EXHIBIT 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
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Shares which have been validly tendered and not withdrawn pursuant to the Offer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
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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
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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.
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(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.
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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
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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
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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
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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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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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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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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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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 arsi 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
-40-
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
-41-
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
-42-
By: HH Genpar Partners, its General Partner
By: Hampstead Associates, Inc., its
General Partner
/s/ J. Peter Kline By: /s/Donald J. McNamara
- --------------------- --------------------------
Name: J. Peter Kline Name: Donald J. McNamara
Title: Witness Title: Authorized Officer
NEW PARENT:
UNITED/HARVEY HOTELS, INC.
Attest:
/s/J. Peter Kline By: /s/Donald J. McNamara
- --------------------- --------------------------
Name: J. Peter Kline Name: Donald J. McNamara
Title: Witness Title: Authorized Officer
MERGER SUB:
UNITED/HARVEY SUB, INC.
Attest:
/s/J. Peter Kline By: /s/Donald J. McNamara
- --------------------- --------------------------
Name: J. Peter Kline Name: Donald J. McNamara
Title: Witness 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
-43-
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
-44-
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
-45-
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
-46-
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.
-47-
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;
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.
-2-
EXECUTED as of November 14, 1994 and effective as provided above.
________________________
Don Wm. Cockroft
________________________
J. Howard Lammons
________________________
Robert L. Cockroft
________________________
Howard W. Loveless
________________________
Janet C. Virgin
________________________
Ronald J. Wareham
-3-
EXHIBIT A
DESIGNEES OF PURCHASER
J. Peter Kline
Donald J. McNamara
Robert A. Whitman
EXHIBIT B
Don Wm. Cockroft
J. Howard Lammons
Robert L. Cockroft
Howard W. Loveless
Janet C. Virgin
Ronald J. Wareham
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.
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.
-2-
ANNEX III
UNITED INNS, INC.
BY-LAWS
As Adopted and in Effect
on _________ __, 199_
UNITED INNS, INC.
BY-LAWS
TABLE OF CONTENTS
Page
----
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
i
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
-ii-
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
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.
-2-
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
-3-
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
-4-
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,
-5-
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
-6-
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
-7-
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
-8-
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.
-9-
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-
(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-
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-
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-
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
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
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
- ii -
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
- iii -
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 -
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.
State of
Corporation Relationship Incorporation
- ----------- ------------ -------------
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
[CONTINUED]
- 2 -
State of
Corporation Relationship Incorporation
- ----------- ------------ -------------
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. Subsidiary(1) Texas
Ox John, Inc. Subsidiary(2) Texas
La Mancha Club, Inc. Subsidiary(3) Texas
La Strada Club, Inc. Subsidiary(3) 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 Subsidiary(4) Georgia
Penrod Club Subsidiary(3) Texas
The Thicket Club Subsidiary(3) 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. Subsidiary(3) 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
_____________________
(1) 49% Actual Ownership
(2) 45% Actual Ownership
(3) Beneficial Interest
(4) 75% Owned
- 3 -
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 -
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 -
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 -
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 -
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
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.
- 8 -
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
- 9 -
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.
______________________________________________________________
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 -
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 -
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:
LOCATION DATE OF LICENSE EXPIRATION DATE
- -------- --------------- ---------------
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
- 12 -
LOCATION DATE OF LICENSE EXPIRATION DATE
- -------- --------------- ---------------
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
- 13 -
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 -
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 -
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 -
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 -
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 -
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 -
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 -
ANNEX TO SCHEDULE 4.8(A)
CURRENT LAWSUITS AGAINST VARIOUS ENTITIES IN
UNITED INNS SYSTEM -- INSURED; OTHER CLAIMS
DATE OF
INCIDENT AMOUNT OF
NAME OF ON WHICH DEMAND MADE DESCRIPTION OF
CLAIMANT OR CLAIM IS IN COMPLAINT BI OR PD OPEN TOTAL CUMULATIVE BASIS OF
PLAINTIFF COMPANY DEFENDANT BASED OR LETTER RESERVES RESERVES RESERVES SUMS PAID LAWSUIT
- -----------------------------------------------------------------------------------------------------------------------------------
Burnett et al. Stagner Hotel 09-Jun-90 No specific $31,000.00 $45,894.00 $106,020.00 $60,126.00 Three
Courts, Inc. et liquidated plaintiffs
al. demand claim to have
been mugged
while
unloading
vehicle at
hotel
Busbice, Rier Properties 13-Aug-90 No specific $5,000.00 $8,245.00 $20,000.00 $11,754.00 Plaintiff
Tommie Inc. d/b/a liquidated claims to have
Houston Medical demand suffered
Center injuries
acquired when
she sat on arm
rest that did
not have
padding and
metal exposed
Ciprotti, United Inns Inc. 25-Nov-89 $450,000.00 No reserves No reserves No reserves No reserves Is bringing a
Laura of Tennessee and set up set up set up set up third lawsuit
Northside Inn, pro se against
Inc. 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. United Inns Inc. 10-Jan-93 No specific No reserves No reserves No reserves No reserves Mr. Pride
of Tennessee liquidated available available available available truck in
d/b/a Mr. Pride demand Louisiana
Car Wash struck 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 Memorial Katy 02-Mar-92 Less than $10,000.00 $17,933.00 $30,000.00 $12,067.00 Plaintiff
Inn, Inc. and $100,000 mugged by two
Stanley Smith assailants in
Security parking lot of
hotel
Curry, Jack Jackson Downtown 12-Jul-91 $750,000.00 $15,000.00 $21,019.00 $35,000.00 $13,980.00 Plaintiff
Inn, Inc. d/b/a claims
Jackson North injuries after
he slipped and
fell in public
restroom of
hotel
Flores, Gloria Houston Inns 05-Nov-88 No specific $75,000.00 $88,074.00 $235,000.00 $146,925.00 Claims one and
et al. Service Company, liquidated a half years
The Petals demand later her
Restaurant, husband died
Holiday Inns, from
Inc. et al. salmonella
poisoning from
oysters served
- 21 -
ANNEX TO SCHEDULE 4.8(A)
CURRENT LAWSUITS AGAINST VARIOUS ENTITIES IN
UNITED INNS SYSTEM -- INSURED; OTHER CLAIMS
DATE OF
INCIDENT AMOUNT OF
NAME OF ON WHICH DEMAND MADE DESCRIPTION OF
CLAIMANT OR CLAIM IS IN COMPLAINT BI OR PD OPEN TOTAL CUMULATIVE BASIS OF
PLAINTIFF COMPANY DEFENDANT BASED OR LETTER RESERVES RESERVES RESERVES SUMS PAID LAWSUIT
- -----------------------------------------------------------------------------------------------------------------------------------
Foster, Delia United Inns, Inc. 15-Aug-91 $346,218.45 $15,000.00 $22,394.00 $25,000.00 $2,606.00 Plaintiff
of Tennessee claims
d/b/a Holiday Inn injuries after
Downtown, Jackson she slipped
and fell in
hotel
restaurant
Goelz, Rier Properties 11-May-92 $250,000.00 $5,000.00 $7,474.00 $7,500.00 $25.00 Plaintiff
Jeffrey W. and Inc. d/b/a Goelz shot in
Kenneth Rivi Hampton Marietta, parking lot by
PRGV, Inc. d/b/a person from a
King's Head Pub, lounge they
and David Michael had just
Breeden returned from;
Rivi is
claiming
hedonistic
type damages
Hughes, United Inns of 21-Nov-91 No specific $130,000.00 $130,160.00 $140,000.00 $9,840.00 Plaintiff
Dorothy and Colorado, Inc. liquidated slipped and
Mutual of d/b/a Holiday Inn demand fell on ice on
Omaha North sidewalk at
Insurance hotel,
Company claiming
multiple
injuries
Lambert, R.W. Lammons Hotel 29-Jul-93 $1,000,000.00 $10,000.00 $14,130.00 $20,050.00 $5,920.00 Plaintiffs
and Vink, Courts, Inc. claim they
Peter d/b/a Ramada were kidnapped
Hotel Downtown from hotel
Nelson, Tom A. Houston Days Inn 17-Nov-91 $90,000.00 $20,000.00 $27,075.00 $27,500.00 $425.00 Plaintiffs had
and Crystal I-10 East belongings and
rental truck
stolen while
at hotel;
claim of PD
and personal
damages
Reyna, Maria Rier Properties 30-Jul-93 No specific $5,000.00 $5,200.00 $5,200.00 $0.00 Plaintiff
Inc. d/b/a liquidated claims she was
Holiday Inn demand injured when
Medical Center the automatic
door closed on
her while
exiting
Nancy Holiday Inn 07-Jan-93 No specific $5,000.00 $7,985.00 $15,000.00 $7,104.00 Plaintiff and
Rodriguez Airport & liquidated hotel van
K. Anderson demand driver dispute
who had the
green light
when
proceeding
through an
intersection
Shaw, Marie Sepp Hotel 16-Nov-91 No specific $10,000.00 $28,412.00 $30,000.00 $1,587.00 Claims she was
Courts, Inc. liquidated injured when
d/b/a Holiday Inn demand her car and
Airport North hotel van
sideswiped
each other at
the airport
- 22 -
ANNEX TO SCHEDULE 4.8(A)
CURRENT LAWSUITS AGAINST VARIOUS ENTITIES IN
UNITED INNS SYSTEM -- INSURED; OTHER CLAIMS
DATE OF
INCIDENT AMOUNT OF
NAME OF ON WHICH DEMAND MADE DESCRIPTION OF
CLAIMANT OR CLAIM IS IN COMPLAINT BI OR PD OPEN TOTAL CUMULATIVE BASIS OF
PLAINTIFF COMPANY DEFENDANT BASED OR LETTER RESERVES RESERVES RESERVES SUMS PAID LAWSUIT
- -----------------------------------------------------------------------------------------------------------------------------------
Spears, Edith Houston Airport 26-Mar-91 No specific $50,000.00 $56,208.00 $65,000.00 $8,791.00 Plaintiff
Inn, Inc. d/b/a liquidated mugged in
Holiday Inn demand parking lot of
Intercontinental hotel.
Airport
Sylvester, Holiday Inn 23-Apr-94 $15,000,000.00 $10,000.00 $45,211.00 $50,000.00 $4,788.00 Lawsuit filed
Sheila et al. (Jackson after their
Mississippi), The daughter was
Salvation Army, found in the
and Pendleton bottom of the
Detectives of MS, pool
Inc. et al.
Lestin, Eric Croswell Inn, 01-May-91 Specific Uninsured Uninsured Uninsured Uninsured Defendant has
H. Inc. performance claim; no claim; no claim; no claim; no filed
and other reserves reserves reserves reserves counterclaim
contract available available available available against
remedies defendant for
specific
performance of
alleged oral
agreement for
purchase of
property owned
by Croswell
Inn, Inc.
Rader, Transcontinental Not all'd No specific Uninsured Uninsured Uninsured Uninsured Plaintiff
Homer J., Jr. Motor Hotels, liquidated claim; no claim; no claim; no claim; no claims hotel
Inc. (Howard demand reserves reserves reserves reserves breached its
Johnson Hotel available available available available lease when
Downtown) hotel among
other things
changed
franchises
Rothschild's Rier Properties 03-Mar-93 $50,145.00 Uninsured Uninsured Uninsured Uninsured Claims front
Inc. d/b/a claim; no claim; no claim; no claim; no desk lost box
Holiday Inn reserves reserves reserves reserves of artificial
Perimeter available available available available limbs after
Mall/Dunwoody the box had
area been left at
front desk
Gerl Brandon Houston Airport 28-Oct-92 $95,000 Served too Served too Served too Served too Plaintiff
Inn, Inc. dba recently recently recently recently claims injury
Holiday Inn for any for any for any for any when she fell
Airport reserve reserve reserve reserve out of company
figures figures figures figures vehicle
- 23 -
ANNEX TO SCHEDULE 4.8(A)
CURRENT LAWSUITS AGAINST VARIOUS ENTITIES IN
UNITED INNS SYSTEM -- INSURED; OTHER CLAIMS
DATE OF
INCIDENT AMOUNT OF
NAME OF ON WHICH DEMAND MADE DESCRIPTION OF
CLAIMANT OR CLAIM IS IN COMPLAINT BI OR PD OPEN TOTAL CUMULATIVE BASIS OF
PLAINTIFF COMPANY DEFENDANT BASED OR LETTER RESERVES RESERVES RESERVES SUMS PAID LAWSUIT
- -----------------------------------------------------------------------------------------------------------------------------------
Cyprian Peter Cruckshank, --- $16 Billion Served too Served too Served too Served too Plaintiff's
Mammah, G.M., Holiday recently recently recently recently claim is
President, Inn, Inc. Med. for any for any for any for any extremely
Olympic Ctr.; Wilbert reserve reserve reserve reserve ambiguous to
Executive Limo Lee, night figures figures figures figures the point that
auditor, Holiday it appears he
Inn Incorporated is failing to
Med. Ctr.; Rier state a claim
Inn, Inc.; upon which
Holiday Inn; and relief can be
other Defendants 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 Dotson Inc. - ______ $155,000 Uninsured Uninsured Uninsured Uninsured Claim (not
Ltd. Friscia Inn Inc. claim; no claim; no claim; no claim, no lawsuit)
(former Hotel in reserves reserves reserves reserves alleging that
Houston) available available available available seller
violated the
Texas
Deceptive
Trade
Practices Act
in selling
hotel to
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 Holiday Inn West Pending ______ ______ ______ ______ ______ Intent of
Highway Dept. Loop Texas State
Highway Dept.
to take a
significant
portion of
property for
highway
development of
Loop 610 and
Highway 59 in
Houston
- 24 -
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 -
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 -
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 -
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 -
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 -
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 -
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 -
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 $231,400 for two years salary, plus
an additional amount for benefits.
- 32 -
7. Severance Agreement between the Company and J. Don Miller dated June 1,
1987. Estimated cost is approximately $174,300 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 $168,300 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 -
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,
Michael S. McNulty
AGREED TO BY: UNITED INNS, INC.
_________________________________
Don Wm. Cockroft
President
- 34 -
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 -
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
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SITE REPORT PREPARER DATE OF REPORT
- --------------------------------------------------------------------------------
Holiday Inn/Perimeter Dunwoody(1) Viro Group August 22, 1994
4386 Chamblee-Dunwoody Road
Atlanta, GA
- --------------------------------------------------------------------------------
Holiday Inn/Airport North(2) Viro Group August 22, 1994
1380 Virginia Avenue
Atlanta, GA
- --------------------------------------------------------------------------------
Holiday Inn/Powers Ferry(2) Viro Group August 22, 1994
6345 Powers Ferry Rd.
Atlanta, GA
- --------------------------------------------------------------------------------
____________________
(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 -
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SITE REPORT PREPARER DATE OF REPORT
- --------------------------------------------------------------------------------
Holiday Inn Express/I-20 East(2) Viro Group August 22, 1994
4300 Snapfinger Woods Way
Decatur, GA
- --------------------------------------------------------------------------------
Holiday Inn Express/Northeast(2) Viro Group August 22, 1994
4422 Northeast Freeway
Doraville, GA
- --------------------------------------------------------------------------------
Downtown Ramada Inn(3) ATEC July 27, 1989
175 Piedmont Road, N.E.
Atlanta, GA
- --------------------------------------------------------------------------------
Hampton/Marietta(4) Viro Group August 22, 1994
455 Franklin Rd.
Marietta, GA
- --------------------------------------------------------------------------------
Holiday Inn/South(2) 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 Carwash(2) ATEC September 14, 1994
2081 Northlake Parkway
Tucker, GA
- --------------------------------------------------------------------------------
Days Inn Motor Hotel(2) ATEC August 8, 1994
1575 Regal Row
Dallas, TX
- --------------------------------------------------------------------------------
Holiday Inn Brookhollow(2) ATEC August 8, 1994
7050 Stemmons Freeway
Dallas, TX
- --------------------------------------------------------------------------------
________________________
(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 -
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SITE REPORT PREPARER DATE OF REPORT
- --------------------------------------------------------------------------------
7.75 Acres of Land(5) ATEC September 26, 1994
4070 North Central Expressway
Dallas, TX
- --------------------------------------------------------------------------------
5 Acres Vacant Land Environmental August 29, 1994
In a Corner of I-40 and Country Engineering
Club Drive Consultants, Inc.
Flagstaff, AZ
- --------------------------------------------------------------------------------
Howard Johnson(2) Environmental July 22, 1994
5101 North Scottsdale Rd. Engineering
Scottsdale, AZ Consultants, Inc.
- --------------------------------------------------------------------------------
Mr. Pride Carwash(2) ATEC September 9, 1994
Sharpstown
7585 Bellaire Blvd.
Houston, TX
- --------------------------------------------------------------------------------
Days Inn, I-10 East(2) ATEC August 18, 1994
1055 East Freeway
Houston, TX
- --------------------------------------------------------------------------------
Hampton Inn(2) ATEC August 18, 1994
828 Mercury Drive
Houston, TX
- --------------------------------------------------------------------------------
Holiday Inn Medical Center(2) ATEC August 18, 1994
6701 South Main St.
Houston, TX
- --------------------------------------------------------------------------------
Holiday Inn West Loop(2) ATEC August 18, 1994
3131 West Loop South
Houston, TX
- --------------------------------------------------------------------------------
Holiday Inn - Airport(2)(6) ATEC August 18, 1994
3702 North Sam Houston Parkway
Houston, TX
- --------------------------------------------------------------------------------
________________________
(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 -
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SITE REPORT PREPARER DATE OF REPORT
- --------------------------------------------------------------------------------
Holiday Inn I-10 West(2) ATEC August 18, 1994
7611 Katy Freeway
Houston, TX
- --------------------------------------------------------------------------------
Mr. Pride Carwash(2) ATEC September 21, 1994
1219 East Pioneer Parkway
Arlington, TX
- --------------------------------------------------------------------------------
Holiday Inn Santa Barbara(2) Fugro West, Inc. August, 1994
5650 Calle Road
Goleta, CA
- --------------------------------------------------------------------------------
Vacant Lot Fronting Environmental August, 1994
Holiday Inn Southwest Protection Systems
2649 U.S. Highway 80 West
Jackson, MS
- --------------------------------------------------------------------------------
Holiday Inn North(2) ATEC October 5, 1994
3125 Sinton Road
Colorado Springs, CO
- --------------------------------------------------------------------------------
Holiday Inn North(2) Environmental August, 1994
5075 I-55 North Protection Systems
Jackson, MS
- --------------------------------------------------------------------------------
Hampton Inn(2)(7) Environmental August, 1994
465 Briarwood Drive Protection Systems
Jackson, MS
- --------------------------------------------------------------------------------
Holiday Inn Downtown(2) Environmental August, 1994
200 East Amite Street Protection Systems
Jackson, MS
- --------------------------------------------------------------------------------
Holiday Inn Southwest(2) Environmental August, 1994
2649 U.S. Highway Southwest Protection Systems
Jackson, MS
- --------------------------------------------------------------------------------
Vacant Land - ATEC September 9, 1994
Holiday Inn Medical Center
6703-6719 South Main Street
Houston, TX
- --------------------------------------------------------------------------------
____________________
(7) Includes Report of Soil and Ground Water Investigation of former McDonald's
site, owned by the Company.
- 39 -
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SITE REPORT PREPARER DATE OF REPORT
- --------------------------------------------------------------------------------
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 Wash(2) ATEC September 9, 1994
7211 South Loop East
Houston, TX
- --------------------------------------------------------------------------------
Holiday Inn Express(2) ATEC October 5, 1994
725 West Cimmaron Street
Colorado Springs, CO
- --------------------------------------------------------------------------------
Days Inn(2) American September 30, 1994
1000 West U.S. Highway 66 Environmental Network
Flagstaff, AZ
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- 40 -
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 -
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 -
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 -
ANNEX TO SCHEDULE 4.13(D)
UNDERGROUND STORAGE TANKS -- CLAIMS
MR. PRIDE CAR WASH SITES
UPDATED AS OF 10/29/94
TTL TTL
ANTICIPATED PAID REIMBURSEMENT REIMBURSEMENT ADMINISTRATIVE
COST TO DATE TO DATE ANTICIPATED STATUS(8)
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
- 44 -
ANNEX TO SCHEDULE 4.13(D) - CONTINUED
UNDERGROUND STORAGE TANKS -- CLAIMS
TTL TTL
ANTICIPATED PAID REIMBURSEMENT REIMBURSEMENT ADMINISTRATIVE
COST TO DATE TO DATE ANTICIPATED STATUS(8)
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
<FN>
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 -
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 -
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
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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.
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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).
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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.
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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 -
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
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