SHERATON DELFINA HOTEL PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS Between REGIS PROPERTIES, L.L.C., a Delaware limited partnership as SELLER and BLUE DEVILS OWNER LLC, a Delaware limited liability company as BUYER As of October 13, 2010
Exhibit 10.26
SHERATON XXXXXXX HOTEL
PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
Between
REGIS PROPERTIES, L.L.C.,
a Delaware limited partnership
as SELLER
and
BLUE DEVILS OWNER LLC,
a Delaware limited liability company
as BUYER
As of October 13, 2010
PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this “Agreement”) is
made as of October 13, 2010 (the “Effective Date”), by and between REGIS PROPERTIES,
L.L.C., a Delaware limited partnership (“Seller”), and BLUE DEVILS OWNER LLC, a Delaware
limited liability company (“Buyer”).
W I T N E S S E T H:
A. Seller is the owner of the Property (defined below). The Property is located in the County
of Los Angeles, State of California.
B. Seller desires to sell the Property and Buyer desires to purchase the Property, on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by the parties, Buyer and Seller agree as follows:
ARTICLE I
PURCHASE AND SALE
| 1.1 | Agreement of Purchase and Sale. Subject to the terms and conditions hereinafter set forth, Seller agrees to sell and convey and Buyer agrees to purchase, all of the (and as to the Collective Bargaining Agreement (as defined below), Manager’s (as defined below)) right, title and interest in and to the following: |
(a) the fee simple interest in the land situated in Los Angeles, California more
particularly described on Schedule 1.1(a) attached hereto and made a part hereof,
together with all and singular the rights and appurtenances of Seller pertaining to such
property, including any right, title and interest of Seller in and to adjacent streets,
alleys or rights-of-way (the property described in clause (a) of this Section 1.1
being herein referred to collectively as the “Land”);
(b) the buildings, structures, garages, fixtures and other improvements on the Land,
including specifically, without limitation, that certain hotel commonly known as “Sheraton
Xxxxxxx” (the “Hotel”) and the restaurants, food and beverage, meeting and fitness
facilities located therein or thereon (the property described in this clause (b) of this
Section 1.1 being herein referred to collectively as the “Improvements”);
(c) all tangible personal property owned by Seller and located upon the Land or within the
Improvements and used solely in connection with the operation of the Land and Improvements,
including specifically, without limitation, appliances, furniture, furnishings, artwork,
equipment, carpeting, draperies and curtains, tools and supplies, decorations, china,
glassware, linens, silver, utensils, all vehicles (if any), and other items of personal
property (excluding cash and deposit accounts) in all cases subject to depletion, resupply,
substitution, replacement and disposition in the ordinary course of business, such property
being herein referred to collectively as the “Personal Property”);
(d) subject to Section 4.4 below, all contracts or reservations for the use of guest
rooms, ballroom, banquet and restaurant facilities, conference facilities, meeting rooms or
other facilities of the Hotel or located within the Improvements (“Bookings”);
(e) all assignable contracts and agreements (collectively, the “Operating
Agreements”) relating to the upkeep, repair, maintenance or operation of the Land, the
Improvements or the Personal Property or other property used in connection with the
operation of the Hotel not rejected by Buyer in accordance with the terms hereof, including
without limitation (i) the agreements listed on Schedule 1.1(e)(i) attached hereto,
(ii) all equipment leases listed on Schedule 1.1(e)(ii), and (iii) the Collective
Bargaining Agreement between Manager (and an affiliate thereof), and UNITE — HERE, Local 11
(“Local 11”) (the “Collective Bargaining Agreement”), but excluding (A) the
Management Agreement (defined below) and (B) the License Agreements (as defined below);
(f) (i) all assignable existing warranties and guaranties (expressed or implied) issued to
Seller in connection with the Improvements or the Personal Property; (ii) all transferable
names, marks, logos, websites, domain names and designs, used in the operation or ownership
of the Land, the Improvements or the Personal Property or any part thereof, if any; and
(iii) all transferable licenses, franchises and permits owned by Seller and used in or
relating to the ownership, occupancy or operation of the Land, the Improvements or the
Personal Property or any part thereof (the property described in this clause (f) of this
Section 1.1 being herein referred to collectively as the “Intangibles”);
(g) (i) all food and beverages (except the Alcoholic Beverage Inventory, which shall be
conveyed in accordance with Section 4.9, below); (ii) inventory held for sale to
Hotel guests and others in the ordinary course of business including all opened and unopened
retail inventory in any Hotel gift shop or any other area at the Hotel conducting retail
sales (collectively, “Retail Inventory”); (iii) engineering, maintenance and
housekeeping supplies, including soap and cleaning materials, fuel and materials; stationery
and printing items and supplies; and (iv) other supplies of all kinds, whether used, unused
or held in reserve storage for future use in connection with the maintenance and operation
of the Land, the Improvements or the Personal Property, in each case to the extent located
at the Hotel, together with any additions thereto prior to Closing (defined below) and
subject to depletion, resupply, substitution, replacement and disposition in the ordinary
course of business (all of the foregoing being referred to herein as the “Consumable
Inventory” and, to the extent contained in unopened boxes, bottles, jars or containers
of any type as of the Closing Date, shall collectively be referred to, together with
unopened packages of china, glass, silver and linens, as the “Unopened Inventory”);
(h) all leases for the lease and occupancy of space at the Hotel (collectively, the
“Leases”) listed and described on Schedule 1.1(h) attached hereto and made a
part hereof, including any deposits called for under such Leases and not applied to the
tenants’ obligations as of the Closing Date. For purposes of this Agreement, “Leases” do
not include Bookings; and
(i) subject to Section 4.4.9 hereof, Seller’s interest in the funds contained in
“house banks” for the Hotel as of the Cut-Off Time (defined in Section 4.4.10
below), whether held in the name of Seller, the Hotel or Manager and owned by Seller
(collectively, the “House Bank Funds”). Buyer expressly acknowledges and agrees
that the Property to be transferred to
Buyer pursuant to this Agreement does not include any reserve or other accounts created or
maintained by Seller or Manager in connection with the ownership or operation of the Hotel.
| 1.2 | Property Defined. |
(a) The Land and the Improvements are sometimes collectively referred to herein as the
“Real Property” and the Real Property, the Personal Property, the Bookings, the
Operating Agreements, the Intangibles, the Consumable Inventory (including the Unopened
Inventory), the Leases and the House Bank Funds are hereinafter sometimes referred to
collectively as the “Property”; provided that, the Purchase Price does not include,
and shall be adjusted with respect to, the House Bank Funds and the other adjustment items
described in Section 4.4 below.
(b) Notwithstanding anything to the contrary in Section 1.1 or Section
1.2(a) above, the following items are expressly excluded from the Property:
(i) All cash on hand or on deposit in any operating account or other account or
reserve, except for security deposits held by Seller as landlord with respect to any
Lease and the House Bank Funds which are to be transferred at Closing subject to the
terms of this Agreement;
(ii) All accounts receivable of the Hotel and all related operations with respect to
periods prior to Closing (collectively, the “Receivables”); and
(iii) Any tangible or intangible property (including, without limitations, fixtures,
personal property or intellectual property) identified on Schedule 1.2
hereto, owned by (A) the supplier, vendor, licensor, lessor or other party under any
Operating Agreements, (B) the tenants under any Leases, (C) Manager, (D) any
employees, (E) any guests or customers of the Hotel, or (F) any other third party.
| 1.3 | Permitted Exceptions. The Real Property shall be conveyed subject to all matters which are, or are deemed to be, Permitted Exceptions pursuant to Article II hereof (collectively, the “Permitted Exceptions”). | |
| 1.4 | Purchase Price. Seller is to sell and Buyer is to purchase the Property for a total of One Hundred Two Million Seven Hundred Fifty Thousand and No/100 Dollars ($102,750,000.00) (the “Purchase Price”). | |
| 1.5 | Payment of Purchase Price. |
(a) On the Closing Date (defined below), Buyer shall deliver to Escrow Agent (defined below)
by wire transfer an amount equal to the Purchase Price, as increased or decreased by
prorations and adjustments as herein provided, less the Xxxxxxx Money (defined below)
previously delivered to Escrow Agent.
(b) The Purchase Price, as increased or decreased by prorations and adjustments as herein
provided, shall be payable in full at Closing in cash by wire transfer of immediately
available federal funds to an escrow account designated by Seller in writing to Buyer and
Escrow Agent prior to the Closing.
| 1.6 | Xxxxxxx Money. |
(a) Within one (1) business day after the full execution and delivery of this Agreement,
Buyer shall deposit with Chicago Title Company (“Escrow Agent”) having its office at
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxxx
Xxxxxxxxx, Facsimile: (000) 000-0000, the sum of Five Million and No/100 Dollars
($5,000,000.00) (together with all interest earned on such sum, the “Xxxxxxx Money”)
in good funds by federal wire transfer.
(b) Upon the delivery (or required delivery) of all or any portion of the Xxxxxxx Money by
Buyer to Escrow Agent, the Xxxxxxx Money (including any portion thereof that is required to
be delivered but has not been delivered by Buyer) shall be fully earned by Seller and
non-refundable to Buyer for any reason whatsoever, except that Buyer shall be entitled to a
return of the Xxxxxxx Money in the event this Agreement is timely terminated as a result of
Buyer’s election to terminate or is otherwise deemed terminated strictly in accordance with
and pursuant to (i) Section 3.5 below, (ii) Section 4.8 below, (iii)
Section 6.2 below, or (iv) Section 7.2 below.
(c) Escrow Agent shall hold the Xxxxxxx Money in an interest-bearing account in accordance
with the terms and conditions of this Agreement. All interest accruing on such sums shall
become a part of the Xxxxxxx Money and shall be distributed as Xxxxxxx Money in accordance
with the terms of this Agreement. Notwithstanding any provision of this Agreement to the
contrary, in no event shall Seller have any responsibility or liability to Buyer in
connection with the accrual or payment of interest on any portion of the Xxxxxxx Money.
(d) Time is of the essence for the delivery of Xxxxxxx Money under this Agreement and the
failure of Buyer to timely deliver any portion of the Xxxxxxx Money shall be a material
default, and shall entitle Seller, at Seller’s sole option, to terminate this Agreement
immediately and to pursue all remedies available to Seller under this Agreement and
applicable law.
| 1.7 | Escrow Instructions. The terms and conditions set forth in this Agreement shall constitute both an agreement between Seller and Buyer and escrow instructions for Escrow Agent. Seller and Buyer shall promptly execute and deliver to Escrow Agent any separate or additional escrow instructions requested by Escrow Agent that are consistent with the terms of this Agreement. Any separate or additional instructions shall not modify or amend this Agreement unless expressly set forth by the mutual consent of Seller and Buyer and to the extent of any conflict between this Agreement and any such separate/additional instructions, the provisions of this Agreement shall control. | |
| 1.8 | Management Agreement and License Agreements. |
(a) Buyer acknowledges that (i) the Hotel is being operated and managed by KHM Xxxxxxx, LLC,
a Delaware limited liability company (or an affiliate thereof) (the “Manager”),
pursuant to that certain Hotel Management Agreement dated as of April 28, 2003, by and
between Seller and Manager (or their predecessors-in-interest) (collectively, as amended,
the
“Management Agreement”), and (ii) Seller shall cause the Management Agreement to be
terminated concurrently with the Closing.
(b) Buyer acknowledges that the Property is subject to that certain Sheraton Hotel License
Agreement (the “Sheraton Agreement”) dated on or about January 31, 2003, by and
between The Sheraton Corporation (“Sheraton”) and Seller (the Sheraton Agreement,
together with any other license agreements related to the Property, the “License
Agreements”). Seller shall terminate the Sheraton Agreement effective as of the Closing
Date and Buyer shall pay at Closing any termination or transfer fees associated with such
termination, if applicable, unless such fees are related to a default by Seller under the
Sheraton Agreement. Buyer shall attempt to enter into a replacement license agreement(s)
with Sheraton (on the same terms as the Sheraton Agreement, for the remainder of the term
thereof or on such other terms as are acceptable to Buyer in its sole discretion (provided
such other terms do not result in a termination fee to be payable by Seller)) which will
become effective as of the Closing (the “New License Agreement”); provided, however
that in the event that Buyer fails to enter into a New License Agreement and is required to
pay a termination fee to Sheraton, Buyer shall receive at Closing a credit against the
Purchase Price in the amount of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00).
(c) Buyer shall, within five (5) days after the Effective Date, subject to applicable
waiting periods and timelines dictated by Sheraton, deliver a written application to
Sheraton requesting that Sheraton approve Buyer as a licensee and requesting preparation and
delivery of a New License Agreement (“Sheraton’s Consent”). Buyer shall use good
faith, diligent, commercially reasonable efforts to reach agreement with Sheraton on the
form of the New License Agreement (provided that Buyer shall accept all terms that are the
same as the terms of the existing Sheraton Agreement, and a term that runs for the remainder
of the term thereof). Buyer shall pay all application fees, consent fees, termination fees
and other costs and expenses related to the License Agreements or the New License Agreement.
(d) Notwithstanding any provision of this Agreement to the contrary, Seller shall not be
liable or responsible for the performance by Sheraton under the Sheraton Agreement, to the
extent such obligations are required to be performed after the Closing.
| 1.9 | Assumed Liabilities. At Closing, solely to the extent either (a) arising on or after the Closing or (b) Buyer receives a credit to the Purchase Price with respect to such Liabilities (as defined below) at Closing, unless otherwise stated in this Agreement, Buyer shall assume all liability, obligation, damage, loss, diminution in value, cost or expense of any kind or nature whatsoever, whether accrued or unaccrued, actual or contingent, known or unknown, foreseen or unforeseen (collectively, “Liabilities”) arising from, relating to, or in connection with the Property or the Hotel, including, without limitation, all Liabilities with respect to the condition of the Property (including, without limitation, the design, construction, engineering, maintenance and repair or environmental condition of the Property, but subject to Seller’s express representations and warranties in Section 5.1). In addition, at Closing Buyer shall assume all obligations to pay for, and no proration shall be made or credit given for, any Consumable Inventory ordered in the ordinary course of business by Seller or Manager but which has not been delivered to the Hotel or paid for as of the Closing Date. The parties’ rights and obligations under this Section 1.9 shall survive the Closing. |
| 1.10 | Balconies/Artwork. At Buyer’s request, Seller has made a request to obtain written confirmation from the City of Santa Xxxxxx that the Property is in compliance with the “artwork” requirement set forth in Section 9H of the Development Agreement (defined below) and the “balcony landscaping” requirement set forth in Exhibit D of the Development Agreement (the “Certificate of Compliance”) and shall continue to use good faith efforts to obtain and deliver the Certificate of Compliance to Buyer on or before Closing. In the event Seller is unable to obtain the Certificate of Compliance prior to Closing, Buyer and Seller shall execute a Balconies/Artwork Holdback Agreement materially in the form attached hereto as Exhibit H which shall, among other things, require Escrow Agent to hold back from Seller’s proceeds due at Closing the sum of Fifty Thousand Dollars ($50,000) to be held in escrow for release in accordance with the terms of the Balconies/Artwork Holdback Agreement. | |
| 1.11 | Parking. Buyer and Seller shall execute a Parking Holdback Agreement materially in the form attached hereto as Exhibit I which shall, among other things, require Escrow Agent to hold back from Seller’s proceeds due at Closing the sum of One Million Five Hundred Thousand Dollars ($1,500,000) to be held in escrow for release in accordance with the terms of the Parking Holdback Agreement. |
ARTICLE II
TITLE AND SURVEY
| 2.1 | Commitment for Title Insurance. Seller has obtained and delivered to Buyer, a preliminary commitment for title insurance dated August 6, 2010 (Order No. 106744376-X49) (the “Title Report”) covering the Land and the Improvements from Chicago Title Company (Title Agent: Xxxx Xxxxxxx) (the “Title Company”), and a copy of each document referenced in the Title Report as an exception to title to the Real Property. Buyer shall deliver to Seller, within five (5) days after receipt by Buyer, a copy of any updates (each a “Title Update”) to the Title Report, together with a written statement by Buyer of all objections to title disclosed by any such Title Update. |
| 2.2 | Survey. Seller has delivered to Buyer an ALTA survey of the Real Property prepared by O.K.O. Engineering Inc., dated March 5, 2008 (Job No. 2008-55) (the “Seller’s Survey”). Buyer shall, at its own cost and expense, obtain any update it deems necessary or desirable for Buyer’s review and inspection of the Land and Improvements. Seller’s Survey, as may be updated pursuant to the foregoing, shall be deemed the “Survey” for the purposes of this Agreement. |
| 2.3 | Title and Survey Examination. Buyer shall have until the day immediately prior to the Effective Date to notify Seller, in writing, of such objections as Buyer may have to anything contained in the Title Report, a Title Update or the Survey. Any item contained in the Title Report, any Title Update or any matter shown on the Survey to which Buyer does not object in writing prior to the Effective Date shall automatically and irrevocably be deemed a Permitted Exception. In the event Buyer shall notify Seller, in writing, of objections to title or to matters shown on the Survey prior to the Effective Date, Seller shall have the right, but not the obligation, to cure such objections. Within five (5) days after receipt of Buyer’s notice of objections, Seller shall notify Buyer in writing whether Seller elects to attempt to |
| cure any or all of such objections. If Seller elects to attempt to cure, Seller shall have the right to attempt to remove, satisfy or cure the same and for this purpose Seller shall, at Seller’s election, be entitled to a reasonable adjournment of the Closing if additional time is required, but in no event shall the adjournment exceed sixty (60) days after the Outside Closing Date. If Seller elects not to cure any objections specified in Buyer’s notice, or if Seller is unable to effect a cure of those objections which it elected to cure prior to the Closing (or any date to which the Closing has been adjourned) and so notifies Buyer in writing, or if Seller fails to respond to Buyer’s notice within said five (5) day period, Buyer shall accept a conveyance of the Property subject to the Permitted Exceptions and any matter objected to by Buyer which Seller is unwilling or unable to cure (each of which shall also be deemed to be Permitted Exceptions), and without reduction of the Purchase Price. Notwithstanding any provision of this Agreement to the contrary (i) in no event shall Seller have any obligation to cure any title matter objected to by Buyer other than liens of a liquidated and ascertainable amount caused by Seller or its agents, including Manager, including any mortgage or other financing secured by the Property or any portion thereof, and (ii) any proposed cure of a title objection to be effected by Seller through an inducement to the Title Company to issue affirmative title coverage by endorsement or otherwise shall first be subject to Buyer’s approval in its sole and absolute discretion. |
| 2.4 | Conveyance of Title. At Closing, Seller shall convey and transfer to Buyer title to the Real Property subject to the Permitted Exceptions. Notwithstanding anything contained herein to the contrary, the Real Property shall be conveyed subject to the following matters, all of which shall be deemed to be Permitted Exceptions: |
(a) the lien of all ad valorem real estate taxes and assessments not yet due and payable as
of the Closing Date, subject to adjustment as herein provided;
(b) local, state and federal laws, ordinances or governmental regulations, including but not
limited to, building and zoning laws, ordinances and regulations, now or hereafter in effect
relating to the Real Property;
(c) items appearing of record or shown on the Survey and, in either case, not objected to by
Buyer or waived or deemed waived by Buyer in accordance with Section 2.3 hereof; and
(d) the rights of the tenants under the Leases.
| 2.5 | Title Policy. As an express condition precedent to Buyer’s obligations to close the transaction contemplated hereby, Title Company shall irrevocably commit to issue at Closing an ALTA owner’s title insurance policy to Buyer in accordance with the Title Report, insuring Buyer’s title to the Real Property as of the time and date of Closing, in the amount of the Purchase Price, subject only to the Permitted Exceptions (“Title Policy”). |
ARTICLE III
INSPECTION PERIOD
| 3.1 | Right of Inspection. Prior to the Effective Date, Seller has delivered to Buyer, those documents, reports, agreements and other information listed on Schedule 3.1 hereof (collectively, “Seller’s Documents”). At all times prior to the Closing Date (hereinafter |
| referred to as the “Inspection Period”), Buyer shall, subject to the rights of the Manager under the Management Agreement, guests of the Hotel and the tenants under the Leases, have the right to make a physical inspection of the Real Property and to examine at such place or places at the Hotel or elsewhere as the same may be located, any operating files maintained by or for the benefit of Seller in connection with the leasing, current maintenance and/or management of the Property (“Property Information”), including, without limitation, the Management Agreement, the Leases, the Operating Agreements, insurance policies, bills, invoices, receipts and other general records relating to the income and expenses of the Hotel, correspondence, surveys, plans and specifications, warranties for services and materials provided to the Hotel, environmental audits, engineering and building inspection reports and similar materials, but excluding materials not directly related to the current maintenance and/or management of the Property which are reasonably deemed to be of a proprietary nature. Buyer shall keep all Property Information and Seller’s Documents strictly confidential, provided that Buyer may deliver copies of the same to its attorneys, accountants and other advisors in connection with the acquisition of the Property and to current and prospective lenders, investors and partners provided that such parties agree to maintain the confidentiality of such Property Information in accordance with the requirements of Section 10.1 below, subject to any reporting requirements to which Buyer is otherwise subject under applicable securities and other laws, rules and regulations. Buyer understands and agrees that any on-site inspections of the Property shall be conducted upon at least twenty-four (24) hours’ prior notice (via telephone or e-mail, anything herein contained to the contrary notwithstanding) to Seller and in the presence of Seller and, at Seller’s option, Manager, or their respective representatives. Such physical inspection shall not materially disturb Hotel guests or tenants under the Leases nor unreasonably interfere with the use of the Property by Seller or Manager, or damage the Property in any respect. Such physical inspection shall not be invasive in any respect (unless Buyer obtains Seller’s prior written consent, which may be withheld in Seller’s sole and absolute discretion), and in any event shall be conducted in accordance with standards customarily employed in the industry and in compliance with all governmental laws, rules and regulations. Following each entry by Buyer with respect to inspections and/or tests on the Real Property, Buyer shall repair any damage caused to the Property on account of any such inspections and/or tests to a condition which is as near to the condition as existed prior to any such inspections and/or tests, at Buyer’s sole cost and expense. Seller shall reasonably cooperate with Buyer in its due diligence but shall not be obligated to incur any liability or expense in connection therewith. Buyer shall not disrupt Seller’s or Manager’s or any tenant’s or guest’s activities on the Real Property and shall not contact any of Manager’s employees, or any other employees working at the Hotel, any guests of the Property, any party to an Operating Agreement, any tenants under the Leases or any governmental employee or authority without (a) providing reasonable advance notice in writing to Seller or Manager (via e-mail or telephone, anything herein contained to the contrary notwithstanding) describing the timing, nature, subject and means of any desired communication, and (b) in each instance obtaining Seller’s or Manager’s prior consent (via e-mail or telephonically), and (c) irrespective of whether Buyer delivers such notice, providing Seller with the option to either attend or participate in any meetings, conversations or communications between Buyer and such party or expressly waiving its right to do so in writing and Buyer shall not communicate in any manner with any such party without satisfying the foregoing, provided that (i) Buyer shall have the right to make such inquiries and have such communications with governmental authorities and entities as shall reasonably be required in connection with |
its environmental, engineering, zoning and land use investigation of the Real Property
without obtaining Seller’s consent so long as Buyer provides Seller not less than
twenty-four (24) hours prior written notice (via e-mail or telephone, anything herein
contained to the contrary notwithstanding) and allows Seller the opportunity to attend or
participate in any such meetings, conversations or communications, and (ii) Buyer shall have
the right to conduct such interviews with the Hotel General Manager, Director of Sales,
Revenue Manager, Controller and Chief Engineer as Buyer shall reasonably require and Seller
and Manager shall cause all of the same to cooperate in connection therewith. Buyer agrees
to indemnify against, defend, protect and hold Seller harmless from and against any claim
for liabilities, losses, costs, expenses (including reasonable attorneys’ fees actually
incurred), damages or injuries arising out of or resulting from or in connection with the
inspection of the Property by Buyer or its agents, employees, representatives, consultants
or contractors (provided that Buyer shall have no such obligation with respect to
pre-existing conditions that are merely discovered as a result of Buyer’s inspections) and
notwithstanding anything to the contrary in this Agreement, such obligation to indemnify,
defend, protect and hold harmless Seller shall survive Closing or any termination of this
Agreement. All inspections shall occur at reasonable times agreed upon by Seller and Buyer.
Buyer agrees (i) that prior to entering the Property to conduct any inspection, Buyer shall
obtain and maintain, and shall cause each of its contractors and agents to maintain (and
shall deliver evidence satisfactory to Seller thereof), at no cost or expense to Seller,
commercial general liability insurance from an insurer reasonably acceptable to Seller in
the amount of Two Million Dollars ($2,000,000) with combined single limit coverage for
personal injury or property damage per occurrence, such policies to name Seller as an
additional insured party, which insurance shall provide coverage against any claim for
personal injury or property damage caused by Buyer or its agents, representatives or
consultants in connection with any such tests and investigations, and (ii) to keep the
Property free from all liens and encumbrances caused by its inspections of the Real
Property. Buyer’s insurance may not be canceled or amended except upon thirty (30) days’
prior written notice to Seller.
| 3.2 | Seller Due Diligence Materials. BUYER ACKNOWLEDGES THAT (1) BUYER HAS RECEIVED COPIES OF THE ENVIRONMENTAL, ENGINEERING, SOILS AND OTHER REPORTS REGARDING THE CONDITION OF THE PROPERTY (COLLECTIVELY, THE “REPORTS”) LISTED ON SCHEDULE 3.2 ATTACHED HERETO, (2) IF SELLER DELIVERS ANY ADDITIONAL REPORTS OR OTHER DOCUMENTS TO BUYER, BUYER WILL ACKNOWLEDGE IN WRITING THAT IT HAS RECEIVED SUCH REPORTS OR OTHER DOCUMENTS PROMPTLY UPON RECEIPT THEREOF, AND (3) ANY REPORTS OR OTHER DOCUMENTS DELIVERED OR TO BE DELIVERED BY SELLER OR ITS AGENTS OR CONSULTANTS TO BUYER ARE BEING MADE AVAILABLE SOLELY AS AN ACCOMMODATION TO BUYER AND WITHOUT ANY REPRESENTATION OR WARRANTY OF SELLER AS TO THEIR ACCURACY OR COMPLETENESS OF FACTS OR OPINIONS SET FORTH THEREIN AND THAT ANY RELIANCE BY BUYER ON SUCH REPORTS OR OTHER DOCUMENTS IN CONNECTION WITH THE PURCHASE OF THE PROPERTY IS UNDERTAKEN AT BUYER’S SOLE RISK. BUYER AGREES THAT SELLER SHALL HAVE NO LIABILITY OR OBLIGATION WHATSOEVER FOR ANY INACCURACY IN OR OMISSION FROM THE OFFERING MATERIALS PREPARED IN CONNECTION WITH THE SALE OF THE PROPERTY OR ANY REPORT OR OTHER DOCUMENTS MADE AVAILABLE TO BUYER OR |
| ITS REPRESENTATIVES. BUYER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO THE EXPIRATION OF THE INSPECTION PERIOD, ITS OWN INVESTIGATION OF THE CONDITION OF THE PROPERTY TO THE EXTENT BUYER DEEMS SUCH AN INVESTIGATION TO BE NECESSARY OR APPROPRIATE. For purposes of this Agreement, the term “Seller Due Diligence Materials” shall mean (i) the Reports, the Property Information and all other documents and materials provided or otherwise made available by Seller to Buyer pursuant to Section 3.1 and the other provisions of this Agreement or otherwise, together with any copies or reproductions of such documents or materials, or any summaries, abstracts, compilations, and (ii) all information set forth in this Agreement and the exhibits and schedules attached hereto and hereby made a part hereof. | ||
| 3.3 | Intentionally omitted. |
| 3.4 | On or prior to the date immediately prior to the Effective Date, Buyer shall have the right to notify Seller in writing of those Operating Agreements that it rejects and therefore requires be terminated by Seller prior to Closing. | |
| 3.5 | Buyer shall have the right, upon written notice to Seller, to be given, if at all, on or before October 26, 2010 (the “Board Approval Deadline”), to terminate this Agreement in the event Buyer has not obtained internal board of trustee approval for the transaction contemplated herein, by giving written notice thereof to Seller on or before the Board Approval Deadline. If Buyer gives such notice of termination on or before the Board Approval Deadline, this Agreement shall terminate, the Xxxxxxx Money shall be returned to Buyer and neither party shall have any further rights, obligations or liabilities hereunder except to the extent that any right, obligation or liability set forth herein expressly survives termination of this Agreement. Time is of the essence with respect to the provisions of this Section 3.5. If Buyer fails to give Seller a notice of termination on or before the Board Approval Deadline, Buyer shall no longer have any right to terminate this Agreement under this Section 3.5 and shall be bound to proceed to Closing and consummate the transaction contemplated hereby pursuant and subject to the terms of this Agreement.. |
ARTICLE IV
CLOSING
| 4.1 | Time and Place. Subject to the provisions of Section 4.6 and 4.7 below, the consummation of the transaction contemplated hereby (“Closing”), as evidenced by the payment and release of the Purchase Price to Seller, shall occur on or before noon (local time at the Real Property) on the date that is ten (10) days after the later of (i) the date Buyer has obtained notice from Sheraton of Sheraton’s Consent or (ii) the date Buyer and Sheraton have reached final agreement on an execution form of New License Agreement, provided that in no event shall such date be later than November 30, 2010 (“Outside Closing Date”) (with the actual date of Closing being referred to herein as the “Closing Date”) such that if Buyer does not send written notice identifying the proposed Closing Date on or prior to that date which is three (3) business days prior to the Outside Closing Date, then, subject to the provisions of Section 4.6 and 4.7 below, the Closing shall occur on the Outside Closing Date. Notwithstanding the foregoing, Buyer shall have the right, upon delivery of written notice to Seller, to be given, if at all, on or before November 23, 2010, to extend the Outside |
| Closing Date to December 30, 2010 in the event that Buyer has not obtained Sheraton’s Consent and Buyer and Sheraton have not reached final agreement on an execution form of New License Agreement prior to the date of such notice. The Closing shall occur through an escrow administered by Escrow Agent with the Purchase Price and all documents (unless otherwise mutually agreed) shall be deposited with the Escrow Agent as escrowee. At Closing, Seller and Buyer shall perform the obligations set forth in, respectively, Section 4.2 and Section 4.3, the performance of which obligations shall be concurrent conditions. |
| 4.2 | Seller’s Closing Obligations and Deliveries. At Closing, Seller shall through Escrow Agent make the following deliveries and take the following actions (with each item to be delivered to Escrow Agent not later than one (1) business day prior to the scheduled Closing Date): |
(a) Deliver to Buyer a duly executed grant deed (the “Deed”) in the form attached
hereto as Exhibit A and made a part hereof, conveying the Land and the Improvements,
subject only to the Permitted Exceptions, together with any required real estate transfer
tax declarations or any similar documentation required to evidence the payment of any tax
imposed by the State of California, County of Los Angeles and/or City of Santa Xxxxxx on the
transaction contemplated hereby;
(b) Execute and deliver to Buyer two (2) original counterparts of a xxxx of sale in the form
attached hereto as Exhibit B and made a part hereof, conveying the Personal Property
and Consumable Inventory without warranty of title (except as provided herein) or use and
without warranty, expressed or implied, as to merchantability and fitness for any purpose;
(c) Execute and deliver to Buyer two (2) original counterparts of an assignment of Seller’s
interest in the Operating Agreements (and cause Manager to assign its interest in the
Collective Bargaining Agreement), the Bookings and the other Intangibles (in each case to
the extent assignable) (“Assignment of Contracts”) in the form attached hereto as
Exhibit C and made a part hereof;
(d) Execute and deliver to Buyer two (2) original counterparts of an assignment of Seller’s
interest in the Leases in the form attached hereto as Exhibit D and made a part
hereof;
(e) Deliver to Buyer a certificate, dated as of the Closing Date and executed on behalf of
Seller by a duly authorized officer thereof, stating that the representations and warranties
of Seller contained in this Agreement are true and correct in all material respects as of
the Closing Date (with appropriate modifications of those representations and warranties
made in Section 5.1 hereof to reflect any changes therein including without
limitation any changes resulting from actions under Section 5.4 hereof) or
identifying any representation or warranty which is not, or no longer is, true and correct
and explaining the state of facts giving rise to the change. In no event shall Seller be
liable to Buyer for, or be deemed to be in default hereunder by reason of, any breach of
representation or warranty which results from any change that (i) occurs between the
Effective Date and the Closing Date and (ii) is permitted under the terms of this Agreement
or is beyond the reasonable control of Seller to prevent; provided, however, that the
occurrence of a change which is not permitted hereunder or is beyond the reasonable control
of Seller to prevent shall, if materially adverse to Buyer, constitute the non-fulfillment
of the condition set forth in Section 4.6(b). If, despite changes or other matters
described in such certificate, the Closing occurs, Seller’s
representations and warranties set forth in this Agreement shall be deemed to have been
modified by all statements made in such certificate;
(f) Deliver to Buyer and the Title Company such evidence as the Title Company may reasonably
require as to the authority of the person or persons executing documents on behalf of
Seller;
(g) Deliver to Buyer an affidavit duly executed by Seller stating (i) that Seller is not a
“foreign person” as defined in the Federal Foreign Investment in Real Property Tax Act of
1980 and the 1984 Tax Reform Act, and (ii) addressing any similar California law disclosure
requirements, in the form attached hereto as Exhibit E and made a part hereof;
(h) If not already delivered to Buyer, deliver to Buyer, the Leases, the licenses and
permits, if any, in the possession of Seller or Seller’s agents, together with such leasing
and property files and records that are material in connection with the continued operation,
leasing and maintenance of the Property; provided that any such items shall be deemed to
have been delivered by Seller to Buyer if Seller leaves such items at the Property and/or if
Manager has possession of such items. Buyer shall cooperate with Seller for a period of
seven (7) years after Closing in case of Seller’s need in response to any legal requirement,
a tax audit, tax return preparation or litigation threatened or brought against Seller, by
allowing Seller and its agents or representatives access, upon reasonable advance notice
(which notice shall identify the nature of the information sought by Seller), at all
reasonable times to examine and make copies of any relevant instruments, files and records,
which right shall survive the Closing;
(i) Deliver to the Escrow Agent an executed closing statement consistent with this Agreement
and in a customary form;
(j) Deliver evidence of the termination of the License Agreements;
(k) Deliver the certificates/registrations of title for any vehicles owned by Seller and
used in connection with the Property;
(l) Deliver notices addressed to all interested parties, including tenants under the Leases,
that the Property has been conveyed to Buyer and directing all payments and inquiries to
Buyer at its address;
(m) Execute and deliver two (2) original counterparts of the Balconies/Artwork Holdback
Agreement;
(n) Execute and deliver two (2) original counterparts of the Parking Holdback Agreement; and
(o) Deliver such additional documents as shall be reasonably required to consummate the
transaction expressly contemplated by this Agreement, provided that none of the same shall
increase the burdens upon or decrease the benefits to Seller hereunder.
| 4.3 | Buyer’s Closing Obligations and Deliveries. At Closing, Buyer shall through Escrow Agent make the following deliveries and take the following actions on the Closing Date: |
(a) Pay to the Escrow Agent the full amount of the Purchase Price, as increased or decreased
by prorations and adjustments as herein provided, in immediately available wire transferred
funds pursuant to Section 1.5 above, it being agreed that at Closing the Xxxxxxx
Money shall be applied towards payment of the Purchase Price;
(b) Join Seller in execution of (or deliver original executed counterparts of) the
instruments described in clauses (c), (d), (i), (m) and (n) of Section 4.2 above;
(c) Deliver a letter duly executed by Buyer, in the form attached hereto as Exhibit
F, confirming that Buyer is not acquiring the Property with the assets of an employee
benefit plan as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974 (“ERISA”), and, in the event Buyer is unable or unwilling to make such a
representation, Buyer shall be deemed to be in default hereunder, and Seller shall have the
right to terminate this Agreement and to receive and retain the Xxxxxxx Money;
(d) Deliver a certificate, dated as of the Closing Date and executed on behalf of Buyer by a
duly authorized officer thereof, stating that the representations and warranties of Buyer
contained in this Agreement are true and correct in all material respects as of the Closing
Date;
(e) Deliver to Title Company such evidence as Title Company may reasonably require as to the
authority of the person or persons executing documents on behalf of Buyer;
(f) Buyer hereby covenants and agrees to (i) obtain a sales tax license or permit for the
Hotel from each of the applicable jurisdictions and provide an exemption or resale
certificate (each, a “Resale Certificate”) to Seller not less than two (2) business
days prior to Closing (it being the express intention of the parties hereto that no Sales
Tax shall be due and payable by Seller (or any Affiliate of Seller) in connection with
Buyer’s inability or failure to obtain such Resale Certificates;
(g) Execute or cause its post-Closing Hotel manager to execute an assumption of the
Collective Bargaining Agreement unless Buyer has executed a new management agreement with
Manager prior to Closing;
(h) Execute the New License Agreement, if applicable; and
(i) Deliver such additional documents as shall be reasonably required to consummate the
transaction contemplated by this Agreement, provided that none of the same shall increase
the burdens upon or decrease the benefits to Buyer hereunder.
| 4.4 | Prorations, Credits and Other Adjustments. At Closing, Buyer and Seller shall prorate all items of income and expense which are customarily prorated between a buyer and seller for hotel properties comparable to the Hotel including, without limitation, the prorations and other adjustments provided below and in Section 1.8(b), Section 1.10 and Section 1.11, and the net amount consequently owing to Seller or Buyer shall be added to or subtracted from the proceeds of the Purchase Price payable to Seller at Closing. Beginning as close to the |
| anticipated Closing Date as practicable, Seller shall, in consultation with Buyer and with Buyer’s reasonable cooperation, cause to be prepared a prorations and credit statement (the “Preliminary Statement”) which shall reflect all of the prorations, credits and other adjustments to the Purchase Price at Closing required under this Section 4.4, Section 1.8(b), Section 1.10 and Section 1.11, or under any other provision of this Agreement. As soon as Buyer and Seller have agreed upon the Preliminary Statement, they shall jointly deliver a mutually signed copy thereof to Escrow Agent. |
4.4.1 Proration of Taxes. All real estate ad valorem taxes,
general assessments and special assessments and all personal property ad
valorem taxes assessed against the Hotel (generically, “Taxes”) and payable
during the tax year in which Closing occurs and which are then due and payable shall be paid
by Seller at or before Closing, and all of the same payable during the tax year in which
Closing occurs shall be prorated between Buyer and Seller as of the Closing Date in
accordance with local custom for the proration of taxes in commercial real estate
transactions in Santa Monica, California. Taxes which become due and payable and applicable
to any following tax year, shall be the responsibility of Buyer. Seller retains the right
to commence, continue and settle any proceeding to contest any taxes for any taxable period
which encompasses any period prior to the date of the Closing, and shall be entitled to any
refunds or abatements of Taxes awarded in such proceedings, provided that, to the extent the
same are prorated hereunder, Buyer shall be entitled to its prorated share thereof.
4.4.2 General Proration of Expenses.
(a) The following items of expense with respect to any portion or aspect of the Hotel
shall be prorated between Seller and Buyer as of the Closing Date:
(i) All charges and expenses under any Operating Agreements.
(ii) All utility charges (but excluding any utility deposits). To the extent
reasonably practicable, though, in lieu of prorating the charges for any
metered utility service, Buyer and Seller shall endeavor to have the utility
read the meter as early as possible on the Closing Date, render a final xxxx
to Seller based on such reading and xxxx all subsequent service to Buyer.
(iii) Prepaid expenses of the Hotel, but including without limitation, (1)
the expense of all licenses and permits obtained in connection with the
operation of the Hotel, and (2) the expense of all insurance obtained by
Seller or Manager for the Hotel and transferred to and assumed by Buyer.
(iv) Fees, compensation and all other amounts payable under the License
Agreements prior to the termination thereof shall be the responsibility of
Seller (other than termination fees under the Sheraton Agreement, if any),
and the fees, compensation and all other amounts payable under the New
License Agreement (if applicable) together with termination fees under the
Sheraton Agreement, if any, shall be the responsibility of Buyer.
(v) All other Hotel operating expenses, other than employment expenses (which
are covered by Section 4.4.3 below).
4.4.3 Employment Expenses.
(a) Seller shall be responsible for all wages and other amounts owed to employees of
Manager and/or Seller at the Property relating to the period prior to the Cut-Off
Time, and Buyer shall be responsible for all wages and other amounts due to employees
at the Property relating to the period after the Cut-Off Time. The obligation to pay
or reimburse the Manager for the wages, salaries and other benefits of employment of
employees of Manager and/or Seller, together with applicable employment and
withholding taxes of such employees, shall be allocated between Buyer and Seller as
set forth in this Section 4.4.3.
(i) With respect to hourly employees, (a) wages of hourly employees shall be
allocated according to hours worked during the current pay period before and
after the Cut-Off Time; (b) employment and withholding taxes for the current
pay period for such employees shall be allocated in the same manner as wages;
(c) accrued vacation and required contributions to health, pension and other
benefit plans for such employees shall be allocated on the basis used by
Manager under the Management Agreement for allocating such costs to
particular accounting periods, with such costs attributable to the accounting
period in which the Closing Date occurs to be allocated on a per diem basis
according to the number of days in the current period occurring before and
after the Cut-Off Time.
(ii) With respect to salaried employees, salaries, employment and withholding
taxes, accrued vacation and other employment benefits for salaried employees
shall be allocated on the basis used by the Manager under the Management
Agreement for allocating such costs to particular accounting periods, with
such costs during the accounting period in which the Closing Date occurs to
be allocated on a per diem basis according to the number of days in the
current period occurring before and after the Cut-Off Time.
(iii) Pension expenses for eligible employees shall be prorated at Closing
based on actual payroll amounts as reflected in Manager’s books as of the
Closing Date.
(b) Notwithstanding any provision of this Agreement to the contrary, Seller shall pay
out as of Closing all (i) severance or separation payments, (ii) sick pay, and (iii)
“hospitalization pay”, if any, existing as of the Closing Date.
(c) Seller shall be responsible for all pension plan payments payable to the
Retirement Plan (as defined in Section 5.8(d) below), which is Local 11’s
multi-employer plan under the Collective Bargaining Agreement to the extent relating
to the period prior to the Cut-Off Time. Buyer shall be responsible for all pension
plan payments payable to the Retirement Plan under the Collective Bargaining
Agreement to the extent relating to the period on or after the Cut-Off Time.
(d) To the extent required by applicable law, accrued wages, vacation pay, health and
welfare benefit plan payments and other amounts accrued as of the Closing Date
and due to employees of the Hotel shall be paid at Closing by Seller and shall not be
prorated unless Seller obtains consent from employees to allow accrued vacation
and/or other benefits to be carried over to their employment with Buyer.
4.4.4 Hotel Revenues.
(a) At Closing, Seller and Buyer shall share equally all revenues from the Hotel
guest rooms and facilities occupied on the evening immediately preceding the Closing
Date, including any sales taxes, room taxes, occupancy taxes and other taxes charged
to guests in such rooms, all parking charges, sales from mini-bars, in-room food and
beverage, telephone, facsimile and data communications, in-room movie, laundry, and
other service charges allocable to such rooms with respect to the evening immediately
preceding the Closing Date. All revenues from restaurants, lounges, vending machines
and other service operations conducted at the Property shall be allocated based on
whether the same accrued before or after the Cut-Off Time as described in the
preceding sentence, and Seller shall cause the Manager to separately record sales
occurring before and after the Cut-Off Time at the Property. The foregoing amounts
are referred to collectively as “Guest Revenues”. Notwithstanding the
foregoing, all revenues from any bars and lounges at the Property shall be prorated
based on the actual closing time for such bar or lounge. For example, if such bar or
lounge closes at 2:00 a.m. on the Closing Date, Seller shall retain the revenues from
such services and operations even though such revenues were generated two (2) hours
after the Cut-Off Time.
(b) Revenues from conferences, receptions, meetings, and other functions occurring in
any conference, banquet or meeting rooms in the Hotel, or in any adjacent facilities
owned or operated by Seller, including usage charges and related taxes, food and
beverage sales, valet parking charges, equipment rentals, and telecommunications
charges, shall be allocated between Seller and Buyer, based on when the function
therein commenced, with (i) one-day functions commencing prior to the Cut-Off Time
being allocable to Seller, (ii) functions commencing after the Cut-Off Time being
allocable to Buyer, and (ii) multi-day functions being allocated between Seller and
Buyer according to when the event commences and is scheduled to end. The foregoing
amounts are referred to collectively as “Conference Revenues.”
(c) At Closing, the right to collect all Receivables not actually collected by Seller
or Manager prior to the Cut-Off Time shall be retained by Seller. Buyer shall, at no
more than di minimis third party out-of-pocket costs to Buyer, reasonably cooperate
with Seller and Manager in connection with Seller’s collection efforts after Closing
and, to the extent any Receivables are paid to Buyer or Buyer’s agents after Closing,
Buyer shall cause all such Receivables to be promptly remitted to Seller.
(d) Any operating revenues not otherwise provided for in this Section 4.4,
shall be prorated between Buyer and Seller as of Closing.
4.4.5 Rent. Rent and other payments payable by tenants, licensees,
concessionaires, and other persons using or occupying the Real Property or any part thereof
under a Lease or otherwise, if any, for or in connection with such use or occupancy,
including, without limitation, fixed monthly rentals, additional rentals, percentage
rentals, escalation rentals, retroactive rentals, operating cost pass-throughs, common area
maintenance charges, HVAC charges, payments of taxes and insurance expenses,
promotional/marketing charges, construction receivables and other sums and charges payable
by the tenants under the Leases (collectively, “Rent”) shall be prorated as of the
Closing such that Seller will be entitled to Rent attributable to periods prior to the
Closing and Buyer will be entitled to Rent attributable to periods from and after the
Closing, all as more particularly set forth below:
(a) All Rent, other than Percentage Rent (as defined below), collected by
Seller, prior to Closing, under the Leases for the month in which the Closing
occurs (“Current Rent”) shall be prorated as of the Closing Date.
(b) All Rent other than Current Rent (“Rent Arrears”) shall not be
prorated at Closing. In the event that either Buyer or Seller receives Rent
from a tenant after the Closing Date, such Rent shall be applied in the
following order of priority (after deduction of actual out-of-pocket costs of
collection paid by Buyer to third parties): (a) first to current rent due to
Buyer, (b) second to delinquent rent due to Buyer, and (c) thereafter to Rent
Arrears due to Seller from such tenant. Any sums owed to Seller pursuant to
the foregoing shall be paid by Buyer within ten (10) days following receipt
by Buyer. Buyer shall pursue all Rent Arrears in a commercially reasonable
manner and shall have the right to negotiate settlements with tenants who
have Rent Arrears as it may determine in good faith; provided that, (x)
Seller shall have the unrestricted right to pursue collection from any tenant
not in possession of its space as of the Closing Date in Seller’s sole
discretion including, without limitation, initiating and prosecuting a
lawsuit against the applicable tenant (other than a lawsuit seeking
eviction), and (y) in the event that after Closing Buyer evicts or otherwise
terminates the possession of any tenant with Rent Arrears, if Buyer has
neither released the tenant nor pursued eviction to judgment, Seller shall
have the unrestricted right to pursue collection from such tenant in Seller’s
sole discretion including, without limitation, initiating and prosecuting a
lawsuit against the applicable tenant.
(c) Percentage rent or overage rent (referred to herein as “Percentage
Rent”) under the Leases shall be prorated between Buyer and Seller on a
Lease-by-Lease basis with Seller entitled to the portion of total Percentage
Rent paid under each Lease for the portion of the current Lease Year (as
defined below) in which the Closing occurs (the “Subject Lease Year”)
occurring prior to the Closing Date and Buyer being entitled to the balance
of Percentage Rent for the remainder of the Subject Lease Year, based on the
monthly accruals of Percentage Rents under the Leases for the period through
the month in which the Closing Date occurs, with an adjustment to be made
post-closing to account for any Percentage Rent attributable to the month in
which the Closing Date occurs. As used herein, the term “Lease Year”
means the twelve (12) month period (or, as to tenants for which the Closing
occurs during a partial Lease Year, such applicable shorter period) as to
which annual Percentage Rent is owed under each Lease.
4.4.6 Hotel Payables. At Closing, Buyer shall receive a proration credit equal
to the excess of (a) the aggregate estimated amount of all outstanding accounts payable for
the Hotel as of the Closing Date (“Hotel Payables”) in the Preliminary Statement
over (b) Buyer’s prorated share of such Hotel Payables under Section 4.4.2, and
Buyer shall assume the obligation to satisfy all Hotel Payables. After Closing, before
paying any amount invoiced or otherwise claimed by a third party due with respect to the
Hotel operations prior to Closing which is not included on such schedule (or is claimed in
an amount larger than that shown on such schedule), Buyer shall first submit such invoice or
claim to Seller. Unless Seller, within fifteen (15) days after receiving such submission,
objects to such invoice or claim (thereby making it a “Seller Disputed Payable”),
Buyer may pay the same and take a credit for such payment on the Final Statement.
Notwithstanding the foregoing, upon Closing, Buyer shall assume all obligations of Seller to
pay for any (i) consumables or other items ordered by or for the benefit of Seller in the
ordinary course of business but which are not yet received as of the Closing Date, and (ii)
items or services listed on a purchase order log prepared by Manager, which list shall be
updated by Manager immediately prior to Closing; provided that, there shall not be any
adjustment to the Purchase Price in connection with Buyer’s assumption of the liabilities
described in clauses (i) and (ii) of this sentence.
4.4.7 Credit for Certain Inventories. As of the date immediately prior to the
Closing Date, Seller and Buyer shall jointly conduct or cause the Manager to conduct an
inventory of all (a) Unopened Inventory, and (b) all Retail Inventory in any Hotel gift shop
or any other area at the Hotel conducting retail sales, and shall deliver a written report
thereon to Seller and Buyer. Such report shall reflect the value of the Unopened Inventory
and the Retail Inventory at the acquisition cost thereof. Inasmuch as the Unopened
Inventory and the Retail Inventory shall be deemed included in the Purchase Price, neither
party shall receive a credit with respect to the Unopened Inventory and the Retail
Inventory.
4.4.8 Credit for Reservation Deposits. Buyer shall receive a proration credit
equal to the aggregate amount of advance deposits that shall have been received by Seller
prior to the Cut-Off Time on account of reservations for use or occupancy of the Property
after the Cut-Off Time.
4.4.9 Credit for Cash Banks. Seller shall receive a credit at Closing in an
amount equal to all House Bank Funds.
4.4.10 Regarding Hotel Prorations Generally. Unless this Section 4.4
expressly provides otherwise: (A) all prorations hereunder with respect to the Hotel
shall be made as of 12:00:01 a.m., Los Angeles time (for the Hotel) (“Cut-Off Time”)
on the Closing Date, (B) all prorations shall be made on an actual daily basis, and (C) for
purposes of such prorations, all items of revenue and expense with respect to the Hotel’s
operations shall be classified and determined in accordance with the Uniform System of
Accounts, as reasonably modified by Manager for use at the Hotel and otherwise in accordance
with generally accepted accounting principles; provided, however, with respect to food and
beverage services at bars, restaurants or lounges, the Cut-Off Time means 2:00 a.m. local
time on the Closing Date. Except as otherwise expressly provided herein, in any case
in which Buyer receives a credit at Closing on account of any obligation of Seller
hereunder, Seller shall have no further liability for such obligation to the extent of the
credit so given, and Buyer shall pay and discharge the same.
4.4.11 Vouchers. Buyer shall (a) honor all outstanding unexpired gift
certificates, coupons or other writings issued by Seller as set forth in Schedule
4.4.11 attached hereto that entitles the holder or bearer thereof to a credit (whether
in a specified dollar amount as for a specified item, such as room night or meals) to be
applied against the usual charge for rooms, meals and/or goods and services at the Hotel
(collectively, “Vouchers”) and shall assume all liability, if any, for all
outstanding Vouchers as of the Closing Date regardless of any purported expiration, (b)
receive a credit against the Purchase Price payable at Closing equal to seventy percent
(70%) of the face value (or seventy percent (70%) of the rack rate if no face value is given
or if only a maximum value is given) of those Vouchers set forth in Schedule 4.4.11
attached hereto and incorporated herein by this reference, as updated as of the Closing
Date, and (c) indemnify, defend and hold Seller harmless from and against all claims,
liabilities, costs and expenses arising out of the Vouchers from and after the Closing Date.
4.4.12 Air Condition Unit Installation. Seller has ordered new air
conditioning units (the “AC Units”) as required pursuant to that certain default
notice dated August 17, 2010 from Sheraton (the “Sheraton Letter”) and shall pay for
the AC Units prior to Closing. Seller shall also endeavor to begin installation of the AC
Units at the Property prior to Closing. In the event no AC Units are installed prior to
Closing, Buyer shall receive a credit against the Purchase Price in the amount of Twenty
Thousand and No/100 Dollars ($20,000) at Closing (the “AC Credit”) and Buyer shall
assume all responsibility for the installation of all the AC Units. In the event, however,
that some of the AC Units have been installed prior to Closing (each an “Installed AC
Unit”), Buyer shall receive a pro rata share of the AC Credit for any AC Units remaining
to be installed, and Buyer shall assume all responsibility for the installation of the
remaining uninstalled AC Units.
4.4.13 Utility and Other Deposits.
(a) At Closing, Seller shall receive a credit for all refundable cash or other deposits
posted with utility companies serving the Property or any governmental agencies or
authorities or posted pursuant to any Operating Agreement, and Seller shall assign to Buyer
all right, title and interest in and to such refundable cash or other deposits, or, at
Seller’s option, Seller shall be entitled to receive and retain such refundable cash and
deposits.
(b) Buyer shall be entitled to a credit for all unapplied and refundable security and
other deposits retained by Seller as of the Closing Date with respect to any Leases at the
Hotel.
4.4.14 Final Statement; Post-Closing Adjustments. Except for prorations for
real estate taxes and other assessments, which shall be adjusted as of the Closing Date,
and, if necessary, re-adjusted within fifteen (15) business days of receipt of the tax xxxx
for the tax year in which the Closing occurs if such tax xxxx was not issued as of the
Closing Date,
Buyer and Seller shall make a one-time post-Closing adjustment of any item of income
and expense subject to adjustment as provided above which was either incomplete or incorrect
(whether as a result of an error in calculation or a lack of complete and accurate
information) as of the Closing. Buyer will prepare and deliver to Seller for its review and
approval a statement of prorations (the “Final Statement”) within sixty (60) days
following the Closing Date, and the party in whose favor the original incorrect adjustment
or error was made (“Adjusting Party”) shall pay to the other party (“Requesting
Party”) the sum necessary to correct such prior incorrect adjustment or error within ten
(10) days after delivery of the Final Statement. Notwithstanding any provision of this
Agreement to the contrary, all items required to be adjusted pursuant to this Section
4.4 shall be adjusted within 75 days of Closing (except real estate taxes, which shall
be re-adjusted within the period set forth above), and such adjustment shall be final and no
further adjustment to the prorations or the Purchase Price shall be made.
4.4.15 Resolution of Disputes. In the case of a dispute, the parties shall
attempt to resolve such dispute, but if for any reason such dispute is not resolved by the
date that is thirty (30) days after the delivery of the original notice of the claimed
adjustment by Buyer or Seller, but not to exceed 75 days after Closing, then the parties
shall submit such dispute to Deloitte & Touche (“Outside Accountants”), and the
determination of the Outside Accountants, which shall be made within a period of fifteen
(15) days after such submittal by the parties, shall be conclusive. The fees and expenses
of the Outside Accountants shall be paid equally by Buyer and Seller. At such time as the
amount of any adjustment or dispute shall be determined (either by agreement or by
determination of the Outside Accountants), any amount that shall be payable by the
Requesting Party to the Adjusting Party as a result of such adjustment or determination
shall be paid within ten (10) business days after the date on which such agreement or
determination shall have been made.
4.4.16 Survival. The provisions of this Section 4.4 shall survive
Closing.
| 4.5 | Closing Costs. Seller shall pay (a) the fees of any counsel representing it in connection with this transaction; (b) the premium for the Title Policy including any premium for extended coverage (i.e., ALTA 2006 coverage), but not the premium for any endorsements (other than curative endorsements accepted by Buyer as a cure to a title objection, as set forth above); (c) all County and City documentary transfer taxes or conveyance taxes payable by reason of the transfer of the Real Property; (d) the fees for recording the Deed; and (e) one-half (1/2) of any escrow fee which may be charged by the Escrow Agent. Buyer shall pay (i) the fees of any counsel representing Buyer in connection with this transaction; (ii) 100% of the (A) cost of any endorsements to the Title Policy other than curative endorsements accepted by Buyer as a cure to a title objection which cost of such curative endorsements shall be paid by Seller, and (B) cost of any title insurance provided to Buyer’s lender; (iii) the cost of the updated Survey; (iv) all bulk sales taxes and any sales tax on the sale of the Personal Property (or any part thereof); and (v) one-half (1/2) of any escrow fees charged by the Escrow Agent. All other costs and expenses incident to this transaction and the closing thereof shall be paid in a manner consistent with custom for similar transactions in Los Angeles, California. Notwithstanding the foregoing, in the event that this Agreement is terminated as a result of a party’s default, such defaulting party shall pay all escrow and title cancellation fees charged in connection with such cancellation. |
| 4.6 | Conditions Precedent to Obligation of Buyer. The obligation of Buyer to consummate the transaction hereunder shall be subject to the fulfillment on or before the Closing Date of all of the following conditions, any or all of which may be waived by Buyer in its sole discretion: |
(a) Seller shall have delivered to Buyer or deposited with Escrow Agent all of the items
required to be delivered to Buyer or deposited with Escrow Agent pursuant to the terms of
this Agreement, including but not limited to, those provided for in Section 4.2.
(b) All of the representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects as of the Closing Date (with appropriate
modifications permitted under this Agreement or not materially adverse to Buyer).
(c) Seller shall have performed and observed, in all material respects, all covenants and
agreements of this Agreement to be performed and observed by Seller as of the Closing Date.
(d) Seller shall have delivered to Buyer reasonable evidence of completion and payment in
full of the capital improvements required pursuant to the Sheraton Letter; provided,
however, that for the AC Units, Seller shall instead deliver to Buyer reasonable evidence
that all of the AC Units have been purchased (and paid for in full) and, to the extent
applicable, reasonable evidence that the Installed AC Units have been installed.
(e) Seller shall have obtained and delivered to Buyer a “tax clearance” letter from the
California Board of Equalization showing that all sales and other taxes with respect to the
Hotel to be paid by Seller to the State of California have been paid or that none are owing.
(f) The Closing of the Liquor Escrow or the execution and delivery of a mutually acceptable
interim management agreement allowing for the operation of the Hotel by Buyer or its manager
and the operation of the Existing Liquor License post Closing by the holder of the Existing
Liquor License.
(g) The Title Company shall be irrevocably committed to issuance of the Title Policy as of
Closing.
(h) The Management Agreement shall have been terminated as of Closing.
| 4.7 | Conditions Precedent to Obligation of Seller. The obligation of Seller to consummate the transaction hereunder shall be subject to the fulfillment on or before the of Closing Date of all of the following conditions, any or all of which may be waived by Seller in writing in its sole discretion: |
(a) Escrow Holder shall have received the Purchase Price, as adjusted pursuant to this
Agreement and shall be irrevocably committed to deliver the Purchase Price to Seller in the
manner provided for in this Agreement.
(b) Buyer shall have delivered to Seller all of the items required to be delivered to Seller
pursuant to the terms of this Agreement, including but not limited to, those provided for in
Section 4.3, other than delivery of the Purchase Price which shall be delivered to
Escrow Holder.
(c) All of the representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects as of the Closing Date.
(d) Buyer shall have performed and observed, in all material respects, all covenants and
agreements of this Agreement to be performed and observed by Buyer as of the Closing Date.
(e) The Sheraton Agreement shall have been terminated as of Closing without any cost or
penalty to Seller.
| 4.8 | Failure or Waiver of Conditions Precedent. In the event any of the conditions set forth in Sections 4.6 or 4.7 are not fulfilled or waived on or before the Outside Closing Date, the party benefited by such conditions may, by written notice to the other party, terminate this Agreement, whereupon all rights and obligations hereunder of each party shall end except those that expressly survive any termination. Either party benefited by a condition set forth in Sections 4.6 and 4.7 above may, at its election, at any time or times on or before the date specified for the satisfaction of the condition, waive in writing the benefit of such condition. Buyer’s consent to the Closing pursuant to this Agreement shall waive any remaining unfulfilled conditions, and any liability on the part of Seller for breaches of representations and warranties of which Buyer had knowledge as of the Closing. |
| 4.9 | Alcoholic Beverage License and Inventory. |
(a) Buyer shall use diligent, good faith efforts, and Seller shall
cooperate with Buyer, to file any and all paperwork necessary for the transfer of the Type
47 Liquor License (No. 389701) issued to KOR Hotels, LLC with respect to the Hotel (the
“Liquor License”), to Buyer on or after the Closing Date; provided that, such
transfer and cooperation of Seller (i) shall not create any potential liability for Seller
and (ii) be at no cost or expense to Seller. Buyer agrees to pay all fees, charges, and
related costs in connection with the transfer of the Liquor License. Within thirty (30)
days of the parties’ execution of this Purchase and Sale Agreement, Buyer shall submit with
the California Department of Alcoholic Beverage Control (“CABC”) all necessary paperwork to
transfer the Liquor License to Buyer. Buyer specifically acknowledges and agrees that the
transfer of the Liquor License to Buyer on the Closing Date shall not be a condition to
Buyer’s obligation to close the transaction contemplated under this Agreement, provided,
that, in the event such transfer shall not have occurred upon the Closing Date, the Food and
Beverage Management Agreement referenced in subsection (c), below, shall be executed and
delivered as of Closing. In no event shall Seller be required to transfer to Buyer the
Liquor License or any alcoholic beverage inventory which is located at or held for use in
the Hotel unless and until the CABC has approved the transfer of the Liquor License to
Buyer.
(b) Cooperation by Seller shall include the opening of a “Liquor
License Escrow”, at an escrow company of Buyer’s designation, as required by applicable law
for the transfer of the
Liquor License, and the associated transfer of any unopened containers of alcoholic
beverages (“Alcoholic Beverage Inventory”). The Liquor License Escrow arrangements
shall include the following
(i) the conveyance to Buyer of all unopened, and unexpired
containers of alcoholic beverages upon the approval by the CABC of the transfer of
the Liquor License to Buyer;
(ii) a purchase price of Sixty Thousand and No/100 Dollars
($60,000.00) for the existing Liquor License and the unopened alcoholic beverage
inventory to be transferred by Seller to Buyer. The aforementioned amount of deposit
is included in the Purchase Price (and is not in addition to the Purchase Price) and
said payment shall be credited to Buyer at Closing. Any and all funds remaining in
the Liquor License Escrow after the payment of claims by Seller’s creditors, if any,
shall be remitted to Seller by the escrow company upon the approval by the CABC of
the transfer of the Liquor License to Buyer; and
(c) If the Liquor License has not been transferred to Buyer
effective as of the Closing Date, then Buyer’s obligation to close the purchase of the Hotel
shall not be excused or delayed or in any other way be affected thereby, the Purchase Price
for the Property shall not be reduced, Buyer’s obligation to pay the Liquor License Price
pursuant to subparagraph (ii) above shall not be excused or reduced, and Seller shall have
no additional obligation as a result thereof; Seller shall, for a period of one hundred and
eighty days (180) following the Closing, cooperate and assist in Buyer’s efforts to have the
Liquor License transferred to Buyer in accordance with the terms of this Section (it
being the sole responsibility of Buyer to arrange for such transfer or issuance of a new
alcoholic beverage license) by executing and delivering to Buyer a Food and Beverage
Management Agreement, in the form attached as Exhibit G hereto, same to have a term
of 90 days plus one 90 day extension exercisable by Buyer in the event issuance of the
Liquor License has not occurred prior to expiration of the original term thereof.
| 4.10 | Disbursements and Other Actions by Escrow Agent. Upon the Closing, Escrow Agent shall promptly undertake all of the following in the following order and manner: |
(a) Cause the Deed and any other documents which the parties hereto may mutually direct to
be recorded in the Official Records of Los Angeles County, California in the order directed
by the parties;
(b) Disburse to Seller from funds deposited by Buyer with Escrow Agent towards payment of
all items (including, without limitation, the Purchase Price) chargeable to the account of
Buyer;
(c) Deliver to Seller a fully executed original of the instruments described in clauses (c),
(d), (i), and (j) of Section 4.2 above and clauses (c), (d) and (f) of Section
4.3 above and a conformed copy of the Deed;
(d) Deliver to Buyer a fully executed original of the instruments described in clauses (b),
(c), (d), (e), (g), (i), and (j) of Section 4.2 above and a conformed copy of the
Deed; and
(e) Direct the Title Company to issue the Title Policy to Buyer.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
| 5.1 | Representations and Warranties of Seller. Seller hereby makes the following representations and warranties to Buyer as of the Effective Date, subject to the qualifications and exceptions set forth below: |
(a) Organization and Authority. Seller has been duly organized and is validly
existing and in good standing under the laws of Delaware. Seller has the full right and
authority to enter into this Agreement and to transfer all of the Property to be conveyed by
Seller pursuant hereto and to consummate or cause to be consummated the transactions
contemplated herein to be made by Seller. The person signing this Agreement on behalf of
Seller is authorized to do so.
(b) No Breach. To Seller’s knowledge, the execution, delivery and performance of
this Agreement by Seller and the consummation of the transaction contemplated herein will
not: (i) result in a breach or acceleration of or constitute a default or event of
termination under the provisions of any agreement or instrument by which the Property is
bound or affected which would have a material adverse impact on the ownership and operation
of the Property by Buyer; (ii) result in the creation or imposition of any lien, charge or
encumbrance, against the Property or any portion thereof; or (iii) constitute or result in
the violation or breach by Seller of any judgment, order, writ, injunction or decree issued
against or imposed upon Seller or result in the violation of any applicable law, rule or
regulation of any governmental authority which, with respect to any of the foregoing, would
have a material adverse impact on the ownership or operation of the Property by Buyer.
(c) Litigation/Condemnation. Except as set forth on Schedule 5.1(c)
attached hereto, Seller has not received written notice of any, and there is no, litigation
which has been filed (and that is pending) against Seller that arises out of the ownership
of the Property and that would materially and adversely affect the Property or use thereof
or Seller’s ability to perform its obligations hereunder, nor has Seller received written
notice of any eminent domain, condemnation or similar proceedings relating to the Real
Property. To Seller’s knowledge, there is no threatened litigation that arises out of the
ownership of the Property and that would materially and adversely affect the Property or use
thereof or Seller’s ability to perform its obligations hereunder.
(d) Leases. To Seller’s knowledge, the list of Leases attached hereto as
Schedule 1.1(h) is accurate and lists all Leases currently affecting the Hotel, and
Seller has delivered (or otherwise made available to Buyer) a true and correct copy of such
Leases and no uncured notice of default has been delivered by Seller or received by Seller
with respect to any Leases and there are no oral understandings or side agreements with any
tenant of the Property that has not been reduced to a writing and which is not set forth
among the Leases.
(e) No Violations. Except as set forth on Schedule 5.1(e) attached hereto,
to Seller’s knowledge, Seller has not received prior to the Effective Date any written
notification from
any governmental or public authority that the Property is in violation of any applicable
fire, health, building, use, occupancy or zoning laws or other statute, ordinance, law or
code (including without limitation Environmental Laws, the Americans with Disabilities Act,
as amended, and the Development Agreement) bearing on the construction, operation or use of
the Property or any part thereof where such violation remains outstanding and, if
unaddressed, would have a material adverse effect on the use of the Property as currently
owned and operated.
(f) Operating Agreements and Equipment Leases. To Seller’s knowledge, there are no
Operating Agreements or Equipment Leases which will affect the Property after the Closing
Date except as set forth on the Schedule 1.1(e)-1 and Schedule 1.1(e)-2,
respectively, and no Operating Agreements or Equipment Leases have been amended except as
set forth in said Schedules and there are no oral understandings or side agreements with
respect to the rental of any equipment that has not been reduced to a writing and which is
not set forth on said Schedules and there are no oral understandings or side agreements with
respect to any service or equipment that has not been reduced to a writing and which is not
set forth among said Schedules. To Seller’s knowledge, no uncured written notice of
material default has been delivered by Seller or received by Seller with respect to any
Operating Agreements or Equipment Leases. To Seller’s knowledge, the copies of Operating
Agreements and Equipment Leases delivered or made available to Buyer by Seller are true and
complete.
(g) Personal Property. To Seller’s knowledge, Seller owns the Personal Property,
other than any leased Personal Property under the Equipment Leases, and upon its delivery to
Buyer at Closing, the Personal Property shall be free of all liens and encumbrances.
(h) No Consents. No consent, approval or action of, filing with or notice to any
governmental or regulatory authority or any other person or entity on the part of Seller is
required in connection with the execution, delivery and performance of Agreement or the
consummation of the transactions contemplated.
(i) Patriot Act Compliance. Neither Seller nor any individual or entity having an
interest in Seller is a person or entity either (i) is listed on the Specially Designated
Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control,
Department of the Treasury (“OFAC”) pursuant to Executive Order No. 133224, 66 Fed.
Reg. 49079 (September 25, 2001) (the “Order”) and/or on any other list of terrorists
or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC
or pursuant to any other applicable orders (such lists are collectively referred to as the
“Lists”); (ii) is a person or entity who has been determined by competent authority
to be subject to the prohibitions contained in the Orders; or (iii) is owned or controlled
by, or acts for or on behalf of, any person or entity on the Lists or any other person or
entity who has been determined by competent authority to be subject to the prohibitions
contained in the Order.
(j) Compliance with Laws. Seller has not received prior to the Effective Date any
written notice of default under that certain Development Agreement dated June 29, 1983 (the
“Development Agreement”) that remains uncured and, if unaddressed, would have a
material adverse effect on the use of the Property as currently owned and operated and/or
the size of the Improvements. To Seller’s knowledge, the Development Agreement is in full
force and effect.
(k) Environmental Reports. Seller has delivered true and correct copies of all
written studies and reports in Seller’s possession or control that were prepared by
environmental consultants for Seller regarding the presence of hazardous waste in, on or
under the Real Property.
(l) Financial Information. The financial information provided by Seller to Buyer
through Broker, including without limitation, the operating statements, general ledger and
reconciliations, are true, correct and complete and, to Seller’s knowledge, the audited
financial statements fairly and accurately represent Seller’s and the Property’s financial
position for the periods covered thereby.
(m) Sale of All Assets in One Transaction. The sale of the Hotel pursuant to this
Agreement is the sale of all or substantially all Seller’s assets and is not one in a series
of three or more sales of assets by Seller within a 12 month period and Seller does not hold
or use the property being sold pursuant to this Agreement in activities requiring a
“seller’s permit” under California Code of Regulations 1595(b).
(n) Pending Actions. Except as set forth in Schedule 5.1(c), Seller has received no
notice of any litigation or other adverse proceeding to be commenced against Manager and
there is no action, suit, arbitration, unsatisfied order or judgment, government
investigation or proceeding pending against Manager which, if adversely determined, could
individually or in the aggregate materially interfere with or affect the consummation of the
transaction contemplated by this Agreement.
Notwithstanding the foregoing, if Buyer has knowledge of a breach of any representation or
warranty made by Seller in this Agreement and Buyer nevertheless proceeds to close the
purchase of the Property, such representation or warranty by Seller shall be deemed to be
qualified or modified to reflect Buyer’s knowledge of such breach and Seller shall have no
liability whatsoever respecting the same.
| 5.2 | Knowledge Defined. For purposes of this Agreement, “knowledge” means (a) with respect to Seller, the actual knowledge of Xxxx Xxxxxx, the President of Bronze Corp. (the sole owner of the Managing Member of the sole owner of the Seller) (provided that, in no event shall such person have any personal liability arising under this Agreement), without any duty of inquiry or investigation, and expressly excluding the knowledge of any other shareholder, partner, member, trustee, beneficiary, director, officer, manager, employee, agent or representative of Seller or any of its affiliates, and (b) with respect to Buyer, (i) the actual knowledge of Xxxxxx Xxxxxx (provided that, in no event shall such person have any personal liability arising under this Agreement), (ii) any matter disclosed in any exhibits or schedules to this Agreement, (iii) any matter disclosed in any of the Seller Due Diligence Materials or any other documents or materials provided or made available by Seller or its agents to Buyer prior to Closing, and (iv) any matter disclosed by Buyer’s inspections or investigations of the Property. For the purposes of this definition, the term “actual knowledge” means, with respect to any person, the conscious awareness of such person at the time in question without any duty of inquiry or investigation, and expressly excludes any constructive or implied knowledge of such person. |
| 5.3 | Survival of Seller’s Representations and Warranties. The representations and warranties of Seller set forth in Section 5.1 as updated by the certificate of Seller to be delivered to Buyer at Closing in accordance with Section 4.2(e) hereof, shall survive Closing for a period of two hundred seventy (270) days. No claim for a breach of any representation or warranty of Seller shall be actionable or payable unless each of the following conditions is satisfied: (a) the breach in question results from or is based on a condition, state of facts or other matter as to which Buyer did not have knowledge prior to Closing, (b) the valid claims for all such breaches, if any, collectively aggregate more than $100,000, in which event the full amount of such claims shall be actionable, and (c) written notice containing a description of the specific nature of such breach shall have been given by Buyer to Seller prior to the expiration of said two hundred seventy (270) day period and an action shall have been commenced by Buyer against Seller within thirty (30) days after the termination of the survival period provided for above in this Section 5.3. Buyer agrees to first seek recovery under any insurance policies, the Title Policy, the New License Agreement (to the extent of one) and the Operating Agreements prior to seeking recovery from Seller, and Seller shall not be liable to Buyer if Buyer’s claim is satisfied from such insurance policies, title policies or agreements. As used herein, the term “Cap” shall mean the total aggregate amount of Two Million and No/100 Dollars ($2,000,000.00). Notwithstanding any provision of this Agreement to the contrary, in no event shall (i) Seller’s aggregate liability to Buyer for breach of any representation or warranty of Seller in this Agreement or the certificate to be delivered by Seller at Closing pursuant to Section 4.2(e) hereof, taken in the aggregate with any other claims by Buyer against Seller (including any indemnification obligations), exceed the amount of the Cap, or (ii) Seller be liable for any consequential damages of Buyer or any punitive damages. |
| 5.4 | Covenants of Seller. Seller hereby covenants with Buyer as follows: |
(a) From the Effective Date hereof until the Closing or earlier termination of this
Agreement, Seller shall use reasonable efforts to cause Manager to operate and maintain the
Hotel in a manner generally consistent with the manner in which Seller has operated and
maintained the Hotel prior to the date hereof; provided, however, that Buyer acknowledges
that Seller’s ability to control the operation of the Hotel is limited by the terms of the
Management Agreement.
(b) From the Effective Date hereof until Closing or the earlier termination of this
Agreement, Seller shall use commercially reasonable efforts to perform its material
obligations under the Operating Agreements. Notwithstanding any of provision of this
Agreement to the contrary, Buyer acknowledges and agrees that pursuant to the Management
Agreement, Manager is vested with decision making authority over the Hotel and therefore
Seller’s ability to control the management and operation of the Hotel is circumscribed by
and must be exercised in accordance with, the Management Agreement.
(c) Prior to the Closing Date, Seller shall provide Buyer with: (i) a copy of each
participation agreement (or similar contract) with, and the current contributions rate
schedule for, the Retirement Plan and any other retirement, health, welfare or other fringe
benefit fund or plan (each a “Xxxx-Xxxxxxx Plans”) to which Seller or Manager has a
contribution obligation or other liability with respect to Any Employee (as defined below);
(ii) an itemized and accurate contribution base units history for the Retirement Plan (as
defined below) for the Seller’s and/or Manager’s Local 11 bargaining unit employees for the
current Retirement Plan plan year to most recent month end preceding the Closing Date and
for each of the prior Retirement Plan plan years (up to but not in excess of three prior
Retirement Plan years); (iii) a copy of any notice received by the Seller or the Manager
prior to the Closing Date from the Retirement Plan of any determination that the Retirement
Plan is in endangered or critical status as determined under the applicable provisions of
the Pension Protection Act of 2006; and (iv) the name, street address, telephone number, fax
number, and e-mail address of the board of trustees and, if separate, the plan administrator
of the Retirement Plan and each other Xxxx-Xxxxxxx Plan.
(d) From and after the Effective Date, Seller shall not enter into any new management
agreement or Operating Agreements or other agreements or encumbrances with respect to the
Property, nor shall Seller enter into any agreements modifying the Operating Agreements,
Permitted Exceptions or Leases unless (i) any such agreement or modification will not bind
Buyer or the Property after the Closing Date or is subject to termination on not more than
thirty (30) days’ notice without penalty, or (ii) Seller has obtained Buyer’s prior written
consent to such agreement or modification, same to be granted or denied in Buyer’s sole
discretion. Seller agrees to cancel and terminate effective as of the Closing Date any
Operating Agreements requested in writing by Buyer to the extent permissible under the terms
of such Operating Agreements, provided any fee or penalty for such cancellation shall be
paid for by Buyer.
(e) From the Effective Date until the Closing or earlier termination of this Agreement,
Seller shall conduct the business of the Property in the ordinary course, and will not: (i)
transfer or convey the Property or any interest in Seller, or enter into any agreement to do
so; (ii) create or agree to any easements, liens, mortgages, encumbrances or other interests
that would affect the Property or Seller’s ability to comply with this Agreement; (iii) fail
to maintain and repair the Property in at least the manner that Seller has done previously;
(iv) change Seller’s existing policies of public liability and hazard and extended coverage
insurance insuring the Property; (v) fail to comply promptly with any notices of violation
of laws or municipal ordinances, regulations, orders or requirements of departments of
housing, building, fire, labor, health, or other state, city or municipal departments or
other governmental authorities having jurisdiction against or affecting the Property or the
use or operation thereof, without the prior written consent of Buyer, which consent may be
granted or denied in Buyer’s sole discretion; and/or (vi) terminate any tax appeals,
condemnation awards proceedings, zoning changes, public roadway and/or traffic realignment
negotiations with public authorities or the like, and/or storm water management agreements,
and the like benefiting the Property.
(f) Seller shall, within five days after the Effective Date, apply to the California State
Board of Equalization for a “tax clearance” letter showing that all sales and other taxes
with respect to the Hotel to be paid by Seller to the State of California have been paid or
that none are owing and Seller shall thereafter diligently pursue obtaining the same and
Seller shall deliver the same to Buyer prior to Closing.
(g) From and after the Effective Date through Closing, Seller shall promptly deliver to
Buyer copies of any written communication sent or received by Seller or sent or received by
the general manager or controller of the Hotel (i) which constitutes proper “notice” under
any of the Leases or Operating Agreements (but shall not be obligated to deliver other
written communications not defined as a notice under the applicable agreement (e.g., email))
and (ii) in connection with governmental rules and regulations impacting the Property (to
the extent that such communications involve matters which would have a material and adverse
impact on the ownership and operation of the Property).
| 5.5 | Representations and Warranties of Buyer. Buyer hereby represents and warrants to Seller: |
(a) ERISA. Buyer is not acquiring the Property with the assets of an employee
benefit plan as defined in Section 3(3) of ERISA.
(b) Organization and Authority. Buyer has been duly organized and is validly
existing and in good standing under the laws of Delaware and is authorized to do business in
California. Buyer has the full right, power and authority to purchase the Property as
provided in this Agreement and to carry out Buyer’s obligations hereunder, and all requisite
action necessary to authorize Buyer to enter into this Agreement and to carry out its
obligations hereunder have been, or by the Closing will have been, taken. The person
signing this Agreement on behalf of Buyer is authorized to do so, and this Agreement is
enforceable against Buyer in accordance with its terms, subject to bankruptcy, insolvency
and similar laws.
(c) No Breach. To Buyer’s knowledge, the execution, delivery and performance of
this Agreement by Buyer and the consummation of the transaction contemplated herein will
not: (i) result in a breach or acceleration of or constitute a default under any agreement
or instrument by which Buyer is bound or affected which would have a material adverse impact
on the ability of Buyer to timely close the acquisition of the Property pursuant to the
terms of this Agreement; or (ii) constitute or result in the violation or breach by Buyer of
any judgment, order, writ, injunction or decree issued against or imposed upon Buyer or
result in the violation of any applicable law, rule or regulation of any governmental
authority which, with respect to any of the foregoing, would have a material adverse impact
on the ability of Buyer to timely complete the acquisition of the Property pursuant to this
Agreement.
(d) Pending Actions. There is no action, suit, arbitration, unsatisfied order or
judgment, government investigation or proceeding pending against Buyer which, if adversely
determined, could individually or in the aggregate materially interfere with the
consummation of the transaction contemplated by this Agreement.
(e) Patriot Act Compliance. Neither Buyer nor any person, group, entity or nation
that Buyer is acting, directly or indirectly for, or on behalf of, is named by any Executive
Order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) or the
United States Treasury Department as a terrorist, “Specially Designated National and Blocked
Person,” or is otherwise a banned or blocked person, group, entity, or nation pursuant to
any law that is enforced or administered by the Office of Foreign Assets Control, and Buyer
is not engaging in the transaction contemplated herein, directly or indirectly, on behalf
of, or instigating or facilitating the transaction contemplated herein, directly or
indirectly, on behalf of, any such person, group, entity or nation. Buyer is not engaging
in the transaction contemplated herein, directly or indirectly, in violation of any laws
relating
to drug trafficking, money laundering or predicate crimes to money laundering. None of the
funds of Buyer have been or will be derived from any unlawful activity with the result that
the investment of direct or indirect equity owners in Buyer is prohibited by law or that the
transaction contemplated herein or this Agreement is or will be in violation of law. Buyer
has and will continue to implement procedures, and has consistently and will continue to
consistently apply those procedures, to ensure the foregoing representations and warranties
remain true and correct at all times prior to Closing.
| 5.6 | Survival of Buyer’s Representations and Warranties. The representations and warranties of Buyer set forth in Sections 5.5(a) and (e) shall survive Closing and shall be continuing representations and warranties without limitation. All other representations and warranties of Buyer shall survive Closing for a period of two hundred seventy (270) days. |
| 5.7 | Covenants of Buyer. |
(a) In connection with its investigation of the Property during the Inspection Period and
through Closing, Buyer may at its election (but subject to the limitations of Section
3.1 above), inspect the Property for the presence of Hazardous Substances (as defined
below), and, at Seller’s request, shall furnish to Seller copies of any reports received by
Buyer in connection with any such inspection. Buyer hereby assumes full responsibility for
such inspections and irrevocably waives any claim against Seller and releases Seller from
all liability arising from the presence of Hazardous Substances on the Property. Buyer
shall also furnish to Seller copies of any other reports received by Buyer relating to any
other inspections of the Property conducted on Buyer’s behalf, if any (including,
specifically, without limitation, any reports analyzing compliance of the Property with the
provisions of the Americans with Disabilities Act (“ADA”), 42 X.X.X. §00000,
et seq., if applicable. As used herein, “Hazardous Substances”
means all hazardous or toxic materials, substances, pollutants, contaminants, or wastes
currently identified as a hazardous substance or waste in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (commonly known as “CERCLA”), as amended,
the Superfund Amendments and Reauthorization Act (commonly known as “XXXX”), the Resource
Conservation and Recovery Act (commonly known as “RCRA”), or any other federal, state or
local legislation or ordinances applicable to the Property (collectively, “Environmental
Laws”). The provisions of this Section 5.7(a) shall survive Closing or any
termination of this Agreement.
(b) Without limiting anything herein to the contrary, Buyer waives any right of contribution
with respect to, any matter arising from, or relating to the existence of, Hazardous
Substances or the violation or enforcement of Environmental Laws in connection with the
Property or operation thereof. Except as otherwise set forth in this Agreement, Seller
makes no representations or warranties as to whether the Property or any portion thereof
contains asbestos, harmful or toxic substances or other Hazardous Substances or is in
compliance with Environmental Laws. The provisions of this Section 5.7(b) shall
survive Closing or any termination of this Agreement.
(c) Not later than two (2) days prior to the Closing, Seller shall send, or cause the
Manager to send, written notice to guests or other persons who have safe deposit boxes at
the Hotel advising of the sale of the Hotel and requesting verification or removal of the
contents within five (5) days. The safe deposit boxes of guests or other persons not
responding to
said written notice shall be opened only in the presence of the Manager or representatives
of both Seller and Buyer. The contents of all boxes opened as aforesaid shall be listed at
the time such boxes are opened and each such list shall be signed by or on behalf of the
Manager or by or on behalf of Seller and Buyer, and Buyer shall not be liable or responsible
for any items claimed to have been in said boxes unless such items are included in such
list. Seller agrees to indemnify, defend and hold Buyer harmless from and against any
liability or responsibility for any items claimed to have been in said boxes but not
included on such list and Buyer agrees to indemnify, defend and hold Seller harmless from
and against any liability or responsibility for items claimed to have been in said boxes and
included in such list and all claims, losses and liabilities with respect thereto arising
out of the acts or omissions of Buyer after the Closing Date. The provisions of this
Section 5.7(c) shall survive Closing.
(d) All baggage or other property of guests of the Hotel which has been checked with or left
in the care of Seller and remains in Seller’s care as of the Cut-Off Time shall be
inventoried and tagged jointly by Seller and Buyer. Buyer hereby agrees to defend,
indemnify and hold harmless Seller against any claims, losses or liabilities in connection
with such baggage and property arising out of the acts or omissions of Buyer from and after
the Closing Date. Seller hereby agrees to defend, indemnify and hold harmless Buyer against
all claims, losses and liabilities with respect to such baggage and property arising out of
the acts or omissions of Seller prior to the Closing Date. This Section 5.7(d)
shall survive Closing.
(e) Buyer shall honor all reservations at the Hotel (including honoring the rates at which
such reservations were made, including reservations made on a wholesale, reward points
redemption, or other basis), or for any related conference, banquet, or meeting space or any
other facilities in connection with the Hotel made by Seller on or prior to the Cut-Off Time
for periods on or after the Closing Date. The provisions of this Section 5.7(e)
shall survive Closing.
(f) Buyer shall be liable, and shall indemnify and hold Seller harmless, for any claims any
State, city or county taxing authority may make (including costs, penalties and interest
associated therewith) as a result of Buyer’s allocation of the Purchase Price or in
connection with (i) any bulk sales taxes applicable to the sale of the Property, and (ii)
any taxes to be assumed by Buyer in accordance with Section 4.4 above. Seller shall
be liable, and shall indemnify and hold Buyer harmless, for any claims any State, city or
county taxing authority may make (including costs, penalties and interest associated
therewith) attributable to (A) or levied upon the net income of Seller whether attributable
to the period prior to, on or after Closing, or (B) any assets of Seller other than the
Property. The provisions of this Section 5.7(f) shall survive Closing.
| 5.8 | Employees. |
(a) Buyer shall not take or omit to take any act the effect of which may cause Seller or
Manager to incur any liability under 29 USC §2101 et seq., the Worker Adjustment and
Retraining Notification Act, or any state law analogue (collectively, the “WARN Act”).
Buyer acknowledges that the personnel employed to manage, operate and work at the Hotel are
the employees of Manager, or an affiliate of Manager, and not of Seller. At Closing, Seller
shall cause Manager to terminate all Current Employees. Buyer acknowledges that
neither Seller nor Manager is giving any notice under the WARN Act, and Buyer agrees to
indemnify “Indemnified Parties” (as defined below) and hold each of them harmless against
any and all costs and expenses (including, without limitation, reasonable attorneys’ fees)
incurred by Seller and/or Manager as a result of Buyer’s failure to comply with this
Section 5.8, including, but not limited to, any liability of Seller to Manager
arising under the Management Agreement, unless such costs, expenses, or liability is caused,
directly or indirectly, by Seller or Manager’s own acts or omissions in a manner
inconsistent with the terms of this Section 5.8, in which case Seller shall remain
solely liable for such costs, expenses, and liabilities; provided, however, that Buyer shall
have no indemnification obligation to any Indemnified Party for any withdrawal liability
relating to the Retirement Plan that is incurred by Manager or Seller as a result of any
“complete withdrawal” or “partial withdrawal” as defined under ERISA of the Manager or
Seller from the Retirement Plan as a result of the asset sale transaction contemplated by
this Agreement if Section 4204 of ERISA does not apply to Seller (for example, because
Seller is not a “seller” within the meaning Section 4204 of ERISA) or because the provisions
of this Agreement do not comply with the requirements under Section 4204 of ERISA. Buyer
shall offer or cause to be offered employment as of the Closing Date to a sufficient number
of Current Employees (defined below) so that notices under the WARN Act or any state law
analogue is not required, and such offers shall provide (i) employment at the Hotel, (ii)
base pay levels and other compensation substantially similar to those currently provided to
such Current Employees prior to the Closing, and (iii) total compensation and benefits
comparable to those currently provided to such Current Employees prior to the Closing.
Buyer shall not within ninety-one (91) days following the Closing terminate any of the
Current Employees (and shall instruct any manager not to terminate) without a documented
reason to terminate such employee for cause; provided, however, that nothing in this
Agreement requires Buyer to offer anything other than at-will employment to Current
Employees unless any such employee is covered by a Collective Bargaining Agreement to the
contrary prior to the Closing Date. For purposes of this Agreement, (A) “Current
Employees” means all individuals employed at the Hotel by Manager and/or Seller as of
the day immediately prior to the Closing Date, irrespective of whether such individuals are
active or on leave of absence or otherwise inactive, and (B) “All Employees” means
any and all individuals employed at the Hotel by anyone at any time, whether or not the
individuals are hired by Buyer at or after the Closing.
(b) Buyer shall ensure that service with Seller by Current Employees who are hired by Buyer
(or any manager with respect to the Hotel) within 90 days of the Closing Date shall be
deemed to have been in service with Buyer for purposes of any length of service
requirements, waiting periods, vesting periods, or differential benefits based on length of
service in any benefit plan established or maintained by or on behalf of Buyer for which
such Current Employees may be eligible after the Closing, such that Seller shall not have
any COBRA obligations for All Employees hired by Buyer. Buyer shall ensure that any
pre-existing conditions, restrictions or waiting periods under any benefit plan established
prior to the Effective Date by or on behalf of Buyer providing medical, dental, vision, or
prescription drug coverage or benefits are waived to the extent necessary to provide
immediate coverage for Current Employees who are hired for the Hotel following termination
of such Current Employees’ coverage under the benefit plans maintained by or on behalf of
Seller, such that Seller shall not have COBRA continuation of group health plan coverage
obligations (“COBRA”) for any such Current Employees who are hired by Buyer
(or any manager with respect to the Hotel). Buyer shall indemnify, defend and hold Seller
harmless from and against all loss, expense (including reasonable attorneys’ fees and
disbursements incurred to enforce this indemnity), damage and liability resulting from any
COBRA claims or obligations arising in respect of All Employees and any claims or disputes
with All Employees regarding employee benefits arising from and after the Closing Date,
unless such loss, expense (including reasonable attorneys’ fees and disbursements incurred
to enforce this indemnity), damage or liability is caused, directly or indirectly, by Seller
or Manager’s own acts or omissions in a manner inconsistent with the terms of this Section
5.8, in which case Seller shall remain solely liable for such loss, expense, damage, or
liability. Except where such payments are required by applicable law to be made by Seller
or Manager at Closing, as further indicated in Section 4.4.3(d) of this Agreement, Buyer
shall: (i) be responsible for all payments for unused vacation days due and payable to All
Employees as of the Closing if, and to the extent, such amounts are not paid at Closing and
Buyer receives a credit against the Purchase Price pursuant to this Agreement; and (ii)
indemnify, defend and hold Indemnified Parties (defined below) harmless from and against all
loss, expense (including reasonable attorneys’ fees and disbursements incurred to enforce
this indemnity), damage and liability resulting from claims or disputes with All Employees
regarding all accrued vacation and payments for unused vacation upon termination from
employment irrespective of when the service relating to such benefits was performed. Buyer
acknowledges that certain information relating to the Employees may be or be deemed to be
proprietary to Manager or may otherwise not be disclosed by Manager, including, but not
limited to, insurance records, health records, and employment and disciplinary history.
Buyer shall also assume the Collective Bargaining Agreement as required above.
(c) Buyer shall indemnify, defend and hold the Indemnified Parties harmless from and against
all claims, actions, liabilities (including, without limitation, severance/separation
payments) or losses arising out of (i) any employment decisions made or actions taken
before, on, or after the Closing by Buyer or any of its agents, respecting All Employees;
(ii) Buyer’s or its manager’s failure to offer comparable employment to a sufficient number
of Current Employees to avoid obligation under the WARN Act or any state law analogue; (iii)
employment of All Employees by or on behalf of Buyer, to the extent such employees become
employed by Buyer or Buyer’s manager, and (iv) any breach by Buyer of this Section 5.8.
For purposes of this Agreement, “Indemnified Parties” shall mean Seller, Manager and
their respective employees, officers, directors and shareholders, and each of their
respective successors and assigns, and each direct and indirect parent, subsidiary, member
and other affiliated entity of each of the foregoing, and their respective employees,
officers, directors, shareholder and members.
(d) Seller shall indemnify, defend and hold Buyer, and its respective employees, officers
directors and shareholders, and each of their respective successors and assigns, and each
direct and indirect parent, subsidiary, member and other affiliated entity of each of the
foregoing, and their respective employees, officers, directors, shareholder and members,
harmless from and against all claims, actions, liabilities (including, without limitation,
severance/separation payments) or losses arising out of any employment decisions made,
actions taken, or a failure to act before or on the Closing by Seller, Manager or their
agents in a manner inconsistent with the terms of this Section 5.8, respecting All
Employees.
(e) Buyer acknowledges receipt of all pertinent information relating to the Santa Xxxxxx
Hotel Employees and Restaurant Employees Retirement Fund (“Retirement Plan”) and
agrees that Buyer shall: (i) adopt the Retirement Plan as a contributing employer with
respect to all employees of the Hotel that are or become eligible to participate in the
Retirement Plan; (ii) assume and shall pay, perform, and discharge all liabilities, debts,
obligations, and responsibilities under the terms of the Retirement Plan that are
attributable to service rendered by All Employees from and after the Closing Date if there
are any accrued but unpaid contributions; and (iii) indemnify, defend, and hold Seller
harmless against any claim or liability with respect to contributions or other amounts
(including, but not limited to, withdrawal liability) payable to, or benefits payable under,
the Retirement Plan that are attributable to service rendered by All Employees from and
after the Closing Date. In addition, with respect to the Retirement Plan:
(i) from and after the Closing Date, Buyer shall contribute substantially the same
number of contribution base units for which Seller had an obligation to contribute
under the Collective Bargaining Agreement immediately prior to the date of the
Closing.
(ii) If Seller determines within 60 days after the Closing Date that transactions
described in this Section 5.8(d)(ii) are required in order to assure
compliance with Section 4204 of ERISA and regulations and interpretations promulgated
thereunder, so that the transactions contemplated by this Agreement do not result in
a “complete withdrawal” or “partial withdrawal” as defined under ERISA by Seller from
the Retirement Plan, Seller shall so notify Buyer in writing no later than 60 days
after the Closing Date, and Buyer shall be required to follow the procedures set
forth herein. During the period commencing on the first day of the plan year
following the Closing and ending on the expiration of the fifth (5th) such plan year
(the “Contribution Period”), Buyer shall provide the Retirement Plan with
either a bond or an escrow in an amount and manner meeting the requirements of
Section 4204 of ERISA, to the extent not otherwise waived or modified by the
Retirement Plan pursuant to a variance approved by the Retirement Plan. Buyer shall
promptly, after receiving Seller’s notice of a determination that the procedures
described in this Section 5.8(d)(ii) are required in order to assure
compliance with Section 4204 of ERISA, notify the Retirement Plan of the transactions
contemplated by this Agreement, and, if Section 4204 of ERISA is applicable, satisfy
the Retirement Plan that this transaction complies with the terms of Section 4204 of
ERISA. Any proposed notice or communication to the Retirement Plan pursuant to this
Section or subsection (iii) below shall be provided to Seller at least ten (10) days
before such notice is provided to the Retirement Plan, and the form of such notice
and communication shall be subject to Seller’s written approval, which approval shall
not be unreasonably withheld. Any notice from the Retirement Plan, including, but
not limited to, any notice of withdrawal liability, shall be provided to Seller
within ten (10) business days of the time it is provided to Buyer.
(iii) If Buyer withdraws from the Retirement Plan in a complete withdrawal or partial
withdrawal with respect to any employees covered by the Collective Bargaining
Agreement during the period from the Closing through the end of the Contribution
Period, Buyer shall notify Seller in writing (and shall provide Seller
with any and all information relevant to the obligations of Buyer and Seller with
respect thereto) and shall cause any resulting withdrawal liability to be timely
paid, and if such withdrawal occurs during the Contribution Period and Buyer fails to
pay such withdrawal liability in a timely manner to the Retirement Plan, Seller
agrees it will be secondarily liable for any withdrawal liability it would have had
to the Retirement Plan with respect to the operations (but for Section 4204 of
ERISA). Buyer shall indemnify, defend, protect and hold harmless Seller for any
withdrawal liability payments Seller is required to make on account of this
subsection (iii).
(iv) If at any time after the Closing and during the Contribution Period, a bond,
escrow or letter of credit is required for the Retirement Plan pursuant to Section
4204(a)(3) of ERISA, Buyer shall, at its sole cost and expense, post such bond,
escrow or letter of credit in an amount, for the period of time, and in a form that
complies with Section 4204(a)(3) (or obtain a variance from such bonding, escrow or
letter of credit requirement from the Retirement Plan or the Pension Benefit Guaranty
Corporation) and furnish proof of such compliance to Seller.
(f) Buyer’s obligations under this Section 5.8 shall survive the Closing.
ARTICLE VI
DEFAULT
| 6.1 | Default by Buyer. If Buyer defaults under this Agreement, Seller shall be entitled, as its sole remedy (without limiting Seller’s rights with respect to any indemnification obligations of Buyer under this Agreement or under Section 10.19 below), to terminate this Agreement and receive the Xxxxxxx Money as liquidated damages, it being agreed between the parties hereto that the actual damages to Seller in the event of such breach are impractical to ascertain and the amount of the Xxxxxxx Money is a reasonable estimate thereof. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT 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 DEFAULT UNDER THIS AGREEMENT ON THE PART OF BUYER. THE PARTIES ACKNOWLEDGE THAT THE PAYMENT OF SUCH LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLERS PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. |
Initials: Seller
Buyer T.C.F.
Nothing contained in this Section 6.1 shall limit or prevent Seller from (a)
asserting any legal or equitable claims against Buyer for Buyer’s obligations with respect
to any indemnification of Seller under this Agreement or obligation to pay attorneys’ fees
and other amounts under Section 10.19, or (b) enforcing any indemnity obligation of
Buyer under this Agreement or preclude Seller from obtaining a damage award in connection
therewith, or
(c) enforcing Buyer’s other obligations and liabilities which survive a termination of this
Agreement.
| 6.2 | Default by Seller. In the event that Seller fails to consummate this Agreement for any reason other than Buyer’s default or the permitted termination of this Agreement by Seller or Buyer as herein expressly provided, Buyer shall be entitled, as its sole remedy, either (a) to receive the return of the Xxxxxxx Money, which return shall operate to terminate this Agreement and release Seller from any and all liability hereunder, or (b) to enforce specific performance of Seller’s obligation to execute the documents required to convey the Property to Buyer, it being understood and agreed that the remedy of specific performance shall not be available to enforce any other obligation of Seller hereunder. Buyer expressly waives its rights to seek damages in the event of Seller’s default hereunder. Buyer shall be deemed to have elected to terminate this Agreement and receive back the Xxxxxxx Money if Buyer fails to file suit for specific performance against Seller in a court having jurisdiction in the county and state in which the Property is located, on or before 30 days following the date upon which Closing was to have occurred. Notwithstanding the foregoing, (a) nothing contained in this Section 6.3 shall limit or prevent Buyer from (i) asserting any legal or equitable claims against Seller for Buyer’s obligation to pay attorneys’ fees and other amounts under Section 10.19, or (ii) enforcing any indemnity obligation of Seller under this Agreement or preclude Buyer from obtaining a damage award in connection therewith, or (iii) enforcing Seller’s other obligations and liabilities which survive Closing or a termination of this Agreement, and (b) in the event that any such failure by Seller is of such a nature that specific performance as a remedy is not available as a matter of law, then, Buyer shall have the right, anything herein contained to the contrary notwithstanding, to damages against Seller on account of such failure to compensate Buyer for all of its third party out of pocket costs and expenses incurred in connection with the transaction contemplated hereby and this Agreement, but not in excess of the sum of One Hundred Thousand and No/100 Dollars ($100,000.00) and Buyer shall have the right to pursue an action for such damages in a court of competent jurisdiction. |
| 6.3 | Seller’s Right to Cure Defaults. Notwithstanding anything to the contrary in this Agreement, Buyer shall not have the right to exercise its remedies under Section 6.2 for a Seller default unless Buyer has provided written notice to Seller specifying in reasonable detail the nature of the Seller default, and Seller has not cured the same within thirty (30) days after Seller’s receipt of such notice (the “Seller Cure Period”), in which case the Closing shall be postponed until the date which is five (5) business days after the expiration of the Seller Cure Period. |
| 6.4 | Buyer’s Right to Cure Certain Defaults. Notwithstanding anything to the contrary contained in this Agreement, with respect to any default under this Agreement by Buyer other than a default in Buyer’s obligation to close the transaction contemplated hereunder on the Closing Date, Seller shall not have the right to exercise its remedies under Section 6.1 for any such Buyer default unless Seller has provided written notice to Buyer specifying in reasonable detail the nature of the Buyer default, and Buyer has not cured the same within 10 days after Buyer’s receipt of such notice. It is expressly understood and agreed that there shall be no cure period afforded Buyer and no need for Seller to provide any notice, written or otherwise, with respect to a default by Buyer in its obligation to close the transaction on the Closing Date, and in the event of such a default, Seller shall have the immediate right to exercise its remedies on account thereof provided in Section 6.1 above. |
ARTICLE VII
RISK OF LOSS
| 7.1 | Minor Damage. In the event of loss or damage to the Real Property or any portion thereof which is not “major” (as hereinafter defined), this Agreement shall remain in full force and effect provided Seller, at Seller’s option, performs any necessary repairs or assigns to Buyer all of Seller’s right, title and interest to any claims and proceeds Seller may have with respect to any casualty insurance policies or condemnation awards relating to the premises in question. In the event that Seller elects to perform repairs upon the Real Property, Seller shall use reasonable efforts to complete such repairs promptly and the Closing Date shall be extended a reasonable time in order to allow for the completion of such repairs. If Seller elects to assign a casualty claim to Buyer, the Purchase Price shall be reduced by an amount equal to the deductible amount under Seller’s insurance policy. Upon Closing, full risk of loss with respect to the Property shall pass to Buyer. |
| 7.2 | Major Damage. In the event of a “major” loss or damage to the Real Property, Buyer may terminate this Agreement by written notice to Seller, in which event the Xxxxxxx Money shall be returned to Buyer. If Buyer fails for any reason to deliver written notice of termination to Seller within ten (10) days after Seller sends Buyer written notice of the occurrence of major loss or damage, then Buyer shall be deemed to have elected to proceed with Closing, in which event Seller shall, at Seller’s option, either (a) perform any necessary repairs, or (b) assign to Buyer all of Seller’s right, title and interest to any claims and proceeds Seller may have with respect to any casualty insurance policies or condemnation awards relating to the premises in question. In the event that Seller elects to perform repairs upon the Real Property, Seller shall use reasonable efforts to complete such repairs promptly and the Outside Closing Date shall be extended a reasonable time in order to allow for the completion of such repairs. If Seller elects to assign a casualty claim to Buyer, the Purchase Price shall be reduced by an amount equal to the deductible amount under Seller’s insurance policy and Seller shall assign all of its rights to proceeds under the applicable policy with respect to any claim for the applicable loss. Upon Closing, full risk of loss with respect to the Property shall pass to Buyer. |
| 7.3 | Definition of “Major” Loss or Damage. For purposes of Sections 7.1 and 7.2, “major” loss or damage refers to the following: (a) loss or damage to the Real Property or any portion thereof such that the cost of repairing or restoring the premises in question to a condition substantially identical to that of the premises in question prior to the event of damage would be, in the opinion of an architect selected by Seller and reasonably approved by Buyer, equal to or greater than $2,500,000.00, and (b) any loss due to a condemnation which permanently and materially impairs the current use of the Real Property. If Buyer does not give notice to Seller of Buyer’s reasons for disapproving an architect within five (5) business days after receipt of notice of the proposed architect, Buyer shall be deemed to have approved the architect selected by Seller. |
ARTICLE VIII
COMMISSIONS
| 8.1 | Brokerage Commissions. Buyer acknowledges that Seller has procured the services of Eastdil Secured and Citigroup Global Markets Inc. (collectively, “Broker”) pursuant to a separate written agreement between Seller and Broker. Each party agrees that should any claim be made for brokerage commissions or finder’s fees by any broker or finder other than the Broker by, through or on account of any act or alleged act of said party or its representatives, said party will indemnify, defend, protect and hold the other party free and harmless from and against any and all loss, liability, cost, damage and expense in connection therewith. The provisions of this Section 8.1 shall survive Closing or earlier termination of this Agreement. |
ARTICLE IX
DISCLAIMERS AND WAIVERS
| 9.1 | No Reliance on Documents. Except as expressly set forth in Section 5.1 above, Seller makes no representation or warranty as to the truth, accuracy or completeness of any materials, data or information delivered by or on behalf of Seller or its brokers to Buyer in connection with the transaction contemplated hereby including, without limitation, the Reports and other Seller Due Diligence Materials. Buyer acknowledges and agrees that all materials, data and information delivered by Seller to Buyer in connection with the transaction contemplated hereby are provided to Buyer as a convenience only and that any reliance on or use of such materials, data or information by Buyer shall be at the sole risk of Buyer, except as otherwise expressly stated herein. Without limiting the generality of the foregoing provisions, Buyer acknowledges and agrees that (a) any environmental or other report with respect to the Property that is delivered by Seller to Buyer shall be for general informational purposes only, (b) Buyer shall not have any right to rely on any such report delivered by Seller to Buyer, but rather will rely on its own inspections and investigations of the Property and any reports commissioned by Buyer with respect thereto, and (c) neither Seller nor any affiliate of Seller nor the person or entity which prepared any such report delivered by Seller to Buyer shall have any liability to Buyer for any inaccuracy in or omission from any such report or other materials provide to Buyer in connection with this Agreement. |
| 9.2 | DISCLAIMERS. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 5.1 OF THIS AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, ZONING, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITION, UTILITIES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE PROPERTY WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR COMPLETENESS OF THE PROPERTY DOCUMENTS OR ANY |
| OTHER INFORMATION PROVIDED BY OR ON BEHALF OF SELLER TO BUYER, OR ANY OTHER MATTER OR THING REGARDING THE PROPERTY. BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY “AS IS, WHERE IS, WITH ALL FAULTS”, EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT. BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION, PROPERTY INFORMATION PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY AND ANY ACTUAL OR PROPOSED BUDGETS FOR THE REAL PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGER OF THE PROPERTY, OR ANY REAL ESTATE BROKER OR AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY SET FORTH IN THIS AGREEMENT. BUYER REPRESENTS TO SELLER THAT BUYER IS A SOPHISTICATED INSTITUTIONAL INVESTOR WITH SUBSTANTIAL EXPERIENCE AND EXPERTISE WITH HOTEL INVESTMENTS AND HAS CONDUCTED, OR WILL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS BUYER DEEMS NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT. UPON CLOSING, SUBJECT TO THE REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH HEREIN AND IN THE DOCUMENTS TO BE DELIVERED AT CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER’S INVESTIGATIONS, AND BUYER, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER’S OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH BUYER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER’S OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS, |
EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY. BUYER AGREES THAT SHOULD ANY
CLEANUP, REMEDIATION OR REMOVAL OF HAZARDOUS SUBSTANCES OR OTHER ENVIRONMENTAL CONDITIONS ON
THE PROPERTY BE REQUIRED AFTER THE CLOSING DATE, SUCH CLEAN-UP, REMOVAL OR REMEDIATION SHALL
BE THE RESPONSIBILITY OF AND SHALL BE PERFORMED AT THE SOLE COST AND EXPENSE OF BUYER.
The waivers and releases set forth in Sections 5.7(a) and (b) and in
the immediately preceding paragraph include claims of which Buyer is presently unaware or
which Buyer does not presently suspect to exist which, if known by Buyer, would materially
affect Buyer’s waiver or release of Seller and the other parties referenced in this Section.
Buyer specifically waives the provision of California Civil Code Section 1542, which
provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR EXPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR
HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”
Initials: Buyer T.C.F.
| 9.3 | Repairs, Reserves, and Capital Expenditures. Buyer acknowledges and agrees that except as provided in Section 5.4 of this Agreement, (a) Seller shall have no obligation to make any repairs, replacements, improvements or alterations to the Property or to expend any funds therefor, including, without limitation, any reserves that may be held for such purpose, and (b) Buyer shall not be entitled to a credit to the Purchase Price at Closing in the event capital expenditures actually made at the Hotel for any year are less than the budgeted amount as of the date of the Closing. |
| 9.4 | Effect and Survival of Disclaimers. Seller and Buyer acknowledge that the compensation to be paid to Seller for the Property takes into account that the Property is being sold subject to the provisions of this Article IX. Seller and Buyer agree that the provisions of this Article IX shall survive Closing. |
ARTICLE X
MISCELLANEOUS
| 10.1 | Confidentiality. Subject to Section 10.2 below, this Agreement, the terms hereof and the Property Information shall be treated in accordance with that certain Confidentiality Agreement dated July 21, 2010 executed by Buyer in favor of Seller (the “Confidentiality Agreement”). The provisions of this Section 10.1 shall survive the Closing. |
| 10.2 | Public Disclosure. Prior to Closing, any release to the public of information with respect to the sale contemplated herein or any matters set forth in this Agreement will be made only in the form approved by Buyer and Seller and their respective counsel. Upon the Closing, Seller and Buyer shall issue a joint press release announcing the Closing, in a form to be mutually agreed upon by Seller and Buyer. The provisions of this Section 10.2 shall survive |
| the Closing. Notwithstanding the foregoing, at any time following the Effective Date, Buyer may file with the United States Securities Exchange Commission (“SEC”) information regarding the transaction contemplated by this Agreement (including a copy of this Agreement) to the extent required by law. |
| 10.3 | Discharge of Obligations. The acceptance of the Deed by Buyer shall be deemed to be a full performance and discharge of every representation and warranty made by Seller herein and every agreement and obligation on the part of Seller to be performed pursuant to the provisions of this Agreement, except those which are herein specifically stated to survive Closing. |
| 10.4 | Assignment. Buyer may not assign its rights under this Agreement without first obtaining Seller’s written approval which may be given or withheld in Seller’s sole discretion; provided, however, that Buyer may assign this Agreement to an Affiliate (as defined below), provided that Buyer remains primarily liable for all obligations of Buyer hereunder assigned to such Affiliate by Buyer. As used herein, “Affiliate” means with respect to a party or other entity any entity controlling, controlled by or under common control with such party or other entity or an owner of such party or other entity. |
| 10.5 | Notices. Any notice pursuant to this Agreement shall be given in writing by (a) personal delivery, or (b) reputable overnight delivery service with proof of delivery, or (c) United States Mail, postage prepaid, registered or certified mail, return receipt requested, or (d) legible facsimile or e-mail transmission completed before 5:00 P.M. (local time at the Real Property) on a business day sent to the intended addressee at the address set forth below, or to such other address or to the attention of such other person as the addressee shall have designated by written notice sent in accordance herewith, and shall be deemed to have been given either at the time of personal delivery, or, in the case of expedited delivery service or mail, as of the date of first attempted delivery at the address and in the manner provided herein, or, in the case of facsimile or e-mail transmission, as of the date of the facsimile or e-mail transmission provided that an original of such facsimile or e-mail is also sent to the intended addressee by means described in clauses (a), (b) or (c) above. Unless changed in accordance with the preceding sentence, the addresses for notices given pursuant to this Agreement shall be as follows: |
If to Seller:
Regis Properties, L.L.C.
c/o Kor Realty Group, LLC
000 Xxxxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxx
Facsimile no. (000) 000-0000
E-mail: Xxxx.Xxxxx@xxxxxxxxxxx.xxx
c/o Kor Realty Group, LLC
000 Xxxxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxx
Facsimile no. (000) 000-0000
E-mail: Xxxx.Xxxxx@xxxxxxxxxxx.xxx
With a copy to:
Xxxxxx-Xxxxx Management West, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Facsimile no. (000) 000-0000
E-mail: XXxxxxxxxx@xxxxxxxxxxx.xxx
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Facsimile no. (000) 000-0000
E-mail: XXxxxxxxxx@xxxxxxxxxxx.xxx
With a copy to:
Xxxxxxxxxx, Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Facsimile no. (000) 000-0000
E-mail: Xxxxx.Xxxxxxxxxx@xxxxxx.xxx
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Facsimile no. (000) 000-0000
E-mail: Xxxxx.Xxxxxxxxxx@xxxxxx.xxx
If to Buyer:
c/o Pebblebrook Hotel Trust
0 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile no. (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxxxxxxxxx.xxx
0 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile no. (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxxxxxxxxx.xxx
With a copy to:
Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx LLP
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attention: J. Xxxx Xxxxxxxxx, Esq.
Facsimile no. (000) 000-0000
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attention: J. Xxxx Xxxxxxxxx, Esq.
Facsimile no. (000) 000-0000
E-mail: xxxxxxxxxx@xxxxxxxx.xxx
| 10.6 | Modifications. This Agreement cannot be changed orally, and no executory agreement shall be effective to waive, change, modify or discharge it in whole or in part unless such executory agreement is in writing and is signed by the parties against whom enforcement of any waiver, change, modification or discharge is sought. |
| 10.7 | Calculation of Time Periods; Time is of the Essence. Unless otherwise specified, in computing any period of time described in this Agreement, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is a Saturday, Sunday or legal holiday under the laws of the State in which the Real Property is located, in which event the period shall run until the end of the next day which is neither a Saturday, Sunday or legal holiday. The final day of any such period shall be deemed to end at 5:00 P.M., Los Angeles time. Time is of the essence with respect to each and every term and provision of this Agreement. |
| 10.8 | Successors and Assigns. Subject to the limitations on assignment set forth in Section 10.4 above, the terms and provisions of this Agreement are to apply to and bind the permitted successors and assigns of the parties hereto. |
| 10.9 | Entire Agreement. This Agreement, together with the Exhibits and the Schedules and the Confidentiality Agreement contains the entire agreement between the parties pertaining to the subject matter hereof and fully supersedes all prior written or oral agreements and understandings between the parties pertaining to such subject matter. |
| 10.10 | Further Assurances. Each party agrees that it will without further consideration execute and deliver such other documents and take such other action, whether prior or subsequent to Closing, as may be reasonably requested by the other party to consummate more effectively the purposes or subject matter of this Agreement. Without limiting the generality of the foregoing, Buyer shall, if requested by Seller, (a) execute acknowledgments of receipt with respect to any materials delivered by Seller to Buyer with respect to the Property, and (b) obtain sellers’ permits for any sales activities conducted at the Property prior to Closing and/or obtain “sale for resale certificates” for any Personal Property that may be sold after the Closing. The provisions of this Section 10.10 shall survive Closing. |
| 10.11 | Counterparts; Facsimile Signatures. This Agreement may be executed in counterparts, and all such executed counterparts shall constitute the same agreement. It shall be necessary to account for only one such counterpart in proving this Agreement. In order to expedite the transaction contemplated herein, electronic or facsimile signatures may be used in place of original signatures on this Agreement. Seller and Buyer intend to be bound by the signatures on the electronic or facsimiled document, are aware that the other party will rely on the electronic or facsimiled signatures, and hereby waive any defenses to the enforcement of the terms of this Agreement based on the form of signature. |
| 10.12 | Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall nonetheless remain in full force and effect. |
| 10.13 | Applicable Law. THIS AGREEMENT IS PERFORMABLE IN THE STATE IN WHICH THE LAND IS LOCATED AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE SUBSTANTIVE FEDERAL LAWS OF THE UNITED STATES AND THE LAWS OF SUCH STATE. SELLER AND BUYER HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE IN WHICH THE LAND IS LOCATED IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN A STATE OR FEDERAL COURT SITTING IN THE STATE IN WHICH THE LAND IS LOCATED. BUYER AND SELLER AGREE THAT THE PROVISIONS OF THIS SECTION 10.13 SHALL SURVIVE THE CLOSING OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT. |
| 10.14 | No Third Party Beneficiary. The provisions of this Agreement and of the documents to be executed and delivered at Closing are and will be for the benefit of Seller and Buyer only |
| and are not for the benefit of any third party, and accordingly, no third party shall have the right to enforce the provisions of this Agreement or of the documents to be executed and delivered at Closing. |
| 10.15 | Exhibits and Schedules. The following schedules and exhibits attached hereto shall be deemed to be an integral part of this Agreement: |
| Schedule 1.1(a) | - | Legal Description of the Land | ||||
| Schedule 1.1(e) | - | Operating Agreements | ||||
| Schedule 1.1(e)(ii) | - | Equipment Leases | ||||
| Schedule 1.1(h) | - | List of Leases | ||||
| Schedule 1.2 | - | Excluded Property | ||||
| Schedule 3.1 | Seller’s Documents | |||||
| Schedule 3.2 | -Reports | |||||
| Schedule 4.4.11 | - | Vouchers | ||||
| Schedule 5.1(c) | - | Litigation | ||||
| Schedule 5.1(e) | - | Property Violations | ||||
| Exhibit A | - | Grant Deed | ||||
| Exhibit B | - | Xxxx of Sale | ||||
| Exhibit C | - | Assignment and Assumption of Operating Agreements and Intangibles | ||||
| Exhibit D | - | Assignment and Assumption of Leases | ||||
| Exhibit E | - | FIRPTA Certificate | ||||
| Exhibit F | - | ERISA Certificate | ||||
| Exhibit G | - | Food and Beverage Management Agreement | ||||
| Exhibit H | - | Balconies/Artwork Holdback Agreement | ||||
| Exhibit I | - | Parking Holdback Agreement |
| 10.16 | Captions. The Section headings appearing in this Agreement are for convenience of reference only and are not intended, to any extent and for any purpose, to limit or define the text of any Section or any subsection hereof. | |
| 10.17 | Construction. The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any exhibits, schedules or amendments hereto. Singular words shall connote the plural as well as the singular, and plural words shall connote the singular as well as the plural, and the masculine shall include the feminine and the neuter, as the context may require. | |
| 10.18 | Termination of Agreement. It is understood and agreed that if either Buyer or Seller terminates this Agreement pursuant to a right of termination granted hereunder, such termination shall operate to relieve Seller and Buyer from all obligations under this Agreement, except for such obligations as are specifically stated herein to survive the termination of this Agreement. |
| 10.19 | Attorneys’ Fees. If any action or proceeding is commenced by either party to enforce their rights under this Agreement or to collect damages as a result of the breach of any of the provisions of this Agreement, the prevailing party in such action or proceeding, including any bankruptcy, insolvency or appellate proceedings, shall be entitled to recover all reasonable costs and expenses, including, without limitation, reasonable attorneys’ fees and court costs, in addition to any other relief awarded by the court. | |
| 10.20 | Waiver of Jury Trial. Seller and Buyer, to the extent they may legally do so, hereby expressly waive any right to trial by jury of any claim, demand, action, cause of action, or proceeding arising under or with respect to this Agreement, or in any way connected with, or related to, or incidental to, the dealings of the parties hereto with respect to this Agreement or the transactions related hereto or thereto, in each case whether now existing or hereafter arising, and irrespective of whether sounding in contract, tort, or otherwise. To the extent they may legally do so, Seller and Buyer hereby agree that any such claim, demand, action, cause of action, or proceeding shall be decided by a court trial without a jury and that any party hereto may file an original counterpart or a copy of this Section with any court as written evidence of the consent of the other party or parties hereto to waiver of its or their right to trial by jury. | |
| 10.21 | No Waiver. Failure of either party at any time to require performance of any provision of this Agreement shall not limit the party’s right to enforce the provision. Waiver of any breach of any provision shall not be a waiver of any succeeding breach of the provision or a waiver of the provision itself or any other provision. | |
| 10.22 | No Reservation of Property. The preparation and/or delivery of unsigned drafts of this Agreement shall not create any legally binding rights in the Property and/or obligations of the parties, and Buyer and Seller acknowledge that this Agreement shall be of no effect until it is duly executed by both Buyer and Seller. Seller and Buyer understand and agree that Seller shall not have the right to continue to market the Property and/or to negotiate with other potential Buyers of the Property until the termination of this Agreement at which xxxx Xxxxxx shall have all such rights. | |
| 10.23 | No Recordation. Subject to Section 10.2 above and any filings required to be made by Buyer with the SEC, Buyer shall not record this Agreement, nor any memorandum or other notice of this Agreement, in any public records. | |
| 10.24 | Liability under Deed. Buyer agrees that if Buyer has any right or claim against Seller pursuant to the warranties in the Deed, Buyer shall exhaust all of its rights and remedies against the Title Company pursuant to the Title Policy prior to bringing any claim or action against Seller in respect of such warranties. | |
| 10.25 | Continuing Access to Books and Records. Throughout the period expiring on the date two (2) years from and after Closing, Seller shall make all of all books and records of Seller and the Property for the years ended December 31, 2007, 2008 and 2009 and interim periods as required by the rules and regulations of the SEC available to Buyer and Buyer’s independent accountants for inspection, copying and audit at the expense of the Buyer. Seller shall provide Buyer and/or its independent accountant with copies of, or access to, such factual information, accounting records and financial information as may be reasonably requested |
| by Buyer or its auditors, and in the possession or control of Seller, to enable Buyer or its affiliates to file reports or registration statements in compliance with the rules and regulations of the SEC. Seller shall also, upon request, supply to Buyer letters of representation to such accountants, in reasonable form and substance. This Section 10.25 shall survive the Closing. | ||
| 10.26 | Like-Kind Exchange. Notwithstanding anything to the contrary in this Agreement, Buyer acknowledges and agrees that Seller shall have the right at Closing, in lieu of receiving the Purchase Price for the sale of the Property, to exchange the Property (the “Tax-Free Exchange”) in a transaction intended to qualify as a tax-free exchange under Section 1031 of the Internal Revenue Code of 1986, as amended from time to time, and any regulations, rulings and guidance issued by the Internal Revenue Service (collectively, the “Code”). If Seller elects to effect a Tax-Free Exchange pursuant to this Section 10.25, Seller shall provide written notice to Buyer prior to Closing, in which case Seller shall enter into an exchange agreement and other exchange documents with a “qualified intermediary” (as defined in Treas. Reg. § 1.1031(k)-1(g)(4) of the Code) (the “Exchange Party”), pursuant to which Seller shall assign all of its right, title and interest under this Agreement to the Exchange Party. Buyer shall execute and deliver such documents as may be required to complete the transactions contemplated by the Tax-Free Exchange which are in form and substance reasonably acceptable to Buyer, and otherwise cooperate with Seller in all reasonable respects to effect the Tax-Free Exchange. Buyer agrees that if Seller elects to effect a Tax-Free Exchange pursuant to this Section 10.25, at Closing, Buyer shall pay the Purchase Price to the Exchange Party and direct Escrow Agent to disburse the Xxxxxxx Money to the Exchange Party. Notwithstanding the foregoing in this Section 10.25, the Tax-Free Exchange shall not diminish Buyer’s rights, nor increase Buyer’s liabilities or obligations, under this Agreement. Seller shall pay for all fees, costs and expenses in connection with the Tax-Free Exchange. | |
| 10.27 | Binding Effect. This Agreement shall not be binding in any way upon Seller unless and until Seller shall execute and deliver the same to Buyer. |
[Signature pages follow]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
Effective Date.
| SELLER: | ||||
| REGIS PROPERTIES, L.L.C., a Delaware limited liability company |
||||
| By: | Regis Properties Mezzanine, LLC, a Delaware limited liability company, its Managing Member |
|||
| By: | Regis Properties Holding Company, LLC, a Delaware limited liability company, its Managing Member |
| By: | Xxxxx Partners II, L.L.C., a Delaware limited liability company, its Managing Member |
| By: | Bronze Corp., an Illinois corporation its Managing Member |
| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | Partner | |||
S - 1
| BUYER: BLUE DEVILS OWNER LLC, a Delaware limited liability company |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Vice President | |||
The undersigned acknowledges the receipt of the Xxxxxxx Money, subject to collection, and agrees to
hold and disburse same strictly in accordance with the terms of this Agreement.
| ESCROW AGENT: CHICAGO TITLE COMPANY |
||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxxxxx X. Xxxxxxxxx | |||
| Title: | AVP/Senior Commercial Escrow Officer | |||
S - 2
Schedule 1.1(a)
LEGAL DESCRIPTION OF THE LAND
PARCEL A:
PARCEL 0 XX XXXXXX XXX XX. 00000, XX THE CITY OF SANTA XXXXXX, COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA, AS PER MAP FILED IN BOOK 171 PAGES 16 THROUGH 19 INCLUSIVE OF PARCEL MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL B:
NON-EXCLUSIVE EASEMENTS FOR UTILITY FACILITIES, AND FOR ACCESS, INGRESS AND EGRESS FOR MAINTENANCE
AND REPAIR AND NECESSARY SUPPORT OF UNDERGROUND FOOTINGS, AS DEFINED AND CREATED BY THAT CERTAIN
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS, EASEMENTS, LIMITATIONS AND RESERVATIONS
RECORDED NOVEMBER 1, 1984 AS INSTRUMENT NO. 00-0000000, OFFICIAL RECORDS, WITHIN, OVER AND ACROSS
THE FOLLOWING DESCRIBED LAND:
PARCEL 0 XX XXXXXX XXX XX. 00000, XX THE CITY OF SANTA XXXXXX, COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA, AS PER MAP FILED IN BOOK 171 PAGES 16, 17, 18 AND 19 OF PARCEL MAPS, IN THE OFFICE OF
THE COUNTY RECORDER OF SAID COUNTY.
Schedule 1.1(a)
Page 1
Schedule 1.1(e)(i)
OPERATING AGREEMENTS
OPERATING AGREEMENTS
| Vendor | Service | |
AC and Sons Landscaping
|
Lawn Maintenance | |
Action Duct Cleaning
|
Cleaning the grease traps in the kitchen | |
Aptech Computer Systems, Inc
|
License and Hosting Agreement | |
Bel Air Internet Commercial
|
High speed internet, roof lease for equipment | |
BMI Music Performance
|
Music licensing | |
Carrier
|
Cooling tower & chiller service | |
Changing Realities
|
Sustainability contract | |
Chem Pro
|
Water treatment equipment and maintenance | |
Coastal Carbonic
|
CO2, helium and propane providers | |
Cross Check
|
Check center | |
DMX Inc
|
Overhead music in various areas | |
Dumbell
|
Fitness equipment maintenance | |
Ecolab
|
Dishwasher Maintenance | |
Elavon
|
Credit card batching and settlement | |
Galaxy Systems
|
Computer software and hardware support, license and services | |
GBC Blue
|
GBC computers in Link Café Computer hardware, installation and support | |
GBC Blue
|
Installation of computers in business center | |
JDL
|
Pump Service |
Schedule 1.1(e)(i)
Page 1
| Vendor | Service | |
Lodgenet
|
FTG television service in guestrooms | |
Metropolis Profit Watch
|
Support service for the ProfitWatch-Extension 100 Call Accounting Software | |
Mission Linen
|
Linen rental and laundry | |
Orkin Contract
|
Pest control | |
PGS
|
Night cleaning contract | |
Pico Cleaners
|
Dry cleaning | |
Premier Linen
|
Laundry service | |
PSAV
|
Audiovisual equipment and services | |
Quality Parking Services
|
Parking facility management | |
ScentAir
|
Scent DIffuser | |
Servidyne
|
Monitor and report cumulative cost/savings related to energy management | |
Special T Water Systems
|
Water softner | |
Taxi! Taxi!
|
Licensing one designated parking spot for Taxi! Taxi! Cab | |
Thyssenkrupp Elevator Corporation
|
Elevator maintenance | |
Tribeca Contract
|
Security Services | |
West Sanitation
|
Sanitation Services |
Schedule 1.1(e)(i)
Page 2
Schedule 1.1(e)(ii)
EQUIPMENT LEASES
| 1. | CBE, five (5) printers/copiers |
| 2. | Ecolab, dishwasher |
| 3. | Midway, van rental |
| 4. | Xxxxx-Xxxxxx, vertical baler |
Schedule 1.1(e)(ii)
Page 1
Schedule 1.1(h)
LIST OF LEASES
LIST OF LEASES
| 1. | Rooftop lease to BelAirInternet (as successor-in-interest to NoCat Networks) dated as of November 18th, 2003. |
| 2. | License Agreement with Taxi! Taxi! Dated as of April 1st, 2006. |
| 3. | Rooftop Lease with Option with T-Mobile West Corporation dated December 28, 2009. |
Schedule 1.1(h)
Page 1
Schedule 1.2
EXCLUDED PROPERTY
EXCLUDED PROPERTY
| 1. | xxxxxxxxxxxxxxxxxxx.xxx, website |
| 2. | xxxxxxxxxxxxxxx.xxx, website |
| 3. | Delphi and Meeting Broker, New Market tools software |
| 4. | EZ Yield software |
Schedule 1.2
Page 1
Schedule 3.1
SELLER’S DOCUMENTS
SELLER’S DOCUMENTS
| CLASSIFICATION/DESCRIPTION | ||
A.
|
OPERATING STATEMENTS | |
1
|
2010 Operating Reforecast (most recent) | |
2
|
2010 YTD Detailed Operating Statement | |
3
|
2010 Detailed Operating Budget (detailed by month) | |
4
|
2010 Balance Sheet and General Ledger Report | |
5
|
2009 Year-End Detailed Operating Statement | |
6
|
2009 Operating Statement (detailed by month) | |
7
|
2009 Balance Sheet and General Ledger Report | |
0
|
0000-0000 Year-End Detailed Operating Statements | |
9
|
2008 Operating Statement (detailed by month) | |
10
|
Audited Year-End Financial Statements — 2005-2009, if available | |
B.
|
CAPITAL EXPENDITURES | |
1
|
2010 Capital Expenditure Budget | |
0
|
0000-0000 Capital Expenditure History — Actual | |
3
|
Three, Five and Ten Year Capital Expenditure Plans | |
4
|
Product Improvement Plan (PIP), if necessary and available | |
C.
|
STAR REPORTS | |
1
|
2010 YTD STAR Report | |
2
|
2010 Monthly STAR Reports | |
3
|
2007 — 2009 Year-End STAR Reports | |
D.
|
MARKETING PLAN/MARKET MIX/PACE | |
1
|
2010 Marketing/Business Plan | |
2
|
Channel Production Report (Brand Central Res., Website, GDS, OTA, etc.) | |
0
|
0000-0000 Detailed Market Mix/Market Segmentation | |
4
|
2010 — 2012 Group Pace Reports | |
5
|
2010 Transient Pace Reports | |
6
|
List of Top Accounts by ADR and Volume — Three Year History | |
7
|
List of any promotions, coupons, etc. resulting in discounted rates | |
8
|
Advertising Contracts | |
9
|
Hotelligence Reports — prior 2 years | |
10
|
Hotel Marketing Materials — brochures, sales kit, photographs | |
11
|
Website Reviews (XxxxXxxxxxx.xxx, etc.) |
Schedule 3.1
Page 1
| CLASSIFICATION/DESCRIPTION | ||
E.
|
AGREEMENTS | |
1
|
Purchase & Sale Agreement (with Exhibits and Schedules) | |
2
|
Management Agreement (including all Amendments/ Right of First Offer/Refusal) | |
3
|
Franchise Agreement (Right of First Offer/Refusal) | |
4
|
Union/Collective Bargaining Agreements, if applicable | |
F.
|
LEASES/AGREEMENTS | |
1
|
Summary (and copies) of all equipment leases (cars, copiers, etc.) | |
2
|
Summary (and copies) of all service, vendor and maintenance contracts | |
3
|
Summary (and copies) of all easements, shared spaces, etc. | |
4
|
Laundry/Linen Contracts | |
5
|
Credit Card Contracts | |
6
|
Parking/Valet Agreements | |
7
|
AV Agreements | |
G.
|
TITLE/SURVEY | |
1
|
Copy of Existing Survey (certification) | |
H.
|
REAL ESTATE TAXES & INSURANCE | |
0
|
0000-0000 Real Estate Tax Bills | |
0
|
0000-0000 Personal Property Tax Bills | |
3
|
Copy of Insurance certificates (types and coverage) | |
4
|
Loss Run Reports — GL and Property | |
5
|
Copy of Sales Tax Bills for previous Three years | |
I.
|
PROPERTY CONDITION/ENVIRONMENTAL | |
1
|
Previous Property Condition Report | |
2
|
Previous Phase I Environmental Report (Phase II is applicable) | |
3
|
Asbestos O&M Plan, if applicable | |
4
|
Seismic/PML, if applicable | |
5
|
Elevator Inspection Reports | |
6
|
Fire & Life Safety Issues | |
J.
|
CERTIFICATES/WARRANTIES | |
1
|
Certificate of Occupancy | |
2
|
Summary (and copies) of all warranties/guarantees (roof, HVAC, etc.) | |
K.
|
LICENSES/PERMITS | |
1
|
Liquor License | |
2
|
Summary (and copies) of all licenses (including Renewal Dates and Fees) | |
3
|
Summary (and copies) of all permits (including Renewal Dates and Fees) |
Schedule 3.1
Page 2
| CLASSIFICATION/DESCRIPTION | ||
L.
|
HUMAN RESOURCES | |
1
|
Organizational Chart | |
2
|
Copy of Payroll | |
3
|
Summary of all insurance plans — medical, dental, vision, disability, life, other | |
4
|
Copy of Employee handbooks, manuals, etc. | |
5
|
Competitive Wage Surveys | |
6
|
Employee Turnover History | |
7
|
Employee Satisfaction Survey | |
8
|
Description of bonus programs for all employees | |
9
|
Worker’s Compensation claims and payouts history — last 5 years | |
M.
|
OPERATIONS/OTHER | |
1
|
A/R Receivable Report | |
2
|
A/P Aging Report | |
3
|
Advance Deposits (detailed list) | |
4
|
Prepaid Expenses (detailed list) | |
5
|
Copies of Utility Bills (electric, gas/steam, water, phone) — last 3 years | |
6
|
Schedule of club/trade/organization memberships | |
7
|
Current Status of PMS System | |
8
|
Summary of technology/computer systems | |
9
|
List of Software Licenses, Manuals and Proprietary Information | |
10
|
Inventories — personal property, consumable, supply, laundry, safe deposits, artwork | |
11
|
Franchise/Management Inspection Reports | |
12
|
Guest Satisfaction Survey — Scores — GSS/SALT Reports | |
13
|
Offering Memorandum (if available) |
Schedule 3.1
Page 3
Schedule 3.2
REPORTS
REPORTS
| 1. | Phase I Environmental Site Assessment, dated as of December 7, 2005, prepared by IVI Due Diligence Services, Inc. |
| 2. | Property Condition Report, dated as of December 6, 2005, prepared by IVI Due Diligence Services, Inc. |
| 3. | Seismic Risk Assessment, dated as of December 6, 2005, prepared by IVI Due Diligence Services, Inc. |
| 4. | ALTA Survey (dated 3/5/2008, as updated on 8/17/2010) |
Schedule 3.2
Page 1
Schedule 4.4.11
VOUCHERS
[SEE ATTACHED]
VOUCHERS
[SEE ATTACHED]
Schedule 4.4.11
Page 1
Schedule 5.1(c)
LITIGATION
LITIGATION
None.
Schedule 5.1(c)
Page 1
Schedule 5.1(e)
PROPERTY VIOLATIONS
PROPERTY VIOLATIONS
None.
Schedule 5.1(e)
Page 1
EXHIBIT A
GRANT DEED
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
WHEN RECORDED MAIL TO:
______________________________
______________________________
______________________________
______________________________
______________________________
GRANT DEED
| The undersigned grantor declares: | ||
| Documentary transfer tax is shown by an unrecorded separate affidavit pursuant to R & T Code §11932 |
| þ computed on full value of property conveyed, or | ||
| o computed on full value, less value of liens and encumbrances remaining at time of sale |
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, REGIS PROPERTIES, L.L.C.,
a Delaware limited liability company (“Grantor”), hereby GRANTS to
___________________________, a _________________ (the “Grantee”), all improvements located
on certain land located in the City and County of Los Angeles, California, and being more
particularly described in Schedule 1 attached hereto and incorporated herein by reference,
together with Grantor’s right, title and interest, if any, in and to the land on which such
improvements are located and any and all easements and appurtenances pertaining thereto, subject to
all exceptions to title disclosed by the public record.
Exhibit A
Page 1
IN WITNESS WHEREOF, the undersigned has executed this Grant Deed dated as of
____________________, 2010.
| REGIS PROPERTIES, L.L.C., a Delaware limited liability company |
||||
| By: | Regis Properties Mezzanine, LLC, | |||
| a Delaware limited liability company, | ||||
| its Managing Member | ||||
| By: | Regis Properties Holding Company, LLC, | |||
| a Delaware limited liability company, | ||||
| its Managing Member | ||||
| By: | Xxxxx Partners II, L.L.C., | |||
| a Delaware limited liability company, | ||||
| its Managing Member | ||||
| By: | Bronze Corp., | |||
| an Illinois corporation | ||||
| its Managing Member | ||||
| By: | ___________________ | |||
| Name: | ___________________ | |||
| Title: | ___________________ | |||
Exhibit A
Page 2
SCHEDULE 1 TO EXHIBIT A
LEGAL DESCRIPTION
LEGAL DESCRIPTION
Exhibit A
Page 3
ACKNOWLEDGMENT
ACKNOWLEDGMENT
State of California
County of ____________________
County of ____________________
On ______________________ before me, ______________________________________________________________,
(here insert name and title of the officer)
Personally appeared ___________________________________________________________________________________
| , | ||
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature ________________________
(Seal)
Exhibit A
Page 4
EXHIBIT B
XXXX OF SALE
For valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
______________, a _________________ (“Seller”), in connection with the sale of
certain real property located in Los Angeles County, California, which is more particularly
described in the Purchase Agreement (as defined below), hereby grants, assigns, transfers, conveys
and delivers to _________________, ___________________, without recourse and without any
representation or warranty whatsoever, express or implied, other than as set forth in a certain
Purchase and Sale Agreement and Joint Escrow Instructions dated ___________, 2010 pursuant to which
this Xxxx of Sale is given, all of Seller’s right, title and interest in and to the “Personal
Property” and “Consumable Inventory”, as such terms are defined in that certain Agreement of
Purchase and Sale and Escrow Instructions dated as of ____________, 2010, between Seller and
_________________________, as amended from time to time. This Xxxx of Sale shall be governed by
the laws of the State of California.
IN WITNESS WHEREOF, Seller has executed this Xxxx of Sale as of ______________, 2010.
| ________________________, | ||||
| a ______________________ | ||||
| By: | ________________________________ | |||
| Name: | ___________________________ | |||
| Title: | ___________________________ | |||
Exhibit B
Page 1
EXHIBIT C
ASSIGNMENT AND ASSUMPTION OF OPERATING
AGREEMENTS AND INTANGIBLES
AGREEMENTS AND INTANGIBLES
THIS ASSIGNMENT AND ASSUMPTION OF OPERATING AGREEMENTS AND INTANGIBLES (this
“Assignment”) is made as of ________________, 2010, by ___________________, a
___________________ (“Seller”), in favor of ____________________, a ________________
(“Buyer”).
RECITALS
A. Seller is the owner of certain property commonly known as the “Sheraton Xxxxxxx” located in
the County of Los Angeles, State of California.
B. Seller and Buyer, have entered into that certain Purchase and Sale Agreement and Escrow
Instructions dated as of _______ __, 2010 (as amended, the “Purchase Agreement”), pursuant
to which Seller has agreed to sell and Buyer has agreed to purchase the real property described in
Exhibit A attached thereto and the improvements located thereon, on the terms and
conditions stated in the Purchase Agreement. All terms not otherwise defined herein shall have the
meaning assigned to them in the Purchase Agreement.
C. Pursuant to the Purchase Agreement, Seller has agreed to assign to Buyer all of Seller’s
right, title and interest to (a) the Operating Agreements and (b) the Intangibles.
NOW, THEREFORE, Seller and Buyer agree as follows:
1. Assignment. Seller hereby sells, assigns, transfers and conveys to Buyer, without
recourse and without representation or warranty (except to the extent expressly provided in the
Purchase Agreement), all of Seller’s right, title and interest in and to (a) the Operating
Agreements and (b) the Intangibles.
2. Assumption. Buyer hereby assumes the benefits of Seller and assumes and agrees to
be bound by all of the covenants, obligations, liabilities, and burdens of Seller under or in
connection with (a) the Operating Agreements and (b) the Intangibles that arise or accrue from and
after the date of this Assignment.
3. Indemnity. Seller hereby indemnifies, agrees to defend and holds harmless Buyer of
and from any and all loss, cost, damage, liability and expense, including reasonable attorneys’
fees and costs, which may be incurred by Buyer on account of any claims made by any vendors under
the Operating Agreements for the breach thereof relating to acts or omissions occurring prior to
the date hereof. The foregoing indemnity of Seller shall be subject to the limitation set forth in
Section 5.3 of the Purchase Agreement as if claims made under the foregoing were for breach
of a warranty and representation set forth in such Section 5.3. Buyer hereby indemnifies,
agrees to defend and holds harmless Seller of and from any and all loss, cost, damage, liability
and expense, including reasonable attorneys’ fees and costs, which may be incurred by Seller on
account of any claims made by any vendors under the Operating Agreements for the breach thereof
relating to acts or omissions occurring on and after the date hereof.
Exhibit C
Page 1
4. Successors. This Assignment shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, legal representatives, successors and assigns.
5. Governing Law. This Assignment shall be governed by the laws of the State of
California.
6. Attorneys’ Fees. If any action or proceeding is commenced by either party to
enforce their rights under this Assignment or to collect damages as a result of the breach of any
of the provisions of this Assignment, the prevailing party in such action or proceeding, including,
without limitation, any bankruptcy, insolvency or appellate proceedings, shall be entitled to
recover all reasonable costs and expenses, including, without limitation, reasonable attorneys’
fees and court costs, in addition to any other relief awarded by the court.
7. Counterparts. This Assignment may be executed in counterparts, each of which shall
be deemed an original, and both of which together shall constitute one and the same instrument.
8. Further Assurances. Seller and Buyer agree to execute such other documents and
perform such other acts as may be reasonably necessary or proper and usual to effect this
Assignment.
IN WITNESS WHEREOF, Buyer and Seller have executed this Assignment as of the date first above
written.
| SELLER: |
||||
| ___________________________, | ||||
| ___________________________ | ||||
| By: | ||||
| Name: | ||||
| Its: | ||||
| BUYER: |
||||
| _______________________, | ||||
| a ______________________ | ||||
| By: | ||||
| Name: | ||||
| Its: | ||||
Exhibit C
Page 2
EXHIBIT D
ASSIGNMENT AND ASSUMPTION OF LEASES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this “Assignment”) is made as of
_________________, 2010, by ___________________, a ___________________ (“Seller”), in favor
of ____________________, a ________________ (“Buyer”).
RECITALS
A. Seller is the owner of certain property commonly known as the “Sheraton Xxxxxxx” located in
the County of Los Angeles, State of California.
B. Seller and Buyer, have entered into that certain Purchase and Sale Agreement and Escrow
Instructions dated as of _______ __, 2010 (as amended, the “Purchase Agreement”), pursuant
to which Seller has agreed to sell and Buyer has agreed to purchase the real property described in
Exhibit A attached thereto and the improvements located thereon, on the terms and
conditions stated in the Purchase Agreement. All terms not otherwise defined herein shall have the
meaning assigned to them in the Purchase Agreement.
C. Pursuant to the Purchase Agreement, Seller has agreed to assign to Buyer all of Seller’s
right, title and interest to those certain leases described in Exhibit A attached hereto
(collectively, the “Leases”).
NOW, THEREFORE, Seller and Buyer agree as follows:
1. Assignment. Seller hereby sells, assigns, transfers and conveys to Buyer, without
recourse and without representation or warranty (except to the extent expressly provided in the
Purchase Agreement), all of Seller’s right, title and interest in and to the Leases.
2. Assumption. Buyer hereby assumes the benefits of Seller and assumes and agrees to
be bound by all of the covenants, obligations, liabilities, and burdens of Seller under the Leases
that arise or accrue from and after the date of this Assignment.
3. Indemnity. Seller hereby indemnifies, agrees to defend and holds harmless Buyer of
and from any and all loss, cost, damage, liability and expense, including reasonable attorneys’
fees and costs, which may be incurred by Buyer on account of any claims made by any of the tenants
under the Leases for the breach thereof relating to acts or omissions occurring prior to the date
hereof. The foregoing indemnity of Seller shall be subject to the limitation set forth in
Section 5.3 of the Purchase Agreement as if claims made under the foregoing were for breach
of a warranty and representation set forth in such Section 5.3. Buyer hereby indemnifies,
agrees to defend and holds harmless Seller of and from any and all loss, cost, damage, liability
and expense, including reasonable attorneys’ fees and costs, which may be incurred by Seller on
account of any claims made by any of the tenants under the Leases for the breach thereof relating
to acts or omissions occurring on and after the date hereof.
4. Successors. This Assignment shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, legal representatives, successors and assigns.
Exhibit D
Page 1
5. Governing Law. This Assignment shall be governed by the laws of the State of
California.
6. Attorneys’ Fees. If any action or proceeding is commenced by either party to
enforce their rights under this Assignment or to collect damages as a result of the breach of any
of the provisions of this Assignment, the prevailing party in such action or proceeding, including,
without limitation, any bankruptcy, insolvency or appellate proceedings, shall be entitled to
recover all reasonable costs and expenses, including, without limitation, reasonable attorneys’
fees and court costs actually incurred, in addition to any other relief awarded by the court.
7. Counterparts. This Assignment may be executed in counterparts, each of which shall
be deemed an original, and both of which together shall constitute one and the same instrument.
Exhibit D
Page 2
IN WITNESS WHEREOF, Buyer and Seller have executed this Assignment as of the date first above
written.
| SELLER: |
||||
| ________________________, | ||||
| ________________________ | ||||
| By: | ||||
| Name: | ||||
| Its: | ||||
| BUYER: |
||||
| _______________________, | ||||
| a ______________________ | ||||
| By: | ||||
| Name: | ||||
| Its: | ||||
Exhibit D
Page 3
Exhibit A to Assignment of Leases
List of Leases
Exhibit D
Page 4
EXHIBIT E
FIRPTA CERTIFICATE
CERTIFICATIONS OF NON-FOREIGN STATUS
A. Federal FIRPTA Certificate
To inform _____________________, a ____________________ (“Transferee”), that
withholding of tax under Section 1445 of the Internal Revenue Code of 1986, as amended (the
“Code”), will not be required upon the transfer of certain real property located in
___________, ________ by _____________________, a ________________ (“Transferor”),
Transferor hereby certifies to Transferee:
1. Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign
estate (as those terms are defined in the Code and the Income Tax Regulations promulgated
thereunder);
2. Transferor’s U.S. tax identification number is ______________; and
3. Transferor’s office address is ____________________
___________________________________________________________________________________________.
Transferor understands that this Certification may be disclosed to the Internal Revenue
Service by Transferee and that any false statement contained herein could be punished by fine,
imprisonment, or both.
Transferor understands that Transferee is relying on this Certification in determining whether
withholding is required upon said transfer.
Under penalty of perjury the undersigned declare that they have examined this Certification
and to the best of their knowledge and belief it is true, correct and complete, and they further
declare that they have authority to sign this Certification on behalf of Transferor.
B. State of California-California Resident/Non-Resident Affidavit
Sections 18805 and 26131 of the Revenue and Taxation Code provide that a buyer may be required
to withhold 3 1/3% of the sales price of the California real property sold by a non-resident
seller, unless the sales price of the property is less than $100,000.00.
Transferor hereby certifies that Transferor is a partnership as determined in accordance with
Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code.
Transferor understands that this certificate may be disclosed to the Franchise Tax Board of
California by Transferee and that any false statement contained herein could be punished by fine,
imprisonment, or both.
Under penalty of perjury the undersigned declare that they have examined this Certification
and to the best of their knowledge and belief it is true, correct and complete, and they further
declare that they have authority to sign this Certification on behalf of Transferor.
Exhibit E
Page 1
Dated as of _______________, 2010
____________________________,
a ___________________________
a ___________________________
| By: | ||||||
| Name: | ||||||
| Its: | ||||||
Exhibit E
Page 2
EXHIBIT F
ERISA CERTIFICATE
________, 2010
Regis Properties, L.L.C.
c/o Kor Realty Group, LLC
000 Xxxxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxx
c/o Kor Realty Group, LLC
000 Xxxxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxx
Re: Sheraton Xxxxxxx
Dear Xxxx:
The undersigned represents to you that it is not an employee benefit plan as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”) and
that it is not acquiring the Property with the assets of an employee benefit plan as defined in
Section 3(3) of ERISA.
Very truly yours,
________________________________ ,
________________________________
________________________________
| By: | ||||||
| Name: | ||||||
| Its: | ||||||
Exhibit F
Page 1
EXHIBIT G
FOOD AND BEVERAGE MANAGEMENT AGREEMENT
INTERIM ALCOHOLIC BEVERAGE AGREEMENT
This INTERIM ALCOHOLIC BEVERAGE AGREEMENT (“Agreement”) is made, as of the __ day of October,
2010 by and between KOR Hotels, L.L.C., a California limited liability company, (“Licensee”), Blue
Devils Lessee, LLC, a Delaware limited liability company (“Manager”) and Blue Devils Owner, LLC, a
Delaware limited liability company (Owner”).
The purpose of this Agreement is to clarify the rights and obligations of the parties with
respect to responsibility for the operation of the alcoholic beverage business (the “Business”) at
the Hotel currently known as the Sheraton Xxxxxxx, 000 Xxxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxxxxxxxxx
(the “Hotel”), during the pendency of the transfer of the alcoholic beverage license and alcoholic
beverage inventory from Licensee to Manager.
1. Licensee agrees to transfer the License to Manager, and Owner agrees to cause Manager to
file for transfer of the License as soon as reasonably possible. Licensee agrees to cooperate in
the transfer of the License, the opening of the escrow and the completion of all necessary
paperwork. Owner agrees to pay or arrange for payment of all escrow, application and transfer
fees.
2. During the term of this Agreement, Licensee shall be responsible for the operation of the
Business at the Hotel, and Owner hereby grants Licensee the right to enter onto the Hotel premises
and to use same as may be necessary for that purpose. Until such time as the California
Department of Alcoholic Beverage Control (“CABC”) approves the transfer of the Liquor License to
Manager, Manager shall operate the Business as the manager thereof on behalf of Licensee and shall
assure compliance with all laws pertaining to the operation of the Business. Owner hereby consents
to Manager’s operation of the Business on behalf of and pursuant to the direction and control of
Licensee.
Exhibit G
Page 1
3. Title to the Inventory shall remain in Licensee until the CABC approves the transfer of the
Liquor License to
Manager. Until such time, all proceeds from the operation of the Business at the Hotel shall
be applied to the operating expenses of the Business.
4. Manager and Owner agree to indemnify Licensee against any and all loss, cost, liability and
expense (including attorneys fees) that may arise from Manager’s management of the Business;
provided, however, such indemnity shall not apply to any matter that relates to an event that
occurred prior to the date hereof, or that arose due to Licensee’s negligence or willful
misconduct. Manager and Owner agree to provide all customary insurance coverages at the Hotel and
to name Licensee as an additional insured on such policies for the term of this Agreement.
5. Licensee and Manager shall not be construed as partners, joint venture partners or as
having an employer or employee relationship, and nothing contained herein shall be construed to the
contrary.
6. This Agreement may be executed in counterparts, each of which shall be deemed an original,
but all of which, together, shall constitute one and the same instrument, binding on the parties
hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date stated above.
(Licensee)
|
(Manager) | |
KOR HOTELS, L.L.C.
|
BLUE DEVILS LESSEE, LLC | |
By __________________
|
By: _____________________ |
(Owner)
BLUE DEVILS OWNER, LLC
BLUE DEVILS OWNER, LLC
By ___________________
Exhibit G
Page 2
Exhibit H
Form Balconies/Artwork Holdback Agreement
BALCONIES/ARTWORK HOLDBACK AGREEMENT
(Balconies/Artwork Letter Holdback: Escrow No. _____________)
(Balconies/Artwork Letter Holdback: Escrow No. _____________)
This Balconies/Artwork Holdback Agreement (this “Agreement”) dated as of October ___, 2010 is
made by and among REGIS PROPERTIES, L.L.C., a Delaware limited partnership (“Seller”), and
______________, a ___________________ (“Buyer”), and CHICAGO TITLE COMPANY, a ____________
corporation (“Chicago”).
RECITALS
A. Seller and Buyer are parties to that certain Purchase and Sale Agreement dated as of
October __, 2010 (the “Purchase Agreement”), with respect to that certain real property located in
the City of Santa Xxxxxx, County of Los Angeles, State of California, commonly known as “Sheraton
Xxxxxxx” as more particularly described in the Purchase Agreement. All capitalized terms used
herein but not otherwise defined in this Agreement shall have the meanings ascribed to such terms
in the Purchase Agreement.
B. Pursuant to Section 1.10 of the Purchase Agreement, Seller has agreed to pursue obtaining
the Certificate of Compliance, as further described in the Purchase Agreement.
C. Seller and Buyer desire to escrow certain funds to be used, subject to the terms and
conditions hereof, to compensate Buyer in the event of Seller’s failure to timely deliver the
Certificate of Compliance.
D. Seller and Buyer agreed pursuant to the terms of the Purchase Agreement to enter into an
escrow agreement with respect to the Certificate of Compliance on the terms set forth below.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Deposit of Funds; Appointment of Chicago.
a. Upon closing of Escrow No. _____________, Seller shall cause Chicago to deposit the sum of
Fifty Thousand and 00/100 Dollars ($50,000.00) from funds otherwise due to Seller under the
Purchase Agreement into an interest bearing deposit account with Chicago to be known as the
“Xxxxxxx Balconies/Artwork Account” (the “Escrow Account”). All interest and other income earned
on amounts deposited from time to time into the Escrow Account shall be reported to applicable tax
authorities under REGIS PROPERTIES, L.L.C.’s taxpayer
identification number; provided, however, that the party ultimately receiving such interest
and other income shall be responsible for paying the applicable taxes with respect to the same and
in the event both Buyer and Seller receive such interest, the applicable taxes shall be prorated in
proportion to the amount of interest received.
Exhibit H
Page 1
b. Seller and Buyer hereby irrevocably appoint Chicago to act as escrow and disbursement agent
with respect to the Escrow Account. Chicago hereby accepts such appointment, and assigns No.
__________________ to this transaction.
2. Conditions for Disbursements.
a. The funds on deposit in the Escrow Account, including without limitation, all interest
accrued thereon, shall be held therein until all of such funds are either (i) released to Seller
pursuant to the provisions Section 2.b, below and/or (ii) released to Buyer pursuant to the
provisions of Section 2.c, below.
b. In the event Seller has delivered to Buyer the Certificate of Compliance on or before
December 31, 2011 (the “Certificate of Compliance Deadline”), Seller shall deliver written notice
to Chicago (with a copy to Buyer) of such delivery and a copy of the Certificate of Compliance
together with a request for disbursement of all funds from the Escrow Account and Chicago shall
release all funds from the Escrow Account to Seller within five (5) after receipt of such notice.
c. In the event that Seller fails to timely deliver the Certificate of Compliance to Buyer,
upon written notice from Buyer to Chicago, Chicago shall release all funds from the Escrow Account
to Buyer within five (5) business days after the Certificate of Compliance Deadline, without any
further instructions or requests from either Buyer or Seller so long as Chicago has not received
evidence, including a copy of the Certificate of Compliance, from Seller within three (3) business
days after expiration of the Certificate of Compliance Deadline, that Seller timely delivered the
Certificate of Compliance; and (ii) Seller shall have no further obligations or liability with
respect to the delivery of the Certificate of Compliance.
3. Interest and Charges. All funds from time to time on deposit in the Escrow Account
shall earn interest at the standard money market rates in effect at the bank where the funds in the
Escrow Account are deposited by Chicago from time to time. All interest earned on amounts from
time to time on deposit in the Escrow Account shall be credited monthly and shall be deposited into
the Escrow Account upon each date of crediting. All fees and other costs that Chicago may incur in
connection with this Agreement and maintaining the Escrow Account shall be estimated by Chicago and
prepaid fifty percent (50%) by Seller and fifty percent (50%) by Buyer through the closing of
Escrow No. _________________. Chicago shall promptly refund any unused portion of such prepaid
fees and costs to Seller and Seller and Buyer agree to pay (in equal shares) any excess fees and
costs reasonably incurred by Chicago upon Chicago’s written request for the same.
4. Escrow Custodian Only. Chicago, licensed by the State of California Department of
Insurance, is acting herein in the capacity of an escrow holder or custodian, and not as a title
company, and no other duty or obligation is expressed or implied.
5. Term. This Agreement shall be and remain in full force and effect until the date
on which all funds on deposit in the Escrow Account have been disbursed to Seller or Buyer in
accordance with Sections 2.b, or 2.c, above.
Exhibit H
Page 2
6. Assignment; Binding Effect. The rights and obligations under this Agreement may
not be assigned by Chicago without the prior express written consent of Seller and Buyer, which
consent may be granted or withheld in Seller’s or Buyer’s sole and absolute discretion, as
applicable. The rights and obligations under this Agreement may not be assigned by Seller or Buyer
without the prior written approval of the other party, which approval shall not be unreasonably
withheld. Each of the provisions hereof shall be binding upon and inure to the benefit of Seller,
Buyer and Chicago and, subject to the foregoing, their respective legal representatives, successors
and assigns.
7. Notices. All notices to be given under this Agreement shall be in writing and
shall be deemed to have been given or served upon receipt or refusal of receipt after being mailed,
postage prepaid, by certified, registered or express mail, return receipt requested, or when
delivered in person or by reputable overnight courier providing a delivery receipt, to the
appropriate address set forth below or to such other address as may be hereinafter designated by
any party at least five (5) days in advance by proper notice to the other parties hereto:
If to Seller:
Regis Properties, L.L.C.
c/o Kor Realty Group, LLC
000 Xxxxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxx
Facsimile no. (000) 000-0000
E-mail: Xxxx.Xxxxx@xxxxxxxxxxx.xxx
c/o Kor Realty Group, LLC
000 Xxxxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxx
Facsimile no. (000) 000-0000
E-mail: Xxxx.Xxxxx@xxxxxxxxxxx.xxx
With a copy to:
Xxxxxx-Xxxxx Management West, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Facsimile no. (000) 000-0000
E-mail: XXxxxxxxxx@xxxxxxxxxxx.xxx
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Facsimile no. (000) 000-0000
E-mail: XXxxxxxxxx@xxxxxxxxxxx.xxx
With a copy to:
Xxxxxxxxxx, Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Facsimile no. (000) 000-0000
E-mail: Xxxxx.Xxxxxxxxxx@xxxxxx.xxx
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Facsimile no. (000) 000-0000
E-mail: Xxxxx.Xxxxxxxxxx@xxxxxx.xxx
If to Buyer:
x/x Xxxxxxxxxxx Xxxxx Xxxxx
0 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000
0 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000
Exhibit H
Page 3
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile no. (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxxxxxxxxx.xxx
Attention: Xxxxxx X. Xxxxxx
Facsimile no. (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxxxxxxxxx.xxx
With a copy to:
Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx LLP
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attention: J. Xxxx Xxxxxxxxx, Esq.
Facsimile no. (000) 000-0000
E-mail: xxxxxxxxxx@xxxxxxxx.xxx
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attention: J. Xxxx Xxxxxxxxx, Esq.
Facsimile no. (000) 000-0000
E-mail: xxxxxxxxxx@xxxxxxxx.xxx
8. Judicial Reference of Disputes. All controversies arising out of this Agreement,
including any resolution as to Objected to Amounts, shall be heard by a referee pursuant to the
provisions of the California Code of Civil Procedure Section 638, et seq. The parties shall agree
upon a single referee who shall then try all issues, whether of fact or law, and report a finding
and judgment thereon. If the parties are unable to agree upon a referee, either party may seek to
have one appointed, pursuant to Sections 638 et seq. of the California Code of Civil Procedure.
The cost of such proceeding shall initially be borne equally by the parties. However, the
prevailing party shall be entitled, in addition to all other costs, to the costs of the referee as
an item of recoverable costs. Notwithstanding the foregoing, the parties may mutually agree to
binding arbitration of any dispute arising out of this Agreement.
9. Miscellaneous. All section headings herein are included only for convenience of
reference and are not intended to limit or amplify any term or provision of this Agreement. The
Recitals hereto are hereby incorporated into and made a part of this Agreement. This Agreement
contains the entire understanding and agreement of the parties hereto with respect to the subject
matter hereof and may not be altered or amended in any way except by the written agreement of all
such parties. No provision of this Agreement or right hereunder can be waived nor shall any party
be released from its obligations hereunder except by a writing duly executed by the other parties.
Where necessary herein, all terms used in the singular shall apply to the plural and all terms used
in the neuter shall apply to the masculine and feminine genders. If any provision of this
Agreement, as applied to any party or to any circumstance, shall be adjudged by a court of
competent jurisdiction to be void, invalid or unenforceable, then the same shall in no way affect
any other provisions of this Agreement, the application of any such provision in any other
circumstance, or the validity or enforceability of the other provisions of this Agreement. This
Agreement may be executed by facsimile or scanned e-mail signature and/or in any number of
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Agreement shall be governed by and construed in accordance with
the laws of the State of California. In the event of action, suit, proceeding or arbitration to
enforce any term of this Agreement, the prevailing party or parties shall be entitled to recover
from the non-prevailing party
or parties, as determined by the court or arbitrator, all of the prevailing party’s or
parties’ costs and expenses, including attorneys’ fees, incurred by the prevailing party or parties
in connection therewith.
Exhibit H
Page 4
| SELLER: |
||||||
| , | ||||||
| By: | |||||
| Name: | |||||
| Its: | |||||
| BUYER: |
||||||
| , | ||||||
| a | ||||||
| By: | |||||
| Name: | |||||
| Its: | |||||
TITLE COMPANY:
CHICAGO TITLE COMPANY,
a __________ corporation
a __________ corporation
| By: | |||||
| Name: | |||||
| Title: | |||||
Exhibit H
Page 5
Exhibit I
Form Parking Holdback Agreement
Form Parking Holdback Agreement
PARKING HOLDBACK AGREEMENT
(Parking Letter Holdback: Escrow No. _____________)
(Parking Letter Holdback: Escrow No. _____________)
This Parking Holdback Agreement (this “Agreement”) dated as of October ___, 2010 is made by
and among REGIS PROPERTIES, L.L.C., a Delaware limited partnership (“Seller”), and ______________,
a ___________________ (“Buyer”), and CHICAGO TITLE COMPANY, a ____________ corporation (“Chicago”).
RECITALS
A. Seller and Buyer are parties to that certain Purchase and Sale Agreement dated as of
October __, 2010 (the “Purchase Agreement”), with respect to that certain real property located in
the City of Santa Xxxxxx, County of Los Angeles, State of California, commonly known as “Sheraton
Xxxxxxx” as more particularly described in the Purchase Agreement. All capitalized terms used
herein but not otherwise defined in this Agreement shall have the meanings ascribed to such terms
in the Purchase Agreement.
B. Seller and Buyer desire to escrow certain funds, subject to the terms and conditions
hereof.
C. Seller and Buyer agreed pursuant to the terms of the Purchase Agreement to enter into an
escrow agreement with respect to the parking at the Property on the terms set forth below.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Deposit of Funds; Appointment of Chicago.
a. Upon closing of Escrow No. _____________, Seller shall cause Chicago to deposit the sum of
One Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00) from funds otherwise due to
Seller under the Purchase Agreement into an interest bearing deposit account with Chicago to be
known as the “Xxxxxxx Parking Account” (the “Escrow Account”). All interest and other income
earned on amounts deposited from time to time into the Escrow Account shall be reported to
applicable tax authorities under REGIS PROPERTIES, L.L.C.’s taxpayer identification number;
provided, however, that the party ultimately receiving such interest and other income shall be
responsible for paying the applicable taxes with respect to the same and in the event both Buyer
and Seller receive such interest, the applicable taxes shall be prorated in proportion to the
amount of interest received.
b. Seller and Buyer hereby irrevocably appoint Chicago to act as escrow and disbursement agent
with respect to the Escrow Account. Chicago hereby accepts such appointment, and assigns No.
__________________ to this transaction.
Exhibit I
Page 1
2. Conditions for Disbursements.
a. The funds on deposit in the Escrow Account, including without limitation, all interest
accrued thereon, shall be held therein until all of such funds are either (i) released to Seller
pursuant to the provisions of Section 2.b, below, (ii) released to both Buyer and Seller pursuant
to the provisions of Section 2.c, below, or (iii) released to Buyer pursuant to the provisions of
Section 2.d, below.
b. In the event the Development Agreement is amended to allow Buyer to charge all guests for
parking (the “Parking Escrow Full Release Condition”) on or before December 31, 2011 (the “Parking
Deadline”), Seller shall deliver to Chicago (with a copy to Buyer) a copy of such amendment to the
Development Agreement together with a written request for disbursement of all funds from the Escrow
Account and Chicago shall release all funds from the Escrow Account to Seller within five (5) after
receipt of said request.
c. In the event the Parking Escrow Full Release Condition does not occur on or before the
Parking Deadline, Buyer shall, within five (5) days after the Parking Deadline, deliver to Chicago
(with a copy to Seller) reasonable evidence of the gross parking revenue at the Property for
calendar year 2011 (the “2011 Parking Revenue”) and if the Parking Revenue is equal to or greater
than Seven Hundred Seventy-Five Thousand Dollars ($775,000) (the “Parking Escrow Partial Release
Condition”), Chicago shall release fifty percent (50%) of the funds from the Escrow Account to
Seller and the remaining balance of funds in the Escrow Account to Buyer, within five (5) days
after Chicago’s receipt of said evidence.
d. In the event neither the Parking Escrow Full Release Condition nor the Parking Escrow
Partial Release Condition has occurred on or before the Parking Deadline, upon written notice from
Buyer to Chicago, Chicago shall release all funds from the Escrow Account to Buyer within five (5)
business days after the Parking Deadline, without any further instructions or requests from either
Buyer or Seller.
3. Interest and Charges. All funds from time to time on deposit in the Escrow Account
shall earn interest at the standard money market rates in effect at the bank where the funds in the
Escrow Account are deposited by Chicago from time to time. All interest earned on amounts from
time to time on deposit in the Escrow Account shall be credited monthly and shall be deposited into
the Escrow Account upon each date of crediting. All fees and other costs that Chicago may incur in
connection with this Agreement and maintaining the Escrow Account shall be estimated by Chicago and
prepaid fifty percent (50%) by Seller and fifty percent (50%) by Buyer through the closing of
Escrow No. _________________. Chicago shall promptly refund any unused portion of such prepaid
fees and costs to Seller and Seller and Buyer agree to pay (in equal shares) any excess fees and
costs reasonably incurred by Chicago upon Chicago’s written request for the same.
4. Escrow Custodian Only. Chicago, licensed by the State of California Department of
Insurance, is acting herein in the capacity of an escrow holder or custodian, and not as a title
company, and no other duty or obligation is expressed or implied.
5. Term. This Agreement shall be and remain in full force and effect until the date
on which all funds on deposit in the Escrow Account have been disbursed to Seller and/or
Exhibit I
Page 2
Buyer in accordance with Sections 2.b, 2.c, or 2.d, above.
6. Assignment; Binding Effect. The rights and obligations under this Agreement may
not be assigned by Chicago without the prior express written consent of Seller and Buyer, which
consent may be granted or withheld in Seller’s or Buyer’s sole and absolute discretion, as
applicable. The rights and obligations under this Agreement may not be assigned by Seller or Buyer
without the prior written approval of the other party, which approval shall not be unreasonably
withheld. Each of the provisions hereof shall be binding upon and inure to the benefit of Seller,
Buyer and Chicago and, subject to the foregoing, their respective legal representatives, successors
and assigns.
7. Notices. All notices to be given under this Agreement shall be in writing and
shall be deemed to have been given or served upon receipt or refusal of receipt after being mailed,
postage prepaid, by certified, registered or express mail, return receipt requested, or when
delivered in person or by reputable overnight courier providing a delivery receipt, to the
appropriate address set forth below or to such other address as may be hereinafter designated by
any party at least five (5) days in advance by proper notice to the other parties hereto:
If to Seller:
Regis Properties, L.L.C.
c/o Kor Realty Group, LLC
000 Xxxxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxx
Facsimile no. (000) 000-0000
E-mail: Xxxx.Xxxxx@xxxxxxxxxxx.xxx
c/o Kor Realty Group, LLC
000 Xxxxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxx
Facsimile no. (000) 000-0000
E-mail: Xxxx.Xxxxx@xxxxxxxxxxx.xxx
With a copy to:
Xxxxxx-Xxxxx Management West, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Facsimile no. (000) 000-0000
E-mail: XXxxxxxxxx@xxxxxxxxxxx.xxx
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Facsimile no. (000) 000-0000
E-mail: XXxxxxxxxx@xxxxxxxxxxx.xxx
With a copy to:
Xxxxxxxxxx, Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Facsimile no. (000) 000-0000
E-mail: Xxxxx.Xxxxxxxxxx@xxxxxx.xxx
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Facsimile no. (000) 000-0000
E-mail: Xxxxx.Xxxxxxxxxx@xxxxxx.xxx
Exhibit I
Page 3
If to Buyer:
c/o Pebblebrook Hotel Trust
0 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile no. (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxxxxxxxxx.xxx
0 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile no. (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxxxxxxxxx.xxx
With a copy to:
Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx LLP
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attention: J. Xxxx Xxxxxxxxx, Esq.
Facsimile no. (000) 000-0000
E-mail: xxxxxxxxxx@xxxxxxxx.xxx
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attention: J. Xxxx Xxxxxxxxx, Esq.
Facsimile no. (000) 000-0000
E-mail: xxxxxxxxxx@xxxxxxxx.xxx
8. Judicial Reference of Disputes. All controversies arising out of this Agreement,
including any resolution as to Objected to Amounts, shall be heard by a referee pursuant to the
provisions of the California Code of Civil Procedure Section 638, et seq. The parties shall agree
upon a single referee who shall then try all issues, whether of fact or law, and report a finding
and judgment thereon. If the parties are unable to agree upon a referee, either party may seek to
have one appointed, pursuant to Sections 638 et seq. of the California Code of Civil Procedure.
The cost of such proceeding shall initially be borne equally by the parties. However, the
prevailing party shall be entitled, in addition to all other costs, to the costs of the referee as
an item of recoverable costs. Notwithstanding the foregoing, the parties may mutually agree to
binding arbitration of any dispute arising out of this Agreement.
9. Miscellaneous. All section headings herein are included only for convenience of
reference and are not intended to limit or amplify any term or provision of this Agreement. The
Recitals hereto are hereby incorporated into and made a part of this Agreement. This Agreement
contains the entire understanding and agreement of the parties hereto with respect to the subject
matter hereof and may not be altered or amended in any way except by the written agreement of all
such parties. No provision of this Agreement or right hereunder can be waived nor shall any party
be released from its obligations hereunder except by a writing duly executed by the other parties.
Where necessary herein, all terms used in the singular shall apply to the plural and all terms used
in the neuter shall apply to the masculine and feminine genders. If any provision of this
Agreement, as applied to any party or to any circumstance, shall be adjudged by a court of
competent jurisdiction to be void, invalid or unenforceable, then the same shall in no way affect
any other provisions of this Agreement, the application of any such provision in any other
circumstance, or the validity or enforceability of the other provisions of this Agreement. This
Agreement may be executed by facsimile or scanned e-mail signature and/or in any number of
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Agreement shall be governed by and construed in accordance with
the laws of the State of California. In the event of action, suit, proceeding or arbitration to
enforce any term of this Agreement, the prevailing party or parties shall be entitled to recover
from the non-prevailing party
Exhibit I
Page 4
or parties, as determined by the court or arbitrator, all of the prevailing party’s or
parties’ costs and expenses, including attorneys’ fees, incurred by the prevailing party or parties
in connection therewith.
| SELLER: |
||||||
| , | ||||||
| By: | |||||
| Name: | |||||
| Its: | |||||
| BUYER: |
||||||
| , | ||||||
| a | ||||||
| By: | |||||
| Name: | |||||
| Its: | |||||
TITLE COMPANY:
CHICAGO TITLE COMPANY,
a __________ corporation
a __________ corporation
| By: | |||||
| Name: | |||||
| Title: | |||||
Exhibit I
Page 5
