1
Exhibit 10.57
NY EXECUTION
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
By
And Between
N.Y. OVERNIGHT PARTNERS, L.P.,
a New York Limited Partnership
As Seller
And
STARWOOD LODGING TRUST,
a Maryland Real Estate Investment Trust
And
STARWOOD LODGING CORPORATION,
a Maryland Corporation,
As Buyer.
Dated As Of: December 30, 1997
Relating to the New York Luxury
Collection Hotel, New York
New York
2
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this
"Agreement") is entered into as of the 30th day of December, 1997, by and
between N.Y. OVERNIGHT PARTNERS, L.P., a New York limited partnership
("Seller"), and STARWOOD LODGING TRUST, a Maryland Real Estate Investment Trust
(the "Trust"), and STARWOOD LODGING CORPORATION, a Maryland corporation (the
"Corporation"; the Trust and the Corporation being referred to herein
collectively as, "Buyer").
A. Seller owns that certain parcel of land described in EXHIBIT A
attached hereto and made a part hereof, which is improved with a hotel building
and certain related improvements, all as more particularly set forth in this
Agreement.
B. Seller desires to sell, and Buyer desires to purchase, the above
described land and hotel together with the related improvements upon the terms
and subject to the conditions set forth in this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and agreements contained in this Agreement and for other good and
valuable consideration, the receipt and adequacy of which are hereby mutually
acknowledged, Buyer and Seller agree as follows:
SECTION 1
DEFINITIONS
1.1 Defined Terms
"Accounts Receivable" shall mean, collectively, all Cash Equivalent
Receivables, all Invoiced Receivables and all Other Accounts Receivable.
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Exchange Act.
"Approved Service Contracts" shall mean the Service Contracts
identified on SCHEDULE 1.1.1 annexed hereto and made a part hereof and any other
Service Contracts cancelable upon thirty (30) or fewer days notice without
penalty, which Service Contracts Buyer shall assume as of the Closing pursuant
to the General Assignment and Assumption Agreement.
"Assignment and Assumption of Ground Lease" shall have the meaning
set forth in SECTION 4.2.1.8.
"Assignment and Assumption of Management Agreement" shall have the
meaning set forth in SECTION 4.2.1.4.
"Assignment and Assumption of Tenant Leases" shall have the meaning
set forth in SECTION 4.2.1.2.
"Assignment of Mortgage" shall have the meaning set forth in
SECTION 4.2.1.9.
3
"Xxxx of Sale" shall have the meaning set forth in SECTION 4.2.1.5.
"Business Day" shall mean any day other than Saturday or Sunday on
which the New York Stock Exchange is open for business.
"Booking" shall mean a contract or reservation for the use of guest
rooms, banquet facilities, meeting rooms, and/or conference facilities at the
Hotel.
"Buyer's Counsel" shall mean the law firm of Xxxxxxxxx Traurig
Xxxxxxx Xxxxxx Xxxxx & Xxxxxxx acting through Xxxxxx X. Xxxxxx, Esq.
"Buyer Default" shall have the meaning set forth in SECTION 3.5.1.
"Cash Equivalent Receivables" shall mean all Guest Ledger
Receivables which are in the form of drafts or checks written on any bank or
other financial institution, certified checks, money orders, amounts owed to
Seller from credit card, debit card, travel and entertainment card or traveler's
check companies, and are in such other forms which are considered to be cash
equivalents under generally acceptable accounting principles, whether or not
such Guest Ledger Receivables have been presented or billed to any such bank,
financial institution or other company as of the Closing Date.
"Cash Purchase Price" shall mean (a) Seventy-Six Million Eight
Hundred Thousand Dollars ($76,800,000.00) plus (b) an additional Three Million
Two Hundred Thousand Dollars ($3,200,000.00) if the Scheduled Closing Date does
not occur prior to July 15, 1998 plus (c) the Overage Cash Payment, if any, as
adjusted pursuant to SECTION 3.2.2.
"Closing" or "Close of Escrow" shall have the meaning set forth in
SECTION 4.7.2.
"Closing Agent" shall have the meaning set forth in SECTION 4.8.10.
"Closing Date" shall mean the day on which the Closing occurs
hereunder.
"Closing Payment" shall have the meaning set forth in SECTION
3.2.2.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.
"Collective Bargaining Agreements" shall have the meaning set forth
in SECTION 14.2.
"Conveyance Documents" shall mean the Deed, the Assignment and
Assumption of Ground Lease, the Assignment and Assumption of Management
Agreement, the Assignment and Assumption of Tenant Leases, the Xxxx of Sale and
the General Assignment and Assumption Agreement.
"Deed" shall have the meaning set forth in SECTION 4.2.1.1.
"Deposit" shall mean an amount equal to $4,571,428.00 held in
accordance with the provisions of SECTION 3 hereof together with all interest
accrued thereon.
"Employer Corporation" shall mean Luxury Holdings, Inc. (formerly
known as TQM Inc.).
"Employment Agreements" shall mean the Collective Bargaining
Agreements and Employee Benefit Plans (as defined in Section 3(3) of ERISA),
affecting Hotel Employees, including pension, profit sharing, employee benefit
and similar plans, if any, and agreements with regard to any Hotel Employee each
of which are identified on or expressly described in the materials identified on
SCHEDULE 1.1.2 annexed hereto and made a part hereof.
"Environmental Condition" shall mean any condition with respect to
soil, surface waters, groundwater, land, stream sediments, surface or subsurface
strata, ambient air and any environmental medium comprising or surrounding the
Real Property, which results in any damage, loss, cost, expense, claim, demand,
order or liability to or against Seller or Buyer by any third party (including,
without limitation, any government entity) as a result of a violation of any
applicable Environmental Laws.
4
"Environmental Laws" shall mean all presently applicable statutes,
regulations, rules, ordinances, codes, licenses, permits and orders of any and
all governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political subdivisions
thereof, and all applicable judicial and administrative and regulatory decrees,
judgments and orders relating to the protection of the environment, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. 9061 et seq.; the Hazardous
Materials Transportation Act, as amended, 49 U.S.C. 1801, et seq.; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. 6901, et seq.; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. 1251, et seq.; and analogous
state laws and regulations.
"Equipment Leases" shall mean all leases of equipment, vehicles,
furniture or other personal property leased by, or on behalf of, Seller and
located at, or used in the operation of the Real Property, together with any and
all amendments thereto, which are identified on SCHEDULE 1.1.3 annexed hereto.
"Equity Purchase Price" shall mean the number of Paired Shares with
a value as determined pursuant to the Stock Agreement equal to Two Million Nine
Hundred Forty Two Thousand Four Hundred Dollars ($2,942,400.00) (provided,
however, the Equity Purchase Price shall be reduced to Zero Dollars ($0.00) if
the Scheduled Closing Date does not occur prior to July 15, 1998) to be
delivered in accordance with the applicable provisions of the Stock Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and the regulations promulgated thereunder.
"Escrow" shall mean an escrow opened with the Escrow Holder for the
purchase and sale of the Property in accordance with the provisions of this
Agreement.
"Escrow Holder" shall mean the Title Company unless otherwise
agreed in writing by Buyer and Seller.
"Escrow Instructions" shall have the meaning set forth in SECTION
4.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Excluded Property" shall mean all Seller's right, title and
interest in and to: (a) those claims of Seller attributable to the period prior
to the Closing Date and described on SCHEDULE 1.1.4 annexed hereto and made a
part hereof, or which Seller is entitled to assert under the express provisions
of SECTION 5; (b) all insurance proceeds under Seller's Insurance and workers'
compensation policies, including return premiums and dividends thereon and all
claims thereunder in each case to the extent attributable to acts or occurrences
prior to the Closing Date; (c) all accounts owned or maintained by Seller, or
Manager on Seller's behalf, in connection with the Hotel, including all
operating and reserve accounts; and (d) any books, records, files or papers
specifically described in SECTION 6.3.2 as excluded from the Property
Information.
"Excluded Parties" shall have the meaning set forth in SECTION
17.18
"Execution Date" shall mean the date hereof.
"General Assignment and Assumption Agreement" shall have the
meaning set forth in SECTION 4.2.1.3.
"Ground Lease" shall mean the Ground Lease entered into as of
December 30, 1963 by and between the Massachusetts Mutual Life Insurance Company
and Xxxxx Xxxxx & F.B.M. Manufacturing Company, Inc., as amended to date and
described more fully on SCHEDULE 1.1.5 hereto.
"Ground Lease Estoppel" shall have the meaning set forth in SECTION
9.1.4.
5
"Ground Lease Transfer Requirement" shall have the meaning set
forth in SECTION 7.1.1
"Guest Ledger Receivables" shall mean amounts, including, without
limitation, room charges, accrued to the accounts of guests occupying rooms at
the Hotel or group, conference or banquet customers of Seller at the Hotel.
"Xxxx-Xxxxx-Xxxxxx Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 and the rules and regulations promulgated thereunder,
as the same has been amended from time to time.
"Hotel" shall mean the hotel located on the Land and commonly known
as the New York Luxury Collection Hotel.
"Hotel Employees" shall mean all full-time, part-time or temporary
employees of Seller and/or the Employer Corporation (but not employees of
Manager or any of its affiliates) who are employed by Seller and/or the Employer
Corporation exclusively at or in connection with the Hotel as of the Closing
Date and who are listed on SCHEDULE 1.1.6 annexed hereto and made a part hereof.
"Improvements" shall mean Seller's right, title and interest in and
to the hotel building and other improvements now or hereafter located on the
Land.
"Insured Casualty Notice" shall have the meaning set forth in
SECTION 12.1.1.
"Intangible Property" shall mean all of Seller's right, title and
interest in and to the following, in each case excluding any Excluded Property:
(i) Licenses and Permits; (ii) trademark rights, and other intangible property,
rights, titles, interests, privileges and appurtenances related to or used in
connection with the Hotel or its operations; (iii) warranties and guaranties of
architects, engineers, contractors, subcontractors, suppliers or materialmen
involved in the repair, construction, maintenance, design, reconstruction or
operation of the Hotel, or any equipment or systems constituting a part of the
Hotel; (iv) Approved Service Contracts; (v) Equipment Leases; (vi) Bookings; and
(vii) computer programs, software and documentation thereof (subject to the
limitations of any applicable license agreements pertaining thereto), and
including all electronic data processing systems, program specifications, source
codes, logs, input data and report layouts and forms, record file layouts,
diagrams, functional specifications and variable descriptions, flow charts and
other related materials used in connection therewith; and (viii) any goodwill
associated with the operation of the Hotel.
"Interim Management Agreement" shall have the meaning set forth in
SECTION 17.20 hereto.
"Invoiced Receivables" shall mean all Guest Ledger Receivables
other than Cash Equivalent Receivables whether or not such Guest Ledger
Receivables have been invoiced by Seller as of the Closing Date.
"Land" shall mean Seller's right, title and interest in and to the
land described on EXHIBIT A annexed hereto and made a part hereof.
"Licenses and Permits" shall mean all licenses, permits,
registrations, certificates, authorizations and governmental approvals other
than the Liquor License obtained in connection with the design, construction,
rehabilitation, use and/or operation of the Hotel.
"Liquor License" shall mean all licenses, permits, registrations,
certificates, authorizations and governmental approvals with respect to service
of alcoholic beverages at the Hotel.
"Liquor License Management Agreement" shall have the meaning set
forth in SECTION 4.2.1.8.
"Lock Price" shall have the meaning set forth in the Stock
Agreement.
6
"Losses" shall mean any and all losses, liabilities, obligations,
damages, claim or expense, including without limitation, reasonable attorneys'
and accountants' fees and disbursements related thereto.
"Manager" means Sheraton Operating Corporation, a wholly-owned
subsidiary of ITT Sheraton Corporation.
"Management Agreement" shall mean that certain Management Agreement
entered into as of August 13, 1997 between Seller and Manager.
"Market Price" shall have the meaning set forth in the Stock
Agreement.
"Material" shall mean $5,000 for any single occurrence and $15,000
in the aggregate for any group of occurrences whether or not related.
"Material Casualty" shall mean a casualty or casualties that, in
the aggregate: (i) causes in excess of $10,000,000.00 worth of damage to the
Hotel; or (ii) will take twelve (12) months or longer from the date of the
casualty to fully remediate.
"Material Taking" shall mean an exercise by an applicable
governmental authority of the power of condemnation or eminent domain that
results in: (a) the taking of more than twenty percent (20%) of the Real
Property; (b) a material reduction or restriction in access to the Property; or
(c) the inability to operate the Hotel in substantially the same manner (without
material additional expense) as it was operated prior to such taking.
"Memorandum of Contract" shall mean a memorandum of this Agreement
in the form attached as EXHIBIT B hereto.
"Monetary Lien" shall mean any monetary lien affecting the Seller's
interest in the Real Property of an ascertainable amount, other than any lien
for taxes or assessments which are not yet due and payable.
"Non-Foreign Person Certificate" shall have the meaning set forth
in SECTION 4.2.1.13.
"Other Accounts Receivable" shall mean any and all rents,
additional rent, deposits, and other sums and charges owing to Seller that are
in any way attributable to the operation of the business at the Hotel,
including, without limitation, all rents and/or license fees due from Tenants
under Tenant Leases, and including any such amounts which are past due, but
excluding Guest Ledger Receivables.
"Overage Cash Payment" shall mean the portion of the Equity
Purchase Price which is payable in cash at Closing as provided in SECTION
3.2.2.1, if any.
"Ownership Limitation" shall mean the limitations contained in the
declaration of trust for the Trust and the Corporation's articles of
incorporation prohibiting actual or constructive ownership by any one person or
group of related persons of more than 8% of the issued and outstanding Paired
Shares taking into account the attribution rules of Section 544(a) of the Code
as modified by Section 856(h) of the Code or Section 318(a) of the Code as
modified by Section 856(d)(5) of the Code.
"Paired Shares" shall mean one share of beneficial interest, par
value $.01 per share of the Trust, and one share of common stock, par value $.01
per share, of the Corporation that are subject to the Pairing Agreement, which
shares shall be transferable as provided in the Stock Agreement and the Pairing
Agreement.
"Pairing Agreement" shall mean the Pairing Agreement dated as of
June 25, 1980, as amended, between the Trust and the Corporation providing, in
relevant part, for the pairing of all outstanding beneficial interests of the
Trust and shares of the Corporation.
"Permitted Encumbrances" shall have the meaning set forth in
SECTION 7.3.
"Person" shall mean any natural person, partnership, corporation,
association,
7
limited liability company, trust or any other legal entity.
"Personal Property" shall mean collectively the Tangible Personal
Property and the Intangible Property.
"Preliminary Title Report" shall have the meaning set forth in
SECTION 7.1.
"Property" shall mean collectively the Real Property, the Personal
Property, the Tenant Leases, and the Accounts Receivable, but shall exclude the
Excluded Property.
"Property Information" shall have the meaning set forth in SECTION
6.4.2.
"Proration Time" shall mean 12:01 a.m. Eastern Time on the Closing
Date.
"Purchase Price" shall mean the sum of the Cash Purchase Price and
the Equity Purchase Price.
"Real Property" shall mean the Land and the Improvements, together
with Seller's right, title and interest in and to all rights of way, easements,
water or littoral rights, rights to any minerals, oil, gas and other hydrocarbon
substances, or any portion thereof, relating to the Land, and Seller's right,
title and interest in and to all streets, alleys, strips and gores abutting the
Land, if any.
"Records and Plans" shall mean, all financial records showing the
income and expenses of the Hotel for the prior three (3) calendar years and for
the current year to date, certificates of occupancy, records of the Hotel's
operations (including utility bills), building plans, specifications and
drawings, lists of Personal Property, surveys, tax bills for the Real Property
for the last three (3) years and for the current year to date, copies of the
Service Contracts, Licenses and Permits and other documents related to the use,
maintenance, repair, management, construction and/or operation of the Hotel, in
each case, to the extent located on-site at the Hotel, or to Seller's Knowledge,
otherwise under the control of Seller.
"Related Agreement" shall have the meaning set forth in SECTION
9.1.3.
"Schedule of Advance Bookings" means the Schedule of Advance
Bookings delivered pursuant to SECTION 4.2.1.19.
"Schedule of Tenant Leases" means the Schedule of Tenant Leases set
forth in SCHEDULE 1.1.7 annexed hereto and made a part hereof.
"Scheduled Closing Date" shall mean January 15, 1998, as such date
may be extended in accordance with the provisions of SECTION 7.1 time being of
the essence.
"SEC" shall mean the United States Securities and Exchange
Commission.
"SEC Documents" shall have the meaning set forth in SECTION 6.1.4.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Seller Default" shall have the meaning set forth in SECTION 11.1.
"Seller's Closing Certificate" shall have the meaning set forth in
SECTION 4.2.1.18.
"Seller's Counsel" shall mean Xxxxxxxx & Xxxxxxxx LLP acting
through Xxxxxx X. Xxxxxx, Esq.
"Seller's Due Diligence" shall mean the information gathering and
review process described on SCHEDULE 1.1.8.
"Seller's Insurance" shall have the meaning set forth in SECTION
6.3.12.
"Seller's Knowledge" shall mean with respect to any representation
or warranty so qualified, the knowledge of the person(s) identified on SCHEDULE
1.1.8 annexed hereto and made a part hereof, on the date on or as of which such
representation or warranty is made, following the completion by such person(s)
of Seller's Due Diligence, but without any other duty to investigate or inquire
and without attribution to any such identified person(s) of facts and matters
otherwise within the personal knowledge of any other officers, employees, or
agents
8
of Seller or any third parties (including, but not limited to, the Manager or
any previous manager of the Hotel), but not within the actual current knowledge
of such named person(s). It is understood that none of the individuals
identified on SCHEDULE 1.1.8 shall have any personal liability for any of
Seller's representations, warranties and other obligations under this Agreement.
"Service Contracts" shall mean any and all service contracts,
landscaping contracts, maintenance agreements, open purchase orders and other
contracts for the provision of services, materials or supplies to or for the
benefit of the Property, except for the Management Agreement, together with any
and all amendments thereto.
"Specific Disclosure Matters" shall mean certain disclosures and
information provided or disclosed by Seller to Buyer described on SCHEDULE 1.1.9
annexed hereto and made a part hereof.
"Starwood Disclosure" shall mean collectively, the Form S-3 filed
by the Corporation and the Trust with the SEC on November 12, 1997, and the Form
S-4 filed by the Corporation and the Trust with the SEC on November 20, 1997, as
the same may be amended by any filing with the SEC made by the Trust or the
Corporation as amended to date and from time to time thereafter.
"Starwood Operating Partnership" shall mean SLC Operating Limited
Partnership, a Delaware limited partnership.
"Starwood Realty Partnership" shall mean SLT Realty Limited
Partnership, a Delaware limited partnership.
"State" shall mean the state in which the Hotel is located.
"Stock Agreement" shall have the meaning set forth in SECTION
4.2.1.6.
"Survey" shall mean an as-built customary survey of the Real
Property certified to the Title Company meeting all State land survey
requirements.
"Tangible Personal Property" shall mean, in each case to the extent
owned by Seller and excluding any and all of the Excluded Property: (i) all
Records and Plans; (ii) all "Inventories", as such term is defined in the
Uniform System of Accounts; (iii) all depreciable personal property; and (iv)
all other tools, vehicles, supplies, artwork, furniture, furnishings, machinery,
equipment, licensed software and personal computer based security systems, if
any, specialized hotel equipment and other tangible personal property, used in
connection with the ownership, operation or maintenance of the Property,
including, without limitation, all china, glassware, silverware, linens, towels,
curtains, uniforms, engineering, maintenance, and housekeeping supplies,
draperies, materials and carpeting, used or intended for use, but not for sale,
in connection with the operation of the Hotel, all equipment used in the
operation of the kitchen, dining rooms, lounges, bars, laundry, dry cleaners,
lobby, reservation desk and all merchandise, food and beverages held for sale in
connection with the operation of the Hotel, which are on hand on the Closing
Date; provided, however, that to the extent that any applicable law prohibits
the transfer of alcoholic beverages from Seller to Buyer, such beverages shall
not be considered a part of the Tangible Personal Property.
"Tenant" shall mean a tenant, licensee or concessionaire occupying
space at any portion of the Property pursuant to a Tenant Lease.
"Tenant Lease" shall mean a lease, concession agreement or license
agreement entered into by or on behalf of Seller with a third party for the use
of any part of the Real Property, including those leases, concession agreements
and license agreements shown on the Schedule of Tenant Leases, together with any
amendments thereto but excluding Bookings.
"Tenant Security Deposits" shall mean all security deposits or
other security of
9
Tenants under the Tenant Leases, plus accrued interest, if any, payable thereon.
"Termination Charges" shall have the meaning set forth in SECTION
14.1.
"Termination Notice" shall have the meaning set forth in SECTION
3.5.1.
"Threshold Amount" shall mean One Million Dollars ($1,000,000).
"Title Company" shall mean Chicago Title Insurance Company.
"Title Policy" shall have the meaning set forth in SECTION 7.2.
"Transfer Restriction Period" shall have the meaning set forth in
SECTION 17.18.
"Uninsured Casualty Notice" shall have the meaning set forth in
SECTION 12.2.1.
"Uninsured Estimate to Repair" shall have the meaning set forth in
SECTION 12.2.1.
"Uniform System of Accounts" shall mean the Uniform System of
Accounts for Hotels, prepared by The Hotel Association of New York City, Inc.,
in effect as of the date hereof.
"Utility Deposits" shall mean Seller's right, title and interest in
and to all deposits delivered by Seller to utilities, governmental agencies,
suppliers or others pursuant to an Approved Service Contract or otherwise in
connection with the Real Property.
"Value Letter" shall have the meaning set forth in SECTION 4.3.1.4.
"WARN Act" shall mean the Workers Adjustment and Retraining
Notification Act and the Regulations promulgated thereunder, as the same has
been amended.
1.2 Other Definitional Provisions. The terms "hereof," "hereto,"
"hereunder" and similar terms when used in this Agreement shall refer to this
Agreement generally, rather than to the section in which such term is used,
unless otherwise specifically provided. Unless the context otherwise requires,
any defined term used in the plural shall refer to all members of the relevant
class, and any defined term used in the singular shall refer to any one or more
of the members of the relevant class.
SECTION 2
PURCHASE AND SALE OF PROPERTY
On the terms and subject to the conditions of this Agreement, Seller
agrees to sell the Property to Buyer, and Buyer agrees to purchase the Property
from Seller all as hereinafter provided. Notwithstanding any other provision of
this Agreement, there shall be excluded from the Property being conveyed
hereunder the Excluded Property.
SECTION 3
PURCHASE PRICE; PAYMENT;
BUYER'S DEFAULT; LIQUIDATED DAMAGES
3.1 Purchase Price. The purchase price for the Property shall be the
Purchase Price.
3.2 Payment. The Purchase Price shall be paid as follows:
3.2.1 Upon the execution hereof, Buyer shall deliver to Escrow
Holder, in cash or other immediately available funds, the Deposit, to be held by
Escrow Holder strictly in accordance with the provisions of this Agreement. If
the Close of Escrow shall occur, Seller shall be entitled to receive the Deposit
as a credit against the Purchase Price.
3.2.2 At least one (1) day prior to the Scheduled Closing Date
(unless extended pursuant to SECTION 7.1), Buyer shall deliver to Escrow Holder
an amount (the "Closing Payment") payable in the form specified in SECTIONS
3.2.2.1 and 3.2.2.2 below, equal to the Purchase Price less the amount of the
Deposit. The Closing Payment shall be paid as follows:
3.2.2.1 The Equity Purchase Price, if any, shall be delivered
in Paired Shares without adjustment for the pro-rations hereunder, which shares
shall be delivered in accordance with and subject to and transferable in
accordance with the provisions of the
10
Stock Agreement and the Pairing Agreement. If any portion of the Equity Purchase
Price cannot be paid in Paired Shares on account of the Ownership Limitation, a
cash payment in an amount equal to the product of (a) the number of Paired
Shares which are not delivered hereunder or under the Stock Agreement because of
the Ownership Limitation and (b) the Market Price on the Closing Date (the
"Overage Cash Payment") shall be paid in cash or other immediately available
funds.
3.2.2.2 The balance of the Closing Payment shall be paid in
cash or other immediately available funds adjusted for the pro-rations provided
for expressly in this Agreement.
3.3 Investment of Escrowed Funds. Escrow Holder shall invest and
reinvest any funds deposited by Buyer in the Escrow only in bonds, notes,
Treasury bills or other securities having maturities of thirty (30) days or less
and constituting direct obligations of, or fully guaranteed by, the United
States of America (and provided, further, that such direct obligations or
guarantees, as the case may be, are entitled to the full faith and credit of the
United States of America) or such other investments as Buyer may direct and
Seller may approve, until Escrow Holder is required to deliver or use such funds
or any interest earned thereon in accordance with the provisions of this
Agreement. All interest accruing on the Deposit shall be paid to the party
ultimately entitled to the Deposit. All risk of loss on funds held in Escrow
shall be borne by Buyer or Escrow Holder.
3.4 Allocation of Purchase Price. The Purchase Price shall be allocated
among the assets and property that comprise the Property as proposed by Seller
prior to Closing subject to the reasonable approval of Buyer, and such
allocation shall be used by Seller and Buyer in connection with the preparation
of their respective income tax, sales tax, transfer tax, and any other
applicable tax returns. Seller and Buyer shall not, nor shall they permit their
respective Affiliates to, take a federal or state income tax position with any
taxing or other public authorities in any jurisdiction which is materially
inconsistent with the allocation so agreed upon by the parties.
3.5 Default by Buyer Prior to Closing; Liquidated Damages.
3.5.1 EXCEPT AS PROVIDED TO THE CONTRARY IN SECTION 7.1.1., IF
BUYER BREACHES ITS OBLIGATION TO PURCHASE THE PROPERTY UNDER THIS AGREEMENT AND
FAILS TO CURE SUCH BREACH ON OR BEFORE THE SCHEDULED CLOSING DATE (A "BUYER
DEFAULT"), THEN UPON WRITTEN NOTICE OF TERMINATION (A "TERMINATION NOTICE") FROM
SELLER TO BUYER AND ESCROW HOLDER, THE ESCROW AND THIS AGREEMENT SHALL TERMINATE
AND ESCROW HOLDER SHALL DISBURSE FROM THE ESCROW THE DEPOSIT TO SELLER AS
LIQUIDATED DAMAGES, WHICH SHALL BE SELLER'S SOLE REMEDY AT LAW OR IN EQUITY FOR
THE BUYER DEFAULT, AND THEREAFTER NEITHER PURCHASER NOR SELLER SHALL HAVE ANY
FURTHER LIABILITY HEREUNDER, EXCEPT THAT BUYER SHALL REMAIN OBLIGATED FOR
PERFORMANCE OF ITS OBLIGATIONS UNDER SECTIONS 8, 10, 17.14, 17.19 AND ANY OTHER
PROVISION HEREOF WHICH BY ITS EXPRESS TERMS SURVIVES THE TERMINATION OF THIS
AGREEMENT. NOTHING CONTAINED HEREIN SHALL LIMIT SELLER'S RIGHT TO OBTAIN
SPECIFIC PERFORMANCE OF BUYER'S OBLIGATION TO CLOSE PURSUANT TO SECTION 7.1.1.
3.5.2 THE PARTIES ACKNOWLEDGE AND AGREE BY INITIALING THIS SECTION
3.5.2 THAT IF A BUYER DEFAULT OCCURS ON OR PRIOR TO THE SCHEDULED CLOSING DATE
AND IF, AS A RESULT OF SUCH BUYER DEFAULT,
11
CLOSE OF ESCROW FAILS TO OCCUR, SELLER WILL INCUR CERTAIN COSTS AND OTHER
DAMAGES IN AN AMOUNT THAT WOULD BE EXTREMELY DIFFICULT OR IMPRACTICAL TO
ASCERTAIN; AND THE DEPOSIT BEARS A REASONABLE RELATIONSHIP TO THE DAMAGES WHICH
THE PARTIES ESTIMATE MAY BE SUFFERED BY SELLER BY REASON OF SUCH FAILURE OF THE
CLOSE OF ESCROW TO OCCUR AND THAT SELLER'S RETENTION OF THE DEPOSIT IS FAIR AND
REASONABLE COMPENSATION TO SELLER BY REASON OF SUCH FAILURE OF THE CLOSE OF
ESCROW TO OCCUR.
INITIALS: /s/ X. Xxxxxx /s/ SRG /s/ MCM
__________________________ _________________________
Seller Buyer
SECTION 4
ESCROW; CLOSING; COSTS
4.1 Escrow. The purchase and sale of the Property shall be consummated
through the Escrow. Immediately upon the execution of this Agreement, the
parties shall deposit a copy of this Agreement with Escrow Holder. This
Agreement, together with any general provisions agreed to in writing by Buyer
and Seller for the benefit of Escrow Holder, shall constitute the escrow
instructions for the transfer of the Property (the "Escrow Instructions"). In
the event of any conflict between this Agreement and such general provisions,
this Agreement shall control unless otherwise expressly agreed in writing by
Buyer, Seller and Escrow Holder. If any requirements relating to the duties or
obligations of Escrow Holder are not acceptable to Escrow Holder, or if Escrow
Holder requires additional instructions, the parties shall make such deletions,
substitutions and additions to the Escrow Instructions as Buyer's Counsel and
Seller's Counsel shall mutually approve and which do not substantially alter
this Agreement or its intent. Written instructions from Seller's Counsel, in the
case of Seller, or from Buyer's Counsel, in the case of Buyer, shall be accepted
by Escrow Holder and shall be binding upon the party whose counsel gave such
instructions to Escrow Holder.
4.2 Seller's Deliveries to Escrow Holder.
4.2.1 Prior to the Scheduled Closing Date (subject to extension
pursuant to SECTION 7.1), Seller shall deliver to Escrow Holder the following
documents duly executed and, where applicable, acknowledged by Seller, each of
which shall be undated and the delivery of each of which shall be a condition
precedent to the obligation of Buyer to close hereunder.
4.2.1.1 Deed. A deed with respect to the Improvements in the
form of EXHIBIT 4.2.1.1 annexed hereto and made a part hereof, sufficient to
transfer all of Seller's right, title and interest in and to the Improvements,
subject only to matters of record as of the Closing Date, from Seller to Buyer
(the "Deed");
4.2.1.2 Assignment and Assumption of Tenant Leases. An
Assignment and Assumption of Tenant Leases in the form of EXHIBIT 4.2.1.2
annexed hereto and made a part hereof pursuant to which Seller shall assign the
Tenant Leases to Buyer and Buyer shall assume all of Seller's obligations
thereunder (the "Assignment and Assumption of Tenant Leases");
4.2.1.3 General Assignment. A General Assignment and
Assumption Agreement in the form of EXHIBIT 4.2.1.3 annexed hereto and made a
part thereof pursuant to which Seller shall assign to Buyer all of Seller's
right, title and interest in and to all of the Intangible Property and Buyer
shall assume all obligations thereunder (the "General Assignment and Assumption
Agreement");
4.2.1.4 Assignment and Assumption of Management Agreement. An
Assignment and Assumption of Management Agreement in the form of EXHIBIT 4.2.1.4
12
annexed hereto and made a part hereof pursuant to which Seller shall assign to
Buyer the Management Agreement and Buyer shall assume the obligations of Seller
thereunder, provided, however, the obligation to deliver the Assignment and
Assumption of Management Agreement shall be irrevocably waived, if prior to the
Close of Escrow, the Management Agreement shall have been terminated and the
Interim Management Agreement shall have become effective in accordance with
SECTION 17.20;
4.2.1.5 Xxxx of Sale. One or more Bills of Sale in the form
of EXHIBITS 4.2.1.5A AND 4.2.1.5B annexed hereto and made a part hereof
conveying to Buyer or designees of Buyer all of Seller's right, title and
interest in and to the Tangible Personal Property (the "Xxxx of Sale");
4.2.1.6 Stock Agreement. The Stock Agreement in the form of
EXHIBIT 4.2.1.6 annexed hereto and made a part hereof (the "Stock Agreement");
4.2.1.7 Liquor License Management Agreement. The Liquor
License Management Agreement in the form of EXHIBIT 4.2.1.7 annexed hereto and
made a part hereof (the "Liquor License Management Agreement");
4.2.1.8 Assignment and Assumption of Ground Lease. An
Assignment and Assumption of Ground Lease in the form of EXHIBIT 4.2.1.8 annexed
hereto and made a part hereof pursuant to which Seller shall assign the Ground
Lease to Buyer and Buyer shall assume all of Seller's obligations thereunder
(the "Assignment and Assumption of Ground Lease");
4.2.1.9 Assignment of Mortgage. Seller shall use reasonable
efforts to obtain an assignment with covenant of the mortgages presently
encumbering Seller's interest in the Ground Lease and Improvements (the
"Assignment of Mortgage") fully executed and acknowledged by the holders of such
mortgages pursuant to which the holders of such mortgage shall assign the same
to a lender identified by Buyer and a release from the holders of such
mortgages, pursuant to which Seller shall be released from any and all liability
under said mortgages and under any related loan documents; it being understood
that Seller has no obligation to deliver an affidavit pursuant to Section 275 of
the Real Property Law of the State of New York;
4.2.1.10 [Intentionally Omitted]
4.2.1.11 [Intentionally Omitted]
4.2.1.12 [Intentionally Omitted]
4.2.1.13 Non-Foreign Person Certificate. A Non-Foreign Person
Certificate in the form of EXHIBIT 4.2.1.13 annexed hereto and made a part
hereof (the "Non-Foreign Person Certificate");
4.2.1.14 Transfer Tax Forms. Any statements, such as a
transfer or conveyance tax forms or returns required by applicable state or
local law to be executed by Seller in order to effect the Closing;
4.2.1.15 Certified Rent Roll. A copy of the rent roll for the
Property dated as of the Closing Date and certified by Seller to be (a) a true,
correct and complete copy of the rent roll for the Property provided to Seller
by the Manager; and (b) to Seller's Knowledge, to be true, correct and complete;
4.2.1.16 Certified Operating Statement. An operating
statement for the Property dated as of a date no more than thirty (30) days
prior to the Closing Date and certified by Seller to be (a) a true, correct and
complete copy of the operating statement for the Property provided to Seller by
Manager for the period of Manager's employment at the Property; and (b) to
Seller's Knowledge, to be, true, correct and complete;
13
4.2.1.17 Guest Ledger. A copy of the guest ledger dated as of
the Proration Time showing all Guest Ledger Receivables and certified by Seller
(a) to be a true, correct and complete copy of the guest ledger provided to
Seller by Manager; and (b) to Seller's Knowledge, to be true, correct and
complete;
4.2.1.18 Closing Certificate. A certification by Seller to
Seller's Knowledge that the representations and warranties set forth in SECTION
6.3 are true, correct and complete as of the Closing Date, except to the extent
that any such representation or warranty is expressly made only as of the
Execution Date subject to Seller's right to make revisions pursuant to SECTION
6.7 to such representations and warranties ("Seller's Closing Certificate");
4.2.1.19 Schedule of Bookings. A schedule of all Bookings
relating to periods after the Proration Time, certified by Seller (a) to be a
true, correct and complete copy of the schedule of Bookings provided to Seller
by Manager; and (b) to Seller's Knowledge, to be true, correct and complete;
4.2.1.20 Title Requirements. Any and all certificates,
affidavits and other instruments and documents which the Title Company shall
reasonably require to permit it to issue the Title Policy in the condition
required herein; provided, however, that (a) Seller is given written notice by
Title Company of the requirement of any such certificates, affidavits or other
instruments and documents within a reasonably sufficient time in advance of the
Scheduled Closing Date and (b) such incidental documents do not create any
liability to Seller that is inconsistent with the liability retained by Seller
under the terms of this Agreement;
4.2.1.21 Payoff Letters. A pay-off letter from the holder of
any mortgage or deed of trust presently encumbering the Real Property indicating
all sums required to satisfy the debt secured by and permit the discharge of
record the lien of such mortgage or deed of trust;
4.2.1.22 Notices to Tenants. Notices to Tenants of the
assignment to Buyer of the Tenant Leases in form and substance satisfactory to
Seller and Buyer;
4.2.1.23 Opinion of Seller's Counsel. An opinion of Seller's
Counsel in a form to be agreed upon by the parties; and
4.2.1.24 Other. Any other incidental documents, not otherwise
expressly provided for herein, reasonably required by Escrow Holder to
consummate the purchase and sale of the Property; provided, however, that (a)
Seller is given written notice by Escrow Holder of the requirement of any such
incidental documents within a reasonably sufficient time in advance of the
Scheduled Closing Date (subject to extension in accordance with the provisions
of SECTION 7.1); and (b) such incidental documents do not create any liability
to Seller that is inconsistent with the liability retained by Seller under the
terms of the this Agreement.
4.3 Buyer's Deliveries to Escrow Holder.
4.3.1 Prior to the Scheduled Closing Date (subject to extension in
accordance with the provisions of SECTION 7.1), and subject further to the
provisions of SECTION 4.3.1.4 in the case of the Value Letter, Buyer shall
deliver to Escrow Holder the following items and documents, which documents
shall be duly executed and, where applicable, acknowledged by Buyer or its
designee, as applicable, and undated, and the delivery of each of which shall be
a condition precedent to the obligation of Seller to close hereunder:
4.3.1.1 The Cash Purchase Price. The Cash Purchase Price;
4.3.1.2 Stock Certificates. Paired Shares in the amount
required to be delivered at the Closing in accordance with the provisions of
this Agreement and in accordance with and subject to the provisions of the Stock
Agreement;
14
4.3.1.3 Assignment and Assumption of Management Agreement. A
counterpart of the Assignment and Assumption of Management Agreement, provided,
however, the obligation to deliver the Assignment and Assumption of Management
Agreement shall be irrevocably waived, if prior to the Close of Escrow, the
Management Agreement shall have been terminated and the Interim Management
Agreement shall have become effective in accordance with SECTION 17.20;
4.3.1.4 Value Letter. A letter (the "Value Letter") to be
obtained by Buyer at Buyer's expense with respect to the reasonableness of the
allocation of the purchase price among the transactions being entered into as of
the date hereof between Buyer and Seller and/or Seller's Affiliates issued by
Bear Xxxxxxx;
4.3.1.5 Opinion of Buyer's Counsel. An opinion of Buyer's
counsel in a form to be agreed upon by the parties;
4.3.1.6 Stock Agreement. A counterpart of the Stock
Agreement;
4.3.1.7 Assignment and Assumption of Ground Lease. A
counterpart of the Assignment and Assumption of Ground Lease;
4.3.1.8 Liquor License Management Agreement. A counterpart
of the Liquor License Management Agreement;
4.3.1.9 [Intentionally Omitted]
4.3.1.10 [Intentionally Omitted]
4.3.1.11 [Intentionally Omitted]
4.3.1.12 Closing Certificate. A certification by Buyer that
the representations and warranties set forth in SECTION 6.1 and SECTION 6.2 are
true, correct and complete as of the Closing Date;
4.3.1.13 The Assignment and Assumption of Tenant Leases. A
counterpart of the Assignment and Assumption of Tenant Leases;
4.3.1.14 The General Assignment and Assumption Agreement. A
counterpart of the General Assignment and Assumption Agreement;
4.3.1.15 Transfer Tax Forms. Any statements, such as a
transfer or conveyance tax forms or returns required by applicable state or
local law to be executed by Buyer in order to effect the closing; and
4.3.1.16 Other. Any other incidental documents, not otherwise
expressly provided for herein, required by Escrow Holder to consummate the
purchase and sale of the Property; provided, however, that (a) Buyer is given
written notice by Escrow Holder of the requirement of such incidental documents
within a reasonably sufficient time in advance of the Scheduled Closing Date;
and (b) Buyer shall not be required to incur any liability, in connection with
the delivery of such incidental documents inconsistent with the provisions of
this Agreement.
4.4 Seller's Deliveries to Buyer. At or prior to the Close of Escrow,
Seller shall deliver to Buyer or cause to be available to Buyer on-site at the
Hotel, the following documents, to the extent the same have not already been
delivered and to the extent in the possession or control of Seller:
4.4.1 Tenant Leases/Tenant Deposits. The original Tenant Leases (or
if not available, the best available copies), and the originals of Tenant
Security Deposits which are evidenced by letters of credit or escrow agreements,
if any, and if necessary to enable Buyer to realize or draw upon same, consents
of the applicable Tenants and/or financial institutions or replacement letters
of credit or escrow agreements in favor of Buyer;
4.4.2 Service Contracts. The originals, or, if not available, the
best available
15
copies, of the Approved Service Contracts;
4.4.3 Licenses and Permits. The originals, or, if not available,
the best available copies of the Licenses and Permits; and
4.4.4 Records and Plans. The originals, or, if not available, the
best available copies of the Records and Plans.
4.5 Possession. Seller shall deliver the keys and possession of the
Property to Buyer at the Close of Escrow free and clear of all leases, tenancies
and occupancies, except for the Management Agreement, the Bookings, the rights
of guests in guest rooms, banquet facilities, conference rooms and meeting
rooms, the rights of Tenants under the Tenant Leases (including their assignees,
subtenants or licensees), and the other Permitted Encumbrances.
4.6 Evidence of Authorization. At the Close of Escrow, each party shall
deliver to the other party evidence in form and content reasonably satisfactory
to the other party and the Title Company that (a) the party is duly organized
and validly existing under the laws of the state of its organization and has the
power and authority to enter into this Agreement, (b) this Agreement and all
documents delivered pursuant hereto have been duly executed and delivered by the
party, and (c) the performance by the party of its obligations under this
Agreement have been duly authorized by all necessary corporate, partnership or
other action.
4.7 Close of Escrow.
4.7.1 The Escrow shall close on or before the Scheduled Closing
Date.
4.7.2 Provided that Escrow Holder has not received from either
party written notice of the failure of any condition precedent specified in
SECTION 9 to the obligations of such party (or any previous such notice has been
withdrawn), then when the parties have each deposited into the Escrow the
documents and funds required by this Agreement and the Title Company is
unconditionally prepared to issue the Title Policy at the Close of Escrow,
Escrow Holder shall perform the following actions (collectively, "Close of
Escrow" or "Closing"):
4.7.2.1 Prepare a closing statement for the transaction for
approval by Seller and Buyer prior to the Close of Escrow;
4.7.2.2 Insert the Closing Date as the date of any undated
document to be delivered through Escrow;
4.7.2.3 Cause the Deed, the Assignment and Assumption of
Ground Lease, and the Assignment of Mortgage to be recorded in the land records
of the state and county where the Real Property is located;
4.7.2.4 Deliver to Buyer the documents deposited into the
Escrow for delivery to Buyer at the Close of Escrow;
4.7.2.5 Deliver to Seller (a) all funds and Paired Shares to
be received by Seller from Buyer through the Escrow at the Close of Escrow less
(i) all amounts to be paid by Seller for Escrow Holder's fees and expenses and
(ii) all amounts paid by Escrow Holder in satisfaction of liens and encumbrances
on the Real Property or other matters pursuant to the written instruction of
Seller, and (b) the documents deposited into the Escrow for delivery to Seller
at the Close of Escrow; and
4.7.2.6 Cause the Title Policy to be issued by the Title
Company and delivered to Buyer.
4.8 Costs of Escrow. Costs of the Escrow shall be allocated as follows:
4.8.1 Buyer and Seller shall each pay one-half (1/2) of the fees of
Escrow Holder;
4.8.2 Buyer and Seller shall each pay one-half (1/2) of the cost of
providing the Survey required to be delivered in accordance with the provisions
of SECTION 7.1; provided,
16
however, Buyer shall be responsible for the full cost of the Survey in the event
the Closing does not occur hereunder other than on account of default of Seller;
4.8.3 Buyer and Seller shall each pay one-half (1/2) of all
transfer taxes and recording fees payable in connection with the conveyance of
each portion of the Real Property and/or the recording of the Deed and any other
documents or instruments recorded pursuant to this Agreement (other than the
Assignment of Mortgage);
4.8.4 Buyer and Seller shall each pay one-half (1/2) of all sales
or other personal property taxes, levies, fees and charges payable as a result
of the transfer of the Personal Property to Buyer and the consummation of the
transactions contemplated hereby. Buyer shall be the reporting person for such
purposes and shall prepare the necessary sales tax reports based upon the
allocations set forth in SECTION 3.4. The parties acknowledge that additional
sales tax may be assessed as a result of the transfer of the Personal Property
to Buyer and the consummation of the transactions contemplated hereby after the
Closing and that Buyer and Seller shall continue to each be responsible for
one-half of any such additional taxes. The provisions of Section 4.8.3 and
Section 4.8.4 shall survive the Closing;
4.8.5 Buyer and Seller shall each pay one-half (1/2) of the cost
of obtaining the coverage under the Title Policy, except that the cost of any
special endorsements shall be paid exclusively by Buyer;
4.8.6 At Closing or thereafter Buyer shall pay for the cost of the
Value Letter;
4.8.7 Buyer shall pay any legal and other fees to obtain, and any
mortgage recording taxes payable in connection therewith, if any, in connection
with the Assignment of Mortgage;
4.8.8 If the Close of Escrow fails to occur other than as a result
of a default hereunder by either party, including, without limitation, as a
result of a failure of a condition precedent set forth in SECTION 9, the fees of
the Escrow Holder and Title Company (including, without limitation, cancellation
fees) shall be borne equally between Buyer and Seller;
4.8.9 If the Close of Escrow fails to occur as a result of a
default hereunder by either party, the fees of the Escrow Holder and Title
Company (including, without limitation, cancellation fees) shall be borne by the
defaulting party; and
4.8.10 Pursuant to Section 6045 of the Internal Revenue and
Taxation Code, the Title Company shall be designated the "Closing Agent"
hereunder and shall be solely responsible for complying with the Tax Reform Act
of 1986 with regard to the reporting of all settlement information to the
Internal Revenue Service.
4.9 Other Costs. Except as set forth in SECTION 4.8.6, SECTION 11.1
and SECTION 15.1.6, each party shall pay all of its own legal, accounting and
consulting fees and other costs and expenses incurred in connection with this
Agreement.
4.10 Maintenance of Confidentiality by Escrow Holder. Escrow Holder
shall maintain in strict confidence and not disclose to anyone the existence of
the Escrow, the identity of the parties thereto, the amount of the Purchase
Price, the existence or provisions of this Agreement or any other information
concerning the Escrow or the transactions contemplated hereby, without the prior
written consent of Buyer and Seller.
SECTION 5
PRORATIONS AND ASSUMPTION OF OBLIGATIONS
5.1 General. All income, receivables, expenses (whether payable or
prepaid) and payables of the Property shall be apportioned equitably between the
parties as of the Proration Time in accordance with the provisions of this
SECTION 5 (all prorations are to be based upon the number of days in a 365 day
year). The obligation to make apportionments under SECTIONS 5.1
17
AND 5.2 shall, unless otherwise expressly provided in this SECTION 5, survive
the Close of Escrow for a period of sixty (60) days at which time such
apportionment shall be final unless disputed during such period.
5.2 General and Specific Prorations. Without limitation, the following
items shall be apportioned:
5.2.1 At the Closing, Buyer shall assume all of the accounts
payable relating to goods and services ordered or obtained in the ordinary
course of operation of the business of the Hotel (including without limitation,
payments under the Service Contracts and Equipment Leases) prior to the
Proration Time. Seller shall be obligated to credit Buyer at the Close of Escrow
with an amount mutually agreed upon by Buyer and Seller at the Closing,
reflecting the parties' good faith estimate of such accounts payable as of the
Proration Time (which estimate shall deduct any discounts then available in the
ordinary course of business for the prompt payment of such accounts payable),
plus a further credit for any late fees then payable with respect to any
identified accounts payable. Buyer shall be responsible for paying when due all
accounts payable arising from the operation of the Property on or after the
Proration Time, and Seller shall have no further liability for such payables or
charges. As of the date which is sixty (60) days following the Closing Date,
Buyer and Seller shall calculate the amount of all accounts payable relating to
goods and services ordered or obtained in the ordinary course of operation of
the business of the Hotel (including without limitation, payments under the
Service Contracts and Equipment Leases) prior to the Proration Time. Seller
shall reimburse Buyer for any payments made on account of any such accounts
payable which were not reflected in the Parties' estimate of such amount
credited to Buyer at Closing and which have been paid by Buyer or for which
Buyer is obligated to pay in accordance with the provisions hereof, and if the
amount of such credit exceeds the amounts so paid or for which Buyer is so
obligated, Buyer shall pay such excess amount to Seller;
5.2.2 At the Closing, Seller shall assign to Buyer all of the
Accounts Receivable, for which Seller shall receive a credit at the Close of
Escrow in an amount equal to (a) the full, aggregate outstanding balance of the
Cash Equivalent Receivables (without discount except for service charges due to
charge card companies) plus (b) the full aggregate outstanding balance of the
Invoiced Receivables and Other Accounts Receivable as of the Proration Time,
provided, Buyer shall at its option accept or reject any Invoiced Receivables
and Other Accounts Receivable over ninety (90) days and Seller shall not receive
a credit for any Invoiced Receivables and Other Accounts Receivable over ninety
(90) days rejected by Buyer; provided, that Buyer shall at its own expense use
reasonable efforts to collect any such rejected Invoiced Receivables and Other
Accounts Receivable on behalf of Seller for a period of sixty (60) days after
the Closing Date and thereafter Seller shall have the right to collect same for
its own account; provided, further, as of the date which is sixty (60) days
following the Closing Date, Buyer and Seller shall make any adjustments required
to reflect the collectibility of any Invoiced Receivables and Other Accounts
Receivable (it being agreed that (a) any accounts receivable not listed on the
schedule of accounts receivable of the Property as of the date which is sixty
(60) days following the Closing Date shall be deemed paid as of such date and
(b) except as provided in (a), any accounts receivable which are more than
ninety (90) days past due as of the date which is sixty (60) days following the
Closing Date shall be deemed uncollectable as of such date) and Seller and Buyer
shall make a corresponding payment to the other as required to accurately
reflect the collectibility of such Invoiced Receivables and Other Accounts
Receivable and any accounts receivable deemed uncollectable as of such date in
accordance with the terms hereof shall be the property of Seller and Seller
shall be permitted at
18
its expense and for its own account to collect the same;
5.2.3 In prorating the Accounts Receivable, Buyer and Seller shall
each receive credit for one-half (1/2) of all Guest Ledger Receivables
attributable to the room night during which the Proration Time occurs. Seller
shall receive the income from all restaurant and bar facilities located at the
Property through the Proration Time and Buyer shall receive such income
thereafter;
5.2.4 [Intentionally Omitted]
5.2.5 All sales, use and occupancy taxes arising from the
operation of the Property shall be prorated as of the Proration Time;
5.2.6 Fees for transferable annual permits, licenses, and/or
inspection fees, if any, for periods during which the Proration Time occurs
shall be prorated as of the Proration Time;
5.2.7 Utility charges with respect to the Property levied against
Seller or the Property and the value of fuel stored on the Property shall be
prorated at Seller's cost therefor as of the Proration Time. Seller shall notify
all utilities, governmental agencies, suppliers and others providing services to
the Property of the prospective change in ownership and operation of the
Property, and Seller shall use its reasonable efforts to cause all utilities
furnished to the Property, including, but not limited to, electricity, gas,
water and sewer, along with any fuel storage tanks to be read the day prior to
the Proration Time;
5.2.8 Permitted administrative charges, if any, on Tenant Security
Deposits shall be prorated;
5.2.9 Buyer shall receive a credit for advance payments and/or
deposits, if any, under Bookings to the extent the Bookings relate to a period
after the Proration Time;
5.2.10 Vending machine monies will be removed by Seller as of the
Proration Time for the benefit of Seller;
5.2.11 Buyer shall purchase and Seller shall sell to Buyer (or
Seller shall receive a credit therefore) all xxxxx cash funds and cash in the
Property's house banks at 100% of face value at the Proration Time;
5.2.12 Wages, salaries and payroll taxes and other payroll
deductions for all Hotel Employees shall be apportioned as of the Proration Time
(i.e., the night shift shall be prorated 50/50 for the night preceding the
Closing Date). Buyer shall assume all accrued vacation benefits and sick leave
benefits due to such Hotel Employees which relate to any period prior to the
Proration Time and shall receive a credit for the full amount of all such
accrued benefits reasonably expected to be paid after the Closing Date;
provided, that as of the date which is sixty (60) days following the Closing,
Buyer and Seller shall adjust the amount of the credit if required to take into
account the benefits actually required to be paid by Buyer or then reasonably
expected to be paid following the Closing Date by Buyer. Buyer shall also assume
all obligations of Seller and the Employer Corporation, under the Employment
Agreements and/or the Management Agreement to pay all such wages, salaries, and
compensation set forth above accruing subsequent to Proration Time; provided,
however, that other than as set forth in SECTION 14.1 hereof, no provision
contained in this Agreement shall be construed to prevent the Buyer from
terminating or amending in any manner such Employment Agreements and Management
Agreements subsequent to the Proration Time. The obligation to pay bonuses, if
any, following the Closing shall be allocated as of the Proration Time and
adjusted between Buyer and Seller; and
5.2.13 Real and personal property taxes, assessments and special
district levies shall be prorated for the tax fiscal year in which the Closing
Date occurs on the basis of the then
19
most current available tax bills, Seller being charged through the day prior to
the Closing Date and Buyer with the Closing Date and thereafter.
5.3 Deposits. All rights to utility, assessment, and other cash
deposits (including, without limitation, any Utility Deposits) held by others
for Seller's account, and all certificates of deposit or other forms of cash
collateral held by or otherwise pledged to others for Seller's account to secure
obligations of Seller under Service Contracts, Equipment Leases or other
obligations assumed by Buyer, shall be assigned or transferred to Buyer at the
Close of Escrow; provided, that if any of such deposits are not transferable,
Seller shall retain all rights with respect thereto and there shall be no debit
made to Buyer on account thereof.
5.4 Tenant Leases. At the Close of Escrow, pursuant to the Assignment
and Assumption of Tenant Leases, Buyer shall assume all of the obligations of
Seller under the Tenant Leases as of the Proration Time, including, without
limitation, tenant improvement obligations of landlord thereunder and
obligations with respect to Tenant Security Deposits (to the extent received by
Buyer or credited to Buyer hereunder).
5.5 Service Contracts and Other Intangible Property. At the Close of
Escrow, Seller shall assign to Buyer pursuant to the terms of the General
Assignment and Assumption Agreement, all right, title and interest of Seller in
and to the Approved Service Contracts and other Intangible Property, and Buyer
shall assume all of the obligations of Seller under the Approved Service
Contracts arising from and after the Close of Escrow. Buyer shall protect, hold
harmless, indemnify and defend Seller and its directors, officers, agents,
affiliates, principals, partners, shareholders, representatives and controlling
persons from any Losses attributable to the period beginning on and after the
Closing Date with respect to the Approved Service Contracts. Seller shall be
responsible for all obligations thereunder attributable to the period prior to
the Closing Date with respect to Approved Service Contracts (except to the
extent that Buyer shall have received a credit hereunder with respect to any
such obligations). The provisions of this SECTION 5.5 shall survive the Close of
Escrow.
5.6 Tax Refunds and Proceedings. Buyer shall have the exclusive right
to commence or continue any proceeding to determine the assessed value of the
Property, the real or personal property taxes payable with respect to the
Property or any action to contest water charges, sewer charges, sales tax or use
tax for the relevant taxable period during which the Proration Time occurs and
to settle or compromise any claim thereof, and any refunds or proceeds resulting
from such proceedings along with the costs (including reasonable legal and
accounting fees) incurred by Buyer in obtaining the same, shall be prorated as
of the Proration Time. In prosecuting any such action, Buyer shall utilize the
services of Xxxxxx Xxxx & Co. Seller shall retain the right to continue,
commence, prosecute, settle or compromise any proceedings relating exclusively
to any relevant taxable period or periods prior to the period during which the
Proration Time shall occur. Buyer and Seller agree to cooperate with each other
and to execute any and all documents reasonably requested in furtherance of the
foregoing. The provisions of SECTION 5.6 shall survive the Closing.
5.7 Guest Baggage. As of the Close of Escrow, Buyer shall indemnify and
hold harmless Seller against all Losses with respect to all baggage of departed
guests or guests who are still registered at the Hotel on the Closing Date which
has been checked with the Hotel. As of the Close of Escrow, Seller shall assign
to Buyer all claims and causes of action against the Manager with respect to any
Losses with respect to such baggage. Seller agrees to submit to Seller's
Insurance any claims for Losses with respect to such baggage which arose from
acts or omissions prior to the Closing Date to the extent coverage is available
under said insurance and provide Buyer with the proceeds therefrom provided
Buyer is not in default under this SECTION
20
5.7. The provisions of this SECTION 5.7 shall survive the Closing.
5.8 Safe Deposit Boxes. As of the Close of Escrow, Buyer shall
indemnify and hold harmless Seller against all Losses with respect to the
contents of any safety deposit boxes in use at the Hotel. As of the Close of
Escrow, Seller shall assign to Buyer all claims and causes of action against the
Manager with respect to any Losses relating to said safety deposit boxes. Seller
agrees to submit to Seller's insurance any claims for Losses which arose from
acts or omissions prior to the Closing Date to the extent coverage is available
under said insurance and provide Buyer with the proceeds therefrom provided
Buyer is not in default under this SECTION 5.8. The provisions of this SECTION
5.8 shall survive the Closing.
5.9 Advance Bookings. Buyer shall assume and honor for its account all
Bookings relating to dates after the Proration Time set forth on the Schedule of
Advance Bookings delivered by Seller to Buyer at the Close of Escrow pursuant to
SECTION 4.2.1.9.
SECTION 6
REPRESENTATIONS AND WARRANTIES;
CONDITION OF PROPERTY
6.1 Of the Trust. As an inducement to Seller to enter into this
Agreement, the Trust hereby represents, warrants and covenants to Seller as
follows:
6.1.1 Power and Authority. The Trust is a real estate investment
trust duly organized and validly existing under the laws of the State of
Maryland. The Trust has the power and authority to carry on its present
business, to enter into this Agreement and to consummate the transactions herein
contemplated; neither the execution and delivery of this Agreement by the Trust,
nor the performance by the Trust of the Trust's obligations hereunder will
violate or constitute an event of default under any material terms or material
provisions of any agreement, document, instrument, judgment, order or decree to
which the Trust is a party or by which the Trust is bound and/or violate any
applicable law, rule or regulation, the violation of which would have a Material
effect upon the principal benefits intended to be provided by this Agreement.
6.1.2 Authorization; Valid Obligation. All proceedings required to
be taken by or on behalf of the Trust to authorize the Trust to make, deliver
and carry out the terms of this Agreement will be duly taken prior to the
Closing Date. No consent to the execution, delivery and performance of this
Agreement will be required from any partner, board of directors, shareholder,
creditor, investor, judicial or administrative body, governmental authority or
other person, other than any such consent which already has been (or prior to
the Closing will have been unconditionally given. The individuals executing this
Agreement and the documents referenced herein on behalf of the Trust have the
legal power, right and actual authority to bind the Trust to the terms and
conditions hereof. This Agreement is a valid and binding obligation of Trust,
enforceable in accordance with its terms, except as the same may be affected by
bankruptcy, insolvency, moratorium or similar laws, or by legal or equitable
principles relating to or limiting the rights of contracting parties generally.
6.1.3 Capital Structure. The authorized and outstanding capital
stock and units of the Trust and its operating partnership are as set forth in
the Starwood Disclosure. All Paired Shares to be issued as the Equity Purchase
Price at the Closing in accordance with this Agreement will, when so issued, be
duly authorized, validly issued, fully paid and nonassessable and free of
preemptive rights and will be paired with each other in the same ratio as all
other shares are paired with each other pursuant to the Pairing Agreement.
6.1.4 SEC Documents and Other Reports. The Trust has filed all
required documents with the SEC since January 1, 1996 (such documents together
with the Starwood
21
Disclosure being referred to herein as the "SEC Documents"). As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of applicable law, and, at the respective times they were filed,
none of the SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The consolidated financial statements (including, in each
case, any notes thereto) of the Trust included in the SEC Documents complied as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto as of their
respective dates of filing, were prepared in accordance with generally accepted
accounting principles (except, in the case of the unaudited statements, as
permitted by Regulation S-X of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto)
and fairly presented the consolidated financial position of the Trust and its
consolidated subsidiaries as of the respective dates thereof and the
consolidated results of their operations and their consolidated cash flows for
the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments and to any other adjustments described therein).
Except as disclosed in the SEC Documents or as required by generally accepted
accounting principles, the Trust has not, since December 31, 1996, made any
change in the accounting practices or policies applied in the preparation of
their financial statements. Prior to the Closing Date, the Trust will file all
required documents with the SEC, which documents will comply in all material
respects with the requirements of the applicable law, and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
6.1.5 Absence of Certain Changes or Events. Except as disclosed in
the SEC Documents filed prior to the date of this Agreement, since December 31,
1996, (a) there have not been any events, changes or developments that,
individually or in the aggregate, have had or would reasonably be expected to
have, a material adverse change in or effect on the financial condition,
properties, business, results of operations or prospects of the Trust and its
subsidiaries taken as a whole, or (b) there has not been any split, combination
or reclassification of any of the capital stock or units of the Trust or its
operating partnership or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of, or in substitution for shares of
such capital stock.
6.1.6 Actions and Proceedings. Except as set forth in the SEC
Documents filed prior to the date of this Agreement, there are no outstanding
orders, judgments, injunctions, awards or decrees of any governmental entity
against or involving the Trust or any of its subsidiaries, or against or
involving any of the directors, officers or employees of the Trust or any of its
subsidiaries, as such, or any of its or their properties, assets or business
that, individually or in the aggregate, have had, or would reasonably be
expected to have, a material adverse change in or effect on the financial
condition, properties, business, results of operations or prospects of the Trust
and its subsidiaries taken as a whole. Except as set forth in the SEC Documents,
there are no actions, suits or claims or legal, administrative or arbitrative
proceedings or investigations pending or, to the knowledge of the Trust,
threatened against or involving the Trust or any of its subsidiaries or any of
their directors, officers or employees, as such, or any of its or their
properties, assets or business that, individually or in the aggregate, have had,
or would reasonably be expected to have, a material adverse change in or effect
on the financial condition, properties, business, results of operations or
prospects of the Trust and its subsidiaries taken as a whole. As of the date
hereof, there are no actions, suits, labor disputes or
22
other litigation, legal or administrative proceedings or governmental
investigations pending or, to the knowledge of the Trust, threatened against or
affecting the Trust or any of their subsidiaries or any of their officers,
directors or employees, as such, or any of their properties, assets or business
relating to the transactions contemplated by this Agreement.
6.1.7 REIT Status. The Trust is currently a "real estate investment
trust" ("REIT") for federal income tax purposes and, to its knowledge, the Trust
is and at all times during the testing period described in Code Section
897(h)(4)(D) has been a "domestically controlled REIT" (as defined in Section
897(h)(4)(D) of the Code). From and after January 1, 1995, neither the Internal
Revenue Service nor any other taxing entity or authority has made any assertion
that the Trust does not qualify as a REIT for income tax purposes, nor has there
been any challenge to the REIT status of the Trust. From time to time upon
request by the Seller or its assigns after the Closing Date, the Trust agrees to
inform Seller or such assigns whether to its knowledge it complies with the
representation and warranties set forth in this Section 6.1.7.
6.1.8 Partnership Status. Starwood Realty Partnership is classified
and taxable as a partnership for U.S. federal income tax purposes.
6.1.9 Xxxx-Xxxxx-Xxxxxx Act. The provisions of the
Xxxx-Xxxxx-Xxxxxx Act are not applicable to the transactions contemplated hereby
and neither the Trust nor Seller is required to make any filings or submissions
or obtain any approvals thereunder in connection herewith.
6.2 Of the Corporation. As an inducement to Seller to enter into this
Agreement, the Corporation hereby represents, warrants and covenants to Seller
as follows:
6.2.1 Power and Authority. The Corporation is a corporation duly
organized and validly existing under the laws of the State of Maryland. The
Corporation has the power and authority to carry on its present business, to
enter into this Agreement and to consummate the transactions herein
contemplated; neither the execution and delivery of this Agreement by the
Corporation nor the performance by the Corporation of the Corporation's
obligations hereunder will violate or constitute an event of default under any
material terms or material provisions of any agreement, document, instrument,
judgment, order or decree to which the Corporation is a party or by which the
Corporation is bound and/or violate any applicable law, rule or regulation, the
violation of which would have a Material effect upon the principal benefits
intended to be provided by this Agreement.
6.2.2 Authorization; Valid Obligation. All proceedings required to
be taken by, or on behalf of the Corporation, to authorize the Corporation to
make, deliver and carry out the terms of this Agreement will be duly taken prior
to the Closing Date. No consent to the execution, delivery and performance of
this Agreement will be required from any partner, board of directors,
shareholder, creditor, investor, judicial or administrative body, governmental
authority or other person, other than any such consent which already has been
(or prior to the Closing will have been) unconditionally given. The individuals
executing this Agreement and the documents referenced herein on behalf of the
Corporation have the legal power, right and actual authority to bind the
Corporation to the terms and conditions hereof. This Agreement is a valid and
binding obligation of Corporation, enforceable in accordance with its terms,
except as the same may be affected by bankruptcy, insolvency, moratorium or
similar laws, or by legal or equitable principles relating to or limiting the
rights of contracting parties generally.
6.2.3 Capital Structure. The authorized and outstanding capital
stock and units of the Corporation and its operating partnership are as set
forth in the Starwood Disclosure. All Paired Shares to be issued as the Equity
Purchase Price at the Closing in accordance with this Agreement will, when so
issued, be duly authorized, validly issued, fully paid and
23
nonassessable and free of preemptive rights and will be paired with each other
in the same ratio as all other shares are paired with each other pursuant to the
Pairing Agreement.
6.2.4 SEC Documents and Other Reports. The Corporation has filed
all required SEC Documents since January 1, 1996. As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the
applicable law, and, at the respective times they were filed, none of the SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The consolidated financial statements (including, in each case,
any notes thereto) of the Corporation included in the SEC Documents complied as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto as of their
respective dates of filing, were prepared in accordance with generally accepted
accounting principles (except, in the case of the unaudited statements, as
permitted by Regulation S-X of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto)
and fairly presented the consolidated financial position of the Corporation and
its consolidated subsidiaries as of the respective dates thereof and the
consolidated results of their operations and their consolidated cash flows for
the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments and to any other adjustments described therein).
Except as disclosed in the SEC Documents or as required by generally accepted
accounting principles, the Corporation has not, since December 31, 1996, made
any change in the accounting practices or policies applied in the preparation of
their financial statements. Prior to the Closing Date, the Corporation will file
all required documents with the SEC, which documents will comply in all material
respects with the requirements of the applicable law, and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
6.2.5 Absence of Certain Changes or Events. Except as disclosed in
the SEC Documents filed prior to the date of this Agreement, since December 31,
1996, (a) there have not been any events, changes or developments that,
individually or in the aggregate, have had or would reasonably be expected to
have, a material adverse change in or effect on the financial condition,
properties, business, results of operations or prospects of the Corporation and
its subsidiaries taken as a whole, or (b) there has not been any split,
combination or reclassification of any of the capital stock or units of the
Corporation or its respective operating partnerships or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of such capital stock.
6.2.6 Actions and Proceedings. Except as set forth in the SEC
Documents filed prior to the date of this Agreement, there are no outstanding
orders, judgments, injunctions, awards or decrees of any governmental entity
against or involving the Corporation or any of its subsidiaries, or against or
involving any of the directors, officers or employees of the Corporation or any
of its subsidiaries, as such, or any of its or their properties, assets or
business that, individually or in the aggregate, have had, or would reasonably
be expected to have, a material adverse change in or effect on the financial
condition, properties, business, results of operations or prospects of the
Corporation and its subsidiaries taken as a whole. Except as set forth in the
SEC Documents, there are no actions, suits or claims or legal, administrative or
arbitrative proceedings or investigations pending or, to the knowledge of the
Corporation, threatened against or involving the Corporation or any of its
subsidiaries or any of their
24
directors, officers or employees, as such, or any of its or their properties,
assets or business that, individually or in the aggregate, have had, or would
reasonably be expected to have, a material adverse change in or effect on the
financial condition, properties, business, results of operations or prospects of
the Corporation and its subsidiaries taken as a whole. As of the date hereof,
there are no actions, suits, labor disputes or other litigation, legal or
administrative proceedings or governmental investigations pending or, to the
knowledge of the Corporation, threatened against or affecting the Corporation or
any of their subsidiaries or any of their officers, directors or employees, as
such, or any of their properties, assets or business relating to the
transactions contemplated by this Agreement.
6.2.7 Starwood Operating Partnership is classified and taxable as a
partnership for U.S. Federal Income Tax purposes.
6.2.8 Xxxx-Xxxxx-Xxxxxx. The provisions of the Xxxx-Xxxxx-Xxxxxx
Act are not applicable to the transactions contemplated hereby and neither the
Corporation nor Seller is required to make any filings or submissions to obtain
any approvals thereunder in connection herewith.
6.3 Of Seller. As an inducement to Buyer to enter into this Agreement,
Seller, represents, warrants and covenants to Buyer as follows:
6.3.1 Regarding Seller's Authority.
6.3.1.1 Seller is a limited partnership in dissolution under
the laws of the State of New York. Seller has the power and authority to enter
into this Agreement and the Conveyance Documents and, to sell the Property on
the terms set forth in this Agreement. The execution and delivery hereof and the
performance by Seller of its obligations hereunder, will not violate or
constitute an event of default under any material terms or material provisions
of any agreement, document, instrument, judgment, order or decree to which
Seller is a party or by which Seller is bound and/or violate any applicable law,
rule or regulation, the violation of which would have a Material effect upon the
principal benefits intended to be provided by this Agreement.
6.3.1.2 The individuals executing this Agreement and the
documents referenced herein on behalf of Seller have the legal power, right and
actual authority to bind Seller to the terms and conditions hereof. This
Agreement is a valid and binding obligation of Seller, enforceable in accordance
with its terms, except as the same may be affected by bankruptcy, insolvency,
moratorium or similar laws, or by legal or equitable principles relating to or
limiting the rights of contracting parties generally.
6.3.2 Tenant Leases. There are no leases, licenses or concessions
for space which will affect the Real Property or any portion thereof following
the Close of Escrow other than as set forth on the Schedule of Tenant Leases.
Seller has delivered to Buyer a true, correct and complete copy of each lease
and agreement listed on the Schedule of Lease. Seller has not received written
notice of any sublease and/or assignment of any Tenant Lease except as set forth
on SCHEDULE 6.3.2. No outstanding written notice of any Material default has
been delivered by Seller or received by Seller with respect to any Tenant Lease,
except as disclosed on the SCHEDULE 6.3.2 annexed hereto and made a part hereof.
To Seller's knowledge, all rent under the leases listed on the Schedule of
Leases is being paid currently. All Material brokerage, leasing and other
commissions due in connection with the Tenant Leases have been paid by Seller
other than those payable with respect to the renewal or extension of such Tenant
Leases or expansion of the leased premises thereunder after the Closing Date,
each of which are payable under agreements described on SCHEDULE 6.3.2.
6.3.3 Service Contracts. There are no Service Contracts which will
affect the
25
Property after the Closing Date except for the Approved Service Contracts. No
outstanding written notice of any Material default has been delivered by Seller
or received by Seller with respect to any Approved Service Contract, except as
disclosed on SCHEDULE 6.3.3 annexed hereto and made a part hereof.
6.3.4 Claims. There are no pending litigation or condemnation
proceedings with respect to Seller or the Property which would result in an
adverse effect on the ability of Buyer to operate the Property after the
Closing, except as disclosed on SCHEDULE 6.3.4 annexed hereto and made a part
hereof. There is no pending litigation or to Seller's knowledge, other claims of
Seller with respect to the Property attributable to the period prior to the date
hereof which may result in a material judgment in favor of Seller except as
disclosed on SCHEDULE 6.3.4.
6.3.5 Employees. To Seller's Knowledge, SCHEDULE 1.1.6 sets forth
a true and complete list of all Hotel Employees as of the Execution Date
together with their positions, salaries or hourly wages, as applicable, and
years of service. Except for or pursuant to the Employment Agreements, the
Collective Bargaining Agreements, the Management Agreement and the agreements
related to the Xxxx-Xxxxxxx management of the Hotel described on SCHEDULE 6.3.5
hereto, neither Seller nor the Employer Corporation has relating to the Property
(i) at any time maintained, contributed to or participated in, (ii) or had at
any time obligation to maintain, contribute to, or participate in, or (iii) any
liability or contingent liability, direct or indirect, with respect to: any
employment agreement, oral or written retirement or deferred compensation plan,
incentive compensation plan, stock plan, unemployment compensation plan,
vacation pay plan, severance plan, bonus plan, stock compensation plan or any
other type or form of employee-related (or independent contractor-related)
arrangement, program, policy, plan or agreement. Except as set forth on SCHEDULE
6.3.5, to Seller's knowledge there is no Material default under any of the
Employment Agreements.
6.3.6 Compliance with Laws. During the past twelve (12) months,
Seller has not received any written notice from any party, including, without
limitation, from any municipal, state, federal or other governmental authority,
of a Material violation of any zoning, building, fire, water, use, health, or
other similar statute, ordinance, or code bearing on the construction, operation
or use of the Property or any part thereof (other than as to matters previously
cured), except as disclosed on SCHEDULE 6.3.6 annexed hereto and made a part
hereof and except for violations of Environmental Laws, which are addressed in
SECTION 6.3.7 below.
6.3.7 Hazardous Materials. Seller has not received any written
notice from any municipal, state, federal or other governmental authority or
from any other person during the last three (3) years of (a) any Material
violation of applicable Environmental Laws or (b) any Environmental Condition
requiring Material remediation under applicable Environmental Laws, in either
case only to the extent relating to Environmental Conditions at or on the Real
Property, except as disclosed on SCHEDULE 6.3.7 annexed hereto and made a part
hereof;
6.3.8 Records and Plans. Seller will have delivered to Buyer on
the Closing Date true and correct copies of the Records and Plans.
6.3.9 Licenses and Permits. Seller has delivered to Buyer true and
correct copies of the Liquor License and all other Material Licenses and Permits
and such Licenses and Permits are identified on SCHEDULE 6.3.9 annexed hereto
and made a part hereof.
6.3.10 Management Agreements. There are no hotel management or
property management agreements, which will be binding upon Buyer after the
Closing Date, other than the Management Agreement, a true and complete copy of
which will be delivered to Buyer on the Closing Date. Seller has not sent or
received any notice of default or notice of termination
26
under or with respect to the Management Agreement.
6.3.11 Personal Property. Seller owns the Tangible Personal
Property (other than the Tangible Personal Property that is subject to the
Equipment Leases) free and clear of any liens and/or encumbrances other than the
Permitted Encumbrances.
6.3.12 Insurance. The Seller in respect of the Real Property is
insured under those policies of casualty and general liability insurance
("Seller's Insurance") described on SCHEDULE 6.3.12 annexed hereto, each of
which is in full force and effect as of the date hereof and will remain in full
force and effect through the Closing Date. Seller has received no notices of any
Material default or demands to cure from any applicable insurer in respect of
Seller's Insurance.
6.3.13 Real Estate Taxes. Except as set forth on SCHEDULE 6.3.13
annexed hereto and made a part hereof, Seller has not commenced any proceedings
which are pending for the reduction of the assessed valuation of the Real
Property or any portion thereof, and other than the Permitted Encumbrances, to
Seller's Knowledge, there are no special assessments affecting the Property.
Nothing in this SECTION 6.3.13 or any other provision of this Agreement shall be
construed to limit Seller's rights to initiate or prosecute after the Close of
Escrow additional proceedings for property tax refunds for taxes relating to any
relevant taxable period or periods prior to the taxable period during which the
Proration Time occurs.
6.3.14 Residential Apartments; Rent Regulations. Except for
Apartment 1706, which is currently leased to Xxxxxx Xxxxx, there are no rooms at
the Property that are leased to third parties as residential apartments whether
through written or statutory leases. Except for Apartment 1706, there are no
apartments at the Property that are subject to Rent Control, Rent Stabilization
or any similar governmental rent regulation.
6.3.15 Regarding The Ground Lease. There is no outstanding default
of lessee under the Ground Lease. Seller has not received any notice by or on
behalf of lessor thereunder or otherwise claiming a default under the Ground
Lease. The Ground Lease has not been amended or modified whether by agreement of
lessor and lessee, pursuant to the order of any court or otherwise except as set
forth in SCHEDULE 1.1.5 hereto.
6.4 Buyer's Review of Records and Plans.
6.4.1 Access to Records and Plans; Specific Disclosures. Buyer
acknowledges that prior to the Closing Date, Buyer has been provided with such
access to the Records and Plans and such other information relating to the Hotel
as Buyer has deemed relevant. Buyer acknowledges that it (a) has been made aware
of and given an opportunity to inquire into the Specific Disclosure Matters
described herein; (b) has been given access to the Property and the opportunity
to conduct such inquiries and analyses as Buyer has deemed necessary or
appropriate in order to evaluate the physical condition of the Property and any
and all other matters concerning the current and future use, feasibility, or
value, or any other matter or circumstance relevant to Buyer concerning the
Property or its marketability; and (c) the Records and Plans and the other books
and records of Seller with respect to the Hotel may not be complete.
6.4.2 Limitation on Access to Records and Plans. Notwithstanding
anything in this Agreement to the contrary, Buyer acknowledges and agrees that
the Records and Plans or other information made available to or delivered to
Buyer prior to, or at the Closing, shall not include any information which is
privileged, confidential or proprietary to Seller or any of its constituent
partners or affiliates, including without limitation, (i) Seller's internal
financial analyses, any appraisals undertaken for Seller or other parties,
income tax returns, financial statements, corporate or partnership governance
records, investment advisory records, and other
27
records concerning Seller's professional relationships, any Hotel Employee
personnel files (prior to the Closing), or any other internal, proprietary, or
confidential information, files, or records of Seller, (ii) the work papers,
memoranda, analysis, correspondence, and similar materials prepared by or for
Seller in connection with the negotiation and documentation of the transaction
contemplated hereby or any other offer to purchase the Property received by
Seller, and (iii) any documents or communications subject to the attorney/client
privilege or attorney work product privilege. Buyer expressly agrees that its
review of the Records and Plans, and any and all other information of any type
or nature, whether oral or written, provided to Buyer by or on behalf of Seller
and relating to the Property (collectively, the "PROPERTY INFORMATION") is for
informational purposes only, and neither Seller nor any agent, advisor, officer,
attorney, representative or other person acting or purporting to act on behalf
of Seller has verified either the accuracy of the Property Information, or the
adequacy of any method used to compile the Property Information or the
qualifications of any person preparing the Property Information except that, in
delivering or making available a copy of any document or papers to Buyer, Seller
has delivered or made available copies of the originals of such documents or
papers in Seller's possession or included in the Records and Plans. Except as
expressly set forth in this SECTION 6, neither Seller nor any agent, advisor,
officer, attorney, representative or other person acting or purporting to act on
behalf of Seller is making or giving any representation or warranty about, or
assuming any responsibility for, the accuracy or completeness of the Property
Information. Reliance by Buyer upon any Property Information shall not create or
give rise to any liability of or against Seller or any agent, advisor, officer,
attorney, representative or other person acting or purporting to act on behalf
of Seller. Subject to Seller's express representations and warranties set forth
herein, the consummation of the Closing shall constitute Buyer's unconditional
approval of all aspects of the Property and Buyer's unconditional acknowledgment
that Buyer has had the opportunity to request from Seller and review such
documents and materials relating of the Property as Buyer deems appropriate. All
copies of such documents delivered to Buyer shall be returned to Seller if the
Closing fails to occur for any reason.
6.5 PURCHASE AS IS. BUYER REPRESENTS, WARRANTS AND COVENANTS TO SELLER
THAT BUYER HAS INDEPENDENTLY AND PERSONALLY INSPECTED THE PROPERTY AND THE
PROPERTY INFORMATION AND THAT BUYER HAS ENTERED INTO THIS AGREEMENT BASED UPON
SUCH PERSONAL EXAMINATION AND INSPECTION. BUYER ACCEPTS THE PROPERTY, IN ITS
CONDITION ON THE CLOSE OF ESCROW AS-IS AND WITH ALL ITS FAULTS, INCLUDING
WITHOUT LIMITATION, ANY FAULTS AND CONDITIONS SPECIFICALLY REFERENCED IN THIS
AGREEMENT. NO PERSON ACTING ON BEHALF OF SELLER IS AUTHORIZED TO MAKE, AND BY
EXECUTION HEREOF, BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS SPECIFICALLY
PROVIDED IN THIS AGREEMENT, SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY
NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS,
AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR
IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH
RESPECT TO:
(A) THE VALUE OF THE PROPERTY;
(B) THE INCOME TO BE DERIVED FROM THE PROPERTY;
(C) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL
28
ACTIVITIES AND USES WHICH BUYER MAY CONDUCT THEREON;
(D) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY;
(E) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE
PROPERTY;
(F) THE NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING
WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY;
(G) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY
LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY
OR BODY;
(H) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY,
INCORPORATED INTO THE PROPERTY;
(I) THE COMPLIANCE OF THE PROPERTY WITH ANY ENVIRONMENTAL LAWS OR
THE AMERICANS WITH DISABILITIES ACT;
(J) THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AT, ON, UNDER,
OR ADJACENT TO THE PROPERTY;
(K) THE CONTENT, COMPLETENESS OR ACCURACY OF ANY OF THE RECORDS AND
PLANS OR OTHER INFORMATION PROVIDED BY SELLER TO BUYER WITH RESPECT TO THE
PROPERTY;
(L) THE CONFORMITY OF THE IMPROVEMENTS TO ANY PLANS OR
SPECIFICATIONS FOR THE PROPERTY, INCLUDING ANY PLANS AND SPECIFICATIONS THAT MAY
HAVE BEEN OR MAY BE PROVIDED TO BUYER;
(M) THE CONFORMITY OF THE PROPERTY TO PAST, CURRENT OR FUTURE
APPLICABLE ZONING OR BUILDING REQUIREMENTS;
(N) DEFICIENCY OF ANY UNDER SHORING;
(O) DEFICIENCY OF ANY DRAINAGE;
(P) THE FACT THAT ALL OR A PORTION OF THE PROPERTY MAY BE LOCATED
ON OR NEAR AN EARTHQUAKE FAULT LINE;
(Q) THE EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING
ENTITLEMENTS AFFECTING THE PROPERTY;
(R) WITH RESPECT TO ANY OTHER MATTER CONCERNING THE PROPERTY
(INCLUDING, WITHOUT LIMITATION, THE TENANT LEASES, THE EQUIPMENT LEASES, ANY
FIXTURES AND EQUIPMENT, THE LICENSES AND PERMITS, THE PERSONAL PROPERTY, THE
SERVICE CONTRACTS, THE EMPLOYMENT CONTRACTS, ANY EMPLOYEE BENEFIT PLANS AND THE
LIQUOR LICENSE) EXCEPT AS MAY BE OTHERWISE EXPRESSLY STATED HEREIN;
(S) THE GROUND LEASE;
(T) ANY OF THE SPECIFIC DISCLOSURE MATTERS; OR
(U) WITHOUT LIMITING THE OTHER DISCLAIMERS SET FORTH HEREIN BUT
SUBJECT TO THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS
AGREEMENT, THE ASSIGNMENTS AND CONVEYANCES OF THE PERSONAL PROPERTY, THE
MANAGEMENT AGREEMENT AND THE GROUND LEASE, ARE WITHOUT ANY EXPRESS OR IMPLIED
WARRANTIES OR REPRESENTATIONS OF ANY KIND WHATSOEVER, INCLUDING, WITHOUT
LIMITATION, (1) WARRANTIES AS TO THE VALIDITY, ENFORCEABILITY OR ASSIGNABILITY
OF THE MANAGEMENT AGREEMENT, (2) WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR USE OR PURPOSE, (3)
29
WARRANTIES RELATING TO THE DESIGN, CONDITION, QUALITY, WORKMANSHIP OR CAPACITY
OF THE TANGIBLE PERSONAL PROPERTY, (4) REPRESENTATIONS OR WARRANTIES THAT THE
TANGIBLE PERSONAL PROPERTY IS IN COMPLIANCE WITH ALL LAWS, STATUTES, ORDINANCES
RULES, REGULATIONS, SPECIFICATIONS OR CONTRACTS PERTAINING THERETO, (5)
WARRANTIES AGAINST PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, AND (F)
WARRANTIES AS TO THE VALIDITY, ENFORCEABILITY, OR COLLECTIBILITY OF ANY ITEM.
6.6 Limitation on Representations and Warranties of Seller. In no event
shall Buyer be entitled to seek recovery against Seller for an alleged breach of
any representation or warranty by Seller if the information, transaction, or
occurrence alleged to give rise to such breach was disclosed to, made available
to or discovered by Buyer, whether in the course of its review of the Records
and Plans or otherwise, prior to the Close of Escrow (the sole adjustment with
respect to same being as set forth in SECTION 6.7 below). Without limiting the
foregoing, each of the representations and warranties by Seller set forth herein
shall be deemed to be qualified in their entirety by the Specific Disclosure
Matters in addition to any other qualifications of such representations and
warranties.
6.7 Right to Supplement Disclosures. At any time prior to the Closing,
Seller may add additional disclosures to the Specific Disclosure Matters and the
Schedules referenced in this SECTION 6, and may make appropriate revisions
thereto, provided, however, that any such revisions do not in the aggregate
disclose any matter or matters which would reasonably be expected to have an
impact upon the value of the Property in excess of the amount of the Deposit;
and provided, further, that the receipt of any notice of termination under the
Management Agreement shall not be deemed to create any diminution in value to
the Property. In the event that Buyer or Seller discovers any matter or matters
which would be expected to exceed the Threshold Amount, then, in such event, the
provisions of SECTION 7.1.1 shall apply.
6.8 Basket. In no event will Seller be liable to Buyer for any breach
of a representation or warranty hereunder unless and to the extent the Loss
actually and directly incurred by Buyer as results of such breach together with
the Loss actually and directly incurred by Buyer as results of any other
breach(s) in the aggregate exceed the Threshold Amount, provided, that in no
event shall Seller have any liability to Buyer for any consequential damages
arising from a breach by Seller of any representation or warranty unless such
breach results from the intentional concealment by Seller.
6.9 Survival. The Trust, the Corporation and Seller each hereby
covenants and agrees with the other that the representations and warranties of
the Trust, the Corporation and Seller (as the case may be) set forth in SECTIONS
6.1.1 through 6.1.3, inclusive, SECTION 6.2.1 through SECTION 6.2.3, inclusive
and SECTION 6.3.1 and SECTION 6.3.2 shall survive the Close of Escrow without
limitation as to duration. The remaining warranties and representations set
forth in SECTION 6 shall survive the Close of Escrow until the date which is one
(1) year following the Closing Date, at which time such representations and
warranties shall expire unless prior to such time Buyer or Seller, as the case
may be, have duly commenced an action in a court of competent jurisdiction,
alleging a breach of such representation or warranty. Notwithstanding anything
herein to the contrary, in no event shall either Buyer or Seller have any right
to make a claim after the Closing with respect to any representation or
warranty, the breach of which such party shall have discovered prior to the
Closing, unless such party shall have notified the other party of such breach
prior to the Close of Escrow. Nothing contained in this SECTION 6.9 shall limit
the right of Seller to any remedy otherwise available under Federal
30
or other applicable securities law.
SECTION 7
TITLE TO THE REAL PROPERTY:
EXTENSION OF THE CLOSING
7.1 Buyer's Review of Title. Seller has caused to be delivered to Buyer
and Buyer's Counsel a current preliminary title commitment for title insurance
issued by the Title Company showing the condition of title to the Real Property
(the "Preliminary Title Report") together with a copy of all documents
evidencing or creating the exceptions to title referenced therein.
7.1.1 Failure to Satisfy Certain Closing Conditions; Monetary
Liens. On or prior to the Close of Escrow, Seller shall be obligated (i) to
cause to be insured over or removed of record all Monetary Liens affecting the
Seller's interest in the Real Property as of the date hereof; and (ii) to remove
or to bond over any Monetary Lien arising after the issuance of the Preliminary
Title Report which (a) was created by or with the consent of Seller, or (b) is
in an amount less than or equal to the Deposit. In the event that any Monetary
Lien not reflected on the Preliminary Title Report exceeds the Deposit and was
not created by or with the consent of Seller or any other title defect or other
matters arise which requires Seller to supplement its disclosure pursuant to
SECTION 6.7 and which in the aggregate may create a diminution in value to the
Property in excess of the Deposit, and/or the Ground Lease Estoppel has not been
obtained on or prior to the Closing Date in the form required pursuant to
SECTION 9.1.4. (i) the Deposit shall be refunded by Escrow Holder to Buyer on
February 28, 1998 if the Closing does not occur by such date in accordance with
the provisions hereof; (ii) the Scheduled Closing Date shall be extended and
Seller shall use all reasonable efforts, to remove or bond over or otherwise
cause the Title Company to omit such Monetary Lien as an exception from coverage
under the Title Policy and/or remove or cure as applicable such other defect or
condition or obtain the Ground Lease Estoppel as applicable; and (iii) Buyer
shall be permitted to record the Memorandum of Contract in the real property
records of the state and county in which the Real Property is located. In the
event that the Scheduled Closing Date is so extended and Seller is able to
remove or cure such Monetary Lien, remove or cure as applicable the title defect
or other condition and/or the Ground Lease Estoppel is delivered as is required,
a consent to the transfer of the Ground Lease is obtained in form reasonably
acceptable to Buyer and Seller or a judicial determination that no default
exists is obtained as provided below, the Close of Escrow shall occur as soon as
practicable following such removal, cure, or delivery with time being of the
essence as to the performance of both Buyer's and Seller's obligations
hereunder. THE PARTIES ACKNOWLEDGE AND AGREE THAT DAMAGES WILL NOT BE AN
ADEQUATE REMEDY TO SELLER IF BUYER SHALL DEFAULT IN ITS OBLIGATION TO CLOSE IN
ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 7.1.1 AND CONSEQUENTLY THAT
BUYER'S OBLIGATIONS UNDER THIS SECTION 7.1.1 SHALL BE SPECIFICALLY ENFORCEABLE
AGAINST THE TRUST. IN CONSIDERATION FOR THE REFUND TO BUYER OF THE DEPOSIT
PROVIDED FOR UNDER THIS SECTION 7.1.1, THE RIGHT OF BUYER TO RECORD THE
MEMORANDUM OF CONTRACT PURSUANT TO THIS SECTION 7.1.1, SELLER'S AGREEMENT TO
ENTER INTO THE INTERIM MANAGEMENT AGREEMENT PURSUANT TO THE PROVISIONS OF THIS
SECTION 17.20 (UNDER WHICH AGREEMENT THE VALUE OF THE HOTEL MAY BE AFFECTED BY
THE PERFORMANCE BY THE MANAGER OF ITS RESPONSIBILITIES THEREUNDER) AND TO
ENCUMBER THE PROPERTY WITH THIS AGREEMENT FOR A PERIOD OF UP TO FIVE (5) YEARS
IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 7.1.1
31
AND IN LIGHT OF THE RISKS WHICH SELLER WILL BE ASSUMING AS A RESULT IN RELATION
TO THE VALUE OF THE EQUITY PURCHASE PRICE TO BE DELIVERED IF AND WHEN THE
CLOSING OCCURS HEREUNDER, THE PARTIES HAVE AGREED THAT THE PROVISIONS OF THIS
SECTION 7.1.1 ARE SPECIFICALLY ENFORCEABLE AGAINST THE TRUST AS AND TO THE
EXTENT PROVIDED IN THE PRECEDING SENTENCE. In the event that a Monetary Lien
cannot be removed or cured or a title defect or other condition cannot be
removed or cured as required hereunder to close within five (5) years of the
date of this Agreement, this Agreement shall terminate and the parties hereto
shall have no further obligations. In the event that the Ground Lease Estoppel
is not obtained by April 15, 1998, then, in such event, Seller shall, upon
written request of Buyer at any time thereafter, at its expense and with the
full cooperation and support of Buyer at its expense, commence and prosecute to
completion a lawsuit against lessor under the Ground Lease to obtain the
delivery of the Ground Lease Estoppel or, in the alternative, a consent to the
transfer of the Ground Lease in form reasonably acceptable to Buyer or a
judicial determination that no default then exists under the Ground Lease and
the Scheduled Closing Date shall be extended until such time as such Ground
Lease Estoppel is obtained, a consent is given or a judicial determination is so
made. (The satisfaction of one or more of the foregoing conditions being
referred to herein as the "Ground Lease Transfer Requirement").
7.1.2 [Intentionally omitted]
7.2 Title Insurance Policy. Buyer's title to the Real Property shall be
insured at Closing by an ALTA extended coverage owner's policy or policies of
title insurance in the amount of the Purchase Price (the "Title Policy") issued
by the Title Company, insuring title to the Improvements and the lessee's
interest under the Ground Lease vested in Buyer, subject only to the Permitted
Encumbrances, together with such customary endorsements or affirmative insurance
as may be reasonably requested by Buyer and purchased at Buyer's sole cost and
expense.
7.3 Title to Real Property. At the Close of Escrow, title to the
Improvements and the lessee's interest under the Ground Lease will be conveyed
to Buyer by Seller pursuant to the Deed and the Assignment of Ground Lease,
subject only to the matters of title respecting the Property shown on SCHEDULE
7.3 annexed hereto and, if the Closing is delayed pursuant to SECTION 7.1.1, any
additional easements, covenants, conditions, restrictions or other matters
entered into with the prior written consent of Buyer which consent shall not be
unreasonably withheld, delayed or conditioned (collectively, the "Permitted
Encumbrances"); Buyer agrees to rely exclusively on the Title Policy for
protection against any title defects except as set forth in SECTION 7.1.2. Buyer
shall have no claim following the Closing against Seller on account of the
Permitted Encumbrances. Buyer's agreement under this SECTION 7.1 shall survive
the execution, delivery, and recordation of the Deed and the Assignment of
Ground Lease.
SECTION 8
INTERIM ACTIVITIES
During the period from the Execution Date through the Close of Escrow,
Seller shall (subject to the provisions of the Interim Management Agreement if
entered into in accordance with the provisions of this Agreement) cause the
Property to be continued to be operated in ordinary course as a hotel consistent
with current operating practices during the period since Manager has been
manager of the Hotel. Buyer shall have the right to enter onto and inspect the
Property, from and after the date hereof, through the Closing Date to inspect
the Property and otherwise perform its due diligence provided such inspections
are performed upon prior notice to Seller and so as not to interfere with the
operation of the Property or to disclose the pendency
32
of the transaction contemplated hereby. All fees and expenses of any kind
relating to the inspection of the Property by Buyer will be paid for by Buyer.
Buyer agrees to keep the Property free from any liens arising out of or in
connection with Buyer's or its agents entry or the Property. Buyer shall at its
sole cost and expense, clean up and repair the Property as reasonably necessary
after Buyer's or its agents entry thereon. Buyer shall hold harmless, indemnify
and defend Seller from all Losses relating to any action by Buyer, its
Affiliates and/or agents at or on the Property prior to Closing. Any of Buyer's
agents shall be bound by the provisions of SECTION 17.19.
SECTION 9
CONDITIONS PRECEDENT TO CLOSING
9.1 Conditions Precedent to Buyer's Obligations. The Close of Escrow
and the obligation of Buyer to purchase the Property is subject to the
satisfaction, not later than the Scheduled Closing Date, (subject to extensions
as provided in Section 7.1) of the following conditions:
9.1.1 Seller's Deliveries. Seller shall have delivered the items
described in SECTION 4.2 and shall be prepared to deliver the items described in
SECTION 4.4;
9.1.2 Title Policy. The Title Company shall be unconditionally
prepared (subject only to payment of all necessary title insurance premiums and
other charges) to issue to Buyer the Title Policy insuring Buyer's title to the
Real Property subject only to the Permitted Encumbrances;
9.1.3 Performance Under Related Agreement. All conditions precedent
to the closing of the transactions contemplated by that certain Purchase and
Sale Agreement and Joint Escrow Instructions (the "Related Agreement") dated as
of the date hereof by and between D.C. Overnight Partners, L.P. and Buyer shall
have been satisfied or waived and the Seller and Escrow Holder thereunder shall
be ready, willing and able to perform thereunder, and there shall be no default
of Seller under such agreement;
9.1.4 Ground Lessor Estoppel. The lessor (or its agent) under the
Ground Lease shall have delivered a certificate in form and substance
satisfactory to the Title Company, confirming that there are no defaults
thereunder as of the Closing Date and otherwise sufficient to allow the Title
Company to issue the Title Policy in the form required pursuant to this
Agreement (the "Ground Lease Estoppel") and/or the Ground Lease Transfer
Requirement shall have otherwise been satisfied; and
9.1.5 Seller Performance. Seller shall have performed in all
material respects all of the obligations of Seller under this Agreement, to the
extent required to be performed at or prior to the Close of Escrow.
9.1.6 Representations and Warranties of Seller. The Seller's
representations and warranties set forth in SECTION 6.3 shall be true, correct
and complete, as of the Close of Escrow subject to modification thereof to the
extent permitted under SECTION 6.7 and subject further to the applicable
provisions of SECTION 7.1.1.
The conditions set forth in this SECTION 9.1 are solely for the benefit
of Buyer and may be waived only by Buyer. Buyer shall at all times have the
right to waive any such condition. Any such waiver or waivers shall be in
writing and shall be delivered to Seller and Escrow Holder.
9.2 Conditions Precedent to Seller's Obligations. The Close of Escrow
and Seller's obligation with respect to the transactions contemplated by this
Agreement are subject to the satisfaction, not later than the Scheduled Closing
Date, of the following conditions:
9.2.1 Funds and Documents. Buyer shall have delivered to Escrow
Holder,
33
prior to the Closing Date, for disbursement as directed by Seller, the Paired
Shares and all cash or other immediately available funds due from Buyer in
accordance with SECTION 4 of this Agreement and the documents described in
SECTION 4.3;
9.2.2 Representations and Warranties of Buyer. The Trust's
representations and warranties set forth in SECTION 6.1 and the Corporation's
representations and warranties set forth in SECTION 6.2 shall be true, correct
and complete, as of the Close of Escrow;
9.2.3 No Material Changes. There shall have been no casualty or
condemnation for which Buyer has elected to terminate this Agreement pursuant to
SECTION 12 or SECTION 13 of this Agreement;
9.2.4 Ground Lessor Estoppel. The lessor (or its agent) under the
Ground Lease shall have delivered the Ground Lease Estoppel or the Ground Lease
Transfer Requirement shall have otherwise been satisfied; and
9.2.5 Performance Under Related Agreement. All conditions precedent
to the closing of the transactions contemplated by the Related Agreement shall
have been satisfied or waived and the Buyer and Escrow Holder thereunder shall
be ready, willing and able to perform thereunder and there shall be no default
of Buyer under such agreement.
The conditions set forth in this SECTION 9.2 are solely for the benefit
of Seller and may be waived only by Seller. Seller shall at all times have the
right to waive any such condition. Any such waiver or waivers shall be in
writing and shall be delivered to Buyer and Escrow Holder.
9.3 Failure of Condition. Except as otherwise provided in this
Agreement, if the Escrow fails to close on the Outside Closing Date for any
reason whatsoever, including, without limitation, a failure of a condition
precedent set forth in this SECTION 9, either Buyer or Seller, if not then in
default under this Agreement, may terminate the Escrow and this Agreement upon
notice to the other; and, thereupon:
9.3.1 This Agreement and the Escrow shall terminate;
9.3.2 The costs of the Escrow through the Scheduled Closing Date
shall be governed by SECTION 4.8;
9.3.3 All monies paid into the Escrow and all documents deposited
in the Escrow shall be returned to the party paying or depositing the same
together with interest earned thereon; and
9.3.4 Each party shall be released from all obligations under this
Agreement except for the obligations that are expressly stated to survive the
termination of this Agreement.
SECTION 10
BROKER
Buyer and Seller each represent and warrant to the other that it has
not dealt with any broker, finder or other middleman in connection with this
Agreement, or the transactions contemplated hereby and that no broker, finder,
middleman or other person has claimed, or has the right to claim a commission,
finder's fee or other brokerage fee in connection with this Agreement or the
transactions contemplated hereby. Each party shall indemnify, protect, defend
and hold the other party harmless from and against any costs, claims or expenses
(including actual attorneys' fees and expenses), arising out of the breach by
the indemnifying party of any of its representations, warranties or agreements
contained in this SECTION 10. The representations and obligations under this
SECTION 10 shall survive the Close of Escrow, or, if the Close of Escrow does
not occur, the termination of this Agreement.
34
SECTION 11
REMEDIES FOR SELLER'S DEFAULT
11.1 Buyer's Remedies in General. If Buyer shall discover prior to the
Close of Escrow any default in any of Seller's obligations under this Agreement
(a "Seller Default"), Buyer shall notify Seller thereof, and Seller shall have a
reasonable period of time (not in excess of thirty (30) days) unless extended by
Buyer in its sole discretion in which to cure such default, in which case the
Scheduled Closing Date shall be extended during the continuation of such cure
period. If there shall be any Seller Default discovered by Buyer prior to the
Close of Escrow and not cured by the Scheduled Closing Date, then Buyer's sole
right and remedy other than with respect to a breach of a representation and
warranty which shall be subject to the provisions of SECTION 6.7, shall be to
compel specific performance of this Agreement; provided, however, that Buyer
shall only be entitled to compel specific performance of this Agreement if, as
of the time of Seller's default, Buyer shall (a) not be in default hereunder,
(b) shall be ready, willing and able to perform its obligations hereunder, and
(c) shall have waived all contingencies to closing other than those relating to
Seller's default.
11.2 MATERIAL INDUCEMENT. BUYER SPECIFICALLY ACKNOWLEDGES THAT THE
LIMITATIONS ON DAMAGES AND SURVIVAL AND OTHER REMEDIES WHICH BUYER MAY RECOVER
FROM AND ENFORCE AGAINST SELLER UNDER THIS AGREEMENT ARE A SPECIFIC AND MATERIAL
INDUCEMENT TO SELLER TO ENTER INTO THIS TRANSACTION.
SECTION 12
DAMAGE TO OR DESTRUCTION OF THE PROPERTY
12.1 Insured Casualty.
12.1.1 If, prior to the Close of Escrow, the Property is damaged
or destroyed, whether by fire or other insured casualty, Seller shall promptly
notify Buyer of such damage or destruction and of the good-faith estimate of a
reputable licensed contractor selected by Seller and reasonably approved by
Buyer of the cost to repair the damage and Seller's good-faith belief that such
casualty is insured (the "Insured Casualty Notice"). If the Insured Casualty
Notice indicates that such casualty is a Material Casualty, Buyer may elect to
be released from its obligations hereunder (including its obligation to purchase
the Property) by delivering to Seller written notice of Buyer's intent to do so
within ten (10) days after the date Buyer receives the Insured Casualty Notice.
In such event, the Deposit together with all interest accrued thereon shall be
promptly returned to Buyer.
12.1.2 If the casualty is insured, and (i) it is not a Material
Casualty, or (ii) it is a Material Casualty, but Buyer elects not to terminate
this Agreement in accordance with this SECTION 12.1, then the Escrow and this
Agreement shall remain in full force and effect, the Closing shall occur on or
before the Outside Closing Date, and Seller shall assign to Buyer, as a
condition precedent to the Close of Escrow, all of Seller's right, title and
interest in and to any of the casualty insurance proceeds or claims therefor
with respect to such damage or destruction, together with any and all rental
loss or business interruption insurance of Seller, if any, payable with respect
to the Property for any period after the Proration Time and any and all claims
against other persons for such damage or destruction. Additionally, if the
Escrow and this Agreement remain in full force and effect, Seller shall pay to
Buyer, by way of a reduction in the Cash Portion of the Closing Payment, an
amount equal to the deductible under the casualty insurance. Within twelve (12)
months following the Close of Escrow, Buyer shall upon thirty (30) days written
notice by Seller, present reasonably satisfactory evidence to Seller that Buyer
applied the proceeds of such insurance to the Property. If Buyer fails to
present such evidence or such evidence is not reasonably satisfactory to Seller,
Buyer shall promptly, but in any event within thirty (30) days of demand
therefor from Seller, pay to Seller the proceeds of the casualty
35
insurance assigned by Seller to Buyer as provided herein, together with an
amount equal to the deductible under such insurance for which Buyer received a
credit to the Purchase Price.
12.2 Uninsured Casualty.
12.2.1 If, prior to the Close of Escrow, all or any portion of the
property is damaged or destroyed by an uninsured casualty (including, without
limitation, a casualty as to which coverage has been disclaimed by Seller's
insurers), Seller shall promptly notify Buyer of such damage or destruction and
of the Seller's reasonable estimate of the cost to Seller to repair the same of
a reputable licensed contractor selected by Seller and reasonably approved by
Buyer (the "Uninsured Estimate to Repair") and Seller's reasonable belief that
such casualty is uninsured (the "Uninsured Casualty Notice").
12.2.2 If such Uninsured Estimate to Repair indicates the
occurrence of a Material Casualty, either Seller or Buyer may elect to terminate
this Agreement by giving to the other party written notice of its intent to do
so within ten (10) days after the Seller delivers the Uninsured Casualty Notice
to Buyer. If this Agreement is terminated pursuant to this SECTION 12.2.2, the
Deposit together with interest accrued thereon shall be promptly returned to
Buyer.
12.2.3 If the casualty is uninsured, and (i) it is not a Material
Casualty, or (ii) it is a Material Casualty and Buyer and Seller have not
elected to terminate this Agreement in accordance with SECTION 12.2.2, then the
Escrow and this Agreement shall remain in full force and effect, the Closing
shall occur on or before the Outside Closing Date, and Buyer shall be entitled
to a reduction in the Purchase Price in an amount equal to the Uninsured
Estimate to Repair.
12.2.4 If and to the extent that the Purchase Price is adjusted
pursuant to this SECTION 12.2 as a result of a disclaimer of coverage by
Seller's insurers, Buyer shall not be entitled to insurance proceeds due under
Seller's policies, or to be assigned any claim under or with respect to Seller's
policies, and Seller shall retain all rights thereunder or with respect thereto
and to proceeds therefrom, it being the intent of this SECTION 12 that there be
no double recovery by, or double compensation of, Buyer for the casualty.
SECTION 13
CONDEMNATION
If, prior to the Close of Escrow, a Material Taking has occurred or is
pending, Seller shall immediately notify Buyer of such fact. In such event,
Buyer may elect upon written notice to Seller given not later than fifteen (15)
days after receipt of Seller's notice to terminate this Agreement. If Buyer does
not exercise option which Buyer may have pursuant to this SECTION 13 to
terminate this Agreement, or if any such taking is not a Material Taking, then
neither party shall have the right to terminate this Agreement, but Seller shall
assign and turn over, and Buyer shall be entitled to receive and keep, all
awards for the taking of any of the Real Property by eminent domain which accrue
to Seller (other than those relating to loss of use prior to the Closing), and
the parties shall proceed to the Close of Escrow pursuant to the terms hereof,
without modification of the terms of this Agreement and without any reduction in
the Purchase Price.
SECTION 14
EMPLOYEES
14.1 Hiring of Hotel Employees; WARN Act Compliance. Buyer agrees to
make an offer of employment to all existing Hotel Employees as of the Close of
Escrow, on terms and conditions generally comparable to their existing terms and
conditions of employment (to the extent such terms and conditions have been
disclosed by Seller and/or its agents to Buyer) and to make all reasonable
efforts to retain such employees for a reasonable period of time. Without
36
limiting the foregoing, Buyer shall offer to maintain without loss of employment
(as defined in the WARN Act) the employment at the Property (other than upon
good cause for termination) of such number of Hotel Employees and on such terms
and conditions as shall not result in, and only to the extent necessary to
prevent, a plant closing or mass layoff as defined in the WARN Act. Buyer (i)
shall also cause each of the health and medical benefit plans maintained for
Hotel Employees to waive any preexisting condition in connection with employment
at the Property that was not excluded under the applicable program as of the
Closing Date, (ii) shall also cause each of such benefit plans to take into
account any deductibles or coinsurance amounts incurred by each Hotel Employee
for the year in which the Closing Date occurs, and (iii) shall also cause each
of the health and medical benefit plans to deem each Hotel Employee to be
eligible for participation in such Plan as of the Close of Escrow. In the event
that Buyer fails to comply with any of the foregoing covenants, Buyer agrees
that Buyer shall be solely responsible for the payment of any and all costs,
charges, penalties, compensation, severance pay, benefits and liabilities,
arising under the WARN Act, and any other applicable law, rule or regulation on
account thereof, and Buyer agrees to indemnify, defend and hold Seller and the
Employer Corporation and their directors, officers, agents, affiliates,
principals, partners, shareholders representatives and controlling persons
harmless from and against any and all claims, causes of action, judgments,
damages, penalties and liabilities asserted under the WARN Act or any other
applicable law, rule or regulation, whether against Buyer or Seller, the
Employer Corporation or any other such indemnified party and whether based on
employment of any of the Hotel Employees prior to or following the Closing,
arising from Buyer's failure to comply with the foregoing covenants
(collectively, "Termination Charges"). Following the Closing, if Buyer desires
to terminate the employment of any Hotel Employees other than for cause, Buyer
shall be solely responsible for complying with all applicable provisions of the
WARN Act and all other applicable laws, rules and regulations with respect to
such termination, including without limitation, the payment of all costs and
termination payments owing under the WARN Act and all other applicable laws,
rules and regulations to any of such employees. Buyer shall assume all
obligations under the Employment Agreement for the Director of Finance
attributable to the period from and after the Closing Date (it being agreed that
the Director of Finance may resign thereunder at any time without penalty).
14.2 Collective Bargaining Agreements. Without limiting the provisions
of SECTION 14.1, immediately upon the Close of Escrow, without the necessity of
further action by Buyer, Buyer shall assume each collective bargaining agreement
or other labor union contracts identified on SCHEDULE 14.2 (the "Collective
Bargaining Agreements"). Buyer further agrees to indemnify Seller and the
Employer Corporation and their directors, officers, employees, agents,
affiliates, principals, partners, shareholders, representatives and controlling
persons for any and all liability to the bargaining agents or Hotel Employees,
resulting from the failure of Buyer to comply with the terms and conditions of
any of the Collective Bargaining Agreements with respect to periods beginning
after the Close of Escrow.
14.3 Continuation of Benefits.
14.3.1 Except as provided in SECTION 14.3.2 , on and after the
Closing Date, Seller (or any insurer at Seller's cost) shall continue to process
and pay (or cause applicable insurers and third party administrators, including
ITT Sheraton, to process and pay) in an expeditious manner and with respect to
all covered Hotel Employees (and, to the extent applicable, their covered
spouses, dependents and beneficiaries) all claims under the Employment
Agreements that provide health and medical, or other welfare, benefits submitted
for covered expenses with respect to occurrences commencing on or prior to the
Closing Date,
37
including, but not limited to: (A) covered hospital benefits for any
confinements; (B) covered life and survivor income benefits, if any, for deaths
which occur on or prior to the Closing Date; (C) workers' compensation benefits
for disabilities resulting from a work-related accident which occurred on or
prior to the Closing Date; (D) all covered benefits that are being, or that may
be, paid to, or with respect to, any of such individuals who are on short or
long term disability, or medical, personal or other leaves of absence as of the
Closing Date; (E) covered benefits under any "spending account," or similar
arrangement, under any "cafeteria plan" (as defined under Section 125 of the
Internal Code) with respect to salary reduction elections made prior to the
Closing Date; and (F) covered benefits under all other such Employment
Agreements which accrue on or before the Closing Date; but, only in each
instance, to the extent that Buyer shall not have received a credit against the
Purchase Price on account of such item.
14.3.2 Buyer (or any plan maintained by Buyer) will provide
continued health and medical coverage as required under Section 4980B of the
Code, Part 6 of Title I of ERISA or any other applicable federal, state or local
law or ordinance to all current and former Hotel Employees (and their spouses,
dependents and beneficiaries) with respect to whom a "qualifying event" (as such
term is defined under Sections 4980B(f)(3) of the Code or 603 of ERISA) or other
triggering event described under the applicable federal, state or local laws or
ordinances occurred on or before the Closing Date.
14.3.3 Buyer shall maintain supplies of claims forms necessary for
Hotel Employees to make claims under Employment Agreements that provide health,
medical or other welfare benefits with respect to occurrences commencing on or
prior to the Closing Date, and shall furnish such forms to the Hotel Employees
when needed and otherwise assist the Hotel Employees in presenting such claims.
14.4 Buyer and Seller intend by this Agreement to comply with Section
4204 of ERISA, so as to prevent Seller from incurring at the Closing Date a
complete or partial withdrawal in respect of any employee benefit plans, if any,
in which the Hotel Employees currently participate that are "multiemployer
plans," as defined in Section 4001(a)(3) of ERISA (and which have been disclosed
to Buyer on the Schedule of Employment Agreements), determined as if Buyer is
the "buyer" referred to in such Section 4204. Accordingly, with respect to such
multiemployer plans, Buyer agrees as follows:
(A) For the first plan year of each such multiemployer plan
commencing after the Close of Escrow, and for each of the succeeding four plan
years for each such plan, Buyer shall assume the obligation to contribute to
each such plan with respect to operations conducted with business assets
acquired from Seller for substantially the same number of contribution base
units (as defined in Section 4001(a)(11) of ERISA) for which Seller had an
obligation to contribute to such plan.
(B) Prior to each such multiemployer plan's first plan year
beginning after the Close of Escrow, Buyer shall apply to such plan for a
variance from the requirement of Section 4204(a)(1)(b) of ERISA, that a bond be
obtained or an amount be held in escrow as provided in said Section. In the
event any such plan determines that the request does not qualify for a variance
on it, Buyer shall obtain any required bond or establish any required escrow
within thirty (30) days after the date on which it receives notice of the plan's
decision, and shall maintain such bond or escrow until the earliest of: (i) the
date a variance is obtained from the plan; (ii) the date a variance or exemption
is obtained from the Pension Benefit Guaranty Corporation; or (iii) the last day
of the fifth (5th) plan year commencing after the Close of Escrow; which bond or
escrow shall be paid to such plan if Buyer withdraws therefrom or fails to make
a contribution to such plan when due, at any time during the first (1st) five
(5) plan
38
years of such plan beginning after the Closing Date. In order to comply with
subsection (a)(1)(C) of such Section 4204, if Buyer withdraws in a complete
withdrawal or a partial withdrawal from any multiemployer plan with respect to
which Buyer has assumed an obligation to contribute pursuant to this Agreement
and such withdrawal or partial withdrawal occurs during the five (5) plan years
commencing with the first (1st) plan year beginning after the date of the Close
of Escrow, Seller shall be secondarily liable for any withdrawal liability it
would have had to such multiemployer plan on the date of the Close of Escrow
under Title IV of ERISA. Buyer agrees to provide Seller with reasonable advance
notice of its anticipated failure to pay any withdrawal liability and to furnish
Seller promptly with a copy of any notice of withdrawal liability it may receive
with respect to such plans.
14.5 Indemnification. Buyer and Seller (as applicable, the
"Indemnitor") agrees to indemnify, defend, protect and hold the other and, the
Employer Corporation in the case of Seller, and their directors, officers,
agents, affiliates, principals, partners, shareholders, representatives and
controlling persons (as applicable, the "Indemnitee") harmless from and against
any and all claims, damages, liabilities, losses, and expenses, (including
attorneys' fees and costs) paid, suffered or incurred by the Indemnitee, arising
out of or related to Indemnitor's failure to comply with any of the covenants,
obligations, or duties contained in SECTION 14.
14.6 Survival. The provisions of this SECTION 14 shall survive the
Close of Escrow.
SECTION 15
COOPERATION
15.1 Seller has advised Buyer that it may be necessary after the Close
of Escrow for Seller (or its representatives) to audit the Records and Plans
with respect to the period prior to the Closing Date. In addition, Seller may
require access to the such Books and Records in connection with any litigation
by or against Seller and its Affiliates with respect to the Property, any tax
audit, examination or challenge or similar proceeding, or any calculation of
sums payable under SECTION 5. Accordingly, Buyer hereby: (i) agrees to retain
the Records and Plans with respect to the period prior to the Closing Date at
the Property for a period of seven (7) years after the Close of Escrow or such
additional period as may reasonably be requested by Seller; (ii) grants Seller,
its Affiliates and their respective representatives access to the such Records
and Plans and the Property after the Close of Escrow, at reasonable times and
upon reasonable prior notice, for such purposes; (iii) subject to the rights of
guests in guest rooms, tenants under tenant leases, grants Seller, its
Affiliates, and their respective representatives access to the Property after
the Close of Escrow for the purpose of conducting such inspections and/or
testing (including destructive testing) of the Property as may be necessary or
advisable in connection with any litigation and other proceedings to which
Seller is a party (provided that Seller shall give Buyer prior notice of the
scope of such inspections and testing) which shall be scheduled for such periods
as shall be reasonably agreeable to the parties.
15.1.1 All inspections fees, appraisal fees, engineering fees and
other expenses of any kind relating to the inspection of the Property by Seller
or Seller's Affiliate will paid for by Seller and/or Seller's Affiliate.
15.1.2 Prior to Seller or Seller's Affiliate's entry on the
Property for the purpose of conducting inspections and/or tests, Seller or
Seller's Affiliate shall provide Buyer with certificates of insurance from
Seller's agents from an insurance carrier and for such risks and policy limits
as Seller shall reasonably approve.
15.1.3 Seller agrees to keep the Property free from any liens
arising out of or in connection with such testing and inspection.
15.1.4 Seller, shall, at its sole cost and expense, clean up and
repair the Property
39
as reasonably necessary, after Seller's or Seller's agents, entry thereon.
15.1.5 Seller shall hold harmless, indemnify and defend Buyer for
all losses relating to any action by Seller, its Affiliates and/or agents at or
on the Property after the Closing.
15.1.6 Buyer agrees to cooperate with Seller, its Affiliates and
their respective representatives in connection with any such litigation or
proceedings with respect to the Property, any such tax audit, examination or
challenge or similar proceeding, or any such calculation of sums payable under
SECTION 5, said cooperation to be at no material cost or expense to Buyer.
15.2 Seller shall cooperate with Buyer in connection with the
assignment of all transferable Licenses and Permits to Buyer and the application
for and procurement of replacements of any non-transferable Licenses and
Permits.
SECTION 16
NOTICES
16.1 Addresses. Whenever any notice, demand or request is required or
permitted hereunder, such notice, demand or request shall be made in writing and
shall be (a) sent via a nationally recognized overnight courier service fully
prepaid, (b) deposited in the United States by mail, registered or certified,
return receipt requested, postage prepaid, or (c) sent via telefacsimile,
provided that the original of such notice, demand or request shall also be sent
via one of the methods described in (a) and (b) above, in each case to the
addressees (and individuals) set forth below:
As to Seller:
N.Y. Overnight Partners, L.P.
c/o Al Anwa USA Incorporated
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: General Counsel
Telefacsimile: (000) 000-0000
With a copy to Seller's Additional Addressees:
Xxxxxx Eng, Esq.
00000 X. Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Telefacsimile: (000) 000-0000
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telefacsimile: (000) 000-0000
As to Buyer:
Starwood Lodging Corporation
Starwood Lodging Trust
0000 X. Xxxxxxxxx Xxxx
00
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Telefacsimile: (000) 000-0000
With a copy to Buyer's Additional Addressee:
Xxxxxxxxx Traurig Xxxxxxx Xxxxxx Xxxxx & Xxxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telefacsimile: (000) 000-0000
As to Escrow Holder:
Chicago Title Insurance Company
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
Telefacsimile: (000) 000-0000
16.2 Receipt of Notices. Any notice, demand or request that shall be
delivered to Buyer and its Additional Addressee in the manner aforesaid shall be
deemed sufficiently given to and received by Buyer for all purposes hereunder,
and any notice, demand or request that shall be delivered to Seller and its
Additional Addresses in the manner aforesaid shall be deemed sufficiently given
to and received by Seller for all purposes hereunder (i) the next business day
following the day such notice, demand or request is delivered by a nationally
recognized overnight courier service fully prepaid, to such party and its
Additional Addressee, (ii) if sent via registered or certified mail, at the time
of receipt by such party and its Additional Addressee, or (iii) if sent via
telefacsimile, as of the date and time stated upon confirmation reports
generated by the sending party's telefacsimile machine confirming the delivery
of such notice, demand or request to such party and its Additional Addressee.
16.3 Refusal of Delivery. The inability to deliver any notice, demand
or request because the individual to whom it is properly addressed in accordance
with this SECTION 16 refused delivery thereof or no longer can be located at
that address shall constitute delivery thereof to such individual.
16.4 Change of Address. Each party shall have the right from time to
time to designate by written notice to the other parties hereto such other
person or persons and such other place or places as said party may desire
written notices to be delivered or sent in accordance herewith.
SECTION 17
GENERAL PROVISIONS
17.1 Amendment. Except as provided in SECTION 4.1, no provision of this
Agreement or of any documents or instrument entered into, given or made pursuant
to this Agreement may be amended, changed, waived, discharged or terminated
except by an instrument in writing, signed by the party against whom enforcement
of the amendment, change, waiver, discharge or termination is sought.
17.2 Time of Essence. All times provided for in this Agreement for the
performance of any act will be strictly construed, time being of the essence.
41
17.3 Entire Agreement. This Agreement and other documents delivered at
Closing, set forth the entire agreement and understanding of the parties in
respect of the transactions contemplated by this Agreement, and supersede all
prior agreements, arrangements and understandings relating to the subject matter
hereof and thereof. No representation, promise, inducement or statement of
intention has been made by Seller or Buyer which is not embodied in this
Agreement, or in the attached Exhibits or the written certificates, schedules or
instruments of assignment or conveyance delivered pursuant to this Agreement,
and neither Buyer nor Seller shall be bound by or liable for any alleged
representations, promise, inducement or statement of intention not therein so
set forth.
17.4 No Waiver. No failure of any party to exercise any power given
such party hereunder or to insist upon strict compliance by the other party with
its obligations hereunder shall constitute a waiver of any party's right to
demand strict compliance with the terms of this Agreement.
17.5 Counterparts. This Agreement, any document or instrument entered
into, given or made pursuant to this Agreement or authorized hereby, and any
amendment or supplement thereto may be executed in two or more counterparts,
and, when so executed, will have the same force and effect as though all
signatures appeared on a single document. Any signature page of this Agreement
or of such an amendment, supplement, document or instrument may be detached from
any counterpart without impairing the legal effect of any signatures thereon,
and may be attached to another counterpart identical in form thereto but having
attached to it one or more additional signature pages.
17.6 Costs and Attorneys' Fees. If any legal action or any arbitration
or other proceeding is brought for the enforcement of this Agreement or any
document or instrument entered into, given or made pursuant to this Agreement or
authorized hereby or thereby (including, without limitation, the enforcement of
any obligation to indemnify, defend or hold harmless provided for herein or
therein), or because of an alleged dispute, default, or misrepresentation in
connection with any of the provisions of this Agreement or of such document or
instrument, or if Escrow Holder commences any action with respect to the
Escrow(s), the successful or prevailing party shall be entitled to recover
actual attorneys' fees, charges and other costs incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.
17.7 Payments; Interests. Except as otherwise provided herein, payment
of all amounts required by the terms of this Agreement shall be made in the
United States and in immediately available funds of the United States of America
which, at the time of payment, is accepted for the payment of all public and
private obligations and debts. Unless the parties otherwise agree, payments
shall be made through the Escrow Holder. If any payment due under this Agreement
is not paid when due, it shall thereafter bear interest at a variable rate equal
to the rate announced from time to time by Citibank, N.A. as its prime or
reference rate, plus five percent (5%) per annum, but in no event more than the
maximum rate, if any, allowed by law to be charged by the party receiving the
interest on such type of indebtedness.
17.8 Transfer By Buyer. Buyer shall not have the right to assign this
Agreement, but shall be permitted to designate an Affiliate or Affiliates to
take title to the Property. In the event that Buyer elects to so designate any
Affiliate or Affiliates to take title to the Property hereunder, (i) Buyer shall
upon close of Escrow be released of all obligations hereunder other than
pursuant to SECTION 6, SECTION 7.1, SECTION 10, SECTION 17.18, SECTION 17.19 and
SECTION 17.20 or arising prior to the Close of Escrow, (ii) such Affiliate or
Affiliates shall assume all of Buyer's obligations hereunder; and (iii) such
Affiliate of Affiliates shall represent and warrant
42
to Seller that such entities are duly organized and validly existing and
otherwise as to the matters covered in SECTION 6.1.1 and SECTION 6.1.2 as
applicable.
17.9 Parties in Interest. Subject to SECTION 17.8, the rights and
obligations of the parties hereto shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors, assigns, heirs
and the legal representatives of their respective estates. Nothing in this
Agreement is intended to confer any right or remedy under this Agreement on any
person other than the parties to this Agreement and their respective successors
and permitted assigns, or to relieve or discharge the obligation or liability of
any person to any party to this Agreement or to give any person any right of
subrogation or action over or against any party to this Agreement.
17.10 Applicable Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the state in which the Real Property
is located without giving effect to the conflict-of-law rules and principles of
that state.
17.11 Incorporation of Recitals and Exhibits. The Recitals and Exhibits
attached to this Agreement are incorporated into and made a part of this
Agreement.
17.12 Construction of Agreement. The language in all parts of this
Agreement shall be in all cases construed simply according to its fair meaning
and not strictly for or against any of the parties hereto. Headings at the
beginning of sections of this Agreement are solely for the convenience of the
parties and are not a part of this Agreement. When required by the context,
whenever the singular number is used in this Agreement, the same shall include
the plural, and the plural shall include the singular, the masculine gender
shall include the feminine and neuter genders, and vice versa. As used in this
Agreement, the term "Seller" shall include the respective permitted successors
and assigns of Seller, and the term "Buyer" shall include the permitted
successors and assigns of Buyer, if any.
17.13 Severability. If any term or provision of this Agreement is
determined to be illegal, unconscionable or unenforceable, all of the other
terms, provisions and sections hereof will nevertheless remain effective and be
in force to the fullest extent permitted by law.
17.14 Announcements. Seller and Buyer shall consult with each other and
provide each other one (1) Business Day prior notice with regard to all press
releases and other announcements issued at or prior to the Close of Escrow and
during the one year period thereafter concerning the existence of this Agreement
or the sale of the Property and, except as permitted under SECTION 17.19,
neither Seller nor Buyer shall issue any such press release or other such
publicity prior to the Close of Escrow without the prior written consent of the
other party, which consent may be withheld in such other party's sole and
absolute discretion. Buyer will not issue any public announcement with respect
to Seller (other than to describe the transaction contemplated hereby to the
extent permitted hereunder) without the prior written consent of Seller which
may be withheld in its sole and absolute discretion. The agreements of the
parties in this SECTION 17.14 shall survive the Close of Escrow or any
termination of this Agreement.
17.15 Submission of Agreement. The submission of this Agreement to
Buyer or its broker, agent or attorney for review or signature does not
constitute an offer to sell the Property to Buyer or the granting of an option
or other rights with respect to the Property to Buyer. No agreement with respect
to the purchase and sale of the Property shall exist, and this writing shall
have no binding force or effect, until this Agreement shall have been executed
and delivered by Buyer and by Seller and Buyer shall have deposited the Deposit
with Escrow Holder.
17.16 Further Assurances. Buyer and Seller agree to execute such
instructions to the Escrow Holder and such other instruments and take such
further actions either before or after
43
the Close of Escrow as may be reasonably necessary to carry out the provisions
of this Agreement provided that no material additional cost or liability shall
be created thereby.
17.17 Cooperation. Buyer and Seller shall cooperate with the other to
carry out the purpose of this Agreement (provided, such cooperation shall not
require either party to expend any sum not otherwise required pursuant to the
other provisions of this Agreement). This SECTION 17.17 shall survive the Close
of Escrow.
17.18 Moratorium on Re-Sale. Buyer covenants and agrees that it will
not sell the Property to any third-party for a period (the "Transfer Restriction
Period") commencing upon the Close of Escrow and expiring upon the later of (a)
five (5) years following the Close of Escrow and (b) settlement of or the final
non-appealable judgment is issued in connection with the existing litigation
between Seller and the Ritz Carlton Hotel Company, LLC and their respective
affiliates, provided, however, the foregoing prohibition shall not apply to a
sale of all or substantially all of the assets of Buyer, the merger of Buyer
into another entity or the transfer of the Property to a subsidiary and/or
Affiliate of Buyer but shall be binding upon the party succeeding to all or
substantially all of the assets of Buyer, the surviving entity in such merger,
or such subsidiary or Affiliate. The provisions of this SECTION 17.18 shall be
specifically enforceable. Buyer hereby waives any requirement for Seller to post
a bond in order to seek or obtain any temporary restraining order or other
injunctive relief pursuant to this SECTION 17.18. The parties acknowledge and
agree that the provisions of this SECTION 17.18 form a material part of the
consideration to Seller for entering into this Agreement. The parties agree that
these provisions are reasonable in light of Seller's ongoing litigation with
Ritz Carlton Hotel Company, LLC and its affiliates.
17.19 Confidentiality. Buyer shall hold as confidential all information
concerning the transaction contemplated by this Agreement, Seller and the
Property disclosed in connection with this transaction and Buyer shall not,
prior to the Close of Escrow, release any such information relating to the
transaction, Seller or the Property to any governmental agencies or third
parties without Seller's prior written consent except as may be required by law
and in such case subject to the provisions of SECTION 17.14. Seller hereby gives
its consent to Buyer's disclosure of information relating to the transaction
contemplated hereby to Buyer's Counsel and other consultants, in each instance
to the extent reasonably necessary to verify information given to Buyer by
Seller or otherwise to carry out the purposes of this Agreement and provided in
each instance, such consultants agree in writing to be bound by the
confidentiality provisions of this SECTION 17.19. If the Close of Escrow shall
fail to occur for any reason, neither party shall issue any press release,
publicity or other public announcement of the subject matter of this Agreement,
or to make any other disclosure concerning the subject matter of this Agreement
(except as may be required by law and in such case subject to the provisions of
SECTION 17.14.), without the prior written consent of the other party, which
consent may be withheld in such other party's sole and absolute discretion. The
agreements of the parties in this SECTION 17.19 shall survive any termination of
this Agreement.
17.20 Interim Management Agreement. Seller shall provide Manager with a
notice of termination of the Management Agreement on January 2, 1998 or as soon
thereafter as Seller shall have obtained any required lender consent thereto.
Seller shall, on or prior to January 2,1998, seek any required lender contents
and use all reasonable commercial efforts to obtain the same as promptly as
possible. Buyer and Seller shall enter into a management agreement with respect
to the Property in the form attached as EXHIBIT 17.20 hereto (the "Interim
Management Agreement") which shall be effective (and the Interim Management
Agreement shall be dated as of such effective date) on the earlier of (a) thirty
days from the date of that at
44
delivery to Manager of such Termination Notice, and (b) the effective date of a
written waiver of Manager of the notice of termination required under the
Management Agreement. Buyer shall advance any fee payable to Manager under the
Management Agreement on account of the termination thereof up to $69,767.00.
Buyer shall be deemed to have waived delivery of all items under SECTIONS
4.2.1.15, 4.2.1.16, 4.2.1.17 and 4.2.1.19 in the event the Management Agreement
is terminated in accordance with the provisions of this SECTION 17.20 prior to
the Closing Date.
17.21 Starwood Lodging Trust. The parties hereto understand and agree
that the name "Starwood Lodging Trust" is a designation of the Trust and its
trustees (as trustees but not personally) under the Trust's Declaration of
Trust, and all persons dealing with the Trust shall look solely to the Trust's
assets for the enforcement of any claims against the Trust, and that the
Trustees, officers, agents and security holders of the Trust assume no personal
liability for obligations entered into on behalf of the Trust, and their
respective individual assets shall not be subject to the claims of any person
relating to such obligations.
[BALANCE OF PAGE INTENTIONALLY BLANK]
45
IN WITNESS WHEREOF, Buyer and Seller have caused this Agreement to be
executed as of the day and year first above written.
"Seller"
N.Y. OVERNIGHT PARTNERS, L.P.,
a New York limited partnership
By: N.Y. OVERNIGHT, INC. a New York
corporation, its sole General Partner
By: /s/ X. Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Its: President
"Buyer"
STARWOOD LODGING TRUST,
a Maryland real estate investment trust
By: /s/ Xxxxxx X. Xxxxxxx
__________________________
Name:
Title:
STARWOOD LODGING CORPORATION,
a Maryland corporation
By: /s/ Xxxxxxx X. Xxxxxxx
__________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
"Escrow Agent"
CHICAGO TITLE INSURANCE COMPANY,
a Missouri corporation
By: /s/ Xxxxxx X. Xxxxxx*
__________________________
Name: Xxxxxx X. Xxxxxx
Title: Authorized Signatory
* subject to receiving mutual instructions in
the event paragraph #3.5 becomes operative
46
TABLE OF CONTENTS
SECTION 1 - DEFINITIONS 1
1.1 Defined Terms 1
1.2 Other Definitional Provisions 10
SECTION 2 - PURCHASE AND SALE OF PROPERTY 11
SECTION 3 - PURCHASE PRICE; PAYMENT; BUYER'S DEFAULT; LIQUIDATED DAMAGES 11
3.1 Purchase Price 11
3.2 Payment 11
3.3 Investment of Escrowed Funds 12
3.4 Allocation of Purchase Price 12
3.5 Default by Buyer Prior to Closing; Liquidated Damages 12
SECTION 4 - ESCROW; CLOSING; COSTS 13
4.1 Escrow 13
4.2 Seller's Deliveries to Escrow Holder 13
4.2.1.1 Deed 13
4.2.1.2 Assignment and Assumption of Tenant Leases 14
4.2.1.3 General Assignment 14
4.2.1.4 Assignment and Assumption of Management Agreement 14
4.2.1.5 Xxxx of Sale 14
4.2.1.6 Stock Agreement 14
4.2.1.7 Liquor Licenses Management Agreement 14
4.2.1.8 Assignment and Assumption of Ground Lease 14
4.2.1.9 Assignment of Mortgage 14
4.2.1.10 [Intentionally Omitted] 15
4.2.1.11 [Intentionally Omitted] 15
4.2.1.12 [Intentionally Omitted] 15
4.2.1.13 Non-Foreign Person Certificate 15
4.2.1.14 Transfer Tax Forms 15
4.2.1.15 Certified Rent Roll 15
4.2.1.16 Certified Operating Statement 15
4.2.1.17 Guest Ledger 15
4.2.1.18 Closing Certificate 15
4.2.1.19 Schedule of Bookings 16
4.2.1.20 Title Requirements 16
4.2.1.21 Payoff Letters 16
4.2.1.22 Notices to Tenants 16
4.2.1.23 Opinion of Seller's Counsel 16
4.2.1.24 Other 16
4.3 Buyer's Deliveries to Escrow Holder 16
4.3.1.1 The Cash Purchase Price 17
4.3.1.2 Stock Certificates 17
4.3.1.3 Assignment and Assumption of Management Agreement 17
4.3.1.4 Value Letter 17
46
47
4.3.1.5 Opinion of Buyer's Counsel 17
4.3.1.6 Stock Agreement 17
4.3.1.7 Assignment and Assumption of Ground Lease 17
4.3.1.8 Liquor License Management Agreement 17
4.3.1.9 [Intentionally Omitted] 17
4.3.1.10 [Intentionally Omitted] 17
4.3.1.11 [Intentionally Omitted] 17
4.3.1.12 Closing Certificate 18
4.3.1.13 The Assignment and Assumption of Tenant Leases 18
4.3.1.14 The General Assignment and Assumption Agreement 18
4.3.1.15 Transfer Tax Forms 18
4.3.1.16 Other 18
4.4 Seller's Deliveries to Buyer 18
4.4.1 Tenant Leases/Tenant Deposits 18
4.4.2 Service Contracts 18
4.4.3 Licenses and Permits 18
4.4.4 Records and Plans 18
4.5 Possession 19
4.6 Evidence of Authorization 19
4.7 Close of Escrow 19
4.8 Costs of Escrow 20
4.9 Other Costs 21
4.10 Maintenance of Confidentiality by Escrow Holder 21
SECTION 5 - PRORATIONS AND ASSUMPTION OF OBLIGATIONS 21
5.1 General 21
5.2 General and Specific Prorations 21
5.3 Deposits 24
5.4 Tenant Leases 24
5.5 Service Contracts and Other Intangible Property 24
5.6 Tax Refunds and Proceedings 24
5.7 Guest Baggage 25
5.8 Safe Deposit Boxes 25
5.9 Advance Bookings 25
SECTION 6 - REPRESENTATIONS AND WARRANTIES; CONDITION OF PROPERTY 25
6.1 Of the Trust 25
6.1.1 Power and Authority 25
6.1.2 Authorization; Valid Obligation 26
6.1.3 Capital Structure 26
6.1.4 SEC Documents and Other Reports 26
6.1.5 Absence of Certain Changes or Events 27
6.1.6 Actions and Proceedings 27
6.1.7 REIT Status 28
6.1.8 Partnership Status 28
6.1.9 Xxxx-Xxxxx-Xxxxxx Act 28
6.2 Of the Corporation 28
6.2.1 Power and Authority 28
47
48
6.2.2 Authorization; Valid Obligation 28
6.2.3 Capital Structure 29
6.2.4 SEC Documents and Other Reports 29
6.2.5 Absence of Certain Changes or Events 29
6.2.6 Actions and Proceedings 30
6.2.8 Xxxx-Xxxxx-Xxxxxx 30
6.3 Of Seller 30
6.3.1 Regarding Seller's Authority 30
6.3.2 Tenant Leases 31
6.3.3 Service Contracts 31
6.3.4 Claims 31
6.3.5 Employees 31
6.3.6 Compliance with Laws 32
6.3.7 Hazardous Materials 32
6.3.8 Records and Plans 32
6.3.9 Licenses and Permits 32
6.3.10 Management Agreements 32
6.3.11 Personal Property 32
6.3.12 Insurance 33
6.3.13 Real Estate Taxes 33
6.3.14 Residential Apartments; Rent Regulations 33
6.3.15 Regarding The Ground Lease 33
6.4 Buyer's Review of Records and Plans 33
6.4.1 Access to Records and Plans; Specific Disclosures 33
6.4.2 Limitation on Access to Records and Plans 34
6.5 PURCHASE AS IS 34
6.6 Limitation on Representations and Warranties of Seller 36
6.7 Right to Supplement Disclosures 37
6.8 Basket 37
6.9 Survival 37
SECTION 7 - TITLE TO THE REAL PROPERTY: EXTENSION OF THE CLOSING 37
7.1 Buyer's Review of Title 38
7.1.1 Failure to Satisfy Certain Closing Conditions; Monetary Liens 38
7.1.2 [Intentionally omitted] 39
7.2 Title Insurance Policy 39
7.3 Title to Real Property 39
SECTION 8 - INTERIM ACTIVITIES 40
SECTION 9 - CONDITIONS PRECEDENT TO CLOSING 40
9.1 Conditions Precedent to Buyer's Obligations 40
9.1.1 Seller's Deliveries 40
9.1.2 Title Policy 40
9.1.3 Performance Under Related Agreement 40
9.1.4 Ground Lessor Estoppel 41
9.1.5 Seller Performance 41
9.1.6 Representations and Warranties of Seller 41
48
49
9.2 Conditions Precedent to Seller's Obligations 41
9.2.1 Funds and Documents 41
9.2.2 Representations and Warranties of Buyer 41
9.2.3 No Material Changes 41
9.2.4 Ground Lessor Estoppel 42
9.2.5 Performance Under Related Agreement 42
9.3 Failure of Condition 42
SECTION 10 - BROKER 42
SECTION 11 - REMEDIES FOR SELLER'S DEFAULT 43
11.1 Buyer's Remedies in General 43
11.2 MATERIAL INDUCEMENT 43
SECTION 12 - DAMAGE TO OR DESTRUCTION OF THE PROPERTY 43
12.1 Insured Casualty 43
12.2 Uninsured Casualty 44
SECTION 13 - CONDEMNATION 45
SECTION 14 -EMPLOYEES 45
14.1 Hiring of Hotel Employees; WARN Act Compliance 45
14.2 Collective Bargaining Agreements; ERISA Compliance 46
14.3 Continuation of Benefits 46
14.5 Indemnification 48
14.6 Survival 48
SECTION 15 - COOPERATION 48
SECTION 16 - NOTICES 49
16.1 Addresses 49
16.2 Receipt of Notices 51
16.3 Refusal of Delivery 51
16.4 Change of Address 51
SECTION 17 - GENERAL PROVISIONS 51
17.1 Amendment 51
17.2 Time of Essence 51
17.3 Entire Agreement 52
17.4 No Waiver 52
17.5 Counterparts 52
17.6 Costs and Attorneys' Fees 52
17.7 Payments; Interests 52
17.8 Transfer By Buyer 53
17.9 Parties in Interest 53
17.10 Applicable Law 53
17.11 Incorporation of Recitals and Exhibits 53
17.12 Construction of Agreement 53
17.13 Severability 53
17.14 Announcements 53
17.15 Submission of Agreement 54
17.16 Further Assurances 54
17.17 Cooperation 54
17.18 Moratorium on Re-Sale 54
17.19 Confidentiality 55
17.20 Interim Management Agreement 55
49
50
EXHIBITS
Exhibit A Legal Description
Exhibit B Memorandum of Contract
Exhibit 4.2.1.1 Deed
Exhibit 4.2.1.2 Assignment and Assumption of Tenant Leases
Exhibit 4.2.1.3 General Assignment and Assumption Agreement
Exhibit 4.2.1.4 Assignment and Assumption of Management Agreement
Exhibit 4.2.1.5(a) Xxxx of Sale for Capitalized Tangible Property
Exhibit 4.2.1.5(b) Xxxx of Sale for Expensed Tangible Property
Exhibit 4.2.1.6 Stock Agreement
Exhibit 4.2.1.7 Liquor License Management Agreement
Exhibit 4.2.1.8 Assignment and Assumption of Ground Lease
Exhibit 4.2.1.13 Non-Foreign Person Certificate
Exhibit 17.20 Interim Management Agreement
SCHEDULES
Schedule 1.1.1 Approved Service Contracts
Schedule 1.1.2 Employment Agreements
Schedule 1.1.3 Equipment Leases
Schedule 1.1.4 Excluded Property
Schedule 1.1.5 Ground Lease
Schedule 1.1.6 Hotel Employees
Schedule 1.1.7 Schedule of Tenant Leases
Schedule 1.1.8 Seller's Due Diligence and Seller's Knowledge
Schedule 1.1.9 Specific Disclosure Matters
Schedule 3.4 Allocation of Purchase Price
Schedule 6.3.2 Material Defaults Under Tenant Lease
Schedule 6.3.3 Material Defaults Under Approved Service Contracts
Schedule 6.3.4 Material Claims
Schedule 6.3.5 Material Defaults Under Employment Agreements
Schedule 6.3.6 Material Violations
Schedule 6.3.7 Material Environmental Conditions
Schedule 6.3.9 Licenses and Permits
Schedule 6.3.12 Seller's Insurance
Schedule 6.3.13 Pending Tax Protests
Schedule 7.3 Permitted Encumbrances
Schedule 14.2 Collective Bargaining Agreements
50
