Exhibit 10.1
Form of Escrow Agreement between CNL Hospitality Fund, Inc.
and SouthTrust Asset Management Company of Florida, N.A.
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement") is dated this ___ day of
_____________, 1999, by and among CNL HOSPITALITY PROPERTIES, INC., a Maryland
corporation (the "Company"), CNL SECURITIES CORP., a Florida corporation (the
"Managing Dealer"), and SOUTHTRUST ASSET MANAGEMENT COMPANY OF FLORIDA, N.A.
(the "Escrow Agent"). This Agreement shall be effective as of the effective date
of the Company's Registration Statement filed with the Securities and Exchange
Commission (the "Effective Date").
WHEREAS, the Company proposes to offer and sell, on a best-efforts basis
through the Managing Dealer and selected broker-dealers registered with the
National Association of Securities Dealers, Inc. (the Managing Dealer and such
selected broker-dealers are hereinafter referred to collectively as the
"Soliciting Dealers") up to 27,500,000 shares of common stock of the Company
(the "Shares") to investors at $10.00 per Share pursuant to a registration
statement (the "Registration Statement") filed with the Securities and Exchange
Commission; and
WHEREAS, the Company and the Managing Dealer desire to establish an escrow
in which funds received from subscribers will be deposited and the Escrow Agent
is willing to serve as Escrow Agent upon the terms and conditions herein set
forth;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, the parties covenant and agree as follows.
1. Establishment of Escrow Accounts. On or prior to the Effective Date,
the Company and the Managing Dealer shall establish an interest-bearing escrow
account with the Escrow Agent, which escrow account shall be entitled "ESCROW
ACCOUNT FOR THE BENEFIT OF SUBSCRIBERS FOR COMMON STOCK OF CNL HOSPITALITY
PROPERTIES, INC." (the "Escrow Account"). All monies deposited in the Escrow
Account are hereinafter referred to as the "Escrowed Funds." The Managing Dealer
will, and will cause selected broker-dealers acting as Soliciting Dealers to,
instruct subscribers to make checks for subscriptions payable to either the
Escrow Agent or the Company. The Managing Dealer may authorize certain
Soliciting Dealers which are "$250,000 broker-dealers" to instruct their
customers to make their checks for Shares subscribed for payable directly to the
Soliciting Dealer. In such case, the Soliciting Dealer will collect the proceeds
of the subscribers' checks and issue a check made payable to the order of the
Escrow Agent for the aggregate amount of the subscription proceeds.
2. Deposits into the Escrow Account. The Managing Dealer will promptly
deliver all monies received from subscribers for the payment of Shares to the
Escrow Agent for deposit in the Escrow Account.
3. Collection Procedure.
(a) The Escrow Agent is hereby authorized to forward each check for
collection and, upon collection of the proceeds of each check, to deposit
the collected proceeds in the Escrow Account or, alternatively, the Escrow
Agent may telephone the bank on which the check is drawn to confirm that
the check has been paid.
(b) Any check returned unpaid to the Escrow Agent shall be returned
to the Soliciting Dealer that submitted the check. In such cases the
Escrow Agent will promptly notify the Company of such return.
(c) In the event that (i) the Company rejects any subscription for
Shares or (ii) an investor who has telephonically or orally subscribed for
Shares properly withdraws such subscription within fifteen (15) days from
the date written confirmation has been mailed to the subscriber, and, in
either such event, the Escrow Agent has already collected funds for such
subscription, the Escrow Agent shall promptly issue a refund check to the
drawer of the check submitted by or on behalf of the rejected or
withdrawing subscriber. If either of the events specified in the clauses
(i) or (ii) of the preceding sentence occur and, in either such event, the
Escrow Agent has not yet collected funds for such subscription but has
submitted the check relating to such subscription for collection, the
Escrow Agent shall promptly issue a check in the amount of such check to
the rejected or withdrawing subscriber after the Escrow Agent has cleared
such funds. If the Escrow Agent has not yet submitted the check relating
to the subscription of the rejected or withdrawing subscriber, the Escrow
Agent shall promptly remit such check directly to the drawer of the check
submitted by or on behalf of the subscriber.
4. Investment of Escrowed Funds. The Escrow Agent, immediately upon
receipt of each check remitted to it, shall deposit such check in
interest-bearing savings accounts, in short-term certificates of deposit issued
by a bank, or in other short-term securities directly or indirectly issued or
guaranteed by the United States government, all as directed by the Company.
Interest and dividends earned on such investments shall be similarly reinvested.
5. Distribution of Escrowed Funds. The Escrow Agent shall release from
the Escrow Account to the Company any and all Escrowed Funds therein, together
with all interest earned thereon, upon written request of an officer of the
Company.
6. Liability of Escrow Agent.
(a) In performing any of its duties under this Agreement, or upon
the claimed failure to perform its duties hereunder, the Escrow Agent
shall not be liable to anyone for any damages, losses, or expenses which
it may incur as a result of the Escrow Agent so acting, or failing to act;
provided, however, the Escrow Agent shall be liable for damages arising
out of its willful default or misconduct or its gross negligence under
this Agreement. Accordingly, the Escrow Agent shall not incur any such
liability with respect to (i) any action taken or omitted to be taken in
good faith upon advice of its counsel or counsel for the Company which is
given with respect to any questions relating to the duties and
responsibilities of the Escrow Agent hereunder, or (ii) any action taken
or omitted to be taken in reliance upon any document, including any
written notice or instructions provided for in this Escrow Agreement, not
only as to its due execution and to the validity and effectiveness of its
provisions but also as to the truth and accuracy of any information
contained therein, if the Escrow Agent shall in good faith believe such
document to be genuine, to have been signed or presented by a proper
person or persons, and to conform with the provisions of this Agreement.
(b) The Company hereby agrees to indemnify and hold harmless the
Escrow Agent against any and all losses, claims, damages, liabilities and
expenses, including, without limitation, reasonable costs of investigation
and counsel fees and disbursements which may be incurred by it resulting
from any act or omission of the Company; provided, however, that the
Company shall not indemnify the Escrow Agent for any losses, claims,
damages, or expenses arising out of the Escrow Agent's willful default,
misconduct, or gross negligence under this Agreement.
(c) If a dispute ensues between any of the parties hereto which, in
the opinion of the Escrow Agent, is sufficient to justify its doing so,
the Escrow Agent shall be entitled to tender into the registry or custody
of any court of competent jurisdiction, including the Circuit Court of
Orange County, Florida, all money or property in its hands under the terms
of this Agreement, and to file such legal proceedings as it deems
appropriate, and shall thereupon be discharged from all further duties
under this Agreement. Any such legal action may be brought in any such
court as the Escrow Agent shall determine to have jurisdiction thereof.
The Company shall indemnify the Escrow Agent against its court costs and
attorneys' fees incurred in filing such legal proceedings.
7. Inability to Deliver. In the event that checks for subscriptions
delivered to the Escrow Agent by the Company pursuant to this Agreement are not
cleared through normal banking channels within 120 days after such delivery, the
Escrow Agent shall deliver such uncleared checks to the Company.
8. Notice. All notices, requests, demands and other communications or
deliveries required or permitted to be given hereunder shall be in writing and
shall be deemed to have been duly given if delivered personally, given by
prepaid telegram or deposited for mailing, first class, postage prepaid,
registered or certified mail, as follows:
If to the subscribers for Shares: To their respective addresses as
specified in their Subscription
Agreements.
If to the Company: CNL Hospitality Properties, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx, Xx.,
Chairman of the Board
If to the Managing Dealer: CNL Securities Corp.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx, President
If to the Escrow Agent: SOUTHTRUST ASSET MANAGEMENT COMPANY OF FLORIDA, N.A.
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxxx Xxxx
9. Fees to Escrow Agent. In consideration of the services to be
provided by the Escrow Agent hereunder, the Company will pay the Escrow Agent a
fee for its services hereunder (the "Escrow Fee"). The Escrow Fee shall be $350
for each month or any portion thereof that the Escrow Account continues for the
Company. Payments by the Company, if any, shall be due and payable no less
frequently than six-month intervals while the escrow continues for the Company.
In no event shall the total Escrow Fees payable by the Company pursuant to this
Agreement be less than $2,100, nor more than $4,200, for any 12-month period.
Notwithstanding anything contained in this Agreement to the contrary, in no
event shall any fee, reimbursement for costs and expenses, indemnification for
any damages incurred by the Escrow Agent, or monies whatsoever be paid out of or
chargeable to the Escrowed Funds in the Escrow Account.
10. General.
(a) This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Florida.
(b) The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
(c) This Agreement sets forth the entire agreement and understanding
of the parties with regard to this escrow transaction and supersedes all
prior agreements, arrangements and understandings relating to the subject
matter hereof.
(d) This Agreement may be amended, modified, superseded or
cancelled, and any of the terms or conditions hereof may be waived, only
by a written instrument executed by each party hereto or, in the case of a
waiver, by the party waiving compliance. The failure of any party at any
time or times to require performance of any provision hereof shall in no
manner affect the right at a later time to enforce the same. No waiver in
any one or more instances by any party of any condition, or of the breach
of any term contained in this Agreement, whether by conduct or otherwise,
shall be deemed to be, or construed as, a further or continuing waiver of
any such condition or breach, or a waiver of any other condition or of the
breach of any other terms of this Agreement.
(e) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) This Agreement shall inure to the benefit of the parties hereto
and their respective administrators, successors, and assigns.
11. Representation of the Company. The Company hereby acknowledges that
the status of the Escrow Agent with respect to the offering of the Shares is
that of agent only for the limited purposes herein set forth, and hereby agrees
it will not represent or imply that the Escrow Agent, by serving as the Escrow
Agent hereunder or otherwise, has investigated the desirability or advisability
of an investment in the Shares, or has approved, endorsed or passed upon the
merits of the Shares, nor shall the Company use the name of the Escrow Agent in
any manner whatsoever in connection with the offer or sale of the Shares, other
than by acknowledgement that it has agreed to serve as Escrow Agent for the
limited purposes herein set forth.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
"Company"
CNL HOSPITALITY PROPERTIES, INC.
By: __________________________________
XXXXX X. XXXXXX, XX.,
Chairman of the Board
"MANAGING DEALER"
CNL SECURITIES CORP.
Attest: _____________ By: ___________________________________
XXXXXX X. XXXXXX, President
"ESCROW AGENT"
SOUTHTRUST ASSET MANAGEMENT COMPANY OF FLORIDA, N.A.
Attest: _____________ By: ___________________________________
Name: ___________________________________
Title:___________________________________
