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EXHIBIT 2.2
JOINT VENTURE PURCHASE AGREEMENT
DATED AS OF
NOVEMBER 9, 2005
BY AND AMONG
ARLINGTON HOSPITALITY DEVELOPMENT, INC.
ARLINGTON INNS OF AMERICA, INC.,
SJB EQUITIES, INC.,
SJB DEVELOPMENT, INC.,
AND
SJB PROPERTIES, INC.
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TABLE OF CONTENTS
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DESCRIPTION
PAGE
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Article I
DEFINITIONS.............................................................................................1
Section
1.1
Definitions..............................................................................1
Section
1.2
Construction.............................................................................4
Article II PURCHASE OF JOINT VENTURES AND
CONSTRUCTION
CONTRACTS..................................................5
Section
2.1
Purchase of Joint
Ventures...............................................................5
Section
2.2
Purchase of Construction
Contracts.......................................................5
Article III PURCHASE PRICE AND
CLOSING............................................................................6
Section
3.1
Closing..................................................................................6
Section
3.2
Purchase
Price...........................................................................6
Section
3.3
Deposit..................................................................................6
Article IV REPRESENTATIONS AND WARRANTIES
OF THE
SELLERs..........................................................7
Section
4.1
Organization.............................................................................7
Section
4.2
Authorization of
Transaction.............................................................7
Section
4.3
Noncontravention;
Consents...............................................................7
Section
4.4
Title....................................................................................7
Section
4.5
LIMITATION ON
WARRANTIES.................................................................8
Article V REPRESENTATIONS AND WARRANTIES OF
THE
BUYERS............................................................8
Section
5.1
Organization.............................................................................8
Section
5.2
Authorization of
Transaction.............................................................8
Section
5.3
Noncontravention;
Consents...............................................................9
Section
5.4
Litigation...............................................................................9
Section
5.5
Availability of
Funds....................................................................9
Section
5.6
Accredited
Investor......................................................................9
Section
5.7
LIMITATION ON THE WARRANTIES OF THE
SELLERS.............................................10
Article VI
COVENANTS.............................................................................................10
Section
6.1
General.................................................................................10
Section
6.2
Notices and
Consents....................................................................10
Section
6.3
Transfer
Taxes..........................................................................11
Article VII CLOSING
CONDITIONS...................................................................................11
Section
7.1
Conditions to Obligations of the
Buyers.................................................11
Section
7.2
Conditions to Obligations of the
Sellers................................................12
Article VIII
TERMINATION.........................................................................................12
Section
8.1
Termination of
Agreement................................................................12
Section
8.2
Effect of
Termination...................................................................13
Section
8.3
Break-Up
Fee............................................................................13
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ARTICLE IX
MISCELLANEOUS.........................................................................................13
Section
9.1
Notices.................................................................................13
Section
9.2
Expenses; No
Offset.....................................................................14
Section
9.3
Bulk Sales or Transfer
Laws.............................................................14
Section
9.4
Assignment; Successors and
Assigns......................................................14
Section
9.5
Amendment;
Waiver.......................................................................15
Section
9.6
Severability; Specific
Performance......................................................15
Section
9.7
Counterparts............................................................................15
Section
9.8
Descriptive
Headings....................................................................15
Section
9.9
No Third-Party
Beneficiaries............................................................15
Section
9.10
Entire
Agreement........................................................................15
Section
9.11
Exhibits................................................................................15
Section
9.12
GOVERNING
LAW...........................................................................15
Section
9.13
Public
Announcement.....................................................................16
Section
9.14
Recitals................................................................................16
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EXHIBITS
Exhibit A AIA Ownership of
Joint Ventures
Exhibit B Construction
Contracts
Exhibit C Personal
Property and Equipment
Exhibit D Construction
Contracts -- Assignment and Assumption Agreement
Exhibit E Joint Ventures
-- Assignment and Assumption Agreement
Exhibit F Personal
Property and Equipment -- Bill of Sale
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JOINT VENTURE PURCHASE AGREEMENT
This JOINT VENTURE PURCHASE AGREEMENT (this "Agreement") dated as
of
November ___, 2005 is entered into by and
among Arlington Hospitality
Development, Inc., an Illinois corporation
("AHD"), Arlington Inns of America,
Inc., a Delaware corporation ("AIA" and
together with AHD, the "Sellers"), SJB
Equities, Inc., an Ohio corporation
("SJBE"), SJB Development, Inc., an Ohio
corporation ("SJBD"), and SJB Properties,
Inc., an Ohio corporation ("SJBP" and
together with SJBE and SJBD, the
"Buyers").
WHEREAS, AIA owns a percentage of the membership interests in
Maumee,
Ohio 901 Ltd., an Ohio limited liability
company ("Maumee"), Rickenbacker 1001
LLC, an Ohio limited liability company
("Rickenbacker"), Weirton 902 LLC, a West
Virginia limited liability company
("Weirton") and Columbus Airpointe 804 LLC,
an Ohio limited liability company
("Airpointe" and together with Maumee,
Rickenbacker and Weirton, the "Joint
Ventures"), in each case, as set forth on
Exhibit A attached hereto.
WHEREAS, AHD is a party to certain contracts pertaining to the
construction of a hotel for Airpointe,
which contracts are set forth on Exhibit
B attached hereto (the "Construction
Contracts"), and AHD is the owner of
certain personal property and equipment
being utilized in connection with
Airpointe and the Construction Contracts,
which personal property and equipment
is set forth on Exhibit C attached hereto
(the "Personal Property and
Equipment").
WHEREAS, this Agreement contemplates a transaction in which the
Buyers
will acquire all of the membership
interests of AIA in the Joint Ventures, will
acquire the rights of, and assume the
liabilities of, AHD under the Construction
Contracts, and will acquire the Personal
Property and Equipment, all on the
terms and subject to the conditions set
forth in this Agreement.
WHEREAS, each of the Sellers has filed a voluntary petition in
the
United States Bankruptcy Court for the
Northern District of Illinois, Eastern
Division (the "Bankruptcy Court") for
relief in a bankruptcy case (collectively,
the "Bankruptcy Case") filed under Chapter
11 of Title 11 of the United States
Code (the "Bankruptcy Code").
NOW, THEREFORE, in consideration of the foregoing and the
mutual
agreements contained herein, and for other
good and valuable consideration, the
value, receipt and sufficiency of which are
acknowledged, the Parties hereby
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. For purposes of this Agreement, the
following
terms have the meanings set forth
below:
"Affiliates" has the meaning set forth in Rule l2b-2 of the
regulations
promulgated under the Securities Exchange
Act of 1934, as amended.
"Agreement" has the meaning set forth in the Preamble.
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"AHD" has the meaning set forth in the Preamble.
"AIA" has the meaning set forth in the Preamble.
"Airpointe" has the meaning set forth in the Recitals.
"Alternative Transaction" means the sale, transfer or other
disposition
of the Construction Contracts and Joint
Ventures to a third party unaffiliated
with the Buyers, the Sellers or any of
their respective Affiliates.
"Ancillary Documents" means each certificate and other document to
be
delivered pursuant to ARTICLE VII.
"Approval Order" means an order from the Bankruptcy Court (i)
approving
the transactions contemplated by this
Agreement pursuant to Section 363 of the
Bankruptcy Code, (ii) approving the
assignment to and assumption by the Buyers
of the Construction Contracts pursuant to
Section 365 of the Bankruptcy Code,
(iii) containing findings of fact and
rulings that each of the Buyers is a good
faith purchaser entitled to the protections
of Section 363(m) of the Bankruptcy
Code; and (iv) which is otherwise
reasonably acceptable to the Buyers.
"Assignment and Assumption Agreement" has the meaning set forth
in
SECTION 7.1(c)(i).
"Bankruptcy
Case" has the meaning set forth in the Recitals.
"Bankruptcy Code" has the meaning set forth in the Recitals.
"Bankruptcy Court" has the meaning set forth in the Recitals.
"Break-Up Fee" has the meaning set forth in SECTION 8.3(a).
"Buyer Material Adverse Effect" has the meaning set forth in
SECTION
5.1.
"Buyers" has the meaning set forth in the Preamble.
"Cendant Franchise Agreements" means those certain franchise
agreements
between one or more of the Sellers and
affiliates of Cendant Finance Holding
Corporation as set forth on
Schedule_1.1.
"Closing" has the meaning set forth in SECTION 3.1.
"Closing Date" has the meaning set forth in SECTION 3.1.
"Construction Contracts" has the meaning set forth in the
Recitals.
"Deposit" has the meaning set forth in SECTION 3.3.
"Escrow Agent" means Jenner & Block LLP.
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"Governmental Entity" means the United States, any state or
other
political subdivision thereof and any other
foreign or domestic entity
exercising executive, legislative,
judicial, regulatory or administrative
functions of or pertaining to government,
including any government authority,
agency, department, board, commission,
court, tribunal or instrumentality of the
United States or any foreign entity, any
state of the United States or any
political subdivision of any of the
foregoing.
"Joint Ventures" has the meaning set forth in the Recitals.
"Law" means any applicable federal, state, local or foreign
law,
statute, common law, rule, regulation,
ordinance, permit, order, writ,
injunction, judgment or decree of any
Governmental Entity.
"Lien" means any pledge, security interest, charge, claim or
other
encumbrance.
"Material Adverse Effect" means any event, change or effect which
is
materially adverse to the business,
operations (including results of operations)
or condition (financial or otherwise) of
the Joint Ventures taken as a whole;
provided, however, that "Material Adverse
Effect" will not include, and the
determination of the existence of a
Material Adverse Effect shall not take into
account, any of the following: (a) changes
or effects that generally affect the
industries in which the Joint Ventures
operate, (b) changes in or effects from
securities markets or general economic,
regulatory or political conditions in
the United States not uniquely related to
the Sellers or the Joint Ventures
(including terrorism or the escalation of
any war whether declared or undeclared
or other hostilities), (c) changes or
effects arising out of, or attributable
to, the announcement of the execution of
this Agreement, the compliance by the
Sellers with their obligations hereunder,
the consummation of the transactions
contemplated hereby or the identity of the
Buyers, (d) changes or effects due to
changes in any Laws affecting the Joint
Ventures or (e) the failure of the Joint
Ventures to meet any internal projections
or forecasts.
"Maumee" has the meaning set forth in the Recitals.
"1933 Act" has the meaning set forth in SECTION 5.6.
"Parties" means the Sellers and the Buyers together, and "Party"
means
the Sellers, on the one hand, or the
Buyers, on the other hand, as the case may
be.
"Permitted Liens" means any (a) mechanics', materialmens', trade
and
similar Liens with respect to amounts not
yet due and payable, (b) Liens for
Taxes not yet due and payable or the
validity of which is being contested in
good faith by appropriate proceedings, (c)
Liens or imperfections in or failure
of title which do not materially interfere
with the present use of the assets of
the Joint Ventures, and (d) Liens the
existence of which would not result in a
Material Adverse Effect.
"Person" means an individual, partnership, limited partnership,
corporation, limited liability company,
association, joint stock company, trust,
joint venture, unincorporated organization
or Governmental Entity.
"Personal Property and Equipment" has the meaning set forth in
the
Recitals.
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"Purchase Price" has the meaning set forth in SECTION 3.2.
"Rickenbacker" has the meaning set forth in the Recitals.
"Sellers" has the meaning set forth in the Preamble.
"Sellers' Knowledge" means the actual knowledge of James Dale,
Stephen
Miller, Paul McCarty, Deedee Grammas, Rich
Cybulski, and Leon Vainikos.
"SJBD" has the meaning set forth in the Preamble.
"SJBE" has the meaning set forth in the Preamble.
"SJBP" has the meaning set forth in the Preamble.
"Tax" or "Taxes" means a tax or taxes of any kind or nature, or
however
denominated, including liability for
federal, state, local or foreign income,
sales, use, transfer, registration,
business and occupation, value added,
excise, severance, stamp, premium, windfall
profit, customs, duties, real
property, personal property, capital stock,
social security, unemployment,
disability, payroll, license, employee or
other withholding, or other tax, of
any kind whatsoever, including any
interest, penalties or additions to tax or
additional amounts in respect to the
foregoing, including any transferee or
secondary liability for a tax and any
liability assumed by agreement or arising
as a result of being or ceasing to be a
member of any affiliated group, or being
included or required to be included in any
Tax Return relating thereto.
"Tax Returns" means, with respect to any Tax, any information
return
for such Tax, and any return, report,
statement, declaration, claim for refund
or document filed or required to be filed
under the Law for such Tax.
"Weirton" has the meaning set forth in the Recitals.
Section 1.2 Construction.
(a) For purposes of this Agreement, whenever the context requires,
the
singular number will include the plural,
and vice versa, the masculine gender
will include the feminine and neuter
genders, the feminine gender will include
the masculine and neuter genders, and the
neuter gender will include the
masculine and feminine genders.
(b) As used in this Agreement, the words "include" and "including,"
and
variations thereof, will not be deemed to
be terms of limitation, but rather
will be deemed to be followed by the words
"without limitation."
(c) Except as otherwise indicated, all references in this Agreement
to
"Sections" and "Exhibits" are intended to
refer to Sections and Exhibits to this
Agreement.
(d) As used in this Agreement, the terms "hereof," "hereunder,"
"herein" and words of similar import will
refer to this Agreement as a whole and
not to any particular provision of this
Agreement.
4
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(e) Each Party hereto has participated in the drafting of this
Agreement, which each Party acknowledges is
the result of extensive negotiations
between the Parties. Consequently, this
Agreement will be interpreted without
reference to any rule or precept of Law to
the effect that any ambiguity in a
document be construed against the
drafter.
ARTICLE II
PURCHASE OF JOINT VENTURES
AND CONSTRUCTION CONTRACTS
Section 2.1 Purchase of Joint Ventures. On the terms and subject to
the
conditions set forth in this Agreement, at
the Closing, the Buyers will purchase
from AIA, and AIA will sell, assign, convey
and deliver, free and clear of any
Liens other than Permitted Liens:
(i) to SJBE, all of AIA's rights, title and interest in and to
its
membership interest in Maumee and any other financial obligations
of
Maumee;
(ii) to SJBD, all of AIA's rights, title and interest in and to
its membership interest in Rickenbacker and Airpointe and any
other
financial obligations of Rickenbacker and Airpointe; and
(iii) to SJBP, all of AIA's membership interests in Weirton.
Section 2.2 Purchase of Construction Contracts.
(a) On the terms and subject to the conditions set forth in
this
Agreement, at the Closing, the Buyers
will:
(i) purchase from AHD, and AHD will sell, assign, convey and
deliver to the Buyers, the Construction Contracts; and
(ii) assume and agree to perform only those executory
obligations
of AHD under the Construction Contracts first incurred and coming
due
after Closing under the express terms of the Construction
Contracts;
(b) from and after the Seller's acceptance of this Agreement
through
Closing, no cash disbursements may be made
under or related to the Construction
Contracts without Buyers' prior written
approval, no additional Construction
Contracts may be entered into without
Buyers' prior written approval, and no
change, modification or amendment may be
made to any existing Construction
Contract without Buyers' prior written
approval which shall not be unreasonably
withheld.
Section 2.3 Purchase of Personal Property and Equipment. On the
terms
and subject to the conditions set forth in
this Agreement, at the Closing, the
Buyers will purchase from AHD, and AHD will
sell, assign, convey and deliver to
Buyers, free and clear of any Liens other
than Permitted Liens, the Personal
Property and Equipment.
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ARTICLE III
PURCHASE PRICE AND CLOSING
Section 3.1 Closing. The closing of the transactions contemplated
by
this Agreement (the "Closing") will occur
as promptly as practicable, but in no
event more than five business days,
following the satisfaction and/or waiver of
all conditions to Closing set forth in
ARTICLE VII (other than any of such
conditions that by its nature is to be
satisfied at the Closing, but subject to
the satisfaction or waiver of such
conditions), at the offices of Jenner & Block
LLP, One IBM Plaza, Chicago, IL 60611, or
at such other place on such other date
as the Parties may agree in writing. The
date on which the Closing actually
occurs will be referred to as the "Closing
Date," and the Closing will be deemed
effective as of 6:00 p.m., Central time on
the Closing Date.
Section 3.2 Purchase Price.
(a) Subject to Section 3.2(b) below, on the terms and subject to
the
conditions set forth in this Agreement, at
the Closing, the Buyers will pay and
deliver to the Sellers the sum of One
Hundred Thousand Dollars ($100,000.00) in
cash by wire transfer of immediately
available funds to an account or accounts
designated by the Sellers (the "Purchase
Price").
(b) Notwithstanding Section 3.2(a) above, the Purchase Price shall
be
increased to an amount equal to Two Hundred
Thousand Dollars ($200,000.00) if,
at or prior to Closing, Sellers provide to
Buyers evidence that the economic
terms of the Cendant Franchise Agreements
will be unchanged and unaffected by
virtue of this Agreement and the
transactions contemplated hereby (including,
without limitation, the sale and purchase
of the membership interests in Maumee,
Rickenbacker, Airpointe, and Weirton);
provided that such evidence, in the form
of a final order of the Bankruptcy Court or
other court of competent
jurisdiction or an amendment, modification
or supplement to the Cendant
Franchise Agreements, or otherwise, must be
acceptable to the Buyers in their
sole discretion.
Section 3.3 Deposit. Promptly, but in no event more than two
business
days after the date hereof, the Buyers
shall deliver a certified or cashier's
check made payable to the Sellers and drawn
on a bank which is reasonably
acceptable to the Sellers or a federal wire
transfer of immediately available
funds, in an amount equal to Fifty Thousand
Dollars ($50,000.00), to the Escrow
Agent, as an earnest money deposit
hereunder (including interest at any time
accrued thereon, the "Deposit"). The
Deposit shall be held in escrow by the
Escrow Agent in a segregated,
interest-bearing account of a federally insured
commercial bank and disbursed only in
accordance with the terms of this
Agreement. The Buyers shall pay all costs
and expenses associated with the
engagement of the Escrow Agent. If the
Closing takes place, the Escrow Agent
shall deliver the Deposit to the Sellers at
the Closing. If this Agreement is
terminated or becomes null and void for any
reason other than the material
breach by any of the Buyers of its
obligations hereunder, the Deposit shall be
promptly paid within two days to the
Buyers. If this Agreement is terminated by
the Sellers by reason of the material
breach by any of the Buyers of its
obligations hereunder, the Deposit shall be
paid to the Sellers as liquidated
damages and not a penalty with such
payment, once received, being Seller's sole
and exclusive remedy against the Buyers.
Notwithstanding the foregoing in this
SECTION 3.3, the Escrow Agent shall not
disburse the Deposit until the earlier
to occur of (i) receipt by the Escrow Agent
of joint written instructions,
signed by the Sellers and the Buyers, or
(ii) entry of a final and nonappealable
6
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adjudication of the Bankruptcy Court
determining which Party is entitled to
receive the Deposit. In the event of a
dispute between the Parties with respect
to the Deposit, the Escrow Agent may
deposit the Deposit with the Bankruptcy
Court and commence an action to determine
the proper disposition of such
Deposit.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers represent and warrant to the Buyers as follows:
Section 4.1 Organization. Each Seller is a corporation duly
organized,
validly existing and in good standing under
the laws of its state of
incorporation. The Sellers are duly
qualified or licensed to do business as a
foreign entity and are in good standing in
each jurisdiction in which the
conduct of their business requires such
qualification or license, except where
the failure to be so qualified or be so
licensed would not reasonably be
expected to result in a Material Adverse
Effect.
Section 4.2 Authorization of Transaction. Subject to the entry of
the
Approval Order, each Seller has all
requisite power and authority to execute,
deliver and perform this Agreement and each
of the Ancillary Documents to which
it is a party. Subject to the entry of the
Approval Order, this Agreement
constitutes, and each of such Ancillary
Documents when executed and delivered by
such Seller will constitute, a valid and
legally binding obligation of such
Seller (assuming that this Agreement and
such Ancillary Documents constitute
valid and legally binding obligations of
the other parties thereto), enforceable
in accordance with its terms and
conditions, except as enforceability may be
limited by applicable bankruptcy,
insolvency, reorganization, moratorium,
fraudulent transfer and similar Laws of
general applicability relating to or
affecting creditors' rights, or by general
equity principles, including
principles of commercial reasonableness,
good faith and fair dealing.
Section 4.3 Noncontravention; Consents. Except for the
Bankruptcy
Court's entry of the Approval Order, no
material consent, release,
authorization, order or approval of, or
filing or registration with, any
governmental authority or other person is
required for the execution and
delivery of this Agreement and the
Ancillary Documents to be executed and
delivered by the Sellers hereunder and the
consummation by the Sellers of the
transactions contemplated. Except for the
Bankruptcy Court's entry of the
Approval Order, neither the execution and
delivery by the Sellers of this
Agreement and the Ancillary Documents, nor
the consummation by the Sellers of
the transactions contemplated hereby and
thereby, will conflict with or result
in a breach of any of the terms, conditions
or provisions of the Sellers'
respective certificates of incorporation or
by-laws, any statute or
administrative regulation, or of any order,
writ, injunction, judgment or decree
of any court or any governmental authority
or of any arbitration award, which
conflict or breach would reasonably be
expected to have a Material A
