EXHIBIT 2.1
AGREEMENT OF SALE AND PURCHASE
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THIS AGREEMENT OF SALE AND PURCHASE (the "AGREEMENT"), dated as of
November 1, 1996, is made by and between SOUTHMARK SAN XXXX, INC. ("SELLER"), a
Delaware corporation having an address at 0000 XXX Xxxxxxx, Xxxxx 000, Xxxxxx,
Xxxxx 00000, and PUERTO RICO HOTEL OPCO, LLP ("PURCHASER"), a Delaware limited
partnership doing business in Puerto Rico as Puerto Rico Hotel OPCO LLP SE,
having an address at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
DEFINITIONS; SALE AND PURCHASE
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1.01 DEFINITIONS: For the purposes of this Agreement, the following
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terms shall have the meanings indicated:
(a) "BOOKINGS" shall mean contracts or reservations for the use or
occupancy of guest rooms and/or the banquet facilities of the Hotel.
(b) "CLOSING DATE" shall mean the date specified in Section 7.01.
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(c) "CONSUMABLES" shall mean all opened and unopened food and beverages
(alcoholic and non-alcoholic).
(d) "CUT-OFF TIME" shall mean 11:59 p.m. on the date preceding the
Closing Date.
(e) "EFFECTIVE DATE" shall mean the date of this Agreement.
(f) "EXPENDABLES" shall mean all china, glassware, linens, silverware,
kitchen and bar small goods, paper goods, guest supplies, cleaning supplies,
operating supplies, printing, stationery and uniforms, whether in use or held in
reserve storage for future use in connection with the operation of the Hotel.
(g) "FRANCHISE AGREEMENT" shall mean the existing License Agreement with
Xxxxxx Properties, Inc. with respect to the Hotel.
(h) "FURNISHINGS" shall mean all fixtures, furniture, furnishings,
fittings, equipment, machinery, apparatus, appliances, vehicles and other
articles of personal property, which are be owned by Seller and located on or
used or usable in connection with any part of the Hotel, subject to such
deletions, substitutions and replacements as shall occur and be made in the
ordinary course of business prior to the Closing Date in accordance with the
terms and provisions of this Agreement.
(i) "HOTEL" shall mean that certain hotel situated in the City of San
Xxxx, Municipality of Carolina, Commonwealth of Puerto Rico containing 420 rooms
and approximately 321,698 square feet of total building area, four restaurants
with three bars, a show lounge and a 10,400 square foot casino, four meeting
rooms and all related amenities and facilities commonly known and operated as
the "Sands Hotel & Casino."
(j) "HOTEL CONTRACTS" shall mean all assignable service and maintenance
contracts, employment agreements, union contracts, purchase orders, equipment
leases, insurance policies and other contracts or agreements relating to the
maintenance, operation, provisioning or equipping of the Hotel, if any, together
with all related written warranties and guaranties, if any.
(k) "HOTEL EMPLOYEES" shall mean the persons employed by or on behalf of
Seller to maintain, operate and manage the Hotel and to provide services to the
guests of the Hotel.
(l) "IMPROVEMENTS" shall mean the buildings, structures (surface and sub-
surface), installations and other improvements, including such fixtures and
appurtenances as shall constitute real property located on the Land.
(m) "LAND" shall mean the land and all appurtenances thereto, having a
street address at Isla Verde Road 187, San Xxxx, Puerto Rico upon which the
Hotel is situated together with all appurtenances thereto, being those certain
parcels of land located on the Xxxxxxx Xxxx Xxxxx, Xxxx xx Xxx Xxxx,
Xxxxxxxxxxxx of Carolina, Commonwealth of Puerto Rico, as described on Exhibit A
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attached hereto (including both "Parcel A" and "Parcel B") and made a part
hereof for all purposes.
(n) "LEASEHOLD ESTATES" shall mean the following:
(i) Seller's interest, as tenant, in a lease dated January 29, 1987
entered into by and between Xxxxx Xxxxx and Xxxx Xxxxxx xx Xxxxx, as
Landlord, and Puerto Rico Hotel Associates, as Tenant, covering and
pertaining to that certain 1.888 acre parcel of land located opposite the
Hotel, as described on Exhibit A-1 attached hereto and made a part
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hereof, which Ground Lease is filed at Page 125 of Volume 27, Entry 350,
of the Registry of Property of Puerto Rico, a Section of Carolina, as
assigned to Seller pursuant to that certain Deed of Amendment and
Assignment of Lease dated August 8, 1990, filed at Page 125 of Volume 27,
Entry 249, of the Registry of Property of Puerto Rico, a Section of
Carolina; and
(ii) Seller's interest, as tenant, in a lease dated May 29, 1987 with
Coral Beach Condominium, as Landlord, covering that certain parcel of
land consisting of approximately 4,000 square feet located to the west of
the Hotel, more particularly described on Exhibit A-2, attached hereto
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and hereby made a part hereof for all purposes.
(o) "PERMITS" shall mean all transferable licenses, franchise, permits,
certificates of occupancy, authorizations and approvals issued to Seller and
used in or relating to the ownership, occupancy or operation of any part of the
Hotel, including, without limitation, those necessary for the sale and on-
premises consumption of liquor and other alcoholic beverages and the operation
of the casino located in the Hotel, but expressly excluding any Permits which
may not be transferred under applicable laws (it being understood that the
gaming license to operate the casino currently held by the Manager of the Hotel
is expressly not transferable).
(p) "PROPERTY" shall mean, collectively, the Land and Improvements but
expressly excluding the following:
(i) all of the personal property and personal effects and furnishings
belonging to the senior personnel of the Manager of the Hotel set forth
on Exhibit G attached hereto and made a part hereof for all purposes;
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(ii) any rights to the use of the tradename "Sands Hotel" and all
trademarks and other rights relating to such name or the use thereof;
(iii) the right to the use of the tradename "Plaza Club";
(iv) all items of personal property bearing the stamp, imprint,
trademark, tradename, logo or symbol of the Hotel, the tradename "Sands,"
the tradename "Plaza Club," or any combination or derivation thereof and
the gaming chips registered in the name of the casino's operator, bearing
the "Sands" logo.
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1.02 SALE AND PURCHASE. Seller agrees to sell and convey the Hotel,
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Property, Furnishings, Consumables, Expendables, Permits, Leasehold Estates,
Leases (as hereinafter defined), and Hotel Contracts to Purchaser and Purchaser
agrees to purchase and accept the Hotel, Property, Furnishings, Consumables,
Expendables, Permits, Leasehold Estates, Leases, and Hotel Contracts from
Seller, for the price and subject to the terms, covenants, conditions and
provisions set forth in this Agreement.
II.
CONSIDERATION
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2.01 PURCHASE PRICE. The purchase price ("PURCHASE PRICE") to be paid by
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Purchaser to Seller at the closing (the "CLOSING") shall be Twenty Nine Million
Two Hundred Seventy-One Thousand Seven Hundred Sixty-Two and No/100 Dollars
($29,271,762.00) and shall be paid, funded or delivered as follows:
(a) One Hundred Thousand Dollars ($100,000) as an xxxxxxx money deposit
(together with any interest earned thereon, the "XXXXXXX MONEY") within two (2)
business days after the execution and delivery of this Agreement by a check
payable to San Xxxx Abstract Company, 255 Xxxxx XxXxxx Avenue, 000 Xxxxx Xxxx
Xxxxxx, Xxxx Xxx, Xxxxxx Xxxx, 00000, Attention: Xx. Xxxxxxx Xxxxxx, Phone No.:
809/000-0000, Facsimile No.: 809/759-8055 (in its capacity as holder of the
Xxxxxxx Money, the "ESCROW AGENT"). The Xxxxxxx Money shall be held by Escrow
Agent in escrow in an interest-bearing account pursuant to the terms of this
Agreement. If the Closing occurs in accordance with the terms and provisions of
this Agreement, the Xxxxxxx Money shall be paid to Seller at the Closing and
credited against the Purchase Price. If the Closing does not occur, the Xxxxxxx
Money shall be held and delivered as provided in this Agreement;
(b) Thirteen Million One Hundred Fifty-Two Thousand Six Hundred Thirty-
Seven and No/100 Dollars ($13,152,637.00) at the Closing by wire transfer of
good funds to an account to be designated by Seller prior to the Closing;
(c) Fifteen Million Seven Hundred Nineteen Thousand One Hundred Twenty-
Five and No/100th Dollars ($15,719,125.00) at the Closing by delivery to Seller
of all those certain bonds issued by the Puerto Rico Industrial Medical and
Educational Authority in connection with the Hotel listed on Exhibit G attached
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hereto and made a part hereof, the value of which Seller and Purchaser agree is
as set forth in this clause (c); and
(d) Three Hundred Thousand and No/100th Dollars ($300,000.00) at the
Closing by Purchaser delivering such releases as may be necessary to release
Seller and the Property from the mortgage loan made by Banco Popular de Puerto
Rico secured by the Property (the "Banco Popular Mortgage") the value of which
releases Seller and Purchaser agree is as set forth in this clause (d).
2.02 PURCHASE PRICE ALLOCATION; COMPLIANCE WITH INTERNAL REVENUE CODE.
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Seller and Purchaser agree that prior to the expiration of the Inspection Period
they shall use their respective good faith reasonable efforts to jointly
allocate the Purchase Price among the assets to be purchased under the terms of
this Agreement and shall provide to the other party an executed acknowledgment
that such allocation has been approved by each such party. The parties
acknowledge that any such allocation shall be utilized by both parties for
federal income tax purposes. The parties further agree that they shall fully
comply with the requirements of
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Section 1060 of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder relating to allocation rules for certain
applicable asset acquisitions.
III.
SURVEY
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3.01 SURVEY. Promptly after the Effective Date, Seller shall provide to
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Purchaser a copy of any survey or plat of the Land in Seller's possession.
Purchaser shall, at its expense, obtain and deliver to Seller a current survey
(the "SURVEY") of the Property prepared by a licensed Puerto Rican surveyor. The
Survey, which will be certified to Purchaser and Chicago Title Insurance Company
(in its capacity as title insurer, the "TITLE COMPANY") shall conform to the
current standards, requirements and regulations of an ALTA Land Title Survey.
IV.
TITLE INSURANCE
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4.01 TITLE COMMITMENT. Within three (3) days after the Effective Date,
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Seller will at its expense cause the Title Company to deliver to Purchaser an
up-to-date and complete commitment for an ALTA Owner's Policy of Title Insurance
(the "TITLE COMMITMENT") accompanied by a legible copy of all recorded documents
relating to liens, easements, rights-of-way, restriction and other matters
affecting title to the Property.
4.02 TITLE OBJECTIONS. Purchaser shall have five (5) business days from
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the last to be received of the Title Commitment, together with the documents
referenced therein, and the Survey to notify Seller as to any items that are
unsatisfactory to Purchaser in Purchaser's reasonable judgment. Unless Purchaser
so notifies Seller within such five-day period, Purchaser shall be deemed to
have approved the conditions of title to the Property as reflected by the Title
Commitment and the Survey. If within such period Purchaser notifies Seller that
any of the items are unacceptable ("OBJECTIONS"), Seller shall have a period of
thirty (30) days in which to undertake to cure such Objections to Purchaser's
and the Title Company's reasonable satisfaction. If Seller is unable to cure
such Objections, then Purchaser may either (i) accept title to the Property
subject to such Objections or (ii) terminate this Agreement by written notice to
Seller, whereupon the Xxxxxxx Money shall be promptly returned to Purchaser and
the parties shall have no further rights or liabilities under this Agreement.
Purchaser shall make such election by written notice to Seller on or before the
Closing Date or within five (5) days after Seller has advised Purchaser in
writing that it is unable to cure such Objections, whichever occurs first, and
in the event Purchaser does not make such election, Purchaser shall be
conclusively deemed to have accepted title to the Property subject to such
Objections. Those restrictions, liens, encumbrances, easements, rights of way
and other matters as are not objected to by Purchaser in the manner provided in
this Section or which have been consented to in accordance with the preceding
sentence shall be deemed "PERMITTED EXCEPTIONS". Purchaser acknowledges and
agrees that all equipment leases which are being assigned to Purchaser under
this Agreement and any filings made or purported liens held by the lessor with
respect thereto shall be Permitted Exceptions. Seller acknowledges and agrees
that in no event shall the Permitted Exceptions include any mortgage loans
secured by or encumbering the Land, the Improvements or the Leasehold Estates.
4.03 TITLE CONVEYED. Seller shall, on the Closing Date, convey to
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Purchaser good, indefeasible and insurable title to the Land, Improvements and
Leasehold Estates, subject only to the Permitted Exceptions.
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V.
REPRESENTATIONS, WARRANTIES, COVENANTS
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AND CONDITIONS PRECEDENT
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5.01 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
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warrants to Purchaser that:
(a) Seller is a duly organized and validly existing corporation, is in
good standing in the State of Delaware and has full power to enter into this
Agreement and to perform its obligations under this Agreement.
(b) The execution and delivery of this Agreement has been duly authorized
by all necessary and appropriate action of Seller.
(c) No consent or approval of any person, entity, or governmental
authority is required with respect to the execution and delivery of this
Agreement by Seller or the consummation by Seller of the transactions
contemplated thereby or the performance by Seller of its obligations under this
Agreement.
(d) To the best of Seller's actual knowledge, there are no leases or
other similar agreements affecting all or any portion of the Property except
those creating the Leasehold Estates and except as set forth in Exhibit B to
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this Agreement. To the best of Seller's actual knowledge, the lease agreements
creating the Leasehold Estates and all of the leases (the "LEASES") described in
Exhibit B are in full force and effect, there are no material defaults by any
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party thereunder, and true and complete copies of the lease agreements creating
the Leasehold Estates and the Leases and all material correspondence,
instruments and documents related to the Leases have been provided to Purchaser.
(e) To the best of Seller's actual knowledge, there are no Hotel
Contracts or similar agreements affecting the Property except as set forth in
Exhibit C to this Agreement. To the best of Seller's actual knowledge, all of
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the Hotel Contracts and the Franchise Agreement are in full force and effect,
there are no material defaults by any party thereunder, there are not now nor
will there be any brokerage commissions or similar fees payable after Closing in
connection with any of the Leases and true and complete copies of the Hotel
Contracts and the Franchise Agreement and all instruments and documents related
to the Hotel Contracts and the Franchise Agreement have been provided to
Purchaser.
(f) To the best of Seller's actual knowledge, all Permits necessary for
the operation of the Hotel are set forth in Exhibit D to this Agreement and, to
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the extent transferable under applicable law, will be transferred to Purchaser
at the Closing. To the best of Seller's actual knowledge, the Permits are in
full force and effect, Seller has received no notice of any material violations
thereof, and true and complete copies of all of the Permits have been delivered
to Purchaser.
(g) Seller has received no notice of, and, to the best of Seller's actual
knowledge, there are no material violations of, law, ordinances, orders or
regulations ("LAWS") of governmental or quasi-governmental authorities with
respect to the Property (including, without limitation, those related to
environmental, labor or employment matters), which would have a material adverse
effect on the operation of the Hotel.
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(h) To the best of Seller's actual knowledge, there is no litigation,
action, or proceeding pending or threatened relating to the Property or the
transactions contemplated by this Agreement, including, but not limited to,
those alleging the violation of any Laws pertaining to employment or employment
practices, except as disclosed on Exhibit E attached hereto.
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(i) Seller will provide to Purchaser within five (5) business days (i)
true and complete copies of all bills for real estate and personal property
taxes and assessments for the 1996 tax year and the two immediately preceding
tax years and (ii) a true and complete list of the current Hotel Employees
together with a schedule setting forth the compensation and fringe benefits
(including, but not limited to, benefit plans) accorded to such Hotel Employee.
(j) No Hotel Employees are employed under union agreements, collective
bargaining agreements or similar arrangements except as disclosed on Exhibit F
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attached hereto.
(k) Seller owns good and indefeasible title to the Furnishings (other
than those items leased pursuant to equipment leases described in Exhibit C)
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subject only to the Permitted Exceptions.
(l) With the exception of a petroleum fuel storage tank previously
removed from the Property in accordance with applicable law, there are not now
nor during Seller's ownership of the Property, nor to Seller's actual knowledge
have there ever been, any toxic or hazardous wastes or substances used,
generated, stored, treated or disposed of on the Property. Seller hereby
indemnifies Purchaser from and against any loss, liability, claim or expense,
including, without limitation, remediation costs, engineering fees and
reasonable attorneys fees and expenses which Purchaser may incur by reason of
such representation being false.
5.02 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser represents
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and warrants to Seller that:
(a) Purchaser is a duly organized and validly existing limited liability
company, is in good standing in the State of Delaware and has full power to
enter into this Agreement and to perform its obligations under this Agreement.
(b) The execution and delivery of this Agreement has been duly authorized
by all necessary and appropriate action of Purchaser.
(c) All consents and approvals necessary to enable Purchaser to enter
into this Agreement have been obtained by Purchaser.
5.03 SELLER'S COVENANTS. Seller covenants and agrees with Purchaser that
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prior to the Closing:
(a) Seller will use its best efforts and act in good faith to assist
Purchaser and Purchaser's agents in performing their financial and other due
diligence review of the Property.
(b) Seller will not sell, exchange, assign, transfer, convey, lease or
otherwise dispose of all or any part of the Property or any interest therein
except for Furnishings. Consumables and Expendables which are sold or consumed
in the ordinary course of business, and will replace the same with items of
equivalent value and utility in the ordinary course of business.
(c) Seller will keep the lease agreements creating the Leasehold Estates,
the Leases, the Hotel Contracts, the Franchise Agreement and the Permits in full
force and effect, will pay all charges when due under such agreements and will
perform all of its obligations under such agreements.
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(d) Without the prior written consent of Purchaser (which consent shall
not be unreasonably withheld or delayed), Seller will not enter into any
contracts, licenses, easements or other agreements relating to the Property
which will obligate Purchaser or be a charge or lien against the Property,
except those necessary to continue the operation of the Hotel in the ordinary
course of business and which are terminable without penalty on no more than
thirty days notice.
(e) Seller will use its best efforts to cause the Property to be operated
and maintained in the manner in which it is being operated and maintained as of
the date of this Agreement which undertaking includes, but is not limited to,
(i) maintaining Expendables, Furnishings and Consumables in those quantities and
at those levels reasonably equivalent to those present as of the Effective Date,
(ii) entering into Bookings and continuing current advertising and promotional
programs in the ordinary course of business, (iii) collecting accounts
receivable and paying accounts payable and (iv) cleaning, maintaining and
repairing the Hotel.
(f) Seller will permit Purchaser and its representatives to enter upon
and inspect the Property and perform such investigations of the Property and all
applicable books and records as Purchaser may from time to time reasonably deem
desirable; provided, however, that Purchaser must give Seller reasonable prior
notice of any such inspections and investigations and must use good faith
efforts to minimize any interference with the operation of the Property.
(g) Seller or its agents will promptly deliver to Purchaser a copy of any
written communication received prior to Closing which might materially and
adversely affect the operation of the Hotel and will promptly notify Purchaser
upon learning of any fact or condition which might materially and adversely
affect the operation of the Hotel.
(h) Seller will cooperate with Purchaser in all reasonable respects in
connection with Purchaser's application for new liquor licenses necessary for
the operation of the Hotel and a new gaming license necessary for the operation
of the casino.
(i) Seller or its agents will promptly deliver to Purchaser a copy of the
Hotel's customary daily operating report, including, without limitation,
occupancy figures and casino revenues and expenses.
5.04 INSPECTION PERIOD. Purchaser and its representatives and agents
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shall have a period from the Effective Date through the close of business on the
date sixty (60) days after the Effective Date (or, if such date is not a
business day, the next succeeding business day) (the "INSPECTION PERIOD") within
which to undertake such inspections and investigations of the Property
(including, but not limited to, engineering environmental studies, financial
analysis, and feasibility studies) as Purchaser deems desirable to evaluate the
financial and physical condition of the Property and such other matters that
Purchaser may deem relevant, all at Purchaser's cost and expense. If Purchaser
shall, in its sole opinion and discretion, determine that the Property or any
matters related to the Property are unsatisfactory, then Purchaser may terminate
this Agreement by written notice given to Seller prior to the end of the
Inspection Period. Upon the giving of such notice, this Agreement shall
terminate, Escrow Agent shall return the Xxxxxxx Money to Purchaser and neither
party to this Agreement shall thereafter have any further rights or liabilities
under this Agreement. All documents provided to Purchaser by Seller or its
agents during the Inspection Period shall be treated as confidential at all
times prior to the Closing Date and if Purchaser does not purchase the Property,
shall remain confidential by Purchaser after termination of this Agreement (in
any case, subject to disclosure by Purchaser to its principals, officers,
employees, agents, lenders, consultants, attorneys and other professionals in
connection with the transactions set forth herein).
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5.05 CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. Purchaser's
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obligations under this Agreement are conditioned upon the satisfaction of the
following conditions as of the Closing Date:
(a) Seller's representations and warranties set forth in this Agreement
shall continue to be materially true and accurate.
(b) Seller shall have delivered all of the documents required under this
Agreement and performed all of its obligations under this Agreement.
(c) There shall be no liens or judgments, and no material and unpaid
charges, debts, liabilities, claims or obligations, which burden the Property,
other than the Permitted Exceptions.
(d) The Property shall on the Closing Date be in the same condition as on
the last day of the Inspection Period except as attributable to ordinary wear
and tear and depletion of Consumables and Expendables in the ordinary course of
business provided, however, that Consumables and Expendables shall also be
replaced in the ordinary course of business.
(e) There shall have been no material adverse change in the condition or
operations of the Hotel from the last day of the Inspection Period through the
date of Closing.
(f) Purchaser and its designated hotel operator shall have obtained such
liquor, gaming and other licenses, permits, certificates, authorizations and
approvals necessary or appropriate to the ownership, occupancy or operation of
any part of the Hotel, including, without limitation, those necessary for the
sale and on-premises consumption of liquor and other alcoholic beverages and the
operation of the casino located in the Hotel (collectively, the "Non-
Transferable Licenses"), to the extent the same are not being transferred to
Purchaser pursuant to this Agreement. Seller shall cooperate with Purchaser in
attempting to obtain such Non-Transferable Licenses. If Purchaser is unable to
obtain all such Non-Transferable Licenses prior to the Closing Date, Purchaser's
only remedy shall be to adjourn the Closing Date for a period of up to sixty
(60) days in order to attempt to obtain such Non-Transferable Licenses, which
right shall be exercised by giving written notice to Seller not more than five
(5) business days prior to the originally scheduled Closing Date.
If any of the foregoing conditions have not been satisfied as of the
Closing Date (with the exception of the condition set forth in clause (f)
above), then Purchaser shall be entitled to terminate this Agreement by giving
Seller written notice to such effect, whereupon Escrow Agent shall return the
Xxxxxxx Money to Purchaser and the parties shall thereafter have no further
rights or liabilities under this Agreement.
5.06 CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS. Seller's obligations
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under this Agreement are conditioned upon the satisfaction of the following
conditions as of the Closing Date:
(a) Purchaser's representations and warranties set forth in this
Agreement shall continue to be materially true and accurate.
(b) Purchaser shall have substantially performed all of its obligations
under this Agreement.
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VI.
REMEDIES
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6.01 SELLER'S REMEDIES. If Purchaser fails to perform its obligations
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under this Agreement for any reason except (a) the failure of any condition
precedent to Purchaser's obligations under this Agreement or (b) Purchaser's
termination of this Agreement in accordance with its terms, then Seller's sole
remedies shall be: (a) to terminate this Agreement by giving Purchaser written
notice of such election prior to or at Closing whereupon (i) the Escrow Agent
shall promptly pay to Seller the Xxxxxxx Money, and (ii) Purchaser shall pay to
Seller on demand all out-of-pocket costs (including, but not limited to,
reasonable attorney's fees) incurred by Seller in connection with this Agreement
and the transactions contemplated by this Agreement); (b) to waive the default
and close; or (c) to enforce specific performance of this Agreement.
6.02 PURCHASER'S REMEDIES. If Seller fails to perform its obligations
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under this Agreement for any reason except the failure of any condition
precedent to Seller's obligations under this Agreement, then Purchaser's sole
remedies shall be : (a) to terminate this Agreement by giving Seller written
notice of such election prior to or at Closing whereupon (i) the Escrow Agent
shall promptly return to Purchaser the Xxxxxxx Money, and (ii) Seller shall pay
to Purchaser on demand all out-of-pocket costs (including, but not limited to,
due diligence costs and reasonable attorney's fees) incurred by Purchaser in
connection with this Agreement and the transactions contemplated by this
Agreement); (b) to waive the default and close; or (c) to enforce specific
performance of this Agreement.
6.03 ATTORNEY'S FEES. In the event either party hereto is required to
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employ an attorney because of the other party's default, then the non-prevailing
party in such dispute shall pay the prevailing party's reasonable attorney's
fees incurred in the enforcement of this Agreement.
VII.
CLOSING MATTERS
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7.01 CLOSING DATE. The Closing shall be held in Puerto Rico at the
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offices of Purchaser's local counsel or such other location as both Seller and
Purchaser may agree, on December 30, 1996, or such earlier date as Seller and
Purchaser shall determine (the "CLOSING DATE").
7.02 ADJUSTMENT AND PRORATIONS. Seller and Purchaser have agreed that at
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the Closing Purchaser shall acquire the Hotel and the on-going business
conducted at the Hotel. In that regard, there shall be no adjustments or
prorations between Seller and Purchaser upon the Closing Date. Purchaser shall
assume all of the liabilities associated with the on-going operation of the
business at the Hotel (except for any extraordinary liabilities incurred other
than in the ordinary course of business of the Hotel which were not disclosed to
Purchaser prior to closing) and shall be entitled to receive all assets and
receivables and other items of income and revenues, including, without
limitation, prepaid reservations.
7.03 GUEST PROPERTY IN SELLER'S POSSESSION ON CLOSING DATE. Property of
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guests of the Hotel in Seller's care, possession or control (excluding that in
guest rooms) on the Closing Date shall be handled in the following manner:
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(a) Safe Deposit Boxes. On the Closing Date, Seller shall cause notice
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to be sent to all guests of the Hotel who have safe deposit boxes advising them
of the pending sale of the Property and requesting the removal and verification
of the contents of such safe deposit boxes within three (3) days after the
Closing Date. Seller may have a representative present at the Hotel during such
three-day period for the purpose of viewing such removal and verification.
Boxes of guests not responding to the written notice shall be listed at the end
of such three-day period. Such boxes shall be opened on the following day in
the presence of representatives of Seller and Purchaser to be agreed upon
between Seller and Purchaser and the contents thereof shall be recorded. Any
property contained in the safe deposit boxes and so recorded and thereafter
remaining in the hands of Purchaser shall be the responsibility of Purchaser,
and Purchaser hereby agrees to indemnify and save and hold the Seller harmless
from and against any claim or obligation arising out of or with respect to such
property. Any property contained in the safe deposit boxes and not so recorded
and not thereafter remaining in the hands of Purchaser shall be the
responsibility of Seller, and Seller hereby agrees to indemnify and save and
hold the Purchaser harmless from and against any claim or obligation arising out
of or with respect to such property.
(b) Baggage Inventory. All guest baggage checked and left in the
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possession, care and control of Seller shall be listed in an inventory to be
prepared in duplicate and signed by Seller's and Purchaser's representatives on
the Closing Date. Purchaser shall be responsible from and after the Closing
Date for all baggage listed in such inventory, and Purchaser hereby agrees to
indemnify and save and hold the Seller harmless from and against any claim
arising out of or with respect to the baggage listed in the inventory. Seller
shall be responsible for all baggage not listed in such inventory, and Seller
hereby agrees to indemnify and save and hold Purchaser harmless from and against
any claim arising out of or with respect to the baggage not listed in such
inventory.
(c) Other Property. All other guest property left in the possession,
--------------
care or control of Seller prior to the Closing Date shall be returned by Seller
to guests prior to the Closing Date and if not so returned prior to the Closing
Date shall be the sole responsibility of Seller subsequent to the Closing Date.
Seller hereby agrees to indemnify and save and hold Purchaser harmless from and
against any claim arising out of or with respect to any other guest property
left in the possession, care or control of Seller prior to the Closing Date and
not returned by Seller to guests prior to the Closing Date.
7.04 CLOSING DOCUMENTS.
------------------
(a) At Closing, Seller shall deliver or cause to be delivered to
Purchaser the following:
(i) a special warranty deed in recordable form conveying the fee
estate in the Property to Purchaser subject only to the Permitted
Exceptions.
(ii) a special warranty xxxx of sale transferring to Purchaser all of
the Furnishings, Expendables, Consumables and other tangible personal
property (other than those items subject to equipment leases) free of all
encumbrances except for the Permitted Exceptions.
(iii) if available, original executed counterparts of the Leases,
assignable Hotel Contracts and assignable Permits together with an
assignment conveying and transferring to Purchaser all of the Bookings,
the Leases, assignable Hotel Contracts and assignable Permits.
-10-
(iv) an assignment of each of the lease agreements creating the
Leasehold Estates together with such consents or approvals as may be
necessary or appropriate in order to evidence the approval of the
respective landlords thereunder.
(v) possession of the Property.
(vi) a certified copy of such corporate or partnership authorizations,
approvals and incumbencies of Seller as Purchaser or the Title Company
shall reasonable require.
(vii) all books and records relating to the Property and the
Hotel in Seller's possession or in the possession of the Manager of the
Hotel.
(viii) if available and in Seller's possession, copies of all
reports, studies, plans and specifications covering the Property.
(ix) such notices to tenants and estoppel certificates from tenants as
may be reasonably required by Purchaser in order to establish the current
status of the landlord and tenant relationship under the Leases and in
order to notify any tenants of the transfer of the Property from Seller
to Buyer.
(x) an affidavit confirming that Seller is not a "foreign person" as
defined in Section 1445(f)(3) of the Internal Revenue Code, as amended.
(xi) such documents, affidavits and related instruments as the Title
Company shall reasonably require in order to issue an owner's policy of
title insurance to Purchaser.
(b) Purchaser shall deliver or cause to be delivered to Seller the
following:
(i) the balance of the Purchase Price in the manner described in
Section 2.01 above.
------------
(ii) such partnership authorizations, approvals and incumbencies as
Seller or the Title Company shall reasonably require.
(iii) an assumption of the obligations of Seller from and after
the Closing under the Bookings, the lease agreements creating the Ground
Leases, the Leases, assignable Hotel Contracts and assignable Permits.
(iv) such documents as may be necessary to release the lien of the
Banco Popular Mortgage.
7.05 CLOSING COSTS. Seller shall pay one-half of any escrow fees and its
-------------
legal fees out of the cash portion of the Purchase Price. Purchaser shall pay
for its legal fees, all costs of its due diligence investigation under Section
-------
5.04, one-half of any escrow fees, the cost of the Survey, all recording fees,
----
stamp taxes, excise fees, notary fees, mortgage and deed taxes, the costs of any
title policy and all other costs and expenses associated with the closing of the
transaction set forth in this Agreement, provided that Purchaser may select the
notary before whom the documents of transfer will be executed.
-11-
7.06 REAL ESTATE COMMISSIONS. Seller and Purchaser each represent and
-----------------------
warrant to the other that it has no dealings with any broker in the negotiation
of this transaction other than Southmark Corporation, a Georgia corporation (the
"Broker"). Each party agrees to and does hereby indemnify, defend and hold the
other harmless against the payment of any commission to any person or entity
other than Broker claiming by, through or under Seller or Purchaser, as
applicable. At the Closing Purchaser shall pay to Broker a commission in the
amount of $775,000.00 if and only if the Closing shall occur under the terms and
provisions of this Agreement.
7.07 EMPLOYMENT OFFERS. As of the Closing of the transactions
-----------------
contemplated in this Agreement, Purchaser will make employment offers to all
current employees employed by Seller at the Hotel. As of the Closing Date, and
with respect to periods prior to and through the Closing Date and relating to
the Seller's employees, the Seller has paid or made provisions for the payment
of all salaries, accrued wages and benefits, including, but not limited to
bonuses, accrued vacation pay, accrued sick leave, payroll taxes, the Christmas
bonus, and has complied in all material respects with all applicable laws.
Seller agrees to indemnify, hold harmless, and defend Purchaser and its
affiliates from any and all claims, losses, demands, debts, actions, suits from
Seller's employees, known or unknown arising directly or indirectly from their
employment relation with Seller. These claims include, but are not limited to,
claims related to the terms and conditions of, change in, or cessation of
employment, claims based on any allegations of employment discrimination on the
basis of age, sex, color, race, national origin, religious or political beliefs,
disabilities, as well as any claim for salary, vacations, and/or meal periods.
Seller will also indemnify Purchaser from any costs and expenses incurred by
Purchaser in the litigation of these claims (including without limitation,
reasonable attorneys' fees). Purchaser will indemnify, defend, and hold Seller
harmless from and against any loss, damage, liability, claim, cost, or expense
(including without limitation, reasonable attorneys' fees) that may be incurred
by, or asserted against, Seller after Closing which involves any matter relating
to a past or present Hotel employee concerning acts or omissions occurring after
the Closing Date, except any such matters arising out of Seller's actions or
omissions after the Closing Date.
7.08 SURVIVAL. The provisions of Article VII shall survive the Closing.
--------
-12-
VIII.
CONDEMNATION AND RISK OF LOSS
-----------------------------
8.01 CONDEMNATION. If, prior to Closing, any governmental authority or
------------
other entity having condemnation authority shall institute an eminent domain
proceeding or take any steps preliminary thereto (including the giving of any
direct or indirect notice of intent to institute such proceeding) with regard to
the Property and the same is not dismissed on or before ten (10) days prior to
Closing, Purchaser shall be entitled either to terminate this Agreement upon
written notice to Seller or to waive such right of termination and receive all
such condemnation proceeds or an assignment thereof at the Closing. In the event
Purchaser elects to terminate this Agreement under this Section 8.01, Escrow
------------
Agent shall promptly return to Purchaser the Xxxxxxx Money and neither party to
this Agreement shall thereafter have any further rights or obligations
hereunder.
8.02 RISK OF LOSS. Until Closing, Seller shall bear the risk of loss
------------
should there be damage to any of the improvements by fire or other casualty. If
prior to the Closing any of the Improvements shall be damaged by fire or other
casualty, Seller shall take all action reasonably necessary to preserve and
protect the improvements from further loss or damage, and within ten (10)
business days after such loss deliver to Purchaser the following items, to the
extent available (collectively, "CASUALTY LOSS INFORMATION"): (a) copies of all
casualty and business interruption policies relating to the Property; (b) the
names, address and telephone numbers of the adjustors assigned to adjust the
loss; (c) letters addressed to each insurance company issuing a policy covering
such loss and executed by Seller authorizing said company and its adjustors to
discuss all matters relating to such loss with Purchaser, its agents and
attorneys; and (d) a detailed written description of the damages incurred and an
estimate of the cost of restoration.
If the Improvements suffer material damage by a casualty, which, for the
purpose of this Agreement, shall mean damage in excess of $250,000 or damage of
a lesser amount to any area of the Hotel necessary for the day to day operation
of the Hotel that cannot reasonably be expected to be repaired within five (5)
business days, Purchaser may within five (5) days after delivery of the Casualty
Loss Information either:
(a) terminate this Agreement be delivering written notice of same to
Seller, in which event Escrow Agent shall promptly return to Purchaser the
Xxxxxxx Money and neither party to this Agreement shall thereafter have any
further rights or obligations hereunder; or
(b) waive its right of termination, by delivering written notice of same
to Seller, and proceed to close this transaction in accordance with the terms
hereof.
At Closing, (i) all insurance proceeds received prior to Closing shall be
delivered to Purchaser at Closing, (ii) at the option of Purchaser, Purchaser
and Seller shall jointly notify all appropriate insurance companies of its
interest in the insurance proceeds and (iii) all casualty insurance proceeds
payable as a result of the loss and Purchaser's pro rata share of any rental or
business loss proceeds shall be assigned to Purchaser at Closing.
-13-
IX.
MISCELLANEOUS
-------------
9.01 ENTIRE AGREEMENT. This Agreement contains the entire agreement of
----------------
the parties hereto. There are no other agreements, oral or written, and this
Agreement can be amended only by written agreement signed by Seller and
Purchaser.
9.02 BINDING EFFECT. This Agreement shall inure to the benefit of and be
--------------
binding upon the heirs, personal representatives, successors and assigns of each
of the parties to this Agreement. Neither party may assign any of its rights or
obligations hereunder without the written consent of the non-assigning party.
9.03 NOTICES. Any notice, communication, request, reply or advice
-------
(collectively, "NOTICE") provided for or permitted by this Agreement to be made
or accepted by either party must be in writing. Notice may, unless otherwise
provided herein, be given or served by depositing the same in the United States
mail, postage prepaid, registered or certified, and addressed to the party to be
notified, with return receipt requested; or by delivering by overnight courier;
or by facsimile transmission. Notice deposited in the mail in the manner
hereinabove described shall be effective two (2) business days after such
deposit. Notice by overnight courier shall be effective one (1) business day
after deposit with the courier service. Notice by facsimile transmission shall
be effective on the business day delivered. For the purposes of Notice, the
addresses of the parties shall be:
Seller: Southmark San Xxxx, Inc.
c/o Southmark Corporation
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, President
Fax No.: (000) 000-0000
with copy to: Southmark San Xxxx, Inc.
x/x Xxxxxxxxx Xxxxxx Xxxxxxxxxxx
00000 Xxxx Xxxx, Xxxxx 0000
Two Galleria Tower, LB 48
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxx, Corporate Controller
Fax No.: (000) 000-0000
and copy to: Xxxxxx, Xxxxx & XxXxxxxxx, L.L.P.
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Fax No.: (000) 000-0000
-14-
Purchaser: Puerto Rico Hotel Opco, LP SE
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx, Senior Vice President
Fax No.: (000) 000-0000
with copy to: Kramer, Levin, Naftalis & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx, Esq.
Fax No.: (000) 000-0000
The parties shall have the right from time to time to change their respective
addresses for notice by at least two (2) business days' written notice to the
other party.
9.04 GOVERNING LAW. This Agreement shall be construed in accordance with
-------------
the laws of the Commonwealth of Puerto Rico.
9.05 SECTION HEADINGS. The section headings contained in this Agreement
----------------
are for convenience only and shall in no way enlarge or limit the scope or
meaning of the various and several sections of this Agreement.
9.06 OBLIGATIONS. To the extent necessary to carry out the terms and
-----------
provisions of this Agreement, the terms, conditions, warranties,
representations, obligations, indemnities and rights set forth in this Agreement
shall not be terminated at the time of Closing, nor will they merge into the
various documents executed and delivered at the time of Closing.
9.07 COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
9.08 CONFIDENTIALITY. By their execution of this Agreement, Seller and
---------------
Purchaser, their respective agents, employees, officers, shareholders,
directors, successors, independent contractors and permitted assigns hereby
agree to maintain in strict confidentiality, all of the terms, provisions,
agreements and information contained in or referred to in this Agreement,
including any of the exhibits attached hereto and the results of any tests,
surveys, economic feasibility studies, environmental audits and other
information provided to or generated by Purchaser or Seller. The information
to be maintained in strict confidentiality pursuant to the preceding sentence
shall not be disclosed directly or indirectly to any person or entity without
the prior written consent and specific written approval of the other party
hereto. Notwithstanding the foregoing, information may be disclosed to
attorneys, accountants, prospective lenders and their counsel and prospective
equity participants and their counsel if such permitted persons or entities
agree not to further disclose, directly or indirectly, any such confidential
information.
-15-
IN WITNESS WHEREOF, this Agreement has been duly executed in multiple
counterparts by the parties hereto on the date and year first above written.
SELLER:
SOUTHMARK SAN XXXX, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President/Secretary
PURCHASER:
PUERTO RICO HOTEL OPCO, LLP,
a Delaware limited partnership doing
business in Puerto Rico as Puerto Rico
Hotel OPCO LLP SE
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
--------------------------------
Title: Vice President
-------------------------------
-16-
Exhibit A
---------
Legal Description of the Fee Simple Land
----------------------------------------
RURAL: Parcel of land located on the Cangrejos Arriba Xxxx of the
Municipality of Carolina, with an area of TWENTY THREE THOUSAND ONE HUNDRED
THIRTY POINT EIGHT THOUSAND FOUR HUNDRED SIX SQUARE METERS (23,130.8406 sq.
mt.); with boundaries on the North, with the maritime zone of the Atlantic
Ocean; on the South, with property of Xxxx Xxxx; on the East, with properties of
San Xxxx Hotel Corporation; of Xxxx Xxxxxx Mundo and Xxxxxxx Xxxxxxx Xxxx; on
the West, with properties of Caribbean Resorts Corporation, and of spouses
Xxxxxx Xxxxx Xxxxxxx. State Road Number One Hundred Eighty Seven (187) runs
from East to West through this property.
On this property there is a fourteen (14) story building, with swimming pool
facilities, two (2) story cabins and paved parking.
Property number 18,276 recorded at page 122 overleaf of volume 750 of
Carolina, Registry of Property of Carolina, First Section.
EXHIBIT A - Solo Page
---------
Exhibit A-I
-----------
Legal Description of Ground Lease
---------------------------------
GROUND LEASE:
Urban: Parcel of land located in the Cangrejo Arriba Xxxx of the Municipality
of Carolina, with an area of seven thousand eight hundred sixty square meters
and seventy eight hundredths of another. Bounded on the North, in fifty meters
with the road which goes from Santurce to Carolina; on the South, in fifty seven
meters and fifty nine centimeters with property of Xxxxxxx Xxxxxx, before
Xxxxxxx Xxxxxxxxxx; on the East, in one hundred ninety three meters with the
remaining of the property from which it was segregated owned by Xxxxxxx Xxxxxxx
Xxxx; and on the West, in one hundred forty four meters and ninety centimeters
with property of Xxxxxxx de Xxxxx.
From the above-described property two segregations have been made, one of one
hundred ninety three point seventy seven (193.77) square meters and the other of
forty nine point fifty seven (49.57) square meters, without the remnant parcel
being described.
On this property there is also a concrete house and a garage, one shack of
bricks and wood and a zinc roof and wood house for dwelling with a zinc roof,
two paint mixers, five ball xxxxx, a xxxxx mill, a two hundred twenty five (225)
gallon shaker and a dry blender. There is also a concrete house with four
apartments for dwelling, a cottage of bricks and wood with a zinc roof for
warehousing and living quarters, a wood house with a zinc roof and a concrete
brick building devoted to restaurant and night club.
Property number 29,148 (formerly property number 2,082), recorded at page 15
of volume 574 of Carolina, Registry of Property of Carolina, First Section.
The Ground Lease is recorded in favor of Southmark San Xxxx, Inc. at page
20(r) of volume 574 of Carolina, Registry of Property of Carolina, First
Section, 13th inscription.
EXHIBIT A - Solo Page
---------
Exhibit A-2
-----------
Legal Description of Ground Lease
---------------------------------
LEASED PARCEL:
Parcel of land with an irregular trapezoidal shape with an area of three
hundred sixty seven square meters with sixty seven hundredths of another (367.67
sq. mt.) with the following boundaries; on the North, in a distance of 3.354
meters with the Maritime Zone of the Atlantic Ocean; on the South, in a distance
of 1.499 meters, with State Road Number 187; on the East, in a distance of
153.451 meters, with the Sands Hotel & Casino Property; and on the West, in
seven (7) different alignments in a total distance of 153.624 meters, with the
main tract of land of which this parcel forms part of, and which is owned by
Coral Beach Condominium.
The above described parcel is part of the following property which is
described in the Registry of Property as:
URBAN: Parcel of land of regular shape located on the Cangrejos Arriba Xxxx
of Carolina, with an area of sixteen thousand three hundred fifty square meters
and thirty nine hundredths of another; with boundaries on the North, with the
Paseo de la Playa avenue, the Atlantic Drive, in a distance of one hundred
fourteen point nine hundred eighty seven lineal meters; on the South, in three
different and broken alignments which total one hundred eight point nine hundred
fifty two lineal meters, with State Road Number One Hundred Eighty Seven; on the
East, in a distance of one hundred sixty two point five hundred forty lineal
meters, with property owned by Americana de Rico, Inc., Hotel Americana; and on
the West, in two continuous and broken alignments which total thirty three point
two hundred eleven lineal meters with Street One, before, now Boulevard Street.
Property number does not appear in the lease with Coral Beach Condominium,
recorded at page 31 overleaf of volume 437 of Carolina, Registry of Property of
Puerto Rico.
The lease is not recorded in the Registry of Property.
EXHIBIT A - Solo Page
---------
Exhibit B
---------
Tenant Leases
-------------
Tenant Lease Date Expiration Date Business
--------------------------------- ---------- ---------------- --------------------
1. Calypso Water Sports 05/09/93 11/30/99 Clothing Accessories
2. Xxxxxxxx Water Sports Inc. 03/05/93 11/30/97 Water Sports
3. Edouard De Paris Beauty Salon 04/01/93 11/30/97 Beauty Salon
4. Xxxxxxxx Jewelers 03/05/93 11/30/97 Jeweler
5. X.X. Xxxxx of P.R. Inc. 06/11/93 09/15/98 Sundry Shop
6. American Parking 10/08/87 M-M Parking management
7. II Giardino Inc. 06/26/92 12/31/97 Restaurant
8. International Arcade 12/01/95 11/30/98 Game Room
9. Xxxx'x Xxxxx Steak House 11/12/93 02/28/2004 Restaurant
10. Charlie Rental Car 07/01/89 M-M Car Rental
11. Travel With Xxxx 12/01/92 M-M Travel Agent
12. Xxxxxxx & Xxxxx Xxxxxxxxx
The Souvenir Shop 12/01/92 M-M Souvenirs
Variety Shop 12/01/92 M-M Varieties
Liquor Shop 12/01/92 M-M Liquor Store
13. La Fusta Hotel 08/07/85 Five-year renewal Hotel/Restaurant
under negotiation
14. Mi Capita Express 02/01/96 08/31/97 Restaurant
EXHIBIT B - SOLO PAGE
---------
Exhibit C
---------
Hotel Contracts
---------------
Leased Equipment
----------------
Lesser Beginning Date Term Equipment Type
--------- -------------- ------ --------------
1. El Camino Resources 01/01/95 24 mo. Computer System (P.M.S)
2. Oriental Leasing 07/01/94 36 mo. Casino coin wrapping machine
3. Oriental Leasing 10/01/94 36 mo. Executive Offices copy machine
4. Capital Leasing source corporation 07/01/94 48 mo. Accounting Office copy machine
5. Xerox corporation 07/12/95 36 mo. Fax Machine
6. Xerox corporation 05/01/96 36 mo. Sales Office copy machine
7. Oriental Leasing 09/01/95 60 mo. Call accounting system
Employment Contracts and Agreements
-----------------------------------
Employee Beginning Date Term Type of Agreement
-------- -------------- ------ --------------------
Xxxxxxx X. Xxxxx 12/01/95 24 mo. Employment Agreement
Xxxxxxxxx X. Xxxxxx 09/15/91 N/A Employment Letter
Xxxxxx Xxxxx 01/10/95 N/A Letter Agreement
EXHIBIT C - SOLO PAGE
---------
Exhibit C (continued)
----------------------
Service Contracts
-----------------
1. Stage Crew Audio Visual Services
2. Xxxxxxxx Water Sports Pool Maintenance Services
3. Michro Tech Food & Beverage POS Maintenance
4. Xxxxx Fargo Armored Car Service
6. I.B.M. Property computer system maintenance
7. Caribbean Airport Facilities Outside Storage Services
8. Telecable de Puerto Rico In Room Cable T.V.
9. Interboro Time Clocks (2) Maintenance
10. Spectradine In Room Movies Pay T.V.
11. Spectradine In Room Movies Premium Channels
12. Xxxxx Chemical Ind. Water Treatment
13. Xxxx Elevators Elevators Maintenance
14. B.F.I. Waste Removal
15. Trane Air Conditioning Maintenance
16. Master Maintenance Cleaning Services
17. Landscape Contractors Grounds & Landscaping
18. Antoine de Puerto Rico Dry Cleaning Services
19. Exterminators Extraordinary Exterminating Services
20. Top Furniture Carpet Maintenance
21. Country Club Window Cleaning Window Cleaning Services
22. Glory Inc. Coin Wrapping Machine Maintenance
23. Xerox Corporation Copy Machine Maintenance
24. Kodak Caribbean Copy Machine Maintenance
25. Cortelco Puerto Rico Inc. Call Accounting System Maintenance
26. Electro Servicios Especializados Emergency Plant Maintenance
27. Ecolab Manufacturing Inc. Dishwashing Machine Maintenance
28. La Montana Inc. Water coolers
29. Gestetner Corporation Copy Machine Maintenance
30. Systronics Inc. Copy Machine Maintenance
EXHIBIT D - SOLO PAGE
---------
Exhibit D
---------
Licenses, Permits and Bonds
---------------------------
1. Casino License
2. Tucanos Restaurant/Room Service Health Permit
3. Pool Bar Health Permit
4. Players Lounge Health Permit
5. Tucanos Restaurant/Room Service Liquor License
6. Pool Bar Liquor License
7. Players Lounge Liquor License
8. Municipal; Permit "Patente Municipal" - Volume Tax
9. Use Permit
10. Tax Exemption Government Resolution
11. Consumer Affairs Department Parking Operation Permit
12. Workmen Compensation Insurance Policy
13. Fire Department License
14. Puerto Rico Electric Power Company bond
15. Puerto Rico Aqueduct and Sewer Authority bond
16. Casino Gaming bond
17. Room Tax Authority (Secretario de Hacienda) bond
EXHIBIT D - SOLO PAGE
---------
Exhibit E
---------
Litigation and Pending Claims
-----------------------------
Litigation
----------
Jurisdiction Case # Plaintiff
------------------------------------- ------------------ ----------------------
U.S. District Court for the 392-37413-HCA-11 Xxxxx Xxxxxxxx Xxxx
Northern District of Texas
U.S. District Court for the
Southern District of New York 96-CIV-835 International Recovery
System and National
Recovery Systems
Tribunal De Primera Instancia -
Carolina
Xxxxx Xxxxxx Civil #96-1116 Unjustified Discharge
Xxxxx Xxxx Xxxxxxxx Civil #94-257 Not Insured Employer
Fondo del Seguro del Estado
Xxx Xxxxxxx Civil #FDP96-0207 Damages
Tribulan De Primera Instancia -
San Xxxx
Xxxx X. Xxxxxxx Civil #96-2485 Unjustified Discharge
U.S. District Court for Puerto Rico
Xx Xxxxxxxx Civil #95-1992 (HL) Jury Trial
(Origin Discrimination)
Puerto Rico Labor Department
Xxxxx X. Xxxxxx A1D1DP65-96 (Severance)
Puerto Rico Labor Department
Anti-Discrimination Unit
Xxxxxxxx Xxxxxx 16H960121 (Maternity)
EXHIBIT E - SOLO PAGE
---------
Exhibit E
---------
Litigation and Pending Claims
-----------------------------
Litigation
----------
Jurisdiction Case # Plaintiff
------------ ------ ---------
National Labor Relations Board
Pending Cases:
Xxxxxx Xxxxxx 24-CA-7466 Unfair Labor Practice
Xxxxxxxxx Xxxxxxx 24-CA-7531 Unfair Labor Practice
The Union (Local 610) 24-RC-7742
Filed Objections to the election
In P.R. the Sands has filed an
appeal to the NLRB in
Washington, D.C. *
The Union (Local 610) 24-CA-7234
Appealed to Washington the 24-CA-7254
decertification of the Casino
* On October 31, 1996, the NLRB ordered the hotel to hold a new election to
determine if the employees wish to join Local 610.
EXHIBIT E - SOLO PAGE
---------
EXHIBIT E (CONTINUED)
PENDING INSURANCE CLAIMS
Location/Injury
File Number File Type Claimant Date/Loss Date/Opened Description of Loss Description
--------------------------- --------- ----------------------- --------- ----------- -------------------- ---------------------
OCC47888 BI Xxxxxxxxx, Xxxx 07/31/91 08/20/91 Cut Foot in Pool Pool/Left Foot
OCC51053 BI Xxxxxx, Xxxx 08/23/93 08/31/93 Slipped on Floor Players Lounge/R Knee
OCC51075 BI Xxxxxxxxx, Xxxxxx 08/15/92 09/09/93 Jet Ski Accident Ocean/Deceased
OCC51717 BI Xxxxx, Xxxxxx 02/26/94 03/08/94 Fell on Casino Steps Casino Steps/L
Ankle, Knee, Back
Shoulder
OCC51915 BI Rodriguez-Lesbia, Xxxxx 04/04/94 04/22/94 Trip & Fall Marketing Office/R
Hand, Elbow, L Arm,
Jaw
OCC51983 BI Xxxxxxxx, Xxxxxx 02/09/94 05/16/94 Fell in Lobby Xxxxx Xxxxx/Xxxx
XXX00000 BI Xxxxxxx, Xxxxxx 07/12/94 08/01/94 Fell in Lobby Tripped in Lower
Lobby/FX Foot
OCC52303 BI Xxxxxx, Xxxxxx X. III 2/07/93 08/24/94 Food Poisoning Toscano's/Food
Poisoning
OCC52459 BI Xxxxx-Horrez, Giselle 10/02/94 10/20/94 Fell on Bricks on Handicap Ramp/Knees
the Handicap Ramp R. Hand, Thumb
Disloc.
OCC52703 BI Xxxxxxxx, Xxxxxxx 01/28/95 03/03/95 Slip & Fall Pool Area/Left Knee
OCC52866 BI Xxxxxxxxxxx, Xxxx 04/23/95 05/30/95 Tree Branch Fell on Poolside/Back of Neck
Xxxx/Xxxx Xxxx
XXX00000 BI Strazadas, Xxxxx 05/15/95 05/30/95 Slipped Coming Out Pool/Right Knee,
of Pool/Ladder Xxxx Xxx
XXX00000 BI Xxxxxxx, Xxxxxxx 10/24/94 06/06/95 Alleged Fall in Elevator/Lower Back
Elevator
OCC52964 BI Xxxxxx, Xxxxxx 05/02/95 07/07/95 Fell Off Slot Stool Casino Floor
in Casino Slots/Neck & Left Arm
OCC53096 BI Xxxxxx-Xxxxxx, Xxxxxx 07/09/94 08/09/95 Fell in Bathroom Hotel Room/Back and
Rib Cage
OCC53144 BI Bazar Xxxxxx, Xxxx 06/23/95 08/23/95 Slipped on Leaves Pool Area/L. Ankle,
Near Pool R. Shoulder
OCC53176 BI Xxxxxx, Xxxxx 06/06/95 09/06/95 Fell Down Stairs Stairs/Twisted Foot
and Twisted Foot
OCC53192 BI Xxxxxxxx, Xxx 08/19/95 09/13/95 Cut Chin in Bathroom Guest Room 0000/Xxx
Xxxx & Xxxxxx Xxxx
XXX00000 BI Xxxxxxxx-Xxxxx, Xxxxx 08/19/95 09/27/95 Fell Ballroom X/Xxxx Xxxxx
XXX00000 BI Xxxxxxx, Xxxxx 09/23/95 09/27/95 Ball From Roulette Casino Floor/Mouth
Hit Claimant M
OCC53246 BI Xxxxxx, Xxxxxxx 08/26/95 10/08/95 Fell on Xxx Xxxxx Xxxxxxxxx/Xxxx, Xxxxx
XXX00000 BI Xxxxx, Xxxxxxx 10/06/95 10/16/95 Hit by Coconut in Pool Area/Shoulder
Xxxx Xxxx
XXX00000 BI Xxxxxx, Xxxx Xxx 10/12/95 11/13/95 Slip and Fall Casino Entrance
Steps/Knees
OCC53462 BI Xxxxx, Xxxxx 11/25/95 01/02/96 Slipped on Edge of Pool Area/Head, R.
Pool Arm, L. Finger
OCC53463 BI Xxxxx, Xxxxxxx 12/10/95 01/02/95 Slip and Fall Room 906/Right Arm,
Hip & Back
OCC53464 BI Xxxxx, Xxxxxxx 11/12/95 01/02/96 Tripped at Pool Pool Area/Back
OCC53573 PD Xxxxx, Xxxxxxx & Xxxxxx l07/18/95 01/24/96 Sprinkler System Guest Room
Flooded Room 817/Property Damage
OCC53701 BI Xxxxx, Xxxxxxxx 02/03/96 02/09/96 Palm Tree Fell on Outside Pool/Right
Head Side of Head
OCC53702 BI Xxxx, Xxxxxx 02/03/96 02/09/96 Palm Tree Bark Fell Pool Area/Right Leg
on Her Leg
OCC53847 BI Xxxxxx, Xxxxxxx 10/15/95 03/15/96 Fell in Bathroom Bathroom/Right Foot
Twisted
OCC53870 BI Xxxxx-Xxxxxxxx, Xxxxxxx 02/24/96 03/22/96 Bumped by Food Cart Plazoleta/Rt. Hand,
Chest
OCC53975 BI Xxxxxxxx, Xxxxx 03/25/96 04/25/96 Alleged Guest Room
"Legionnaires 316/Legionnaires
Disease" Disease
OCC54094 BI Xxxxxxxx, Xxxxxx 03/17/96 06/05/96 Elevator Doors Freight Elevator
Closed on Claimant Doors Hit
Claimant/Rt Arm
OCC54165 BI Xxxx, Xxx Xxxxxx 12/30/95 07/03/96 Fall Steps/Fracture
Of
OCC54205 BI Xxxxxxx, Xxxx 07/03/96 07/11/96 Fell on Steps Xxxxx/Xxxxxxxx
XXX00000 BI Xxxxxxx, Xxxxx 07/04/96 07/26/96 Fell in Bathtub Guest Room 000/Xxxx
Xxxx Xxxxxxx
XXX00000 BI Xxxxxx, Xxxxx 05/31/96 07/26/96 Slip in Bathtub Guest Room 724/Face,
Left Knee
OCC54318 BI Xxxxxx Xxxxxxx, Xxxxx 07/30/96 08/13/96 Fell Out of Shower, Guest Xxxx 0000/Xxxx
No Mat Foot & Knee, Body
OCC54319 PD Xxxx, Xxxxxxx et al 07/06/96 08/13/96 Bags Were Stolen Xxxx Captain Area/
and Recovered Bags Stolen
OCC54391 BI Xxxx-Xxxx, Xxxxxxx 08/24/96 09/06/96 Piece of Glass in Tucano/Cut Mouth
Food With Piece of Glass
OCC54396 BI Xxxx-Xxxxxxxxx, Xxxxxx 08/09/96 09/09/96 Twisted Right Ankle Casino Area/Right
Ankle & Right Hip
OCC54427 BI Xxxxxxxx, Xxxxx 06/24/96 09/19/96 Slip & Fall Main Lobby/Right
Leg, Right Ankle
OCC54428 XX Xxxxxxxx-Xxxx, Xxxxxxx 08/11/96 09/19/96 Luggage Stolen Main Lobby/Stolen
Luggage
Exhibit F
---------
Status of Union and Collective Bargaining Agreements
----------------------------------------------------
. In February 1994, approximately 30 permanent dealers, of the Sands San Xxxx
Casino department, voted to become part of Gastronomical Workers union,
Local 610 HEREIN, AFLCIO (the Union), however, in August 1995 the Sands
Hotel Casino (the Company) received written notification, from the attorney
representing a majority of the casino permanent dealers, which stated that
they no longer wanted to be represented by the Union. As a result, the
Company has withdrawn from negotiations with the Union in regards to the
casino department employees.
The Union rejected, the notification from the Company and filed a case with
the San Xxxx Office of the N.L.R.B. The San Xxxx Office of the N.L.R.B.
ruled in favor of the Company upholding the company's negotiations
withdrawal. The Union appealed the decision to the N.L.R.B. in Washington.
The appeal is still pending.
. On October 11, 1995 a union representation election was held on behalf of
approximately 150 hourly employees of the Food and Beverage, Housekeeping,
Engineering and Xxxx Staff departments. The employees rejected the Union
representation but the Union challenged the voting qualifications of
several employees in a petition to the San Xxxx Offices of the National
Labor Relations Board ("NLRB"). In addition the Union filed several unfair
labor practice claims against the management. The San Xxxx Office of the
N.L.R.B. ruled in favor of the union petition for both counts, whereupon
the Company filed an appeal with the N.L.R.B. in Washington. The appeal is
still pending.
EXHIBIT F - SOLO PAGE
---------
Exhibit G
---------
Excluded Personal Property and Personal Effects
-----------------------------------------------
GENERAL MANAGER'S ITEM:
-----------------------
All items in the General Manager's Suite #1609/#1607 is the property of the
General Manager with the exception of the following:
1. Bedroom case goods in both bedrooms
2. Dining room set
3. Leather sofa bed
4. Table and two (2) matching chairs in den
5. All lamps
6. Coffee tables and end tables
7. Console TV in suite #1609
8. TV in suite #1607
Note: The Mitsubishi TV in suite #1609 is property of the General Manager.
All items in the General Manager's office is property of the hotel with the
exception of the following:
1. All wall accessories
2. Sony stereo system and related tapes, CD's, etc.
3. Xxxxxx-Xxxx speakers
4. Large black swivel office chair
5. Professional manuals, i.e. Hospitality Industry guides, Flagship
Hospitality Corporation, etc.
6. Personal knick-knacks, calculator, office supplies, etc.
VICE PRESIDENT'S OFFICE:
------------------------
All items in the Vice President's office are property of the hotel with the
exception of the following:
1. All wall accessories
2. Professional manuals, i.e. Hospitality Industry guides etc.
3. Personal knick-knacks, lamps, calculator, office supplies.
EXHIBIT G - SOLO PAGE
---------
CONTROLLER'S OFFICE:
--------------------
All items in the Controller's offices are property of the hotel with the
exception of the following:
1. All wall accessories
2. Sony CFD 440 stereo system and related tapes, CD's, etc.
3. Magnavox Metalif/SX Notebook computer
4. Professional manuals, i.e. Hospitality Industry guides, books, etc.
5. Personal knick-knacks, lamps, calculator, office supplies, etc.
