Exhibit 10.2
AGREEMENT FOR PURCHASE AND SALE
FOR
HOTEL VENTURE PORTFOLIO
AND
JOINT ESCROW INSTRUCTIONS
TABLE OF CONTENTS
Page
1. Definitions...............................................................2
1.1 General.............................................................2
1.2 Other Definitions..................................................14
2. Purchase and Sale........................................................15
3. Purchase Price; Allocation...............................................15
3.1 Purchase Price.....................................................15
3.2 Certification of Net Operating Income..............................15
3.3 Allocation of Price................................................16
4. Title and Due Diligence Conditions.......................................16
4.1 Delivery of Property Records and Title Documents...................16
4.2 Survey.............................................................16
4.3 Estoppels and Consents.............................................16
4.4 Buyer's Review and Approval of Title...............................17
4.5 Access to Property and Records.....................................18
4.6 Indemnification....................................................19
4.7 Buyer's Right of Termination.......................................19
4.8 Due Diligence Costs................................................19
5. Representations and Warranties...........................................20
5.1 By Sellers.........................................................20
5.2 By Buyer...........................................................29
5.3 Notice of Subsequent Event or Discovery............................30
6. Operation of the Hotels Pending Closing..................................30
7. Other Agreements.........................................................31
7.1 Liquor License(s) and Inventory....................................31
7.2 Property of Guests.................................................32
7.3 Retention of Funds.................................................33
7.4 2004 Interim Financial Statements..................................33
7.5 Further Assurances.................................................33
7.6 Government Approvals and Third Party Consents......................33
7.7 Exclusivity........................................................34
i
TABLE OF CONTENTS
(continued)
Page
8. Prorations, Credits and Other Adjustments................................34
8.1 Proration of Taxes.................................................34
8.2 Proration of Expenses..............................................34
8.3 Hotel Revenues.....................................................35
8.4 Hotel Payables.....................................................36
8.5 Other Credits to Buyer.............................................36
8.6 Other Credits to Sellers...........................................36
8.7 Regarding Hotel Prorations Generally...............................37
8.8 Preliminary Closing Statement......................................37
9. Conditions to Closing....................................................37
9.1 In Buyer's Favor...................................................37
9.2 In Sellers' Favor..................................................39
9.3 Pre-Closing Damage or Destruction..................................40
10. Closing..................................................................41
10.1 Closing Date; Location.............................................41
10.2 Pro Forma Title Policies...........................................41
10.3 Sellers' Deliveries................................................41
10.4 Buyer's Deliveries.................................................42
10.5 Closing Costs......................................................43
10.6 Completion of Closing..............................................44
10.7 Escrow and Recording Instructions..................................44
10.8 Delivery of Possession.............................................44
10.9 Procedure for Termination of Escrow................................45
10.10 Maintenance of Confidentiality by Escrow Agent.....................45
11. Post-Closing Adjustments.................................................45
11.1 Final Closing Statement............................................45
11.2 Disputes...........................................................46
11.3 Settlement.........................................................46
11.4 Subsequent Tax Bills...............................................46
12. Third-Party Claims and Obligations.......................................47
ii
TABLE OF CONTENTS
(continued)
Page
12.1 Assumed and Retained Liabilities...................................47
12.2 Employee Liabilities...............................................47
13. Indemnification..........................................................47
13.1 Indemnification; Survival..........................................47
13.2 Third-Party Claims and Obligations.................................48
13.3 Time Limitation on Claims..........................................50
13.4 Seller Liquidated Damages..........................................51
14. Termination..............................................................52
15. Assignment...............................................................53
16. Notices..................................................................53
17. General Provisions.......................................................54
17.1 Confidentiality....................................................54
17.2 Effect of Termination..............................................55
17.3 Construction; Participation in Drafting............................55
17.4 No Third-Party Beneficiaries.......................................55
17.5 Survival of Provisions.............................................55
17.6 Integration and Binding Effect.....................................55
17.7 Computation of Time................................................56
17.8 Captions...........................................................56
17.9 Further Assurances.................................................56
17.10 Enforcement Costs..................................................56
17.11 Governing Law......................................................56
17.12 Counterparts.......................................................56
iii
SCHEDULES AND EXHIBITS
Exhibits
--------
Exhibit A Schedule of Contracts
Exhibit B Form of Xxxx of Sale
Exhibit C Form of Agreement of Assignment and Assumption of Assumed Contracts
Exhibit D Form of Deeds
Exhibit E Form of FIRPTA Certificate
Exhibit F Form of General Assignment and Assumption Agreement
Exhibit G Hotel Parcels
Exhibit H Hotel Properties
Exhibit I Form of Tenant Leases Assignment
Exhibit J Schedule of Offsite Rights
Exhibit K Form of Agreement for Assignment and Assumption of Offsite Rights
Exhibit L Form of Sellers' Closing Certificate
Exhibit M Survey of Each Hotel Parcel
Exhibit N Form of Hotel License Estoppel Certificate
Exhibit O Form of Hotel Management Estoppel Certificate
Exhibit P Form of Assumed Loan Estoppel Certificate
Exhibit Q Form of Tenant Estoppel Certificate
Exhibit R Equipment Leases
Exhibit S Form of Notice to Tenant of Sale of Hotel (Lease)
Schedules
---------
Schedule 1.1(a)
Schedule 5.1(a)
Schedule 5.1(d)
Schedule 5.1(e)
Schedule 5.1(f)
Schedule 5.1(g)
Schedule 5.1(h)
Schedule 5.1(i)(3)
Schedule 5.1(i)(5)
Schedule 5.1(i)(6)
Schedule 5.1(j)
Schedule 5.1(k)
Schedule 5.1(l)
Schedule 5.1(m)(1)
Schedule 5.1(m)(2)
Schedule 5.1(n)
Schedule 5.1(o)
Schedule 5.1(p)
Schedule 5.1(q)
Schedule 5.1(r)
iv
Schedule 5.1(u)
Schedule 5.1(v)
Schedule 5.1(w)(1)
Schedule 5.1(w)(3)
Schedule 5.2(d)
Schedule 8.3(c)
v
AGREEMENT FOR PURCHASE AND SALE
FOR
HOTEL VENTURE PORTFOLIO
AND
JOINT ESCROW INSTRUCTIONS
THIS AGREEMENT FOR PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS (this
"Agreement") is made as of April 16, 2004 by and among Hotel Venture East, LP, a
Texas limited partnership ("HVE"), Circa GP East, Inc., a Texas corporation ("GP
East"), Hotel Venture West, LP, a Texas limited partnership ("HVW"), and Circa
GP West, Inc., a Texas corporation ("GP West," and, together with HVE, GP East
and HVW, the "Sellers"),
and
AP/APMC Partners, LLC, a Delaware limited liability company ("Buyer").
WHEREAS, the Sellers collectively own or hold each of the Hotels;
WHEREAS, Buyer desires to purchase and Sellers desire to sell the Hotels to
Buyer;
WHEREAS, in connection with the initial public offering of the common stock
of Newco, Buyer intends to assign all of its rights in and to this Agreement to
Newco;
WHEREAS, the Parties intend that the Closing under this Agreement occur
simultaneously with the Newco IPO Closing and that a portion of the net proceeds
received by Newco in the Newco IPO be used to fund the Purchase Price hereunder
and other costs associated with the transactions contemplated hereby; and
WHEREAS, the respective governing bodies of each of the Sellers and the
Buyer deem it advisable and in the best interests of such persons and their
respective stockholders, partners, members and beneficiaries, respectively, that
the Parties effect the transactions herein described.
NOW, THEREFORE, IN CONSIDERATION OF the mutual covenants and conditions
contained herein, the parties hereto (together, the "Parties" and each,
sometimes, a "Party") do hereby agree and covenant with each other as follows:
1. Definitions.
1.1 General. As used in this Agreement, the following defined terms shall
have the meanings indicated below:
"Account" means any account receivable to be assigned by Sellers to Buyer
or Buyer's nominee at Closing, pursuant to Section 8.3; and "the Accounts" means
all such accounts receivable.
"Accountant" has the meaning specified in Section 3.2.
"Accountant's Review" has the meaning specified in Section 3.2.
"Actions" means all actions, claims, suits, litigation, proceedings, labor
disputes, arbitral actions, governmental audits, inquiries, criminal
prosecutions, investigations or unfair labor practice charges or complaints.
"Affiliate" means, with respect to an indicated person, any other person
who directly or indirectly controls, is controlled by or is under common control
with such indicated person.
"Approval Date" means April 15, 2004.
"Assumed Contracts" means the Contracts identified on the Schedule of
Contracts attached hereto as Exhibit A, other than Excluded Contracts.
"Assumed Loan Agreements" means each of the agreements representing first
mortgage indebtedness of Sellers secured by one or more Hotels set forth on
Schedule 1.1(a) hereto.
"Assumed Loan Estoppel Certificate" has the meaning specified in
Section 4.3(c).
"Assumption Fees" means (i) the assumption fees payable to the Secured
Lender pursuant to the Assumed Loan Agreements in connection with the assignment
thereof to Buyer, up to one percent (1%) of the aggregate outstanding principal
amount under such Assumed Loan Agreements at Closing, and (ii) the costs, fees
and expenses of the Secured Lender and its counsel in connection with the
assignment of the Assumed Loan Agreements to Buyer.
"Billings Liquor Licensee" means Billings HI Operating Company, a Texas
corporation, the holder of the temporary Liquor License applicable to the
Billings, Montana Holiday Inn.
"Xxxx of Sale" means an instrument, substantively in the form attached
hereto as Exhibit B, for conveyance of the FF&E and Inventory to Buyer or
Buyer's nominee.
"Business Day" means a Day other than Saturday, Sunday or other Day when
commercial banks in the State of New York are authorized or required by Law to
close.
2
"Buyer's Knowledge" means the knowledge of each of the officers and
directors of Buyer which was or could have been obtained upon inquiry by such
persons of those employees of Buyer whose duties would in the normal course of
Buyer's affairs result in such employees having knowledge concerning the
applicable subject matter.
"Cash Bank" means, with respect to each Hotel, cash on hand in house banks
and xxxxx cash as of Closing.
"Casualty" has the meaning specified in Section 9.3(b).
"Claim" means any claim, demand, liability, legal action or proceeding,
investigation, fine or other penalty, and loss, cost or expense related thereto
(including, without limitation, attorneys' fees and disbursements actually and
reasonably incurred).
"Closing" means the concurrent delivery (i) by Sellers to Buyer of the
Transfer Instruments and (ii) by Buyer to Sellers of the Purchase Price, in
accordance with this Agreement.
"Closing Date" has the meaning specified in Section 10.1.
"Closing Documents" means the Transfer Instruments, the FIRPTA Certificate,
the Offsite Rights Consents and all the other documents to be delivered
hereunder at, or for purposes of effecting, Closing.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985.
"Collective Bargaining Agreements" mean those collective bargaining
agreements (including all memoranda of understanding and supplementary letter
agreements constituting written amendments thereto), if any, covering Hotel
Employees.
"Consumables" means the stock of supplies and other consumables used in the
operation and maintenance of the Hotels in the Ordinary Course.
"Contract" means any Assumed Loan Agreement, Service Contract, Equipment
Lease, Hotel License Agreement or Hotel Management Agreements.
"Contract Assignment" means an agreement of assignment and assumption of
Assumed Contracts, substantively in the form attached hereto as Exhibit C, for
the assignment to and assumption by Buyer or Buyer's nominee of the Assumed
Contracts.
"Counsel" means each Party's respective legal counsel for the transaction
contemplated by this Agreement: with respect to Sellers, the firm of XxXxxxx
Xxxxxxxx & Xxxxxxxx, P.C., and with respect to Buyer, the firm of Xxxxxx, Xxxxx
& Bockius LLP.
"Day" means a calendar day.
"Deeds" means the instruments substantively in the form attached hereto as
Exhibit D for conveyance by Sellers to Buyer or Buyer's nominee of the Hotel
Premises.
3
"Disputed Payable" means any amount claimed by a third party to be payable
with respect to any of the Hotels' operations but is disputed by Sellers to be
owing (including the disputed portion of a xxxx, invoice or claim that Sellers
otherwise acknowledge to be owing).
"Effective Date" means the date of this Agreement.
"Employee Leave" means vacation, sick leave and any other paid leave
accrued or accruing with respect to Hotel Employees.
"Employee Liabilities" means all obligations and liabilities, actual or
contingent, with respect to Hotel Employees, whether accruing before or after
Closing, including, without limitation, any and all obligations or liabilities:
(i) for wages, Employee Leave, fringe benefits, and payroll taxes; (ii) for
contributions and other payments to Hotel Employee Plans, (iii) for worker's
compensation claims based on any real or alleged occurrence prior to Closing,
state unemployment insurance, state disability insurance or similar private or
public unemployment or disability compensation arrangements in force prior to
Closing; (iv) for Claims under applicable Laws governing employer/employee
relations (including, without limitation, the National Labor Relations Act and
other labor relations laws, fair employment standards Laws, fair employment
practices and anti-discrimination Laws, the WARN Act, ERISA, MEPPA, the
Occupational Health and Safety Act and COBRA) based on any real or alleged
occurrence prior to Closing or any termination of employment upon Closing.
"Environmental Condition" means the release into the environment of any
pollution, including without limitation, any contaminant, pollutant, hazardous
or toxic waste, substance or material as a result of which any Seller (i) has or
may become liable to any person, (ii) is or was in violation of any
Environmental Law, (iii) has or may be required to incur response costs for
investigation or remediation, or (iv) by reason of which any Hotel Parcels or
Hotel Improvements or other assets of any Seller, may be subject to any lien
under Environmental Laws.
"Environmental Laws" means all applicable and legally enforceable foreign,
federal, state and local statutes or laws, common law, judgments, orders,
regulations, licenses, permits, rules and ordinances relating to pollution or
protection of health, safety or the environment, including, but not limited to
the Federal Water Pollution Control Act (33 U.S.C Section 1251 et seq.),
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), Safe
Drinking Water Act (42 U.S.C. Section 300f et seq.), Toxic Substances Control
Act (15 U.S.C. Section 2601 et seq.), Clean Air Act (42 U.S.C. Section 7401 et
seq.), Comprehensive Environmental Response, Compensation and Liability Act (42
U.S.C. Section 9601(f) et seq.) and other similar state and local statutes, in
effect as of the date hereof.
"Environmental Liabilities and Costs" means all liabilities, obligations,
responsibilities, obligations to conduct cleanup, losses, damages, deficiencies,
punitive damages, consequential damages, treble damages, costs and expenses
(including, without limitation, all reasonable fees, disbursements and expenses
of counsel, expert and consulting fees and costs of investigations and
feasibility studies and responding to governmental request for information or
documents), fines, penalties, restitution and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past, present or
future, resulting from any claim or
4
demand, by any person or entity, under any Environmental Law, or arising from
Environmental Conditions.
"Equipment Lease" means a personal property lease covering any item(s) of
FF&E, including (without limitation) the Contracts identified as Equipment
Leases in the Schedule of Contracts attached hereto as Exhibit A.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow" means the escrow established pursuant to this Agreement for
purposes of holding the Purchase Price and the Transfer Instruments to be
recorded at Closing and, if Closing is effected through Escrow, for purposes of
effecting the delivery of the other Closing Documents.
"Escrow Agent" means Lawyers Title Insurance Corporation, acting through
LandAmerica National Commercial Services at its office at 000 Xxxx 0xx Xxxxxx,
0xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, whenever acting in the capacity of an
escrow holder pursuant hereto.
"Escrow Delivery Date" has the meaning specified in Section 10.3(a).
"Excluded Receivables" has the meaning specified in Section 8.3.
"Existing Title Documents" has the meaning specified in Section 4.1.
"Extended Coverage" means the deletion from the Title Policy of general
exceptions for survey matters, unrecorded easements, mechanics' liens,
unrecorded liens for taxes and assessments and rights of parties in possession
under unrecorded leases, to the extent such deletions are customarily offered by
the Title Company in the states where the Hotels are located.
"FF&E" means any and all machinery, equipment, appliances, tools,
furniture, fittings, removable fixtures and other articles of durable personal
property of every kind and nature, including spare parts and reserve stock,
which are owned or leased by or for the account of Sellers and are used or
useable in the operation of any Hotel, including, without limitation and subject
to depletion and replacement in the Ordinary Course: (i) office furniture and
equipment, (ii) room furnishings, (iii) art work and other decorative items,
(iv) televisions, radios, VCRs and other consumer electronic equipment, (v)
telecommunications equipment, (vi) computer equipment, (vii) automobiles, vans,
trucks and other vehicles, (viii) blankets, pillows, linens, towels, sheets and
other bed clothing, (ix) china, crystal, dishware, glassware, silverware,
flatware and other dinnerware, tablecloths, napkins and other "operating
inventory" as that term is used in the Uniform System of Accounts, (x) kitchen
appliances, cookware and other cooking utensils, (xi) manuals, schematics, plans
and other written materials pertaining to the use, operation, maintenance or
repair of any item of FF&E, (xii) the Plans and other written or electronic
materials and data pertaining to the construction, operation, maintenance or
repair of any of the Hotel Improvements, and (xiii) software used in the
operation of any Hotel; but excluding (A) personal property owned by any Hotel
guest, tenant, concessionaire, licensee or other third party (unless such person
owns such property for the account or benefit of Sellers), (B) manuals, records,
software and other like materials owned by (and proprietary to) Manager,
5
unless prepared or maintained primarily for a Hotel, and (C) computer software
licensed to (rather than owned by) Sellers or Manager, unless (x) such license
is by its terms transferable in connection with the sale of the Hotels to Buyer
and (y) Buyer pays any fee or other charge imposed by the licensor in connection
with such a transfer.
"Final Statement" has the meaning specified in Section 11.1.
"Financial Statements" means the combined audited financial statements of
Sellers, consisting of the balance sheet of Sellers as of December 31, 2003 and
December 31, 2002 and the audited financial statements of Hotel Venture Limited
Partnership (as predecessor to Sellers), consisting of the balance sheets of
Sellers as of May 31, 2002 and May 31, 2001, and the related statements of
income and cash flows for the years then ended and the footnotes thereto. The
audited balance sheet of Sellers as of December 31, 2003 is referred to herein
as the "Balance Sheet" and December 31, 2003 is referred to herein as the
"Balance Sheet Date." When delivered to Buyer in accordance with Section 7.3,
the consolidated financial statements of Sellers for periods following the
Balance Sheet Date, consisting of the balance sheet of Sellers and the related
statements of income and cash flows for the period then ended will be deemed to
be included in the definition of "Financial Statements" for all purposes under
this Agreement, including, without limitation, the warranties and
representations set forth in Section 5.1(k) and Section 5.1(p) hereof.
"FIRPTA Certificate" means a certificate with respect to Sellers,
substantively in the form attached as Exhibit E, confirming to Buyer that
Sellers are not foreign persons or entities for purposes of Section 1445 of the
Internal Revenue Code of 1986, as amended (with such supplemental statements as
may be required to exempt the transactions contemplated hereby from any
withholding tax requirements under applicable state Laws).
"GAAP" means generally accepted accounting principles in the United States.
"General Assignment" means general assignment and assumption agreement,
substantively in the form attached hereto as Exhibit F, for the transfer by
Sellers to Buyer or Buyer's nominee of the Intangibles.
"Governmental Authority" means any of the United States Government, the
government of any state of the United States or any county or municipality
therein, and any executive department, legislative body, administrative or
regulatory agency, court, officer (whether elected, appointed or otherwise
designated) or other authority thereof, whenever purporting to act in an
official capacity.
"Guest Ledger Account" has the meaning specified in Section 8.3(a).
"Hazardous Substance" means any petroleum or petroleum-related product, any
asbestos-containing materials (whether or not friable), PCBs, formaldehyde foam,
radioactive substances, toxic mold, biologically hazardous wastes or any other
substance defined as "hazardous waste," "hazardous substance," "hazardous
material," "toxic substance," "toxic waste," "carcinogenic," "mutagenic,"
"pollutant," "contaminant" or any other variant of such terms in, or otherwise
subject to regulation under, Environmental Laws regulating the
6
generation, storage, transportation, discharge, disposal, release or removal of
environmentally hazardous substances.
"Hotel Employee Plan" means an "employee benefit plan," as defined in
ERISA, covering any of the Hotel Employees, other than a Multi-Employer Plan.
"Hotel Employees" means all those persons currently employed at any Hotels
(whether employed by a Seller, Manager or any Affiliate of any Seller or
Manager).
"Hotel Excise Taxes" means all sales, occupancy, room, telecommunications,
beverage and similar taxes to which the operations of any Hotel is subject.
"Hotel Improvements" means all of the buildings, other immovable structures
and improvements and fixtures on the Hotel Parcels.
"Hotel License Agreement" means any agreement pertaining to the use, in
conjunction with any Hotel, of (i) one or more identifying trade names,
trademarks, service marks, logos or other proprietary name or xxxx which is
owned by a third party and/or (ii) a reservation system owned by a third party,
unless such agreement is integrated in the Hotel Management Agreements. For all
purposes under this Agreement, "Hotel License Agreement" shall not include any
replacement or FF&E reserves that are held by any party pursuant to such Hotel
License Agreements.
"Hotel License Estoppel Certificate" has the meaning specified in Section
4.3(a).
"Hotel Management Agreements" means the agreements with Manager relating to
the management and operation of the Hotels, together with all agreements
(including, without limitation, subordination and non-disturbance agreements and
consents to assignment) which are amendatory or supplementary thereto.
"Hotel Management Estoppel Certificate" has the meaning specified in
Section 4.3(b).
"Hotel Parcels" means the parcels of land described in Exhibit G hereto,
and all rights and interests in land and improvements appurtenant thereto,
including, without limitation: (i) easements and rights-of-way, (ii) licenses
and other privileges, (iii) rights in and to land underlying adjacent highways,
streets and other public rights-of-way and rights of access thereto, (iv) rights
in and to strips and gores of land within or adjoining any such parcel, (v) air
rights, excess floor area rights and other transferable development rights
belonging to or useable with respect to any such parcel, (vi) rights to utility
connections and hook-ups, (vii) water rights, (viii) riparian rights, and (ix)
any other rights which any Sellers may have in or with respect to land adjoining
any such parcel (including land which is separated from any such parcel only by
public highway, street or other right-of-way).
"Hotel Payable" means any account payable outstanding as of Closing for any
Hotel, other than Disputed Payables, but shall not include any sum which may
become payable to Manager as a result of an early termination by Buyer of the
Hotel Management Agreements following Closing.
7
"Hotel Premises" means the Hotel Improvements and the Hotel Parcels.
"Hotel Records" means all of the books, records, correspondence, Plans and
other files, both paper and electronic (and including any accounting, database
or other record-keeping software used in connection with such books, records and
files which Sellers own or may otherwise transfer), that have been received or
generated and maintained in the course of operation of the Hotels and that are
in Sellers' or Manager's possession or control, including (without limitation)
those generated and maintained by Manager (excluding only materials, such as
Manager's system manuals, which are proprietary to Manager and which do not
particularly concern the Hotels and software that is owned by Sellers or Manager
and not utilized on-site at the Hotels).
"Hotels" means the Hotel Premises, the Assumed Contracts, the Leases, the
Offsite Rights, the FF&E, the Inventory, the Hotel Records, the Cash Banks and
the Intangibles in any way used in connection with the hotels located on the
properties described on Exhibit H.
"Indemnified Person" has the meaning specified in Section 13.2(g)(1).
"Indemnify" means to hold harmless, indemnify and (where the
indemnification concerns a Claim) defend, by counsel reasonably satisfactory to
the indemnified Party.
"Indemnifying Party" has the meaning specified in Section 13.2(g)(1).
"Initial Filing Deadline" means May 1, 2004.
"Intangibles" means Sellers' rights, title and interest in the Marks, the
Permits, the Repair Warranties, the Reservations and Reservation Deposits, the
Accounts, the Hotel Records, the Plans and all other intangible personal
property rights of whatever nature (excluding the Contracts and excluding such
rights which are expressly excluded from the Hotels) constituting part of the
goodwill of the Hotels' provided, that, nothing in this definition shall be
deemed to limit or alter the Parties' obligations pursuant to Section 8.
"Inventory" means (i) the Retail Inventory and (ii) the Consumables, but
excluding Liquor Inventory if applicable alcoholic beverage control Laws require
a separate sale and transfer of the Liquor Operations.
"Laws" means any and all:
(a) Constitutions, statutes, ordinances, rules,
regulations, orders, rulings or decrees of the United States or of the state,
county or municipality in which any Hotel is located, or any other Governmental
Authority (including, without limitation, building and safety codes, Title III
of the Americans with Disabilities Act, the Occupational Safety and Health Act
and similar state statutes, laws regarding Hazardous Substances and all
regulations and rulings promulgated under or pursuant to any thereof).
(b) Agreements with or covenants or commitments to any
Governmental Authority that are binding upon any Seller or any of the elements
of any Hotel (including, without limitation, any requirements or conditions for
the use or enjoyment of any
8
license, permit, approval, authorization or consent legally required for the
operation of any Hotel).
(c) Recorded covenants, conditions and restrictions
affecting any Hotel Parcel.
"Lease" means any space lease, license, concession or other such
arrangement for use of space within any Hotel, other than transient use of guest
rooms, banquet rooms or conference rooms by Hotel guests in the Ordinary Course.
"Lease Assignment" means an assignment and assumption of Leases,
substantively in the form attached hereto as Exhibit I.
"Licensed Premises" means the areas within any Hotel described or otherwise
identified in or with respect to a Liquor License as licensed for Liquor
Operations.
"Lien" means any mortgage, security interest, encumbrance, restriction,
charge, deed of trust or other consensual lien, mechanic's or any materialman's
lien, judgment lien, special improvement bond or bonded indebtedness, lien for
delinquent Property Taxes or assessments, other Tax and statutory lien (other
than the lien for non-delinquent Property Taxes and assessments or any lien
arising out of any activity of Buyer).
"Liquor Inventory" means all liquor, wine, beer and other alcoholic
beverages held for sale to Hotel guests and others in the Ordinary Course or
otherwise used in the operation of any Hotel, including (without limitation) the
contents of any in-room servi-bars and mini-bars.
"Liquor License" means any government license, permit or other
authorization for the Liquor Operations and "the Liquor Licenses" means all such
required licenses, permits and other authorizations.
"Liquor Licensee" means the person(s) holding the applicable Liquor
License.
"Liquor Operations" means the sale and/or service of liquor, wine, beer or
other alcoholic beverages at any Hotel.
"Loss" means any loss of property, revenues or business or any loss in
value (but not purely speculative losses).
"Manager" means the person currently engaged to manage the Hotels: namely,
Six Continents Resources, Inc.
"Xxxx" means any trademark, trade name, service xxxx, logo or other
proprietary name, xxxx or design which is owned by any Seller (or licensed to
any Seller and assignable in conjunction with a sale of the Hotel(s) owned by
such Seller) and used exclusively or primarily in connection with any Hotel,
together with all the good will associated with the use of such name, xxxx or
design in connection any Hotel; and "the Marks" means all such names, marks,
designs and good will.
9
"Material Adverse Effect" means with respect to any person, any change,
development, event, occurrence, action or omission, that individually or in the
aggregate could reasonably be expected to (i) result in a material adverse
effect on the business, assets, properties, condition (financial or otherwise)
or results of operations of such person or (ii) prevent or materially impede,
interfere with, hinder or delay the consummation of the transactions
contemplated by this Agreement and any other related agreements.
"Material Casualty" has the meaning specified in Section 9.3(a).
"MEPPA" means the Multi-Employer Pension Plan Amendments Act.
"Multi-Employer Plan" means a "multiemployer plan," as defined in Section
3(37) of ERISA, to which contributions are made on behalf of any Hotel
Employee(s).
"Net Income" means, with respect to the Sellers for any period, the net
income (loss) of Sellers generated by the Hotels, determined in accordance with
GAAP, excluding any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).
"Net Operating Income" means, with respect to the Sellers for any period,
the Net Income of Sellers generated by the Hotels for such period calculated in
accordance with GAAP, plus (A) an amount equal to any extraordinary loss, plus
(B) provision for taxes based on income or profits to the extent such provision
for taxes was included in computing Net Income, plus (C) consolidated interest
expense of Sellers for such period, whether paid or accrued (including
amortization of original issue discount, non-cash interest payments and the
interest component of capital lease obligations), to the extent such expense was
deducted in computing Net Income, plus (D) depreciation and amortization
(including amortization of goodwill and other intangibles and deferred financing
expenses) of Sellers for such period to the extent such depreciation and
amortization were deducted in computing Net Income, and (E) provided, that, for
purposes of calculating Net Operating Income, the base management fees of
Sellers attributable to the Hotels shall be adjusted to equal three percent (3%)
of each Hotel's gross room revenue for any period, plus (F) partnership level
interest income to the extent included in the net income reported, will be
included up to $5,750.00, and (G) audit fees will be deducted in an amount equal
to $23,750.00.
"Newco" means Capital Lodging, a Maryland real estate investment trust.
"Newco IPO" means Newco's underwritten initial public offering of shares of
its common stock, registered on Form S-11 (the "Newco Form S-11") and declared
effective by the Securities and Exchange Commission.
"Newco IPO Closing" means the receipt by Newco of the net proceeds of the
Newco IPO.
"Newco IPO Closing Deadline" means July 30, 2004.
"Objectionable Title Matter" has the meaning specified in Section 4.4(a).
10
"Offsite Rights" means any lease, license or other agreement or arrangement
(other than those of record which are identified in the Title Reports) providing
for use of another's real property in conjunction with the operation of any
Hotel (as, by way of illustration and not limitation, use for vehicular parking
and/or access), including, without limitation, the agreements identified on the
Schedule of Offsite Rights attached hereto as Exhibit J.
"Offsite Rights Assignment" means an agreement of assignment and
assumption, substantively in the form attached hereto as Exhibit K, for the
assignment to and assumption by Buyer or Buyer's nominee of the Offsite Rights.
"Offsite Rights Consent" has the meaning specified in Section 9.1(i).
"Offsite Rights Estoppel Certificate" has the meaning specified in Section
9.1(j).
"Ordinary Course" with respect to any Hotel, means the course of day-to-day
operation of such Hotel, in accordance with its current operating budget and in
a manner which does not materially vary from the policies, practices and
procedures which have generally characterized during the 24 months preceding the
Effective Date.
"Original" means any of (i) an original counterpart of any Lease, Offsite
Rights or Assumed Contract, (ii) the original Hotel Records and (iii) other
original documents comprising or evidencing the Intangibles; and "the Originals"
means all of such items.
"Outside Closing Date" means September 30, 2004.
"Permit" means any permit, certificate, license or other form of
authorization or approval issued by a government agency or authority and legally
required for the proper operation and use of any Hotel (including, without
limitation, any certificates of occupancy with respect to the Hotel
Improvements, elevator permits, conditional use permits, zoning variances,
non-conforming use permits and business licenses, but excluding Liquor Licenses)
to the extent held and assignable by any Seller or Manager or otherwise
transferable with any Hotel.
"Permitted Exceptions" means (i) liens for real property taxes and
assessments not yet delinquent, other than liens for special improvement bond
assessments or other bonded indebtedness, (ii) liens or encumbrances arising out
of any activity of Buyer with respect to the Hotels, (iii) the Leases, (iv) the
Assumed Contracts, (v) the Secured Loans, and (vi) any other matter deemed to be
a Permitted Exception pursuant to Section 4.4.
"Place of Closing" has the meaning specified in Section 10.1.
"Plans" means the plans and specifications for the original construction of
the Hotel Improvements, together with any subsequent material modifications
thereof.
"Preliminary Statement" has the meaning specified in Section 8.8.
"Property Taxes" has the meaning specified in Section 8.1.
11
"Purchase Price" means the purchase price being paid by Buyer to Sellers
for the Hotels, as specified in Section 3.1.
"Registration Statement" has the meaning set forth in Section 13.1(a).
"Repair Warranties" means the written guaranties, warranties and other
obligations for repair or maintenance given by contractors, manufacturers or
vendors with respect to the Hotel Improvements or FF&E, to the extent assignable
by or at the direction of any Seller or Manager.
"Reservation Deposit" means any deposit or advance payment received by any
Seller or Manager in connection with any Reservation.
"Reservations" means the reservations, commitments and other commitments or
agreements for the use of guest rooms, conference rooms, dining rooms or other
facilities in any Hotel, to the extent pertaining to periods from and after
Closing.
"Retail Inventory" means all retail goods held by any Seller or Manager for
sale to Hotel guests and others in the Ordinary Course (excluding food and
beverages served on-site at any Hotel).
"Retained Funds Obligation" has the meaning set forth in Section 7.3.
"Scheduled Capital Expenditures" means capital repairs, replacements and
improvements that are (i) identified in the current capital expenditure budget
of any Hotel or another Property Record delivered to Buyer pursuant to Section
4.1 and (ii) are shown on such budget or other document as scheduled to be
completed by no later than the end of the calendar month in which Closing
occurs.
"Secured Lender" has the meaning set forth in Section 4.3(c).
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended
"Sellers' Closing Certificate" means a certificate duly executed by each
Seller, in the form attached hereto as Exhibit L, certifying the accuracy of the
matters described in Sections 9.1(a) and 9.1(b).
"Sellers' Extraordinary S-11 Costs" means that portion of Sellers' expenses
incurred in connection with the transactions described herein that are
attributable to the Newco IPO and which would not be incurred by Sellers absent
the filing of an initial public offering in connection with this Agreement,
including legal and audit costs.
"Sellers' Knowledge" means the knowledge of each of the officers and
directors of each Seller and the Manager which was or could have been obtained
upon inquiry by such persons of those employees of each Seller and the Manager,
respectively, whose duties would in the normal course of each Seller's or the
Manager's affairs, respectively, result in such employees having knowledge
concerning the applicable subject matter; provided, that, with respect to
12
Sections 5.1(v) and 5.1(w) only, "Sellers' Knowledge" means the actual knowledge
of each of the officers and directors of each Seller upon due inquiry of such
persons to the Manager.
"Service Contract" means any of the contracts or other arrangements,
written or oral, for the continuing provision of services relating to the
improvement, maintenance, repair, protection or operation of any Hotel.
"Survey" means a survey of each Hotel Parcel meeting ALTA/ACSM standards
specified in Exhibit M hereto, prepared and certified by a surveyor duly
licensed in the State where the applicable Hotel Premises are located.
"Tax Return" means all federal, state, county, local and foreign returns
required to be filed with respect to Taxes.
"Taxes" means any federal, state, local, foreign or other tax, duty, levy,
impost, fee, assessment or other governmental charge, including, without
limitation, income, gross receipts, sales, use, withholding, business,
occupation, franchise, payroll, documentary and Property Tax.
"Tenant Estoppel Certificate" has the meaning specified in Section 4.3(e).
"Title Company" means Lawyer's Title Company, together with any agent
through which it may act in issuing any of the Title Policies and with any
co-insurers.
"Title Policy" means an ALTA (Form B - 1970), or its local equivalent,
owner's policy of title insurance, with Extended Coverage, insuring Buyer (or
Buyer's nominee) that the insured has fee title or leasehold title, as
applicable, to the applicable Hotel Premises and any appurtenant easements and
Offsite Rights, and including the following endorsements (or their local
equivalents):
(a) CLTA Form 100 (Rev. 12/4/69), which may be
modified in the owner's policies by deleting Paragraphs 1(a), 1(c), 2(a) and
2(b) thereof,
(b) CLTA Form 116, with respect to the building(s)
located on the Hotel Parcels,
(c) CLTA Form 116.1, identifying the applicable Hotel
Parcel to the applicable Survey, appropriately modified for issuance under an
owner's (rather than lender's) policy,
(d) Where available and appropriate, CLTA Form 116.7,
insuring that the Hotel Parcels consist of legally subdivided parcels,
(e) Where available and appropriate, a zoning
endorsement insuring that the Hotel Improvements are in compliance with local
zoning requirements under applicable Laws,
(f) If applicable, an endorsement effectively deleting
any "creditor's rights" printed exception in the Title Policy form,
13
(g) Any other endorsements which are used by any
Seller to insure against a Lien or which are offered by such Seller and accepted
by Buyer as the cure for any other title matter which is not a Permitted
Exception, and
(h) At Buyer's expense, such further endorsements as
may be available and requested by Buyer prior to the Closing Date; and
together with such re-insurance and/or co-insurance, from such additional title
insurance companies, as Buyer may reasonably require.
"Title Report" means a title report, title commitment or other such
document, prepared and issued by the Title Company, describing the condition of
title to the applicable Hotel Premises.
"Trailing 12 Month Net Operating Income" means, with respect to any person,
the Net Operating Income of such person during the twelve calendar months
immediately preceding the applicable date.
"Transactor" means, with respect to each Party, the person(s) authorized by
such Party to execute and deliver Transfer Instruments and other Closing
Documents on behalf of such Party.
"Transfer Instruments" means all the instruments by which Sellers will
convey the Hotels to Buyer and/or Buyer's nominees hereunder, including (without
limitation) the Deeds, the Xxxx of Sale, any Offsite Rights Assignments, the
Tenant Leases Assignment, the Contract Assignment and the General Assignment.
"Uniform System of Accounts" means the Uniform System of Accounts, 9th
revised edition, as published by the Hotel Association of New York City, Inc.,
and the Educational Institute of the American Hotel and Lodging Association.
"Voucher" means any certificate, gift certificate, coupon, voucher,
trade-out or other writing which entitles the holder or bearer to a credit
(whether in a specified dollar amount or for a specified item, such as a room
night or meal) to be applied against the usual charge for rooms, meals and/or
other goods or services at any Hotel; but shall not include complimentary rooms
(or room rates below average rack rates) granted to convention and other meeting
groups in the Ordinary Course.
"WARN Act" means the Worker Adjustment and Retraining Act of 1988, as
amended.
1.2 Other Definitions. Terms defined in any other part of this Agreement
(including, without limitation, "Sellers," "Buyer," "Party" and "Parties," and
"this Agreement," defined in the initial paragraph hereof) shall have the
defined meanings wherever capitalized herein. As used in this Agreement, the
terms "herein," "hereof" and "hereunder" refer to this Agreement in its entirety
and are not limited to any specific sections; and the term "person" means any
natural person, other legal entity, or combination of natural persons and/or
other legal entities acting as a unit. Wherever appropriate in this Agreement,
the singular shall be deemed to refer to the plural
14
and the plural to the singular, and pronouns of certain genders shall be deemed
to comprehend either or both of the other genders.
2. Purchase and Sale.
On and subject to the terms and conditions set forth in this Agreement,
Sellers shall sell, convey, assign and transfer the Hotels to Buyer, and Buyer
shall purchase and accept the Hotels from Sellers; and, to the extent expressly
provided herein or in any Transfer Instrument (but not otherwise), Buyer shall
assume from and after Closing Sellers' obligations pursuant to the Assumed Loan
Agreements and the obligations and liabilities appertaining to each Hotel
(including, without limitation, Sellers' obligations and liabilities under and
with respect to the Assumed Contracts, the Permits and any Permitted
Exceptions). Except as otherwise expressly provided herein, all obligations and
liabilities appertaining to the Hotels prior to the Closing shall not be assumed
by Buyer and shall remain the obligations and liabilities of the applicable
Seller or Sellers.
3. Purchase Price; Allocation.
3.1 Purchase Price. The Purchase Price shall be the quotient derived by
dividing: (a) the Trailing 12 Month Net Operating Income of the Hotels as of
March 31, 2004, reduced by four percent (4%) (as a reserve) by (b) nine percent
(9%). Such Purchase Price will be (A) reduced by the aggregate amount of
indebtedness assumed by Buyer pursuant to the Assumed Loan Agreements, and (B)
increased by the total amount of Assumption Fees, and (C) and further increased
by an amount equal to Sellers' Extraordinary S-11 Costs not in excess of $25,000
in the aggregate, and (D) subject to credits, prorations and other adjustments
as provided in Sections 8 and 11.
3.2 Certification of Net Operating Income. On or prior to April 30, 2004,
Sellers shall deliver to Buyer a calculation of the Hotels' Trailing 12 Month
Net Operating Income as of March 31, 2004. The Parties shall use commercially
reasonable efforts to reach agreement regarding the calculation of the Hotels'
Trailing 12 Month Net Operating Income as of March 31, 2004, no later than May
10, 2004. If the Parties have not reached such agreement by May 10, 2004, then
the Parties shall jointly engage PricewaterhouseCoopers in Dallas, Texas (the
"Accountant") to resolve any items in dispute with respect to the Hotels'
Trailing 12 Month Net Operating Income as of March 31, 2004 and Buyer and
Sellers shall each deliver to the Accountant their respective calculations of
the Hotels' Trailing 12 Month Net Operating Income as of March 31, 2004. Buyer
and Sellers shall cause the Accountant to prepare and deliver to the Parties not
later than 30 Days following the Accountant's receipt of the Parties' respective
calculations, a certified calculation of the Hotels' Trailing 12 Month Net
Operating Income as of March 31, 2004 (the "Accountant's Review") which shall
set forth in reasonable detail the basis for such calculation. The Accountant's
Review shall be binding on the Parties unless a Party objects to the
Accountant's Review on or prior to the date that is ten (10) Days following the
receipt by such Party of the Accountant's Review. If any objection to the
Accountant's Review is timely made by any Party, (1) for purposes of determining
the Purchase Price at Closing, the Accountant's Review shall control, and (2)
the Accountant's Review shall be subjected to the dispute resolution procedures
set forth in Section 11.2 applicable to the Final Statement.
15
3.3 Allocation of Price. Sellers and Buyer agree that they shall file all
Tax Returns (including, but not limited to, Internal Revenue Service Form 8594)
in a manner which allocates the entirety of the Purchase Price to "Class V
assets," as such term is defined in Treasury Regulation Section 1.338-6(b)(2).
4. Title and Due Diligence Conditions.
4.1 Delivery of Property Records and Title Documents. Sellers shall have
delivered to Buyer, outside Escrow, a Title Report for each Hotel Premises,
issued as of July 23, 2003 and July 24, 2003 (as applicable) including complete
and fully legible copies of every recorded document referenced therein and
Surveys for each Hotel Parcel dated as of June 13, 2003, June 26, 2003, June 30,
2003, June __, 2003 (undated) and July 18, 2003, (as applicable) (the "Existing
Title Documents"). As promptly as reasonably practicable following the Effective
Date, Sellers shall deliver to Buyer a Title Report for each Hotel Premises,
issued as of a date no earlier than April 1, 2004, including complete and fully
legible copies of every recorded document referenced therein, to the extent not
previously delivered to Buyer.
4.2 Survey. As promptly as practicable, and in any event within 45 Days
after the Effective Date, Sellers shall at their expense obtain and deliver to
Buyer a Survey with respect to each Hotel premises, certified as of a date no
earlier than 90 Days prior to the Effective Date, addressed to the Title Company
(and any co-insurers), Buyer and Buyer's assigns and in a form acceptable to the
Title Company.
4.3 Estoppels and Consents. Sellers shall use commercially reasonable
efforts to obtain and deliver to Buyer, at least five Business Days before the
Approval Date, each of the following:
(a) From the franchisor or licensor under each Hotel License
Agreement, a certificate dated no earlier than April 1, 2004 ("Hotel License
Estoppel Certificate") substantially in the form attached hereto as Exhibit N or
in such other form provided by the applicable franchisor or licensor, reasonably
acceptable to Buyer.
(b) From the Manager under each Hotel Management Agreements, a
certificate dated no earlier than April 1, 2004 ("Hotel Management Estoppel
Certificate") substantially in the form attached hereto as Exhibit O.
(c) From the lender(s) under each Assumed Loan Agreement (the
"Secured Lenders"), a certificate or other writing dated no earlier than April
1, 2004 ("Assumed Loan Estoppel Certificate") substantially in the form attached
hereto as Exhibit P.
(d) If applicable, from grantors of Offsite Rights, each of the
Offsite Rights Estoppel Certificates requested by Buyer under Section 9.1(j).
(e) From the tenant under each Lease, a certificate dated no earlier
than April 1, 2004 ("Tenant Estoppel Certificate") substantially in the form
attached hereto as Exhibit Q.
16
4.4 Buyer's Review and Approval of Title.
(a) Objectionable Title Matters and Permitted Exceptions. Except for
each:
(1) Lien (other than Permitted Exceptions), and
(2) Every other exception to or defect in the applicable
Seller's title to the applicable Hotel Premises, not a Permitted Exception, as
to which Buyer gives Sellers written notice of objection on or before the later
of (A) the Approval Date or (B) ten Business Days after a Title Document
disclosing such exception or defect is delivered to Buyer (an "Objectionable
Title Matter"),
Buyer shall be deemed to have approved the state of title with respect to the
applicable Hotel Premises as shown by the Title Documents delivered to Buyer
hereunder. For the avoidance of doubt, following the Approval Date, Buyer shall
only have the right to object to exceptions or defects in title that were not
previously disclosed in the Existing Title Documents. All exceptions and other
defects (except Liens) disclosed by such a Title Document as to which Buyer
makes no timely objection in accordance with the provisions of this Section
4.4(a), and all such exceptions and other defects to which Buyer objects but
later waives such objection as provided in Section 4.4(c), shall be deemed
Permitted Exceptions. As used herein, "Title Documents" mean each Title Report,
each Survey, each supplement to or downdate of any Title Report or Survey, or
any written notice of a title defect or exception delivered by a Seller to
Buyer.
(b) Cure of Objectionable Title Matters. Sellers shall use
commercially reasonable efforts to cure, or remove as an exception to the
applicable Title Policy, each Objectionable Title Matter (A) that does not
appear to be a valid exception to title, including, without limitation,
references to leases or tenancies which no longer exist, to instruments or
documents which on their face or by law are no longer effective and to matters
which have no apparent applicability to the real property in question
("Inapplicable Exceptions") or (B) is otherwise susceptible to being cured prior
to the Closing Date, but without Sellers being obligated to cure or remove any
Objectionable Title Matters that cannot be cured by the payment of money. Except
as expressly set forth in the preceding sentence or (with respect to Liens) in
Section 4.4(d), Sellers shall not be obligated to cure any Objectionable Title
Matter and Buyer shall not be entitled to any reduction in, credit against or
deduction from the Purchase Price by reason of any Objectionable Title Matter.
(c) Termination for Objectionable Title Matter. If, after giving
Sellers timely notice of an Objectionable Title Matter, Buyer does not receive
by the earlier of 5 Days prior to the Closing Date or 10 Days after giving such
notice:
(1) Written confirmation from the Title Company that, upon
conditions specified in such confirmation (all of which are within the
applicable Seller's power to satisfy by the Closing Date) the Title Policy will
be issued, at customary rates, without exception for such Objectionable Title
Matter or that the Title Company will affirmatively insure Buyer against any
loss therefrom by an endorsement in form and content satisfactory to Buyer in
Buyer's sole discretion, and
17
(2) An unconditional written undertaking from the applicable
Seller to satisfy all such conditions specified by the Title Company,
Buyer shall have the right to terminate this Agreement by written notice of
termination given to Sellers on or before the Closing Date. If Buyer does not so
elect to terminate this Agreement, the Objectionable Title Matter in question
shall then be deemed to be a Permitted Exception. Buyer's remedy for any
Objectionable Title Matter shall be limited to such right of termination, unless
such Objectionable Title Matter constitutes a breach of a covenant or
representation of Sellers contained elsewhere in this Agreement.
(d) Removal of Liens. Notwithstanding any other provision hereof,
Sellers shall obtain at or prior to Closing the full reconveyance, release or
other discharge, of record, and convey each Hotel free and clear, of each and
every Lien (except Permitted Exceptions). Prior to Closing, Escrow Agent shall
obtain, in timely fashion, payoff letters from the record holder of each Lien
and from the lessor under each Equipment Lease identified in Exhibit R (or
otherwise identified to Escrow Agent by Sellers or Buyer). If the applicable
Seller fails to obtain the reconveyance, release or other discharge of any Lien
or Equipment Lease, Buyer shall have the right to direct Escrow Agent to
withhold from the Purchase Price otherwise disbursable to Sellers the amount
specified in the applicable payoff letter for such reconveyance, release or
discharge and to use the amount(s) so withheld to obtain the same, for Buyer's
benefit.
4.5 Access to Property and Records. During the period from the Effective
Date to Closing, Sellers shall provide to Buyer, its agents, consultants and
counsel, upon one Business Day's prior notice, access at all reasonable times to
the following, which access shall be provided solely by the persons described in
Section 4.5(d):
(a) All of the Hotel Records.
(b) All such other information regarding each Hotel and in Sellers'
possession or control (including files, contracts, financial books and records
and other documents) as Buyer may reasonably request, excluding appraisals,
internal evaluations and materials which are protected by attorney-client
privilege or which any Seller is prohibited from disclosing under applicable
Laws.
(c) All Hotel Premises, for purposes of conducting (at Buyer's
expense) any inspections, observations, examinations, surveys and tests that
Buyer may reasonably require; provided, that, any invasive testing of any Hotel
Premises shall require the prior written consent of Sellers, which shall not be
unreasonably withheld or delayed. Such right of access, however, shall be
subject to the rights of guests, tenants and licensees of the Hotel and Buyer in
its activities under this Section 4.5(c) shall not unreasonably interfere with
the operation of the Hotel. Sellers may have their own representative accompany
Buyer's representative(s) on any such visit.
(d) The principals of Sellers and the following principals of the
Manager: Xxxxx Xxxx, Xx Xxxxxxxx, and Xxxx Xxxxx, and such other persons subject
to Sellers' prior written consent, which shall not be unreasonably withheld or
delayed.
18
Notwithstanding Section 16, Buyer may give any notice required under this
Section 4.5 to the attention of one of Xxxxxx Xxxx and Xxxxxx Xxxxx and by
telephone to 000.000.0000, electronic facsimile transmission to 214.954.4160 or
e-mail to xxxxxx@xxxxxxxxxxxx.xxx or xxx@xxxxxxxxxxxx.xxx.
4.6 Indemnification. Buyer shall Indemnify Sellers from and against any
and all Losses that any Seller incurs by reason of any physical damage to any
Hotel Premises or the FF&E or any Claim against Sellers caused or arising out of
any activity of Buyer or Buyer's representatives pursuant to Section 4.5;
provided, however, that in no event shall Buyer be liable for any Claim or Loss
(including without limitation any perceived loss of economic value of any
Hotel), solely as a result of Buyer's discovery and, to the extent required of
Buyer under applicable Law, disclosure of any pre-existing condition affecting
the Hotel. Buyer shall, with reasonable promptness, repair in a good and
workmanlike manner any damage to any Hotel Premises or the FF&E caused by any
such activity.
4.7 Buyer's Right of Termination. In addition to the right of termination
provided in Section 4.4(c), Buyer shall have the right to terminate this
Agreement unless Buyer in its sole and absolute discretion is satisfied as to
all matters related to each Hotel and bearing upon the suitability of each Hotel
for Buyer's purposes, and Buyer shall be conclusively deemed to have exercised
such right of termination unless by 5:00 p.m., Pacific Time, on the Approval
Date Buyer has given Sellers and Escrow Agent notice acknowledging its
satisfaction. Upon giving such timely notice, Buyer shall have no further right
to terminate this Agreement under this Section 4.7, but such notice shall not
affect Buyer's right to terminate under any other provision of this Agreement
(including, without limitation, Section 4.4(c), if applicable). To the extent
that Buyer's right of termination under this Section 4.7 or under any other
provision of this Agreement is deemed to make this Agreement an option contract,
Sellers agree and acknowledge that Buyer's undertaking the due diligence
investigation of the Hotels and agreement in Section 17.2 to deliver to Sellers
copies of all third-party reports concerning the Hotels obtained by Buyer in the
event Buyer terminates this Agreement, constitutes adequate consideration for
such option.
4.8 Due Diligence Costs. Except as otherwise expressly provided herein,
Sellers and Buyer shall bear and pay their own respective costs incurred in
connection with Buyer's due diligence investigations.
5. Representations and Warranties.
5.1 By Sellers. Sellers hereby jointly and severally represent and
warrant to Buyer that, as of the Effective Date:
(a) Organization and Qualification. Each Seller is a corporation or
limited partnership (as specified on Schedule 5.1(a)) duly organized, validly
existing and in good standing under the laws of the state of its jurisdiction
(as specified on Schedule 5.1(a)) and has full legal power and authority to
enter into, deliver and perform its obligations under this Agreement and each
Closing Document to which it is a party. Each Seller has full corporate or
partnership power and authority, as applicable, to own its properties and to
carry on its business as it is now being conducted by it, and is qualified to do
business and is in good standing in each
19
jurisdiction in which the nature of the business or the properties owned or
leased by such Seller requires qualification, except where the failure to be so
qualified or in good standing would not have a Material Adverse Effect.
(b) Authorization and Enforceability. The execution, delivery and
performance of this Agreement and the Closing Documents to which each Seller is
a party and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary action of each Seller, and this
Agreement and each Closing Document to which each Seller is a party constitute
(or when executed and delivered by each Seller will constitute) the valid and
binding obligations of each Seller enforceable against each Seller in accordance
with their terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights in general and subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(c) Consents and Approvals. Except as set forth on Schedule 5.1(d),
no consent, approval, waiver or authorization is required to be obtained by any
Seller from, and no notice or filing is required to be given by any Seller to or
made by any Seller with, any Governmental Authority or other person in
connection with the execution, delivery and performance by each Seller of this
Agreement and each of the Closing Documents to which each such Seller is a
party, except where the failure to obtain such consent, approval, waiver or
authorization, or to give or make such notice or filing, would not have a
Material Adverse Effect.
(d) Non-Contravention. Subject to receipt of the consents and
approvals referred to in Schedule 5.1(d), the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by each Seller will not (i) violate or conflict with the
organizational documents of any Seller, (ii) conflict with, or result in the
breach of, or termination of, or constitute a default under (whether with notice
or lapse of time or both), or create in any party a right to modify or cancel,
or accelerate or permit the acceleration of the performance required by, any
indenture, mortgage, lien, lease, agreement, commitment or other instrument, or
any order, judgment or decree, to which any Seller is a party or by which any
Seller or any of their respective properties are bound which would have a
Material Adverse Effect, (iii) constitute a violation of any law, regulation,
order, writ, judgment, injunction or decree applicable to any Seller which would
have a Material Adverse Effect, or (iv) result in the creation of any Lien upon
the properties or assets of any Seller which would have a Material Adverse
Effect.
(e) Hotel Compliance. Except as set forth in Schedule 5.1(e), (A) to
Sellers' Knowledge, nothing in the current condition, occupancy or use of any
Hotel violates or will require correction under any applicable Law and (B) no
notice has been given by any Governmental Authority (1) charging any such
violation or asserting the need for any such correction, (2) revoking,
canceling, denying renewal of, or threatening any such action with respect to,
any Permit or Liquor License, or (3) indicating that any inquiry, complaint,
proceeding or investigation (excluding routine, periodic inspections) is
contemplated or pending regarding compliance of the Hotel with any applicable
Law.
20
(f) Permits. Except as set forth in Schedule 5.1(f), each Hotel is in
material compliance with the terms and conditions of each Permit applicable
thereto. All Permits required for the lawful operation of each Hotel as
currently conducted have been issued and are currently in force and none of such
Permits (other than Liquor Licenses) will be terminated or impaired or become
terminable as a result of the transactions contemplated by this Agreement.
(g) Liquor Licenses. Schedule 5.1(g) correctly identifies all of the
Liquor Licenses and each Liquor Licensee. The Liquor Licensees collectively hold
all of the Liquor Licenses required for the current Liquor Operations and all of
the Liquor Licenses are currently in force.
(h) Offsite Rights. There are no Offsite Rights or Offsite Right
Agreements other than as disclosed in the Schedule of Offsite Rights attached
hereto as Schedule 5.1(h), which correctly identifies each of the existing
Offsite Rights and Offsite Right Agreements. Except as otherwise disclosed in
Schedule 5.1(h), as to each Offsite Rights and Offsite Rights Assignment
identified therein: to Sellers' Knowledge, such Offsite Rights are in full force
and effect and there does not exist under such Offsite Rights Assignment any
default (or event or condition which with notice or passage of time or both will
be a default) on the part of any party thereto.
(i) Real Property.
(1) Neither the Manager nor any Seller has received written
notice of or is otherwise aware of any pending or proposed change in the zoning
or any special use permit of any Hotel Parcel or any proposal for a new special
assessment district including any Hotel Parcel. The transfer of ownership of the
Hotels to Buyer will not result in a change of the zoning or any special use
permit applicable to any Hotel or require any alterations or improvements to any
Hotel Premises in order to maintain compliance with any zoning requirement or
any special use permit.
(2) There are no pending or, to Sellers' Knowledge, threatened
condemnation proceedings, lawsuits or administrative actions relating to the
property or other matters affecting materially and adversely the current use,
occupancy or value of any Hotel Parcel or the applicable Hotel Improvements; the
Hotel Improvements located on each Hotel Parcel have received all approvals of
governmental authorities (including licenses and Permits) required in connection
with the ownership or operation thereof and no written notice from a
Governmental Authority has been received by the Manager or any Seller alleging
that any such Hotel Improvement has not been operated and maintained in
accordance with applicable Laws.
(3) Except as set forth on Schedule 5.1(i)(3), no portion of any
Hotel Parcel or the roads immediately adjacent to and currently utilized to
access any Hotel Parcel: (i) is situated in a "Special Flood Hazard Area," as
set forth on a Federal Emergency Management Agency Flood Insurance Rate Map or
Flood Hazard Boundary Map; (ii) to the Sellers' Knowledge, was the former site
of any public or private landfill, dump site, retention basin or settling pond;
(iii) to the Sellers' Knowledge, was the former site of any oil or gas drilling
operations; or (iv) to the Sellers' Knowledge, was the former site of any
experimentation, processing, refining, reprocessing, recovery or manufacturing
operation for any petrochemicals.
21
(4) There are no material commitments to or agreements with any
governmental authority or agency (federal, state or local) affecting the use or
ownership of any Hotel Premises.
(5) Except as set forth on Schedule 5.1(i)(5), all Hotel
Improvements located on each Hotel Parcel are supplied with utilities and other
services necessary for the operation of such Hotel Improvements, including gas,
electricity, water, telephone, sanitary sewer and storm sewer, all of which
services are adequate in accordance with all applicable Laws, and are provided
via public roads or via permanent, irrevocable, appurtenant easements benefiting
the applicable Hotel Parcel.
(6) Except as set forth on Schedule 5.1(i)(6), to Sellers'
Knowledge, there are no material latent defects in any of the roof, foundation,
other structural elements, elevators, heating and air conditioning and
ventilation systems, plumbing and electrical systems, boilers and furnaces and
sprinkler systems, and other building power, mechanical and operating systems of
the Hotel Improvements or in any of the FF&E. For purposes hereof, a "latent
defect" is any condition impairing the function or structural integrity of any
item which is not readily apparent by ordinary visual inspection of such item.
(j) Hotel Leases. Except as identified in the Schedule of Leases
attached hereto as Schedule 5.1(j), no Lease encumbers any Hotel Premises.
Schedule 5.1(j) accurately identifies each Lease, including (A) all of the
agreements, amendments, supplements and other documents which evidence or govern
such Lease, (B) the portion of the applicable Hotel Premises subject to such
Lease, (C) the legal name of the current tenant under such Lease, (D) the
current monthly fixed rent and the terms of any percentage rent payable under
such Lease, (E) the commencement and expiration dates for such Lease and any
options in the tenant to extend the term thereof and (F) the amount of the
security deposit (if any) outstanding under such Lease. Except as disclosed on
Schedule 5.1(j), (1) no rent or other payment due from the tenant under such
Lease is delinquent or has been paid more than one month in advance, (2) no
default, or event or condition which upon notice or passage of time or both will
mature into a default, exists under such Lease on the part of the landlord or,
to Sellers' Knowledge, on the part of the tenant, (3) there is no remaining
right in the tenant under such Lease to any "free" rent, rent abatement (other
than upon damage to or destruction or condemnation of the leased premises) or
other rent concession, (4) there is no remaining obligation on the part of the
landlord under such Lease to construct, install or pay or reimburse the cost of
any tenant improvements, fixtures, furnishings or equipment or otherwise to make
any payments to the tenant, and (5) there is no remaining obligation, present or
contingent, on the part of any Seller to pay any commission, finder's fee or
similar compensation with respect to such Lease.
(k) Title to Property. The appropriate Seller has good title (or a
valid leasehold interest in FF&E subject to an Equipment Lease) to the real and
personal property: (A) used in the operation of the Hotels; or (B) reflected on
the Balance Sheet. The real property included within the Hotel Premises and the
personal property of the Sellers is free and clear of all Liens, except: (i) any
Lien set forth in the title reports for the Hotel Parcels, as listed in Schedule
5.1(k); (ii) any liens for liabilities or obligations reflected as current
liabilities in the Financial Statements; (iii) liens for Property Taxes not yet
due and payable or due but being contested in good faith
22
by appropriate proceedings, with such items being contested in good faith being
listed in Schedule 5.1(k); (iv) immaterial mechanics', workmen's, repairmen's,
warehousemen's, carriers or other like Liens arising or incurred in the Ordinary
Course of the applicable Hotel; and (v) with respect to personal property,
original purchase price conditional sale contracts and equipment leases with
third parties entered into in the Ordinary Course of the applicable Hotel.
(l) Intellectual Property. Except for Marks with respect to rights of
use granted under Hotel License Agreements, Schedule 5.1(l) identifies (A) each
of the Marks owned by any Seller (if any) which have been registered with the
U.S. Patent and Trademark Office (including the registration number and date
thereof) or filed with any state or local jurisdiction (including the filing
number and date thereof) and (B) every other Xxxx in which any Seller claims a
proprietary interest or right of use in connection with any Hotel (including the
extent of the interest or right claimed therein). Except as otherwise disclosed
in Schedule 5.1(l) or in any of the agreements identified on Schedule 5.1(l),
there is no adverse claim to or interest in any Xxxx which could restrict or
prevent Buyer's continuing use of such Xxxx in connection with any Hotel
(including, without limitation, on goods sold or otherwise distributed at any
Hotel) and the use of the Marks consistent with the applicable Seller's current
usage thereof, respectively, does not infringe upon or otherwise violate the
valid rights of any other person. All software that is owned by or licensed to
Sellers and which is utilized in the Ordinary Course operations of any Hotel is
located on the applicable Hotel Premises.
(m) Taxes.
(1) Except as set forth on Schedule 5.1(m)(1), (i) each Seller
has filed (or caused to be filed) in a timely manner all Tax Returns required by
applicable Law to be filed with respect to all Taxes required to have been paid
on or before the date hereof (whether or not shown on any such Tax Return) for
which any Seller may be liable; (ii) all such Tax Returns were correct and
complete in all material respects when filed; (iii) there is no outstanding
agreement, waiver or consent providing for an extension of the statutory period
of limitations applicable to the assessment of any Tax, and no power of attorney
granted by any Seller with respect to any Tax matter is currently in force; (iv)
there is no Action of any nature now pending or, to the Sellers' Knowledge,
threatened against any Seller with respect to any Tax or any Tax Returns, nor is
there any assessment asserted by or any matters under discussion with any
federal, state, county, local or foreign Tax authority; (v) there are no Liens
for Taxes (other than for current Taxes not yet due and payable) on any of the
Hotels; (vi) none of the Hotels, directly or indirectly, secures or was financed
by any debt the interest on which is tax-exempt under Section 103(a) of the
Code; (vii) all Taxes that any Seller has been required to collect or withhold
have been duly collected or withheld and, to the extent required when due, have
been or will be duly paid to the proper Tax authority or other Governmental
Authority; and (viii) no Seller has filed notices of protest or appeal against,
or commenced proceedings to recover, real property tax assessments against any
of the Hotel Premises.
(2) The closing dates of the most recent governmental audits of
Hotel Excise Taxes are listed in Schedule 5.1(m)(2). Except as shown on Schedule
5.1(m)(2), neither any Seller nor Manager has received written notice of any
open audit or outstanding notice of deficiency or delinquency with respect to
any Hotel Excise Tax.
23
(n) Contracts and Commitments.
(1) Schedule 5.1(n) accurately identifies each material Contract
currently in force with respect to each Hotel, including (A) all of the
agreements, amendments and other documents evidencing or governing such
Contract, (B) the legal name of the parties to such Contract, (C) the applicable
monthly, annual or other periodic fixed rent or charge under such Contract, if
any, (D) the equipment, rights, goods or services to which such Contract
pertains, and (E) the expiration date of such Contract (including, for this
purpose, the earliest date upon which the parties thereunder may terminate the
same without liability or payment of any penalty or premium). Each of the
Contracts have been made by either by a Seller, or by Manager, as agent for a
Seller. Except as disclosed on Schedule 5.1(n), no default, or event or
condition which upon notice or passage of time or both will mature into a
default, exists under any such Contract on the part of the Manager or any Seller
a party thereto, or to the Sellers' Knowledge, on the part of any other party to
any such Contract. With respect to the Contracts listed in Schedule 5.1(n), no
party has notified the Manager or any Seller in writing (i) of its intention to
cease to perform any material services required to be performed by it, without
any material payment required to be made by it, or terminate any such Contract,
or (ii) that any party considers the Manager or any Seller to be in breach in
any material respect or default thereunder or in potential breach in any
material respect or potential default thereunder. Sellers have made available to
Buyer complete and correct copies of all items listed on Schedule 5.1(n) that
are in writing, and the descriptions contained in Schedule 5.1(n) of all items
listed therein that are not in writing are complete and correct in all material
respects.
(2) Except for the Reservations, Leases, the Assumed Contracts,
the Permitted Exceptions and the Permits, and as otherwise expressly provided in
this Agreement, there are no agreements, undertakings or arrangements made by
any Seller, Manager or any of their Affiliates that will be binding upon Buyer
or any Hotel after Closing.
(3) On or prior to July 1, 2004, Sellers shall have completed in
full all life safety, ADA and conditional items under the property improvement
plans associated with the Hotels' franchise agreements, that are required to be
completed during the terms thereof.
(o) Insurance. Schedule 5.1(o) accurately identifies each of the
existing policies of property, hazard, general or special liability, business
interruption, boiler and machinery and other insurance which is carried on any
Hotel by any Seller, or by Manager on behalf of any Seller. Except as disclosed
on Schedule 5.1(o), neither any Seller nor Manager has received written notice
canceling or threatening to cancel any such policy (including, without
limitation, notice that such policy will not be renewed or will be renewed only
with a materially higher premium or a materially reduced scope or amount of
coverage).
(p) Financial Statements. True and complete copies of the Financial
Statements, together with related auditors reports, are set forth in Schedule
5.1(p). The Financial Statements (i) to Sellers' Knowledge based on the
certification of Sellers' auditors, comply as to form in all material respects
with the published rules and regulations of the Securities and Exchange
Commission; (ii) fairly present, in all material respects, the consolidated
financial position of Sellers as of the dates thereof and their consolidated
results of operations and cash
24
flows for the periods then ended; and (iii) have been prepared in conformity
with GAAP applied on a consistent basis (except as may be indicated in the notes
thereto).
(q) Books and Records. Sellers maintain accurate books and records
reflecting their assets and liabilities and maintain proper and adequate
internal accounting controls which provide assurance (i) that transactions are
executed with management's authorization; (ii) that transactions are recorded as
necessary to permit preparation of the consolidated financial statements of
Sellers and to maintain accountability for Sellers' assets; (iii) that access to
Sellers' assets is permitted only in accordance with management's authorization;
(iv) regarding prevention or timely detection of the unauthorized acquisition,
use or disposition of Sellers' assets; and (v) that accounts, notes and other
receivables are recorded accurately, and proper and adequate procedures are
implemented to effect the collection thereof on a current and timely basis. Each
Hotel's books, records and accounting systems are maintained substantially in
accordance with the Uniform System of Accounts. Schedule 5.1(q) sets forth all
Reservation Deposits for each Hotel.
(r) Litigation. There are no Actions pending, or to the Sellers'
Knowledge, threatened, that question or could otherwise affect the validity of
this Agreement or any action taken or to be taken by any Seller in connection
with this Agreement. There is no Action pending or, to the Sellers' Knowledge,
threatened, or any order, injunction or decree outstanding, against any Seller
that, if adversely determined, could reasonably be expected to or would
individually or in the aggregate have a Material Adverse Effect. Except as set
forth on Schedule 5.1(r), (i) there are no Actions pending or, to the Sellers'
Knowledge, threatened against or affecting any of the Hotels, and (ii) none of
the Sellers is subject to any order, writ, judgment, award, injunction or decree
of any court or Governmental Authority of competent jurisdiction or any
arbitrator. Schedule 5.1(r) sets forth and describes all Actions, including,
without limitation, actions for personal injuries, product liability or breach
of warranty arising from products sold or serviced provided by any Seller
pending, or to the Sellers' Knowledge, threatened against any Seller or any
properties or rights relating to any Hotel, before any court, arbitrator or
Governmental Authority.
(s) Existing Condition. Since the Balance Sheet Date, the Sellers
have operated or caused to be operated their respective Hotels only in the
Ordinary Course, and no Seller has:
(1) suffered any material adverse change in its working capital,
financial condition, results of operation, assets, liabilities (absolute,
accrued, contingent or otherwise), reserves, business, operations or prospects;
(2) incurred any liability or obligation (absolute, accrued,
contingent or otherwise) except non-material items incurred in the Ordinary
Course, or increased, or experienced any change in any assumptions underlying or
methods of calculating, any bad debt, contingency or other reserves;
(3) paid, discharged or satisfied any claim, liability or
obligation (whether absolute, accrued, contingent or otherwise) other than the
payment, discharge or satisfaction in the Ordinary Course of liabilities and
obligations reflected or reserved against in
25
the Balance Sheet or incurred in the Ordinary Course and consistent with past
practice since the Balance Sheet Date;
(4) permitted or allowed any of the Hotels to be subjected to
any Lien, except for Liens for current Taxes not yet due;
(5) written down the value of any Inventory (including
write-downs by reason of shrinkage or xxxx-down) or written off as uncollectible
any notes or Accounts, except for immaterial write-downs and write-offs in the
Ordinary Course;
(6) cancelled any debts or waived any claims or rights of
substantial value;
(7) sold, transferred or otherwise disposed of any Hotel
properties or assets (real, personal or mixed, tangible or intangible), except
in the Ordinary Course;
(8) disposed of or permitted to lapse any rights to the use of
any Marks, or disposed of or disclosed to any person other than representatives
of Buyer any trade secret, formula, process, know-how or other intellectual
property not theretofore a matter of public knowledge;
(9) other than in the Ordinary Course, granted any general
increase in the compensation of officers or employees of any Hotels (including
any such increase pursuant to any bonus, pension, profitsharing or other plan or
commitment) or any other increase in the compensation payable or to become
payable to any officer or employee of any Hotel, and no such increase is
customary on a periodic basis or required by agreement or understanding;
(10) made any material capital expenditure except in the Ordinary
Course;
(11) made any change in any method of accounting or accounting
practice; or
(12) agreed, whether in writing or otherwise, to take any action
described in this Section.
(t) Accuracy of Documents. Each of the document copies delivered to
Buyer pursuant to Section 4.1 is or will be a complete copy of the document in
the possession or control of the applicable Seller and, to Sellers' Knowledge, a
complete and accurate copy of the original of such document.
(u) Environmental.
(1) Except as set forth in the reports described in Schedule
5.1(u) to Sellers' Knowledge, each Seller is in compliance with all applicable
Environmental Laws and holds all permits, registrations and licenses necessary
under Environmental Laws. To Sellers' Knowledge, and except as set forth in the
reports described in Schedule 5.1(u), there are no Environmental Liabilities and
Costs of any Seller. To Sellers' Knowledge, and except as set
26
forth in the reports described in Schedule 5.1(u), there are no Environmental
Conditions. To Sellers' Knowledge, and except as set forth in the reports
described in Schedule 5.1(u), none of the Sellers or the Manager has received
any notices from any Governmental Authority or other third party alleging
liability under or violation of any Environmental Law, or alleging
responsibility for the removal, clean-up, or remediation of any Environmental
Condition. To Sellers' Knowledge, and except as set forth in the reports
described in Schedule 5.1(u), no Seller is subject to any enforcement or
investigatory action by any Governmental Authority regarding an Environmental
Condition with respect to any Hotel Parcel or any Hotel Improvements or any
other property related in any way to any Seller. To Sellers' Knowledge, and
except as set forth in the reports described in Schedule 5.1(u), no asbestos
containing materials or polychlorinated biphenyls (i.e., PCBs) are contained in
or stored on any Hotel Parcel or Hotel Improvement. As used herein, the terms
"toxic" or "hazardous" wastes, substances or materials shall include, without
limitation, all those so designated and all those in any way regulated by any
Environmental Laws.
(2) Sellers have previously delivered or made available to Buyer
complete copies of all documents and reports, including, without limitation,
environmental investigations and testing or analyses that are in the possession
or control of any Seller or the Manager and which relate to compliance with
Environmental Laws by any of them or to the past or current environmental
condition of the Hotel Premises. No claim has been made by or on behalf of
Sellers in respect of the Chubb Custom Insurance Company Environmental Site
Liability Policy for the period May 31, 2002 through May 31, 2007 (Policy No.
3725-43-36).
(v) Employees. All Hotel Employees are employees of Manager and not
of any Seller. Sellers collectively have no employees. On or prior to the date
that is ten (10) Days following the date hereof, Schedule 5.1(v) shall identify,
to Sellers' Knowledge, each Hotel Employee, his or her classification, title or
position, salary (including non-discretionary bonuses) or wage rate and Employee
Leave as of the Effective Date. To Sellers' Knowledge, there do not exist (A)
any disputes between Manager (and/or any Seller) and any of the Hotel Employees
that might reasonably be expected to have a Material Adverse Effect on the
applicable Hotel, (B) any pending unfair labor practice complaints or labor
arbitration proceedings with respect to Hotel Employees (or former Hotel
Employees) and neither Manager nor any Seller has received written notice from
any Governmental Authority asserting (i) any violation as to Hotel Employees of
Laws governing employment or labor, including any Laws relating to wages, hours,
collective bargaining, social security or other payroll taxes, equal employment
opportunity, employment discrimination or employment safety or (ii) any
liability on the part of any Seller or Manager for back wages, taxes or
penalties for any such violation. To Sellers' Knowledge, there is no Collective
Bargaining Agreement currently in force or the subject of negotiation and none
of the Hotel Employees are within any bargaining unit that has been certified
under the National Labor Relations Act or any similar state Law and, to Sellers'
Knowledge, no effort currently exists to organize any of the Hotel Employees
into any such bargaining unit and the transactions contemplated by this
Agreement will not precipitate any collective bargaining activity by any Hotel
Employees.
27
(w) Employee Benefit Plans and Arrangements. To Sellers' Knowledge,
with respect to Hotel Employee Plans and Multi-Employer Plans:
(1) On or prior to the date that is ten (10) Days following the
date hereof, Schedule 5.1(w)(1) shall identify each Hotel Employee Plan and each
Multi-Employer Plan.
(2) Sellers have delivered to Buyer true and complete copies of
the plan documents for each Hotel Employee Plan and for each Multi-Employer
Plan, including, where applicable and without limitation, summary plan
descriptions and insurance contracts, financial and actuarial reports, and most
recent annual filings with Governmental Authorities (including, for this
purpose, the Pension Benefit Guaranty Corporation).
(3) Except as otherwise disclosed on Schedule 5.1(w)(3) as
delivered to Buyer on or prior to the date that is ten (10) Days following the
date hereof, each Hotel Employee Plan is a defined contribution plan (as defined
in section 3(34) of ERISA).
(4) There are no pending or threatened claims by or on behalf of
any Hotel Employee Plan or, as against any Seller or Manager, by or on behalf of
any Multi-Employer Plan.
(5) Other than routine claims for benefits, there are no pending
or threatened claims by or on behalf of any individual participants or
beneficiaries against any Hotel Employee Plan.
(6) Each Hotel Employee Plan that is an "employee pension
benefit plan" within the meaning of ERISA has received a favorable determination
letter from the Internal Revenue Service that such plan is qualified under
section 401(a) of the Internal Revenue Code and no circumstance exists which
could cause such plan to cease being so qualified.
(7) No Hotel Employee Plan is the subject of any investigation,
audit or other such adverse action on the part of the Internal Revenue Service,
the United States Department of Labor or the Pension Benefit Guaranty
Corporation, and each Hotel Employee Plan is in material compliance with the
terms of the plan documents, ERISA and applicable provisions of the Internal
Revenue Code.
(8) Manager is not delinquent in any of its contribution
obligations with respect to any Hotel Employee Plan or Multi-Employer Plan.
(9) No unfunded liability currently exists with respect to any
of the Multi-Employer Plans.
(10) Manager is in compliance with all currently applicable COBRA
requirements respecting current or former Hotel Employees. Manager does not
provide any retiree medical benefits to former Hotel Employees.
28
(11) No Seller is an "employee benefit plan" as defined in
section 3(3) of ERISA, nor is it an Affiliate of an employee benefit plan; and
none of the Hotel constitutes "plan assets" as that term is used in 29 C.F.R.
2509.75-2.
5.2 By Buyer. Buyer hereby warrants and represents to Sellers that, as of
the Effective Date:
(a) Organization and Qualification. Buyer is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware and has full legal power and authority, to enter into,
deliver and perform its obligations under this Agreement and each Closing
Document to which it is a party. Buyer has full limited liability company power
and authority to own its properties and to carry on its business as now being
conducted by it, and is qualified to do business and is in good standing in each
jurisdiction in which the nature of Buyer's business or the properties owned or
leased thereby requires qualification, except where the failure to be so
qualified or in good standing would not have a Material Adverse Effect on Buyer.
(b) Authorization and Enforceability. The execution, delivery and
performance of this Agreement by Buyer and the Closing Documents to which Buyer
is a party and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action of Buyer, and this
Agreement and each Closing Document to which Buyer is a party constitute (or
when executed and delivered by Buyer will constitute) the valid and binding
obligations of Buyer enforceable against Buyer in accordance with their terms,
except to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights in general and subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(c) Consents and Approvals. No consent, approval, waiver or
authorization is required to be obtained by Buyer from, and no notice or filing
is required to be given by Buyer to or made by Buyer with, any Governmental
Authority or other person in connection with the execution, delivery and
performance by Buyer of this Agreement and each of the Closing Documents to
which Buyer is a party, except where the failure to obtain such consent,
approval, waiver or authorization, or to give or make such notice or filing,
would not have a Material Adverse Effect on Buyer.
(d) Non-Contravention. Subject to receipt of the consents and
approvals referred to in Schedule 5.2(d), the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by Buyer will not (i) violate or conflict with the
certificate of formation or limited liability company agreement of Buyer, (ii)
conflict with, or result in the breach of, or termination of, or constitute a
default under (whether with notice or lapse of time or both), or create in any
party a right to modify or cancel, or accelerate or permit the acceleration of
the performance required by, any indenture, mortgage, lien, lease, agreement,
commitment or other instrument, or any order, judgment or decree, to which Buyer
is a party or by which Buyer or any of their properties are bound which would
have a Material Adverse Effect, (iii) constitute a violation of any law,
regulation, order, writ, judgment, injunction or decree applicable to any Seller
which would have a Material Adverse
29
Effect, or (iv) result in the creation of any lien, charge or encumbrance upon
the properties or assets of Sellers which would have a Material Adverse Effect.
5.3 Notice of Subsequent Event or Discovery. Prior to Closing, each Party
shall give the other Parties hereto prompt notice of its discovery of any event
or condition which has the effect of making any of such Party's representations
and warranties contained in this Section 5 materially inaccurate.
6. Operation of the Hotels Pending Closing.
From the Effective Date until Closing, Sellers shall cause the Hotels to
operate in the Ordinary Course and shall not (except with Buyer's prior written
approval) cause, approve or permit any material change in the operations of any
Hotel, including without limitation:
(a) Reduction in Inventories to levels below those maintained at the
applicable Hotel during the preceding 12 months (taking into account any
seasonal fluctuations).
(b) Material changes in current levels of guest, room and other
services at the applicable Hotel.
(c) Any material reduction in current sales and marketing efforts
with respect to the applicable Hotel.
(d) Alterations or other material changes in the applicable Hotel
Improvements except for (A) Scheduled Capital Expenditures, (B) alterations or
improvements required to avoid or cure a violation of applicable Law and (C)
alterations that in the aggregate cost no more than $100,000 and do not result
in the elimination of any guest room, conference room or other revenue
generating facility within any Hotel.
(e) Deferral of scheduled or routine maintenance, repair and
replacement of any Hotel Improvements and FF&E.
(f) The making, modification, cancellation or termination of any
Lease, Contract or other agreement materially affecting the operation, revenues
or expenses of any Hotel (other than termination of Excluded Contracts).
(g) Cancellation of or reduction in the amount or scope of coverage
under any insurance currently maintained with respect to any Hotel.
(h) Cancellation or surrender of any existing Permit or Liquor
License.
(i) Creation of any Lien on any Seller's title to any Hotel.
(j) Any material reduction in staff at any Hotel or the transfer of
the general manager, any department head or any other executive staff.
(k) Filing of any notice of protest or appeal against, or
commencement of any proceeding to recover, any Property Tax assessments against
any Hotel.
30
(l) Any other transaction or change with respect to any Hotel which
varies materially from the Ordinary Course.
Sellers shall cause the Manager to keep the Hotels' respective management
positions fully staffed and management personnel fully involved in the direction
of Hotel operations until Closing.
7. Other Agreements.
7.1 Liquor License(s) and Inventory.
(a) Application for New Licenses. Buyer shall be responsible, at its
expense, for preparing, filing and prosecuting all applications before
Governmental Authorities for the transfer or re-issuance of the Liquor Licenses
at the Hotels to Buyer (or Buyer's nominee) following Closing. Sellers shall
cooperate with Buyer in such applications as Buyer may reasonably request. If
Buyer elects to engage as its legal counsel in prosecuting any such applications
the counsel used by Sellers or any Liquor Licensee in connection with obtaining
or maintaining the existing Liquor Licenses, Sellers hereby consent (and, if
necessary, shall cause the applicable Liquor Licensee to consent) to Buyer's
engagement of such counsel and shall waive (and cause the applicable Liquor
Licensee to waive) any conflict of interest which may arise between such
counsel's representation of Buyer and the prior or current representation of any
Seller or any Liquor Licensee.
(b) Transfer of Liquor Inventory. Notwithstanding any other provision
of this Agreement, the Liquor Inventory shall be sold and transferred to Buyer
(or Buyer's nominee) only in such manner as complies with applicable alcoholic
beverage control Laws and the terms of the Liquor Licenses. If applicable Law
requires or practically necessitates that the Liquor Inventory of any Hotel (and
any other aspects of the Liquor Operations of any Hotel) be transferred in a
transaction separate and apart from the sale and purchase of such Hotel, then:
(A) such Liquor Inventory shall be excluded from the Inventory sold as part of
such Hotel under this Agreement and Sellers and Buyer shall reduce the Purchase
Price by the book value of such Liquor Inventory, (B) Buyer shall in good faith
negotiate with the applicable Liquor Licensee (and Sellers, if not such Liquor
Licensee, shall cause such Liquor Licensee to negotiate in good faith with
Sellers) a separate agreement and escrow incorporating the provisions of Section
7.1(c), to close concurrently with Closing or as soon thereafter as practicable,
for the sale of such Liquor Inventory and the transfer of such Liquor Operations
to Buyer (or Buyer's nominee), at a price equal to the book value of the Liquor
Inventory, and (C) the conclusion of such separate agreement, in a form and
substance reasonably satisfactory to Buyer, shall be a condition to Buyer's
obligation to close hereunder.
(c) Transitional Arrangements. If Buyer has not by Closing obtained
the necessary government approvals for transfer or re-issuance of any Liquor
License, then provided that Buyer has by Closing filed all necessary
applications for a new or transferred Liquor License (other than with respect to
the Liquor License applicable to the Billings, Montana Holiday Inn, which the
Parties agree shall not be subject to the foregoing proviso), at Buyer's request
Sellers shall cause the current holder of such Liquor License to enter into a
lease, concession agreement or other arrangement, for a term of 180 days (or
shorter, as Buyer may elect) and on other
31
commercially reasonable terms (but not including any rent, license fee or other
similar fee payable by Buyer whether or not the same is commercially
reasonable), under which the applicable Liquor Operations, together with the
areas within the applicable Hotel described or otherwise identified in or with
respect to such Liquor License as licensed for the applicable Liquor Operations
(the "Licensed Premises"), would continue to be operated under the now-existing
Liquor License until the time such approvals had been granted and Buyer (or its
designee) is able lawfully to take over the Licensed Premises and applicable
Liquor Operations or expiration of the term whichever first occurs. To the
maximum extent permitted by applicable Laws, any such arrangement shall be
structured so as to preserve to Buyer the economic or other benefits of the
transactions contemplated by this Agreement and, in any event, so as to hold
Sellers and the holder of the existing Liquor License harmless from any loss,
liability or expense related to the licensed activities after Closing.
Notwithstanding the foregoing, upon the request of Buyer, Sellers agree to
transfer or cause the permanent transfer of all outstanding shares or other
equity interests in the Billings Liquor Licensee to Buyer (with customary
warranties and representations concerning the Billings Liquor Licensee in favor
of Buyer) for no additional consideration and the Parties shall allocate a
portion of the Purchase Price to such shares or other equity interests in
accordance with Section 3.1. The rights of Buyer expressed in the previous
sentence shall be in addition to and not to the exclusion of any other rights
expressed in this Section 7.1.
7.2 Property of Guests. All baggage or other items checked or left in the
care of Sellers, and any items in the "Lost and Found Bin" of any Hotel will be
listed in an inventory, prepared in duplicate and signed by representatives of
Sellers and Buyer on the Closing Date. Buyer will be responsible from and after
the Closing for all property so listed and shall Indemnify Sellers, from and
against any and all Claims arising out of the subsequent loss of or damage to
such listed property. Sellers shall Indemnify Buyer from and against any and all
Claims arising out of any loss of or damage to property of guests at any Hotel
prior to the Closing or not so listed in such inventory. Sellers and Buyer shall
use reasonable efforts to have Hotel guests who have left items in any of the
Hotels' safe deposit boxes (not including in-room safes) confirm on the Closing
Date that no such items are missing, but no Party shall be deemed liable for any
guest Claim made after the Closing Date with respect to items allegedly left in
a Hotel safe deposit box before Closing merely because such items could not be
listed on the above-described inventory.
7.3 Retention of Funds. On and after Closing, Sellers shall collectively
retain not less than $4,000,000 in unencumbered funds in cash (the "Retained
Funds Obligation"). In the absence of any claim for indemnification delivered in
writing by Buyer pursuant to Section 13, the Retained Funds Obligation shall
xxxxx with respect to $1,000,000 of unencumbered funds in cash on each of the
ninetieth (90th), one hundred eightieth (180th), two hundred seventieth (270th)
and three hundred sixty-fifth (365th) Day following the Closing Date. If Buyer
shall make any claim for indemnification pursuant to Section 13 in a specified
dollar amount prior to the abatement in full of the Retained Funds Obligation,
then the Retained Funds Obligation shall not further xxxxx with respect to such
specified dollar amount following the date on which such claim was made until
such time as such claim shall have been finally resolved. If Buyer shall make
any claim for indemnification pursuant to Section 13 in other than a specified
dollar amount, then the Retained Funds Obligation shall not further xxxxx
following the date on which such claim was made until such time as all claims
duly made by Buyer for indemnification
32
pursuant to Section 13 shall have been finally resolved. Following the final
resolution and satisfaction of all of Buyer's claims for indemnification
pursuant to Section 13, the Retained Funds Obligation shall continue to xxxxx in
accordance with this Section 7.3, and, if the date of such final resolution and
satisfaction shall be on or after the first anniversary of the Closing Date, the
Retained Funds Obligation shall be abated in full. Buyer agrees to act in good
faith and to specify a dollar amount for claims that are reasonably susceptible
to such specification in connection herewith. Any disputes pursuant to or
concerning this Section 7.3, shall be subject to the dispute resolution
provisions set forth in Section 11.
7.4 2004 Interim Financial Statements. Prior to the Newco IPO Closing,
Sellers shall use commercially reasonable efforts to cause unaudited combined
financial statements of Sellers for periods following the Balance Sheet Date to
be delivered to Buyer as required in connection with the Newco IPO, in a timely
manner.
7.5 Further Assurances. At any time after the Closing Date, Sellers, on
the one hand, and Buyer, on the other hand, shall promptly execute, acknowledge
and deliver any other assurances or documents reasonably requested by Buyer or
Sellers, as the case may be, reasonable or necessary for them or it to satisfy
their or its respective obligations hereunder or obtain the benefits
contemplated hereby. The Sellers acknowledge and agree that during and after the
Newco IPO, Sellers may be required to furnish information concerning Sellers,
the Hotels and the historical operations of the Hotels. Sellers further agree to
provide customary management representation letters to Newco's independent
public auditors in connection with Securities Act and Securities Exchange Act
filings of Newco as reasonably requested by Buyer or Newco from time to time.
7.6 Government Approvals and Third Party Consents. Buyer and Sellers will
complete all necessary governmental and regulatory filings that are required to
be filed in connection with the transactions described herein. Buyer and Sellers
shall cooperate and coordinate their activities with respect to all filings and
required third party consents. Buyer, on the one hand, and Sellers, on the other
hand, will each pay half of all applicable governmental or regulatory filing
fees (other than such governmental or regulatory filing fees that are incurred
solely as a result of the Newco IPO, including Securities and Exchange
Commission, "Blue Sky," National Association of Securities Dealers or stock
exchange fees, which fees shall be solely the responsibility of Buyer). Each
Party will pay its own expenses in preparing such filings and obtaining such
approvals. Prior to Closing, Sellers shall use commercially reasonable efforts
to obtain all necessary third party consents, at their cost, and without any
change to the terms of any material agreement to which any Seller is a party or
which materially affects any of the Hotels.
7.7 Exclusivity. Except with respect to this Agreement and the
transactions contemplated hereby, until the earlier of the Closing Date or the
date that this Agreement is terminated in accordance with Section 14, Sellers,
Manager and their respective affiliates directly or indirectly through their
respective employees, agents and representatives shall not, (a) initiate,
solicit or seek, directly or indirectly, any inquiries or the making or
implementation of any proposal or offer with respect to a merger, acquisition,
consolidation, recapitalization, liquidation, dissolution or similar
transactions involving, or any purchase of all or any portion of the assets
(except as otherwise expressly permitted hereunder) or any equity securities of,
any
33
Seller (any such proposal or offer being hereinafter referred to as an
"Acquisition Proposal"), or (b) engage in any negotiations concerning, or
provide any confidential information or data to, or have any substantive
discussions with, any person relating to an Acquisition Proposal.
8. Prorations, Credits and Other Adjustments.
At Closing, the Parties shall make the following prorations and other
adjustments, with the net amount consequently owing to Sellers or Buyer to be
added to or subtracted from the proceeds of the Purchase Price payable to
Sellers at Closing as applicable.
8.1 Proration of Taxes. All real property ad valorem taxes and all
personal property ad valorem taxes which are assessed or assessable against any
of the Hotel Parcels, Hotel Improvements, FF&E and Inventory ("Property Taxes")
for a period during which Closing occurs shall be prorated between Buyer and
Sellers as of the Closing Date, based on the most recent tax bills then
available. Sellers shall remain responsible for all Property Taxes assessed for
periods ending prior to Closing (whenever assessed or billed), as well as for
all Hotel Excise Taxes accruing prior to Closing; and Buyer shall be responsible
for all Property Taxes assessed for periods on and after Closing, as well as for
all Hotel Excise Taxes accruing on and after Closing.
8.2 Proration of Expenses. The following items of expense with respect to
each portion or aspect of each Hotel shall be prorated between Sellers and Buyer
as of the Closing Date:
(a) Periodic charges under Assumed Contracts (such as monthly rents
or fixed periodic charges), but not charges made on a per-order or per-call
basis.
(b) Utility charges (but excluding any utility deposits).
(c) Employee Liabilities for the pay period(s) during which Closing
occurs, except to the extent that Sellers are required by applicable Law or
otherwise elect to determine and themselves pay such liabilities accrued through
the Day preceding Closing.
(d) All other Hotel operating expenses of a strictly periodic nature
(and not based upon specific orders for goods or services).
Notwithstanding any other provision of this Agreement to the contrary, no
prorations shall be made or credit given for (A) capital costs, (B) purchase
orders for any Inventory, and (C) except as expressly provided for elsewhere in
this Section 8.2, Hotel operating expenses of a non-periodic nature, all of
which shall be the responsibility of the Party incurring the cost or expense in
question, regardless of when the goods or services in question are received. To
the extent practicable, in lieu of prorating the charges for any metered utility
service, Sellers shall arrange for the applicable utility to read the meter for
each Hotel as early as possible on the Closing Date and to render a final xxxx
to Sellers based on such reading.
34
8.3 Hotel Revenues.
(a) Guest Ledger. The balance (less any contested charges) of the
open and unpaid account ("Guest Ledger Account") for each person who is a guest
at any Hotel on the Day immediately preceding the Closing Date shall be prorated
between Sellers and Buyer as follows:
(1) All room revenue posted for all Days preceding the Closing
Date shall be credited to Sellers.
(2) All room revenue posted for all Days on or after the Closing
Date shall belong to Buyer.
All Guest Ledger Accounts shall be assigned to Buyer at Closing, and Sellers
shall receive a proration credit equal to their net aggregate prorated amount
under this Section 8.3(a).
(b) Rents and Other Operating Revenues. Monthly rents and other fixed
periodic payments under the Leases and any other operating revenues not
otherwise provided for in this Section 8.3, shall be prorated between Buyer and
Sellers as of Closing; but no proration shall be made of any rent or other
revenue item which is overdue as of the Closing Date until such rent or other
revenue item is actually received and Sellers shall be responsible for pursuing
the payment thereof.
(c) Other Receivables. Except for Guest Ledger Accounts which are
assigned to Buyer pursuant to Section 8.3, Sellers shall assign to Buyer all
Accounts as of Closing, other than the following ("Excluded Receivables"): (i)
Accounts that have been disputed in writing by the account debtor or as to which
the account debtor has otherwise declared an intention not to pay, (ii) Accounts
from any person who is the subject of a bankruptcy case or other insolvency
proceeding or who has declared in writing an inability to pay and (iii) Accounts
set forth on Schedule 8.3(c). Sellers shall receive a proration credit equal to
99% of the face amount of all Accounts assigned to Buyer pursuant to this
Section 8.3(c) and retain all Excluded Receivables.
8.4 Hotel Payables. At Closing, Buyer shall receive a proration credit
equal to the excess of (A) the aggregate estimated amount of all Hotel Payables
in the Preliminary Statement over (B) Buyer's prorated share of such Hotel
Payables under Section 8.2, and Buyer shall assume the obligation to satisfy
Hotel Payables (1) included in such estimate (as evidenced by a schedule which
Sellers shall prepare and submit to Buyer as part of the Preliminary Statement)
or (2) which otherwise are identified within the 120-Day period following
Closing. After Closing, before paying any amount invoiced or otherwise claimed
by a third party to be due with respect to the operations of any Hotel prior to
Closing which is not included on such schedule (or is claimed in an amount
larger than that shown on such schedule), Buyer shall first submit such invoice
or claim to Sellers. Unless Sellers, within 10 Days after receiving such
submission, object to such invoice or claim (thereby making it a Disputed
Payable), Buyer may pay the same and take a credit for such payment on the Final
Statement. Sellers shall remain responsible for all Disputed Payables and for
all Hotel Payables which are neither included on such schedule or identified
within the 120-Day period following Closing.
35
8.5 Other Credits to Buyer.
(a) Reservation Deposits. Buyer shall receive a proration credit
equal to the aggregate amount of all outstanding Reservation Deposits with
respect to each Hotel.
(b) Vouchers. Buyer shall receive a credit for each outstanding
Voucher, in the amount of the face value of such Voucher if issued in a specific
dollar amount, in an amount equal to the average rack rates at the applicable
Hotel in excess of payment accompanying the Voucher if issued for free or
reduced rate rooms, and otherwise in the amount of such Voucher's estimated
retail value (if issued for food, beverages, other merchandise or services),
including sales and other excise taxes which Buyer will be obligated to pay in
connection with honoring such Voucher and Buyer shall honor each Voucher for
which it receives a credit hereunder.
(c) Security Deposits. Buyer shall receive a credit equal to the
outstanding balance of all security deposits under the Leases.
(d) Employee Leave. Buyer shall receive a credit equal to the total
value of Employee Leave accrued with respect to each Continuing Employee as of
the Closing Date, to the extent any such Employee Leave is not otherwise
prorated pursuant to Section 8.2(c) and Sellers shall have no further obligation
with respect to Employee Leave so credited.
(e) Additional Credit. Buyer shall receive a credit in an amount
equal to the sum of (i) fifty percent (50%) of room revenue posted for the Day
preceding the Closing Date plus (ii) $4 per occupied room as of midnight on the
Day preceding the Closing Date.
8.6 Other Credits to Sellers.
(a) Cash Banks. Sellers shall receive a proration credit equal to the
aggregate balance of all Hotel Cash Banks as of Closing.
(b) Utility Deposits; Loan Impounds and Debt Service. Sellers shall
receive a credit equal to the total amount of any utility deposit, impound
account with respect to any Lien, or any interest, prepayment premium or other
payments on any Lien, to the extent appurtenant to the Hotels or the Assumed
Loan Agreements, all of which shall be assigned to Buyer as of Closing.
(c) Surplus Liquor and Certain Consumables. Sellers shall receive a
credit equal to the excess (if any) of (1) the book value as of the Closing Date
of the Liquor Inventory and the food and beverage inventory of the Hotels, in
the aggregate, transferred to Buyer at the Closing, over (2) the average book
value of the Liquor Inventory and the food and beverage inventory of the Hotels,
in the aggregate, during the twelve-month period immediately preceding Closing.
8.7 Regarding Hotel Prorations Generally. Unless this Section 8 expressly
provides otherwise: (A) all prorations hereunder with respect to the Hotels
shall be made as of 12:00:01 a.m., local time (for the applicable Hotel), on the
Closing Date, (B) all prorations shall be made on an actual daily basis, and (C)
for purposes of such prorations, all items of revenue
36
and expense with respect to the Hotels' operations shall be classified and
determined in accordance with the Uniform System of Accounts.
8.8 Preliminary Closing Statement. Beginning as close to the anticipated
Closing Date as practicable, Sellers shall, in consultation with Buyer and with
Buyer's reasonable cooperation, cause to be prepared a prorations and credit
statement (the "Preliminary Statement") which shall reflect all of the
prorations, credits and other adjustments in payment at Closing required under
this Section 8 or under any other provision of this Agreement. As soon as the
Parties have agreed upon the Preliminary Statement, they shall jointly deliver a
mutually signed copy thereof to Escrow Agent. To the extent the Parties are
unable to agree by Closing on any item on the Preliminary Statement, Sellers'
estimation of such item shall be used and such item shall be finally resolved on
the Final Statement pursuant to Section 11.
9. Conditions to Closing.
9.1 In Buyer's Favor. In addition to the conditions specified in
Section 4, Buyer's obligation to close Escrow shall be subject to timely
satisfaction of each of the following conditions:
(a) Performance of Sellers' Obligations. Performance by Sellers of
all of their material obligations under this Agreement to be performed at or
before Closing including, without limitation, the satisfaction of the
requirements of Section 10.3.
(b) Accuracy of Warranties and Representations. The accuracy, as of
Closing, of each of the warranties and representations set forth in Section 5.1
that are qualified as to materiality and the accuracy in all material respects,
as of Closing, of each of the warranties and representations set forth in
Section 5.1 that are not so qualified as to materiality.
(c) Newco IPO Closing. The Newco IPO Closing shall have occurred.
(d) Satisfactory Title Policies. Issuance at Closing of the Title
Policy, as prescribed in the definition of "Title Policy" in Section 1.
(e) Consent to Assignment of Hotel Management Agreements. Sellers'
delivery to Buyer at or prior to Closing of the consent of the Manager under
each Hotel Management Agreements to the assignment of the Sellers' right, title
and interest in such Hotel Management Agreements (without material modification
thereof) (the "Hotel Management Agreements Consent"), duly executed and
acknowledged by the Manager in a form reasonably satisfactory to Buyer.
(f) Estoppel Certificate for Hotel Management Agreements. Sellers'
delivery to Buyer at or prior to Closing of a Hotel Management Estoppel
Certificate from the Manager under the Hotel Management Agreements.
(g) Consent to Assignment of Assumed Loan Agreements. Sellers'
delivery to Buyer at or prior to Closing of the consent of each of the Secured
Lenders to the assignment of the Sellers' right, title and interest in the
Assumed Loan Agreements (without material
37
modification thereof) (the "Assumed Loan Agreement Consents"), duly executed and
acknowledged by the Secured Lender in a form reasonably satisfactory to Buyer.
(h) Estoppel Certificate for Loan Agreements. Sellers' delivery to
Buyer at or prior to Closing of an Assumed Loan Estoppel Certificate from the
Secured Lender under the Assumed Loans.
(i) Consents to Assignment of Offsite Rights. With respect to each of
the Offsite Rights (if any) the transfer of which to Buyer or Buyer's nominee
requires, in Buyer's good faith judgement, the consent of the grantor of such
rights, Sellers' delivery to Buyer at or prior to Closing of such consent
("Offsite Rights Consent"), duly executed and acknowledged by the grantor of
such rights, in a recordable form reasonably satisfactory to Buyer. If requested
by the grantor as a prerequisite for giving such consent, Buyer (or its nominee)
shall concurrently execute and deliver to such grantor a recordable instrument
(to be effective only upon Closing), in such form as the grantor may reasonably
require, agreeing to assume all obligations and liabilities of the grantee
accruing under such Offsite Rights from and after the assignment thereof to
Buyer (or such nominee).
(j) Estoppel Certificates for Offsite Rights. With respect to each of
the Offsite Rights (if any) for which Buyer requests the same, Sellers' delivery
to Buyer of a certificate duly executed by the grantor of such rights ("Offsite
Rights Estoppel Certificate"), in form and substance reasonably satisfactory to
Buyer, (A) addressed to Buyer and dated no earlier than 30 Days prior to the
Closing Date, (B) identifying such Offsite Rights and stating that the agreement
or other instrument evidencing them is in full force and effect (with only such
amendments and other modifications as may be identified in such certificate) and
that, to the grantor's knowledge, no event of default (or event or condition
which with notice, passage of time or both will be an event of default) exists
on the part of the grantee, (C) acknowledging that Buyer and its successors,
assigns and encumbrancers are entitled to rely upon such certificate in
connection with any purchase or financing of the applicable Hotel, and (D)
signed by an officer or other duly authorized representative of the grantor;
provided, that, as promptly as practicable following the Effective Date, Buyer
shall have identified each of the Offsite Rights (if any) for which it will
request an Offsite Rights Estoppel Certificate and shall prepare, and submit to
Sellers the desired form of such certificate. If Buyer has determined that an
Offsite Rights Consent is also required with respect to such Offsite Rights,
Sellers may combine the two documents in one.
(k) Consents to Other Assignments. Where required under the terms of
such agreements, the consent of the non-assigning party to each Contract, Lease
and Hotel License Agreement which Buyer is obligated, or elects, to accept under
this Agreement, without requirement that Buyer pay any amount, incur any
additional obligation or liability, agree to any material change in the assigned
contract or waive any rights or benefits thereunder, in order to obtain such
consent.
(l) Tenant Estoppel Certificates. Delivery to Buyer on or before the
Approval Date of a Tenant Estoppel Certificate with respect to each Lease in
force as of Closing, executed by the tenant thereunder without material
exception, reservation or qualification; provided, that, if Sellers are unable
to obtain a Tenant Estoppel Certificate from any tenant under any Lease
38
after using all commercially reasonable efforts in connection therewith, Sellers
may deliver a certificate substantially in the form of a Tenant Estoppel
Certificate, duly executed by Sellers.
(m) Physical Condition. No material alteration or other change in the
physical condition, structure or appearance of any Hotel having occurred since
the Effective Date, normal wear and tear, damage by Casualty and Scheduled
Capital Expenditures excepted. For purposes of this Section 9.1(m), an
alteration or other change shall be deemed material if its cost, together with
other alterations that would be otherwise be immaterial, exceeds $250,000 or if
it results in the elimination of any guest room, conference room or other
revenue-generating facility within any Hotel.
(n) Liquor License. Buyer or its agent having either obtained all of
the governmental approvals required for transfer or reissuance of all Liquor
Licenses to Buyer (or Buyer's nominee) upon Closing, or for the lawful
continuation of all Liquor Operations by Buyer (or Buyer's nominee) or its agent
pending final approval of such transfer or reissuance, or arrangements
reasonably satisfactory to Buyer having been made pursuant to Section 7.1(c) for
the lawful continuation of all applicable Liquor Operations pending approval of
such transfer or reissuance.
9.2 In Sellers' Favor. The obligation of Sellers to close Escrow shall be
subject to timely satisfaction of each of the following conditions:
(a) Performance of Buyer's Obligations. Performance by Buyer of all
of Buyer's material obligations under this Agreement to be performed at or
before Closing including, without limitation, the satisfaction of the
requirements set forth in Section 10.4.
(b) Accuracy of Warranties and Representations. The accuracy (without
reference to the state of Buyer's Knowledge), as of Closing, of each of the
warranties and representations of Buyer set forth in Section 5.2 that are
qualified as to materiality and the accuracy in all material respects (without
reference to the state of Buyer's Knowledge), as of Closing, of each of the
warranties and representations set forth in Section 5.2 that are not so
qualified as to materiality.
(c) Release of Sellers. The Manager shall have released Sellers and
their affiliates from any liability associated with an early termination of the
Hotel Management Agreements by Buyer following Closing, Buyer having agreed to
assume such liability if required by Manager in connection with its release of
Sellers.
9.3 Pre-Closing Damage or Destruction.
(a) Termination Rights. If, prior to Closing, all or a material part
of the Hotel Premises of any Hotel are damaged, destroyed or taken by eminent
domain (a "Material Casualty"), Buyer shall have the right, at its election, to
terminate this Agreement, by written notice given to Sellers on or before the
Closing Date. If a Material Casualty occurs fewer than ten Business Days before
the Closing Date, notwithstanding any other provision hereof, Buyer shall have
the right to extend the Closing Date until the 15th Business Day after the
occurrence of such Material Casualty in order to make the election permitted by
this Section 9.3(a).
39
(b) If No Termination.
(1) If, prior to Closing, any part of the Hotel Premises of any
Hotel is damaged or destroyed (a "Casualty"), and Buyer either does not have or
elects not to exercise the right under Section 9.3(a) to terminate this
Agreement, this Agreement shall continue in force and, upon Closing, Seller
(subject to the following proviso) shall be entitled to all insurance proceeds,
or other amounts that have been paid or may thereafter be payable to or for the
account of any Seller in connection with such Casualty ("Proceeds," including
any amounts recoverable under any rent loss or business interruption policy to
the extent applicable to periods prior to Closing); provided, that, Buyer shall
be entitled to any amounts recoverable under any rent loss or business
interruption policy to the extent applicable to periods on and after Closing and
Seller shall assign the right to receive such amounts to Buyer at Closing. At
Closing, Buyer shall receive a credit against the Purchase Price equal to the
amount of the reasonably estimated cost of repairing, restoring or replacing
such Casualty, as determined by a contractor reasonably selected by Buyer, which
contractor is not an Affiliate of Buyer (an "Independent Contractor"). If any
Casualty shall be partially repaired, restored or replaced as of the Closing
Date, Buyer shall be entitled to the reasonably estimated costs of completing
such repair, restoration or replacement, as determined by an Independent
Contractor, and Sellers shall assign to Buyer any contracts for such repair,
restoration or replacement as Buyer shall elect prior to Closing.
(2) If, prior to Closing, any part of the Hotel Premises of any
Hotel is taken by eminent domain (a "Condemnation"), and Buyer either does not
have or elects no to exercise the right under Section 9.3(a) to terminate this
Agreement, this Agreement shall continue in force and, upon Closing, Buyer shall
be entitled to all condemnation awards that have been paid or may thereafter be
payable to or for the account of any Seller in connection with such
Condemnation. At Closing, Buyer shall receive a credit against the Purchase
Price equal to the amount of any award for such Condemnation already received by
any Seller.
(c) Materiality. For purposes of this Section 9.3, a Material
Casualty shall be deemed to affect a material part of any Hotel Premises if: (A)
such Material Casualty results in the taking or other permanent loss of any of
the applicable Hotel Improvements, or of any parking area at or access way to
the applicable Hotel or (B) such Material Casualty results in damage which will
cost more than $5,000,000 or require more than 90 Days to repair or replace.
10. Closing.
10.1 Closing Date; Location. Concurrently with the Newco IPO Closing, the
parties shall take all actions necessary to effect the Closing. The Closing
shall take place at the offices of Xxxxxx, Xxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxxx,
Xxx Xxxx, XX 00000 unless otherwise agreed by the Parties. The date on which the
Closing shall occur shall be referred to as the "Closing Date."
10.2 Pro Forma Title Policies. To facilitate Closing, the Parties shall
direct the Title Company to prepare and deliver to Sellers and Buyer, at least
five Business Days before the Closing Date, a pro forma of the Title Policies
for each Hotel, reflecting the substantive form in which the Title Company then
anticipates issuing such policy as of Closing.
40
10.3 Sellers' Deliveries.
(a) Pre-Closing. On or before the date that is 15 Business Days prior
to the Closing Date (the "Escrow Delivery Date"), Sellers shall deliver or cause
to be delivered to Escrow Agent:
(1) The Deed and every other Transfer Instrument (if any)
relating to each Hotel that Buyer wishes to be recorded (including, if Buyer so
elects, any Offsite Rights Assignment), all duly executed and acknowledged by
the applicable Sellers, for recording at Closing in the official land records of
the county where the applicable Hotel is located.
(2) A counterpart of the FIRPTA Certificate and any analogous
state-specific form, duly executed by all Sellers.
(3) Each of the items specified in Section 10.3(a)(4).
(4) Such other documents as the Escrow Agent or the Title
Company may reasonably require from Sellers in order to effect Closing in
accordance with this Agreement (including, without limitation, owner's
affidavit, gap indemnity, declarations or affidavits of value, certificates of
good standing, incumbency certificates, certified copies of Sellers' governing
and authorization documents and any required tax waivers).
(b) At Closing. At Closing, Sellers shall deliver or cause to be
delivered to Buyer, at the Place of Closing (except as otherwise specified in
Section 10.3(a) or below):
(1) Two counterparts of each of the Transfer Instruments (except
those delivered to Escrow Agent pursuant to Section 10.3(a), which shall be
deemed constructively delivered to Buyer at Closing), all duly executed and (in
the case of the Tenant Leases Assignment) acknowledged by Sellers.
(2) Two counterparts of the Sellers' Closing Certificate,
executed by each Seller.
(3) A counterpart of the FIRPTA Certificate and any analogous
state-specific form, duly executed by each Seller.
(4) The Originals (except that Originals of Offsite Rights,
Contracts, Leases and Hotel Records, to the extent at Closing located in the
appropriate place in the applicable Hotel, shall be deemed delivered with
possession of such Hotel).
(5) Each Assumed Loan Assignment and Consent Agreement, Hotel
Management Assignment and Consent Agreement, Offsite Rights Consent, Offsite
Rights Estoppel Certificate, Tenant Estoppel Certificate and other consent to
assignment of Contracts obtained by Sellers, to the extent not previously
delivered to Buyer.
(6) For each Lease, a notice from the applicable Seller to the
tenant thereunder, in the form attached hereto as Exhibit S, advising of the
sale of the applicable Hotel to Buyer or Buyer's nominee.
41
(7) Any other instrument or other document the delivery of which
at Closing is specified elsewhere in this Agreement to be an obligation or
condition to be satisfied by Sellers.
10.4 Buyer's Deliveries.
(a) Pre-Closing. On or before the Closing Date, Buyer shall deliver
to Escrow Agent:
(1) Good and immediately available funds in an amount equal at
least to the sum of (A) the Purchase Price, plus (B) the total amount of
Assumption Fees, plus (C) Sellers' Extraordinary S-11 Costs not in excess of
$25,000, plus (D) Buyer's share of Closing costs to be paid through Escrow, plus
or minus (E) the net amount owing Sellers or Buyer (as the case may be) under
Section 7.1 (as shown by the Preliminary Statement).
(2) Any Transfer Instrument requiring Buyer's signature to be
recorded at Closing, duly executed and acknowledged by Buyer (or Buyer's
nominee).
(3) Each of the items specified in Section 10.4(b).
(4) Such other documents as the Escrow Agent or the Title
Company may reasonably require from Buyer in order to effect Closing in
accordance with this Agreement (including, without limitation, affidavits or
declarations of value, certificates of good standing, incumbency certificates
and certified copies of Buyer's governing and authorization documents).
(b) At Closing. At Closing, Buyer shall deliver to Sellers, at the
Place of Closing (except as otherwise specified in Section 10.4(a)):
(1) Two counterparts of each of the Tenant Leases Assignments,
the Contract Assignments, the General Assignments and each Offsite Rights
Assignment (if any), duly executed by Buyer.
(2) Any other instrument or other document the delivery of which
at Closing is specified elsewhere in this Agreement to be an obligation or
condition to be satisfied by Buyer.
10.5 Closing Costs.
(a) Paid by Sellers. Sellers shall pay:
(1) All charges for the Title Reports, the Surveys, and the
Title Policies, except charges for any endorsements other than those specified
in clauses (a) through (g) in the definition of "Title Policy" (unless obtained
to cure an Objectionable Title Matter).
(2) All transfer taxes, stamp taxes, documentary taxes, sales
taxes and similar excises imposed on the sale, conveyances, transfers and
assignments under this Agreement.
42
(3) All recording and filing fees and charges incurred in
connection with the recording or other filing of the Transfer Instruments.
(4) One-half of Escrow Agent's fees and expenses for
administering Escrow.
(5) Any brokerage commission or other compensation due Broker in
connection with the transactions contemplated by this Agreement.
(b) Paid by Buyer. Buyer shall pay:
(1) Any charges for endorsements to the Title Policies other
than those specified to be paid by Sellers in Section 10.5(a)(1).
(2) One-half of Escrow Agent's fees and expenses for
administering Escrow.
(c) Other Closing Costs. Any other charges and expenses incurred
in effecting Closing shall be evenly allocated between the Sellers on the one
hand and the Buyer on the other hand.
10.6 Completion of Closing. Closing shall be effected as follows:
(a) At such time as the Transactors and Counsel have confirmed (A)
the delivery to Escrow Agent of each of the items specified in Sections 10.3(a)
and 10.4(a) and (B) tender of delivery of each of the items specified in
Sections 10.3(b) and 10.4(b) and provided Escrow Agent has not advised Buyer of
any apparent obstacle to issuing the Title Policies as of Closing, the Parties
through their respective Transactors or Counsel shall instruct Escrow Agent or
the Title Company to record the Deeds and any other Transfer Instruments to be
recorded in the appropriate place and delivering the rest of Sellers' Closing
Documents to Buyer and Buyer's Closing Documents to Sellers.
(b) Escrow Agent shall make the following disbursements from Escrow
as soon as the Title Company has irrevocably committed to issue the Title
Policies to Buyer and/or Buyer's nominees (as the case may be):
(1) Disburse to the Secured Lender the amount which shall
satisfy and pay in full all Assumption Fees under all Secured Loans to which
such Secured Lender is a party.
(2) Pay Closing costs specified in Section 10.4(b)(2).
(3) Disburse all excess funds as directed by Buyer.
Disbursements to a Party shall be made by wire transfer of current funds to an
account at a commercial bank within the United States, as designated to Escrow
Agent by such Party or its Counsel; but if no such account has been so
designated to Escrow Agent by the Business Day immediately following the Closing
Date, Escrow Agent may instead disburse by (A) its own check, for any amount of
$10,000 or less or (B) cashier's check, for any amount exceeding
43
$10,000, dispatched on the Closing Date by overnight courier service to the
applicable Party at the address for notices to such Party hereunder.
10.7 Escrow and Recording Instructions. This Agreement shall also serve as
instructions to Escrow Agent regarding the recording of instruments and
disbursement of funds from Escrow; but the Parties shall jointly execute and
deliver to Escrow Agent or the Title Company such supplementary or general
instructions as may be required under any other provision of this Agreement or
reasonably requested by Escrow Agent or the Title Company. If there is any
conflict between supplementary and general instructions delivered pursuant to
this Section 10.7 and the provisions of this Agreement, the latter shall control
as between the Parties. All subsequent instructions to Escrow Agent shall be in
writing and Escrow Agent shall not be obligated to rely or act upon any oral
instructions, except that authorization to close may be given orally (including
by telephone) so long as such authorization is not conditioned upon compliance
with other oral instructions. The Parties may deliver instructions to Escrow
Agent by fax, without need to confirm by delivery of duplicate instructions in
any other manner.
10.8 Delivery of Possession. Sellers shall cause possession of the Hotels
to be delivered to Buyer immediately upon Closing, free and clear of all leases,
tenancies and occupancies except for (A) the rights of the tenants under the
Leases in force as of Closing, (B) Hotel guests, (C) rights of parties under
Assumed Contracts and (D) possessory rights and interests included among the
Permitted Exceptions.
10.9 Procedure for Termination of Escrow. Upon any termination of this
Agreement, Sellers and Buyer shall each promptly give Escrow Agent written
instructions to cancel Escrow and disburse all funds and documents (if any) then
held in Escrow in accordance with the provisions of this Agreement. If the
Parties give Escrow Agent conflicting instructions regarding cancellation of
Escrow or disposition of any funds or documents in Escrow, or if one Party gives
Escrow Agent instructions to terminate Escrow and the other Party fails to give
any instruction, then:
(a) Escrow Agent shall promptly notify each Party in writing of such
conflicting instructions or failure by one Party to give instructions and
request that the Parties deliver joint written instructions regarding Escrow.
(b) Where one Party has given instructions to terminate Escrow and
the other has failed to give any instructions, Escrow Agent shall comply with
instructions given by the first Party if the second Party has not given Escrow
Agent instructions within five (5) Business Days after Escrow Agent's notice of
such failure.
(c) Where the Parties have given conflicting instructions, Escrow
Agent shall take no action to terminate Escrow or disburse funds or documents
out of Escrow except pursuant to further, joint instructions from the Parties or
a final court order or judgment or except as provided in Section 10.9(d).
(d) If the Parties fail, within sixty (60) Days after delivery of
such demand, to deliver to Escrow Agent joint instructions resolving such
disputed matter, Escrow Agent shall have the right to file an action in
interpleader against all the Parties in any court of competent
44
jurisdiction sitting in New York, New York, and to deposit with such court all
of the funds and other items held in Escrow, whereupon Escrow Agent shall be
discharged from any further obligations or liability with respect to Escrow. The
Parties, jointly and severally, shall Indemnify Escrow Agent from and against
any claim, liability and expenses resulting from such interpleader action (but,
as between Sellers and Buyer, the costs of such interpleader action shall be
assessed in accordance with Section 17.10).
10.10 Maintenance of Confidentiality by Escrow Agent. Except as may be
otherwise required by applicable Law, Escrow Agent shall maintain the existence,
terms and nature of this transaction and the identities of the Parties in
strictest confidence and shall not disclose any thereof to any third party
(including, without limitation, any broker) without the prior written consent of
all the Parties.
11. Post-Closing Adjustments.
11.1 Final Closing Statement. No later than 135 Days after Closing, Buyer
shall prepare and deliver to Sellers a final Closing statement (the "Final
Statement"), which shall correct the estimates and (if necessary) other amounts
used in the Preliminary Statement, based on Buyer's post-Closing examination of
the books and records of the Hotels for the applicable periods during which
Closing occurred and on relevant items of revenue or expense discovered after
Closing (including, without limitation, Hotel Payables first identified after
Closing). Sellers shall be deemed to have accepted the Final Statement as
prepared by Buyer, except for such items as to which Sellers specifically object
(including the basis for such objection) in a written notice given to Buyer
within 30 Days after Buyer delivers the Final Statement to Sellers.
11.2 Disputes. If Sellers give timely and proper notice of objection to
any item(s) on the Final Statement, and Sellers and Buyer are unable between
themselves to resolve each such item and agree upon the Final Statement within
45 Days after Buyer delivers the Final Statement to Sellers, then the Parties
shall agree upon a national accounting firm to determine the appropriate
treatment and amount of the remaining disputed items. If the Parties are unable
to agree upon and engage such a firm within 60 Days after Buyer delivers the
Final Statement to Sellers, then either Party shall have the right to apply to
the American Arbitration Association, through its office in New York, New York,
for the selection of a qualified independent arbitrator in accordance with the
applicable rules and procedures of such association. The written determination
of such accounting firm or arbitrator with respect to each such disputed item
shall be binding and conclusive upon all Parties and shall become part of the
agreed Final Statement. Sellers and Buyer shall pay in equal shares the fees and
other expenses of such firm or arbitrator (as well as any fees of the American
Arbitration Association, if requested to select the arbitrator).
11.3 Settlement. Within 10 Business Days after Sellers and Buyer agree on
(or Sellers have been deemed to have accepted) the Final Statement or after the
last timely objection by Sellers have been resolved under Section 11.2, Buyer or
Sellers (as the case may be) shall pay to the other the net amount owing on the
final settlement of the Closing prorations, credits and other adjustments, as
shown by the agreed Final Statement. Except for plain mathematical error or as
provided in Section 11.4, no further adjustments or payments shall be required
with respect to such prorations, credits and other adjustments.
45
11.4 Subsequent Tax Bills. Sellers and Buyer shall adjust the prorations
of Property Taxes at each time after Closing that any more current, corrected or
supplemental xxxx, assessment or deficiency notice is issued with respect to any
Property Tax for a period which in whole or part precedes Closing (a "Subsequent
Xxxx"). Each such adjustment shall be made and settled between Sellers and Buyer
by the appropriate payment from one to the other no later than the later of the
settlement date specified in Section 11.3 or 30 Days after either Buyer or
Sellers deliver to the other a Subsequent Xxxx. Notwithstanding the foregoing,
Sellers shall solely be entitled to any refund of Property Taxes paid with
respect to any Hotel Premises for a tax period prior to the Closing, and Buyer
agrees to assist and cooperate with Sellers in seeking any such refund (at no
cost to Buyer).
12. Third-Party Claims and Obligations.
12.1 Assumed and Retained Liabilities. Buyer shall Indemnify Sellers from
and against any and all Claims that Sellers incur by reason of any obligation or
liability expressly assumed by Buyer pursuant to this Agreement, including,
without limitation (A) obligations under the Leases, Offsite Rights Assignment
and Assumed Contracts, in each case, to the extent arising or accruing after
Closing and, (B) the Hotel Payables with respect to which Buyer has received a
proration credit (but only to the extent of such credit). Sellers shall
Indemnify Buyer from and against any and all Claims which Buyer incurs by reason
of any obligation or liability retained by Sellers pursuant to this Agreement,
including, without limitation (i) obligations under the Leases, Offsite Rights
Assignment and Assumed Contracts, in each case, to the extent arising or
accruing prior to Closing, (ii) any Excluded Contracts and (iii) any Disputed
Payables (or any other Hotel Payable except to the extent Buyer has received a
proration credit therefor).
12.2 Employee Liabilities. Sellers shall remain responsible for all (A)
claims made or suits brought with respect to Employee Liabilities prior to
Closing, and (B) Employee Liabilities with respect to Hotel Employees accruing
prior to Closing (except those which are directly related to a termination of
employment after Closing or which otherwise first arise after Closing). Buyer
shall be responsible for (x) Claims made or suits brought with respect to
Employee Liabilities first arising following Closing, and (y) Employee
Liabilities with respect to Hotel Employees accruing after Closing (except those
which are directly related to a termination of employment before Closing or
which otherwise first arise before Closing).
13. Indemnification.
13.1 Indemnification; Survival.
(a) Indemnification by Sellers. Each Seller jointly and severally
covenants and agrees that such Seller will indemnify, defend, protect and hold
harmless Buyer and its officers, partners, directors, divisions, subdivisions,
affiliates, subsidiaries, parents, agents, employees, successors and assigns at
all times from and after the date of this Agreement from and against all Claims
incurred by Buyer as a result of or arising from (i) any breach of the
representations and warranties made by the Sellers set forth herein or on the
schedules or certificates delivered in connection herewith, (ii) any
nonfulfillment of any covenant or agreement on the part of the Sellers under
this Agreement, (iii) the business, operations or assets of the Sellers or the
Hotels prior to the Closing Date, or (iv) any liability under the Securities
46
Act, the Securities Exchange Act or other Law or regulation, at common law or
otherwise, arising out of or based upon (1) any untrue statement or alleged
untrue statement of a material fact relating to any Seller contained in any
preliminary prospectus, the registration statement filed in connection with the
Newco IPO (the "Registration Statement") or any prospectus forming a part
thereof, or any amendment thereof or supplement thereto (including any
additional registration statement filed pursuant to Rule 462(b) under the
Securities Act), which statement was provided or was based upon information or
documents provided to Buyer or its counsel by the Sellers or their counsel, or
(2) any omission or alleged omission to state therein a material fact relating
to the Sellers required to be stated therein or necessary to make the statements
therein not misleading, which information was not provided to Buyer or its
counsel by the Sellers or their counsel; provided, however, that such indemnity
shall not inure to the benefit of Buyer to the extent that such untrue statement
(or alleged untrue statement) was made in, or such omission or alleged omission)
occurred in, any preliminary prospectus and the Sellers provided, in writing,
corrected information to Buyer or Newco for inclusion in the final prospectus,
and such information was not so included.
(b) Indemnification by Buyer. Subject to the provisions of Section
13.4, Buyer covenants and agrees that it will indemnify, defend, protect and
hold harmless the Sellers at all times from and after the date of this Agreement
from and against all Claims incurred by the Sellers as a result of or arising
from (i) any breach of the representations and warranties made by Buyer set
forth herein or on the schedules or certificates attached hereto, (ii) any
nonfulfillment of any agreement on the part of Buyer under this Agreement, or
(iii) any liability under the Securities Act, the Exchange Act or other Law or
regulation, at common law or otherwise, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact relating to Buyer or
Newco contained in any preliminary prospectus, the Registration Statement or any
prospectus forming a part thereof, or any amendment thereof or supplement
thereto (including any registration statement filed pursuant to Rule 462(b)
under the Securities Act), or arising out of or based upon any omission or
alleged omission to state therein a material fact relating to Buyer or Newco
required to be stated therein or necessary to make the statements therein not
misleading, which liability is not the subject of indemnification of Buyer
pursuant to Section 13.1(b) above.
13.2 Third-Party Claims and Obligations.
(a) Offsite Rights. Sellers shall jointly and severally Indemnify
Buyer from and against any and all Claims that Buyer incurs by reason of any
alleged default on the part of any Seller under an Offsite Rights Assignment
based upon an event or condition occurring (or alleged to have occurred) prior
to Closing. Buyer shall Indemnify Sellers from and against any and all Claims
that any Seller incurs by reason of any alleged default on the part of Buyer
under any Offsite Rights Assignment based upon an event or condition occurring
(or alleged to have occurred) after Closing.
(b) Lease. Sellers shall jointly and severally Indemnify Buyer from
and against any and all Claims Buyer incurs by reason of any alleged default on
the part of any Seller or the Manager under a Lease based upon an event or
condition occurring (or alleged to have occurred) prior to Closing. Buyer shall
Indemnify Sellers from and against any and all Claims
47
that Sellers incur by reason of any alleged default on the part of the lessor
under a Lease based upon an event or condition occurring (or alleged to have
occurred) after Closing.
(c) Contracts and Assumed Contracts. Sellers shall jointly and
severally Indemnify Buyer from and against any and all Claims that Buyer incurs
by reason of (i) any alleged default on the part of any Seller or the Manager
under a Contract not assigned to Buyer at Closing or (ii) any alleged default on
the part of any Seller or the Manager under an Assumed Contract, where the
allegation of such default is based on an event or condition which occurred or
arose (or is alleged to have occurred or arisen) prior to Closing. Buyer shall
Indemnify Sellers from and against any and all Claims that Sellers incur by
reason of any alleged default on the part of Buyer or Buyer's hotel manager
under an Assumed Contract, where the allegation of default is based upon an
event or condition which arose or occurred (or is alleged to have arisen or
occurred) after Closing.
(d) Assumed and Retained Liabilities. Sellers, jointly and severally
on the one hand, and Buyer on the other hand shall each Indemnify the other from
and against any and all Claims that the Indemnified Person incurs by reason of
any obligation or liability which is expressly provided to be the obligation or
responsibility of the indemnifying Party in this Agreement. Without limiting the
generality of the foregoing: (A) Buyer shall Indemnify Sellers from and against
any and all Claims that Sellers incur by reason of any Hotel Payable assumed by
Buyer hereunder, (B) Sellers shall Indemnify Buyer from and against any and all
Claims that Buyer incurs by reason of any Disputed Payable or any Hotel Payable
or Tax which remains the responsibility of Sellers hereunder, and (C) Sellers
shall reimburse Buyer, within ten Days after written demand therefor, for each
Voucher honored by Buyer after 120 Days following Closing for which Buyer has
not previously been credited (such reimbursement to be at face value for any
Voucher issued in a specific dollar amount, at average rack rates in excess of
payment accompanying the Voucher if issued for free or reduced rate rooms, and
otherwise at estimated retail value, including sales and other excise taxes
which Buyer will be obligated to pay in connection with honoring such Voucher,
if issued for food, beverages, other merchandise or services).
(e) Tort Claims. Sellers shall Indemnify Buyer from and against any
and all Claims that Buyer incurs by reason of any alleged injury or damage to
the person or property of another based upon an event or condition occurring (or
alleged to have occurred) at any Hotel prior to Closing. To the extent that
Sellers pay any such claim, liability and related expenses under this Section
13.2(e), Sellers reserve the right to recover from Manager or any insurer
therefor. Buyer shall Indemnify Sellers from and against any and all Claims that
Sellers incur by reason of any alleged injury or damage to the person or
property of another based upon an event or condition occurring (or alleged to
have occurred) after Closing.
(f) Indemnification of Related Persons. Any indemnification of any
Party against third-person claims contained herein shall also run in favor of
such Party's partners, members, shareholders, directors, officers, Affiliates,
agents and managers, and the employees of each of them, all of whom are intended
by the Parties to be third-party beneficiaries of this Section 13.2.
48
(g) Procedures for Third-Party Claims.
(1) Notice of Claim. Whenever any person indemnified under
this Section 13.2 (an "Indemnified Person") learns, through the filing of a
claim, demand letter or otherwise, of the existence of a Claim to which such
Indemnified Person believes this Section 13.2 applies, the Indemnified Person
shall promptly (and, in any event within ten Days) notify the indemnifying Party
(the "Indemnifying Party") and furnish the Indemnifying Party with a copy of
each demand, pleading and other communication which the Indemnified Person has
received relating to such claim; provided, however, that (subject to the
limitation on certain indemnity claims under Section 13.3), no delay on the part
of the Indemnified Person in notifying the Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and then solely to the
extent that) the Indemnifying Party thereby is prejudiced.
(2) Indemnifying Party's Right to Defend. The Indemnifying Party
shall have the right to defend the Indemnified Person against any Claim with
counsel of its choice reasonably satisfactory to the Indemnified Person so long
as (A) the Indemnifying Party notifies the Indemnified Person in writing that
the Indemnifying Party shall Indemnify the Indemnified Person from and against
such Claim and (B) the Indemnifying Party conducts the defense of such Claim
actively and diligently.
(3) Indemnified Person's Right to Participate. So long as the
Indemnifying Party has accepted and is conducting the defense of a Claim in
accordance with Section 13.2(g)(2), (A) the Indemnified Person may retain
separate co-counsel at its sole cost and expense and participate in the defense
of such Claim, (B) the Indemnified Person will not consent to the entry of any
judgment or enter into any settlement with respect to such Claim without the
prior written consent of the Indemnifying Party, and (C) the Indemnifying Party
will not consent to the entry of any judgment or enter into any settlement
involving equitable relief against the Indemnified Person with respect to the
Claim without the prior written consent of the Indemnified Person.
(4) Indemnified Person's Right to Assume Control. Unless the
Indemnifying Party accepts the defense of a Claim within ten Days after the
Indemnified Person has given notice of such Claim and is conducting the defense
of a Claim in accordance with Section 13.2(g)(2), then, until the Indemnifying
Party does accept the defense of such Claim and so conducts such defense, the
Indemnified Person may defend against, and consent to the entry of any judgment
or enter into any settlement with respect to, such Claim in any manner it
reasonably may deem appropriate (and the Indemnified Person need not consult
with, or obtain any consent from, the Indemnifying Party in connection
therewith), and (A) the Indemnifying Party shall reimburse the Indemnified
Person promptly and periodically for the costs of defending against such Claim
(including attorneys' fees and expenses) if such Claim is covered by an
indemnification obligation of the Indemnifying Party hereunder, and (B) the
Indemnifying Party shall remain responsible for any liability, loss and expenses
the Indemnified Person may suffer as a result of such Claim (including, without
limitation, the cost of any settlement made by the Indemnified Party pursuant to
this Section 13.2(g)(4)) to the fullest extent provided in this Section 13.
49
13.3 Time Limitation on Claims. The provisions of, and the Parties'
respective obligations under, this Section 13 shall survive Closing or
termination of this Agreement; provided, however, that:
(a) Sellers shall have no liability to Buyer for breach of any
warranty or representation contained herein, under this Section 13, Section 5.1
or otherwise, unless Buyer has given Sellers written notice claiming such
breach, stating in reasonable detail the factual basis for such claim, before
the first anniversary of the Closing Date; provided, that, breaches of
Section 5.1(u), Section 10.5(a)(2), Section 11 and Section 13.2(d) shall not be
subject to the foregoing time limit and breaches of Section 5.1(m) shall toll
the foregoing time limit until the date that is 90 days following the expiration
of the applicable statute of limitations.
(b) Buyer shall have no liability to Sellers for breach of any
warranty or representation contained herein, under this Section 13, Section 5.2
or otherwise, unless Sellers have given Buyer written notice claiming such
breach, stating in reasonable detail the factual basis for such claim, before
the first anniversary of the Closing Date; provided, that, breaches of Section
11 and Section 13.2(d) shall not be subject to the foregoing time limit.
(c) Buyer shall not have any liability to Sellers under this Section
13, Section 4.6 or otherwise, for repair or replacement of any damaged
portion of any Hotel (i) if Closing occurs or (ii) unless Sellers give Buyer
written notice of such damage by the later of (A) 60 Days after the termination
of this Agreement or (B) ten Days after Sellers discover such damage.
(d) Buyer shall not have any liability to Sellers under this Section
13, Section 4.6 or otherwise, for any claims against Sellers resulting from
activities of Buyer or Buyer's representatives pursuant to Section 4.5, unless
Sellers give Buyer written notice of such claim within 30 Days after any Seller
receives notice of the same.
13.4 Seller Liquidated Damages. If this Agreement is not terminated by
Buyer on or prior to the Approval Date, then Buyer shall be required to pay to
Seller, as liquidated damages (the "Liquidated Damages"), $2,000,000, in the
event that all of the following (a), (b) and (c) shall have occurred: (a) Buyer
later terminates this Agreement for any reason other than on account of (1) any
breach of this Agreement by Seller or any failure to satisfy any of the
conditions set forth in Section 9.1, or (2) the existence of any material
impediment(s) related to the Hotels or the Sellers which would have prevented or
unreasonably delayed the Newco IPO Closing absent such termination, and which
impediments were outside of Buyer's reasonable control; (b) the Newco IPO
Closing shall have occurred within twelve (12) months of the date on which Buyer
terminated this Agreement and Buyer shall not have offered Sellers participation
therein on substantially the same terms contemplated herein (through the
invitation to negotiate a new agreement for the purchase of the Hotels); and (c)
hotels described in the Newco Form S-11 when it was first filed with the
Securities and Exchange Commission that are also included in the final
prospectus for the Newco IPO shall have accounted for sixty-six and two-thirds
percent (66-2/3%) or more of the trailing twelve month earnings before interest,
taxes, depreciation and amortization of Newco's entire hotel portfolio described
in the Newco IPO final prospectus. Liquidated Damages payable pursuant to this
Section 13.4, if any, shall be due within five (5) Business Days of the Newco
IPO Closing. Buyer shall have no further liability to Sellers
50
pursuant to this Agreement upon the payment of Liquidated Damages and the amount
of any Liquidated Damages payable to Seller shall be reduced by an amount equal
to (x) the amount of any damages or costs previously paid by Buyer to Sellers
pursuant to this Agreement, plus (y) the amount of any damages or other costs
that Buyer is obligated to pay Sellers in accordance with a valid judicial order
or ruling.
14. Termination.
This Agreement may be terminated at any time prior to the Closing:
(a) by mutual, written agreement between Buyer and Sellers;
(b) by either Buyer or Sellers if the Closing shall not have occurred
on or prior to the Outside Closing Date; provided, that the right to terminate
this Agreement under this Section 14 shall not be available to any Party whose
breach of warranty, or failure to fulfill any obligation under this Agreement
shall have been the cause of, or resulted in, the failure of the Closing to
occur on or before such date; or
(c) by either Buyer or Sellers if there shall be in effect any law or
regulation that prohibits the consummation of the Closing or if consummation of
the Closing would violate any non-appealable final order, decree or judgment of
any court or governmental body having competent jurisdiction; or
(d) by Sellers if the Newco Form S-11 shall not have been initially
filed with the Securities and Exchange Commission on or prior to the Initial
Filing Deadline;
(e) by Sellers if the Newco IPO Closing shall not have occurred on or
prior to the Newco IPO Closing Deadline; provided, that, if (A) Buyer shall
deliver notice to Sellers on or prior to the Newco IPO Closing Deadline that (1)
the Newco IPO Closing will not be completed on or prior to the Newco IPO Closing
Deadline, (2) that Buyer anticipates that the Newco IPO Closing shall be
completed within a reasonable time following the Newco IPO Closing Deadline, and
(B) the failure to so complete the Newco IPO Closing on or prior to the Newco
IPO Closing Deadline shall not be primarily as a result of any action taken or
the failure to take any commercially reasonable action in furtherance of the
Newco IPO Closing, in each case by Newco, Buyer or any Affiliate thereof, then
Sellers shall not have the right to terminate this Agreement pursuant to this
Section 14(e) unless the Newco IPO Closing shall not have occurred on or prior
to August 31, 2004 (unless otherwise terminated in accordance with this Section
14) for so long as Newco, Buyer or any Affiliate thereof continues to take
commercially reasonable actions to consummate the Newco IPO.
(f) by Sellers if, as a result of action or inaction by the Buyer,
the Closing shall not have occurred on or prior to the date that is 10 Days
following the date on which all of the conditions to Closing set forth in
Section 9.1 are satisfied or waived;
(g) by Buyer if, as a result of action or inaction by the Sellers or
any of them, the Closing shall not have occurred on or prior to the date that is
10 Days following the date on which all of the conditions to Closing set forth
in Section 9.2 are satisfied or waived;
51
(h) by Buyer or Sellers if there is or has been a material breach or
material failure to fulfill on the part of the other Party any of the
representations, warranties, covenants or agreements set forth in this
Agreement, which, in the case of any covenant or agreement, is not cured within
10 Days after the non-terminating Party has been notified of the other Party's
intent to terminate this Agreement pursuant to this Section 14; or
(i) by Buyer if Buyer elects to terminate this Agreement in
accordance with Sections 4.4(c), 4.7 or 9.3.
15. Assignment.
Prior to Closing, Buyer shall have the right to assign or transfer its
rights under this Agreement to Newco or its operating partnership or to any
Affiliate of Buyer, and/or a partnership or limited liability company with
respect to which Buyer or an Affiliate of Buyer is a general partner or managing
member (either directly or through the general partnership or managing member
interest in one or more sub-tier partnerships or limited liability companies),
provided that each such assignee concurrently with such assignment assumes, in a
written instrument delivered to Sellers, all of the obligations and liabilities
of Buyer hereunder. Upon such an assignment, the assignee(s) shall become the
Buyer for all purposes of this Agreement, and the Buyer named herein shall be
relieved of any further obligation or liability hereunder; but no such proposed
assignee shall have any obligation or liability hereunder until and unless the
assignment to it has been made and accepted in writing. Nothing herein shall be
deemed to preclude or prevent Buyer, after Closing, from assigning any of its
remaining rights under this Agreement, pro tanto, in conjunction with any sale,
lease, secured financing or other conveyance of any of the properties comprising
the Hotels or any possessory or security interest therein.
16. Notices.
Except in the case (if any) where this Agreement expressly provides for an
alternate form of communication, any notice, consent, demand or other
communication to be delivered to a Party hereunder shall be deemed delivered and
received when made in writing and transmitted to the applicable Party either by
receipted courier service, or by the United States Postal Service, first class
registered or certified mail, postage prepaid, return receipt requested, or by
electronic facsimile transmission ("Fax"), at the address or addresses indicated
for such Party below (and/or to such other address as such Party may from time
to time by written notice designate to the other):
If to Sellers: Hotel Venture East, LP
Hotel Venture West, LP
0000 XxXxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxx
Fax: (000) 000-0000
52
with a copy to: XxXxxxx Xxxxxxxx & Xxxxxxxx, P.C.
0000 Xxxxxxx Xxxxx
000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: X. XxXxxxxxxx Xxxxxxxx, Esq.
Fax: (000) 000-0000
If to Buyer: AP/APMC Partners, LLC
1301 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxxxxx
Fax: (000) 000-0000
with a copy to: Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
and shall be deemed delivered and received: (A) if delivery or Fax transmission
is completed before 5:00 p.m. recipient's local time on a Business Day, or if
delivery is attempted but refused between the hours of 9:00 a.m. and 5:00 p.m.
recipient's local time on a Business Day, then on the Day of actual delivery or
attempted delivery and (B) otherwise, on the Business Day following the Day of
actual delivery or Fax transmission; provided, however, that delivery by Fax
shall be effective only if the Fax transmission is confirmed within three
Business Days by duplicate notice delivered as otherwise provided herein. Time
of delivery or attempted delivery shall be established by postal or courier
receipt and time of completion of Fax transmission shall be established by a
transmission confirmation log sheet generated by the sending machine. For all
purposes under this Agreement, delivery of notice to any Seller shall be deemed
to be delivery of such notice to all Sellers.
17. General Provisions.
17.1 Confidentiality. Except for Permitted Disclosures (defined below),
(A) each Party shall keep confidential the terms of this Agreement, (B) until
and unless Closing occurs, Buyer shall keep confidential all information
regarding the Sellers which is not otherwise known by Buyer to be public and
which it receives from Sellers or Manager pursuant to this Agreement, and (C)
after Closing, Sellers shall keep confidential all such non-public information
regarding the Hotels. As used herein, "Permitted Disclosures" include only (i)
disclosures by a Party to the Title Company, the Manager and the Secured Lender,
(ii) disclosures by a Party to its attorneys, accountants and other consultants
as reasonably necessary in the negotiation of this Agreement, the conduct of due
diligence, the consummation of the transactions contemplated hereby and the
exercise of such Party's rights and the performance of its duties hereunder,
(iii) disclosures by Buyer to the board, staff, counsel, accountants and
consultants of any assignee or prospective assignee under Section 14 (or of such
assignee's ultimate parent entity), (iv) disclosure to any government regulatory
agency which requests the information in question in the course of its
regulatory functions, and (v) any other disclosure required by Law (including,
53
without limitation, in response to any subpoena). In the case of any Permitted
Disclosure described in clause (i), (ii) or (iii) above, the disclosing Party
shall advise the person to whom such disclosure is made of the confidential
nature of any information disclosed and obtain from such person an undertaking
to respect such confidentiality.
17.2 Effect of Termination. Upon any termination of this Agreement, no
Party shall have any further obligation or liability to the other hereunder
except (i) as provided below (regarding Buyer's return or destruction of
materials received from Sellers), (ii) any remaining obligation of Buyer under
Section 4.6 (with respect to activities of Buyer or its agents upon the Hotel
Premises), (iii) any remaining obligations of Buyer under Section 13.4, (iv) any
liability which any Party may have hereunder by reason of the fact that such
termination either (A) was wrongfully made by it or (B) resulted from a breach
of its warranties, covenants or other obligations hereunder, and (v) any
obligation under Section 17.10. Within 90 Days after termination of this
Agreement without Closing, Buyer shall either return to Sellers or destroy all
materials of a confidential nature which Buyer has received from Sellers or
Manager pursuant to this Agreement; provided, however, that if any dispute
regarding such termination then exists between the Parties, Buyer shall have the
right to retain any of such materials which may be relevant to such dispute
until a final resolution thereof.
17.3 Construction; Participation in Drafting. Each Party acknowledges that
it and its Counsel have participated substantially in the drafting of this
Agreement and agree that, accordingly, in the interpretation and construction of
this Agreement, no ambiguity, real or apparent, in any provision hereof shall be
construed against a Party by reason of the role of such Party or its Counsel in
the drafting of such provision. In construing provisions of this Agreement the
rule ejusdem generis shall not apply and the listing of items following the term
"include" or "including," whether or not qualified by phrases like "without
limitation" or "but not limited to," shall be regarded as illustrative and not
exhaustive
17.4 No Third-Party Beneficiaries. Except as expressly provided in Section
13, nothing in this Agreement is intended or shall be construed to confer any
rights or remedies on any person other than the Parties and their respective
successors and assigns, or to relieve, discharge or alter the obligations of any
third person to either Party or to give any third person any right of
subrogation or action over against any Party. Without limiting the generality of
the foregoing, no Hotel Employee shall be deemed a third party beneficiary of
any provision of this Agreement.
17.5 Survival of Provisions. To the extent required for its proper effect
and subject to Section 13.3, each provision of this Agreement shall survive
Closing or termination of this Agreement, regardless of whether this Agreement
specifically provides for its survival, and shall not be deemed merged into the
Transfer Instruments.
17.6 Integration and Binding Effect. This Agreement constitutes the entire
agreement among the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings and representations of the
Parties with respect to the subject matter hereof (including, without
limitation, any letter of intent or other such written proposal). This Agreement
may not be modified, amended, supplemented or otherwise changed, except by a
54
writing executed by all Parties. Except as otherwise expressly provided herein,
this Agreement shall bind and inure to the benefit of the Parties and their
respective successors and assigns.
17.7 Computation of Time. Any time period specified in this Agreement
which would otherwise end on a non-Business Day shall automatically be extended
to the immediately following Business Day.
17.8 Captions. Article and section headings used herein are for
convenience of reference only and shall not affect the construction of any
provision of this Agreement.
17.9 Further Assurances. The Parties shall cooperate with each other as
reasonably necessary to effect the provisions of this Agreement, shall use
reasonable and good faith efforts to satisfy conditions to Closing and, at and
after Closing, shall each execute and deliver such additional instruments or
other documents and another Party may reasonably request to accomplish the
purposes and intent of this Agreement; provided, however, that nothing in this
Section 17.9 shall be deemed to enlarge the obligations of the Parties hereunder
or to require any Party to incur any material expense or liability not otherwise
required of it hereunder.
17.10 Enforcement Costs. Should either Buyer or Sellers institute any
action or proceeding to enforce any provision of this Agreement or for damages
by reason of an alleged breach of any provision hereof, the prevailing Party
shall be entitled to recover from the Party not prevailing all costs and
expenses (including attorneys' fees actually and reasonably incurred) incurred
by such prevailing Party in connection with such action or proceeding. For
purposes hereof, a plaintiff Party shall be considered the "prevailing Party" in
an equitable action if it substantially obtains the equitable remedy sought and
shall be considered the "prevailing Party" in an action for damages if it
recovers the greater of (A) at least 75% of its last settlement offer (or, if it
has made no offer, at least 50% of the amount sought by it at trial) or (B) 125%
of the last settlement offer made by the defendant Party; otherwise, the
defendant Party shall be deemed the "prevailing" Party even though recovery is
had against it. A Party entitled to recover costs and expenses under this
Section 17.10 shall also be entitled to recover all costs and expenses
(including attorneys' fees actually and reasonably incurred) incurred in the
enforcement of any judgement or settlement obtained in such action or proceeding
(and in any such judgement provision shall be made for the recovery of such
post-judgement costs and expenses).
17.11 Governing Law. This Agreement shall be deemed to be an agreement made
under the Laws of the State of New York, without giving effect to the conflict
of laws principles thereof.
17.12 Counterparts. This Agreement, and any amendment hereto, may be
executed in any number of counterparts and by each Party on separate
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which taken together shall constitute but one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
55
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
and delivered, each by its own representative thereunto duly authorized, as of
the date first above written.
SELLERS: HOTEL VENTURE EAST, L.P.,
a Texas limited partnership
By: Circa GP East, Inc.,
a Texas corporation,
its General Partner
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Name: Xxxxxx X. Xxxxx
----------------------------
Title: Vice President
----------------------------
CIRCA GP EAST, INC.,
a Texas corporation
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
---------------------------------
Title: Vice President
---------------------------------
HOTEL VENTURE WEST, L.P.,
a Texas limited partnership
By: Circa GP West, Inc.,
a Texas corporation,
its General Partner
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Name: Xxxxxx X. Xxxxx
----------------------------
Title: Vice President
----------------------------
CIRCA GP WEST, INC.,
a Texas corporation
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
---------------------------------
Title: Vice President
---------------------------------
BUYER: AP/APMC PARTNERS, LLC,
a Delaware limited liability company
By: AP/APMC-MM, LLC,
its Manager
By: Kronus Property III, Inc.,
its Manager
Date: April 16, 2004 By: /s/ Xxxx Xxxxxxxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxxxxxx
Title: Vice President
The undersigned hereby accepts this Agreement as its escrow instructions and
agrees to act as Escrow Agent hereunder, in accordance with the terms and
conditions hereof.
LAWYERS TITLE INSURANCE CORPORATION
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
Date: ___________________________, 2004
Hotel Venture Purchase and Sale Agreement
Exhibits
Exhibit A
---------
SCHEDULE OF CONTRACTS
1. The items set forth on Schedule 5.1(n) are incorporated herein by
reference.
2. Chubb Custom Insurance Company Environmental Site Liability Policy for
period 5/31/02 - 5/31/07 (Policy No. 3725-43-36)
A-1
Exhibit B
---------
FORM OF
XXXX OF SALE
BY THIS XXXX OF SALE, for [Ten Dollars ($10.00)] cash and other good and
valuable consideration, receipt of which is hereby acknowledged, [NAME OF
SELLER], a [jurisdiction/entity] ("Seller"), does hereby sell, assign, convey,
transfer and set over to [NAME, entity type and jurisdiction of Buyer]
("Buyer"), all of the FF&E and Inventory, as those terms are defined in that
certain Agreement of Purchase and Sale for [Name of Hotel], between Seller and
AP/APMC Partners, LLC, including, without limitation, all of the items and
classes of tangible personal property described in Exhibit A attached hereto
(and hereby made a part hereof), without warranty, express or implied, except
that Seller shall warrant and defend unto Buyer and Buyer's successors and
assigns title to such property against all persons claiming by, through or under
Seller.
Seller further hereby covenants to execute and deliver such further
instrument(s) as Buyer may hereafter request to evidence or confirm any of the
sales made herein, in such form as Buyer may reasonably request and promptly
upon Buyer's request therefor.
Dated: [insert date] [NAME OF SELLER], a
[jurisdiction/entity]
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
B-1
EXHIBIT A
Tangible Personal Property
B-2
Exhibit C
---------
FORM OF
AGREEMENT OF ASSIGNMENT AND ASSUMPTION OF ASSUMED CONTRACTS
THIS AGREEMENT OF ASSIGNMENT AND ASSUMPTION (this "Assignment") is made as of
[insert date], by and between [NAME OF SELLER], a [jurisdiction/entity]
("Assignor"), and [NAME, entity type and jurisdiction of Buyer or nominee]
("Assignee"), on the other.
RECITALS
--------
A. Assignor has entered into that certain Agreement of Purchase and
Sale (the "Purchase Agreement") for the [Name of Hotel] (the "Hotel"), dated as
of [insert date of Purchase Agreement], between Assignor, as "Seller," and
AP/APMC Partners, LLC, as "Buyer." All of Buyer's rights under the Purchase
Agreement have been assigned to Assignee.
B. In conjunction with the sale and purchase of the Hotel, the
Purchase Agreement obligates Assignor to assign to Assignee, and Assignee to
assume, the contracts and equipment leases (the "Assumed Contracts") identified
in the Schedule of Contracts attached hereto as Exhibit A, subject to the terms
and conditions set forth in this Assignment.
NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants
and conditions herein contained, the parties hereto (together, the "Parties,"
and each sometimes a "Party") hereby act and agree as follows:
1. Assignment. Assignor hereby assigns, sets over and transfers to
Assignee, and Assignee hereby takes and accepts from Assignor, all of Assignor's
rights in, under and to each of the Assumed Contracts and to all benefits and
privileges hereafter accruing to Assignor thereunder.
2. Assumption of Obligations and Liabilities by Assignee. Assignee hereby
assumes all of the obligations and liabilities of Assignor under each of the
Assumed Contracts accruing from and after the date hereof.
3. Indemnifications by Assignor and Assignee. Assignor shall indemnify
Assignee, its successors and assigns, from and against any and all claims and
liability, and expenses related thereto (including attorneys' fees actually and
reasonably incurred), for breach or default on the part of the servicee or
equipment lessee under any Assumed Contract based on an event occurring (or
alleged to have occurred) or a condition arising (or alleged to have arisen)
before the date hereof. Assignee shall indemnify Assignor, its successors and
assigns, from and against any and all claims and liability, and expenses related
thereto (including attorneys' fees actually and reasonably incurred), for breach
or default on the part of the servicee or equipment lessee under any Assumed
Contract based on an event occurring (or alleged to have occurred) or a
condition arising (or alleged to have arisen) on or after the date hereof.
C-1
4. No Impairment of Purchase Agreement Provisions. Nothing contained in
this Assignment shall be deemed to limit, waive or otherwise derogate from any
warranty, representation, covenant or indemnification made in the Purchase
Agreement by either Party and none of such provisions in the Purchase Agreement
shall be deemed to have merged into this Assignment.
5. Further Assurances. Assignor shall promptly execute and deliver to
Assignee any additional instrument or other document which Assignee reasonably
requests to evidence or better effect the assignment contained herein.
6. Counterparts. This Assignment may be executed in any number of
counterparts and by each Party on a separate counterpart or counterparts, each
of which when so executed and delivered shall be deemed an original and all of
which taken together shall constitute but one and the same instrument.
7. Governing Law. This Assignment shall be deemed to be an agreement made
under the laws of the State of New York and for all purposes shall be governed
by and construed in accordance with such laws.
8. Binding Effect. This Assignment shall be binding upon and inure to the
benefit of each of the Parties and its successors and assigns.
9. Warranty of Signers. Each individual executing and delivering this
Assignment on behalf of a Party hereby represents and warrants to the other
Party that such individual has been duly authorized and empowered to make such
execution and delivery.
[SIGNATURES ON FOLLOWING PAGE]
C-2
IN WITNESS WHEREOF, the Parties have caused this Assignment to be executed and
delivered by their respective representatives, thereunto duly authorized, as of
the date first above written.
ASSIGNOR: [NAME OF SELLER], a
[jurisdiction/entity]
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
ASSIGNEE: [NAME, entity, jurisdiction
of Buyer nominee]
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
C-3
ACKNOWLEDGEMENTS
----------------
STATE OF )
) ss.:
COUNTY OF )
On _________________________, before me, _______________________, personally
appeared _______________________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal
__________________________________[SEAL]
STATE OF )
) ss.:
COUNTY OF )
On _________________________, before me, _______________________, personally
appeared _______________________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal
__________________________________[SEAL]
********
C-4
EXHIBIT A
Schedule of Contracts
C-5
Exhibit D
---------
FORM OF
DEEDS
See attached.
D-1
Arkansas
--------
D-2
WARRANTY DEED
Know All Men By These Presents:
That _______________________________________ a ____________________________
organized under and by virtue of the laws of the State of______________________,
by its_______________________ and________________, duly authorized and empowered
hereto by proper resolution of its Board of Directors, for and in consideration
of the sum of__________________________________________ Dollars paid by
_______________________________________________________________________, Grantee
________________________, the receipt of which is hereby acknowledged, does
hereby grant, bargain, sell and convey unto the said Grantee
________________________, and unto his heirs and/or successors and assigns
forever, the following lands lying in the County of ___________________________,
and State of Arkansas, to-wit:
Subject to existing easements, building lines, and restrictions of record, if
any.
I certify under penalty of false swearing that the legally correct amount of
documentary stamps have been placed on this instrument. (If none shown, exempt
or no consideration paid.)
Grantee or Agent _______________________________________________________________
Grantee's Address ______________________________________________________________
To have and to hold the same unto the said Grantee _____________________,
and unto his heirs and/or successors and assigns forever, with all appurtenances
thereunto belonging.
And hereby covenants with the said Grantee ____________________, that it
will forever warrant and defend the title to said lands against all claims
whatever.
IN TESTIMONY WHEREOF, The name of the grantor is hereunto affixed by its
President and its seal affixed by its Secretary, this _______________ day of
________________________________, 2004.
________________________________________
________________________________________
X-0
XXXXXXXXXXXXXXX
XXXXX XX XXXXXXXX
XXXXXX OF __________
On this _______________________ day of _______________________________,
2004 before me_________________________________________________________ duly
commissioned, qualified and acting, within and for the said County and State,
appeared in person the within named_____________________________________________
and________________________________ to me personally well known, who stated that
they were the President and Secretary of the ___________________________________
________________________________________________________________________________
a corporation, and were duly authorized in their respective capacities to
execute the foregoing instrument for and in the name and behalf of said
corporation, and further stated and acknowledged that they had so signed,
executed and delivered said foregoing instrument for the consideration, uses and
purposes therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this
_____________________ day of ___________________________________, 2004.
----------------------------------------
Notary Public
My Commission expires __________________
D-4
California
----------
D-5
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
________________________________________
________________________________________
________________________________________
Attn: __________________________________
MAIL TAX STATEMENTS TO:
________________________________________
________________________________________
________________________________________
Attn: __________________________________
-------------------(SPACE ABOVE THIS LINE FOR RECORDER'S USE)-------------------
GRANT DEED
The undersigned grantor declares that Documentary Transfer Tax is not shown
pursuant to Section 11932 of the Revenue and Taxation Code, as amended.
FOR CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged,
________________________________________________________________ ("Grantor"),
hereby grants to ______________________________________________, the following
described real property in the City of _____________, County of
_________________, State of California:
See Schedule "1" which is attached hereto and incorporated by this reference.
IN WITNESS WHEREOF, Grantor hereto has executed this Grant Deed as of the ____
day of ______________, 200_.
GRANTOR:
----------------------------------------
By:
------------------------------------
Name:
-----------------------------
Title:
----------------------------
[NOTARY ACKNOWLEDGEMENT FOLLOWS ON NEXT PAGE]
D-6
STATE OF _________________ )
)ss.
COUNTY OF ________________ )
On _______________ ____, 200_, before me, the undersigned, a notary public
in and for said State, personally appeared ___________________________
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS MY HAND AND OFFICIAL SEAL.
Signature _______________________ [SEAL]
D-7
Montana
-------
D-8
Filed for record this ________ day of ___________________________, 200___
at ______ o'clock ___.m.
Know All Men By These Presents:
-------------------------------
That _______________________ a limited partnership, organized and existing
under the laws of the State of ________________________________, in
consideration of the sum of ____________________________ Dollars
($______________), the receipt whereof is hereby admitted, does hereby grant,
bargain, sell, convey and confirm unto _________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
and to ____________________________________________________________ and assigns,
FOREVER, the following described real property, situated in the city or town
of ___________________, County of ________________________, State of Montana,
to-wit: ________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________.
TOGETHER, with all and singular the tenements, hereditaments, _____________
_________________________________________ and appurtenances thereto belonging or
in anywise appertaining. _______________________________________________________
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
And the said GRANTOR hereby covenants that it will forever WARRANT and
DEFEND all right, title, and interest in and to said premises, and the quiet and
peaceable possession thereof, unto the said GRANTEE ____________________________
______ and assigns, against the acts and deeds of said grantor, and all and
every person and persons whomsoever lawfully claiming or to claim the same.
___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________.
IN WITNESS WHEREOF, said GRANTOR has caused its corporate name to be
subscribed and its corporate seal to be affixed, by its proper officers,
thereunder duly authorized, on this _______day of __________________ A.D. 20___.
___________________________________
By:________________________, President
D-9
ATTEST:
________________________________________
__________________________, Secretary
STATE OF MONTANA, )
) ss
County of _____________ )
On this _____________ day of ______________________________________ in the
year 20___, before me_________________________________, a Notary Public for the
State of Montana, personally appeared __________________________________ (known
to me or proved to me on oath of _______________________________________________
____________ to be the __________________________________________ of the limited
partnership that executed the within instrument and acknowledged to me that such
limited partnership executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Official
Seal the day and year in this certificate first above written.
________________________________________
Notary Public for the State of Montana
Residing at _________________________ My Commission expires ___________, 20__.
D-10
Texas
-----
D-11
WARRANTY DEED
THE STATE OF TEXAS Section
Section KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF Section
THAT THE UNDERSIGNED, ________________________________, hereinafter referred to
as "Grantor", whether one or more, for and in consideration of the sum of TEN
DOLLARS ($10.00) cash, and other good and valuable consideration in hand paid by
the Grantee, herein named, the receipt and sufficiency of which is hereby fully
acknowledged and confessed, has GRANTED, SOLD and CONVEYED, and by these
presents does hereby GRANT, SELL and CONVEY unto ______________________
__________, herein referred to as "Grantee", whether one or more, the real
property described on attached Exhibit "A".
This conveyance, however, is made and accepted subject to any and all validly
existing encumbrances, conditions and restrictions, relating to the hereinabove
described property as now reflected by the records of the County Clerk of
_______________________ County, Texas.
TO HAVE AND TO HOLD the above described premises, together with all and singular
the rights and appurtenances thereto in anywise belonging unto the said Grantee,
Grantee's heirs, executors, administrators, successors and/or assigns forever;
and Grantor does hereby bind Grantor, Grantor's heirs, executors,
administrators, successors and/or assigns to WARRANT AND FOREVER DEFEND all and
singular the said premises unto the said Grantee, Grantee's heirs, executors,
administrators, successors and/or assigns, against every person whomsoever
claiming or to claim the same or any part thereof.
Current ad valorem taxes on said property having been prorated, the payment
thereof is assumed by Grantee.
EXECUTED this _____ day of ____, 20___.
________________________________________
________________________________________
Grantee's Address:
________________________________________
________________________________________
________________________________________
X-00
XXX XXXXX XX XXXXX Xxxxxxx
Xxxxxxx
XXXXXX OF Section
The foregoing instrument was acknowledged before me on the _______ day of ______
_______, 20___, by ____________________.
________________________________________
NOTARY PUBLIC, STATE OF TEXAS
PRINTED NAME OF NOTARY
________________________________________
MY COMMISSION EXPIRES:
____________________________
THE STATE OF TEXAS Section
Section
COUNTY OF Section
The foregoing instrument was acknowledged before me on the _______________ day
of ____________, 20___, by ____________________.
________________________________________
NOTARY PUBLIC, STATE OF TEXAS
PRINTED NAME OF NOTARY
________________________________________
MY COMMISSION EXPIRES:
_________________________
D-13
EXHIBIT A
Real Property
D-14
Wyoming
-------
D-15
WARRANTY DEED
____________________________, Grantor, for and in consideration of TEN
($10.00) DOLLARS and other good and valuable consideration in hand paid, the
receipt whereof is hereby acknowledged, hereby CONVEYS and WARRANTS to Grantee,
whose address is _______________________________, the following described real
property, hereby releasing and waiving all rights under and by virtue of the
homestead exemption laws of the State of Wyoming, to-wit:
The Grantor herein also grants and conveys to the Grantee all Grantor's
right, title and interest in and to any and all water, water rights, water
shares (if any), ditch rights, canal ditch shares (if any), xxxxx and well
rights, reservoirs and reservoir rights, and reservoir shares (if any)
appurtenant to or used or usable in connection with the above described Real
Property or any part thereof, all surface water, adjudicated and unadjudicated,
appropriated and unappropriated.
TOGETHER with all of Grantor's right, title and interest, in and to any and
all oil, gas and minerals, appurtenant to or located on or under the above
described property owned by the Grantor.
TOGETHER with any and all tenements, hereditaments and appurtenances
thereunto belonging or in anywise appertaining and improvements thereon, any and
all fixtures of a permanent nature thereon, and any and all easements, rights of
way, and other rights appurtenant thereto;
SUBJECT to easements, reservations, covenants and restrictions presently of
record in the office of the County Clerk for _______________ County, Wyoming.
WITNESS this hand this _______ day of ________________________, 2004.
_____________________
D-16
STATE OF ________________________ )
) ss
COUNTY OF _______________________ )
The foregoing Warranty Deed was acknowledged before me by on this _____ day
of ______________________, 2004.
Witness my hand and official seal.
________________________________________
Notary Public
My commission expires: ________________________
D-17
Exhibit E
---------
FORM OF
FIRPTA CERTIFICATE
To inform [name, entity, jurisdiction of Buyer or nominee] ("Transferee"), that
withholding of tax under Section 1445 of the Internal Revenue Code of 1954, as
amended (the "Code"), will not be required upon the transfer of certain real
property to Transferee by [NAME OF SELLER], a [jurisdiction/entity]
("Transferor"), the undersigned hereby certifies the following on behalf of
Transferor:
1. Transferor is not a foreign person, foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
Code and the Income Tax Regulations promulgated thereunder).
2. Transferor's U.S. employer identification number is _________________.
3. Transferor's office address is _____________________________.
Transferor understands that this Certification may be disclosed to the Internal
Revenue Service by Transferee and that any false statement contained herein
could be punished by fine, imprisonment, or both.
Under penalty of perjury the undersigned declares that he/she has examined this
Certification and to the best of his/her knowledge and belief it is true,
correct and complete and that he/she has authority to sign this document on
behalf of Transferor.
Dated: [insert date] [NAME OF SELLER],
a [jurisdiction/entity]
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
E-1
Exhibit F
---------
FORM OF
GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT (this "Assignment") is made as of [insert date], by and between
[NAME OF SELLER], a [jurisdiction/entity] ("Assignor"), and [NAME, entity type
and jurisdiction of Buyer or nominee] ("Assignee"), on the other.
RECITALS
--------
A. Assignor has entered into that certain Agreement of Purchase and
Sale (the "Purchase Agreement") for the [name of the Hotel] (the "Hotel"), dated
as of [insert date of Purchase Agreement], between Assignor, as "Seller," and
AP/APMC Partners, LLC, as "Buyer." All of Buyer's rights under the Purchase
Agreement have been assigned to Assignee.
B. In conjunction with the sale and purchase of the Hotel, the
Purchase Agreement obligates Assignor to assign to Assignee all of the
"Intangibles" (as such term is defined in the Purchase Agreement), subject to
the terms and conditions set forth in this Assignment.
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants and conditions herein contained, the parties hereto (together, the
"Parties," and each sometimes a "Party") hereby act and agree as follows:
1. Assignment and Assumption. Assignor hereby assigns, sets over and
transfers to Assignee all of Assignor's rights (if any and to the extent
transferable) in, under and to the following:
(a) [Marks. Each trademark, trade name, service xxxx, logo or other
proprietary name, xxxx or design which is assignable in conjunction with a sale
of the Hotel and which is used exclusively in connection with the Hotel,
together with all the good will associated with the use of such name, xxxx or
design in connection the Hotel.]
(b) Permits. Each permit, certificate, license or other form of
authorization or approval issued by a government agency or authority and legally
required for the proper operation and use of the Hotel (including, without
limitation, any certificates of occupancy with respect to the Hotel Improvements
(as defined in the Purchase Agreement), elevator permits, conditional use
permits, zoning variances and business licenses, but excluding liquor licenses)
to the extent transferable with the Hotel.
(c) Repair Warranties. Each written guaranty, warranty or other
obligation for repair or maintenance, from any contractor, manufacturer or
vendor, with respect to any of the Hotel improvements, furnishings, fixtures or
equipment, to the extent assignable in connection with a sale of the Hotel.
F-1
(d) Reservations. Each reservation, commitment or agreement for the
use of guest rooms, conference rooms, dining rooms or other facilities in the
Hotel, to the extent pertaining to periods from and after the date hereof
("Reservations").
(e) Reservation Deposits. Each deposit or advance payment received by
Seller or the Manager (as defined in the Purchase Agreement) in connection with
any Reservation.
(f) Accounts. The account receivable for each person who is a guest
at the Hotel on the night immediately preceding the date hereof ("Guest
Accounts") and all other Accounts (as defined in the Purchase Agreement) of the
Hotel set forth on Exhibit A hereto (collectively, "Assumed Accounts").
(g) Records, Plans and Studies. On-site records, files and other
written materials and electronic data pertaining to the operation of the Hotel,
all existing plans and specifications for the Hotel improvements and any and all
studies, analyses, reports and other such written materials or electronic data
pertaining to the condition of the Hotel.
(h) Other Intangibles. All other intangible personal property rights
of whatever nature constituting part of the good will of the Hotel, except for
"Leases" and "Contracts" (as defined in the Purchase Agreement) and rights which
are expressly excluded from the sale of the Hotel under the Purchase Agreement.
Assignee accepts such assignment subject to all of the reservations,
restrictions, limitations and other conditions applicable to Assignor's own use,
exploitation and enjoyment of the Intangibles and hereby assumes all of the
obligations and liabilities of Assignor, accruing from and after the date
hereof, with respect to each of the Marks, Permits, Reservations, Reservation
Deposits and Assumed Accounts.
2. No Impairment of Purchase Agreement Provisions. Nothing contained in
this Assignment shall be deemed to limit, waive or otherwise derogate from any
warranty, representation, covenant or indemnification made in the Purchase
Agreement by either Party and none of such provisions in the Purchase Agreement
shall be deemed to have merged into this Assignment.
3. Further Assurances. Assignor shall promptly execute and deliver to
Assignee any additional instrument or other document which Assignee reasonably
requests to evidence or better effect the assignment contained herein.
4. Counterparts. This Assignment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which taken together shall constitute but one and the same
instrument.
5. Governing Law. This Assignment shall be deemed to be an agreement made
under the laws of the State of New York and for all purposes shall be governed
by and construed in accordance with such laws.
F-2
6. Binding Effect. This Assignment shall be binding upon and inure to the
benefit of, respectively, Assignor and Assignee and their respective successors
and assigns.
7. Warranty of Signers. Each individual executing and delivering this
Assignment on behalf of Assignor hereby represents and warrants to Assignee that
such individual has been duly authorized and empowered to make such execution
and delivery.
[SIGNATURES ON FOLLOWING PAGE]
F-3
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be
executed and delivered by their respective representatives, thereunto duly
authorized, as of the date first above written.
ASSIGNOR: [NAME OF ASSIGNOR],
a [jurisdiction/entity]
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
ASSIGNEE: [NAME OF ASSIGNEE],
a [jurisdiction/entity]
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
F-4
EXHIBIT A
Assumed Accounts
F-5
Exhibit G
---------
HOTEL PARCELS
[Attached]
X-0
Xxxxxxxx, XX
EXHIBIT G
A tract of land situated in Tract 1 and the Easterly 300.40 feet of Tract
2, Capitol View Addition lying in the SW 1/4 Xxxxxxx 0, Xxxxxxxx 00 Xxxxx, Xxxxx
00 Xxxx, Xxxx of Cheyenne, Laramie County, Wyotning, more particularly described
as follows:
Commencing at the West one-sixteenth corner common to Sections 5 and 8,
Township 13 North, Range 66 West;
thence North 00DEG.17'00" West, a distance of 40.55 feet to the Southeast
corner of Tract 1;
thence North 89DEG.29'45" West, along the South line of Tract 1, a distance
of 184.95 feet to the point of beginning;
thence continuing North 89DEG.29'45" West, along the South line of
tract 1, a distance of 425.48 feet to the Southwest corner of Tract 1;
thence North 89DEG.29'45" West, along the South line of Tract 2, a
distance of 300.40 feet;
thence North 00DEG.30'15" East, a distance of 419.83 feet to the North
line of Tract 2;
thence North 85DEG.42'00" East, along the North line of Tract 2, a
distance of 589.95 feet;
thence Xxxxx 00XXX.00'00" Xxxx, a distance of 299.90 feet;
thence Xxxxx 00XXX.00'00" Xxxx, a distance of 201.62 feet to the point
of beginning.
G-2
Parcel One: Fresno, CA
That portion of the southeast quarter of Section 00, Xxxxxxxx 00 Xxxxx, Xxxxx 21
East, Mount Diablo Base and Meridian, In the City of Fresno, County of Fresno,
State of California, according to the official plat thereof described as
follows:
Beginning at the southeast corner of said Section 30; thence North 89DEG.
57' 24" West along the south line of said southeast quarter of Section 30; a
distance of 2551.00 feet; thence North 00DEG. 11' 43" East parallel with the
east line of said southeast quarter of Section 30, a distance of 874.62 feet to
the point of curvature of a curve, concave to the Southeast, whose Interior
angle is 70DEG. 13' and a radius of 1,000 feet; thence Northeasterly, along
said curve, and along the northwesterly right of way line of North Gateway
Boulevard as disclosed on the map of Tract No. 2392, Fresno Airport Center 2,
recorded June 26, 1973 In Book 28, Page 12, of Maps, records of said county, an
arc distance of 1225.51 feet to the point of tangency; thence North 70DEG.
24' 43" East a distance of 20.19 feet to the true point of beginning; thence
North 70DEG. 24' 43" East a distance of 577.47 feet to the point of curvature
of a curve, concave to the West, whose Interior angle is 94DEG. 57' 39" and
radius is 15.00 feet; thence Northeasterly and Northwesterly along said curve
and arc distance of 24.86 feet to the point of curvature of a curve, concave to
the southwest, whose Interior angle is 22DEG. 17' 39" and radius is 936.00 feet;
thence Northwesterly, along said curve an arc distance of 364.20 feet; thence
South 70DEG. 24' 43" West a distance of 492.00 feet; thence South 19DEG. 35' 17"
East a distance of 364.00 feet to the true point of beginning, being Parcel A of
Parcel Map No. 76-57 in the City of Fresno, County of Fresno, State of
California, according to the map thereof, recorded in Book 23, Page 24, of
Parcel Maps, records of said county.
Pursuant to lot line adjustment No. 24-77.
Parcel Two:
That portion of the southeast quarter of Section 00, Xxxxxxxx 00 Xxxxx, Xxxxx 21
East, Mount Diablo Base and Meridian, In the City of Fresno, County of Fresno,
State of California, according to the official plat thereof described as
follows:
Beginning at the southeast corner of said Section 30, thence North 89DEG.
57' 24" West along the south line of said southeast quarter of Section 30, a
distance of 2551.00 feet; thence North 00DEG. 11' 43" East parallel with the
east line of said southeast quarter of Section 30, a distance of 874.62 feet to
the point of curvature of a curve, concave to the Southeast, whose Interior
angle is 70DEG. 13' and radius is 1000 feet; thence Northeasterly, along
said curve, through a delta angle 58DEG. 06' 20" an arc distance of 1014.13
feet to the true point of beginning; thence continuing Northeasterly along said
curve, through a delta angle of 12DEG. 06' 40" an arc of 211.38 feet to the
point of tangency; thence North 70DEG. 24' 43" East a distance of 20.19
feet; thence North 19DEG. 35' 17" West a distance of 364.00 feet; thence
South 70DEG. 24' 43" West a distance of 230.00 feet; thence South 19DEG.
35' 17" East a distance of 386.26 feet to the true point of beginning, being
Parcel B of Parcel Map Xx. 00-00, Xx xxx Xxxx xx Xxxxxx, Xxxxxx of Fresno, State
of California, according to the map thereof, recorded in Book 23, Page 24, of
Parcel Maps records of said county.
Pursuant to lot line adjustment No. 24-77.
Parcel Three:
The rights and easements as contained in that certain Agreement Granting
Reciprocal Easements, dated July 22, 2003 and executed by Hotel Venture West,
LP, Texas limited partnership and between Hotel Venture Limited Partnership, a
Delaware limited partnership recorded July 24, 2003, as Instrument No.
2003-168318, Official Records, Fresno County Records
Assessor's Parcel Number: 000-000-00
Arb. Numbers : 000-000-00-00, 06 and 07
000-000-00, 06.01 and 06-01-01
X-0
Xxxx Xxxxx, XX
The property described hereon is the same property described in Block 516 of
Reserve Addition, Fort Xxxxx, Xxxxxxxxx County, Arkansas and that part of the
right-of-way from Xxxxxx Avenue between Block 516 and Block 522 of Reserve
Addition which is part of the Northwest Quarter of the Northeast Quarter of
Fractional Section 17, Township 8 North, Range 32 West, Fort Xxxxx, Xxxxxxxxx
County, Arkansas, more particularly described as follows:
Beginning at the northernmost corner of said Block 516, said point being the
intersection of the Southeasterly right-of-way of Xxxxx 0xx Xxxxxx and the
Southwesterly right-of-way of Xxxxxx Avenue; thence Southeasterly along said
Southwesterly right-of-way of Xxxxxx Avenue, 300.00 feet to the easternmost
corner of Block 516 and the Northwesterly right-of-way of Xxxxx 0xx Xxxxxx;
thence Southwesterly along said Northwesterly right-of-way, 380.00 feet to the
easternmost corner of Block 522, said point being on the Southwesterly
right-of-way of Xxxxxx Avenue; thence Northwesterly along said Southwesterly
right-of-way, 300.00 feet to the northernmost corner of said Block 522, said
point being on the Southeasterly right-of-way of Xxxxx 0xx Xxxxxx; thence
Northeasterly along said Southeasterly right-of-way of South 7th Street, 380.00
feet to the point of beginning. Being the same property conveyed to the Fort
Xxxxx Plaza, an Arkansas General Partnership by deed from the City of Fort
Xxxxx, Arkansas recorded December 6, 1985 among the land records of Sebastian
County, Arkansas in Book 473 Page 351. Less and except property conveyed to the
City of Fort Xxxxx, Arkansas recorded as Document No. 7014496 and No. 7014497 as
affected by Correction Quitclaim Deed dated June 25, 2003 Filed July 23, 2003,
recorded as Document Xx. 0000000, xxxx xxxxxxx xx Xxxxxxxxx Xxxxxx, Arkansas.
X-0
Xxxx 000,
Xxxxxxx, XX
TRACT ONE: (FEE SIMPLE ESTATE)
METES AND BOUNDS DESCRIPTION of Tract "C" Live Oak Addition to the City of
Lubbock; and a 4.95 feet by 65.42 feet tract, and a portion of Tract "H", Live
Oak Addition to the City of Lubbock; all in Section 12, Block E-2, Lubbock
County, Texas, (Tract "C" being recorded In Volume 1318, Page 102, and Tract "H"
being recorded in Volume 1641, Page 000, Xxxx Xxxxxxx xx Xxxxxxx Xxxxxx, Xxxxx)
being further described as follows:
BEGINNING at a 3/8" Iron rod found in the South right-of-way line of Loop 289,
same point being the Northwest corner of said Tract "C" which bears N
0DEG.03' W, a distance of 3320.35 feet and N 89DEG.57' E, a distance of
1172.00 feet from the Xxxxxxxxx xxxxxx xx Xxxxxxx 00, Xxxxx X-0, Xxxxxxx Xxxxxx,
Xxxxx;
THENCE N 89DEG.57' E along said right-of-way line of Loop 289, a distance of
603.00 feet to an "X" cut in concrete at the Northeast corner of said Tract "C";
THENCE S 0DEG.03' E, a distance of 670.35 feet to a concrete nail found at
the Southeast corner of said Tract "C";
THENCE S 89DEG.57' W. a distance of 537.58 feet to a 3/8" iron rod found at
the most Southwesterly corner of said Tract "C";
THENCE N 0DEG.03' W, a distance of 180.80 feet to a found 1/2" iron rod with
cap;
THENCE S 89DEG.57' W, a distance of 1.00 foot to a found railroad spike;
THENCE N 0DEG.03' W, a distance of 277.10 feet to a point in wall of
building 0.1 feet North and 0.6 feet West of an Interior corner of said
building;
THENCE S 89DEG.57' W, at 14.6 feet pass outside the West wall of said
building, in all, 64.42 feet to a found railroad spike;
THENCE N 0DEG.03' W, at 1.00 foot pass a railroad spike found at the
Southwest corner of said 4.95 feet by 65.42 feet tract, at 5.95 feet pass a
railroad spike found at a corner of said Tract "C", and continuing along the
Westernmost line of said Tract "C" for a total distance of 212.45 feet to the
POINT OF BEGINNING.
TRACT TWO: (EASEMENT ESTATE)
Non-Exclusive Easement for Ingress, Egress and Regress and that certain
non-exclusive easement of use of a public parking area as created in that
certain "Restrictions and Joint Easement" by and between Western Associates,
Inc. and Orchid Gardens, Inc., on May 2,1978, recorded In Volume 1580, Page 731
of the Deed Records of Lubbock County, Texas; being further described as
follows:
The Easternmost Twenty-Four (24') feet of the herein below described property
pursuant to Paragraph 1, Page 3, according to the "Restrictions and Joint
Easement" thereof recorded in Volume 1580, Page 731 of the Deed Records of
Lubbock County, Texas;
A tract of land out of Xxxxxxx 00, Xxxxx X-0, Xxxxxxx Xxxxxx, Xxxxx and being
more particularly described as follows:
G-5
BEGINNING at a 3/8" iron rod set for the Southwest and beginning corner of this
tract, from whence the Southwest corner of Section 12 bears South 89DEG.57'
West, 799.95 feet and South 0DEG.03' East, 2640.0 feet;
THENCE North 0DEG.03' West, at 10.0 feet pass an iron rod continuing for a
total distance of 680.35 feet to a 3/8" iron rod set in the south right-of-way
line of Loop 289 for the Northwest corner of this tract;
THENCE North 89DEG.57' East, along said right-of-way, 372.05 feet to a 3/8"
iron rod set for the North-Northeast corner of this tract;
THENCE South 0DEG.03' East, 206.5 feet to a 3/8" iron rod set for an
L-corner of this tract;
THENCE North 89DEG.57' East, 65.42 feet to a 3/8" iron rod set for the
East-Northeast corner of this tract;
THENCE South 0DEG.03' East, at 453.85 feet pass an iron rod and continuing
for a total distance of 463.85 feet to a 3/8" iron rod set for the Southeast
corner of this tract;
THENCE South 89DEG.57' West, 437.47 feet to the PLACE OF BEGINNING.
X-0
Xxxxxx X,
Xxxxxxx, XX
Lot One (1), Block Six (6), Memorial Center Addition to the City of Lubbock,
Lubbock County, Texas, said being a replat of Xxxxxxx Subdivision, Xxxx Xxxxx
Ford Addition, a part of Norton Addition and Blocks 81, 65 and part of 49,
Original Town City of Lubbock, Lubbock County, Texas according to the map, plat
and/or dedication deed thereof, recorded in Volume 1354, Page 000, Xxxx Xxxxxxx,
Xxxxxxx Xxxxxx, Xxxxx and Corrected in Volume 1355, Page 000, Xxxx Xxxxxxx,
Xxxxxxx Xxxxxx, Xxxxx, being further described by metes and bounds as follows:
BEGINNING at a 3/4" square tube found at the Southwest corner of Lot 1, said
tube bears North a distance of 325.00 feet and East a distance of 14.00 feet
from the original Southwest corner of Xxxxxxx Subdivision;
THENCE North a distance of 260.00 feet along the East line of Avenue Q to a
point of curvature;
THENCE Northeasterly, an arc length of 37.87 feet around a curve to the right,
said curve having a radius of 25.00 feet, a central angle of 86DEG.48'04",
tangent lengths of 23.64 feet, and a chord bearing of N 43DEG.24'02" E,
34.35 feet to an "X" found in concrete for a point of reverse curvature;
THENCE Northeasterly an arc length of 239.12 feet along the South line of 8th
Street, around a non-tangent curve to the left, said curve having a radius of
448.00 feet, central angle of 30DEG.57'23", tangent lengths of 124.06 feet,
and a chord bearing of N 71DEG.22'19" E, 239.12 feet (Record: central angle
of 30DEG.45'04", tangent lengths of 123.19 feet, and a chord distance of
227.57 feet) to a "crow's foot" found in sidewalk;
THENCE Northeasterly an arc length of 229.91 feet, around a curve to the right,
said curve having a radius of 388.00 feet, central angle of 33DEG.57',
tangent lengths of 118.44 feet, and a chord bearing N 73DEG.01'30" E, 226.56
feet to a found 3/8" rod;
THENCE East a distance of 118.72 feet to a 3/8" Iron rod found at a point of
curvature;
THENCE Southeasterly an arc length of 39.27 feet, around a curve to the right,
said curve having a radius of 25.00 feet, and a chord bearing S 45DEG. E,
35.36 feet to a found 1/2" rod;
THENCE South a distance of 234.18 feet along the West line of Avenue O to a
"crow's foot" cut in concrete for a point of curvature;
THENCE Southeasterly (Record: Southwesterly) an arc length of 169.89 feet,
around a curve to the left, said curve having a radius of 717.86 feet, a
central angle of 13DEG.33'34", tangent lengths of 85.34 feet, and a chord
bearing of S 6DEG.46'47" E, 169.49 feet to an "X" cut in concrete for the
Southeast corner of Lot 1;
THENCE West a distance of 630.61 feet along the North line of an alley and Lot 2
to the POINT OF BEGINNING and containing 5.23 acres, more or less.
X-0
Xxxxxxxx, XX
That part of S1/2NW1/4 of Section 17, Township 1 South, Range 26 East, of the
Principal Montana Meridian, in the City of Xxxxxxxx, Yellowstone County,
Montana, described as Tracts 4 and 5, of CERTIFICATE OF SURVEY NO. 1091, on file
in the office of the Clerk and Recorder of said County, under Document No.
819695.
EXCEPT that part conveyed to the State of Montana for the benefit and use of its
State Highway Commission by Bargain and Sale Deed recorded December 15, 1992, in
Book 1387, Page 4167, under Document 1664254, records of Yellowstone County,
Montana.
G-8
Exhibit H
---------
HOTEL PROPERTIES
1. Holiday Inn Grand Montana, 5500 Midland Road, Billings, Montana
2. Holiday Inn Cheyenne, 000 Xxxx Xxx Xxxx Xxxx, Xxxxxxxx, Xxxxxxx
3. Holiday Inn City Center, 000 Xxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxxx
4. Holiday Inn Fresno Airport, 0000 Xxxx Xxxxxxx Xxx, Xxxxxx, Xxxxxxxxxx
5. Holiday Inn Park Plaza, 0000 Xxxxx Xxxx 000, Xxxxxxx, Xxxxx
6. Holiday Inn Hotel and Towers, 000 Xxxxxx X, Xxxxxxx, Xxxxx
H-1
Exhibit I
---------
RECORDING REQUESTED BY:
AND WHEN RECORDED, MAIL TO:
________________________________________________________________________________
[FOR RECORDER'S USE ONLY]
FORM OF
TENANT LEASES ASSIGNMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment") is made as of
[insert date], by and between [NAME OF SELLER], a [jurisdiction/entity]
("Assignor"), and [NAME, entity type and jurisdiction of Buyer or nominee]
("Assignee").
RECITALS
--------
C. Assignor has entered into that certain Agreement of Purchase and
Sale (the "Purchase Agreement") for the [Name and location of Hotel], including
all the parcels of land described in Exhibit A hereto (altogether, the
"Property"), dated as of [insert date of Purchase Agreement], between Assignor,
as "Seller," and AP/APMC Partners, LLC, as "Buyer," for purchase of the land
described in Exhibit A attached hereto, together with the improvements thereon
(altogether, the "Property"). All of Buyer's rights under the Purchase Agreement
have been assigned to Assignee.
D. In conjunction with the sale and purchase of the Property, the
Purchase Agreement obligates Assignor to assign to Assignee, and Assignee to
assume, all of the lessor's interest under the space leases encumbering the
Property, as identified in the Schedule of Leases attached hereto as Exhibit B,
subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants
and conditions herein contained, the parties hereto (together, the "Parties,"
and each sometimes a "Party") hereby act and agree as follows:
1. Assignment. Assignor hereby assigns, sets over and transfers to
Assignee, and Assignee hereby takes and accepts from Assignor, all of Assignor's
rights, title and interest as lessor in, under and to each of the Leases and to
all rents and other sums hereafter owing and all other rights, benefits and
privileges hereafter accruing to the lessor thereunder.
2. Assumption of Obligations and Liabilities by Assignee. Assignee hereby
assumes all of the obligations and liabilities of Assignor under each of the
Leases accruing from and after the date hereof.
3. Indemnifications by Assignor and Assignee. Assignor shall indemnify
Assignee, its successors and assigns, from and against any claim or liability
for breach or default on the part of the lessor under any Lease based on an
event occurring (or alleged to have occurred) or a condition arising (or alleged
to have arisen) before the date hereof. Assignee shall
I-1
indemnify Assignor, its successors and assigns, from and against any claim or
liability for breach or default on the part of the lessor under any Lease based
on an event occurring (or alleged to have occurred) or a condition arising (or
alleged to have arisen) on or after the date hereof.
4. No Impairment of Purchase Agreement Provisions. Nothing contained in
this Assignment shall be deemed to limit, waive or otherwise derogate from any
warranty, representation, covenant or indemnification made in the Purchase
Agreement by either Party and none of such provisions in the Purchase Agreement
shall be deemed to have merged into this Assignment.
5. Further Assurances. Assignor shall promptly execute and deliver to
Assignee any additional instrument or other document which Assignee reasonably
requests to evidence or better effect the assignment contained herein.
6. Counterparts; Recording. This Assignment may be executed in any number
of counterparts and by each Party on a separate counterpart or counterparts,
each of which when so executed and delivered shall be deemed an original and all
of which taken together shall constitute but one and the same instrument. Only
Assignee, or its successor or assign, shall have the right to record this
Assignment and Assignor shall not record any counterpart hereof.
7. Governing Law. This Assignment shall be deemed to be an agreement made
under the laws of the [state where the Property is located] [State of New York]
and for all purposes shall be governed by and construed in accordance with such
laws.
8. Binding Effect. This Assignment shall be binding upon and inure to the
benefit of each of the Parties and its successors and assigns.
9. Warranty of Signers. Each individual executing and delivering this
Assignment on behalf of a Party hereby represents and warrants to the other
Party that such individual has been duly authorized and empowered to make such
execution and delivery.
[SIGNATURES ON FOLLOWING PAGE]
I-2
IN WITNESS WHEREOF, the Parties have caused this Assignment to be executed and
delivered by their respective representatives, thereunto duly authorized, as of
the date first above written.
ASSIGNOR: [NAME OF SELLER],
a [jurisdiction/entity]
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
ASSIGNEE: [NAME, entity, jurisdiction of Buyer or
nominee]
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
I-3
ACKNOWLEDGEMENTS
----------------
STATE OF )
) ss:
COUNTY OF ____________________)
On _________________, before me, ____________________, personally appeared
_________________________________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
________________________________________ [SEAL]
STATE OF CALIFORNIA )
) ss:
COUNTY OF ____________________)
On _________________, before me, ____________________, personally appeared
_____________________________________, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
________________________________________ [SEAL]
I-4
EXHIBIT A
Land
I-5
EXHIBIT B
Schedule of Leases
I-6
Exhibit J
---------
SCHEDULE OF OFFSITE RIGHTS
The items set forth on Schedule 5.1(h) are incorporated herein by
reference.
J-1
Exhibit K
---------
RECORDING REQUESTED BY:
AND WHEN RECORDED, MAIL TO:
________________________________________________________________________________
[FOR RECORDER'S USE ONLY]
FORM OF
AGREEMENT FOR ASSIGNMENT AND ASSUMPTION
OF OFFSITE RIGHTS
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment") is made as of
[insert date], by and between [NAME OF SELLER], a [jurisdiction/entity]
("Assignor"), and [legal name, entity type and jurisdiction of Buyer or nominee]
("Assignee"), on the other.
RECITALS
--------
A. Assignor has entered into that certain Agreement for Purchase and
Sale (the "Purchase Agreement") for the Hotels specified therein, including all
the parcels of land described in Exhibit A hereto (altogether, the "Hotel"),
dated as of [insert date of Purchase Agreement], between Assignor, as "Seller,"
and AP/APMC Partners, LLC, as "Buyer." All of Buyer's rights under the Purchase
Agreement have been assigned to Assignee.
B. In conjunction with the sale and purchase of the Hotel, the
Purchase Agreement obligates Assignor to assign to Assignee, and Assignee to
assume, all of Assignor's rights, title and interest in, to and under the
"Offsite Rights" (as identified in the Schedule of Offsite Rights attached
hereto as Exhibit B), subject to the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants
and conditions herein contained, the parties hereto (together, the "Parties,"
and each sometimes a "Party") hereby act and agree as follows:
1. Assignment. Assignor hereby assigns, sets over and transfers to
Assignee, and Assignee hereby takes and accepts from Assignor, all of Assignor's
rights, title and interest in, to and under each of the leases, licenses,
agreements, instruments and other documents identified as the Offsite Rights in
Exhibit B hereto and to all rights, benefits and privileges accruing thereunder
or appurtenant thereto.
2. Assumption of Obligations and Liabilities by Assignee. Assignee hereby
assumes all of the obligations and liabilities of Assignor under each of the
Offsite Rights accruing from and after the date hereof.
3. Indemnifications by Assignor and Assignee. Assignor shall indemnify
Assignee, its successors and assigns, from and against any and all claims and
liability, and expenses related thereto (including attorneys' fees actually and
reasonably incurred) for breach
K-1
or default on the part of the owner of the Hotel under any Offsite Right based
on an event occurring (or alleged to have occurred) or a condition arising (or
alleged to have arisen) before the date hereof. Assignee shall indemnify
Assignor, its successors and assigns, from and against any and all claims and
liability, and expenses related thereto (including attorneys' fees actually and
reasonably incurred) for breach or default on the part of the owner of the Hotel
under any Offsite Right based on an event occurring (or alleged to have
occurred) or a condition arising (or alleged to have arisen) on or after the
date hereof.
4. No Impairment of Purchase Agreement Provisions. Nothing contained in
this Assignment shall be deemed to limit, waive or otherwise derogate from any
warranty, representation, covenant or indemnification made in the Purchase
Agreement by either Party and none of such provisions in the Purchase Agreement
shall be deemed to have merged into this Assignment.
5. Further Assurances. Assignor shall promptly execute and deliver to
Assignee any additional instrument or other document which Assignee reasonably
requests to evidence or better effect the assignment contained herein.
6. Counterparts; Recording. This Assignment may be executed in any number
of counterparts and by each Party on a separate counterpart or counterparts,
each of which when so executed and delivered shall be deemed an original and all
of which taken together shall constitute but one and the same instrument. Only
Assignee, or its successor or assign, shall have the right to record this
Assignment and Assignor shall not record any counterpart hereof.
7. Governing Law. This Assignment shall be deemed to be an agreement made
under the laws of the State of New York and for all purposes shall be governed
by and construed in accordance with such laws.
8. Binding Effect. This Assignment shall be binding upon and inure to the
benefit of each of the Parties and its successors and assigns.
9. Warranty of Signers. Each individual executing and delivering this
Assignment on behalf of a Party hereby represents and warrants to the other
Party that such individual has been duly authorized and empowered to make such
execution and delivery.
[SIGNATURES ON FOLLOWING PAGE]
K-2
IN WITNESS WHEREOF, the Parties have caused this Assignment to be executed
and delivered by their respective representatives, thereunto duly authorized, as
of the date first above written.
ASSIGNOR: [NAME OF SELLER],
a [jurisdiction/entity]
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
ASSIGNEE: [NAME, entity, jurisdiction of Buyer or
nominee]
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
K-3
ACKNOWLEDGEMENTS
STATE OF )
) ss:
COUNTY OF ____________________)
On __________________________________, before me, _____________________________
___________, personally appeared ___________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
________________________________________ [SEAL]
STATE OF CALIFORNIA )
) ss:
COUNTY OF ____________________)
On __________________________________, before me, _____________________________
___________, personally appeared _____________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
________________________________________ [SEAL]
K-4
EXHIBIT A
Land
K-5
EXHIBIT B
Schedule of Offsite Rights
K-6
Exhibit L
---------
FORM OF
SELLERS' CLOSING CERTIFICATE
[Name of Seller], a [jurisdiction/entity] ("Seller") has entered into that
certain Agreement of Purchase and Sale Agreement for the [Name and location of
Hotel], dated [insert date of Agreement] (the "Purchase Agreement") with AP/APMC
Partners, LLC, which has assigned all of its rights, title and interest under
the Purchase Agreement to [name of assignee] ("Buyer"). Seller hereby certifies
to Buyer that, as of the date of this certificate:
(1) The representations and warranties of Seller contained in the Purchase
Agreement that are qualified as to materiality are true and correct,
and the representations and warranties of Seller contained in the
Purchase Agreement not so qualified as to materiality are true and
correct in all material respects.
(2) Each of the covenants and agreements of Seller to be performed on or
prior to the Closing have been duly performed in all material
respects.
Dated: [Insert Date] [NAME OF SELLER],
a [jurisdiction/entity]
By:
------------------------------------
L-1
Exhibit M
---------
SURVEY OF EACH HOTEL PARCEL
"Minimum Standard Detail requirements for ALTA/ACSM Land title Surveys", jointly
established and adopted by ALTA, ACSM and NSPS in 1999, including Items 2, 3, 4,
6, 7a, 7b1, 7c, 8, 9, 10 and 11 of Table A thereof.
M-1
Exhibit N
---------
FORM OF
HOTEL LICENSE ESTOPPEL CERTIFICATE
TO: AP/APMC Partners, LLC and its assigns ("Buyer")
1301 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxxxxx
[Seller Entity] and its assigns ("Seller")
__________________________________
__________________________________
Attention: _______________________
Re: [Hotel License Agreement between _____________ ("Licensor") and
________________ ("Licensee"), dated as of _____________ (the "Hotel
License Agreement")]
Ladies and Gentlemen:
We understand that Buyer and Seller are entering a transaction pursuant to which
Seller will assign its right, title and interest in and to the Hotel License
Agreement to Buyer or Buyer's assignee (or Buyer will seek to execute a new
hotel license agreement with Licensor). Licensor is delivering this Certificate
in the knowledge that Buyer and its assigns will rely upon it in acquiring
Seller's right, title and interest in and to the Hotel License Agreement.
Therefore, Licensor certifies to each of Buyer, Buyer's assigns and Seller as
follows:
1. Except as referenced above, the Hotel License Agreement has not been
amended or supplemented.
2. The Hotel License Agreement is in full force and effect.
3. There are no existing defaults in the performance by Licensee of any of
Licensee's obligations under the Hotel License Agreement, and Licensor has
no knowledge of any condition or event which, with the giving of notice,
the passage of time, or both, would constitute a default by Licensee under
the Hotel License Agreement.
4. There are no sums currently due and payable to Licensor under the Hotel
License Agreement.
N-1
5. The term of the Hotel License Agreement commenced on [___________] and
expires on [_______]. [Discuss extensions, if applicable.]
Very truly yours,
[Licensor]
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
N-2
Exhibit O
---------
FORM OF
HOTEL MANAGEMENT ESTOPPEL CERTIFICATE
TO: AP/APMC Partners, LLC and its assigns ("Buyer")
1301 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxxxxx
Re: [Hotel Management Agreement between _____________ ("Manager") and
________________ ("Owner"), dated as of _____________ (the "Hotel
Management Agreement")]
Ladies and Gentlemen:
We understand that Buyer and Seller are entering a transaction pursuant to which
Seller will assign its right, title and interest in and to the Hotel Management
Agreement to Buyer or Buyer's assignee (or Buyer will seek to execute a new
hotel management agreement with Manager). Manager is delivering this Certificate
in the knowledge that Buyer and its assigns will rely upon it in acquiring
Seller's right, title and interest in and to the Hotel Management Agreement.
Therefore, Manager certifies to each of Buyer, Buyer's assigns and Seller as
follows:
1. Except as referenced above, the Hotel Management Agreement has not been
amended or supplemented.
2. The Hotel Management Agreement is in full force and effect.
3. There are no existing defaults in the performance by Owner of any of
Owner's obligations under the Hotel Management Agreement, and Manager has
no knowledge of any condition or event which, with the giving of notice,
the passage of time, or both, would constitute a default by Owner under the
Hotel Management Agreement.
4. There are no sums currently due and payable to Manager under the Hotel
Management Agreement.
O-1
5. The term of the Hotel Management Agreement commenced on [___________] and
expires on [_______]. [Discuss extensions, if applicable.]
Very truly yours,
[Manager]
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
O-2
Exhibit P
---------
FORM OF
ASSUMED LOAN ESTOPPEL CERTIFICATE
TO: AP/APMC Partners, LLC and its assigns ("Buyer")
1301 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxxxxx
[Seller Entity] and its assigns ("Seller")
__________________________________
__________________________________
Attention: _______________________
Re: [Loan Agreement between ______________ ("Lender") and
__________________ ("Borrower"), dated as of ____________ (the "Loan
Agreement")]
Ladies and Gentlemen:
We understand that Buyer and Seller are entering a transaction pursuant to which
Seller will assign its right, title and interest in and to the Loan Agreement to
Buyer or Buyer's assignee. Lender is delivering this Certificate in the
knowledge that Buyer and its assigns will rely upon it in acquiring Seller's
right, title and interest in and to the Loan Agreement.
Therefore, Lender certifies to each of Buyer, Buyer's assigns and Seller as
follows:
1. Except as referenced above, the Loan Agreement has not been amended or
supplemented.
2. The Loan Agreement is in full force and effect.
3. There are no existing defaults in the performance by Borrower of any of
Borrower's obligations under the Loan Agreement, and Lender has no
knowledge of any condition or event which, with the giving of notice, the
passage of time, or both, would constitute a default by Borrower under the
Loan Agreement.
4. As of ___________, ___:
(a) The outstanding principal balance under the Loan Agreement was
$______; the amount of undisbursed Loan Agreement funds was $________.
(b) Interest under the Loan Agreement had been paid through ___________,
____; unpaid interest outstanding under the Loan Agreement was
$___________.
P-1
5. All amounts outstanding pursuant to the Loan Agreement mature and are due
and payable on _____________.
Very truly yours,
[Lender]
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
P-2
Exhibit Q
---------
FORM OF
TENANT ESTOPPEL CERTIFICATE
TO: AP/APMC Partners, LLC and its assigns ("Buyer")
1301 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxxxxx
[Name of Seller] and its assigns ("Seller")
__________________________________
__________________________________
Attention: _______________________
RE: Lease of Space (the "Lease") in [Name and location of Hotel] (the
"Hotel") between [Name of Seller and, if applicable: as successor in
title and interest {Lessor party named in Lease}], as lessor, and the
undersigned [if applicable: as successor in interest to {Lessee party
named in Lease}], as lessee
The undersigned is the tenant ("Tenant") under the Lease. Tenant hereby
certifies and agrees as follows:
1. The lease agreement and (if any) the amendment(s) and other documents
identified in Exhibit A to this Certificate are the only agreements evidencing
and governing the Lease, and the Lease, as so identified in Exhibit A hereto, is
in full force and effect and constitutes the entire agreement between the
parties. Tenant acknowledges that the lessor identified above is currently its
landlord (the "Landlord") under the Lease.
2. The commencement date for the initial term of the Lease is [insert
date], [if applicable: the rent commencement date of the Lease is [insert date]
and Tenant took occupancy of the leased premises under the Lease on [insert
date]. The initial term of the Lease will expire on [insert date] and Tenant has
no rights to extend or renew the Lease except as set forth here: ______________.
3. There are not, to the best of Tenant's knowledge, any uncured defaults
on the part of Landlord, or any events or conditions now in existence which
will, with notice or the passage of time or both, constitute a default on the
part of Landlord.
4. There are not any uncured defaults on Tenant's part, or any events or
conditions now in existence which will, with notice or the passage of time or
both, constitute a default on its part.
5. Tenant has made no agreements with Landlord, or with any predecessor
or agent of Landlord, concerning free rent, partial rent, rebate of rental
payments or other rental
Q-1
concession except as set forth in the Lease. Any such period of free rent or
other rent concession has already expired (except as indicated here: _________).
6. There are no unsatisfied obligations on the part of Landlord to
construct, install, alter or repair, or to pay or reimburse the costs of
installing, altering or repairing, any improvements to Tenant's leased premises,
or to make any other payments to or on behalf of Tenant (except as indicated
here: _______________________).
7. Except for a security deposit (if any) in the amount specified below
and for the current month's base rent, Tenant has not made any deposit or paid
any rents or other sums in advance with respect to the Lease.
Amount of Security Deposit: $__________________ (if left blank, none).
8. The current base monthly rent under the Lease is $___________________.
9. The Premises consist of approximately ___________ [net rentable] or
[gross] square feet of [office] [retail] space. [If there are expense
passthroughs: Tenant's share of common area maintenance, taxes and other
operating expenses under the Lease is __% of such expenses {if applicable: in
excess of [stop amounts] [those for calendar year ______]} and Tenant currently
pays $_______ per month on account of such expenses. Tenant has no claims with
respect to any such expense payments made for prior years.]
10. Tenant currently maintains the commercial premises liability and
property hazard insurance policies with respect to its premises in the minimum
amounts and coverage required by the Lease.
11. Tenant has no options, rights of first offer or negotiation or other
such preemptive rights to lease additional space with the Hotel (or to purchase
the Hotel), except for the rights and space(s) specifically described here:
_____________________________________________.
12. There is not currently pending with respect to Tenant, or any majority
shareholder or equity holder (direct or indirect) in Tenant, any proceeding
under the Bankruptcy Code, or under any other law or process for the relief of
debtors or the protection of creditors generally, nor does Tenant (or, to
Tenant's knowledge, any other party) contemplate such a proceeding.
13. The Lease entitles Tenant to the [non-exclusive] or [exclusive] use of
________________ parking spaces at the Hotel.
14. Tenant has not assigned its rights under the Lease or sublet any
portion of the Premises.
15. Tenant has no notice of any prior assignment, hypothecation, grant of
security interest, or pledge by Landlord of the Lease or the rents due
thereunder. Tenant has not assigned, hypothecated, granted a security interest
or pledged its interest in the Lease to any person or entity.
Q-2
16. Tenant's current address for notices under or concerning the Lease is:
----------------------------------
----------------------------------
----------------------------------
17. The individual executing this Certificate on behalf of Tenant is
empowered and authorized to do so.
This Certificate is being delivered in connection with the transfer of the Hotel
to Buyer and Tenant understands and agrees that Buyer, its successors, assigns
and lenders, will be relying upon this Certificate and agrees that each of them
is entitled to do so.
Dated: [insert date]
TENANT: [Name of Tenant]
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
Q-3
EXHIBIT A
Lease Agreement
Q-4
Exhibit R
---------
EQUIPMENT LEASES
See attached.
R-1
CIRCA CAPITAL/HOLIDAY INN
SUMMARY OF EQUIPMENT LEASE AGREEMENTS
EXHIBIT R
------------------------------------------------------------------------------------------------------------------------------------
Property Vendor Type of Contract Contract Date Term Date Provisions Contract Fees Other
------------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx Midland Office Copier Lease 5/24/1999 5/24/2002 30 days written 349.75 a month Terminating
Equipment, Inc. Monthly notice of term June 1st
date of intent
to return
equipment
------------------------------------------------------------------------------------------------------------------------------------
Franco Postalia Postage Meter Xxx-00 Xxx-00 3 yr initial 47.07 monthly Billed
and Scale term Quartely
(Satisfied)
Annual renewal
------------------------------------------------------------------------------------------------------------------------------------
Cheyenne Francoty-postalia Postage Meter 4 year contract 187.65
Rental quarterly
------------------------------------------------------------------------------------------------------------------------------------
Xerographic Copier in Scales Aug 19 1999 Feb 27 2003 automatic 413.37/mth presently this
yearly renewal plus .03 per is on a month
copy over to month basis
1200 since contract
expired
------------------------------------------------------------------------------------------------------------------------------------
Ft. Xxxxx Xxxxxx Office Copiers July 31 2003 July 31 2008 385.00 monthly
Machines
------------------------------------------------------------------------------------------------------------------------------------
CIRCA CAPITAL/HOLIDAY INN
SUMMARY OF EQUIPMENT LEASE AGREEMENTS
EXHIBIT R - Page 2
------------------------------------------------------------------------------------------------------------------------------------
Property Vendor Type of Contract Contract Date Term Date Provisions Contract Fees Other
------------------------------------------------------------------------------------------------------------------------------------
Fresno Caltronics Copier Monthly July 2 2002 July 2 2001 Annual renewal .01727 per copy
Maintenance Acceptance with a minimum
Agreement signature of 9,000 copies
per month
------------------------------------------------------------------------------------------------------------------------------------
Franco Postalia Postage Meter Mar 20 2000 Mar 20 2003 3 yr Initial 47.07 monthly Billed
and Scale term quarterly
(Satisfied)
Annual renewal
------------------------------------------------------------------------------------------------------------------------------------
Lubbock Towers Neopost Postage machine Mar 7 2001 1 year Annual renewal 478.06 yearly
------------------------------------------------------------------------------------------------------------------------------------
Xerox Copiers Oct 24 2003 5 years 249.10+.0105
per copy
------------------------------------------------------------------------------------------------------------------------------------
Xerox Copiers Oct 24 2003 5 years 113.58+.0137
per copy
------------------------------------------------------------------------------------------------------------------------------------
Lubbock Plaza Francotyp-Postalia Postage Meter May 28 1996 May 28 1999 3 Yr initial 113.07 Quarterly
and Scale Contract
fulfilled
------------------------------------------------------------------------------------------------------------------------------------
Xerox Copiers Nov 26 2003 Montly 60 month 518.46
------------------------------------------------------------------------------------------------------------------------------------
--------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Exhibit S
---------
FORM OF
NOTICE TO TENANT OF
SALE OF HOTEL (LEASE)
BY CERTIFIED MAIL ONLY
[Name and Address of Franchisor or Licensor]
Re: Hotel License Agreement dated [date of agreement] (the "Hotel License
Agreement")
Dear Tenant:
On [Closing Date], the property known as the [Name of Hotel], located at
[address of Hotel] (the "Hotel"), with respect to which you are a Franchisor or
Licensor under the Hotel License Agreement, was sold to [name of Buyer]
("Buyer").
Henceforth, all fees and other payments due under the Hotel License Agreement
should be remitted to Buyer's manager at the following address:
[Address for fee payments]
and notice and other communications to landlord under or with respect to the
Lease should be delivered to:
[Name and address for notices]
until you are directed otherwise by Buyer or Buyer's manager.
Very truly yours,
[Name of Seller and/or the Manager, as
appropriate]
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
S-1
