AGREEMENT OF PURCHASE AND SALE THE SELLER PARTIES Identified herein W2005 NEW CENTURY HOTEL PORTFOLIO, L.P.
Exhibit 99.1
THE
SELLER PARTIES
Identified
herein
“SELLERS”
W2005
NEW
CENTURY HOTEL PORTFOLIO, L.P.
“BUYER”
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ARTICLE
I.
ASSETS PURCHASED AND SOLD
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9
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Section
1.01.
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Purchase
and Sale.
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9
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Section
1.02.
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Personal
Property.
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9
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Section
1.03.
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Operating
Agreements.
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10
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Section
1.04.
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Intangible
Property.
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10
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Section
1.05.
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Franchise
Agreements.
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11
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Section
1.06.
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Management
Agreements.
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11
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Section
1.07.
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Land
and Hotels.
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12
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Section
1.08.
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Operating
Leases.
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12
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ARTICLE
II.
PURCHASE PRICE
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12
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Section
2.01.
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Price.
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12
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Section
2.02.
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Deposit.
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12
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Section
2.03.
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Balance
of Purchase Price.
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12
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Section
2.04.
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Reserve
Funds.
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12
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Section
2.05.
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Escrow
Agent.
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13
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ARTICLE
III.
OPERATION OF THE PROPERTY
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14
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Section
3.01.
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Operation
in the Ordinary Course of Business.
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14
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Section
3.02.
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Liquor
Licenses.
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14
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Section
3.03.
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Tenant
Estoppels.
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16
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Section
3.04.
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REA
Estoppels.
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16
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Section
3.05.
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Ground
Lessor’s Certificate.
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17
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ARTICLE
IV.
PRORATIONS AND ADJUSTMENTS
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||
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Section
4.01.
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Closing
Statement/Operations Settlement.
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17
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Section
4.02.
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Taxes
and Rents.
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17
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Section
4.03.
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Utilities.
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18
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Section
4.04.
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Assigned
Operating Agreements.
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19
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Section
4.05.
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Room
Revenues; Reservations; Tray Ledger; Accounts Receivable and House
Funds.
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19
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Section
4.06.
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Accounts
Payable and Expenses.
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20
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Section
4.07.
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Assigned
Commercial Leases.
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20
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Section
4.08.
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Employment.
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21
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Section
4.09.
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Hampton
Inn Franchise Agreements.
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21
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Section
4.10.
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Property
Improvement Plan (PIP) Credit.
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21
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Section
4.11.
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Phase
II Environmentals.
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21
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ARTICLE
V.
EMPLOYEES
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21
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Section
5.01.
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Salaries,
etc.
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21
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Section
5.02.
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Employee
Claims.
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22
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ARTICLE
VI.
REPRESENTATIONS AND WARRANTIES OF SELLER
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22
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Section
6.01.
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Sellers’
Representations and Warranties.
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22
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Section
6.02.
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Seller’s
Update of Representations and Warranties.
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26
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Section
7.01.
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Buyer’s
Representations and Warranties.
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27
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Section
7.02.
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AS IS.
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27
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ARTICLE
VIII.
REMEDIES
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29
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Section
8.01.
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Sellers’
Remedies.
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29
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Section
8.02.
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Buyer’s
Remedies.
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30
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Section
8.03.
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Pre-Closing
Matters.
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30
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Section
8.04.
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Post-Closing
Matters.
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30
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ARTICLE
IX.
CONDITIONS
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30
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|
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Section
9.01.
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Sellers’
Obligation.
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30
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Section
9.02.
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Buyer’s
Obligation.
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31
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ARTICLE
X.
CONVEYANCE OF ASSETS
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32
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|
Section
10.01.
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Instruments
of Conveyance.
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32
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ARTICLE
XI.
TITLE TO REAL PROPERTY
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34
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Section
11.01.
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Title
Insurance Commitments.
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34
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Section
11.02.
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Title
Defects.
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34
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Section
11.03.
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Survey.
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35
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Section
11.04.
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Access
to Property; Due Diligence.
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35
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ARTICLE
XII.
THE CLOSING
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35
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Section
12.01.
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Time
and Place.
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35
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Section
12.02.
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Payment
of Purchase Price.
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35
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Section
12.03.
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Closing
Costs.
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36
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Section
12.04.
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Revenue
and Expense Prorations.
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37
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Section
12.05.
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Closing
Documents.
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38
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ARTICLE
XIII.
INSURANCE, CONDEMNATION AND CASUALTY
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38
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Section
13.01.
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Insurance.
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38
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Section
13.02.
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Condemnation.
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38
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Section
13.03.
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Casualty.
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38
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ARTICLE
XIV.
MISCELLANEOUS COVENANTS AND PROVISIONS
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39
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Section
14.01.
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Assignment;
Successors and Assigns.
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39
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Section
14.02.
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Counterparts.
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39
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Section
14.03.
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Waiver.
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39
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Section
14.04.
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Amendments.
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40
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Section
14.05.
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Further
Agreements.
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40
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Section
14.06.
|
Waiver
of Jury Trial.
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40
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Section
14.07.
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Attorneys’
Fees.
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40
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Section
14.08.
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Entire
Agreement.
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40
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Section
14.09.
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Brokers
and Finders.
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40
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Section
14.10.
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Notices.
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40
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Section
14.11.
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Section Headings;
Interpretation.
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42
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Section
14.12.
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Governing
Law.
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42
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Section
14.13.
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Exclusivity.
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42
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Section
14.14.
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Disclosure
of Confidential Information/ Public Announcements/ Communication
with
Governmental Authorities/ Communication with Employees.
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42
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Section
14.15.
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Time
of Essence.
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44
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Section
14.16.
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Joint
and Several Liability.
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44
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Section
14.17.
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RADON
GAS.
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44
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SCHEDULE
“A” -
Legal
Description of Land
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SCHEDULE
“B” -
Form
of Assignment and Assumption of Commercial Leases
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SCHEDULE
“C” -
Form
of Assignment and Assumption of Intangible Property
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SCHEDULE
“D” -
Forms
of Assignment and Assumption of Third Party Leases
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SCHEDULE
“E” -
Form
of Assignment and Assumption of Operating Agreements
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SCHEDULE
“F” -
Form
of Xxxx of Sale (Personal Property)
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SCHEDULE
“G” -
Rent
Roll (Commercial Leases) as of the Effective Date
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SCHEDULE
“H” -
Schedule
of Franchise Agreements
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SCHEDULE
“I” -
Schedule
of Ground Leases
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SCHEDULE
“J” -
Schedule
of Guaranty of Franchise Agreements
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SCHEDULE
“K” -
Schedule
of Management Agreements
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SCHEDULE
“L” -
Schedule
of Third Party Leases
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SCHEDULE
“M” -
Schedule
of Operating Agreements
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SCHEDULE
“N -
Schedule
of Operating Leases
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SCHEDULE
“O” -
Schedule
of Operating Tenants
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SCHEDULE
“P” -
Purchase
Price Allocation Schedule
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SCHEDULE
“Q” -
Schedule
of Sellers
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SCHEDULE
“R” -
Litigation
Schedule
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SCHEDULE
“S” -
Title
and Survey Defects
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SCHEDULE
“T” - Schedule
of Liquor Licenses
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SCHEDULE
“U” - Form
of Assignment and Assumption of Ground Lease
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SCHEDULE
“V” - Form
of Tenant Estoppel
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SCHEDULE
“W” - Forms
of Third Party Lease Tenant Estoppel
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SCHEDULE
“X” - Deeds
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SCHEDULE
“Y” - Form
of Ground Lessor’s Certificate
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SCHEDULE
“Z” - Material
REAs
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SCHEDULE
“AA” - Form
of REA Estoppel
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SCHEDULE
“BB” - Property
Improvement Plans Corresponding to Capital Expenditures
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SCHEDULE
“CC” - Property
Improvement Plans Corresponding to Minimum Franchise
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Terms
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SCHEDULE
“DD” - Minimum
Terms for Franchise Agreements
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SCHEDULE
“EE” - Phase
II Environmental
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AGREEMENT
OF PURCHASE AND SALE
made and
entered into as of December 12, 2006, by and between Sellers and
Buyer.
DEFINITIONS
For
the
purposes of this Agreement, the parties agree that the following terms shall
have the following meanings:
| 1. |
Accounts
Receivable:
All accounts receivable relating to the Hotels, other than the Tray
Ledgers, accruing prior to the Transfer Time (including, without
limitation, receivables and revenues for food, beverage and telephone
use).
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| 2. |
Affiliates:
With respect to an indicated Person, any other Person who directly
Controls, is Controlled by or is under common Control with, such
indicated
Person.
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| 3. |
Agreement:
This Agreement of Purchase and Sale by and between Buyer and Sellers
providing for the sale and purchase of the
Property.
|
| 4. |
Allocated
Purchase Price:
The portion of the Purchase Price allocated to an individual Hotel,
as
specified in the Purchase Price Allocation
Schedule.
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| 5. |
Assignment
and Assumption of Commercial Leases:
An
assignment and assumption of the Commercial Leases in the form attached
hereto as Schedule “B”
and by this reference incorporated herein, pursuant to which (i) each
Seller and/or Operating Tenant shall assign and transfer to Buyer
all of
each Seller’s and/or Operating Tenant’s right, title and interest in and
to, and Buyer shall assume all of Seller’s or Operating Tenant’s
obligations and liabilities under, the Commercial Leases first accruing
from and after Closing, (ii) the
applicable Seller shall indemnify, hold harmless and defend Buyer
from and
against any loss, cost or damage arising under those certain Commercial
Leases for which Buyer has not received tenant estoppels pursuant
to
Section 9.02 prior to the Transfer Time, and (iii) Buyer shall
indemnify, hold harmless and defend the applicable Seller from and
against
any loss, cost or damage arising under any Commercial Leases from
and
after the Transfer Time.
|
| 6. |
Assignment
and Assumption of Ground Lease:
An assignment and assumption of the Ground Lease in the form attached
hereto as Schedule “U”
and by this reference incorporated herein, pursuant to which
(i) the
relevant Seller shall assign and transfer to Buyer all of such Seller’s
right, title and interest in and to, and Buyer shall assume all of
such
Seller’s obligations and liabilities under, the Ground Lease first
accruing from and after the Transfer Time, (ii) the
applicable Seller shall indemnify, hold harmless and defend Buyer
from and
against any loss, cost or damage arising under the Ground Lease prior
to
the Transfer Time and
(iii) Buyer
shall indemnify, hold harmless and defend the
applicable Seller
from and against any loss, cost or damage arising under the Ground
Lease
from and after the Transfer Time.
|
| 7. |
Assignment
and Assumption of Intangible Property:
An assignment and assumption of the Intangible Property in the form
attached hereto as Schedule “C”
and by this reference incorporated herein, pursuant to which
(i) each
Seller and/or Operating Tenant shall assign and transfer to Buyer
all of
such Seller’s and/or Operating Tenant’s right, title and interest in and
to, and Buyer shall assume all of such Seller’s and/or Operating Tenant’s
obligations and liabilities under, the Intangible Property first
accruing
from and after the Transfer Time, to the extent such assignments
are
legally and contractually permitted, (ii) the
applicable Seller shall indemnify, hold harmless and defend Buyer
from and
against any loss, cost or damage arising with respect to Intangible
Property prior to the Transfer Time
and (iii) Buyer
shall indemnify, hold harmless and defend the
applicable Seller
from and against any loss, cost or damage arising under any Intangible
Property from and after the Transfer
Time.
|
| 8. |
Assignment
and Assumption of Third Party Leases:
An assignment and assumption of Third Party Leases in the form attached
hereto as Schedule “D”
and by this reference incorporated herein, pursuant to which with
respect
to each of the Third Party Leases (i) the
relevant Seller shall assign and transfer to Buyer all of such Seller’s
right, title and interest in and to, and Buyer shall assume all of
such
Seller’s obligations and liabilities under, such Third Party Lease first
accruing from and after the Transfer Time, (ii) the
applicable Seller shall indemnify, hold harmless and defend Buyer
from and
against any loss, cost or damage arising under the Third Party Leases
prior to the Transfer Time
and (iii) Buyer
shall indemnify, hold harmless and defend the
applicable Seller
from and against any loss, cost or damage arising under the Third
Party
Leases from and after the Transfer
Time.
|
| 9. |
Assignment
and Assumption of Operating Agreements:
An assignment and assumption of the Operating Agreements in the form
attached hereto as Schedule “E”
and by this reference incorporated herein, pursuant to which
(i) each
Seller and/or Operating Tenant shall assign and transfer to Buyer
all of
such Seller’s and/or Operating Tenant’s right, title and interest in and
to, and Buyer shall assume all of such Seller’s and/or Operating Tenant’s
obligations and liabilities under, the Operating Agreements first
accruing
from and after the Transfer Time (ii) the
applicable Seller shall indemnify, hold harmless and defend Buyer
from and
against any loss, cost or damage arising under the Operating Agreements
prior to the Transfer Time
and (iii) Buyer
shall indemnify, hold harmless and defend the
applicable Seller
from and against any loss, cost or damage arising under the Operating
Agreement from and after the Transfer
Time.
|
| 10. |
Xxxx
of Sale (Personal Property):
A xxxx of sale in the form attached hereto as Schedule “F”
and by this reference incorporated herein, pursuant to which each
Seller
and/or Operating Tenant shall transfer and convey to Buyer the Personal
Property owned by such Seller and/or Operating Tenant in an “AS IS, WHERE
IS” condition and without recourse or express or implied warranty other
than such Seller’s and/or Operating Tenant’s limited warranty of title and
freedom from encumbrance (other than (i) any
liens or mortgages assumed or entered into by Buyer; or (ii) any
personal property sales tax or other tax incurred or assessed in
connection with the transfer of the Personal Property pursuant to
the
purchase and sales transactions contemplated by this
Agreement).
|
| 11. |
Broker:
Xxxxxx Xxxx Xxxxxxx.
|
| 12. |
Buyer:
W2005 New Century Hotel Portfolio,
L.P.
|
| 13. |
Closing:
The consummation of the transactions contemplated by this Agreement
which
shall occur on the Closing Date.
|
| 14. |
Closing
Date:
February 1, 2007, unless extended to a date no later than April 1,
2007 as expressly permitted in this Agreement, or such earlier date
agreed
to by Sellers and Buyer.
|
| 15. |
Closing
Statement:
As defined in Section 4.01.
|
| 16. |
Commercial
Leases:
Those
certain commercial and retail leases pursuant to which Sellers and/or
Operating Tenants lease portions of the Property for retail or commercial
purposes described on that certain rent roll attached hereto as
Schedule “G” and
incorporated herein by reference.
|
| 17. |
Confidential
Information:
As defined in Section 14.14 of this
Agreement.
|
| 18. |
Control:
“Control” shall mean:
|
the
power
to direct the management and policies of a Person, directly or indirectly,
whether through the ownership of voting securities or other beneficial
interests, by contract or otherwise, and the terms “Controlling”
and
“Controlled”
have
the meanings correlative to the foregoing.
| 19. |
Data
Room Web Site:
A
secure web site established by Sellers prior to the Effective Date
in
which various due diligence materials relating to the Property have
been
made available to Buyer prior to the Effective
Date.
|
| 20. |
Deeds:
The special warranty deeds in the form attached hereto as Schedule
“X”
and by this reference incorporated herein, pursuant to which Sellers
shall
convey to Buyer all of Sellers’ right, title and interest in and to the
Land and Hotels free and clear of all encumbrances save and except
for the
Permitted Exceptions relating to such Land and
Hotels.
|
| 21. |
Deposit:
The sum of Fifteen Million and No/100 ($15,000,000.00), and any interest
accrued thereon.
|
| 22. |
Effective
Date:
December __, 2006.
|
| 23. |
Employees:
Those individuals employed by Managers at the
Hotels.
|
| 24. |
Escrow
Agent:
The Talon Group, Orlando Commercial Services Division, a division
of First
American Title Insurance Company, whose address is 000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxx Xxxxx,
Esquire.
|
| 25. |
Franchise
Agreements:
All Franchise Agreements in effect with respect to the Hotels identified
on Schedule “H”
attached hereto.
|
| 26. |
Franchisors:
Each “Franchisor” or “Licensor” under the Franchise Agreements for the
Hotels.
|
| 27. |
Ground
Lease:
That certain ground lease agreement identified on Schedule “I”
attached hereto and by this reference incorporated herein, pursuant
to
which the Seller referenced therein holds a leasehold interest in
and to
the Hotel referenced therein.
|
| 28. |
Guaranty
of Franchise Agreements:
All guaranty agreements with respect to franchisee’s obligations under the
Franchise Agreements including without limitation those identified
on the
attached Schedule “J”.
|
| 29. |
Hotels:
The hotel buildings and all accessory buildings and structures, if
any,
and all fixtures placed on or attached thereto, located on the parcels
comprising the Land. Each of the Hotels is at times herein referred
to
individually as a Hotel.
|
| 30. |
House
Funds:
Cash on hand at or for the Hotels, including, without limitation,
xxxxx
cash funds and cashiers’ banks but exclusive of Reserve
Funds.
|
| 31. |
"Immaterial
Taking"
shall mean a taking of any portion of the land or improvements
constituting a portion of a Hotel that would cost less than the greater
of
One Million Dollars ($1,000,000) or seven and one-half percent (7.5%)
of
the Allocated Purchase Price for such Hotel (based upon the governmental
entity’s offer and appraisal or, if no such offer or appraisal has been
provided, based upon the mutual agreement of the applicable Seller
and
Buyer, acting reasonably) to rebuild the improvements as nearly as
possible to the same (but not less than) economic unit as it represented
prior to the taking, and does not materially adversely affect access
to
the improvements (any taking which results in the loss of the primary
access route to the improvements, whether such access is vehicular
or
pedestrian, is materially adverse), or compliance with applicable
zoning
or building requirements, including parking (any taking which results
in
the improvements not being able to be rebuilt upon the occurrence
of a
casualty is materially adverse).
|
| 32. |
Intangible
Property:
All of Sellers’ and Operating Tenants’ (and, to the extent consented to by
Managers, Managers’) respective right, title and interest in and to all
intangible property used in connection with the Land, Hotels or Personal
Property, including without limitation, all licenses and permits
((“Licenses
and Permits”)
but specifically excluding any and all licenses and permits to sell
alcohol, any tradename or trademark of Sellers and Managers and property
of Sellers not exclusively used at the Property, approvals, development
rights, vested rights, benefit, privilege, exemptions, authorizations
and
any and all entitlements, all guaranties and warranties related to
the
Hotels and the Personal Property or the construction, fabrication
or
maintenance thereof, all plans and specifications relating to the
Hotels
and any landscaping, telephone numbers, websites, website addresses,
marketing materials and any signage rights of Sellers or Operating
Tenants
or, to the extent consented to by Managers, Managers related to the
Hotels, and all books, records, reports, test results, environmental
assessments, surveys and other documents related to Sellers’ and Operating
Tenants’ and, to the extent consented to by Managers, Managers’
maintenance and repair of the
Property.
|
| 33. |
Inventory:
All inventory located at the Hotels, including without limitation,
all
mattresses, pillows, bed linens, towels and Operating
Supplies.
|
| 34. |
Land:
Those certain parcels of land more particularly described in Schedule “A”
attached hereto and by this reference incorporated herein, and all
rights
and appurtenances thereto.
|
| 35. |
Licenses
and Permits:
Defined hereinabove in the definition of Intangible
Property.
|
| 36. |
Licensed
Premises:
the areas within any Hotel described or otherwise identified in or
with
respect to a liquor license as licensed for the applicable Liquor
Operations.
|
| 37. |
Liquor
Inventory:
All liquor, wine, beer and other alcoholic beverages physically located
at
the Hotels and held for sale to guests and others or otherwise used
in the
operation of any Hotel, including (without limitation) the contents
of any
in-room servi-bars and mini-bars.
|
| 38. |
Liquor
Operations:
the sale and/or service of any Liquor
Inventory.
|
| 39. |
Management
Agreements:
Any and all management agreements relating to the Property identified
on
Schedule “K”
attached hereto.
|
| 40. |
Management
Termination Fees:
As defined in Section 1.06(c) of this
Agreement.
|
| 41. |
Managers:
Each “Manager” of a Hotel under and pursuant to the Management
Agreements.
|
| 42. |
Material
Operating Agreements:
Those Operating Agreements that (A)(i) require
more than thirty (30) days notice to terminate, or (ii) are
terminable upon notice of thirty (30) days or less and require payment
of
a termination fee, or (iii) are
not terminable by Sellers for convenience or upon sale of the affected
Property, and (B) either
(i) require
aggregate annual payments (including any termination fee) in excess
of
Twenty Thousand and No/100 Dollars ($20,000.00) per Operating Agreement
during the remaining term of such Operating Agreement after the Closing,
or (ii) have
an unexpired term following the Closing (including any mandatory
renewal
terms that are exercisable by the counterparty thereto) of more than
one
(1) year.
|
| 43. |
Material
REA’s.
Each of the reciprocal easement agreements, declaration of covenants
and
other easement agreements affecting the Property identified on
Schedule
“Z”
attached hereto.
|
| 44. |
Operating
Agreements:
All contracts, agreements, leases (including, but not limited to,
equipment leases but excluding Commercial Leases), maintenance agreements
and service contracts, to which Sellers or Managers are a party,
which are
in effect on the Closing Date and which relate to the ownership and/or
operation of the Hotels, including, without limitation, any such
agreements as are listed in Schedule “M”
attached hereto and by this reference incorporated herein, but
specifically excluding the Franchise Agreements, Ground Leases, Management
Agreements and the Operating
Leases.
|
| 45. |
Operating
Leases:
Those certain lease agreements by and between each Seller, as “Landlord”,
and each Operating Tenant, as “Tenant”, as amended, and more particularly
described on Schedule “N”
attached hereto and by this reference incorporated herein, pursuant
to
which each Operating Tenant leases its respective
Hotel.
|
| 46. |
Operations
Settlement:
An accounting prepared by Sellers’ and Buyer’s accountants in the period
between eight o’clock p.m. on the day prior to the Closing Date and eight
o’clock a.m. (local time) on the Closing Date, the results of which
shall
be incorporated into the closing
statement.
|
| 47. |
Operating
Supplies:
Any
and all operating supplies, whether consumables or non-consumables,
used
or consumed in the ordinary course of business at the Hotels and
owned by
the relevant Seller or Operating Tenant, including without limitation,
paper products; engineering maintenance and housekeeping supplies
including soap, and cleaning supplies; food, and alcoholic (to the
extent
transferable under applicable law) and non-alcoholic beverages and
other
supplies of all kinds, in each case whether partially used, unused
or held
in reserve storage for future use in connection with the maintenance
and
operation of the Hotel which are on hand on the date of this Agreement,
subject to such depletion and restocking as shall occur and be made
in the
normal course of business, excluding, however, items of property
owned by
tenants, guests, or employees.
|
| 48. |
Operating
Tenants:
Those entities identified as the Operating Tenant of each Hotel on
Schedule “O”
attached hereto which are affiliates of Sellers. Each such entity
is at
times herein referred to as an “Operating
Tenant.”
|
| 49. |
Other
Revenues:
All revenues earned by Sellers from the operation of the Hotels other
than
Room Revenues, including, without limitation, revenues from the sale
of
food, the sale of alcoholic and nonalcoholic beverages, rental of
meeting
and banquet rooms, telephone sales, pay television sales, vending
machine
sales, valet and parking services, and other similar revenues, together
with any sales tax or other taxes
thereon.
|
| 50. |
Permitted
Exceptions:
Any and all (i) general
taxes and assessments for the year of the Closing and thereafter,
and
special taxes and assessments not then due and payable as of the
Closing
Date; (ii) leases
and tenancies in writing for any areas of the Land or Hotels which
Buyer
has agreed in writing to assume pursuant to this Agreement (including,
without limitation, the Ground Leases, Third Party Leases and Commercial
Leases which Buyer shall assume at Closing); (iii) liens,
mortgages and encumbrances created by Buyer (iv) applicable
zoning regulations and ordinances and other governmental laws, ordinances
and regulations, provided the same do not prohibit or impair in any
material respect, the use of the Property as it is currently being
used
and (v) any
title exceptions or survey matters reflected in the Title Insurance
Commitments and on the Surveys, and any title or survey matters objected
to by Buyer, which objections are subsequently waived by Buyer, except
that in no event shall Permitted Exceptions include (x) monetary
liens and mortgages (not created by Buyer), which shall be paid by
Sellers
at Closing, (y) exceptions and/or survey matters described on
Schedule “S”,
which in accordance with Article XI Sellers shall use good faith
efforts to cause to be removed prior to Closing and (z) encumbrances
voluntarily created by Sellers after October 31, 2006, which Sellers
shall remove prior to Closing.
|
| 51. |
Person:
Any natural person, firm, corporation, general or limited partnership,
limited liability company, association, joint venture, trust, estate,
governmental authority or other legal entity, in each case whether
in its
own or a representative capacity.
|
| 52. |
Personal
Property:
All furniture, furnishings, fixtures, equipment, vehicles, machinery,
appliances, dishes, utensils, cookware, materials and Inventory,
located
at the Hotels, owned by any Seller or any Operating Tenant, and used
solely in connection with the operation of the Hotels, but (subject
to the
provisions of Section 1.02) specifically excluding any Personal
Property that is leased by any Seller from a
third-party.
|
| 53. |
Pleasanton
Hotel Commercial Lease:
That certain Commercial Lease, dated as of April 24,
1996 , by and between XXX Enterprises-XI, as Landlord,
and Faz Restaurant Danville, Inc., as Tenant, as amended
from time to time, relating to that certain Hotel commonly known
as Four Points Hotel
Pleasanton.
|
| 54. |
Property:
A
collective term which shall mean all of the Land, Hotels, Intangible
Property and Personal Property.
|
| 55. |
Purchase
Price:
The amount specified in Section 2.01 as the purchase price for the
Property.
|
| 56. |
Purchase
Price Allocation Schedule:
The schedule attached hereto as Schedule “P”
pursuant to which the Purchase Price is allocated among each Property
for
the purposes of calculating title insurance premiums and other closing
costs.
|
| 57. |
Rent
Roll:
As defined in Section 6.01(k) of this
Agreement.
|
| 58. |
Representatives:
As defined in Section 14.14 of this
Agreement.
|
| 59. |
Reserve
Funds:
All funds held in bank accounts, cash accounts and reserve accounts
for
furniture, fixtures and equipment, for capital expenditures, or for
other
matters relating to the operation of the Hotels, whether such accounts
are
held in the name of the Sellers, Operating Tenants or Managers on
behalf
of Sellers or Operating Tenants.
|
| 60. |
Room
Revenues:
All revenues from the rental of guest rooms of the Hotels (but excluding
any items included in the definition of Other Revenues), together
with any
and all sales or other taxes
thereon.
|
| 61. |
Sellers:
Shall mean those entities more particularly described on Schedule “Q”
attached hereto and by this reference incorporated herein. Each such
entity is at times herein referred to as a
“Seller.”
|
| 62. |
Sellers’
Knowledge:
The actual knowledge of Xxxxxx Xxxxxxx and Xxxxx Xxxxxxx, without
any duty
of inquiry or investigation, and expressly excluding the knowledge
of any
other shareholder, partner, member, trustee, beneficiary, director,
officer, manager, employee, agent or representative of the Sellers
or any
of their Affiliates. For the purposes of this definition, the term
“actual
knowledge”
means, with respect to any Person, the conscious awareness of such
Person
at the time in question, and expressly excludes any constructive
or
implied knowledge of such Person.
|
| 63. |
Sheraton
Hotel Sunnyvale Commercial Lease.
That certain Commercial Lease, dated as of July 27, 1995, by and
between
XXX Enterprises VIII, as Landlord, and Faz Restaurant Danville, Inc.,
as
Tenant, as amended from time to time, relating to that certain Hotel
commonly known as the Sheraton Hotel
Sunnyvale.
|
| 64. |
Surveys:
The surveys of each parcel comprising the Land and the Hotel located
on
such parcel and any updates to such surveys, in each case, obtained
by
Buyer prior to execution of this Agreement. Each of the Surveys is
at
times herein referred to as a
“Survey.”
|
| 65. |
Third
Party Leases:
Those certain lease agreements more particularly describe in Schedule “L”
attached hereto and by this reference incorporated herein pursuant
to
which each Seller referenced therein leases the Land and Hotel more
particularly described therein to the third-party lessee more particularly
described therein. Each of the Third Party Leases is at times herein
referred to as a Third Party Lease.
|
| 66. |
Title
Company:
First American Title Insurance Company through the Talon Group, Orlando
Commercial Services Division, a division of First American Title
Insurance
Company, whose address is 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxx 00000, Attention: Xxxxxxx Xxxxx,
Esq.
|
| 67. |
Title
Insurance Commitments:
The First American Title Insurance Company commitments of title insurance
issued by the Title Company with respect to the issuance of owner’s title
insurance policies, using (i) if
the 2006 ALTA form has been adopted in the jurisdiction where the
applicable Hotel is located, the 2006 ALTA form (or its local equivalent),
or (ii) if
the 2006 ALTA form has not been adopted in the jurisdiction where
the
applicable Hotel is located, the 1992 ALTA form (or its local equivalent),
at Closing with regard to the interest of Sellers in and to the Land
which
is to be conveyed to Buyer pursuant to this Agreement. Each of the
Title
Insurance Commitments is at times herein referred to as a “Title
Commitment.”
|
| 68. |
Title
Policies:
The owner’s policies of title insurance to be issued to Buyer pursuant to
the terms of the Title Insurance Commitments, using (i) if
the 0000 XXXX form has been adopted in the jurisdiction where the
applicable Hotel is located, the 2006 ALTA form (or its local equivalent),
or (ii) if
the 2006 ALTA form has not been adopted in the jurisdiction where
the
applicable Hotel is located, the 1992 ALTA form (or its local equivalent).
Each of the Title Policies is at times herein referred to as a “Title
Policy”.
|
| 69. |
Transfer
Time:
12:01 a.m. (local time) on the Closing
Date.
|
| 70. |
Tray
Ledgers:
Any accounts receivable of registered guests who have not checked
out and
who are occupying rooms on the evening prior to, and the morning
of, the
Closing Date.
|
| 71. |
WARN:
As defined in Section 5.02 of this
Agreement.
|
AGREEMENT
ARTICLE
I.
ASSETS
PURCHASED AND SOLD
Section
1.01. Purchase
and Sale.
Subject
to the terms and conditions of this Agreement and in consideration of the
performance of the covenants contained herein, Buyer agrees to purchase from
Sellers and Sellers agree to sell to Buyer, the Property.
Section
1.02. Personal
Property.
Subject
to the terms and conditions of this Agreement, at Closing, Sellers agree
to
assign, transfer and convey to Buyer all of Sellers’ right, title and interest
in and to the Personal Property pursuant to the Xxxx of Sale (Personal
Property). In the event that any Personal Property is owned by any Operating
Tenant, Sellers agree to cause such Operating Tenant to assign, transfer
and
convey to Buyer any such Personal Property at Closing, pursuant to a xxxx
of
sale in the same form as the Xxxx of Sale (Personal Property). In the event
that
any Personal Property is owned by any Manager, Sellers agree to use commercially
reasonable efforts to cause such Manager to assign, transfer and convey to
Buyer
any such Personal Property at Closing, pursuant to a xxxx of sale in the
same
form as the Xxxx of Sale (Personal Property).
Section
1.03. Operating
Agreements.
At
Closing, Sellers shall assign and transfer to Buyer all of Sellers’ right, title
and interest in and to, and Buyer shall assume all of Sellers’ obligations and
liabilities first arising from and after the Transfer Time under, the Operating
Agreements pursuant to the Assignment and Assumption of Operating Agreements.
Sellers have, to Sellers’ Knowledge (in the Data Room Web Site or by hard copy),
provided Buyer with complete copies of all Operating Agreements which were
in
effect as of the Effective Date. Sellers shall promptly provide Buyer with
complete copies of any other Operating Agreements entered into subsequent
to the
Effective Date and prior to the Closing Date. Buyer shall pay all out of
pocket
fees and expenses of third parties under the Operating Agreements required
to be
paid by Sellers in regard to such assignments or transfers, including any
transfer charges reasonably necessary to obtain the consent of any such third
party. Sellers
will not enter into any Operating Agreement(s) which will obligate Buyer
following Closing, except those which (i) are terminable without payment or
penalty on thirty (30) or fewer days notice or (ii) have otherwise been
reasonably approved by Buyer. Buyer shall have five (5) days to approve or
disapprove any new Operating Agreement to be entered into prior to Closing
following a written request therefore by Sellers, which approval may be
granted or withheld in Buyer’s reasonable discretion. Buyer’s failure to provide
a written response to Sellers within five (5) days following a written request
from Sellers shall be deemed an approval of such new Operating Agreement
by
Buyer.
Buyer
understands and agrees that it is solely Buyer’s responsibility to obtain any
and all Operating Agreements necessary to conduct business at the Hotels
from
and after the Closing Date. Buyer’s failure to obtain any Operating Agreements
which are necessary or convenient to the operation of the Hotels shall not
affect or delay the performance of Buyer’s obligations under this Agreement. In
the event that any Operating Tenant is a party to and holder of rights under
any
Operating Agreement, Sellers agree to cause such Operating Tenant to assign
and
transfer such rights to Buyer at Closing, pursuant to an assignment and
assumption agreement in the same form as the Assignment and Assumption of
Operating Agreements. In the event that any Manager is a party to and holder
of
rights under any Operating Agreement, Sellers agree to use commercially
reasonable efforts to cause such Manager to assign and transfer such rights
to
Buyer at Closing, pursuant to an assignment and assumption agreement in the
same
form as the Assignment and Assumption of Operating Agreements
Section
1.04. Intangible
Property.
At
Closing, Sellers shall assign and transfer to Buyer all of Sellers’ right, title
and interest in and to, and Buyer shall assume all of Sellers’ obligations and
liabilities first arising from and after the Transfer Time under, the Intangible
Property, pursuant to the Assignment and Assumption of Intangible Property.
Sellers have, to Sellers’ Knowledge, provided Buyer (in the Data Room Web Site
or by hard copy) with copies of all documents comprising the Intangible Property
in Sellers’ possession or control and in effect as of the Effective Date. Seller
shall promptly provide Buyer with copies of any documents comprising Intangible
Property issued to Sellers or entered into by Sellers subsequent to the
Effective Date and prior to the Closing Date. Buyer understands and agrees
that
it is solely Buyer’s responsibility to obtain any and all Intangible Property
necessary to conduct business at the Hotels from and after the Closing Date.
Buyer’s failure to obtain any Intangible Property which is necessary or
convenient to the operation of the Hotels shall not affect or delay the
performance of Buyer’s obligations under this Agreement. In the event that any
Operating Tenant is the holder of rights under any Intangible Property, Sellers
agree to cause such Operating Tenant to assign and transfer such rights to
Buyer
at Closing, pursuant to an assignment and assumption agreement in the same
form
as the Assignment and Assumption of Intangible Property. In the event that
any
Manager is the holder of rights under any Intangible Property, Sellers agree
to
use commercially reasonable efforts to cause such Manager to assign and transfer
such rights to Buyer at Closing, pursuant to an assignment and assumption
agreement in the same form as the Assignment and Assumption of Intangible
Property
Section
1.05. Franchise
Agreements.
Buyer
agrees to use diligent and good faith efforts, prior to Closing, to enter
into
new franchise agreements with the Franchisors to replace the existing Franchise
Agreements. Sellers agree to cooperate with Buyer and the Franchisors (at
no
expense to Sellers) in the applications for new franchise agreements and
Franchisors’ review process. Sellers and Buyer agree that it shall be a
condition to closing that the Franchisors offer to Buyer new franchise
agreements to replace the existing Franchise Agreements (i) in
substantially the same form as the existing Franchise Agreements,
(ii) requiring franchise fees no greater than those in the existing
Franchise Agreements and (iii) (a) with expiration dates as specified on
Schedule
“DD”
(collectively, the “Minimum
Franchise Terms”).
If,
on or before the Closing Date the Franchisors offer the Buyer new franchise
agreements on such Minimum Franchise Terms, and Buyer refuses to accept
Franchisors’ offer, then Buyer will be obligated to close nonetheless and Buyer
will be responsible for the termination fees, if any, due to any Franchisor
pursuant to the Franchise Agreements. If by the Closing Date, despite Buyer’s
diligent and good faith efforts, Buyer and Franchisor have not completed
the
process to enter into new franchise agreements with the Franchisors required
to
replace the existing Franchise Agreements on the Minimum Franchise Terms,
then
the Closing Date shall be extended for a reasonable period of time (but in
any
event not beyond April 1, 2007) to allow Buyer to obtain all such franchise
agreements. If, on or before the Closing Date despite Buyer’s good faith and
diligence efforts, the Franchisors do not offer Buyer new franchise agreements
for any Hotels on such Minimum Franchise Terms, or if after having agreed
to
offer Buyer a new franchise agreement on such Minimum Franchise Terms, a
Franchisor revokes its agreement to offer such a new franchise agreement,
even
though Buyer has agreed to perform all PIPs required by the Franchisor for
such
Hotel (copies of which PIPs have been provided to Buyer and Sellers prior
to the
Effective Date) then Buyer may terminate this Agreement with respect to such
Hotel and the Purchase Price shall be reduced by the Allocated Purchase Price
for such Hotel.
Section
1.06. Management
Agreements.
(a) Sellers
shall terminate or cause the applicable Operating Tenant under each of the
Management Agreements to terminate such Management Agreements as of or prior
to
Closing. Sellers shall provide written notice of termination to the Managers
of
the Management Agreements within three (3) business days of the Effective
Date
in the form and manner required pursuant to each such Management Agreement.
In
the event any Management Agreement requires a minimum notice period prior
to
termination that extends beyond the Closing Date and the applicable Manager
thereunder does not agree to an earlier termination of such Management
Agreement, Sellers shall have the right to postpone the Closing Date for
a
period of time not to exceed 60 days or until the earliest date on which
all such Management Agreements can be terminated, whichever is
earlier.
(b) At
Closing, Sellers shall pay all costs whatsoever including all applicable
termination fees with respect to the termination of the Management Agreements
(the “Management Termination Fees”).
Section
1.07. Land
and Hotels.
At
Closing, Sellers shall convey title to the Land and Hotels to Buyer pursuant
to
the Deeds and shall convey the leasehold interest in the Land and improvements
which the applicable Seller occupies pursuant to the Ground Lease by the
Assignment and Assumption of Ground Lease.
Section
1.08. Operating
Leases.
Effective as of the Closing, Sellers, at Sellers’ sole cost and expense, shall
terminate the Operating Leases, such termination to be effective at or prior
to
Closing.
ARTICLE II.
PURCHASE
PRICE
Section
2.01. Price.
The
Purchase Price for the Property shall equal Four Hundred Five Million and
No/100
Dollars ($405,000,000.00), plus (ii) the
cost
of Operating Supplies which are unopened case goods and which are to be conveyed
to Buyer at Closing, all cash, and subject to closing adjustments as provided
in
this Agreement.
Section
2.02. Deposit.
Upon
mutual execution and delivery of this Agreement, Buyer shall deposit an amount
equal to the Deposit, in the form of a cashier’s or certified check or wire
transfer, with the Escrow Agent. In the event that the Deposit has not been
lodged with Escrow Agent within one (1) business day following the Effective
Date, this Agreement shall immediately terminate. The Deposit shall be deposited
by the Escrow Agent into an interest-bearing, fully insured account, as directed
by Buyer. Except as otherwise provided in Section 14.01 hereof, the Deposit
shall be applied to payment of the Purchase Price at Closing or shall otherwise
be paid as herein provided. Buyer acknowledges and agrees that the Deposit
is
“At Risk” with respect to a default by Buyer of its obligations to close the
purchase and sale transaction as set forth in this Agreement (as specifically
set forth in Section 8.01); provided that at any time after the failure of
a condition to Buyer’s obligations under this Agreement, as set forth in
Section 9.02, the Deposit shall, upon written notice from Buyer to Escrow
Agent, be immediately refunded to Buyer. All interest earned in said account
of
the Escrow Agent shall be for the account of Buyer and reported by the Escrow
Agent to the Internal Revenue Service as income to Buyer (and Buyer agrees
to
execute a W-9 form and any other federal tax documents necessary in connection
therewith).
Section
2.03. Balance
of Purchase Price.The
balance of the Purchase Price for the Property (subject to the adjustments
and/or prorations provided in this Agreement) shall be paid by Buyer by wire
transfer of good and immediately available funds to Escrow Agent at Closing
as
set forth in Section 12.02.
Section
2.04. Reserve
Funds.
The
Reserve Funds are the sole property of Sellers and shall be retained by Sellers
at Closing.
Section
2.05. Escrow
Agent.
The
Escrow Agent in its capacity as holder of the Deposit in escrow joins in
the
execution of this Agreement for the limited purpose of acknowledging and
agreeing to the provisions of this Section 2.05.
(a) The
duties of the Escrow Agent shall be as follows:
(1) The
Escrow Agent shall hold and disburse the Deposit in accordance with the terms
and provisions of this Agreement.
(2) If
this
Agreement shall be terminated by the mutual written agreement of Sellers
and
Buyer, or if the Escrow Agent shall be unable to determine at any time to
whom
the Deposit should be paid, or if a dispute shall develop between Sellers
and
Buyer concerning to whom the Deposit should be paid and delivered, then and
in
any such event, the Escrow Agent shall pay and deliver such in accordance
with
the joint written instructions of Sellers and Buyer. In the event that such
written instructions shall not be received by the Escrow Agent within ten
(10)
days after the Escrow Agent has served a written request for instructions
upon
Sellers and Buyer, then the Escrow Agent shall have the right to pay and
deliver
the Deposit into an appropriate court of proper jurisdiction in the state
of
Florida, and interplead Sellers and Buyer in respect thereof, and thereupon
the
Escrow Agent shall be discharged of any obligations in connection with this
Agreement.
(b) If
costs
or expenses are incurred by the Escrow Agent in its capacity as holder of
the
Deposit in escrow because of litigation or a dispute between Sellers and
Buyer
arising out of the holding of the Deposit in escrow, Sellers and Buyer shall
each pay the Escrow Agent one-half of such reasonable costs and expenses
not to
exceed a total of $10,000.00. Except for such costs or expenses, no fee or
charge shall be due and payable to the Escrow Agent for its services as escrow
holder only.
(c) By
joining herein, the Escrow Agent undertakes only to perform the duties and
obligations imposed upon the Escrow Agent under the terms of this Agreement
and
expressly does not undertake to perform any of the other covenants, terms
and
provisions incumbent upon Sellers and Buyer hereunder.
(d) Buyer
and
Sellers hereby agree and acknowledge that the Escrow Agent assumes no liability
in connection herewith except for its negligence or willful misconduct; that
the
Escrow Agent shall never be responsible for the validity, correctness or
genuineness of any document or notice referred to under this Agreement; and
that
in the event of any dispute under this Agreement, the Escrow Agent may seek
advice from its own legal counsel and shall be fully protected in any action
taken by it in good faith in accordance with the good faith opinion of its
legal
counsel.
ARTICLE
III.
OPERATION
OF THE PROPERTY
Section
3.01. Operation
in the Ordinary Course of Business.
Sellers
shall not (and Sellers shall cause Operating Tenants to not, and use
commercially reasonable efforts to cause Managers to not), without the prior
written consent of Buyer, (i) enter
into any material leases or tenancies with respect to the Property,
(ii) enter
into any material service or maintenance agreements which are not terminable
upon thirty (30) days notice without penalty, (iii) except
in
the ordinary course of business, engage or retain any new or additional
employees, entities or independent contractors whose compensation may be
assumable by Buyer (or reimbursable by Buyer to a Manager), (iv) modify
or
release any material warranties or guaranties with respect to the Property,
or
(v) grant
any
encumbrances on the Property or contract for any construction or service
for the
Property which may impose any mechanics or materialmen’s lien on the
Property beyond Closing, except as otherwise specifically contemplated in
this
Agreement. Buyer shall have five (5) business days to approve or disapprove
any of the foregoing proposed actions following a written request therefore
by
any Seller, which
approval may be granted or withheld in Buyer’s sole but reasonable
discretion. Buyer’s failure to provide a written response to the applicable
Seller within five (5) business days following a written request from Sellers
shall be deemed an approval of such proposed action by Buyer. Sellers shall,
and
shall cause Operating Tenants to use reasonable efforts to (a) cause the
Managers to maintain inventory levels consistent with the applicable Manager’s
prior practices and continue to operate the Property in the ordinary course
of
business consistent with present standards, including without limitation
with
respect to the Property’s books and accounts (provided that notwithstanding any
term of this Section 3.01, Section 1.03 or any other provision of this
Agreement, Managers shall at all times be entitled to exercise all of its
rights
contained in, and to perform all of its duties and obligations under, the
Management Agreements); (b) maintain in effect insurance policies presently
in effect with respect to the Hotels, or reasonable renewals of expiring
policies, (c) cause to be paid before delinquency all ad valorem, occupancy
sales and other similar taxes due and payable for the Property or the operation
of the Hotels, (d) not remove or cause or permit to be removed any part or
portion of the Personal Property unless the same is replaced, before Closing,
with similar items of at least equal suitability, quality and value; provided,
however, that inventory shall be used and replenished in accordance with
applicable Manager’s normal business practices, (e) use commercially
reasonable efforts to preserve in force all existing Licenses and Permits
and to
cause all those expiring to be renewed (if renewable) prior to the Closing
Date
(if any such License and Permit shall be suspended or revoked, the applicable
Seller shall promptly so notify Buyer and shall take all reasonable measures
necessary to cause the reinstatement of such Permit), and (f) cause the
applicable Manager to continue to use commercially reasonable efforts to
take
guest room reservations and to book functions and meetings and otherwise
to
promote the business of the Property in generally the same manner as such
Manager did before the execution of this Agreement. The applicable Seller
shall
promptly advise Buyer of any litigation, arbitration or administrative hearing
concerning or affecting the Property of which any such Seller or any applicable
Operating Tenant receives written notice.
Section
3.02. Liquor
Licenses.
(a) Buyer
shall use diligent and good faith efforts, and shall be responsible, at
its
expense,
for preparing, filing and prosecuting all applications before governmental
authorities for the transfer or re-issuance of the liquor licenses at the
Hotels
to Buyer. Sellers shall cooperate with Buyer (at no cost or expense to Sellers),
and shall use commercially reasonable efforts to cause the Managers to cooperate
with Buyer (at no cost or expense to Managers), in any manner reasonably
requested by Buyer as required to successfully transfer the existing liquor
licenses or effectuate the issuance of new liquor licenses to Buyer including,
without limitation, providing and/or executing any and all forms, certificates,
agreements or other documents in the form required by the relevant liquor
board
or licensing authority to (i) transfer
and/or surrender current liquor licenses, (ii) issue
new
liquor licenses to Buyer and (iii) transfer
closed Liquor Inventory where lawfully permitted.
(b) Notwithstanding
any other provision of this Agreement, the Liquor Inventory shall be sold
and
transferred to Buyer only in such manner as complies with applicable alcoholic
beverage control laws and the terms of the liquor licenses. If applicable
law
requires that the Liquor Inventory of any Hotel (or any other aspect of the
Liquor Operations of any Hotel) be transferred in a transaction separate
and
apart from the sale and purchase of such Hotel, then: (A) such Liquor
Inventory shall be excluded from the Property sold as part of such Hotel
under
this Agreement, and (B) Buyer shall in good faith negotiate with the holder
of the liquor licenses (and Sellers, if not the holder of the liquor licenses,
shall use good faith efforts to cause the holder of the liquor licenses to
negotiate in good faith with Buyer) a separate agreement to close concurrently
with Closing for such Hotel or as soon thereafter as practicable, for the
transfer of such Liquor Inventory and the transfer of such Liquor Operations
to
Buyer, provided
that
Buyer
shall not be required to pay any additional consideration for the Liquor
Inventory and if the holders of the liquor licenses require any additional
consideration for the Liquor Inventory, the Purchase Price shall be reduced
by
the amount of such additional consideration.
(c) If
Purchaser has used diligent and good faith efforts prior to Closing to obtain
the transfer or re-issuance of the liquor licenses at the Hotels to Buyer,
but
is unable by the Closing Date to obtain the transfer or re-issuance of any
liquor licenses to the operation of any hotel designated on Schedule “T”,
then,
unless the current holders of the relevant liquor licenses agree to enter
into
leases, concession agreements or other arrangements described in
Section 3.02(d) below, the Closing Date shall be extended for a reasonable
period of time (but in any event, not beyond April 1, 2007) to allow Buyer
to obtain the transfers or re-issuances of the liquor licenses at the Hotels
to
Buyer. However, if at the end of such extension period, Buyer is unable to
obtain the transfers or re-issuances of the liquor licenses at the Hotels
to
Buyer, then, unless the current holders of the relevant liquor licenses agree
to
enter into leases, concession agreements or other arrangements described
in
Section 3.02(d) below, this Agreement will automatically terminate with
respect to the Hotels where Buyer has not yet obtained the transfer or
re-issuance of the liquor license to Buyer, and the Purchase Price shall
be
reduced by the Allocated Purchase Price for such excluded Hotels.
(d) At
Buyer’s request, Sellers shall request the current holder of any liquor license
to enter into a lease, concession agreement or other arrangement in form
and
substance reasonably satisfactory to Sellers, which shall commence as of
the
Closing Date and continue for a term of 365 days (or shorter, as Buyer
may elect) and contain other commercially reasonable terms, under which the
applicable Liquor Operations and the Licensed Premises would continue to
be
operated under the now-existing liquor license until such time as all necessary
approvals have been granted and Buyer is able lawfully to take over the Licensed
Premises and applicable Liquor Operations or expiration of the term whichever
first occurs. In such event, Buyer shall indemnify the applicable Sellers,
Operating Tenant and such person in form and substance reasonably satisfactory
to the Sellers and such holder of the liquor license. Buyer shall reimburse
and
indemnify Sellers and Operating Tenants for any claims incurred by them in
connection with any lease, concession agreement or other arrangement entered
into in accordance with this Section
3.02(d).
To the
maximum extent permitted by applicable laws, any such arrangement shall be
structured so as to preserve to Buyer or Sellers the economic or other benefits
of the transactions contemplated by this Agreement and, in any event, so
as to
indemnify Sellers and Operating Tenants, any personal signatory and the holder
of the existing liquor license from and against any claim, loss, liability,
expenses or damages related to the licensed activities after
Closing.
This
Section 3.02(d)
shall
survive the Closing.
Section
3.03. Tenant
Estoppels.
Sellers
shall use commercially reasonable efforts to obtain and deliver to Buyer
prior
to the Closing Date, written estoppel certificates in the form attached hereto
as Schedule
“V”
(or as
otherwise may be specified in any Commercial Lease or with such
modifications on which Buyer, Sellers and the applicable tenant reasonably
may mutually agree) (each a “Tenant Estoppel”) signed by each of the
tenants under any Commercial Leases. Sellers shall initially deliver to each
of
the tenants under the Commercial Leases the form of Tenant Estoppels attached
hereto as Schedule
“V”.
Notwithstanding anything herein contained to the contrary, Sellers’ inability to
obtain any Tenant Estoppel shall not constitute a default by Sellers hereunder
nor shall delivery of any Tenant Estoppel (other than the Tenant Estoppel
to be
delivered by the tenant under the Pleasanton Hotel Commercial Lease and the
Tenant Estoppel to be delivered by the tenant under the Sheraton Hotel Sunnyvale
Commercial Lease) be a condition to Buyer’s obligation to close
hereunder.
Section
3.04. REA
Estoppels.
Sellers
shall use commercially reasonable efforts to obtain and deliver to Buyer
prior
to the Closing Date, written estoppel certificates in the form attached hereto
as Schedule
“AA”
or in
the form specified in the applicable Material REA, or in such other form
to be
agreed upon by each of Buyer and the party under the applicable Material
REA
(each a “REA Estoppel”) signed by each of the parties under the REAs. Sellers
shall initially deliver to each party to a Material REA the form of REA Estoppel
attached hereto as Schedule
“AA”.
Delivery of an REA Estoppel from each party to items 7, 8 and 9 of the Material
REA’s shall be a condition to closing. Notwithstanding anything herein contained
to the contrary, Sellers’ inability to obtain any REA Estoppel shall not
constitute a default by Seller hereunder nor shall delivery of any REA Estoppel
(other than those REA Estoppels specified in the preceding sentence) be a
condition to Buyer’s obligation to close hereunder.
Section
3.05. Third
Party Lessee Estoppels.
Sellers
shall obtain and deliver to Buyer prior to the Closing Date, written estoppel
certificates in the form attached hereto as Schedule
“W”
or in
the form specified in the applicable Third Party Lease, or in such other
form to
be agreed upon by each of Buyer and Third Party Lessee under the applicable
Third Party Lease (each a “Third Party Lease Estoppel”) signed by each of the
Third Party Lessees under the Third Party Leases. Sellers shall initially
deliver to each of the Third Party Lessees under the Third Party Leases the
form
of estoppel certificates attached hereto as Schedule
“W”.
Delivery of a Third Party Lease Estoppel from each Third Party Lessee under
the
Third Party Leases shall be a condition to Closing.
Section
3.06. Ground
Lessor’s Certificate.
Sellers
shall use diligent and good faith efforts to obtain and deliver to Buyer
prior
to the Closing Date, the Ground Lessor’s Certificate. Notwithstanding anything
herein contained to the contrary, Sellers’ inability to obtain the Ground
Lessor’s Certificate shall not constitute a default by Sellers hereunder nor
shall the delivery of the Ground Lessor’s Certificate be a condition to Buyer’s
obligation to close hereunder.
ARTICLE
IV.
PRORATIONS
AND ADJUSTMENTS
Section
4.01. Closing
Statement/Operations Settlement.
(a) Closing
Statement.
Taxes,
rents, revenues and expenses pertaining to assigned Operating Agreements,
prepaid utility charges, and material deviations, if any, in the amount of
the
Personal Property at the Hotels shall be allocated and prorated between Buyer
and Sellers pursuant to a written closing statement (the “Closing
Statement”)
to be
jointly prepared by Buyer and Sellers and executed by Buyer and Sellers at
the
Closing. Any additional amounts owed by Buyer or credits due to Buyer shall
be
reflected in such statement and the Purchase Price shall be adjusted
accordingly. Any apportionments and prorations which are not expressly provided
for in this Agreement shall be made in accordance with customary practice
for
hotel purchase and sale transactions in the jurisdiction which the applicable
Hotel is located.
(b) Operations
Settlement.
Room
Revenues for the night preceding the Closing Date (e.g., if the Closing Date
is
January 31, 2007, Room Revenues for the period of time commencing on the
evening of January 30, 2007 and ending on the morning of January 31,
2007), prepaid deposits for reservations, hotel facilities and services for
periods after the Transfer Time, and the purchase price for the Tray Ledgers,
House Funds, Operating Supplies and Accounts Receivable shall be determined
by
the Operations Settlement. In connection with the Closing, Buyer agrees to
each
Manager’s completion of posting of financial activity, all schedules, credit
card xxxxxxxx, and all other activities normally associated with the daily
activity of the Hotels. Any amounts determined to be due and owing to Sellers
by
Buyer or to Buyer by Sellers pursuant to the Operations Settlement shall
be
incorporated into the Closing Statements but to the extent that any of the
foregoing information is unavailable or is found to be inaccurate, the same
shall be handled as a post-closing adjustment conducted
within one hundred twenty (120) days following Closing, the obligations of
the
parties to perform such post-closing adjustment shall survive Closing. Except
as
set forth in Section 4.02, any matter not raised by either Buyer or Sellers
within such one hundred twenty (120) day period following Closing shall not
result in a post-closing adjustment.
Section
4.02. Taxes
and Rents.
At
Closing, all general real estate and personal property taxes for the year
of the
Closing and special taxes and assessments shall be prorated as of the Closing
Date (with Buyer to pay taxes attributed to the Closing Date and all periods
thereafter) using the latest available tax rates and assessments and taking
advantage of any discounts or rebates available for early payment and/or
payment
before delinquency. The
parties shall readjust the prorations with respect to such taxes and assessments
within one (1) year following the Closing; provided, further that, if the
proration is based upon the previous tax year’s bills, the parties shall make an
appropriate adjustment upon receipt of the current tax year’s bills. Sellers
shall pay general real estate and personal property taxes for all periods
prior
to the date of the Closing and all special taxes or assessments then due
and
payable as of the Closing Date, except that, if any assessment against the
Property, or any portion thereof, is payable in installments, Buyer shall
pay
any and all of such installments which may be paid after the Closing Date,
and any installment relating to the year of Closing shall be prorated as
of the
Closing Date (with Buyer to pay all portions of such installment attributed
to
the Closing Date and all periods thereafter). Any tax refunds or rebates
occurring or accruing with respect to any and all time periods before the
Closing Date shall remain the property of Sellers, and, if Buyer collects
or
receives same, Buyer shall promptly remit same to Sellers. The provisions
of the
immediately preceding sentence shall survive the Closing. All taxes or
assessments which become due and payable on or after the Closing Date shall
be
paid by Buyer. Any increases and/or reassessments prior to the Closing Date
shall be paid by the Sellers. Any amounts determined to be due and owing
to
Sellers by Buyer or to Buyer by Sellers pursuant to the Operations Settlement
shall be incorporated into the Closing Statement but to the extent that any
of
the foregoing information is unavailable or is found to be inaccurate, the
same
shall be handled as a post-closing adjustment conducted within one (1) year
following Closing, and the obligations of the parties to perform such
post-closing adjustment shall survive Closing. Any matter not raised by either
Buyer or Sellers within such one (1) year period following Closing shall
not
result in a post-closing adjustment.
Section
4.03. Utilities.
(a) Prior
to
the Closing, Sellers shall notify all utility companies servicing their
respective portions of the Property of the anticipated change in ownership
of
the Property and request that all xxxxxxxx after the Transfer Time be made
to
Buyer at the addresses of the Hotel located on their portion of the Property.
Utility meters will be read, to the extent that the utility company will
do so,
during the daylight hours on the Closing Date, with charges to that time
paid by
Seller and charges thereafter paid by Buyer. Prepaid utility charges shall
be
adjusted on the Closing Statement and paid for at Closing. Charges for utilities
which are unmetered, or the meters for which have not been read on the Closing
Date, will be prorated between Buyer and Seller as of the Transfer Time based
upon utility xxxxxxxx received after Closing. To the extent different than
the
Closing Statement, Sellers or Buyer, as appropriate, shall, upon receipt,
submit
a copy of the utility xxxxxxxx for any such charges to the other party and
such
party shall pay its pro rata share of such charges to the party requesting
payment within seven (7) business days from the date of any such request.
This
obligation shall survive Closing.
(b) Sellers
shall receive a credit for all deposits made by Sellers or Operating Tenants
as
security under contracts with utility companies if the same are transferable
and
provided such deposits remain on deposit for the benefit of the Buyer. If
the
deposits, or any of them are not transferable, Buyer shall be responsible
for
paying, before the Closing, all such deposits required by utility companies
in
order to continue service at the Hotels for periods after the Transfer Time
and
shall take any other action and make any other payments required to assure
uninterrupted availability of utilities at the Hotels and the Land for all
periods after Closing. Following Closing, all utility deposits made by Sellers
which are not transferable shall be refunded directly to Sellers by the utility
company holding same. This obligation shall survive Closing.
Section
4.04. Assigned
Operating Agreements.
(a) All
income and expenses with respect to the assigned Operating Agreements will
be
prorated as of the Closing Date (with income and expenses for the Closing
Date
and thereafter to be allocated to Buyer). There
shall be added to the amount due to Buyer at Closing, on the Closing Statement,
the amount of any prepaid rents applicable to periods following Closing,
security deposits, or other deposits previously paid to Sellers (or for which
Buyer will otherwise be liable) under any assigned Operating Agreements,
and
there shall be deducted from the amount due Sellers at Closing, on the Closing
Statement, any such amounts paid to and collected by Sellers (or for which
Buyer
will otherwise be liable) under any Operating Agreements attributable to
periods
including and after the Closing Date.
(b) Sellers
shall be responsible for all management fees and other amounts payable or
reimbursable under the Management Agreements that accrue prior to or subsequent
to Closing, including without limitation any accrued incentive fees and any
Management Termination Fees.
Section
4.05. Room
Revenues; Reservations; Tray Ledger; Accounts Receivable and House
Funds.
(a) Room
Revenues for the night prior to the Closing Date (e.g., if the Closing Date
is
January 31, 2007, Room Revenues for the period of time commencing on the
evening of January 30, 2007 and ending on the morning of January 31,
2007) shall be divided equally between Buyer and Sellers pursuant to the
Operations Settlement. Other Revenues for the night prior to the Closing
Date
shall belong solely to Sellers.
(b) Buyer
will honor, for its account, the terms and rates of all pre-closing reservations
confirmed by Sellers or Managers for dates after the Closing Date (provided
that
at Closing Buyer shall receive a credit from Sellers in an amount equal to
any
prepayments or deposits received with respect to such reservations). Buyer
authorizes Sellers and Managers to continue to accept reservations for periods
after the Closing in the ordinary course of Sellers’ or Managers’ business.
Buyer recognizes that such reservations may include discounts or other
benefits provided in the ordinary course of business, including, without
limitation, benefits under any awards programs, sports team, corporate,
government or group discounts, weekend discounts or requirements that ancillary
food, beverage or other benefits be delivered by Buyer to the guest(s) holding
such reservations. Buyer agrees to honor all such reservations in accordance
with their terms. Any pre-closing deposits made to Sellers with respect to
reservations for dates after the Closing Date will be credited to Buyer at
the
Operations Settlement. Any post-closing deposits received by Sellers with
respect to reservations for dates after the Closing Date will be forwarded
to
Buyer upon receipt. Buyer will honor, for its account, all of Sellers room
allocation agreements and banquet facility and service agreements entered
into
in the ordinary course of business, consistent with past practices, which
have
been granted to groups, Persons or other customers for periods after the
Closing
Date at the rates and terms provided in such agreements. Buyer agrees that
Sellers cannot make and have made no representation or warranty that any
party
holding a room reservation or agreement for Hotel facilities or services
will
utilize such reservation or honor such agreement. Buyer, by its execution
hereof, assumes the risk of non-utilization of reservations and nonperformance
of such agreements. Buyer agrees to indemnify, defend and hold Sellers harmless
from and against any claim which may be asserted against any Seller
alleging Buyer has failed to honor any such pre-closing reservation or agreement
in accordance with its terms. The provisions of this Section 4.05(b),
including, without limitation, the assumptions of risk and indemnities by
Buyer
set forth above, shall survive the Closing.
(c) Buyer
shall purchase the Tray Ledgers from Sellers pursuant to the Operations
Settlement.
(d) Buyer
shall purchase the House Funds, exclusive of any non-cash items, from Sellers
pursuant to the Operations Settlement.
(e) Buyer
shall purchase the unopened case goods constituting Operating Supplies from
Seller pursuant to the Operations Settlement.
(f) At
Closing, Sellers shall receive a credit for all Accounts Receivable in an
amount
equal to: (i) one hundred percent (100%) of all such Accounts Receivable
which are unpaid for not more than ninety (90) days; plus (ii) ninety
percent (90%) of all such Accounts Receivable which are unpaid for more than
ninety (90) days, but not more than one hundred twenty (120) days; plus
(iii) eighty-five percent (85%) of all such Accounts Receivable which are
unpaid for more than one hundred twenty (120) days, but not more than one
hundred fifty (150) days; plus (iv) eighty percent (80%) of all such
Accounts Receivable which are unpaid for more than one hundred fifty (150)
days;
provided that Sellers shall not receive a
credit
from Buyer (whether at Closing or otherwise) for any Accounts Receivable
payable
or otherwise owed by any Manager
and any
sums owed by any Manager to Sellers shall be sole and exclusive property
of
Sellers and shall be paid directly to Sellers and if received by Buyer after
Closing, Buyer shall promptly deliver the same to Sellers.
Section
4.06. Accounts
Payable and Expenses.
All
accounts payable and expenses related to operations of the Property which
have
accrued before the Transfer Time shall be paid by Seller. Buyer understands
and
agrees that Sellers may postpone and/or contest payment of any account
payable or expense which is the subject of a bona fide dispute, or for which
a
xxxx is not rendered until after Closing so long as Sellers’ non-payment does
not cause a breach or default under any agreements to be assumed by Buyer
(and
so long as any such non-payment does not cause a materialman’s or mechanics’
lien to be filed against the Property). All accounts payable and expenses
accruing after the Transfer Time will be Buyer’s responsibility. Sellers shall
indemnify, hold harmless and defend Buyer from and against any loss, cost
or
damage arising from any such non-payment of any accounts payable and expenses
related to operations of the Property which have accrued before the Transfer
Time. This Section 4.06 shall survive the Closing.
Section
4.07. Assigned
Commercial Leases.
All
income and expenses with respect to the assigned Commercial Leases will be
prorated as of the Closing Date (with income and expenses for the Closing
Date
and thereafter to be allocated to Buyer). There shall be added to the amount
due
to Buyer at Closing, on the Closing Statement, the amount of any prepaid
rents
applicable to periods following Closing, security deposits, or other deposits
previously paid to Sellers (or for which Buyer will otherwise be liable)
under
any assigned Commercial Leases, and there shall be deducted from the amount
due
Sellers at Closing, on the Closing Statement, any such amounts paid to and
collected by Sellers (or for which Buyer will otherwise be liable) under
any
Commercial Leases attributable to periods including and after the Closing
Date.
Delinquent rentals payable by tenants under the Commercial Leases shall not
be
prorated between Buyer and Sellers; provided that Buyer shall pay to Sellers
promptly as and when received Sellers’ pro rata share of such rents if and when
received (provided further that unless rent is designated by letter or on
the
check that it is applicable to the period prior to Closing (which shall be
paid
to Sellers) any such rents shall be applied to rents due in inverse order
of
maturity).
Section
4.08. Employment.
Periodic
employee compensation, accrued vacation pay and other employee benefits shall
be
prorated as of the Transfer Time based on compensation, pay and benefits
actually accrued as of that time.
Section
4.09. Hampton
Inn Franchise Agreements.With
respect to the Hotels which are listed as items 21, 22, 25, 26 and 27 on
Schedule
“DD”,
in the
event that (x) the Franchisor has not agreed to extend the term of such
Franchise Agreements to a minimum of five (5) years from Closing (i.e., the
Franchisor does not agree to extend the term from its current termination
date
to a minimum of five (5) years from Closing) or (y) the Franchisor conditions
a
five (5) year term on either (i) the Buyer’s acceptance of a franchise agreement
that does not satisfy the Minimum Franchise Terms or (ii) accepting a Property
Improvement Plan (PIP) that exceeds the PIPs on Schedule
“CC”
then, at
Closing the Buyer shall receive a credit against the Purchase Price in the
amount of Three Million and No/100 Dollars ($3,000,000.00).
Section
4.10. Property
Improvement Plan (PIP) Credit. Schedule
“BB”
attached
hereto sets forth the existing PIPs which Seller has agreed to complete for
those Hotels referenced therein. In the event that any of the work concerning
capital expenditures for PIPs reflected on Schedule
“BB”
is not
completed (or paid for) by the Sellers as of the Closing, Buyer shall receive
a
credit against the Purchase Price in an amount equal to the balance of the
cost
of such capital expenditures, plus the cost of any unpaid completed work,
and
Sellers shall assign to Buyer and Buyer shall assume any contracts entered
into
by Sellers for such work.
Section
4.11. Phase
II Environmental.
Following its due diligence inspection of one of the Hotels in Florida, Buyer
has advised Sellers that Buyer, at its expense, would like to undertake further
environmental testing at such Hotel. Buyer’s and Sellers’ undertaking and rights
concerning the same are more particularly set forth on Schedule
“EE”.
ARTICLE
V.
EMPLOYEES
Section
5.01. Salaries,
etc. Sellers
shall not be responsible for the payment of the salaries, vacation pay, wages
or
benefits of any Employees accruing on or after the Transfer Time, and Buyer
shall not be responsible for payment of salaries, vacation pay, wages or
benefits of any Employees accruing prior to the Transfer Time.
Section
5.02. Employee
Claims.
(a) Buyer
shall indemnify, defend and hold harmless Sellers from and against any and
all
loss, costs, liability, damages and expenses (including, without limitation,
reasonable attorneys’ fees) incurred by any Seller arising out of, based upon or
in anyway relating or incidental to or connected with (i) any
violation, actual or alleged, by any Seller, Manager or Buyer of the Worker
Adjustment Retraining and Notification Act (“WARN
Act”)
or any
similar local, state or federal statute or law relating to the transactions
contemplated by this Agreement (a “WARN
Act Violation”)
and
(ii) any
other
labor-and/or Employee-related claims and demands occurring after the Closing
Date.
(b) Sellers
shall indemnify, defend and hold harmless Buyer from and against any and
all
loss, costs, liability, damages and expenses (including, without limitation,
reasonable attorneys’ fees) incurred by Buyer arising out of, based upon or in
anyway relating or incidental to or connected with any labor-and/or
Employee-related claims and demands occurring prior to the Closing Date or
in
connection with the transactions contemplated by this Agreement, other than
any
WARN Act Violation.
(c) The
occurrence of a claim or demand referenced in Section 5(a)(ii) or Section
5 (b)
above (other than any WARN Act Violation) will be attributed to the period
in
which the event triggering the liability with respect to such matter occurred
(which may be a date different from the date on which a claim relating to
those
events is made), provided, however, that with respect to any such matter
which
continues after the Closing (even if initially triggered before the Closing),
Buyer shall only be liable to the extent of such liability for the time period
after the Closing.
(d) The
provisions of this Article V shall survive the Closing.
ARTICLE
VI.
REPRESENTATIONS
AND WARRANTIES OF SELLER
Section
6.01. Sellers’
Representations and Warranties.
Sellers
hereby make the following representations and warranties to Buyer, all of
which
(i) are
material and are being relied upon by Buyer, (ii) shall
survive the Closing for a one (1) year period, and (iii) are
true,
complete, and accurate as of the date hereof and shall be true, complete
and
accurate as of the Closing Date:
(a) Existence
and Good Standing.
Sellers
are duly organized, validly existing and in good standing under the laws
of
their respective jurisdictions of organization.
(b) Authority.
Sellers
and Operating Tenants have, and on the Closing Date will have, all requisite
power and authority to execute and deliver this Agreement and the agreements
contemplated hereby, as the case may be, and to consummate the transactions
contemplated herein pursuant to the terms and conditions of this Agreement
and
such execution delivery and consummation will not violate any material term
of
Sellers’ (and Operating Tenants’) organizational documents. All Persons or
entities required to approve this Agreement pursuant to Sellers’ governance
documents have approved this Agreement.
(c) No
Conflict.
The
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by all necessary
corporate or stockholder action and will not conflict with, breach, result
in a
default under, or violate any commitment, document or instrument to which
any
Seller and/or Operating Tenant is a party or by which it is bound. This
Agreement has been duly executed and delivered by Sellers, and assuming this
Agreement constitutes the valid and binding obligation of Buyer, constitutes
the
valid and binding obligation of Sellers enforceable in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar
laws
relating to or affecting the rights of creditors generally and by general
equitable principles (regardless of whether such enforceability is considered
in
a proceeding in equity or at law) and by an implied consent of good faith
and
fair dealing.
(d) Litigation.
Except
as set forth on the schedule attached as Schedule “R”
hereto
and incorporated herein by this reference there is no pending, and to Sellers’
Knowledge, threatened litigation with respect to the Property in which any
Seller and/or Operating Tenant is named a party which has not been resolved,
settled or dismissed. To Sellers’ Knowledge, there is no pending or threatened
litigation with respect to the Property in which any Manager is named a party
(but no Seller and/or Operating Tenant is named a party) which has not been
resolved, settled or dismissed.
(e) Condemnation.
Neither
Sellers nor Operating Tenants have received any written notice of any pending
condemnation proceeding or other proceeding in eminent domain, and to the
Sellers’ Knowledge, no such condemnation proceeding or eminent domain proceeding
is threatened affecting the Property or any portion thereof.
(f) Title
to Personal Property.
Except
as set forth in writing by Sellers, the Sellers or the Operating Tenants,
as
applicable, have good and valid title to all tangible Personal Property,
which
shall be free and clear of all liens and encumbrances as of the
Closing.
(g) Compliance
with Applicable Law.
Neither
Sellers nor Operating Tenants have received any written notice of a violation
of
any applicable law with respect to the Property which have not been cured
or
dismissed.
(h) Taxes.
All
property, sales, use and occupancy taxes which accrue prior to the Closing
Date
will be paid in full or prorated at Closing.
(i) Financial
Statements.
To
Sellers’ Knowledge, the financial statements delivered by Sellers to Buyer are
complete, accurate and fairly represent the results of the operations and
financial condition of the Hotels for the time periods covered by such financial
statements.
(j) Contracts.
Sellers
have no Knowledge of any material non-compliance with any Material Operating
Agreement, the Ground Lease or the Third Party Leases. The schedule of Operating
Agreements attached hereto as Schedule “M”
is a
complete and accurate list of the Material Operating Agreements. To Sellers’
Knowledge, the documents provided to Buyer relating to the Intangible Property
are, in all material respects, complete and accurate copies of all documents
relating to the Intangible Property.
(k) Commercial
Leases.
The
rent roll (“Rent
Roll”)
attached hereto as Schedule “G”
contains
a complete and accurate list of all Commercial Leases, licenses, and other
agreements affecting the Property and all amendments and modifications thereto
as of the Effective Date and is accurate and complete in all material respects.
The Sellers shall update the Rent Roll in connection with the Closing. Except
as
set forth in the Rent Roll, as updated at Closing, (i) no
rent
has been prepaid under any Commercial Lease more than thirty (30) days in
advance, (ii) there
are
no other security or other deposits under the Commercial Leases,
(iii) Sellers
(or Operating Tenants), as “landlords” under the Commercial Leases, have
completed all construction and tenant improvements obligations (and all cash
amounts and allowances disbursement obligations) which are the responsibility
of
the landlords under the Commercial Leases and have performed all other
obligations of the landlords thereunder which are to be performed prior to
the
date of this representation and warranty, (iv) Sellers
have neither given to nor received from any tenant any written notice of
any
default under any Commercial Lease, and neither Sellers nor Operating Tenants,
as the landlords under the Commercial Leases, nor any of the tenants, is
in
default under any of the Commercial Leases, and (v) there does not exist
any right of offset or abatement in favor of any tenant under any Commercial
Lease and no such rights of offset or abatement, claims or defenses have
been
asserted (which remain outstanding), with the result that each tenant is
obligated to pay, and is paying, the rent and other charges due under its
Commercial Lease, and is fully obligated to perform, and is performing, all
other obligations of such tenant under such Commercial Lease.
(l) Employee.
Except
as set forth in Schedule 6.01(l):
(i) There
are
no employees of Sellers, and all employees at the Hotels are Employees; except
for any Union Contract/Collective Bargaining Agreement, (copies of which
have
heretofore been delivered by Sellers to Buyer or posted to the Data Room
Web-Site), to Sellers’ Knowledge, no Employees are employed under any union
agreement, collective bargaining agreement or similar agreement;
(ii) to
Sellers’ Knowledge, there are no formal,
written grievance settlements to which Sellers or Managers are
signatories;
(iii) to
Sellers’ Knowledge, except as disclosed in the Data Room Web-Site none of the
Employees is represented by a labor union, and, to Sellers’ Knowledge, no
petition has been filed, nor has any proceeding been instituted by any employee
or group of employees with any labor relations board or commission seeking
recognition of a collective bargaining representative within the last two
(2)
years;
(iv) to
Sellers’ Knowledge, (a) there
is
no organizational effort currently being made or threatened by or on behalf
of
any labor organization or trade union to organize any of the Employees, and
(b) no demand for recognition as representative of any Employees has been
made by or on behalf of any labor organization or trade union within the
last
two (2) years;
(v) to
Sellers’ Knowledge, there is no pending or threatened Employee strike, work
stoppage, slowdown, picketing or material labor dispute or formal, written
contract grievance with respect to any Employees;
(vi) to
Sellers’ Knowledge, there is no charge pending or threatened before any court or
agency alleging unlawful discrimination in employment practices or any unfair
labor practice by Sellers or Managers;
(m) Material
Repairs or Replacements.
To
Sellers’ Knowledge, Sellers have received no (and Operating Tenants have
received no) written or other notice from any governmental authority, any
insurance company or any board of fire underwriters, or other body exercising
similar functions with respect to the need for any material repairs to or
replacements of any improvements to the Property.
(n) Access
to Diligence Documents.
To
Sellers’ Knowledge, all of Sellers’ or Operating Tenants existing books, files,
records, agreements and documents relating in any manner to the Property
and/or
the operation of the Hotel located at the Property have been (and will be)
made
available to the Buyer (on a continuous basis) from the Effective Date through
the Closing Date. Sellers have used and will use good faith efforts to cause
Managers to make available to Buyer (on a continuous basis) from the Effective
Date through the Closing Date, all of Managers’ existing books, files, records,
agreements and documents relating to the Property and/or the operation of
the
Hotel located at the Property.
(o) No
Known Title Defects or Exceptions. To
Sellers’ Knowledge, except as described in the Title Commitments (and except for
rights contained in the Commercial Leases), there are no (i) unrecorded
or undisclosed easements, liens, encumbrances, covenants, conditions,
restrictions, instruments or other exceptions which affect title to the Land
(or
any portion thereof) (and will continue to do so following the Closing) or
(ii) outstanding
rights of first refusal or options relating to the Land, any portion thereof,
or
any interest therein.
(p) Hazardous
Materials.
To
Sellers’ Knowledge, and except as set forth in any environmental studies posted
to the Data Room Web Site or performed by or for Buyer, there are no known
conditions on the Property that are in violation of any Environmental Laws
except for Hazardous Substances used in the ordinary course of business in
compliance with applicable legal requirements related to Environmental Laws
and
neither Sellers nor Operating Tenants have released into the environment
any
Hazardous Substances in violation of Environmental Laws. To Sellers’ Knowledge
there are no pending proceedings or inquiries by any governmental authority
relating to or arising under any Environmental Laws with respect to the Property
and Sellers have not received written notice from any governmental authority
threatening any such proceeding or inquiry or concerning of an uncured violation
of Environmental Laws with respect to the Property.
(q) Liquor
Licenses.
The
schedule of liquor licenses attached hereto as Schedule “T”
is a
complete and accurate list of all state or federal liquor licenses used (in
whole or in part) in connection with the operation of the Hotels.
(r) Bankruptcy.
There
are no general assignments for the benefit of creditors, or voluntary or
involuntary proceedings in bankruptcy, existing, pending or, to Sellers’
Knowledge, threatened against Sellers or Operating Tenants.
(s) Third
Party Leases.
Schedule “L”
contains
a complete and accurate list of all Third Party Leases affecting the Property
and all amendments and modifications thereto and is accurate and complete
in all
material respects. Except as set forth in Schedule “L”,
(i) no rent has been prepaid under any Third Party Lease more than thirty
(30) days in advance, (ii) there are no other security or other deposits
under the Third Party Leases, (iii) Sellers
(or Operating Tenants), as “landlords” under the Third Party Leases, have
completed all construction and tenant improvements obligations (and all cash
amounts and allowances disbursement obligations) which are the responsibility
of
the landlords under the Third Party Leases and have performed all other
obligations of the landlords thereunder which are to be performed prior to
the
date of this representation and warranty, (iv) Sellers
have neither given to nor received from any tenant any written notice of
any
default under any Third Party Lease, which remain uncured and neither Sellers
nor Operating Tenants, as the landlords under the Third Party Leases, nor
any of
the tenants, is in default under any of the Third Party Leases, and (v) there
does not exist any right of offset or abatement in favor of any tenant under
any
Third Party Lease, and no such rights of offset or abatement, claims or defenses
have been asserted (which remain outstanding), with the result that each
tenant
is obligated to pay, and is paying, the rent and other charges due under
its
Third Party Lease, and is fully obligated to perform, and is performing,
all
other obligations of such tenant under such Third Party Lease.
(t) Ground
Lease.
Schedule “I”
contains
a complete and accurate list of the Ground Lease affecting the Property and
all
amendments and modifications thereto and is accurate and complete in all
material respects. The Ground Lease is in full force and effect. No Seller,
on
the one hand, or, to the Sellers’ Knowledge, any other party, on the other hand,
has breached or is in default under such Ground Lease (other than such breaches
or defaults that have been cured). To the Sellers’ Knowledge, there is no
existing condition which, with the passage of time or the giving of notice,
could result in a default under the terms any Ground Lease. Schedule “I”
lists
the current lessee under each Ground Lease.
(u) REAs.
Sellers
have delivered to or caused to be delivered to Buyer true and accurate copies
of
the Material REAs and all amendments and modifications thereto. No Material
REA
has been terminated by the property owners that are parties thereto and
all assessments under the REAs payable by Sellers have been paid through
the date hereof. No Seller, on the one hand, or to the Sellers’ Knowledge,
any other party, on the other hand, has breached or is in default under any
Material REA. To the Sellers’ Knowledge, there is no existing condition
which, with the passage of time or the giving of notice, could result in
a
default under the terms of any Material REA
Section
6.02. Seller’s
Update of Representations and Warranties.
Prior to
the Closing Date, Sellers may update Sellers’ representations and
warranties set forth in Section 6.01 by delivering written notice to Buyer
in order to reflect any fact, matter or circumstance to Sellers’ Knowledge that
would make any of such representations or warranties contained herein materially
untrue, incomplete or incorrect (any such disclosure being referred to as
a
“Pre-Closing Disclosure”). Buyer acknowledges that Sellers shall have no
liability, obligation or responsibility with respect to any representation
or
warranty which was true and accurate when made by Sellers upon the execution
and
delivery of this Agreement and which subsequently becomes untrue or inaccurate
through no fault of Sellers.
ARTICLE
VII.
REPRESENTATIONS
AND WARRANTIES OF BUYER
Buyer
represents and warrants to Sellers as follows:
Section
7.01. Buyer’s
Representations and Warranties.
Buyer
hereby makes the following representations and warranties to Sellers, all
of
which (i) are
material and are being relied upon by Sellers, (ii) shall
survive the Closing for a one (1) year period, and (iii) are
true,
complete and accurate as of the date hereof and shall be true, complete and
accurate as of the Closing Date:
(a) Existence
and Good Standing.
Buyer is
a Delaware limited partnership and is duly formed, validly existing and in
good
standing under the laws of the state of its organization.
(b) Authority.
Buyer
has, and on the Closing Date will have, all requisite power and authority
to
execute and deliver this Agreement and to consummate the transactions
contemplated herein pursuant to the terms and conditions of this Agreement
and
consummation will not violate any material term of its certificate of
organization or operating agreement. All Persons or entities required to
approve
this Agreement pursuant to Buyer’s governance documents have approved this
Agreement.
(c) No
Conflict.
The
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by all necessary
corporate or stockholder action and will not conflict with, breach, result
in a
default under, or violate any commitment, document or instrument to which
Buyer
is a party or by which it is bound. This Agreement has been duly executed
and
delivered by Sellers, and assuming this Agreement constitutes the valid and
binding obligation of the Buyer, enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar
laws
relating to or affecting the rights of creditors generally and by general
equitable principles (regardless of whether such enforceability is considered
in
a proceeding in equity or at law) and by an implied consent of good faith
and
fair dealing.
Section
7.02. AS IS.
BUYER
EXPRESSLY ACKNOWLEDGES AND AGREES THAT THE PROPERTY IS BEING SOLD TO BUYER,
AND
THAT BUYER AGREES TO PURCHASE AND ACCEPT THE PROPERTY, AND EACH AND EVERY
PART
AND COMPONENT THEREOF, IN AN “AS IS, WHERE IS” CONDITION AS OF THE CLOSING WITH
NO REPRESENTATIONS OR WARRANTIES FROM SELLERS, EITHER EXPRESS OR IMPLIED,
EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT. BUYER AGREES THAT BUYER IS NOT
RELYING
UPON, AND HAS NOT RECEIVED OR BEEN GIVEN, ANY REPRESENTATIONS (EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT), STATEMENTS OR WARRANTIES (ORAL OR
WRITTEN, IMPLIED OR EXPRESS) OF OR BY ANY OFFICER, EMPLOYEE, AGENT OR
REPRESENTATIVE OF SELLERS, OR ANY SALESPERSON OR BROKER (IF ANY) INVOLVED
IN
THIS TRANSACTION, AS TO THE PROPERTY OR ANY PART OR COMPONENT THEREOF IN
ANY
RESPECT, INCLUDING, BUT NOT LIMITED TO, ANY REPRESENTATIONS, STATEMENTS OR
WARRANTIES AS TO THE PHYSICAL OR ENVIRONMENTAL CONDITION OF THE PROPERTY,
THE
FITNESS OF THE PROPERTY FOR USE AS HOTELS, THE FINANCIAL PERFORMANCE OR
POTENTIAL OF THE PROPERTY, THE COMPLIANCE OF THE PROPERTY WITH APPLICABLE
BUILDING, ZONING, SUBDIVISION, ENVIRONMENTAL, LIFE SAFETY OR LAND USE LAWS,
CODES, ORDINANCES, RULES, ORDERS, OR REGULATIONS, OR THE STATE OF REPAIR
OF THE
PROPERTY, AND, EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, BUYER,
FOR
ITSELF AND ITS HEIRS, LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS, WAIVES
ANY
RIGHT TO ASSERT ANY CLAIM OR DEMAND AGAINST SELLERS AT LAW OR IN EQUITY RELATING
TO ANY SUCH MATTER, WHETHER LATENT OR PATENT, DISCLOSED OR UNDISCLOSED, KNOWN
OR
UNKNOWN, NOW EXISTING OR HEREAFTER ARISING. EXCEPT TO THE EXTENT SELLERS
BREACH
THIS AGREEMENT, BUYER AGREES THAT IT SHALL HAVE NO RECOURSE WHATSOEVER AGAINST
SELLERS, AT LAW OR IN EQUITY, SHOULD THE SURVEY OR THE TITLE INSURANCE
COMMITMENTS OR THE TITLE POLICIES FAIL TO DISCLOSE ANY MATTER AFFECTING THE
PROPERTY OR REVEAL ANY SUCH MATTER IN AN INACCURATE, MISLEADING OR INCOMPLETE
FASHION OR OTHERWISE BE IN ERROR. BUYER ACKNOWLEDGES THAT IT SHALL REVIEW
THE
SURVEY AND THE TITLE INSURANCE COMMITMENTS (AS SAME MAY BE MARKED AT
CLOSING) AND DISCUSS THEIR CONTENTS WITH THE INDEPENDENT CONTRACTORS WHO
PREPARED OR ISSUED EACH OF THEM. BUYER ACCORDINGLY AGREES TO LOOK SOLELY
TO THE
PREPARER OF THE SURVEY AND THE ISSUER OF THE TITLE INSURANCE COMMITMENTS
AND
TITLE POLICIES FOR ANY CLAIM ARISING OUT OF OR IN CONNECTION WITH SUCH
INSTRUMENTS AND HEREBY RELEASES SELLERS FROM ANY SUCH CLAIM (EXCEPT FOR ANY
CLAIM WITH RESPECT TO A REPRESENTATION OR WARRANTY OF SELLERS OR A CLAIM
WITH
RESPECT TO AN OBLIGATION THAT SELLERS ARE OBLIGATED TO CURE AS SET FORTH
IN THIS
AGREEMENT).
Buyer
recognizes that the Hotels and Personal Property are not new and that there
exists a possibility that the Property is not in compliance with the
requirements which would be imposed on a newly constructed hotel by presently
effective federal, state and local building, plumbing, electrical, fire,
health,
handicap, environmental and life safety laws, codes, ordinances, rules, orders
and/or regulations (collectively, the “building codes”). The Hotels and other
improvements on the Land may contain substances or materials no longer
permitted to be used in newly constructed buildings including, without
limitation, asbestos or other insulation materials, lead or other paints,
wiring, electrical, or plumbing materials and may not contain other
materials or equipment required to be installed in a newly constructed building.
Prior to execution of this Agreement, Buyer conducted such investigations
and
inspections of the Property as Buyer deemed necessary with respect to all
such
matters. Buyer agrees, except as specifically set forth in this Agreement,
to
accept and shall accept the Property in an “AS-IS, WHERE IS” condition and at
Closing to accept and assume the risk of noncompliance of the Property with
all
such building codes. Buyer waives any right to excuse or delay performance
of
its obligations under this Agreement (except as specifically set forth in
this
Agreement) or to assert any claim against Sellers (before or after Closing)
arising out of any failure of the Property to comply with any such building
codes.
It
is
specifically understood and agreed by Sellers and Buyer that, except as
specifically set forth in this Agreement, Sellers do not make, and shall
not be
deemed to have made, any representation, warranty or covenant with respect
to
(i) any
Environmental Laws that may affect any of the Property or (ii) the
presence or absence of any Hazardous or Toxic Substances in, on, above, under
or
about any of the Property. As used in this Section 7.02, (A) the
term
“Environmental Laws” means all federal, State and local laws, codes, ordinances,
rules, orders and regulations now or hereafter in effect relating to pollution
or the protection of the environment, including without limitation, all laws,
codes, ordinances, rules, orders and regulations governing the generation,
use,
collection, treatment, storage, transportation, recovery, removal, discharge,
spill or disposal of any or all Hazardous or Toxic Substances, and
(B) the
term
“Hazardous Substances” or “Toxic Substances” means materials and substances
defined as “hazardous substances”, “hazardous wastes”, “toxic substances” or
“toxic wastes” in (I) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
42
U.S.C. Sections 9601-9675, as amended by the Superfund Amendments and
Reauthorization Act of 1988, and any further amendments thereto and rules,
orders and regulations thereunder; (II) the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901-6992,
as
amended by the Hazardous and Solid Waste Amendments of 1984, and any further
amendments thereto and rules, orders and regulations thereunder; or
(III) any
other
Environmental Laws. It is understood and agreed by Sellers and Buyer that
(i) except with respect to the representations and warranties of Sellers
set forth in Section 6.01, in the event of any conflict between the terms
and provision of this Section 7.02 and any other term or provision of this
Agreement, the relevant term or provisions of this Section 7.02 shall
control and govern and (ii) notwithstanding anything contained in this
Agreement to the contrary, Buyer shall not assume any liabilities arising
from
the violation of any Environmental Laws prior to the Closing. The provisions
of
this Section 7.02 shall survive Closing.
ARTICLE
VIII.
REMEDIES
Section
8.01. Sellers’
Remedies.
If Buyer
fails to close escrow hereunder due to its own default hereunder, Buyer and
Sellers agree that the damages that Sellers will sustain as a result thereof
will be substantial, but the actual damages will be difficult or impossible
to
ascertain. Accordingly, Buyer and Sellers agree that, in the event of Buyer’s
default with respect to its obligation to close escrow, Sellers may, after
written notice to Buyer of such default and a five (5) business day cure
period
after Buyer’s receipt of such written notice, as its sole and exclusive remedy,
terminate this Agreement by written notice to Buyer in which event Sellers
shall
receive the Deposit as liquidated damages for such default, the amount of
which
Deposit Buyer and Sellers agree is not punitive or a penalty but is just,
fair
and reasonable, and the Escrow Agent shall immediately pay the Deposit to
Sellers. In addition, if Buyer shall fail to perform when it is obligated
to do
so any of the material covenants and agreements contained herein (other than
a
failure to close escrow as referenced herein) and such condition or failure
continues for a period of five (5) business days after written notice thereof
from Sellers then Sellers may (i) terminate
this Agreement and this Agreement shall be of no further force and effect
and
the Deposit shall be returned by Escrow Agent to Buyer; or (ii) consummate
the transaction contemplated hereby, notwithstanding such default, without
any
abatement or reduction in the Purchase Price on account thereof.
Section
8.02. Buyer’s
Remedies.
If
Sellers default under this Agreement or otherwise fail to perform their
obligations under this Agreement on or prior to the Closing for any reason
except the failure of any condition precedent to Sellers’ obligations under this
Agreement, then any one, and only one, of the following, and only the following,
shall be available to Buyer as its sole and exclusive remedy: (A) to
terminate this Agreement by giving Sellers written notice of such election
prior
to or at Closing whereupon the Escrow Agent shall promptly return to Buyer
the
Deposit, and the parties shall have no further rights or liabilities under
this
Agreement except for those provisions which specifically provide that they
survive the termination of this Agreement; or (B) seek
specific performance of Sellers’ obligations hereunder, provided that Buyer must
file a suit for specific performance in the appropriate jurisdiction within
ninety (90) days from the earlier of (i) the
Closing Date or (ii) the
date
of delivery by Buyer to Sellers of written notice of such default.
Section
8.03. Pre-Closing
Matters.
The
parties waive all damages and remedies for defaults prior to Closing except
as
provided in this Agreement.
Section
8.04. Post-Closing
Matters.
Notwithstanding the terms and provisions of Sections 8.01 and 8.02 or any
other
term or provision of this Agreement, Sellers and Buyer shall each retain
the
right to seek and obtain relief for events occurring after the Closing Date
provided that: (a) this
transaction in fact closes; (b) the
obligations for which relief is sought are obligations which by the express
terms of this Agreement are to survive Closing or which by the express terms
of
this Agreement are to be performed following Closing (including any indemnities
hereunder, if any); and (c) such
relief shall be limited to
a suit
for actual damages, (provided
that in no event shall either party be entitled to punitive or consequential
damages for any matters arising under this Agreement, whether pre-Closing
or
post-Closing), but Buyer and Sellers agree that in no event shall the damages
payable by Sellers to Buyer as a result of any default or breach by Sellers
under this Agreement exceed $15,000,000.00. Except for obligations which
by
their express terms are to survive Closing or which by their express terms
are
to be performed following Closing, the terms and provisions of this Agreement
shall not survive the Closing.
The provisions of this Section 8.04 shall survive
Closing.
ARTICLE IX.
CONDITIONS
Section
9.01. Sellers’
Obligation.
In
addition to any other conditions precedent for the benefit of Sellers expressly
set forth in this Agreement, the obligation of Sellers to perform this Agreement
is subject to the following conditions unless waived in writing by
Sellers:
(a) The
representations and warranties of Buyer in this Agreement shall be true and
correct in all material respects as of the Closing Date as if made on and
as of
the Closing Date.
(b) Buyer
shall have performed all material covenants and obligations required to be
performed by it under this Agreement on or prior to the Closing
Date.
(c) Sellers
shall have obtained all written consents to the assignment of the Ground
Leases
to Buyer from all third parties required pursuant to the terms and provisions
of
the Ground Leases. Buyer hereby agrees to cooperate with Sellers in obtaining
such consents prior to closing, including, without limitation, providing
financial and other information regarding Buyer to such third parties as
may be required. Sellers shall have the right, but not the obligation, to
extend the Closing Date for a reasonable period of time not to exceed thirty
(30) days in order to satisfy this condition upon delivering written notice
to
Buyer of Sellers’ election to do so on a date not later than two (2) business
days prior to then scheduled Closing Date.
Section
9.02. Buyer’s
Obligation.
In
addition to any other conditions precedent for the benefit of Buyer expressly
set forth in this Agreement, the obligation of Buyer to perform this Agreement
is subject to the following conditions unless waived in writing by
Buyer:
(a) The
representations and warranties of Sellers in this Agreement shall be true
and
correct in all material respects as of the Closing Date as if made on and
as of
the Closing Date (and no Pre-Closing Disclosure made after the Effective
Date
shall cause any of such representations and warranties of Sellers in this
Agreement to not be true and correct in all material respects as of the Closing
Date).
(b) Sellers
shall have performed all material covenants and obligations required to be
performed by them under this Agreement on or prior to the Closing Date and
shall
have delivered to Buyer the assignment and assumption documents in the forms
of
Schedules B, C, D, E, and U as well as the Bills of Sale and
Deeds.
(c) Buyer
shall have received either (i) Title Policies consistent with the form of
Title Insurance Commitments previously approved in writing by Buyer and as
marked by Buyer, or (ii) unconditional and binding commitments to issue the
Title Policies consistent with the form of Title Insurance Commitments
previously approved in writing by Buyer and as marked by Buyer, in each case,
in
the amount equal to the Allocated Purchase Price for the Hotel to which each
Title Policy relates.
(d) Written
notices in form reasonably satisfactory to Buyer, regarding the sale of the
Property, executed by Sellers and addressed to any governmental body that
requires notice of the sale of the Property under applicable legal requirements
or orders.
(e) Sellers
shall have obtained and delivered to Buyer prior to the Closing Date the
following estoppel certificates:
(i) an
estoppel certificate from the tenant under the Pleasanton Hotel Commercial
Lease
and an estoppel certificate from the tenant under the Sheraton Hotel Sunnyvale
Commercial Lease, each in the form attached hereto as Schedule “V”,
provided
if such form is not as specified in the Pleasanton Hotel Commercial Lease
or the
Sheraton Hotel Sunnyvale Commercial Lease, then this condition shall also
be
deemed satisfied upon receipt by the Buyer of an estoppel certificate in
such
form as otherwise may be specified in the Pleasanton Hotel Commercial Lease
or
the Sheraton Hotel Sunnyvale Commercial Lease, or in such other form to be
agreed upon by the Buyer and tenant, except that this condition shall not
be
deemed satisfied if the estoppel discloses any default under the Pleasanton
Hotel Commercial Lease or the Sheraton Hotel Sunnyvale Commercial
Lease.
(ii) an
estoppel certificate from each Third Party Lessee under the Third Party Leases
in the form attached hereto as Schedule “W”,
provided
if such form is not as specified in the Third Party Leases, then this condition
shall also be deemed satisfied upon receipt by the Buyer of an estoppel
certificate in such form as otherwise may be specified in the Third Party
Leases
or in such other form to be agreed upon by each of Buyer and the Third Party
Lessees under the Third Party Leases in their sole discretion, except that
this
condition shall not be deemed satisfied if the estoppel discloses any default
under the Third Party Leases.
(iii) an
REA
Estoppel from each party to items 7, 8 and 9 of the Material REAs in the
form
attached hereto as Schedule
“AA”
provided
if such form is not as specified in the applicable Material REA, then this
condition shall also be deemed satisfied upon receipt by the Buyer of an
estoppel certificate in such form as otherwise may be specified in the
applicable Material REA or in such other form to be agreed upon by each of
Buyer
and the party under the applicable Material REA in their sole discretion,
except
that this condition shall not be deemed satisfied if an estoppel discloses
any
default under any Material REA.
(f) Sellers
shall have obtained and delivered to Buyer prior to the Closing Date the
following consent:
(i) A
consent
to
assignment, executed and delivered by the Ground Lessor under the Ground
Lease,
in such form as required under the terms of the Ground Lease, which consent
shall run to the benefit of Sellers and the Buyer and all of their respective
successors and assigns. Seller shall use diligent and good faith efforts
to have
such consent run to the benefit of Buyer’s lenders and their successors and
assigns.
If
any
condition precedent to Buyer’s obligations under this Agreement has not been
satisfied as of the Closing Date or waived by Buyer, then Buyer shall be
entitled in its sole discretion to terminate this Agreement by giving Sellers
and Escrow Agent written notice to such effect, whereupon Escrow Agent shall
immediately return the Deposit to Buyer, and upon such termination neither
party
to this Agreement shall thereafter have any further rights or liabilities
under
this Agreement except as may be specifically provided in this Agreement to
survive the termination of this Agreement.
ARTICLE
X.
CONVEYANCE
OF ASSETS
Section
10.01. Instruments
of Conveyance.
At
Closing, Sellers (and/or Operating Tenants) and Buyer (and/or its operating
lessee) shall execute and deliver to each other the following
documents:
(a) Sellers,
unless a Seller holds title to its portion of the Land pursuant to a Ground
Lease, shall execute and deliver to Buyer the Deeds.
(b) Each
Seller which holds title to its portion of the Land pursuant to a Ground
Lease
and Buyer shall execute and deliver to each other counterparts of the Assignment
and Assumption of Ground Leases.
(c) Each
Seller and/or Operating Tenant and Buyer shall execute and deliver to each
other
a Xxxx of Sale (Personal Property).
(d) Each
Seller and/or Operating Tenant and Buyer shall execute and deliver to each
other
counterparts of an Assignment and Assumption of Intangible
Property.
(e) Each
Seller and/or Operating Tenant and Buyer shall execute and deliver to each
other
counterparts of an Assignment and Assumption of Operating
Agreements.
(f) Each
Seller and/or Operating Tenant and Buyer shall execute and deliver to each
other
counterparts of the Assignment and Assumption of Commercial Leases.
(g) Each
Seller which holds title to its portion of the Land subject to a Third Party
Lease and Buyer shall execute and deliver to each other counterparts of the
Assignment and Assumption of Third Party Leases.
(h) Sellers
and Buyer shall execute the Closing Statement.
(i) Each
Seller shall execute and deliver, at Closing, a so-called “Non-Foreign
Affidavit” (pursuant to Section 1445 of the Internal Revenue
Code).
(j) Seller
shall execute and deliver, at Closing, written notices in form reasonably
satisfactory to Buyer, regarding the sale of the Property, executed by Seller
and addressed to (i) tenants under the Commercial Leases, and
(ii) parties under the Operating Agreements.
(k) Buyer
shall complete and deliver at Closing a Form 1099 as required by the Internal
Revenue Code.
(l) Buyer
and
Sellers shall execute such other affidavits, authorizing resolutions, and
documents as may be reasonably required by the Title Company.
(m) Sellers
shall deliver at Closing evidence of termination of the Management Agreements
and payment by Sellers of all fees thereunder, including Management Termination
Fees.
(n) Buyer
shall deliver at Closing evidence of termination of the Franchise Agreements
and
the Guarantees of Franchise Agreements and payment by Buyer of all fees
thereunder, including Franchise Agreement termination fees.
(o) All
instruments and other documents required to be delivered to governmental
authorities in connection with the payment of transfer taxes for the
consummation of the sale of the Property.
(p) Sellers
shall deliver to Buyer an updated Rent Roll.
ARTICLE
XI.
TITLE
TO REAL PROPERTY
Section
11.01. Title
Insurance Commitments.
Prior to
the execution of this Agreement, Sellers obtained the Title Insurance
Commitments and delivered the same to Buyer. Buyer hereby acknowledges that
Buyer has, subject to Section 11.02 hereof, approved the Title Insurance
Commitments and has accepted the Title Insurance Commitments as so delivered
to
Buyer. It is understood and agreed by Buyer and Sellers that, notwithstanding
any other term or provision of this Agreement to the contrary, Sellers shall
have no obligation to pay for any endorsements to the Title Policies and,
if
desired or required by Buyer, the premiums and costs of such endorsements
shall
be at Buyer’s sole cost and expense. If Buyer defaults under this Agreement or
terminates this Agreement for any reason hereunder (other than a default
by any
of the Sellers), then Buyer shall pay any and all search and examination
fees,
cancellation fees and other costs or charges assessed in connection with
the
services of the title insurer, the cancellation of the Title Insurance
Commitments or the non-issuance of the Title Policies (provided that Sellers
shall pay any and all such fees, costs and charges if this Agreement is
terminated on account of a default by Sellers). The foregoing sentence shall
survive any termination of this Agreement by Buyer (other than by reason
of a
default by any of the Sellers). Upon Buyer’s selection of a lender, Buyer shall
notify Sellers whether such lender requires co-title insurance with respect
to
the transactions contemplated herein, and what such requirements are, if
any.
Buyer acknowledges and agrees that (i) Buyer
shall be responsible for all additional costs, fees and premiums resulting
from
its election to have the Title Policies co-insured, (ii) such
co-insurer shall be a nationally-recognized title insurance company, and
(iii) Buyer
shall not have the right to extend the Closing Date in order to accommodate
the
lender’s co-insurance requirements.
Section
11.02. Title
Defects.
Buyer
acknowledges that Sellers shall be under no obligation to remove or cure
any
title defects objected to by Buyer (other than encumbrances voluntarily created
by Sellers after October 31, 2006 and monetary liens of any type (except
any resulting from Buyer’s acts or owed to any party claiming under Buyer), all
of which Sellers shall be required to discharge and cause to be removed as
exceptions to the Title Insurance Commitments at or prior to Closing), and
(except as set forth in this sentence) any failure or refusal of Sellers
to do
so shall not be a default of Sellers hereunder. Prior to the execution of
this
Agreement, Buyer has objected to those title matters set forth on Schedule “S”
attached
hereto and by this reference incorporated herein (the “Title
Defects”).
Sellers and Buyer each agree to cooperate and use good faith efforts prior
to
Closing, to pursue the cure of such Title Defects as follows: (i) to obtain,
prior to the Closing Date, a letter from the municipality of Oklahoma City
to
confirm that the Hotel located in Oklahoma City is in compliance with current
zoning regulations, including with respect to on-site and off-site parking,
(ii)
to record, prior to the Closing Date, a drainage easement with the consent
of
the current owner of the adjoining property and the lender on the adjoining
property, for the benefit of the Hotel located in Minnetonka, Minnesota,
and
(iii) to draft and record, prior to the Closing Date, an easement with respect
to the Sellers’ use of the enclosure on the Hotel located in Bloomington,
Minnesota. If despite the parties diligent and good faith efforts, the parties
are unable to cure any of such Title Defects (other than encumbrances
voluntarily created by Sellers after October 31, 2006 and monetary liens of
any type (except any resulting from Buyer’s acts or owed to any party claiming
under Buyer), all of which Sellers shall be obligated to cure at Closing),
the
same shall not constitute a default hereunder or the failure of a condition
to
Closing as to the affected Hotel.
Section
11.03. Survey.
Prior to
the execution of this Agreement, Sellers have provided Buyer with copies
of any
surveys of the Hotels and Land which Sellers have in their possession or
control. Prior to the execution of this Agreement, Buyer has obtained and
provided Sellers and Title Company with a copy of, updated Surveys of the
Hotels
and Land prepared by a licensed surveyor in the state in which the Hotel
which
is the subject of the Survey is located and otherwise meeting the ALTA
requirements and standards. Prior to the execution of this Agreement, Buyer
has
objected to, and Sellers have agreed to diligently and in good faith pursue
the
cure of those survey matters, if any, set forth on Schedule “S”
attached
hereto and by this reference incorporated herein (the “Survey
Defects”).
If
Sellers fail to cure any of the Survey Defects with respect to any Hotel
by
Closing, the same shall not constitute a default hereunder but would constitute
a failure of a condition to Closing as to the affected Hotel and Buyer’s sole
and exclusive remedy shall be to either (i) terminate
this Agreement as to the affected Hotel by written notice to Sellers given
on or
before the Closing Date without recourse against Sellers and to obtain a
reduction in the Purchase Price by the amount of the Allocated Purchase Price
for such Hotel (provided that if the Survey Defect affects all Hotels, Buyer
may
terminate this Agreement as to all Hotels by written notice to Sellers given
on
or before the Closing Date without recourse to Sellers and obtain a refund
of
the Deposit from the Escrow Agent), or (ii) to
accept
the condition of the Land and Hotels in their then condition without reduction
of the Purchase Price or reservation of any claim against Sellers.
Section
11.04. Access
to Property; Due Diligence.
Buyer
acknowledges that prior to the Effective Date, Buyer had the opportunity
to
inspect and conduct a full inspection and investigation of the Property and
all
information in the Data Room Web-Site (and Buyer has or is deemed to have
knowledge of such information).
ARTICLE XII.
THE
CLOSING
Section
12.01. Time
and Place.
Subject
to extension as referenced in Sections 1.05 and 3.02, the conditions in
Article IX and the casualty and condemnation provisions in
Article XIII, the Closing shall take place on the Closing Date at 10:00
a.m. (local time)
at the
office of the Escrow Agent, or at such other date, place and time as Buyer
and
Sellers may mutually agree upon in writing. At the request of either party,
Buyer and Sellers shall reasonably cooperate to accomplish this Closing without
the necessity of the physical presence of the parties or their respective
counsel. Buyer shall take possession of the Property (and Sellers shall be
required to deliver possession of the Property to Buyer) effective as of
the
Closing Date.
Section
12.02. Payment
of Purchase Price.
At the
Closing, Buyer shall deliver by wire transfer of good and immediately available
funds the balance of the Purchase Price (subject to adjustments and/or
prorations provided in this Agreement) to the Escrow Agent no later than
2:00
p.m. (Eastern Time) on the Closing Date (or such later time as the final
Closing
Statement has been agreed upon by the parties). The Deposit and the balance
of
the Purchase Price (as adjusted) shall be paid to Sellers by the Escrow Agent
by
wire transfer of good and immediately available funds to such bank accounts
specified by Sellers after delivery of the closing documents by Sellers to
the
Title Company but before recordation of the Deeds, the Assignment of Ground
Leases or any other instrument, all as more particularly set forth in the
escrow
closing instructions of Sellers and Buyer. Funds
representing the Deposit and funds representing the balance of the Purchase
Price shall be wired to Sellers’ bank accounts no later than 5:00 P.M. (Eastern
Time) on the Closing Date (or such later time as the final Closing Statement
has
been agreed upon by the parties).
Section
12.03. Closing
Costs.
(a) Sellers
shall pay the following costs and expenses at Closing:
(1) Sellers’
prorated share of real estate and tangible personal property taxes, rents
or
assessments as set forth in this Agreement;
(2) The
cost
of issuing the Title Insurance Commitments and sixty percent (60%) of the
premium for the Title Policies other than (i) the premiums and costs for
issuing any endorsements or additional coverage to the Title Policies and
(ii) any title insurance premium or cost (including endorsements and
additional coverage with respect thereto) related to Buyer’s
financing.
(3) Sellers’
own legal expenses;
(4) One-half
of the closing fee and/or settlement fee (including excise taxes thereon)
charged by the Escrow Agent;
(5) All
costs
of
satisfying in full any existing debt secured by the Property and removing
any
monetary encumbrances from the Title Policies;
(6) Sellers
shall pay the Broker fees;
(7) One
half
of the amount of any transfer or stamp taxes pertaining to the transfer of
the
Property from Sellers to Buyer.
(8) Any
and
all other costs and expenses expressly allocated to Sellers under this
Agreement.
(9) All
Management Termination Fees.
(10) Any
termination charges relating to the termination of any Operating
Agreements.
(b) Buyer
shall pay the following costs and expenses at Closing:
(1) Costs
of
transferring any Operating Agreements;
(2) Costs
of
recording the Assignment and Assumption of Ground Leases and any other transfer
documents requiring recordation (excluding, however, the amount of any transfer
or stamp taxes pertaining to the transfer of the Property from Seller to
Buyer
which shall be equally shared by Sellers and Buyer pursuant to
Section 12.03(a)(7) and 12.03(b)(13));
(3) Forty
percent (40%) of the premium for the Title Policies and one hundred percent
(100%) of all premiums and costs for issuing any endorsements or additional
coverage to the Title Policy and any title insurance premium or cost (including
endorsements and additional coverage with respect thereto) related to Buyer’s
financing;
(4) Costs
of
supplying tax certificates to the Title Company, if required;
(5) The
amount of any sales or use taxes pertaining to the transfer of the Personal
Property from Sellers to Buyer;
(6) Any
indebtedness or mortgage related taxes and recording or other fees relating
to
any mortgage, deed of trust or other security instrument executed by
Buyer;
(7) All
fees,
costs and expenses incurred with respect to any purchase money financing
incurred by Buyer;
(8) Buyer’s
prorated share of all real estate and tangible personal property taxes, rents,
or assessments as set forth in this Agreement;
(9) Buyer’s
own legal expenses;
(10) One-half
of the closing fee and/or settlement fee (including any excise taxes thereon)
charged by Escrow Agent;
(11) The
cost
of preparing any updates to the Surveys;
(12) Any
costs
or expenses incurred by Buyer in connection with its inspections and due
diligence performed on the Property; and
(13) One-half
of the amount of any transfer or stamp tax pertaining to the transfer of
the
Property from Sellers to Buyer.
(14) Any
and
all other costs and expenses expressly allocated to Buyer under this
Agreement.
(15) All
fees
to obtain new liquor licenses.
Section
12.04. Revenue
and Expense Prorations.»
Pursuant
to Article IV, Sellers and Buyer will make appropriate apportionments and
prorations of expenses, rents, taxes and revenues and settle them by appropriate
credits on the Closing Statement or pursuant to the Operations Settlement,
as
the case May be.
Section
12.05. Closing
Documents.
At the
Closing, Buyer and Sellers shall also execute and deliver such documents
as are
specified or contemplated by this Agreement, including, but not limited to,
those required by Sections 4.01 and 10.01.
ARTICLE
XIII.
INSURANCE,
CONDEMNATION AND CASUALTY
Section
13.01. Insurance.
All
Sellers’ insurance policies, including, without limitation, fire and any
additional hazard insurance, shall be cancelled by Sellers as of the Transfer
Time, and any refunded premiums shall be retained by Sellers. Buyer will
be
responsible for acquiring and placing its own insurance in force from and
after
the Transfer Time.
Section
13.02. Condemnation.
If prior
to Closing, any proceedings, judicial, administrative or otherwise, which
relate
to a taking or proposed taking of any portion of a Hotel by eminent domain,
the
applicable Seller shall promptly notify Buyer of the same (the “Condemnation
Notice”).
If
such Hotel is subject to an Immaterial Taking, the applicable Seller shall
so
notify Buyer pursuant to the Condemnation Notice and this Agreement will
remain
in full force and effect, but at Closing the applicable Seller shall assign
all
condemnation proceeds payable (but not yet paid as of Closing) to Buyer and
to
the extent that the applicable Seller has received any condemnation proceeds
prior to Closing, Seller shall xxxxx the Purchase Price by an amount equal
to
the award paid to Seller on account of such taking. If such condemnation
is not
an Immaterial Taking, Buyer may elect within ten (10) Business Days of its
receipt of the Condemnation Notice, and the Closing Date shall, if necessary,
be
extended to give Buyer the benefit of the entire ten (10) Business Day period,
either (i) to
terminate this Agreement as to the affected Hotel only, in which event the
Purchase Price shall be reduced by the Allocated Purchase Price of the affected
Hotel and Buyer shall proceed to Closing on the remaining Hotels, subject
to the
other terms and conditions of this Agreement, or (ii) to
consummate the transactions contemplated hereby, notwithstanding such
condemnation, without any abatement or reduction in the Purchase Price on
account thereof except as herein provided, but at Closing the applicable
Seller
shall assign all condemnation proceeds payable (but not yet paid as of Closing)
to Buyer and to the extent that the applicable Seller has received any
condemnation proceeds prior to Closing, Seller shall xxxxx the Purchase Price
by
an amount equal to the award paid to Seller on account of such taking, less
the
amount of Seller’s costs and expenses, including reasonable attorneys’ fees and
expenses, in establishing and collecting such award. In addition, if Buyer
elects to proceed in accordance with clause (ii) above, Buyer shall have
the right to appear and defend at such condemnation proceedings. Buyer shall
make any such election by written notice to Sellers given on or prior to
the
fifth (5th) day after Buyer’s receipt of the Condemnation Notice. Failure of
Buyer to give such notice within the time prescribed by the preceding sentence
shall be deemed an election by Buyer to proceed in accordance with
clause (ii) above.
Section
13.03. Casualty.
If prior
to Closing, any Hotel is damaged or destroyed by fire or other casualty,
the
applicable Seller shall promptly, but in any event within five (5) Business
Days, notify Buyer of the same (the “Casualty
Notice”).
If
the cost of restoring the damage to such Hotel is less than the greater of
(i)
one million dollars ($1,000,000) and (ii) seven and one half percent (7.5%)
of
the Allocated Purchase Price of the affected Hotel (as mutually determined
by
the applicable Seller and Buyer, acting reasonably), the applicable Seller
shall
so notify Buyer pursuant to the Casualty Notice and this Agreement will remain
in full force and effect, but at Closing the Purchase Price shall be reduced
by
an amount equal to (x) the cost of restoring the damage to the affected Hotel
less (y) the insurance proceeds unconditionally payable (but not yet paid)
that
are assigned by the applicable Seller to Buyer at Closing. If the cost of
restoring the damage to such Hotel is more than the greater of (i) one million
dollars ($1,000,000) and (ii) seven and one half percent (7.5%) of the Allocated
Purchase Price of the affected Hotel (as mutually determined by the applicable
Seller and Buyer, acting reasonably), Buyer may elect within ten (10)
Business Days of its receipt of the Casualty Notice, (and the Closing Date
shall, if necessary, be extended to give Buyer the benefit of the entire
ten
(10) Business Day period), either (i) to
terminate this Agreement as to the affected Hotel only, in which event the
Purchase Price shall be reduced by the Allocated Purchase Price of the affected
Hotel and Buyer shall proceed to Closing on the remaining Hotels, subject
to the
other terms and conditions of this Agreement, or (ii) to
consummate the transactions contemplated hereby, notwithstanding such casualty,
but at Closing the Purchase Price shall be reduced by an amount equal to
(x) the
cost of restoring the damage to the affected Hotel less (y) the insurance
proceeds unconditionally payable (but not yet paid) that are assigned by
the
applicable Seller to Buyer at Closing. If prior to Closing, any Hotel is
damaged
or destroyed by fire or other casualty and Buyer does not terminate this
Agreement as to the affected Hotel (regardless of whether Buyer has the right
to
so terminate), at Closing, Seller shall assign all insurance proceeds
unconditionally payable (but not yet paid) to Buyer.
ARTICLE
XIV.
MISCELLANEOUS
COVENANTS AND PROVISIONS
Section
14.01. Assignment;
Successors and Assigns.»
Except
as
otherwise provided in this Section 14.01, neither this Agreement nor any
right or interest herein may be assigned by Buyer without the prior written
approval of Sellers. Notwithstanding anything to the contrary, Buyer shall
have
the right to assign all or any of this Agreement to one or more Affiliates
of
Whitehall Street Global Real Estate Limited Partnership 2005 without obtaining
Sellers’ consent; provided that (1) such
permitted assignee(s) assumes in writing all of Buyer’s applicable obligations
and liabilities hereunder, (2) a
copy of
the assignment and assumption of this Agreement is provided to Sellers promptly
following execution thereof, (3) Buyer
shall not be released from any of its obligations to Sellers hereunder and
(4) the
Deposit shall be and remain the property of Buyer and notwithstanding anything
herein to the contrary, following assignments by Buyer, at Closing the Deposit
shall be returned to Buyer and Buyer and/or its permitted assignees shall
pay
the full Purchase Price to Sellers. Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the parties hereto and
their
respective heirs, legal representatives, successors and assigns.
Section
14.02. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which shall constitute one and the same
instrument.
Section
14.03. Waiver.
No
failure or delay in acting by any party to this Agreement shall be deemed
a
waiver of such party’s rights. Any waiver of rights or remedies shall be
required to be signed by the party charged with the waiver in order for such
waiver to be effective.
Section
14.04. Amendments.
This
Agreement may be modified or amended only by the written consent of Sellers
and Buyer.
Section
14.05. Further
Agreements.
Each
party agrees that it will execute and deliver to the other party any additional
documents, agreements or instruments necessary or reasonable to give effect
to
this Agreement or any provision hereof.
Section
14.06. Waiver
of Jury Trial.
Buyer
and Sellers each hereby absolutely, irrevocably and unconditionally waive
trial
by jury in any litigation, action, claim, suit or proceeding, at law or in
equity, arising out of, pertaining to or in any way associated with the
covenants, obligations, representations or warranties set forth herein, this
Agreement or any other agreement, instrument or document entered into in
connection herewith, or any actions or omissions in connection with any of
the
foregoing.
Section
14.07. Attorneys’
Fees.
In the
event that any party is required to retain the services of an attorney to
enforce or otherwise litigate or defend any matter or claim arising out of
or in
connection with this Agreement, then the prevailing party shall be entitled
to
its reasonable attorneys’ fees from the non-prevailing party.
Section
14.08. Entire
Agreement.
This
Agreement (including any Schedules hereto) sets forth all the promises,
representations, agreements, conditions and understandings relative to the
transactions set forth herein, and neither Sellers nor Buyer are relying
upon
any promises, representations, agreements, conditions or understandings,
either
oral or written, (which are hereby superseded in their entirety) other than
those expressed in this Agreement.
Section
14.09. Brokers
and Finders.
Sellers
and Buyer each represent and warrant to the other that it has not employed,
retained or consulted any broker, agent or other finder with respect to the
Property or in carrying on negotiations relative to this Agreement, except
as
provided for in this Section 14.09, and Sellers and Buyer shall indemnify
and hold the other harmless from and against any and all claims, demands,
causes
of action, debts, liabilities, judgments and damages (including costs and
reasonable attorneys’ fees incurred in connection with the enforcement of this
indemnity) which may be asserted or recovered against the other on account
of any brokerage fee, commission, or other compensation arising in breach
of
this representation and warranty. Sellers and Buyer hereby acknowledge that
Broker, a licensed real estate broker involved in the negotiation of the
transactions contemplated herein, shall be paid a sales commission by Sellers
at
Closing if, and only if, the transactions contemplated by this Agreement
are
closed and consummated and that the foregoing indemnity from Sellers to Buyer
shall apply with respect to any claim for a sales commission by Broker with
respect to this transaction.
Section
14.10. Notices.
All
notices, demands and requests required, permitted or given pursuant to the
provisions of this Agreement shall be in writing, and either hand delivered
in
person or delivered by certified mail, postage prepaid, return receipt
requested, or by Federal Express or other similar overnight courier
service,
or by
facsimile transmission or by e-mail (with a confirming copy sent by Federal
Express or other similar overnight courier service) addressed as
follows:
|
If
to Buyer:
|
W2005
NEW CENTURY HOTEL PORTFOLIO, L.P.
c/o
Goldman Sachs & Co.
00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention:
Xxx Xxxxxxx, Managing Director
Tel.
No. 000-000-0000
Fax
No. 000-000-0000
E-mail:
xxx.xxxxxxx@xx.xxx
|
|
with
a copy to:
|
|
|
Xxxxxxxx
& Xxxxxxxx, LLP
000
Xxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000-0000
Attention:
Xxxxxxx X. Xxxxxxxx, Esquire
Tel.
No. 000-000-0000
Fax
No. 000-000-0000
E-mail:
xxxxxxxxx@xxxxxxxx.xxx
|
|
|
If
to Seller:
|
CNL
Hotels & Resorts, Inc.
CNL
Center at City Commons
000
Xxxxx Xxxxxx Xxxxxx
Xxxxx
000
Xxxxxxx,
Xxxxxxx 00000-0000
Attention:
Xx. Xxxxxx Xxxxxxx,
Senior
Vice President and
Chief
Investment Officer
Tel.
No. (000) 000-0000
Fax
No. (000) 000-0000
E-mail:
xxxxxxxx@xxxxxxxxx.xxx
|
|
with
a copy to:
|
|
|
Lowndes,
Drosdick, Doster, Xxxxxx
&
Xxxx, P.A.
000
X. Xxxx Xxxxx
Xxxxxxx,
Xxxxxxx 00000-0000
Attention:
Xxxxxxx X. Xxxxxx, Esquire
Tel.
No. (000) 000-0000
Fax
No. (000) 000-0000
E-mail:
Xxxxxxx.Xxxxxx@xxxxxxx-xxx.xxx
|
|
Any
notice, demand or request which shall be served upon any of the parties in
the
manner aforesaid shall be deemed sufficiently given (i) upon
being hand delivered in person, (ii) transmitted
by facsimile transmission or by e-mail provided a copy is sent that same
date
pursuant to Federal Express or other recognized overnight carrier or
(iii) upon
being deposited with Federal Express or other similar overnight courier service;
provided, however, the time period in which any response to such notice,
demand
or request must be given shall commence on the date of actual delivery of
the
notice, demand or request to the address to which it is sent (rather than
delivery to the specific addressee). The addresses given above may be
changed by any party by ten (10) days’ prior notice to all other parties given
in the manner provided herein.
Section
14.11. Section Headings;
Interpretation.
The
section headings of this Agreement are for reference only and shall not be
used
to construe or interpret this Agreement. All terms and words used in this
Agreement, regardless of the number or gender in which they are used, shall
be
deemed to include any other number and any other gender as the context
may require. If any term or condition of this Agreement or the application
thereof to any Person or circumstance shall, to any extent, be held legally
invalid or unenforceable, the remainder of this Agreement, and the application
of such terms or conditions to Persons or circumstances other than those
as to
which it is held legally invalid or unenforceable, shall not be affected
thereby
and each term and condition of this Agreement shall be valid to the fullest
extent permitted by law.
Section
14.12. Governing
Law.
This
Agreement shall be governed by the laws of the state of Florida; provided,
however, that with respect to matters that relate to a specific portion of
the
Property, this Agreement shall be governed by the laws of the state where
such
Property is located.
Section
14.13. Exclusivity.
Sellers
shall not market, offer for sale, or entertain any offer relating to the
sale of
the Property for the term of this Agreement; provided that Seller’s obligation
under this Section 14.13 shall expire and be of no further force or effect
upon (i) the
termination or expiration of this Agreement, or (ii) the
delivery by Sellers to Buyer of a notice of Buyer’s default of its obligations
to close the purchase and sale transaction contemplated by this
Agreement.
Section
14.14. Disclosure
of Confidential Information/ Public Announcements/ Communication with
Governmental Authorities/ Communication with Employees.
(a) The
parties hereto acknowledge and agree that the existence of this Agreement,
the
terms of this Agreement and any other information disclosed in the due diligence
materials delivered to or produced by Buyer or any other documents, materials,
data or other information with respect to the Property which is not generally
known to the public (the “Confidential
Information”)
shall
in all respects remain confidential and shall not be disclosed by the Buyer
except as provided herein. Buyer may disclose Confidential Information to
officers, directors, employees, attorneys, accountants, consultants, lenders,
financial advisors, partners and investors (collectively, “Representatives”),
who
in the reasonable business judgment of such party, need to know the Confidential
Information for the purpose of consummating the transactions contemplated
by
this Agreement. Buyer will inform its Representatives of its confidentiality
obligations under this Agreement, and such Representatives shall agree to
be
bound by the terms and conditions of this Agreement, before Buyer
may disclose any Confidential Information to its Representatives. The
disclosure of any Confidential Information by any Representative in breach
of
this Agreement will constitute a breach of this Agreement by Buyer, for which
Buyer will be liable. If Buyer or any of its Representatives is required
by any
subpoena, interrogatories, request for production, or other legal process
or by
any applicable law or regulation to disclose any Confidential Information,
Buyer
will give (to the extent not prohibited by law) Sellers prompt written notice
of
the requirement and will cooperate with the Sellers so that Sellers, at their
expense, may seek an appropriate protective order. In the absence of a
protective order, Buyer and its Representatives may disclose only such
Confidential Information as may in Buyer’s reasonable opinion, be necessary
to avoid any penalty, sanction, or other material adverse consequence, and
Buyer
will use commercially reasonable efforts to secure confidential treatment
of any
Confidential Information so disclosed.
(b) Notwithstanding
the foregoing, any party hereto shall have the right to make a public
announcement regarding the transaction described in this Agreement, provided,
however, that, prior to and as a condition precedent to such public
announcement, all other parties hereto shall approve the timing, form and
substance of any such public announcement, except if a party hereto is required
to make a public announcement under any securities law, the party making
such
public announcement may do so only after having provided the other party
with a copy of such public announcement and only as long as such public
announcement is made in strict accordance with the applicable law requiring
such
public announcement be made. Any public announcements made on the Effective
Date
(or the next business day) shall have been agreed to by the parties as to
its
form and content prior to the parties executing this Agreement.
(c) Without
limiting the generality of the provisions in subsection (a) above, until
Closing, Buyer shall not, through its officers, employees, managers,
contractors, consultants, agents, representatives or any other Person
(including, without limitation, Buyer’s third party consultants), directly or
indirectly, communicate with any governmental authority or any official,
employee or representative thereof, involving any matter with respect to
the
Property without the Sellers’ prior written consent, which consent shall not be
unreasonably withheld unless such communication is arranged by the Sellers.
Notwithstanding the foregoing, (i) Buyer
and
its representatives and consultants shall have the right to review building
department, health department and other local governmental authority records
with respect to the Property and the operation of the Hotels and request
written
or verbal confirmation of zoning and any other compliance by the Land or
Hotels
with any applicable laws, without any requirement to obtain the consent of
the
Sellers, and (ii) Buyer
shall have the right to communicate with the applicable governmental authority
in connection with the issuance of any liquor licenses required for the sale
of
liquor at the Hotels, and any and all other permits or licenses required
to be
transferred or applied for in connection with the sale of the Hotels, all
without the prior consent of the Sellers; provided, however, that (x) Buyer
shall provide Sellers with regular updates regarding the progress of any
and all
such communications; and (y) no
inspections of the Hotels by the applicable governmental authorities shall
occur
unless a representative of the Sellers is present during such
inspections.
(d) Communication
with Employees.
Without
limiting the generality of the provisions in subsection (a) above, Buyer
shall
not, through its officers, employees, managers, contractors, consultants,
agents, representatives or any other Person (including, without limitation,
Buyer’s third party consultants), directly or indirectly, communicate with any
Employees or any Person representing any Employees involving any matter with
respect to the Property, the Employees or this Agreement, without the prior
written consent of Sellers and Manager, which consent may be withheld in
the sole discretion of Sellers and Manager, unless such communication is
arranged by the Sellers and/or Manager.
(e) No
Survival.
This
Section 14.14 expressly shall not survive closing.
Section
14.15. Time
of Essence.
Time is
of the essence of this Agreement and each term and provision hereof; provided,
however (unless specifically provided to the contrary elsewhere in this
Agreement), when the date by which any action, event or condition is to occur
or
any notice or other communication is to be given falls on a Saturday, Sunday
or
legal holiday, the date by which such action, event or condition is to occur
or
such notice or other communication is to be given shall be automatically
extended to the business day immediately succeeding such Saturday, Sunday
or
legal holiday.
Section
14.16. Joint
and Several Liability.»
The
obligations of the Sellers under this Agreement shall be joint and several.
Section
14.17. RADON
GAS.
(Concerning Florida Hotels only) Radon is a naturally occurring radioactive
gas
that, when it has accumulated in a building in sufficient quantities,
may present health risks to Persons who are exposed to it over time. Levels
of radon that exceed federal and state guidelines have been found in buildings
in the State in which the Property is located. Additional information regarding
radon and radon testing May be obtained from your county public health
unit.
IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered as of
the
date first above written.
[SIGNATURES
ON FOLLOWING PAGE]
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BUYER:
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W2005
New Century Hotel Portfolio, L.P.,
a
Delaware limited liability company
By:
X0000
Xxx Xxxxxxx Xxxxx Xxxxxxxxx XX, L.L.C.,
a
Delaware limited liability company, its general partner
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By:
/s/ Xxxx Gianndole
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Name:
Xxxx Gianndole
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Its: Manager
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SELLERS:
ROSE
SPE 1, LP,
a
Delaware limited partnership
By: Rose
SPE 1 GP, LLC,
a
Delaware limited liability company,
its
sole
general partner
By:
/s/ Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: Senior
Vice President
RFS
SPE 1 1998, LLC,
a
Virginia limited liability company
By:
RFS
MM 1 1998 CORPORATION,
a
Virginia corporation, as Managing Member
By:
/s/ Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: Senior
Vice President
RFS
SPE 2 1998, LLC,
a
Virginia limited liability company
By:
RFS
MM 2 1998 CORPORATION,
a
Virginia corporation, as Managing Member
By:
/s/ Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: Senior
Vice President
RFS
SPE 2000, LLC,
a
Virginia limited liability company
By:
RFS
MM 2000 CORPORATION,
a
Virginia corporation, as Managing Member
By:
/s/ Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: Senior
Vice President
RFS
SPE2 2000, LLC,
a
Virginia limited liability company
By:
RFS
MM 2 2000 CORPORATION,
a
Virginia corporation, as Managing Member
By:
/s/ Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: Senior
Vice President
RFS
PARTNERSHIP, L.P.,
a
Tennessee limited partnership
By: CNL
Rose GP Corp.,
a
Delaware corporation
its
sole
general partner
By:
/s/ Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: Senior
Vice President
CNL
HOSPITALITY PARTNERS, LP,
a
Delaware limited partnership
By: CNL
Hospitality GP Corp.,
a
Delaware corporation,
its
sole
general partner
By:
/s/ Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: Senior
Vice President
JOINDER
OF ESCROW AGENT
First
American Title Insurance Company d/b/a The Talon Group hereby joins in the
execution of this Agreement for the limited purpose of acknowledging and
agreeing to act as Escrow Agent as contemplated in Section 2.05.
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First
American Title Insurance Company
d/b/a
The Talon Group
By:
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