Exhibit 10.10
PAYMENT
AGREEMENT
THIS PAYMENT AGREEMENT (this
“ Agreement ”) is entered into as of
December 30, 2005, by and between CNL HOTELS &
RESORTS, INC . (f/k/a CNL Hospitality Properties, Inc.), a
Maryland corporation (the “ Company ”), and
CNL HOSPITALITY CORP ., a Florida corporation (the “
Advisor ”). Capitalized terms used but not
defined herein shall have the meanings ascribed to such terms in
that certain Advisory Agreement, dated as of April 1, 2004,
between the Company and the Advisor (the “ Advisory
Agreement ”).
W
I T N
E S S E T H
:
WHEREAS , the Company and the Advisor entered into the
Advisory Agreement, pursuant to which the Advisor provides the
Company with certain advisory services relating to, among other
things, acquisition and financing transactions; and
WHEREAS, the Company and the Advisor entered into that
certain Renewal Agreement, dated as of March 31, 2005, as
amended by the First Amendment to Renewal Agreement, dated as of
June 30, 2005, the Second Amendment to Renewal Agreement,
dated as of July 29, 2005, the Third Amendment to Renewal
Agreement, dated as of August 30, 2005, the Fourth Amendment
to Renewal Agreement, dated as of September 29, 2005, the
Fifth Amendment to Renewal Agreement, dated as of October 31,
2005, and the Sixth Amendment to Renewal Agreement, dated as of
November 30, 2005 (collectively, the “ Original
Renewal Agreement ”), pursuant to which, among other
things, the Advisory Agreement was amended and renewed for an
additional one-year term; and
WHEREAS , the payment of Acquisition Fees (as
specifically set forth and enumerated in Section 9(b) of
the Advisory Agreement (the “ Acquisition Fees
”)) by the Company to the Advisor under the Advisory
Agreement and the Amended Advisory Agreement (as defined herein)
have been deferred, pursuant to the terms of the Agreement and Plan
of Merger, dated as of April 29, 2004, as amended as of
June 17, 2004, by and among the Company, the Advisor, CNL
Hospitality Properties Acquisition Corp., CNL Real Estate
Group, Inc., Five Arrows Realty Securities II, LLC, the
Stockholders (as defined therein), and CNL Financial
Group, Inc. (the “ Merger Agreement ”), and
the initial claim by the Advisor for such fees (which will have
been deferred through and including December 31, 2005)
aggregates $82.7 million (the “ Payable Fees ”);
and
WHEREAS , the Independent Directors of the Board of
Directors of the Company (the “ Independent Directors
”) have reviewed the Payable Fees (the “ Initial
Claim ”) and have been in discussions with the Advisor
regarding a negotiated determination of the amount of the Payable
Fees in accordance with the terms of the Advisory Agreement and the
Company’s Articles of Amendment and Restatement, as amended;
and
WHEREAS , the Independent Directors and the Advisor,
after negotiation, have agreed to settle the amount of Payable Fees
payable by the Company to the Advisor in an amount less
than the Initial Claim upon the terms and
conditions provided herein in full satisfaction, release and
discharge of the Payable Fees; and
WHEREAS , the Independent Directors have received the
opinion of Houlihan Lokey & Zukin Financial
Advisors, Inc., that the amount of the Payment (as defined
herein) is fair to the Company and the stockholders of the Company
from a financial point of view; and
WHEREAS , the Company and the Advisor have determined to
reduce the percentage of Total Proceeds payable to the Advisor
pursuant to the Advisory Agreement, and in connection therewith,
are entering into an Amended and Restated Renewal Agreement of even
date herewith (the “ Amended and Restated Renewal
Agreement, ” which, collectively with the Advisory
Agreement, shall be referred to herein as the “ Amended
Advisory Agreement ”);
WHEREAS , the Independent Directors have unanimously
approved this Agreement and the Amended and Restated Renewal
Agreement; and
NOW, THEREFORE,
in consideration of the premises and
mutual agreements, covenants and provisions contained herein, and
other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as
follows:
1.
Payment
. The
Company shall pay the Advisor an aggregate of $37,000,000 as
follows: (i) $10,000,000 in cash to be paid by the
Company to the Advisor on the date hereof by wire transfer of
immediately available funds, and (ii) the issuance and
delivery by the Company to the Advisor of a promissory note made by
the Company to the Advisor in the original principal amount of
$27,000,000 in the form attached hereto as Exhibit A
(the “ Note ”), to be delivered by the Company
to the Advisor on the date hereof (collectively, the “
Payment ”). The Company shall pay any
documentary stamp tax with respect to the issuance and delivery of
the Note to the extent required.
2.
Payable
Fees . The Advisor hereby
acknowledges and agrees that (i) the Payment shall be in full
satisfaction and payment of all its rights and interests with
respect to the Payable Fees and (ii) there are no other unpaid
Acquisition Fees which have been incurred by the Company or earned
by the Advisor on or prior to December 31, 2005, other than
the Payable Fees.
3.
Waiver of
Acquisition Fees and Asset Management Fees . The Advisor hereby
acknowledges and agrees (i) to irrevocably waive the right to
payment of any Acquisition Fees and Asset Management Fees (as
enumerated in Section 9(a) of the Amended Advisory
Agreement) payable by the Company to the Advisor under the Amended
Advisory Agreement for the period from and including
January 1, 2006 through and including June 30, 2006
(collectively, the “ Relinquished Fees ”) and
(ii) that the mutual agreements, covenants and provisions
contained in this Agreement shall be in full satisfaction and
payment of all of its rights and interests with respect to the
Relinquished Fees. Except for the Payment with respect to
Payable Fees as set forth in paragraph 1 and paragraph 2 and the
waiver of the Relinquished Fees as set forth in paragraph 3, all
other advisory fees under the Amended Advisory Agreement,
including, without limitation, Development Fees, incurred by the
Company and earned by the
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Advisor shall be payable in
accordance with the terms and conditions of the Amended Advisory
Agreement.
4.
Release by the
Company . The Company, for
itself, each of its subsidiaries and Affiliates, successors and
assigns, and any of their respective past, present and future
employees, agents, representatives, attorneys, officers, directors,
stockholders and trustees (collectively the “ Company
Releasing Parties ”), does hereby fully, finally and
forever remise, release and discharge (the “ Company
Release ”) the Advisor, its subsidiaries and Affiliates,
successors and assigns, and any of their respective past, present
and future employees, agents, representatives, attorneys, officers,
directors, stockholders and trustees (collectively the “
Company Released Parties ”), from any and all actions,
causes and rights of action, counterclaims, suits, debts, dues,
sums of money, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, controversies, damages, special damages,
judgments, expenses, executions, liens, claims of liens, claims of
costs, penalties, attorneys’ fees, or any other compensation,
recovery or relief, on account of any liability, obligation, demand
or cause of action of whatever nature (collectively, “
Losses ”) relating to, arising out of or in connection
with any claim that the Company should have settled the Payable
Fees and the Relinquished Fees for an amount less than the Payment,
whether at law, in equity or otherwise, whether currently
outstanding or arising subsequent hereto (including as a result of
newly enacted laws or regulations), known or unknown, contingent or
absolute, suspected or unsuspected, disclosed or undisclosed,
hidden or concealed, disputed or undisputed, liquidated or
unliquidated, matured or unmatured and whether or not accrued, and
whether or not asserted or assertable in law, equity or otherwise,
for, upon or by reason of any act, omission, negligence or other
matter, cause or thing whatsoever from the beginning of the world
until the date hereof, which any of the Company Releasing Parties
ever had or may have had, now have, or hereafter can, shall or may
have against any of the Company Released Parties for, upon or by
reason of any act, omission or other matter, cause or thing
whatsoever, in whatever capacity, from the beginning of the world
until the date hereof; and each of the Company Releasing Parties
hereby agrees that it shall not make any claim, demand or cause of
action that the Company should have settled the Payable Fees and
the Relinquished Fees for an amount less than the Payment, or
challenging the validity, legality, binding nature or
enforceability of the Company Release. Notwithstanding the
foregoing or any other provision of this Agreement, nothing in this
Agreement shall be deemed to constitute a release or discharge of
the Advisor from its obligations under this Agreement, the Advisory
Agreement, the Original Renewal Agreement, the Amended Advisory
Agreement, the Amended and Restated Renewal Agreement or the Merger
Agreement not specifically contemplated by the Company
Release.
5.
Release by the
Advisor . The Advisor, for
itself, each of its subsidiaries and Affiliates, successors and
assigns, and any of their respective past, present and future
employees, agents, representatives, attorneys, officers, directors,
stockholders and trustees (collectively the “ Advisor
Releasing Parties ”), does hereby fully, finally and
forever remise, release and discharge (the “ Advisor
Release ”) the Company, its subsidiaries and Affiliates,
successors and assigns, and of any of their respective past,
present, and future employees, agents, representatives, attorneys,
officers, directors, stockholders and trustees (collectively the
“ Advisor Released Parties ”), from any and all
Losses relating to, arising out of or in connection with any claim
that the Advisor was entitled, owed or had any rights with respect
to Payable Fees and Relinquished Fees for an amount in excess of
the Payment, whether at law, in equity or otherwise, whether
currently outstanding or arising subsequent hereto (including as a
result of newly enacted laws or
3
regulations), known or
unknown, contingent or absolute, suspected or unsuspected,
disclosed or undisclosed, hidden or concealed, disputed or
undisputed, liquidated or unliquidated, matured or unmatured and
whether or not accrued, and whether or not asserted or assertable
in law, equity or otherwise, for, upon or by reason of any act,
omission, negligence or other matter, cause or thing whatsoever
from the beginning of the world until the date hereof, which any of
the Advisor Releasing Parties ever had or may have had, now have,
or hereafter can, shall or may have against any of the Advisor
Released Parties for, upon or by reason of any act, omission or
other matter, cause or thing whatsoever, in whatever capacity, from
the beginning of the world until the date hereof; and each of the
Advisor Releasing Parties hereby agrees that it shall not make any
claim, demand or cause of action that the Advisor was entitled,
owed or had any rights with respect to Payable Fees and
Relinquished Fees for an amount in excess of the Payment, or
challenging the validity, legality, binding nature or
enforceability of the Advisor Release. Notwithstanding the
foregoing or any other provision of this Agreement, nothing in this
Agreement shall be deemed to constitute a release or discharge of
the Company from its obligations under this Agreement, the Advisory
Agreement, the Amended Advisory Agreement, the Amended and Restated
Renewal Agreement or the Merger Agreement not specifically
contemplated by the Advisor Release.
6.
Representations and
Warranties . Each of the Company
and the Advisor hereby represents and warrants to the other party
that:
(a)
it is a
corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation, with full
corporate power and authority to execute and deliver this
Agreement, perform its obligations hereunder and consummate the
transactions contemplated hereby;
(b)
The execution and
delivery of this Agreement by it, and the performance of its
obligations hereunder, have been duly and validly authorized by all
necessary corporate action, no other action on its part being
necessary. This Agreement has been duly and validly executed
and delivered by such party and constitutes the legal, valid and
binding obligation of such party, enforceable against such party in
accordance with its terms; and
(c)
Neither the
execution and delivery of this Agreement, nor the consummation of
the transactions contemplated hereby, will (i) conflict with,
or r
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