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EXHIBIT 10.34
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ASSET PURCHASE AGREEMENT
by and between
SUNSTONE HOTELS, LLC, a Delaware
limited liability company,
and
SUNSTONE HOTEL PROPERTIES, INC.,
a Colorado corporation
Dated: October 14, 1997
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ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
Page
ARTICLE I - PURCHASE AND SALE OF ASSETS AND TRANSFER OF EMPLOYEES............................................... 1
1.1 Purchased Assets.......................................................................... 1
1.2 Transfer of Employees..................................................................... 2
ARTICLE II - ASSUMED LIABILITIES................................................................................ 3
2.1 Assumed Liabilities....................................................................... 3
ARTICLE III - FUNDING AND CLOSING............................................................................... 3
3.1 Funding and Adjustments................................................................... 3
3.2 Closing and Effective Time................................................................ 4
3.3 Closing Deliveries........................................................................ 4
3.4 Post-Closing Deliveries................................................................... 5
3.5 Transfer Taxes and Fees................................................................... 5
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF SELLER........................................................... 5
4.1 Authority of Seller Relative to Agreement................................................. 5
4.2 No Conflicts.............................................................................. 5
4.3 Consents.................................................................................. 5
4.4 Pass-Through of Xxxxxxxxx Representations and Warranties.................................. 6
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF BUYER............................................................. 6
5.1 Authority of Seller Relative to Agreement................................................. 6
5.2 No Conflicts.............................................................................. 6
5.3 Consents.................................................................................. 6
ARTICLE VI - SURVIVAL; INDEMNIFICATION.......................................................................... 6
6.1 Indemnification by Seller................................................................. 6
6.2 Indemnification by Buyer.................................................................. 7
ARTICLE VII - MISCELLANEOUS..................................................................................... 7
7.1 Further Assurances........................................................................ 7
7.2 Assignment................................................................................ 7
7.3 Notices................................................................................... 7
7.4 Governing Law............................................................................. 8
7.5 Entire Agreement; Modifications and Waivers............................................... 8
7.6 Counterparts.............................................................................. 9
7.7 Expenses.................................................................................. 9
7.8 Invalidity................................................................................ 9
7.9 Titles.................................................................................... 9
7.10 No Third-Party Beneficiaries.............................................................. 9
7.11 Construction.............................................................................. 9
7.12 Execution................................................................................. 9
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TABLE OF CONTENTS
(CONTINUED)
Schedules:
Schedule 1.1(a) Management and Concession Contracts and Cheat Interest
Schedule 1.1(b) Current Assets and Liabilities
Schedule 1.1(d) Employee Benefit Plans and Agreements
Exhibit:
Exhibit A Hotels
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EXHIBIT 10.34
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), is entered
into as of October 14, 1997, by and between Sunstone Hotels, LLC, a Delaware
limited liability company ("Seller") and Sunstone Hotel Properties, Inc., a
Colorado corporation ("Buyer").
R E C I T A L S
A. In connection with the acquisition (the "Xxxxxx
Acquisition") by Sunstone Hotel Investors, Inc. ("Sunstone, Inc.") of all of the
capital stock of Xxxxxx Realty Corporation, a Minnesota corporation ("Xxxxxx")
from Xxxxxxxxx Real Estate Fund I, L.P. and Xxxxxxxxx Real Estate Co-Investment
Partnership I, L.P. (collectively, "Xxxxxxxxx"), Seller, through the merger of
certain of Xxxxxx'x subsidiaries with and into Seller, now owns certain of the
assets and has assumed related liabilities of Xxxxxx and its subsidiaries,
including (i) the hotels listed in Part I of Exhibit A (the "Hotels"), (ii) the
Salt Lake City, Utah and Rochester, Minnesota industrial laundry businesses (the
"Laundries"), (iii) all of the capital stock of Lakeview of Rochester, Inc. (the
"Lakeview Stock"), a Minnesota corporation that owns an 80% interest in Cheat
Progressive Venture, a joint venture that owns a sewer plant in Morgantown, West
Virginia (the "Sewer Plant"), and (iv) the rights and obligations of the manager
under certain contracts pursuant to which subsidiaries of Xxxxxx managed
properties or property owners' associations, and operated concessions at two
public venues (the "Management and Concession Contracts"). In addition, Seller
has assumed through such mergers, a portion of the workforce of Xxxxxx'x
subsidiaries and employer liabilities, including as sponsor of certain employee
benefit plans.
B. In order for Sunstone, Inc. to qualify as a real estate
investment trust under the Internal Revenue Code of 1986, as amended, and for
the mutual benefit of Sunstone, Inc. and Buyer, immediately following the Xxxxxx
Acquisition, Seller will enter into leases with Buyer, pursuant to which Buyer
will lease from Seller and operate the Hotels and Laundries. In addition, Buyer
will assume from Seller the rights and obligations of the manager under the
Management and Concession Contracts, and will purchase from Seller the Lakeview
Stock.
C. Immediately prior to the Xxxxxx Acquisition, Buyer desires
to purchase and assume from Seller, and Seller desires to sell and transfer to
Buyer the Employees and Employee Liabilities and such licenses, permits,
inventory, contract rights and other assets and related liabilities as are
necessary or beneficial in operating the Hotels, Laundries and Sewer Plant
(collectively, the "Facilities") and performing the services of manager under
the Management and Concession Contracts.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS AND TRANSFER OF EMPLOYEES
1.1 Purchased Assets. At the Closing (as defined in Section
3.2 hereof) of the transactions contemplated by this Agreement, Seller shall
sell, transfer, assign, convey and deliver to Buyer, and Buyer shall purchase
from Seller, all right, title and interest of Seller in and to the "Purchased
Assets," which consist of the following:
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(a) Management and Concession Contracts. The
Management and Concession Contracts listed on Schedule 1.1(a).
(b) Lakeview Stock. The Lakeview Stock identified on
Schedule 1.1(a).
(c) Operating Assets, Contracts and Permits. The
governmental licenses and permits, contract rights (including service contracts
and equipment leases) and all other operating assets and rights related to the
use, maintenance or operation of the Facilities and performance of the
Management Contracts, including the current assets identified on Schedule
1.1(b). In addition, the inventory related to the use, maintenance or operation
of the Facilities and performance of the Management and Concession Contracts
shall be transferred hereby to the Buyer at the Effective Time (as defined
herein) as required by the terms of the leases between Buyer and Seller.
(d) Employee Benefit Plans. The employee benefit
plans and employment agreements listed on Schedule 1.1(d) and related cash, bank
accounts and other assets maintained by Xxxxxx for purposes of funding such
plans (collectively, the "Employee Benefit Plans and Agreements").
(e) Books, Records and Intellectual Property. All
books, records, trademarks, tradenames, logos, copyrights, good will,
specifications, files, computer software, computer programs, computerized
records, warranties, guaranties, leases, agreements and other documents and
information maintained in any form in any way relating to the use, maintenance
or operation of the Facilities or the performance of the Management and
Concession Contacts (collectively, the "Intellectual Property");
(f) Third Party Claims. Any and all claims against
unrelated third parties relating to or arising from the ownership, use,
maintenance or operation of the Facilities or the performance of the Management
and Concession Contacts, including, without limitation, all accounts receivable
and claims or rights to any property tax refunds (collectively, the "Third Party
Claims");
(g) Deposits. All leases and rents, room deposits,
banquet, meeting and other function deposits and other similar deposits and all
advance bookings relating to the Facilities or the Management and Concession
Contracts, including all such deposits as one listed on Schedule 1.1(b)
(collectively, the "Deposits"); and
(h) Accounts. All reserves, operating and other
accounts maintained in connection with the use, maintenance or operation of the
Facilities or the performance of the Management and Concession Contacts
(collectively, the "Accounts"), including those identified on Schedule 1.1(b).
Notwithstanding the foregoing, the Purchased Assets shall not
include any furniture, fixtures or equipment located at the Facilities and owned
by Seller.
1.2 Transfer of Employees. At the Closing, Seller shall
transfer to Buyer the employees of Xxxxxx who perform functions related to the
operation of the Facilities and performance of the Management and Concession
Contracts whom the Buyer has determined to hire and who are listed in the
payroll records of Buyer maintained by ADP payroll services as becoming
employees of Buyer after the date hereof (collectively, the "Employees").
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ARTICLE II
ASSUMED LIABILITIES
2.1 Assumed Liabilities. As of the Closing, Buyer hereby
agrees to assume, satisfy or perform when only the following specific
liabilities and obligations of Seller existing as of the Closing related to the
Purchased Assets (collectively, the "Assumed Liabilities"):
(a) Current Liabilities. The current liabilities
listed on Schedule 1.1(a) related to the Facilities, Management and Concession
Contracts, Employees and Employee Benefits and Agreements (the "Current
Liabilities").
(b) Contract and Permit Liabilities. All duties and
obligations of Seller (in addition to those covered by the Current Liabilities)
under the Management and Concession Contracts, and all other contracts and
governmental licenses and permits included in the Purchased Assets being
transferred and assigned to Buyer.
(c) Employment Liabilities. All duties and
obligations (in addition to those covered by Current Liabilities) of Seller as
to accrued and future wages and benefits of the Employees, including wages and
benefits under the Employee Benefit Plans and Agreements.
(d) Liabilities Related to Intellectual Property. All
liabilities associated with the Intellectual Property arising from events
occurring after the Effective Time.
(e) Liabilities Related to Third Party Claims. All
liabilities related to the Third Party Claims arising from events occurring
after the Effective Time.
(f) Liabilities Related to Deposits and Accounts. All
liabilities (in addition covered by the Current Liabilities) related to the
Deposits and the Accounts arising from events occurring after the Effective
Time.
(g) Sewer Plant Liabilities. All liabilities (in
addition to those covered by Current Liabilities) related to or arising from the
Sewer Plant arising from events occurring after the Effective Time.
Nothing in this Section 2.1 or elsewhere in this
Agreement shall be construed to require that, after the transfer of the Assumed
Liabilities to the Buyer, Buyer retain any of the Employees, Employee Benefit
Plans and Agreements, Management and Concession Contracts or any of the other
Purchased Assets being transferred to Buyer hereunder. Any liabilities and
obligations of Seller existing as of the Closing related to the Purchased Assets
and not listed above are retained by Seller.
ARTICLE III
FUNDING AND CLOSING
3.1 Funding and Adjustments.
(a) Closing Funding. Immediately following the
Closing, Seller shall pay to Buyer $1,069,701 in cash, which represents the
estimated $3,676,829 in current liabilities as of the Closing to be assumed by
Buyer hereunder related to the hotels listed in Parts I and II of Exhibit A and
the Laundries, minus the $1,325,000 agreed value of the assets transferred
hereby as set forth on
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Schedule 1.1(a), minus the $1,282,128 Union Annuity liability set forth as item
226 on the last page of Schedule 1.1(b). Promptly following October 15, 1998,
Buyer and Seller shall agree upon the actual liabilities funded by Buyer during
such period if actual liabilities funded exceeded $2,351,829, the excess shall
promptly be paid by Seller to Buyer. If liabilities funded were less than
$2,351,829, the difference shall promptly be paid by Buyer to Seller.
(b) Adjustments for Union Annuity. Seller shall
promptly reimburse Buyer for any portion of the $1,282,128 Union Annuity
liability set forth as Item 226 on the last page of Schedule 1.1(b) following
payment of such portion by Buyer, until the entire $1,282,128 has been paid in
full.
(c) Adjustments for Extraordinary Sick Leave. If
prior to December 31, 1997 the Employees, in the aggregate, take more than
ordinary course sick leave and, as a result, Buyer incurs additional
compensation expense in covering for employees on extraordinary sick leave, such
additional expense shall be reimbursed in cash by Seller to Buyer at the end of
the calendar month in which such expense was incurred, following receipt from
Buyer of a certified statement of such expense which Buyer and Seller have
agreed upon in good faith; provided, however, that Buyer must make reasonable
efforts to keep extraordinary sick leave to a minimum and to mitigate any
additional compensation expense incurred as a result of extraordinary sick
leave.
(d) Adjustments for Loss of Value of Assets. If
Seller is unable to deliver any of the Purchased Assets to Buyer because Seller
has not been able to obtain required third-party consents to such transfer or
the Buyer loses the economic value of any Asset because of a condition imposed
by a third party as a condition to consent to such transfer, then Buyer and
Seller shall work together in good faith to agree upon a reassessed value of the
Purchased Assets and Assumed Liabilities as may be necessary, and shall adjust
the funding under Section 3.1(a) and make any other changes necessary to this
Agreement in order to reflect such reassessment.
3.2 Closing and Effective Time. The closing of the
transactions contemplated under this Agreement (the "Closing") shall take place
at the offices of Xxxxxxx, Phleger & Xxxxxxxx LLP, Newport Beach, California, on
the same date as the closing of the Xxxxxx Acquisition. The transfer of the
Purchased Assets by Seller to Buyer and Buyer's assumption of the Assumed
Liabilities shall be effective immediately prior to the closing of the Xxxxxx
Acquisition (the "Effective Time"). At the Effective Time, without the execution
of any documents or instruments by Seller or Buyer or any other action on the
part of Seller or Buyer: (i) Seller automatically assigns to Buyer all the
rights and benefits of Seller, and Buyer automatically assumes from Seller all
of the duties and obligations of Seller under the Management and Concession
Contracts, the Employee Benefit Plans and Agreements and all other contracts,
licenses and permits included in the Purchased Assets; and (ii) Seller
automatically transfers to Buyer all right, title and interest of Seller, and
Buyer automatically assumes from Seller all liability related to the inventory
included in the Purchased Assets. Buyer shall have possession of the tangible
Purchased Assets immediately upon Closing.
3.3 Closing Deliveries.
(a) Seller. At the Closing, Seller shall execute and
deliver to Buyer: (i) the stock certificate evidencing all of the Lakeview Stock
owned in the name of The Xxxxxx Corporation, marked "cancelled" and a new stock
certificate showing Buyer as owner of all of the Lakeview Stock; (ii) such
instruments as shall be reasonably requested by Buyer to vest in Buyer title in
and to the Purchased Assets not covered by Section 3.2(i) and (ii); and (iii)
the books and records related to the
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Purchased Assets and the Assumed Liabilities, including copies of the Management
and Concession Contracts, Employee Benefit Plans and Agreements and all other
contracts, licenses and permits in the possession of Seller and included in the
Purchased Assets and not previously provided to Buyer.
(b) Buyer. At the Closing, Buyer shall deliver to
Seller the documents as shall be reasonably requested by Seller to complete the
assumption of the Assumed Liabilities by Buyer.
3.4 Post-Closing Deliveries. Buyer and Seller shall work
together in good faith to prepare and execute any documents or other instruments
necessary to effect the transfer from Seller to Buyer of any of the Purchased
Assets and Assumed Liabilities, including any forms or other filings that need
to be made with any governmental entities to effect such transfer.
3.5 Transfer Taxes and Fees. Buyer and Seller shall each be
responsible for fifty-percent (50%) of any transfer taxes or other government
fees imposed in connection with the transfer of the Purchased Assets and Assumed
Liabilities to Buyer. Seller shall receive a credit in the amount of
fifty-percent (50%) of such taxes and fees against the amount due from Seller to
Buyer under Section 3.1(b).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
4.1 Authority of Seller Relative to Agreement. The Seller has
all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by the Seller and the consummation by the Seller of the
transactions contemplated hereby have been duly authorized and no other
proceedings on the part of the Seller are necessary to authorize this Agreement
and the consummation by the Seller of such transactions. This Agreement has been
validly executed and delivered by the Seller and constitutes a legal, valid and
binding obligation of the Seller enforceable against the Seller in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors rights generally, by general equitable principals
(regardless of whether such enforceability is considered in a proceeding in law
or at equity).
4.2 No Conflicts. The execution, delivery and performance of
this Agreement by the Seller do not and will not, in a manner which would cause
a material adverse effect: (i) conflict with or violate any governmental
regulation applicable to the Seller; (ii) result in a breach or violation of or
constitute a default under, or give rise to any right of first refusal,
termination, amendment, acceleration or cancellation of, result in a loss or
reduction of rights under, or result in the creation of any lien on any assets
of the Seller pursuant to, any note, bond, mortgage, indenture contract,
agreement, lease, license or other instrument or obligation to which the Seller
is a party; (iii) conflict with or violate the organizational documents of the
Seller; or (iv) conflict with or violate any partnership or joint venture
agreement binding on the Seller.
4.3 Consents. To the best of Seller's knowledge, no consent is
required from any third party to the execution, delivery or performance by the
Seller of its obligations under this Agreement, the failure of which would
reasonably be expected to result in a material adverse effect on Buyer's use of
the Asset being transferred.
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4.4 Pass-Through of Xxxxxxxxx Representations and Warranties.
Seller makes such representations and warranties to Buyer regarding the
Purchased Assets and Assumed Liabilities as were made to Sunstone, Inc. by
Xxxxxxxxx in Section 3.1 of the Stock Purchase Agreement dated as of August 5,
1997 among Sunstone, Inc., Xxxxxxxxx and Xxxxxx (the "Stock Purchase
Agreement"). The representations and warranties of Seller to Buyer are subject
to the same exceptions, qualifications and limitations as are Xxxxxxxxx'x
representations and warranties to Sunstone, Inc. under Section 3.1 of the Stock
Purchase Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
5.1 Authority of Seller Relative to Agreement. Buyer has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Buyer and the consummation by Buyer of the transactions
contemplated hereby have been duly authorized by the Sole Director of Buyer and
no other corporate proceedings on the part of Buyer are necessary to authorize
this Agreement and the consummation by Buyer of such transactions. This
Agreement has been validly executed and delivered by Buyer and constitutes a
legal, valid and binding obligation of Buyer enforceable against Buyer in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors rights generally, by general equitable
principals (regardless of whether such enforceability is considered in a
proceeding in law or at equity).
5.2 No Conflicts. The execution, delivery and performance of
this Agreement by Buyer do not and will not, in a manner which would cause a
material adverse effect: (i) conflict with or violate any governmental
regulation applicable to Buyer; (ii) result in a breach or violation of or
constitute a default under, or give rise to any right of first refusal,
termination, amendment, acceleration or cancellation of, result in a loss or
reduction of rights under, or result in the creation of any lien on any assets
of Buyer pursuant to, any note, bond, mortgage, indenture contract, agreement,
lease, license or other instrument or obligation to which Buyer or the Company
is a party; (iii) conflict with or violate the Articles of Incorporation or
Bylaws of Buyer; or (iv) conflict with or violate any partnership or joint
venture agreement binding on Buyer.
5.3 Consents. No consent is required from any third party to
the execution, delivery or performance by Buyer of its obligations under this
Agreement, other than the consent of Xxxxx Fargo Bank, N.A.
ARTICLE VI
SURVIVAL; INDEMNIFICATION
6.1 Indemnification by Seller.
(a) Indemnification Regarding Sections 4.1, 4.2 and
4.3. The representations and warranties of Seller under Section 4.1, 4.2 or 4.3
shall survive for a period of twelve (12) months after the Closing. Seller shall
indemnify Buyer for any third party action against Buyer founded on a breach of
Seller's representations and warranties in Section 4.1, 4.2 or 4.3 in an amount
equal to a judgment or reasonable settlement actually paid by Buyer to such
third party, plus Buyer's reasonable attorneys' fees and costs in defending such
action. Buyer shall promptly give Seller of the initiation of any such third
party action.
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(b) Indemnification Regarding Section 4.4. The
representations and warranties of Seller to Buyer with respect to any particular
Purchased Asset or Assumed Liability shall survive as long as the corresponding
representation and warranty of Xxxxxxxxx to Sunstone, Inc. regarding such
Purchased Asset or Assumed Liability survives. If, during such survival period,
Buyer suffers damage or is subject to a third party claim as a result of a
breach by Seller of any representation and warranty under Section 4.4, Buyer
shall promptly notify Seller of such claim or damage. Sunstone, Inc. as the
general partner of Sunstone Hotel Investors, L.P., the owner and manager of
Seller, shall in turn notify Xxxxxxxxx of such claim or damage and pursue
indemnification from Xxxxxxxxx therefor on the basis that the claim or damage
has been suffered by Sunstone, Inc. itself; provided, however, that Sunstone,
Inc. shall not be required to notify or pursue such action against Xxxxxxxxx
until and unless the claim or damage suffered by Buyer, together with all claims
or damages suffered by Sunstone, Inc. as a result of the breach of Xxxxxxxxx'x
representations and warranties to Sunstone, Inc. under the Stock Purchase
Agreement, exceeds the $2.5 million threshold in Section 7.1(d) of the Stock
Purchase Agreement. In addition, Seller's total liability to Buyer as a result
of the breach of Seller of any of the representations and warranties under
Section 4.4 shall be limited to an amount equal to the product of (i) $5 million
and (ii) a fraction, the numerator of which is the total value shown on Schedule
1.1(a) of the assets listed on such schedule, the denominator of which is the
value of all assets owned by Xxxxxx at the time it was acquired by Sunstone,
Inc. The procedures governing the timing, handling and reimbursement of expenses
related to third party claims for breaches of Seller's representations and
warranties to Buyer under Section 4.4, shall be identical to those established
between Sunstone, Inc. and Xxxxxxxxx under Section 7.1(e) of the Stock Purchase
Agreement.
6.2 Indemnification by Buyer. The representations and
warranties of Buyer under Article V shall survive for a period of twelve (12)
months after the Closing. Buyer shall indemnify Seller for any third party
action against Seller founded on a breach of Buyer's representations and
warranties in Article V in an amount equal to a judgment or reasonable
settlement actually paid by Seller to such third party, plus Seller's reasonable
attorneys' fees and costs in defending such action. Seller shall promptly give
Buyer of the initiation of any such third party action.
ARTICLE VII
MISCELLANEOUS
7.1 Further Assurances. The parties shall at their own cost
and expense execute and deliver such further documents and instruments and shall
take such other actions as may be reasonably required or appropriate to carry
out the intent and purposes of this Agreement.
7.2 Assignment. Neither this Agreement nor any of the rights
or obligations hereunder may be assigned by any party without the prior written
consent of all of the other parties; provided, however, that this Agreement may
be assigned by operation of law due to a change in ownership or control of
Seller without the consent of Buyer.
7.3 Notices. Unless otherwise provided herein, any notice,
request, instruction or other document to be given hereunder by any party to any
other party shall be in writing and shall be deemed to have been given (a) if
mailed by registered or certified mail (postage prepaid) on the date when the
return receipt is signed or delivery is refused or the notice is designated by
the postal authorities as not deliverable, (b) if sent by facsimile
transmission, when so sent and receipt acknowledged by an appropriate telephone
or facsimile receipt or (c) if sent by other means, when actually received by
the party to which such notice has been directed, in each case at the respective
addresses or telecopier
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numbers set forth below or such other address or telephone number as such party
may have fixed by notice:
If to Seller, addressed to:
Sunstone Hotels LLC
000 Xxxxx xx Xxxxxxxxxx, Xxxxx 000
Xxx Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Alter
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
0000 XxxXxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Buyer, addressed to:
Sunstone Hotel Properties, Inc.
000 Xxxxx xx Xxxxxxxxxx, Xxxxx 000
Xxx Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Sharp & Barney LLC
000 Xxxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
7.4 Governing Law. This Agreement shall be construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of California, without reference to the choice of law provisions
thereof.
7.5 Entire Agreement; Modifications and Waivers. This
Agreement, together with all exhibits and schedules hereto and thereto,
constitutes the entire agreement between the parties pertaining to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the parties. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
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provision hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
7.6 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.7 Expenses. Except as otherwise specified herein, each party
hereto shall pay his or its own legal, accounting, out-of-pocket and other
expenses incident to this Agreement and to any action taken by such party in
preparation for carrying this Agreement into effect.
7.8 Invalidity. In the event that any one or more of the
provisions contained in this Agreement, or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement, or any other such instrument.
7.9 Titles. The titles, captions or headings of the Articles
and Sections herein are for convenience of reference only and are not intended
to be a part of or to affect the meaning or interpretation of this Agreement.
7.10 No Third-Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any person other than the parties hereto and
their respective successors and permitted assigns.
7.11 Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement. Any reference to any
federal, state, local or foreign statute or law shall be deemed also to refer to
all rules and regulations promulgated thereunder, unless the context requires
otherwise. The word "including" shall mean including without limitation. The
parties hereto intend that each representation, warranty, and covenant contained
herein shall have independent significance. If any party hereto has breached any
representation, warranty or covenant contained herein in any respect, the fact
that there exists another representation, warranty or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which the
party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty or covenant.
7.12 Execution. This Agreement and any other documents related
thereto, including exhibits and/or certificates, may be executed by transmitting
a facsimile signature page to the other parties hereto, and by promptly sending
to such other parties an originally executed signature page.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
Seller: SUNSTONE HOTELS, LLC,
a Delaware limited liability company
By XXXXXX REALTY CORPORATION,
a Minnesota corporation, its sole
member and manager
By: /XXXXXX X. XXXXXXXX/
----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
--------------------------------------
Title: Senior Vice President - Treasuer
-------------------------------------
Buyer: SUNSTONE HOTEL PROPERTIES, INC.,
a Colorado corporation
By: /XXXXX X. XXXXXXX/
----------------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------------
Title: Vice President, Acquisitions
-------------------------------------
This Agreement is also executed by Sunstone Hotel Investors, Inc. as of the day
and year first above written solely to confirm and acknowledge its obligations
under Section 6.1(b) hereof.
SUNSTONE HOTEL INVESTORS, INC.,
a Maryland corporation
By: /XXXXXX X. ALTER/
--------------------------------------
Xxxxxx X. Alter
President
14
SCHEDULE 1.1(a)
MANAGEMENT AND CONCESSION CONTRACTS AND LAKEVIEW STOCK
================================================================================
ASSET BEING FAIR MARKET
TRANSFERRED VALUE OF ASSET
--------------------------------------------------------------------------------
THIRD PARTY HOTEL MANAGEMENT
CONTRACT:
--------------------------------------------------------------------------------
Euro-Suites $ 0.00
--------------------------------------------------------------------------------
Red Fox Inn $ 87,000
--------------------------------------------------------------------------------
Plaza One $ 4,000
--------------------------------------------------------------------------------
HIBBING MANAGEMENT CONTRACT, NOTE
& OWNER INTERESTS:
--------------------------------------------------------------------------------
Management Contract $ 0.00
--------------------------------------------------------------------------------
25% LP Interest N/A
--------------------------------------------------------------------------------
CONCESSION CONTRACTS:
--------------------------------------------------------------------------------
Rochester Civic Center $324,000
--------------------------------------------------------------------------------
Ogden Egyptian Center $180,000
--------------------------------------------------------------------------------
ASSOCIATORY MANAGEMENT CONTRACTS:
--------------------------------------------------------------------------------
Lakeview Resort Club $ 0.00
--------------------------------------------------------------------------------
Victorian Village $ 7,000
--------------------------------------------------------------------------------
Carriage House $ 15,000
--------------------------------------------------------------------------------
Center Plaza Associates $228,000
--------------------------------------------------------------------------------
OTHER ASSETS:
--------------------------------------------------------------------------------
100% of stock of Lakeview of $480,000
Rochester, Inc. (owns 80% of plus pro rata share of cash in Joint
Cheat Progressive Venture) Venture less cost of sale
(Sewer Plant)
--------------------------------------------------------------------------------
Total: $1,325,000
================================================================================
15
MANAGEMENT AND CONCESSION AGREEMENTS
(Detailed Description)
1. Management Contract between SMP II Limited Partnership and The Xxxxxx
Corporation, dated September 10, 1986
2. Management Agreement between Broadway Terraces Association, Inc. and Xxxxxx
Real Estate Management, Inc. dated February 8, 1984
3. Management Agreement between Lakeview Resort Club Property Owners
Association, Inc. and Lakeview of Rochester, Inc., dated May 1, 1984
4. Management Contract between Green Oaks Associates and the Xxxxxx
Corporation, dated July 2, 1990
5. Management Contract between Improvement Limited Partnership and The Xxxxxx
Corporation dated July 8, 1992
6. Management Contract between Modern Woodmen of America, Royal Neighbors of
America, The Rock Island Bank, N.A. and The Xxxxxx Corporation dated April
9, 1997
7. Management Contract between J.C.S.II Development Group, Inc. and Lakeview
of Rochester, Inc., dated April 30, 1990
8. Management Contract between Red Fox Motor Hotel Corporation and The Xxxxxx
Corporation, dated December 20, 1994
9. License Agreement between the City of Rochester and Xxxxxx Development
Corporation, dated August 13, 1991 (Food and Beverage Concessions)
10. Manual Food Service Agreement between The Ogden Egyptian Center and Xxxxxx
of Ogden, Incorporated, date 10/20/96 (Food Services Program fo The Ogden
Egyptian Center, xxxxx'x Egyptian Theater, and Xxxxx Xxxxxx Conference
Center)
-12-
16
SCHEDULE 1.1(b)
CURRENT ASSETS AND LIABILITIES
(attached)
17
Proration Item San Marcos Suites Canyon Springs Pocatello Park Holiday Inn
Xxxxxxxx Boise Twin Falls Pocatello Rochester
AZ ID ID ID MN
------------------------------------------------------------------------------------------------------------------------------------
House Funds DR 29,500.00 5,500.00 4,550.00 6,100.00 10,400.00
Guest Ledger DR 43,301.00 20,869.00 16,533.00 5,045.00 30,386.00
Travel Agent Liabilities CR 0.00 0.00 0.00 0.00 0.00
City Ledger DR 125,316.00 119,197.00 106,714.00 84,164.00 88,422.00
Provision for Doubtful Accounts CR (16,008.00) (6,995.00) (2,981.00) (9,532.00) (2,170.00)
Unrealized Credit Card Comm Expense CR (2,150.00) (1,700.00) (1,500.00) (1,250.00) (1,700.00)
Advance Deposit Ledger CR (2,311.00) (5,705.00) (1,353.00) (1,142.00) (6,617.00)
Accounts Receivable - General DR 21,881.00 100.00 483.00 0.00 1,232.00
Returned Checks DR 195.00 303.00 1,070.00 (39.00) 0.00
Food Inventory DR 54,540.00 4,527.00 14,110.00 29,868.00 17,956.00
Beverage Inventory DR 34,669.00 1,881.00 7,113.00 6,653.00 6,397.00
Retail Inventory DR 51,520.00 0.00 761.00 395.00 0.00
Linen Inventory - Rooms Division DR Rented 30,000.00 15,762.00 13,500.00 10,000.00
Linen Inventory - F&B Division DR Rented 1,834.00 3,850.00 1,875.00 Rented
China Inventory DR 38,622.00 13,853.00 6,750.00 6,930.00 11,018.00
Glass Inventory DR 11,987.00 1,651.00 1,680.00 2,627.00 573.00
Silver Inventory DR 9,270.00 3,455.00 1,075.00 5,764.00 1,794.00
Amusement Ticket Inventories DR 0.00 0.00 0.00 0.00 0.00
Guest Supplies DR 5,843.00 3,252.00 5,500.00 3,500.00 0.00
Chemical Supplies DR 2,155.00 720.00 0.00 1,414.00 3,246.00
Shelf Inventory DR 0.00 0.00 0.00 0.00 0.00
Prepaid Expense (Sub Schedule) DR 0.00 0.00 0.00 0.00 43,584.00
Deposits DR 700.00 1,700.00 0.00 0.00 0.00
Tenant Security Deposits (Sub Schedule) CR (500.00) 0.00 0.00 0.00 0.00
Prepaid Tenant Rents (Sub Schedule) CR (1,962.00) 0.00 0.00 0.00 0.00
Accounts Payable CR (347,149.00) (61,653.00) (81,549.00) (110,514.00) (73,810.00)
Workers Compensation accrual CR (125,981.00) (40,532.00) (29,414.00) (48,719.00) (28,476.00)
Accrued Health Insurance CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Misc. Payroll CR 393.00 175.00 0.00 39.00 0.00
Employee Liability - Accrued Payroll CR (187,960.00) (61,710.00) (46,890.00) (60,990.00) (67,040.00)
Employee Liability - Prior Year Bonus's CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Savings Bonds CR (70.00) (34.00) 0.00 0.00 (45.00)
Employee Liability - Union Annuity CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Profit Sharing CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Holiday CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Vacation CR (68,955.00) (16,295.00) (17,773.00) (16,739.00) (38,679.00)
Employee Liability - State Tax Withheld CR 0.00 (5,347.50) (6,425.00) (7,492.50) 0.00
Employee Liability - Health FSA CR (152.00) 42.00 552.00
Employee Liability - Employer Taxes CR (66,350.00) (14,267.50) (10,992.50) (23,632.50) (14,232.50)
Sales Tax CR (86,458.50) (47,653.50) (2,658.15) (29,161.50) (49,266.00)
Deferred Revenue CR (22,628.00) 0.00 0.00 0.00 0.00
L/T Pension & Post Retirement CR 0.00 0.00 0.00 0.00 0.00
------------------------------------------------------------------------------------------------------------------------------------
Net (498,742.50) (52,875.50) (15,542.65) (140,785.50) (57,027.50)
====================================================================================================================================
Proration Item Xxxxxx Hotel Kahler Plaza Hotel Inn & Suites Colonial Park Green Oaks
Rochester Rochester Rochester Helena Ft. Worth
MN MN MN MT TX
------------------------------------------------------------------------------------------------------------------------------------
House Funds DR 23,495.00 5,750.00 3,150.00 9,060.00 9,500.00
Guest Ledger DR 326,644.00 358,075.00 154,602.00 22,985.00 9,165.00
Travel Agent Liabilities CR 0.00 0.00 0.00 0.00 0.00
City Ledger DR 1,038,049.00 48,780.00 17,635.00 82,276.00 198,198.00
Provision for Doubtful Accounts CR (15,643.00) (11,761.00) (8,293.00) (4,943.00) (4,918.00)
Unrealized Credit Card Comm Expense CR (7,200.00) (3,050.00) (2,800.00) (2,000.00) (2,000.00)
Advance Deposit Ledger CR (6,126.00) (5,644.00) (3,168.00) (1,185.00) (11,880.00)
Accounts Receivable - General DR (15,300.00) 41,322.00 1,523.00 150.00 6.00
Returned Checks DR 0.00 0.00 0.00 0.00 (177.00)
Food Inventory DR 119,418.00 22,260.00 11,650.00 11,939.00 19,112.00
Beverage Inventory DR 100,092.00 12,379.00 2,345.00 9,079.00 8,637.00
Retail Inventory DR 0.00 0.00 26,530.00 0.00 637.00
Linen Inventory - Rooms Division DR 20,500.00 12,700.00 9,700.00 29,000.00 35,000.00
Linen Inventory - F&B Division DR Rented Rented Rented 5,000.00 6,000.00
China Inventory DR 17,800.00 24,500.00 5,000.00 7,400.00 7,500.00
Glass Inventory DR 4,600.00 2,000.00 850.00 1,155.00 4,000.00
Silver Inventory DR 26,400.00 5,100.00 1,200.00 1,058.00 2,500.00
Amusement Ticket Inventories DR 0.00 0.00 0.00 0.00 0.00
Guest Supplies DR 27,284.00 8,000.00 4,000.00 260.00 2,000.00
Chemical Supplies DR 4,000.00 1,500.00 600.00 2,400.00 1,000.00
Shelf Inventory DR 0.00 0.00 0.00 0.00 0.00
Prepaid Expense (Sub Schedule) DR 0.00 0.00 0.00 0.00 0.00
Deposits DR 5,050.00 0.00 0.00 0.00 500.00
Tenant Security Deposits (Sub Schedule) CR (8,726.00) (1,030.00) (552.00) 0.00 0.00
Prepaid Tenant Rents (Sub Schedule) CR (40,987.00) (22,061.00) (490.00) (2,847.00) (274.00)
Accounts Payable CR (376,416.00) (40,177.00) (38,362.00) (84,700.00) (106,851.00)
Workers Compensation accrual CR (167,559.00) (34,245.00) (30,914.00) (79,279.00) (120,077.00)
Accrued Health Insurance CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Misc. Payroll CR 1,653.00 0.00 (263.00) 0.00 (61.00)
Employee Liability - Accrued Payroll CR (317,292.50) (72,655.00) (67,512.50) (67,275.00) (95,927.50)
Employee Liability - Prior Year Bonus's CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Savings Bonds CR (189.00) (25.00) (61.00) (25.00) (30.00)
Employee Liability - Union Annuity CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Profit Sharing CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Holiday CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Vacation CR (255,289.00) (37,155.00) (29,352.00) (31,971.00) (64,979.00)
Employee Liability - State Tax Withheld CR 0.00 0.00 0.00 (6,932.50) 0.00
Employee Liability - Health FSA CR 773.00 (71.00) 255.00 (1,320.00)
Employee Liability - Employer Taxes CR (90,695.00) (20,900.00) (13,927.50) (10,605.00) (45,765.00)
Sales Tax CR (202,626.00) (102,793.50) (60,979.50) (31,437.00) (97,122.00)
Deferred Revenue CR 0.00 0.00 0.00 0.00 0.00
L/T Pension & Post Retirement CR 0.00 0.00 0.00 0.00 0.00
------------------------------------------------------------------------------------------------------------------------------------
Net 211,709.50 190,798.50 (17,634.50) (142,757.50) (246,306.50)
====================================================================================================================================
Proration Item Residence Inn Hilton University Park Provo Park Olympia Park
Provo Salt Lake City Salt Lake Provo Park City
UT UT UT UT UT
------------------------------------------------------------------------------------------------------------------------------------
House Funds DR 2,300.00 22,400.00 10,000.00 16,400.00 15,000.00
Guest Ledger DR 50,227.00 36,488.00 40,290.00 29,657.00 24,148.00
Travel Agent Liabilities CR 0.00 0.00 0.00 0.00 0.00
City Ledger DR 64,603.00 655,495.00 377,016.00 505,856.00 301,191.00
Provision for Doubtful Accounts CR (1,506.00) (12,992.00) (15,935.00) (8,246.00) (10,800.00)
Unrealized Credit Card Comm Expense CR (1,000.00) (3,700.00) (2,200.00) (3,000.00) (2,400.00)
Advance Deposit Ledger CR (438.00) (16,773.00) (924.00) (2,710.00) (31,128.00)
Accounts Receivable - General DR 1,403.00 (6,844.00) 2,033.00 13,546.00 (144.00)
Returned Checks DR 130.00 1,452.00 635.00 0.00 (204.00)
Food Inventory DR 0.00 45,135.00 28,604.00 55,017.00 13,280.00
Beverage Inventory DR 546.00 34,467.00 17,790.00 16,210.00 8,943.00
Retail Inventory DR 0.00 0.00 40,051.00 11,289.00 11,888.00
Linen Inventory - Rooms Division DR 24,071.00 63,000.00 23,048.00 29,000.00 48,663.00
Linen Inventory - F&B Division DR 113.00 6,867.00 14,257.00 13,200.00 2,097.00
China Inventory DR 4,464.00 34,500.00 9,770.00 37,500.00 2,865.00
Glass Inventory DR 595.00 7,425.00 6,764.00 3,600.00 1,211.00
Silver Inventory DR 2,893.00 2,266.00 2,550.00 11,250.00 3,157.00
Amusement Ticket Inventories DR 0.00 0.00 0.00 922.00 0.00
Guest Supplies DR 11,369.00 14,000.00 13,560.00 4,000.00 13,964.00
Chemical Supplies DR 1,160.00 2,500.00 2,890.00 900.00 1,859.00
Shelf Inventory DR 0.00 0.00 0.00 0.00 0.00
Prepaid Expense (Sub Schedule) DR 0.00 0.00 0.00 0.00 2,550.00
Deposits DR 84.00 0.00 0.00 485.00 0.00
Tenant Security Deposits (Sub Schedule) CR 0.00 (2,100.00) 0.00 0.00 0.00
Prepaid Tenant Rents (Sub Schedule) CR 0.00 (23,335.00) (8,156.00) 0.00 0.00
Accounts Payable CR (86,771.00) (645,559.00) (154,851.00) (341,944.00) (174,007.00)
Workers Compensation accrual CR (8,367.00) (85,106.00) (12,335.00) (51,513.00) (46,341.00)
Accrued Health Insurance CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Misc. Payroll CR 236.00 1,014.00 0.00 1,408.00 150.00
Employee Liability - Accrued Payroll CR (26,982.50) (207,672.50) (105,040.00) (147,577.50) (111,115.00)
Employee Liability - Prior Year Bonus's CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Savings Bonds CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Union Annuity CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Profit Sharing CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Holiday CR 0.00 0.00 0.00 0.00 0.00
Employee Liability - Vacation CR (5,745.00) (75,392.00) (43,352.00) (44,653.00) (47,623.00)
Employee Liability - State Tax Withheld CR (2,737.50) (30,632.50) (12,320.00) (15,735.00) (15,287.50)
Employee Liability - Health FSA CR 0.00 753.00 396.00 320.00 832.00
Employee Liability - Employer Taxes CR (4,087.50) (63,245.00) (22,195.00) (26,405.00) (36,710.00)
Sales Tax CR (52,039.50) (294,957.00) (117,918.70) (184,767.00) (141,931.50)
Deferred Revenue CR 0.00 0.00 0.00 0.00 0.00
L/T Pension & Post Retirement CR 0.00 0.00 0.00 0.00 0.00
------------------------------------------------------------------------------------------------------------------------------------
Net (25,480.00) (540,546.00) 94,427.30 (75,990.50) (165,893.00)
====================================================================================================================================
Proration Item Xxxxx Park Lakeview Resort Kahler Natalies Hallmark
Ogden Morgantown Corporate Rochester
UT WV MN MN
------------------------------------------------------------------------------------------------------------------------------------
House Funds DR 11,875.00 12,650.00 100.00 450.00
Guest Ledger DR 44,092.00 94,436.00 0.00 0.00
Travel Agent Liabilities CR 0.00 0.00 0.00 0.00
City Ledger DR 190,134.00 504,397.00 0.00 378.00
Provision for Doubtful Accounts CR (511.00) (17,484.00) 0.00 0.00
Unrealized Credit Card Comm Expense CR (2,300.00) (3,700.00) 0.00 (100.00)
Advance Deposit Ledger CR (3,953.00) (186,945.00) 0.00 0.00
Accounts Receivable - General DR 9,061.00 53,231.00 94,068.00 0.00
Returned Checks DR 638.00 106.00 2,712.00 0.00
Food Inventory DR 34,151.00 52,838.00 0.00 0.00
Beverage Inventory DR 9,296.00 30,792.00 0.00 0.00
Retail Inventory DR 13,353.00 0.00 0.00 116,640.00
Linen Inventory - Rooms Division DR 30,454.00 25,000.00 0.00 0.00
Linen Inventory - F&B Division DR 1,486.00 4,680.00 0.00 0.00
China Inventory DR 4,040.00 24,000.00 0.00 0.00
Glass Inventory DR 1,406.00 7,000.00 0.00 0.00
Silver Inventory DR 1,872.00 4,800.00 0.00 0.00
Amusement Ticket Inventories DR 0.00 0.00 0.00 0.00
Guest Supplies DR 11,549.00 9,492.00 0.00 0.00
Chemical Supplies DR 1,639.00 33,905.00 0.00 0.00
Shelf Inventory DR 0.00 0.00 0.00 0.00
Prepaid Expense (Sub Schedule) DR 0.00 42,922.00 0.00 0.00
Deposits DR 0.00 0.00 300.00 0.00
Tenant Security Deposits (Sub Schedule) CR (500.00) 0.00 0.00 0.00
Prepaid Tenant Rents (Sub Schedule) CR (466.00) 0.00 0.00 0.00
Accounts Payable CR (183,792.00) (249,524.00) (1,546,659.00) (18,633.00)
Workers Compensation accrual CR (40,747.00) 0.00 940,188.00 (242.00)
Accrued Health Insurance CR 0.00 0.00 (350,000.00) 0.00
Employee Liability - Misc. Payroll CR 692.00 (7,197.00) 0.00 0.00
Employee Liability - Accrued Payroll CR (109,920.00) (225,310.00) (95,717.50) (2,945.00)
Employee Liability - Prior Year Bonus's CR 0.00 0.00 0.00 0.00
Employee Liability - Savings Bonds CR 0.00 0.00 (38.00) 0.00
Employee Liability - Union Annuity CR 0.00 0.00 (1,250,078.00) 0.00
Employee Liability - Profit Sharing CR 0.00 0.00 (301,514.00) 0.00
Employee Liability - Holiday CR 0.00 0.00 0.00 0.00
Employee Liability - Vacation CR (52,853.00) (92,357.00) (65,699.00) (2,510.00)
Employee Liability - State Tax Withheld CR (15,132.50) (13,907.50) 0.00 0.00
Employee Liability - Health FSA CR (282.00) (85.00) (2,663.00)
Employee Liability - Employer Taxes CR (20,045.00) (108,550.00) (27,350.00) (267.50)
Sales Tax CR (134,971.50) (103,648.50) (2,064.00) (2,925.00)
Deferred Revenue CR 0.00 (447.00) 0.00 0.00
L/T Pension & Post Retirement CR 0.00 0.00 (150,000.00) 0.00
------------------------------------------------------------------------------------------------------------------------------------
Net (199,735.00) (108,906.00) (2,754,414.50) 89,845.50
====================================================================================================================================
Note: 210,211,215 Includes Recorded and Accrued Liabilities
Note: 221 Accrued Payroll represents 2Weeks & 2 Days @ 10/15/97
Note: 243 Sales Tax Represents 1.5 Month Liability for Sept and Oct
18
CONFERENCE CENTERS MANAGED ENTITIES
Xxxxxx Xxxxx Park
Proration Item Hospitality Svcs Egyptian Center Xxxxxx Park Plaza One Euro Suites Red Fox Inn
Rochester Xxxxx Hibbing Rock Island Morgantown Waverly
MN UT MN IL WV IA
------------------------------------------------------------------------------------------------------------------------------------
House Funds DR 3,600.00 1,775.00 0.00 0.00 0.00 0.00
Guest Ledger DR 0.00 0.00 0.00 0.00 0.00 0.00
Travel Agent Liabilities CR 0.00 0.00 0.00 0.00 0.00 0.00
City Ledger DR 1,552.00 180,003.00 0.00 0.00 0.00 0.00
Provision for Doubtful Accounts CR 0.00 (2,000.00) 0.00 0.00 0.00 0.00
Unrealized Credit Card Comm Expense CR 0.00 0.00 0.00 0.00 0.00 0.00
Advance Deposit Ledger CR 0.00 0.00 0.00 0.00 0.00 0.00
Accounts Receivable - General DR 0.00 0.00 0.00 0.00 0.00 0.00
Returned Checks DR 0.00 0.00 0.00 0.00 0.00 0.00
Food Inventory DR 12,640.00 29,898.00 0.00 0.00 0.00 0.00
Beverage Inventory DR 4,163.00 4,221.00 0.00 0.00 0.00 0.00
Retail Inventory DR 0.00 0.00 0.00 0.00 0.00 0.00
Linen Inventory - Rooms Division DR 0.00 0.00 0.00 0.00 0.00 0.00
Linen Inventory - F&B Division DR 0.00 15,300.00 0.00 0.00 0.00 0.00
China Inventory DR 2,000.00 21,350.00 0.00 0.00 0.00 0.00
Glass Inventory DR 300.00 15,150.00 0.00 0.00 0.00 0.00
Silver Inventory DR 500.00 10,530.00 0.00 0.00 0.00 0.00
Amusement Ticket Inventories DR 0.00 0.00 0.00 0.00 0.00 0.00
Guest Supplies DR 1,000.00 0.00 0.00 0.00 0.00 0.00
Chemical Supplies DR 150.00 2,250.00 0.00 0.00 0.00 0.00
Shelf Inventory DR 0.00 0.00 0.00 0.00 0.00 0.00
Prepaid Expense (Sub Schedule) DR 0.00 0.00 0.00 0.00 0.00 0.00
Deposits DR 0.00 1,000.00 0.00 0.00 0.00 0.00
Tenant Security Deposits (Sub Schedule) CR 0.00 0.00 0.00 0.00 0.00 0.00
Prepaid Tenant Rents (Sub Schedule) CR 0.00 0.00 0.00 0.00 0.00 0.00
Accounts Payable CR (14,828.00) (23,760.00) 0.00 0.00 0.00 0.00
Workers Compensation accrual CR (3,099.00) (4,658.00) 0.00 0.00 0.00 0.00
Accrued Health Insurance CR 0.00 0.00 0.00 0.00 0.00 0.00
Employee Liability - Misc. Payroll CR 0.00 0.00 0.00 0.00 0.00 0.00
Employee Liability - Accrued Payroll CR (5,677.50) (14,595.00) 0.00 0.00 0.00 0.00
Employee Liability - Prior Year Bonus's CR 0.00 0.00 0.00 0.00 0.00 0.00
Employee Liability - Savings Bonds CR 0.00 0.00 0.00 0.00 0.00 0.00
Employee Liability - Union Annuity CR 0.00 0.00 0.00 0.00 0.00 0.00
Employee Liability - Profit Sharing CR 0.00 0.00 0.00 0.00 0.00 0.00
Employee Liability - Holiday CR 0.00 0.00 0.00 0.00 0.00 0.00
Employee Liability - Vacation CR (2,526.00) (6,807.00) 0.00 0.00 0.00 0.00
Employee Liability - State Tax Withheld CR 0.00 (2,300.00) 0.00 0.00 0.00 0.00
Employee Liability - Health FSA CR 0.00 0.00 0.00 0.00
Employee Liability - Employer Taxes CR (1,377.50) (2,070.00) 0.00 0.00 0.00 0.00
Sales Tax CR (4,884.00) (14,845.50) 0.00 0.00 0.00 0.00
Deferred Revenue CR 0.00 0.00 0.00 0.00 0.00 0.00
L/T Pension & Post Retirement CR 0.00 0.00 0.00 0.00 0.00 0.00
------------------------------------------------------------------------------------------------------------------------------------
Net (6,487.00) 210,441.50 0.00 0.00 0.00 0.00
====================================================================================================================================
TCS ASSOCIATIONS
Proration Item T C S T C S Victorian Village Carriage House
Rochester Salt Lake City Park City Park City
MN UT UT UT
------------------------------------------------------------------------------------------------------------------------------------
House Funds DR 100.00 0.00 0.00 0.00
Guest Ledger DR 0.00 0.00 0.00 0.00
Travel Agent Liabilities CR 0.00 0.00 0.00 0.00
City Ledger DR 802,803.00 126,836.00 0.00 0.00
Provision for Doubtful Accounts CR (4,248.00) (2,800.00) 0.00 0.00
Unrealized Credit Card Comm Expense CR 0.00 0.00 0.00 0.00
Advance Deposit Ledger CR 0.00 0.00 0.00 0.00
Accounts Receivable - General DR 100.00 0.00 0.00 0.00
Returned Checks DR 0.00 0.00 0.00 0.00
Food Inventory DR 0.00 0.00 0.00 0.00
Beverage Inventory DR 0.00 0.00 0.00 0.00
Retail Inventory DR 0.00 0.00 0.00 0.00
Linen Inventory - Rooms Division DR 0.00 0.00 0.00 0.00
Linen Inventory - F&B Division DR 0.00 0.00 0.00 0.00
China Inventory DR 0.00 0.00 0.00 0.00
Glass Inventory DR 0.00 0.00 0.00 0.00
Silver Inventory DR 0.00 0.00 0.00 0.00
Amusement Ticket Inventories DR 0.00 0.00 0.00 0.00
Guest Supplies DR 0.00 0.00 0.00 0.00
Chemical Supplies DR 97,522.00 6,909.00 0.00 0.00
Shelf Inventory DR 273,858.00 17,666.00 0.00 0.00
Prepaid Expense (Sub Schedule) DR 0.00 0.00 0.00 0.00
Deposits DR 0.00 150.00 0.00 0.00
Tenant Security Deposits (Sub Schedule) CR 0.00 0.00 0.00 0.00
Prepaid Tenant Rents (Sub Schedule) CR 0.00 0.00 0.00 0.00
Accounts Payable CR (232,659.00) (21,233.00) 0.00 0.00
Workers Compensation accrual CR (112,845.00) (28,504.00) 0.00 0.00
Accrued Health Insurance CR 0.00 0.00 0.00 0.00
Employee Liability - Misc. Payroll CR (211.00) 0.00 0.00 0.00
Employee Liability - Accrued Payroll CR (118,600.00) (33,915.00) 0.00 0.00
Employee Liability - Prior Year Bonus's CR 0.00 0.00 0.00 0.00
Employee Liability - Savings Bonds CR (45.00) 0.00 0.00 0.00
Employee Liability - Union Annuity CR (32,050.00) 0.00 0.00 0.00
Employee Liability - Profit Sharing CR 0.00 0.00 0.00 0.00
Employee Liability - Holiday CR 0.00 0.00 0.00 0.00
Employee Liability - Vacation CR (72,802.00) (21,928.00) 0.00 0.00
Employee Liability - State Tax Withheld CR 0.00 (4,345.00) 0.00 0.00
Employee Liability - Health FSA CR (734.00) 0.00 0.00 0.00
Employee Liability - Employer Taxes CR (28,767.50) (11,485.00) 0.00 0.00
Sales Tax CR (2,389.50) (21,310.50) 0.00 0.00
Deferred Revenue CR 0.00 0.00 0.00 0.00
L/T Pension & Post Retirement CR 0.00 0.00 0.00 0.00
------------------------------------------------------------------------------------------------------------------------------------
Net 569,032.00 6,040.50 0.00 0.00
====================================================================================================================================
OTHER
PENDING
Center Property Cheat
Proration Item New Heat Plant Plaza Association Owners Association Progressive Ventures
Rochester Rochester Morgantown Morgantown
MN MN WV WV
------------------------------------------------------------------------------------------------------------------------------------
House Funds DR 0.00 0.00 0.00 0.00
Guest Ledger DR 0.00 0.00 0.00 0.00
Travel Agent Liabilities CR 0.00 0.00 0.00 0.00
City Ledger DR 0.00 0.00 0.00 0.00
Provision for Doubtful Accounts CR 0.00 0.00 0.00 0.00
Unrealized Credit Card Comm Expense CR 0.00 0.00 0.00 0.00
Advance Deposit Ledger CR 0.00 0.00 0.00 0.00
Accounts Receivable - General DR 0.00 0.00 0.00 0.00
Returned Checks DR 0.00 0.00 0.00 0.00
Food Inventory DR 0.00 0.00 0.00 0.00
Beverage Inventory DR 0.00 0.00 0.00 0.00
Retail Inventory DR 0.00 0.00 0.00 0.00
Linen Inventory - Rooms Division DR 0.00 0.00 0.00 0.00
Linen Inventory - F&B Division DR 0.00 0.00 0.00 0.00
China Inventory DR 0.00 0.00 0.00 0.00
Glass Inventory DR 0.00 0.00 0.00 0.00
Silver Inventory DR 0.00 0.00 0.00 0.00
Amusement Ticket Inventories DR 0.00 0.00 0.00 0.00
Guest Supplies DR 0.00 0.00 0.00 0.00
Chemical Supplies DR 0.00 0.00 0.00 0.00
Shelf Inventory DR 0.00 0.00 0.00 0.00
Prepaid Expense (Sub Schedule) DR 0.00 0.00 0.00 0.00
Deposits DR 0.00 0.00 0.00 0.00
Tenant Security Deposits (Sub Schedule) CR 0.00 0.00 0.00 0.00
Prepaid Tenant Rents (Sub Schedule) CR 0.00 0.00 0.00 0.00
Accounts Payable CR 0.00 0.00 0.00 0.00
Workers Compensation accrual CR 0.00 0.00 0.00 0.00
Accrued Health Insurance CR 0.00 0.00 0.00 0.00
Employee Liability - Misc. Payroll CR 0.00 0.00 0.00 0.00
Employee Liability - Accrued Payroll CR 0.00 0.00 0.00 0.00
Employee Liability - Prior Year Bonus's CR 0.00 0.00 0.00 0.00
Employee Liability - Savings Bonds CR 0.00 0.00 0.00 0.00
Employee Liability - Union Annuity CR 0.00 0.00 0.00 0.00
Employee Liability - Profit Sharing CR 0.00 0.00 0.00 0.00
Employee Liability - Holiday CR 0.00 0.00 0.00 0.00
Employee Liability - Vacation CR 0.00 0.00 0.00 0.00
Employee Liability - State Tax Withheld CR 0.00 0.00 0.00 0.00
Employee Liability - Health FSA CR 0.00 0.00 0.00 0.00
Employee Liability - Employer Taxes CR 0.00 0.00 0.00 0.00
Sales Tax CR 0.00 0.00 0.00 0.00
Deferred Revenue CR 0.00 0.00 0.00 0.00
L/T Pension & Post Retirement CR 0.00 0.00 0.00 0.00
------------------------------------------------------------------------------------------------------------------------------------
Net 0.00 0.00 0.00 0.00
====================================================================================================================================
Proration Item TOTAL TOTAL TOTAL TOTAL
OWNED CONFERENCE MANAGED TCS
HOTELS CENTERS HOTELS
-------------------------------------------------------------------------------------------------
House Funds DR 198,180.00 5,375.00 0.00 100.00
Guest Ledger DR 1,306,943.00 0.00 0.00 0.00
Travel Agent Liabilities CR 0.00 0.00 0.00 0.00
City Ledger DR 4,507,821.00 181,555.00 0.00 929,639.00
Provision for Doubtful Accounts CR (150,718.00) (2,000.00) 0.00 (7,048.00)
Unrealized Credit Card Comm Expense CR (43,750.00) 0.00 0.00 0.00
Advance Deposit Ledger CR (288,002.00) 0.00 0.00 0.00
Accounts Receivable - General DR 217,751.00 0.00 0.00 100.00
Returned Checks DR 6,821.00 0.00 0.00 0.00
Food Inventory DR 534,405.00 42,538.00 0.00 0.00
Beverage Inventory DR 307,289.00 8,384.00 0.00 0.00
Retail Inventory DR 273,064.00 0.00 0.00 0.00
Linen Inventory - Rooms Division DR 419,398.00 0.00 0.00 0.00
Linen Inventory - F&B Division DR 61,259.00 15,300.00 0.00 0.00
China Inventory DR 256,512.00 23,350.00 0.00 0.00
Glass Inventory DR 59,124.00 15,450.00 0.00 0.00
Silver Inventory DR 86,404.00 11,030.00 0.00 0.00
Amusement Ticket Inventories DR 922.00 0.00 0.00 0.00
Guest Supplies DR 137,573.00 1,000.00 0.00 0.00
Chemical Supplies DR 61,888.00 2,400.00 0.00 104,431.00
Shelf Inventory DR 0.00 0.00 0.00 291,524.00
Prepaid Expense (Sub Schedule) DR 89,056.00 0.00 0.00 0.00
Deposits DR 8,819.00 1,000.00 0.00 150.00
Tenant Security Deposits (Sub Schedule) CR (13,408.00) 0.00 0.00 0.00
Prepaid Tenant Rents (Sub Schedule) CR (100,578.00) 0.00 0.00 0.00
Accounts Payable CR (4,722,921.00) (38,588.00) 0.00 (253,892.00)
Workers Compensation accrual CR (9,659.00) (7,757.00) 0.00 (141,349.00)
Accrued Health Insurance CR (350,000.00) 0.00 0.00 0.00
Employee Liability - Misc. Payroll CR (1,761.00) 0.00 0.00 (211.00)
Employee Liability - Accrued Payroll CR (2,077,532.50) (20,272.50) 0.00 (152,515.00)
Employee Liability - Prior Year Bonus's CR 0.00 0.00 0.00 0.00
Employee Liability - Savings Bonds CR (517.00) 0.00 0.00 (45.00)
Employee Liability - Union Annuity CR (1,250,078.00) 0.00 0.00 (32,050.00)
Employee Liability - Profit Sharing CR (301,514.00) 0.00 0.00 0.00
Employee Liability - Holiday CR 0.00 0.00 0.00 0.00
Employee Liability - Vacation CR (1,007,371.00) (9,333.00) 0.00 (94,730.00)
Employee Liability - State Tax Withheld CR (131,950.00) (2,300.00) 0.00 (4,345.00)
Employee Liability - Health FSA CR (650.00) 0.00 0.00 (734.00)
Employee Liability - Employer Taxes CR (620,222.50) (3,447.50) 0.00 (40,252.50)
Sales Tax CR (1,745,378.35) (19,729.50) 0.00 (23,700.00)
Deferred Revenue CR (23,075.00) 0.00 0.00 0.00
L/T Pension & Post Retirement CR (150,000.00) 0.00 0.00 0.00
-------------------------------------------------------------------------------------------------
Net (4,455,856.35) 203,954.50 0.00 575,072.50
=================================================================================================
Note: 210,211,215 Includes Recorded and Accrued Liabilities
Note: 221 Accrued Payroll represents 2Weeks & 2 Days @ 10/15/97
Note: 243 Sales Tax Represents 1.5 Month Liability for Sept and Oct
19
SCHEDULE 1.1(d)
EMPLOYEE BENEFIT PLANS AND AGREEMENTS
Collective Bargaining or Similar Agreements
1. Working Agreement dated March 1, 1995 between Xxxxxx Park
Hotel and Hotel, Motel, Restaurant, Bar & Club Employees Union
Local 99 (Term: March 1, 1997 to March 1, 2000) [Xxxxxx Park
Hotel].
2. Collective Bargaining Agreement dated October 31, 1994 between
Xxxxxx Corporation/Xxxxxx'x, Inc. and Hotel, Hospital,
Restaurant and Tavern Employees Union, Local 21 (Term:
September 1, 1994 to August 31, 1997) [Rochester Hotels].
Currently being renegotiated.
3. Memorandum of Agreement dated as of May 1, 1997 between Xxxxxx
Corporation d.b.a. Plaza One, Inc. and Plumbers and
Pipefitters Local Union No. 25 (Term: May 1, 1997 to April 30,
2002).
Company Plans
KahlerShare
The Xxxxxx Corporation Hourly Employee's Pension Plan
The Xxxxxx Corporation Employee Medical Benefit Plan (sometimes referred to as
Xxxxxx Realty Corporation Employee Medical Benefit Plan)
Executive Dental Plan
Xxxxxx Group Life and Optional Life Insurance Plan
Executive Long-Term Disability Plan
Workers Compensation
The Xxxxxx Tax Savings Plan (Cafeteria Plan)
The Plumbers and Pipefitters Local Union No. 25 Benefit Funds (Local 25, Rock
Island, Illinois) (Management by Xxxxxx of Rock Island)
The Plumbers and Pipefitters National Pension Fund (Local 25, Rock Island,
Illinois) (Management by Xxxxxx of Rock Island)
The Hotel and Restaurant Employees' and Bartenders' Welfare Fund (Local 99,
Hibbing, Minnesota) (Employer is Improvement Limited Partnership)
Informational note provided by Xxxxxx in the Stock Purchase Agreement:
ACCUMULATED BENEFIT OBLIGATIONS
At December 31, 1996, the Xxxxxx Corporation Hourly Employees Pension
Plan had: an actuarial present value of vested benefit obligation of $2,866,000;
an accumulated benefit obligation of $2,946,000; a fair market value of plan
assets of $2,164,000; and, an unfunded projected benefit obligation (PBO) of
$782,000. The weighted-average discount rate used in determining the actuarial
present value of the PBO
-1-
20
was 7.25%; the expected long-term rate of return on assets was 8%; the 1983 GAM
mortality table was assumed; and the retirement age was assumed to be 65.
Participation in such Plan is limited to Company employees in the Rochester,
Minnesota area who are represented by Local 21 of the Hotel Employees and
Restaurant Employees Union. Currently, there are approximately 700 such
employees. Contributions to the Plan are made pursuant to the terms of a
collective bargaining agreement entered into between the Company and Local 21.
-2-
21
EXHIBIT A
HOTELS
================================================================================
PART I
================================================================================
PROPERTY NUMBER DESCRIPTION OF PROPERTY
--------------- -----------------------
K-4 Pocatello Park - Pocatello, ID
X-0 Xxxxx Xxxx Xxxxxx - Xxxxx, XX
X-0 Xxxxxxxx Xxxx - Xxxxxx, XX
X-0 Canyon Springs - Twin Falls, ID
K-9 Kahler Plaza Hotel - Rochester, MN
K-10 Retail - Xxxxxx Plaza Hotel - Rochester, MN
K-11 Retail - Xxxxxx Hotel - Rochester, MN
K-12 Xxxxxx Inn & Suite (f/k/a Clinic View) - Rochester, MN
X-00 Xxxxxxxx Xxxxxx - Xxxxxxxxxx, XX
X-00 Xxxxx Xxxx - Xxxx Xxxxx, XX
X-00 Xxxxxx Xxxx Xxxxx - Xxxxxxx, XX
================================================================================
PART II
================================================================================
PROPERTY NUMBER DESCRIPTION OF PROPERTY
--------------- -----------------------
X-0 Xxxxxx Xxxxx - Xxxx Xxxx Xxxx, XX
X-0 Xxxxxxx Xxxx - Xxxx Xxxx, XX
K-3 Sheraton San Marcos - Chandler, AZ
K-8 Xxxxxx Hotel - Rochester, MN
K-13 Holiday Inn - Rochester, MN
X-00 Xxxxxxxxxx Xxxx - Xxxx Xxxx Xxxx, XX
X-00 Xxxxx Xxxx - Xxxxx, XX
X-00 Xxxxx Xxxx - Xxxxx, XX
X-00 Xxxxxxxxx Xxx - Xxxxx, XX