Intercompany Agreement (42K)
Doc #260674: Click preview link for longer preview.
INTERCOMPANY AGREEMENT
THIS INTERCOMPANY AGREEMENT (the "Agreement") is made and entered into as
of August 3, 1998, 1998, among MeriStar Hospitality Corporation, a Maryland
corporation ("MSH"), MeriStar Hospitality Operating Partnership, L.P., a
Delaware limited partnership ("MSH OP" and together with MSH, the "MSH
Parties"), MeriStar Hotels & Resorts, Inc., a Delaware corporation ("OPCO") and
MeriStar H&R Operating Partnership, L.P., a Delaware limited partnership ("OPCO
OP") and together with OPCO, the "OPCO Parties").
W I T N E S S E T H :
WHEREAS, MSH owns, directly or indirectly, a 1% general partnership
interest and an approximately 89% limited partnership interest, in MSH OP;
WHEREAS, OPCO owns, directly or indirectly, a 1% general partnership
interest and an approximately 83% limited partnership interest, OPCO OP;
WHEREAS, the MSH Parties may in certain circumstances determine that they
are precluded from pursuing, or are limited in the manner in which they purse,
various business opportunities due to the status of MSH as a real estate
investment trust ("REIT") under Sections 856 through 860 of the Internal Revenue
Code of 1986, as amended (the "Code");
WHEREAS, OPCO is a newly created corporation that was formed for the
purposes of, among other things, becoming a lessee and operator of various types
of assets, including hotel properties owned by the MSH OP and its subsidiaries
and others; and
WHEREAS, in light of the purposes for which OPCO was formed, the MSH
Parties and the OPCO Parties desire to enter into this Agreement in order (a) to
provide to each other a right of first opportunity with respect to certain
investment opportunities available to each of them, (b) for the OPCO Parties to
provide certain corporate and other general services to the MSH Parties, and (c)
to set forth certain terms regarding cooperation and coordination between the
MSH Parties and the OPCO Parties.
NOW, THEREFORE, in consideration of the premises and mutual undertakings
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto, the
undersigned parties hereby agree as follows:
{PAGE}
1. Definitions. Except as may be otherwise herein expressly
-----------
provided, the following terms and phrases shall have the meanings set forth
below:
(a) "Change in Control" shall mean a change in ownership or
control of a party effected through either of the following transactions:
(i) any person or related group of persons (other than such
party or a Controlled Affiliate of such party) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) of securities possessing more than fifty
percent (50%) of the total combined voting power of such party's outstanding
securities; or
(ii) there is a change in the composition of such party's
Board of Directors over a period of thirty-six (36) consecutive months (or less)
such that a majority of Board members (rounded up to the nearest whole number)
ceases, by reason of one or more proxy contests for the election of Board
members, to be comprised of individuals who either (A) have been Board members
continuously since the beginning of such period or (B) have been elected or
nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still in office
at the time such election or nomination was approved by the Board.
(b) "Company Affiliate" means any entity in which a majority of
the beneficial ownership interests are owned by MSH OP or by any entity
controlled by, controlling or under common control with MSH OP.
(c) "Controlled Affiliate" shall mean, with respect to any
party, any entity controlled by, controlling or under common control with such
party.
(d) "Governmental Authority" means any federal, state, local,
foreign or international court, government, department, commission, board,
bureau, agency, official or other regulatory, administrative or governmental
authority.
(e) "Information" means information, whether or not patentable
or copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product), and other technical, financial,
employee or business information or data.
260674