Exhibit 2.2
PURCHASE AND SALE AGREEMENT
by and among
CANDLEWOOD HOTEL COMPANY, INC. AND CERTAIN OF ITS AFFILIATES,
as Sellers,
and
HOSPITALITY PROPERTIES TRUST,
as Purchaser
---------------------------
October __, 2003
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS........................................................... 2
1.1 1934 Act.............................................................. 3
1.2 Agreement............................................................. 3
1.3 Allocable Purchase Price.............................................. 3
1.4 Apportionment Time.................................................... 3
1.5 Assets................................................................ 3
1.6 Assumed Debt.......................................................... 3
1.7 Business Day.......................................................... 3
1.8 Candlewood............................................................ 3
1.9 Candlewood Parties.................................................... 3
1.10 Closing............................................................... 3
1.11 Closing Date.......................................................... 3
1.12 Contracts............................................................. 3
1.13 Code.................................................................. 4
1.14 Documents............................................................. 4
1.15 Excluded Assets....................................................... 4
1.16 FAS................................................................... 4
1.17 FF&E................................................................. 4
1.18 Final Calculation..................................................... 4
1.19 Financial Agreement................................................... 4
1.20 Fort Worth Property................................................... 5
1.21 Xxxxxxx Estates Property.............................................. 5
1.22 Hotel................................................................. 5
1.23 Improvements.......................................................... 5
1.24 Intangible Property................................................... 5
1.25 Inventories........................................................... 5
1.26 Jersey City Owner..................................................... 5
1.27 Jersey City Property.................................................. 5
1.28 JPD................................................................... 6
1.29 Knowledge............................................................. .6
1.30 Lease................................................................. 6
1.31 Material Adverse Effect............................................... 6
1.32 Opening Date.......................................................... 6
1.33 Other Transaction Agreements.......................................... 7
1.34 Outside Closing Date.................................................. 7
1.35 Overland Park Lender.................................................. 7
1.36 Permitted Encumbrances................................................ 7
1.37 Plano Property........................................................ 7
1.38 Plans and Specifications.............................................. 7
1.39 Properties............................................................ 7
1.40 Proxy Statement....................................................... 7
1.41 Purchase Price........................................................ 8
1.42 Purchase Proposal..................................................... 8
1.43 Purchaser............................................................. 8
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1.44 Real Property......................................................... 8
1.45 Review Period......................................................... 8
1.46 San Antonio Property.................................................. 8
1.47 SCH................................................................... 8
1.48 SCH Agreements........................................................ 8
1.49 SCH Purchase Agreement................................................ 8
1.50 SEC................................................................... 8
1.51 Sellers............................................................... 8
1.52 Special Meeting....................................................... 8
1.53 Stockholder Approval.................................................. 8
1.54 Tax................................................................... 9
1.55 Tax Return............................................................ 9
1.56 Tenant Leases......................................................... 9
1.57 Termination Agreement................................................. 9
1.58 Title Company......................................................... 9
1.59 Transactions.......................................................... 9
1.60 Treasury Regulations.................................................. 9
1.61 True-up............................................................... 9
1.62 Uniform System of Accounts............................................ 10
SECTION 2. PURCHASE AND SALE; DILIGENCE.......................................... 10
2.1 Purchase and Sale..................................................... 10
2.2 Jersey City Owner..................................................... 10
2.3 Diligence Inspections................................................. 10
SECTION 3. PURCHASE AND SALE..................................................... 11
3.1 Closing............................................................... 11
3.2 Purchase Price........................................................ 11
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE......................... 12
4.1 Accuracy of Representations........................................... 12
4.2 Performance of Obligations............................................ 12
4.3 Closing Documents..................................................... 12
4.4 Condition of Properties............................................... 14
4.5 Title and Survey...................................................... 14
4.6 Lease................................................................. 14
4.7 Termination Agreement................................................. 14
4.8 Termination of Lease for Jersey City Property......................... 14
4.9 SCH Transactions...................................................... 15
4.10 Stockholder Approval.................................................. 15
4.11 Assumed Debt.......................................................... 15
SECTION 5. CONDITIONS TO CANDLEWOOD PARTIES' OBLIGATION TO CLOSE................. 16
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5.1 Purchase Price........................................................ 16
5.2 Accuracy of Representations........................................... 16
5.3 Performance of Obligations............................................ 16
5.4 Closing Documents..................................................... 16
5.5 Assumed Debt.......................................................... 17
5.6 Termination Agreement................................................. 17
5.7 SCH Transactions...................................................... 17
5.8 Stockholder Approval.................................................. 17
SECTION 6. REPRESENTATIONS AND WARRANTIES OF CANDLEWOOD PARTIES.................. 18
6.1 Status and Authority of the Candlewood Parties........................ 18
6.2 Action of the Candlewood Parties...................................... 18
6.3 No Violations of Agreements........................................... 18
6.4 Litigation............................................................ 18
6.5 Existing Leases, Agreements, Etc...................................... 19
6.6 Assumed Debt.......................................................... 19
6.7 Disclosure............................................................ 19
6.8 Utilities, Etc........................................................ 19
6.9 Compliance With Law................................................... 20
6.10 Taxes................................................................. 20
6.11 Not A Foreign Person.................................................. 20
6.12 Hazardous Substances.................................................. 20
6.13 Insurance............................................................. 21
6.14 Ownership of Sellers.................................................. 21
6.15 Substantial Completion................................................ 21
6.16 Condition of Properties............................................... 21
6.17 Jersey City Owner..................................................... 21
6.18 Tax Abatement for Jersey City Property................................ 23
6.19 Fort Worth Property................................................... 23
6.20 Plano Property........................................................ 23
6.21 San Antonio Property.................................................. 23
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER........................... 25
7.1 Status and Authority of the Purchaser................................. 25
7.2 Action of the Purchaser............................................... 25
7.3 No Violations of Agreements........................................... 25
7.4 Litigation............................................................ 26
7.5 Financing............................................................. 26
SECTION 8. COVENANTS OF THE CANDLEWOOD PARTIES................................... 26
8.1 Compliance with Laws, Etc............................................. 26
8.2 Approval of Agreements................................................ 27
8.3 Approval of SCH Agreements............................................ 27
8.4 Notice of Material Changes or Untrue Representations.................. 27
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8.5 Financial Information................................................. 27
8.6 Jersey City Owner..................................................... 28
8.7 Proxy Statement....................................................... 28
8.8 Special Meeting....................................................... 28
8.9 No Solicitation....................................................... 28
8.10 Termination Fee....................................................... 30
8.11 Conduct of the Business............................................... 30
8.12 Cooperation........................................................... 32
8.13 Lender Estoppel Certificate........................................... 32
SECTION 9. PRORATIONS AND OTHER ADJUSTMENTS...................................... 32
9.1 Prorations............................................................ 33
9.2 Closing Costs......................................................... 35
9.3 Additional Tax Matters................................................ 35
9.4 Survival.............................................................. 36
SECTION 10. CASUALTY AND CONDEMNATION............................................. 36
10.1 Casualty.............................................................. 36
10.2 Condemnation.......................................................... 36
10.3 Survival.............................................................. 37
SECTION 11. TERMINATION........................................................... 37
11.1 Right to Terminate.................................................... 37
11.2 Effect of Termination................................................. 38
SECTION 12. MISCELLANEOUS......................................................... 39
12.1 Brokerage Commissions................................................. 39
12.2 Publicity............................................................. 40
12.3 Notices............................................................... 40
12.4 Waivers, Etc.......................................................... 42
12.5 Assignment; Successors and Assigns.................................... 42
12.6 Severability.......................................................... 43
12.7 Counterparts, Etc..................................................... 43
12.8 Governing Law......................................................... 43
12.9 Waiver of Trial by Jury............................................... 44
12.10 Performance on Business Days.......................................... 44
12.11 Attorneys' Fees....................................................... 44
12.12 Section and Other Headings............................................ 45
12.13 Specific Performance.................................................. 44
12.14 Tax Treatment of Acquisition of Member Interests...................... 45
12.15 Non-Recourse.......................................................... 45
12.16 Nonliability of Trustees.............................................. 46
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Schedule A The Properties; Allocable Purchase Prices
Schedules B-1 - B-12 Legal Descriptions
Schedule C Title Conditions
Schedules D-1 - D-12 Title Policies
Schedule E List of Plans and Specifications
Schedule F Form of Xxxx of Sale
Schedule G Form of Seller's Certificate
Schedule H Form of Lender's Estoppel
Schedule I Disclosure Schedule
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made as of October __, 2003 by and
among (i) CANDLEWOOD HOTEL COMPANY, INC., a Delaware corporation ("Candlewood"),
(ii) the entities listed as "sellers" on the signature pages of this Agreement
(each, individually, a "Seller" and, collectively, the "Sellers"), (iii) JPD
CORPORATION, a Kansas corporation ("JPD"), and (iv) HOSPITALITY PROPERTIES
TRUST, a Maryland real estate investment trust (the "Purchaser").
WITNESSETH:
WHEREAS, the Sellers are the owners of all the Properties (all capitalized
terms used and not otherwise defined herein having the meanings ascribed to such
terms in Section 1); and
WHEREAS, the Purchaser desires to purchase the Properties, as more fully
set forth below; and
WHEREAS, the Sellers are willing to sell all of the Properties to the
Purchaser, subject to and upon the terms and conditions hereinafter set forth;
and
WHEREAS, Candlewood owns, directly or indirectly, all of the Sellers and
the transactions contemplated by this Agreement are of direct and material
benefit to Candlewood; and
WHEREAS, contemporaneously with the execution of this Agreement,
Candlewood and certain of its subsidiaries are entering into the Termination
Agreement and the SCH Purchase Agreement (such agreement, together with the
Termination Agreement, the "Other Transaction Agreements");
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the mutual receipt and legal
sufficiency of which are hereby acknowledged, the Candlewood Parties and the
Purchaser hereby agree as follows:
SECTION 1. DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings set forth
below or in the Section of this Agreement referred to below:
1.1 "1934 Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules promulgated thereunder.
1.2 "Agreement" shall mean this Purchase and Sale Agreement, together with
the Schedules attached hereto, as it and they may be amended from time to time
as herein provided.
1.3 "Allocable Purchase Price" shall mean, with respect to each Property,
the amount set forth in Schedule A opposite the name of such Property, it being
understood and agreed that the aggregate amount of the Allocable Purchase Prices
of the Properties shall be Ninety Million Dollars ($90,000,000).
1.4 "Apportionment Time" shall have the meaning given such term in Section
9.1 of this Agreement.
1.5 "Assets" shall mean, with respect to any Hotel, collectively, all of
the Real Property, the FAS, the FF&E, the Contracts, the Documents, the
Improvements, the Intangible Property, the Inventories and the Tenant Leases
owned by any of the Sellers in connection with or relating to such Hotel,
excluding the Excluded Assets.
1.6 "Assumed Debt" shall mean the outstanding indebtedness of the
Candlewood Parties to the Overland Park Lender which is secured by, among other
things, a mortgage and security agreement which encumbers the Property located
at 00000 Xxxxxxx, Xxxxxxxx Xxxx, Xxxxxx 00000.
1.7 "Business Day" shall mean any day other than a Saturday, Sunday or any
other day on which banking institutions in The Commonwealth of Massachusetts or
the State of New York are authorized by law or executive action to close.
1.8 "Candlewood" shall have the meaning given such term in the first
paragraph of this Agreement.
1.9 "Candlewood Parties" shall mean, collectively, Candlewood, the Sellers
and JPD.
1.10 "Closing" shall have the meaning given such term in Section 3.1.
1.11 "Closing Date" shall have the meaning given such term in Section 3.1.
1.12 "Contracts" shall mean, with respect to any Property, all hotel
licensing agreements and other service contracts,
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equipment leases, booking agreements and other arrangements or agreements to
which any of the Sellers is a party affecting the ownership, repair,
maintenance, management, leasing or operation of such Property, to the extent
the Sellers' interest therein is assignable or transferable, excluding the
Excluded Assets; provided, however, that the term "Contracts" shall not include
any agreement between any Seller and any Candlewood Party or any of its
affiliates, including, without limitation, those certain management agreements,
dated as of various dates, between any Seller and Candlewood with respect to
such Seller's respective Properties, which management agreements shall be
terminated with respect to such affected Properties on or prior to the Closing
Date.
1.13 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.14 "Documents" shall mean, with respect to any Property, all books,
records and files relating to the leasing, maintenance, management or operation
of such Property, excluding the Excluded Assets.
1.15 "Excluded Assets" shall mean any "Assets" as such term is defined in
the SCH Purchase Agreement.
1.16 "FAS" shall mean, with respect to any Property, all items included
within "Property and Equipment" under the Uniform System of Accounts, including,
but not limited to, linen, china, glassware, tableware, uniforms and similar
items, whether used in connection with public space or guest rooms, owned by any
of the Sellers and located in or at, or used in connection with the ownership,
operation or maintenance of such Property, excluding the Excluded Assets.
1.17 "FF&E" shall mean, with respect to any Property, all appliances,
machinery, devices, fixtures, appurtenances, equipment, furniture, furnishings
and articles of tangible personal property of every kind and nature whatsoever
(other than motor vehicles) owned by any of the Sellers and located in or at, or
used in connection with the ownership, operation or maintenance of such
Property, excluding the Excluded Assets.
1.18 "Final Calculation" shall have the meaning given such term in Section
9.1(c).
1.19 "Financial Agreement" shall mean that certain Financial Agreement,
dated as of December 14, 1998, between the Jersey City Owner and the City of
Jersey City, as amended by an
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Amended Financial Agreement, dated as of September 13, 1999, and an Amendment to
the Amended Financial Agreement, dated as of April 18, 2002.
1.20 "Fort Worth Property" shall mean, collectively, all of the Assets
relating to the Property located at 0000 Xxxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxx
00000.
1.21 "Xxxxxxx Estates Property" shall mean, collectively, all of the
Assets relating to the Property located at 0000 Xxxxxxxxxxx Xxxxxxx, Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000.
1.22 "Hotel" shall mean each hotel located at the properties identified on
Schedule A, the legal descriptions of which properties are set forth on
Schedules B-1 through B-12.
1.23 "Improvements" shall mean, with respect to any Property, all
buildings, fixtures, walls, fences, landscaping and other structures and
improvements situated on, affixed or appurtenant to the Real Property with
respect to such Property.
1.24 "Intangible Property" shall mean, with respect to any Property, all
transferable or assignable permits, certificates of occupancy, operating
permits, sign permits, development rights and approvals, certificates, licenses,
warranties and guarantees, the Contracts, telephone exchange numbers identified
with such Property held by any of the Sellers and all other transferable
intangible property, miscellaneous rights, benefits and privileges of any kind
or character with respect to such Property held by any of the Sellers, excluding
the Excluded Assets.
1.25 "Inventories" shall mean, with respect to any Property, all
"Inventories" as defined in the Uniform System of Accounts owned by any of the
Sellers and located in or at, or used in connection with the ownership,
operation or maintenance of such Property, excluding the Excluded Assets.
1.26 "Jersey City Owner" shall mean Candlewood Jersey City-Urban Renewal,
L.L.C., a New Jersey limited liability company and the owner of the fee simple
interest in the Real Property comprising a portion of the Jersey City Property
and certain of the other Assets related thereto.
1.27 "Jersey City Property" shall mean, collectively, all of the Assets
relating to the Property located at 00 0xx Xxxxxx Xxxxxxxxx, Xxxxxx Xxxx, Xxx
Xxxxxx 00000.
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1.28 "JPD" shall have the meaning given such term in the first paragraph
of this Agreement.
1.29 "Knowledge" means (a) with respect to an individual, "knowledge" of a
particular fact or other matter if such individual is aware of such fact or
other matter; and (b) with respect to any entity (other than an individual),
"knowledge" of a particular fact or other matter if any individual who is
serving as a director, executive officer or an executive-level manager of such
entity (as opposed to an on-site manager of any Property) is aware of such fact
or other matter.
1.30 "Lease" shall mean that certain Second Amended and Restated Lease
Agreement, dated as of April 12, 2002, between HPT CW Properties Trust, Xxxx X.
Xxxxxx, Trustee of HPT CW MA Realty Trust and HH HPTCW II Properties LLC, as
landlord, and Candlewood Leasing No. 1, Inc., as tenant, as the same has been
and may be amended from time to time.
1.31 "Material Adverse Effect" shall mean (a) any changes, events,
developments or effects that have had or are reasonably likely to have, in the
aggregate, a materially adverse effect on (i) the liabilities, prospects,
condition (financial or other), or results of operations of the Properties,
taken as a whole, or (ii) the ability of the Candlewood Parties or the Purchaser
to consummate the transactions contemplated by this Agreement, (b) any changes,
events, developments or effects that have had, or are reasonably likely to have,
in the aggregate, an adverse effect on the liabilities, prospects, condition
(financial or other) or results of operations of the Properties (including any
loss, cost, damage, expense or diminution in value) with an aggregate value of
$9,000,000 or more, except in each case of clause (a)(i) and (b) above, for any
such change or condition resulting from (i) changes or developments primarily
resulting from the announcement or pendency of this Agreement or the Other
Transaction Agreements, (ii) changes or developments in the industry in which
the Candlewood Parties operate, (iii) changes or developments which are
attributable to seasonal fluctuations in the industry in which the Candlewood
Parties operate provided that such fluctuations are consistent with the
historical seasonal fluctuations in such industry over the past three (3) years,
or (iv) changes or developments in financial or securities markets or the
economy in general.
1.32 "Opening Date" shall mean, with respect to any Property, the date as
of which all Improvements located at such Property, including, without
limitation, all guest rooms and/or
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suites, shall have opened for business to the public as a Candlewood hotel, in
accordance with applicable brand standards.
1.33 "Other Transaction Agreements" shall have the meaning given such term
in the introductory clauses to this Agreement.
1.34 "Outside Closing Date" shall have the meaning given such term in
Section 11.1(b).
1.35 "Overland Park Lender" shall mean LaSalle Bank National Association,
Trustee for Holders of Bank of America Commercial Mortgage, Inc., Commercial
Mortgage Pass-Through Certificates, Series 2001-PB1, the holder of the Assumed
Debt.
1.36 "Permitted Encumbrances" shall mean, with respect to any Property,
(a) liens for Taxes, assessments and governmental charges with respect to such
Property not yet due and payable or due and payable but not yet delinquent; (b)
applicable zoning regulations and ordinances provided the same do not prohibit
or impair in any material respect use of such Property as an extended stay hotel
as currently operated and constructed; (c) such other nonmonetary encumbrances
as do not, in the Purchaser's reasonable opinion, impair marketability and do
not materially interfere with the use of such Property as a fully functioning
Candlewood hotel; (d) the mortgages, deeds of trust and other recorded
instruments securing the Assumed Debt; and (e) such other encumbrances with
respect to such Property which appear on Schedules D-1 through D-12.
1.37 "Plano Property" shall mean, collectively, all of the Assets relating
to the Property located at 0000 Xxxxxx, Xxxxx, Xxxxx 00000.
1.38 "Plans and Specifications" shall mean, with respect to each Property
other than the Xxxxxxx Estates Property and the San Antonio Property, the plans
and specifications identified on Schedule E with respect to such Property.
1.39 "Properties" shall mean, collectively, all of the Assets relating to
the properties identified on Schedule A, the legal descriptions of which are set
forth in Schedules B-1 through B-12.
1.40 "Proxy Statement" shall have the meaning given such term in Section
8.7 of this Agreement.
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1.41 "Purchase Price" shall mean the sum of the Allocable Purchase Prices,
but in no event more than Ninety Million Dollars ($90,000,000).
1.42 "Purchase Proposal" shall have the meaning given such term in Section
8.9(a) of this Agreement.
1.43 "Purchaser" shall have the meaning given such term in the first
paragraph of this Agreement.
1.44 "Real Property" shall mean, with respect to any Property, the real
property described in the applicable Schedule B-1 through B-12, together with
all easements, rights of way, privileges, licenses and appurtenances which the
Sellers may own with respect thereto.
1.45 "Review Period" shall mean the period expiring on October 27, 2003.
1.46 "San Antonio Property" shall mean, collectively, all of the Assets
relating to the Property located at 0000 XX Xxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxx
00000.
1.47 "SCH" shall mean Six Continents Hotels, Inc., a Delaware corporation.
1.48 "SCH Agreements" shall mean, collectively, the SCH Purchase
Agreement, together with each and every document contemplated therein and
thereby to which SCH (or any of its affiliates) is a party, as the same may be
amended from time to time.
1.49 "SCH Purchase Agreement" shall mean that certain Asset Purchase and
Sale Agreement, dated as of the date hereof, among SCH, Candlewood and
Candlewood Hotel Company, L.L.C., as the same may be amended from time to time.
1.50 "SEC" shall mean the United States Securities and Exchange
Commission.
1.51 "Sellers" shall have the meaning given such term in the first
paragraph of this Agreement.
1.52 "Special Meeting" shall have the meaning given such term in Section
8.8 of this Agreement.
1.53 "Stockholder Approval" shall have the meaning given such term in
Section 4.10 of this Agreement.
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1.54 "Tax" shall mean any and all federal, state, local or non-U.S. taxes,
fees, levies, duties, tariffs, imposts, and other similar charges on or with
respect to net income, alternative or add-on minimum, gross income, gross
receipts, sales, use, ad valorem, franchise, capital, paid-up capital, profits,
greenmail, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, environmental, or windfall profit tax, custom,
duty, value added or other tax, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amount imposed by any governmental entity
responsible for the imposition of any such tax.
1.55 "Tax Return" shall mean any return, claim, election, information
return, declaration, report, statement or other document required to be filed in
respect of Taxes.
1.56 "Tenant Leases" shall mean, with respect to any Property, all leases,
rental agreements or other agreements (other than agreements for letting of
rooms or other facilities to hotel guests), including all amendments or
modifications thereto, which entitle any person to have rights with respect to
the use or occupancy of any portion of such Property, excluding the Excluded
Assets.
1.57 "Termination Agreement" shall mean that certain Termination
Agreement, dated as of the date hereof, among the Purchaser, Candlewood and the
other parties to the Lease, as the same may be amended from time to time.
1.58 "Title Company" shall mean Chicago Title Insurance Company, or such
other title insurance company as shall have been selected by the Purchaser and
approved by the Sellers, which approval shall not be unreasonably withheld,
delayed or conditioned.
1.59 "Transactions" shall have the meaning given such term in Section
4.10.
1.60 "Treasury Regulations" shall mean the federal income Tax regulations
promulgated under the Code, as such regulations may be amended from time to
time.
1.61 "True-up" shall have the meaning given such term in Section 9.1(b).
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1.62 "Uniform System of Accounts" shall mean A Uniform System of Accounts
for Hotels, Ninth Revised Edition, 1996, as published by the Hotel Association
of New York City, as the same may be further revised from time to time.
SECTION 2. PURCHASE AND SALE; DILIGENCE
2.1 Purchase and Sale. In consideration of the mutual covenants herein
contained, the Purchaser hereby agrees to purchase and assume from the
Candlewood Parties and the Candlewood Parties hereby agree to sell and assign to
the Purchaser, all of their right, title and interest in and to the Properties
owned by them and the Assumed Debt for the Purchase Price, subject to and in
accordance with the terms and conditions of this Agreement.
2.2 Jersey City Owner. Notwithstanding anything to the contrary contained
herein, the Purchaser shall have the right, in its sole and absolute discretion,
to elect, by written notice given to Candlewood given at least five (5) Business
Days prior to the Closing Date, to accomplish the purchase and sale of the
Jersey City Property by acquiring all of the membership interests in the Jersey
City Owner, and, to the extent that any of the Assets related to the Jersey City
Property are not owned by the Jersey City Owner, the direct transfer, sale and
conveyance of the title to such Assets by the Candlewood Parties (or other
owners thereof) to the Purchaser or its designee in accordance with the terms
and conditions of this Agreement. In no event shall the foregoing affect, limit
or impair the rights, obligations and agreements of the Candlewood Parties or
the Purchaser contained herein with respect to the Jersey City Property; it
being understood and agreed that, if the foregoing election is made, then, in
addition to the substantive understandings herein that govern the transfer of
membership interests in the Jersey City Owner, the substantive understandings
herein that govern the transfer of the Assets related to the Jersey City
Property, including, without limitation, those contained in Section 9.1, shall
be applied to the purchase and sale of the Jersey City Property as if no such
election had been made.
2.3 Diligence Inspections. For the Review Period and, thereafter, until
Closing, the Candlewood Parties shall permit the Purchaser and its
representatives to inspect the Properties and the Improvements (including,
without limitation, all roofs, electric, mechanical and structural elements, and
HVAC systems therein), to perform due diligence, soil analysis and environmental
investigations, to examine the books of account
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and records of the Candlewood Parties with respect to the Properties, including,
without limitation, all leases and agreements affecting the Properties, and make
copies thereof, at such reasonable times as the Purchaser or its representatives
may request by notice to the Candlewood Parties (which notice may be oral). Such
inspections, diligence, analyses, and investigations are being permitted for
information purposes only and shall not entitle the Purchaser to refuse to close
the transactions contemplated in this Agreement, except as expressly set forth
herein. To the extent that, in connection with such investigations, the
Purchaser, its agents, representatives or contractors, damages or disturbs any
of the Real Property, the Improvements, the FAS, the FF&E or the Inventories
located thereon, the Purchaser shall, at its expense, return the same to
substantially the same condition which existed immediately prior to such damage
or disturbance. Neither the Purchaser nor any of its agents, representatives or
contractors shall have any right whatsoever to alter the condition of any
Property, or portion thereof, without the prior written consent of the
Candlewood Parties, which consent may be withheld in the Candlewood Parties'
sole discretion. The Purchaser shall indemnify, defend and hold harmless the
Candlewood Parties from and against any and all expense, loss or damage which
the Candlewood Parties may incur as a result of any act or omission of the
Purchaser or its representatives, agents or contractors in connection with such
examinations and inspections, other than to the extent that any expense, loss or
damage arises from any negligence or misconduct of the Candlewood Parties. The
provisions of this Section 2.3 shall survive the termination of this Agreement
and the Closing.
SECTION 3. PURCHASE AND SALE
3.1 Closing. The purchase and sale of the Properties shall be consummated
at a closing (the "Closing") to be held at the offices of Xxxxxxxx & Worcester
LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, or at such other location as
the Candlewood Parties and the Purchaser may agree as soon as practicable after
the satisfaction or, if permissible, the waiver of, the conditions set forth in
Sections 4 and 5 hereof (the "Closing Date").
3.2 Purchase Price. The Purchase Price shall be payable at the Closing by
wire transfer of immediately available funds on the Closing Date to an account
or accounts to be designated by the Candlewood Parties prior to the Closing.
Notwithstanding anything contained herein to the contrary, the Purchaser shall
receive a credit against the Purchase Price for the amount of the Assumed Debt.
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SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE
The obligation of the Purchaser to acquire each of the Properties on the
Closing Date shall be subject to the satisfaction of the following conditions
precedent on and as of such Closing Date:
4.1 Accuracy of Representations. The representations and warranties of the
Candlewood Parties contained in this Agreement shall be true in all material
respects on and as of the Closing Date with the same effect as if made on and as
of such date, except for any representations and warranties that speak as of a
specific date (which shall be true in all material respects as of such date),
unless the failure of any such representation or warranty to be true in all
material respects on and as of the Closing Date or such specific date could not
be reasonably expected to have a Material Adverse Effect; provided, however, if
the Purchaser does not elect to acquire all of the membership interests of the
Jersey City Owner pursuant to Section 2.2, then it shall not be a condition
precedent that the representations and warranties set forth in Section 6.17 be
true in all material respects on the Closing Date.
4.2 Performance of Obligations. The Candlewood Parties shall have
performed, complied with and satisfied all material agreements, covenants and
conditions required by this Agreement to be performed, complied with and
satisfied by it prior to the Closing Date, in all material respects and
otherwise in accordance with the terms of this Agreement, unless the failure to
perform, comply with or satisfy any such agreement, covenant or condition could
not be reasonably expected to have a Material Adverse Effect.
4.3 Closing Documents. The Candlewood Parties shall have delivered to the
Purchaser the following documents:
(a) A good and sufficient warranty deed with covenants against grantor's
acts, or its local equivalent, in proper statutory form for recording, duly
executed and acknowledged by the applicable Seller(s), conveying good and
marketable title to each of the Properties (including, without limitation, those
Assets, if any, related to the Jersey City Property that are not owned by the
Jersey City Owner) and using the legal descriptions attached to the applicable
Seller's vesting deed for such property, free from all liens and encumbrances
other than the Permitted Encumbrances; provided, however, any Seller shall also
deliver a quitclaim deed without warranties of any kind with
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respect to any Property and using such legal descriptions as the Purchaser may
reasonably request;
(b) One or more xxxx(s) of sale and assignment agreement(s), substantially
in the form attached hereto as Schedule F, duly executed and acknowledged by the
applicable Seller(s), with respect to all of the Sellers' right, title and
interest in, to and under the FAS, the FF&E, the Contracts, the Documents, the
Intangible Property, the Inventories and the Tenant Leases with respect to each
of the Properties, the Sellers' rights under all builder's warranties with
respect to each of the Properties (including, without limitation, those Assets,
if any, related to the Jersey City Property that are not owned by the Jersey
City Owner) and, if the Purchaser elects to purchase the membership interests of
the Jersey City Owner in accordance with the provisions of Section 2.2, such
membership interests;
(c) A Sellers' closing certificate in the form attached hereto as Schedule
G;
(d) Certified copies of all charter documents, applicable corporate
resolutions and certificates of incumbency with respect to the applicable
Candlewood Parties;
(e) If the Purchaser elects to acquire the membership interests of the
Jersey City Owner in accordance with Section 2.2, the books and records of the
Jersey City Owner;
(f) If the Purchaser elects to acquire the membership interests of the
Jersey City Owner in accordance with Section 2.2, evidence of the resignation of
the existing managers, officers and directors of the Jersey City Owner (if any)
effective as of the Closing Date;
(g) A non-foreign affidavit from each Seller (and also from Candlewood and
JPD if the Purchaser elects to acquire the membership interests of the Jersey
City Owner in accordance with Section 2.2) dated as of the Closing Date and in
form and substance required under the Treasury Regulations issued pursuant to
Section 1445 of the Code so that the Purchaser is exempt from withholding any
portion of the Purchase Price; and
(h) Such other conveyance documents, certificates, deeds, affidavits and
other instruments as the Purchaser or the Title Company may reasonably require
to effectuate the transactions contemplated by this Agreement.
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4.4 Condition of Properties.
(a) No material default or event which with the giving of notice and/or
lapse of time could constitute a material default shall have occurred and be
continuing under any material agreement benefiting or affecting any of the
Properties in any respect, which default could reasonably be expected to have a
Material Adverse Effect ; and
(b) All licenses, permits and other authorizations necessary for the
current use, occupancy and operation of each of the Properties shall be in full
force and effect unless the failure of any such license, permit or other
authorization to be in full force and effect could not reasonably be expected to
have a Material Adverse Effect.
4.5 Title and Survey. The Candlewood Parties shall have satisfied each of
the title conditions set forth on Schedule C, and the Title Company shall be
prepared, subject only to payment of the applicable premium and endorsement fees
and delivery of all conveyance documents in recordable form, to issue title
insurance policies to the Purchaser with respect to each of the Properties,
having an effective date as of the Closing Date and otherwise in the form
attached hereto as Schedules D-1 through D-12, in each case revised to
incorporate the changes handmarked thereon.
4.6 Lease. No Default (as such term is defined in the Lease) shall have
occurred and be continuing under the Lease (which in the case of any
non-monetary Default only, could reasonably be expected to have a Material
Adverse Effect), and the tenant under the Lease shall have paid or caused to be
paid all Rent and other monetary charges under the Lease in a timely fashion in
accordance with the terms thereof as the same may be affected by Section 7 of
the Termination Agreement. Notwithstanding the foregoing, nothing contained in
this Section 4.6 shall be deemed a waiver by the Purchaser or any of its
affiliates of any of their rights and remedies hereunder or under the Lease with
respect to any such Default.
4.7 Termination Agreement. The Termination Agreement shall be in full
force and effect, and the transactions contemplated by the Termination Agreement
shall have been consummated or shall be consummated simultaneously with the
Closing.
4.8 Termination of Lease for Jersey City Property. The Jersey City Owner
shall have (without cost or penalty to itself)
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terminated the lease agreement between the Jersey City Owner and Candlewood
Jersey City, NJ, LLC with respect to the Jersey City Property, and the Jersey
City Owner shall deliver proof of such termination to the Purchaser.
4.9 SCH Transactions. The SCH Agreements shall be in full force and effect
and shall not have been amended or modified in any material respect without the
prior written consent of the Purchaser, which consent may be given or withheld
in the Purchaser's reasonable discretion, and the transactions contemplated by
the SCH Agreements shall have been consummated or shall be consummated
simultaneously with the Closing.
4.10 Stockholder Approval. The stockholders of Candlewood shall have
approved at a special meeting of the stockholders duly convened (the
"Stockholder Approval") the execution and delivery of this Agreement and the
Other Transaction Agreements and the consummation of the transactions
contemplated hereby and thereby (the "Transactions").
4.11 Assumed Debt. The Overland Park Lender shall have agreed to the
assumption of all of the indebtedness and obligations of the Candlewood Parties
relating to the Assumed Debt arising from and after the Closing Date (including,
without limitation, all of the payment obligations of the Candlewood Parties
with respect to the Assumed Debt on and as of the Closing Date provided that the
Purchaser has received a credit against the Purchase Price for such amount) by
the Purchaser or its assignee upon such terms and conditions as the Purchaser
and the Overland Park Lender deem acceptable in their sole discretion and the
Overland Park Lender shall have provided the Purchaser with evidence regarding
the outstanding principal balance of the Assumed Debt as of the Closing Date.
Notwithstanding anything contained in this Section 4.11 to the contrary, (a) in
no event shall the Purchaser have the right to condition its assumption of the
Assumed Debt upon the Purchaser's receipt of terms and conditions with respect
to the Assumed Debt which are more favorable than those that are currently in
place and (b) if, prior to the Closing Date or simultaneously with the Closing,
the Candlewood Parties cause the Assumed Debt to be satisfied in full and all
the documents securing the Assumed Debt to be discharged and otherwise
terminated to the Purchaser's reasonable satisfaction, then this condition
precedent shall be null and void.
If any of the foregoing conditions precedent have not been satisfied on
the Outside Closing Date, then the Purchaser shall have the right, in its sole
discretion, to terminate this
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Agreement by notice given to the Candlewood Parties on or after the Outside
Closing Date, and Section 11.2(a) below shall be applicable to any such
termination, it being expressly understood and agreed that to the extent that
any of the above-referenced conditions precedent are not qualified as to a
Material Adverse Effect (including, without limitation, the condition precedent
set forth in Section 4.5 hereof), then the aforementioned termination right may
be exercised by the Purchaser regardless of whether the failure to satisfy such
condition precedent could reasonably be expected to have a Material Adverse
Effect.
SECTION 5. CONDITIONS TO CANDLEWOOD PARTIES' OBLIGATION TO CLOSE
The obligation of the Candlewood Parties to convey the Properties on the
Closing Date to the Purchaser is subject to the satisfaction of the following
conditions precedent on and as of the Closing Date:
5.1 Purchase Price. The Purchaser shall have delivered to the Candlewood
Parties the Purchase Price as provided in Section 3.2.
5.2 Accuracy of Representations. The representations and warranties of the
Purchaser contained in this Agreement shall be true in all material respects on
and as of the Closing Date with the same effect as if made on and as of such
date, except for any representations and warranties that speak as of a specific
date (which shall be true in all material respects as of such date), unless the
failure of any such representation or warranty to be true in all material
respects on and as of the Closing Date or such specific date could not be
reasonably expected to have a Material Adverse Effect.
5.3 Performance of Obligations. The Purchaser shall have performed,
complied with and satisfied all material agreements, covenants and conditions
required by this Agreement to be performed, complied with and satisfied by it
prior to the Closing Date, in all material respects and otherwise in accordance
with the terms of this Agreement, unless the failure to perform, comply with or
satisfy any such agreement, covenant or condition could not be reasonably
expected to have a Material Adverse Effect.
5.4 Closing Documents. The Purchaser shall have delivered to the
Candlewood Parties the following documents:
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(a) Duly executed and acknowledged counterparts of the documents
described in Section 4.3, where applicable; and
(b) Certified copies of all charter documents, applicable resolutions
and certificates of incumbency with respect to the Purchaser.
5.5 Assumed Debt. The Purchaser or its assignee shall have assumed and
agreed to pay and perform all of the indebtedness and obligations of the
Candlewood Parties relating to the Assumed Debt arising from and after the
Closing Date (including, without limitation, all of the payment obligations of
the Candlewood Parties with respect to the Assumed Debt on and as of the Closing
Date provided that the Purchaser has received a credit against the Purchase
Price for such amount) upon such terms and conditions as the Purchaser and the
Overland Park Lender deem acceptable in their sole discretion. Notwithstanding
anything contained in this Section 5.5 to the contrary, (a) in no event shall
the Purchaser have the right to condition its assumption of the Assumed Debt
upon the Purchaser's receipt of terms and conditions with respect to the Assumed
Debt which are more favorable than those that are currently in place and (b) if,
prior to the Closing Date or simultaneously with the Closing, the Candlewood
Parties cause the Assumed Debt to be satisfied in full and all the documents
securing the Assumed Debt to be discharged and otherwise terminated to the
Purchaser's reasonable satisfaction, then this condition precedent shall be null
and void.
5.6 Termination Agreement. The transactions contemplated by the
Termination Agreement shall have been consummated or shall be consummated
simultaneously with the Closing.
5.7 SCH Transactions. The transactions contemplated by the SCH
Agreements shall have been consummated or shall be consummated simultaneously
with the Closing.
5.8 Stockholder Approval. The Stockholder Approval shall have been
obtained.
If any of the foregoing conditions precedent have not been satisfied on
and as of the Outside Closing Date, then the Candlewood Parties shall have the
right, in their sole discretion, to terminate this Agreement by notice given to
the Purchaser on or after the Outside Closing Date, and Section 11.2(a) below
shall be applicable to any such termination, it being expressly understood and
agreed that to the extent that any of the above-referenced conditions precedent
are not
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qualified as to a Material Adverse Effect, then the aforementioned termination
right may be exercised by the Candlewood Parties regardless of whether the
failure to satisfy such condition precedent could reasonably be expected to have
a Material Adverse Effect.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF CANDLEWOOD PARTIES
To induce the Purchaser to enter into this Agreement, each of Candlewood,
with respect to all Properties, each Seller, with respect to its Property, and
JPD, except as set forth in the Disclosure Schedule attached hereto as Schedule
I (but, in the case of JPD, not in respect of the representations and warranties
contained in Sections 6.6, 6.8, 6.9, 6.10, 6.12, 6.13, 6.15 or 6.16), represents
and warrants to the Purchaser as follows:
6.1 Status and Authority of the Candlewood Parties. It is a corporation
or limited liability company duly organized, validly existing and in good
standing under the laws of its state of incorporation or formation, and has all
requisite power and authority under the laws of such state and its respective
charter documents to enter into and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. It has duly qualified to
transact business in each jurisdiction in which the nature of the business
conducted by it requires such qualification, except where failure to do so could
not reasonably be expected to have a Material Adverse Effect.
6.2 Action of the Candlewood Parties. It has taken all necessary action
to authorize the execution, delivery and performance of this Agreement, and upon
the execution and delivery of any document to be delivered by it on or prior to
the Closing Date, such document shall constitute its valid and binding
obligation and agreement, enforceable against such Candlewood Party in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors.
6.3 No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement, nor compliance with the terms and provisions
hereof, will result in any breach of the terms, conditions or provisions of, or
conflict with or constitute a default under, or result in the creation of any
lien, charge or encumbrance upon any of the Properties pursuant
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to the terms of any indenture, mortgage, deed of trust, note, evidence of
indebtedness or any other agreement or instrument by which it is bound.
6.4 Litigation. To its Knowledge, it has received no written notice of
and, to its Knowledge, no action or proceeding is pending or threatened and no
investigation looking toward such an action or proceeding has begun, which (a)
questions the validity of this Agreement or any action taken or to be taken
pursuant hereto, (b) could reasonably be expected to result in any material
adverse change in the business, operation, affairs or condition of any of the
Properties or the Jersey City Owner, (c) could reasonably be expected to result
in or subject any of the Properties or the Jersey City Owner to a material
liability, or (d) involves condemnation or eminent domain proceedings against
any material part of any of the Properties (other than condemnation or eminent
domain proceedings for which the Purchaser will receive the applicable award in
accordance with Section 10.2).
6.5 Existing Leases, Agreements, Etc. Other than any agreements provided
to the Purchaser prior to the expiration of the Review Period, there are no
other material agreements affecting any of the Properties or the Jersey City
Owner which will be binding on the Purchaser or the Jersey City Owner subsequent
to the Closing Date which the Purchaser or the Jersey City Owner cannot
terminate on thirty (30) days notice without payment of premium or penalty.
6.6 Assumed Debt. It has provided the Purchaser with true, correct and
complete copies of all documents evidencing or securing the Assumed Debt and
there is no default or event which, with the giving of notice or the passage of
time or both, could constitute a default under any such documents. The
outstanding principal amount of the Assumed Debt as of the date hereof is
$3,893,604.
6.7 Disclosure. No representation or warranty made by the Candlewood
Parties in this Section 6 contains any untrue statement of material fact or
omits to state a material fact necessary to make it not misleading.
6.8 Utilities, Etc. To its Knowledge, all utilities and services
necessary for the use and operation of each of the Properties (including,
without limitation, road access, gas, water, electricity and telephone) are
available thereto and are of sufficient capacity to meet adequately all needs
and requirements necessary for the current use and operation of each
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of the Properties. To its Knowledge, no fact, condition or proceeding exists
which would result in the termination or material impairment of the furnishing
of such utilities to any of the Properties.
6.9 Compliance With Law. To its Knowledge, except as disclosed to the
Purchaser in writing prior to the expiration of the Review Period, including in
any engineering report or environmental study: (a) each of the Properties and
the current use and operation thereof do not violate any material federal,
state, municipal and other governmental statutes, ordinances, by-laws, rules,
regulations or any other legal requirements, including, without limitation,
those relating to construction, occupancy, zoning, adequacy of parking,
environmental protection, occupational health and safety and fire safety
applicable thereto in any manner which could reasonably be expected to have a
Material Adverse Effect; and (b) at the time of the Closing there will be in
effect all material licenses, permits and other authorizations necessary to use,
occupy and operate each Property in accordance with the current use, occupancy
and operation of the same by the Candlewood Parties as of the date hereof.
Except as disclosed to the Purchaser in writing prior to the expiration of the
Review Period, none of the Candlewood Parties has received written notice of any
threatened request, application, proceeding, plan, study or effort which would
materially adversely affect the present use or zoning of any of the Properties
or which would modify or realign any adjacent street or highway in a material
and adverse way.
6.10 Taxes. To its Knowledge, other than the amounts disclosed by Tax
bills or the title commitments and pro formas attached hereto as Schedules D-1
through D-12, no Taxes or special assessments of any kind (special, bond or
otherwise) are or have been levied with respect to any of the Properties, or any
portion thereof, or the Jersey City Owner, which are outstanding or unpaid,
other than amounts not yet due and payable or, if due and payable, not yet
delinquent.
6.11 Not A Foreign Person. It is not a "foreign person" within the
meaning of Section 1445 of the Code and the Treasury Regulations promulgated
thereunder.
6.12 Hazardous Substances. Except as disclosed to the Purchaser or as
described in any engineering report or environmental report delivered to the
Purchaser prior to the expiration of the Review Period, to its Knowledge,
neither it nor any tenant or other occupant or user of any of the
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Properties, or any portion thereof, has stored or disposed of (or engaged in the
business of storing or disposing of) or has released or caused the release of
any hazardous waste, contaminants, oil, radioactive or other material on any of
the Properties, or any portion thereof, the removal of which is required or the
maintenance of which is prohibited or penalized by any applicable Federal, state
or local statutes, laws, ordinances, rules or regulations, and, to each
Candlewood Party's Knowledge, except as disclosed to the Purchaser or as
described in any engineering report or environmental report delivered to the
Purchaser prior to the expiration of the Review Period, each of the Properties
is free from any such hazardous waste, contaminants, oil, radioactive and other
materials, except any such materials maintained in accordance with applicable
law and except where such non-compliance could not reasonably be expected to
have a Material Adverse Effect.
6.13 Insurance. It has not received written notice from any insurance
carrier of defects or inadequacies in any of the Properties which, if
uncorrected, would result in a termination of insurance coverage or a material
increase in the premiums charged therefor.
6.14 Ownership of Sellers. Candlewood is the sole owner, directly or
indirectly, of all of the issued and outstanding beneficial interests in the
Sellers (except that JPD owns one percent (1%) of the membership interests in
the Jersey City Owner), and the transactions contemplated by this Agreement are
of direct material benefit to Candlewood.
6.15 Substantial Completion. Physical completion of the Improvements on
each of the Properties has occurred, including, without limitation, physical
completion of a hotel of the brand and consisting of the number of rooms set
forth on Schedule A, consistent with the Plans and Specifications (if
applicable) therefor, free of all liens and encumbrances (other than Permitted
Encumbrances) such that the Opening Date of each of the Properties shall have
occurred and the Improvements may be used for their intended use.
6.16 Condition of Properties. To its Knowledge, each of the Properties is
in good working order and repair, mechanically and structurally sound, free from
material defects in materials and workmanship.
6.17 Jersey City Owner.
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(a) All of the membership and other equity interests of the Jersey City
Owner are owned, of record and beneficially, by Candlewood and JPD, free and
clear of all liens, mortgages, pledges, security interests, encumbrances,
purchase options, calls or rights or charges of any kind, and are validly
issued, fully paid and nonassessable.
(b) The Jersey City Owner does not have any subsidiaries.
(c) The Jersey City Owner has kept such books, records and accounts as
it is required to keep by law or pursuant to the terms and conditions of the
Financial Agreement; the minute books of the Jersey City Owner contain, or will
contain prior to the Closing Date, accurate and complete records in all material
respects of all meetings held of, and limited liability company action taken by,
the members and the managers thereof; and no meeting of any such members or
managers has been held for which minutes have not been prepared and are not
contained, or will be contained prior to the Closing Date, in such minute books.
(d) The Jersey City Owner does not have any employees.
(e) The Jersey City Owner has filed for or, prior to the Closing Date,
will cause to be filed with the appropriate Tax authorities, all Tax Returns (or
any similar documents required under the Financial Agreement) that are required
by law (or the Financial Agreement) to be filed by, or with respect to, the
Jersey City Owner on or prior to the Closing Date (taking into account any
extension of time to file granted to or on behalf of the Jersey City Owner), it
being understood that Candlewood and the Jersey City Owner have taken the
position for federal income tax purposes that the Jersey City Owner was a mere
title holding entity and therefore no federal income Tax Returns were required
to be filed, and none have been filed. All such Tax Returns were (or will be)
true, correct and complete, and correctly reflected (or will correctly reflect)
in all material respects the facts regarding the income, business, assets,
operations, activities and status of the Jersey City Owner and any other
information required to be shown thereon.
(f) No federal, state or local audits, examinations, investigations or
other administrative proceedings or court proceedings have been commenced or are
presently pending or threatened with regard to any Taxes or Tax Returns with
respect to the Jersey City Owner. There is no unresolved dispute or claim
concerning a Tax liability of the Jersey City Owner either claimed or raised by
any Tax authority. No claim has been made by a governmental authority in a
jurisdiction where the Jersey
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City Owner does not file Tax Returns that it is or may be subject to taxation by
such jurisdiction.
(g) Prior to and since the Jersey City Owner's formation (and through
the Closing Date) no election under Treasury Regulation Sections 301.7701-2 or
-3 has been (or will be) made on IRS Form 8832 (or similar form) to treat the
Jersey City Owner as an "association" for federal, state or local Tax purposes.
6.18 Tax Abatement for Jersey City Property. It has provided the
Purchaser with true, correct and complete copies of the Financial Agreement and
all other documents evidencing the property tax abatement applicable to the
Jersey City Property. To its Knowledge, there is no default or event which, with
the giving of notice or the passage of time or both, could constitute a default
under the Financial Agreement or any such other documents, and all reports and
other documents required to be filed pursuant to the Financial Agreement have
been filed in a timely fashion. To its Knowledge, the tax abatement applicable
to the Jersey City Property is in full force and effect.
6.19 Fort Worth Property. With respect to the Fort Worth Property, it has
never received any notice from Northern Crossing Partners, Ltd. or any other
development advisory board, committee or similar association with respect to any
fees, maintenance charges or violations of the conditions, covenants and
restrictions set forth in that certain Development Standards Agreement, dated as
of November 9, 1988, and recorded in Volume 9434, Page 808 of the real property
records of Tarrant County, Texas. To its Knowledge, Northern Crossing Partners,
Ltd. no longer exists nor has any other development advisory board, committee or
similar association succeeded to its rights under such agreement.
6.20 Plano Property. With respect to the Plano Property, it has never
received any notice from Preston/Legacy Corporate Centre Association, or any
other board of directors, architectural control committee or similar association
with respect to any fees, maintenance charges or violations of the conditions,
covenants and restrictions set forth in that certain Declaration of
Restrictions, Covenants and Easements, dated as of April 15, 1998, between
Breeze Texas Corporation and Candlewood Dallas TX-Plano, LLC and recorded in
Volume 4152, Page 1358 of the real property records of Collin County, Texas.
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6.21 San Antonio Property. With respect to the San Antonio Property, (a)
when it purchased the San Antonio Property in March, 2002 the construction of
the improvements referred to in the Easement and Other Agreements
(Ingress/Egress),dated February 26, 1996, between itamic, inc. and Innhome
America, Inc. and recorded in Volume 6675, Page 0356 of the real property
records of Bexar County Texas had been completed and (b) it has neither sent nor
received a notice of default under that certain Reciprocal Access Agreement,
dated as of August 15, 2000, between IH San Antonio Limited Partnership and
Xxxxxx X. Xxxxxx, and recorded in Volume 8569, Page 1475 of the real property
records of Bexar County, Texas.
The representations and warranties made in this Agreement by the
Candlewood Parties are made as of the date hereof and shall be deemed remade by
the Candlewood Parties as of the Closing Date with the same force and effect as
if made on, and as of, such date. The representations and warranties made in
this Agreement with respect to the Jersey City Property shall not be affected,
limited or impaired by the Purchaser's election to acquire the membership
interests of the Jersey City Owner pursuant to Section 2.2. All representations
and warranties made in this Agreement or in any other document delivered
pursuant to this Agreement shall expire as of, and be of no further force and
effect after, the Closing. Notwithstanding anything to the contrary (express or
implied) set forth herein, in the case of any breach by any Candlewood Party of
any of such Candlewood Party's representations and warranties, the Purchaser's
sole right shall be the exercise of its right of termination as provided in
Section 4 (and the Purchaser's sole remedies in connection therewith shall be
those expressly set forth in Section 11.2(a)) and none of the Candlewood Parties
shall at any time (whether before, on or after the Closing Date) have any
further liability whatsoever for any such breach.
Except as otherwise expressly provided in this Agreement or any documents
to be delivered to the Purchaser at the Closing, the Candlewood Parties disclaim
the making of any representations or warranties, express or implied, regarding
the Properties or matters affecting the Properties, whether made by the
Candlewood Parties, on the Candlewood Parties' behalf or otherwise, including,
without limitation, the physical condition of the Properties, title to or the
boundaries of the Real Property, pest control matters, soil conditions, the
presence, existence or absence of hazardous wastes, toxic substances or other
environmental matters, compliance with building, health, safety, land use and
zoning laws, regulations and orders,
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structural and other engineering characteristics, traffic patterns, market data,
economic conditions or projections, and any other information pertaining to the
Properties or the market and physical environments in which they are located.
The Purchaser acknowledges (a) that the Purchaser has entered into this
Agreement with the intention of making and relying upon its own investigation or
that of third parties with respect to the physical, environmental, economic and
legal condition of each Property and (b) that the Purchaser is not relying upon
any statements, representations or warranties of any kind, other than those
specifically set forth in this Agreement or in any document to be delivered to
the Purchaser at any Closing, made by the Candlewood Parties or anyone acting on
the Candlewood Parties' behalf. The Purchaser further acknowledges that it has
not received from or on behalf of the Candlewood Parties any accounting, Tax,
legal, architectural, engineering, property management or other advice with
respect to this transaction and is relying solely upon the advice of third party
accounting, Tax, legal, architectural, engineering, property management and
other advisors. Subject to the provisions of this Agreement, the Purchaser shall
purchase the Properties in their "as is" condition on the Closing Date.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER
To induce the Candlewood Parties to enter in this Agreement, the Purchaser
represents and warrants to the Candlewood Parties as follows:
7.1 Status and Authority of the Purchaser. The Purchaser is a Maryland
real estate investment trust duly organized, validly existing and in trust good
standing under the laws of the State of Maryland, and has all requisite power
and authority under the laws of such state and under its charter documents to
enter into and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby. The Purchaser has duly qualified and is in
good standing as a trust or unincorporated business association in each
jurisdiction in which the nature of the business conducted by it requires such
qualification, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
7.2 Action of the Purchaser. The Purchaser has taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
and upon the execution and delivery of any document to be delivered by the
Purchaser on or prior to the Closing Date such document shall constitute the
valid and binding obligation and agreement of the Purchaser,
- 25 -
enforceable against the Purchaser in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application affecting the rights and
remedies of creditors.
7.3 No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by the Purchaser, nor compliance with the terms
and provisions hereof, will result in any breach of the terms, conditions or
provisions of, or conflict with or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any property or assets of the
Purchaser pursuant to the terms of any indenture, mortgage, deed of trust, note,
evidence of indebtedness or any other agreement or instrument by which the
Purchaser is bound.
7.4 Litigation. No investigation, action or proceeding is pending and,
to the Purchaser's Knowledge, no action or proceeding is threatened and no
investigation looking toward such an action or proceeding has begun, which
questions the validity of this Agreement or any action taken or to be taken
pursuant hereto.
7.5 Financing. The Purchaser has possession of, or has available to it
under existing lines of credit, sufficient funds to consummate the transactions
contemplated by this Agreement, and will have sufficient funds available to
consummate such transactions on the Closing Date.
The representations and warranties made in this Agreement by the Purchaser
shall be continuing and shall be deemed remade by the Purchaser as of the
Closing Date with the same force and effect as if made on, and as of, such date.
All representations and warranties made in this Agreement or in any other
document delivered pursuant to this Agreement shall expire as of, and be of no
further force and effect after, the Closing. Notwithstanding anything to the
contrary (express or implied) set forth herein, in the case of any breach by the
Purchaser of any of its representations or warranties, the Candlewood Parties'
sole right shall be the exercise of its right of termination as provided in
Section 5 (and the Candlewood Parties' sole remedies in connection therewith
shall be those expressly set forth in Section 11.2(a)) and the Purchaser shall
not at any time (whether before, on or after the Closing Date) have any further
liability whatsoever for any such breach.
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SECTION 8. COVENANTS OF THE CANDLEWOOD PARTIES
Candlewood, with respect to all Properties, and each other Candlewood
Party, with respect to each of its Properties, hereby covenant with the
Purchaser between the date of this Agreement and the Closing Date as follows:
8.1 Compliance with Laws, Etc. To comply or to cause compliance in all
material respects with (a) all applicable laws, regulations and other
requirements from time to time of every governmental body having jurisdiction
over the Properties, the Jersey City Owner or the use or occupancy of the
Improvements located on the Real Property and (b) all terms, covenants and
conditions of all instruments of record and other agreements affecting the
Properties, in each case where non-compliance could reasonably be expected to
have a Material Adverse Effect.
8.2 Approval of Agreements. Except as otherwise authorized by this
Agreement or in the ordinary course of business, not to enter into, modify or
amend any other agreement with respect to any Property or the Jersey City Owner
which would encumber or be binding upon such Property or the Jersey City Owner
from and after the Closing Date (other than the SCH Agreements, which shall be
governed by Section 8.3) without in each instance obtaining the prior written
consent of the Purchaser, which consent shall not be unreasonably withheld,
delayed or conditioned.
8.3 Approval of SCH Agreements. To not modify or amend any of the SCH
Agreements in any material respect without the prior written consent of the
Purchaser, which consent shall not be unreasonably withheld, delayed or
conditioned.
8.4 Notice of Material Changes or Untrue Representations. Upon learning
of any material change in any condition with respect to any of the Properties or
the Jersey City Owner or of any event or circumstance which makes any
representation or warranty of the Candlewood Parties to the Purchaser under this
Agreement untrue or misleading in any material respect, promptly to notify the
Purchaser thereof (the Purchaser agreeing, on learning of any such fact or
condition, promptly to notify the Candlewood Parties thereof).
8.5 Financial Information. To provide to the Purchaser, promptly upon
request at the Purchaser's sole cost and expense, such audited and unaudited
financial and other information and certifications of the Candlewood Parties
with respect to the
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Candlewood Parties and the Properties as the Purchaser may from time to time
reasonably request in order to comply with any applicable securities laws and/or
any rules, regulations or requirements of the SEC and, if required or requested,
to permit the Purchaser to incorporate by reference any information included in
filings made by Candlewood with the SEC. Notwithstanding the foregoing, the
Candlewood Parties shall be required to provide, pursuant to this Agreement,
unaudited financial information with respect to each individual Property through
the Closing Date at the Candlewood Parties' sole cost and expense.
8.6 Jersey City Owner. To not, with respect to the Jersey City Owner,
(a) make any change in its accounting methods or practices for Tax purposes, (b)
make any Tax election (including for avoidance of doubt any election under
Treasury Regulation Section 301.7701-3 to be treated as an association for
purposes of the Code), (c) amend any Tax Return, or (d) settle or compromise any
Tax liability, except in the ordinary course of business consistent with past
practice.
8.7 Proxy Statement. As promptly as practicable after the execution of
this Agreement, Candlewood will prepare and file with the SEC a proxy statement
("Proxy Statement") and any other filings required to be made by Candlewood with
the SEC which shall comply in all material respects with the provisions of the
1934 Act. The Purchaser will provide Candlewood with any information which may
be required in order to effectuate the preparation and filing of the Proxy
Statement. Candlewood will use its commercially reasonable efforts to respond to
any comments from the SEC. Candlewood will notify the Purchaser promptly upon
the receipt of any comments from the SEC or its staff in connection with the
filing of, or amendments or supplements to, the Proxy Statement. Whenever any
event occurs which is required to be set forth in an amendment or supplement to
the Proxy Statement, Candlewood will promptly inform the Purchaser of such
occurrence and file with the SEC or its staff, and/or mail to stockholders of
Candlewood, such amendment or supplement. Candlewood shall provide the Purchaser
(and its counsel) with a reasonable opportunity to review and comment on the
Proxy Statement and any amendment or supplement to the Proxy Statement prior to
filing such with the SEC.
8.8 Special Meeting. Candlewood (a) shall call a special meeting of its
stockholders ("Special Meeting") to be held as promptly as practicable after the
filing of the Proxy Statement with the SEC for the purpose of voting upon the
execution and delivery of this Agreement, the Other Transaction Agreements and
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the Transactions, (b) will cause the Proxy Statement to be mailed to its
stockholders and (c) subject to the fiduciary duties of the board of directors
of Candlewood under Delaware law, shall use all efforts to obtain the
Stockholder Approval.
8.9 No Solicitation.
(a) If, prior to receipt of the Stockholder Approval, Candlewood shall
receive a Purchase Proposal from any person, and Candlewood's board of directors
shall determine in good faith, after consultation with independent counsel and
Candlewood's financial advisor, that failing to take such action would be
inconsistent with its fiduciary obligations under Delaware law, Candlewood's
board of directors may, in response to a Purchase Proposal, terminate this
Agreement and accept such Purchase Proposal, and then Candlewood shall give the
Purchaser notice thereof and, subject to the continuing obligation of the
Candlewood Parties hereunder, including under Section 8.10 and Section 11.2,
this Agreement shall terminate without recourse. For purposes of this Agreement,
a "Purchase Proposal" shall mean any offer or proposal concerning any (i)
merger, consolidation, business combination, or similar transaction involving
Candlewood or any of its subsidiaries, (ii) sale, lease or other disposition
directly or indirectly by merger, consolidation, business combination, share
exchange, joint venture, or otherwise of assets representing 25% or more of the
consolidated assets of Candlewood and its subsidiaries or any of (X) the
Properties or (Y) the Excluded Assets, (iii) issuance, sale, or other
disposition of (including by way of merger, consolidation, business combination,
share exchange, joint venture, or any similar transaction) securities (or
options, rights or warrants to purchase, or securities convertible into or
exchangeable for such securities) representing 25% or more of the voting power
of Candlewood or (iv) transaction in which any person shall acquire beneficial
ownership, or the right to acquire beneficial ownership or any group shall have
been formed which beneficially owns or has the right to acquire beneficial
ownership of 25% or more of the outstanding voting capital stock of Candlewood
or (v) any combination of the foregoing.
(b) Candlewood shall not, and shall not permit any of its subsidiaries,
officers or directors, or any of its representatives, directly or indirectly, to
knowingly solicit or initiate (including by way of furnishing any non-public
information concerning Candlewood's business, properties, assets or prospects)
discussions, inquiries or proposals or participate in any negotiation leading to
any proposal concerning any Purchase Proposal, or the sale of all or
substantially all of Candlewood's assets or for the purchase of all or
substantially all of
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Candlewood's equity securities, except for the transactions contemplated by this
Agreement and the Other Transaction Agreements; provided, however, that if, at
any time prior to the obtaining of the Stockholder Approval, Candlewood's board
of directors determines in good faith, after consultation with independent
counsel, that failing to take such action would be inconsistent with its
fiduciary duties to Candlewood's stockholders, Candlewood may, in response to a
Purchase Proposal, (i) furnish information with respect to Candlewood and its
subsidiaries to the person making such Purchase Proposal pursuant to a customary
confidentiality agreement and (ii) participate in discussions and negotiations
with respect to such Purchase Proposal. If Candlewood shall receive any offer or
request for non-public information, it shall (X) inform the Purchaser that an
offer or request has been received and (Y) furnish the Purchaser with the
identity of the offeror or person making the request and, in the case of an
offer, a copy of such offer, or, if oral, a description of the material terms
thereof.
8.10 Termination Fee. If Candlewood accepts a Purchase Proposal and
terminates this Agreement pursuant to Section 8.9, Candlewood shall promptly,
but in no event later than two (2) Business Days after the consummation of the
transactions contemplated by such Purchase Proposal, pay the Purchaser an
aggregate termination fee of $2,571,428.
8.11 Conduct of the Business. Except as expressly contemplated in this
Agreement or as otherwise consented to in writing by the Purchaser, which
consent shall not be unreasonably withheld, delayed or conditioned:
(a) to carry on its business in the usual, regular and ordinary course
in substantially the same manner as previously conducted and, to the extent
consistent therewith, to use commercially reasonable efforts to preserve intact
its current organization, maintain the Properties in good condition in a manner
consistent with past practice, keep available the services of its current
officers and employees, and preserve its relationships with persons having
business dealings with it;
(b) to use its commercially reasonable efforts to maintain insurance
coverage of the types and in the amounts carried by it prior to the execution of
this Agreement and promptly report all known claims within the applicable claims
period;
(c) not to purchase, sell, lease or dispose of any of the Properties or
any membership interests in the Jersey City Owner
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and not incur any material liability or make any material commitment or enter
into any other material transaction related to the Properties or the Jersey City
Owner, except in the ordinary and usual course of business or pursuant to
contracts existing on the date hereof;
(d) except as contemplated by this Agreement, by those certain voting
agreements entered into between the Purchaser and certain of Candlewood's
stockholders in connection with the Transactions, by the Other Transaction
Agreements or by any plan of dissolution approved by Candlewood's stockholders,
not to amend the articles of incorporation or organization, bylaws, operating
agreement, partnership agreement or other comparable charter or organizational
documents of any Candlewood Party;
(e) not to acquire (1) by merging or consolidating with, or by
purchasing all or a substantial portion of the assets or any stock of, or by any
other manner, any business or any corporation, partnership, joint venture,
limited liability company, association or other business organization or
division thereof or (2) any assets that are material, in the aggregate, to
Candlewood and its subsidiaries, taken as a whole, except purchases of assets in
the ordinary course of business;
(f) not to pledge or encumber, sell, lease, license, dispose of or
otherwise transfer any assets material to the Properties or the Jersey City
Owner, taken as a whole (including any accounts, leases, contracts or
intellectual property or any assets or the stock or other equity interests of
any of its subsidiaries) other than (i) in the case of pledges, encumbrances and
leases, in connection with the purchase of equipment subject to capital lease or
other similar financing arrangements in the ordinary course of business
consistent with Candlewood's past practice, and (ii) dispositions in the
ordinary course of business of equipment no longer used in the businesses of
Candlewood and its subsidiaries;
(g) except as contemplated by the Other Transaction Agreements, not to
enter into an agreement with respect to any merger, consolidation, liquidation
or business combination, or any acquisition or disposition of all or
substantially all of the assets or securities of Candlewood or any of its
subsidiaries;
(h) not to make any changes in accounting methods, principles or
practices or any assumption underlying, or method of calculating, any bad debt,
contingency or other reserve,
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except as may have been required by a change in GAAP or applicable law;
(i) not to (i) pay, discharge, settle or satisfy any material claims,
liabilities or obligations (whether absolute, accrued, asserted or unasserted,
contingent or otherwise), other than in the ordinary course of business or in
accordance with their terms as in effect on the date of this Agreement, unless
such payment, discharge, settlement or satisfaction would not reasonably be
expected to impose upon Candlewood or any of its subsidiaries any material
burden that would remain in effect and apply to the Properties or the Jersey
City Owner after the Closing, or (ii) waive any benefits of, modify in any
respect, or fail to enforce any confidentiality, standstill or similar
agreements to which Candlewood or any of its subsidiaries is a party which could
reasonably be expected to have a Material Adverse Effect;
(j) not to knowingly waive, release or assign any material rights or
claims in a manner adverse to the Properties or the Jersey City Owner;
(k) not to compromise or settle any material litigation or arbitration
proceeding related to the Properties or the Jersey City Owner; or
(l) not to authorize any of, or commit or agree, in writing or
otherwise, to take any of, the foregoing actions or any action which would
materially impair or prevent the satisfaction of any conditions in Section 4.
8.12 Cooperation. The Candlewood Parties shall reasonably cooperate with
the Purchaser in order to effectuate the assignment and assumption of the
Assumed Debt from the Overland Park Lender and the acquisition of the membership
interests of Jersey City Owner in accordance with the terms and conditions of
the Financial Agreement so as to preserve and protect the tax abatement
applicable to the Jersey City Property. In addition, the Candlewood Parties (a)
shall provide the Purchaser with all documents relating to the calculation of
"Total Project Costs" as defined in the Financial Agreement and (b) shall
reasonably cooperate with the Purchaser in order to resolve any issues raised by
the audit of the Jersey City Property pursuant to the Financial Agreement, as
further described on Schedule I attached hereto (which obligation shall survive
the Closing hereunder).
8.13 Lender Estoppel Certificate. The Candlewood Parties shall use
reasonable commercially efforts to obtain a Lender's
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Estoppel Certificate, substantially in the form and substance attached hereto as
Schedule H, together with such changes as the Overland Park Lender may
reasonably request and which are reasonably satisfactory to the Purchaser, duly
executed and acknowledged by the Overland Park Lender.
SECTION 9. PRORATIONS AND OTHER ADJUSTMENTS
9.1 Prorations.
(a) At the Closing, the following adjustments and prorations shall be
computed as of 11:59 p.m. (local time at each Property) on the Closing Date (the
"Apportionment Time"). All items of revenue, cost and expense (including for
avoidance of doubt real estate and personal property Taxes and assessments) with
respect to the period prior to the Apportionment Time shall be for the account
of the Sellers. All revenues attributable to guests of the Hotels for the night
of the Closing Date shall be for the account of the Sellers. All items of
revenue, cost and expense (including for avoidance of doubt real estate and
personal property Taxes and assessments) of such Property with respect to the
period from and after the Apportionment Time shall be for the account of the
Purchaser. All adjustments and prorations shall be on an accrual basis in
accordance with GAAP. The Sellers shall be entitled to receive any refunds of
any Taxes (real, personal or sales) for any periods prior to Closing, regardless
of when received.
(b) At the Closing and in connection with the Final Calculation, a fair
and reasonable estimated accounting of all adjustments and prorations shall be
performed and agreed to by the Sellers and the Purchaser. All amounts for which
current bills are not available as of the Closing Date or the date of the Final
Calculation, if applicable, including, without limitation, real estate and
personal property taxes, shall be apportioned based on 100% of the most recent
actual xxxx available. Subsequent final adjustments and payments (the "True-up")
shall be made in cash or other immediately available funds as soon as
practicable after the Closing Date for each Property, based upon an accounting
performed by the Sellers and acceptable to the Purchaser. In the event the
parties have not agreed with respect to the adjustments required to be made
pursuant to this Section 9.1(b) within thirty (30) days of the Closing Date,
upon application by any such party, a certified public accountant reasonably
acceptable to the parties hereto shall determine any such adjustments which have
not theretofore been agreed to by the parties hereto. The charges for such
accountant shall be borne equally by the parties to such
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disputed adjustment. All adjustments to be made as a result of the final results
of the True-up shall be paid to the party entitled to such adjustment within
thirty (30) days after the final determination thereof.
(c) From and after the Closing Date, the Purchaser or its assignee shall
be solely responsible for collecting all current assets ("Current Assets") and
for paying all current trade payables which are disclosed to the Purchaser
pursuant to the good faith estimate and/or the Final Calculation which the
Seller is required to prepare in accordance this Section 9.1(c) ("Current Trade
Payables") that arose in connection with the Candlewood Parties' operation of
the Properties prior to the Closing Date. On or before the date that is ten (10)
days prior to the Closing Date, the Candlewood Parties shall provide the
Purchaser with a good faith estimate of what the total Current Assets and
Current Trade Payables will be on the Closing Date. Such estimate shall be
provided to the Purchaser for information purposes only. Within thirty (30) days
after the Closing Date, the Candlewood Parties shall provide the Purchaser with
a calculation of the actual amount of the Current Assets and the Current Trade
Payables as of the Closing Date (the "Final Calculation"). The Final Calculation
shall be made on an accrual basis in accordance with GAAP and shall provide for
reasonable allowances for uncollectible Current Assets in accordance with GAAP.
The Purchaser shall have five (5) Business Days after its receipt of the Final
Calculation to approve or reject the same. If the Purchaser does not approve or
reject the Final Calculation within such five (5) Business Day period, the
Purchaser shall be deemed to have approved the Final Calculation. Within three
(3) Business Days after the Purchaser's approval of the Final Calculation, (i)
if the amount of the Current Assets determined therein exceeds the amount of the
Current Trade Payables determined therein, then the Purchaser or its assignee
shall pay such excess amount to the Candlewood Parties in immediately available
funds and (ii) if the amount of the Current Trade Payables determined therein
exceeds the amount of the Current Assets determined therein, then the Candlewood
Parties shall pay such excess amount to the Purchaser or its assignee in
immediately available funds. Such payment shall be a final settlement of the
Current Assets and the Current Trade Payables. If the Candlewood Parties and the
Purchaser are not able to reach agreement on the Final Calculation within five
(5) Business Days after the Purchaser's rejection of the same, then a certified
public accountant reasonably acceptable to the parties hereto shall determine
any portion of the Final Calculation that shall not theretofore have
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been agreed to by the parties hereto. The charges for such accountant shall be
borne equally by the parties to such disputed amount.
(d) Notwithstanding anything to the contrary contained herein, the
proration of real and personal property Taxes for each Property located in the
State of Michigan shall be determined assuming that Taxes due July 1 are paid
for the twelve (12) month period from such July 1 through the following June 30,
and Taxes due December 1 are paid for the twelve month period from such December
1 through the following November 30.
9.2 Closing Costs. The Candlewood Parties, on one hand, and the
Purchaser, on the other hand, shall share equally all costs and expenses
associated with the transaction contemplated hereby, including, without
limitation, recording, sales and transfer fees and Taxes, local counsel fees
(limited to those incurred in connection with usual and customary local counsel
services in similar commercial real estate transactions), title insurance
premiums for the owner's policies, market studies and appraisals, title, survey,
environmental and zoning reports, engineering studies, the Taxes (if any)
associated with the transfer of the FF&E, the FAS and Inventories, and any costs
associated with the transfer of the roof warranties; provided, however, each
party shall pay its own attorneys' and accountants' fees and costs in connection
with this transaction and the Candlewood Parties shall pay any costs or expenses
associated with the defeasance or prepayment of any existing debt with respect
to the Properties, the assumption of the Assumed Debt by the Purchaser and any
fees or costs owed their investment banker The parties shall make appropriate
allocations of the Purchase Price for purposes of determining any transfer or
recording Taxes due in connection herewith.
9.3 Additional Tax Matters. The parties agree that (i) Candlewood shall
have sole responsibility, authority and control over the Tax Returns filed with
respect to the Jersey City Owner for all periods ending on or before the Closing
Date and (ii) Candlewood shall be responsible for all Taxes (including payment
thereof) relating to such Tax Returns. The Purchaser agrees to reasonably
cooperate in providing any records, information and documents to Candlewood to
enable Candlewood to file such Tax Returns. With respect to Tax Returns not
otherwise addressed in Section 9.1 or Section 9.2 hereof (if any) filed for the
Jersey City Owner that include both periods before and after the Closing Date
("Straddle Returns"), the Purchaser shall have sole responsibility to file such
Straddle Returns, provided that (x) Candlewood shall have the right to review
and comment on such
- 35 -
Straddle Returns prior to their filing, (y) Candlewood shall be responsible for
all Taxes (including payment thereof) on such Straddle Returns attributable to
the portion of the taxable period prior to and including the Closing Date, and
(z) Candlewood will reasonably cooperate in providing any records, information
and documents to the Purchaser to enable the Purchaser to file such Straddle
Returns. In the event that the Purchaser and Candlewood fail to resolve any
dispute with respect to any such Straddle Return, then any disputed aspects
shall be resolved before the last day on which such Straddle Return is due
(taking into account any extensions) by a "big four" accounting firm mutually
agreed upon by the Purchaser and Candlewood having no material relationship with
either the Purchaser or Candlewood.
9.4 Survival. The obligations of the parties under this Section 9 shall
survive the Closing hereunder until such time as the parties' obligations under
Section 9 shall have been satisfied.
SECTION 10. CASUALTY AND CONDEMNATION
10.1 Casualty. If, prior to the Closing, all or any part of any Property
is destroyed or damaged by fire or other casualty, the Candlewood Parties shall
promptly notify the Purchaser of such fact. There shall be no abatement of the
Purchase Price as a result of such casualty and the Seller shall assign to the
Purchaser at the Closing all of the rights of the Seller to the proceeds, if
any, under the Seller's insurance policies covering the Property with respect to
such damage or destruction and there shall be credited against the Purchase
Price the amount of (a) any amounts received by the Candlewood Parties as of the
Closing under any such insurance policies and (b) any deductible. The Candlewood
Parties shall not negotiate or agree to any settlement of any claim under any
insurance policy without the prior approval of the Purchaser, which approval may
be withheld in the Purchaser's sole discretion.
10.2 Condemnation. If, prior to the Closing, all or any part of any
Property, including access or parking thereto, is taken by eminent domain (or is
the subject of a pending taking which has not yet been consummated), the
Candlewood Parties shall notify the Purchaser of such fact promptly after
obtaining Knowledge thereof. There shall be no abatement of the Purchase Price
as a result of such condemnation and the Seller shall assign to the Purchaser at
the Closing all of the Seller's right, title and interest in and to all awards,
if any, for the taking, and the Purchaser shall be entitled to receive and keep
- 36 -
all awards for the taking of such Property or portion thereof. The Candlewood
Parties shall not negotiate or agree to any settlement of any claim with respect
to any such condemnation without the prior approval of the Purchaser, which
approval may be withheld in the Purchaser's sole discretion.
10.3 Survival. The parties' obligations, if any, under this Section 10
shall survive the Closing.
SECTION 11. TERMINATION.
11.1 Right to Terminate. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, at any time prior to the
Closing Date, by action taken or authorized by the board of directors of the
terminating party or parties, whether before or after receipt of the Stockholder
Approval:
(a) By mutual written consent of Candlewood and the Purchaser;
(b) By either Candlewood or the Purchaser if the transactions
contemplated by this Agreement shall not have been consummated prior to February
28, 2004 (the "Outside Closing Date"); provided, however, that the right to
terminate this Agreement under this Section 11.1(b) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has been
the primary cause of the failure of the transactions contemplated by this
Agreement to occur on or before the Outside Closing Date;
(c) By either Candlewood or the Purchaser if the Stockholder Approval is
not obtained by reason of the failure to obtain the required vote at a duly held
meeting of stockholders or at any adjournment thereof;
(d) By either Candlewood or the Purchaser if either of the SCH Purchase
Agreement or the Termination Agreement has been terminated;
(e) by Candlewood, in accordance with the provisions of Section 8.9;
(f) By the Purchaser, if since the date of this Agreement, there shall
have been any event, development or change of circumstance that constitutes, has
had or could reasonably be expected to have, individually or in the aggregate, a
Material
- 37 -
Adverse Effect and such Material Adverse Effect is not cured within twenty (20)
days after written notice thereof;
(g) By the Purchaser if (i)(A) there shall be breached any covenant or
agreement on the part of a party other than the Purchaser set forth in this
Agreement or (B) any representation or warranty of a party other than the
Purchaser shall have become untrue, (ii) such breach or misrepresentation is not
cured within twenty (20) days after written notice thereof, and (iii) such
breach or misrepresentation would cause the conditions set forth in Section 4
not to be satisfied;
(h) By Candlewood, if (i)(A) the Purchaser has breached any covenant or
agreement on the part of the Purchaser set forth in this Agreement, (B) any
representation or warranty of the Purchaser shall have become untrue (ii) such
breach or misrepresentation is not cured within twenty (20) days after written
notice thereof and (iii) such breach or misrepresentation would cause the
conditions set forth in Section 5 not to be satisfied.
11.2 Effect of Termination.
(a) In the event of termination of this Agreement by either Purchaser or
Candlewood as provided in Section 4, Section 5 or Section 11.1, this Agreement
shall terminate and there shall be no liability or obligation on the part of the
Candlewood Parties, the Purchaser or their respective subsidiaries, officers or
directors except (i) with respect to Section 8.10 (if applicable), this Section
11.2 , Section 9, Section 10 and Section 12 and (ii) with respect to any
liabilities or damages incurred or suffered by a party as a result of the breach
by the other party of any of its representations, warranties, covenants or other
agreements set forth in this Agreement.
(b) The Candlewood Parties and the Purchaser agree that if this
Agreement is terminated pursuant to Section 11.1(d), Section 11.1(e), or Section
11.1(g), (but, in the case of Section 11.1(d), only if the termination required
Candlewood to pay the fees, costs and expenses of SCH under the SCH Purchase
Agreement) then the Candlewood Parties shall pay the Purchaser an amount equal
to the sum of all reasonable and customary out-of-pocket expenses incurred by
the Purchaser or on its behalf in connection with or related to the
authorization, preparation, negotiation, execution and performance of this
Agreement, the Termination Agreement and the transactions contemplated hereby
and thereby.
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(c) The Candlewood Parties and the Purchaser agree that if this
Agreement is terminated pursuant to Section 11.1(h), then the Purchaser shall
pay the Candlewood Parties an amount equal to the sum of all reasonable and
customary out-of-pocket expenses incurred by the Candlewood Parties or on their
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement, the Termination
Agreement and the transactions contemplated hereby and thereby.
(d) Payment of expenses pursuant to Section 11.2(b) or Section 11.2(c)
shall be made not later than two (2) business days after delivery to the other
party of notice of demand for payment and a documented itemization setting forth
in reasonable detail all expenses of the party entitled to receive payment
(which itemization may be supplemented and updated from time to time by such
party until the 90th day after such party delivers such notice of demand for
payment).
(e) All payments under Section 11.2 shall be made by wire transfer of
immediately available funds to an account designated by the party entitled to
receive payment.
SECTION 12. MISCELLANEOUS
12.1 Brokerage Commissions. Each of the parties hereto represents to the
other parties that it dealt with no broker, finder or like agent in connection
with this Agreement or the transactions contemplated hereby, except that the
Candlewood Parties have dealt with their investment banker in connection with
this Agreement and the transactions contemplated hereby and the Candlewood
Parties shall be responsible for paying any such claims for commissions or other
compensation owed to their investment banker. The Candlewood Parties shall be
solely responsible for and shall indemnify and hold harmless the Purchaser and
its respective legal representatives, heirs, successors and assigns from and
against any loss, liability or expense, including, reasonable attorneys' fees,
arising out of any claim or claims for commissions or other compensation for
bringing about this Agreement or such transactions made by any broker, finder or
like agent if such claim or claims are based in whole or in part on dealings
with any of the Candlewood Parties. The Purchaser shall be solely responsible
for and shall indemnify and hold harmless the Candlewood Parties and their
respective legal representatives, heirs, successors and assigns from and against
any loss, liability or expense, including, reasonable attorneys' fees, arising
out of any claim or claims for commissions or other compensation for bringing
about this
- 39 -
Agreement or the transactions contemplated hereby made by any broker, finder or
like agent if such claim or claims are based in whole or in part on dealings
with the Purchaser. The provisions of this Section 12.1 shall survive the
Closing and any termination of this Agreement.
12.2 Publicity. The timing and content of all announcements regarding any
aspect of this Agreement to the financial community, government agencies,
employees or the public generally shall be mutually agreed upon in advance,
unless any party hereto is advised by counsel that any such announcement or
other disclosure not mutually agreed upon in advance is required to be made by
law, by New York Stock Exchange rule, by American Stock Exchange rule, or by
Nasdaq National Market rule, in which case to the extent practicable, the party
making the announcement or disclosure will consult with the other party and use
reasonable efforts to agree on the nature, extent and form of the announcement
or disclosure. Notwithstanding anything to the contrary contained in this
Agreement, the parties (and each employee, representative, or other agent of the
parties) may disclose to any and all persons, without limitation of any kind,
the Tax treatment and Tax structure of the transaction, and all materials of any
kind (including opinions or other Tax analyses) that are provided to the
taxpayer relating to such Tax treatment and Tax structure.
12.3 Notices. All notices, offers, acceptances and other communications
required or permitted under this Agreement shall be in writing signed by the
party making the same, shall specify the Section of this Agreement pursuant to
which it is given, and shall be deemed properly addressed as follows:
To any
Candlewood Party: Candlewood Hotel Company, Inc.
0000 X. 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxx 00000
Attn: Xx. Xxxxxx X. Fix
[Telecopier No. (000) 000-0000]
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with copies to: Candlewood Hotel Company, Inc.
0000 X. 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxx 00000
Attn: Xx. Xxx X. Xxxxxxx
[Telecopier No. (000) 000-0000]
Candlewood Hotel Company, Inc.
0000 X. 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxx 00000
Attn: Xx. Xxxx X. XxXxxx
[Telecopier No. (000) 000-0000]
XxxxXxxxx, Xxxxx & Xxxxx
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxx, Esq.
[Telecopier No. 000-000-0000]
Xxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxx
[Telecopier No. (000) 000-0000]
To the Purchaser: Hospitality Properties Trust
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxxx
[Telecopier No. (000) 000-0000]
with a copy to: Xxxxxxxx & Worcester LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
[Telecopier No. (000) 000-0000]
and such notice shall be deemed to have been received (a) on the date of
delivery if delivered in person or if sent by telecopier or other facsimile
transmission (with hard copy of same being mailed to recipient) or (b) on the
first (1st) Business Day after the date of delivery if sent by same day or
overnight courier service, or (c) upon receipt, if sent by certified or
registered United States Mail, return receipt requested, postage and charges
prepaid. The time period in which a response to any such notice must be given,
or any action taken with respect
- 41 -
thereto, however, shall commence to run from the date of receipt of such notice
by the addressee. Rejection, failure or refusal to accept delivery or the
inability to deliver because of changed address of which no notice was given,
shall be deemed to constitute receipt of the notice sent by the addressee. Any
party may change its address for notice, election, and other communication from
time to time by notifying the other parties of the new address in the manner
provided for giving notice herein. If notice is given pursuant to this Section
to a permitted successor or assign, then notice shall be given in accordance
with the foregoing to such permitted successor or assign.
12.4 Waivers, Etc. Any waiver of any term or condition of this Agreement,
or of the breach of any covenant, representation or warranty contained herein,
in any one instance, shall not operate as or be deemed to be or construed as a
further or continuing waiver of any other breach of such term, condition,
covenant, representation or warranty or any other term, condition, covenant,
representation or warranty, nor shall any failure at any time or times to
enforce or require performance of any provision hereof operate as a waiver of or
affect in any manner such party's right at a later time to enforce or require
performance of such provision or any other provision hereof. This Agreement may
not be amended, nor shall any waiver, change, modification, consent or discharge
be effected, except by an instrument in writing executed by or on behalf of the
party against whom enforcement of any amendment, waiver, change, modification,
consent or discharge is sought.
12.5 Assignment; Successors and Assigns. This Agreement and all rights
and obligations hereunder shall not be assignable by any party without the
written consent of the other parties, except that the Purchaser may assign this
Agreement, in whole or in part, to one or more entities, in each case wholly
owned, directly or indirectly, by the Purchaser (provided, however, that, in the
event this Agreement shall be wholly or partially assigned to any entity wholly
owned, directly or indirectly, by the Purchaser, Hospitality Properties Trust
shall remain liable for the obligation of the "Purchaser" hereunder). In
addition, the Purchaser shall have the right to require that the Properties or
any part thereof be conveyed directly to one or more designees. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, successors and permitted assigns. This
Agreement is not intended and shall not be construed to create
- 42 -
any rights in or to be enforceable in any part by any other persons.
12.6 Severability. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision or provisions
in question invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case.
12.7 Counterparts, Etc. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and shall supersede and take the place of any other
instruments purporting to be an agreement of the parties hereto relating to the
subject matter hereof.
12.8 Governing Law. Except as set forth below, this Agreement shall be
interpreted, construed, applied and enforced in accordance with the laws of The
Commonwealth of Massachusetts applicable to contracts between residents of
Massachusetts which are to be performed entirely within Massachusetts,
regardless of (a) where this Agreement is executed or delivered; or (b) where
any payment or other performance required by this Agreement is made or required
to be made; or (c) where any breach of any provision of this Agreement occurs,
or any cause of action otherwise accrues; or (d) where any action or other
proceeding is instituted or pending; or (e) the nationality, citizenship,
domicile, principal place of business, or jurisdiction of organization or
domestication of any party; or (f) whether the laws of the forum jurisdiction
otherwise would apply the laws of a jurisdiction other than The Commonwealth of
Massachusetts; or (vii) any combination of the foregoing. Notwithstanding
- 43 -
anything contained herein to the contrary, Sections 8.7 through and including
Section 8.11 of this Agreement shall be interpreted, construed, applied and
enforced in accordance with the laws of the State of Delaware applicable to
contracts between residents of Delaware which are to be performed entirely
within Delaware, regardless of (T) where this Agreement is executed or
delivered; or (U) where any payment or other performance required by this
Agreement is made or required to be made; or (V) where any breach of any
provision of this Agreement occurs, or any cause of action otherwise accrues; or
(W) where any action or other proceeding is instituted or pending; or (X) the
nationality, citizenship, domicile, principal place of business, or jurisdiction
of organization or domestication of any party; or (Y) whether the laws of the
forum jurisdiction otherwise would apply the laws of a jurisdiction other than
the State of Delaware; or (Z) any combination of the foregoing.
To the maximum extent permitted by applicable law, any action to enforce,
arising out of, or relating in any way to, any of the provisions of this
Agreement shall be brought and prosecuted in such court or courts located in the
State of Delaware as is provided by law; and the parties consent to the
jurisdiction of said court or courts located in the State of Delaware and to
service of process by registered mail, return receipt requested, or by any other
manner provided by law.
12.9 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, PROCEEDING, OR COUNTERCLAIM THAT RELATES TO OR ARISES OUT OF THIS
AGREEMENT OR THE ACTS OR FAILURE TO ACT OF OR BY ANY OTHER PARTY IN THE
ENFORCEMENT OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT OR BY ANY OTHER
PARTY IN THE PERFORMANCE OF ANY OF THE TERMS AND PROVISIONS OF THIS AGREEMENT.
12.10 Performance on Business Days. In the event the date on which
performance or payment of any obligation of a party required hereunder is other
than a Business Day, the time for payment or performance shall automatically be
extended to the first Business Day following such date.
12.11 Attorneys' Fees. If any lawsuit or arbitration or other legal
proceeding arises in connection with the interpretation or enforcement of this
Agreement, the prevailing party therein shall be entitled to receive from the
other party the prevailing party's costs and expenses, including reasonable
attorneys' fees incurred in connection therewith, in preparation
- 44 -
therefor and on appeal therefrom, which amounts shall be included in any
judgment therein.
12.12 Section and Other Headings. The headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
12.13 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.
12.14 Tax Treatment of Acquisition of Member Interests. If the Purchaser
elects to purchase all of the membership interests in the Jersey City Owner in
lieu of acquiring the Assets owned by the Jersey City Owner with respect to the
Jersey City Property, then to the extent permitted by applicable law, the
parties will treat and report for purposes of federal (and where applicable,
state and local) income Taxes said purchase consistently with the principles of
Situation 2 of Internal Revenue Service Revenue Ruling 99-6, 1999-1 C.B. 432,
and in particular (a) the Purchaser shall treat and report its acquisition of
all of the membership interests as a purchase of all of the assets of the Jersey
City Owner from Candlewood and JPD and (b) Candlewood and JPD shall each treat
and report their sale of the membership interests as a sale of partnership
interests in accordance with Section 741 of the Code.
12.15 Non-Recourse. Notwithstanding anything contained in this Agreement
to the contrary, it is expressly understood and agreed by the parties hereto
that each and every warranty, representation, covenant and agreement made in
this Agreement on the part of any of the Candlewood Parties or the Purchaser was
not made or intended to be made as a personal or individual warranty,
representation, covenant or agreement on the part of the incorporator or any
stockholder (including any holder of preferred stock of any Candlewood Party),
director, officer, agent or partner, past, present or future, of any of the
Candlewood Parties or the Purchaser, or any of them, and no personal or
individual liability or responsibility is assumed by and no recourse at any time
shall be asserted or enforced
- 45 -
against, any such incorporator, stockholder (including any holder of preferred
stock of any Candlewood Party), director, officer, agent or partner, past,
present or future, of any of the Candlewood Parties or the Purchaser, or any of
them, all of which recourse (whether in common law, in equity, by statute or
otherwise) is hereby forever waived and released.
12.16 Nonliability of Trustees. THE DECLARATION OF TRUST ESTABLISHING THE
PURCHASER, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
"DECLARATION"), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF
THE STATE OF MARYLAND, PROVIDES THAT THE NAME "HOSPITALITY PROPERTIES TRUST"
REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT
INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE
OR AGENT OF THE PURCHASER SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR
SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE PURCHASER. ALL PERSONS
DEALING WITH THE PURCHASER, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF THE
PURCHASER FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
[SIGNATURES ON FOLLOWING PAGES]
-46-
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as a sealed instrument as of the date first above written.
CANDLEWOOD PARTIES:
CANDLEWOOD:
CANDLEWOOD HOTEL COMPANY, INC.,
a Delaware corporation
By: /s/ XXXX X. XX XXXX
-------------------------------------
Name: XXXX X. XX XXXX
--------------------------------
Its: CHAIRMAN AND CHIEF EXECUTIVE OFFICER
-------------------------------------
JPD:
JPD CORPORATION,
a Kansas corporation
By:/s/ XXXX X. XX XXXX
--------------------------------
Name: XXXX X. XX XXXX
--------------------------------
Its: CHAIRMAN AND CHIEF EXECUTIVE OFFICER
-------------------------------------
SELLERS:
CANDLEWOOD PORTFOLIO I, L.L.C.,
a Delaware limited liability company
By: Candlewood Hotel Company, Inc., a
Delaware corporation, its sole
member
By: /s/ XXXX X. XX XXXX
-------------------------
Name: XXXX X. XX XXXX
------------------------
Its: CHIEF EXECUTIVE OFFICER
---------------------------
-47-
CANDLEWOOD CHICAGO, IL - WHEELING,
L.L.C., a Delaware limited liability
company
By: Candlewood Hotel Company, Inc., a
Delaware corporation, its sole
member
By: /s/ XXXX X. XX XXXX
-------------------------
Name: XXXX X. XX XXXX
------------------------
Its: CHIEF EXECUTIVE OFFICER
------------------------
CANDLEWOOD JERSEY CITY, NJ, LLC,
a Delaware limited liability company
By: Candlewood Hotel Company, Inc., a
Delaware corporation, its sole
member
By: /s/ XXXX X. XX XXXX
-----------------------------
Name: XXXX X. XX XXXX
------------------------
Its: CHIEF EXECUTIVE OFFICER
------------------------
CANDLEWOOD JERSEY CITY-URBAN RENEWAL,
L.L.C., a Delaware limited liability
company
By: Candlewood Hotel Company, Inc., a
Delaware corporation, its manager
By: /s/ XXXX X. XX XXXX
-----------------------------
Name: XXXX X. XX XXXX
------------------------
Its: CHIEF EXECUTIVE OFFICER
------------------------
- 48 -
CANDLEWOOD OVERLAND PARK-COLLEGE
BOULEVARD, L.L.C., a Delaware limited
liability company
By: Candlewood Hotel Company, Inc., a
Delaware corporation, its sole
member
By:/s/ XXXX X. XX XXXX
-----------------------------
Name: XXXX X. XX XXXX
------------------------
Its: CHIEF EXECUTIVE OFFICER
------------------------
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PURCHASER:
HOSPITALITY PROPERTIES TRUST,
a Maryland real estate investment trust
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
President
- 50 -
SCHEDULE A
The Properties
Location Allocable Purchase Price
----------------------------------- ------------------------
Chicago (Xxxxxxx Estates), IL $ 8,100,000
Chicago (Wheeling), IL $ 5,500,000
Kansas City (Overland Park), KS $ 5,200,000
Detroit (Auburn Hills), MI $ 6,800,000
Detroit (Xxxx), MI $ 6,600,000
Jersey City (Jersey City), NJ $26,700,000
Xxxx (Raleigh), NC $ 5,200,000
Charlotte (Coliseum), NC $ 3,600,000
Greensboro (Greensboro), NC $ 6,000,000
Dallas/Ft. Worth (Fossil Creek), TX $ 4,700,000
Dallas/Ft. Worth (Plano), TX $ 7,000,000
San Antonio (San Antonio), TX $ 4,600,000
