PURCHASE AND SALE AGREEMENT by and among FELCOR LODGING TRUST INCORPORATED AND CERTAIN OF ITS AFFILIATES, as Sellers, and HOSPITALITY PROPERTIES TRUST, as Purchaser January 20, 2006
Exhibit 10.35
by and among
FELCOR LODGING TRUST INCORPORATED AND CERTAIN OF ITS AFFILIATES,
as Sellers,
as Sellers,
and
HOSPITALITY PROPERTIES TRUST,
as Purchaser
as Purchaser
January 20, 2006
THIS PURCHASE AND SALE AGREEMENT is made as of January 20, 2006, by and among (i) FELCOR
LODGING TRUST INCORPORATED, a Maryland real estate investment trust (“FCH”), (ii) the
entities listed as “sellers” on the signature pages of this Agreement (each, individually, a
“Seller” and collectively, the “Sellers”), and (iii) HOSPITALITY PROPERTIES TRUST,
a Maryland real estate investment trust (the “Purchaser”).
WITNESSETH:
WHEREAS, the Sellers are the owners or ground lessees of the seven (7) Properties (all
capitalized terms used and not otherwise defined herein having the meanings ascribed to such terms
in Section 1); and
WHEREAS, the Purchaser desires to purchase the Properties, as more fully set forth below; and
WHEREAS, the Sellers are willing to sell all of the Properties to the Purchaser, subject to
and upon the terms and conditions hereinafter set forth; and
WHEREAS, FCH owns, directly or indirectly, all of the Sellers and the transactions
contemplated by this Agreement are of direct and material benefit to FCH;
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, the mutual receipt and legal sufficiency of which are hereby acknowledged,
the FCH Parties and the Purchaser hereby agree as follows:
SECTION 1. DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings set forth below or in the
Section of this Agreement referred to below:
1.1 “Agreement” shall mean this Purchase and Sale Agreement, together with
Schedules A-H attached hereto, as it and they may be amended from time to time as herein
provided.
1.2 “Allocable Purchase Price” shall mean, with respect to each Property, the amount
set forth in Schedule A opposite the name of such Property, it being understood and agreed
that
the aggregate amount of the Allocable Purchase Prices of the Properties shall be One Hundred
Sixty Million Two Hundred Thousand ($160,200,000), subject to adjustment pursuant to Section
2, in which event, the Allocable Purchase Price shall be adjusted proportionately.
1.3 “Assets” shall mean, with respect to any Hotel, collectively, all of the Real
Property, the Ground Leases, the FAS, the FF&E, the Contracts, the Documents, the Improvements, the Intangible Property, the Inventories, the Expendables and the Tenant Leases owned by any
of the Sellers in connection with or relating to such Hotel.
1.4 “Booking” means a booking, contract or other reservation for the future use
of guest rooms, banquet facilities, meeting rooms or other Hotel facilities and off-site catering
for which a Booking Deposit has been received on behalf of Seller, or for which a written proposal
has been made by or on behalf of Seller and accepted by the recipient of such proposal or for which
a written proposal has been received and accepted by or on behalf of Seller (regardless of whether
a Booking Deposit has been received) for any period after the Proration Time.
1.5 “Booking Deposit” means all room reservation deposits, public function,
banquet, food and beverage deposits and other deposits or fees for Bookings.
1.6 “Brand” shall mean, with respect to each Hotel, the brand under which such
Hotel is operated as indicated on Schedule A, together with the Brand Standards applicable
thereto, and all of the attributes and features customarily associated with such brand of hotels in
North America from time to time.
1.7 “Brand Standards” shall mean, with respect to any Hotel, the standards of
operation, as amended from time to time, in effect at substantially all hotels which are operated
under the Brand name of such Hotel, which standards shall include, but not be limited to, standards
of operation from time to time required of owners of similar hotels or as may be specified in
manuals and other guidelines in effect with respect to such Brand.
1.8 “Business Day” shall mean any day other than a Saturday, Sunday or any other day
on which banking institutions
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in The Commonwealth of Massachusetts or the State of New York are
authorized by law or executive action to close.
1.9 “Capital Replacements” shall mean, collectively, the replacements and renewals to
the FF&E and the repairs, replacements, corrections, maintenance, alterations, improvements,
renovations, installations, replacements, renewals and additions to be performed by either the
Seller or the Purchaser in accordance with the terms of this Agreement.
1.10 “Closing” shall have the meaning given such term in Section 2.2.
1.11 “Closing Date” shall have the meaning given such term in Section 2.2.
1.12 “Code” shall mean the Internal Revenue Code of 1986, as amended.
1.13 “Contracts” shall mean, with respect to any Property, all hotel licensing
agreements and other service contracts, equipment leases, booking agreements and other arrangements
or agreements to which any of the Sellers is a party affecting the ownership, repair, maintenance,
management, leasing or operation of such Property, to the extent the Sellers’ interest therein is
assignable or transferable.
1.14 “Deposit” shall have the meaning given such term in Section 2.3.
1.15 “Documents” shall mean, with respect to any Property, all books, records and
files relating to the leasing, maintenance, management or operation of such Property.
1.16 “Entity” shall mean any corporation, general or limited partnership, limited
liability company or partnership, stock company or association, joint venture, association,
company, trust, bank, trust company, land trust, business trust, cooperative, any government or
agency, authority or political subdivision thereof or any other entity.
1.17 “Escrow Agent” shall mean Fidelity National Title Insurance Company or such
other person as shall be reasonably acceptable to the Purchaser and the Sellers.
1.18 “Expendables” means blankets, linens, tableware, china, glassware, uniforms and
other goods of an expendable nature owned or leased by Sellers (or Hotel Operator as agent for
Seller) in connection with the ownership or operation of the
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Hotels; provided, however, the term
Expendables does not include FF&E or Inventory.
1.19 “FAS” shall mean all items included within “Property and Equipment” under the
Uniform System of Accounts, including, but not limited to, Expendables, whether used in connection
with public space or guest rooms.
1.20 “FCH” shall have the meaning given such term in the first paragraph of this
Agreement.
1.21 “FCH Capital Replacements” shall have the meaning given such term in Section
2.3 of this Agreement.
1.22 “FCH Parties” shall mean, collectively, FCH and the Sellers.
1.23 “FF&E” shall mean, with respect to any Property, all appliances, machinery,
devices, fixtures, appurtenances, equipment, furniture, furnishings and articles of tangible
personal property of every kind and nature whatsoever located in or at, or used in connection with,
the ownership, operation or maintenance of such Property.
1.24 “Ground Leases” shall mean, collectively, (i) a Lease, dated June 24, 1980, as
amended and assigned, with respect to the Miami Airport Crowne Plaza, Miami, Florida, and (ii) a
Lease, dated January 8, 1965, as amended and assigned, with respect to the Xxxxxxx Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx, Xxxxxxx.
1.25 “Ground Lease Property” shall mean a Property subject to a Ground Lease, and the
applicable Seller’s entire right, title and interest therein.
1.26 “Hotel” shall mean each hotel located at the properties identified on
Schedule A, the legal descriptions of which are set forth on Schedules C-1 through
C-7.
1.27 “Hotel Operator” shall mean InterContinental Hotels Group, PLC or its
affiliates, Sellers’ hotel operator.
1.28 “HPT Capital Replacements” shall have the meaning given such term is Section
2.3 of this Agreement.
1.29 “IHG” shall mean InterContinental Hotels Group, PLC, a United Kingdom
corporation.
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1.30 “IHG Management Agreement” shall mean a management agreement, dated as of the
Closing Date, between the Purchaser, or its affiliates, as owner, and IHG, or its affiliates, as
manager, with respect to, inter alia, the Properties.
1.31 “IHG Parent Guaranty” shall mean a guaranty agreement executed by IHG, for the
benefit of the Purchaser, inter alia, pursuant to which the payment or performance of IHG’s
and its affiliates’ obligations under the IHG Management Agreement, or any portion thereof, are
guaranteed, together with all modifications, amendments and supplements thereto.
1.32 “IHG Security Deposit Agreement” shall mean a security deposit agreement, dated
as of the Closing Date, between the Purchaser, or its affiliates, and IHG, or its affiliates.
1.33 “Improvements” shall mean, with respect to any Property, all buildings,
fixtures, walls, fences, landscaping and other structures and improvements situated on, affixed or
appurtenant to the Real Property with respect to such Property.
1.34 “Inspection Period” shall mean the period expiring on the Closing Date.
1.35 “Intangible Property” shall mean, with respect to any Property, all transferable
or assignable Licenses and Permits, development rights and approvals, certificates, licenses,
warranties and guarantees, the Contracts, telephone exchange numbers identified with such Property
held by any of the Sellers and all other transferable intangible property, miscellaneous rights,
benefits and privileges of any kind or character with respect to such Property.
1.36 “Inventories” shall mean, with respect to each Hotel, all consumable products
used in connection with the operation of each Hotel.
1.37 “Legal Requirements” shall mean, with respect to any Property, all federal,
state, county, municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees, injunctions and requirements affecting such Property, the Hotel
located thereon, or the maintenance, construction, alteration, management or operation thereof,
whether now or hereafter enacted or in existence.
1.38 “Licenses and Permits” means all certificates of occupancy and all zoning,
subdivision, building, safety and health approvals and all other licenses, permits and
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entitlements
issued by governmental authorities and owned by Seller in connection with and relating solely to
the operation, ownership or subdivision of the Hotels, including those identified on Schedule
D.
1.39 “Permitted Encumbrances” shall mean, with respect to any Property, (a) liens for
taxes, assessments and governmental charges with respect to such Property not yet due and payable
or due and payable but not yet delinquent; and (b) such other nonmonetary encumbrances with respect
to such Property which are not objected to by the Purchaser in accordance with Section 3.2.
1.40 “Person” shall mean an individual, partnership, joint venture, corporation,
limited liability company, real estate investment trust, any other form of business organization,
and any government or governmental authority.
1.41 “Properties” shall mean, collectively, all of the Assets relating to the
properties identified on Schedule A, the legal descriptions of which are set forth in
Schedules C-1 through C-7.
1.42 “Proration Time” shall mean, with respect to each Hotel, 11:59 p.m. local
time on the day immediately preceding the Closing Date, provided, however, with
respect to food and beverage services at bars, restaurants or lounges at each Hotel, the Proration
Time means 3:00 a.m. local time on the Closing Date.
1.43 “Purchase Price” shall mean the sum of the Allocable Purchase Prices, but
in no event more than One Hundred Sixty Million Two Hundred Thousand ($160,200,000), subject to
adjustment pursuant to Section 2 and Section 9.
1.44 “Purchaser” shall have the meaning given such term in the first paragraph of
this Agreement.
1.45 “Real Property” shall mean, with respect to any Property, the real property
described in the applicable Schedule C-1 through C-7, together with all easements, rights of way, privileges, licenses and
appurtenances which the Sellers may own with respect thereto.
1.46 “Rent Roll” shall mean Schedule E to this Agreement.
1.47 “Sellers” shall have the meaning given such term in the first paragraph of this
Agreement.
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1.48 “Subsidiary” shall mean with respect to any Person, any Entity (a) in which such
Person owns directly, or indirectly through one or more Subsidiaries, twenty percent (20%) or more
of the voting or beneficial interest or (b) which such Person otherwise has the right or power to
control (whether by contract, through ownership of securities or otherwise).
1.49 “Surveys” shall have the meaning given such term in Section 3.2.
1.50 “Tenant Deposits” shall mean all deposits identified on the Rent Roll and held
by Sellers under the Tenant Leases.
1.51 “Tenant Leases” shall mean, with respect to any Property, all leases, rental
agreements or other agreements (other than agreements for letting of rooms or other facilities to
hotel guests), including all amendments or modifications thereto), which entitle any person to have
rights with respect to the use or occupancy of any portion of such Property.
1.52 “Title Commitments” shall have the meaning given such term in Section
3.2.
1.53 “Title Company” shall mean Fidelity National Title Insurance Company, or such
other title insurance company as shall have been selected by the Purchaser and approved by the
Sellers, which approval shall not be unreasonably withheld, delayed or conditioned.
1.54 “True-up” shall have the meaning given such term in Section 9.
1.55 “Uniform System of Accounts” shall mean A Uniform System of Accounts for Hotels,
Ninth Revised Edition, 1996, as published by the Hotel Association of New York City, as the same
may be further revised from time to time.
1.56 "Unopened” means, with reference to Inventory and Expendables, all items
that remain in unopened crates or cases or which otherwise are stored in new or sealed condition
awaiting use in any storage location and not in guest rooms or immediately in service at public
bars or restaurants.
SECTION 2. PURCHASE AND SALE; CLOSING
2.1 Purchase and Sale. In consideration of the mutual covenants herein contained, the
Purchaser hereby agrees to
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purchase from the Sellers, and the FCH Parties hereby agree to sell or
cause the Sellers to sell, all of the FCH Parties’ right, title and interest in and to the
Properties for the Purchase Price, subject to and in accordance with the terms and conditions of
this Agreement.
2.2 Closing. The purchase and sale of the Properties shall be consummated at a
closing (the “Closing”) to be held at the offices of Xxxxxxxx & Worcester LLP, Xxx Xxxx
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, or at such other location as the Sellers and the Purchaser
may agree, at 10:00 a.m., local time, on a date (the “Closing Date”) which is the later to
occur of (a) the expiration of the Inspection Period, and (b) the date as of which all conditions
precedent to the Closing herein set forth (other than those to be satisfied at the Closing) have
either been satisfied or waived by the party in whose favor such conditions run. In the event that
the Closing shall not have occurred on or before January 20, 2006, either party may terminate this
Agreement, provided such party is not in default hereunder, in which event the Deposit shall be
paid to the Purchaser unless the Purchaser is in default hereunder.
2.3 Purchase Price. The Purchase Price shall be paid as follows:
(i) Upon execution of this Agreement, the Purchaser shall deposit with the
Escrow Agent the sum of Five Million Dollars ($5,000,000) (such amount, together
with all interest earned thereon, the “Deposit”); and
(ii) The sum of the Purchase Price less the Deposit, subject to adjustment as
provided in this Section 2.3 and in Article 9, shall be paid by the
Purchaser to or at the direction of the Sellers at the Closing.
(b) The Purchase Price shall be payable in immediately available federal funds by wire
transfer to an account or accounts to be designated by the Sellers.
(c) The Sellers and the Purchaser had contemplated that the Seller would complete certain
Capital Replacements prior to the Closing, as more particularly described in Schedule B.
The Sellers and the Purchaser acknowledge and agree that (i) the Sellers have not, and shall not be
obligated to, complete such additional Capital Replacements, and (ii) the Purchase Price shall be
reduced by the aggregate amount of One Million Four Hundred Eight Thousand One Hundred Twenty
Dollars ($1,408,120).
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(d) The Sellers and the Purchaser contemplate that certain Capital Replacements as further
described in Schedule B are to be completed by the Sellers on or after the Closing Date
(the “FCH Capital Replacements”). The Seller shall perform, or cause to be performed, the
FCH Capital Replacements described in Schedule B hereto, in accordance with the plans and
specifications, and permits, licenses, contracts and approvals relating thereto, and otherwise in
accordance the terms of this Section 2.3. All such FCH Capital Replacements shall be
performed in a good and workmanlike manner, consistent with industry standards for like hotels in
like locales and in accordance with all applicable Legal Requirements and the Brand Standards. The
Sellers and the Purchaser acknowledge and agree that (i) the Sellers shall complete such FCH
Capital Replacements on or before June 30, 2006, (ii) the amount of Nine Hundred Twenty Seven
Thousand Three Hundred Eight Dollars ($927,308) shall be deposited into escrow with the Escrow
Agent to be disbursed to the Sellers on a periodic basis as such FCH Capital Replacements are
completed, as evidenced by the certificate of IHG, and (iii) in the event that the FCH Capital
Replacements shall not have been so completed by June 30, 2006, amounts remaining on deposit with
the Escrow Agent shall be disbursed to Purchaser. The Sellers and Purchaser contemplate that
certain Capital Replacements as further described in Schedule B in the amount of Three
Hundred Eighty Four Thousand Nine Hundred Eighty Six Dollars ($384,986) are to be completed by the
Purchaser on or after the Closing Date (the “HPT Capital Replacements”), and the Purchaser
shall receive a credit against the Purchase Price in such amount at Closing.
(e) The Sellers and the Purchaser acknowledge and agree that the Properties contain certain
physical conditions that are not satisfactory to the Purchaser, and due to such physical
conditions, the Purchaser shall receive a credit against the Purchase Price in the amount of Two
Million Fifty One Thousand Two Hundred Three Dollars ($2,051,203) at Closing.
2.4 Duties of Escrow Agent.
(a) The Escrow Agent shall hold the Deposit in an interest-bearing federally insured account
and shall pay the Deposit to the party entitled thereto in accordance with the terms of this
Agreement.
(b) The acceptance by the Escrow Agent of its duties as such under this Agreement is subject
to the following terms and conditions, which all parties to this Agreement hereby agree
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shall
govern and control with respect to the rights, duties, liabilities and immunities of the Escrow
Agent:
(i) The Escrow Agent acts hereunder as a depositary only, and is not responsible or liable in
any manner whatever for the sufficiency of any amounts deposited with it.
(ii) The Escrow Agent shall not be liable for acting upon any notice, request, waiver,
consent, receipt or other instrument or document which the Escrow Agent in good faith believes to be genuine and what it
purports to be.
(iii) The Escrow Agent shall not be liable for any error in judgment, or for any act done or
step taken or omitted by it in good faith, or for any mistake of fact or law, or for anything which
it may do or refrain from doing in connection herewith, except its own bad faith, gross negligence
or willful misconduct.
(iv) The Escrow Agent may consult with, and obtain advice from, legal counsel in the event of
any dispute or question as to the construction of any of the provisions hereof or its duties
hereunder, and it shall incur no liability and shall be fully protected in acting in good faith in
accordance with the opinion and advice of such counsel.
(v) In the performance of its duties hereunder, the Escrow Agent shall be entitled to rely
upon any document, instrument or signature believed by it to be genuine and signed by either of the
other parties hereto or their successors.
(vi) The Escrow Agent may assume that any person purporting to give any notice of instructions
in accordance with the provisions hereof has been duly authorized to do so.
(vii) The Sellers and the Purchaser each hereby release the Escrow Agent from any act done or
omitted to be done by the Escrow Agent in good faith in the performance of its duties hereunder.
(c) The Sellers and the Purchaser may remove the Escrow Agent at any time upon not less than
five (5) days notice to the Escrow Agent; in such case, the Sellers, by notice to the Purchaser,
shall appoint a successor Escrow Agent, reasonably satisfactory to the Purchaser, which shall
accept such appointment and agree in writing to be bound by the terms of this Agreement. In the
event no successor Escrow Agent is appointed and acting hereunder within five (5) days after
resignation by the Escrow Agent or there is a dispute among the
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parties with respect to payment of
the Deposit, the Escrow Agent may deliver the Deposit into a court of competent jurisdiction. Upon
delivery of the Deposit to a successor agent or court of competent jurisdiction, the Escrow Agent
shall be released and discharged from all further obligations hereunder.
(d) The Escrow Agent agrees to serve without compensation for its services; provided,
however, that the Purchaser and the Sellers hereby agree to reimburse, or to advance to,
the Escrow Agent all reasonable expenses of the Escrow Agent incurred in the performance of its
duties hereunder.
SECTION 3. DILIGENCE, ETC.
3.1 Diligence Inspections. From and after the date of this Agreement, the Sellers
shall permit the Purchaser and its representatives to inspect the Properties and the Improvements (including, without limitation,
guest rooms, meeting rooms, food and beverage outlets and related back of the house areas, all
roofs, electric, mechanical and structural elements, and HVAC systems therein), to perform due
diligence, soil analysis and environmental investigations, to examine the books of account and
records of the FCH Parties with respect to the Properties, including, without limitation, all
Contracts and other agreements affecting the Properties, and make copies thereof, at such
reasonable times as the Purchaser or its representatives may request. To the extent that, in
connection with such investigations, the Purchaser damages or disturbs the Properties, or any
portion thereof, the Purchaser shall, to the extent practicable, return the same to substantially
the same condition which existed immediately prior to such damage or disturbance. The Purchaser
shall indemnify, defend and hold harmless the Sellers from and against any and all expense, loss or
damage which the Sellers may incur as a result of any act or omission of the Purchaser or its
representatives, agents or contractors in the conduct of its inspections, other than any expense,
loss or damage to the extent arising from any negligent act or omission of the Sellers during any
such inspection. Such restoration obligations and indemnification agreement shall survive the
termination of this Agreement.
3.2 Title and Survey Matters.
(a) Promptly upon execution of this Agreement, the Purchaser shall order from the Title
Company and direct the Title Company promptly to deliver to the Purchaser a preliminary title
commitment, having an effective date after the date of this Agreement, for an ALTA extended owner’s
policy of title
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insurance with respect to each of the Properties, together with complete and
legible copies of all instruments and documents referred to as exceptions to title (collectively,
the “Title Commitment”).
(b) Promptly upon execution of this Agreement, the Purchaser shall arrange for the preparation
of an ALTA survey with respect to each of the Properties (the “Survey”), by a licensed
surveyor in the jurisdiction in which each such Property is located, which (i) contains an accurate
legal description of such Property, (ii) shows the exact location, dimension and description
(including applicable recording information) of all utilities, easements, encroachments and other
physical matters affecting such Property, the number of striped parking spaces located thereon and
all applicable building set-back lines, (iii) states whether such Property is located within a
100-year flood plain and (iv) includes a certification in the form attached hereto as Schedule
F.
(c) Within ten (10) Business Days after receipt of both the Title Commitment and the Survey
with respect to a Property, the Purchaser shall give the Sellers notice of any title exceptions or
survey matters (other than Permitted Exceptions) as to which the Purchaser objects. If, for any
reason, the Sellers are unable or unwilling to take such actions as may be required to cause such exceptions to be
removed from such Title Commitment or to remedy such matters, the Sellers shall give the Purchaser
notice thereof; it being understood and agreed that the failure of the Sellers to give such notice
within five (5) Business Days after the Purchaser’s notice of objection shall be deemed an election
by the Sellers not to cause such removal and remedy. If the Sellers shall be unable or unwilling
(or shall be deemed unable or unwilling) to remove any title defects or remedy any survey matters
to which the Purchaser has objected, the Purchaser may elect (i) to terminate this Agreement and
receive a refund of the Deposit, or (ii) to consummate the transactions contemplated hereby,
notwithstanding such defect, without any abatement or reduction in the Purchase Price on account
thereof. The Purchaser shall make any such election by notice to the Sellers given on or prior to
the fifth (5th) Business Day (but in any event prior to the Closing Date) after the
Sellers’ notice of its inability or unwillingness to cure any such title defect or remedy any such
survey matter. Failure of the Purchaser to give such notice shall be deemed an election by the
Purchaser to waive such obligations and consummate the transactions contemplated hereby in
accordance with clause (ii) above.
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3.3 Other Diligence Materials. Throughout the Inspection Period and through and until
the Closing, the Sellers shall provide the Purchaser and its representatives with copies of all
leases, title reports, as-built plans, surveys, environmental assessment reports, building
evaluations, financial data, audited property statements for the past three (3) years and other
investigations and materials pertaining to the Properties as are in the possession or control of
the FCH Parties.
3.4 Termination of Agreement. If the results of the inspections performed by or on
behalf of the Purchaser pursuant to Section 3.1 or Section 3.3 shall be
unsatisfactory to the Purchaser in any respect or if Purchaser otherwise determines not to proceed
to Closing, the Purchaser shall have the right to terminate this Agreement at any time prior to the
expiration of the Inspection Period by the giving of written notice thereof to the Sellers, in
which event, the Deposit shall be refunded to the Purchaser. In the event that the Purchaser shall
fail so to terminate this Agreement, the Purchaser shall have no further right to terminate this
Agreement pursuant to this Section 3.4.
SECTION 4. CONDITIONS TO PURCHASER’S OBLIGATION TO CLOSE
The obligation of the Purchaser to acquire each of the Properties on the Closing Date shall be
subject to the satisfaction of the following conditions precedent on and as of such Closing Date:
4.1 Closing Documents. The FCH Parties shall have delivered to the Purchaser:
(a) A good and sufficient limited or special warranty deed with covenants against grantor’s
acts, or its local equivalent, in proper statutory form for recording, duly executed and
acknowledged by the applicable Seller(s), conveying good and marketable title to each of the
Properties, free from all liens and encumbrances other than the Permitted Encumbrances;
(b) An assignment of each of the Ground Leases, in proper statutory form for recording, duly
executed and acknowledged by the applicable Seller(s), conveying good and marketable leasehold
title to each of the Ground Lease Properties, free from all liens and encumbrances other than the
Permitted Encumbrances;
(c) One or more xxxx(s) of sale and assignment agreement(s), in form and substance reasonably
satisfactory to the Sellers and the Purchaser, duly executed and acknowledged by the applicable
Seller(s), with respect to all of the Sellers’
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right, title and interest in, to and under the FAS,
the FF&E, the Contracts, the Documents, the Intangible Property, the Inventories and the Tenant
Leases with respect to each of the Properties and the Sellers’ rights under all builder’s
warranties with respect to each of the Properties;
(d) To the extent the same are in the FCH Parties’ possession or control, original, fully
executed copies of all material documents and agreements, leases, including, without limitation,
the Ground Leases, plans and specifications and contracts, licenses and permits pertaining to the
Properties;
(e) An affidavit as of the Closing Date, in respect of Section 1445 of the Internal Revenue
Code of 1986, as amended, sufficient to provide one exemption under subdivision (b) thereof for
each of the FCH Parties;
(f) A Sellers’ closing certificate in the form attached hereto as Schedule G;
(g) Copies of any and all certificates, and related correspondence and materials, provided by,
for or to, any of the FCH Parties, IHG or any of their respective affiliates, in connection within
the FCH Parties’ determination of the actual knowledge of the general manager of each Hotel and the
actual knowledge of Xxxx Xxxxxx and Xxxx XxXxxxxx pursuant to Section 6 hereof;
(h) With respect to each Ground Lease Property, a consent and estoppel certificate, in form
and substance satisfactory to the Purchaser, dated within thirty (30) days prior to the Closing
Date, duly executed by the ground lessor under the Ground Lease with respect to such Ground Lease
Property in the form reasonably acceptable to Purchaser;
(i) Estoppel certificates, dated within thirty (30) days prior to the Closing Date, with
respect to the Tenant Leases, in form and substance satisfactory to the Purchaser, duly executed by each of the tenants of each of the Properties to the extent received by the applicable
Seller.
(j) Certified copies of all charter documents, applicable corporate resolutions and
certificates of incumbency with respect to the applicable FCH Parties; and
(k) Such other conveyance documents, certificates, deeds, affidavits and other instruments as
the Purchaser or the Title Company may reasonably require to effectuate the transactions
contemplated by this Agreement, including, without limitation,
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parties in possession and mechanics’
lien affidavits and gap indemnities.
4.2 Management of Hotels. The Purchaser, IHG and its affiliates (i) shall have
entered into the IHG Management Agreement and the IHG Security Deposit Agreement, and received the
IHG Parent Guaranty, in each case on terms satisfactory to the Purchaser, in its sole discretion,
engaging IHG and its affiliates to manage the Hotels, (ii) such agreements shall be in full force
and effect, and (iii) all conditions precedent to the effectiveness of such agreements shall have
been satisfied.
4.3 Condition of Properties.
(a) No default or event which with the giving of notice and/or lapse of time could constitute
a material default shall have occurred and be continuing under any material agreement benefiting or
affecting any of the Properties in any respect;
(b) Except for the action described in Schedule H hereto with respect to the Houston
I-10 Hotel, no action shall be pending or threatened for the condemnation or taking by power of
eminent domain of all or any material portion of any of the Properties;
(c) All material licenses, permits and other authorizations necessary for the current use,
occupancy and operation of each of the Properties shall be in full force and effect; and
(d) All representations and warranties of each the FCH Parties herein shall be true, correct
and complete in all material respects on and as of the Closing Date and each of the FCH Parties
shall have performed all covenants and obligations required to be performed by the FCH Parties on
or before the Closing Date.
4.4 Title Policies and Surveys. (a) The Title Company shall be prepared, subject only
to payment of the applicable premium and endorsement fees and delivery of all conveyance documents
in recordable form, to issue title insurance policies to the Purchaser with respect to each of the
Properties, in form and substance satisfactory to the Purchaser in accordance with Section
3.2., together with such affirmative coverages as the Purchaser may reasonably require.
(b) The Purchaser shall have received an as-built survey with respect to each of the
Properties, such survey to be consistent with the requirements of Section 3.2.
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SECTION 5. CONDITIONS TO FCH PARTIES’ OBLIGATION TO CLOSE
The obligation of the FCH Parties to convey the Properties on the Closing Date to the
Purchaser is subject to the satisfaction of the following conditions precedent on and as of the
Closing Date:
5.1 Purchase Price. The Purchaser shall have delivered to the FCH Parties the
Purchase Price as provided in Section 2.3.
5.2 Closing Documents. The Purchaser shall have delivered to the Sellers:
(a) Duly executed and acknowledged counterparts of the documents described in Section
4.1, where applicable; and
(b) Certified copies of all charter documents, applicable resolutions and certificates of
incumbency with respect to the Purchaser.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF FCH PARTIES
To induce the Purchaser to enter into this Agreement, each FCH Party, with respect to all
Properties, and each Seller, with respect to its Property, represent and warrant to the Purchaser
as follows:
6.1 Status and Authority of the FCH Parties. Each of the FCH Parties is a corporation
or limited liability company duly organized, validly existing and in good standing under the laws
of its state of incorporation or formation, and has all requisite power and authority under the
laws of such state and its respective charter documents to enter into and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby. It has duly qualified
to transact business in each jurisdiction in which the nature of the business conducted by it
requires such qualification, except where failure to do so could not reasonably be expected to have
a material adverse effect.
6.2 Action of the FCH Parties. Each of the FCH Parties has taken all necessary action
to authorize the execution, delivery and performance of this Agreement, and upon the execution and
delivery of any document to be delivered by it on or prior to the Closing Date, such document shall
constitute its valid and binding obligation and agreement, enforceable against such FCH Party in
accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency,
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reorganization, moratorium or similar laws of general application affecting the rights and remedies
of creditors.
6.3 No Violations of Agreements. Neither the execution, delivery or performance of
this Agreement, nor compliance with the terms and provisions hereof, will result in any breach of
the terms, conditions or provisions of, or conflict with or constitute a default under, or result
in the creation of any lien, charge or encumbrance upon any of the Properties pursuant to the terms
of any indenture, mortgage, deed of trust, note, evidence of indebtedness or any other agreement or
instrument by which it is bound.
6.4 Litigation. None of the FCH Parties has received any written notice of and, to
its knowledge, no action or proceeding is pending or threatened and no investigation looking toward
such an action or proceeding has begun, which (a) questions the validity of this Agreement or any
action taken or to be taken pursuant hereto, (b) will result in any material adverse change in the
business, operation, affairs or condition of any of the Properties, (c) will result in or subject
any of the Properties to a material liability, or (d) except for the action described in
Schedule H hereto with respect to the Houston I-10 Hotel, involves condemnation or eminent
domain proceedings against any material part of any of the Properties.
6.5 Tenant Leases, Etc. Other than the Tenant Leases listed in the Rent Roll, the
Sellers have not entered into any contract or agreement with respect to the occupancy of the
Properties, or any portion thereof, which will be binding on the Purchaser after the Closing. The
copies of the Tenant Leases heretofore delivered by the Sellers to the Purchaser are true, correct
and complete copies thereof; the Tenant Leases have not been amended except as evidenced by
amendments similarly delivered and constitute the entire agreement between the Sellers and the
tenants thereunder. Except as otherwise set forth in the Rent Roll: (i) to knowledge of the FCH
Parties’, each of the Tenant Leases is in full force and effect on the terms set forth therein,
there are no defaults or circumstances which with the giving of notice, the passage of time or both
would constitute a default thereunder and each tenant is legally required to pay all sums and
perform all material obligations set forth therein without concessions, abatements, offsets,
defenses or other basis for relief or adjustment; (ii) no tenant has asserted in writing or, to the
knowledge of the FCH Parties’, has any defense to, offsets or claims against, rent payable by it or
the performance of its other obligations under its Tenant Lease; (iii) the Sellers have no
outstanding
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obligations to provide any tenant with an allowance to perform, or to perform at its
own expense, any tenant improvements; (iv) no tenant is in arrears in the payment of any sums or in
the performance of any material obligation required of it under its Tenant Lease beyond any
applicable grace period, and no Tenant has prepaid any rent or other charges (except as disclosed
in the Rent Roll); (v) no tenant has filed a petition in bankruptcy or for the approval of a plan
of reorganization or management under the Federal Bankruptcy Code or under any other similar state
law, or made an admission in writing as to the relief therein provided, or otherwise become the subject of any proceeding under any federal or state bankruptcy or
insolvency law, or has admitted in writing its inability to pay its debts as they become due or
made an assignment for the benefit of creditors, or has petitioned for the appointment of or has
had appointed a receiver, trustee or custodian for any of its property; (vi) no tenant has
requested in writing a modification of its Tenant Lease, or a release of its obligations under its
Tenant Lease in any material respect or has given written notice terminating its Tenant Lease, or
has been released of its obligations thereunder in any material respect prior to the normal
expiration of the term thereof; (vii) except as set forth in the Tenant Leases, no guarantor has
been released or discharged, voluntarily or involuntarily, or by operation of law, from any
obligation under or in connection with any Tenant Lease or any transaction related thereto; (viii)
all security deposits paid by tenants, are as set forth in the Rent Roll; (ix) all brokerage
commissions due with respect to each of the Tenant Leases has been paid, except as otherwise set
forth on the Rent Roll; and (x) the other information set forth in the Rent Roll is true, correct
and complete in all material respects.
6.6 Ground Leases. The copies of the Ground Leases heretofore delivered by the
Sellers to the Purchaser are true, correct and complete copies thereof; the Ground Leases have not
been amended except as evidenced by amendments similarly delivered and constitute the entire
agreement between the ground lessors and the Sellers thereunder. Each of the Ground Leases is in
full force and effect on the terms set forth therein, there are no defaults or circumstances which
with the giving of notice, the passage of time or both would constitute a default thereunder.
6.7 Agreements, Etc. Other than the Tenant Leases and the Ground Leases, there are no
contracts or agreements affecting any of the Properties which will be binding on the Purchaser or
any of the Properties subsequent to the Closing Date other than
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contracts and agreements which the
Purchaser has agreed in writing to assume prior to the expiration of the Inspection Period or which
IHG is party to and which are required for the effective management of the hotels or which are
terminable upon thirty (30) days notice without payment of premium or penalty.
6.8 Compliance With Law. To the FCH Parties’ knowledge, none of the FCH Parties has
received written notice that (i) any of the Properties or the current use and operation thereof
violate any material federal, state, municipal and other governmental statutes, ordinances,
by-laws, rules, regulations or any other legal requirements, including, without limitation, those
relating to construction, occupancy, zoning, adequacy of parking, environmental protection,
occupational health and safety and fire safety applicable thereto; and (ii) there is not currently
in effect any material license, permit or other authorization necessary for the current use,
occupancy and operation of any of the Properties. Except for the action described in Schedule
H hereto with respect to the Houston I-10 Hotel, none of the FCH Parties has received written notice of any threatened request,
application, proceeding, plan, study or effort which would (i) materially adversely affect the
present use or zoning of any of the Properties, (ii) jeopardize the status of any material license,
permit or other authorization necessary for the current use, occupancy or operation of any of the
Properties, or (iii) modify or realign any adjacent street or highway in a material and adverse
way.
6.9 Taxes. To the FCH Parties’ knowledge, (i) other than the amounts disclosed by tax
bills and the Title Commitments, no taxes or special assessments of any kind (special, bond or
otherwise) are or have been levied with respect to any of the Properties, or any portion thereof,
which are outstanding or unpaid, other than amounts not yet due and payable or, if due and payable,
not yet delinquent, and (ii) all tax returns for privilege, gross receipts, excise, sales and use,
personal property and franchise taxes have been prepared and duly filed, and all taxes, if any,
shown on such returns or otherwise determined to be due, together with any interest or penalties
thereon, have been paid by the FCH Parties.
6.10 Not A Foreign Person. None of the FCH Parties is a “foreign person” within the
meaning of Section 1445 of the United States Internal Revenue Code of 1986, as amended, and the
treasury regulations promulgated thereunder.
6.11 Hazardous Substances. Except as described in any environmental report delivered
to the Purchaser prior to the
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expiration of the Inspection Period to the FCH Parties’ knowledge,
none of the FCH Parties has received written notice that any of the FCH Parties nor any tenant or
other occupant or user of any of the Properties, or any portion thereof, has stored or disposed of
(or engaged in the business of storing or disposing of) or has released or caused the release of
any hazardous waste, contaminants, oil, radioactive or other material on any of the Properties, or
any portion thereof, the removal of which is required or the maintenance of which is prohibited or
penalized by any applicable Federal, state or local statutes, laws, ordinances, rules or
regulations, and, to each FCH Party’s knowledge, none of the FCH Parties has received written
notice that any of the Properties is contaminated with any such hazardous waste, contaminants, oil,
radioactive or other materials, except any such materials maintained in accordance with applicable
law.
6.12 Insurance. None of the FCH Parties has received any written notice from any
insurance carrier of defects or inadequacies in any of the Properties which, if uncorrected, would
result in a termination of insurance coverage or a material increase in the premiums charged
therefor.
6.13 Ownership of Sellers. FCH is the sole record and beneficial owner, directly or
indirectly, of all of the issued and outstanding equity interests in the Sellers and the transactions contemplated by this Agreement are of direct material benefit to FCH.
6.14 Utilities, Etc. To the FCH Parties’ knowledge, except as may be set forth in any
of the due diligence materials submitted by the FCH Parties’ to Purchaser or identified by
Purchaser as a result of its due diligence inspections and other investigations pursuant to
Section 3.1 hereof, (i) all utilities and services necessary for the use and operation of
each of the Properties (including, without limitation, road access, gas, water, electricity and
telephone) are available thereto and are of sufficient capacity to meet adequately all needs and
requirements necessary for the current use and operation of each of the Properties, and (ii) no
fact, condition or proceeding exists which would result in the termination or material impairment
of the furnishing of such utilities to any of the Properties.
6.15 Condition of Properties. To the FCH Parties’ knowledge, except as may be set
forth in any of the due diligence materials submitted by the FCH Parties’ to Purchaser or
identified by Purchaser as a result of its due diligence
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inspections and other investigations
pursuant to Section 3.1 hereof, none of the FCH Parties has received any written notice of
any material defects in the Properties.
6.16 Employment Contracts; Labor Matters. None of the Sellers now has or has ever had
any employees.
6.17 Intellectual Property. To the FCH Parties’ knowledge, no Seller is infringing or
alleged to be infringing upon the rights of any third party with respect to any of the trademarks
and service marks (whether or not registered) and trademark and service xxxx registrations and
applications, patent and patent applications, copyright and copyright applications, trade dress,
trade and product names (collectively, the “Intellectual Property”) owned or licensed by
any of the Sellers, and no Seller is infringing or alleged to be infringing upon the rights of any
third party with respect to any of Intellectual Property, and no Seller knows of any basis for the
assertion against any Seller of a claim for such infringement.
The representations and warranties made in this Agreement by the FCH Parties are made as of
the date hereof and shall be deemed remade by the FCH Parties as of the Closing Date with the same
force and effect as if made on, and as of, such date. All representations and warranties made in
this Agreement by the FCH Parties shall survive the Closing for a period of one (1) year
thereafter, and upon expiration shall be of no further force and effect, except to the extent that
with respect to any particular alleged breach, the Purchaser gives the FCH Parties written notice
prior to the expiration of said one (1) year period of such alleged breach.
Notwithstanding anything to the contrary contained in this Xxxxxxx 0, xxxx of the FCH
Parties shall have any liability to the Purchaser for the breach of any representation or warranty
made in this Agreement unless the loss resulting from the FCH Parties’ breach of its
representations and warranties exceeds, in the aggregate, One Million Dollars ($1,000,000), in
which event the FCH Parties shall be liable for each dollar of damages resulting from the breach or
breaches of its representations and warranties, but in no event shall the FCH Parties’ total
liability for any such breach or breaches exceed, in the aggregate, Twenty Million Dollars
($20,000,000).
“FCH Parties’ knowledge” shall mean only the actual knowledge of the general manager
of each Hotel, Xxxx Xxxxxx or Xxxx XxXxxxxx, in each case, after the FCH Parties’ having made
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specific inquiries of each such general manager, Xxxx Xxxxxx and Xxxx XxXxxxxx.
Except as otherwise expressly provided in this Agreement or any documents to be delivered to
the Purchaser at the Closing, the FCH Parties disclaim the making of any representations or
warranties, express or implied, regarding the Properties or matters affecting the Properties,
whether made by the FCH Parties, on the FCH Parties’ behalf or otherwise, including, without
limitation, the physical condition of the Properties, title to or the boundaries of the Real
Property, pest control matters, soil conditions, the presence, existence or absence of hazardous
wastes, toxic substances or other environmental matters, compliance with building, health, safety,
land use and zoning laws, regulations and orders, structural and other engineering characteristics,
traffic patterns, market data, economic conditions or projections, and any other information
pertaining to the Properties or the market and physical environments in which they are located.
The Purchaser acknowledges (i) that the Purchaser has entered into this Agreement with the
intention of making and relying upon its own investigation or that of third parties with respect to
the physical, environmental, economic and legal condition of each Property and (ii) that the
Purchaser is not relying upon any statements, representations or warranties of any kind, other than
those specifically set forth in this Agreement or in any document to be delivered to the Purchaser
at any Closing, made by the FCH Parties or anyone acting on the FCH Parties’ behalf. The Purchaser
further acknowledges that it has not received from or on behalf of the FCH Parties any accounting,
tax, legal, architectural, engineering, property management or other advice with respect to this
transaction and is relying solely upon the advice of third party accounting, tax, legal,
architectural, engineering, property management and other advisors. Subject to the provisions of
this Agreement, the Purchaser shall purchase the Properties in their “as is” condition on the
Closing Date.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER
To induce the FCH Parties to enter in this Agreement, the Purchaser represents and warrants to
the FCH Parties as follows:
7.1 Status and Authority of the Purchaser. The Purchaser is a Maryland real estate
investment trust duly organized, validly existing and in trust good standing under the laws of the
State of Maryland, and has all requisite power and authority under the laws of such state and under
its charter documents to enter into and perform its obligations under this Agreement and
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to consummate the transactions contemplated hereby. The Purchaser has duly qualified and is in good
standing as a trust or unincorporated business association in each jurisdiction in which the nature
of the business conducted by it requires such qualification, except where the failure to do so
could not reasonably be expected to have a material adverse effect.
7.2 Action of the Purchaser. The Purchaser has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and upon the execution and
delivery of any document to be delivered by the Purchaser on or prior to the Closing Date such
document shall constitute the valid and binding obligation and agreement of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors.
7.3 No Violations of Agreements. Neither the execution, delivery or performance of
this Agreement by the Purchaser, nor compliance with the terms and provisions hereof, will result
in any breach of the terms, conditions or provisions of, or conflict with or constitute a default
under, or result in the creation of any lien, charge or encumbrance upon any property or assets of
the Purchaser pursuant to the terms of any indenture, mortgage, deed of trust, note, evidence of
indebtedness or any other agreement or instrument by which the Purchaser is bound.
7.4 Litigation. No investigation, action or proceeding is pending and, to the
Purchaser’s knowledge, no action or proceeding is threatened and no investigation looking toward
such an action or proceeding has begun, which questions the validity of this Agreement or any
action taken or to be taken pursuant hereto.
The representations and warranties made in this Agreement by the Purchaser shall be continuing
and shall be deemed remade by the Purchaser as of the Closing Date with the same force and effect
as if made on, and as of, such date. The Purchaser’s liability with respect to all representations
and warranties made in this Agreement by the Purchaser shall survive the Closing for a period of
one (1) year thereafter, and upon expiration shall be of no further force or effect, except to the
extent that with respect to any particular alleged breach, the FCH Parties give the Purchaser written notice prior to the expiration of said one (1) year period of such
alleged breach.
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SECTION 8. COVENANTS OF THE FCH PARTIES
Each of the FCH Parties hereby covenants with the Purchaser between the date of this Agreement
and the Closing Date as follows:
8.1 Compliance with Laws, Etc. To comply or to cause compliance in all material
respects with (i) all applicable laws, regulations and other requirements from time to time of
every governmental body having jurisdiction of the Properties or the use or occupancy of the
Improvements located on the Real Property and (ii) all terms, covenants and conditions of all
instruments of record and other agreements affecting the Properties.
8.2 Approval of Agreements. Except as otherwise authorized by this Agreement or in
the ordinary course of business, not to enter into, modify, amend or terminate any other agreement
with respect to any Property which would encumber or be binding upon such Property from and after
the Closing Date without in each instance obtaining the prior written consent of the Purchaser.
8.3 Ground Lease Estoppels. The FCH Parties shall request, and use reasonable efforts
to obtain, from the ground lessors under the Ground Leases, the consent and estoppel certificates
described in Section 4.1(g).
8.4 Tenant Estoppels. The FCH Parties shall request, and use reasonable efforts to
obtain, from the tenants under the Tenant Leases the estoppel certificates described in Section
4.1(h). In the event the Sellers are unable to obtain any such estoppel certificate, the FCH
Parties shall provide the Purchaser at Closing with an estoppel certificate in substitution
therefor in the form described in Section 4.1(h) executed by the FCH Parties, which
estoppel certificate shall expressly indemnify and hold the Purchaser harmless from and against any
and all loss, cost, damage and expense that the Purchaser may incur or otherwise suffer as a result
of the FCH Parties’ failure to obtain and deliver to the Purchaser such estoppel certificate, or
the failure of any statement, representation or warranty contained therein to be true, complete and
correct, including, without limitation, reasonable attorneys’ fees and expenses.
8.5 Change in Brands. The FCH Parties shall not change, and they shall cause their
affiliates not to change, the Brand now in effect with respect to any Hotel.
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8.6 Notice of Material Changes or Untrue Representations. Upon learning of any
material change in any condition with respect to any of the Properties or of any event or
circumstance which makes any representation or warranty of any of the FCH Parties to the Purchaser
under this Agreement untrue or misleading in any material respect, Sellers agree to promptly to notify the Purchaser thereof (the Purchaser agreeing, on learning of any such fact or
condition, promptly to notify the FCH Parties thereof).
8.7 Financial Information. To provide to the Purchaser, promptly upon request, at the
FCH Parties’ sole cost and expense, such audited and unaudited financial and other information and
certifications of the FCH Parties with respect to the FCH Parties and the Properties as the
Purchaser may from time to time reasonably request in order to comply with any applicable
securities laws and/or any rules, regulations or requirements of the Securities and Exchange
Commission and, if required or requested, to permit the Purchaser to incorporate by reference any
information included in filings made by FCH with the Securities and Exchange Commission.
8.8 Licensing Approval. To the FCH Parties’ knowledge, all liquor licenses currently
in effect at the Hotels are in the name of IHG. Each Seller shall use best efforts to assist the
Purchaser and/or IHG in obtaining appropriate licenses from the applicable licensing authorities
which authorize the Purchaser to operate the Properties and the Hotels in the same manner and with
the same number of keys as they are currently being operated. If a license to sell alcoholic
beverages at the Hotel is in any Seller’s name and cannot be transferred to IHG by the Closing Date
and IHG cannot obtain a new or temporary license by the Closing Date, then to the extent permitted
by law Seller shall cooperate reasonably with IHG in maintaining the license on behalf of IHG and
keeping open all bars, lounges and liquor facilities of the Hotels between the Closing Date and the
time when such license is obtained by IHG by entering into a agreement for the continued operation
of and under Seller’s liquor license mutually acceptable to Seller and IHG in their reasonable
discretion. The Sellers’ obligations under this Section 8.9 shall survive the Closing.
SECTION 9. APPORTIONMENTS
9.1 General. Except as otherwise expressly provided in this Agreement, all income and
expenses of the Property with respect to the period prior to the Proration Time shall be for the
account of Seller and all income and expenses of the
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Properties with respect to the period from and
after the Proration Time shall be for the account of Purchaser.
9.2 Taxes.
(a) Real and personal property taxes, assessments and special district levies
(“Taxes”) shall be prorated for the tax fiscal year in which the Closing Date occurs on the
basis of the then most current tax bills available with respect to the Properties; Sellers shall be
charged with said proration for the period through the day prior to the Closing Date and Purchaser
shall be charged with said proration for the period from and after the Closing Date. If the
prorations are not based on the actual tax bills for the tax fiscal year in which the Closing Date occurs, Sellers and
Purchaser shall re-prorate such taxes, assessments and levies based upon the actual tax bills
within thirty (30) days after such tax bills are received. Such proration shall satisfy the
obligation of Sellers to Purchaser with respect to all such taxes, assessments and levies on the
Property for the tax fiscal year in which the Closing Date occurs. The Sellers shall be entitled
to receive any refunds of any Taxes for any periods prior to Closing, regardless of when received.
(b) Sellers shall pay (l) all sales, revenue and excise taxes (and any surtax, interest and
penalties thereon) (collectively, “Sales Tax”) payable with respect to Sellers’ operation
of the Hotels for periods prior to the Closing Date, and (2) any Sales Tax due in connection with
the sale to Purchaser of those items of personal property for which Sales Tax is payable.
(c) Sellers shall pay all room occupancy and use taxes due and payable with respect to the
Hotels for the period prior to the Closing Date, and Purchaser shall pay all room occupancy and use
taxes (“Room Taxes”) due and payable with respect to the Hotels for the period on and after
the Closing. Sellers and Purchaser each shall pay fifty percent (50%) of all Room Taxes due and
payable with respect to the Hotels for the night commencing prior to and ending on the day on which
the Proration Time occurs.
9.3 Rents. Rents payable with respect to the Ground Lease Property and due under
Tenant Leases shall be prorated as of the Closing on a cash basis and the net amount paid by the
Seller to the Purchaser or by the Purchaser to the Seller, as the case may be (collectively,
“Rents”).
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9.4 Hotel Apportionments.
(a) The Purchaser shall pay to the Sellers, at the Closing, an amount equal to (a) the book
value of all Unopened Inventory and Expendables, (b)aggregate xxxxx cash and cash in cash
registers, house banks and vending machines, (c) prepaid operating expenses of the Properties
and the Hotels, (d) amounts reflected on the guest ledger, (e) postage in meters and prepaid
internet access cards and (f) 50% of room occupancy revenues for the night on which the Proration
Time occurs, reduced by an amount equal to any Booking Deposits, (collectively, the “Hotel
Operating Items”) in each case, as of the Proration Time and based upon a fair and reasonable
estimated accounting prepared by the Sellers and IHG and delivered to the Purchaser on the Closing
Date.
(b) All payments for Hotel services (“Hotel Services”), whether in cash or accounts
receivable, arising from Hotel services provided beginning on the day preceding the Closing Date
(i.e., the night that straddles the Closing) shall be credited to Sellers. All receipts for guest room rentals and Hotel services thereafter shall belong to
Purchaser.
(c) All receipts and expenses from restaurant and bar operations (“Restaurant
Receipts”) at the Hotels to the closing hours of facility operations which commenced on the day
preceding the Closing Date shall belong to, and be paid by, Sellers. All thereafter accruing
receipts and expenses from restaurant and bar operations at the Hotels shall be for Purchaser’s
account.
(d) Seller shall credit Purchaser at Closing for all accrued vacation and sick time
(“PTO”), and Purchaser shall assume all liability therefor.
(d) Seller shall retain all accounts receivable owed to Sellers (or to Hotel Operator as agent
of Sellers) as of the Proration Time and arising out of the ownership or operation of the Hotels.
9.5 True-Up. Within sixty (60) days after the Closing, Purchaser shall prepare and
deliver to Sellers an accounting of the Sales Tax, Room Taxes, Rents, Hotel Operating Items, Hotel
Services, Restaurant Receipts, and PTO which are prorated between, paid or otherwise credited to
the Purchaser and/or Seller Rents as set forth in this Section 9 (collectively, the
“Apportioned Items”). If the Sellers disagree with the Purchaser’s accounting of the
Apportioned Items, the Sellers
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shall notify the Purchaser within fifteen (15) days after receipt of
the Purchaser’s accounting and the Purchaser and the Sellers shall attempt to agree, in good faith,
on a final accounting of the Apportioned Items within thirty (30) days, provided if such agreement
is not reached within thirty (30) days, upon application by either the Purchaser or the Sellers, a
certified public accountant reasonably acceptable to the Purchaser and the Sellers hereto shall
make a determination of the amount of any of the Apportioned Items which have not been agreed to.
The charges for such accountant shall be borne one-half by the Purchaser and one-half by the
Sellers. After agreement of the parties or determination by the accountant, if the aggregate
amount of the Apportioned Items is greater than the Sellers’ estimate, Purchaser shall promptly pay
Sellers the excess and if less than the Sellers’ estimate, the Sellers shall promptly pay the
Purchaser the difference.
9.6 Closing Costs. The FCH Parties shall pay one-third of the title insurance
premiums for the owner’s policies, and the title and survey costs and expenses associated with the
transaction contemplated hereby. The FCH Parties shall pay all costs and expenses of the recording
and sales and transfer fees and taxes. In addition, the FCH Parties shall pay the cost associated
with the transfer of the roof warranties.
9.7 Survival. The obligations of the parties under this Section 9 shall
survive the Closing.
SECTION 10. DAMAGE TO OR CONDEMNATION OF PROPERTIES
10.1 Casualty. If, prior to the Closing, all or any material portion of the
Properties is destroyed or damaged by fire or other casualty, the Sellers shall promptly notify the
Purchaser of such fact. In such event, the Purchaser shall have the right to terminate this
Agreement by giving notice to the Sellers not later than ten (10) days after the giving of Sellers’
notice (and, if necessary, the Closing Date shall be extended until one day after the expiration of
such ten-day period). If the Purchaser elects to terminate this Agreement as aforesaid, the
Deposit shall be paid to the Purchaser, whereupon, this Agreement shall terminate and be of no
further force and effect and neither party shall have any liability to the other hereunder. If the
Purchaser shall not elect to terminate this Agreement as aforesaid, there shall be no abatement of
the Purchase Price and the Sellers shall assign to the Purchaser at the Closing the rights of the
Sellers to the proceeds, if any, under the Sellers’ insurance policies covering the Properties, or
part thereof, with respect to such damage or
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destruction and there shall be credited against the
Purchase Price the amount of any deductible, proceeds previously received by the Sellers and any
deficiency of proceeds.
10.2 Condemnation. If, prior to the Closing, all or any material portion of the
Properties including, access or parking thereto, is taken by eminent domain (or is the subject of a
pending taking which has not yet been consummated), the Sellers shall notify the Purchaser of such
fact promptly after obtaining knowledge thereof and the Purchaser shall have the right to terminate
this Agreement by giving notice to the Seller not later than ten (10) days after the giving of the
Sellers’ notice (and, if necessary, the Closing Date shall be extended until one day after the
expiration of such ten-day period). If the Purchaser elects to terminate this Agreement as
aforesaid, the Deposit shall be paid to the Purchaser, whereupon, this Agreement shall terminate
and be of no further force and effect and neither party shall have any liability to the other
hereunder. If the Purchaser shall not elect to terminate this Agreement as aforesaid, the sale of
the Properties shall be consummated as herein provided without any adjustment to the Purchase Price
(except to the extent of any condemnation award received by any of the Sellers prior to the
Closing) and the Sellers shall assign to the Purchaser at the Closing all of the Sellers’ right,
title and interest in and to all awards, if any, for the taking, and the Purchaser shall be
entitled to receive and keep all awards for the taking of the Properties or portion thereof.
10.3 Material Portion. As used herein, damage or destruction, or a taking, of a
“material portion” of the Properties, shall mean (i) any damage or destruction to any one (1) Hotel
which can be repaired or restored to the prior existing condition only at a cost in excess of ten
percent (10%) of its Allocable Purchase Price and, in the case of more than one (1) Hotel, twenty
percent (20%) of the Purchase Price, or (ii) any taking that impairs the value of any one (1) Hotel in excess of ten percent (10%) of its
Allocable Purchase Price and, in the case of more than one (1) Hotel, twenty percent (20%) of the
Purchase Price.
10.4 Survival. The parties’ obligations, if any, under this Section 10 shall
survive the Closing.
SECTION 11. DEFAULT
11.1 Default by the FCH Parties. If any of the FCH Parties shall have made any
representation or warranty herein which
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shall be untrue or misleading in any material respect, or
if any of the FCH Parties shall fail to perform any of the material covenants and agreements
contained herein to be performed by the FCH Parties, the Purchaser may pursue any and all remedies
available to it at law or in equity, including, but not limited to, a suit for specific performance
or other equitable relief. In no event shall the FCH Parties be liable for, nor shall the
Purchaser seek, any consequential, indirect or punitive damages.
Notwithstanding the foregoing, in the event that, at any time after the Closing Date, any of
the FCH Parties shall fail to perform any of the material covenants and agreements contained herein
to be performed by the FCH Parties that are intended to survive the Closing hereunder, the FCH
Parties shall have the right and opportunity to cure such default, provided the FCH Parties
shall perform such cure within thirty (30) days after notice thereof from Purchaser to the FCH
Parties (unless such default is susceptible of cure but such cure cannot be accomplished with due
diligence within such thirty (30) day period and if, in addition, the FCH Parties commence to cure
such default within thirty (30) days after notice thereof from Purchaser and thereafter prosecutes
the curing of such default with all due diligence, such period of time (not to exceed an additional
seventy-five (75) days in the aggregate) shall be extended to such period of time as may be
necessary to cure such default with all due diligence.
11.2 Default by the Purchaser. If the Purchaser shall have made any representation or
warranty herein which shall be untrue or misleading in any material respect, or if the Purchaser
shall fail to perform any of the covenants and agreements contained herein to be performed by it,
the FCH Parties may, as their sole and exclusive remedy at law and in equity, terminate this
Agreement and retain the Deposit, as liquidated damages and not as a penalty.
SECTION 12. MISCELLANEOUS
(a) Agreement to Indemnify. (i) The FCH Parties shall indemnify and hold harmless the
Purchaser from and against any and all obligations, claims, losses, damages, liabilities, and
expenses (including, without limitation, reasonable attorneys’ and accountants’ fees and
disbursements) arising out of (x) events, contractual obligations, acts or omissions of the FCH Parties that occurred in
connection with the ownership or operation of any Property prior to the Closing or (y) any damage
to property of others or injury to or death of any person or any claims for any debts or
obligations occurring on or about or in
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connection with any Property or any portion thereof at any
time or times prior to the Closing, and (ii) the Purchaser shall indemnify and hold harmless the
FCH Parties from and against any and all obligations, claims, losses, damages, liabilities and
expenses (including, without limitation, reasonable attorneys’ and accountants’ fees and
disbursements) arising out of (x) events, contractual obligations, acts or omissions of Purchaser
that occur in connection with the ownership or operation of any Property on or after the Closing,
or (y) any damage to property of others or injury to or death of any person or any claims for any
debts or obligations occurring on or about any Property or any portion thereof at any time or times
after the Closing.
(ii) Whenever either party shall learn through the filing of a claim or the commencement of a
proceeding or otherwise of the existence of any liability for which the other party is or may be
responsible under this Agreement, the party learning of such liability shall notify the other party
promptly and furnish such copies of documents (and make originals thereof available) and such other
information as such party may have that may be used or useful in the defense of such claims and
shall afford said other party full opportunity to defend the same in the name of such party and
shall generally cooperate with said other party in the defense of any such claim.
(iii) The provisions of this Section 12.1 shall survive the Closing and the
termination of this Agreement.
12.2 Brokerage Commissions. Each of the parties hereto represents to the other
parties that it dealt with no broker, finder or like agent in connection with this Agreement or the
transactions contemplated hereby. The FCH Parties shall be solely responsible for and shall
indemnify and hold harmless the Purchaser and its respective legal representatives, heirs,
successors and assigns from and against any loss, liability or expense, including, reasonable
attorneys’ fees, arising out of any claim or claims for commissions or other compensation for
bringing about this Agreement or the transactions contemplated hereby made by any broker, finder or
like agent other than such loss, liability or expense arising from the Purchaser’s breach of its
representation made in this Section 12.2. The provisions of this Section 12.2
shall survive the Closing and any termination of this Agreement.
12.3 Publicity. The parties agree that no party shall, with respect to this Agreement
and the transactions contemplated hereby, contact or conduct negotiations with public officials,
make any public pronouncements, issue press releases or
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otherwise furnish information regarding
this Agreement or the transactions contemplated to any third party without the consent of the other parties, which consent shall not be unreasonably withheld, delayed or conditioned, except as
required by law. No such pronouncements or press releases shall identify the Purchaser without the
consent of the Purchaser, which may be withheld in Purchaser’s sole discretion. No party, or its
employees shall trade in the securities of any parent or affiliate of the Sellers or of the
Purchaser until a public announcement of the transactions contemplated by this Agreement has been
made. No party shall record this Agreement or any notice thereof.
12.4 Notices. (a) Any and all notices, demands, consents, approvals, offers,
elections and other communications required or permitted under this Agreement shall be deemed
adequately given if in writing and the same shall be delivered either in hand, by telecopier with
written acknowledgment of receipt, or by mail or Federal Express or similar expedited commercial
carrier, addressed to the recipient of the notice, postpaid and registered or certified with return
receipt requested (if by mail), or with all freight charges prepaid (if by Federal Express or
similar carrier).
(a) All notices required or permitted to be sent hereunder shall be deemed to have been given
for all purposes of this Agreement upon the date of acknowledged receipt, in the case of a notice
by telecopier, and, in all other cases, upon the date of receipt or refusal, except that whenever
under this Agreement a notice is either received on a day which is not a Business Day or is
required to be delivered on or before a specific day which is not a Business Day, the day of
receipt or required delivery shall automatically be extended to the next Business Day.
(b) All such notices shall be addressed,
If to any of the FCH Parties, to:
| FelCor Lodging Trust Incorporated | ||
| 000 X. Xxxx Xxxxxxxxx Xxxxxxx | ||
| Xxxxx 0000 | ||
| Xxxxxx, XX 00000 | ||
| Attn: Xx. Xxxx X. Xxxxxxx | ||
| [Telecopier No. 000-000-0000] |
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with a copy to:
| FelCor Lodging Trust Incorporated | ||
| 000 X. Xxxx Xxxxxxxxx Xxxxxxx | ||
| Xxxxx 0000 | ||
| Xxxxxx, XX 00000 | ||
| Attn: General Counsel | ||
| [Telecopier No. 000-000-0000] |
If to the Purchaser, to:
| Hospitality Properties Trust | ||
| 000 Xxxxxx Xxxxxx | ||
| Xxxxxx, Xxxxxxxxxxxxx 00000 | ||
| Attn: Xx. Xxxx X. Xxxxxx | ||
| [Telecopier No. (000) 000-0000] |
with a copy to:
| Xxxxxxxx & Worcester LLP | ||
| Xxx Xxxx Xxxxxx Xxxxxx | ||
| Xxxxxx, Xxxxxxxxxxxxx 00000 | ||
| Attn: Xxxxx X. Xxxxxxxx, Esq. | ||
| [Telecopier No. (000) 000-0000] |
(d) By notice given as herein provided, the parties hereto and their respective successors and
assigns shall have the right from time to time and at any time during the term of this Agreement to
change their respective addresses effective upon receipt by the other parties of such notice and
each shall have the right to specify as its address any other address within the United States of
America.
12.5 Waivers, Etc. Any waiver of any term or condition of this Agreement, or of the
breach of any covenant, representation or warranty contained herein, in any one instance, shall not
operate as or be deemed to be or construed as a further or continuing waiver of any other breach of
such term, condition, covenant, representation or warranty or any other term, condition, covenant,
representation or warranty, nor shall any failure at any time or times to enforce or require
performance of any provision hereof operate as a waiver of or affect in any manner such party’s
right at a later time to enforce or require performance of such provision or any other provision
hereof. This Agreement may not be amended, nor shall any waiver, change, modification, consent or
discharge be effected, except by an instrument in writing executed by or on behalf of the party
against whom enforcement of any amendment, waiver, change, modification, consent or discharge is
sought.
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12.6 Assignment; Successors and Assigns. This Agreement and all rights and
obligations hereunder shall not be assignable by any party without the written consent of the other
parties, except that (x) Purchaser may assign this Agreement to any entity wholly owned, directly
or indirectly, by the Purchaser (provided, however, that, in the event this
Agreement shall be assigned to any entity wholly owned, directly or indirectly, by the Purchaser,
Hospitality Properties Trust shall remain liable for the obligations of the “Purchaser” hereunder).
In addition, Purchaser shall have the right to require that the Properties or any part thereof be
conveyed directly to its designee. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective legal representatives, successors and permitted
assigns. This Agreement is not intended and shall not be construed to create any rights in or to be enforceable in any part by any
other persons.
12.7 Severability. If any provision of this Agreement shall be held or deemed to be,
or shall in fact be, invalid, inoperative or unenforceable as applied to any particular case in any
jurisdiction or jurisdictions, or in all jurisdictions or in all cases, because of the conflict of
any provision with any constitution or statute or rule of public policy or for any other reason,
such circumstance shall not have the effect of rendering the provision or provisions in question
invalid, inoperative or unenforceable in any other jurisdiction or in any other case or
circumstance or of rendering any other provision or provisions herein contained invalid,
inoperative or unenforceable to the extent that such other provisions are not themselves actually
in conflict with such constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid, inoperative or
unenforceable provision had never been contained herein and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent permitted in such jurisdiction or
in such case.
12.8 Counterparts, Etc. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument. This Agreement constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and shall supersede and take the place of any other
instruments purporting to be an agreement of the parties hereto relating to the subject matter
hereof.
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12.9 Governing Law. This Agreement shall be interpreted, construed, applied and
enforced in accordance with the laws of the State of New York applicable to contracts between
residents of New York which are to be performed entirely within New York, regardless of (i) where
this Agreement is executed or delivered; or (ii) where any payment or other performance required by
this Agreement is made or required to be made; or (iii) where any breach of any provision of this
Agreement occurs, or any cause of action otherwise accrues; or (iv) where any action or other
proceeding is instituted or pending; or (v) the nationality, citizenship, domicile, principal place
of business, or jurisdiction of organization or domestication of any party; or (vi) whether the
laws of the forum jurisdiction otherwise would apply the laws of a jurisdiction other than the
State of New York; or (vii) any combination of the foregoing.
12.10 Waiver of Jury Trial. Except to the extent prohibited by law which cannot be
waived, each party hereto waives trial by jury in connection with any action or proceeding of any
nature whatsoever arising under, out of or in connection with this Agreement.
12.11 Performance on Business Days. In the event the date on which performance or
payment of any obligation of a party required hereunder is other than a Business Day, the time for
payment or performance shall automatically be extended to the first Business Day following such
date.
12.12 Attorneys’ Fees. If any lawsuit or arbitration or other legal proceeding arises
in connection with the interpretation or enforcement of this Agreement, the prevailing party
therein shall be entitled to receive from the other party the prevailing party’s costs and
expenses, including reasonable attorneys’ fees incurred in connection therewith, in preparation
therefor and on appeal therefrom, which amounts shall be included in any judgment therein.
12.13 Section and Other Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or interpretation of this
Agreement.
12.14 Time of Essence. Time shall be of the essence with respect to the performance
of each and every covenant and obligation, and the giving of all notices, under this Agreement.
12.15 Nonliability of Trustees. THE DECLARATION OF TRUST ESTABLISHING THE PURCHASER,
A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE “DECLARATION”), IS DULY FILED
WITH
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THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT THE NAME
“HOSPITALITY PROPERTIES TRUST” REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS
TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE
OR AGENT OF THE PURCHASER SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY
OBLIGATION OF, OR CLAIM AGAINST, THE PURCHASER. ALL PERSONS DEALING WITH THE PURCHASER, IN ANY
WAY, SHALL LOOK ONLY TO THE ASSETS OF THE PURCHASER FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE
OF ANY OBLIGATION.
[SIGNATURES ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as a sealed
instrument as of the date first above written.
| FCH PARTIES: | |||||
| FELCOR LODGING TRUST INCORPORATED, | |||||
| a Maryland real estate investment trust | |||||
| By: | /s/ Xxxx X. Xxxxxxx | ||||
| Xxxx X. Xxxxxxx | |||||
| Vice President | |||||
| FELCOR TRS GUARANTOR L.P., a Delaware limited partnership | |||||
| By: | FelCor TRS Guarantor GP, L.L.C., a | ||||
| Delaware limited liability company, | |||||
| its General Partner | |||||
| By: | /s/ Xxxx X. Xxxxxxx | ||||||
| Xxxx X. Xxxxxxx | |||||||
| Vice President | |||||||
| FELCOR LODGING COMPANY, L.L.C., | |||||||
| a Delaware limited liability company | |||||||
| By: | /s/ Xxxx X. Xxxxxxx | ||||||
| Xxxx X. Xxxxxxx | |||||||
| Vice President | |||||||
| FELCOR/JPM ATLANTA CP HOTEL, L.L.C., | |||||
| a Delaware limited liability company | |||||
| By: | /s/ Xxxx X. Xxxxxxx | ||||
| Xxxx X. Xxxxxxx | |||||
| Vice President | |||||
[Signatures Continue on Next Page]
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| BHR LODGING TENANT COMPANY, a Delaware company | |||||
| By: | /s/ Xxxx X. Xxxxxxx | ||||
| Xxxx X. Xxxxxxx | |||||
| Vice President | |||||
| BHR OPERATIONS, L.L.C., a Delaware limited liability company | |||||
| By: | /s/ Xxxx X. Xxxxxxx | ||||
| Xxxx X. Xxxxxxx | |||||
| Vice President | |||||
| FELCOR TRS HOLDINGS, L.P., a Delaware limited partnership | |||||||
| By: | FelCor TRS I, L.L.C., | ||||||
| a Delaware limited liability company, | |||||||
| its General Partner | |||||||
| By: | /s/ Xxxx X. Xxxxxxx | ||||||
| Xxxx X. Xxxxxxx | |||||||
| Vice President | |||||||
| BHR TEXAS LEASING, L.P., a Delaware limited partnership | |||||||
| By: | BHR Texas Leasing GP, L.L.C., | ||||||
| a Delaware limited liability company, | |||||||
| its General Partner | |||||||
| By: | /s/ Xxxx X. Xxxxxxx | ||||||
| Xxxx X. Xxxxxxx | |||||||
| Vice President | |||||||
[Signatures Continue on Next Page]
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| PURCHASER: | |||||
| HOSPITALITY PROPERTIES TRUST, | |||||
| a Maryland real estate investment trust | |||||
| By: | /s/ Xxxx X. Xxxxxx | ||||
| Xxxx X. Xxxxxx | |||||
| President | |||||
[Signature Page for FelCor Purchase and Sale Agreement]
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