AGREEMENT
This Agreement (the "Agreement"), dated as of January 15, 2003, is
made and entered into by and among Presidio Capital Investment Company, LLC, a
Delaware limited liability company ("PCIC"), certain subsidiaries of PCIC listed
on the signature pages hereto (the "PCIC Subsidiaries"), NorthStar Capital
Investment Corp., a Maryland corporation ("NCIC"), Shelbourne Management LLC, a
Delaware limited liability company ("Management Company"), Shelbourne Properties
I, Inc., a Delaware corporation ("Shelbourne I"), Shelbourne Properties II,
Inc., a Delaware corporation ("Shelbourne II"), and Shelbourne Properties III,
Inc., a Delaware corporation ("Shelbourne III" and, together with Shelbourne I
and Shelbourne II, the "Companies" and individually, a "Company"), Shelbourne
Properties I, L.P., a Delaware limited partnership ("Shelbourne I OP"),
Shelbourne Properties II, L.P., a Delaware limited partnership ("Shelbourne II
OP"), Shelbourne Properties III, L.P., a Delaware limited partnership
("Shelbourne III OP", and, together with Shelbourne I OP and Shelbourne II OP,
the "OPs" and, individually, an "OP") and HX Investors, L.P., a Delaware limited
partnership ("HX").
W I T N E S S E T H
WHEREAS, the OPs intend to form a new Delaware limited liability
company that will be owned 32.51% by Shelbourne I OP, 40.60% by Shelbourne II OP
and 26.89% by Shelbourne III OP (the "JV");
WHEREAS, the OPs, through the JV, intend to acquire one hundred
percent (100%) of the ownership interests in Accotel Equity Investors, LLC
("Accotel Equity"), the sole member of Accotel Property Investors LLC ("Accotel
Property"), the owner of certain triple net-leased properties (the "ACCOR
Property"), subject to certain existing mortgage indebtedness related to the
ACCOR Property in the current principal amount of approximately $74,221,000 (the
"ACCOR Indebtedness"), pursuant to the documents identified on the closing
checklist attached as Exhibit A-1 hereto (the "ACCOR Checklist," and the
transaction, the "ACCOR Transaction");
WHEREAS, Management Company is the holder of all of the issued and
outstanding preferred partnership units in each OP designated as "5% Class A
Preferred Partnership Units", $1,000 liquidation preference per unit" (the
"Preferred Units"), and the OPs and Management Company desire to redesignate the
Preferred Units as "5% Class A Preferred Partnership Units" (no liquidation
preference) (the "Class A Units") and provide for the terms of such redesignated
units, effective upon the closing of the ACCOR Transaction;
WHEREAS, the parties hereto are parties to a Purchase and
Contribution Agreement, dated February 14, 2002 (the "Contribution Agreement"),
and desire to terminate the effectiveness of certain provisions of the
Contribution Agreement and, in lieu thereof, enter into certain agreements
relating to the Class A Units, effective upon the closing of the ACCOR
Transaction;
WHEREAS, each OP, on the one hand, and each Company and the General
Partner of such OP, on the other hand, are parties to an advisory agreement,
dated as of April 17, 2001 (each, an "Advisory Agreement" and collectively, the
"Advisory Agreements"), and desire to amend the Advisory Agreements, in certain
respects, effective upon closing of the ACCOR Transaction;
WHEREAS, Management Company, PCIC, the Companies and HX, among
others, are parties to a Settlement Agreement and Mutual Release, dated July 1,
2002 (as hereinafter amended, the "Settlement Agreement"), and desire to amend
certain provisions of the Settlement Agreement, effective upon the closing of
the ACCOR Transaction; and
WHEREAS, this Agreement shall become effective upon the closing of
the ACCOR Transaction.
NOW, THEREFORE, in consideration of the foregoing, and the mutual
agreements herein contained, the parties agree as follows:
1. The JV and the ACCOR Transaction.
(a) Prior to the closing of the ACCOR Transaction, (i) the OPs shall
form the JV and shall appoint Management Company as the manager (in its capacity
as manager of the JV, the "Manager") of the JV, and the Companies as the special
manager of the JV (in their capacity as special manager of the JV, the "Special
Manager") with the power and authority described in Section 5(b), and (ii) the
JV shall enter into the option agreement with Accotel Remainder Equity LLC
("Remainder") attached hereto as Exhibit A-2, and the agreement with Remainder
attached hereto as Exhibit A-3. Each OP hereby appoints the Manager as its
attorney-in-fact, which shall be coupled with an interest, to take all actions
on behalf of and in the name of the JV subject to the terms of this Agreement.
Neither the Manager nor the Special Manager shall have any profits or capital
interest in or receive any distributions or any allocations of taxable income or
loss by the JV. The certificate of formation and limited liability company
agreement of the JV shall be in the forms attached hereto as Exhibits B-1 and
B-2.
(b) The OPs represent, warrant and covenant that, upon the closing
of the ACCOR Transaction, (i) the ACCOR Indebtedness shall be a non-recourse
obligation of Accotel Property (except as provided in the documents identified
in the ACCOR Checklist) in the principal amount of approximately $74,221,000 and
collateralized by first mortgage liens on the ACCOR Property, (ii) the cash
purchase price payable for the ACCOR Transaction shall be $2,700,000 and the
ACCOR Transaction shall be closed on terms that are consistent in all material
respects with terms specified in the form of the documents identified on the
ACCOR Checklist that were delivered to Management Company on or before the date
of this Agreement, except for changes made at the request of Management Company,
and the form of the purchase agreement that is attached hereto as Exhibit C,
(iii) the foreclosure guarantee (in the form attached hereto as Exhibit D) shall
have been delivered to and accepted by the ACCOR Indebtedness lender, and (iv)
the JV shall be treated as a partnership for United States federal income tax
purposes and Accotel Equity and Accotel Property shall each be treated as a
disregarded entity for United States federal income tax purposes.
2. Preferred Units. Upon the effectiveness of this Agreement, the
Preferred Units in each OP shall be redesignated as Class A Units and shall have
the terms set forth in the Amended and Restated Partnership Unit Designation for
each OP (each, an "Amended Designation") attached hereto as Exhibits E-1, E-2,
and E-3.
2
3. Contribution Agreement. Upon the effectiveness of this Agreement,
Sections 5.3 and 5.5 of the Contribution Agreement shall be terminated and no
party to the Contribution Agreement shall thereupon have any rights or
obligations under said Sections.
4. Certain Agreements with Respect to the Class A Units.
(a) Subject to Section 4(c) hereof, if, and only if, a "Put Event"
(as hereinafter defined) shall have occurred, then in lieu of any liability for
damages, each OP shall reacquire the Class A Units issued by such OP at a price
equal to the sum of (i) the Applicable Amount (which for Shelbourne I OP shall
mean $812,674, for Shelbourne II OP shall mean $1,015,148 and for Shelbourne III
OP shall mean $672,178), (ii) any accrued and unpaid distributions on the Class
A Units through the date of reacquisition and (iii) the additional amount
indicated opposite such OP's name on Exhibit F hereto. The amount so required to
be paid under the immediately preceding sentence (the "Reacquisition Price")
shall be payable by each OP, in cash, within fifteen business days following
receipt of written notice from Management Company that a Put Event has occurred.
(b) A "Put Event" shall mean the first occurrence (if any) prior to
the Complete Redemption (as hereinafter defined), of:
(i) subject to Section 9(a) hereof, amendment, termination,
distribution, transfer or other disposition of an Advisory Agreement
or any rights therein by a Company or by an OP while any Class A
Units are outstanding; provided, that, with five business days'
prior written notice to Management Company, the Companies and the
OPs may amend the Advisory Agreements if the Companies deliver to
Management Company at the time of such notice an opinion of counsel
upon which Management Company is expressly permitted to rely from a
nationally recognized law firm that such amendment, by itself, would
not be treated as a disposition or distribution of such Advisory
Agreements for United States federal income tax purposes;
(ii) the making of any election by any of the OPs to treat the
JV, Accotel Equity or Accotel Property as a corporation for United
States federal income tax purposes;
(iii) the issuing of any guarantee with respect to the
Restricted Indebtedness (as hereinafter defined) or any indemnity to
the JV, Accotel Equity, Accotel Property, or any obligee of the
Restricted Indebtedness, by any Company, any OP, any partner of any
OP (other than Management Company, PCIC or any New Partner admitted
pursuant to Section 9(d) hereof or any related person within the
meaning of Treasury Regulation Section 1.752-4(b)), or any related
person to such partner within the meaning of Treasury Regulation
Section 1.752-4(b), other than the "U.S. Realty Guarantee" and the
"Companies Guarantee" (each as hereinafter defined), any other
guarantee or indemnity identified on the ACCOR Checklist, and any
guarantee or indemnity made concurrently with a sale or transfer
pursuant to Sections 5(a), 5(b) or 5(d) hereof or upon exercise of
rights under the agreements attached as Exhibits A-2 and A-3,
respectively, in substitution for the U.S. Realty Guarantee, the
Companies Guarantee or any of the other documents identified in the
ACCOR Checklist;
3
(iv) the failure of an OP, by not later than October 29, 2004,
to (a) complete the Complete Redemption, (b) repay, discharge or
cause such OP and its subsidiaries to be released from all
indebtedness of such OP and its subsidiaries (other than the
Restricted Indebtedness), and (c) cause all liabilities of such OP
and its subsidiaries (other than liabilities relating to the
Excluded Properties (as hereinafter defined)) to be assumed by a
liquidating trust that acquires all of the assets of such OP (other
than the Excluded Properties and the Advisory Agreement);
(v) except as required by Section 5(a) hereof or permitted by
Section 5(b) hereof, the taking by an OP or the Special Manager of
any affirmative voluntary action with respect to the JV, Accotel
Equity, Accotel Property or the Restricted Assets or the Restricted
Indebtedness without the prior written approval of the Management
Company;
(vi) the failure by the OPs to make the payment provided in
Section 5(c) hereof;
(vii) a voluntary filing by any OP or the Special Manager of
any case, action or proceeding under any bankruptcy, insolvency or
similar law, or the collusive filing by any Company or any affiliate
thereof of a bankruptcy, insolvency or similar action or proceeding
against any OP, the JV, Accotel Equity or Accotel Property; and
(viii) a breach by any OP or any Company of its
representations, warranties, obligations or covenants in Sections 1,
4(d), 4(e), 4(f), 5(b), 6(b), 9(a) or 9(d) hereof and with respect
to a breach by any OP or any Company of its obligations pursuant to
Sections 4(f) or 9(d), such breach is not cured within 30 days after
delivery of written notice thereof.
The Companies hereby guaranty the payment and performance of the obligations of
the OPs pursuant this Section.
(c) Notwithstanding anything to the contrary herein, no OP shall
have any obligations whatsoever under Section 4(a) hereof from and after the
first occurrence (if any) of a breach by the Manager of covenants in Sections
6(c)(iv) or 6(c)(vii) hereof if such breach is not cured within 30 days after
delivery of written notice thereof.
(d) The Companies and the OPs shall cause the Amended and Restated
Limited Partnership Agreement of each OP to be amended to provide that any
income or deductions attributable to (i) the ACCOR Property, for the period that
it is a Restricted Asset, and (ii) from and after the closing of the New
Transaction and the acquisition of the New Property subject to the New
Indebtedness, the New Property, will be allocated to Management Company for each
calendar year for which Management Company shall have delivered a notice to each
OP electing such allocation, it being agreed that such allocation shall not be
made unless such notice shall be delivered to each OP prior to December 31 of
such calendar year.
4
(e) The Companies and the OPs shall cause the Amended and Restated
Limited Partnership Agreement of each of the OPs to be amended to specify that,
to the extent permitted by Treasury Regulation Section 1. 752-3(a)(3), any
excess nonrecourse liabilities attributable to (i) the ACCOR Property for the
period that it is a Restricted Asset, and (ii) from and after the closing of the
New Transaction and the acquisition of the New Property subject to the New
Indebtedness, the New Property, shall be allocated by the OPs to Management
Company.
(f) The OPs shall distribute all cash flow and proceeds from the New
Property distributed to it by the JV, to the holders of the Class A Units.
(g) As used in this Agreement: "Restricted Assets" shall mean, until
the Complete Redemption by the OPs, (i) the ACCOR Property, until the JV's
transfer of its membership interests in Accotel Equity pursuant to Sections 5(a)
or 5(b) hereof, and (ii) the New Property, from and after the closing of the New
Transaction. As used in this Agreement: "Restricted Indebtedness" shall mean (i)
the ACCOR Indebtedness, during the period described in clause (i) of the
definition of "Restricted Assets" and (ii) the New Indebtedness, during the
period described in clause (ii) of the definition of "Restricted Assets."
5. New Acquisition Right. (a) Prior to the Complete Redemption by each OP,
the Manager shall have the right, power and authority (the "New Acquisition
Right"), exercisable by delivery of written notice to the Special Manager on or
before July 28, 2004 (each, a "New Acquisition Notice"), to cause the JV to
acquire the real property, personal property or other property designated by
Management Company in the New Acquisition Notice (the "New Property"), to incur
indebtedness with respect thereto that is designated in the New Acquisition
Notice (the "New Indebtedness"), and, subject to Section 5(c) below, to require
the OPs to expend the Maximum Amount in respect thereof (the "New Transaction"),
on or before the closing date specified by the Manager in the New Acquisition
Notice, provided that no OP shall be required to expend any funds until the
earlier of (x) the date that is four (4) months after the date of delivery of
the New Acquisition Notice, if delivered on or before June 28, 2004, and
otherwise three (3) months after the date of delivery of the New Acquisition
Notice, and (y) the date of the closing of the sale to a third party of the
membership interests in Accotel Equity pursuant to Section 5(b) hereof, and the
OPs shall take such actions.
In addition, prior to the Complete Redemption by each OP, the Manager
shall have the right (the "Put Right"), exercisable by delivery of written
notice to the Special Manager on or before the Complete Redemption (the "ACCOR
Put Notice"), to require that the OPs (or their designees) acquire for no cash
consideration, the membership interests in Accotel Equity, and the OPs (or their
designees) shall acquire such equity interests, within ten (10) business days
after the ACCOR Indebtedness lender has consented to such acquisition (if
consent is required) and otherwise within thirty (30) days after the Manager's
delivery of written notice. Following the receipt of the ACCOR Put Notice, the
OPs shall use commercially reasonable efforts to obtain the consent of the ACCOR
Indebtedness lender to transfer the membership interests in Accotel Equity to
the OPs or their designees, provided that neither the OPs (nor their designees)
nor the Special Manager shall have any obligation to pay any lender consent or
transfer fees in order to obtain the ACCOR Indebtedness lender's consent,
provided, further, that such acquisition shall
5
not be consummated unless the "NorthStar Guarantee" (as hereinafter defined)
expires by its terms or is terminated concurrently with such acquisition (except
as to any obligation or liability arising thereunder for prior periods). If such
acquisition does not occur within the aforesaid period solely as a result of a
willful failure by the OPs (or their designees) to sign a guarantee in
substantially the same form as the NorthStar Guarantee in favor of the makers
(collectively, the "U.S. Realty Guarantors") of those certain guarantees in
favor of the ACCOR Indebtedness lender annexed hereto as Exhibit G-1
(collectively, the "U.S. Realty Guarantee"), then (x) such failure shall not
constitute a "Put Event" under Section 4(b) hereof, (y) the Manager shall have
the right in its sole and absolute discretion to cause the JV to sell and
transfer the membership interests in Accotel Equity to any person or entity
designated by the Management Company without the consent or approval of any
other party to this Agreement, and (z) the Special Manager shall have no right
to sell or transfer the membership interests in Accotel Equity. A sale or
transfer of the membership interests in Accotel Equity pursuant to this Section
5(a) shall not relieve the OPs of their obligation to expend funds on account of
a New Transaction in accordance with and subject to the provisions of this
Section 5(a). The "NorthStar Guarantee" shall mean the guarantee delivered by
NorthStar Partnership, L.P. ("NorthStar"), PCIC and NCIC to the U.S. Realty
Guarantors in the form attached as Exhibit G-2.
Notwithstanding the foregoing: (1) the Manager shall not be entitled
either to cause the OPs to expend any funds pursuant to this Section 5(a) or to
require that the OPs (or their designees) acquire the membership interests in
Accotel Equity if there is a breach of the covenants in Section 6(c) hereof that
is not cured within 30 days after delivery of written notice thereof; and (2)
the Manager shall not have the right to cause the JV to acquire the New Property
or incur the New Indebtedness, in each case if consummating the applicable
transaction would:
(i) (A) cause any Company to fail to qualify as a real estate
investment trust within the meaning of Section 856(a) of the United States
Internal Revenue Code of 1986, as amended (the "Code"), cause any Company to
have additional assets at the close of any calendar quarter of any taxable year
of such Company ("Additional Assets") unless at least 95% of such Additional
Assets are described in Section 856(c)(4)(A) of the Code or cause any Company to
have additional gross income for purposes of Section 856(c) of the Code for any
taxable year of the Company ("Additional Gross Income") unless at least 87.5% of
such Additional Gross Income is derived from items of gross income listed in
Section 856(c)(3) of the Code and the balance of such Additional Gross Income is
derived from items of gross income listed in Section 856(c)(2) of the Code (such
restrictions identified in this clause (A), the "REIT Tax Restrictions"), (B)
prevent any Company during the Liquidation Period (as hereinafter defined) from
forming any trust that is a "liquidating trust" for federal income tax purposes
or transferring any property (other than the Excluded Properties) to any trust
that is a "liquidating trust" for federal income tax purposes or (C) cause any
trust to which a Company transfers its remaining assets to fail to qualify as a
"liquidating trust" for federal income tax purposes; or
(ii) expose any OP to liability or costs in excess of the
Maximum Amount for which such OP, in such OP's reasonable judgment, is not
adequately indemnified.
As used herein the "Liquidation Period", with respect to the
Companies, shall mean the period from the date hereof through October 29, 2004.
6
(b) Following the expiration of a period of ninety (90) days
commencing on the date of delivery of a New Acquisition Notice, if delivered on
or before June 28, 2004, and otherwise sixty (60) days after the date of
delivery of a New Acquisition Notice (or, in either case, earlier with the
written consent of Management Company), if the New Acquisition Notice has not
been withdrawn pursuant to Section 5(c) hereof or if the OPs have been required
by the Manager to expend any funds with respect to a New Transaction (whether or
not the New Acquisition Notice has been withdrawn or such New Transaction has
closed), the Special Manager shall have the right to sell or transfer the
membership interests in Accotel Equity to any person, provided that (i) the
Special Manager shall provide the Management Company with (A) at least five (5)
business days prior written notice before executing any binding commitment or
other binding agreement (which may contain financing and other conditions
precedent) with respect to the sale of the membership interests in Accotel
Equity (it being agreed that a binding commitment or agreement may be executed
during such 90-day or 60-day period, as applicable, if the New Acquisition
Notice has not been withdrawn pursuant to Section 5(c)) and (B) at least ten
(10) business days prior written notice before the closing of the sale of the
membership interests in Accotel Equity, (ii) such sale or transfer shall be made
in compliance with the transfer restrictions imposed by the provisions of the
ACCOR Indebtedness, and (iii) such sale or transfer shall not be made unless the
NorthStar Guarantee expires by its terms or is terminated concurrently with such
sale or transfer (except as to any liability or obligation arising thereunder
for prior periods). The failure to effectuate such sale or transfer solely as a
result of an inability to satisfy the condition imposed by clause (iii) of the
immediately preceding sentence shall not relieve the OPs of their obligation to
expend funds on account of a New Transaction in accordance with and subject to
the provisions of Section 5(a), and shall not deprive the Special Manager of its
rights under Section 5(b). Following the delivery of a New Acquisition Notice,
the Special Manager shall have the right to market the interests in Accotel
Equity, and the Special Manager and the Manager shall exercise commercially
reasonable efforts to coordinate simultaneous closings of the sale of the
membership interests in Accotel Equity and the acquisition of the New Property.
The Manager hereby appoints the Special Manager as its attorney-in-fact, which
shall be coupled with an interest, to take all actions on behalf of and in the
name of the JV to effectuate such sale or transfer. Notwithstanding any
provision of this Agreement to the contrary, the Special Manager shall have no
right, power or authority to take any action or cause the JV to take any action,
and shall not take any affirmative action or cause the JV to take any
affirmative action, that could give rise to any liability or obligation for
payment under the NorthStar Guarantee.
(c) The Manager shall be permitted to deliver a New Acquisition
Notice one or more times (by not later than July 28, 2004), provided that (i)
Manager shall have the right to withdraw any New Acquisition Notice any time
prior to the close of the fifth business day following the delivery by the
Special Manager of a notice pursuant to Section 5(b)(i)(A) hereof, (ii) the JV
shall only be permitted to consummate one New Transaction, (iii) the OPs shall
not be required to expend (on account of acquisition costs and expenses,
including reasonable attorneys' fees), in the aggregate, a cumulative amount
greater than $2,500,000 (the "Maximum Amount") in respect of all New
Transactions, and (iv) the New Acquisition Right shall be terminated (and the JV
shall not be permitted to consummate any New Transaction) at such time as the
OPs shall have expended the Maximum Amount unless Management Company shall
contribute to each OP, as required, an amount in cash equal to the amount in
excess of the Maximum Amount that is required to close the New Transaction
multiplied by such OP's percentage ownership interest in the JV. Notwithstanding
any provision of this Agreement to the contrary, the Manager shall have no
right, power or authority to take any action or cause the JV to take any action,
and shall not take any affirmative action or cause the JV to take any
affirmative action, that could give rise to any liability or obligation for
payment under the guarantee delivered by the Companies to the U.S. Realty
Guarantors in the form attached as Exhibit G-3 (the "Companies Guarantee").
7
(d) Simultaneous with a sale or transfer of the membership interests
in Accotel Equity pursuant to Sections 5(a) or 5(b) hereof, the Manager shall
cause the JV to assign the option agreement annexed hereto as Exhibit A-2 and
the agreement annexed hereto as Exhibit A-3 to the Special Manager or its
designees. Such obligation shall survive the Complete Redemption by the OPs.
6. Restricted Actions. (a) Without the prior written consent of the
holders of the Class A Units, neither any OP nor the Special Manager shall (i)
except as required by Section 5(a) or as expressly permitted in Section 5(b)
hereof, take any affirmative voluntary action with respect to the JV, Accotel
Equity, Accotel Property, the Restricted Assets or the Restricted Indebtedness,
(ii) admit any new partner to any OP, other than a New Partner (as hereinafter
defined) admitted pursuant to Section 9(d) unless the partnership or other
beneficial interests of such new partner (other than any New Partner) are
completely redeemed by not later than October 29, 2004, or (iii) cause or permit
any OP or any of its subsidiaries to directly or indirectly incur any new or
additional indebtedness, other than the ACCOR Indebtedness and the New
Indebtedness, unless such indebtedness (other than the Restricted Indebtedness)
is repaid or discharged or the OP and its subsidiaries are released therefrom on
or before the earlier of (x) October 29, 2004 and (y) the date of the Complete
Redemption by such OP.
(b) Until the earlier to occur of an event described in Section 4(c)
hereof that is not cured within the 30-day period specified therein or the
Complete Redemption by an OP, such OP shall maintain a net asset value (taking
into account in determining net asset value, the amount of all liabilities and
claims payable by such OP or its subsidiaries (other than the Restricted
Indebtedness and claims and liabilities related to the Excluded Properties))
that is at least equal to the sum of (i) the Reacquisition Price that would be
payable by such OP in the event a Put Event occurs plus (ii) $1,625,500 for
Shelbourne I OP, $2,030,000 for Shelbourne II OP, and $1,344,500 for Shelbourne
III OP. On or before the tenth business day of each calendar quarter, the chief
executive officer of each Company shall deliver a written certification to
Management Company that, to the actual knowledge of such chief executive
officer, the applicable OP has at least the net asset value required by the
immediately preceding sentence. If any OP shall breach or fail to comply with
the covenant provided in the first sentence of this Section 6(b) or if the
certification required by the second sentence of this Section 6(b) is not
delivered, then in either case, a Put Event shall not be considered to have
occurred and no OP shall have any liability for damages if, within 20 days after
an OP's receipt of written notice from Management Company that such OP has
breached or failed to comply with the covenant provided in the first sentence of
this Section 6(b) (which notice shall specify in reasonable detail the basis
therefor) or within 20 days after the certification required by the second
sentence of this Section 6(b) is not delivered, such OP deposits into an escrow
account with an independent escrow agent reasonably acceptable to Management
Company, or provides for a letter of credit reasonably acceptable to Management
Company in favor of Management Company in, an amount equal to the Reacquisition
Price that would be payable by such OP in the event a Put Event occurs. The
escrow agreement or letter of credit shall provide for payment to the Management
Company of the applicable Reacquisition Price upon the occurrence of a Put
Event, and shall permit or provide for quarterly withdrawals by the applicable
OP from the escrow account or quarterly reductions in the letter of credit
amount, as applicable, to the extent of the scheduled reductions in the
Reacquisition Price and shall also permit or provide for a complete withdrawal
of all remaining funds in the escrow account or a termination of the letter of
credit, as applicable, at the time of a Complete Redemption or earlier
occurrence of an event described in Section 4(c) hereof that is not cured within
the 30-day period specified therein.
8
(c) Without the prior written consent of the Special Manager, the
Manager shall not (i) except as expressly permitted in Section 5(b) hereof, and
except as necessary to avoid any liability or the obligation to make any payment
under the NorthStar Guarantee, take any affirmative voluntary action with
respect to the JV, Accotel Equity, Accotel Property or the ACCOR Indebtedness,
other than an action required by the terms of the ACCOR Indebtedness or any
lease or other agreement relating to the ACCOR Property, or knowingly breach any
provisions of the ACCOR Indebtedness or the ACCOR Property master lease unless
such breach arises from any default by the tenant under the master lease or any
insufficiency of funds generated from the ownership of the ACCOR Property, (ii)
admit any new partner to the JV, (iii) cause or permit the JV or any of its
subsidiaries to directly or indirectly incur any new or additional indebtedness,
other than the ACCOR Indebtedness and the New Indebtedness, (iv) make any
election to treat the JV, Accotel Equity or Accotel Property as a corporation
for United States federal income tax purposes, (v) cause a voluntary filing by
any of the JV, Accotel Equity or Accotel Property of any case, action or
proceeding under any bankruptcy, insolvency or similar law, or engage in a
collusive filing of a bankruptcy, insolvency or similar action or proceeding
against any of the JV, Accotel Equity or Accotel Property, (vi) cause any of the
JV, Accotel Equity or Accotel Property to take any action that would cause the
existence of a "Material Event" (as defined in the Amended Designations), or
(vii) cause any of the JV, Accotel Equity or Accotel Property to acquire any
additional property or assets except as expressly permitted by Section 5(a)
hereof. In the event the Manager breaches any of the covenants in the foregoing
Sections 6(c)(i), (ii), (iii) or (v), the sole and exclusive remedy of the
parties hereto with respect to such breach shall be the release and discharge of
the OPs' obligations to expend funds and/or acquire the membership interests in
Accotel Equity pursuant to Section 5(a) hereof.
7. Advisory Agreements. Notwithstanding any provisions of the Advisory
Agreements to the contrary, the fees and reimbursements payable to the "Advisor"
thereunder shall not apply to the Restricted Assets or to any assets acquired by
any OP from and after the date hereof, and the term of the Advisory Agreements
shall end upon the sale, transfer or other disposition by the OPs of all
properties other than the Restricted Assets.
8. Settlement Agreement. Upon the effectiveness of this Agreement, Section
11(a) of the Settlement Agreement is hereby amended and restated to read in its
entirety as follows:
"(a) (1) Upon the later of (i) the date on which Management receives
a final settlement or dismissal of all existing litigation pending
against the Companies identified in Section 4.09 of the Disclosure
Schedule, including, but not limited to (1) Xxxxxx v. NorthStar
Capital Investment Corp., et al., Consol. C.A. No. 19442,
9
in the Court of Chancery of the State of Delaware in and for New
Castle County, and (2) HX Investors, L.P., et al. x. Xxxxxxxxxx
Properties I, Inc., et al., C.A. No. 19644 NC, in the Court of
Chancery of the State of Delaware in and for New Castle County; and
(ii) the complete redemption of all partnership and other beneficial
interests in the Limited Partnerships (other than the partnership
interests held by Management and any new partner of any Limited
Partnership that has been designated by Management), and provided
that no Put Event (as defined in that certain Agreement, dated as of
January 15, 2003 (the "Global Agreement"), among Presidio, certain
subsidiaries of Presidio listed on the signature pages thereto,
NorthStar Capital Investment Corp., Management, Shelbourne
Properties I, Inc., Shelbourne Properties II, Inc., Shelbourne
Properties III, Inc., Shelbourne Properties I, L.P., Shelbourne
Properties II, L.P. and Shelbourne Properties III, L.P.) has
occurred for which the Reacquisition Price (as defined in the Global
Agreement) has not been paid by each of the Limited Partnerships to
Management, Management shall pay to HX, in cash, an amount equal to
$1,050,000.
(2) Upon satisfaction of the conditions set forth in Section
11(a)(1)(i) above and provided that no Put Event has occurred for
which the Reacquisition Price has not been paid by each of the
Limited Partnerships to Management, Management shall pay to HX, in
cash, an aggregate amount equal to 42% of all distributions paid to
the holders of the Class A Preferred Units and the holders of the
Class A Units (other than amounts paid by any Limited Partnership as
the Reacquisition Price (as defined in the Global Agreement)) from
their respective dates of issuance, and thereafter Management shall
pay to HX in cash, 42% of all distributions paid to the holders of
the Class A Units through the date of complete redemption of all
partnership and other beneficial interests in the Limited
Partnerships (other than the partnership interests held by
Management and any new partner of any Limited Partnership that has
been designated by Management). Payment shall be made at the time of
satisfaction of the conditions set forth in Section 11(a)(1)(i)
above, and thereafter, at the time that distributions are made to
the holders of the Class A Units."
9. Complete Redemption of Partnership Common Units. (a) Each OP shall at
all times be permitted to distribute its assets (other than the Advisory
Agreements, the Excluded Properties and the assets required to be maintained by
the OPs pursuant to Section 6(b) hereof) in partial redemption of all
partnership and other beneficial interests in such OP (other than the
partnership interests in such OP held by Management Company and any New
Partner), provided that no OP shall completely redeem all partnership and other
beneficial interests in such OP (other than the partnership interests held by
Management Company and any New Partner) by distributing all of its remaining
assets other than its Advisory Agreement and the Excluded Properties (the
"Complete Redemption") prior to the earlier of (x) August 29, 2004 and (y) the
date of the closing of a New Transaction. Notwithstanding anything herein to the
contrary, each OP shall have the right to effectuate a Complete Redemption at
any time from and after the earlier of August 29, 2004 and the date of the
closing of New Transaction provided that such OP satisfies the requirements of
Section 4(b)(iv) at the time of the Complete Redemption. The Amended and
Restated Limited Partnership Agreement of each of the OPs shall be amended to
permit said distributions. The distribution of assets of the OPs in redemption
of the OP interests of such partners shall not constitute a "Put Event" under
Section 4(b)(i) of this Agreement.
10
(b) In the event the OPs and the JV have not closed the New
Transaction, then, immediately prior to the Complete Redemption by each OP, upon
five business days' notice by the OPs, Management Company shall contribute to
the capital of the OPs (for distribution to the Companies), an aggregate cash
amount equal to the sum of (i) $200,000, plus (ii) up to $25,000 of third-party
costs and expenses, including reasonable attorney fees (other than those of
counsel for the OPs), in excess of $15,000 that are expended by the OPs to close
the ACCOR Transaction, plus (iii) any payments theretofore made by the OPs on
account of the Maximum Amount. If the required contribution is not made in full
within the aforesaid five-day period, then the unpaid amount shall bear interest
at the rate of 7.5% per annum, compounded quarterly, until paid to the Companies
or their successors in interest. This Section 9(b) shall survive the Complete
Redemption and any dissolution of the OPs or the Companies.
(c) Provided that a Put Event shall not have occurred, upon the
Complete Redemption by each OP, none of the Companies or any of their affiliates
shall have any obligations whatsoever under this Agreement other than as
provided in Sections 9(b) and 10 hereof, which shall survive such Complete
Redemption.
(d) Prior to the Complete Redemption by each OP, Management Company
shall have the right, exercisable by delivery of written notice to the OPs, to
require each OP to admit one or more new partners designated by Management
Company that are affiliates of NorthStar Partnership, L.P. (any such new
partner, a "New Partner") and to accept the contribution of cash or other
property to each OP by such New Partners in connection with such admission,
provided that:
(i) the admission of the New Partner and contribution of cash
or other property by such New Partner to an OP would not (A) cause
any Company to fail to qualify as a real estate investment trust
within the meaning of Section 856(a) of the United States Internal
Revenue Code of 1986, as amended (the "Code"), cause any Company to
have any Additional Assets or Additional Gross Income that does not
comply with the REIT Tax Restrictions, (B) prevent any Company
during the Liquidation Period (as hereinafter defined) from forming
any trust that is a "liquidating trust" for federal income tax
purposes or transferring any property (other than the Excluded
Properties) to any trust that is a "liquidating trust" for federal
income tax purposes, (C) cause any trust to which a Company
transfers its remaining assets to fail to qualify as a "liquidating
trust" for federal income tax purposes or (D) expose any OP to
liability or costs for which such OP, in such OP's reasonable
judgment, is not adequately indemnified; and
11
(ii) the New Partner shall not have any profit, loss, economic
or other interest in any assets or property of the OPs (other than
the Excluded Properties).
The cash or other property contributed to the OPs by any such New Partners shall
not be part of the assets distributed by the OPs in a Complete Redemption and
shall be retained by the OPs following such Complete Redemption.
10. Indemnification. Each of the Companies hereby agrees to protect,
defend and indemnify PCIC, the PCIC Subsidiaries, NCIC, NorthStar, Management
Company and each of their respective current and former directors, officers,
employees, members, partners, shareholders and affiliates (collectively, the
"Management Indemnified Parties") from and against any and all third party
claims asserted against any of the Management Indemnified Parties at any time
from and after the closing of the ACCOR Transaction relating to any property
owned directly or indirectly by any of the OPs at or following the closing of
the ACCOR Transaction but prior to the Complete Redemption by each OP, other
than (1) the ACCOR Property for the period that it is a Restricted Asset, (2)
the New Property in the event the New Property is acquired by the JV prior to
the Complete Redemption by each OP and (3) any property contributed by a New
Partner pursuant to Section 9(d) (together with the properties described in (1)
and (2), the "Excluded Properties"). Management Company and PCIC hereby agree to
protect, defend and indemnify each of the Companies and each of their respective
current and former directors, officers, employees, members, partners,
shareholders and affiliates (collectively, the "Company Indemnified Parties")
from and against any and all third party claims asserted against any of the
Company Indemnified Parties relating to any of the Excluded Properties. In
addition, each of the Companies hereby agrees to protect, defend and indemnify
PCIC, NCIC and NorthStar from and against any and all third party claims at any
time arising pursuant to the NorthStar Guarantee that result from any
affirmative action taken by the Special Manager, any Company or any OP prior to
the Complete Redemption or earlier expiration or termination of the NorthStar
Guarantee, and the Management Company and PCIC agree to protect, defend and
indemnify the Companies from and against any and all third party claims at any
time arising pursuant to the Companies Guarantee that result from any
affirmative action taken by NorthStar, Management Company or PCIC prior to the
Complete Redemption or earlier expiration or termination of the Companies
Guarantee. NorthStar is an express and intended third party beneficiary of the
indemnification provided in this Section 10. The Companies, on the one hand, and
Management Company and PCIC on the other hand, shall pay all expenses,
including, without limitation, reasonable attorneys' fees, that may be incurred
by any of Management Indemnified Parties (in the case of the Companies) and the
Company Indemnified Parties (in the case of Management Company and PCIC),
respectively, in successfully enforcing the indemnity provided for in this
Section. The provisions of this Section shall survive the Complete Redemption by
each OP.
11. Additional Capital Contributions. For each year for which Management
Company has made an election under Section 4(d) hereof, Management Company shall
contribute to the OPs (32.51% to Shelbourne I OP, 40.6% to Shelbourne II OP and
26.89% to Shelbourne III OP), for distribution to the Companies, an aggregate
cash amount equal to $105,000. Unless full payment is made by not later than
five (5) business days after receipt by Management Company of the distributions
required to be paid to Management Company pursuant to the Amended Designations
for the calendar year for which such election was made, the related election
shall be deemed null and void.
12
12. Miscellaneous.
(a) Expenses. Each party shall bear its own costs and expenses in
connection with this Agreement and the transactions contemplated hereby;
provided that the OPs shall reimburse Management Company, within five (5)
business days after demand therefor from Management Company, for up to $50,000
in the aggregate of its out-of-pocket expenses paid or payable by Management
Company to its legal counsel for services rendered in connection with this
Agreement, the ACCOR Transaction and any New Transaction.
(b) Amendment. This Agreement may be amended, modified or
supplemented from time to time but only in writing signed by each of the parties
hereto.
(c) Notices. Any notice, request, instruction or other document to
be given hereunder by a party hereto shall be in writing and shall be deemed to
have been given, when received:
(i) If to PCIC or Management Company, addressed as follows:
Presidio Capital Investment Company, LLC
c/o NorthStar Capital Investment Corp.
000 Xxxxxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. XxXxxxxx, Esq.
Facsimile No.: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
(ii) If to any of the Companies or the OPs, addressed to such
individual Company or OP as follows:
c/o Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx; Xxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000,
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
(d) Waivers. The failure of a party hereto at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce
13
the same. No waiver by a party of any condition or of any breach of any term,
covenant, representation or warranty contained in this Agreement shall be
effective unless in writing, and no waiver in any one or more instances shall be
deemed to be a further or continuing waiver of any such condition or breach in
other instances or a waiver of any other condition or breach of any other term,
covenant, representation or warranty.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed an original, but all of which together
shall constitute one and the same instrument.
(f) Interpretation. Consummation of the transactions contemplated
herein shall not be deemed a waiver of a breach of or inaccuracy in any
representation, warranty or covenant or of any party's rights and remedies with
regard thereto. No specific representation, warranty or covenant contained
herein shall limit the generality or applicability of a more general
representation, warranty or covenant contained herein. A breach of or inaccuracy
in any representation, warranty or covenant shall not be affected by the fact
that any more general or less general representation, warranty or covenant was
not also breached or inaccurate.
(g) Applicable Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York without giving effect to the principles of conflicts of law thereof.
(h) Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective estates, heirs, legal
representatives, successors and assigns; provided, however, that no assignment
of any rights or obligations shall be made by any party hereto without the
written consent of each other party hereto.
(i) No Third-Party Beneficiaries. Except as expressly provided in
Section 10 hereof, this Agreement is solely for the benefit of the parties
hereto and, to the extent provided herein, their respective estates, heirs,
successors, Affiliates (as hereinafter defined) and their respective directors,
officers, employees, agents and representatives, and no provision of this
Agreement shall be deemed to confer upon other third parties any remedy, claim,
liability, reimbursement, cause of action or other right.
As used herein, the term "affiliate" means, with respect to any
specified person or entity, (1) any other person or entity which directly or
indirectly, controls, is under common control with, or is controlled by, such
specified person or entity, (2) any other person or entity which is the
beneficial owner of 50 percent or more of any class of securities of the
specified person or entity or a person or entity described in clause (1) of this
paragraph, and (3) any relative or spouse of the specified person or any of the
persons contemplated in this definition.
(j) Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
14
(k) Remedies Cumulative. Unless otherwise specified, the remedies
provided in this Agreement shall be cumulative and shall not preclude the
assertion or exercise of any other rights or remedies available by law, in
equity or otherwise.
(l) Entire Understanding. This Agreement and the Amended
Designations with respect to the Class A Units set forth the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof.
(m) Jurisdiction of Disputes; Waiver of Jury Trial. In the event any
party to this Agreement commences any litigation, proceeding or other legal
action in connection with or relating to this Agreement or any matters described
or contemplated herein, with respect to any of the matters described or
contemplated herein, the parties to this Agreement hereby (i) agree under all
circumstances absolutely and irrevocably to institute any litigation, proceeding
or other legal action in a court of competent jurisdiction located within the
Borough of Manhattan in The City of New York, New York, whether a state or
federal court; (ii) agree that in the event of any such litigation, proceeding
or action, such parties will consent and submit to personal jurisdiction in any
such court described in clause (i) above and to service of process upon them in
accordance with the rules and statutes governing service of process (it being
understood that nothing in this Section 12(m) shall be deemed to prevent any
party from seeking to remove any action to a federal court in the Borough of
Manhattan in The City of New York, New York); and (iii) agree to waive to the
full extent permitted by law any objection that they may now or hereafter have
to the venue of any such litigation, proceeding or action in any such court or
that any such litigation, proceeding or action was brought in an inconvenient
forum.
(n) REIT Qualification. No provision in this Agreement shall be
construed or interpreted in a manner that would adversely affect the
qualification of any Company as a real estate investment trust within the
meaning of section 856(a) of the Code, the tax treatment of any Company or its
shareholders during the Liquidation Period, or the qualification of any trust to
which a Company transfers its remaining assets as a "liquidating trust" for
federal income tax purposes.
(o) Settlement Agreement and Contribution Agreement. Except with
respect to the amendment to the Settlement Agreement pursuant to Section 8
hereof, which shall be effective only upon the closing of the ACCOR Transaction,
the Settlement Agreement is and shall remain in full force and effect. Except
with respect to the amendment to the Contribution Agreement pursuant to Section
3 hereof, which shall be effective only upon the closing of the ACCOR
Transaction, the Contribution Agreement is and shall remain in full force and
effect.
(p) Effective Time of Agreement. This Agreement shall only become
effective upon the closing of the ACCOR Transaction and shall be of no force or
effect in the event the ACCOR Transaction does not close on terms and conditions
that are consistent in all material respects with the form of purchase contract
that is attached hereto as Exhibit C or on such other terms as shall be approved
by Management Company in its sole and absolute discretion.
[The remainder of this page is intentionally left blank.]
15
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first written above.
PRESIDIO CAPITAL INVESTMENT
COMPANY, LLC
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
SHELBOURNE MANAGEMENT LLC
By: PRESIDIO CAPITAL INVESTMENT
COMPANY, LLC, its Sole Member
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
SHELBOURNE PROPERTIES I, INC.
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President
SHELBOURNE PROPERTIES II, INC.
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President
SHELBOURNE PROPERTIES III, INC.
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President
SHELBOURNE PROPERTIES I, L.P.
By: SHELBOURNE PROPERTIES I GP, LLC.,
its General Partner
By: SHELBOURNE PROPERTIES I, INC.,
its Sole Member
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President
SHELBOURNE PROPERTIES II, L.P.
By: SHELBOURNE PROPERTIES II GP, LLC.,
its General Partner
By: SHELBOURNE PROPERTIES II, INC.,
its Sole Member
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President
SHELBOURNE PROPERTIES III, L.P.
By: SHELBOURNE PROPERTIES III GP, INC.,
its General Partner
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President
MILLENNIUM FUNDING I LLC
By: PRESIDIO CAPITAL INVESTMENT COMPANY,
LLC, its Sole Member
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
17
MILLENNIUM FUNDING II LLC
By: PRESIDIO CAPITAL INVESTMENT COMPANY,
LLC, its Sole Member
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
MILLENNIUM FUNDING III LLC
By: PRESIDIO CAPITAL INVESTMENT COMPANY,
LLC, its Sole Member
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
MILLENNIUM FUNDING IV LLC
By: PRESIDIO CAPITAL INVESTMENT COMPANY,
LLC, its Sole Member
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
Solely with respect to Sections 3 and 12:
NORTHSTAR CAPITAL INVESTMENT CORP.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
Solely with respect to Sections 8 and 12:
HX INVESTORS L.P.
By: EXETER CAPITAL CORPORATION, its
general partner
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President
18
Exhibit A-1
U.S. REALTY/BERKSHIRE HATHAWAY
SALE-LEASEBACK OF
MOTEL 6 PROPERTIES
from
MOTEL 6 OPERATING L.P.
to
ACCOTEL PROPERTY INVESTORS LLC
ACCOTEL REMAINDER LLC
FIRST BERKSHIRE PROPERTIES, LLC
--------------------------------------------------------------------------------
Date of Closing:
July 30, 1999
PROSKAUER ROSE LLP
0000 Xxxxxxxx
Xxx Xxxx. Xxx Xxxx 00000
(212) 969-300
DEFINITIONS
"Motel 6" MOTEL 6 OPERATING L.P., Seller
"Owner" ACCOTEL PROPERTY INVESTORS LLC, Estate for
Years Owner of the USRA Pool Properties
"Remainderman" ACCOTEL REMAINDER LLC, Remainderman Owner of
the USRA Pool Properties
"First Berkshire" FIRST BERKSHIRE PROPERTIES, LLC, Fee Owner
of the BH Pool Properties
"UCC VI" UNIVERSAL COMMERCIAL CREDIT LEASING VI,
INC., USRA Tenant
"UCC VII" UNIVERSAL COMMERCIAL CREDIT LEASING VII,
INC., BH Tenant
"Accor" ACCOR S.A., Lease Guarantor
"Lender" BERKSHIRE HATHAWAY CREDIT CORPORATION,
Owner's Lender
"FFH" Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx,
Attorney for First Berkshire and Lender
"PR" Proskauer Rose LLP, Attorney for Owner and
Remainderman
"T&K" Xxxxxxxx & Xxxxxx, Attorney for Seller and
Tenants
"SWLT" Southwest Land Title Company, Title Insurer
"USRA Pool" The properties listed on Schedule "A"
attached hereto which were acquired by
Owner.
"BH Pool" The properties listed on Schedule "B"
attached hereto which were acquired by First
Berkshire.
INDEX
----------------------------------------------------------------------------------------------------------------------
DOCUMENT(1) TAB
-------- ---
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Section I - Loan Documents
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Indenture of Mortgage, Deed of Trust, Security Agreement, Fixture Filing, Financing 1.
Statement and Assignment of Rents and Leases from Owner and Remainderman to Lender
----------------------------------------------------------------------------------------------------------------------
Promissory Note, made by Owner in favor of Lender 2.
----------------------------------------------------------------------------------------------------------------------
Loan Agreement, between Lender and Owner 3.
----------------------------------------------------------------------------------------------------------------------
Assignment of Master Lease and Guaranty from Owner to Lender 4.
----------------------------------------------------------------------------------------------------------------------
Assignment of Master Lease and Guaranty Consent Agreement 5.
among UCCV, Owner and Lender
----------------------------------------------------------------------------------------------------------------------
Sublease Consent between Motel 6, as Subtenant, UCC VI, as Tenant, Owner and Lender 6.
----------------------------------------------------------------------------------------------------------------------
Guaranty of Recourse Obligation (Owner's) between AP/RH Holdings LLC, Xxxxxxx X. 7.
Xxxxx, Xxxxx X, Xxxx, Xxxxxx X. Xxxxx, Xxxxx Xxxxxxx, Xxxxxxxx X. Xxxxx and Xxxx
Genede in favor of Lender
----------------------------------------------------------------------------------------------------------------------
Guaranty of Recourse Obligation (Remainderman's) between AP/RH Holdings LLC, Xxxxxxx 8.
X. Xxxxx, Xxxxx X. Xxxx, Xxxxxx X. Xxxxx, Xxxxx Xxxxxxx, Xxxxxxxx X. Xxxxx and Xxxx
Genede in favor of Lender
----------------------------------------------------------------------------------------------------------------------
Guaranty of Payment between AP/RH Holdings LLC, Xxxxxxx X. Xxxxx, Xxxxx X. Xxxx, 9.
Xxxxxx X. Xxxxx, Xxxxx Xxxxxxx, Xxxxxxxx X. Xxxxx and Xxxx Genede in favor of Lender
----------------------------------------------------------------------------------------------------------------------
Collateral Assignment of Agreements, Permits and Contracts between Owner and Lender 10
----------------------------------------------------------------------------------------------------------------------
Pledge and .Security Agreement (Owner's) between Accotel Equity Investors LLC and 11.
Lender
----------------------------------------------------------------------------------------------------------------------
----------
(1) Unless otherwise indicated, all documents are dated as of July 30, 1999.
-1-
----------------------------------------------------------------------------------------------------------------------
DOCUMENT(1) TAB
-------- ---
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Pledge and Security Agreement (Remainderman) between Accotel Remainder Equity LLC and 12.
Lender
----------------------------------------------------------------------------------------------------------------------
Agreement and Acknowledgment of Pledge (Owner's) executed by Owner 13.
----------------------------------------------------------------------------------------------------------------------
Agreement and Acknowledgement of Pledge (Remainderman) executed by Remainderman 14.
----------------------------------------------------------------------------------------------------------------------
Forms of UCC-1 Financing Statements (Indenture) filed by Owner and Remainderman in 15.
favor of Lender
----------------------------------------------------------------------------------------------------------------------
Accor Group Indemnification Agreement among Lender, Accor SA, UCC VI, and Motel 6 16.
----------------------------------------------------------------------------------------------------------------------
Letter from Motel 6 to Lender re: indemnification for costs and expenses referred to 17.
in Section 4 of the Loan Agreement
----------------------------------------------------------------------------------------------------------------------
Seller's Closing Statement 18.
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Section II - Lease Documents for the USRA Pool
----------------------------------------------------------------------------------------------------------------------
Lease Agreement between Owner, as Landlord and UCC VI, as Tenant 19.
----------------------------------------------------------------------------------------------------------------------
Sublease Agreement between UCC VI, as Sublessor and Motel 6, as Sublessee 20.
----------------------------------------------------------------------------------------------------------------------
Assignment of Master Sublease from UCC VI and Assignor to Owner 21.
----------------------------------------------------------------------------------------------------------------------
Lease Guaranty between Accor SA and Owner. 22.
----------------------------------------------------------------------------------------------------------------------
Memoranda of Lease between Owner as Lessor and UCC VI, as Lessee for each USRA Pool 23.
property
----------------------------------------------------------------------------------------------------------------------
Memoranda of Sublease between UCC VI, as Lessor and Motel 6 as Lessee for each USRA 24.
Pool property
----------------------------------------------------------------------------------------------------------------------
Request for Taxpayer Identification Number and Certification (W-9 Form) for UCC VI 25.
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
-2-
----------------------------------------------------------------------------------------------------------------------
DOCUMENT(1) TAB
-------- ---
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Section III - Lease Documents for the BH Pool
----------------------------------------------------------------------------------------------------------------------
Lease Agreement between First Berkshire, as Landlord and UCC VII, as Tenant 26.
----------------------------------------------------------------------------------------------------------------------
Sublease agreement between UCC VII, as Sublessor and Motel 6, as Sublessee 27.
----------------------------------------------------------------------------------------------------------------------
Sublease Consent among Motel 6, as Subtenant, UCC VII, as Tenant and First Berkshire, 28.
as Landlord
----------------------------------------------------------------------------------------------------------------------
Lease Guaranty from Accor, as Guarantor, to First Berkshire, as Beneficiary 29.
----------------------------------------------------------------------------------------------------------------------
Memoranda of Lease between First Berkshire, as Lessor and UCC VII, as Lessee for each 30.
BH Pool Property
----------------------------------------------------------------------------------------------------------------------
Memoranda of Sublease between UCC VII, as Lessor, and Motel 6, as Lessee for each BH 31.
Pool Property
----------------------------------------------------------------------------------------------------------------------
Request for Taxpayer Identification Number and Certification (W-9) for UCC VII 32.
----------------------------------------------------------------------------------------------------------------------
Intentionally Omitted 33.
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Section IV - Title Documents
----------------------------------------------------------------------------------------------------------------------
Loan Title Policies issued to Lender with respect to the properties in the USRA Pool 34.
----------------------------------------------------------------------------------------------------------------------
Owner's Title Policies issued to First Berkshire with respect to the properties in 35.
the BH Pool
----------------------------------------------------------------------------------------------------------------------
Owner's Title Policies issued to Owner, as owner of an estate for years, with respect 36.
to the properties in the USRA Pool
----------------------------------------------------------------------------------------------------------------------
Owner's Title Policies issued to Remainderman, with respect to the properties in 37.
the USRA Pool
----------------------------------------------------------------------------------------------------------------------
-3-
----------------------------------------------------------------------------------------------------------------------
DOCUMENT(1) TAB
-------- ---
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Joint Recording Instructions from FFH, as special counsel to Lender, PR, as special 38.
counsel to Owner and Remainderman, and T & K, as special counsel to Grantor and Tenant
to Chicago Title Insurance Company with respect to the BH Pool
----------------------------------------------------------------------------------------------------------------------
Joint Recording Instructions from FFH, as special counsel to Lender, PR, as special 39.
counsel to Owner and Remainderman, and T &K, as special counsel to Grantor and Tenant
to Chicago Title Insurance Company with respect to the BH Pool
----------------------------------------------------------------------------------------------------------------------
Intentionally Omitted 40.
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Section V - Transfer Documents for USRA Pool for the USRA Pool
----------------------------------------------------------------------------------------------------------------------
Agreement of Purchase and Sale between Motel 6, as Seller, and Owner, as Purchaser 41.
----------------------------------------------------------------------------------------------------------------------
Statutory Warranty Deeds with respect to Estate for Years and 42.
Improvements and Option from Motel 6 as Grantor to Owner, as Grantee for the
properties in the USRA Pool
----------------------------------------------------------------------------------------------------------------------
Statutory Warranty Deeds with respect to Remainder Interest Reserving Estate for 43.
Years, Improvements and Option from Motel 6,
as Grantor, to Remainderman, as Grantee
----------------------------------------------------------------------------------------------------------------------
Xxxx of Sale and General Assignment between Motel 6, as Grantor and Owner, as 44.
Granteee, with respect to the properties in the USRA Pool
----------------------------------------------------------------------------------------------------------------------
Certificate of Non-Foriegn Status from Motel 6 with respect to the properties in the 45.
USRA Pool
----------------------------------------------------------------------------------------------------------------------
Option and Subordination Agreement between Remainderman, as Optionor, and Owner, as 46.
Optionee with respect to the properties in the USRA Pool
----------------------------------------------------------------------------------------------------------------------
Tripartite Agreement by and among UCC VI, Remainderman and Owner with respect to the 47.
properties in the USRA Pool
----------------------------------------------------------------------------------------------------------------------
Transfer Tax Forms (USRA Pool) 48.
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
-4-
----------------------------------------------------------------------------------------------------------------------
DOCUMENT(1) TAB
-------- ---
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Section VI - Transfer Documents for the BH Pool
----------------------------------------------------------------------------------------------------------------------
Agreement of Purchase and Sale between Motel 6, as Seller and First Berkshire, as 49.
Purchaser
----------------------------------------------------------------------------------------------------------------------
Statutory Warranty Deeds from Motel 6, as Grantor, to First Berkshire, as Grantee, 50.
for the properties in the BH Pool
----------------------------------------------------------------------------------------------------------------------
Xxxx of Sale and General Assignment between Motel 6, as Grantor, and First Berkshire, 51.
as Grantee with respect to the properties in the BH Pool
----------------------------------------------------------------------------------------------------------------------
Certificate of Non-Foreign Status from Motel 6 with respect to the properties in the 52.
BH Pool
----------------------------------------------------------------------------------------------------------------------
Intentionally Omitted 53.
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Section VII - Legal Opinions
----------------------------------------------------------------------------------------------------------------------
Proskauer Rose LLP-Due Authorization Opinion (NY) 54.(A)
----------------------------------------------------------------------------------------------------------------------
Proskauer Rose LLP-Enforceability Opinion (NY) (B)
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Xxxxxxxx Leyton and Finger Due Authorization Opinion (Delaware) 55.
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Xxxxxxxx and Knight - Due Authorization Opinions (TX) 56.
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx and Mettatal Opinion, re: (Lease Guarantees) 57.
----------------------------------------------------------------------------------------------------------------------
Hunton and Xxxxxxxx-Enforceability Opinions (NY) 58.
----------------------------------------------------------------------------------------------------------------------
Proskauer Rose LLP-Substantive Non-Consolidation Opinion 59.
----------------------------------------------------------------------------------------------------------------------
Local Counsel Legal Opinions - USRA Pool 60.
A. (Alabama) Xxxxxxx Xxxxx Xxxx & White LLP.
B. (Arizona) Xxxxx Xxxx
C. (California) Proskauer Rose LLP.
D. (Illinois) Xxxxxx Xxxxxx & Xxxxx
E. (Indiana) Xxxxx and Xxxxxxx, P.C.
F. (North Dakota) Xxxx Xxxxxxx, P.C.
G. (New Mexico) Eastham, Johnson, Monnheimer & Xxxxx
H. (Oklahoma) Xxxxxxx Xxxxx Xxxx Xxxxxx Xxxxxxx & Price
I. (Oregon) Xxxxxx & Xxxxxx P.C.
J. (South Dakota) Davenport, Evans, Xxxxxxx & Xxxxx L.L.P
----------------------------------------------------------------------------------------------------------------------
-5-
----------------------------------------------------------------------------------------------------------------------
DOCUMENT(1) TAB
-------- ---
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Local Counsel Legal Opinions - BH Pool 61.
A. (Alabama) Xxxxxxx Xxxxx Xxxx & White LLP.
B. (Arkansas) Xxxxx Xxx Firm, LTD.
C. (Connecticut) Xxxxx Xxxxxxx Xxxxx & Gesmer
D. (Florida) Xxxxx, Norris, Scherer, Xxxxxxxxxx & Wolrner
E. (Georgia) Xxxxxx X. Xxxxxx, XX.
F. (Kentucky) Xxxxxxxx & Shohl LLP.
G. (Louisiana) XxXxxxxxxx Xxxxxxxx LLC.
H. (Missouri) Xxxxxxxxx Xxxxxxxx LLP
I. (Mississippi) Xxxxxxx Xxxxxx Winter & Stennis, P.A.
J. (Ohio) Xxxxxxxx & Shohl LLP.
K. (Oklahoma) Xxxxxxx Xxxxx Xxxx Xxxxxx Xxxxxxx & Price
L. (Pennsylvania) Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP.
M. (South Carolina) Buist, Moore, Xxxxxx & XxXxx, P.A.
N. (Texas) Xxxxx Xxxx
M. (Washington) Xxxxxxx Xxxxx & Xxxxx LLP.
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Closing Certificates
----------------------------------------------------------------------------------------------------------------------
Tenant's Certificate from UCC VI with respect to USRA Pool 62.
----------------------------------------------------------------------------------------------------------------------
Tenant's Certificate from UCC VII with respect to BH Pool 63.
----------------------------------------------------------------------------------------------------------------------
Owner's Certificate 64.
----------------------------------------------------------------------------------------------------------------------
Remainderman's Certifcate 65.
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Miscellaneous
----------------------------------------------------------------------------------------------------------------------
Intentionally Omitted 66.
----------------------------------------------------------------------------------------------------------------------
Intentionally Omitted 67.
----------------------------------------------------------------------------------------------------------------------
Intentionally Omitted 68.
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Section VIII - Organizational Documents
----------------------------------------------------------------------------------------------------------------------
Remainderman and Accotel Remainder Equity LLC 69.
----------------------------------------------------------------------------------------------------------------------
Owner and Accotel Equity Investors LLC 70.
----------------------------------------------------------------------------------------------------------------------
-6-
----------------------------------------------------------------------------------------------------------------------
DOCUMENT(1) TAB
-------- ---
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Accor 71.
----------------------------------------------------------------------------------------------------------------------
Motel 6 and Motel 6 G.P. Inc. 72.
----------------------------------------------------------------------------------------------------------------------
UCC VI 73.
----------------------------------------------------------------------------------------------------------------------
UCC VII 74.
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Section IX - Additional Documents
----------------------------------------------------------------------------------------------------------------------
Consent from Berkshire Hathaway Credit Corporation dated January 15, 2003
----------------------------------------------------------------------------------------------------------------------
Reaffirmation to Guaranty of Recourse Obligations (Owner)
----------------------------------------------------------------------------------------------------------------------
Reaffirmation to Guaranty of Payment
----------------------------------------------------------------------------------------------------------------------
Reaffirmation, dated as of January 15, 2003, from Accotel Property Investors LLC, and
Accotel Equity Investors LLC, in favor of Berkshire Hathaway Credit Corporation
----------------------------------------------------------------------------------------------------------------------
Reaffirmation to Guaranty of Recourse Obligations (Remainderman)
----------------------------------------------------------------------------------------------------------------------
Foreclosure Guaranty from Presidio Capital Investment Company LLC and Accotel
Property Investors LLC in favor of Berkshire Hathaway Credit Corporation
----------------------------------------------------------------------------------------------------------------------
Option Agreement from Accotel Remainder Equity LLC to Xxxxxxxxxx XX LLC
----------------------------------------------------------------------------------------------------------------------
Asset Management Agreement between Accotel Property Investors LLC and US Realty
Advisors LLC
----------------------------------------------------------------------------------------------------------------------
Purchase Agreement between Realty Holdings of America, LLC and Xxxxxxxxxx XX LLC
----------------------------------------------------------------------------------------------------------------------
Amended and Restated Limited Liability Company Agreement of Accotel Equity Investors
LLC
----------------------------------------------------------------------------------------------------------------------
Guaranty from Shelbourne Properties I, Inc., Shelbourne Properties II, Inc. and
Shelbourne Properties III, Inc. in favor of Realty Holding of America, LLC and
certain of its employees and principals
----------------------------------------------------------------------------------------------------------------------
Guaranty from NorthStar Capital Investment Corp. and certain of its affiliates in
favor of Realty Holdings of America, LLC and certain of its employees and principals
----------------------------------------------------------------------------------------------------------------------
Letter Agreement, dated as of January 15, 2003, between Accotel Remainder Equity LLC
and Xxxxxxxxxx XX LLC
----------------------------------------------------------------------------------------------------------------------
-7-
EXHIBIT A
Locations of USRA Pool Properties
Dothan, AL
Douglas, AZ
Casa Grande, AZ
Woodland, CA
Vacaville, CA
Tracy, CA
Davis, CA
Corona, CA
Bakersfield, (E) CA
Valjo Mrwl, E CA
Anaheim, CA
Chgo-Shlr Pk, IL
Louivl-Jefsn, IN
Fargo (W), ND
Las Cruces, NM
Tucumcari, NM
Muskogee, OK
Eug-Sprngfld, OR
Sioux Falls, SD
EXHIBIT B
Locations of BH Pool Properties
Huntington - MD, AL
Jonesboro, AR
Conway, AR
West Memphis, AR
Hartford Windsor, CT
Orlando Wtpk, FL
Valdosta, GA
Elizabethtown, KY
Lafayette, LA
Monroe, LA
St. Xxxxxx, MO
Hattiesburg, MS
Meridian, MS
Columbus (E), OH
Tulsa (2), OK
Pittsburgh Craf P, PA
Harrisburg, PA
Charleston N, SC
Temple, TX
Kingsville, TX
Waco-Bellmead, TX
Seattle (Xxxxxxxx), WA
Seattle (S), WA
EXHIBIT A-2
OPTION AGREEMENT
THIS OPTION AGREEMENT (this "Agreement"), is made as of January __, 2003,
among XXXXXXXXXX XX LLC, a Delaware limited liability company ("Company"), and
ACCOTEL REMAINDER EQUITY LLC, a Delaware limited liability company ("Remeq").
RECITALS
WHEREAS, Accotel Property Investors LLC, a Delaware limited liability
company ("EFY Owner"), is the owner of an estate for years in the twenty (20)
parcels of real property described on Schedule A attached hereto (each a
"Parcel" and, collectively, the "Land") and fee title to the improvements
located on the Land (collectively, the "Improvements"; the Land and the
Improvements hereinafter collectively referred to as the "Properties" and each a
"Property"); provided, however, that, for purposes hereof, if any Property is
substituted with a Substitute Property (as defined in the Lease (as hereinafter
defined)), (i) the parcel of land which is a part of the Substitute Property and
in which EFY Owner acquires an estate for years interest shall be substituted
hereunder for the Parcel which is a part of the Property and such parcel of land
which is a part of the Substitute Property shall be a part of the Land
hereunder, (ii) the Parcel which is a part of the Property will cease to be a
Parcel and part of the Land hereunder, and (iii) Schedule A attached hereto
shall be amended to reflect such substitution;
WHEREAS, Accotel Equity Investors LLC, a Delaware limited liability
company ("Equity"), is the sole member of EFY Owner;
WHEREAS, Accotel Remainder LLC, a Delaware limited liability company
("Remainderman"), is the owner of the remainder interest in the Land;
WHEREAS, Remeq owns 100% of the membership interests in Remainderman (the
"Membership Interests");
WHEREAS, EFY Owner has entered into a net lease of the Properties (as
amended, the "Lease") with Universal Commercial Credit Leasing VI, Inc. (the
"Tenant");
WHEREAS, EFY Owner and Remainderman entered into twenty (20) Option and
Subordination Agreements, each with respect to one of the Properties
(collectively and as amended, the "Option and Subordination Agreements");
WHEREAS, EFY Owner, Remainderman and Tenant entered into twenty (20)
Tripartite Agreements, each with respect to one of the Properties (collectively
and as amended, the "Tripartite Agreements");
1
WHEREAS, EFY Owner financed the acquisition of its interests in the
Properties with a loan (the "Financing") from Berkshire Hathaway Credit
Corporation (together with its successors and assigns, the "Lender"), and as
security therefor entered into the Indenture of Mortgage, Deed of Trust,
Security Agreement, Fixture Filing, Financing Statement and Assignment of Rents
and Leases (as amended, the "Mortgage"), and other instruments and documents
(collectively, as amended, the "Loan Documents").
WHEREAS, in connection with the Financing, EFY Owner has delivered or
caused to be delivered (a) that certain Guaranty of Recourse Obligations (Owner)
dated as of July 30, 1999 by AP/RH Holdings LLC, Xxxxxxx X. Xxxx, Xxxxx X. Xxxx,
Xxxxxx X. Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxxx X. Xxxxx and Xxxx Xxxxxxx
(collectively, the "Guarantors") in favor of Lender, as supplemented by
Reaffirmation to Guaranty of Recourse Obligations dated as of October 5, 1999 by
Guarantors in favor of Lender, as the same may hereafter be further amended,
supplemented or reaffirmed from time to time (the "Owner's Recourse Guaranty"),
and (b) that certain Guaranty of Payment dated as of July 30, 1999 by Guarantors
in favor of Lender, as amended by First Amendment to and Reaffirmation of
Guaranty of Payment dated as of October 5, 1999 by Guarantors in favor of
Lender, as the same may hereafter be further amended, supplemented or reaffirmed
from time to time (the "Payment Guaranty").
WHEREAS, Remainderman has subordinated its interests in the Land to the
Mortgage and Remeq has delivered or caused to be delivered that certain Guaranty
of Recourse Obligations (Remainderman) dated as of July 30, 1999 by Guarantors
in favor of Lender as supplemented by Reaffirmation to Guaranty of Recourse
Obligation (Remainderman) dated as of October 5, 1999 by Guarantors in favor of
Lender, as the same may hereafter be further amended from time to time (the
"Remainderman's Recourse Guaranty", and collectively with Owner's Recourse
Guaranty and the Payment Guaranty, the "Guaranties").
WHEREAS, Company may wish to purchase Remeq's Membership Interests and
Remeq is willing to grant Company the option to purchase Remeq's Membership
Interests upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual agreements and other good and valuable consideration hereinafter set
forth, the parties hereto, intending to be legally bound, do hereby agree as
follows:
1. Option to Purchase. (a) Remeq hereby grants to Company, subject to all
the terms and conditions hereinafter set forth, the option (the "Membership
Purchase Option") to purchase at any time on or before July 10, 2003 (the
"Outside Date"), all of Remeq's right, title and interest in and to the
Membership Interests, upon at least one (1) month prior written notice to Remeq
and the Lender, which notice shall specifically set forth Company's intention to
purchase Remeq's interest in the Membership Interests and the date (on or prior
to the Outside Date) upon which the closing shall occur.
(b) In consideration for the Membership Purchase Option, Company
shall pay to Remeq, simultaneous with the execution and delivery of this
Agreement, the sum of $47,000.00 (the "Option Price") by wire transfer of
immediately available United States federal funds to the account or accounts
designated by Remeq.
2
2. Purchase Price. (a) In the event Company exercises the Membership
Purchase Option in accordance with the terms and conditions of this Option
Agreement, the purchase price (the "Membership Purchase Price") for Remeq's
right, title and interest in the Membership Interests shall be the sum of Three
Thousand and No/100 Dollars ($3,000.00). The date upon which Remeq's right,
title and interest in the Membership Interests are assigned, transferred and/or
conveyed to Company (the "Closing") is hereinafter called the "Membership
Closing Date".
(b) At any time, if ever, that Remainderman's interest and EFY
Owner's interest in a Parcel merge, whether pursuant to a Rejectable Offer (as
defined the Tripartite Agreement relating to such Parcel) or a Purchase Option
(as defined the Tripartite Agreement relating to such Parcel) or otherwise,
prior to the consummation of the transfer pursuant to the Membership Purchase
Option, (i) upon such merger, this Agreement will automatically terminate with
respect to such Parcel and such Parcel will no longer be considered a part of
the Land and (ii) upon such merger, the Membership Purchase Price will be
automatically reduced by the product of (A) the Membership Purchase Price (as
the same may previously have been reduced), multiplied by (B) a fraction, the
numerator of which is the initial purchase price for the Property subject to
such merger paid by EFY Owner and Remainderman, as set forth in Exhibit B to the
applicable Tripartite Agreement, and the denominator of which is the sum of all
of such purchase prices for all of the Properties which are then subject to this
Agreement (including the Property subject to such merger).
3. Closing. (a) In the event Company exercises the Membership Purchase
Option, on the Membership Closing Date, Company shall pay to Remeq, in lawful
money of the United States, the Membership Purchase Price, and Remeq shall
execute and deliver to Company or, subject to Section 6 of this Agreement, an
Approved Transferee (as hereinafter defined), an assignment of membership
interests, in the form attached hereto as Schedule B, transferring Remeq's
right, title and interest in the Membership Interests.
(b) In the event Company exercises the Membership Purchase Option,
on the Membership Closing Date, in addition to the Membership Purchase Price,
the annual fees payable to Wilmington Trust Company for acting as "Independent
Manager of Remainder Owner shall be adjusted as of 11:59 p.m. on the day
immediately preceding the Membership Closing Date, if any of the Guaranties is
then in effect,
4. Costs. Company shall pay any and all costs and fees associated with the
conveyance of the Membership Interests, including, without limitation, any and
all transfer taxes and all costs, expenses and fees, if any, incurred by or
payable to Lender.
5. Conditions to Closing. (a) Pursuant to that certain Consent, dated even
date herewith ("Lender's Consent"), a copy of which is attached hereto as
Schedule C, Lender has given its consent to the grant of the Membership Purchase
Option pursuant to this Agreement, and certain other transactions described
therein. It shall be a condition to Remeq's obligations hereunder that all
conditions provided in the Lender's Consent to the exercise of the Membership
Purchase Option shall have been satisfied.
3
(b) It shall be a condition to Closing that (i) if any of the
Guaranties is then in effect and has not been released by the Lender, the
limited liability company agreement of Remainderman shall be amended to appoint
Realty Holdings of America, LLC, a New York limited liability company ("RHA"),
the sole non-member manager of Remainderman and such other provisions,
substantially the same as the amendments to the limited liability company
agreement of Equity, entered into on or about the date hereof, as shall be
required by RHA, and (ii) guaranties relating to the Remainderman's Recourse
Guaranty and the Payment Guaranty (as it relates to the Remainderman) shall be
executed and delivered to the Guarantors by Presidio Capital Investment Company,
LLC, Northstar Capital Investment Corp., Northstar Partnership, L.P., Shelbourne
Properties I, Inc., Shelbourne Properties II, L.P. and Shelbourne Properties
III, Inc., substantially in the form of the guaranties executed by such entities
in connection with the consummation of the transaction contemplated by the
Purchase Agreement (as hereinafter defined).
(c) It shall be a condition to Closing that the representations and
warranties of Remeq set forth in Section 14 below shall be true and correct in
all material respects as of the Membership Closing Date. Remeq covenants that,
prior to the Outside Date, it will not take any voluntary affirmative action
that would cause the representations and warranties provided in clauses (d), (e)
and (h) through (k) of Section 14 to be untrue as of the Membership Closing
Date.
6. Assignment. Company shall have no right to assign any of its rights
hereunder except to an Approved Transferee (as defined in the Lender's Consent)
and provided that all conditions to such assignment provided in the Lender's
Consent shall have been satisfied. In the event the Membership Purchase Option
is assigned, transferred and/or conveyed in accordance herewith, Company shall
not be relieved of any of its obligations or liabilities hereunder. Any
attempted assignment made other than as permitted hereunder shall be null and
void.
7. Broker. The parties warrant and represent to each other that no broker
or finder brought about this Agreement. Company agrees to indemnify and hold
harmless Remainderman and Remeq from all claims for brokerage, agency, finder's
and similar fees claimed in connection with this Agreement and the transactions
contemplated hereby by any broker, agent, finder or other similar party with
whom Company dealt in connection with this Agreement and the transactions
contemplated hereby. Remeq agrees to indemnify and hold harmless Company from
all claims for brokerage, agency, finder's and similar fees claimed in
connection with this Agreement and the transactions contemplated hereby by any
broker, agent, finder or other similar party with whom Remainderman or Remeq
dealt in connection with this Agreement and the transactions contemplated
hereby.
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
4
9. Notices. All notices and other instruments given or delivered pursuant
to this Agreement shall be in writing, and the giving of such notice or other
communication shall be deemed to have been completed (a) when delivered by hand,
and (b) on the earlier of receipt or refusal by the addressee to accept delivery
after being sent by first class registered or certified mail, postage prepaid,
return receipt requested, or a nationally recognized overnight courier. Copies
of notices must be sent to all of the parties listed below. Each party shall
have the right to specify, from time to time, as its address for purposes of
this Agreement, any address and any addressee, in the continental United States,
upon giving fifteen (15) days written notice thereof to the other party;
provided, however, that the total number of parties to which notices must be
sent may not be increased. The addresses of the parties hereto for purposes of
this Agreement, until notice has been given as above provided, shall be as
follows:
Company: Xxxxxxxxxx XX LLC
c/o Shelbourne Properties
0 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
and Xxxxxxxxxx XX LLC
c/o Northstar Capital Investment Corp.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. XxXxxxxx
Xxxxxx X. Xxxxx
With a copy to: Post & Xxxxxxx, LLP
000 Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxx Xxxx 00000
Att: Xxxxx X. Xxxxxxx, Esq.
and Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
Remeq: Accotel Remainder Equity LLC
c/o U.S. Realty Advisors, LLC
29th Floor
1370 Avenue of the Americas
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxx
With a copy to: Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
5
10. Entire Agreement. This Agreement constitutes the entire understanding
between the parties with respect to the subject matter contemplated herein, and
this Agreement cannot be modified in any way except by written instrument signed
by Company, and Remeq.
11. Captions. The captions to the paragraphs are used for convenience only
and shall not be construed to modify, limit or expand any of the terms hereof or
otherwise affect the obligations of the parties hereto.
12. Successors and Assigns. Each of the covenants, provisions and
conditions of this Agreement shall apply to, be binding upon and inure to the
benefit of the parties hereto and their respective representatives, successors
and permitted assigns and all persons claiming by, under or through any of them.
13. Rule Against Perpetuities, Etc. If any option under this Agreement
would, in the absence of the limitation imposed by this Section 11, be invalid
or unenforceable as being in violation of the rule against perpetuities or any
other rule of law relating to the vesting of an interest in property or the
suspension of the power of alienation of property, then any option of Company
hereunder shall be exercisable by Company only during the period which shall
begin as of the date hereof and end 20 years and 6 months after the date of
death of the last survivor, alive on the date of the execution and delivery of
this Agreement, of the descendants of Xxxxxx X. Xxxxxxx, deceased father of the
late President Xxxx X. Xxxxxxx.
14. Remeq Representations and Warranties. Remeq represents and warrants to
Company that as of the date hereof:
(a) Remeq is a limited liability company, duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation.
(b) Remeq has all requisite power and authority to execute and
deliver this Agreement and to perform, carry out and consummate the transactions
contemplated to be consummated by it hereby, including the power and authority
to sell, transfer and convey the Membership Interests to be sold by it, subject
to Lender's Consent. The execution, delivery and performance of this Agreement
has been duly authorized by all necessary action of Remeq, including any
required approval of the members of Remeq. This Agreement constitutes the legal,
valid and binding obligations of Remeq, enforceable against Remeq in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency or similar laws and by equitable principles.
6
(c) There is no action, suit or proceeding before any court or
governmental or other regulatory or administrative agency, commission or
tribunal pending or, to the actual knowledge of Remeq, threatened against Remeq
or the Membership Interests to be sold by Remeq which, if determined adversely
to Remeq would reasonably be expected to interfere in any material respect with
the ability of Remeq to perform its obligations under this Agreement or
materially and adversely affect the value of the Membership Interests to be sold
by Remeq.
(d) At Closing, the Membership Interests to be sold by Remeq shall
be owned by Remeq and shall be free and clear of any lien, security interest or
encumbrance thereon. There are no rights, options or other agreements of any
kind to purchase, acquire, receive or issue any interest of Remeq in and to the
Membership Interests to be sold by it.
(e) Neither Remeq nor Remainderman has incurred any liabilities,
except for (i) its obligations under the Property Material Agreements (as
defined in that certain Purchase Agreement, dated as of even date herewith,
between Realty Holdings of America LLC, as seller, and Company, as purchaser
(the "Purchase Agreement")) to which it is a party and the Pledge and Security
Agreement (Remainderman's) (as defined in the Purchase Agreement), (ii) its
obligations under the organizational documents related to it, including any
agreement pursuant to which Wilmington Trust Company acts as an "Independent
Manager", (iii) obligations arising from or relating to the ownership of its
interests in any Property and, in the case of Remeq, obligations arising from or
relating to the ownership of its interest in Remainderman, (iv) its obligations
relating to the maintenance of its status as a Delaware limited liability
company and the maintenance of such company's qualifications to do business in
such other jurisdictions where it has qualified to do business, (v) obligations
arising under any matter appearing of record against any Property, (vi)
customary unsecured trade debt which will not exceed $1,000.00 as of the
Membership Closing Date (other than the fees referred to in clause (vii) of this
section), (vii) the obligation to pay fees to Wilmington Trust Company or any
successor Independent Manager of Remainderman, and (viii) the obligation to pay
fees to Corporation Services Company for acting as registered agent of
Remainderman and Remeq. Neither Remeq nor Remainderman owns any assets, except
(i) relating to the ownership of its interests in any Property (in the case of
Remainderman) and relating to the ownership of its interest in Remainderman (in
the case of Remeq), and (ii) bank accounts.
(f) Remainderman has been duly formed and is validly existing in
good standing under the laws of the State of Delaware and has the power and
authority to own all of its interests in the Properties.
(g) Remeq has been duly formed and is validly existing in good
standing under the laws of the State of Delaware and has the power and authority
to own all of its interest in Remainderman.
(h) Except as may be contained in the Property Material Agreements
and the Pledge and Security Agreement (Remainderman's), there are no existing
rights of first refusal to purchase or lease the remainder interest in the Land,
or written agreements to otherwise acquire an interest in the remainder interest
in the Land (subject to the existing state of title to the Land), granted by
Remeq.
7
(i) Remeq has delivered to Company true and complete copies of the
following organizational documents (as the same may have been amended to date),
which documents have not been modified, supplemented or amended (except as
indicated), and, to Remeq's actual knowledge, are in full force and effect:
(i) Certificate of Formation of Remainderman;
(ii) Limited Liability Company Agreement of Remainderman;
(iii) Certificate of Formation of Remeq;
(iv) Limited Liability Company Agreement of Remeq.
(j) Remainderman has legal title to its remainder interest in the
Land (subject to the existing state of title to the Land).
(k) Remeq has not filed any election to treat Remainderman or Remeq
as a corporation for federal income tax purposes.
(l) Neither Remeq nor Remainderman has received written notice of
any pending condemnation or eminent domain proceeding which would affect
Remainderman's remainder interest in the Land.
For purposes of this Section 14, references to "Remeq's actual knowledge"
or words of similar import shall mean the actual knowledge of Xxxxx X. Xxxx,
Xxxxx Xxxxxxx and Xxxxx Xxxxxxxx, two of whom are members of the Member Manager
of Remeq (collectively, the "Designated Parties"), and shall not be construed,
by imputation or otherwise, to impose upon the Designated Parties any duty to
investigate the matter with respect to which it has actual knowledge and no such
investigation shall be inferred. Company acknowledges that the Designated
Parties are Remeq's Parties (as defined in Section 16(b) hereof) and shall have
no personal liability hereunder. For purposes of this Section 14, references to
"written notice to Remeq or Remainderman" or words of similar import shall mean
written notice to Remeq or Remainderman, as the case may be, received by U.S.
Realty Advisors, LLC, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
With respect to a violation of a representation or warranty of Remeq
(whether contained in this Agreement or made pursuant hereto) or a breach of the
covenant contained in the last sentence of Section 5(c), discovered by Company
after the Closing, such representations, warranties and covenants of Remeq shall
survive the Closing for a period of six (6) months, subject to the terms of
Section 16.
15. "As Is" Sale. Remeq makes no representation or warranties with respect
to any matter whatsoever, including, without limitation, the Membership
Interests or the physical aspects and condition of the Land, except as expressly
set forth herein. Company shall accept the Membership Interests in their "as is"
condition and the Land in their "as is" condition and in an
8
"as is" state of repair. Company agrees that, except as expressly set forth
herein, Remeq shall not be bound in any manner whatsoever by any guarantees,
promises, projections, operating expenses, set-ups or other information
pertaining to the Membership Interests and the Land made, furnished or claimed
to have been made or furnished by Remeq or any other person or entity, or any
partner, employee, consultant, agent, attorney or other person representing or
purporting to represent Remeq whether verbally or in writing. Company
acknowledges that neither Remeq nor any of the employees, agents or attorneys of
Remeq have made and do not make any verbal or written representations or
warranties whatsoever to Company, whether express or implied, except as
expressly set forth in this Agreement, and, in particular, that no such
representations and warranties have been made with respect to any transaction
documents, the physical or environmental condition or operation of the Land, the
actual or projected revenue and expenses of the Land, or the zoning and other
laws, regulations and rules applicable to the Land. Company has not relied and
is not relying upon any representations or warranties other than the
representations and warranties expressly set forth in this Agreement, or upon
any statements made in any informational materials with respect to the
Membership Interests or the Land provided by Remeq or any other person or
entity, or any shareholder, employee, consultant, agent, attorney or other
person representing or purporting to represent Remeq.
16. Defaults/Non-Recourse.
(a) With respect to a violation of a representation by Remeq
contained herein or made pursuant hereto or a breach of the covenant of Remeq
contained in the last sentence of Section 5(c) hereof, subject to the limitation
of survival of representations, warranties and covenants set forth in Section 14
hereof, Company shall be entitled to commence an action to obtain actual damages
against Remeq; provided, however, that Remeq's liability hereunder shall in no
event exceed an amount equal to the Option Price and, if the Closing shall have
occurred, the Membership Purchase Price actually received by Remeq; provided,
further, however, in no event shall Company have the right to collect any
consequential, punitive or indirect damages from Remeq and Company waives any
and all such rights.
(b) Anything contained in this Agreement to the contrary
notwithstanding, no recourse shall be had for the payment of any sum due under
this Agreement, or for any claim based hereon or otherwise in respect hereof
against any members, directors, officers, employees, shareholders,
policyholders, partners, affiliates, trustees, administrators or agents of Remeq
or of any of the foregoing or the legal representative, heir, estate, successor
or assignee of any of the foregoing or against any other person, partnership,
corporation or trust, as principal of Remeq, whether disclosed or undisclosed
(collectively, "Remeq's Parties"). It is understood and agreed by the parties
that all of the obligations of Remeq under or with respect to this Agreement may
not be enforced against Remeq's Parties.
(c) In the event any of the conditions to Closing or to Remeq's or
Company's obligations hereunder are not satisfied on or before the Membership
Closing Date, then the sole remedy of Remeq or Company shall be to terminate
this Agreement upon the giving of written notice to the other party whereupon
this Agreement shall be terminated, and neither Remeq nor Company shall have any
obligations hereunder other than any obligations expressly stated to survive the
termination or expiration of this Agreement.
9
17. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall constitute an original, but all of which together shall
constitute one and the same instrument.
10
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first written above.
XXXXXXXXXX XX, LLC
By: Shelbourne Management LLC,
Its Manager
By:
------------------------------
Name:
Title:
ACCOTEL REMAINDER EQUITY LLC
By: U.S. Realty Advisors, LLC,
Its Member Manager
By:
------------------------------
Name:
Title:
Schedule A
[The Land]
Schedule B
ASSIGNMENT AND ASSUMPTION OF INTERESTS
ASSIGNMENT AND ASSUMPTION OF INTERESTS (this "Agreement"), dated as of the
day of ____________, 20__, by and between ACCOTEL REMAINDER EQUITY LLC, a
Delaware limited liability company ("Assignor"), as assignor, and XXXXXXXXXX XX,
LLC, a Delaware limited liability company ("Assignee"), as assignee.
W I T N E S S E T H :
WHEREAS, Assignor owns 100% of the membership interests in Accotel
Remainder LLC, a Delaware limited liability company (the "Company");
WHEREAS, Assignor and Assignee are entering into this Agreement to
evidence and confirm the transfer and assignment to Assignee, and assumption by
Assignee, of all of Assignor's right, title and interest in and to the Company,
including, without limitation, all of Assignor's membership interest and all
right, if any, to receive from the Company any certificate, option, right,
allocation, other distribution or other payment of any kind from the Company
attributable to such interests therein (collectively, the "Assigned Interests"),
all from and after the date hereof.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Assignor has bargained, and by these
presents does grant, transfer, assign and convey, unto Assignee, its successors
and assigns forever, all of Assignor's right, title and interest, legal and
equitable, in and to the Assigned Interests from and after the date hereof,
without representation or warranty, express or implied.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
FOREVER.
Assignee accepts such grant, transfer, assignment and conveyance of the
Assigned Interests and by these presents does assume all of the obligations of
Assignor attributable to the Assigned Interests to the extent arising from and
after the date hereof.
Assignor withdraws, and relinquishes any and all of its right, title and
interest, as a member of the Company, from and after the date hereof. Assignee
unconditionally and irrevocably consents to such withdrawal.
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by Assignor and Assignee, and their respective heirs, executors,
administrators, successors and assigns.
This Agreement, the rights and obligations of the parties hereto and any
claims or disputes relating to such rights and obligations shall be governed by
and construed in accordance with the internal laws (and not the law of
conflicts) of the State of New York. To the extent permitted by law, the parties
hereto unconditionally and irrevocably waive any right to assert that the law of
any other jurisdiction governs this Agreement.
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which shall constitute a single
instrument.
[END OF TEXT]
IN WITNESS WHEREOF, Assignor and Assignee have executed this Agreement as
of the date first set forth above.
ASSIGNOR:
ACCOTEL REMAINDER EQUITY LLC
By: U.S. Realty Advisors, LLC, its Member Manager
By:
-----------------------------------------
Name:
Title:
ASSIGNEE:
XXXXXXXXXX XX, LLC
By: Shelbourne Management LLC,
Its Manager
By:
-----------------------------------------
Name:
Title:
EXHIBIT A-3
ACCOTEL REMAINDER EQUITY LLC
c/o U.S. Realty Advisors, LLC
1370 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
January __, 2003
XXXXXXXXXX XX LLC
c/o NorthStar Capital Investment Corp.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
Reference is made to that certain Option Agreement (the "Agreement"),
dated as of the date hereof, by and between Accotel Remainder Equity LLC and
Xxxxxxxxxx XX LLC. Capitalized terms used and not otherwise defined herein shall
have the respective meanings ascribed to them in the Agreement.
Notwithstanding anything to the contrary contained in the Agreement, in
the event that the option granted pursuant to the Agreement shall not have been
exercised and Company desires to purchase Remeq's right, title and interest in
the Membership Interests after the Outside Date but prior to August 1, 2024,
Remeq agrees to sell and assign all of its right, title and interest in the
Membership Interests to Company or its designee on the same terms and conditions
as are set forth in the Agreement (except that the covenant contained in Section
5(c) of the Agreement shall not apply); provided however, that, as a condition
of Remeq's obligations to sell to Company the Membership Interests as provided
herein, (i) Company shall have complied with and satisfied all of the terms,
conditions and requirements with respect to such transfer provided in the Loan
Documents, including without limitation obtaining the consent of the Lender
thereto, and (ii) Company shall have caused Lender to indefeasibly terminate,
discharge and release all of the Guaranties. Company shall notify Remeq in
writing, in accordance with the notice provisions set forth in the Agreement, of
its desire to exercise its rights set forth herein not later than 30 days prior
to the date on which it desires to consummate the purchase and sale of the
Membership Interests.
This agreement shall be governed by and construed in accordance with the
laws of the State of New York.
Please sign this letter agreement below to confirm your agreement
herewith.
Very truly yours,
ACCOTEL REMAINDER EQUITY LLC,
a Delaware limited liability company
By: U.S. Realty Advisors, LLC, its Member Manager
By:
---------------------------------
Name:
Title:
AGREED:
XXXXXXXXXX XX LLC,
a Delaware limited liability company
----------------------------
Name:
Title:
The undersigned, as the Member-Manager of Remeq, joins in this letter agreement
for the purpose of guarantying the performance by Remeq of its obligations under
this letter agreement, subject to all the conditions set forth herein.
U.S. REALTY ADVISORS, LLC
By:
---------------------------------
Name:
Title:
EXHIBIT B-1
Delaware
------------------------------
The First State
I, XXXXXXX XXXXX WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
FORMATION OF "XXXXXXXXXX XX LLC", FILED IN THIS OFFICE ON THE NINTH DAY OF
JANUARY, A.D. 2003, AT 9:45 O'CLOCK A.M.
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:45 am 01/09/2003
030015587-3612479
CERTIFICATE OF FORMATION
OF
XXXXXXXXXX XX LLC
1. The name of the limited liability company is Xxxxxxxxxx XX LLC,
2. The address of its registered office in the State of Delaware is c/o
Corporation Service Company, 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxx
Xxxxxx Xxxxxx, Xxxxxxxx 00000. The name of its registered agent at such address
is Corporation Service Company.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation of Xxxxxxxxxx XX LLC this 8th day of January, 2003.
/s/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx,
Authorized Person
000 Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxx Xxxx 00000
EXHIBIT B-2
LIMITED LIABILITY COMPANY AGREEMENT
OF
XXXXXXXXXX XX LLC
THIS LIMITED LIABILITY COMPANY AGREEMENT (the "Agreement") of
Xxxxxxxxxx XX LLC (the "Company") is made as of January __, 2003, by and among
Shelbourne Properties I, L.P., a Delaware limited partnership, Shelbourne
Properties II, L.P., a Delaware limited partnership, Shelbourne Properties III,
L.P., a Delaware limited partnership (collectively, the "Members"); Shelbourne
Management Company LLC, a Delaware limited liability company (the "Manager");
and Shelbourne Properties I, Inc., a Delaware corporation, Shelbourne Properties
II, Inc., a Delaware corporation, Shelbourne Properties III, Inc., a Delaware
corporation (collectively, the "Special Manager").
In consideration of the covenants and conditions set forth in this
Agreement, the parties agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following respective meanings:
1.1 Additional Capital Contributions: The meaning set forth in Section
4.2(b) hereof.
1.2 Capital Contributions: The capital contributions of the Members made
pursuant to Section 4.2.
1.3 Code: The Internal Revenue Code of 1986, as amended from time to time,
or any similar Federal internal revenue law enacted in substitution for the
Code.
1.4 Company Law: Delaware Limited Liability Company Act, as amended from
time to time.
1.5 Delaware Act: The Delaware Limited Liability Company Act, 6 Del. X.xx.
18-101, et seq., as amended from time to time.
1.6 Distributions: Any distributions of cash or other assets of the
Company to the Members.
1.7 Manager: Shelbourne Management Company LLC.
1.8 New Indebtedness: The meaning set forth in the Restructuring
Agreement.
1.9 New Property: The meaning set forth in the Restructuring Agreement.
1.10 New Transaction: The meaning set forth in the Restructuring
Agreement.
1.11 Ownership Percentages: Each Member's Ownership Percentage shall be
the percentage set forth on Schedule 1 hereto. Neither the Manager nor the
Special Manager shall be entitled to receive or be allocated any share of the
distributions or profits or losses of the Company, and its Ownership Percentage
shall be zero (0%) percent.
1.12 Person: An individual, trust, estate, partnership, joint venture,
association, company, corporation or other entity.
1.13 Profit and Loss: "Profit" or "Loss" means, for any fiscal year of the
Company, the taxable income or taxable loss of the Company for federal income
tax purposes.
1.14 Restructuring Agreement: That certain Agreement, dated as of January
15, 2003, among the Members, the Manager, the Special Manager and certain other
entities.
1.15 Special Manager: Shelbourne Properties I, Inc., Shelbourne Properties
II, Inc. and Shelbourne Properties III, Inc.
ARTICLE 2
GENERAL PROVISIONS
2.1 Acts of Formation. The Members hereby form the Company as a limited
liability company under and pursuant to the provisions of the Delaware Act and
agree that the rights, duties and liabilities of the Members shall be as
provided in the Delaware Act, except as otherwise provided herein. Upon the
execution of this Agreement, the Members shall be members of the Company. Xxxxx
X. Xxxxxxx, as an authorized person within the meaning of the Delaware Act,
shall execute and deliver and file a Certificate of Formation with the Secretary
of State of the State of Delaware.
2.2 Further Action. The Manager shall take any and all action, as may be
required, from time to time, under the laws of the State of Delaware, to give
effect to, and continue in good standing, the Company.
2.3 Name of the Company. The name of the Company shall be Xxxxxxxxxx XX
LLC, or such other name as the Manager may from time to time determine. The
Manager shall have the right to cause the Company to operate under one or more
assumed names where required to comply with the laws of any states in which the
Company is doing business.
2.4 Business of the Company; Restructuring Agreement Restrictions. The
business of the Company shall be to: (i) directly or indirectly through one or
more intermediaries acquire, own, hold, sell, transfer or hypothecate direct or
indirect interests in certain property, (ii) make, enter into, perform and carry
out any arrangements, contracts or agreements consistent with the foregoing, and
(iii) to do any and all things necessary or incidental to any of the foregoing
to carry out and further the business of the Company as contemplated by this
Agreement. The Company shall not engage in any business or activity not
authorized by this Agreement.
2.5 Place of Business; Registered Agent. The Company's principal place of
business is c/o NorthStar Capital Investment Corp., 000 Xxxxxxx Xxxxxx, 00xx
Xxxxx Xxx Xxxx, Xxx Xxxx 00000 or such other place as the Manager may, from time
to time, determine. The Company's registered agent in Delaware shall be
Corporation Service Company, 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxx
Xxxxxx Xxxxxx, Xxxxxxxx 00000. Such office and registered agent may be changed
from time to time in accordance with the Delaware Act, as may be approved the
Manager.
2
2.6 Duration of the Company. The Company shall commence upon the filing of
a Certificate of Formation for the Company in accordance with the Delaware Act,
and shall continue until December 31, 2075, unless dissolved at an earlier date
in accordance with Article 8 of this Agreement.
2.7 Title to Company Property. A Member's interest in the Company shall
for all purposes be personal property. All property owned by the Company,
whether real or personal, tangible or intangible, shall be owned by the Company
as an entity, and no Member, individually, shall have any ownership interest in
that property.
ARTICLE 3
MANAGEMENT
3.1 Management of the Company. The overall management and control of the
business and affairs of the Company shall be vested in the Manager and, to the
extent provided in Section 3.3 hereof, the Special Manager. Except as otherwise
provided herein, no Member shall have any rights with respect to the management
or control of the Company.
3.2 Authority of the Manager. Except as otherwise expressly provided in
this Agreement, all decisions with respect to any matter set forth in this
Agreement or otherwise affecting or arising out of the conduct of the business
of the Company shall be made by the Manager subject to the restrictions provided
in the Restructuring Agreement and the Manager agrees to be bound by such
restrictions. With respect to all of its rights, powers and responsibilities
under this Agreement, the Manager is authorized to execute and deliver, in the
name and on behalf of the Company, such agreements, documents and certificates
as the Manager deems proper, all on such terms and conditions as the Manager
deems necessary or appropriate for the purposes of the Company. Any removal or
replacement of the Manager shall require the prior written consent of the
Manager.
3.3 Authority of Special Manager. Notwithstanding any power, authority or
rights granted to the Manager or the Members hereunder, the Special Manager
shall have the rights, powers and authority provided for in Section 5(b) of the
Restructuring Agreement. With respect to the rights, powers and authority
granted to the Special Manager in accordance with the immediately preceding
sentence, the Special Manager is authorized to execute and deliver, in the name
and on behalf of the Company, such agreements, documents and certificates as the
Special Manager deems proper, all on such terms and conditions as the Special
Manager deems necessary or appropriate for the purposes of exercising such
rights, powers and authority. The Special Manager shall have no other rights,
powers or authority with respect to the Company other than as set forth in this
Section, Section 3.5 and Section 4.2. Any removal or replacement of the Special
Manager shall require the unanimous consent of the Members. Notwithstanding any
provision of this Agreement to the contrary, the Special Manager shall have no
right, power or authority to take any action or cause the Company to take any
action, and shall not take any affirmative action or cause the Company to take
any affirmative action, that could give rise to any liability or obligation for
payment under the NorthStar Guarantee (as defined in the Restructuring
Agreement).
3
3.4 Services of the Manager. The Manager shall devote such time and effort
to the business of the Company as the Manager shall reasonably deem necessary to
promote adequately the interests of the Company and the mutual interests of the
Members; however, it is specifically understood and agreed that the Manager and
its Affiliates shall not be required to devote full time to the business of the
Company and that the Manager and its Affiliates may at any time and from time to
time engage in and possess interests in other business ventures of any and every
type and description, including, without limitation, the ownership, operation,
financing and management of real estate, interests in real estate or real
estate-related securities, independently or with others, and neither the Company
nor any Member shall by virtue of this Agreement or otherwise have any right,
title or interest in or to such independent ventures.
3.5 Liability and Indemnification. (a) To the fullest extent permitted by
applicable law, the Manager, the Special Manager, the employees, agents and
attorneys of the Company, each Member, each Member's, the Manager's and each
Special Manager's respective Affiliates, and their respective stockholders,
directors, officers, employees, servants, attorneys and agents and the officers
of the Company (each, an "Indemnitee") shall each be indemnified and held
harmless by the Company from and against any damages, losses, penalties, fines,
settlement payments, obligations, liabilities, claims, actions and causes of
action (actual or threatened, matured or unmatured, known or unknown, contingent
or otherwise) and costs and expenses suffered, sustained, incurred or required
to be paid by any Indemnitee, including without limitation, any costs of
investigation and attorneys' or experts' fees and disbursements, based upon or
arising from any and all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative which arise primarily out of or relate
primarily to the operations of the Company after the date hereof, in which the
Indemnitee may be involved, or threatened to be involved, as a party,
irrespective of whether the Indemnitee continues to be the Manager, the Special
Manager, or an employee, agent or attorney of the Company or a Member or an
Affiliate, stockholder, employee, servant, attorney or agent of a Member or of
the Manager or Special Manager or an officer of the Company at the time any such
obligation, liability or expense is paid or incurred, if (i) the Indemnitee
acted in good faith and in a manner it reasonably believed to be in, or not
opposed to, the best interests of the Company, and, with respect to any criminal
proceeding, had no reasonable cause to believe its conduct was unlawful, and
(ii) the Indemnitee's conduct did not constitute fraud, gross negligence or
willful or wanton misconduct. The termination of any third-party action, suit or
proceeding by order, settlement, or upon a plea of nolo contendere, or its
equivalent, shall not, of itself, create a presumption that the Indemnitee acted
in a manner contrary to that specified in clauses (i) or (ii) above.
(b) To the fullest extent permitted by applicable law, reasonable
expenses (including attorneys' and experts' fees and disbursements) incurred by
an Indemnitee in defending any claim, demand, action, suit or proceeding subject
to this Section shall, from time to time, be advanced by the Company prior to
the final disposition of such claim, demand, action, suit or proceeding upon
receipt by the Company of an undertaking by or on behalf of the Indemnitee to
repay such amount unless it shall be determined that such person is not entitled
to be indemnified as authorized in this Section.
4
(c) The indemnification provided by this Section shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, vote of the Members, as a matter law or otherwise, both as to action
in the Indemnitee's capacity as the Manager or Special Manager or an employee,
agent or attorney of the Company, a Member, an Affiliate, stockholder, director,
officer, employee, servant, attorney or agent of the Manager or Special Manager
or a Member or as officer of the Company, or in any other capacity, and shall
continue as to an Indemnitee who has ceased to serve in such capacity and shall
inure to the benefit of the heirs, successors, assigns and administrators of
such Indemnitee.
(d) All indemnifications set forth in this Section 3.5 shall be paid
out of, and shall be limited to, the assets of the Company and shall otherwise
be non-recourse as to any Member.
ARTICLE 4
CAPITAL CONTRIBUTIONS
4.1 Capital. The capital of the Company shall consist of the amounts
contributed to the Company pursuant to this Article 4.
4.2 Capital Contributions. (a) The Members have previously contributed to
the capital of the Company the amounts set forth on the books and records of the
Company. Said capital has been (or shall be deemed to have been) contributed pro
rata by the Members in accordance with their respective Ownership Percentages.
(b) At such time or times as the Special Manager shall determine
that additional Capital Contributions ("Additional Capital Contributions") are
required pursuant to the provisions of the Restructuring Agreement, the Special
Manager shall deliver to each Member a notice (the "Capital Call") setting forth
the total amount of the Additional Capital Contributions to be made to the
Company (the "Capital Call Amount") and the expected use for such Additional
Capital Contributions. Within five days of receipt of the Capital Call, each
Member shall make an Additional Capital Contribution to the Company in an amount
equal to the product of (1) such Member's Ownership Percentage and (2) the
Capital Call Amount.
(c) Except as set forth in this Section 4.2, no additional Capital
Contributions shall be required of any Member.
4.3 Capital Accounts. (a) The Manager shall cause to be kept for each
Member a capital account ("Capital Account") in accordance with Treasury
Regulation 1.704-1(b)(2)(iv).
(b) No interest shall be paid by the Company on any Capital
Contribution. A Member shall not be entitled to demand the return of, or to
withdraw, any part of his Capital Contribution or any balance in his Capital
Account, or to receive any distribution, except as provided for in this
Agreement. No Member shall be liable for the return of the Capital Contributions
of any other Member and no Member shall have any obligation to restore the
amount of any deficit in its Capital Account to the Company.
5
ARTICLE 5
DISTRIBUTIONS; ALLOCATION INCOME AND LOSSES
5.1 Distributions. The timing and amount of all distributions shall be in
the sole discretion of the Manager, provided that all distributions shall be
made to the Members in proportion to their Ownership Percentages.
5.2 Allocations of Profit and Loss. Profit and Loss for each fiscal year
of the Company shall be allocated among the Members in proportion to their
Ownership Percentages.
ARTICLE 6
BOOKS AND RECORDS; ACCOUNTS
6.1 Books and Records. True and correct books of account with respect to
the operations of the Company shall be kept at the principal place of business
of the Company. The Manager shall be responsible for keeping the books of
account.
6.2 Accounting Basis and Fiscal Year. The Company's books shall be kept on
the accrual method of accounting. The fiscal year of the Company shall be the
calendar year.
6.3 Tax Matters Member. The Manager is hereby designated the "Tax Matters
Member" pursuant to Section 6231 of the Code (and any comparable provision of
applicable state and local tax laws).
ARTICLE 7
ASSIGNABILITY OF INTERESTS; ADDITIONAL MEMBERS
7.1 Transfer by a Member. No Member shall have the right to Transfer all
or any portion of his interest in the Company without the prior written consent
of the other Members.
7.2 Other Transfers Void. Any transfer made in violation of the provisions
of this Article 7 shall be null and void and shall not bind the Company or any
Member.
ARTICLE 8
DISSOLUTION, LIQUIDATION AND TERMINATION
8.1 Events of Dissolution. The Company shall be dissolved upon the
happening of any of the following events:
(a) The disposition of all or substantially all of the assets of the
Company;
(b) The unanimous vote of the Members to dissolve the Company;
(c) The entry of a decree of judicial dissolution under Section
18-802 of the Delaware Act; and
(d) The expiration of its term.
6
Dissolution of the Company shall be effective on the day the event occurs
giving rise to the dissolution, but the Company shall not terminate until the
Certificate of Formation of the Company has been canceled and the assets of the
Company have been distributed as provided herein.
8.2 Limited Return of Capital Contributions Upon Dissolution. Each Member
shall look solely to the assets of the Company for all distributions with
respect to the Company and its Capital Contribution, and shall have no recourse
therefor (upon dissolution or otherwise) against any Member. Notwithstanding the
dissolution of the Company, the business of the Company and the affairs of the
Members, as such, shall continue to be governed by this Agreement until
termination of the Company, as provided in this Agreement. Upon dissolution of
the Company, the Manager, or a liquidator (who may be a Member) appointed by the
Manager, shall liquidate the assets of the Company, apply and distribute the
proceeds thereof as contemplated by this agreement and cause the cancellation of
the Company's Certificate of Formation.
8.3 Distributions Upon Liquidation. (a) Upon dissolution of the Company,
the Manager, or a liquidator appointed pursuant to Section 8.2, shall liquidate
the assets of the Company as promptly as is consistent with obtaining the fair
value thereof, and apply and distribute the proceeds thereof:
(i) First, to creditors, in the order of priority provided by law;
(ii) Second, to the establishment of any reserves for contingencies
which the Manager (or the liquidator) may consider necessary; and
(iii) The balance, if any, to the Members in proportion to their
Ownership Percentages.
(b) Notwithstanding the foregoing, in the event the Manager (or
liquidator) shall determine that an immediate sale of part or all of the Company
assets would cause undue loss to the Members, the Manager (or liquidator), in
order to avoid such loss, may, after giving notice to all the Members, to the
extent not then prohibited by the limited partnership law of any jurisdiction in
which the Company is then formed or qualified and applicable in the
circumstances, defer liquidation of and withhold from distribution for a
reasonable time any assets of the Company except those necessary to satisfy the
Company's debts and obligations.
(c) After the proceeds of the liquidation of the assets of the
Company have been distributed (which shall occur as soon as practical), the
Manager (or liquidator) shall cause the Certificate of Formation of the Company
to be cancelled.
8.4 Final Accounting. Upon the dissolution of the Company a proper
accounting shall be made by the Company's independent public accountants from
the date of the last previous accounting to the date of dissolution.
7
ARTICLE 9
MISCELLANEOUS
9.1 Notices. Any notices, elections or demands permitted or required to be
made under this Agreement shall be in writing, signed by the party giving such
notice, election or demand and shall be deemed to have been given (i) when
personally delivered with signed delivery receipt obtained, (ii) when
transmitted by facsimile machine to the appropriate Member at facsimile number
(000) 000-0000 with printed confirmation of successful transmission to the
appropriate Member being obtained by the sender from the sender's facsimile
machine, or (iii) three business days after such notice has been deposited in
the United States first class mail if sent postage prepaid by registered or
certified mail, return receipt requested, in each case addressed to the party at
the address set forth on the books and records of the Company or at such other
address as such party may notify the other party and the Company pursuant to the
terms of this Section 9.1.
9.2 Successors and Assigns. Subject to the restrictions on transfer set
forth in this Agreement, this Agreement, and each provision of this Agreement,
shall be binding upon and shall inure to the benefit of the Members, their
respective successors, successors-in-title, heirs and permitted assigns, and
each successor-in-interest to any Member, whether such successor acquires such
interest by way of gift, purchase, foreclosure or by any other method, shall
hold such interest subject to all of the terms and provisions of this Agreement.
9.3 Power of Attorney. (a) The Members hereby constitute and appoint the
Manager and, if a liquidator (other than the Manager) shall have been selected
pursuant to Section 8.2, the liquidator, severally and, if applicable, each of
their authorized officers and attorneys-in-fact, with full power of
substitution, as their true and lawful agent and attorney-in-fact, with full
power and authority in their name, place and xxxxx, to execute, swear to,
acknowledge, deliver, file and record in the appropriate public offices all
certificates, documents and other instruments (including without limitation,
this Agreement and the Certificate of Formation and all amendments or
restatements thereof) that the Manager or the liquidator deems necessary or
appropriate solely for the purpose of forming, qualifying or continuing the
existence or qualification of the Company as a limited liability company in the
State of Delaware, and in all other jurisdictions in which the Company may
conduct business or own property, to exercise the authority granted to the
Manager pursuant to this Agreement and the Restructuring Agreement or to reflect
or to effect, in accordance with its terms: (i) any amendment, change,
modification or restatement of this Agreement in accordance with the terms of
this Agreement, (ii) the dissolution of the Company in accordance with the terms
of this Agreement or (iii) the admission, withdrawal or substitution of any
Member to or from the Company in accordance with the terms of this Agreement.
With respect to matters on which this Agreement expressly provides for the vote,
consent or approval of the Members, the Manager or the liquidator may exercise
the power of attorney made in this Section only after the necessary vote,
consent or approval of the Members.
(b) The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, and it shall survive and not
be affected by the subsequent dissolution, bankruptcy or termination of a Member
and the transfer of all or any portion of such Member's interest in the Company
and shall extend to such Member's successors and assigns.
9.4 Amendments. This Agreement may be amended only by a written document
approved and duly executed by all of the Members, except that, any amendment to
Section 3.3 or Section 3.5 shall also require the written consent of the Special
Manager.
9.5 Partition. No Member or any successor-in-interest to any Member shall
have the right while this Agreement remains in effect to have any Company assets
partitioned, and each Member, on behalf of itself, its successors,
representatives, heirs and assigns, hereby waives any such right. It is the
intention of the Members that during the term of this Agreement the rights of
the Members and their successors-in-interest, as among themselves, shall be
governed by the terms of this Agreement, and that the rights of any Member or
successor-in-interest to assign, transfer, sell or otherwise dispose of any
interest in the Company shall be subject to the limitations and restrictions of
this Agreement.
8
9.6 No Waiver. The failure of any Member to insist upon strict performance
of a covenant under this Agreement or of any obligation under this Agreement,
irrespective of the length of time for which such failure continues, shall not
be a waiver of that Member's right to demand strict compliance in the future. No
consent or waiver, express or implied, to or of any breach or default in the
performance of any obligation under this Agreement shall constitute a consent or
waiver to or of any other breach or default in the performance of the same or
any other obligation under this Agreement. No waiver or consent shall be
effective unless in writing.
9.7 Entire Agreement. This Agreement constitutes the full and complete
agreement of the parties to this Agreement with respect to the subject matter of
this Agreement.
9.8 Captions. The titles or captions of Articles or Sections contained in
this Agreement are inserted only as a matter of convenience and for reference,
are not a part of this Agreement, and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any provision of this
Agreement.
9.9 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall for all purposes constitute one
agreement, binding on all the Members, notwithstanding that all Members have not
signed the same counterpart.
9.10 Separability. In case any of the provisions contained in this
Agreement or any application of any of those provisions shall be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this Agreement and other
applications of those provisions shall not in any way be affected or impaired
thereby.
9.11 Gender. Words used herein, regardless of the gender specifically
used, shall be deemed and construed to include any other gender, masculine,
feminine or neuter, as the context shall require.
9.12 Applicable Law. This Agreement and the rights and obligations of the
parties under this Agreement shall be governed by and interpreted, construed and
enforced in accordance with the law of the State of Delaware applicable to
agreements made and to be performed in the State of Delaware.
9
SIGNATURE PAGE TO
LIMITED LIABILITY COMPANY AGREEMENT
OF
XXXXXXXXXX XX LLC
IN WITNESS WHEREOF, this Agreement has been executed as of the date and
year first set forth above.
SHELBOURNE PROPERTIES I, X.X. XXXXXXXXXX MANAGEMENT COMPANY LLC
By: SHELBOURNE PROPERTIES I GP, LLC,
its General Partner
By: SHELBOURNE PROPERTIES I, INC., By: PRESIDIO CAPITAL INVESTMENT
its Sole Member COMPANY, LLC, its Sole Member
By: By:
--------------------------------- -------------------------------
Name: Name:
Title: Title:
SHELBOURNE PROPERTIES II, X.X. XXXXXXXXXX PROPERTIES I, INC.
By: SHELBOURNE PROPERTIES II GP, LLC, By:
its General Partner -------------------------------
By: SHELBOURNE PROPERTIES II, INC., Name:
its Sole Member Title:
By:
---------------------------------
Name:
Title:
SHELBOURNE PROPERTIES III, X.X. XXXXXXXXXX PROPERTIES II, INC.
By: SHELBOURNE PROPERTIES III GP, INC., By:
its General Partner -------------------------------
By: SHELBOURNE PROPERTIES III, INC., Name:
its Sole Member Title:
By:
---------------------------------
Name:
Title:
SHELBOURNE PROPERTIES III, INC.
By:
-------------------------------
Name:
Title:
SCHEDULE 1
OWNERSHIP PERCENTAGES
Shelbourne Properties I, L.P. 32.51%
Shelbourne Properties II, L.P. 40.60%
Shelbourne Properties III, L.P. 26.89%
Shelbourne Management Company LLC 0%
Shelbourne Properties I, Inc. 0%
Shelbourne Properties II, Inc. 0%
Shelbourne Properties III, inc. 0%
2
EXHIBIT C
PURCHASE AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of January ___, 2003, between
REALTY HOLDINGS OF AMERICA, LLC, a New York limited liability company
("Seller"), having an address at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, and XXXXXXXXXX XX, LLC, a Delaware limited liability company
("Purchaser"), having an address c/o NorthStar Capital Investment Corp., 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
RECITALS:
A. Seller owns a 91.26586% percentage equity interest (the "Seller
Interest") in Accotel Equity Investors LLC, a Delaware limited liability company
("Equity"), and the remaining 8.73414% percentage equity interest (the "Other
Interest" and, together with the Seller Interest, the "Sale Assets") in Equity
is owned by Xxxxxx X. Xxxxxx (the "Other Member");
B. Equity is the sole member of Accotel Property Investors LLC, a Delaware
limited liability company (the "EFY Owner");
C. The EFY Owner owns an estate for years in the parcels of land described
in Schedule A hereto (the "Land") and fee title to the improvements situated
thereon (the Land and the improvements situated thereon are collectively, the
"Properties"), subject to the Mortgages (as hereinafter defined), the Net Lease
(as hereinafter defined) and other exceptions to title;
D. Purchaser desires to acquire from Seller, and Seller desires to sell to
Purchaser, the Sale Assets, in accordance with and subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, Seller and Purchaser agree as
follows:
ARTICLE I
Definitions
The following capitalized terms used in this Agreement shall have the
meanings ascribed to them below:
1
"Asset Management Agreement" shall have the meaning given such term in
Section 2.06 of this Agreement.
"Assignment of Master Lease and Guaranty" shall mean the Assignment of
Master Lease and Guaranty dated as of July 30, 1999 between EFY Owner and
Lender, as supplemented by Assignment of Master Lease and Guaranty dated as of
October __, 1999 between EFY Owner and Lender.
"Assignment of Master Lease and Guaranty Consent Agreement" shall mean the
Assignment of Master Lease and Guaranty Consent Agreement dated as of July 30,
1999 among Lessee, EFY Owner and Lender, as amended by First Amendment of
Assignment of Master Lease and Guaranty Consent Agreement dated as of October 5,
1999 among Lessee, EFY Owner and Lender.
"Assignment" shall have the meaning set forth in Section 2.03(b) of this
Agreement.
"Closing" shall have the meaning set forth in Section 2.03(a) of this
Agreement.
"Closing Date" shall have the meaning set forth in Section 2.03(a) of this
Agreement.
"Collateral Assignment of Agreements" means the Collateral Assignment of
Agreements, Permits and Contracts, dated as of July 30, 1999, by EFY Owner for
the benefit of Lender, as supplemented by Reaffirmation of Collateral Assignment
of Agreements, Permits and Contracts, dated as of October 5, 1999, between EFY
Owner and Lender.
"Designated Parties" shall have the meaning given such term in Section
3.01 of this Agreement.
"EFY Owner" shall have the meaning given such term in the Recitals of this
Agreement.
"Equity" shall have the meaning given such term in the Recitals of this
Agreement.
"Guarantor" shall mean Accor S.A.
"Guaranty of Recourse Obligations (Owner's)" shall mean the Guaranty of
Recourse Obligations dated as of July 30, 1999 by AP/RH Holdings LLC, Xxxxxxx X.
Xxxx, Xxxxx X. Xxxx, Xxxxxx X. Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxxx X. Xxxxx and Xxxx
Xxxxxxx in favor of Lender, as supplemented by Reaffirmation to Guaranty of
Recourse Obligations (Owner) dated as of October 5, 1999 by AP/RH Holdings LLC,
Xxxxxxx X. Xxxx, Xxxxx X. Xxxx, Xxxxxx X. Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxxx X.
Xxxxx and Xxxx Xxxxxxx in favor of Lender.
"Guaranty of Recourse Obligations (Remainderman's)" shall mean the
Guaranty of Recourse Obligations dated as of July 30, 1999 by AP/RH Holdings
LLC, Xxxxxxx X. Xxxx, Xxxxx X. Xxxx, Xxxxxx X. Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxxx
X. Xxxxx and Xxxx Xxxxxxx in favor of Lender, as supplemented by Reaffirmation
to Guaranty of Recourse Obligations (Owner) dated as of October 5, 1999 by AP/RH
Holdings LLC, Xxxxxxx X. Xxxx, Xxxxx X. Xxxx, Xxxxxx X. Xxxxxx, Xxxxx Xxxxxxx,
Xxxxxxxx X. Xxxxx and Xxxx Xxxxxxx in favor of Lender.
2
"Guaranty of Payment" shall mean the Guaranty of Payment dated as of July
30, 1999 by AP/RH Holdings LLC, Xxxxxxx X. Xxxx, Xxxxx X. Xxxx, Xxxxxx X.
Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxxx X. Xxxxx and Xxxx Xxxxxxx in favor of Lender, as
amended by First Amendment to and Reaffirmation of Guaranty of Payment dated as
of October 5, 1999 by AP/RH Holdings LLC, Xxxxxxx X. Xxxx, Xxxxx X. Xxxx, Xxxxxx
X. Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxxx X. Xxxxx and Xxxx Xxxxxxx in favor of Lender.
"Lender" shall mean Berkshire Hathaway Credit Corporation.
"Lessee" shall mean Universal Commercial Credit Leasing VI, Inc.
"Loan Agreement" shall mean the Loan Agreement, dated as of July 30, 1999,
by and between EFY Owner and Lender, as amended and restated by the Amended and
Restated Loan Agreement dated as of October 5, 1999 between EFY Owner and
Lender.
"Material Organizational Documents" shall mean, collectively, the
following documents, as the same may have been amended to date or may hereafter
be amended:
(a) Certificate of Formation of EFY Owner;
(b) Limited Liability Company Agreement of EFY Owner;
(c) Certificate of Formation of Equity; and
(d) Limited Liability Company Agreement of Equity.
"Mortgage" shall mean the Indenture of Mortgage, Deed of Trust, Security
Agreement, Fixture Filing, Financing Statement and Assignment of Rents and
Leases dated as of July __, 1999, affecting the Properties, from EFY Owner and
Remainder Owner in favor of Lender or a trustee for the benefit of Lender, as
amended by First Amendment to Indenture of Mortgage, Deed of Trust, Security
Agreement, Fixture Filing, Financing Statement and Assignment of Rents and
Leases dated as of October 5, 1999, affecting the Properties, from EFY Owner and
Remainder Owner in favor of Lender or a trustee for the benefit of Lender.
"Net Lease" shall mean the Lease Agreement, dated as of July 30, 1999, by
and between EFY Owner and Lessee, demising the Properties, as amended by First
Amendment to Lease Agreement, dated as of October 5, 1999, by and between EFY
Owner and Lessee.
"Net Lease Guaranty" shall mean the Lease Guaranty, dated as of July 30,
1999, from Guarantor in favor of EFY Owner, as amended by First Amendment to and
Reaffirmation of Lease Guaranty, dated as of October 5, 1999, from Guarantor in
favor of EFY Owner.
"Note" shall mean the Promissory Note, dated July 30, 1999, from EFY Owner
in favor of Lender, in the amount of $73,720,000, as amended by First Amendment
to Promissory Note, dated as of October 5, 1999, between EFY Owner and Lender,
which inter alia increases the amount thereof to $77,270,000.
3
"Other Interest" shall have the meaning given such term in the Recitals of
this Agreement.
"Other Member" shall have the meaning given such term in the Recitals of
this Agreement.
"Option and Subordination Agreements" shall mean the nineteen separate
Option and Subordination Agreements, each dated as of July 30, 1999, by and
between Remainder Owner and EFY Owner, together with the Option and
Subordination Agreement, dated as of October 5, 1999, by and between Remainder
Owner and EFY Owner.
"Outside Date" shall have the meaning set forth in Section 2.03(a) of this
Agreement.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, estate, trust, unincorporated association, any
federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
"Pledge and Security Agreement (Owner's)" shall mean the Pledge and
Security Agreement dated as of July 30, 1999, by Equity for the benefit of
Lender, together with the Agreement and Acknowledgement of Pledge (Owner's)
dated July 30, 1999 by EFY Owner, as supplemented by the Reaffirmation of Pledge
and Security Agreement (Owner's) and Agreement and Acknowledgement of Pledge,
dated as of October 5, 1999, between Equity, EFY Owner and Lender.
"Pledge and Security Agreement (Remainderman's)" shall mean the Pledge and
Security Agreement dated as of July 30, 1999 by Accotel Remainder Equity LLC for
the benefit of Lender, together with the Agreement and Acknowledgement of Pledge
(Remainderman's) dated July 30, 1999 by Remainder Owner, as supplemented by the
Reaffirmation of Pledge and Security Agreement (Remainderman's) and Agreement
and Acknowledgement of Pledge, dated as of October 5, 1999, between Accotel
Remainder Equity LLC, Remainder Owner and Lender.
"Properties" shall mean the parcels of land described in Schedule A hereto
and the improvements situated thereon.
"Property Material Agreements" shall mean, collectively, the following
agreements affecting the Properties as of the date hereof, as the same may
hereafter be amended:
(i) the Net Lease;
(ii) the Net Lease Guaranty;
(iii) the Sublease;
(iv) the Sublease Assignment;
(v) the Sublease Consent;
(vi) the Purchase and Sale Agreement;
(vii) the Loan Agreement;
(viii) the Note;
4
(ix) the Mortgage;
(x) the Assignment of Master Lease and Guaranty;
(xi) the Assignment of Master Lease and Guaranty Consent
Agreement;
(xii) the Collateral Assignment of Agreements;
(xiii) the Guaranty of Recourse Obligations (Owner's);
(xiv) the Guaranty of Recourse Obligations (Remainderman's);
(xv) the Guaranty of Payment;
(xvi) the Pledge and Security Agreement (Owner's);
(xvii) the Option and Subordination Agreements;
(xviii) the Tripartite Agreement; and
(xix) the Title Policies.
"Purchase and Sale Agreement" shall mean the Agreement of Purchase and
Sale, dated as of July 30, 1999, between Sublessee and EFY Owner.
"Purchase Price" shall have the meaning given such term in Section 2.02 of
this Agreement.
"Purchaser" shall have the meaning given such term in the Preamble of this
Agreement.
"Purchaser's Closing Costs" shall have the meaning given such term in
Section 2.04(b) of this Agreement.
"Purchaser Closing Documents" shall have the meaning given such term in
Section 3.02(b) of this Agreement.
"Remainder Owner" shall mean Accotel Remainder LLC, a Delaware limited
liability company.
"Sale Assets" shall have the meaning given such term in the Recitals of
this Agreement.
"Seller" shall have the meaning given such term in the Preamble of this
Agreement.
"Seller Closing Documents" shall have the meaning given such term in
Section 3.01(b) of this Agreement.
"Seller's Closing Costs" shall have the meaning given such term in Section
2.04(a) of this Agreement.
"Seller Interest" shall have the meaning given such term in the Recitals
of this Agreement.
"Seller's Parties" shall have the meaning given such term in Section
2.05(b)(iv) of this Agreement.
5
"Sublease" shall mean the Sublease Agreement, dated as of July 30, 1999,
between Lessee and Sublessee, as amended by First Amendment to Sublease
Agreement, dated as of October 5, 1999, between Lessee and Sublessee.
"Sublease Assignment" shall mean the Assignment of Master Sublease, dated
as of July 30, 1999, between Lessee and EFY Owner, as supplemented by Assignment
of Master Sublease, dated as of October 5, 1999, between Lessee and EFY Owner.
"Sublease Consent" shall mean the Sublease Consent, dated as of July 30,
1999, among Sublessee, Lessee, EFY Owner and Lender, as amended by First
Amendment to Sublease Consent, dated as of October 5, 1999, among Sublessee,
Lessee, EFY Owner and Lender.
"Sublessee" shall mean Motel 6 Operating L.P.
"Title Policies" shall mean the title insurance policies obtained by EFY
Owner in connection with the acquisition of its interests in the Properties.
"Tripartite Agreements" shall mean the nineteen separate Tripartite
Agreements each dated as of July 30, 1999 by and among Lessee, Remainder Owner
and EFY Owner, together with the Tripartite Agreement dated as of October 5,
1999 by and among Lessee, Remainder Owner and EFY Owner.
"USRA" shall have the meaning given such term in Section 2.06 of this
Agreement.
"Wilmington" shall mean Wilmington Trust Company.
ARTICLE II
Agreement to Sell and Purchase;
Terms of Sale and Purchase
2.01. Agreement to Sell and Purchase. In consideration of the mutual
covenants and agreements set forth herein and upon and subject to the terms,
provisions and conditions of this Agreement, Seller agrees to sell, assign,
transfer and convey to Purchaser, and Purchaser agrees to purchase and acquire
from Seller, all of Seller's right, title and interest in the Sale Assets.
(Purchaser acknowledges that Seller does not presently own the Other Interest,
but must acquire it on or before the Closing Date.)
2.02. Purchase Price; Prorations. (a) The purchase price payable by
Purchaser to Seller for the Sale Assets shall be Two Million Six Hundred
Fifty-Three Thousand and 00/100 Dollars ($2,653,000.00) (the "Purchase Price"),
payable on the Closing Date by wire transfer of immediately available United
States federal funds to the account or accounts designated by Seller. Any wire
transfer on the Closing Date shall be made by 11:00 A.M., New York City time, on
such date.
6
(b) Purchaser acknowledges that the Properties are net leased to
Lessee pursuant to the Net Lease and that the Basic Rent (as defined in the Net
Lease) is paid directly by Lessee to the Lender and applied to debt service due
to Lender pursuant to the Note. On the Closing Date, Seller and Purchaser shall
prorate net cash flow payments, such that, there shall be an adjustment in favor
of Purchaser in an amount equal to (i) the difference between the Basic Rent
paid under the Net Lease for the month in which the Closing Date occurs and the
debt service paid under the Note for the month immediately preceding the month
in which the Closing Date occurs, multiplied by (ii) a fraction, the numerator
of which is the number of days from and after the Closing Date through the last
day of the month in which the Closing occurs and the denominator of which is the
total number of days in the month in which the Closing occurs. It is the
intention of the parties to adjust only the net cash flow after payment of debt
service. In addition, on the Closing Date, the annual fees payable to Wilmington
Trust Company for acting as "Independent Manager" of EFY Owner shall be adjusted
as of 11:59 p.m. on the day immediately preceding the Closing Date. There shall
be no other prorations or adjustments. Purchaser acknowledges that neither any
bank accounts maintained by Equity or EFY Owner nor any funds therein will
become the property of, be transferred to, or become under the control of, the
Purchaser upon the Closing.
(c) It is understood that Purchaser is purchasing the Sale Assets
subject to the obligation of EFY Owner to pay the Note and subject to the
obligations of EFY Owner and Equity under the Net Lease, the Note, the Mortgage
and all other Property Material Agreements, which obligations shall survive the
purchase by Purchaser. Purchaser further acknowledges that the Mortgage requires
the consent of Lender for Purchaser to purchase the Sale Assets. Accordingly,
Purchaser agrees at its sole cost and expense, to exercise commercially
reasonable efforts (including, without limitation, providing such opinions of
counsel as may be required by Lender in accordance with the Mortgage) to obtain
Lender's consent to the purchase of the Sale Assets by Purchaser in accordance
with the conditions and obligations set forth in Section 2.16 of the Mortgage
and in any other of the related loan documents. Purchaser shall pay all expenses
(including, without limitation, all servicing fees and charges) which may be
incurred or imposed by Lender in connection with seeking such consent (which
obligation shall survive the Closing or, in the alternative, the termination of
this Agreement).
2.03. The Closing.
(a) The consummation of the sale and purchase of the Sale Assets
contemplated by this Agreement (the "Closing") shall take place at the offices
of Xxxxxxxxx Xxxx XXX, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx or at such other
location in New York City as shall be mutually acceptable to the parties, at
12:00 p.m., New York City time on the date which is five days following the date
upon which Lender's consent is obtained (or if such date is not a business day,
the next succeeding business day), or such earlier date as may be mutually
acceptable to the parties (the "Closing Date"); provided, however, in no event
shall the Closing Date occur later than January 31, 2003 (the "Outside Date").
(b) On the Closing Date, Seller shall sell, assign, transfer and
convey to Purchaser all of Seller's right, title and interest in and to the Sale
Assets by delivery to Purchaser of an instrument of assignment in the form
annexed hereto as Schedule C ( the "Assignment"), and Purchaser shall pay to
Seller the Purchase Price therefor as contemplated by Section 2.02 hereof.
7
2.04. Closing Costs.
(a) In connection with the conveyance of the Sale Assets by Seller
to Purchaser (whether or not the Closing shall occur), Seller shall pay
("Seller's Closing Costs"): (i) the fees and expenses of Seller's legal counsel,
(ii) the cost of obtaining such good standing certificates as are required to be
delivered by Seller pursuant to Section 5.03(e) of this Agreement, (iii)
one-half of all fees and costs charged by Wilmington or its counsel in
connection with the transactions contemplated herein, and (iv) $3,000.00 of the
costs of obtaining Lender's consent to the transfer of the Sale Assets.
(b) In connection with the conveyance of the Sale Assets by Seller
to Purchaser (whether or not the Closing shall occur), Purchaser shall pay
("Purchaser's Closing Costs"): (i) all costs associated with its due diligence,
including the costs of any inspections, studies, surveys, analysis and tests of
the Properties, (ii) the fees and expenses of Purchaser's legal counsel, (iii)
all costs of obtaining Lender's consent to the transfer of the Sale Assets
including, without limitation, all servicing fees and charges, processing and
rating agency fees payable to Lender, and any fees and disbursements of Lender's
attorneys, in excess of the amount that Seller is obligated to pay pursuant to
Section 2.04 (a)(iv), (iv) one-half of all fees and costs charged by Wilmington
or its counsel in connection with the transactions contemplated herein, and (v)
all other costs and expenses arising in connection with the transactions
contemplated by this Agreement, other than the costs and expenses that are
Seller's responsibility pursuant to Section 2.04(a) hereof.
(c) The provisions of this Section 2.04 shall survive the Closing.
2.05. Defaults/Non-Recourse.
(a) With respect to a violation of a representation by Seller
contained herein or made pursuant hereto discovered by Purchaser after the
Closing, subject to the limitation of survival of a representation set forth in
Section 3.01 hereof, Purchaser shall be entitled to commence an action to obtain
actual damages against Seller; provided, however, that Seller's liability
hereunder shall in no event exceed an amount equal to the Purchase Price
actually received by Seller less Seller's Closing Costs; provided, further,
however, in no event shall Purchaser have the right to collect any
consequential, punitive or indirect damages from Seller and Purchaser waives any
and all such rights.
(b) Anything contained in this Agreement to the contrary
notwithstanding, no recourse shall be had for the payment of any sum due under
this Agreement, or for any claim based hereon or otherwise in respect hereof
against any members, directors, officers, employees, shareholders,
policyholders, partners, affiliates, trustees, administrators or agents of
Seller or of any of the foregoing or the legal representative, heir, estate,
successor or assignee of any of the foregoing or against any other person,
partnership, corporation or trust, as principal of Seller, whether disclosed or
undisclosed (collectively, "Seller's Parties"). It is understood and agreed by
the parties that all of the obligations of Seller under or with respect to this
Agreement may not be enforced against Seller's Parties.
8
2.06. Asset Management Agreement. On the Closing Date, Purchaser shall
cause Equity and EFY Owner to enter into that certain Asset Management Agreement
with U.S. Realty Advisors, LLC ("USRA") in the form attached hereto as Schedule
D (the "Asset Management Agreement"). Performance of the obligations of EFY
Owner and Equity under the Asset Management Agreement shall be secured by an
irrevocable letter of direction to Lender with respect to payment of any cash
flow, in a form acceptable to USRA.
2.07. Amended Limited Liability Company Agreement. On the Closing Date,
Purchaser shall enter into an Amended and Restated Limited Liability Company
Agreement of Equity, in the form attached hereto as Schedule E (the "Amended LLC
Agreement").
ARTICLE III
Representations and Warranties
3.01. Seller Representations and Warranties. Seller represents and
warrants to Purchaser that as of the date hereof:
(a) Seller is a limited liability company, duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation.
(b) Seller has all requisite power and authority to execute and
deliver this Agreement and all documents, certificates, agreements, instruments
and writings it is required to deliver hereunder (collectively, the "Seller
Closing Documents"), and to perform, carry out and consummate the transactions
contemplated to be consummated by it hereby and thereby, including the power and
authority to sell, transfer and convey the Sale Assets to be sold by it,
provided Lender has consented to such transactions and Seller has acquired the
Other Interest. The execution, delivery and performance of this Agreement and
the other Seller Closing Documents have been duly authorized by all necessary
action of Seller, including any required approval of the members of Seller. This
Agreement does, and when executed by Seller, the other Seller Closing Documents
shall, constitute the legal, valid and binding obligations of Seller,
enforceable against Seller in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, insolvency or similar laws and
by equitable principles.
(c) There is no action, suit or proceeding before any court or
governmental or other regulatory or administrative agency, commission or
tribunal pending or, to the actual knowledge of Seller, threatened against
Seller or the Sale Assets to be sold by Seller which, if determined adversely to
Seller would reasonably be expected to interfere in any material respect with
the ability of Seller to perform its obligations under this Agreement or
materially and adversely affect the value of the Sale Assets to be sold by
Seller.
9
(d) Seller has delivered to Purchaser true and complete copies of
the Property Material Agreements.
(e) Except as may be contained in the Property Material Agreements,
there are no existing rights of first refusal to purchase or lease the
Properties, or written agreements to otherwise acquire an interest in the
Properties (subject to the existing state of title to the Properties), granted
by Seller.
(f) Seller has not entered into any leases for the Properties or any
of them other than the Net Lease.
(g) Seller has not received written notice of any uncured default
from any of (i) Lessee under the Net Lease, (ii) Guarantor under the Net Lease
Guaranty, (iii) Lender under the Mortgage, or (iv) Lessee, Guarantor or Lender
under any other Property Material Agreements.
(h) Seller has delivered to Purchaser true and complete copies of
the Material Organizational Documents, such Material Organizational Documents
have not been modified, supplemented or amended, and, to Seller's actual
knowledge, the Material Organizational Documents are in full force and effect.
(i) At Closing, the Sale Assets to be sold by Seller shall be free
and clear of any lien, security interest or encumbrance thereon. There are no
rights, options or other agreements of any kind to purchase, acquire, receive or
issue any interest of Seller in and to the Sale Assets to be sold by it.
(j) EFY Owner has legal title to its interest in the Properties,
subject to the existing state of title to such Properties.
(k) Seller has not filed any election to treat EFY Owner or Equity
as a corporation for federal income tax purposes.
(l) None of Seller, Equity or EFY Owner have received written notice
of any pending condemnation or eminent domain proceeding which would affect any
Property.
(m) Neither Equity nor EFY Owner has incurred any liabilities,
except for (i) its obligations under the Property Material Agreements to which
it is party, (ii) its obligations under the Material Organizational Documents
related to it, (iii) obligations arising from or relating to the ownership of
its interests in any Property and, in the case of Equity, obligations arising
from or relating to the ownership of its interest in EFY Owner, (iv) its
obligations relating to the maintenance of its status as a Delaware limited
liability company and the maintenance of such company's qualifications to do
business in such other jurisdictions where it has qualified to do business, (v)
obligations arising under any matter appearing of record against any Property,
(vi) customary unsecured trade debt which will not exceed $1,000.00 as of the
Closing Date (other than the fees referred to in clause (vii) of this section),
(vii) the obligation to pay fees to Wilmington or any successor Independent
Manager of EFY Owner, and (viii) the obligation to pay fees to Corporation
Services Company for acting as registered agent of EFY Owner and Equity. Neither
Equity nor EFY Owner owns any assets, except (i) relating to the ownership of
its interests in any Property (in the case of EFY Owner) and relating to the
ownership of its interest in EFY Owner (in the case of Equity), and (ii) bank
accounts.
10
(n) EFY Owner has been duly formed and is validly existing in good
standing under the laws of the State of Delaware and has the power and authority
to own all of its interests in the Properties.
(o) Equity has been duly formed and is validly existing in good
standing under the laws of the State of Delaware and has the power and authority
to own all of its interest in EFY Owner.
(p) Actual out-of-pocket costs and expenses paid by Seller in
connection with the ownership of its interest in Equity (excluding costs or
expenses that (i) are the obligation of the tenant under the Lease Agreement or
(ii) were paid in connection with the initial closing or the subsequent closing
involving the acquisition of EFY Owner's interest in the Properties, the
financing thereof and the leasing thereof) have not exceeded $10,000 in the
aggregate in any calendar year, and Seller has no actual knowledge of any
existing fact or condition that would cause a material increase in such costs
and expenses.
For purposes of this Section 3.01, references to a "Seller's actual
knowledge" or words of similar import shall mean the actual knowledge of Xxxxx
X. Xxxx, Xxxxx Xxxxxxx and Xxxxx Xxxxxxxx, two of whom are members of the
Managing Member of Equity (collectively, the "Designated Parties"), and shall
not be construed, by imputation or otherwise, to impose upon the Designated
Parties any duty to investigate the matter with respect to which it has actual
knowledge and no such investigation shall be inferred. Purchaser acknowledges
that the Designated Parties are Seller's Parties (as defined in Section 2.05(b)
hereof) and shall have no personal liability hereunder. For purposes of this
Section 3.01, references to "written notice to Seller, Equity and EFY Owner" or
words of similar import shall mean written notice to Seller, Equity or EFY
Owner, as the case may be, received by U.S. Realty Advisors, LLC, 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
With respect to a violation of a representation or warranty of Seller
(whether contained in this Agreement or made pursuant hereto) discovered by
Purchaser after the Closing, such representations and warranties of Seller shall
survive the Closing for a period of six (6) months, subject to the terms of
Section 2.05(b).
3.02. Purchaser Representations and Warranties. Purchaser represents and
warrants to Seller that as of the date hereof:
(a) Purchaser is a limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation.
(b) Purchaser has all requisite power and authority to execute and
deliver this Agreement and all documents, certificates, agreements, instruments
and writings it is required to deliver hereunder, if any (collectively, the
"Purchaser Closing Documents"), and to perform, carry out and consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the other Purchaser Closing Documents have
been duly authorized by all necessary corporate action on the part of Purchaser.
This Agreement does, and when executed by Purchaser, the other Purchaser Closing
Documents shall, constitute the legal, valid and binding obligations of
Purchaser enforceable against Purchaser in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency or
similar laws and by equitable principles.
11
(c) There is no action, suit or proceeding before any court or
governmental or other regulatory or administrative agency, commission or
tribunal pending or, to the best knowledge of Purchaser, threatened against
Purchaser which, if determined adversely to Purchaser, could reasonably be
expected to interfere in any material respect with the ability of Purchaser to
perform its obligations under this Agreement.
(d) Purchaser has such knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of its
investment in Equity and it is purchasing such interest for investment for its
own account with no present intention of distributing such investment or any
interest therein.
With respect to a violation of a representation or warranty of Purchaser
(whether contained in this Agreement or made pursuant hereto) discovered by
Seller after the Closing, such representations and warranties of Purchaser shall
survive the Closing for a period of six (6) months.
ARTICLE IV
Conditions
4.01. Seller's Conditions. The obligation of Seller under this Agreement
to consummate the transactions contemplated hereby shall be subject to the
satisfaction of all the following conditions, any one or more of which may be
waived in writing by Seller:
(a) Seller shall have received payment of the Purchase Price, in
accordance with Section 2.02 of this Agreement.
(b) Purchaser shall have delivered all of the documents and other
items described in Section 5.01.
(c) The representations and warranties of Purchaser set forth in
Section 3.02 above shall be true and correct in all material respects.
(d) Lender shall have consented to the transfer of the Sale Assets
contemplated by this Agreement. Purchaser acknowledges that obtaining Lender's
consent will require Purchaser's cooperation. In connection therewith, Purchaser
shall, at its sole cost and expense, and shall cause its affiliates and
employees to promptly, (i) provide such information, (ii) execute and deliver
such certificates, instruments and agreements, (iii) deliver acceptable legal
opinions, addressed to Lender and any applicable rating agencies, including,
without limitation, tax, bankruptcy and substantive non-consolidation opinions,
and (iv) take such other actions, as may be requested by Seller, Lender and/or
the rating agencies (including any of the foregoing actions as may be requested
by Seller as may be necessary to satisfy the requirements in the Mortgage).
12
4.02. Purchaser's Conditions. The obligation of Purchaser under this
Agreement to consummate the transactions contemplated hereby shall be subject to
the satisfaction of all of the following conditions, any one or more of which
may be waived in writing by Purchaser:
(a) Seller shall have delivered all of the documents and other items
described in Section 5.02.
(b) Seller shall have acquired the Other Interest.
(c) The representations and warranties of Seller set forth in
Section 3.01 above shall be true and correct in all material respects, except
for any matters that are Lessee's responsibility under the Net Lease.
(d) Lender shall have consented to the transfer of the Sale Assets
contemplated by this Agreement.
(e) Lender shall have accepted from Purchaser or its designee a
"bottom tier" guaranty in an amount not to exceed $57,000,000 and on such other
terms and conditions as Purchaser or its designee shall determine.
4.03. Remedy Upon Failure of Condition. In the event any of the conditions
to Seller's or Purchaser's obligations to consummate the transactions
contemplated by this Agreement set forth in this Section 4 are not satisfied on
or before the Closing Date, then the sole remedy of Purchaser or Seller shall be
to terminate this Agreement upon the giving of written notice to the other party
whereupon this Agreement shall be terminated, and neither Seller nor Purchaser
shall have any further obligations hereunder other than any obligations
expressly stated to survive the termination or expiration of this Agreement.
4.04. "As Is" Sale. Seller makes no representation or warranties with
respect to any matter whatsoever, including, without limitation, the Sale Assets
or the physical aspects and condition of the Properties, except as expressly set
forth herein. Purchaser shall accept the Sale Assets in their "as is" condition
and the Properties in their "as is" condition and in an "as is" state of repair.
Purchaser agrees that, except as expressly set forth herein, Seller shall not be
bound in any manner whatsoever by any guarantees, promises, projections,
operating expenses, set-ups or other information pertaining to the Sale Assets
and Properties made, furnished or claimed to have been made or furnished by
Seller or any other person or entity, or any partner, employee, consultant,
agent, attorney or other person representing or purporting to represent Seller
whether verbally or in writing. Purchaser acknowledges that neither Seller nor
any of the employees, agents or attorneys of Seller have made and do not make
any verbal or written representations or warranties whatsoever to Purchaser,
whether express or implied, except as expressly set forth in this Agreement,
and, in particular, that no such representations and warranties have been made
with respect to any transaction documents, the physical or environmental
condition or operation of the Properties, the actual or projected revenue and
expenses of the Properties, or the zoning and other laws, regulations and rules
applicable to the Properties. Purchaser has not relied and is not relying upon
any representations or warranties other than the representations and warranties
expressly set forth in this Agreement, or upon any statements made in any
informational materials with respect to the Sale Assets or the Properties
provided by Seller or any other person or entity, or any shareholder, employee,
consultant, agent, attorney or other person representing or purporting to
represent Seller.
13
ARTICLE V
Closing Deliveries
5.01. Purchaser's Closing Deliveries. At or prior to the Closing,
Purchaser shall make or cause to be made the following deliveries:
(a) Purchaser shall have executed and delivered to Seller the
Assignment.
(b) Purchaser shall have delivered to Seller evidence as to the
authority of the person or persons executing documents on behalf of Purchaser.
(c) Purchaser shall have executed and delivered, or caused to be
executed and delivered, the Amended LLC Agreement.
(d) Purchaser shall have caused Equity and EFY Owner to execute and
deliver to USRA the Asset Management Agreement and such other agreements as may
be required pursuant to Section 2.06 of this Agreement.
5.02. Seller's Closing Deliveries. At or prior to the Closing, Seller
shall make or cause to be made the following deliveries:
(a) Seller shall have executed and delivered to Purchaser the
Assignment.
(b) Seller shall have executed and delivered to Purchaser a
certificate of "non- foreign person" status that meets the requirements of
Section 1445 of the Internal Revenue Code of 1986, as amended.
(c) Seller shall have delivered to Purchaser the original or
certified copies of the Material Organizational Documents.
(d) Seller shall have delivered to Purchaser the original or
certified copies of the Property Material Documents.
(e) Seller shall have delivered to Purchaser evidence as to the
authority of the person or persons executing the Seller Closing Documents on
behalf of Seller together with evidence of good standing of EFY Owner and Equity
in their respective jurisdictions of formation and such other jurisdictions
where they have qualified to do business.
14
(f) Seller shall have delivered to Purchaser an estoppel certificate
executed by Lessee substantially in the form attached as Schedule F-1 hereto and
an estoppel certificate executed by Guarantor substantially in the form attached
as Schedule F-2; hereto; provided, however, that a failure to deliver such
estoppel certificate to Purchaser shall not constitute a default by Seller or
refusal by Seller to perform its obligations in accordance with this Agreement
but instead shall constitute a failure to satisfy a condition pursuant to
Section 4.02 hereof.
(g) Seller shall have delivered to Purchaser the consent of Lender
to the transfer of the Sale Assets; provided, however, that a failure to deliver
such consent shall not constitute a default by Seller or a refusal by Seller to
perform its obligations in accordance with this Agreement but instead shall
constitute a failure to satisfy a condition pursuant to Section 4.02 hereof.
(h) Seller shall deliver to Wilmington a notice with respect to the
transfer of the Sale Assets.
(i) Seller shall deliver to Corporation Services Company a notice
with respect to the transfer of the Sale Assets.
(j) Seller shall have caused USRA to execute and deliver to EFY
Owner and Equity the Asset Management Agreement.
5.03. Consent of Seller to Purchaser. Seller, as Member Manager of Equity,
hereby consents, in accordance with Section 22 of the Limited Liability Company
Agreement of Equity, dated as of June 2, 1999, by and between Seller and Xxxxxx
X. Xxxxxx, to the transactions contemplated by this Agreement all upon the terms
and conditions set forth herein and to the transfer of the Other Interest to
Seller prior to the Closing hereunder.
ARTICLE VI
Miscellaneous
6.01. Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally, by overnight courier, or by facsimile transmission to the parties at
the following addresses or facsimile numbers:
If to Seller, to:
c/o U.S. Realty Advisors, LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xx. Xxxxx X. Xxxx
15
with a copy, which shall not constitute notice, to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxx, Esq.
If to Purchaser, to:
c/o NorthStar Capital Investment Corp.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. XxXxxxxx, Xxxxxx X. Xxxxx
Facsimile No.:(000)000-0000
with a copy, which shall not constitute notice, to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: 000 000-0000
Attn: Xxxxxxxx X. Xxxxxxx, Esq.
and
Post & Xxxxxxx, LLP
000 Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx, Esq.
All such notices, requests and other communications will (i) if delivered
personally or by overnight courier to the address as provided in this Section,
be deemed given upon delivery, and (ii) if delivered by facsimile transmission
to the facsimile number as provided in this Section, be deemed given upon
receipt. Any party from time to time may change its address, facsimile number or
other information for the purpose of notices to that party or copies of notices
by giving notice specifying such change to the other parties hereto.
6.02. Broker. (a) Seller represents and warrants that neither Seller nor
any of its affiliates or any of their respective directors, officers, partners,
managers or members have dealt with anyone acting as broker, finder, financial
advisor or in any similar capacity in connection with this Agreement or any of
the transactions contemplated hereby. Seller shall indemnify, defend and hold
harmless Purchaser from any and all claims, actions, liabilities, losses,
damages and expenses, including reasonable attorneys' fees and disbursements,
which may be asserted against or incurred by Purchaser arising from a breach of
Seller's representation contained in this Section 6.02(a).
16
(b) Purchaser represents and warrants that neither Purchaser nor any
of its affiliates or any of their respective directors, officers, partners,
managers or members have dealt with anyone acting as broker, finder, financial
advisor or in any similar capacity in connection with this Agreement or any of
the transactions contemplated hereby. Purchaser shall indemnify, defend and hold
harmless Seller from any and all claims, actions, liabilities, losses, damages
and expenses, including reasonable attorneys' fees and disbursements, which may
be asserted against or incurred by Seller arising from a breach of Purchaser's
representation contained in this Section 6.02(b).
6.03. Entire Agreement. This Agreement, including all schedules and
exhibits hereto, the Seller Closing Documents and the Purchaser Closing
Documents supersede all prior discussions and agreements between the parties
with respect to the subject matter hereof and thereof, and contain the sole and
entire agreement between the parties hereto with respect to the subject matter
hereof and thereof.
6.04. Waiver. Any term or condition of this Agreement may be waived at any
time by the party that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in written instrument duly executed by or on
behalf of the party waiving such term or condition. No waiver by any party of
any term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion. All remedies, either under this
Agreement or by applicable law or otherwise afforded, will be cumulative and not
alternative.
6.05. Modification. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
6.06. Successors and Assigns. The terms and provisions of this Agreement
are intended solely for the benefit of each party hereto and their respective
successors or permitted assigns, and it is not the intention of the parties to
confer third-party beneficiary rights upon any other person. Subject to the
terms of Section 6.10 hereof, this Agreement is binding upon, inures to the
benefit of and is enforceable by the parties hereto and their respective
successors and assigns.
6.07. Interpretation. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, valid or unenforceable provision or by its
severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
17
6.08. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to a contract
executed and performed in such State, without giving effect to the conflicts of
laws principles thereof.
6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.10. Assignment. Purchaser shall not assign or transfer its rights or
obligations under this Agreement without the prior written consent of Seller,
which consent may be granted or denied in Seller's sole discretion.
Notwithstanding the foregoing, Purchaser shall have the right, without Seller's
consent, to assign this Agreement to any affiliate of Purchaser controlled by
Purchaser, provided such assignee agrees to assume, pursuant to an instrument
acceptable to Seller, the obligations of Purchaser hereunder. No assignment of
this Agreement by Purchaser shall relieve the Purchaser named herein of its
obligations hereunder and, subsequent to any such assignment, the liability of
such named Purchaser hereunder shall continue notwithstanding any subsequent
modification or amendment hereof or the release of any subsequent purchaser
hereunder from any liability, to all of which Purchaser consents in advance.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
18
IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered this
Agreement as of the day and year first above written.
SELLER:
REALTY HOLDINGS OF AMERICA, LLC
By:
----------------------------------
Name:
Title:
PURCHASER:
XXXXXXXXXX XX, LLC
By: Shelbourne Management LLC,
its manager
By:
----------------------------------
Name:
Title:
SCHEDULE A
Dothan, AL
Douglas, AZ
Casa Grande, AZ
Woodland, CA
Vacaville, CA
Tracy, CA
Davis, CA
Corona, CA
Bakersfield, (E) CA
Valjo Mrwl, E CA
Anaheim, CA
Chgo-Shlr Pk, IL
Louivl-Jefsn, IN
Fargo (W), ND
Las Cruces, NM
Tucumcari, NM
Muskogee, OK
Eug-Sprngfld, OR
Sioux Falls, SD
Centralia, WA
EXHIBIT D
FORECLOSURE GUARANTY
THIS FORECLOSURE GUARANTY ("Agreement") is made as of January ___,
2003, by and between PRESIDIO CAPITAL INVESTMENT COMPANY LLC, a Delaware limited
liability company (the "PCIC"), having an address at c/o NorthStar Partnership,
L.P., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and ACCOTEL PROPERTY
INVESTORS LLC, a Delaware limited liability company (the "Company"), having an
address at c/o Xxxx-xxxxxx Management LLC, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 to BERKSHIRE HATHAWAY CREDIT CORPORATION, a Nebraska corporation
("Lender"), having an address at 0000 Xxxxxx Xxxxx, Xxxxx, Xxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, Lender is the holder of a certain mortgage loan with a
current outstanding principal balance of $74,221,000 (the "Loan") to the
Company, which loan is evidenced by that certain Promissory Note, dated July 30,
1999, from the Company in favor of Lender, in the principal amount of
$73,720,000, as amended by First Amendment to Promissory Note, dated as of
October 5, 1999, between the Company and Lender, which, among other things,
increased the principal amount of the Loan to $77,270,000 (as amended, the
"Promissory Note");
WHEREAS, PCIC is acquiring indirectly a beneficial interest in the
Company;
WHEREAS, PCIC expects to derive substantial economic benefits from
the Loan;
WHEREAS, PCIC has agreed to deliver this Agreement to Lender in
connection with its acquisition of its indirect beneficial interest in the
Company;
WHEREAS, PCIC intends that 32.51% of any payments made by PCIC
pursuant to this Foreclosure Guaranty shall be made as a partner of Shelbourne
Properties I, L.P., 40.60% of any payments made by PCIC pursuant to this
Foreclosure Guaranty shall be made as a partner of Shelbourne Properties II,
L.P., and 26.89% of any payments made by PCIC shall be made as a partner of
Shelbourne Properties III, L.P.; and
WHEREAS, Lender has agreed to accept this Agreement in connection
with the acquisition by PCIC of an indirect beneficial interest in the Company.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, PCIC and Lender do hereby covenant and agree as follows:
1. Loan Documents. The Company represents and warrants that a true,
correct and complete list of all of the documents evidencing and securing the
Loan is set forth on Exhibit A attached hereto (the "Loan Documents") and that
the Company has provided to PCIC true, correct and complete copies of each of
the Loan Documents.
2. Guaranty. Subject to the terms and conditions of this Agreement,
PCIC hereby irrevocably and unconditionally guarantees the collection by Lender
following the foreclosure of all of the documents securing the Loan
(collectively, the "Security Instruments"), the exercise of the power of sale
thereunder and/or the delivery by the Company to Lender of a deed to the
property and collateral secured thereby (collectively, the "Collateral") in lieu
of foreclosure or power of sale, an amount equal to $54,264,000 minus the amount
of any Foreclo-sure Proceeds. PCIC's obligations above set forth in this
Paragraph 2 are hereinafter referred to as the "Guaranteed Obligations."
3. Foreclosure Proceeds.
(a) For the purposes of this Agreement, the term "Foreclosure
Proceeds" shall have the applicable meaning set forth below with respect to the
Collateral:
(i) In the event that at least one bona fide third party
unrelated to Lender (and including, without limitation, PCIC) bids for any
portion of the Collateral at a sale thereof conducted upon foreclosure of the
Security Instruments or exercise of the power of sale thereunder, Foreclosure
Proceeds shall mean the highest amount bid for such Collateral by the party
which acquires title thereto (directly or through a nominee) at or pursuant to
such sale. For the purposes of determining such highest bid, amounts bid for
such Collateral by Lender shall be taken into account notwithstanding the fact
that such bids may constitute credit bids which are offset against the amount
due to Lender under the Loan Documents.
(ii) In the event that there is no such unrelated third party
at such sale of any portion of the Collateral so that the only bidder at the
sale is Lender or its designee, the Foreclosure Proceeds shall be deemed to be
the fair market value (the "Fair Market Value") of such Collateral as of the
date of the foreclosure sale, as such Fair Market Value shall be mutually agreed
upon by Lender and PCIC or determined pursuant to subparagraph 3(b).
(iii) In the event that Lender receives and accepts a deed to
any portion of the Collateral in lieu of foreclosure in partial satisfaction of
the Company's obligations under the Loan Documents, the Foreclosure Proceeds
shall be deemed to be the Fair Market Value of such Collateral as of the date of
delivery of the deed-in-lieu of foreclosure, as such Fair Market Value shall be
mutually agreed upon by Lender and PCIC or determined pursuant to subpara-graph
3(b).
(b) Fair Market Value of any portion of the Collateral shall be the
price at which a willing seller not compelled to sell would sell such
Collateral, and a willing buyer not compelled to buy would purchase such
Collateral, free and clear of all Security Instruments, but subject to all
leases and reciprocal easement and operating agreements. If Lender and PCIC are
unable to agree upon the Fair Market Value of any portion of the Collateral in
accordance with subparagraphs 3(a)(ii) or 3(a)(iii) above, as applicable, within
twenty (20) days after the date of the foreclosure sale or the delivery of the
deed-in-lieu of foreclosure as applicable, relating to such Collateral, either
party may have the Fair Market Value of such Collateral determined by
2
appraisal by appointing an appraiser having the qualifications set forth below
to determine the same and by notifying the other party of such appointment
within twenty (20) days after the expiration of such twenty (20) day period. The
other party shall have the right, during the twenty (20) day period following
such other party's receipt of notice from the first party as to the first
party's appointment of a qualified appraiser, to appoint a second appraiser
having the qualifications set forth below to jointly determine the Fair Market
Value of such Collateral with the appraiser appointed by the first party. If
however, the other party shall fail to so notify the first party, within twenty
(20) days after the other party's receipt of notice of such appointment by the
first party, of the appointment by the other party of an appraiser having the
qualifications set forth below, the appraiser appointed by the first party shall
alone make the determination of such Fair Market Value. Appraisers appointed by
the parties shall be members of the Appraisal Institute (MAI) and shall have at
least ten (10) years' experience in the valuation of properties similar to the
applicable property or collateral in the greater metropolitan area in which such
Collateral is located and shall have reasonable knowledge of the material facts
related to the Collateral subject to the appraisal. If each party shall appoint
an appraiser having the aforesaid qualifications and if such two appraisers
cannot, within thirty (30) days after the appointment of the second appraiser,
agree upon the determination hereinabove required, then they shall select a
third appraiser, which third appraiser shall have the aforesaid qualifications,
and if they fail to do so within forty (40) days after the appointment of the
second appraiser they shall notify the parties hereto, and either party shall
thereafter have the right, on notice to the other, to apply for the appointment
of the third appraiser to the chapter of the American Arbitration Association or
its successor organization located in the metropolitan area or, if no such
chapter is located in such metropolitan area, in the metropolitan area closest
to the applicable portion of the Collateral in which such a chapter is located.
Each appraiser shall render its decision as to the Fair Market Value of the
applicable portion of the Collateral within (30) days after the appointment of
the third appraiser and shall furnish a copy thereof to Lender and PCIC. The
Fair Market Value of the applicable portion of the Collateral shall then be
calculated as the average of (i) the Fair Market Value determined by the third
appraiser and (ii) whichever of the Fair Market Values determined by the first
two appraisers is closer to the Fair Market Value determined by the third
appraiser; provided, however, that if the Fair Market Value determined by the
third appraiser is higher or lower than both Fair Market Values determined by
the first two appraisers, such Fair Market Value determined by the third
appraiser shall be disregarded and the Fair Market Value of such portion of the
Collateral shall then be calculated as the average of the Fair Market Values
determined by the first two appraisers. The Fair Market Value of such portion of
the Collateral as so determined shall be binding and conclusive upon Lender and
PCIC. PCIC shall bear the cost of appointing, and the expense of, the
appraisers.
4. Obligations Absolute. This Agreement is an absolute,
unconditional, present and continuing guaranty of collection following
foreclosure.
5. Time, Method and Place of Payment. All payments by PCIC under or
by virtue of this Agreement shall be made to Lender in lawful money of the
United States of America and in immediately available funds at Lender's offices
specified in the introductory paragraph hereof, or at such other place or places
as Lender may hereafter designate in writing. Any payments hereunder to be made
by PCIC will be due and payable within twenty (20) business days after notice
from Lender stating the amount of the Guaranteed Obligations.
3
6. Amendments. This Agreement may not be waived, modified or amended
except by an agreement in writing signed by the Company and PCIC.
7. Termination of Agreement.
(a) Change in Control. PCIC shall have the right to elect, in its
sole and absolute discretion, to terminate this Agreement, in whole or in part,
in the event Shelbourne Management, LLC is involuntarily removed as the manager
of Xxxxxxxxxx XX, LLC, a Delaware limited liability company ("Xxxxxxxxxx XX") or
in the event of a change in the ownership of the Collateral (other than to
Lender by reason of Lender's enforcement of the rights granted pursuant to the
Loan Documents) or the membership interests in the Company, Accotel Equity
Investors LLC, a Delaware limited liability company or Xxxxxxxxxx XX, by
delivering notice of such termination to Lender within sixty (60) days after
PCIC receives notice of any such removal or change in ownership. Upon such
election this Agreement shall be null, void and of no further force or effect.
(b) Equity Transfers. PCIC shall have the right to elect, in its
sole and absolute discretion, to terminate this Agreement, in whole or in part,
in the event that Lender fails to approve the release of NorthStar Partnership,
L.P. and PCIC from all of their respective obligations under all guaranties and
indemnities issued with respect to the Loan within ten (10) business days after
a request to Lender in connection with a proposed bona fide transfer of the
direct or indirect equity interests in Accotel Equity Investors LLC or the
Company. Such right to terminate this Agreement may be exercised by delivering
notice of such termination to Lender within sixty (60) days after Lender's
failure to approve such releases. Upon such election this Agreement shall be
null, void and of no further force or effect.
(c) Automatic Termination. This Guaranty shall automatically
terminate and be null, void and of no further force or effect on the date that
is eighteen (18) months following the date of this Agreement, unless PCIC
provides written notice to Lender of PCIC's election to extend the termination
date of this Guaranty, which election shall be made by PCIC in its sole and
absolute discretion.
(d) No Waiver of Termination Right. In the event PCIC does not
exercise a right to terminate this Agreement pursuant to this paragraph, the
election not to terminate this Agreement upon the occurrence of any event shall
not be deemed to be a waiver of the any right of PCIC to terminate this
Agreement upon the occurrence of any similar or other future event.
8. Severability. If this Agreement would be held or determined to be
void, invalid or unenforceable by reason of the amount of PCIC's liability under
this Agreement, then, notwithstanding any other provision of this Agreement to
the contrary, the maximum amount of the liability of PCIC under this Agreement
shall, without any further action by PCIC, the Company, Lender or any other
person, be automatically limited and reduced to an amount which is valid and
enforceable.
9. Subordination. PCIC hereby waives all rights of subrogation or
contribu-tion that it may have against the Company, Accotel Equity Investors
LLC, any person or entity owning a direct or indirect interest in the Company or
Accotel Equity Investors LLC, or any person or entity related (within the
meaning of Treasury Regulation Section 1.752-4(b)) to any such person or entity,
whether arising by contract or operation of law by reason of any payment
pursuant hereto.
4
10. Miscellaneous.
(a) Notices. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications required
or permitted by the terms hereof shall be in writing and shall be given in
accordance with Section 5.1 of the Indenture (as defined on Exhibit A attached
hereto) and, in the case of Guarantor, shall be addressed to Guarantor and sent
to the applicable addresses as follows:
Presidio Capital Investment Company LLC
c/o NorthStar Capital Investment Corp.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
W. Xxxxxx Xxxxxxx
Xxxxxxx X. XxXxxxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
(b) Entire Agreement. This Guaranty constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
between or among Guarantor, the Company and the Lender with respect to the
subject matter hereof.
(c) Article Headings. The headings of the various Articles and
Sections of this Guaranty are for convenience of reference only and shall not
modify, define, expand or limit any of the terms of provisions hereof.
(d) Jurisdiction: Agent for Service of Process. Any suit, action or
proceeding, whether at law or in equity, including any declaratory judgment or
similar suit or action, instituted by or against Guarantor arising out of or
relating in any way to this Guaranty may be brought and enforced in the courts
of the State of New York or of the United States for the Southern District of
New York, and Guarantor irrevocably consents and submits to the exclusive
jurisdiction of such courts in respect of any suit, action or proceeding and
Guarantor hereby irrevocably agrees that all claims against it in respect of
such action or proceeding against Guarantor may be heard and determined in such
courts. Guarantor further irrevocably consents to the service of process in any
such suit, action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, return receipt requested, to Guarantor or to
its agent at its address as set forth in Section 10(a) or as set forth below,
respectively. The foregoing shall not limit the right of Lender to serve process
in any other manner permitted by law or to bring any action or proceeding, or to
obtain execution of any judgment, in any other jurisdiction.
5
(e) Waiver of Venue. Guarantor hereby irrevocably waives any option
or objection that it may now or hereafter have to the laying of venue of any
such action or proceed-ing arising under or relating to this Guaranty in any
court located in the County of New York, State of New York, and hereby further
irrevocably waives any claim that a court located in the County of New York,
State of New York is not a convenient forum for any such action or proceeding.
Guarantor agrees that, to the fullest extent permitted by applicable laws and
regulations, a final, nonappealable judgment in any such action or proceeding
obtained in any court described in Section 10(d) shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(f) WAIVER OF JURY TRIAL. GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS GUARANTY.
(g) GOVERNING LAW. THIS GUARANTY SHALL IN ALL RESPECTS BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER
CHOICE OF LAW AND CON-FLICTS OF LAW RULES.
(h) Counterparts. This Guaranty may be executed simultaneously in
two or more counterparts each of which shall be deemed an original, and it shall
not be necessary in making proof of this Guaranty to produce or account for more
than one such counterpart, hereunder.
[REMAINDER OF THE PAGE INTENTIONALLY BLANK]
6
IN WITNESS WHEREOF, the PCIC and the Company have duly executed this
Foreclosure Guaranty as of the day and year first above written.
PRESIDIO CAPITAL INVESTMENT COMPANY LLC,
a Delaware limited liability company
By:
-------------------------------------
Name:
Title:
ACCOTEL PROPERTY INVESTORS LLC,
a Delaware limited liability company
By:
-------------------------------------
Name:
Title:
7
EXHIBIT E-1
SHELBOURNE PROPERTIES I, L.P.
AMENDED AND RESTATED
PARTNERSHIP UNIT DESIGNATION OF THE
CLASS A PREFERRED PARTNERSHIP UNITS
5% CLASS A PREFERRED PARTNERSHIP UNITS
(NO LIQUIDATION PREFERENCE)
(FORMERLY, 5% CLASS A PREFERRED PARTNERSHIP UNITS,
LIQUIDATION PREFERENCE $1,000 PER UNIT)
WHEREAS, under a power contained in Section 4.2 of the Second
Amended and Restated Agreement of Limited Partnership of Shelbourne Properties
I, L.P., a Delaware limited partnership (the "Partnership"), dated as of April
16, 2001 (as amended from time to time, the "Partnership Agreement"), Shelbourne
Properties I GP, LLC, a Delaware limited liability company (the "General
Partner"), as the general partner of the Partnership, by a resolution of the
Board of Directors of the sole member of the General Partner, dated February 14,
2002, classified and designated 812.674 units as 5% Class A Preferred
Partnership Units, liquidation preference $1,000 per unit, with the preferences,
voting powers, restrictions, limitations as to distributions, qualifications,
terms and conditions of redemption and other rights set forth in a Partnership
Unit Designation with respect thereto, dated February 14, 2002 (the "Partnership
Unit Designation");
WHEREAS, the holders of the 5% Class A Preferred Partnership Units
and the Partnership have agreed to redesignate the 5% Class A Preferred
Partnership Units as "5% Class A Preferred Partnership Units (no liquidation
preference)" and to amend and restate the Partnership Unit Designation to
reflect the preferences, voting powers, restrictions, limitations as to
distributions, qualifications, terms and conditions of redemption and other
rights of such redesignated class; and
WHEREAS, this Amended and Restated Partnership Unit Designation
shall become effective upon the effectiveness of the Agreement (as hereinafter
defined).
NOW THEREFORE, the Partnership hereby certifies as follows:
FIRST: Under a power contained in Section 4.2 of the Partnership
Agreement, the General Partner, by a resolution of the sole member of the Board
of Directors of the General Partner, dated January 6, 2003, classified and
redesignated the 812.674 units of Class A Preferred Partnership Units,
liquidation preference $1,000 per unit, as "Class A Preferred Partnership Units
(no liquidation preference)" with the following preferences, voting powers,
restrictions, limitations as to distributions, qualifications, terms and
conditions of redemption and other rights. This Amended and Restated Partnership
Unit Designation shall be attached, made an exhibit to, and made a part of, the
Partnership Agreement and shall be deemed for all purposes an amendment of the
Partnership Agreement.
Section 1. Redesignation. The class of Partnership Preferred Units
heretofore designated as "5% Class A Preferred Partnership Units, liquidation
preference $1,000 per unit" (the "Class A Preferred Units"), shall hereafter be
designated as "5% Class A Preferred Partnership Units (no liquidation
preference)" (the "Class A Units"). The holders of 812.674 units constituting
such class shall no longer be afforded any rights as holders of Class A
Preferred Units and shall hereafter be afforded only the rights set forth in
this Amended and Restated Partnership Unit Designation with respect to such
units. The Class A Units shall be limited partnership interests in the
Partnership.
Section 2. Definitions. Terms defined in the Partnership Agreement
and not otherwise defined herein shall have the respective meanings ascribed to
such terms in the Partnership Agreement and the following terms shall have the
meanings indicated:
"Affirmative Vote" shall have the meaning set forth in Section 11
hereof.
"Agreement" shall mean the Agreement, dated the date hereof, by and
among the Partnership, Parent, Shelbourne Management Company LLC, and certain
other parties.
"Amended and Restated Partnership Unit Designation" shall mean this
Amended and Restated Partnership Unit Designation, as the same may be amended or
modified from time to time in accordance with the terms hereof.
"Base Amount" shall mean $1,000 per unit.
"Capital Interests" shall mean any shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all units or interests, participations (however designated) or other
equivalents of a partnership and any and all equivalent ownership interests in a
Person (other than a partnership or a corporation) and any and all warrants or
options to purchase any of the foregoing.
"Class A Preferred Units" shall have the meaning set forth in
Section 1 hereof.
"Class A Units" shall have the meaning set forth in Section 1
hereof.
"Common Shares" shall mean the common shares, par value $.01 per
share (or any equivalent thereof), of Shelbourne Properties I, Inc.
"Distribution Nonpayment Event" shall have the meaning set forth in
paragraph (a) of Section 13.
"Distribution Payment Date" shall mean the first calendar day of
January, April, July and October, in each year, commencing with the first of
such calendar months occurring after the Issue Date; provided, however, that if
any Distribution Payment Date falls on any day other than a Business Day, the
distribution due on such Distribution Payment Date shall be paid on the first
Business Day immediately following such Distribution Payment Date.
2
"Distribution Payment Record Date" shall have the meaning set forth
in paragraph (a) of Section 3 hereof.
"Distribution Periods" shall mean quarterly distribution periods
commencing on January 1, April 1, July 1 and October 1 of each year (other than
the initial Distribution Period, which shall commence on the Issue Date) and
ending on and including the day preceding the first day of the next succeeding
Distribution Period.
"Distribution Rate" shall mean 5% per annum.
"Fundamental Change" shall have the meaning set forth in paragraph
(b) of Section 11 hereof.
"General Partner" shall have the meaning set forth in the recitals
of this Amended and Restated Partnership Unit Designation.
"Governing Documents" as to any Person, shall mean its articles or
certificate of incorporation and by-laws, its partnership agreement, its
certificate of formation and operating agreement, and/or the other
organizational or governing documents of such Person.
"Holder" shall have the meaning set forth in Section 10 hereof.
"Issue Date" shall mean (i) the date of original issuance of a Class
A Preferred Unit when used with reference to the accrual and payment of
distributions as to such Class A Preferred Unit pursuant to Section 3 hereof and
(ii) February 14, 2002 for all other purposes under this Partnership Unit
Designation.
"Material Event" shall mean any of the events specified in Section
13, provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"Parent" shall mean Shelbourne Properties I, Inc.
"Partnership Agreement" shall have the meaning set forth in the
recitals of this Amended and Restated Partnership Unit Designation.
"Partnership Common Units" shall mean the "OP Units" as defined in
the Partnership Agreement, other than the Series A Preferred Units and any other
Units designated as Partnership Preferred Units.
"Partnership Junior Unit" shall have the meaning set forth in
paragraph (c) of Section 8 hereof.
3
"Partnership Parity Unit" shall have the meaning set forth in
paragraph (b) of Section 8 hereof.
"Partnership Preferred Units" shall mean preferred Units of the
Partnership.
"Partnership Senior Unit" shall have the meaning set forth in
paragraph (a) of Section 8 hereof.
"Plan of Liquidation" shall mean the plan of liquidation adopted by
Parent and made effective October 29, 2002.
"Purchase Agreement" shall mean the Purchase and Contribution
Agreement, dated as of February 14, 2002, to which the Partnership is a party.
"Set apart for payment" shall be deemed to include for all
Partnership Units (i) the recording by the Partnership in its accounting ledgers
of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of a distribution by the General Partner, the allocation of funds to
be so paid on any series or class of Partnership Units, and (ii) placing such
funds in a separate account or delivering such funds to a disbursing, paying or
other similar agent.
"Shelbourne Management" shall mean Shelbourne Management Company
LLC.
"Unmatured Material Event" means either of the events specified in
Section 13, whether or not any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied.
Section 3. Distributions.
(a) Subject to the priority rights of any Partnership Senior
Units, the Holders of Class A Units shall be entitled to receive, on each
Distribution Payment Date, distributions payable in cash, in an amount equal to
the Distribution Rate of the Base Amount per Class A Units plus the amount of
any distributions payable pursuant to Section 13 hereof. Distributions on the
Class A Units are cumulative from the most recent Distribution Payment Date on
which distributions have been paid (or, with respect to the first distribution,
from December 31, 2002). Each such distribution shall be payable in arrears,
commencing on the first Distribution Payment Date after December 31, 2002, to
the Holders of the Class A Units, as they appear on the records of the
Partnership, at the close of business on the applicable record date, which shall
be not more than 30 days preceding the applicable Distribution Payment Date (the
"Distribution Payment Record Date"), as shall be fixed by the General Partner.
Accrued and unpaid distributions for any past Distribution Periods may be
authorized and paid at any time, without reference to any regular Distribution
Payment Record Date, to the Holders of the Class A Preferred Units on such date,
not exceeding 45 days preceding the payment date thereof, as may be fixed by the
General Partner.
4
(b) The amount of distributions payable for the initial
Distribution Period, or any other period shorter or longer than a full
Distribution Period, on the Class A Units shall be computed on the basis of
twelve 30-day months and a 360-day year. Except as provided herein, no interest,
or sum of money in lieu of interest, shall be payable in respect of any
distribution payment or payments on the Class A Units that may be in arrears.
(c) So long as any Class A Units are outstanding, no
distributions, except as described in the immediately following sentence, shall
be authorized and declared or paid or set apart for payment on any series or
class or classes of Partnership Parity Units for any period unless full
cumulative distributions have been or contemporaneously are authorized and paid
or authorized and a sum sufficient for the payment thereof set apart for such
payment on the Class A Units for all Distribution Periods terminating on or
prior to the most recent Distribution Payment Date on such class or series of
Partnership Parity Units. When distributions are not paid in full or a sum
sufficient for such payment is not set apart, as aforesaid, all distributions
authorized upon Class A Units and all distributions authorized upon any other
series or class or classes of Partnership Parity Units shall be authorized and
made ratably in proportion to the respective amounts of distributions
accumulated and unpaid on the Class A Units and such Partnership Parity Units.
(d) So long as any Class A Units are outstanding, no
distributions (other than distributions that are required in order to maintain
the qualification of Parent as a real estate investment trust within the meaning
of section 856(a) of the Code or that are paid solely in, or options, warrants
or rights to subscribe for or purchase, Partnership Junior Units) shall be
authorized and declared or paid or set apart for payment or other distribution
authorized or made upon Partnership Junior Units, nor shall any Partnership
Junior Units be redeemed, purchased or otherwise acquired (other than
redemptions, purchases or other acquisitions that are required in order to
maintain the qualification of Parent as a real estate investment trust within
the meaning of section 856(a) of the Code or that are paid solely in, or
options, warrants or rights to subscribe for or purchase, Partnership Junior
Units), for any consideration (or any moneys to be paid to or made available for
a sinking fund for the redemption of any Partnership Junior Units) by the
Partnership (other than payments in order to enable Parent to pay
organizational, accounting, legal, administrative and reporting expenses and
other fees and expenses in connection with the operations of Parent as a public
company and as a real estate investment trust within the meaning of Section
856(a) of the Code), unless in each case (i) the full cumulative distributions
on all outstanding Class A Units and any other Partnership Parity Units shall
have been paid or set apart for payment for all past Distribution Periods with
respect to the Class A Units and all past distribution periods with respect to
such Partnership Parity Units and (ii) sufficient funds shall have been paid or
set apart for the payment of the distribution for the current Distribution
Period with respect to the Class A Units and any Partnership Parity Units.
(e) Notwithstanding anything to the contrary in the preceding
provisions of this Section 3, all cash flow and proceeds from any New Property
(as defined in the Agreement) shall be distributed to the Holders of the Class A
Units in proportion to the numbers of Class A Units held by such Holders.
5
Section 4. No Liquidation Preference. Until the Complete Redemption
(as defined in the Agreement), the Class A Units shall not be entitled to any
liquidation preference or other payment upon the liquidation, dissolution or
winding up of the Partnership, apart from distributions as provided in the
Agreement or in Section 3 hereof.
Section 5. No Conversion Rights. Holders of Class A Unit shall not
have the right to convert any portion of such units into Partnership Common
Units, Common Shares or any other securities.
Section 6. No Redemption Right. The Class A Units shall not be
redeemable either at the election of the Holder or the Partnership, except that
the Partnership may retire the Class A Units following their reacquisition
pursuant to Section 4(a) of the Agreement.
Section 7. Allocations.
(a) To the extent permitted by Treasury Regulation
1.752-3(a)(3), any "excess nonrecourse liabilities" (as defined in said Treasury
Regulation) attributable to (i) the ACCOR Property, for the period that it is a
Restricted Asset (as such terms are defined in the Agreement), and (ii) from and
after the closing of the New Transaction and the acquisition of the New Property
subject to the New Indebtedness (as such terms are defined in the Agreement),
the New Property, shall be allocated to the Holders of Class A Units.
(b) For each calendar year for which an election is made in
accordance with this Section 7(b), Holders of Class A Units shall be allocated
all income and deductions attributable to (i) the ACCOR Property, for the period
that is a Restricted Asset, and (ii) from and after the closing of the New
Transaction and the acquisition of the New Property subject to the New
Indebtedness, the New Property. The election referred to in the immediately
preceding sentence shall be made by not later than December 31st of the
applicable calendar year, by delivery by Shelbourne Management to each of the
Partnership (on behalf of all Holders of Class A Units), Shelbourne Properties
II, L.P. (on behalf of all holders of Class A Units therein) and Shelbourne
Properties I, L.P. (on behalf of all holders of Class A Units therein) of
written notice electing such allocation for such calendar year.
Section 8. Ranking. Any class or series of Units shall be deemed to
rank:
(a) senior to the Class A Units, as to the payment of
distributions or as to the distribution of assets upon liquidation, dissolution
or winding up, if the holders of such Units shall be entitled to receipt of
distributions or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the Holders of
Class A Preferred Units ("Partnership Senior Units");
6
(b) on a parity with the Class A Preferred Units, as to the
payment of distributions and as to the distribution of assets upon liquidation,
dissolution or winding up, whether or not the distribution rates, distribution
payment dates or redemption or liquidation prices per Unit thereof are different
from those of the Class A Preferred Units, if the holders of such class or
series of Units and the Class A Preferred Units shall be entitled to the receipt
of distributions and of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of accrued and unpaid
distributions per Unit or liquidation preferences, without preference or
priority one over the other ("Partnership Parity Units"); and
(c) subject to Section 3(d), junior to the Class A Preferred
Units, as to the payment of distributions or as to the distribution of assets
upon liquidation, dissolution or winding up, if they are Partnership Common
Units or the Holders of Class A Preferred Units shall be entitled to receipt of
distributions or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the Holders of
Partnership Units of such class or series, and such class or series shall not in
either case rank prior to the Class A Preferred Units ("Partnership Junior
Units").
Section 9. Voting.
(a) Except as otherwise set forth herein or in the Partnership
Agreement, the Class A Units shall not have any relative, participating,
optional or other special voting rights and powers, and the consent of the
Holders thereof shall not be required for the taking of any partnership action.
Notwithstanding anything to the contrary contained in the Partnership Agreement,
this Amended and Restated Partnership Unit Designation shall not be amended
without the consent of 66-2/3% of the votes entitled to be cast by the Holders
of Class A Units at the time outstanding.
(b) For any matter requiring a vote of the Holders of the
Class A Units, each Class A Unit shall have one vote per share, except that when
any other series of Partnership Preferred Units shall have the right to vote
with the Class A Units as a single class on any matter, then the Class A Units
and such other series shall have with respect to such matters one vote per
$1,000 of stated liquidation preference (or, with respect to Class A Units, the
Base Amount with respect to such Class A Units).
(c) As a condition of becoming a Holder of Class A Units, each
Holder of Class A Units hereby irrevocably appoints Shelbourne Management (or
whenever there is more than one Holder of Class A Units, and Shelbourne
Management is no longer a Holder of Class A Units, Presidio Capital Investment
Company, LLC ("PCIC")) as its sole and exclusive attorney in fact, which shall
be coupled with an interest, to take all actions on behalf of and in the name of
such Holder under the Agreement. Each Holder of Class A Units acknowledges and
agrees that it shall have no cause of action or recourse against any person
(other than Shelbourne Management (or PCIC, if applicable)) for any action or
failure to act by Shelbourne Management (or PCIC, if applicable) under the
Agreement, and that the Partnership and any person claiming by, through or under
the Partnership shall be entitled to indemnification, out of any and all amounts
otherwise distributable to the Holders of Class A Units, against all costs and
expenses incurred in defending against any claims asserted by a Holder of a
Class A Unit in violation of this Section 9(c).
7
Section 10. Record Holders. The General Partner may deem and treat
the record holder (the "Holder") of any Class A Units as the true and lawful
owner thereof for all purposes, and the General Partner shall not be affected by
any notice to the contrary.
Section 11. Negative Covenants. So long as any Class A Units remain
outstanding, none of Parent, the General Partner or the Partnership shall,
without the affirmative vote of at least 66-2/3% of the votes entitled to be
cast by the Holders of Class A Units at the time outstanding, given in person or
by proxy, either in writing without a meeting or by vote at any meeting called
for the purpose (an "Affirmative Vote"):
(a) Limitation on Issuing Preferred Equity. Issue any Capital
Interests in the Partnership constituting either Partnership Senior Units or
Partnership Parity Units.
(b) Limitation on Fundamental Changes. Consolidate or merge
with any other Person, sell, convey, assign, transfer, lease or otherwise
dispose of all or substantially all its properties and assets as an entirety in
one transaction or a series of transactions to any Person (any such transaction,
a "Fundamental Change"), except that (i) Parent may liquidate under the Plan of
Liquidation and the Partnership may distribute assets as provided in the
Agreement, provided in each case that all required distributions to the Holders
of the Class A Units are made as provided herein, and (ii) Parent may make any
other Fundamental Change if, with respect to such other Fundamental Change (x)
either (i) Parent shall be the continuing corporation or (ii) such Person shall
be a corporation, partnership or trust organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia, (y)
such transaction shall not cause a Material Event to exist and (z) such
transaction is not reasonably likely to adversely affect the tax position of the
Holders of the Class A Preferred Units.
(c) Limitation on Modifications of Agreements. Amend,
supplement, terminate, waive or otherwise modify this Amended and Restated
Partnership Unit Designation or amend, supplement, terminate, waive or otherwise
modify in any material respect the provisions of the Governing Documents of
Parent, the General Partner or the Partnership (1) if such action would cause a
Material Event to exist or (2) if such amendment or other action directly and
materially adversely affects the voting powers, transferability, economic
rights, limitations on liability, tax position or preferences, or increase the
obligations, of the Holders of the Class A Units; provided, however, that (i)
the amendment of the provisions of the Partnership Agreement so as to authorize
or create, or to increase the authorized amount of, any Partnership Junior Units
shall not be deemed to adversely affect the voting powers, transferability,
economic rights, limitations on liability, tax position or preferences, or
increase the obligations, of the Holders of Class A Units and (ii) any filing
with the Secretary of State of the State of Delaware by Parent in connection
with a merger, consolidation or sale of all or substantially all of the assets
of Parent (subject to the limitations contained in paragraph (b) of this Section
11 hereof and compliance with the other provisions of this Amended and Restated
Partnership Unit Designation) which do not alter the terms of this Partnership
Unit Designation shall not be deemed to be an amendment, alteration or repeal of
any of the provisions of the Governing Documents of Parent.
8
(d) No Other Assets Owned by General Partner. Allow the
General Partner to own any assets other than the Partnership Common Units or
preferred units of the Partnership, or allow the General Partner to sell,
transfer, pledge or otherwise encumber the Partnership Common Units or preferred
units of the Partnership owned by the General Partner.
(e) Liquidation of General Partner. Allow Parent or the
General Partner to liquidate, dissolve or wind up at any time except in
accordance with the Plan of Liquidation and the Agreement.
(f) Investment Company Act. Make or restructure any Investment
which would result in any of Parent, the General Partner or the Partnership
being an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
(g) REOC Status. Allow the Partnership to lose its status as
an "operating company" under U. S. Department of Labor Regulation Section
2510.3-101, 29 C.F.R. ss.2550.3-101.
(h) Non-Publicly Traded Partnership. Take any action which
results in the Partnership becoming a "publicly traded partnership" for purposes
of Section 7704 of the Code.
Section 12. Notices and Reporting.
(a) The Partnership shall deliver to the Holders of the Class
A Units all reports and statements required to be delivered under Section 9.3 of
the Partnership Agreement.
(b) The Partnership shall promptly give notice to the Holders
of the Class A Units of the occurrence of any Unmatured Material Event or a
Material Event.
(c) Officer's Certificate. Each notice pursuant to Section
11(b) shall be accompanied by a statement of an officer of the General Partner
setting forth details of the occurrence referred to therein and stating what
action Parent, the Partnership or the General Partner, as applicable, proposes
to take with respect thereto.
9
Section 13. Material Events. If any of the following events shall
occur and be continuing:
(a) If any quarterly distributions payable on the Class A
Preferred Stock shall not be paid in full when due, whether or not earned or
declared (a "Distribution Nonpayment Event");
(b) Parent, the General Partner or the Partnership shall fail
to observe or perform of any other agreement contained in this Partnership Unit
Designation, other than a failure caused by Shelbourne Management in its
capacity as the managing member of Xxxxxxxxxx XX LLC, and such failure shall
continue unremedied for a period of 30 days after notice from any Holders of
Class A Units; or
(c) The General Partner ceases to be the sole general partner
of the Partnership,
then, and in any such event, the then applicable Distribution Rate shall be
increased by 2.5% per annum for the period during which such Material Event
continues (which increased rate shall also be payable on accumulated and unpaid
distributions); provided, that, during the continuance of a Distribution
Nonpayment Event, the Distribution Rate shall be adjusted to reflect compounding
through the date on which the distribution to which such Distribution Nonpayment
Event relates is paid, with the compounding to be calculated as if the
Liquidation Preference had been increased by the amount of such distribution as
of the date on which such Distribution Nonpayment Event occurred (or, if such
distribution shall remain unpaid through successive Distribution Periods, on
such successive Distribution Dates) and with any distribution that is made after
its required Distribution Date being deemed to be in respect of the earliest
Dividend Date for which distributions shall not have been paid in full.
Section 14. Parent and General Partner Limitations.
(a) So long as any Class A Preferred Units are outstanding, no
distributions (other than distributions that are required in order to maintain
the qualification of Parent as a real estate investment trust within the meaning
of section 856(a) of the Code or that are paid solely in Common Shares of, or
options, warrants or rights to subscribe for or purchase Common Shares) shall be
authorized and declared or paid or set apart for payment or other distribution
or dividend authorized or made upon Common Shares, nor shall any Common Shares
be redeemed, purchased or otherwise acquired (other than redemptions, purchases
or other acquisitions that are required in order to maintain the qualification
of Parent as a real estate investment trust within the meaning of section 856(a)
of the Code or that are paid solely in Common Shares of, or options, warrants or
rights to subscribe for or purchase Common Shares), for any consideration (or
any moneys to be paid to or made available for a sinking fund for the redemption
of any such Common Shares) by Parent (other than payments in order to enable
Parent to pay organizational, accounting, legal, administrative and reporting
expenses and other fees and expenses in connection with the operations of Parent
as a public company and as a real estate investment trust within the meaning of
section 856(a) of the Code), unless in each case (i) the full cumulative
distributions on all outstanding Class A Units and any other Partnership Parity
Units shall have been paid or set apart for payment for all past Distribution
Periods with respect to the Class A Units and all past distribution periods with
respect to such Partnership Parity Units and (ii) sufficient funds shall have
been paid or set apart for the payment of the distribution for the current
Distribution Period with respect to the Class A Units and any Partnership Parity
Units.
10
(b) In the event of any liquidation, dissolution or winding up
of Parent or the General Partner, whether voluntary or involuntary, before any
payment or distribution of the assets of Parent or the General Partner (whether
capital or surplus) shall be made to or set apart for the holders of Common
Shares, the Holders of Class A Preferred Units shall be entitled to receive all
distributions (whether or not earned or declared) accrued and unpaid thereon to
the date of final distribution to such shareholder. If, upon any such
liquidation, dissolution or winding up of Parent or the General Partner, the
assets of Parent or the General Partner, or proceeds thereof, distributable
among the Holders of Class A Units shall be insufficient to pay in full the
preferential amount aforesaid and liquidating payments on any other Partnership
Parity Units, then such assets, or the proceeds thereof, shall be distributed
among the Holders of such Class A Units and any such other Partnership Parity
Units ratably in accordance with the respective amounts that would be payable on
such Class A Units and any such other Partnership Parity Units if all amounts
payable thereon were paid in full.
Section 15. REIT Qualification. No provision in this Amended and
Restated Partnership Units Designation shall be construed or interpreted in a
manner that would adversely affect the qualification of Parent as a real estate
investment trust within the meaning of section 856(a) of the Code.
Section 16. REIT Liquidation. Notwithstanding anything to the
contrary contained in this Amended and Restated Partnership Unit Designation,
the Partnership, the General Partner and the Parent may take any action required
or permitted by the Agreement, and any such action shall not be a Material Event
hereunder. In the event of any inconsistency between the provisions of the
Agreement and this Amended and Restated Partnership Unit Designation, the
provisions of the Agreement shall control.
Section 17. Additional Capital Contributions. As a condition of
becoming a Holder of Class A Units, each Holder of Class A Units, together with
Shelbourne Management, shall be jointly and severally liable to make the capital
contributions called for by Section 9(b) of the Agreement if, as and when such
capital contributions are required to be made. If the capital contributions
required by Section 11 of the Agreement are not timely made, the election made
pursuant to Section 7(b) for the immediately preceding calendar year shall be
deemed null and void.
SECOND: This Amended and Restated Partnership Unit Designation has
been approved by the General Partner, both in its individual capacity and in its
capacity as General Partner of the Partnership.
11
THIRD: The undersigned acknowledges that this Amended and Restated
Partnership Unit Designation to be the corporate act of the General Partner, as
general partner of the Partnership and in its individual capacity and, as to all
matters or facts required to be verified under oath, the undersigned
acknowledges that to the best of his or her knowledge, information and belief,
these matters and facts are true in all material respects and that this
statement is made under the penalties for perjury. Each of Parent and the
General Partner, in its individual capacity, is executing and delivering this
Amended and Restated Partnership Unit Designation to confirm each of its
covenants and other obligations hereunder (including, without limitation, under
Section 14 hereof) and its agreement to be personally bound hereby.
FOURTH: Shelbourne Management, by executing and delivering this
Amended and Restated Partnership Unit Designation, acknowledges and confirms
that all distributions required to have been made by the Partnership to the
holders of the 5% Class A Preferred Partnership Units under the Partnership Unit
Designation through December 31, 2002 have been made and, to the best of its
knowledge, information and belief, there is no default thereunder as of the date
hereof.
12
IN WITNESS WHEREOF, each of Parent and the General Partner has
executed this Amended and Restated Partnership Unit Designation in its
individual capacity and the General Partner has executed this Amended and
Restated Partnership Unit Designation in its capacity as the sole General
Partner of the Partnership on this 15th day of January, 2003.
SHELBOURNE PROPERTIES I GP, LLC,
INDIVIDUALLY AND AS GENERAL PARTNER
BY: SHELBOURNE PROPERTIES I, INC.,
its sole member
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President
SHELBOURNE PROPERTIES I, INC., INDIVIDUALLY
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President
Solely for purposes of acknowledging Article
FOURTH:
SHELBOURNE MANAGEMENT COMPANY LLC
By: PRESIDIO CAPITAL INVESTMENT COMPANY,
LLC, its Sole Member
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
EXHIBIT E-2
SHELBOURNE PROPERTIES II, L.P.
AMENDED AND RESTATED
PARTNERSHIP UNIT DESIGNATION OF THE
CLASS A PREFERRED PARTNERSHIP UNITS
5% CLASS A PREFERRED PARTNERSHIP UNITS
(NO LIQUIDATION PREFERENCE)
(FORMERLY, 5% CLASS A PREFERRED PARTNERSHIP UNITS,
LIQUIDATION PREFERENCE $1,000 PER UNIT)
WHEREAS, under a power contained in Section 4.2 of the Second
Amended and Restated Agreement of Limited Partnership of Shelbourne Properties
II, L.P., a Delaware limited partnership (the "Partnership"), dated as of April
16, 2001 (as amended from time to time, the "Partnership Agreement"), Shelbourne
Properties II GP, LLC, a Delaware limited liability company (the "General
Partner"), as the general partner of the Partnership, by a resolution of the
Board of Directors of the sole member of the General Partner, dated February 14,
2002, classified and designated 1,015.148 units as 5% Class A Preferred
Partnership Units, liquidation preference $1,000 per unit, with the preferences,
voting powers, restrictions, limitations as to distributions, qualifications,
terms and conditions of redemption and other rights set forth in a Partnership
Unit Designation with respect thereto, dated February 14, 2002 (the "Partnership
Unit Designation");
WHEREAS, the holders of the 5% Class A Preferred Partnership Units
and the Partnership have agreed to redesignate the 5% Class A Preferred
Partnership Units as "5% Class A Preferred Partnership Units (no liquidation
preference)" and to amend and restate the Partnership Unit Designation to
reflect the preferences, voting powers, restrictions, limitations as to
distributions, qualifications, terms and conditions of redemption and other
rights of such redesignated class; and
WHEREAS, this Amended and Restated Partnership Unit Designation
shall become effective upon the effectiveness of the Agreement (as hereinafter
defined).
NOW THEREFORE, the Partnership hereby certifies as follows:
FIRST: Under a power contained in Section 4.2 of the Partnership
Agreement, the General Partner, by a resolution of the sole member of the Board
of Directors of the General Partner, dated January 6, 2003, classified and
redesignated the 1,015.148 units of Class A Preferred Partnership Units,
liquidation preference $1,000 per unit, as "Class A Preferred Partnership Units
(no liquidation preference)" with the following preferences, voting powers,
restrictions, limitations as to distributions, qualifications, terms and
conditions of redemption and other rights. This Amended and Restated Partnership
Unit Designation shall be attached, made an exhibit to, and made a part of, the
Partnership Agreement and shall be deemed for all purposes an amendment of the
Partnership Agreement.
Section 1. Redesignation. The class of Partnership Preferred Units
heretofore designated as "5% Class A Preferred Partnership Units, liquidation
preference $1,000 per unit" (the "Class A Preferred Units"), shall hereafter be
designated as "5% Class A Preferred Partnership Units (no liquidation
preference)" (the "Class A Units"). The holders of 1,015.148 units constituting
such class shall no longer be afforded any rights as holders of Class A
Preferred Units and shall hereafter be afforded only the rights set forth in
this Amended and Restated Partnership Unit Designation with respect to such
units. The Class A Units shall be limited partnership interests in the
Partnership.
Section 2. Definitions. Terms defined in the Partnership Agreement
and not otherwise defined herein shall have the respective meanings ascribed to
such terms in the Partnership Agreement and the following terms shall have the
meanings indicated:
"Affirmative Vote" shall have the meaning set forth in Section 11
hereof.
"Agreement" shall mean the Agreement, dated the date hereof, by and
among the Partnership, Parent, Shelbourne Management Company LLC, and certain
other parties.
"Amended and Restated Partnership Unit Designation" shall mean this
Amended and Restated Partnership Unit Designation, as the same may be amended or
modified from time to time in accordance with the terms hereof.
"Base Amount" shall mean $1,000 per unit.
"Capital Interests" shall mean any shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all units or interests, participations (however designated) or other
equivalents of a partnership and any and all equivalent ownership interests in a
Person (other than a partnership or a corporation) and any and all warrants or
options to purchase any of the foregoing.
"Class A Preferred Units" shall have the meaning set forth in
Section 1 hereof.
"Class A Units" shall have the meaning set forth in Section 1
hereof.
"Common Shares" shall mean the common shares, par value $.01 per
share (or any equivalent thereof), of Shelbourne Properties II, Inc.
"Distribution Nonpayment Event" shall have the meaning set forth in
paragraph (a) of Section 13.
"Distribution Payment Date" shall mean the first calendar day of
January, April, July and October, in each year, commencing with the first of
such calendar months occurring after the Issue Date; provided, however, that if
any Distribution Payment Date falls on any day other than a Business Day, the
distribution due on such Distribution Payment Date shall be paid on the first
Business Day immediately following such Distribution Payment Date.
2
"Distribution Payment Record Date" shall have the meaning set forth
in paragraph (a) of Section 3 hereof.
"Distribution Periods" shall mean quarterly distribution periods
commencing on January 1, April 1, July 1 and October 1 of each year (other than
the initial Distribution Period, which shall commence on the Issue Date) and
ending on and including the day preceding the first day of the next succeeding
Distribution Period.
"Distribution Rate" shall mean 5% per annum.
"Fundamental Change" shall have the meaning set forth in paragraph
(b) of Section 11 hereof.
"General Partner" shall have the meaning set forth in the recitals
of this Amended and Restated Partnership Unit Designation.
"Governing Documents" as to any Person, shall mean its articles or
certificate of incorporation and by-laws, its partnership agreement, its
certificate of formation and operating agreement, and/or the other
organizational or governing documents of such Person.
"Holder" shall have the meaning set forth in Section 10 hereof.
"Issue Date" shall mean (i) the date of original issuance of a Class
A Preferred Unit when used with reference to the accrual and payment of
distributions as to such Class A Preferred Unit pursuant to Section 3 hereof and
(ii) February 14, 2002 for all other purposes under this Partnership Unit
Designation.
"Material Event" shall mean any of the events specified in Section
13, provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"Parent" shall mean Shelbourne Properties II, Inc.
"Partnership Agreement" shall have the meaning set forth in the
recitals of this Amended and Restated Partnership Unit Designation.
"Partnership Common Units" shall mean the "OP Units" as defined in
the Partnership Agreement, other than the Series A Preferred Units and any other
Units designated as Partnership Preferred Units.
"Partnership Junior Unit" shall have the meaning set forth in
paragraph (c) of Section 8 hereof.
3
"Partnership Parity Unit" shall have the meaning set forth in
paragraph (b) of Section 8 hereof.
"Partnership Preferred Units" shall mean preferred Units of the
Partnership.
"Partnership Senior Unit" shall have the meaning set forth in
paragraph (a) of Section 8 hereof.
"Plan of Liquidation" shall mean the plan of liquidation adopted by
Parent and made effective October 29, 2002.
"Purchase Agreement" shall mean the Purchase and Contribution
Agreement, dated as of February 14, 2002, to which the Partnership is a party.
"Set apart for payment" shall be deemed to include for all
Partnership Units (i) the recording by the Partnership in its accounting ledgers
of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of a distribution by the General Partner, the allocation of funds to
be so paid on any series or class of Partnership Units, and (ii) placing such
funds in a separate account or delivering such funds to a disbursing, paying or
other similar agent.
"Shelbourne Management" shall mean Shelbourne Management Company
LLC.
"Unmatured Material Event" means either of the events specified in
Section 13, whether or not any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied.
Section 3. Distributions.
(a) Subject to the priority rights of any Partnership Senior
Units, the Holders of Class A Units shall be entitled to receive, on each
Distribution Payment Date, distributions payable in cash, in an amount equal to
the Distribution Rate of the Base Amount per Class A Units plus the amount of
any distributions payable pursuant to Section 13 hereof. Distributions on the
Class A Units are cumulative from the most recent Distribution Payment Date on
which distributions have been paid (or, with respect to the first distribution,
from December 31, 2002). Each such distribution shall be payable in arrears,
commencing on the first Distribution Payment Date after December 31, 2002, to
the Holders of the Class A Units, as they appear on the records of the
Partnership, at the close of business on the applicable record date, which shall
be not more than 30 days preceding the applicable Distribution Payment Date (the
"Distribution Payment Record Date"), as shall be fixed by the General Partner.
Accrued and unpaid distributions for any past Distribution Periods may be
authorized and paid at any time, without reference to any regular Distribution
Payment Record Date, to the Holders of the Class A Preferred Units on such date,
not exceeding 45 days preceding the payment date thereof, as may be fixed by the
General Partner.
4
(b) The amount of distributions payable for the initial
Distribution Period, or any other period shorter or longer than a full
Distribution Period, on the Class A Units shall be computed on the basis of
twelve 30-day months and a 360-day year. Except as provided herein, no interest,
or sum of money in lieu of interest, shall be payable in respect of any
distribution payment or payments on the Class A Units that may be in arrears.
(c) So long as any Class A Units are outstanding, no
distributions, except as described in the immediately following sentence, shall
be authorized and declared or paid or set apart for payment on any series or
class or classes of Partnership Parity Units for any period unless full
cumulative distributions have been or contemporaneously are authorized and paid
or authorized and a sum sufficient for the payment thereof set apart for such
payment on the Class A Units for all Distribution Periods terminating on or
prior to the most recent Distribution Payment Date on such class or series of
Partnership Parity Units. When distributions are not paid in full or a sum
sufficient for such payment is not set apart, as aforesaid, all distributions
authorized upon Class A Units and all distributions authorized upon any other
series or class or classes of Partnership Parity Units shall be authorized and
made ratably in proportion to the respective amounts of distributions
accumulated and unpaid on the Class A Units and such Partnership Parity Units.
(d) So long as any Class A Units are outstanding, no
distributions (other than distributions that are required in order to maintain
the qualification of Parent as a real estate investment trust within the meaning
of section 856(a) of the Code or that are paid solely in, or options, warrants
or rights to subscribe for or purchase, Partnership Junior Units) shall be
authorized and declared or paid or set apart for payment or other distribution
authorized or made upon Partnership Junior Units, nor shall any Partnership
Junior Units be redeemed, purchased or otherwise acquired (other than
redemptions, purchases or other acquisitions that are required in order to
maintain the qualification of Parent as a real estate investment trust within
the meaning of section 856(a) of the Code or that are paid solely in, or
options, warrants or rights to subscribe for or purchase, Partnership Junior
Units), for any consideration (or any moneys to be paid to or made available for
a sinking fund for the redemption of any Partnership Junior Units) by the
Partnership (other than payments in order to enable Parent to pay
organizational, accounting, legal, administrative and reporting expenses and
other fees and expenses in connection with the operations of Parent as a public
company and as a real estate investment trust within the meaning of Section
856(a) of the Code), unless in each case (i) the full cumulative distributions
on all outstanding Class A Units and any other Partnership Parity Units shall
have been paid or set apart for payment for all past Distribution Periods with
respect to the Class A Units and all past distribution periods with respect to
such Partnership Parity Units and (ii) sufficient funds shall have been paid or
set apart for the payment of the distribution for the current Distribution
Period with respect to the Class A Units and any Partnership Parity Units.
(e) Notwithstanding anything to the contrary in the preceding
provisions of this Section 3, all cash flow and proceeds from any New Property
(as defined in the Agreement) shall be distributed to the Holders of the Class A
Units in proportion to the numbers of Class A Units held by such Holders.
5
Section 4. No Liquidation Preference. Until the Complete Redemption
(as defined in the Agreement), the Class A Units shall not be entitled to any
liquidation preference or other payment upon the liquidation, dissolution or
winding up of the Partnership, apart from distributions as provided in the
Agreement or in Section 3 hereof.
Section 5. No Conversion Rights. Holders of Class A Unit shall not
have the right to convert any portion of such units into Partnership Common
Units, Common Shares or any other securities.
Section 6. No Redemption Right. The Class A Units shall not be
redeemable either at the election of the Holder or the Partnership, except that
the Partnership may retire the Class A Units following their reacquisition
pursuant to Section 4(a) of the Agreement.
Section 7. Allocations.
(a) To the extent permitted by Treasury Regulation
1.752-3(a)(3), any "excess nonrecourse liabilities" (as defined in said Treasury
Regulation) attributable to (i) the ACCOR Property, for the period that it is a
Restricted Asset (as such terms are defined in the Agreement), and (ii) from and
after the closing of the New Transaction and the acquisition of the New Property
subject to the New Indebtedness (as such terms are defined in the Agreement),
the New Property, shall be allocated to the Holders of Class A Units.
(b) For each calendar year for which an election is made in
accordance with this Section 7(b), Holders of Class A Units shall be allocated
all income and deductions attributable to (i) the ACCOR Property, for the period
that is a Restricted Asset, and (ii) from and after the closing of the New
Transaction and the acquisition of the New Property subject to the New
Indebtedness, the New Property. The election referred to in the immediately
preceding sentence shall be made by not later than December 31st of the
applicable calendar year, by delivery by Shelbourne Management to each of the
Partnership (on behalf of all Holders of Class A Units), Shelbourne Properties
I, L.P. (on behalf of all holders of Class A Units therein) and Shelbourne
Properties III, L.P. (on behalf of all holders of Class A Units therein) of
written notice electing such allocation for such calendar year.
Section 8. Ranking. Any class or series of Units shall be deemed to
rank:
(a) senior to the Class A Units, as to the payment of
distributions or as to the distribution of assets upon liquidation, dissolution
or winding up, if the holders of such Units shall be entitled to receipt of
distributions or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the Holders of
Class A Preferred Units ("Partnership Senior Units");
6
(b) on a parity with the Class A Preferred Units, as to the
payment of distributions and as to the distribution of assets upon liquidation,
dissolution or winding up, whether or not the distribution rates, distribution
payment dates or redemption or liquidation prices per Unit thereof are different
from those of the Class A Preferred Units, if the holders of such class or
series of Units and the Class A Preferred Units shall be entitled to the receipt
of distributions and of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of accrued and unpaid
distributions per Unit or liquidation preferences, without preference or
priority one over the other ("Partnership Parity Units"); and
(c) subject to Section 3(d), junior to the Class A Preferred
Units, as to the payment of distributions or as to the distribution of assets
upon liquidation, dissolution or winding up, if they are Partnership Common
Units or the Holders of Class A Preferred Units shall be entitled to receipt of
distributions or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the Holders of
Partnership Units of such class or series, and such class or series shall not in
either case rank prior to the Class A Preferred Units ("Partnership Junior
Units").
Section 9. Voting.
(a) Except as otherwise set forth herein or in the Partnership
Agreement, the Class A Units shall not have any relative, participating,
optional or other special voting rights and powers, and the consent of the
Holders thereof shall not be required for the taking of any partnership action.
Notwithstanding anything to the contrary contained in the Partnership Agreement,
this Amended and Restated Partnership Unit Designation shall not be amended
without the consent of 66-2/3% of the votes entitled to be cast by the Holders
of Class A Units at the time outstanding.
(b) For any matter requiring a vote of the Holders of the
Class A Units, each Class A Unit shall have one vote per share, except that when
any other series of Partnership Preferred Units shall have the right to vote
with the Class A Units as a single class on any matter, then the Class A Units
and such other series shall have with respect to such matters one vote per
$1,000 of stated liquidation preference (or, with respect to Class A Units, the
Base Amount with respect to such Class A Units).
(c) As a condition of becoming a Holder of Class A Units, each
Holder of Class A Units hereby irrevocably appoints Shelbourne Management (or
whenever there is more than one Holder of Class A Units, and Shelbourne
Management is no longer a Holder of Class A Units, Presidio Capital Investment
Company, LLC ("PCIC")) as its sole and exclusive attorney in fact, which shall
be coupled with an interest, to take all actions on behalf of and in the name of
such Holder under the Agreement. Each Holder of Class A Units acknowledges and
agrees that it shall have no cause of action or recourse against any person
(other than Shelbourne Management (or PCIC, if applicable)) for any action or
failure to act by Shelbourne Management (or PCIC, if applicable) under the
Agreement, and that the Partnership and any person claiming by, through or under
the Partnership shall be entitled to indemnification, out of any and all amounts
otherwise distributable to the Holders of Class A Units, against all costs and
expenses incurred in defending against any claims asserted by a Holder of a
Class A Unit in violation of this Section 9(c).
7
Section 10. Record Holders. The General Partner may deem and treat
the record holder (the "Holder") of any Class A Units as the true and lawful
owner thereof for all purposes, and the General Partner shall not be affected by
any notice to the contrary.
Section 11. Negative Covenants. So long as any Class A Units remain
outstanding, none of Parent, the General Partner or the Partnership shall,
without the affirmative vote of at least 66-2/3% of the votes entitled to be
cast by the Holders of Class A Units at the time outstanding, given in person or
by proxy, either in writing without a meeting or by vote at any meeting called
for the purpose (an "Affirmative Vote"):
(a) Limitation on Issuing Preferred Equity. Issue any Capital
Interests in the Partnership constituting either Partnership Senior Units or
Partnership Parity Units.
(b) Limitation on Fundamental Changes. Consolidate or merge
with any other Person, sell, convey, assign, transfer, lease or otherwise
dispose of all or substantially all its properties and assets as an entirety in
one transaction or a series of transactions to any Person (any such transaction,
a "Fundamental Change"), except that (i) Parent may liquidate under the Plan of
Liquidation and the Partnership may distribute assets as provided in the
Agreement, provided in each case that all required distributions to the Holders
of the Class A Units are made as provided herein, and (ii) Parent may make any
other Fundamental Change if, with respect to such other Fundamental Change (x)
either (i) Parent shall be the continuing corporation or (ii) such Person shall
be a corporation, partnership or trust organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia, (y)
such transaction shall not cause a Material Event to exist and (z) such
transaction is not reasonably likely to adversely affect the tax position of the
Holders of the Class A Preferred Units.
(c) Limitation on Modifications of Agreements. Amend,
supplement, terminate, waive or otherwise modify this Amended and Restated
Partnership Unit Designation or amend, supplement, terminate, waive or otherwise
modify in any material respect the provisions of the Governing Documents of
Parent, the General Partner or the Partnership (1) if such action would cause a
Material Event to exist or (2) if such amendment or other action directly and
materially adversely affects the voting powers, transferability, economic
rights, limitations on liability, tax position or preferences, or increase the
obligations, of the Holders of the Class A Units; provided, however, that (i)
the amendment of the provisions of the Partnership Agreement so as to authorize
or create, or to increase the authorized amount of, any Partnership Junior Units
shall not be deemed to adversely affect the voting powers, transferability,
economic rights, limitations on liability, tax position or preferences, or
increase the obligations, of the Holders of Class A Units and (ii) any filing
with the Secretary of State of the State of Delaware by Parent in connection
with a merger, consolidation or sale of all or substantially all of the assets
of Parent (subject to the limitations contained in paragraph (b) of this Section
11 hereof and compliance with the other provisions of this Amended and Restated
Partnership Unit Designation) which do not alter the terms of this Partnership
Unit Designation shall not be deemed to be an amendment, alteration or repeal of
any of the provisions of the Governing Documents of Parent.
8
(d) No Other Assets Owned by General Partner. Allow the
General Partner to own any assets other than the Partnership Common Units or
preferred units of the Partnership, or allow the General Partner to sell,
transfer, pledge or otherwise encumber the Partnership Common Units or preferred
units of the Partnership owned by the General Partner.
(e) Liquidation of General Partner. Allow Parent or the
General Partner to liquidate, dissolve or wind up at any time except in
accordance with the Plan of Liquidation and the Agreement.
(f) Investment Company Act. Make or restructure any Investment
which would result in any of Parent, the General Partner or the Partnership
being an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
(g) REOC Status. Allow the Partnership to lose its status as
an "operating company" under U. S. Department of Labor Regulation Section
2510.3-101, 29 C.F.R. ss.2550.3-101.
(h) Non-Publicly Traded Partnership. Take any action which
results in the Partnership becoming a "publicly traded partnership" for purposes
of Section 7704 of the Code.
Section 12. Notices and Reporting.
(a) The Partnership shall deliver to the Holders of the Class
A Units all reports and statements required to be delivered under Section 9.3 of
the Partnership Agreement.
(b) The Partnership shall promptly give notice to the Holders
of the Class A Units of the occurrence of any Unmatured Material Event or a
Material Event.
(c) Officer's Certificate. Each notice pursuant to Section
11(b) shall be accompanied by a statement of an officer of the General Partner
setting forth details of the occurrence referred to therein and stating what
action Parent, the Partnership or the General Partner, as applicable, proposes
to take with respect thereto.
9
Section 13. Material Events. If any of the following events shall
occur and be continuing:
(a) If any quarterly distributions payable on the Class A
Preferred Stock shall not be paid in full when due, whether or not earned or
declared (a "Distribution Nonpayment Event");
(b) Parent, the General Partner or the Partnership shall fail
to observe or perform of any other agreement contained in this Partnership Unit
Designation, other than a failure caused by Shelbourne Management in its
capacity as the managing member of Xxxxxxxxxx XX LLC, and such failure shall
continue unremedied for a period of 30 days after notice from any Holders of
Class A Units; or
(c) The General Partner ceases to be the sole general partner
of the Partnership,
then, and in any such event, the then applicable Distribution Rate shall be
increased by 2.5% per annum for the period during which such Material Event
continues (which increased rate shall also be payable on accumulated and unpaid
distributions); provided, that, during the continuance of a Distribution
Nonpayment Event, the Distribution Rate shall be adjusted to reflect compounding
through the date on which the distribution to which such Distribution Nonpayment
Event relates is paid, with the compounding to be calculated as if the
Liquidation Preference had been increased by the amount of such distribution as
of the date on which such Distribution Nonpayment Event occurred (or, if such
distribution shall remain unpaid through successive Distribution Periods, on
such successive Distribution Dates) and with any distribution that is made after
its required Distribution Date being deemed to be in respect of the earliest
Dividend Date for which distributions shall not have been paid in full.
Section 14. Parent and General Partner Limitations.
(a) So long as any Class A Preferred Units are outstanding, no
distributions (other than distributions that are required in order to maintain
the qualification of Parent as a real estate investment trust within the meaning
of section 856(a) of the Code or that are paid solely in Common Shares of, or
options, warrants or rights to subscribe for or purchase Common Shares) shall be
authorized and declared or paid or set apart for payment or other distribution
or dividend authorized or made upon Common Shares, nor shall any Common Shares
be redeemed, purchased or otherwise acquired (other than redemptions, purchases
or other acquisitions that are required in order to maintain the qualification
of Parent as a real estate investment trust within the meaning of section 856(a)
of the Code or that are paid solely in Common Shares of, or options, warrants or
rights to subscribe for or purchase Common Shares), for any consideration (or
any moneys to be paid to or made available for a sinking fund for the redemption
of any such Common Shares) by Parent (other than payments in order to enable
Parent to pay organizational, accounting, legal, administrative and reporting
expenses and other fees and expenses in connection with the operations of Parent
as a public company and as a real estate investment trust within the meaning of
section 856(a) of the Code), unless in each case (i) the full cumulative
distributions on all outstanding Class A Units and any other Partnership Parity
Units shall have been paid or set apart for payment for all past Distribution
Periods with respect to the Class A Units and all past distribution periods with
respect to such Partnership Parity Units and (ii) sufficient funds shall have
been paid or set apart for the payment of the distribution for the current
Distribution Period with respect to the Class A Units and any Partnership Parity
Units.
10
(b) In the event of any liquidation, dissolution or winding up
of Parent or the General Partner, whether voluntary or involuntary, before any
payment or distribution of the assets of Parent or the General Partner (whether
capital or surplus) shall be made to or set apart for the holders of Common
Shares, the Holders of Class A Preferred Units shall be entitled to receive all
distributions (whether or not earned or declared) accrued and unpaid thereon to
the date of final distribution to such shareholder. If, upon any such
liquidation, dissolution or winding up of Parent or the General Partner, the
assets of Parent or the General Partner, or proceeds thereof, distributable
among the Holders of Class A Units shall be insufficient to pay in full the
preferential amount aforesaid and liquidating payments on any other Partnership
Parity Units, then such assets, or the proceeds thereof, shall be distributed
among the Holders of such Class A Units and any such other Partnership Parity
Units ratably in accordance with the respective amounts that would be payable on
such Class A Units and any such other Partnership Parity Units if all amounts
payable thereon were paid in full.
Section 15. REIT Qualification. No provision in this Amended and
Restated Partnership Units Designation shall be construed or interpreted in a
manner that would adversely affect the qualification of Parent as a real estate
investment trust within the meaning of section 856(a) of the Code.
Section 16. REIT Liquidation. Notwithstanding anything to the
contrary contained in this Amended and Restated Partnership Unit Designation,
the Partnership, the General Partner and the Parent may take any action required
or permitted by the Agreement, and any such action shall not be a Material Event
hereunder. In the event of any inconsistency between the provisions of the
Agreement and this Amended and Restated Partnership Unit Designation, the
provisions of the Agreement shall control.
Section 17. Additional Capital Contributions. As a condition of
becoming a Holder of Class A Units, each Holder of Class A Units, together with
Shelbourne Management, shall be jointly and severally liable to make the capital
contributions called for by Section 9(b) of the Agreement if, as and when such
capital contributions are required to be made. If the capital contributions
required by Section 11 of the Agreement are not timely made, the election made
pursuant to Section 7(b) for the immediately preceding calendar year shall be
deemed null and void.
SECOND: This Amended and Restated Partnership Unit Designation has
been approved by the General Partner, both in its individual capacity and in its
capacity as General Partner of the Partnership.
11
THIRD: The undersigned acknowledges that this Amended and Restated
Partnership Unit Designation to be the corporate act of the General Partner, as
general partner of the Partnership and in its individual capacity and, as to all
matters or facts required to be verified under oath, the undersigned
acknowledges that to the best of his or her knowledge, information and belief,
these matters and facts are true in all material respects and that this
statement is made under the penalties for perjury. Each of Parent and the
General Partner, in its individual capacity, is executing and delivering this
Amended and Restated Partnership Unit Designation to confirm each of its
covenants and other obligations hereunder (including, without limitation, under
Section 14 hereof) and its agreement to be personally bound hereby.
FOURTH: Shelbourne Management, by executing and delivering this
Amended and Restated Partnership Unit Designation, acknowledges and confirms
that all distributions required to have been made by the Partnership to the
holders of the 5% Class A Preferred Partnership Units under the Partnership Unit
Designation through December 31, 2002 have been made and, to the best of its
knowledge, information and belief, there is no default thereunder as of the date
hereof.
12
IN WITNESS WHEREOF, each of Parent and the General Partner has
executed this Amended and Restated Partnership Unit Designation in its
individual capacity and the General Partner has executed this Amended and
Restated Partnership Unit Designation in its capacity as the sole General
Partner of the Partnership on this 15th day of January, 2003.
SHELBOURNE PROPERTIES II GP, LLC,
INDIVIDUALLY AND AS GENERAL PARTNER
BY: SHELBOURNE PROPERTIES II, INC.,
its Sole Member
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President
SHELBOURNE PROPERTIES II, INC., INDIVIDUALLY
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President
Solely for purposes of acknowledging Article
FOURTH:
SHELBOURNE MANAGEMENT COMPANY LLC
By: PRESIDIO CAPITAL INVESTMENT COMPANY,
LLC, its Sole Member
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
EXHIBIT E-3
SHELBOURNE PROPERTIES III, L.P.
AMENDED AND RESTATED
PARTNERSHIP UNIT DESIGNATION OF THE
CLASS A PREFERRED PARTNERSHIP UNITS
5% CLASS A PREFERRED PARTNERSHIP UNITS
(NO LIQUIDATION PREFERENCE)
(FORMERLY, 5% CLASS A PREFERRED PARTNERSHIP UNITS,
LIQUIDATION PREFERENCE $1,000 PER UNIT)
WHEREAS, under a power contained in Section 4.2 of the Second
Amended and Restated Agreement of Limited Partnership of Shelbourne Properties
III, L.P., a Delaware limited partnership (the "Partnership"), dated as of April
16, 2001 (as amended from time to time, the "Partnership Agreement"), Shelbourne
Properties III GP, Inc., a Delaware corporation (the "General Partner"), as the
general partner of the Partnership, by a resolution of the Board of Directors of
the General Partner, dated February 14, 2002, classified and designated 672.178
units as 5% Class A Preferred Partnership Units, liquidation preference $1,000
per unit, with the preferences, voting powers, restrictions, limitations as to
distributions, qualifications, terms and conditions of redemption and other
rights set forth in a Partnership Unit Designation with respect thereto, dated
February 14, 2002 (the "Partnership Unit Designation");
WHEREAS, the holders of the 5% Class A Preferred Partnership Units
and the Partnership have agreed to redesignate the 5% Class A Preferred
Partnership Units as "5% Class A Preferred Partnership Units (no liquidation
preference)" and to amend and restate the Partnership Unit Designation to
reflect the preferences, voting powers, restrictions, limitations as to
distributions, qualifications, terms and conditions of redemption and other
rights of such redesignated class; and
WHEREAS, this Amended and Restated Partnership Unit Designation
shall become effective upon the effectiveness of the Agreement (as hereinafter
defined).
NOW THEREFORE, the Partnership hereby certifies as follows:
FIRST: Under a power contained in Section 4.2 of the Partnership
Agreement, the General Partner, by a resolution of the Board of Directors of the
General Partner, dated January 6, 2003, classified and redesignated the 672.178
units of Class A Preferred Partnership Units, liquidation preference $1,000 per
unit, as "Class A Preferred Partnership Units (no liquidation preference)" with
the following preferences, voting powers, restrictions, limitations as to
distributions, qualifications, terms and conditions of redemption and other
rights. This Amended and Restated Partnership Unit Designation shall be
attached, made an exhibit to, and made a part of, the Partnership Agreement and
shall be deemed for all purposes an amendment of the Partnership Agreement.
Section 1. Redesignation. The class of Partnership Preferred Units
heretofore designated as "5% Class A Preferred Partnership Units, liquidation
preference $1,000 per unit" (the "Class A Preferred Units"), shall hereafter be
designated as "5% Class A Preferred Partnership Units (no liquidation
preference)" (the "Class A Units"). The holders of 672.178 units constituting
such class shall no longer be afforded any rights as holders of Class A
Preferred Units and shall hereafter be afforded only the rights set forth in
this Amended and Restated Partnership Unit Designation with respect to such
units. The Class A Units shall be limited partnership interests in the
Partnership.
Section 2. Definitions. Terms defined in the Partnership Agreement
and not otherwise defined herein shall have the respective meanings ascribed to
such terms in the Partnership Agreement and the following terms shall have the
meanings indicated:
"Affirmative Vote" shall have the meaning set forth in Section 11
hereof.
"Agreement" shall mean the Agreement, dated the date hereof, by and
among the Partnership, Parent, Shelbourne Management Company LLC, and certain
other parties.
"Amended and Restated Partnership Unit Designation" shall mean this
Amended and Restated Partnership Unit Designation, as the same may be amended or
modified from time to time in accordance with the terms hereof.
"Base Amount" shall mean $1,000 per unit.
"Capital Interests" shall mean any shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all units or interests, participations (however designated) or other
equivalents of a partnership and any and all equivalent ownership interests in a
Person (other than a partnership or a corporation) and any and all warrants or
options to purchase any of the foregoing.
"Class A Preferred Units" shall have the meaning set forth in
Section 1 hereof.
"Class A Units" shall have the meaning set forth in Section 1
hereof.
"Common Shares" shall mean the common shares, par value $.01 per
share (or any equivalent thereof), of Shelbourne Properties III, Inc.
"Distribution Nonpayment Event" shall have the meaning set forth in
paragraph (a) of Section 13.
"Distribution Payment Date" shall mean the first calendar day of
January, April, July and October, in each year, commencing with the first of
such calendar months occurring after the Issue Date; provided, however, that if
any Distribution Payment Date falls on any day other than a Business Day, the
distribution due on such Distribution Payment Date shall be paid on the first
Business Day immediately following such Distribution Payment Date.
2
"Distribution Payment Record Date" shall have the meaning set forth
in paragraph (a) of Section 3 hereof.
"Distribution Periods" shall mean quarterly distribution periods
commencing on January 1, April 1, July 1 and October 1 of each year (other than
the initial Distribution Period, which shall commence on the Issue Date) and
ending on and including the day preceding the first day of the next succeeding
Distribution Period.
"Distribution Rate" shall mean 5% per annum.
"Fundamental Change" shall have the meaning set forth in paragraph
(b) of Section 11 hereof.
"General Partner" shall have the meaning set forth in the recitals
of this Amended and Restated Partnership Unit Designation.
"Governing Documents" as to any Person, shall mean its articles or
certificate of incorporation and by-laws, its partnership agreement, its
certificate of formation and operating agreement, and/or the other
organizational or governing documents of such Person.
"Holder" shall have the meaning set forth in Section 10 hereof.
"Issue Date" shall mean (i) the date of original issuance of a Class
A Preferred Unit when used with reference to the accrual and payment of
distributions as to such Class A Preferred Unit pursuant to Section 3 hereof and
(ii) February 14, 2002 for all other purposes under this Partnership Unit
Designation.
"Material Event" shall mean any of the events specified in Section
13, provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"Parent" shall mean Shelbourne Properties III, Inc.
"Partnership Agreement" shall have the meaning set forth in the
recitals of this Amended and Restated Partnership Unit Designation.
"Partnership Common Units" shall mean the "OP Units" as defined in
the Partnership Agreement, other than the Series A Preferred Units and any other
Units designated as Partnership Preferred Units.
"Partnership Junior Unit" shall have the meaning set forth in
paragraph (c) of Section 8 hereof.
3
"Partnership Parity Unit" shall have the meaning set forth in
paragraph (b) of Section 8 hereof.
"Partnership Preferred Units" shall mean preferred Units of the
Partnership.
"Partnership Senior Unit" shall have the meaning set forth in
paragraph (a) of Section 8 hereof.
"Plan of Liquidation" shall mean the plan of liquidation adopted by
Parent and made effective October 29, 2002.
"Purchase Agreement" shall mean the Purchase and Contribution
Agreement, dated as of February 14, 2002, to which the Partnership is a party.
"Set apart for payment" shall be deemed to include for all
Partnership Units (i) the recording by the Partnership in its accounting ledgers
of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of a distribution by the General Partner, the allocation of funds to
be so paid on any series or class of Partnership Units, and (ii) placing such
funds in a separate account or delivering such funds to a disbursing, paying or
other similar agent.
"Shelbourne Management" shall mean Shelbourne Management Company
LLC.
"Unmatured Material Event" means either of the events specified in
Section 13, whether or not any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied.
Section 3. Distributions.
(a) Subject to the priority rights of any Partnership Senior
Units, the Holders of Class A Units shall be entitled to receive, on each
Distribution Payment Date, distributions payable in cash, in an amount equal to
the Distribution Rate of the Base Amount per Class A Units plus the amount of
any distributions payable pursuant to Section 13 hereof. Distributions on the
Class A Units are cumulative from the most recent Distribution Payment Date on
which distributions have been paid (or, with respect to the first distribution,
from December 31, 2002). Each such distribution shall be payable in arrears,
commencing on the first Distribution Payment Date after December 31, 2002, to
the Holders of the Class A Units, as they appear on the records of the
Partnership, at the close of business on the applicable record date, which shall
be not more than 30 days preceding the applicable Distribution Payment Date (the
"Distribution Payment Record Date"), as shall be fixed by the General Partner.
Accrued and unpaid distributions for any past Distribution Periods may be
authorized and paid at any time, without reference to any regular Distribution
Payment Record Date, to the Holders of the Class A Preferred Units on such date,
not exceeding 45 days preceding the payment date thereof, as may be fixed by the
General Partner.
4
(b) The amount of distributions payable for the initial
Distribution Period, or any other period shorter or longer than a full
Distribution Period, on the Class A Units shall be computed on the basis of
twelve 30-day months and a 360-day year. Except as provided herein, no interest,
or sum of money in lieu of interest, shall be payable in respect of any
distribution payment or payments on the Class A Units that may be in arrears.
(c) So long as any Class A Units are outstanding, no
distributions, except as described in the immediately following sentence, shall
be authorized and declared or paid or set apart for payment on any series or
class or classes of Partnership Parity Units for any period unless full
cumulative distributions have been or contemporaneously are authorized and paid
or authorized and a sum sufficient for the payment thereof set apart for such
payment on the Class A Units for all Distribution Periods terminating on or
prior to the most recent Distribution Payment Date on such class or series of
Partnership Parity Units. When distributions are not paid in full or a sum
sufficient for such payment is not set apart, as aforesaid, all distributions
authorized upon Class A Units and all distributions authorized upon any other
series or class or classes of Partnership Parity Units shall be authorized and
made ratably in proportion to the respective amounts of distributions
accumulated and unpaid on the Class A Units and such Partnership Parity Units.
(d) So long as any Class A Units are outstanding, no
distributions (other than distributions that are required in order to maintain
the qualification of Parent as a real estate investment trust within the meaning
of section 856(a) of the Code or that are paid solely in, or options, warrants
or rights to subscribe for or purchase, Partnership Junior Units) shall be
authorized and declared or paid or set apart for payment or other distribution
authorized or made upon Partnership Junior Units, nor shall any Partnership
Junior Units be redeemed, purchased or otherwise acquired (other than
redemptions, purchases or other acquisitions that are required in order to
maintain the qualification of Parent as a real estate investment trust within
the meaning of section 856(a) of the Code or that are paid solely in, or
options, warrants or rights to subscribe for or purchase, Partnership Junior
Units), for any consideration (or any moneys to be paid to or made available for
a sinking fund for the redemption of any Partnership Junior Units) by the
Partnership (other than payments in order to enable Parent to pay
organizational, accounting, legal, administrative and reporting expenses and
other fees and expenses in connection with the operations of Parent as a public
company and as a real estate investment trust within the meaning of Section
856(a) of the Code), unless in each case (i) the full cumulative distributions
on all outstanding Class A Units and any other Partnership Parity Units shall
have been paid or set apart for payment for all past Distribution Periods with
respect to the Class A Units and all past distribution periods with respect to
such Partnership Parity Units and (ii) sufficient funds shall have been paid or
set apart for the payment of the distribution for the current Distribution
Period with respect to the Class A Units and any Partnership Parity Units.
(e) Notwithstanding anything to the contrary in the preceding
provisions of this Section 3, all cash flow and proceeds from any New Property
(as defined in the Agreement) shall be distributed to the Holders of the Class A
Units in proportion to the numbers of Class A Units held by such Holders.
5
Section 4. No Liquidation Preference. Until the Complete Redemption
(as defined in the Agreement), the Class A Units shall not be entitled to any
liquidation preference or other payment upon the liquidation, dissolution or
winding up of the Partnership, apart from distributions as provided in the
Agreement or in Section 3 hereof.
Section 5. No Conversion Rights. Holders of Class A Unit shall not
have the right to convert any portion of such units into Partnership Common
Units, Common Shares or any other securities.
Section 6. No Redemption Right. The Class A Units shall not be
redeemable either at the election of the Holder or the Partnership, except that
the Partnership may retire the Class A Units following their reacquisition
pursuant to Section 4(a) of the Agreement.
Section 7. Allocations.
(a) To the extent permitted by Treasury Regulation
1.752-3(a)(3), any "excess nonrecourse liabilities" (as defined in said Treasury
Regulation) attributable to (i) the ACCOR Property, for the period that it is a
Restricted Asset (as such terms are defined in the Agreement), and (ii) from and
after the closing of the New Transaction and the acquisition of the New Property
subject to the New Indebtedness (as such terms are defined in the Agreement),
the New Property, shall be allocated to the Holders of Class A Units.
(b) For each calendar year for which an election is made in
accordance with this Section 7(b), Holders of Class A Units shall be allocated
all income and deductions attributable to (i) the ACCOR Property, for the period
that is a Restricted Asset, and (ii) from and after the closing of the New
Transaction and the acquisition of the New Property subject to the New
Indebtedness, the New Property. The election referred to in the immediately
preceding sentence shall be made by not later than December 31st of the
applicable calendar year, by delivery by Shelbourne Management to each of the
Partnership (on behalf of all Holders of Class A Units), Shelbourne Properties
I, L.P. (on behalf of all holders of Class A Units therein) and Shelbourne
Properties II, L.P. (on behalf of all holders of Class A Units therein) of
written notice electing such allocation for such calendar year.
Section 8. Ranking. Any class or series of Units shall be deemed to
rank:
(a) senior to the Class A Units, as to the payment of
distributions or as to the distribution of assets upon liquidation, dissolution
or winding up, if the holders of such Units shall be entitled to receipt of
distributions or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the Holders of
Class A Preferred Units ("Partnership Senior Units");
6
(b) on a parity with the Class A Preferred Units, as to the
payment of distributions and as to the distribution of assets upon liquidation,
dissolution or winding up, whether or not the distribution rates, distribution
payment dates or redemption or liquidation prices per Unit thereof are different
from those of the Class A Preferred Units, if the holders of such class or
series of Units and the Class A Preferred Units shall be entitled to the receipt
of distributions and of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of accrued and unpaid
distributions per Unit or liquidation preferences, without preference or
priority one over the other ("Partnership Parity Units"); and
(c) subject to Section 3(d), junior to the Class A Preferred
Units, as to the payment of distributions or as to the distribution of assets
upon liquidation, dissolution or winding up, if they are Partnership Common
Units or the Holders of Class A Preferred Units shall be entitled to receipt of
distributions or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the Holders of
Partnership Units of such class or series, and such class or series shall not in
either case rank prior to the Class A Preferred Units ("Partnership Junior
Units").
Section 9. Voting.
(a) Except as otherwise set forth herein or in the Partnership
Agreement, the Class A Units shall not have any relative, participating,
optional or other special voting rights and powers, and the consent of the
Holders thereof shall not be required for the taking of any partnership action.
Notwithstanding anything to the contrary contained in the Partnership Agreement,
this Amended and Restated Partnership Unit Designation shall not be amended
without the consent of 66-2/3% of the votes entitled to be cast by the Holders
of Class A Units at the time outstanding.
(b) For any matter requiring a vote of the Holders of the
Class A Units, each Class A Unit shall have one vote per share, except that when
any other series of Partnership Preferred Units shall have the right to vote
with the Class A Units as a single class on any matter, then the Class A Units
and such other series shall have with respect to such matters one vote per
$1,000 of stated liquidation preference (or, with respect to Class A Units, the
Base Amount with respect to such Class A Units).
(c) As a condition of becoming a Holder of Class A Units, each
Holder of Class A Units hereby irrevocably appoints Shelbourne Management (or
whenever there is more than one Holder of Class A Units, and Shelbourne
Management is no longer a Holder of Class A Units, Presidio Capital Investment
Company, LLC ("PCIC")) as its sole and exclusive attorney in fact, which shall
be coupled with an interest, to take all actions on behalf of and in the name of
such Holder under the Agreement. Each Holder of Class A Units acknowledges and
agrees that it shall have no cause of action or recourse against any person
(other than Shelbourne Management (or PCIC, if applicable)) for any action or
failure to act by Shelbourne Management (or PCIC, if applicable) under the
Agreement, and that the Partnership and any person claiming by, through or under
the Partnership shall be entitled to indemnification, out of any and all amounts
otherwise distributable to the Holders of Class A Units, against all costs and
expenses incurred in defending against any claims asserted by a Holder of a
Class A Unit in violation of this Section 9(c).
7
Section 10. Record Holders. The General Partner may deem and treat
the record holder (the "Holder") of any Class A Units as the true and lawful
owner thereof for all purposes, and the General Partner shall not be affected by
any notice to the contrary.
Section 11. Negative Covenants. So long as any Class A Units remain
outstanding, none of Parent, the General Partner or the Partnership shall,
without the affirmative vote of at least 66-2/3% of the votes entitled to be
cast by the Holders of Class A Units at the time outstanding, given in person or
by proxy, either in writing without a meeting or by vote at any meeting called
for the purpose (an "Affirmative Vote"):
(a) Limitation on Issuing Preferred Equity. Issue any Capital
Interests in the Partnership constituting either Partnership Senior Units or
Partnership Parity Units.
(b) Limitation on Fundamental Changes. Consolidate or merge
with any other Person, sell, convey, assign, transfer, lease or otherwise
dispose of all or substantially all its properties and assets as an entirety in
one transaction or a series of transactions to any Person (any such transaction,
a "Fundamental Change"), except that (i) Parent may liquidate under the Plan of
Liquidation and the Partnership may distribute assets as provided in the
Agreement, provided in each case that all required distributions to the Holders
of the Class A Units are made as provided herein, and (ii) Parent may make any
other Fundamental Change if, with respect to such other Fundamental Change (x)
either (i) Parent shall be the continuing corporation or (ii) such Person shall
be a corporation, partnership or trust organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia, (y)
such transaction shall not cause a Material Event to exist and (z) such
transaction is not reasonably likely to adversely affect the tax position of the
Holders of the Class A Preferred Units.
(c) Limitation on Modifications of Agreements. Amend,
supplement, terminate, waive or otherwise modify this Amended and Restated
Partnership Unit Designation or amend, supplement, terminate, waive or otherwise
modify in any material respect the provisions of the Governing Documents of
Parent, the General Partner or the Partnership (1) if such action would cause a
Material Event to exist or (2) if such amendment or other action directly and
materially adversely affects the voting powers, transferability, economic
rights, limitations on liability, tax position or preferences, or increase the
obligations, of the Holders of the Class A Units; provided, however, that (i)
the amendment of the provisions of the Partnership Agreement so as to authorize
or create, or to increase the authorized amount of, any Partnership Junior Units
shall not be deemed to adversely affect the voting powers, transferability,
economic rights, limitations on liability, tax position or preferences, or
increase the obligations, of the Holders of Class A Units and (ii) any filing
with the Secretary of State of the State of Delaware by Parent in connection
with a merger, consolidation or sale of all or substantially all of the assets
of Parent (subject to the limitations contained in paragraph (b) of this Section
11 hereof and compliance with the other provisions of this Amended and Restated
Partnership Unit Designation) which do not alter the terms of this Partnership
Unit Designation shall not be deemed to be an amendment, alteration or repeal of
any of the provisions of the Governing Documents of Parent.
8
(d) No Other Assets Owned by General Partner. Allow the
General Partner to own any assets other than the Partnership Common Units or
preferred units of the Partnership, or allow the General Partner to sell,
transfer, pledge or otherwise encumber the Partnership Common Units or preferred
units of the Partnership owned by the General Partner.
(e) Liquidation of General Partner. Allow Parent or the
General Partner to liquidate, dissolve or wind up at any time except in
accordance with the Plan of Liquidation and the Agreement.
(f) Investment Company Act. Make or restructure any Investment
which would result in any of Parent, the General Partner or the Partnership
being an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
(g) REOC Status. Allow the Partnership to lose its status as
an "operating company" under U. S. Department of Labor Regulation Section
2510.3-101, 29 C.F.R. ss.2550.3-101.
(h) Non-Publicly Traded Partnership. Take any action which
results in the Partnership becoming a "publicly traded partnership" for purposes
of Section 7704 of the Code.
Section 12. Notices and Reporting.
(a) The Partnership shall deliver to the Holders of the Class
A Units all reports and statements required to be delivered under Section 9.3 of
the Partnership Agreement.
(b) The Partnership shall promptly give notice to the Holders
of the Class A Units of the occurrence of any Unmatured Material Event or a
Material Event.
(c) Officer's Certificate. Each notice pursuant to Section
11(b) shall be accompanied by a statement of an officer of the General Partner
setting forth details of the occurrence referred to therein and stating what
action Parent, the Partnership or the General Partner, as applicable, proposes
to take with respect thereto.
9
Section 13. Material Events. If any of the following events shall
occur and be continuing:
(a) If any quarterly distributions payable on the Class A
Preferred Stock shall not be paid in full when due, whether or not earned or
declared (a "Distribution Nonpayment Event");
(b) Parent, the General Partner or the Partnership shall fail
to observe or perform of any other agreement contained in this Partnership Unit
Designation, other than a failure caused by Shelbourne Management in its
capacity as the managing member of Xxxxxxxxxx XX LLC, and such failure shall
continue unremedied for a period of 30 days after notice from any Holders of
Class A Units; or
(c) The General Partner ceases to be the sole general partner
of the Partnership,
then, and in any such event, the then applicable Distribution Rate shall be
increased by 2.5% per annum for the period during which such Material Event
continues (which increased rate shall also be payable on accumulated and unpaid
distributions); provided, that, during the continuance of a Distribution
Nonpayment Event, the Distribution Rate shall be adjusted to reflect compounding
through the date on which the distribution to which such Distribution Nonpayment
Event relates is paid, with the compounding to be calculated as if the
Liquidation Preference had been increased by the amount of such distribution as
of the date on which such Distribution Nonpayment Event occurred (or, if such
distribution shall remain unpaid through successive Distribution Periods, on
such successive Distribution Dates) and with any distribution that is made after
its required Distribution Date being deemed to be in respect of the earliest
Dividend Date for which distributions shall not have been paid in full.
Section 14. Parent and General Partner Limitations.
(a) So long as any Class A Preferred Units are outstanding, no
distributions (other than distributions that are required in order to maintain
the qualification of Parent as a real estate investment trust within the meaning
of section 856(a) of the Code or that are paid solely in Common Shares of, or
options, warrants or rights to subscribe for or purchase Common Shares) shall be
authorized and declared or paid or set apart for payment or other distribution
or dividend authorized or made upon Common Shares, nor shall any Common Shares
be redeemed, purchased or otherwise acquired (other than redemptions, purchases
or other acquisitions that are required in order to maintain the qualification
of Parent as a real estate investment trust within the meaning of section 856(a)
of the Code or that are paid solely in Common Shares of, or options, warrants or
rights to subscribe for or purchase Common Shares), for any consideration (or
any moneys to be paid to or made available for a sinking fund for the redemption
of any such Common Shares) by Parent (other than payments in order to enable
Parent to pay organizational, accounting, legal, administrative and reporting
expenses and other fees and expenses in connection with the operations of Parent
as a public company and as a real estate investment trust within the meaning of
section 856(a) of the Code), unless in each case (i) the full cumulative
distributions on all outstanding Class A Units and any other Partnership Parity
Units shall have been paid or set apart for payment for all past Distribution
Periods with respect to the Class A Units and all past distribution periods with
respect to such Partnership Parity Units and (ii) sufficient funds shall have
been paid or set apart for the payment of the distribution for the current
Distribution Period with respect to the Class A Units and any Partnership Parity
Units.
10
(b) In the event of any liquidation, dissolution or winding up
of Parent or the General Partner, whether voluntary or involuntary, before any
payment or distribution of the assets of Parent or the General Partner (whether
capital or surplus) shall be made to or set apart for the holders of Common
Shares, the Holders of Class A Preferred Units shall be entitled to receive all
distributions (whether or not earned or declared) accrued and unpaid thereon to
the date of final distribution to such shareholder. If, upon any such
liquidation, dissolution or winding up of Parent or the General Partner, the
assets of Parent or the General Partner, or proceeds thereof, distributable
among the Holders of Class A Units shall be insufficient to pay in full the
preferential amount aforesaid and liquidating payments on any other Partnership
Parity Units, then such assets, or the proceeds thereof, shall be distributed
among the Holders of such Class A Units and any such other Partnership Parity
Units ratably in accordance with the respective amounts that would be payable on
such Class A Units and any such other Partnership Parity Units if all amounts
payable thereon were paid in full.
Section 15. REIT Qualification. No provision in this Amended and
Restated Partnership Units Designation shall be construed or interpreted in a
manner that would adversely affect the qualification of Parent as a real estate
investment trust within the meaning of section 856(a) of the Code.
Section 16. REIT Liquidation. Notwithstanding anything to the
contrary contained in this Amended and Restated Partnership Unit Designation,
the Partnership, the General Partner and the Parent may take any action required
or permitted by the Agreement, and any such action shall not be a Material Event
hereunder. In the event of any inconsistency between the provisions of the
Agreement and this Amended and Restated Partnership Unit Designation, the
provisions of the Agreement shall control.
Section 17. Additional Capital Contributions. As a condition of
becoming a Holder of Class A Units, each Holder of Class A Units, together with
Shelbourne Management, shall be jointly and severally liable to make the capital
contributions called for by Section 9(b) of the Agreement if, as and when such
capital contributions are required to be made. If the capital contributions
required by Section 11 of the Agreement are not timely made, the election made
pursuant to Section 7(b) for the immediately preceding calendar year shall be
deemed null and void.
SECOND: This Amended and Restated Partnership Unit Designation has
been approved by the General Partner, both in its individual capacity and in its
capacity as General Partner of the Partnership.
11
THIRD: The undersigned acknowledges that this Amended and Restated
Partnership Unit Designation to be the corporate act of the General Partner, as
general partner of the Partnership and in its individual capacity and, as to all
matters or facts required to be verified under oath, the undersigned
acknowledges that to the best of his or her knowledge, information and belief,
these matters and facts are true in all material respects and that this
statement is made under the penalties for perjury. Each of Parent and the
General Partner, in its individual capacity, is executing and delivering this
Amended and Restated Partnership Unit Designation to confirm each of its
covenants and other obligations hereunder (including, without limitation, under
Section 14 hereof) and its agreement to be personally bound hereby.
FOURTH: Shelbourne Management, by executing and delivering this
Amended and Restated Partnership Unit Designation, acknowledges and confirms
that all distributions required to have been made by the Partnership to the
holders of the 5% Class A Preferred Partnership Units under the Partnership Unit
Designation through December 31, 2002 have been made and, to the best of its
knowledge, information and belief, there is no default thereunder as of the date
hereof.
12
IN WITNESS WHEREOF, each of Parent and the General Partner has
executed this Amended and Restated Partnership Unit Designation in its
individual capacity and the General Partner has executed this Amended and
Restated Partnership Unit Designation in its capacity as the sole General
Partner of the Partnership on this 15th day of January, 2003.
SHELBOURNE PROPERTIES III GP, INC.,
INDIVIDUALLY AND AS GENERAL PARTNER
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President
SHELBOURNE PROPERTIES III, INC.,
INDIVIDUALLY
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President
Solely for purposes of acknowledging Article
FOURTH:
SHELBOURNE MANAGEMENT COMPANY LLC
By: PRESIDIO CAPITAL INVESTMENT COMPANY,
LLC, its Sole Member
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
EXHIBIT F
Reacquisition Price
(all amounts are in thousands)
Period Shelbourne I OP Shelbourne II OP Shelbourne III OP
------ --------------- ---------------- -----------------
11/14/02 - 2/13/03 $5,287 $6,603 $4,374
2/14/03 - 5/13/03 $4,889 $6,106 $4,044
5/14/03 - 8/13/03 $4,503 $5,624 $3,725
8/14/03 - 11/13/03 $4,128 $5,156 $3,415
11/14/03 - 2/13/04 $3,766 $4,703 $3,115
2/14/04- 5/13/04 $3,415 $4,264 $2,864
5/14/04 - 8/13/04 $3,074 $3,840 $2,543
8/14/04 - 11/13/04 $2,744 $3,427 $2,270
11/14/04 - 2/13/05 $2,425 $3,029 $2,006
2/14/05 - 5/13/05 $2,116 $2,642 $1,750
5/14/05 - 8/13/05 $1,816 $2,268 $1,502
8/14/05 - 11/13/05 $1,525 $1,905 $1,262
11/14/05 - 2/13/06 $1,244 $1,553 $1,029
2/14/06 - 5/13/06 $971 $1,213 $803
5/14/06 - 8/13/06 $708 $883 $585
8/14/06 - 11/13/06 $451 $563 $373
11/14/06 - 2/13/07 $203 $253 $168
EXHIBIT G-1
GUARANTY OF RECOURSE OBLIGATIONS (OWNER'S)
THIS GUARANTY OF RECOURSE OBLIGATIONS, dated as of July 30, 1999 (together
with all amendments and supplements hereto, this "Guaranty") made, jointly and
severally, by AP/RH HOLDINGS LLC, a Delaware limited liability company, and the
following individua1s: XXXXXXX X. XXXX, XXXXX X. XXXX, XXXXXX X. XXXXXX, XXXXX
XXXXXXX, XXXXXXXX X. XXXXX and XXXX XXXXXXX (collectively, "Guarantors" and
each, a "Guarantor") in favor of BERKSHIRE HATHAWAY CREDIT CORPORATION, a
Nebraska corporation, having an address at 0000 Xxxxxx, Xxxxx, Xxxxxxxx
(together with its successors and assigns, collectively referred to herein as
the "Beneficiary").
WITNESSETH:
WHEREAS, pursuant to that certain Promissory Note, dated of even date
herewith, executed by ACCOTEL Property Investors LLC, a Delaware limited
liability company ("Borrower"), and payable to the order of Beneficiary in the
original principal amount of Seventy-Three Million Seven Hundred Twenty Thousand
Dollars ($73,720,000.00) (together with all renewals, modifications, increases
and extensions thereof, the "Note"), Borrower has become indebted, and may from
time to time be further indebted, to Beneficiary with respect to a loan ("Loan")
which is secured by the lien and security interest of the Indenture of Mortgage,
Deed of Trust, Security Agreement, Fixture Filing, Financing Statement and
Assignment of Rents and Leases, of even date herewith (the "Indenture"), by
Borrower and Accotel Remainder LLC, a Delaware limited liability company
("Remainderman") in favor of Beneficiary or one or more trustees for the benefit
of Beneficiary and Beneficiary and further evidenced, secured or governed by
other instruments and documents executed in connection with the Loan (together
with the Note and Mortgage, the "Loan Documents"); and
WHEREAS, Beneficiary is not willing to make the Loan, or otherwise extend
credit, to Borrower unless Guarantors unconditionally guaranty payment and
performance to Beneficiary of the Obligations (as herein defined) in accordance
with the terms and conditions of this Guaranty; and
WHEREAS, Guarantors are the owners of a direct or indirect interest in
Borrower, and Guarantors will directly benefit from Beneficiary's making the
Loan to Borrower.
NOW, THEREFORE, as an inducement to Beneficiary to make the Loan to
Borrower, and for other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:
ARTICLE I
SECTION 1.1 Definitions and Rules of Usage. Each capitalized term not
otherwise defined herein shall have the meaning assigned thereto in the
Indenture. The rules of usage set forth in the Indenture shall apply hereto.
ARTICLE II
SECTION 2.1 Guaranty of Obligations Under Operative Documents. (a) Each
Guarantor absolutely, irrevocably and unconditionally guaranties to the
Beneficiary payment of the Obligations as and when the same shall be due and
payable. As used herein, the term "Obligations" means any and all loss, damage,
cost, expense, liability, claim or other obligation incurred by Beneficiary
(including attorneys" fees and costs of enforcing its obligations hereunder, but
excluding consequential damages) arising out of or in connection with the
following:
(i) fraud on the part of Borrower, Remainderman or any Partner, or
any claims against Borrower, Remainderman or any Partner under the
Racketeer Influences and Corrupt Organizations Act;
(ii) misappropriation by Borrower, Remainderman or any Partners, of
rents, security deposits and casualty or condemnation proceeds with
respect to any of the Mortgaged Properties, actually received by or at the
direction of any of them or any of their Affiliates;
(iii) knowing material misrepresentations by Borrower, Remainderman
or any Partners in the Loan Documents or any material untruth in any
certificate, instrument or written statement or other document supplied to
Beneficiary pursuant to or in connection with the Loan, including, without
limitation, in any financial statements of U.S. Realty Advisors, L.L.C.,
Borrower, Remainderman or any of their Affiliates, which may be provided
to Beneficiary in connection with the Loan;
(iv) voluntary breach of covenants in the Indenture restricting
Transfers of the Mortgaged Properties or Equity Interests in Borrower or
Remainderman or the voluntary creation of junior liens or the voluntary
incurrence of additional indebtedness not otherwise permitted under the
Indenture;
(v) wilful and material breach of the single purpose entity
covenants set forth in the Loan Documents but only in the event and to the
extent that any such breach shall result in the assertion by third party
creditors of the Partners of Borrower or Remainderman that the assets of
Borrower or Remainderman are subject to the claims of such creditors; and
(vi) Beneficiary's costs of enforcing any of the Loan Documents, but
only (x) to the extent such costs arise in connection with, or as a result
of, any defense, set-off claim or counterclaim asserted in connection with
such enforcement, and (y) if Borrower or Remainderman, as the case may be,
is not the prevailing party in such enforcement action.
(b) Notwithstanding anything to the contrary in any of the Loan Documents,
Beneficiary shall not be deemed to have waived any right which Beneficiary may
have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S.
Bankruptcy Code to file a claim for the full amount of the Indebtedness secured
by the Indenture or to require that all collateral shall continue to secure all
of the Indebtedness owing to Beneficiary in accordance with the Loan Documents.
2
(c) A Guarantor shall be released from such Guarantor's liabilities (other
than those accrued), as set forth in this Guaranty upon a Permitted Transfer to
an unrelated third party, provided that the principals of the Permitted
Transferee assume such obligations pursuant to documentation reasonably
satisfactory to Beneficiary and the identity and creditworthiness of such
principals is satisfactory to Beneficiary, in Beneficiary's reasonable
discretion, exercised in its good faith. Except as expressly set forth in the
immediately preceding sentence, each Guarantor shall continue to remain liable
hereunder, notwithstanding any Transfer which may be permitted under the
Indenture.
SECTION 2.2 Unconditional Obligations. This Guaranty is a primary
obligation of each Guarantor and is an unconditional, absolute, present and
continuing obligation and guaranty of payment (and not merely of collection) and
the validity and enforceability of this Guaranty shall be absolute and
unconditional and shall not be impaired, affected or in any way conditioned or
contingent upon, nor subject to any reduction, limitation, impairment,
termination, defense (other than the defense of prior payment or performance),
offset, counterclaim or recoupment whatsoever (all of which are hereby expressly
waived by Guarantors) irrespective of (a) the making of a demand, the
institution of suit or the taking of any other action to enforce performance, or
observance by Borrower or Remainderman of the Obligations, (b) the validity,
regularity or enforceability of any Operative Document or any of the Obligations
or any collateral security, other guaranty, if any, or credit support therefor
or right to offset with respect thereto at any time or from time to time held by
the Beneficiary, (c) any defense, set-off or counterclaim (other than the
defense of prior payment or performance) that may at any time be available to or
be asserted by Borrower, Remainderman or any Guarantor against the Beneficiary,
(d) any attempt to collect from Borrower or Remainderman or any other entity or
to perfect or enforce any security or (e) upon any other action, occurrence or
circumstances whatsoever which might otherwise constitute a defense available
to, or discharge of, a guarantor or surety of any type. This Guaranty may not be
revoked by any Guarantor and shall continue to be effective with respect to any
Obligations arising or created after any attempted revocation by any Guarantor
and after (if a Guarantor is a natural person) such Guarantor's death (in which
event this Guaranty shall be binding upon such Guarantor's estate and such
Guarantor's legal representatives and heirs). Each Guarantor waives any
requirement that the Beneficiary shall have instituted any suit, action or
proceeding or exhausted their remedies or taken any steps to enforce any rights
against Borrower or Remainderman or any other Person (inc1uding, without
limitation, any other Guarantor) or entity to compel any such performance or to
collect all or any part of such amount pursuant to the provisions of the
Operative Documents or at law or in equity, or otherwise, and regardless of any
other condition or contingency. Lender shall not be required to mitigate
damages, or take any other action to reduce the Obligations.
SECTION 2.3 Amendments, etc. with Respect to the Obligations. Guarantors
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against Guarantors and without notice to or further assent by
Guarantors, (a) any demand for payment or performance of any of the Obligations
made by the Beneficiary may be rescinded by the Beneficiary and any of the other
Obligations continue to be in effect; (b) the Indebtedness and the Obligations,
or the liability of any other party upon or for any part thereof, and any
collateral security or guaranty therefor or right of offset with respect
thereto, may be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by the Beneficiary; (c) any Operative Document,
or any collateral security document or other guaranty or document executed and
delivered in connection therewith or related thereto may be amended, modified,
supplemented or terminated, in accordance with its terms, as the parties thereto
may deem advisable; and (d) any collateral security, guaranty or right to offset
held by the Beneficiary for the payment or performance of the Indebtedness or
the Obligations may be sold, exchanged, waived, surrendered or released. For
purposes of this Section 2.3, "demand" shall include the commencement and
continuance of any legal proceedings.
3
SECTION 2.4 Guarantor's Obligations Not Affected. Each Guarantor expressly
agrees that the duties and obligations of such Guarantor under this Guaranty
shall remain in full force and effect without the necessity of any reservation
of rights against such Guarantor or notice to or further assent by such
Guarantor at any time and from time to time, in whole or in part, and without
regard to, and shall not be impaired, released, discharged, terminated abated,
deferred, diminished, modified or affected, in whole or in part, by any event,
condition, occurrence, circumstance, proceeding, action or failure to act, with
or without notice to, or the knowledge or consent of, such Guarantor, including,
without limitation:
(a) any extension, modification or renewal of, termination, addition or
supplement to, or deletion from, any of the terms of or indulgence with respect
to, or substitutions for, or forbearance of the Indebtedness or any part thereof
or any agreement relating thereto at any time, including, without limitation,
any of the Operative Documents;
(b) any failure, refusal or omission to enforce any right, power or remedy
with respect to the Indebtedness or any part thereof or any agreement relating
thereto at any time, including, without limitation, any of the Operative
Documents;
(c) any waiver of any right, power or remedy or of any default with
respect to the Indebtedness or any part thereof or any agreement relating
thereto at any time, including, without limitation, any or the Operative
Documents;
(d) any release, surrender, compromise, settlement, waiver, subordination
or modification, with or without consideration, of any other guaranties with
respect to the Indebtedness or the Obligations or any part thereof, or any other
obligation of any Person with respect to the Indebtedness or the Obligations or
any part thereof;
(e) the lack of genuineness, unenforceability or invalidity of the
Indebtedness or any part thereof or any agreement relating thereto at any time,
including, without limitation, any of the operative Documents;
(f) except as may be otherwise express1y provided in the Indenture, any
change in the ownership of Borrower or Remainderman or the insolvency,
bankruptcy or any other change in the legal status of Borrower, Remainderman or
any Guarantor or any rejection or modification of the obligations of Borrower or
Remainderman or those of any Person under the Operative Documents as a result of
any bankruptcy, reorganization, insolvency or similar proceeding;
4
(g) the change in or the imposition of any applicable laws and regulations
or other governmental act that does or might impair, delay or in any way affect
the validity, enforceability, or the payment when due of the Indebtedness or the
Obligations to the extent not prohibited by Applicable Laws and Regulations or
otherwise;
(h) the existence of any claim, set off or other rights or defenses (other
than the defense of prior payment or performance) that any Guarantor may have at
any time against Borrower or Remainderman or the Beneficiary or any other Person
in connection herewith or with an unrelated transaction and the existence of any
claim, setoff or other rights or defenses that Borrower or Remainderman may have
against any Guarantor, the Beneficiary or any other Person in connection with
the Operative Documents or with an unrelated transaction;
(i) any merger or consolidation of Borrower, Remainderman or any Guarantor
into or with any other Person, or except as may be otherwise expressly provided
in the Indenture, any sale, lease or transfer of any or all of the assets of
Borrower, Remainderman or any Guarantor to any other Person;
(j) the rights, powers or privileges the Beneficiary may now or hereafter
have against any Person or collateral;
(k) any defect in title, condition, operation or fitness of use of any
Property, any casualty or condemnation affecting any Property or any sublease,
assignment, renewal, extension or other transfer or continuation of Borrower's
or Remainderman's rights under the Operative Documents, whether in accordance
with the terms of the Operative Documents or otherwise;
(l) any exchange, surrender or release, in whole or in part, of any
security which may he held by the Beneficiary under the Operative Documents; or
(m) any other action, omission, occurrence or circumstance whatsoever
which may in any manner or to any extent vary the risk or effect a legal or
equitable defense or discharge of any Guarantor hereunder as a matter of law or
otherwise.
SECTION 2.5 Waiver by Guarantors. Each Guarantor unconditionally waives
and releases, to the fullest extent permitted by applicable laws and
regulations, any and all (a) notice of the acceptance of this Guaranty and of
any change in Borrower's or Remainderman's financial condition or of the
occurrence of any breach by Borrower or Remainderman under the Loan Documents or
any event of Default; (b) notices of the creation, renewal, extension or accrual
of any Obligation or any of the matters referred to in Section 2.04 hereof or
any notice of or proof of reliance by the Beneficiary upon this Guaranty or
acceptance of this Guaranty (the Indebtedness shall conclusively be deemed to
have been created, contracted, incurred, renewed, extended, amended or waived in
reliance upon this Guaranty and all dealings between Borrower, Remainderman or
any Guarantor and the Beneficiary shall be conclusively presumed to have been
had or consummated in reliance upon this Guaranty); (c) notices which may be
required by statute, rule of law or otherwise, now or hereafter in effect, to
preserve intact any rights of the Beneficiary against any Guarantor, (d) the
right to interpose all substantive and procedural defenses of the law of
guaranty, indemnification and suretyship, except the defenses of prior payment
or prior performance by Borrower, Remainderman or any Guarantor of the
Obligations;
5
(e) all rights end remedies accorded by applicable laws and regulations to
guarantors or sureties, including any extension of time conferred by any law now
or hereafter in effect; (f) any right or claim of right to cause a marshaling of
Borrower's or Remainderman's assets or to cause the Beneficiary to proceed
against Borrower or Remainderman or any collateral held by the Beneficiary at
any time or in any particular order; (g) rights to the endorsement, assertion or
exercise by the Beneficiary of any right, power, privilege or remedy conferred
herein or in any Operative Document or otherwise; (h) requirements of promptness
or diligence on the part of the Beneficiary; (i) any renewal, extension or
continuation of Borrower's or Remainderman's rights under the Operative
Documents or any notices of the sale, transfer or other disposition of any
right, title to or Interest in the Mortgaged Properties or any Operative
Document; (j) rights and defenses arising our of an election of remedies by the
Beneficiary, even though that election of remedies has destroyed Guarantors'
rights of subrogation and reimbursement against Borrower and/or Remainderman by
operation of law or otherwise; (k) other circumstances whatsoever (except the
defenses of prior payment or prior performance by Borrower, Remainderman or any
Guarantor of the Obligations) which might otherwise constitute a legal or
equitable discharge, release or defense of a guarantor or surety, or which might
otherwise limit recourse against any Guarantor; or (1) the right to interpose
any defense (except defense of prior payment or prior performance) set off or
counterclaim of any nature or description in any action or proceeding. No
failure to exercise and no delay in exercising, on the part of the Beneficiary,
any right, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege preclude
any other or further exercise thereof, or the exercise of any other power or
right. The rights and remedies herein provided are cumulative and not exclusive
of any rights or remedies provided by law.
SECTION 2.6 [Intentionally Omitted]
SECTION 2.7 Reinstatement. This Guaranty shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, in whole or in
part, of any of the indebtedness or the Obligations (i) is rescinded or must
otherwise be restored or returned by the Beneficiary upon the bankruptcy,
insolvency, reorganization, arrangement, adjustment, composition, dissolution,
liquidation or the like, of Borrower, Remainderman or any Guarantor, or as a
result of, the appointment of a custodian, receiver, trustee or other officer
with similar powers with respect to Borrower, Remainderman or any Guarantor or
any substantial part of either Person's respective property, or otherwise, or
(ii) is returned to Borrower, Remainderman or any Guarantor by reason of a
decree, moratorium or other sovereign act of any governmental authority, in each
case, all as though such payment had not been made notwithstanding any
termination of this Guaranty or any Operative Document;
ARTICLE III
SECTION 3.1 Representations and Warranties of Guarantor. Each Guarantor
hereby represents and warrants to the Beneficiary as of the Closing Date that:
6
(a) Benefit. Such Guarantor is the owner of a direct or indirect interest
in Borrower and Remainderman, and has received or will received direct or
indirect benefit from the making of the Loan.
(b) Authorizations. All acts, conditions, authorizations and other things
required to be done, fulfilled and performed by such Guarantor in order:
(i) to enable such Guarantor lawfully to enter into, exercise such
Guarantor's rights under and perform and comply with the obligations
expressed to be assumed by such Guarantor in this Guaranty; and
(ii) to ensure that the obligations expressed to be assumed by such
Guarantor in this Guaranty are legal, valid and binding and enforceable
against such Guarantor in accordance with the respective terms thereof;
have been done, fulfilled and performed and are in full force and effect.
(c) Legal Validity. This Guaranty has been duly executed and delivered by
such Guarantor. The obligations expressed to be assumed by such Guarantor in
this Guaranty are legal and valid obligations binding on it and enforceable in
accordance with the terms of this Guaranty except as such enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting creditors
generally and by general equitable principles. This Guaranty is in full force
and effect as of the Closing Date, not subject to any right of rescission,
setoff, counterclaim or defense by such Guarantor nor will the operation of any
of the terms of the Guaranty or the exercise of any right thereunder, render
this Guaranty unenforceable against such Guarantor, in whole or in part, or
subject to any right of rescission, setoff, counterclaim or defense by such
Guarantor and such Guarantor has not asserted any right of rescission, setoff,
counterclaim or defense with respect thereto.
(d) Litigation. No action, suit, arbitration, governmental investigation,
or administrative proceeding of or before any court, tribunal, agency or other
governmental authority, is current, pending or to be the best of such
Guarantor's knowledge and belief threatened which might, if adversely
determined, (i) have a material adverse affect on such Guarantor's business, or
financial condition or its ability to perform its obligations hereunder or (ii)
restrain such Guarantor from entering into, exercising any of its rights under
or performing, enforcing or complying with any of its obligations hereunder.
(e) Non-conflict. The execution, delivery and performance of this Guaranty
will not constitute to the best of such Guarantor's knowledge any breach of, or
default under, any contractual, governmental or public obligation binding upon
such Guarantor.
(f) Consents. Such Guarantor is not required to obtain any consent,
permit, license, approval, order or authorization from, or to file any
declaration or statement with, any governmental authority or any waiver of any
right of any Person, in connection with or as a condition to the execution,
delivery or performance of or as a condition to the validity of this Guaranty.
(g) Consent to Jurisdiction, Admissibility, etc. Such Guarantor has
properly consented to the jurisdiction of the state and Federal courts located
within the County of New York, State of New York. Such Guarantor has also
properly consented to service of process of writs, summons and other legal
process as provided herein, which consent to service of process will be
effective against such Guarantor and the choice of law provision of Section 5.11
hereof that provides that this Guaranty is governed by the laws of the State of
New York is valid.
7
(h) There are no bankruptcy or insolvency proceedings pending or
threatened against such Guarantor.
ARTICLE IV
Covenants
SECTION 4.1 Affirmative Covenants. Each Guarantor (other than an
individual Guarantor) hereby covenants, for the benefit of the Beneficiary, (a)
to preserve and keep in full force and effect its existence; and (b) obtain,
comply with the terms of and do all that is necessary to maintain in full force
and effect all authorizations, approvals, licenses and consents required in or
by the laws and regulations of its jurisdiction of incorporation to enable it
lawfully to enter into and perform its obligations under this Guaranty or to
ensure the legality, validity, enforceability or admissibility in evidence in
its jurisdiction of incorporation of this Guaranty.
ARTICLE V
Miscellaneous
SECTION 5.1 No Waiver; Cumulative Remedies. The failure or delay of the
Beneficiary in exercising any right or remedy granted it hereunder shall not
operate as a waiver of such right or remedy or be construed to be a waiver of
any breach of any of the terms and conditions hereof or to be an acquiescence
therein. Each and every right, power and remedy herein specifically given to the
Beneficiary shall be cumulative and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at law,
in equity or by statute and the exercise or the beginning of the exercise of any
right, power or remedy shall not be construed as a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy A
waiver by the Beneficiary of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy that the Beneficiary
would otherwise have.
SECTION 5.2 Notices. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications required
or permitted by the terms hereof shall be writing and shall be given in
accordance with Section 5.1 of the Indenture and, in the case of Guarantors,
shall be addressed to any applicable Guarantor and sent to the applicable
addresses as follows:
Xxxxxxx X. Xxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
8
Xxxxxx Xxxxxx
00 Xxxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Xxxxx X. Xxxx
00 Xxxx 00xx Xxxxxx
Xxx. 00X
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxxx X. Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Xxxxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
AP/RH Holdings, LLC
c/o Apollo Real Estate Investment Fund III, L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxx Xxxxxxx
00 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
SECTION 5.3 Amendments and Waivers; Successors and Assigns. (a) Neither
this Guaranty nor any of the terms hereof may be terminated, amended,
supplemented, waived or modified orally, but only by an instrument in writing
signed by Guarantors and the Beneficiary.
(b) This Guaranty shall be binding upon Guarantors and their
respective successors end permitted assigns and shall inure to the benefit of
the Beneficiary and its successors and assigns.
SECTION 5.4 Severability. Any provision of or obligation under this
Guaranty that is determined by competent authority to be prohibited and
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision or obligation in any other
jurisdiction. To the extent permitted by applicable laws and regulations, each
Guarantor hereby waives any provision of law that renders any provision or
obligation hereof prohibited or unenforceable in any respect.
SECTION 5.5 Termination. Except as may be otherwise expressly provided in
the Indenture, subject to the provisions of Section 2.7 hereof, this Guaranty
and each Guarantor's duties and obligations hereunder shall remain In full force
and effect and be binding in accordance with its terms, until the date on which
all Indebtedness and the obligations of each Guarantor hereunder shall have been
satisfied by indefeasible payment and performance in full.
9
SECTION 5.6 Entire Agreement. This Guaranty constitutes the entire
agreement and supersedes all prior agreements and understandings both written
and oral between or among Guarantors, Borrower and the Beneficiary with respect
to the subject matter hereof.
SECTION 5.7 Article Headings. The headings of the various Articles and
Sections of this Guaranty are for convenience of reference only and shall not
modify, define, expand or limit any of the terms of provisions hereof.
SECTION 5.8 Jurisdiction; Agent for Service of Process. Any suit, action
or proceeding, whether at law or in equity, including any declaratory judgment
or similar suit or action, instituted by or against Guarantors arising out of or
relating in any way to this Guaranty may be brought and enforced in the courts
of the State of New York or of the United States for the Southern District of
New York, and each Guarantor irrevocably consents and submits to the exclusive
jurisdiction of such courts in respect of any suit, action or proceeding and
each Guarantor hereby irrevocably agrees that all claims against it in respect
of such action or proceeding against such Guarantor may be heard and determined
in such courts. Each Guarantor further irrevocably consents to the service of
process in any such suit, action or proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, return receipt requested, to
such Guarantor or to its agent at its address as set forth in Section 5.2 or as
set forth below, respectively. The foregoing shall not limit the right of the
Beneficiary to serve process in any other manner permitted by law or to bring
any action or proceeding, or to obtain execution of any judgment, in any other
jurisdiction.
SECTION 5.9 Waiver of Venue. Each Guarantor hereby irrevocably waives any
option or objection that it may now or hereafter have to the laying of venue of
any such action or proceeding arising under or relating to this Guaranty in any
court located in the county of New York, State of New York, and hereby further
irrevocably waives any claim that a court located in the County of New York,
State of New York is not a convenient forum for any such action or proceeding.
Each Guarantor agrees that, to the fullest extent permitted by applicable laws
and regulations, a final, non-appealable judgment in any such action or
proceeding obtained in any court described in Section 5.8 shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.
SECTION 5.10 WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS GUARANTY.
SECTION 5.11 GOVERNING LAW. THIS GUARANTY SHALL IN ALL RESPECTS BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING
ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES.
SECTION 5.12 Subrogation. Until the obligations have been satisfied in
full and during the continuation of this Guaranty, none of Guarantors shall, by
virtue of any payment made, security realized or moneys received for or on
account of the Obligations:
10
(a) be subrogated to any rights, security or moneys held, received or
receivable by the Beneficiary or be entitled to any right of contribution or
indemnity;
(b) demand, accept, assign, charge or otherwise dispute of any moneys,
obligations or liabilities now or hereafter due or owing to any Guarantor from
Borrower or Remainderman or take any step to enforce any right against Borrower
or Remainderman;
(c) claim or rank as creditor against the estate or in the bankruptcy or
liquidation of Borrower or Remainderman;
(d) receive, claim or have the benefit of any payment, distribution or
security from or on account of Borrower or Remainderman or exercise any right of
set-off or counterclaim as against Borrower or Remainderman or any other person
or claim the benefit of the security or moneys held by or for the account of the
Beneficiary; or
(e) claim or endorse any right of contribution, indemnification or other
form of reimbursement against Borrower, Remainderman or any Partner in respect
of the Obligations.
Each Guarantor shall forthwith pay to the Beneficiary (up to the amount of
the Obligations then due to the Beneficiary) an amount equal to any amount
recovered from the exercise of any right referred to above and shall forthwith
pay or transfer, as the case may be, to and pending such payment or transfer
shall hold in trust for the Beneficiary any of such payment or distribution or
benefit of security in fact received by it.
SECTION 5.13 Survival. All warranties, representations and covenants made
by Guarantors herein or in any certificate or other instrument delivered by it
under this Guaranty shall be considered to have been relied upon by the
Beneficiary and shall survive the execution and delivery of this Guaranty and
the termination of the Lease and the other Operative Documents regardless of any
investigation made by the Beneficiary. All statements in any such certificate or
other instrument shall constitute warranties and representations by Guarantors
hereunder.
SECTION 5.14 Counterparts. This Guaranty may be executed simultaneously in
two or more counterparts each of which shall be deemed an original, and it shall
not be necessary in making proof of this Guaranty to produce or account for more
than one such counterpart hereunder.
SECTION 5.15 Cooperation. Each Guarantor acknowledges that Beneficiary and
its successors and assigns may enter into a Secondary Market Transaction. In
connection therewith, upon request of Beneficiary, each Guarantor shall deliver
to Beneficiary, at Beneficiary's sole cost and expense, a reaffirmation of each
such Guarantor's obligations under this Guaranty of the date of such
reaffirmation which may be relied upon by such Rating Agencies in connection
with such secondary Market Transaction.
11
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed
as of the day and year first set forth above.
-----------------------------------------
XXXXXXX X. XXXX
-----------------------------------------
XXXXX X. XXXX
-----------------------------------------
XXXXXX X. XXXXXX
-----------------------------------------
XXXXX XXXXXXX
-----------------------------------------
XXXXXXXX X. XXXXX
-----------------------------------------
XXXX XXXXXXX
AP/RH HOLDINGS LLC, a Delaware
limited liability company
By: Kronus Property III, Inc., as Manager
By:
-------------------------------------
Name:
Title:
12
GUARANTY OF RECOURSE OBLIGATIONS (REMAINDERMAN'S)
THIS GUARANTY OF RECOURSE OBLIGATIONS, dated as of July 30, 1999 (together
with all amendments and supplements hereto, this "Guaranty") made, jointly and
severally, by AP/RH HOLDINGS LLC, a Delaware limited liability company, and the
following individuals: XXXXXXX X. XXXX, XXXXX X. XXXX, XXXXXX X. XXXXXX, XXXXX
XXXXXXX, XXXXXXXX X. XXXXX and XXXX XXXXXXX (collectively, "Guarantors" and
each, a "Guarantor") in favor of BERKSHIRE HATHAWAY CREDIT CORPORATION, a
Nebraska corporation, having an address at 0000 Xxxxxx, Xxxxx, Xxxxxxxx
(together with its successors and assigns, collectively referred to herein as
the "Beneficiary").
WITNESSETH:
WHEREAS, pursuant to that certain Promissory Note, dated of even date
herewith, executed by ACCOTEL Property Investors LLC, a Delaware limited
liability company ("Borrower"), and payable to the order of Beneficiary in the
original principal amount of Seventy-Three Million Seven Hundred Twenty Thousand
Dollars ($73,720,000) (together with all renewals, modifications, increases and
extensions thereof, the "Note"), Borrower has become indebted, and may from time
to time be further indebted, to Beneficiary with respect to a loan ("Loan")
which is secured by the lien and security interest of the Indenture of Mortgage,
Deed of Trust, Security Agreement, Fixture Filing, Financing Statement and
Assignment of Rents and Leases, of even date herewith (the "Indenture"), by
Borrower and Accotel Remainder LLC, a Delaware limited liability company
("Remainderman") in favor of Beneficiary or one or more trustees for the benefit
of Beneficiary and Beneficiary and further evidenced, secured or governed by
other instruments and documents executed in connection with the Loan (together
with the Note and Mortgage, the "Loan Documents"); and
WHEREAS, Beneficiary is not willing to make the Loan, or otherwise extend
credit, to Borrower unless Guarantors unconditionally guaranty payment and
performance to Beneficiary of the Obligations (as herein defined) in accordance
with the terms and conditions of this Guaranty; and
WHEREAS, Guarantors are the owners of a direct or indirect interest in
Remainderman, and Guarantors will directly benefit from the consummation of the
transactions contemplated by the Loan Documents.
NOW, THEREFORE, as an inducement to Beneficiary to make the Loan to
Borrower, and for other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:
ARTICLE I
SECTION 1.1 Definitions and Rules of Usage. Each capitalized term not
otherwise defined herein shall have the meaning assigned thereto in the
Indenture. The rules of usage set forth in the Indenture shall apply hereto.
ARTICLE II
SECTION 2.1 Guaranty of Obligations Under Operative Documents. (a) Each
Guarantor absolutely, irrevocably and unconditionally guaranties to the
Beneficiary payment of the Obligations as and when the same shall be due and
payable. As used herein, the term "Obligations" means any and all loss, damage,
cost, expense, liability, claim or other obligation incurred by Beneficiary
(including attorneys' fees and costs of enforcing its obligations hereunder, but
excluding consequential damages) arising out of or in connection with the
following:
(a) (i) fraud on the part of Remainderman or any Partner of
Remainderman, or any claims against Remainderman or any Partner of
Remainderman under the Racketeer Influences and Corrupt Organizations Act;
(ii) misappropriation by Remainderman or any Partners of
Remainderman, of rents, security deposits and casualty or condemnation
proceeds with respect to any of the Mortgaged Properties, actually
received by or at the direction of any of them or any of their Affiliates;
(iii) knowing material misrepresentations by Remainderman or any
Partners of Remainderman in the Loan Documents or any material untruth in
any certificate, instrument or written statement or other document
supplied to Beneficiary pursuant to or in connection with the Loan,
including, without limitation, in any financial statements of U.S. Realty
Advisors, L.L.C., Borrower, Remainderman or any of their Affiliates, which
may be provided to Beneficiary in connection with the Loan;
(iv) voluntary breach of covenants in the Indenture restricting
Transfers of the Mortgaged Properties or Equity Interests in Remainderman
or the voluntary creation of junior liens or the voluntary incurrence of
additional indebtedness not otherwise permitted under the Indenture;
(v) wilful and material breach of the single purpose entity
covenants set forth in the Loan Documents but only in the event and to the
extent that any such breach shall result in the assertion by third party
creditors of the Partners of Remainderman that the assets of Remainderman
are subject to the claims of such creditors; and
(vi) Beneficiary's costs of enforcing any of the Loan Documents, but
only (x) to the extent such costs arise in connection with, or as a result
of, any defense, set-off, claim or counterclaim asserted in connection
with such enforcement, and (y) if Remainderman is not the prevailing party
in such enforcement action.
2
(b) Notwithstanding anything to the contrary in any of the Loan Documents,
Beneficiary shall not be deemed to have waived any right which Beneficiary may
have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S.
Bankruptcy Code to file a claim for the full amount of the Indebtedness secured
by the Indenture or to require that all collateral shall continue to secure all
of the Indebtedness owing to Beneficiary in accordance with the Loan Documents.
(c) A Guarantor shall be released from such Guarantor's liabilities (other
than those accrued), as set forth in this Guaranty upon a Permitted Transfer to
an unrelated third party, provided that the principals of the Permitted
Transferee assume such obligations pursuant to documentation reasonably
satisfactory to Beneficiary and the identity and creditworthiness of such
principals is satisfactory to Beneficiary, in Beneficiary's reasonable
discretion, exercised in its good faith. Except as expressly set forth in the
immediately preceding sentence, each Guarantor shall continue to remain liable
hereunder, notwithstanding any Transfer which may be permitted under the
Indenture.
SECTION 2.2 Unconditional Obligations. This Guaranty is a primary
obligation of each Guarantor and is an unconditional, absolute, present and
continuing obligation and guaranty of payment (and not merely of collection) and
the validity and enforceability of this Guaranty shall be absolute and
unconditional and shall not be impaired, affected or in any way conditioned or
contingent upon, nor subject to any reduction, limitation, impairment,
termination, defense (other than the defense of prior payment or performance),
offset, counterclaim or recoupment whatsoever (all of which are hereby expressly
waived by Guarantors) irrespective of (a) the making of a demand, the
institution of suit or the taking of any other action to enforce performance, or
observance by Borrower or Remainderman of the Obligations, (b) the validity,
regularity or enforceability of any Operative Document or any of the Obligations
or any collateral security, other guaranty, if any, or credit support therefor
or right to offset with respect thereto at any time or from time to time held by
the Beneficiary, (c) any defense, set-off or counterclaim (other than the
defense of prior payment or performance) that may at any time be available to or
be asserted by Borrower, Remainderman or any Guarantor against the Beneficiary,
(d) any attempt to collect from Borrower or Remainderman or any other entity or
to perfect or enforce any security or (e) upon any other action, occurrence or
circumstances whatsoever which might otherwise constitute a defense available
to, or discharge of, a guarantor or surety of any type. This Guaranty may not be
revoked by any Guarantor and shall continue to be effective with respect to any
Obligations arising or created after any attempted revocation by any Guarantor
and after (if a Guarantor is a natural person) such Guarantor's death (in which
event this Guaranty shall be binding upon such Guarantor's estate and such
Guarantor's legal representatives and heirs). Each Guarantor waives any
requirement that the Beneficiary shall have instituted any suit, action or
proceeding Or exhausted their remedies or taken any steps to enforce any rights
against Borrower or Remainderman or any other Person (including, without
limitation, any other Guarantor) or entity to compel any such performance or to
collect all or any part of such amount pursuant to the provisions of the
Operative Documents or at law or in equity, or otherwise, and regardless of any
other condition or contingency. Lender shall not be required to mitigate
damages, or take any other action to reduce the Obligations.
3
SECTION 2.3 Amendments, etc., with Respect to the Obligations. Guarantors
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against Guarantors and without notice to or further assent by
Guarantors, (a) any demand for payment or performance of any of the Obligations
made by the Beneficiary may be rescinded by the Beneficiary and any of the other
Obligations continue to be in effect; (b)the Indebtedness and the Obligations,
or the liability of any other party upon or for any part thereof, and any
collateral security or guaranty therefor or right of offset with respect
thereto, may be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by the Beneficiary; (c) any Operative Document,
or any collateral security document or other guaranty or document executed and
delivered in connection therewith or related thereto may be amended, modified,
supplemented or terminated, in accordance with its terms, as the parties thereto
may deem advisable; and (d) any collateral security, guaranty or right to offset
held by the Beneficiary for the payment or performance of the Indebtedness or
the Obligations may be sold, exchanged, waived, surrendered or released. For
purposes of this Section 2.3, "demand" shall include the commencement and
continuance of any legal proceedings.
SECTION 2.4 Guarantor's Obligations Not Affected. Each Guarantor expressly
agrees that the duties and obligations of such Guarantor under this Guaranty
shall remain in full force and effect, without the necessity of any reservation
of rights against such Guarantor or notice to or further assent by such
Guarantor at any time and from time to time, in whole or in part, and without
regard to, and shall not be impaired, released, discharged, terminated abated,
deferred, diminished, modified or affected, in whole or in part, by any event,
condition, occurrence, circumstance, proceeding, action or failure to act, with
or without notice to, or the knowledge or consent of, such Guarantor, including,
without limitation:
(a) any extension, modification or renewal of, termination, addition or
supplement to, or deletion from, any of the terms of or indulgence with respect
to, or substitutions for, or forbearance of the Indebtedness or any part thereof
or any agreement relating thereto at any time, including, without limitation,
any of the Operative Documents;
(b) any failure, refusal or omission to enforce any right, power or remedy
with respect to the Indebtedness or any part thereof or any agreement relating
thereto at any time, including, without limitation, any of the Operative
Documents;
(c) any waiver of any right, power or remedy or of any default with
respect to the Indebtedness or any part thereof or any agreement relating
thereto at any time, including, without limitation, any of the Operative
Documents;
(d) any release, surrender, compromise, settlement, waiver, subordination
or modification, with or without consideration, of any other guaranties with
respect to the Indebtedness or the Obligations or any part thereof, or any other
obligation of any Person with respect to the Indebtedness or the Obligations or
any part thereof;
(e) the lack of genuineness, unenforceability or invalidity of the
Indebtedness or any part thereof or any agreement relating thereto at any time,
including, without limitation, any of the Operative Documents;
4
(f) except as may be otherwise provided in the Indenture, any change in
the ownership of Borrower or Remainderman or the insolvency, bankruptcy or any
other change in the legal status of Borrower, Remainderman or any Guarantor or
any rejection or modification of the obligations of Borrower or Remainderman or
those of any Person under the Operative Documents as a result of any bankruptcy,
reorganization, insolvency or similar proceeding;
(g) the change in or the imposition of any applicable laws and regulations
or other governmental act that does or might impair, delay or in any way affect
the validity, enforceability, or the payment when due, of the Indebtedness or
the Obligations to the extent not prohibited by Applicable Laws and Regulations
or otherwise;
(h) the existence of any claim, set off or other rights or defenses (other
than the defense of prior payment or performance) that any Guarantor may have at
any time against Borrower or Remainderman or the Beneficiary or any other Person
in connection herewith or with an unrelated transaction and the existence of any
claim, setoff or other rights or defenses that Borrower or Remainderman may have
against any Guarantor, the Beneficiary or any other Person in connection with
the Operative Documents or with an unrelated transaction;
(i) any merger or consolidation of Borrower, Remainderman or any Guarantor
into or with any other Person, or, except as may be otherwise expressly provided
in the Indenture, any sale, lease or transfer of any or all of the assets of
Borrower, Remainderman or any Guarantor to any other Person;
(j) the rights, powers or privileges the Beneficiary may now or hereafter
have against any Person or collateral;
(k) any defect in title, condition, operation or fitness of use of any
Property, any casualty or condemnation affecting any Property or any sublease,
assignment, renewal; extension or other transfer or continuation of Borrower's
or Remainderman's rights under the Operative Documents, whether in accordance
with the terms of the Operative Documents or otherwise;
(l) any exchange, surrender or release, in whole or in part, of any
security which may be held by the Beneficiary under the Operative Documents; or
(m) any other action, omission, occurrence or circumstance whatsoever
which may in any manner or to any extent vary the risk or effect a legal or
equitable defense or discharge of any Guarantor hereunder as a matter of law or
otherwise.
SECTION 2.5 Waiver by Guarantors. Each Guarantor unconditionally waives
and releases, to the fullest extent permitted by applicable laws and
regulations, any and all (a) notice of the acceptance of this Guaranty and of
any change in Borrower's or Remainderman's financial condition or of the
occurrence of any breach by Borrower or Remainderman under the Loan Documents or
any Event of Default; (b) notices of the creation, renewal, extension or accrual
of any Obligation or any of the matters referred to in Section 2.04 hereof or
any notice of or proof of reliance by the Beneficiary upon this Guaranty or
acceptance of this Guaranty (the Indebtedness shall conclusively be deemed to
have been created, contracted, incurred, renewed,
5
extended, amended or waived in reliance upon this Guaranty and all dealings
between Borrower, Remainderman or any Guarantor and the Beneficiary shall be
conclusively presumed to have been had or consummated in reliance upon this
Guaranty); (c) notices which may be required by statute, rule of law or
otherwise, now or hereafter in effect to preserve intact any rights of the
Beneficiary against any Guarantor, (d) the right to interpose all substantive
and procedural defenses of the law of guaranty, indemnification and suretyship,
except the defenses of prior payment or prior performance by Borrower,
Remainderman or any Guarantor of the Obligations; (e) all rights and remedies
accorded by applicable laws and regulations to guarantors or sureties, including
any extension of time conferred by any law now or hereafter in effect; (f) any
right or claim of right to cause a marshaling of Borrower's or Remainderman's
assets or to cause the Beneficiary to proceed against Borrower or Remainderman
or any collateral held by the Beneficiary at any time or in any particular
order; (g) rights to the endorsement, assertion or exercise by the Beneficiary
of any right, power, privilege or remedy conferred herein or in any Operative
Document or otherwise; (h) requirements of promptness or diligence on the part
of the Beneficiary; (i) any renewal, extension or continuation of Borrower's or
Remainderman's rights under the Operative Documents or any notices of the sale,
transfer or other disposition of any right, title to or interest in the
Mortgaged Properties or any Operative Document; (j) rights and defenses arising
out of an election of remedies by the Beneficiary, even though that election of
remedies has destroyed Guarantors' rights of subrogation and reimbursement
against Borrower and/or Remainderman by operation of law or otherwise; (k) other
circumstances whatsoever (except the defenses of prior payment or prior
performance by Borrower, Remainderman or any Guarantor of the Obligations) which
might otherwise constitute a legal or equitable discharge, release or defense of
a guarantor or surety, or which might otherwise limit recourse against any
Guarantor, or (l) the right to interpose any defense (except defense of prior
payment or prior performance) set off or counterclaim of any nature or
description in any action or proceeding. No failure to exercise end no delay in
exercising, on the part of the Beneficiary, any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege preclude any other or further exercise
thereof, or the exercise of any other power or right. The rights and remedies
herein provided are cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 2.6 [Intentionally Omitted].
SECTION 2.7 Reinstatement. This Guaranty shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, in whole or in
part, of any of the indebtedness or the Obligations (i) is rescinded or must
otherwise be restored or returned by the Beneficiary upon the bankruptcy,
insolvency, reorganization, arrangement, adjustment, composition, dissolution,
liquidation, or the like, of Borrower, Remainderman or any Guarantor, or as a
result of the appointment of a custodian, receiver, trustee or other officer
with similar powers with respect to Borrower, Remainderman or any Guarantor or
any substantial part of either Person's respective property, or otherwise, or
(ii) is returned to Borrower, Remainderman or any Guarantor by reason of a
decree, moratorium or other sovereign act of any governmental authority, In each
case, all as though such payment had not been made notwithstanding any
termination of this Guaranty or any Operative Document.
6
ARTICLE III
SECTION 3.1 Representations and Warranties of Guarantor. Each Guarantor
hereby represents and warrants to the Beneficiary as of the Closing Date that:
(a) Benefit. Such Guarantor is the owner of a direct or indirect interest
in Borrower and Remainderman, and has received or will receive, direct or
indirect benefit from the making of the Loan.
(b) Authorizations. All acts, conditions, authorizations and other things
required to be done, fulfilled and performed by such Guarantor in order:
(i) to enable such Guarantor lawfully to enter into, exercise such
Guarantor's rights under and perform and comply with the obligations
expressed to be assumed by such Guarantor in this Guaranty; and
(ii) to ensure that the obligations expressed to be assumed by such
Guarantor in this Guaranty are legal, valid and binding and enforceable
against such Guarantor in accordance with the respective terms thereof;
have been done, fulfilled and performed and are in full force and effect.
(c) Legal Validity. This Guaranty has been duly executed and delivered by
such Guarantor. The obligations expressed to be assumed by such Guarantor in
this Guaranty are legal and valid obligations binding on it and enforceable in
accordance with the terms of this Guaranty except as such enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting creditors
generally and by general equitable principles. This Guaranty is in full force
and effect as of the Closing Date, not subject to any right of rescission,
setoff; counterclaim or defense by such Guarantor nor will the operation of any
of the terms of the Guaranty or the exercise of any right thereunder, render
this Guaranty unenforceable against such Guarantor, in whole or in part, or
subject to any right of rescission, setoff, counterclaim or defense by such
Guarantor and such Guarantor has not asserted any right of rescission, setoff,
counterclaim or defense with respect thereto.
(d) Litigation. No action, suit, arbitration, governmental investigation,
or administrative proceeding of or before any court, tribunal, agency or other
governmental authority, is current, pending or to be the best of such
Guarantor's knowledge and belief threatened which might, if adversely
determined, (i) have a material adverse affect on such Guarantor's business, or
financial condition or its ability to perform its obligations hereunder or (ii)
restrain such Guarantor from entering into, exercising any of its rights under
or performing, enforcing or complying with any of its obligations hereunder.
(e) Non-conflict. The execution, delivery and performance of this Guaranty
will not constitute to the best of such Guarantor's knowledge any breach of or
default under, any contractual, governmental or public obligation binding upon
such Guarantor.
(f) Consents. Such Guarantor is not required to obtain any consent,
permit, license, approval, order or authorization from, or to file any
declaration or statement with, any governmental authority or any waiver of any
right of any Person, in connection with or as a condition to the execution,
delivery or performance of or as a condition to the validity of this Guaranty.
7
(g) Consent to Jurisdiction, Admissibility, etc. Such Guarantor has
properly consented to the jurisdiction of the state and Federal courts located
within the County of New York, State of New York. Such Guarantor has also
properly consented to service of process of writs, summons and other legal
process as provided herein, which consent to service of process will be
effective against such Guarantor and the choice of law provision of Section 5.11
hereof that provides that this Guaranty is governed by the laws of the State of
New York is valid.
(h) Bankruptcy. There are no bankruptcy or insolvency proceedings pending
or threatened against such Guarantor.
ARTICLE IV
Covenants
SECTION 4.1 Affirmative Covenants. Each Guarantor (other than an
individual Guarantor) hereby covenants, for the benefit of the Beneficiary, (a)
to preserve and keep in full force and effect its existence; and (b) obtain,
comply with the terms of and do all that is necessary to maintain in full force
and effect all authorizations, approvals, licenses and consents required in or
by the laws and regulations of its jurisdiction of incorporation to enable it
lawfully to enter into and perform its obligations under this Guaranty or to
ensure the legality, validity, enforceability or admissibility in evidence in
its jurisdiction of incorporation of this Guaranty.
ARTICLE V
Miscellaneous
SECTION 5.1 No Waiver; Cumulative Remedies. The failure or delay of the
Beneficiary in exercising any right or remedy granted it hereunder shall not
operate as a waiver of such right or remedy or be construed to be a waiver of
any breach of any of the terms and conditions hereof or to be an acquiescence
therein. Each and every right, power and remedy herein specifically given to the
Beneficiary shall be cumulative and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at law,
in equity or by statute and the exercise or the beginning of the exercise of any
right, power or remedy shall not be construed as a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy. A
waiver by the Beneficiary of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy that the Beneficiary
would otherwise have.
SECTION 5.2 Notices. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications required
or permitted by the terms hereof shall be in writing and shall be given in
accordance with Section 5.1 of the Indenture and, in the case of Guarantors,
shall be addressed to any applicable Guarantor and sent to the applicable
addresses as follows:
8
Xxxxxxx X. Xxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx
00 Xxxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Xxxxx X. Xxxx
00 Xxxx 00xx Xxxxxx
Xxx. 00X
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxxx X. Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Xxxxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
AP/RH Holdings, LLC
c/o Apollo Real Estate Investment Fund III, L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxx Xxxxxxx
00 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
SECTION 5.3 Amendments and Waivers; Successors and Assigns. (a) Neither
this Guaranty nor any of the terms hereof may be terminated, amended,
supplemented, waived or modified orally, but only by an instrument in writing
signed by Guarantors and the Beneficiary.
(b) This Guaranty shall be binding upon Guarantors and their
respective successors and permitted assigns and shall inure to the benefit of
the Beneficiary and its successors and assigns.
SECTION 5.4 Severability. Any provision of or obligation under this
Guaranty that is determined by competent authority to be prohibited and
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision or obligation in any other
jurisdiction. To the extent permitted by applicable laws and regulations, each
Guarantor hereby waives any provision of law that renders any provision or
obligation hereof prohibited or unenforceable in any respect.
9
SECTION 5.5 Termination. Except as may be otherwise expressly provided in
the Indenture, subject to the provisions of Section 2.7 hereof; this Guaranty
and each Guarantor's duties and obligations hereunder shall remain in full force
and effect and be binding in accordance with its terms, until the date on which
all Indebtedness and the obligations of each Guarantor hereunder shall have been
satisfied by indefeasible payment and performance in full.
SECTION 5.6 Entire Agreement. This Guaranty constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, between or among Guarantors, Borrower and the Beneficiary with respect
to the subject matter hereof.
SECTION 5.7 Article Headings. The headings of the various Articles and
Sections of this Guaranty are for convenience of reference only and shall not
modify, define, expand or limit any of the terms of provisions hereof.
SECTION 5.8 Jurisdiction; Agent for Service of Process. Any suit, action
or proceeding, whether at law or in equity, including any declaratory judgment
or similar suit or action, instituted by or against Guarantors arising out of or
relating in any way to this Guaranty may be brought and enforced in the courts
of the State of New York or of the United States for the Southern District of
New York, and each Guarantor irrevocably consents and submits to the exclusive
jurisdiction of such courts in respect of any suit, action or proceeding and
each Guarantor hereby irrevocably agrees that all claims against it in respect
of such action or proceeding against such Guarantor may be heard and determined
in such courts. Each Guarantor further irrevocably consents to the service of
process in any such suit, action or proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, return receipt requested, to
such Guarantor or to its agent at its address as set forth in Section 5.2 or as
set forth below, respectively. The foregoing shall not limit the right of the
Beneficiary to serve process in any other manner permitted by law or to bring
any action or proceeding, or to obtain execution of any judgment, in any other
jurisdiction.
SECTION 5.9 Waiver of Venue. Each Guarantor hereby irrevocably waives any
option or objection that it may now or hereafter have to the laying of venue of
any such action or proceeding arising under or relating to this Guaranty in any
court located in the county of New York, State of New York, and hereby further
irrevocably waives any claim that a court located in the County of New York,
State of New York is not a convenient forum for any such action or proceeding.
Each Guarantor agrees that, to the fullest extent permitted by applicable laws
and regulations, a final, non-appealable judgment in any such action or
proceeding obtained in any court described in Section 5.8 shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.
SECTION 5.10 WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS GUARANTY.
10
SECTION 5.11 GOVERNING LAW. THIS GUARANTY SHALL IN ALL RESPECTS BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING
ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES.
SECTION 5.12 Subrogation. Until the obligations have been satisfied in
full and during the continuation of this Guaranty, none of Guarantors shall, by
virtue of any payment made, security realized or moneys received for or on
account of the Obligations:
(a) be subrogated to any rights, security or moneys held, received or
receivable by the Beneficiary or be entitled to any right of contribution or
indemnity;
(b) demand, accept, assign, charge or otherwise dispute of any moneys,
obligations or liabilities now or hereafter due or owing to any Guarantor from
Borrower or Remainderman or take any step to enforce any right against Borrower
or Remainderman;
(c) claim or rank as creditor against the estate or in the bankruptcy or
liquidation of Borrower or Remainderman;
(d) receive, claim or have the benefit of any payment, distribution or
security from or on account of Borrower or Remainderman or exercise any right of
set-off or counterclaim as against Borrower or Remainderman or any other person
or claim the benefit of the security or moneys held by or for the account of the
Beneficiary; or
(e) claim or endorse any right of contribution, indemnification or other
form of reimbursement against Borrower, Remainderman or any Partner in respect
of the Obligations.
Each Guarantor shall forthwith pay to the Beneficiary (up to the amount of
the Obligations then due to the Beneficiary) an amount equal to any amount
recovered from the exercise of any right referred to above and shall forthwith
pay or transfer, as the case may be, to and pending such payment or transfer
shall hold in trust for the Beneficiary any of such payment or distribution or
benefit of security in fact received by it.
SECTION 5.13 Survival. All warranties, representations and covenants made
by Guarantors herein or in any certificate or other instrument delivered by it
under this Guaranty shall be considered to have been relied upon by the
Beneficiary and shall survive the execution and delivery of this Guaranty and
the termination of the Lease and the other Operative Documents, regardless of
any investigation made by the Beneficiary. All statements in any such
certificate or other instrument shall constitute warranties and representations
by Guarantors hereunder.
SECTION 5.14 Counterparts. This Guaranty may be executed simultaneously in
two or more counterparts each of which shall be deemed an original, and it shall
not be necessary in making proof of this Guaranty to produce or account for more
than one such counterpart hereunder.
11
SECTION 5.15 Cooperation. Each Guarantor acknowledges that Beneficiary and
its successors and assigns may enter into a Secondary Market Transaction. In
connection therewith, upon request of Beneficiary, each Guarantor shall deliver
to Beneficiary, at Beneficiary's sole cost and expense, a reaffirmation of each
such Guarantor's obligations under this Guaranty as of the date of such
reaffirmation which may be relied upon by such Rating Agencies in connection
with such Secondary Market Transaction.
12
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed
as of the day and year first set forth above.
-----------------------------------------
XXXXXXX X. XXXX
-----------------------------------------
XXXXX X. XXXX
-----------------------------------------
XXXXXX X. XXXXXX
-----------------------------------------
XXXXX XXXXXXX
-----------------------------------------
XXXXXXXX X. XXXXX
-----------------------------------------
XXXX XXXXXXX
AP/RH HOLDINGS LLC, a Delaware
limited liability company
By: Kronus Property III, Inc., as Manager
By:
-------------------------------------
Name:
Title:
GUARANTY OF PAYMENT
THIS GUARANTY OF PAYMENT, dated as of July 30, 1999 (together with all
amendments and supplements hereto, this "Guaranty") made, jointly and severally,
by AP/RH HOLDINGS LLC, a Delaware limited liability company, and the following
individuals: XXXXXXX X. XXXX, XXXXX X. XXXX, XXXXXX X. XXXXXX, XXXXX XXXXXXX,
XXXXXXXX X. XXXXX and XXXX XXXXXXX (collectively, "Guarantors" and each, a
"Guarantor") in favor of BERKSHIRE HATHAWAY CREDIT CORPORATION, a Nebraska
corporation, having an address at 0000 Xxxxxx Xxxxx, Xxxxx, Xxxxxxxx 00000
(together with its successors and assigns, collectively referred to herein as
the "Beneficiary").
WITNESSETH:
WHEREAS, pursuant to that certain Promissory Note, dated of even date
herewith, executed by ACCOTEL Property Investors LLC, a Delaware limited
liability company ("Borrower"), and payable to the order of Beneficiary in the
original principal amount of $73,720,000.00 (together with all renewals,
modifications, increases and extensions thereof, the "Note"), Borrower has
become indebted, and may from time to time be further indebted, to Beneficiary
with respect to a loan ("Loan") which is secured by the lien and security
interest of the Indenture of Mortgage, Deed of Trust, Security Agreement,
Fixture Filing, Financing Statement and Assignment of Rents and Leases, of even
date herewith (the "Indenture"), by Borrower and Accotel Remainder LLC, a
Delaware limited liability company ("Remainderman") in favor of Beneficiary or
one or more trustees for the benefit of Beneficiary and Beneficiary and further
evidenced, secured or governed by other instruments and documents executed in
connection with the Loan (together with the Note and Mortgage, the "Loan
Documents") and
WHEREAS, Beneficiary is not willing to make the Loan, or otherwise extend
credit, to Borrower unless Guarantors deliver this Guaranty; and
WHEREAS, Guarantors are the owners of a direct or indirect interest in
Borrower, and Guarantors will directly benefit from Beneficiary making the Loan
to Borrower.
NOW, THEREFORE, as an inducement to Beneficiary to make the Loan to
Borrower, arid for other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, Guarantors hereby jointly and
severally agree as follows:
ARTICLE I
SECTION 1.1 Definitions and Rules of Usage. Each capitalized term not
otherwise defined herein shall have the meaning assigned thereto in the
Indenture. The rules of usage set forth in the Indenture shall apply hereto.
ARTICLE II
SECTION 2.1 Guarantee of Obligations Under Operative Documents. (a)
Subject to Sections 2.1(c) and (f) below, each Guarantor absolutely, irrevocably
and unconditionally guarantees to Beneficiary payment of the Obligations (as
defined below) as and when the same shall be due and payable. Each Guarantor
hereby irrevocably and unconditionally agrees that each such Guarantor is liable
for the Obligations as a primary obligor.
(b) As used herein, the term "Obligations" means the principal amount of
the Loan, and all interest accrued thereon, any Make Whole Premium, Late
Charges, Default Rate Interest and any other Indebtedness from time to time
outstanding and the amount of any and all Enforcement Costs, "Enforcement Costs"
means the costs, fees and expenses incurred by Beneficiary to enforce, protect,
maintain, preserve or foreclose Beneficiary's rights, remedies and interests
under and in respect of any of the Loan Documents (including, without
limitation, this Guaranty), including, without limitation, attorneys' fees and
disbursements.
(c) Notwithstanding anything contained herein to the contrary, this
Guaranty is a currently existing obligation of each Guarantor; provided,
however, that Beneficiary agrees to forebear from enforcing this Guaranty
against any Guarantor unless and until there has occurred a Trigger Event (as
hereinafter defined).
(d) "Trigger Event" means one or more of the following events:
(i) if Borrower and/or Remainderman files any voluntary
petition under any Chapter of Title 11 of the United States Code, as
amended (the "Bankruptcy Code"), or files any petition for
dissolution or liquidation or takes other action to dissolve or to
liquidate, or in any manner seeks any relief under any local, state,
federal or other insolvency laws or other laws providing for relief
of debtors; or
(ii) if any involuntary petition under any Chapter of the
Bankruptcy Code is filed against Borrower and/or Remainderman, or if
Borrower and/or Remainderman directly or indirectly becomes the
subject of any proceedings pursuant to any local, state, federal or
other insolvency laws or other laws providing for the relief of
debtors, or in equity, either at the present time or at any time
hereafter, if and only if Borrower, Remainderman or any direct or
indirect equity investor therein has instigated, consented to, acted
in concert or conspired with such creditors of Borrower and/or
Remainderman (other than Beneficiary) to cause the filing thereof.
(e) A Guarantor shall be released from such Guarantor's liabilities
(other than those accrued), as set forth in this Guaranty upon a Permitted
Transfer by such Guarantor to an unrelated third party, provided that the
principals of the Permitted Transferee assume such obligations pursuant to
documentation reasonably satisfactory to Beneficiary and the identity and
creditworthiness of such principals is satisfactory to Beneficiary, in
Beneficiary's reasonable discretion, exercised in its good faith. Except as
expressly set forth in the immediately preceding sentence, each Guarantor shall
continue to remain liable hereunder, notwithstanding any Transfer which may be
permitted under the Indenture.
(f) Notwithstanding the foregoing previsions of this Section 2.1, if
Beneficiary commences an action under this Guaranty against one or more
Guarantors as a result
2
of an alleged occurrence of a Trigger Event of the type described in Section
2.1(d)(ii) above, and such Guarantors prevail in such action, then such
Guarantors shall not be obligated to pay Beneficiary's Enforcement Costs in
connection with such action and Beneficiary shall reimburse such Guarantors for
the costs and expenses (including, without limitation, attorneys' fees and
disbursements) of such Guarantors in connection with such action. Furthermore,
if it is determined pursuant to a final and non-appealable decision of a court
of competent jurisdiction that Beneficiary knowingly acted in bad faith in
commencing such action, Beneficiary shall pay to any Guarantor which was named
by Beneficiary as a party to such action, a sum equal to three times the amount
of the legal fees and expenses incurred by such Guarantor in connection with
such action.
SECTION 2.2 Unconditional Obligations. This Guaranty is a primary
obligation of Guarantors and is an unconditional, absolute, present and
continuing obligation and guarantee of payment (and not merely of collection)
and the validity and enforceability of this Guaranty shall be absolute and
unconditional and shall not be impaired, affected or in any way conditioned or
contingent upon, nor subject to any reduction, limitation, impairment,
termination, defense (other than the defense of prior payment or performance),
offset, counterclaim or recoupment whatsoever (all of which are hereby expressly
waived by Guarantors) irrespective of (a) the making of a demand, the
institution of suit or the taking of any other action to enforce performance, or
observance by Borrower or Remainderman of the Obligations, (b) the validity,
regularity or enforceability of any Operative Document or any of the Obligations
or any collateral security, other guarantee, if any, or credit support therefor
or right to offset with respect thereto at any time or from time to time held by
the Beneficiary, (c) any defense, set-off or counterclaim (other than the
defense of prior payment or performance) that may at any time be available to or
be asserted by Borrower, Remainderman or any Guarantor against the Beneficiary,
(d) any attempt to collect from Borrower or Remainderman or any other entity or
to perfect or enforce any security or (e) upon any other action, occurrence or
circumstances whatsoever which might otherwise constitute a defense available
to, or discharge of, a guarantor or surety of any type. This Guaranty may not be
revoked by any Guarantor and shall continue to be effective with respect to any
Obligations arising or created after any attempted revocation by any Guarantor
and after (if a Guarantor is a natural person) such Guarantor's death (in which
event this Guaranty shall be binding upon such Guarantor's estate and such
Guarantor's legal representatives and heirs). Each Guarantor waives any
requirement that the Beneficiary shall have instituted any suit, action or
proceeding or exhausted their remedies or taken any steps to enforce any rights
against Borrower or Remainderman or any other Person (including, without
limitation, any other Guarantor) or entity to compel any such performance or to
collect all or any part of such amount pursuant to the provisions of the
Operative Documents or at law or in equity, or otherwise, and regardless of any
other condition or contingency. Beneficiary shall not be required to mitigate
damages, or take any other action to reduce the Obligations.
SECTION 2.3 Amendments, etc., with Respect to the Obligations. Guarantors
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against Guarantors and without notice to or further assent by
Guarantors, (a) any demand for payment or performance of any of the Obligations
made by the Beneficiary may be rescinded by the Beneficiary and any of the other
Obligations continue to be in effect; (b) the Obligations, or the liability of
any other party upon or for any part thereof, and any collateral security or
guarantee
3
therefor or right of offset with respect thereto, may be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Beneficiary; (c) any Operative Document, or any collateral security document
or other guarantee or document executed and delivered in connection therewith or
related thereto may be amended, modified, supplemented or terminated, in
accordance with its terms, as the parties thereto may deem advisable; and (d)
any collateral security, guarantee or right to offset held by the Beneficiary
for the payment or performance of the Obligations may be sold, exchanged,
waived, surrendered or released. For purposes of this Section 2.3, "demand"
shall include the commencement and continuance of any legal proceedings.
SECTION 2.4 Guarantor's Obligations Not Affected. Each Guarantor expressly
agrees that the duties and obligations of such Guarantor under this Guaranty
shall remain in full force and effect, without the necessity of any reservation
of rights against such Guarantor or notice to or further assent by such
Guarantor at any time and from time to time, in whole or in part, and without
regard to, and shall not be impaired, released, discharged, terminated abated,
deferred, diminished, modified or affected, in whole or in part, by any event;
condition, occurrence, circumstance, proceeding, action or failure to act, with
or without notice to, or the knowledge or consent of, such Guarantor, including,
without limitation:
(a) any extension, modification or renewal of, termination, addition
or supplement to, or deletion from, any of the terms of or indulgence with
respect to, or substitutions for, or forbearance of the Obligations or any part
thereof or any agreement relating thereto at any time, including, without
limitation, any of the Operative Documents;
(b) any failure, refusal or omission to enforce any right, power or
remedy with respect to the Obligations or any part thereof or any agreement
relating thereto at any time, including, without limitation, any of the
Operative Documents;
(c) any waiver of any right, power or remedy or of any default with
respect to the Obligations or any part thereof or any agreement relating thereto
at any time, including, without limitation, any of the Operative Documents;
(d) any release, surrender, compromise, settlement, waiver,
subordination or modification, with or without consideration, of any other
guarantees with respect to the Obligations or any part thereof, or any other
obligation of any Person with respect to the Obligations or any part thereof;
(e) the lack of genuineness, unenforecability or invalidity of the
Obligations or any part thereof or any agreement relating thereto at any time,
including, without limitation, any of the Operative Documents;
(f) any change in the ownership of Borrower or Remainderman or the
insolvency, bankruptcy or any other change in the legal status of Borrower,
Remainderman or any Guarantor or any rejection or modification of the
obligations of Borrower or Remainderman or those of any Person under the
Operative Documents as a result of any bankruptcy, reorganization, insolvency or
similar proceeding;
4
(g) the change in or the imposition of any applicable laws and
regulations or other governmental act that does or might impair, delay or in any
way affect the validity, enforceability, or the payment when due, of the
Obligations to the extent not prohibited by Applicable Laws and Regulations or
otherwise;
(h) the existence of any claim, set off or other rights or defenses
(other than the defense of prior payment or performance) that any Guarantor may
have at any time against Borrower or Remainderman or the Beneficiary or any
other Person in connection herewith or with an unrelated transaction and the
existence of any claim, setoff or other rights or defenses that Borrower or
Remainderman may have against any Guarantor, the Beneficiary or any other Person
in connection with the Operative Documents or with an unrelated transaction;
(i) any merger or consolidation of Borrower, Remainderman or any
Guarantor into or with any other Person, or any sale, lease or transfer of any
or all of the assets of Borrower, Remainderman or any Guarantor to any other
Person;
(j) the rights, powers or privileges the Beneficiary may now or
hereafter have against any Person or collateral;
(k) any defect in title, condition, operation or fitness of use of
any Property, any casualty or condemnation affecting any Property or any
sublease, assignment, renewal, extension or other transfer or continuation of
Borrower's or Remainderman's rights under the Operative Documents, whether in
accordance with the terms of the Operative Documents or otherwise;
(l) any exchange, surrender or release, in whole or in part, of any
security which may be held by the Beneficiary under the Operative Documents; or
(m) any other action, omission, occurrence or circumstance
whatsoever which may in any manner or to any extent vary the risk or effect a
legal or equitable defense or discharge of any Guarantor hereunder as a matter
of law or otherwise.
SECTION 2.5 Waiver by Guarantors. Each Guarantor unconditionally waives
and releases, to the fullest extent permitted by applicable laws and
regulations, any and all (a) notice of the acceptance of this Guaranty and of
any change in Borrower's or Remainderman's financial condition or of the
occurrence of any breach by Borrower or Remainderman under the Loan Documents or
any Event of Default; (b) notices of the creation, renewal, extension or accrual
of any Obligation or any of the matters referred to in Section 2.04 hereof or
any notice of or proof of reliance by the Beneficiary upon this Guaranty or
acceptance of this Guaranty (the Indebtedness shall conclusively be deemed to
have been created, contracted, incurred, renewed, extended, amended or waived in
reliance upon this Guaranty and all dealings between Borrower, Remainderman or
any Guarantor and the Beneficiary shall be conclusively presumed to have been
had or consummated in reliance upon this Guaranty); (c) notices which may be
required by statute, rule of law or otherwise, now or hereafter in effect, to
preserve intact any rights of the Beneficiary against any Guarantor; (d) the
right to interpose all substantive and procedural defenses of the law of
guaranty, indemnification and suretyship, except the defenses of prior
5
payment or prior performance by Borrower, Remainderman or any Guarantor of the
Obligations; (e) all rights and remedies accorded by applicable laws and
regulations to guarantors or sureties, including any extension of time conferred
by any law now or hereafter in effect; (f) any right or claim of right to cause
a marshaling of Borrower's or Remainderman's assets or to cause the Beneficiary
to proceed against Borrower or Remainderman or any collateral held by the
Beneficiary at any time or in any particular order; (g) rights to the
endorsement, assertion or exercise by the Beneficiary of any right, power,
privilege or remedy conferred herein or in any Operative Document or otherwise;
(h) requirements of promptness or diligence on the part of the Beneficiary; (i)
any renewal, extension or continuation of Borrower's or Remainderman's rights
under the Operative Documents or any notices of the sale, transfer or other
disposition of any right, title to or interest in the Mortgaged Properties or
any Operative Document; (j) rights and defenses arising out of an election of
remedies by the Beneficiary, even though that election of remedies has destroyed
Guarantors' rights of subrogation and reimbursement against Borrower and/or
Remainderman by operation of law or otherwise; (k) other circumstances
whatsoever (except the defenses of prior payment or prior performance by
Borrower, Remainderman or any Guarantor of the Obligations) which might
otherwise constitute a legal or equitable discharge, release or defense of a
guarantor or surety, or which might otherwise limit recourse against any
Guarantor; or (l) the right to interpose any defense (except defense of prior
payment or prior performance) set off or counterclaim of any nature or
description in any action or proceeding. No failure to exercise and no delay in
exercising, on the part of the Beneficiary, any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege preclude any other or further exercise
thereof, or the exercise of any other power or right. The rights and remedies
herein provided are cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 2.6 [Intentionally Omitted]
SECTION 2.7 Reinstatement. This Guaranty shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, in whole or in
part, of any of the Obligations (i) is rescinded or must otherwise be restored
or returned by the Beneficiary upon the bankruptcy, insolvency, reorganization,
arrangement, adjustment, composition, dissolution, liquidation, or the like, of
Borrower, Remainderman or any Guarantor, or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to Borrower, Remainderman or any Guarantor or any substantial part of either
Person's respective property, or otherwise, or (ii) is returned to Borrower,
Remainderman or any Guarantor by reason of a decree, moratorium or other
sovereign act of any governmental authority, in each case, all as though such
payment had not been made notwithstanding any termination of this Guaranty or
any Operative Document.
ARTICLE III
SECTION 3.1 Representations and Warranties of Guarantor. Each Guarantor
hereby represents and warrants to the Beneficiary as of the Closing Date that:
6
(a) Benefit. Such Guarantor is the owner of a direct or indirect
interest in Borrower and Remainderman, and has received or will receive, direct
or indirect benefit from the making of the Loan.
(b) Authorizations. All acts, conditions, authorizations and other
things required to be done, fulfilled and performed by such Guarantor in order:
(i) to enable such Guarantor lawfully to enter into, exercise
such Guarantor's rights under and perform and comply with the
obligations expressed to be assumed by such Guarantor in this
Guaranty; and
(ii) to ensure that the obligations expressed to be assumed by
such Guarantor in this Guaranty are legal, valid and binding and
enforceable against such Guarantor in accordance with the respective
terms thereof;
have been done, fulfilled and performed and are in full force and effect.
(c) Legal Validity. This Guaranty has been duly executed and
delivered by such Guarantor. The obligations expressed to be assumed by such
Guarantor in this Guaranty are legal and valid obligations binding on it and
enforceable in accordance with the terms of this Guaranty except as such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors generally and by general equitable principles. This
Guaranty is in full force and effect as of the Closing Date, not subject to any
right of rescission, setoff, counterclaim or defense by such Guarantor nor will
the operation of any of the terms of the Guaranty or the exercise of any right
thereunder, render this Guaranty unenforceable against such Guarantor, in whole
or in part, or subject to any right of rescission, setoff, counterclaim or
defense by such Guarantor and such Guarantor has not asserted any right of
rescission, setoff, counterclaim or defense with respect thereto.
(d) Litigation. No action, suit, arbitration, governmental
investigation, or administrative proceeding of or before any court, tribunal,
agency or other governmental authority, is current, pending or to be the best of
such Guarantor's knowledge and belief threatened which might, if adversely
determined, (i) have a material adverse affect on such Guarantor's business, or
financial condition or its ability to perform its obligations hereunder or (ii)
restrain such Guarantor from entering into, exercising any of its rights under
or performing, enforcing or complying with any of its obligations hereunder.
(e) Non-conflict. The execution, delivery and performance of this
Guaranty will not constitute to the best of such Guarantor's knowledge any
breach of, or default under, any contractual, governmental or public obligation
binding upon such Guarantor.
(f) Consents. Such Guarantor is not required to obtain any consent,
permit, license, approval, order or authorization from, or to file any
declaration or statement with, any governmental authority or any waiver of any
right of any Person, in connection with or as a condition to the execution,
delivery or performance of or as a condition to the validity of this Guaranty.
7
(g) Consent to Jurisdiction, Admissibility, etc. Such Guarantor has
properly consented to the jurisdiction of the state and Federal courts located
within the County of New York, State of New York. Such Guarantor has also
properly consented to service of process of writs, summons and other legal
process as provided herein, which consent to service of process will be
effective against such Guarantor and the choice of law provision of Section 5.11
hereof that provides that this Guaranty is governed by the laws of the State of
New York is valid.
(h) Bankruptcy. There are no bankruptcy or insolvency proceedings
pending or threatened against such Guarantor.
ARTICLE IV
SECTION 4.1 Affirmative Covenants. Each Guarantor (other than an
individual Guarantor) hereby covenants, for the benefit of the Beneficiary, to
(a) to preserve and keep in full force and effect its existence; and (b) obtain,
comply with the terms of and do all that is necessary to maintain in full force
and effect all authorizations, approvals, licenses and consents required in or
by the laws and regulations of its jurisdiction of incorporation to enable it
lawfully to enter into and perform its obligations under this Guaranty or to
ensure the legality, validity, enforceability or admissibility in evidence in
its jurisdiction of incorporation of this Guaranty.
ARTICLE V
Miscellaneous
SECTION 5.1 No Waiver; Cumulative Remedies. The failure or delay of the
Beneficiary in exercising any right or remedy granted it hereunder shall not
operate as a waiver of such right or remedy or be construed to be a waiver of
any breach of any of the terms and conditions hereof or to be an acquiescence
therein. Each and every right, power and remedy herein specifically given to the
Beneficiary shall be cumulative and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at law,
in equity or by statute and the exercise or the beginning of the exercise of any
right, power or remedy shall not be construed as a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy. A
waiver by the Beneficiary of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy that the Beneficiary
would otherwise have.
SECTION 5.2 Notices. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications required
or permitted by the terms hereof shall be in writing and shall be given in
accordance with Section 5.1 of the Indenture and, in the case of Guarantors,
shall be addressed to any applicable Guarantor and sent to the applicable
addresses as follows:
Xxxxxxx X. Xxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
8
Xxxxxx Xxxxxx
00 Xxxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Xxxxx X. Xxxx
00 Xxxx 00xx Xxxxxx
Xxx. 00X
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxxx X. Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Xxxxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
AP/RH Holdings, LLC
c/o Apollo Real Estate Investment Fund III, L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxx Xxxxxxx
00 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
SECTION 5.3 Amendments and Waivers; Successors and Assigns. (a) Neither
this Guaranty nor any of the terms hereof may be terminated, amended,
supplemented, waived or modified orally, but only by an instrument in writing
signed by Guarantors and the Beneficiary.
(b) This Guaranty shall be binding upon Guarantors and their
respective successors and permitted assigns and shall inure to the benefit of
the Beneficiary and its successors and assigns.
SECTION 5.4 Severability. Any provision of or obligation under this
Guaranty that is determined by competent authority to be prohibited and
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision or obligation in any other
jurisdiction. To be extent permitted by applicable laws and regulations, each
Guarantor hereby waives any provision of law that renders any provision or
obligation hereof prohibited or unenforceable in any respect.
SECTION 5.5 Termination. Subject to the provisions Sections 2.7 hereof,
this Guaranty and each Guarantor's duties and obligations hereunder shall remain
in full force and effect and be binding in accordance with its terms, until the
date on which all Indebtedness and the obligations of each Guarantor hereunder
shall have been satisfied by indefeasible payment and performance in full.
9
SECTION 5.6 Entire Agreement. This Guaranty constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral between or among Guarantors, Borrower and the Beneficiary with respect
to the subject matter hereof.
SECTION 5.7 Article Headings. The headings of the various Articles and
Sections of this Guaranty are for convenience of reference only and shall not
modify, define, expand or limit any of the terms of provisions hereof.
SECTION 5.8 Jurisdiction; Agent for Service of Process. Any suit, action
or proceeding, whether at law or in equity, including any declaratory judgment
or similar suit or action, instituted by or against Guarantors arising out of or
relating in any way to this Guaranty may be brought and enforced in the courts
of the State of New York or of the United States for the Southern District of
New York, and each Guarantor irrevocably consents and submits to the exclusive
jurisdiction of such courts in respect of any suit, action or proceeding and
each Guarantor hereby irrevocably agrees that all claims against it in respect
of such action or proceeding against such Guarantor may be heard and determined
in such courts. Each Guarantor further irrevocably consents to the service of
process in any such suit, action or proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, return receipt requested, to
such Guarantor or to its agent at its address as set forth in Section 5.2 or as
set forth below, respectively. The foregoing shall not limit the right of the
Beneficiary to serve process in any other manner permitted by law or to bring
any action or proceeding, or to obtain execution of any judgment, in any other
jurisdiction.
SECTION 5.9 Waiver of Venue. Each Guarantor hereby irrevocably waives any
option or objection that it may now or hereafter have to the laying of venue of
any such action or proceeding arising under or relating to this Guaranty in any
court located in the county of New York, State of New York, and hereby further
irrevocably waives any claim that a court located in the County of New York,
State of New York is not a convenient forum for any such action or proceeding.
Each Guarantor agrees that, to the fullest extent permitted by applicable laws
and regulations, a final, non-appealable judgment in any such action or
proceeding obtained in any court described in Section 5.8 shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.
SECTION 5.10 WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS GUARANTY.
SECTION 5.11 GOVERNING LAW. THIS GUARANTY SHALL IN ALL RESPECTS BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING
ALL OTEER CHOICE OF LAW AND CONFLICTS I OF LAW RULES.
SECTION 5.12 Subrogation. Until the Obligations have been satisfied in
full and during the continuation of this Guaranty, none of Guarantors shall, by
virtue of any payment made, security realized or moneys received for or on
account of the Obligations:
10
(a) be subrogated to any rights, security or moneys held, received
or receivable by the Beneficiary or be entitled to any right of contribution or
indemnity;
(b) demand, accept, assign, charge or otherwise dispute of any
moneys, obligations or liabilities now or hereafter due or owing to any
Guarantor from Borrower or Remainderman or take any step to enforce any right
against Borrower or Remainderman;
(c) claim or rank as creditor against the estate or in the
bankruptcy or liquidation of Borrower or Remainderman;
(d) receive, claim or have the benefit of any payment, distribution
or security from or on account of Borrower or Remainderman or exercise any right
of set-off or counterclaim as against Borrower or Remainderman or any other
person or claim the benefit of the security or moneys held by or for the account
of the Beneficiary; or
(e) claim or endorse any right of contribution, indemnification or
other form of reimbursement against Borrower, Remainderman or any Partner in
respect of the Obligations.
Each Guarantor shall forthwith pay to the Beneficiary (up to the amount of
the Obligations then due to the Beneficiary) an amount equal to any amount
recovered from the exercise of any right referred to above and shall forthwith
pay or transfer, as the case may be, to and pending such payment or transfer
shall hold in trust for the Beneficiary any of such payment or distribution or
benefit of security in fact received by it.
SECTION 5.13 Survival. All warranties, representations and covenants made
by Guarantors herein or, in any certificate or other instrument delivered by it
under this Guaranty shall be considered to have been relied upon by the
Beneficiary and shall survive the execution and delivery of this Guaranty and
the termination of the Lease and the other Operative Documents, regardless of
any investigation made by the Beneficiary. All statements in any such
certificate or other instrument shall constitute warranties and representations
by Guarantors hereunder.
SECTION 5.14 Counterparts. This Guaranty may be executed simultaneously in
two or more counterparts each of which shall be deemed an original, and it shall
not be necessary in making proof of this Guaranty to produce or account for more
than one such counterpart, hereunder.
SECTION 5.15 Cooperation. Each Guarantor acknowledges that Beneficiary and
its successors and assigns may enter into a Secondary Market Transaction. In
connection therewith, upon request of Beneficiary, each Guarantor shall deliver
to Beneficiary, at Beneficiary's sole cost and expense, a reaffirmation of each
such Guarantor's obligations under this Guaranty as of the date of such
reaffirmation which may be relied upon by such Rating Agencies in connection
with such Secondary Market Transaction.
11
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed
as of the day and year first set forth above.
-----------------------------------------
XXXXXXX X. XXXX
-----------------------------------------
XXXXX X. XXXX
-----------------------------------------
XXXXXX X. XXXXXX
-----------------------------------------
XXXXX XXXXXXX
-----------------------------------------
XXXXXXXX X. XXXXX
-----------------------------------------
XXXX XXXXXXX
AP/RH HOLDINGS LLC, a Delaware
limited liability company
By: Kronus Property III, Inc., as Manager
By:
-------------------------------------
Name:
Title:
EXHIBIT G-2
GUARANTY
THIS GUARANTY, dated as of January ___, 2003 (together with all amendments
and supplements hereto, this "Guaranty") made, jointly and severally, by
PRESIDIO CAPITAL INVESTMENT COMPANY, LLC, a Delaware limited liability company,
NORTHSTAR PARTNERSHIP, L.P., a Delaware limited partnership, and NORTHSTAR
CAPITAL INVESTMENT CORP., a Maryland corporation (collectively, "Guarantors" and
each, a "Guarantor"), in favor of AP/RH HOLDINGS LLC, a Delaware limited
liability company, and the following individuals: XXXXXXX X. XXXX, XXXXX X.
XXXX, XXXXXX X. XXXXXX, XXXXX XXXXXXX, XXXXXXXX X. XXXXX and XXXX XXXXXXX ( each
a "Beneficiary" and together with their respective successors and assigns,
collectively referred to herein as the "Beneficiaries").
WITNESSETH:
WHEREAS, pursuant to that certain Promissory Note, dated as of July 30,
1999, executed by Accotel Property Investors LLC, a Delaware limited liability
company ("Borrower"), and payable to the order of Berkshire Hathaway Credit
Corporation ("Lender") in the original principal amount of Seventy-Three Million
Seven Hundred Twenty Thousand Dollars ($73,720,000.00), which was amended, as of
October 5, 1999, to increase the principal amount thereof to Seventy-Seven
Million Two Hundred Seventy Thousand Dollars ($77,270,000.00) (together with all
other renewals, modifications, increases and extensions thereof, the "Note"),
Borrower has become indebted to Lender with respect to a loan ("Loan") which is
secured by the lien and security interest of the Indenture of Mortgage, Deed of
Trust, Security Agreement, Fixture Filing, Financing Statement and Assignment of
Rents and Leases, dated as of July 30, 1999 (as amended, modified and
supplemented, the "Indenture"), by Borrower and Accotel Remainder LLC, a
Delaware limited liability company ("Remainderman"), in favor of Lender or one
or more trustees for the benefit of Lender and further evidenced, secured or
governed by other instruments and documents executed in connection with the Loan
(together with the Note and Indenture, and as amended, modified and
supplemented, the "Loan Documents"); and
WHEREAS, in connection with the Loan, Beneficiaries delivered the
following guaranties to Lender: (i) that certain Guaranty of Recourse
Obligations (Owner), dated as of July 30, 1999 (as the same may have been
amended, supplemented or reaffirmed, the "Beneficiary Recourse Guaranty"), and
(ii) that certain Guaranty of Payment, dated as of July 30, 1999 (as the same
may have been amended, supplemented or reaffirmed, the "Beneficiary Bankruptcy
Guaranty", and together with the Beneficiary Recourse Guaranty, the "Beneficiary
Guaranties"); and
WHEREAS, Xxxxxxxxxx XX, LLC, a Delaware limited liability company ("JV"),
desires to acquire 100% of the membership interest in Accotel Equity Investors,
LLC ("Equity"), the sole member of Borrower; and
WHEREAS, the Beneficiary Guaranties will not be released in connection
with the acquisition of the membership interest in Equity by JV; and
WHEREAS, Beneficiaries are not willing to allow the acquisition of
interests in Equity by JV while the Beneficiary Guaranties are in effect unless
Guarantors unconditionally guaranty payment and performance of the Obligations
(as hereinafter defined) in accordance with the terms and conditions of this
Guaranty; and
WHEREAS, Guarantors are the owners of a direct or indirect interest in JV,
and Guarantors will directly benefit from Beneficiaries permitting the
acquisition of interests in Equity by JV.
NOW, THEREFORE, as an inducement to Beneficiaries to permit the
acquisition of interests in Equity by JV, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
Article I
SECTION 1.1 Definitions and Rules of Usage. Each capitalized term not
otherwise defined herein shall have the meaning assigned thereto in the
Indenture. The rules of usage set forth in the Indenture shall apply hereto.
Article II
SECTION 2.1 Guaranty of Obligations Under Operative Documents. (a) Each
Guarantor absolutely, irrevocably and unconditionally guaranties to the
Beneficiaries payment of the Obligations as and when the same shall be due and
payable. As used herein, the term "Obligations" means the Recourse Obligations
and the Bankruptcy Obligations.
(b) As used herein, the term "Recourse Obligations" means any and all
loss, damage, cost, expense, liability, claim or other obligation incurred by or
asserted against any Beneficiary to or for the benefit of Lender and attorneys'
fees and costs of enforcing the obligations hereunder (but excluding
consequential damages) arising out of or in connection with the following:
(i) fraud on the part of any Guarantor or any direct or indirect
equity investor in Borrower (other than Equity) which controls, is
controlled by or is under common control with, directly or indirectly, any
Guarantor (each, a "Guarantor Control Party"), or any claims against any
Guarantor or any Guarantor Control Party under the Racketeer Influences
and Corrupt Organizations Act;
(ii) misappropriation by any Guarantor or any Guarantor Control
Party, of rents, security deposits and casualty or condemnation proceeds
with respect to any of the Mortgaged Properties, actually received by or
at the direction of any of them or any of their Affiliates;
(iii) any material untruth in any certificate, instrument or written
statement or other document supplied by any Guarantor or any Guarantor
Control Party to the Lender or to Borrower (on which Borrower relies in
delivering a certificate, instrument, written statement or other document
to Lender) pursuant to or in connection with the Loan, including, without
limitation, in any financial statements of any of such entities, which may
be provided to Lender in connection with the Loan;
2
(iv) voluntary breach of covenants in the Indenture restricting
Transfers of the Mortgaged Properties or Equity Interests in Borrower by
any Guarantor or any Guarantor Control Party or the voluntary creation of
junior liens or the voluntary incurrence of additional indebtedness not
otherwise permitted under the Indenture by any Guarantor or any Guarantor
Control Party;
(v) willful and material breach of the single purpose entity
covenants set forth in the Loan Documents by any Guarantor or any
Guarantor Control Party but only in the event and to the extent that any
such breach shall result in the assertion by third party creditors of the
Partners of Borrower that the assets of Borrower are subject to the claims
of such creditors; and
(vi) Lender's costs of enforcing any of the Loan Documents, but only
(x) to the extent such costs arise in connection with, or as a result of,
any defense, set-off, claim or counterclaim asserted by Guarantor or any
Guarantor Control Party in connection with such enforcement, and (y) if
Borrower is not the prevailing party in such enforcement action.
For purposes hereof, the term "control" shall mean the power to direct and
prohibit the action by the designated equity investor giving rise to the
Recourse Obligation. It is the intention hereunder that Guarantors fully
indemnify the Beneficiaries from and against any loss, damage, cost, expense,
liability, claim or other obligation incurred or asserted under the Beneficiary
Recourse Guaranty to the extent it arises as a result of a matter described in
clauses (i) through (vi) of this Section 2.1(b).
(c) As used herein, the term "Bankruptcy Obligations" means the principal
amount of the Loan, and all interest accrued thereon, any Make Whole Premium,
Late Charges, Default Rate Interest and any other Indebtedness from time to time
outstanding and the amount of any and all Enforcement Costs. "Enforcement Costs"
means the costs, fees and expenses incurred by any Beneficiary or Lender to
enforce, protect, maintain, preserve or foreclose any Beneficiary's or Lender's
rights, remedies and interests under and in respect of this Guaranty or any of
the Loan Documents (including, without limitation, the Beneficiary Bankruptcy
Guaranty), including, without limitation, attorneys' fees and disbursements.
Notwithstanding anything contained herein to the contrary, this Guaranty
is a currently existing obligation of each Guarantor; provided, however, that
Beneficiaries agree to forebear from enforcing this Guaranty only with respect
to the Bankruptcy Obligations against any Guarantor unless and until there has
occurred a Trigger Event (as hereinafter defined). "Trigger Event" means one or
more of the following events:
(vii) if Guarantor or any Guarantor Control Party causes Borrower to
file any voluntary petition under any chapter of Title 11 of the United
States Code, as amended (the "Bankruptcy Code"), or to file any petition
for dissolution or liquidation or take other action to dissolve or to
liquidate, or in any manner seek any relief under any local, state,
federal or other insolvency laws or other laws providing for relief of
debtors; or
(viii) if any involuntary petition under any Chapter of the
Bankruptcy Code is filed against Borrower, or if Borrower directly or
indirectly becomes the subject of any proceedings pursuant to any local,
state, federal or other insolvency laws or other laws providing for the
relief of debtors, or in equity, either at the present time or at any
time. hereafter, if and only if any Guarantor or any Guarantor Control
Party has instigated, consented to, acted in concert or conspired with
such creditors of Borrower (other than Lender) to cause the filing
thereof;
3
provided, however, that a Trigger Event shall not be deemed to have
occurred unless and until Lender shall have asserted a claim against any
Beneficiary under the Beneficiary Bankruptcy Guaranty arising from a
matter described in clause (i) or (ii) of this Section 2.1(c) and, except
for any Enforcement Costs that may have been incurred by any Beneficiary,
the Bankruptcy Obligations shall not exceed the amount claimed by Lender
(it being understood that it is intended that Guarantors fully indemnify
the Beneficiaries from and against any claim by Lender under the
Beneficiary Bankruptcy Guaranty to the extent that a claim thereunder
arises as a result of a Trigger Event hereunder).
(d) Guarantors shall be automatically released from Guarantors'
liabilities (other than those accrued), as set forth in this Guaranty at such
time as no Guarantor shall have any interest, direct or indirect, in Borrower as
a result of a Transfer to an Approved Transferee (as defined in that certain
Consent dated even date herewith by the Lender ("Lender's Consent")), provided
that Beneficiary shall have received not less than 15 days prior written notice
of such Transfer and all of the conditions and requirements provided in the
Lender's Consent with respect to such Transfer shall have been satisfied, as
evidenced by a written confirmation to that effect received by the Beneficiaries
from Lender. This Guaranty shall not be affected or impaired by the termination,
release or expiration of that certain Guaranty dated even date herewith from
Shelbourne Properties I, Inc., Shelbourne Properties II, Inc. and Shelbourne
Properties III, Inc. in favor of Beneficiaries. Except as expressly set forth in
the second preceding sentence, each Guarantor shall continue to remain liable
hereunder, notwithstanding any Transfer which may be permitted under the
Indenture.
SECTION 2.2 Unconditional Obligations. This Guaranty is a joint and
several, primary obligation of each Guarantor and is an unconditional, absolute,
present and continuing obligation and guaranty of payment (and not merely of
collection) and the validity and enforceability of this Guaranty shall be
absolute and unconditional and shall not be impaired, affected or in any way
conditioned or contingent upon, nor subject to any reduction, limitation,
impairment, termination, defense (other than the defense of prior payment or
performance), offset, counterclaim or recoupment whatsoever (all of which are
hereby expressly waived by Guarantors) irrespective of (a) the making of a
demand, the institution of suit or the taking of any other action to enforce
performance, or observance by Borrower or Remainderman of the Obligations, (b)
the validity, regularity or enforceability of any Operative Document or any of
the Obligations or any collateral security, other guaranty, if any, or credit
support therefor or right to offset with respect thereto at any time or from
time to time held by any Beneficiary, (c) any defense, set-off or counterclaim
(other than the defense of prior payment or performance) that may at any time be
available to or be asserted by Borrower, Remainderman or any Guarantor against
any Beneficiary, (d) any attempt to collect from Borrower or Remainderman or any
other entity or to perfect or enforce any security or (e) upon any other action,
occurrence or circumstances whatsoever which might otherwise constitute a
defense available to, or discharge of, a guarantor or surety of any type. This
Guaranty may not be revoked by any Guarantor and shall continue to be effective
with respect to any Obligations arising or created after any attempted
revocation by any Guarantor and after (if a Guarantor is a natural person) such
Guarantor's death (in which event this Guaranty shall be binding upon such
Guarantor's estate and
4
such Guarantor's legal representatives and heirs). Each Guarantor waives any
requirement that any Beneficiary shall have instituted any suit, action or
proceeding or exhausted their remedies or taken any steps to enforce any rights
against Borrower or Remainderman or any other Person (including, without
limitation, any other guarantor) or entity to compel any such performance or to
collect all or any part of such amount pursuant to the provisions of the
Operative Documents or at law or in equity, or otherwise, and regardless of any
other condition or contingency. Lender shall not be required to mitigate
damages, or take any other action to reduce the Obligations.
SECTION 2.3 Amendments, etc., with Respect to the Obligations. Guarantors
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against Guarantors and without notice to or further assent by
Guarantors, (a) any demand for payment or performance of any of the Obligations
made by any Beneficiary may be rescinded by such Beneficiary and any of the
other Obligations continue to be in effect; (b) any demand for payment or
performance of any of the obligations under the Beneficiary Guaranties made by
the Lender may be rescinded by the Lender and any of such other obligations
continue to be in effect, (c) the Indebtedness and the Obligations, or the
liability of any other party upon or for any part thereof, and any collateral
security or guaranty therefor or right of offset with respect thereto, may be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Lender or any Beneficiary; (d) any Operative
Document, or any collateral security document or other guaranty or document
executed and delivered in connection therewith or related thereto may be
amended, modified, supplemented or terminated, in accordance with its terms, as
the parties thereto may deem advisable; and (e) any collateral security,
guaranty or right to offset held by the Lender or any Beneficiary for the
payment or performance of the Indebtedness or the Obligations may be sold,
exchanged, waived, surrendered or released. For purposes of this Section 2.3,
"demand" shall include the commencement and continuance of any legal
proceedings.
SECTION 2.4 Guarantor's Obligations Not Affected. Each Guarantor expressly
agrees that the duties and obligations of such Guarantor under this Guaranty
shall remain in full force and effect, without the necessity of any reservation
of rights against such Guarantor or notice to or further assent by such
Guarantor at any time and from time to time, in whole or in part, and without
regard to, and shall not be impaired, released, discharged, terminated abated,
deferred, diminished, modified or affected, in whole or in part, by any event,
condition, occurrence, circumstance, proceeding, action or failure to act, with
or without notice to, or the knowledge or consent of, such Guarantor, including,
without limitation:
(a) any extension, modification or renewal of, termination, addition or
supplement to, or deletion from, any of the terms of or indulgence with respect
to, or substitutions for, or forbearance of the Obligations or the Indebtedness
or any part thereof or any agreement relating thereto at any time, including,
without limitation, any of the Operative Documents;
(b) any failure, refusal or omission to enforce any right, power or remedy
with respect to the Obligations or the Indebtedness or any part thereof or any
agreement relating thereto at any time, including, without limitation, any of
the Operative Documents;
(c) any waiver of any right, power or remedy or of any default with
respect to the Obligations or the Indebtedness or any part thereof or any
agreement relating thereto at any time, including, without limitation, any of
the Operative Documents;
5
(d) any release, surrender, compromise, settlement, waiver, subordination
or modification, with or without consideration, of any other guaranties with
respect to the Obligations, the Indebtedness or the obligations under the
Beneficiary Guaranties or any part thereof, or any other obligation of any
Person with respect to the Obligations, the Indebtedness or the obligations
under the Beneficiary Guaranties or any part thereof;
(e) the lack of genuineness, unenforceability or invalidity of the
Obligations or the Indebtedness or any part thereof or any agreement relating
thereto at any time, including, without limitation, any of the Operative
Documents;
(f) except as may be otherwise expressly provided in the Indenture or this
Guaranty, any change in the ownership of Borrower, Equity or JV or the
insolvency, bankruptcy or any other change in the legal status of Borrower,
Equity, JV or any Guarantor or any rejection or modification of the obligations
of Borrower or those of any Person under the Operative Documents as a result of
any bankruptcy, reorganization, insolvency or similar proceeding;
(g) the change in or the imposition of any applicable laws and regulations
or other governmental act that does or might impair, delay or in any way affect
the validity, enforceability, or the payment when due, of the Obligations, the
Indebtedness or the obligations under the Beneficiary Guaranties to the extent
not prohibited by Applicable Laws and Regulations or otherwise;
(h) the existence of any claim, set off or other rights or defenses (other
than the defense of prior payment or performance) that any Guarantor may have at
any time against Borrower or any Beneficiary, Lender or any other Person in
connection herewith or with an unrelated transaction and the existence of any
claim, setoff or other rights or defenses that any Beneficiary may have against
any Guarantor, Borrower, Lender or any other Person in connection with the
Operative Documents or with an unrelated transaction;
(i) any merger or consolidation of Borrower, Equity, JV or any Guarantor
into or with any other Person, or, except as may be otherwise expressly provided
in the Indenture, any sale, lease or transfer of any or all of the assets of
Borrower, Equity, JV or any Guarantor to any other Person;
(j) the rights, powers or privileges any Beneficiary or Lender may now or
hereafter have against any Person or collateral;
(k) any defect in title, condition, operation or fitness of use of any
Property, any casualty or condemnation affecting any Property or any sublease,
assignment, renewal, extension or other transfer or continuation of Borrower's
rights under the Operative Documents, whether in accordance with the terms of
the Operative Documents or otherwise;
(l) any exchange, surrender or release, in whole or in part, of any
security which may be held by the Lender under the Operative Documents; or
(m) any other action, omission, occurrence or circumstance whatsoever
which may in any manner or to any extent vary the risk or effect a legal or
equitable defense or discharge of any Guarantor hereunder as a matter of law or
otherwise.
6
SECTION 2.5 Waiver by Guarantors. Each Guarantor unconditionally waives
and releases, to the fullest extent permitted by applicable laws and
regulations, any and all (a) notice of the acceptance of this Guaranty and of
any change in Borrower's financial condition or of the occurrence of any breach
by Borrower under the Loan Documents or any Event of Default; (b) notices of the
creation, renewal, extension or accrual of any Obligation or any of the matters
referred to in Section 2.4 hereof or any notice of or proof of reliance by any
Beneficiary upon this Guaranty or acceptance of this Guaranty (the assignment of
interests in Equity shall conclusively be deemed to have been created,
contracted, incurred, renewed, extended, amended or waived in reliance upon this
Guaranty and all dealings between Borrower, Remainderman or any Guarantor and
the Beneficiaries shall be conclusively presumed to have been had or consummated
in reliance upon this Guaranty); (c) notices which may be required by statute,
rule of law or otherwise, now or hereafter in effect, to preserve intact any
rights of the Beneficiaries against any Guarantor; (d) the right to interpose
all substantive and procedural defenses of the law of guaranty, indemnification
and suretyship, except the defenses of prior payment or prior performance by any
Guarantor of the Obligations; (e) all rights and remedies accorded by applicable
laws and regulations to guarantors or sureties, including any extension of time
conferred by any law now or hereafter in effect; (f) any right or claim of right
to cause a marshaling of Borrower's or Remainderman's assets or to cause the
Beneficiaries to proceed against Borrower or Remainderman or any collateral held
by the Beneficiaries at any time or in any particular order; (g) rights to the
endorsement, assertion or exercise by the Beneficiaries or the Lender of any
right, power, privilege or remedy conferred herein or in any Operative Document
or otherwise; (h) requirements of promptness or diligence on the part of the
Beneficiary or Lender; (i) any renewal, extension or continuation of Borrower's
or Remainderman's rights under the Operative Documents or any notices of the
sale, transfer or other disposition of any right, title to or interest in the
Mortgaged Properties or any Operative Document; (j) rights and defenses arising
out of an election of remedies by the Beneficiaries or Lender, even though that
election of remedies has destroyed Guarantors' rights of subrogation and
reimbursement against Borrower by operation of law or otherwise; (k) other
circumstances whatsoever (except the defenses of prior payment or prior
performance by any Guarantor of the Obligations) which might otherwise
constitute a legal or equitable discharge, release or defense of a guarantor or
surety, or which might otherwise limit recourse against any Guarantor; or (l)
the right to interpose any defense (except defense of prior payment or prior
performance) set off or counterclaim of any nature or description in any action
or proceeding. No failure to exercise and no delay in exercising, on the part of
any Beneficiary or Lender, any right, power or privilege hereunder or under the
Beneficiary Guaranties shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or privilege preclude any other or
further exercise thereof, or the exercise of any other power or right. The
rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 2.6 SECTION 2.6 [Intentionally Omitted]
SECTION 2.7 Reinstatement. This Guaranty shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, in whole or in
part, of any of the Obligations paid by any Guarantor (i) is rescinded or must
otherwise be restored or returned by the Beneficiary upon the bankruptcy,
insolvency, reorganization, arrangement, adjustment, composition, dissolution,
liquidation, or the like, of Borrower, Remainderman, Equity, JV or any
Guarantor, or as a result of, the appointment of a custodian, receiver, trustee
or other officer with similar powers with respect to Borrower, Remainderman,
Equity, JV or any Guarantor or any substantial part of either Person's
respective property, or otherwise, or (ii) is returned to any Guarantor by
reason of a decree, moratorium or other sovereign act of any governmental
authority, in each case, all as though such payment had not been made
notwithstanding any termination of this Guaranty or any Operative Document.
7
Article III
SECTION 3.1 Representations and Warranties of Guarantor. Each Guarantor
hereby represents and warrants to the Beneficiary as of the Closing Date that:
(a) Benefit. Such Guarantor is the owner of a direct or indirect interest
in Borrower and has received or will receive, direct or indirect benefit from
the acquisition by JV of its interests in Equity.
(b) Authorizations. All acts, conditions, authorizations and other things
required to be done, fulfilled and performed by such Guarantor in order:
(i) to enable such Guarantor lawfully to enter into, exercise such
Guarantor's rights under and perform and comply with the
obligations expressed to be assumed by such Guarantor in this
Guaranty; and
(ii) to ensure that the obligations expressed to be assumed by such
Guarantor in this Guaranty are legal, valid and binding and
enforceable against such Guarantor in accordance with the
respective terms thereof; have been done, fulfilled and
performed and are in full force and effect.
(c) Legal Validity. This Guaranty has been duly executed and delivered by
such Guarantor. The obligations expressed to be assumed by such Guarantor in
this Guaranty are legal and valid obligations binding on it and enforceable in
accordance with the terms of this Guaranty except as such enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting creditors
generally and by general equitable principles. This Guaranty is in full force
and effect as of the date of acquisition by JV of its interest in Equity, not
subject to any right of rescission, setoff, counterclaim or defense by such
Guarantor nor will the operation of any of the terms of the Guaranty or the
exercise of any right thereunder, render this Guaranty unenforceable against
such Guarantor, in whole or in part, or subject to any right of rescission,
setoff, counterclaim or defense by such Guarantor and such Guarantor has not
asserted any right of rescission, setoff, counterclaim or defense with respect
thereto.
(d) Litigation. No action, suit, arbitration, governmental investigation,
or administrative proceeding of or before any court, tribunal, agency or other
governmental authority, is current, pending or to be the best of such
Guarantor's knowledge and belief threatened which might, if adversely
determined, (i) have a material adverse affect on such Guarantor's business, or
financial condition or its ability to perform its obligations hereunder or (ii)
restrain such Guarantor from entering into, exercising any of its rights under
or performing, enforcing or complying with any of its obligations hereunder.
(e) Non-conflict. The execution, delivery and performance of this Guaranty
will not constitute to the best of such Guarantor's knowledge any breach of, or
default under, any contractual, governmental or public obligation binding upon
such Guarantor.
8
(f) Consents. Such Guarantor is not required to obtain any consent that
has not been obtained or any permit, license, approval, order or authorization
from, or to file any declaration or statement with, any governmental authority
or any waiver of any right of any Person, in connection with or as a condition
to the execution, delivery or performance of or as a condition to the validity
of this Guaranty.
(g) Consent to Jurisdiction, Admissibility, etc. Such Guarantor has
properly consented to the jurisdiction of the state and federal courts located
within the County of New York, State of New York. Such Guarantor has also
properly consented to service of process of writs, summons and other legal
process as provided herein, which consent to service of process will be
effective against such Guarantor and the choice of law provision of Section 5.11
hereof that provides that this Guaranty is governed by the laws of the State of
New York is valid.
(h) Bankruptcy. There are no bankruptcy or insolvency proceedings pending
or threatened against such Guarantor.
Article IV
Covenants
SECTION 4.1 Affirmative Covenants. Each Guarantor hereby covenants, for
the benefit of the Beneficiaries, (a) to preserve and keep in full force and
effect its existence; and (b) obtain, comply with the terms of and do all that
is necessary to maintain in full force and effect all authorizations, approvals,
licenses and consents required in or by the laws and regulations of its
jurisdiction of incorporation to enable it lawfully to enter into and perform
its obligations under this Guaranty or to ensure the legality, validity,
enforceability or admissibility in evidence in its jurisdiction of formation of
this Guaranty.
Article V
Miscellaneous
SECTION 5.1 No Waiver; Cumulative Remedies. The failure or delay of any
Beneficiary in exercising any right or remedy granted it hereunder shall not
operate as a waiver of such right or remedy or be construed to be a waiver of
any breach of any of the terms and conditions hereof or to be an acquiescence
therein. Each and every right, power and remedy herein specifically given to the
Beneficiaries shall be cumulative and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at law,
in equity or by statute and the exercise or the beginning of the exercise of any
right, power or remedy shall not be construed as a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy. A
waiver by the Beneficiaries of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy that the Beneficiaries
would otherwise have.
SECTION 5.2 Notices. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications required
or permitted by the terms hereof shall be in writing and shall be effective if
hand delivered, sent by certified or registered, United States mail, postage
prepaid, return receipt requested, or expedited prepaid delivery service, either
commercial or United States Postal Service, with proof of attempted delivery, at
the applicable address listed below or by facsimile to the applicable facsimile
number listed below:
9
If to any Guarantor:
c/o NorthStar Capital Investment Corp.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. XxXxxxxx
Xxxxxx Xxxxx
FAX: 000-000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
FAX: 000-000-0000
If to any Beneficiary:
c/o U.S. Realty Advisors
1370 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
FAX: 000-000-0000
Such address or facsimile numbers may be changed by any party by a written
notice to the other parties hereto in the manner provided for in this Section. A
notice shall be deemed to have been given when received or upon refusal to
accept.
SECTION 5.3 Amendments and Waivers; Successors and Assigns. (a) Neither
this Guaranty nor any of the terms hereof may be terminated, amended,
supplemented, waived or modified orally, but only by an instrument in writing
signed by Guarantors and the Beneficiaries.
(b) This Guaranty shall be binding upon Guarantors and their respective
successors and permitted assigns and shall inure to the benefit of the
Beneficiaries and their respective successors and assigns.
SECTION 5.4 Severability. Any provision of or obligation under this
Guaranty that is determined by competent authority to be prohibited and
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision or obligation in any other
jurisdiction. To the extent permitted by applicable laws and regulations, each
Guarantor hereby waives any provision of law that renders any provision or
obligation hereof prohibited or unenforceable in any respect.
SECTION 5.5 Termination. Except as may be otherwise expressly provided in
this Guaranty, subject to the provisions of Sections 2.1(d) and 2.7 hereof, this
Guaranty and each Guarantor's duties and obligations hereunder shall remain in
full force and effect and be binding in accordance with its terms, until the
later of (i) the date on which all obligations of each Guarantor hereunder shall
have been satisfied by indefeasible payment and performance in full and (ii) the
date on which the Beneficiary Guaranties have been indefeasibly terminated,
discharged and released in full.
10
SECTION 5.6 Entire Agreement. This Guaranty constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral between or among Guarantors and the Beneficiary with respect to the
subject matter hereof.
SECTION 5.7 Article Headings. The headings of the various Articles and
Sections of this Guaranty are for convenience of reference only and shall not
modify, define, expand or limit any of the terms of provisions hereof.
SECTION 5.8 Jurisdiction; Agent for Service of Process. Any suit, action
or proceeding, whether at law or in equity, including any declaratory judgment
or similar suit or action, instituted by or against Guarantors arising out of or
relating in any way to this Guaranty may be brought and enforced in the courts
of the State of New York or of the United States for the Southern District of
New York, and each Guarantor irrevocably consents and submits to the exclusive
jurisdiction of such courts in respect of any suit, action or proceeding and
each Guarantor hereby irrevocably agrees that all claims against it in respect
of such action or proceeding against such Guarantor may be heard and determined
in such courts. Each Guarantor further irrevocably consents to the service of
process in any such suit, action or proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, return receipt requested, to
such Guarantor or to its agent at its address as set forth in Section 5.2 or as
set forth below, respectively. The foregoing shall not limit the right of the
Beneficiary to serve process in any other manner permitted by law or to bring
any action or proceeding, or to obtain execution of any judgment, in any other
jurisdiction.
SECTION 5.9 Waiver of Venue. Each Guarantor hereby irrevocably waives any
option or objection that it may now or hereafter have to the laying of venue of
any such action or proceeding arising under or relating to this Guaranty in any
court located in the country of New York, State of New York, and hereby further
irrevocably waives any claim that a court located in the County of New York,
State of New York is not a convenient forum for any such action or proceeding.
Each Guarantor agrees that, to the fullest extent permitted by applicable laws
and regulations, a final, non- appealable judgment in any such action or
proceeding obtained in any court described in Section 5.8 shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.
SECTION 5.10 WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS GUARANTY.
SECTION 5.11 GOVERNING LAW. THIS GUARANTY SHALL IN ALL RESPECTS BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING
ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES.
11
SECTION 5.12 Subrogation. Until the Indebtedness has been satisfied in
full and during the continuation of this Guaranty, none of Guarantors shall, by
virtue of any payment made, security realized or moneys received for or on
account of the Obligations:
(a) be subrogated to any rights, security or moneys held, received or
receivable by the Beneficiary or be entitled to any right of contribution or
indemnity;
(b) demand, accept, assign, charge or otherwise dispute of any moneys,
obligations or liabilities now or hereafter due or owing to any Guarantor from
Borrower or Remainderman or take any step to enforce any right against Borrower
or Remainderman;
(c) claim or rank as creditor against the estate or in the bankruptcy or
liquidation of Borrower or Remainderman;
(d) receive, claim or have the benefit of any payment, distribution or
security from or on account of Borrower or Remainderman or exercise any right of
set-off or counterclaim as against Borrower or Remainderman or any other person
or claim the benefit of the security or moneys held by or for the account of the
Beneficiaries; or
(e) claim or endorse any right of contribution, indemnification or other
form of reimbursement against Borrower, Remainderman or any Partner in respect
of the Obligations.
Each Guarantor shall forthwith pay to the Beneficiaries (up to the amount
of the Obligations then due to the Beneficiaries) an amount equal to any amount
recovered from the exercise of any right referred to above and shall forthwith
pay or transfer, as the case may be, to and pending such payment or transfer
shall hold in trust for the Beneficiaries any of such payment or distribution or
benefit of security in fact received by it.
SECTION 5.13 Survival. All warranties, representations and covenants made
by Guarantors herein or in any certificate or other instrument delivered by it
under this Guaranty shall be considered to have been relied upon by the
Beneficiaries and shall survive the execution and delivery of this Guaranty,
regardless of any investigation made by the Beneficiaries. All statements in any
such certificate or other instrument shall constitute warranties and
representations by Guarantors hereunder.
SECTION 5.14 Counterparts. This Guaranty may be executed simultaneously in
two or more counterparts each of which shall be deemed an original, and it shall
not be necessary in making proof of this Guaranty to produce or account for more
than one such counterpart. hereunder.
SECTION 5.15 Cooperation. Upon request of any Beneficiary, each Guarantor
shall deliver to Beneficiaries a reaffirmation of each such Guarantor's
obligations under this Guaranty as of the date of such reaffirmation.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
12
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed
as of the day and year first set forth above.
PRESIDIO CAPITAL INVESTMENT COMPANY LLC
By:
------------------------------------
NORTHSTAR PARTNERSHIP, L.P.
By: NorthStar Capital Investment Corp.,
Its General Partner
By:
------------------------------------
NORTHSTAR CAPITAL INVESTMENT CORP.
By:
------------------------------------
EXHIBIT G-3
GUARANTY
THIS GUARANTY, dated as of January ___, 2003 (together with all amendments
and supplements hereto, this "Guaranty") made, jointly and severally, by
SHELBOURNE PROPERTIES I, Inc., a Delaware corporation, SHELBOURNE PROPERTIES II,
Inc., a Delaware corporation, and SHELBOURNE PROPERTIES III, Inc., a Delaware
corporation (collectively, "Guarantors" and each, a "Guarantor"), in favor of
AP/RH HOLDINGS LLC, a Delaware limited liability company, and the following
individuals: XXXXXXX X. XXXX, XXXXX X. XXXX, XXXXXX X. XXXXXX, XXXXX XXXXXXX,
XXXXXXXX X. XXXXX and XXXX XXXXXXX ( each a "Beneficiary" and together with
their respective successors and assigns, collectively referred to herein as the
"Beneficiaries").
WITNESSETH:
WHEREAS, pursuant to that certain Promissory Note, dated as of July 30,
1999, executed by Accotel Property Investors LLC, a Delaware limited liability
company ("Borrower"), and payable to the order of Berkshire Hathaway Credit
Corporation ("Lender") in the original principal amount of Seventy-Three Million
Seven Hundred Twenty Thousand Dollars ($73,720,000.00), which was amended, as of
October 5, 1999, to increase the principal amount thereof to Seventy-Seven
Million Two Hundred Seventy Thousand Dollars ($77,270,000.00) (together with all
other renewals, modifications, increases and extensions thereof, the "Note"),
Borrower has become indebted to Lender with respect to a loan ("Loan") which is
secured by the lien and security interest of the Indenture of Mortgage, Deed of
Trust, Security Agreement, Fixture Filing, Financing Statement and Assignment of
Rents and Leases, dated as of July 30, 1999 (as amended, modified and
supplemented, the "Indenture"), by Borrower and Accotel Remainder LLC, a
Delaware limited liability company ("Remainderman"), in favor of Lender or one
or more trustees for the benefit of Lender and further evidenced, secured or
governed by other instruments and documents executed in connection with the Loan
(together with the Note and Indenture, and as amended, modified and
supplemented, the "Loan Documents"); and
WHEREAS, in connection with the Loan, Beneficiaries delivered the
following guaranties to Lender: (i) that certain Guaranty of Recourse
Obligations (Owner), dated as of July 30, 1999 (as the same may have been
amended, supplemented or reaffirmed, the "Beneficiary Recourse Guaranty"), and
(ii) that certain Guaranty of Payment, dated as of July 30, 1999 (as the same
may have been amended, supplemented or reaffirmed, the "Beneficiary Bankruptcy
Guaranty", and together with the Beneficiary Recourse Guaranty, the "Beneficiary
Guaranties"); and
WHEREAS, Xxxxxxxxxx XX, LLC, a Delaware limited liability company ("JV"),
desires to acquire 100% of the membership interest in Accotel Equity Investors,
LLC ("Equity"), the sole member of Borrower; and
WHEREAS, the Beneficiary Guaranties will not be released in connection
with the acquisition of the membership interest in Equity by JV; and
WHEREAS, Beneficiaries are not willing to allow the acquisition of
interests in Equity by JV while the Beneficiary Guaranties are in effect unless
Guarantors unconditionally guaranty payment and performance of the Obligations
(as hereinafter defined) in accordance with the terms and conditions of this
Guaranty; and
WHEREAS, Guarantors are the owners of a direct or indirect interest in JV,
and Guarantors will directly benefit from Beneficiaries permitting the
acquisition of interests in Equity by JV.
NOW, THEREFORE, as an inducement to Beneficiaries to permit the
acquisition of interests in Equity by JV, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
ARTICLE I
SECTION 1.1 Definitions and Rules of Usage. Each capitalized term not
otherwise defined herein shall have the meaning assigned thereto in the
Indenture. The rules of usage set forth in the Indenture shall apply hereto.
ARTICLE II
SECTION 2.1 Guaranty of Obligations Under Operative Documents. (a) Each
Guarantor absolutely, irrevocably and unconditionally guaranties to the
Beneficiaries payment of the Obligations as and when the same shall be due and
payable. As used herein, the term "Obligations" means the Recourse Obligations
and the Bankruptcy Obligations.
(b) As used herein, the term "Recourse Obligations" means any and all
loss, damage, cost, expense, liability, claim or other obligation incurred by or
asserted against any Beneficiary to or for the benefit of Lender and attorneys'
fees and costs of enforcing the obligations hereunder (but excluding
consequential damages) arising out of or in connection with the following:
(i) fraud on the part of any Guarantor or any direct or indirect
equity investor in Borrower (other than Equity) which controls, is
controlled by or is under common control with, directly or indirectly, any
Guarantor (each, a "Guarantor Control Party"), or any claims against any
Guarantor or any Guarantor Control Party under the Racketeer Influences
and Corrupt Organizations Act;
(ii) misappropriation by any Guarantor or any Guarantor Control
Party, of rents, security deposits and casualty or condemnation proceeds
with respect to any of the Mortgaged Properties, actually received by or
at the direction of any of them or any of their Affiliates;
(iii) any material untruth in any certificate, instrument or written
statement or other document supplied by any Guarantor or any Guarantor
Control Party to the Lender or to Borrower (on which Borrower relies in
delivering a certificate, instrument, written statement or other document
to Lender) pursuant to or in connection with the Loan, including, without
limitation, in any financial statements of any of such entities, which may
be provided to Lender in connection with the Loan;
2
(iv) voluntary breach of covenants in the Indenture restricting
Transfers of the Mortgaged Properties or Equity Interests in Borrower by
any Guarantor or any Guarantor Control Party or the voluntary creation of
junior liens or the voluntary incurrence of additional indebtedness not
otherwise permitted under the Indenture by any Guarantor or any Guarantor
Control Party;
(v) willful and material breach of the single purpose entity
covenants set forth in the Loan Documents by any Guarantor or any
Guarantor Control Party but only in the event and to the extent that any
such breach shall result in the assertion by third party creditors of the
Partners of Borrower that the assets of Borrower are subject to the claims
of such creditors; and
(vi) Lender's costs of enforcing any of the Loan Documents, but only
(x) to the extent such costs arise in connection with, or as a result of,
any defense, set-off, claim or counterclaim asserted by Guarantor or any
Guarantor Control Party in connection with such enforcement, and (y) if
Borrower is not the prevailing party in such enforcement action.
For purposes hereof, the term "control" shall mean the power to direct and
prohibit the action by the designated equity investor giving rise to the
Recourse Obligation. It is the intention hereunder that Guarantors fully
indemnify the Beneficiaries from and against any loss, damage, cost, expense,
liability, claim or other obligation incurred or asserted under the Beneficiary
Recourse Guaranty to the extent it arises as a result of a matter described in
clauses (i) through (vi) of this Section 2.1(b).
(c) As used herein, the term "Bankruptcy Obligations" means the principal
amount of the Loan, and all interest accrued thereon, any Make Whole Premium,
Late Charges, Default Rate Interest and any other Indebtedness from time to time
outstanding and the amount of any and all Enforcement Costs. "Enforcement Costs"
means the costs, fees and expenses incurred by any Beneficiary or Lender to
enforce, protect, maintain, preserve or foreclose any Beneficiary's or Lender's
rights, remedies and interests under and in respect of this Guaranty or any of
the Loan Documents (including, without limitation, the Beneficiary Bankruptcy
Guaranty), including, without limitation, attorneys' fees and disbursements.
Notwithstanding anything contained herein to the contrary, this Guaranty
is a currently existing obligation of each Guarantor; provided, however, that
Beneficiaries agree to forebear from enforcing this Guaranty only with respect
to the Bankruptcy Obligations against any Guarantor unless and until there has
occurred a Trigger Event (as hereinafter defined). "Trigger Event" means one or
more of the following events:
(vii) if Guarantor or any Guarantor Control Party causes Borrower to
file any voluntary petition under any chapter of Title 11 of the United
States Code, as amended (the "Bankruptcy Code"), or to file any petition
for dissolution or liquidation or take other action to dissolve or to
liquidate, or in any manner seek any relief under any local, state,
federal or other insolvency laws or other laws providing for relief of
debtors; or
(viii) if any involuntary petition under any Chapter of the
Bankruptcy Code is filed against Borrower, or if Borrower directly or
indirectly becomes the subject of any proceedings pursuant to any local,
state, federal or other insolvency laws or other laws providing for the
relief of debtors, or in equity, either at the present time or at any
time. hereafter, if and only if any Guarantor or any Guarantor Control
Party has instigated, consented to, acted in concert or conspired with
such creditors of Borrower (other than Lender) to cause the filing
thereof;
3
provided, however, that a Trigger Event shall not be deemed to have
occurred unless and until Lender shall have asserted a claim against any
Beneficiary under the Beneficiary Bankruptcy Guaranty arising from a
matter described in clause (i) or (ii) of this Section 2.1(c) and, except
for any Enforcement Costs that may have been incurred by any Beneficiary,
the Bankruptcy Obligations shall not exceed the amount claimed by Lender
(it being understood that it is intended that Guarantors fully indemnify
the Beneficiaries from and against any claim by Lender under the
Beneficiary Bankruptcy Guaranty to the extent that a claim thereunder
arises as a result of a Trigger Event hereunder).
(d) Guarantors shall be automatically released from Guarantors'
liabilities (other than those accrued), as set forth in this Guaranty at such
time as no Guarantor shall have any interest, direct or indirect, in Borrower as
a result of a Transfer to an Approved Transferee (as defined in that certain
Consent dated even date herewith by the Lender ("Lender's Consent")), provided
that Beneficiary shall have received not less than 15 days prior written notice
of such Transfer and all of the conditions and requirements provided in the
Lender's Consent with respect to such Transfer shall have been satisfied, as
evidenced by a written confirmation to that effect received by the Beneficiaries
from Lender. This Guaranty shall not be affected or impaired by the termination,
release or expiration of that certain Guaranty dated even date herewith from
Presidio Capital Investment Company, LLC, NorthStar Partnership, L.P. and
NorthStar Capital Investment Corp. in favor of Beneficiaries. Except as
expressly set forth in the second preceding sentence, each Guarantor shall
continue to remain liable hereunder, notwithstanding any Transfer which may be
permitted under the Indenture.
SECTION 2.2 Unconditional Obligations. This Guaranty is a joint and
several, primary obligation of each Guarantor and is an unconditional, absolute,
present and continuing obligation and guaranty of payment (and not merely of
collection) and the validity and enforceability of this Guaranty shall be
absolute and unconditional and shall not be impaired, affected or in any way
conditioned or contingent upon, nor subject to any reduction, limitation,
impairment, termination, defense (other than the defense of prior payment or
performance), offset, counterclaim or recoupment whatsoever (all of which are
hereby expressly waived by Guarantors) irrespective of (a) the making of a
demand, the institution of suit or the taking of any other action to enforce
performance, or observance by Borrower or Remainderman of the Obligations, (b)
the validity, regularity or enforceability of any Operative Document or any of
the Obligations or any collateral security, other guaranty, if any, or credit
support therefor or right to offset with respect thereto at any time or from
time to time held by any Beneficiary, (c) any defense, set-off or counterclaim
(other than the defense of prior payment or performance) that may at any time be
available to or be asserted by Borrower, Remainderman or any Guarantor against
any Beneficiary, (d) any attempt to collect from Borrower or Remainderman or any
other entity or to perfect or enforce any security or (e) upon any other action,
occurrence or circumstances whatsoever which might otherwise constitute a
defense available to, or discharge of, a guarantor or surety of any type. This
Guaranty may not be revoked by any Guarantor and shall continue to be effective
with respect to any Obligations arising or created after any attempted
revocation by any Guarantor and after (if a Guarantor is a natural person) such
4
Guarantor's death (in which event this Guaranty shall be binding upon such
Guarantor's estate and such Guarantor's legal representatives and heirs). Each
Guarantor waives any requirement that any Beneficiary shall have instituted any
suit, action or proceeding or exhausted their remedies or taken any steps to
enforce any rights against Borrower or Remainderman or any other Person
(including, without limitation, any other guarantor) or entity to compel any
such performance or to collect all or any part of such amount pursuant to the
provisions of the Operative Documents or at law or in equity, or otherwise, and
regardless of any other condition or contingency. Lender shall not be required
to mitigate damages, or take any other action to reduce the Obligations.
SECTION 2.3 Amendments, etc., with Respect to the Obligations. Guarantors
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against Guarantors and without notice to or further assent by
Guarantors, (a) any demand for payment or performance of any of the Obligations
made by any Beneficiary may be rescinded by such Beneficiary and any of the
other Obligations continue to be in effect; (b) any demand for payment or
performance of any of the obligations under the Beneficiary Guaranties made by
the Lender may be rescinded by the Lender and any of such other obligations
continue to be in effect, (c) the Indebtedness and the Obligations, or the
liability of any other party upon or for any part thereof, and any collateral
security or guaranty therefor or right of offset with respect thereto, may be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Lender or any Beneficiary; (d) any Operative
Document, or any collateral security document or other guaranty or document
executed and delivered in connection therewith or related thereto may be
amended, modified, supplemented or terminated, in accordance with its terms, as
the parties thereto may deem advisable; and (e) any collateral security,
guaranty or right to offset held by the Lender or any Beneficiary for the
payment or performance of the Indebtedness or the Obligations may be sold,
exchanged, waived, surrendered or released. For purposes of this Section 2.3,
"demand" shall include the commencement and continuance of any legal
proceedings.
SECTION 2.4 Guarantor's Obligations Not Affected. Each Guarantor expressly
agrees that the duties and obligations of such Guarantor under this Guaranty
shall remain in full force and effect, without the necessity of any reservation
of rights against such Guarantor or notice to or further assent by such
Guarantor at any time and from time to time, in whole or in part, and without
regard to, and shall not be impaired, released, discharged, terminated abated,
deferred, diminished, modified or affected, in whole or in part, by any event,
condition, occurrence, circumstance, proceeding, action or failure to act, with
or without notice to, or the knowledge or consent of, such Guarantor, including,
without limitation:
(a) any extension, modification or renewal of, termination, addition or
supplement to, or deletion from, any of the terms of or indulgence with respect
to, or substitutions for, or forbearance of the Obligations or the Indebtedness
or any part thereof or any agreement relating thereto at any time, including,
without limitation, any of the Operative Documents;
(b) any failure, refusal or omission to enforce any right, power or remedy
with respect to the Obligations or the Indebtedness or any part thereof or any
agreement relating thereto at any time, including, without limitation, any of
the Operative Documents;
(c) any waiver of any right, power or remedy or of any default with
respect to the Obligations or the Indebtedness or any part thereof or any
agreement relating thereto at any time, including, without limitation, any of
the Operative Documents;
5
(d) any release, surrender, compromise, settlement, waiver, subordination
or modification, with or without consideration, of any other guaranties with
respect to the Obligations, the Indebtedness or the obligations under the
Beneficiary Guaranties or any part thereof, or any other obligation of any
Person with respect to the Obligations, the Indebtedness or the obligations
under the Beneficiary Guaranties or any part thereof;
(e) the lack of genuineness, unenforceability or invalidity of the
Obligations or the Indebtedness or any part thereof or any agreement relating
thereto at any time, including, without limitation, any of the Operative
Documents;
(f) except as may be otherwise expressly provided in the Indenture or this
Guaranty, any change in the ownership of Borrower, Equity or JV or the
insolvency, bankruptcy or any other change in the legal status of Borrower,
Equity, JV or any Guarantor or any rejection or modification of the obligations
of Borrower or those of any Person under the Operative Documents as a result of
any bankruptcy, reorganization, insolvency or similar proceeding;
(g) the change in or the imposition of any applicable laws and regulations
or other governmental act that does or might impair, delay or in any way affect
the validity, enforceability, or the payment when due, of the Obligations, the
Indebtedness or the obligations under the Beneficiary Guaranties to the extent
not prohibited by Applicable Laws and Regulations or otherwise;
(h) the existence of any claim, set off or other rights or defenses (other
than the defense of prior payment or performance) that any Guarantor may have at
any time against Borrower or any Beneficiary, Lender or any other Person in
connection herewith or with an unrelated transaction and the existence of any
claim, setoff or other rights or defenses that any Beneficiary may have against
any Guarantor, Borrower, Lender or any other Person in connection with the
Operative Documents or with an unrelated transaction;
(i) any merger or consolidation of Borrower, Equity, JV or any Guarantor
into or with any other Person, or, except as may be otherwise expressly provided
in the Indenture, any sale, lease or transfer of any or all of the assets of
Borrower, Equity, JV or any Guarantor to any other Person;
(j) the rights, powers or privileges any Beneficiary or Lender may now or
hereafter have against any Person or collateral;
(k) any defect in title, condition, operation or fitness of use of any
Property, any casualty or condemnation affecting any Property or any sublease,
assignment, renewal, extension or other transfer or continuation of Borrower's
rights under the Operative Documents, whether in accordance with the terms of
the Operative Documents or otherwise;
(l) any exchange, surrender or release, in whole or in part, of any
security which may be held by the Lender under the Operative Documents; or
(m) any other action, omission, occurrence or circumstance whatsoever
which may in any manner or to any extent vary the risk or effect a legal or
equitable defense or discharge of any Guarantor hereunder as a matter of law or
otherwise.
6
SECTION 2.5 Waiver by Guarantors. Each Guarantor unconditionally waives
and releases, to the fullest extent permitted by applicable laws and
regulations, any and all (a) notice of the acceptance of this Guaranty and of
any change in Borrower's financial condition or of the occurrence of any breach
by Borrower under the Loan Documents or any Event of Default; (b) notices of the
creation, renewal, extension or accrual of any Obligation or any of the matters
referred to in Section 2.4 hereof or any notice of or proof of reliance by any
Beneficiary upon this Guaranty or acceptance of this Guaranty (the assignment of
interests in Equity shall conclusively be deemed to have been created,
contracted, incurred, renewed, extended, amended or waived in reliance upon this
Guaranty and all dealings between Borrower, Remainderman or any Guarantor and
the Beneficiaries shall be conclusively presumed to have been had or consummated
in reliance upon this Guaranty); (c) notices which may be required by statute,
rule of law or otherwise, now or hereafter in effect, to preserve intact any
rights of the Beneficiaries against any Guarantor; (d) the right to interpose
all substantive and procedural defenses of the law of guaranty, indemnification
and suretyship, except the defenses of prior payment or prior performance by any
Guarantor of the Obligations; (e) all rights and remedies accorded by applicable
laws and regulations to guarantors or sureties, including any extension of time
conferred by any law now or hereafter in effect; (f) any right or claim of right
to cause a marshaling of Borrower's or Remainderman's assets or to cause the
Beneficiaries to proceed against Borrower or Remainderman or any collateral held
by the Beneficiaries at any time or in any particular order; (g) rights to the
endorsement, assertion or exercise by the Beneficiaries or the Lender of any
right, power, privilege or remedy conferred herein or in any Operative Document
or otherwise; (h) requirements of promptness or diligence on the part of the
Beneficiary or Lender; (i) any renewal, extension or continuation of Borrower's
or Remainderman's rights under the Operative Documents or any notices of the
sale, transfer or other disposition of any right, title to or interest in the
Mortgaged Properties or any Operative Document; (j) rights and defenses arising
out of an election of remedies by the Beneficiaries or Lender, even though that
election of remedies has destroyed Guarantors' rights of subrogation and
reimbursement against Borrower by operation of law or otherwise; (k) other
circumstances whatsoever (except the defenses of prior payment or prior
performance by any Guarantor of the Obligations) which might otherwise
constitute a legal or equitable discharge, release or defense of a guarantor or
surety, or which might otherwise limit recourse against any Guarantor; or (l)
the right to interpose any defense (except defense of prior payment or prior
performance) set off or counterclaim of any nature or description in any action
or proceeding. No failure to exercise and no delay in exercising, on the part of
any Beneficiary or Lender, any right, power or privilege hereunder or under the
Beneficiary Guaranties shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or privilege preclude any other or
further exercise thereof, or the exercise of any other power or right. The
rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 2.6 SECTION 2.6 [Intentionally Omitted]
SECTION 2.7 Reinstatement. This Guaranty shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, in whole or in
part, of any of the Obligations paid by any Guarantor (i) is rescinded or must
otherwise be restored or returned by the Beneficiary upon the bankruptcy,
insolvency, reorganization, arrangement, adjustment, composition, dissolution,
liquidation, or the like, of Borrower, Remainderman, Equity, JV or any
Guarantor, or as a result of, the appointment of a custodian, receiver, trustee
or other officer with similar powers with respect to Borrower, Remainderman,
Equity, JV or any Guarantor or any substantial part of either Person's
respective property, or otherwise, or (ii) is returned to any Guarantor by
reason of a decree, moratorium or other sovereign act of any governmental
authority, in each case, all as though such payment had not been made
notwithstanding any termination of this Guaranty or any Operative Document.
7
ARTICLE III
SECTION 3.1 Representations and Warranties of Guarantor. Each Guarantor
hereby represents and warrants to the Beneficiary as of the Closing Date that:
(a) Benefit. Such Guarantor is the owner of a direct or indirect interest
in Borrower and has received or will receive, direct or indirect benefit from
the acquisition by JV of its interests in Equity.
(b) Authorizations. All acts, conditions, authorizations and other things
required to be done, fulfilled and performed by such Guarantor in order:
(i) to enable such Guarantor lawfully to enter into, exercise such
Guarantor's rights under and perform and comply with the
obligations expressed to be assumed by such Guarantor in this
Guaranty; and
(ii) to ensure that the obligations expressed to be assumed by such
Guarantor in this Guaranty are legal, valid and binding and
enforceable against such Guarantor in accordance with the
respective terms thereof; have been done, fulfilled and
performed and are in full force and effect.
(c) Legal Validity. This Guaranty has been duly executed and delivered by
such Guarantor. The obligations expressed to be assumed by such Guarantor in
this Guaranty are legal and valid obligations binding on it and enforceable in
accordance with the terms of this Guaranty except as such enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting creditors
generally and by general equitable principles. This Guaranty is in full force
and effect as of the date of acquisition by JV of its interest in Equity, not
subject to any right of rescission, setoff, counterclaim or defense by such
Guarantor nor will the operation of any of the terms of the Guaranty or the
exercise of any right thereunder, render this Guaranty unenforceable against
such Guarantor, in whole or in part, or subject to any right of rescission,
setoff, counterclaim or defense by such Guarantor and such Guarantor has not
asserted any right of rescission, setoff, counterclaim or defense with respect
thereto.
(d) Litigation. No action, suit, arbitration, governmental investigation,
or administrative proceeding of or before any court, tribunal, agency or other
governmental authority, is current, pending or to be the best of such
Guarantor's knowledge and belief threatened which might, if adversely
determined, (i) have a material adverse affect on such Guarantor's business, or
financial condition or its ability to perform its obligations hereunder or (ii)
restrain such Guarantor from entering into, exercising any of its rights under
or performing, enforcing or complying with any of its obligations hereunder.
(e) Non-conflict. The execution, delivery and performance of this Guaranty
will not constitute to the best of such Guarantor's knowledge any breach of, or
default under, any contractual, governmental or public obligation binding upon
such Guarantor.
8
(f) Consents. Such Guarantor is not required to obtain any consent,
permit, license, approval, order or authorization from, or to file any
declaration or statement with, any governmental authority or any waiver of any
right of any Person, in connection with or as a condition to the execution,
delivery or performance of or as a condition to the validity of this Guaranty.
(g) Consent to Jurisdiction, Admissibility, etc. Such Guarantor has
properly consented to the jurisdiction of the state and federal courts located
within the County of New York, State of New York. Such Guarantor has also
properly consented to service of process of writs, summons and other legal
process as provided herein, which consent to service of process will be
effective against such Guarantor and the choice of law provision of Section 5.11
hereof that provides that this Guaranty is governed by the laws of the State of
New York is valid.
(h) Bankruptcy. There are no bankruptcy or insolvency proceedings pending
or threatened against such Guarantor.
ARTICLE IV
Covenants
SECTION 4.1 Affirmative Covenants. Each Guarantor hereby covenants, for
the benefit of the Beneficiaries, (a) to preserve and keep in full force and
effect its existence; and (b) obtain, comply with the terms of and do all that
is necessary to maintain in full force and effect all authorizations, approvals,
licenses and consents required in or by the laws and regulations of its
jurisdiction of incorporation to enable it lawfully to enter into and perform
its obligations under this Guaranty or to ensure the legality, validity,
enforceability or admissibility in evidence in its jurisdiction of formation of
this Guaranty. At such time as the assets of Shelbourne Properties I, Inc.,
Shelbourne Properties II, Inc. and Shelbourne Properties III, Inc. are conveyed
to one or more liquidating trusts, such trusts shall assume the obligations of
the Guarantors hereunder and Xxxxxxx Xxxxxx and Xxxxxxx Xxxx (collectively, the
"Shelbourne Principals") shall execute and deliver a several guaranty similar to
this Guaranty but modified to limit the Trigger Events and the matters described
in clauses (i) through (vi) of Section 2.1(b) in each case to matters that such
Shelbourne Principal votes in favor of, initiates or colludes to effect
(including, without limitation, by the vote of stock or other equity interests
owned or controlled, directly or indirectly, by them or as a director or
trustee), all pursuant to documentation reasonably acceptable to Beneficiaries.
The Shelbourne Principals have executed this Guaranty for the purpose of
agreeing to the foregoing sentence.
ARTICLE V
Miscellaneous
SECTION 5.1 No Waiver; Cumulative Remedies. The failure or delay of any
Beneficiary in exercising any right or remedy granted it hereunder shall not
operate as a waiver of such right or remedy or be construed to be a waiver of
any breach of any of the terms and conditions hereof or to be an acquiescence
therein. Each and every right, power and remedy herein specifically given to the
Beneficiaries shall be cumulative and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at law,
in equity or by statute and the exercise or the beginning of the exercise of any
right, power or remedy shall not be construed as a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy. A
waiver by the Beneficiaries of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy that the Beneficiaries
would otherwise have.
9
SECTION 5.2 Notices. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications required
or permitted by the terms hereof shall be in writing and shall be effective if
hand delivered, sent by certified or registered, United States mail, postage
prepaid, return receipt requested, or expedited prepaid delivery service, either
commercial or United States Postal Service, with proof of attempted delivery, at
the applicable address listed below or by facsimile to the applicable facsimile
number listed below:
If to any Guarantor:
c/o Shelbourne Properties
0 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxxx 00000
FAX: 000-000-0000
If to any Beneficiary:
c/o U.S. Realty Advisors
1370 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
FAX: 000-000-0000
Such address or facsimile numbers may be changed by any party by a written
notice to the other parties hereto in the manner provided for in this Section. A
notice shall be deemed to have been given when received or upon refusal to
accept.
SECTION 5.3 Amendments and Waivers; Successors and Assigns. (a) Neither
this Guaranty nor any of the terms hereof may be terminated, amended,
supplemented, waived or modified orally, but only by an instrument in writing
signed by Guarantors and the Beneficiaries.
(b) This Guaranty shall be binding upon Guarantors and their respective
successors and permitted assigns and shall inure to the benefit of the
Beneficiaries and their respective successors and assigns.
SECTION 5.4 Severability. Any provision of or obligation under this
Guaranty that is determined by competent authority to be prohibited and
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision or obligation in any other
jurisdiction. To the extent permitted by applicable laws and regulations, each
Guarantor hereby waives any provision of law that renders any provision or
obligation hereof prohibited or unenforceable in any respect.
SECTION 5.5 Termination. Except as may be otherwise expressly provided in
this Guaranty, subject to the provisions of Sections 2.1(d) and 2.7 hereof, this
Guaranty and each Guarantor's duties and obligations hereunder shall remain in
full force and effect and be binding in accordance with its terms, until the
later of (i) the date on which all obligations of each Guarantor hereunder shall
have been satisfied by indefeasible payment and performance in full and (ii) the
date on which the Beneficiary Guaranties have been indefeasibly terminated,
discharged and released in full.
10
SECTION 5.6 Entire Agreement. This Guaranty constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral between or among Guarantors and the Beneficiary with respect to the
subject matter hereof.
SECTION 5.7 Article Headings. The headings of the various Articles and
Sections of this Guaranty are for convenience of reference only and shall not
modify, define, expand or limit any of the terms of provisions hereof.
SECTION 5.8 Jurisdiction; Agent for Service of Process. Any suit, action
or proceeding, whether at law or in equity, including any declaratory judgment
or similar suit or action, instituted by or against Guarantors arising out of or
relating in any way to this Guaranty may be brought and enforced in the courts
of the State of New York or of the United States for the Southern District of
New York, and each Guarantor irrevocably consents and submits to the exclusive
jurisdiction of such courts in respect of any suit, action or proceeding and
each Guarantor hereby irrevocably agrees that all claims against it in respect
of such action or proceeding against such Guarantor may be heard and determined
in such courts. Each Guarantor further irrevocably consents to the service of
process in any such suit, action or proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, return receipt requested, to
such Guarantor or to its agent at its address as set forth in Section 5.2 or as
set forth below, respectively. The foregoing shall not limit the right of the
Beneficiary to serve process in any other manner permitted by law or to bring
any action or proceeding, or to obtain execution of any judgment, in any other
jurisdiction.
SECTION 5.9 Waiver of Venue. Each Guarantor hereby irrevocably waives any
option or objection that it may now or hereafter have to the laying of venue of
any such action or proceeding arising under or relating to this Guaranty in any
court located in the country of New York, State of New York, and hereby further
irrevocably waives any claim that a court located in the County of New York,
State of New York is not a convenient forum for any such action or proceeding.
Each Guarantor agrees that, to the fullest extent permitted by applicable laws
and regulations, a final, non- appealable judgment in any such action or
proceeding obtained in any court described in Section 5.8 shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.
SECTION 5.10 WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS GUARANTY.
SECTION 5.11 GOVERNING LAW. THIS GUARANTY SHALL IN ALL RESPECTS BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING
ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES.
11
SECTION 5.12 Subrogation. Until the Indebtedness has been satisfied in
full and during the continuation of this Guaranty, none of Guarantors shall, by
virtue of any payment made, security realized or moneys received for or on
account of the Obligations:
(a) be subrogated to any rights, security or moneys held, received or
receivable by the Beneficiary or be entitled to any right of contribution or
indemnity;
(b) demand, accept, assign, charge or otherwise dispute of any moneys,
obligations or liabilities now or hereafter due or owing to any Guarantor from
Borrower or Remainderman or take any step to enforce any right against Borrower
or Remainderman;
(c) claim or rank as creditor against the estate or in the bankruptcy or
liquidation of Borrower or Remainderman;
(d) receive, claim or have the benefit of any payment, distribution or
security from or on account of Borrower or Remainderman or exercise any right of
set-off or counterclaim as against Borrower or Remainderman or any other person
or claim the benefit of the security or moneys held by or for the account of the
Beneficiaries; or
(e) claim or endorse any right of contribution, indemnification or other
form of reimbursement against Borrower, Remainderman or any Partner in respect
of the Obligations.
Each Guarantor shall forthwith pay to the Beneficiaries (up to the amount
of the Obligations then due to the Beneficiaries) an amount equal to any amount
recovered from the exercise of any right referred to above and shall forthwith
pay or transfer, as the case may be, to and pending such payment or transfer
shall hold in trust for the Beneficiaries any of such payment or distribution or
benefit of security in fact received by it.
SECTION 5.13 Survival. All warranties, representations and covenants made
by Guarantors herein or in any certificate or other instrument delivered by it
under this Guaranty shall be considered to have been relied upon by the
Beneficiaries and shall survive the execution and delivery of this Guaranty,
regardless of any investigation made by the Beneficiaries. All statements in any
such certificate or other instrument shall constitute warranties and
representations by Guarantors hereunder.
SECTION 5.14 Counterparts. This Guaranty may be executed simultaneously in
two or more counterparts each of which shall be deemed an original, and it shall
not be necessary in making proof of this Guaranty to produce or account for more
than one such counterpart. hereunder.
SECTION 5.15 Cooperation. Upon request of any Beneficiary, each Guarantor
shall deliver to Beneficiaries a reaffirmation of each such Guarantor's
obligations under this Guaranty as of the date of such reaffirmation.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
12
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed
as of the day and year first set forth above.
SHELBOURNE PROPERTIES I, INC.
By:
----------------------------------
SHELBOURNE PROPERTIES II, INC.
By:
----------------------------------
SHELBOURNE PROPERTIES III, INC.
By:
----------------------------------
13
The undersigned are executing this Guaranty for the purpose of agreeing to the
provisions contained in the penultimate sentence of Section 4.1 hereof.
-----------------------------
Xxxxxxx Xxxxxx
-----------------------------
Xxxxxxx Xxxx
14
