Exhibit 99.2
MASTER CONTRIBUTION AGREEMENT
dated as of December 31, 2001
by and among
XXXXXX MANAGEMENT COMPANY LIMITED LIABILITY COMPANY,
JABO LLC,
XXXXXX LODGING COMPANY
and
XXXXXX HOTEL PROPERTIES, L.P.
IN RELIANCE UPON CERTAIN EXEMPTIONS FROM REGISTRATION, THE SECURITIES TO BE
ISSUED PURSUANT TO THIS AGREEMENT WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
ACCORDINGLY, NO PARTNERSHIP INTERESTS IN XXXXXX HOTEL PROPERTIES, L.P. MAY BE
SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS SUBSEQUENTLY
REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE, AND UNLESS THE OTHER
TRANSFER RESTRICTIONS ON SUCH INTERESTS HAVE BEEN SATISFIED. THE BMC PARTIES (AS
DEFINED HEREIN) SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL
RISKS OF THEIR OWNERSHIP OF PARTNERSHIP INTERESTS IN XXXXXX HOTEL PROPERTIES,
L.P. FOR AN INDEFINITE PERIOD OF TIME.
IN MAKING AN INVESTMENT DECISION THE BMC PARTIES MUST RELY ON THEIR OWN
EXAMINATION OF XXXXXX HOTEL PROPERTIES, L.P. AND THE TERMS OF THE OFFERING,
INCLUDING THE MERITS AND RISKS INVOLVED. THE PARTNERSHIP INTERESTS HAVE NOT BEEN
RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS.............................................................1
1.1 Definitions.............................................................1
ARTICLE 2 CONTRIBUTIONS OF INTERESTS; CONSENTS....................................6
2.1 Contributions of Interests..............................................6
ARTICLE 3 CONSIDERATION...........................................................7
3.1 Consideration...........................................................7
ARTICLE 4 COVENANTS...............................................................7
4.1 Amendment to the OP Partnership Agreement...............................7
4.2 Registration Rights Agreement...........................................7
4.3 Amendment to Rights Agreement...........................................7
4.4 Expenses................................................................7
4.5 Reservation of REIT Shares..............................................8
4.6 Resignation of Officers.................................................8
4.7 Financial Statements....................................................8
4.8 HSR Act.................................................................8
4.9 [INTENTIONALLY OMITTED].................................................8
4.10 Assumption of Westboy Note..............................................8
4.11 Liquor Licenses.........................................................8
4.12 Franchise Agreements....................................................9
4.13 Post-Closing Cooperation................................................9
ARTICLE 5 CLOSING.................................................................9
5.1 Closing.................................................................9
5.2 Closing Deliveries by the BMC Parties...................................9
5.3 Closing Deliveries by the BLC Parties..................................12
ARTICLE 6 CONDITIONS PRECEDENT TO CLOSING........................................14
6.1 Conditions Precedent to Obligation of the REIT and the Operating
Partnership............................................................14
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ARTICLE 7 REPRESENTATIONS AND WARRANTIES..........................................16
7.1 Representations and Warranties of the BLC Parties.......................16
7.2 Representations and Warranties of the BMC Parties.......................21
7.3 Survival................................................................28
ARTICLE 8 INDEMNIFICATION.........................................................28
8.1 Obligation of the BLC Parties to Indemnify..............................28
8.2 Obligation of the BMC Parties to Indemnify..............................30
8.3 Net Claims..............................................................32
ARTICLE 9 APPORTIONMENTS AND PAYMENTS.............................................32
9.1 Payments - Lessee Properties............................................32
9.2 Settlement Procedures...................................................34
ARTICLE 10 MISCELLANEOUS...........................................................35
10.1 Broker..................................................................35
10.2 Further Assurances......................................................35
10.3 Payment of Expenses.....................................................35
10.4 Notices.................................................................36
10.5 Assignment; Binding Effect..............................................37
10.6 Waiver..................................................................37
10.7 Incorporation of Recitals and Schedules.................................37
10.8 Confidentiality; Press Releases.........................................37
10.9 Merger..................................................................38
10.10 GOVERNING LAW...........................................................38
10.11 Jurisdiction............................................................38
10.12 Captions................................................................39
10.13 Counterparts............................................................39
10.14 Severability............................................................39
10.15 No Recordation..........................................................39
10.16 WAIVER OF TRIAL BY JURY.................................................39
10.17 Survival................................................................39
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EXHIBITS
EXHIBIT A LESSEES AND LESSEE PROPERTIES
EXHIBIT B WESTBOY PROPERTIES
EXHIBIT C OP PARTNERSHIP AMENDMENT
EXHIBIT D REGISTRATION RIGHTS AGREEMENT
EXHIBIT E AMENDMENT TO RIGHTS AGREEMENT
EXHIBIT F WESTBOY NOTE ASSUMPTION
EXHIBIT G MANAGEMENT AGREEMENTS
EXHIBIT H INTERESTS ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT I WESTBOY INTERESTS ASSIGNMENT AND ASSUMPTION
AGREEMENT
EXHIBIT J FORM OF OPINION OF COUNSEL TO THE BMC PARTIES
EXHIBIT K FIRPTA AFFIDAVIT
EXHIBIT L FORM OF OPINION OF COUNSEL TO THE BLC PARTIES
EXHIBIT M FORM OF ALIGNMENT OF INTERESTS CONSENT
SCHEDULES
SCHEDULE 4.6 FORM OF RELEASE OF RESIGNING OFFICERS
SCHEDULE 4.11(i) TRANSFERRED LIQUOR LICENSES
SCHEDULE 4.11(ii) LIQUOR LICENSES REQUIRING NOTIFICATION OF
OWNERSHIP CHANGE
SCHEDULE 4.12(i) ASSIGNED FRANCHISE LICENSE AGREEMENTS
SCHEDULE 4.12(ii) TERMINATED AND NEW FRANCHISE LICENSE AGREEMENTS
SCHEDULE 4.12(iii) RETAINED FRANCHISE LICENSE AGREEMENTS
SCHEDULE 6.1(e) BLC PARTIES' CONSENTS, WAIVERS, AUTHORIZATIONS
AND APPROVALS
SCHEDULE 6.2(g) BMC PARTIES' CONSENTS, WAIVERS, AUTHORIZATIONS
AND APPROVALS
SCHEDULE 7.1(f)(i) BLC PARTIES' PENDING LITIGATION
SCHEDULE 7.1(f)(ii) BLC PARTIES' DEFAULTS AND OTHER VIOLATIONS
SCHEDULE 7.1(h) BLC PARTIES' VIOLATIONS OF LAWS
SCHEDULE 7.1(i)(a) COMMITMENTS REGARDING ISSUANCE AND
REGISTRATION OF OP UNITS
SCHEDULE 7.1(i)(b) COMMITMENTS REGARDING ISSUANCE AND
REGISTRATION OF REIT SHARES
SCHEDULE 7.2(a) BMC PARTIES' CONFLICTING AGREEMENTS
SCHEDULE 7.2(b) BMC PARTIES' ORGANIZATIONAL DOCUMENTS
SCHEDULE 7.2(d) BMC PARTIES' NON-COMPLIANCE WITH LAWS
SCHEDULE 7.2(g)(iv) LESSEE AND WESTBOY FORMATION DOCUMENTS
SCHEDULE 7.2(g)(vi) AFFILIATE LOANS
SCHEDULE 7.2(h) OPERATING CONTRACTS
SCHEDULE 7.2(i) EXCEPTIONS TO WESTBOY FINANCIAL STATEMENTS AND
EXTRAORDINARY BUSINESS
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MASTER CONTRIBUTION AGREEMENT
THIS MASTER CONTRIBUTION AGREEMENT (this "AGREEMENT") is made as of the
31st day of December, 2001, by and among XXXXXX MANAGEMENT COMPANY LIMITED
LIABILITY COMPANY, an Ohio limited liability company, having an address at
Guildhall Building, 00 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxx 00000
("BMC"), JABO LLC, a Delaware limited liability company ("JABO"; BMC and JABO
are referred to herein collectively as the "BMC Parties"), XXXXXX LODGING
COMPANY, an Ohio corporation (the "REIT"), and XXXXXX HOTEL PROPERTIES, L.P., an
Ohio limited partnership (the "OPERATING PARTNERSHIP"; the Operating Partnership
and the REIT are referred to herein collectively as the "BLC PARTIES"), each
having an address at 00 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxx 00000.
W I T N E S S E T H:
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WHEREAS, BMC owns ninety-nine percent (99%) of the membership interests in
JABO, which owns (i) all of the membership interests (the "WESTBOY INTERESTS")
in Westboy, LLC, a Delaware limited liability company ("WESTBOY"), and (ii) all
of the membership interests (the "INTERESTS") in each of the fifteen (15)
limited liability companies identified on EXHIBIT A (each, a "LESSEE" and,
collectively, the "LESSEES");
WHEREAS, each Lessee is the owner of a leasehold interest in one of the
fifteen (15) hotel properties identified on EXHIBIT A (collectively, the "LESSEE
PROPERTIES");
WHEREAS, Westboy is the owner of the leasehold interests in the ten (10)
hotel properties identified on EXHIBIT B (collectively, the "WESTBOY
PROPERTIES"; each of the Lessee Properties and Westboy Properties, a "PROPERTY"
and, collectively, the "PROPERTIES");
WHEREAS, at the Closing, the BMC Parties have agreed to cause JABO to
contribute the Interests and Westboy Interests to the Operating Partnership, in
each case in exchange for partnership interests in the Operating Partnership on
the terms set forth below;
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants, conditions and agreements contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. For purposes of this Agreement, the following terms have
the meanings indicated below:
"ACCRUED VACATION TIME" has the meaning set forth in Section 9.1(c).
"ACTUAL KNOWLEDGE" means, with respect to a Person who is any of the BMC
Parties (other than an individual) the actual, not imputed, knowledge of any
officer, director or
employee at the level of a general manager (other than a general manager at any
of the Westboy Properties) and above, and with respect to a Person who is any of
the BLC Parties, the actual, not imputed, knowledge of any director, senior
executive or officer of such Person.
"ADJUSTED CLOSING STATEMENT" has the meaning set forth in Section 9.3.
"AFFILIATE" means, with respect to the applicable party, any corporation,
partnership, sole proprietorship or other entity or individual which (a) is
owned or controlled by such party, (b) owns or controls such party, or (c) is
under common ownership or control with such party; provided that the BLC Parties
shall not be deemed Affiliates of the BMC Parties and the BMC Parties shall not
be deemed Affiliates of the BLC Parties; and provided further that (i) The Xxxx
X. Xxxxxx 1997 Amended and Restated Revocable Trust, The Xxxxxx X. Xxxxxx Second
1997 Amended and Restated Revocable Trust, Xxxxxx X. Xxxxxx and Xxxx X. Xxxxxx
and any entity controlled by the foregoing Persons, and (ii) the BLC Parties,
shall not in any event be considered Affiliates of each other.
"AGREEMENT" has the meaning set forth in the preamble.
"ALIGNMENT OF INTERESTS CONSENT" has the meaning set forth in Section
5.3(n).
"AMENDMENT TO RIGHTS AGREEMENT" has the meaning set forth in Section 4.3.
"ASSIGNED PROPERTY" means all of the tangible personal property, contracts,
permits, tenant leases, personal property leases and other assets owned by the
Lessees pursuant to those certain General Assignment and Assumption Agreements,
by and between BMC and the Lessees, dated as of the date hereof.
"BLC INDEMNITEES" has the meaning set forth in Section 8.2(a).
"BLC MATERIAL ADVERSE EFFECT" has the meaning set forth in Section 7.1(b).
"BLC PARTIES" has the meaning set forth in the preamble.
"BMC" has the meaning set forth in the preamble.
"BMC HILTON CLAIMS" has the meaning set forth in Section 9.4.
"BMC INDEMNITEES" has the meaning set forth in Section 8.1(a).
"BMC OPERATING AGREEMENT" means all documents comprising the operating
agreement of BMC including, without limitation, all amendments, supplements and
modifications thereof.
"BMC PARTIES" has the meaning set forth in the preamble.
"BUSINESS DAY" means any day of the year, other than a Saturday or Sunday
or any other day that the Federal Reserve Bank of Cleveland recognizes as a
federal holiday.
"CLOSING" and "CLOSING DATE" have the meanings set forth in Section 5.1
hereof.
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"CLOSING STATEMENT" has the meaning set forth in Section 9.3.
"CONSIDERATION" has the meaning set forth in 3.1 hereof.
"CUTOFF TIME" means 3:01 a.m. on the Closing Date.
"EMPLOYEE BENEFIT PLAN" has the meaning set forth in Section 7.2(k).
"ENVIRONMENTAL LIABILITIES" means any reasonable cost, liability, damage or
expense (including, without limitation, any attorneys' fees or expenses) that
arise out of any violation or non-compliance, with respect to any Property, with
any Federal, State or local law, rule or regulation or any written judicial or
administrative order, in each case, in effect on or prior to the Closing Date,
relating to the protection of the environment (including, without limitation, a
violation or non-compliance relating to Hazardous Materials located at, on,
under or in any Property or migrating from any Property) caused by any failure
by BMC, the relevant Lessee or Westboy to perform any obligation under the
relevant Lease that resulted in such violation or non-compliance, during the
period in which BMC, the relevant Lessee or Westboy held the relevant Lease to
the Property prior to the date hereof.
"ENVIRONMENTAL LIABILITIES SURVIVAL PERIOD" has the meaning set forth in
Section 7.3.
"FOREIGN OWNER" has the meaning set forth in Section 7.2(l).
"FRANCHISE DOCUMENTS" has the meaning set forth in Section 4.12.
"GAAP" means generally accepted accounting principles consistently applied.
"GENERAL ASSIGNMENT AGREEMENTS" means the Assignment and Assumption
Agreements between BMC and each of the Lessees dated as of January 1, 2002.
"GENERAL SURVIVAL PERIOD" has the meaning set forth in Section 7.3.
"GOVERNMENTAL AUTHORITY" means any agency, bureau, commission, court,
department, official, political subdivision, tribunal or other instrumentality
of any government, whether federal, state or local, domestic or foreign.
"GROUND LEASE" means that certain lease, by and between the City of
Berkeley, as lessor, and Xxxxxxx X. Xxxxxx, as lessee, dated August 7, 1969, as
amended and assigned by mesne assignments to Xxxxxx Berkeley LLC.
"HAZARDOUS MATERIALS" means any substance, chemical, compound, product,
solid, gas, liquid, waste, byproduct, pollutant, contaminant or other material
that is hazardous, toxic, ignitable, corrosive, carcinogenic or otherwise
presents a risk of danger to human, plant or animal life or the environment or
that is defined, determined or identified as such in any federal, state or local
law, rule or regulation and any written judicial or administrative order or
final judgment in effect on or prior to the Closing Date, in each case relating
to the protection of human health, safety and/or the environment, including but
not limited to, any materials, wastes or substances that are included within the
definition of (a) "hazardous waste" in the federal
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Resource Conservation and Recovery Act; (b) "hazardous substances" in the
federal Comprehensive Environmental Response, Compensation, and Liability Act;
(c) "pollutants" in the federal Clean Water Act; (d) "toxic substances" in the
federal Toxic Substances Control Act; and (e) "oil or hazardous materials" in
the laws or regulations of any state.
"HILTON" means Hilton Hotel Corporation and any of its Affiliates.
"HSR ACT" has the meaning set forth in Section 4.8.
"INDEPENDENT ACCOUNTANTS" has the meaning set forth in Section 9.3.
"INQUIRY" has the meaning set forth in Section 8.1(c).
"INTERESTS" has the meaning set forth in the recitals.
"INTERESTS ASSIGNMENT AND ASSUMPTION AGREEMENT" has the meaning set forth
in Section 5.2(c).
"JABO" has the meaning set forth in the preamble.
"JABO OPERATING AGREEMENT" means all documents comprising the operating
agreement of JABO including, without limitation, all amendments, supplements and
modifications thereof.
"JABO'S ACCOUNTANTS" has the meaning set forth in Section 9.3.
"LAWS" means applicable laws, ordinances, rules, regulations, orders and
requirements of any Governmental Authorities having jurisdiction.
"LEASE" means, with respect to each Lessee Property, the particular lease
between the Operating Partnership and BMC or an Affiliate of BMC as such was
assigned on December 31, 2001, to that particular Lessee.
"LEASE ASSIGNMENT AGREEMENTS" means the Lease Assignment Agreements between
BMC and each of the Lessees, dated as of December 31, 2001.
"LESSEE" and "LESSEES" have the meaning set forth in the recitals.
"LESSEE PROPERTIES" has the meaning set forth in the recitals.
"LESSEE ORGANIZATIONAL DOCUMENTS" means all documents comprising the
constituent organizational documents of each of the Lessees including, without
limitation, operating agreements, articles of incorporation and all amendments,
supplements and modifications thereof and all assignments with respect thereto.
"LIABILITY CAP" has the meaning set forth in Section 8.2(c).
"LIQUOR LICENSE DOCUMENTS" has the meaning set forth in Section 4.11.
"MANAGEMENT AGREEMENTS" has the meaning set forth in Section 5.2(b).
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"NET CURRENT ASSETS AND LIABILITIES AMOUNT" has the meaning set forth in
Section 9.1.
"NOTICES" means all notices, demands or requests made pursuant to or
otherwise in connection with this Agreement.
"OPERATING CONTRACTS" has the meaning set forth in Section 7.2(h).
"OPERATING PARTNERSHIP" has the meaning set forth in the preamble.
"OP PARTNERSHIP AGREEMENT" means the Second Amended and Restated Agreement
of Limited Partnership of the Operating Partnership, dated as of May 20, 1998,
as amended by that certain Amendment to Second Amended and Restated Agreement of
Limited Partnership, dated as of February 1, 1999.
"OP PARTNERSHIP AMENDMENT" has the meaning set forth in Section 4.1.
"OP UNITS" means those Partnership Units issued to JABO pursuant to Section
3.1.
"PARTNERSHIP INTERESTS" has the meaning set forth in the OP Partnership
Agreement.
"PARTNERSHIP UNITS" means the non-preferred Partnership Interests of the
Operating Partnership.
"PERCENTAGE LEASES" means those certain leases pursuant to which the
Lessees and Westboy hold leasehold interests in the Properties.
"PER PROPERTY LIABILITY CAP" has the meaning set forth in Section 8.2(c).
"PERSON" means an individual, a partnership (general or limited), limited
liability company, corporation, joint venture, business trust, cooperative,
association or other form of business organization, whether or not regarded as a
legal entity under applicable law, a trust (inter vivos or testamentary), an
estate of a deceased, insane or incompetent person or any other entity.
"PROPERTY" and "PROPERTIES" have the meaning set forth in the recitals.
"PROPERTY MATERIAL ADVERSE EFFECT" has the meaning set forth in Section
7.2(a)(vii).
"PROPERTY SURVIVAL PERIOD" has the meaning set forth in Section 7.3.
"REGISTRATION RIGHTS AGREEMENT" has the meaning set forth in Section 4.2.
"REIT" has the meaning set forth in the preamble.
"REIT SHARES" has the meaning set forth in Section 4.5.
"SEC DOCUMENTS" has the meaning set forth in Section 7.1(i)(ii).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
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"SHARED HILTON CLAIMS" has the meaning set forth in Section 9.4.
"SPACE LEASES" means any existing leases, tenancies, concessions, licenses
and other use or occupancy agreements affecting or relating to any portion of
the Properties, together with any renewals of, additions to, modifications of or
substitutions for such leases entered into by or on behalf of the Lessees or
Westboy prior to the Closing Date.
"SURVIVAL PERIOD" has the meaning set forth in Section 7.3.
"TBG" means The Xxxxxx Group, Inc., an Ohio corporation.
"TRANSACTION DOCUMENTS" means this Agreement, the Registration Rights
Agreement, the Amendment to Rights Agreement, the Management Agreements, the
Interests Assignment and Assumption Agreement, the Westboy Interests Assignment
and Assumption Agreement, the Westboy Note Assumption, the Liquor License
Documents, the Franchise Documents, the OP Partnership Amendment, the Alignment
of Interests Consent, the Lease Assignment Agreements, and the General
Assignment Agreement.
"WESTBOY" has the meaning set forth in the recitals.
"WESTBOY INTERESTS" has the meaning set forth in the recitals.
"WESTBOY INTERESTS ASSIGNMENT AND ASSUMPTION AGREEMENT" has the meaning set
forth in Section 5.2(d).
"WESTBOY MATERIAL ADVERSE EFFECT" has the meaning set forth in Section
7.2(a)(vii).
"WESTBOY MEMBER'S EQUITY" means the member's equity of Westboy as shall be
reflected on Westboy's balance sheet as of December 31, 2001, determined under
GAAP consistently applied; but without considering the Westboy Note as an asset
of Westboy, or the BMC Hilton Claims or the Shared Hilton Claims as either an
asset or a liability.
"WESTBOY NOTE" has the meaning set forth in Section 4.10.
"WESTBOY NOTE ASSUMPTION" has the meaning set forth in Section 4.10.
"WESTBOY PROPERTIES" has the meaning set forth in the recitals.
"WIND UP DATE" has the meaning set forth in Section 9.3.
ARTICLE 2
CONTRIBUTIONS OF INTERESTS; CONSENTS
2.1 CONTRIBUTIONS OF INTERESTS. Subject to and on the terms and conditions
hereinafter set forth, assuming satisfaction by the BMC Parties and/or waiver by
the BLC Parties and satisfaction by the BLC Parties and/or waiver by the BMC
Parties of all conditions set forth in
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Sections 6.1 and 6.2, respectively, on the date and at the time and place
provided for in Section 5.1:
(a) JABO shall contribute, transfer, assign and deliver all of its
right, title and interest in and to the Interests to the Operating Partnership;
and
(b) JABO shall contribute all of its right, title and interest in and
to the Westboy Interests to the Operating Partnership.
ARTICLE 3
CONSIDERATION
3.1 CONSIDERATION. On the Closing Date, assuming satisfaction by the BMC
Parties and/or waiver by the BLC Parties and satisfaction by the BLC Parties
and/or waiver by the BMC Parties of all conditions set forth in Sections 6.1 and
6.2, respectively, as consideration (the "CONSIDERATION") for the contributions
described in Section 2.1, the Operating Partnership agrees and the REIT shall
cause the Operating Partnership to admit JABO as an additional limited partner
of the Operating Partnership and to issue to JABO 1,427,142 OP Units as set
forth in the OP Partnership Amendment.
ARTICLE 4
COVENANTS
4.1 AMENDMENT TO THE OP PARTNERSHIP AGREEMENT. At or prior to the Closing,
the Operating Partnership agrees to adopt an amendment, in the form attached
hereto as EXHIBIT C (the "OP PARTNERSHIP AMENDMENT"), to the OP Partnership
Agreement reflecting the admission of JABO as an additional limited partner to
the Operating Partnership and the issuance of the OP Units in accordance with
the provisions of Section 3.1 of this Agreement.
4.2 REGISTRATION RIGHTS AGREEMENT. At or prior to the Closing, the REIT and
JABO agree to enter into and deliver the registration rights agreement, in the
form attached hereto as EXHIBIT D (the "REGISTRATION RIGHTS AGREEMENT").
4.3 AMENDMENT TO RIGHTS AGREEMENT. At or prior to the Closing Date, the
REIT agrees to adopt an amendment to the Shareholder Rights Agreement between
the REIT and National City Bank, dated May 25, 1999, in the form attached hereto
as EXHIBIT E (the "AMENDMENT TO RIGHTS AGREEMENT").
4.4 EXPENSES. Each party agrees to pay its own expenses (including the fees
and expenses of its own attorneys, accountants and other advisers) in connection
with its due diligence activities, negotiating this Agreement and any related
agreements, obtaining any required approvals and otherwise preparing for the
Closing. The parties agree to cooperate with one another to prepare and file
with the relevant authorities all sales, use and transfer tax returns,
affidavits and other similar instruments, if any, required in connection with
the payment of the foregoing expenses. The REIT agrees to prepare and file with
the relevant authorities all necessary sales, use and transfer tax returns and
related instruments in connection with the
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transfer to the Operating Partnership of the Interests and Westboy Interest, if
any, and to pay all sales, use or transfer taxes, if any, required in connection
therewith. The BLC Parties agree to pay any fees, costs and charges due in
connection with the transfer of any liquor licenses and franchise license
agreements or the retention of any liquor licenses or franchise license
agreements by BMC for the benefit of the Lessees pursuant to Sections 4.11 and
4.12, including such fees, costs and charges arising after the date hereof.
4.5 RESERVATION OF REIT SHARES. The REIT agrees that commencing on or prior
to the Closing and at all times thereafter it will reserve and keep available,
free from preemptive rights, out of its authorized but unissued common shares,
solely for the purpose of issuance upon redemption of the OP Units, the full
number of the common shares of the REIT without a par value per share ("REIT
SHARES") then deliverable upon redemption in full of all of the OP Units should
the REIT as general partner of the Operating Partnership elect to issue all such
REIT shares upon any such redemption request.
4.6 RESIGNATION OF OFFICERS. At or prior to the Closing, JABO agrees to
cause Xxxxxx X. Xxxxxx and each family member of Xxxxxx X. Xxxxxx that is then
an officer or director of any Lessee or Westboy to resign from such position.
Each such resigning officer and director shall receive a release from the
relevant Lessee or Westboy in the form attached hereto as SCHEDULE 4.6.
4.7 FINANCIAL STATEMENTS. BMC agrees that, at its expense, it will provide
the REIT with (i) a combined statement of operations that will include its
operations with respect to each Property for the year ended December 31, 2001,
audited by Xxxxxx Xxxxxxxx LLP, before March 31, 2002, and (ii) a "management's
discussion and analysis" comparing and explaining specific line items in the
foregoing statements. The foregoing statements and analysis will be delivered in
a form and format that will facilitate their inclusion in any filing required to
be made by the BLC Parties with any Governmental Authority.
4.8 HSR ACT. The BMC Parties and the BLC Parties agree that they have
mutually concluded that no filing under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended ("HSR ACT"), is required with respect to
the transactions contemplated hereby.
4.9 [INTENTIONALLY OMITTED]
4.10 ASSUMPTION OF WESTBOY NOTE. At Closing, BMC agrees to assign to the
Operating Partnership its obligations under that certain promissory note dated
as of December 31, 1997, and all requests for payment thereunder subsequently
executed, which in the aggregate obligate BMC to make additional capital
contributions to Westboy in the amount of Nine Hundred Thousand Dollars
($900,000) (collectively, the "WESTBOY NOTE"), and the Operating Partnership
agrees to assume such obligations in the form attached hereto as EXHIBIT F (the
"WESTBOY NOTE ASSUMPTION") and, immediately following the Closing, the BLC
Parties shall cause Westboy to release BMC from its obligations under the
Westboy Note.
4.11 LIQUOR LICENSES. The BMC Parties agree to assign to the applicable
Lessee and each such Lessee shall agree to assume on, prior to or after the
Closing the liquor licenses set forth in SCHEDULE 4.11(i). At, prior to or after
the Closing, the BMC Parties agree to notify the
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relevant liquor commissions on or before the Closing Date of the change in the
membership of Westboy with regard to the liquor licenses for the Properties set
forth in SCHEDULE 4.11(II). Except as set forth on SCHEDULE 4.11(i) or Schedule
4.11(ii), all liquor licenses shall remain with the applicable holder of record
as of December 31, 2001. All documents executed pursuant to this Section 4.11,
shall be referred to herein as the "LIQUOR LICENSE DOCUMENTS".
4.12 FRANCHISE AGREEMENTS. At or prior to the Closing, the BMC Parties
agree to assign to the applicable Lessee and each such Lessee shall agree to
assume the franchise license agreements for the Properties set forth on SCHEDULE
4.12(i). At or prior to the Closing, the BMC Parties agree to terminate the
franchise license agreements for the Properties set forth on SCHEDULE 4.12(ii)
and the BLC Parties agree that the Lessees shall enter into new franchise
license agreements for such Properties effective immediately after the Closing.
The BMC Parties agree to retain the franchise license agreements set forth on
SCHEDULE 4.12(iii). All documents executed pursuant to this Section 4.12, shall
be referred to herein as the "FRANCHISE DOCUMENTS".
4.13 POST-CLOSING COOPERATION. Each party agrees that it will cooperate
with the other party for a reasonable period after the Closing by, where
practical, providing the other party with information that it presently
possesses with respect to the current status of pending litigation and insurance
claims relating to the Properties or circumstances underlying such litigation or
claims to the extent the litigation or underlying circumstances arose prior to
the Closing.
ARTICLE 2
CLOSING
5.1 CLOSING. Subject to the terms and conditions of this Agreement, the
Closing shall take place at the office of Xxxxxxxx Xxxx LLP, 0000 Xxx Xxxxxx,
000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, at 9:00 A.M., E.S.T. on January 2,
2002, but be deemed effective as of 3:01 A.M., E.S.T. on January 1, 2002, or at
such other place, time and date as may hereafter be mutually agreed between the
BMC Parties and the BLC Parties (the "CLOSING DATE"). As used in this Agreement,
the term "CLOSING" means the transfer and assignment of the Interests and
Westboy Interests to the Operating Partnership in exchange for the Consideration
and the performance by each party hereto of the obligations on its part then to
be performed under and in accordance with this Agreement.
5.2 CLOSING DELIVERIES BY THE BMC PARTIES. At the Closing, the respective
BMC Parties will deliver to the respective BLC Parties each of the following
instruments and documents:
(a) REGISTRATION RIGHTS AGREEMENT. The Registration Rights Agreement,
duly executed by JABO.
(b) MANAGEMENT AGREEMENTS. Management agreements with respect to each
of the Lessee Properties in the form attached hereto as EXHIBIT G (the
"MANAGEMENT AGREEMENTS"), duly executed by BMC.
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(c) INTERESTS ASSIGNMENT AND ASSUMPTION AGREEMENT. An assignment and
assumption agreement for the Interests in the form of EXHIBIT H attached hereto
(the "INTERESTS ASSIGNMENT AND ASSUMPTION AGREEMENT"), duly executed by JABO.
(d) WESTBOY INTERESTS ASSIGNMENT AND ASSUMPTION AGREEMENT. An
assignment and assumption agreement for the Westboy Interests in the form of
EXHIBIT I attached hereto (the "WESTBOY INTERESTS ASSIGNMENT AND ASSUMPTION
AGREEMENT"), duly executed by JABO.
(e) CERTIFICATES.
(i) A certificate, issued by the Secretary of State of the State
of Ohio and dated not earlier than thirty (30) Business Days prior to the
Closing Date, certifying as to the good standing of BMC, JABO and Westboy
under the laws of Ohio.
(ii) A certificate, issued by the Secretary of State of the State
of Delaware and dated not earlier than thirty (30) Business Days prior to
the Closing Date, certifying as to the good standing of JABO, Westboy and
each of the Lessees under the laws of Delaware.
(iii) A certificate, issued by the Secretary of State of the
State where each Property is located and dated not earlier than thirty (30)
Business Days prior to the Closing Date, certifying as to the good standing
of such Lessee or Westboy which owns the leasehold interest in such
Property under the laws of such State to the extent not covered in (i) or
(ii) above.
(iv) A duly executed certificate of the secretary of BMC, dated
as of such Closing Date, certifying:
(A) that (i) attached to such certificate is a true and complete
copy of resolutions adopted by the board of directors of BMC, which
resolutions approve the transactions contemplated hereunder and
authorize the officers of BMC to execute and deliver, for and on
behalf of BMC, this Agreement, the Management Agreements and each
other agreement or instrument necessary for the consummation of the
transactions contemplated by this Agreement and the Management
Agreements to be executed and delivered by BMC, (ii) the adoption of
the attached resolutions by the board of directors constitutes the
only authorization required for the aforementioned execution, delivery
and consummation by BMC of the transactions contemplated hereunder,
and (iii) such authorization has not been revoked or otherwise
withdrawn and remains in full force and effect.
(v) A duly executed certificate of BMC as the managing member of
JABO, dated as of such Closing Date, certifying:
(A) that (i) attached to such certificate is a true and complete
copy of the resolutions adopted by the board of directors of BMC,
which resolutions approve the transactions contemplated hereunder and
authorize the officers of
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BMC to execute and deliver, for and on behalf of JABO, this Agreement
and the other Transaction Documents or any instruments necessary for
the consummation of the transactions contemplated hereunder and
thereunder to be executed and delivered by JABO, (ii) the adoption of
the attached resolutions by the board of directors of BMC constitutes
the only authorization required for the aforementioned execution,
delivery and consummation by JABO of the transactions contemplated
hereunder, and (iii) such authorization has not been revoked or
otherwise withdrawn and remains in full force and effect;
(B) that (i) attached to such certificate is a true and complete
copy of the BMC Operating Agreement and BMC's articles of
organization, (ii) such instruments have not been amended (except as
noted therein) and (iii) such instruments are in full force and effect
as of the Closing Date.
(C) that (i) attached to such certificate is a true and complete
copy of the JABO Operating Agreement and JABO's certificate of
formation (certified by the Secretary of State of the State of
Delaware), (ii) such instruments have not been amended (except as
noted therein) and (iii) such instruments are in full force and effect
as of the Closing Date;
(D) that (i) attached to such certificate is a true and complete
copy of each Lessee's operating agreement and certificate of formation
(certified by the Secretary of State of the State of Delaware), (ii)
such instruments have not been amended (except as noted therein) and
(iii) such instruments are in full force and effect as of the Closing
Date; and
(E) that (i) attached to such certificate is a true and complete
copy of Westboy's operating agreement and certificate of formation
(certified by the Secretary of State of the State of Delaware), (ii)
such instruments have not been amended (except as noted therein) and
(iii) such instruments are in full force and effect as of the Closing.
(f) OPINION. An opinion of counsel to BMC in substantially the form
attached hereto as EXHIBIT J.
(g) LIQUOR LICENSES. An assignment and assumption of the liquor
licenses listed on SCHEDULE 4.11, duly executed by BMC, and such other
agreements necessary to satisfy Section 4.11, duly executed by BMC.
(h) FRANCHISE AGREEMENTS. An assignment and assumption of the
franchise license agreements listed on SCHEDULE 4.12, duly executed by BMC, and
such other agreements necessary to satisfy the requirements of Section 4.12,
duly executed by BMC.
(i) FIRPTA AFFIDAVIT. An affidavit of JABO , in the form of EXHIBIT K
attached hereto, stating the U.S. taxpayer identification number of JABO and
that JABO is a "United States person", as defined by the Internal Revenue Code
Section 7701(a)(30).
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(j) RECORDS. At the Closing, the BMC Parties shall deliver hard copies
(originals, to the extent they exist) in their existing file folders (to the
extent they exist in such folders), and to the extent available in electronic
format on computer disk or other comparable storage medium, to, or at the
direction of, the Operating Partnership (a) all documents, records and books of
account, or copies thereof, relating to the construction, ownership, management,
leasing and operation of the Properties which are in the BMC Parties' possession
or in the possession of their agents and owned by BMC on the Closing Date,
including original Percentage Leases, Space Leases, the Ground Lease and other
ground leases, if any, and all associated lease files, (b) any other financial
information in the BMC Parties' possession or in the possession of their agents
and owned by BMC relating to the Properties, and (c) to the extent available and
in the possession of the BMC Parties, copies of all litigation files and
information on claims and insurance claims relating to the Properties, the
Lessees or Westboy; provided, however, that the BMC Parties shall retain
possession of such documents, records, books and other information that BMC has
a right to possess, as agent for a Lessee under a Management Agreement, subject
to the terms and conditions of such Management Agreement. The BMC Parties shall
also deliver to, or at the direction of, the Operating Partnership, both prior
to and after the Closing, copies of any documents in the possession of the BMC
Parties or their agents and owned by BMC that may be necessary or helpful to the
Operating Partnership in adjusting losses or claims or otherwise enforcing or
settling claims with respect to all Percentage Leases, Space Leases, insurance
policies or contracts relating to the Properties.
(k) OTHER DOCUMENTS, ETC. All other instruments and documents, if any,
required to be executed, acknowledged and/or delivered by the BMC Parties to the
Operating Partnership and/or the REIT pursuant to and in accordance with any of
the other provisions of this Agreement and the other Transaction Documents or
instruments as the Operating Partnership or the REIT may reasonably request to
effect the transactions contemplated in the aforementioned agreements.
5.3 CLOSING DELIVERIES BY THE BLC PARTIES. At the Closing, the respective
BLC Parties will deliver to the respective BMC Parties each of the following
instruments, documents and payments:
(a) CONSIDERATION. The Consideration as provided for in Section 3.1 of
this Agreement by execution of the OP Partnership Amendment.
(b) OP PARTNERSHIP AMENDMENT. The OP Partnership Amendment, duly
executed by the REIT, as general partner of the Operating Partnership.
(c) REGISTRATION RIGHTS AGREEMENT. The Registration Rights Agreement,
duly executed by the REIT.
(d) AMENDMENT TO RIGHTS AGREEMENT. The Amendment to Rights Agreement,
duly executed by the REIT and National City Bank.
(e) MANAGEMENT AGREEMENTS. The Management Agreements with respect to
each of the Lessee Properties, duly executed by the applicable Lessee.
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(f) INTERESTS ASSIGNMENT AND ASSUMPTION AGREEMENT. The Interests
Assignment and Assumption Agreement, duly executed by the Operating Partnership.
(g) WESTBOY INTERESTS ASSIGNMENT AND ASSUMPTION AGREEMENT. The Westboy
Interests Assignment and Assumption Agreement, duly executed by the Operating
Partnership.
(h) CERTIFICATES.
(i) A certificate issued by the Secretary of State of the State
of Ohio and dated not earlier than thirty (30) days prior to the Closing
Date, certifying as to the good standing of the REIT and the full force and
effect of the Operating Partnership under the laws of the State of Ohio.
(ii) A duly executed certificate of the Secretary of the REIT,
dated as of the Closing Date, certifying:
(A) that (i) attached to such certificate is a true and complete
copy of the resolutions adopted by the board of directors of the REIT,
which resolutions approve the transactions contemplated hereunder and
authorize the REIT on its own behalf and as general partner of the
Operating Partnership to execute and deliver this Agreement and the
other Transaction Documents or any instrument necessary for the
consummation of the transactions contemplated hereunder and
thereunder, and which provide for the reservation of the full number
of REIT Shares that will be deliverable upon redemption in full of all
the OP Units issued pursuant to Section 3.1 should the REIT elect to
issue such REIT Shares upon any redemption request, (ii) the adoption
of the attached resolutions by the board of directors of the REIT
constitutes the only authorization required for the aforementioned
execution, delivery and consummation by the REIT on its own behalf and
on behalf of the Operating Partnership, and (iii) such authorization
has not been revoked or otherwise withdrawn and remains in full force
and effect;
(B) that (i) attached to such certificate is a true and complete
copy of the OP Partnership Agreement, the certificate of limited
partnership of the Operating Partnership and the articles of
incorporation and code of regulations of the REIT, (ii) such
instruments have not been amended (except as noted therein) and (iii)
such instruments are in full force and effect as of such Closing Date.
(i) OPINION. An opinion of counsel to the BLC Parties in
substantially the form attached as EXHIBIT L.
(j) WESTBOY NOTE. The Westboy Note Assumption, duly executed by
the Operating Partnership and Westboy.
(k) TRANSFER TAXES. All necessary sales, use and transfer tax
reports and related instruments required to be filed with any Governmental
Authority in connection with the transfer to the Operating Partnership of the
Interests and Westboy Interests, duly executed by the
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BLC Parties, and payment of or provisions for any amounts due to any
Governmental Authority in connection therewith.
(l) LIQUOR LICENSES. An assignment and assumption of the liquor
licenses listed on SCHEDULE 4.11, duly executed by the Operating Partnership and
the applicable Lessee in each case and such other agreements necessary to
satisfy Section 4.11, duly executed by the Operating Partnership and the
applicable Lessee.
(m) FRANCHISE AGREEMENTS. An assignment and assumption of the
franchise license agreements listed on SCHEDULE 4.12, duly executed by the
Operating Partnership or the applicable Lessee and such other agreements
necessary to satisfy the requirements of Section 4.12, duly executed by the
Operating Partnership and the applicable Lessee.
(n) ALIGNMENT OF INTERESTS CONSENT. The Operating Partnership's
consent in the form of EXHIBIT M attached hereto (the "ALIGNMENT OF INTERESTS
CONSENT"), as required under the Alignment of Interests Agreement, dated
November 4, 1996, among the REIT, the Operating Partnership, BMC, TBG,
Purchasing Concepts, Inc., Xxxxxx X. Xxxxxx and Xxxx X. Xxxxxx.
(o) OTHER DOCUMENTS, ETC. All other instruments and documents, if
any, required to be executed, acknowledged and/or delivered by the Operating
Partnership and/or the REIT to the BMC Parties pursuant to and in accordance
with any of the other provisions of this Agreement, the other Transaction
Documents and such other agreements or instruments as the BMC Parties may
reasonably request to effect the transactions contemplated in the aforementioned
agreements.
ARTICLE 6
CONDITIONS PRECEDENT TO CLOSING
6.1 CONDITIONS PRECEDENT TO OBLIGATION OF THE REIT AND THE OPERATING
PARTNERSHIP. The obligation of the REIT and the Operating Partnership to
consummate the transactions contemplated herein shall be subject to the
fulfillment on or before the Closing Date of all of the following conditions,
any or all of which may be waived by the REIT and/or the Operating Partnership
in their sole discretion:
(a) DELIVERY OF DOCUMENTS. The BMC Parties shall have delivered all of
the items required to be delivered to the BLC Parties pursuant to Section 5.2.
(b) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the BMC Parties in Section 7.2 of this Agreement shall be true
and correct in all material respects as originally made and, if applicable, as
remade on and as of the Closing Date (or, if made as of a specified date, as of
such date).
(c) OBSERVANCE OF COVENANTS. The BMC Parties shall have performed and
observed, in all material respects, all covenants and agreements in this
Agreement to be performed and observed by the BMC Parties as of the Closing
Date.
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(d) TRANSACTIONS NOT PROHIBITED. No statute, temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation by the BMC Parties or any of the Lessees of the transactions
contemplated by this Agreement, and the other Transaction Documents shall be in
effect or, if applicable, have been threatened in writing by any Governmental
Authority, other than any such order or other legal restraint or prohibition or
written threat thereof obtained or instituted by or on behalf of the REIT, the
Operating Partnership or any of their Affiliates.
(e) CONSENTS AND WAIVERS. The BLC Parties shall have obtained the
lender, franchisor and other third-party consents and waivers, consents,
authorizations and approvals from the limited partners of the Operating
Partnership necessary to consummate the transactions contemplated herein, which
consents, waivers, authorizations and approvals are set forth on SCHEDULE
6.1(e). The BLC Parties agree to use commercially reasonable efforts to obtain
such consents, waivers, authorizations and approvals.
6.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BMC PARTIES. The obligation
of the BMC Parties to consummate the transactions contemplated herein shall be
subject to the fulfillment on or before the Closing Date of all of the following
conditions, any or all of which may be waived by the BMC Parties in their sole
discretion:
(a) RECEIPT OF CONSIDERATION. The Operating Partnership shall have
delivered the Consideration.
(b) DELIVERY OF DOCUMENTS. The BLC Parties shall have delivered all of
the items required to be delivered to the BMC Parties pursuant to Section 5.3.
(c) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the BLC Parties contained in Section 7.1 of this Agreement
shall be true and correct in all material respects as originally made and as
remade on and as of the Closing Date (or, if made as of a specified date, as of
that date).
(d) OBSERVANCE OF COVENANTS. The BLC Parties shall have performed and
observed, in all material respects, all covenants and agreements in this
Agreement to be performed and observed by the BLC Parties as of the Closing
Date.
(e) TRANSACTIONS NOT PROHIBITED. No statute, temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation by the BLC Parties of the transactions contemplated by this
Agreement and the other Transaction Documents shall be in effect, or, if
applicable, have been threatened in writing by any Governmental Authority, other
than any such order or other legal restraint or prohibition or written threat
thereof obtained or initiated by or on behalf of the BMC Parties or any of their
Affiliates.
(f) REIT SHARES. The REIT shall have reserved for issuance and made
available, free from preemptive rights, out of the REIT's authorized but
unissued common shares, solely for the purpose of issuance upon redemption of
the OP Units, the full number of
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REIT Shares then deliverable upon redemption in full of all of the OP Units
should the REIT elect to issue all such REIT Shares upon any such redemption
request.
(g) CONSENTS AND WAIVERS. The BMC Parties shall have obtained the
lender, franchisor and other third-party consents, waivers, authorizations and
approvals necessary to consummate the transactions contemplated herein, which
consents, waivers, authorizations and approvals are set forth in SCHEDULE
6.2(g). The BMC Parties agree to use commercially reasonable efforts to obtain
such consents, waivers, authorizations, and approvals, and any other
requirements and conditions precedent with respect to such consents, waivers,
authorizations and approvals.
(h) TRANSFER TAXES. All necessary sales, use and transfer tax reports
and related instruments required to be filed with any Governmental Authority in
connection with the transfer to the Operating Partnership of the Interests and
Westboy Interests shall have been prepared by the BLC Parties, and payment of or
provisions for any amounts due to any Governmental Authority in connection
herewith shall have been made by the BLC Parties.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 REPRESENTATIONS AND WARRANTIES OF THE BLC PARTIES. In order to induce
the BMC Parties to carry out the transactions contemplated by this Agreement,
the REIT and the Operating Partnership, jointly and severally, make the
following representations and warranties to the BMC Parties:
(a) ORGANIZATION, GOOD STANDING AND AUTHORITY OF THE REIT. The REIT is
a corporation, duly organized, validly existing and in good standing under the
laws of the State of Ohio, is duly qualified to do business in all jurisdictions
where such qualification is necessary to carry on its business as now conducted,
except where failure to so qualify would not interfere in any material respect
with the ability of the REIT to consummate any of the transactions contemplated
in this Agreement, and the REIT is authorized to consummate the transactions
contemplated hereby, to fulfill all of its respective obligations hereunder and
under all documents contemplated hereunder to be executed by the REIT and to
execute and deliver this Agreement, the other Transaction Documents and all
documents contemplated hereunder and thereunder to which it is a party, and to
perform all of its respective obligations hereunder and thereunder. The REIT has
delivered to the BMC Parties true, correct and complete copies of the articles
of incorporation of the REIT and the code of regulations of the REIT.
(b) ORGANIZATION, FULL FORCE AND EFFECT AND AUTHORITY OF THE OPERATING
PARTNERSHIP. The Operating Partnership is a limited partnership, duly organized,
validly existing and in full force and effect under the laws of the State of
Ohio, is duly qualified to do business in all jurisdictions where such
qualification is necessary to carry on its business as now conducted, except
where failure to so qualify would not interfere in any material respect with the
ability of the Operating Partnership, the REIT or, with regard to the Management
Agreements, the Lessees to complete any of the transactions contemplated in this
Agreement or to issue the OP Units and comply with their terms or materially and
adversely affect the business, operations, financial
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conditions or assets of the Operating Partnership or any of the Lessees,
determined either (i) without giving effect in whole or in part to the
transactions contemplated herein, or (ii) after giving such effect (any such
interference or adverse effect, a "BLC MATERIAL ADVERSE EFFECT"), and the
Operating Partnership is authorized to consummate the transactions contemplated
hereby and under any of the Transaction Documents to which it is a party and to
fulfill all of its respective obligations hereunder and thereunder and under all
documents contemplated hereunder and thereunder to be executed by the Operating
Partnership, and has all necessary power to issue the OP Units and to execute
and deliver this Agreement and the other Transaction Documents to which it is a
party all documents contemplated hereunder and thereunder to be executed by the
Operating Partnership and to perform all of its respective obligations hereunder
and thereunder. The Operating Partnership has delivered to the BMC Parties true,
correct and complete copies of the OP Partnership Agreement and the certificate
of limited partnership of the Operating Partnership.
(c) THE BLC PARTIES' AUTHORIZATION AND BINDING EFFECT. This Agreement
and the other Transaction Documents have been, and all documents contemplated
hereunder and thereunder to be executed by or at the direction of the Operating
Partnership and/or the REIT, when executed and delivered will have been, duly
authorized and approved by all requisite partnership or corporate action on the
part of the Operating Partnership and the REIT and each is, or will be, upon
execution and delivery, as applicable, a legal, valid and binding obligation of
the Operating Partnership and/or the REIT, as the case may be, enforceable
against each such party in accordance with each of its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors' rights generally and to general
principles of equity (including concepts of materiality, reasonableness, good
faith and fair dealing), regardless of whether considered in a proceeding in
equity or at law. Neither the execution and delivery of this Agreement, the
other Transaction Documents or any document contemplated hereunder and
thereunder to be executed by or at the direction of the Operating Partnership or
the REIT, nor the issuance of the OP Units and performance of the obligations of
the Operating Partnership or the REIT or the Lessees hereunder or thereunder,
will (i) result in the violation of any provision of the OP Partnership
Agreement, the articles of limited partnership of the Operating Partnership or
the certificate of incorporation or code of regulations of the REIT or the
Lessee Organizational Documents, or (ii) conflict with any order or decree of
any court or governmental instrumentality of any nature by which the Operating
Partnership or the REIT is bound or to which it is subject.
(d) THE LESSEES AUTHORIZATION AND BINDING EFFECT. The Management
Agreements and all documents contemplated thereunder to be executed by the
Lessees, when executed and delivered, will have been duly authorized by all
requisite corporate action on the part of each of the Lessees and each is, or
will be, upon execution and delivery, a legal, valid and binding obligation of
each such Lessee, enforceable in accordance with its respective terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors' rights generally and to general
principles of equity (including concepts of materiality, reasonableness, good
faith and fair dealing), regardless of whether considered in a proceeding in
equity or at law. Neither the execution and delivery of the Management
Agreements or any document contemplated thereunder to be executed by the Lessees
nor performance of the obligations of the Lessees thereunder, will result in the
violation
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of any provision of the OP Partnership Agreement, the articles of limited
partnership of the Operating Partnership or the certificate of incorporation or
code of regulations of the REIT.
(e) CONFLICTING AGREEMENTS AND OTHER MATTERS. The execution, delivery
and performance of this Agreement and the other Transaction Documents by the
REIT and the Operating Partnership (and the Lessees, solely with respect to
performance of obligations after the date hereof) and fulfillment of and
compliance with the terms and provisions hereof and thereof, the issuance of the
OP Units to be issued to JABO pursuant to this Agreement, and the issuance of
the REIT Shares upon redemption, will not (i) violate any provision of any law
presently in effect having applicability to the REIT or the Operating
Partnership or any of their properties, except such violations as could not
reasonably be expected to have a BLC Material Adverse Effect, (ii) conflict with
or result in a breach of or constitute a default under the OP Partnership
Agreement, as amended by the OP Partnership Amendment, charter or bylaws or any
other organizational document of either the REIT or the Operating Partnership,
(iii) require any consent, approval (other than shareholder approval of the
issuance of REIT Shares upon redemption of the OP Units issued to JABO pursuant
to this Agreement) or notice (not received and/or given prior to the Closing)
under, or conflict with or result in a breach of, constitute a default or
accelerate any right under, any note, bond, mortgage, license, indenture or loan
or credit agreement, or any other agreement or instrument, to which the REIT or
the Operating Partnership is a party or by which any of its respective
properties is bound, (iv) require any of the BLC Parties to obtain any consent,
approval or action of, or make any filing with or give any notice to, any
Governmental Authority or any other Person, (v) violate any order or decree of
any court, arbitrator or other Governmental Authority against or binding upon
any of the BLC Parties or, to the Actual Knowledge of the REIT or the Operating
Partnership, any of its assets, or (vi) result in, or require the creation or
imposition of, any lien upon or with respect to any of the Interests, other than
as contemplated herein, except such consents, approvals, notices, conflicts,
breaches, defaults, results or requirements as could not reasonably be expected
to have a BLC Material Adverse Effect or impair or interfere with consummation
of the transactions contemplated herein. In addition, to each of the BLC
Parties' Actual Knowledge, excluding facts or circumstances generally affecting
the lodging industry, no facts or circumstances exist that, individually or in
the aggregate, could reasonably be expected to have a BLC Material Adverse
Effect or impair or interfere in any material respect with the consummation of
the transactions contemplated herein.
(f) LITIGATION, PROCEEDING, ETC. Except to the extent set forth in
SCHEDULE 7.1(f)(i), there is no action, suit, notice of violation, proceeding or
investigation pending or, to the Actual Knowledge of the REIT and the Operating
Partnership, threatened in writing against or affecting the REIT or the
Operating Partnership or any of their respective properties before or by any
Governmental Authority which (i) challenges the legality, validity or
enforceability of the transactions contemplated herein or of any of the
documents relating to the transactions contemplated herein, or (ii) could
(individually or in the aggregate) reasonably be expected to have a BLC Material
Adverse Effect or (iii) would (individually or in the aggregate) impair the
ability of either the REIT or the Operating Partnership to perform fully on a
timely basis any obligations which it has under any of the documents relating to
the transactions contemplated herein. Except to the extent set forth in SCHEDULE
7.1(f)(ii), none of the BLC Parties have received written notice or have Actual
Knowledge that it is (x) in default under or in violation of any indenture, loan
or credit agreement or any other agreement or instrument to which any of the
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BLC Parties is a party or by which the BLC Parties or any Property are bound,
(y) in violation of any order of any Governmental Authority, or (z) in violation
of any law, in each case of (x)-(z), which could reasonably be expected to (1)
adversely affect the legality, validity or enforceability of the documents
relating to the transactions contemplated herein, (2) adversely and materially
impair any of the BLC Parties' ability or obligation to perform fully on a
timely basis any obligation which it has under the documents relating to the
transactions contemplated herein, or (3) have any BLC Material Adverse Effect.
(g) GOVERNMENTAL CONSENTS, ETC. Except as may be required under any
federal or applicable state securities laws in connection with the performance
by the BLC Parties of their obligations under the OP Partnership Agreement with
respect to certain registration rights granted thereunder and assuming the
accuracy of the representations and warranties of, and the performance of the
agreements of, the BMC Parties under this Agreement and any other Transaction
Document, no authorization, consent, approval, waiver, license, qualification or
formal exemption from, nor any filing, declaration, qualification or
registration with, any Governmental Authority or any securities exchange is
required in connection with (a) the execution, delivery or performance by the
BLC Parties of this Agreement and any other Transaction Document, or (b) the
issuance of the OP Units pursuant to this Agreement. At the Closing Date, the
BLC Parties will have made all filings and given all notices to Governmental
Authorities and obtained all necessary registrations, declarations, approvals,
orders, consents, qualifications, franchises, certificates, permits and
authorizations from any Governmental Authorities, to own or lease its properties
and to conduct its businesses as currently owned, leased or conducted, or as
contemplated hereby, except where failure to do so could not reasonably be
expected to have a BLC Material Adverse Effect.
(h) COMPLIANCE WITH LAWS.
(i) None of the BLC Parties is in violation of any law,
regulation, order or decree of any Governmental Authority, court order,
decision, ruling, order or award of any arbitration other than a violation
which, individually or in the aggregate with other such violations, would
not impair or interfere in any material respect with the BLC Parties'
ability to consummate the transactions contemplated herein or have a BLC
Material Adverse Effect. None of the BLC Parties has received any written
notice of violation or claimed violation of any such law, regulation or
decree, or pending regulatory proceeding, action or investigation with
respect thereto, or any written threat by any Governmental Authority to
take regulatory action against any of the BLC Parties or any of the
Properties by reason of any such violation or claimed violation other than
such of the foregoing as, individually or in the aggregate, would not
impair or interfere in any material respect with the BLC Parties' ability
to consummate the transactions contemplated herein or have a BLC Material
Adverse Effect.
(ii) Except as set forth on SCHEDULE 7.1(h) hereto, no BLC Party
has Actual Knowledge or has received any written notice within the past
twelve (12) months from any Governmental Authority having jurisdiction over
any of the BLC Parties of any violation of any employment or other
regulatory law, order, regulation or requirement that remains uncured and
which, individually or in the aggregate with other such violations which
remain uncured, would impair or interfere in any material respect with
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the BLC Parties' ability to consummate the transactions contemplated herein
or have a BLC Material Adverse Effect.
(i) CAPITALIZATION.
(i) OP UNITS AND PARTNERSHIP UNITS. The capitalization of the
Operating Partnership is as set forth in EXHIBIT A of the OP Partnership
Agreement. As of the date hereof, an aggregate of 16,681,804 Partnership
Units are issued and outstanding, of which none are 1999-A Preferred Units
and 16,681,804 are Partnership Units. The "conversion factor" as defined in
the OP Partnership Agreement equals one (1) and prior to the date hereof no
event has occurred which could cause it to be changed. There are no
restrictions on the transfer of the OP Units to be issued hereunder other
than those contained in the OP Partnership Agreement (as amended by the OP
Partnership Amendment) or those arising out of federal and applicable state
securities laws. All currently issued and outstanding Partnership Units
were, and all of the OP Units to be issued in connection with the
transactions contemplated herein are duly authorized and validly issued in
accordance with the terms of the OP Partnership Agreement and in compliance
with federal and applicable state securities laws, and, are fully paid and
non-assessable with no pre-emptive rights and the OP Units to be issued in
connection with the transactions contemplated herein will be issued upon
the terms provided in the OP Partnership Agreement, as the same is to be
amended as permitted or required hereunder. Except as set forth on SCHEDULE
7.1(i)(a) and except for the OP Units to be issued pursuant to this
Agreement, as of the date hereof, there are no outstanding subscriptions,
options, warrants, preemptive or other rights or other security interests
or other arrangements or commitments obligating the Operating Partnership
to issue any OP Units or any other security interests, or to acquire or
redeem any of them. Except as described on SCHEDULE 7.1(i)(a), there are no
obligations to register any OP Units for any member of the Operating
Partnership for trading. At the Closing, upon receipt of the Interests and
Westboy Interests being contributed in exchange for OP Units, the Operating
Partnership will issue the OP Units to be issued hereunder free and clear
of all liens other than those suffered or permitted or granted by the BMC
Parties and, as of the Closing, JABO will be admitted as a limited partner
of the Operating Partnership. The issuance of the OP Units to JABO at the
Closing will not require any approval or consent of any Person, except any
such approval as shall have been obtained on or prior to the date hereof.
Assuming each of the BMC Parties is either an "accredited investor" as
defined in Rule 501 under the Securities Act or a person who is not an
accredited investor but was advised by a qualified purchaser's
representative (and there are no more than thirty-five (35) such
non-accredited investors), the issuance of the OP Units hereunder is exempt
from registration under the Securities Act and the applicable state
securities laws.
(ii) REIT SHARES. The SEC Documents set forth (i) the authorized
capital shares of the REIT, and (ii) for each class and series of capital
stock of the REIT, the total number of options and warrants to acquire such
capital stock and any commitments to issue or grant any of the foregoing.
As of December 31, 2001, the total number of shares of such capital shares
outstanding is 17,390,690, of which none are preferred shares and
17,390,690 are REIT Shares. All of the outstanding REIT Shares are duly and
validly issued, fully paid and non-assessable and not subject to any
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preemptive rights. Except as set forth on SCHEDULE 7.1(i)(b) and except for
REIT Shares that may be issued upon redemption of the OP Units issued under
this Agreement as Consideration, as of the date hereof, there are no
outstanding subscriptions, options, warrants, preemptive or other rights or
other security interests or other arrangements or commitments obligating
the REIT to issue any REIT Shares, any other shares of capital stock or any
other security interests, or to acquire or redeem any of them. Except as
described on SCHEDULE 7.1(i)(b), there are no obligations to register for
trading any REIT Shares or other equity interests in the REIT for any
person. The REIT Shares to be issued upon redemption of the OP Units issued
herein as Consideration will be issued free and clear of all liens other
than those suffered or permitted or granted by the BMC Parties and the
issuance of such REIT Shares to JABO will not require any approval or
consent of any Person, except for shareholder approval required for the
issuance of over 1% of the REIT's capital stock at any one instance,
assuming such issuance were to occur on the Closing Date. For the purposes
hereof, "SEC DOCUMENTS" shall mean all reports, schedules, forms,
statements, proxy information and solicitation materials and other
documents required by the Securities Act or the Securities Exchange Act of
1934, as amended, or the rules or regulations promulgated thereunder, filed
by the REIT in each case in the form and with the substance prescribed by
either such act or such rules or regulations, including, without limitation
the most recent filings by the REIT, which were made on November 14, 2001.
7.2 REPRESENTATIONS AND WARRANTIES OF THE BMC PARTIES. In order to induce
the BLC Parties to carry out the transactions contemplated by this Agreement, as
of the date of this Agreement, the BMC Parties represent and warrant to and
agree with each of the BLC Parties, as follows:
(a) ORGANIZATION, GOOD STANDING AND AUTHORITY; BINDING EFFECT.
(i) BMC is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Ohio, is duly
qualified to do business in all jurisdictions where such qualification is
necessary to carry on its business as now conducted, except where failure
to so qualify would not interfere in any material respect with the ability
of BMC to consummate any of the transactions contemplated in this
Agreement.
(ii) JABO is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware, is
duly qualified to do business in all jurisdictions where such qualification
is necessary to carry on its business as now conducted, except where
failure to so qualify would not interfere in any material respect with the
ability of JABO to complete any of the transactions contemplated in this
Agreement.
(iii) BMC owns 99% of the membership interests in JABO and is the
managing member of JABO. The Xxxx X. Xxxxxx 1997 Amended and Restated
Revocable Trust Indenture, dated November 19, 1997, owns 0.4615% of the
membership interests in JABO. The Xxxxxx X. Xxxxxx Second 1997 Amended and
Restated
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Revocable Trust Indenture, dated July 23, 1997, owns 0.5385% of the
membership interests in JABO.
(iv) Each of the BMC Parties is authorized to consummate the
transactions contemplated hereby, to fulfill all of their respective
obligations hereunder and under all documents contemplated hereunder to be
executed by the BMC Parties and to execute and deliver this Agreement and
the other Transaction Documents and all documents contemplated hereunder
and thereunder to be executed by any of the BMC Parties, and to perform all
of its respective obligations hereunder and thereunder. The BMC Parties
have delivered to the BLC Parties true, correct and complete copies of the
certificate of formation of BMC and JABO and the operating agreements of
BMC and JABO.
(v) JABO has the power to, and is duly authorized and otherwise
duly qualified to, purchase and hold securities such as Partnership Units
and common shares of the REIT.
(vi) This Agreement and the other Transaction Documents have
been, and all documents contemplated hereunder and thereunder to be
executed by the BMC Parties, when executed and delivered will have been,
duly authorized and approved by all necessary action of BMC or JABO, as
applicable, and are, or will be upon execution and delivery, a legal, valid
and binding obligation of each such party as the case may be, enforceable
against each party in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other similar laws relating to or affecting creditors' rights generally and
to general principles of equity (including concepts of materiality,
reasonableness, good faith and fair dealing), regardless of whether
considered in a proceeding in equity or at law.
(vii) Except to the extent set forth in SCHEDULE 7.2(a), the
execution, delivery, and performance by each of the BMC Parties of this
Agreement and each of the Transaction Documents and the consummation of the
transactions contemplated hereby and thereby (including the transfer of the
Interests and the Westboy Interests to the Operating Partnership) will not
(A) subject to receipt of the consents and approvals described in clause
(B), violate any provision of the governing documents of any of the BMC
Parties or any Lessee Organizational Documents, except where failure to do
so would not interfere in any material respect with the ability of the BMC
Parties or the Lessees (other than with respect to the Management
Agreements) to complete any of the transactions contemplated in this
Agreement or any other Transaction Document and comply with their terms or
materially and adversely affect the business, operations, financial
condition or assets of the BMC Parties or the Lessees, determined either
(i) without giving effect in whole or in part to the transactions
contemplated herein, or (ii) after giving such effect, (B) require any of
the BMC Parties to obtain any consent, approval, or action of, or make any
filing with or give any notice to, any Governmental Authority or any other
Person, (C) conflict with, result in the breach of or constitute a default
under any lease, note, mortgage, or other binding agreement to which any of
the BMC Parties, any Lessee or Westboy is a party or by or to which any of
the BMC Parties, Westboy or any of the Lessees may be bound, (D) violate
any order or decree of any
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court, arbitrator or other Governmental Authority against or binding upon
any of the BMC Parties or any of the Lessees or, to the Actual Knowledge of
BMC, any of the Properties, (E) violate any law or regulation of any
Governmental Authority presently in effect to which any of the BMC Parties
or any of the Lessees is subject, or (F) result in, or require the creation
or imposition of, any lien upon or with respect to any of the Interests,
other than as contemplated herein; except, in the case of the preceding
clauses (B), (C), (D), (E), and (F), where the failure to obtain a consent,
approval or action or to make any filing where the occurrence of such a
conflict, breach, default, violation, results or requirements individually
or in the aggregate, would not have a material adverse effect on the
business, results of operations or financial operation of (x) a Lessee
and/or its related Property (a "PROPERTY MATERIAL ADVERSE EFFECT"), or (y)
Westboy or the Westboy Properties on an aggregate basis (a "WESTBOY
MATERIAL ADVERSE EFFECT") or impair or interfere in any material respect
with the consummation of the transactions contemplated herein. In addition,
to the Actual Knowledge of the BMC Parties, excluding facts or
circumstances generally affecting the lodging industry, no facts or
circumstances exist that, individually or in the aggregate, could
reasonably be expected to have a Property Material Adverse Effect or impair
or interfere in material respect with the consummation of the transactions
contemplated herein.
(b) TITLE TO INTERESTS AND WESTBOY INTERESTS.
(i) The Interests have been duly authorized and validly issued in
accordance with the constituent organizational documents of the issuers
thereof and applicable law. JABO, immediately preceding the Closing, will
own 100% of the Interests to be contributed, free and clear of all rights,
liens, claims and encumbrances other than claims or encumbrances arising
pursuant to the organizational documents of the relevant issuer of those
Interests and claims arising pursuant to this Agreement, and subject to
restrictions on transfer under federal and state securities laws. Neither
BMC nor JABO has pledged any of the Interests or consented to the pledge or
encumbrance of any of the Interests.
(ii) The Westboy Interests have been duly authorized and validly
issued in accordance with the articles of organization and operating
agreement of Westboy and applicable law. JABO, immediately prior to the
Closing, will own 100% of the Westboy Interests to be contributed, and are
free and clear of all rights, liens, claims and encumbrances other than
claims or encumbrances arising pursuant to the articles of organization or
operating agreement of Westboy and applicable law and pursuant to this
Agreement and restrictions on transfer under federal and state securities
laws. Neither BMC nor JABO has pledged any of the Westboy Interests or
consented to the pledge or encumbrance of any of the Westboy Interests.
(iii) The BMC Operating Agreement, the JABO Operating Agreement,
and the Lessee Organizational Documents are described on SCHEDULE 7.2(b)
attached hereto, and, prior to the date hereof, a true, correct and
complete copy of the Lessee Organization Documents have been delivered to
the Operating Partnership or its counsel. The BMC Operating Agreement, the
JABO Operating Agreement and the Lessee Organizational Documents are in
full force and effect.
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(c) LITIGATION, PROCEEDING, ETC. There is no action, suit, notice of
violation, or proceeding or, to the Actual Knowledge of the BMC Parties,
investigation pending or threatened in writing against any of the BMC Parties,
any of the Lessees or Westboy before or by any Governmental Authority which (i)
challenges the legality, validity or enforceability of the transactions
contemplated herein or of any of the documents relating to the transactions
contemplated herein, or (ii) could (individually or in the aggregate) reasonably
be expected to have a Property Material Adverse Effect or a Westboy Material
Adverse Effect, or (iii) would (individually or in the aggregate) impair the
ability of the BMC Parties to perform fully on a timely basis any obligations
which it has under any of the documents relating to the transactions
contemplated herein, other than those which, individually or in the aggregate
would neither impair or interfere in any material respect with BMC's ability to
consummate the transactions contemplated herein nor have a Property Material
Adverse Effect or a Westboy Material Adverse Effect. None of the BMC Parties has
received written notice or has Actual Knowledge that it is (x) in default under
or in violation of any indenture, loan or credit agreement or any other
agreement or instrument to which it, Westboy or any Lessee is a party or by
which any of the BMC Parties, Westboy, any Lessee or any Property are bound, (y)
in violation of any order of any Governmental Authority, or (z) in violation of
any law, in each case of (x)-(z), which could reasonably be expected to (1)
adversely affect the legality, validity or enforceability of the documents
relating to the transactions contemplated herein, (2) adversely and materially
impair any of the BMC Parties' ability or obligation to perform fully on a
timely basis any obligation which it has under the documents relating to the
transactions contemplated herein, or (3) have any Property Material Adverse
Effect or any Westboy Material Adverse Effect.
(d) COMPLIANCE WITH LAWS.
(i) None of the BMC Parties, Westboy or Lessees is in violation
of any law, regulation, order or decree of any Governmental Authority,
court order, decision, ruling, order or award of any arbitration other than
a violation which, individually or in the aggregate with other such
violations, would not impair or interfere in any material respect with
BMC's ability to consummate the transactions contemplated herein or have a
Property Material Adverse Effect or a Westboy Material Adverse Effect.
Neither BMC, nor Westboy, nor any Lessee has received any written notice of
violation or claimed violation of any such law, regulation or decree, or
pending regulatory proceeding, action or investigation with respect
thereto, or any written threat by any Governmental Authority to take
regulatory action against BMC or any of the Properties by reason of any
such violation or claimed violation other than such of the foregoing as,
individually or in the aggregate, would not impair or interfere in any
material respect with the BMC Parties' ability to consummate the
transactions contemplated herein or have a Property Material Adverse Effect
or a Westboy Material Adverse Effect.
(ii) Except as set forth on SCHEDULE 7.2(d) hereto, neither BMC,
nor Westboy, nor any Lessee has Actual Knowledge or has received any
written notice within the past twelve (12) months from any Governmental
Authority having jurisdiction over any of the BMC Parties, Westboy or the
Lessees of any violation of any employment or other regulatory law, order,
regulation or requirement relating to the management of the Properties that
remains uncured and which, individually or in the aggregate with other such
violations which remain uncured, would impair or interfere in any material
respect
-24-
with the BMC Parties' ability to consummate the transactions contemplated
herein or have a Property Material Adverse Effect or a Westboy Material
Adverse Effect.
(e) PERMITS. Each of the Lessees and Westboy have all material permits
that are necessary for the use, operation and licensing of the management of
their respective Properties and are not in material violation of any such
permits.
(f) INSOLVENCY. There are no attachments, executions or assignments
for the benefit of creditors, or voluntary or involuntary proceedings in
bankruptcy, or under any other debtor relief laws, pending or, to the Actual
Knowledge of BMC, threatened in writing against any of the BMC Parties, the
Lessees or Westboy.
(g) LESSEES AND WESTBOY.
(i) each of the Lessees and Westboy is duly organized and validly
existing under the laws of its jurisdiction of organization and has the
power and authority to carry on its business as now being conducted;
(ii) each Lessee and Westboy is duly qualified to do business and
is in good standing in each jurisdiction in which the nature of its
business or the ownership and/or leasing of its properties makes such
qualification necessary, other than in such jurisdictions where the failure
to be so qualified or licensed, individually or in the aggregate, could not
reasonably be expected to have a Property Material Adverse Effect or a
Westboy Material Adverse Effect;
(iii) none of the Lessees or Westboy has conducted or currently
conducts any business or has owned or owns any assets other than cash and
investment securities and direct or indirect leasehold interests in a
Property and assets relating thereto;
(iv) SCHEDULE 7.2(g)(iv) attached hereto identifies for each
Lessee and Westboy the relevant certificate of formation, the relevant
operating agreement, as applicable, and in each case all amendments thereto
through the date of this Agreement, and the BMC Parties have delivered to
the Operating Partnership complete and correct copies of each of such
instruments, agreements and amendments;
(v) none of the Lessees or Westboy is in breach of, or in default
under, the constituent organizational documents of such entity, no member
of any Lessee or Westboy is in breach of, or default under, the
organizational documents of such Lessee or Westboy and no event has
occurred that, with the giving of notice or the passage of time, or both,
would constitute a default under the constituent organizational documents
of any of the Lessees or Westboy, except for such breach or violation that
would not result in a Property Material Adverse Effect or a Westboy
Material Adverse Effect;
(vi) Except as identified on SCHEDULE 7.2(g)(vi) no member or
other affiliate of any of the Lessees or Westboy has made a loan to such
Lessee or Westboy that is outstanding on the date hereof and none of the
BMC Parties has any outstanding capital commitments to any of the Lessees
or Westboy, except for the Westboy Note,
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which the Operating Partnership will assume pursuant to the Westboy Note
Assumption as contemplated by this Agreement.
(vii) none of the Lessees or Westboy is in default under, or in
breach of, any of the Percentage Leases or Space Leases, and to the Actual
Knowledge of the BMC Parties no event has occurred which, with the giving
of notice or the passage of time or both, would constitute a default under
any of the Percentage Leases or Space Leases, which in each case could
reasonably be expected to constitute a Property Material Adverse Effect or
a Westboy Material Adverse Effect, as the case may be.
(h) OPERATING CONTRACTS. Except as set forth on SCHEDULE 7.2(h)
("OPERATING CONTRACTS"), there are no management, service, operating, listing,
brokerage, supply and maintenance agreements, equipment leases, or other
contracts or agreements between Westboy or any Lessee, or any of their
Affiliates and any other party relating to operations at the Property leased by
it as of the date hereof, other than those that (i) involve total payment of not
more than $25,000 per annum or are terminable by the relevant Lessee or Westboy
without a penalty in excess of $1,000 upon six (6) months prior written notice
or less or (ii) are terminable by the relevant Lessee or Westboy without penalty
upon the sale of the Property. Each of the Operating Contracts is in full force
and effect and, except as set forth on SCHEDULE 7.2 (h), has not been amended,
modified or supplemented.
(i) FINANCIAL STATEMENTS. The financial statements for Westboy as of
and for the year ended December 31, 2000, which were previously made available
to the BLC Parties, were prepared in accordance with GAAP, and, except as
disclosed on SCHEDULE 7.2(i), to the Actual Knowledge of the BMC Parties, fairly
present in all material respects and in accordance with applicable accounting
principles the financial position and results of operations of Westboy at or as
of the date or period specified therein. Since December 31, 2000, except as set
forth on SCHEDULE 7.2(I), Westboy has conducted its business in the ordinary
course consistent in all material respects with past practice.
(j) NO OTHER LIABILITIES. Except as described in any of the
Transaction Documents, or any exhibits or schedules hereto and thereto or as
otherwise disclosed in writing to the BLC Parties, with the exception of the
applicable Lease, none of the Lessees has incurred any material liability,
whether absolute, accrued, contingent or otherwise. To the Actual Knowledge of
the BMC Parties, Westboy has not incurred any liability, whether absolute,
accrued, contingent or otherwise that could reasonably be expected to result in
a Westboy Material Adverse Effect, except as set forth in the financial
statements for Westboy, which were previously made available to the BLC Parties,
and except for liabilities incurred in the ordinary course of business or that
are not required by GAAP consistently applied to be reflected on such financial
statements.
(k) EMPLOYEES. Neither Westboy nor any Lessee has any employees or
maintains any "EMPLOYEE BENEFIT PLAN" as that term is defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended, and neither
Westboy nor any of the Lessees has ever had any employees or maintained any such
Employee Benefit Plan.
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(l) NO FOREIGN OWNERS. None of the BMC Parties, Lessees or Westboy is
or will become, directly or indirectly, a Foreign Owner (as hereinafter defined)
in the Operating Partnership as a result of the transactions contemplated by
this Agreement. "FOREIGN OWNER" as used herein, means a foreign person or a
person that is directly or indirectly owned, in whole or in part, by a foreign
person as determined in accordance with Section 897(h)(4) of the Internal
Revenue Code of 1986 as amended and the regulations promulgated thereunder.
(m) PRIVATE OFFERING. None of the BMC Parties, nor any Person acting
on their behalf has taken, or will prior to the applicable Closing Date take,
any action that could reasonably be expected to subject the OP Units issued on
such Closing Date to the registration requirements of Section 5 of the
Securities Act of 1933, as amended.
(n) PARTNERSHIP STATUS; OWNERSHIP OF CORPORATIONS. JABO is treated as
a partnership and the Lessees and Westboy are treated as a single-member limited
liability companies that are disregarded as entities separate from their
respective owners, for federal income tax purposes. Neither JABO, any the
Lessees nor Westboy have made any election to be taxed as a corporation for
federal income tax purposes. None of the Lessees owns any of the stock of any
entity that is treated as a corporation or an association taxed as a corporation
for federal income tax purposes.
(o) INVESTMENT REPRESENTATIONS. JABO, for itself, and for each member
or other equity holder of JABO, hereby acknowledges that it (i) has been given
full and complete access to the Operating Partnership and its management in
connection with this Agreement and the transactions contemplated hereby, (ii)
has had the opportunity to review all documents relevant to its decision to
enter into this Agreement, and (iii) has had the opportunity to ask questions of
the Operating Partnership and its management concerning its investment in the
Operating Partnership and the transactions contemplated hereby. JABO, for itself
and for each member of JABO, acknowledges that it understands that the OP Units
to be purchased or received by it hereunder will not be registered under the
Securities Act in reliance upon the exemption afforded by Section 4(2) thereof
for transactions by an issuer not involving any public offering and will not be
registered or qualified under any applicable state securities laws. JABO
represents that (i) it is acquiring such OP Units for investment only and
without any view toward distribution thereof in violation of any applicable
securities or other laws, and it will not sell or otherwise dispose of such OP
Units except in compliance with the registration requirements or exemption
provisions of any applicable federal or state securities laws and in accordance
with the terms of such securities set forth in the OP Partnership Agreement,
(ii) its economic circumstances are such that it is able to bear all risks of
the investment in the Partnership Units for an indefinite period of time,
including the risk of a complete loss of its investment in the Partnership
Units, (iii) it has knowledge and experience in financial and business matters
sufficient to evaluate the risks of investment in the OP Units, and (iv) it has
consulted with its own counsel and tax advisor, to the extent deemed necessary
by it, as to all legal and taxation matters covered by this Agreement and has
not relied upon the Operating Partnership for any explanation of the application
of the various federal or state securities laws or tax laws with regard to its
acquisition of the OP Units. JABO further acknowledges and represents that it
has made its own independent investigation of the Operating Partnership and the
business proposed to be conducted by the Operating Partnership and that any
information relating thereto furnished to JABO was supplied by or on behalf of
the Operating Partnership.
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(p) OWNERSHIP OF ASSETS. The Lessees have good right, title and
interest in and to the Assigned Property and to the leasehold interests in the
Percentage Leases, free and clear of all liens or encumbrances.
7.3 SURVIVAL. The representations and warranties in this Article VII shall
survive the Closing for two (2) years following the Closing Date (the "GENERAL
SURVIVAL PERIOD"); provided, however, that the representations and warranties
set forth in Section 7.2(g)(vii) and Sections 7.2(c)(ii), 7.2(d), 7.2(e) and
7.2(j) to the extent they apply to a claim relating to the condition or
maintenance of the Properties shall survive the Closing for one (1) year
following the Closing Date (the "PROPERTY SURVIVAL PERIOD"), except for
representations and warranties regarding any Environmental Liabilities, which
shall survive until the expiration of the relevant statutes of limitation
applicable to the relevant Environmental Liabilities (the "ENVIRONMENTAL
LIABILITIES SURVIVAL PERIOD"; each of the Environmental Liabilities Survival
Period, the General Survival Period and Property Survival Period, a "SURVIVAL
PERIOD").
ARTICLE 8
INDEMNIFICATION
8.1 OBLIGATION OF THE BLC PARTIES TO INDEMNIFY.
(a) The BLC Parties hereby jointly and severally agree to indemnify,
defend and hold harmless each of the BMC Parties and their respective directors,
officers, employees, representatives, members, stockholders, partners, and
Affiliates (the "BMC INDEMNITEES") from and against all costs, liabilities,
damages and expenses (including, without limitation, reasonable attorneys' fees
and disbursements) imposed upon, incurred by (whether by way of judgment, award,
decree, settlement payment or otherwise) or suffered by any of the BMC Parties
by reason of any (i) breach or inaccuracy of any representation or warranty of
the BLC Parties contained in Section 7.1 or in any certificate delivered
pursuant to Section 5.3, (ii) breach of any covenant of the BLC Parties (by
them, or, with respect to actions taken after the Closing Date, by the Lessees)
and their Affiliates contained herein or in any Transaction Document, (iii) any
failure (by them or, with respect to actions taken after the Closing Date, by
the Lessees) to comply with the terms of any Transaction Document provided
hereunder or thereunder, including, without limitation, the failure to issue any
OP Units at the Closing as provided herein; or (iv) any Environmental
Liabilities for which BMC would have been indemnified under the terms of the
Lease as of the date hereof.
(b) In addition, the BLC Parties, jointly and severally, agree to
indemnify, protect, defend, and hold each of the BMC Indemnities harmless from
and against any and all claims, causes of action, demands, obligations, losses,
damages, liabilities, judgments, costs and expenses (including, without
limitation, reasonable attorneys' fees, charges and disbursements) relating to
or arising in respect of (i) any liabilities, costs and charges in connection
with any of the liquor licenses for any of the Properties, including, without
limitation the costs involved in connection with the transfer of such licenses
to any of the BLC Parties or the Lessees or any payments or obligations to be
performed pursuant to such liquor licenses (whether or not assigned by BMC to a
Lessee) after the date hereof; (ii) any liabilities, costs and charges in
connection with any of the franchise license agreements for any of the
Properties, including,
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without limitation, the costs involved in connection with the transfer of such
franchise license agreements to any of the BLC Parties or the Lessees or any
payments to be made or obligations to be performed pursuant to such franchise
license agreements (whether or not assigned by BMC to a Lessee) after the date
hereof; and (iii) any obligations of BMC to Westboy pursuant to the Westboy
Note. Notwithstanding any of the foregoing provisions of this Section 8.1(b),
the BLC Parties shall have no obligation to indemnify the BMC Indemnitees with
respect to any matter for which any of the BLC Indemnitees is entitled to
indemnification pursuant to either the Management Agreements or this Agreement.
(c) In the case of any claim asserted by a third party against the BMC
Indemnitees, including without limitation, any claim by a Governmental Authority
and any request by such Governmental Authority to audit or otherwise inquire
into or examine (an "INQUIRY") any matters as to which a claim might arise
hereunder, and for which the BLC Parties have agreed to indemnify the BMC
Indemnitees pursuant to Section 8.1(a) and (b), the BMC Indemnitees shall notify
the BLC Parties for the purpose of representing their collective interests in
the event of a claim against the BMC Indemnitees promptly after the BMC
Indemnitees have Actual Knowledge of any claim as to which indemnity may be
sought or as to any such Inquiry, and the BMC Indemnitees shall permit the BLC
Parties to assume the defense of any claim or any litigation resulting therefrom
or administer such Inquiry, provided, that, (i) counsel to the BLC Parties, who
shall conduct the defense of such claim or litigation or the administration of
such Inquiry, shall be reasonably satisfactory to the BMC Indemnitees, and the
BMC Parties may participate in such defense at their expense, and (ii) the
omission by the BMC Indemnitees to give notice as provided herein shall not
relieve the BLC Parties of their indemnification obligation under this Agreement
except to the extent that the BLC Parties are materially damaged as a result of
such failure to give such notice. The BLC Parties, in the defense of any such
claim or litigation, shall not, except with the consent of the BMC Parties (x)
consent to entry of any judgment or enter into any settlement that provides for
injunctive or other non-monetary relief affecting the BMC Indemnitees or that
does not include as a term thereof the giving by the claimant or plaintiff to
the BMC Indemnitees of an unconditional release from all liability with respect
to such claim or litigation, or (y) pursue any course of defense of any claim
subject to indemnification hereunder, if the BMC Parties shall reasonably and in
good faith determine that the conduct of such defense might be expected to
affect the BMC Parties in any material respect. In the event that the BMC
Parties shall reasonably and in good faith determine that any proposed
settlement of any claim subject to indemnification hereunder by the BLC Parties
might be expected to affect materially and adversely the BMC Parties or that the
BMC Parties may have available one or more defenses or counterclaims that are
inconsistent with one or more of those that may be available to the BLC Parties
in respect of such claims or litigation relating thereto, the BMC Parties shall
have the right at all times to take over and assume control over the settlement,
negotiations and litigation relating to any such claim at the sole cost of the
BLC Parties, provided, that, if the BMC Parties do so take over and assume
control, the BMC Parties shall not settle such claim or litigation without the
written consent of the BLC Parties, such consent not to be unreasonably
withheld, and the liability of the BLC Parties with respect to such claim or
litigation shall in no event exceed the amount the BLC Parties would have paid
in settlement thereof. In the event that the BLC Parties do not accept the
defense of any matter as above provided, the BMC Parties shall have the full
right to defend against any such claim or demand, and shall be entitled to
settle or agree to pay in full such claim or demand with the consent of the BLC
Parties, which shall not be unreasonably withheld. In any event, the BLC
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Parties and the BMC Parties shall cooperate fully, to the extent reasonably
required, in the defense of any action or claim subject to this Agreement and
the records of each shall be available to the other with respect to such
defense. Acceptance of the defense of any claim or litigation or of the
administration of any Inquiry by the BLC Parties shall be without prejudice to
the BLC Parties' right to assert at any time before or after accepting such
defense or administration that they are not obligated to provide indemnity,
either in whole or in part, with respect to such claim or litigation for which
such defense is accepted or which might subsequently arise from such Inquiry.
8.2 OBLIGATION OF THE BMC PARTIES TO INDEMNIFY.
(a) The BMC Parties hereby jointly and severally agree to indemnify,
defend and hold harmless each of the BLC Parties and their respective directors,
officers, employees, representatives, members, stockholders, partners, and
Affiliates (the "BLC INDEMNITEES") from and against all costs, liabilities,
damages and expenses (including, without limitation, reasonable attorneys' fees
and disbursements) imposed upon, incurred by (whether by way of judgment, award,
decree, settlement payment or otherwise) or suffered by the BLC Parties by
reason of any (i) breach or inaccuracy of any representation or warranty of BMC
contained in Section 7.2 or in any certificate delivered by BMC pursuant to
Section 5.2, (ii) breach of any covenant of BMC or its Affiliates contained
herein or in any Transaction Document, or (iii) any failure to comply with the
terms of any Transaction Document or any other document provided hereunder or
thereunder.
(b) In the case of any claim asserted by a third party against the BLC
Indemnitees, including without limitation, any claim by a Governmental Authority
and any Inquiry and for which the BMC Parties have agreed to indemnify the BLC
Indemnitees pursuant to Section 8.2(a), the BLC Indemnitees shall notify the BMC
Parties for the purpose of representing their collective interests in the event
of a claim against the BLC Indemnitees promptly after the BLC Indemnitees have
Actual Knowledge of any claim as to which indemnity may be sought or as to any
such Inquiry, and the BLC Indemnitees shall permit the BMC Parties to assume the
defense of any claim or any litigation resulting therefrom or administer such
Inquiry, provided, that, (i) counsel to the BMC Parties, who shall conduct the
defense of such claim or litigation or the administration of such Inquiry, shall
be reasonably satisfactory to the BLC Indemnitees, and the BLC Parties may
participate in such defense at the expense of the BLC Parties, and (ii) the
omission by the BLC Indemnitees to give notice as provided herein shall not
relieve the BMC Parties of their indemnification obligation under this Agreement
except to the extent that the BMC Parties are materially damaged as a result of
such failure to give such notice. The BMC Parties, in the defense of any such
claim or litigation, shall not, except with the consent of the BLC Parties (x)
consent to entry of any judgment or enter into any settlement that provides for
injunctive or other non-monetary relief affecting the BLC Indemnitees or that
does not include as a term thereof the giving by the claimant or plaintiff to
the BLC Indemnitees of an unconditional release from all liability with respect
to such claim or litigation, or (y) pursue any course of defense of any claim
subject to indemnification hereunder, if the BLC Parties shall reasonably and in
good faith determine that the conduct of such defense might be expected to
affect materially and adversely the tax liability of the BLC Parties or ability
to conduct their business or adversely affect the use of the Properties in any
material respect. In the event that the BLC Parties shall reasonably and in good
faith determine that any proposed
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settlement of any claim subject to indemnification hereunder by the BMC Parties
might be expected to affect adversely the BLC Parties or that the BLC Parties
may have available one or more defenses or counterclaims that are inconsistent
with one or more of those that may be available to the BMC Parties in respect of
such claims or litigation relating thereto, the BLC Parties shall have the right
at all times to take over and assume control over the settlement, negotiations
and litigation relating to any such claim at the sole cost of BMC, provided,
that, if the BLC Parties do so take over and assume control, the BLC Parties
shall not settle such claim or litigation without the written consent of BMC,
such consent not to be unreasonably withheld, and the liability of the BMC
Parties with respect to such claim or litigation shall in no event exceed the
amount BMC would have paid in settlement thereof. In the event that the BMC
Parties do not accept the defense of any matter as above provided, the BLC
Parties shall have the full right to defend against any such claim or demand,
and shall be entitled to settle or agree to pay in full such claim or demand
with the consent of the BMC Parties, which shall not be unreasonably withheld.
In any event, the BMC Parties and the BLC Parties shall cooperate fully, to the
extent reasonably required, in the defense of any action or claim subject to
this Agreement and the records of each shall be available to the other with
respect to such defense. Acceptance of the defense of any claim or litigation or
of the administration of any Inquiry by the BMC Parties shall be without
prejudice to the BMC Parties' right to assert at any time before or after
accepting such defense or administration that they are not obligated to provide
indemnity, either in whole or in part, with respect to such claim or litigation
for which such defense is accepted or which might subsequently arise from such
Inquiry.
(c) LIMITATIONS ON RECOVERY. Notwithstanding anything to the contrary
in this Article VIII or any other provision of this Agreement, it is expressly
understood and agreed by the parties that, without limiting or affecting any
other obligation of either party to defend and indemnify contained in this
Article VIII or otherwise in this Agreement, the BLC Parties shall not be
entitled to indemnification unless (A) the amounts to which the BLC Parties are
entitled for indemnification hereunder for all such breaches collectively
aggregate more than $250,000, it being understood and agreed that the BLC
Parties shall only be entitled to indemnification for amounts in excess of the
foregoing threshold, and (B) the BLC Parties have given the BMC Parties written
notice of such claim on or prior to the expiration of the relevant Survival
Period, it being understood and agreed that the BMC Parties shall have no
further liability under or in respect of such warranties and representations
after the expiration of such Survival Period, except to the extent of any breach
thereof of which the BLC Parties give the BMC Parties written notice on or prior
to the expiration of such Survival Period. Notwithstanding anything to the
contrary contained herein, in no event shall BMC be liable under this Article
VIII for any amount in excess of $1,000,000 with respect to claims for
indemnification for any single Property (the "PER PROPERTY LIABILITY CAP") and
$10,000,000 (the "LIABILITY CAP") in the aggregate for all claims for
indemnification thereunder, provided, however, that the Environmental
Liabilities will not be subject to either the Per Property Liability Cap or the
Liability Cap. Notwithstanding anything herein to the contrary, the BLC
Indemnitees shall not be entitled to any indemnification under this Agreement
with respect to any claim which is adjusted pursuant to Article IX herein. Any
such adjustments shall not be included in the calculation of either the Per
Property Liability Cap or the Liability Cap.
(d) AVAILABLE REMEDIES. Notwithstanding anything herein to the
contrary, the parties hereto agree that their sole remedy with respect to the
matters addressed by Articles IV,
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VI, VII and VIII shall be the remedies provided in this Article VIII. Except to
the extent covered in this Agreement, the BLC Parties hereby release the BMC
Parties with respect to all obligations or liabilities, relating to matters or
events that occurred on or prior to the date hereof, under (i) the Percentage
Leases , and (ii) the Westboy Note.
8.3 NET CLAIMS. Notwithstanding anything herein to the contrary, all claims
for indemnification under this Article VIII shall be net of (i) all insurance
proceeds received by the party seeking indemnification and (ii) the after-tax
cost of such claim.
ARTICLE 9
APPORTIONMENTS AND PAYMENTS
9.1 PAYMENTS - LESSEE PROPERTIES. The parties shall effect a cash
adjustment within five (5) days of their receipt of the Closing Statement, as
described in Section 9.3. Such cash adjustment shall be equal to the amount
representing the difference between the credits received by JABO pursuant to
Section 9.1(a) and the credits received by the Operating Partnership pursuant to
Section 9.1(b) (such amount to be referred to herein as the "NET CURRENT ASSETS
AND LIABILITIES AMOUNT"). To the extent the aggregate credits received by JABO
pursuant to Section 9.1(a) exceeds the aggregate credits received by the
Operating Partnership pursuant to Section 9.1(b), the Operating Partnership
shall pay JABO an amount equal to the Net Current Assets and Liabilities Amount;
and to the extent the aggregate credits received by the Operating Partnership
pursuant to Section 9.1(b) exceeds the aggregate credits received by JABO
pursuant to Section 9.1(a), JABO shall pay the Operating Partnership an amount
equal to the Net Current Assets and Liabilities Amount.
(a) To the extent assigned by BMC to the Lessees (or held by BMC for
the Lessees' benefit under the Management Agreements), JABO shall receive a
credit for the following working capital assets used in the operation of the
Lessee Properties, calculated and accrued and valued as of the Cutoff Time
determined in accordance with GAAP, consistently applied:
(i) The amount of all xxxxx cash funds and cash in house banks;
(ii) The book value of all bank deposits held in financial
institutions for depository, merchant, credit card, payroll, disbursement
or other purposes relating to the operation of the Lessee Properties, but
excluding cash concentration or other corporate or pooled accounts of JABO;
(iii) The net collectable value (determined after deducting a
reserve for doubtful accounts consistent with prior practice) of trade
accounts receivable and other accounts receivable relating to the ordinary
operation of the Lessee Properties (i.e., guest ledger, city ledger, other
trade accounts receivable and rents, leases and concessions receivable, but
excluding JABO's or BMC's intercompany accounts receivable);
(iv) The net book value of food, beverage, gift shop and other
inventories (but excluding inventories of china, glassware, silverware,
linen, consumable supplies, or other items not historically inventoried
under BMC's accounting procedures);
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(v) Prepaid expenses and assignable deposits and deposits made by
BMC for the benefit of the Lessees; and
(vi) Any other assets in connection with the Lessee Properties
assigned by BMC to the Lessees on the date hereof, but excluding assets
considered fixed assets or amortizable assets under GAAP.
(b) To the extent assumed by the Lessees (or payable by BMC for the
Lessees' account under the Management Agreements), the Operating Partnership
shall receive a credit for the following working capital liabilities relating to
the operation of the Lessee Properties, calculated in accordance with GAAP
consistently applied and accrued and valued as of the Cutoff Time:
(i) The amount of trade or other accounts payable at the Cutoff
Time relating to the operation of the Lessee Properties, excluding amounts
payable to JABO or its Affiliates;
(ii) Advance payments (including obligations under gift
certificates), if any, under bookings to the extent the bookings relate in
whole or in part to a period after the Cutoff Time;
(iii) All security and other deposits held by JABO as of the
Cutoff Time with respect to Space Leases, personal property leases and
contracts;
(iv) Accrued expenses at the Cutoff Time relating to the
operation of the Lessee Properties, including accrued rent under the
Percentage Leases whereunder percentage rent is payable;
(v) Accrued payroll and benefits (including vacation and holiday
time, retirement plan contributions, and insurance, but excluding the
matters addressed by Section 9.1(c) below) relating to the Lessee
Properties' employees as of the Cutoff Time; and
(vi) Any other liabilities and obligations assumed by the Lessees
from BMC on the date hereof, provided, however, that any contingent
liability shall be allocated the amount agreed upon by the parties or, if
the parties are unable to reach an agreement, such contingent liability
will not be allocated any amount until a final, non-appealable judgment or
settlement is reached, and the control of any claim in connection thereof
shall be managed as described in Section 8.2(b).
(c) In addition to the payments provided for in (a) and (b) above,
JABO shall pay to the Operating Partnership the amount accrued for vacation
liabilities (calculated in accordance with GAAP consistently applied and accrued
and valued as of the Cutoff Time, but subject to adjustment as provided herein)
for employees at the Lessee Properties (the "ACCRUED VACATION TIME") in twelve
equal installments without interest, commencing on the first day of the calendar
month following the Cutoff Time, and continuing on the first day of each
calendar month thereafter until paid in full.
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9.2 ADJUSTMENTS AND PRORATIONS - WESTBOY. The parties shall effect a cash
adjustment within 5 days of their receipt of the Closing Statement, as described
in Section 9.3. If the Westboy Member's Equity is an amount which is a larger
deficit than a $1,600,000 deficit, the difference between the Member's Equity
and negative $1,600,000 shall be paid by JABO to the Operating Partnership in
cash within five (5) days of the receipt of the Closing Statement, as described
in Section 9.3 herein. If the Westboy Member's Equity is determined to be a
smaller deficit than a $1,600,000 deficit or is determined to be a positive
amount, the difference between the Member's Equity and negative $1,600,000 shall
be paid by the Operating Partnership to JABO in cash within five (5) days of the
receipt of the Closing Statement, as described in Section 9.3 herein. Any
contingent liability shall be allocated the amount agreed upon by the parties
or, if the parties are unable to reach an agreement, such contingent liability
will not be allocated any amount until a final, non-appealable judgment or
settlement is reached, and the control of any claim in connection thereof shall
be managed as described in Section 8.2(b).
9.3 SETTLEMENT PROCEDURES. JABO shall cause its accounting staff ("JABO'S
ACCOUNTANTS") to make such examinations and audits of the Properties, and of the
books and records of the Lessee Properties, Westboy and the Westboy Properties
as JABO's Accountants may deem necessary to make the adjustments and prorations
required under this Article 9. The Operating Partnership or its designated
representatives may be present at such examinations and audits of the Lessee
Properties. Based upon such audits and inventories, JABO's Accountants will
prepare and deliver to the Operating Partnership no later than twenty-five (25)
days after the Cutoff Time a closing statement (the "CLOSING STATEMENT"). The
Closing Statement shall contain JABO's calculation of the Net Current Assets and
Liabilities Amount, the Accrued Vacation Time and the Westboy Member's Equity
and shall be subject to the concurrence therewith of the Operating Partnership.
The amounts set forth on the Closing Statement shall be the basis upon which the
payments described in Sections 9.1 and 9.2 shall be made. Fifteen (15) months
after the Cutoff Time (the "WIND UP DATE"), the parties shall cause JABO's
Accountants to make a revised calculation of the Net Current Assets and
Liabilities and the Westboy Member's Equity (the "ADJUSTED CLOSING STATEMENT").
Either party shall pay the other any amounts due as a result of the Adjusted
Closing Statement, within five (5) days of the receipt thereof. The Adjusted
Closing Statement shall serve to adjust and correct the Closing Statement. If
the parties are unable to agree on the Closing Statement or the Adjusted Closing
Statement, then any undisputed amounts shall be paid as provided herein and the
parties shall submit the dispute to Xxxxxx Xxxxxxxx (the "INDEPENDENT
ACCOUNTANTS") not later than ten (10) days after the receipt of the Closing
Statement or the Adjusted Closing Statement by the parties and the determination
of the Independent Accountants, which shall be made within a period of fifteen
(15) days after such submittal by the parties, shall be conclusive and there
shall be no further adjustments to the Closing Statement or the Adjusted Closing
Statement. The fees and expenses of the Independent Accountants shall be paid
equally by the Operating Partnership and the BMC Parties. For purposes of
clarification, the Net Current Assets and Liabilities Amount, the Accrued
Vacation Time and the Westboy Member's Equity shall be calculated on the
Adjusted Closing Statement by taking into account facts known at the time of the
preparation of the Adjusted Closing Statement, which had they been known at the
time that the Closing Statement was prepared, would have changed the carrying
amount of any underlying asset or liability reflected on the Closing Statement,
or otherwise required that an amount be reflected on the Closing Statement, all
to be calculated in accordance with GAAP consistently applied and accrued and
valued as of the Cutoff Time.
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9.4 HILTON CLAIMS. Notwithstanding anything to the contrary contained in
this Agreement, in the event that on or prior to the Wind Up Date Hilton asserts
any claim or claims against Westboy or Westboy asserts any claim or claims
(existing or otherwise) against Hilton (i) arising from or in connection with
the respective party's obligations under the existing management agreements
between Westboy and Hilton for the Westboy Properties, and (ii) relating (a)
only to the period prior to the Closing Date ("BMC HILTON CLAIMS") or (b) to
both the period prior to and after the Closing Date ("SHARED HILTON CLAIMS"),
then the parties agree, and shall cause their respective Affiliates, to
cooperate with each other to prosecute and defend such claims vigorously and to
take all steps reasonably necessary in connection therewith. The REIT shall have
sole control of the prosecution and defense of both the BMC Hilton Claims and
the Shared Hilton Claims, but shall keep BMC regularly informed with respect to
such prosecution or defense and consult with BMC on an ongoing basis with
respect thereto. Any BMC Hilton Claims or Shared Hilton Claims may only be
settled with the prior consent of both the Operating Partnership and BMC. The
costs and expenses of prosecuting and defending any BMC Hilton Claims and any
recovery or payment received or due thereon, shall be borne or retained in full
by BMC. The costs and expense of prosecuting and defending any Shared Hilton
Claims shall be funded by Westboy pending a final non-appealable judgment or
settlement of such claims. After the determination of a final non-appealable
judgment or settlement of any Shared Hilton Claim, the costs and expense of any
recovery or payment received due thereon shall be shared by BMC and the
Operating Partnership in proportion to their respective Interest in each such
Shared Hilton Claim (and the parties shall reimburse Westboy as and to the
extent required). All BMC Hilton Claims and Shared Hilton Claims and all amounts
recovered or paid thereof shall not be included in the determination of Westboy
Member's Equity.
ARTICLE 10
MISCELLANEOUS
10.1 BROKER. Each of the BMC Parties and the BLC Parties represent and
warrant to the other that it has not dealt with any broker in this transaction
and each agrees to hold harmless the other party and to indemnify the other
party from and against any and all damages, costs or expenses (including, but
not limited to, reasonable attorneys' fees and disbursements) suffered by the
indemnified party as a result of acts of the indemnifying party that would
constitute a breach of its representation and warranty in this Section.
10.2 FURTHER ASSURANCES. The BMC Parties and the BLC Parties agree, at any
time and from time to time after the Closing, to execute, acknowledge where
appropriate and deliver such further instruments and documents and to take such
other action as the other party may reasonably request in order to carry out the
intent and purpose of this Agreement, at the expense of the party making such
request, provided, however, that neither the BMC Parties nor the BLC Parties
shall, in connection with the foregoing, be obligated to incur any liabilities
or obligations in addition to their respective liabilities or obligations
otherwise contemplated in this Agreement.
10.3 PAYMENT OF EXPENSES. Each party will pay the expenses provided for in
this Agreement to be paid by it (including pursuant to Section 4.4 above) and
the fees and disbursements of its attorneys, accountants and other professionals
and experts incurred in connection with the negotiation of this Agreement and in
preparation for the Closing.
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10.4 NOTICES. All notices, demands, consents, requests or other
communications provided for or permitted to be given hereunder by a party hereto
must be in writing and shall be deemed to have been properly given or served (i)
if sent by facsimile upon electronic confirmation of receipt, (ii) if delivered
by registered or certified mail, postage prepaid, return receipt requested, upon
receipt, (iii) if delivered by a reputable national overnight air courier
service, prepaid and addressed to such party, upon receipt, or (iv) if not sent
by facsimile, deposited in the United States mail or delivered to a national
overnight air courier service as aforesaid, shall be deemed to be properly given
or served upon actual receipt (with rejection of delivery by addressee to
constitute receipt), as follows:
If to any of the BMC Parties:
c/x Xxxxxx Management Company
Limited Liability Company
Guildhall Building
00 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Fax No.: (000) 000-0000
with a copy sent simultaneously to BMC's attorneys:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
Fax No.: (000) 000-0000
If to the REIT:
Xxxxxx Lodging Company
Guildhall Building
00 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: President
Fax No.: (000) 000-0000
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with a copy sent simultaneously to the REIT's attorneys:
Xxxxxxxx Xxxx LLP
0000 Xxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
Fax No.: (000) 000-0000
and
Xxxxx & Xxxxxxxxx LLP
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
Any of the aforementioned parties may change its address for the receipt of
notices, demands, consents, requests and other communications by giving written
notice to the others in the manner provided for above.
10.5 ASSIGNMENT; BINDING EFFECT. None of the parties to this Agreement
shall have the right to assign, transfer, convey and/or otherwise sell (or enter
into any agreement to do the same), directly or indirectly, any interest it may
have in or under this Agreement without first having obtained the written
consent of the other parties, which consent may be withheld in such party's sole
and absolute discretion. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective legal
representatives, successors and permitted assigns, but shall not inure to the
benefit of, or be enforceable by any other Person.
10.6 WAIVER. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, and may be changed, waived, disregarded
or terminated only by an instrument in writing signed by the party against whom
the enforcement of the change, waiver, discharge or termination is sought or, in
the case of a default, by the non-defaulting party or parties.
10.7 INCORPORATION OF RECITALS AND SCHEDULES. The Recitals to this
Agreement and the Exhibits and Schedules attached hereto are hereby incorporated
by reference into the body of this Agreement and made a part hereof.
10.8 CONFIDENTIALITY; PRESS RELEASES. The BLC Parties and the BMC Parties
agree that they will not disclose the contents of this Agreement to any third
parties or issue any press release with respect thereto or any Closing hereunder
without the consent of the other parties, except (i) as may be required or,
based on the advice of counsel, advisable to ensure compliance with any
applicable laws, rules or regulations of any Governmental Authority having
jurisdiction over such party, (ii) as is expressly authorized or required by the
terms of this Agreement (e.g., in connection with soliciting or obtaining any
required third-party consents or approvals), or (iii) if and to the extent such
contents have already been placed in the public domain (other than by
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the party seeking to disclose and in a manner not permitted by this Section
10.8). Nothing contained in this Section 10.8 shall be construed as prohibiting
(x) the BMC Parties from disclosing the contents of this Agreement (A) on a
confidential basis to the BMC Parties' counsel, accountants, consultants,
property managers and other agents, or (B) (if necessary or appropriate in BMC's
reasonable judgment) to regulatory authorities having jurisdiction over the BMC
Parties (which authorities, by law, may not be bound by any confidentiality
restrictions), or (C) to parties from which the BMC Parties are seeking
financing, or (y) the BLC Parties from disclosing the contents of this Agreement
(A) on a confidential basis to its counsel, accountants, consultants, property
managers and other agents, or (B) (if necessary or appropriate in the reasonable
judgment of the BLC Parties) to regulatory authorities having jurisdiction over
the BLC Parties (which authorities, by law, may not be bound by any
confidentiality restrictions), or (C) to parties from which it seeks financing.
The BMC Parties and the BLC Parties each agree (I) to consult with and cooperate
with the other parties on the content and timing of all press releases and other
public announcements relating to the transactions contemplated by this
Agreement, and (II) that the initial press release to be issued with respect to
the transactions contemplated by this Agreement will be in the form agreed to by
the parties hereto prior to the execution of this Agreement.
10.9 MERGER. All understandings and agreements heretofore had between the
parties hereto are merged in this Agreement and the instruments and documents
referred to herein, which fully and completely express their agreements with
respect to the transactions contemplated herein, and supersede all prior
agreements, written or oral, with respect thereto.
10.10 GOVERNING LAW. THE PARTIES HERETO AGREE THAT THIS AGREEMENT SHALL IN
ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF OHIO.
10.11 JURISDICTION. Each of the BMC Parties and the BLC Parties hereby
irrevocably and unconditionally submits to the jurisdiction of any Ohio State
Court or Federal Court of the United States of America sitting in the City of
Cleveland, and any appellate court from any such court, in any suit, action or
proceeding arising out of or relating to this Agreement, or for recognition or
enforcement of any judgment, and each hereby irrevocably and unconditionally
agrees that all claims in respect of any such suit, action or proceeding shall
be brought in and may be heard and determined in such Ohio State Court or, to
the extent permitted by law, in such Federal Court. Each of BMC and the BLC
Parties agrees that a final judgment in any such suit, action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Each of the BMC Parties and the
BLC Parties hereby irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement in any Ohio State Court or Federal Court
sitting in the City of Cleveland. Each of the BMC Parties and the BLC Parties
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such suit, action or proceeding
in any such court. Nothing contained in this Section 10.11 shall be construed as
preventing any of the BMC Parties and the BLC Parties, or any of their
respective Affiliates, from (i) objecting to the jurisdiction of any Ohio State
Court on the ground that the matter involved exceeds the statutory jurisdiction
of such court, or
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(ii) from seeking to remove any suit, action or proceeding from an Ohio State
Court to a Federal Court sitting in the City of Cleveland, or vice versa.
10.12 CAPTIONS. The captions and Article headings included in this
Agreement and the table of contents are for convenience only, do not constitute
part of this Agreement and shall not be considered or referred to in
interpreting the provisions of this Agreement.
10.13 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument. The submission of a signature page
transmitted by facsimile (or similar electronic transmission facility) shall be
considered as an original signature page for purposes of this Agreement so long
as the original signature page is thereafter transmitted by mail or by other
delivery service and the original signature page is substituted for the
facsimile signature page in the original and duplicate originals of this
Agreement.
10.14 SEVERABILITY. If any provision hereof is held invalid or not
enforceable to its fullest extent, such provision shall be enforced to the
extent permitted by law, and the validity of the remaining provisions hereof
shall not be affected thereby.
10.15 NO RECORDATION. The BMC Parties and the BLC Parties agree that
neither this Agreement nor any memorandum or notice hereof shall be recorded and
the BLC Parties agreed (a) not to file any notice of pendency or other
instrument (other than a judgment or lis pendens filed by the BLC Parties in
connection with the BLC Parties' enforcement of its rights hereunder) against
any of the Properties or any portion thereof in connection herewith, and (b) to
indemnify the BMC Parties against all costs, expenses and damages, including,
without limitation, reasonable attorneys' fees and disbursements, incurred by
the BMC Parties by reason of the filing by the BLC Parties of such notice of
pendency or other instrument.
10.16 WAIVER OF TRIAL BY JURY. THE BMC PARTIES AND THE BLC PARTIES HEREBY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM FILED BY THE BMC PARTIES OR THE BLC PARTIES,
WHETHER IN CONTRACT, TORT OR OTHERWISE, WHICH RIGHT OR CLAIM RELATES DIRECTLY OR
INDIRECTLY TO THIS AGREEMENT, ANY DOCUMENTATION RELATED THERETO, OR ANY ACTS OR
OMISSIONS IN CONNECTION WITH THIS AGREEMENT. THIS WAIVER HAS BEEN AGREED TO
AFTER CONSULTATION WITH LEGAL COUNSEL SELECTED BY THE BLC PARTIES AND THE BMC
PARTIES.
10.17 SURVIVAL. The provisions of this Agreement survive the Closing,
except to the extent set forth otherwise herein.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-39-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BMC:
XXXXXX MANAGEMENT COMPANY LIMITED
LIABILITY COMPANY
By: /S/ Xxxx X. Xxxxxx
------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
JABO:
JABO LLC
By: Xxxxxx Management Company Limited
Liability Company,
its Managing Member
By: /S/ Xxxx X. Xxxxxx
------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
OPERATING PARTNERSHIP:
XXXXXX HOTEL PROPERTIES, L.P.
By: Xxxxxx Lodging Company,
its General Partner
By: /S/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: President
REIT:
XXXXXX LODGING COMPANY
By: /S/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: President
EXHIBIT A
LESSEES AND LESSEE PROPERTIES
[see attachment]
LESSEE PROPERTY
Berkeley Leasing I LLC Berkeley Marina Radisson
000 Xxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Buffalo Leasing LLC Buffalo Marriott
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Cleveland Leasing LLC Cleveland Airport Marriott
0000 Xxxx 000xx Xxxxxx
Xxxxxxxxx, XX 00000
Columbus Leasing LLC Columbus Marriott
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Xxxxxxxx Leasing LLC Holiday Inn Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
French Lick Leasing LLC French Lick Springs Resort
0000 Xxxx Xxxxx Xxxx 00
Xxxxxx Xxxx, XX 00000
Fort Xxxxx Leasing LLC Fort Xxxxx Radisson
00000 Xxxxxxxxx Xxxx
Xx. Xxxxx, XX 00000
Highpoint Leasing LLC Radisson Hotel High Point
000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Knoxville Leasing LLC Knoxville Hilton
000 Xxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Lake Xxxxxx I Leasing LLC Lake Xxxxxx Xxxxxxx Inn
00000 Xxxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Lake Xxxxxx XX Leasing LLC Lake Xxxxxx Holiday Inn
00000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Melbourne H Leasing LLC Melbourne Beach Hilton
0000 Xxxxx Xxxxxxx X0X
Xxxxxxxxx, XX 00000
Melbourne Q Leasing LLC Melbourne Quality Suites
0000 Xxxxx Xxxx X0X Xxxxx
Xxxxxxxxx, XX 00000
San Antonio Leasing LLC San Antonio Doubletree
00 Xxxxxxxxx Xxxx 000
Xxx Xxxxxxx, XX 00000
Southfield Leasing LLC Southfield Embassy Suites
00000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
EXHIBIT B
WESTBOY PROPERTIES
[see attachment]
Doubletree Hotel Bellevue Center
000-000xx Xxxxxx XX
Xxxxxxxx, Xxxxxxxxxx
Doubletree Hotel Riverside
29th & Chinden Blvd.
Boise, Idaho
Doubletree Hotel Colorado Springs - World Arena
0000 X. Xxxxxxxx Xxxxxxxx Xxxx.
Xxxxxxxx Xxxxxxx, Xxxxxxxx
Doubletree Hotel Omaha Downtown
0000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx
Doubletree Hotel Portland Downtown
000 XX Xxxxxxx
Xxxxxxxx, Xxxxxx
Doubletree Hotel Sacramento
0000 Xxxxx Xxxx Xxx
Xxxxxxxxxx, Xxxxxxxxxx
Doubletree Hotel Spokane Valley
I-90 at Xxxxxxxx Road
Spokane, Washington
Doubletree Hotel Xxxxxx/Springfield
0000 Xxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxx
Doubletree Hotel Yakima Valley
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx
Doubletree Hotel Xxxxx Center
0000 X.X. Xxxxxxxxx
Xxxxxxxx, Xxxxxx
EXHIBIT H
INTERESTS ASSIGNMENT AND ASSUMPTION AGREEMENT
[see attachment]
ASSIGNMENT OF LIMITED LIABILITY COMPANY INTERESTS
This Assignment of Limited Liability Company Interests, dated as of
December 31, 2001 (the "ASSIGNMENT"), is entered into by and between JABO LLC, a
Delaware limited liability company (the "ASSIGNOR"), and Xxxxxx Hotel
Properties, L.P., an Ohio limited partnership, as assignee (the "ASSIGNEE").
WITNESSETH:
WHEREAS, the Assignor holds the limited liability company interests (each,
an "INTEREST" and, collectively, the "INTERESTS") in the limited liability
companies organized under the laws of the State of Delaware identified on
SCHEDULE 1 (the "COMPANIES");
WHEREAS, pursuant to that certain Master Contribution Agreement, dated as
of December 31, 2001 (the "MASTER CONTRIBUTION AGREEMENT"), by and among the
Assignor, the Assignee, Xxxxxx Management Company Limited Liability Company, and
Xxxxxx Lodging Company, the Assignor has agreed to sell, transfer, assign and
deliver all of its right, title and interest in and to the Interests identified
on SCHEDULE 1 to the Assignee.
NOW, THEREFORE, in consideration of the premises, covenants and agreements
contained herein and in the Master Contribution Agreement, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the undersigned hereby agree as follows:
1. ASSIGNMENT AND ASSUMPTION. The Assignor hereby assigns, transfers and
conveys to the Assignee the Interests identified on SCHEDULE 1, and the Assignee
hereby agrees to assume and accept all such Interests and all of the duties and
responsibilities related thereto accruing from and after the date hereof.
2. INDEMNIFICATION. The Assignee shall indemnify, protect, defend, and hold
the Assignors harmless from and against any and all claims, causes of action,
demands, obligations, losses, damages, liabilities, judgments, costs and
expenses (including, without limitation, reasonable attorneys' fees, charges and
disbursements) relating to or arising in respect of the Interests and/or the
Companies accruing from and after the date hereof, other than claims for which
the Assignee is entitled to express indemnification pursuant to the terms of the
Master Contribution Agreement.
3. ADMISSION. Each of the signatories hereto acknowledges and agrees that
contemporaneously with the assignments described in paragraph 1 hereof, the
Assignee shall be admitted to each of the Companies as a substitute member.
4. WITHDRAWAL. Effective upon the admission of the Assignee to each of the
Companies, the Assignor hereby withdraws from each of the Companies as a member.
5. CONTINUATION OF THE COMPANIES. The parties hereto agree that the
assignment of the Interests, the admission of the Assignee to the Companies and
the withdrawal of the Assignor from the Companies shall not dissolve the
Companies, and that the business of the Companies shall continue.
6. BOOKS AND RECORDS. The Assignee agrees to cause the Companies to take
all actions necessary under the limited liability company laws of the State of
Delaware and the Companies' limited liability agreement, including causing the
amendment of the Company's limited liability agreement and certificate of
formation, to evidence the admission of the Assignee to the Companies and the
withdrawal of the Assignor from the Companies.
7. FUTURE COOPERATION. Each of the parties hereto agrees to cooperate at
all times from and after the date hereof with respect to all of the matters
described herein, and to execute such further assignments, releases,
assumptions, amendments of the Agreement, notifications, and other documents as
may be reasonably requested for the purpose of giving effect to, or evidencing
or giving notice of, the assignments contemplated by this Assignment.
8. BINDING EFFECT. This Assignment shall be binding upon, and shall inure
to the benefit of, the parties hereto and their respective permitted successors
and assigns.
9. EXECUTION IN COUNTERPARTS. This Assignment may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
10. GOVERNING LAW. This Assignment shall be governed by, and interpreted in
accordance with, the laws of the State of Delaware.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be
duly executed as of the day and year first above written.
ASSIGNOR:
JABO LLC
By: Xxxxxx Management Company Limited
Liability Company,
its Managing Member
By: /S/ Xxxx X. Xxxxxx
------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
ASSIGNEE:
Xxxxxx Hotel Properties, L.P.
By: /S/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: President
SCHEDULE 1
CONTRIBUTED INTERESTS:
PERCENTAGE INTEREST LESSEE PROPERTY OWNED BY LESSEE
IN LESSEE
100% Berkeley Leasing I LLC Berkeley Marina Radisson
000 Xxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
100% Buffalo Leasing LLC Buffalo Marriott
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
100% Cleveland Leasing LLC Cleveland Airport Marriott
0000 Xxxx 000xx Xxxxxx
Xxxxxxxxx, XX 00000
100% Columbus Leasing LLC Columbus Marriott
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
100% Xxxxxxxx Leasing LLC Holiday Inn Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
100% French Lick Leasing LLC French Lick Springs Resort
0000 Xxxx Xxxxx Xxxx 00
Xxxxxx Xxxx, XX 00000
100% Fort Xxxxx Leasing LLC Fort Xxxxx Radisson
00000 Xxxxxxxxx Xxxx
Xx. Xxxxx, XX 00000
100% Highpoint Leasing LLC Radisson Hotel High Point
000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxxx, XX 00000
100% Knoxville Leasing LLC Knoxville Hilton
000 Xxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
100% Lake Xxxxxx I Leasing LLC Lake Xxxxxx Xxxxxxx Inn
00000 Xxxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
100% Lake Xxxxxx XX Leasing LLC Lake Xxxxxx Holiday Inn
00000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
100% Melbourne H Leasing LLC Melbourne Beach Hilton
0000 Xxxxx Xxxxxxx X0X
Xxxxxxxxx, XX 00000
100% Melbourne Q Leasing LLC Melbourne Quality Suites
0000 Xxxxx Xxxx X0X Xxxxx
Xxxxxxxxx, XX 00000
100% San Antonio Leasing LLC San Antonio Doubletree
00 Xxxxxxxxx Xxxx 000
Xxx Xxxxxxx, XX 00000
100% Southfield Leasing LLC Southfield Embassy Suites
00000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
For transfer of interests in limited liability companies
EXHIBIT I
WESTBOY INTERESTS ASSIGNMENT AND ASSUMPTION AGREEMENT
[see attachment]
-1-
ASSIGNMENT OF LIMITED LIABILITY COMPANY INTERESTS
This Assignment of Limited Liability Company Interests, dated as of January
1, 2002 (the "ASSIGNMENT"), is entered into by and between JABO LLC, a Delaware
limited liability company (the "ASSIGNOR"), and Xxxxxx Hotel Properties, L.P.,
an Ohio limited partnership, as assignee (the "ASSIGNEE").
WITNESSETH:
WHEREAS, the Assignor holds all the membership interests (the "INTERESTS")
in Westboy LLC, a limited liability company organized under the laws of the
State of Delaware ("WESTBOY"), which is the owner of the leasehold interests in
the hotel properties identified on SCHEDULE 1 (the "PROPERTIES");
WHEREAS, pursuant to that certain Master Contribution Agreement, dated as
of December 31, 2001 (the "MASTER CONTRIBUTION AGREEMENT"), by and among the
Assignor, the Assignee, Xxxxxx Management Company Limited Liability Company, and
Xxxxxx Lodging Company, the Assignor has agreed to sell, transfer, assign and
deliver all of its right, title and interest in and to the Interests to the
Assignee.
NOW, THEREFORE, in consideration of the premises, covenants and agreements
contained herein and in the Master Contribution Agreement, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the undersigned hereby agree as follows:
1. ASSIGNMENT AND ASSUMPTION. The Assignor hereby assigns, transfers and
conveys to the Assignee the Interests identified on Schedule 1, and the Assignee
hereby agrees to assume and accept all such Interests. The Assignee agrees to be
bound by the terms and conditions of the Amended and Restated Limited Liability
Company Agreement of Westboy, dated as of May 22, 1998 (the "WESTBOY
AGREEMENT").
2. REPRESENTATIONS AND WARRANTIES. The Assignor hereby represents and
warrants to the Assignee that the assignment of the Interests is made in
accordance with the Westboy Agreement and all applicable laws and regulations.
3. INDEMNIFICATION. The Assignee shall indemnify, protect, defend, and hold
each of the Assignors harmless from and against any and all claims, causes of
action, demands, obligations, losses, damages, liabilities, judgments, costs and
expenses (including, without limitation, reasonable attorneys' fees, charges and
disbursements) relating to or arising in respect of the Interests and Westboy
accruing from and after the date hereof, other than claims for which the
Assignee is entitled to express indemnification pursuant to the terms of the
Master Contribution Agreement.
4. ADMISSION. Each of the signatories hereto acknowledges and agrees that
contemporaneously with the assignments described in paragraph 1 hereof, the
Assignee shall be admitted to Westboy as a substitute member.
5. WITHDRAWAL. Effective upon the admission of the Assignee to Westboy, the
Assignor hereby withdraws from Westboy as a member.
6. CONTINUATION OF WESTBOY. The parties hereto agree that the assignment of
the Interests, the admission of the Assignee to Westboy, and the withdrawal of
the Assignor from Westboy shall not dissolve Westboy, and that the business of
Westboy shall continue.
7. BOOKS AND RECORDS. The Assignee agrees to cause Westboy to take all
actions necessary under the limited liability company laws of the State of
Delaware and Westboy's limited liability agreement, including causing the
amendment of Westboy's limited liability agreement and certificate of formation,
to evidence the admission of the Assignee to Westboy and the withdrawal of the
Assignor from Westboy.
8. FUTURE COOPERATION. Each of the parties hereto agrees to cooperate at
all times from and after the date hereof with respect to all of the matters
described herein, and to execute such further assignments, releases,
assumptions, amendments of the Agreement, notifications, and other documents as
may be reasonably requested for the purpose of giving effect to, or evidencing
or giving notice of, the assignments contemplated by this Assignment.
9. BINDING EFFECT. This Assignment shall be binding upon, and shall inure
to the benefit of, the parties hereto and their respective permitted successors
and assigns.
10. EXECUTION IN COUNTERPARTS. This Assignment may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
11. GOVERNING LAW. This Assignment shall be governed by, and interpreted in
accordance with, the laws of the State of Delaware.
12. NOTICES. All notices, demands, consents, requests or other
communications provided for or permitted to be given hereunder by a party hereto
must be in writing and shall be deemed to have been properly given or served (i)
if sent by facsimile upon electronic confirmation of receipt, (ii) if delivered
by registered or certified mail, postage prepaid, return receipt requested, upon
receipt, (iii) if delivered by a reputable national overnight air courier
service, prepaid and addressed to such party, upon receipt, or (iv) if not sent
by facsimile, deposited in the United States mail or delivered to a national
overnight air courier service as aforesaid, shall be deemed to be properly given
or received or served upon actual receipt (with rejection of delivery by
addressee to constitute receipt), as follows:
If to Assignor:
JABO LLC
Guildhall Building
00 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Fax No.: (000) 000-0000
If to Assignee:
Xxxxxx Hotel Properties, L.P.
c/x Xxxxxx Lodging Company
Guildhall Building
00 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Fax No.: (000) 000-0000
Any of the aforementioned parties may change its address for the receipt of
notices, demands, consents, requests or other communications by giving written
notice to the others in the manner provided above.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be
duly executed as of the day and year first above written.
ASSIGNOR:
JABO LLC
By: Xxxxxx Management Company Limited
Liability Company,
its Managing Member
By: /s/ Xxxx X. Xxxxxx
------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
ASSIGNEE:
Xxxxxx Hotel Properties, L.P.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: President
SCHEDULE 1
WESTBOY PROPERTIES
Doubletree Hotel Bellevue Center
000-000xx Xxxxxx XX
Xxxxxxxx, Xxxxxxxxxx
Doubletree Hotel Riverside
29th & Chinden Blvd.
Boise, Idaho
Doubletree Hotel Colorado Springs - World Arena
0000 X. Xxxxxxxx Xxxxxxxx Xxxx.
Xxxxxxxx Xxxxxxx, Xxxxxxxx
Doubletree Hotel Omaha Downtown
0000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx
Doubletree Hotel Portland Downtown
000 XX Xxxxxxx
Xxxxxxxx, Xxxxxx
Doubletree Hotel Sacramento
0000 Xxxxx Xxxx Xxx
Xxxxxxxxxx, Xxxxxxxxxx
Doubletree Hotel Spokane Valley
I-90 at Xxxxxxxx Road
Spokane, Washington
Doubletree Hotel Xxxxxx/Springfield
0000 Xxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxx
Doubletree Hotel Yakima Valley
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx
Doubletree Hotel Xxxxx Center
0000 X.X. Xxxxxxxxx
Xxxxxxxx, Xxxxxx
