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Exhibit 2.3
PARTNERSHIP SERVICES AGREEMENT
This Partnership Services Agreement (this "Agreement") is made and entered
into as of , 1996 by and among Doubletree Corporation, a Delaware
corporation ("Parent"), Red Lion Hotels, Inc., a Delaware corporation ("RLI")
and Red Lion, a California Limited Partnership (the "Partnership") and the
undersigned affiliates of the Partnership (the "Affiliates" and together with
the Partnership, "Partnership Group").
RECITALS
WHEREAS, pursuant to a Contribution Agreement dated August 1, 1995 between
the Partnership and RLI, the Partnership retained certain interests in the
hotels described in Exhibit A hereto (the "Retained Hotels");
WHEREAS, pursuant to the RLH Partnership, L.P. Contribution Agreement dated
August 1, 1995 between the Partnership and RLH Partnership, L.P., a Delaware
limited partnership ("Newpart"), the Partnership transferred to Newpart certain
interests in the Retained Hotels;
WHEREAS, pursuant to the Lease dated August 1, 1995 between Newpart and RLI
(the "Master Lease"), Newpart has leased the Retained Hotels to RLI;
WHEREAS, RLI provides certain services to the Partnership Group with
respect to the Retained Hotels pursuant to that certain Service Agreement dated
August 1, 1995 (the "Service Agreement");
WHEREAS, the Partnership Group has guarantied performance and payment of
certain obligations of RLI to third parties set forth on Exhibit B hereto; and
WHEREAS, as a result of the merger of RLH Acquisition Corp., a wholly-owned
subsidiary of Parent ("Merger Sub") with and into RLI, effective as of the date
hereof, the parties to the Service Agreement now desire to terminate the Service
Agreement and replace it with this Agreement.
AGREEMENT
NOW, THEREFORE, in acknowledgement of the foregoing recitals and in
consideration of the mutual agreements expressed herein and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree as follows.
1. Termination of Services Agreement. RLI and the Partnership Group agree
to terminate the Service Agreement effective as of the date hereof, without
affecting RLI's right to be paid all sums due and owing under the Service
Agreement prior to the date hereof, all of which shall be paid promptly after
the date hereof. Notwithstanding the fact that the Service Agreement provides
for quarterly payouts of the fee due thereunder, for purposes of calculating the
amount due to RLI pursuant to this Section 1, if the Service Agreement is
terminated on any day other than the last day of the quarter, then that portion
of the fee that would be due for such quarter shall be prorated based on the
number of days that have lapsed in such quarter prior to the date of the
termination of the Service Agreement.
2. Support Services.
The Partnership Group may request that Parent provide reasonable support
services, including, but not limited to, legal, accounting, financial or tax
services, and Parent agrees to provide such requested services at such times and
for such payments to Parent as the Partnership Group and Parent shall mutually
agree.
Parent shall, or shall cause RLI to, (i) make available to the Partnership,
RLI's agents and employees and its books, ledgers, files, reports, plans,
drawings and operating records of every kind maintained by RLI
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pertaining to its business ("books and records") (and the assistance of RLI's
employees responsible for such books and records) during regular business hours
and (ii) maintain and preserve all such books and records for a period of 9
years after the date hereof. Upon Parent's request, the Partnership shall
reimburse Parent for any extraordinary costs or expenses incurred by RLI or
Parent in connection with complying with this paragraph.
3. Indemnities and Guaranties of Parent.
(a) Parent agrees to indemnify and hold harmless the Partnership, Newpart,
and each of their respective partners and affiliates, and all of such person's
officers, directors, employees, shareholders and agents, and any of the
foregoing's successors and assigns (collectively, the "Indemnified Parties")
from and against all liabilities, costs, losses, claims, damages and expenses
("Damages") incurred in connection with, arising out of, or resulting from any
of the guaranties provided by any Indemnified Party for the benefit of RLI as
set forth on Exhibit B hereto.
(b) Parent agrees to guaranty the punctual payment and performance of any
and all liabilities and obligations of RLI and its subsidiaries owed to the
Indemnified Parties arising out of or related to (i) any contract, agreement,
instrument or document set forth on Section 3.17 of the Disclosure Schedule to
the Agreement and Plan of Merger dated September 12, 1996 by and among Parent,
RLI and Merger Sub, and (ii) RLI's business (the "Obligations"). Parent hereby
waives diligence, presentment, demand of payment, notice of dishonor or
nonpayment, protest and notice of protest of any such Obligation, suit or taking
other action by the Indemnified Parties against, and giving any notice of
default or other notice to, or making any demand on, RLI or its subsidiaries
with respect to the Obligations, except such rights to diligence, presentment,
demand of payment, notice of dishonor or nonpayment, protest and notice of
protest, notices and/or grace periods as are available to RLI or its
subsidiaries, as the case may be, in connection with any such Obligation.
Subject to this Section 3, Parent's guaranty is a guarantee of payment and not
of collection only, is a primary obligation and is an absolute, unconditional,
continuing and irrevocable guaranty of performance and payment. In determining
Parent's liability hereunder, Parent shall have the right to assert or take
advantage of any right or defense, and to assert any right to offset or claimed
offset related to such right or defense, in each case then available to RLI or
its subsidiaries, as the case may be, in connection with the Obligation that is
subject to such right or defense, provided that Parent may not assert any right
or defense of RLI or its subsidiaries, as the case may be, that may arise in
connection with any event set forth in the last sentence of this paragraph. To
the extent enforceable by law, Parent will not assert, plead or enforce against
the Indemnified Parties any defense of waiver, release, discharge or
disallowance in bankruptcy, anti-deficiency statute, or unenforceability which
may be available to Parent. The liability of Parent under this guaranty shall
not be affected or impaired by any voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all the assets,
marshalling of assets and liabilities, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of, or other similar event or proceeding affecting
RLI or any of its subsidiaries or any of their respective assets.
4. Management of Leased Properties.
Parent agrees not to, and agrees to cause RLI not to, take any action which
would result in the breach of Section 7.03 of the Credit Agreement among RLH
Partnership, L.P., various lending institutions and Credit Lyonnais New York
Branch as Administrative Agent dated as of July 31, 1995.
5. Non-Recourse.
Notwithstanding any provisions hereof, none of the obligations of the
Partnership or Newpart under or contemplated by this Agreement shall be an
obligation of any officer, director, stockholder, limited partner, general
partner or owner of the Partnership or Newpart or any of their respective
officers, directors, stockholders, limited partners, general partners or owners,
or successors or assigns. Any monetary liability of the Partnership or Newpart
under this Agreement shall be satisfied solely out of the assets of the
Partnership. Each of the Partnership and Newpart hereby irrevocably waives any
right it may have against any such officer, director, stockholder, general
partner, owner, successor or assign identified above as a result of the
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performance of the provisions under or contemplated by this Agreement. This
provision shall survive any termination of this Agreement.
6. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the parties.
7. Amendment.
This Agreement may be amended only by a written agreement signed by the
parties.
8. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Arizona.
9. Specific Performance.
RLI and Parent agree that monetary damages would not be adequate
compensation for any loss incurred by the Partnership Group by reason of a
breach of the provisions of this Agreement by RLI or Parent. Therefore,
Partnership Group shall be entitled to specific performance of tile provisions
of this Agreement and RLI and Parent each hereby waives the claim or defense
that there exists an adequate remedy at law to redress the nonperformance or
other breach of this Agreement.
10. Agreement to Perform Necessary Acts.
Each party agrees to perform any further acts and to execute and deliver
any documents that may be reasonably necessary to carry out the provisions of
this Agreement.
11. Invalid Provision.
The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions, and this Agreement shall be
construed in all respects as if the invalid or unenforceable provision were
omitted.
12. No Waiver of Breach.
No failure by the Partnership Group to insist upon the strict performance
of any covenant, agreement, term or provision of this Agreement, or to exercise
any right or remedy consequent upon a breach thereof, shall constitute a waiver
of any such breach or subsequent breach of such covenant, agreement, term or
provision. No waiver of any breach shall affect or alter this Agreement and this
Agreement shall remain in full force and effect.
13. Entire Agreement.
This instrument evidences the entire agreement of the parties with respect
to the matters covered herein, and supersedes all prior oral or written
agreements or other understandings, including the Service Agreement.
14. Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
"Parent" Doubletree Corporation, a Delaware corporation
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By:
Its:
"RLI" Red Lion Hotels, Inc. , a Delaware corporation
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By:
Its:
"Partnership" Red Lion, a California Limited Partnership
By: RLA-GP, Inc., a Delaware corporation
Its: General Partner
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By:
Its:
"Affiliate" Red Lion G.P., Inc., a Delaware corporation
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By:
Its:
"Affiliate" RLH Partnership, L.P., a Delaware limited
partnership
By: Red Lion G.P., Inc., a Delaware corporation
Its: General Partner
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By:
Its:
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EXHIBIT A: RETAINED HOTELS
Red Lion's Sacramento Inn
0000 Xxxxx Xxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Red Lion Hotel, Sonoma County
Xxx Xxx Xxxx Xxxxx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Red Lion Hotel
0000 Xxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Red Lion Inn
000 Xxxxxx Xxx Xxx
Xxxxxxx, Xxxxxxxx 00000
Red Lion Hotel, Boise Downtowner
0000 Xxxxxxxx
Xxxxx, Xxxxx 00000
Red Lion Inn
000 Xxxx Xxxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Red Lion Inn
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxx 00000
Red Lion Inn/North
0000 X.X. Xxxxx Xxxxxx
Xxxx, Xxxxxx 00000
Red Lion Inn
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxx Xxx, Xxxxxx 00000
Red Lion Inn
000 Xxxxxx Xxxx
Xxxxxx, Xxxxxx 00000
Red Lion Inn
000 Xxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxx 00000
Red Lion Inn
000 X.X. Xxx Xxxxxx
Xxxxxxxxx, Xxxxxx 00000
Red Lion Hotel Salt Lake
000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
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Red Lion Inn
000 Xxxxx Xxxxx
Xxxxx, Xxxxxxxxxx 00000
Red Lion Hotel, Seattle Airport
00000 Xxxxxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Red Lion Inn At The Quay
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Red Lion Inn
0000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
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EXHIBIT B: THIRD PARTY GUARANTEES
1. Unconditional Guarantee of Payment and Performance, dated as of August
1, 1995, by and between Red Lion, a California Limited Partnership and Xx Xxxxxx
Resort Hotel Limited Partnership.
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