuring any Tenant Opportunity with the MSH Parties as a
"REIT-Qualified Investment" for the MSH Parties. The MSH Parties shall have the
right, in their sole discretion, to structure any
<PAGE>
investment as a REIT-Qualified Investment, even if such structuring prevents the
MSH Parties from creating a Tenant Opportunity for the OPCO Parties.
4. General Terms and Conditions for Rights of First Opportunity.
(a) Unless waived or agreed to as part of an investment or
otherwise provided in this Agreement, each party shall bear its own expenses
with respect to any opportunity to which this Agreement is applicable, and each
party agrees that it shall not be entitled to any compensation from the other
party with respect to any such opportunity.
(b) A party shall not be required to comply with the right of
first opportunity and notification requirements set forth in this Agreement
during any period in which the other party or any Controlled Affiliate of such
other party is in default of this Agreement or any other agreement entered into
by the parties hereto or any of their Controlled Affiliates, if such default is
material and remains uncured for fifteen days after receipt of notice thereof.
(c) Any opportunity which is offered to and accepted by the
MSH Parties under this Agreement may be entered into by or on behalf of the MSH
Parties or by any designee which is a Company Affiliate or Controlled Affiliate
of the MSH Parties. Any opportunity which is offered to and accepted by the OPCO
Parties under this Agreement may be entered into by or on behalf of the OPCO
Parties or by any designee which is a Controlled Affiliate of the OPCO Parties.
(d) All rights of first opportunity set forth in this
Agreement shall be subordinated to any seller consent and confidentiality
requirements; no party shall be required to comply with the first opportunity
set forth in this Agreement if such compliance would violate any seller consent
or confidentiality requirements.
(e) While it is in the intention of the parties to align their
businesses in accordance with the terms of this Agreement, each party shall act
independently in its own best interests, and neither party shall be considered a
partner or agent of the other party or to owe any fiduciary or other common law
duties to the other party.
5. Provision of Certain Services.
(a) During the term of this Agreement, the OPCO Parties shall
provide the MSH Parties with such administrative, corporate, accounting,
financial, insurance, legal, tax, data processing, human resources and
operational services as the MSH Parties shall from time to time reasonably
request.
(b) The MSH Parties shall compensate the OPCO Parties for the
services provided to the MSH Parties under this Section 5 in an amount
determined in good faith by the OPCO Parties as the amount an unaffiliated third
party would charge the MSH Parties for comparable services and shall reimburse
the OPCO Parties for certain costs incurred and paid to third parties on behalf
of the MSH Parties. The OPCO Parties shall, on
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a monthly basis, provide the MSH Parties with a statement setting forth its
charges for such services and the MSH Parties shall pay all undisputed charges
within ten days of the receipt by the MSH Parties of such monthly statement.
6. Non-Exclusive License.
(a) Subject to the terms and conditions of this Agreement, the
OPCO Parties hereby grant to the MSH Parties, and the MSH Parties hereby accept,
a non-exclusive, royalty-free license to use "MeriStar Hospitality Corporation"
and other names that include "MeriStar Hospitality Corporation" (the "Licensed
Property") in the corporate name of the MSH Parties. The MSH Parties acknowledge
and agree that the terms of this Agreement shall not restrict the ability of the
OPCO Parties and its Affiliates to use the Licensed Property.
(b) Upon the termination of this Agreement pursuant to Section
12, (i) all rights of the MSH Parties to the Licensed Property shall immediately
terminate and the MSH Parties shall have no further rights with respect thereto;
(ii) the MSH Parties shall not offer any services in connection with the
Licensed Property or any confusingly similar Licensed Property and shall cease
all use of the Licensed Property (including, without limitation, the use of the
Licensed Property in the corporate name of the MSH Parties); and (iii) the MSH
Parties shall promptly cease any activity which suggests they have any rights to
the Licensed Property or that it has any association with the OPCO Parties, in
either case except as may be contemplated pursuant to any other agreement
between the MSH Parties and the OPCO Parties.
7. General Cooperation and Coordination.
(a) The MSH Parties and the OPCO Parties hereby agree that it
is in the best interests of both entities and their shareholders that they
cooperate to the fullest extent possible in the conduct of their respective
operations with the goal of enhancing value to their respective shareholders. In
furtherance of the foregoing, meetings of the Boards of Directors of the MSH
Parties and the OPCO Parties may be held jointly if their respective Chairmen or
Vice Chairmen so decide.
(b) The MSH Parties and the OPCO Parties each hereby agree to
establish, as promptly as practicable following the closing of the Merger, and
thereafter to continue in effect, a lease committee which shall negotiate and
review all hotel leases to be entered into between the MSH Parties and the OPCO
Parties. The MSH Parties' lease committee will consist of directors of MSH that
are not also directors of OPCO and the OPCO Parties' lease committee will
consist of directors of OPCO that are not also directors of MSH. The lease
committees of each of the MSH Parties and the OPCO Parties shall establish such
procedures for the conduct of their business as they shall deem appropriate from
time to time.
(c) MSH and OPCO shall make reasonable and ongoing efforts to
ensure that members of management of each of the MSH Parties and the OPCO
Parties are given appropriate salary, bonuses and options or other similar plans
to enhance value to the shareholders of both MSH and OPCO. The respective Board
of Directors of MSH and
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OPCO shall direct each of their compensation committees to take into
consideration the objective set forth in the previous sentence in establishing
compensation levels and performance criteria for management of MSH and OPCO.
8. Procedures in Connection with Equity Offerings.
(a) If either the MSH Parties or the OPCO Parties shall desire
to engage in a Securities Issuance (the "Issuing Party"), then such Issuing
Party shall give notice (an "Issuance Notice") to such other party (the
"Non-Issuing Party") as promptly as practicable of their desire to engage in a
Securities Issuance. Such Issuance Notice shall include the proposed material
terms of such issuance, to the extent determined by the Issuing Party, including
whether such issuance is proposed to be pursuant to a public or private
offering, the amount of securities proposed to be issued, and the manner of
determining the offering price and other terms thereof.
(b) Upon receipt of an Issuance Notice, the Non-Issuing Party
shall promptly cooperate with the Issuing Party in every way to effect such
Securities Issuance pursuant to the terms and schedule thereof as established by
the Issuing Party, including, without limitation, the following:
(i) Making available such members of the Non-Issuing
Party's management as shall be requested by the Issuing Party to assist in
effecting such Securities Issuance;
(ii) In connection with a public offering, (A)
assisting in the preparation of and (B) executing and filing with the SEC, a
Registration Statement or Registration Statements under the Securities Act,
including the prospectus contained therein and any amendments or supplements
thereto, or any other statements, forms or documents required to be executed
pursuant to law or regulation with respect to be executed pursuant to law or
regulation with respect to such Securities Issuance, and, in connection
therewith, providing the Issuing Party with such information, including
financial statements, market studies, environmental and engineering reports and
other data, as may be required to be included in such Registration Statement
pursuant to the terms of the Securities Act;
(iii) Promptly notifying the Issuing Party of any
information that comes to the attention of the Non-Issuing Party which affects
or could affect such Securities Issuance, including, without limitation, the
occurrence of any event which makes any statement made in such Registration
Statement or related prospectus or any document incorporated or deemed to be
incorporated therein by reference or in any other offering document with respect
to such Securities Issuance untrue in any material respect or which requires the
making of any changes in such Registration Statement, prospectus or any such
offering document so that, in the case of the Registration Statement, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
<PAGE>
(iv) Cooperating with the Issuing Party in the
preparation, execution and filing of any documents required under the securities
laws of any state;
(v) Cooperating with the Issuing Party to facilitate
the timely preparation and delivery of certificates, if any, representing the
Securities Issuance;
(vi) Obtaining any consents, approvals or
authorizations of Governmental Authorities and other third parties as are
necessary in connection with such Securities Issuance;
(vii) In connection with any underwritten public
offering, cause appropriate members of the Non-Issuing Party's management to
cooperate and participate on a reasonable basis in the underwriters' "road show"
conferences related to such offering; and
(viii) Performing any and all other acts and
executing and delivering any and all other certificates, instruments and other
documents as shall be requested by the Issuing Party to effect any such
Securities Issuance.
9. Exchange of Information.
(a) Provision of Corporate Records; Agreement for Exchange of
Information. From and after the date hereof, the MSH Parties and the OPCO
Parties shall provide, or cause to be provided, to the other party and such
party's authorized accountants, counsel and other designated representatives, as
soon as reasonably practicable after written request therefor, reasonable access
to and duplicating rights with respect to any Information in the possession or
under the control of such party which the requesting party reasonably needs (i)
to comply with reporting, disclosure, filing or other requirements imposed on
the requesting party (including under applicable securities or tax laws) by a
Governmental Authority having jurisdiction over the requesting party, (ii) for
use in any other judicial, regulatory, administrative, tax or other proceeding
or in order to satisfy audit, accounting, claims, regulatory, litigation, tax or
other similar requirements, (iii) to comply with its obligations under this
Agreement, or (iv) for any other reasonable purpose; provided, however, that in
the event that any party determines that any such provision of Information is
reasonably likely to be commercially detrimental, violate any law or agreement,
or waive any attorney-client or work product privilege, the parties shall take
all reasonable measures to attempt to permit the compliance with such
obligations in a manner that avoids any such harm or consequence.
(b) Ownership of Information. Any Information owned by one
party hereto that is provided to a requesting party pursuant to Section 9(a)
shall be deemed to remain the property of the providing party. Unless
specifically set forth herein, nothing contained in this Agreement shall be
construed as granting or conferring rights of license or otherwise to use any
such Information for any purpose other than those described in Section 6(a).
(c) Compensation for Providing Information. The party
requesting Information agrees to reimburse the other party for the reasonable
costs, if any, of gathering and copying such Information, to the extent that
such costs are incurred for the
<PAGE>
benefit of the requesting party. Except as may be otherwise specifically
provided elsewhere in this Agreement or in any other agreement between the
parties, such costs shall be computed in accordance with a commercially
reasonable procedure.
10. Specific Performance. Each party hereto hereby acknowledges that
the obligations undertaken by it pursuant to this Agreement are unique and that
the other party hereto would likely have no adequate remedy at law if such party
shall fail to perform its obligations hereunder, and such party therefor
confirms that the other party's right to specific performance of the terms of
this Agreement is essential to protect the rights and interests of the other
party. Accordingly, in addition to any other remedies that a party hereto may
have at law or in equity, such party shall have the right to have all
obligations, covenants, agreements and other provisions of this Agreement
specifically performed by the other party hereto and the right to obtain a
temporary restraining order or a temporary or permanent injunction to secure
specific performance and to prevent a breach or threatened breach of this
Agreement by the other party hereto. Each party submits to the jurisdiction of
the courts of the State of New York for this purpose.
11. Affiliates. Each party hereto shall cause all entities that are
under its control to comply with the terms hereof.
12. Term. The term of the Agreement shall commence as of the date of
this Agreement and shall terminate upon the earlier of (a) the tenth (10th)
anniversary of the date of this Agreement, and (b) a Change of Control of OPCO.
Notwithstanding the foregoing, (i) this Agreement shall terminate if MSH
terminates its REIT status for any reason, and (ii) a party hereto may terminate
this Agreement if the other party or any Controlled Affiliate of such other
party is in default of this Agreement or any other agreement entered into by the
parties hereto or any of their Controlled Affiliates, if such default is
material and remains uncured for fifteen days after receipt of notice thereof;
provided, however, that if such default cannot be reasonably corrected within
such 15 day period and such defaulting party is attempting in good faith to cure
such default, such 15 day period shall be extended for a period not more than
ninety days after receipt of notice thereof.
13. Miscellaneous.
(a) Notices. Notices shall be sent to the parties at the
following addresses:
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If to the MeriStar Parties:
MeriStar Hospitality Corporation
1010 Wisconsin Avenue, N.W.
Suite 650
Washington, D.C. 20007
Facsimile: ________________
Attention: President
with a copy to:
If to the OPCO Parties:
CMC Operating Company
1010 Wisconsin Avenue, N.W.
Suite 650
Washington, D.C. 20007
Facsimile:
Attention: President
with a copy to:
<PAGE>
Notices may be sent certified mail, return receipt requested, Federal Express or
comparable overnight delivery service, or facsimile. Notice will be deemed
received on the fourth business day following deposit in U.S. mail and on the
first business day following deposit with Federal Express or other delivery
service, or transmission by facsimile. Any party to this Agreement may change
its address for notice by giving written notice to the other party at the
address and in accordance with the procedures provided above.
(b) Reasonable and Necessary Restrictions. Each of the parties
hereto hereby acknowledges and agrees that the restrictions, prohibitions and
other provisions of this Agreement are reasonable, fair and equitable in scope,
term and duration, are necessary to protect the legitimate business interests of
the parties hereto and are a material inducement to the parties hereto to enter
into the transactions described in and contemplated by the recitals hereto. Each
party hereto covenants that it will not sue to challenge the enforceability of
this Agreement or raise any equitable defense to its enforcement.
(c) Successors and Assigns. Except as provided in Section 12,
this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns. This Agreement shall not be
assigned without the express written consent of each of the parties hereto.
(d) Amendments; Waivers. No termination, cancellation,
modification, amendment, deletion, addition or other change in this Agreement,
or any provision hereof or waiver of any right or remedy herein provided, shall
be effective for any purpose unless such change or waiver is specifically set
forth in a writing signed by the party or parties to be bound thereby, except
any addition or modifications to the definition of "REIT Opportunity" or "Tenant
Opportunity" as contemplated herein. The waiver of any right or remedy with
respect to any occurrence on one occasion shall not be deemed a waiver of such
right or remedy with respect to such occurrence on any other occasion.
(e) Choice of Law. This Agreement and the rights and
obligations the parties hereunder shall be governed by the laws of the State of
New York, without regard to the principles of choice of law thereof.
(f) Severability. In the event that one or more of the terms
or provisions of this Agreement or the application thereof to any person(s) or
in any circumstance(s) shall, for any reason and to any extent to be found by a
court of competent jurisdiction to be invalid, illegal or unenforceable, such
court shall have the power, and hereby is directed, to substitute for or limit
such invalid term(s) or application(s) and to enforce such substituted or
limited terms or provisions or the application thereof. Subject to the
foregoing, the invalidity, illegality or enforceability of any one or more of
the terms or provisions of this Agreement, as the same may be amended from time
to time, shall not affect the validity, legality or enforceability of any other
terms or provision hereof.
<PAGE>
(g) Entire Agreement; No Third-Party Beneficiaries. This
Agreement (i) constitutes the entire agreement and supersedes all prior
agreements, understandings, negotiations and discussions, whether written or
oral, between the parties hereto with respect to the subject matter hereof, so
that no such external or separate agreement relating to the subject matter of
this Agreement shall have any effect or be binding, unless the same is referred
to specifically in this Agreement or is executed by the parties after the date
hereof; and (ii) is not intended to confer upon any other person any rights or
remedies hereunder, and shall not be enforceable by any party not a signatory to
this Agreement.
(h) Gender; Number. As the context requires, any word used
herein in the singular shall extend to and include the plural, any word used in
the plural shall extend to and include the singular and any word used in any
gender or the neuter shall extend to and include each other gender or be
neutral.
(i) Headings. The headings of the sections hereof are inserted
for convenience of reference only and are not intended to be a part of or affect
the meaning or interpretation of this Agreement or of any term or provision
hereof.
(j) Counterparts. This Agreement may be executed in two or
more counterparts, each of which together shall be deemed to be an original and
all of which together shall be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by one of its duly authorized corporate officers, as of
the date first above written.
MERISTAR HOSPITALITY CORPORATION
By:
Name:
Title:
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.
By: MeriStar Hospitality Corporation, its general partner
By:
Name:
Title:
<PAGE>
CMC OPERATING COMPANY
By:
Name:
Title:
CMC OPERATING PARTNERSHIP, L.P.
By: CMC OPERATING COMPANY, its general partner
By:
Name:
Title:
