EXHIBIT 10.25
PUT/CALL AGREEMENT
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PUT/CALL AGREEMENT (the "Agreement"), dated as of March 27, 2000, by and between
Sunburst Hospitality Corporation, a Delaware corporation ("Sunburst") and Choice
Hotels International, Inc., a Delaware corporation ("Choice").
R E C I T A L S :
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A. Sunburst or its subsidiaries (collectively, "Sunburst") is
the owner of the Assets (as hereinafter defined).
B. Contemporaneously with the execution and delivery of this
Agreement, Sunburst and Choice are entering into a certain second omnibus
amendment agreement (the "Omnibus Amendment") dated February 29, 2000, pursuant
to which Sunburst and Choice are amending certain provisions of the Transaction
Documents (as defined in the Omnibus Amendment).
C. In connection with the execution and delivery of the Omnibus
Amendment, Sunburst desires to grant to Choice the Call Option (as hereinafter
defined), Choice desires to grant to Sunburst the Put Option (as hereinafter
defined) and Choice and Sunburst desire to acquire the Call Option and Put
Option, respectively, in each case upon the terms and conditions set forth
herein.
A G R E E M E N T :
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NOW THEREFORE, in consideration of the mutual agreements herein
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:
ARTICLE I
PUT/CALL OPTIONS
Section 1.1. Grant of Call Option; Exercise. (a) Upon all of
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the terms, covenants and conditions set forth herein, Sunburst hereby grants to
Choice the exclusive option to purchase (the "Call Option") the following Assets
(collectively, the "Assets"):
(i) all right, title and interest of Sunburst in and to
that certain parcel of real property located in
Pittsburgh, Pennsylvania and more particularly
described in Schedule A-1 to this Agreement (such
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parcel, together with all buildings, improvements and
other structures constituting real
property or fixtures now or from time to time
hereafter located on such parcel and all easements,
rights and appurtenances belonging or appertaining
thereto, the "Pennsylvania Property");
(ii) all right, title and interest of Sunburst in and to
that certain parcel of real property located in
Greer, South Carolina and more particularly described
in Schedule A-2 to this Agreement (such parcel,
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together with all buildings, improvements and other
structures constituting real property or fixtures now
or from time to time hereafter located on such parcel
and all easements, rights and appurtenances belonging
or appertaining thereto, the "South Carolina
Property");
(iii) all right, title and interest of Sunburst in and to
that certain parcel of real property located in
Brentwood, Tennessee and more particularly described
in Schedule A-3 to this Agreement (such parcel,
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together with all buildings, improvements and other
structures constituting real property or fixtures now
or from time to time hereafter located on such parcel
and all easements, rights and appurtenances belonging
or appertaining thereto, the "Tennessee Property";
together with the Pennsylvania Property and the South
Carolina Property, collectively, the "Properties");
(iv) all right, title and interest of Sunburst in and to
all tangible and intangible assets of any kind or
nature (other than those certain assets set forth in
Schedule B-1 to this Agreement (such assets, the
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"Pennsylvania Excluded Assets")) relating to or used
in connection with the Pennsylvania Property (such
assets, the "Pennsylvania Other Assets"; together
with the Pennsylvania Property, the "Pennsylvania
Assets");
(v) all right, title and interest of Sunburst in and to
all tangible and intangible assets of any kind or
nature (other than those certain assets set forth in
Schedule B-2 to this Agreement (such assets, the
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"South Carolina Excluded Assets")) relating to or
used in connection with the South Carolina Property
(such assets, the "South Carolina Other Assets";
together with the South Carolina Property, the "South
Carolina Assets");
(vi) all right, title and interest of Sunburst in and to
all tangible and intangible assets of any kind or
nature (other than those certain assets set forth in
Schedule B-3 to this Agreement (such assets, the
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"Tennessee Excluded Assets"; together with the
Pennsylvania Excluded Assets and the South Carolina
Excluded Assets, collectively, the "Excluded
Assets")) relating to or used in connection with the
Tennessee Property
(such assets, the "Tennessee Other Assets"; together
with the Tennessee Property, the "Tennessee Assets");
(b) The Call Option may be exercised by Choice within the Call
Option Period (as hereinafter defined) with respect to any or all of the
Pennsylvania Assets, the South Carolina Assets and the Tennessee Assets, in each
case, taken as a whole. The Call Option shall be exercisable by Choice at any
time during the period (the "Call Option Period") commencing on March 27, 2000
and expiring at 12:00 midnight New York time on June 30, 2000 by written notice
delivered by Choice to Sunburst in the manner set forth in Section 10.9 hereof
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prior to the expiration of the Call Option Period. Such notice shall
specifically state that Choice is exercising its Call Option with respect to the
Pennsylvania Assets, the South Carolina Assets and/or the Tennessee Assets, in
each case, taken as a whole (the Assets specifically described in such notice,
the "Call Option Assets"). In the event Choice shall fail to exercise the Call
Option on or before the expiration of the Call Option Period, the Call Option
shall be null and void and of no further force or effect.
Section 1.2. Grant of Put Option; Exercise. (a) Upon all of the
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terms, covenants and conditions set forth herein, Choice hereby grants to
Sunburst the exclusive option to require Choice to purchase (the "Put Option")
the Pennsylvania Assets, the South Carolina Assets and/or the Tennessee Assets
solely to the extent that Choice shall fail to exercise its Call Option with
respect to any thereof.
(b) The Put Option may be exercised by Sunburst within the Put
Option Period (as hereinafter defined) with respect to any or all of the
Pennsylvania Assets, the South Carolina Assets and the Tennessee Assets, in each
case taken as a whole, solely to the extent that Choice shall fail to exercise
its Call Option with respect to any thereof. The Put Option shall be exercisable
by Sunburst at any time during the period (the "Put Option Period") commencing
on July 1, 2000 and expiring at 12:00 midnight New York time on July 31, 2000,
by written notice delivered by Sunburst to Choice in the manner set forth in
Section 10.9 hereof prior to the expiration of the Put Option Period. Such
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notice shall specifically state that Sunburst is exercising its Put Option with
respect to the Pennsylvania Assets, the South Carolina Assets and/or the
Tennessee Assets, in each case, taken as a whole (the Assets specifically
described in such notice, the "Put Option Assets"; together with the Call Option
Assets, as applicable, the "Purchased Assets"). In the event Sunburst shall fail
to exercise the Put Option on or before the expiration of the Put Option Period,
the Put Option and this Agreement shall be null and void and of no further force
or effect. Such Put Option is subject to extension pursuant to Section 6.6
hereof.
ARTICLE II
PURCHASE PRICE
Subject to the prorations provided for in Section 6.5 of this
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Agreement, the purchase price (the "Purchase Price") to be paid by Choice to
Sunburst for the Pennsylvania Assets, the South Carolina Assets and/or the
Tennessee Assets, as applicable, shall be the amount set forth in Schedule C
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hereto with respect to such Purchased Assets, in each case payable by wire
transfer of immediately available funds at closing to an account designated by
Sunburst prior to closing.
ARTICLE III
TITLE MATTERS
Section 3.1. Title Commitments. Attached hereto as Schedules D-1,
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D-2 and D-3 are the title insurance commitments (the "Title Commitments") issued
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by Commonwealth Title Insurance Company and First American Title Insurance
Company (collectively, the "Title Insurer"), showing the current state of title
of the Pennsylvania Property, the South Carolina Property and the Tennessee
Property, respectively. Choice hereby approves the state of title as shown in
the Title Commitments, as such Title Commitments have been marked by Choice,
except for any material matters which would be disclosed by a survey. The title
exceptions shown in the Title Commitments, excluding the exceptions marked out
thereon by Choice and any material matters which would be disclosed by a survey,
are hereinafter called the "Approved Title Exceptions."
Section 3.2. Title Insurance. Choice's fee title to each of the
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Properties being transferred pursuant to the exercise of either the Put Option
or the Call Option (each such Property, a "Purchased Property", collectively,
the "Purchased Properties") shall be insured at closing by an American Land
Title Association ("ALTA") owner's extended coverage policy of title insurance
to be issued by the Title Insurer in the amount and containing such endorsements
as Choice may require (but such amounts not to exceed those specified in
Schedule C) (collectively, the "Title Policy"), showing title vested in Choice
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subject only to the following exceptions (collectively, the "Permitted Title
Exceptions"):
(i) Liens for real property taxes and special assessments, if
any, to the extent not delinquent; and
(ii) Approved Title Exceptions.
Section 3.3. Liens. Sunburst agrees that it shall not create any
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encumbrance, lien, charge or other matter which would affect or encumber title
to any Property during the term of this Agreement. In the event that any matter
other than any Permitted Title Exception affects title to any Property prior to
closing and Choice objects thereto, Sunburst shall either: (i) promptly
discharge such matter or otherwise cause such matter to be removed as an
exception to the Title Policy issued on the Closing Date (as hereinafter
defined) with respect to such Property or (ii) pay to the Title Insurer, in
escrow, an amount sufficient to satisfy such matter and Sunburst shall proceed
with resolving such matter.
Section 3.4. Survey. Within thirty (30) days after the date of
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this Agreement, Sunburst shall provide Choice with a survey for each Property
(and all improvements thereon). Each survey shall:
(i) be prepared by a surveyor or engineer licensed to
perform surveys in the state in which the applicable
Property is located;
(ii) indicate all improvements on the applicable Property;
(iii) be certified by the surveyor to Choice (or its
designee); and
(iv) be sufficiently detailed for the Title Insurer to
delete the so-called standard survey exceptions from,
and issue a comprehensive endorsement (or its
equivalent) to the applicable Title Policy.
Section 3.5. UCC Search. Sunburst, at is expense, shall
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provide Choice with a current Uniform Commercial Code search conducted in the
appropriate state and local jurisdictions against each Property and against
Sunburst, prepared by a reputable search firm.
ARTICLE IV
INSPECTIONS
For a period of 45 days after Choice's written notice of the
exercise of the Call Option, Choice shall have the right at Choice's sole cost
and expense to enter onto any Property (either through its employees or
designated agents and representatives) at reasonable times and in a reasonable
manner after giving reasonable notice to Sunburst's Vice President, Extended
Stay Hotel Operations for the purpose of making such inspections as Choice deems
necessary or appropriate in connection with this Agreement. Sunburst shall give
Choice full and free access to all its books, contracts, leases, commitments,
documents, records and other information relating to the Assets and during such
period Sunburst shall furnish Choice
promptly with all financial and operating data and working papers and other
information of Sunburst relating to the Assets.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.1. Choice's Representations, Warranties and Covenants.
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As an inducement to Sunburst to enter into this Agreement, Choice represents,
warrants and covenants that:
(i) Choice is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware;
(ii) Choice has full corporate right, power and authority to
enter into and perform its obligations under this
Agreement and the other instruments and documents
contemplated herein to be executed and performed by it;
and
(iii) The execution and delivery of this Agreement and such
other instruments and documents and the consummation of
the transactions contemplated hereby and thereby (a)
have been duly authorized by all necessary action on
the part of Choice, (b) do not require any consent or
approval of or notice to any government authority or
any other person, (c) will not result in the breach of
the certificate of incorporation or by-laws of Choice
or any material agreement or other material instrument
to which Choice is a party or to which Choice or its
assets are bound and (d) will not conflict with or
result in the breach of any law, statute, regulation or
requirement of any government authority or any
judgment, writ, injunction or decree of any court or
governmental agency to which Choice or its assets are
subject.
Section 5.2. Sunburst's Representations, Warranties and
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Covenants. As an inducement to Choice to enter into this Agreement, Sunburst
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represents, warrants and covenants as follows:
(i) Sunburst is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware;
(ii) Sunburst has full corporate right, power and authority
to enter into and perform its obligations under this
Agreement and the other instruments
and documents contemplated herein to be executed and
performed by it including, without limitation, those
conveying its right, title and interest in the
Assets;
(iii) The execution and delivery of this Agreement and such
other instruments and documents and the consummation
of the transactions contemplated hereby and thereby
(a) have been duly authorized by all necessary action
on the part of Sunburst, (b) do not require any
consent or approval of or notice to any governmental
authority or any other person, (c) will not result in
the breach of the certificate of incorporation or by-
laws of Sunburst or any material agreement or other
material instrument to which Sunburst is a party or
to which Sunburst or its assets are bound and (d)
will not conflict with or result in the breach of any
law, statute, regulation or requirement of any
government authority or any judgment, writ,
injunction or decree of any court or governmental
agency to which Sunburst or its assets are subject;
(iv) Sunburst has not made an assignment for the benefit
of creditors, nor has Sunburst filed, or had filed
against it, any petition in bankruptcy or insolvency;
(v) Sunburst is not a "foreign person" within the meaning
of section 1445 of the United States Internal Revenue
Code of 1986, as amended, and the regulations issued
thereunder;
(vi) As of the Closing Date, Sunburst will have the right,
power and authority to sell and convey the Assets to
Choice and, other than this Agreement, Sunburst has
not entered into any agreement granting to any person
any option, right of first refusal or similar right
with respect to the right, title and interests in the
Assets held by Sunburst;
(vii) Except as set forth in Exhibit A hereto: (a) there
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are no litigation or governmental, administrative or
arbitration proceedings or investigations pending or,
to Sunburst's knowledge, threatened against Sunburst
(solely as such affects the Assets) or any of the
Assets, (b) there are no unsatisfied judgments,
arbitration awards or judicial orders against
Sunburst or any of the Assets and (c) there are no
pending or, to Sunburst's knowledge, threatened
complaints, charges, petitions or claims against
Sunburst (solely as such affects the Assets) or any
of the Assets;
(viii) Except as disclosed in Exhibit A, Sunburst has not
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received any written notice from any governmental
authority with respect to any actual or
threatened taking of any of the Assets or any portion
thereof by the exercise of the right of condemnation
or eminent domain;
(ix) There is in full force and effect extended coverage
casualty insurance insuring the Assets, for full
replacement cost; Sunburst shall maintain such
insurance coverage;
(x) The Assets are in good working condition, order and
repair, except reasonable wear and tear, and Sunburst
shall preserve, protect and maintain its respective
business and the Assets, and shall operate all
aspects of its business consistently with established
prior practice and in the ordinary course of its
respective business and shall refrain from engaging
in transactions, making alterations or additions,
entering into agreements (whether written or oral) or
selling, transferring or otherwise disposing of any
of the Assets otherwise than in a manner consistent
with established practice in the ordinary course of
its respective business; and
(xi) Sunburst, to the best of its knowledge, is in
material compliance with each, and is not in material
violation of any law, ordinance or governmental rule
or regulation (including, without limitation, any and
all applicable Environmental Laws (as hereinafter
defined), and building and zoning ordinances) to
which Sunburst's business (solely as it affects the
Assets) or the Assets are subject; Sunburst has not
failed to obtain any license, permit, certificate or
other governmental authorization or inspection
necessary to the ownership or use of the Assets or
the conduct of Sunburst's business (solely as it
affects the Assets); and Sunburst has not received
any written communication that alleges that Sunburst
is not in compliance with any Environmental Laws or
other law, ordinance or governmental rule or
regulation; it being understood that for the purposes
of this Agreement, the term "Environmental Law" shall
mean all applicable laws and regulations of any
governmental authority applicable to the Assets and
relating to (a) pollution or (b) the protection of
employee health or (c) the environment (including
ambient air, surface water, ground water, land
surface, or subsurface strata), including laws and
regulations relating to emissions, discharges,
releases or threatened releases of any chemicals,
pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum and petroleum
products.
Section 5.3. Survival and Indemnity. The truth, accuracy, and
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completeness of each of the representations, warranties and covenants of Choice
and of Sunburst herein set
forth shall constitute a condition precedent to the obligations of Sunburst and
Choice, respectively, hereunder. The parties hereto each agree to indemnify,
defend and hold harmless the other from any claim, demand, liability, loss or
cost (including reasonable attorneys' fees and costs) which the other may
sustain because of any material breach of or inaccuracy in the respective
representations, warranties and covenants of such party set forth in this
Agreement. At closing, Choice and Sunburst shall deliver to each other a
certificate which shall confirm that their respective warranties and
representations contained in this Agreement are in all material respects true
and correct as of the Closing Date. Such representations, warranties and
covenants herein set forth shall survive the Closing Date for the period of the
applicable statute of limitations.
ARTICLE VI
CLOSING
Section 6.1. Closing Date. In the event the Call Option or the
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Put Option shall be exercised, the sale of the Purchased Assets shall be
consummated on the date (the "Closing Date") which is 60 days after either (i)
the date of the exercise of the Call Option by Choice or (ii) the date of the
exercise of the Put Option by Sunburst; provided, however, that if such 60th day
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shall fall on a day which shall not constitute a Business Day (as hereinafter
defined) then the Closing Date shall occur on the immediately succeeding
Business Day. The closing of the sale of the Purchased Assets will take place at
the offices of the escrow agent, with the exact time for closing to be
designated by Choice by written notice to Sunburst.
Section 6.2. Sunburst's Deliveries and Instruments. On the
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Closing Date, Sunburst shall deliver or cause to be delivered to Choice the
following items (all documents shall be duly executed and, to the extent
necessary, acknowledged by Sunburst):
(i) Deed. With respect to each Purchased Property, a deed
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in substantially the form attached as Exhibit B
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hereto executed by Sunburst conveying such Purchased
Property to Choice (each a "Deed", collectively, the
"Deeds"), subject only to Permitted Title Exceptions
along with transfer tax forms or affidavits with
respect to each such Deed as may be required for
recordation of each such Deed in the appropriate
jurisdiction;
(ii) Xxxx of Sale. A duly executed xxxx of sale in
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substantially the form as attached as Exhibit C
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hereto (the "Xxxx of Sale") conveying all tangible
personal property relating to the Purchased
Properties.
(iii) Assignment. An assignment agreement executed by
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Sunburst assigning to Choice all of Sunburst's rights
and obligations under any contracts or
other intangibles relating to the Purchased
Properties, together with copies of documentation
relating thereto;
(iv) Title Insurance. A Title Policy for each Purchased
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Property in such form as described in Article III
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hereof, the cost of which will be shared equally by
Sunburst and Choice;
(v) Title Affidavits. Such affidavits and other
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documents as may be reasonably requested by the Title
Insurer to issue each Title Policy in accordance with
the terms of the Title Commitments, as marked by
Choice, with respect to each Purchased Property;
(vi) Survey. To the extent not previously delivered to
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Choice, the Surveys in such form as described in
Article III hereof;
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(vii) Nonforeign Affidavit. An affidavit executed by
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Sunburst confirming that Sunburst is not a foreign
person within the purview of 26 U.S.C.(S) 1445 and
the regulations issued thereunder;
(viii) Evidencing Authority. Such resolutions,
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certificates of good standing and incumbency
certificates and other evidence of authority with
respect to Sunburst as may be reasonably requested by
Choice or the Title Insurer;
(ix) Certificate. A certificate of Sunburst confirming
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the continued accuracy of the warranties and
representation made by it in this Agreement in
accordance with Section 5.2 hereof; and
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(x) Additional Documents. Such additional documents as
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may be reasonably requested by Choice or the Title
Insurer to consummate the sale of the Purchased
Assets.
Delivery of each of the foregoing shall be a condition precedent to Choice's
obligation to consummate the purchase of the Purchased Asset.
Section 6.3. Choice's Deliveries and Instruments. On the
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Closing Date, Choice shall deliver or cause to be delivered to Sunburst the
following items (all documents shall be duly executed and, to the extent
necessary, acknowledged by Choice):
(i) Payment. The payment of the Purchase Price as
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contemplated in Article II hereof with respect to the
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Purchased Assets;
(ii) Assumption Agreement. An assumption agreement
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executed by Choice assuming Sunburst's obligations
and duties, prospectively from and after the Closing
Date, under the contracts and intangibles, if any,
which are the subject of Section 6.2(iii) hereof;
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(iii) Title Affidavits. Such affidavits and other
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documents as may be reasonably requested by the Title
Insurer to issue each Title Policy in accordance with
the terms of the Title Commitment, as marked by
Choice, with respect to each Purchased Property;
(iv) Evidence of Authority. Such resolutions, certificates
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of good standing and incumbency certificates and
other evidence of authority with respect to Choice,
any nominee of Choice acting under this Agreement and
the person or persons acting on behalf of Choice or
Choice's nominee as might be reasonably requested by
Sunburst or the Title Insurer;
(v) Certificate. A certificate of Choice confirming the
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continued accuracy of the warranties and
representations made by it in this Agreement in
accordance with Section 5.3 hereof; and
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(vi) Additional Documents. Such additional documents as
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may be reasonably requested by Sunburst or the Title
Insurer to consummate the sale of the Purchased
Assets to Choice.
Section 6.4. Possession. Subject to Choice's fulfillment of its
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obligations under "6.3, Possession of the Purchased Assets shall be delivered by
Sunburst to Choice on or before the close of business on the Closing Date free
from all parties claiming rights to possession of or having claims against the
Purchased Assets other than pursuant to contractual obligations approved or to
be assumed by Choice or pursuant to this Agreement and the other documents
relating thereto. If Sunburst shall fail so to deliver possession on the Closing
Date, Sunburst shall be subject to eviction and shall be additionally liable to
Choice for damages.
Section 6.5. Prorations. All real estate taxes, assessments,
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utility charges, water and sewer charges, and other items reasonably subject to
proration shall be prorated as of the Closing Date.
Section 6.6 Extension of Put Option Period. If the Call Option
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has been exercised and Choice or its assignee fails to close on the Purchase
Asset on the Closing Date for any reason other than Sunburst's breach of or
failure to comply with its obligations under this Agreement, then the Put Option
Period for such Purchased Asset shall be extended to the later of thirty days
from the Closing Date or October 31, 2000.
ARTICLE VII
ASSIGNMENT
Neither this Agreement nor any of the rights hereunder may be assigned for any
purpose whatsoever without the written consent of the parties hereto (which
consent shall not be unreasonably withheld or delayed); provided, however, that
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if the Put Option or Call Option has been exercised with respect to a Purchased
Asset(s), then Choice, upon notice to Sunburst prior to the Closing Date, may
assign its right, title and interest under the following sections of this
Agreement solely with respect to such Purchased Asset(s): Article II, Article
III, Article IV, Article V, Article VI, Article VIII, Article IX and Article X;
and assignee shall assume Choice's obligations under such sections.
ARTICLE VIII
CASUALTY AND CONDEMNATION
Section 8.1. Waiver. Sunburst and Choice waive the provisions of
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all applicable laws relating to the occurrence of a casualty or condemnation
between the date hereof and the Closing Date, and Sunburst and Choice agree that
notwithstanding the occurrence of any casualty or condemnation, the transactions
contemplated by this Agreement shall be fully consummated in accordance with the
terms hereof.
Section 8.2. Obligation to Rebuild. In the event of any such
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casualty or condemnation, on or prior to the Closing Date, then the Closing Date
shall be delayed until such time as Sunburst has rebuilt or restored such
affected Assets to substantially the same condition of such Assets prior to the
casualty or condemnation.
ARTICLE IX
Default
Section 9.1. Choice's Default. Choice agrees that any default by
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Choice hereunder or any misrepresentation by Choice hereunder, which default or
misrepresentation materially adversely affects the ability of Choice to perform
its obligations under this Agreement or any of the other documents or
instruments contemplated herein to be executed or performed by Choice, shall
each constitute a default by Choice. Sunburst hereby agrees that the failure of
Choice to consummate the transactions contemplated hereunder as a result of any
court or governmental action, law, order or decree taken, enacted or declared
after the date
hereof and not initiated or consented to by Choice prohibiting or staying the
consummation of the transaction contemplated hereunder shall not constitute a
default by Choice hereunder. If any such action is brought against Choice,
Choice shall use commercially reasonable efforts to defend such action and if
any such order or decree is declared against Choice, Choice shall use
commercially reasonable efforts to vacate or lift such order or decree.
Section 9.2. Sunburst's Default. Sunburst agrees that any default
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by Sunburst hereunder or a misrepresentation by Sunburst hereunder, which
default or misrepresentation materially adversely affects the ability of
Sunburst to perform its obligations under this Agreement or any of the other
documents or instruments contemplated herein to be executed or performed by
Sunburst, shall each constitute a default by Sunburst. Choice hereby agrees that
the failure of Sunburst to consummate the transactions contemplated hereunder as
a result of any court or governmental action, law, order or decree taken,
enacted or declared after the date hereof and not initiated or consented to by
Sunburst prohibiting or staying the consummation of the transaction contemplated
hereunder shall not constitute a default by Sunburst hereunder. If any such
action is brought against Sunburst, Sunburst shall use commercially reasonable
efforts to defend such action and if any such order or decree is declared
against Sunburst, Sunburst shall use commercially reasonable efforts to vacate
or lift such order or decree.
Section 9.03. Dispute Resolution. In the event either party shall
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default under this Agreement or any other dispute or claim shall arise
hereunder, such matter shall be resolved in accordance with the applicable
provisions of Section 1.5 of the Omnibus Amendment.
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ARTICLE X
MISCELLANEOUS
Section 10.1. Entire Agreement. This Agreement, the Schedules and
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Exhibits annexed hereto and the Omnibus Amendment contain the entire
understanding of the parties hereto with respect to the subject matter hereof,
and no prior or contemporaneous written or oral agreement or understanding
pertaining to any such matter shall be effective for any purpose.
Section 10.2. Time of Essence. Time is of the essence with
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respect to each provision of this Agreement.
Section 10.3. Certain Fees and Expenses. Choice and Sunburst
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shall pay, in good funds, their respective closing costs and all other items
required to be paid at closing, except as otherwise provided herein. The local
transfer tax, if any, shall be paid at closing
by Choice. Any sales and use tax that may accrue because of this transaction
shall be paid when due by Sunburst.
Section 10.4. Binding Effect. The provisions of this Agreement
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shall inure to the benefit of and be binding upon Sunburst and Choice and their
respective successors and permitted assigns.
Section 10.5. No Waiver. No waiver of any of the provisions of
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this Agreement shall be deemed or shall constitute a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by the party
making the waiver.
Section 10.6. Assurances of Cooperation. The parties hereby
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covenant and agree that they shall at any time prior to and after the Closing
Date and from time to time, execute, acknowledge and deliver, or shall cause to
be done, executed, acknowledged and delivered all such further acts, documents
and any other items as may reasonably be required by the other party in order to
carry out fully and effectuate the transactions herein contemplated in
accordance with the provisions of this Agreement.
Section 10.7. Duplicate Original; Counterparts. This Agreement
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may be executed in any number of duplicate originals and each duplicate original
shall be deemed to be an original. This Agreement may be executed in several
counterparts, each of which counterpart shall be deemed an original instrument
and all of which together shall constitute a single Agreement.
Section 10.8. Modification in Writing. This Agreement may not be
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altered, amended, modified or changed except by an agreement in writing signed
by the parties hereto or their respective successors in interest or permitted
assigns.
Section 10.9. Notices. All notices or other written
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communications hereunder shall be deemed to have been properly given (i) upon
delivery, if delivered in person with receipt acknowledged by the recipient
thereof, (ii) one (1) Business Day after having been deposited for overnight
delivery with any reputable overnight courier service, or (iii) three (3)
Business Days after having been deposited in any post office or mail depository
regularly maintained by the United States Postal Service and sent by registered
or certified mail, postage prepaid, return receipt requested, addressed to the
receiving party at its address set forth below or addressed as such party may
from time to time designate by written notice to the other parties. For purposes
of this Agreement, the term "Business Day" shall mean any day other than
Saturday, Sunday or any other day on which banks are required or authorized to
close in New York, New York. Any notice should be directed to the following
addresses and either party by notice to the other may designate additional or
different addresses for subsequent notices or communications:
To Sunburst: Xxx Xxxxxxxx, Esq.
Sunburst Hospitality Corp.
00000 Xxxxxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
With a copy to: Xxxxx Xxxxxx, Vice President
Sunburst Hospitality Corp.
00000 Xxxxxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
To Choice: 00000 Xxxxxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
Attn: General Counsel
Section 10.10. Appurtenant Agreement. The terms, covenants,
---------------------
conditions and agreements contained herein shall be a burden and appurtenant to
the Properties and shall run with the Properties.
Section 10.11. Headings. The headings and captions contained in
--------
this Agreement are solely for convenience of reference and shall not control or
affect the meaning or construction of any provision hereof.
Section 10.12. Governing Law; Severability. This Agreement shall
---------------------------
be governed by, and shall be construed and enforced in accordance with, the laws
of the state of Maryland without regard to principles of conflicts of laws. Any
provision hereof which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 10.13. Recording. A memorandum of this Agreement
---------
("Memorandum of Put/Call Agreement") in the form attached hereto as Exhibit D
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shall be recorded in the office of the official records of the county or
counties in which the Assets are located ("Recorder's Office"), as appropriate,
contemporaneously with the execution of this Agreement. After the expiration of
the Put Option Period, Choice shall record a release in the Recorder's Office.
Section 10.14. Management of Purchased Assets. In the event
------------------------------
Choice shall exercise its Call Option or Sunburst shall exercise its Put Option,
Sunburst and Choice hereby agree that Sunburst shall operate and manage the
Purchased Assets pursuant to the provisions of a Management Agreement
substantially in the form of Exhibit E annexed hereto.
---------
Section 10.15. Brokerage. Sunburst and Choice each hereby
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represent and warrant to the other that it has not dealt with any broker or
finder or any other person who might be entitled to a fee in connection with the
purchase and sale of the Assets and that no fee or commission is due to any
broker, finder or other person in connection with this Agreement or the sale
contemplated hereby. Sunburst and Choice each hereby indemnify the other and
agree to hold the other harmless from and against any and all claims, demands,
liabilities, losses, judgments, costs and expenses (including, without
limitation, reasonable attorneys' fees) arising directly or indirectly out of
any claim for a fee or commission due to any broker or finder arising out of
facts which contravene the warranties stated in this Section 10.15. The
representations, warranties and agreements contained in this Section 10.15 shall
survive closing.
IN WITNESS WHEREOF, Sunburst and Choice have caused this
Agreement to be duly executed as of the day and year first above written.
CHOICE HOTELS INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. XxXxxxxx
--------------------------------
Name: Xxxxxxx X. XxXxxxxx
Title: Senior Vice President
SUNBURST HOSPITALITY CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
