Exhibit 3
PURCHASE AGREEMENT
FOR
UNITS OF LIMITED PARTNERSHIP INTEREST IN
WESTIN HOTELS LIMITED PARTNERSHIP
PURCHASE AGREEMENT, dated as of May 24, 2004, by and among, The
Madison Avenue Capital Group II Trust, a trust formed under the laws of
Colorado, Madison Liquidity Investors 104, LLC, Madison Liquidity Investors
100, LLC, Madison Liquidity 112, LLC, Madison Liquidity Investors 120, LLC,
Windy City Investment, LLC, Madison Liquidity Investors 103, LLC, Madison
Liquidity Investors 111, LLC, Madison Liquidity Investors 119, LLC (all
Delaware limited liability companies, unless otherwise indicated), (each a
"Seller" and collectively, the "Sellers"), Madison Capital Management, LLC,
a Nevada limited liability company (the "Holding Company"), and Kalmia
Investors, LLC, a Delaware limited liability company (the "Purchaser").
WHEREAS, the Sellers have heretofore acquired 10,512 units of
limited partnership interest (the "Units") in Westin Hotels Limited
Partnership, a Delaware corporation (the "Partnership");
WHEREAS, the Sellers desire to sell the Units to the Purchaser,
and the Purchaser desires to purchase the Units, subject to the terms and
conditions set forth herein;
WHEREAS, the Holding Company wishes to facilitate the transaction
contemplated hereby; and
WHEREAS, in connection with this Purchase Agreement and the
transaction contemplated herein, the Purchaser, the Sellers and the Holding
Company are simultaneously entering into a Security Agreement, dated as of
the date hereof, and Pledge Agreement, dated as of the date hereof
(collectively, the "Related Agreements").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for such other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto hereby
agree as follows:
ARTICLE I
PURCHASE AND SALE OF UNITS
1.1. Sale of Units. Upon the terms and subject to the conditions
of this Purchase Agreement, each of the Sellers hereby transfers and
assigns to the Purchaser, and the Purchaser hereby purchases from each of
the Sellers for valuable consideration as described in Section 1.2 below,
all of the Seller's right, title and interest in and to the number of Units
set forth on the Signature Page hereto, including, without limitation, all
rights in, and claims to, any Partnership profits and losses, cash
distributions, voting rights and other benefits of any nature whatsoever,
distributable or allocable to such Units under the partnership agreement of
the Partnership, and any rights attributable to claims, damages,
recoveries, including recoveries from class action lawsuits, and causes of
action accruing to the ownership of such Units.
1.2 Purchase Price; Payment in Full. The purchase price for the
Units shall be in an amount equal to U.S.$802.51 for each Unit totaling
U.S.$8,435,985.12 (the "Purchase Price") payable to each Seller in
accordance with the Signature Page hereto. Payment by the Purchaser to the
Sellers of the Purchase Price shall be made simultaneously with the
execution of this Purchase Agreement and shall represent payment in full of
all amounts due by Purchaser under this Purchase Agreement and the Related
Agreements.
1.3 Transfer Fees. The Purchaser agrees that the $50.00 transfer
fee per transferring limited partner of the Partnership charged by the
Partnership will be borne by the Purchaser. Each Seller individually and
not jointly agrees, and Purchaser agrees, that the taxable income and
taxable loss attributable to the transferred Units with respect to the
taxable period in which the transfer occurs shall be divided between and
allocated between the respective Seller and Purchaser as provided in the
partnership agreement of the Partnership.
ARTICLE II
AGREEMENTS OF THE SELLERS AND THE HOLDING COMPANY
Each of the Sellers individually and not jointly, and the Holding
Company jointly and severally with each Seller, agrees with the Purchaser,
as of the date hereof, as follows:
2.1 Proxy and Attorney-in-Fact. Such Seller hereby irrevocably
constitutes and appoints Purchaser as its true and lawful agent, proxy and
attorney-in-fact with respect to the Units with full power of substitution.
This proxy and power of attorney is an irrevocable power, coupled with an
interest of such Seller to Purchaser, to (i) execute, swear to,
acknowledge, and file any document relating to the transfer of the
ownership of the Units on the books of the Partnership that are maintained
with respect to the Units and on the Partnership's books maintained by the
general partner of the Partnership (the "General Partner"), or amend the
books and records of the Partnership as necessary or appropriate for the
withdrawal of such Seller as a limited partner of the Partnership; (ii)
vote or act in such manner as the Purchaser shall, in its sole discretion,
deem proper with respect to the Units; (iii) deliver the Units and transfer
ownership of the Units on the books of the Partnership that are maintained
with respect to the Units and on the Partnership's books, maintained by the
General Partner; (iv) endorse on such Seller's behalf any and all payments
received by Purchaser from the Partnership for any period on or after March
31, 2004, which are made payable to such Seller, in favor of Purchaser; (v)
execute on such Seller's behalf, any applications for transfer and any
distribution allocation agreements required by the National Association of
Securities Dealers, Inc.'s Notice to Members 96-14 to give effect to and in
a manner consistent with the transaction contemplated by this Purchase
Agreement; and (vi) receive all benefits and distributions and amend the
books and records of the Partnership, including such Seller's address and
record, to direct distributions to Purchaser as of March 31, 2004 and
otherwise exercise all rights of beneficial owner of the Units. The
Purchaser shall not be required to post bond of any nature in connection
with this power of attorney.
2.2 Partnership Distributions. The Purchaser will be entitled to
any distribution of cash, or any other distribution of value whatsoever is
made or declared by the Partnership to such Seller on or after March 31,
2004 ("Distributions"), with respect to the Units. Each Seller agrees,
individually and not jointly, that it will promptly pay over and deliver to
the Purchaser all Distributions made with respect to the Units which such
Seller may receive.
2.3 Partnership Correspondence. It shall promptly deliver to the
Purchaser all correspondence from the Partnership with respect to the Units
which such Seller may receive after the date of this Agreement.
2.4 Withdrawal from the Partnership; Instructions to the General
Partner. It desires to withdraw as a limited partner of the Partnership as
to the Units as of March 31, 2004 and shall cause the General Partner to
transfer the Units sold by it on the records of the Partnership to the name
of the Purchaser as of a date no earlier than March 31, 2004 in accordance
with the terms of the partnership agreement of the Partnership. Upon
execution of this Purchase Agreement, such Seller will deliver to the
General Partner a signed copy of the letter attached hereto as Exhibit A.
2.5 Further Assurance. It shall take all additional measures
which may be necessary or desirable to enforce the rights of the Purchasers
under this Purchase Agreement and effectuate the transfer of the ownership
of the Units to the Purchaser.
2.6 Maintaining Net Worth; Solvency. Each Seller (other than
Windy City Investment, LLC) agrees, individually and not jointly, that it
will maintain an aggregate net worth which exceeds the Purchase Price for
the Units sold by it pursuant to this transaction until the Partnership has
amended the books and records of the Partnership to reflect the admission
of the Purchaser as substitute limited partner with respect to the Units.
As of the date of this Agreement, Windy City Investment, LLC is not
insolvent and will not be rendered insolvent by reason of this transaction.
The Holding Company will maintain an aggregate net worth which exceeds the
Purchase Price for all Units sold by Sellers pursuant to this transaction
until the Partnership has fully recognized the transfer of ownership of all
Units to the Purchaser and has amended the books and records of the
Partnership to reflect the admission of the Purchaser as substitute limited
partner with respect to the Units,.
2.7 Incurring Debt. Each of the Sellers and Holding Company shall
not incur any indebtedness for borrowed money until the Partnership has
amended the books and records of the Partnership to reflect the admission
of the Purchaser as substitute limited partner with respect to the Units.
2.8 Indemnification. Each of the Sellers, individually and not
jointly, and the Holding Company jointly and severally with each Seller,
agrees to hold the Purchaser harmless from any losses (including reasonable
attorney's fees) or diminution in value of the Units resulting from any
violation of or misrepresentation with respect to any representation,
warranty, agreement or covenant contained in this Purchase Agreement or the
Related Agreements, the imposition of any intervening claims against such
Seller or the Holding Company, or the bankruptcy or insolvency of such
Seller or the Holding Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SELLERS AND THE HOLDING COMPANY
Except with respect to Section 3.7 below, each of the Sellers,
individually and not jointly, and the Holding Company jointly and severally
with each such Seller, represents and warrants to the Purchaser, as of the
date hereof, as follows:
3.1 Capacity; Authority; Validity. Such Seller and the Holding
Company have all necessary capacity, power and authority to enter into this
Purchase Agreement and to perform all the obligations to be performed,
respectively, by such Seller or the Holding Company hereunder; this
Purchase Agreement and the consummation by such Seller and the Holding
Company of the transactions contemplated hereby has been duly and validly
authorized by all necessary action of such Seller and Holding Company, as
the case may be; this Purchase Agreement has been duly executed and
delivered by such Seller and Holding Company; and assuming the due
execution and delivery of this Purchase Agreement by the Purchaser, this
Purchase Agreement constitutes the legal, valid and binding obligation of
such Seller and the Holding Company enforceable against such Seller and
Holding Company, as the case may be, in accordance with its terms except as
such enforcement may be limited by bankruptcy, insolvency, moratorium,
reorganization and other similar laws relating to or affecting the
enforcement of creditors' rights generally.
3.2 Title to Units. Such Seller owns the number of Units set
forth by its name on the signature page hereto, and has full power and
authority to validly sell, assign, transfer, convey, and deliver to the
Purchaser the Units, and upon the sale of the Units by such Seller, the
Purchaser will acquire good, marketable and unencumbered title thereto,
free and clear of all options, liens, restrictions, charges, encumbrances,
conditional sales agreements, or other obligations relating to the sale or
transfer thereof, and the Units will not be subject to any adverse claim.
Other than pursuant to this Purchase Agreement and the Related Agreements,
such Seller shall not sell, assign, or otherwise transfer all or any
portion of its right, title and interest in and to the Units, or create,
incur, assume or permit to exist any lien, pledge, claim, security
interest, encumbrance or charge of any kind on the Units.
3.3 No Violation of Law or Agreement. Neither the execution and
delivery of this Purchase Agreement or any of agreements executed in
connection with this Purchase Agreement by such Seller or the Holding
Company, nor the consummation of the transactions contemplated hereby by
such Seller or the Holding Company, will violate any judgment, order, writ,
decree, law, rule or regulation or agreement applicable to such Seller or
the Holding Company, as the case may be, or create any lien, pledge, claim,
security interest, encumbrance or charge of any kind over the Units other
than in favor of the Purchaser.
3.4 No Litigation or Claims. There are no outstanding
litigations, claims, judgments, decrees, orders awards, stipulations, or
injunctions against such Seller or the Holding Company, or with respect to
the Units, or to the knowledge of such Seller, are there any bases
therefor, except for such litigations, claims, judgments, decrees, orders,
awards, stipulations, or injunctions that would not have a material adverse
effect on the Holding Company or the respective Seller who is the subject
of such litigations, claims, judgments, decrees, orders awards,
stipulations, or injunctions, or the Units sold hereby.
3.5 Net worth; Solvency; Indebtedness. The individual net worth
of such Seller and of the Holding Company judged separately exceeds the
Purchase Price of the Units sold by such Seller hereunder. Such Seller and
Holding Company are solvent and will not be rendered insolvent as a result
the transfer and sale of the Units. Neither such Seller nor the Holding
Company currently has indebtedness for borrowed money.
3.6 Fair Value. Each Seller, individually and not jointly, and
the Holding Company, jointly with each Seller, acknowledges that the sale
of the Units by such Seller pursuant to this Agreement does not constitute
a fraudulent transfer under bankruptcy, insolvency, moratorium,
reorganization and other similar laws relating to or affecting the
enforcement of creditors' rights generally and that the Purchase Price to
be received by such Seller constitutes fair value for the Unites sold by
such Seller.
3.7 Financial Information. Holding Company hereby represents that
the financial disclosure provided to the Purchaser by the Holding Company
as to the Holding Company's financial condition is true and accurate except
for such errors or omissions that are not materially adverse.
3.8 Non-Affiliate Status. Such Seller is not an "affiliate" of
the Partnership, as such term is used in Rule 144 under the Securities Act
of 1933, as amended.
ARTICLE IV
MISCELLANEOUS
4.1 Notices. All notices and other communications by the Sellers,
the Purchaser or the Holding Company hereunder shall be in writing to the
other parties and shall be deemed to have been duly given when delivered in
person or by an overnight courier service, or sent via facsimile and
verification received, or when posted by the United States postal service,
registered or certified mail, return receipt requested with postage
prepaid, at the address set forth on the signature page hereto or to such
other addresses as a party may from time to time designate to the other
party by written notice thereof, effective only upon actual receipt.
4.2 Assignment. This Purchase Agreement shall not be assigned by
any party hereto without prior written consent of the other parties.
4.3 Successor and Assignees. This Agreement shall inure to the
benefit of and be binding upon each of the parties hereto, their successors
and assignees.
4.4 Entire Agreement. The Purchase Agreement and the Related
Agreements constitute the entire agreement by the parties hereto and
supersedes any other agreement, whether written or oral, that may have been
made or entered into between them relating to the matters contemplated
hereby.
4.5 Amendments and Waivers. This Purchase Agreement may be
amended, modified, superseded, or canceled, and any of the terms,
representations, warranties or covenants hereof may be waived, only by
written instrument executed by both of the parties hereto or, in the case
of a waiver, by the party waiving compliance.
4.6 Captions; Counterparts; Execution. The captions in this
Purchase Agreement are for convenience only and shall not be considered a
part of or affect the construction or interpretation of any provision of
this Purchase Agreement. This Purchase Agreement may be executed in one or
more counterparts, each of which shall be an original, but all of which
together shall constitute one and the same instrument.
4.7 Governing Law; Limitation of Damages. This Purchase Agreement
shall be governed by and construed in accordance with the laws of the State
of Delaware without regard to conflicts of laws principles. The Sellers,
Purchaser, and the Holding Company waive any claim that Delaware or the
United States Federal District Court for the District of Delaware is an
inconvenient forum, and waive any right to trial by jury. The Sellers,
Purchaser, and the Holding Company hereby agree that no punitive or
consequential damages shall be recoverable against any party in any action
or proceeding brought pursuant to this Purchase Agreement or any of the
Related Agreements.
IN WITNESS WHEREOF, The Purchaser, the Sellers and the Holding
Company have caused this Purchase Agreement to be duly executed as of the
date first above written.
THE MADISON AVENUE CAPITAL GROUP II
TRUST
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
Managing Director
Number of Units: 15
Purchase Price: $12,376.65
MADISON LIQUIDITY INVESTORS 104, LLC
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
Managing Director
Number of Units: 72
Purchase Price: $57,780.72
MADISON LIQUIDITY INVESTORS 100, LLC
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
Managing Director
Number of Units: 863
Purchase Price: $692,566.13
MADISON LIQUIDITY INVESTORS 112, LLC
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
Managing Director
Number of Units: 127
Purchase Price: $101,918.77
MADISON LIQUIDITY INVESTORS 120, LLC
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
Managing Director
Number of Units: 674
Purchase Price: $540,891.74
WINDY CITY INVESTMENT, LLC
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
Managing Director
Number of Units: 6,156
Purchase Price: $4,940,251.56
MADISON LIQUIDITY INVESTORS 103, LLC
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Number of Units: 998
Purchase Price: $800,904.98
MADISON LIQUIDITY INVESTORS 111, LLC
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
Managing Director
Number of Units: 1,262
Purchase Price: $1,012,767.62
MADISON LIQUIDITY INVESTORS 119, LLC
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Number of Units: 345
Purchase Price: $276,865.95
MADISON CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
Managing Director
KALMIA INVESTORS, LLC
By: Smithtown Bay, LLC
Manager
By: Global Capital Management, Inc.
Manager
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Xxxxxx Xxxxxxx
Vice President
EXHIBIT A
May 24, 2004
Westin Realty Corp.
0000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx
Attn: Board of Directors
Dear Sirs:
We are currently the holders of [ ] units of limited partnership
interest (the "Units") in Westin Hotels Limited Partnership, a Delaware
corporation (the "Partnership"). We have entered in a Purchase Agreement,
dated May 24, 2004, with Kalmia Investors, LLC ("Kalmia"), whereby we have
agreed to sell, transfer and assign all of our rights and interests in the
Units to Kalmia.
We hereby irrevocably direct the Partnership and general partner
of the Partnership (the "General Partner") to immediately (i) amend the
books and records of the Partnership to change our address of record and to
recognize Kalmia for the purpose of receiving all future distributions with
respect to the Units and all other information from us to Kalmia, 000
Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000, (ii) to forward all
distributions and all other information with respect to the Units to be
received by us to Kalmia at the address set forth in (i) above, and (iii)
to acknowledge the transfer the Units on the records of the Partnership
from us to Kalmia and to amend the books and records of the Partnership to
reflect such transfer. This letter is not intended to effect any changes in
the books and records of the Partnership or further action by the
Partnership insofar as such books, records and actions relate to interests
that we may have in the Partnership other than the Units. Kalmia is the
true and lawful agent, proxy and attorney-in-fact with respect to the Units
with full power of substitution.
Sincerely,
[Name of Seller]
21919.0001 #479902v4
