EXHIBIT 10.53
Purchase and Sale Agreement between
Marriott International, Inc., as Seller and
CNL Hospitality Partners, LP, as Purchaser
relating to the Courtyard - Little Xxxx Xxxxx
and the Fairfield Inn - Little Xxxx Xxxxx
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
MARRIOTT INTERNATIONAL, INC.
as Seller,
and
CNL HOSPITALITY PARTNERS, LP
as Purchaser
---------------------------
Dated: September 17, 1998
TABLE OF CONTENTS
SECTION 1. DEFINITIONS........................................................1
1.1 "Act of Bankruptcy".....................................................1
1.2 "Agreement".............................................................2
1.3 "Allocable Purchase Price"..............................................2
1.4 "Architect".............................................................2
1.5 "`As-Built' Drawings"...................................................2
1.6 "Assets"................................................................2
1.7 "Building Location Survey"..............................................3
1.8 "Business Day"..........................................................3
1.9 "CC & Rs"...............................................................3
1.10 "CHP"..................................................................3
1.11 "CHLP".................................................................3
1.12 "Closing"..............................................................3
1.13 "Closing Date".........................................................3
1.14 "Competitor"...........................................................3
1.15 "Contracts"............................................................3
1.16 "Controlling Interest".................................................4
1.17 "DCCRO"................................................................4
1.18 "Declarant"............................................................4
1.19 "Design Development Plans".............................................4
1.20 "DOR"..................................................................4
1.21 "Engineer".............................................................4
1.22 "Entity"...............................................................4
1.23 "Environmental Reports"................................................4
1.24 "Excluded Assets"......................................................4
1.25 "FAS"..................................................................5
1.26 "FF&E".................................................................5
1.27 "FF&E Schedule"........................................................5
1.28 "Final Plans"..........................................................5
1.29 "Franchise Agreement"..................................................5
1.30 "Guarantors"...........................................................5
1.31 "Guaranty of Landlord's Obligations"...................................5
1.32 "Immaterial Taking"....................................................5
1.33 "Improvements".........................................................5
1.34 "Intangible Property"..................................................6
1.35 "Inventories"..........................................................6
1.36 "Lease"................................................................6
1.37 "Limited Rent Guaranty"................................................6
1.38 "Little Xxxx Xxxxx Contract"...........................................6
1.39 "LLBC".................................................................6
1.40 "Mere Director"........................................................6
1.41 "MI"...................................................................7
1.42 "Opening Date".........................................................7
1.43 "Outside Substantial Completion Date"..................................7
1.44 "Owner Agreement"......................................................7
1.45 "Ownership Interests"..................................................7
1.46 "Permitted Encumbrances"...............................................7
1.47 "Person"...............................................................8
1.48 "Plans and Specifications".............................................8
1.49 "Property".............................................................8
1.50 "Properties"...........................................................8
1.51 "Proprietary Information"..............................................8
1.52 "Purchaser"............................................................8
1.53 "Real Property"........................................................8
1.54 "Reserve"..............................................................9
1.55 "Seller"...............................................................9
1.56 "Standard Owner Agreement".............................................9
1.57 "Stock Pledge".........................................................9
1.58 "Substantial Completion"...............................................9
1.59 "Surveyor".............................................................9
1.60 "Systems Standards Manual".............................................9
1.61 "Tenant"..............................................................10
1.62 "Title Commitments"...................................................10
1.63 "Title Company".......................................................10
1.64 "Title Insurance Policies"............................................10
SECTION 2. PURCHASE-SALE; DILIGENCE..........................................10
2.1 Purchase-Sale..........................................................10
2.2 Diligence Inspections..................................................10
2.3 Title Matters..........................................................11
2.4 Survey.................................................................12
2.5 Environmental Reports..................................................13
2.6 Immaterial Taking.........................................................14
2.7 Changes to Plans and Specifications.......................................14
SECTION 3. PURCHASE AND SALE.................................................16
3.1 Closing................................................................16
3.2 Purchaser's Option to Accelerate Closings..............................16
3.3 Purchase Price.........................................................17
3.4 Seller's Determination of Purchase Price...............................18
3.4A Change in Number of Rooms.............................................18
3.5 Seller's Option to Terminate...........................................20
3.6 Competitor.............................................................21
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE.....................21
4.1 Closing Documents......................................................21
4.2 Condition of Applicable Property.......................................23
4.3 Title Policies and Surveys.............................................23
4.4 Opinions of Counsel....................................................24
4.5 FF&E Schedule..........................................................24
4.6 Other..................................................................24
SECTION 5. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE........................25
5.1 Purchase Price.........................................................25
5.2 Closing Documents......................................................25
5.3 Opinions of Counsel....................................................25
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SELLER..........................26
6.1 Status and Authority of the Seller.....................................26
6.2 Status and Authority of MI.............................................26
6.3 Status and Authority of Owner..........................................26
6.4 Status and Authority of Tenant.........................................26
6.5 Owners' Organizational Documents.......................................26
6.6 Assets and Liabilities of Owners.......................................26
6.7 Ownership of Owners....................................................27
6.8 No Employees...........................................................27
6.9 Existing Agreements....................................................27
6.10 Tax Returns...........................................................27
6.11 Action of the Seller..................................................27
6.12 No Violations of Agreements...........................................28
6.13 Litigation............................................................28
6.14 Not A Foreign Person..................................................28
6.15 Construction Contracts; Mechanics' Liens..............................28
6.16 Permits, Licenses.....................................................28
6.17 Hazardous Substances..................................................29
6.18 Insurance.............................................................29
6.19 Condition of Property.................................................29
6.20 Financial Information.................................................29
6.21 Contracts.............................................................29
6.22 Title to FF&E.........................................................29
6.23 FF&E..................................................................29
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER.......................32
7.1 Status and Authority of the Purchaser..................................32
7.2 Status and Authority of the Guarantors.................................32
7.3 Action of the Purchaser................................................32
7.4 No Violations of Agreements............................................33
7.5 Litigation.............................................................33
SECTION 8. COVENANTS OF THE SELLER...........................................33
8.1 Compliance with Laws...................................................33
8.2 Correction of Defects..................................................34
8.3 Insurance..............................................................34
8.4 Material Defects in Structural Systems.................................34
8.5 Final Payment..........................................................34
SECTION 9. APPORTIONMENTS....................................................35
9.1 Apportionments.........................................................35
9.2 Closing Costs..........................................................35
SECTION 10. DEFAULT..........................................................36
10.1 Default by the Seller.................................................37
10.2 Default by the Purchaser..............................................37
10.3 Purchaser's Deposit...................................................38
SECTION 11. MISCELLANEOUS....................................................40
11.1 Agreement to Indemnify................................................40
11.2 Brokerage Commissions.................................................42
11.3 Certain Contracts.....................................................42
11.4 Publicity.............................................................42
11.5 Notices...............................................................42
11.6 Waivers, Etc..........................................................45
11.7 Assignment; Successors and Assigns....................................45
11.8 Severability..........................................................45
11.9 Counterparts, Etc.....................................................46
11.10 Governing Law........................................................46
11.11 Performance on Business Days.........................................46
11.12 Attorneys' Fees......................................................46
11.13 Relationship.........................................................46
11.14 Section and Other Headings...........................................46
11.15 Disclosure...........................................................47
Schedule A - Purchase Price Allocation
Schedule B - Guaranty
Schedule C - Lease Agreement
Schedule D - Limited Rent Guaranty
Schedule E - Owner Agreement
Schedule F-1-3 - Legal Descriptions of Properties
Schedule G - Form of Standard Owner Agreement
Schedule H - Stock Pledge Agreement
Schedule I-1 - Date-Down Endorsement Commitment
Schedule I-2 - Leasehold Policy Commitment
Schedule J - Form of Surveyor's Certificate
Schedule K - Outline of Structural Systems
Schedule L - Form of Architect's Certificate
Schedule M - Form of Engineer's Certificate
Schedule N - General Contractor Provisions
Schedule O-1 - Fairfield Suites Franchise Agreement
Schedule O-2 - Fairfield Inn Franchise Agreement
Schedule O-3 - Courtyard by Marriott Franchise Agreement
Schedule P - Escrow Agreement
Schedule Q - Systems Standards Manual
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made as of the 17th day of
September, 1998, by and between MARRIOTT INTERNATIONAL, INC., a Delaware
corporation as seller, and CNL HOSPITALITY PARTNERS, LP, a Delaware limited
partnership as purchaser.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Seller (this and other capitalized terms used and not
otherwise defined herein having the meanings ascribed to such terms in Section
1) is, or shall be, the owner, directly or indirectly, of all of the ownership
interests in three certain limited liability companies, each to be created and
formed as a Delaware limited liability company (herein collectively "Owners");
WHEREAS, the Owners are, or will be the owners of the Properties; and
WHEREAS, Purchaser desires to purchase all of the Ownership Interests
and thereby acquire all of the Owners' right, title and interest in and to the
Properties upon the terms and conditions hereinafter set forth; and
WHEREAS, the Seller desires to sell to the Purchaser all of the
Ownership Interests and thereby convey all right, title and interest of the
Owners in and to the Properties, upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, the Seller and the Purchaser
hereby agree as follows:
SECTION 1. DEFINITIONS.
Capitalized terms used in this Agreement and not defined elsewhere
herein shall have the meanings set forth below, in the Section of this Agreement
referred to below, or in such other document or agreement referred to below:
1.1 "Act of Bankruptcy" shall mean if a party hereto or any general
partner thereof or Tenant shall (a) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or all of or a substantial part of its property; (b) admit in writing its
inability to pay its debts as they become due; (c) make a general assignment for
the benefit of its creditors; (d) file a voluntary petition or commence a
voluntary case or proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect); (e) be adjudicated a bankrupt or insolvent; (f) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts;
(g) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case or proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect); or (h) take
any corporate or partnership action for the purpose of effecting any of the
foregoing; or if the proceeding or case shall be commenced, without the
application or consent of a party hereto or any general partner thereof or
Tenant, in any court of competent jurisdiction seeking (1) the liquidation,
reorganization, dissolution or winding-up, or the composition or readjustment of
debts, of such party or general partner or Tenant; (2) the appointment of a
receiver, custodian, trustee or liquidator for such party or general partner or
Tenant or all or any substantial part of its assets; or (3) other similar relief
under any law relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts, and such proceeding or case shall continue
undismissed; or an order (including an order for relief entered in an
involuntary case under the Federal Bankruptcy Code, as now or hereinafter in
effect), judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstated and in effect, for a period of sixty (60)
consecutive days.
1.2 "Agreement" shall mean this Purchase and Sale Agreement, together
with Schedules A through Q hereto, as it and they may be amended from time to
time as herein provided.
1.3 "Allocable Purchase Price" shall mean, with respect to each
Property, the sum of the "Minimum Purchase Price" as set forth on Schedule A
hereto, plus the "Price Adjustment" determined by Seller as set forth on
Schedule A hereto, it being understood and agreed that the aggregate amount of
the Allocable Purchase Prices of all Ownership Interests of the Owners of all
three (3) Properties shall be no less than Ninety Million Dollars
($90,000,000.00) and no more than One Hundred Million Dollars ($100,000,000.00),
as determined by Seller in accordance with Section 3.4.
1.4 "Architect" shall mean Portman Xxxxxxxxx Xxxxxx Sunderland
Architects, Inc. or if such architect is subsequently replaced by another
architectural firm, then such replacement.
1.5 "`As-Built' Drawings" shall mean the final "as-built" plans and
specifications for the Improvements which are to be furnished by the Seller to
Purchaser pursuant to Section 4.1 of this Agreement.
1.6 "Assets" shall mean, with respect to any Owner, all of the Real
Property, the FF&E, the Contracts, the Improvements and the Intangible Property,
collectively, now owned or hereafter (but prior to the Closing Date with respect
to such Property) acquired by such Owner in connection with or relating to the
Property owned by such Owner other than any Excluded Assets with respect to such
Property.
1.7 "Building Location Survey" shall have the meaning given such term
in Section 2.4.
1.8 "Business Day" shall mean any day other than a Saturday, Sunday or
any other day on which banking institutions in the State of Florida or the State
of Maryland are authorized by law or executive action to close.
1.9 "CC & Rs" shall mean, in respect of any Property, the DOR and DCCRO
and the Other Declarations (as defined in the DOR and DCCRO) encumbering such
Property.
1.10 "CHP" shall mean CNL Hospitality Properties, Inc., a Maryland
corporation.
1.11 "CHLP" shall mean CNL Hospitality Partners, LP, a Delaware limited
partnership.
1.12 "Closing" shall have the meaning given such term in Section 3.1.
1.13 "Closing Date" shall have the meaning given such term in Section
3.1.
1.14 "Competitor" shall mean a Person that owns or has an equity
interest in a hotel brand, tradename, system or chain (a "Brand") which is
comprised of at least ten (10) hotels; provided that such Person shall not be
deemed a Competitor if it holds its interest in a Brand merely as (i) a
franchisee or (ii) a mere passive investor that has no control or influence over
the business decisions of the Brand at issue, such as a mere limited partner in
a partnership, a mere shareholder in a corporation or a mere payee of royalties
based on a prior sale transaction. A mere passive investor that is represented
by a Mere Director on the board of directors of a Competitor shall not be deemed
to have control or influence over the business decisions of that Competitor.
1.15 "Contracts" shall mean, with respect to any Owner, equipment
leases relating to telephone switches and voice mail relating to the Property
owned by such Owner and to which such Owner is a party and any other equipment
leases relating to the Property owned by such Owner and disclosed to Purchaser
on or before Closing and which are to survive the Closing and to which the Owner
is a party.
1.16 "Controlling Interest" shall mean (a) as to a corporation shall
mean the right to exercise, directly or indirectly, more than fifty percent
(50%) of the voting rights attributable to the shares of the Entity (through
ownership of such shares or by contract), and (b) as to an Entity not a
corporation, the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of the Entity.
1.17 "DCCRO" shall have the meaning given such term in the Little Xxxx
Xxxxx Contract.
1.18 "Declarant" shall mean the party defined as such under the DCCRO
and DOR.
1.19 "Design Development Plans" shall have the meaning given such term
in the Little Xxxx Xxxxx Contract.
1.20 "DOR" shall have the meaning given such term in the Little Xxxx
Xxxxx Contract.
1.21 "Engineer" shall mean Xxxxxx Xxxxxxxxx & Associates, Incorporated
or if such engineer is subsequently replaced by another engineering firm, then
such replacement.
1.22 "Entity" shall mean any corporation, general or limited
partnership, limited liability company, partnership, stock company or
association, joint venture, association, company, trust, bank, trust company,
land trust, business trust, cooperative, any government or agency or political
subdivision thereof or any other entity.
1.23 "Environmental Reports" shall have the meaning given such term in
Section 2.5.
1.24 "Excluded Assets" shall mean, with respect to any Property, (i)
any right, title or interest in any name containing any of the names "Marriott,"
"Courtyard," "Fairfield Inn," "Fairfield Suites" and other marks used, or that
may in the future be used, by MI or its affiliates, including the Owner of such
Property (and Seller and MI shall have the right to remove any such name or xxxx
appearing on any signage or other property pursuant to the terms of the
Franchise Agreement for such Property), (ii) all property owned by the Seller or
any of its affiliates, including the Owner of such Property, not normally
located at such Property and used, but not exclusively, in connection with the
operation of such Property, (iii) all items, tangible or intangible, consisting
of Proprietary Information, (iv) computer software, (v) FAS, (vi) any
Inventories located at such Property, (vii) working capital, including without
limitation, cash, bank accounts and accounts receivable owned or held by Seller
or any of its affiliates, including the Owner of such Property, (viii) all
books, ledger sheets, files and records, (ix) all contracts pertaining to the
operation of such Property other than the Contracts, and (x) any software,
manuals, brochures or directives used by the Seller or any of its affiliates,
including the Owner of such Property, in the operation of the Property that will
be issued by the franchisor to the Tenant, as franchisee, under the Franchise
Agreements.
1.25 "FAS" shall have the meaning given such term in the Lease.
1.26 "FF&E" shall mean, with respect to any Property, all appliances,
machinery, devices, fixtures, appurtenances, equipment, furniture, furnishings
and articles of tangible personal property of every kind and nature whatsoever
owned by the Seller or any of its affiliates, including the Owner of such
Property, and located in or at, or used in connection with the ownership,
operation or maintenance of such Property, other than motor vehicles.
1.27 "FF&E Schedule" shall have the meaning given such term in Section
4.5.
1.28 "Final Plans" shall have the meaning given such term in the Little
Xxxx Xxxxx Contract.
1.29 "Franchise Agreement" shall mean, in respect of each Property, the
applicable Franchise Agreement to be entered into at or prior to the first
Closing of the purchase and sale of the Ownership Interests of the Owner of a
Property between MI, as franchisor, and Tenant, as franchisee, substantially in
the forms attached hereto at Schedule O-1 (Fairfield Suites Franchise
Agreement), O-2 (Fairfield Inn Franchise Agreement) and O-3 (Courtyard by
Marriott Franchise Agreement), respectively.
1.30 "Guarantors" shall mean CHP and CHLP, jointly and severally.
1.31 "Guaranty of Landlord's Obligations" shall mean, in respect of
each Property, the Guaranty in the form of Schedule B hereto to be entered into
by Guarantors for the benefit of Tenant, in respect of the Lease for each
Property and guarantying the landlord's obligations under such Lease.
1.32 "Immaterial Taking" shall have the meaning given such term in
Section 2.6.
1.33 "Improvements" shall mean, with respect to any Property, all
buildings, fixtures, walls, fences, landscaping and other structures and
improvements situated on, affixed or appurtenant to the Real Property with
respect to such Property, including, but not limited to, all pavement, access
ways, curb cuts, parking, kitchen and support facilities, meeting and conference
rooms, swimming pool facilities, recreational amenities, office facilities,
drainage system and facilities, air ventilation and filtering systems and
facilities and utility facilities and connections for sanitary sewer, potable
water, irrigation, electricity, telephone, cable television and natural gas, if
applicable, to the extent the same form a part of the Property and all
appurtenances thereto acquired by Purchaser in connection with Purchaser's
acquisition of the Ownership Interests pursuant to the terms of this Agreement.
1.34 "Intangible Property" shall mean, with respect to any Property,
all transferable or assignable (a) governmental permits, including licenses and
authorizations, required for the construction, ownership and operation of the
Improvements, including without limitation certificates of occupancy, building
permits, signage permits, liquor licenses, site use approvals, zoning
certificates, environmental and land use permits and any and all necessary
approvals from state or local authorities (hereinafter defined as "Permits") and
other approvals granted by any public body or by any private party pursuant to a
recorded instrument relating to such Property and (b) certificates, licenses,
warranties and guarantees and the Contracts held by the Owner of such Property
and/or Seller, other than (x) the Excluded Assets and (y) such permits,
operating permits, certificates, licenses and approvals which are to be held by,
or transferred to, the Tenant in order to permit the Tenant to operate such
Property properly in accordance with the terms of the Leases.
1.35 "Inventories" shall have the meaning given such term in the Lease.
1.36 "Lease" shall mean, in respect of each Property, the Lease
Agreement in the form of Schedule C hereto to be entered into by Tenant and the
Owner of such Property.
1.37 "Limited Rent Guaranty" shall mean the Limited Rent Guaranty in
the form of Schedule D hereto to be entered into by MI in respect of each Lease.
1.38 "Little Xxxx Xxxxx Contract" shall mean that certain Sale and
Purchase Agreement dated May 7, 1998, between LLBC, as seller therein, and MI
and CNL American Properties Fund, Inc., a Maryland corporation, as buyer
therein.
1.39 "LLBC" shall mean The Little Xxxx Xxxxx Company, a Florida
corporation, and the seller under the Little Xxxx Xxxxx Contract.
1.40 "Mere Director" shall mean a Person who holds the office of
director of a corporation and who, as such director, has the right to vote not
more than twelve and one-half percent (12.5%) of the total voting rights on the
board of directors of such corporation, and who represents or acts on behalf of
a mere passive investor which neither (i) owns more than three percent (3%) of
the total voting rights attributable to all shares or ownership interests of a
Competitor, nor (ii) otherwise has the power to direct or cause the direction of
the management or policies of a Competitor.
1.41 "MI" shall mean Marriott International, Inc., a Delaware
corporation, its successor or successors by merger or operation of law, and
assignee or assignees to whom it has transferred all or substantially all of its
hotel and related lodging assets and/or businesses and which assumes in writing
Marriott International, Inc's. obligations under this Agreement.
1.42 "Opening Date" shall mean, with respect to any Property, the date
as of which all Improvements located at such Property, including, without
limitation, all guest rooms and/or suites, shall be open for business to the
public as a Courtyard by Marriott hotel, Fairfield Inn hotel, or Fairfield
Suites hotel, as the case may be.
1.43 "Outside Substantial Completion Date" shall mean, with respect of
any Property, ninety (90) days prior to the Required Completion Date (as defined
in the DCCRO encumbering such Property) inclusive of any extension of such date
on account of force majeure or otherwise pursuant to the terms of the DCCRO
encumbering such Property.
1.44 "Owner Agreement" shall mean the Owner Agreement in the form of
Schedule E hereto to be entered into by MI, Tenant and CHLP in respect of each
Lease.
1.45 "Ownership Interests" shall mean, with respect to any Owner, all
of the outstanding interests in the Owner held by the member or members thereof
as of the Closing of the sale and transfer thereof pursuant to this Agreement.
1.46 "Permitted Encumbrances" shall mean, with respect to any Property:
(a) any and all matters affecting title to such Property as of the date the
Owner of the Property acquired title thereto upon closing under the Little Xxxx
Xxxxx Contract, including without limitation the Permitted Exceptions and Title
Defects, as those terms are defined in the Little Xxxx Xxxxx Contract; (b) liens
for taxes, assessments and governmental charges with respect to such Property
not yet due and payable or due and payable but not yet delinquent; (c)
applicable zoning regulations and ordinances and other governmental laws,
ordinances and regulations; (d) such other nonmonetary encumbrances which were
granted by the Owner of the Property in order to facilitate, in Owner's
reasonable discretion, the construction and operation of the Improvements on
such Property or the other Properties; (e) any utility, drainage or other
easements which are customary in connection with (or which reasonably serve) the
Improvements to be developed on the Properties; (f) reciprocal easements and
property owners' association documents entered into among the Owners in respect
of the Properties and/or with CNL American Properties Fund, Inc., and its
successors and assigns in respect of that portion of the Tract acquired by the
Restaurant Parcel Owner; (g) the Leases; (h) UCC Financing Statements which
would be permitted pursuant to the terms of Section 21.3(vi) of the Lease; and
(i) such other nonmonetary encumbrances with respect to such Property which are
not objected to by the Purchaser in accordance with Sections 2.3 and 2.4.
1.47 "Person" shall mean any individual or Entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of such
Person where the context so admits.
1.48 "Plans and Specifications" shall mean, with respect to each
Property, (i) the Design Development Plans, until such time as Final Plans exist
with respect to such Property, and (ii) the Final Plans with respect to such
Property which have been approved by LLBC under the terms of the Little Xxxx
Xxxxx Contract and/or by Declarant under the terms of the DCCRO encumbering such
Property, as such Final Plans may be amended from time to time in accordance
with the terms of the Little Xxxx Xxxxx Contract, the CC&Rs and with the
approval, as necessary, of governmental authorities having jurisdiction thereof
and with the approval of Purchaser to the extent required under Section 2.7.
1.49 "Property" shall mean any one of the Properties.
1.50 "Properties" shall mean, collectively, all of the Assets relating
to the Properties identified on Schedule A hereto, the legal descriptions of
which are set forth in Schedules F-1 through F-3 hereto.
1.51 "Proprietary Information" shall have the meaning given such term
in the Lease.
1.52 "Purchaser" shall mean CHLP and its permitted successors and
assigns.
1.53 "Real Property" shall mean, in respect to any Property, the real
property described in the applicable Schedule F-1 through F-3 to this Agreement,
together with all easements, rights of way,
privileges, licenses and appurtenances which the Owner of such Property may now
own or hereafter acquire with respect thereto, less any portion or portions
thereof taken by way of an Immaterial Taking.
1.54 "Reserve" shall have the meaning given such term in the Lease.
1.55 "Seller" shall mean MI and its permitted successors and assigns
hereunder and its wholly-owned subsidiaries, direct or indirect, if any, who
are, together, the owners of all of the Ownership Interests in the Owners,
jointly and severally.
1.56 "Standard Owner Agreement" shall mean the Standard Owner Agreement
in the form of Schedule G hereto.
1.57 "Stock Pledge" shall mean, in respect of each Property, the Stock
Pledge Agreement in the form of Schedule H hereto to be entered into by MI, or
its affiliates, owning all of the outstanding stock of Tenant, as pledgor, and
the Owner of such Property, as pledgee, as further security for the performance
of Tenant's obligations under the Lease for such Property.
1.58 "Substantial Completion" shall mean, with respect to any Property,
substantial completion of the Improvements on such Property, including, without
limitation, substantial completion of a hotel of the applicable brand set forth
on Schedule A hereto, in conformance, in all material respects, with the Plans
and Specifications therefor (other than so-called "punch-list" items as do not
individually or in the aggregate substantially impair the use of such Property
for its intended use).
1.59 "Surveyor" shall mean Xxxxxx Xxxxxxxxx & Associates, Incorporated
or if such surveyor is subsequently replaced by another surveyor, then such
replacement.
1.60 "Systems Standards Manual" shall mean the Systems Standards Manual
(or successor thereto) attached hereto at Schedule Q, setting forth the
standards and requirements for the construction, renovation and operation of
hotels within the applicable brand (i.e., Fairfield Inn, Fairfield Suites and
Courtyard by Marriott) of hotel to be constructed and operated on the applicable
Property. Until such time as the Fairfield Suites brand shall contain at least
fifty (50) hotels and such hotels are governed by a separate Systems Standards
Manual, the Systems Standards Manual applicable to the Fairfield Inn hotel shall
be applicable to the Fairfield Suites hotel.
1.61 "Tenant" shall mean a wholly-owned, directly or indirectly,
subsidiary of MI.
1.62 "Title Commitments" shall have the meaning given such term in
Section 2.3.
1.63 "Title Company" shall mean First American Title Insurance Company
or such other title insurance company as shall have been approved by the
Purchaser and the Seller.
1.64 "Title Insurance Policies" shall have the meaning given such term
in Section 2.3.
SECTION 2. PURCHASE-SALE; DILIGENCE.
2.1 Purchase-Sale. In consideration of the mutual covenants herein
contained, the Purchaser hereby agrees to purchase from the Seller and the
Seller hereby agrees to sell to the Purchaser, all of the Ownership Interests of
each Owner for the respective Allocable Purchase Prices relating thereto,
subject to and in accordance with the terms and conditions of this Agreement.
2.2 Diligence Inspections. Purchaser has approved (or is deemed to have
approved for purposes of this Agreement) the Properties in their "as is, where
is" condition as of the date of closing under the Little Xxxx Xxxxx Contract. In
respect to the Improvements to be developed on the Properties by the Owners, the
Seller shall permit (or cause each Owner to permit) the Purchaser and its
representatives to inspect the Improvements at appropriate stages of completion
at such reasonable times as the Purchaser or its representatives may request by
reasonable prior notice to the Seller. During any such inspection, the Purchaser
and its representatives shall minimize any resulting interference with ongoing
construction at the Properties or the operation of the Properties as a hotel. To
the extent that, in connection with such investigations, the Purchaser, its
agents, representatives or contractors, damages or disturbs any of the Assets,
the Purchaser shall return the same to substantially the same condition which
existed immediately prior to such damage or disturbance. The Purchaser shall
indemnify, defend and hold harmless the Seller and each Owner from and against
any and all expense, loss or damage (including, without limitation, reasonable
attorneys' fees) which the Seller and/or any Owner may incur as a result of any
act or omission of the Purchaser or its representatives, agents or contractors
in connection with any such inspections, other than any expense, loss or damage
arising from any act or omission of the Seller or such Owner. The foregoing
indemnification agreement shall survive the termination of this Agreement and
the Closings hereunder.
2.3 Title Matters. Purchaser has approved (or is hereby deemed to have
approved) the state of title to the Properties and all exceptions thereto
reflected (or to be reflected) in the policies of owner's title insurance
("Title Insurance Policies") issued to the Owners in respect of the Properties
at closing under the Little Xxxx Xxxxx Contract. The Title Company has delivered
to the Purchaser and the Seller a preliminary written commitment for (a) the
periodic issuance of interim date-down endorsements and a final date-down
endorsement to each of the Title Insurance Policies, a copy of which commitment
is attached hereto as Schedule I-1 (the "Date-Down Endorsement Commitment"), and
(b) for the issuance of a Leasehold Owner's Title Insurance Policy for each of
the Properties naming Tenant as the insured, a copy of which commitment is
attached hereto as Schedule I-2 (the "Leasehold Policy Commitment") (the
Date-Down Endorsement Commitment and Leasehold Policy Commitment herein,
collectively, the "Title Commitments"). Purchaser has approved the Date-Down
Endorsement Commitment and the form of the date-down endorsement provided for
therein for purposes of this Agreement. MI has approved the Leasehold Policy
Commitment and the form of the leasehold policy provided for therein on behalf
of the Tenant.
In the event that any Owner decides to encumber a Property with an
additional document, instrument or other matter for which the Declarant's
approval is required under the DCCRO, Seller (or such Owner) shall give
Purchaser notice thereof together with a copy of the document, instrument or
other matter to be placed of record against the Property ("Additional
Exception"). Within five (5) Business Days after receipt of a notice of any
Additional Exception with respect to any Property, the Purchaser shall give the
Seller notice of its approval or disapproval thereof. Purchaser shall not
withhold its approval of any such Additional Exception which would be a
Permitted Encumbrance specified in clauses (a) through (h), inclusive, of
Section 1.45, and shall not unreasonably withhold, delay or condition its
approval of any other Additional Exception. If Purchaser fails to respond within
said five (5) Business Day period, Purchaser shall be deemed to have approved
such Additional Exception. If Purchaser unreasonably disapproves of any
Additional Exception, Seller shall be excused from performing any term or
condition (or any portion or aspect of a term or condition) of this Agreement
which Seller is unable or unwilling to perform as a result of its inability to
enter into and/or record such Additional Exception.
In the event that an encumbrance is placed on any Property (other than
a monetary encumbrance, which Seller shall pay, provided such encumbrance does
not exceed $250,000) as a result of judicial action taken by a local, state, or
Federal governmental entity with respect to violation of any state or Federal
environmental laws not caused by, authorized or acquiesced to by Seller, the
Purchaser's sole remedy shall be (A) to terminate this Agreement with respect to
the affected Property, in which event this Agreement shall terminate and be of
no further force or effect with respect to the affected Property and Seller
shall reimburse to Purchaser the Purchaser's expenses incurred in respect of
such affected Property, not to exceed $140,000 (and if, with respect to all
Properties except for the affected Property, either (i) Closing has occurred, or
(ii) the contemplated Closing will not occur as a result of Purchaser's election
to terminate this Agreement pursuant to Sections 2.3, 2.4, 2.5, 2.7(d), 8.4 or
10.1 of this Agreement, then the Deposit shall be refunded to Purchaser) or (B)
to consummate the transactions contemplated hereby, notwithstanding such
encumbrance, without any abatement or reduction in the Allocable Purchase Price
for the Ownership Interests in the Owner of the affected Property on account
thereof.
2.4 Survey. Purchaser has approved (i) the survey ("Existing Survey")
of the Properties and all matters shown thereon, prepared by Surveyor dated
November 14, 1995 and last certified on August 5, 1998, and (ii) that certain
plat of the Properties, also prepared by the Surveyor, dated August 7, 1998 and
marked as provided for "informational purposes," showing the lot lines thereof
based on the Preliminary Subdivision Plat. Prior to the Closing in respect of
the Owner of each Property, Seller shall cause the Existing Survey to be revised
by the Surveyor for the Property owned by such Owner so as to locate all
Improvements thereon ("Building Location Survey") and to be recertified as of a
date no earlier than sixty (60) days prior to the Closing Date. Seller shall use
commercially reasonable efforts to have the Surveyor's Certificate conform to
the form of certificate contained in Schedule J hereto and to ensure that the
Building Location Survey meets the survey requirements set forth in such
Schedule J. A copy of the Building Location Survey shall be furnished by Seller
to Purchaser when received by Seller.
Within fifteen (15) Business Days after receipt of the Building
Location Survey with respect to any Property, the Purchaser shall give the
Seller notice of any matters shown thereon (other than the Permitted
Encumbrances and any matters shown on the Existing Survey for such Property)
which adversely affect such Property in any material respect, for which
Purchaser is unable to obtain affirmative insurance at no cost, and as to which
the Purchaser reasonably objects. If, for any reason, the Seller is unable or
unwilling to take such actions as may be required to remedy the objectionable
matters or pay for the cost to obtain affirmative insurance over the
objectionable matter, the Seller shall give the Purchaser prompt notice thereof;
it being understood and agreed that the failure of the Seller to give such
notice within fifteen (15) Business Days after Seller's receipt of the
Purchaser's notice of objection shall be deemed an election by the Seller not to
remedy such matters. If the Seller shall be unable or unwilling to remove (or
pay the cost of insuring over same) any survey defect to which the Purchaser has
reasonably objected, the Purchaser may elect (A) to terminate this Agreement
with respect to the affected Property, in which event this Agreement shall
terminate and be of no further force or effect with respect to the affected
Property and Seller shall reimburse to Purchaser the Purchaser's expenses
incurred in respect of such affected Property, not to exceed $140,000 (and if,
with respect to all Properties except for the affected Property, either (i)
Closing has occurred, or (ii) the contemplated Closing will not occur as a
result of Purchaser's election to terminate this Agreement pursuant to Sections
2.3, 2.4, 2.5, 2.7(d), 8.4 or 10.1 of this Agreement, then the Deposit shall be
refunded to Purchaser) or (B) to consummate the transactions contemplated
hereby, notwithstanding such defect, without any abatement or reduction in the
Allocable Purchase Price for the Ownership Interests in the Owner of the
affected Property on account thereof. The Purchaser shall make any such election
by written notice to the Seller given on or prior to the fifth (5th) Business
Day after the earlier of (x) Purchaser's receipt of the Seller's notice of its
inability or unwillingness to cure (or pay the cost of insuring over) such
defect and (y) the expiration of the 15-Business Day period within which Seller
is required to respond to Purchaser's notice of objection, time being of the
essence with respect to the giving of such notice. Failure of the Purchaser to
give such notice within the time prescribed in the preceding sentence shall be
deemed an election by the Purchaser to proceed in accordance with clause (B)
above.
2.5 Environmental Reports. Purchaser has approved and accepts the
environmental condition of the Properties as existing on the date of closing
under the Little Xxxx Xxxxx Contract and as reflected in those certain Phase I
environmental reports in respect of the Properties prepared by Xxxxx
Environmental and Geosciences ("Environmental Engineer") and dated July 1, 1998
("Environmental Reports"). At the written election of Purchaser, made no later
than twenty (20) days prior to the Closing Date for the acquisition of the
Ownership Interests of the Owner of a given Property, the Seller and Purchaser
shall order, with respect to such Property, an update of the Environmental
Reports (the "Updated Environmental Reports").
Within five (5) Business Days after receipt of an Updated Environmental
Report with respect to any Property, the Purchaser shall give the Seller notice
of any matters therein as to which the Purchaser reasonably objects. If, for any
reason, the Seller is unable or unwilling to take such actions as may be
required to cause such matters to be remedied to the reasonable satisfaction of
the Purchaser, the Seller shall give the Purchaser notice thereof; it being
understood and agreed that the failure of the Seller to give such notice within
five (5) Business Days after receipt of the Purchaser's notice of objection
shall be deemed an election by the Seller not to remedy such matters. If the
Seller shall be unwilling or unable to remedy any matters to which the Purchaser
has reasonably objected, the Purchaser may elect (A) to terminate this Agreement
with respect to the acquisition of the Ownership Interests in the Owner of the
affected Property, in which event, this Agreement shall be of no further force
and effect with respect to such acquisition and Seller shall reimburse to
Purchaser the Purchaser's expenses incurred in respect of such affected
Property, not to exceed $140,000 (and if, with respect to all Properties except
for the affected Property, either (i) Closing has occurred, or (ii) the
contemplated Closing will not occur as a result of Purchaser's election to
terminate this Agreement pursuant to Sections 2.3, 2.4, 2.5, 2.7(d), 8.4 or 10.1
of this Agreement, then the Deposit shall be refunded to Purchaser) or (B) to
consummate the acquisition of the Ownership Interests in the Owner of the
affected Property, notwithstanding such defect, without any abatement or
reduction in the Allocable Purchase Price for the Ownership Interests in the
Owner of the affected Property on account thereof. The Purchaser shall make any
such election by written notice to the Seller given on or prior to the fifth
(5th) Business Day after the earlier of (x) Purchaser's receipt of Seller's
notice of its inability or unwillingness to cure such defect and (y) the
expiration of the 5-Business Day period within which Seller was to have
responded to Purchaser's notice of objection. Failure of the Purchaser to give
such notice within the time prescribed by the preceding sentence shall be deemed
an election by the Purchaser to proceed in accordance with clause (B) above.
2.6 Immaterial Taking. If prior to the Closing of the purchase of the
Ownership Interests in the Owner of a Property, such Property is the subject of
a condemnation which does not, in Seller's reasonable opinion, affect any
material part of the Improvements and does not materially adversely affect
access to the Improvements or compliance with applicable zoning or building
requirements, including parking (an "Immaterial Taking"), Seller will provide
written notice of such Immaterial Taking to Purchaser and this Agreement will
remain in full force and effect in respect of the purchase and sale of the
Ownership Interests of the Owner of such Property, but with an abatement of the
Allocable Purchase Price for such Ownership Interests equal to the amount of the
award paid to Seller on account of such taking, less the amount of Seller's
costs and expenses, including reasonable attorneys' fees and expenses, in
establishing and collecting such award.
2.7 Changes to Plans and Specifications. Purchaser shall have the
following rights in respect of changes to the Plans and Specifications for the
Improvements to be constructed on a Property:
(a) During the period beginning on the date that LLBC approves
the Design Development Plans pursuant to the Little Xxxx Xxxxx Contract, and
ending on the later of (x) the date the Final Plans are approved by LLBC,
Declarant and Orange County, Florida ("Final Plans Approval Date") and (y) the
date the general contract ("General Contract") for the construction of such
Improvements is entered into ("Contract Date"), the Purchaser shall have the
right to approve (i) any change in the Plans and Specifications which would
effect a material change in the structural system of the Improvements other than
as described in the Outline of Structural Systems attached hereto as Schedule K,
and (ii) any change in the Plans and Specification which results in the
reduction of a standard provided for in the Systems Standards Manual applicable
to such Improvements, such approval not to be unreasonably withheld by
Purchaser. Any change to the Plans and Specification required by Orange County,
Florida (or any other governmental authority having jurisdiction) or by LLBC or
Declarant under the CC&Rs or Little Xxxx Xxxxx Contract, shall be deemed
approved by Purchaser.
(b) During the period beginning on the later of (x) the Final
Plans Approval Date and (y) the Contract Date, Seller will not enter into a
change order to the General Contract without first receiving Purchaser's
approval (such approval not to be unreasonably withheld) where such change order
would (i) effect a material change in the structural system of the Improvements
other than as described in the Outline of Structural Systems attached hereto as
Schedule K, or (ii) effect a change which would decrease the cost of the
Improvements by Fifty Thousand Dollars ($50,000.00) or more and result in a
reduction of a standard provided for in the Systems Standards Manual applicable
to such Improvements.
(c) Seller shall provide to Purchaser a copy of any change
order to the General Contract which effects a change in the amount of One
Hundred Thousand Dollars ($100,000.00) or more. Such copies will be for
informational purposes only; Purchaser will not have the right to approve or
disapprove changes in the Plans and Specifications except to the extent provided
for in Section 2.7(a) and Section 2.7(b) above.
(d) In the event that Seller materially deviates from the
Plans and Specifications as to any Property (and such deviation (x) resulted in
a material change in the structural system of the Improvements to such Property
other than as described in the Outline of Structural Systems attached hereto as
Schedule K, or (y) resulted in a change which decreased the cost of the
Improvements by Fifty Thousand Dollars ($50,000.00) or more and resulted in a
reduction of a standard or standards provided for in the Systems Standards
Manual applicable to such Improvements), Seller may, but is not obligated, to
remedy such deviations. If Seller elects not to remedy the deviations,
Purchaser's sole remedy shall be (A) to terminate this Agreement with respect to
the affected Property, in which event this Agreement shall terminate and be of
no further force or effect with respect to the affected Property and Seller
shall reimburse to Purchaser the Purchaser's expenses incurred in respect of
such affected Property, not to exceed $140,000 (and if, with respect to all
Properties except for the affected Property, either (i) Closing has occurred, or
(ii) the contemplated Closing will not occur as a result of Purchaser's election
to terminate this Agreement pursuant to Sections 2.3, 2.4, 2.5, 2.7(d), 8.4 or
10.1 of this Agreement, then the Deposit shall be refunded to Purchaser) or (B)
to consummate the transactions contemplated hereby, notwithstanding such
deviation, with an abatement in the Allocable Purchase Price for the Ownership
Interests in the Owner of the affected Property equal to the amount of the cost
reduction resulting from such deviation, such abatement not to exceed $500,000.
SECTION 3. PURCHASE AND SALE.
3.1 Closing. (a) The purchase and sale of the Ownership Interests of
each of the Owners shall be consummated at one or more closings (each, a
"Closing") to be held at the offices of Lowndes, Drosdick, Doster, Xxxxxx &
Xxxx, P.A., 000 Xxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxx, or at such other location as
the Seller and the Purchaser may agree, at 10:00 a.m. local time, the Closing
with respect to any Property to occur on a date (each, a "Closing Date")
designated by Seller in a written notice ("Closing Notice") from Seller to
Purchaser stating that Substantial Completion and the Opening Date have occurred
with respect to such Property. Such Closing Date shall not be less than thirty
(30) days nor more than forty-five (45) days after the Closing Notice, or such
later date as of which all conditions precedent to the Closing herein set forth
with respect to the applicable Property have either been satisfied or waived by
the party in whose favor such conditions run. In the event that Closing with
respect to a given Property shall not have occurred within ninety (90) days
after its Outside Substantial Completion Date, either party (provided such party
shall not be in default hereunder), shall have the right, by the giving of
written notice to the other, to terminate this Agreement with respect to the
Ownership Interests of the Owner of such Property.
3.2 Purchaser's Option to Accelerate Closings. (a) In the event that
(i) the Improvements to be developed on any Property as contemplated by this
Agreement are not Substantially Completed by the Outside Substantial Completion
Date for such Property or (ii) (1) Declarant provides a notice of abandonment to
Seller pursuant to Section 9.1.1(a) of the DCCRO (the "Abandonment Notice"),
such Abandonment Notice to be promptly forwarded by Seller to Purchaser, (2)
Seller fails to cure within thirty (30) days after receipt of the Abandonment
Notice, and (3) Seller has not received a notice of intent to repurchase from
Declarant pursuant to Section 9.3.1 of the DCCRO (the "Repurchase Notice")
within ninety (90) days after receipt of the Abandonment Notice, then Purchaser
shall have the right and option to accelerate the Closing ("Accelerated
Closing") on the sale and transfer of the Ownership Interests of the Owner of
such Property ("Accelerated Closing Property") for which such Improvements have
not been so completed or for which Seller received an Abandonment Notice, by
giving written notice of its election to accelerate ("Acceleration Notice") to
Seller and Tenant within thirty (30) days following the Outside Substantial
Completion Date or one hundred twenty (120) days after the date of Purchaser's
receipt from Seller of a copy of an Abandonment Notice, as the case may be, time
being of the essence in the giving of such notice. Notwithstanding the
foregoing, in the event Seller has cured prior to receipt of the Repurchase
Notice, Purchaser shall not be entitled to an Accelerated Closing. The
Acceleration Notice shall specify (A) a date for closing pursuant to this
Section 3.2 ("Accelerated Closing Date") which shall be no sooner than
forty-five (45) days nor more than eighty-five (85) days after the date of the
Acceleration Notice and (B) the amount of Minimum Rent (as defined in the Lease)
which shall apply to the Lease. In the event Purchaser makes such election,
closing on the purchase and sale of the Ownership Interests of the Owner of the
Accelerated Closing Property shall take place on the Accelerated Closing Date on
the same terms and conditions, and for the same price, as payable by Declarant
for the Accelerated Closing Property pursuant to Declarant's repurchase right
arising as a result of Owner's failure to complete the "Required Improvements"
for such Property pursuant to Article 9 of the DCCRO.
(b) In the event that Purchaser elects to accelerate the
closing of the purchase of the Ownership Interests of any Owner pursuant to the
provisions of this Section 3.2, Tenant shall have the option to lease ("Option
to Lease") the Property of such Owner upon Substantial Completion of the
Improvements thereon upon the same terms and provisions as contained in the
Lease for such Property to be entered into pursuant to this Agreement, provided
that the Minimum Rent which shall apply to such Lease shall be the Minimum Rent
specified in the Acceleration Notice. Tenant shall give written notice
("Exercise Notice") to Purchaser of its intent to exercise its Option to Lease
within thirty (30) days following its receipt of the Acceleration Notice. If
Tenant does give an Exercise Notice, then CNL and MI will, upon execution and
delivery of the Lease (upon the parties agreement on the Minimum Rent to be
paid) also enter into and deliver (or cause to be entered into and delivered)
the Limited Rent Guaranty, Guaranty of Landlord's Obligation, Owner Agreement,
Franchise Agreement and the Stock Pledge Agreement, contemplated to be executed
and delivered at Closing hereunder. If Tenant does not give an Exercise Notice
with respect to such Property, MI and Owner's operator shall enter into a
Franchise Agreement in substantially the form of the Franchise Agreement
attached hereto at either Schedule X-0, X-0, xx X-0, whichever applies for the
subject Property (upon the same terms as contemplated in this Agreement, except
that the term of the Franchise Agreement shall be for 15 years, with no
extensions), it being understood that MI reserves the right to modify the name
of the franchised System without the consent of Purchaser; provided, however,
that MI's obligation to enter into such Franchise Agreement is subject to the
Property, the owner of the Property and the operator of such Property satisfying
MI's franchise criteria applicable at such time, completion of the Improvements
in accordance with the Plans and Specifications, and the payment of applicable
franchise applications fees. In connection with the execution of such Franchise
Agreement, MI, the operator of the Property (i.e., the franchisee) and CHLP
shall enter into MI's Standard Owner Agreement in the form attached hereto at
Schedule G.
(c) If Purchaser fails to give timely an Acceleration Notice
pursuant to this Section 3.2, then Seller shall be entitled to terminate
pursuant to Section 3.5.
3.3 Purchase Price. At each Closing, the Allocable Purchase Price for
the Ownership Interests in the Owner of each Property being purchased shall be
payable by wire transfer of immediately available funds on the applicable
Closing Date to an account or accounts to be designated by the Seller prior to
such Closing, subject to any adjustments and apportionments made pursuant to
Section 9.1 of this Agreement.
3.4 Seller's Determination of Purchase Price. At least ninety (90) days
prior to the Closing Date for the acquisition of the Ownership Interests in the
Owner of a Property, Seller shall provide written notice to Purchaser of the
Allocable Purchase Price for such acquisition. With respect to each Property,
the "Individual Maximum Purchase Price" shall mean the Minimum Purchase Price
plus the maximum Price Adjustment allowable for each Property as set forth at
Schedule A attached hereto; provided that the Allocable Purchase Price for the
Ownership Interests in all of the Owners shall not exceed One Hundred Million
Dollars ($100,000,000) (the "Aggregate Maximum Purchase Price").
3.4A Change in Number of Rooms.
(a) In connection with Seller's determination of the Allocable
Purchase Price for the Closings of the purchase and sale of the Ownership
Interests in the Owners of the Properties, if the number of guest rooms within
the Improvements constructed on any individual Owner's Property (the "Actual
Guest Rooms"), is more or less than the number of guest rooms projected to be
constructed within the Improvements for such Property as set forth at Schedule A
("Projected Guest Rooms"), then the Individual Maximum Purchase Price applicable
in determining the Allocable Purchase Price for such purchase and sale of
Ownership Interests in such Owner shall be subject to adjustment as follows:
(i) If the number of Actual Guest Rooms is between
ninety-seven percent (97%) and one hundred three percent (103%) of the number of
Projected Guest Rooms, then there will be no adjustment to the Individual
Maximum Purchase Price; and
(ii) If the number of Actual Guest Rooms is less than
ninety-seven percent (97%) of the number of Projected Guest Rooms or more than
one hundred three percent (103%) of the number of Projected Guest Rooms, then
the Individual Maximum Purchase Price will be adjusted (upward if the number of
Actual Guest Rooms exceeds the number of Projected Guest Rooms, and downward, if
the number of Actual Guest Rooms is less than the number of Projected Guest
Rooms) by the product obtained by multiplying (x) the Individual Maximum
Purchase Price by (y) a fraction, the numerator of which is the difference
between the number of Actual Guest Rooms as compared to the number of Projected
Guest Rooms, less three percent (3%) of the number of Projected Guest Rooms
(rounded to the nearest whole number), and the denominator of which is the
number of Projected Guest Rooms.
(b) In addition, if the aggregate number of Actual Guest Rooms
for all Properties is less than the aggregate number of Projected Guest Rooms
for all Properties, then the Aggregate Maximum Purchase Price shall be subject
to adjustment as follows:
(i) If the aggregate number of Actual Guest Rooms for
all Properties is between ninety-seven percent (97%) and one hundred percent
(100%) of the aggregate number of Projected Guest Rooms for all Properties, then
there will be no adjustment to the Aggregate Maximum Purchase Price; and
(ii) If the aggregate number of Actual Guest Rooms
for all Properties is less than ninety-seven percent (97%) of the aggregate
number of Projected Guest Rooms for all Properties, then the Aggregate Maximum
Purchase Price shall be decreased by the product obtained by multiplying (x) the
Aggregate Maximum Purchase Price by (y) a fraction, the numerator of which is
the decrease in the aggregate number of Actual Guest Rooms for all Properties
from the aggregate number of Projected Guest Rooms for all Properties, less
three percent (3%) of the aggregate number of Projected Guest Rooms for all
Properties (rounded to the nearest whole number), and the denominator of which
is the aggregate number of Projected Guest Rooms for all Properties.
(c) This calculation shall be performed prior to the first
Closing in order to account for adjustments, if any, in the Individual Maximum
Purchase Price applicable to Seller's determination of the Allocable Purchase
Price for the Ownership Interests to be acquired at all Closings.
(d) For example, if the Ownership Interests being acquired
relate to the Fairfield Inn, for which three hundred eighty-nine (389) guest
rooms were projected to be constructed, but only three hundred eighty-six (386)
guest rooms are actually constructed (a decrease of less than one percent),
because the increase is less than three percent (3%), the Individual Maximum
Purchase Price would remain unchanged at $29,000,000.
If the purchase of the Ownership Interests in the Owner of the
Improvements relate to the Courtyard by Marriott where the projected number of
guest rooms is three hundred thirteen (313), but three hundred twenty-five (325)
guest rooms are actually constructed (an increase of four percent (4%)), the
Individual Maximum Purchase Price applicable to such Closing will be calculated
as follows:
The increase in excess of three percent (3%) is three (3).
$35,000,000 x 3/313 = $335,463
Accordingly, the adjusted Individual Maximum Purchase Price for the
Courtyard in this example is $35,335,463.
If the purchase of the Ownership Interests in the Owner of the
Improvements relate to the Fairfield Suites where the projected number of guest
rooms is three hundred ninety-eight (398), but three hundred forty five (345)
guest rooms are actually constructed (a decrease of more than thirteen percent
(13%)), the Individual Maximum Purchase Price applicable to such Closing will be
calculated as follows:
The decrease in excess of three percent (3%) is forty-one (41).
$38,000,000 x 41/398 = $3,914,573
Accordingly, the adjusted Individual Maximum Purchase Price for the
Courtyard in this example is $34,085,427.
In this example, the number of Actual Guest Rooms for all Properties is
one thousand fifty-six (1,056)(a decrease of four percent (4%)). The decrease in
excess of three percent (3%) is eleven (11).
$100,000,000 x 11/1100 = $1,000,000
Accordingly, the adjusted Aggregate Maximum Purchase Price is
$99,000,000.
3.5 Seller's Option to Terminate. In addition to any other right of
Seller to terminate provided for elsewhere in this Agreement, (a) Seller shall
be entitled to terminate this Agreement and its and/or Tenant's obligations
hereunder and any obligations under any other transactions contemplated herein
or thereby (and such termination shall not constitute a default under any of the
related transactions or documents contemplated thereby, including, without
limitation, this Agreement) by written notice to Purchaser at any time prior to
completion of all Closings contemplated hereby, if: (i) Purchaser fails to
deliver the Deposit(s) and/or Letter(s) of Credit within the times required by
this Agreement; (ii) in the event that Seller, for any reason, elects not to
purchase the Properties under the Little Xxxx Xxxxx Contract; or (iii) in the
event CNL American Properties Fund, Inc., for any reason, elects not to purchase
the remainder of the property (i.e., other than the Properties) to be purchased
under the Little Xxxx Xxxxx Contract; and (b) Seller shall be entitled to
terminate its obligations to sell the Ownership Interests of the Owner of any
Property, and its and/or Tenant's obligation to lease such Property and any
other transaction contemplated herein (and such termination shall not constitute
a default under any of the related transactions or documents contemplated
thereby, including this Agreement), if: (i) Seller elects, in its sole and
unfettered discretion, not to commence or complete development of such Property
as a hotel as contemplated by this Agreement (provided, however, Purchaser's
right to accelerate the Closing of the purchase and sale of the Ownership
Interests in the Owner of such Property pursuant to Section 3.2 shall not be
affected by such election); or (ii) if the Declarant repurchases such Property
pursuant to any right or rights to do so under the terms of the DOR and/or
DCCRO.
3.6 Competitor. In the event that any sale, assignment, transfer or
other disposition, for value or otherwise, voluntary or involuntary, by merger,
operation of law or otherwise, in a single transaction or a series of
transactions, of any interest in Purchaser or any Person having an interest in
Purchaser, directly or indirectly, results, directly or indirectly, in a
Competitor owning a Controlling Interest in Purchaser, Seller shall have the
right, but not the obligation, to terminate this Agreement with respect to any
one or more of the Closings which have not yet occurred (and such termination
shall not constitute a default under any of the related transactions or
documents contemplated thereby, including this Agreement), and, solely with
respect to this Xxxxxx 0.0, Xxxxxxxxx shall be entitled to either (a) a refund
of the entire Deposit if Seller elects to terminate all Closings which have not
yet occurred, or (b) a refund of a pro rata share of the Deposit (such share to
be calculated based on the Minimum Purchase Price for each of the Properties for
which Seller has terminated this Agreement, as compared to the total of the
Minimum Purchase Price for all Properties for which Closings have not yet
occurred), if Seller elects to terminate fewer than all of the Closings which
have not yet occurred.
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE.
The obligation of the Purchaser to acquire the Ownership Interests of
each of the Owners on the applicable Closing Date shall be subject to the
satisfaction or waiver of the following conditions precedent on and as of such
Closing Date:
4.1 Closing Documents. The Seller shall have delivered to the Purchaser
with respect to the applicable Owner:
(a) A warranty assignment and assumption of the Ownership Interests in
the applicable Owner, duly executed by the Seller, transferring, assigning and
warranting to Purchaser all right, title and interest of Seller therein, free
from all liens, encumbrances, security interests, options and adverse claims of
any kind or character;
(b) To the extent the same are in the Seller's or the applicable
Owner's (or their agents) possession, original, fully executed copies of all
agreements constituting Assets;
(c) The Lease for the Property owned by the applicable Owner duly
executed by Tenant;
(d) The Limited Rent Guaranty duly executed by MI;
(e) The Stock Pledge duly executed by the owner(s) of all of the
outstanding stock in Tenant (or, at any Closing occurring after the first
Closing, a written certification and acknowledgment by such owner(s) that the
Stock Pledge continues in force and effect in accordance with its terms);
(f) A copy of the fully executed Franchise Agreement with respect to
the applicable Property ;
(g) The Owner Agreement duly executed by MI;
(h) A copy of the final certificate of occupancy for the applicable
Property;
(i) An architect's certificate in respect of the Improvements to the
applicable Property in the form attached hereto as Schedule L;
(j) An engineer's certificate in respect of the Improvements to the
applicable Property in the form attached hereto as Schedule M;
(k) Certified copies of applicable resolutions and certificates of
incumbency with respect to the Seller, the applicable Owner, Tenant, the
guarantor under the Limited Rent Guaranty and such other persons as the
Purchaser may reasonably require;
(l) An estoppel certificate by Declarant in respect of the DOR in the
form of Exhibit "E" thereto, the DCCRO, in the form of Exhibit "E" thereto, and
in the form described in Section 15.15 of the Master Declaration;
(m) A certificate of a duly authorized officer of MI and Seller
confirming the continued truth and accuracy of the representations and
warranties of the Seller in this Agreement (subject to such changes as Seller
has given notice of to Purchaser pursuant to Section 6 and subject to Section
4.2(b));
(n) The Building Location Survey;
(o) The "As-Built" Drawings;
(p) The Permits;
(q) The Contracts;
(r) Copies of any and all warranties and guarantees pertaining to the
Improvements, specifically including the manufacturers roof membrane warranty
issued with respect to the buildings comprising the Improvements, and warranties
and guarantees with respect to other aspects of the Improvements;
(s) Insurance certificates to be provided by Tenant pursuant to the
Lease;
(t) The FF&E Schedule;
(u) Copies of Owner's operating and income statements for the then
current fiscal year (and for any previous fiscal year in which Owner conducted
business and for which income tax returns have not been prepared and filed);
(v) An Owner's affidavit in the usual and customary form of the Title
Company for the purpose of satisfying any request for the same in the applicable
Title Commitment;
(w) Any duly executed amendment of the Articles of Formation of the
applicable Owner;
(x) A settlement statement;
(y) A copy of the construction contract, any required bonds, the most
recent partial waivers of liens received from the general contractor reflecting
all sums paid to date, and a certificate of substantial completion substantially
in the form set forth in AIA Form G704; and
(z) Such other documents, certificates, and other instruments as may be
reasonably required to consummate the transaction contemplated hereby.
4.2 Condition of Applicable Property
(a) No action shall be pending or threatened for the condemnation or
taking by power of eminent domain of all or any material portion of the
applicable Property;
(b) All material licenses, permits and other authorizations necessary
for the current use, occupancy and operation of the applicable Property shall be
in full force and effect; however, in the event that Seller fails to obtain any
such licenses, permits or other authorizations and discloses same to Purchaser,
Purchaser may, but shall not be required to, waive Seller's compliance with
Section 6.16 of this Agreement and proceed with Closing; and
(c) The Purchaser shall have received an architect's certificate in the
form of Schedule L executed by the Architect and an engineer's certificate in
the form of Schedule M, executed by the Engineer in respect of the applicable
Property.
4.3 Title Policies and Surveys.
(a) The Title Company shall be prepared, subject only to payment of the
applicable premium and delivery of all conveyance documents, to issue its final
date-down endorsement to the Title Insurance Policy with respect to the
applicable Property, in accordance with Section 2.3.
(b) The Purchaser shall have received the Building Location Survey with
respect to the applicable Property, in accordance with Section 2.4.
4.4 Opinions of Counsel. The Purchaser shall have received a written
opinion from counsel to the Seller (which may be its in-house counsel), in form
and substance reasonably satisfactory to the Purchaser and its counsel,
regarding the organization, good standing and/or authority of the Seller, the
Owner, the Tenant, and the guarantor under the Limited Rent Guaranty and the
enforceability of this Agreement, the Lease in respect of the applicable
Property, the Limited Rent Guaranty and the Stock Pledge and such other matters
with respect to the transactions contemplated by this Agreement as the Purchaser
may reasonably require.
4.5 FF&E Schedule. No later than twenty (20) days prior to Closing of
the purchase of the Ownership Interests in any Owner, Seller shall provide to
Purchaser a schedule (the "FF&E Schedule") of all FF&E at the Property (other
than the FF&E listed in the Plans and Specifications) owned by such Owner and
which FF&E is owned by the Owner of such Property and intended to be part of the
Assets to be owned by Owner upon and following such Closing. Upon reasonable
prior notice to Seller, Purchaser shall be entitled to inspect the FF&E at the
Property prior to Closing in order to confirm and verify the FF&E Schedule.
4.6 Other.
(a) The representations and warranties of the Seller set forth in
Section 6 hereof (as the same may have been changed by notice from Seller as
provided therein) shall be true, correct and complete in all material respects
on and as of the Closing Date;
(b) No Act of Bankruptcy on the part of the Seller, the applicable
Owner or Tenant shall have occurred and remain outstanding as of the Closing
Date;
(c) The Seller shall be the sole owner of good title to the
Ownership Interests of the applicable Owner free and clear of all liens,
encumbrances, restrictions, conditions and agreements (other than this
Agreement);
(d) The Seller shall not have amended or allowed to be amended,
and hereby covenants not to amend or allow the amendment of, the organizational
documents of the applicable Owner without Purchaser's express prior written
consent;
(e) There shall be no unsatisfied state or federal tax liens
against or affecting the applicable Owner, or any tax audit of the applicable
Owner in process, which could result in a lien against such Owner's Property or
the Ownership Interests in such Owner; and
(f) There shall be no outstanding, unsettled claim against the
applicable Owner arising under any insurance policies in respect of such Owner
or such Owner's Property.
SECTION 5. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE.
The obligation of the Seller to assign and transfer to the Purchaser
the Ownership Interests in the Owner of each of the Properties on the applicable
Closing Date is subject to the satisfaction or waiver of the following
conditions precedent on and as of such Closing Date:
5.1 Purchase Price. The Purchaser shall deliver to the Seller the
Allocable Purchase Price of the applicable Property as provided in Section 3.3.
5.2 Closing Documents. The Purchaser shall have delivered to the
Seller:
(a) Duly executed and acknowledged counterparts of the documents
described in Subsections 4.1 (a), (c), (d), (e), (g) and (x);
(b) The Guaranty of Landlord's Obligations duly executed by the
Guarantors;
(c) A certificate of a duly authorized officer of the Purchaser
confirming the continued truth and accuracy of the representations and
warranties of the Purchaser in this Agreement;
(d) Certified copies of applicable resolutions and certificates of
incumbency with respect to the Purchaser, each of the Guarantors, and such other
persons as the Seller or the Tenant may reasonably require; and
(e) Such other documents, certificates and other instruments as
may be reasonably required to consummate the transaction contemplated hereby.
5.3 Opinions of Counsel. (i) The Seller shall have received a written
opinion from Lowndes, Drosdick, Doster, Xxxxxx & Xxxx, P.A., counsel to the
Purchaser, in form and substance reasonably satisfactory to Seller and its
counsel, regarding the organization, good standing and authority of the
Purchaser, the enforceability of this Agreement and such other matters with
respect to the transactions contemplated by this Agreement as the Seller may
reasonably require, and (ii) the Tenant shall have received a written opinion
from Hunton and Xxxxxxxx, counsel to the Purchaser, in form and substance
reasonably satisfactory to Tenant and its counsel, regarding the organization,
good standing and authority of each of the Guarantors and the enforceability of
the Lease, the Owner Agreement, the Guaranty of Landlord's obligations and such
other matters with respect to the transactions contemplated by this Agreement as
MI or Tenant may reasonably require.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SELLER.
To induce the Purchaser to enter into this Agreement, the Seller, the
Owner and, if Seller is other than MI, MI, represents and warrants to the
Purchaser as follows:
6.1 Status and Authority of the Seller. The Seller (if other than MI)
is, or will be at or before Closing, a corporation duly organized, validly
existing and in corporate good standing under the laws of its state of
incorporation, and has all requisite power and authority under the laws of such
state and its respective charter documents to enter into and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. The Seller has, or will have at or before Closing, duly qualified to
transact business and is in good standing in the State of Florida.
6.2 Status and Authority of MI. MI is a corporation duly organized,
validly existing and in corporate good standing under the laws of its state of
incorporation, and has all requisite power and authority under the laws of such
state and its respective charter documents to enter into and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. MI has duly qualified to transact business and is in good standing in
the State of Florida.
6.3 Status and Authority of Owner. Each Owner is, or will be at
Closing, a limited liability company, duly organized, validly existing and in
good standing under the laws of the State of Delaware and duly qualified to do
business and in good standing under the laws of the State of Florida.
6.4 Status and Authority of Tenant. Tenant is, or will be at Closing, a
corporation, duly organized, validly existing and in good standing under the
laws of the State of Delaware and duly qualified to do business and in good
standing under the laws of the State of Florida.
6.5 Owners' Organizational Documents. Owners' organizational documents
provided (or to be provided) by Seller to Purchaser prior to Closing are true
and complete copies thereof and of all amendments and modifications with respect
thereto and there are no other agreements between or among the members of any
Owner in respect of such organizational documents.
6.6 Assets and Liabilities of Owners. The sole assets and liabilities
of each Owner are, or will be at Closing, the Assets and the Lease relating to
the Property owned by such Owner, except income earned and expenses incurred in
the ordinary course of business by the Owner, if any, subsequent to the opening
of the hotel comprising a part of the Improvements, if any, developed on the
Owner's Property in accordance with this Agreement, which income and expenses
shall be disclosed by Seller at the Closing relating to such Property and an
appropriate adjustment, if any is required, shall be made at such Closing.
6.7 Ownership of Owners. The Seller is, or will be at Closing, the sole
member of each Owner and owns, or will own at Closing, 100% of the Ownership
Interests in each Owner, free and clear of all liens, security interests,
assignments, options and adverse claims to title of any kind or character, and
such Ownership Interests are not the subject of any agreement (other than this
Agreement) providing for the sale and transfer thereof.
6.8 No Employees. Upon Closing, the applicable Owner will not have any
employees, will not be a party to any employment agreements and will not have
any outstanding obligations in respect of any former employees.
6.9 Existing Agreements. There are no (or will not be at the Closing)
service contracts, maintenance agreements, leasing commissions or brokerage
agreements, repair contracts, property management contracts, contracts for the
purchase or delivery of labor, services, materials or goods, supplies or
equipment, leases, licensees or occupancy agreements, or similar agreements
entered into by or on behalf of any Owner which will be obligations of Purchaser
or the Owner after the Closing, other than (i) the Permitted Encumbrances, (ii)
the documents to be assigned to the Purchaser pursuant to the terms hereof,
(iii) the Contracts, (iv) the Leases, (v) the Owner Agreement, and (vi) any
other document or instrument given or entered into in connection with Closing.
6.10 Tax Returns. All tax returns for federal, state or local income,
excise, sales and use, personal property and franchise taxes required by law to
be filed by an Owner prior to the date of the Closing applicable to such Owner
will be prepared and duly filed, prior to the Closing (or after Closing with
respect to pre-Closing matters) and all taxes, if any, shown on such returns or
otherwise determined to be due, together with any interest or penalties thereon,
will be paid by or on behalf of Owner prior to Closing, or allowance made
therefor at Closing.
6.11 Action of the Seller. MI has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and upon
the execution and delivery of any document to be delivered by MI or the Owner on
or prior to each Closing Date, such document shall constitute the valid and
binding obligation and agreement of MI, enforceable against MI in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
affecting the rights and remedies of creditors and general principles of equity.
6.12 No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by the Seller, nor compliance with the terms and
provisions hereof, will result in any breach of the terms, conditions or
provisions of, or conflict with or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any Property pursuant to the
terms of any indenture, mortgage, deed of trust, note, evidence of indebtedness
or any other agreement or instrument by which the Seller or any Owner is bound.
6.13 Litigation. Neither the Seller nor the Owner has received written
notice of and, to the Seller's knowledge, no investigation, action or proceeding
is pending or, to the Seller's knowledge, threatened, and neither the Seller nor
the Owner has received written notice of and, to the Seller's knowledge, no
investigation looking toward such an action or proceeding has begun, which (a)
questions the validity of this Agreement or any action taken or to be taken
pursuant hereto, or (b) may result in or subject Owner or Owner's Property to a
material liability which is not covered by insurance, whether or not Purchaser
is indemnified by Seller with respect to the same, or (c) involves condemnation
or eminent domain proceedings against any material part of Owner's Property.
6.14 Not A Foreign Person. The Seller is not a "foreign person" within
the meaning of Section 1445 of the United States Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.
6.15 Construction Contracts; Mechanics' Liens. At the Closing, there
will be no outstanding contracts made by the Seller or the Owner to which such
Closing applies for the construction or repair of any improvements to the Real
Property relating to Owner's Property which have not been fully paid for or
provision for the payment of which has not been made by Seller and Seller shall
cause the Owner to discharge and have released of record or bonded all
mechanics' or materialmen's liens, if any, arising from any labor or materials
furnished to such Real Property prior to the Closing to the extent any such lien
is not insured over by the Title Company or bonded over pursuant to applicable
law.
6.16 Permits, Licenses. As of the Closing related to a Property, there
will be in effect all material licenses (including liquor licenses, if
required), permits and other authorizations necessary for the then current use,
occupancy and operation of such Property, unless failure to obtain any such
licenses, permits and other authorizations is disclosed to Purchaser, and
Purchaser waives compliance herewith in accordance with Section 4.2(b) of this
Agreement.
6.17 Hazardous Substances. Except as existing as of the date of closing
under the Little Xxxx Xxxxx Contract, including without limitation any matters
described in the Environmental Reports and any Updated Environmental Reports, to
the Seller's knowledge, neither the Seller nor Owner of the subject Property,
since the date that Owner acquired title to the Property, has stored or disposed
of (or engaged in the business of storing or disposing of, or authorized the
storage or disposal of) or has released or caused or authorized the release of
any hazardous waste, contaminants, oil, radioactive or other material on such
Property, or any portion thereof, the removal of which is required or the
maintenance of which is prohibited or penalized by any applicable Federal, state
or local statutes, laws, ordinances, rules or regulations, and which has not as
of the Closing Date been removed from the subject Property in accordance with
such applicable statutes, laws, ordinances, rules or regulations.
6.18 Insurance. The Seller has received no written notice from any
insurance carrier of defects or inadequacies in the Property owned by the
applicable Owner which, if uncorrected, would result in a termination of
insurance coverage or a material increase in the premiums charged therefor.
6.19 Condition of Property. To Seller's knowledge, the Improvements on
the Property; as of the applicable Closing Date, will be in good working order
and repair, mechanically and structurally sound, free from material defects in
materials and workmanship, constructed with materials that are "new," subject to
such "punch list" work as may be required upon Substantial Completion of such
Improvements.
6.20 Financial Information. Financial information, including, without
limitation, all books and records and financial statements of the applicable
Owner, which have been provided to Purchaser are true, correct and complete in
all material respects.
6.21 Contracts. Seller and Owner have performed all of their
obligations under each Contract to which the applicable Owner is a party or is
subject and no fact or circumstance has occurred, which by itself or with the
passage of time or the giving of notice or both would constitute a default under
any such Contract. Further, to Seller's knowledge, all other parties to such
Contracts have performed all of their obligations thereunder in all material
respects and are not in default thereunder.
6.22 Title to FF&E. The applicable Owner has good and marketable title
to the FF&E described on the FF&E Schedule and in the Plans and Specifications
(to the extent that the Plans and Specifications describe FF&E).
6.23 FF&E. The FF&E Schedule and the Plans and Specifications (to the
extent the Plans and Specifications describe FF&E) accurately describe in all
material respects the FF&E owned by the applicable Owner and located at such
Owner's Property and, to Seller's knowledge, such FF&E is "new" and has not been
used prior to its use at such Property.
The representations and warranties made in this Agreement by Seller,
Owner and, if applicable, MI, in Section 6.1 through Section 6.14, inclusive,
are made as of the date hereof and shall be deemed remade by the Seller, Owner
and, if applicable, MI, as of each Closing Date for the Ownership Interests then
being assigned by the Seller, and as to each Owner in respect to which such
Ownership Interests relate, and as to the Property owned by such Owner, with the
same force and effect as if made on, and as of, such date; and the
representations and warranties made in this Agreement by Seller, Owner and, if
applicable, MI, in Section 6.15 through Section 6.23, inclusive, shall be made
as of the Closing Date in respect of the Property in respect of which the
Ownership Interests in the Owner thereof are being sold and transferred,
provided, however, that, the Seller shall have the right, from time to time
prior to the applicable Closing Date, with respect to any Ownership Interests
and related Owner and/or Property as to which a Closing has not yet occurred, to
modify the representations and warranties made in Section 6.12 (No Violation of
Agreements), Section 6.13 (Litigation) and Section 6.18 (Insurance) as a result
of changes in applicable conditions beyond the control of Owner by notice to the
Purchaser and, in such event, the representations and warranty shall be deemed
modified to the extent required by such changes, and (a) if Seller agrees to
indemnify Purchaser against any loss that may be suffered by Purchaser as a
result of such changes, then Purchaser will be required to close hereunder
without any abatement of Allocable Purchase Price or changes in any other
condition, and (b) if Seller elects not to so indemnify Purchaser, Purchaser
shall have the option to either accept the change and close, or reject the
change, in which case Purchaser's obligation to purchase the Ownership Interests
of the Owner of the Property in question shall terminate. All representations
and warranties made in this Agreement by the Seller shall survive the applicable
Closing for a period of one year. Any action, suit or proceeding with respect to
the truth, accuracy or completeness of any such representation or warranty shall
be commenced and served, if at all, on or before the date which is twelve (12)
months after the date of such Closing and, if not commenced on or before such
date, thereafter shall be void and of no force or effect. The representation and
warranties made by Seller herein shall not be applicable to, and expressly shall
not survive, an Accelerated Closing pursuant to the provision of Section 3.2,
but the provisions of the following two paragraphs of this Section 6 shall apply
to any such Accelerated Closing.
Prior to any Closing contemplated by this Agreement, Purchaser will
have had the opportunity to investigate independently all physical aspects of
the Property of the Owner which is the subject of the Closing, and to make all
such independent inspections and/or investigations of such Property that
Purchaser deems necessary or desirable including, without limitation, review of
the building permits, certificates of occupancy, environmental audits and
assessments, toxic reports, surveys, investigation of land use and development
rights, development restrictions and conditions that are or may be imposed by
governmental agencies, agreements with associations or other private parties
affecting or concerning the Property, the condition of title, soils and
geological reports, engineering and structural certificates, tests and
third-party reports (if any), governmental agreements and approvals and
architectural plans and site plans. Purchaser represents and warrants that, in
entering into this Agreement, Purchaser has not relied on any representation,
warranty, promise or statement, express or implied, of Seller, any Owner, or
anyone acting for or on behalf of Seller or any Owner, other than as expressly
set forth in this Agreement; AND THAT, AS A MATERIAL INDUCEMENT TO THE EXECUTION
AND DELIVERY OF THIS AGREEMENT BY SELLER, PURCHASER ACKNOWLEDGES THAT THE
PROPERTY OWNED BY THE OWNER WILL, UPON THE ACQUISITION BY PURCHASER OF THE
OWNERSHIP INTERESTS IN SUCH OWNER, BE IN ITS "AS IS" CONDITION AND IN ITS "AS
IS" STATE OF REPAIR, WITH ALL FAULTS SUBJECT ONLY, HOWEVER, TO THE EXPRESS
COVENANTS, REPRESENTATIONS AND WARRANTIES MADE BY THE SELLER FOR THE BENEFIT OF
PURCHASER EXPRESSLY SET FORTH IN THIS AGREEMENT.
Except as otherwise expressly provided in this Agreement or any
documents executed and delivered by Seller to the Purchaser at the Closing, the
Seller and Owners disclaim the making of any representations or warranties,
express or implied, regarding the Ownership Interests, Owners or Properties or
matters affecting the same, whether made by the Seller, any Owner, on the
Seller's behalf or any Owner's behalf, or otherwise, including, without
limitation, the physical condition of the Properties, title to, the boundaries
or other survey matters of, the Real Property, pest control matters, soil
conditions, the presence, existence or absence of hazardous wastes, toxic
substances or other environmental matters, compliance with building, health,
safety, land use and zoning laws, regulations and orders, structural and other
engineering characteristics, traffic patterns, market data, economic conditions
or projections, and any other information pertaining to the Properties or the
market and physical environments in which they are located. The Purchaser
acknowledges that the Purchaser has entered into this Agreement with the
intention of making and relying upon its own investigation or that of third
parties with respect to the physical, environmental, economic and legal
condition of each Property, except as expressly provided in Section 6.12,
Section 6.13, Section 6.15, Section 6.16, Section 6.17, Section 6.19, Section
6.20 and Section 6.22. The Purchaser further acknowledges that it has not
received from or on behalf of the Seller or any Owner, any accounting,
feasibility, marketing, economic, tax, legal, architectural, engineering,
property management or other advice with respect to this transaction and is
relying solely upon the advice of third party accounting, tax, legal,
architectural, engineering, property management and other advisors.
As used in this Agreement, the phrase "to Seller's knowledge" or words
of similar import shall mean the actual (and not constructive or imputed)
knowledge, without independent investigation or inquiry, of Xxxxx Xxxxxx (and
any subsequent officer of Lodging Development at MI having direct oversight
responsibility for the transactions contemplated hereby), Xxxxxxxxxxx Xxxxx (and
any subsequent finance officer of MI having direct oversight responsibility for
the transactions contemplated hereby), Xxxxx Xxxxx (and any subsequent officer
of MI serving as project manager for the transaction contemplated hereby), Xxxx
Xxx (and any subsequent Vice President - Design and Project Management of
Marriott International Design and Construction Services, Inc. having direct
oversight responsibility for the transactions contemplated hereby) and of an
employee of MI assigned to work at the Property in connection with construction
of the Improvements and/or in connection with the installment of the FF&E on a
full-time basis, if any.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
To induce the Seller to enter into this Agreement, the Purchaser and,
if Purchaser is other than CHLP, CHLP represents and warrants to the Seller as
follows:
7.1 Status and Authority of the Purchaser. The Purchaser is duly
organized and validly existing under the laws of the jurisdiction in which it
was formed, and has all requisite power and authority under the laws of such
state and under its charter documents to enter into and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby. The
Purchaser is, or will be by the Closing Date, duly qualified and in good
standing in the State of Florida.
7.2 Status and Authority of the Guarantors. CHLP is a limited
partnership duly organized and validly existing under the laws of the State of
Delaware. CHP is a corporation duly organized and validly existing under the
laws of the State of Maryland. CHP and CHLP each has all requisite power and
authority under the laws of the state under whose laws it has organized or
incorporated and under their respective charter documents to enter into and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby. CHP and CHLP are, or will be by the Closing Date, duly
qualified and in good standing in the State of Florida.
7.3 Action of the Purchaser. The Purchaser has taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
and upon the execution and delivery of any document to be delivered by the
Purchaser on or prior to each Closing Date, such document shall constitute the
valid and binding obligation and agreement of the Purchaser, enforceable against
the Purchaser in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting the rights and remedies of creditors and general
principles of equity.
7.4 No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by the Purchaser, nor compliance with the terms
and provisions hereof, will result in any breach of the terms, conditions or
provisions of, or conflict with or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any property or assets of the
Purchaser pursuant to the terms of any indenture, mortgage, deed of trust, note,
evidence of indebtedness or any other agreement or instrument by which the
Purchaser is bound.
7.5 Litigation. Purchaser has received no written notice of and, to
Purchaser's knowledge, no investigation, action or proceeding is pending and, to
Purchaser's knowledge, no action or proceeding is threatened and Purchaser has
received no notice of, and to Purchaser's knowledge, no investigation looking
toward such an action or proceeding has begun, which questions the validity of
this Agreement or any action taken or to be taken pursuant hereto.
The representations and warranties made in this Agreement by the
Purchaser are made as of the date hereof and shall be deemed remade by the
Purchaser as of the applicable Closing Date with the same force and effect as if
made on, and as of, such date. All representations and warranties made in this
Agreement by the Purchaser shall survive the applicable Closing for a period of
one year. Any action, suit or proceeding with respect to the truth, accuracy or
completeness of any such representation or warranty shall be commenced and
served, if at all, on or before the date which is twelve (12) months after the
date of such Closing and, if not commenced on or before such date, thereafter
shall be void and of no force or effect.
As used in this Agreement, the phrase "to Purchaser's knowledge" or
words of similar import shall mean the actual (and not constructive or imputed)
knowledge, without independent investigation or inquiry, of Xxxxxxx Xxxxxx,
Xxxxx Xxxxxx and Xxxxxx Xxxxxx.
SECTION 8. COVENANTS OF THE SELLER.
The Seller, and if MI is not the Seller, MI, hereby covenants with the
Purchaser as follows:
8.1 Compliance with Laws. From the date of this Agreement to the
Closing Date for the purchase of the Ownership Interests of any Owner, to cause
such Owner to use commercially reasonable efforts to comply in all material
respects with (i) all laws, regulations and other requirements affecting the
Property owned by such Owner, from time to time applicable, of every
governmental body having jurisdiction of such Property or the use or occupancy
of any Improvements located thereon and (ii) all terms, covenants and conditions
of instruments of record affecting such Property, except that neither Seller nor
any Owner shall have any obligations or liability to Purchaser to satisfy or
comply with any of the terms or conditions of the DOR or DCCRO, including
without limitation, the obligation to develop the Required Improvements (as that
term is defined in the DCCRO encumbering each Property).
8.2 Correction of Defects. In respect of any Property for which the
Owner's Ownership Interests have been sold and transferred to Purchaser at a
Closing hereunder, to complete, at the Seller's cost, all punch-list items and
to correct, at Seller's cost, all defects in the Improvements that are
discovered and disclosed by or to the Seller within one year following the
acceptance of the Improvements by the applicable Owner or Seller (as the case
may be) from the general contractor for such Improvements. At Closing, Seller
shall, at Purchaser's request, certify the outside date of such one-year
warranty period to Purchaser. The Purchaser agrees to cooperate, or cause the
applicable Owner to cooperate, with the Seller and/or the Tenant in enforcing
any applicable warranties or guaranties with respect to such defects. Seller
shall have the exclusive right and obligation to pursue the aforementioned
rights and remedies; however, in the event that Seller fails to exercise such
rights and remedies, after ten (10) days from notice by Purchaser to Seller of
Seller's failure to exercise such rights and remedies, Purchaser shall then have
the right to pursue the same. The provisions of this Section 8.2 shall survive
any Closing under this Agreement.
8.3 Insurance. The Seller shall, at no expense to the Seller,
reasonably cooperate with Purchaser in connection with Purchaser's obtaining any
insurance which may be required to be maintained by Purchaser or Owner under the
terms of the Lease for each Property following the Closing.
8.4 Material Defects in Structural Systems. If, to Seller's knowledge,
a material construction defect or a material design defect in the structural
system of the building exists at any time during construction and prior to
Closing, Seller shall disclose the same to Purchaser, provided that Seller shall
have no obligation to correct such disclosed defects if the cost to correct such
defects exceeds $250,000. If such cost exceeds $250,000 and Seller elects not to
correct, then Purchaser's sole remedy shall be to terminate this Agreement with
respect to the affected Property, in which event this Agreement shall terminate
and be of no further force or effect with respect to the affected Property and
Seller shall reimburse to Purchaser the Purchaser's expenses incurred in respect
of such affected Property, not to exceed $140,000 (and if, with respect to all
Properties except for the affected Property, either (i) Closing has occurred, or
(ii) the contemplated Closing will not occur as a result of Purchaser's election
to terminate this Agreement pursuant to Sections 2.3, 2.4, 2.5, 2.7(d), 8.4 or
10.1 of this Agreement, then the Deposit shall be refunded to Purchaser).
8.5 Final Payment. Upon final payment to the General Contractor, Seller
shall provide Purchaser with a copy of the final requisition received from the
General Contractor, evidence of Seller's payment thereof, and a final release of
liens.
SECTION 9. APPORTIONMENTS.
9.1 Apportionments. Representatives of the Purchaser and the Seller
shall make and perform any and all of the adjustments and apportionments which
are appropriate and usual for a transaction of this nature, taking into account
the applicable provisions of the Leases and this Agreement. The adjustments
hereunder shall be calculated or paid in an amount based upon a fair and
reasonable estimated accounting performed and agreed to by representatives of
the Seller and the Purchaser at the applicable Closing. Subsequent final
adjustments and payments shall be made in cash or other immediately available
funds as soon as practicable after the Closing Date, and in any event within
ninety (90) days after such Closing Date, based upon an agreed accounting
performed by representatives of the Seller and the Purchaser. In the event the
parties have not agreed with respect to the adjustments required to be made
pursuant to this Section 9.1 within such ninety-day period, upon application by
either party, a certified public accountant reasonably acceptable to the
Purchaser and the Seller shall determine any such adjustments which have not
theretofore been agreed to between the Seller and the Purchaser. The charges of
such accountant shall be borne fifty percent (50%) by the Seller and fifty
percent (50%) by the Purchaser.
Seller and Purchaser acknowledge and agree that Purchaser, in acquiring
the Ownership Interests in an Owner hereunder, is acquiring the Assets owned by
such Owner at the time of Closing and the Lease for the Real Property comprising
a part of those Assets, and that any and all other assets, including without
limitation, cash on hand or in accounts in excess of Owner's liabilities, will
be distributed to and/or retained by, and be the property of, Seller.
9.2 Closing Costs. (a) Seller shall reimburse Purchaser for up to a
maximum of $600,000 for due diligence and closing expenses actually incurred by
Purchaser to third parties in connection with all three (3) Properties combined
in the following categories: (i) seventy-five percent (75%) of the legal
expenses incurred in connection with the negotiation and preparation of the
Little Xxxx Xxxxx Contract and all Exhibits thereto, including without
limitation the DOR and DCCRO; (ii) legal expenses incurred in connection with
the negotiation and documentation of this Agreement, the Leases, Limited Rent
Guaranty, Stock Pledge Agreement, Owner Agreement, Guaranty of Landlord's
Obligations and related agreements; (iii) environmental reports prepared in
connection with the purchase and sale of the Ownership Interests in the Owners
of the Properties pursuant to this Agreement; (iv) property appraisals for the
Properties prepared in connection with the purchase and sale of the Ownership
Interests in the Owners of the Properties under this Agreement; (v)
engineering/property evaluation reports prepared in connection with the sale of
the Ownership Interests in the Owners of the Properties to Purchaser; (vi)
property surveys of the Properties prepared in connection with due diligence
under this Agreement; and (vii) up to $30,000 of reasonable out-of-pocket
expenses incurred by Purchaser for travel (including meals), postage,
long-distance telephone charges and photocopying in connection with the
transactions contemplated hereby. Expenses which are to be reimbursed to
Purchaser pursuant to clause (i) of the preceding sentence shall be reimbursed
to Purchaser upon Closing under the Little Xxxx Xxxxx Contract (unless Purchaser
fails to close under such Contract and Seller elects to terminate this Agreement
pursuant to Section 3.5(a)(iii)). Further expenses which are to be reimbursed
pursuant to the clauses (ii) and (vii) of the first sentence of this paragraph
which relate to all three Properties shall be allocated one-third (1/3) to each
Property and reimbursed at the time of the Closing in respect of the Ownership
Interests of the Owner of each Property; and expenses which are to be reimbursed
to Purchaser pursuant to the first sentence of this paragraph which are specific
to a Property (i.e., expenses under clauses (iii) through (vi), inclusive) shall
be reimbursed at the time of the Closing in respect of the Ownership Interests
of the Owner of that particular Property. All of Purchaser's expenses in excess
of $600,000 or Purchaser's expenses which do not fall within the above
categories shall be borne by Purchaser.
(b) Seller shall pay the premiums for the Title Insurance Policies to
be provided at each Closing pursuant to Section 2.4 and Section 4.3(a) and shall
be given a credit (not to exceed $180,000.00) against its obligation under
Section 9.2(a) to reimburse Purchaser's expenses to the extent of the amount
paid by or on behalf of Seller or any Owner for such premiums including, without
limitation, premiums paid in connection with title insurance policies to be
issued upon the acquisition of each Property pursuant to the Little Xxxx Xxxxx
Contract and premiums paid for incremental increases in the amount of coverage
provided by such policies during construction.
(c) Seller and Purchaser each agree to cooperate with each other in
minimizing due diligence, closing and other costs to be incurred in connection
with the transactions contemplated hereby.
(d) Seller and Purchaser shall each pay one-half of any transfer,
recordation or other similar taxes, impositions or expenses incurred in
connection with the Closings of the transactions contemplated hereby.
(e) Except as expressly provided in this Section 9, Seller and
Purchaser shall each pay their own separate costs and expenses incurred in
connection with the transactions contemplated hereby, including the fees and
expenses of counsel in connection with the preparation and negotiation of this
Agreement, the Leases and all other documents and instruments in connection
therewith and in consummating any and all of the transactions contemplated
hereby and thereby. The obligations of the parties under this Section 9 shall
survive the Closings.
SECTION 10. DEFAULT.
10.1 Default by the Seller. If the Seller shall have made any
representation or warranty herein which shall be untrue in any material respect
when made or updated as herein provided, or if the Seller shall fail to perform
any of the material covenants and agreements contained herein and such condition
or failure continues for a period of ten (10) days (or such additional period as
may be reasonably required to effectuate a cure of the same) after notice
thereof from the Purchaser, the Purchaser may terminate this Agreement with
respect to the Ownership Interests in the affected Owner or Owners of the
affected Property and Seller shall reimburse to Purchaser the Purchaser's
expenses incurred in respect of such affected Property, not to exceed $140,000
(and if, with respect to all Properties except for the affected Property, either
(i) Closing has occurred, or (ii) the contemplated Closing will not occur as a
result of Purchaser's election to terminate this Agreement pursuant to Sections
2.3, 2.4, 2.5, 2.7(d), 8.4 or 10.1 of this Agreement, then the Deposit shall be
refunded to Purchaser), and/or the Purchaser may pursue any and all remedies
available to it at law or in equity, including, but not limited to, a suit for
specific performance or other equitable relief; provided, however, that, (x) in
no event shall the Seller be liable for (and Purchaser hereby agrees that it
will not commence or prosecute any action for) consequential or punitive or
exemplary damages and (y) in no event shall the aggregate liability of the
Seller under this Agreement exceed an amount equal to Five Million Dollars
($5,000,000) plus the reasonable attorneys' fees and expenses incurred by
Purchaser in enforcing the Agreement against Seller in respect of Seller's
default. It is understood and agreed that for purposes of this Section 10.1, if
a default results from a false representation or warranty, such default shall be
deemed cured if the events, conditions, acts or omissions giving rise to the
falsehood are cured within the applicable cure period even though, as a
technical matter, such representation or warranty was false as of the date
actually made.
10.2 Default by the Purchaser. If the Purchaser shall have made any
representation or warranty herein which shall be untrue or misleading in any
material respect or if the Purchaser shall fail to perform any of the covenants
and agreements contained herein and such condition or failure shall continue for
a period of ten (10) days (or such additional period as may be reasonably
required to effectuate a cure of the same; provided that no such extension of
time shall apply to Purchaser's failure to pay the Allocable Purchase Price at
Closing or otherwise operate to extend the Closing Date) after notice thereof
from the Seller, the Seller may, as its sole and exclusive remedy, at law, or in
equity, terminate this Agreement with respect to any Property or Properties as
to which a Closing shall not yet have occurred, whereupon, the Purchaser shall
pay to the Seller, as liquidated damages and not as a penalty, the sum of Five
Million Dollars ($5,000,000.00) plus the reasonable attorneys' fees and expenses
incurred by Seller in enforcing the Agreement against Purchaser in respect of
Purchaser's default. It is understood and agreed that for purposes of this
Section 10.2, if a default results from a false representation or warranty, such
default shall be deemed cured if the events, conditions, acts or omissions
giving rise to the falsehood are cured within the applicable cure period even
though, as a technical matter, such representation or warranty was false as of
the date actually made.
10.3 Purchaser's Deposit. In order to secure Purchaser's performance
hereunder, including, without limitation, its obligation to pay liquidated
damages as provided in Section 10.2, Purchaser has heretofore provided a Five
Million Dollar ($5,000,000) deposit by delivering to MI an irrevocable and
unconditional letter of credit satisfying the requirements hereof in an amount
equal to $5,000,000 (said $5 Million deposit is herein referred to as the
"Deposit"). The Escrow Agent shall hold and disburse that portion of the Deposit
received by it pursuant to the terms of the Escrow Agreement entered into among
MI, CNL and Escrow Agent of even date herewith, a true copy of which is attached
hereto as Schedule P (the "Escrow Agreement").
Each Letter of Credit (herein "Letter of Credit") tendered by Purchaser
hereunder shall be irrevocable and unconditional, payable "at sight," issued by
a bank acceptable to MI and be in a form acceptable to MI, shall name MI as
beneficiary, be for a term of no less than one (1) year, and shall state on its
face that it automatically renews for a one year period from its respective
expiration date set forth therein and upon each anniversary of such date
thereafter, unless at least sixty (60) days prior to such expiration date, or
prior to any anniversary of such date, the bank issuing the Letter of Credit
notifies the following MI employees in writing by registered mail that it elects
not to renew the Letter of Credit:
Marriott International, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxxxxx Xxxxx, Vice President
Marriott International, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Senior Vice President, Lodging Finance
Marriott International, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Treasurer
and
Marriott International, Inc.
00000 Xxxxxxxx Xxxx, Xxxx. 52/923.00
Xxxxxxxx, Xxxxxxxx 00000
Attention: U.S. Development - Assistant General Counsel
Each Letter of Credit shall further state on its face that, if MI shall receive
notice from the bank issuing such Letter of Credit that it intends not to renew
such Letter of Credit, then MI shall be entitled to draw immediately on any such
Letter of Credit.
In the event that the bank which issued a Letter of Credit shall be
downgraded (i) by Standard and Poor's to a rating less than A-minus, or (ii) by
Xxxxx'x to a rating of less than A-3, then MI shall be entitled to draw on such
Letter of Credit if, after ten (10) days written notice to Purchaser that the
bank has been so downgraded, Purchaser fails to either replace such Letter of
Credit with a cash deposit of equal amount, or provide a substitute Letter of
Credit satisfying the requirements of this Section 10.3. MI shall promptly
deposit the proceeds so withdrawn with the Escrow Agent, which shall hold and
disburse the proceeds thereof in the manner provided for in the Escrow
Agreement.
If, after delivering the full $5,000,000 Deposit, Purchaser thereafter
defaults on its obligations hereunder such that Seller becomes entitled to the
$5 Million liquidated damages as provided in Section 10.2, Seller shall be
immediately entitled to the entire ($5,000,000) Deposit as such liquidated
damages. If Seller elects to terminate this Agreement pursuant to the provisions
of either Section 3.5(a)(ii) or Section 3.5(a)(iii), Purchaser shall be entitled
to the prompt return of the Deposit whereupon MI shall return any Letter(s) of
Credit held by MI hereunder to Purchaser and thereupon the parties shall have no
further obligations hereunder except any obligations which expressly survive a
termination of this Agreement. In the event Seller becomes entitled to the
Deposit hereunder, to the extent the Deposit is in the form of Letter(s) of
Credit, MI shall be entitled to draw immediately on such Letter(s) of Credit and
shall promptly deposit the proceeds thereof with Escrow Agent, which shall then
hold and disburse the proceeds thereof in the manner provided for in the Escrow
Agreement.
That portion of the Deposit received by Escrow Agent shall be held in
an interest-bearing account by the Escrow Agent and Escrow Agent shall be
authorized to deliver the interest accrued thereon from time to time to
Purchaser. The Escrow Agent shall retain the cash portion of the Deposit, and
Purchaser shall keep the Letter(s) of Credit in full force and effect, until
such date ("Return Date") as Closings shall have occurred in respect of the
Ownership Interests in the Owners of all three (3) Properties. Any cash portion
of the Deposit not applied to liquidated damages and/or reasonable attorneys'
fees and expenses pursuant to Section 10.2, and any Letter of Credit(s) then
held by MI (to the extent the proceeds of which are not required to be applied
to cover damages of the Seller pursuant to Section 10.2 as aforesaid) will be
returned to Purchaser promptly following the occurrence of the Return Date.
Purchaser shall be entitled to modify the form of collateral held
pursuant to this Section 10.3 only one time. If Purchaser elects initially to
deliver cash for the Deposit in accordance with this Section, such cash portion
of the Deposit may subsequently be replaced by a Letter of Credit in the amount
of such cash Deposit being replaced and satisfying all of the foregoing
requirements applicable to Letter(s) of Credit herein. Upon receipt by Seller of
such Letter(s) of Credit satisfying all of the requirements for same set forth
herein, Seller shall direct the Escrow Agent to return to Purchaser the cash
portion of the Deposit replaced by the Letter(s) of Credit. Alternatively, if
Purchaser delivers a Letter(s) of Credit to MI as the Deposit in accordance with
this Section, such Letter(s) of Credit may subsequently be replaced by
Purchaser's delivering to Escrow Agent cash or other immediately available funds
in the amount of the Letter(s) of Credit being replaced. Upon receipt of Escrow
Agent's written acknowledgment of receipt of such funds, MI shall return the
replaced Letter(s) of Credit to Purchaser.
SECTION 11. MISCELLANEOUS.
11.1 Agreement to Indemnify. (a) Subject to any express provisions of
this Agreement to the contrary, from and after any Closing, with respect to the
applicable Owner, (i) the Seller and, if Seller is not MI, MI shall indemnify,
defend and hold harmless the Purchaser from and against any and all obligations,
claims, losses, damages, liabilities, and expenses (including, without
limitation, reasonable attorneys' and accountants' fees and disbursements)
arising out of (v) any termination of employment of employees at any Property
prior to or upon the Closing with respect to such Property resulting from the
termination of employment of such employees by Owner or its operator and/or the
failure of Tenant to hire such employees (including, without limitation,
severance pay, wrongful discharge claims, and claims and/or fines under federal,
state or local statutes or regulations, including without limitation the Worker
Adjustment and Retraining Notification Act), (w) the employment of such
individuals prior to the Closing Date, including, without limitation,
employment-related claims; COBRA-related claims; disability claims; vacation;
sick leave; wages; salaries; payments due (or allocable) to any medical,
pension, and health and welfare plans, and any other employee benefit plan
established for the employees at the Property; and employee-related tax
obligations such as, but not limited to, social security and unemployment taxes
accrued as of the Closing Date, (x) events, acts, or omissions of the Owner that
occurred in connection with its ownership or operation of the Owner's Property
prior to the applicable Closing Date or obligations accruing prior to the
applicable Closing Date under any Contract of Owner (except to the extent of any
adjustment made in respect of such Contract at Closing), (y) any material breach
of a representation or warranty made by Seller, Owner and, if Seller is not MI,
MI under Section 6 (as such representations and warranties may be modified
pursuant to said Section 6 and subject to the one-year limitation period set
forth therein), or (z) any claim against Owner or Purchaser for damage to
property of others or injury to or death of any person or any debts or
obligations of or against Owner and arising out of any event occurring on or
about or in connection with Owner's Property or any portion thereof, at any time
or times prior to the applicable Closing Date, and (ii) the Purchaser and, if
Purchaser is not CHLP, CHLP shall indemnify, defend and hold harmless the Seller
from and against any and all obligations, claims, losses, damages, liabilities
and expenses (including, without limitation, reasonable attorneys' and
accountants' fees and disbursements) arising out of (x) events, acts, or
omissions of the Owner that occur in connection with its ownership or operation
of the Owner's Property from and after the applicable Closing Date or
obligations accruing from and after the applicable Closing Date under any
Contract of Owner (except to the extent of any adjustment made in respect of
such Contract at Closing), (y) any material breach of a representation or
warranty made by Purchaser and, if Purchaser is not CHLP, CHLP under Section 7
(and subject to the one year limitation period set forth therein), or (z) any
claim against Owner or Seller for damage to property of others or injury to or
death of any person or any claims for any debts or obligations of or against
Owner and arising out of any event occurring on or about or in connection with
Owner's Property or any portion thereof, at any time or times from and after the
applicable Closing Date. The provisions of this Section 11.1 shall not apply to
any liabilities or obligations with respect to hazardous substances, the
liabilities of the parties with respect thereto being governed by the
representation and warranty of Seller set forth in Section 6.17.
(b) Whenever it is provided in this Agreement that an obligation will
continue after Closing as an obligation of Owner or be assumed by Owner after
the applicable Closing, the Purchaser and, if Purchaser is not CHLP, CHLP shall
be deemed to have also agreed to indemnify and hold harmless the Seller and its
respective successors and assigns from and against all claims, losses, damages,
liabilities, costs, and expenses (including, without limitation, reasonable
attorneys' and accountants' fees and expenses) arising from any failure of such
Owner and/or the Purchaser to perform the obligation so continued or assumed
after the applicable Closing (but not with respect to any act or omission which
occurred prior to Closing).
(c) Whenever either party shall learn through the filing of a claim or
the commencement of a proceeding or otherwise of the existence of any liability
for which the other party is or may be responsible under this Agreement, the
party learning of such liability shall notify the other party promptly and
furnish such copies of documents (and make originals thereof available) and such
other information as such party may have that may be used or useful in the
defense of such claims and shall afford said other party full opportunity to
defend the same in the name of such party and shall generally cooperate with
said other party in the defense of any such claim.
(d) The provisions of this Section 11.1 shall survive the Closings
hereunder and the termination of this Agreement. All representations and
warranties made in this Agreement by the Seller and Purchaser shall survive the
applicable Closing for a period of one year. Any action, suit or proceeding with
respect to the truth, accuracy or completeness of any such representation or
warranty shall be commenced, if at all, on or before the date which is twelve
(12) months after the date of such Closing and served promptly (but in no event
later than sixty (60) days after commencement) and, if not commenced on or
before such date and so served, thereafter shall be void and of no force or
effect.
11.2 Brokerage Commissions. Each of the parties hereto represents to
the other party that it dealt with no broker, finder or like agent in connection
with this Agreement or the transactions contemplated hereby, and that it
reasonably believes that there is no basis for any other person or entity to
claim a commission or other compensation for bringing about this Agreement or
the transactions contemplated hereby. The Seller shall indemnify and hold
harmless the Purchaser and its successors and assigns from and against any loss,
liability or expense, including, reasonable attorneys' fees, arising out of any
claim or claims for commissions or other compensation for bringing about this
Agreement or the transactions contemplated hereby made by any broker, finder or
like agent, if such claim or claims are based in whole or in part on dealings
with the Seller. The Purchaser shall indemnify and hold harmless the Seller and
its successors and assigns from and against any loss, liability or expense,
including, reasonable attorneys' fees, arising out of any claim or claims for
commissions or other compensation for bringing about this Agreement or the
transactions contemplated hereby made by any broker, finder or like agent, if
such claim or claims are based in whole or in part on dealings with the
Purchaser. Nothing contained in this section shall be deemed to create any
rights in any third party. The provisions of this Section 11.2 shall survive the
Closings hereunder and any termination of this Agreement.
11.3 Certain Contracts. Seller agrees to incorporate (or use such
efforts to incorporate as described in Schedule N) the provisions attached
hereto as Schedule N into each General Contract entered into for the
construction of Improvements on the Properties.
11.4 Publicity. The parties agree that no party shall, with respect to
this Agreement and the transactions contemplated hereby, contact or conduct
negotiations with public officials, make any public pronouncements, issue press
releases or otherwise furnish information regarding this Agreement or the
transactions contemplated hereby to any third party without the consent of the
other party, which consent shall not be unreasonably withheld, except as may be
required by law or as may be reasonably necessary, on a confidential basis, to
inform any rating agencies, potential sources of financing, financial analysts,
or to entities involved with a sale of a controlling interest in the Seller, the
Purchaser or any of their affiliates or to receive legal, accounting and/or tax
advice; provided, however, that, if such information is required to be disclosed
by law, the party so disclosing the information will use reasonable efforts to
give notice to the other party as soon as such party learns that it must make
such disclosure.
11.5 Notices. (a) Any and all notices, demands, consents, approvals,
offers, elections and other communications required or permitted under this
Agreement shall be deemed adequately given if in writing and the same shall be
delivered either in hand, by telecopier with written acknowledgment of receipt,
or by mail or Federal Express or similar expedited commercial carrier, addressed
to the recipient of the notice, postpaid and registered or certified with return
receipt requested (if by mail), or with all freight charges prepaid (if by
Federal Express or similar carrier).
(b) All notices required or permitted to be sent hereunder shall be
deemed to have been given for all purposes of this Agreement upon the date of
acknowledged receipt, in the case of a notice by telecopier, and, in all other
cases, upon the date of receipt or refusal, except that whenever under this
Agreement a notice is either received on a day which is not a Business Day or is
required to be delivered on or before a specific day which is not a Business
Day, the day of receipt or required delivery shall automatically be extended to
the next Business Day.
(c) All such notices shall be addressed,
if to the Seller to:
Marriott International, Inc
00000 Xxxxxxxx Xxxx, Xxxx. 52/924.11
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxxxxx Xxxxx
[Telecopier No. (000) 000-0000
with a copy to:
Marriott International, Inc.
00000 Xxxxxxxx Xxxx, Xxxx. 52/923.00
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx, Esquire
[Telecopier No. (000) 000-0000]
and
Holland & Knight LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx Xxxxx, Esq.
[Telecopier No. (000) 000-0000]
If to the Purchaser, to:
CNL Hospitality Partners, LP
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
[Telecopier No. (000) 000-0000]
with a copy to:
Lowndes, Drosdick, Doster, Xxxxxx & Xxxx, P.A.
000 Xxxxx Xxxx Xxxxx
Post Office Box 2809
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
[Telecopier No. (000) 000-0000]
and
Hunton & Xxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxx 0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
[Telecopier No. (000) 000-0000]
If to Tenant:
Marriott International, Inc.
00000 Xxxxxxxx Xxxx, Xxxx. 52/924.11
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxxxxx Xxxxx
[Telecopier No. (000) 000-0000
with a copy to:
Marriott International, Inc.
00000 Xxxxxxxx Xxxx, Xxxx. 52/923.00
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx, Esquire
[Telecopier No. (000) 000-0000]
and
Holland & Knight LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx Xxxxx, Esq.
[Telecopier No. (000) 000-0000]
(d) By notice given as herein provided, the parties hereto and their
respective successors and assigns shall have the right from time to time and at
any time during the term of this Agreement to change their respective addresses
effective upon receipt by the other parties of such notice and each shall have
the right to specify as its address any other address within the United States
of America.
11.6 Waivers, Etc. Any waiver of any term or condition of this
Agreement, or of the breach of any covenant, representation or warranty
contained herein, in any one instance, shall not operate as or be deemed to be
or construed as a further or continuing waiver of any other breach of such term,
condition, covenant, representation or warranty or any other term, condition,
covenant, representation or warranty, nor shall any failure at any time or times
to enforce or require performance of any provision hereof operate as a waiver of
or affect in any manner such party's right at a later time to enforce or require
performance of such provision or any other provision hereof. This Agreement may
not be amended, nor shall any waiver, change, modification, consent or discharge
be effected, except by an instrument in writing executed by or on behalf of the
party against whom enforcement of any amendment, waiver, change, modification,
consent or discharge is sought.
11.7 Assignment; Successors and Assigns. This Agreement and all rights
and obligations hereunder shall not be assignable by any party without the
written consent of the other party, except (i) that the Purchaser may assign
this Agreement to any entity wholly owned, directly or indirectly, by CHLP
provided, however, that, in the event this Agreement shall be assigned to any
entity wholly owned, directly or indirectly, by CHLP, CHLP shall remain fully
and primarily liable for the obligations of the "Purchaser" hereunder and (ii)
Seller may assign this Agreement to any entity wholly owned, directly or
indirectly, by MI that becomes the member(s) of any one or more of the limited
liability companies comprising an Owner or Owners; provided such assignee would
not violate the terms of the DCCRO and Seller and MI remain liable for Seller's
obligations hereunder subject to the limitations set forth herein. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Agreement is
not intended and shall not be construed to create any rights in or to be
enforceable in any part by any other persons.
11.8 Severability. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision or provisions
in question invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case.
11.9 Counterparts, Etc. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and shall supersede and take the place of any other
instruments purporting to be an agreement of the parties hereto relating to the
subject matter hereof. This Agreement may not be amended or modified in any
respect other than by the written agreement of all of the parties hereto.
11.10 Governing Law. This Agreement shall be interpreted, construed,
applied and enforced in accordance with the laws of the State of Florida.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in such court or courts located in
the State of Florida as is provided by law; and the parties consent to the
jurisdiction of said court or courts located in the State of Florida and to
service of process by registered mail, return receipt requested, or by any other
manner provided by law.
11.11 Performance on Business Days. In the event the date on which
performance or payment of any obligation of a party required hereunder is other
than a Business Day, the time for payment or performance shall automatically be
extended to the first Business Day following such date.
11.12 Attorneys' Fees. If any lawsuit or arbitration or other legal
proceeding arises in connection with the interpretation or enforcement of this
Agreement, the prevailing party therein shall be entitled to receive from the
other party the prevailing party's costs and expenses, including reasonable
attorneys' fees, incurred in connection therewith, in preparation therefor and
on appeal therefrom, which amounts shall be included in any judgment therein.
11.13 Relationship. Nothing herein contained shall be deemed or
construed by the parties hereto, nor by any third party, as creating the
relationship of principal and agent or of partnership or joint venture between
the parties hereto, it being understood and agreed that no provision contained
herein, nor any acts of the parties hereto shall be deemed to create the
relationship between the parties hereto other than the relationship of the
seller and purchaser.
11.14 Section and Other Headings. The headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
11.15 Disclosure. From and after Closing on the purchase and sale of
the Ownership Interests in any Owner, and at the written request of Purchaser,
Seller shall provide such financial statements (in addition to the financial
statements to be provided at Closing in accordance with Section 4.1(u)) in
respect of such Owner's operations from the date of Owner's commencement of
business to the date of such Closing to the extent such financial statements are
required by applicable securities laws and regulations and the SEC's
interpretation thereof; provided, however, that (i) Seller reserves the right,
in good faith, to challenge, and require Purchaser to use commercially
reasonable efforts to challenge, any assertion by the SEC, any other applicable
regulatory authority, or Purchaser's independent public accountants that
applicable law or regulations require the provision of such financial
statements, (ii) Purchaser shall not, without Seller's consent (which consent
shall not be unreasonably withheld, delayed or conditioned), acquiesce to any
such challenged assertion until Purchaser has exhausted all reasonable available
avenues of administrative review, and (iii) Purchaser shall consult with Seller
in pursuing any such challenge and will allow Seller to participate therein if
and to the extent that Seller so elects. Any and all costs and expenses incurred
by Seller, including without limitation reasonable attorneys fees and expenses,
in connection with providing such financial statements to Purchaser or in
connection with any challenge to an SEC assertion (including Seller's
consultation or participation with Purchaser in respect of same) shall be
reimbursed to Seller by Purchaser within ten (10) days following written demand
by Seller.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as a sealed instrument as of the date first above written.
SELLER:
MARRIOTT INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Its (Vice) President
PURCHASER:
CNL HOSPITALITY PARTNERS, LP
By: CNL HOSPITALITY GP CORP.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Its (Vice) President
The undersigned, CNL Hospitality Properties, Inc., joins herein for the
purpose of evidencing its agreement to enter into and deliver the Guaranty of
Landlord's Obligations pursuant to the terms of the foregoing Agreement.
CNL HOSPITALITY PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
The undersigned, First American Title Insurance Company, joins herein
for the purpose of evidencing its agreement to enter into and deliver the Escrow
Agreement, attached hereto at Schedule P.
FIRST AMERICAN TITLE INSURANCE COMPANY
By: /s/ Xxxxx Xxxxxxxx
------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President, National Accounts
