Document:

Exhibit 10.126

    
      

    

    RENEWAL
      AGREEMENT

     

     

    THIS
      RENEWAL AGREEMENT, dated
      as
      of March 30, 2006, is 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”). (Each a “Party,” and collectively the
“Parties”).

     

    R
      E C I T A L S:

     

    WHEREAS,
      the
      Parties entered into that certain Advisory Agreement dated as of April 1, 2004
      (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
      Parties entered into that certain Renewal Agreement, dated as of March 31,
      2005
      (the “2005 Renewal Agreement”), pursuant to which, among other things, the
      Advisory Agreement was amended and renewed for an additional one-year term;
      and

    

    WHEREAS,
      beginning on June 30, 2005, the Parties entered into successive amendments
      to
      the 2005 Renewal Agreement (collectively with the 2005 Renewal Agreement, the
      “Amended 2005 Renewal Agreement”); and

     

    WHEREAS,
      on
      December 30, 2005, the Parties entered into an Amended and Restated Renewal
      Agreement (the “Amended and Restated Renewal Agreement”), which amended and
      restated the Amended 2005 Renewal Agreement and amended the Advisory Agreement
      (as so amended, the “Amended Advisory Agreement”); and

     

    WHEREAS,
      on
      December 30, 2005, the Parties entered into the Payment Agreement (the “Payment
      Agreement”), which provides for, among other things, an acknowledgement and
      agreement of the Advisor to irrevocably waive the right to payment of all
      Acquisition Fees and Asset Management Fees (each as defined in 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

     

    WHEREAS,
      the
      Amended Advisory Agreement will terminate on March 31, 2006, unless renewed
      by
      the mutual consent of the Parties; and

     

    WHEREAS,
      all
      of
      the Directors of the Company have evaluated the Advisor’s performance during the
      prior year and are willing to enter into this Agreement; and

     

    WHEREAS,
      the
      Parties desire to renew the Amended Advisory Agreement for an additional
      three-month term upon the terms and conditions set forth herein.

     

    NOW,
      THEREFORE, in
      consideration of the foregoing and of the mutual covenants and agreements
      contained herein, the Parties agree as follows:

     

    1. The
      Amended Advisory Agreement is renewed for an additional three-month term
      commencing on April 1, 2006, and terminating on June 30, 2006.

     

    2. Except
      as
      amended above, the Amended Advisory Agreement shall remain in full force and
      effect. 

     

    3. The
      Payment Agreement shall remain in full force and effect, including, without
      limitation, with respect to the Relinquished Fees.

     

    4. This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original and all of which, together, shall constitute a single
      instrument.

     

    

     

    

     

    SIGNATURE
      PAGES APPEAR ON THE FOLLOWING PAGE

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      Parties have duly executed this Agreement as of the date and year first above
      written. 

    

    
      	 	
              CNL
                HOTELS & RESORTS, INC. 

              (f/k/a
                CNL Hospitality Properties, Inc.)

               

              By: /s/
                C. Brian
                Strickland                                                         
                  

              Name:
                C.
                Brian Strickland  

              Its:
                Executive
                Vice President and Chief Financial Officer

            
	 	 
	 	
              CNL
                HOSPITALITY CORP.

               

              By:/s/
                James M. Seneff, Jr.                                                         

              Name:
                James
                M. Seneff, Jr.

              Its:
                ChairmanExhibit 10.127

    
      
        

      

     

    United
      States District Court

    Middle
      District of Florida

    Orlando
      Division

    

    
      	
               

              In
                Re

              CNL
                HOTELS & RESORTS, INC.

              Securities
                Litigation

            	
               

              Case
                No. 6:04-cv-1231-Orl-31KRS

              (Consolidated
                with 6:04-cv-1341-Orl-19JGG)

               

              CLASS
                ACTION

               

            

    

    

    MEMORANDUM
      OF UNDERSTANDING (“Memorandum”)

    

    Except
      as
      expressly provided herein, this Memorandum, subject to the conditions set forth
      herein, outlines the general terms of an agreement in principle for the
      settlement in the above-captioned action (the “Action”) of all Settled Claims
      (as defined below in ¶17) on the terms set forth below (the “Settlement”).
      Paragraphs 14, 25, and 29 are intended to be binding on the parties upon
      execution hereof. This Memorandum (other than ¶¶ 14, 25, and 29) is intended to
      become binding and will become enforceable only upon receipt by counsel of
      written notice to each other that all approvals expressly set forth in ¶ 27
      below have been obtained or waived, as applicable (“Approvals”). Upon receipt of
      the Approvals, the Parties (as defined below in ¶¶ 1-2) intend for the
      Settlement to be documented by a Stipulation and Agreement of Settlement and
      accompanying papers (the “Stipulation”) that shall embody the terms set forth
      herein and such other and consistent terms as are agreed upon by the
      Parties.

    A. Identity
      of Parties to this Memorandum

    1. The
      Parties to this Memorandum are:

    
      	a)  	
              Mary
                M. Campbell, Macomb County Employees’ Retirement System, Elizabeth Hawkins
                Barack Revocable Living Trust, Raymond Roberts, Victor Libov, Edwin
                Wong,
                (collectively “the Named
                Plaintiffs”);

            

    

     

    
      	b)  	
              The
                Class, as defined below in ¶¶3-4;

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	c)  	
              CNL
                Hotels & Resorts Inc., formerly known as CNL Hospitality Properties,
                Inc., and its subsidiaries (whether corporations, limited liability
                companies or partnerships) and operating partnerships (“CHR” or the
                “REIT”);

            

    

     

    
      	d)  	
              CNL
                Hospitality Corp. on its behalf and on behalf of its affiliates (the
                “Advisor”);

            

    

     

    
      	e)  	
              CNL
                Securities Corp.;

            

    

     

    
      	f)  	
              James
                M. Seneff, Jr.;

            

    

     

    
      	g)  	
              Robert
                A. Bourne;

            

    

     

    
      	h)  	
              Thomas
                J. Hutchison III;

            

    

     

    
      	i)  	
              John
                A. Griswold;

            

    

     

    
      	j)  	
              Charles
                E. Adams;

            

    

     

    
      	k)  	
              Lawrence
                A. Dustin;

            

    

     

    
      	l)  	
              Craig
                M. McAllaster; and

            

    

     

    
      	m)  	
              Robert
                E. Parsons, Jr.

            

    

     

    2. Parties
      listed in c - m are collectively referred to as “Settling Defendants.” Parties
      listed in f - m are also sometimes referred to as “Individual Settling
      Defendants.”

    B. Class

    3. The
      Class, which shall be certified by stipulation for purposes of this Settlement
      only, shall be defined as follows:

    
      	(a)  	
              pursuant
                to Fed. R. Civ. P. 23(a) and (b)(3), a class of all persons who purchased
                or otherwise acquired CHR securities issued or offered pursuant to
                or by
                means of CHR’s registration statements and/or prospectuses between August
                16, 2001 and August 16, 2004, inclusive (the “Purchaser Class”);
                and

            

    

     

    
      	(b)  	
              pursuant
                to Fed. R. Civ. P. 23(a) and (b)(2), a class of all persons who were
                entitled to vote on the proposals presented in the proxy statement
                filed
                with the SEC by CHR, dated June 21, 2004, as amended or supplemented
                by
                the additional proxy solicitation materials filed on July 7, July
                8, and
                July 20, 2004 (the “Proxy Class”); 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    collectively
      referred to herein as the “Class.”

     

    4. Excluded
      from the Class are Settling Defendants, the officers and directors of Settling
      Defendants, at all relevant times, members of each Individual Settling
      Defendants’ immediate family, any entity in which any Settling Defendant has a
      controlling interest, and the legal affiliates, representatives, heirs,
      controlling persons, successors and predecessors in interest or assigns of
      any
      such excluded party.

    C. Description
      of Settlement Terms

    6.  This
      Settlement will settle and release all Settled Claims (as defined in ¶17
      below).

    7.  The
      Settlement will be contingent upon (a) the dismissal with prejudice of the
      Action as against each and all of the Settling Defendants, and (b) the entry
      of
      an order and final judgment by the Court finally approving the Settlement in
      accordance with Fed. R. Civ. P. 23, and the expiration of all periods during
      which an appeal or request for review from that order and final judgment may
      be
      taken, and the final disposition of any such appeal or review (“Final
      Approval”).

    8.  The
      Settling Defendants have denied and continue to deny that they have committed
      any act or omission giving rise to any liability and/or violation of law, and
      the complaint does not assert claims of fraud, deliberate dishonesty, or
      malicious or willful act, omission, or violation of law against the Settling
      Defendants, but in consideration of the covenants and mutual promises herein
      and
      to be provided for in the Stipulation, and in full, complete, and irrevocable
      satisfaction, dismissal with prejudice, and settlement of the Action and of
      all
      released claims all as provided herein, the settlement consideration and
      benefits shall consist of the following:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a) Settling
      Defendants will acknowledge that the Action was a material factor that was
      taken
      into account in connection with the revised terms contained in the
      December 5, 2005 amended merger term sheet, and the terms of the December
      8, 2005 advisory fees term sheet.

    (b) In
      connection with Purchaser Class claims asserted pursuant to Sections 11 and
      15
      of the 1933 Securities Act, CHR will pay, or cause to be paid, in settlement
      of
      the Settled Claims, the following amounts (the “Settlement Fund”), to be
      deposited into an interest-bearing account at [to be designated by Co-Lead
      Counsel in the Stipulation] Bank (“Settlement Fund Account”):

    i.
      “2006
      Cash Consideration:”
At
      a
      date of the REIT’s choosing, which shall be no later than January 15, 2007, the
      gross aggregate sum of $3,700,000;

    ii.
      “2007
      Cash Consideration:”
At
      a
      date of the REIT’s choosing, which shall be no later than January 15, 2008, the
      gross aggregate sum of $15,650,000; and

    iii
      “2008
      Cash Consideration:”
At
      a
      date of the REIT’s choosing, which shall be no later than January 15, 2009, the
      gross aggregate sum of $15,650,000.

    The
      amounts due hereunder shall be evidenced by a non-interest bearing, unsecured
      Note from CHR, which will provide for, among other things, acceleration of
      and
      the payment of interest on the unpaid amounts in the event of a failure to
      pay
      any sum when due. No part of the Settlement Fund shall constitute, be deemed
      or
      construed to represent, disgorgement, including, without limitation, of any
      remuneration or any ill-gotten gains allegedly received by Settling
      Defendants.

    9.  The
      Settlement Fund Account is intended to be an interest bearing, escrow account
      for the purposes set forth in this Memorandum. Any interest shall accrue to
      the
      benefit of the Settlement and the Settlement Fund, and all principal and
      interest will be subject to allocation among the Purchaser Class members and
      counsel entitled to participate in the Settlement upon Final
      Approval.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    10.  All
      releases or withdrawals of funds from the Settlement Fund Account shall be
      in
      accordance with a Court order. The Parties agree that the Settlement Fund is
      intended to be a “Qualified Settlement Fund” within the meaning of Treasury
      Regulation § 1.468B-1, and thus any tax liability on interest accruing on the
      Settlement Fund Amount shall be the sole and exclusive responsibility of the
      Settlement Fund. Co-Lead Counsel shall administer the Settlement Fund Account.
      Any tax liability on payments made from the Settlement Fund, including, but
      not
      limited to, payments to any Named Plaintiff, member of the Class, Claims
      Administrator, or Plaintiffs’ Counsel, shall be the sole and exclusive
      responsibility of the recipient of such payment. Under no circumstances shall
      Settling Defendants be responsible for any income, transfer, intangible or
      other
      tax, levy, governmental charge or fee incurred, payable or accrued in connection
      with the payment of monies into or from the Settlement Fund Account or the
      payment of fees to plaintiffs’ counsel.

    11.  All
      costs
      and expenses relating to class notice(s), administration of the Settlement
      and
      the Settlement Fund Account shall be paid exclusively from, and shall be the
      sole responsibility of, the Settlement Fund Account when incurred. Within 5
      business days of obtaining preliminary approval of the Stipulation from the
      Court, the Settling Defendants will pay an amount not to exceed $250,000 into
      the Settlement Fund, as an advance on the amounts payable under Paragraph 21
      herein, to be used solely to cover costs and expenses relating to the printing,
      publication and mailing of class notice. Such
      payment shall be on a non-recourse basis so that Co-Lead Counsel, Named
      Plaintiffs and the Class shall have no responsibility to reimburse such expended
      amounts in the
      event
      the Settlement does
      not
      receive Final Approval.
      The
      Settling Defendants shall have no responsibility or liability for (a) the
      administration of the Settlement Fund or the Settlement Fund Account, (b) any
      dispute relating to any allocation or disbursement of the Settlement Fund or
      Settlement Fund Account, or (c) any costs, expenses, or obligations associated
      with the Settlement Fund or Settlement Fund Account. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    12.  As
      part
      of the Settlement of this Action, CHR’s Board of Directors, or a committee
      thereof, shall pass a resolution(s), no later than the date on which the Parties
      apply to the Court for preliminary approval of the Settlement, adopting the
      following corporate governance policies, to become effective and implemented
      upon Final Approval:

    a.  Consideration
      of Liquidation.
      Any
      proposal by the REIT to its shareholders to approve a Charter amendment to
      extend the date specified in its Charter by which it must commence an orderly
      liquidation shall first be reviewed and approved by a committee consisting
      solely of at least three (3) of the REIT’s independent directors (as defined by
      applicable SEC Rule), which committee shall retain an advisor of its choosing
      to
      assist such committee in the evaluation of such a proposal. A copy of any final
      evaluation by the advisor presented to the committee shall be made available
      to
      Co-Lead Counsel for inspection on a confidential basis. Co-Lead counsel shall
      not retain any copy of such evaluation. Co-Lead Counsel’s reasonable comments to
      such evaluation will be taken into consideration by such committee in its sole
      discretion. This “Consideration of Liquidation” mechanism shall remain in place
      only until June 1, 2008, unless CHR violates the Charter provision relating
      to
      the commencement of orderly liquidation by 12/31/07.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    b.  Related-Party
      Transaction Committee. CHR
      shall
      maintain a committee to consider all transactions with management and others
      that are reportable under Item 404 of Regulation S-K by the REIT. The committee
      shall consist solely of directors who do not have a financial interest in the
      transaction being considered. The committee shall be authorized to retain such
      advisor and counsel of its choice as it deems appropriate. Such committee and
      its advisors/counsel shall review and, in its discretion, provide comments
      on
      the contents and wording of any disclosure to shareholders and in any SEC filing
      with respect to any Related-Party Transaction. The “Related Party Transaction
      Committee” shall be maintained only until the earlier of June 1, 2008 or listing
      on a national securities exchange. 

    D. Post-MOU
      Activities of Co-Lead Counsel

    13.  Upon
      execution of this Memorandum and in a way that maintains appropriate
      confidentiality, the Parties shall advise the Court of this Memorandum and
      shall
      seek a stay of all pending motions pending Final Approval or termination of
      the
      Settlement.

    14.  Confirmatory
      Discovery. Due to the settlement of the Action before formal substantive
      discovery in the Action commenced and in order for plaintiffs’ counsel to
      fulfill their duty to the Class, immediately upon execution of this Memorandum,
      counsel for the Settling Defendants shall start to provide counsel for
      plaintiffs with hard-copy and electronic materials relating to the allegations
      in the Action for confirmatory discovery, including, but not limited to: (a)
      Special Committee minutes relating to the December 5, 2005 amended merger term
      sheet, (b) minutes of the meetings of the Independent Directors of CHR relating
      to the terms of the December 8, 2005 advisory fees term sheet, (c) the Desert
      Ridge and Waikiki joint ventures, (d)
      credit enhancements, (e) FF&E, and (f) distributions. Plaintiffs counsel
      shall use their best efforts (subject to the prompt cooperation of Defendants’
counsel in responding to Plaintiffs’ document requests) to complete the first
      phase of confirmatory discovery that is necessary in order to provide counsel
      for Settling Defendants by March 5, 2006 with the Approval referred to in
      Paragraph 27(a) hereof (“Confirmatory Discovery”). The completion of
      Confirmatory Discovery and giving of the Approval in Par. 27(a) shall not
      prevent or prejudice Plaintiffs’ counsel from requesting, receiving and
      completing additional reasonable discovery that is necessary to complete the
      record in this Action, to facilitate the preparation of the Plan of Allocation,
      and to submit a comprehensive brief in support of the Settlement.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    15.  Upon
      execution of any revised/amended Advisor Merger Agreement in accordance with
      the
      December 5, 2005 amended merger term sheet, Settling Defendants intend to seek
      prompt approval by CHR’s shareholders. Co-Lead Counsel1
      will be
      given a reasonable opportunity to review all proxy solicitation materials for
      the purposes of, among other things, compliance with applicable laws, and any
      reasonable comments by them will be taken under consideration in CHR’s sole
      discretion. Subject to such review and input, Co-Lead Counsel and Named
      Plaintiffs agree that they will fully support shareholder approval of the merger
      of the Advisor into the REIT and the related Charter amendments as being fair
      and reasonable, and in the best interests of the REIT and its
      shareholders.

    16.  Upon
      obtaining all Approvals, the Parties and their counsel shall use their best
      efforts to finalize and execute the Stipulation and such other documentation
      as
      may be required or appropriate in order to present the Settlement to the Court
      for approval. After execution of the Stipulation (which the Parties will target
      for 7 days after the Approvals are obtained), the Parties promptly shall apply
      to the Court for preliminary approval of the Settlement and for the scheduling
      of a hearing for consideration of Final Approval of the Settlement. The Parties
      will target a preliminary approval hearing to occur March 15, 2006, subject
      to
      the Court’s schedule. The Parties shall use their best efforts to obtain both
      preliminary approval and Final Approval of the Settlement expeditiously.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    E. Scope
      of Release

    17.  “Settled
      Claims” shall include any statutory, regulatory, equitable, legal, common-law or
      other claims, causes of action, suits, liabilities, obligations, expenses,
      costs, penalties, damages, demands, and/or any other remedies of any nature
      whatsoever, under federal, state, local or any other law (including Unknown
      Claims2
      and
      including, without limitation, claims within the exclusive jurisdiction of
      the
      federal courts), whether legal or equitable, known or unknown, whether or not
      matured, accrued, or ripe, that are based upon or related to, or arise out
      of,
      in whole or in part, (a) the facts, transactions, events, occurrences, acts,
      disclosures, statements, omissions or failures to act that were alleged or
      could
      have been alleged in the Action, or (b) any count or allegation contained in
      any
      complaint in the Action, through the date of Final Approval of the Settlement
      by
      the Court by any Named Plaintiff or the Class against each and all of the
      Released Persons.

    18.  “Released
      Persons” shall include the Settling Defendants, any previously named defendants,
      any of their affiliates, including without limitation, limited liability
      companies, partnerships and corporations (including those that are
      minority-owned ) (collectively, “Affiliates”), their predecessors and
      successors, and any person or entity that could have been named by the
      plaintiffs and their respective officers, directors, managers, partners,
      employees, agents, consultants, advisors, or representatives.
__________________________________________________________________________________________________________________________

    
      
        
          1  “Co-Lead
            Counsel” means: The law firms of Chimicles & Tikellis LLP; Labaton Sucharow
& Rudoff LLP; and Wolf Haldenstein Adler Freeman and Herz LLP.

          2 “Unknown
            Claims” means any Settled Claim that any Named Plaintiff or the Class does not
            know or suspect to exist in his, her, or its favor at the time of the
            release of
            the Released Persons which, if known by him, her, or it, might have affected
            his, her, or its settlement with and release of the Released Persons,
            or might
            have affected his, her, or its decision not to object to this
            settlement.

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    19.  Upon
      Final Approval, the Named Plaintiffs and the Class shall dismiss the Action
      with
      prejudice as against the Settling Defendants and shall definitively and
      irrevocably release all Settled Claims against the Released
      Persons.

    F. Plan
      of Allocation

    20.  Co-Lead
      Counsel shall develop a Plan of Allocation after Confirmatory Discovery is
      completed. 

    G. Co-Lead
      Counsel’s Fees and Expenses

     

    21.  Co-Lead
      Counsel will seek a fee and a portion of reimbursable expenses with respect
      to
      the Proxy Class and derivative claims in the amount of $5.5 million (and no
      more) on account of the benefits conferred by virtue of the Settlement and
      the
      Action, in particular the benefits resulting from, without limitation, the
      modifications to the advisor fees, merger terms, and the provisions herein
      relating to corporate governance. Settling Defendants agree not to oppose such
      fee application in an amount not to exceed $5.5 million. Such fee shall be
      conditioned upon the entry of an order approving such fee application, and
      shall
      be paid by CHR to Chimicles & Tikellis LLP (on behalf of all Plaintiffs’
counsel) upon Final Approval.

    22.  Co-Lead
      Counsel will also seek a fee with respect to the Purchaser Class equal to 25%
      of
      all amounts paid into and earned by the Settlement Fund Account, and reasonable
      reimbursable expenses, which Settling Defendants will not oppose. Such fee
      and
      expenses shall be conditioned upon the entry of an order approving such fee
      and
      expense application, and payable solely out of the Settlement Fund in accordance
      with the Court’s order(s).

    23.  The
      failure of the Court to approve the fee applications set forth in ¶¶ 21 and 22
      above shall not relieve the Parties of their respective obligations under this
      Memorandum. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    H. Miscellaneous

     

    
      	24.  	
               The
                Stipulation shall provide (among other terms)
                that:

            

    

    
      	a.  	
              the
                Parties jointly request the Court to order preliminary approval of
                the
                Stipulation and direct that notice of the Settlement be
                provided;

            

    

    
      	b.  	
              the
                consideration shall be provided as described herein, but such
                consideration, including fees paid to plaintiffs’ counsel, shall not be
                deemed or construed to represent disgorgement, including, without
                limitation, of any remuneration or any ill-gotten
                gains;

            

    

    
      	c.  	
              the
                Settling Defendants have denied and continue to deny that they have
                committed any act or omission giving rise to any liability and/or
                violation of law or any act of negligence or misconduct, and state
                that
                they are entering into the Settlement to eliminate the burden and
                expense
                of further litigation;

            

    

    
      	d.  	
              neither
                the Settlement nor any of its terms shall constitute an admission
                or
                finding of negligence or wrongful conduct, acts or omissions by any
                Released Person;

            

    

    
      	e.  	
              the
                allocation of the Settlement Fund among the members of the Class
                shall be
                subject to a Plan of Allocation to be proposed by Co-Lead Counsel
                subject
                to approval of the Court; and

            

    

    
      	f.  	
              except
                as otherwise provided herein, the Settling Defendants will take no
                position with respect to such proposed Plan of Allocation, the Plan
                of
                Allocation being a matter separate and apart from the proposed settlement
                between the Parties, and accordingly, any decision by the Court concerning
                the Plan of Allocation shall not affect the validity or finality
                of the
                Settlement, and the Released Persons shall have no liability with
                respect
                to any claim arising out of the Plan of
                Allocation.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    25.  If
      this
      Memorandum and the Stipulation are voided or terminated as set forth in this
      paragraph subsections (a), (b), and (c), paragraphs 25 and 29, which set forth
      the terms that provide the Parties’ obligations in the event that the Settlement
      is not approved or is terminated, will remain enforceable, and this Memorandum
      and the Stipulation may be admissible solely to enforce those paragraphs. 
In addition, in respect to the application of the Non-Disclosure Agreement,
      and
      in particular Paragraph 3 thereof, Defendants and their Counsel agree that
      to
      the extent Plaintiffs and their counsel receive any material in Confirmatory
      Discovery that would not or could not have been made available to them
      otherwise, Defendants and their counsel shall only seek to have those materials
      returned and not used in the litigation of the Action, and will not seek to
      disqualify or interfere with the named Plaintiffs’ or their counsel’s role in
      the Action. 

    
      	a.  	
              If
                the Settlement outlined in this Memorandum is not approved by the
                Court
                (other than with respect to any decision by the Court concerning
                attorneys’ fees applications as set forth in Paragraphs 21 and 22 of this
                Memorandum, and with respect to any decision by the Court concerning
                the
                Plan of Allocation as set forth in Paragraph 24.f.), this Memorandum
                and
                the Stipulation shall be a nullity, and none of its terms shall be
                effective or enforceable, and the Parties shall revert to their litigation
                positions immediately prior to the execution of this Memorandum,
                and the
                fact and terms of the Settlement shall not be admissible in any trial
                against the Settling Defendants or otherwise used against the Released
                Persons in any action, and this Memorandum, the material produced
                in
                Confirmatory Discovery, and the Settlement shall be subject to the
                Non-Disclosure Agreement executed by counsel for plaintiffs, dated
                December 7, 2005.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	b.  	
              If
                the Court approves the Settlement with any material changes or
                modifications (other than with respect to any decision by the Court
                concerning attorneys’ fees applications as set forth in Paragraphs 21 and
                22 of this Memorandum, and with respect to any decision by the Court
                concerning the Plan of Allocation as set forth in Paragraph 24.f.),
                this
                Memorandum and the Stipulation shall be voidable at the option of
                the
                adversely affected Party(ies) within five (5) business days of the
                Court’s
                ruling or statement containing such material change or modification. 
                If the adversely affected Party(ies) elect to void this Memorandum
                and the
                Stipulation, then this Memorandum and the Stipulation shall be a
                nullity,
                and none of its terms shall be effective or enforceable, and the
                Parties
                shall revert to their litigation positions immediately prior to the
                execution of this Memorandum, and the fact and terms of the Settlement
                shall not be admissible in any trial against the Settling Defendants
                or
                otherwise used against the Released Persons in any action, and this
                Memorandum, the material produced in Confirmatory Discovery, and
                the
                Settlement shall be subject to the Non-Disclosure Agreement executed
                by
                counsel for plaintiffs, dated December 7,
                2005.

            

    

    
      	c.  	
              As
                will be set forth in a side letter agreement among the Parties (and
                not in
                the Stipulation unless the opt out agreement must be disclosed under
                applicable law or rule in the settlement notice to shareholders),
                if
                shareholders representing more than 5% of the shares of the Purchaser
                Class (and Proxy Class, if applicable) opt out of the Class, the
                REIT
                shall have the option to terminate the Settlement, and this Memorandum
                and
                the Stipulation shall be a nullity, and none of its terms shall be
                effective or enforceable, and the Parties shall revert to their litigation
                positions immediately prior to the execution of this Memorandum,
                and the
                fact and terms of the Settlement shall not be admissible in any trial
                against the Settling Defendants or otherwise used against the Released
                Persons in any action, and this Memorandum, the materials produced
                in
                Confirmatory Discovery, and the Settlement shall be subject to the
                Non-Disclosure Agreement executed by counsel for plaintiffs, dated
                December 7, 2005;, and provided however, if the 5% opt out threshold
                is
                exceeded, Plaintiffs’ Counsel shall be afforded a ten-day period to
                solicit and receive irrevocable withdrawals or retractions of opt-outs
                so
                as to bring the number of opt-outs below 5%, in which event the provisions
                of this subparagraph 25(c), and in particular the REIT’s option to
                terminate the Agreement, shall not be
                applicable.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    26.  This
      Memorandum may be executed by counsel in counterparts, including by signature
      transmitted by facsimile. Each counterpart when so executed shall be deemed
      to
      be an original, and all such counterparts together shall constitute the same
      instrument. References in this Memorandum to “herein”, “hereunder” and similar
      terms shall refer to this Memorandum as a whole.

    27.  This
      Memorandum, executed by counsel, shall become binding and enforceable against
      the Parties only upon the later of: (a) receipt by counsel for the Settling
      Defendants of notice that Co-Lead Counsel have completed Confirmatory Discovery
      to their satisfaction (as described in ¶14 above), and (b) receipt by Co-Lead
      Counsel of notice that the REIT has approved the Settlement, which requires
      appropriate action by the REIT’s Special Litigation Committee and/or the Board
      of Directors or committee thereof, and (c) the Directors and Officers insurance
      carriers for CHR have given written consent to the Settlement (as provided
      for
      in the policies) or waived any such obligation of the REIT to obtain such
      written consent (“D&O Consent”) within 30 days of the date of this
      Memorandum. The condition to obtain D&O Consent or waiver of the obligation
      to obtain D& O Consent is not intended to convey or create any third party
      beneficiary rights and may be waived by the REIT in its sole and absolute
      discretion. 

    28.  The
      terms
      of this Memorandum, to the extent binding, shall inure to and be binding upon
      the Parties and their successors in interest.

    29.  Except
      as
      agreed to by the Parties or otherwise required by applicable law, no Party
      (including their counsel) shall disclose the fact and terms of this Memorandum
      (which are intended to be confidential) until the execution of the Stipulation
      of Settlement, except that the fact and terms of this Memorandum may be shared
      with representatives of the Directors and Officers insurance carriers (old,
      current and new) for CHR.

    IT
      IS
      HEREBY AGREED by the undersigned as of February 6, 2006.

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    
      	 	
               

               

              By:
                /s/ Nicholas E.
                Chimicles                                      

              Nicholas
                E. Chimicles

              Kimberly
                M. Donaldson 

              CHIMICLES
                & TIKELLIS LLP

              One
                Haverford Centre

              361
                W. Lancaster Avenue

              Haverford,
                PA 19041

              Telephone:
                (610) 642-8500

              Facsimile:
                (610) 649-3633 

               

              Lead
                Litigation Counsel and Co-Lead Counsel for the Lead Plaintiffs; Counsel
                for Plaintiffs Raymond Roberts, Victor Libov and Edwin
                Wong.

            
	 	
               

               

              By:
                /s/ Lawrence A.
                Sucharow                                       
                

              Lawrence
                A. Sucharow

              Beth
                Hoffman

              LABATON
                SUCHAROW & RUDOFF LLP 

              100
                Park Avenue

              New
                York, NY 10017

              Telephone:
                (212) 907-0700 

               

              Co-Lead
                Counsel for Macomb County Employees’ Retirement System
                

            
	 	
               

               

              By:
                /s/ Lawrence P.
                Kolker                                              
                

              Lawrence
                P. Kolker

              Aya
                Bouchedid

              WOLF
                HALDENSTEIN ADLER 

              FREEMAN
                & HERZ LLP 

              270
                Madison Avenue

              New
                York, New York 10016

              Telephone:
                (212) 545-4600

               

              Co-Lead
                Counsel for Elizabeth Hawkins Barack Revocable Living
                Trust

            
	 	 
	
               

               

            	 
	 	
              By:
                /s/ David
                King                                               
                

              David
                King, Esquire

              Tom
                Zehnder, Esquire

              King,
                Blackwell & Downs, P.A.

              25
                East Pine Street

              Orlando,
                FL 32801 

              Counsel
                for CNL Hotels & Resorts, Inc. - f/k/a CNL Hospitality Properties,
                Inc., Thomas J. Hutchison, John A.
                Griswold

            
	 	
               

               

               

              By:
                /s/ Toby S.
                Soli                                               
                

              Kenneth
                A. Lapatine, Esquire

              Mark
                Budoff, Esquire

              Toby
                S. Soli, Esquire

              Greenberg
                Traurig, LLP

              885
                3rd Avenue, 21st Floor

              New
                York, NY 10022 

              Counsel
                for CNL Hotels & Resorts, Inc. - f/k/a CNL Hospitality Properties,
                Inc., Thomas J. Hutchison, John A.
                Griswold

            
	 	
               

               

              By:
                /s/ T. Todd
                Pittenger                                     

              T.
                Todd Pittenger, Esquire

              Terry
                C. Young, Esquire

              Lowndes
                Drosdick Doster Kantor

              &
                Reed, P.A.

              215
                North Eola Drive

              Orlando,
                FL 32801

              Counsel
                for James M. Seneff, Robert A. Bourne, 

              CNL
                Hospitality Corp.

            
	 	
               

               

               

              By:
                /s/ Scott B.
                Schreiber                                       
                

              Scott
                B. Schreiber, Esquire

              John
                C. Massaro, Esquire

              Justin
                Antonipillai, Esquire

              Arnold
                & Porter, LLP

              555
                Twelfth Street, NW

              Washington,
                DC 20004-1206

              Counsel
                for James M. Seneff, Robert A. Bourne, 

              CNL
                Hospitality Corp.

            
	 	
               

               

               

               

               

              By:
                /s/ Darryl
                Bloodworth                                             

              Darryl
                Bloodworth, Esquire

              Nichole
                M. Mooney, Esquire

              Dean
                Mead, Egerton, Bloodworth, Capouano

              &
                Bozarth, P.A.

              800
                N. Magnolia Avenue, Suite 1500

              Orlando,
                FL 32801

              Counsel
                for Charles E. Adams, Lawrence A. Dustin, Craig M. McAllaster, Robert
                E.
                Parsons, Jr.

            
	 	
               

               

               

               

              By:
                /s/ Joseph
                Hassett                                                     
                

              Joseph
                Hassett, Esquire

              Hogan
                & Hartson, LLP

              555
                Thirteenth Street, NW

              Washington,
                DC 20004

              Counsel
                for Charles E. Adams, Lawrence A. Dustin, Craig M. McAllaster, Robert
                E.
                Parsons, Jr.

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