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EXHIBIT 2.(d)(1)
MAISON ▇▇▇▇▇ HOTEL
NEW ORLEANS, LOUISIANA
PROFIT PARTICIPATION AGREEMENT
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THIS PROFIT PARTICIPATION AGREEMENT (this "Agreement") is made as of this
16th day of October, 1996, by and between THI FQ L.P., a Delaware limited
partnership ("THI") and Great AQ Steamboat Co. ("Participant"), a Delaware
corporation.
Preliminary Recitals
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A. Participant, as Seller, and ▇▇▇▇▇▇ Hotel Investments L.P. (the general
partner of THI), as Buyer, among others, have entered into that certain Amended
and Restated Purchase Agreement dated August 19, 1996 (the " Purchase
Agreement");
B. As additional consideration under the Purchase Agreement, THI provided
Participant a "Profit Participation" in the Property (as such term is
hereinafter defined), in an amount not to exceed $2.0 Million, in accordance
with and subject to the terms of this Agreement; and
C. As required by and in accordance with the Purchase Agreement, and for
Ten Dollars ($10.00) in hand paid, being good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, THI and Participant
have entered into this Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Preamble and Preliminary Recitals. The Preamble and Preliminary
Recitals set forth above are hereby incorporated in and made a part of this
Agreement.
2. Definition. As used in this Agreement, each of the following terms
shall have the meaning ascribed in this Section 2.
A. "Base Payment Amount" means the minimum amount to be paid on
account of the Profit Participation; which amount shall be $300,000 during the
period commencing on the date hereof and ending on the third anniversary
hereof, and $500,000 thereafter.
B. "Disposition" means any sale, exchange, refinancing or other
transaction with a bona fide third party which, constitutes a capital event
with respect to all or substantially all the Property or any portion thereof or
interest therein.
C. "Distribution" means any distribution made by THI to the
Partners (as such term is hereinafter defined) from revenues generated
by the Property (such as net operating income, sale and refinancing proceeds
and condemnation and insurance proceeds), whether the distribution is made in
cash or other property (with such other property being valued for this purpose
at its fair market value as of the date of the distribution), but only after
paying or providing for all expenses and other liabilities arising from or with
respect to the Property or any part thereof or interest therein; provided,
however, a "Distribution" shall not be deemed to include "Net Disposition
Proceeds" (as such term is hereinafter defined).
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D. "Equity Amount" means, as of any particular date, the amount
equal to all cash paid or invested in THI by the Partners from their
own funds (and not from revenues generated by the Property) in connection with
the ownership of the Property.
E. "Excess Operating Income" means, with respect to THI, for any
trailing twelve (12) month period, the surplus of: (i) income generated
from the Property before giving effect to interest expense, federal, state and
local income and franchise tax expense, depreciation expense, amortization
expense, related party expenses in excess of market rates, and any other
non-cash item which would have the effect of reducing net income for such
period (all as reflected by THI on its financial statements, consistently
applied); over (ii) the Pro Forma Operating Income for the periods and in the
amounts set forth on Exhibit A attached hereto (years 2-5 consistent with those
figures presented to the Partners advisory board), adjusted to reflect the
trailing twelve (12) month period as appropriate.
F. "Net Disposition Proceeds" means the net proceeds from the
Disposition of the Property after deducting any expenses in connection
therewith (but only bona fide third party expenses and related party expenses
at market rates) and any amounts applied toward the payment of any indebtedness
of THI (including Partner Loans).
G. "Partners" means ▇▇▇▇▇▇ Hotel Investments L.P., a Delaware
limited partnership, ▇▇▇▇▇▇ Hotel Investors II L.P., a Delaware limited
partnership and THIE New Orleans Investment L.P., a Delaware limited
partnership, and their respective successors and assigns, and any other
partners of THI.
H. "Person" means any individual, corporation, partnership or
entity.
I. "Preferred Return Amount" means the amount (not less than
zero) which, taking into account all other Distributions previously
made to the Partners, will result in such Partners having received total
Distributions that result in an "internal rate of return" to such Partners of
twenty-five percent (25%) with respect to the aggregate Equity Amount. As used
herein, "internal rate of return" is the annual discount rate at which the
aggregate present value, computed as of the date hereof, of all Distributions
made to Partners would equal the sum of (i) the initial Equity Amount plus (ii)
the aggregate present value, computed as of date hereof, of any additional
Equity Amounts contributed by the Partners, using in such calculation an annual
discount rate of twenty-five percent (25%) for the period from the date hereof
to the date of contribution of each Equity Amount. For purposes of this
calculation, Distributions (i) shall be made in accordance with THI's limited
partnership agreement and in no event shall excess cash flow from the Property
be distributed less frequently than every twelve (12) months, and (ii) made
other than on an anniversary of the date hereof shall be discounted back to the
nearest anniversary of the date hereof at an annual rate of twenty-five percent
(25%).
J. "Property" means that property commonly known as the Maison
▇▇▇▇▇ Hotel, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ (the legal
description of which is set forth on Exhibit A to the Purchase Agreement); all
improvements and additions thereto, and all replacements of any thereof as
existing from time to time; and all rents, profits and proceeds thereof.
3. Profit Participation.
(a) Upon a Disposition, THI shall, not later than thirty (30) days
thereafter, pay to Participant an amount, not to exceed $2.0 Million, equal to
the greater of (i) the Base Payment Amount, or (ii) fifty percent (50%) of the
excess of the Net Disposition Proceeds over the Preferred
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Return Amount, whereupon this Agreement shall terminate and neither party shall
have any further liability hereunder.
(b) If, after the seventh (7th) anniversary hereof, THI has
neither completed a Disposition of the Property nor exercised its call
rights pursuant to Section 4 below, THI shall pay to Participant, not later
than thirty (30) days thereafter, the greater of (i) the Base Payment Amount,
or (ii) an amount, not to exceed $2.0 Million, equal to fifty percent (50%) of
the Excess Operating Income multiplied by ten (10), whereupon this Agreement
shall terminate and neither party shall have any further liability hereunder.
4. THI's Call Rights.
(a) Any time after the first anniversary hereof, THI shall
have the right to terminate the Profit Participation by giving written
notice to Participant and paying to Participant the greater of (i) the Base
Payment Amount, or (ii) an amount, not to exceed $2.0 Million, equal to fifty
percent (50%) of the Excess Operating Income multiplied by ten (10), whereupon
this Agreement shall terminate and neither party shall have any further
liability hereunder, except as expressly set forth in paragraph 4(b) below.
(b) Notwithstanding the terms of paragraph 4(a) above, if at
any time within six (6) months after THI exercises its rights as set
forth in paragraph 4(a) above, THI completes a Disposition of the Property,
then Participant shall be entitled to an amount (which, when added to any
amount paid pursuant to paragraph 4(a) does not to exceed $2.0 Million), which
is the excess of the amount calculated under paragraph 3(a) over the amount
paid under paragraph 4(a), whereupon this Agreement shall terminate and neither
party shall have any further liability hereunder.
5. Periodic Statements and Inspection Rights. THI shall deliver to
Participant annual operating and financial statements with respect to the
Property in such form as is then available within ninety (90) days following
year end. In addition, Participant shall, upon reasonable advance written
notice, have the right to review and inspect the books and records of THI with
respect to the Property, at the sole cost and expense of Participant.
6. Offset Rights. THI shall have the right to offset against any
amounts due to Participant hereunder any amounts due from Participant
under, and in accordance with, the Preferred Provider Agreement (as such term
is defined in the Purchase Agreement) of even date herewith.
7. Notices. All notices, requests, demands or other communications
required or permitted under this Agreement shall be in writing and delivered
personally or by certified mail, return receipt requested, postage prepaid, by
telecopy or other facsimile transmission, or by overnight courier (such as
Federal Express), addressed as follows:
If to Participant: With a copy to:
American Classic Voyages Co. Two North Riverside Plaza, Suite ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ATTN: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
ATTN: Jordan ▇. ▇▇▇▇▇, FAX: 312/▇▇▇-▇▇▇▇
Sr. VP/General Counsel
FAX: 312/▇▇▇-▇▇▇▇
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If to THI: With a copy to:
▇▇▇▇▇▇ Hotel Investments ▇.▇. ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ATTN: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, Esq.
ATTN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. FAX: 202/▇▇▇-▇▇▇▇
FAX: 410/▇▇▇-▇▇▇▇
All notices given in accordance with the terms hereof shall be deemed received
forty-eight (48) hours after posting, or otherwise when delivered. Either
party hereto may change the address for receiving notices, requests, demands or
other communication by notice sent in accordance with the terms of this Section
7.
8. Modification. No provision of this Agreement may be changed,
modified, terminated or waived except by a written instrument executed
by both THI and Participant.
9. No Member or Partner. By its execution of this Agreement,
Participant does not become a member or partner of or with THI, and
accordingly, Participant does not and shall not maintain that it owns an equity
interest in the Property or that it is a partner of THI, whether for federal
income tax purposes or otherwise.
10. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of THI and Participant and their respective successors and
assigns.
11. Remedies. Upon a default by either THI or Participant under this
Agreement, the nondefaulting party shall have such rights and remedies as are
available with respect thereto at law (but not in equity).
12. Governing Law. This Agreement shall be governed by and interpreted
and construed in accordance with the laws of the State of Louisiana.
13. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience of reference only and do not in any way limit or
amplify, and shall not be used to construe, the terms and provisions hereof.
IN WITNESS WHEREOF, THI and Participant have executed and delivered this
Agreement as of the date first above written.
THI
THI FQ L.P., a Delaware limited partnership
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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PARTICIPANT
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Great AQ Steamboat Co., a Delaware corporation
By: /s/ Jordan ▇. ▇▇▇▇▇
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Title: Vice President
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The following are attachments not contained herein:
A Pro Forma Operating Income
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