AGREEMENT OF PURCHASE AND SALE between LEPERCQ ATLANTA RENAISSANCE PARTNERS, L.P., the SELLER and INTERSTATE ATLANTA AIRPORT, LLC, the BUYER Dated as of May 4, 2007 The Westin Atlanta Airport, City of College Park, Georgia
EXHIBIT 10.6
AGREEMENT OF PURCHASE AND SALE
between
LEPERCQ ATLANTA RENAISSANCE PARTNERS, L.P., the SELLER
and
INTERSTATE ATLANTA AIRPORT, LLC, the BUYER
Dated as of May 4, 0000
Xxx Xxxxxx Xxxxxxx Xxxxxxx, Xxxx of College Park, Georgia
TABLE OF CONTENTS
Page | ||||
ARTICLE I. DEFINITIONS |
1 | |||
SECTION 1.1 Defined Terms |
1 | |||
ARTICLE II. SALE, PURCHASE PRICE AND CLOSING |
7 | |||
SECTION 2.1 Sale of Asset |
7 | |||
SECTION 2.2 Purchase Price |
10 | |||
SECTION 2.3 Xxxxxxx Money |
11 | |||
SECTION 2.4 The Closing |
11 | |||
ARTICLE III. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER |
12 | |||
SECTION 3.1 General Seller Representations and Warranties |
12 | |||
SECTION 3.2 Representations and Warranties of the Seller as to the Asset |
14 | |||
SECTION 3.3 Limitations on Representations and Warranties of the Seller |
15 | |||
SECTION 3.4 Covenants of the Seller Prior to Closing |
15 | |||
SECTION 3.5 Amendment to Schedules |
17 | |||
17 | ||||
SECTION 4.1 Representations and Warranties of the Buyer |
17 | |||
SECTION 4.2 Covenants of the Buyer Prior to Closing |
19 | |||
SECTION 4.3 Employee Matters |
20 | |||
SECTION 4.4 Bookings |
21 | |||
SECTION 4.5 Franchise Agreement |
21 | |||
SECTION 4.6 Manager Defaults |
22 | |||
SECTION 4.7 Tax Clearance Certificates |
22 | |||
ARTICLE V. CONDITIONS PRECEDENT TO CLOSING |
23 | |||
SECTION 5.1 Conditions Precedent to the Seller’s Obligations |
23 | |||
SECTION 5.2 Conditions to the Buyer’s Obligations |
24 | |||
SECTION 5.3 Waiver of Conditions Precedent |
24 | |||
ARTICLE VI. CLOSING DELIVERIES |
24 | |||
SECTION 6.1 The Buyer Closing Deliveries |
24 | |||
SECTION 6.2 The Seller Closing Deliveries |
25 | |||
ARTICLE VII. INSPECTIONS; RELEASE |
27 | |||
SECTION 7.1 Right of Inspection |
27 | |||
SECTION 7.2 Examination; No Contingencies |
28 | |||
SECTION 7.3 RELEASE |
30 | |||
ARTICLE VIII. TITLE AND PERMITTED EXCEPTIONS |
31 | |||
SECTION 8.1 Title Insurance and Survey |
31 | |||
SECTION 8.2 Title Commitment; Survey |
31 | |||
SECTION 8.3 Delivery of Title |
32 | |||
SECTION 8.4 Cooperation |
33 |
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Page | ||||
ARTICLE IX. TRANSACTION COSTS; RISK OF LOSS |
33 | |||
SECTION 9.1 Transaction Costs |
33 | |||
SECTION 9.2 Risk of Loss |
33 | |||
ARTICLE X. ADJUSTMENTS |
34 | |||
SECTION 10.1 Adjustments |
34 | |||
SECTION 10.2 Re-Adjustment |
38 | |||
SECTION 10.3 Accounts Receivable |
38 | |||
ARTICLE XI. INDEMNIFICATION |
39 | |||
SECTION 11.1 Indemnification by the Seller |
39 | |||
SECTION 11.2 Indemnification by the Buyer |
39 | |||
SECTION 11.3 Limitations on Indemnification |
40 | |||
SECTION 11.4 Survival |
40 | |||
SECTION 11.5 Indemnification as Sole Remedy |
40 | |||
ARTICLE XII. DEFAULT AND TERMINATION |
41 | |||
SECTION 12.1 The Seller’s Termination |
41 | |||
SECTION 12.2 The Buyer’s Termination |
42 | |||
ARTICLE XIII. TAX CERTIORARI PROCEEDINGS |
42 | |||
SECTION 13.1 Prosecution and Settlement of Proceedings |
42 | |||
SECTION 13.2 Application of Refunds or Savings |
43 | |||
SECTION 13.3 Survival |
43 | |||
ARTICLE XIV. MISCELLANEOUS |
43 | |||
SECTION 14.1 Use of Blackstone Name and Address |
43 | |||
SECTION 14.2 Exculpation of the Seller |
43 | |||
SECTION 14.3 Brokers |
43 | |||
SECTION 14.4 Confidentiality; Press Release; IRS Reporting Requirements |
44 | |||
SECTION 14.5 Escrow Provisions |
45 | |||
SECTION 14.6 Successors and Assigns; No Third-Party Beneficiaries |
45 | |||
SECTION 14.7 Assignment |
46 | |||
SECTION 14.8 Further Assurances |
46 | |||
SECTION 14.9 Notices |
46 | |||
SECTION 14.10 Entire Agreement |
48 | |||
SECTION 14.11 Amendments |
48 | |||
SECTION 14.12 No Waiver |
48 | |||
SECTION 14.13 Governing Law |
48 | |||
SECTION 14.14 Intentionally Omitted |
48 | |||
SECTION 14.15 Severability |
48 | |||
SECTION 14.16 Section Headings |
48 | |||
SECTION 14.17 Counterparts |
48 | |||
SECTION 14.18 Acceptance of Deed |
48 | |||
SECTION 14.19 Construction |
48 | |||
SECTION 14.20 Recordation |
49 | |||
SECTION 14.21 WAIVER OF JURY TRIAL |
49 | |||
SECTION 14.22 Time is of the Essence |
49 | |||
SECTION 14.23 Bulk Sale; Occasional Sale |
49 |
ii
Schedules
Schedule A |
— | Land | ||
Schedule 1.1 |
— | Title Commitment | ||
Schedule 3.1(c) |
— | Consents | ||
Schedule 3.2(a) |
— | Operating Agreements | ||
Schedule 3.2(c) |
— | Tenant Leases | ||
Schedule 3.2(d) |
— | Brokerage Commissions | ||
Schedule 3.2(f) |
— | Litigation | ||
Schedule 3.2(g) |
— | Bookings |
Exhibits
Exhibit A |
— | Form of Assignment of Leases | ||
Exhibit B |
— | Form of Assignment of Contracts | ||
Exhibit C |
— | Form of Limited Warranty Deed | ||
Exhibit D |
— | Form of Xxxx of Sale | ||
Exhibit E |
— | Form of Assignment of Intangibles | ||
Exhibit F |
— | Form of FIRPTA Certificate | ||
Exhibit G |
— | Forms of Title Affidavits | ||
Exhibit H |
— | Form of Affidavit | ||
Exhibit I |
— | Form of Broker’s Lien Waiver | ||
Exhibit J |
— | Form of Buyer’s Update Certificate of Representations | ||
Exhibit K |
— | Form of Seller’s Update Certificate of Representations | ||
Exhibit L |
— | Form of Quitclaim Deed |
iii
AGREEMENT OF PURCHASE AND SALE
AGREEMENT OF PURCHASE AND SALE (this “Agreement”), made as of the 4th day of May, 2007
between LEPERCQ ATLANTA RENAISSANCE PARTNERS, L.P., a Delaware limited partnership (the
“Seller”), and INTERSTATE ATLANTA AIRPORT, LLC, a Delaware limited liability company (the
“Buyer”).
A. The Seller is the owner of the land more particularly described in Schedule A
attached hereto (the “Land”). The Seller is also the owner of the hotel facility located
on the Land having an address at 0000 Xxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, and commonly known as the
“Westin Atlanta Airport” (the “Hotel”). The Land and the Hotel (including without
limitation Seller’s interest in all improvements and structures constituting real property located
on, over or under the Land) shall be referred to herein, collectively, as the “Property”;
the Property and the Asset-Related Property (as defined below) shall be referred to herein as the
“Asset”.
B. The Seller desires to sell to the Buyer, and the Buyer desires to purchase from the Seller,
the Asset on the terms and conditions hereinafter set forth.
ARTICLE I.
DEFINITIONS
SECTION 1.1 Defined Terms. The capitalized terms used herein will have the following meanings.
“Accounts Receivable” means all amounts which the Seller is entitled to receive from
the operation of the Hotel, but are not paid, as of the Closing, including, without limitation,
charges for the use or occupancy of any guest, conference, meeting or banquet rooms or other
facilities at the Hotel, or any other goods or services provided by or on behalf of the Seller at
the Hotel, but expressly excluding any credit card charges and checks which the Seller has
submitted for payment as of the Closing.
“Agreement” shall mean this Agreement of Purchase and Sale, together with the exhibits
and schedules attached hereto, as the same may be amended, restated, supplemented or otherwise
modified.
“Allocation” shall have the meaning assigned thereto in subsection 2.2(c).
1
“Anti-Money Laundering and Anti-Terrorism Laws” shall have the meaning assigned
thereto in subsection 3.1(f)(i).
“Asset” shall have the meaning assigned thereto in “Background” paragraph A.
“Asset File” shall mean the materials with respect to the Asset previously delivered
to the Buyer or its representatives by or on behalf of the Seller or made available to the Buyer at
the Property or in Manager’s possession.
“Asset-Related Property” shall have the meaning assigned thereto in subsection 2.1(b).
“Assigned Accounts Receivable” shall have the meaning assigned thereto in subsection
10.3(b)(i).
“Assignment of Contracts” shall have the meaning assigned thereto in subsection
6.1(a)(ii).
“Assignment of Intangibles” shall have the meaning assigned thereto in subsection
6.2(a)(v).
“Assignment of Leases” shall have the meaning assigned thereto in subsection
6.1(a)(i).
“Basket Limitation” shall mean an amount equal to $150,000.
“Xxxx of Sale” shall have the meaning assigned thereto in subsection 6.2(a)(ii).
“Bookings” shall have the meaning assigned thereto in subsection 2.1(b)(viii).
“Books and Records” shall have the meaning assigned thereto in subsection 2.1(b)(xvi).
“Broker” shall mean Xxxxxx Xxxx Xxxxxxx, Inc.
“Business Day” shall mean any day other than a Saturday, Sunday or other day on which
banks are authorized or required by law to be closed in New York City, New York.
“Buyer” shall have the meaning assigned thereto in the Preamble to this Agreement.
“Buyer-Related Entities” shall have the meaning assigned thereto in Section 11.1.
“Buyer’s Knowledge” shall mean the actual knowledge of the Buyer based upon the actual
knowledge of Xxxxxx Xx, Xxxxx Xxx and Xxxxxxxxxxx Xxxxxxx without any duty on the part of such
Person to conduct any independent investigation or make any inquiry of any Person.
“Buyer Waived Breach” shall have the meaning assigned thereto in 11.3.
2
“Cap Limitation” shall mean an amount equal to $3,000,000.
“Claims” shall have the meaning assigned thereto in Section 7.3.
“Closing” shall have the meaning assigned thereto in subsection 2.4(a).
“Closing Date” shall have the meaning assigned thereto in subsection 2.4(a).
“Closing Documents” shall mean any certificate, assignment, instrument or other
document delivered pursuant to this Agreement.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute. Any reference herein to a particular provision of the Code shall mean, where
appropriate, the corresponding provision in any successor statute.
“Condition of the Asset” shall have the meaning assigned thereto in subsection 7.2(b).
“Cut-Off Time” shall have the meaning assigned thereto in subsection 10.1.
“Deed” shall have the meaning assigned thereto in subsection 6.2(a)(i).
“Xxxxxxx Money” shall have the meaning assigned thereto in subsection 2.3(a).
“Employees” shall mean, at any time, all persons who are employed by the Seller or
Manager (whether on a full-time or part-time basis) at the Hotel at such time to operate the Hotel.
“Environmental Laws” shall have the meaning assigned thereto in subsection 3.2(h).
“Equipment Leases” shall have the meaning assigned thereto in subsection 2.1(b)(vii).
“Escrow Account” shall have the meaning assigned thereto in subsection 14.5(a).
“Escrow Agent” shall have the meaning assigned thereto in subsection 2.3(a).
“Executive Order” shall have the meaning assigned thereto in subsection 3.1(f)(i).
“Existing Survey” shall mean that certain survey of the Property prepared by Xxxx Xxx
Consulting Engineering Associates, Inc., dated March 31, 1983, last revised September 19, 1996.
“Extension Option” shall have the meaning assigned thereto in subsection 2.4(b).
“FIRPTA” shall have the meaning assigned thereto in subsection 6.2(a)(vii).
“Financing Liens” shall have the meaning assigned thereto in subsection 8.3(a).
3
“FF&E” shall have the meaning assigned thereto in subsection 2.1(b)(ii).
“Franchise Agreement” shall mean that certain License Agreement, dated June 1, 2006,
with Effective Date of May 2, 2006, by and between Franchisor and the Seller.
“Franchisor” shall mean Westin Hotel Management, L.P.
“Georgia Residency Affidavits” shall have the meaning assigned thereto in subsection
6.2(a)(xii).
“Governmental Authority” shall mean any federal, state or local government or other
political subdivision thereof, including, without limitation, any agency or entity exercising
executive, legislative, judicial, regulatory or administrative governmental powers or functions, in
each case to the extent the same has jurisdiction over the Person or property in question.
“Government List” shall mean any of (i) the two lists maintained by the United States
Department of Commerce (Denied Persons and Entities), (ii) the list maintained by the United States
Department of Treasury (Specially Designated Nationals and Blocked Persons), and (iii) the two
lists maintained by the United States Department of State (Terrorist Organizations and Debarred
Parties).
“Guest Ledger” means any and all charges accrued to the open accounts of any guests or
customers at the Hotel as of the Cut-Off Time for the use and occupancy of any guest, conference,
meeting or banquet rooms or other facilities at the Hotel, any restaurant, bar or banquet services,
or any other goods or services provided by or on behalf of the Seller.
“Hazardous Materials” shall have the meaning assigned thereto in subsection 7.2(b)(i).
“Hotel” shall have the meaning assigned thereto in “Background” paragraph A.
“Intangible Property” shall have the meaning assigned thereto in subsection
2.1(b)(xiii).
“Inventories” shall have the meaning assigned thereto in subsection 2.1(b)(xi).
“IRS” shall mean the Internal Revenue Service.
“IRS Reporting Requirements” shall have the meaning assigned thereto in subsection
14.4(c).
“Land” shall have the meaning assigned thereto in “Background” paragraph A.
“Licenses and Permits” shall have the meaning assigned thereto in subsection
2.1(b)(iii).
“Liquor Holder” shall mean Interstate Management Company.
4
“Liquor Authorities” shall have the meaning assigned thereto in subsection
4.2(a)(iii).
“Liquor License” shall mean the liquor license(s) in effect with respect to the
Property.
“Losses” shall have the meaning assigned thereto in Section 11.1.
“Management Agreement” shall mean that certain Hotel Management Agreement, which is
dated as of January 1,2001 between MeriStar Hotel Lessee, Inc. and Manager, as assigned to the
Seller pursuant to that certain Assignment and Assumption Agreement dated as of May 2, 2006 among
MeriStar Hotel Lessee, Inc., the Seller and MeriStar Hospitality Operating Partnership, L.P.
pursuant to which Manager is to provide management and other services with respect to the Property.
“Manager” shall mean Interstate Management Company L.L.C., successor in interest to
MeriStar Management Company, L.L.C.
“Material Casualty” shall have the meaning assigned thereto in subsection 9.2(b).
“Material Condemnation” shall have the meaning assigned thereto in subsection 9.2(b).
“Miscellaneous Personal Property” shall have the meaning assigned thereto in
subsection 2.1(b)(xv).
“Natural Hazard Expert” shall have the meaning assigned thereto in subsection 7.4(b).
“Operating Agreements” shall mean all maintenance, service and supply contracts,
management agreements, credit card service agreements, booking and reservation agreements, and all
other contracts and agreements which are held by the Seller in connection with the operation of the
Hotel, other than the Franchise Agreement, the Management Agreement, Tenant Leases, Equipment
Leases, the Bookings and Licenses and Permits.
“Outside Closing Date” shall have the meaning assigned thereto in subsection 4.5(b).
“Permitted Exceptions” shall mean (i) the items set forth in Schedule B, Part 1, items
1 (subject to the Seller’s and the Buyer’s proration obligations under subsection 10.1(a)), 2, 3
(but limited to only those Tenant Leases as contemplated under clause (iii) below), 4, 5, 6, 7, 8,
9, 10, 11 and 12 in the Title Commitment, (ii) the matters shown on the Existing Survey, (iii) the
Tenant Leases set forth in Schedule 3.2(c) attached hereto and the Operating Agreements and
any Tenant Leases, Operating Agreements or other contracts entered into after the date hereof, and
in accordance with the terms of this Agreement, (iv) discrepancies, conflicts in boundary lines,
shortages in area, encroachments and any other state of facts as disclosed on a new survey of the
property that were not shown on the Existing Survey and that do not have a material adverse effect
on the use or value of the Property, (v) subject to the adjustments provided for herein, any
5
service, installation, connection or maintenance charge, and charges for sewer, water,
electricity, telephone, cable television or gas first due from and after the Cut-Off Time, (vi)
rights of tenants to remove trade fixtures at the expiration of the term of the Tenant Leases of
such tenants to the extent set forth in the applicable Tenant Lease, (vii) right of tenants as
tenants only under the Tenant Leases permitted in clause (iii) above, (viii) laws, regulations,
resolutions or ordinances, including, without limitation, building, zoning and environmental
protection, as to the use, occupancy, subdivision, development, conversion or redevelopment of the
Property currently or hereinafter imposed by any governmental or quasi governmental body or
authority, and (ix) any title exception which is waived by the Buyer pursuant to subsection 8.3(b).
“Person” shall mean a natural person, partnership, limited partnership, limited
liability company, corporation, trust, estate, association, unincorporated association or other
entity.
“Post Effective Date Monetary Encumbrance” shall have the meaning assigned thereto in
subsection 8.3(c).
“Post Effective Date Seller Encumbrance” shall have the meaning assigned thereto in
subsection 8.3(a).
“Property” shall have the meaning assigned thereto in “Background” paragraph A.
“Property and Equipment” shall have the meaning assigned thereto in subsection
2.1(b)(x).
“Purchase Price” shall have the meaning assigned thereto in subsection 2.2(a).
“Releasees” shall have the meaning assigned thereto in Section 7.3.
“Reporting Person” shall have the meaning assigned thereto in subsection 14.4(c).
“Retail Merchandise” shall have the meaning assigned thereto in subsection
2.1(b)(xii).
“Retained Accounts Receivable” shall have the meaning assigned thereto in subsection
10.3(b)(ii)
“Seller” shall have the meaning assigned thereto in the Preamble to this Agreement.
“Seller-Related Entities” shall have the meaning assigned thereto in Section 11.2.
“Seller’s Knowledge” shall mean the actual knowledge of the Seller based upon the
actual knowledge of Xxxxxx Xxxxxx, Xxxxx Xxxxx and Xxxxxxx Xxxxxx without any duty on the part of
such Persons to conduct any independent investigation or make any inquiry of any Person.
“Survival Period” shall have the meaning assigned thereto in Section 11.4.
6
“Tax Clearance Certificates” shall have the meaning assigned thereto in Section
4.7(a).
“Tax Liens” shall have the meaning assigned thereto in subsection 8.3(a).
“Tenant Leases” shall have the meaning assigned thereto in subsection 2.1(b)(vi).
“Termination Option” shall have the meaning assigned thereto in subsection 4.5(b).
“Title Company” shall mean Lawyers Title Insurance Corporation.
“Title Commitment” shall mean that certain Owners Pro Forma title report issued by
Lawyers Title Insurance Corporation referred to as File No. 07-018170 and attached hereto as
Schedule 1.1.
“Title Policy” shall mean a standard form ALTA Owner’s Policy of Title Insurance
without endorsements issued by the Title Company pursuant to the Title Commitment insuring the
Buyer’s title to the Property subject only to the Permitted Exceptions in an amount equal to the
Purchase Price.
“Trade Payables” shall have the meaning assigned thereto in subsection 10.1(k).
“Transferred Employees” shall have the meaning assigned thereto in subsection 4.3(b).
“UCC” shall mean the Uniform Commercial Code.
“Uniform System of Accounts” shall have the meaning assigned thereto in subsection
2.1(b)(x).
“WARN Act” means the Worker’s Adjustment and Retraining Notification Act of 1988, 29
U.S.C. § 2101, et seq., and any similar state and local applicable law, as amended
from time to time, and any regulations, rules and guidance issued pursuant thereto.
ARTICLE II.
SALE, PURCHASE PRICE AND CLOSING
SECTION 2.1 Sale of Asset.
(a) On the Closing Date and pursuant to the terms and subject to the conditions set forth in
this Agreement, the Seller shall sell to the Buyer, and the Buyer shall purchase from the Seller,
the Asset.
7
(b) The transfer of the Asset to the Buyer shall include the transfer of all Asset-Related
Property. For purposes of this Agreement, “Asset-Related Property” shall mean the
following:
(i) all of the Seller’s right, title and interest in and to all easements,
covenants and other rights appurtenant to the Land and all right, title and interest
of the Seller, if any, in and to any (A) land lying in the bed of any street, road,
avenue or alley, open or closed, in front of or adjoining the Land and to the center
line thereof, and (B) unpaid award or payment which may hereafter be payable with
respect to any taking by condemnation;
(ii) all furniture, furnishings, fixtures, vehicles, rugs, mats, carpeting,
appliances, devices, engines, telephone and other communications equipment,
televisions and other video equipment, plumbing fixtures and other equipment, and
all other equipment and other personal property which are now, or may hereafter
prior to the Closing Date be, placed in or on or attached to the Property and are
used in connection with the operation of the Property (but not including items owned
or leased by tenants or which are leased under the Equipment Leases by the Seller or
Manager) (the “FF&E”);
(iii) all of the Seller’s right, title and interest in and to and to the extent
transferable under applicable law, all licenses, permits and authorizations
presently issued in connection with the operation of all or any part of the Property
as it is presently being operated, other than the existing Liquor License (the
“Licenses and Permits”);
(iv) all of the Seller’s right, title and interest in and to and to the extent
assignable, all warranties, if any, issued to the Seller by any manufacturer or
contractor in connection with construction or installation of equipment or any
component of the improvements included as part of the Property or FF&E;
(v) all of the Seller’s right, title and interest in and to and to the extent
assignable all Operating Agreements;
(vi) all of the Seller’s right, title and interest in and to all leases,
subleases, licenses, contracts and other agreements, granting a real property
interest to any other Person (including without limitation, any usufruct) for the
use and occupancy of all or any part of the Property, other than the Bookings (the
“Tenant Leases”) and all security and escrow deposits or other security held
by or for the benefit of, or granted to the Seller in connection with, such Tenant
Leases;
(vii) all of the Seller’s right, title and interest in and to all leases and
purchase money security agreements for any equipment, machinery, vehicles, furniture
or other personal property located at the Hotel and used in the operation of the
Hotel which are held by or on behalf of the Seller (the “Equipment Leases”),
together with all deposits made thereunder;
8
(viii) all of the Seller’s right, title and interest in and to all bookings and
reservations for guest, conference, meeting and banquet rooms or other facilities at
the Hotel for dates from and after the Closing Date (the “Bookings”),
together with all deposits held by the Seller with respect thereto;
(ix) all of the Seller’s right, title and interest in and to all Assigned
Accounts Receivable as set forth in Section 10.3;
(x) all items included within the definition of “Property and Equipment” under
the Uniform System of Accounts for the Lodging Industry, Ninth Revised Edition, as
published by the Hotel Association of New York City, Inc. (the “Uniform System
of Accounts”) and used in the operation of the Hotel, including, without
limitation, linen, china, glassware, tableware, uniforms and similar items
(“Property and Equipment”);
(xi) all “Inventories” as defined in the Uniform System of Accounts and used in
the operation of the Hotel, such as provisions in storerooms, refrigerators,
pantries, and kitchens, beverages in wine cellars and bars, other merchandise
intended for sale or resale, fuel, mechanical supplies, stationery, guest supplies,
maintenance and housekeeping supplies and other expensed supplies and similar items
and including all food and beverages which are located at the Hotel, or ordered for
future use at the Hotel as of the Closing, but expressly excluding any alcoholic
beverages to the extent the sale or transfer of the same is not permitted under
applicable law (the “Inventories”);
(xii) all merchandise located at the Hotel and held for sale to guests and
customers of the Hotel, or ordered for future sale at the Hotel as of the Cut-Off
Time, but not including any such merchandise owned by any tenant at the Property or
by Manager (“Retail Merchandise”);
(xiii) all of the Seller’s right, title and interest in and to and to the
extent the Seller’s rights and interests therein are assignable, all names,
tradenames, trademarks, service marks, logos, and other similar proprietary rights
and all registrations or applications for registration of such rights used by the
Seller in the operation of the Hotel (the “Intangible Property”);
(xiv) any ownership right Seller or any of its affiliates may have, if any,
with respect to the Liquor License;
(xv) all of the Seller’s right, title and interest in and to and to the extent
not included in subsection 2.1(b)(ii) above and to the extent owned by the Seller,
the Hotel’s telephone numbers, printed marketing materials and any slides, proofs or
drawings used by the Seller to produce such materials, to the extent such slides,
proofs or drawings are in the Seller’s possession (“Miscellaneous Personal
Property”); and
(xvi) to the extent in the Seller’s possession or control, all surveys,
architectural, consulting and engineering blueprints, plans and specifications and
9
reports, if any, related to the Hotel, all books and records, if any, related
to the Hotel (collectively, “Books and Records”), and any goodwill of the
Seller related to the Hotel; provided, however, that the Seller may
retain a copy of all such books and records.
(c) Excluded Property. Notwithstanding anything to the contrary in Section 2.1(a) and
(b), the property, assets, rights and interests set forth in this subsection 2.1(c) are expressly
excluded from the Asset:
(i) Cash. Except for deposits expressly included in subsections 2.1(a)
and (b) and except for any cash on hand or in house banks for which the Seller
receives a credit under subsection 10.1(l), all cash on hand or on deposit in any
house bank, operating account or other account maintained in connection with the
ownership of the Hotel, including, without limitation, any reserves maintained by
the Seller or Manager required by the Management Agreement (subject to subsection
10.1(l)); and
(ii) Third Party Property. Any fixtures, personal property or
equipment owned by (A) the lessor under any Equipment Leases, (B) the supplier or
vendor under any other Operating Agreements, (C) the tenant under any Tenant Lease,
(D) any Employees, (E) Manager or (F) any guests or customers of the Hotel,
including, without limitation, those items set forth on Schedule 2.1(c) attached
hereto.
SECTION 2.2 Purchase Price.
(a) The consideration for the purchase of the Asset shall be $74,000,000 (the “Purchase
Price”), which shall be paid by the Buyer to the Seller at the Closing in immediately available
funds by wire transfer to such accounts or accounts that the Seller shall designate to the Buyer;
provided that such amount shall be reduced by the Xxxxxxx Money and adjusted for Closing
adjustments and credits provided for in Article X and elsewhere in the Agreement.
(b) No adjustment shall be made to the Purchase Price except as explicitly set forth in this
Agreement.
(c) The Seller and the Buyer agree that the Purchase Price shall be allocated among the Assets
as determined by agreement of the parties prior to the Closing for federal, state and local tax
purposes in accordance with Section 1060 of the Code. The Buyer shall, within 10 days after the
date of this Agreement, prepare and deliver to the Seller for its review a schedule allocating the
Purchase Price (and any other items that are required for federal income tax purposes to be treated
as part of the purchase price) among the Assets (such schedule, the “Allocation”). The Seller
shall review such Allocation and provide any objections to the Buyer within 10 days after the
receipt thereof. If the Seller raises any objection to the Allocation, the parties hereto will
negotiate in good faith to resolve such objection(s). Upon reaching an agreement on the
Allocation, the Buyer and the Seller shall (i) cooperate in the filing of any forms (including Form
8594 under Section 1060 of the Code) with respect to the Allocation as finally resolved, including
any amendments to such forms required pursuant to this Agreement
10
with respect to any adjustment to the Purchase Price and (ii) shall file all federal, state
and local tax returns and related tax documents consistent with such allocation, as the same may be
adjusted pursuant to Section 9.1 or any other provisions of this Agreement. Notwithstanding the
foregoing, if, after negotiating in good faith, the parties hereto are unable to agree on a
mutually satisfactory Allocation, each of the Buyer and the Seller shall use its own allocation for
purposes of this subsection 2.2(c).
SECTION 2.3 Xxxxxxx Money.
(a) On the date hereof, the Buyer shall deposit with the Title Company, as escrow agent (in
such capacity, “Escrow Agent”), cash in an amount equal to $4,100,000 (together with all
accrued interest thereon, the “Xxxxxxx Money”) in immediately available funds by wire to
such account as Escrow Agent shall designate to the Buyer. The Xxxxxxx Money shall be
nonrefundable to the Buyer except as otherwise expressly provided in this Agreement. If the
Xxxxxxx Money is not deposited by the Buyer by 5:00 p.m. (New York Time) on the date of this
Agreement, the Seller shall have the right, in the Seller’s sole and absolute discretion, upon
written notice to the Buyer delivered prior to the Buyer’s deposit of the Xxxxxxx Money with the
Title Company, to terminate this Agreement whereupon neither party hereto shall have any further
rights or obligations hereunder except for those that expressly survive the termination of this
Agreement.
(b) Upon delivery by the Buyer to Escrow Agent and upon receipt of an executed form W-9, the
Xxxxxxx Money will be deposited by Escrow Agent in an interest-bearing account acceptable to the
Buyer and the Seller and shall be held in escrow in accordance with the provisions of Section 14.5.
All interest earned on the Xxxxxxx Money while held by Escrow Agent shall be paid to the party to
whom the Xxxxxxx Money is paid, except that if the Closing occurs, the Buyer shall receive a credit
for such interest in accordance with subsection 2.2(a).
SECTION 2.4 The Closing.
(a) The closing of the sale and purchase of the Asset (the “Closing”) shall take place
on June 4, 2007 (such date, the “Closing Date”), Time Being Of The Essence with respect to
the Buyer’s and the Seller’s obligations hereunder on the Closing Date, subject only to the rights
to adjourn the Closing Date as is expressly permitted in this Agreement.
(b) The Buyer shall have the right to extend the Closing Date (as it may have otherwise been
extended in accordance with Section 4.5) for up to 15 days (the “Extension Option”) in
accordance with the terms of this subsection 2.4(b). In order to exercise the Extension Option,
the Buyer must deliver written notice to the Seller and Escrow Agent of such extension no later
than two Business Days prior to the then scheduled Closing Date. Notwithstanding the provisions of
this subsection 2.4(b), the parties agree and acknowledge that in no event shall the Buyer have the
right to extend the Closing Date under this subsection 2.4(b) beyond the Outside Closing Date. If
the Closing Date is extended under any other provision of this Agreement, the length of the
Extension Option shall be reduced accordingly so that the Closing Date shall not be extended under
this subsection 2.4(b) beyond the Outside Closing Date.
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(c) The Closing shall be held on the Closing Date at 10:00 A.M. (Eastern time) at the offices
of the Escrow Agent or at such other location agreed upon by the parties hereto.
(d) Notwithstanding any other provision herein to the contrary, there shall be no requirement
that the Seller and the Buyer physically attend the Closing, and all funds and documents to be
delivered at the Closing may be delivered to Escrow Agent unless the parties hereto mutually agree
otherwise. The Buyer and the Seller hereby authorize their respective attorneys to execute and
deliver to Escrow Agent any additional or supplementary instructions as may be necessary or
convenient to implement the terms of this Agreement and facilitate the closing of the transactions
contemplated hereby, provided that such instructions are consistent with and merely supplement this
Agreement and shall not in any way modify, amend or supersede this Agreement.
ARTICLE III.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER
SECTION 3.1 General Seller Representations and Warranties. The Seller hereby represents and warrants
to the Buyer as follows:
(a) Formation; Existence. It is a limited partnership, duly formed, validly existing
and in good standing under the laws of the State of Delaware and the State of Georgia.
(b) Power and Authority. It has all requisite power and authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement, the sale of the Assets and the
consummation of the transactions provided for in this Agreement have been duly authorized by all
necessary action on its part. This Agreement has been duly executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights and by general principles of equity (whether
applied in a proceeding at law or in equity).
(c) No Consents. Except as set forth in Schedule 3.1(c), no consent, license,
approval, order, permit or authorization of, or registration, filing or declaration with, any
court, administrative agency or commission or other Governmental Authority or instrumentality,
domestic or foreign, is required to be obtained or made in connection with the execution, delivery
and performance of this Agreement or any of the transactions required or contemplated hereby.
(d) No Conflicts. The execution, delivery and compliance with, and performance of the
terms and provisions of, this Agreement, and the sale of the Asset, will not (i) conflict with or
result in any violation of its organizational documents, (ii) conflict with or result in any
violation of any provision of any bond, note or other instrument of indebtedness, contract,
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to
12
which it is a party in its individual capacity, or (iii) violate any existing term or
provision of any order, writ, judgment, injunction, decree, statute, law, rule or regulation
applicable to it or its assets or properties.
(e) Foreign Person. It is not a “foreign person” as defined in Internal Revenue Code
Section 1445 and the regulations issued thereunder.
(f) Anti-Terrorism Laws.
(i) None of the Seller or, to Seller’s Knowledge, its affiliates, is in
violation of any laws relating to terrorism, money laundering or the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Action of 2001, Public Law 107-56 and Executive Order No. 13224
(Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to
Commit, or Support Terrorism) (the “Executive Order”) (collectively, the
“Anti-Money Laundering and Anti-Terrorism Laws”).
(ii) None of the Seller or, to Seller’s Knowledge, its affiliates, is acting,
directly or indirectly, on behalf of terrorists, terrorist organizations or
narcotics traffickers, including those persons or entities that appear on the Annex
to the Executive Order, or are included on any relevant lists maintained by the
Office of Foreign Assets Control of U.S. Department of Treasury, U.S. Department of
State, or other U.S. government agencies, all as may be amended from time to time.
(iii) None of the Seller or, to Seller’s Knowledge, its affiliates or, without
inquiry, any of its brokers or other agents, in any capacity in connection with the
purchase of the Property (A) conducts any business or engages in making or receiving
any contribution of funds, goods or services to or for the benefit of any person
included in the lists set forth in the preceding paragraph; (B) deals in, or
otherwise engages in any transaction relating to, any property or interests in
property blocked pursuant to the Executive Order; or (C) engages in or conspires to
engage in any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Money Laundering and Anti-Terrorism Laws.
(iv) The Seller understands and acknowledges that the Buyer may become subject
to further anti-money laundering regulations, and agrees to execute instruments,
provide information, or perform any other acts as may reasonably be requested by the
Buyer, for the purpose of: (A) carrying out due diligence as may be required by
applicable law to establish the Seller’s identity and source of funds; (B)
maintaining records of such identities and sources of funds, or verifications or
certifications as to the same; and (C) taking any other actions as may be required
to comply with and remain in compliance with anti-money laundering regulations
applicable to the Seller.
13
(v) Neither the Seller, nor any person controlling or controlled by the Seller,
is a country, territory, individual or entity named on a Government List, and the
monies used in connection with this Agreement and amounts committed with respect
thereto, were not and are not derived from any activities that contravene any
applicable anti-money laundering or anti-bribery laws and regulations (including
funds being derived from any person, entity, country or territory on a Government
List or engaged in any unlawful activity defined under Title 18 of the United States
Code, Section 1956(c)(7)).
SECTION 3.2 Representations and Warranties of the Seller as to the Asset. The Seller hereby represents
and warrants to the Buyer as follows:
(a) Operating Agreements. To Seller’s Knowledge, (i) all material Operating
Agreements (and any amendments or modification thereof) affecting the Property as of the date
hereof are set forth on Schedule 3.2(a) attached hereto, (ii) the same have not been
modified or amended, except as shown in such documents, (iii) all material Operating Agreements are
in full force and effect, (iv) the Seller has delivered to the Buyer true and complete copies of
each material Operating Agreement to the extent in the Seller’s possession and (v) there are no
material defaults by any party under any material Operating Agreement.
(b) Employees. The Seller does not have any employees. The Seller is not a party to
any collective bargaining agreement or other contract or agreement with any labor organization.
The Seller has not entered into any agreements with any Employees except through Manager.
(c) Tenant Leases and Equipment Leases. To Seller’s Knowledge, Schedule
3.2(c) sets forth a correct and complete list of the Tenant Leases and all material Equipment
Leases for the Hotel as of the date hereof. Except as set forth in Schedule 3.2(c), as of
the date hereof, (i) to Seller’s Knowledge, all material Equipment Leases and Tenant Leases are in
full force and effect and the Seller has delivered to the Buyer true and complete copies of all
material Equipment Leases and Tenant Leases to the extent in the Seller’s possession, and (ii) the
Seller has not given or, to Seller’s Knowledge, received any written notice of any breach or
default under any of the Tenant Leases or Equipment Leases that has not been cured.
(d) Brokerage Commissions. To Seller’s Knowledge, there are no unpaid brokerage
commissions or finders’ fees payable by the landlord with respect to the current or any renewal
term of any of the Tenant Leases other than those set forth on Schedule 3.2(d) attached
hereto and the Seller has no agreement with any broker with respect to any renewal term of any
Tenant Lease except as set forth in Schedule 3.2(d).
(e) Condemnation. As of the date hereof, there is no pending condemnation or similar
proceedings affecting the Property, and to Seller’s Knowledge, no such action is threatened or
contemplated.
(f) Litigation. To Seller’s Knowledge and except as disclosed in Schedule
3.2(f) attached hereto, as of the date hereof, there are no actions, suits or proceedings
pending against or affecting the Asset or the Seller in any court or before or by an arbitration
14
tribunal
or regulatory commission, department or agency and to Seller’s Knowledge, no such actions, suits
or proceedings has been threatened or contemplated.
(g) Bookings. To Seller’s Knowledge, Schedule 3.2(g) sets forth a correct list
of all Bookings for the Hotel as of the date hereof.
(h) Environmental Matters. The Seller has not received any written notice from any
governmental or regulatory authority of a violation of any applicable Environmental Laws, which
have not been corrected. For the purposes of this subsection 3.2(h), “Environmental Laws”
means any and all federal, state, county and local statutes, laws, regulations and rules in effect
on the date of this Agreement relating to the protection of the environment or to the use,
transportation and disposal of Hazardous Materials.
(i) Title to Personal Property. Other than FF&E, Property and Equipment, Retail
Merchandise and Inventories covered by an Equipment Lease or as it relates to the rights, if any,
of Franchisor under the Franchise Agreement therein, the Seller shall own the FF&E, Property and
Equipment, Retail Merchandise and Inventories free and clear of all liens and encumbrances as of
the Closing Date.
(j) Franchise Agreement. The Seller has delivered to the Buyer a true and complete
copy of the Franchise Agreement. To Seller’s Knowledge, (i) the Franchise Agreement is in full
force and effect and (ii) there are no material defaults by any party thereunder as of the date
hereof.
(k) Violation of Law. The Seller has not received any written notice from any
governmental or regulatory authority of a violation of any applicable material law within the past
two years, which have not been remedied.
(l) Liquor Holder. To Seller’s Knowledge, the Liquor Holder is the holder of the
Liquor License and Seller has taken and will take no action which would cause such interest to be
encumbered as of the Closing.
SECTION 3.3 Limitations on Representations and Warranties of the Seller. If the representations and
warranties relating to the Operating Agreements set forth in Section 3.2 and the status of the
contract parties thereunder (other than the Seller or its affiliates) contained herein were true
and correct as of the date of this Agreement, no change in circumstances or status of such contract
party (e.g., defaults, bankruptcies or other adverse matters relating to such contract party)
occurring after the date hereof shall permit the Buyer to terminate this Agreement or constitute
grounds for the Buyer’s failure to close.
SECTION 3.4 Covenants of the Seller Prior to Closing. From the date hereof until Closing or earlier
termination of this Agreement, the Seller or the Seller’s agents shall:
(a) Insurance. Keep the Property insured against fire and other hazards in coverage,
amounts and deductibles not materially less than those in effect as of the date of this Agreement
and otherwise under such terms as the Seller deems advisable consistent with past practices.
15
(b) New Operating Agreements. Without the prior written consent of the Buyer, which
consent shall not be unreasonably withheld or delayed, not enter into any Operating Agreements or
Equipment Leases, or renew, amend or supplement any such contracts; provided that the Seller may
enter into or renew such contracts, or amend or supplement such contracts, without the Buyer’s
consent if such contract is entered into (or renewed, amended, or supplemented, as the case may be)
in the course of customary maintenance and repairs at the Property, or is necessary as a result of
an emergency at the Property and in either case, is terminable on 30 days or less notice, without
penalty. If the Seller enters into or renews any such contracts, or amends or supplements any such
contracts, after the date of this Agreement, then the Seller shall promptly provide written notice
and a copy thereof to the Buyer and unless the same required the Buyer’s approval pursuant to this
paragraph and such approval was not obtained, the Buyer shall assume such contract at Closing and
the schedule of contracts attached to the Assignment of Contracts shall be so modified, and such
contract shall be deemed added to Schedule 3.2(a) attached hereto and Schedule
3.2(a) shall be deemed amended at the Closing to include such contracts. If a new contract, or
a renewal, amendment or supplement to an existing contract, requires the Buyer’s approval or Seller
otherwise requests Buyer’s approval and the Buyer does not object within seven days after receipt
of a copy of such contract, then the Buyer shall be deemed to have approved such contract. The
Seller shall observe and perform all of its material obligations under the material Operating
Agreements and Equipment Leases excluding any such agreements which may be terminated in the
ordinary course of the operation of the Hotel or as a result of a default by the other party.
(c) New Tenant Leases. Without the prior consent of the Buyer, not execute any new
lease, or renew, amend or supplement any existing lease (unless required by the terms thereof), for
space at the Property. If the Buyer’s approval was obtained on a new lease or the renewal,
amendment or supplement of an existing lease, the Buyer shall assume such lease at Closing and the
schedule of leases attached to the Assignment of Leases shall be so modified, and such lease shall
be deemed added to Schedule 3.2(c) attached hereto and Schedule 3.2(c) shall be
deemed amended at the Closing to include such leases. If the Buyer does not object within seven
days after receipt of a copy of a request for approval of a new lease, or to the renewal, amendment
or supplement of an existing lease (unless required by the terms thereof), then the Buyer shall be
deemed to have approved such new lease, renewal, amendment or supplement, as the case may be.
(d) Franchise Agreement. Observe and perform all of its material obligations under
the Franchise Agreement. Without the prior consent of the Buyer, the Seller shall not amend,
supplement or terminate the Franchise Agreement.
(e) Assets. Shall not sell, exchange, assign, transfer, convey or otherwise dispose
of all or any of the Asset or any interest therein except for any FF&E, Inventories, Retail
Merchandise, Miscellaneous Personal Property or Property and Equipment that are sold, replaced or
consumed in the ordinary course of business and shall, to the extent within the Seller’s control
under the Management Agreement, maintain levels of Inventory and Property and Equipment in a manner
substantially consistent with the Seller’s customary operating practices and historical practice at
the Property.
16
(f) Operation. Shall, to the extent within the Seller’s control under the Management
Agreement, continue to operate and maintain the Hotel in substantially the same manner in which it
is being operated and maintained as of the date hereof, provided that, except for emergency
repairs, the Seller shall not perform any capital improvements at the Hotel including, without
limitation, any capital improvements or expenditures as may be contemplated by the existing capital
expenditure budget for the Hotel.
(g) Management Agreement. At or prior to the Closing, the Seller shall terminate (and
the Buyer shall cause the Manager to terminate without payment of any termination fee, termination
penalty or termination damages being payable by Seller or its affiliates) the Management Agreement
effective as of the Cut-Off Time.
SECTION 3.5 Amendment to Schedules. Notwithstanding anything to the contrary in this Agreement, the
Seller shall have the right to amend and supplement the schedules to this Agreement from time to
time prior to the Closing to reflect changes since the date of this Agreement by providing a
written copy of such amendment or supplement to the Buyer; provided, however, that
any amendment or supplement to the schedules to this Agreement shall have no effect for the
purposes of determining whether subsection 5.2(a) has been satisfied if the matter raised in such
supplement has a material adverse effect on the Asset, but shall have effect only for the purposes
of limiting the defense and indemnification obligations of the Seller for the inaccuracy or untruth
of the representation or warranty qualified by such amendment or supplement.
ARTICLE IV.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BUYER
SECTION 4.1 Representations and Warranties of the Buyer. The Buyer hereby represents and warrants to
the Seller as follows:
(a) Formation; Existence. It is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) Power; Authority. It has all requisite power and authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement, the purchase of the Asset and
the consummation of the transactions provided for herein have been duly authorized by all necessary
action on the part of the Buyer. This Agreement has been duly executed and delivered by the Buyer
and constitutes the legal, valid and binding obligation of the Buyer enforceable against the Buyer
in accordance with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights and by general
principles of equity (whether applied in a proceeding at law or in equity).
(c) No Consents. No consent, license, approval, order, permit or authorization of, or
registration, filing or declaration with, any court, administrative agency or commission or
17
other Governmental Authority or instrumentality, domestic or foreign, is required to be
obtained or made in connection with the execution, delivery and performance of this Agreement or
any of the transactions required or contemplated hereby.
(d) No Conflicts. The execution, delivery and compliance with, and performance of the
terms and provisions of, this Agreement, and the purchase of the Asset, will not (i) conflict with
or result in any violation of its organizational documents, (ii) conflict with or result in any
violation of any provision of any bond, note or other instrument of indebtedness, contract,
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which
it is a party in its individual capacity, or (iii) violate any existing term or provision of any
order, writ, judgment, injunction, decree, statute, law, rule or regulation applicable to it or its
assets or properties.
(e) Anti-Terrorism Laws.
(i) None of the Buyer or, to the Buyer’s Knowledge, its affiliates, is in
violation of the Executive Order or any Anti-Money Laundering and Anti-Terrorism
Law.
(ii) None of the Buyer or, to the Buyer’s Knowledge, its affiliates, is acting,
directly or indirectly, on behalf of terrorists, terrorist organizations or
narcotics traffickers, including those persons or entities that appear on the Annex
to the Executive Order, or are included on any relevant lists maintained by the
Office of Foreign Assets Control of U.S. Department of Treasury, U.S. Department of
State, or other U.S. government agencies, all as may be amended from time to time.
(iii) None of the Buyer or, to the Buyer’s Knowledge, its affiliates or,
without inquiry, any of its brokers or other agents, in any capacity in connection
with the purchase of the Property (A) conducts any business or engages in making or
receiving any contribution of funds, goods or services to or for the benefit of any
person included in the lists set forth in the preceding paragraph; (B) deals in, or
otherwise engages in any transaction relating to, any property or interests in
property blocked pursuant to the Executive Order; or (C) engages in or conspires to
engage in any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Money Laundering and Anti-Terrorism Laws.
(iv) The Buyer understands and acknowledges that the Seller may become subject
to further anti-money laundering regulations, and agrees to execute instruments,
provide information, or perform any other acts as may reasonably be requested by the
Seller, for the purpose of: (A) carrying out due diligence as may be required by
applicable law to establish the Buyer’s identity and source of funds; (B)
maintaining records of such identities and sources of funds, or verifications or
certifications as to the same; and (C) taking any other actions as may be required
to comply with and remain in compliance with anti-money laundering regulations
applicable to the Buyer.
18
(v) Neither the Buyer, nor any person controlling or controlled by the Buyer,
is a country, territory, individual or entity named on a Government List, and the
monies used in connection with this Agreement and amounts committed with respect
thereto, were not and are not derived from any activities that contravene any
applicable anti-money laundering or anti-bribery laws and regulations (including
funds being derived from any person, entity, country or territory on a Government
List or engaged in any unlawful activity defined under Title 18 of the United States
Code, Section 1956(c)(7)).
SECTION 4.2 Covenants of the Buyer Prior to Closing.
(a) Licenses and Permits.
(i) The Buyer shall use all commercially reasonable and good faith efforts to
obtain the transfer of all Licenses and Permits (to the extent transferable) or the
issuance of new licenses and permits. The Buyer, at its cost and expense, shall
submit all necessary applications and other materials to the appropriate
Governmental Authority and take such other actions to effect the transfer of
Licenses and Permits or issuance of new licenses and permits, as of the Closing, and
the Seller shall use commercially reasonable efforts (at no cost or expense to the
Seller) to cooperate with the Buyer to cause the Licenses and Permits to be
transferred or new licenses and permits to be issued to the Buyer. It shall not be
a condition to the Closing hereunder that the Buyer has obtained any transfer of
Licenses or Permits or issuance of any new licenses or permits.
(ii) Intentionally Omitted.
(iii) The Seller and the Buyer acknowledge and agree that the Liquor Licensee
is currently an affiliate of the Buyer, and that any interest, beneficial or
otherwise, which the Seller may have in the Liquor License is being conveyed to the
Buyer as part of the Asset-Related Property. Promptly after the date hereof, the
Buyer shall (and to the extent required by law, the Seller shall at no material cost
or expense to Seller) execute and file with the appropriate state and/or local
alcoholic beverage agency and any other Governmental Authority that maintains
jurisdiction over liquor-related matters at the Hotel (the “Liquor
Authorities”) such filings, if any, as may be required by law to be filed by the
Seller and/or the Buyer with respect to the Liquor License in connection with the
transactions set forth in this Agreement. Notwithstanding anything to the contrary
contained herein, the Seller shall not incur any material cost or expense or any
liability in connection with the transfer of the Liquor License to the Buyer and no
representations or warranties shall be made by the Seller or its affiliates as to
such conveyance, except for any representations and warranties specifically set
forth herein. Without limitation on the foregoing, in no event shall the transfer
or assignment of the Liquor License be deemed or construed to be a condition to the
obligations of either the Seller or the Buyer hereunder.
19
(b) Operating Agreements and Equipment Leases. To the extent any Operating Agreement
or Equipment Lease requires the consent of the vendor party for the assignment of such agreements
from the Seller to the Buyer, the Buyer shall use commercially reasonable good faith efforts to
obtain such consent as of the Closing, provided, in any event the Buyer shall assume all
Operating Agreements and Equipment Leases as of the Closing even if such consent has not been
obtained.
SECTION 4.3 Employee Matters.
(a) Employees. The Buyer acknowledges that the Employees are currently employed by an
affiliate of the Buyer. At the Closing, the Buyer shall (or shall cause its manager to) offer
employment at the Hotel to all of the Employees in accordance with the terms of subsection 4.3(b).
(b) Continuity of Employees. The parties intend that there will be continuity of
employment with respect to all of the Employees. It is agreed that prior to, or in connection
with, the Closing, the Buyer shall take no action to cause the Seller or Manager to terminate the
employment of any Employee, and neither the Seller nor the Manager shall be under any obligation to
terminate any Employee prior to or on the Closing Date. It is further agreed that on or prior to
the Closing Date, the Buyer shall offer employment at the Hotel (or cause its manager to continue
employment of), commencing on the Closing Date to all Employees, including those on vacation, leave
of absence, disability or layoff, on the same terms and conditions (including, without limitation,
compensation, salary, employee benefits, job responsibility and descriptions, location, seniority
and deemed length of service) as those provided to such employees by Manager on the day immediately
preceding the Closing Date. Those Employees who accept the Buyer’s (or its manager’s) offer of
employment and commence (or continue) employment with the Buyer (or its manager) on the Closing
Date shall hereafter be referred to as “Transferred Employees.”
(c) Indemnity. The Seller shall pay all wages, payroll taxes and fringe benefits
(including accrued vacation pay to the extent actually earned) as well as social security,
unemployment compensation, health, life and disability insurance and pension fund contributions, if
any, of the Employees through the Closing Date, provided, that, the Seller shall have no liability
or obligation to pay for any sick pay or accrued but unearned vacation pay. The Seller shall
indemnify, defend and hold the Buyer harmless from and against any and all claims, actions, suits,
demands, proceedings, losses, expenses, damages, obligations and liabilities (including costs of
collection, attorney’s fees and other costs of defense) made by an Employee to the extent relating
to an event occurring prior to or an obligation relating to a period prior to the Closing Date,
provided that such indemnity shall not apply with respect to any losses incurred by the Buyer with
respect to the amount of employee expenses that have been prorated under subsection 10.1(m) or such
matters for which Manager would be liable to the Seller under the Management Agreement. The Buyer
shall indemnify, defend and hold the Seller harmless from and against any and all claims, actions,
suits, demands, proceedings, losses, expenses, damages, obligations and liabilities (including
costs of collection, attorney’s fees and other costs of defense) arising out of or otherwise in
respect of (i) the termination of any Employees in connection with the transactions contemplated by
this Agreement; (ii) failure of the Buyer (or its manager) to continue the employment of any
Transferred Employee on the same terms and
20
conditions as said employee enjoys on the day immediately preceding the Closing Date; (iii) a
breach by the Buyer of the covenants set forth in subsection 4.3(b); (iv) failure of the Buyer to
comply with its obligations including, but not limited to, any statutory obligations with respect
to the Transferred Employees; (v) any claim made by any Employee for severance pay; or (vi) any
claim made by any Employee arising with respect to acts or omissions at the Property which acts or
omissions occurred on or after the Closing Date.
(d) WARN Act. The Buyer (or its manager) shall not, at any time prior to 90 days
after the Closing Date, effectuate a “plant closing” or “mass layoff,” as those terms are defined
in the WARN Act, affecting in whole or in part any site of employment, facility, operating unit or
Employee, without notifying the Seller in advance and without complying with the notice
requirements and other provisions of the WARN Act. In addition, the Buyer shall provide a full
defense to, and indemnify the Seller for any Losses which the Seller may incur in connection with
any suit or claim of violation brought against or affecting the Seller under the WARN Act for any
actions taken by the Buyer (or its manager or any of its and Manager’s affiliates) with regard to
the Hotel or any Employee affected by this Agreement subsequent to the Closing Date.
(e) Survival. The provisions of this Section 4.3 shall survive the Closing.
SECTION
4.4 Bookings. The Buyer shall honor all existing Bookings and all other Bookings made in
accordance with this Agreement for any period on or after the Closing Date. The provisions of this
Section 4.4 shall survive the Closing.
SECTION 4.5 Franchise Agreement.
(a) The parties acknowledge that the transfer of the franchise rights granted under the
Franchise Agreement to the Buyer is subject to the prior written consent of Franchisor under the
Franchise Agreement. Immediately following the date of this Agreement, (i) the Seller shall
proceed promptly and in good faith to give the notices required under the Franchise Agreement with
respect to the transactions contemplated hereby and (ii) the Buyer shall proceed promptly and in
good faith to effect the consent of Franchisor to the transfer of such franchise rights to the
Buyer, which may require the execution of a new franchise agreement with Franchisor. Accordingly,
the Buyer shall promptly submit to Franchisor a complete application to become a franchisee of
Franchisor’s franchise system accompanied by payment of the applicable application fee. As part of
the application process, the Buyer shall provide any and all information and documentation that
Franchisor requires (including, without limitation, financial statements, organizational documents,
background information regarding the owners of the Buyer and other documentation supporting its
application). Without limiting the foregoing, the Buyer shall use commercially reasonable efforts
to obtain the consent of the Franchisor to the transfer of the franchise rights and a new franchise
agreement in place of the Franchise Agreement, which may entail promptly responding to requests
from Franchisor and otherwise promptly complying with all obligations of a transferee under the
Franchise Agreement. The Seller agrees to reasonably cooperate, at no cost, in good faith with the
Buyer and Franchisor in such process. The Buyer shall agree with Franchisor to accept and be bound
by any property improvement plan required by Franchisor in connection with obtaining such consent
(which may consist of the property improvement plan currently incorporated into the Franchise
Agreement,
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and to complete such property improvement plan within the time periods set forth in such
property improvement plan. In connection with the transfer of the franchise rights, the Buyer
shall be required to pay any and all fees and charges associated therewith (including, without
limitation, any transfer fee mandated under the Franchise Agreement).
(b) If Franchisor has not agreed to terminate the Franchise Agreement and enter into a new
franchise agreement with the Buyer by the then scheduled Closing Date, the Closing Date shall be
extended to a date that is the earlier of (i) ten Business Days after receipt of such agreement and
(ii) July 3, 2007 (the “Outside Closing Date”). In the event Franchisor has not delivered
such new franchise agreement by the Outside Closing Date, the Buyer and the Seller shall each have
the option to terminate this Agreement by written notice to the other party (the “Termination
Option”). In the event the Termination Option is elected by either the Seller or the Buyer,
this Agreement shall terminate and provided the Buyer is not in default of any of its obligations
pursuant to subsection 4.5(a) or otherwise, the Xxxxxxx Money shall be refunded to the Buyer and
neither party shall have any further rights or obligations hereunder except for those that
expressly survive the termination of this Agreement.
SECTION 4.6 Manager Defaults. The Buyer acknowledges that an affiliate of the Buyer is Manager and
that the Buyer is knowledgeable about the Asset. Notwithstanding anything to the contrary
contained herein, (a) the Buyer agrees that the Seller shall have no liability under this Agreement
for a breach hereof, including without limitation, any breach under Sections 3.2 and 3.4, to the
extent such breach was caused by an act or omission of Manager (other than such acts taken by
Manager at the specific direction of the Seller) and any such act or omission shall not serve as a
basis for the Buyer failing to close on the purchase of the Assets in accordance with the terms of
this Agreement or any recourse against the Seller and (b) to the extent Manager has actual
knowledge of any inaccuracy or breach of any representation or warranty of the Seller contained in
this Agreement, such knowledge shall be imputed to the Buyer and the Buyer shall be precluded from
asserting a failure of the condition set forth in subsection 5.2(a) related thereto as it relates
to the representations and warranties made by the Seller in this Agreement as of the date hereof
(but not as the same are re-made as of the Closing pursuant to this Agreement). The provisions of
this Section 4.6 shall survive the Closing.
SECTION 4.7 Tax Clearance Certificates
(a) The Seller shall promptly after the execution of this Agreement file the Application for
Tax Clearance Certification, Georgia Department of Revenue, Taxpayer Services Division, Form
TSD-10, in order to apply for, and shall thereafter use commercially reasonable efforts to obtain
and deliver to the Buyer and the Title Company on or prior to the Closing, municipal, state and
county tax clearance certificates or letters demonstrating the payment of all tax liabilities
which, if unpaid, could impose successor liability on the Buyer (“Tax Clearance
Certificates”). To the extent the Seller is unable to deliver such Tax Certificates on or
prior to the Closing, the Seller shall use commercially reasonable efforts to obtain such
certificates as soon as practicable following the Closing. The Seller shall be liable for the
payment of all amounts which may be required to be paid to obtain all Tax Clearance Certificates.
The Seller shall indemnify, defend and hold the Buyer harmless from and against (x) any and all
amounts which may be required to be paid to obtain all Tax Clearance Certificates and (y) any
claims or other liabilities arising out of the Seller’s failure to obtain all such Tax Clearance
Certificates, each to
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the extent due with respect to the operation of the Hotel prior to the Closing. The
provisions of this subsection 4.7(a) shall survive the Closing.
(b) The Buyer acknowledges and agrees that the delivery of the Tax Clearance Certificates by
the Seller pursuant to this Section 4.7 or any matters disclosed therein shall not be a condition
precedent to the obligation of the Buyer to purchase and pay for the Asset in accordance with the
terms of this Agreement. Notwithstanding the foregoing, to the extent such matters are raised as
exceptions to the Title Policy, the Seller shall deliver such affidavits or indemnities as
reasonably required by the Title Company to omit such matters from the Title Policy.
ARTICLE V.
CONDITIONS PRECEDENT TO CLOSING
SECTION 5.1 Conditions Precedent to the Seller’s Obligations. The obligation of the Seller to
consummate the transfer of the Asset to the Buyer on the Closing Date is subject to the
satisfaction (or waiver by the Seller) as of the Closing of the following conditions:
(a) Each of the representations and warranties made by the Buyer in this Agreement shall be
true and correct in all material respects when made and on and as of the Closing Date as though
such representations and warranties were made on and as of the Closing Date, subject to any changes
permitted pursuant to this Agreement.
(b) The Buyer shall have performed or complied in all material respects with each obligation
and covenant required by this Agreement to be performed or complied with by the Buyer on or before
the Closing.
(c) No order or injunction of any court or administrative agency of competent jurisdiction nor
any statute, rule, regulation or executive order promulgated by any Governmental Authority of
competent jurisdiction shall be in effect as of the Closing which restrains or prohibits the
transfer of the Asset or the consummation of any other transaction contemplated hereby.
(d) The Seller shall have received all of the documents required to be delivered by the Buyer
under subsection 6.1(a).
(e) The Seller shall have received the Purchase Price in accordance with subsection 2.2(a) and
all other amounts due to the Seller from the Buyer hereunder.
(f) The Seller shall have received evidence that (i) Franchisor has consented to the transfer
of the franchise rights associated with the Franchise Agreement in accordance with subsection
4.5(a), and (ii) the Seller and any affiliates thereof have been released by Franchisor pursuant to
such release as contemplated by the Franchise Agreement.
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(g) Manager shall have agreed to the termination of the Management Agreement without any
termination fee, penalty or damages being payable by Seller or its affiliates.
SECTION 5.2 Conditions to the Buyer’s Obligations. The obligation of the Buyer to purchase and pay for
the Asset is subject to the satisfaction (or waiver by the Buyer) as of the Closing of the
following conditions:
(a) Each of the representations and warranties made by the Seller in this Agreement shall be
true and correct in all material respects when made and on and as of the Closing Date as though
such representations and warranties were made on and as of Closing Date subject to (i) the Seller’s
right to cure the same prior to the Closing as expressly provided in this Agreement, (ii) any
changes permitted pursuant to this Agreement, and (iii) any changes relating to matters arising
after the date hereof in connection with the representations and warranties as set forth in
subsections 3.2(e) and 3.2(g).
(b) The Seller shall have performed or complied in all material respects with each obligation
and covenant required by this Agreement to be performed or complied with by the Seller on or before
the Closing.
(c) No order or injunction of any court or administrative agency of competent jurisdiction nor
any statute, rule, regulation or executive order promulgated by any Governmental Authority of
competent jurisdiction shall be in effect as of the Closing which restrains or prohibits the
transfer of the Asset or the consummation of any other transaction contemplated hereby.
(d) Title to the Property shall be delivered to the Buyer in the manner required under Section
8.1.
(e) The Buyer shall have received all of the documents required to be delivered by the Seller
under Section 6.2, and all of the consents set forth on Schedule 3.1(c) shall have been
obtained.
(f) Franchisor shall have issued a new franchise agreement to the Buyer in accordance with
Section 4.5(a).
SECTION 5.3 Waiver of Conditions Precedent. The Closing shall constitute conclusive evidence that the
Seller and the Buyer have respectively waived any conditions which are not satisfied as of the
Closing.
ARTICLE VI.
CLOSING DELIVERIES
SECTION 6.1 The Buyer Closing Deliveries.
The Buyer shall deliver the following documents at Closing:
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(a) with respect to the Asset:
(i) an assignment and assumption of the Seller’s interest in the Tenant Leases
(an “Assignment of Leases”) duly executed by the Buyer in substantially the
form of Exhibit A attached hereto;
(ii) an assignment and assumption of the Operating Agreements, Equipment Leases
and Bookings (an “Assignment of Contracts”) duly executed by the Buyer in
substantially the form of Exhibit B attached hereto; and
(iii) a certificate of Buyer, substantially in the form of Exhibit J
(the “Buyer’s Representation Certificate”) that the representations and
warranties of Buyer set forth in Section 4.1 hereof are true and correct in all
material respects as of the Closing Date, subject to changes occurring in accordance
with this Agreement disclosed in such certificate.
(b) with respect to the transactions contemplated hereunder:
(i) a duly executed and sworn officer’s certificate from the Buyer (or the
general partner or managing member of the Buyer, where appropriate) certifying that
the Buyer has taken all necessary action to authorize the execution of all documents
being delivered hereunder and the consummation of all of the transactions
contemplated hereby and that such authorization has not been revoked, modified or
amended;
(ii) an executed and acknowledged incumbency certificate from the Buyer (or the
general partner or managing member of the Buyer, where appropriate) certifying the
authority of the officers of the Buyer (or the general partner or managing member of
the Buyer, where appropriate) to execute this Agreement and the other documents
delivered by the Buyer to the Seller at the Closing;
(iii) all transfer tax returns which are required by law and the regulations
issued pursuant thereto in connection with the payment of all state or local real
property transfer taxes that are payable or arise as a result of the consummation of
the transactions contemplated by this Agreement, in each case, as prepared and
approved by the Seller and the Buyer and duly executed by the Buyer;
(iv) an affidavit of the Buyer regarding commercial real estate brokers, in the
form attached as Exhibit H hereto; and
(v) a closing statement prepared and approved by the Seller and the Buyer,
consistent with the terms of this Agreement.
SECTION 6.2 The Seller Closing Deliveries.
The Seller shall deliver the following documents at Closing:
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(a) with respect to the Asset:
(i) a limited warranty deed (a “Deed”) in substantially the form of
Exhibit C attached hereto and in recordable form in Georgia, duly executed and
acknowledged by the Seller, and if the legal description of the Land drawn from any
new boundary line survey of the Land prepared by Buyer differs from the legal
description contained on Schedule A hereto, then, if requested by the Buyer and in
addition to the Deed, Seller shall execute and deliver a quitclaim deed in the form
of Exhibit L attached hereto based on the legal description drawn from the new
survey of the Land prepared for Buyer;
(ii) a xxxx of sale (a “Xxxx of Sale”) duly executed by the Seller in
substantially the form of Exhibit D attached hereto, transferring the FF&E,
Property and Equipment, Inventories, Retail Merchandise, Books and Records,
Miscellaneous Personal Property and Accounts Receivable to the Buyer;
(iii) the Assignment of Leases duly executed by the Seller, together with a
copies, and if available, originals of the Tenant Leases referred to in such
assignment;
(iv) the Assignment of Contracts duly executed by the Seller, together with
copies, and if available, originals of all contracts and agreements assigned
thereby;
(v) a general assignment of the Licenses and Permits and Intangible Property
(the “Assignment of Intangibles”) duly executed by the Seller in
substantially the form of Exhibit E attached hereto;
(vi) all keys and keycards in the Seller’s possession and security and access
codes to the Property;
(vii) an affidavit that the Seller is not a “foreign person” within the meaning
of the Foreign Investment in Real Property Tax Act of 1980, as amended, in
substantially the form of Exhibit F attached hereto (the “FIRPTA”);
(viii) a closing statement prepared and approved by the Seller and the Buyer,
consistent with the terms of this Agreement;
(ix) all Books and Records and receipts in the Seller’s possession relating to
the ownership, operating and management of the Hotel;
(x) the title affidavits and documents referred to in Section 8.4;
(xi) evidence reasonably acceptable to the Title Company, to the extent
required, of the termination of the Management Agreement;
(xii) affidavits or certifications required to exempt Seller from the State of
Georgia withholding tax, and the Georgia State withholding tax requirements
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on non-residents contained in O.C.G.A. §48-7-128 and the regulations
promulgated thereunder, or if Seller is not exempt from such withholding tax
requirements, Buyer shall be permitted to withhold from the Purchase Price paid to
Seller such amounts as are required to be withheld pursuant to such statute and
regulations, and Seller shall deliver to Buyer such standard form affidavits or
certificates as are required to determine the amount to be withheld (all such
affidavits or certificates delivered to Buyer pursuant to this subsection, the
“Georgia Residency Affidavits”);
(xiii) an affidavit of the Seller regarding commercial real estate brokers, in
the form of Exhibit H attached hereto; and
(xiv) a certificate of Seller substantially in the form of Exhibit K
(“Seller’s Representation Certificate”) that the representations and
warranties of Seller set forth in Sections 3.1 and 3.2 hereof are true and correct
in all material respects as of the Closing Date subject to changes occurring in
accordance with this Agreement disclosed in such certificate.
(b) with respect to the transactions contemplated hereunder:
(i) a duly executed and sworn officer’s certificate from the general partner of
the Seller certifying that the Seller has taken all necessary action to authorize
the execution of all documents being delivered hereunder and the consummation of all
of the transactions contemplated hereby and that such authorization has not been
revoked, modified or amended;
(ii) an executed and acknowledged incumbency certificate from the general
partner of the Seller certifying the authority of the officers of the general
partner of the Seller to execute this Agreement and the other documents delivered by
the Seller to the Buyer at the Closing;
(iii) intentionally omitted
(iv) all transfer tax returns which are required by law and the regulations
issued pursuant thereto that are required as a result of the consummation of the
transactions contemplated by this Agreement, in each case, as prepared and approved
by the Seller and the Buyer and duly executed by the Seller.
ARTICLE VII.
INSPECTIONS; RELEASE
SECTION 7.1 Right of Inspection. Prior to the Closing, the Buyer and its agents shall have the right,
upon reasonable prior written notice to the Seller (which shall in any event be at least 24 hours
in advance) and at the Buyer’s sole cost, risk and expense, to inspect the Property during business
hours, provided that any such inspection shall not unreasonably impede the
27
normal day to day business operation of the Property, and provided further that the Seller shall be
entitled to accompany the Buyer and its agents on such inspection. Notwithstanding the foregoing,
the Buyer shall not have the right to do any invasive testing of the Property without the prior
written consent of the Seller which may be granted or denied in the Seller’s sole and absolute
discretion. The Seller shall be entitled to accompany the Buyer and its agents on any such
permitted interviews and testing. The Buyer’s right of inspection of the Property shall be subject
to the rights of the tenants and Hotel guests and the rights of Manager under the Management
Agreement. Prior to any such inspection, the Buyer shall deliver to the Seller certificates
reasonably satisfactory to the Seller evidencing that the Buyer’s consultants and agents carry and
maintain such general liability insurance policies with such companies and in such scope and
amounts as are acceptable to the Seller in its reasonable discretion, in all cases naming the
Seller as an additional insured and loss payee thereunder. The Buyer hereby indemnifies and agrees
to defend and hold the Seller harmless from and against all loss, cost (including, without
limitation, reasonable attorneys’ fees), claim or damage arising out of, resulting from relating to
or in connection with or from any such inspection by the Buyer or its agents, except to the extent
such claim or damage was caused solely by the Seller or the Seller’s agents. The provisions of
this Section 7.1 shall survive the Closing and any termination of this Agreement. Notwithstanding
the foregoing rights to inspect, the Buyer acknowledges that there is no “due diligence period” or
“due diligence termination right” in this Agreement and the Buyer does not have the right to
terminate this Agreement based on the results of such inspections other than pursuant to an express
termination right set forth in this Agreement.
SECTION 7.2 Examination; No Contingencies.
(a) Before entering into this Agreement, the Buyer has made such examination of the Asset and
all other matters affecting or relating to the transactions contemplated hereunder as the Buyer has
deemed necessary. In entering into this Agreement, the Buyer has not been induced by and has not
relied upon any written or oral representations, warranties or statements, whether express or
implied, made by the Seller or any partner of the Seller, or any affiliate, agent, employee, or
other representative of any of the foregoing or by any broker or any other person representing or
purporting to represent the Seller with respect to the Asset, the Condition of the Asset or any
other matter affecting or relating to the transactions contemplated hereby, other than those
expressly set forth in this Agreement or in the Closing Documents. The Buyer’s obligations under
this Agreement shall not be subject to any contingencies, diligence or conditions except as
expressly set forth in this Agreement or in the Closing Documents. The Buyer acknowledges and
agrees that, except as expressly set forth herein or in the Closing Documents, the Seller makes no
representations or warranties whatsoever, whether express or implied or arising by operation of
law, with respect to the Asset or the Condition of the Asset. THE BUYER AGREES THAT THE ASSET WILL
BE SOLD AND CONVEYED TO (AND ACCEPTED BY) THE BUYER AT THE CLOSING IN THE THEN EXISTING CONDITION
OF THE ASSET, AS IS, WHERE IS, WITH ALL FAULTS, AND WITHOUT ANY WRITTEN OR VERBAL REPRESENTATIONS
OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED OR ARISING BY OPERATION OF LAW, OTHER THAN AS
EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE CLOSING DOCUMENTS. Without limiting the generality
of the foregoing, except as set forth in this Agreement or in the Closing Documents, the
transactions contemplated by this Agreement are without statutory, express or implied warranty,
representation, agreement, statement or
28
expression of opinion of or with respect to the Condition of the Asset or any aspect thereof,
including, without limitation, (i) any and all statutory, express or implied representations or
warranties related to the suitability for habitation, merchantability, or fitness for a particular
purpose, (ii) any statutory, express or implied representations or warranties created by any
affirmation of fact or promise, by any description of the Asset or by operation of law and (iii)
all other statutory, express or implied representations or warranties by the Seller whatsoever.
The Buyer acknowledges that the Buyer has knowledge and expertise in financial and business matters
that enable the Buyer to evaluate the merits and risks of the transactions contemplated by this
Agreement.
(b) For purposes of this Agreement, the term “Condition of the Asset” means the
following matters:
(i) Physical Condition of the Property. The quality, nature and
adequacy of the physical condition of the Property, including, without limitation,
the quality of the design, labor and materials used to construct the improvements
included in the Property; the condition of structural elements, foundations, roofs,
glass, mechanical, plumbing, electrical, HVAC, sewage, and utility components and
systems; the capacity or availability of sewer, water, or other utilities; the
geology, flora, fauna, soils, subsurface conditions, groundwater, landscaping, and
irrigation of or with respect to the Property, the location of the Property in or
near any special taxing district, flood hazard zone, wetlands area, protected
habitat, geological fault or subsidence zone, hazardous waste disposal or clean-up
site, or other special area, the existence, location, or condition of ingress,
egress, access, and parking; the condition of the personal property and any
fixtures; and the presence of any asbestos or other Hazardous Materials, dangerous,
or toxic substance, material or waste in, on, under or about the Property and the
improvements located thereon. “Hazardous Materials” means (A) those
substances included within the definitions of any one or more of the terms
“hazardous substances,” “toxic pollutants”, “hazardous materials”, “toxic
substances”, and “hazardous waste” in the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (as amended), the Hazardous
Materials Transportation Act, as amended, 49 U.S.C. Sections 1801 et seq., the
Resource Conservation and Recovery Act of 1976 as amended, 42 U.S.C. Section 6901 et
seq., Section 311 of the Clean Water Act, 15 U.S.C. § 2601 et seq., 33 U.S.C. §
1251 et seq., 42 U.S.C. 7401 et seq. and the regulations and publications issued
under any such laws, (B) petroleum, radon gas, lead based paint, asbestos or
asbestos containing material and polychlorinated biphenyls and (C) mold or water
conditions which may exist at the Property or other matters governed by any
applicable federal, state or local law or statue.
(ii) Adequacy of the Asset. The economic feasibility, cash flow and
expenses of the Asset, and habitability, merchantability, fitness, suitability and
adequacy of the Property for any particular use or purpose.
(iii) Legal Compliance of the Asset. The compliance or non-compliance
of the Seller or the operation of the Property or any part thereof in
29
accordance with, and the contents of, (A) all codes, laws, ordinances,
regulations, agreements, licenses, permits, approvals and applications of or with
any governmental authorities asserting jurisdiction over the Property, including,
without limitation, those relating to zoning, building, public works, parking, fire
and police access, handicap access, life safety, subdivision and subdivision sales,
and Hazardous Materials, dangerous, and toxic substances, materials, conditions or
waste, including, without limitation, the presence of Hazardous Materials in, on,
under or about the Property that would cause state or federal agencies to order a
clean up of the Property under any applicable legal requirements and (B) all
agreements, covenants, conditions, restrictions (public or private), condominium
plans, development agreements, site plans, building permits, building rules, and
other instruments and documents governing or affecting the use, management, and
operation of the Property.
(iv) Matters Disclosed in the Schedules and the Asset File. Those
matters referred to in this Agreement and the documents listed on the Schedules
attached hereto and the matters disclosed in the Asset File.
(v) Insurance. The availability, cost, terms and coverage of
liability, hazard, comprehensive and any other insurance of or with respect to the
Property.
(vi) Condition of Title. The condition of title to the Property,
including, without limitation, vesting, legal description, matters affecting title,
title defects, liens, encumbrances, boundaries, encroachments, mineral rights,
options, easements, and access; violations of restrictive covenants, zoning
ordinances, setback lines, or development agreements; the availability, cost, and
coverage of title insurance; leases, rental agreements, occupancy agreements, rights
of parties in possession of, using, or occupying the Property; and standby fees,
taxes, bonds and assessments.
SECTION
7.3 RELEASE. THE BUYER HEREBY AGREES THAT THE SELLER, AND EACH OF THEIR PARTNERS, MEMBERS,
TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES, PROPERTY MANAGERS, ASSET MANAGERS,
AGENTS, ATTORNEYS, AFFILIATES AND RELATED ENTITIES, HEIRS, SUCCESSORS, AND ASSIGNS (COLLECTIVELY,
THE “RELEASEES”) SHALL BE, AND ARE HEREBY, FULLY AND FOREVER RELEASED AND DISCHARGED FROM
ANY AND ALL LIABILITIES, LOSSES, CLAIMS (INCLUDING THIRD PARTY CLAIMS), DEMANDS, DAMAGES (OF ANY
NATURE WHATSOEVER), CAUSES OF ACTION, COSTS, PENALTIES, FINES, JUDGMENTS, REASONABLE ATTORNEYS’
FEES, CONSULTANTS’ FEES AND COSTS AND EXPERTS’ FEES (COLLECTIVELY, THE “CLAIMS”) WITH
RESPECT TO ANY AND ALL CLAIMS, WHETHER DIRECT OR INDIRECT, KNOWN OR UNKNOWN, FORESEEN OR
UNFORESEEN, THAT MAY ARISE ON ACCOUNT OF OR IN ANY WAY BE CONNECTED WITH THE ASSET OR THE PROPERTY
INCLUDING, WITHOUT LIMITATION, THE PHYSICAL, ENVIRONMENTAL AND STRUCTURAL CONDITION OF THE PROPERTY
OR ANY LAW OR REGULATION APPLICABLE THERETO, INCLUDING, WITHOUT LIMITATION, ANY CLAIM OR MATTER
(REGARDLESS OF WHEN IT FIRST APPEARED) RELATING TO OR ARISING FROM (A)
30
THE PRESENCE OF ANY ENVIRONMENTAL PROBLEMS, OR THE USE, PRESENCE,
STORAGE, RELEASE, DISCHARGE, OR MIGRATION OF HAZARDOUS MATERIALS ON,
IN, UNDER OR AROUND THE PROPERTY REGARDLESS OF WHEN SUCH HAZARDOUS
MATERIALS WERE FIRST INTRODUCED IN, ON OR ABOUT THE PROPERTY, (B) ANY
PATENT OR LATENT DEFECTS OR DEFICIENCIES WITH RESPECT TO THE
PROPERTY, (C) ANY AND ALL MATTERS RELATED TO THE PROPERTY OR ANY
PORTION THEREOF, INCLUDING WITHOUT LIMITATION, THE CONDITION AND/OR
OPERATION OF THE PROPERTY AND EACH PART THEREOF, AND (D) THE
PRESENCE, RELEASE AND/OR REMEDIATION OF ASBESTOS AND ASBESTOS
CONTAINING MATERIALS IN, ON OR ABOUT THE PROPERTY REGARDLESS OF WHEN
SUCH ASBESTOS AND ASBESTOS CONTAINING MATERIALS WERE FIRST INTRODUCED
IN, ON OR ABOUT THE PROPERTY, PROVIDED, HOWEVER, THAT IN NO EVENT
SHALL RELEASEES BE RELEASED FROM (X) ANY CLAIMS ARISING PURSUANT TO
THE PROVISIONS OF THIS AGREEMENT OR THE SELLER’S OBLIGATIONS, IF ANY,
UNDER THE CLOSING DOCUMENTS OR (Y) ANY CLAIMS ARISING FROM ANY
FRAUDULENT ACTS COMMITTED BY THE SELLER TO THE BUYER IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. THE BUYER
FURTHER AGREES THAT THE WAIVERS AND RELEASES HEREIN HAVE BEEN
NEGOTIATED AND AGREED UPON IN LIGHT OF THAT REALIZATION AND THAT THE
BUYER NEVERTHELESS HEREBY INTENDS TO RELEASE, DISCHARGE AND ACQUIT
THE SELLER FROM ANY SUCH UNKNOWN CLAIMS, DEBTS, AND CONTROVERSIES
WHICH MIGHT IN ANY WAY BE INCLUDED AS A MATERIAL PORTION OF THE
CONSIDERATION GIVEN TO THE SELLER BY THE BUYER IN EXCHANGE FOR THE
SELLER’S PERFORMANCE HEREUNDER. THE SELLER HAS GIVEN THE BUYER
MATERIAL CONCESSIONS REGARDING THIS TRANSACTION IN EXCHANGE FOR THE
BUYER AGREEING TO THE PROVISIONS OF THIS SECTION 7.3. THE SELLER AND
THE BUYER HAVE EACH INITIALED THIS SECTION 7.3 TO FURTHER INDICATE
THEIR AWARENESS AND ACCEPTANCE OF EACH AND EVERY PROVISION HEREOF.
THE PROVISIONS OF THIS SECTION 7.3 SHALL SURVIVE THE CLOSING AND
SHALL NOT BE DEEMED MERGED INTO ANY INSTRUMENT OR CONVEYANCE
DELIVERED AT THE CLOSING. SELLER’S INITIALS: BUYER’S INITIALS:
ARTICLE VIII.
TITLE AND PERMITTED EXCEPTIONS
SECTION 8.1 Title Insurance and Survey.
The Property shall be sold and is to be conveyed, and the Buyer agrees to purchase the
Property, subject only to the Permitted Exceptions.
SECTION 8.2 Title Commitment; Survey.
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The Buyer has received and reviewed a copy of the Title Commitment and the Existing Survey.
SECTION 8.3 Delivery of Title.
(a) At or prior to the Closing, the Seller shall obtain releases of (i) all deeds to secure
debts and/or mortgage liens and other financing items encumbering the Asset (“Financing
Liens”), (ii) tax liens (other than liens for taxes not yet due and payable) encumbering the
Property (“Tax Liens”) and (iii) any liens encumbering the Property affirmatively placed on
the Property by the Seller on or after March 25, 2007 (“Post Effective Date Seller
Encumbrance”). Other than as set forth in this Agreement (including without limitation the
first sentence of this subsection 8.3(a), and subsection 8.3(c)), the Seller shall not be required
to take or bring any action or proceeding or any other steps to remove any title exception or to
expend any moneys therefor, nor shall the Buyer have any right of action against the Seller, at law
or in equity, for the Seller’s inability to convey title subject only to the Permitted Exceptions.
(b) Subject to the Seller’s obligations under subsections 8.3(a) and 8.3(c), in the event that
the Seller is unable to convey title subject only to the Permitted Exceptions, and the Buyer has
not, prior to the Closing Date, given notice to the Seller that the Buyer is willing to waive
objection to each title exception which is not a Permitted Exception, the Seller shall have the
right, in the Seller’s sole and absolute discretion, to (i) take such action as the Seller shall
deem advisable to attempt to discharge each such title exception which is not a Permitted Exception
or (ii) terminate this Agreement. In the event that the Seller shall elect to attempt to discharge
such title exceptions which are not Permitted Exceptions, the Seller shall proceed to attempt to
discharge such title exceptions diligently and in good faith and for so long as it is so attempting
to discharge such title objections shall be entitled to one or more adjournments of the Closing
Date for a period not to exceed 60 days in the aggregate. If, for any reason whatsoever, the
Seller has not discharged such title exceptions which are not Permitted Exceptions prior to the
expiration of the last of such adjournments, and if the Buyer is not willing to waive objection to
such title exceptions, this Agreement shall be terminated as of the expiration of the last of such
adjournments. In the event of a termination of this Agreement pursuant to this subsection 8.3(b),
the Xxxxxxx Money shall be refunded to the Buyer and neither party shall have any further rights or
obligations hereunder except for those that expressly survive the termination of this Agreement.
Nothing in this clause (b) shall require the Seller, despite any election by the Seller to attempt
to discharge any title exceptions, to take or bring any action or proceeding or any other steps to
remove any title exception or to expend any moneys therefor, other than with respect to the Post
Effective Date Seller Encumbrance, the Post Effective Date Monetary Encumbrance, Financing Liens
and Tax Liens.
(c) Notwithstanding the foregoing, at the Closing, in addition to releasing all Financing
Liens, Tax Liens and Post Effective Date Seller Encumbrances which the Buyer does not waive its
objection to pursuant to Section 8.3(b), the Seller shall obtain a release of any lien encumbering
the Property on or after March 25, 2007 which may be removed by the payment of a sum of money (a
“Post Effective Date Monetary Encumbrances”); provided that Seller shall not be obligated
to spend more than $250,000 in the aggregate to remove any Post-Effective Date Monetary
Encumbrances.
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SECTION 8.4 Cooperation. In connection with obtaining the Title Policy, the Buyer and the Seller, as
applicable, and to the extent requested by the Title Company, will deliver to the Title Company (a)
evidence sufficient to establish (i) the legal existence of the Buyer and the Seller and their
respective signatories and (ii) the authority of the respective signatories of the Seller and the
Buyer to bind the Seller and the Buyer, as the case may be, (b) certificates of good standing of
the Seller in Delaware and, if applicable, Georgia; and (c) the affidavits of the Seller in the
forms attached hereto as Exhibit G.
ARTICLE IX.
TRANSACTION COSTS; RISK OF LOSS
SECTION 9.1 Transaction Costs.
(a) The Buyer and the Seller agree to comply with all real estate transfer tax laws applicable
to the sale of the Asset. At Closing, the Seller shall pay the applicable documentary transfer
taxes as a result of the conveyance of the Asset to Buyer pursuant to this Agreement. In addition
to their respective apportionment obligations hereunder, (i) the Seller and the Buyer shall each be
responsible for the payment of the costs of their respective legal counsel, advisors and other
professionals employed thereby in connection with the sale of the Asset, and (ii) the Buyer shall
be responsible for all costs and expenses associated with (A) the Buyer’s due diligence, (B) any
extended coverage or endorsements to the Title Policy, (C) the policy premiums in respect of any
mortgage title insurance obtained by the Buyer, (D) all costs for any new survey and search costs
with respect to the Property and updates related thereto, (E) payment, at the Closing, of the
recording charges and fees (other than deed recordation taxes) for the documents necessary to
transfer the Asset, (F) obtaining any financing the Buyer may elect to obtain (including any fees,
financing costs, transfer taxes, mortgage and recordation taxes and intangible taxes in connection
therewith), and (G) all other costs which are the responsibility under applicable law for the Buyer
to pay (including, without limitation, all sales and use taxes due as a result of the sale of the
Asset). Seller shall pay the basic policy premium with respect to the Title Policy. Seller shall
be entitled to receive at Closing any title policy reissue credits applicable to the issuance of
the Title Policy. The fees, if any, of the Escrow Agent shall be equally divided between the
Seller and the Buyer.
(b) Each party to this Agreement shall indemnify the other parties and their respective
successors and assigns from and against any and all loss, damage, cost, charge, liability or
expense (including court costs and reasonable attorneys’ fees) which such other party may sustain
or incur as a result of the failure of either party to timely pay any of the aforementioned taxes,
fees or other charges for which it has assumed responsibility under this Section. The provisions
of this Article IX shall survive the Closing or the termination of this Agreement.
SECTION 9.2 Risk of Loss.
(a) If, on or before the Closing Date, (i) the Property or any portion thereof shall be
damaged or destroyed by fire or other casualty or (ii) any Governmental Authority or
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other entity having condemnation authority shall take the property or any portion thereof or
institute an eminent domain proceeding by delivering written notice thereof to the Seller and the
same is not dismissed prior to the Closing, then the Seller shall promptly notify the Buyer and at
Closing, the Seller will credit against the Purchase Price payable by the Buyer at the Closing an
amount equal to the net proceeds (other than on account of business or rental interruption relating
to the period prior to Closing), if any, received by the Seller on or prior to the Closing as a
result of such casualty or condemnation, plus the amount of any deductible, less any amounts spent
to restore the Property. If as of the Closing Date, the Seller has not received all or any portion
of such insurance or condemnation proceeds, then the parties shall nevertheless consummate on the
Closing Date the conveyance of the Asset (without any credit for such as yet unpaid insurance or
condemnation proceeds except for a credit for any deductible under such insurance) and the Seller
will at Closing assign to the Buyer all rights of the Seller, if any, to the insurance or
condemnation proceeds (other than on account of business or rental interruption relating to the
period prior to Closing but including all business or rental interruption relating to the period on
or after Closing) and to all other rights or claims arising out of or in connection with such
casualty or condemnation and the Buyer may notify all appropriate insurance companies of its
interest in the insurance proceeds.
(b) Notwithstanding the provisions of subsection 9.2(a), if, on or before the Closing Date,
the Property or any portion thereof shall be (i) damaged or destroyed by a Material Casualty or
(ii) taken as a result of a Material Condemnation, the Buyer shall have the right, exercised by
notice to the Seller no more than ten Business Days after the Buyer has received notice of such
Material Casualty or Material Condemnation, to terminate this Agreement, in which event the Xxxxxxx
Money shall be refunded to the Buyer and neither party shall have any further rights or obligations
hereunder other than those which expressly survive the termination of this Agreement. If the Buyer
fails to timely terminate this Agreement in accordance with this subsection 9.2(b), the provisions
of subsection 9.2(a) shall apply. As used in this subsection 9.2(b), a “Material Casualty”
shall mean any damage to the Property or any portion thereof by fire or other casualty that, in the
Seller’s reasonable judgment, may be expected to cost in excess of $4,100,000 to repair. As used
in this subsection 9.2(b), a “Material Condemnation” shall mean a taking of the Property or
any material portion thereof as a result of a condemnation or eminent domain proceeding or the
institution of such proceeding pursuant to a written notice thereof to the Seller that, permanently
impairs the use and value of the Property, and which can not be restored to substantially the same
use and value as before the taking.
(c) Subject to the provisions of this Section 9.2, the risk of loss or damage to the Property
shall remain with the Seller until delivery of the Deed.
ARTICLE X.
ADJUSTMENTS
SECTION 10.1 Adjustments. Except as otherwise specifically provided in subsection 10.1(m), the Seller
shall be responsible for and shall pay (or credit the Buyer for) all liabilities, including,
without limitation, all real property, personal property and sales and use taxes, which accrue with
respect to the Asset with respect to all periods prior to the Closing and
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the Buyer shall be responsible for and shall pay all liabilities, including without limitation all real
property, personal property and sales and use taxes, which accrue with respect to the Asset with
respect to all periods from and after the Closing. Unless otherwise provided below, the following
are to be adjusted and prorated between the Seller and the Buyer as of 11:59 P.M. on the day
preceding the Closing (the “Cut-Off Time”), based upon a 365 day year, and the net amount
thereof under Section 10.1 shall be added to (if such net amount is in the Seller’s favor) or
deducted from (if such net amount is in the Buyer’s favor) the Purchase Price payable at Closing:
(a) Taxes and Assessments. All real estate and personal property taxes and
assessments (including, without limitation, special assessments and improvement assessments) levied
against the Asset shall be prorated as of the Cut-Off Time between the Buyer and the Seller. If
the amount of any such taxes is not ascertainable on the Closing Date, the proration for such taxes
shall be estimated based on the most recent available xxxx; provided, however, that
after the Closing, the Seller and the Buyer shall reprorate the taxes and pay any deficiency in the
original proration to the other party promptly upon receipt of the actual xxxx for the relevant
taxable period. In the event that the Asset or any part thereof shall be or shall have been
affected by an assessment or assessments which are payable in installments, the Seller shall, at
the Closing, be responsible for any installments due prior to the Closing and the Buyer shall be
responsible for any installments due on or after the Closing, provided that such assessments shall
in any event be prorated between the Buyer and the Seller as of the Cut-Off Time. The reproration
obligation under this subsection 10.1(a) shall survive the Closing.
(b) Water and Sewer Charges, Utilities. All utility services shall be prorated as of
the Cut-Off Time between the Buyer and the Seller. To the extent possible, readings shall be
obtained for all utilities as of the Cut-Off Time. If not possible, the cost of such utilities
shall be prorated between the Seller and the Buyer by estimating such cost on the basis of the most
recent xxxx for such service; provided, however, that after the Closing, the Seller and the Buyer
shall reprorate the amount for such utilities and pay any deficiency in the original proration to
the other party promptly upon receipt of the actual xxxx for the relevant billing period. The
Seller shall receive a credit for all deposits transferred to the Buyer or which remain on deposit
for the benefit of the Buyer with respect to such utility contracts, otherwise such deposits shall
be refunded to the Seller. The reproration obligation in this subsection 10.1(b) shall survive the
Closing.
(c) Operating Agreements and Equipment Leases. Charges and payments (including the
reimbursement of expenses) under all Operating Agreements and Equipment Leases.
(d) Miscellaneous Revenues. Revenues, if any, arising out of telephone booths,
vending machines, parking, or other income producing agreements, on an if, as and when collected
basis.
(e) Inventory. The Seller shall receive a credit for all Inventory and Retail
Merchandise in unopened cases as of the Closing in an amount equal to the Seller’s actual cost
(including sales and/or use tax) for such items.
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(f) Tenant Leases. Any rents and other amounts prepaid, accrued or due and payable
under the Tenant Leases shall be prorated as of the Cut-Off Time between the Buyer and the Seller.
The Buyer shall receive a credit for all cash security deposits held by the Seller under the Tenant
Leases and the Buyer thereafter shall be obligated to refund or apply such deposits in accordance
with the terms of such Tenant Leases.
(g) Licenses and Permits. All amounts prepaid, accrued or due and payable under any
Permits (other than utilities which are separately prorated under subsection 10.1(b)) transferred
to the Buyer shall be prorated as of the Cut-Off Time between the Seller and the Buyer. The Seller
shall receive a credit for all deposits made by the Seller under the Licenses and Permits which are
transferred to the Buyer or which remain on deposit for the benefit of the Buyer.
(h) Deposits for Bookings. The Buyer shall receive a credit for all prepaid deposits
for Bookings scheduled for accommodations or events on or after the Closing Date, except to the
extent such deposits are transferred to the Buyer and for all other amounts prepaid by guests or
other customers for accommodations or events on or after the Closing Date.
(i) Restaurants and Bars, Etc. The Seller shall close out the transactions in the
restaurants and bars in the Hotel as of the Cut-Off Time and all revenues with respect thereto and
with respect to other services to guests of the Hotel, including without limitation, health club
revenues, room service revenues and banquet revenues, if any, shall be prorated between the Seller
and the Buyer as of the Cut-Off Time.
(j) Vending Machines. The Seller shall remove all monies from all vending machines,
laundry machines, pay telephones and other coin-operated equipment as of the Cut-Off Time and shall
retain all monies collected therefrom as of the Cut-Off Time, and the Buyer shall be entitled to
any monies collected therefrom after the Cut-Off Time.
(k) Trade Payables. Except to the extent an adjustment or proration is made under
another subsection of this Section 10.1, (i) the Seller shall pay in full prior to the Closing all
amounts payable to vendors or other suppliers of goods or services to the Hotel (the “Trade
Payables”) which are due and payable as of the Closing Date for which goods or services have been
delivered to the Hotel prior to Closing, and (ii) the Buyer shall receive a credit for the amount
of such Trade Payables which have accrued, but are not yet due and payable as of the Closing Date,
and the Buyer shall pay all such Trade Payables accrued as of the Closing Date when such Trade
Payables become due and payable up to the amount of such credit; provided, however, the Seller and
the Buyer shall reprorate the amount of credit for any Trade Payables and pay any deficiency in the
original proration to the other party promptly upon receipt of the actual xxxx for such goods or
services. The Seller shall receive a credit for all advance payments or deposits made with respect
to FF&E, Retail Merchandise, Property and Equipment and Inventories ordered, but not delivered to
the Hotel prior to the Closing Date, and the Buyer shall pay the amounts which become due and
payable for such FF&E, Retail Merchandise, Property and Equipment and Inventories which were
ordered but not delivered prior to Closing. The reproration obligation in this subsection 10.1(k)
shall survive the Closing.
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(l) Cash. The Seller shall receive a credit for all cash on hand at the Hotel and all
cash on deposit in any house bank at the Hotel as of the Closing and all such cash on hand and cash
on deposit in any house bank at the Hotel shall be transferred to and belong to the Buyer from and
after the Closing. The Seller shall retain all amounts in any operating accounts of the Hotel in
any bank, and there shall be no credit or adjustment hereunder with respect to such cash;
provided, however, the Seller shall receive a credit for any reserve fund or
account established pursuant to the terms of the Management Agreement which the Seller transfers to
the Buyer at Closing, if any.
(m) Employee Compensation. The Seller shall pay all wages, payroll taxes and fringe
benefits (including accrued vacation pay to the extent actually earned) as well as social security,
unemployment compensation, health, life and disability insurance and pension fund contributions, if
any, of the Employees through the Closing Date, provided, that, the Seller shall have no liability
or obligation to pay for any sick pay or accrued but unearned vacation pay. Notwithstanding the
foregoing, with respect to accrued bonuses for 2007, the Seller’s pro-rated share shall be based
upon the bonus program in place as of the beginning of 2006 in the 2006 approved budget for the
Hotel prepared by Manager. The Buyer shall be responsible for all other liabilities relating to or
in connection with Employees for the period on or after the Cut-Off Time and any liabilities
relating to or in connection with sick pay and accrued but unearned vacation pay whether having
accrued prior to, on or after the Cut-Off Time. The Buyer shall be responsible for all severance
payments for Transferred Employees arising on or after the Closing and for all Employees not
offered employment by the Buyer (or its manager) as of the Closing, or who do not accept employment
by the Buyer (or its manager) on the same terms as those provided to such employees by Manager on
the day immediately preceding the Closing Date.
(n) The Buyer and the Seller each acknowledge that certain taxes and assessments accrue and
are payable to the various local governments by any business entity operating a hotel and its
related facilities. Included in those taxes and assessments may be business and occupation taxes,
retail sales taxes, gross receipts taxes, and other special lodging or hotel taxes and assessments.
For purposes of this Agreement, all of such taxes and assessments (expressly excluding (x) taxes
and assessments covered in Section 10.1(a) of this Agreement, which shall be governed by the
provisions of Section 10.1(a), and (y) corporate franchise taxes, and federal, state and local
income taxes) shall be allocated between the Seller and the Buyer such that those attributable to
the period prior to the Cut-Off Time shall be allocable to the Seller and those attributable to the
period after the Cut-Off Time shall be allocable to the Buyer (with the attribution of such taxes
and assessments hereunder to be done in a manner consistent with the attribution under this
Agreement of the applicable revenues on which such taxes and assessments may be based). The Seller
shall be obligated to pay all such taxes and assessments which accrue with respect to the period
prior to the Cut-Off Time, and the Buyer shall be obligated to pay all such taxes and assessments
which accrue with respect to the period after the Cut-Off Time.
(o) Other. If applicable, the Purchase Price shall be adjusted at Closing to reflect
the adjustment of any other item which, (i) under the explicit terms of this Agreement, is to be
apportioned at Closing, or (ii) is customarily prorated at the closing of similar transactions.
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(p) The provisions of Section 10.1 and the obligations of the Seller and the Buyer hereunder
shall survive the Closing.
SECTION 10.2 Re-Adjustment.
(a) If any items to be adjusted pursuant to this Article X are not determinable at the
Closing, the adjustment shall be made subsequent to the Closing when the charge is determined. The
Buyer shall deliver to the Seller no later than 120 days following the Closing Date a schedule of
prorations setting forth the Buyer’s determination of all adjustments to the prorations made at
Closing that it believes are necessary to complete the prorations as set forth in this Article X.
Any errors or omissions in computing adjustments or readjustments at the Closing or thereafter
shall be promptly corrected or made, provided that the party seeking to correct such error or
omission or to make such readjustment shall have notified the other party of such error or omission
or readjustment on or prior to the date that is 180 days following the Closing.
(b) The provisions of Section 10.2 and the obligations of the Seller and the Buyer hereunder
shall survive the Closing.
SECTION 10.3 Accounts Receivable.
(a) Guest Ledger. All revenues received or to be received from transient guests on
account of room rents for the period prior to and including the Cut-Off Time shall belong to the
Seller. At Closing, the Seller shall receive a credit in an amount equal to: (i) all amounts
unpaid as of the Cut-Off Time charged to the Guest Ledger for all room nights up to (but not
including) the night during which the Cut-Off Time occurs, and (ii) one-half of all amounts unpaid
as of the Cut-Off Time charged to the Guest Ledger for the room night which includes the Cut-Off
Time and the Guest Ledger and all amounts charged thereto and unpaid as of the Cut-Off Time shall
become the property of the Buyer. For the period beginning on the day immediately following the
Cut-Off Time, such revenues collected from the Guest Ledger shall belong to the Buyer. In the
event that an amount less than the total amount due from a guest is collected and guest continued
in occupancy after the Cut-Off Time, such amount shall be applied first to any amount owing by such
person to the Seller and thereafter to such person’s amounts accruing to the Buyer.
(b) Accounts Receivable (Other than Guest Ledger).
(i) On the Closing Date, the Seller shall assign to the Buyer all Accounts
Receivable that are 90 days or less past due as of the Closing (the “Assigned
Accounts Receivable”), the Buyer shall pay to the Seller an amount equal to 100%
of all Accounts Receivable that are 90 days or less past due as of the Closing Date
and shall not credit to the Seller any amounts for Accounts Receivable more than 90
days past due as of the Closing Date. The Buyer shall have the sole right to
collect and retain all such Assigned Accounts Receivable. If any Assigned Accounts
Receivable are paid to the Seller after the Closing, the Seller shall pay to the
Buyer the amounts received by the Seller within 10 days after receipt of such
amounts without any commission or deduction for the Seller.
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(ii) After the Closing, the Seller shall retain the right to collect all
Accounts Receivable other than the Guest Ledger which is addressed in subsection
10.3(a), and the Assigned Accounts Receivable, which is addressed in subsection
10.3(b)(i) (such retained Accounts Receivable, the “Retained Accounts
Receivable”). The Seller shall not receive a credit for the Retained Accounts
Receivable. The Seller shall have the sole right to collect the Retained Accounts
Receivable. If any Retained Accounts Receivable are paid to the Buyer after the
Closing, the Buyer shall pay to the Seller the amounts received by the Buyer within
10 days after receipt of such amounts without any commission or deduction for the
Buyer.
(iii) The Accounts Receivable addressed in this subsection 10.3(b) shall not
include the Guest Ledger, which is addressed in subsection 10.3(a).
(iv) The parties’ obligations under this subsection 10.3(b) shall survive the
Closing.
(c) The provisions of Section 10.3 and the obligations of the Seller and the Buyer hereunder
shall survive the Closing.
ARTICLE XI.
INDEMNIFICATION
SECTION 11.1 Indemnification by the Seller. From and after the Closing and subject to Sections 11.3 and
11.4, the Seller shall indemnify and hold the Buyer, its affiliates, members and partners, and the
partners, shareholders, officers, directors, employees, representatives and agents of each of the
foregoing (collectively, “Buyer-Related Entities”) harmless from and against any and all
costs, fees, expenses, damages, deficiencies, interest and penalties (including, without
limitation, reasonable attorneys’ fees and disbursements) suffered or incurred by any such
indemnified party in connection with any and all losses, liabilities, claims, damages and expenses
(“Losses”), arising out of, or in any way relating to (a) any breach of any representation
or warranty of the Seller contained in this Agreement or in any Closing Document and (b) any breach
of any covenant of the Seller which survives the Closing contained in this Agreement or in any
Closing Document, including, without limitation, any amounts due and owing to the Buyer following
the Closing pursuant to Article X. Notwithstanding anything to the contrary contained herein, the
Seller shall have no liability or obligation to indemnify and hold the Buyer Related Entities
harmless from any Losses to the extent such Losses results from or is related to any acts or
omissions of Manager which would otherwise result in an indemnification obligation of Manager in
favor of the Seller pursuant to the terms of the Management Agreement or constitute a default by
Manager under the Management Agreement.
SECTION 11.2 Indemnification by the Buyer. From and after the Closing and subject to Sections 11.3 and
11.4, the Buyer shall indemnify and hold the Seller, its affiliates, members and partners, and the
partners, shareholders, officers, directors, employees, representatives and agents of each of the
foregoing (collectively, “Seller-Related Entities”) harmless from any and all
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Losses arising out of, or in any way relating to, (a) any breach of any representation or warranty
by the Buyer contained in this Agreement or in any Closing Document including, without limitation,
any amounts due and owing to the Seller pursuant to Article X and (b) any breach of any covenant of
the Buyer which survives the Closing contained in this Agreement or in any Closing Document
including, without limitation, any amounts due and owing to the Seller following the Closing
pursuant to Article X.
SECTION 11.3 Limitations on Indemnification. Notwithstanding the foregoing provisions of Section 11.1,
(a) the Seller shall not be required to indemnify the Buyer or any Buyer-Related Entities under
subsection 11.1(a) unless the aggregate of all amounts for which an indemnity would otherwise be
payable by the Seller under subsection 11.1(a) exceeds the Basket Limitation and, in such event,
the Seller shall be responsible only for such amount in excess of the Basket Limitation, (b) in no
event shall the liability of the Seller with respect to the indemnification provided for in
subsection 11.1(a) exceed in the aggregate the Cap Limitation, and (c) if prior to the Closing, the
Buyer or Manager obtains or has actual knowledge of any inaccuracy or breach of any representation,
warranty or pre-closing covenant of the Seller contained in this Agreement (a “Buyer Waived
Breach”) and nonetheless proceeds with and consummates the Closing, then the Buyer and any
Buyer-Related Entities shall be deemed to have waived and forever renounced any right to assert a
claim for indemnification under this Article XI for, or any other claim or cause of action under
this Agreement at law or in equity on account of any such Buyer Waived Breach.
SECTION 11.4 Survival. The (a) representations and warranties contained in this Agreement and the
Closing Documents (other than the Deed, FIRPTA or the Georgia Residency Affidavits) shall survive
for a period of six months after the Closing and (b) the covenants contained in this Agreement and
the Closing Documents (other than the Deed, FIRPTA or the Georgia Residency Affidavits) shall
survive for a period of one year after the Closing (the period beginning on the date hereof and
ending on such applicable date in clause (a) or (b) being herein called the “Survival
Period”) unless otherwise provided for in this Agreement. Each party shall have the right to
bring an action against the other for the breach of the representations and warranties, covenants,
obligations, provisions and liabilities hereunder or under the Closing Documents, but only on the
following conditions: the party bringing the action for breach (i) gives a reasonably detailed
written notice of such breach to the other party within 91 days after the expiration of the
applicable Survival Period, and (ii) files an action for such breach on or before the first day
following the second anniversary of the Closing Date, after which time all representations and
warranties, covenants, obligations and liabilities (and any cause of action resulting from a breach
thereof not then in litigation) herein or the Closing Documents (other than the Deed, FIRPTA or the
Georgia Residency Affidavits) shall terminate. The provisions of this Section 11.4 shall not be
applicable to the Deed, FIRPTA or the Georgia Residency Affidavits, which shall survive the Closing
without limitation.
SECTION 11.5 Indemnification as Sole Remedy. If the Closing has occurred, the sole and exclusive remedy
(other than the right to seek specific performance of a covenant to be performed by the Seller or
the Buyer after the Closing) available to a party in the event of a breach by the other party to
this Agreement of any representation, warranty, covenant or other provision of this Agreement or
any Closing Document which survives the Closing shall be the indemnifications provided for under
this Article XI or elsewhere in this Agreement, which
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indemnifications shall survive the Closing as provided in this Article XI. The provisions of this
Section 11.5 shall not be applicable to the Deed, FIRPTA or the Georgia Residency Affidavits.
ARTICLE XII.
DEFAULT AND TERMINATION
SECTION 12.1 The Seller’s Termination.
(a) This Agreement may be terminated by the Seller prior to the Closing if (i) any of the
conditions precedent to the Seller’s obligations set forth in Section 5.1 or elsewhere in this
Agreement have not been satisfied or waived by the Seller on or prior to the Closing Date or (ii)
there is a material breach or default by the Buyer in the performance of any of its obligations
under this Agreement.
(b) In the event this Agreement is terminated by the Seller pursuant to subsection 12.1(a),
this Agreement shall be null and void and of no further force or effect and neither party shall
have any rights or obligations against or to the other except (i) for those provisions hereof which
by their terms expressly survive the termination of this Agreement and (ii) as set forth in
subsection 12.1(c). Notwithstanding the foregoing, if this Agreement is terminated by the Seller
prior to the Closing for a failure of (i) the condition precedent set forth in subsection 5.1(f)
and provided the Buyer is not in default of its obligation as set forth in Section 4.5 or (ii) the
condition set forth in subsection 5.1(c) and provided any matters arising under such subsection
5.1(c) is not based upon any act or omission by the Buyer or any of its affiliates, the Escrow
Agent shall disburse the Xxxxxxx Money to the Buyer as the Buyer’s sole and exclusive remedy, and
upon such disbursement the Seller and the Buyer shall have no further obligations under this
Agreement, except those which expressly survive such termination.
(c) In the event the Seller terminates this Agreement as a result of a breach or default by
the Buyer in any of its obligations under this Agreement, the Escrow Agent shall immediately
disburse the Xxxxxxx Money to the Seller, and upon such disbursement the Seller and the Buyer shall
have no further obligations under this Agreement, except those which expressly survive such
termination. The Buyer and the Seller hereby acknowledge and agree that it would be impractical
and/or extremely difficult to fix or establish the actual damage sustained by the Seller as a
result of such default by the Buyer, and agree that the Xxxxxxx Money is a reasonable approximation
thereof. Accordingly, in the event that the Buyer breaches this Agreement by defaulting in the
completion of the purchase of the Asset, the Xxxxxxx Money shall constitute and be deemed to be the
agreed and liquidated damages of the Seller, and shall be paid by the Escrow Agent to the Seller as
the Seller’s sole and exclusive remedy hereunder; provided, however, the foregoing
shall not limit the Buyer’s obligation to pay to the Seller all reasonable attorneys’ fees and
costs of the Seller to enforce the provisions of this Section 12.1 or limit the Buyer’s
indemnification obligations owed to the Seller pursuant to this Agreement which survive a
termination of this Agreement. The payment of the Xxxxxxx Money as liquidated damages is not
intended to be a forfeiture or penalty, but is intended to constitute liquidated damages to the
Seller.
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SECTION 12.2 The Buyer’s Termination.
(a) This Agreement may be terminated by the Buyer prior to the Closing if (i) any of the
conditions precedent to the Buyer’s obligations set forth in Section 5.2 or specifically set forth
elsewhere in this Agreement have not been satisfied or waived by the Buyer on or prior to the
Closing Date or (ii) there is a material breach or default by the Seller in the performance of its
obligations under this Agreement.
(b) In the event this Agreement is terminated by the Buyer pursuant to subsection 12.2(a)(i),
the Escrow Agent shall disburse the Xxxxxxx Money to the Buyer as the Buyer’s sole and exclusive
remedy, and upon such disbursement the Seller and the Buyer shall have no further obligations under
this Agreement, except those which expressly survive such termination.
(c) If there is a material breach or default by the Seller in the performance of its
obligations under this Agreement, the Buyer, at its option and as its sole and exclusive remedy,
may either (i) terminate this Agreement, direct the Escrow Agent to deliver the Xxxxxxx Money to
the Buyer and retain the Xxxxxxx Money, at which time this Agreement shall be terminated and of no
further force and effect except for the provisions which explicitly survive such termination, or
(ii) specifically enforce the terms and conditions of this Agreement provided such action seeking
specific performance is initiated within 90 days of the scheduled Closing Date. The Buyer and the
Seller hereby acknowledge and agree that it would be impractical and/or extremely difficult to fix
or establish the actual damage sustained by the Buyer as a result of such default by the Seller,
and agree that the remedy set forth in clause (i) above is a reasonable approximation thereof.
Accordingly, in the event that the Seller breaches this Agreement by defaulting in the completion
of the sale, and the Buyer elects not to exercise the remedy set forth in clause (ii) above but
instead elects the remedy set forth in clause (i) above, the delivery of the Xxxxxxx Money to the
Buyer shall be the Buyer’s sole and exclusive remedy. The Buyer agrees to, and does hereby, waive
all other remedies against the Seller which the Buyer might otherwise have at law or in equity by
reason of such default by the Seller.
ARTICLE XIII.
TAX CERTIORARI PROCEEDINGS
SECTION 13.1 Prosecution and Settlement of Proceedings. If any tax reduction proceedings in respect of
the Property, relating to any fiscal years ending prior to the fiscal year in which the Closing
occurs are pending at the time of the Closing, the Seller reserves and shall have the right to
continue to prosecute and/or settle the same. If any tax reduction proceedings in respect of the
Property, relating to the fiscal year in which the Closing occurs, are pending at the time of
Closing, then the Seller reserves and shall have the right to continue to prosecute and/or settle
the same; provided, however, that the Seller shall not settle any such proceeding without the
Buyer’s prior written consent, which consent shall not be unreasonably withheld or delayed. The
Buyer shall reasonably cooperate with the Seller in connection with the prosecution of any such tax
reduction proceedings.
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SECTION 13.2 Application of Refunds or Savings. Any refunds or savings in the payment of taxes
resulting from such tax reduction proceedings applicable to taxes payable during the period prior
to the date of the Closing shall belong to and be the property of the Seller, and any refunds or
savings in the payment of taxes applicable to taxes payable from and after the date of the Closing
shall belong to and be the property of the Buyer. All attorneys’ fees and other expenses incurred
in obtaining such refunds or savings shall be apportioned between the Seller and the Buyer in
proportion to the gross amount of such refunds or savings payable to the Seller and the Buyer,
respectively (without regard to any amounts reimbursable to tenants); provided, however, that
neither the Seller nor the Buyer shall have any liability for any such fees or expenses in excess
of the refund or savings paid to such party unless such party initiated such proceeding.
SECTION 13.3 Survival. The provisions of this Article XIII shall survive the Closing.
ARTICLE XIV.
MISCELLANEOUS
SECTION 14.1 Use of Blackstone Name and Address. The Buyer hereby acknowledges and agrees that neither
the Buyer nor any affiliate, successor, assignee or designee of the Buyer shall be entitled to use
the name “Blackstone”, “MeriStar”, “CapStar”, “Lepercq” or “Equistar” in connection with the
operation, ownership and use of the Property. The provisions of this Section 14.1 shall survive
the Closing and any termination of this Agreement.
SECTION 14.2 Exculpation of the Seller. Notwithstanding anything to the contrary contained herein, the
Seller’s shareholders, limited partners, members, the partners or members of such partners, the
shareholders of such partners, members, and the trustees, officers, directors, employees, agents
and security holders of the Seller and the partners or members of the Seller assume no personal
liability for any obligations entered into in connection with or relating to this Agreement on
behalf of the Seller and their respective individual assets shall not be subject to any claims of
any person relating to such obligations. The foregoing shall govern any direct and indirect
obligations of the Seller under this Agreement. The provisions of this Section 14.2 shall survive
the Closing and any termination of this Agreement.
SECTION 14.3 Brokers.
(a) The Seller represents and warrants to the Buyer, as of the date hereof and as of the
Closing, that it has dealt with no broker, finder or similar person with respect to this Agreement
or the transactions contemplated hereby other than Broker. The Seller agrees to indemnify,
protect, defend and hold the Buyer harmless from and against all claims, losses, damages,
liabilities, costs, expenses (including reasonable attorneys’ fees and disbursements) and charges
resulting from the Seller’s breach of the foregoing representation in this subsection (a). The
Seller shall be responsible for the payment of any amounts due Broker. The provisions of this
subsection 14.3(a) shall survive the Closing and any termination of this Agreement.
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(b) The Buyer represents and warrants to the Seller, as of the date hereof and as of the
Closing, that it has dealt with no broker, finder or similar person with respect to this Agreement
or the transactions contemplated hereby other than Broker. The Buyer agrees to indemnify, protect,
defend and hold the Seller harmless from and against all claims, losses, damages, liabilities,
costs, expenses (including reasonable attorneys’ fees and disbursements) and charges resulting from
the Buyer’s breach of the foregoing representations in this subsection (b). The provisions of this
subsection 14.3(b) shall survive the Closing and any termination of this Agreement.
(c) At Closing, Broker shall execute and deliver a final and unconditional waiver and release
of any lien rights it may have against the Property pursuant to the Commercial Real Estate Broker
Lien Act, O.C.G.A. §00-00-000, et. seq., in the form attached hereto as Exhibit I, and by its
execution of this Agreement, Broker hereby agrees to do so.
SECTION 14.4 Confidentiality; Press Release; IRS Reporting Requirements.
(a) The Buyer and the Seller, and each of their respective affiliates shall hold as
confidential all information disclosed in connection with the transaction contemplated hereby and
concerning each other, the Asset, this Agreement and the transactions contemplated hereby and shall
not release any such information to third parties without the prior written consent of the other
parties hereto, except (i) any information which was previously or is hereafter publicly disclosed
or was available on a non-confidential basis prior to its disclosure (other than in violation of
this Agreement or other confidentiality agreements to which affiliates of the Buyer are parties),
(ii) to their partners, advisers, underwriters, analysts, employees, affiliates, officers,
directors, consultants, lenders, accountants, legal counsel, title companies or other advisors of
any of the foregoing, provided that they are advised as to the confidential nature of such
information and are instructed to maintain such confidentiality and (iii) to comply with any law,
rule or regulation (including without limitation those of the United States Securities and Exchange
Commission) or the requirements of any securities exchange on which such party or its parent
company is listed. The foregoing shall constitute a modification of any prior confidentiality
agreement that may have been entered into by the parties. The provisions of this Section shall
survive the termination of this Agreement for a period of one year.
(b) The Seller or the Buyer may issue a press release with respect to this Agreement and the
transactions contemplated hereby, provided that the content of any such press release shall be
subject to the prior written consent of the other party hereto, not to be unreasonably withheld,
conditioned or delayed.
(c) For the purpose of complying with any information reporting requirements or other rules
and regulations of the IRS that are or may become applicable as a result of or in connection with
the transaction contemplated by this Agreement, including, but not limited to, any requirements set
forth in proposed Income Tax Regulation Section 1.6045-4 and any final or successor version thereof
(collectively, the “IRS Reporting Requirements”), the Seller and the Buyer hereby designate
and appoint the Escrow Agent to act as the “Reporting Person” (as that term is defined in
the IRS Reporting Requirements) to be responsible for complying with any IRS Reporting
Requirements. The Escrow Agent hereby acknowledges and accepts such designation and appointment
and agrees to fully comply with any IRS Reporting Requirements
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that are or may become applicable as a result of or in connection with the transaction
contemplated by this Agreement. Without limiting the responsibility and obligations of the Escrow
Agent as the Reporting Person, the Seller and the Buyer hereby agree to comply with any provisions
of the IRS Reporting Requirements that are not identified therein as the responsibility of the
Reporting Person, including, but not limited to, the requirement that the Seller and the Buyer each
retain an original counterpart of this Agreement for at least four years following the calendar
year of the Closing.
SECTION 14.5 Escrow Provisions.
(a) The Escrow Agent shall hold the Xxxxxxx Money in escrow in an interest-bearing bank
account at a federally insured banking institution (the “Escrow Account”).
(b) The Escrow Agent shall hold the Xxxxxxx Money in escrow in the Escrow Account until the
Closing or sooner termination of this Agreement and shall hold or apply such proceeds in accordance
with the terms of this subsection (b). The Seller and the Buyer understand that no interest is
earned on the Xxxxxxx Money during the time it takes to transfer into and out of the Escrow
Account. At the Closing, the Xxxxxxx Money shall be paid by the Escrow Agent to, or at the
direction of, the Seller. If for any reason the Closing does not occur and either party makes a
written demand upon the Escrow Agent for payment of such amount, the Escrow Agent shall, within 24
hours give written notice to the other party of such demand. If the Escrow Agent does not receive
a written objection within five Business Days after the giving of such notice, the Escrow Agent is
hereby authorized to make such payment. If the Escrow Agent does receive such written objection
within such five Business Day period or if for any other reason the Escrow Agent in good faith
shall elect not to make such payment, the Escrow Agent shall continue to hold such amount until
otherwise directed by joint written instructions from the parties to this Agreement or a final
judgment of a court of competent jurisdiction. However, the Escrow Agent shall have the right at
any time to deposit the Xxxxxxx Money with the clerk of the court of New York County. The Escrow
Agent shall give written notice of such deposit to the Seller and the Buyer. Upon such deposit the
Escrow Agent shall be relieved and discharged of all further obligations and responsibilities
hereunder.
(c) The parties acknowledge that the Escrow Agent is acting solely as a stakeholder at their
request and for their convenience, that the Escrow Agent shall not be deemed to be the agent of
either of the parties, and the Escrow Agent shall not be liable to either of the parties for any
act or omission on its part, other than for its gross negligence or willful misconduct. The Seller
and the Buyer shall jointly and severally indemnify and hold the Escrow Agent harmless from and
against all costs, claims and expenses, including attorneys’ fees and disbursements, incurred in
connection with the performance of the Escrow Agent’s duties hereunder.
(d) The Escrow Agent has acknowledged its agreement to these provisions by signing this
Agreement in the place indicated following the signatures of the Seller and the Buyer.
SECTION 14.6 Successors and Assigns; No Third-Party Beneficiaries. The stipulations, terms, covenants
and agreements contained in this Agreement shall inure to the benefit of, and
45
shall be binding upon, the parties hereto and their respective permitted successors and assigns
(including any successor entity after a public offering of stock, merger, consolidation, purchase
or other similar transaction involving a party hereto) and nothing herein expressed or implied
shall give or be construed to give to any person or entity, other than the parties hereto and such
assigns, any legal or equitable rights hereunder.
SECTION 14.7 Assignment. This Agreement may not be assigned by the Buyer without the prior written
consent of the Seller. The Buyer may designate an affiliate to which the Asset will be assigned at
the Closing, provided that the Buyer provides the Seller written notice of such designation at
least five days prior to the Closing and the Buyer will continue to remain primarily liable under
this Agreement notwithstanding any such designation. Notwithstanding anything to the contrary
contained herein, the Buyer may assign its rights and obligations under this Agreement to an
affiliate of the Buyer provided that the Buyer provides the Seller with a fully executed assignment
of contract at least five days prior to the Closing and the Buyer will continue to remain primarily
liable under this Agreement notwithstanding any such assignment.
SECTION 14.8 Further Assurances.
(a) From time to time, as and when requested by any party hereto, the other party shall
execute and deliver, or cause to be executed and delivered, all such documents and instruments and
shall take, or cause to be taken, all such further or other actions as such other party may
reasonably deem necessary or desirable to consummate the transactions contemplated by this
Agreement.
(b) The Seller shall after the Closing and if requested by the Buyer, based on the Buyer’s
obligations under regulatory requirements, reasonably cooperate with the Buyer in the Buyer’s
preparation of audited financial statements of the Property for the calendar year in which the
Closing occurs and the three preceding calendar years, by providing such information as may be in
the possession of the Seller as shall be required to enable an accounting firm of the Buyer’s
choosing to prepare such audited financial statements, the cost of which shall be borne by the
Buyer. Any information provided by the Seller to the Buyer pursuant to this subsection 14.8(b)
shall be without any representations or warranties. The Buyer agrees to reimburse the Seller for
the Seller’s actual and reasonable costs in connection with the Seller’s cooperation pursuant to
this subsection 14.8(b).
(c) The provisions of this Section 14.8 shall survive the Closing.
SECTION 14.9 Notices. All notices, demands or requests made pursuant to, under or by virtue of this
Agreement must be in writing and shall be (a) personally delivered, (b) delivered by express mail,
Federal Express or other comparable overnight courier service, (c) telecopied, with telephone or
written confirmation within one Business Day, or (d) mailed to the party to which the notice,
demand or request is being made by certified or registered mail, postage prepaid, return receipt
requested, as follows:
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To the Seller:
c/o Blackstone Real Estate Advisors
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Facsimile:
Telephone:
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Facsimile:
Telephone:
with copies thereof to:
LQ Management
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention:
Facsimile:
Telephone:
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention:
Facsimile:
Telephone:
To the Buyer:
Interstate Atlanta Airport, LLC
c/o Interstate Hotel & Resorts, Inc.
0000 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention:
Facsimile:
Telephone:
c/o Interstate Hotel & Resorts, Inc.
0000 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention:
Facsimile:
Telephone:
with copies thereof to:
XxXxxxx, Diamond & Ash
000 Xxxxx Xxxxxx — 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Facsimile:
Telephone:
000 Xxxxx Xxxxxx — 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Facsimile:
Telephone:
To the Escrow Agent/Title Company:
Lawyers Title Insurance Corporation
c/o LandAmerica Financial Group
Two Grand Central Tower
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention:
Facsimile:
Telephone:
c/o LandAmerica Financial Group
Two Grand Central Tower
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention:
Facsimile:
Telephone:
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All notices (i) shall be deemed to have been given on the date that the same shall have been
delivered in accordance with the provisions of this Section and (ii) may be given either by a party
or by such party’s attorneys. Any party may, from time to time, specify as its address for
purposes of this Agreement any other address upon the giving of 10 days’ prior notice thereof to
the other parties.
SECTION 14.10 Entire Agreement. This Agreement, along with the Exhibits and Schedules hereto contains
all of the terms agreed upon between the parties hereto with respect to the subject matter hereof,
and all understandings and agreements heretofore had or made among the parties hereto are merged in
this Agreement which alone fully and completely expresses the agreement of the parties hereto.
SECTION 14.11 Amendments. This Agreement may not be amended, modified, supplemented or terminated, nor
may any of the obligations of the Seller or the Buyer hereunder be waived, except by written
agreement executed by the party or parties to be charged.
SECTION 14.12 No Waiver. No waiver by either party of any failure or refusal by the other party to
comply with its obligations hereunder shall be deemed a waiver of any other or subsequent failure
or refusal to so comply.
SECTION 14.13 Governing Law. This Agreement shall be governed by, interpreted under, and construed and
enforced in accordance with, the laws of the State of Georgia.
SECTION 14.14 Intentionally Omitted.
SECTION 14.15 Severability. If any term or provision of this Agreement or the application thereof to any
person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this
Agreement or the application of such term or provision to persons or circumstances other than those
as to which it is held invalid or unenforceable shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
SECTION 14.16 Section Headings. The headings of the various Sections of this Agreement have been
inserted only for purposes of convenience, are not part of this Agreement and shall not be deemed
in any manner to modify, explain, expand or restrict any of the provisions of this Agreement.
SECTION 14.17 Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
SECTION 14.18 Acceptance of Deed. The acceptance of the Deed by the Buyer shall be deemed full
compliance by the Seller of all of the Seller’s obligations under this Agreement except for those
obligations of the Seller which are specifically stated to survive the Closing.
SECTION 14.19 Construction. The parties acknowledge that the parties and their counsel have reviewed and
revised this Agreement and that the normal rule of construction to the
48
effect that any ambiguities are to be resolved against the drafting party shall not be employed in
the interpretation of this Agreement or any exhibits or amendments hereto.
SECTION 14.20 Recordation. Neither this Agreement nor any memorandum or notice of this Agreement may be
recorded by any party hereto without the prior written consent of the other party hereto. The
provisions of this Section shall survive the Closing or any termination of this Agreement. The
Buyer also agrees not to file any lis pendens or other instrument against the Asset in connection
herewith in bad faith. In furtherance of the foregoing, the Buyer (i) acknowledges that the filing
of a lis pendens in bad faith against or encumbering the Asset or the recording of any memorandum
or notice of this Agreement could cause significant monetary and other damages to the Seller, and
(ii) hereby indemnifies the Seller from and against any and all liabilities, damages, losses, costs
or expenses (including without limitation attorneys fees and expenses) arising out of a breach of
this Section 14.20. The provisions of this Section 14.20 shall survive the Closing or any
termination of this Agreement.
SECTION 14.21 WAIVER OF JURY TRIAL. THE SELLER AND THE BUYER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST ANOTHER PARTY ON ANY MATTER ARISING OUT OF
OR IN ANY WAY CONNECTED WITH THIS AGREEMENT. THE PROVISIONS OF THIS SECTION 14.21 SHALL SURVIVE
THE CLOSING AND ANY TERMINATION OF THIS AGREEMENT.
SECTION 14.22 Time is of the Essence. The Seller and the Buyer agree that time is of the essence with
respect to the obligations of the Buyer and the Seller under this Agreement.
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SELLER: | ||||||
LEPERCQ ATLANTA RENAISSANCE PARTNERS, L.P., a Delaware limited partnership |
||||||
By: | MeriStar Sub 5R LLC, a Delaware limited liability company, its general partner |
|||||
By: | /s/ Xxxx Xxxxxxxx | |||||
Name: | Xxxx Xxxxxxxx | |||||
Title: | EVP and General Counsel | |||||
[SEAL] | ||||||
BUYER: | ||||||
INTERSTATE ATLANTA AIRPORT, LLC, a Delaware limited liability company |
||||||
By: | Interstate Operating Company, LP, a Delaware limited partnership, its member |
|||||
By: | Interstate Hotels & Resorts, Inc., a Delaware corporation, its general partner |
By: | /s/ Xxxxx X. Xxxxxx III | |||
Name: | Xxxxx X. Xxxxxx III | |||
Title: | Assistant General Counsel | |||
[SEAL] |
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