PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
Dated as of June 30, 1997
between
MANHATTAN BEACH HOTEL PARTNERS, L.P.
a Delaware limited partnership
as Seller
and
HMC/INTERSTATE MANHATTAN BEACH, L.P.
a Delaware limited partnership
as Buyer
TABLE OF CONTENTS
Page
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ARTICLE I EFFECTIVE DATE 2
ARTICLE II DEFINITIONS 3
ARTICLE III PROPERTY SUBJECT TO AGREEMENT 8
ARTICLE IV PURCHASE PRICE, PAYMENT OF PURCHASE PRICE
AND LIQUIDATED DAMAGES 10
4.1 Purchase Price 10
4.2 Payment of Purchase Price; Deposit 10
4.3 Allocation of Purchase Price 11
4.4 Investment of Deposit 12
4.5 Liquidated Damages 12
ARTICLE V "AS IS, WHERE IS" SALE 14
5.1 "As Is, Where Is" Sale 14
5.2 Inspection 16
ARTICLE VI TITLE TO PROPERTY; APPROVALS 18
6.1 Title 18
6.2 Approval of Title 18
6.3 Ground Lease 19
6.4 Personal Property, and Subleases, Contracts,
Permits and Miscellaneous Property Assets 21
6.5 Approval of Other Matters 21
ARTICLE VII BUYER'S CONDITIONS PRECEDENT TO CLOSING 22
7.1 Buyer's Conditions Precedent 22
7.2 Failure to Obtain Approvals or
Receipt of Disapprovals 23
7.3 Satisfaction of Conditions 23
7.4 Waiver of Conditions 23
ARTICLE VIII SELLER'S CONDITIONS PRECEDENT TO CLOSING 24
8.1 Seller's Conditions Precedent 24
8.2 Failure to Obtain Approvals or
Receipt of Disapprovals 24
8.3 Satisfaction of Conditions 24
8.4 Waiver of Conditions 24
ARTICLE IX ESCROW AND CLOSING 26
9.1 Deposit with Escrow Holder and
Escrow Instructions 26
9.2 Closing 26
9.3 Deliveries by Seller 27
9.4 Deliveries by Buyer 28
9.5 Additional Deliveries by Buyer, Seller,
and Others 28
9.6 Prorations and Apportionments 28
9.7 Costs and Expenses 34
9.8 Insurance; Safekeeping 34
9.9 Close of Escrow 35
9.10 Notification; Closing Statements 36
9.11 Employment Escrow 37
ARTICLE X REPRESENTATIONS, WARRANTIES, AND COVENANTS 37
10.1 Buyer's Representations and Warranties 38
10.2 Seller's Representations and Warranties 38
10.3 Continuation and Survival of Representations and
Warranties; Limitations on Liability Therefor 41
ARTICLE XI POSSESSION 42
ARTICLE XII OPERATION OF THE PROPERTY 42
ARTICLE XIII LOSS BY CASUALTY; CONDEMNATION 43
13.1 Damage or Destruction 43
13.2 Condemnation 43
ARTICLE XIV MISCELLANEOUS 44
14.1 Notices 44
14.2 Brokers and Finders 46
14.3 Assignment 46
14.4 Successors and Assigns 47
14.5 Amendments 47
14.6 Interpretation 47
14.7 Governing Law 48
14.8 Entire Agreement 48
14.9 Attorney's Fees and Costs 48
14.10 Time of the Essence 48
14.11 Confidentiality 48
14.12 No Waiver 49
14.13 Further Acts 49
14.14 Exhibits 49
14.15 Counterparts 50
14.16 No Intent to Benefit Third Parties 50
14.17 Performance Due on Day Other Than
Business Day 50
14.18 Expenses of Purchase and Sale 50
14.19 Severability 50
14.20 No Recording 50
14.21 Quitclaim 50
14.22 Termination of Agreement 51
14.23 Waiver of Known Defaults 52
14.24 Access to Records After Closing 52
Exhibit A LEGAL DESCRIPTION A-1
Exhibit B FORM OF ASSIGNMENT AND ASSUMPTION OF GROUND LEASE B-1
Exhibit C FORM OF GRANT DEED C-1
Exhibit D FORM OF XXXX OF SALE D-1
Exhibit E FORM OF GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT E-1
Exhibit F FORM OF NON-FOREIGN AFFIDAVIT F-1
Exhibit G FORM OF NOTICES TO SUBTENANTS, EQUIPMENT LESSORS,
AND VENDORS G-1
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
-----------------------------
This PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this
"Agreement") is made as of June 30, 1997, between MANHATTAN BEACH HOTEL
PARTNERS, L.P., a Delaware limited partnership ("Seller"), and HMC/INTERSTATE
MANHATTAN BEACH, L.P., a Delaware limited partnership ("Buyer"), for the purpose
of setting forth the agreement of the parties and of instructing COMMONWEALTH
LAND TITLE COMPANY, a California corporation ("Escrow Holder") with respect to
the transactions contemplated by this Agreement.
R E C I T A L S
---------------
A. Seller is the lessee of certain land located at 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx Xxxxx, Xxxxxxxxxx, and more particularly described in Exhibit A
attached hereto and incorporated herein by reference (the "Land"), upon
which is located certain improvements commonly known as: (i) the "Radisson
Plaza Hotel," consisting of an approximately 380 room hotel building, and
various conference and banquet facilities, two dining rooms, two lounges, a
swimming pool, and a parking garage (collectively, the "Hotel"); and (ii)
the "Radisson Plaza Golf Course," consisting of a nine-hole executive golf
course open to the public as well as to the guests of the Hotel (the "Golf
Course").
B. The Land upon which the Hotel and the Golf Course are located is leased by
Seller from the City of Manhattan Beach (the "City") pursuant to that
certain Ground Lease dated March 1, 1983, as amended by Amendment No. 1 to
Ground Lease dated August 25, 1983, Amendment No. 2 to Ground Lease dated
January 24, 1984, Amendment No. 3 to Ground Lease dated October 15, 1984,
Amendment No. 4 to Ground Lease dated July 28, 1987, Amendment No. 5 to
Ground Lease dated October 9, 1987, Amendment No. 6 to Ground Lease dated
November 3, 1987, and by letters dated March 12, 1984, October 12, 1984,
and August 7, 1987, the tenant's interest in such lease having been
assigned by mesne assignments to Seller (as so amended and assigned, the
"Ground Lease").
C. Seller is the owner of certain items of personal property located at and
used in the operation of the Hotel, including, but not limited to
furniture, furnishings, equipment, inventory, merchandise, and supplies.
D. The Hotel is managed by Interstate Hotels Corporation, successor by merger
to Manhattan Beach Management Company ("Manager"), pursuant to that certain
Management Agreement dated January 3, 1992, as amended by Amendment to
Management Agreement dated as of April 21, 1994, and Second Amendment to
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Management Agreement dated as of March 20, 1997 (collectively, the
"Management Agreement"), between Manager and Seller. The Hotel is operated
as a Radisson Plaza Hotel pursuant to that certain License Agreement dated
as of November 27, 1984, as amended and supplemented by Amendment to
License Agreement dated as of October 2, 1989, Agreement Regarding Radisson
License dated as of November 14, 1989, Agreement Amending and Restating
Radisson License Agreement dated as of June 14, 1991, Amended and Restated
License Agreement dated as of June 14, 1991, Amendment to License Agreement
dated as of June 14, 1991, and First Amendment to Amended and Restated
License Agreement for Radisson Plaza Hotel and Golf Course (Manhattan
Beach, California) dated September 20, 1993 (collectively, the "License
Agreement"), all between Radisson Hotels International, Inc. ("Licensor")
or Licensor's predecessor in interest and Seller or Seller's predecessor in
interest. The Golf Course is operated by Radisson Golf Course Co., Inc.
("Operator"), pursuant to that certain Operating Agreement (Radisson Plaza
Golf Course) dated December 10, 1986 (the "Operating Agreement"), between
Operator and Manhattan Beach Hotel Properties, a California limited
partnership, Seller's predecessor-in-interest in the Hotel and the Golf
Course.
E. Buyer desires to purchase the Property (as hereinafter defined) and assume
the tenant's interest in the Ground Lease from Seller, and Seller desires
to sell the Property and and assign the tenant's interest in the Ground
Lease to Buyer, on the terms and conditions set, forth herein.
A G R E E M E N T
-----------------
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
set forth herein, and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Seller and Buyer agree as follows:
ARTICLE I
EFFECTIVE DATE
--------------
This Agreement shall be effective (the "Effective Date") when a fully
executed copy of this Agreement (or a fully executed copy in counterparts) is
deposited with Escrow Holder. Escrow Holder is hereby instructed to immediately
notify in writing each party to this Agreement of the Effective Date.
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ARTICLE II
DEFINITIONS
-----------
The following terms and references shall have the meanings indicated below:
(1) "Accounts" means all accounts receivable for the Hotel and the Golf Course
outstanding as of the Closing Date and aged as of the Closing Date not more
than ninety (90) calendar days.
(2) "Aged Accounts" means all accounts receivable for the Hotel and the Golf
Course outstanding as of the Closing Date other than the Accounts.
(3) "Agreement" shall have the meaning ascribed thereto in the introductory
paragraph of this Agreement.
(4) "Assignment and Assumption of Ground Lease" shall have the meaning ascribed
thereto in Article III of this Agreement.
(5) "Balance" shall have the meaning ascribed thereto in Section 4.2(b) of this
Agreement.
(6) "Xxxx of Sale" shall have the same meaning ascribed thereto in Article III
of this Agreement.
(7) Broker" shall have the meaning ascribed thereto in Section 14.2(a) of this
Agreement
(8) "Buyer" shall have the meaning ascribed thereto in the introductory
paragraph of this Agreement.
(9) "City" shall have the meaning ascribed thereto in Recital B of this
Agreement.
(10) "City Approval" shall have the meaning ascribed thereto in Section 6.3(a)
of this Agreement.
(11) "City Approval Notice" shall have the meaning ascribed thereto in Section
6.3 (d) of this Agreement.
(12) "City Materials" shall have the meaning ascribed thereto in Section 6.3(c)
of this Agreement.
(13) "Closing" means the consummation of the transactions contemplated by this
Agreement.
(14) "Closing Date" means the date the Deed and the Assignment and Assumption of
Ground Lease are recorded.
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(15) "Closing Statements" shall have the meaning ascribed thereto in Section
9.9(a) of this Agreement.
(16) "Collective Bargaining Agreement" means that certain Collective Bargaining
Agreement dated July 1, 1994, between Radisson Plaza - LAX South and the
Hotel Employees and Restaurant Employees International Union.
(17) "Commitment" shall have the meaning ascribed thereto in Section 6.2(a) of
this Agreement.
(18) "Condemnation Notice" shall have the meaning ascribed thereto in Section
13.2 of this Agreement.
(19) "Contracts" shall have the meaning ascribed thereto in Article III of this
Agreement.
(20) "Cutoff Time" shall have the meaning ascribed thereto in Section 9.6 of
this Agreement.
(21) "Deed" shall have the meaning ascribed thereto in Article III of this
agreement.
(22) "Deposit" shall have the meaning ascribed thereto in Section 4.2(a! of this
Agreement.
(23) "Documents" shall have the meaning ascribed thereto in Section 6.5 of this
Agreement.
(24) "Effective Date" shall have the meaning ascribed thereto in Article I of
this Agreement.
(25) "Employment Claims" means claims concerning employment, compensation,
conditions of employment, or termination of employment, including without
limitation, claims under the Collective Bargaining Agreement, claims for
benefits under any employee, pension, health, welfare, or other benefit
plan (including but not limited to vacation, severance, and sick leave),
claims of or for unlawful discrimination, wrongful termination, worker's
compensation, or unemployment compensation, statutory or contract severance
claims under the Employee Retirement Income Security Act of 1974, and the
costs (including reasonable attorney's fees and expenses) associated
therewith.
(26) "Employment Escrow" shall have the meaning ascribed thereto in Section 9.11
of this Agreement.
(27) "Employment Escrow Agreement" shall have the meaning ascribed thereto in
Section 9.11 of this Agreement.
(28) "Environmental Assessment" shall have the meaning ascribed thereto in
Section 5. l(b) of this Agreement.
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(29) "Escrow" shall have the meaning ascribed thereto in Section 9.1 of this
Agreement.
(30) "Escrow Holder" shall have the meaning ascribed thereto in the introductory
paragraph of this Agreement.
(31) "Excluded Reports" shall have the meaning ascribed thereto in Section
5.2(d) of this Agreement.
(32) "FF&E" means furniture, fixtures, equipment, machinery, appliances,
fittings, and other removable articles of personal property of every kind
and nature that are owned by Seller, located at the Land, and used in the
operation of Hotel or the Golf Course FF&E shall exclude all Inventory.
(33) "FF&E Reserves" means all funds, reserves, escrows, and accounts for the
replacement and repair of FF&E, including, without limitation, the "FF&E
Reserve," as such term is defined in the Management Agreement. FF&E
Reserves are not being transferred by Seller to Buyer.
(34) "General Assignment and Assumption Agreement" shall have the meaning
ascribed thereto in Article III of this Agreement.
(35) "Golf Course" shall have the meaning ascribed thereto in Recital A of this
Agreement.
(36) "Ground Lease" shall have the meaning ascribed thereto in Recital B of this
Agreement.
(37) "Guest Ledger Receivables" means the open accounts for all persons who are
guests of the Hotel on the night immediately preceding the Closing Date,
regardless of the date such guests first arrived at the Hotel.
(38) "Holiday" shall have the meaning ascribed thereto in Section 14.17 of this
Agreement.
(39) "Hotel" shall have the meaning ascribed thereto in Recital A of this
Agreement.
(40) "Improvements" shall have the meaning ascribed thereto in Article III of
this Agreement.
(41) "Indemnified Party" shall have the meaning ascribed thereto in Section
6.3(e) of this Agreement.
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(42) "Information" shall have the meaning ascribed thereto in Section 5.1(b) of
this Agreement.
(43) "Inventory" means all of Seller's interest in: (i) all unopened and
unspoiled food and beverage inventory, including, without limitation, all
alcoholic beverages (to the extent they can legally be sold by Seller and
purchased by Buyer) and the contents of all in-room service-bars and
mini-bars held for sale to Hotel guests and others in the ordinary course
of the business of the Hotel; and (ii) all unopened and unspoiled supplies
held for resale and merchandise held for resale in the ordinary course of
the business of the Hotel.
(44) "Inventory and Accounts Price" shall have the meaning ascribed thereto in
Section 4.1 of this Agreement.
(45) "Known Default" shall have the meaning ascribed thereto in Section 14.23 of
this Agreement.
(46) "Land" shall have the meaning ascribed thereto in Recital A of this
Agreement.
(47) "License Agreement" shall have the meaning ascribed thereto in Recital D of
this Agreement.
(48) "Licensor" shall have the meaning ascribed thereto in Recital D of this
Agreement.
(49) "Limited Partner Disapproval" shall have the meaning set forth in Section
7.1(b) hereof.
(50) "Limited Partners" means, collectively, the limited partners and unit
holders of Seller.
(51) "Management Agreement" shall have the meaning ascribed thereto in Recital D
of this Agreement.
(52) "Manager" shall have the meaning ascribed thereto in Recital D of this
Agreement.
(53) "Miscellaneous Property Assets" shall have the meaning ascribed thereto in
Article III of this Agreement.
(54) "Notice of Required Partnership Vote" shall have the meaning ascribed
thereto in Section 7.1(b) of this Agreement.
(55) "Operating Agreement" shall have the meaning ascribed thereto in Recital D
of this Agreement.
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(56) "Operator" shall have the meaning ascribed thereto in Recital D of this
Agreement.
(57) "Owner's Title Policy" shall have the meaning ascribed thereto in Section
6.1 of this Agreement.
(58) "Partnership Vote Meeting" shall have the meaning ascribed thereto in
Section 7.1(b) of this Agreement.
(59) "Payables" means all accounts payable for the Hotel and the Golf Course
outstanding as of the Closing Date, other than those for which Manager or
Operator is liable.
(60) "Permits" shall have the meaning ascribed thereto in Article III of this
Agreement.
(61) "Permitted Exceptions" shall have the meaning ascribed thereto in Section
6.1 of this Agreement.
(62) "Personal Property" shall have the meaning ascribed thereto in Article III
of this Agreement.
(63) "Primary Purchase Price" shall have the meaning ascribed thereto in Section
4.1 of this Agreement.
(64) "Property" shall have the meaning ascribed thereto in Article III of this
Agreement.
(65) "Prorations" shall have the meaning ascribed thereto in Section 9.6(a) of
this Agreement.
(66) "Protected Marks" shall mean all trademarks, service marks, trade names,
logos, designs, and all goodwill appurtenant thereto, owned by Licensor,
Manager, or Operator, or any direct or indirect parent, subsidiary or
affiliate of each, or which may be owned by subtenants under Subleases or
third parties under Contracts.
(67) "Purchase Price" shall have the meaning ascribed thereto in Section 4.1 of
this Agreement.
(68) "Real Property" shall have the meaning ascribed thereto in Article III of
this Agreement.
(69) "Seller" shall have the meaning ascribed thereto in the introductory
paragraph of this Agreement.
(70) "Seller has not received" shall have the meaning ascribed thereto in
Section 10.2(p) of this Agreement.
(71) "Seller's knowledge" shall have the meaning ascribed thereto in Section
10.2(o) of this Agreement.
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(72) "Seller's Non-Foreign Affidavit" shall have the meaning ascribed thereto in
Section 9.3(e) of this Agreement.
(73) "Seller's Partnership Agreement" shall mean that certain Amended and
Restated Agreement of Limited Partnership of Shearson California Radisson
Plaza Partners, L.P., dated on or about May 26, 1988, as amended by
Amendment No. 1 to the Amended and Restated Agreement of Limited
Partnership of Shearson California Radisson Plaza Partners, L.P., dated
1988.
(74) "Subleases" shall have the meaning ascribed thereto in Article III of this
Agreement.
(75) "Survey" shall have the meaning ascribed thereto in Section 6.2(a) of this
Agreement.
(76) "Title Company" shall have the meaning ascribed thereto in Section 6.1 of
this Agreement.
(77) "Transfer" shall have the meaning ascribed thereto in Section 14.3 of this
Agreement.
ARTICLE III
PROPERTY SUBJECT TO AGREEMENT
-----------------------------
Seller hereby agrees to sell to Buyer, and Buyer hereby agrees to purchase
from Seller, subject to the terms and conditions set forth herein, all of
Seller's right, title, an interest in and to the following (collectively, the
"Property"):
(a) Ground Lease - the tenant's interest in the Ground Lease as in effect
on the Closing Date. The Ground Lease shall be conveyed from Seller to
Buyer pursuant to an Assignment and Assumption of Ground Lease (the
"Assignment and Assumption of Ground Lease") substantially in the form
of Exhibit B attached hereto and incorporated herein by reference.
(b) Land - the tenant's interest under the Ground Lease in the land
subject thereto. The Land shall be conveyed from Seller to Buyer
pursuant to the Assignment and Assumption of Ground Lease.
(c) Improvements - those certain hotel, parking, and other buildings,
structures, and improvements, including, without limitation, the Hotel
and the Golf Course, located on the Land (collectively, the
"Improvements," and together with the Land, the "Real Property"). The
Improvements shall be conveyed from Seller to Buyer pursuant to a
Grant Deed (the "Deed") substantially in the form of Exhibit C
attached hereto and incorporated herein by reference.
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(d) Personal Property - that certain personal property located at and used
for the operation, maintenance, and management of the Hotel as of the
Closing Date, including, without limitation, the FF&E, and the items
listed on Schedule I to Exhibit D attached hereto and incorporated
herein by reference, and good and marketable title thereto
(collectively, the "Personal Property"). Notwithstanding anything to
the contrary contained in this Agreement, the Personal Property shall
not include: personal property leased by Seller under the contracts
described in Schedule II to Exhibit D attached hereto and incorporated
herein by reference; personal property owned by Manager or Operator;
personal property owned by guests of the Hotel or the Golf Course;
personal property owned by any subtenant under any Sublease; personal
property owned by any suppliers, vendors, or contractors serving the
Hotel, the Golf Course, or any sublessee; and the Aged Accounts. The
Personal Property shall be conveyed from Seller to Buyer pursuant to a
Xxxx of Sale (the "Xxxx of Sale") substantially in the form of Exhibit
D attached hereto and incorporated herein by reference.
(e) Subleases - those certain space leases, licenses, occupancy
agreements, concessions, or other such arrangements for the use of
space within the Hotel in effect on the Closing Date, other than
arrangements for the transient use of guest rooms, banquet rooms,
dining rooms, conference rooms, or other facilities in the Hotel or
Golf Course by Hotel or Golf Course guests in the ordinary course of
Hotel or Golf Course business, as set forth on Schedule I to Exhibit E
attached hereto and incorporated herein by reference (collectively,
the "Subleases"). Seller's interest in the Subleases shall be conveyed
from Seller to Buyer pursuant to a General Assignment and Assumption
Agreement (the "General Assignment and Assumption Agreement")
substantially in the form of Exhibit E attached hereto and
incorporated herein by reference.
(f) Contracts - those certain contracts and agreements relating to the
improvement, maintenance, repair, or operation of the Hotel or the
Golf Course in effect on the Closing Date, if any, entered into by
Seller or its predecessors in interest (or by Manager as the agent of
Seller or in the name of the Hotel), as set forth on Schedule I to
Exhibit E (collectively, the "Contracts"). Seller's interest in the
Contracts shall be conveyed from Seller to Buyer pursuant to the
General Assignment and Assumption Agreement.
(g) Permits - those certain licenses, franchises, and permits obtained by
Seller or its predecessors in interest (or by Manager as the agent of
Seller or in the name of the Hotel), if any, used in or relating to
the ownership, occupancy, or operation of the Property or any part
thereof in effect on the Closing Date, as set forth on Schedule I to
Exhibit E, other than those which, under applicable law or under
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provisions applicable to any particular permit in question, are
non-transferable (collectively, the "Permits"). Seller's interest in
the Permits shall be conveyed from Seller to Buyer pursuant to the
General Assignment and Assumption Agreement.
(h) Miscellaneous Property Assets - those certain contract rights, leases,
concessions, trademarks, service marks, trade names (including the
names of restaurants, lounges, and meeting rooms), logos, copyrights,
and rights under guaranties or warranties relating to goods,
merchandise, or services at or relating to the Hotel or the Golf
Course, including, without limitation, the assets (including Accounts)
set forth on Schedule I to Exhibit E, together with any indemnities
benefitting Seller or the Property and relating to the Property, to
the extent such indemnities are transferable (collectively, the
"Miscellaneous Property Assets"), but the Miscellaneous Property
Assets shall not include (and there shall be expressly excluded) the
Ground Lease, the Subleases, the Contracts, the Permits, and the
Protected Marks. Seller's interest in the Miscellaneous Property
Assets shall be conveyed from Seller to Buyer pursuant to the General
Assignment and Assumption Agreement.
ARTICLE IV
PURCHASE PRICE, PAYMENT OF
PURCHASE PRICE AND LIQUIDATED DAMAGES
-------------------------------------
4.1 Purchase Price. Subject to the terms, conditions, and provisions contained
in this Agreement, Buyer agrees to pay, and Seller agrees to accept, as
consideration for conveyance of the Property (other than the Inventory and
Accounts) to Buyer, the sum of Thirty-Eight Million Two Hundred Fifty
Thousand Dollars ($38,250,000.00) (the Primary Purchase Price"). In
addition, at the Closing, Buyer agrees to purchase from Seller and pay, and
Seller agrees to sell to Buyer and accept, as consideration for the sale
and assignment of the Inventory and the Accounts to Buyer, the sum of: (i)
the value of the Inventory at its original cost; and (ii) the value of the
Accounts on a dollar-for-dollar basis (collectively, the "Inventory and
Accounts Price," which together with the Primary Purchase Price is
hereinafter referred to as the "Purchase Price").
4.2 Payment of Purchase Price; Deposit. The Purchase Price shall be paid by
Buyer as follows:
(a) One Million Five Hundred Thousand Dollars ($1,500,000) (the "Deposit")
shall be placed into Escrow by wire transfer of immediately available
funds to Escrow Holder within one (1) business day following the
Effective Date. Escrow Holder shall immediately notify Seller by
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facsimile in accordance with Section 14.1 hereof of Escrow Holder's
receipt of the Deposit. Escrow Holder shall not release the Deposit
except in strict accordance with the terms and conditions of this
Agreement, or in strict accordance with further written instructions
signed by both Seller and Buyer.
(b) The balance of the Purchase Price, subject to adjustments as provided
in Sections 9.6 and 9.7 hereof and taking into account all interest
earned on the Deposit (the "Balance"), shall be placed into Escrow by
wire transfer of immediately available funds to Escrow Holder at least
one (1) business day before the scheduled Closing. If the purchase of
the Property by Buyer hereunder is consummated, then the Deposit and
all interest accrued thereon shall constitute a part of and be applied
against the Purchase Price. If the purchase of the Property by Buyer
hereunder is not consummated, then the Deposit and all interest
accrued thereon shall either be returned to Buyer or be paid to Seller
in accordance with the provisions hereinafter set forth. Immediately
upon receipt of the Balance and without further instruction, Escrow
Holder shall invest the Balance in the Xxxxxxx Xxxxx Institutional
Fund account established pursuant to Section 4.4 below.
4.3 Allocation of Purchase Price. Subject to the prorations and adjustments
hereinafter provided, the Purchase Price shall be allocated as follows:
$31,982,564.00 for the Real Property; $1,900,000.00 for the Personal
Property other than the Inventory and the Accounts; and $4,367,436.00 for
the goodwill of the Hotel and the other Property as an ongoing business.
The Inventory and the Accounts shall be valued based on the Inventory and
Accounts Price as provided in Section 4.1 above. Notwithstanding the
aforesaid allocation of the Purchase Price, the sale of the Property shall
be on an all or nothing basis, the sale of each item of Property to be
conditioned upon the simultaneous sale of all other items of Property on a
concurrent basis, and Buyer shall have no right to purchase, and Seller
shall have no right to cause Buyer to purchase, less than all of the
Property as an entirety in accordance with the provisions of this
Agreement; provided, however, that if the portion of Inventory that
consists of alcoholic beverages cannot be conveyed to Buyer in material
accordance with applicable alcoholic beverage control laws, Seller and
Buyer shall complete the transactions contemplated by this Agreement
without transferring such alcoholic beverages to Buyer, in which case Buyer
shall receive a credit against the Inventory and Accounts Price for the
value of the alcoholic beverages, based on their original cost. Both Buyer
and Seller agree that in all public filings and reports, including, without
limitation, any documentary or other transfer tax declarations and any
federal, state, or local income, sales, or use tax returns or declarations,
the various items of Property shall be valued as herein provided or, if not
specifically provided for herein, then Buyer and Seller shall negotiate in
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good faith any additional allocations for the Property using, to the extent
required, the method set forth in section 1060 of the Internal Revenue Code
of 1986 (as amended) and the Treasury Regulations promulgated thereunder
for purposes of filing Form 8594 with the Internal Revenue Service.
4.4 Investment of Deposit. Immediately upon receipt of the Deposit and without
further instruction, Escrow Holder shall invest the Deposit in the Xxxxxxx
Xxxxx Institutional Fund, unless otherwise directed in writing by Buyer and
Seller. All interest on the Deposit shall accrue for the benefit of Buyer
until the Closing; provided, however, that in the event of any default by
Buyer hereunder, all interest earned on such account shall accrue to the
benefit of Seller. Seller shall not be responsible for nor bear the risk of
loss of the Deposit, and shall not be responsible for the rate of return
thereon.
4.5 Liquidated Damages. IF THE SALE OF THE PROPERTY AS CONTEMPLATED HEREUNDER
IS NOT CONSUMMATED BECAUSE THIS AGREEMENT IS TERMINATED BY SELLER UNDER
SECTION 14.22(c) HEREOF, AND SELLER HAS OTHERWISE SATISFIED ALL MATERIAL
CONDITIONS REQUIRED TO BE SATISFIED BY SELLER ON OR BEFORE THE DATE OF SUCH
TERMINATION, ESCROW HOLDER SHALL PAY TO SELLER THE DEPOSIT (INCLUDING ALL
INTEREST EARNED FROM THE INVESTMENT THEREOF') AND SELLER SHALL RETAIN SUCH
AMOUNT AS LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL
DAMAGES IN THE, EVENT OF A DEFAULT BY BUYER WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICABLE TO DETERMINE. THEREFORE, BY PLACING THEIR SIGNATURES BELOW,
THE PARTIES EXPRESSLY AGREE AND ACKNOWLEDGE THAT THE DEPOSIT (PLUS
INTEREST) HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES'
REASONABLE ESTIMATE OF SELLER'S DAMAGES IF THE SALE OF THE PROPERTY AS
CONTEMPLATED HEREUNDER IS NOT CONSUMMATED BECAUSE OF A DEFAULT UNDER THIS
AGREEMENT ON THE PART OF BUYER. THE PARTIES FURTHER ACKNOWLEDGE THAT SUCH
LIQUIDATED DAMAGES HAVE BEEN AGREED UPON AS SELLER'S EXCLUSIVE REMEDY
AGAINST BUYER IN THE EVENT THAT THE SALE OF THE PROPERTY AS CONTEMPLATED
HEREUNDER IS NOT CONSUMMATED BECAUSE OF A DEFAULT HEREUNDER ON THE PART OF
BUYER, PROVIDED THAT: (A) THE FOREGOING SHALL NOT LIMIT SELLER'S RIGHTS OR
REMEDIES WITH RESPECT TO (1) THE OBLIGATIONS OF BUYER UNDER SECTIONS 5.2,
14.2(b) AND 14.11 THEREOF AND (2) THOSE RIGHTS AND OBLIGATIONS THAT, BY
THEIR TERMS, SURVIVE THE TERMINATION OF THIS AGREEMENT; AND (B) BUYER SHALL
ALSO BE RESPONSIBLE FOR THE PAYMENT OF ALL TITLE COMPANY CHARGES RELATING
TO SEARCHING TITLE AND ISSUING THE COMMITMENT.
NOTHING CONTAINED IN THIS SECTION 4.5 SHALL BE DEEMED TO LIMIT ANY OF THE
INDEMNITIES OF BUYER OR SELLER CONTAINED ELSEWHERE IN THIS AGREEMENT. IN
THE EVENT THAT THE SALE OF THE PROPERTY AS CONTEMPLATED HEREUNDER IS
CONSUMMATED, THIS SECTION 4.5 SHALL BE OF NO FURTHER FORCE OR EFFECT.
12
"Seller"
MANHATTAN BEACH HOTEL PARTNERS, L.P.,
a Delaware limited partnership
By: Manhattan Beach Commercial Properties III Inc.,
a Delaware corporation
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxxx
Print Name: Xxxxxxx X. Xxxxxx
Print Title: President
"Buyer"
HMC/Interstate Manhattan Beach, L.P.,
a Delaware limited partnership
By: HMC Manhattan Beach, Inc.,
a Delaware corporation
Its: General Partner
By: /s/Xxxxx Xxxxxxx
Print Name: Xxxxx Xxxxxxx
Print Title: Vice President
13
ARTICLE V
"AS IS, WHERE IS" Sale
----------------------
5.1 "AS IS, WHERE IS" Sale. Buyer acknowledges that: (i) Seller owns and leases
the Property but has not and does not directly operate or manage the
Property; and (ii) Manager, an affiliate of one of the constituent entities
of Buyer, has managed and operated the Property pursuant to the Management
Agreement since 1992, and is the current manager and operator thereof. As
an essential inducement to Seller to sell the Property to Buyer on the
favorable terms and conditions set forth in this Agreement. Buyer
acknowledges, understands, and agrees as follows:
(a) (i) Buyer is (or is controlled by) a sophisticated purchaser who is
familiar with this type of property; (ii) except as set forth herein,
neither Seller nor any of its agents, brokers, officers, directors,
partners, shareholders, or employees has made or will make any
representations or warranties of any kind whatsoever, whether oral or
written, express or implied, with respect to the Property, including,
without limitation, with respect to the economic value of the
Property, adequacy of utilities serving the Property, the fitness or
suitability of the Property for Buyer's intended uses or the present
use of the Property, or the physical condition, occupation, or
management of the Property, its compliance with applicable statutes,
laws, codes, ordinances, regulations, or requirements relating to
occupancy, leasing, zoning, subdivision, removal of architectural or
communications barriers, planning, building, fire, safety, health or
environmental matters (including, without limitation, the presence or
absence of asbestos or toxic or hazardous substances or materials)
compliance with covenants, conditions, and restrictions (whether or
not of record), other local, municipal, regional, state, or federal
requirements, or other statutes, laws, codes, ordinances, regulations,
or requirements; and (iii) except as expressly provided herein, Buyer
will be purchasing the Property in its "AS IS, WHERE IS" condition and
"WITH ALL FAULTS," and except as expressly provided herein or in the
Documents, Seller expressly disclaims and negates, as to the Personal
Property and all of the other Property: (A) any implied or express
warranty of merchantability; (B) any implied or express warranty of
fitness for a particular purpose; and (C) any implied warranty with
respect to the condition of the Property, the past or projected
financial condition of the Property (including, without limitation,
the income or expenses thereof), or the uses permitted on, the
development requirements for, or any other matter or thing relating to
all or any portion of the Property. Pursuant to Section 5.2 hereof,
Buyer has been afforded the opportunity to make any and all
inspections of the Property and such related matters as Buyer may
reasonably desire, subject to the rights of the landlord, subtenants,
and current occupants of the Property.
14
(b) In addition, but without limiting the generality of subsection (a)
above, except as expressly provided herein: (i) all documents,
reports, studies, and other information or materials delivered or
disclosed to Buyer by Seller (including, without limitation, that
certain Phase I Environmental Site Assessment, dated as of March 18,
1997, prepared by CET Environmental Services, Inc. (the "Environmental
Assessment"), and expressly excluding therefrom the Leases, the
Contracts, the Permits, and Seller's Partnership Agreement)
(collectively, the "Information"), are being provided to Buyer for
informational purposes only and only as an accommodation to Buyer;
(ii) unless expressly stated otherwise, all of the Information relates
to the period from and after Seller's acquisition of title to the
Property, and Seller need not provide any documents, reports, studies,
or other information or materials regarding any aspect of Seller's
relationship with Seller's predecessor(s)-in-title unless, to Seller's
knowledge, a dispute exists relating thereto; (iii) Seller has not
made, is not making, and will not make any representation, warranty,
or promise of any kind, express or implied, concerning the accuracy or
completeness of all or any part of the Information; and (iv) any
inaccuracy, incompleteness, or deficiency in any part of the
Information shall be solely the risk and responsibility of Buyer,
shall not be chargeable in any respect to Seller, and shall not form
the basis of any claims by Buyer against any person or entity that
prepared, authored, compiled, or created any part of the Information,
such claims being expressly waived and relinquished by Buyer. Seller
shall provide reasonable assistance (provided that such assistance
shall be at no cost to Seller) to Buyer in obtaining a reliance letter
from the firm which prepared the Environmental Assessment, entitling
Buyer to rely thereon as if the same had been addressed to Buyer.
(c) Buyer hereby absolutely and unconditionally waives and releases
Seller, to the fullest extent permitted under law, from and of any and
all demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs, and expenses with respect to all
obligations for or pertaining to the existence of asbestos, hazardous
materials, or environmental contamination or conditions at, in, on,
under, or from the Property arising under or based upon any federal,
state, local, or foreign laws or regulations, or based upon common law
or otherwise, whether now or hereafter in effect, including, without
limitation all those provisions of law that exclude or may exclude
unknown or unsuspected claims from general release, provided, however,
that this waiver and release shall not release Seller from any
liability for fraud or intentional misrepresentation or to any
governmental agency pursuant to any federal or state law if such
liability is due to the existence of asbestos, hazardous materials, or
environmental contamination or conditions at, in, on, under, or from
the Property.
15
EXCEPT FOR ANY LIABILITY OF SELLER FOR FRAUD OR INTENTIONAL
MISREPRESENTATION OR TO A GOVERNMENTAL AGENCY PURSUANT TO FEDERAL OR
STATE LAW AND DUE TO THE EXISTENCE OF ASBESTOS, HAZARDOUS MATERIALS,
OR ENVIRONMENTAL CONTAMINATION OR CONDITIONS AT, IN, ON, UNDER, OR
FROM THE PROPERTY, THIS WAIVER AND RELEASE BY BUYER SPECIFICALLY, BUT
WITHOUT LIMITATION, INCLUDES BUYER'S WAIVER AND RELEASE OF ANY CLAIMS
UNDER SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH PROVIDES, "A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR", THE PROVISIONS OF WHICH BUYER HEREBY
SPECIFICALLY ACKNOWLEDGES, AFTER CONSULTATION WITH LEGAL COUNSEL AND
WITH FULL KNOWLEDGE OF THE CONSEQUENCES OF ITS ACTIONS.
/s/JFR
------
Buyer's initials
Notwithstanding the foregoing waiver and release, Buyer and Seller
acknowledge and agree that such waiver and release by Buyer is not
intended to preclude Buyer from asserting as a defense in any claim,
action, or proceeding brought against Buyer and relating to the
presence, discovery, or removal of any hazardous materials in, at,
about, or under the Property, that the responsibility therefor lies in
whole or in part with Seller or Seller's predecessors in title, but
Buyer shall not be entitled to seek recovery against Seller therefor,
except as otherwise expressly set forth herein.
(d) To the extent required to be operative, the disclaimers or warranties
contained herein are "conspicuous" disclaimers for purposes of any
applicable law, rule, regulation, or order, and the delivery of the
Environmental Assessment to Buyer constitutes appropriate written
disclosure and notice of hazardous substances at the Property to the
extent required by Section 25359.7 et seq. of the California Health
and Safety Code.
5.2 Inspection.
(a) Prior to the date hereof, Seller has permitted Buyer and its
representatives to enter upon and inspect the Property and to conduct
soils, engineering, and any other tests or studies as Buyer desired,
and Buyer acknowledges it has conducted the due diligence it desires
to conduct. Buyer has and shall keep the property free and clear of
any mechanic's or materialmen's liens arising out of any entry,
inspection, test, or study conducted by Buyer or its representatives,
and if Buyer has not already done so, Buyer shall promptly restore the
Property to its previous condition before any such entries were made
or inspections, studies, or tests were performed, and shall do so
after any future entries are made or inspections, studies, or tests
are performed.
16
(b) All entries by Buyer onto the Property shall be subject to, and
conducted in accordance with, all applicable laws, the Ground Lease,
and the terms of any Subleases, so as to avoid any material
interference with the operations and occupancy of the Property and to
avoid any material disturbance of the subtenants under the Subleases
or any of the guests or other occupants of the Property.
(c) If Buyer or its representatives undertook or undertake any borings or
other disturbances of the soil, the soil shall be re-compacted to its
condition immediately before any such borings or other disturbances
were undertaken, and if required by the City under the Ground Lease or
otherwise, Buyer shall obtain, at Buyer's own expense, a certificate
from a licensed soils engineer that certifies that the soil has been
re-compacted to such condition.
(d) Notwithstanding any general liability or other insurance that may be
maintained by Buyer, Buyer shall indemnify and defend Seller, City,
Manager, and Operator and hold Seller, City, Manager, and Operator
harmless (using counsel reasonably satisfactory to Seller) from any
and all loss, cost, liability, claim, damage, or expense (including,
without limitation, attorneys' fees and costs) that Seller, City,
Manager, or Operator may sustain or incur by reason of or in
connection with any such entry, inspections, studies, or tests;
provided, however, that if Buyer's entry, inspection, study, or test
results in the discovery of a defect in the Property, Buyer shall not
be responsible for any damages suffered by Seller, City, Manager, or
Operator as a result of such discovery, including, without limitation,
any impact on the marketability or value of the Property. The
indemnity obligations of Buyer under this Section 5.2(d) shall survive
any termination of this Agreement, or the delivery of the Assignment
and Assumption of Ground Lease and the Deed and the transfer of title
to the Property. If this Agreement is terminated for any reason other
than pursuant to Section 14.22(b) hereof, Buyer shall, upon request,
deliver to Seller (without any representation or warranty by Buyer)
copies of any and all inspections, studies, tests, surveys, or other
reports made for or provided to Buyer by third parties with respect to
the Property, other than any economic studies, financial analyses, or
capital improvement and rehabilitation studies or programs relating to
the Property (collectively, the "Excluded Reports"), and Buyer shall
make no further distributions or disclosures of any such inspections,
studies, tests, surveys, and other reports, other than the Excluded
Reports, unless Buyer is compelled to make such disclosure by a court
of competent jurisdiction or pursuant to a requirement of law. All
costs of copying such inspections, studies, tests, surveys, or other
reports shall be borne exclusively by Seller.
17
ARTICLE VI
TITLE TO PROPERTY; APPROVALS
----------------------------
6.1 Title. At the Closing, Seller shall convey the Improvements and the Ground
Lease to Buyer by execution and delivery of the Deed and the Assignment and
Assumption of Ground Lease respectively. The issuance by Commonwealth Land
Title Insurance Company (the "Title Company") of an American Land Title
Association Policy of Title Insurance in the amount of $38,000,000.00 and
in conformity with the Commitment (the "Owner's Title Policy") shall be
conclusive evidence, except as expressly provided to the contrary in this
Section 6.1, of Seller's delivery of appropriate title acceptable to Buyer.
Buyer's sole recourse for any defect in the title actually acquired by
Buyer shall be to enforce Buyer's rights under the Owner's Title Policy,
and Seller shall have no liability to Buyer based upon any defect in the
title actually acquired by Buyer unless Seller would otherwise be liable
therefor based on the terms, conditions, and warranties of the Grant Deed,
and Buyer's actual damages incurred as a direct result of such title defect
exceed $38,000,000.00. If such is the case, Seller's liability therefor
shall be limited to the amount by which Buyer's actual damages incurred as
a direct result of such title defect exceed $38,000,000.00. Notwithstanding
anything to the contrary in this Section 6.1, Seller shall be liable for
all Buyer's actual damages incurred as a direct result of a breach of a
representation or warranty of Seller made in Section 10.2(a) or (b) below,
or a complete failure of Buyer's title due to Seller's not holding any
title to the Real Property at the time of its transfer to Buyer or due to
Seller's lack of authority to transfer title to the Real Property. The
Owner's Title Policy shall be issued by the Title Company subject only to
property taxes and assessments not yet delinquent, and such other
exceptions to title as may be approved by Buyer pursuant to Section 6.2
hereof (collectively, the "Permitted Exceptions"). The provisions of this
Section 6.1 limiting Buyer's rights, remedies, and recourse against Seller
for a defect in title relating to the Real Property shall survive the
Closing.
6.2 Approval of Title.
(a) Buyer has received and reviewed: (i) that certain commitment for title
insurance dated July 11, 1997, concerning the Real Property and issued
by the Title Company under order number 1700840-20, copies of all
documents referred to in the Commitment as encumbering the Real
18
Property, and all title endorsements attached thereto (collectively,
the "Commitment"); and (ii) that certain ALTA/ACSM Land Title Survey
of the Real Property prepared by Xxxxx & Xxxxxxxx, Inc., as job number
9393, and dated April 5, 1997, (the "Survey"). Buyer has approved the
condition of title to (and the Survey of) the Real Property, and shall
not object thereto except for: (w) matters first arising after the
date of the Commitment; (x) those title exceptions in Schedule
B--Section 2 of the Commitment numbered 17 and 19, which Seller shall
cause to be omitted from the Owner's Title Policy as title exceptions,
and which in the case of exception 17 Buyer agrees will be replaced
with a title exception specifying the specific subtenants and other
occupants of the Property at the time of Closing; (y) Schedule
B--Section 1 of the Commitment; and (z) the first and second
paragraphs at the beginning of Schedule B--Section 2 of the
Commitment.
(b) Buyer shall in no event refuse to accept the following matters of
title (each of which shall be deemed a "Permitted Exception"
hereunder): (i) applicable zoning and use regulations of any
applicable governmental authority; (ii) rights of subtenants under
Subleases entered into by Seller or Manager prior to the Effective
Date, as tenants only, without any option to purchase or right of
first refusal for all or any portion of the Real Property; (iii)
rights of Hotel guests as guests only; and (iv) any mechanic's or
other liens arising out of buyer's entry on the Property.
(c) Prior to the Closing, Seller shall not take any action or commit or
suffer any acts which would give rise to a variance from the current
legal description of the Real Property, or cause the creation of any
exception or encumbrance against or respecting the Real Property,
without in each case the prior written consent of Buyer, which consent
shall not be unreasonably withheld or delayed.
6.3 Ground Lease.
(a) Transfer. During the pendency of this Agreement, Buyer and Seller
shall at all times cooperate, act in good faith, and use commercially
reasonable efforts to comply with the transfer (i.e., assignment and
assumption) provisions of the Ground Lease, and to otherwise, in
accordance with the terms and conditions of the Ground Lease, obtain:
(i) the written approval of the City to the transfer of the Ground
Lease; and (ii) an estoppel certificate as may be required of the City
pursuant to Section 13.3 of the Ground Lease (collectively, the "City
19
Approval"). Buyer shall pay all fees and costs of the City relating to
such transfer and to obtaining the City Approval, including, without
limitation, the one percent (1%) transfer fee that may be levied by
the City upon transfers of the type contemplated hereby.
(b) Solicitation. Within five (5) business days after the Effective Date,
Seller shall solicit the approval of the City to the sale of the
Property as contemplated hereby. Seller shall consult with Buyer in
connection with obtaining the City Approval and shall provide Buyer
with drafts of all documents to be executed by the City as part of the
City Approval for Buyer's review and approval, which review and
approval shall not be unreasonably withheld or delayed.
(c) Materials and Cooperation. Buyer acknowledges and agrees that at all
times it shall cooperate with Seller in and shall have joint
responsibility for the preparation of those materials (the "City
Materials") that may be required or requested by the City in
connection with attempting to obtain the City Approval; provided,
however, that unless otherwise requested by Seller or by the City, all
contact with the City shall be made through Seller or Seller's
counsel.
(d) City Approval Notice. Within three (3) business days of obtaining the
City Approval, Seller shall provide written notice (the "City Approval
Notice") to Buyer and Escrow Holder of such fact.
(e) Indemnification. Each party hereto shall: (i) indemnify, defend, and
hold harmless each other party and their respective partners,
affiliates, directors, officers, agents, representatives, and
controlling persons (an "Indemnified Party") against any and all loss,
cost, liability, claim, damage, and expense whatsoever to which an
Indemnified Party may become subject, insofar as such losses, costs,
liabilities, claims, damages, or expenses (or actions in respect
thereof) arise out of any untrue statement or misrepresentation of a
material fact contained in the City Materials, including any amendment
or supplement thereto, or the omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and (ii) reimburse the Indemnified Party for
any legal or other expenses reasonably incurred by the Indemnified
Party in connection with investigating or defending any such loss,
costs, liability, claim, damage, expense, or action as such expenses
are incurred.
20
6.4 Personal Property, Subleases, Contracts, Permits, and Miscellaneous
Property Assets. At the Closing, Seller shall transfer to Buyer and Buyer
shall assume all of Seller's interest in the Personal Property and in the
Subleases, Contracts (including, without limitation, the Management
Agreement, the License Agreement (unless cancelled prior to or at the
Closing), and the Operating Agreement), Permits, and Miscellaneous Property
Assets by execution and delivery of the Xxxx of Sale and the General
Assignment and Assumption Agreement respectively. In connection therewith,
Buyer shall cause Manager to agree to Seller's transfer of the Management
Agreement to Buyer as provided herein, and shall use its good faith
commercially reasonable efforts to comply with the transfer provisions of
the License Agreement (and, if any, of the Operating Agreement). Buyer
shall pay all fees and costs of Manager, Licensor, and Operator relating to
the transfer of the Management Agreement, the License Agreement, and the
Operating Agreement respectively, and Seller shall have no liability for
any termination or severance costs of any current employees at the Hotel or
the Golf Course, or of any employees employed thereat as of the Closing
Date, if such termination or severance was a result of the transfer of the
Property to Buyer or Buyer's termination of the Management Agreement or the
Operating Agreement, all such liability being expressly agreed to be that
of Buyer. Seller shall also use its good faith commercially reasonable
efforts to arrange for the transfer to Buyer of the Management Agreement
and the Operating Agreement, and the transfer to Buyer or termination of
the License Agreement, in accordance with the terms and conditions of this
Agreement. Seller and Buyer specifically waive compliance, if any is
required, with California Uniform Commercial Code, Sections 6101, et seq.,
commonly referred to as the Uniform Commercial Code - Bulk Transfers, New
York Uniform Commercial Code Sections 6-101, et seq., commonly referred to
as the Uniform Commercial Code - Bulk Transfers, and any similar provisions
under the laws of the State of California or the laws of the State of New
York in effect from time to time.
6.5 Approval of Other Matters. Buyer and Seller each hereby acknowledges that
the transfer documents attached hereto as exhibits (the "Documents"), as
revised to conform to the specific terms of this Agreement (as amended from
time to time), will be used at Closing. Buyer and Seller each hereby
approve the form of all the Documents, subject to completion of any
uncompleted information to be set forth therein in accordance with the
terms of this Agreement, and further subject to the reasonable review and
approval of the Title Company, and to any other reasonable changes required
to comply with federal, state, or local law.
21
ARTICLE VII
BUYER'S CONDITIONS PRECEDENT TO CLOSING
---------------------------------------
7.1 Buyer's Conditions Precedent. The following conditions are conditions
precedent to Buyer's obligation to purchase the Property:
(a) City Approval. The City Approval shall have been obtained. If the City
formally disapproves the sale of the Property to Buyer pursuant to
this Agreement, then this Agreement shall automatically be terminated.
If the City Approval has not been obtained and the City Approval
Notice has not been delivered to Buyer and to Escrow Holder on or
before ninety (90) calendar days after the Effective Date, then either
party may terminate this Agreement by written notice to the other
party and to Escrow Holder.
(b) Limited Partner Disapproval. The Limited Partners of Seller shall not
have voted in accordance with Seller's Partnership Agreement to
disapprove any of the transactions contemplated by this Agreement
(such a vote to disapprove any of the transactions contemplated herein
being referred to herein as a "Limited Partner Disapproval"). This
Agreement shall automatically be terminated upon any Limited Partner
Disapproval. In addition, if prior to the Closing the Limited Partners
of Seller have caused a meeting of the Partnership to be called in
accordance with Seller's Partnership Agreement, to vote to approve or
disapprove the transactions contemplated herein (a "Partnership Vote
Meeting"), then: (i) Seller shall promptly thereafter provide written
notice of the requirement for such meeting (the "Notice of Required
Partnership Vote") to Buyer and to Escrow Holder, together with the
date set therefor; (ii) the Closing Date provided for in Section
9.2(a) below shall be extended to the seventh (7th) calendar day
following Seller's delivery of the result of the Partnership Vote
Meeting to Buyer and to Escrow Holder; (iii) Seller shall provide
Buyer and Escrow Holder with written notice of the result of the
Partnership Vote Meeting promptly after such result becomes available;
and (iv) unless the Partnership Vote Meeting is held and written
notice of the approval by the Limited Partners of the transactions
contemplated by this Agreement is provided to Buyer and Escrow Holder
within one hundred twenty (120) calendar days of Buyer's and Escrow
Holder's receipt of the Notice of Required Partnership Vote, either
party may terminate this Agreement by written notice to the other
party and to Escrow Holder. Seller shall be responsible for all costs
associated with conducting any Partnership Vote Meeting.
22
(c) Other Approvals. The approval of Licensor to the transfer to Buyer or
cancellation of the License Agreement shall have been obtained as
provided herein. If such approval or the cancellation has not been
obtained on or before ninety (90) calendar, days after the Effective
Date, Buyer may terminate this Agreement by written notice to Seller
and to Escrow Holder. Notwithstanding anything to the contrary
contained in this Agreement, the failure of Buyer to cause Manager to
consent to the transfer of the Management Agreement to Buyer shall not
be a condition precedent to Buyer's obligation to purchase the
Property.
(d) Owner's Title Policy. The Title Company shall be irrevocably committed
to issue to Buyer the Owner's Title Policy, subject only to the
Permitted Exceptions.
(e) Seller's Organizational Documents. Seller shall have delivered the
following to Buyer: (i) for Seller, certified copies of Seller's
Partnership Agreement, a Certificate of Limited Partnership, all
amendments or modifications thereto, and a current certificate of good
standing; and (ii) for Seller's general partner, certified copies of
its articles of incorporation and all amendments or modifications
thereto, appropriate resolutions and incumbency certificates, and a
current certificate of good standing.
(f) Compliance by Seller. Seller shall have complied in all respects with
each and every material covenant and condition of this Agreement to be
kept or complied with by Seller.
(g) Representations and Warranties. The representations and warranties of
Seller contained in Section 10.2 and elsewhere in this Agreement shall
be true and correct in all material respects when made, and shall be
true and correct in all material respects on the Closing Date, and
Buyer shall have received a certificate to that effect by a duly
authorized officer of the general partner of Seller (the liability
thereunder being solely that of Seller and not the personal liability
of the officer executing the same), and such certificate shall further
certify that Seller has the full right, power, and authority to own
and convey the Property, and to otherwise perform and comply with all
the terms and conditions of this Agreement, and that the general
partner of Seller has the full right, power, and authority to bind
Seller with respect to this Agreement and the transactions
contemplated hereby.
7.2 Failure to Obtain Approvals or Receipt of Disapprovals. Upon termination of
this Agreement in accordance with any of Sections 7.1(a), 7.1 (b) or 7.1
(c) above, the rights and obligations of the parties hereto shall be those
described in Section 14.22(a) below.
23
7.3 Satisfaction of Conditions. Seller hereby agrees to use commercially
reasonable efforts to cause each of the conditions precedent to the
obligations of Buyer hereunder to be fully satisfied, performed, and
discharged on and as of the Closing Date. Buyer shall not have the right to
terminate this Agreement pursuant to Sections 7.1(a) or 7.1(c) above if
Buyer has failed to use commercially reasonable efforts to cause each of
the conditions precedent to the obligations of Buyer hereunder to be fully
satisfied, performed, and discharged on and as of the Closing Date. Buyer
shall not have the right to terminate this Agreement pursuant to Section
7.1(b) above if Buyer has failed to timely provide information reasonably
requested by Seller in connection with a Partnership Vote Meeting.
7.4 Waiver of Conditions. If any condition set forth in this Article VII is not
fulfilled, Buyer may, in its sole and absolute discretion, elect to waive
such condition by providing written notice of such election to Seller and
to Escrow Holder. Such waiver shall not constitute a waiver of any other
condition.
ARTICLE VIII
SELLER'S CONDITIONS PRECEDENT TO CLOSING
----------------------------------------
8.1 Seller's Conditions Precedent. The following conditions are conditions
precedent to Seller's obligation to sell the Property:
(a) City Approval. The City Approval shall have been obtained. If the City
formally disapproves the sale of the Property to Buyer pursuant to
this Agreement, then this Agreement shall automatically be terminated.
If the City Approval has not been obtained and the City Approval
Notice has not been delivered to Buyer and to Escrow Holder on or
before ninety (90) calendar days after the Effective Date, then either
party may terminate this Agreement by written notice to the other
party and to Escrow Holder.
(b) Limited Partner Disapproval. No Limited Partner Disapproval shall have
occurred. This Agreement shall automatically terminate upon any
Limited Partner Disapproval. In addition, if a Partnership Vote
Meeting has been called prior to the Closing, then: (i) the Closing
Date provided for in Section 9.2(a) below shall be extended to the
seventh (7th) calendar day following Seller's delivery of the result
of the Partnership Vote Meeting to Buyer and to Escrow Holder; and
(ii) unless the Partnership Vote Meeting is held and written notice of
24
the approval by the Limited Partners of the transactions contemplated
by this Agreement is provided to Buyer and Escrow Holder within one
hundred twenty (120) calendar days of Buyer's and Escrow Holder's
receipt of the Notice of Required Partnership Vote, either party may
terminate this Agreement by written notice to the other party and to
Escrow Holder. Seller shall be responsible for all costs associated
with conducting any Partnership Vote Meeting.
(c) Other Approvals. The approval of Manager to the transfer to Buyer of
the Management Agreement, and the approval of Licensor to the transfer
to Buyer or the cancellation of the License Agreement shall have been
obtained as provided herein. If such approvals (or cancellation in the
case of the License Agreement) have not been obtained on or before
ninety (90) calendar days after the Effective Date, Seller may
terminate this Agreement by written notice to Buyer and to Escrow
Holder. Also, the general manager of the Hotel shall have given thirty
(30) days advance written notice of the sale of the Hotel to the Hotel
Employees and Restaurant Employees International Union in Such form
and substance as is reasonably satisfactory to Seller and in
accordance with Section 28 of the Collective Bargaining Agreement, a
copy of which has been provided to Buyer. Seller agrees to inform
Manager of the pending sale of the Hotel so that the general manager
of the Hotel may give such notice.
(d) Buyer's Organizational Documents. Buyer shall have delivered the
following to Seller: (i) for Buyer, certified copies of Buyer's
partnership agreement, a Certificate of Limited Partnership, all
amendments or modifications thereto, and a current certificate of good
standing; and (ii) for Buyer's general partner, certified copies of
its articles of incorporation and all amendments or modifications
thereto, appropriate resolutions and incumbency certificates, and a
current certificate of good standing.
(e) Compliance By Buyer. Buyer shall have complied in all respects with
each and every material covenant and condition of this Agreement to be
kept or complied with by Buyer.
(f) Representations and Warranties. The representations and warranties of
Buyer contained in Section 10.1 and elsewhere in this Agreement shall
be true and correct in all material respects when made, and shall be
true and correct in all material respects on the Closing Date, and
Seller shall have received a certificate to that effect by a duly
authorized officer of Buyer (the liability thereunder being solely
that of Buyer and not the personal liability of the officer executing
the same).
8.2 Failure to Obtain Approvals or Receipt of Disapprovals. Upon termination of
this Agreement in accordance with any of Sections 8.1(a), 8.1(b). or 8.1(c)
above, the rights and obligations of the parties hereto shall be those
described in Section 14.22(a) below.
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8.3 Satisfaction of Conditions. Buyer hereby agrees to use commercially
reasonable efforts to cause each of the conditions precedent to the
obligations of Seller to be fully satisfied, performed, and discharged on
and as of the Closing Date. Seller shall not have the right to terminate
this Agreement pursuant to Sections 8.1(a), 8.1(b), or 8.1(c) if Seller has
failed to use commercially reasonable efforts to cause such conditions
precedent to Closing described therein to be satisfied.
8.4 Waiver of Conditions. If any condition set forth in this Article VIII is
not fulfilled, Seller may, in its sole and absolute discretion, elect to
waive such condition by providing written notice of such election to Buyer
and to Escrow Holder. Such waiver shall not constitute a waiver of any
other condition.
ARTICLE IX
ESCROW AND CLOSING
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9.1 Deposit With Escrow Holder and Escrow Instructions. Escrow hereunder (the
"Escrow") shall be established with Escrow Holder at 000 Xxxx 0xx Xxxxxx,
0xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, 00000, Attention: Xxx Xxxxxx. Upon
execution of this Agreement, the parties shall deposit an executed copy of
this Agreement with Escrow Holder. This Agreement shall serve as the
instructions to Escrow Holder to consummate the purchase and sale
contemplated hereby. Seller and Buyer agree to execute such additional and
supplementary escrow instructions as are consistent with this Agreement and
as may be appropriate to enable Escrow Holder to comply with the terms of
this Agreement. If there is any conflict between the provisions of this
Agreement and any additional or supplementary escrow instructions, however,
the terms of this Agreement shall control.
9.2 Closing.
(a) Except as may be provided otherwise herein, the Closing Date shall
occur on the seventh (7th) calendar day following the satisfaction or
waiver of all the conditions precedent to Closing contained in
Articles VII and VIII above, but in no event later than March 15,
1998, unless the parties hereto agree in writing, each in its sole and
absolute discretion, to change the scheduled Closing Date.
(b) If either party has complied with the material terms and conditions of
this Agreement on or before the scheduled Closing Date but the Closing
does not occur because of a default hereunder by the other party, the
defaulting party shall be deemed to be in material default of this
Agreement and the non-defaulting party may terminate this Agreement in
accordance with Section 14.22 below.
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9.3 Deliveries by Seller.
(1) No less than three (3) business days prior to the Closing, Seller shall
deposit with Escrow Holder the following:
(a) Seven (7) original counterparts of the Assignment and Assumption of
Ground Lease, duly executed and acknowledged by Seller and in
recordable form;
(b) One (1) original of the Deed, duly executed and acknowledged by
Seller;
(c) Four (4) originals of the Xxxx of Sale, duly executed by Seller;
(d) Four (4) original counterparts of the General Assignment and
Assumption Agreement, duly executed by Seller;
(e) Two (2) original non-foreign affidavits satisfying the requirements of
Section 1445 of the United States Internal Revenue Code of 1986, as
amended, and the requirements of Section 18805 of the California
Revenue and Taxation Code, as amended, substantially in the form of
Exhibit F attached hereto and incorporated herein by reference (the
Seller's Non-Foreign Affidavit"), duly executed by Seller;
(f) Original copies, executed by or on behalf of Seller, of any required
real estate transfer tax declarations, or any similar documentation
required to evidence the payment of any tax imposed by any state,
county, or municipality on the transaction contemplated hereby;
(g) Such additional articles of incorporation, agreements or certificates
of partnership, resolutions, authorizations, bylaws, certifications,
or other corporate, partnership, or trust documents or agreements
relating to Seller and Seller's partners as Buyer or Escrow Holder
shall reasonably require in connection with this transaction;
(h) A Certificate of Payment of Buyer, or substantially similar
certificate or letter executed by the State of California Board of
Equalization, evidencing the fact that Buyer is not required to
withhold any funds from the Purchase Price for payment of any amount
due to such governmental authority; and
(i) Upon reasonable request by Buyer, Seller's 1994, 1995, and 1996
annual, year-end audited financial statements prepared in accordance
with generally accepted accounting principles and the rules and
regulations of the Securities and Exchange Commission.
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(j) If the License is to be assigned to and assumed by Buyer at the
Closing, either an estoppel certificate from Licensor in form and
substance reasonably acceptable to Buyer, or a certificate from Seller
certifying that the amount owed to Licensor does not exceed an amount
specified in such certificate (and such amount shall be assumed by
Buyer at the Closing as a Payable, and Buyer shall receive a credit
against the Purchase Price for such amount as described in Section 9.6
(p) below). Whether to provide an estoppel certificate from Licensor
or a certificate from Seller shall be within Seller's sole and
absolute discretion.
(2) At least one (1) business day before the Closing, Seller shall deposit with
Escrow Holder the following:
(a) Any other cash, documents, or instruments called for hereunder or
reasonably requested by Buyer and consistent herewith to be paid,
executed, or delivered by Seller that have not previously been
delivered by Seller to Escrow Holder.
9.4 Deliveries by Buyer.
(1) No later than three (3) business days prior to the Closing, Buyer shall
deposit with Escrow Holder the following:
(a) Seven (7) original counterparts of the Assignment and Assumption of
Ground Lease, duly executed and acknowledged by Buyer and in
recordable form;
(b) Four (4) original counterparts of the General Assignment and
Assumption Agreement, duly executed by Buyer;
(c) Such additional articles of incorporation, agreements or certificates
of partnership, resolutions, authorizations, bylaws, certifications,
or other corporate, partnership, or trust documents or agreements
relating to Buyer as Seller or Escrow Holder shall reasonably require
in connection with this transaction;
(d) Original copies, executed by or on behalf of Buyer, of any required
real estate transfer tax declarations, or any similar documentation
required to evidence the payment of any tax imposed by any state,
county, or municipality on the transaction contemplated hereby; and
(e) Any documents, or instruments reasonably requested by Seller, the
City, Licensor, Operator, or Title Company to evidence Buyer's
assumption of the Ground Lease, the Management Agreement, the License
Agreement, the Operating Agreement, and the release of Seller from its
obligations under each, all executed and delivered (in recordable form
where necessary) by Buyer.
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(2) At least one (1) business day before the Closing, Buyer shall deposit with
Escrow Holder the following:
(a) Good and immediately available funds sufficient to pay the Balance,
Buyer's portion of the closing costs, and any other amounts payable by
Buyer in order to permit Escrow Holder to close the Escrow which, if
deposited by Buyer prior to the Closing Date, shall be invested for
Buyer's benefit at Buyer's reasonable discretion; and
(b) Any other cash, documents, or instruments called for hereunder or
reasonably requested by Seller and consistent herewith to be paid,
executed, or delivered by Buyer or that are required for Closing
hereunder that have not been previously delivered by Buyer to Escrow
Holder.
9.5 Additional Deliveries by Buyer, Seller, and Others. At least one (1)
business day prior to the Closing: (i) Buyer and Seller shall also deliver
to Escrow Holder executed counterparts of the Employment Escrow Agreement,
and fully executed notices to the lessors under any equipment leases,
subtenants under any Subleases, and vendors under any service contracts,
substantially in the form of Exhibit G attached hereto and incorporated
herein by reference; and (ii) City shall have signed and delivered into
Escrow the Consent attached to the Assignment and Assumption of Ground
Lease, Manager shall have signed and delivered into Escrow the Consent
attached to the General Assignment and Assumption Agreement, and Licensor
shall have signed and delivered into Escrow the Consent attached to the
General Assignment and Assumption Agreement, or a written cancellation of
the License Agreement in form and substance reasonably satisfactory to
Buyer and to Seller.
9.6 Prorations and Apportionments. Except as otherwise provided in this Section
9.6 or elsewhere in this Agreement, all revenues from the Property and all
expenses of the Property shall be prorated and apportioned (the
"Prorations") as of 11:59 p.m. on the day before the Closing Date (the
"Cutoff Time"), and Seller shall be charged and credited for such
Prorations up to the Cutoff Time and Buyer shall be charged and credited
for all of the same after the Cutoff Time. Prior to Closing, Buyer and
Seller shall review and approve the Prorations. If the actual amounts to be
prorated and apportioned are not then known, or if any additional revenues
may be received or expenses incurred after the date the Prorations are
made, the Prorations shall be made on the basis of the best evidence then
available. In particular:
(a) All Guest Ledger Receivables (less travel agent commissions assumed by
Buyer as a Payable, and less credit card discounts) for all room
nights at the Hotel up to but not including the room night during
which the Cutoff Time occurs shall be a part of the Accounts, and
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Buyer shall be entitled to all Guest Ledger Receivables for all room
nights at the Hotel after the Cutoff Time. One-half (1/2) of the Guest
Ledger Receivables (less travel agent commissions assumed by Buyer as
a Payable, and less credit card discounts) for the full room night at
the Hotel during which the Cutoff Time occurs shall also be a part of
the Accounts, and Buyer shall be entitled to the remainder thereof.
(b) All restaurant and bar facilities shall be deemed closed as of the
Cutoff Time and Seller shall receive the revenues from the same until
the Cutoff Time, and Buyer shall receive the revenues from the same
thereafter.
(c) Except as provided otherwise in this Agreement, all revenues and
expenses, as the case may be, under any Subleases and Contracts
(including, without limitation, the License Agreement, the Management
Agreement, and the Operating Agreement) shall be prorated as of the
Cutoff Time.
(d) Seller shall assign and sell to Buyer and Buyer shall assume and
purchase from Seller all Accounts on a dollar-for-dollar basis, but
Seller shall retain ownership of the Aged Accounts. Nevertheless,
Buyer shall use its good faith commercially reasonable efforts to
collect the Aged Accounts from and after the Closing Date. Seller and
Buyer shall meet ninety (90) calendar days after the Closing Date to
review the status of the Accounts, the Aged Accounts, and percentage
rent under the Ground Lease, and to make cash adjustments for Accounts
that Buyer was unable to collect using its good faith commercially
reasonable efforts, for Aged Accounts that Buyer was able to collect
on Seller's behalf, and for any inaccuracies in prior percentage rent
calculations. It is understood and agreed that Seller shall retain the
right to collect any sums due Seller under the Aged Accounts, and in
connection therewith, shall have the right to review Buyer's records
during normal business hours and upon reasonable notice to the extent
reasonably necessary.
(e) All real property taxes and assessments, personal property taxes,
hotel occupancy taxes, and business taxes shall be prorated as of the
Cutoff Time, based on a 365-day year.
(f) Base rent required to be paid by Seller under the Ground Lease for the
Month in which Closing occurs shall be prorated between Buyer and
Seller effective as of the Closing Date based on the actual number of
days elapsed. Upon close of Escrow, Buyer and Seller shall jointly
notify City in writing of the Closing Date and inform City that Buyer
shall thereafter make all payments to City.
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(g) No provision has been made for the proration of utility charges
(including, without limitation, telephone, gas, water, and
electricity) as all such services shall be terminated for billing
purposes as of the Closing Date and Buyer shall, prior to the Closing
Date, make application for the continuation of such services in its
name. It is further anticipated that in connection with all such
services, the meters will be read as nearly as possible to the Cutoff
Time (but that Buyer shall be responsible for paying the bills for
such services to the Cutoff Time and shall receive a credit against
the Purchase Price therefor), and that commencing on the Closing Date,
Buyer shall be responsible for the payment of all such utility
accounts. If any such utility accounts are not in fact handled in this
manner, they shall be prorated based upon the best available
information and settled at the ninety (90) day "true-up" described in
Section 9.6 (r) below. At the Closing, Seller shall assign or
otherwise transfer all utility deposits to Buyer which have not then
been refunded to Seller, and Seller shall receive a credit therefor.
(h) All cash, checks, and other funds, including till money and house
banks, shall be transferred by Seller to Buyer at Closing, (with
representatives of each party at the Hotel making the transfer in
person), and Seller shall receive a credit therefor on a
dollar-for-dollar basis. All notes, security, and other evidence of
indebtedness (excluding all notes, security, and other evidence of
indebtedness relating to the Accounts) located at or relating to the
Property at the time of the Closing, all balances on deposit with
banking institutions relating to the Property, and the FF&E Reserves,
are and shall remain the property of Seller and are not included in
the sale of the Property contemplated hereby.
(i) At the Cutoff Time, Buyer and Seller shall make an accounting of the
Inventory. At the Closing, Seller shall sell to Buyer, and Buyer shall
purchase from Seller, all of the Inventory, as provided herein.
(j) Seller shall be responsible for all sales, use, and other tax due
(together with interest and penalties thereon, if any), relating to
the period of time prior to the Cutoff Time, and Buyer shall be
responsible for the same for the period of time after the Cutoff Time.
Buyer, however, shall be solely responsible to pay all sales, use, and
other tax due, (together with interest and penalties thereon, if any),
resulting from Seller's sale and transfer of the Personal Property to
Buyer, and shall indemnify, defend, and hold Seller harmless from and
against all loss, cost, liability, claim, damage, and expense,
including reasonable attorneys' fees and costs, resulting from Buyer's
failure to pay all such taxes to the appropriate governmental
authority. The indemnity obligations of Buyer under this Section
9.6(j) shall survive the delivery of the Assignment and Assumption of
Ground Lease and the Deed and the transfer of title to the Property.
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(k) All fees paid for Permits shall be prorated as of the Cutoff Time.
(1) Buyer shall receive a credit against the Purchase Price for advance
receipts, if any, received by Seller in connection with Hotel
reservations, to the extent such reservations relate to a time period
after the Cutoff Time; and Seller shall receive a credit for advance
payments, if any, made by it in connection with the operation of the
Hotel, to the extent such advance payments relate to a period of time
after the Cutoff Time.
(m) At the Cutoff Time, all vending machine monies shall be removed by
Seller for the sole benefit of Seller.
(n) Buyer shall be entitled to a credit against the Purchase Price in the
aggregate amount of any security or other deposits that are retained
by Seller at the Closing and that relate to any Contract or Sublease,
and Seller shall be entitled to such a credit in the aggregate amount
of any security or other deposits that are retained by third parties
at the Closing and that relate to any Contract or Sublease.
(o) Buyer shall receive a credit at Closing for the repair of certain
items at the Property claimed by Buyer to be in need of repair based
on Buyer's due diligence at and investigation of the Property. Buyer
and Seller agree that the amount of such credit shall be Four Hundred
Thousand Dollars ($400,000.00).
(p) All outstanding Payables shall all be assumed by Buyer as of the
Closing, and Buyer shall receive a credit against the Purchase Price
in the full amount of such Payables assumed, to the extent such
Payables relate to any period of time prior to the Cutoff Time.
(q) The payroll for Manager's employees working at the Property and all
outstanding and unused vacation and sick pay for such employees
accrued through the Cutoff Time shall be prorated between Seller and
Buyer, and the amount attributed to Seller shall be assumed by Buyer
as a Payable.
(r) At close of Escrow, Buyer shall deposit into Escrow, in good and
immediately available funds, any additional amount required to cover
prorations and other charges to Buyer which have been determined prior
to close of Escrow in accordance with this Agreement. Seller and Buyer
shall settle any prorations not known at close of Escrow within ninety
(90) calendar days after the Closing Date. In the event that either
party hereto receives amounts that are due to the other under the
terms of this Section 9.6, such amounts shall be paid to the party
entitled thereto within thirty (30) calendar days of receipt by the,
other of such amount, which payment shall be accompanied by a
calculation thereof together with such documentation as may be
reasonably necessary to support such calculation.
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(s) If Seller and Buyer are unable, after negotiating in good faith, to
agree upon any particular Proration item, or the amount thereof, the
Closing shall nevertheless occur, and proration adjustments shall be
made, on a tentative basis as proposed by Buyer, with any differences
between the amounts proposed by Buyer and the amounts proposed by
Seller deposited by Buyer in an escrow with the Title Company under
the Title Company's form of strict joint order escrow. Promptly after
Closing, Buyer and Seller shall meet and attempt in good faith to
resolve any differences between them with regard to any item of
Proration in dispute. If however, the parties are unable, within ten
(10) business days following Closing, to resolve all items in dispute,
each party will, within three (3) business days thereafter, and at its
sole cost and expense, engage an independent and disinterested
certified public accountant with no less than ten (10) years
experience in calculating prorations of the type in question (other
than the accounting firm of Xxxxxx Xxxxxxxx & Co.) to calculate
(within ten (10) business days) the item or items of Proration in
dispute, and, so long as the calculation of the higher accountant of
any particular item is no more than 110% of the value of the lower
accountant, the parties will agree to accept the average of the two
calculations. In the event that the higher calculation is more than
110% of the lower calculation, then the two accountants shall within
five (5) business days jointly designate a third disinterested
certified public accountant. In the event that the two accountants
after good faith attempts shall have failed to agree on the third
accountant within such five day period, then either Buyer or Seller
may request that the accounting firm of Xxxxxx Xxxxxxxx & Co.
designate the third accountant, and such designation(s) shall be
binding on the parties. If, within ten (10) business days after
appointment of the third accountant, a majority of the accountants
concur on the valuation, that valuation shall be binding and
conclusive on Buyer and Seller. If a majority of the accountants do
not concur within that period, the calculation farthest from the
median of the three calculations shall be disregarded and the average
of the remaining two calculations shall be deemed the calculation and
shall be binding and conclusive. The cost of the third accountant
shall be borne equally by the parties. Buyer (on its own behalf and on
behalf of Manager) and Seller agree to furnish the accountant(s) with
all appropriate information utilized in the parties' own calculations.
(t) The provisions of this Section 9.6 shall, except to the extent
expressly provided otherwise, survive the Closing for a period of
ninety (90) calendar days.
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9.7 Costs and Expenses. Seller shall pay: (a) one-half (1/2) the premium for
the CLTA coverage under the Owner's Title Policy; (b) one-half (l/2) the
cost of the Survey, not to exceed Fifteen Thousand Dollars ($15,000.00);
(c) all charges to remove any title exceptions that are not Permitted
Exceptions and that Seller has elected to remove, including recording fees
for the same; (d) all costs directly related to any Partnership Vote
Meeting that may be called in accordance with the terms of this Agreement:
(e) one-half (1/2) of all charges for filing and recording the Documents;
and (f) the commission of broker. Buyer shall pay: (i) one-half (1/2) the
premium for the CLTA coverage under the Owner's Title Policy, the
difference between the cost of the CLTA coverage under the Owner's Title
Policy and the cost of the Owner's Title Policy as an ALTA (extended) title
policy, and the cost of all endorsements to the Owner's Title Policy; (ii)
the cost of the Survey not required to be paid by Seller; (iii) one-half
(1/2) of all charges for filing and recording the Documents; (iv) all
transfer fees and costs relating to the transfer of the Management
Agreement, the License Agreement, and the Operating Agreement; (v) all
transfer fees and costs relating to the transfer of the Ground Lease; and
(vi) all county and city documentary and other transfer taxes, and all
sales, use, and other taxes applicable to the transfer of the Property to
Buyer. Except as otherwise expressly herein provided, each party hereto
agrees to bear and pay for its own account the fees and disbursements of
its own counsel, accountants, appraisers, engineers, and other advisors in
connection with the negotiation and preparation of this Agreement and the
close of Escrow.
9.8 Insurance; Safekeeping. Buyer acknowledges that Seller will cause policies
of insurance maintained by Seller to be terminated with respect to the
Property as of the Closing Date. Buyer shall be responsible for obtaining
its own insurance as of the Closing Date and thereafter. Buyer further
acknowledges that from and after the Closing, Manager (and not Seller)
shall be liable for all loss, cost, liability, claim, damage, and expense
relating to the theft or loss of, or damage to, any items placed in safes
or safety deposit boxes or storage rooms of the Hotel, or otherwise
accepted by Manager's employees at the Hotel for safekeeping; provided,
however, that at or prior to the Closing, Buyer may request Seller to cause
Manager to send written notice to guests at the Hotel who are using any
safe or any safe deposit box, advising them of the anticipated sale of the
Hotel to Buyer, and requesting such guests' verification of the items they
have deposited in any safe and the contents of their safe deposit boxes
within twenty-four (24) hours after the receipt of said notice. In such
case, all such verifications shall be under the supervision of a
representative of each of Seller and Buyer and Manager. Should any guests
wish to continue the use of any safe or safe deposit boxes, arrangements
will be made for such continued use with Buyer's and Manager's
representatives. At such time as a guest verifies the contents of a safe or
safe deposit box and a new agreement for its continued use is entered into
34
under the supervision of Buyer and Manager, Seller shall be relieved of any
and all responsibility in connection with said safe or box. Boxes of guests
who do not respond to the written notice for verification within
twenty-four (24) hours after the giving of such notice shall be opened in
the presence of representatives of Buyer and Seller and Manager, and the
contents thereof recorded. Any such property so recorded and thereafter
remaining in the hands of Buyer or Manager shall be the responsibility of
Buyer and Manager. Seller's only responsibility shall be for any claims
pertaining to the property allegedly deposited in safes and safe deposit
boxes and not recovered or verified by guests or delivered to Buyer or
Manager in accordance with this provision. On the Closing Date,
representatives of Buyer and Seller and Manager shall also take an
inventory of all luggage and other items checked or left in the care of
Seller, Manager, or Manager's employees at the Hotel, and the contents of
all trunk and/or storage rooms; provided, however, that no such luggage or
other items or the contents of such rooms shall be opened. Buyer and
Manager shall be solely responsible from and after the Closing for all
luggage and other items listed in said inventory. The provisions of this
Section 9.8 shall surviving the Closing.
9.9 Close of Escrow. Provided that: (i) Escrow Holder has received the
documents and funds described in Sections 9.3, 9.4, 9.5, 9.6, and 9.7
hereof; (ii) Escrow Holder has not received prior written notice from
either party to the effect that an agreement of either party made hereunder
has not been performed or to the effect that any condition set forth herein
has not been satisfied or waived; (iii) Buyer has not terminated this
Agreement as permitted herein; (iv) Seller has not terminated this
Agreement as permitted herein; and (v) the Title Company has issued or is
unconditionally prepared and committed to issue to Buyer the Owner's Title
Policy, Escrow Holder is authorized and instructed at 8:00 a.m., Pacific
time, on the scheduled Closing Date to:
(a) retain for Escrow Holder's own account funds sufficient to reimburse
Escrow Holder for its out-of-pocket costs paid to unrelated third
parties, disburse to Title Company the fees and expenses incurred in
connection with the issuance of the Owner's Title Policy, and disburse
to any other persons or entities entitled thereto the amount of any
other closing costs, all in accordance with Buyer's and Seller's
settlement statements prepared by Escrow Holder and pre-approved by
the parties hereto in writing (the "Closing Statements");
(b) record or file in the appropriate office any documents or instruments
necessary to remove any exceptions to title which are not Permitted
Exceptions;
35
(c) request that the amount of any documentary transfer tax due be shown
on separate papers and be affixed to the Deed and the Assignment and
Assumption of Ground Lease by the County Recorder only after the
permanent record is made;
(d) cause the Deed and the Assignment and Assumption of Ground Lease to be
recorded in the County Recorder's Office of Los Angeles County,
California, and deliver two (2) conformed copies of each of such
recorded documents to each of Buyer and Seller;
(e) deliver the Purchase Price to Seller, as adjusted by Seller's share of
Prorations and costs of title, in the manner specified by Seller in
separate written instructions to Escrow Holder;
(f) deliver to Buyer two (2) fully executed originals or original
counterparts of each of the Assignment and Assumption of Ground Lease,
the Xxxx of Sale, the General Assignment and Assumption Agreement, the
Seller's Non-Foreign Affidavit, and the Employment Escrow Agreement;
and deliver to Seller two (2) fully executed original counterparts of
the Assignment and Assumption of Ground Lease, the General Assignment
and Assumption Agreement, and the Employment Escrow Agreement; and
deliver to City two (2) fully executed originals or original
counterparts of the Assignment and Assumption of Ground Lease;
(g) return any remaining funds to Buyer after all payments pursuant to the
terms of this Agreement: and
(h) cause the Title Company to issue the Owner's Title Policy to Buyer.
9.10 Notification; Closing Statements. If Escrow Holder cannot comply with the
instructions herein (or as may be provided later), Escrow Holder is not
authorized to cause the recording or delivery of any of the foregoing
documents or funds. If Escrow Holder is unable to timely cause such
recording and delivery, Escrow Holder shall notify the parties of such fact
without delay. If such inability continues for a period of two (2) business
days (unless either Seller or Buyer is then in default hereunder, in which
event the provisions of Section 9.2(b) shall apply), either Seller or Buyer
may, upon written notice to the other party and to Escrow Holder, demand
the return of its deposits (except the Deposit and any interest earned
thereon, which Escrow Holder shall retain), and Escrow Holder shall return
said deposits to the respective depositor; provided, however, that if such
inability shall continue for an additional period of six (6) business days
(unless either Seller or Buyer is then in default hereunder, in which event
the provisions of Section 9.2(b) shall apply), either Seller or Buyer may,
upon written notice to the other party and to Escrow Holder, demand the
36
return of its remaining deposits (including, without limitation, the
Deposit and all interest earned thereon), and Escrow Holder shall return
said deposits to the respective depositor, and this Agreement shall
terminate. Immediately after the Closing, Escrow Holder shall deliver to
Buyer and Seller, respectively, at their addresses listed in Section 14.1
hereof, a true, correct, and complete copy of the Seller's and Buyer's
Closing Statements, in the form customarily prepared by Escrow Holder, as
well as all other instruments and documents to be delivered to Buyer and
Seller.
9.11 Employment Escrow. On or before the Closing Date, Seller shall deposit into
an escrow with Escrow Agent (the "Employment Escrow"), pursuant to an
agreement reasonably satisfactory to Buyer, Seller, and Escrow Agent (the
"Employment Escrow Agreement"), the sum of $200,000.00. The Employment
Escrow and the funds contained therein shall be used as reasonably agreed
upon by Seller and Buyer but solely to resolve Employment Claims arising or
incurred (whether or not filed) prior to the Closing Date and for which
Manager is not liable. If any such Employment Claim becomes known to the
parties hereto prior to the date of the 90-day "true-up" referred to in
Section 9.6(r) above, Seller shall deposit such additional funds into the
Employment Escrow as Seller and Buyer reasonably agree are likely to
resolve such known claim. The Employment Escrow shall be maintained for one
(1) year after the Closing Date, after which time the funds therein shall
be released to Seller; provided, however, that if an Employment Claim
arising or incurred (whether or not filed) prior to the Closing Date and
for which Manager is not liable has become known to Buyer and Seller during
such one (1) year period, then the Employment Escrow shall be maintained
until the resolution of such claim, after which time any funds remaining
therein shall be released to Seller. Seller shall have no liability for
Employment Claims arising or incurred from and after the Closing Date, and
Seller shall have no liability for Employment Claims arising or incurred
(whether or not filed) prior to the Closing Date except as expressly
provided in this Section 9.11, and then only to the extent of the funds
available from time to time in the Employment Escrow.
ARTICLE X
REPRESENTATIONS, WARRANTIES, AND COVENANTS
------------------------------------------
10.1 Buyer's Representations and Warranties. Buyer represents and warrants to
Seller as follows:
(a) Buyer is a limited partnership, duly created, validly existing, and in
good standing under the laws of the State of Delaware with full right,
power, and authority to take title to the Property, and to enter into
and otherwise perform and comply with all the terms and conditions of
this Agreement.
37
(b) This Agreement and all documents executed by Buyer that are to be
delivered pursuant to this Agreement are, and at the time of Closing
will be, duly authorized, executed, and delivered by Buyer; and this
Agreement and all documents executed by Buyer that are to be delivered
to pursuant to this Agreement are, and at the Closing will be, legal,
valid, and binding obligations of Buyer, enforceable in accordance
with their terms (except as enforcement may be limited by bankruptcy,
insolvency or similar laws) and do not, and at the time of Closing
will not, violate any provisions of any agreement or judicial order to
which Buyer is a party or to which Buyer is subject.
(c) Except as may be expressly provided otherwise in this Agreement or in
the documents or instruments being executed and delivered in
connection with this Agreement, no representations of any kind
(whether oral or written, express or implied) have been made by the
Seller to Buyer, and Buyer hereby represents and warrants to Seller
that Buyer is investing in the Property solely in reliance on Buyer's
own investigations and evaluation thereof and the representations and
warranties of Seller set forth herein, and not in reliance on anything
else.
(d) All decisions as to which employees at the Hotel will be employed
after the Closing shall be solely that of Buyer and/or Buyer's manager
of the Hotel, and except in connection with and to the extent of a
breach by Seller of its representations and warranties in Section
10.2(g) below, Seller shall have no liability therefore or in
connection with any claims arising therefrom, including, without
limitation, under the Worker Adjustment and Retraining Notification
Act, or any similar laws, rules, or regulations.
10.2 Seller's Representations and Warranties. Seller represents and warrants to
Buyer as follows:
(a) Seller is a Delaware limited partnership duly created, validly
existing, and in good standing under the laws of the State of
Delaware, and qualified to do business in the State of California,
and, subject to the right of Seller's Limited Partners to vote to
disapprove the transactions contemplated by this Agreement in
accordance with a Partnership Vote Meeting, Seller has the full right,
power, and authority to own and convey the Property and to enter into
and otherwise perform and comply with all the terms and conditions of
this Agreement. This Agreement and the transactions contemplated
hereby do not violate the terms of Seller's Partnership Agreement,
and, subject to the right of Seller's Limited Partners to vote to
disapprove the transactions contemplated by this Agreement in
accordance with a Partnership Vote Meeting, the general partner of
Seller has the full right, power, and authority to bind Seller with
respect to this Agreement and the transactions contemplated hereby.
38
(b) Subject to the right of Seller's Limited Partners to vote to
disapprove the transactions contemplated by this Agreement in
accordance with a Partnership Vote Meeting, this Agreement and all
documents executed by Seller that are to be delivered pursuant to this
Agreement are, and at the time of Closing will be, duly authorized,
executed, and delivered by Seller, and this Agreement and all
documents executed by Seller that are to be delivered pursuant to this
Agreement are, and at the time of Closing will be, legal, valid, and
binding obligations of Seller, enforceable in accordance with their
terms (except as enforcement may be limited by bankruptcy, insolvency
or similar laws) and do not, and at the time of Closing will not,
violate any provisions of any agreement or judicial order to which
Seller is a party or to which Seller or the Property is subject.
Seller has provided notice to the Limited Partners of Seller's
intention to enter into a purchase and sale agreement to sell the
Property.
(c) To Seller's knowledge, no default on its part has occurred and is
continuing under the Ground Lease, the Subleases, the Contracts, or
the Permits.
(d) To Seller's knowledge, Seller has not received any written notices of
violations of any laws, ordinances, orders or requirements of any
governmental authority, agency, or officer having jurisdiction against
or affecting the Property, or with respect to the operation thereof
for its currently intended purpose, which have not previously been
complied with.
(e) To Seller's knowledge, there are no actions, investigations, suits, or
proceedings pending or threatened with respect to the Property, or the
ownership or operation thereof, or any part thereof (other than those
being administered by Manager or reasonably believed by Seller to be
covered by insurance), nor any judgments, orders, awards, or decrees
currently in effect against Seller with respect to the ownership or
operation of any part of the Property which have not been fully
discharged prior to the date hereof.
(f) To Seller's knowledge, there is no construction at the Real Property
that would give rise to a mechanic's lien.
(g) Seller does not have any employees at the Hotel. Seller has not made
and will not make any statements or promises to any employee at the
Hotel or to any labor organization representing any employee at the
Hotel regarding continued employment or future employment at the Hotel
with Buyer or Manager.
39
(h) Since December 31, 1996, there has been no sale, transfer or other
disposition by Seller of any part of the Property, except for
dispositions of property in the ordinary course of business, sales and
use of inventory in the ordinary course of business consistent with
past practice, and dispositions of property or assets that are not
necessary to the normal operation of the Hotel or are otherwise
immaterial in the aggregate.
(i) Seller owns the Personal Property located in the Hotel excluding any
and all personal property leased by Seller under the contracts
described on Schedule II attached to Exhibit D, the form of Xxxx of
Sale attached hereto, and excluding any and all personal property
owned or leased by Manager, Operator, Licensor, guests of the Hotel,
tenants under subleases at the Hotel, and suppliers, contractors, and
vendors serving the Hotel. To Seller's knowledge, the Personal
Property is not subject to any encumbrances, conditional sales
contracts, or other liens. The Personal Property transferred to Buyer
at the Closing (exclusive of Inventory and Accounts) shall be
reasonably equivalent to the Personal Property at the Hotel on the
Effective Date (also exclusive of Inventory and Accounts).
(j) To Seller's knowledge, there is no threatened condemnation,
expropriation, eminent domain or similar proceeding affecting all or
any part of the Hotel or the Real Property, and Seller has not
received any written notice of any of the same.
(k) Except as may be disclosed in the Commitment or the Survey, Seller has
not received any written notice of a violation of the applicable
zoning laws and ordinances affecting the Hotel and the Real Property.
(l) Seller has not undertaken to cause any protest, appeal or other
proceeding for the reduction of the real estate taxes or assessments
against the Hotel or the Real Property that has not already been
resolved, and Seller has not received any written notice from any
governmental authority for assessment or collection of any taxes other
than those contained in tax bills delivered to Buyer or described in
the Commitment.
(m) Seller has not received any written notice from any governmental
agency of violation of any law, statute, ordinance or regulation
pertaining to health, industrial hygiene, or the environment.
(n) To Seller's knowledge, there has been no material financial change in
Seller's "Total Partners' Capital" from that reported in its audited
balance sheet of December 31, 1996, included in Seller's Form 10K
filed with Securities and Exchange Commission for the year ended
December 31, 1996. For purposes of this Section 10.2(n), "material
financial change" shall mean a decrease of more than $5,000,000.00 in
Total Partners' Capital.
40
(o) As used herein, the term "Seller's knowledge" shall mean the actual
knowledge of Xxxxxxx X. Xxxxxx, president of the general partner of
Seller.
(p) As used herein, the term "Seller has not received" shall mean: (i)
Xxxxxxx X. Xxxxxx, the president of the general partner of Seller, has
not personally received such item, nor to Xxxxxxx X. Xxxxxx'x actual
knowledge has any other person received such item; and (ii)
Corporation Service Company--Prentice Hall, Seller's agent for service
of process, has provided a letter stating that it has not personally
received any such item.
(q) Seller owes no money to Operator.
10.3 Continuation and Survival of Representations and Warranties; Limitations on
Liability Therefor. All representations and warranties made by the
respective parties and contained in this Agreement are intended to and
shall remain true and correct as of the time of Closing, shall be deemed to
be material, and shall survive the execution and delivery of this
Agreement, the delivery of the Assignment and Assumption of Ground Lease
and the Deed, and transfer of title to the Property, for a period of six
(6) months, and shall not be deemed to have been waived at the Closing, or
merged into any of the documents of conveyance or transfer to be delivered
by Seller at the Closing; provided, however, no person, firm, or entity
shall have any liability or obligation with respect to any representation
or warranty herein contained unless on or prior to a date which is not
later than six (6) months following the Closing Date the party seeking to
assert liability under any such representation or warranty shall have
notified the other party hereto in writing setting forth specifically the
representation or warranty allegedly breached, and a description of the
alleged breach in reasonable detail. All liability or obligation of either
party hereto under any representation or warranty shall lapse and be of no
further force or effect with respect to any matters not contained in a
written notice delivered as contemplated above on or prior to six (6)
months following the Closing. Notwithstanding the foregoing, Buyer
acknowledges and agrees that: (a) Seller shall have no liability whatsoever
with respect to any representation or warranty (other than Seller's
representations and warranties made in Sections 10.2(a) and (b) above) as
to which Buyer has any actual knowledge prior to Closing that such
representation or warranty made by Seller pursuant to this Agreement or the
other Documents was incorrect, false, or misleading in any way, and (b)
neither party shall have any right to pursue remedies against the other for
an untrue representation or the breach of a warranty unless and until the
actual cumulative damages of the claiming party as a result of such
incorrectness, falsity, or breach are in excess of $100,000.00.
41
ARTICLE XI
POSSESSION
----------
Possession of the Property shall be delivered to Buyer immediately
following the Closing, subject only to the Permitted Exceptions.
ARTICLE XII
OPERATION OF THE PROPERTY
-------------------------
Regarding the operation, maintenance, and repair of the Property between
the Effective Date and the Closing Date (or earlier termination of this
Agreement): (a) Seller shall operate the Property in the ordinary course of
business, but Seller shall not be required to make any capital improvements to
the Property, except improvements or repairs that Seller reasonably determines
to be of an emergency nature; (b) Seller agrees that it will not, without the
prior written consent of Buyer (not to be unreasonably withheld or delayed),
enter into any sublease or contract with respect to any portion of the Property
which is not terminable upon thirty (30) calendar days notice without penalty;
(c) Seller shall not take any action, or suffer any action to be taken in its
name or on its behalf, the effect of which would cause any of the
representations or warranties of Seller herein contained to be untrue or
incorrect in any material respect on and as of the Closing Date, or which would
have the effect of causing Seller to be unable to satisfy or perform any of the
conditions precedent to the obligations of Buyer hereunder; provided, however,
that this provision shall not apply to any Partnership Vote Meeting or the
giving of notice to the parties to the Collective Bargaining Agreement of the
pending sale of the Property, or any matters arising from or in connection with
either; (d) Seller shall at all times (i) promptly deliver to Buyer copies of
any notices received by Seller from any person, firm, corporation, or
governmental agency alleging any default on the part of Seller under any
contract or agreement relating to the Property, or any part thereof, or any
violation of any applicable law or ordinance with respect thereto which, if the
facts alleged therein were true, would constitute a breach of any representation
or warranty of Seller herein contained or adversely affect the ability of Seller
to satisfy any condition precedent to the obligations of Buyer hereunder, and
(ii) promptly advise Buyer in writing of any change in Seller's representations
and warranties made in Section 10.2 above; (e) Seller will not consent to,
authorize, or approve any change in zoning or similar land use classification
for the Land or any part thereof, or any special assessments not heretofore
confirmed with respect to the Land; and (f) Seller will not knowingly or
deliberately permit any lien or encumbrance to attach to the Property, or any
part thereof, and shall cause all monetary liens or encumbrances that attach to
the Property between the date of the Commitment and the Closing Date to be
removed, and shall use its good faith commercially reasonable efforts to remove
(or insure against by means of a title endorsement reasonably satisfactory to
Buyer) all non-monetary liens or encumbrances that attach to the Property
42
between the date of the Commitment and the Closing Date. From and after the
Closing, Buyer agrees to cause Manager to continue in full force and effect
through June 30, 1999, the Collective Bargaining Agreement (a copy of which has
been provided to Buyer prior to the date hereof); provided, however, that
Buyer's obligation to do so shall not prohibit any renegotiation of the
Collective Bargaining Agreement if freely agreed to by the union thereunder, and
further provided that Buyer's obligation shall be subject to matters outside of
its or Manager's control including, but not limited to, a decertification of the
union by the employees at the Hotel. If prior to June 30, 1999, Manager ceases
to be the manager of the Hotel, Buyer shall endeavor in good faith to cause any
new manager(s) of the Hotel to continue in full force and effect through June
30, 1999, the Collective Bargaining Agreement. Buyer agrees that Seller shall
have no liability for the Collective Bargaining Agreement after the Closing
except as expressly set forth in this Article XII or in Section 9.11 above.
Buyer's obligations under this Article XII shall survive the Closing.
ARTICLE XIII
LOSS BY CASUALTY: CONDEMNATION
------------------------------
13.1 Damage or Destruction. Prior to the Closing Date, the entire risk of loss
or damage to the Property by earthquake, flood, landslide, fire, hurricane,
tornado, or other casualty shall be borne by Seller. If prior to the
Closing any part of the Property is damaged by earthquake, flood,
landslide, fire, hurricane, tornado or other casualty, Seller shall
promptly notify Buyer of such fact. In the event that the estimated cost to
repair any such damage exceeds, in the aggregate, $1,500,000.00, Buyer
shall have the right to terminate this Agreement upon written notice to
Seller within ten (10) business days of receipt of Seller's notice of the
damage, in which event this Agreement shall terminate. In the event that
Buyer elects not to timely terminate this Agreement as a result of any such
damage, or the estimated cost of repair (as reasonably determined by Buyer
and Seller) does not exceed, in the aggregate, $1,500,000.00, Seller shall,
at the Closing, assign and turn over, and Buyer shall be entitled to
receive and keep, all insurance proceeds payable to Seller with respect to
such damage, Buyer shall receive a credit against the Purchase Price in the
amount of any applicable insurance deductible, and the parties shall
proceed to Closing pursuant to the terms hereof without further
modification of the terms of this Agreement.
13.2 Condemnation. If prior to the Closing Date all or any portion of the
Property is taken by a condemnation or eminent domain (or is the subject of
a pending or contemplated taking which has not been consummated), Seller
shall promptly notify Buyer of such fact (the "Condemnation Notice"). If in
the reasonable opinion of Buyer the taking materially interferes or would
materially interfere with the economic operation or use of the Property as
it is operated on the Effective Date, then Buyer may elect to terminate
43
this Agreement by written notice to such effect given to Seller within ten
(10) business days after receipt by Buyer of the Condemnation Notice, in
which event this Agreement shall terminate. If, under such circumstances,
Buyer does not so elect to timely terminate this Agreement, then the
Closing shall take place as herein provided without any abatement of the
Purchase Price, and at the Closing Seller shall assign and turn over to the
Buyer, and Buyer shall be entitled to receive and keep, all of Seller's
right, title, and interest in and to any condemnation award which may be
payable to Seller on account of such condemnation. If, prior to the Closing
Date, one or more portions of the Real Property shall be taken (or are
threatened to be taken) by exercise of right of eminent domain in a manner
which does not, in the reasonable opinion of Buyer, materially interfere
with the economic operation or use of the Property, then neither party
shall have any right to terminate its obligations hereunder by reason
thereof, but at the Closing Seller shall turn over and assign to Buyer all
of Seller's right, title, and interest in and to any condemnation awards
which may be payable to Seller on account of such condemnation. For
purposes hereof, the term "taking" shall include any temporary as well as
permanent taking.
ARTICLE XIV
MISCELLANEOUS
-------------
14.1 Notices. Any communication, notice, or demand of any kind whatsoever that
either party may be required or may desire to give to or serve upon the
other shall be in writing, addressed to the parties at the addresses set
forth below, and delivered by personal service, by Federal Express or other
overnight delivery service, by facsimile transmission, or by registered or
certified mail, postage prepaid, return receipt requested:
If to Seller: Manhattan Beach Hotel Partners, L.P.
c/o Manhattan Beach Commercial Properties III Inc.
3 World Financial Center, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, President
Facsimile Number: (000) 000-0000
With a copy to: Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Rand S. April, Esq.
Facsimile Number: (000) 000-0000
44
If to Buyer: HMC/Interstate Manhattan Beach, L.P.
c/o Host Marriott Corporation
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
With copies to: Host Marriott Corporation
Law Department
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
Xxx, Castle & Xxxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
and Interstate Hotels
Xxxxxx Plaza Ten
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to: Interstate Hotels
Xxxxxx Plaza Ten
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
Any such notice shall be deemed delivered if sent as follows: (a) if personally
delivered, on the date of delivery to the address of the person to receive such
notice as evidenced by a signed receipt; (b) if sent by Federal Express or other
overnight courier service, on the date of delivery to the address of the person
to receive such notice as evidenced by a signed receipt; (c) if sent by
facsimile transmission, on the date transmitted to the person to receive such
notice if sent by 5:00 p.m., Eastern time, and on the next business day if sent
after 5:00 p.m., Eastern time; or (d) if mailed, on the date of delivery to the
address of the person to receive such notice as evidenced by a signed receipt.
45
Any notice sent by facsimile transmission must be confirmed by personally
delivering, sending by courier, or mailing a copy of the notice sent by
facsimile transmission. Any party may change its address for notice by written
notice given to the other at least ten (10) calendar days before the effective
date of such change in the manner provided in this Section 14.1.
14.2 Brokers and Finders.
(a) If and only if the sale contemplated herein actually closes (as
evidenced by the recordation of the Assignment and Assumption of
Ground Lease and the Deed), Seller has agreed to pay a brokerage
commission to Eastdil Broker Services, Inc., or its designee
("Broker") pursuant to a separate agreement with Broker. Seller shall
not pay any brokerage commission or finder's fee to any broker or
finder retained by Buyer, and Buyer shall be solely responsible for
any such commission or fee.
(b) In the event of any claim for broker's fees, finder's fees,
commissions, or other similar compensation in connection herewith: (i)
Buyer, if such claim is based upon any agreement alleged to have been
made by Buyer, shall indemnify Seller against, defend, and held Seller
harmless (using counsel reasonably satisfactory to Seller) from any
and all loss, cost, liability, claim, damage, and expense (including,
without limitation, attorneys', fees and costs) that Seller sustains
or incurs by reason of such claim; and (ii) Seller, if such claim is
based upon any agreement alleged to have been made by Seller
(including any agreement with Broker), shall indemnify Buyer against,
defend, and hold Buyer harmless (using counsel reasonably satisfactory
to Buyer) from any and all loss, cost, liability, claim, damage, and
expense (including, without limitation, attorneys' fees and costs)
that Buyer sustains or incurs by reason of such claim. The provisions
of this Section 14.2(b) shall survive the termination of this
Agreement or the Closing.
14.3 Assignment. Neither all nor any portion of Buyer's interest under this
Agreement may be sold, assigned, encumbered, conveyed, or otherwise
transferred, whether directly or indirectly, voluntarily or involuntarily,
or by operation of law or otherwise (including, without limitation, by a
transfer of interests in Buyer) (collectively, a "Transfer"), without the
prior written consent of Seller, which consent may be granted or denied in
Seller's sole and absolute discretion. Any attempted Transfer without
Seller's consent shall be null and void. Buyer's request for Seller's
consent to any Transfer shall set forth in writing the details of the
proposed Transfer, including, without limitation, the name, ownership, and
46
financial condition of the prospective transferee and the financial details
of the proposed Transfer. In addition, Buyer shall provide Seller with
copies of all Transfer documentation, certified by Buyer to be true,
correct, and complete, and with all other information which Seller may
reasonably request.
Notwithstanding the terms of the preceding paragraph of this Section 14.3,
Seller shall not withhold its consent to any Transfer by Buyer, provided
that each of the following conditions has been met, as reasonably
determined by Seller following its review of the Transfer and related
documentation submitted by Buyer:
(a) the prospective transferee shall assume in writing all the obligations
of Buyer under this Agreement and under the Documents;
(b) as a result of any Transfer, no less than one hundred percent (100%)
of the ownership interests in Buyer or the prospective transferee, as
the case may be, shall be owned and held (directly or indirectly) by
Host Marriott Corporation and/or Interstate Hotels Corporation; and
(c) such Transfer shall be consummated on or before the seventh (7th)
calendar day prior to the scheduled Closing Date.
No transfer, whether with or without Seller's consent, shall operate to
release Buyer or alter Buyer's primary liability to perform the obligations
of Buyer under this Agreement. Furthermore, Buyer hereby acknowledges and
agrees that notwithstanding anything to the contrary in this Agreement,
upon a Transfer (other than a Transfer recognized by the Title Company in
Schedule A, Paragraph 2(a) of the Commitment as one that will not
terminate the Commitment), issuance of the Owner's Title Policy shall no
longer be a condition precedent to Buyer's obligation to purchase the
Property, if after such a Transfer the Title Company refuses to honor the
Commitment or issue the Owner's Title Policy, and all loss, cost,
liability, claim, damage, and expense suffered by Buyer as a result thereof
shall remain solely that of Buyer (whether or not Seller consents to such
Transfer).
14.4 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs,
administrators and permitted successors and assigns.
14.5 Amendments. This Agreement may be amended or modified only by a written
instrument executed by both parties.
14.6 Interpretation. Words used in the singular shall include the plural, and
vice-versa, and any gender shall be deemed to include the other. The
captions and headings of the Articles and Sections of this Agreement are
for convenience of reference only, and shall not be deemed to define or
47
limit the provisions hereof. Further, each party hereby acknowledges that
such party and its counsel, after negotiation and consultation, have
reviewed and revised this Agreement. As such, the terms of this Agreement
shall be fairly construed and the rule of construction, to the effect that
any ambiguities herein should be resolved against the drafting party, shall
not be employed in the interpretation of this Agreement or any amendments,
modifications, or exhibits hereto or thereto.
14.7 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California, without
regard to its principles of conflicts of law.
14.8 Entire Agreement. This Agreement, including the exhibits attached hereto,
constitutes the entire agreement between Buyer and Seller pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
letters of intent (including, without limitation, that certain letter dated
March 20, 1996, signed by Seller, Host Marriott Corporation, and Interstate
Hotels Corporation, and amended from time to time), negotiations, and
discussions of the parties, whether oral or written, and there are no
warranties, representations, or other agreements, express or implied, made
to either party by the other party in connection with the subject matter
hereof except as specifically set forth herein or in the documents
delivered pursuant hereto or in connection herewith.
14.9 Attorneys' Fees and Costs. If either Buyer or Seller brings any suit or
other proceeding with respect to the subject matter or the enforcement of
this Agreement or any of the Documents, the prevailing party (as determined
by the court, agency, or other authority before which such suit or
proceeding is commenced), in addition to such other relief as may be
awarded, shall be entitled to recover reasonable attorneys' fees and costs,
and costs of investigation actually incurred. The foregoing includes, with
limitation, attorneys' fees and costs, and costs of investigation incurred
in appellate proceedings, costs incurred in establishing the right to
indemnification, or in any action or participation in, or in connection
with, any case or proceeding under Chapter 7, 11, or 13 of the Bankruptcy
Xxxx, 00 Xxxxxx Xxxxxx Code Section 101 et seq., or any successor statutes.
14.10Time of the Essence. Time is of the essence with respect to all matters
contemplated by this Agreement.
14.11Confidentiality. All information, surveys, reports, tests, and studies
relating to the Property obtained by Buyer before or after the Effective
Date, either by the observations and examinations of its agents and
representatives or by Seller's disclosure, shall remain confidential. Prior
to the Closing, Buyer and Seller agree that, to the extent reasonably
48
practical, they shall keep the contents of this Agreement confidential and
that no publicity or press release to the general public or otherwise with
respect to this transaction shall be made by either party without the prior
written consent of the other party, which consent may be denied in the sole
and absolute discretion of either party; provided, however, that Buyer and
Seller shall be entitled to make any disclosures that either determines, in
its reasonable discretion, are necessary or desirable to effect the City
Approval, to comply with requirements of the Securities and Exchange
Commission or any other governmental entity, or to be disclosed or made
available to the Limited Partners of Seller. Notwithstanding the foregoing,
nothing herein contained shall be deemed to limit or impair in any way
Seller's or Buyer's right or ability to disclose the details of the herein
contemplated transaction to their respective counsel, consultants, advisors
or accountants, provided that each such person is informed of the
confidentiality requirements hereof and agrees to abide by the same, or to
such persons as they deem necessary in order to enable either of them to
comply with any requirements of law or any court order. Moreover, nothing
herein contained shall limit or impair in any way Buyer's right or ability
to disclose the details of the herein contemplated transaction to persons
or entities who in good faith are considering providing debt or equity
financing to Buyer for purposes of this transaction, or to governmental
agencies in connection with the application by Buyer for any required
license or permit, or for transfer of any Permit from Seller and Buyer.
Finally, Seller acknowledges that Buyer will release an announcement
concerning its purchase of the Property at the Closing, and Buyer agrees
that in connection with any press release by Buyer, including, without
limitation, the press release by Buyer at the Closing, Buyer will provide
an advance copy to Seller for Seller's review and approval, such review and
approval to be completed within one (1) business day of receipt thereof.
Unless the press release names Seller or any of Seller's affiliates, or
contains a misstatement of fact, (in either of which cases Seller's
suggested revisions to the press release shall be made), Buyer need not
make Seller's suggested revisions to such press release. The
confidentiality provisions of this Section 14.11 shall survive the Closing.
14.12No Waiver. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the Waiver.
14.13Further Acts. Each party, at the request of the other, shall execute,
acknowledge (if appropriate), and deliver such additional documents, and do
such other additional acts, as may be reasonably required in order to
accomplish the intent and purposes of this Agreement.
14.14Exhibits. Exhibits A through G inclusive, are attached hereto and
incorporated herein by reference.
49
14.15Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to constitute an original, but all of which
when taken together shall constitute one and the same instrument, with the
same effect as if all of the parties to this Agreement had executed the
same counterpart.
14.16No Intent to Benefit Third Parties. Seller and Buyer do not intend by any
provision of this Agreement to confer any right, remedy, or benefit upon
any third party, and no third party shall be entitled to enforce, or
otherwise shall acquire any right, remedy, or benefit by reason of, any
provision of this Agreement.
14.17Performance Due on Day Other Than Business Day. If the time period for the
performance of any act called for under this Agreement expires on a
Saturday, Sunday, or any other day on which banking institutions in the
State of California are authorized or obligated by law or executive order
to close (a "Holiday"), the act in question may be performed on the next
succeeding day that is not a Saturday, Sunday, or Holiday.
14.18Expenses of Purchase and Sale. Except as otherwise provided in this
Agreement, Seller and Buyer shall each bear its own direct and indirect
expenses incurred in connection with the negotiation and preparation of
this Agreement and the consummation and performance of the transactions
contemplated hereby.
14.19Severability. Any provision or part of this Agreement which is invalid or
unenforceable in any situation in any jurisdiction shall, as to such
situation and such jurisdiction, be ineffective only to the extent of such
invalidity and shall not affect the enforceability of the remaining
provisions hereof or the validity or enforceability of any such provision
in any other situation or in any other jurisdiction, unless such invalidity
materially changes the transaction set forth herein, in which event the
Deposit shall be returned to Buyer and this Agreement shall terminate.
14.20No Recording. Buyer shall not record this Agreement or any notice thereof.
If such recording shall occur, Seller shall have, in addition to all other
remedies for breach provided by law, the right to terminate this Agreement
by written notice to Buyer.
14.21Quitclaim. In the event of the termination of this Agreement for any
reason, Buyer shall deliver to Seller a quitclaim deed and such other
written instruments as Seller may reasonably require, executed and
acknowledged in recordable form, transferring to Seller any and all rights
of Buyer in the Property or any part thereof or interest therein; provided,
however, that Seller shall prepare any such instruments and shall pay all
charges, taxes and fees associated with recording the same.
50
14.22Termination of Agreement.
(a) If this Agreement is terminated pursuant to Sections 7. l(a), 7.1(b)
7.1(c), 8.1(a), 8.1(b), 8.1(c), 13.1, 13.2, or 14.19 hereof, or by
reason of the failure of any material condition precedent to Seller's
or Buyer's obligations to occur (other than the failure of any
material condition precedent resulting from the material uncured
breach by Seller or Buyer of any of the provisions hereof, which are
addressed separately by Sections 14.22(b) and (c) below in accordance
with the terms of such sections), the Deposit (together with all
interest earned on such Deposit) shall be returned to Buyer and Escrow
Holder shall return all other cash, documents, instruments, and other
items theretofore deposited into Escrow to the depositor party,
without any further instruction to Escrow Holder from either Seller or
Buyer. Thereafter, this Agreement shall be null and void and of no
further force or effect and neither party shall have any further
rights or obligations hereunder, except as provided in Sections
5.2(c), 5.2(d), 14.2(b), and 14.11 hereof, and other than those rights
and obligations that, by their terms, survive the termination of this
Agreement. In the event of such termination, the costs of the Title
Company and Escrow Holder shall be borne equally by Buyer and Seller,
and each party shall bear its own costs (including attorneys' and
accountants' fees and costs) incurred hereunder.
(b) If this Agreement is terminated by Buyer as a result of the material
uncured breach by Seller (after notice, and after a reasonable
opportunity to cure such breach, which for purposes of this provision
shall constitute the commencement of such cure within fifteen (15)
calendar days, the diligent prosecution thereof, and the completion of
such cure within sixty (60) calendar days) of any of the provisions
hereof, the Deposit (together with all interest earned on such
Deposit) shall be delivered to Buyer by Escrow Holder and Escrow
Holder shall return all other cash, documents, instruments, and other
items theretofore deposited into Escrow to the depositor party,
without any further instruction to Escrow Holder from either Seller or
Buyer. Thereafter, this Agreement shall be null and void and of no
further force or effect and neither party shall have any further
rights or obligations hereunder, except as provided in Sections
5.2(c), 5.2(d), 14.2(b), 14.11 and 14.22(b) hereof, and other than
those rights and obligations that, by their terms, survive the
termination of this Agreement, and the costs of the Title Company and
Escrow Holder shall be borne by Seller. Nothing contained in this
Section 14.22(b) shall limit Buyer's ability to pursue any and all
remedies of Buyer at law or in equity (including specific performance)
or by statute or otherwise if Seller is in breach of this Agreement
beyond all notice and cure periods. The election of any one or more
remedies of Buyer shall not constitute a waiver of the right to pursue
other remedies.
51
(c) If this Agreement is terminated by Seller as a result of the material
uncured breach by Buyer (after notice, and after a reasonable
opportunity to cure such breach, which for purposes of this provision
shall constitute the commencement of such cure within fifteen (15)
calendar days, the diligent prosecution thereof, and the completion of
such cure within sixty (60) calendar days) of any of the provisions
hereof, the Deposit (together with all interest earned on such
Deposit) shall be delivered to Seller by Escrow Holder, without any
further instruction to Escrow Holder from either Seller or Buyer.
Thereafter, this Agreement shall be null and void and of no further
force or effect and neither party shall have any further rights or
obligations hereunder, except as provided in Sections 5.2(c), 5.2(d),
14.2(b) and 14.11 hereof, and other than those rights and obligations
that, by their terms, survive the termination of this Agreement, and
charges of the Title Company relating to searching title and issuing
the Commitment.
14.23Waiver of Known Defaults. Notwithstanding anything to the contrary
contained in this Agreement, if either party hereto has actual knowledge of
the default of the other party (a "Known Default"), but nonetheless elects
to consummate the transactions contemplated hereby and proceeds to Closing,
then the rights and remedies of the nondefaulting party shall be waived
with respect to any such Known Default upon the Closing and the defaulting
party shall have no liability with respect thereto; provided, however, that
if the non-defaulting party elects not to consummate the transactions
contemplated hereby and not to proceed to Closing, the non-defaulting party
shall retain all of its rights and remedies hereunder. This Section 14.23
shall not apply to any default of Seller hereunder resulting from Seller's
breach of the representations and warranties of Seller made in Sections
10.2 (a) and (b) above.
14.24Access to Records After Closing. Seller agrees to preserve at Seller's
business office until three (3) years after the Closing Date all records
pertaining to the operation of the Hotel in its hands which are not
transferred to Buyer. Similarly, Buyer agrees to preserve at the Hotel or
its business office all records pertaining to the operation of the Hotel
transferred by Seller until three (3) years after the Closing Date. Where
there is a legitimate purpose not injurious to the other party, or if there
is a tax audit, other governmental inquiry, or litigation or prospective
litigation to which Seller or Buyer is or may become a party making
necessary Seller's access to such records of Buyer or making necessary
Buyer's access to such records of Seller, each party, as the case may be,
will allow representatives of the other party access to such records during
regular business hours at such party's place of business for the sole
purpose of obtaining information for use as aforesaid.
52
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date above.
"Seller"
MANHATTAN BEACH HOTEL PARTNERS, L.P.,
a Delaware limited partnership
By: Manhattan Beach Commercial Properties III Inc.,
a Delaware corporation
Its: General Partner
By: /s/Xxxxxxx X. Xxxxxx
------------------------
Print Name: Xxxxxxx X. Xxxxxx
Print Title: President
"Buyer"
HMC/INTERSTATE MANHATTAN BEACH, L.P.,
a Delaware limited partnership
By: HMC Manhattan Beach, Inc.,
a Delaware corporation
Its: General Partner
By: /s/Xxxxx Xxxxxxx
--------------------
Print Name: Xxxxx Xxxxxxx
Print Title: Vice President
53
ACCEPTED AND AGREED TO
on this ___ day of July, 1997:
"Escrow Holder"
COMMONWEALTH TITLE INSURANCE COMPANY,
a California corporation
By: /s/Xxx X. Xxxxxx
--------------------
Print Name: Xxx X. Xxxxxx
Print Title: Escrow Manager
54
EXHIBIT A
LEGAL DESCRIPTION
-----------------
All that certain real property situated in the City of Manhattan Beach,
County of Los Angeles, State of California, described as follows:
PARCEL 1 (HOTEL SITE):
Parcel 1 of Parcel Map No. 15659, in the City of Manhattan Beach, County of
Los Angeles, State of California, as shown on a map filed in Book 172 Pages
17 through 18 inclusive of Parcel Maps, in the office of the County
Recorder of said County.
EXCEPT therefrom all oil, gas and other hydrocarbons, geothermal resources
as defined in Section 6903 of the California Public Resources Code and all
other minerals, whether similar to those herein specified or not within or
that may be produced from the property; provided, however that all rights
and interest in the surface of the property are hereby conveyed to grantee,
no right or interest of any kind therein, express or implied, being
excepted or reserved to grantor except as hereinafter expressly set forth.
ALSO EXCEPT therefrom the sole and exclusive right from time to time to
drill and maintain xxxxx or other works into or through the property below
a depth of five hundred (500) feet and to produce, inject, store and remove
from or through such xxxxx or works, oil, gas and other substances of
whatever nature, including the right to perform any and all operations
deemed to grantor necessary or convenient for the exercise of such rights
as reserved in deed recorded April 19, 1979 as Instrument No. 79424731,
Official Records.
PARCEL 2 (GOLF COURSE SITE):
Parcel 2 of Parcel Map No. 15659, in the City of Manhattan Beach, County of
Los Angeles, State of California, as shown on a map filed in Book 172 Pages
17 through 18 inclusive of Parcel Maps, in the office of the County
Recorder of Los Angeles County, California.
EXCEPT therefrom all oil, gas and other hydrocarbons, geothermal resources
as defined in Section 6903 of the California Public Resources Code and all
other minerals, whether similar to those herein specified or not within or
that may be produced from the property; provided, however, that all rights
and interest in the surface of the property are hereby conveyed to grantee,
no right or interest of any kind therein, express or implied, being
excepted or reserved to grantor except as hereinafter expressly set forth.
ALSO EXCEPT therefrom the sole and exclusive right from time to time to
drill and maintain xxxxx or other works into or through the property below
a depth of five hundred (500) feet and to produce. inject store and remove
from or through such xxxxx or works, oil, gas and other substances of
whatever nature, including the right to perform any and all operations
deemed to grantor necessary or convenient for the exercise of such rights
as reserved in deed recorded April 19, 1979 as Instrument No. 79-42431,
Official Records.
A-1
EXHIBIT B
FORM OF ASSIGNMENT AND ASSUMPTION OF GROUND LEASE
-------------------------------------------------
[See Following Pages]
B-1
Recording Requested by
and when recorded mail to:
[________________________
_________________________
_________________________]
________________________________________________________________________________
Space Above This Line For Recorder's Use
ASSIGNMENT AND ASSUMPTION OF GROUND LEASE
-----------------------------------------
This ASSIGNMENT AND ASSUMPTION OF GROUND LEASE (this "Assignment") is
entered into as of [__________________], 1997, by and between Manhattan Beach
Hotel Partners, L.P., a Delaware limited partnership, formerly known as Shearson
California Radisson Plaza Partners, L.P., a Delaware limited partnership
("Assignor") and HMC/Interstate Manhattan Beach, L.P., a Delaware limited
partnership ("Assignee").
RECITALS
--------
A. Assignor is the current tenant under that certain Ground Lease dated March
1, 1983, made by and between the City of Manhattan Beach, a municipal
corporation "Landlord"), and Manhattan Beach Hotel Properties, a California
general partnership ("MBHP"), as amended by Amendment No. 1 to Ground
Lease, dated August 25, 1983, by Amendment No. 2 to Ground Lease, dated
January 24, 1984, by Amendment No. 3 to Ground Lease, dated October 15,
1984, by Amendment No. 4 to Ground Lease, dated July 28, 1987, by Amendment
No. 5 to Ground Lease, dated October 9, 1987, by Amendment No. 6 to Ground
Lease dated November 3, 1987, by letter dated March 12, 1984, by letter
dated October 12, 1984, and by letter dated August 7,1987 (collectively,
the "Lease"), which Lease is disclosed by a Memorandum of Ground Lease
recorded on September 19, 1983, in the Official Records of Los Angeles
County, California (the "Official Records") as Instrument No. 00-0000000.
B. Assignor is the successor in interest to MBHP's interest in the Lease
pursuant to that certain Assignment of Ground Lease recorded on December 1,
1987, in the Official Records as Instrument Number 00-0000000.
C. The Lease relates to that certain land located in the City of Manhattan
Beach, County of Los Angeles, more particularly described on Exhibit A
attached hereto (the "Land").
D. Assignor and Assignee are parties to that certain Purchase and Sale
Agreement and Joint Escrow Instructions dated as of June 30, 1997, pursuant
to which Assignor has agreed to sell and Assignee has agreed to purchase
the tenant's interest in the Land under the Ground Lease (together with
certain other real and personal property) and Assignor has agreed to assign
and Assignee has agreed to assume the Lease.
B-2
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee agree as
follows:
(a) Assignor hereby assigns and transfers to Assignee all of the right,
title, and interest of Assignor in, to, and under the Lease.
(b) Assignee hereby accepts such assignment and transfer, and hereby
assumes as of and from and after the Closing Date (as hereinafter
defined) all of Assignor's obligations, duties, covenants, agreements,
and liabilities arising or accruing under the Lease on and from and
after the Closing Date.
(c) Assignor agrees to indemnify, defend, and hold Assignee harmless from
and against any and all losses, costs, liabilities, claims, damages,
and expenses (including reasonable attorneys' fees and costs), arising
or accruing before the Closing Date and arising out of or in
connection with a breach or default under the Lease.
(d) Assignee agrees to indemnify, defend, and hold Assignor harmless from
and against any and all losses, costs, liabilities, claims, damages,
and expenses (including reasonable attorneys' fees and costs), arising
or accruing on or after the Closing Date and arising out of or in
connection with a breach or default under the Lease.
(e) As used herein, the term "Closing Date" shall mean and refer to the
earlier of the date this Assignment is recorded in the Official
Records.
(f) In the event of any litigation between Assignor and Assignee arising
out of the obligations of Assignor or Assignee under this Assignment
or concerning the meaning or interpretation of any provision contained
herein, the losing party shall pay the prevailing party's costs and
expenses of such litigation, including, without limitation, reasonable
attorneys' fees and costs. The prevailing party shall be determined by
the court based upon an assessment of which party's major arguments or
positions taken in the proceedings could fairly be said to have
prevailed over the other party's major arguments or positions on major
disputed issues in the court's decision.
(g) This Assignment shall be binding on and inure to the benefit of the
parties hereto, their successors in interest, and assigns.
B-3
(h) This Assignment may be executed in as many counterparts as may be
deemed necessary and convenient, and by the different parties hereto
on separate counterparts, each of which, when so executed, shall be
deemed an original, but all of which such counterparts shall
constitute one and the same instrument.
(i) This Assignment and the legal relations of the parties hereto shall be
governed by and construed and enforced in accordance with the laws of
the State of California, without regard to its principles of conflicts
of law.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as
of the day and year first hereinabove written.
"ASSIGNOR"
MANHATTAN BEACH HOTEL PARTNERS, L.P.,
a Delaware limited partnership
By: Manhattan Beach Commercial Properties III Inc.,
a Delaware corporation
Its: General Partner
By: __________________________________
Print Name: Xxxxxxx X. Xxxxxx
Print Title: President
"ASSIGNEE"
HMC/INTERSTATE MANHATTAN BEACH, L.P.
a Delaware limited partnership
By: HMC Manhattan Beach, Inc.,
a Delaware corporation
Its: General Partner
By: ___________________________________
Print Name:
Print Title:
B-4
CONSENT
-------
The City of Manhattan Beach ("Landlord") hereby consents to the foregoing
Assignment.
Date: [___________], 1997 LANDLORD:
CITY OF MANHATTAN BEACH,
a municipal corporation
By: __________________________________
Name: ________________________________
Title: _______________________________
B-5
STATE OF _______________ )
: ss.
COUNTY OF ______________ )
On the ___ day of _________, 199_, before me,___________________________,
personally appeared __________________________________ [] personally known to me
or [] proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
__________________________________
(SEAL)
STATE OF _______________ )
: ss.
COUNTY OF ______________ )
On the ___ day of _________, 199_, before me,_____________________________,
personally appeared ______________________________[] personally known to me or
[] proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
__________________________________
(SEAL)
B-6
STATE OF _______________ )
: ss.
COUNTY OF ______________ )
On the ___ day of____________, 199_, before me, __________________________,
personally appeared _________________________________ [] personally known to me
or [] proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
__________________________________
(SEAL)
B-7
EXHIBIT A TO ASSIGNMENT AND ASSUMPTION OF GROUND LEASE
LEGAL DESCRIPTION
-----------------
All that certain real property situated in the City of Manhattan Beach,
County of Los Angeles, State of California, described as follows:
B-8
EXHIBIT C
FORM OF GRANT DEED
------------------
[See Following Pages]
C-1
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
[_________________________
__________________________
__________________________
__________________________]
________________________________________________________________________________
(Space Above Line For Recorder's Use Only)
GRANT DEED
----------
The undersigned Grantor declares that documentary transfer tax is not shown
pursuant to Section 11932 of the California Revenue and Taxation Code, as
amended.
FOR VALUE RECEIVED, MANHATTAN BEACH HOTEL PARTNERS, L.P., a Delaware
limited partnership, formerly known as Shearson California Radisson Plaza
Partners, L.P., a Delaware limited partnership, grants to HMC/INTERSTATE
MANHATTAN BEACH, L.P., a Delaware limited partnership ("Grantee"), all of its
right, title, and interest in and to the hotel, parking, and other buildings,
structures, improvements, fixtures, and appurtenances (collectively, the
"Improvements") located on the land situated in the City of Manhattan Beach,
County of Los Angeles, State of California, and more particularly described in
Exhibit A attached hereto and incorporated herein by reference (the "Land").
THE IMPROVEMENTS ARE CONVEYED TO GRANTEE SUBJECT TO: (a) all liens,
encumbrances, easements, covenants, conditions, restrictions, and other matters
of record, including, without limitation, that certain Ground Lease dated March
1, 1983, as amended by Amendment No. 1 to Ground Lease dated August 25, 1983,
Amendment No. 2 to Ground Lease dated January 24, 1984, Amendment No. 3 to
Ground Lease dated October 15, 1984, Amendment No. 4 to Ground Lease dated July
28, 1987, Amendment No.5 to Ground Lease dated October 9, 1987, Amendment No. 6
to Ground Lease dated November 3, 1987, and by letters dated March 12, 1984,
October 12, 1984, and August 7, 1987; (b) all matters that would be revealed or
disclosed in an accurate survey of the Improvements and the Land; (c) interests
of the parties listed on Schedule I attached hereto and incorporated herein by
reference that are in possession of the Improvements or the Land, and interests
of hotel guests therein, as hotel guests only; and (d) all liens not yet
delinquent for taxes for real property, and all non-delinquent general or
special assessments against the Improvements or the Land.
C-2
IN WITNESS WHEREOF, the undersigned has executed this Grant Deed as of
[__________], 1997.
"Seller"
MANHATTAN BEACH HOTEL PARTNERS, L.P.,
a Delaware limited partnership
By: Manhattan Beach Commercial Properties III Inc.,
a Delaware corporation
Its: General Partner
By: ___________________________
Print Name: ___________________
Print Title: __________________
C-3
STATE OF _______________ )
: ss.
COUNTY OF ______________ )
On the ___ day of __________, 199_, before me, ___________________________,
personally appeared _____________________________ [] personally known to me or
[] proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and Official seal.
_________________________________
(SEAL)
C-4
EXHIBIT A TO GRANT DEED
LEGAL DESCRIPTION
-----------------
All that certain real property situated in the City of Manhattan Beach,
County of Los Angeles, State of California, described as follows:
C-5
EXHIBIT D
FORM OF XXXX OF SALE
--------------------
[See Following Pages]
D-1
XXXX OF SALE
------------
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby
acknowledged, MANHATTAN BEACH HOTEL PARTNERS, L.P., a Delaware limited
partnership ("Seller"), does hereby sell and convey to HMC/INTERSTATE MANHATTAN
BEACH, L.P., a Delaware limited partnership ("Buyer"), good and marketable title
to all of Seller's right, title, and interest in and to the personal property,
inventory, furniture, fixtures, and equipment (collectively, the "Personal
Property") owned by Seller, located at, and used for the operation, maintenance,
or management of the "Hotel" (as hereafter defined), including, without
limitation, the personal property described on Schedule I attached hereto, but
expressly excluding, without limitation, any and all personal property leased by
Seller under the contracts described on Schedule II attached hereto, and any and
all personal property owned or leased by Manhattan Beach Management Company,
Interstate Hotels Corporation, Radisson Hotels International, Inc., Radisson
Golf Course Co., Inc., guests of the Hotel, tenants under subleases at the
Hotel, and suppliers, contractors, and vendors serving the Hotel. The "Hotel"
shall mean and refer to that certain hotel and golf course commonly known as the
"Radisson Plaza Hotel and Golf Course" located at 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx Xxxxx, Xxxxxxxxxx.
Seller represents and warrants to Buyer that Seller has good and marketable
title to the Personal Property, and that to the actual knowledge of Xxxxxxx X.
Xxxxxx, president of the general partner of Seller, the Personal Property is not
subject to any encumbrances, conditional sales contracts, or other liens. Seller
has not made and does not make any representations or warranties of any kind
whatsoever, oral or written, express or implied, with respect to the condition
any of the Personal Property or any such related matters (including, without
limitation, any representation or warranty of merchantability or fitness for a
particular purpose) and the Personal Property is sold to Buyer in its present
"AS IS, WHERE IS" condition.
By its acceptance of this Xxxx of Sale and the Personal Property, Buyer
hereby acknowledges receipt of the Personal Property and further acknowledges
that Buyer is receiving such Personal Property in its present "AS IS, WHERE IS"
condition without recourse or representation or warranty of any kind whatsoever
as to the condition thereof or any such related matters (including, without
limitation, any representation or warranty of merchantability or fitness for a
particular purpose).
This Xxxx of Sale shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, legal representatives, successors,
and assigns.
This Xxxx of Sale shall be governed by and construed and enforced in
accordance with the laws of the State of California, without regard to its
principles of conflicts of law.
D-2
IN WITNESS WHEREOF, Seller has executed this Xxxx of Sale as of
[__________________], 1997.
"Seller"
MANHATTAN BEACH HOTEL PARTNERS, L.P.,
a Delaware limited partnership
By: Manhattan Beach Commercial Properties III Inc.,
a Delaware corporation
Its: General Partner
By: ____________________________
Print Name: Xxxxxxx X. Xxxxxx
Print Title: President
D-3
SCHEDULE I TO XXXX OF SALE
DESCRIPTION OF CERTAIN PERSONAL PROPERTY
----------------------------------------
The following personal property to the extent located in and about the land
and improvements known as the Radisson Plaza Hotel and Golf Course, Manhattan
Beach, California, consisting of:
(i) furniture and furnishings (including furniture, carpeting, draperies,
lamps and other items for all guest rooms, offices, and public areas);
(ii) equipment (including office equipment, dining room wagons, material
handling equipment, cleaning and engineering equipment, vehicles and
all equipment required for the operation of kitchens, bars, laundries
and dry cleaning facilities);
(iii)uniforms, tools and utensils (including staff uniforms and dining
room, engineering and housekeeping tools and utensils);
(iv) china, glassware, linens, silverware and the like; and
(v) food and beverage inventory, merchandise, supplies, and other
inventory.
D-4
SCHEDULE II TO XXXX OF SALE
DESCRIPTION OF EXCLUDED PERSONAL PROPERTY
-----------------------------------------
All personal property leased by Seller under the following contracts:
Credits to Seller
Term Description for Deposits
--------------------------------------------------------------------------------
Equipment Leases:
Orix/United Bus Corp July 1997 Shuttle Vans (3)
Telerent Feb 2000 Guest room Televisions $1,887.93
Comdisco June 1997 Phone Equipment & switch
Xerox Sept. 2000 Copiers (3)
Service Contracts:
Intel Phone Maint.
Federal Signs Sign Maint.
Culligan Water Softener Agreement
Fideleo (Harmony) Front Office software support
Aquaserve Cooling Tower Service (No
Contract, service provided
Month)
Cal-Western Exterminators (Contract not
on file. Called for copy to
forward)
HSG Window Washing (No Contract,
annual service provided by
schedule)
Pagenet Pager Service
Decision One Back Office Hardware
Micros Restaurant POS Support
Minibar Systems Minibar Maint.
BC Drain Jet Kitchen Drains (No contract,
service provided Month to Month)
The Grease Co. Grease Trap Maintenance (No
Contract, service provided Month
to Month)
Xxxxxx Fire System Maint.
Xxxxxx Hood and Duct Exhaust cleaning
Department of Airports Hotel Listing $3,240.00
El Segundo Cleaners Uniform cleaning and guest
laundry services
Direct TV Public Viewing Agreement
Sea Water Visions Lobster Tank Service
Muzak Music Agreement
Enron Direct Gas Sales Agreement
Xxxxxx Enterprises Building & floors cleaning
contract
Mobil Relay Radio Repeater Agreement
On Command In-room Movie & Free-to-Guest TV
Edison Co. Interruptible service Agreement
Xxxxxx Armored Armored Car Service
Payment Solutions Check Guarantee Service $ 495.00
Comp-Tech (GEAC) Front Office system hardware
Maint.
Hobic Plus Xeta call accounting & 0+
calling agreement
Xxxxxx Xxxx Co. Sales Tax consulting agreement
CTR/ Kronos Time Clock Maint.
Aptech Back Office Software support
Elevator Advisors Elevator Maint.
Browns Green Thumb Landscaping (Contract not on file.
Called for copy to forward)
Pizza Hut Franchise Agreement
D-5
EXHIBIT E
FORM OF GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
---------------------------------------------------
[See Following Pages]
E-1
GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
-------------------------------------------
This GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment") is
made as of [ _], 1997, by MANHATTAN BEACH HOTEL PARTNERS, L.P., a Delaware
limited partnership ("Assignor"), in favor of HMC/INTERSTATE MANHATTAN BEACH,
L.P., a Delaware limited partnership ("Assignee"), with reference to the
following facts:
A. Assignor is the lessee of that certain land located at 0000 Xxxxxxxx Xxxxxx
in the City of Manhattan Beach, County of Los Angeles, State of California,
and more particularly described in Exhibit A attached hereto and
incorporated herein by reference, and the owner of certain buildings,
structures, and other improvements commonly known as the "Radisson Plaza
Hotel and Golf Course" (collectively, the "Real Property"). The Real
Property is being conveyed to Assignee pursuant to a certain Assignment and
Assumption of Ground Lease and a certain Grant Deed (the "Grant Deed")
executed by Assignor in favor of Assignee.
B. Assignor, as the owner of the Real Property, has or may have an interest in
the following items: (i) those certain subleases, licenses, and occupancy
agreements listed on Schedule I attached hereto and incorporated herein by
reference, and any security deposits obtained in connection therewith
(collectively, the "Subleases"); (ii) those certain agreements and
contracts listed on Schedule I, and any security deposits obtained in
connection therewith (collectively, the "Contracts"); (iii) those certain
licenses, franchises, and permits listed on Schedule I (collectively, the
"Permits"); (iv) those certain accounts receivable for the Real Property
outstanding as of the date the Grant Deed is recorded and listed on
Schedule I (the "Accounts"); and (v) those certain contract rights,
concessions, trademarks, service marks, trade names (including the names of
restaurants, lounges, and meeting rooms), logos, copyrights, indemnities,
and rights under guaranties or warranties relating to goods, merchandise,
or services at or relating to the Hotel listed on Schedule I (collectively,
the "Miscellaneous Property Assets" and, collectively with the Subleases,
the Contracts, and the Permits, the "Assigned Assets").
NOW, THEREFORE, in consideration of the foregoing facts:
1. Assignor hereby assigns, transfers, and conveys to Assignee all of
Assignor's right, title, and interest in and to the Assigned Assets.
This Assignment is made without recourse or representation or warranty
whatsoever. By executing this Assignment, Assignee acknowledges and
agrees that Assignee and Assignee's representatives have been afforded
the opportunity to make and have made such inspections of the Assigned
Assets assigned hereby and matters related thereto as they have deemed
E-2
necessary or desirable. Assignee acknowledges that Assignor has not
made and does not make any representations or warranties of any kind
whatsoever, oral or written, express or implied, with respect to any
of the Assigned Assets or any such related matters, except as and to
the extent set forth in that certain Purchase and Sale Agreement and
Joint Escrow Instructions, dated as of June 30, 1997, by and between
Assignee and Assignor.
2. Assignee hereby agrees to and accepts such assignment and, in
addition, expressly assumes and agrees to keep, perform, and fulfill
all of the terms, covenants, obligations, and conditions required to
be kept, performed, and fulfilled by Assignor under, or with respect
to, the Assigned Assets from and after the Closing Date (as hereafter
defined). Assignee further agrees to assume and timely pay all those
certain accounts payable outstanding as of the date the Grant Deed is
recorded and listed on Schedule I (the "Payables"). Assignee further
agrees to indemnify, defend, and hold Assignor harmless from and
against any and all loss, cost, liability, claim, damage, and expense
(including, without limitation, reasonable attorneys' fees and costs)
directly or indirectly related to any breach or default by Assignee in
connection with the Assigned Assets, the Payables, or Assignee's
obligations hereunder, accruing from and after the Closing Date.
Assignor agrees to indemnify, defend, and hold Assignee harmless from
and against any and all loss, cost, liability, claim, damage, and
expense (including, without limitation, reasonable attorneys' fees and
costs) directly or indirectly related to any breach or default by
Assignor in connection with the Assigned Assets prior to the Closing
Date. "Closing Date" shall mean and refer to the date the Grant Deed
is recorded.
3. The provisions of this Assignment shall be binding upon and inure to
the benefit of Assignor and Assignee, their successors in interest,
and assigns.
4. This Assignment may be executed in as many counterparts as may be
deemed necessary and convenient, and by the different parties hereto
on separate counterparts, each of which, when so executed, shall be
deemed an original, but all of which such counterparts shall
constitute one and the same instrument.
5. This Assignment and the legal relations of the parties hereto shall be
governed by and construed and enforced in accordance with the laws of
the State of California, without regard to its principles of conflicts
of law.
6. In the event of any litigation between Assignor and Assignee arising
out of the obligations of Assignor or Assignee under this Assignment
or concerning the meaning or interpretation of any provision contained
herein, the losing party shall pay the prevailing party's costs and
expenses of such litigation, including, without limitation, reasonable
attorneys' fees and costs. The prevailing party shall be determined by
the court based upon an assessment of which party's major arguments or
positions taken in the proceedings could fairly be said to have
prevailed over the other party's major arguments or positions on major
disputed issues in the court's decision.
E-3
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment and
Assumption of Subleases, Contracts, Permits, and Miscellaneous Property Assets
as of the date first set forth above.
"Assignor"
MANHATTAN BEACH HOTEL PARTNERS, L.P.,
a Delaware limited partnership
By: Manhattan Beach Commercial Properties III Inc.,
a Delaware corporation
Its: General Partner
By: ____________________________
Print Name: Xxxxxxx X. Xxxxxx
Print Title: President
"Assignee"
By: HMC/INTERSTATE MANHATTAN BEACH, L.P.,
a Delaware limited partnership
By: HMC Manhattan Beach, Inc.,
a Delaware corporation
Its: General Partner
By: ______________________________
Print Name: ______________________
Print Title: _____________________
E-4
CONSENT
-------
Interstate Hotels Corporation ("Manager") hereby consents to the foregoing
Assignment.
Date: [___________], 1997 MANAGER:
INTERSTATE HOTELS CORPORATION
By: __________________________
Name: ________________________
Title: _______________________
E-5
CONSENT
-------
Radisson Hotels International, Inc. ("Licensor") hereby consents to the
foregoing Assignment.
Date: [___________], 1997 LICENSOR:
RADISSON HOTELS INTERNATIONAL, INC.
By: _______________________________
Name: _____________________________
Title: ____________________________
E-6
Exhibit A to General Assignment and Assumption Agreement
Legal Description
All that certain real property situated in the City of Manhattan Beach,
County of Los Angeles, State of California. described as follows:
E-7
SCHEDULE I TO GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
---------------------------------------------------------
1. Subleases (and any related security deposits):
Subtenants Term Description
--------------------------------------------------------------------------------
Galamar Enterprises July 1998 Gift Shop
AVHQ May 1999 Audio/Visual services
Minuteman Parking Co. March 1999 Parking Services
Web Services Co. Mo. to Mo. Laundry Vending
Network Services Aug. 2000 Pay Phones
Security Deposits Advanced by Assignor
for Certain Relocated Employees of the Credits to Assignor
Manager Working at the Real Property for Security Deposit
--------------------------------------------------------------------------------
Xxxx Xxxxxx Rent Deposit $1,750.00
Xxxxx Xxxxxxxxx Rent Deposit 650.00
Xxxx Xxxxxx Rent Deposit 700.00
E-8
2. Contracts (and any related security deposits):
Credit to
Assignor for
Term Description Security Deposit
--------------------------------------------------------------------------------
Equipment Leases:
Orix/United Bus Corp. July 1997 Shuttle Vans (3)
Telerent Feb. 2000 Guest Room Televisions $ 1,887.93
Comdisco June 1997 Phone Equipment and Switch
Xerox Sept. 2000 Copiers (3)
Service Contracts:
Intel Phone Maintenance
Federal Signs Sign Maintenance
Culligan Water Softener Agreement
Fideleo (Harmony) Fideleo Front Office
Software Support
Aquaserve Cooling Tower Service
(No Contract, service
provided Month)
Cal-Western Exterminators (Contract not
on file. Called for copy
to forward)
HSG Window Washing (No Contract,
annual service provided
by schedule)
Pagenet Pager Service
Decision One Back Office Hardware
Micros Restaurant POS Support
Minibar Systems Minibar Maintenance
BC Drain Jet Kitchen Drains
(No contract, service
provided Month to Month)
The Grease Co. Grease Trap Maint. (No
Contract, service provided
Month to Month)
Xxxxxx Fire System Maintenance
Xxxxxx Hood and Duct Exhaust Cleaning
Department of Airports Hotel Listing 3,240.00
El Segundo Cleaners Uniform Cleaning and Guest
Laundry Services
Direct TV Public Viewing Agreement
Sea Water Visions Lobster Tank Service
Muzak Music Agreement
Enron Direct Gas Sales Agreement
Xxxxxx Enterprises Building and Floors Cleaning
Mobil Relay Radio Repeater Agreement
On Command In-room Movie and Free-to-Guest TV
Edison Co. Interruptible Service Agreement
Xxxxxx Armored Armored Car Service
Payment Solutions Check Guarantee Service 495.00
Comp-Tech (GEAC) Front Office System Hardware
Maintenance
Hobic Plus Xeta Call Accounting & 0+ Calling
Agreement
Xxxxxx Xxxx Co. Sales Tax Consulting Agreement
CTR/Kronos Time Clock Maintenance
Aptech Back Office Software Support
Elevator Advisors Elevator Maintenance
Browns Green Thumb Landscaping (Contract not on file.
Called for copy to forward)
Pizza Hut Franchise Agreement
E-9
Other Agreements:
Management Agreement dated January 3, 1992, as amended by Amendment to
Management Agreement dated as of April 21, 1994, and Second Amendment to
Management Agreement dated as of March 20, 1997, between the manager named
therein and Assignor.
Operating Agreement (Radisson Plaza Golf Course) dated December 10, 1986,
between the operator named therein and Manhattan Beach Hotel Properties, a
California limited partnership, Assignor's predecessor-in-interest.
License Agreement dated as of November 27, 1984, as amended and supplemented by
Amendment to License Agreement dated as of October 2, 1989, Agreement Regarding
Radisson License dated as of November 14, 1989, Agreement Amending and Restating
Radisson License Agreement dated as of June 14, 1991, Amended and Restated
License Agreement dated as of June 14, 1991, Amendment to License Agreement
dated as of June 14, 1991, and First Amendment to Amended and Restated License
Agreement for Radisson Plaza Hotel and Golf Course (Manhattan Beach, California)
dated September 20, 1993, all between Radisson Hotels International, Inc., or
its predecessor in interest and Assignor or Assignor's predecessor in interest.
[This agreement will not be assigned and assumed if cancelled prior to closing.]
E-10
3. Permits
Name of Permit Type of Permit Permit In Name Of
--------------------------------------------------------------------------------
County of Los Angeles #3670 Operating Permit Shearson California
Public Health Restaurant (401+ Seats) Radisson Plaza
Operating Permit Partners, L.P.
County of Los Angeles #3620 Operating Permit Shearson California
Public Health Restaurant (31-60 Seats) Radisson Plaza
Operating Permit Partners, L.P.
City of Manhattan Beach Fire Department Shearson California
High Rise Structure Permit Radisson Plaza
Partners, L.P.
City of Manhattan Beach Fire Department Manhattan Beach
Hazardous Materials Permit Hotel Partners, L.P.
Southern California
Air Quality Permit
Name of License Type of License License In Name Of
--------------------------------------------------------------------------------
State of California Alcoholic Beverage License Interstate Hotels
00-000000-0 1935-01 On-Sale General Corporation
Alcoholic Xxx. Control Eating Xxxxx
Xxx. # 0000000000
Xxxxx xx Xxxxxxxxxx Alcoholic Beverage License Interstate Hotels
47-256216 1935-01 On-Sale General Corporation
Alcoholic Xxx. Control Eating Xxxxx
Xxx. # 0000000000
Xxxx xx Xxxxxxxxx Xxxxx Business License - Living Xxxxxxxx Xxxxxxxxxx
#000 Areas Radisson Plaza
Business Certificate Partners, L.P.
City of Manhattan Beach Business License - Service Shearson California
#000 Xxxxxxxx Xxxxx
Business Certificate Partners, L.P.
County of Los Angeles Public Health License Xxxxxxxx Xxxxxxxxxx
#0000 Hotel/Pool (51+ rooms) Radisson Plaza
Public Health License Partners, L.P.
E-11
4. Accounts:
[Forthcoming at Closing as Seller and Buyer shall reasonably agree]
E-12
5. Miscellaneous Property Assets:
[Forthcoming at Closing as Seller and Buyer shall reasonably agree]
E-13
6. Payables:
[Forthcoming at Closing as Seller and Buyer shall reasonably agree]
E-14
EXHIBIT F
FORM OF NON-FOREIGN AFFIDAVIT
-----------------------------
[See Following Page]
X-0
XXX-XXXXXXX XXXXXXXXX XX
XXXXXXXXX XXXXX HOTEL PARTNERS, L.P.
A DELAWARE LIMITED PARTNERSHIP
------------------------------
Section 1445 of the Internal Revenue Code of 1986, as amended (the "IRC"),
provides that a transferee of a U.S. real property interest must withhold tax if
the transferor is a foreign person. In addition, Section 18805 of the California
Revenue and Taxation Code, as amended (the "R&T Code"), provides that a
transferee of a California real property interest must withhold tax if the
transferor's last known street address is outside the boundaries of the State of
California. To inform the transferee that withholding of tax is not required
upon the disposition of a U.S. and California real property interest by
MANHATTAN BEACH HOTEL PARTNERS, L.P., a Delaware limited partnership
("Transferor"), the undersigned Transferor hereby certifies as follows:
1. Transferor is not a foreign person, foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined
in the IRC and the regulations promulgated thereunder);
2. Transferor's U.S. taxpayer I.D. number is _____________; and
3. Transferor's office address is _______________________________________.
Transferor understands that this certification may be disclosed to the
Internal Revenue Service and/or the California Franchise Tax Board and that any
false statement contained herein could be punished by fine, imprisonment, or
both.
Under penalties of perjury, Transferor declares that it has examined the
foregoing certification and it is true, correct, and complete.
"Transferor"
MANHATTAN BEACH HOTEL PARTNERS, L.P.,
a Delaware limited partnership
By: Manhattan Beach Commercial Properties III Inc.,
a Delaware corporation
Its: General Partner
By: ____________________________
Print Name: Xxxxxxx X. Xxxxxx
Print Title: President
F-2
EXHIBIT G
FORM OF NOTICES TO SUBTENANTS, EQUIPMENT LESSORS, AND VENDORS
-------------------------------------------------------------
[See Following Pages]
G-1
NOTICE TO SUBTENANT
UNDER SUBLEASE OR OCCUPANCY AGREEMENT
-------------------------------------
_____________, 1997
[Subtenant]
Radisson Plaza Hotel and Golf Course
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx Xxxxx, XX 00000
Dear [Subtenant]:
We are pleased to announce that the Radisson Plaza Hotel and Golf Course
was sold today by Manhattan Beach Hotel Partners, L.P., a Delaware limited
partnership, to HMC/Interstate Manhattan Beach, L.P., a Delaware limited
partnership. Interstate Hotels Corporation will continue to manage the property.
The new owner has assumed the prior owner's rights and obligations as
landlord under your sublease or occupancy agreement. This means that the new
owner holds the $___________ security deposit you made and has assumed
responsibility to you for the return of the deposit pursuant to your sublease or
occupancy agreement and the laws of the State of California, and that all rental
or other payments should be made payable to HMC/Interstate Manhattan Beach, L.P.
All notices and communications from you to the new owner are to be directed to
Interstate Hotels Corporation at [address].
Sincerely,
Seller:
MANHATTAN BEACH HOTEL PARTNERS, L.P.,
a Delaware limited partnership
By: Manhattan Beach Commercial Properties III Inc.,
a Delaware corporation
Its: General Partner
By: _____________________________
Print Name: Xxxxxxx X. Xxxxxx
Print Title: President
G-2
Buyer:
HMC/INTERSTATE MANHATTAN BEACH, L.P.,
a Delaware limited partnership
By: HMC Manhattan Beach, Inc.,
a Delaware corporation
Its: General Partner
By: ___________________________
Print Name: ___________________
Print Title: __________________
G-3
NOTICE TO EQUIPMENT LESSOR
UNDER EQUIPMENT LEASE
---------------------
______________, 1997
_______________________
_______________________
_______________________
Dear [Equipment Lessor]:
We are pleased to announce that the Radisson Plaza Hotel and Golf Course
was sold today by Manhattan Beach Hotel Partners, L.P., a Delaware limited
partnership, to HMC/Interstate Manhattan Beach, L.P., a Delaware limited
partnership. Interstate Hotels Corporation will continue to manage the property.
The new owner has assumed the prior owner's rights and obligations under
your equipment lease. All notices and communications from you to the new owner
should continue to be directed to Interstate Hotels Corporation at [address].
Sincerely,
Seller:
MANHATTAN BEACH HOTEL PARTNERS, L.P.,
a Delaware limited partnership
By: Manhattan Beach Commercial Properties III Inc.,
a Delaware corporation
Its: General Partner
By: _____________________________
Print Name: Xxxxxxx X. Xxxxxx
Print Title: President
G-4
Buyer:
HMC/INTERSTATE MANHATTAN BEACH, L.P.,
a Delaware limited partnership
By: HMC Manhattan Beach, Inc.,
a Delaware corporation
Its: General Partner
By: ___________________________
Print Name: ___________________
Print Title: __________________
G-5
NOTICE TO VENDOR
UNDER SERVICE CONTRACT
----------------------
____________, 1997
____________________
____________________
____________________
Dear [Vendor]:
We are pleased to announce that the Radisson Plaza Hotel and Golf Course
was sold today by Manhattan Beach Hotel Partners, L.P., a Delaware limited
partnership, to HMC/Interstate Manhattan Beach, L.P., a Delaware limited
partnership. Interstate Hotels Corporation will continue to manage the property.
The new owner has assumed the prior owner's rights and obligations under
your service contract. All notices and communications from you to the new owner
should continue to be directed to Interstate Hotels Corporation at [address].
Sincerely,
Seller:
MANHATTAN BEACH HOTEL PARTNERS, L.P.,
a Delaware limited partnership
By: Manhattan Beach Commercial Properties III Inc.,
a Delaware corporation
Its: General Partner
By: _____________________________
Print Name: Xxxxxxx X. Xxxxxx
Print Title: President
G-6
Buyer:
HMC/INTERSTATE MANHATTAN BEACH, L.P.,
a Delaware limited partnership
By: HMC Manhattan Beach, Inc.,
a Delaware corporation
Its: General Partner
By: ____________________________
Print Name: ____________________
Print Title: ___________________
G-7
