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EXHIBIT 10.28
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ACQUISITION AGREEMENT
AMONG
SERVICO, INC.,
PRIME MOTOR INNS LIMITED PARTNERSHIP,
PRIME-AMERICAN REALTY CORP.,
AND
SERVICO ACQUISITION CORP.
DATED AS OF NOVEMBER 7, 1997
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TABLE OF CONTENTS
PAGE
ARTICLE I - ACQUISITION...................................................................................1
1.1 Purchase and Sale of the Limited Partnership Interest...................................1
1.2 Delivery................................................................................2
1.3 Closing.................................................................................2
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF SERVICO AND SAC............................................2
2.1 Organization, Standing and Power........................................................2
2.2 Legal, Valid and Binding Agreement......................................................2
2.3 No Violation or Conflict................................................................2
2.4 Governmental Consents...................................................................3
2.5 Brokers.................................................................................3
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF PRIME AND THE GENERAL
PARTNER..........................................................................................3
3.1 Organization, Standing and Power........................................................3
3.2 Legal, Valid and Binding Agreement......................................................3
3.3 Authority to do Business................................................................3
3.4 Certificate of Limited Partnership, Limited Partnership Agreement
and Records.............................................................................4
3.5 Subsidiaries............................................................................4
3.6 No Violation or Conflict................................................................4
3.7 Governmental Consents...................................................................4
3.8 Exchange Act Reports; Financial Statements..............................................5
3.9 Compliance with Laws....................................................................5
3.10 Legal Proceedings.......................................................................6
3.11 Brokers.................................................................................6
3.12 Absence of Material Adverse Changes.....................................................6
3.13 Capitalization..........................................................................7
3.14 Rights, Warrants, Options...............................................................7
3.15 Title to Personal Property and Condition of Assets......................................7
3.16 Real Property...........................................................................7
3.17 Intangible Property.....................................................................8
3.18 Governmental Authorizations.............................................................9
3.19 Insurance...............................................................................9
3.20 Employment Matters......................................................................9
3.21 Material Agreements....................................................................10
3.22 Related Party Transactions.............................................................11
3.23 Tax Matters............................................................................11
3.24 Disclosure.............................................................................12
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ARTICLE IV - COVENANTS...................................................................................12
4.1 Interim Operations of AMI..............................................................12
4.2 Access.................................................................................13
4.3 Schedules..............................................................................14
4.4 Consents...............................................................................14
4.5 Reasonable Efforts.....................................................................14
4.6 Notification...........................................................................14
4.7 No Solicitation........................................................................15
4.8 Confidentiality........................................................................15
4.9 Publicity..............................................................................15
4.10 Proxy Statement........................................................................16
4.11 Special Meeting........................................................................16
4.12 Dissolution of Prime...................................................................16
ARTICLE V- ADDITIONAL AGREEMENTS.........................................................................17
5.1 Survival of the Representations, Warranties, Covenants and Agreements..................17
5.2 Investigation..........................................................................17
5.3 Indemnification........................................................................17
ARTICLE VI - CONDITIONS PRECEDENT........................................................................18
6.1 Mutual Conditions Precedent............................................................18
6.2 Conditions Precedent to the Obligations of Servico.....................................18
6.3 Conditions Precedent to the Obligations of Prime.......................................19
6.4 Termination............................................................................20
ARTICLE VII - MISCELLANEOUS..............................................................................21
7.1 Further Assurances.....................................................................21
7.2 Notices................................................................................21
7.3 Entire Agreement.......................................................................21
7.4 Assignment.............................................................................22
7.5 Waiver.................................................................................22
7.6 No Third Party Beneficiary.............................................................22
7.7 Severability...........................................................................22
7.8 Fees and Expenses......................................................................22
7.9 Section Headings.......................................................................23
7.10 Counterparts...........................................................................24
7.11 Time of Essence........................................................................24
7.12 Litigation; Prevailing Party...........................................................24
7.13 Remedies Cumulative....................................................................24
7.14 Injunctive Relief......................................................................24
7.15 Governing Law..........................................................................24
7.16 Certain Definitions....................................................................24
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GLOSSARY OF DEFINED TERMS
DEFINED TERM SECTION DEFINED TERM SECTION
------------ ------- ------------ -------
affiliate.......................................ss.7.17(a) Limited Partnership Agreement....................ss.3.4
Agreement.......................................Preamble Limited Partnership Interests....................Preamble
AMI.............................................Preamble multiemployer plan...............................ss.3.20(d)
AMI Material Agreements.........................ss.3.21 NYSE.............................................ss.2.4
business day...................................ss.7.17(b) partnership interests............................ss.7.17(e)
Closing.........................................ss.1.3 Permitted Exceptions.............................ss.3.16
Code............................................ss.4.20 Personal Property................................ss.3.15
Competing Transaction...........................ss.7.8(d) person...........................................ss.7.17(f)
employee pension benefit plan...................ss.3.20(d) Prime............................................Preamble
employee welfare benefit plan...................ss.3.20(d) Prime Financial Statements.......................ss.3.8(b)
End Date........................................ss.6.4(c) Prime Hospitality................................ss.3.14
Environmental Law...............................ss.3.9(b) Prime Indemnified Party..........................ss.5.3(a)
Environmental Permit............................ss.3.9(b) Prime Material Adverse Effect....................ss.7.17(g)
ERISA...........................................ss.4.20(d) Prime Pension Plan...............................ss.4.20(d)
Exchange Act....................................ss.2.4 Prime Plans......................................ss.3.20(d)
Xxxxxx Xxxx.....................................ss.3.11 Prime Related Parties............................ss.3.22
Governmental Entity.............................ss.2.4 Prime Related Party..............................ss.3.22
General Partner.................................Preamble Prime SEC Reports................................ss.3.8(a)
General Partner Prime Special Meeting............................ss.4.10(a)
Purchase Agreement............................ss.6.1(d) Prime Welfare Plan...............................ss.3.20(d)
GP Interest.....................................Preamble Proxy Statement..................................ss.4.10(a)
group health plan...............................ss.3.20 Real Property....................................ss.3.16
Improvements....................................ss.3.16 SAC..............................................Preamble
knowledge.......................................ss.7.17(c) SEC..............................................ss.3.8
Law.............................................ss.7.17(d) Securities Act...................................ss.3.13
Licenses........................................ss.3.18 Servico..........................................Preamble
Liens...........................................ss.1.1 subsidiaries.....................................ss.7.17(h)
Limited Partners................................Preamble subsidiary.......................................ss.7.17(h)
Tax..............................................ss.7.17(i)
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ACQUISITION AGREEMENT
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THIS ACQUISITION AGREEMENT (the "Agreement") is made and entered into
as of the 7th day of November, 1997, by and among SERVICO, INC., a Florida
corporation ("Servico"), SERVICO ACQUISITION CORP., a Florida corporation and a
wholly-owned subsidiary of Servico ("SAC"), PRIME MOTOR INNS LIMITED
PARTNERSHIP, a Delaware limited partnership ("Prime") and PRIME-AMERICAN REALTY
CORP., a Delaware corporation (the "General Partner").
W I T N E S S E T H:
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WHEREAS, Prime owns a 99% limited partnership interest (the "Limited
Partnership Interest") in AMI Operating Partners, L.P., a Delaware limited
partnership ("AMI");
WHEREAS, the General Partner owns a 1% general partnership interest
(the "GP Interest") in AMI, which, together with the Limited Partnership
Interest, constitutes 100% of all partnership interests in AMI;
WHEREAS, the General Partner is the sole general partner of each of
Prime and AMI;
WHEREAS, the board of directors of the General Partner has determined
that it is in the best interests of Prime and its limited partners (the "Limited
Partners") that Prime sell, assign and transfer to SAC the Limited Partnership
Interest on the terms set forth herein; and
WHEREAS, the board of directors of the General Partner has approved
this Agreement and agreed to recommend that the Limited Partners vote to approve
this Agreement and the transactions set forth herein as contemplated by this
Agreement;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
ACQUISITION
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1.1 PURCHASE AND SALE OF THE LIMITED PARTNERSHIP INTEREST. Subject to
the terms and conditions set forth herein, at the Closing, Prime shall sell,
assign and transfer to SAC and SAC shall purchase and acquire from Prime, the
Limited Partnership Interest free and clear of any and all claims, liens,
charges, security interests, pledges or encumbrances of any nature whatsoever
(whether absolute, accrued contingent or otherwise) ("Liens"). At the Closing,
SAC shall, subject to the terms and conditions set forth herein, and in
consideration of the sale, assignment and transfer of the Limited Partnership
Interest as set forth herein, pay to Prime, the sum of Eight Million Dollars
($8,000,000) (the "Purchase Price"), by wire transfer of immediately available
funds to such account
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as Prime shall designate and make the indemnifications and undertakings provided
herein to survive the Closing.
1.2 DELIVERY. The sale, assignment and transfer of the Limited
Partnership Interest at the Closing shall be effected by (i) the delivery to SAC
(in addition to any other deliveries required under this Agreement ) of an
instrument of transfer, duly executed on behalf of Prime, sufficient to transfer
such Limited Partnership Interest to SAC, free and clear of all Liens and (ii)
the execution and delivery by Prime or the General Partner of such other
documents necessary to admit SAC as a substitute limited partner of AMI, having
all the rights of a limited partner under the Delaware Revised Uniform Limited
Partnership Act and the Limited Partnership Agreement of AMI with respect to the
Limited Partnership Interest.
1.3 CLOSING. Unless this Agreement shall have been terminated pursuant
to Section 6.4, the consummation of the transactions contemplated by this
Agreement shall take place as promptly as practicable (and in any event within
three business days) after satisfaction or waiver of the conditions set forth in
Article VI, at a closing (the "Closing") to be held at the offices of Xxxxxxx
Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxx & Xxxxxxxxx, P.A., 000 Xxxx Xxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxx, Xxxxxxx, 00000, unless another date, time or place is agreed
to by Prime and Servico.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SERVICO AND SAC
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Servico and SAC hereby represent and warrant to Prime and the General
Partner as follows:
2.1 ORGANIZATION, STANDING AND POWER. Each of Servico and SAC has been
duly organized and is validly existing and in good standing under the laws of
the State of Florida and has all requisite right, power and authority to enter
into this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.
2.2 LEGAL, VALID AND BINDING AGREEMENT. The execution, delivery and
performance of this Agreement by Servico and SAC and the consummation by Servico
and SAC of the transactions contemplated hereby have been duly and effectively
authorized by all requisite corporate action and no other corporate proceedings
on the part of Servico or SAC are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Servico and SAC and, assuming the due authorization,
execution and delivery by the other parties hereto, constitutes the legal, valid
and binding obligations of Servico and SAC, enforceable against Servico and SAC
in accordance with its terms.
2.3 NO VIOLATION OR CONFLICT. Except as set forth on SCHEDULE 2.3, the
execution, delivery and performance of this Agreement by Servico and SAC and the
consummation by Servico and SAC of the transactions contemplated hereby do not
and will not (i) conflict with or violate any provision of the Articles of
Incorporation or Bylaws of Servico or SAC, (ii) assuming that all consents,
approvals, authorizations and permits described in Section 2.4 have been
obtained and all filings and notifications described in Section 2.4 have been
made, violate or conflict with any Law applicable to Servico or SAC or by which
any property or asset of Servico or SAC is bound or affected, and (iii) with or
without the passage of time or the giving of notice, result in the breach of, or
constitute a default under, cause the acceleration of performance under, permit
the unilateral modification or termination of, or require any consent under, or
result in the creation of any liens or other encumbrance upon any property or
assets of Servico or SAC pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other obligation,
except, with
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respect to clauses (ii) and (iii), for any such conflicts, violations, breaches,
defaults or other occurrences which would not, individually or in the aggregate,
prevent or materially delay the performance by Servico or SAC of its obligations
pursuant to this Agreement or the consummation of the transactions contemplated
hereby.
2.4 GOVERNMENTAL CONSENTS. The execution and delivery of this Agreement
by each of Servico and SAC does not, and the performance by each of Servico and
SAC of its obligations hereunder and the consummation of the transactions
contemplated hereby will not, require any consent, approval, authorization or
permit of, or filing by Servico or SAC with or notification by Servico or SAC
to, any United States federal, state or local or any foreign governmental,
regulatory or administrative authority, agency or commission or any court,
tribunal or arbitral body (a "Governmental Entity"), except (i) applicable
requirements of the Securities Exchange Act of 1934, as amended (together with
the rules and regulations promulgated thereunder, the "Exchange Act") and the
rules and regulations of the New York Stock Exchange (the "NYSE") and (ii) where
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not, individually or in the aggregate,
prevent or materially delay the performance by Servico or SAC of its obligations
pursuant to this Agreement and the consummation of the transactions contemplated
hereby.
2.5 BROKERS. Except as indicated on SCHEDULE 2.5, neither Servico nor
SAC has employed any financial advisor, broker or finder and has not incurred
and neither will, except as provided in Section 7.9, incur any broker's,
finder's, investment banking or similar fees, commissions or expenses to any
other party in connection with the transactions contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PRIME AND THE GENERAL PARTNER
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Prime and the General Partner hereby represent and warrant to Servico
and SAC as follows:
3.1 ORGANIZATION, STANDING AND POWER. Each of Prime, AMI and the
General Partner has been duly organized and is validly existing and in good
standing under the laws of the state of Delaware. Each of Prime and the General
Partner has all requisite right, power and authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.
3.2 LEGAL, VALID AND BINDING AGREEMENT. The execution, delivery and
performance of this Agreement by Prime and the General Partner and the
consummation by Prime and the General Partner of the transactions contemplated
hereby have been duly and effectively authorized by all requisite corporate or
partnership, as the case may be, action and no other corporate or partnership
proceedings on the part of Prime or the General Partner are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby
(other than the approval of this Agreement and the transactions contemplated
hereby by the holders of at least a majority of the units of limited partnership
interest of Prime ("Prime Units") at the Prime Special Meeting). This Agreement
has been duly executed and delivered by Prime and the General Partner and,
assuming the due authorization, execution and delivery by the other parties
hereto, constitutes the legal, valid and binding obligations of Prime and the
General Partner, enforceable against Prime and the General Partner in accordance
with its terms.
3.3 AUTHORITY TO DO BUSINESS. Except as provided on SCHEDULE 3.3, each
of Prime, the General Partner and AMI has all requisite power and authority and
all necessary governmental
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approvals to own, operate and lease its properties and assets and to conduct its
business as presently conducted. SCHEDULE 3.3 sets forth (i) those jurisdictions
in which Prime, the General Partner or AMI manages or operates facilities and/or
properties and (ii) all jurisdictions in which Prime, the General Partner or AMI
is qualified to do business. Except as provided on SCHEDULE 3.3, each of Prime,
the General Partner and AMI is duly qualified or licensed to do business and is
in good standing in all jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification or
license, except where the failure to be so qualified or licensed, individually
or in the aggregate, would not have a Prime Material Adverse Effect.
3.4 CERTIFICATE OF LIMITED PARTNERSHIP, LIMITED PARTNERSHIP AGREEMENT
AND RECORDS. Copies of the Amended and Restated Agreement of Limited Partnership
of Prime and the Agreement of Limited Partnership of AMI (each a "Limited
Partnership Agreement"), in each case as in effect on the date hereof, have been
delivered to Servico and are complete and correct as of the date hereof.
3.5 SUBSIDIARIES. Except for Prime's ownership of AMI, neither Prime
nor AMI has any equity investment in any other corporation, limited liability
company, association, partnership, joint venture or other entity.
3.6 NO VIOLATION OR CONFLICT. Except as set forth on SCHEDULE 3.6, the
execution, delivery and performance of this Agreement by Prime and the General
Partner and the consummation by Prime and the General Partner of the
transactions contemplated hereby do not and will not (i) conflict with or
violate any provision of the Certificate of Limited Partnership or Limited
Partnership Agreement of Prime or AMI or the Certificate of Incorporation or
Bylaws of the General Partner, (ii) assuming that all consents, approvals,
authorizations and permits described in Section 3.7 have been obtained and all
filings and notifications described in Section 3.7 have been made, violate or
conflict with any Law applicable to Prime, the General Partner or AMI or by
which any property or asset of Prime, the General Partner or AMI is bound or
affected, and (iii) with or without the passage of time or the giving of notice,
result in the breach of, or constitute a default under, cause the acceleration
of performance under, permit the unilateral modification or termination of, or
require any consent under, or result in the creation of any liens or other
encumbrance upon any property or assets of Prime or AMI pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other obligation, except, with respect to clauses (ii) and (iii),
for any such conflicts, violations, breaches, defaults or other occurrences
which would not, individually or in the aggregate, (A) have a Prime Material
Adverse Effect nor (B) prevent or materially delay the performance by Prime or
the General Partner of its obligations pursuant to this Agreement or the
consummation of the transactions contemplated hereby.
3.7 GOVERNMENTAL CONSENTS. Except as provided on SCHEDULE 3.7, the
execution and delivery of this Agreement by each of Prime and the General
Partner does not, and the performance by each of Prime and the General Partner
of its obligations hereunder and the consummation of the transactions
contemplated hereby will not, require any consent, approval, authorization or
permit of, or filing by Prime with or notification by Prime or the General
Partner to, any Governmental Entity, except (i) applicable requirements of the
Exchange Act and (ii) where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not,
individually or in the aggregate, (A) prevent or materially delay the
performance by Prime or the General Partner of its obligations pursuant to this
Agreement and the consummation of the transactions contemplated hereby or (B)
have a Prime Material Adverse Effect.
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3.8 EXCHANGE ACT REPORTS; FINANCIAL STATEMENTS.
(a) Since January 1, 1995, Prime has timely filed all reports
and other documents required to be filed by it with the Securities and Exchange
Commission (the "SEC") under the Exchange Act, including but not limited to
proxy statements and reports on Form 10-K, Form 10-Q and Form 8-K (collectively,
the "Prime SEC Reports"). As of the respective dates they were filed with the
SEC, the Prime SEC Reports, including all documents incorporated by reference
into such reports, complied in all material respects with the rules and
regulations of the SEC and did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(b) The consolidated financial statements (the "Prime
Financial Statements") of Prime included in the Prime SEC Reports, as of the
dates thereof and for the periods covered thereby, present fairly, in all
material respects, the financial position, results of operations, and cash flows
of Prime and AMI on a consolidated basis (subject, in the case of unaudited
statements, to normal recurring year-end audit adjustments which were not and
are not expected, individually or in the aggregate, to have a Prime Material
Adverse Effect). Any supporting schedules included in the Prime SEC Reports
present fairly, in all material respects, the information required to be stated
therein. Such Prime Financial Statements and supporting schedules were prepared:
(A) in accordance with Regulation S-X promulgated by the SEC; and (B) except as
otherwise noted in the Prime SEC Reports, in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis. Other than as
disclosed by the Prime Financial Statements included in the Prime SEC Reports or
on SCHEDULE 3.8 hereto, none of Prime, the General Partner or AMI has any
liabilities, commitments or obligations of any nature whatsoever, whether
accrued, contingent or otherwise that would be required to be reflected on, or
reserved against in, a balance sheet or in notes thereto prepared in accordance
with GAAP, other than liabilities, commitments or obligations incurred since
December 31, 1996 in the ordinary course of business that would not,
individually or in the aggregate, have a Prime Material Adverse Effect. Except
as set forth on SCHEDULE 3.8 and except for the Limited Partnership Interest,
Prime has no assets of any nature whatsoever, and Prime has no liabilities
(whether accrued, contingent or otherwise), of any nature whatsoever, except as
specifically set forth in the Prime Financial Statements and specifically
designated therein as a liability of Prime and not of AMI.
3.9 COMPLIANCE WITH LAWS.
(a) Except as set forth on SCHEDULE 3.9, each of Prime, the
General Partner and AMI is in compliance with all federal, state, local and
foreign laws, ordinances, regulations, judgments, rulings, orders and other
legal requirements applicable to it, its operations or its properties,
including, without limitation, those relating to employment, building, zoning,
safety and health, and environmental matters, except where the failure to so
comply, individually or in the aggregate, would not have a Prime Material
Adverse Effect. Except as set forth on SCHEDULE 3.9 or as could not reasonably
be expected to have a Prime Material Adverse Effect, neither Prime, the General
Partner nor AMI has received written notification from any Governmental Entity
asserting that it may not be in compliance with, or may have violated, any of
the Laws which said Governmental Entity enforces, or threatening to revoke any
authorization, consent, approval, franchise, license or permit, and neither
Prime, the General Partner nor AMI is subject to any agreement or consent decree
with any Governmental Entity arising out of previously asserted violations.
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(b) Without limiting the generality of Section 3.9(a), except
as set forth on SCHEDULE 3.9 or in the Prime SEC Reports, or as would not,
individually or in the aggregate, have a Prime Material Adverse Effect: (i)
Prime, the General Partner and AMI are, to the best of their knowledge, in
compliance with all applicable Environmental Laws. All past noncompliance of
Prime or AMI with Environmental Laws or Environmental Permits has been resolved
without any pending, ongoing or future obligation, cost or liability; and (ii)
neither Prime, the General Partner nor AMI has, to the best of their knowledge,
released a Hazardous Material at, or transported a Hazardous Material to or
from, any real property currently or formerly owned, leased or occupied by Prime
or AMI in violation of any Environmental Law.
For purposes of this Agreement: "ENVIRONMENTAL LAW" means any federal,
state or local statute, law, ordinance, regulation, rule, code or order of the
United States or any other jurisdiction and any enforceable judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to pollution or protection of the
environmental or natural resources, including, without limitation, those
relating to the use, handling, transportation, treatment, storage, disposal,
release or discharge of Hazardous Material, as in effect as of the date of this
Agreement. "ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under or issued pursuant to any
applicable Environmental Law. "HAZARDOUS MATERIAL" means (i) any petroleum,
petroleum products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls or (ii) any chemical,
material or substance defined or regulated as toxic or hazardous or as a
pollutant or contaminant or waste under any applicable Environmental Law.
3.10 LEGAL PROCEEDINGS. Except as set forth on SCHEDULE 3.10 or in the
Prime SEC Reports, neither Prime, the General Partner nor AMI is, nor during the
past three years has been, a party to any pending or, to the knowledge of Prime,
threatened, legal, administrative or other proceeding, arbitration or
investigation, that is or could have been reasonably expected to, individually
or in the aggregate, result in a Prime Material Adverse Effect. Except as set
forth on SCHEDULE 3.10, Prime has no knowledge of any set of facts which could
reasonably be expected to result in any such legal, administrative or other
proceeding, arbitration or investigation involving Prime, the General Partner or
AMI. Except as set forth on SCHEDULE 3.10, neither Prime, the General Partner
nor AMI is subject to any order, writ, injunction, decree, judgment,
stipulation, determination or award entered by or with any Governmental Entity
which could, individually or in the aggregate, reasonably be expected to have a
Prime Material Adverse Effect.
3.11 BROKERS. Except for Xxxxxx Xxxx Incorporated ("Xxxxxx Xxxx"), who
is acting as financial advisor to the General Partner and will be entitled to a
fee of up to $350,000 and expenses in compensation therefor, neither Prime, the
General Partner nor AMI has employed any financial advisor, broker or finder and
has not incurred and none will incur any broker's, finder's, investment banking
or similar fees, commissions or expenses to any other party in connection with
the transactions contemplated by this Agreement.
3.12 ABSENCE OF MATERIAL ADVERSE CHANGES. Except as set forth on
SCHEDULE 3.12 or in the Prime SEC Reports, since December 31, 1996: (i) each of
Prime, the General Partner and AMI has conducted its business only in the
ordinary and usual course and in a manner consistent with past practices; (ii)
there has not been any Prime Material Adverse Effect, (iii) there has not been
any event that could reasonably be expected to prevent or materially delay the
performance of Prime's or the General Partner's obligations pursuant to this
Agreement and the consummation of the transactions contemplated hereby by Prime
or the General Partner; and (iv) neither Prime nor AMI has engaged or agreed to
engage in any of the actions described in Section 4.1 (except as otherwise
specifically permitted in Section 4.1). All proceeds from any sales of any
properties of AMI since December 31,
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1996 have been used solely to (a) pay costs and expenses of or related to such
sales, (b) pay prepayment penalties in connection with the repayment of AMI's
outstanding indebtedness to persons other than Prime Related Parties, (c) repay
such indebtedness or (d) fund renovations to AMI's existing properties.
3.13 CAPITALIZATION. The only partnership interests in AMI are the
Limited Partnership Interest and the GP Interest. The Limited Partnership
Interest has been duly authorized, is validly issued and outstanding, and is
fully paid. The Limited Partnership Interest is owned beneficially and of record
by Prime, free and clear of all Liens. No interests or securities issued by
Prime or AMI from the date of its organization to the date hereof were issued in
violation of any statutory or common law preemptive rights or the Securities Act
of 1933, as amended (the "Securities Act") or the rules and regulations of the
SEC thereunder, or any state securities or "blue sky" laws. There are no
distributions which have accrued or been declared but are unpaid on the
partnership interests of AMI. All Taxes required to be paid in connection with
the issuance by AMI of its partnership interests have been paid.
3.14 RIGHTS, WARRANTS, OPTIONS. There are no outstanding: (i)
securities or instruments convertible into or exercisable for any partnership
interests of AMI; (ii) options, warrants, subscriptions or other rights to
acquire partnership interests of AMI; (iii) debt securities with any voting
rights or convertible into securities with voting rights; or (iv) commitments,
agreements or understandings of any kind, including employee benefit
arrangements, relating to any partnership interests of AMI, or the issuance or
repurchase by Prime, the General Partner or AMI of any partnership interests of
AMI, any such securities or instruments convertible into or exchangeable for
partnership interests of AMI or any such options, warrants or rights. Neither
Prime Hospitality, Inc., a Delaware corporation ("Prime Hospitality") nor AMI
Management Corp., a subsidiary of Prime Hospitality, nor any of their
successors, assigns or affiliates have any right under the Limited Partnership
Agreement of Prime or otherwise to acquire the Limited Partnership Interest or
to receive notice of the transactions contemplated hereby.
3.15 TITLE TO PERSONAL PROPERTY AND CONDITION OF ASSETS. Except as set
forth on SCHEDULE 3.15, AMI is the legal and beneficial owner of each item of
personal property, tangible and intangible, as reflected on the September 30,
1997 Prime Financial Statements and to each item of personal property, tangible
and intangible, acquired by or on behalf of AMI since September 30, 1997 (other
than non-material property disposed of in the ordinary course of business
consistent with past practice since September 30, 1997 to persons who are not
affiliates of Prime, the General Partner or AMI), free and clear of any Liens,
except as set forth on the September 30, 1997 Prime Financial Statements or in
SCHEDULE 3.15 hereto (all such personal property being hereinafter referred to
as the "Personal Property"). Except as set forth on SCHEDULE 3.15, all
equipment, machinery, fixtures and other Personal Property owned or utilized by
AMI are in good operating condition and in a good state of maintenance and
repair and are adequate for the conduct of their respective businesses. Except
for leasehold interests and other leased properties, and properties used under
license or franchise agreements, specifically identified in either SCHEDULE 3.15
or 3.16 hereto, there are no assets owned by any third party (including Prime
and the General Partner) which are used in the operations or the business of
AMI, as presently conducted or proposed to be conducted.
3.16 REAL PROPERTY. SCHEDULE 3.16 hereto sets forth a true and complete
list, with the legal description thereof, of all real property owned or leased
by AMI, together with a brief description of all structures, fixtures or
improvements ("Improvements") thereon (such real property and Improvements,
collectively, the "Real Property"). AMI owns good and marketable title to, or
holds a valid leasehold interest in, all of the Real Property, free and clear of
all Liens, mortgages, conditional sales agreements, restrictions, reservations,
covenants, encumbrances, charges, restraints
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on transfer, or any other title defect of any nature, other than liens for real
property taxes not yet due and other than those matters specifically disclosed
on SCHEDULE 3.16 or any title insurance policies or commitments provided to
Servico and listed on SCHEDULE 3.16, which matters, individually or in the
aggregate, do not materially adversely impair the marketability of the Real
Property as it is now used by AMI (the "Permitted Exceptions"). Except as
disclosed on SCHEDULE 3.16, all Improvements are in good structural condition,
free of any structural or other defect or impairment which impairs in any
material respect the value, utility, or life expectancy of such Improvements, or
which might otherwise adversely affect, in any material respect, the operation
thereof. Except as disclosed on SCHEDULE 3.16 or on any surveys delivered to
Servico, none of the Improvements encroach onto adjoining land or onto any
easements and there is no encroachment of Improvements from adjoining land onto
any of the Real Property. None of the Real Property is located in an area
identified by any Governmental Entity as having special flood or mud slide
hazards or wetlands. There are no soil or geological conditions which might
impair or adversely affect in any material respect the current use of any of the
Real Property. Except as set forth on SCHEDULE 3.16, neither the whole nor any
portion of the Real Property is being condemned or otherwise taken by any public
authority, nor is any such condemnation or taking, to the knowledge of Prime,
threatened or contemplated. No portion of any of the Real Property is affected
by any outstanding special assessments or impact fees imposed by any
Governmental Entity. Except for any Permitted Exceptions, no commitments
relating to the Real Property have been made to any Governmental Entity, utility
company, school board, church or other religious body or any homeowner or
homeowners association, merchant's association or any other organization, group
or individual which would impose an obligation upon Prime, the General Partner
or AMI or any of their successors or assigns to make any contribution or
dedication of money or land or to construct, install or maintain any
improvements of a public or private nature on or off the Real Property; and no
Governmental Entity has imposed any requirement that any owner of the Real
Property pay directly or indirectly any special fees or contributions or incur
any expenses or obligations in connection with the Real Property. The parking
facilities at each parcel of Real Property are adequate to comply with all Laws
and the conduct of business on the respective properties as presently conducted
or proposed to be conducted. Neither Prime nor the General Partner has any
information or knowledge of (a) any change contemplated in any Law, (b) any
judicial or administrative action, (c) any action by adjacent landowners, or (d)
any other fact or condition of any kind or character which could materially
adversely affect the current use or operation of the Real Property. Neither the
General Partner nor any of its affiliates owns or leases, directly or
indirectly, any property adjacent to the Real Property. Neither the air rights
over the Real Property nor any other "development rights" with respect to the
Real Property has been assigned, transferred, leased or encumbered.
3.17 INTANGIBLE PROPERTY. Except as set forth on SCHEDULE 3.17 or as
would not, individually or in the aggregate, have a Prime Material Adverse
Effect, AMI owns or possesses adequate licenses or other valid rights to use all
patents, patent rights, trademarks, trademark rights, trade names, trade dress,
trade name rights, copyrights, service marks, trade secrets, applications for
trademarks and for service marks, know-how and other proprietary rights and
information used or held for use in connection with its business as currently
conducted or proposed to be conducted , and neither Prime nor the General
Partner is aware of any assertion or claim challenging the validity of any of
the foregoing. The conduct of the respective businesses of Prime, the General
Partner and AMI as currently conducted does not conflict in any way with any
patent, patent right, license, trademark, trademark right, trade dress, trade
name, trade name right, service xxxx or copyright of any third party that,
individually or in the aggregate, would have a Prime Material Adverse Effect. To
the knowledge of Prime, there are no infringements of any proprietary rights
owned by or licensed by or to AMI that, individually or in the aggregate, would
have a Prime Material Adverse Effect.
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3.18 GOVERNMENTAL AUTHORIZATIONS. Except as set forth on SCHEDULE 3.18,
Prime, the General Partner and AMI have in full force and effect all
authorizations, consents, approvals, franchises, certificates, operating
authorities, licenses and permits required under applicable Law (collectively
referred to as "Licenses") for the ownership of Prime's, the General Partner's
and AMI's properties and operation of their businesses as presently operated,
except where the failure to have any such Licenses could not reasonably be
expected to have a Prime Material Adverse Effect. Except as set forth on
SCHEDULE 3.18, none of the transactions contemplated hereby could reasonably be
expected to have a material adverse effect on the status of any such License or
require Prime, the General Partner or AMI to obtain any additional License to
continue to operate their respective businesses as presently conducted.
3.19 INSURANCE. SCHEDULE 3.19 sets forth a list and description of all
insurance policies existing as of the date hereof providing insurance coverage
of any nature to Prime, the General Partner or AMI. All such policies are in
full force and effect, are valid and enforceable in accordance with their terms
and are sufficient for compliance with all Laws and all AMI Material Agreements.
3.20 EMPLOYMENT MATTERS.
(a) LABOR RELATIONS. Except as set forth on SCHEDULE 3.20(A),
the employees of Prime, the General Partner and AMI are not represented by any
labor union and are not subject to a collective bargaining agreement. Neither
Prime, the General Partner nor AMI have experienced any strike, work stoppage or
labor disturbance with any group of employees and to Prime's knowledge, no set
of facts exists which could reasonably be expected to lead to any of the
foregoing events.
(b) EMPLOYMENT AGREEMENTS. Except as set forth on SCHEDULE
3.20(B), there are no employment, consulting, severance or indemnification
arrangements, agreements, or to the knowledge of Prime, material understandings
between Prime, the General Partner or AMI and any officer, director, consultant
or employee. Except as set forth on SCHEDULE 3.20(B), the terms of employment or
engagement of all employees, agents, consultants and professional advisors of
Prime, the General Partner or AMI are such that their employment or engagement
may be terminated by not more than two weeks' notice given at any time without
liability for payment of compensation or damages.
(c) XXXXXXXXXX & XXXXXXX AGREEMENTS. Set forth as SCHEDULE
3.20(C) are true and correct copies of the agreements with Xxxxxxxxxx & Xxxxxxx,
Inc. for the management of AMI's properties and the administration of Prime.
(d) EMPLOYEE BENEFIT PLANS. Except as set forth on SCHEDULE
3.20(D), there are no pension, retirement, stock or equity purchase, stock or
equity bonus, stock or equity ownership, stock or equity option, profit sharing,
savings, medical, disability, hospitalization, insurance, deferred compensation,
bonus, incentive, welfare or any other employee benefit plan, policy, agreement,
commitment or arrangement maintained by or binding upon Prime, the General
Partner or AMI for any of their partners, directors, officers, consultants,
employees or former employees (the "Prime Plans"). SCHEDULE 3.20(D) also
identifies each Prime Plan which constitutes an "employee pension benefit plan"
("Prime Pension Plan") or an "employee welfare benefit plan" ("Prime Welfare
Plan"), as such terms are defined in the Employee Retirement Income Security Act
of 1974, as amended, and the rules and regulations promulgated thereunder
("ERISA"). None of the Prime Plans is a "multiemployer plan," as such term is
defined in ERISA, or is subject to Title IV of ERISA.
Each Prime Pension Plan has been determined to be qualified under
Section 401(a) of the Code, and each such Plan remains so qualified; and to
Prime's knowledge, no facts or circumstances
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exist which could result in the revocation of such qualification. Each Prime
Welfare Plan which is intended to meet the requirements for tax-favored
treatment under Subchapter B of Chapter 1 of the Code meets such requirements.
Each Prime Plan has been administered in all material respects in accordance
with its terms and the Code, and each Prime Pension Plan and Prime Welfare Plan
has been administered in all material respects in accordance with ERISA. The
assets of each Prime Plan are at least equal in value to the present value of
the accrued benefits of participants of such Plan. No facts or circumstances
exist which could reasonably be expected to give rise to any liability of any
Prime Plan, Prime, AMI, the General Partner, Servico, SAC or to any other
person. Prime or AMI has paid all amounts required under applicable Law, any
Prime Pension Plan and any Prime Welfare Plan to be paid as a contribution to
each Prime Pension Plan and Prime Welfare Plan through the date hereof. To the
extent required by Law, Prime has set aside adequate reserves to meet
contributions which are not yet due under any Prime Pension Plan or Prime
Welfare Plan. Neither Prime, the General Partner, AMI nor any other person
acting for or on behalf of any of them has engaged in any transaction or taken
any other action with respect to any Prime Plan which would subject Prime, AMI
or the General Partner to: (i) any Tax, penalty or liability for prohibited
transactions under ERISA or the Code; (ii) any Tax under Code Sections 4971,
4972, 4976, 4977 or 4979; or (iii) a penalty under ERISA Sections 502(c) or
502(l). Neither Prime, the General Partner nor AMI, nor any director, partner,
officer or employee of Prime, the General Partner or AMI, to the extent it or he
is a fiduciary with respect to any Prime Pension Plan or Prime Welfare Plan, has
breached any of its or his responsibilities or obligations imposed upon
fiduciaries under ERISA or the Code or which could result in any claim being
made under, by or on behalf of any Prime Pension Plan or Prime Welfare Plan or
any participant or beneficiary thereof. Each Prime Welfare Plan which is a group
health plan within the meaning of Code Section 5000(b)(1) complies in all
material respects with and in each and every case has complied in all material
respects with the applicable requirements of Code Section 4980B and Part 6 of
Title I of ERISA and does not benefit retirees, except as otherwise required by
law. As of the date thereof, there was no accrued vacation or sick leave payable
to the directors or employees of Prime, the General Partner or AMI which is not
reflected in the Prime Financial Statements.
(e) PERSONNEL. SCHEDULE 3.20(E) sets forth: (i) the names of
all officers of Prime, the General Partner and AMI; and (ii) the names and job
designations of all employees of Prime, the General Partner and AMI whose cash
compensation exceeds $75,000 per annum. Except as disclosed in the Prime
Financial Statements and except for unpaid base compensation accrued in the
ordinary course of business consistent with past practice since September 30,
1997, there are no material sums due to any employees of Prime, the General
Partner or AMI.
3.21 MATERIAL AGREEMENTS.
(a) SCHEDULE 3.21 sets forth a list of all written and oral
agreements, arrangements or commitments (collectively, the "AMI Material
Agreements") to which any of Prime, the General Partner or AMI is a party or by
which it or any of its respective assets are bound which are or could reasonably
be expected to be material to the financial position or results of operations of
Prime, the General Partner or AMI, including, but not limited to, any: (i)
contract, commitment, agreement or relationship resulting in a commitment or
potential commitment for expenditure or other obligation or potential
obligation, or which provides for the receipt or potential receipt, involving in
excess of $100,000, or a series or related contracts, commitments, agreements or
relationships that in the aggregate give rise to rights or liabilities exceeding
such amounts; (ii) indenture, mortgage, promissory note, loan agreement,
guarantee or other agreement or commitment relating to the borrowing of money,
encumbrance of assets or guaranty of any obligation; (iii) licensing, franchise
or royalty agreements or agreements providing for other similar rights or
agreements with third parties; (iv) agreements which restrict Prime, the General
Partner or AMI from engaging in any line
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of business or from competing with any other person or entity anywhere in the
world; (v) agreements or arrangements for the sale of any of the assets,
property or rights owned or utilized by AMI in the operation of its business or
requiring the consent of any party to the transfer and assignment of such
assets, property and rights, except for agreements or arrangements to sell
products or services in the ordinary course of business consistent with past
practices; (vi) agreement, contract or arrangement with any affiliate of Prime,
the General Partner or AMI or any affiliate of any partner, officer, director or
employee of Prime, the General Partner or AMI; (vii) lease of or agreement to
purchase real property; (viii) indemnification, contribution or similar
agreement or arrangement pursuant to which Prime, the General Partner or AMI may
be required to make any indemnification or contribution to any other person
except to the extent provided in the Certificate of Limited Partnership or
Limited Partnership Agreement of Prime or AMI or the Certificate of
Incorporation or bylaws of the General Partner, as in effect on the date hereof;
or (ix) other material contract, agreement or instrument which cannot be
terminated without penalty to Prime, the General Partner or AMI, upon the
provision of not greater than 30 days notice.
(b) Except as set forth on SCHEDULE 3.21, all AMI Material
Agreements have been entered into on an "arms-length" basis with parties who are
not affiliates of Prime, the General Partner or AMI. Except as set forth on
SCHEDULE 3.21, the AMI Material Agreements are each in full force and effect and
are the valid and legally binding obligations of AMI, Prime or the General
Partner, as the case may be, and, to the best of Prime's knowledge (without
independent inquiry), have not been breached by any of the other parties thereto
and are valid and binding obligations of the other parties thereto. Neither
Prime, the General Partner nor AMI is in default under the Certificate of
Limited Partnership or Limited Partnership Agreement of Prime or AMI or the
Certificate of Incorporation or bylaws of the General Partner or in default or
alleged default under any AMI Material Agreement and no event has occurred which
with the giving of notice or lapse of time or both would constitute such a
default.
3.22 RELATED PARTY TRANSACTIONS. Except as set forth on SCHEDULE 3.22
or reflected in the Prime Financial Statements, neither Prime nor the General
Partner nor any director, officer, partner or shareholder of Prime, the General
Partner or AMI, nor to Prime's knowledge, any employee of Prime, AMI or the
General Partner (individually a "Prime Related Party" and collectively the
"Prime Related Parties") or any affiliate of any Prime Related Party: (i) owns,
directly or indirectly, in whole or in part, any material property, asset (other
than cash) or right, real, personal or mixed, tangible or intangible, which is
associated with or necessary in the operation of the business of AMI, as
presently conducted or (ii) has an interest in or is, directly or indirectly, a
party to any AMI Material Agreement or any other contract, agreement, lease or
arrangement to which AMI is bound or is a party.
3.23 TAX MATTERS.
(a) All federal, state, local and foreign Tax returns and Tax
reports, if any, required to be filed with respect to the business or assets of
Prime, AMI or the General Partner have been filed with the appropriate
governmental agencies in all jurisdictions in which such returns and reports are
required to be filed; all of the foregoing as filed are true, correct and
complete in all material respects, and in all material respects reflect
accurately all liability for Taxes of Prime, AMI and the General Partner for the
periods for which such returns relate; and all amounts shown as owing thereon
have been paid. Except as set forth on SCHEDULE 3.23, none of such returns or
reports have been audited by any Governmental Authority.
(b) Except as set forth in SECTION 3.23, none of Prime, AMI or
the General Partner will have any liability with respect to Taxes, if any,
payable by them or relating to or chargeable against any of their assets,
revenues or income through September 30, 1997, including, but not limited
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to, interest and/or penalties, in excess of the amounts paid through the date
hereof or provided for by adequate reserves on the books of Prime, AMI or the
General Partner, as the case may be; and none of Prime, AMI or the General
Partner will have any liability with respect to any such Taxes through the
Closing in excess of the amounts paid through the date thereof or then provided
for by adequate reserves on the books of Prime, AMI or the General Partner, as
the case may be.
(c) None of Prime, AMI nor the General Partner has waived any
restrictions on assessment or collection of Taxes or consented to the extension
of any statute of limitations relating to federal, state, local or foreign
taxation.
(d) Set forth on SCHEDULE 3.23 is a summary of all disputes,
claims and appeals by Prime, AMI, the General Partner or any governmental
authority with respect to Taxes.
3.24 DISCLOSURE. No representation or warranty of Prime or the General
Partner herein (including the exhibits and schedules hereto), and no certificate
furnished or to be furnished by or on behalf of Prime or the General Partner to
Servico or its agents pursuant to this Agreement, contains or will, at the time
it is made, contain any untrue statement of a material fact or omits or will, at
the time it is made, omit to state a material fact necessary in order to make
the statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
ARTICLE IV
COVENANTS
----------
4.1 INTERIM OPERATIONS OF AMI. Except as set forth on SCHEDULE 4.1,
during the period from the date of this Agreement to the Closing, the General
Partner shall use its best efforts to cause each of AMI and Prime to operate its
business only in the usual and ordinary course consistent with past practices
and (i) preserve intact its business organization and goodwill in all respects,
(ii) continuously maintain insurance coverage substantially equivalent to the
insurance coverage in existence on the date hereof, and (iii) maintain its
relationships with franchisors, licensors, distributors, suppliers and others
with which it has business relations. Additionally, the General Partner shall
cause any proceeds from the sales of any properties of AMI to be used solely to
(a) pay costs and expenses of or related to such sales, (b) pay any prepayment
penalties in connection with the repayment of AMI's outstanding indebtedness to
persons other than Prime Related Parties, (c) repay such indebtedness, or (d)
fund renovations to AMI's existing properties. Except as otherwise expressly
contemplated herein or set forth on SCHEDULE 4.1, without the written consent of
Servico (which shall not be unreasonably withheld or delayed and shall be deemed
to have been given if not expressly denied within ten (10) days after written
request therefor), Prime shall not, nor shall it cause or permit AMI to, (i)
amend or otherwise change its Certificate of Limited Partnership or Limited
Partnership Agreement; (ii) issue, sell or authorize for issuance or sale, any
partnership interests or shares of any class of its securities or other equity
interests or any subscriptions, options, warrants, rights or convertible
securities or enter into any agreements or commitments of any character
obligating it to issue or sell any such partnership interests, securities or
other equity interests; (iii) redeem, purchase or otherwise acquire, directly or
indirectly, any of its partnership interests or other equity interests or any
option, warrant or other right to purchase or acquire any such partnership
interests or other equity interests or return all or any portion of any capital
contributions; (iv) enter into any commitment or transaction (including, but not
limited to, any capital expenditure or sale of assets), other than in the
ordinary course of business consistent with past practices; provided, however,
that, except as set forth on SCHEDULE 4.1, no commitment or transaction
involving the receipt or potential receipt of in excess of One Hundred Thousand
Dollars ($100,000) or payment
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or potential payment of in excess of One Hundred Thousand Dollars ($100,000)
shall be entered into without the prior written consent of Servico; (v) create,
incur, assume, maintain or permit to exist any long-term indebtedness or
short-term indebtedness or indebtedness for borrowed money (including purchase
money financing), except in the ordinary course of business consistent with past
practices under an existing loan availability, or any lien, pledge, mortgage or
other encumbrance affecting any of its assets; (vi) pay, discharge or satisfy
claims, liabilities or obligations (absolute, accrued, contingent or otherwise)
which involve payments or commitments to make payments which exceed normal
business operating requirements, consistent with past practice; (vii) cancel any
debts or waive any claims or rights; (viii) make any loans, advances or capital
contributions to, or investments in financial instruments of, any person or
entity; (ix) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other person or entity; (x) grant any increase in the compensation payable
or to become payable to any of its partners, officers, employees or consultants
or establish, adopt or increase any bonus, insurance or other employee benefit
plan, payment or arrangement made to, for or with any such persons or pay any
bonus to any manager, partner, officer, director or employee, except to persons
other than officers, directors or consultants of AMI or Prime pursuant to
existing plans in amounts and at times in conformity with such plans and
consistent with past practices; (xi) enter into any employment agreement or
grant any severance or termination pay with or to any partner, officer, director
or employee, except to persons other than officers, directors or consultants of
AMI or Prime pursuant to existing plans in amounts and at times in conformity
with such plans and consistent with past practices; (xii) declare or pay any
distribution (whether in cash or other property) with respect to its partnership
interests; (xiii) alter in any way the manner of keeping its books, accounts or
records or its accounting practices therein reflected; (xiv) enter into any
agreement which would be an AMI Material Agreement or amend, terminate, renew or
modify any existing AMI Material Agreement; (xv) enter into any indemnification,
contribution or similar agreement requiring it to indemnify any other person or
entity or make contributions to any other person or entity; (xvi) do any act, or
omit to do any act, or permit, to the extent within Prime's or AMI's control,
any act or omission to act which would cause a violation or breach of any of the
representations, warranties or covenants of Prime or the General Partner set
forth in this Agreement; (xvii) sell, transfer, surrender, abandon or dispose of
any of its assets or property rights (tangible or intangible), other than in the
ordinary course of business consistent with past practices or, with respect to
any hotel properties, only pursuant to AMI Material Agreements currently in
effect and disclosed on SCHEDULE 3.21 or as otherwise set forth on SCHEDULE 4.1;
(xviii) enter into any agreement or take any action which could have a Prime
Material Adverse Effect (financial or otherwise); or (xix) agree, whether in
writing or otherwise, to do any of the foregoing.
4.2 ACCESS. Prime and the General Partner shall: (i) afford to Servico
and its agents and representatives full access to the properties, books, records
and other information of Prime, AMI and the General Partner, provided that such
access shall be granted upon reasonable notice and at reasonable times during
normal business hours in such a manner as to not unreasonably interfere with
normal business operations; (ii) use its reasonable efforts to cause Prime's,
the General Partner's and AMI's personnel, without unreasonable disruption of
normal business operations, to assist Servico in its investigation of Prime, AMI
and the General Partner pursuant to this Section 4.2; and (iii) promptly make
available to Servico such information and documents concerning the business,
assets, liabilities, properties and personnel of Prime, AMI and the General
Partner as Servico may from time to time reasonably request and as can be
provided without unreasonable expense or disruption of normal business
operations. Prime and the General Partner shall use their best efforts to cause
their advisors, consultants, contractors and managers to cooperate with Servico
and its agents and representatives, and to make available to Servico and its
agents and representatives, information and documents, on terms and subject to
conditions similar to those provided in the preceding sentence and subject to
the reimbursement by Servico or its agents and representatives of the reasonable
out-
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of-pocket costs or expenses (but not fees) of such advisors, consultants,
contractors and managers associated with making available such information and
documents.
4.3 SCHEDULES. Immediately following the execution and delivery of this
Agreement, Prime, AMI and the General Partner, together with their advisors,
representatives, and counsel, shall commence, and proceed as promptly as
practicable with, the preparation of the Schedules hereto, which Schedules shall
be delivered to Servico not later than three (3) weeks after the execution and
delivery hereof. Servico or its advisors, representatives and counsel may
participate in such process (as part of their review contemplated by Section 4.2
and not as the preparers of such Schedules).
4.4 CONSENTS. Each of Prime, the General Partner and Servico agrees to
cooperate with each other, file, submit or request promptly after the date of
this Agreement and to prosecute diligently any and all applications or notices
required to be filed or submitted to any Governmental Entity, including those
specified in Sections 2.4 and 3.7. Each of Prime, the General Partner and
Servico shall promptly make available to the other such information as each of
them may reasonably request relating to its business, assets, liabilities,
properties and personnel as may be required by each of them to prepare and file
or submit such applications and notices and any additional information requested
by any Governmental Entity, and shall update by amendment or supplement any such
information given in writing. Each of Prime, the General Partner and Servico
represents and warrants to the other that such information, as amended or
supplemented, shall be an accurate and complete description of the information
or data purported to be shown. Each of Prime and Servico shall promptly provide
the other with copies of all filings made with Governmental Entities in
connection with this Agreement.
4.5 REASONABLE EFFORTS. Subject to the terms and conditions of this
Agreement, each of the parties shall use its reasonable efforts in good faith to
take or cause to be taken as promptly as practicable all reasonable actions that
are within its control to cause to be fulfilled those conditions precedent to
its obligations to consummate the transactions contemplated by this Agreement.
The parties shall use reasonable efforts to obtain all consents and approvals
required in connection with the consummation of the transactions contemplated by
this Agreement.
4.6 NOTIFICATION. Each party to this Agreement shall promptly notify
the other parties in writing of the occurrence, or threatened occurrence, of (i)
any event that, with the lapse of time or notice or both, would constitute a
violation or breach of this Agreement by such party, (ii) any event that would
cause any representation or warranty made by such party in this Agreement to be
false or misleading in any respect; and (iii) any other matter which may occur
from and after the date of this Agreement which, if existing on the date of such
Agreement, would have been required to be disclosed herein. The updating of any
schedule pursuant to this Section 4.6 shall not be deemed to release any party
for the breach of any representation, warranty or covenant hereunder or of any
other liability arising hereunder.
4.7 NO SOLICITATION. Except for the transactions contemplated by this
Agreement, unless and until this Agreement shall have been terminated, Prime and
the General Partner shall not (nor shall they permit AMI or any of its or their
partners, shareholders, officers, directors, agents or affiliates to) directly
or indirectly (i) solicit, encourage (including by furnishing information to any
third party or group), initiate or, except as provided in the proviso to this
sentence, participate in any negotiations or discussions with respect to any
offer or proposal to acquire all or substantially all of the business and assets
or capital stock or partnership interests of Prime, AMI or the General Partner,
whether by merger, purchase of assets or otherwise, or (ii) except as required
by Law, disclose any nonpublic information or any other information not
customarily disclosed to any person or entity concerning the business and assets
of Prime, the General Partner and AMI, afford to any person or
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entity (other than Servico and its designees) access to the books or records
of Prime, the General Partner or AMI or otherwise assist or encourage any person
or entity in connection with any of the foregoing; provided, however, that
Prime, AMI and/or the General Partner may entertain, participate in negotiations
or discussions with respect to, and accept, any unsolicited offer or proposal
that Prime, AMI and/or the General Partner reasonably determines, considering
all of the terms and conditions of the transactions contemplated by this
Agreement and all of the terms and conditions of such offer or proposal, is more
favorable to the Limited Partners. In the event that Prime, AMI or the General
Partner shall receive or become aware of any offer or proposal of the type
referred to in clause (i) above or the proviso to the preceding sentence, Prime
shall promptly inform Servico of such offer or proposal and the terms and
provisions thereof.
4.8 CONFIDENTIALITY. The parties acknowledge that all confidential or
proprietary information with respect to the business and operations of the other
party and their respective subsidiaries is valuable, special and unique. The
parties shall not disclose, directly or indirectly, to any person or entity, or
use or purport to authorize any person or entity to use any confidential or
proprietary information with respect to the other party or any of their
respective subsidiaries for any purpose other than the evaluation of the
transactions contemplated by this Agreement, without the prior written consent
of the other party, including without limitation, information as to the
financial condition, results of operations, customers, suppliers, products,
products under development, services, services under development, inventions,
sources, leads or methods of obtaining new business, pricing methods or
formulas, costs, marketing strategies or any other information relating to
Prime, the General Partner, AMI, SAC or Servico or any of their respective
subsidiaries, which could reasonably be regarded as confidential or proprietary
(whether such data is obtained from such party or its affiliates, from advisors
or consultants to, or managers for, or representatives of such party or its
affiliates, or from other parties in a relationship of confidentiality with such
party or its affiliates, and without regard to the form or medium in which such
information is embodied), but not including information which (i) is or shall
become generally available to the public other than as a result of an
unauthorized disclosure by any of the parties or any of its affiliates, (ii)
becomes available to the other party on a nonconfidential basis from a source
other than a party to this Agreement, provided such source is not in violation
of a confidentiality agreement with the party providing such information or
(iii) is required to be disclosed by law or by the rules and regulations of the
NYSE. The covenants of the parties contained in this Section 4.8 shall survive
any termination of this Agreement. In the event that the transactions
contemplated by this Agreement are consummated, Servico's obligations under this
Section 4.8 with respect to Prime, the General Partner and AMI shall terminate.
4.9 PUBLICITY. The parties agree to reasonably cooperate in issuing any
press release or other public announcement or making any governmental filing
concerning this Agreement or the transactions contemplated hereby. Nothing
contained herein shall prevent any party from at any time furnishing any
information to any Governmental Entity which it is by Law or pursuant to the
rules and regulations of the NYSE so obligated to disclose or from making any
disclosure which its independent outside counsel (which may be such party's
regularly engaged outside counsel) deems (in the case of non-governmental
filings, in writing) necessary in order to fulfill such party's disclosure
obligations under applicable law, or the rules and regulations of the NYSE;
provided, however, that such party shall afford the other parties prompt notice
of the proposed disclosure and the opportunity to seek a protective order or
other relief. If such order or other relief is denied, or the provisions of the
foregoing proviso are waived, the disclosing party shall disclose only so much
of any confidential or proprietary information as is required under the
circumstances to be disclosed.
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4.10 PROXY STATEMENT.
(a) As promptly as practicable after the execution of this
Agreement, Prime shall prepare and file with the SEC a proxy statement with
respect to the transactions contemplated by this Agreement relating to the
special meeting of Prime's Limited Partners (the "Prime Special Meeting") to be
held to consider the approval of this Agreement and the transactions
contemplated hereby (such document, together with any amendments thereto, the
"Proxy Statement"). Servico shall furnish all information concerning Servico,
its offer contemplated by this Agreement, and, to the extent required by
applicable Law, its analysis of and plans for AMI's properties, as Prime may
reasonably request in connection with the preparation of the Proxy Statement.
The Proxy Statement shall be mailed to the Limited Partners of Prime as promptly
as practicable. Prime shall cause the Proxy Statement to comply as to form and
substance in all material respects with the applicable requirements of the
Exchange Act and all other applicable Law and shall ensure that none of the
information included in the Proxy Statement shall, at (i) the time the Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed to
the Limited Partners of Prime or (ii) the time of the Prime Special Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) The Proxy Statement shall include the recommendation of
the General Partner to Prime's Limited Partners that they vote in favor of
approval of this Agreement and the transactions contemplated hereby.
(c) No amendment or supplement to the proxy statement filed
with the SEC, shall be made without the approval of Servico, which approval
shall not be unreasonably withheld or delayed. Prime shall promptly advise
Servico of any request by the SEC for amendment of such proxy statement or
comments thereon and responses thereto or requests by the SEC for additional
information.
4.11 SPECIAL MEETING. Prime shall call and hold the Prime Special
Meeting as promptly as practicable for the purpose of voting upon the approval
of this Agreement pursuant to the Proxy Statement and the transactions
contemplated hereby. Prime shall use its best efforts to solicit from its
Limited Partners, proxies in favor of the approval of this Agreement and the
transactions contemplated hereby pursuant to the Proxy Statement and shall take
such other action as is reasonably necessary or advisable to secure the vote or
consent of Limited Partners required by applicable Law.
4.12 DISSOLUTION OF PRIME. Immediately after the Closing, Prime shall
wind up its affairs, dissolve and distribute the Purchase Price to its Limited
Partners in accordance with the terms of its Limited Partnership Agreement and
the Delaware Revised Uniform Limited Partnership Act.
ARTICLE V
ADDITIONAL AGREEMENTS
---------------------
5.1 SURVIVAL OF THE REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS. The representations and warranties of Prime, the General Partner and
Servico contained in this Agreement shall terminate at the Closing.
5.2 INVESTIGATION. The representations, warranties, covenants and
agreements of this Agreement shall not be affected or diminished in any way by
the receipt of any notice pursuant to Section 4.6 or by any investigation (or
failure to investigate) at any time by or on behalf of the party for whose
benefit such representations, warranties, covenants and agreements were made.
All
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statements contained herein or in any schedule, certificate, exhibit, list or
other document delivered pursuant hereto or in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties for
purposes of this Agreement.
5.3 INDEMNIFICATION.
(a) For a period of six years after the Closing, Servico
shall, subject to applicable Law, indemnify, defend and hold harmless the
present directors and officers of the General Partner (each a "Prime Indemnified
Party") against all losses, claims, demands, costs, damages, liabilities,
expenses, judgments, fines, settlements and other amounts arising out of actions
or omissions occurring at or prior to the Closing to the same extent (including
mandatory advancement of expenses) but without limitation as to amount as
provided under the Limited Partnership Agreements of Prime and AMI and the
Certificate of Incorporation and bylaws of the General Partner. During such
period, Servico shall obtain or maintain in effect a directors' and officers'
liability insurance policy or a noncancellable runoff policy insuring the Prime
Indemnified Parties, with coverage in amount and scope substantially equivalent
to the General Partner's existing coverage, for events or occurrences prior to
the Closing.
(b) For purposes of the foregoing, (i) any claim against S.
Xxxxxxx Xxxx in his capacity as a consultant to Prime, AMI or the General
Partner shall be deemed to be a claim against him as an officer of the General
Partner and (ii) any claim against Xxxx X. Xxxx or Xxxxxx Xxxx Inc. as a
consultant to Prime, AMI or the General Partner shall be deemed to be a claim
against Xxxxxxx X. Xxxxxx as a director of the General Partner.
(c) The indemnification provided for above shall (i) include
any claim against any Prime Indemnified Party arising directly or indirectly out
of this Agreement and (ii) if litigation is commenced against such Prime
Indemnified Party which has not finally concluded within six (6) years after the
Closing, continue until such litigation is finally concluded.
(d) If a claim under this Section 5.3 is not paid in full by
Servico within sixty (60) days after a written claim has been received by
Servico, the indemnified party may at any time thereafter bring suit against
Servico to recover the unpaid amount of the claim. If successful in whole or in
part in any such suit, or in a suit brought by Servico to recover an advancement
of expenses pursuant to an undertaking, such person shall be entitled to be paid
also the expenses of prosecuting or defending such suit.
(e) In any suit brought by an indemnified party to enforce a
right to indemnification or to an advancement of expenses pursuant to the terms
of an undertaking, the burden of providing that such person is not entitled to
be indemnified, or to such advancement of expenses, shall be on Servico.
(f) For a period of six (6) years after the Closing, Servico
shall, subject to applicable law, indemnify, defend and hold harmless Xxxxxx
Xxxx to the same extent, and on the same terms and subject to the same
conditions, that Prime and the General Partner had agreed to indemnify and hold
harmless Xxxxxx Xxxx. A complete and correct copy of such agreement shall be
provided to Servico with the Schedules contemplated in Section 4.3.
(g) During the term of this Agreement, Servico shall pay all
reasonable expenses (including reasonable attorneys' fees) incurred by any Prime
Indemnified Party in defending any proceeding brought by any of the Limited
Partners against such Prime Indemnified Party as a consequence of the execution
and delivery of this Agreement and the proposed sale of the Limited
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Partnership Interest to SAC pursuant to this Agreement. Servico's obligations
under this paragraph 5.3(g) shall terminate upon termination of this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT
--------------------
6.1 MUTUAL CONDITIONS PRECEDENT. The respective obligations of the
parties to consummate the transactions contemplated by this Agreement are
subject to the satisfaction at or prior to the Closing of the following
conditions:
(a) GOVERNMENTAL CONSENTS. All material consents and approvals
required by Governmental Entities for the consummation of the transactions
contemplated by this Agreement shall have been obtained.
(b) NO LITIGATION. No litigation, arbitration or other
proceeding shall be pending or, to the knowledge of the parties, threatened by
or before any court, arbitration panel or governmental authority, and no law or
regulation shall have been enacted after the date of this Agreement; and no
judicial or administrative decision shall have been rendered, which, in each
case, enjoins, prohibits or materially restricts, or seeks to enjoin, prohibit
or materially restrict, the consummation of the transactions contemplated by
this Agreement.
(c) PARTNERSHIP APPROVALS. The Limited Partners of Prime shall
have approved this Agreement and the transactions contemplated hereby in
accordance with its Certificate of Limited Partnership and Limited Partnership
Agreement.
(d) GENERAL PARTNER PURCHASE AGREEMENT. Servico shall have
entered into a binding agreement with the General Partner pursuant to which
Servico will acquire the GP Interest and Servico or its designee will be
substituted and admitted as the sole general partner of AMI.
6.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SERVICO. The obligations
of Servico to consummate the transactions contemplated by this Agreement are
subject to the satisfaction at or prior to the Closing of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. Each of the
representations and warranties of Prime and the General Partner contained herein
or in any certificate or other document delivered pursuant to the provisions
hereof or in connection with the transactions contemplated hereby shall be true
and correct in all material respects (except for such representations and
warranties qualified by materiality which shall be true and correct in all
respects) as of the Closing with the same force and effect as though made on and
as of such date, except that representations as to agreements, licenses,
franchises, rights, conditions, facts or relationships that will terminate or be
altered at the Closing by virtue of the Closing or changes in relationships
caused by the Closing shall be understood to have no force, or validity beyond
the Closing.
(b) PERFORMANCE. Prime and the General Partner shall have
performed and complied in all material respects with all of the agreements,
covenants and obligations required under this Agreement to be performed or
complied with by them prior to or at the Closing.
(c) NO MATERIAL ADVERSE EFFECT. There shall not have occurred
any event or condition which has adversely affected or is reasonably likely to
adversely affect in any material
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respect the condition (financial or otherwise) of AMI or its assets, liabilities
(whether absolute, accrued, contingent or otherwise), earnings, business,
prospects or operations.
(d) CONSENTS AND AGREEMENTS. Prime and the General Partner
shall have obtained all material authorizations, consents, waivers and approvals
required in connection with the consummation of the transactions contemplated
hereby.
(e) OPINION OF COUNSEL. Servico shall have received from Xxxxx
& Xxxx LLP, legal counsel to Prime, an opinion letter, dated as of the Closing,
in form and substance reasonably satisfactory to Servico, with respect to the
matters set forth in EXHIBIT 6.2(e) to this Agreement.
(f) CERTIFICATES. Prime shall have delivered to Servico a
certificate executed by the principal executive officer of the General Partner,
dated as of the Closing, certifying in such detail as Servico may reasonably
request, that (i) the conditions specified in Sections 6.2(a) and (b) (insofar
as they are to be performed by or Prime or the General Partner) have been
fulfilled and (ii) attached to such certificate is a true and correct copy of
the resolutions or consents of the Board of Directors of the General Partner
authorizing the execution, delivery and performance of this Agreement by Prime
and the General Partner. Servico shall also have received (i) a certificate from
the Secretary of the General Partner as to the incumbency and signatures of the
officers of Prime and the General Partner executing this Agreement, and (ii) a
certificate issued by the Secretary of State of Delaware and of each state in
which the General Partner or AMI is qualified to do business, as of a date
reasonably acceptable to Servico, as to the good standing of the General Partner
and AMI in those states.
(g) CONSULTING AGREEMENT. Servico shall enter into a
Consulting Agreement with Xx. Xxxxxxx Xxxx in the form attached as EXHIBIT
6.2(g) hereto.
6.3 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PRIME AND THE GENERAL
PARTNER. The obligations of Prime and the General Partner to consummate the
transactions contemplated by this Agreement are subject to the satisfaction at
or prior to the Closing of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. Each of the
representations and warranties of Servico contained herein or in any certificate
or document delivered pursuant to the provisions hereof or in connection with
the transactions contemplated hereby shall be true and correct in all material
respects (except for such representations and warranties qualified by
materiality which shall be true and correct in all respects) on and as of the
Closing with the same force and effect as though made on and as of such date.
(b) PERFORMANCE. Servico shall have performed and complied in
all material respects with all of the agreements, covenants and obligations
required under this Agreement to be performed or complied with by it prior to or
at the Closing.
(c) CONSENTS AND AGREEMENTS. Servico shall have obtained all
material authorizations, consents, waivers and approvals required in connection
with the consummation of the transactions contemplated hereby.
(d) OPINION OF COUNSEL. Prime and the General Partner shall
have received from Xxxxxxx Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxx & Xxxxxxxxx, P.A.,
legal counsel to Servico, an opinion letter, dated as of the Closing, in form
and substance reasonably satisfactory to Prime and the General Partner, with
respect to the matters set forth in EXHIBIT 6.3(d) to this Agreement.
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(e) SERVICO'S CERTIFICATES. Servico shall have delivered to
Prime a certificate executed by its Chairman and President, dated as of the
Closing, certifying in such detail as Prime may reasonably request, that: (i)
the conditions specified in Sections 6.3(a) and (b) (insofar as they are to be
performed by Servico) have been fulfilled; and (ii) attached to such certificate
is a true and correct copy of the resolutions of the Board of Servico
authorizing the execution, delivery and performance of this Agreement by
Servico. Prime and the General Partner shall also have received (i) a
certificate from the Secretary of Servico as to the incumbency and signatures of
the officers of Servico executing this Agreement and (ii) a certificate issued
by the Secretary of State of Florida as to the due formation, valid existence
and good standing of Servico in Florida.
6.4 TERMINATION. This Agreement may be terminated at any time prior to
the date of Closing, as follows:
(a) by mutual written consent of Servico and Prime;
(b) by either Servico or Prime, if any Governmental Entity
shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the transactions
contemplated hereby, and such order, decree, ruling or other action shall have
become final and nonappealable;
(c) by either Servico or Prime, if the Closing has not
occurred by June 1, 1998 (such date or such later date mutually agreed to in
writing by the parties hereto referred to as the "End Date") (other than due to
the failure of the party seeking to terminate this Agreement to perform its
obligations under this Agreement required to be performed at or prior to the
Closing);
(d) by either Servico or Prime, if the Prime Special Meeting
shall have been held, and the Limited Partners shall have failed to approve this
Agreement;
(e) by Servico at any time in its sole discretion if any of
the representations or warranties of Prime or the General Partner in this
Agreement are not in all material respects true and correct, or if Prime or the
General Partner breach in any material respect any covenant contained in this
Agreement, provided that if such misrepresentation or breach is curable, it is
not cured within ten business days after notice thereof, but in any event prior
to the End Date;
(f) by Prime at any time in its sole discretion if any of the
representations or warranties of Servico or SAC in this Agreement are not in all
material respects true and correct, or if Servico or SAC breach in any material
respect any covenant contained in this Agreement, provided that if such
misrepresentation or breach is curable, it is not cured within ten business days
after notice thereof, but in any event prior to the End Date;
(g) by Servico, in Servico's sole discretion, at any time
prior to the passage of seven (7) days after delivery to Servico of the
Schedules contemplated in Section 4.3; or
(h) by Prime, if Prime has not obtained prior to seven (7)
days after execution and delivery of this Agreement, the required approval of
the holders of AMI's outstanding secured indebtedness to the application of
AMI's available funds to the payment of up to $700,000 of the fees and expenses
of this transaction, including the fees and expenses of Xxxxxx Xxxx, the fees
and expenses of Xxxxx & Xxxx LLP, the costs of preparing, filing, printing and
distributing the Proxy Statement, and the cost of holding the Prime Special
Meeting.
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If this Agreement is terminated pursuant to this Section 6.4, written
notice thereof shall promptly be given by the party electing such termination to
the other party and, subject to the expiration of the cure periods provided in
clauses (e) and (f) above, if any, this Agreement shall terminate without
further actions by the parties and no party shall have any further obligations
under this Agreement except to the extent provided in Section 7.8; provided that
any termination of this Agreement pursuant to this Section 6.4 shall not relieve
any party from any liability for the willful or intentional breach of any of its
representations or warranties or the willful or intentional breach of any of its
covenants or agreements contained in this Agreement. Notwithstanding the
termination of this Agreement, the respective obligations of the parties under
Sections 4.8 (Confidentiality), 4.9 (Publicity), 7.8 (Fees and Expenses), 7.12
(Litigation; Prevailing Party), 7.14 (Injunctive Relief) and 7.15 (Governing
Law) shall survive the termination of this Agreement. Subject to Section 4.7
hereof, upon termination of this Agreement, each party shall return all
documents and other materials of any other party relating to the transactions
contemplated by this Agreement, whether so obtained before or after the
execution of this Agreement, to the party furnishing the same.
ARTICLE VII
MISCELLANEOUS
-------------
7.1 FURTHER ASSURANCES. The parties hereto shall deliver any and all
other instruments or documents required to be delivered pursuant to, or
necessary or proper in order to give effect to, all of the terms and provisions
of this Agreement including, without limitation, all necessary bulk of sale,
assignments and such other instruments of transfer as may be necessary or
desirable to transfer ownership.
7.2 NOTICES. Any notice or other communication under this Agreement
shall be in writing and shall be delivered personally or sent by registered
mail, return receipt requested, postage prepaid, or sent by facsimile or prepaid
overnight courier to the parties at the addresses set forth below their names on
the signature pages of this Agreement (or at such other addresses as shall be
specified by the parties by like notice). Such notices, demands, claims and
other communications shall be deemed given when actually received or (a) in the
case of delivery by overnight service with guaranteed next day delivery, the
next day or the day designated for delivery, (b) in the case of registered U.S.
mail, five days after deposit in the U.S. mail, or (c) in the case of facsimile,
the date upon which the transmitting party received confirmation of receipt by
facsimile, telephone or otherwise. A copy of any notices delivered to Servico or
SAC shall also be sent to Xxxxxxx Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxx & Xxxxxxxxx,
P.A., 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000, Attention:
Xxxxxx X. Xxxxxx, Esq. A copy of any notices delivered to Prime or the General
Partner shall also be sent to Xxxxx & Xxxx LLP, Xxx Xxxxx Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxxxx X. Xxxxxxx, Esq.
7.3 ENTIRE AGREEMENT. This Agreement, along with the Schedules and
Exhibit hereto, constitutes the entire agreement among the parties hereto and
supersedes all prior agreements, understandings, negotiations and discussions,
both written and oral, among the parties hereto with respect to the subject
matter hereof. This Agreement may not be amended or modified in any way except
by a written instrument executed by all of the parties hereto.
7.4 ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder may be assigned by any party without the written
consent of the other parties hereto (whether by operation of Law or otherwise).
Subject to the preceding sentence, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
heirs, personal representatives, legal representatives, and assigns.
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7.5 WAIVER. At any time prior to the date of Closing, any
representation, warranty, covenant, term or condition of this Agreement which
may legally be waived, may be waived, or the time of performance thereof
extended, at any time by the party hereto entitled to the benefit thereof, and
any term, condition or covenant hereof may be amended by the parties hereto at
any time. Any such waiver, extension or amendment shall be evidenced by an
instrument in writing duly executed on behalf of the appropriate party by a
person who has been authorized by its Board of Directors, in the case of Servico
and the General Partner, or the General Partner, on behalf of Prime, to execute
waivers, extensions or amendments on its behalf. No waiver by any party hereto,
whether express or implied, of its rights under any provision of this Agreement
shall constitute a waiver of such party's rights under such provisions at any
other time or a waiver of such party's rights under any other provision of this
Agreement or any other agreement. No failure by any party hereto to take any
action against any breach of this Agreement or default by another party shall
constitute a waiver of the former party's right to enforce any provision of this
Agreement or to take action against such breach or default or any subsequent
breach or default by such other party.
7.6 NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
other than the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any
rights or remedies under or by reason of this Agreement other than the Limited
Partners with respect to the provisions of Section 4.12 hereto.
7.7 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement shall be declared invalid, void or unenforceable,
the remainder of the provisions of this Agreement shall remain in full force and
effect, and such invalid, void or unenforceable provision shall be interpreted
as closely as possible to the manner in which it was written.
7.8 FEES AND EXPENSES.
(a) Except as provided below, all fees and expenses incurred
in connection with this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such fees or expenses. In no
event shall the aggregate fees and expenses incurred by or on behalf of AMI in
connection with this Agreement and any of the transactions contemplated herewith
exceed $700,000 in the aggregate.
(b) If this Agreement shall be terminated pursuant to Section
6.4(e) as the result of an intentional or willful breach by Prime or the General
Partner of any representation, warranty or covenant contained herein, then Prime
shall pay Servico an amount equal to all costs and out-of-pocket expenses
(including reasonable attorneys' and advisors' fees) of up to $300,000 incurred
by Servico in connection with this Agreement and the transactions contemplated
by this Agreement.
(c) If this Agreement shall be terminated pursuant to Section
6.4 (f) as the result of an intentional or willful breach by Servico of any
representation, warranty or covenant contained herein, then Servico shall pay
Prime an amount equal to all costs and out-of-pocket expenses (including
reasonable attorneys' and advisors fees, including the fees and expenses of
Xxxxxx Xxxx) of up to $700,000 incurred by Prime in connection with this
Agreement and the transactions contemplated by this Agreement.
(d) If this Agreement shall be terminated by Prime for any
reason other than pursuant to Section 6.4(f) and, at the time of such
termination, there shall exist or be proposed a Competing Transaction then,
promptly after the execution of any agreement with respect to the Competing
Transaction or, if no agreement is executed, the consummation of the Competing
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Transaction, Prime shall pay to Servico $1 million. A "Competing Transaction"
means any of the following involving Prime or AMI, as the case may be (other
than the transactions contemplated by this Agreement): (i) a merger,
consolidation, exchange, business combination or other similar transaction, (ii)
any sale, lease, exchange, transfer or other disposition of 15% or more of the
assets of such party other than sales of properties pursuant to AMI Material
Agreements currently in effect and disclosed on SCHEDULE 3.21 or as agreed to in
writing by Servico, or (iii) a tender offer or exchange offer for 15% or more of
the outstanding limited partnership interests of Prime.
(e) If this Agreement is terminated other than pursuant to
Sections 6.4(e) and (g) (in which case no amounts will be payable by Servico
hereunder), Servico shall, within five (5) business days after such termination,
reimburse Prime and the General Partner for up to $100,000 of the fees and
reasonable expenses of Xxxxxx Xxxx.
(f) Each party agrees that the actual damages accruing from
termination of this Agreement pursuant to the termination provisions referenced
in Section 7.8(b), (c) or (d) are incapable of precise estimation and would be
difficult to prove, and that the damages stipulated herein bear a reasonable
relationship to the potential injury likely to be sustained in the event of
termination pursuant to such occurrence. The payments stipulated in Section
7.8(b), (c) or (d) are intended by the parties to provide just compensation in
the event of termination pursuant to said termination provision referenced in
Section 7.8(b), (c) or (d), and are not intended to compel performance or to
constitute a penalty for nonperformance.
(g) Any payment required to be made pursuant to Section
7.8(b), (c) or (d) shall be made not later than five business days after the
occurrence of the event for which a party is entitled to payment and delivery by
such party to the other party of a notice of demand for payment, provided that
such notice shall include an itemization setting forth in reasonable detail all
expenses of such party for which it is entitled to reimbursement hereunder
(which itemization may be supplemented and updated from time to time by such
party until the sixtieth day after such party delivers such notice of demand for
payment). All payments required to be made pursuant to this Section 7.8 shall be
made by wire transfer of immediately available funds to an account designated by
such party in the notice of demand for payment delivered pursuant to this
Section 7.8(g).
(h) In the event a party shall fail to make any payment
required pursuant to Section 7.8(b), (c), (d) or (e), the amount of any such
required payment shall be increased to include the costs and expenses actually
incurred or accrued by the other party (including, without limitation, fees and
expenses of counsel) in connection with the collection under and enforcement of
this Section 7.8, together with interest on such unpaid amounts commencing on
the date that such payment under Section 7.8(b), (c),(d) or (e) became due, at a
rate equal to the rate of interest publicly announced by Citibank, N.A., from
time to time, in The City of New York, from time to time, as such bank's base
rate plus 2.00%.
7.9 SECTION HEADINGS. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of any provisions of this Agreement.
7.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the several parties hereto in separate counterparts, each of
which shall be deemed to be one and the same instrument.
7.11 TIME OF ESSENCE. Wherever time is specified for the doing or
performance of any act or the payment of any funds, time shall be considered of
the essence.
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7.12 LITIGATION; PREVAILING PARTY. In the event of any litigation with
regard to this Agreement, the prevailing party shall be entitled to receive from
the non-prevailing party and the non-prevailing party shall pay upon demand all
reasonable fees and expenses of counsel for the prevailing party.
7.13 REMEDIES CUMULATIVE. No remedy made available by any of the
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity.
7.14 INJUNCTIVE RELIEF. It is possible that remedies at law may be
inadequate and, therefore, the parties hereto shall be entitled to equitable
relief including, without limitation, injunctive relief, specific performance or
other equitable remedies in addition to all other remedies provided hereunder or
available to the parties hereto at law or in equity.
7.15 GOVERNING LAW. This Agreement has been entered into and shall be
construed and enforced in accordance with the laws of the State of New York
without reference to the choice of law principles thereof.
7.16 CERTAIN DEFINITIONS. For purposes of this Agreement, the following
terms have the following meanings:
(a) "AFFILIATE" has the meaning specified in Rule 144
promulgated by the SEC under the Securities Act;
(b) "BUSINESS DAY" means any day on which the principal
offices of the SEC in Washington, D.C. are open to accept filings, or, in the
case of determining a date when any payment is due, any day on which banks are
not required or authorized by law or executive order to close in the City of New
York, USA;
(c) "KNOWLEDGE" means, with respect to any matter in question,
that such party (i) has actual knowledge of such matter or (ii) after due
investigation, should have known of such matter. Where reference is made to the
knowledge of Prime, such reference shall be deemed to include only the directors
and executive officers of the General Partner, all of whom shall have been
deemed to have conducted the investigation required by this definition;
(d) "LAW" means any federal, state or local statute, law,
ordinance, regulation, rule, code, order or other requirement or rule of law of
the United States or any other jurisdiction;
(e) "PARTNERSHIP INTERESTS" means all of the partners' rights
in the subject partnership, including, but not limited to, the profits and
losses of the partnership and the right to receive distributions of the
partnership's assets;
(f) "PERSON" means an individual, corporation, partnership,
limited partnership, limited liability company, syndicate, person (including,
without limitation, a "PERSON" as defined in Section 13(d)(3) of the Exchange
Act), trust, association, entity or government or political subdivision, agency
or instrumentality of a government;
(g) "PRIME MATERIAL ADVERSE EFFECT" means any change in or
effect on the business of AMI that is, or is reasonably likely to be, materially
adverse to the business, assets (including
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intangible assets), liabilities (contingent or otherwise), condition (financial
or otherwise), results of operations or prospects of AMI;
(h) "SUBSIDIARY" or "SUBSIDIARIES" of any person means any
corporation, limited liability company, partnership, joint venture or other
legal entity of which such person (either alone or through or together with any
other subsidiary of such person) owns, directly or indirectly, more than fifty
percent of the stock or other equity interests, the holders of which are
generally entitled to vote for the election of the board of directors or other
governing body of such corporation, partnership or other legal entity; and
(i) "TAX" means any federal, state, local or foreign income,
gross receipts, franchise, estimated, alternative minimum, add-on minimum,
sales, use, transfer, transportation, transportation excise, registration, value
added, documentary stamp, excise, natural resources, severance, stamp,
occupation, premium, windfall profit, environmental, customs, duties, real
property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee or other withholding, or other tax or
governmental charge, of any kind whatsoever, including any interest, penalties
or additions to tax or additional amounts in respect of the foregoing; the
foregoing shall include any transferee or secondary liability for a Tax and any
liability assumed by agreement or arising as a result of being (or ceasing to
be) a member of any affiliated group (or being included (or required to be
included) in any tax return relating thereto).
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IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the day and year first above written.
SERVICO, INC., a Florida corporation
By:/s/ Xxxxx Xxxxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxxxx
-------------------------------------
Title: President & CEO
------------------------------------
Address: 0000 Xxxxxxxxx Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
SERVICO ACQUISITION CORP.,
a Florida corporation
By: /s/ Xxxxx Xxxxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxxxx
-------------------------------------
Title: President & CEO
------------------------------------
Address: 0000 Xxxxxxxxx Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
PRIME MOTOR INNS LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PRIME-AMERICAN REALTY CORP.,
a Delaware corporation,
its General Partner
By: /s/ S. Xxxxxxx Xxxx
---------------------------------------
Name: S. Xxxxxxx Xxxx
-------------------------------------
Title: VP & CEO
------------------------------------
Address: 00-00 Xxxxx 000 Xxxxx Fair Lawn,
N.J. 07410
PRIME-AMERICAN REALTY CORP.,
a Delaware corporation
By: /s/ S. Xxxxxxx Xxxx
---------------------------------------
Name: S. Xxxxxxx Xxxx
-------------------------------------
Title: VP & CEO
------------------------------------
Address: 00-00 Xxxxx 000 Xxxxx Xxxx Xxxx,
X.X. 00000
I:\W-AGT\10673\129\acq-agr.n4
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