EXHIBIT 2.8
PURCHASE AND SALE AGREEMENT
By and Between
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, III & ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
("Seller")
and
AMERICAN GENERAL HOSPITALITY OPERATING PARTNERSHIP, L.P.
("Buyer")
PURCHASE AND SALE AGREEMENT
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THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made and entered into as of
the _______ day of November, 1996 (the "Effective Date") by and between
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, III and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ (collectively,
"Seller"), and American General Hospitality Operating Partnership, L.P.
("Buyer").
R E C I T A L S
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This Agreement is made with respect to the following facts and circumstances:
A. Seller owns certain real property commonly known as the Holiday Inn
Resort, with the street address of ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, which real property, together with certain personal property is
collectively referred to in this Agreement as the "Property" and is more
particularly defined below.
B. Subject to the terms and conditions herein, Seller desires to sell and
Buyer desires to purchase the Property and certain other assets related to the
Property.
NOW THEREFORE, in consideration of the mutual covenants contained herein,
Seller and Buyer agree as follows:
1. PURCHASE AND SALE.
1.1 Property. Subject to the terms and conditions hereof, Seller
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hereby agrees to sell, convey and assign to Buyer, and Buyer hereby agrees to
purchase and accept from Seller on the Closing Date (as defined below) the
following (collectively, the "Property"):
1.1.1 The real property which is legally described on Exhibit
1.1.1 attached hereto, together with any and all rights, privileges, easements,
appurtenances, advantages, streets, alleys, strips, gores, mineral rights and
water rights appurtenant thereto, which are owned by Seller (the "Land");
1.1.2 All buildings and other improvements and fixtures of every
kind and description located in, on, over or under the Land including without
limitation those certain buildings consisting of approximately 204 hotel rooms
and suites, any apparatus, equipment and appliances incorporated therein and
used in connection with the operation and occupancy thereof, such as heating and
air conditioning systems, facilities used to provide any utility service,
ventilation, or other services thereto, parking lots or structures, landscaping
and roadways (all of which are collectively referred to as the "Improvements").
The Land and Improvements are collectively referred to as the "Real Property";
1.1.3 All tangible personal property of any type owned by Seller
and relating to the ownership, leasing, advertising, use, maintenance or
operation of the Real Property and located at the Real Property (collectively,
"Personal Property");
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1.1.4 To the extent assignable the interest of Seller in (i) the
leases, licenses, occupancy agreements, airline agreements, corporate accounts
agreements, advance booking agreements, convention reservation agreements and
other agreements demising space in, providing for the use or occupancy of, or
otherwise similarly affecting or relating to the use or occupancy of the
Improvements or Land, together with all amendments, modifications, renewals and
extensions thereof, and all guaranties by third parties of the obligations of
the tenants, licensees, concessionaires or other entities thereunder, all as
identified in Exhibit 1.1.4 attached hereto, which are in effect on the Closing
Date (the "Leases"); (ii) any commission agreements, advertising contracts,
service contracts and equipment leases to be assumed by Buyer as described on
Exhibit 1.1.4 attached hereto; (iii) all current licenses (exclusive of the
Commitment Agreement, as defined below), permits, certificates of occupancy,
approvals and entitlements issued or granted in connection with the Real
Property and the businesses operated thereon as well as any and all development
rights and any other intangible rights, interests or privileges relating to or
used in connection with the Real Property; (iv) subject to the provisions of a
standard Holiday Inn License Agreement to be obtained by Buyer, the right to use
the current names of the Property, logos, trademarks, tradenames and symbols and
promotional materials; and (v) all transferrable warranties, guarantees or
sureties relating to the Real Property or the Personal Property, all of which
shall be assigned by Seller to Buyer pursuant to the form described in Section
8.1.3 below ("Assignment"). The Leases, commission agreements, advertising
contracts, service contracts and equipment leases to be assigned by Seller and
assumed by Buyer are limited to those specifically described on Exhibit 1.1.4
attached hereto;
1.1.5 To the extent assignable, all of Seller's interest in
prepaid rents and deposits existing as of the Closing, including, but not
limited to, utility deposits, refundable security deposits and rental deposits,
and all other deposits for advance reservations, banquets or future services,
made in connection with the use or occupancy of the Improvements and in
connection with all such deposits including deposits for advance reservations,
banquets and future services, Buyer shall be solely responsible following the
Closing for performance of such future services and other obligations with
respect to such deposits;
1.1.6 To the extent assignable, all of Seller's interest in all
current books and records, promotional material, telephone numbers, tenant data,
marketing and leasing material and forms, market studies, keys, and other
materials of any kind owned by Seller and in Seller's possession or control, or
to which Seller has access or may obtain (without cost to Seller) and has the
right to convey and deliver which are used in Seller's ownership or use of the
Land, the Improvements or the Personal Property, whether any of the foregoing
are in hard copy form or in computerized data storage form; provided, however,
that a copy of any such material which constitutes a part of Seller's continuing
business or financial records may be retained by Seller;
1.1.7 To the extent assignable, all of Seller's interest in
plans, drawings, specifications, surveys, soil reports, engineering reports,
inspection reports, environmental audits and other technical descriptions and
reports to the extent in Seller's possession or control provided, however, that
Buyer agrees that Seller has no responsibility for the content or accuracy of
any reports or other documents prepared by third parties; an d
1.1.8 To the extent assignable, all of Seller's interest in the
right to receive immediately on and after Closing and continuously consume
thereafter water service, sanitary and storm sewer service, electrical service,
gas service, and telephone service on and for the Land and Improvements free and
clear of all qualifications and encumbrances other than the obligation to pay
the applicable utility company
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published rate for utility consumption after Closing, and the foregoing right
shall include, but not be limited to (i) the right to the present and future use
of wastewater, drainage, water and other utility facilities to the extent such
use benefits the Land or Improvements, (ii) all reservations of or commitments
covering any such use in the future, and (iii) all wastewater capacity
reservations, if any, ever issued and relating to the Land or Improvements.
1.2 Excluded Matters. Buyer shall not acquire any rights to non-
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transferrable computer software or to any leased equipment at the Property that
is not described on Exhibit 1.1.4. Seller shall have no obligation to sell,
convey or transfer to Buyer and Buyer shall have no right to purchase the city
ledger receivables, credit card receivables or any other receivables or any
operating cash banks existing in connection with the Property as the Closing
Date. Further, Buyer shall not acquire any rights in connection with or incur
any obligations with respect to Seller's accounts payable or any other debts in
connection with the Property existing as of the Closing Date.
2. PURCHASE PRICE.
Buyer shall pay as the total purchase price for the Property and the
Property's liquor license (the "Purchase Price") the sum of (i) Fifteen Million
Five Hundred Fifty-Five Thousand Dollars ($15,555,000); and (ii) an amount equal
to Seller's substantiated cost for all useable inventories at the Property of
food and nonalcoholic beverages, all unopened bottles of alcoholic beverages,
all inventories of operating and promotional supplies, and at Buyer's option if
Buyer chooses to purchase such items, all opened bottles of alcoholic beverages.
The Purchase Price shall be paid as follows:
2.1 Initial Deposit. No later than one (1) business day following
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the Effective Date, Buyer shall cause One Hundred Fifty Thousand Dollars
($150,000.00) (the "Initial Deposit") to be delivered into Escrow (as defined
below).
2.2 Additional Deposit. No later than one (1) business day following
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the Due Diligence Date (as defined below) and provided Buyer has waived or
approved the due diligence condition set forth in Section 7.2.5, Buyer will
cause an additional Three Hundred Thousand Dollars ($300,000.00) (the
"Additional Deposit") to be delivered into Escrow.
2.3 Interest on Deposit. The Initial Deposit and the Additional
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Deposit shall be held by the Title Company (as defined below) as an ▇▇▇▇▇▇▇
money deposit towards the Purchase Price. The Initial Deposit and thereafter
the Additional Deposit, if made, shall be held in Escrow in a federally insured
interest bearing account or other investment suitable for daily investment. The
Initial Deposit shall sometimes be referred to as the "Deposit" until the
Additional Deposit is delivered into Escrow, at which time the term "Deposit"
shall refer to the sum of the Initial Deposit and the Additional Deposit.
2.4 Disposition of Deposit. At the Closing (as defined below) the
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Deposit shall be applied and credited toward the payment of the Purchase Price.
If Escrow does not close, and the Agreement is terminated in a manner governed
by Sections 7.3 or 13, the Deposit will be disbursed as provided in such
Sections. If the Escrow does not close and neither Section 7.3 nor Section 13
applies, the Deposit together with interest accrued thereon shall be promptly
returned to Buyer unless the provisions of Section 17 are applicable, in which
case the disposition of the Deposit together with interest accrued thereon shall
be governed by the provisions of Section 17. Notwithstanding any provision to
the contrary contained in this Agreement, Buyer shall not be eligible for return
of its Deposit unless it has first delivered to Seller all copies
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of all Due Diligence Materials (as defined hereafter) exclusive of any materials
which have been generated by Buyer and which are of a proprietary or
confidential nature, together with Buyer's written confirmation that all such
Due Diligence Materials have been delivered to Seller.
2.5 Cash Balance. On or before the Closing Date, Buyer shall deliver
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into Escrow in immediately available funds the balance of the Purchase Price.
3. TITLE.
3.1 Vesting of Title. At Closing, Seller shall convey fee title to
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the Real Property to Buyer by deed (as further described in Section 8.1.1
below), subject to the Permitted Exceptions (as defined below), and shall convey
Seller's interest in the remainder of the Property and the Liquor License to
Buyer by ▇▇▇▇ of sale and assignment (as further described in Sections 8.1.2 and
8.1.3 below).
3.2 Buyer's Title Insurance. At Closing, the Title Company shall
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issue to Buyer an ALTA extended coverage owner's form of title insurance policy
in the amount Fifteen Million Four Hundred Ninety Thousand Dollars ($15,490,000)
insuring that fee simple title to the Real Property is vested in Buyer subject
only to the Permitted Exceptions ("Buyer's Title Policy"). Buyer shall be
entitled to request that the Title Company provide, at Buyer's cost and expense,
such additional endorsements to the Buyer's Title Policy as Buyer may reasonably
require, provided that such endorsements shall be at no cost or additional
liability to Seller and the Closing shall not be delayed as a result of Buyer's
request.
4. ESCROW.
4.1 Opening of Escrow. Seller shall deliver a fully executed
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counterpart of this Agreement into escrow ("Escrow") to be established at First
American Title Insurance Co., ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; Attention:
▇▇▇▇ ▇▇▇▇▇▇▇ [telephone: 408/▇▇▇-▇▇▇▇] ("Title Company") within one (1)
business day following the Effective Date. The Buyer shall cause the Initial
Deposit to be delivered into Escrow as provided in Section 2.1. In the event
that California law requires that conveyance of the liquor license be processed
through a separate escrow, then Buyer and Seller shall mutually agree on the
selection of the separate escrow holder and Sixty-Five Thousand Dollars
($65,000) of the total Purchase Price shall be allocated to and paid through the
separate escrow.
4.2 Instructions to Title Company. Seller and Buyer shall each be
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entitled to submit escrow instructions to the Title Company in connection with
the Closing of the Escrow. Seller and Buyer shall in addition execute such
further escrow instructions as the Title Company may reasonably require in
connection with the Closing. In the event of any conflict between the terms and
conditions of this Agreement and the provisions of any escrow instructions
prepared by Seller, Buyer or the Title Company, the terms and conditions of this
Agreement shall control.
5. CLOSING.
5.1 Closing. Subject to the provisions of Section 16.9, the purchase
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and sale of the Property as contemplated by this Agreement, including but not
limited to the recordation of the Deed (as defined below) and the completion of
the other matters required by this Agreement to be done contemporaneously (the
"Closing") shall occur on Wednesday, November 20, 1996 or such earlier date as
is selected by Buyer and Seller upon at least two (2) business days prior
written notice to the Title Company.
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The date on which the Closing actually occurs shall be referred to as the
"Closing Date". Notwithstanding any other provision of this Agreement, the
Closing with respect to the Property shall not be delayed for reason of any
possible delay in the conveyance of the liquor license.
5.2 Failure to Close. If the Closing does not occur on or before
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date set forth in Section 5.1 above, then in the absence of a written agreement
between the parties to extend the Closing Date, either party hereto may elect to
terminate this Agreement upon giving written notice of such termination to the
other and to the Title Company. In such event, except in a case where the
provisions of Section 17 are applicable, the Deposit together with interest
accrued thereon shall be promptly returned to Buyer.
6. DUE DILIGENCE.
6.1 Due Diligence Period. The period commencing on the Effective
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Date and continuing through 5:00 p.m. PST on November 15, 1996 (the "Due
Diligence Date") shall be referred to as the "Due Diligence Period".
6.2 Available information . Seller shall make available to Buyer the
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following documents and materials (collectively, the "Due Diligence Materials"):
6.2.1 Property Files. Except as provided in Section 6.2.2
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below, Seller shall make available to Buyer and Buyer's agents and
representatives, upon reasonable notice and during normal business hours, all
books, records, files, financial records, property tax bills, and other
information in the possession or control of Seller relating to the ownership,
operation, advertising, construction, use or occupancy of the Property, or any
portion of the Property. Seller shall furnish Buyer copies of such materials as
Buyer may request. In particular but without limiting the foregoing, Seller
shall make the following available to the extent that Seller has such materials
in its possession or control: all structural reviews, architectural drawings and
engineering, soils, seismic, geologic and architectural reports, and all
financial statements and budgets for the Property for the current year to date
and each of the five (5) years prior to the year of this Agreement, including
the itemization of (1) annual insurance premiums for each such year for fire,
extended coverage, workers' compensation, vandalism and malicious mischief,
general liability, business interruption, rents and other forms of insurance
shown thereon; (2) expenses incurred for water, electricity, natural gas, sewer
and other utility charges; (3) total rents and revenues collected from tenants
and from hotel guests and other patrons of the Property; (4) management fees;
(5) maintenance, repairs and other expenses relating to the management and
operation of the Property; (6) historical occupancy statistics for the Property;
and (7) all capital expenditures made during the aforementioned periods. Except
as to Confidential Information (as defined hereafter), Buyers' representatives
shall have access to all financial and other information relating to the
Property, to the extent that Seller has such materials in its possession or
control, and Seller (at no cost to Seller) shall reasonably cooperate with Buyer
and Buyer's independent public accountants in connection with the preparation of
audited financial statements with respect to the Property.
6.2.2 Confidential Information. Notwithstanding anything herein
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to the contrary, "Due Diligence Materials" shall not include, and Seller shall
have no obligation to furnish or otherwise make available to Buyer, any of the
following documents: (i) any documents, instruments or agreements evidencing,
securing or relating to the mortgage loan currently encumbering the Property,
(ii) any internal or third-party appraisals of the Property or any reports or
analyses concerning the valuation of the Property, (iii) any correspondence or
analyses regarding past, pending or proposed real property tax appeals, (iv) any
information received from or concerning any other potential purchaser of the
Property, (vi) any information
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related to the 1985 sale of the Property to Monterey Hotel Associates or the
subsequent litigation/arbitration related to such sale, (vii) any Federal or
State personal income tax returns, or (viii) any information or documentation
that is privileged or otherwise legally protected from disclosure under
applicable law (collectively, the "Confidential Information"). Seller
represents to Buyer that following the Closing, Buyer will not suffer any
material damage with respect to the Property by reason of information with
respect to the Property contained in the Confidential Information and not
otherwise available to Buyer in the Due Diligence Materials (as defined below)
or known by Buyer prior to the Closing.
6.3 Title Report; Permitted Exceptions. As soon as possible after
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the Effective Date, Buyer shall obtain, and cause a copy to be delivered to
Seller of, a current Commitment for Title Insurance (the "Title Report") for the
Real Property prepared by the Title Company, together with a copy of all
documents listed as exceptions therein. Buyer shall, as soon as possible after
the Effective Date, obtain, and deliver to Seller a copy of, an ALTA/ACSM Real
Property Title Survey (with Table A supplements) (the "Survey") prepared by a
licensed engineer which Survey shall be current and sufficient to provide the
basis for an ALTA extended coverage owner's policy of title insurance without
boundary, encroachment or survey exceptions. In connection with the Survey,
Buyer shall cause the Title Company to issue an ALTA supplement to the Title
Report reflecting any and all exceptions, if any, indicated by the Survey (the
"ALTA Supplement"). Within five (5) days following receipt by Buyer of the last
to be received among the Title Report, copies of the documents listed as
exceptions, the ALTA Supplement and the Survey (and in any event no later than
two (2) business days prior to the Due Diligence Date), Buyer shall give notice
(the "Title Notice") to Seller of the exceptions to title as shown on the Title
Report, its exceptions, the ALTA Supplement and the Survey, approved by Buyer
and those disapproved by Buyer. Seller shall have five (5) days after the date
of the Title Notice is received (and in all events no later than one (1)
business day prior to the Due Diligence Date) to effect good faith efforts,
without any obligation to incur costs therein, to have the objected to title
exceptions removed to the reasonable satisfaction of Buyer, provided that
"insuring around" shall not be an acceptable removal of any exception. Seller
shall be considered to have removed any objected to title exception in the event
that Seller contractually undertakes in writing an obligation to remove such
exception on or prior to the Closing and thereafter, on or prior the Closing,
completes such removal. If within such time, Seller declines or fails to have
all of such title exceptions removed, Buyer shall have the option within five
(5) days of the date of the Title Notice (but in no event later than the Due
Diligence Date) to either (i) terminate this Agreement by notice to Seller, in
which case all rights and obligations hereunder of each party shall be at an end
(except those matters which are specifically stated in this Agreement to survive
the termination) and the Deposit together with interest accrued thereon shall be
promptly returned to Buyer; or (ii) elect to accept title to the Property as it
then is, but Buyer shall have no other option or remedy. The title exceptions
as shown on the Title Report (and the ALTA Supplement) and Survey approved by
Buyer, as well as those title exceptions, if any, initially disapproved by Buyer
but thereafter accepted shall be referred to herein as the "Permitted
Exceptions". The "Permitted Exceptions" shall in addition include any
encumbrances or liens voluntarily created by Buyer on the Real Property. If
Buyer fails to timely give the Title Notice to Seller or fails to make the
elections set forth in (i) or (ii) above on or before the Due Diligence Date,
then Buyer shall be deemed to have elected to terminate this Agreement in which
event all rights and obligations hereunder of each party shall be at an end
(except those matters which are specifically stated in this Agreement to survive
the termination) and the Deposit together with interest thereon shall be
promptly returned to Buyer. Seller shall reasonably cooperate with Buyer with
respect to obtaining the Title Report, Survey and ALTA Supplement, if any.
6.4 Inspection; Right of Entry. Buyer shall have the right, during
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the Due Diligence Period and subject to the terms and conditions of Section 6.5
below, (i) to enter the Real Property to inspect all aspects of the Property and
conduct inventories (including the performance of environmental audits of the
Real
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Property in accordance with the terms of Sections 6.4.1 and 6.4.2 below and the
obtaining of a product improvement plan from Franchisor (below defined)), upon
reasonable notice to Seller, provided that Buyer does not unreasonably disturb
any business or other tenant operations or activities on the Real Property, and
(ii) to contact representatives of tenants and/or third parties who have
executed service contracts, Leases or other agreements with Seller or Seller's
representatives regarding the Real Property. Buyer shall coordinate all such
contacts through Seller's General Manager, ▇▇▇▇ ▇▇▇▇▇. Seller shall cooperate
with Buyer in notifying tenants as to Buyer's inspection thereof. Except as
provided in Section 9.2.1 below, any and all costs of Buyer's inspection of the
Real Property shall be borne solely by Buyer.
6.4.1 Phase I Environment Audit. During the Due Diligence
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Period, Buyer may conduct (or have conducted on its behalf by an environmental
auditor) a Phase I environmental audit of the Real Property, subject to the
terms and conditions of Sections 6.4.2 and 6.5 below. Buyer shall not conduct a
Phase II environmental audit of the Real Property nor conduct any invasive
testing of the Real Property without the prior written consent of Seller, which
consent shall not be unreasonably withheld. Seller shall also provide Buyer as
part of the Due Diligence Materials a copy of the Phase 1 Environmental Site
Assessment and Limited Asbestos Survey dated June 25, 1996 and produced by ▇▇▇▇▇
International Incorporated.
6.4.2 Environmental Conditions. In the event that Buyer shall
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conduct a Phase I environmental audit of the Real Property, Buyer shall provide
Seller with at least forty-eight (48) hours' prior written notice of its intent
thereof. Buyer shall not disclose to any third party, other than Buyer's
consultants, agents, attorneys, lenders and securities agents, the results of
any of Buyer's inspections or testing of the Real Property (collectively,
"Investigations"). Prior to performing any of the Investigations, Buyer shall
obtain any required permits and authorizations and shall pay all applicable fees
required by any public body or agency in connection therewith. Seller shall be
entitled to have a representative present at all times in connection with any
inspections by Buyer of the Real Property.
6.5 Indemnity; Return; Copies. Buyer shall indemnify, defend by
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counsel reasonably acceptable to Seller, and hold Seller harmless from and
against any cost, expense, claim, liability or demand, including reasonable
attorneys' fees, arising from such entry by Buyer or from the performance of any
testing or other Investigations of the Real Property by Buyer, except with
respect to any loss or liability incurred by Seller resulting from the mere
discovery by Buyer of the presence of hazardous substances at the Property or
the existence of other defects with respect to the Property. If this
transaction does not close for any reason, Buyer shall repair any damage to the
Real Property resulting form Buyer's entry onto the Real Property, including any
tests and other Investigations. At Seller's request, Buyer shall deliver to
Seller copies of all written reports relating to the Investigations with respect
to the Real Property. The aforesaid indemnity and other agreements of Buyer set
forth in this Section 6.5 shall survive without limitation the termination or
other expiration of this Agreement. Buyer shall, in addition, furnish to Seller
evidence of insurance coverage maintained by Buyer reasonably satisfactory to
Seller, which coverage shall be applicable in connection with any inspections by
Buyer or by its representatives of the Real Property.
6.6 General Conditions. Buyer shall have right to review and
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approve, in its sole discretion, during the Due Diligence Period, the Due
Diligence Materials, feasibility, franchise licensing, liquor licensing, title
to the property and any physical or other items set forth in Sections 6.2, 6.3
and 6.4 above. In the event that Buyer does not approve each such item by
giving written notice of such approval to Seller on or before the Due Diligence
Date, this Agreement shall terminate, all rights and obligations hereunder of
each party shall be at an end (except those matters which are specifically
stated in the Agreement to survive the termination), and the Deposit together
with interest thereon shall be promptly returned to Buyer. At any time
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during the pendency of this Agreement and upon request by Seller, Buyer shall
promptly deliver to Seller copies of all Due Diligence Materials and other
studies and reports pertaining to the Property. In the event that Buyer gives
written notice of its approval pursuant to this Section 6.6, then the conditions
precedent for the benefit of Buyer as set forth in Sections 7.2.5 and 7.2.7
shall be considered to have been satisfied and Buyer shall have no further
rights to assert the conditions set forth in either of such Sections.
6.7 Estoppel Certificates. Within two (2) business days following
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the Effective Date, Seller shall deliver to each of the commercial tenants of
the Real Property an estoppel certificate in connection with the respective
Leases (collectively, the "Estoppel Certificates"). The Estoppel Certificates
shall be in the form attached hereto as Exhibit 6.7, and Seller shall request of
each tenant that such form be executed and promptly returned to Buyer.
7. CONDITIONS TO CLOSING.
7.1 Seller's Conditions. The obligation of Seller to sell and convey
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the Property pursuant to this Agreement is subject to the satisfaction on or
before the Closing Date (or such earlier date as is specifically set forth in
this Agreement) of all of the following conditions precedent, which conditions
are for the benefit of Seller only and the satisfaction of which may be waived
only in writing by Seller:
7.1.1 Buyer's Deliveries. Delivery and execution by Buyer of
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all monies, items and instruments required to be delivered by Buyer pursuant to
this Agreement;
7.1.2 Buyer's Representations. Buyer's warranties and
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representations set forth herein shall be true and correct as of the Closing
Date;
7.1.3 Buyer's Performance. Buyer shall have performed each and
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every agreement to be performed by Buyer pursuant to this Agreement.
7.1.4 Holiday Inns. With reference to the Commitment Agreement
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(as defined below), Buyer shall have effective as of the Closing (i) executed a
new license agreement with the Franchisor (as defined below) or (ii) caused the
Franchisor to cancel the existing Commitment Agreement and in either event shall
have provided to Seller the Holiday Inn Indemnification (as defined below) all
in accordance with the provisions of Section 16.17.
7.1.5 Buyer's Approval. Buyer shall have given its written
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approval on or prior to the Due Diligence Date of the matters described in and
in accordance with the provisions of Section 6.6.
7.2 Buyer's Conditions. The obligation of Buyer to acquire the
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Property pursuant to this Agreement is subject to the satisfaction on or before
the Closing Date (or such earlier date as is specifically set forth in this
Agreement) of all of the following conditions precedent which conditions are for
the benefit of Buyer only and the satisfaction of which may be waived only in
writing by Buyer:
7.2.1 Seller's Deliveries. Delivery and execution by Seller of
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all instruments and other items required to be delivered by Seller pursuant to
this Agreement;
7.2.2 Seller's Representations. Seller's warranties and
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representations set forth herein shall be true and correct as of the Closing
Date;
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7.2.3 Seller's Performance. Seller shall have performed each
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and every agreement to be performed by Seller pursuant to this Agreement;
7.2.4 Buyer's Title Policy. As of the Closing, the Title
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Company shall have issued or shall have committed to issue, upon the sole
condition of the payment of its regularly scheduled premium, the Buyer's Title
Policy;
7.2.5 Due Diligence Materials. Buyer's inspection and approval
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on or prior to the Due Diligence Date of the matters described in Section 6.6
including the Due Diligence Materials, the Title Report and all other physical
environmental, legal and other matters relating to the Property which Buyer may,
in Buyer's sole discretion, elect to investigate;
7.2.6 Estoppel Certificates. Each of the Estoppel Certificates
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fully executed by each of the tenants of the respective Leases without material
modification shall have been received by Buyer at least five business days prior
to the scheduled date of Closing; and
7.2.7 Board Approval. The Board of Directors of the real estate
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investment trust with which Buyer is affiliated shall, by the Due Diligence
Date, have approved this Agreement and consummation of the purchase herein
contemplated.
7.3 Failure of Conditions. If any of the conditions set forth in
---------------------
Sections 7.1 or 7.2 are not timely satisfied or waived, for any reason other
than the default of Buyer or Seller under this Agreement, then this Agreement
and the rights and obligations of Buyer and Seller shall terminate and be of no
further force or effect except as to those matters as specifically stated in
this Agreement to survive termination, in which case the Title Company is hereby
instructed to return promptly to the party which placed such items into Escrow
all funds (including the Deposit together with interest accrued thereon to be
promptly returned to Buyer) and documents which are held by the Title Company on
the date of termination.
8. DELIVERIES INTO ESCROW.
8.1 Deliveries by Seller. Seller shall deliver or cause to be
--------------------
delivered into Escrow the following documents duly executed and acknowledged
where appropriate:
8.1.1 Deed. Standard-form grant deed (the "Deed") in the form
----
set forth on Exhibit 8.1.1 attached hereto conveying the Real Property to Buyer
as provided in this Agreement;
8.1.2 ▇▇▇▇ of Sale. ▇▇▇▇ of Sale (the "▇▇▇▇ of Sale") in the
------------
form set forth on Exhibit 8.1.2 attached hereto conveying the Personal Property
to Buyer;
8.1.3 Assignment. The Assignment, together with schedule(s) of
----------
the matters being assigned, in the form set forth on Exhibit 8.1.3 attached
hereto;
8.1.4 FIRPTA. Certificate of non-foreign status to confirm that
------
Buyer is not required to withhold part of the Purchase Price pursuant to Section
1445 of the Internal Revenue Code of 1986, as amended;
-9-
8.1.5 Form 590. Franchise Tax Board Form 590;
--------
8.1.6 Seller Authority. Such proof of Seller's authority and
----------------
authorization to enter into this Agreement and consummate the transaction
contemplated hereby and such proof of the power and authority of the
individual(s) executing and/or delivering any instruments, documents or
certificates on behalf of Seller to act for and bind Seller as may be reasonably
required by the Title Company;
8.1.7 Miscellaneous Items. To the extent not previously
-------------------
delivered to Buyer, all plans and specifications with respect to the
Improvements, all keys, access cards, and combinations for the Property (which
shall be properly tagged for identification), all books and records, and
originals of all of the documents, contracts, leases and agreements that have
not already been delivered to Buyer; and
8.1.8 Other Documents. Such other documents as may be
---------------
reasonably necessary and appropriate to complete the Closing of the transaction
contemplated herein, including without limitation, such documents as may be
required in connection with transfer of the liquor license which transfer may be
through a separate escrow.
8.2 Deliveries by Buyer. Buyer shall deliver or cause to be
-------------------
delivered into Escrow the following items and documents duly executed and
acknowledged where appropriate:
8.2.1 Cash. The cash portion of the Purchase Price and such
----
additional sums as are necessary to pay the Buyer's share of closing costs,
prorations and any fees as more particularly set forth in Section 9 below;
8.2.2 Assignment. The Assignment;
----------
8.2.3 Buyer's Authority. Such proof of Buyer's authority and
-----------------
authorization to enter into this Agreement and consummate the transaction
contemplated by this Agreement, and such proof of the power and authority of the
individual(s) executing and/or delivering any instruments, documents or
certificates on behalf of Buyer to act for and bind Buyer as may be reasonably
required by the Title Company;
8.2.4 Holiday Inn Indemnification. The Holiday Inn
---------------------------
Indemnification (as defined below); and
8.2.5 Other Documents. Such other documents as may be
---------------
reasonably necessary and appropriate to complete the Closing of the transaction
contemplated herein, including without limitation, such documents as may be
required in connection with transfer of the liquor license which transfer may be
through a separate escrow.
8.3 Tenant Notification Letters. Seller shall execute a tenant
---------------------------
notification letter in the form attached hereto as Exhibit 8.3 to each
commercial tenant of the Real Property (the "Tenant Notification Letter"),
indicating the change of ownership of the Property with the name and address of
the Buyer and the Closing Date, and shall upon the Closing deliver an executed
Tenant Notification Letter to Buyer with respect to each tenant of the Real
Property.
8.4 Delivery to Buyer Upon Closing. Seller shall deliver possession
------------------------------
of the Property to Buyer upon the Closing.
-10-
8.5 Delivery Following Closing. Following the Closing, Seller shall
--------------------------
promptly deliver to Buyer such other matters and documents related to the
Property which are in the possession of Seller and which Buyer may reasonably
request.
9. PRORATIONS; CLOSING COSTS; CREDITS.
9.1 Prorations.
----------
9.1.1 Rent. Rents, revenues, and other income from the Property
----
shall be prorated through Escrow as of 12:01 a.m. on the Closing Date.
9.1.2 Taxes. All non-delinquent real estate, sales, room taxes
-----
and other taxes and assessments related to the Property shall be prorated
through Escrow. In the case of real estate taxes, the proration shall be based
on the actual current tax ▇▇▇▇ as of 12:01 a.m. on the Closing Date. If after
the Closing, a refund of real estate taxes is rendered or supplemental real
estate taxes are assessed against the Property by reason of any event occurring
prior to the Closing Date, or if actual taxes and assessment are different from
those used in prorating, Buyer and Seller shall adjust the proration of the real
estate taxes following the Closing. Any delinquent taxes on the Property shall
be paid at the Closing by Seller. All assessment installment payments which are
due and payable prior to the Closing Date shall be paid at the Closing by
Seller. Seller shall have no obligation to pay any assessment amounts not then
due and payable.
9.1.3 Expenses, Debts and Other Obligations. Operating expenses
-------------------------------------
and all other customary charges or costs incident to the ownership of the
Property shall be prorated through Escrow as of 12:01 a.m. on the Closing Date.
Seller shall be responsible for all expenses, debts and other obligations
arising or accruing and attributable to the Property prior to the Closing Date,
and Buyer shall be responsible for such debts, expenses and other obligations
arising and accruing on or after the Closing Date, provided however that Seller
shall reimburse Buyer an amount equal to Seven Dollars ($7.00) per room rented
the night prior to the Closing Date as an estimate of the cost of housekeeping.
To the extent possible, Seller and Buyer shall obtain utilities ▇▇▇▇▇▇▇▇ and
meter readings as of the Closing Date and all operating expenses shall be
prorated based upon the information then available. Seller and Buyer shall make
any adjustments required to be made subsequent to the Closing in the event the
information available at the Closing is incorrect.
9.1.4 Service Contracts, Leases and All Other Agreements. The
--------------------------------------------------
amounts payable under the service contracts (the "Service Contracts"), Leases
and all other agreements which shall be assumed pursuant to the provisions of
the Assignment, shall be prorated through Escrow on an accrual basis as of 12:01
a.m. on the Closing Date. Seller shall pay all amounts due thereunder which
accrue prior to the Closing Date, and Buyer shall pay all amounts accruing on
the Closing Date and thereafter. Buyer shall have no responsibility for leases,
service contracts or other agreements not specifically being assumed by Buyer
pursuant to this Agreement.
9.1.5 Inventories. Commencing approximately thirty (30) hours
-----------
before Closing, Seller and Buyer (or their separate representatives) shall
conduct an inventory of all inventories for which additional sums are to be paid
at Closing, Seller shall provide cost substantiations, and Buyer shall pay for
same in cash at Closing.
9.1.6 Miscellaneous Prorations. Seller shall receive a credit
------------------------
through escrow in the
-11-
amount of all utility deposits and Buyer shall receive a credit through escrow
in the amount of all guest advance deposits (with Buyer assuming liability
therefore) existing as of the Closing and Seller and Buyer will pro-rate through
escrow as of 12:01 a.m. on the Closing Date the amount of all guest ledger
receivables, and Buyer shall receive a credit for all tenant security deposits
(with Buyer assuming liability therefor). Buyer shall not acquire any rights or
incur any obligations with respect to Seller's accounts payable or other debts,
city ledger receivables, credit card receivables or operating cash banks at the
Property.
9.1.7 Calculation of Prorations. All prorations shall be made
-------------------------
on the basis of the actual number of days of the year and month which have
elapsed as of 12:01 a.m. on the Closing Date.
9.1.8 Subsequent Adjustments. Within sixty (60) days after the
----------------------
Closing Date or such longer period as may be required, Buyer and Seller will
make a further adjustment to account for proration corrections and also
adjustments for all other matters of proration which may have accrued prior to
the Closing Date but which were not prorated in the initial prorations.
9.2 Closing Costs.
-------------
9.2.1 Seller's Costs. Seller shall pay (i) the premium for the
--------------
CLTA portion of the Buyer's Title Policy; and (ii) fifty percent (50%) of: the
cost of the Survey, all sales taxes and transfer taxes, if any, miscellaneous
recording costs and escrow fees and costs.
9.2.2 Buyer's Costs. Buyer shall pay (i) the incremental
-------------
premium for the ALTA portion of Buyer's Title Policy and the premium for any
endorsements; (ii) any and all costs related to Buyer's lender and loan
documents, if any; and (iii) fifty percent (50%) of: the cost of the Survey, all
sales taxes and transfer taxes, if any, miscellaneous recording costs and escrow
fees and costs.
9.3 Other Expenses. Buyer and Seller shall each pay all legal and
--------------
professional fees and fees of other consultants incurred by Buyer and Seller,
respectively.
10. OPERATION OF PROPERTY PENDING THE CLOSING. Following the Effective
Date and pending the Closing, the Seller shall operate the Property in
accordance with the following:
10.1 Normal Course of Business. Seller shall continue to operate,
-------------------------
manage and maintain the Property in such condition so that the Property shall be
in the same condition as of the Closing Date as it is as of the Effective Date,
reasonable wear and tear and casualty excepted. Following the Effective Date
Seller shall operate the Property in accordance with applicable law in all
material respects. Seller shall maintain all existing insurance policies in
connection with the Property and shall keep in effect and renew all licenses and
permits applicable to the Property.
10.2 Further Encumbrances. Without the prior written consent of
--------------------
Buyer, Seller shall not voluntarily execute any documents or otherwise take any
action which will have the result of placing a recorded lien against the
Property. Seller shall pay all valid obligations accruing prior to the Closing
which may subject the Property to mechanic's lien.
10.3 New Leases. Seller will not enter into any new leases or
----------
extend, renew or in any fashion modify any of the existing Leases (unless
pursuant to a valid exercise of a tenant option set forth in a Lease) or enter
into any new contracts that are not cancelable on no more than thirty (30) days
notice without
-12-
the prior written approval of Buyer which consent shall not be unreasonably
withheld.
11. REPRESENTATIONS AND WARRANTIES.
11.1 No Representations or Warranties by Seller. Except as expressly
------------------------------------------
set forth in this Agreement, Seller has not made any warranty or representation
of any kind whatsoever, express or implied, written or oral, concerning the
Property.
11.2 Seller's Representations and Warranties. Seller represents and
---------------------------------------
warrants to Buyer that:
11.2.1 Authority. This Agreement constitutes the valid and
---------
binding obligation of Seller and is enforceable against Seller in accordance
with its terms. The execution of this Agreement, delivery of money and all
required documents, Seller's performance of this Agreement and the transaction
contemplated hereby have been duly authorized by the requisite action on the
part of Seller.
11.2.2 Restrictions and Regulations. To the best of Seller's
----------------------------
knowledge there are no violations of private restrictions or governmental
regulations relating to the Property including, without limitation, the
Americans With Disabilities Act and environmental laws.
11.2.3 Taxes. Except for the amounts disclosed by the tax
-----
bills for all real property taxes and personal property taxes, and notices for
any assessments or bonds relating to the Property provided by Seller to Buyer no
later than ten (10) days prior to the Due Diligence Date, to the best of
Seller's knowledge, no real property taxes or other assessments have been
assessed against the Property for the current tax year and all taxes and
assessments (or current instruments payable) for prior years have been paid.
11.2.4 Leases and Other Agreements. Other than as relates to
---------------------------
regular nightly hotel guests occupying rooms/suites of the Property, there are
no leases, subleases, occupancies or tenancies in effect pertaining to the
Property, except the Leases, copies of all of which have been delivered by
Seller. No Lease has been modified, amended or altered, and no currently
outstanding concessions, abatements or adjustments have been granted to any
tenant, except as scheduled in Exhibit 1.1.4. Following the Closing neither
Buyer nor the Property shall be bound by any contract or agreement except those
contracts and agreements set forth on Exhibit 1.1.4 attached hereto.
11.2.5 Access. To the best of Seller's knowledge, no fact or
------
condition exists which may result in the termination or reduction of the current
access from the Property to existing roads and highways.
11.2.6 Miscellaneous. To the best of Seller's knowledge,
-------------
there are no:
(a) pending arbitration proceedings or unsatisfied
arbitration awards, or judicial proceedings or orders respecting awards, which
might become a lien on the Property;
-13-
(b) pending unfair labor practice charges or
complaints, labor disputes, or unsatisfied unfair labor practice orders or
judicial proceedings or orders with respect thereto;
(c) pending charges or complaints with or by city,
state or federal civil or human rights agencies, unremedied orders by such
agencies or judicial proceedings or orders with respect to obligations under
city, state or federal civil or human rights or antidiscrimination laws or
executive orders;
(d) condemnation proceedings pending or threatened with
regard to all or any part of the Property; or
(e) other pending, threatened or actual litigation
claims, charges, complaints, petitions or unsatisfied orders by or before any
administrative agency or court which affects the Property or might become a lien
on the Property or might affect the validity or enforceability of this
Agreement.
11.2.7 Bankruptcy. No petition in bankruptcy (voluntary or
----------
otherwise), assignment for the benefit of creditors, or petition seeking
reorganization or arrangement or other action under federal or state bankruptcy
laws is pending against or contemplated by Seller.
11.2.8 Vehicle. There are no vehicles owned and exclusively
-------
employed by Seller in connection with the Property.
11.2.9 Financial Statements. The statements of operations for
--------------------
years ended December 31, 1995, 1994, 1993, 1992 and 1991 and for the month of
August and year to date 1996 with respect to the Property which are listed on
Exhibit 11.3 to this Agreement, to the best of Seller's knowledge are correct
and complete in all material respects and present accurately in all material
respects the results of operations of the Property for the periods indicated.
11.2.10 Confidential Information. Seller represents to Buyer
------------------------
that following the Closing, Buyer will not suffer any material damage with
respect to the Property by reason of information with respect to the Property
contained in the Confidential Information and not otherwise available to Buyer
in the Due Diligence Materials or known by Buyer prior to the Closing.
11.2.11 True as of Closing. Each representation and warranty in
------------------
this Agreement is true, correct and complete in all material respects, and those
contained in this Section 11.2 shall be continuing and shall be true, correct
and materially complete as of the Closing with the same force and effect as if
remade by Seller in a separate certificate at that time and shall survive the
Closing for a period of one (1) year and shall have no effect thereafter.
11.2.12 Material Changes. Seller shall promptly notify Buyer of
----------------
any change in any condition with respect to the Property or any event or
circumstance which makes any representation or warranty of Seller under this
agreement materially untrue or misleading, or any covenant of Seller under this
Agreement incapable of being performed.
11.2.13 Seller's Knowledge. For purposes of this Section 11.2,
------------------
all references to Seller's knowledge shall be limited to the current personal
actual knowledge, as distinguished from implied, imputed and constructive
knowledge, of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, III and/or ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇,
which
-14-
individuals are not required to make any independent investigations regarding
the subject matter of the representation or warranty being made, provided,
however, that Seller shall make reasonable inquiry of ▇▇▇▇ ▇▇▇▇▇, Seller's
General Manager of the Property.
11.3 Limitation on Representations and Warranties of Seller. Except
------------------------------------------------------
as expressly set forth in Section 11.2, Seller has made no representations or
warranties of any kind whatsoever with respect to the Property and Buyer hereby
acknowledges that except as expressly set forth in Section 11.2, Buyer is
purchasing the Property in an "AS-IS" and "WHERE IS" condition as of the Closing
Date subject to all facts, circumstances, conditions and defects. Buyer further
acknowledges that Buyer has conducted, or will prior to the expiration of the
Due Diligence Period conduct, physical inspections of the Property and undertake
such investigation with respect to the Property as Buyer has deemed necessary or
appropriate including, but without limitation, a review of all environmental
matters with respect to the Property, the physical aspects of the Property
including the physical aspects of all Improvements, all zoning and building code
requirements in connection with the Property, the availability of all utilities
with respect to the Property, and any and all other matters relating to the
Property which Buyer has considered appropriate to investigate. Except as
expressly set forth in Section 11.2, no representations or warranties have been
made or are made and no responsibility has been or is assumed by Seller or by
any partner, officer, person, firm, agent or representative acting or purporting
to act on behalf of Seller as to any matters concerning the Property, including,
without limitation, the condition or repair of the Property or the value,
expense of operation or income potential thereof or as to any other fact or
condition which has or might affect the Property or the condition, repair,
value, expense of operation or income potential of the Property or any portion
thereof. The parties agree that all understandings and agreements heretofore
made between them or their respective agents or representatives are merged in
this Agreement and the exhibits hereto annexed, which alone fully and completely
express their agreement, and that this Agreement has been entered into with the
Buyer satisfied that the Seller has afforded and will afford pursuant to the
provisions of this Agreement Buyer with the opportunity for full investigation
of the Property. Buyer is not relying upon any statement or representation by
Seller unless such statement or representation is specifically included in
Section 11.2. Buyer acknowledges that Seller has requested Buyer to inspect
fully the Property and investigate all matters relevant thereto and (except as
to the express representations of Seller in Section 11.2) to rely solely upon
the results of Buyer's own inspections or other information obtained or
otherwise available to Buyer, rather than any information that has been provided
by Seller to Buyer. Except as expressly set forth in Section 11.2, Seller is
not making any representation or warranty with respect to the physical condition
of the Property or the fitness of the Property or any portion of the Property
for any particular purpose or the presence or absence of any hazardous materials
and except as expressly provided in Section 11.2 to the contrary, Buyer
acknowledges that Buyer is relying solely on its own inspections with respect to
the Property in electing to purchase the Property pursuant to the terms of this
Agreement. Without limiting the above, Buyer on behalf of itself and its
successors and assigns waives and releases Seller and its successors and assigns
from any and all demands, claims, legal or administrative proceedings, losses,
liabilities, damages, penalties, fines, liens, judgments, costs or expenses
whatsoever (including, without limitation, attorneys' fees and costs), whether
direct or indirect, known or unknown, foreseen or unforeseen, arising from or
relating to the physical condition of the Property or any law or regulation
applicable thereto, including the presence or alleged presence of asbestos or
harmful or toxic substances in, on, under or about the Property including,
without limitation, any claims under or on account of (i) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as the same may
have been or may be amended form time to time, and similar state statutes, and
any regulations promulgated thereunder, (ii) any other federal, state or local
law, ordinance, rule or regulation, now or hereafter in effect, that deals with
or otherwise in any manner relates to, environmental matters of any kind,
(iii) the common law, or (iv) this Agreement except to the extent of any express
obligations undertaken by Seller in this Agreement
-15-
or any exhibits, including but not limited to any express representations or
warranties. Seller believes that prior to the Effective Date it has provided to
Buyer copies of all of the records, documents and other materials which are
listed on Exhibit 11.3 attached hereto. With respect to the above waiver by
Buyer, Buyer expressly waives all rights under California Civil Code Section
1542, which provides that:
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.
11.4 Buyer's Representations and Warranties. Buyer represents and
--------------------------------------
warrants to Seller that:
11.4.1 Authority to Execute; Organization. Subject only to
----------------------------------
the approval of this Agreement by the Board of Directors of the real estate
investment trust with which Buyer is affiliated as provided in Section 7.2.7,
this Agreement constitutes the valid and binding obligation of Buyer and is
enforceable against Buyer in accordance with its terms. Buyer represents that
it is a limited partnership, is validly formed and duly organized in good
standing under the laws of the State of Delaware, and the execution of this
Agreement, delivery of money and all required documents, Buyer's performance of
this Agreement and the transaction contemplated hereby have been duly authorized
by the requisite action on the part of the partnership except for approval of
said Board of Directors. Buyer in addition represents that it is duly qualified
to conduct business in the State of California.
11.4.2 Financial Condition. Buyer's financial condition is as
-------------------
represented to Seller on the Effective Date and shall not have materially
adversely changed prior to the Closing Date. No petition in bankruptcy
(voluntary or otherwise), assignment for the benefit of creditors, or petition
seeking reorganization or arrangement or other action under federal or state
bankruptcy laws is pending against or contemplated by Buyer.
11.4.3 No Encumbrance. Prior to Closing, Buyer shall neither
--------------
encumber nor cause any liens to be created against the Property in any way, nor
shall Buyer, at any time, record this Agreement or a memorandum thereof.
11.4.4 Principal. Buyer is acting as a principal in this
---------
transaction.
11.4.5 Due Diligence. By the Due Diligence Date, Buyer, in
-------------
reliance on Seller's representations and warranties under Section 11.2: (i)
will have inspected the Property fully and completely at its expense (or will
have had the opportunity to do so to Buyer's satisfaction) and will have
ascertained to its satisfaction the extent to which the Property complies with
applicable zoning, building, environmental, health and safety and all other
laws, codes and regulations, and (ii) based upon its own investigations,
inspections, tests and studies, will have determined whether to purchase the
Property and to assume Seller's obligations arising after the Closing Date under
the Leases and contracts set forth on Exhibit 1.1.4 hereto.
11.4.6 ERISA. Buyer will not use the assets of an employee
-----
benefit plan as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA") in the performance or discharge of its
obligations hereunder, including the acquisition of the Property. Buyer shall
not assign its interest hereunder to any person or entity which would use any
such assets for any such purpose.
- 16 -
12. INDEMNIFICATION.
12.1 Indemnification of Buyer. Seller hereby agrees to indemnify
------------------------
Buyer against, and to hold Buyer harmless from, all losses, damages, costs and
expenses whatsoever including without limitation reasonable legal fees and
disbursements, incurred by Buyer relating to the Property which arise, result
from or relate to (i) acts, occurrences or matters that took place, prior to the
Closing and during Seller's period of ownership to the extent that any such
claim described in this clause (i) is covered by the comprehensive general
liability insurance policy maintained by Seller or otherwise covered pursuant to
applicable insurance coverage maintained by Seller and in this connection Seller
represents and warrants that Seller has during the period of its ownership
maintained and continues to maintain comprehensive general liability insurance
coverage; or (ii) any breach of any of the representations, warranties or
covenants of Seller set forth in Section 11.2 of this Agreement. The indemnity
obligation of Seller as set forth in this Section 12.1 shall be subject to the
limitation on assertion of claims set forth in Section 16.18 and shall survive
the Closing subject to the time limitations set forth in Section 16.18 provided
however that there shall be no time limitation (other than limitations imposed
by statutes of limitation generally applicable) with respect to the matters
described in clause (i) above.
12.2 Defense of Claims Against Buyer. With respect to any claim for
-------------------------------
which Buyer has requested indemnification under Section 12.1, Seller shall be
entitled to assume the defense of any related litigation, arbitration or other
proceeding, provided that Buyer may at its election and expense, participate in
such defense, and provided further that if there is any difference of opinion or
strategy with respect to the defense of such action or the assertion of
counterclaims to be brought with respect thereto, Seller's counsel will, after
consultation with Buyer's counsel, determine the actual strategy, defense or
counterclaim to be employed. At Seller's reasonable request, Buyer will
cooperate with Seller in the preparation of any defense or any such claim and
Seller will reimburse Buyer for any reasonable expenses incurred in connection
with such request. If Seller does not elect to assume the defense of any such
matter, Buyer shall have the right, at Seller's sole expense, to employ counsel
reasonably acceptable to Seller to defend such matter and Seller at its cost
shall be entitled to participate in such defense, provided that if there is any
difference of opinion or strategy with respect to the defense of such action or
the assertion of counterclaims to be brought with respect thereto, Buyer's
counsel will, after consultation with Seller's counsel, determine the actual
strategy, defense and/or counterclaim to be employed.
12.3 Indemnification of Seller. Buyer hereby agrees to indemnify
-------------------------
Seller against, and to hold Seller harmless from, all losses, damages, costs and
expenses whatsoever including without limitation reasonable legal fees and
disbursements, incurred by Seller relating to the Property which arise, result
from or relate to (i) acts, occurrences or matters that take place, subsequent
to the Closing and during Buyer's period of ownership to the extent that any
such claim described in this clause (i) is covered by the comprehensive general
liability insurance policy maintained by Buyer or otherwise covered pursuant to
applicable insurance coverage maintained by Buyer and in this connection Buyer
represents and warrants that Buyer will during the period of its ownership
maintain comprehensive general liability insurance coverage with respect to the
general liability claims as contemplated by this clause (i); or (ii) any breach
of any of the representations, warranties or covenants of Buyer set forth in
Section 11.4 of this Agreement.
12.4 Defense of Claims Against Seller. With respect to any claim for
--------------------------------
which Seller has requested indemnification under Section 12.3, Buyer shall be
entitled to assume the defense of any related litigation, arbitration or other
proceeding, provided that Seller may at its election and expense, participate in
- 17 -
such defense, and provided further that if there is any difference of opinion or
strategy with respect to the defense of such action or the assertion of
counterclaims to be brought with respect thereto, Buyer's counsel will, after
consultation with Seller's counsel, determine the actual strategy, defense or
counterclaim to be employed. At Buyer's reasonable request, Seller will
cooperate with Buyer in the preparation of any defense or any such claim and
Buyer will reimburse Seller for any reasonable expenses incurred in connection
with such request. If Buyer does not elect to assume the defense of any such
matter, Seller shall have the right, at Buyer's sole expense, to employ counsel
reasonably acceptable to Buyer to defend such matter and Buyer at its cost shall
be entitled to participate in such defense, provided that if there is any
difference of opinion or strategy with respect to the defense of such action or
the assertion of counterclaims to be brought with respect thereto, Seller's
counsel will after consultation with Buyer's counsel, determine the actual
strategy, defense and/or counterclaim to be employed.
13. CASUALTY OR CONDEMNATION.
13.1 Casualty. Prior to the Closing, and notwithstanding the pendency
--------
of this Agreement, the entire risk of loss or damage by earthquake, flood,
landslide, fire or other casualty shall be borne and assumed by Seller, except
as otherwise provided in this Section 13.1. If, prior to the Closing, any part
of the Real Property is damaged or destroyed by earthquake, flood, landslide,
fire or other casualty, Seller shall immediately notify Buyer of such fact
whether or not such loss is material, and provide to Buyer all relevant
insurance information. If such damage or destruction is "material", Buyer shall
have the option to terminate this Agreement upon notice to Seller given not
later than ten (10) days after receipt of Seller's notice. For purposes of this
Section 13.1, "material" shall be deemed to be (i) any uninsured damage or
destruction to the Property; (ii) any insured damage or destruction where the
costs of repair or replacement is estimated to be Two Hundred Thousand Dollars
($200,000) or more or shall take more than sixty (60) days to repair, or (iii)
any insured damage or destruction where the insurance proceeds available (plus
deductible to be paid by Seller) is insufficient to repair the Property so as to
return the Property to its condition prior to the occurrence of the damage or
destruction; provided, however, in the case of uninsured or underinsured damage
or destruction, Seller may, at Seller's option elect to repair such damage and
destruction and keep this Agreement in full force and effect so long as such
repair can be and is completed by Seller prior to the scheduled Closing Date.
If Buyer does not exercise this option to terminate this Agreement, or the
casualty is not material, neither party shall have the right to terminate this
Agreement, but Seller shall assign and turn over to Buyer, and Buyer shall be
entitled to receive and keep all insurance proceeds payable to it with respect
to such destruction plus Seller shall pay over to Buyer an amount equal to the
deductible amount with respect to the insurance and the parties shall proceed to
the Closing pursuant to the terms hereof without modification of the terms of
this Agreement and without any reduction in the Purchase Price. If Buyer does
not elect to terminate this Agreement by reason of any casualty, Buyer shall
have the right to participate in any adjustment in the insurance claim. If
Buyer does terminate this Agreement pursuant to this Section 13.1, this
Agreement shall terminate, all rights and obligations hereunder of each party
shall be at an end and the Title Company is hereby instructed to return promptly
to the party which placed such items into Escrow all funds (including the
Deposit together with interest accrued thereon to be promptly returned to Buyer)
and documents which are held by the Title Company on the date of termination.
13.2 Condemnation . In the event that all or any substantial portion
-------------
of the Real Property shall be taken in condemnation or under the right of
eminent domain after the Effective Date and before the Closing, Buyer may, at
its option either (a) terminate this Agreement by written notice thereof to
Seller and receive an immediate refund of the Deposit, together with any
interest earned thereon, or (b) proceed to close the transaction contemplated
herein pursuant to the terms hereof in which event Seller shall assign and turn
- 18 -
over to Buyer, and Buyer shall be entitled to receive and keep all awards for
the taking by eminent domain which accrue to Seller and there shall be no
reduction in the Purchase Price. For purposes of this provision, a "substantial
portion" of the Real Property shall mean (i) any portion of the Real Property is
taken that in any material respect lessens Buyer's ability to use the Property
for its intended purpose; (ii) the access to the Real Property or available
parking area therefore is reduced or restricted; or (iii) any of the
Improvements are taken. In the event that a portion of the Real Property less
than a substantial portion is taken, Buyer shall proceed to close the
transaction contemplated herein and there shall be no reduction in the Purchase
Price and Seller shall assign and turn over to Buyer and Buyer shall be entitled
to receive and keep all awards for the taking by eminent domain which accrue to
Seller.
14. COMMISSIONS.
Seller agrees to pay the brokerage commission, if any, due from Seller
to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ of TRI Commercial Real Estate Services, Inc. Neither ▇▇.
▇▇▇▇▇▇▇▇▇ nor TRI Commercial Real Estate Services, Inc. has acted as the agent
of Buyer in the pending transaction. Buyer represents and warrants to the
Seller that no real estate broker or agent has been authorized to act on Buyer's
behalf. Buyer and Seller each indemnifies the other party and agrees to defend
and hold the other party harmless from any and all demands or claims which now
or hereafter may be asserted against the other party for any brokerage fees,
commissions or similar types of compensation which may be claimed by any broker
as a result of the indemnifying party's acts in connection with this
transaction, except as otherwise provided herein.
15. NOTICES.
All notices, requests or demands to a party hereunder shall be in
writing and shall be given or served upon the other party by personal service,
by certified return receipt requested or registered mail, postage prepaid, or by
Federal Express or other nationally recognized commercial courier, charges
prepaid, addressed as set forth below. Any such notice, demand, request or
other communication shall be deemed to have been received upon the earlier of
personal delivery thereof, three (3) business days after having been mailed as
provided above, or one (1) business day after delivery through a commercial
courier, as the case may be. Notices may be given by facsimile and shall be
effective upon the transmission of such facsimile notice provided that the
facsimile notice is transmitted on a business day and a copy of the facsimile
notice together with evidence of its successful transmission indicating the date
and time of transmission is sent on the day of transmission by recognized
overnight carrier for delivery on the immediately succeeding business day. Each
party shall be entitled to modify its address by notice given in accordance with
this Section 15.
If to Seller: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, III
One Bay Plaza
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax #: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ESQ.
▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Fax #: (▇▇▇) ▇▇▇-▇▇▇▇
And with a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇
One Bay Plaza
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax #: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer: AMERICAN GENERAL HOSPITALITY OPERATING
PARTNERSHIP, L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, or
▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax #: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ & ▇▇▇▇▇, PLLC
5700 Nations Bank Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn ▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax #: (▇▇▇) ▇▇▇-▇▇▇▇
16. MISCELLANEOUS.
16.1 Time. Time is of the essence in the performance of each party's
----
obligation hereunder.
16.2 Attorneys' Fees. If any legal action, arbitration or other
---------------
proceeding is commenced to enforce or interpret any provision of this Agreement,
the prevailing party shall be entitled to an award of its attorneys' fees and
expenses.
16.3 No Waiver. No waiver by any party of the performance or
---------
satisfaction of any covenant or condition shall be valid unless in writing and
shall not be considered to be a waiver by such party of any other covenant or
condition hereunder.
16.4 Entire Agreement. This Agreement contains the entire agreement
----------------
between the parties regarding the Property and supersedes all prior agreements,
whether written or oral, between the parties regarding the same subject. This
Agreement may only be modified in writing.
16.5 Survival. The provisions of this Agreement shall not merge with
--------
the delivery of the Deed but shall, except as otherwise provided in this
Agreement, survive the Closing.
16.6 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the heirs, executors, administrators and successors and
assigns of Seller and Buyer; provided,
- 20 -
however, that Buyer shall not assign Buyer's rights and obligations pursuant to
this Agreement to any party without the prior written consent of Seller, which
consent shall not be unreasonably withheld.
16.7 Severability. In the case that any one or more of the
------------
provisions contained in this Agreement are for any reason held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
16.8 Purchase Price Allocation. Buyer and Seller agree to exert
-------------------------
their best efforts prior to Closing to agree on a mutual allocation of the
Purchase Price between Land, Improvements and Personal Property. In the event
that Buyer and Seller are unable to timely agree upon such allocation, Buyer and
Seller agree that no allocation shall be referenced in this Agreement or in any
other agreements or documents executed in connection with this Agreement.
16.9 1031 Exchange. Buyer agrees to reasonably cooperate with
-------------
Seller by executing such documents or taking such action as may be reasonably
required in connection with a tax free exchange pursuant to Section 1031 of the
Internal Revenue Code of 1986 as amended provided that (i) the transaction
contemplated by this Agreement shall not be conditioned upon completion of such
exchange; (ii) Buyer shall not be required to execute any agreements or to
acquire any property in connection with the exchange and shall not be required
to take title to any real property, other than the Property, in connection with
the exchange; (iii) any inconsistency between the provisions of any documents
executed in connection with the proposed exchange and the provisions of this
Agreement shall be governed by this Agreement; (iv) Buyer shall not incur any
liability or cost by reason of the exchange, and to the extent that any costs or
expenses (including reasonable attorneys fees) are incurred by Buyer, Seller
shall reimburse Buyer therefor on demand, and Seller shall indemnify, defend and
hold Buyer harmless from and against any or all obligations or liabilities or
losses incurred by Buyer solely relating to the exchange; (v) in no event shall
the Closing pursuant to this Agreement be delayed by Seller for more than twenty
(20) business days by reason of the exchange; and (vi) any and all
representations, warranties, agreements and covenants made by Seller pursuant to
this Agreement shall continue to be the obligation of Seller regardless of the
use of any intermediary in connection with the proposed tax free exchange.
16.10 Captions. Paragraph titles or captions contained in this
--------
Agreement are inserted as a matter of convenience only and for reference, and in
no way define, limit, extend or describe the scope of this Agreement.
16.11 Exhibits. All exhibits attached hereto shall be
--------
incorporated herein by reference as if set out herein in full.
16.12 Relationship of the Parties. The parties acknowledge that
---------------------------
neither party is an agent for the other party, and that neither party shall or
can bind or enter into agreements for the other party.
16.13 Governing Law. This Agreement and the legal relations
-------------
between the parties hereto shall be governed by and be construed in accordance
with the laws of the State of California.
16.14 Review by Counsel. The parties acknowledge that each party
-----------------
and its counsel have reviewed and approved this Agreement, and the parties
hereby agree that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the
- 21 -
interpretation of this Agreement or any amendments or exhibits hereto.
16.15 Confidentiality. The parties hereto shall not disclose any
---------------
of the material terms of this Agreement (except to the extent as may be required
by law or as required by the Title Company or the officers, directors, partners,
agents, and employees of the parties hereto or Buyer's attorney's, accountants
and securities agents in the ordinary course of business) without the prior
written consent of the other party.
16.16 Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall constitute an original. This Agreement shall
only be effective if a counterpart is signed by both Seller and Buyer.
16.17 Holiday Inns. The Property is currently subject to a
------------
Commitment Agreement to Issue a Holiday Inn License Agreement (the "Commitment
Agreement") with Holiday Inns Franchising, Inc. (the "Franchisor"). Effective
at Closing, Buyer will (i) execute a new License Agreement with the Franchisor,
or (ii) cause the Franchisor to cancel the existing Commitment Agreement. In
any such event, Buyer shall pay for all fees directly related to any termination
of the existing Commitment Agreement. In all events, Buyer shall pay any and
all fees or other costs of any kind whatsoever in connection with or related to
the execution of any new License Agreement with the Franchisor or with any other
franchisor in connection with the Property. Seller shall pay all sums arising
or accruing in connection with the Commitment Agreement (exclusive only of the
termination fees to be paid by Buyer as provided immediately above) prior to the
Closing. Prior to the Closing, Buyer shall deliver to Seller through escrow an
indemnification of Seller and its affiliates (the "Holiday Inn Indemnification")
from any liability under the existing Commitment Agreement accruing on or after
the Closing Date which Holiday Inn Indemnification shall be in a form reasonably
acceptable to Seller and Buyer.
16.18 Limitation on Claim. Notwithstanding any provision to the
-------------------
contrary contained in this Agreement, the period of time during which Buyer may
assert a claim against Seller by reason of a breach or an alleged breach of any
of the representations, warranties or covenants of Seller as made herein, shall
be limited to a period of one year following the date of Closing. In the event
that Buyer fails to give Seller written notice of any asserted claim prior to
the expiration of such period, then upon the expiration of such period Buyer
shall be deemed to have released Seller with respect to any such unasserted
claim. Further, no claim for breach of any representation or warranty of Seller
shall be actionable if the breach in question results from or is based on a
condition, state of facts or other matter which was known to Buyer prior to the
Closing.
16.19 Limitation on Liability. Notwithstanding any provision to
-----------------------
the contrary contained in this Agreement, if Closing occurs as contemplated by
this Agreement and the Property is sold from Seller to Buyer, the liability of
Seller in connection with any breach or alleged breach of the provisions of this
Agreement shall in all events be limited to an aggregate amount of One Million
Dollars ($1,000,000.00) and in no event whatsoever shall Seller be responsible
for or obligated to Buyer in connection with any breach of any provisions of
this Agreement, including without limitation, the provisions of Section 11.2 for
an aggregate amount in excess of such amount.
16.20 Union Agreement. Following the Closing Date, Buyer will
---------------
not, be obligated for any obligations accruing prior to the Closing Date with
respect to employees employed by Seller at the Property or with respect to union
contracts in effect with respect to the Property. Following the Closing Date,
however, Buyer will be obligated to enter into a new union contract with respect
to the Property. Further, following the Closing Date, Buyer shall be obligated
to hire (and maintain employed for a minimum period of ninety (90) days) all of
the union employees of Seller working at the Property immediately prior to the
Closing save and
- 22 -
except for only a maximum of ten (10) such union employees which Buyer may
decline to hire. Further, following the Closing Date, Buyer will not take any
action which would be construed as a "plant closing" or "mass layoff" as those
terms are defined in the WARN Act. All accrued salaries, wages, bonuses,
severance and other compensation, vacation, sick leave, workmen's compensation,
welfare benefits, deferred compensation, pension and profit sharing plan costs,
401(k) costs, and costs of other retirement plans, insurance benefits, and other
employee benefits of employees employed by Seller with respect to the Property
accrued as of 12:01 a.m. on the Closing Date shall remain the responsibility of
the Seller.
16.21 Liquor Licenses. Seller shall convey and assign its
---------------
alcoholic beverage, liquor, beer and/or wine licenses and/or permits with
respect to the Property (the "Liquor Licenses") to Buyer or its lessee or
management company at Closing as part of the licenses assigned to Buyer
hereunder. Buyer or its lessee or management company (hereinafter "Operator")
for the Property shall execute such forms, license applications and other
documents as may be necessary for the Operator to obtain all Liquor Licenses
necessary to operate any restaurants, bars and lounges presently located within
the Property, and Seller shall reasonably cooperate with the Operator in filing
such forms, applications and other documents. If such Liquor Licenses cannot be
obtained by Operator until after Closing, then Seller covenants and agrees that
Seller shall cooperate reasonably with Operator in keeping open the bars and
lounges and liquor facilities of the Property between the Closing and the time
when such Liquor Licenses are obtained by Operator, or a period not to exceed
sixty (60) days following the Closing Date, whichever is less (unless Operator
has during this time period following Closing diligently and continuously sought
to obtain such Liquor Licenses, in which event Operator shall have the right to
obtain an extension of such time period from Seller, not to exceed two (2)
thirty-day (30 day) extensions) by entering into a "Liquor License Agreement"
for the continued operation of and under the Liquor Licenses with respect to the
Property, mutually acceptable to Seller and Operator (and Buyer) in their
reasonable discretion, pursuant to which (i) Operator (and Buyer) shall
indemnify, defend and hold Seller harmless from any liability, damages, claims,
costs, penalties, losses or expenses (including reasonable attorney's fees)
encountered by Seller in connection with, arising out of, or growing from such
operations and the sale of alcoholic beverages at and form the restaurants, bars
and lounges located at the Property during said period of time, and (ii)
Operator shall reimburse Seller for Seller's costs in maintaining the Liquor
Licenses in full force and effect. In no event shall Seller be required to
obtain any additional liquor or alcoholic beverage licenses which Seller does
not possess at the time of Closing. Upon the occurrence of and following the
Closing, notwithstanding any provision to the contrary set forth in this
Agreement, Buyer shall be unconditionally and absolutely bound to acquire the
Liquor Licenses subject only to approval of the applicable governmental
agencies. In the event that the Operator (other than Buyer, if any) is unable
to obtain the necessary approvals of the applicable governmental agencies then
Buyer shall obtain such approvals or shall designate a new entity to serve as
operator in order to effect as soon as possible completion of the securing of
the necessary approvals. Notwithstanding any provision to the contrary
contained in this Agreement to the extent that the transfer of the Liquor
Licenses is processed through a separate escrow, then all matters to be
performed pursuant to the provisions of this Agreement in connection with the
Liquor Licenses shall be performed through such separate escrow, including
without limitation payment of the portion of the Purchase Price allocated to the
Liquor Licenses (i.e., $65,000) and delivery of such documentation as is
required in connection with transfer of the Liquor Licenses.
16.22 Gift Certificates. Seller and the Property, primarily for
-----------------
the reason of guest relations, have issued certain certificates which are valid
for future guest stays or free meals. Such certificates generally provide a
specific expiration date and provide that they are valid only on a basis of
"space available" and "not valid during special event times or holidays".
Seller estimates that with request to such certificates, the aggregate number of
room nights to be actually presented back to the Property will be approximately
forty (40)
- 23 -
room nights and fifteen (15) meals. Buyer agrees to honor such certificates
without charge to Seller. During the pendency of this Agreement, Seller agrees
not to issue any additional certificates.
16.23 Trade Scrip. In the ordinary course of business, Seller has
-----------
periodically issued trade scrip which is usable at the Property and/or Seller's
other hotels in exchange for goods and services received at the Property and/or
Seller's other hotels. All such trade scrip carries the legend: "In the event
that California Innkeepers should sell or lease any property listed on the
reverse, Scrip cannot be honored at that property thereafter." Following the
Closing, Buyer agrees not to honor any such trade scrip that may be presented to
the Property.
17. REMEDIES.
17.1 Buyer's Default. If Buyer breaches this Agreement which
---------------
default continues uncured for a period of ten (10) days after written notice
thereof to Buyer, and the transaction contemplated by this Agreement fails to
close by reason thereof, Seller shall be entitled to terminate this Agreement
and retain the amount of the Deposit plus any accrued interest thereon (the
"Specified Sum") as liquidated damages. SELLER AND BUYER ACKNOWLEDGE THAT
SELLER'S DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND AFTER NEGOTIATION THE
PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE
EFFECTIVE DATE, THE SPECIFIED SUM IS A REASONABLE ESTIMATE OF SELLER'S DAMAGES.
SELLER AND BUYER FURTHER AGREE THAT THIS SECTION IS INTENDED TO AND DOES
LIQUIDATE THE AMOUNT OF DAMAGES DUE SELLER, AND SHALL BE SELLER'S EXCLUSIVE
REMEDY AGAINST BUYER, BOTH AT LAW AND IN EQUITY ARISING FROM OR RELATED TO A
BREACH BY BUYER OF ITS OBLIGATIONS TO CONSUMMATE THE TRANSACTION CONTEMPLATED BY
THIS AGREEMENT. BY PLACING THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY
CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY
WAS REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF THIS LIQUIDATED
DAMAGES PROVISION.
--------------------------- -----------------------
Buyer's Initials Seller's Initials
17.2 Seller's Default. If Seller breaches this Agreement which
----------------
default continues uncured for a period of ten (10) days after written notice
thereof to Seller from Buyer, and the transaction contemplated by this Agreement
fails to close by reason thereof, then Buyer as its sole remedies, shall have
the right to any one of the following:
(a) Terminate this Agreement by written notice given to Seller
within fifteen (15) days of the expiration of said 10-day period, in which event
the Deposit shall be returned to Buyer by the Title Company; or
(b) Seek damages not to exceed an amount equal to the total amount
that Buyer has placed in escrow hereunder as the Deposit; or
(c) Seek specific performance of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
- 24 -
SELLER: BUYER:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, III AMERICAN GENERAL HOSPITALITY OPERATING
PARTNERSHIP, L.P.
a Delaware limited partnership
By: ________________________
By:_____________________________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Name:___________________________________
By: ________________________ Its:____________________________________
An original, fully executed copy of this Agreement, together with the Initial
Deposit, has been received by the Title Company's agent this _______________ day
of ________________, 1996, and by execution hereof the Title Company's
agent hereby covenants and agrees to be bound by the terms of this Agreement.
FIRST AMERICAN TITLE INSURANCE COMPANY
By:____________________________________________
Printed Name:__________________________________
Its:___________________________________________
- 25 -
LIST OF EXHIBITS
Exhibit 1.1.1 Legal Land Description
Exhibit 1.1.4 Schedule of Leases, Agreements and Contracts
Exhibit 6.7 Form of Estoppel Certificates
Exhibit 8.1.1 Form of Deed
Exhibit 8.1.2 Form of ▇▇▇▇ of Sale
Exhibit 8.1.3 Form of Assignment
Exhibit 8.3 Form of Tenant Notification Letter
Exhibit 11.3 List of Records, Documents and Other Materials (_____ pages)
The exhibits and/or schedules identified above which comprise a part of this
Exhibit 2.8 have not been included as part of this Exhibit. The Registrant
agrees to furnish supplementally a copy of any such omitted schedule or exhibit
upon request.
- 26 -
