PURCHASE AND SALE AGREEMENT
Exhibit
10.1
THIS
PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as of
July 11, 2006 by and between CNL
HOSPITALITY PARTNERS, LP,
a
Delaware limited partnership (the “Seller”) and HERSHA
HOSPITALITY LIMITED PARTNERSHIP,
a
limited partnership organized under the laws of the Commonwealth of Virginia,
and its assignee or designee (the “Purchaser”), which together constitute the
“Parties” (and referred to individually as a “Party”).
RECITALS:
WHEREAS,
the
Seller and Purchaser are parties to that certain Limited Partnership Agreement,
dated as of April 21, 2003 (as amended pursuant to Amendment to Limited
Partnership Agreement dated as of August, 2003, collectively, the “Partnership
Agreement”), for HT/CNL Metro Hotels, L.P., a Delaware limited partnership (the
“Partnership”); and
WHEREAS,
the
Seller owns a sixty-six and 66.7/100 percent (66.667%) limited partnership
interest in the Partnership and has agreed to sell to Purchaser its entire
limited partnership interest in the Partnership, including, without limitation,
all of its rights to distributions, capital accounts and equity interests (in
the aggregate herein called the “Interest”), pursuant to the terms of this
Agreement; and
WHEREAS,
the
Partnership owns all of the equity of Chelsea Grand East, LLC, a New York
limited liability company (“Hotel Owner”), which owns the fee interest in the
Hampton Inn Chelsea Hotel (the “Hotel”), and 100% of the equity interests of
Tenant; and
WHEREAS,
the
Purchaser is making this Agreement without any contingency for outside financing
of the Closing Payment (defined below); and
WHEREAS,
this
Agreement contains the entire understanding of the Parties regarding the
purchase of the Interest by the Purchaser and the sale of the Interest by the
Seller.
AGREEMENT
NOW,
THEREFORE,
for and
in consideration of the foregoing premises, the mutual covenants and agreements
set forth below, and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged by each of the Parties, the Parties
agree as follows:
ARTICLE
1
RECITALS
1.1 Incorporation
of Recitals.
The
Parties hereby acknowledge and agree that the foregoing recitals are true and
correct and incorporated into this Agreement by this reference.
-
1 -
ARTICLE
2
DEFINITIONS
2.1 As
used
in this Agreement, the following terms shall have the respective meanings set
forth below and other defined terms shall have the meaning as set forth
elsewhere in this Agreement:
“Affiliates”
of any Person means (a) any other Person which (i) directly or indirectly,
owns
more than forty-nine percent (49%) of the beneficial or equity interests in
such
Person or (ii) directly or indirectly, is in control of, is controlled by or
is
under common control with, such Person; or (b) any other Person who is a
director or officer of (i) such Person, (ii) any subsidiary of such Person,
or
(iii) any Person described in clause (a) above.
“Applicable
Laws” means the laws of Delaware and the laws of New York that may be applicable
in connection with the Hotel.
“Assumed
Value” shall have the meaning specified in Section
3.3.
“Closing”
shall mean the closing of the purchase of the Interest as contemplated in
Section
4.1.
“Closing
Documents” means (i) an assignment (the “Assignment”) of the Interest to be
executed by Seller in favor of Purchaser, or its designee, in the form attached
hereto as Exhibit A, (ii) a FIRPTA Certificate to be executed by Seller, (iii)
a
Certificate of Representations and Warranties from each Party in the form of
Exhibit B-1 and Exhibit B-2, respectively, (the “Officer’s Certificate”) and
(iv) a Closing Statement to be executed by both Parties and such other documents
and certificates as are customary for transactions of this nature and approved
by Seller and Purchaser in good faith in their sole discretion.
“Closing
Payment” shall have the meaning specified in Section
3.3.
“Deductible”
shall have the meaning specified in Section
11.4.
“Deposit”
shall have the meaning specified in Section
3.4.
“Distributions”
shall have the meaning specified in the Partnership Agreement.
“Effective
Date” shall have the meaning specified in Section
3.2.
“Escrow
Agent” means Lowndes, Drosdick, Doster, Xxxxxx & Xxxx,
P.A.
“Franchise
Agreement” means that certain Amended and Restated Franchise Agreement between
Franchisor and Tenant, dated as of August 27, 2003.
“Franchisor”
means Promus Hotels, Inc., a Delaware corporation.
“Hotel”
shall have the meaning specified in the Recitals.
-
2 -
“Hotel
Owner” shall have the meaning specified in the Recitals.
“Interest”
shall have the meaning specified in the Recitals.
“Knowledge
of Seller” or similar phrases means the actual knowledge of Xxxxxx
Xxxxxxx.
“Management
Agreement” means that certain Hotel Management Agreement between Manager and
Tenant, dated as of August 29, 2003, as the same may be amended.
“Manager”
means Hersha Hospitality Management, L.P., a Pennsylvania limited
partnership.
“Mortgage
Debt” means the principal amount outstanding under that certain Loan Agreement
between Hotel Owner and Tenant, as co-borrower, and Mortgage Lender, as lender
dated as of February 4, 2004, as amended by First Amendment to Loan
Agreement and other Loan documents dated as of July 30, 2004, as the same may
be
further amended. The outstanding principal balance of the Mortgage Debt on
the
date of this Agreement is $15,860,345.00
“Mortgage
Lender” means General Electric Capital Corporation or any subsequent holder of
the Mortgage Debt.
“Net
Cash
Flow” shall have the meaning specified in the Partnership
Agreement.
“Parties”
shall have the meaning specified in the Recitals.
“Partnership”
shall have the meaning specified in the Recitals.
“Partnership
Agreement” shall have the meaning specified in the Recitals.
“Person”
means an individual, corporation, trust, association, unincorporated
association, estate, partnership, joint venture, limited liability company
or
other legal entity, including a governmental entity.
“Purchase
Price” shall have the meaning specified in Section
3.3.
“Purchaser”
shall have the meaning specified in the Recitals.
“Purchaser
Default” shall have the meaning specified in Section
11.2.
“Required
Consents” shall have the meaning specified in Section
5.2.
“Seller”
shall have the meaning specified in the Recitals.
“Seller
Default” shall have the meaning specified in Section
11.1.
“Seller’s
Partnership Interest” means 66.667%.
“Tenant”
means Hersha CNL TRS, Inc., a Delaware corporation.
-
3 -
ARTICLE
3
SALE
OF INTEREST
3.1 Sale
of Interest.
The
Seller hereby agrees to sell to the Purchaser, and the Purchaser hereby agrees
to purchase from the Seller, the Interest pursuant to the terms and conditions
set forth herein.
3.2 Effective
Date.
The
effective date (“Effective Date”) of the purchase and sale of the Interest
hereunder will be the date this Agreement is last executed by Seller and
Purchaser.
3.3 Purchase
Price.
In
determining the aggregate purchase price (“Purchase Price”) for the Interest to
be purchased hereunder, the Parties have assumed that the value of all of the
assets of the Partnership, including the Hotel, is $54,000,000.00 (the “Assumed
Value”). The Purchase Price to be paid shall be equal to the Assumed Value less
the Mortgage Debt times the Seller’s Partnership Interest. In addition to the
Purchase Price, Seller shall receive at Closing Seller’s Partnership Interest in
Net Cash Flow, the FF & E Reserve and working capital, all determined
as of Closing (the Purchase Price and Seller’s share of the Net Cash Flow, the
FF&E Reserve and working capital is herein referred to as the “Closing
Payment”).
3.4 Deposit.
Upon
execution of this Agreement by Purchaser and Seller, Purchaser shall deposit
an
amount equal to One Million Five Hundred Thousand and No/100 Dollars
($1,500,000.00) (plus any interest or earnings accrued thereon, the “Deposit”),
by wire transfer, official bank check, or other immediately available funds,
or
by a letter of credit with the Escrow Agent. In the event the Purchaser elects
to provide the Deposit by a letter of credit, the letter of credit shall be
payable to Seller and shall by its express terms provide that upon the
occurrence of a default by Purchaser hereunder, as contemplated in Section
11.2
hereof, resulting in the termination of this Agreement by Seller, the letter
of
credit shall immediately be delivered to Seller by Escrow Agent and Purchaser
shall have no right or claim with respect thereto. In the event that the Deposit
has not been deposited with Escrow Agent within two (2) business days following
the execution of this Agreement, this Agreement shall immediately terminate.
The
Deposit shall be deposited by the Escrow Agent into an interest-bearing, fully
insured account, as directed by the Purchaser. The Deposit shall be applied
to
payment of the Closing Payment at Closing or shall otherwise be paid as herein
provided. The Purchaser acknowledges and agrees that the Deposit, when made,
is
“At Risk” with respect to a default by the Purchaser of its obligations to close
the purchase and sale of the Interest as set forth in this Agreement (as
specifically set forth in Section
11.2).
All
interest earned in said account of the Escrow Agent shall be for the account
of
the Purchaser and reported by the Escrow Agent to the Internal Revenue Service
as income to the Purchaser (and the Purchaser agrees to execute a Form W-9
and
any other tax documents necessary in connection therewith).
3.5 Payment
of the Closing Payment.
At the
Closing, the Purchaser shall pay the Closing Payment (less the Deposit) to
the
Seller and the Escrow Agent shall pay the Deposit to Seller, in each case by
wire transfer, official bank check, or other immediately available
funds.
-
4 -
3.6 Escrow
Agent.
The
Escrow Agent, in its capacity as holder of the Deposit in escrow, joins in
the
execution of this Agreement for the limited purpose of acknowledging and
agreeing to the provisions of this Section
3.6.
A. The
duties of the Escrow Agent shall be as follows:
(i) The
Escrow Agent shall deposit, hold and disburse the Deposit in accordance with
the
terms and provisions of this Agreement.
(ii) If
this
Agreement shall be terminated by the mutual written agreement of the Purchaser
and the Seller, or if the Escrow Agent shall be unable to determine at any
time
to whom the Deposit should be paid, or if a dispute shall develop between the
Seller and the Purchaser concerning to whom the Deposit should be paid and
delivered, then and in any event, the Escrow Agent may request the joint written
instructions of the Seller and the Purchaser and pay and deliver the Deposit
in
accordance therewith. In the event that such written instruction shall not
be
received by the Escrow Agent within ten (10) days after the Escrow Agent has
served a written request for instructions upon the Seller and the Purchaser,
then the Escrow Agent shall have the right to pay and deliver the Deposit into
an appropriate court of proper jurisdiction in the State of Florida, and
interplead the Seller and the Purchaser in respect thereof, and thereupon the
Escrow Agent shall be discharged of any obligations in connection with this
Agreement.
B. If
costs
or expenses are incurred by the Escrow Agent in its capacity as holder of the
Deposit in escrow because of litigation or a dispute between the Seller and
the
Purchaser arising out of the holding of the Deposit in escrow, the Seller and
the Purchaser shall each pay the Escrow Agent one-half of such reasonable costs
and expenses.
C. By
joining herein, the Escrow Agent undertakes only to perform the duties and
obligations imposed upon the Escrow Agent under the terms of this Agreement
and
expressly does not undertake to perform any of the other covenants, terms and
provisions incumbent upon the Seller and the Purchaser hereunder.
D. The
Purchaser and the Seller hereby agree and acknowledge that the Escrow Agent
assumes no liability in connection herewith except for its willful misconduct
or
gross negligence; that the Escrow Agent shall never be responsible for the
validity, correctness or genuineness of any document or notice referred to
under
this Agreement; and that in the event of any dispute under this Agreement,
the
Escrow Agent may seek advice from its own legal counsel and shall be fully
protected in any action taken by it in good faith in accordance with the good
faith opinion of its legal counsel.
E. Purchaser
and Seller agree that Escrow Agent shall be free to represent Seller in any
dispute relating to this Agreement in addition to acting as Escrow Agent,
including without limitation, a dispute relating to the Deposit.
-
5 -
ARTICLE
4
CLOSING
4.1 Closing.
Unless
otherwise expedited by agreement of the Parties, the Closing will take place
on
a date (the “Closing Date”) which is no later ninety (90) days after the date of
this Agreement or such earlier date agreed upon by the Parties. The Closing
shall take place through the mail. Summit Associates, whose address is 000
Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, shall serve as closing
and disbursing agent. At and in connection with the Closing, the Parties shall
execute and deliver the Closing Documents and the Escrow Agent shall return
the
Deposit to the Purchaser and the Purchaser shall pay the Closing Payment to
Seller by wire transfer, official bank check or other immediately available
funds.
ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF SELLER
To
induce
the Purchaser to enter into this Agreement, and to consummate the transactions
contemplated hereby, the Seller represents and warrants to the Purchaser as
of
the date hereof and on the Effective Date, as follows:
5.1 General
Representations and Warranty of the Seller.
(i) The
Seller is a limited partnership, duly formed and organized, validly existing,
and in good standing under the laws of Delaware; and (ii) the Seller’s general
partner has the full legal right, capacity and power to enter into this
Agreement and to perform Seller’s respective obligations hereunder.
5.2 Authorization
and Execution.
(i) The execution and delivery of this Agreement by the Seller and the
performance of its obligations hereunder, including the sale and transfer of
the
Interest hereunder, have been duly authorized and approved pursuant to the
applicable provisions of the Partnership Agreement and by all other necessary
partnership authorizing action on the part of the Seller and, except for any
consent to the subject sale of the Interest or release of Seller from any and
all liability which Seller requests or which Purchaser is required to obtain
from the Mortgage Lender (“Lender Consent”), Manager (“Manager Consent”) and
Franchisor (“Franchisor Consent”) in connection with the transactions
contemplated herein (together the “Required Consents”), no other approvals or
consents of any third party or governmental authority are required in connection
with the transactions contemplated hereunder; (ii) this Agreement has been
duly executed and delivered by the Seller, constitutes the valid and binding
agreement of the Seller enforceable against the Seller in accordance with its
terms; (iii) the Person executing this Agreement on behalf of the Seller
has the authority to do so; (iv) the Seller owns good title to the Interest,
free and clear of any and all liens, claims and encumbrances of any kind or
nature whatsoever, and has the legal right to sell the Interest to the Purchaser
pursuant to the terms of this Agreement; and (v) the Interest comprises the
entire Partnership interest of the Seller in the Partnership and the Seller
has
no other legal or beneficial interest in the Partnership or any of its
assets.
5.3 Bankruptcy.
The
Seller is not subject to any pending, or to the knowledge of the Seller, any
threatened bankruptcy proceeding, receivership proceeding or other insolvency,
dissolution, reorganization or similar proceeding.
-
6 -
5.4 Seller
Is Not a “Foreign Person”.
The
Seller is not a “foreign person” within the meaning of that term as used in
Section 1445 of the Internal Revenue Code.
5.5 Non-contravention.
Assuming all Required Consents are obtained on or before the Closing Date,
the
execution and delivery of this Agreement and the other agreements contemplated
hereby and the performance by the Seller of its obligations hereunder do not
and
will not contravene, or constitute a default under any judgment, injunction,
order, decree or other instrument binding upon the Seller or result in the
creation of any lien on any asset of the Seller.
ARTICLE
6
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
To
induce
the Seller to enter into this Agreement and to consummate the transactions
contemplated hereby, the Purchaser represents and warrants to the Seller as
of
the date hereof and on the Effective Date, as follows:
6.1 General
Representation and Warranty of the Purchaser.
(i) The
Purchaser is a limited partnership, duly formed and organized, validly existing,
and in good standing under the laws of the Commonwealth of Virginia; (ii) the
Purchaser’s general partner has full power and authority to execute and deliver
this Agreement and perform Purchaser’s respective obligations
hereunder.
6.2 Authorization
and Execution.
The
execution and delivery of this Agreement by Purchaser and the performance of
its
obligations hereunder have been duly authorized and approved pursuant to the
applicable provisions of Purchaser’s partnership documents and by all other
necessary partnership authorizing action on the part of Purchaser and, except
for the Required Consents, no other approvals or consents of any third party
or
governmental authority are required in connection with the transactions
contemplated hereunder; this Agreement has been duly executed and delivered
by
the Purchaser and constitutes the valid and binding agreement of the Purchaser
enforceable against the Purchaser in accordance with its terms. The Person
executing this Agreement on behalf of the Purchaser’s general partner has the
authority to do so.
6.3 Non-contravention.
Assuming all Required Consents are obtained on or before the Closing Date,
the
execution and delivery of this Agreement and the other agreements contemplated
hereby and the performance by the Purchaser of its obligations hereunder do
not
and will not contravene, or constitute a default under, any judgment,
injunction, order, decree or other instrument binding upon the Purchaser or
result in the creation of any lien on any asset of the Purchaser.
6.4 Litigation.
Except
for suits publicly disclosed by Purchaser in its SEC filings through the date
hereof, the Purchaser knows of no action, suit or proceeding, pending or known
to be threatened against the Purchaser in any court or before any arbitrator
or
before any governmental authority which (i) in any manner raises any question
affecting the validity or enforceability of this Agreement or any other
agreement or instrument to which the Purchaser is a party or by which it is
bound and that is to be used in connection with, or is contemplated by, this
Agreement, (ii) would materially and adversely affect the business, financial
position or results
of operations of the Purchaser, or (iii) would materially and adversely affect
the ability of the Purchaser to perform its obligations hereunder, or under
any
document to be delivered pursuant hereto.
-
7 -
ARTICLE
7
EXPENSES
Each
of
the Parties shall be responsible for, and shall pay, any and all costs and
expenses incurred by such Party in connection with this Agreement and the
transactions contemplated hereunder, including, but not limited to, the fees
and
costs of such Party’s legal counsel. Any transfer taxes due and owing in
connection with the assignment of the Interest to Purchaser shall be paid as
follows: Seller shall pay two thirds of such taxes and Purchaser shall pay
one
third of such taxes.
ARTICLE
8
CONDITIONS
PRECEDENT TO CLOSE
8.1 Conditions
as to the Purchaser’s Obligations to Close.
The
obligations of the Purchaser to consummate the Closing and pay the Closing
Payment to the Seller are subject to satisfaction by Seller, or waiver by the
Purchaser, of the following conditions:
A. The
representations and warranties made in this Agreement by the Seller shall be
true and correct in all respects when made and as of the Closing and the Seller
shall have performed, in all material respects, its obligations under this
Agreement.
B. Delivery
by the Seller to the Purchaser of an Officer’s Certificate in the form attached
hereto as Exhibit B-1, reconfirming Seller’s representations and warranties as
of Closing.
C. The
receipt by Purchaser of the Lender Consent and Franchisor Consent.
8.2 Conditions
as to Seller’s Obligations to Close:
The
obligations of the Seller to consummate the sale and take the actions to be
performed by it in connection with the Closing are subject to the satisfaction
by Purchaser, or waiver by the Seller, of the following conditions:
A. The
delivery by Purchaser to Seller of the Required Consents.
B. The
representations and warranties made in this Agreement by the Purchaser shall
be
true and correct in all material respects when made and as of the Closing and
the Purchaser shall have performed, in all material respects, its obligations
under this Agreement.
C. Delivery
by the Purchaser to the Seller of an Officer’s Certificate in the form attached
hereto as Exhibit B-2, reconfirming Purchaser’s representations and warranties
as of Closing.
-
8 -
8.3 Efforts
of the Parties.
The
Parties hereby agree to use good faith diligent efforts to cause each of the
conditions precedent to their respective obligations to be fully satisfied,
performed and discharged, on and as of the Closing; provided that the Purchaser
shall be solely responsible for obtaining the Required Consents in accordance
with its obligations under Section
8.2.A
and
Section
10.1.
Each
party agrees to reasonably cooperate with the other party in its efforts to
cause conditions precedent to be satisfied, performed and
discharged.
8.4 Mutual
Condition.
The
obligations of each of the Parties to consummate the purchase and sale of the
Interest and the other transactions contemplated by this Agreement shall be
subject to the following conditions: (i) no temporary restraining order,
preliminary or permanent injunction or other order or decree which prevents
the
consummation of the purchase and sale of the Interest and the other transactions
contemplated by this Agreement shall have been issued and remain in effect,
and
(ii) no statute, rule or regulation shall have been enacted by any state or
federal government or governmental agency which would prevent the consummation
of the purchase and sale of the Interest and the other transactions contemplated
by this Agreement.
ARTICLE
9
CLOSING
PROCEDURES
9.1 Seller’s
Deliveries.
At the
Closing, the Seller shall deliver to the Purchaser the Closing Documents, signed
by the Seller.
9.2 Purchaser’s
Deliveries.
At the
Closing, the Purchaser shall deliver to the Seller (i) the Closing Payment
and
(ii) the Closing Documents, signed by the Purchaser.
ARTICLE
10
COVENANTS
OF PARTIES
10.1 Required
Consents.
Purchaser shall use good faith and diligent efforts to obtain the Required
Consents and to deliver a copy of the same to Seller on or prior to Closing.
Purchaser expressly acknowledges that any request or requirement of Franchisor
for a Property Improvement Plan and/or to upgrade the Hotel or any Hotel
FF&E (as defined in the Management Agreement) or other personalty therein
shall be Purchaser’s sole responsibility and shall be at Purchaser’s sole cost
and expense and notwithstanding anything herein to the contrary, the same is
not
and shall not be a condition precedent to or of Closing.
10.2 CNL
Name.
Immediately following Closing, Purchaser shall cause to be amended the name
of
all entities affiliated with the Partnership or in which Seller had an interest
by virtue of the Interest and which contain the CNL name to remove all
references to Seller and “CNL” therefrom, and shall provide evidence of same to
Seller. Seller shall cooperate with Purchaser in executing necessary documents
in connection with such name changes.
-
9 -
ARTICLE
11
DEFAULT;
TERMINATION RIGHTS; INDEMNITY
11.1 Termination;
Default by Seller.
If the
Closing does not occur because of the failure of a condition precedent under
Section 8.1, Purchaser may terminate this Agreement without liability to either
party except as otherwise provided herein and Escrow Agent shall return the
Deposit to Purchaser. If (a) the Seller defaults under this Agreement (a “Seller
Default”) or (b) the Purchaser has confirmed in writing that the conditions to
its obligation to close in Section
8.1
of this
Agreement have been satisfied (or that it has agreed to waive such conditions)
and a Closing fails to occur for any reason other than a Purchaser Default
or
the failure of any of those conditions precedent to the Seller’s obligations set
forth in Section
8.2,
then
any one, and only one, of the following shall be available to the Purchaser
as
its sole and exclusive remedy: (i) to terminate this Agreement by giving the
Seller written notice of such election and a five (5) business day cure period
after the Seller’s receipt of such written notice, prior to or at the Closing
(which five (5) business day period shall, if necessary, automatically extend
the Closing to the expiration of such five (5) business day period) whereupon,
the Escrow Agent shall promptly return to the Purchaser the Deposit, and the
Parties shall have no further rights or liabilities under this Agreement except
for those provisions which specifically provide that they survive the
termination of this Agreement; or (ii) with respect to a default contemplated
in
(a) or (b) of this Section
11.1,
seek
specific performance of the Seller’s obligations hereunder, provided that the
Purchaser must file a suit for specific performance in the appropriate
jurisdiction within ninety (90) days from the date of delivery by the Purchaser
to the Seller of written notice of such default, and in the event Purchaser
is
unsuccessful in obtaining specific performance, the Escrow Agent shall upon
demand of Purchaser return the Deposit to Purchaser.
11.2 Termination;
Default by the Purchaser.
If the
Closing does not occur because of the failure of a condition precedent under
Section 8.2, the Seller may terminate this Agreement, without liability to
either party except as otherwise provided herein and Escrow Agent shall return
the Deposit to Purchaser. If (a) the Purchaser defaults under this Agreement
(a
“Purchaser Default”) or (b) the Seller has confirmed in writing that the
conditions to its obligation to close in Section
8.2
of this
Agreement have been satisfied (or that it has agreed to waive such conditions)
and a Closing fails to occur for any reason other than a Seller Default or
the
failure of any condition precedent to Purchaser’s obligation as set forth in
Section
8.1,
then
the Seller may, after written notice to the Purchaser of such default and a
five
(5) business day cure period after the Purchaser’s receipt of such written
notice prior to or at the Closing (which five (5) business day period shall,
if
necessary, automatically extend the Closing to the expiration of such five
(5)
business day period), as its sole and exclusive remedy, terminate this Agreement
by written notice to the Purchaser in which event the Seller shall receive
the
Deposit as liquidated damages for such default, the amount of which Deposit
the
Purchaser and the Seller agree is not punitive or a penalty but is just, fair
and reasonable, and the Escrow Agent shall immediately pay the Deposit to the
Seller. Upon payment of the Deposit to the Seller, the Parties shall have no
further rights or liabilities under this Agreement except for those provisions
which specifically provide that they survive the termination of this
Agreement.
11.3 Termination
by Mutual Consent.
This
Agreement may be terminated at any time prior to the Closing, by mutual written
consent of the Parties, in which case the Parties shall jointly
instruct the Escrow Agent to return the Deposit to the Purchaser and the Parties
shall have no further rights or liabilities under this Agreement except for
those provision which specifically provide that they survive the termination
of
this Agreement.
-
10 -
11.4 Indemnity.
A. Effective
upon and following the Closing, the Seller shall indemnify the Purchaser, its
Affiliates and its and their respective partners, officers, directors,
employees, agents and representatives (each a “Purchaser Indemnified Party”) and
hold each of them harmless against any out-of-pocket damages, costs,
liabilities, losses, judgments, taxes, penalties, fines, expenses or other
costs, including reasonable attorney’s fees, costs of defense and costs of
collection but not lost profits, consequential damages or punitive damages
(collectively, “Losses”) incurred by the Purchaser Indemnified Parties with
respect to: (i) any breach of any of the representations and warranties made
by
the Seller in this Agreement; and (ii) any breach of the covenants and
agreements made by the Seller in this Agreement or any of the Closing Documents;
provided, however, that (x) no amounts shall be payable by the Seller unless
and
until the aggregate amount otherwise payable by the Seller in the absence of
this clause exceeds the sum of One Hundred Thousand Dollars ($100,000) (the
“Deductible”), in which event the Seller shall be liable to the Purchaser for
the amount (if any) in excess of the Deductible up to a maximum amount not
to
exceed twenty percent (20%) of the Closing Payment; provided, however, with
respect to any defect in Seller’s title to the Interest or liens or claims upon
the Interest at the time of Closing, Seller shall be liable to the Purchaser
for
damages not to exceed the amount of the Closing Payment. All representations
and
warranties shall terminate twelve (12) months after Closing if no written claim
has been made.
B. Effective
upon and following the Closing, the Purchaser shall indemnify the Seller, its
Affiliates and its and their respective partners, officers, directors,
employees, agents and representatives (each a “Seller Indemnified Party”) and
hold each of them harmless against any Losses incurred by the Seller Indemnified
Parties with respect to: (i) any breach of any of the representations and
warranties made by the Purchaser in this Agreement; and (ii) any breach of
the
covenants and agreements made by the Purchaser in this Agreement or any of
the
Closing Documents; provided, however, that (x) no amounts shall be payable
by
the Purchaser unless and until the aggregate amount otherwise payable by the
Purchaser in the absence of this clause exceeds the sum of the Deductible,
in
which event the Purchaser shall be liable to Seller for the amount (if any)
in
excess of the Deductible up to a maximum amount not to exceed twenty percent
(20%) of the Closing Payment. All representations and warranties shall terminate
twelve (12) months after Closing if no written claim has been made.
C. Effective
upon and following the Closing, the Purchaser shall also indemnify the Seller
Indemnified Parties, and hold each of them harmless from and against any and
all
Losses incurred by the Seller Indemnified Parties with respect to or under
the
Franchise Agreement and the Mortgage Debt and any liability which Seller may
have or incur thereunder, and which Purchaser has not caused to be fully
released effective as of the Closing, including, without limitation, any such
liability which Seller may incur as a result of any claims, demands, or suits
asserted against Seller by Mortgage Lender, Franchisor, Manager or any other
party, together with interest and penalties thereon, and all costs, expenses
and
fees incurred in defending any such claim, suit or action, including reasonable
attorneys’ fees at trial and appellate court levels. The
Parties acknowledge that until Closing, the Partnership Agreement shall govern
the liability of the Parties, but as of Closing Purchaser shall indemnify Seller
as provided herein. This provision shall survive Closing.
-
11 -
11.5 Indemnification
Procedures.
Upon
the occurrence of any event giving rise to a claim for indemnification (an
“Indemnification Claim”) under any provision of this Agreement or any Closing
Document, the Party seeking indemnification (the “Indemnified Party”) shall
promptly notify the other Party (the “Indemnitor”) of such Indemnification Claim
and provide the Indemnitor with copies of any documents describing or otherwise
bearing on the subject matter of such indemnification obligation; provided,
however, that the failure to notify Indemnitor shall not relieve Indemnitor
from
any liability which Indemnitor may have under the Indemnification Claim except
to the extent that it has been materially prejudiced by such failure. Indemnitor
shall be entitled to participate in any pending or threatened claim, action,
suit or proceeding in respect of the Indemnification Claim and, to the extent
that it wishes, assume the defense thereof with counsel reasonably satisfactory
to the Indemnified Party.
The
Indemnitor will not settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect of
the
Indemnification Claim unless, (i) Indemnitor shall have given the Indemnified
Party reasonable prior written notice thereof and shall have obtained an
unconditional release of the Indemnified Party from all liability arising out
of
such claim, action, suit or proceeding, or (ii) Indemnitor reaffirms in writing
its indemnity obligations hereunder regardless of Applicable Laws to the
contrary. As long as Indemnitor has complied with its obligations to defend
and
indemnify, Indemnitor shall not be liable for any settlement made by the
Indemnified Party without the consent of Indemnitor (which consent shall not
be
unreasonably withheld or delayed).
ARTICLE
12
MISCELLANEOUS
PROVISIONS
12.1 Notices.
All
notices shall be given by certified mail, overnight delivery service,
telecopier, or hand delivery, and addressed as follows:
If
to the
Seller:
CNL
Hospitality Partners, LP
c/o
CNL
Hospitality Corp.
000
Xxxxx
Xxxxxx Xxxxxx
Xxxxx
000
Xxxxxxx,
XX 00000
Attention:
Xx. Xxxxxx Xxxxxxx
Fax:
000-000-0000
-
12 -
With
a
copy to:
Xxxxxxx
X. Xxxxxx, Esq.
Lowndes,
Drosdick, Doster, Xxxxxx & Xxxx, P.A.
000
Xxxxx
Xxxx Xxxxx
Xxxxxxx,
Xxxxxxx 00000
Fax:
000-000-0000
If
to
Purchaser:
Hersha
Hospitality Limited Partnership
000
Xxxxxxxx Xxxxx
Xxx
X
Xxx
Xxxxxxxxxx, XX 00000
Attention:
Xx. Xxxx X. Xxxx
Fax:
000-000-0000
With
a
copy to:
Shah
& Xxxxx, LLP
000
Xxxxxx Xxxxxx, 0xx
Xxxxx
Xxxxxxxxxxxx,
XX 00000
Attention:
Lok Mahapatra, Esquire
Fax:
000-000-0000
12.2 Availability
of Counsel.
Each of
the parties acknowledges that it has reviewed this Agreement with independent
legal counsel of its choosing or has waived its right to do so. The Parties
acknowledge that this Agreement has been negotiated and that each of them has
had equal input as to the drafting and construction of this Agreement and,
accordingly, the Parties intend that a court construing this Agreement shall
not
construe it more strictly against either of them for any reason
whatsoever.
12.3 Survival.
The
provisions of this Agreement, including, without limitation, Section 11.4(c),
other than the obligations of the Parties to be fulfilled at the Closing, will
survive the Closing and remain fully enforceable. Representations and warranties
shall survive for a period of twelve (12) months from the Closing.
12.4 Severability.
If any
provision of this Agreement is determined by appropriate judicial authority
to
be illegal or otherwise unenforceable, such provision shall be given its nearest
legal meaning or otherwise be construed as such authority determines, and the
remainder of this Agreement shall remain in full force and effect.
12.5 Binding
Effect.
This
Agreement is binding upon and shall inure to the benefit of the Parties and
their successors and the permitted assigns of the Purchaser. The Purchaser
may
not assign this Agreement, except to an affiliate of the Purchaser; provided
that the assignee assumes the obligations of the Purchaser hereunder and
provided Purchaser shall remain jointly liable for all obligations of Purchaser
hereunder before and following Closing. Notwithstanding the foregoing, any
permitted assignment by Purchaser shall not relieve the Purchaser of any of
its
obligations under this Agreement. Seller may not assign this
Agreement.
-
13 -
12.6 Entire
Agreement.
This
Agreement contains the entire agreement (including the representations and
warranties) between the Parties pertaining to the subject matter set forth
herein and the Parties have not made any representations or warranties to each
other, either oral or written, other than those contained herein or in the
documents contemplated hereunder. This Agreement may not be amended or otherwise
modified, except by a writing executed by both of the Parties.
12.7 Brokers.
Each of
the Parties represents and warrants that it has not contracted for the services
of any brokers in connection with this Agreement, and each of such Parties
shall
indemnify, defend and hold the other Party harmless from any damages (including
attorney’s fees and costs) in the event that any claim is made against such
other Parties on account of any services provided by a broker hired by the
indemnifying Parties.
12.8 Public
Announcements.
Each of
the Parties shall have the right to make a public announcement regarding the
transaction described in this Agreement, provided, however, that, prior to
and
as a condition precedent to such public announcement, the other Party shall
approve the timing, form and substance of any such public announcement, except
if any of the Parties is required to make a public announcement under any
securities law, the Party making such public announcement may do so only after
having provided the other Party with a copy of such public announcement and
only
as long as such public announcement is made in strict accordance with the
applicable law requiring such public announcement be made. Further the Purchaser
and the Seller may also make such other disclosures to their respective
officers, directors, partners, legal counsel, advisors and accountants and
other
service providers with a need to know and as may be required by applicable
law.
In all other respects, the Parties agree that this Agreement shall be
confidential and neither Party may make any disclosures or announcements
concerning the same without the prior written consent of the other
Party.
12.9 Governing
Law.
This
Agreement shall be construed under, and governed by, the Applicable Laws without
regard to its conflict of laws principles.
12.10
Jurisdiction
and Venue.
Each
Party hereto agrees and submits to the personal jurisdiction of the state and
federal courts sitting in the State of Delaware. The Parties further agree
that
all disputes and causes of action arising out of this Agreement shall be
resolved in the state courts of Delaware, and each Party hereby waives all
questions of personal jurisdiction and venue of such courts, including, without
limitation, the claim or defense therein that such courts constitute an
inconvenient forum.
12.11
Attorney
Fees.
In any
action or proceeding between any of the Parties regarding this Agreement or
its
enforcement, the prevailing party in such action or proceeding shall be entitled
to collect and recover from the non-prevailing Party or Parties all costs of
such action or proceeding incurred by such prevailing Party, including, but
not
limited to, reasonable attorney fees and costs through all levels of
proceedings, including appeals.
12.12
Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed an
original and all of which shall together constitute one and the same instrument.
A facsimile, telecopy or other reproduction of this Agreement may be executed
by
the Parties (in counterparts or otherwise). Signatures received through
facsimile transmission shall
bind the Party whose signature is so received as if such signature were an
original. At the request of any Party, the parties hereto agree to execute
an
original of this Agreement as well as any facsimile, telecopy or other
reproduction.
-
14 -
12.13 No
Third Party Beneficiaries.
No
Person other than Seller and Purchaser is intended to be a beneficiary of the
rights and obligations of either Seller or Purchaser under this
Agreement.
(THE
REMAINDER OF THIS PAGE WAS LEFT BLANK INTENTIONALLY; THE PARTIES’ SIGNATURES ARE
ON THE FOLLOWING PAGE)
-
15 -
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
and
year first above written.
|
SELLER:
CNL
HOSPITALITY PARTNERS, LP,
a
Delaware limited partnership
By:
CNL Hospitality GP Corp.,
its
general partner
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
PURCHASER:
|
||
|
HERSHA
HOSPITALITY LIMITED PARTNERSHIP,
a
limited partnership formed under the laws of the Commonwealth of
Virginia
|
||
|
By:
Hersha Hospitality Trust, a Maryland Business
Trust, its general partner
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
JOINDER
OF ESCROW AGENT
Escrow
Agent hereby joins in the execution of this Agreement solely for the purpose
of
acknowledging and agreeing to the provisions of Section 3.6 hereof.
|
Lowndes,
Drosdick, Doster, Xxxxxx & Xxxx, P.A.
(“Escrow Agent”)
|
|
|
By:
Xxxxxxx X. Xxxxxx
|
-
16 -
EXHIBIT
“A”
ASSIGNMENT
OF LIMITED PARTNERSHIP INTEREST IN LIMITED PARTNERSHIP
(HT/CNL
METRO HOTELS, L.P.)
THIS
ASSIGNMENT OF LIMITED PARTNERSHIP INTEREST
(the
“Assignment”) is made and executed as of the _____ day of _________________,
2006 by CNL
HOSPITALITY PARTNERS, LP,
a
Delaware limited partnership (hereinafter referred to as “Assignor”), to and in
favor of __________________________________________________,
a
__________________________________________ (hereinafter referred to as
“Assignee”);
W
I T N E S S E T H:
WHEREAS,
Assignor owns a sixty-six and 66.7/100 percent (66.667%) limited partnership
interest in HT/CNL Metro Hotels, L.P., a Delaware limited partnership
(hereinafter referred to as the “Partnership”); and
WHEREAS,
Assignor has agreed to transfer its entire sixty-six and 66.7/100 percent
(66.667%) interest in the Partnership to Assignee;
NOW,
THEREFORE, FOR AND IN CONSIDERATION
of the
sum of ____________________________________ Dollars and No/100
($_______________), and other good and valuable consideration, the receipt
and
sufficiency of which is hereby acknowledged, Assignor hereby grants, bargains,
sells, transfers, assigns and conveys unto Assignee, absolutely, and not as
security or upon any condition, its entire sixty-six and 66.7/100 percent
(66.667%) limited partnership interest in the Partnership and all of Assignor’s
other rights, title and interest in the Partnership, including, but not limited
to, Assignor’s rights to distributions, capital accounts and equity
interests.
TO
HAVE AND TO HOLD
until
Assignee and its successors and assigns forever;
-
1 -
IN
WITNESS WHEREOF,
the
Assignor has caused these presents to be executed in manner and form sufficient
to bind them as of the date first written above.
|
Witnesses:
|
CNL
HOSPITALITY PARTNERS, LP,
a
Delaware
limited partnership
|
|
|
By:
CNL
Hospitality GP Corp., a Delaware
|
||
|
Name:
|
corp.,
its general partner
|
|
|
|
By:
|
||
|
Name:
|
|
Name:
|
|
|
Title:
|
|||
-
2 -
ACCEPTANCE
OF ASSIGNMENT AGREEMENT
The
undersigned Assignee hereby accepts the foregoing Assignment.
|
By:
|
||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
-
3 -
EXHIBIT
“B-1”
CERTIFICATE
OF REPRESENTATIONS AND WARRANTIES
OF
SELLER
This
Certificate of Representations and Warranties of Seller (“Certificate”)
is
given pursuant to Article 8 of that certain Purchase and Sale Agreement (the
“Purchase
Agreement”)
dated
as of the _____ day of ________________, 2006, by and between CNL
HOSPITALITY PARTNERS, LP,
a
Delaware limited partnership (“Seller”),
and
HERSHA
HOSPITALITY LIMITED PARTNERSHIP,
a
limited partnership organized under the laws of the Commonwealth of Virginia
(“Purchaser”).
Seller hereby certifies to Purchaser that as of the date hereof, the
representations and warranties of Seller set forth in Article 5 of the Purchase
Agreement are true and correct in all material respects as though made at and
as
of the date hereof.
IN
WITNESS WHEREOF,
Seller
has executed this Certificate in the Purchase Agreement this _____ day of
_____________________, 2006.
|
Signed,
sealed and delivered in the
Presence
of the following witnesses:
|
CNL
HOSPITALITY PARTNERS, LP,
a
Delaware limited partnership
|
||
|
By:
CNL
Hospitality GP Corp., a Delaware
|
|||
|
corp.,
its general partner
|
|||
|
Signature
of Witness
|
|||
|
Printed
Name of Witness
|
By:
|
||
|
Name:
|
|||
|
Title:
|
|||
|
Signature
of Witness
|
|||
|
|
|||
|
Printed
Name of Witness
|
|||
EXHIBIT
“B-2”
CERTIFICATE
OF REPRESENTATIONS AND WARRANTIES OF PURCHASER
This
Certificate of Representations and Warranties of Purchaser (“Certificate”)
is
given pursuant to Article 8 of that certain Purchase and Sale Agreement (the
“Purchase
Agreement”)
dated
as of the _____ day of ________________, 2006, by and between HERSHA
HOSPITALITY LIMITED PARTNERSHIP,
a
limited partnership organized under the laws of the commonwealth of Virginia
(“Purchaser”),
and
CNL
HOSPITALITY PARTNERS, LP,
a
Delaware limited partnership (“Seller”).
Purchaser hereby certifies to Seller that as of the date hereof, the
representations and warranties of Purchaser set forth in Article 6 of the
Purchase Agreement are true and correct in all material respects as though
made
at and as of the date hereof.
IN
WITNESS WHEREOF,
Purchaser has executed this Certificate in the Purchase Agreement this _____
day
of _____________________, 2006.
|
Signed,
sealed and delivered in the
Presence
of the following witnesses:
|
PURCHASER:
HERSHA
HOSPITALITY LIMITED PARTNERSHIP,
a
limited partnership formed under the laws of the Commonwealth of
Virginia
|
||
|
Signature
of Witness
|
|||
|
its
general partner
|
|||
|
Printed
Name of Witness
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Signature
of Witness
|
Title:
|
||
|
Printed
Name of Witness
|
|||
