EXHIBIT 2(R)
ASSIGNMENT OF MEMBERSHIP INTEREST
Assignment made this 14th day of March, 2003, by and between
PRIME-MEADOWLANDS, LLC (hereinafter "Prime"), a Delaware limited liability
company and ARK MEADOWLANDS, INC. (hereinafter "Purchaser").
R E C I T A L S:
A. Prime is the holder of 50% interest of East Xxxxxxxxxx Group, L.L.C., a
Delaware limited liability company (the "Company"), owner of the Sheraton Hotel,
0 Xxxxxxxxxxx Xxxxx, Xxxx Xxxxxxxxxx, Xxx Xxxxxx 00000 (the "Hotel"), pursuant
to an operating agreement dated December 19, 2002 by and among the Company,
Prime, and AFP Eighteen Corp. (the "Agreement").
B. Purchaser wishes to purchase a ten (10%) percent interest in the
Company.
NOW, THEREFORE, in consideration of ten dollars and other good and
valuable considerations the receipt and sufficiency of which the parties
acknowledge, the parties agree as follows:
1. Prime hereby assigns to Purchaser, as of the Effective Date (as
hereinafter defined), so much of its interest (including its "Membership Rights"
as defined in the Agreement) in the Company such that Purchaser has a resulting
interest of ten (10%) percent and Prime has a resulting interest of forty (40%)
percent in the Company. The purchase price for such interest is $4,625,514.00
(or 10% (rounded) of the $46,255,136.00 acquisition cost of the Hotel set forth
on Schedule 8.1 of the Agreement), payable $2,000,000.00 on the date hereof and
the balance of $2,625,514.00 on or before March 31, 2003, in each case by wire
transfer to the account of Prime pursuant to the instructions attached hereto as
Exhibit A. By accepting this Assignment, Purchaser acknowledges that its
interest is subject to and agrees to be bound by all of the terms and conditions
of the Agreement. The foregoing assignment and acceptance is first effective as
of the date (the "Effective Date") that the purchase price shall have been paid
in full by wire transfer as described above. If the balance of $2,625,514.00 is
not paid by March 31, 2003, this Assignment shall be null and void and of no
further effect and Prime shall return the initial payment of $2,000,000.00,
without interest, at Purchaser's written direction.
2. Prime warrants and represents to Purchaser, on the date hereof and on
the Effective Date, that it is the sole owner of the interest conveyed by this
assignment, that it has full power and authority to make this assignment, and
that the interest assigned is not subject to any liens or other encumbrances.
3. The Hotel is operated under the Sheraton brand under a franchise
agreement with the Sheraton Corporation. If the Company is unable to obtain the
consent of the Sheraton Corporation to this Assignment within 90 days of the
date hereof, Prime agrees to repurchase so
much of the interest conveyed under this Assignment so that Purchaser's interest
is nine and 99/100 (9.99%) percent. The purchase price shall be $4,626.00.
4. Purchaser warrants and represents to Prime and to the Company, on the
date hereof and on the Effective Date, that Purchaser:
(a) is an "accredited investor" within the meaning of rule 501(a) of
Regulation D promulgated under the Securities Act of 1933, as amended (the
"Securities Act");
(b) understands that the interest in the Company that the Purchaser
will receive (the "Interest") has not been registered under the Securities Act,
nor qualified under any state securities laws, and that they are being offered
and sold pursuant to an exemption from such registration and qualification based
in part upon such Purchaser's representations contained herein;
(c) has such knowledge and experience in financial and business
matters that the Purchaser is capable of evaluating the merits and risks of the
investment contemplated by this Assignment; and the Purchaser is able to bear
the economic risk of this investment in the Company (including a complete loss
of this investment);
(d) recognizes that no public market exists for the Interest, and
none will exist in the future; that it must bear the economic risk of this
investment indefinitely unless the Interest is registered pursuant to the
Securities Act or an exemption from such registration is available, and unless
the disposition of such Interest is qualified under applicable state securities
laws or an exemption from such qualification is available, and that the Company
has no obligation or present intention of so registering the Interest;
understands that there is no assurance that any exemption from the Securities
Act will be available, or, if available, that such exemption will allow the
Purchaser to transfer any or all the Interest, in the amounts, or at the times
the Purchaser might propose; understands at the present time that rule 144
("Rule 144") promulgated under the Securities Act by the Securities and exchange
Commission is not applicable to sales of the Interest because they are not
registered under Section 12 of the Securities Exchange Act of 1934 as amended
(the "Exchange Act") and there is not publicly available the information
concerning the Company specified in Rule 144; acknowledges that the Company is
not presently under any obligation to register under Section 12 of the Exchange
Act or to make publicly available the information specified in Rule 144 and that
it may never be required to do so;
(e) is acquiring the Interest solely for its own account for
investment and not with a view toward the resale, transfer, or distribution
thereof, nor with any present intention of distributing the Securities. Except
as specifically provided herein, no other person has any right with respect to
the Interest to be purchased by the Purchaser, nor has the Purchaser agreed to
give any person any such interest or right in the future;
(f) except as specifically provided herein, has no contract,
undertaking, understanding, agreement or arrangement, formal or informal, with
any person to sell, transfer or pledge all or any portion of his, her or its
Interest, and has no current plans to enter into any such contract, undertaking,
understanding, agreement or arrangement;
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(g) has not seen, received, been presented with, or been solicited
by any leaflet, public promotional meeting, article or any other form of
advertising or general solicitation as to the Company's sale to such Purchaser
of his, her or its Interest; and
(h) is familiar with the business and operations of the Company and
has been afforded full and complete access to the books, financial statements,
records, contracts, been afforded an opportunity to ask such questions of the
Company's agents, accountants and other representatives concerning the Company's
proposed business, operations, financial condition, assets, liabilities and
other relevant matters as he has deemed necessary or desirable, and has been
given all such information as has been requested, in order to evaluate the
merits and risks of the investment contemplated herein.
5. Prime hereby consents to the admission of Purchaser as a Member in the
Company.
6. For purposes of the Agreement, notices shall be addressed as follows
If to Purchaser: Ark Meadowlands, Inc.
c/o Ark Finance, Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
IN WITNESS WHEREOF, the parties hereto have caused this document to be
signed the day and year first above written.
PRIME-MEADOWLANDS, LLC
By: /s/ Xxxxxxx Xxxxxx
--------------------------
Xxxxxxx Xxxxxx, Manager
ARK MEADOWLANDS, INC.
By: /s/ Xxxx Xxxxx
--------------------------
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EXHIBIT A
WIRING INSTRUCTIONS
PNC Bank
Xxx Xxxxx Xxxxxx
Xxxx Xxxxxxxxx, XX
ABA No.: 031 207 607
Account Number: 000 000 0000
Account Name: Prime Hospitality Corp.
Please contact: Xxxxxxx Xxxxxx at 000-000-0000
Reference: East Xxxxxxxxxx Group, L.L.C.
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