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Exhibit 10.4
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CONTRIBUTION AGREEMENT
DATED AS OF JANUARY 15, 1997
BY AND AMONG
SLT REALTY LIMITED PARTNERSHIP
SLT FINANCING PARTNERSHIP
SLC OPERATING LIMITED PARTNERSHIP
STARWOOD LODGING TRUST
STARWOOD LODGING CORPORATION
AND THE INDIVIDUALS AND ENTITIES SET FORTH ON
SCHEDULES A-1 AND 1-2 HERETO
WHO ARE SIGNATORIES TO THIS AGREEMENT
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS
1.01 Property.....................................................2
1.02 Certain Other Definitions....................................3
ARTICLE II CONTRIBUTION; CONSIDERATION; DEPOSIT
2.01 Agreement to Contribute.....................................11
2.02 Reserved....................................................12
2.03 Consideration for Contribution..............................12
2.04 [Reserved]..................................................12
2.05 Deposit.....................................................12
ARTICLE III TITLE
3.01 Title to Property...........................................13
ARTICLE IV NET WORKING CAPITAL ADJUSTMENT
4.01 Net Working Capital Adjustment..............................15
(a) Estimated Closing Balance Sheet....................15
(b) Adjustment.........................................15
(c) Final Closing Balance Sheet........................16
(d) Independent Auditor................................16
(e) Final Adjustment...................................17
4.02 Errors......................................................17
ARTICLE V [Reserved]
ARTICLE VI RISK OF LOSS
6.01 Risk of Loss................................................18
6.02 Casualty....................................................18
6.03 Eminent Domain..............................................18
6.04 Elections Upon Casualty or Eminent Domain...................18
(a) Minor Loss.........................................18
(b) Substantial Loss...................................18
(c) Major Casualty Damage..............................19
6.05 Adjustment Amount...........................................19
ARTICLE VII REPRESENTATIONS AND WARRANTIES
7.01 Contributing Party's Representation and Warranties..........20
(a) Subsidiaries and Investments.......................20
(b) Property Company Capitalization; Title to Property
Company Interests .................................20
(c) Tax Matters........................................21
(d) Insurance..........................................23
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(e) Single-Purpose Entity..............................23
(f) Leases.............................................23
(g) Compliance With Laws...............................23
(h) Contracts..........................................24
(i) Employees..........................................24
(j) No Pending Condemnation Proceedings................24
(k) Real Estate Taxes..................................24
(l) No Other Interests.................................24
(m) No Litigation......................................24
(n) No Further Action; Execution and Delivery..........24
(o) Good Standing......................................25
(p) Proprietary Rights.................................25
(q) Financial Statements...............................25
(r) Events Subsequent to November 28, 1996.............25
(s) Absence of Undisclosed Liabilities.................26
(t) No "Foreign Person"................................26
(u) Environmental Matters - No Violations..............26
(v) Environmental Matters - Environmental Claims.......27
(w) [Reserved].........................................27
(x) Investment Representation..........................27
(y) Binding Effect.....................................28
(z) Status of Constituent Documents....................28
7.02 The Partnerships' Representations and Warranties............28
(a) Power and Authority Non-contravention, Investment..28
(b) Good Standing......................................29
(c) Binding Effect.....................................29
(d) Status of the Constituent Documents................29
(e) No Litigation; Proceedings.........................29
(f) Units..............................................29
(g) Financial Statements; Undisclosed Liabilities......30
(h) Conduct in the Ordinary Course of Business.........30
(i) ERISA Matters......................................30
7.03 The Corporation's Representation and Warranties.............31
(a) Power and Authority, Non-contravention.............31
(b) Good Standing......................................31
(c) Binding Effect.....................................31
(d) Status of the Constituent Documents................31
(e) No Litigation; Proceedings.........................31
(f) Capitalization.....................................31
(g) Financial Statements; Undisclosed Liabilities......32
(h) Conduct in the Ordinary Course of Business.........32
(i) SEC Documents......................................32
(j) Reservation of Shares..............................32
(k) ERISA Matters......................................33
7.04 The Trust's Representations and Warranties..................33
(a) Power and Authority, Non-contravention.............33
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(b) Good Standing......................................33
(c) Binding Effect.....................................33
(d) Status of the Constituent Documents................33
(e) No Litigation; Proceedings.........................34
(f) Capitalization.....................................34
(g) Financial Statements; Undisclosed Liabilities......34
(h) Conduct in the Ordinary Course of Business.........34
(i) SEC Documents......................................35
(j) Reservation of Shares..............................35
(k) ERISA Matters......................................35
ARTICLE VIII CONDITIONS
8.01 Conditions to the Partnerships' Obligations.................35
(a) Exchange Rights Agreement..........................35
(b) HEI Contribution...................................35
(c) No Material Misrepresentation etc..................36
(d) Title to Property..................................36
(e) Contributing Parties' Proceedings..................36
(f) Contributing Party's Performance, Consents.........36
(g) Licenses...........................................37
(h) Franchise License Agreements.......................37
(i) Notices............................................37
(j) ERISA Limitations..................................37
8.02 Conditions to Contributing Party's Obligations..............37
(a) The Starwood Parties' Proceedings..................38
(b) The Starwood Parties' Performance..................38
(c) No Material Misrepresentation etc..................38
(d) Exchange Rights Agreement..........................38
(e) Registration Rights Agreement......................38
(f) [Reserved].........................................38
(g) HEI Contribution...................................38
(h) [Reserved].........................................38
(i) Partnership Amendments.............................38
(j) ERISA Limitations..................................39
ARTICLE IX DOCUMENTS
9.01 The Contributing Parties' Closing Deliveries................40
(a) Assignment of Property Company Interests...........40
(b) Confirmation of Distribution of Contributed Assets.40
(c) Bills of Sale and General Assignment...............40
(d) Affidavits Regarding Authority, "Foreign Person"...40
(e) Title Requirements.................................40
(f) Transfer Tax Returns...............................40
(g) [Reserved].........................................40
(h) Pay-Off Letters....................................41
(i) Good Standing Certificate..........................41
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(j) Others as Reasonably Required......................41
9.02 The Partnerships Closing Deliveries.........................41
(a) Good Standing Certificate..........................41
(b) Partnership Amendments.............................41
(c) Affidavit..........................................41
(d) Others as Reasonably Required......................41
9.03 Closing Deliveries by the Trust and the Corporation.........41
(a) Good Standing......................................41
(b) Paired Shares......................................41
(c) Affidavit..........................................42
(d) Others as Reasonably Required......................42
ARTICLE X COSTS
10.01 Transaction Costs...........................................42
ARTICLE XI BROKERAGE
11.01 Broker......................................................42
ARTICLE XII SCHEDULES, CLOSING, "AS IS"
12.01 Schedules...................................................43
12.02 Access......................................................43
(a) Access - Partnerships..............................43
(b) Access - Contributing Parties......................43
12.03 Certain Definitions.........................................44
12.04 Deliveries..................................................44
12.05 Effect of Inspections, "As Is"..............................44
(c) [Reserved].........................................45
12.06 Delivery of Property Company Records........................45
12.07 The Partnerships' Indemnification...........................45
12.08 Date and Location Closing...................................46
ARTICLE XIII XXXXXXX MONEY, DEFAULT AND REMEDIES
13.01 Duties of Escrow Agent......................................46
(a) Xxxxxxx Money Deposits.............................46
(b) Disputes...........................................46
(c) Costs..............................................46
(d) Limited Duties.....................................46
(e) Liability..........................................46
13.02 Default.....................................................47
(a) Contributing Parties Default.......................47
(b) Starwood Parties' Default..........................47
(c) [Reserved].........................................48
ARTICLE XIV INDEMNIFICATION
14.01 Survival....................................................48
14.02 Indemnification by Contributing Parties.....................48
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14.03 Indemnification by Starwood Parties.........................49
14.04 Procedures..................................................51
ARTICLE XV FURTHER ASSURANCES
15.01 Further Assurances..........................................54
ARTICLE XVI PRE-CLOSING OPERATIONS
16.01 Contributing Party's Conduct of Business....................54
16.02 On-Site Representative......................................55
ARTICLE XVII NOTICES
17.01 Procedure for Notice........................................55
ARTICLE XVIII ADDITIONAL COVENANTS
18.01 Board Representation........................................57
18.02 Obligation of the Contributing Parties As to Closing
Conditions..................................................58
18.03 Obligation of The Starwood Parties As to Closing
Conditions..................................................58
ARTICLE XIX [RESERVED]
ARTICLE XX MISCELLANEOUS
20.01 Modifications and Waivers...................................58
20.02 Governing Law...............................................58
20.03 Captions etc................................................58
20.04 Rules of Construction.......................................59
20.05 Successors and Assigns......................................59
20.06 Entire Agreement............................................59
20.07 Counterparts................................................59
20.08 Starwood Lodging Trust......................................59
20.09 Confidentiality and Exclusivity.............................59
20.10 Joint Liability.............................................60
20.11 Press Releases..............................................60
20.12 Expiration..................................................60
LIST OF SCHEDULES....................................................63
LIST OF EXHIBITS.....................................................65
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CONTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of January 15,
1997, by and among SLT REALTY LIMITED PARTNERSHIP, a Delaware limited
partnership ("SLT"), SLT FINANCING PARTNERSHIP, a Delaware general partnership
("SLT FINANCING") and SLC OPERATING LIMITED PARTNERSHIP, a Delaware limited
partnership ("SLC", and together with SLT and SLT Financing, the
"PARTNERSHIPS"), STARWOOD LODGING TRUST, a Maryland real estate investment trust
(the "TRUST"), STARWOOD LODGING CORPORATION, a Maryland corporation (the
"CORPORATION"), the individuals and entities listed on Schedule A-1 attached
hereto and made a part hereof (each a "CONTRIBUTING PARTY" and collectively, the
"CONTRIBUTING PARTIES") and the entities set forth on Schedule A-2 attached
hereto and made a part hereof (each a "PROPERTY COMPANY" and collectively, the
"PROPERTY COMPANIES"), each of whom are parties to this Agreement as evidenced
by their execution hereof.
RECITALS
A. The Contributing Parties are the direct or indirect owners of the
limited liability company membership interests, limited partnership interests
(as general or limited partners), joint venture interests or general partnership
interests, as applicable, in the respective Property Companies as set forth
opposite each Contributing Party's name on Schedule A-1 (collectively, the
"PROPERTY COMPANY INTERESTS").
B. The Property Companies are the owners of ten (10) hotels and the
related real and personal property, both tangible and intangible, all as more
particularly described in Article I below (each a "HOTEL" and collectively, the
"HOTELS"). Each Property Company owns the Hotel set forth opposite its name on
Schedule A-2 attached hereto.
C. The Partnerships, the Trust and the Corporation (collectively, the
"STARWOOD PARTIES") and the Contributing Parties desire to provide for the
following transactions to be effected simultaneously but in the order set forth
below, all upon the terms and conditions herein set forth:
(1) The Contributing Parties desire to cause the Property
Companies to distribute to the Contributing Parties certain tangible
and intangible personal property assets owned by the Property Companies
in connection with the operation of the Hotels, as such assets are more
particularly described on Schedule B attached hereto (the "CONTRIBUTED
ASSETS") and SLC desires to acquire from the Contributing Parties such
Contributed Assets for the purpose of operating the Hotels in exchange
for limited partnership interests in SLC as set forth on Schedule B and
the Contributing Parties desire to contribute such assets to SLC and to
receive such consideration therefor all upon the terms and conditions
herein set forth.
(2) Certain Contributing Parties which are entities which are
direct owners of Hotel Company Interests shall distribute such Hotel
Company Interest to the Contributing Parties which own interests in
such entities.
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(3) SLT Financing desires to acquire from the Contributing
Parties the Property Company Interests described on Schedule C attached
hereto and the Contributing Parties desire to transfer such Property
Company Interests to SLT Financing all upon the terms and conditions
herein set forth.
(4) SLT desires to acquire from the Contributing Parties the
Property Company Interests described on Schedule D attached hereto in
exchange for cash and limited partnership interests in SLT as set forth
in Schedule D and the Contributing Parties desire to contribute such
Property Company Interests to SLT and to receive such consideration
therefor all upon the terms and conditions herein set forth.
(5) The Contributing Parties desire to immediately upon
closing convert a portion of the limited partnership interests in SLT
and SLC received pursuant hereto into Paired Shares (as defined below)
as more particularly set forth on Schedule E attached hereto.
D. The Trust, on behalf of the Trust and on behalf of SLT (as the
general partner of SLT), and the Corporation, on behalf of the Corporation and
on behalf of SLC (as the managing general partner of SLC), entered into a letter
of intent with HEI Hotels, LLC and The Prudential Insurance Company of America
on behalf of Prudential Property Investment Separate Account II, collectively on
behalf of the Contributing Parties, which letter of intent is dated December 9,
1996 (the "LETTER OF INTENT"), regarding the transactions contemplated in this
Agreement and the HEI Contribution Agreement (as hereinafter defined). Upon
execution of this Agreement and the other Transaction Documents (as defined
below) this Agreement and the other Transaction Documents shall supersede the
terms and provisions of the Letter of Intent.
IN CONSIDERATION of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties to this Agreement, intending to be bound legally and equitably, agree as
follows:
ARTICLE I
DEFINITIONS
1.01 Property. The term "PROPERTY" means and includes with respect to
each Property Company, such Property Company's right title and interest in and
to: (a) the land described in Schedule 1.01 hereto designated thereon as owned
by such Property Company, together with all right, title and interest in and to
any land lying in the bed of any street, road, avenue or alleyway open, proposed
or closed in front of or adjoining such land, and all right, title and interest
in and to any strips, gores, easements, rights of way, riparian rights and
privileges belonging to or inuring to the benefit of such land and all right,
title and interest in and to any tenements, hereditaments and appurtenances
belonging or in anywise appertaining to any or all of the aforesaid (the
"LAND"), (b) all buildings, structures and improvements now or hereafter erected
or situate on, over or beneath the Land, including, but not limited to, the
Hotels (the "BUILDINGS"), (c) the Tenant Leases (the Land, the Buildings and the
Tenant Leases are sometimes collectively referred to herein as the "REAL
PROPERTY"), (d) the FF&E, (e) the Inventory and other tangible personal property
now or hereafter
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situate on, attached or appurtenant to or used in connection with the Land
and/or the Buildings (collectively, with the FF&E, the "TANGIBLE PERSONAL
PROPERTY"), (e) the Intangible Property, (I) the Contracts, (g) the Proprietary
Rights, and (h) the Miscellaneous Interests, and in all cases whether owned by
such Property Company as of the date of this Agreement or acquired by such
Property Company prior to the Closing Date (defined below).
1.02 Certain Other Definitions.
(a) "ADA" means the Americans with Disabilities Act, as
amended.
(b) "AFFILIATE" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Exchange Act.
(c) "ASSUMED DEBT" means those mortgage loan obligations of
certain of the Property Companies as set forth on Schedule 1.02(c).
(d) [RESERVED]
(e) "BUSINESS DAY" means any day other than Saturdays, Sundays
and legal holidays on which federal banks are not open for business.
(f) "CLOSING" and "CLOSING DATE" are defined in Section 12.08.
(g) "CODE" means the Internal Revenue Code of 1986, as
amended.
(h) "CLOSING VALUE" of an OP Unit shall mean the greater of
(i) the average closing price of a Paired Share as reported as of the close of
trading on the New York Stock Exchange on the five (5) trading days immediately
preceding the date of Closing, or (ii) $49.25.
(i) [RESERVED]
(j) "CONSTITUENT DOCUMENTS" means:
(1) with respect to any Person that is a limited
partnership: (i) its agreement of limited partnership; (ii) its
certificate of limited partnership; (iii) any amendments or supplements
to items (i) and (ii); and (iv) any other certificate or instrument
required to be filed in the jurisdiction of formation of such Person to
evidence the formation or continued existence thereof;
(2) with respect to any Person that is a limited liability
company: (i) the operating agreement for such Person; (ii) the
certificate of formation for such Person; (iii) any amendments or
supplements to the items described in clauses (i) and (ii) above; and
(iv) any other certificate or instrument required to be filed in the
jurisdiction of formation of such Person to evidence the formation or
continued existence thereof;
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(3) with respect to a Person that is a corporation:
(i) its articles of incorporation; (ii) its by-laws; (iii) any
amendments or supplements to the items described in clauses (i) and
(ii); and (iv) any other certificate or instrument required to be filed
in the jurisdiction of formation of such Person to evidence the
formation or continued existence thereof;
(4) with respect to any Person that is a general
partnership or joint venture, the agreement of general partnership or
joint venture agreement for such person and any amendments or
modifications thereto; and
(5) with respect to any Person that is a trust: (i)
the declaration of trust for such Person; (ii) the trust regulations,
if any, pertaining thereto; (iii) any amendment or supplement to the
items set forth in clauses (i) and (ii) above; and (iv) any other
certificate or instrument required to be filed in the jurisdiction of
formation of such Person to evidence its formation or continued
existence.
(k) "CONTRACTS" means with respect to each Property
Company, the interest of such Property Company in:
(1) those future reservations and advance bookings
for the use of all or any part of the Property, involving aggregate
payments to the Property Company of $25,000 or more in any 12 month
period, and
(2) those other agreements, utility contracts, leases
(other than Tenant Leases), concession agreements, the License
Agreements, service contracts, and commitments which have an aggregate
unpaid balance of $25,000.00 or more by the Property Company or are not
terminable without payment of any fee or penalty on sixty (60) days or
less notice.
(l) "CONTRIBUTED ASSETS" is defined in Recital C(1).
(m) "CORPORATION SHARES" has the meaning given in Section
7.03(f).
(n) "DEPOSIT" has the meaning given in Section 2.05.
(o) "ELIGIBLE INVESTMENT" has the meaning given in
Section 2.04(b).
(p) "ENVIRONMENTAL LAWS" means and includes any law or
regulation of any federal, state or local governing or administrative body
relating to pollution or protection or cleanup of the environment (including,
but not limited to, ambient air, surface water, groundwater, land surface or
subsurface strata) including without limitation the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), the
Resources Conservation and Recovery Act of 1976, as amended ("RCRA") and other
such Legal Requirements relating to (i) release, containment, removal,
remediation, response, cleanup or abatement of any sort of hazardous substance,
pollutant, contaminant or waste, (ii) the manufacture, generation, formulation,
processing, labeling, distribution, introduction into commerce, use, treatment,
handling, storage, disposal or transportation of any chemical or toxic substance
or (iii) the
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management, use, storage, disposal, cleanup or removal of asbestos,
asbestos-containing materials, polychlorinated biphenyls or any other chemical
or toxic substance.
(q) "ENVIRONMENTAL REPORTS" has the meaning given in
Section 7.01(u).
(r) "EQUIPMENT LEASES" means, with respect to each
Property Company, any leases to which such Property Company is a party for
telephone systems, computer systems, electronic door lock systems, mini bars and
other equipment and systems used in connection with the Hotels.
(s) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and the regulations, interpretations and exemptions
promulgated thereunder.
(t) "EVALUATION MATERIALS" has the meaning given in
Section 2.04(c).
(u) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
(v) "EXCLUDED LIABILITIES" is defined in Section 8.02(i).
(w) "FF&E" means with respect to each Property Company,
the interest of such Property Company in, all fixtures, furniture, furnishings,
fittings, equipment, computer hardware, machinery, apparatus, artwork,
appliances, and audio/visual equipment and used in connection with the
ownership, operation and maintenance of the Hotels owned by such Property
Company (other than the Inventory). FF&E shall also include funds in the
aggregate amount of Two Million Nine Hundred Thousand Dollars ($2,900,000.00),
subject to adjustment as provided for below, as a reserve for scheduled calendar
year 1997 FF&E expenditures for all of the Hotels; provided, however, that such
sum shall be adjusted at Closing:
(1) upwards to reflect the aggregate amount then
unpaid for certain FF&E expenditure items budgeted for the Hotels with
respect to calendar year 1996, as such items are described on Schedule
1.02(w), and
(2) downwards to reflect any amount expended prior to
Closing for certain FF&E expenditure items budgeted for the Hotels with
respect to calendar year 1997, as such items are described on Schedule
1.02(w);
i.e., such sum assumes that at Closing all FF&E expenditures budgeted for 1996
will have been paid and no FF&E expenditures budgeted for 1997 will have been
paid.
(x) "FINANCIAL STATEMENTS" is defined in Section 7.01(q).
(y) "GAAP" means United States generally accepted
accounting principles, applied on a consistent basis.
(z) "GOVERNMENT ENTITY" means any federal, state or
municipal governmental or quasi governmental body or agency or any subdivision
thereof.
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(aa) "HEI" means HEI Hotels, LLC, a Delaware limited
liability company.
(bb) "HEI CONTRIBUTION AGREEMENT" means the Contribution
Agreement of even date herewith between the Partnerships, HEI and the other
parties thereto for the contribution of the "HEI Business" (as defined therein)
to the Partnerships pursuant to the terms thereof.
(cc) "HEI CONTRIBUTION" has the meaning set forth in the
HEI Contribution Agreement.
(dd) "INTANGIBLE PROPERTY" means with respect to each
Property Company all use, occupancy, liquor and other operating permits and
licenses relating thereto used in connection with the Property owned by such
Property Company; the interest of the Property Company in all information and
reservation systems owned by such Property Company, including all computer
programs, software and documentation thereof relating to such systems (subject
to the limitations of any applicable license agreements pertaining thereto), and
including all electronic data processing systems, program specifications, source
codes, logs, input data and report layouts and forms, record file layouts,
diagrams, functional specifications and narrative descriptions, flow-charts and
other related materials used in connection therewith; and all contract rights.
The Intangible Property shall not include any rights to the name "Prudential" or
any derivative thereof.
(ee) "INVENTORY" means with respect to each Property
Company, all merchandise, inventories, materials and supplies used or intended
for use at or held for sale in connection with the operation of the Hotel and
owned by such Property Company (and not by tenants or concessionaires)
including, without limitation:
(i) All beer, wine, spirits and other alcoholic
and non-alcoholic beverages (to the extent
the same may be legally transferred to the
Partnerships);
(ii) Food inventory, china, silverware, glassware
and other kitchen supplies and equipment;
(iii) Office and engineering supplies;
(iv) Housekeeping and other cleaning supplies,
paper and other supplies including, but not
limited to, stationery, toilet paper,
writing pens, and menus;
(v) Towels, linens, bedding and other guest room
supplies, including without limitation,
bathing and personal hygiene supplies;
(vi) Inventory stocks of furniture, furnishings,
carpeting, drapery fabrics and wall
coverings;
(vii) Supplies used with respect to any
recreational facility comprising a portion
of the Property; and
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(viii) Inventories at all sundry shops or other
retail outlets located in or comprising a
portion of the Real Property.
(ff) "INVESTMENTS" means, with respect to any Person, any
direct or indirect purchase or other acquisition by such Person of any notes,
obligations, instruments, stock, securities or other ownership or beneficial
interest (including, without limitation, partnership interests and joint venture
interests) in any other Person, and any capital contribution by such Person to
any other Person.
(gg) "KNOWLEDGE" as to the Starwood Parties shall mean the
present actual knowledge of Xxxxx Xxxxxxx or any of the other persons identified
on Schedule 1.02(gg) with respect to the Starwood Parties, and as to the
Contributing Parties shall mean the present actual knowledge of Xxxx Xxxxxxx or
any of the other persons identified on Schedule 1.02(gg) with respect to the
Contributing Parties. As used herein, "Knowledge" of a breach of any covenant,
representation or warranty means the actual knowledge of any such individual of
the fact or circumstance which constitutes such a breach, whether or not such
individual actually knows such fact or circumstance does constitute a breach of
this Agreement or the other Transaction Documents.
(hh) "LEGAL REQUIREMENTS" means all federal, state and
local laws, statutes, ordinances, rules and regulations affecting or in any way
relating to the Property or its operation, including, without limitation any
Environmental Laws, ADA and the Occupational Safety and Health Act of 1970 as
amended.
(ii) "LIABILITIES" means any liability, obligation, cost
or expense of any nature whatsoever, whether now known or unknown, asserted or
unasserted, accrued or unaccrued, liquidated or unliquidated or due or to become
due, including, without limitation, any liability in respect of any Taxes or
other Legal Requirements.
(jj) "LICENSE AGREEMENT" means with respect to each
Property Company, the franchise and license agreement to which such Property
Company is a party as identified opposite its name on Schedule 1.02(jj).
(kk) "LIEN" means any lien, pledge, encumbrance, security
agreement, conditional sale agreement or other title retention device.
(ll) "MANAGEMENT AGREEMENT" means with respect to each
Property Company, the hotel management agreement to which HEI and such Property
Company are parties as identified on Schedule 1.02(ll) and "MANAGER" means HEI
in such capacity under the applicable Management Agreement.
(mm) "MINIMUM SHARE OWNERSHIP" means either (i) ownership
by PRISA II of a total number of SLT OP Units and SLC OP Units plus Paired
Shares which (in the aggregate) equals fifty percent (50%) or more of the
aggregate number of SLT OP Units, SLC OP Units and Paired Shares (if any)
received by PRISA II at Closing as a part of the Contribution Amount, or (ii)
that PRISA II is one of the five largest shareholders of the Trust on a fully
diluted basis (assuming,
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for purposes of such calculation, that all outstanding SLT OP Units and SLC OP
Units (other than those owned by the Trust and the Corporation) have been
converted into Paired Shares).
(nn) "MISCELLANEOUS INTERESTS" means with respect to each
Property Company, all of such Property Company's right, title and interest in
and to (i) the business operations conducted by such Property Company directly
or through agents with, in or upon the Land, Buildings and/or Tangible Personal
Property (the "HOTEL BUSINESS") including, without limitation, the good will
pertaining thereto, (ii) all promotional and advertising literature and
materials, catalogs, booklets, manuals, records, guest, tenant and supplier
lists and correspondence with guests, tenants and/or suppliers, (iii)
transferable telephone exchange numbers, (iv) originals (or, where appropriate,
copies) of all financial, personnel and other books, records and files wherever
located and held by or on behalf of such Property Company or its agents in
connection with the Property, including without limitation, copies thereof in
computer readable form (where available) and (v) all other assets, properties,
rights and claims of the Property Companies which are used or held for use in
connection with the Property and/ or the Hotel Business including, without
limitation, guest histories and the Hotels' sales and marketing plans.
(oo) "NET WORKING CAPITAL" means as to each Property Company,
the aggregate amount as of the Closing Date of (i) all such Property Company's
cash, cash equivalents, accounts receivable and other current assets, minus (ii)
the aggregate amount of all such Property Company's accounts payable and all
other current liabilities, with all such items defined and measured in
accordance with GAAP, applied consistently with the Financial Statements for
such Property Company. If any item on (or which, under GAAP, should be reflected
on) the Financial Statements for such Property Company is not reflected in
accordance with GAAP, Net Working Capital for such Property Company will
nonetheless be computed in accordance with GAAP. In computing Net Working
Capital, all accounting entries will be taken into account regardless of their
amount, all known errors and omissions will be corrected and all known proper
adjustments will be made.
(pp) "NEW ENCUMBRANCES" has the meaning given in Section
3.01(b).
(qq) "OWNERSHIP LIMITATION" means the limitations contained in
the declaration of trust for the Trust and the Corporation's articles of
incorporation prohibiting actual or constructive ownership by any one person or
group of related persons of more than 8% of the issued and outstanding Paired
Shares taking into account the attribution rules of Section 544(a) of the Code
as modified by Section 856(h) of the Code or Section 318(a) of the Code as
modified by Section 856(d)(5) of the Code.
(rr) "PAIRED SHARES" means one common share of beneficial
interest, par value $.01 per share of the Trust and one share of common stock,
par value $.01 per share, of the Corporation that are subject to a pairing
agreement between the Trust and the Corporation.
(ss) "PAIRING AGREEMENT" means the Pairing Agreement dated as
of June 25, 1980, as amended, between the Trust and the Corporation providing,
in relevant part, for the pairing of all outstanding Trust Shares and
Corporation Shares and requiring, as a condition of transfer, that Trust Shares
are transferable only together with an equal number of Corporation Shares and
that Corporation Shares are transferable only together with an equal number of
Trust Shares.
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(tt) "PARTNERSHIP AGREEMENTS" means the limited partnership
agreements for SLC and SLT, including any amendments thereto.
(uu) "PERMITTED ENCUMBRANCES" has the meaning given in Section
3.01(b).
(vv) "PERSON" means an individual, a partnership, a limited
liability company, a corporation, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization, or a Governmental
Entity.
(ww) "PRISA II" means The Prudential Insurance Company of
America on behalf of Prudential Property Investment Separate Account II.
(xx) [RESERVED]
(yy) "PROPRIETARY RIGHTS" means, with respect to any Property
Company, such Property Company's interest in the following (other than such
interest held under a License Agreement): all patents and applications therefor,
all trademarks, trademark registrations and applications therefor, all
copyrights, copyright registrations and applications owned or held by such
Property Company in connection with its Hotel, including, without limitation,
those listed on Schedule 1.02(yy) hereto and the right to use the names of the
Hotels and their restaurants, dining and meeting rooms (other than pursuant to a
License Agreement).
(zz) "PURSUIT COSTS" is defined in Section 3.01(d).
(aaa) "PLAN ASSET REGULATION" is defined in Section 7.02(f).
(bbb) "SEC DOCUMENTS" means copies of all reports and
statements jointly filed by the Trust and the Corporation with the Securities
and Exchange Commission ("SEC") since January 1, 1995.
(ccc) "SECURITIES ACT" means the Securities Act of 1933, as
amended.
(ddd) "SINGLE-PURPOSE ENTITY" means a corporation, general or
limited partnership or limited liability company which was organized solely for
the purpose of owning a Hotel and at all times since its formation:
(i) has not engaged in any material business or owned
material assets unrelated to such Hotel;
(ii) if such entity is a limited partnership, has as its
only general partners (A) general partners which were organized solely
for the purpose of owning such general partnership interest and which
at all times since their formation have not engaged in any material
business or owned any material assets unrelated to such general
partnership interest, or (B) PRISA II;
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(iii) has maintained its accounts, books and records
separate from any other Person;
(iv) subject to the rights and interests of Manager
under the applicable Management Agreement for such Hotel (including
such rights in or with respect to any accounts for such Hotel), has not
commingled its funds or assets with those of any other Person;
(v) has conducted its business in its name except for
the use of the name of the Hotel and other tradenames in the conduct of
its business, which tradenames are set forth on Schedule 1.02(ddd);
(vi) has maintained its financial statements and
accounting records separate from any other Person;
(vii) has paid or reimbursed, directly or through
Manager or other independent contractors acting on its behalf, its own
liabilities out of its own funds and assets;
(viii) has complied in all material respects with the
requirements of its Constituent Documents and other applicable
corporate, limited liability company or partnership formalities;
(ix) has held and identified itself as a separate and
distinct entity under its own name (except as provided in clause (v)
above) and not as a division or part of any other Person or entity; and
(x) has not made loans to or guaranteed the loans or
other obligations of any Person or entity.
(eee) "SLC OP UNITS" has the meaning given in Section 2.03.
(fff) "SLT OP UNITS" has the meaning given in Section 2.03.
(ggg) "STARWOOD PARTIES" is defined in Recital C.
(hhh) "SUBSIDIARY" means any Person with respect to which a
specified Person has the power to vote or direct the voting of sufficient
securities to elect a majority of the directors or persons performing similar
functions or with respect to which such Person acts as a general partner or
managing member or otherwise controls the day-to-day operations of such entity.
(iii) "TAX" means any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any
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interest, penalty, or addition thereto, whether disputed or not, and including
any obligation to indemnify or otherwise assume or succeed to such tax liability
of any other Person.
(jjj) "TAX RETURN" means any return, declaration, report,
claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
(kkk) "TITLE COMMITMENTS" has the meaning given in Section
3.01(b).
(lll) "TITLE INSURER" means First American Title Insurance
Company.
(mmm) "TITLE POLICIES" has the meaning given in Section
8.01(d).
(nnn) "TENANT LEASE(S)" means with respect to any Hotel, any
lease, license or other occupancy agreement granting to any Person (excluding
HEI and the Property Company which owns such Hotel) the right to use and occupy
any portion of such Hotel, other than guest room reservations or advance booking
agreements entered into in the ordinary course of business or otherwise
disclosed in the Schedules to this Agreement.
(ooo) "TRANSACTION DOCUMENTS" means this Agreement, the
Exchange Rights Agreement, the Registration Rights Agreement, the HEI
Contribution Agreement, the Co-Investment Agreement, and all other agreements,
instruments, certificates and other documents to be entered into or delivered by
any party in connection with the transactions contemplated to be consummated by
any of the foregoing.
(ppp) "TRUST SHARES" has the meaning given in Section 7.04(f).
(qqq) "UNPERMITTED TITLE EXCEPTIONS" has the meaning given in
Section 3.01(b).
ARTICLE II
CONTRIBUTION; CONSIDERATION; DEPOSIT
2.01 Agreement to Contribute. Each of the Contributing Parties hereby
jointly and severally agrees to: (i) cause the Property Company in which such
Contributing Party owns a Property Company Interest to distribute the
Contributed Assets owned by such Property Company to the Contributing Parties
owning such Property Company Interests in-kind in proportion to their respective
Property Company Interests in such Property Company, (ii) contribute to SLC the
Contributed Assets received by such Contributing Party in exchange for SLC OP
Units as set forth below; (iii) contribute to SLT a portion of the Property
Company Interests owned by such Contributing Party in exchange for Cash and SLT
OP Units as set forth below; and (iv) contribute to SLT Financing the remaining
portion of the Property Company Interests owned by such Contributing Party in
exchange for Cash as set forth below.
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2.02 Reserved.
2.03 Consideration for Contribution. In consideration of the
contribution of the Contributed Assets and Property Company Interests to the
Partnerships by the Contributing Parties, the Partnerships shall cause to be
delivered to the Contributing Parties at Closing the following items of value
having an agreed upon aggregate value equal to Three Hundred Twelve Million
Three Hundred Eighty Thousand Dollars ($312,380,000), (the "CONTRIBUTION
AMOUNT"), subject to adjustment as provided in this Agreement:
(1) pay cash in the amount of $80,525,000.00 (the "CASH");
(2) assume or take subject to the Assumed Debt (which shall be
repayable by SLT without prepayment penalty or premium); and
(3) the balance of the Contribution Amount in limited
partnership interests ("OP UNITS") in the Partnerships (based upon
$49.25 per Paired Share), consisting of an equal number of OP Units of
SLT ("SLT OP UNITS") and OP Units of SLC ("SLC OP UNITS"),
exchangeable, subject to the Ownership Limitation, into an equal number
of Paired Shares as provided in and subject to the limitations of the
Exchange Rights Agreement. The Contributing Parties shall have the
right to convert a portion of the SLT OP Units and SLC OP Units so
received into Paired Shares immediately following the issuance thereof
in accordance with Schedule E attached hereto.
The parties agree the allocation of the Contribution Amount among the
Contributing Parties shall be as set forth on Schedule 2.03 and that each of the
Partnerships is receiving assets with a fair market value substantially equal to
the Cash and OP Units in such Partnership issued in exchange therefor. Any sales
tax due upon the contribution of the Contributed Assets shall constitute a
Transaction Cost (as defined in Section 10.01).
2.04 [Reserved]
2.05 Deposit.
(a) The Contributing Parties acknowledge that SLT shall on the
date of execution hereof make an xxxxxxx money deposit (together with any
interest earned thereon, the "INITIAL DEPOSIT") in the amount of Five Million
Dollars ($5,000,000) with First American Title Insurance Company (the "ESCROW
AGENT") pursuant to the terms of the escrow instructions (the "ESCROW
AGREEMENT") in the form attached as Exhibit "A" hereto. Provided this Agreement
has not been sooner terminated, upon the approval or deemed approval of the
Schedules of this Agreement (as provided in Section 12.01), SLT shall deposit
with the Escrow Agent on or prior to 6:00 P.M. (EST) on January 17, 1997 an
additional $5,000,000.00 (the "ADDITIONAL DEPOSIT" and together with the Initial
Deposit and any interest or other earnings on either the "DEPOSIT"), for a total
deposit of $10,000,000.00. The Deposit shall be non-refundable except as
provided herein.
(b) If the Closing shall occur, the Deposit shall be applied
to the Cash portion of the Contribution Amount. If this Agreement is terminated
pursuant to Section 12.01, the Initial
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Deposit shall be returned by the Escrow Agreement to SLT. If the Partnerships
fail or refuse to close for any reason other than (x) an uncured default by one
or more of the Contributing Parties under Section 13.02 of this Agreement, (y)
the failure of one or more of the conditions in Section 8.01, or (z) termination
of this Agreement pursuant to Article VI, the Deposit shall be paid to the
Contributing Parties, as liquidated damages as their sole and exclusive remedy
for such default. If (1) one or more of the Contributing Parties fail or refuse
to perform their obligations under this Agreement, or (2) if one or more of the
conditions set forth in Section 8.01 is not satisfied or waived by the
Partnerships, or (3) this Agreement is terminated pursuant to Article VI, then
subject to the provisions of Section 13.02, the Deposit shall be refunded and
repaid to SLT.
(c) The Deposit shall be invested in accordance with the terms
of the Escrow Agreement and interest shall accrue for the benefit of and be paid
to the party to whom the Deposit is paid pursuant to this Section 2.05.
(d) The duties of the Escrow Agent hereunder are purely
ministerial in nature, and the Escrow Agent shall have no liability to either
party so long as it acts in good faith in accordance with the provisions of the
Escrow Agreement.
ARTICLE III
TITLE
3.01 Title to Property.
(a) Prior to or contemporaneously with the execution and
delivery of this Agreement, each of the Contributing Parties will deliver to SLT
a copy of the most recent surveys of the Real Property as the Contributing
Parties have in their possession (the "OLD SURVEYS"). If required by the Title
Insurer as a condition to the removal of any survey exceptions from the Title
Policies, the Starwood Parties may obtain prior to the Closing a recertification
of one or more of the Surveys or a new survey of each parcel of the Real
Property, prepared by a licensed surveyor, satisfactory to SLT, and conforming
to 1992 ALTA/ACSM Minimum Requirements for Urban Land Title Surveys ("NEW
SURVEYS" and, together with the Old Surveys, the "SURVEYS"), including Table A
Items Nos. 1-4 and 6-14, and such other standards as the Title Insurer may
require. The Surveys shall be so certified (or recertified) to SLT, and Title
Insurer in a form satisfactory to such parties.
(b) The Partnerships have had a bringdown of title to the Real
Property performed by the Title Insurer and shall provide copies thereof (the
"TITLE COMMITMENTS") to the applicable Contributing Parties and shall obtain
such UCC searches and other evidence of title to the Property Company Interests
and the remainder of the Property as the Partnerships shall deem appropriate
(the "SEARCHES"). Except as set forth on Schedule 3.01 hereto, the matters
disclosed by the Title Commitments and the Old surveys are referred to herein as
the "Permitted Encumbrances". The matters set forth on Schedule 3.01 shall be
limited to such matters that materially impair the current use, value or
continued operation of the affected Hotel and such matters are referred to as
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"Unpermitted Title Exceptions". Notwithstanding the foregoing, Permitted
Encumbrances shall include (and Unpermitted Title Exceptions shall exclude) any
and all Liens securing:
(i) the Assumed Debt;
(ii) unpaid real estate taxes and assessments not yet
due and payable;
(iii) Uniform Commercial Code vendor liens securing
the non-delinquent payment for goods; and
(iv) obligations of any Property Company which will
be credited at Closing in the Net Working Capital adjustment provided
for in Article IV, i.e., Liens securing any current liabilities of such
Property Company.
In the event that (i) the Searches disclose Liens or other encumbrances not
disclosed by the Title Commitments or that are not otherwise Permitted
Encumbrances; or (ii) the Partnerships obtain any New Surveys, or any subsequent
bringdowns of the Title Commitments or the Searches, and the same disclose
matters which are not disclosed by the Old Surveys, Title Commitments or the
Searches and are not otherwise Permitted Encumbrances in accordance with the
foregoing, the Partnerships shall promptly so notify the applicable Contributing
Party, but such additional matters ("NEW ENCUMBRANCES") shall be Permitted
Encumbrances unless objected to in writing by the Partnerships prior to Closing,
in which event the matters so objected to shall be Unpermitted Title Exceptions,
unless the Starwood Parties proceed to consummate the Closing transactions
provided for herein notwithstanding such matters, as provided for in Section
3.01(d) below, in which event all matters disclosed to the Starwood Parties
prior to Closing shall constitute Permitted Exceptions for purposes of this
Agreement.
(c) As to any Unpermitted Title Exceptions, the Contributing
Parties shall notify the Partnerships as soon as reasonably practicable but in
all events prior to Closing, whether the Contributing Parties:
(i) will cause the same to be discharged or removed
at or prior to Closing (whereupon the Contributing Parties will be
obligated to do so); or
(ii) will not cause the same to be so discharged.
The Contributing Parties' failure to respond shall constitute such Contributing
Parties' election to proceed under clause (ii).
(d) If the Contributing Parties shall notify the Partnerships
pursuant to paragraph (c)(ii) that the Contributing Parties will not cause an
Unpermitted Title Exception to be discharged at or prior to Closing, or shall be
deemed to have made such election, the Closing shall be deferred, if necessary,
to the date which is five (5) business days after receipt of such notice by the
Partnerships, and the Partnerships shall notify the Contributing Parties within
such five (5) business day period of the Partnerships' election in its sole
discretion, either:
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(i) to accept title subject to such Unpermitted Title
Exception(s) as the Contributing Parties shall have declined to cure,
without reduction in or offset to the Contribution Amount; or
(ii) to terminate this Agreement and receive a prompt
refund of the Deposit; provided, however, that if any such Unpermitted
Title Exception is a New Encumbrance, the Partnerships shall also be
entitled to receive reimbursement by the Contributing Parties of the
reasonable out-of-pocket fees and expenses actually incurred by the
Starwood Parties in pursuing the transactions contemplated hereby
including, without limitation: travel expenses; fees and expenses of
third party service providers providing legal, accounting, engineering,
or other services in connection with such pursuit; title insurance,
survey and other search fees; and other customary analytical or due
diligence expenses (collectively, the "PURSUIT COSTS") up to an amount
not to exceed One Million Dollars ($1,000,000) within fifteen (15) days
after providing to the Contributing Parties an invoice setting forth in
reasonable detail the amount of such Pursuit Costs.
The Partnerships' failure to respond on a timely basis shall constitute the
Partnerships' election to proceed under clause (ii). The foregoing shall
constitute the sole remedies of the Starwood Parties with respect to the matters
provided for in this Section 3.01(d) (without limiting the generality of the
foregoing, the provisions of Section 13.02(a) shall not apply thereto).
ARTICLE IV
NET WORKING CAPITAL ADJUSTMENT
4.01 Net Working Capital Adjustment.
(a) Estimated Closing Balance Sheet. Net Working Capital for
each of the Property Companies shall be determined as of the Closing Date in
accordance with the procedure set forth below, and the Cash portion of the
Contribution Amount shall be adjusted up or down in accordance with such
determination. At least two (2) business days prior to the Closing, each
Property Company and the Partnerships in good faith shall prepare an unaudited
estimated balance sheet of such Property Company as of the Closing Date (the
"ESTIMATED CLOSING BALANCE SHEET") and an estimate of the Net Working Capital of
the Property Company as of the close of business on the Closing Date (the
"ESTIMATED CLOSING NET WORKING CAPITAL") based on the Property Company's books
and records and other information then available. For purposes of the
determination of Estimated Net Working Capital, all of the guest room revenue
and applicable tax for the night preceding the Closing Date shall be treated as
accounts receivable of such Property Company for the day preceding the Closing
Date, but the Starwood Parties shall receive a credit in the determination of
Net Working Capital equal to one-half (1/2) of the amount of such accounts
receivable for guest room revenue and applicable tax for the night preceding the
Closing Date.
(b) Adjustment. If the Estimated Closing Net Working Capital
for any Property Company is greater than zero, the Cash portion of the
Contribution Amount allocated to the Property Company Interests in such Property
Company shall be adjusted upwards by such excess. If
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Estimated Closing Net Working Capital for any Property Company is less than
zero, the Cash portion of the Contribution Amount allocated to the Property
Company Interest in such Property Company shall be adjusted downwards by such
shortfall until the Cash Portion is zero, and thereafter the number of OP Units
included in the portion of the Contribution Amount allocated to Property Company
Interests in such Property Company shall be reduced based upon the Closing
Value, until such shortfall is fully offset.
(c) Final Closing Balance Sheet. As promptly as practicable,
but in no event later than ninety (90) days after Closing, the Partnerships will
cause HEI to deliver to the Contributing Parties a balance sheet of each of the
Property Companies as of the Closing (the "CLOSING BALANCE SHEET") prepared by
HEI on a basis consistent with the most recent balance sheet on the Financial
Statements for such Property Company, which Closing Balance Sheet will reflect
the HEI's determination (as certified by the chief financial officer of HEI) of
the Net Working Capital as of the close of business on the Closing Date (the
"CLOSING NET WORKING CAPITAL") of such Property Company.
(d) Independent Auditor.
(i) If the Contributing Parties disagree with HEI's
determination of Closing Net Working Capital, the
Contributing Parties shall notify the Partnerships in
writing of such disagreement (such notice setting
forth the basis for such disagreement in reasonable
detail) and the Partnerships and the Contributing
Parties thereafter shall negotiate in good faith to
resolve any such disagreements. If the Partnerships
and the Contributing Parties are unable to resolve
any such disagreements within thirty (30) days after
the Partnerships cause HEI to deliver the Closing
Balance Sheet to the Contributing Parties, the
Partnerships and the Contributing Parties shall
subject the dispute to a "Big Six" public accounting
firm jointly selected by the Partnerships and the
Contributing Parties (the "INDEPENDENT AUDITOR") for
resolution. If the Partnerships and the Contributing,
Parties are unable to agree upon an Independent
Auditor, the independent Auditor shall be selected by
lot from a list of four "Big Six" accounting firms
(of which two firms shall be selected by each of the
Partnerships and the Contributing Parties, but
excluding any firm which has previously audited such
Property Company's or any of the Starwood Parties'
financial statements).
(ii) The Partnerships and the Contributing Parties shall
use their reasonable best efforts to cause the
Independent Auditor to resolve all disagreements over
the Closing Net Working Capital as soon as
practicable, but in any event within 60 days after
submission of the disputes to the Independent
Auditor. The resolution of such disagreements and the
determination of Closing Net Working Capital by the
Independent Auditor shall be final and binding on the
Partnerships and the Contributing Parties.
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(iii) The Independent Auditor will determine the allocation of
its costs and expenses in determining the Closing Net
Working Capital based upon the percentage which the
portion of the contested amount not awarded to each
party bears to the amount actually contested by such
party. For example, if the Contributing Parties claim
the Closing Net Working Capital is $1,000 greater than
the amount determined by the Partnership's accountants,
and the Partnerships contest only $500 of the amount
claimed by the Contributing Parties, and if the
Independent Auditor ultimately resolves the dispute by
awarding the Contributing Parties $300 of the $500
contested, then the costs and expenses of arbitration
will be allocated 60% (i.e., 300 500) to the
Partnerships and 40% (i.e., 200 500) to the Contributing
Parties.
(e) Final Adjustment. If the Closing Net Working Capital for
any Property Company (as finally determined pursuant to Section 4.01(c) or (d),
as applicable) is greater than the Estimated Closing Net Working Capital, the
Partnerships shall, within three (3) business days after the Closing Net Working
Capital is so finally determined, pay to the Contributing Parties owning
Property Company Interests in such Property Company in immediately available
funds, the difference between the Closing Net Working Capital and the Estimated
Closing Net Working Capital. If the Closing Net Working Capital for such
Property Company is less than the Estimated Closing Net Working Capital for such
Property Company, the Contributing Parties owning Property Company Interests in
such Property Company shall, within three (3) business days after the Closing
Net Working Capital for such Property Company is so finally determined, pay to
the Partnerships, in immediately available funds, the difference between Closing
Net Working Capital and Estimated Closing Net Working Capital for such Property
Company. All amounts owed pursuant to this Section 4.01 (e) shall include
interest thereon, from and excluding the day which is fifteen (15) days after
the date on which the party entitled to receive such amount makes written demand
for its payment to and including the date of payment, at the "prime" rate as
announced by Chase Manhattan Bank N.A. on the date on which such demand is made
calculated on the basis of a 365-day year. All determinations pursuant to this
Section 4.01(e) shall be made in accordance with GAAP.
4.02 Errors. Notwithstanding the foregoing and in addition to the
provisions of Subsections 4.01(a) - (e), if at any time within one year
following Closing either party discovers any items which should have been
included in the Net Working Capital Adjustments but which were omitted
therefrom, or any error in the computation of such adjustments, or any items not
previously capable of determination, such items or error shall be properly
adjusted as of Closing without interest thereon.
ARTICLE V
[Reserved]
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ARTICLE VI
RISK OF LOSS
6.01 Risk of Loss. Subject to the following provisions of this Article
VI, the Contributing Parties shall bear all risk of all loss or damage to the
Property from all causes until Closing.
6.02 Casualty. If one or more of the Hotels is materially damaged by
any fire or other casualty prior to Closing, the Property Company owning such
damaged Hotel will immediately notify the Partnerships in writing of the same (a
"CASUALTY NOTICE"). The Casualty Notice will include a reasonably detailed
description of the property damage and such Property Company's best estimate of
the cost and time required to repair such damage. The cost of repairing such
damage to any Hotel as estimated by an architect or other qualified consultant
retained by such Property Company is herein referred to as a "CASUALTY LOSS"
with respect to such Hotel.
6.03 Eminent Domain. In the event that a portion of one or more of the
Hotels are taken by eminent domain or becomes subject to a taking by eminent
domain or a deed in lieu of condemnation prior to Closing, the affected Property
Company will immediately notify the Partnerships in writing, of the same (a
"EMINENT DOMAIN NOTICE"). The reasonably estimated value of the portion of any
Hotel taken or subject to taking by eminent domain is herein referred to as a
"CONDEMNATION LOSS" with respect to such Hotel.
6.04 Elections Upon Casualty or Eminent Domain. If any of the events
described in Section 6.02 or Section 6.03 occurs prior to Closing, then the
provisions of this Section 6.04 shall apply:
(a) Minor Loss. Subject to Section 6.04(c) below, if the
amount of the Casualty Loss or the Condemnation Loss, as applicable (the
"LOSS"), to any Hotel is equal to or less than One Million Dollars ($1,000,000),
then the Partnerships shall receive a credit to the Cash portion of the
Contribution Amount equal to the Adjustment Amount (as defined in Section 6.05),
and in such event the Closing will be as otherwise provided herein with respect
to the Property Company Interests and Contributed Assets of the Property Company
which owns the Hotel subject to such Loss.
(b) Substantial Loss. Subject to Section 6.04(c) below, if the
amount of the Loss to any Hotel is greater than One Million Dollars
($1,000,000), then the Partnerships, must elect (as their sole and exclusive
remedy) with respect to the Property Company Interests and Contributed Assets of
the Property Company owning such Hotel either:
(i) to proceed with the transaction without the
Property Company Interests and Contributed Assets of such Property
Company, with a reduction in the Contribution Amount based on Schedule
2.03; provided, however, that the Partnerships shall not have the right
to make such election under this clause (i) with respect to more than
two Hotels; or
(ii) to proceed with the transaction contemplated by
this Agreement with such Property Company Interests and Contributed
Assets, including (as assets of such
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Property Company) such Property Company's rights in any insurance or
condemnation proceeds (as applicable) which remain unpaid to such
Property Company in connection with such Loss and a credit against the
Cash portion of the Contribution Amount equal to the Adjustment Amount,
and in such event the Closing will be as otherwise provided herein.
Such election must be made by the Partnerships within ten (10) business days
following receipt of the Casualty Notice or Eminent Domain Notice (the "Loss
Election Date"), as applicable (the "LOSS NOTICE"), and the Closing Date shall
be extended, if necessary, to the third (3rd) Business Day following the Loss
Election Date. The Partnerships' failure to give timely notice under this
Section 6.04(b) will be deemed to be an election under clause (ii).
(c) Major Casualty Damage. If the aggregate amount of the Loss
with respect to any Hotel is greater than Five Million Dollars ($5,000,000), or
if three or more Hotels each have a Loss in excess of One Million Dollars
($1,000,000), then the Partnerships must elect (as their sole and exclusive
remedy) either:
(i) to proceed in accordance with Section 6.04(b)
above; or
(ii) to terminate this Agreement by giving notice to
such effect to the Contributing Parties not later than the Loss
Election Date. In the event of such termination, then the entire amount
of the Deposit will be refunded to SLT.
The Partnerships' failure to give timely notice under this Section 6.04(c) will
be deemed to be an election under clause (ii) of this Section 6.04(c).
6.05 Adjustment Amount. As used in this Article VI, "ADJUSTMENT AMOUNT"
means the sum of (i) in the case of casualty damage covered by a Property
Company's property casualty insurance, the amount of the deductible under such
insurance policy with respect to such casualty damage (not to exceed the amount
of such casualty damage), plus (ii) any amounts previously paid to such Property
Company as insurance or condemnation proceeds, as applicable, and not expended
by such Property Company prior to Closing for the purpose for which received
(including but not limited to expenditures for restoration of the affected Hotel
in connection with such casualty or condemnation); provided, however, that in
determining the adjustments to be made to the Cash portion of the Contribution
Amount at Closing for the Adjustment Amount (in accordance with this Article VI)
and for Net Working Capital (in accordance with Article IV), appropriate
adjustment shall be made so as to not double count as current assets of a
Property Company any unexpended amounts received by a Property Company as
insurance or condemnation proceeds or the right of a Property Company to receive
any insurance or condemnation proceeds, and so as to not double count as current
liabilities of such Property Company any liabilities of a Property Company for
which such insurance or condemnation proceeds have been or will be payable.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.01 Contributing Party's Representation and Warranties. To induce the
Starwood Parties to enter into this Agreement each Contributing Party makes the
following representations and warranties on behalf of such Contributing Party,
and on behalf of or with respect to the Property Company in which such
Contributing Party owns Property Company Interests all of which (i) are now
true, and (ii) except as expressly provided herein to the contrary, shall be
true as of Closing, subject, in each case, to the exceptions set forth on the
Schedules attached to this Agreement and on any supplemental schedules thereof
as may be delivered to the Starwood Parties prior to the Closing, provided,
however, that:
(1) prior to Closing, the remedies of the Starwood
Properties for any breach of such representations and warranties shall
be limited in accordance with Section 13.02(a);
(2) an election by the Starwood Parties to complete
Closing notwithstanding Knowledge of any breach thereof shall
constitute a waiver of such breach in accordance with Section 12.05(b);
and
(3) after Closing, the liability of the Contributing
Parties for any breach of such representations and warranties shall be
limited in accordance with Section 14.02(b).
Subject to the foregoing, the Contributing Parties represent and warrant as
follows:
(a) Subsidiaries and Investments. The Property Company has no
subsidiaries and does not own, directly or indirectly, any stock, membership
interests, partnership interests or joint venture interests in, or similar
equity ownership interest issued by, any other Person.
(b) Property Company Capitalization; Title to Property Company
Interests.
(i) The capitalization of the Property Company is
completely set forth on Schedule 7.01(b) hereto. There are no restrictions on
the transfer of the Property Company Interests other than those set forth in the
Property Company's Constituent Documents, true, correct and complete copies of
which have been provided to the Partnerships, and those arising from federal and
applicable state securities laws. All currently issued and outstanding Property
Company Interests were duly authorized and validly issued in accordance with the
terms of the Property Company's Constituent Documents and in compliance with
applicable laws, and are fully paid and non-assessable. Except as set forth on
Schedule 7.01(b) and except as created by this Agreement, there are no
outstanding interests, equity interests, subscriptions, purchase rights,
subscription rights, conversion rights, exchange rights, options, warrants,
preemptive rights, rights of first refusal, rights of first offer, or other
rights or other arrangements or commitments outstanding or obligating the
Property Company to issue, sell or otherwise cause to be outstanding any
Property Company Interests, any security convertible into or exercisable or
exchangeable for Property Company Interests, or any other equity participation
in the Property Company. At the Closing, upon receipt
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of the Property Company Interests, SLT and SLT Financing will be admitted as a
member partner or joint venturer (as applicable) of the Property Company.
(ii) Each Contributing Party severally represents and
warrants as follows in this subsection (b)(ii) with respect to the Property
Company Interest(s) set forth opposite its name on Schedule 7.01(b) hereto. Such
Contributing Party owns all of such Property Company Interest(s) and there are
no other holders of all or any portion of or interests in such Property Company
Interest(s). Such Property Company Interest(s) contributed to the Partnerships
at Closing by such Contributing Party will be free and clear of all Liens.
Except as set forth on Schedule 7.01(b) and except as created by this Agreement,
there are no outstanding interests, equity interests, subscriptions, purchase
rights, subscription rights, conversion rights, exchange rights, options,
warrants, preemptive rights, rights of first refusal, rights of first offer, or
other rights or other arrangements or commitments outstanding with respect to
such Property Company Interest(s) or obligating such Contributing Party to
issue, sell or otherwise cause to be outstanding any Property Company Interests,
any security convertible into or exercisable or exchangeable for Property
Company Interests, or any other equity participation in the Property Company.
Such Property Company Interest(s) are not subject to any voting trusts, proxies,
or other agreements or understandings. Each Contributing Party that is a Person
other than an individual has full power and authority to enter into this
Agreement and to assume and perform all of its obligations hereunder and the
execution and delivery of this Agreement and the performance by such
non-individual Contributing Party of its obligations hereunder have been duly
authorized by such partnership, trust, limited liability and/or corporate action
(including, without limitation approval by each of the partners and/or
shareholders thereof of such Contributing Party) as may be required.
Notwithstanding any other provision of this Agreement or the other Transaction
Documents, the liability of each Contributing Party for the representations and
warranties of such Contributing Party pursuant to this subsection (b)(ii) shall
be several and not joint, and no Contributing Party shall be liable or
responsible for the representations and warranties made by any other
Contributing Party pursuant to this subsection (b)(ii) or pursuant to any
similar provision of the other Transaction Documents.
(c) Tax Matters. Except as set forth on Schedule 7.01(c):
(i) the Property Company has timely filed or shall
timely file all Tax Returns which are required to
be filed, and all such Tax Returns are true,
complete and accurate in all respects and have
been prepared in compliance with applicable law.
The Property Company is taxed as a "partnership"
as defined in Section 761(a) of the Code;
(ii) all Taxes due and payable as of the Closing Date
by the Property Company, whether or not shown on a
Tax Return, have been paid or shall be paid by the
Property Company or the Contributing Parties, or
adjusted for pursuant to Article IV, and all Taxes
accrued but not yet due are shown on the Financial
Statements provided pursuant to Section 7.01(q) or
the Estimated Closing Balance Sheet or the Closing
Balance Sheet in accordance with Section 4.01 and
no Taxes are delinquent;
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(iii) no deficiency for any amount of Tax has been
asserted or assessed by a taxing authority against
the Property Company or any Contributing Party
with respect to the operations of the Property
Company and the Contributing Parties have no
Knowledge that any such assessment or asserted Tax
liability shall be made;
(iv) no audits or investigations by any taxing
authority are currently pending, or to the
Knowledge of the Contributing Parties threatened,
and to the Contributing Parties' Knowledge, the
Property Company does not reasonably expect any
taxing authority to claim or assess any additional
Taxes for any period;
(v) the Property Company has not consented to extend
the time beyond the Closing in which any Tax may
be assessed or collected by any Taxing authority;
(vi) the Property Company has not been a member of an
Affiliated Group (as defined in Section 1504 of
the Code) or any similar group defined under
local, state or foreign Tax law and has no
liability for Taxes of any other Person under
Treasury Regulations Section 1.1502-6 or any
similar provision of local, state or foreign Tax
law;
(vii) the Property Company is not a party to or, to the
Knowledge of the Contributing Parties, bound by
any Tax allocation or Tax sharing agreement and
has no contractual obligation to indemnify any
other person with respect to Taxes;
(viii) the Property Company does not have any obligation
to make any payment that will be non-deductible
under Section 280G of the Code (or any
corresponding provision of state, local or foreign
Tax law);
(ix) to the Knowledge of the Contributing Parties, no
claim has ever been made by a taxing authority in
a jurisdiction where the Property Company does not
pay Tax or file Tax Returns that the Property
Company is subject to Taxes assessed by such
jurisdiction;
(x) the Property Company has no liability for any
Taxes, if any, required to have been withheld and
paid in connection with amounts paid or owing to
any employee, creditor, independent contractor or
other third party other than amounts adjusted for
pursuant to Article IV; and
(xi) Schedule 7.01(c) contains a list of all states,
territories and jurisdictions (whether foreign or
domestic) in which the Property Company is
required to file Tax Returns.
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(d) Insurance. Schedule 7.01(d) attached hereto lists and
briefly describes each insurance policy maintained by the Property Company with
respect to its properties, assets and business. All of such insurance policies
are in full force and effect and will not, by their terms, terminate by reason
of the transactions provided for herein at Closing, and the Property Company is
not in default with respect to its obligations under any of such insurance
policies and has not received any notification of cancellation of any of such
insurance policies and has no claim outstanding which could be expected to cause
a material increase in the Property Company's insurance rates.
(e) Single-Purpose Entity. Except as set forth on Schedule
7.01(e), the Property Company, at all times since its formation has been a
Single-Purpose Entity.
(f) Leases. Schedule 7.01(f) contains a true and complete list
of all Tenant Lease(s) under which the aggregate remaining payments to the
Property Company owning the affected Hotel exceed $25,000.00, including all
addenda, amendments and modifications thereto, and the Contributing Party has
previously provided to the Partnerships true and correct copies of each such
item. Except as noted on Schedule 7.01(f): (i) the Contributing Parties have no
Knowledge that the lessor or the lessee under any Lease has failed to pay,
perform or observe any of the terms, covenants and conditions on the such
party's part to be paid, performed and observed thereunder; (ii) all brokerage,
leasing and other commissions and all other compensation and fees due and
payable in connection with the Tenant Lease(s), have been fully paid, shall be
included in the Net Working Capital adjustment at Closing in accordance with
Article IV, or shall be fully paid by the Contributing Party prior to the
Closing; (iii) except as shown on Schedule 7.01(f), no tenant has prepaid rent
for more than the following month, has received or is entitled to receive a rent
concession in connection with its tenancy, or is entitled to any work (not yet
performed) or consideration (not yet given) in connection with its tenancy, (iv)
the Property Company is the holder of the lessor's interest under each of the
Tenant Leases and has not assigned or hypothecated any of such rights other than
in respect of the Assumed Debt.
(g) Compliance With Laws. The Contributing Parties have no
Knowledge of a violation of any Legal Requirements, or any standards and
regulations of appropriate supervising Boards of Fire Underwriters and similar
agencies, bearing on construction, operation or use of the Property or any part
thereof (other than as to matters previously cured), or that any investigation
has been commenced or is contemplated respecting any such possible violation
other than as disclosed in the written information made available to the
Starwood Parties. To the Contributing Parties' Knowledge, all notices, licenses,
permits, certificates and authority required in connection with the
construction, completion, use or occupancy of the Real Property or any part
thereof by the Property Company have been obtained and are and on the Closing
Date will be in effect and in good standing. This subsection (g) shall exclude,
however, any representation concerning the Edison Crowne Plaza, or the Property
Company which owns that Hotel, with regard to all Legal Requirements which
constitute Environmental Laws.
(h) Contracts. True and complete copies of all Contracts
(including all amendments thereto) to which the Property Company is a party or
by which it is bound have been delivered to the Partnerships. Except as set
forth in Schedule 7.01(h): (i) there are no Contracts to which the Property
Company is a party or by which it is bound; (ii) the Property Company has
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complied with all material provisions of such Contracts and, to the Knowledge of
the Contributing Parties, no party thereto is in material default under any of
them; and (iii) to the Knowledge of the Contributing Parties, all such Contracts
are in full force and effect and no event has occurred which constitutes or
which with the passage of time or the giving of notice, or both, would
constitute a default under any thereof or would excuse performance by any party
thereto.
(i) Employees. Except as set forth on Schedule 7.01(i), there
are no union contracts, collective bargaining agreements or other labor
contracts affecting the Property or any of the employees thereof (other than
tenants, concessionaires or other independent contractors other than Manager).
The Property Company has no employees and to the Contributing Parties'
Knowledge, there are no employees of Manager who by reason of any Legal
Requirement, union contract, collective bargaining agreement or other Contract
would become employees of the Partnerships by reason of the acquisition of the
Property Company Interests by the Partnerships. The Property Company has no
single-employer or multi-employer defined benefit pension plans covered by Title
IV of ERISA.
(j) No Pending Condemnation Proceedings. The Contributing
Parties have no Knowledge of pending or proposed condemnation proceedings
affecting the Property or any part thereof.
(k) Real Estate Taxes. Except as set forth on Schedule
7.01(k), (i) the Property Company has not commenced any proceedings which are
pending for the reduction of the assessed valuation of the Real Property or any
portion thereof, and (ii) the Contributing Parties have no Knowledge of any
special assessment affecting the Property.
(l) No Other Interests. Except as set forth on Schedule
7.01(l), to the Knowledge of the Contributing Parties, no Person other than the
Contributing Parties has any right to acquire any interest in the Property or
any part thereof.
(m) No Litigation. Except as set forth on Schedule 7.01(m),
neither the Contributing Party, nor the Property Company is a party to, and to
the Contributing Parties' Knowledge there is no pending or threatened
litigation, claim, action or proceeding by any Person which would materially
impair the use, occupancy or value of the Property or any part thereof or which
otherwise relates to the Property or the Contributing Parties' Property Company
Interests.
(n) No Further Action; Execution and Delivery. No further
action or approval by any Person is required in order to constitute this
Agreement as a binding and enforceable obligation of each Contributing Party.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereunder on the part of the Contributing Party do not
and will not violate its Constituent Documents (if any) or the Constituent
Documents of the applicable Property Company, and do not and will not conflict
with or result in the breach of any condition or provision of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrances upon any of the property or assets of the applicable Property
Company or upon any Property Company Interest by reason of the terms of any
contract, mortgage, lien, lease, agreement, indenture, instrument or judgment to
which the Contributing Party is a party or which is binding upon the
Contributing Party or the applicable Property Company.
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(o) Good Standing. The Property Company, and each Contributing
Party which is a Person other than an individual, is duly organized, validly
existing and in good standing under the laws of the State of its organization
and the Property Company is qualified to do business and is in good standing in
the State in which the Real Property is located.
(p) Proprietary Rights. To the best of the Contributing
Parties' Knowledge, Schedule 1.02(ll) contains a true and complete list of all
Proprietary Rights (including registration numbers, where applicable) and all
license agreements (whether as licensor or licensee) relating to such
Proprietary Rights. Except as otherwise set forth in Schedule 1.02(ll), the
Property Company owns or has the right to use all Proprietary Rights currently
used by it in the Property's business as presently conducted, all of which
ownership rights are in good standing and, to the Contributing Parties'
Knowledge, uncontested. The Contributing Parties have no Knowledge of any claim,
action, proceeding or investigation pending or threatened against the Property
Company with respect to any such Proprietary Rights or that any party thereto is
in substantial default under any license or other agreement relating to such
Proprietary Rights, or that any such licenses and agreements are not valid,
enforceable and in full force and effect.
(q) Financial Statements. Representatives of the Contributing
Parties have delivered to the Starwood Parties true and complete copies of all
financial statements with respect to each of the Hotels (i) as were delivered to
the applicable Property Company by the entity from which the Property Company
acquired the Hotel, and (ii) as have been prepared by Manager on behalf of the
applicable Property Company with respect to periods since the acquisition of
such Hotel by Property Company through the four-week fiscal period which ended
November 28, 1996 (collectively, the "FINANCIAL STATEMENTS"). To the Knowledge
of the Contributing Parties, the Financial Statements for each Property Company
have been based on information contained in the Property Company's books and
records, fairly present the Property Company's financial condition and results
of operations as of the times and for the periods referred to therein, and have
been prepared in accordance with GAAP.
(r) Events Subsequent to November 28, 1996. Since November 28,
1996, to the Contributing Parties' Knowledge, there has not been any material
adverse change in the business, assets, financial condition or operating results
of the Property Company. Since that date, except as set forth on Schedule
7.01(r) attached hereto, the Property Company has conducted its business in the
ordinary course of business consistent with past custom and practice, and has
incurred no Liabilities other than in the ordinary course of business consistent
with past custom and practice. Except as hereinafter provided, this subsection
(r) shall exclude, however, any representation concerning the Edison Crowne
Plaza, or the Property Company which owns that Hotel, with regard to Liabilities
in respect of those Legal Requirements which constitute Environmental Laws,
provided that to the Contributing Parties' Knowledge, there is no material
violation of such representation as it relates to such Hotel.
(s) Absence of Undisclosed Liabilities. Except as set forth on
Schedule 7.01(s), to the Knowledge of the Contributing Parties, the Property
Company has no Liabilities of the nature required by GAAP to be shown on a
balance sheet, except for;
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(i) Liabilities reflected or reserved against on the
unaudited balance sheet of the Property Company as of November 28, 1996
in the liabilities section of such balance sheet;
(ii) Liabilities which have arisen since November 28,
1996 in the ordinary course of business of the Property Company (none
of which relates to breach of contract, default, breach of warranty,
tort, infringement, violation of any Legal Requirement, or any other
action, suit or proceeding); and
(iii) Liabilities which will be reflected or reserved
against on the Estimated Closing Balance Sheet (as provided for in
Section 4.01(a) above) or on the Closing Balance Sheet (as provided for
in Section 4.01(c) above) in the liabilities sections of such balance
sheets.
Except as hereinafter provided, this subsection (s) shall exclude, however, any
representation concerning the Edison Crowne Plaza, or the Property Company which
owns that Hotel, with regard to Liabilities in respect of those Legal
Requirements which constitute Environmental Laws, provided that to the
Contributing Parties' Knowledge, there is no material violation of such
representation as it relates to such Hotel.
(t) No "Foreign Person". The Contributing Party is not a
"foreign person," as such term is defined in Section 1445 of the Code. The sale
transaction contemplated by this Agreement is not subject to Section 897 of the
Code or to the withholding requirements of Section 1445 of the Code.
(u) Environmental Matters - No Violations.
(i) Except as to the Edison Crowne Plaza, all
environmental reports (including all revisions and updates thereto) pertaining
to the Property prepared by or on behalf of the Contributing Party or the
Property Company or otherwise in its possession or control (the "ENVIRONMENTAL
REPORTS") are listed on Schedule 7.01(u) and true and complete copies of such
Environmental Reports have been delivered to the Partnerships. As to the Edison
Crowne Plaza, to the Knowledge of the Contributing Party, Schedule 7.01(u) lists
all Environmental Reports pertaining to such Hotel which disclose material
information relating to the environmental condition of such Hotel. The
representations and warranties in Section 7.01(u)(ii) and in Section 7.01(v)
shall not apply to the Edison Crowne Plaza Hotel or to the Property Company
which owns such Hotel, and the representations and warranties in Section
7.01(g), with respect to the Edison Crowne Plaza and such Property Company shall
be limited to exclude Environmental Laws from the Legal Requirements applicable
to such representations and warranties.
(ii) Subject to Section 7.01(u)(i) above, the Contributing
Parties have no Knowledge that any condition exists on the Property as a result
of its operation or activities thereon which condition constitutes a violation
of or which will give rise to Environmental Clean-Up Liabilities or
Environmental Claims pursuant to any Environmental Laws relating to the
Property. "ENVIRONMENTAL CLEANUP LIABILITY" means any cost or expense of any
nature whatsoever required to be undertaken under or pursuant to any
Environmental Law to contain, remove, remedy, respond
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to, clean up or xxxxx any release of hazardous substance, pollutant, contaminant
or waste, or other contamination of surface water, groundwater, land surface or
subsurface strata, whether on-site or off-site, arising from activities at the
Property including, but not limited to, manufacture, generation, formulation,
processing, labeling, distribution, introduction into commerce or on-site or
off-site use, treatment, handling, storage, disposal or transportation of any
hazardous substance, pollutant, contaminant or waste, but excluding cleaning
supplies used in connection with the Hotel Business which are properly packaged
and stored, and used in compliance with all Environmental Laws.
(v) Environmental Matters - Environmental Claims. Subject to
Section 7.01(u)(i) above, except as set forth in the Environmental Reports, the
Contributing Parties have no Knowledge of any pending, threatened or
contemplated Environmental Claims affecting the Property (excluding the Edison
Crowne Plaza). "ENVIRONMENTAL CLAIMS" means any claim for reimbursement of
remediation expense, personal injury, property damage or damage to natural
resources made, asserted or prosecuted by or on behalf of any third party
(whether based on negligent acts or omissions, statutory liability, strict
liability without fault or otherwise) including, without limitation, any
governmental entity, employee, former employee or guest, or their respective
legal representatives, heirs, beneficiaries and estates, relating to or arising
out of the release of any hazardous substance, pollutant, contaminant or waste
or the violation of any Environmental Law.
(w) [Reserved]
(x) Investment Representation. The Contributing Party is
receiving the SLT OP Units and the SLC OP Units (collectively, the "UNITS") to
be delivered pursuant hereto for its own account (other than with respect to
PRISA II) with the present intention of holding such Units for purposes of
investment, and each such party has no intention of selling Units in a
distribution in violation of the federal securities laws or any applicable state
securities laws. Except for the individuals listed on Schedule 7.01(x), the
Contributing Party and, for each Contributing Party other than PRISA II which is
not an individual, each Person owning equity interests in such Contributing
Party other than PRISA II (an "EQUITY OWNER"), is an accredited investor as
defined in Rule 501 of the Securities Act (an "ACCREDITED INVESTOR") and has
sufficient knowledge and experience in financial and business matters and
investing in entities similar to the Trust, the Corporation, SLT and SLC so as
to be able to evaluate the risks and merits of its investment in SLT and SLC and
the Contributing Party, and any Equity Owner therein, has had an opportunity to
discuss the business, management and financial affairs of the Trust, the
Corporation, SLT and SLC with the management of the Trust and the Corporation.
Except for the individuals listed on Schedule 7.01(x), each Permitted Transferee
(as defined in the Transfer Restriction and Exchange Rights Agreement) is, and
immediately prior to receiving any Units will be, an Accredited Investor. The
Contributing Party and any Equity Owner therein understands that (i) the Paired
Shares and Units have not been registered under the Securities Act by reason of
their issuance in a transaction exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) thereof or Rule 505 or 506 promulgated
under the Securities Act, and (ii) upon any issuance of the Paired Shares
pursuant to the Transfer Restriction and Exchange Agreement, such Paired Shares
must be held indefinitely unless such Shares are registered upon receipt
thereof, or unless a subsequent disposition thereof is registered under the
Securities Act and applicable state securities laws or is exempt from such
registration.
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(y) Binding Effect. When executed and delivered by each
Contributing Party, the Transaction Documents required to be executed by the
respective Contributing Parties will each be duly authorized, valid and binding
upon such Contributing Party.
(z) Status of Constituent Documents. Schedule 7.01(z) sets
forth a true and complete list of each Property Company's Constituent Documents.
Each of the Property Company's Constituent Documents is in full force and
effect, and true, complete and correct copies thereof have been delivered to the
Partnerships. There are no dissolution, termination or liquidation proceedings
pending or, to the Knowledge of the Contributing Parties, contemplated with
respect to the Property Company. To the Contributing Parties' Knowledge there
are no uncured defaults or breaches by any Person under the Constituent
Documents for such Property Company.
7.02 The Partnerships' Representations and Warranties. To induce the
Contributing Parties to enter into this Agreement, each Partnership makes the
following representations and warranties, as to itself, all of which (i) are now
true and (ii) shall be true as of the Closing:
(a) Power and Authority Non-contravention, Investment. The
Partnership has full power and authority to enter into this Agreement and to
assume and perform all of its obligations hereunder; the execution and delivery
of this Agreement and the performance by the Partnership of its obligations
hereunder have been duly authorized by such action as may be required, and no
further action or approval is required in order to constitute this Agreement as
a binding and enforceable obligation of the Partnership. Neither the execution
nor delivery of this Agreement by the Partnership, nor consummation of the
transactions contemplated hereby or compliance with or fulfillment of the terms
and provisions hereof by the Partnership, will (i) conflict with, result in a
breach of the terms, conditions or provisions of, or constitute a default, an
event of default or an event creating rights of acceleration, termination or
cancellation or a loss of rights, or result in the creation or imposition of any
encumbrance upon any of the assets of the Partnerships under the Partnership's
Constituent Documents, or any other instrument, agreement, mortgage, indenture,
deed of trust, permit, concession, grant, franchise, license, judgment, order,
award, decree or other restriction of which the Partnership is a party or any of
its properties is subject or by which any of them is bound or any Legal
Requirement affecting any of them, or (ii) require the approval, consent or
authorization of, or the making of any declaration, filing or registration with,
any third party or any foreign, federal, state or local court, Government Entity
or regulatory body, by or on behalf of the Partnership, except for (A) the
applicable requirements of the gaming authorities of the State of Nevada and of
the Xxxxx County, Nevada Liquor and Gaming Licensing Board (the "NEVADA GAMING
APPROVALS") and (B) the filing of appropriate documents with the SEC under the
Securities Act. The Partnerships are receiving the Property Company Interests to
be delivered hereto for their own account with the present intention of holding
such Property Company Interests for purposes of investment, and each Partnership
has no intention of selling such Property Company Interests in a distribution in
violation of federal securities, laws or any applicable state securities laws.
The Partnerships are Accredited Investors and have sufficient knowledge and
experience in financial and business matters and investing in entities similar
to the Property Companies so as to be able to evaluate the risks and merits of
their investment in the Property Companies and the Partnerships have had an
opportunity to discuss the business, management and financial affairs of the
Property Companies with the management of the Property Companies.
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(b) Good Standing. The Partnership is duly organized, validly
existing and in good standing under the laws of the state of its formation and
are qualified to do business in all jurisdictions in which such qualification
legally is required.
(c) Binding Effect. When executed and delivered by each
Partnership, the Transaction Documents required to be executed by the
Partnership hereunder will each be duly authorized, valid and shall be binding
upon the Partnership.
(d) Status of the Constituent Documents. Schedule 7.02(d) sets
forth a true and complete list of all of the Partnerships' Constituent
Documents. Each of the Partnership's Constituent Documents is in full force and
effect, and true, complete and correct copies thereof have been delivered to the
Contributing Party. There are no dissolution, termination or liquidation
proceedings pending or, to the Knowledge of the Starwood Parties, contemplated
with respect to the Partnership. There are no uncured defaults or breaches by
the general partner or to the Knowledge of the Starwood Parties, any limited
partner under the Partnerships' Constituent Documents.
(e) No Litigation; Proceedings. Except as set forth on
Schedule 7.02(e), there are no pending or, to Starwood Parties' Knowledge,
threatened actions, suits, proceedings or claims against or affecting the
Partnership at law or in equity or before or by any Government Entity.
(f) Units. The capitalization of each of the Partnerships is
as set forth in their respective Partnership Agreements. As of December 31,
1996, 32,682,481 OP Units of each of SLC and SLT were issued and outstanding, of
which at least the OP Units of SLT and SLC set forth on Schedule 7.02(f) were
held by limited partners that are not affiliated with the Trust within the
meaning of the Department of Labor's ERISA plan asset regulation, 29 C.F.R.
Section 2510.3-101(f) (the "Plan Asset Regulation"). There are no restrictions
on the transfer of the SLT OP Units and SLC OP Units to be issued pursuant to
Section 2.03 other than those contained in the respective Partnership's
Constituent Documents, the Transfer Restriction and Exchange Rights Agreement or
the Registration Rights Agreement and those arising from federal and applicable
state securities laws. All currently issued and outstanding OP Units were duly
authorized and validly issued in accordance with the terms of the respective
Partnership's Constituent Documents and in compliance with applicable laws and
are convertible into Paired Shares in accordance with the terms of the Transfer
Restriction and Exchange Rights Agreement. Except as set forth on Schedule
7.02(f) and except as created by this Agreement, as of the date hereof, there
are no outstanding subscriptions, options, warrants, preemptive or other rights
or other arrangements or commitments obligating the Partnerships to issue any
Units. If and when issued, the Paired Shares issuable upon exchange of the Units
delivered hereunder pursuant to the Transfer Restriction and Exchange Rights
Agreement will be duly authorized, validly issued, fully paid and
non-assessable. At the Closing, upon receipt of the Property Company Interests
and Contributed Assets, the Partnerships will have transferred the Units to be
issued hereunder free and clear of all Liens (other than any Liens in favor of
the partners of the Partnership pursuant to the Partnership's Constituent
Documents), and as of the Closing, the Contributing Partners will be admitted as
limited partners of the Partnerships. The issuance of the Units to the
Contributing Parties at the Closing will not require any approval or consent of
any Person except any such approval that shall have been obtained on or prior to
the Closing. Assuming the accuracy of the representations in Section 7.01(x),
the issuance of the Units to the Contributing
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Parties hereunder is exempt from registration under the Securities Act and
applicable state securities laws.
(g) Financial Statements; Undisclosed Liabilities. True and
complete copies of (i) the audited financial statements of SLC and SLT as of
December 31, 1995, together with all related notes and schedules thereto,
accompanied by the reports thereon of SLC's and SLT's independent auditors, and
(ii) the unaudited financial statements of SLC and SLT as of September 30, 1996
and for the nine months then ended, together with all related notes and
schedules thereto (collectively, the "PARTNERSHIPS' FINANCIAL STATEMENTS"), have
been delivered to the Contributing Parties. The Partnerships' Financial
Statements were prepared in accordance with the books of account and other
financial records of SLC and SLT, present fairly the consolidated financial
condition and results of operations of SLC and SLT as of the dates thereof or
for the periods covered thereby, and have been prepared in accordance with GAAP.
Except as disclosed on Schedule 7.02(g), (i) there are no Liabilities of SLC and
SLT of the nature required by GAAP to be shown on a balance sheet, other than
Liabilities reflected or reserved against on the balance sheets of SLC and SLT
as of September 30, 1996, and (ii) Liabilities which have arisen since that date
in the ordinary course of business.
(h) Conduct in the Ordinary Course of Business. Except as set
forth on Schedule 7.02(h), since September 30, 1996, the business of each of the
Partnerships has been conducted in all material respects in the ordinary course,
consistent with past practice, and the business of each of the Partnerships will
be conducted as aforesaid through the Closing.
(i) ERISA Matters. The terms of this transaction are not
materially less favorable to PRISA II than the terms that would be available
generally in an arms'-length transaction between unrelated parties. Neither
Partnership maintains or contributes to an employee benefit plan maintained by
an employer or employee organization identified on Schedule 7.02(i).
(j) Tax Status. Each Partnership is taxable as a "partnership"
as defined in Section 7701(a) of the Code, and is not taxable as a corporation
by reason of being a publicly traded partnership within the meaning of Section
7704 of the Code.
7.03 The Corporation's Representation and Warranties. To induce the
Contributing Parties to enter into this Agreement, the Corporation makes the
following representations and warranties, all of which (i) are now true and (ii)
shall be true as of the Closing:
(a) Power and Authority, Non-contravention. The Corporation
has full power and authority to enter into this Agreement and to assume and
perform all of its obligations hereunder, the execution and delivery of this
Agreement and the performance by the Corporation of its obligations hereunder
have been duly authorized by such action as may be required, and no further
action or approval is required in order to constitute this Agreement as a
binding and enforceable obligation of the Corporation; neither the execution or
delivery of this Agreement by the Corporation, nor consummation of the
transactions contemplated hereby or compliance with or fulfillment of the terms
and provisions hereof by the Corporation, will (i) conflict with, result in a
breach of the terms, conditions or provisions of, or constitute a default, an
event of default or an event creating rights of acceleration, termination or
cancellation or a loss of rights, or result in the
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creation or imposition of any encumbrance upon any of the assets of the
Corporation, under the Corporation's Constituent Documents, the Pairing
Agreement or any other instrument, agreement, mortgage, indenture, deed of
trust, permit, concession, grant, franchise, license, judgment, order, award,
decree or other restriction of which the Corporation is a party or any of its
respective properties is subject or by which any of them is bound, or under any
Legal Requirements affecting any of them, or (ii) require the approval, consent
or authorization of, or the making of any declaration, filing or registration
with, any third party or any foreign, federal, state or local court,
Governmental Entity or regulatory body, by or on behalf of the Corporation,
except for (A) the Nevada Gaming Approvals, or (B) the filing of appropriate
documents with the SEC under the Exchange Act.
(b) Good Standing. The Corporation is duly organized, validly
existing and in good standing under the laws of the state of its formation and
is qualified to do business in all jurisdictions in which such qualification
legally is required.
(c) Binding Effect. When executed and delivered by the
Corporation, the documents required to be executed by the Corporation hereunder
will each be duly authorized, valid and shall be binding upon the Corporation.
(d) Status of the Constituent Documents. Schedule 7.03(d) sets
forth a true and complete list of the Corporation's Constituent Documents. The
Corporation's Constituent Documents are in full force and effect, and true,
complete and correct copies thereof have been delivered to the Contributing
Party. There are no dissolution, termination or liquidation proceedings pending,
or contemplated with respect to the Corporation.
(e) No Litigation; Proceedings. Except as set forth on
Schedule 7.03(e), there are no pending or, to the Starwood Parties' Knowledge,
threatened actions, suits, proceedings or claims against or affecting the
Corporation at law or in equity or before or by any Government Entity.
(f) Capitalization. As of December 31, 1996, the entire
authorized capital stock of the Corporation (the "CORPORATION SHARES") consisted
of 100,000,000 shares of which 26,718,649 were issued and outstanding and
73,281,351 shares were held in treasury. Each issued and outstanding Corporation
Share has been paired with an issued and outstanding Trust Share (as hereinafter
defined) pursuant to the terms of the Pairing Agreement. The Paired Shares
issued to the Contributing Parties at Closing will be duly authorized, validly
issued, fully paid and nonassessable and shall be issued hereunder free and
clear of all Liens. Except as set forth on Schedule 7.03(f), there are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that require the Corporation to issue, sell, or otherwise cause to become
outstanding any Corporation Shares. The Issuance of the Paired Shares to the
Contributing Parties at the Closing will not require any approval or consent of
any Person except for any such approval that shall have been obtained on or
prior to the Closing. Assuming the accuracy of the representations in Section
7.01(x), the issuance of the Paired Shares to the Contributing Parties is exempt
from registration under the Securities Act and applicable state securities laws.
There are no restrictions on the transfer of the Paired Shares other than those
in the Constituent Documents of the Trust and the Corporation, the Transfer
Restriction and Exchange
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Rights Agreement, or the Registration Rights Agreement and those arising from
federal and applicable state securities laws.
(g) Financial Statements; Undisclosed Liabilities. True and
complete copies of (i) the audited financial statements of the Corporation as of
December 31, 1995, together with all related notes and schedules thereto,
accompanied by the reports thereon of the Corporation's independent auditors,
and (ii) the unaudited financial statements of the Corporation as of September
30, 1996 and for the nine months then ended, together with all related notes and
schedules thereto (collectively, the "CORPORATION'S FINANCIAL STATEMENTS"), have
been delivered to the Contributing Parties. The Corporation's Financial
Statements were prepared in accordance with the books of account and other
financial records of the Corporation, present fairly the consolidated financial
condition and results of operations of the Corporation as of the dates thereof
or for the periods covered thereby, and have been prepared in accordance with
GAAP. Except as disclosed on Schedule 7.03(g), (i) there are no Liabilities of
the Corporation of the nature required by GAAP to be shown on a balance sheet,
other than Liabilities reflected or reserved against on the balance sheets of
the Corporation as of September 30, 1996, and (ii) Liabilities which have arisen
since that date in the ordinary course of business.
(h) Conduct in the Ordinary Course of Business. Except as set
forth on Schedule 7.03(h), since September 30, 1996, the business of the
Corporation has been conducted in all material respects in the ordinary course,
consistent with past practice, and the business of the Corporation will be
conducted as aforesaid through the Closing.
(i) SEC Documents. The SEC Documents taken as a whole do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
(j) Reservation of Shares. Upon Closing, the Corporation shall
have reserved for issuance a number of Corporation Shares equal to the number of
Paired Shares into which the SLC OP Units included in the Contribution Amount
are exchangeable pursuant to the Transfer Restriction and Exchange Rights
Agreement.
(k) ERISA Matters. The terms of this transaction are not
materially less favorable to PRISA II than the terms that would be available
generally in an arms'-length transaction between unrelated parties. The
Corporation does not maintain or contribute to an employee benefit plan
maintained by an employer or employee organization identified on Schedule
7.03(k).
7.04 The Trust's Representations and Warranties. To induce the
Contributing Parties to enter into this Agreement, the Trust makes the following
representations and warranties, all of which (i) are now true and (ii) shall be
true as of the Closing:
(a) Power and Authority, Non-contravention. The Trust has full
power and authority to enter into this Agreement and to assume and perform all
of its obligations hereunder; the execution and delivery of this Agreement and
the performance by the Trust of its obligations hereunder have been duly
authorized by such action as may be required, and no further action or approval
is required in order to constitute this Agreement as a binding and enforceable
obligation
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of the Trust; neither the execution or delivery of this Agreement by the Trust,
nor consummation of the transactions contemplated hereby or compliance with or
fulfillment of the terms and provisions hereof by the Trust, will (i) conflict
with, result in a breach of the terms, conditions or provisions of, or
constitute a default, an event of default or an event creating rights of
acceleration, termination or cancellation or a loss of rights, or result in the
creation or imposition of any encumbrance upon any of the assets of the Trust
under the Trust's Constituent Documents, the Pairing Agreement or any other
instrument, agreement, mortgage, indenture, deed of trust, permit, concession,
grant, franchise, license, judgment, order, award, decree or other restriction
to which the Trust is a party or any of its properties is subject or by which it
is bound, or under any Legal Requirements affecting it, or (ii) require the
approval, consent or authorization of, or the making of any declaration, filing
or registration with, any third party or any foreign, federal, state or local
court, Government Entity or regulatory body, by or on behalf of the Trust,
except for (A) the Nevada Gaming Approvals, or (B) the filing of appropriate
documents with the SEC under the Securities Act.
(b) Good Standing. The Trust is duly organized, validly
existing and in good standing under the laws of the state of its formation and
is qualified to do business in all jurisdictions in which such qualification
legally is required.
(c) Binding Effect. When executed and delivered by the Trust,
the documents required to be executed by the Trust hereunder will each be duly
authorized, valid and shall be binding upon each Trust.
(d) Status of the Constituent Documents. Schedule 7.04(d) sets
forth a true and complete list of the Trust's Constituent Documents. The Trust's
Constituent Documents are in full force and effect, and a true, complete and
correct copy thereof has been delivered to the Contributing Party. There are no
dissolution, termination or liquidation proceedings pending or contemplated with
respect to the Trust. The Trust has elected to be taxed as a REIT (as defined
below) for its taxable year ending December 31, 1995 and the Trust is organized
and operated in such a manner as to qualify for taxation as a "real estate
investment trust" as defined in Section 856 of the Code ("REIT") for the taxable
year ending December 31, 1995 and through the Closing Date. The Trust is
grandfathered from the application of Section 269B of the Code pursuant to
Section 136(c)(3) of the Deficit Reduction Act of 1984.
(e) No Litigation; Proceedings. Except as set forth on
Schedule 7.04(e), there are no pending or, to the Starwood Parties' Knowledge,
threatened actions, suits, proceedings or claims against or affecting the Trust
at Law or in equity or before or by any (Government Entity which would prevent
or impair the transactions contemplated hereby.
(f) Capitalization. The entire authorized shares of beneficial
interest of the Trust (the "TRUST SHARES") as of December 31, 1996 consisted of
100,000,000 shares of which 26,718,649 were issued and outstanding and
73,281,351 shares were held in treasury. Each issued and outstanding Trust Share
has been paired with an issued and outstanding of Corporation Share pursuant to
the terms of the Pairing Agreement. The Paired Shares issued to the Contributing
Parties at Closing will be duly authorized, validly issued, full paid and
non-assessable and shall be issued hereunder free and clear of all Liens. Except
as set forth on Schedule 7.04(f), there are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion rights,
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exchange rights, or other Contracts or commitments that require the Trust to
issue, sell or otherwise cause to become outstanding any Paired Shares. The
Issuance of the Paired Shares to the Contributing Parties at the Closing will
not require any approval or consent of any Person except for any such approval
that shall have been obtained on or prior to the Closing. Assuming the accuracy
of the representations in Section 7.01(x), the issuance of the Paired Shares to
the Contributing Parties is exempt from registration under the Securities Act
and applicable state securities laws. There are no restrictions on the transfer
of the Paired Shares other than those in the Constituent Documents of the Trust
and the Corporation, the Transfer Restriction and Exchange Rights Agreement, or
the Registration Rights Agreement and those arising from federal and applicable
state securities laws.
(g) Financial Statements; Undisclosed Liabilities. True and
complete copies of (i) the audited financial statements of the Trust as of
December 31, 1995, together with all related notes and schedules thereto,
accompanied by the reports thereon of the Trust's independent auditors, and (ii)
the unaudited financial statements of the Trust as of September 30, 1996 and for
the nine months then ended, together with all related notes and schedules
thereto (collectively, the "TRUST'S FINANCIAL STATEMENTS"), have been delivered
to the Contributing Parties. The Trust's Financial Statements were prepared in
accordance with the books of account and other financial records of the Trust,
present fairly the consolidated financial condition and results of operations of
the Trust as of the dates thereof or for the periods covered thereby, and have
been prepared in accordance with GAAP. Except as disclosed on Schedule 7.04(g),
(i) there are no Liabilities of the Trust of the nature required by GAAP to be
shown on a balance sheet, other than Liabilities reflected or reserved against
on the balance sheets of the Trust as of September 30, 1996, and (ii)
Liabilities which have arisen since that date in the ordinary course of
business.
(h) Conduct in the Ordinary Course of Business. Except as set
forth on Schedule 7.04(h), since September 30, 1996, the business of the Trust
has been conducted in all material respects in the ordinary course, consistent
with past practice, and the business of the Trust will be conducted as aforesaid
through the Closing.
(i) SEC Documents. The SEC Documents taken as a whole do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
(j) Reservation of Shares. Upon Closing, the Trust shall have
reserved for issuance a number of Trust Shares equal to the number of Paired
Shares into which the SLT OP Units included in the Contribution Amount are
exchangeable pursuant to the Transfer Restriction and Exchange Rights Agreement.
(k) ERISA Matters. The terms of this transaction are not less
favorable to PRISA II than the terms that would be available generally in an
arms'-length transaction between unrelated parties. The Trust does not maintain
or contribute to an employee benefit plan maintained by an employer or employee
organization identified on Schedule 7.04(k).
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ARTICLE VIII
CONDITIONS
8.01 Conditions to the Partnerships' Obligations. The obligation of the
Partnerships to acquire the Property Company Interests and the Contributed
Assets from the Contributing Parties and to pay the Contribution Amount is
subject to satisfaction prior to or simultaneously with the Closing of the
following conditions, any of which may be waived in writing in whole or in part
by the Partnerships. Subject to Section 12.05(b), a failure of the circumstances
made a condition under this Section 8.01 shall not constitute a waiver of any
covenants, warranties and representations provided for elsewhere in this
Agreement; provided, however, that notwithstanding the foregoing,
(i) the Partnerships' sole remedies in the event any
such conditions are not satisfied or waived shall be to terminate this
Agreement and receive a refund of the Deposit or to proceed as
otherwise contemplated by the provisions of Section 13.02(a); and
(ii) if Closing occurs, the liability of the
Contributing Parties in connection with any breach of the covenants,
representations or warranties provided elsewhere in this Agreement
shall be limited as provided in Section 12.05(b) and Section 14.02(a):
(a) Exchange Rights Agreement. The Contributing Parties shall
have entered into the Transfer Restriction and Exchange Rights Agreement in the
form of Exhibit "B" attached hereto (the "EXCHANGE RIGHTS AGREEMENT"), and the
Exchange Rights Agreement shall be in full force and effect.
(b) HEI Contribution. The HEI Contribution shall have been
completed in accordance with the terms of the HEI Contribution Agreement.
(c) No Material Misrepresentation etc. There shall not be any
material error, misstatement or omission in the representations or warranties
made by any Contributing Party in this Agreement.
(d) Title to Property. SLT shall have obtained from the Title
Insurer an ALTA Owners Policy of Title Insurance, Form B-1970 (or such other
form acceptable to SLT), for each of the parcels of Real Property based upon the
Title Commitments ("TITLE POLICIES").
The Title Policies will be dated as of the Closing Date and must:
(i) insure title to the applicable parcels of Real
Property and all recorded easements benefiting such parcels, subject
only to Permitted Encumbrances;
(ii) contain an "extended coverage endorsement"
insuring over the general exceptions contained customarily in such
policies; and
(iii) contain non-imputation and "Fairway"
endorsements.
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The Title Policies must not raise any material survey defect or encroachment
from or onto any of the Real Property which has not been cured or insured over
prior to the Closing. Title to the Property other than the Real Property shall
be subject to no Liens other than Permitted Encumbrances.
In addition to the requirements of the Title Policies set forth above,
the Partnerships may, at their sole cost and expense, obtain such additional
endorsements as they may desire, but the non-availability of any such optional
additional endorsements shall not constitute a failure of a condition to
Closing.
(e) Contributing Parties' Proceedings. All proceedings to be
taken by the Contributing Parties and Property Companies in connection with the
transactions contemplated by this Agreement shall have been contemplated and all
documents to be furnished by them incident thereto shall be reasonably
satisfactory in substance and in form to the Partnerships and the Partnerships'
counsel.
(f) Contributing Party's Performance, Consents. Subject to the
provisions of Section 8.01(g) regarding licenses and Section 8.01(h) regarding
License Agreements, all covenants, actions and agreements made by each
Contributing Party which are to be performed or completed on or before the
Closing shall have been performed or completed in all material respects, and all
documents to be delivered by each Contributing Party at the Closing shall have
been delivered, and each Contributing Party and Property Company shall have
received all consents, authorizations and approvals required in connection with
the transactions contemplated in this Agreement except where the failure to
obtain such consent does not and would not reasonably be expected to have a
material adverse effect on the use or value of the Property, the performance by
the affected Contributing Party of its obligations hereunder or the ability to
operate the affected Hotel after Closing in substantially the same manner in
which it is presently operated.
(g) Licenses. There shall have been issued all appropriate
licenses and/or approvals required to permit the continued operation of all
portions of the Property, including without limitation full liquor service at
the Property, from and after the Closing, provided that the Contributing Parties
and the Partnerships shall cooperate fully to effect the transfer of all
licenses, permits and approvals as of Closing, but if despite such efforts any
license cannot be transferred as of Closing, the Contributing Parties and the
Partnerships shall agree to reasonable alternate arrangements customary in the
applicable jurisdiction so as to permit the continued operation of the affected
Hotel(s) in the manner in which presently operated and Closing shall proceed as
scheduled.
(h) Franchise License Agreements. With respect to each License
Agreement, the applicable Property Company, shall have received all consents or
other relief required from the licensor thereunder to permit the transaction
contemplated hereby or shall have terminated such License Agreement effective as
of the Closing Date, provided:
(i) that the Contributing Parties and the
Partnerships shall cooperate fully to attempt to negotiate a mutually
acceptable resolution of such matters with each franchisor or licensor
under a License Agreement, but if despite such efforts such resolution
has not been fully negotiated and agreed to by Closing, the
Contributing Parties and the Partnerships shall agree to reasonable
alternate arrangements and Closing shall proceed as scheduled; and
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(ii) that any fees or capital expenditures required
to be paid under or in connection with such License Agreement as a
condition for the approval by the licensor or franchisor of the
transfer, termination or reissuance of the same shall, subject to
Section 10.01 hereof, be borne by the Partnerships.
(i) Notices. Each Contributing Party or Property Company, as
appropriate, shall execute and deliver all notices required by any Contract or
permit issued by any Governmental Entity for the transactions contemplated
herein.
(j) ERISA Limitations. Any limitations on OP Unit ownership by
the Contributing Parties reasonably necessary to comply with the Plan Asset
Regulation so as to avoid the result that the assets of SLT and/or SLC
constitute "Plan Assets" for purposes of the Plan Asset Regulation and which may
arise due to the transactions contemplated in this Agreement and in the other
Transaction Documents shall be resolved in a manner mutually satisfactory to the
Contributing Parties and the Starwood Parties. In resolving any such
limitations, the Starwood Parties and the Contributing Parties shall first
consider equal decreases in the number of OP Units and increases in the number
of Paired Shares to be issued immediately after Closing, and, if the parties do
not mutually agree to do so, the parties may alternatively agree to decrease the
number of OP Units to be delivered to the Contributing Parties pursuant to
Section 2.03 and increase the Cash portion of the Contribution Amount based on
the Closing Value of the OP Units not delivered. The parties currently
contemplate that immediately following the issuance of the OP Units at the
Closing, PRISA II shall convert approximately 1,850,000 OP Units into Paired
Shares, leaving PRISA II with approximately 1,150,000 OP Units in each of SLT
and SLC. The parties hereby agree to cooperate in all reasonable respects to
endeavor to resolve any such limitations without the necessity of increasing the
Cash portion of the Contribution Amount.
8.02 Conditions to Contributing Party's Obligations. The obligation of
the Contributing Parties to contribute the Property Company Interests and
Contributed Assets to the Partnerships is subject to satisfaction simultaneously
with the Closing of the following conditions (any of which may be waived in
whole or in part by the Contributing Parties, but only in writing at or prior to
the Closing). Subject to Section 12.05(b), a failure to discover any
circumstances made a condition under this Section 8.02 shall not constitute a
waiver of any covenants, warranties and representations provided for elsewhere
in this Agreement and the Contributing Parties sole remedies in the event any
such conditions are not satisfied or waived shall be to proceed as contemplated
by Section 13.02(b) or Article XIV.
(a) The Starwood Parties' Proceedings. All proceedings to be
taken by the Starwood Parties in connection with the transactions contemplated
by this Agreement shall have been completed and all documents to be furnished by
them incident thereto shall be reasonably satisfactory in substance and in form
to the Contributing Parties and their counsel.
(b) The Starwood Parties' Performance. All covenants, actions
and agreements made by each Starwood Party which are to be performed or
completed on or before the Closing shall have been performed or completed in all
material respects, including, without limitation, payment of the Contribution
Amount, and all documents to be delivered by each Starwood Party at the Closing
shall have been delivered, and each Starwood Party shall have received all
consents required
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in connection with the transactions contemplated in this Agreement except where
the failure to obtain such consent does not and would not reasonably be expected
to have a material adverse effect on the performance by the affected Starwood
Party of its obligations hereunder.
(c) No Material Misrepresentation etc. There shall not be any
material error, misstatement or omission in the representations or warranties
made by the Starwood Parties in this Agreement.
(d) Exchange Rights Agreement. The Starwood Parties shall have
entered into the Exchange Rights Agreement and the Exchange Rights Agreement
shall be in full force and effect.
(e) Registration Rights Agreement. The Starwood Parties shall
have entered into the Registration Rights Agreement in the form of Exhibit "C"
attached hereto (the "REGISTRATION RIGHTS AGREEMENT"), and the Registration
Rights Agreement shall be in full force and effect.
(f) [Reserved]
(g) HEI Contribution. The HEI Contribution shall have been
completed in accordance with the HEI Contribution Agreement.
(h) [Reserved]
(i) Partnership Amendments. The Contributing Parties shall
have been admitted as limited partners to SLT and SLC pursuant to the terms of
an amendment to the partnership agreements of each of SLT and SLC reflecting the
issuance of the OP Units to the Contributing Parties and their admission to the
respective Partnerships, which amendments shall be in form and substance
reasonably satisfactory to the Contributing Parties and their counsel. Such
amendments shall provide, in part, that upon receipt by the Partnerships of the
Property Company Interests and the Contributed Assets and the admission of the
Contributing Parties to the Partnerships, the Partnerships shall indemnify and
hold harmless the Contributing Parties of and from Liabilities of the Property
Company whose interests have been acquired except for any undisclosed material
Liability of such Property Company as of the Closing Date (collectively, the
"EXCLUDED LIABILITIES"); provided, however, that the Excluded Liabilities shall
not include:
(i) any Liability incurred in the ordinary course of
operating the applicable Hotel prior to the Closing Date;
(ii) any Liability disclosed by the Transaction
Documents, the Schedules or Exhibits thereto, any supplement to such
schedules or exhibits delivered to the Starwood Parties prior to
Closing, the agreements, reports or other documents referred to in any
of the foregoing, the Financial Statements, the financial statements
prepared in connection with the Net Working Capital adjustment provided
for in Article IV;
(iii) any Liability of which the Starwood Parties
otherwise had Knowledge prior to Closing; or
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(iv) any Liability incurred on or after the Closing
Date;
and the Partnerships shall be obligated to hold the Contributing Parties
harmless from all such enumerated Liabilities.
(j) ERISA Limitations. Any limitations on OP Unit ownership by
the Contributing Parties reasonably necessary to comply with the Plan Asset
Regulation so as to avoid the result that the assets of SLT and/or SLC
constitute "Plan Assets" for purposes of the Plan Asset Regulation and which may
arise due to the transactions contemplated in this Agreement and in the other
Transaction Documents shall be resolved in a manner mutually satisfactory to the
Contributing Parties and the Starwood Parties. In resolving any such
limitations, the Starwood Parties and the Contributing Parties shall first
consider equal decreases in the number of OP Units and increases in the number
of Paired Shares to be issued immediately after Closing, and, if the parties do
not mutually agree to do so, the parties may alternatively agree to decrease the
number of OP Units to be delivered to the Contributing Parties pursuant to
Section 2.03 and increase the Cash portion of the Contribution Amount based on
the Closing Value of the OP Units not delivered. The parties currently
contemplate that immediately following the issuance of the OP Units at the
Closing, PRISA II shall convert approximately 1,850,000 OP Units into Paired
Shares, leaving PRISA II with approximately 1,150,000 OP Units in each of SLT
and SLC. The parties hereby agree to cooperate in all reasonable respects to
endeavor to resolve any such limitations without the necessity of increasing the
Cash portion of the Contribution Amount.
ARTICLE IX
DOCUMENTS
9.01 The Contributing Parties' Closing Deliveries. At the closing, each
Contributing Party shall execute as necessary and deliver or cause to be
delivered the following:
(a) Assignment of Property Company Interests. Duly executed
and acknowledged Assignment and Assumption of the Property Company Interests in
form and substance reasonably satisfactory to the Parties and their counsel and
sufficient to transfer and convey all right, title and interest in, to and under
the Property Company Interests to the respective Partnerships who shall
countersign and return a copy of the same to signify such Partnership's
assumption of obligations thereunder arising after the Closing, subject to the
provisions of Section 8.02(i).
(b) Confirmation of Distribution of Contributed Assets. Copies
of duly executed instruments whereby each Property Company distributes title to
the Contributed Assets owned by such Property Company to the Contributing
Parties holding Property Company Interests therein (to permit such Contributing
Parties to contribute such assets to SLC in accordance with this Agreement).
(c) Bills of Sale and General Assignment. A duly executed and
acknowledged Xxxx of Sale and General Assignment from the Contributing Parties
in form and substance reasonably
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satisfactory to the Parties and their counsel and sufficient to transfer and
convey the Contributed Assets to SLC.
(d) Affidavits Regarding Authority, "Foreign Person".
Affidavits sworn to by each Contributing Party to the effect (1) that the
signatures on the instruments executed and delivered by such Contributing Party
in connection with the transactions contemplated hereby are sufficient to bind
such party; (2), if such Contributing Party is not an individual, that all
requisite consents or approvals to the Closing transactions required under the
applicable Constituent Documents have been obtained; (3) that the Contributing
Party is not a "foreign person" as that term is defined in Section 1445(f)(3) of
the Code; and (4) that the U.S. taxpayer identification number of each
Contributing Party is as set forth in such affidavit.
(e) Title Requirements. Subject to the Constituent Parties'
obligations under Section 3.01, any and all certificates, affidavits and other
instruments and documents which the Title Company shall reasonably require to
permit it to issue the Title Policies in the condition required herein.
(f) Transfer Tax Returns. All transfer and other tax returns
and information returns as may be required in connection with the transactions
contemplated by this Agreement, duly executed by the applicable Property
Company.
(g) [Reserved]
(h) Pay-Off Letters. Pay-off letters with respect to the
Assumed Debt indicating all sums required to satisfy and permit the discharge of
record of any lien securing the Assumed Debt.
(i) Good Standing Certificate. A Certificate (dated not more
than ten business days prior to the Closing) of the Secretary of State of the
state of formation for each Property Company as to the good standing in such
state of each of the Property Companies.
(j) Others as Reasonably Required. Such other documents as may
be reasonably required to consummate the transactions herein contemplated.
9.02 The Partnerships Closing Deliveries. The Partnerships at Closing
shall pay or cause to be paid the Contribution Amount to the Contributing
Parties and shall execute, acknowledge and/or deliver to the Contributing
Parties:
(a) Good Standing Certificate. A certificate (dated not more
than ten business days prior to the Closing) of the Secretary of State of the
State of Delaware as to the good standing of each of the Partnerships in the
State of Delaware.
(b) Partnership Amendments. The amendments to the Partnership
Agreements for SLT and SLC required by Section 8.02(i).
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(c) Affidavit. An affidavit sworn to by a general partner or
officer of each of the Partnerships to the effect that (1) the signatures on the
instruments executed and delivered by the Partnerships in connection with this
transaction are sufficient to bind the Partnerships, (2) all requisite consents
or approvals to the Closing transactions required under the applicable
Constituent Documents have been obtained, and (3) the consummation of the
transaction by the Partnerships are not prohibited or restricted in any way
either under the Constituent Documents or under Legal Requirements applicable to
the transaction.
(d) Others as Reasonably Required. Such other documents as may
be reasonably required to consummate the transactions herein contemplated.
9.03 Closing Deliveries by the Trust and the Corporation. At Closing,
each of the Trust and the Corporation shall respectively execute and deliver to
the Contributing Parties the following:
(a) Good Standing. A certificate (dated not more than ten
business days prior to the Closing) of the Secretary of State of the State of
Maryland for each of the Trust and the Corporation as to the good standing of
each of the Trust and the Corporation respectively in the State of Maryland.
(b) Paired Shares. Such stock certificates or other evidence
of the issuance of the Paired Shares, if any, to the Contributing Parties as the
Contributing Parties may reasonably request.
(c) Affidavit. Affidavits sworn to by an officer of the
Corporation and the Trust to the effect that (1) the signatures on the
instruments executed and delivered by the Corporation and Trust in connection
with this transaction are sufficient to bind the Corporation and the Trust (2)
all requisite consents or approvals to the Closing transactions required under
the applicable Constituent Documents have been obtained, and (3) the
consummation of the transaction by the Corporation and the Trust are not
prohibited or restricted in any way either under the Constituent Documents or
under Legal Requirements applicable to the transaction.
(d) Others as Reasonably Required. Such other documents as may
be reasonably required to consummate the transactions herein contemplated.
ARTICLE X
COSTS
10.01 Transaction Costs. The Partnerships and the Contributing Parties
shall each pay one-half (1/2) of the amount of all costs associated with
transfer taxes, deed stamps, gains taxes, sales or use taxes relating to the
transfer of personal property (collectively "TRANSFER COSTS") and the costs
associated with title searches and the issuance of the Title Policies (other
than optional endorsements) and preparation of surveys (collectively "TITLE
COSTS"). The Partnerships and the Contributing Parties shall each bear and pay
one-half (1/2) of any escrow costs and recording fees and charges. Fees, costs
and expenses incurred in terminating or assigning the License Agreements or in
obtaining replacement franchise agreements therefor shall be borne by the
Partnerships; provided, however, that if such costs shall exceed $500,000 with
respect to the Xxxxxxx Xxxxxxx Xxxxxx Xxxxx,
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all such costs in excess of such amount with respect to such Hotel shall be
borne equally by the Contributing Parties and the Starwood Parties. Fees, costs
and expenses incurred in connection with the issuance of all appropriate
licenses and/or approvals required to permit the continued operation of full
liquor service at the Property shall be borne by the Partnerships. All other
costs and expenses incurred by the Contributing Parties in connection herewith,
including, without limitation, all attorneys' fees and costs shall be borne by
the Contributing Parties. All other costs and expenses incurred by the Starwood
Parties in connection herewith, including, without limitation, all attorneys'
fees and costs shall be borne by the Starwood Parties.
ARTICLE XI
BROKERAGE
11.01 Broker. Each Contributing Party and each of the Starwood Parties
represents and warrants that it has not dealt with any broker in connection with
this transaction other than (i) Xxxxxxx, Sachs & Co., whose fees shall be paid
by the Contributing Parties, (ii) Prudential Securities Incorporated whose fees
shall be paid by HEI (as provided in the HEI Contribution Agreement) and (iii)
Xxxxxxx, Xxxxx & Co., whose fees shall be paid by HEI pursuant to its agreement
with Xxxxxxx, Xxxxx & Co. Each of the Starwood Parties and each Contributing
Party hereby agrees to indemnify, defend and hold the other parties to this
Agreement harmless from and against any claim, cost, damage or expense including
reasonable attorneys' fees in defense thereof, made by any other broker claiming
to have been retained by such Person in connection with the transactions
contemplated hereby.
ARTICLE XII
SCHEDULES, CLOSING, "AS IS"
12.01 Schedules. Each of the parties hereto shall cause to be prepared
and delivered to the other parties hereto all Schedules pertaining to such party
as soon as reasonably practicable after the date hereof. If, prior to 6:00 P.M.
(EST) on January 17, 1997, the Starwood Parties have not terminated this
Agreement in accordance with the following sentence, the Starwood Parties shall
be deemed to have approved such Schedules and SLT shall be obligated to
immediately increase the Deposit by $5,000,000 as provided for in Section 2.05
above. If the Schedules disclose matters which, taken as a whole, materially
adversely affect the business prospects, assets, liabilities, financial
condition or operating results of the party on whose behalf such Schedule was
submitted, then, the party for whose benefit such Schedule was submitted, may,
by notice to the party on whose behalf such Schedule was submitted, elect to
terminate this Agreement, in which event this Agreement (and all other
Transaction Documents) shall terminate and be of no further force and effect,
except for those provisions which specifically survive such termination, and the
Initial Deposit shall be returned to SLT.
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12.02 Access.
(a) Access - Partnerships. The Contributing Parties shall
permit the Partnerships and their authorized representatives at such time or
times as the Partnerships may reasonably request (and either before or after
Closing) (i) upon reasonable prior notice, to inspect, review, or copy the books
and records, including, without limitation, any financial statements
(collectively, the "PROPERTY COMPANY RECORDS") of each of the Property Companies
and/or their respective agents' relating to the ownership, management and
operation of the Property for any periods prior to the Closing Date (the
"PROPERTY COMPANY RECORDS REVIEW"), (ii) to inspect the physical condition of
the Property (the "PHYSICAL INSPECTION"), (iii) to enter the Property for the
purpose of observing the taking of any inventories and the counting of house
cash, and (iv) to schedule and perform interviews of Hotel employees, provided
that all such interviews shall be scheduled through Xxxxxx Xxx of HEI who shall
make all reasonable efforts to accommodate the Partnerships' scheduling
requests. The Contributing Parties shall cause the Property Companies to direct
the managers of the Hotels to cooperate in such investigations by the
Partnerships, and take such steps as may be reasonably within the power of the
Property Companies to compel the managers so to cooperate, and the Partnerships
shall use commercially reasonable efforts to minimize disruption to the Hotel
Business.
(b) Access - Contributing Parties. The Starwood Parties shall
permit the Contributing Parties and their authorized representatives at such
time or times as the Contributing Parties may reasonably request (and either
before or after Closing (i) upon reasonable prior notice, to inspect, review, or
copy the books and records, including, without limitation, any financial
statements (collectively, the "STARWOOD RECORDS") of each of the Starwood
Parties and/or their respective agents' relating to the ownership, management
and operation of the Starwood Parties or their hotels (the "STARWOOD RECORDS
REVIEW"), and (ii) to schedule and perform interviews of employees of the
Starwood Parties, their affiliates and managers, provided that all such
interviews shall be scheduled through Xxxxx Xxxxxxx who shall make all
reasonable efforts to accommodate the Contributing Parties' scheduling requests.
12.03 Certain Definitions. For the purposes of Section 12.02:
(a) Records (of the Property Companies or the Starwood
Parties, as applicable) shall include, without limitation, all past and current,
rent rolls, paid xxxx files, depreciation schedules, canceled checks, payroll
tax returns and any additional records reasonably requested by the Partnerships
or the Contributing Parties, as the case may be (excluding bank statements) in
the possession of the Property Companies or the Starwood Parties, or their
respective agents; and
(b) Physical Inspection may include, without limitation, the
roofs, foundation, interiors, soil, landscaping, painting, pools, dumpster pads,
heating systems, electrical systems, plumbing, sewerage systems, water supply,
painting, appliances, carpeting, drapes, clubhouse, roads, parking areas and
inspection for evidence of termite infestation and/or environmental matters.
12.04 Deliveries. The Contributing Parties shall fully cooperate with
the Partnerships and the Partnerships' representatives in making the foregoing
review, audit and inspection, and shall upon request from the Partnerships
deliver to the Partnerships such information, reports or other records
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as may be relevant to such review and within the possession of the Contributing
Parties or the Property Companies. The Starwood Parties shall fully cooperate
with the Contributing Parties and the Contributing Parties' representatives in
making the foregoing review, audit and inspection, and shall upon request from
the Partnerships deliver to the Partnerships such information, reports or other
records as may be relevant to such review and within the possession of the
Starwood Parties or the Property Companies.
12.05 Effect of Inspections, "As Is".
(a) Upon completion of the Closing, the Partnerships will be
deemed to have accepted the Property on an "As Is" basis, subject to the
provisions of Articles VII, XIV and XVI (as limited in accordance with Sections
12.05(b), 13.02(a) and 14.02(b) of this Agreement) and the terms and conditions
of the other Transaction Documents. The sole obligation of the Contributing
Parties with respect to the physical condition of the Property will be to
contribute the Property Company Interests and the Contributed Assets to the
Partnerships with the Property in substantially the same physical condition
(excluding normal wear and tear) as existed on the date of execution and
delivery of this Agreement. Subject to the provisions of Articles VII, XIV, and
XVI (as limited in accordance with Sections 12.05(b), 13.02(a) and 14.02(b) of
this Agreement), the Partnerships have agreed to accept possession of the
Property Company Interests and Contributed Assets on the Closing Date with the
Property and Hotel Business of each Hotel on an "As Is" basis. The Partnerships
and Contributing Parties agree that at Closing the Property will be "As Is,"
and, except as expressly set forth in Section 7.01 hereof, such Closing
transactions will be without representation or warranty of any kind, express or
implied (including, without limitation, warranty of income potential, operating
expenses, uses, merchantability or fitness for a particular purpose), and the
Partnerships do hereby disclaim and renounce any such representation or warranty
other than as expressly made pursuant to Section 7.01 (but subject to the
limitations and qualifications provided for in this Agreement). For purposes of
this Agreement, the term "As Is" means, as and where the Property presently
exist as of the date of execution and delivery of this Agreement, including,
without limitation, all faults, defects, claims, Liens, and other conditions of
every kind or description with respect to (a) the physical and environmental
condition of the Property and the Hotels (including defects seen and unseen and
conditions natural and artificial), (b) subject to Article III, the Property
Companies' title to the Real Property and the Hotels, (c) subject to Article
III, the Property Companies' title to the Tangible Personal Property, Intangible
Property, Proprietary Interests and Miscellaneous Interests, (d) all Legal
Requirements to which the Property is subject, (e) the financial operations of
the Hotels, demands, actions, or causes of action that relate in any way to the
Hotels or the ownership and operations thereof and, (f) all other matters
related in any way to the ownership and operation of the Property and the
Hotels, whether known or unknown, subject in each case to the obligations of the
Contributing Parties under Articles VII, XIV and XVI (as limited in accordance
with Sections 12.05(b), 13.02(a) and 14.02(b) of this Agreement) and the terms
of the other Transaction Documents.
(b) The right of inspection, review and audit referred to in
Section 12.02(a) of this Agreement, and the exercise of such right by the
Partnerships shall not constitute a waiver by the Partnerships of the breach of
any covenant, representations or warranty of the Contributing Parties; provided,
however, that if the Starwood Parties have Knowledge of any such breach at the
time of Closing, and elect to complete the Closing in accordance with the terms
hereof notwithstanding such
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Knowledge, then the Starwood Parties shall irrevocably be deemed to have waived
any such breach of which the Starwood Parties had Knowledge at Closing.
Likewise, the review, investigation and analysis of the Starwood Parties, the OP
Units and the Paired Shares by the Contributing Parties shall not constitute a
waiver by the Contributing Parties of the breach of any covenant, representation
or warranty of the Starwood Parties; provided, however, that if the Contributing
Parties have Knowledge of any such breach at the time of Closing, and elect to
complete the Closing notwithstanding such Knowledge, then the Contributing
Parties shall irrevocably be deemed to have waived any such breach of which the
Contributing Parties had Knowledge at Closing. For purposes of this Section
12.05(b) and Article XIII and XIV, Knowledge with respect to a party shall
include the present actual Knowledge of the individual attorneys actively
representing such party in connection with the transactions contemplated hereby.
(c) [Reserved]
12.06 Delivery of Property Company Records. The Contributing Parties
shall cause the Property Company Records to remain with the Property Companies
upon the contribution of the Property Company Interests and Contributed Assets
to the Partnerships at Closing. The Partnerships agree for a period of five (5)
years subsequent to the Closing Date, upon request of the Contributing Parties,
to make available to the Contributing Parties all information and statements in
the Partnerships' possession (including, without limitation, the Property
Company Records) with regard to any period prior to the Closing Date which may
be reasonably required by the Contributing Parties in connection with the
Property Companies' control of the Property or the operation thereof.
12.07 The Partnerships' Indemnification. The Partnerships agree to
indemnify, defend and hold the Contributing Parties harmless from and against
any claim, damage or expense, including reasonable attorneys' fees, incurred by
the Contributing Parties and arising from the Partnerships' entry upon the
Property for the performance of the Partnerships' due diligence reviews and such
indemnification shall survive the Closing or termination of this Agreement.
12.08 Date and Location Closing. The Closing of the transactions
contemplated by this Agreement (the "CLOSING") shall take place on January 31,
1997 at 10:00 a.m. at the offices of Xxxxxxxx & Xxxxx, 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, XX, or at such other time and place as the parties may mutually determine
(the "CLOSING DATE"), provided that either party hereto may adjourn the Closing
for a period not to exceed thirty (30) days for the purpose of obtaining the
consents required pursuant to Section 8.01(h) (provided that such period shall
be sixty (60) days with respect to the consent required from Hilton Hotels
Corp.)
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ARTICLE XIII
XXXXXXX MONEY, DEFAULT AND REMEDIES
13.01 Duties of Escrow Agent. The duties of Escrow Agent will be as
provided in the Escrow Agreement and shall include:
(a) Xxxxxxx Money Deposits. During the term of this Agreement,
Escrow Agent will hold, deposit, invest and deliver the Deposits in accordance
with the terms and provisions of this Agreement.
(b) Disputes. If this Agreement is terminated by the mutual
written agreement of the Contributing Parties and the Starwood Parties, or if
Escrow Agent is unable to determine at any time to whom any of the Deposit
should be delivered, or if a dispute develops between the Contributing Parties
and the Starwood Parties concerning to whom the Deposit should be delivered,
then in any such event, Escrow Agent will request joint written instructions
from the Contributing Parties and the Starwood Parties and will deliver the
Deposit in accordance with such joint written instructions. In the event that
such written instructions are not received by Escrow Agent within ten (10) days
after Escrow Agent has served a written request for instructions upon the
Contributing Parties and the Starwood Parties, Escrow Agent will have the right
to pay the Deposit into a court of competent jurisdiction and interplead the
Contributing Parties and the Starwood Parties in respect thereof, and thereafter
Escrow Agent will be discharged of any obligations in connection with this
Agreement.
(c) Costs. If costs or expenses are incurred by Escrow Agent
because of litigation or a dispute between the Contributing Parties and the
Starwood Parties arising out of the holding of the Deposit in escrow, the
Contributing Parties and the Starwood Parties will each pay Escrow Agent
one-half of such reasonable and direct costs and expenses. Except for such costs
and expenses, no fee or charge will be due or payable to Escrow Agent for its
services as escrow holder other than its usual and customary investment fees, if
any.
(d) Limited Duties. By joining in the Escrow Agreement, Escrow
Agent undertakes only to perform the duties and obligations imposed upon it
under the terms of the Escrow Agreement and expressly does not undertake to
perform any of the other covenants, terms and provisions incumbent upon the
Contributing Parties and the Starwood Parties hereunder.
(e) Liability. The Starwood Parties and the Contributing
Parties hereby agree and acknowledge that Escrow Agent assumes no liability in
connection herewith except for gross negligence or willful misconduct; that
Escrow Agent will never be responsible for the validity, correctness or
genuineness of any document or notice referred to under this Agreement; and that
Escrow Agent may seek advice from its own counsel and will be fully protected in
any action taken by it in good faith in accordance with the opinion of its
counsel.
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13.02 Default.
(a) Contributing Parties Default. Notwithstanding any other
provision of this Agreement, if the Contributing Parties, or any one of them,
fail to perform any of their material obligations or agreements within fifteen
(15) days following written demand for such performance contained herein and if
the Starwood Parties are not then in default of any of their material
obligations and agreements contained herein, then as their sole and exclusive
remedy the Starwood Parties may elect to:
(i) terminate this Agreement by giving written notice
of termination and the reasons therefor to the Contributing Parties, in
which event neither the Contributing Parties nor the Starwood Parties
will have any further obligations or liabilities one to the other
hereunder (except for any indemnity of one party by the other which
expressly survives Closing or termination of this Agreement), and the
Contributing Parties and Escrow Agent will immediately thereafter
return the entire Deposit to SLT and the Contributing Parties shall
reimburse the Starwood Parties for all Pursuit Costs actually incurred
by the Starwood Parties in pursuing the transactions contemplated
hereby up to an amount not to exceed One Million Dollars ($1,000,000);
(ii) waive such default and complete the Closing as
contemplated by this Agreement without any adjustment to or reduction
in the Contribution Amount as a result of such default (except to the
extent to the same affects the Net Working Capital Adjustment pursuant
to Section 4.01); or
(iii) waive all other actions, rights or claims for
damages, other than costs and expenses incurred in enforcing this
Agreement and bring an equitable action for specific performance of the
terms of this Agreement (i.e., to compel any Contributing Party to
comply with its covenants under this Agreement).
If the Starwood Parties shall elect to proceed pursuant to clause (iii) above
and shall successfully prosecute such action for specific performance, the
Contributing Parties shall reimburse the Starwood Parties for all fees, costs
and expenses incurred in prosecuting such action including, without limitation,
reasonable attorneys fees, but if the Contributing Parties shall prevail in any
such action, the Starwood Parties shall reimburse the Contributing Parties for
all fees, costs and expenses incurred in defending such action including,
without limitation, reasonable attorneys fees.
(b) Starwood Parties' Default. If the Starwood Parties fail to
close the transaction contemplated hereby (except for permitted terminations set
forth herein) and the Contributing Parties are not then in default of any of
their material obligations or agreements contained herein, then the Contributing
Parties' sole option hereunder will be to terminate this Agreement, whereupon
Escrow Agent will pay the Deposit to the Contributing Parties as liquidated
damages, and the Starwood Parties will have no further obligations or
liabilities hereunder (except for any indemnity or liability specifically stated
to survive termination of this Agreement). The Contributing Parties' election to
receive the Deposit as liquidated damages is agreed to due to the difficulty,
inconvenience, and uncertainty of ascertaining actual damages for such breach by
the Starwood Parties and the Starwood Parties agree that the same is a
reasonable and fair estimate of such damages. The Starwood Parties
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waive and release any right to (and covenant that they will not) xxx the
Contributing Parties or the Property Companies or seek or claim a refund of all
or any portion of the Deposit on the grounds that it is unreasonable in amount
and exceeds the Contributing Parties' actual damages or that its retention by
the Contributing Parties constitutes a penalty.
(c) [Reserved]
ARTICLE XIV
INDEMNIFICATION
14.01 Survival. Subject to the provisions of Section 12.05(b) and
Section 13.02, and to the completion of the Closing, all representations,
warranties, covenants and agreements set forth in the Transaction Documents or
in any certificate or other writing delivered in connection with the Transaction
Documents shall survive such Closing, and the consummation of the transactions
contemplated thereby notwithstanding any examination made for or on behalf of
the Starwood Parties or the Contributing Parties; provided that the Contributing
Parties' obligation to indemnify the Starwood Parties and the Starwood Parties'
obligation to indemnify the Contributing Parties in respect of breaches thereof
shall be subject to the limitations set forth below. The provisions of this
Article XIV shall apply only after Closing, and none of the Starwood Parties,
the Contributing Parties or the Property Companies shall have any liability or
obligation under the provisions of this Article XIV unless and until the Closing
occurs.
14.02 Indemnification by Contributing Parties.
(a) Subject to the provisions of Sections 12.05(b) and
13.02(a), and the limitations set forth in Section 14.02(b) below, as the
exclusive remedy of the Starwood Parties under this Agreement after Closing, the
Contributing Parties hereby jointly and severally (except as otherwise provided
in Section 7.01(b)(ii) above, with respect to the representations and warranties
therein made severally by the Contributing Parties and as to which the
indemnification obligations created hereby shall also be several), agree to
indemnify each of the Starwood Parties (who for purposes of this Article XIV,
shall include each of their respective Affiliates, officers, directors,
partners, employees, agents, representatives, successors and permitted assigns)
and hold each of them harmless against and pay on behalf of or reimburse such
Starwood Parties in respect of any liability (including, without limitation,
interest, penalties, reasonable attorneys fees and expenses, court costs and
amounts paid in investigation, defense or settlement of any of the foregoing)
(collectively, "LOSSES") which any such Starwood Party may suffer, sustain or
become subject to, as a result of, in connection with, relating or incidental to
or by virtue of the breach of any covenant, representation or warranty made by
the Contributing Parties under this Agreement (a "BREACH").
(b) The indemnification provided for in Section 14.02(a) above
is subject to the following limitations:
(i) Each Contributing Party will be liable to the
Starwood Parties under Section 14.02(a) with
respect to a Breach only (a) if Starwood Parties
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had no Knowledge of such Breach on or before the
Closing Date; and (b) the Starwood Parties give
the Contributing Party written notice of such
claim under Section 14.02(a):
(A) within the earlier of (i) six months after the
Closing Date or (ii) thirty (30) days
following completion of the final
determination of Closing Net Working Capital
of any Property Company pursuant to Section
4.01(d) for claims arising from or relating to
any Breach except a breach of the
representations and warranties of Contributing
Parties under Sections 7.01(b)(i), (b)(ii),
(e), (n) or (x);
(B) within twelve (12) months after the Closing
Date for claims arising from or relating to
any breaches of the representations and
warranties of the Contributing Parties under
Section 7.01(b)(i);
(C) Within eighteen (18) months after the Closing
Date for claims arising from or relating to
any breaches of the representations and
warranties of the Contributing Parties under
Section 7.01(e); or
(D) at any time after the Closing Date for claims
arising from or relating to any breaches of
the representations and warranties of the
Contributing Parties under Sections 7.01
(b)(ii), or (x).
(ii) The Contributing Parties will not be liable for
any Loss arising from any Breach unless and until
the aggregate amount of all such Losses relating
to all such Breaches exceeds $100,000 (the
"THRESHOLD"), in which case the Contributing
Parties, shall be liable for the amount of all
such Losses in excess of the Threshold; provided
that the aggregate liability of the Contributing
Parties hereunder shall not exceed: (i) $500,000
in respect of Losses relating to any single Hotel;
and (ii) $2,750,000 (the "CAP AMOUNT") in respect
of all Losses for which indemnification is sought
by the Starwood Parties pursuant hereto.
14.03 Indemnification by Starwood Parties.
(a) Subject to the provisions of Sections 12.05(b) and
13.02(a), and the limitations set forth in Section 14.03(b) below, as the
exclusive remedy of the Contributing Parties under this Agreement after Closing,
the Starwood Parties hereby jointly and severally agree to indemnify each of the
Contributing Parties (who for purposes of this Article XIV, shall include each
of their respective Affiliates, officers, directors, partners, employees,
agents, representatives, successors and permitted assigns) and hold each of them
harmless against and pay on behalf of or reimburse such Contributing Parties in
respect of any liability (including, without limitation, interest,
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penalties, reasonable attorneys fees and expenses, court costs and amounts paid
in investigation, defense or settlement of any of the foregoing) (collectively,
"LOSSES") which any such Contributing Party may suffer, sustain or become
subject to, as a result of, in connection with, relating or incidental to or by
virtue of the breach of any covenant, representation or warranty made by the
Starwood Parties under this Agreement (a "BREACH").
(b) The Indemnification provided for in Section 14.03(a) above
is subject to the following limitations;
(i) Each Starwood Party will be liable to the
Contributing Parties with respect to claims
referred to in subsection (a)(i) above only if (a)
the Contributing Parties had no Knowledge of such
claim on or before the Closing Date and (b); if
the Contributing Parties give the Starwood Parties
written notice of such claim:
(A) within the earlier of (i) six months after the
Closing Date or (ii) thirty (30) days
following completion of the final
determination of Closing Net Working Capital
of any Property Company pursuant to Section
4.01(d) for claims arising from or relating to
breaches of the representations and warranties
set forth in Sections 7.02 (e), (g), and (h),
7.03 (e), (g), and (h) and 7.04 (e) (g) and
(h);
(B) within twelve (12) months after the Closing
Date for claims arising from or relating to
any breaches of the representations and
warranties set forth in Section 7.03(f) or
7.04(f);
(C) at any time after the Closing Date for claims
arising from or relating to breaches of the
representations and warranties set forth in
Section 7.02(a) - (d), (f), or (i) - (j), 7.03
(a) - (d), or (i) - (k) or 7.04 (a) - (d), or
(i) - (k).
(ii) The Starwood Parties will not be liable for any
Loss arising from any breach of any covenant,
representation or warranty contained in this
Agreement or any Schedule or Exhibit hereto unless
and until the aggregate amount of all such Losses
relating to all such breaches exceeds the
Threshold, in which case the Starwood Parties,
shall be liable for the amount of all such Losses
in excess of the Threshold; subject to a maximum
aggregate liability for all such Losses in the
amount of the Cap Amount.
14.04 Procedures.
(a) If a party hereto seeks indemnification under this Article
XIV such party (the "INDEMNIFIED PARTY") shall give written notice to the other
party (the "INDEMNIFYING PARTY") of the facts and circumstances giving rise to
the claim. In that regard, if any suit, action, claim, liability or obligations
shall be brought or asserted by any third party which, if adversely determined,
would
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entitle the Indemnified Party to indemnity pursuant to this Article XIV, the
Indemnified Party shall promptly notify the Indemnifying Party of the same in
writing, specifying in detail the basis of such claim and the facts pertaining
thereto and the Indemnifying Party, if it so elects, shall assume and control
the defense thereof (and shall consult with the Indemnified Party with respect
thereto), including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all necessary expenses; provided that the
Indemnifying Party shall not have the right to assume control of such defense if
the claim which the Indemnifying Party seeks to assume control (1) seeks
non-monetary relief; or (2) involves criminal or quasi-criminal allegations. In
the event that the Indemnified Party retains control of the defense of such
claim, the Indemnified Party shall use good faith efforts, consistent with
prudent business judgment, to defend such claim. If the Indemnifying Party is
permitted to assume and control the defense and elects to do so, the Indemnified
Party shall have the right to employ counsel separate from counsel employed by
the Indemnifying Party in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel employed by the Indemnified
Party shall be at the expense of the Indemnified Party unless (A) the employment
thereof has been specifically authorized by the Indemnifying Party in writing,
(B) the Indemnifying Party has been advised by counsel that a reasonable
likelihood exists of a conflict of interest between the Indemnifying Party and
the Indemnified Party and such counsel advises the Indemnifying Party of the
general nature of such conflict, (C) the Indemnifying Party has failed to assume
the defense and employ counsel, or (D) the Indemnified Party has reasonably
determined that an adverse outcome could have a material adverse effect on its
business, reputation or could reasonably be expected to have a materially
adverse precedential effect; in which case the fees and expenses of the
Indemnified Party's counsel shall be paid by the Indemnifying Party. The
Indemnifying Party shall not be liable for any settlement of any such action or
proceeding effected without the written consent of the Indemnifying Party,
however, if there shall be a final judgment for the plaintiff in any such
action, the Indemnifying Party agrees to indemnify and hold harmless the
Indemnified Party from and against any loss or liability by reason of such
judgment.
(b) In the event any Indemnified Party which is an individual,
or any senior officer (including, without limitation, any president or
vice-president) of any other Indemnified Party or any general partner or member
thereof, has actual knowledge of any valid claim or defense (and not merely any
facts or circumstances which may give rise to such claim or defense) against a
third party who is a party to the applicable claim in connection with any Loss
as to which such Indemnified Party seeks indemnification pursuant to this
Article XIV and such Indemnified Party without good reason fails to notify the
Indemnifying Party of such claim or defense or without good reason fails to
assert such claim or defense on its own behalf, then the Indemnified Party shall
not be entitled to receive indemnification from the Indemnifying Party to the
extent of the Loss which is proven by the Indemnifying Party to have been
occasioned by such failure to notify or such failure to assert such claim or
defense. The determination of whether a party had "good reason" for failure to
notify or failure to assert any claim or defense shall be made by the Arbitrator
pursuant to subsection (i) below.
(c) In the event any Indemnified Party is insured pursuant to
an unexpired insurance policy against any occurrence giving rise to any Loss as
to which such Indemnified Party seeks indemnification pursuant to this Article
XIV (including, without limitation, pursuant to any insurance policy maintained
by any Property Company before or after Closing), the Indemnified
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Party shall promptly give notice of such insurance coverage to the Indemnifying
Party and the Indemnifying Party shall, in its reasonable discretion, elect
either (i) to require the Indemnified Party to make a claim pursuant to such
insurance policy for such Loss and the Indemnifying Party's obligation to
indemnify the Indemnified Party shall thereafter be reduced by the amount of
insurance proceeds received by the Indemnified Party as a result of such claim
or (ii) to indemnify the Indemnified Party without requiring a claim to be made
by the Indemnified Party on such insurance policy. In the event the Indemnifying
Party elects to require the Indemnified Party to make a claim on such insurance
policy pursuant to clause (i) above, the Indemnifying Party shall pay any
increase in insurance premiums resulting directly and proximately from such
claim by the Indemnified Party on such insurance policy; provided that if any
such increase in such insurance premium is caused by one or more claims on such
insurance policy as a result of Losses which are not subject to indemnification
pursuant to this Article XIV, then the Indemnifying Party shall be obligated to
pay such increase in insurance premiums only to the extent such increase is
attributable to claims made by the Indemnified Party pursuant to clause (i)
above. The determination of the amount of such increase in insurance premiums
attributable to any claim made pursuant to clause (i) above shall be made by the
mutual agreement of the Parties acting in good faith, and in the event the
Parties are unable to so agree shall be made by the Arbitrator pursuant to
subsection (i) below. The Indemnified Party shall provide to the Indemnifying
Party such documentation relating to such increase in insurance premium as shall
be necessary to establish the amount of such increase and shall otherwise
cooperate with the Indemnifying Party in establishing the amount of such
increase attributable to the claim made pursuant to clause (i) above.
(d) In the event that the Starwood Parties are entitled to any
indemnification hereunder from the Contributing Parties, within 15 days after a
final determination of the amount of such indemnification pursuant to the terms
of this Article XIV (the "INDEMNIFICATION AMOUNTS"), the Contributing Parties
shall make an election to pay (and shall pay) such Indemnification Amount either
(i) by payment of immediately available funds to the Starwood Parties or (ii) by
delivering or causing the Partnerships to cancel on their respective books and
records an equal number of SLT OP Units and SLC OP Units held by the
Contributing Parties having a current market value (based upon the Paired Share
price as of the date of the final determination of such Indemnification Amount)
equal to the Indemnification Amount, and to the extent such delivery or
cancellation of SLT OP Units and SLC OP Units is insufficient to pay such
Indemnification Amount, immediately available funds for the remaining balance of
such Indemnification Amount. In the event that the Contributing Parties are
entitled to any indemnification hereunder from the Starwood Parties, within 15
days after a final determination of the amount of such indemnification pursuant
to the terms of this Article XIV, the Starwood Parties shall satisfy such
obligation by payment of immediately available funds to the Contributing
Parties.
(e) Any dispute, controversy, or claim arising under or
relating to this Article XIV ("DISPUTE") shall be resolved by final and binding
arbitration administered by the American Arbitration Association ("AAA") under
its Commercial Arbitration Rules, subject to the following:
(i) Either party may demand that any Dispute be
submitted to binding arbitration. The demand for arbitration shall be
in writing, shall be served on the other party in the manner prescribed
herein for the giving of notices, and shall set forth a short statement
of the factual basis for the claim, specifying the matter or matters to
be arbitrated.
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(ii) The arbitration shall be conducted by an
arbitrator appointed by the AAA (the "ARBITRATOR") who shall conduct
such evidentiary or other hearings as such arbitrator deems necessary
or appropriate and thereafter shall make a final determination as soon
as practicable. Any arbitration pursuant hereto shall be conducted by
the Arbitrator as the parties may mutually agree or, if the parties do
not so agree, under the guidance of the Federal Rules of Civil
Procedure and the Federal Rules of Evidence, but the Arbitrator shall
not be required to comply strictly with such Rules in conducting any
such arbitration. All such arbitration proceedings shall take place in
New York, New York.
(iii) Except as provided herein:
(A) each party shall bear its own "COSTS AND
FEES," which are defined as all reasonable pre-award expenses
of the arbitration, including travel expenses, out-of-pocket
expenses (including but not limited to, copying and telephone)
witness fees, and reasonable attorney's fees and expenses;
(B) the fees and expenses of the Arbitrator
and all other costs and expenses incurred in connection with
the arbitration ("ARBITRATION EXPENSES") shall be borne
equally by the parties; and
(C) notwithstanding the foregoing, the
Arbitrator shall be empowered to require any one or more of
the parties to bear all or any portion of such Costs and Fees
and/or the fees and expenses of the Arbitrator in the event
that the Arbitrator determines such party has acted
unreasonably or in bad faith.
(iv) The Arbitrator shall have the authority to award
damages, including costs but shall not have the authority to award
punitive damages, to impose sanctions for abuse or frustration of the
arbitration process, or to compel specific performance. The decision of
the Arbitrator and any award pursuant thereto shall be in writing and
counterpart copies thereof shall be delivered to each party. The
decision and award of the Arbitrator shall be binding on all parties.
In rendering such decision and award, the Arbitrator shall not add to,
subtract from or otherwise modify the provisions of this Article XIV.
Either party to the arbitration may seek to have judgment upon the
award rendered by the Arbitrator entered in any court having
jurisdiction thereof.
(v) Each party agrees that it will not file any suit,
motion, petition or otherwise commence any legal action or proceeding
for any matter which is required to be submitted to arbitration as
contemplated herein except in connection with the enforcement of an
award rendered by the Arbitrator and except to seek non-monetary
equitable relief including, with limitation, the issuance of an
injunction or temporary restraining order pending a final determination
by the Arbitrator. Upon the entry of any order dismissing or staying
any action or proceeding filed contrary to the preceding sentence, the
party which filed such action or proceeding shall promptly pay to the
other party the reasonable attorney's fees, costs and expenses incurred
by such other party prior to the entry of such order.
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(vi) All aspects of the arbitration shall be
considered confidential and shall not be disseminated by any party with
the exception of the ability and opportunity to prosecute its claim or
assert its defense to any such claim. The Arbitrator shall be required
to issue prescriptive orders as may be required to enforce and maintain
this covenant of confidentiality during the course of the arbitration
and after the conclusion of same so that the result and the underlying
data, information, materials and other evidence are forever withheld
from public dissemination with the exception of its subpoena by a court
of competence jurisdiction in an unrelated proceeding brought by a
third party.
(f) Nothing in this Article XIV shall limit or restrict any
party's right to maintain or recover on any action based upon fraud.
ARTICLE XV
FURTHER ASSURANCES
15.01 Further Assurances. The Contributing Parties, the Property
Companies and the Starwood Parties, at or after Closing, and without further
consideration, shall execute, acknowledge and deliver to the other such other
documents and instruments, and take such other actions, as either shall
reasonably request or as may be necessary more effectively to transfer to the
Partnerships the Property in accordance with this Agreement.
ARTICLE XVI
PRE-CLOSING OPERATIONS
16.01 Contributing Party's Conduct of Business. Except as required by
applicable Legal Requirements, until the Closing or earlier termination of this
Agreement, each Contributing Party shall with respect to the Property Company in
which it owns Property Company Interests:
(a) operate or cause HEI as manager, to operate the Property
in accordance with the terms of the Management Agreements applicable
thereto diligently and only in the ordinary course of business
consistent with past practices so as to preserve its business and
goodwill intact, and reserve for the Partnerships the goodwill and
relationships of the Property Companies with their suppliers, tenants,
and others having relations with them and so as to: (i) maintain the
Property in material compliance with all Legal Requirements; (ii)
maintain all insurance presently maintained thereon in full force and
effect, and (iii) comply in all material respects with any License
Agreement applicable to each Hotel;
(b) not sell, transfer, pledge or convey any Property Company
Interest (except for distributions to the holders of equity interests
in a Contributing Party), or permit the Property Company or HEI, except
in the ordinary course of business, to sell, assign, or convey any
right, title, or interest whatever in or to the Property or any part
thereof, or any Inventory or
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create or permit to exist any Lien thereon without promptly discharging
the same (other than in the ordinary course of business) or with
respect to Permitted Encumbrances;
(c) promptly inform the Partnerships in writing of any
variances from the representations and warranties contained in Section
7.01;
(d) use reasonable efforts to cooperate with the Partnerships
in order to attempt to obtain all third party and governmental
approvals and consents necessary or desirable to consummate the
transactions contemplated hereby and to cause the other conditions to
the parties obligations hereunder to be satisfied; and
(e) maintain its books, accounts and records in accordance
with GAAP consistently applied.
16.02 On-Site Representative. After the date of execution and delivery
of this Agreement, the Partnerships shall be entitled to have their
representatives on-site at the Hotels to participate in and receive all
information pertaining to the operation and management of each Hotel Business,
and the parties shall reasonably cooperate in such efforts.
ARTICLE XVII
NOTICES
17.01 Procedure for Notice. All notices, demands, consents, approvals
and other communications which are required or desired to be given hereunder
shall be in writing and shall be sent by Federal Express or other similar
courier, with a simultaneous copy by facsimile transmission, to the recipient as
set forth below or at such other address as such parties shall have last
designated by notice to the other:
IF TO THE CONTRIBUTING PARTIES:
c/o HEI Hotels LLC
00 Xxxxxx Xxxxx Xxxx
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Fax No. 203/000-0000
c/o Prudential Real Estate Investors
0 Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx (Fax: 201/000-0000)
Xxxxxx X. Xxxxxxxx, Esq. (Fax: 201/000-0000)
Xxxxx X. Xxxxxx, Esq. (Fax: 201/000-0000)
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with copies to:
O'Melveny & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq. (Fax No. 212/000-0000)
Xxxxxxx X. Xxxxxx, Esq. (Fax No. 213/000-0000)
Willkie, Xxxx & Xxxxxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxx, Esq.
Fax No. 212/000-0000
IF TO THE STARWOOD PARTIES:
SLT Operating Limited Partnership
c/o Starwood Lodging Trust
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
SLC Operating Limited Partnership
c/o Starwood Lodging Corporation
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxx Xxxxxxxx, Esq.
Starwood Lodging Trust
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
Starwood Lodging Corporation
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxx Xxxxxxxx, Esq.
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WITH COPIES TO:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Sidley & Austin
000 Xxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telephone: 213/000-0000
Telecopy: 213/896-6600
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Notices signed by the parties' respective attorneys shall be deemed sufficient
within the meaning of this Section without the signatures of the parties
themselves. Notices, demands, consents, approvals, and other communications
shall be deemed given one (1) day after delivery to such courier. During the
existence of a strike, notice and other communications may be given by personal
service and such notices and communications shall be effective when delivered.
ARTICLE XVIII
ADDITIONAL COVENANTS
18.01 Board Representation.
(a) Not later than fifteen (15) days after the Closing Date,
the Trust shall: (i) take all necessary action, if any, to increase the
number of trustees of the Trust by two, and (ii), subject to the Nevada
Gaming Approvals, nominate and support for election to the board of
trustees of the Trust Xxxx X. Xxxxxxx and Xxxxx X. Xxxxx.
(b) For so long as PRISA II shall maintain the Minimum Share
Ownership, PRISA II shall continue to be entitled to designate, subject
to the Nevada Gaming Approvals, one representative to be nominated for
election to the board of trustees of the Trust, and the Trust shall
cause the board of trustees of the Trust to so nominate such designee,
and to support such nomination along with the other nominees of
management and the board of directors, for election to the board of
trustees of the Trust at any annual or special meeting of the
shareholders of the Trust called for the purpose of electing trustees.
Xxxxx Xxxxx is the individual so designated by PRISA II as of the date
of this Agreement. If the representative designated by PRISA II shall
be elected to the board of trustees of the Trust, such right of PRISA
II shall be suspended until such representative is up for re-election
or the seat occupied thereby otherwise becomes vacant. Upon the death,
disability, retirement, removal (with or without cause) or resignation
of any such trustee designated by PRISA II, PRISA II shall have the
right to designate a replacement for such individual to fill such
capacity and
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serve as a trustee of the Trust for the remainder of the departing
trustee's term, and the trustees of the Trust shall appoint such
replacement individual to the board of trustees of the Trust to fill
such vacancy. If PRISA II shall at any time fail to maintain the
Minimum Share Ownership, then the rights granted to PRISA II by this
Section 18.01 shall immediately terminate and the party designated by
PRISA II, if then a Trustee of the Trust, shall promptly resign such
trusteeship.
(c) The election and removal of trustees of the Trust shall at
all times remain subject to the terms and conditions of the Trust's
Constituent Documents. The provisions of this Section 18.01 shall
survive Closing.
18.02 Obligation of the Contributing Parties As to Closing Conditions.
The Contributing Parties shall use commercially reasonable efforts to satisfy or
cause to be satisfied all closing conditions pursuant to Sections 8.01 and 8.02
which are within the reasonable control of the Contributing Parties, including,
without limitation, attempting to obtain the consent, authorization or approval
of any Person required in connection with the transactions contemplated in this
Agreement. Such consents or approvals with respect to licenses and with respect
to the License Agreements shall be subject to the specific provisions of Section
8.01(g) and Section 8.01(h), respectively.
18.03 Obligation of The Starwood Parties As to Closing Conditions. The
Starwood Parties shall use commercially reasonable efforts to satisfy or cause
to be satisfied all Closing conditions pursuant to Sections 8.01 and 8.02 which
are within the reasonable control of the Starwood Parties, including, without
limitation, obtaining the consent, authorization or approval of any Person
required in connection with the transactions contemplated in this Agreement.
ARTICLE XIX
[RESERVED]
ARTICLE XX
MISCELLANEOUS
20.01 Modifications and Waivers. This Agreement may not be changed or
terminated orally. No waiver of any party of any breach hereunder shall be
deemed a waiver of any other or subsequent breach.
20.02 Governing Law. This Agreement shall be construed, interpreted and
applied in accordance with the internal laws of the State of New York without
giving effect to doctrines relating to conflicts of laws.
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20.03 Captions etc. The titles of the Articles, Sections or subsections
of this Agreement are nor convenience only and shall not be considered or
referred to in resolving questions of interpretation or construction.
20.04 Rules of Construction. This Agreement shall be construed without
regard to any presumption or other rule requiring construction against the party
causing this Agreement to be drafted. If any words or phrases in this Agreement
shall have been stricken out or otherwise eliminated, whether or not any other
words or phrases have been added, this Agreement shall be construed as if the
words or phrases so stricken out or otherwise eliminated were never included in
this Agreement and no implication or inference shall be drawn from the fact that
such words or phrases were so stricken out or otherwise eliminated. All terms
and words used in this Agreement, regardless of the number or gender in which
they are used, shall be deemed to include any other number and any other gender
as the context may require.
20.05 Successors and Assigns. This Agreement will be binding upon and
inure to the benefit of the parties hereto and to their respective heirs,
executors, administrators and successors and assigns, it being the intention of
the parties not to confer any benefits hereunder upon any other persons, firms,
corporations or other entities.
20.06 Entire Agreement. This Agreement and the Exhibits and Schedules
hereto, which are incorporated in and form a part of this Agreement, contains
all of the terms agreed upon between the parties with respect to the subject
matter hereof and supersedes all prior understandings, if any, with respect
thereto.
20.07 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which shall
constitute but one and the same instrument.
20.08 Starwood Lodging Trust. The name "Starwood Lodging Trust" is a
designation of Starwood Lodging Trust and its Trustees (as Trustees but not
personally) under a Declaration of Trust dated August 25, 1969, as amended and
restated as of June 6, 1988 and as further amended subsequent thereto, which
states that all persons dealing with Starwood Lodging Trust shall look solely to
the assets of Starwood Lodging Trust for enforcement of any claims against
Starwood Lodging Trust, and the trustees, officials, agents and security holders
of Starwood Lodging Trust assume no personal liability for obligations entered
into on behalf of Starwood Lodging Trust, and their respective individual assets
shall not be subject to the claims of any person relating to such obligations.
20.09 Confidentiality and Exclusivity.
(a) Each party acknowledges that the information, observations
and data relating to the business of the other parties hereto of a proprietary
and/or confidential nature which the such party possess or which any such party
has obtained or will obtain during the course of the transactions provided for
herein are the property of such other parties ("CONFIDENTIAL INFORMATION"). Each
party agrees that it or he shall not, directly or indirectly, use for its or his
own purposes or disclose to any third party any of such Confidential Information
without the prior written consent of the other parties, unless and to the extent
that the aforementioned matters (a) become
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generally known to and available for use by the hotel and hospitality industry
other than as a result of any party's acts or omissions to act; (b) are
rightfully received by a party from a party who was not subject to any
obligations of confidentiality; or (c) to the extent a party is required by
order of a court of competent jurisdiction (by subpoena or similar process) to
disclose or discuss any Confidential Information (provided that in such case,
such party shall promptly inform the other parties of such event, shall
cooperate with the such other parties in attempting to obtain a protective order
or to otherwise restrict such disclosure and shall only disclose Confidential
Information to the minimum extent necessary to comply with any such court
order). Notwithstanding the foregoing, after the Closing, the Starwood Parties
may use for their own purposes or disclose to any third party any Confidential
Information relating solely to the business of the Property Companies acquired
pursuant hereto without the prior written consent of the other parties hereto.
(b) During the period from the date of execution of this
Agreement to the earliest of (i) the date of termination of this Agreement, (ii)
the Closing Date, or (iii) February 15, 1997, neither the Contributing Parties
nor any Property Company will, directly or indirectly, without the prior written
consent of the Starwood Parties: (i) submit, solicit, initiate, encourage, or
pursue any proposal or offer from any Person or enter into any agreement or
accept any offer relating to any (a) reorganization, liquidation, dissolution or
recapitalization of any Property Company, (b) merger or consolidation involving
the Property Companies, (c) purchase or sale of any assets owned by, or equity
ownership interests in, any Property Company, or (d) any similar transaction or
business combination involving the Property Companies or substantially all of
the assets of any of them (each of the foregoing actions described in clauses
(a) - (d), a "RESTRICTED TRANSACTION"; or (ii) furnish any information with
respect to, assist or participate in or facilitate in any manner any Restricted
Transaction. The Contributing Parties each agree to notify the Starwood Parties
immediately if any Person makes any written proposal or offer with respect to a
Restricted Transaction to any of them or to any Property Company.
(c) The parties hereto agree that they may each suffer
irreparable harm from a breach by any other party of any of the covenants or
agreements contained herein. In the event of an alleged or threatened breach by
any party of any of the provisions of this Section 20.09, the other parties or
their successors or assigns may, in addition to all other rights and remedies
existing in their favor, apply to any court of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce or
prevent any violations of the provisions hereof. Each party agrees that the
covenants made in Section 20.09 shall be construed as an agreement independent
of any other provision of this Agreement and shall survive any order of a court
of competent jurisdiction terminating any other provision of this Agreement.
20.10 Joint Liability. The liability of SLT, SLC, SLT Financing, the
Corporation and the Trust under this Agreement shall be joint and several.
20.11 Press Releases. Except as may otherwise be required by law or
mutually agreed by the Parties, the timing and content of all press releases and
other public announcements and all announcements to the Contributing Parties'
and Property Companies customers, suppliers or licensors relating to the
transactions contemplated by the Transaction Documents shall be determined
jointly by the Starwood Parties and the Contributing Parties.
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20.12 Expiration. The offer made in this Agreement by the Starwood
Parties execute the transactions contemplated hereby shall expire, if not sooner
accepted by the Contributing Parties by execution and delivery of this
Agreement, at 5:00 P.M. E.S.T. on January 16, 1997 and shall be of no force or
effect thereafter.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
SLT:
SLT REALTY LIMITED PARTNERSHIP, a
Delaware limited partnership
By: STARWOOD LODGING TRUST, a Maryland
real estate investment trust, General Partner
By: __________________________________
Name: __________________________________
Its: __________________________________
SLT FINANCING:
SLT FINANCING PARTNERSHIP, a Delaware
general partnership
By: SLT REALTY LIMITED PARTNERSHIP, a
Delaware limited partnership
By: STARWOOD LODGING TRUST, a
Maryland real estate investment trust,
General Partner
By: __________________________________
Name: __________________________________
Its: __________________________________
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SLC:
SLT OPERATING LIMITED PARTNERSHIP,
a Delaware limited partnership
By: STARWOOD LODGING corporation, a
Maryland corporation, Managing General Partner
By: __________________________________
Name: __________________________________
Its: __________________________________
TRUST:
STARWOOD LODGING TRUST, a Maryland
real estate investment trust
By: _________________________________________
Name: _________________________________________
Its: _________________________________________
CORPORATION:
STARWOOD LODGING CORPORATION, a
Maryland corporation
By: _________________________________________
Name: _________________________________________
Its: _________________________________________
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THE PROPERTY COMPANIES
PRUDENTIAL HEI JOINT VENTURE
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
on behalf of PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II
By: ________________________________________
Xxxx X. Xxxxxxxx
Vice President
By: ATLANTA HOTEL ASSOCIATES, LP
By: HOSPITALITY EQUITY INVESTORS, INC.
Its Majority General Partner
By: ____________________________________
Xxxx X. Xxxxxxx
President
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VIRGINIA HOTEL ASSOCIATES, L.P.
By: PRUWEST NORFOLK, L.L.C., Its Partner
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
on behalf of PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II, Its Partner
By: _______________________________
Xxxx X. Xxxxxxxx
Vice President
By: WESTPORT NORFOLK ASSOCIATES LIMITED PARTNERSHIP
By: WESTPORT HOSPITALITY, INC.
Its General Partner
By: _________________________________
Xxxx X. Xxxxxxx
President
EDISON HOTEL ASSOCIATES, L.P.
By: PRUWEST EDISON, L.L.C., Its Partner
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
on behalf of PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II, Its Member
By: _______________________________
Xxxx X. Xxxxxxxx
Vice President
By: WESTPORT RARITAN, L.L.C., Its Partner
By: ___________________________________
Xxxx X. Xxxxxxx
Managing Member
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BW HOTEL REALTY, L.P.
By: PRUWEST BALTIMORE, L.L.C., Its Partner
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
on behalf of PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II, Its Member
By: ________________________________
Xxxx X. Xxxxxxxx
Vice President
By: WESTPORT BWI, L.L.C., Its Partner
By: ____________________________________
Xxxx X. Xxxxxxx
Managing Member
NOVI HOTEL ASSOCIATES, L.P.
By: PRUWEST NOVI, L.L.C., Its Partner
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
on behalf of PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II, Its Member
By: ________________________________
Xxxx X. Xxxxxxxx
Vice President
By: WESTPORT NOVI, L.L.C., Its Partner
By: _______________________________
Xxxx X. Xxxxxxx
Managing Member
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PARK RIDGE HOTEL ASSOCIATES, L.P.
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
on behalf of PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II, Its Partner
By: ____________________________________
Xxxx X. Xxxxxxxx
Vice President
By: WESTPORT PARK RIDGE, L.P., Its Partner
By: WESTPORT PARK RIDGE, L.L.C., Its General Partner
By: ______________________________
Xxxx X. Xxxxxxx
Managing Member
By: WESTPORT PARK RIDGE, L.L.C., Its Partner
By: _____________________________
Xxxx X. Xxxxxxx
Managing Member
LONG BEACH HOTEL ASSOCIATES, L.L.C.
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
on behalf of PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II, Its Member
By: __________________________________
Xxxx X. Xxxxxxxx
Vice President
By: WESTPORT LONG BEACH, L.L.C., Its Member
By: _____________________________
Xxxx X. Xxxxxxx
Managing Member
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CHARLESTON HOTEL ASSOCIATES, L.L.C.
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
on behalf of PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II, Its Member
By: ____________________________________________
Xxxx X. Xxxxxxxx
Vice President
By: WESTPORT CHARLESTON, L.L.C., Its Member
By: ____________________________________________
Xxxx X. Xxxxxxx
Managing Member
SANTA XXXX HOTEL ASSOCIATES, L.L.C.
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
on behalf of PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II, Its Member
By: ____________________________________________
Xxxx X. Xxxxxxxx
Vice President
By: WESTPORT SANTA XXXX, L.L.C., Its Member
By: ____________________________________________
Xxxx X. Xxxxxxx
Managing Member
75
CRYSTAL CITY HOTEL ASSOCIATES, L.L.C.
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
on behalf of PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II, Its Member
By: ____________________________________________
Xxxx X. Xxxxxxxx
Vice President
By: WESTPORT CRYSTAL CITY, L.L.C., Its Member
By: ____________________________________________
Xxxx X. Xxxxxxx
Managing Member
THE CONTRIBUTING PARTIES
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
ON BEHALF OF PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II
By: _________________________________________
Xxxx X. Xxxxxxxx
Vice President
ATLANTA HOTEL ASSOCIATES, LP
By: HOSPITALITY EQUITY INVESTORS, INC.
Its Majority General Partner
By: ________________________________
Xxxx X. Xxxxxxx
President
76
PRUWEST NORFOLK, L.L.C.
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
on behalf of PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II, Its Member
By: ____________________________________________
Xxxx X. Xxxxxxxx
Vice President
PRUWEST EDISON, L.L.C.
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
on behalf of PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II, Its Member
By: ____________________________________________
Xxxx X. Xxxxxxxx
Vice President
PRUWEST BALTIMORE, L.L.C.
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
on behalf of PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II, Its Member
By: ____________________________________________
Xxxx X. Xxxxxxxx
Vice President
PRUWEST NOVI, L.L.C.
By: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
on behalf of PRUDENTIAL PROPERTY INVESTMENT
SEPARATE ACCOUNT II, Its Member
By: ____________________________________________
Xxxx X. Xxxxxxxx
Vice President
77
WESTPORT NORFOLK ASSOCIATES LIMITED PARTNERSHIP
By: WESTPORT HOSPITALITY, INC.
Its General Partner
By: ____________________________________________
Xxxx X. Xxxxxxx
President
WESTPORT RARITAN, L.L.C.
By: _____________________________________________________
Xxxx X. Xxxxxxx
Managing Member
WESTPORT BWI, L.L.C.
By: _____________________________________________________
Xxxx X. Xxxxxxx
Managing Member
WESTPORT NOVI, L.L.C.
By: _____________________________________________________
Xxxx X. Xxxxxxx
Managing Member
WESTPORT PARK RIDGE, L.P.
By: WESTPORT PARK RIDGE, L.L.C., Its General Partner
By: ____________________________________________
Xxxx X. Xxxxxxx
Managing Member
00
XXXXXXXX XXXX XXXXX, X.X.X.
By: _____________________________________________________
Xxxx X. Xxxxxxx
Managing Member
WESTPORT LONG BEACH, L.L.C.
By: _____________________________________________________
Xxxx X. Xxxxxxx
Managing Member
WESTPORT CHARLESTON, L.L.C.
By: _____________________________________________________
Xxxx X. Xxxxxxx
Managing Member
WESTPORT SANTA XXXX, L.L.C.
By: _____________________________________________________
Xxxx X. Xxxxxxx
Managing Member
WESTPORT CRYSTAL CITY, L.L.C.
By: _____________________________________________________
Xxxx X. Xxxxxxx
Managing Member
WESTPORT HOSPITALITY, INC.
By: _____________________________________________________
Xxxx X. Xxxxxxx
President
79
WESTPORT HOLDINGS, L.L.C.
By: _____________________________________________________
Xxxx X. Xxxxxxx
Managing Member
By: _____________________________________________________
Xxxxxx X. Xxx, XX
Managing Member
By: _____________________________________________________
Xxxx X. Xxxxxxx
Managing Member
HOSPITALITY EQUITY INVESTORS, INC.
By: _____________________________________________________
Xxxx X. Xxxxxxx
President
THE XXXX XXXXXXX FAMILY TRUST
By: _____________________________________________________
Xxxxxxx Xxxxxxx
Trustee
ZAPCO INTEREST HOLDINGS LIMITED PARTNERSHIP
By: ZAPCO VERMONT AVENUE, INC.
Its General Partner
By: ____________________________________________
Xxxx X. Xxxxxxx
Vice President
80
LOUDOUN INTERTECH DEVELOPMENT CORPORATION
By: _____________________________________________________
Xxxx X. Xxxxxxx
Vice President
_______________________________________________
Xxxx X. Xxxxxxx
_______________________________________________
Xxxxx Xxxxxxx
_______________________________________________
Xxxxxx X. Xxx, XX
_______________________________________________
Xxxxxx X. Xxxxxxxx
_______________________________________________
Xxxxx-Xx Xxxxxxx
_______________________________________________
Xxxx X. Xxxxxxx
_______________________________________________
Xxxxx X. Xxxxxxxx, Xx.
_______________________________________________
Xxxxxx X. Xxxxx
_______________________________________________
Xxxx X. Xxxxxxxx
_______________________________________________
Xxxxx X. Xxxxxxxx
81
_______________________________________________
Xxxx Xxxxx
_______________________________________________
Xxxxxxx X. Xxxx
_______________________________________________
Xxxxxx Xxxxx
_______________________________________________
Xxxxxx Xxxxxxxx
_______________________________________________
Xxx Clearwater
82
LIST OF SCHEDULES
Schedule A-1 Contributing Parties and Property Company Interests
Schedule A-2 Property Companies and Hotels
Schedule B Contributed Assets and SLC Limited Partnership Interests
Schedule C Property Company Interests Contributed to SLT Financing
Schedule D Property Company Interests Contributed to SLT and SLT
Limited
Partnership Interests
Schedule E Conversion of Partnership Interests Into Paired Shares
Schedule 1.01 Land
Schedule 1.02(c) Assumed Debt
Schedule 1.02(w) FF&E Reserve Accounts
Schedule 1.02(gg) Knowledge Persons
Schedule 1.02(jj) License Agreements
Schedule 1.02(ll) Management Agreements
Schedule 1.02(yy) Proprietary Rights
Schedule 1.02 (ddd) Tradenames
Schedule 2.03 Allocation of Contribution Amount
Schedule 3.01 Unpermitted Title Exceptions
Schedule 7.01(b) Capitalization of Property Companies
Schedule 7.01(c) Tax Matters
Schedule 7.01(d) Insurance Policies
Schedule 7.01(e) Single Purpose Entity Exceptions
Schedule 7.01(f) Leases
Schedule 7.01(h) Contracts
Schedule 7.01(i) Employee Matters
Schedule 7.01(k) Real Estate Taxes
Schedule 7.01(l) Interests in the Property
Schedule 7.01(m) Litigation (Contributing Parties)
Schedule 7.01(q) Financial Statements
Schedule 7.01(r) Events Subsequent to November 28, 1996
Schedule 7.01(s) Liabilities (Contributing Parties)
Schedule 7.01(u) Environmental Matters, Environmental Reports
Schedule 7.01(x) Non-Accredited Investors (Contributing Parties)
Schedule 7.01(z) Property Company Constituent Documents
Schedule 7.02(d) Partnership Constituent Documents
Schedule 7.02(e) Litigation (Partnerships)
Schedule 7.02(f) Rights or Commitments as to Partnership Units
Schedule 7.02(g) Liabilities (Partnerships)
Schedule 7.02(h) Conduct (Partnerships)
Schedule 7.02(i) Employee Benefit Plans (Partnerships)
83
Schedule 7.03(d) Corporation Constituent Documents
Schedule 7.03(e) Litigation (Corporation)
Schedule 7.03(f) Rights or Commitments as to Corporation Shares
Schedule 7.03(g) Liabilities (Corporation)
Schedule 7.03(h) Conduct (Corporation)
Schedule 7.03(k) Employee Benefit Plans (Corporation)
Schedule 7.04(d) Trust Constituent Documents
Schedule 7.04(e) Litigation (Trust)
Schedule 7.04(f) Rights or Commitments as to Trust Shares
Schedule 7.04(g) Liabilities (Trust)
Schedule 7.04(h) Conduct (Trust)
Schedule 7.04(k) Employee Benefit Plans (Trust)
