MANAGEMENT SERVICES AGREEMENT
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EXHIBIT 1A-6
MATERIAL CONTRACTS
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This MANAGEMENT SERVICES AGREEMENT (the “Agreement”) is made and entered into as of 14 December, 2018, by and between HotelierCo LLC, a Delaware Limited Liability Company (the “Manager”), and HCo Cape May LLC, a Delaware Limited Liability Company (the “Company”).
BACKGROUND
The Company owns (or is expected to own, directly or indirectly) interests in real property, specifically a hotel contemplated to be constructed on about 000 Xxxxxx Xxxxxx, Xxxx Xxxx Xxx, XX 00000 and 000 Xxxxxxxx, Xxxx Xxxx Xxx, XX 00000 and potentially adjoining properties (the “Hotel Project”). It is expected that the Company will have a material role in matters concerning the design and contruction of the Hotel and the retention and monitoring of the expected direct physical operator of the property (currently anticipated to be Valor Hospitality).
The Manager is currently one of several Members of the Company.
The Company desires to obtain the Manager’s expertise and management skills in connection with the Company’s role in the management and operation of the Company and, indirectly, the Hotel Project.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties intending to be legally bound, hereby agree as follows:
2.Authority of Manager. The Manager shall have full authority to conduct the day-to-day operations of the Company (in coordination with the Company Manager, if any). The authority of the Manager shall be subject only to the limitations set forth in this Agreement and the LLC Agreement.
0.Xxxxxxxxxx Fee and Reimbursable Expenses.
X.Xxxxxxxxxx Fee. The Company shall pay to the Manager a quarterly management fee (the “Management Fee”) equal to .375% (approximately 1.5% annualized) of the Company’s value, as may be assessed from time to time by the Company in consultation with the Manager (as computed not less than annually in a manner generally consistent generally
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accepted accounting principles). Until and unless there is a formal assessment, the value of the Company’s assets shall be deemed to be the value of the assets contributed to or invested into the Company by its Members. The Management Fee will be paid, in arrears, on a quarterly basis (pro-rated for partial periods).
B.Reimbursable Expenses. The Company shall reimburse the Manager, without markup, interest or premium of any type, for all costs and expenses actually and reasonably incurred by the Manager relating to the services expected to be supplied under this Agreement (the “Reimbursable Expenses”). Without limiting the generality of the foregoing, the following costs and expenses arising from or relating to the Rehabilitation Business shall be Reimbursable Expenses: (i) reasonable travel expenses incurred personnel in the Manager’s employ for the purpose of making on-site visits to the Hotel Project and actual or potential service providers to the Hotel Project; (ii) outside counsel fees and expenses relating directly to matters arising out of expected services; and (iii) payments for goods or services furnished by unaffiliated parties for the benefit of the Company or its investors as a whole. Reimbursable Expenses shall not include, and Manager shall not be reimbursed by the Company for, any indirect or overhead expenses of Manager or its affiliates. For absence of doubt, items such as
(a) Company related account maintenance costs involving transfer agent(s), (b) ACH transfer fees between the Company and investors in the Company, and (c) any other cost fee or expense required or deemed beneficial for the Company’s operations, are a cost, fee or expense of the Company and not the Manager (except as specifically agreed to by the Manager in writing). To the extent (without a xxxxxx agreement to the contrary) should he Manager pay for such a cost, fee, or expense, such amount will be a reimbursable expense under this Section 3B.
A.Term. The term of the Agreement shall be for a period of the life of the Company unless terminated earlier on not less than one hundred twenty (120) days advanced written notice by the Company or the Manager to each other.
5.Indemnification. Each party (the “Indemnifying Party”) shall indemnify, hold harmless, and defend the other party, and its shareholders, members, directors, managers, officers, employees, affiliates, agents, successors and assigns (each of them being an “Indemnified Party”) from and against any and all claims, suits, damages, fines, penalties, liabilities and expenses (including reasonable attorneys’ fees) resulting from or arising out of the gross negligence, willful misconduct, or illegal activity of, or the breach of this Agreement by, the Indemnifying Party or its shareholders, members, directors, managers, officers, employees, affiliates, agents, successors and assigns. The obligation of any Indemnifying Party under this Section 5 shall be reduced by any insurance recovery received by the Indemnified Party with respect to the claim for which it is seeking indemnity and, if such recovery is received by the Indemnified Party after a claim for indemnity has been paid by the Indemnifying Party, the Indemnified Party shall remit such insurance recovery to the Indemnifying Party to the extent it had previously paid such indemnity claim.
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A.Assignability. Neither party to this Agreement may assign its rights and obligations under this Agreement without the prior written consent of the other, which consent shall not be unreasonably withheld; provided, however, that either party may assign its rights and obligations under this Agreement to any entity with which it is affiliated or any non-affiliated entity in connection with a merger, consolidation or sale of substantially all of its assets and business. Subject to the foregoing, the terms of this Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective successors and assigns.
B.Subcontracting. The Manager may carry out the duties of this Agreement, in whole or in part, through a subcontract with any entity with which it is affiliated upon prior written notice to the Company.
C.Third Party Beneficiaries. There are no third party beneficiaries of or to this Agreement.
D.Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware without regard to its principles of conflicts of laws.
E.Headings. The headings of this Agreement are for convenience only and are not intended to define, limit or describe the scope or intent of any provision of this Agreement.
F.Entire Agreement; Amendments. This Agreement contains all the terms, conditions and understandings agreed upon by the parties and no other agreements, oral or otherwise, regarding the subject matter of this Agreement will be deemed to exist or to bind either of the parties hereto. This Agreement cannot be altered, modified or changed except by another agreement signed by each party.
G.Counterparts. This Agreement may be executed in two or more counterparts, each and all of which will be deemed an original and all of which, when taken together, will constitute but one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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CONTRACT FOR SALE AND PURCHASE OF REAL ESTATE
THIS CONTRACT FOR SALE AND PURCHASE CONTRACT OF REAL
ESTATE (this “Contract”) is made as of this 14th day of December 2018, by and between Xxxx Xxxxx Xxxxx, with an address of 000 Xxxxxx Xxxxxx, Xxxx Xxxx Xxx, Xxx Xxxxxx 00000, and Xxxxxx Xxxxxx, with an address of 000 Xxxxxxxx, Xxxx Xxxx Xxx, Xxx Xxxxxx 00000 (together “Seller”) and HCo Property Cape May LLC with an address of 0000 Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, XX 00000, (“Buyer”).
BACKGROUND
WHEREAS, Xxxx Xxxxx Xxxxx is the owner of a parcel of real property 000 Xxxxxx Xxxxxx, Xxxx Xxxx Xxx, XX 00000 consisting of 0.55 acres known as Block 4, Lot 4, located in the Borough of West Cape May, Cape May County, New Jersey ("Parcel 1") as more particularly described in the attached Exhibit "A-1” as well as all easements, appurtenances, rights and privileges as contained in or in any way pertaining to or beneficial thereto; and
WHEREAS, Xxxxxx Xxxxxx is the owner of a parcel of real property 000 Xxxxxxxx, Xxxx Xxxx Xxx, XX 00000 consisting of 0.17 acres known as Block 4, Lots. 20.01 and 20.02, located in the Borough of West Cape May, Cape May County, New Jersey ("Parcel 2") as more particularly described in the attached Exhibit "A-2” as well as all easements, appurtenances, rights and privileges as contained in or in any way pertaining to or beneficial thereto; and
WHEREAS, Parcel 1 and Parcel 2 shall be together referred to herein as the
“Property” and
WHEREAS, “Seller” shall collectively refer to Xxxx Xxxxx Xxxxx and Xxxxxx Xxxxxx unless the context clearly indicates otherwise; and
WHEREAS, Seller desires to sell and Buyer desires to buy the Property for the consideration and on the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the promises and the mutual covenants and conditions herein contained, and intending to be legally bound hereby, Seller hereby agrees to sell and Xxxxx hereby agrees to buy the Property in accordance with the following terms and conditions:
1.Purchase Price: Deposit. The purchase price for the Property shall be Two Million Two Hundred Fifty Thousand ($2,250,000.00) Dollars ("Purchase Price"). The Purchase Price shall be payable by Buyer to Seller as follows:
a.With respect to Parcel 1, an xxxxxxx money deposit of Twenty Five Thousand ($25,000.00) Dollars ("Deposit") shall be delivered in escrow to Buyer's attorneys, Drinker Xxxxxx & Xxxxx LLP, (in such capacity, "Escrow Agent") within five (5) business days after the date of this Contract, which shall be deposited in an interest-bearing account.
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b.With respect to Parcel 2, an xxxxxxx money deposit of Twenty Five Thousand ($25,000.00) Dollars ("Deposit") shall be delivered in escrow to Buyer's attorneys, Drinker Xxxxxx & Xxxxx LLP, (in such capacity, "Escrow Agent") within five (5) business days after the date of this Contract, which shall be deposited in an interest-bearing account.
c.The balance of the Purchase Price (subject to prorations and adjustments set forth herein) shall be payable on the date of Closing of title to the Property by cashier's or certified check payable to Seller or by attorney trust fund or title company check payable to Seller, or, at Seller's election, by wire transfer to a financial institution designated by Seller.
d.All parties agree to be bound by the attached “Joinder by Escrow Agent” to be executed by Xxxxxx Agent following the parties execution of this contract.
e.The Purchase Price shall be allocated between Parcel 1 and Parcel 2 as follows:
Parcel 1 $1,550,000.
Parcel 2 $700,000.
2.Survey. Within sixty (60) days from the date of this Contract, Buyer shall obtain a current boundary survey of the Property, together with a legal description thereof, prepared by a land surveyor licensed in the State of New Jersey and certified to Buyer and to the Title Company (as hereinafter defined) as made in accordance with the Minimum Standard Detail Requirements for Land Title Surveys (1997) jointly adopted by the American Land Title Association and the American Congress of Surveying and Mapping (the "Survey"). Upon receipt of the Survey, the description of the Property set forth in Exhibits "A-1” and “A-2" shall be deemed supplemented and such land as described on the Survey shall constitute the Property. Seller shall provide to Buyer all environmental reports, surveys, titles, and similar materials relating to the Property ("Seller's Materials"), as exist and are in Seller's or their agents' possession.
3.Title Evidence, Title and Survey Review. Buyer shall, at Buyer’s expense, order an owner’s title insurance commitment for the Property (“Commitment”) from a reputable title insurance company licensed in New Jersey (“Title Company”). Within fifteen (15) days from the date on which Xxxxx has received both the Commitment and the Survey, but not more than ninety (90) days from the date hereof ("Title Objection Period"), Buyer shall provide true copies to Seller and shall examine the Survey and the Commitment to determine the nature of any defects in title and/or state of facts disclosed by the Survey. If the title to all or part of the Property is subject to liens, encroachments, encumbrances, easements, conditions or restrictions not satisfactory to Buyer, or if the survey is in any way unsatisfactory to Buyer (in each case a “Defect”), Buyer shall give written notice to Seller of its objections to the state of the title or the survey prior to the expiration of the Title Objection Period and Seller shall have ten (10) days after receipt of such notice in which to proceed diligently to remedy or remove any such Defect; provided, that where a lien or encumbrance can be satisfied and removed by the payment of money, and the proceeds of sale will be sufficient for that purpose, Seller may pay and satisfy such liens or encumbrances with closing proceeds. Except for Defects arising or appearing of
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record after Xxxxx’s receipt of the Commitment or Survey, as applicable, (in which case, notwithstanding anything to the contrary, Buyer may, at its option, (i) elect to have Seller cure such Defect at Seller’s cost or (ii) terminate the Contract) any defect to which Buyer does not object to on or before the expiration of the Title Objection Period shall be deemed waived. In the event Seller fails to remove any defect objected to by Xxxxx as provided above, Buyer shall have the option of either accepting the title subject to such defect or terminating this Contract and receiving a refund of the Deposit, whereupon neither party shall have any further rights or obligations hereunder.
x.Xxxxx shall have until 5:00 p.m. Eastern Standard Time on the 60th day after the date of this Contract (“Inspection Period”) to inspect and review, at Buyer's sole cost and expense (“Due Diligence Review”) the condition of the Property including without limitation the plumbing, electrical, heating and air conditioning systems and the environmental condition of the Property and whether the building located thereon is suitable for Buyer’s intended use. Seller shall provide reasonable access to the Property to Buyer and Xxxxx's agents and employees during the Inspection Period, subject to the terms and conditions herein.
b.Buyer shall be responsible for any and all losses, damages, charges and other costs associated with its Due Diligence Review and Buyer covenants and agrees to return the Property to the same condition as existed prior to any inspections and studies. Buyer agrees not to allow any liens to arise against the Property as a result of such inspections and studies or Xxxxx's access to the Property and agrees to indemnify, defend and hold Seller harmless from and against any and all claims, charges, actions, costs, expenses (including attorneys fees), suits, damages, injuries, or other liabilities which arise, either directly or indirectly, from Buyer's or its agent's, employee's or contractor's entry onto the Property or for any testing or inspections related thereto. This provision shall survive Closing or termination of this Contract for any reason.
c.Prior to the expiration of the Inspection Period, Buyer may terminate this Contract, in its sole and absolute discretion, upon notice to Seller of Buyer's decision to terminate this Contract because of unsatisfactory results of the Due Diligence Review. Upon such termination, the Deposit shall be returned to Buyer, and thereafter Seller and Buyer shall have no further obligations or liabilities one to the other hereunder. If Xxxxx fails to deliver to Seller any written notice of termination prior to the expiration of the Inspection Period, and if this Contract is not otherwise terminated pursuant to the provisions hereof, then this Contract shall remain in full force and effect and Buyer shall be deemed to have accepted the condition of and state of title to the Property, as of 5:01 P.M. Eastern Standard Time on the last day of the Due Diligence Period.
d.Upon the expiration of the Inspection Period, the sole obligation of the Seller with respect to the physical condition of the Property shall be to deliver possession of the Property to Buyer in substantially the same physical condition (excluding normal wear and tear and casualty damage) as existed on the last day of the Inspection Period and Buyer has agreed to close title on the Property on the closing date, except as set forth herein.
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.6.Maintenance Prior to Closing. Until the time of Closing, each Seller shall, as the portion of the Property owned by it: (a) maintain the Property in substantially the same manner as it is currently being maintained and operated; (b) not make any substantial alterations or changes to the Property other than ordinary and necessary maintenance and repairs, without Buyer's prior written approval; (c) maintain in effect all policies of Property, casualty and liability insurance or similar policies of insurance, with no less than the limits of coverage now carried with respect to the Property; (d) timely pay all taxes, assessments, utility charges and rents and other charges affecting the Property; and (e) not to appeal any Property tax assessments. Notwithstanding the provisions of (a) through (e) above, Seller may change or modify any rights, obligations or contracts relating to the Property as necessary or proper in the ordinary course of conduct of the Seller's business upon prior notice to Buyer and approved by Xxxxx, not to be unreasonably withheld or delayed. Nothing contained herein shall prevent Seller from acting to prevent loss of life, personal injury or Property damage in emergency situations, or prevent Seller from performing any act with respect to the Property which may be required by any applicable law, rule or governmental regulation. Until the time of Closing, Seller shall not enter into any leases with respect to any portion of the Property without Buyer's prior written consent.
7.Seller's Representations. Each Seller, as to itself and the portion of the Property owned by it represents and warrants to Buyer that:
a.Seller holds good and marketable fee simple title to the Property and there are no leases, contracts or other agreements with respect to the sale or use of the Property with any other party.
b.The Seller has full, unconditional power, authority and right to enter into this Contract, to perform, carry out and fulfill its obligations hereunder, and, in connection with the transaction contemplated hereby, to convey the Property to the Buyer as herein provided and no approval of any Court is a prerequisite thereto. Neither the execution of, nor the delivery of this Contract, nor the performance hereof by the Seller, will award, judgment or decree to which the Seller is or has been a party, or result in a breach of any term, condition or provision of or constitute a default under any contract, indenture, mortgage or deed of trust to which the Seller is a party or by which Seller is bound, or conflict with, violate or result in the breach of any law binding upon the Seller or result in the creation or imposition of any security interest, mortgage lien, change or encumbrance upon the Seller’s properties or assets. Except as contemplated in this Contract, no consent, authorization or approval of, or exemption by, any governmental or public body or authority that has not been obtained is required to enable the Seller to execute, deliver or perform this Contract. Seller is duly formed in its sale of formation and is validly existing in good standing.
x.Xxxxxx is not aware of nor has received any notice of any violations of any law, ordinance, order or requirement of any governmental body with respect to the Property.
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x.Xxxxxx has no knowledge of any pending or threatened condemnation proceeding, taking by eminent domain or special assessment with respect to the Property, Seller or any third party relating to or affecting the Property.
e.There are no liabilities of any kind (including Federal, state, county, municipal or other governmental or quasi-governmental law) which could or would affect or result in any claim, lien, judgment or other encumbrance upon or against the Property (which could not be fully satisfied as of the Closing Date) or the Buyer’s rights under this Contract except as state and local income tax returns in connection with the Property, and there are no claims for any deficiencies pending, or to the Seller’s knowledge, any basis for such a claim by any taxing authority.
f.The Seller will not create or suffer to exist any manner of lien or encumbrance upon or affecting title to the Property that would not be satisfied at Closing on the Closing Date.
g.The Property and the use thereof does not violate any Federal, state, county, municipal or other governmental or quasi-governmental law, ordinance code, order, regulation, moratorium or other requirement.
h.Title to the Property has not been acquired or derived by adverse or color of title possession, Xxxxxx Act proceedings or any act for sale of land for the non-payment of municipal taxes or assessments.
i.There are no recorded or unrecorded (i) leases, (ii) mortgages, or (iii) other contracts or undertakings affecting the ownership, operation, or development of the Property (except as set forth in this contract) which will survive closing on the Property, other than those documents of record to which the conveyance hereby contemplated is expressly made subject.
j.The Seller is not a “foreign person” as defined by the Internal Revenue Code and will provide such reasonable assurances of this fact as are required by the Buyer or its title company.
x.Xx default or breach exists under any covenant, condition, restriction, right-of-way or easement affecting the Property or any portion thereof, and there are no encroachments, boundary or setback violations and there are no forfeiture provisions in any covenants or restrictions of record.
l.The Property is not now and never has been used to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce, process or in any manner deal with hazardous materials and no hazardous materials are located on or under any of the Property. Seller has not received any notice or advice from any governmental body with regard to hazardous materials on, from or affecting the Property. The term "hazardous materials" as used in this Contract shall include, without limitation, gasoline, petroleum products, explosives, radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances, hazardous fertilizer, asbestos or any material containing asbestos or any other substance or material as may be defined as hazardous or toxic by any federal, state or local environmental law, ordinance, rule or regulation.
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x.Xx the best of Seller's knowledge, Seller has duly complied with, and the Property is in compliance with, the provisions of all Federal, state and local environmental, health and safety laws, codes and ordinances and all rules and regulations promulgated thereunder including regulations (hereinafter "Environmental Laws") that govern the use, generation, storage, transportation or disposal of toxic or hazardous substances or wastes (intended hereby and hereafter to include any and all such materials listed in any Federal, state or local law, code and ordinance and all rules and regulations promulgated thereunder as hazardous or potentially hazardous).
n.There are no underground storage tanks on the Property, and none have been removed.
o.This Contract has been duly authorized, executed and delivered by Seller, and is a legal, valid and binding obligation of Seller enforceable in accordance with its terms. All the documents executed by Xxxxxx which are to be delivered to Buyer at the Closing will be duly authorized, executed and delivered by Seller and will be legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms.
x.Xx a condition precedent to Xxxxx's obligation to purchase the Property, Seller at Seller's sole expense, shall obtain from the New Jersey Department of Environmental Protection, pursuant to the Industrial Site recovery Act, N.J.S.A. 13:1K-6 et seq. (formerly Environmental Clean-Up Responsibility Act "ECRA") and the regulations promulgated thereunder (hereinafter "ISRA") a letter of Non Applicability.
r.The Property is not assessed for municipal tax purposes under the Farm Land Assessment Act of 1964, or subject to roll back taxes pursuant to the Farm Land Assessment Act or any Amendment thereto.
The foregoing representations and warranties are true and correct as of the date hereof, shall be true and correct as of the closing date and shall survive the Closing. To the knowledge of each Seller, the foregoing representations made by the other Seller are true and complete in all respects.
8.Closing: Possession and Closing Procedure.
a.Unless this Contract has been terminated, the consummation of the transaction contemplated hereby ("Closing") shall take place December 31, 2019 or on such earlier date as agreed to by the parties (“Closing Date”). The Closing shall take place in the Princeton, New Jersey offices of Drinker Xxxxxx & Xxxxx LLP or shall be an “escrow” remote Closing. Buyer shall have the option of extending the Closing date hereunder by two (2) extension periods of thirty (30) days each by providing written notice to Seller.
b.Exclusive possession of the Property shall be delivered to Buyer at Closing, free of all tenancies, leases or claims of possession by any person or entity.
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x.Xx Closing, each Seller shall deliver to Buyer the following documents with respect to itself and the portion of the Property owned by it:
x.Xxxxxxx and Sale Deed with Covenants against Grantor Acts conveying the Property in fee simple, clear of all liens and encumbrances except as set forth herein.
ii.Copy of such documents and resolutions as may be acceptable to the Title Company to evidence the authority of the person signing the deed and other documents executed by Seller at closing and the power of Seller to convey the Property to Buyer in accordance with this Contract.
iv.Owner's affidavit acceptable to the Title Company without exception for possible mechanic's liens or other claims against the Property.
v.Closing statement executed by Seller setting forth the allocation of closing costs, purchase proceeds, etc.
vii.A Closing certification stating that all representations and warranties in this contract are true and correct as of the date of Closing.
viii.A general assignment executed by Xxxxxx in favor of Xxxxx assigning to Buyer all of Seller's right, title and interest in and to all permits, licenses, applications, and warranties relating to the Property.
ix.A Letter of non-applicability from the New Jersey Department of Environmental Protection with respect to ISRA, along with a copy of Seller's application for such letter.
x.Any other documents, instruments or Contracts required by the Title Company or reasonably necessary to effectuate the transaction contemplated by this Contract.
x.Xx Closing, Buyer shall deliver to Seller the balance of the Purchase Price.
9.Closing Costs and Prorations.Closing costs and prorations of this transaction shall be paid as follows:
x.Xxxxxx shall pay the cost of preparing the deed, recording fees, any costs for curing any title defects Seller is required to cure, and Xxxxxx's attorneys fees.
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x.Xxxxx shall pay the costs of recording the deed, expenses associated with any due diligence and inspection studies relating to the Property, all costs of approvals, permits and the like, and Xxxxx's attorneys fees.
c. Real estate transfer taxes and fees shall be paid by the Seller. Seller shall pay for any municipal assessment for work and improvements for which a municipal claim may be filed against the Property where an ordinance or resolution authorizing such work or improvement is adopted prior to the date of this Contract. Buyer shall pay for any municipal assessment for work and improvements for which such a claim may be filed where an ordinance or resolution authorizing such work or improvement is adopted on or after the date of this Contract. Buyer shall be responsible for any “mansion tax,” if applicable.
d.Real estate taxes shall be prorated as of the Closing Date in accordance with the fiscal year of the taxing authority. Seller shall pay all real estate taxes attributable to the Property up to but not including the Closing Date. If the real estate tax rate and assessments have not been set for the year in which the Closing occurs, then the proration of such taxes shall be based upon the rate and assessments for the preceding tax year, and such proration shall be adjusted in cash between Seller and Buyer upon presentation of written evidence that the actual taxes paid for the year in which the Closing occurs differ from the amounts used at Closing.
e.Seller shall pay all sewer, water and other utility charges and other operating expenses attributable to the Property up to and including the Closing Date and Buyer shall pay all utility charges and other operating expenses attributable to the Property on or after the Closing Date.
10.Condition of Property. On the Closing date the Property shall be in substantially the same condition as on the day of this Contract, reasonable wear and tear excepted. Except as specifically noted in this Contract, if any material portion of the Property or access thereto shall be taken by public authority, or if Seller receives notice of any such proposed condemnation or taking, or if the Property is otherwise materially damaged prior to the Closing date, Seller shall promptly give written notice to Buyer of such occurrence and Buyer shall have the option of either terminating this Contract upon notice to Seller or consummating the sale of the Property. If Buyer chooses to consummate the sale of the Property, Buyer shall pay the full purchase price and Seller will assign to Buyer all claims and rights of recovery as a result of such taking or damage to the Property.
11.Real Estate Commission. Buyer and Seller represent and warrant each to the other that neither has entered into any Contract or taken any other action which would result in a real estate brokerage commission, finder's fee or other similar charge payable on account of the sale of the Property. Each party agrees to indemnify and hold harmless the other against any other costs for such a charge arising out of the actions of the indemnifying party. Seller and Xxxxx agree that it is their specific intention that no broker shall be a party to or a third party beneficiary of this Contract; and further that the consent of a broker shall not be necessary to any Contract, amendment, or document with respect to the transaction contemplated by this Contract.
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12.Notices. Any notices required or permitted under this Contract shall be in writing and shall be (i) mailed, postage prepaid, by registered or certified mail, return receipt requested, (ii) deposited with a nationally recognized overnight delivery service, e.g., Federal Express, Purolator, Express Mail, etc., (iii) personally delivered, addressed to the respective parties at the respective addresses set forth below or (iv) sent by email to the email address set forth below:
To Buyer:HCo Property Cape May LLC
0000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Atlanta, GA 30339
Attention: Xxxxxx Xxxx
Email: xxxxxx.xxxx@xxxxxxxxxx.xxx
With a copy to:Xxxxxxx Xxxxxxxx, Esquire
Drinker Xxxxxx & Xxxxx LLP
000 Xxxxxxx Xxxx Xxxx
P.O. Box 627
Princeton, NJ 08542-0627
Email: xxxxxxx.xxxxxxxx@xxx.xxx
To Seller:Xxxx Xxxxx Xxxxx
000 Xxxxxx Xxxxxx
West Cape May, NJ 08204
Attention: Xxxx Xxxxx Xxxxx
Email: xxxx@xxxxxxxxxxxxxxxx.xxx
To Seller:Xxxxxx Xxxxxx
000 Xxxxxx Xxxxxx
West Cape May, NJ 08204
Attention: Xxxxxx Xxxxxx
Email: xxxxxx.xxxxxx00@xxxxx.xxx
Any notice shall be deemed to have been given on the date when received and receipted for, if sent physically by other than registered or certified mail, or, if sent by registered or certified mail, on the earlier of (a) the date set forth on the return receipt, (b) the date of delivery as shown on the Post Office records or (c) the date delivery was refused as shown on the Post Office records. Any notice sent by email shall be deemed delivered on the date of actual receipt if received by 5:00 p.m. local time, or if received after 5 p.m. local time, on the next following business day.
13.Default, Buyer Remedies. If any Seller fails to perform any of its material obligations or Contracts contained herein and if Buyer is not then in default of any of its obligations and Contracts contained herein, then Buyer may pursue all of the following remedies: either (a) to terminate this Contract by giving written notice of termination and the reasons therefor to Seller, in which event neither Seller nor Buyer shall have any further obligations or liabilities one to the other hereunder and the Deposit shall be returned to Buyer, or (b) Buyer may proceed to Closing for conveyance of the Property, pursuant to which Seller
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shall convey to Buyer such title to the Property as Seller then holds on the date of Closing consistent with the terms of this Contract and Buyer shall take the Property in the physical condition as then exists consistent with the terms of this Contract. In the event of a willful breach by any Seller, in addition to a return of the Deposit, Buyer shall be entitled to specific performance or to recover from such Seller its actual damages equal to the costs actually incurred in connection with the negotiation of this Contract, any title costs, survey charges, and consulting fees incurred in connection with its due diligence review.
14.Default, Seller Remedies. If Buyer fails to perform or breaches any of its obligations or Contracts required under this Contract, or fails to close the transaction (except for
in the event of a permitted termination of this Contract in accordance with the provisions hereof), then both Xxxx Xxxxx Xxxxx and Xxxxxx Xxxxxx may unanimously elect as Xxxxxx's sole remedy option hereunder to terminate this Contract and to receive the Deposit and Buyer shall have no further obligations or liabilities one to the other hereunder. Seller's election to receive the Deposit as “liquidated damages” is agreed to by the parties due to the difficulty, inconvenience and uncertainty of ascertaining actual damages for such breach by Xxxxx and Xxxxx agrees that the same is a reasonable and fair estimate of damages. Seller’s remedy hereunder may only be exercised unanimously by Xxxx Xxxxx Xxxxx and Xxxxxx Xxxxxx.
15.Covenants of Seller.Each Seller as to itself and the portion of the property owned by it, hereby covenants with Xxxxx, as follows:
a.After the date hereof and prior to the Closing, no part of the Property, or any interest therein, will be sold or otherwise transferred without Buyer's consent.
b.Until the Closing, Seller shall keep the Property insured in the manner insured as of the date of this Contract.
c.Until the Closing, Seller shall operate and maintain the Property in the manner being operated and maintained on the date of this Contract.
d.During the pendency of this Contract, Seller will not list the Property with any broker or otherwise solicit or make or accept any offers to sell the Property, engage in any discussions or negotiations with any third party with respect to the sale or other disposition of the Property, or enter into any contract or Contracts (whether binding or not) regarding any disposition of the Property.
16.Risk of Loss. Risk of loss shall be borne by the Seller until the Closing. If the Property is damaged by fire, vandalism, storm, flood, or any other casualty between now and the Closing, the parties shall obtain an estimate, from an established contractor of their choice, of the cost of repairing the damage. If the estimated cost is less than 5% of the Purchase Price, the Seller shall repair the damage before the Closing at the Seller's expense. If the estimated cost is more than 5% of the Purchase Price, the Buyer may (a) terminate this Contract,
require the Seller to repair the damage before the Closing, or (c) proceed with the purchase with an assignment of the insurance claim, if any, without abatement of the Purchase Price. If this Contract is terminated consistent with this paragraph, the Deposit will be returned to Buyer and neither party shall have any further liability to the other.
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17.Successors in Interest. All provisions of this Contract are binding upon and shall inure to the benefit of, and are enforceable by and against, the heirs, executors, administrators, successors and assigns of each party hereto.
18.Governing Law. The terms and conditions of this Contract shall be construed and controlled in accordance with the laws of the State of New Jersey, with jurisdiction and venue of any litigation placed in Cape May, New Jersey.
19.Entire Contract. This Contract contains the entire Contract between the parties with respect to the subject matter hereof and no statement or representation of any party, their agents or employees, shall form any part hereof or be binding upon the other party. This Contract shall not be changed or modified except by written instrument signed by the parties hereto.
20.Captions; Gender. Captions used in this Contract are for convenience of reference only and shall not affect the construction of any provision hereof. Whenever used, the singular shall include the plural, the plural shall include the singular and gender shall include all genders.
21.Effective Date. The term "effective date" or "date of this Contract" shall mean the date the last of either Seller or Buyer has executed this Contract.
22.Counterparts: PDF Execution. This Contract may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute but one and the same instrument. Delivery of an executed counterpart of this Contract by PDF shall be equally as effective as delivery of a manually executed counterpart of this Contract. Any party delivering an executed counterpart of this Contract by Xxxxxxxxxxxxx also shall deliver a manually executed counterpart of this Contract, but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability or binding effect of this Contract.
23.Surviving Clauses. Should any paragraph or sub-paragraph of this Contract or any provision, term or condition contained herein be finally declared illegal, invalid or unenforceable for any reason by a court of competent jurisdiction, that determination shall not effect the legality, validity and enforceability of the remaining provisions, terms and conditions of this Contract, and same shall remain in full force and effect. Any provision of this Contract, which by its nature and effect is required to be kept or performed after closing of title, shall survive passage of title and shall bind and benefit the parties hereto.
00.Xx Affiliation. Notwithstanding anything to the contrary contained herein, this Contract shall not be deemed or construed to make the parties hereto partners or joint venturers, or to render either party liable for any of the debts or obligations of the other, it being the intention of the parties to merely create the relationship of Seller and Buyer with respect to the Property to be conveyed as contemplated hereby.
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25.Timing. In the event that any of the dates specified in this Contract shall fall on a Saturday, a Sunday; or a holiday, then the date of such action shall be deemed to be extended to the next business day.
00.Xxxxxxxxxxxx. The language in all parts of this Contract shall be in all cases construed simply according to its fair meaning and not strictly for or against any of the parties hereto. Paragraph headings of this Contract are solely for convenience of reference and shall not govern the interpretation of any of the provisions of this Contract. References to paragraphs are paragraphs of this Contract, unless otherwise specifically provided.
27.Assignment. Buyer may assign this Contract without prior written consent of Seller upon the following conditions: (i) the assignee of Buyer is more than 50% owned or controlled by Xxxxx or Xxxxxx Xxxx, (ii) the assignee of Xxxxx agrees to assume all obligations of Buyer hereunder, and (iii) a copy of the executed Assignment and Assumption Agreement is delivered to Seller at or prior to Closing.
288.Joint and Several. To the extent the Seller or Buyer hereunder are comprised of more than one person or entity, the liability and obligations of all such parties comprising Seller or Buyer, as applicable, shall be joint and several. This Section 28 shall survive Closing.
29.Bulk Sale Indemnification. The parties acknowledge that the provisions of the New Jersey Sales and Use Tax Act, N.J.S.A. 54:32B-1 et seq. (“Bulk Sales Act”), are applicable to the sale of the Property by Seller. Buyer shall submit the required Notification of Sale, Transfer or Assignment in Bulk (Form C-9600) (“Bulk Sale Notice”) and all required attachments to the New Jersey Department of the Treasury, Division of Taxation, Bulk Sales Section (“Section”) not later than fifteen (15) business days prior to Closing. Such filing shall be made by Buyer via overnight delivery to the address specified by the Section for such filing by overnight delivery. Seller shall cooperate with the Buyer in connection with such submission by supplying Buyer with information necessary to file the Bulk Sales Notice no later than thirty (30) days prior to Closing. Buyer shall have received from the Section either a letter stating that a possible claim for New Jersey state taxes exists and setting forth in said letter the amount of the State's claim and the amount of money to be held in escrow at Closing (an “Escrow Letter”), or a clearance letter stating that the bulk sale case has been closed and no money is to be placed in escrow. Should the Section provide an Escrow Letter prior to Closing, Seller shall post an escrow in the amount required by the Section at Closing with the Escrow Agent or the Title Company. The foregoing notwithstanding, in the event Buyer timely files such required notice to the Section and the Section does not notify Buyer in writing on or before Closing of any claim by the State, Seller shall escrow at Closing an amount equal to the amount shown on line 12 (the estimated tax on gain due) of the Asset Transfer Tax Declaration prepared by Seller.
[SIGNATURES ON NEXT PAGE]
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JOINDER BY ESCROW AGENT
The undersigned, Drinker Xxxxxx & Xxxxx LLP, as Escrow Agent under the Contract for Sale and Purchase of Real Estate between Xxxx Xxxxx Xxxxx and Xxxxxx Xxxxxx ("Seller") and HCo Property Cape May LLC ("Buyer") to which this Joinder is attached, signs below to evidence its Contract to hold and disburse the Deposit paid by Buyer in accordance with the terms of such Contract, all provided that the parties acknowledge and agree the following terms and conditions shall apply to the rights, obligations and liabilities of the Escrow Agent in connection with the Contract:
1.Escrow Agent named herein will be liable as a depository only and will not be responsible for the sufficiency or accuracy of the form, execution or validity of any letter or document delivered to the Escrow Agent. The Escrow Agent shall not be liable for any act or omission done in good faith or for any claim, demand, loss or damage made or suffered by any party to this Contract, other than as may arise through the willful misconduct or gross negligence of the Escrow Agent. The Escrow Agent is expressly authorized to rely on any document believed by the Escrow Agent to be authentic in making any delivery of funds held hereunder.
2.Seller and Xxxxx agree to indemnify and hold the Escrow Agent harmless from and against any and all expense, damage or cost, including reasonable attorney's fees, incurred by the Escrow Agent and arising from the good faith performance of its duties hereunder.
3.If the Escrow Agent is in doubt as to its duties hereunder or in the event of a dispute between the parties as to the disposition of any funds held by Escrow Agent, the Escrow Agent may, in its sole discretion, continue to hold the funds in escrow until all parties mutually agree to the disposition thereof, or it may deposit all monies held pursuant to this Contract with the Clerk of the Superior Court of Cape May County in which the Property is located and, upon notifying all parties of such action, all liability on the part of the Escrow Agent shall terminate. In the event of any suit between the parties wherein the Escrow Agent is made a party by virtue of acting as Xxxxxx Agent hereunder, or in the event of any suit where an escrow agent interpleads the monies held hereunder, the Escrow Agent shall be entitled to recover reasonable attorney's fees and costs incurred, said fees and costs to be charged and assessed as court costs in favor of the Escrow Agent against both Seller and Buyer, but as between Seller and Buyer, the prevailing party shall be entitled to recover the same from the other party.
4.Seller acknowledges that Drinker Xxxxxx & Xxxxx LLP is counsel to Buyer in connection with the Transaction described in the Contract of Sale and this Contract, and anything to the contrary contained herein notwithstanding, it is expressly understood and agreed that Drinker Xxxxxx & Xxxxx LLP may continue to represent Buyer as Buyer's counsel in any dispute between Buyer and Seller relating to the Contract of Sale or this Contract, including any dispute relating to the Escrow Fund, while continuing to act as Escrow Agent hereunder. Nothing contained herein, nor the execution or delivery of this Contract by Escrow Agent, shall in any way affect or require the termination of such attorney-client relationship, and Seller hereby specifically consents to the continued representation of Buyer by Drinker Xxxxxx & Xxxxx LLP in
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Exhibit A-1
Parcel 1 Description
[to be attached]
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Exhibit A-2
Parcel 2 Description
[to be attached]
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TECHNICAL SERVICES AND PRE-OPENING AGREEMENT
THIS CONSULTING AGREEMENT (this “Agreement”) is made and entered into as of 4 February, 2018 (the “Effective Date”), by and between the HCO PROPERTY CAPE MAY LLC (the “Owner”), and VALOR HOSPITALITY PARTNERS, LLC, a Georgia limited liability company (“Consultant”).
W I T N E S S E T H:
WHEREAS, Owner and Consultant desire to enter into an agreement containing the terms and conditions pursuant to which Owner will engage Consultant as a consultant to Owner from and after the date of this Agreement for purposes of assisting Owner in the construction and completion prior to operation of the (the “Hotel”) and;
WHEREAS, Owner and Consultant agree that this Agreement Supersedes any prior executed agreement between Owner and Consultant and;
WHEREAS, Owner and Consultant desire to enter into this Agreement to reflect the terms agreed to by Owner and Consultant as more fully set forth below.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants, agreements, representations and warranties contained herein, and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. Duties. During the Term (as defined below in Section 2), Owner hereby agrees to engage Consultant to perform the duties, responsibilities and services set forth on Exhibit A attached hereto (the “Duties and Responsibilities”) in a diligent and efficient manner. Consultant agrees to serve in such capacity and to perform the Duties and Responsibilities consistent with Consultant’s role as a consultant. Consultant also agrees to conduct all business in a lawful manner.
Section 2. Term. The term of this Agreement shall be for a period commencing on the Effective Date and ending upon the earlier to occur of (a) Owner and Consultant executing the Management Agreement (as defined below), or (b) the fifth (5th) year anniversary of the date of this Agreement (the “Term”).
3.1Compensation. Owner agrees to pay Consultant $120,000 as a total for the Technical Services and Information Technology Services described in the Duties and Responsibilities listed on Exhibit A. A portion of this payment may be taken and applied as Voting Shares in HCo Cape May LLC as outlined in Section 3.5. Payments for Pre-opening Management Services will occur from break of escrow for the HCo Cape May LLC based on the SEC Offering Circular.
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3.2Owner further agrees to pay Consultant an additional $150,000.00 for the Pre-opening Management Services described in the Duties and Responsibilities listed on Exhibit A portion of this payment may be taken and applied as Voting Shares in HCo Cape May LLC as outlined in Section 3.5. Payments for Pre-opening Management Services will occur from break of escrow for the HCo Cape May LLC based on the SEC Offering Circular.
3.3Reimbursement of Expenses. The Owner shall pay or reimburse Consultant for all reasonable and necessary out-of-pocket expenses actually incurred or paid by Consultant in connection with the performance of the Duties and Responsibilities. The expenses which Consultant may incur shall be ordinary and necessary expenses incurred in a trade or business as defined by the United States Internal Revenue Code and shall include, without limitation, all costs of hiring, maintaining and training employees and accountants, travel to and from the Hotel, meals of employees while traveling for the benefit of the Hotel, as well as office expenses incurred in connection with providing or conducting the Duties and Responsibilities but shall exclude any office rent and other overhead or expenses of Consultant associated with its office. Consultant shall provide an itemized account of expenditures and appropriate receipts to Owner, in accordance with policies established by Owner, when requesting reimbursement.
3.4Cessation of Compensation. All compensation due to Consultant by Owner and all other benefits provided to Consultant pursuant to this Section 3 or otherwise from time to time shall immediately cease to accrue upon any termination of Consultant’s engagement as a consultant with Owner upon the expiration of the Term.
3.5Payment of Compensation. Consultant will have $150,000 worth of Voting Shares in HCo Cape May LLC. The amount of funds required to have the $150,000 investment in HCo Cape May LLC Voting Shares will be applied against Compensation payable under Section 3 of this Agreement.
Section 4.Termination.
4.1Termination by Owner for Cause. Notwithstanding anything contained herein to the contrary, Owner may terminate this Agreement immediately at any time, without notice, upon the occurrence of a “Cause” event. The Owner shall not be obligated to pay any compensation to Consultant after the effective date of the termination. For purposes of this Section 4.1, the term “Cause” shall mean any one or more of the following:
(a)Any officer of Consultant staffed to the Hotel of Consultant is convicted of, or pleads no contest to, a felony, any crime involving fraud or moral turpitude, or a misdemeanor where imprisonment is imposed;
(b)Consultant or any member of Consultant commits any act of theft, fraud, dishonesty or falsification of any employment or business records of Owner or any of its affiliates;
(c)Consultant or any member of Consultant engages in any misconduct in connection with the performance of any of the Duties and Responsibilities,
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including, without limitation, misappropriation of funds or property of Owner or any of its affiliates, or securing or attempting to secure personal profit in connection with any transaction entered into on behalf of Owner;
(d)Consultant or any member of Consultant is cited and found guilty for violation of any law or regulations (excluding traffic or parking ordinances and rules) to which Owner or any of its affiliates is subject;
(e)Consultant or any member of Consultant deliberately destroys any property belonging to Owner or any of its affiliates; or
(f)a material breach by Consultant of any provision of this Agreement which is not cured within 30 days written notice by Owner, provided that such breach is capable of being cured without material harm to Owner, otherwise the notice and cure period shall not apply.
For purposes of this Agreement, the term “Cause” shall not include any act or failure to act on Consultant’s part if done or omitted to be done in demonstrable good faith and with the reasonable belief that the act or omission was in the best interest of Owner or any of its affiliates or pursuant to an express policy of Owner at the time of such act or omission. In the event Owner wishes to investigate any alleged misconduct, Owner may, after discussing the proposal of suspension with Consultant and considering Consultant’s views, suspend Consultant while the investigation is carried out.
Upon the occurrence of any event of Cause and in the event Consultant is entitled to notice and opportunity to cure the same, Owner shall not be required to provide notice and a right to cure to Consultant for any subsequent event of Cause of any kind during that calendar year.
4.2Obligations of Consultant upon Termination. Upon the termination of this Agreement for any reason, or at any other time upon the request of Owner, Consultant shall immediately return to Owner all information, material or property including without limitation computer disks, printouts, manuals, reports, letters, memos, plans, diagrams, security cards, keys, and laptop computers either belonging to or the responsibility of Owner and all copies of that material, which are in Consultant’s possession or under Consultant’s control.
Section 5.Restrictive Covenants.
5.1Return of Owner Property. Upon any voluntary or involuntary termination of this Agreement and at any time upon request of Owner, Consultant agrees to immediately return to Owner all property of Owner (including but not limited to all documents, electronic files, records, computer disks or other tangible or intangible things that may or may not relate to or otherwise comprise Confidential Information or Trade Secrets (each as defined by applicable law)) that Consultant created, used, possessed or maintained while engaged by Owner from whatever source and whenever created, including all reproductions or excerpts thereof.
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5.2Non-Piracy of Employees and Independent Contractors. Throughout the Term of this Agreement and for a period of one (1) year following the date of any voluntary or involuntary termination of this Agreement, Consultant covenants and agrees that Consultant shall not, directly or indirectly: (i) solicit for employment, recruit or hire (or attempt to solicit, recruit or hire) or otherwise assist anyone in soliciting for employment, recruiting or hiring any employee or independent contractor of Owner who was employed by or performed for Owner during the Term and with whom Consultant had Material Contact; or (ii) otherwise encourage, solicit, or support any such employee or independent contractor to terminate his or her employment, contractual or business relationship with Owner.
For purposes of this Section 5.22, “Material Contact” shall exist if Consultant (a) supervised the person or was supervised by the person; or (b) worked with or interacted with the person or entity with regard to Owner’s business.
Section 6. Remedies. In the event of any breach of this Agreement by Consultant or Owner, either party shall have all rights and remedies available at law or in equity. Consultant acknowledges that Owner’s liability hereunder is limited by the doctrine of sovereign immunity but only to the extent provided at law and Owner waives such doctrine to the maximum extent permitted by statute or case law of the State of New Jersey or federal laws of the United States of America.
Section 7. Indemnity. Owner hereby agrees to indemnify and hold harmless Consultant, and its employees, managers, members, officers, directors, agents, contractors, representatives, successors and assigns, from any and all charges, complaints, claims, liabilities, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts, and expenses including attorneys’ fees and costs actually incurred (collectively, “Losses”), of any nature whatsoever, arising from Consultant’s performance of the Duties and Responsibilities, except for any Losses determined by a Court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of Consultant.
Section 0.Xxxxxxxxxx Agreement. Upon the earlier to occur of (i) substantial completion of construction of the Hotel signified by temporary certificate of occupancy issuance by the applicable local governmental authority in Cape May County, NJ, (or) execution of the management agreement (discussed immediately below), Owner and Consultant hereby agree to enter into the management agreement for the Hotel which shall substantially comply with the summary of terms for such agreement attached hereto as Exhibit B.
Section 9.Severability. If any of the provision this Agreement is found by a court to be invalid or unenforceable for any reason, including, without limitation, the scope or the duration thereof, such provision shall be construed and/or reduced or reformulated by the court (or by the parties, if the court refuses to do so) in such a way as to make it valid and enforceable to the maximum extent possible.
Section 10.Miscellaneous Provisions.
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10.1Headings. The headings are intended only for convenience in finding the subject matter and do not constitute part of the text of this Agreement and shall not be considered in the interpretation of this Agreement.
10.2Assignment; Binding Effect. The Owner may assign this Agreement and the obligations of Consultant hereunder without the consent of Consultant. Due to the personal service nature of Consultant’s obligations, Consultant may not assign this Agreement, except the assignment of any right to receive compensation or other payment. Subject to the restrictions in this Section, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their respective successors, assigns, and legal representatives.
10.3Legality and Severability. The parties hereto acknowledge and agree that the provisions contained in this Agreement are reasonable and are not known or believed to be in violation of any federal, state, or local law, rule, or regulation. In the event a court of competent jurisdiction finds any provision (or subpart thereof) to be illegal or unenforceable, Owner and Consultant agree that it shall be severed and the remaining clauses and Sections enforced in accordance with the tenor of this Agreement. Any illegal or unenforceable provision (or subpart thereof), or any modification by any court, shall not affect the remainder of this Agreement, which shall continue at all times to be valid and enforceable.
10.4Entire Agreement; This Agreement, together with the Management Agreement, including the exhibits, documents and instruments referred to herein or therein and any other instruments, documents or agreements executed or delivered pursuant hereto or thereto, constitutes the entire agreement, and supersedes all other prior oral or written agreements, promises, representations, warranties, or inducements among the parties with respect to the subject matter hereof. This Agreement can only be modified by a writing signed by both Owner and Consultant.
10.5Governing Law; Forum Selection. This Agreement shall be governed by and construed in accordance with the laws of the New Jersey without regard its conflicts of law provisions. In the event of any litigation arising out of or relating to this Agreement, the parties expressly agree to the exclusive jurisdiction and venue in the appropriate state or federal court located in New Jersey, and hereby waive any objections or defenses to such forum and venue selection.
10.6Review and Voluntariness of Agreement. Consultant acknowledges that (i) Consultant has had an opportunity to read, review, and consider the provisions of this Agreement; and (ii) Consultant has voluntarily entered into this Agreement.
10.7Waiver of Rights or Remedies. The failure or delay on the part of either party in insisting on strict compliance with the terms of this Agreement or to enforce at any time any of the provisions of this Agreement shall not operate or be construed as a waiver thereof or of any subsequent breach of this Agreement by the other party, nor in any way shall it affect the validity of this Agreement or any part thereof or the right to enforce thereafter each and every provision and to exercise each and every such right and remedy. Nothing shall constitute or have the effect of a waiver except an instrument in writing signed by both the Consultant and Owner,
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or their duly authorized agents or representatives, which expressly, and not impliedly, waives a right or rights under this Agreement.
10.8No Conflicting Obligations. Consultant acknowledges and represents that Consultant’s execution of this Agreement and performance of Consultant’s Duties and Responsibilities for Owner will not cause any breach, default, or violation of any other non- disclosure, confidentiality, non-competition, or other agreement to which Consultant may be a party or otherwise bound. Moreover, Consultant agrees that Consultant will not use in the performance of such Duties and Responsibilities for Owner or otherwise disclose to Owner any
Trade Secrets or Confidential Information of any person or entity (including any former employer) if and to the extent that such use or disclosure may cause a breach or violation of any obligation or duty owed to such employer, xxxxxx, or entity under any agreement or applicable law.
10.9Adequate Consideration. Consultant acknowledges that the consideration furnished by Owner in this Agreement, the sufficiency and adequacy of which is acknowledged, is in addition to anything of value to which Consultant is already entitled.
10.10Notices. All notices, requests, consents and other communications shall be in writing and be deemed given when (i) delivered personally; (ii) received if mailed by first class registered or certified mail, postage prepaid; or (iii) delivered to the applicable party’s email inbox. Notices to Owner or the Consultant shall be addressed as set forth underneath their signatures below, or to such other address or addresses as may have been furnished by such party in writing to the other.
10.11Counterparts; Facsimile Signatures. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. Signatures transmitted by facsimile, PDF or other electronic means shall be deemed to be original signatures for all purposes.
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EXHIBIT A
DUTIES AND RESPONSIBILITIES
Consultant takes the lead specifically on everything that relates to the hotel, including being Owner’s lead with respect to Owner’s budgets for the Hotel for Pre-Opening, Technical Services and Information Technology, which have the following budgets:
(a)Pre-Opening: $TBD;
(b)Information Technology: $TBD;
(c)Technical Services (includes, without limitation, operating supplies and equipment procuration (in conjunction with Xxxx Xxxxxx, Owner’s primary (suggested) procuring agent for such supplied and equipment): $TBD.
Technical Services. Including but not limited to:
Create, then develop theme’s and concepts for hotel services, specifically all Food & Beverage offerings (restaurant /s, bar / s, rooftop’s, Deli’s, Café’s, Lounges etc.) as well as spa, fitness, libraries, lounges etc.
Develop property assessment overview including, full list of all space requirements, operational flows, services to be offered and detailed requirements for FF&E, OS&E and IT;
Determine scope of requirements to operate as an [brand] hotel property and write a highly-detailed business plan for the asset;
Determine vendor relationships, review necessary contracts and operating licenses, City and State ordinances, permitting, zoning and research availability of public incentives;
Assisting in developing a full and detailed project budget specifically as it relates to concluding an absolute ‘all-in’ project budget, outside of pure construction;
Address specific needs and work with ownership to assist in design and planning of any facilities (non-hotel) that may be part of further development and calls for integration with retail and / or residential, not thought to be the case for this project;
Develop detailed pro-formas on created plans and model financial returns;
Develop a detailed pre-opening budget plan;
Work closely with brand to ensure all aspects of the license agreement are adhered to as well as any and all design directives and brand standards dictated;
Work closely with GC and all subcontractors in completion of pre- determined development scope;
Inspect GC completed work for quality and provide defects to be corrected.
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Work with preferred vendors and brand in development of all information technology systems. System will be brand specified & built and developed specifically for the project;
Engage procurement companies and coordinate all FFE, OSE and IT pre- opening purchases and related efforts;
Work with Interior Designer directly in ensuring all scope items are detailed and accurate and executed on time and on budget;
Manage ALL technical aspects e.g. low voltage, phone systems, POS, PMS, MATV, Environmental systems, Digital Key, Accounting systems, all software requirements, digital music, all interfaces for entire property and room power requirements, all equipment requirements of the project to ensure a world-class product delivery;
Work with all subs throughout each planning stage of the project to ensure compliance with all the previous standards written and agreed upon in the business plan;
Work with local town, county and state officials and services such as the fire department to ensure compliance with local ordinances;
Manage all project accounting.
Pre-Opening Services. Including but not limited to:
Develop and manage pre-opening plans and budget;
Develop and manage full pre-opening operations task list;
Interview and hire initial Executive team members, specifically the General Manager, Sales and Marketing Director, and Executive Chef, to execute on a detailed and specific critical path task list plus intensive pre- opening sales, marketing and PR initiatives;
Develop and manage operating plans, incl. staffing models, sales and marketing plan, PR, etc.;
Engage and work with a PR Agency to formulate all collateral and advertising, and social media plans, etc.;
Recruitment and training of all service associates and operating personnel;
Develop and manage all pricing policies and strategies;
Develop and manage all systems and procedures and all corresponding training programs;
Develop, lead and manage all Sales, Marketing and PR strategies;
Develop and lead all brand initiatives and guidelines;
Develop and manage the identification and scope of all employee benefits programs;
Manage all pre-employment screening;
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Ensure all required brand training compliance;
Execute pre-opening sales and marketing efforts;
Obtain all necessary operating licenses;
Finalize any vendor agreements;
Coordinate standards written and created into a detailed pre-opening effort, SOP’s, Policies and Procedures, Checklists and ongoing training materials;
Train all associates;
Set-up accounting systems and load data / budgets;
Set-up all IT systems MATV/PBX/Guest HSIA/Sales system/Audio/INTERFACES;
Complete data base build for PMS system;
Complete content build for brand website;
Obtain renderings for brand website prior to opening;
Conduct all life safety training;
Engage photography services for openingand postfor website photography;
Work with Valor employees to create a task team to open the property on- time and with all systems fully operational;
Conduct a ‘soft-opening’ and ‘dry run’ to ensure all systems and procedures operational and test associates; and
Official opening ceremony and open for trading.
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EXHIBIT B
MANAGEMENT AGREEMENT TERMS
Owner and Valor (“Operator”), will enter into a management agreement (the “Management Agreement”) for the Hotel based on Valor’s standard form pursuant to which Valor will operate the Hotel. The Management Agreement shall contain, among other things, the following terms:
1.Term: The initial term of the Management Agreement will be ten (10) fiscal years (the “Initial Term”). The Management Agreement will extend automatically for two (2), five (5) year renewal terms beyond the Initial Term unless Manager is in default of the Management Agreement. The Initial Term and any renewal terms will be referred to herein as the “Term”.
2.Base Management Fee: The Base Management Fee (the “Base Fee”) shall be the greater of 3.0% of Gross Revenue of the Project and $90,000 per year of operation, paid monthly as an operating cost.
3.Incentive Management Fee: Manager shall not be paid an Incentive Management Fee (“IMF”) due to being a voting member in HCo Cape May LLC.
4.Annual Contributions to the FF&E Reserve: The FF&E Reserve will be 4.0% of Gross Revenue throughout the Term except for the FF&E Reserve will ramp starting at 2.0% in Year 1, 3.0% in Year 2, and 4.0% thereafter.
5.Financing of the Hotels: Owner shall not encumber the Hotels with any mortgage or pledge/mezzanine indebtedness nor any refinancing thereof, unless and until Owner, Manager, and the applicable lender have entered into a mutually acceptable collateral assignment of the Management Agreement.
Manager and any mortgagee and any pledgee/mezzanine lender shall execute and record among the appropriate land records a subordination, non-disturbance and attornment agreement, satisfactory to both parties.
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