EXHIBIT 2.1
____________
PURCHASE AND SALE AGREEMENT
between
BIRD ISLAND LIMITED PARTNERSHIP,
a Massachusetts limited partnership
as Seller,
and
LaSalle Hotel Operating Partnership, L.P.,
a Delaware limited partnership
as Buyer
Harborside Hyatt Conference Center and Hotel
Boston, Massachusetts
Dated: June 16, 1998
TABLE OF CONTENTS
PAGE
BACKGROUND OF AGREEMENT. . . . . . . . . . . . . . . . . . . . . 6
AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1. Definitions . . . . . . . . . . . . . . . . . . . . . 6
2. Agreement of Purchase and Sale. . . . . . . . . . . . 7
3. Purchase Price; Allocation. . . . . . . . . . . . . . 7
4. Payment of Purchase Price . . . . . . . . . . . . . . 7
4.1. Xxxxxxx Money. . . . . . . . . . . . . . . . . . 7
4.2. Investment of Xxxxxxx Money. . . . . . . . . . . 7
4.3. Existing Indebtedness; Bond Reserves . . . . . . 7
4.4. Cash at Closing; Liquor Inventory. . . . . . . . 8
5. Liquidated Damages. . . . . . . . . . . . . . . . . . 8
6. Buyer's Remaining Due Diligence; Environmental Release;
Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.1. Remaining Due Diligence. . . . . . . . . . . . . 9
6.1.1. MassPort Environmental File Review. .10
6.2. Seller's Cooperation . . . . . . . . . . . . . .10
6.3. Hazardous Substances . . . . . . . . . . . . . .11
6.4. Disclaimer . . . . . . . . . . . . . . . . . . .11
7. Entry Prior to Closing. . . . . . . . . . . . . . . .12
7.1. Entry and Investigation. . . . . . . . . . . . .12
7.2. No Interference. . . . . . . . . . . . . . . . .13
7.3. Notice; Approval . . . . . . . . . . . . . . . .13
7.4. Samples. . . . . . . . . . . . . . . . . . . . .13
7.5. Governmental Notification. . . . . . . . . . . .13
7.6. Indemnity for Entry. . . . . . . . . . . . . . .13
7.7. Confidentiality - Reports and Testing Information14
7.8. Survival . . . . . . . . . . . . . . . . . . . .14
8. Buyer's Contingencies . . . . . . . . . . . . . . . .14
8.1. Hyatt Estoppel . . . . . . . . . . . . . . . . .14
8.2. Ground Lease Estoppel. . . . . . . . . . . . . .15
8.3. Bond Estoppel. . . . . . . . . . . . . . . . . .15
8.4. Truth of Representations . . . . . . . . . . . .15
8.5. Seller's Covenants . . . . . . . . . . . . . . .15
8.6. UCC Filings. . . . . . . . . . . . . . . . . . .15
8.7. Compliance with Agreements . . . . . . . . . . .15
8.8. Title Insurance Policy . . . . . . . . . . . . .16
8.9. Closing Balances . . . . . . . . . . . . . . . .16
8.10.Transfer of Liquor License . . . . . . . . . . .16
8.10.1. Tax and Litigation Escrow . . . . . .16
9. Seller's Contingencies. . . . . . . . . . . . . . . .16
9.1. Hyatt Estoppel . . . . . . . . . . . . . . . . .17
9.2. Truth of Representations . . . . . . . . . . . .17
9.3. Buyer's Covenants. . . . . . . . . . . . . . . .17
9.4. Intentionally Omitted. . . . . . . . . . . . . .17
9.5. Buyer Lease. . . . . . . . . . . . . . . . . . .17
9.6. Transfer of Liquor License . . . . . . . . . . .17
10. Seller's Covenants. . . . . . . . . . . . . . . . . .17
10.1.Maintenance of the Project . . . . . . . . . . .17
10.2.Permits and Approvals. . . . . . . . . . . . . .18
00.0.Xxxxxxx Improvements . . . . . . . . . . . . . .18
10.4.Amendments . . . . . . . . . . . . . . . . . . .18
10.5.Intentional Acts . . . . . . . . . . . . . . . .18
11. The Escrow and Closing. . . . . . . . . . . . . . . .18
11.1.Escrow Instructions. . . . . . . . . . . . . . .18
11.2.Closing. . . . . . . . . . . . . . . . . . . . .18
11.3.Action at the Closing by Seller. . . . . . . . .19
11.4.Action at the Closing by Buyer . . . . . . . . .20
11.5.Possession . . . . . . . . . . . . . . . . . . .21
11.6.Extension to Satisfy Conditions. . . . . . . . .21
11.7.Transfer of Guest Property in Safekeeping. . . .22
12. Closing Costs and Statement . . . . . . . . . . . . .22
12.1.Closing Costs. . . . . . . . . . . . . . . . . .22
12.2.Settlement Statement . . . . . . . . . . . . . .22
13. Closing Adjustments and Prorations. . . . . . . . . .23
13.1. Taxes. . . . . . . . . . . . . . . . . . . . .23
13.2. Prepaid Expenses . . . . . . . . . . . . . . .23
13.3.Contingent Payments. . . . . . . . . . . . . . .23
00.0.Xxxx Payments and Reserves . . . . . . . . . . .23
00.0.Xxxx . . . . . . . . . . . . . . . . . . . . . .24
13.6.Rental Receipts. . . . . . . . . . . . . . . . .24
00.0.Xxxx and Beverage Receipts . . . . . . . . . . .24
13.8.Postage Meter. . . . . . . . . . . . . . . . . .24
13.9.Accounts Receivable. . . . . . . . . . . . . . .24
13.10. Accounts Payable. . . . . . . . . . . . . .24
13.11. Unopened Inventory. . . . . . . . . . . . .25
13.12. Wages and Benefits. . . . . . . . . . . . .25
13.13. Utility and Maintenance Charges.. . . . . .25
13.14. Adjustments to Prorations . . . . . . . . .26
13.15. Survival. . . . . . . . . . . . . . . . . .26
14. Limited Representations and Warranties. . . . . . . .26
14.1. Buyer . . . . . . . . . . . . . . . . . . . . .26
14.2.Seller . . . . . . . . . . . . . . . . . . . . .27
14.3.Survival of Buyer's Representations and Warranties29
15. Notices . . . . . . . . . . . . . . . . . . . . . . .29
16. Transfer of Liquor License. . . . . . . . . . . . . .31
17. Remedies. . . . . . . . . . . . . . . . . . . . . . .31
17.1.Seller's Remedies. . . . . . . . . . . . . . . .31
17.2.Buyer's Remedies . . . . . . . . . . . . . . . .32
18. Casualty; Condemnation. . . . . . . . . . . . . . . .32
19. Commissions . . . . . . . . . . . . . . . . . . . . .33
20. Confidentiality and Return of Seller Documents. . . .33
21. Attorneys' Fees . . . . . . . . . . . . . . . . . . .34
22. Waiver. . . . . . . . . . . . . . . . . . . . . . . .34
23. Time Periods. . . . . . . . . . . . . . . . . . . . .34
24. Survival. . . . . . . . . . . . . . . . . . . . . . .34
25. Modification of Agreement . . . . . . . . . . . . . .34
26. Further Instruments . . . . . . . . . . . . . . . . .35
27. Entire Agreement. . . . . . . . . . . . . . . . . . .35
28. Applicable Law. . . . . . . . . . . . . . . . . . . .35
29. Descriptive Headings. . . . . . . . . . . . . . . . .35
30. Time of the Essence . . . . . . . . . . . . . . . . .35
31. Assignment. . . . . . . . . . . . . . . . . . . . . .35
32. Construction. . . . . . . . . . . . . . . . . . . . .35
33. Interpretation. . . . . . . . . . . . . . . . . . . .35
34. Exhibits and Schedules. . . . . . . . . . . . . . . .35
35. Counterparts. . . . . . . . . . . . . . . . . . . . .36
36. Recordation . . . . . . . . . . . . . . . . . . . . .36
37. IRS Real Estate Sales Reporting . . . . . . . . . . .36
38. Audit . . . . . . . . . . . . . . . . . . . . . . . .36
LIST OF EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . .38
EXHIBIT "A"
LEGAL DESCRIPTION OF LAND. . . . . . . . . . . . . . . . . . . .39
EXHIBIT "B"
LIST OF BOND DOCUMENTS . . . . . . . . . . . . . . . . . . . . .40
EXHIBIT "C"
BOND TRUSTEE ESTOPPEL CERTIFICATE AND AGREEMENT. . . . . . . . .41
EXHIBIT "D"
RETAIL CONCESSIONS . . . . . . . . . . . . . . . . . . . . . . .47
EXHIBIT "E"
LIST OF CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . .48
EXHIBIT "F"
MANAGER'S ESTOPPEL CERTIFICATE . . . . . . . . . . . . . . . . .49
EXHIBIT "G"
INTANGIBLE PROPERTY. . . . . . . . . . . . . . . . . . . . . . .52
EXHIBIT "H-1"
LANDLORD'S CONSENT AND ESTOPPEL CERTIFICATE. . . . . . . . . . .53
EXHIBIT "H-2"
CREDIT ENHANCEMENT ESTOPPEL. . . . . . . . . . . . . . . . . . .57
EXHIBIT "I"
INTENTIONALLY OMITTED . . . . . . . . . . . . . . . . . . . . .60
EXHIBIT "J"
BOND RESERVES. . . . . . . . . . . . . . . . . . . . . . . . . .61
EXHIBIT "K"
LEASE ASSIGNMENT AND ASSUMPTION. . . . . . . . . . . . . . . . .62
EXHIBIT "L"
ASSIGNMENT AND ASSUMPTION
OF MANAGEMENT AGREEMENT. . . . . . . . . . . . . . . . . . . . .66
EXHIBIT "M"
ASSIGNMENT AND ASSUMPTION OF CONTRACTS . . . . . . . . . . . . .69
EXHIBIT "N"
ASSIGNMENT OF INTANGIBLE PROPERTY. . . . . . . . . . . . . . . .71
EXHIBIT "O"
XXXX OF SALE . . . . . . . . . . . . . . . . . . . . . . . . . .74
EXHIBIT "P"
NON-FOREIGN PERSON AFFIDAVIT . . . . . . . . . . . . . . . . . .75
EXHIBIT "Q"
LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . .77
EXHIBIT "R"
SCHEDULE OF PREPAID EXPENSES . . . . . . . . . . . . . . . . . .78
EXHIBIT "S"
INTENTIONALLY OMITTED . . . . . . . . . . . . . . . . . . . . .79
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (the "AGREEMENT") is made as of the
16th day of June, 1998, by and between BIRD ISLAND LIMITED PARTNERSHIP, a
Massachusetts limited partnership ("SELLER") and LASALLE HOTEL OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership ("BUYER").
BACKGROUND OF AGREEMENT
A. Seller is the owner of the Harborside Hyatt Conference Center
and Hotel, consisting of a 270-room conference center, hotel, and other
improvements, located in Boston, Massachusetts.
B. Buyer desires to purchase such hotel and certain related
assets, and Seller desires to sell to Buyer such hotel and the related
assets, subject to and in accordance with the terms, covenants and
conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, the terms,
conditions and covenants contained herein and for other valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the terms below shall
have the following meanings unless the context requires otherwise.
"Affiliate." As to either party, any person directly or
indirectly controlling or controlled by or under common control with such
party; any trustee, officer, director, member or partner in or of such
party; any person directly or indirectly, through one or more entities,
beneficially owning more than five percent (5%) of the equity interest in
such party; any spouse, sibling, ancestor or descendant of any person who
is an Affiliate of such party; or any entity more than ten percent (10%) of
the equity of which is owned by such party and/or Affiliate of such party.
For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with"), as
used with respect to any person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such person, whether through the ownership of voting
securities or by contract or otherwise, and "person" shall mean any
individual, corporation, limited or general partnership, limited liability
company or partnership, joint venture, association, joint stock company,
trust, unincorporated organization or any governmental or quasi-
governmental agency, board, branch, department, instrumentality or
political unit, whether domestic or foreign.
"AGREEMENT." This Purchase and Sale Agreement, as amended or
supplemented from time to time.
"ASSETS." The Hotel, the Contracts, the Intangible Property
and the Personalty.
"BOND DOCUMENTS." The documents evidencing and securing the
Bonds, including but not limited to the documents listed on EXHIBIT "B"
attached hereto.
"BOND ESTOPPEL." An estoppel certificate from the Bond Trustee
in the form attached hereto as EXHIBIT "C", subject to such changes as the
Bond Trustee may require and as are approved by Buyer in its reasonable
discretion, and with the blanks therein completed satisfactorily to Buyer
in its reasonable discretion.
"BOND RESERVES." The following escrow or reserve accounts with
respect to the Bonds, as provided for by the Bond Documents:
a. Credit Enhancement Account
b. Debt Service Reserve Fund
c. Equity Reserve Fund
d. Supplemental Equity Fund
e. Construction and Operating Costs
Contingency Fund
f. Revenue Fund
x. Xxxx Fund
h. Rebate Fund
"BOND TRUSTEE." State Street Bank and Trust Company, successor
to Shawmut Bank, N.A., as Trustee under the Bond Documents.
"BONDS." $40,000,000 Massachusetts Port Authority Special
Project Revenue Bonds, Series 1990 (Harborside Hyatt Conference Center and
Hotel Project).
"BUYER LEASE." As defined in Section 2.
"BUYER'S LESSEE." LaSalle Hotel Lessee, Inc., an Illinois
corporation, an affiliate of Buyer.
"BUYER'S REPRESENTATIVES." As defined in SUBSECTION 7.1.
"CLOSING." The consummation of the transaction contemplated
hereby, when Buyer acquires title to the Assets.
"CLOSING DATE." The date that is the fifth (5th) business day
after the latest of the Bond Estoppel, the Hyatt Estoppel and the MassPort
Estoppel is received by Seller, but in no event later than June 23, 1998,
or such other date as is agreed to in writing by both Buyer and Seller in
their sole and absolute discretion.
"CONCESSION INVENTORY." All goods and merchandise owned by
Seller and used for retail sale in the ordinary course of business in the
retail concessions operated within the Hotel listed on EXHIBIT "D" attached
hereto.
"CONTRACTS." The Management Agreement and the other service
contracts, equipment leases, booking agreements and other arrangements or
agreements to which Seller is a party affecting the ownership, repair,
maintenance, management, leasing or operation of the Hotel described in
EXHIBIT "E" attached hereto.
"XXXXXXX MONEY." The funds deposited by Buyer pursuant to
SUBSECTION 4.1.
"ENVIRONMENTAL LAW." All statutes, ordinances, by-laws, rules
and regulations, executive orders and other administrative orders,
judgments, decrees, injunctions and other judicial orders of or by any
governmental authority, now or hereafter in effect, relating to pollution
or protection of human health or the environment, including, without
limitation, emissions, discharges, releases or threatened releases of
Hazardous Substances or Hazardous Discharges, or the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Substances including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C. Sections 9601 et seq.), the Resources
Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), the
Clean Water Act (33 U.S.C. Section 466 et seq.), the Safe Drinking Water
Act (14 U.S.C. Sections 1401-1450), the Hazardous Materials Transportation
Act (49 U.S.C. Section 1801 et seq.), the Toxic Substance Control Act (15
U.S.C. Section 2601-2629) and Massachusetts General Laws Chapter 21E, and
the regulations adopted and publications promulgated pursuant to each of
said laws, all as the same may now or hereafter be amended.
"ESCROW." The Escrow established with Escrow Agent to
consummate the transaction contemplated hereby.
"ESCROW AGENT." Chicago Title Insurance Company, 00 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000, attention: Xxxxxx X. Xxxxxxx (Fax No.
617/000-0000).
"FF & E RESERVE." The Fund for Replacement of and Additions to
Furnishings and Equipment provided for by the Management Agreement.
"FEDERAL CODE." The United States Internal Revenue Code of
1986, as amended.
"FOOD AND BEVERAGE INVENTORY." All inventory of food and
beverages, including alcoholic beverages, owned by Seller, located at the
Hotel, and used in the operation of any food service operation within the
Hotel.
"GROUND LEASE". That certain Ground Lease for Phase C of the
Bird Island Flats Development by and between MassPort and Xxxxx Harborside
Associates II Limited Partnership, dated as of September 15, 1990, as
amended by First Amendment to Ground Lease for Phase C of the Bird Island
Flats Development by and between MassPort and Xxxxx Harborside Associates
II Limited Partnership, dated as of June 27, 1991, a notice of which Ground
Lease is recorded with the Suffolk County Registry of Deeds in Book 16655,
Page 298, and filed with the Suffolk County Registry District of the Land
Court as Document No. 472083, and a notice of which amendment is recorded
with said Deeds in Book 16912, Page 126, and filed with said Registry
District as Document No. 476584, as affected by Landlord's Consent and
Estoppel Certificate dated as of December 15, 1990, Landlord's Supplemental
Consent and Estoppel Certificate, dated as of June 20, 1991, and the
Settlement Agreement between MassPort and Seller dated January 14, 1998;
the interest of Xxxxx Harborside Associates II Limited Partnership
thereunder having been assigned to Seller by Assignment of Lease dated
March 15, 1994, recorded with said Deeds in Book 19024, Page 337 and filed
with said Registry District as Document No. 513331.
"HAZARDOUS DISCHARGE." As defined in SUBSECTION 6.3.
"HAZARDOUS SUBSTANCES." As defined in SUBSECTION 6.3.
"HOTEL." The 270-room conference center, hotel, and other
Improvements, including, but not limited to, parking areas, a swimming
pool, a health club, landscaping and other site improvements, together with
the leasehold estate created by the Ground Lease, and all rights,
privileges, licenses and appurtenances which Seller may now own or
hereafter acquire with respect to such leasehold estate.
"HYATT." Hyatt Corporation, a Delaware corporation.
"HYATT ESTOPPEL." A consent and estoppel certificate from Hyatt
in the form attached hereto as EXHIBIT "F", subject to such changes as
Hyatt may require and as are approved by Buyer in its reasonable
discretion, and with the blanks therein completed satisfactorily to Buyer
in its reasonable discretion.
"IMPROVEMENTS." All buildings, fixtures, walls, fences,
landscaping and other structures and improvements situated on or affixed to
the Land.
"INTANGIBLE PROPERTY." The transferable or assignable
licenses, permits, warranties and guarantees held by Seller in connection
with operation of the Hotel, Seller's rights to the deposits made in
connection with operation of the Hotel, the trade names and service marks
identified with the Hotel, the telephone exchange numbers identified with
the Hotel, and all other transferable intangible property, miscellaneous
rights, benefits or privileges of any kind or character with respect to the
operation of the Hotel listed on EXHIBIT "E" attached hereto, together with
Seller's rights to the Bond Reserves and any reserves or deposits held
under the Management Agreement, including, without limitation, the FF&E
Reserve.
"INVESTIGATIONS." As defined in SUBSECTION 7.1.
"LAND." The land subject to the Ground Lease, more
particularly described in EXHIBIT "A" attached hereto.
"LAWS." All laws, statutes, codes, ordinances, orders, awards,
judgments, decrees, injunctions, approvals, permits, requirements,
regulations and licenses of every governmental or quasi-governmental
authority or agency having jurisdiction over the Assets.
"LHA II." Xxxxx Harborside Associates II Limited Partnership,
a Massachusetts limited partnership.
"LIABILITY." As defined in SUBSECTION 7.6.
"LOAN AGREEMENT." As defined in the definition of Bond
Documents.
"MANAGEMENT AGREEMENT." That certain Management Agreement
dated as of March 15, 1990 by and between Xxxxx Harborside Associates II
Limited Partnership and Hyatt, as amended by First Amendment to Management
Agreement dated June 27, 1991, by and between Xxxxx Harborside Associates
II Limited Partnership and Hyatt.
"MASSPORT." Massachusetts Port Authority.
"MASSPORT ESTOPPEL." Two estoppel certificates from MassPort
in the form attached hereto as EXHIBITS "H-1" AND "H-2", respectively,
subject to such changes as MassPort may require and as are approved by
Buyer in its reasonable discretion, and with the blanks therein completed
satisfactorily to Buyer in its reasonable discretion.
"OPERATING AGREEMENT." As defined in SECTION 16.
"OPERATING EQUIPMENT." All chinaware, glassware, linens,
silverware, tools, kitchen utensils, uniforms, engineering and housekeeping
tools, and other equipment and utensils owned by Seller and used in the
operation of the Hotel.
"OPERATING SUPPLIES." All fuel, soap, toilet paper, tissues,
toiletries, towels, light bulbs, mechanical stores, cleaning supplies and
materials, matches, stationery, paper supplies, laundry supplies,
housekeeping supplies, accounting supplies and other immediately consumable
items, owned by Seller and used in the operation of the Hotel.
"PERMITS AND APPROVALS." As defined in SECTION 6.
"PERMITTED TITLE EXCEPTIONS." The matters affecting title to
the Assets that are approved, or deemed approved, by Buyer pursuant to
SUBSECTION 6.1 below, together with the following, to the extent any such
matter was not previously disclosed in the Title Commitment or any
supplement thereto delivered to Buyer prior to the Title Due Diligence
Expiration Date: (i) all matters reflecting liabilities, obligations,
encumbrances and other matters expressly agreed to be assumed or taken
subject to by Buyer pursuant to this Agreement; (ii) all matters, whether
or not of record, affecting the Assets on the Closing Date, which arose out
of, or by reason of, any acts of Buyer or its agents, representatives or
contractors; and (iii) all matters which Escrow Agent is willing to delete
from Buyer's title insurance policy.
"PERSONALTY." All furniture, furnishings, fixtures, equipment
(including, without limitation, office equipment and the Operating
Equipment), machinery, tools, supplies, inventory, drapes, carpeting, rugs,
artwork, the Operating Supplies, the Food and Beverage Inventory, the
Concession Inventory, building plans and specifications, operating manuals,
books and records, guest information and advertising materials found or
used exclusively at the Hotel, excluding, all of Hyatt's proprietary
software and all personal effects of employees of the Hotel.
"PURCHASE PRICE." The purchase price for the Assets as set
forth in SECTION 3 of this Agreement.
"SELLER'S TITLE AFFIDAVIT." As defined in SUBSECTION 8.8.
"SURVEY." As defined in SUBSECTION 6.1.
"TESTING INFORMATION." As defined in SUBSECTION 7.7.
"TITLE COMMITMENT." As defined in SUBSECTION 6.1.
"TITLE DUE DILIGENCE EXPIRATION DATE." June 18, 1998.
"TITLE OBJECTIONS." As defined in SUBSECTION 6.1.
"TITLE POLICY." As defined in SUBSECTION 8.8.
"UNOPENED INVENTORY." As defined in SUBSECTION 13.11.
2. AGREEMENT OF PURCHASE AND SALE. At the Closing, subject to the
terms, covenants and conditions of this Agreement, Seller shall sell to
Buyer and Buyer shall purchase from Seller the Assets. Also at the
Closing, Buyer shall lease the Hotel to Buyer's Lessee, pursuant to a lease
between Buyer and Buyer's Lessee (the "BUYER LEASE").
3. PURCHASE PRICE; ALLOCATION. The Purchase Price to be paid for
the Assets shall be Seventy-Three Million, Five Hundred Thousand and No/100
Dollars ($73,500,000.00). Of the Purchase Price, Sixty Eight Million, One
Hundred Thousand and No/100 Dollars ($68,100,000.00) shall be allocated to
the Hotel and Five Million, Four Hundred Thousand and No/100 Dollars
($5,400,000.00) shall be allocated to the Contracts, Intangible Property
and Personalty.
4. PAYMENT OF PURCHASE PRICE. The Purchase Price shall be payable
by Buyer as follows:
4.1. XXXXXXX MONEY. Prior to the execution of this Agreement,
Buyer has deposited with Escrow Agent Two Million and No/100 Dollars
($2,000,000) as Xxxxxxx Money, in cash, by cashier's check or by other
immediately available funds.
4.2. INVESTMENT OF XXXXXXX MONEY. Escrow Agent is hereby
authorized and directed to invest all Xxxxxxx Money deposited by Buyer in
Escrow in an interest-bearing account, or as otherwise directed by both
Seller and Buyer. Buyer's federal taxpayer identification number is 36-
4217399. Interest on the Xxxxxxx Money shall accrue for the benefit of and
be payable to the party otherwise entitled to such sums upon the Closing or
earlier termination of this Agreement. If the sale of the Assets
contemplated hereunder is consummated, the Xxxxxxx Money shall be paid to
Seller at the Closing (INCLUSIVE of all interest earned thereon) and be
applied as a credit (INCLUSIVE of all interest earned thereon) against
Buyer's payment of the Purchase Price.
4.3. EXISTING INDEBTEDNESS; BOND RESERVES. At the Closing,
Buyer shall take title to the Assets subject to the security documents
securing the Bonds, and the outstanding principal balance thereof, plus any
accrued but unpaid interest as of the Closing, shall be deducted from the
Purchase Price. At the Closing Seller's rights to all amounts held in the
Bond Reserves accounts shall be transferred to Buyer, and Seller shall
receive a credit for the amounts held in the following Bond Reserves:
(a) outstanding balance of Bond Fund
(b) outstanding balance of Revenue Fund
(c) outstanding balance of Construction and
Operating Costs, Contingency Fund; and
(d) outstanding balance of Debt Service Reserve Fund in
excess of $4,000,000 (subject to the provisions of Section 13.4 below).
4.4. CASH AT CLOSING; LIQUOR INVENTORY. On or before the
Closing Date, Buyer shall deliver to Escrow Agent, for the account of
Seller, the remaining balance of the Purchase Price (reduced by any credits
due Buyer, or increased by any credits due Seller or charges to Buyer,
contemplated by this Agreement) by wire transfer of immediately available
federal funds to the account of Escrow Agent; provided, however that if
Seller and Buyer enter into the Operating Agreement at Closing, Seller's
inventory of alcoholic beverages shall not be transferred to Buyer or paid
for until the date on which the Hotel liquor license has been transferred
(or a new liquor license issued) to Buyer and the Operating Agreement has
terminated, at which time the cost of the inventory in existence as of the
Closing Date shall be paid to Seller. All then unopened bottles of
alcoholic beverages then shall be transferred to Buyer, and all open
containers of alcoholic beverages shall be removed from the Property by
Seller.
5. LIQUIDATED DAMAGES. IN THE EVENT THE SALE OF THE ASSETS
CONTEMPLATED HEREUNDER IS NOT CONSUMMATED BECAUSE OF THE FAILURE OF ANY
CONDITION OR ANY OTHER REASON EXCEPT A FAILURE BY BUYER TO PERFORM ITS
OBLIGATION TO CONSUMMATE THE SALE IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 11 HEREOF, THE XXXXXXX MONEY (INCLUDING INTEREST EARNED) SHALL
IMMEDIATELY BE RETURNED TO BUYER. IF SAID SALE IS NOT CONSUMMATED BECAUSE
OF A FAILURE BY BUYER TO PERFORM ITS OBLIGATION TO CONSUMMATE THE SALE IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 11 HEREOF, THE XXXXXXX MONEY
(INCLUDING INTEREST EARNED) SHALL BE PAID TO AND RETAINED BY SELLER AS
LIQUIDATED DAMAGES. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES,
IN THE EVENT OF SUCH DEFAULT BY BUYER, WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICABLE TO DETERMINE. THEREFORE, THE PARTIES ACKNOWLEDGE THAT THE
AMOUNT OF THE XXXXXXX MONEY HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE
PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES AND AS SELLER'S EXCLUSIVE
REMEDY AGAINST BUYER, AT LAW OR IN EQUITY, IN THE EVENT OF A FAILURE BY
BUYER TO PERFORM ITS OBLIGATION TO CONSUMMATE THE SALE IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 11 HEREOF.
6. BUYER'S REMAINING DUE DILIGENCE; ENVIRONMENTAL RELEASE;
DISCLAIMER. Prior to the date of this Agreement, Buyer has had the
opportunity to review: the Ground Lease; the Contracts, including, but not
limited to, the Management Agreement; financial information with respect to
the Hotel, including, but not limited to (i) audited income and expense
statements and audited year-end financial statements for the Hotel for the
three most recent full calendar years prior to Closing and the current
year, (ii) monthly operating statements for the current year, (iii) other
historical financial information and operating and capital (including FF&E)
budgets for the Hotel, (iv) Hotel advertising and marketing plans, (v)
Hotel operating and capital projections for 1998, and(vi) the other reports
which Hyatt is required to or does deliver under the Management Agreement;
the governmental permits and approvals ("PERMITS AND APPROVALS") obtained
or held by Seller or Manager relating to the construction, operation, use
or occupancy of the Hotel; Environmental Laws and zoning, land-use,
subdivision, building and construction laws and regulations restricting or
regulating or otherwise affecting the use, occupancy or enjoyment of the
Hotel; and any appraisal and/or architectural or engineering reports with
respect to the Hotel that Buyer has elected to obtain; and in connection
therewith, Buyer has conducted such physical inspections and other due
diligence pertaining to the Assets as Buyer wished to perform, except for
the following due diligence, which remains incomplete as of the date hereof
(collectively, the "REMAINING DUE DILIGENCE").
6.1. REMAINING DUE DILIGENCE. Buyer's Remaining Due Diligence
consists of Buyer's title review. Buyer shall review title to the Hotel
and the Survey, as follows:
(a) Prior to the execution of this Agreement,
Seller has delivered to Buyer a commitment for title insurance dated May 7,
1998 on the Hotel issued by the Escrow Agent (the "TITLE COMMITMENT"),
accompanied by copies of all exception documents referred to in the Title
Commitment, and an ALTA\ACSM "as-built" survey of the Hotel prepared by a
licensed surveyor or engineer (the "SURVEY").
(b) Buyer shall notify Seller and Escrow Agent no
later than the Title Due Diligence Expiration Date of the specific
exceptions to title reflected on the Title Commitment or matters reflected
on the Survey which are unacceptable to Buyer (collectively, the "TITLE
OBJECTIONS"). Buyer shall be deemed to have approved all matters affecting
title to the Hotel identified in Schedule B, Section 2 of the Title
Commitment and all matters shown on the Survey to which Buyer does not
object by written notice to Seller given on or before the Title Due
Diligence Expiration Date,. If Buyer timely gives notice of any Title
Objections as herein provided, Seller shall, not more than three (3)
business days after receipt of Buyer's notice, give Buyer notice whether or
not Seller agrees to remove any of the Title Objections on or before the
Closing; Seller's failure to so notify Buyer within such three (3) business
day period shall be deemed Seller's election NOT to remove the Title
Objections. The decision by Seller to remove or not to remove any Title
Objections shall be made in Seller's sole and absolute discretion. If
Seller elects, or is deemed to have elected, not to remove or cure any
Title Objections, notwithstanding that the Title Due Diligence Expiration
Date shall have passed, Buyer shall have three (3) business days following
receipt of Seller's notice or the expiration of Seller's three (3) business
day period, as the case may be, or until the day prior to the Closing Date,
whichever is sooner, to elect whether to proceed with the purchase and
accept title to the Hotel subject to the Title Objections, or to terminate
this Agreement. If Buyer shall fail to give Seller notice of its election
within the time period referenced in the immediately preceding sentence,
Buyer shall be deemed to have elected to terminate this Agreement. Upon
any such termination, Buyer shall be entitled to the return of the Xxxxxxx
Money, including interest thereon and thereafter, except for any covenants
or obligations which by the express provisions of this Agreement survive a
termination of this Agreement, neither party shall have any further rights
or obligations hereunder.
(c) In addition, Seller shall use diligent
efforts to remove any title exceptions that arise after the date of the
Title Commitment and before Closing, provided, however, that Seller shall
not be obligated to remove (i) any involuntary encumbrances or exceptions
costing more than $100,000.00 in the aggregate to remove (except that such
monetary limitation shall not apply to any mechanics', materialmens', and
similar liens attributable to work performed on or about the Hotel by or
for Seller); and (ii) matters that constitute Permitted Title Exceptions.
(d) To enable Seller to make conveyance as herein
provided, Seller may, at the time of Closing, use the Purchase Price or any
portion thereof to clear the title of any or all encumbrances or interests;
provided that all instruments so procured are recorded at Seller's expense
simultaneously with the recording of the Deed.
6.1.1. MASSPORT ENVIRONMENTAL FILE REVIEW. On or
before June 12, 1998, Buyer shall review the relevant files of the
Massachusetts Port Authority with respect to any Hazardous Discharges on or
about the Land or Improvements. In the event that Buyer's review of such
files reveals any Hazardous Discharge on the Land or any Hazardous
Discharge in the vicinity of the Land that has or is likely to migrate onto
the Land, other than any Hazardous Discharge disclosed by the Phase I-
Limited Site Investigation Harborside Development - Phase C, East Boston,
Massachusetts prepared by Xxxxxxxx-Xxxxx & Associates, Inc. dated August
1990, or any Hazardous Discharge which is disclosed in such Site
Investigation, but which, since the date of such Site Investigation has
migrated onto the Land or migrated in such a manner that it threatens to
migrate onto the Land, then Buyer may elect to terminate this Agreement by
written notice to Seller delivered on or before June 12, 1998. Upon such
termination, Buyer shall be entitled to the return of the Xxxxxxx Money and
any interest earned thereon, and thereafter, except for any covenants or
obligations which by the express provisions of this Agreement survive a
termination of this Agreement, neither party shall have any further rights
or obligations hereunder.
6.2. SELLER'S COOPERATION. To assist Buyer with its due
diligence, prior to the date hereof, at Buyer's request, Seller has
provided Buyer with copies of (or reasonable access to) the Phase I-Limited
Site Investigation Harborside Development- Phase C, East Boston,
Massachusetts prepared by Xxxxxxxx-Xxxxx & Associates, Inc. dated August
1990, and in the Phase I-Limited Site Investigation Harborside Development-
Phase D, East Boston, Massachusetts prepared by Xxxxxxxx-Xxxxx &
Associates, Inc. dated August 1990, all operating contracts, year-end
audited financial statements, monthly operating statements, operating and
capital budgets, marketing plans, projections, operating reports and
Permits and Approvals in Seller's possession pertaining to the Hotel,
EXCLUDING, HOWEVER, internal reports, studies, analysis and work product
prepared by Seller or by legal counsel representing Seller, attorney-client
privileged information and any other items Seller may be precluded from
providing to Buyer as a matter of law, pursuant to any confidentiality
agreement or pursuant to any judgment or order to which Seller is a party
or by which Seller is bound. All documentation furnished (or made
available) by Seller to Buyer pursuant to the preceding sentence has been
delivered (or made available) without any representation or warranty by
Seller as to the accuracy or completeness of such information or the right
of Buyer to rely thereon.
6.3. HAZARDOUS SUBSTANCES. Buyer acknowledges that the Land
or adjacent or neighboring lands, may have been filled and used by
subsequent owners for uses which may have involved the use, storage and
transport of Hazardous Substances (as hereinafter defined). As a result of
such uses and activities, Hazardous Substances may have been discharged on,
into or from the Land or Improvements. Buyer's consummation of Buyer's
purchase of the Assets shall constitute the waiver, release, acquittal and
discharge by Buyer on behalf of itself, Buyer's Lessee and any Affiliate of
Buyer or Buyer's Lessee of Seller from any and all claims, actions, causes
of action, demands, rights, damages, costs, expenses, or compensation
whatsoever, direct or indirect, known or unknown, foreseen or unforeseen,
which Buyer, Buyer's Lessee or any Affiliate of Buyer or Buyer's Lessee,
now has or which may arise in the future on account of or in any way
growing out of or in connection with the existence of any Hazardous
Substances or any Hazardous Discharge (as hereinafter defined) on or from
the Land or Improvements. For purposes hereof, the term "HAZARDOUS
SUBSTANCES" shall include, without limitation, (a) any element, compound or
chemical that is defined, listed or otherwise classified as a pollutant,
toxic pollutant, toxic or hazardous substance, hazardous waste, special
waste, extremely hazardous substance or chemical under any environmental
laws; (b) petroleum and its refined products, petroleum-derived substances
and drilling fluids, production waters and other wastes associated with the
exploration, development or production of crude oil or natural gas; (c) any
electrical equipment containing oil that has more than 50 parts per million
of polychlorinated biphenyls; (d) any flammable substances, explosives or
radioactive materials; (e) any materials used or stored by Buyer; and (f)
building components, including but not limited to, asbestos-containing
materials and manufactured products containing Hazardous Substances. For
purposes hereof, the term "HAZARDOUS DISCHARGE" means any releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping of Hazardous Substances
from or onto the Land or Improvements. This provisions of this Subsection
shall survive the Closing.
6.4. DISCLAIMER. Other than as expressly set forth herein,
Seller hereby specifically disclaims any warranty, guaranty or
representation, oral or written, past, present or future, of, as to, or
concerning (i) the nature and condition of the Assets, including, without
limitation, the water, soil and geology or any other matter affecting the
stability or integrity of the Land or Improvements, and the suitability
thereof and of the Assets for any and all activities and uses which Buyer
may elect to conduct thereon, and the existence of any Hazardous Substances
or hazardous conditions thereon or compliance with applicable Laws; (ii)
the condition of title to the Assets or the nature and extent of any
right-of-way, lease, possession, lien, encumbrance, license, reservation,
condition or otherwise; (iii) the compliance of the Assets or their
operation with any covenants, conditions, restrictions, or Laws; (iv) the
profitability of, or losses or expenses relating to, the Assets and the
businesses conducted in connection therewith; (v) the existence, quality,
nature, adequacy or physical condition of any utility serving the Hotel;
(vi) the zoning or other legal status of the Hotel; (vii) the quality of
any labor or materials relating in any way to the Assets; or (viii) the
legal or tax consequences of this Agreement or its underlying transaction.
Buyer acknowledges and understands that Seller has not made an independent
investigation or verification of the accuracy or completeness of the
documents, studies, surveys, information and materials which will be
provided, or made available, to Buyer in connection with Buyer's due
diligence, and except as set forth in SUBSECTION 14.2 of this Agreement,
Seller makes no representation or warranty whatsoever, expressed or
implied, as to the content, accuracy or completeness of any or all such
information and materials. Buyer is an experienced, sophisticated
purchaser of property such as the Assets and has had or will have had,
prior to the deadlines provided for by this Agreement, an opportunity to
make independent investigations and examinations of the Assets (and any
matters related thereto, including financial information), and to become
fully familiar with the condition and operation of the Assets. Buyer
acknowledges that prior to the date hereof or prior to the deadlines
provided for by this Agreement, Seller will have afforded or will afford
Buyer the opportunity for full and complete investigations, examinations
and inspections of the Assets and all information to be delivered by Seller
pursuant to this Agreement and, other than as expressly set forth herein,
Buyer is relying solely on its own investigation and inspection of the
Assets. Other than as expressly set forth herein, the sale of the Assets as
provided for herein is made on an "AS IS" and "WHERE IS" basis, and Buyer
expressly acknowledges that, in consideration of the agreements of Seller
herein, other than as expressly set forth herein, Seller makes no warranty
or representation, express or implied, or arising by operation of law,
including, but not limited to, any warranty of condition, habitability,
merchantability, suitability or fitness for a particular use or purpose, in
respect of all or any of the Assets. EXCEPT FOR THE WARRANTIES SET FORTH
IN SUBSECTION 14.2 OF THIS AGREEMENT, SELLER HEREBY SPECIFICALLY DISCLAIMS
ANY WARRANTY, EXPRESS, IMPLIED OR ARISING BY OPERATION OF LAW, INCLUDING
ANY WARRANTY OF HABITABILITY, MERCHANTABILITY, SUITABILITY OF FITNESS FOR A
PARTICULAR USE OR PURPOSE.
7. ENTRY PRIOR TO CLOSING.
7.1. ENTRY AND INVESTIGATION. Between the date of this
Agreement and the Closing Date, Seller grants to Buyer and its partners,
officers, directors, employees, agents, contractors and consultants
(collectively, "BUYER'S REPRESENTATIVES"), a license to enter upon the
Hotel at reasonable times for the purpose of performing due diligence
inspections and tests on or concerning the Assets (collectively, the
"INVESTIGATIONS"). The Investigations and all related activities or events
shall be limited and conducted without damage costing in excess of Five
Thousand Dollars ($5,000.00) to repair to all or any portion of the Assets
and otherwise as herein required, all at Buyer's sole risk, cost and
expense. Seller shall incur no cost or expense in connection with the
Investigations or any related activities or events. Buyer will take all
reasonable precautions to minimize the impact of the Investigations. Buyer
shall, in a timely manner, restore the Assets, at its sole cost, to
substantially the condition that existed immediately prior to the
Investigations, including, without limitation, any and all physical
alteration or damage caused by the Investigations or entry of Buyer or any
Buyer's Representative onto the Hotel.
7.2. NO INTERFERENCE. The Investigations shall be performed
diligently and prosecuted to completion so as to minimize interference with
the operation or use of the Hotel. Any entry onto the Hotel hereunder and
any Investigations shall be subject to and conducted in accordance with all
Contracts. Because of Seller's concern with any interference with the
operation of the Hotel, Seller reserves the right to impose reasonable
restrictions on the time and frequency of Buyer's entry. All persons who
enter upon the Hotel shall do so at their own risk. Buyer and Buyer's
Representatives shall cooperate with and comply with all directions of
Seller and Hyatt.
7.3. NOTICE; APPROVAL. Neither Buyer nor Buyer's
Representatives shall enter the Hotel without providing reasonable prior
notice to Seller. Buyer shall give Seller prior written notice of any and
all proposed entries into or upon the Hotel, including the dates of such
entries, the work to be performed, and the names of those entering the
Hotel. Seller shall have the right, but not the obligation, at Seller's
cost to be present or have its representatives present during any part or
all of the Investigations. Buyer shall not do or conduct any part of the
Investigations without the presence on site of Seller or Seller's
representatives if so requested by Seller from time to time.
Notwithstanding the other provisions of this ARTICLE 7, Buyer shall not
conduct any soil testing without Seller's prior written approval.
7.4. SAMPLES. If Buyer takes any samples in connection with
any Investigation, then, upon Seller's request, Seller shall be permitted
to take split samples to allow Seller, if Seller so chooses, to perform its
own testing.
7.5. GOVERNMENTAL NOTIFICATION. Buyer agrees that in the
event the need arises under applicable laws to notify any federal, state or
local governmental authority of any event or condition on or about the
Hotel as a result of any findings in any Investigation, Buyer shall
immediately notify Seller, and Seller, not Buyer or any Buyer
Representative, shall give such notification as Seller deems appropriate.
If Seller does not so notify such governmental authority in a timely manner
after such notice, Buyer or a Buyer Representative may do so, but only if
required by law to make such disclosure. In the event Buyer or a Buyer
Representative makes such disclosure, Buyer or such Buyer Representative
shall give Seller notice as soon as Buyer or the Buyer Representative, as
the case may be, is aware of the need to make such disclosure and shall
thereafter cooperate with Seller with respect to the scope, content and
distribution of the disclosure and communications with respect thereto.
7.6. INDEMNITY FOR ENTRY. Buyer assumes all risks associated
with its entry, the Investigations, and any other activity hereunder, and
agrees to defend, indemnify and save Seller, its officers, directors,
employees, agents, contractors, affiliates, invitees and guests harmless
from and against any and all debts, liens, losses, liabilities, costs,
fines, penalties (including, without limitation, court costs, attorneys'
fees and expert witness fees), expenses, damages, claims, demands, causes
of action, cost recovery actions, administrative orders or notices and
consent agreements (collectively, "LIABILITY"), on account of any loss,
damage or injury to any person or property by reason of any act, omission
or negligence of Buyer or any of Buyer's Representatives, directly or
indirectly, in connection with or in any way related to the entry or
activities of Buyer or any of Buyer's Representatives on or at the Hotel.
Prior to the entry allowed under this SECTION 7, Buyer shall provide Seller
with a certificate of insurance naming Seller as a party insured from any
of Buyer or Buyer's Representatives who actually perform physical testing
on the Land or Improvements with coverage and limitations not less than the
following:
(a) GENERAL LIABILITY: $1,000,000.00 each
occurrence combined single limit for bodily injury and property damage; and
(b) EMPLOYER'S LIABILITY: BODILY INJURY -
$1,000,000.00 each accident.
7.7. CONFIDENTIALITY - REPORTS AND TESTING INFORMATION. Buyer
agrees that all reports, together with all analyses, compilations, studies
and other material or communications prepared by or on behalf of Buyer
pursuant to this Agreement (collectively, the "TESTING INFORMATION") shall
be used solely by Buyer for the purpose of evaluating the purchase of the
Assets by Buyer. Prior to Closing, Buyer shall not disclose, and Buyer's
arrangement with any Buyer Representative shall not permit the Buyer
Representative to disclose, the Testing Information to any third party
without the prior written consent of Seller, except as provided in
SUBSECTION 7.5 above, and except that the Testing Information may be
disclosed to (i) those Buyer Representatives who need to know the Testing
Information for the purpose of evaluating the purchase of the Assets by
Buyer and (ii) Buyer's potential lenders or equity investors, so long as
such persons are informed of the confidential nature of the Testing
Information, are directed to treat the Testing Information confidentially
and are bound by the terms and conditions of this Agreement.
Notwithstanding the foregoing, Buyer or a Buyer Representative may disclose
the Testing Information if and to the extent legally compelled to do so.
Buyer or the Buyer Representative, as the case may be, agrees to give
Seller notice as soon as Buyer or the Buyer Representative is aware of the
need to make such disclosure (or immediately after disclosure if prior
notice is not possible) and to use reasonable efforts to obtain assurances
that any Testing Information thus disclosed will be treated confidentially.
Buyer or Buyer's Representative shall have no obligation under this
paragraph with respect to any Testing Information to the extent that such
Testing Information has been made public other than by the acts of Buyer or
the Buyer Representative in violation of this Agreement. Buyer's
arrangement with any Buyer Representative shall include an agreement on the
part of the Buyer Representative to be bound by the provisions of this
Subsection.
7.8. SURVIVAL. The provisions of this SECTION 7 shall survive
any termination of this Agreement.
8. BUYER'S CONTINGENCIES. The following conditions set forth in
this SECTION 8 are conditions precedent to Buyer's obligation to purchase
the Assets.
8.1. HYATT ESTOPPEL. Buyer shall have received the Hyatt
Estoppel, executed by Hyatt. Seller shall exercise diligent, reasonable
efforts to obtain the execution of the Hyatt Estoppel prior to Closing.
Buyer shall fully cooperate with Seller, and provide all information
requested by Hyatt to enable Seller to obtain the Hyatt Estoppel.
8.2. GROUND LEASE ESTOPPEL. Buyer shall have received the
MassPort Estoppel, executed by MassPort. Seller shall use diligent,
reasonable efforts to obtain the execution of the MassPort Estoppel prior
to Closing. Buyer shall fully cooperate with Seller, and provide all
information requested by MassPort to enable Seller to obtain the MassPort
Estoppel.
8.3. BOND ESTOPPEL. Buyer shall have received the Bond
Estoppel, executed by the Bond Trustee. Seller shall exercise diligent,
reasonable efforts to obtain the execution of the Bond Estoppel prior to
Closing. Buyer shall fully cooperate with Seller, and provide all
information requested by the Bond Trustee to enable Seller to obtain the
Bond Estoppel.
8.4. TRUTH OF REPRESENTATIONS. All of Seller's
representations and warranties contained in or made pursuant to this
Agreement shall have been true and correct when made in all material
respects and shall be true and correct in all material respects as of
Closing. For purposes hereof, the foregoing representations and warranties
shall be deemed true and correct in all material respects if the damage to
Buyer with respect to any failure of the same to be true and correct does
not, together with any failure of Seller to perform all of its covenants
hereunder and any failure of any condition to Buyer's obligation to close
hereunder, in the aggregate, exceed Seventy-Five Thousand Dollars
($75,000.00).
8.5. SELLER'S COVENANTS. Seller shall have executed and
delivered all documents to be executed and delivered by Seller hereunder,
and all other material covenants of Seller to be performed on or before the
Closing Date shall have been fulfilled by Seller in a timely fashion as set
forth in this Agreement, or such performance shall have been waived by
Buyer. For purposes hereof, Seller shall be deemed to have performed all
of its material covenants hereunder so long as the damage to Buyer from the
failure of Seller to perform such covenants does not, together with any
failure of Seller's representations and warranties contained in or made
pursuant to this Agreement to be true and current and any failure of any
condition to Buyer's obligation to close hereunder, in the aggregate,
exceed Seventy-Five Thousand Dollars ($75,000.00).
8.6. UCC FILINGS. There are no Uniform Commercial Code
financing statements filed against Seller which would be a lien on the
Personalty at the time of the Closing, other than any such financing
statements filed as a result of the actions of Hyatt in the ordinary course
of business under the Management Agreement.
8.7. COMPLIANCE WITH AGREEMENTS. All material covenants and
obligations of Seller to be performed on or before the Closing Date under
the Bonds, all Contracts (including, without limitation, the Management
Agreement) and the Ground Lease shall have been performed by Seller. For
purposes hereof, Seller shall be deemed to have performed all of its
material covenants and obligations under the Bonds, all Contracts and the
Ground Lease, so long as any failure to perform the same does not, together
with any damage to Buyer resulting from the failure of any of Seller's
representations and warranties contained in or made pursuant to this
Agreement to be true and current and any failure of Seller to perform all
of its covenants hereunder, result in damage to Buyer in excess of Seventy-
Five Thousand Dollars ($75,000.00) in the aggregate.
8.8. TITLE INSURANCE POLICY. At the Closing, Escrow Agent
shall issue to Buyer a leasehold policy of title insurance (ALTA 1990 Form)
(insuring, without limitation, Buyer's fee interest in the Improvements)
pursuant to and in the form provided for by the Title Commitment (the
"TITLE POLICY"), or the unconditional commitment of the Escrow Agent to
issue the Title Policy, insuring Buyer in the amount of the Purchase Price
that title to the Hotel has vested in Buyer free and clear of all liens and
encumbrances other than the Permitted Title Exceptions and such other
matters as are approved, or waived, by Buyer in writing, together with a
comprehensive endorsement, an access endorsement, a survey endorsement and
such other endorsements as have been requested by Buyer and, prior to the
Title Due Diligence Expiration Date, the Escrow Agent has committed to
issue. The Escrow Agent shall obtain reinsurance with direct access
agreements for any title insurance coverage in excess of Forty Million
Dollars ($40,000,000.00), from reinsurers acceptable to Buyer in its
reasonable discretion. Seller shall provide an affidavit or indemnity to
the Escrow Agent as necessary to delete the standard exceptions for
mechanics' and materialmen's liens and parties in possession (the "SELLER'S
TITLE AFFIDAVIT"). Buyer shall be responsible for paying the premium for
the Title Policy.
8.9. CLOSING BALANCES. On the Closing Date, the balance of
the FF&E Reserve shall not be less than $1,375,000.00 and the balance of
the Debt Service Reserve Fund, which is part of the Bond Reserves, shall
not be less than $4,000,000.00.
8.10.TRANSFER OF LIQUOR LICENSE. The liquor license for the
Hotel shall have been transferred to Buyer or, if the transfer has not been
achieved on or before the Closing Date, at Closing, Seller shall enter into
the Operating Agreement.
8.10.1. TAX AND LITIGATION ESCROW. Concurrently with
the Closing, Seller shall place a portion of the Purchase Price equal to
One Million Dollars ($1,000,000) into an escrow account to be held by the
Escrow Agent pursuant to a mutually satisfactory escrow agreement which
shall provide for the release of such funds either (i) to the Seller upon
receipt of the item(s) described in Section 11.3(m) below or (ii) to the
Massachusetts Department of Revenue for the payment of such taxes upon
receipt of written direction from Seller. Notwithstanding the foregoing,
$100,000 of such escrowed funds shall not be released to Seller until
Seller delivers reasonably satisfactory evidence to Buyer that the
litigation set forth in EXHIBIT Q has been resolved by either a final
determination or settlement. Without limiting any other term hereof,
Seller shall remain liable following the Closing for any costs and expenses
arising out of the litigation set forth in EXHIBIT Q.
9. SELLER'S CONTINGENCIES. The following conditions set forth in
this SECTION 9 are conditions precedent to Seller's obligation to sell the
Assets.
9.1. HYATT ESTOPPEL. Seller shall have received the Hyatt
Estoppel, executed by Hyatt.
9.2. TRUTH OF REPRESENTATIONS. All of Buyer's representations
and warranties contained in or made pursuant to this Agreement shall have
been true and correct when made in all material respects and shall be true
and correct in all material respects as of Closing. For purposes hereof,
the foregoing representations and warranties shall be deemed true and
correct in all material respects if the damage to Seller with respect to
any failure of the same to be true and correct does not, together with any
failure of Buyer to have performed all of its covenants hereunder and any
failure of any condition to Seller's obligation to close hereunder, in the
aggregate, exceed Seventy-Five Thousand Dollars ($75,000.00).
9.3. BUYER'S COVENANTS. Buyer shall have executed and
delivered all documents to be executed and delivered by Buyer hereunder,
and all other material covenants of Buyer to be performed on or before the
Closing Date shall have been fulfilled by Buyer in a timely fashion as set
forth in this Agreement, or such performance shall have been waived by
Seller. For purposes hereof, Buyer shall be deemed to have performed all
of its material covenants hereunder so long as the damage to Seller from
the failure of Buyer to perform such covenants, does not, together with any
failure of any of Buyer's representations and warranties contained in or
made pursuant to this Agreement to be true and correct and any failure of
any condition to Seller's obligations to Close hereunder, in the aggregate,
exceed Seventy-Five Thousand Dollars ($75,000.00).
9.4. INTENTIONALLY OMITTED.
9.5. BUYER LEASE. Concurrently with the Closing, Buyer and
Buyer's Lessee shall have entered into the Buyer Lease.
9.6. TRANSFER OF LIQUOR LICENSE. The liquor license for the
Hotel shall have been transferred to Buyer or, if the transfer has not been
achieved on or before the Closing Date, at Closing, Buyer shall enter into
the Operating Agreement.
10. SELLER'S COVENANTS. From and after the date of this Agreement
until the Closing Date, or the earlier termination of this Agreement.
10.1.MAINTENANCE OF THE PROJECT. Seller shall: (a) cause the
Hotel to be maintained and operated in accordance with its current
standards and consistent with its current operating procedures for the
Hotel, including, without limitation, maintenance of furnishings, fixtures
and equipment, Food and Beverage Inventory and Concession Inventory and
Operating Supplies; (b) not sell or otherwise dispose of any significant
items of Personalty unless replaced with an item of like value, quality and
utility (but this prohibition shall not extend to Food and Beverage
Inventory, Concession Inventory and Operating Supplies, which shall be
subject to clause (a)); (c) not enter into any service, maintenance,
landscaping, operating, repair, equipment lease, employment, management,
leasing or other similar contract or agreement relating to the operation or
maintenance of the Hotel, the charges to the Hotel under which reasonably
may be expected to exceed Fifty Thousand Dollars ($50,000.00) in any given
instance or One Hundred Fifty Thousand Dollars ($150,000.00) in the
aggregate except for those which are cancelable upon in the event of a sale
of the Hotel; (d) maintain in full force and effect all liability and
casualty insurance currently in effect; and (e) not modify the current
operating budget for the Hotel without Buyer's prior written consent, which
consent shall not be unreasonably withheld, delayed or conditioned, or
modify the current capital budget for the Hotel, except as provided in
SECTION 10.3 below.
10.2.PERMITS AND APPROVALS. Seller shall cooperate with Buyer
as reasonably requested in obtaining all Permits and Approvals required for
Buyer's acquisition of the Hotel and shall not seek or acquiesce in any
amendment to any of the existing Permits and Approvals or any change in the
present zoning regulation of the Hotel.
00.0.XXXXXXX IMPROVEMENTS. Seller shall not undertake any
program of capital improvements, replacements or alterations of the
Improvements or the Personalty, or any portion thereof, except for repairs
and replacements undertaken in the ordinary course of business (including
all repairs and replacements necessitated by a casualty, the cost of which
is not in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00)
in the aggregate).
10.4.AMENDMENTS. Seller shall not amend or modify the Ground
Lease, the Bond Documents, or the Management Agreement, and shall not
default or cause a default thereunder.
10.5.INTENTIONAL ACTS. Seller shall not intentionally and in
bad faith act, or intentionally and in bad faith fail to act, in a fashion
that would render any of Seller's representations and warranties contained
in SUBSECTION 14.2 of this Agreement, or any statement set forth in the
estoppels to be provided to Buyer pursuant to SUBSECTION 11.3 of this
Agreement, to become inaccurate in any material manner (as defined in
Section 8.4 above), nor shall Seller intentionally create an encumbrance on
title to the Assets which is not a Permitted Title Exception.
11. THE ESCROW AND CLOSING.
11.1.ESCROW INSTRUCTIONS. Buyer and Seller shall establish
the Escrow with Escrow Agent to facilitate the consummation of the
transaction contemplated by this Agreement. Seller and Buyer each shall
give Escrow Agent such instructions as reasonably may be necessary or
appropriate to close the transaction provided for by this Agreement in
accordance with the terms of this Agreement.
11.2.CLOSING. The Closing shall occur through the Escrow and
shall take place on the Closing Date at the offices of Xxxxxxx, Procter &
Xxxx XXX, Xxxxxxxx Xxxxx, Xxxxxx, XX 00000 at 10:00 a.m. Boston time, or
such other place or time as the parties may mutually agree in writing.
11.3.ACTION AT THE CLOSING BY SELLER. At or prior to the
Closing, Seller shall deliver or cause to be delivered to Buyer, or to
Escrow Agent for the account of Buyer, all of the following, and with
respect to any instruments or documents referred to below, all such items
shall be dated as of the Closing, fully and duly executed by Seller and, if
appropriate, notarized in form for recordation:
(a) An Assignment and Assumption of the Ground
Lease to Buyer, in the form of EXHIBIT "K" attached;
(b) An Assignment and Assumption of the
Management Agreement to Buyer's Lessee in the form of EXHIBIT "L" attached
hereto;
(c) An Assignment and Assumption of the Contracts
(other than the Management Agreement) to Buyer's Lessee in the form of
EXHIBIT "M" attached hereto;
(d) An Assignment of the Intangible Property to
Buyer in the form of EXHIBIT "N" attached hereto;
(e) A Xxxx of Sale to Buyer relating to the
Personalty in the form of EXHIBIT "O" attached hereto;
(f) An Affidavit of Non-Foreign Person as
contemplated by Federal Code Section 1445, in the form of EXHIBIT "P"
attached hereto;
(g) A certificate of Seller remaking the
representations and warranties of Seller contained herein, as of the
Closing Date, or if any representation and warranty is no longer true and
correct after the date of this Agreement, specifying in detail the reason
no longer correct, subject to the limitations on survival set forth in this
Agreement;
(h) All keys and/or means to operate all locks
and alarms at the Hotel in Seller's possession (excluding any such items
located within the Hotel);
(i) The originals of the Contracts (including,
without limitation, the Management Agreement), the Ground Lease, and the
Permits and Approvals, to the extent in Seller's possession and not
previously delivered to Buyer;
(j) Such documentation as is satisfactory to
Buyer and Escrow Agent in their reasonable discretion evidencing that
Seller, and the individual(s) signing on behalf of Seller, has(have) the
power and authority to execute and deliver this Agreement and all documents
and instruments required or contemplated hereby; provided, however, that no
legal opinion shall be required;
(k) A written acknowledgment of Seller's approval
of the settlement statement provided for by SUBSECTION 12.2 setting forth
all prorations and adjustments made in accordance with the provisions of
this Agreement; and
(l) If the Hotel liquor license has not been
transferred to Buyer, the Operating Agreement;
(m) A copy of a compliance letter from the
Massachusetts Department of Revenue with respect to Seller's payment of
sales taxes and rooms/occupancy tax and copy of a Tax Good Standing
Certificate for Eastrich No. 110 Corporation from the Massachusetts
Department of Revenue or, in each case, other evidence satisfactory to
Buyer in its reasonable discretion, dated not earlier than fifteen (15)
days before the Closing Date, indicating that there are no outstanding
sales taxes or room/occupancy taxes relating to the operation of the Hotel
or any business operated thereon, or otherwise in connection with the Hotel
liquor license (in the event that such compliance letter or Tax Good
Standing Certificate is not available by the Closing, Seller will continue
to prosecute obtaining such letter or certificate after the Closing); and
(n) Such other instruments or documents, if any,
as reasonably are necessary to consummate the sale of the Assets to Buyer
pursuant to this Agreement.
11.4.ACTION AT THE CLOSING BY BUYER. At or prior to the
Closing, Buyer shall deliver or cause to be delivered to Seller, or to
Escrow Agent for the account of Seller, all of the following, and with
respect to any instruments or documents referred to below, all such items
shall be dated as of the Closing, fully and duly executed by Buyer or
Buyer's Lessee, as the case may be, and, if appropriate, notarized in form
for recordation:
(a) All funds necessary to pay the Purchase
Price, together with all closing costs and applicable prorations payable by
Buyer;
(b) An Assignment and Assumption of the Ground
Lease, in the form of EXHIBIT "K" attached hereto, duly executed and
acknowledged by Buyer;
(c) An Assignment and Assumption of the
Management Agreement in the form of EXHIBIT "L" attached hereto, duly
executed by Buyer's Lessee;
(d) An Assignment and Assumption of the
Contracts, (other than the Management Agreement) in the form of EXHIBIT "M"
attached hereto duly executed by Buyer's Lessee;
(e) An Assignment of the Intangible Property in
the form of EXHIBIT "N" attached hereto, duly executed by Buyer;
(f) A Certificate of Buyer remaking the
representations and warranties of buyer contained herein, as of the Closing
Date, or if any representation and warranty is no longer true and correct
after the date of this Agreement, specifying in detail the reason no longer
correct, subject to the limitations on survival set forth in this
Agreement;
(g) Such documentation as is satisfactory to
Seller and Escrow Agent in their reasonable discretion evidencing that
Buyer and Buyer's Lessee, and the individuals signing on behalf of Buyer
and Buyer's Lessee, have the power and authority to execute and deliver
this Agreement and all documents and instruments required or contemplated
hereby; provided, however, that no legal opinion shall be required;
(h) A written acknowledgment of buyer's approval
of the settlement statement provided for by SUBSECTION 12.2 setting forth
all prorations and adjustments made in accordance with the provisions of
this Agreement; and
(i) If the Hotel liquor license has not been
transferred to Buyer, the Operating Agreement, duly executed by Buyer.
(j) Such other funds, instruments or documents,
if any, as reasonably are necessary to consummate the sale of the Assets to
Buyer pursuant to this Agreement.
11.5.POSSESSION. Seller shall deliver possession of the Assets
to Buyer at the Closing, subject to the rights of others pursuant to the
Permitted Title Exceptions and the Management Agreement, and subject to the
provisions of SUBSECTION 4.4 above, with respect to Seller's inventory of
alcoholic beverages, in the event that Seller and Buyer enter into the
Operating Agreement at Closing.
11.6.EXTENSION TO SATISFY CONDITIONS. If, on the Closing
Date, Seller shall be unable to give title or make conveyance, or to
deliver possession of the Assets, all as herein set forth, or any of the
closing conditions listed in SECTIONS 8 or 9 have not been satisfied, then
the Closing Date shall be extended for a period of thirty (30) days. If
the time of Closing is extended as provided in this Subsection and Seller
is able to convey title and deliver possession as provided herein within
the extended period, Seller may specify an earlier Closing Date upon
fifteen (15) days' notice to Buyer. If the Closing Date is extended
pursuant to this SUBSECTION 11.6, and if on the extended Closing Date any
of the closing conditions set forth in SECTIONS 8 or 9 hereunder are not
satisfied, the Xxxxxxx Money plus interest earned thereon shall be refunded
to Buyer and all obligations of the parties hereto shall cease and this
Agreement shall be void and without recourse to the parties hereto. Except
as otherwise provided herein, Buyer shall have the election, at either the
original or extended Closing Date, to accept such title as Seller can
deliver to the Assets in their then condition and to pay the Purchase Price
without deduction, in which case Seller shall convey such title and make
such delivery (but nothing in this SUBSECTION 11.6 shall limit any
obligation of Seller to cure any Title Objections that Seller is obligated
to cure pursuant to SUBSECTION 6.1 above).
11.7.TRANSFER OF GUEST PROPERTY IN SAFEKEEPING.
(a) At the Closing, Seller shall cause Manager to
provide Buyer and Seller with an inventory of all baggage or other property
of guests of the Hotel which has been checked with or left in the care of
Manager on the Closing Date, and a list of all guests of the Hotel
maintaining items in the safe-deposit boxes as of the Closing Date.
(b) Buyer shall be responsible for all property
listed on such inventory and items in the safe-deposit boxes on such list,
but Buyer shall not be liable or responsible for any checked property not
included on such inventory or any items contained in any Hotel safe deposit
box not specified on such list. Seller shall indemnify and hold harmless
Buyer from and against any liability or responsibility in connection with
the theft or mishandling of such items prior to the Closing Date, and Buyer
shall indemnify and hold harmless Seller from and against any liability or
responsibility in connection with the theft or mishandling of such items
from and after the Closing Date.
(c) The provisions of this SUBSECTION 11.7 shall
survive Closing.
12. CLOSING COSTS AND STATEMENT.
12.1.CLOSING COSTS. Buyer shall be solely responsible for all
appraisal and engineering fees and other costs, fees and expenses
associated with Buyer's Investigations. Buyer and Seller each shall be
responsible for their own legal fees and costs of their respective legal
counsel. The escrow fee payable to Escrow Agent in respect of the
conveyance and transfer of the Assets to Buyer shall be shared equally by
the parties. Seller and Buyer each shall pay one-half of the cost of the
deed stamps, if any, required for the Assignment and Assumption of the
Ground Lease based on the portion of the Purchase Price allocated to the
Hotel, less the outstanding amount of the Bonds. Buyer's title insurance
premium and all recording costs shall be paid by Buyer, but Seller shall
pay for the title examination fees charged by Escrow Agent.
12.2.SETTLEMENT STATEMENT. At least three (3) business days
prior to the Closing, Buyer and Seller shall prepare a preliminary
settlement statement setting forth in detail all prorations and adjustments
contemplated by this Agreement.
13. CLOSING ADJUSTMENTS AND PRORATIONS. The following prorations
and adjustments shall occur as of the Closing and, prior to the Closing
Date, Seller shall provide all information to Buyer required to calculate
such prorations and adjustments; representatives of Buyer and Seller shall
together make such calculations and provide Escrow Agent with the results
of such prorations and adjustments. If the actual amount of any amounts to
be prorated for the period in which the Closing occurs is not known as of
the Closing Date, the proration shall be done using the parties' reasonable
estimates of such amounts, based upon the most current information
available, and reprorated when the actual amounts are known.
13.1. TAXES. All personal property taxes, sales and use
taxes, hotel room or bed taxes, rental taxes or similar taxes, and any
general or special assessments in respect of the Hotel, shall be prorated
as of the Closing Date such that Seller shall be responsible for all such
payments, taxes and assessments that are allocable to any period prior to
the Closing Date and Buyer shall be responsible for all such payments,
taxes and assessments that are allocable to any period from and after the
Closing Date. Neither property taxes, nor payments in lieu of real
property taxes, will be prorated because no real property taxes or payments
in lieu of real property taxes are currently payable with respect to the
Hotel.
13.2. PREPAID EXPENSES. At the Closing, Buyer shall be
charged for those prepaid expenses allocable to any period from and after
the Closing, including, without limitation, prepaid rents (including all
base rent under the Ground Lease), annual permit and inspection fees, fees
for Permits and Approvals transferred to Buyer at the Closing and all
security or other deposits paid by Seller to third parties for which the
right to the return of any such sums is transferred to Buyer at the
Closing, all as set forth on EXHIBIT R, except as otherwise expressly
provided herein.
13.3.CONTINGENT PAYMENTS. At Closing, the parties shall
prorate Additional Rent and Contingent Rent under the Ground Lease and the
incentive fee under the Management Agreement for the year in which the
Closing occurs, using actual figures to date and figures reflected by the
Hotel operating budget for the balance of the year. Such calculation shall
be done using monthly income figures, attributing monthly income to the
parties for their actual respective periods of ownership and prorating each
threshold for any such payment over the period to which the threshold is
applicable. At the end of the year, these amounts shall be reprorated
pursuant to SUBSECTION 13.14 below.
00.0.XXXX PAYMENTS AND RESERVES. There shall be a credit to
Seller for the aggregate amount of the Bond Reserves accounts as specified
in Subsection 4.3 above (such amount, including, without limitation, the
sum of Eighty Five Thousand, One Hundred and Twenty Seven Dollars and
86/100 Dollars ($85,127.86), (which amount is equal to the amount of the
outstanding balance of Debt Service Reserve Fund in excess of $4,000,000 as
of the date hereof), referred to herein as the "Seller's Funds") except,
notwithstanding the terms of Section 4.3 above, Seller shall NOT receive a
credit against the Purchase Price at Closing for the Seller's Funds;
PROVIDED, HOWEVER, that in the event Seller does not receive the Seller's
Funds directly from the Bond Trustee prior to receipt by Buyer of the
September, 1998 distribution from the Bond Reserves accounts in accordance
with the Bond Documents, then Buyer shall, upon, and to the extent of
Buyer's receipt of, such September, 1998 distribution, pay an amount equal
to the Seller's Funds to Seller. The payment of the Seller's Funds to
Seller, to the extent that Buyer receives the September, 1998 distribution
from the Bond Reserves accounts in accordance with the Bond Documents,
shall be treated for purposes of this Agreement as a reimbursement of
Seller by Buyer pursuant to Section 13.14 hereof. Interest payments due on
the Bonds and payments due on the Equity Reserve Fund that is part of the
Bond Reserves for the period in which the Closing Date falls shall be
prorated as of the Closing.
00.0.XXXX. All xxxxx cash and cash in cash registers and
vending machines as of 11:59 p.m., Boston time, on the day preceding the
Closing Date shall remain the property of Seller, and if not paid to Seller
at or before the Closing shall be charged to Buyer.
13.6.RENTAL RECEIPTS. All receipts from guest room and
conference center rentals prior to the Closing Date shall belong to Seller.
One-half of the guest room rentals and other revenue, whether in cash or
accounts receivable, arising from the entire night beginning on the day
preceding the Closing Date shall be credited to each of Buyer and Seller.
All prepaid rentals, rental deposits and all other deposits for advance
registration, conferences, banquets, or future services paid to Seller
prior to the Closing Date with respect to periods after the Closing Date
shall be credited to Buyer.
00.0.XXXX AND BEVERAGE RECEIPTS. All receipts and expenses
from restaurant and bar operations to the closing hours of the Hotel
business day preceding the Closing Date shall belong to, and be paid by,
Seller.
13.8.POSTAGE METER. Postage meter rental and unused meter
postage shall be prorated as of 11:59 p.m., Boston time, on the day
preceding the Closing Date.
13.9.ACCOUNTS RECEIVABLE. Except as set forth in SUBSECTIONS
13.5 and 13.6 above, all receipts, whether in cash, accounts receivable, or
credit card claims, for Hotel goods and services furnished prior to 11:59
p.m., Boston time, on the day preceding the Closing Date shall remain the
property of Seller and, to the extent Buyer receives any payments on
account thereof after Closing, Buyer shall immediately remit such amount to
Seller. All such receipts for Hotel goods and services furnished after
such time and date shall belong to Buyer, except as expressly provided
herein.
13.10. ACCOUNTS PAYABLE. All accounts payable owing for
goods and services (including, but not limited to, amounts owing under the
Management Agreement and the Contracts) furnished prior to 11:59 p.m.,
Boston time, on the day preceding the Closing Date shall be paid by Seller
or assumed by Buyer (and Buyer shall receive a credit in the amount of the
liability assumed), except that Buyer shall assume (and Buyer shall not
receive a credit in the amount of the liability assumed) the obligation to
pay (or reimburse Seller if Seller has prepaid for any such items) for all
goods and services (including advertising) for which orders have been
placed but, as of 11:59 p.m., Boston time, on the day preceding the Closing
Date, such goods and services have not yet been provided or delivered;
provided that such goods and services are of the type, quality and quantity
used by Seller in the ordinary course of operating the Hotel or were
specifically contemplated in current Hotel budgets delivered to Buyer prior
to the date hereof. Not less than ten (10) days prior to Closing Seller
shall provide Buyer with a detailed list of all such accounts payable, or
prepaid items, for which Buyer will be responsible. Within five (5)
business days following receipt of Seller's list of accounts payable, Buyer
must notify Seller of its objection to any accounts payable described
thereon which Buyer in good faith reasonably believes are of the type,
quality and quantity not used by Seller in the ordinary course of operating
the Hotel; otherwise, Buyer shall be obligated to reimburse Seller for all
amounts described on Seller's list.
13.11. UNOPENED INVENTORY. Buyer shall be charged the
original net invoice cost paid by Seller (less any commissions or fees paid
to Seller or its affiliates) for all useable Operating Supplies, Food and
Beverage Inventory or Concession Inventory to be transferred to Buyer,
which, as of 11:59 p.m., Boston time, on the day preceding the Closing Date
remain Unopened Inventory. Without additional charge, Buyer shall be
entitled to retain all items of Operating Supplies, Food and Beverage
Inventory and Gift Shop Inventory that do not remain Unopened Inventory on
the Closing Date. "UNOPENED INVENTORY" shall refer to all items of
Operating Supplies, Food and Beverage Inventory and Concession Inventory
that remain in unopened crates or cases or which otherwise remain in
unopened packages and substantially in the form as received by Seller from
the supplier, provided that each of the following in any event shall be
treated as Unopened Inventory: (a) unopened bottles of wine and liquor
(excepting any such inventory maintained behind the Hotel bar, in the
restaurant's food preparation or dining areas or in guest rooms), (b) items
delivered to and stored by Seller on open flats, and (c) items which remain
in unopened crates or cases whether or not received by Seller from the
supplier within larger crates or cases. Representatives of Buyer and
Seller shall conduct an inventory of such Operating Supplies and Concession
Inventory on the day preceding the Closing Date and shall inventory the
Food and Beverage Inventory as of the close of business of the business day
which commenced on the day preceding the Closing Date. The provisions of
this SUBSECTION 13.11, with respect to the inventory of alcoholic
beverages, shall be subject to the provisions of SUBSECTION 4.4 above, in
the event that Buyer and Seller enter into the Operating Agreement at
Closing.
13.12. WAGES AND BENEFITS. Seller shall be charged, and
Buyer shall receive a credit, on account of all wages, vacation and holiday
pay, payroll expenses, severance pay, pension and other fringe benefits and
other Hotel employee benefits accrued and unpaid as of 11:59 p.m., Boston
time, on the date preceding the Closing Date, plus one-half of all sick pay
accrued and unpaid as of 11:59 p.m., Boston time on the date preceding the
Closing Date.
13.13. UTILITY AND MAINTENANCE CHARGES. Seller shall pay
or cause to be paid (i) all unpaid charges for water, electricity, gas,
trash removal, sewer, telephone or other utility services which are
furnished to or in connection with the Hotel prior to the Closing Date, and
(ii) all unpaid charges for landscaping and all other maintenance services
which are furnished to or in connection with the Hotel prior to the Closing
Date. Not less than three (3) days prior to Closing, Seller and Buyer shall
notify and instruct the suppliers of the foregoing utility services to read
the meters for such services as of the day prior to the Closing Date and to
render to Seller a final statement for all charges for utility services
furnished to the Hotel prior to the Closing Date. If the final meter
readings cannot be obtained, Buyer and Seller shall prorate such charges
based upon the particular utility company's billing for the immediately
preceding billing period determined on a per diem basis based on the actual
number of days in the billing period. Buyer shall receive a credit for the
allocated amount of such charges applicable to the period to and including
the day preceding the Closing Date and, following the Closing, Buyer shall
be responsible for, and shall pay, all xxxxxxxx received from the utility
company for the current and future billing periods. Buyer shall be charged
at Closing for any deposits for utility services made by Seller, and all
Seller's rights to such deposits shall be assigned to Buyer at Closing.
13.14. ADJUSTMENTS TO PRORATIONS. After the Closing, the
parties shall from time to time, as soon as is practicable after accurate
information becomes available, recalculate and reapportion any of the items
subject to proration or apportionment under this SECTION 13: (i) which
were not prorated and apportioned at the Closing because of the
unavailability of the information necessary to compute such proration, or
(ii) which were prorated or apportioned at the Closing based upon estimated
or incomplete information, or (iii) for which any errors or omissions in
computing prorations at the Closing are discovered subsequent thereto, and
thereafter the proper party shall be reimbursed based on the results of
such recalculation and reapportionment. Unless otherwise specified herein,
all such reimbursements shall be made on or before ten (10) business days
after receipt of notice of the amount due. Any such reimbursements not
timely paid shall bear interest at a per annum rate equal to ten percent
(10%) from the due date until all such unpaid sums together with all
interest accrued thereon is paid if payment is not made within ten (10)
business days after receipt of a xxxx therefor.
13.1le SURVIVAL. The provisions of this SECTION 13 shall
survive Closing.
14. LIMITED REPRESENTATIONS AND WARRANTIES.
14.1. BUYER. Buyer represents and warrants to Seller that, as
of the date of this Agreement:
14.1.1. Buyer is a duly formed and validly existing
limited partnership under the law of the State of Delaware, and Buyer has
the full right, authority and power to enter into this Agreement, to
consummate the transaction contemplated herein and to perform its
obligations hereunder and under those documents and instruments to be
executed by it at the Closing, and this Agreement constitutes a valid and
legally binding obligation of Buyer enforceable against Buyer in accordance
with its terms.
14.1.2. Buyer's execution and delivery of this
Agreement, the consummation of the transaction contemplated hereby and the
performance of Buyer's obligations under the documents and instruments
required to be delivered by Buyer at the Closing, do not and will not
result in any violation of, or default under, any term or provision of any
agreement, instrument, mortgage, loan agreement or similar document to
which Buyer is a party or by which Buyer is bound.
14.1.3. There is no litigation, investigation or
proceeding pending or, to the best of Buyer's knowledge, contemplated or
threatened against Buyer which would impair or adversely affect Buyer's
ability to perform its obligations under this Agreement or any other
instrument or document related hereto.
14.1.4. Other than as expressly set forth in Seller's
representations and warranties below and the estoppels to be delivered
pursuant to SUBSECTION 11.3 of this Agreement, Buyer has not relied on any
documents, brochures, maps, projections, financial statements or other
information or materials delivered, or caused to be delivered, by Seller.
14.1.5. INTENTIONALLY OMITTED.
14.2.SELLER. Seller represents and warrants to Buyer that, as
of the date of this Agreement:
14.2.1. Seller is a duly formed and validly existing
limited partnership under the laws of the Commonwealth of Massachusetts,
and Seller has the full right, authority and power to enter into this
Agreement, to consummate the transaction contemplated herein and to perform
its obligations hereunder and under those documents and instruments to be
executed by it at the Closing, and this Agreement constitutes a valid and
legally binding obligation of Seller enforceable against Seller in
accordance with its terms.
14.2.2. Seller's execution and delivery of this
Agreement, and the consummation of the transaction contemplated hereby and
the performance of Seller's obligations under the instruments required to
be delivered by Seller at the Closing, do not and will not result in any
violation of, or default under, any term or provision of any agreement,
instrument, mortgage, loan agreement or similar document to which Seller is
a party or by which Seller is bound.
14.2.3. Except as set forth in EXHIBIT "Q" attached
hereto, to the best of Seller's knowledge, there is no pending or
threatened (in writing) litigation against Seller pending before any court
in which Seller is or will be a party by reason of Seller's ownership of
the Hotel or any portion thereof. In the event Seller becomes aware that
any proceeding of the character described in this subparagraph is initiated
prior to Closing, Seller shall promptly advise Buyer in writing.
14.2.4. Except as disclosed to Buyer in writing prior to
the date hereof, Seller has received no written notice from any insurance
carrier of defects or inadequacies in the Hotel.
14.2.5 Except as disclosed to Buyer in writing prior to
the date hereof, Seller has received no written notice from any municipal,
state, federal or other governmental authority of the existence or alleged
existence of any violation of Laws pertaining to the use and operation of
the Hotel.
14.2.5. No proceeding has been filed by Seller nor, to
the best of Seller's knowledge, has any proceeding been filed against
Seller under the United States Bankruptcy Code or any state law relating to
bankruptcy or insolvency, seeking liquidation or reorganization of Seller,
nor has there been any general assignment for the benefit of Seller's
creditors or an appointment of a trustee or receiver for its assets.
14.2.6. There are no unpaid or outstanding payments in
lieu of real estate taxes or personal property taxes on the Hotel or any
part thereof which are payable by Seller, except payments for personal
property taxes which are not yet due and payable.
14.2.7. Seller has not entered into any leases nor
granted any licenses or similar rights with respect to the Hotel, except
the Ground Lease and any lease, license or similar right granted or entered
into by Hyatt as Seller's agent pursuant to the Management Agreement in the
ordinary course of business.
14.2.8. To the best of Seller's knowledge, the Ground
Lease is in full force and effect, no material default exists on the part
of Landlord or Tenant, and the Ground Lease has not been further amended or
modified.
14.2.9. To the best of Seller's knowledge, the
Management Agreement is in full force and effect, no material default
exists on the part of Seller or Hyatt, and such agreement has not been
modified or amended.
14.2.10. To the best of Seller's knowledge, the Bond
Documents are in full force and effect, no material default exists on the
part of Seller under the Bond Documents, and the Bond Documents have not
been modified or amended.
14.2.11. Seller has no employees at the Hotel.
14.2.12. To the best of Seller's knowledge, the
Contracts listed on EXHIBIT E are all of the material Contracts, are in
full force and effect, and are without material default on the part of
Seller thereunder.
14.2.13. To the best of Seller's knowledge, Seller has
received no written notice of any special assessment against the Hotel.
As used in this SUBSECTION 14.2, the expression "To the best of Seller's
knowledge" shall refer solely to the actual knowledge as of the date of
this Agreement of Xxxxx Xxxxxxx and Xxxxxxxxx Xxxxxx, without either
individual having made or conducted, and without either being under any
obligation to make or conduct, any investigation, review or inquiry
whatsoever with respect to the matters referenced. Buyer is not relying on
such individuals to have made any investigation, review or inquiry.
Further, for the purposes of this SUBSECTION 14.2, no material default
shall be deemed to exist under any of the Ground Lease, the Management
Agreement or the Bond Documents for purposes of SUBSECTION 14.2.9, 14.2.10,
14.2.11, unless the default thereunder, together with any failure of any of
Seller's representations and warranties contained in or made pursuant to
this Agreement to be true and correct, any failure of Seller to perform any
of all of its covenants hereunder, and any other failure of the condition
contained in Section 8.7, in the aggregate, would damage Buyer in an amount
in excess of Seventy-Five Thousand Dollars ($75,000.00).
14.3.SURVIVAL OF BUYER'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Buyer set forth in SUBSECTION 14.1 shall
not survive the termination or cancellation of this Agreement but shall
survive the Closing, provided that any claim by Seller or any party
claiming by, through or on behalf of Seller relating to any representation
and warranty shall be asserted by written notice to Buyer given not later
than one (1) year after the Closing Date, which notice shall set forth with
specificity the nature of the claim and the particulars thereof. Seller
agrees that it will not proceed against Buyer with respect to any claim
relating to any representation and warranty set forth in SUBSECTION 14.1
unless such claim, alone or in the aggregate with all other claims of
Seller under this SUBSECTION 14.3, involves a loss to Seller in excess of
Seventy-Five Thousand Dollars ($75,000.00).
14.4.SURVIVAL OF SELLER'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Seller set forth in SUBSECTION 14.2 shall
not survive the termination or cancellation of this Agreement but shall
survive the Closing, provided that any claim by Buyer or any party claiming
by, through or on behalf of Buyer relating to any representation and
warranty shall be asserted by written notice to Seller given not later than
one (1) year after the Closing Date, which notice shall set forth with
specificity the nature of the claim and the particulars thereof.
Notwithstanding the terms of any other provision of this Agreement, Buyer
agrees that it will not proceed against Seller with respect to any claim
relating to any representation and warranty set forth in SUBSECTION 14.2
unless such claim, alone or in the aggregate with all other claims of Buyer
under this SUBSECTION 14.4, involves a loss to Buyer or to the value of the
Hotel in excess of Seventy-Five Thousand Dollars ($75,000.00). Buyer
agrees that it will not proceed against Seller (except to give notice to
Seller within the one (1) year period provided above) with respect to any
claim affecting title to the Hotel unless Buyer shall have first made such
claim against Buyer's Title Insurer and proceeded in good faith to maximize
Buyer's claim against Buyer's Title Insurer and coverage for such claim
shall be denied or such claim shall not be fully satisfied by Buyer's Title
Policy.
15. NOTICES. All notices or other communications required or
provided to be sent by either party or Escrow Agent shall be in writing and
shall be sent by United States Postal Service, postage prepaid or certified
mail, return receipt requested, or by any nationally known overnight
delivery service, or by courier, or in person. All notices shall be deemed
to have been given ninety-six (96) hours following deposit in the United
States Postal Service or upon personal delivery if sent by overnight
delivery service, courier or personally delivered. Any notice or other
communication which may be mailed may also be transmitted by facsimile and
shall be deemed to have been delivered if and when received by the
addressee at the number set forth below. All notices shall be addressed to
the party at the address below:
If to Buyer:
LaSalle Hotel Operating Partnership, L.P.
c/o LaSalle Hotel Advisors, Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn:Xxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxx & Associates
000 X. Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn:X. X. Xxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Seller:
Bird Island Limited Partnership
c/o AEW Capital Management L.P.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxxxx, Procter & Xxxx LLP
Exchange Place
Boston, MA 02109-2881
Attn:Xxxxxxx X. Xxxxxx, P.C.
Tel: (000) 000-0000
Fax: (000) 000-0000
Any address or name or number specified above may be changed by notice
given to the addressee by the other party in accordance with this SECTION
15. The inability to deliver because of a changed address or number of
which no notice was given, or rejection or other refusal to accept any
notice, shall be deemed to be the receipt of the notice as of the date of
such inability to deliver or rejection or refusal to accept. Any notice to
be given by any party hereto may be given by the counsel for such party.
Any notice to be given to Escrow Agent shall be sent to the address set
forth in SECTION 1 above.
16. TRANSFER OF LIQUOR LICENSE. As soon as reasonable practicable
after execution of this Agreement, Buyer and Buyer Designee shall file or
cause to be filed an application for transfer of the Hotel Liquor License,
and thereafter shall prosecute such application with due diligence. Seller
agrees, both in connection with the application for transfer of the Hotel
liquor license to cooperate with Buyer in supplying information required or
reasonably requested by the licensing authority in executing authority in
executing any necessary documents for filing with the licensing authority,
provided that Buyer shall pay all application fees and other cost
attributable to the application and transfer. In the event that the Hotel
liquor license is not transferred to Buyer on or before the Closing, at
Closing, Buyer and Seller shall enter into an Interim License Operating
Agreement, collectively (the "OPERATING AGREEMENT"), in a form to be
negotiated by Buyer and Seller by June 18, 1998 and which shall, in any
event, be mutually satisfactory to Buyer and Seller. The provisions of
this SECTION 16 shall survive Closing, and if the Hotel liquor license is
not transferred to Buyer at the Closing, Buyer and Seller shall continue to
be obligated to pursue such transfer pursuant to the provisions hereof.
17. REMEDIES.
17.1.SELLER'S REMEDIES. Pursuant to the provisions of SECTION
5 of this Agreement if, on the Closing Date, (i) Buyer is in default of any
of its material obligations hereunder, or (ii) any of Buyer's
representations and warranties are untrue in any material respect, or
(iii) any condition to the obligation of Seller to close hereunder has not
been substantially satisfied, then, unless otherwise expressly provided in
this Agreement, Seller may elect, as its sole remedy, to (x) terminate this
Agreement by written notice to Buyer, or (y) waive the default, breach or
condition and proceed to close the transaction contemplated hereby in
accordance with the terms of this Agreement. For purposes of this
SUBSECTION 17.1, Buyer shall not be deemed to be in default of any of its
material obligations or in material breach of any of its representations
and warranties, unless the loss to Seller, in the aggregate, as a result of
all such breaches, defaults and/or failures of a condition, exceeds
Seventy-Five Thousand Dollars ($75,000.00). In the event that such
unsatisfied condition is within the reasonable control of Buyer, or Buyer
has defaulted in its obligations hereunder or intentionally caused such
representation and warranty to be untrue or such condition to be
unsatisfied, and this Agreement is so terminated, then Seller shall be
immediately entitled to the Xxxxxxx Money, together with all interest
accrued thereon, as liquidated damages, and thereafter neither party to
this Agreement shall have any further rights or obligations hereunder,
other than any arising under any provision herein which expressly provides
that it survives the termination of this Agreement. The amount of
liquidated damages set forth in this SUBSECTION 17.1 shall be for all loss,
damage and expense suffered by Seller, including, without limitation, the
loss of its bargain, it being agreed that Seller's damages are difficult if
not impossible to ascertain.
17.2.BUYER'S REMEDIES. If, on the Closing Date, (i) Seller is
in default of any of any of its material obligations hereunder, or (ii) any
of Seller's representations or warranties are untrue in any material
respect, or (iii) any condition to the obligation of Buyer to close
hereunder has not been substantially satisfied, then, unless otherwise
expressly provided in this Agreement, Buyer may elect, as its sole remedy,
to (x) terminate this Agreement by written notice to Seller, (y) waive such
default, breach or condition and proceed to close the transaction
contemplated hereby in accordance with the terms of this Agreement, without
any reduction of or credit against the Purchase Price, or (z) in the event
that such unsatisfied condition is within the reasonable control of Seller
or Seller has defaulted in its obligations hereunder or has intentionally
caused such representation and warranty to be untrue or such condition to
be unsatisfied, seek specific performance of this Agreement. For purposes
of this SUBSECTION 17.2, Seller shall not be deemed to be in default of any
of its material obligations or in material breach of any of its
representations and warranties, and the condition set forth in Section 8.7
shall be deemed substantially satisfied unless the loss to Buyer, in the
aggregate, as a result of all such breaches, defaults and/or failures of a
condition, exceeds Seventy-Five Thousand Dollars ($75,000.00). In the
event that this Agreement is so terminated, then Buyer shall be immediately
entitled to the Xxxxxxx Money, together with all interest accrued thereon,
and thereafter neither party to this Agreement shall have any further
rights or obligations hereunder, other than any arising under any provision
herein which expressly provides that it survives the termination of this
Agreement.
18. CASUALTY; CONDEMNATION. Seller shall notify Buyer immediately
of the occurrence of any damage to or destruction of the Hotel, or any
portion thereof, or the institution or maintenance of any condemnation or
similar proceedings with respect to the Hotel or any portion thereof. In
the event of any damage to or destruction of any portion of the Hotel for
which Buyer and Seller reasonably determine that the cost to repair exceeds
Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00), or in the
event any condemnation or similar proceedings are instituted or maintained
which, in the good faith reasonable business judgment of Buyer, would have
a material adverse effect on the Hotel, Buyer at its option either (i) may
terminate this Agreement, in which case the Xxxxxxx Money shall be returned
to Buyer and neither party shall have any further rights or obligations
hereunder except for any covenants or agreements which by the express
provisions of this Agreement survive a termination of this Agreement, or
(ii) may consummate the purchase evidenced by this Agreement. In the event
of the institution or maintenance of any condemnation or similar
proceedings which, in the good faith reasonable business judgment of Buyer,
would not have a material adverse affect on the Hotel, or in the event that
Buyer elects to consummate the purchase pursuant to clause (ii) above,
Buyer shall receive a credit at Closing in an amount equal to (A) all
insurance or condemnation proceeds collected by Seller prior to the
Closing, plus (B) Seller's deductible or self-insurance permit or such
lesser amount as is equal to the estimated cost to repair or reconstruct
those portions of the Hotel damaged or destroyed, and all rights to all
other insurance or condemnation proceeds arising out of such damage or
destruction or proceedings and not collected prior to the Closing,
including any business interruption and rental loss proceeds for any period
after the Closing, shall be assigned by Seller to Buyer as of the Closing.
In the event of any damage to or destruction of any portion of the Hotel
for which Buyer and Seller reasonably determine that the cost to repair
equals or is less than Two Hundred and Fifty Thousand Dollars
($250,000.00), Buyer shall receive a credit at Closing in an amount equal
to (x) the cost of the repair, as reasonably agreed upon by Buyer and
Seller, plus (y) an amount equal to business interruption loss to Buyer as
a result of the damage or destruction; and in such event Seller shall
remain entitled to all insurance proceeds attributable to such damage or
destruction.
19. COMMISSIONS. Each party warrants and represents to the other
that it has not dealt with any broker, finder or other party entitled to
any real estate sales or brokerage commission or finder's fee in connection
with this transaction, other than the Xxxxxxxxx Group, Inc. Seller agrees
to pay the commission due to the Xxxxxxxxx Group, Inc. arising out of this
transaction pursuant to a separate agreement between Seller and the
Xxxxxxxxx Group, Inc., but only if, as when the transaction provided for by
this Agreement closes. Each party agrees to indemnify, defend and hold
harmless the other party from and against any claims by any third parties
arising out of any breach of the representations, warranties or agreements
made by such party in this paragraph, and all costs and expenses incurred
by the indemnitee in connection therewith, including, but not limited to,
reasonable attorneys' fees. The indemnity provided for in this paragraph
shall survive the Closing or any earlier termination of this Agreement.
20. CONFIDENTIALITY AND RETURN OF SELLER DOCUMENTS. Buyer agrees
that, until after the Closing, all documentation or information delivered
or made available to Buyer or its representatives or agents by Seller or
Seller's representatives or agents pertaining to the Assets shall be kept
confidential and shall not, without the prior written consent of Seller, be
disclosed by Buyer or its representatives or agents to any third party, and
will not be used by Buyer or its representatives or agents, for any purpose
other than evaluating the Assets. Prior to Closing, neither party shall
release, or cause or permit to be released any press notices, publicity
(oral or written) or advertising or otherwise announce or disclose, or
cause or permit to be announced or disclosed, in any manner whatsoever, the
terms, conditions or substance of the transaction contemplated herein
without first obtaining the express written consent of the other party
hereto. It is understood that the foregoing shall not, however, preclude
either party from discussing the substance or any relevant details of the
transaction contemplated in this Agreement with, nor disclosing the terms
of this Agreement or with respect to other information to (i) those
employees, accounts and attorneys of Buyer who need to know the information
for the purpose of evaluating the purchase of the Assets by Buyer, and (ii)
Buyer's potential lenders or equity investors, so long as such persons are
informed of the confidential nature of the information, are directed to
treat the information confidentially and are bound by the terms and
conditions of this Agreement. Notwithstanding the foregoing, Buyer or a
Buyer Representative may disclose information if and to the extent legally
compelled to do so. Buyer or the Buyer Representative, as the case may be,
agrees to give Seller notice as soon as Buyer or the Buyer Representative
is aware of the need to make such disclosure (or immediately after
disclosure if prior notice is not possible) and to use reasonable efforts
to obtain assurances that any information thus disclosed will be treated
confidentially. Buyer or Buyer's Representative shall have no obligation
under this Section with respect to any information to the extent that such
information has been made public other than by the acts of Buyer or Buyer
Representative in violation of this Agreement or any information that is
given to Buyer by an unrelated third party not engaged by Buyer in any
capacity and who is not bound by a confidentiality obligation with respect
to such information. Buyer's arrangement with any Buyer Representative
shall include an agreement on the part of the Buyer's Representative to be
bound by the provisions of this Section. In the event the sale of the
Hotel contemplated herein is not consummated, each party shall promptly
return to the other party all information, documents, and other items
received from such other party in connection herewith or promptly destroy
the same. Any liability arising under this provision shall terminate
effective upon the Closing; however this provision and all liability
arising hereunder shall survive any termination of this Agreement.
21. ATTORNEYS' FEES. If either party hereto fails to perform any
of its obligations under this Agreement or if any dispute arises between
the parties hereto concerning the meaning or interpretation of any
provision of this Agreement, then the defaulting party or the party not
prevailing in such dispute, as the case may be, shall pay any and all costs
and expenses incurred by the other party on account of such default and/or
in enforcing or establishing its rights hereunder, including, without
limitation, court costs and reasonable attorneys' fees and disbursements.
Any such attorneys' fees and other expenses incurred by either party in
enforcing a judgment in its favor under this Agreement shall be recoverable
separately from and in addition to any other amount included in such
judgment, and such attorneys' fees obligation is intended to be severable
from the other provisions of this Agreement and to survive and not be
merged into any such judgment.
22. WAIVER. No delay in exercising any right or remedy shall
constitute a waiver thereof, and no waiver by Seller or Buyer of the breach
of any covenant of this Agreement shall be construed as a waiver of any
preceding or succeeding breach of the same or any other covenant or
condition of this Agreement.
23. TIME PERIODS. In the event the time for performance of any
obligation hereunder expires on a Saturday, Sunday or legal holiday, the
time for performance shall be extended to the next day which is not a
Saturday, Sunday or legal holiday.
24. SURVIVAL. Buyer's consummation of the Closing shall
constitute an acceptance of all of the obligations of Seller hereunder
except such as may be expressly required to survive the Closing under this
Agreement or which by their terms as described in this Agreement are to be
performed after the Closing. No provision, covenant or representation of
Seller contained in this Agreement shall survive the Closing or termination
or cancellation of this Agreement, except as may be otherwise expressly
provided herein.
25. MODIFICATION OF AGREEMENT. No modification of this Agreement
shall be deemed effective unless in writing and signed by the parties
hereto.
26. FURTHER INSTRUMENTS. Each party, promptly upon the request of
the other, shall execute and have acknowledged and delivered to the other
or to Escrow Agent, as may be appropriate, any and all further instruments
reasonably requested or appropriate to evidence or give effect to the
provisions of this Agreement and which are consistent with the provisions
of this Agreement.
27. ENTIRE AGREEMENT. This Agreement constitutes the entire
contract between the parties with regards to the purchase and sale of the
Assets. All terms and conditions contained in any other writings
previously executed by the parties and all other discussions,
understandings or agreements regarding the Assets and the subject matter of
this Agreement shall be deemed to be superseded hereby.
28. APPLICABLE LAW. This Agreement, and all questions and disputes
arising in connection within, shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, without
regard to principles of conflict of laws.
29. DESCRIPTIVE HEADINGS. The descriptive headings of the
paragraphs of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any provisions of this
Agreement.
30. TIME OF THE ESSENCE. Time is of the essence of this Agreement.
31. ASSIGNMENT. Buyer may not assign its rights hereunder without
the prior written consent of Seller. No assignment shall be valid and
effective in any event until the delivery to Seller of written notice of
such assignment together with an executed copy of the documents pursuant to
which such assignee assumes all of Buyer's covenants under this Agreement
and agrees to be bound by all of the terms, conditions and provisions of
this Agreement and thereof. If Buyer assigns its rights under this
Agreement, then effective only at and concurrently with the Closing, Buyer
shall be released from all continuing obligations and liabilities
hereunder. Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the permitted successors and assigns, if any,
of the respective parties hereto.
32. CONSTRUCTION. The parties agree that each party and its
counsel have reviewed and revised this Agreement and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not apply in the interpretation of this Agreement or
any amendments or exhibits hereto.
33. INTERPRETATION. In this Agreement, the neuter gender includes
the feminine and masculine, and the singular number includes the plural,
and the words "PERSON" and "PARTY" include corporations, partnerships,
individuals, firms, trusts, limited liability companies or associations
wherever the context so requires.
34. EXHIBITS AND SCHEDULES. All exhibits and schedules attached
hereto and referred to in this Agreement are incorporated herein by this
reference and are part of this Agreement.
35. COUNTERPARTS. This Agreement may be executed simultaneously or
in counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same Agreement.
tte RECORDATION. This Agreement shall not be recorded.
37. IRS REAL ESTATE SALES REPORTING. Buyer and Seller hereby
appoint Escrow Agent as, and Escrow Agent agrees to act as, "the person
responsible for closing" the transaction which is the subject of this
Agreement pursuant to Internal Revenue Code Section 6045(e). Escrow Agent
shall prepare and file all informational returns, including without
limitation, IRS Form 1099-S and shall otherwise comply with the provisions
of Internal Revenue Code Section 6045(e). Escrow Agent shall indemnify,
protect, hold harmless and defend Seller, Buyer and their respective
attorneys for, from and against any and all claims, actions, costs, loss,
liability or expense arising out of or in connection with the failure of
Escrow Agent to comply with the provisions of this SECTION 37.
38. AUDIT. After the Closing, Seller will make available to
Purchaser the financial information in the possession of Seller or Seller's
accountants for the three most recent fiscal years of the Hotel necessary
for the purpose of an audit to be performed by KPMG Peat Marwick LLP
("KPMG") in accordance with Rule 3.05 of Regulation S-X of the Securities
and Exchange Commissions Rules and Regulations. Such financial information
will be made available to Purchaser and KPMG in a location mutually
agreeable to Purchaser and Seller and may include, but not be limited to,
general ledgers, city ledgers, guest ledgers, audited financial statements
and management letters, policies and procedures manuals, room contracts,
labor contracts, loan agreements, compensation arrangements, any other
agreements, invoices for all expenditures made, sale and marketing plans,
fixed assets registers, budgets and variance explanations, personnel files,
payroll registers, bank statements, bank account reconciliations, check
registers (including the period following the most recent fiscal year) and
descriptions of benefit plans, related party transactions, insurance
coverage, litigation, vacation accruals and taxes paid, in each case to the
extent in the possession of Seller or Seller's accountants. Seller agrees
to permit Buyer to obtain such confirmation regarding the foregoing
financial information from Seller's certified public accountants as Buyer
may request and Seller's certified public accountants are willing to give,
all at Buyer's sole cost and expense. The provisions of this SECTION 38
shall survive closing.
IN WITNESS WHEREOF, Buyer and Seller have executed this Agreement
under seal as of the date and year set forth above.
SELLER:
BIRD ISLAND LIMITED PARTNERSHIP, a
Massachusetts limited partnership
By: Eastrich No. 117 Corporation, a
Massachusetts corporation, its General Partner
By: /s/ Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
Its: President
BUYER:
LASALLE HOTEL OPERATING
PARTNERSHIP, L.P.
By: LaSalle Hotel Properties, a
Maryland real estate investment trust, its general partner
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Its: Vice President
