PURCHASE AND SALE AGREEMENT (Courtyard Kaua’i at Coconut Beach)
Exhibit 10.10
EXECUTION COPY
(Courtyard Kaua’i at Coconut Beach)
THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as of June 19, 2017 (the “Effective Date”), by and between (i) KAUAI COCONUT BEACH, LLC, a Delaware limited liability company (“Owner”), and KAUAI COCONUT BEACH OPERATOR, LLC, a Delaware limited liability company (“Lessee” and collectively with Owner, “Seller”), and (ii) KHS, LLC, a Delaware limited liability company (“Purchaser”). Seller and Purchaser are sometimes referred to herein individually as a “Party,” and collectively as the “Parties.”
WHEREAS, Owner is the owner of the hotel commonly known as Courtyard Kaua’i at Coconut Beach located at 000 Xxxxx Xxxx, Xxxxx, Xxxxxx (the “Hotel”), as more specifically described in this Agreement;
WHEREAS, Owner leases the Hotel to Lessee, pursuant to that certain Lease Agreement dated as of May 8, 2017 (as amended or replaced from time to time, the “Lease Agreement”); and
WHEREAS, Seller desires to sell substantially all of assets and property (as described herein) of Seller to Purchaser, and Purchaser desires to purchase such assets and property from Seller, on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound hereby agree as follows:
ARTICLE I
1.1 Definitions. In addition to the terms defined above in the introduction and recitals to this Agreement, the following terms when used in this Agreement shall have the meanings set forth in this Section 1.1:
“Accounts Receivable” means all amounts that Lessee is entitled to receive from the Business which are not paid as of the Closing, including charges for the use or occupancy of any guest, conference or banquet rooms or other facilities at the Hotel, any restaurant, bar or banquet services, or any other goods or services provided by or on behalf of Seller at the Hotel.
“Affiliate” means, with respect to the Person in question, any other Person that, directly or indirectly, (i) owns or controls fifty percent (50%) or more of the outstanding voting and/or equity interests of such Person, or (ii) controls, is controlled by or is under common control with, the Person in question. For the purposes of this definition, the term “control” and its derivations means having the power, directly or indirectly, to direct the management, policies or general conduct of business of the Person in question, whether by the ownership of voting securities, contract or otherwise.
“Anti-Terrorism Laws” means Executive Order 13224 issued by the President of the United States, the USA PATRIOT Act, and all other Applicable Law addressing or in any way relating to terrorist acts and acts of war.
“Applicable Law” means (i) all statutes, laws, common law, rules, regulations, ordinances, codes or other legal requirements of any Governmental Authority, stock exchange, board of fire underwriters and similar quasi-governmental authority, and (ii) any judgment, injunction, order or other similar requirement of any court or other adjudicatory authority, in effect at the time in question and in each case to the extent the Person or property in question is subject to the same.
“Assumed Contracts” means the Equipment Leases, Loan Documents, IRC Agreement, Operating Agreements, Tenant Leases, Bookings, and all other Contracts that are assumed by Purchaser at Closing pursuant to this Agreement.
“Assumed Liabilities” means the liabilities and obligations existing following the Closing Date under (i) the Loan Documents assumed pursuant to the Loan Assumption Documents, (ii) the other Assumed Contracts, but excluding any liabilities related to any breach or default under the Assumed Contracts which occurred prior to the Closing Date, and (iii) any Liability for which Purchaser receives a credit pursuant to Section 10.2 (but only to the extent of such credit).
“Bookings” has the meaning set forth in Section 2.1.16.
“Books and Records” has the meaning set forth in Section 2.1.12.
“Business” means the lodging business and all activities related thereto conducted at the Hotel, including (i) the rental of any guest, conference or banquet rooms or other facilities at the Hotel, (ii) the operation of any restaurant, bar or banquet services, together with all other goods and services provided at the Hotel, (iii) the rental of any commercial or retail space to tenants at the Hotel, (iv) the maintenance and repair of the Real Property and tangible Personal Property, (v) the employment of the Employees, and (vi) the payment of Taxes.
“Business Day” means any day other than a Saturday, Sunday or federal legal holiday. “Cap” has the meaning set forth in Section 14.4.3.
“Casualty” has the meaning set forth in Section 13.1.
“Closing” has the meaning set forth in Section 9.1.
“Closing Date” has the meaning set forth in Section 9.1.
“Closing Date Loan Balance” has the meaning set forth in Section 7.9.1.
“Closing Date Payment” has the meaning set forth in Section 3.3.1.
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“Closing Date Reserve Balance” has the meaning set forth in Section 7.9.1.
“Closing Statement” has the meaning set forth in Section 10.1.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any regulations, rulings and guidance issued by the Internal Revenue Service.
“Competing Transaction” has the meaning set forth in Section 7.10.
“Condemnation” has the meaning set forth in Section 13.2.
“Confidential Information” has the meaning set forth in Section 7.1.1.
“Contemplated Transactions” means all of the transactions contemplated by this Agreement, including (i) the sale by Seller of the Property to Purchaser hereunder, (ii) the execution of this Agreement and the other Transaction Documents, and (iii) the performance by Seller and Purchaser of the covenants and obligations under this Agreement and the other Transaction Documents.
“Contracts” means, collectively, the Equipment Leases, the Operating Agreements and any other contract, agreement, deed, warranty, power of attorney, lease, license, instrument, or other agreement or binding commitment, whether or not in written form, relating to the Property, excluding the Tenant Leases and the Lease Agreement.
“Cut-Off Time” has the meaning set forth in Section 10.2.
“Debt Payoff Amount” means the amount of outstanding principal and accrued but unpaid interest, fees and other amounts payable (including any prepayment penalties, if any) as of the close of business on the Closing Date of all Indebtedness of Seller, and any other Indebtedness secured with an Encumbrance, other than a Permitted Exception on the Property, in each case, other than the Indebtedness assumed by Purchaser under the Loan Assumption Documents.
“Deed” has the meaning set forth in Section 9.3.1(b).
“Deposit Escrow Agent” means Fidelity National Title & Escrow of Hawaii, Inc. located at City Financial Tower, 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxx 00000.
“Deposit Escrow Agent Party” has the meaning set forth in Section 14.6.
“Due Diligence Period” has the meaning set forth in Section 4.1.1.
“Xxxxxxx Money” has the meaning set forth in Section 3.2.1.
“Employees” means, at the time in question, all persons employed full time or part time at the Hotel by Seller, Manager or their respective Affiliates.
“Encumbrance” means any lien, charge, claim, security interest, mortgage, pledge or other encumbrance of any nature whatsoever.
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“Environmental Laws” means any United States federal, state, local or municipal law, environmental permit, approval, common law and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent or judgment, relating to the environment, public health, occupational health and safety, or to any Hazardous Substance, including, without limitation, (a) the presence, use, production, generation, handling, transportation, treatment, storage, disposal, release, control or cleanup of any Hazardous Substance, or (b) to any chemical, material or substance, human exposure to which is regulated by any Governmental Authority.
“Equipment Leases” has the meaning set forth in Section 2.1.9.
“Exchange” has the meaning set forth in Section 16.16.
“Excluded Liabilities” means all Liabilities of Seller which are not Assumed Liabilities.
“Excluded Property” has the meaning set forth in Section 2.2.
“Existing Survey” means that certain ALTA/ACSM Survey prepared by Xxxxxx X. Xxxxxxxx, Inc. last revised on May 4, 2017.
“F&B” has the meaning set forth in Section 2.1.6.
“FF&E” has the meaning set forth in Section 2.1.3.
“Final Accounting” has the meaning set forth in Section 10.4.1.
“Final Adjustment Certificate” has the meaning set forth in Section 10.4.1.
“Final Prorations” has the meaning set forth in Section 10.4.1.
“Franchise Agreement” means that certain Franchise Agreement dated as of October 21, 2010 between Franchisor and Lessee, as amended from time to time.
“Franchise Approval” has the meaning set forth in Section 7.8.1.
“Franchisor” means Marriott International, Inc. or its Affiliate.
“Fundamental Representations” has the meaning set forth in Section 8.2.1(b).
“GAAP” means generally accepted accounting principles, consistently applied.
“Gift Certificates” means, collectively, all gift certificates, gift cards and vouchers for use at the Property.
“Governmental Authority” means any federal, state or local government or other political subdivision thereof, including any Person exercising executive, legislative, judicial, regulatory or administrative governmental powers or functions, in each case to the extent the same has jurisdiction over the Person or property in question.
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“Group Contracts” means Contracts for group Bookings, weddings, banquets and other group events at the Hotel.
“Guest Ledger” means all charges accrued to the open accounts of any guests or customers at the Hotel as of the Cut-Off Time for the use or occupancy of any guest, conference or banquet rooms or other facilities at the Hotel, any restaurant, bar or banquet services, or any other goods or services provided by or on behalf of Seller at the Hotel, including without limitation any and all taxes and credit card fees.
“Hazardous Substances” means (i) any chemical, material or substance defined as, or included in the definition of, “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances or toxic pollutants,” “contaminants,” “toxic or hazardous chemicals” or “pesticides” in any applicable Environmental Law, or (ii) any petroleum or petroleum product, asbestos-containing materials, or lead-based paint, but excluding substances of kinds and in amounts ordinarily and customarily used or stored in such properties similar to the Property for purposes of cleaning or other maintenance or operations in compliance with Environmental Laws.
“Historical Financials” means the unaudited balance sheets and statements of income of Seller as of and for the fiscal years ended December 31, 2015 and December 31, 2016 (in each case, including the footnotes thereto, if any), and the unaudited balance sheet and statement of income of Seller for the four (4) month period ended April 30, 2017.
“Holdback Amount” means an amount equal to the Cap.
“Holdback Escrow Agent” means Fidelity National Title & Escrow of Hawaii, Inc. located at City Financial Tower, 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxx 00000.
“Holdback Escrow Agreement” has the meaning set forth in Section 9.3.1(e).
“Hotel” has the meaning set forth in the Recitals.
“Hotel Guest Data and Information” means all guest or customer profiles, contact information (e.g., addresses, phone numbers, facsimile numbers and email addresses), histories, preferences and any other guest or customer information in any database of Seller, Manager or their respective Affiliates, whether obtained or derived by Seller, Manager or their respective Affiliates from guests or customers of the Hotel or any facility associated with the Hotel.
“Improvements” has the meaning set forth in Section 2.1.2.
“Indebtedness” means (i) any liability, contingent or otherwise, of Seller (A) for borrowed money (whether or not the recourse of the lender is to Property or only to a portion thereof and including all obligations in respect of principal, accrued interest, penalties (including prepayment penalties), overdraft charges, fees, expenses and premiums), (B) evidenced by a bond, note, debenture or similar instrument or letter of credit (including a purchase money obligation or other obligation relating to the deferred purchase price of property), or (C) for reimbursement obligations under letters of credit, bank guarantees, surety bonds, performance bonds, and other similar contractual obligations entered into by or on behalf of Seller (but solely to the extent drawn and not paid); (ii) any monetary obligation secured by an Encumbrance to which any of the Property is subject; (iii) any lease of any property that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of Seller; (iv) obligations under interest rate, currency or commodity derivatives or hedging transactions (valued at the termination value thereof); and (v) any guarantees of any of the foregoing.
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“Indemnification Claim” has the meaning set forth in Section 14.5.1.
“Indemnification Deductible” has the meaning set forth in Section 14.4.3.
“Indemnification Loss” means, with respect to any Indemnitee, any actual (and not contingent) liability, damage, loss, cost or expense, including reasonable attorneys’ fees and expenses and court costs, incurred by such Indemnitee as a result of the act, omission or occurrence in question.
“Indemnitee” has the meaning set forth in Section 14.5.1.
“Indemnitor” has the meaning set forth in Section 14.5.1.
“Inspections” has the meaning set forth in Section 4.1.2.
“Intangible Personal Property” means all intangible personal property owned by Seller with respect to the Business, including, without limitation, goodwill, claims, approvals, warranties (expresses or implied), contract rights associated with the Assumed Contracts, know- how, trade secrets, customer lists, membership lists, proprietary information, confidential information, proprietary processes and formulae, databases and data collections; all source and object code, computer programs, software, algorithms, architecture, structure, display screens, photography, layouts, inventions, development tools; rights of publicity and privacy and rights to personal information; the content and information contained in any website, and all e-mail addresses and other internet addresses, domain names and other similar proprietary rights used in connection with the Business, all documentation, marketing materials and media constituting, describing or relating to the above, including, manuals, memoranda, records, pictures, photographs, digital images, video recordings, audiotapes, film and the like.
“Inventoried Baggage” has the meaning set forth in Section 11.2.
“Inventoried Safe Deposit Boxes” has the meaning set forth in Section 11.1.
“IRC Agreement” means that certain Interest Rate Cap Agreement dated as of May 8, 2017 between Seller and SMBC.
“IT Systems” has the meaning set forth in Section 2.1.5.
“Land” has the meaning set forth in Section 2.1.1.
“Lease Agreement” has the meaning set forth in the Recitals.
“Lender” has the meaning set forth in Section 7.9.1.
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“Lender’s Liens” means all mortgages, security interests, liens and encumbrances in favor of Lender pursuant to the Loan Documents.
“Lessee” has the meaning set forth in the Recitals.
“Liability” means any liability, obligation, damage, loss, diminution in value, cost or expense of any kind or nature whatsoever, whether accrued or unaccrued, actual or contingent, known or unknown, foreseen or unforeseen.
“Licenses and Permits” has the meaning set forth in Section 2.1.11.
“Liquor License” means the licenses and approvals required under Applicable Law for the sale of alcoholic beverages at the Hotel.
“Liquor License Holder” means DHC Food & Beverage Corporation, an Affiliate of Manager.
“Loan” has the meaning set forth in Section 7.9.1.
“Loan Assumption Costs” has the meaning set forth in Section 7.9.3.
“Loan Assumption Documents” has the meaning set forth in Section 7.9.1.
“Loan Cost Reimbursement Amount” has the meaning set forth in Section 7.9.3.
“Loan Documents” has the meaning set forth in Section 7.9.1.
“Management Agreement” means, collectively, that certain Management Agreement dated as of September 15, 2010 between Lessee and Manager, and that certain Amended and Restated Food & Beverage Management Agreement dated as of October 20, 2010 between Lessee and Liquor License Holder, each as amended from time to time.
“Manager” means Davidson Hotel Company, LLC.
“Material Casualty” has the meaning set forth in Section 13.1.1.
“Material Condemnation” has the meaning set forth in Section 13.2.1.
“Material Contract” has the meaning set forth in Section 6.1.13(b).
“Mutual Closing Conditions” has the meaning set forth in Section 8.1.1.
“New Exception” has the meaning set forth in Section 5.3.3(a).
“Notice” has the meaning set forth in Section 16.1.1.
“Operating Agreements” has the meaning set forth in Section 2.1.10.
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“Ordinary Course of Business” means the ordinary course of business consistent with Seller’s past custom and practice for the Business.
“Paid Time Off Credit” has the meaning set forth in Section 7.4.5.
“Parking License” means that certain License Agreement dated November 6, 2015 by and between Coconut Plantation Beach Investor, LLC and Lessee.
“Payoff Letters” means letters, in form and substance reasonably satisfactory to Purchaser, setting forth the amounts and actions required to satisfy all Indebtedness of Seller (other than the Indebtedness assumed by Purchaser under the Loan Assumption Documents) and any broker’s fees related to the Contemplated Transactions (to the extent Seller is responsible therefor, if any), and in each case, to obtain a release therefrom.
“Permitted Exceptions” has the meaning set forth in Section 5.3.2.
“Person” means any natural person, corporation, general or limited partnership, limited liability company, association, joint venture, trust, estate, Governmental Authority or other legal entity, in each case whether in its own or a representative capacity.
“Personal Property” means the Property other than the Real Property.
“Phase I Report” means the Phase I Environmental Site Assessment of the Courtyard Marriott Kauai at Coconut Beach dated May 8, 2017 prepared by EMG.
“Plans and Specifications” has the meaning set forth in Section 2.1.13.
“Prepaid Amounts” means all prepaid expenses, reserves and deposits, associated with the Assumed Contracts or held by or for the benefit of or granted to Seller, including all event, security and escrow deposits.
“Property” has the meaning set forth in Section 2.1.
“Prorations” has the meaning set forth in Section 10.2.
“Purchase Price” has the meaning set forth in Section 3.1.
“Purchaser Closing Conditions” has the meaning set forth in Section 8.2.
“Purchaser Closing Deliveries” has the meaning set forth in Section 9.3.2.
“Purchaser Default” has the meaning set forth in Section 12.1.
“Purchaser Documents” has the meaning set forth in Section 6.2.2.
“Purchaser Due Diligence Reports” means all studies, reports and assessments prepared by any Person for or on behalf of Purchaser (other than any internal studies, reports and assessments prepared by any of Purchaser’s employees, attorneys or accountants) in connection with the Inspections.
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“Purchaser Indemnitees” means Purchaser and its Affiliates, and each of their respective shareholders, members, partners, trustees, beneficiaries, directors, officers and employees, and the successors, permitted assigns, legal representatives, heirs and devisees of each of the foregoing.
“Purchaser’s Inspectors” has the meaning set forth in Section 4.1.2.
“Purchaser’s New Objections” has the meaning set forth in Section 5.3.3(a).
“Replacement Franchise Documents” means (i) an interim Franchise Agreement between Purchaser, as owner of the Hotel, Franchisor, as licensor, to become effective concurrently with Closing, pursuant to which Franchisor will license the “Courtyard by Marriott” name to Purchaser (or its designated Affiliate) for use at the Hotel after the Closing, (ii) any guaranties required in connection with such Franchise Agreement, and (iii) a term sheet between Purchaser, as owner of the Hotel, and Franchisor, as licensor, to become effective subject to the implementation of a property improvement plan set forth therein, pursuant to which Franchisor will license the “Sheraton” name to Purchaser (or its designated Affiliate) for use at the Hotel, in each case on terms reasonably acceptable to Purchaser.
“QI” has the meaning set forth in Section 16.16.
“Real Property” has the meaning set forth in Section 2.1.2.
“Remove” has the meaning set forth in Section 5.3.3(c).
“Reserves” has the meaning set forth in Section 7.9.1.
“Retail Merchandise” has the meaning set forth in Section 2.1.7.
“Seller Closing Conditions” has the meaning set forth in Section 8.3.1.
“Seller Closing Deliveries” has the meaning set forth in Section 9.3.1.
“Seller Default” has the meaning set forth in Section 12.1.
“Seller Documents” has the meaning set forth in Section 6.1.2.
“Seller Due Diligence Materials” has the meaning set forth in Section 4.1.3(a).
“Seller Indemnitees” means Seller, Manager, Liquor License Holder and their respective Affiliates, and each of their respective shareholders, members, partners, trustees, beneficiaries, directors, officers and employees, and the successors, assigns, legal representatives, heirs and devisees of each of the foregoing.
“Seller’s Knowledge” (and any similar phrases as they relate to Seller) means the current actual knowledge of Xxxx Xxxx and Xxxx Xxxxx.
“Seller’s Response” has the meaning set forth in Section 5.3.3(b).
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“SMBC” means SMBC Capital Markets, Inc.
“Supplies” has the meaning set forth in Section 2.1.4.
“Survival Period” has the meaning set forth in Section 6.3.
“Taxes” means any federal, state, local or foreign, real property, personal property, sales, use, gross receipts taxes (including, without limitation, general excise taxes), room, occupancy, ad valorem or similar taxes, assessments, levies, charges or fees imposed by any Governmental Authority on Seller with respect to the Property or the Business, including any interest, penalty or fine with respect thereto, but excluding any federal, state, local or foreign income, capital gain, gross receipts, capital stock, franchise, profits, estate, gift or generation skipping tax, transfer, documentary stamp, recording or similar tax, levy, charge or fee, in each case, incurred with respect to the transaction described in this Agreement.
“Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
“Tenant Leases” has the meaning set forth in Section 2.1.8.
“Third-Party Claim” means, (i) with respect to any Seller Indemnitee, any claim, demand, lawsuit, arbitration or other legal or administrative action or proceeding against such Seller Indemnitee by any Person which is not Purchaser or an Affiliate of Purchaser, and (ii) with respect to any Purchaser Indemnitee, any claim, demand, lawsuit, arbitration or other legal or administrative action or proceeding against such Purchaser Indemnitee by any Person which is not Seller or an Affiliate of Seller.
“Title Commitment” has the meaning set forth in Section 5.1.
“Title Company” means Chicago Title Insurance Company located at 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000.
“Title Policy” has the meaning set forth in Section 5.4.
“Trademarks” has the meaning set forth in Section 2.1.14.
“Trade Payables” has the meaning set forth in Section 10.2.9.
“Transaction Documents” means, collectively, this Agreement, the Seller Closing Deliveries and the Purchaser Closing Deliveries.
“Unpermitted Exceptions” has the meaning set forth in Section 5.3.2.
“Updated Survey” means an updated Existing Survey (or a new survey of the Real Property) ordered and paid for solely by Purchaser and completed and obtained by Purchaser during the Due Diligence Period.
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“WARN Act” means the Worker’s Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et seq., as well as the rules and regulations thereto, set forth in 00 XXX 000, et seq., and any similar state and local laws, as amended from time to time, and any regulations, rules and guidance issued pursuant thereto.
“Warranties” has the meaning set forth in Section 2.1.15.
ARTICLE II
2.1 Description of the Property. Subject to the terms set forth in this Agreement, at the Closing, Seller shall sell, convey, transfer, assign and deliver to Purchaser, and Purchaser shall purchase and accept from Seller, free and clear of all Encumbrances, other than Permitted Exceptions, all property and assets of Seller, including, without limitation, the property and assets set forth in this Section 2.1, but expressly excluding the Excluded Property (collectively, the “Property”):
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2.1.17. Cash on Hand. All cash on hand or on deposit in any house bank;
2.1.18. Prepaid Amounts. Any Prepaid Amounts not otherwise included above;
2.1.20. Accounts Receivable. The Accounts Receivable and Guest Ledger; and
2.2 Excluded Property. Notwithstanding anything to the contrary in Section 2.1, the property, assets, rights and interests set forth in this Section 2.2 (the “Excluded Property”) shall not be transferred, assigned or conveyed to Purchaser, and shall be excluded from the Property:
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2.2.6. Liquor License. To the extent not transferrable, the Liquor License; and
2.3 Assumed Liabilities. At the Closing, Purchaser will assume and agree to pay or perform, as the case may be, the Assumed Liabilities.
2.4 Excluded Liabilities. Notwithstanding anything to the contrary, Purchaser shall assume no Liabilities of Seller of any nature other than the Assumed Liabilities. Seller shall retain all Liabilities of Seller other than the Assumed Liabilities.
2.5 Non-Assignment of Certain Assigned Agreements. To the extent that Seller’s rights under any Assumed Contract may not be assigned to Purchaser without the consent of another Person that has not been obtained, this Agreement shall not constitute an agreement to assign the same if an attempted assignment would constitute a breach thereof or be unlawful. If any such consent shall not be obtained or if any attempted assignment would be ineffective or would impair Purchaser’s rights under the Assumed Contract in question so that Purchaser would not in effect acquire the benefit of all such rights, Seller, to the extent permitted by law and the Assumed Contract, shall act (for up to thirty (30) days after the Closing and at no cost or liability to Seller) as Purchaser’s agent in order to obtain for it the benefits thereunder.
ARTICLE III
3.1 Purchase Price. The purchase price for the Property is $62,000,000 (the “Purchase Price”), which shall be adjusted at Closing for the Prorations pursuant to Section 10.2, the Guest Ledger pursuant to Section 10.3, and as otherwise expressly provided in this Agreement, and shall be paid in accordance with Section 9.3.2(a).
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3.3 Payment of Purchase Price.
3.3.1. Payment at Closing. At Closing:
(a) Purchaser shall pay to Seller an amount equal to the Purchase Price (as adjusted pursuant to Section 3.1), plus the Loan Cost Reimbursement Amount, plus the Closing Date Reserve Balance, less the Closing Date Loan Balance, less the Holdback Amount paid to the Holdback Escrow Agent, less any Debt Payoff Amount, less the Xxxxxxx Money disbursed to Seller (the “Closing Date Payment”);
(b) Purchaser shall pay the Holdback Amount to the Holdback Escrow Agent solely for purposes of securing Seller’s obligations under Article X and Article XIV, to be held during the Survival Period in accordance with the terms of the Holdback Escrow Agreement; and
(c) Purchaser shall pay any Debt Payoff Amount in cash by wire transfer of immediately available funds to the appropriate lenders in accordance with the Payoff Letters.
3.4 Allocation of Purchase Price. The Parties shall use reasonable efforts to agree, prior to Closing, upon an allocation of the Purchase Price among the Land, the Improvements and the Personal Property for federal, state and local tax purposes. If the Parties cannot agree upon such allocation of the Purchase Price, (a) each Party shall file federal, state and local tax returns based on each Party’s own determination of the proper allocation of the Purchase Price, each bearing its own consequences with respect to any discrepancies, and (b) Seller’s proposed allocation to Real Property shall be used for purposes of determining any transfer tax payable at Closing.
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ARTICLE IV
4.1.1. Due Diligence Contingency. Purchaser shall have a period from May 2, 2017 until 5:00 p.m. (Hawaii Time) on June 19, 2017 (the “Due Diligence Period”) to perform its due diligence review of the Property and all matters related thereto which Purchaser deems advisable, including any engineering, environmental, title, survey, financial, operational and legal compliance matters relating to the Property. At any time during the Due Diligence Period, Purchaser may, in its sole discretion, elect to terminate this Agreement by providing written notice thereof to Seller and Deposit Escrow Agent (a “Termination Notice”), in which event the Xxxxxxx Money shall be refunded to Purchaser in accordance with Section 3.2.4 and Purchaser and Seller shall have no further obligation to or recourse against each other except for those expressly stated to survive the termination of this Agreement. If, at the end of the Due Diligence Period, Seller has not received a Termination Notice (with a copy to Deposit Escrow Agent), then Purchaser shall have no further right to terminate this Agreement except as expressly provided otherwise elsewhere in this Agreement.
4.1.3. Seller’s Due Diligence Materials.
(a) To the extent in Seller’s possession, Seller shall provide to Purchaser promptly upon request by Purchaser, or make available to Purchaser at the Hotel for review and copying by Purchaser, due diligence materials relating to the Property that are reasonably requested by Purchaser. All documents and materials provided by Seller to Purchaser pursuant to this Agreement, together with any copies or reproductions of such documents or materials, are referred to collectively herein as the “Seller Due Diligence Materials.” This provision shall survive the Closing.
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(b) If this Agreement is terminated, Purchaser shall, upon written request from Seller, (i) return all original Seller Due Diligence Materials provided to Purchaser by or on behalf of Seller, and destroy all other Seller Due Diligence Materials, and (ii) cause all Persons to whom Purchaser has provided any Seller Due Diligence Materials to return any original Seller Due Diligence Materials to Purchaser, and destroy all other Seller Due Diligence Materials.
ARTICLE V
5.1 Title Commitment. Purchaser has received a current title insurance commitment dated June 8, 2017 from the Title Company for an ALTA owner’s title insurance policy covering the Real Property, together with copies of all documents referenced therein (the “Title Commitment”).
5.2 Survey. Purchaser has received Seller’s existing ALTA survey for the Property (the “Existing Survey”). Purchaser shall have the right during the Due Diligence Period to obtain an updated survey (the “Updated Survey”). Any Updated Survey obtained by Purchaser shall be prepared by a duly licensed surveyor, in accordance with the ALTA/ACSM Minimum Standard Detail Requirements for Land Title Surveys, certified to Seller, Purchaser and the Title Company, and shall otherwise be in accordance with such standards as are required by the Title Company in order to issue the Title Policy. In the event Purchaser does not obtain an Updated Survey prior to the expiration of the Due Diligence Period and the Title Company determines that the Existing Survey is insufficient to permit the Title Company to remove or insure over any survey exception in the Title Commitment, then Seller shall have no obligation to cause the Title Company to remove or insure over any such survey exception, and such exception shall constitute a Permitted Exception.
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5.3.3. New Exceptions to Title.
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5.4 Title Policy. At Closing, Seller shall cause the Title Company to issue an owner’s title insurance policy to Purchaser (which may be in the form of a xxxx-up of the Title Commitment or pro forma owner’s title insurance policy) in accordance with the Title Commitment, insuring Purchaser’s title to the Real Property as of the Closing Date, subject only to the Permitted Exceptions (the “Title Policy”).
5.5 Conveyance of the Property. At Closing, Seller shall convey the Real Property subject to all (i) Permitted Exceptions, and (ii) all Unpermitted Exceptions that are cured by causing the Title Company to remove or insure over such Unpermitted Exceptions in the Title Policy as herein provided, but which otherwise are not removed from title.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Seller’s Representations and Warranties. To induce Purchaser to enter into this Agreement and to consummate the transaction described in this Agreement, Seller hereby makes the representations and warranties in this Section 6.1, upon which Seller acknowledges and agrees that Purchaser is entitled to rely:
6.1.1. Organization and Power. Seller is duly formed, validly existing, in good standing in the State of Delaware, and is qualified to do business in the State of Hawaii, and has all requisite power and authority to own the Property and conduct the Business as currently owned and conducted.
6.1.4. Condemnation; Real Property.
(a) Seller has not received any written notice of any threatened or pending condemnation proceeding or other proceeding in eminent domain.
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(b) The Real Property constitutes all of the real property that (i) Seller leases, owns or occupies with respect to the Business, (ii) Seller uses in connection with the Business or (iii) is necessary to operate the Business as it is currently operated.
(c) To Seller’s Knowledge, all construction with respect to the Improvements used in the operation of the Business has been completed and all expenses related thereto have been paid in full.
(d) Seller has not received written notice of any dispute from any contiguous property owners concerning contiguous boundary lines, or any claims of others to rights over, under, across or through any of the Real Property by virtue of use or prescription.
(e) Seller has not received any written notice of any claim, nor to Seller's Knowledge, has any such claim been threatened, relating to the Land from any Person, including any Native Hawaiian cultural practitioner or other Native Hawaiian resident, asserting any Native Hawaiians claims of ownership or other rights based upon the cultural history or ancestral land ownership of the Property. Seller has not received any written notice of any claim, nor to Seller's Knowledge, has any such claim been threatened, that there are any burial sites or other archeological findings that are culturally significant to Native Hawaiians on the Land.
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(a) Except as set forth on Schedule 6.1.13, Seller is not a party to, and neither the Property, nor the Business, is bound by, any Contracts which:
(A) involve expenditures, investments, consideration, loans or other commitments with a value of more than $25,000, individually, or $100,000, in the aggregate, over its term, which are not otherwise terminable by Seller or Manager on no more than thirty (30) days’ notice without penalty or fee;
(B) evidence, impose or provide for any Encumbrance on the Property or which relate to any Indebtedness, whether incurred, assumed, guaranteed, or secured, or which restrict the incurrence of Indebtedness or any Encumbrance, other than Permitted Exceptions;
(C) guarantee or secure the performance, Liabilities or obligations of any other Person;
(D) limit or restrict, or purport to limit or restrict, the ability, right or freedom of to enter into or engage in any market or type or line of business, solicit or hire any Person, solicit customers or to conduct its business in any geographical area;
(E) provide for, establish or grant “most favored” nation or similar preferential pricing provisions (other than Bookings made in the Ordinary Course of Business), a right of first refusal or right of first offer for any line of business, equity interests or material portion of assets or properties terms or an exclusive sale or purchase obligation with respect to any obligation or geographical area;
(F) involve any Affiliate of Seller;
(G) evidence, involve or relate to capital expenditures or relating to the development or construction of, or additions or expansions to, the Property;
(H) evidence, involve or relate to (i) the sale or exchange of, or option to sell or exchange, the Property or any right of first offer or right of first refusal related thereto, (ii) the acquisition, purchase or exchange of, or option to acquire, purchase or exchange, any real estate, or any term sheets or letters of intent in effect and not expired as of the date hereof, whether or not binding, relating to any of the foregoing;
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(I) evidence or relate to the resolution, settlement or compromise of any action or litigation (i) requiring non-monetary relief or (ii) in excess of $50,000; or
(J) provide for management, franchise or brand licensing services with respect to the Property.
(b) Each of the Contracts set forth or required to be set forth on Schedule 6.1.13, together with each of the Tenant Leases, is referred to herein as a “Material Contract” and collectively, the “Material Contracts.”
(c) To Seller’s Knowledge, neither Seller nor any other Person is in violation, breach or default under any Material Contract and each Material Contract is valid, binding, in full force and effect and enforceable with respect to Seller, except as such may be limited by bankruptcy, insolvency, reorganization or other similar Laws affecting creditors’ rights generally, and by general equitable principles or agreements. Seller has not received written notice from any counterparty thereto that any Material Contract is not enforceable.
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6.1.21. Tax Matters. Seller has paid or caused to be paid all applicable sales and use taxes due with respect to the Property and the Business, and neither the Property nor the Business has been the subject of a sales tax audit or gross receipts tax audit (including, without limitation, Hawaii general excise tax) within the last three (3) years, nor to Seller’s Knowledge has the Property or the Business has been the subject of a sales tax audit or gross receipts tax audit (including, without limitation, Hawaii general excise tax) prior to the last three (3) year period during the period Seller has owned the Property. Seller has duly and timely filed (or filed extensions therefor) all Tax Returns required to be filed by Seller on or before the Closing Date with respect to all applicable Taxes, and, to Seller’s Knowledge, no penalties or other charges are or will become due with respect to any of the Tax Returns as the result of the late filing thereof. There is no material dispute or claim concerning any Tax liability of Seller either (a) claimed or raised by any Governmental Authority in writing or (b) as to which Seller has Knowledge.
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6.2 Purchaser’s Representations and Warranties. To induce Seller to enter into this Agreement and to consummate the transaction described in this Agreement, Purchaser hereby makes the representations and warranties in this Section 6.2, upon which Purchaser acknowledges and agrees that Seller is entitled to rely:
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6.3 Survival. The representations and warranties in Section 6.1 and Section 6.2 shall survive for nine (9) months after the Closing (the “Survival Period”).
ARTICLE VII
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(a) conduct the Business in the Ordinary Course of Business;
(b) keep in full force and effect insurance comparable in amount and scope of coverage to insurance now carried with respect to the Business and the Property;
(c) not take any action or omit to take any action for the purpose of directly or indirectly preventing, materially delaying or materially impeding the consummation of Contemplated Transactions;
(d) not acquire or agree to acquire any material assets, in each case, except in the Ordinary Course of Business;
(e) not transfer, sell, lease or otherwise dispose of or agree to transfer, sell, lease or dispose of or remove or cause or permit to be removed any part or portion of the Property (including any FF&E) unless such removed property is being removed in the Ordinary Course of Business and is replaced prior to the Closing Date with similar items of at least equal suitability, quality and value; and
(f) not authorize or enter into any written commitment with respect to any of the matters described above.
7.2.3. This Section 7.2 shall survive the Closing for the Survival Period.
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7.4.1. If the WARN Act is applicable, Purchaser, or Purchaser’s manager, or their Affiliates, shall offer employment, or continue to employ a sufficient number of the Employees on such terms and conditions so that Manager is not required to provide notice of a “plant closing” or “mass layoff” to any Person under the WARN Act as a result of the termination of employment of the Employees as of the Closing. If the WARN Act is applicable, on or following the Closing, Purchaser shall comply with all provisions of the WARN Act with respect to all Employees, including without limitation, employing a sufficient number of Employees during the ninety (90) day period following the Closing so as to not trigger the applicability of the WARN Act. If Purchaser fails to comply with the provisions of this Section 7.4.1, then in addition to any remedies Seller may have, Purchaser alone shall be responsible for giving such notices as may be required by the WARN Act and shall be solely liable for the payment of any amounts that may become due under the WARN Act. If the WARN Act is applicable, as part of its obligations under this Section 7.4.1, Purchaser shall indemnify, defend and hold Seller and Manager harmless from and against any liability, loss, damage, fines, penalty, back pay, back benefits, costs or expenses (including, without limitation, attorneys’ fees and expenses) that may result to Seller or Manager based on Purchaser’s failure to comply with this Section 7.4.1. This Section 7.4 shall survive the Closing.
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7.4.2. Seller shall cooperate, and authorize Manager to cooperate, with Purchaser to provide information to Purchaser regarding Employees’ names, positions, dates of hire and current compensation, as reasonably requested by Purchaser and to the extent permitted by Applicable Law, and allow Purchaser, or its designee, the opportunity to interview the Employees in accordance with this Agreement.
7.4.3. Seller and Purchaser shall cooperate in good faith to prepare and disseminate to the Employees mutually-agreeable communications regarding the Contemplated Transactions in an effort to minimize business disruption prior to the Closing Date.
7.4.4. No provision of this Section 7.4 shall create any third party beneficiary or other rights in any Employee or former employee (including any beneficiary or dependent thereof) of Seller or Manager in respect of continued employment (or resumed employment) with Purchaser, or any of its Affiliates, and no provision of this Section 7.4 shall create any such rights in any such persons in respect of any benefit that may be provided, directly or indirectly, under any employee plan of Seller or any Purchaser employee plan.
7.4.5. In accordance with the term of the Management Agreement, Seller shall be responsible for all compensation, fringe benefits, vacations and vacation payments, and other amounts owed to Employees, and taxes thereon, through the Cut-Off Time, except that, at Closing, Purchaser shall receive a credit (the “Paid Time Off Credit”) in the amount of accrued and unpaid bonuses, vacation time, personal time and sick time, and taxes thereon, as of the Cut- Off Time for the Employees. Purchaser shall be responsible for the wages, salaries and benefits and taxes thereon for the Employees retained by Purchaser or its manager following Closing and for accrued and unpaid vacation time, personal time and sick time and taxes thereon that are the subject of the Paid Time Off Credit.
7.4.6. This Section 7.4 shall survive the Closing.
7.5 Bookings. Purchaser shall honor all Bookings made in the Ordinary Course of Business prior to the Closing Date for any period on or after the Closing Date. This Section 7.5 shall survive the Closing.
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7.7 Notices and Filings. Seller and Purchaser shall use commercially reasonable efforts to cooperate with each other (at no cost or expense to the Party whose cooperation is requested, other than any de minimis cost or expense or any cost or expense which the requesting Party agrees in writing to reimburse) to provide written notice to any Person under any Contracts, Tenant Leases, Licenses and Permits, and to effect any registrations or filings with any Governmental Authority or other Person, regarding the change in ownership of the Property or the Business. This Section 7.7 shall survive the Closing.
7.8 Franchise Approval/Replacement Franchise Documents.
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7.10 Exclusivity. From May 2, 2017 to the Closing or earlier termination of this Agreement, Seller shall not directly or indirectly (including through any officer, director, employee, stockholder, agent, partner, affiliate or otherwise) (i) enter into any agreement, agreement in principle or other commitment (whether or not legally binding) relating to any business combination with, recapitalization of, or acquisition or purchase of all or a portion of the Property or its assets (a “Competing Transaction”); (ii) solicit, initiate or encourage the submission of any proposal or offer from any Person (including any of its officers, directors, employees and agents) relating to any Competing Transaction, or (iii) participate in any discussions or negotiations regarding, furnish to any other Person any information with respect to, or otherwise cooperate with, assist, participate in, facilitate or encourage, any effort or attempt by any Person to effect a Competing Transaction. Seller shall immediately terminate all pending discussions regarding a Competing Transaction and shall notify Purchaser promptly if any proposal regarding a Competing Transaction (or any inquiry or contact with any Person with respect thereto) is made.
7.11 Estoppels. Seller shall use commercially reasonable efforts to obtain estoppels, in a form reasonably acceptable to Purchaser, with respect to the two declarations set forth on Schedule 7.11 hereto.
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7.12 Further Assurances. From the Effective Date until the Closing or earlier termination of this Agreement, Seller and Purchaser shall use commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate the transaction described in this Agreement, including (i) obtaining all necessary consents, approvals and authorizations required to be obtained from any Governmental Authority or other Person under this Agreement or Applicable Law, and (ii) effecting all registrations and filings required under this Agreement or Applicable Law. After the Closing, Seller and Purchaser shall use commercially reasonable efforts (at no cost or expense to such Party, other than any de minimis cost or expense or any cost or expense which the requesting Party agrees in writing to reimburse) to further effect the transaction contemplated in this Agreement. The immediately preceding sentence of this Section 7.12 shall survive the Closing.
7.13 Tax Forms. Seller shall use commercially reasonable efforts to submit promptly following the Effective Date the following completed forms to the State of Hawaii Department of Taxation: (i) Report of Bulk Sale or Transfer [xxxx://xxxxx.xxxxxx.xxx/xxx/xxxxx/0000/x0x.xxx], and (ii) Tax Clearance Application [xxxx://xxxxx.xxxxxx.xxx/xxx/xxxxx/0000/x0.xxx] (collectively, the “Tax Forms”). In the event that certifications requested pursuant to the Tax Forms from the Hawaii Department of Taxation reflecting that all Taxes have been paid and that Seller is compliant (collectively, the “Tax Clearance Certificates”) have not been received prior to the Closing Date, Seller agrees to cooperate with Purchaser in obtaining the Tax Clearance Certificates and to reimburse Purchaser for any Taxes, costs and fees associated with obtaining the Tax Clearance Certificates. In addition, Seller and Purchaser shall use commercially reasonable efforts to submit promptly at the Closing (x) a Notice of Mortgage, Pledge or Purchase, [xxxx://xxxxx.xxxxxx.xxx/xxx/xxxxx/0000/x00.xxx], and (y) the Conveyance Tax Certificate and pay their applicable portion of the Taxes due thereunder as provided for in this Agreement.
ARTICLE VIII
8.1 Mutual Closing Conditions.
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8.2 Purchaser Closing Conditions.
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8.3 Seller Closing Conditions.
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ARTICLE IX
9.1 Closing Date. Subject to the satisfaction or waiver of the conditions set forth in Article VIII, the closing of the transaction described in this Agreement (the “Closing”) shall occur on June 30, 2017 (as such date may be postponed pursuant to Section 5.3.3, 8.1.2, 8.2.2, 8.3.2, 13.1.1, 13.2.1 or 16.16), or such other date as agreed to in writing by Purchaser and Seller (the date on which the Closing occurs is referred to herein as the “Closing Date”). The Closing shall be effected as provided in Section 9.2.
9.2 Closing Escrow. The Parties acknowledge (i) the Purchase Price to be paid by Purchaser pursuant to Section 3.3 shall be deposited with Deposit Escrow Agent, (ii) all of the documents required to be delivered by Seller and Purchaser at the Closing pursuant to this Agreement shall be deposited with Deposit Escrow Agent, and (iii) at Closing, the Purchase Price (as adjusted pursuant to Section 3.1) and the Xxxxxxx Money shall be disbursed to Seller and the documents deposited into the Closing Escrow shall be delivered to Seller and Purchaser (as the case may be).
9.3.1 (the “Seller Closing Deliveries”), as follows:
(a) A closing certificate in the form of Exhibit A;
(b) A warranty deed for the Real Property (the “Deed”) in the form of Exhibit B, conveying the Real Property to Purchaser, subject to the Permitted Exceptions;
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(c) A Xxxx of Sale for the Hotel in the form of Exhibit C, transferring the Personal Property assets including the FF&E, Supplies, IT Systems, F&B, Retail Merchandise, Books and Records, Plans and Specifications, Warranties, Bookings, and Trademarks to Purchaser on the terms set forth therein;
(d) An Assignment and Assumption of Leases, Contracts and Licenses and Permits for the Hotel in the form of Exhibit D, assigning the Assumed Contracts (other than the Loan Documents) on the terms set forth therein;
(e) A Holdback Escrow Agreement in the form of Exhibit F (the “Holdback Escrow Agreement”);
(f) A certificate or registration of title for any owned vehicle or other Personal Property included in the Property which requires such certification or registration, duly executed, conveying such vehicle or such other Personal Property to Purchaser;
(g) Such agreements, affidavits or other documents as may be reasonably required by the Title Company from Seller to issue the Title Policy, including, without limitation, an owner’s affidavit, a gap indemnity, and such copies of Seller’s organizational documents, authorizing resolutions and good standing certificates;
(h) Any real estate transfer tax declaration or similar documents required under Applicable Law in connection with the conveyance of the Real Property;
(i) A FIRPTA affidavit in the form set forth in the regulations under Section 1445 of the Code;
(j) To the extent not previously delivered to Purchaser, all originals (or copies if originals are not available) of the Tenant Leases, Contracts, Licenses and Permits, Books and Records, keys and lock combinations in Seller’s possession, which shall be located at the Hotel on the Closing Date and deemed to be delivered to Purchaser upon delivery of possession of the Hotel; provided, however, that Seller shall have the right to (i) redact and reformat any Books and Records which include data or other information pertaining to any other hotels owned, managed or franchised by Seller, Franchisor, Manager or their Affiliates, and (ii) subject to Section 7.1.1, retain copies of any Books and Records delivered to Purchaser;
(k) The Closing Statement prepared pursuant to Section 10.1;
(l) Evidence of the termination of the Management Agreement;
(m) Evidence of termination of the Lease Agreement;
(n) All Loan Assumption Documents which are required to be executed by Seller or its Affiliates, duly executed by such Persons;
(o) To the extent obtained, a tenant estoppel for the spa Tenant Lease, in substantially the form such tenant recently delivered to Lender (provided that Seller shall use commercially reasonable efforts to obtain such estoppel);
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(p) Payoff Letters and lien releases with respect to the payment of the Debt Payoff Amount, if any;
(q) A Settlement Statement duly executed by Seller and the Title Company; and
(r) Such other documents and instruments as may be reasonably requested by Purchaser or the Title Company in order to consummate the transaction described in this Agreement, including such documents and instruments reasonably required by Franchisor to enter into the Replacement Franchise Documents.
(a) The Closing Date Payment;
(b) A closing certificate in the form of Exhibit E;
(c) A counterpart of each of the documents and instruments to be delivered by Seller under Section 9.3.1 which require execution by Purchaser;
(d) All Loan Assumption Documents which are required to be executed by Purchaser or its Affiliates, duly executed by such Persons; and
(e) Such other documents and instruments as may be reasonably requested by Seller or the Title Company in order to consummate the transaction described in this Agreement.
9.4 Possession. Seller shall deliver possession of the Real Property, subject to the Permitted Exceptions, and tangible Personal Property to Purchaser upon completion of the Closing.
ARTICLE X
10.1 Closing Statement. No later than one day prior to Closing, the Parties, through their respective employees, agents or representatives, jointly shall make such examinations, audits and inventories of the Hotel as may be necessary to make the adjustments and prorations to the Purchase Price as set forth in Sections 10.2 and 10.3 or any other provisions of this Agreement. Based upon such examinations, audits and inventories, the Parties jointly shall prepare prior to Closing a closing statement with respect to the Hotel (the “Closing Statement”), which shall set forth their best estimate of the amounts of the items to be adjusted and prorated under this Agreement. The Closing Statement shall be approved and executed by the Parties at Closing, and such adjustments and prorations shall be final with respect to the items set forth in the Closing Statement, except to the extent any such items shall be re-prorated after the Closing as expressly set forth in Section 10.2.
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10.2 Prorations. The items of revenue and expense set forth in this Section 10.2 shall be prorated between the Parties (the “Prorations”) as of 11:59 p.m. on the day preceding the Closing Date (the “Cut-Off Time”), or such other time expressly provided in this Section 10.2, so that the Closing Date is a day of income and expense for Purchaser.
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10.3 Guest Ledger. At Closing, Seller shall receive a credit in an amount equal to: (i) all amounts charged to the Guest Ledger for all room nights up to (but not including) the night during which the Cut-Off Time occurs, and (ii) 50% of all amounts charged to the Guest Ledger for the room night which includes the Cut-Off Time (other than any restaurant or bar charges on the Guest Ledger which shall be prorated in accordance with Section 10.2.7), and Purchaser shall be entitled to retain all deposits made and amounts collected with respect to such Guest Ledger.
10.4.1. Within one hundred twenty (120) days following the Closing, Purchaser shall conduct a final accounting of all matters and items subject to proration pursuant to this Article X, which shall include a determination as to whether there were any errors or omissions on the Closing Statement (“Final Accounting”), and Purchaser shall deliver to Seller a certificate (the “Final Adjustment Certificate”) reflecting the final proration calculations (the “Final Prorations”). In addition to the standard prorations, Purchaser shall be entitled to include in any proration calculation any amounts of Seller’s transaction costs set forth in Section 10.5 not paid at Closing as an amount owed to Purchaser pursuant to such prorations.
10.4.2. Purchaser and Seller shall cooperate in good faith to reconcile all items included on the Final Accounting. The Final Accounting shall be binding and conclusive on all Parties hereto, unless within ten (10) Business Days after receipt by Seller of the Final Adjustment Certificate Seller notifies Purchaser in writing that it seeks an adjustment in the Final Accounting, and specifies in reasonable detail the items that it seeks to adjust and the reasons therefor (which may include items not reflected in the Final Adjustment Certificate, but which Seller believes should have been reflected therein). The Parties shall attempt to resolve such dispute; however, if Purchaser and Seller have not resolved the request for adjustment within fifteen (15) Business Days after delivery of the original notice by Seller to Purchaser, then the Parties shall submit such dispute to KPMG, LLC, certified public accountants. The determination of such accountants, which shall be made within thirty (30) days after submission, shall be conclusive, provided that such accountant shall only decide the specific items under dispute by the Parties and the decision for each disputed amount must be within the range of values assigned to each such item by Purchaser and Seller. The fees and expenses of such accountant shall be paid by Seller, on the one hand, and by Purchaser, on the other hand, based upon the percentage that the amount actually contested but not awarded to Seller or Purchaser, respectively, bears to the aggregate amount actually contested by Seller and Purchaser. Any retainer charged by such accountant will be advanced 50% by Seller, on the one hand, and 50% by Purchaser, on the other hand.
10.4.3. In the event it is determined pursuant to the Final Accounting, if any, that any amounts are due and owing by Seller to Purchaser, then Seller shall cause such amounts to be paid to Purchaser on or before thirty (30) days from the date the Final Accounting is completed. In the event it is determined pursuant to the Final Accounting that any amounts are due and owing by Purchaser to Seller, then Purchaser shall cause such amounts to be paid to Seller on or before thirty (30) days from the date the Final Accounting is completed.
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10.5.4. This Article X shall survive the Closing.
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ARTICLE XI
11.1 Safe Deposit Boxes. Prior to the Closing, Seller shall notify all guests or customers who are then using a safe deposit box at the Hotel advising them of the pending change in management of the Hotel and requesting them to conduct an inventory and verify the contents of such safe deposit box. All inventories by such guests or customers shall be conducted under the joint supervision of employees, agents or representatives of the Parties. Upon such inventory and verification, Seller shall deliver to Purchaser all keys, receipts and agreements for such safe deposit box (and thereafter such safe deposit box shall be deemed an “Inventoried Safe Deposit Box”). If this Agreement is terminated after such inventory, Purchaser shall return all keys, receipts and agreements to Seller for such Inventoried Safe Deposit Boxes immediately upon such termination. Upon Closing, Seller shall deliver to Purchaser all keys in Seller’s possession for all safe deposit boxes not then in use, and a list of all safe deposit boxes which are then in use, but not yet inventoried by the depositor, with the name and room number of such depositor. After the Closing, the Parties shall make appropriate arrangements for guests and customers at the Hotel to inventory and verify the contents of the non-Inventoried Safe Deposit Boxes, and upon such inventory and verification, Seller shall deliver to Purchaser all keys, receipt and agreements for such safe deposit box (and such safe deposit box thereafter shall constitute an Inventoried Safe Deposit Box). Purchaser shall be responsible for, and shall indemnify and hold harmless the Seller Indemnitees in accordance with Article XIV from and against any Indemnification Loss incurred by any Seller Indemnitees with respect to, any theft, loss or damage to the contents of any safe deposit box from and after the time such safe deposit box is deemed an Inventoried Safe Deposit Box pursuant to this Section 11.1. Seller shall be responsible for, and shall indemnify and hold harmless the Purchaser Indemnitees in accordance with Article XIV from and against any Indemnification Loss incurred by any Purchaser Indemnitees with respect to, any theft, loss or damage to the contents of any safe deposit box prior to the time such safe deposit box is deemed an Inventoried Safe Deposit Box. This Section 11.1 shall survive the Closing.
11.2 Baggage. On the Closing Date, employees, agents or representatives of the Parties jointly shall make a written inventory of all baggage, boxes and similar items checked in or left in the care of Seller at the Hotel, and Seller shall deliver to Purchaser the keys to any secured area which such baggage and other items are stored (and thereafter such baggage, boxes and other items inventoried shall be deemed the “Inventoried Baggage”). Purchaser shall be responsible for, and shall indemnify and hold harmless the Seller Indemnitees in accordance with Article XIV from and against any Indemnification Loss incurred by any Seller Indemnitees with respect to any theft, loss or damage to any Inventoried Baggage from and after the time of such inventory, and any other baggage, boxes or similar items left in the care of Purchaser which was not inventoried by the Parties. Seller shall be responsible for, and shall indemnify and hold harmless the Purchaser Indemnitees in accordance with Article XIV from and against any Indemnification Loss incurred by any Purchaser Indemnitees with respect to any theft, loss or damage to any Inventoried Baggage prior to the time of such inventory, and any other baggage, boxes or similar items left in the care of Seller which was not inventoried by the Parties. This Section 11.2 shall survive the Closing.
11.3 IT Systems. With respect to the IT Systems, Seller shall provide Purchaser with a contact name and telephone number of the applicable licensor, vendor or supplier, and Purchaser shall (i) be responsible for obtaining any consents or approvals necessary for the assignment or transfer of such IT Systems from Seller to Purchaser, or a new license for such IT Systems (as the case may be), and (ii) pay any fees or expenses charged by the licensor, vendor or supplier of such IT Systems in respect of such assignment or transfer or new license (as the case may be).
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ARTICLE XII
12.1 Seller’s Default. If (i) Purchaser has not delivered a Termination Notice pursuant to Section 4.1.1 and (ii) any of Seller’s representations or warranties hereunder is not true and correct in any material respect or Seller fails to perform its covenants or obligations hereunder in any material respect other than due to a Purchaser’s Default (a “Seller Default”) and Seller’s Default is not cured by Seller within ten (10) days of receipt of written notice thereof of Purchaser, then Purchaser, as its sole and exclusive remedies, may elect to: (a) terminate this Agreement, in which case the Xxxxxxx Money shall be refunded to Purchaser in accordance with Section 3.2.4, and Seller shall reimburse Purchaser for all third party out-of-pocket costs and expenses actually incurred by Purchaser and its Affiliates in connection with Purchaser’s due diligence investigations and the negotiation of this Agreement and Purchaser’s efforts to consummate the Contemplated Transactions (which reimbursement shall be capped at $300,000), and Seller shall promptly pay such amounts to Purchaser upon receipt of documentation showing the amount of such costs and expenses, after which the Parties shall have no further rights or obligations under this Agreement, except those which expressly survive such termination; (b) proceed to Closing in which case Purchaser shall be deemed to have waived such Seller Default and, if applicable, any Purchaser Closing Condition that is not satisfied as a result of such Seller Default; or (c) seek specific performance, by commencing legal action within forty- five (45) days following the expiration of any applicable cure period, with Seller responsible for costs and attorneys’ fees incurred by Purchaser in connection with obtaining such relief and with a reduction in or setoff against the Purchase Price as the court may deem appropriate. The preceding clause (a) shall survive the termination of this Agreement. Seller acknowledges and agrees that irreparable damage would occur in the event that Seller fails to take such actions as are required of it hereunder to consummate the Contemplated Transactions. Accordingly, Seller acknowledges and agrees that Purchaser shall be entitled to specific performance as provided in this Section 12.1. Seller agrees that it will not oppose the granting of specific performance as provided in this Section 12.1 on the basis that Purchaser has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity.
12.2 Purchaser’s Default. If (i) Purchaser has not deposited the Xxxxxxx Money within the time period provided in, and otherwise in accordance with, Section 3.2.1, or (ii) at any time prior to Closing, any of Purchaser’s representations or warranties hereunder is not true and correct in any material respect or Purchaser fails to perform any of its other covenants or obligations under this Agreement in any material respect other than due to a Seller Default (a “Purchaser Default”) and Purchaser’s Default is not cured by Purchaser within ten (10) days of receipt of written notice thereof of Seller, then Seller, as its sole and exclusive remedy, may elect to (A) terminate this Agreement by providing written notice to Purchaser, in which case the Xxxxxxx Money shall be disbursed to Seller in accordance with Section 3.2.4, and the Parties shall have no further rights or obligations under this Agreement, except those which expressly survive such termination, or (B) proceed to Closing pursuant to this Agreement, in which case Seller shall be deemed to have waived such Purchaser Default. Notwithstanding the foregoing, Seller shall have the right to bring an action for damages against Purchaser for Purchaser’s failure to deposit the Xxxxxxx Money. The preceding sentence shall survive the termination of this Agreement.
12.3 LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE AND AGREE THAT IF THIS AGREEMENT IS TERMINATED PURSUANT TO SECTION 12.2, THE DAMAGES THAT SELLER WOULD SUSTAIN AS A RESULT OF SUCH TERMINATION WOULD BE DIFFICULT IF NOT IMPOSSIBLE TO ASCERTAIN. ACCORDINGLY, THE PARTIES AGREE THAT SELLER SHALL RETAIN THE XXXXXXX MONEY AS FULL AND COMPLETE LIQUIDATED DAMAGES (AND NOT AS A PENALTY) AS SELLER’S SOLE AND EXCLUSIVE REMEDY FOR SUCH TERMINATION; PROVIDED, HOWEVER, THAT IN ADDITION TO THE XXXXXXX MONEY, SELLER SHALL RETAIN ALL RIGHTS AND REMEDIES UNDER THIS AGREEMENT WITH RESPECT TO THOSE OBLIGATIONS OF PURCHASER WHICH EXPRESSLY SURVIVE SUCH TERMINATION.
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12.4 Effect of Termination. If this Agreement is terminated all rights and obligations of the Parties hereunder shall terminate and no Party shall have any liability to the other Party hereto, except for obligations of the Parties in this Agreement which expressly survive the termination of this Agreement, and except that nothing herein will relieve any Party from liability arising out of any willful breach of its representations, warranties, covenants or agreements contained in this Agreement.
ARTICLE XIII
13.1 Casualty. If, at any time after the Effective Date and prior to Closing or earlier termination of this Agreement, the Property or any portion thereof is damaged or destroyed by fire or any other casualty (a “Casualty”), Seller shall give written notice of such Casualty to Purchaser promptly after the occurrence of such Casualty.
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13.2 Condemnation. If, at any time after the Effective Date and prior to Closing or the earlier termination of this Agreement, any Governmental Authority threatens or commences any condemnation proceeding or other proceeding in eminent domain with respect to all or any portion of the Real Property (a “Condemnation”), Seller shall give written notice of such Condemnation to Purchaser promptly after Seller receives notice of such Condemnation.
ARTICLE XIV
14.1 Survival. If this Agreement is terminated, those representations, warranties, covenants, liabilities, indemnities and obligations of the Parties under this Agreement that expressly survive the termination of this Agreement shall survive such termination, and all others shall not survive such termination. If the Closing occurs, those representations, warranties, covenants, liabilities, indemnities and obligations of the Parties under this Agreement that expressly survive the Closing shall survive the Closing as provided in Section 6.3 or elsewhere herein and all others shall merge in the Deed and not survive the Closing. This Article XIV and all rights and obligations of defense and indemnification as expressly set forth in this Agreement shall survive the Closing or termination of this Agreement.
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14.2 Indemnification by Seller. Subject to the limitations set forth in Sections 14.1, 14.4 and 14.5 and any other express provision in this Agreement, Seller shall defend, indemnify and hold harmless the Purchaser Indemnitees from and against any Indemnification Loss incurred by any Purchaser Indemnitee to the extent resulting from (a) any breach by Seller of any of its representations and warranties made by Seller under this Agreement or any other Transaction Document, (b) any breach by Seller of any covenants or obligations under this Agreement or any other Transaction Document, and (c) the Excluded Liabilities.
14.3 Indemnification by Purchaser. Subject to the limitations set forth in Sections 14.1, 14.4 and 14.5, Purchaser shall defend, indemnify and hold harmless the Seller Indemnitees from and against any Indemnification Loss incurred by any Seller Indemnitee to the extent resulting from (a) any breach by Purchaser of any of its representations, warranties, covenants or obligations under this Agreement or any other Transaction Document and (b) the Assumed Liabilities.
14.4 Limitations on Indemnification Obligations.
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14.5 Indemnification Procedure
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14.6 Release and Indemnification. Seller and Purchaser hereby release Deposit Escrow Agent and its officers, managers, employees and agents (each, a “Deposit Escrow Agent Party”), for any liability, damage, loss, cost or expense incurred by Seller or Purchaser to the extent resulting from (i) any action taken or not taken in good faith upon advice of Deposit Escrow Agent’s counsel given with respect to any questions relating to its obligations under this Agreement, or (ii) any action taken or not taken in reliance upon any document, including any written notice provided to Deposit Escrow Agent pursuant to this Agreement, as to the due execution and the validity and effectiveness of such document, and the truth and accuracy of any information contained therein, which such Deposit Escrow Agent Party in good faith believes to be genuine, to have been signed or presented by a duly authorized person or persons and to comply with the terms of this Agreement, except to the extent resulting from the gross negligence, willful default, intentional misconduct or breach of trust by such Deposit Escrow Agent Party. Seller and Purchaser, jointly and severally, shall indemnify and hold harmless any Deposit Escrow Agent Party against any liability, damage, loss, cost or expense, including reasonable attorneys’ fees and court costs, incurred by such Deposit Escrow Agent Party to the extent resulting from the performance by any Deposit Escrow Agent Party of Deposit Escrow Agent’s obligations under this Agreement, except to the extent resulting from the gross negligence, willful default, intentional misconduct or breach of trust by such Deposit Escrow Agent Party.
14.7 Exclusive Remedy for Indemnification Loss. Following the Closing, the indemnification provisions in this Article XIV shall be the sole and exclusive remedy of any Indemnitee with respect to any claim for Indemnification Loss arising from or in connection with this Agreement, other than with respect to any Purchase Price adjustments made pursuant to Article X and any fraud claims and as provided in Article XII or any other express provision in this Agreement.
14.8 Treatment of Indemnity Payment. Any indemnity payment made to an Indemnitee pursuant to this Agreement shall be treated as an adjustment to the Purchase Price for the Property, for all tax, financial reporting and other purposes.
14.9 SURVIVAL. This Article XIV shall survive the Closing.
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ARTICLE XV
15.1 PROPERTY SOLD “AS IS”. PURCHASER ACKNOWLEDGES AND AGREES THAT (A) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT THE PURCHASE OF THE PROPERTY SHALL BE ON AN “AS IS”, “WHERE IS”, “WITH ALL FAULTS” BASIS, SUBJECT TO WEAR AND TEAR FROM THE EFFECTIVE DATE UNTIL CLOSING, AND (B) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, SELLER HAS NO OBLIGATION TO REPAIR ANY DAMAGE TO OR DEFECT IN THE PROPERTY, REPLACE ANY OF THE PROPERTY OR OTHERWISE REMEDY ANY MATTER AFFECTING THE CONDITION OF THE PROPERTY.
15.2 LIMITATION ON REPRESENTATIONS AND WARRANTIES. PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, NEITHER SELLER, MANAGER OR ANY OF THEIR AFFILIATES, NOR ANY OF THEIR RESPECTIVE SHAREHOLDERS, MEMBERS, PARTNERS, TRUSTEES, BENEFICIARIES, DIRECTORS, OFFICERS, MANAGERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, CONTRACTORS, CONSULTANTS, AGENTS OR REPRESENTATIVES, NOR ANY PERSON PURPORTING TO REPRESENT ANY OF THE FOREGOING, HAVE MADE ANY REPRESENTATION, WARRANTY, GUARANTY, PROMISE, PROJECTION OR PREDICTION WHATSOEVER WITH RESPECT TO THE PROPERTY OR THE BUSINESS, WRITTEN OR ORAL, EXPRESS OR IMPLIED, ARISING BY OPERATION OF LAW OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY REPRESENTATION OR WARRANTY AS TO (A) THE CONDITION, SAFETY, QUANTITY, QUALITY, USE, OCCUPANCY OR OPERATION OF THE PROPERTY, (B) THE PAST, PRESENT OR FUTURE REVENUES OR EXPENSES WITH RESPECT TO THE PROPERTY OR THE BUSINESS, (C) THE COMPLIANCE OF THE PROPERTY OR THE BUSINESS WITH ANY ZONING REQUIREMENTS, BUILDING CODES OR OTHER APPLICABLE LAW, INCLUDING, WITHOUT LIMITATION, THE AMERICANS WITH DISABILITIES ACT OF 1990, (D) THE ACCURACY OF ANY ENVIRONMENTAL REPORTS OR OTHER DATA OR INFORMATION SET FORTH IN THE SELLER DUE DILIGENCE MATERIALS PROVIDED TO PURCHASER WHICH WERE PREPARED FOR OR ON BEHALF OF SELLER, OR (E) ANY OTHER MATTER RELATING TO SELLER, THE PROPERTY OR THE BUSINESS.
15.3 RELIANCE ON DUE DILIGENCE. PURCHASER ACKNOWLEDGES AND AGREES THAT:
(A) PURCHASER SHALL HAVE HAD THE OPPORTUNITY TO CONDUCT ALL DUE DILIGENCE INSPECTIONS OF THE PROPERTY AND THE BUSINESS AS OF THE EXPIRATION OF THE DUE DILIGENCE PERIOD, INCLUDING REVIEWING ALL SELLER DUE DILIGENCE MATERIALS AND OBTAINING ALL INFORMATION WHICH IT DEEMS NECESSARY TO MAKE AN INFORMED DECISION AS TO WHETHER IT SHOULD PROCEED WITH THE PURCHASE OF THE PROPERTY AND THE BUSINESS;
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(B) PURCHASER SHALL BE DEEMED TO BE SATISFIED WITH THE RESULTS OF ITS DUE DILIGENCE REVIEW OF THE PROPERTY AND THE BUSINESS UPON THE EXPIRATION OF THE DUE DILIGENCE PERIOD;
(C) PURCHASER WILL BE RELYING ONLY ON ITS DUE DILIGENCE INSPECTIONS OF THE PROPERTY, ITS REVIEW OF THE SELLER DUE DILIGENCE MATERIALS AND THE REPRESENTATIONS AND WARRANTIES EXPRESSLY MADE BY SELLER IN THIS AGREEMENT AND ANY OTHER TRANSACTION DOCUMENT IN PURCHASING THE PROPERTY; AND
(D) PURCHASER WILL NOT BE RELYING ON ANY STATEMENT MADE OR INFORMATION PROVIDED TO PURCHASER BY SELLER (EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY MADE BY SELLER IN THIS AGREEMENT), MANAGER OR ANY OF THEIR AFFILIATES, OR ANY OF THEIR RESPECTIVE SHAREHOLDERS, MEMBERS, PARTNERS, TRUSTEES, BENEFICIARIES, DIRECTORS, MANAGERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, CONTRACTORS, CONSULTANTS, AGENTS OR REPRESENTATIVES, OR ANY PERSON PURPORTING TO REPRESENT ANY OF THE FOREGOING.
15.4 SURVIVAL. This Article XV shall survive the Closing.
ARTICLE XVI
If to Seller:
c/o Behringer Harvard
The Lightstone Group
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxx and Xxx Xxxxxxx
Facsimile No.: (000) 000-0000
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With copies to:
JMI Realty LLC
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx and Xxxxxx Xxxxx, Esq.
Facsimile No.: (000) 000-0000
And
c/o The Lightstone Group
0000 Xxxxx Xxxxxx Xxx., Xxxxx 0
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
And:
Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx, LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Purchaser:
c/o KSL Capital Partners
000 Xx. Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxxxxxxx Hyatt Xxxxxx Xxxxxxx, LLP
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxx and Xxxxxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
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If to Deposit Escrow Agent or Title Company:
Fidelity National Title & Escrow of Hawaii, Inc. City Financial Tower
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attn: Xxxxxxx W.O. Ching
Facsimile No.: ( ) -
16.2 Time is of the Essence. Time is of the essence of this Agreement; provided, however, that notwithstanding anything to the contrary in this Agreement, if the time period for the performance of any covenant or obligation, satisfaction of any condition or delivery of any Notice or item required under this Agreement shall expire on a day other than a Business Day, such time period shall be extended automatically to the next Business Day.
16.3 Assignment. Purchaser may assign this Agreement to one or more of its Affiliates without the written consent of Seller; provided, however, such assignment shall not relieve assignor from its obligations and duties under this Agreement. Purchaser shall provide a copy of any such assignment to Seller at least five (5) days prior to the Closing Date. Seller may not assign this Agreement.
16.4 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties, and their respective successors and permitted assigns.
16.5 Third Party Beneficiaries. This Agreement shall not confer any rights or remedies on any Person other than (i) the Parties and their respective successors and assigns, and (ii) any Indemnitee to the extent such Indemnitee is expressly provided any right of defense or indemnification in this Agreement.
16.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF HAWAII, WITHOUT GIVING EFFECT TO ANY PRINCIPLES REGARDING CONFLICT OF LAWS.
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16.7 Rules of Construction. The following rules shall apply to the construction and interpretation of this Agreement:
16.7.1. Singular words shall connote the plural as well as the singular, and plural words shall connote the singular as well as the plural, and the masculine shall include the feminine and the neuter, as the context may require.
16.7.2. All references in this Agreement to particular articles, sections, subsections or clauses (whether in upper or lower case) are references to articles, sections, subsections or clauses of this Agreement. All references in this Agreement to particular exhibits or schedules (whether in upper or lower case) are references to the exhibits and schedules attached to this Agreement, unless otherwise expressly stated or clearly apparent from the context of such reference.
16.7.3. The headings in this Agreement are solely for convenience of reference and shall not constitute a part of this Agreement nor shall they affect its meaning, construction or effect.
16.7.4. Each Party and its counsel have reviewed and revised (or requested revisions of) this Agreement and have participated in the preparation of this Agreement, and therefore any rules of construction requiring that ambiguities are to be resolved against the Party which drafted the Agreement or any exhibits hereto shall not be applicable in the construction and interpretation of this Agreement or any exhibits hereto.
16.7.5. The terms “hereby,” “hereof,” “hereto,” “herein,” “hereunder” and any similar terms shall refer to this Agreement, and not solely to the provision in which such term is used.
16.7.6. The terms “include,” “including” and similar terms shall be construed as if followed by the phrase “without limitation.”
16.7.7. The term “sole discretion” with respect to any determination to be made a Party under this Agreement shall mean the sole and absolute discretion of such Party, without regard to any standard of reasonableness or other standard by which the determination of such Party might be challenged.
16.8 Severability. If any term or provision of this Agreement is held to be or rendered invalid or unenforceable at any time in any jurisdiction, such term or provision shall not affect the validity or enforceability of any other terms or provisions of this Agreement, or the validity or enforceability of such affected term or provision at any other time or in any other jurisdiction.
16.9 JURISDICTION AND VENUE. ANY LITIGATION OR OTHER COURT PROCEEDING WITH RESPECT TO ANY MATTER ARISING FROM OR IN CONNECTION WITH THIS AGREEMENT SHALL BE CONDUCTED IN STATE OR FEDERAL COURT IN THE JURISDICTION WHERE THE PROPERTY IS LOCATED, AND SELLER (FOR ITSELF AND ALL SELLER INDEMNITEES) AND PURCHASER (FOR ITSELF AND ALL PURCHASER INDEMNITEES) HEREBY SUBMIT TO JURISDICTION AND CONSENT TO VENUE IN SUCH COURTS, AND WAIVE ANY DEFENSE BASED ON FORUM NON CONVENIENS.
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16.10 WAIVER OF TRIAL BY JURY. EACH PARTY HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY LITIGATION OR OTHER COURT PROCEEDING WITH RESPECT TO ANY MATTER ARISING FROM OR IN CONNECTION WITH THIS AGREEMENT.
16.11 Prevailing Party. If any litigation or other court action, arbitration or similar adjudicatory proceeding is commenced by any Party to enforce its rights under this Agreement against any other Party, all fees, costs and expenses, including reasonable attorneys’ fees and court costs, incurred by the prevailing Party in such litigation, action, arbitration or proceeding shall be reimbursed by the losing Party; provided, that if a Party to such litigation, action, arbitration or proceeding prevails in part, and loses in part, the court, arbitrator or other adjudicator presiding over such litigation, action, arbitration or proceeding shall award a reimbursement of the fees, costs and expenses incurred by such Party on an equitable basis.
16.12 Incorporation of Recitals, Exhibits and Schedules. The recitals to this Agreement, and all exhibits and schedules referred to in this Agreement are incorporated herein by such reference and made a part of this Agreement. The information disclosed in any particular schedule to this Agreement shall be deemed to relate to and to qualify only the particular matter set forth in the corresponding numbered section in this Agreement; provided, however, to the extent that an item in a schedule is relevant and reasonably apparent on its face to apply to the disclosure required by another schedule, such item shall be deemed to be disclosed in such schedule whether or not an explicit cross-reference appears.
16.13 Entire Agreement. This Agreement sets forth the entire understanding and agreement of the Parties hereto, and shall supersede any agreements and understandings (written or oral), including any letter of intent, between the Parties on or prior to the Effective Date with respect to the transaction described in this Agreement.
16.14 Amendments, Waivers and Termination of Agreement. No amendment or modification to any terms or provisions of this Agreement, waiver of any covenant, obligation, breach or default under this Agreement or termination of this Agreement (other than as expressly provided in this Agreement), shall be valid unless in writing and executed and delivered by each of the Parties.
16.15 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument. The submission of a signature page transmitted by facsimile (or similar electronic transmission facility, including PDF via email) shall be considered as an “original” signature page for purposes of this Agreement so long as the original signature page is thereafter transmitted by mail or by other delivery service and the original signature page is substituted for the facsimile (or similar electronic transmission facility, including PDF via email) signature page in the original and duplicate originals of this Agreement.
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16.16 1031 Exchange. If either Seller or Purchaser wishes to enter into a like-kind exchange (either simultaneous with the Closing or deferred) with respect to the Property under Section 1031 of the Code (“Exchange”), the other Party shall cooperate in all reasonable respects to effectuate the Exchange, including the execution of documents; provided (i) the cooperating Party shall incur no liability or expense related to the Exchange and (ii) the Closing shall not be contingent upon, nor extended or delayed by, such Exchange (other than as expressly provided in this Section 16.16). Purchaser’s or Seller’s cooperation shall include, but not be limited to, permitting the assignment of rights under this Agreement to a qualified intermediary (as defined in Treasury Regulation Section 1.1031 (k)-1(g)(4)(iii)) (the “QI”), or permitting an assignment of this Agreement to a QI to effectuate the Exchange and/or entering into an agreement with a QI for the acquisition of the Property (or interests in the Property) and permitting the assignment of rights under this Agreement to two or more assignees as tenants in common in connection with the Exchange (which may involve the conveyance of a tenancy in common interest immediately prior to Closing to facilitate a “drop and swap” transaction), provided that Purchaser or Seller, as the case may be, shall remain obligated for all of the terms and conditions hereunder. Seller represents that Seller shall be the “Exchangor” under an Exchange for the Property, as the “Relinquished Property”, and shall be the purchasing entity for the “Replacement Property” in such Exchange, as all such terms are used and defined in similar Exchanges. Each Party acknowledges and agrees that in the event the other Party requires additional time in order to effectuate its Exchange, the requesting Party shall have the one-time right, in its sole discretion, to extend the Closing Date for up to thirty (30) days by delivering written notice to the other Party on or before five (5) days prior to the originally scheduled Closing Date. The exchanging Party shall be responsible for all agreements, documents and escrow instructions and no substitution of or assignment to another party to effectuate such exchange shall release any other Party from its obligations, warranties or obligations under this Agreement or from liability from any prior or subsequent default.
16.17 Remedies. Except as otherwise provided herein, any and all remedies with respect to a Party’s willful or intentional breach hereunder expressly conferred upon a Party shall be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such Party, and the exercise by a Party of any one remedy shall not preclude the exercise of any other remedy.
16.18 Survival. This Article XVI shall survive the Closing.
[Signatures appear on next page.]
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IN WITNESS WHEREOF, each Party has caused this Agreement to be executed and delivered in its name by a duly authorized officer or representative.
SELLER: | |
KAUAI COCONUT BEACH, LLC, | |
a Delaware limited liability company | |
By: | |
Name: | |
Title: | |
KAUAI COCONUT BEACH OPERATOR, LLC, a Delaware limited liability company | |
By: | |
Name: | |
Title: | |
PURCHASER: | |
KHS, LLC, | |
a Delaware limited liability company | |
By: | |
Name: | |
Title: |
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