Exhibit 2.1
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made as of the 17th day of December,
2003, by and between Convention Hotel Partners, LLC, an Indiana limited
liability company (hereinafter called "Seller"), and LaSalle Hotel Operating
Partnership, L.P., a Delaware limited partnership ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller subleases Land, as defined below, and owns the hotel known
as the Marriott Hotel Downtown Indianapolis in Indianapolis, Indiana and desires
to assign such sublease and to sell such hotel and related improvements to
Purchaser on the terms and conditions set forth below; and
WHEREAS, the Purchaser desires to assume such sublease and purchase such
hotel and related improvements from Seller on the terms and conditions set forth
below;
NOW, THEREFORE, in consideration of the premises and the respective
undertakings of the parties hereinafter set forth, it is hereby agreed:
SECTION 1. DEFINITIONS. Wherever used in this Agreement, the words and
phrases set forth below shall have the meanings set forth below or in an Exhibit
to this Agreement to which reference is made, unless the context clearly
requires otherwise.
A. "Closing" means the closing at which Seller conveys title to the Project
to Purchaser and Purchaser pays Seller the purchase price described in Section 2
herein below.
B. "Closing Date" means the date which is ten (10) days after the end of
the Inspection Period (as defined in Section 6D below) or such other date as
shall otherwise be agreed upon by the parties for the Closing.
C. "Consumables" shall mean all food and beverages (including alcoholic and
non-alcoholic), engineering, maintenance, and housekeeping supplies (including
soap, cleaning materials and matches), stationery, printing and other supplies
of all kinds and used in connection with the ownership, operation and
maintenance of the Project and FF & E and all merchandise located in stores
operated by or on behalf of Seller at the Project.
D. "Financial Statements" means all financial statements and information
relating to the Project which are referred to in Section 3(M) hereof.
E. "Existing Franchise Agreement" means the existing franchise agreement
for the Project with Marriott (defined below).
F. "Furniture, Fixtures and Equipment" shall mean all tangible personal
property, excluding the Consumables, located on the Project, and used in
connection with the ownership, operation and maintenance of the Project
(collectively, the "FF & E"); provided, however, the FF&E shall not include any
property leased by Seller under the Equipment Leases (defined below). The FF & E
shall include all fixtures, furniture, furnishings, fittings, televisions, art
work, vehicles, equipment, computer hardware and non-proprietary software,
machinery, apparatus, appliances, china, glassware, linens, silverware, keys and
uniforms owned by Seller and used in connection with the ownership, operation,
and maintenance of the Project.
G. "Improvements" means all buildings, structures, fixtures and other
improvements of Owner now or hereafter located or erected on the Land, including
(without limitation) an approximately 497,000 square foot hotel located on the
Land which includes 615 guest rooms and approximately 40,000 square feet of
meeting rooms and is commonly known as the "Marriott Hotel Downtown
Indianapolis", and a parking garage located beneath the hotel containing
approximately 300 parking spaces.
H. "Land" means Seller's subleasehold interest in the real property located
at 000 Xxxx Xxxxxxxx Xxxxxx in Indianapolis, Xxxxxx County, Indiana containing
approximately 2.65 acres and more particularly described on Exhibit A hereto,
including all adjacent roadways, rights-of-way and alleys to the extent Seller
has an interest therein, all oil, gas and other mineral rights and all easements
and other rights appurtenant to such real property.
I. "License Premises" means that part of the Improvements in which
alcoholic beverages are authorized to be kept and sold pursuant to the Liquor
License.
J. "Liquor License" means that certain alcoholic beverage permit #RH4918796
issued in the name of Seller by the Indiana Alcohol & Tobacco Commission and
expiring November 27, 2004, together with any supplemental designations relating
to the Liquor License.
K. "Personal Property" means all tangible and intangible personal property
now or hereafter owned by the Seller and used in connection with the operation
of the Project, including, without limitation, (i) the personal property
described in Exhibit B, and all other building and construction materials,
equipment, appliances, machinery and personal property owned by Seller and used
in connection with the operation of the Project, (ii) the Consumables, (iii) the
Furniture, Fixtures and Equipment, (iv) all permits, licenses, certificates and
approvals issued in connection with the Project to the extent assignable or
transferable, (v) the exclusive right to use the name of the Project and all
other names, logos, and designs used in connection with the Project, including
the Project's bars, restaurants, banquet rooms and meeting rooms, subject to the
rights and interests of Marriott International. Inc. ("Marriott") under the
Existing Franchise Agreement, (vi) the right to use the Project's telephone
numbers and post office boxes, (vii) all booking agreements, (viii) all service
marks and trademarks, subject to the rights of Marriott under the Existing
Franchise Agreement, (ix) all prepaid assets, including prepaid advertising and
sales materials, (x) all plans and specifications, operating manuals, guaranties
and warranties and any other items used in the operation of the Project to the
extent assignable or transferable, and (xi) all books and records pertaining to
the Project, including all documents relating to guests at the Project and
employees at the Project.
L. "Project" means the Land, the Personal Property, the Improvements and
Seller's interests in the Project Agreements, Tenant Leases, Service and Supply
Contracts and Equipment Leases.
M. "Project Agreement(s)" means, collectively, (i) that certain Project
Agreement dated as of June 29, 1999 by and between Seller and the Department of
Metropolitan Development of the Consolidated City of Indianapolis, acting for
and on behalf of the Metropolitan Development Commission of Xxxxxx County,
Indiana, in its capacity as the Redevelopment Commission of the City of
Indianapolis (the "MDC"), (ii) that certain Lease dated as of June 23, 1999 by
and between the Capital Improvement Board of Managers of Xxxxxx County, Indiana
(the "CIB") and the MDC, (iii) that certain Convention Center Hotel Sublease
dated as of June 23, 1999 by and between the MDC and Seller (the "Sublease"),
(iv) that certain Recognition, Non-Disturbance and Attornment Agreement dated as
of June 23, 1999 by and among the CIB, the MDC, and Seller, (v) that certain
Construction and Operation Agreement dated as of June 23, 1999 by and among the
CIB, the MDC, and the Xxxxxx County
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Convention and Recreational Facilities Authority, (vi) that certain Construction
and Operation Agreement dated as of June 23, 1999 by and among the CIB, the MDC
and the State Office Building Commission, (vii) that certain Assignment and
Assumption of Certain Obligations under Skybridge Agreement dated as of June 23,
1999 by and between the MDC and Seller, (viii) that certain Access Easement
Agreement dated as of June 23, 1999 by and between the State Office Building
Commission and the CIB for the use and benefit of the MDC, (ix) that certain
letter agreement regarding parking dated as of May 12, 1999 by and between the
State Office Building Commission and Seller, (x) Section 2.8 of that certain
Agreement for Architect's Services, dated June 14, 1999, between the Department
of Metropolitan Development, acting on behalf of the Metropolitan Development
Commission of Xxxxxx County, Indiana, and Hellmuth, Obata & Kassabaum (the
"Architect"), and, at Purchaser's option, any other provisions identified by
Purchaser in such agreement, and (xi) at Purchaser's option, provisions
identified by Purchaser in that certain Construction Management Agreement, dated
June 23, 1999, between Xxxxx, Xxxx and Xxxxxxx, Inc. (the "Construction
Manager") and the Department of Metropolitan Development, acting on behalf of
the Metropolitan Development Commission of Xxxxxx County, Indiana.
N. "Seller's Knowledge" means the actual knowledge of Xxxx Xxxxxxx. Xxxxx
Xxxxxxx, Xxxxx Xxxxx, Xxxx Xxxxxx and Xxxx Xxxxxx.
O. "Title Company" means Chicago Title Insurance Company.
SECTION 2. AGREEMENT TO SELL AND PURCHASE.
A. Purchase Price. On the Closing Date, Seller shall assign and convey the
Project to Purchaser or Purchaser's designee on the terms and conditions set
forth herein. On the Closing Date, the Purchaser or Purchaser's designee shall
assume and accept the Project from Seller on the terms and conditions set forth
herein and shall pay to the Seller the purchase price ("Purchase Price") in
immediately available funds of ONE HUNDRED SIX MILLION DOLLARS ($106,000,000),
subject to prorations and other adjustments as set forth below.
X. Xxxxxxx Money. Upon the execution of this Agreement, Purchaser shall
deposit FIVE HUNDRED THOUSAND DOLLARS ($500,000) (the "Initial Xxxxxxx Money
Deposit") with the Title Company. Within thirty (30) days from the date hereof,
Purchaser shall deposit an additional FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS
($4,500,000) with the Title Company (the "Second Xxxxxxx Money Deposit")
provided this Agreement has not been terminated prior thereto in accordance with
this Agreement (the Initial Xxxxxxx Money Deposit and the Second Xxxxxxx Money
Deposit are herein collectively called the "Xxxxxxx Money"). The Xxxxxxx Money
shall be held by the Title Company in accordance with the terms hereof and
invested in a money market account with all interest earned thereon payable with
the Xxxxxxx Money. If this Agreement is terminated due to Purchaser's default
hereunder, the Xxxxxxx Money shall be paid to Seller as liquidated damages and
as Seller's sole and exclusive remedy. If the Closing occurs hereunder, the
Xxxxxxx Money shall be paid to Seller and credited against the Purchase Price.
If the Closing does not occur hereunder for any reason other than Purchaser's
default hereunder, the Xxxxxxx Money shall be refunded to Purchaser.
SECTION 3. REPRESENTATIONS AND WARRANTIES BY SELLER. Seller hereby
represents and warrants to, and covenants and agrees with, Purchaser as of the
date hereof and as of the Closing as follows (all of which representations and
warranties shall be deemed automatically remade as of the Closing):
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A. Due Organization. Seller is an Indiana limited liability company duly
organized and validly existing under the laws of the State of Indiana; Seller
has full organizational power and authority, and is duly authorized, to execute,
enter into, deliver and perform this Agreement and its obligations hereunder.
B. Power. This Agreement and all other agreements, instruments and
documents required to be executed or delivered by Seller pursuant hereto have
been or (if and when executed) will be duly executed and delivered by Seller,
and are or will be legal, valid and binding obligations of Seller. Provided that
Seller is able to obtain any and all consents or approvals that may be required
under the Project Agreements with respect to the transactions contemplated by
this Agreement which are listed on Exhibit M attached, the consummation of the
transactions contemplated herein and the fulfillment of the terms hereof will
not result in a breach of any of the terms or provisions of, or constitute a
default under, any agreement or document to which the Seller is a party or by
which it is bound, or any order, rule or regulation of any court or of any
federal or state regulatory body or any administrative agency or any other
governmental body having jurisdiction over the Seller or the Project.
C. Title. To Seller's Knowledge, Seller has good and marketable title to
the Project, subject only to the Project Agreements, liens for current real
estate taxes and assessments not yet due and payable, and any matters that would
be disclosed by a complete and accurate survey and physical inspection of the
Project. All food and beverage operations at the Project are owned by Seller,
and Seller owns all merchandise for sale at the Project other than merchandise
in stores leased pursuant to the Tenant Leases.
D. Permits and Legal Compliance. To the best of Seller's Knowledge, Seller,
or its Operator, as below defined, has all licenses, permits and certificates
necessary for the use and operation of the Project as presently operated,
including, without limitation, all certificates of occupancy (if applicable) and
hotel, restaurant and liquor licenses necessary for the occupancy and operation
of the Project as presently operated. To the best of Seller's Knowledge, the
Project, including the use thereof, complies in all material respects with all
Project Agreements and all applicable laws, rules and regulations as presently
in effect as of the Effective Date, including the Americans with Disabilities
Act and all applicable zoning laws.
E. No Proceedings. To the best of Seller's Knowledge, there is no action,
suit or proceeding pending before any court or governmental agency or body
against the Project or the Seller, which would have a material adverse effect on
the Project; and, to the best of Seller's Knowledge, no such material action,
suit or proceeding has been threatened in writing. Without limiting the
generality of the foregoing, Seller has not received any written notices of any
violations or alleged material violations of any laws, rules, regulations or
codes, including building codes, with respect to the Project which have not been
corrected to the satisfaction of the governmental agency issuing such notices.
F. Eminent Domain. There are no pending condemnation, eminent domain or
similar proceedings relating to the Project or any portion thereof or any
interest (whether legal, beneficial or otherwise) or estate therein; and, to the
best of Seller's Knowledge, no such proceedings have been threatened in writing.
G. Zoning; Taxes. There are no pending or, to the best of Seller's
Knowledge, threatened zoning changes or variances with respect to the Project;
nor to Seller's Knowledge has anyone initiated any request or application for a
zoning change or variance with respect to the Project. There are no pending or,
to the best of Seller's Knowledge, threatened changes in access to the Project.
There are no pending or, to the best of Seller's Knowledge, threatened
reassessments or special tax assessments, liens, tax warrants or judgments
against the Project other than the 2002 real property tax reassessment, and the
Project is separately assessed for real estate tax purposes.
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H. Service and Supply Contracts. Attached hereto as Exhibit C is a list of
all contracts or agreements to which Seller is a party for the providing of
services or supplies to or management of the Project, including (without
limitation) a list of all amendments and modifications thereto and assignments
thereof (which contracts and agreements, together with the contracts and
agreements entered into by Seller with respect to the Project after the date
hereof in accordance with the terms of this Agreement, are herein referred to
collectively as the "Service and Supply Contracts"). Seller has hereto delivered
to Purchaser true and correct copies of the Service and Supply Contracts. Except
as may be shown in said exhibit, all of the Service and Supply Contracts are in
full force and effect and free from material default by Seller and, to Seller's
Knowledge, free from material default by the other party or parties thereto and
there is no existing event which, with the passage of time or giving of notice,
or both, would become a material default under the Service and Supply Contracts
by Seller and, to Seller's Knowledge, there is no event which, with the passage
of time or giving of notice, or both, would become a material default under the
Service and Supply Contracts by the other party or parties thereto, and, to
Seller's Knowledge, there are no disputes, claims or rights of set-off under the
Service and Supply Contracts. All charges under the Service and Supply Contracts
have been paid through the dates shown on Exhibit C.
I. Equipment Leases. Attached hereto as Exhibit D is a list of all
equipment leases to which Seller is a party for the leasing of equipment for the
Project, including (without limitation) a list of all amendments and
modifications thereto and assignments thereof (which leases, together with the
equipment leases entered into by Seller with respect to the Project after the
date hereof in accordance with the terms of this Agreement, are herein referred
to collectively as the "Equipment Leases"). Seller has hereto delivered to
Purchaser true and correct copies of the Equipment Leases. Except as may be
shown in said exhibit, all of the Equipment Leases are in full force and effect
and free from material default by Seller and, to Seller's Knowledge, free from
material default by the other party or parties thereto and there is no existing
event which, with the passage of time or giving of notice, or both, would become
a material default under the Equipment Leases by Seller and, to Seller's
Knowledge, there is no event which, with the passage of time or giving of notice
or both, would become a material default under the Equipment Leases by the other
party or parties thereto, and, to Seller's Knowledge, there are no disputes,
claims or rights of set-off under the Equipment Leases. All charges under the
Equipment Leases have been paid through the dates shown on Exhibit D.
J. Tenant Leases. Attached hereto as Exhibit E is a list of all outstanding
leases or agreements pursuant to which any person occupies, or has the right to
occupy, space in the Project including all amendments and modifications thereto
and assignments and guaranties thereof (which leases, agreements and other
documents, together with the lease documents entered into by Seller after the
date hereof in accordance with the terms of this Agreement, are referred to
collectively as the "Tenant Leases"). Seller has heretofore delivered to
Purchaser true and correct copies of the Tenant Leases. Except as shown on such
Exhibit, (i) to the best of Seller's Knowledge, there are no material defaults
under any of the Tenant Leases and the Tenant Leases are in full force and
effect, there are no existing events which with the passage of time or giving of
notice or both would become a material default under the Tenant Leases, and
there are no disputes, claims or rights of set-off under the Tenant Leases, (ii)
except as shown on such exhibit, there are no security deposits nor any rights
to refunds of rents previously paid under the Tenant Leases, and all rents due
to date have been paid on the Tenant Leases, (iii) there are no brokerage
commissions or fees due now or payable in the future in connection with the
Tenant Leases, (iv) all of the landlord's concessions under the Tenant Leases
have been paid and performed in full (other than any unexpired rent abatement
set forth in the Tenant Leases), (v) to the best of Seller's Knowledge there are
no bankruptcy or insolvency proceedings pending or threatened with respect to
any of the tenants under the Tenant Leases, and there are no material adverse
changes in the financial condition of any such tenants, and (vi) no tenant has
notified Seller in writing of any material, uncured defects or alleged defects
in its premises or the common areas of the Project. In the event any such
notices are received by Seller between the date of this Agreement and Closing,
copies thereof shall be furnished to Purchaser.
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K. Labor Contracts. Attached hereto as Exhibit F is a list of all employees
working for the Operator on behalf of Seller at the Project, including their
salaries and benefits, all of whom are employees of the Operator for the
Project, and not of Seller; and Purchaser will be under no obligation to use or
hire such employees for the Project after Closing (except as provided elsewhere
in this Agreement). There are no employment agreements for employees at the
Project or union contracts with respect to the Project that will be binding on
Purchaser after Closing. To the best of Seller's Knowledge, there are no unfair
labor proceedings, strikes or other material employee disputes pending or
threatened with respect to the Project. To the best of Seller's Knowledge, all
employees working at the Project comply with all immigration laws and have all
work permits, visas and other documents necessary to legally work at the
Project.
L. Disclosure. There are no contracts or agreements of any kind relating to
the Project to which Seller or its agents is a party and which would be binding
on Purchaser after Closing, including brokerage agreements, other than this
Agreement, the documents delivered pursuant hereto, and the Project Agreements,
the Tenant Leases, the Service and Supply Contracts and the Equipment Leases.
M. Financial Information. Seller has delivered to Purchaser financial
statements for the Project for that portion of calendar year 2001 from and after
commencement of operations at the Project and for calendar year 2002, and
interim financial statements for the first ten (10) monthly periods of calendar
year 2003. Such financial statements are true, complete and correct in all
material respects, for their respective periods of reporting, and have been
prepared in accordance with generally accepted accounting principles, and no
event has occurred with respect to the operation of the Project since the date
of those financial statements which would materially and adversely affect the
operation of the Project as presently operated.
N. Bookings. Attached hereto as Exhibit N is a list of all bookings for the
Project as of the date set forth on Exhibit N.
O. Hazardous Wastes. To the best of Seller's Knowledge, except for those
hazardous materials which are normally used in the operation of properties
similar to the Project and which are stored in compliance with all applicable
laws, the Project is free of asbestos, PCBs, toxic wastes and other hazardous
materials, has never been used as a dumping site or storage site for toxic or
hazardous wastes and is in compliance in all material respect with all
environmental laws. For purposes of this paragraph, "toxic wastes and other
hazardous materials" shall include any hazardous, toxic or dangerous waste,
substance or material defined as such in (or for purposes of) the Comprehensive
Environmental Response, Compensation, and Liability Act, and so-called
"Superfund" or "Superlien" law, or any Federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating to, or
imposing liability or standards of conduct concerning, any hazardous, toxic or
dangerous waste, substance or material, as now in effect. Seller is not required
to file a disclosure statement under the Indiana Responsible Property Transfer
Act.
P. ERISA. The Seller is not and is not acting on behalf of an "employee
benefit plan" within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), a "plan" within the meaning
of Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code") or
an entity deemed to hold "plan assets" within the meaning of 29 C.F.R. (S)
2510.3 101 of any such employee benefit plan or plans.
Q. Existing Management Agreement. Seller and White Lodging Services
Corporation, an Indiana corporation (the "Operator"), are parties to a
Management Agreement, dated June 23, 1999, for the Project (the "Existing
Management Agreement"). The Existing Management Agreement has not been modified
or amended
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and is in full force and effect. Seller has previously delivered to Purchaser a
true, correct and complete copy of the Existing Management Agreement. To the
best of Seller's Knowledge, there are no material defaults under the Existing
Management Agreement and there are no existing events which with the passage of
time or giving of notice or both would become a material default under the
Existing Management Agreement, and there are no disputes, claims or rights of
set-off under the Existing Management Agreement.
R. Project Agreements. The Project Agreements have not been modified or
amended, and Seller has hereto delivered to Purchaser true and correct copies of
the Project Agreements. All of the Project Agreements are in full force and
effect and free from material default by Seller and, to Seller's Knowledge, free
from material default by the other party or parties thereto and there is no
existing event which, with the passage of time or giving of notice, or both,
would become a material default under the Project Agreements by Seller and, to
Seller's Knowledge, there is no event which, with the passage of time or giving
of notice or both, would become a material default under the Project Agreements
by the other party or parties thereto, and, to Seller's Knowledge, there are no
disputes, claims or rights of set-off under the Project Agreements. All charges
under the Project Agreements have been paid through the date hereof.
S. Liquor License. The Liquor License is in good standing with the Indiana
Alcohol & Tobacco Commission. There are no outstanding taxes, including, but not
limited to, sales and property taxes, fees and other charges relating to the
Liquor License which are due and payable. The Seller has not been cited for
hearing for violation of the law, rules or regulations relating to the Liquor
License. The Seller is not under an order of suspension or revocation relating
to the Liquor License.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, PURCHASER ACKNOWLEDGES AND
AGREES THAT PURCHASER IS PURCHASING AND ACQUIRING THE PROJECT "AS-IS", "WHERE
IS", AND WITH ALL FAULTS, AND THAT EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT,
SELLER HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATIONS, WARRANTIES, PROMISES,
COVENANTS, AGREEMENTS OR GUARANTIES, WHETHER EXPRESS OR IMPLIED, WRITTEN OR
ORAL, OF ANY KIND OR NATURE WHATSOEVER WITH RESPECT TO THE PROJECT OR ANY ASPECT
OR COMPONENT THEREOF, INCLUDING WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED
REPRESENTATIONS OR WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, HABITABILITY,
AND/OR MERCHANTABILITY; AND, EXCEPT AS SET FORTH IN THIS AGREEMENT, SELLER MAKES
NO REPRESENTATION OR WARRANTY AS TO THE ACCURACY OR COMPLETENESS OF THE
INFORMATION SET FORTH IN ANY REPORTS, SURVEYS, STUDIES, ANALYSES OR OTHER
MATERIALS FURNISHED BY SELLER OR OPERATOR TO PURCHASER OR OBTAINED BY PURCHASER
WITH RESPECT TO THE PROJECT. EXCEPT AS SET FORTH IN THIS AGREEMENT, PURCHASER
FURTHER ACKNOWLEDGES THAT PURCHASER IS RELYING SOLELY ON ITS OWN INSPECTIONS AND
INVESTIGATIONS WITH RESPECT TO ALL MATTERS REGARDING THE PROJECT.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants to, and covenants and agrees with, Seller as of the date
hereof and as of the Closing as follows (all of which representations and
warranties shall be deemed automatically remade as of the Closing):
A. Due Organization. Purchaser is a limited partnership organized, validly
existing and in good standing under the laws of the State of Delaware and will
by Closing be duly qualified to transact business in the State of Indiana.
Purchaser has full power and authority, and is duly authorized, to execute,
enter into, deliver and perform this Agreement and its obligations hereunder.
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B. Power. This Agreement and all other agreements, instruments and
documents required to be executed or delivered by Purchaser pursuant hereto have
been or (if and when executed) will be duly executed and delivered by Purchaser,
and are or will be legal, valid and binding obligations of Purchaser. No
consents and permissions are required to be obtained by Purchaser for the
execution and performance of this Agreement and the other documents to be
executed by Purchaser hereunder. The consummation of the transactions
contemplated herein and the fulfillment of the terms hereof will not result in a
breach of any of the terms or provisions of, or constitute a default under, any
agreement or document to which Purchaser is a party or by which it is bound, or
any order, rule or regulation of any court or of any federal or state regulatory
body or any administrative agency or any other governmental body having
jurisdiction over Purchaser.
C. No Proceedings. There are not now pending or, to the best of Purchaser's
knowledge, threatened, any action, suit or proceeding, legal, equitable or
otherwise, against Purchaser which would affect its ability to perform its
obligations hereunder. There is not now pending or, to the best of Purchaser's
knowledge, threatened any action, suit or proceeding before any court or
governmental agency or body which might adversely affect Purchaser's ability to
perform its obligations hereunder.
SECTION 5. OPERATION OF THE PROJECT PRIOR TO CLOSING. The Seller shall do
all of the following, from and after the date hereof through and including the
Closing Date:
A. operate and maintain the Project in the manner in which it presently is
maintained and operated (normal wear and tear and damage from casualty and
condemnation excepted), maintain the good will of the Project and, subject to
damage, destruction or loss to the Project in which event Purchaser shall have
the rights set forth in Section 6C, cause the Project to be, on the Closing
Date, in substantially the same condition as exists as of the date of this
Agreement (normal wear and tear excepted); and promptly correct all building
code and other governmental violations with respect to the Project of which it
receives written notice prior to Closing;
B. maintain the Furniture, Fixtures and Equipment in substantially their
present condition (damage, destruction or other loss from casualty, and normal
wear and tear, excepted), and not remove any of the Furniture, Fixtures or
Equipment from the Project unless replaced with Furniture, Fixtures and
Equipment of at least as good a quality as that removed;
C. maintain the Consumables in substantially their present condition and
replace any Consumables used at the Project with new Consumables which are
substantially equal in quality and quantity to those that have been used at the
Project;
D. maintain, or cause to be maintained, all existing insurance carried by
Seller on the Improvements;
E. without the prior written consent of Purchaser which shall not be
unreasonably withheld, conditioned or delayed, (i) not enter into any new
contracts or agreements affecting the Project which would be binding on
Purchaser after Closing, except for contracts and agreements entered into in the
ordinary course of operating the Project; and (ii) not, except in the ordinary
course of operating the Project, modify, amend, terminate, cancel or grant
concessions regarding any existing contracts or agreements affecting the Project
which would be binding on the Purchaser after Closing;
F. perform all of its obligations accruing prior to Closing under any
material contracts or agreements affecting the Project;
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G. without the prior written consent of Purchaser, such consent not to be
unreasonably withheld, conditioned or delayed and to be promptly given (except
that no consent from Purchaser shall be required in the case of emergencies or
for any alterations or modifications that may be required by law), not make, or
obligate itself to make, any alterations or modifications to the Project, except
for alterations and modifications made prior to the end of the Inspection Period
the cost of which, in the aggregate, do not exceed of Fifty Thousand Dollars
($50,000.00); and
H. without the prior written consent of Purchaser, such consent not to be
unreasonably withheld, conditioned or delayed and to be promptly given, not
enter into any new group bookings in excess of, for any one (1) such booking,
one hundred (100) rooms for the Project which are not in the ordinary course of
business and consistent with past practices.
SECTION 6. CONDITIONS TO CLOSING. In addition to the conditions provided in
other provisions of this Agreement, the parties' obligations to perform their
undertakings provided in this Agreement, are each conditioned on the fulfillment
of each of the following which is a condition to such party's obligation to
perform hereunder (subject to such party's waiver in strict accordance with
Section 9 below):
A. Not later than twenty (20) days after the date hereof, Seller shall
deliver to Purchaser each of the following: (i) a copy of the existing as-built
ALTA/ACSM survey of the Project (the "Survey") certified to Purchaser and the
Title Company, including a certification that there have been no material
changes with respect thereto since the date prepared; (ii) evidence (which can
be in the form of a certificate of the surveyor in form and substance reasonably
acceptable to Purchaser) that the Project is not in a 100 year flood plain, and
(iii) a current title insurance commitment from Title Company for the Project
(the "Title Commitment") together with legible copies of all exceptions
appearing in such Title Commitment. Purchaser shall have ten (10) days following
the later of receipt of the Title Commitment or the Survey to object in writing
to any matter disclosed in the Survey and Title Commitment. Failure to object
within the ten (10) day period shall be deemed approval of the matters set forth
in the Title Commitment and Survey. All matters showing thereon which are
approved or deemed approved by Purchaser shall be deemed "Permitted Exceptions."
If Purchaser disapproves any matters in the Survey or Title Commitment, Seller
may, but shall not be obligated to, cure such matters; but if Seller cannot cure
such matters by 5:00 p.m. Central Standard time on the fifteenth (15th) day
after receipt of Purchaser's written objection notice, Purchaser may elect
either to terminate this Agreement by providing written notice of termination to
Seller or to accept such matters as Permitted Exceptions; provided, however,
Seller shall cause to be cured or insured over in a manner reasonably acceptable
to Purchaser any monetary liens on the Project which were either voluntarily
placed on the Project by Seller or which do not exceed $100,000 in the
aggregate. Purchaser shall be deemed to have elected to terminate this Agreement
if Purchaser does not notify Seller, in writing, by 5:00 p.m. Central Standard
time on that fifteenth (15th) day, that Purchaser is electing to accept such
matters as Permitted Exceptions.
B. As a condition to each party's obligation to perform hereunder, the due
performance by the other of all undertakings and agreements to be performed by
the other hereunder and the truth of each representation and warranty as set
forth herein made pursuant to this Agreement by the other at the Closing Date.
C. As a condition to Purchaser's obligation to perform hereunder (and not
as a default by Seller), there shall not have occurred between the date hereof
and the Closing Date, inclusive, destruction of or damage or loss to the Project
(whether or not covered by insurance proceeds) from any cause whatsoever which
either materially affects the common areas of the Project or which costs more
than One Million Dollars ($1,000,000) in the aggregate to repair; provided,
however, that in the event of such destruction or damage, Purchaser may elect to
proceed with the Closing in which case Seller shall assign to Purchaser at
Closing any claims for proceeds from the
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insurance policies covering such destruction or damage (including any business
interruption proceeds for the period after Closing) and shall credit Purchaser
at Closing the amount of any deductibles thereunder. If the cost of repairing
the destruction, damage or loss is less than One Million Dollars ($1,000,000) in
the aggregate and does not materially affect the common areas of the Project,
the parties shall proceed with the Closing as provided herein, the cost of
repair shall be deducted from the Purchase Price, and Seller shall assign to
Purchaser any business interruption proceeds for the period after Closing. Prior
to the end of the Inspection Period (defined below), as such Inspection Period
may be extended pursuant to the terms hereof, Seller shall cause Purchaser to be
added as an additional insured to Seller's business interruption insurance for
the Project which insurance shall provide coverage against any business
interruption at the Project for a minimum of one (1) year.
D. As a condition of Purchaser's obligation to perform hereunder (and not
as a default by Seller), Purchaser shall be satisfied in its sole and absolute
discretion with all aspects of the Project (including, but not limited to, the
physical and environmental condition of the Project); provided, however, if
Purchaser does not notify Seller in writing by 5:00 p.m. Central Standard time
on the date which is thirty (30) days from the Effective Date hereof (the
"Inspection Period") that is not satisfied and that it terminates this
Agreement, Purchaser shall be deemed to be satisfied with the condition of the
Project. If Purchaser timely provides written notice of termination pursuant to
the preceding sentence, this Agreement shall terminate and the Xxxxxxx Money
shall be refunded to Purchaser, Purchaser shall have no further interest in this
Agreement or the Project, and neither party shall have any further liability
under this Agreement except as otherwise expressly provided for in this
Agreement. Purchaser shall not be required to give its reasons for terminating
this Agreement pursuant to this paragraph.
E. As a condition to Purchaser's obligation to perform hereunder (and not
as a default by Seller), that there shall not have occurred at any time or times
on or before the Closing Date any taking or threatened taking of the Project or
any part thereof or any interest or estate therein by condemnation, eminent
domain or similar proceedings; provided, however, Purchaser may elect to waive
such condition in which case Seller shall assign to Purchaser at Closing all of
Seller's right, title and interest in and to any proceeds resulting from any
such proceeding.
F. As a condition to Purchaser's obligation to perform hereunder (and not
as a default by Seller), as of the Closing Date, all contracts and agreements
affecting the Project, including the Project Agreements, shall be in full force
and effect, unmodified and unwaived (except for terminations, modifications
and/or waivers permitted hereunder or to which Purchaser consents), and in good
standing and free from material default; provided, however, Seller covenants and
agrees, and it shall be a condition to Purchaser's obligation to perform its
undertakings hereunder, that Seller shall terminate at its expense any existing
management agreements and franchise agreements for the Project as of Closing.
G. As a condition to Purchaser's obligation to perform hereunder, Marriott
shall have agreed with Purchaser prior to the end of the Inspection Period to
enter into a replacement franchise agreement for the Project, effective as of
the Closing, in form and substance satisfactory to Purchaser in its sole
discretion (the "New Franchise Agreement"); provided, however, if Marriott has
not agreed with Purchaser to enter into the New Franchise Agreement by the end
of the Inspection Period, Purchaser may, upon written notice to Seller prior to
the end of the Inspection Period, extend the Inspection Period by up to a
maximum of thirty (30) days (the "First Extension Period") but solely for
purposes of entering into the New Franchise Agreement with Marriott and for no
other purpose. If Marriott has not agreed with Purchaser to enter into the New
Franchise Agreement by the end of the First Extension Period, Purchaser may,
upon written notice to Seller prior to the end of the First Extension Period,
extend the Inspection Period by up to a maximum of an additional thirty (30)
days (the "Second Extension Period") but solely for purposes of entering into
the New Franchise Agreement with Marriott and for no other purpose provided
Purchaser deposits the Second Xxxxxxx Money Deposit with the Title Company on or
before the
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commencement of the Second Extension Period. If Marriott has not agreed with
Purchaser to enter into the New Franchise Agreement by the end of the Second
Extension Period, Purchaser may, upon written notice to Seller prior to the end
of the Second Extension Period, extend the Inspection Period by up to a maximum
of another additional thirty (30) days (the "Third Extension Period") but solely
for purposes of entering into the New Franchise Agreement with Marriott and for
no other purpose provided Seller shall have the right to terminate this
Agreement at any time during the Third Extension Period on ten (10) days' prior
notice to Purchaser unless Purchaser notifies Seller prior to the end of such
ten (10) day period that it has entered into the New Franchise Agreement with
Marriott and is waiving the condition set forth in this paragraph. If Purchaser
has not notified Seller by the end of the Inspection Period, as it may be so
extended, that Purchaser has entered into the New Franchise Agreement with
Marriott, this Agreement shall automatically terminate, unless it has already
been terminated in accordance with the terms hereof prior thereto; and the
Xxxxxxx Money shall be returned to Purchaser. Purchaser shall use good faith
efforts to reach agreement with Marriott on the New Franchise Agreement provided
the New Franchise Agreement is in substantially the same form as the Existing
Franchise Agreement.
H. Seller covenants and agrees, and it shall be a condition to Purchaser's
obligation to perform its undertakings hereunder, that from and after the date
hereof, at all reasonable times, Purchaser (and its agents) shall be permitted
access to the Project and to all books, records and reports relating to the
Project for the purpose of inspecting same, and Purchaser (and its agents) shall
have the right to photocopy any and all such books, records and information. All
information relating to the Project made available to Purchaser shall be treated
as confidential by Purchaser and its employees and agents. Purchaser (and its
agents) shall also have the right to meet with the Operator of the Project
(including key employees and consultants) to discuss any matters relating to the
operation of the Project. Any entry by Purchaser and its agents on the Project
shall be upon reasonable prior notice to Seller and while accompanied by a
Seller representative and in a manner least disruptive to Seller's and its
tenants' businesses being conducted at or from the Project, and Purchaser will
indemnify and hold Seller harmless against any and all injuries, claims, losses,
damages and expenses arising out of its performance of any such entry,
inspection or other activities, and Purchaser shall, at Purchaser's cost and
expense, restore the Project to its condition as existed prior to the
performance of such entry, inspection or other activities. The previsions of the
preceding sentence shall survive termination of this Agreement.
I. As a condition to Purchaser's obligation to perform hereunder (and not
as a default by Seller), no notices of any violations of any laws shall have
been issued with respect to the Project prior to Closing, which have not been
corrected prior to Closing;
J. Seller acknowledges that Purchaser intends to obtain all licenses
necessary for the operation of the Project. To the extent necessary, Seller
shall cooperate with Purchaser (provided, that Seller shall not be required to
incur more than nominal cost or expense in connection therewith) to obtain the
required approvals for such license, and the costs and expenses associated with
Purchaser's efforts to obtain such licenses, including any costs and expenses
incurred by Seller in connection therewith which are more than nominal, shall be
paid by the Purchaser. It is expressly understood and agreed that Purchaser's
ability to obtain all necessary licenses for the Project is a condition
precedent to the obligations of Purchaser to purchase the Project pursuant to
this Agreement; provided, however, (i) Purchaser's right to terminate this
Agreement as a result of Purchaser's inability to obtain an alcoholic beverage
license for the Project shall be governed solely by the terms of Section 6(N)
below, and (ii) Purchaser's right to terminate this Agreement as a result of
Purchaser's inability to obtain any other licenses shall terminate thirty (30)
days after the date hereof and Purchaser shall be deemed to have satisfied
itself that it can obtain all such other licenses if Purchaser does not
terminate this Agreement within such thirty (30) day period. Purchaser agrees to
use its best efforts to obtain the required licenses.
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K. As a condition to Purchaser's obligation to perform hereunder, Purchaser
shall have obtained approval from the board of trustees of its general partner
for the transaction set forth herein on or before the expiration of the
Inspection Period (which for purposes of this paragraph shall not include any
extension periods as described in Paragraph 6(G) above). If Purchaser does not
notify Seller by the end of the Inspection Period that Purchaser has not
obtained such approval, this condition shall be deemed waived by Purchaser. If
Purchaser so notifies Seller by the end of the Inspection Period that Purchaser
has not obtained approval for the transaction set forth herein, this Agreement
shall terminate and the Xxxxxxx Money shall be returned to Purchaser, and
neither party shall have any further liability to one another hereunder except
for those provisions that expressly survive the termination of this Agreement.
L. As a condition to Seller's and Purchaser's obligations to perform
hereunder, Seller shall have been able to obtain prior to the Closing Date any
and all consents or approvals as may be required under the Project Agreements,
in order to consummate the transactions contemplated by this Agreement. If
Seller is unable to obtain such consents, Seller shall reimburse Purchaser, up
to a maximum of $50,000, for one-half of Purchaser's out-of-pocket expenses
incurred in connection with this Agreement and the purchase of the Project.
M. As a condition to Purchaser's obligation to perform hereunder, Seller
shall have obtained and delivered to Purchaser estoppel certificates in the form
attached hereto as Exhibit O from each of the parties to the Project Agreements
other than the Architect and Construction Manager; and Seller shall use
commercially reasonable efforts to obtain such certificates.
N. The obligations of Purchaser to consummate this transaction are
contingent on Purchaser being satisfied, in its sole judgment, during the
Inspection Period (which for purposes of this paragraph shall not include any
extension periods as described in Paragraph 6(G) above), that all necessary
approvals for the transfer to Purchaser of the Liquor License or the issuance to
Purchaser of a new Liquor License have been or will be obtained, and that
immediately after the Closing Purchaser will be able to lawfully continue the
sale of alcoholic beverages at the Licensed Premises during the pendency of such
Liquor License transfer. If Purchaser determines that it will be unable to
obtain the transfer or issuance of an acceptable Liquor License for the
Premises, or to lawfully continue the sale of alcoholic beverages at the
Licensed Premises during the pendency of such Liquor License transfer, then
Purchaser may terminate this Agreement by delivering written notice to the
Seller during the Inspection Period or this contingency shall be waived. Seller
agrees to execute and deliver any and all reasonable documents and to otherwise
cooperate with Purchaser in all reasonable respects in order to accomplish the
foregoing. Without limiting the foregoing, Seller shall
(i) execute and deliver to Purchaser (x) the required form of Consent
to Transfer, (y) such documentation as is required to name Purchaser
as Seller's Manager under the Liquor License, including a Manager's
Questionnaire, and to use Seller's liquor license after Closing,
assuming Purchaser provides Seller with any necessary information
which is not in Seller's possession or control, and (z) such other
documentation as Purchaser may reasonably require to evidence its
ability to continue to lawfully sell alcoholic beverages from the
Premises after Closing; provided, however, Purchaser shall be solely
responsible for any fees incurred in connection with the foregoing,
(ii) if the Liquor License will expire within ninety (90) days of
Closing, cause, at its sole cost and expense, the Liquor License to be
renewed, and
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(iii) not take any action, or omit to take any action, that would
cause the Liquor License to be revoked or suspended.
In connection with the foregoing, Seller shall obtain all necessary tax
clearances from the Xxxxxx County Treasurer necessary for the transfer of the
Liquor License.
SECTION 7. CLOSING.
A. Time. The Closing hereunder shall occur on the Closing Date at the
offices of the Title Company.
B. Actions. At the Closing, each party shall satisfy itself that the other
is then in position to deliver the items specified in Section 7C below and that
the conditions contained herein have been satisfied. Upon being so satisfied and
concurrently with the delivery of the documents described below, the following,
subject to the terms and conditions hereof, shall occur:
(1) Seller shall convey the Project, including the Project Agreements,
Tenant Leases, Service and Supply Contracts and Equipment Leases (all to
the extent transferable), to Purchaser; and
(2) Purchaser shall pay to Seller the Purchase Price by wire transfer
of immediately available funds, plus or minus prorations and credits as set
forth herein.
As mutually determined by Purchaser and Seller, the Closing shall occur
either as a "New York style" closing or through an escrow, the cost of which
shall be shared equally between Purchaser and Seller. If the parties agree to
have a "New York style" closing, Seller shall deliver to the Title Company, if
the Title Company so requires, a so called gap indemnity agreement in form
reasonably satisfactory to Seller, provided that the duration thereof shall be
limited to the period between the date of the Title Commitment and the date the
Assignment of Project Agreements (defined below) and the Deed (defined below)
are recorded. Purchaser shall receive full possession of the Project at Closing,
subject only to the Project Agreements, Tenant Leases and Permitted Exceptions.
C. Deliveries.
(1) At the Closing, Purchaser shall receive all of the following, in
form and substance reasonably satisfactory to Purchaser (it being agreed by
Purchaser that the documents attached hereto as exhibits are satisfactory
in form to Purchaser):
(a) an assignment and assumption of the Project Agreements in the
form of Exhibit P attached hereto (the "Assignment of Project
Agreements"), executed by the Seller;
(b) a special warranty deed for the Improvements in the form
customarily used in the jurisdiction where the Project is located,
executed by the Seller;
(c) a xxxx of sale and assignment for the Personal Property in
substantially the form of Exhibit H, executed by Seller;
(d) an assignment of the Service and Supply Contracts, in the
form of Exhibit I
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attached hereto (the "Assignment of Service and Supply Contracts"),
executed by Seller, assigning to Purchaser the Service and Supply
Contracts (subject to Section 7(C)(1)(n) below);
(e) an assignment and assumption of the Tenant Leases, in the
form of Exhibit J hereto (the "Assignment of Tenant Leases"), executed
by Seller, assigning the Tenant Leases to Purchaser;
(f) an assignment and assumption of the Equipment Leases, in the
form of Exhibit K hereto (the "Assignment of Equipment Leases"),
executed by Seller, assigning to Purchaser the Equipment Leases
(subject to Section 7(C)(1)(n) below);
(g) a certificate from Seller that each of the representations
and warranties contained in Section 3 hereof is true and correct as
set forth herein as of the Closing Date. Such certificate shall
contain an updated list of the Tenant Leases, Service and Supply
Contracts and Equipment Leases, which Seller shall certify to be true
and correct as of Closing.
(h) to the extent Seller, using commercially reasonable efforts,
is able to obtain them, written acknowledgments (the "Estoppel
Certificates") from the parties (other than the Seller) obligated on
the Tenant Leases (said estoppels from tenants to be in substantially
the form of Exhibit L hereto), dated as of a date not more than thirty
(30) days prior to Closing;
(i) to the extent transferable or assignable by Seller, all
licenses, permits, approvals, zoning exceptions and approvals,
consents and orders of governmental, municipal or regulatory
authorities in Seller's possession or control and relating to the
ownership, operation and use of the Project;
(j) notices to each of the tenants under the Tenant Leases,
notifying them of the sale of the Project and directing them to pay
all future rent as Purchaser may direct (the "Tenant Notices"), and
notices to the other parties under the Service and Supply Contracts
and Equipment Leases notifying them of the sale of the Project to
Purchaser;
(k) a closing statement setting forth all prorations and credits
required hereunder (the "Closing Statement"), executed by Seller;
(l) a copy of the management agreement attached hereto as Exhibit
Q (the "New Management Agreement") executed by White Lodging Services
Corporation;
(m) terminations of the Existing Management Agreement and
Existing Franchise Agreement for the Project;
(n) terminations, effective no later than Closing, of those
Service and Supply Contracts and Equipment Leases which Purchaser has
requested be terminated and which are terminable by their terms prior
to the Closing provided Purchaser pays any fees or penalties resulting
from such terminations, together with an indemnity from Seller for any
claims or liabilities arising under such terminated Service and Supply
Contracts and Equipment Leases;
(o) an affidavit from Seller that it is not a "foreign person" or
subject to
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withholding requirements under the Foreign Investment in Real Property
Tax Act of 1980, as amended;
(p) a vendor's affidavit from Seller for the benefit of the Title
Company, in a form sufficient to permit the deletion of those
so-called "standard exceptions" that may be deleted by the delivery of
a vendor's affidavit;
(q) any documents reasonably required of Seller by the Title
Company that may be provided by Seller without more than nominal cost
or expense to Seller;
(r) evidence satisfactory to Purchaser that Seller has the right
to assign to Purchaser the right to use the name of the Project
(subject in all respects to the rights of Marriott, its successors or
assigns, under the Existing Franchise Agreement);
(s) the original of all Project Agreements to the extent they are
in the possession of Seller or its agents;
(t) all keys and combinations to locks located at the Project;
(u) all soil reports, engineering studies, maintenance records,
consultant reports, plans and specifications and books and records
relating to the Project which are in the possession of Seller or its
managing agent;
(v) a complete set of all guest registration cards, guest
transcripts, guests' histories and all other guest information;
(w) a complete list of all advance room reservations and
functions in reasonable detail so as to enable Purchaser to honor
them;
(x) evidence that Seller has complied with all bulk sales laws;
(y) evidence reasonably satisfactory to Purchaser that all sales,
occupancy, use or other taxes due and payable prior to Closing in
connection with the operation of the Project have been paid; and
(z) a written opinion of counsel for Seller, addressed to
Purchaser, dated as of the Closing Date, to the effect that Seller is
duly organized and validly existing, and that this Agreement, and all
other agreements, instruments, certificates and documents herein
specifically provided to be executed by Seller have been duly
authorized, executed and delivered by Seller to the extent they
purport to be an agreement of Seller.
(2) Seller shall have received from Purchaser all of the following, in
form and substance reasonably satisfactory to Seller (it being agreed by
Seller that the documents attached hereto as exhibits are satisfactory in
form to the Seller):
(a) payment of the Purchase Price, plus or minus prorations and
credits;
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(b) a certificate from Purchaser that each of the representations
and warranties contained in Section 4 is true and correct as of the
Closing Date;
(c) a written opinion of counsel for Purchaser, addressed to
Seller, dated as of the Closing Date, to the effect that Purchaser is
duly organized and validly existing and in good standing, and that
this Agreement, and all other agreements, instruments, certificates
and documents herein specifically provided to be executed by Purchaser
have been duly authorized, executed and delivered by Purchaser to the
extent they purport to be an agreement of Purchaser; and
(d) copies of the Assignment of Service and Supply Contracts, the
Assignment of Tenant Leases, the Assignment of Equipment Leases, the
Assignment of Project Agreements, the Tenant Notices, the New
Management Agreement, the New Franchise Agreement, and the Closing
Statement, executed by Purchaser.
D. Prorations. The Purchase Price for the Property shall be subject to
prorations and credits as follows to be determined as of 12:01 A.M. on the
Closing Date, the Closing Date being a day of income and expense to Purchaser:
(1) Hotel Revenues. Except as set forth below, Seller shall be
entitled to all hotel room, food service, bar, beverage and liquor revenues
and charges and all revenues and charges from hotel room operations,
restaurant operations, hotel banquet and conference facility operations,
and other revenue of any kind attributable to the Project for the period
prior to 12:01 a.m. local time on the Closing Date. Purchaser shall be
entitled to all hotel room, food service, bar, beverage and liquor revenues
and charges and all revenues and charges from restaurant operations, hotel
banquet and conference facility operations, and all other revenue of any
kind attributable to any of the Project for the period on and after 12:01
a.m. local time on the Closing Date. Notwithstanding the foregoing,
Purchaser shall be entitled to one-half (1/2) of the revenue from hotel
rooms at the Project for the night preceding the Closing. Purchaser shall
not give Seller a credit at Closing for any accounts receivable in
connection with the Project as of Closing; but Purchaser shall use
reasonable efforts to collect such accounts receivable and shall remit them
to Seller promptly upon collection, less all reasonable out of pocket costs
of collection; provided, however, any collections shall be applied first to
the accounts specified by the payor and then to accounts due Purchaser
prior to any payments to Seller. Seller shall deliver to Purchaser or
provide Purchaser a credit against the Purchase Price for the Project in an
amount equal to all guest reservation deposits held by the hotel for hotel
guests arriving or staying after check out time for the Project on the
Closing Date, and Purchaser shall and hereby does indemnify and hold Seller
harmless with respect to any claims relating to those deposits credited to
Purchaser. The provisions of this Paragraph shall survive Closing.
(2) Rents Payable Under Tenant Leases. Any portion of any Rents
collected subsequent to the Closing Date and properly allocable to periods
prior to the Closing Date, net of Purchaser's reasonable out of pocket
costs of collection, if any, shall be paid, promptly after receipt, to the
Seller. No credit shall be given the Seller at Closing for accrued and
unpaid Rents or any other non-current sums due from tenants under the
Leases until said sums are paid, but Purchaser shall use reasonable
efforts, not including litigation, to collect the same and shall promptly
remit the same to Seller upon receipt; provided, however, any collections
shall be applied first to the accounts specified by the payor and then to
accounts due Purchaser prior to any payments to Seller. Any advance rental
payments or deposits paid by tenants prior to the Closing Date and
applicable to the period of time subsequent to the Closing Date and any
security
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deposits or other amounts paid by tenants, together with any interest on
both thereof to the extent such interest is due to tenants, shall be
credited to Purchaser on the Closing Date, and Purchaser shall and does
hereby indemnify Seller for any claims with respect to those advance rental
payments, deposits and interest credited to Purchaser. At Closing,
Purchaser and Seller shall jointly notify the tenants in the Tenant Notices
that Purchaser has received the advance rents, deposits and interest from
Seller and has assumed Seller's obligations with respect to the Leases and
the advance rents, deposits and interest, and that Seller shall have no
further liability with respect thereto. The provisions of this paragraph
shall survive the Closing.
(3) Cash. Purchaser shall give Seller a credit at Closing for all
xxxxx cash funds at the Project and all cash in any operating accounts for
the Project to the extent such xxxxx cash and operating accounts are
transferred to Purchaser at Closing. Purchaser and Seller shall make
mutually satisfactory arrangements for counting such cash and determining
the balances in the operating accounts as of 12:01 a.m. local time on the
Closing Date.
(4) Trade Payables. Trade payables shall mean (for all purposes) under
this Agreement open accounts payable to trade vendors or suppliers of the
Project's hotel, restaurant, bar or similar facilities. Seller agrees to
give Purchaser a credit at Closing for all trade payables from the Project
which have accrued prior to 12:01 a.m. local time on the Closing Date, and
Purchaser shall be obligated to pay such payables to the extent it has
received a credit from Seller at Closing and shall and hereby does
indemnify and hold Seller harmless from the same. Purchaser agrees to pay
all trade payables from the Project which have accrued from and after 12:01
a.m. local time on the Closing Date and shall and hereby does indemnify and
hold Seller harmless from payment of the same. The provisions of this
paragraph shall survive Closing.
(5) Banquet and Event Deposits. Purchaser shall receive and be
entitled to a credit against the Purchase Price for all prepaid deposits
for banquets and other functions that are scheduled to take place at the
Project on or after the Closing Date, and Purchaser shall and hereby does
indemnify and hold Seller harmless with respect to any claims relating to
those deposits which have been credited to Purchaser. The provisions of
this Paragraph shall survive Closing.
(6) Service and Supply Contracts and Equipment Leases. Any amounts
prepaid or payable under any Service and Supply Contracts or Equipment
Leases which Purchaser is to assume at Closing shall be prorated at the
Closing as of the Closing Date with Seller obligated for all such sums
payable with respect to the Project that have accrued prior to 12:01 a.m.
local time on the Closing Date and Purchaser obligated for all payable sums
accruing under such Service and Supply Contracts and Equipment Leases from
and after 12:01 a.m. local time on the Closing Date. Seller agrees to give
Purchaser a credit at Closing for all such sums for which Seller is
responsible as provided above in this Paragraph; Purchaser shall be
obligated to pay such payables to the extent it has received a credit from
Seller at Closing and shall and hereby does indemnify and hold Seller
harmless from the same. Purchaser agrees to pay all such payables from the
Project accruing under such Service and Supply Contracts and Equipment
Leases from and after 12:01 a.m. local time on the Closing Date and shall
and hereby does indemnify and hold Seller harmless from payment of the
same. Seller shall be entitled to a credit at Closing for all such amounts
that have been prepaid as are allocable to the period prior to 12:01 a.m.
local time on the Closing Date. Seller shall remain liable for all
obligations under Service and Supply Contracts and Equipment Leases which
Purchaser does not assume at Closing. The indemnities and obligations
contained or provided for in this paragraph shall survive Closing.
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(7) Sales and Excise Taxes. Seller shall be responsible for paying any
and all sales, occupancy, use, innkeepers, unemployment or other taxes due
in connection with the operation of the Project which have accrued prior to
12:01 a.m. local time on the Closing Date and shall indemnify Purchaser for
all such taxes. Purchaser shall be responsible for paying and shall and
hereby does indemnify and hold Seller harmless from any sales, occupancy,
use, innkeepers, unemployment or other taxes which accrue from and after
12:01 am local time on the Closing Date with respect to the Project. The
indemnifications and obligations set forth herein shall survive the
Closing.
(8) Real Property Taxes. Purchaser shall receive a credit at Closing
for any accrued but unpaid real estate taxes which have been assessed for
and become a lien against the Project during the calendar year in which the
Closing occurs (and to the extent unpaid, for prior years). provided,
however, that any such taxes assessed for prior calendar years but payable
during the calendar year in which the Closing occurs shall either be paid
by Seller prior to Closing or credited to Purchaser on the Closing Date. If
the amount of any such taxes have not been determined as of Closing, such
credit shall be based, in the case of the proration for the real estate
taxes assessed for 2003 (payable in 2004), on 100% of the most recent
ascertainable taxes and, in the case of the real estate taxes assessed for
2004 (payable in 2005), on 115% of the most recent ascertainable taxes; and
such taxes shall be re-prorated upon issuance of the final tax xxxx and
completion of all appeals with respect thereto. Seller shall also pay all
assessments for public improvements which are constructed before or in the
process of construction on the Closing Date and any other special
assessments which are otherwise levied or charged against the Project prior
to Closing only if and to the extent assessed for periods prior to Closing;
provided, however, that any such assessments not due and payable on the
Closing Date shall be credited to Purchaser at the Closing. Purchaser shall
have the right to assume any tax protests or appeals for the year in which
the Closing occurs, and the costs of such protests and appeals shall be
prorated between Purchaser and Seller in the same manner as the taxes
related thereto are being prorated. Seller shall execute any and all
documents and powers of attorney reasonably required to enable Purchaser to
assume any tax protests and appeals pursuant to this Agreement.
(9) Personal Property Taxes. Seller shall pay when due all personal
property taxes on the Project which have been assessed for calendar year
2003. If the Closing occurs on or after March 1, 2004, Seller shall also
pay when due all personal property taxes on the Project which are assessed
for calendar year 2004; and Purchaser shall reimburse Seller for
Purchaser's share of the personal property taxes on the Project assessed
for calendar year 2004 when such taxes are due, such reimbursement being
based on Purchaser's proportionate share of the total personal property
taxes assessed for 2004 (Purchaser's proportionate share being that number
of days during 2004 in which Purchaser owned the Project divided by 365).
If the Closing occurs prior to Xxxxx 0, 0000, Xxxxxxxxx shall pay when due
all personal property taxes on the Project which are assessed for calendar
year 2004, and Seller shall reimburse Purchaser for Seller's share of the
personal property taxes on the Project assessed for calendar year 2004 when
such taxes are due, such reimbursement being based on Seller's
proportionate share of the total personal property taxes assessed for 2004
(Seller's proportionate share being that number of days during 2004 in
which Seller owned the Project divided by 365); provided, however, in the
event the Closing occurs prior to March 1, 2004, Seller's liability for
personal property taxes assessed for calendar year 2004 shall not exceed
the liability Seller would have incurred if the value of the personal
property as shown on the personal property tax return submitted by
Purchaser for the personal property taxes assessed for calendar year 2004
equaled the value of the personal property as shown on the personal
property tax return submitted by Seller for the personal property taxes
assessed for calendar year 2002.
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(10) Utilities. Utilities and fuel, including, without limitation,
steam, water, electricity, gas and oil shall be prorated as of Closing. The
Seller shall cause the meters, if any, for utilities to be read on the day
on which the Closing Date occurs and to pay the bills rendered on the basis
of such readings. If any such meter reading for any utility is not
available, then adjustment therefor shall be made on the basis of the most
recently issued bills therefor which are based on meter readings no earlier
than thirty (30) days prior to the Closing Date; and such adjustment shall
be reprorated when the next utility bills are received.
(11) Employee Expenses. Seller has informed Purchaser that all persons
currently employed for work in or in connection with the Project and its
operation ("Employees") are employees of the Operator and not of Seller.
Purchaser shall receive a credit at Closing for any wages or benefits
accrued prior to 12:01 a.m. local time on the Closing Date which are
payable or owed to the Employees, including any accrued sick, personal and
vacation days and any unfunded or underfunded pension obligations; and
Seller shall indemnify Purchaser against any claim in connection with such
obligations to the extent not credited to Purchaser at the Closing. To the
extent credited to Purchaser at Closing, Purchaser shall and hereby does
indemnify and hold harmless Seller with respect to such obligations.
Purchaser shall be responsible for, and shall and hereby does indemnify and
hold harmless Seller with respect to, any wages or benefits or other
amounts that accrue from and after 12:01 a.m. local time on the Closing
Date with respect to those Employees working at the Project after Closing,
including without limitation any sick, personal and vacation days and any
unfunded or underfunded pension obligations. In addition, Seller shall
comply with all obligations imposed on Seller, by the Consolidated Omnibus
Budget Reconciliation Act ("COBRA") or by other applicable federal or state
laws regarding continuation coverage rights, to the extent that it is
required to do so under applicable laws. Purchaser agrees that Purchaser
shall not require that any Employees be terminated from employment at or
before Closing, and shall and hereby does indemnify and hold harmless
Seller and the Operator from any liabilities, claims, causes of action,
damages, costs or expenses relating to The Worker Adjustment and Retraining
Notification Act and any rules and regulations promulgated thereunder (the
"WARN Act") that may arise or occur as a result of the actions or omissions
of Purchaser, its affiliates, and/or their respective successor or assigns,
including without limitation any termination by Purchaser, its affiliates
and/or their respective successors or assigns of the employment of any of
the Employees after Closing; provided, however, in no event shall Purchaser
be responsible for any liabilities under the WARN Act resulting from the
acts of the Operator. The indemnities and obligations provided herein shall
survive the Closing.
(12) Project Agreements. Any reoccurring or annual charges under the
Project Agreements shall be prorated at Closing, with Seller getting a
credit for any such prepaid charges as of the Closing and Purchaser getting
a credit for any accrued charges as of the Closing.
At least five (5) days prior to Closing, Seller shall use commercially
reasonable efforts to deliver to Purchaser copies of all information and records
necessary to support the prorations hereunder. In the event any prorations made
pursuant hereto shall prove incorrect for any reason whatsoever, either party
shall be entitled to an adjustment to correct the same.
E. Expenses. Purchaser shall be responsible for all recording fees
associated with recording with the Assignment of the Project Agreements with the
office of the Recorder of Xxxxxx County, Indiana.
F. Title. At the Closing Seller shall, at Seller's expense (except for the
endorsements listed under 2 through 9 below), cause Title Company to issue to
Purchaser in form and substance reasonably acceptable to Purchaser, an ALTA
policy of title insurance or equivalent (the "Subleasehold Policy") with
Purchaser named as
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insured, dated as of the Closing Date, with a liability limit equal to the
Purchase Price, insuring that valid sub-leasehold title to the Land and fee
title to the Improvements are vested in Purchaser, subject only to the lien for
current real estate taxes and assessments not yet due and payable, the Permitted
Exceptions, Tenant Leases and Project Agreements. The Subleasehold Policy shall
include the following express affirmative coverage (either by the express terms
of the Subleasehold Policy or by title endorsements), all in form and substance
reasonably acceptable to Purchaser; provided, however, such endorsements, except
for the one listed at 1 below, shall be at Purchaser's expense:
(1) protection against (i) liens for labor, services or materials
whether or not of record; (ii) parties in possession (other than tenants
under Tenant Leases, as such tenants only); (iii) unrecorded easements;
(iv) taxes or special assessments not shown by the public records; and (v)
exceptions which a correct survey would disclose;
(2) a long form (3.1) zoning endorsement including insurance that the
Project is in compliance with all zoning requirements relating to parking
and loading docks;
(3) if the legal description for the Land contains more than one
parcel, a contiguity endorsement for each of the parcels which comprise the
Land insuring that such parcels are contiguous parcels of real estate;
(4) coverage insuring that the Project has access, that the Project
abuts on physically open streets and that the property insured in the
Owner's Policy is the same as that shown on the Survey (defined below);
(5) the owner's equivalent of a so called Comprehensive Endorsement
No. 1, insuring that there are no encroachments over property lines or
easements and that there are no violations of any covenants, conditions or
restrictions of record;
(6) a endorsement insuring that the Project includes only the tax
parcel numbers listed on the Owner's Policy and that none of such numbers
covers property other than the Project;
(7) an endorsement insuring that all utilities serving the Project
come through publicly dedicated streets or valid, perpetual easements;
(8) an endorsement insuring over all survey exceptions; and
(9) an endorsement that the Project complies with all subdivision
laws.
Seller may, at its option, or shall, to the extent required in Section 6(A)
above, deliver to the Title Company any indemnities of the Seller or other
appropriate parties relating to the issuance of the Subleasehold Policy for
purposes of causing the Title Company to insure over, in form reasonably
satisfactory to Purchaser, any exceptions reflected on the Title Commitment to
which Purchaser has timely objected as provided in Section 6(A) above.
G. Guest Property. The parties shall arrange for hotel guests to sign new
deposit box or other appropriate receipts on the day before the Closing Date
with respect to baggage, personal property, laundry, valet packages and other
property of hotel guests checked or left in the care of Seller by transient
hotel guests or tenants; and, to the extent such receipts are not obtained, such
property shall be sealed, listed in an inventory prepared and
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signed jointly by the parties as of the Closing Date, and Purchaser shall be
responsible from and after the Closing Date for all such property listed in said
inventory and shall and hereby does indemnify and hold Seller harmless with
respect thereto. Seller shall be responsible for all items allegedly left at the
Project by guests prior to Closing and not listed on said inventory and shall
and hereby does indemnify and hold Purchaser harmless with respect thereto. The
obligations of the parties under this paragraph shall survive Closing.
SECTION 8. INDEMNIFICATION.
A. In addition to any other obligations of Seller to indemnify and hold
harmless Purchaser as expressly stated in other provisions of this Agreement,
Seller shall hold harmless, indemnify and defend the Purchaser and Project from
and against: (i) any and all obligations, liabilities, losses, liens or
encumbrances arising out of claims by third parties, whether direct, contingent
or consequential and no matter how arising, in any way related to or arising
from the Project to the extent accruing or arising out of events occurring prior
to the Closing Date, including, but not limited to, (a) any damage to property
or injury to or death of any person occurring prior to the Closing Date, (b)
claims by guests at the Project arising out of events occurring prior to
Closing, (c) obligations to pay any taxes, in connection with the operation of
the Project prior to 12:01 a.m. local time on the Closing Date, and (d)
liabilities or obligations with respect to employees at the Project accruing
prior to Closing except to the extent Purchaser received a credit therefor at
Closing; (ii) any loss or damage to Purchaser resulting from any inaccuracy in
or breach of any representation or warranty of Seller under this Agreement
subject to the limitations set forth in Section 14 below, or resulting from any
breach or default by Seller (other than a default by Seller in its obligation to
close the purchase and sale transaction) under this Agreement; (iii) any claims
for brokerage commissions or fees in connection with the leases of the Project
executed prior to the Closing (but only to the extent the obligation for such
commissions or fees was entered into by Seller or its predecessors) except to
the extent Seller gives Purchaser a credit for such commissions at Closing; (iv)
any obligations existing prior to the Closing Date for tenant alterations,
improvements and punchlist items in connection with the Project arising out of
Tenant Leases for the Project executed prior to Closing except to the extent
Purchaser receives a credit therefor at Closing; (v) any wages, salaries,
pension liabilities or fringe benefits accruing prior to 12:01 am local time on
the Closing Date for those employees of Operator at the Project except to the
extent Purchaser received a credit therefor at Closing; (vi) any liabilities or
obligations accruing or arising out of events occurring prior to the Closing
under the Tenant Leases, Service and Supply Contracts, Equipment Leases and
Project Agreements, and (vii) all costs and expenses of Purchaser, including
reasonable attorneys' fees, related to any actual or threatened actions, suits
or judgments incident to any of the foregoing, whether or not any such action or
suit is ever filed or such judgment is ever rendered ("Seller's Indemnification
Obligations"). However, to the extent any of the items listed in (i) through
(vii) above are also identified, in a more specific manner, as Seller's
indemnification obligations in other provisions of this Agreement, those other
provisions of this Agreement shall control over this Section 8(A).
B. In addition to any other obligations of Purchaser to indemnify and hold
harmless Seller as expressly stated in other provisions of this Agreement,
Purchaser shall hold harmless, indemnify and defend Seller from and against: (i)
any and all obligations, liabilities, losses, liens or encumbrances arising out
of claims by third parties, whether direct, contingent or consequential and no
matter how arising, in any way related to or arising from the Project to the
extent accruing or arising out of events occurring from and after the Closing
Date, including, but not limited to, (a) any damage to property or injury to or
death of any person occurring from and after the Closing Date, (b) claims by
guests at the Project arising out of events occurring from and after the
Closing, (c) obligations to pay any taxes in connection with the operation of
the Project from and after 12:01 am on the Closing Date, and (d) liabilities or
obligations with respect to employees at the Project accruing from and after the
Closing; (ii) any loss or damage to Seller resulting from any inaccuracy in or
breach of any representation or warranty of Purchaser under this Agreement or
resulting from any breach or default by Purchaser (other than a
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default by Purchaser in its obligation to close the purchase and sale
transaction) under this Agreement; (iii) any claims for brokerage commissions or
fees in connection with leases of the Project executed after the Closing (and
any claims for brokerage commissions or fees in connection with leases of the
Project executed prior to the Closing Date to the extent those commissions or
fees relate to any amendments to or modifications of, extensions or expansions
of, or other agreements made with respect to, those leases from and after the
Closing provided the obligation for such commissions or fees are set forth on
Exhibit E attached hereto); (iv) any obligations existing from and after the
Closing Date for tenant alterations, improvements and punchlist items in
connection with the Project arising out of tenant leases for the Project
executed after the Closing or with respect to any lease amendments or
modifications executed after Closing; (v) any wages, salaries, pension
liabilities or fringe benefits accruing from and after 12:01 am local time on
the Closing Date for those employees of Operator (or of Purchaser or any other
person or entity) who continue to work at the Project after the Closing; (vi)
any matters for which Purchaser received a credit from Seller at Closing; and
(vii) all costs and expenses of Seller, including reasonable attorneys' fees,
related to any actual or threatened actions, suits or judgments incident to any
of the foregoing, whether or not any such action or suit is ever filed or such
judgment is ever rendered.
SECTION 9. WAIVER. Each party hereto may, at any time or times, at its
election, waive any of the conditions to its obligations hereunder by a written
waiver expressly detailing the extent of such waiver (and no other waiver or
alleged waiver by such party shall be effective for any purpose). No such waiver
shall reduce the rights or remedies of such party by reason of any breach by the
other party or parties of any of its or their obligations hereunder.
SECTION 10. BROKERS. Seller shall be responsible for payment of all
brokerage commissions or finders' fees due and payable to Xxxxxx Xxxx Xxxxxxx,
Inc. (the "Broker") in connection with the transactions contemplated by this
Agreement. Each party represents and warrants to the other party that, insofar
as it knows, no broker or other person, other than the Broker, is entitled to
any commission or fee in connection with the transactions contemplated by this
Agreement. Each party shall indemnify and hold harmless the other party against
any loss, liability, damage or claim incurred by reason of any commission or fee
alleged to be payable to anyone, other than the Broker, because of any act,
omission or statement of the indemnifying party. Such indemnity obligation shall
be deemed to include payment of reasonable attorneys' fees and court costs
incurred in defending any such claim and shall survive the Closing or any
termination of this Agreement.
SECTION 11. ALCOHOLIC BEVERAGE PERMIT. If Purchaser is unable to obtain an
alcoholic beverage permit in its own name, with respect to the Project, prior to
Closing, Purchaser and Seller agree that, if it is lawful for Purchaser to
continue, from and after the Closing, to continue to serve alcoholic beverages
at the Project pursuant to Seller's existing alcoholic beverage permit with
respect to the Project, Purchaser shall not have the right to terminate this
Agreement for failure to obtain an alcoholic beverage permit with respect to the
Project except as set forth in Section 6(N) above. In that circumstance,
Purchaser and Seller shall cooperate with one another to execute and deliver and
file with the applicable governmental authorities (if necessary or appropriate)
such certificates, agreements and other documents as may be necessary or
appropriate to permit Purchaser, from and after Closing, to continue to serve
alcoholic beverages at the Project pursuant to Seller's existing alcoholic
beverage permit until such time as Purchaser shall have been able to obtain an
alcoholic beverage permit under its own name for the Project, and Purchaser
shall, from and after the Closing, at Purchaser's sole cost and expense, use
best efforts to obtain an alcoholic beverage permit under its own name for the
Project. Purchaser shall indemnify, defend and hold harmless Seller from and
against any and all liabilities, claims or proceedings (including without
limitation claims or proceedings by governmental authorities regarding actual or
possible violations of law), causes of action, penalties, enforcement actions,
damages, losses and/or expenses suffered or incurred by Seller with respect to,
arising out of or caused by the sale by Purchaser or its affiliates or their
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successors or assigns of alcoholic beverages at the Project pursuant to Seller's
alcoholic beverage permit. The obligations of the parties in this Section shall
survive the Closing.
SECTION 12. SURVIVAL; FURTHER INSTRUMENTS. All warranties, representations,
covenants, obligations and agreements contained in or made pursuant to this
Agreement shall survive the Closing hereunder and the transfers and conveyances
and other transactions hereunder or contemplated hereby and any and all
performances hereunder, except as expressly otherwise provided in this
Agreement. Each party will, whenever and as often as it shall be requested so to
do by the other, cause to be executed, acknowledged or delivered any and all
such further instruments and documents as may be necessary or proper, in the
reasonable opinion of the requesting party, in order to carry out the intent and
purpose of this Agreement and as is consistent with this Agreement.
SECTION 13. NO THIRD PARTY BENEFITS. This Agreement is made for the sole
benefit of Purchaser and Seller and their respective successors and assigns
(subject to the limitation on assignment set forth in Section 15 below), and no
other person or persons shall have any right or remedy or other legal interest
of any kind under or by reason of this Agreement. Whether or not either party
hereto elects to employ any or all the rights, powers or remedies available to
it hereunder, such party shall have no obligation or liability of any kind to
any third party by reason of this Agreement or by reason of any of such party's
actions or omissions pursuant hereto or otherwise in connection with this
Agreement or the transactions contemplated hereby.
SECTION 14. REMEDIES. If Seller shall default in its obligations hereunder
prior to the Closing, Purchaser shall be entitled, as its sole and exclusive
remedies under this Agreement, to (a) xxx for specific performance of this
Agreement, or (b) terminate this Agreement and recover its reasonable
out-of-pocket expenses from Seller up to a maximum amount of $100,000, Purchaser
hereby waiving all other claims and remedies with respect thereto. Further,
Seller's liability under this Agreement after Closing for breaches of the
representations and warranties set forth in Section 3 above shall (a) not
exceed, in the aggregate, the Holdback (defined below), and (b) terminate one
(1) year after the Closing Date (except with respect to valid claims made by
Purchaser with respect thereto prior to the one year anniversary of the Closing
Date). If Purchaser shall default in its obligations hereunder to Close the
transaction, Seller's sole and exclusive remedy shall be to collect the Xxxxxxx
Money as liquidated damages, Seller hereby waiving all other claims and remedies
with respect thereto.
SECTION 15. MISCELLANEOUS. This Agreement (including all Exhibits hereto)
contains the entire agreement between the parties respecting the matters herein
set forth and supersedes all prior agreements between the parties hereto
respecting such matters. If any of the Exhibits are not attached hereto when
this Agreement is executed, Seller shall have five (5) business days after the
execution of this Agreement in which to submit such Exhibits to Purchaser for
its approval and attachment to this Agreement. The table of contents and section
headings shall not be used in construing this Agreement. Except as otherwise
provided above, no remedy conferred upon a party in this Agreement is intended
to be exclusive of any other remedy herein or by law provided or permitted, but
each shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. Except
as herein expressly provided, no waiver by a party of any breach of this
Agreement or of any warranty or representation hereunder by the other party
shall be deemed to be a waiver of any other breach by such other party (whether
preceding or succeeding and whether or not of the same or similar nature) and no
acceptance of payment or performance by a party after any breach by the other
party shall be deemed to be a waiver of any breach of this Agreement or of any
representation or warranty hereunder by such other party whether or not the
first party knows of such breach at the time it accepts such payment or
performance. No failure or delay by a party to exercise any right it may have by
reason of the default of the other party shall operate as a waiver of default or
modification of this Agreement or shall prevent the exercise of any right by the
first party while the other party continues to be so in default. This Agreement
shall be construed and enforced in accordance with the laws of the state where
the Project is located. Purchaser may assign its rights
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under this Agreement without the prior written consent of Seller (in which event
the transferee shall assume in writing all of the transferor's obligations
hereunder), but with written notice to Seller; provided, however, that no such
assignment by Purchaser shall relieve Purchaser of its obligations hereunder.
Subject to the preceding sentence, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns. The provisions of this Agreement may not be amended, changed or
modified orally, but only by an agreement in writing signed by the party against
whom any amendment, change or modification is sought.
SECTION 16. NOTICES. All notices and other communications which either
party is required or desires to send to the other shall be in writing and shall
be sent by messenger, facsimile, reputable overnight courier or registered or
certified mail, postage prepaid, return receipt requested. Notices and other
communications shall be deemed to have been given on the date of actual receipt.
If a notice is sent by facsimile, a copy of the notice shall be sent by one of
the other methods specified above. Notices shall be addressed as follows:
To Seller:
Convention Hotel Partners, LLC
0000 Xxxx 00xx Xxxxx, Xxxxx 000 Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
Facsimile No. 000-000-0000
with copy to:
Xxxxx Xxx Xxxxxx
0000 Xxxx 00xx Xxxxx, Xxxxx 000 Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile No. 000-000-0000
To Purchaser:
c/o LaSalle Hotel Properties
0000 Xxxxxxxxxx Xxxx, Xxxxx X00
Xxxxxxxx, Xxxxxxxx 00000
Attention: Chief Operating Officer
Facsimile No. (000) 000-0000
with a copy to:
Xxxxx & Associates
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: X. X. Xxxxx
Facsimile No. (000) 000-0000
or to such other person and/or address as shall be specified by either party in
a notice given to the other pursuant to the provisions of this Paragraph.
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SECTION 17. ATTORNEYS' FEES. In the event either party institutes legal
proceedings to enforce its rights hereunder, the prevailing party in such
litigation shall be paid all reasonable expenses of the litigation by the losing
party, including its reasonable attorneys' fees.
SECTION 18. CONFIDENTIALITY. Except for any disclosures required by law or
the Securities and Exchange Commission, including, without limitation,
Regulation FD, Seller and Purchaser agree to keep this Agreement and all
information delivered pursuant hereto confidential and not disclose or make any
public announcements with respect to the subject matter and/or terms and
conditions of this Agreement without the prior written consent of the other
party. Without limiting the foregoing, Purchaser agrees that it shall not
disclose, and shall keep confidential, any and all financial information,
reports, analyses, studies, surveys, assessments, and other materials and
information furnished by Seller or Operator or obtained by Purchaser with
respect to Seller and/or the Project (the "Seller's Information"). However,
either party may make disclosures to the Operator, governmental agencies and
authorities, Marriott, and its advisors, lenders and investors to the extent
reasonably necessary to consummate the transactions set forth herein. If this
Agreement is terminated for any reason, Purchaser shall promptly return to
Seller any and all Seller's Information and shall destroy all notes, summaries,
analyses, and other materials containing the same, in whatever form or format.
The obligations of the parties under this Section, including without limitation
Purchaser's obligations of confidentiality with respect to the Seller's
Information, shall survive any termination of this Agreement. Notwithstanding
the foregoing, there are no restrictions on any disclosure of the tax structure
or tax treatment of the Agreement; and no Party claims any proprietary rights to
any tax matter or idea
SECTION 19. AUDIT. Seller will prior to Closing provide Purchaser with (a)
audited financial statements for the Project for the that portion of calendar
year 2001 from and after the date that operations at the Project commenced and
for calendar years 2002 and 2003, prepared by an accounting firm which has been
approved by the Securities and Exchange Commission (the "SEC"), and (b) with
respect to calendar year 2004, provide to KPMG Peat Marwick LLP ("KPMG") a
letter substantially in the form of Exhibit R attached hereto and make available
to Purchaser all financial information for the three most recent fiscal years of
the Project for the purpose of an audit to be performed by KPMG in accordance
with Rule 3.05 of Regulation S-X of the SEC Rules and Regulations provided
Purchaser keeps such information confidential except to the extent otherwise
required by law or required by Purchaser's status as a public company. Such
financial information will be made available to Purchaser and KPMG in a location
mutually agreeable to Purchaser and Seller and will include, but will not be
limited to, general ledgers, city ledgers, guest ledgers, audited financial
statements and management letters, policies and procedures manuals, room
contracts, labor contracts, loan agreements, compensation arrangements and any
other agreements, invoices for all expenditures made, sales and marketing plans,
fixed assets registers, budgets and variance explanations, personnel files,
payroll registers, bank statements, bank account reconciliations, check
registers (including the period following the most recent fiscal year) and
descriptions of benefit plans, related party transactions, insurance coverage,
litigation, vacation accruals and taxes paid.
SECTION 20. HOLDBACK. Seller shall retain a liquid net worth of at least
Three Million and NO/100 Dollars ($3,000,000.00) (the "Holdback") for the period
commencing on the Closing and, subject to the following sentence, ending on the
one year anniversary of the Closing Date, which liquid net worth can be used to
satisfy Seller's obligations hereunder, if any, after the Closing; and, if
Purchaser makes a valid claim for breach of Seller's obligations hereunder
during such period, Seller shall continue to maintain a liquid net worth at
least equal to such claim, up to the maximum amount of the Holdback, until such
claim has been finally resolved; provided, however, assuming no claim has been
made by Purchaser hereunder prior to the sixth month anniversary of the Closing
Date, Seller may reduce the Holdback to Two Million and No/100 Dollars
($2,000,000) on the sixth month anniversary of the Closing Date. After the one
year anniversary of the Closing Date, Seller shall continue
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to maintain the Holdback in an amount reasonably estimated by Seller and
Purchaser to equal Seller's liability under this Agreement for personal property
taxes until such taxes which are Seller's liability hereunder have been paid in
full by Seller.
SECTION 21. LIKE-KIND EXCHANGE. Purchaser agrees to reasonably cooperate
with Seller in effecting an exchange transaction by Seller which includes the
Project pursuant to Section 1031 of the United States Internal Revenue Code,
provided that: (i) Seller shall reimburse Purchaser for any costs or expenses
incurred by Purchaser in connection with such cooperation (including without
limitation reasonable attorneys' fees), (ii) Purchaser shall be exposed to no
liability as a result of such cooperation, (iii) Seller shall indemnify
Purchaser and its members, managers, partners, investors, principals and agents
and from any liability, damage, cost or expense (including reasonably attorneys'
fees) relating to or arising out of such tax-free exchange (which
indemnification obligation shall survive the Closing), and (iv) such exchange
shall not delay the Closing or require Purchaser to take title to any property
except for the Project.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
"SELLER"
Convention Hotel Partners, LLC, an
Indiana limited liability
company
By: Convention Hotel Partners, Inc., an
Indiana corporation, its manager
By: /s/ XXXXXXXX X. XXXXXXX
------------------------------------
Printed Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
"PURCHASER"
LaSalle Hotel Operating Partnership,
L.L.,
a Delaware limited partnership
By: LaSalle Hotel Properties, its
general partner
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------------
Title: Authorized Signatory
Printed Name: Xxxxxxx X. Xxxxxxxx
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