Actions and Operations Pending Closing. Seller agrees that at all times prior to the Closing Date: (a) Subject to conditions beyond Seller’s reasonable control, the Hotel will continue to be operated and maintained in the ordinary course of business substantially consistent with Present Standards including, without limitation (i) maintaining the inventories of FF&E, Operating Equipment and Consumables at the Property at levels substantially consistent with Present Standards, (ii) maintaining all Fixtures and Tangible Personal Property in the same condition as it existed as of the Effective Date (reasonable wear, tear and loss excepted) and not trading, substituting or removing any Personal Property from the Hotel, except Consumables and Inventory substantially consistent with Present Standards, (iii) performing routine maintenance and repairs for the Property substantially consistent with Present Standards, (iv) renewing all material Licenses and Permits prior to their expiration, (v) maintaining all insurance policies, (vi) not making any material alterations or improvements at the Property (other than those items covered by the Renovation Work), or demolishing any of the Property subject to Section 11.1, (vii) not selling, transferring or otherwise disposing of any of the Property, other than substantially consistent with Present Standards and (viii) not removing any Property from the Hotel, other than consistent with Present Standards or as required in connection with the work covered by the Renovation Work. (b) Seller shall be responsible for the payment in full and completion of the Renovation Work, and the release of any and all mechanic’s liens related thereto. Seller shall use commercially reasonable and diligent efforts to complete the Renovation Work in a good and workmanlike manner, in compliance with all applicable Legal Requirements, in compliance with the plans and specifications reviewed by Purchaser, and as soon as reasonably possible following Closing at Seller’s sole cost and expense; provided that Seller shall endeavor to complete the Renovation Work no later than March 31, 2016 (provided that Seller shall have until July 1, 2016 to finalize and receive any lien waivers or related close-out payments with respect to the Renovation Work). In connection with the Renovation Work, Seller shall promptly bond over or remove any and all monetary liens arising in connection thereto. In addition, Seller shall cause each contractor involved in the Renovation Work to list Purchaser and Dallas Hotel Operator, Inc. as additional insureds on any insurance required pursuant to each agreement with a contractor relating to the Renovation Work. Furthermore, Seller agrees to pursue in good faith all remedies of any nature against each contractor with respect to any matter arising from, in connection with or related to the Renovation Work. Upon completion of the Renovation Work, Seller shall provide Purchaser (y) reasonable evidence that the Renovation Work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto and (z) provide Purchaser any applicable sign-offs from Franchisor. Purchaser hereby grants a license to Seller or its agents to enter upon the Property from and after the Closing to complete the Renovation Work, provided, that all such Renovation Work shall be done in a manner to avoid any commercially unreasonable material disruption to the operation of the Hotel and in accordance with rules established by Purchaser from time to time; provided, further, that Seller shall provide Purchaser with prior written notice of any material disruption to the operation of the Hotel such that Purchaser can work with Seller to minimize such disruption. In connection with the Seller’s obligations under this Section 10.1(b), Seller shall establish at Closing an escrow holdback reserve pursuant to an escrow agreement by and among Seller, Purchaser and Purchaser’s lender (“Lender”), in an amount equal to the anticipated cost to complete the Renovation Work (as agreed upon by Purchaser and Seller in their respective good faith discretion) (the “Anticipated Completion Cost”), plus a contingency amount equal to fifteen percent (15%) of the Anticipated Completion Cost (collectively, the “Renovation Reserve Funds”). The Renovation Reserve Funds shall be held back from the Purchase Price payable to Seller at Closing and shall be deposited with Lender at Closing. In the event that after the Closing Seller fails to complete the Renovation Work in the manner required under this Section 10.1(b) and such failure continues for a period of thirty (30) days following written notice from Purchaser with respect thereto (and is not the result of any force majeure event of which Seller has provided Purchaser with written notice within a reasonable period of time after the onset thereof), then, upon written notice to Seller and Lender, Purchaser shall have the right (but not the obligation) to complete the Renovation Work itself (whether directly or through a third-party) and if Purchaser so elects, Seller shall assign any and all applicable contracts to Purchaser (or its designee) and Purchaser shall use funds from the Renovation Reserve Funds to complete the Renovation Work. The Renovation Reserve Funds shall be released in accordance with the terms of the escrow agreement, which the parties shall negotiate in good faith prior to the Closing Date; provided, however, the conditions of such release shall be limited to Seller’s delivery of (i) reasonable evidence that the parties performing such Renovation Work shall have no liens or claims of liens upon payment, (ii) invoices or other satisfactory evidence of the costs incurred and (iii) such other reasonable requirements of Lender, as agreed upon by Seller in its reasonable discretion. In the event the Renovation Reserve Funds are insufficient to complete the Renovation Work, Seller shall immediately pay directly to the applicable contractor or reimburse Purchaser for any and all costs and expenses actually incurred by Purchaser in excess of the Renovation Reserve Funds; provided, however, Seller shall not cover any increased cost of the Renovation Work resulting from any changes in scope or other modifications to the Renovation Work approved or implemented by Purchaser that are not contemplated by the original contracts and subcontracts for such Renovation Work. In the event any Renovation Reserve Funds remain after (x) Purchaser’s receipt of reasonable evidence that the Renovation Work has been completed and paid for, (y) unconditional lien waivers have been delivered to Purchaser and (z) Seller has provided Purchaser any applicable sign-offs from Franchisor and satisfied such other reasonable requirements of Lender, Lender shall disburse such funds to Seller. Notwithstanding anything herein to the contrary, if Lender has not disbursed any required portion of the Renovation Reserve Fund (either interim draws or the balance of the funds after the Renovation Work has been completed) after the applicable requirements set forth in this Section 10.1 have been met (other than requirements not relating to the Renovation Work that can only be met by Purchaser as borrower), within thirty (30) days after receipt of a valid request from Seller, Seller may request such funds from Purchaser. After such request, and provided Lender has not made a disbursement to Seller, Purchaser shall pay to Seller the amount of such funds and Purchaser shall be entitled to reimbursement therefor from the Renovation Reserve Funds. Notwithstanding anything to the contrary set forth in this Agreement, Seller’s obligations under this Section 10.1(b) shall in no way be limited or reduced by Section 5.3 (i.e., the Cap, Deductible and/or Survival Periods shall not apply). The terms of this Section 10.1(b) shall survive the Closing. (c) From and after the end of the Inspection Period, Seller shall not enter into any new Hotel Contract or Space Lease, or cancel, modify or renew any existing Hotel Contract or Space Lease that is not cancelable upon thirty (30) or less days’ notice and without payment of any penalty or termination fee, without the prior written consent of Purchaser, in its sole and good faith discretion; provided, however, that Purchaser’s prior consent shall not be required for Seller to enter into Hotel Contracts with third parties as required to complete the Renovation Work so long as the same are upon commercially reasonable and arm’s length terms and conditions. If Purchaser fails to respond to a request for consent within three (3) Business Days after receipt of such request, such consent shall be deemed given. (d) Seller shall have the right and obligation, without notice to or consent of Purchaser, to make Bookings in the ordinary course of business and consistent with the Present Standard, including customary discounted rates. (e) Seller shall use commercially reasonable efforts to preserve in force all existing Permits and to cause all those expiring on or before the Closing Date to be renewed prior to the Closing Date. If any such Permit shall be suspended or revoked, Seller shall promptly notify Purchaser and shall take commercially reasonable measures to cause the reinstatement of such Permit. Seller shall join in all applications for and cooperate with Purchaser in obtaining all necessary consents, permits, approvals, and licenses, and otherwise cooperate with Purchaser as may be reasonably necessary to facilitate the transfer of the Property to Purchaser; provided, however, that any costs, expenses or fees paid or incurred by Seller in connection therewith shall be reimbursed and credited to Seller. (f) From and after the expiration of the Inspection Period through the Closing Date, Purchaser shall have the right to consult with Seller and Manager with respect to the hiring, initially and with respect to any replacement, of the following Hotel staff positions: (i) general manager; (ii) director of human resources; (iii) director of food and beverage; (iv) chief engineer; (v) director of marketing; and (vi) comptroller/chief financial officer. (g) Seller shall maintain in effect all policies of casualty and liability insurance, or similar policies of insurance, with the same limits of coverage which it now carries with respect to the Hotel. (h) Seller shall not cause or permit any Fixtures and Tangible Personal Property or Operating Equipment located, installed or used in the Hotel as of the Effective Date (except Excluded Assets, if applicable) to be sold, exchanged, assigned, conveyed, leased, disposed of or removed, other than in the ordinary course of business conducted in accordance with the Present Standards or as contemplated by the Renovation Work. (i) Seller shall provide (and shall instruct Manager to provide) copies of any written notices (i) received by Seller after the Effective Date from any governmental or quasi-governmental organizations regarding any violations of Legal Requirements, or (ii) given or received by Seller (or on behalf of Seller) after the Effective Date alleging material defaults under any material Hotel Contracts, Space Leases or Equipment Leases. (j) Subject to Article IV and prior to the Closing, neither Purchaser nor any of Purchaser’s representatives shall communicate concerning the Property with Manager, any tenant, employee, guest or occupant of the Real Property any governmental or quasi-governmental authority, agency, commission, board or regulatory body or any party to any Hotel Contract without the prior written approval of Seller, which approval shall not be unreasonably withheld, conditioned or delayed. (k) Between the Effective Date and the Closing Date or earlier termination of this Agreement, neither Seller, Manager, nor any of their respective Affiliates nor any of their respective members, partners, or agents (including, without limitation, any broker) shall offer, solicit or negotiate the possible direct or indirect acquisition of the Property (or any other form of transaction having a similar effect) or make any information about the Property available (for purpose of sale or refinance) to any Person other than Purchaser, its Affiliates and their respective designees, agents and/or authorized third parties. Seller agrees to direct its broker, if any, to cease the marketing of the Property. Such restrictions shall be in effect until the earlier of (i) the Closing Date, or (ii) the termination of this Agreement by either party pursuant to the terms and conditions hereof; and thereafter shall be null and void and of no further force or effect. (l) Seller shall use commercially reasonable efforts to deliver to Purchaser prior to the Closing each of the Certificates of No Tax Due with respect to the Property and a tax certificate from the Dallas County Tax Assessor-Collector’s office pursuant to Texas Tax Code section 31.08 with respect to the Property. (m) No later than five (5) days after the Effective Date, Seller shall send to Residences HOA and Condominium Owner the form of ORE Agreement Estoppel and Seller shall use commercially reasonable efforts (without any obligation to incur any expenses (other than attorneys’ fees)) to obtain the ORE Agreement Estoppels from the Residences HOA and Condominium Owner prior to Closing. (n) From and after the Effective Date and continuing until completion, Seller shall use commercially reasonable and diligent efforts to complete at its sole cost and expense (i) an upgrade of the Hotel’s POS system and (ii) implementation of a chip & pin POS system at the Hotel, each in accordance with the Hotel’s 2015 Capital Improvement Plan. Such work shall be completed in a good and workmanlike manner, in compliance with all applicable Legal Requirements and as soon as reasonably possible. Upon completion of such work, Seller shall provide Purchaser reasonable evidence that such work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto. The terms of this Section 10.1(n) shall survive the Closing.
Appears in 2 contracts
Sources: Agreement for Sale and Purchase of Hotel, Agreement for Sale and Purchase of Hotel (Carey Watermark Investors Inc)
Actions and Operations Pending Closing. Seller agrees that at all times prior to the Closing Date:
(a) Subject to conditions beyond Seller’s reasonable control, Seller shall use commercially reasonable efforts to cause Manager to continue to operate, maintain and manage the Hotel will continue to be operated and maintained in the ordinary course of business substantially consistent with Present Standards including, without limitation (i) maintaining the inventories of FF&E, Operating Equipment and Consumables at the Property at levels substantially consistent with Present Standards, (ii) maintaining all Fixtures and Tangible Personal Property in the same condition as it existed as of manner in which the Effective Date (reasonable wearHotel was operated, tear maintained, and loss excepted) and not trading, substituting or removing any Personal Property from the Hotel, except Consumables and Inventory substantially consistent with Present Standards, (iii) performing routine maintenance and repairs for the Property substantially consistent with Present Standards, (iv) renewing all material Licenses and Permits managed immediately prior to their expiration, (v) maintaining all insurance policies, (vi) not making any material alterations or improvements at the Property (other than those items covered by the Renovation Work), or demolishing any execution of the Property subject to Section 11.1, (vii) not selling, transferring or otherwise disposing of any of the Property, other than substantially consistent with Present Standards and (viii) not removing any Property from the Hotel, other than consistent with Present Standards or as required in connection with the work covered by the Renovation Workthis Agreement.
(b) Seller shall be responsible for the payment in full and completion of the Renovation Work, and the release of any and all mechanic’s liens related thereto. Seller shall use commercially reasonable and diligent efforts to complete the Renovation Work in a good and workmanlike manner, in compliance with all applicable Legal Requirements, in compliance with the plans and specifications reviewed by Purchaser, and as soon as reasonably possible following Closing at Seller’s sole cost and expense; provided that Seller shall endeavor to complete the Renovation Work no later than March 31, 2016 (provided that Seller shall have until July 1, 2016 to finalize and receive any lien waivers or related close-out payments with respect to the Renovation Work). In connection with the Renovation Work, Seller shall promptly bond over or remove any and all monetary liens arising in connection thereto. In addition, Seller shall cause each contractor involved in the Renovation Work to list Purchaser and Dallas Hotel Operator, Inc. as additional insureds on any insurance required pursuant to each agreement with a contractor relating to the Renovation Work. Furthermore, Seller agrees to pursue in good faith all remedies of any nature against each contractor with respect to any matter arising from, in connection with or related to the Renovation Work. Upon completion of the Renovation Work, Seller shall provide Purchaser (y) reasonable evidence that the Renovation Work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto and (z) provide Purchaser any applicable sign-offs from Franchisor. Purchaser hereby grants a license to Seller or its agents to enter upon the Property from and after the Closing to complete the Renovation Work, provided, that all such Renovation Work shall be done in a manner to avoid any commercially unreasonable material disruption to the operation of the Hotel and in accordance with rules established by Purchaser from time to time; provided, further, that Seller shall provide Purchaser with prior written notice of any material disruption to the operation of the Hotel such that Purchaser can work with Seller to minimize such disruption. In connection with the Seller’s obligations under this Section 10.1(b), Seller shall establish at Closing an escrow holdback reserve pursuant to an escrow agreement by and among Seller, Purchaser and Purchaser’s lender (“Lender”), in an amount equal to the anticipated cost to complete the Renovation Work (as agreed upon by Purchaser and Seller in their respective good faith discretion) (the “Anticipated Completion Cost”), plus a contingency amount equal to fifteen percent (15%) of the Anticipated Completion Cost (collectively, the “Renovation Reserve Funds”). The Renovation Reserve Funds shall be held back from the Purchase Price payable to Seller at Closing and shall be deposited with Lender at Closing. In the event that after the Closing Seller fails to complete the Renovation Work in the manner required under this Section 10.1(b) and such failure continues for a period of thirty (30) days following written notice from Purchaser with respect thereto (and is will not the result of any force majeure event of which Seller has provided Purchaser with written notice within a reasonable period of time after the onset thereof), then, upon written notice to Seller and Lender, Purchaser shall have the right (but not the obligation) to complete the Renovation Work itself (whether directly or through a third-party) and if Purchaser so elects, Seller shall assign any and all applicable contracts to Purchaser (or its designee) and Purchaser shall use funds from the Renovation Reserve Funds to complete the Renovation Work. The Renovation Reserve Funds shall be released in accordance with the terms of the escrow agreement, which the parties shall negotiate in good faith prior to the Closing Date; provided, however, the conditions of such release shall be limited to Seller’s delivery of (i) reasonable evidence that the parties performing such Renovation Work shall have no liens or claims of liens upon payment, (ii) invoices or other satisfactory evidence of the costs incurred and (iii) such other reasonable requirements of Lender, as agreed upon by Seller in its reasonable discretion. In the event the Renovation Reserve Funds are insufficient to complete the Renovation Work, Seller shall immediately pay directly to the applicable contractor or reimburse Purchaser for any and all costs and expenses actually incurred by Purchaser in excess of the Renovation Reserve Funds; provided, however, Seller shall not cover any increased cost of the Renovation Work resulting from any changes in scope or other modifications to the Renovation Work approved or implemented by Purchaser that are not contemplated by the original contracts and subcontracts for such Renovation Work. In the event any Renovation Reserve Funds remain after (x) Purchaser’s receipt of reasonable evidence that the Renovation Work has been completed and paid for, (y) unconditional lien waivers have been delivered to Purchaser and (z) Seller has provided Purchaser any applicable sign-offs from Franchisor and satisfied such other reasonable requirements of Lender, Lender shall disburse such funds to Seller. Notwithstanding anything herein to the contrary, if Lender has not disbursed any required portion of the Renovation Reserve Fund (either interim draws or the balance of the funds after the Renovation Work has been completed) after the applicable requirements set forth in this Section 10.1 have been met (other than requirements not relating to the Renovation Work that can only be met by Purchaser as borrower), within thirty (30) days after receipt of a valid request from Seller, Seller may request such funds from Purchaser. After such request, and provided Lender has not made a disbursement to Seller, Purchaser shall pay to Seller the amount of such funds and Purchaser shall be entitled to reimbursement therefor from the Renovation Reserve Funds. Notwithstanding anything to the contrary set forth in this Agreement, Seller’s obligations under this Section 10.1(b) shall in no way be limited or reduced by Section 5.3 (i.e., the Cap, Deductible and/or Survival Periods shall not apply). The terms of this Section 10.1(b) shall survive the Closing.
(c) From and after the end of the Inspection Period, Seller shall not enter into any new Hotel Contract or Space Lease, Lease or (ii) cancel, modify modify, or renew any existing Hotel Contract or Space Lease affecting the Hotel in any material manner that is not cancelable upon thirty (30) or less days’ notice days without cause and without payment of any penalty penalty, cost or termination fee, without the prior written consent of Purchaser, in its sole and good faith discretion; provided, however, that Purchaser’s prior consent shall not be required for Seller to enter into Hotel Contracts with third parties as required to complete the Renovation Work so long as the same are upon commercially reasonable and arm’s length terms and conditions. If Purchaser fails to respond to a request for consent within three ten (310) Business Days days after receipt of such request, such consent will be deemed to have been given. Purchaser may provide written notice to Seller, not later than the date that is ten (10) days after the Effective Date, of any Hotel Contracts which Purchaser wants Seller to terminate on or after the Closing Date, provided that such Hotel Contracts may be terminated prior to expiration of the term stated therein. If any Hotel Contract is not terminable prior to the Closing Date pursuant to the terms thereof, such Hotel Contract (if it is listed on Exhibit “C”) shall be deemed givenassigned to Purchaser at Closing and the payments and charges payable under such Service Contract shall be prorated as provided in Sections 7.01 and 7.02 hereof. With respect to each Hotel Contract Purchaser elects to terminate, Purchaser shall be charged at Closing for any amounts payable to a third party contractor in order to terminate such Hotel Contract pursuant to the applicable provisions thereof, and shall be responsible to deposit all such amounts with Escrow Agent on or before the Closing.
(dc) Seller shall have the right and obligationright, without notice to or consent of Purchaser, to make Bookings in the ordinary course of business and consistent with business, at no less than the Present Standard, Hotel’s standard rates including customary discounted rates.
(ed) Seller shall use commercially reasonable efforts to preserve in force all existing Permits and to cause all those expiring on or before the Closing Date to be renewed prior to the Closing Date. If any such Permit shall be suspended or revoked, Seller shall promptly notify Purchaser and shall take all commercially reasonable measures necessary to cause the reinstatement of such Permit. To the extent that the consent of any governmental authority is required with respect to the transfer of any Permit to Purchaser, Seller shall join in all applications for and cooperate with Purchaser in seeking and obtaining all necessary consents, permits, approvals, and licenses, and otherwise cooperate with Purchaser as may be reasonably necessary to facilitate the transfer of the Property to Purchaser; provided, however, that any costs, expenses or fees paid or incurred by Seller in connection therewith shall be reimbursed and credited to Sellersuch required consent.
(f) From and after the expiration of the Inspection Period through the Closing Date, Purchaser shall have the right to consult with Seller and Manager with respect to the hiring, initially and with respect to any replacement, of the following Hotel staff positions: (i) general manager; (ii) director of human resources; (iii) director of food and beverage; (iv) chief engineer; (v) director of marketing; and (vi) comptroller/chief financial officer.
(ge) Seller will maintain and shall use commercially reasonable efforts to cause Manager to maintain in effect all policies of casualty and liability insurance, or similar policies of insurance, with the same limits of coverage which it now carries carried with respect to the Hotel.
(h) Seller shall not cause or permit any Fixtures and Tangible Personal Property or Operating Equipment located, installed or used in the Hotel as of the Effective Date (except Excluded Assets, if applicable) to be sold, exchanged, assigned, conveyed, leased, disposed of or removed, other than in the ordinary course of business conducted in accordance with the Present Standards or as contemplated by the Renovation Work.
(i) Seller shall provide (and shall instruct Manager to provide) copies of any written notices (i) received by Seller after the Effective Date from any governmental or quasi-governmental organizations regarding any violations of Legal Requirements, or (ii) given or received by Seller (or on behalf of Seller) after the Effective Date alleging material defaults under any material Hotel Contracts, Space Leases or Equipment Leases.
(j) Subject to Article IV and prior to the Closing, neither Purchaser nor any of Purchaser’s representatives shall communicate concerning the Property with Manager, any tenant, employee, guest or occupant of the Real Property any governmental or quasi-governmental authority, agency, commission, board or regulatory body or any party to any Hotel Contract without the prior written approval of Seller, which approval shall not be unreasonably withheld, conditioned or delayed.
(k) Between the Effective Date and the Closing Date or earlier termination of this Agreement, neither Seller, Manager, nor any of their respective Affiliates nor any of their respective members, partners, or agents (including, without limitation, any broker) shall offer, solicit or negotiate the possible direct or indirect acquisition of the Property (or any other form of transaction having a similar effect) or make any information about the Property available (for purpose of sale or refinance) to any Person other than Purchaser, its Affiliates and their respective designees, agents and/or authorized third parties. Seller agrees to direct its broker, if any, to cease the marketing of the Property. Such restrictions shall be in effect until the earlier of (i) the Closing Date, or (ii) the termination of this Agreement by either party pursuant to the terms and conditions hereof; and thereafter shall be null and void and of no further force or effect.
(l) Seller shall use commercially reasonable efforts to deliver to Purchaser prior to the Closing each of the Certificates of No Tax Due with respect to the Property and a tax certificate from the Dallas County Tax Assessor-Collector’s office pursuant to Texas Tax Code section 31.08 with respect to the Property.
(m) No later than five (5) days after the Effective Date, Seller shall send to Residences HOA and Condominium Owner the form of ORE Agreement Estoppel and Seller shall use commercially reasonable efforts (without any obligation to incur any expenses (other than attorneys’ fees)) to obtain the ORE Agreement Estoppels from the Residences HOA and Condominium Owner prior to Closing.
(n) From and after the Effective Date and continuing until completion, Seller shall use commercially reasonable and diligent efforts to complete at its sole cost and expense (i) an upgrade of the Hotel’s POS system and (ii) implementation of a chip & pin POS system at the Hotel, each in accordance with the Hotel’s 2015 Capital Improvement Plan. Such work shall be completed in a good and workmanlike manner, in compliance with all applicable Legal Requirements and as soon as reasonably possible. Upon completion of such work, Seller shall provide Purchaser reasonable evidence that such work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto. The terms of this Section 10.1(n) shall survive the Closing.
Appears in 2 contracts
Sources: Agreement for Sale and Purchase of Hotel, Agreement for Sale and Purchase of Hotel (Strategic Hotels & Resorts, Inc)
Actions and Operations Pending Closing. Seller agrees that at all times prior to the Closing Date:
(a) Subject to conditions beyond Seller’s reasonable control, the Hotel will continue to be operated and maintained in the ordinary course of business substantially consistent with Present Standards including, without limitation (i) maintaining the inventories of FF&E, Operating Equipment and Consumables at the Property at levels substantially consistent with Present Standards, (ii) maintaining all Fixtures and Tangible Personal Property in the same condition as it existed as of the Effective Date (reasonable wear, tear and loss excepted) and not trading, substituting or removing any Personal Property from the Hotel, except Consumables and Inventory substantially consistent with Present Standards, (iii) performing routine maintenance and repairs for the Property substantially consistent with Present Standards, (iv) renewing all material Licenses and Permits prior to their expiration, (v) maintaining all insurance policies, (vi) not making any material alterations or improvements at the Property (other than those items covered by the Renovation Work)Property, or demolishing any of the Property subject to Section 11.1, (vii) not selling, transferring or otherwise disposing of any of the Property, other than substantially consistent with Present Standards and (viii) not removing any Property from the Hotel, other than consistent with Present Standards or as required in connection with the work covered by the Renovation WorkStandards.
(b) Seller shall be responsible for the payment in full and completion of the Renovation Work, and the release of any and all mechanic’s liens related thereto. Seller shall use commercially reasonable and diligent efforts to complete the Renovation Work in a good and workmanlike manner, in compliance with all applicable Legal Requirements, in compliance with the plans and specifications reviewed by Purchaser, and as soon as reasonably possible following Closing at Seller’s sole cost and expense; provided that Seller shall endeavor to complete the Renovation Work no later than March 31, 2016 (provided that Seller shall have until July 1, 2016 to finalize and receive any lien waivers or related close-out payments with respect to the Renovation Work). In connection with the Renovation Work, Seller shall promptly bond over or remove any and all monetary liens arising in connection thereto. In addition, Seller shall cause each contractor involved in the Renovation Work to list Purchaser and Dallas Hotel Operator, Inc. as additional insureds on any insurance required pursuant to each agreement with a contractor relating to the Renovation Work. Furthermore, Seller agrees to pursue in good faith all remedies of any nature against each contractor with respect to any matter arising from, in connection with or related to the Renovation Work. Upon completion of the Renovation Work, Seller shall provide Purchaser (y) reasonable evidence that the Renovation Work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto and (z) provide Purchaser any applicable sign-offs from Franchisor. Purchaser hereby grants a license to Seller or its agents to enter upon the Property from and after the Closing to complete the Renovation Work, provided, that all such Renovation Work shall be done in a manner to avoid any commercially unreasonable material disruption to the operation of the Hotel and in accordance with rules established by Purchaser from time to time; provided, further, that Seller shall provide Purchaser with prior written notice of any material disruption to the operation of the Hotel such that Purchaser can work with Seller to minimize such disruption. In connection with the Seller’s obligations under this Section 10.1(b), Seller shall establish at Closing an escrow holdback reserve pursuant to an escrow agreement by and among Seller, Purchaser and Purchaser’s lender (“Lender”), in an amount equal to the anticipated cost to complete the Renovation Work (as agreed upon by Purchaser and Seller in their respective good faith discretion) (the “Anticipated Completion Cost”), plus a contingency amount equal to fifteen percent (15%) of the Anticipated Completion Cost (collectively, the “Renovation Reserve Funds”). The Renovation Reserve Funds shall be held back from the Purchase Price payable to Seller at Closing and shall be deposited with Lender at Closing. In the event that after the Closing Seller fails to complete the Renovation Work in the manner required under this Section 10.1(b) and such failure continues for a period of thirty (30) days following written notice from Purchaser with respect thereto (and is not the result of any force majeure event of which Seller has provided Purchaser with written notice within a reasonable period of time after the onset thereof), then, upon written notice to Seller and Lender, Purchaser shall have the right (but not the obligation) to complete the Renovation Work itself (whether directly or through a third-party) and if Purchaser so elects, Seller shall assign any and all applicable contracts to Purchaser (or its designee) and Purchaser shall use funds from the Renovation Reserve Funds to complete the Renovation Work. The Renovation Reserve Funds shall be released in accordance with the terms of the escrow agreement, which the parties shall negotiate in good faith prior to the Closing Date; provided, however, the conditions of such release shall be limited to Seller’s delivery of (i) reasonable evidence that the parties performing such Renovation Work shall have no liens or claims of liens upon payment, (ii) invoices or other satisfactory evidence of the costs incurred and (iii) such other reasonable requirements of Lender, as agreed upon by Seller in its reasonable discretion. In the event the Renovation Reserve Funds are insufficient to complete the Renovation Work, Seller shall immediately pay directly to the applicable contractor or reimburse Purchaser for any and all costs and expenses actually incurred by Purchaser in excess of the Renovation Reserve Funds; provided, however, Seller shall not cover any increased cost of the Renovation Work resulting from any changes in scope or other modifications to the Renovation Work approved or implemented by Purchaser that are not contemplated by the original contracts and subcontracts for such Renovation Work. In the event any Renovation Reserve Funds remain after (x) Purchaser’s receipt of reasonable evidence that the Renovation Work has been completed and paid for, (y) unconditional lien waivers have been delivered to Purchaser and (z) Seller has provided Purchaser any applicable sign-offs from Franchisor and satisfied such other reasonable requirements of Lender, Lender shall disburse such funds to Seller. Notwithstanding anything herein to the contrary, if Lender has not disbursed any required portion of the Renovation Reserve Fund (either interim draws or the balance of the funds after the Renovation Work has been completed) after the applicable requirements set forth in this Section 10.1 have been met (other than requirements not relating to the Renovation Work that can only be met by Purchaser as borrower), within thirty (30) days after receipt of a valid request from Seller, Seller may request such funds from Purchaser. After such request, and provided Lender has not made a disbursement to Seller, Purchaser shall pay to Seller the amount of such funds and Purchaser shall be entitled to reimbursement therefor from the Renovation Reserve Funds. Notwithstanding anything to the contrary set forth in this Agreement, Seller’s obligations under this Section 10.1(b) shall in no way be limited or reduced by Section 5.3 (i.e., the Cap, Deductible and/or Survival Periods shall not apply). The terms of this Section 10.1(b) shall survive the Closing.
(c) From and after the end of the Inspection Period, Seller shall not enter into any new Hotel Contract or Space Lease, or cancel, modify or renew any existing Hotel Contract or Space Lease that is not cancelable upon thirty (30) or less days’ notice and without payment of any penalty or termination fee, without the prior written consent of Purchaser, in its sole and good faith discretion; provided, however, that Purchaser’s prior consent shall not be required for Seller to enter into Hotel Contracts with third parties as required to complete the Renovation Work so long as the same are upon commercially reasonable and arm’s length terms and conditions. If Purchaser fails to respond to a request for consent within three (3) Business Days after receipt of such request, such consent shall be deemed given.
(d) Seller shall have the right and obligation, without notice to or consent of Purchaser, to make Bookings in the ordinary course of business and consistent with the Present Standard, including customary discounted rates.
(e) Seller shall use commercially reasonable efforts to preserve in force all existing Permits and to cause all those expiring on or before the Closing Date to be renewed prior to the Closing Date. If any such Permit shall be suspended or revoked, Seller shall promptly notify Purchaser and shall take commercially reasonable measures to cause the reinstatement of such Permit. Seller shall join in all applications for and cooperate with Purchaser in obtaining all necessary consents, permits, approvals, and licenses, and otherwise cooperate with Purchaser as may be reasonably necessary to facilitate the transfer of the Property to Purchaser; provided, however, that any costs, expenses or fees paid or incurred by Seller in connection therewith shall be reimbursed and credited to Seller.
(f) From and after the expiration of the Inspection Period through the Closing Date, Purchaser shall have the right to consult with Seller and Manager with respect to the hiring, initially and with respect to any replacement, of the following Hotel staff positions: (i) general manager; (ii) director of human resources; (iii) director of food and beverage; (iv) chief engineer; (v) director of marketing; and (vi) comptroller/chief financial officer.
(g) Seller shall maintain in effect all policies of casualty and liability insurance, or similar policies of insurance, with the same limits of coverage which it now carries with respect to the Hotel.
(h) Seller shall not cause or permit any Fixtures and Tangible Personal Property or Operating Equipment located, installed or used in the Hotel as of the Effective Date (except Excluded Assets, if applicable) to be sold, exchanged, assigned, conveyed, leased, disposed of or removed, other than in the ordinary course of business conducted in accordance with the Present Standards or as contemplated by the Renovation Work.
(i) Seller shall provide (and shall instruct Manager to provide) copies of any written notices (i) received by Seller after the Effective Date from any governmental or quasi-governmental organizations regarding any violations of Legal Requirements, or (ii) given or received by Seller (or on behalf of Seller) after the Effective Date alleging material defaults under any material Hotel Contracts, Space Leases or Equipment Leases.
(j) Subject to Article IV and prior to the Closing, neither Purchaser nor any of Purchaser’s representatives shall communicate concerning the Property with Manager, any tenant, employee, guest or occupant of the Real Property any governmental or quasi-governmental authority, agency, commission, board or regulatory body or any party to any Hotel Contract without the prior written approval of Seller, which approval shall not be unreasonably withheld, conditioned or delayed.
(k) Between the Effective Date and the Closing Date or earlier termination of this Agreement, neither Seller, Manager, nor any of their respective Affiliates nor any of their respective members, partners, or agents (including, without limitation, any broker) shall offer, solicit or negotiate the possible direct or indirect acquisition of the Property (or any other form of transaction having a similar effect) or make any information about the Property available (for purpose of sale or refinance) to any Person other than Purchaser, its Affiliates and their respective designees, agents and/or authorized third parties. Seller agrees to direct its broker, if any, to cease the marketing of the Property. Such restrictions shall be in effect until the earlier of (i) the Closing Date, or (ii) the termination of this Agreement by either party pursuant to the terms and conditions hereof; and thereafter shall be null and void and of no further force or effect.
(l) Seller shall use commercially reasonable efforts to deliver to Purchaser prior to the Closing each of the Certificates of No Tax Due with respect to the Property and a tax certificate from the Dallas County Tax Assessor-Collector’s office pursuant to Texas Tax Code section 31.08 with respect to the Property.
(m) No later than five (5) days after the Effective Date, Seller shall send to Residences HOA and Condominium Owner the form of ORE Agreement Estoppel and Seller shall use commercially reasonable efforts (without any obligation to incur any expenses (other than attorneys’ fees)) to obtain the ORE Agreement Estoppels from the Residences HOA and Condominium Owner prior to Closing.
(n) From and after the Effective Date and continuing until completion, Seller shall use commercially reasonable and diligent efforts to complete at its sole cost and expense (i) an upgrade of the Hotel’s POS system and (ii) implementation of a chip & pin POS system at the Hotel, each in accordance with the Hotel’s 2015 Capital Improvement Plan. Such work shall be completed in a good and workmanlike manner, in compliance with all applicable Legal Requirements and as soon as reasonably possible. Upon completion of such work, Seller shall provide Purchaser reasonable evidence that such work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto. The terms of this Section 10.1(n) shall survive the Closing.
Appears in 1 contract
Sources: Agreement for Sale and Purchase of Hotel (Carey Watermark Investors Inc)
Actions and Operations Pending Closing. Seller agrees that at all times prior to the Closing Date:
(a) Subject to conditions beyond Seller’s reasonable control, the Hotel will continue to be operated and maintained substantially in the ordinary course of business substantially consistent accordance with Present Standards including, without limitation (i) maintaining the inventories of FF&E, Operating Equipment and Consumables at the Property at levels substantially consistent with Present Standards, (ii) maintaining all Fixtures and Tangible Personal Property in the same condition as it existed as of the Effective Date (reasonable wear, tear and loss excepted) and not trading, substituting or removing any Personal Property from the Hotel, except Consumables and Inventory substantially consistent with Present Standards, (iii) performing routine maintenance and repairs for the Property substantially consistent with Present Standards, (iv) renewing all material Licenses and Permits prior to their expiration, (v) maintaining all insurance policies, (vi) not making any material alterations or improvements at the Property (other than those items covered by the Renovation Work), or demolishing any of the Property subject to Section 11.1, (vii) not selling, transferring or otherwise disposing of any of the Property, other than substantially consistent with Present Standards and (viii) not removing any Property from the Hotel, other than consistent with Present Standards or as required in connection with the work covered by the Renovation Workpresent practices.
(b) Seller shall be responsible for the payment in full and completion of the Renovation Work, and the release of any and all mechanic’s liens related thereto. Seller shall use commercially reasonable and diligent efforts to complete the Renovation Work in a good and workmanlike manner, in compliance with all applicable Legal Requirements, in compliance with the plans and specifications reviewed by Purchaser, and as soon as reasonably possible following Closing at Seller’s sole cost and expense; provided that Seller shall endeavor to complete the Renovation Work no later than March 31, 2016 (provided that Seller shall have until July 1, 2016 to finalize and receive any lien waivers or related close-out payments with respect to the Renovation Work). In connection with the Renovation Work, Seller shall promptly bond over or remove any and all monetary liens arising in connection thereto. In addition, Seller shall cause each contractor involved in the Renovation Work to list Purchaser and Dallas Hotel Operator, Inc. as additional insureds on any insurance required pursuant to each agreement with a contractor relating to the Renovation Work. Furthermore, Seller agrees to pursue in good faith all remedies of any nature against each contractor with respect to any matter arising from, in connection with or related to the Renovation Work. Upon completion of the Renovation Work, Seller shall provide Purchaser (y) reasonable evidence that the Renovation Work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto and (z) provide Purchaser any applicable sign-offs from Franchisor. Purchaser hereby grants a license to Seller or its agents to enter upon the Property from and after the Closing to complete the Renovation Work, provided, that all such Renovation Work shall be done in a manner to avoid any commercially unreasonable material disruption to the operation of the Hotel and in accordance with rules established by Purchaser from time to time; provided, further, that Seller shall provide Purchaser with prior written notice of any material disruption to the operation of the Hotel such that Purchaser can work with Seller to minimize such disruption. In connection with the Seller’s obligations under this Section 10.1(b), Seller shall establish at Closing an escrow holdback reserve pursuant to an escrow agreement by and among Seller, Purchaser and Purchaser’s lender (“Lender”), in an amount equal to the anticipated cost to complete the Renovation Work (as agreed upon by Purchaser and Seller in their respective good faith discretion) (the “Anticipated Completion Cost”), plus a contingency amount equal to fifteen percent (15%) of the Anticipated Completion Cost (collectively, the “Renovation Reserve Funds”). The Renovation Reserve Funds shall be held back from the Purchase Price payable to Seller at Closing and shall be deposited with Lender at Closing. In the event that after the Closing Seller fails to complete the Renovation Work in the manner required under this Section 10.1(b) and such failure continues for a period of thirty (30) days following written notice from Purchaser with respect thereto (and is not the result of any force majeure event of which Seller has provided Purchaser with written notice within a reasonable period of time after the onset thereof), then, upon written notice to Seller and Lender, Purchaser shall have the right (but not the obligation) to complete the Renovation Work itself (whether directly or through a third-party) and if Purchaser so elects, Seller shall assign any and all applicable contracts to Purchaser (or its designee) and Purchaser shall use funds from the Renovation Reserve Funds to complete the Renovation Work. The Renovation Reserve Funds shall be released in accordance with the terms of the escrow agreement, which the parties shall negotiate in good faith prior to the Closing Date; provided, however, the conditions of such release shall be limited to Seller’s delivery of (i) reasonable evidence that the parties performing such Renovation Work shall have no liens or claims of liens upon payment, (ii) invoices or other satisfactory evidence of the costs incurred and (iii) such other reasonable requirements of Lender, as agreed upon by Seller in its reasonable discretion. In the event the Renovation Reserve Funds are insufficient to complete the Renovation Work, Seller shall immediately pay directly to the applicable contractor or reimburse Purchaser for any and all costs and expenses actually incurred by Purchaser in excess of the Renovation Reserve Funds; provided, however, Seller shall not cover any increased cost of the Renovation Work resulting from any changes in scope or other modifications to the Renovation Work approved or implemented by Purchaser that are not contemplated by the original contracts and subcontracts for such Renovation Work. In the event any Renovation Reserve Funds remain after (x) Purchaser’s receipt of reasonable evidence that the Renovation Work has been completed and paid for, (y) unconditional lien waivers have been delivered to Purchaser and (z) Seller has provided Purchaser any applicable sign-offs from Franchisor and satisfied such other reasonable requirements of Lender, Lender shall disburse such funds to Seller. Notwithstanding anything herein to the contrary, if Lender has not disbursed any required portion of the Renovation Reserve Fund (either interim draws or the balance of the funds after the Renovation Work has been completed) after the applicable requirements set forth in this Section 10.1 have been met (other than requirements not relating to the Renovation Work that can only be met by Purchaser as borrower), within thirty (30) days after receipt of a valid request from Seller, Seller may request such funds from Purchaser. After such request, and provided Lender has not made a disbursement to Seller, Purchaser shall pay to Seller the amount of such funds and Purchaser shall be entitled to reimbursement therefor from the Renovation Reserve Funds. Notwithstanding anything to the contrary set forth in this Agreement, Seller’s obligations under this Section 10.1(b) shall in no way be limited or reduced by Section 5.3 (i.e., the Cap, Deductible and/or Survival Periods shall not apply). The terms of this Section 10.1(b) shall survive the Closing.
(c) From and after the end expiration of the Inspection Period, Seller shall will not enter into any new Hotel Material Contract or Space Lease, or cancel, modify modify, or renew any existing Hotel Material Contract or Space Lease that is not cancelable upon thirty (30) or less days’ notice and without payment of any penalty or termination feedays notice, without the prior written consent of Purchaser, in its sole and good faith discretion; provided, however, that Purchaser’s prior which consent shall not be required for Seller to enter into Hotel Contracts with third parties as required to complete the Renovation Work so long as the same are upon commercially reasonable and arm’s length terms and conditionsunreasonably withheld, conditioned or delayed. If Purchaser fails to respond to a request for consent within three ten (310) Business Days days after receipt of such request, such consent shall be deemed given.
(dc) Seller shall have the right and obligationright, without notice to or consent of Purchaser, to make Bookings in the ordinary course of business and consistent with business, at no less than the Present Standard, Hotel’s standard rates including customary discounted rates.
(ed) Seller shall use commercially reasonable efforts to preserve in force all existing Permits and to cause all those expiring on or before the Closing Date to be renewed prior to the Closing Date. If any such Permit shall be suspended or revoked, Seller shall promptly notify Purchaser and shall take commercially reasonable measures to cause the reinstatement of such Permit. Seller shall join in all applications for and cooperate with Purchaser in obtaining all necessary consents, permits, approvals, and licenses, and otherwise cooperate with Purchaser as may be reasonably necessary to facilitate the transfer of the Property to Purchaser; provided, however, that any costs, expenses or fees paid or incurred by Seller in connection therewith shall be reimbursed and credited to Seller.
(f) From and after the expiration of the Inspection Period through the Closing Date, Purchaser shall have the right to consult with Seller and Manager with respect to the hiring, initially and with respect to any replacement, of the following Hotel staff positions: (i) general manager; (ii) director of human resources; (iii) director of food and beverage; (iv) chief engineer; (v) director of marketing; and (vi) comptroller/chief financial officer.
(ge) Seller shall will maintain in effect all policies of casualty and liability insurance, or similar policies of insurance, with the same limits of coverage which it now carries with respect to the Hotel.
(hf) Seller shall not cause remove any furniture, fixtures, furnishings or permit any Fixtures and Tangible Personal Property or Operating Equipment equipment located, installed or used in the Hotel as of the Effective Date date hereof (except Excluded Assets, if applicable) to be sold, exchanged, assigned, conveyed, leased, disposed of or removed, other than in the ordinary course of business conducted in accordance with the Present Standards or as contemplated by the Renovation Workbusiness.
(ig) Seller shall provide (and shall instruct Manager to provide) copies of any written notices (i) received by Seller after the Effective Date from any governmental or quasi-governmental organizations regarding any violations of Legal Requirements, or (ii) given or received by Seller (or on behalf of Seller) after the Effective Date alleging material defaults under any material Hotel Contracts, Space Leases or Equipment Leases.
(j) Subject to Article IV and prior to the Closing, neither Purchaser nor any of Purchaser’s representatives shall communicate concerning the Property with Manager, any tenant, employee, guest or occupant of the Real Property any governmental or quasi-governmental authority, agency, commission, board or regulatory body or any party to any Hotel Contract without the prior written approval of Seller, which approval shall not be unreasonably withheld, conditioned or delayed.
(k) Between the Effective Date and the Closing Date or earlier termination of this Agreement, neither Seller, Manager, nor any of their respective Affiliates nor any of their respective members, partners, or agents (including, without limitation, any broker) shall offer, solicit or negotiate the possible direct or indirect acquisition of the Property (or any other form of transaction having a similar effect) or make any information about the Property available (for purpose of sale or refinance) to any Person other than Purchaser, its Affiliates and their respective designees, agents and/or authorized third parties. Seller agrees to direct its broker, if any, to cease the marketing of the Property. Such restrictions shall be in effect until the earlier of (i) the Closing Date, or (ii) the termination of this Agreement by either party pursuant to the terms and conditions hereof; and thereafter shall be null and void and of no further force or effect.
(l) Seller shall use commercially reasonable efforts to deliver to Purchaser prior to the Closing each of the Certificates of No Tax Due with respect to the Property and a tax certificate from the Dallas County Tax Assessor-Collector’s office pursuant to Texas Tax Code section 31.08 with respect to the Property.
(m) No later than five (5) days after the Effective Date, Seller shall send to Residences HOA and Condominium Owner the form of ORE Agreement Estoppel and Seller shall use commercially reasonable efforts (without any obligation to incur any expenses (other than attorneys’ fees)) to obtain the ORE Agreement Estoppels from the Residences HOA and Condominium Owner prior to Closing.
(n) From and after the Effective Date and continuing until completion, Seller shall use commercially reasonable and diligent efforts to complete at its sole cost and expense (i) an upgrade of the Hotel’s POS system and (ii) implementation of a chip & pin POS system at the Hotel, each in accordance with the Hotel’s 2015 Capital Improvement Plan. Such work shall be completed in a good and workmanlike manner, in compliance with all applicable Legal Requirements and as soon as reasonably possible. Upon completion of such work, Seller shall provide Purchaser reasonable evidence that such work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto. The terms of this Section 10.1(n) shall survive the Closing.
Appears in 1 contract
Sources: Agreement for Sale and Purchase of Hotel (Hersha Hospitality Trust)
Actions and Operations Pending Closing. 11.01. Seller agrees that at all times after the Effective Date and prior to the Closing Date:
(a) Subject to conditions beyond Seller’s reasonable controlExcept as Purchaser may otherwise consent in writing, until the Hotel will Closing, Seller will: (i) continue to be operate and maintain and manage the Property in a manner consistent with the manner in which Seller has operated and maintained in the ordinary course of business substantially consistent with Present Standards including, without limitation (i) maintaining the inventories of FF&E, Operating Equipment and Consumables at managed the Property at levels substantially consistent with Present Standards, prior to the Effective Date; (ii) maintaining all Fixtures operate, manage and Tangible Personal maintain the Property in the same condition as it existed as of the Effective Date (reasonable wearaccordance with applicable laws, tear rules, regulations and loss excepted) and not trading, substituting or removing any Personal Property from the Hotel, except Consumables and Inventory substantially consistent with Present Standards, ordinances; (iii) performing routine maintenance maintain the Property in its present condition and repair, ordinary wear and tear excepted; (iv) undertake repairs and replacements in accordance with its past practices; (v) maintain the existing insurance policies for the Property substantially consistent with Present Standards, and the operation thereof (ivand any replacements thereof) renewing all material Licenses in full force and Permits prior to their expiration, (v) maintaining all insurance policies, effect; (vi) not making grant to any material alterations or improvements at third party any interest in the Property (other than those items covered by or any part thereof, except pursuant to leases which Seller may enter into after the Renovation Work)Effective Date as permitted under this Agreement, or demolishing any of the Property subject to Section 11.1, and (vii) not selling, transferring or otherwise disposing of any of timely pay and perform its obligations in all material respects under the Property, other than substantially consistent with Present Standards Leases and (viii) not removing any Property from the Hotel, other than consistent with Present Standards or as required in connection with the work covered by the Renovation WorkAssumed Service Contracts.
(b) Seller shall be responsible for the payment in full and completion of the Renovation Work, and the release of any and all mechanic’s liens related thereto. Seller shall use commercially reasonable and diligent efforts to complete the Renovation Work in a good and workmanlike manner, in compliance with all applicable Legal Requirements, in compliance with the plans and specifications reviewed by Purchaser, and as soon as reasonably possible following Closing at Seller’s sole cost and expense; provided that Seller shall endeavor to complete the Renovation Work no later than March 31, 2016 (provided that Seller shall have until July 1, 2016 to finalize and receive any lien waivers or related close-out payments with respect to the Renovation Work). In connection with the Renovation Work, Seller shall promptly bond over or remove any and all monetary liens arising in connection thereto. In addition, Seller shall cause each contractor involved in the Renovation Work to list Purchaser and Dallas Hotel Operator, Inc. as additional insureds on any insurance required pursuant to each agreement with a contractor relating to the Renovation Work. Furthermore, Seller agrees to pursue in good faith all remedies of any nature against each contractor with respect to any matter arising from, in connection with or related to the Renovation Work. Upon completion of the Renovation Work, Seller shall provide Purchaser (y) reasonable evidence that the Renovation Work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto and (z) provide Purchaser any applicable sign-offs from Franchisor. Purchaser hereby grants a license to Seller or its agents to enter upon the Property from and after the Closing to complete the Renovation Work, provided, that all such Renovation Work shall be done in a manner to avoid any commercially unreasonable material disruption to the operation of the Hotel and in accordance with rules established by Purchaser from time to time; provided, further, that Seller shall provide Purchaser with prior written notice of any material disruption to the operation of the Hotel such that Purchaser can work with Seller to minimize such disruption. In connection with the Seller’s obligations under this Section 10.1(b), Seller shall establish at Closing an escrow holdback reserve pursuant to an escrow agreement by and among Seller, Purchaser and Purchaser’s lender (“Lender”), in an amount equal to the anticipated cost to complete the Renovation Work (as agreed upon by Purchaser and Seller in their respective good faith discretion) (the “Anticipated Completion Cost”), plus a contingency amount equal to fifteen percent (15%) of the Anticipated Completion Cost (collectively, the “Renovation Reserve Funds”). The Renovation Reserve Funds shall be held back from the Purchase Price payable to Seller at Closing and shall be deposited with Lender at Closing. In the event that after the Closing Seller fails to complete the Renovation Work in the manner required under this Section 10.1(b) and such failure continues for a period of thirty (30) days following written notice from Purchaser with respect thereto (and is not the result of any force majeure event of which Seller has provided Purchaser with written notice within a reasonable period of time after the onset thereof), then, upon written notice to Seller and Lender, Purchaser shall have the right (but not the obligation) to complete the Renovation Work itself (whether directly or through a third-party) and if Purchaser so elects, Seller shall assign any and all applicable contracts to Purchaser (or its designee) and Purchaser shall use funds from the Renovation Reserve Funds to complete the Renovation Work. The Renovation Reserve Funds shall be released in accordance with the terms of the escrow agreement, which the parties shall negotiate in good faith prior to the Closing Date; provided, however, the conditions of such release shall be limited to Seller’s delivery of (i) reasonable evidence that the parties performing such Renovation Work shall have no liens or claims of liens upon payment, (ii) invoices or other satisfactory evidence of the costs incurred and (iii) such other reasonable requirements of Lender, as agreed upon by Seller in its reasonable discretion. In the event the Renovation Reserve Funds are insufficient to complete the Renovation Work, Seller shall immediately pay directly to the applicable contractor or reimburse Purchaser for any and all costs and expenses actually incurred by Purchaser in excess of the Renovation Reserve Funds; provided, however, Seller shall not cover any increased cost of the Renovation Work resulting from any changes in scope or other modifications to the Renovation Work approved or implemented by Purchaser that are not contemplated by the original contracts and subcontracts for such Renovation Work. In the event any Renovation Reserve Funds remain after (x) Purchaser’s receipt of reasonable evidence that the Renovation Work has been completed and paid for, (y) unconditional lien waivers have been delivered to Purchaser and (z) Seller has provided Purchaser any applicable sign-offs from Franchisor and satisfied such other reasonable requirements of Lender, Lender shall disburse such funds to Seller. Notwithstanding anything herein to the contrary, if Lender has not disbursed any required portion of the Renovation Reserve Fund (either interim draws or the balance of the funds after the Renovation Work has been completed) after the applicable requirements set forth in this Section 10.1 have been met (other than requirements not relating to the Renovation Work that can only be met by Purchaser as borrower), within thirty (30) days after receipt of a valid request from Seller, Seller may request such funds from Purchaser. After such request, and provided Lender has not made a disbursement to Seller, Purchaser shall pay to Seller the amount of such funds and Purchaser shall be entitled to reimbursement therefor from the Renovation Reserve Funds. Notwithstanding anything to the contrary set forth in this Agreement, Seller’s obligations under this Section 10.1(b) shall in no way be limited or reduced by Section 5.3 (i.e., the Cap, Deductible and/or Survival Periods shall not apply). The terms of this Section 10.1(b) shall survive the Closing.
(c) From and after the end of the Inspection Period, Seller shall will not enter into any new Hotel Contract Service Contracts that will survive Closing which are not terminable at Closing, or Space Leaseotherwise on thirty (30) days’ prior notice, with no expense or liability to Purchaser, or cancel, modify or renew any existing Hotel Contract or Space Lease that is not cancelable upon thirty (30) or less days’ notice and without payment of any penalty or termination feeMandatory Assumed Service Contract, without the prior written consent of Purchaser, in its sole and good faith discretion; provided, however, that Purchaser’s prior consent shall not be required for Seller to enter into Hotel Contracts with third parties as required to complete the Renovation Work so long as the same are upon commercially reasonable and arm’s length terms and conditions. If Purchaser fails to respond to such a request for consent within three five (35) Business Days after receipt of such request, such consent shall be deemed givenapproved.
(dc) Until the Closing Date, Seller shall have continue to lease the right Property in a professional competent manner, and obligationshall continue utilizing its commercially reasonable efforts to rent any vacant Apartments at the rates set forth in its then current pricing policy guidelines, without notice and it shall continue to or consent of Purchaser, to make Bookings advertise for rentals in the same manner and degree as it has done previously when vacancies occurred. Except in the ordinary course of business and in a manner consistent with the Present Standard, including customary discounted rates.
(e) Seller shall use commercially reasonable efforts to preserve in force all existing Permits and to cause all those expiring on or before the Closing Date to be renewed prior to the Closing Date. If any such Permit shall be suspended or revokedSeller’s past practices, Seller shall promptly notify Purchaser and shall take commercially reasonable measures not (i) enter into any new lease for an apartment unit; (ii) enter into, and, renew or extend any Lease for an apartment unit with an existing tenant; (iii) terminate any Lease except by reason of a default by the tenant thereunder; (iv) grant any concessions to cause the reinstatement of such Permit. Seller shall join in all applications for and cooperate with Purchaser in obtaining all necessary consents, permits, approvals, and licenses, and otherwise cooperate with Purchaser as may be reasonably necessary to facilitate the transfer of the Property to Purchasera tenant; provided, however, that or (v) apply any costs, expenses or fees paid or incurred security deposit held by Seller in connection therewith shall be reimbursed and credited to Seller.
(f) From and after with any Lease except in the event of a termination of the applicable Lease. Following the expiration of the Inspection Period through the Closing Date, Purchaser shall have the right to consult with Seller and Manager with respect to the hiring, initially and with respect to any replacement, of the following Hotel staff positions: (i) general manager; (ii) director of human resources; (iii) director of food and beverage; (iv) chief engineer; (v) director of marketing; and (vi) comptroller/chief financial officer.
(g) Seller shall maintain in effect all policies of casualty and liability insurance, or similar policies of insurance, with the same limits of coverage which it now carries with respect to the Hotel.
(h) Seller shall not cause or permit any Fixtures and Tangible Personal Property or Operating Equipment located, installed or used in the Hotel as of the Effective Date (except Excluded Assets, if applicable) to be sold, exchanged, assigned, conveyed, leased, disposed of or removed, other than in the ordinary course of business conducted in accordance with the Present Standards or as contemplated by the Renovation Work.
(i) Seller shall provide (and shall instruct Manager to provide) copies of any written notices (i) received by Seller after the Effective Date from any governmental or quasi-governmental organizations regarding any violations of Legal Requirements, or (ii) given or received by Seller (or on behalf of Seller) after the Effective Date alleging material defaults under any material Hotel Contracts, Space Leases or Equipment Leases.
(j) Subject to Article IV and prior to the Closing, neither Purchaser nor any of Purchaser’s representatives shall communicate concerning the Property with Manager, any tenant, employee, guest or occupant of the Real Property any governmental or quasi-governmental authority, agency, commission, board or regulatory body or any party to any Hotel Contract without the prior written approval of Seller, which approval shall not be unreasonably withheld, conditioned or delayed.
(k) Between the Effective Date and the Closing Date or earlier termination of this Agreement, neither Seller, Manager, nor any of their respective Affiliates nor any of their respective members, partners, or agents (including, without limitation, any broker) shall offer, solicit or negotiate the possible direct or indirect acquisition of the Property (or any other form of transaction having a similar effect) or make any information about the Property available (for purpose of sale or refinance) to any Person other than Purchaser, its Affiliates and their respective designees, agents and/or authorized third parties. Seller agrees to direct its broker, if any, to cease the marketing of the Property. Such restrictions shall be in effect until the earlier of (i) the Closing Date, or (ii) the termination of this Agreement by either party pursuant to the terms and conditions hereof; and thereafter shall be null and void and of no further force or effect.
(l) Seller shall use commercially reasonable efforts to deliver to Purchaser prior to the Closing each of the Certificates of No Tax Due with respect to the Property and a tax certificate from the Dallas County Tax Assessor-Collector’s office pursuant to Texas Tax Code section 31.08 with respect to the Property.
(m) No later than five (5) days after the Effective DatePeriod, Seller shall send to Residences HOA not, without Purchaser’s prior written consent, enter into any new Lease or renew or extend any existing Lease, unless the Lease is on Seller’s standard form, is for a period of not less than six (6) months or greater than thirteen (13) months, and Condominium Owner at rental rates and containing only such tenant concessions as are consistent with Seller’s then current practices. After the form expiration of ORE Agreement Estoppel and Seller shall use commercially reasonable efforts (without any obligation to incur any expenses (other than attorneys’ fees)) to obtain the ORE Agreement Estoppels from the Residences HOA and Condominium Owner prior to Closing.
(n) From and after the Effective Date and continuing until completionInspection Period, Seller shall use commercially reasonable and diligent efforts to complete at its sole cost and expense (i) an upgrade of the Hotel’s POS system and (ii) implementation of a chip & pin POS system at the Hotel, each in accordance with the Hotel’s 2015 Capital Improvement Plan. Such work shall be completed in a good and workmanlike manner, in compliance with all applicable Legal Requirements and as soon as reasonably possible. Upon completion of such work, Seller shall will provide Purchaser reasonable evidence that with weekly box score reports describing any such work has been completed and paid for and there are no mechanic’s new Lease or materialmen’s liens lease execution or claims of liens related thereto. The terms of this Section 10.1(n) shall survive the Closingmodification.
Appears in 1 contract
Sources: Agreement to Purchase Apartments (Cantor Fitzgerald Income Trust, Inc.)
Actions and Operations Pending Closing. Seller agrees that at all times prior that, between the date hereof and the earlier of the Closing Date or the termination of the Contract pursuant to the Closing Dateterms hereof:
(a) Subject to conditions beyond Seller’s reasonable control, 9.1.1 the Hotel will continue to be operated and maintained in the ordinary course of business substantially consistent with Present Standards including, without limitation (i) maintaining the inventories of FF&E, Operating Equipment and Consumables at the Property at levels substantially consistent with Present Standards, (ii) maintaining all Fixtures and Tangible Personal Property in the same condition as it existed as of the Effective Date (reasonable wear, tear and loss excepted) and not trading, substituting or removing any Personal Property from the Hotel, except Consumables and Inventory substantially consistent with Present Standards, (iii) performing routine maintenance and repairs for the Property substantially consistent with Present Standards, (iv) renewing all material Licenses and Permits prior to their expiration, (v) maintaining all insurance policies, (vi) not making any material alterations or improvements at the Property (other than those items covered by the Renovation Work), or demolishing any of the Property subject to Section 11.1, (vii) not selling, transferring or otherwise disposing of any of the Property, other than substantially consistent with Present Standards and (viii) not removing any Property from the Hotel, other than consistent with Present Standards or as required in connection with the work covered by the Renovation Work.
(b) Seller shall be responsible for the payment in full and completion of the Renovation Work, and the release of any and all mechanic’s liens related thereto. Seller shall use commercially reasonable and diligent efforts to complete the Renovation Work in a good and workmanlike manner, in compliance with all applicable Legal Requirements, in compliance with the plans and specifications reviewed by Purchaser, and as soon as reasonably possible following Closing at Seller’s sole cost and expense; provided that Seller shall endeavor to complete the Renovation Work no later than March 31, 2016 (provided that Seller shall have until July 1, 2016 to finalize and receive any lien waivers or related close-out payments with respect to the Renovation Work). In connection with the Renovation Work, Seller shall promptly bond over or remove any and all monetary liens arising in connection thereto. In addition, Seller shall cause each contractor involved in the Renovation Work to list Purchaser and Dallas Hotel Operator, Inc. as additional insureds on any insurance required pursuant to each agreement with a contractor relating to the Renovation Work. Furthermore, Seller agrees to pursue in good faith all remedies of any nature against each contractor with respect to any matter arising from, in connection with or related to the Renovation Work. Upon completion of the Renovation Work, Seller shall provide Purchaser (y) reasonable evidence that the Renovation Work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto and (z) provide Purchaser any applicable sign-offs from Franchisor. Purchaser hereby grants a license to Seller or its agents to enter upon the Property from and after the Closing to complete the Renovation Work, provided, that all such Renovation Work shall be done in a manner to avoid any commercially unreasonable material disruption to the operation of the Hotel and in accordance with rules established by Purchaser from time to time; provided, further, that its present standards;
9.1.2 Seller shall provide Purchaser with prior written notice of any material disruption to the operation of the Hotel such that Purchaser can work with Seller to minimize such disruption. In connection with the Seller’s obligations under this Section 10.1(b), Seller shall establish at Closing an escrow holdback reserve pursuant to an escrow agreement by and among Seller, Purchaser and Purchaser’s lender (“Lender”), in an amount equal to the anticipated cost to complete the Renovation Work (as agreed upon by Purchaser and Seller in their respective good faith discretion) (the “Anticipated Completion Cost”), plus a contingency amount equal to fifteen percent (15%) of the Anticipated Completion Cost (collectively, the “Renovation Reserve Funds”). The Renovation Reserve Funds shall be held back from the Purchase Price payable to Seller at Closing and shall be deposited with Lender at Closing. In the event that after the Closing Seller fails to complete the Renovation Work in the manner required under this Section 10.1(b) and such failure continues for a period of thirty (30) days following written notice from Purchaser with respect thereto (and is not the result of any force majeure event of which Seller has provided Purchaser with written notice within a reasonable period of time after the onset thereof), then, upon written notice to Seller and Lender, Purchaser shall have the right (but not the obligation) to complete the Renovation Work itself (whether directly or through a third-party) and if Purchaser so elects, Seller shall assign any and all applicable contracts to Purchaser (or its designee) and Purchaser shall use funds from the Renovation Reserve Funds to complete the Renovation Work. The Renovation Reserve Funds shall be released in accordance with the terms of the escrow agreement, which the parties shall negotiate in good faith prior to the Closing Date; provided, however, the conditions of such release shall be limited to Seller’s delivery of (i) reasonable evidence that the parties performing such Renovation Work shall have no liens or claims of liens upon payment, (ii) invoices or other satisfactory evidence of the costs incurred and (iii) such other reasonable requirements of Lender, as agreed upon by Seller in its reasonable discretion. In the event the Renovation Reserve Funds are insufficient to complete the Renovation Work, Seller shall immediately pay directly to the applicable contractor or reimburse Purchaser for any and all costs and expenses actually incurred by Purchaser in excess of the Renovation Reserve Funds; provided, however, Seller shall not cover any increased cost of the Renovation Work resulting from any changes in scope or other modifications to the Renovation Work approved or implemented by Purchaser that are not contemplated by the original contracts and subcontracts for such Renovation Work. In the event any Renovation Reserve Funds remain after (x) Purchaser’s receipt of reasonable evidence that the Renovation Work has been completed and paid for, (y) unconditional lien waivers have been delivered to Purchaser and (z) Seller has provided Purchaser any applicable sign-offs from Franchisor and satisfied such other reasonable requirements of Lender, Lender shall disburse such funds to Seller. Notwithstanding anything herein to the contrary, if Lender has not disbursed any required portion of the Renovation Reserve Fund (either interim draws or the balance of the funds after the Renovation Work has been completed) after the applicable requirements set forth in this Section 10.1 have been met (other than requirements not relating to the Renovation Work that can only be met by Purchaser as borrower), within thirty (30) days after receipt of a valid request from Seller, Seller may request such funds from Purchaser. After such request, and provided Lender has not made a disbursement to Seller, Purchaser shall pay to Seller the amount of such funds and Purchaser shall be entitled to reimbursement therefor from the Renovation Reserve Funds. Notwithstanding anything to the contrary set forth in this Agreement, Seller’s obligations under this Section 10.1(b) shall in no way be limited or reduced by Section 5.3 (i.e., the Cap, Deductible and/or Survival Periods shall not apply). The terms of this Section 10.1(b) shall survive the Closing.
(c) From and after the end of the Inspection Period, Seller shall not enter into any new Hotel Contract or Space Lease, or cancel, modify or renew any existing Hotel Contract or Space Lease that is not cancelable upon thirty (30) or less days’ notice and without payment of any penalty or termination feewill not, without the prior written consent of Purchaser, which may be granted or withheld in its sole and good faith Purchaser's reasonable discretion, enter into any contracts or commitments with respect to the Hotel involving any capital expenditures or material construction; provided, however, that Purchaser’s prior such consent of Purchaser shall not be required for (a) in the event of a Casualty or an Emergency or (b) with respect to matters set forth on Seller's calendar year 2005 capital expenditures budget;
9.1.3 Seller to will not, without the prior written consent of Purchaser, which may be granted or withheld in Purchaser's reasonable discretion, (a) sell, pledge or transfer any of its interest in any of the Property other than in the ordinary course of business, (b) enter into any (i) new Property Contracts or (ii) new licenses or permits or (iii) cancel, materially modify or renew any of the existing Property Contracts (other than a Non--Material Property Contract) or Leases; provided, however, that Seller may, without Purchaser's prior consent, enter into (I) Non--Material Contracts, (II) purchase orders for Personal Property, any Inventory, Consumables and/or Operating Equipment in the ordinary course of business, and (III) applications to obtain or renew Permits used in the ordinary course of business or required for the continued operation of the business of the Hotel Contracts with third parties as required to complete or the Renovation Work so long as transfer contemplated hereby;
9.1.4 Notwithstanding the same are upon commercially reasonable and arm’s length terms and conditions. If Purchaser fails to respond to a request for consent within three (3) Business Days after receipt provisions of such requestSection 9.1.2, such consent shall be deemed given.
(d) Seller shall have the right and obligationright, without giving notice to or receiving the consent of Purchaser, to make and accept cancellations of Bookings in the ordinary course of business business;
9.1.5 Except as set forth in Section 10.1, Seller will execute, and consistent Purchaser will cooperate in the execution of, all applications and instruments reasonably requested by Purchaser which are required in connection with the Present Standardtransfer of all transferable Permits (other than Excluded Permits) in order to transfer the benefits of such Permits to Purchaser on the Closing Date; provided, including customary discounted rates.
(e) Seller however, no such transfer shall be effective unless and until the Closing occurs. Purchaser shall be responsible for, and pay immediately upon Seller's request, all costs related to such applications and instruments. Seller, subject to the next succeeding sentence, shall use commercially reasonable efforts to preserve in force all existing Permits and to cause all those expiring on or before during the period between the date hereof and the Closing Date to be renewed prior to the Closing Date. If any such Permit (other than Excluded Permits, but inclusive of the Existing Liquor License) shall be suspended or revoked, Seller shall promptly so notify Purchaser and shall take use commercially reasonable measures efforts to cause the reinstatement of such Permit. Seller shall join in all applications for and cooperate with Purchaser in obtaining all necessary consents, permits, approvals, and licenses, and otherwise cooperate with Purchaser as may be reasonably necessary Permit without any additional limitation or condition;
9.1.6 During the seven--day period prior to facilitate the transfer of the Property to Purchaser; provided, however, that any costs, expenses or fees paid or incurred by Seller in connection therewith shall be reimbursed and credited to Seller.
(f) From and after the expiration of the Inspection Period through the Closing Date, Purchaser shall be entitled to have up to two representatives at the right Hotel, at reasonable times and under reasonable circumstances, to consult observe the operations of the Hotel, provided (a) at least 48 hours in advance, Purchaser makes arrangements with Seller and Manager with respect Hotel management regarding sending such representative(s) to the hiring, initially Hotel and (b) such representative(s) do not interfere with respect to Hotel management or employees or any replacement, of the following Hotel staff positions: (i) general manageroperations of the Hotel; (ii) director and
9.1.7 To the extent maintained by a prudent owner of human resources; (iii) director of food and beverage; (iv) chief engineer; (v) director of marketing; and (vi) comptroller/chief financial officer.
(g) comparable properties that are similarly situated to the Hotel, Seller shall will maintain in effect all policies of casualty and liability insuranceinsurance for the Hotel which are in effect as of the date hereof, or similar policies of insurance, with no less than the same limits of coverage which it now carries carried with respect to the Hotel.
(h) Seller shall not cause or permit any Fixtures and Tangible Personal Property or Operating Equipment located, installed or used in the Hotel as of the Effective Date (except Excluded Assets, if applicable) to be sold, exchanged, assigned, conveyed, leased, disposed of or removed, other than in the ordinary course of business conducted in accordance with the Present Standards or as contemplated by the Renovation Work.
(i) Seller shall provide (and shall instruct Manager to provide) copies of any written notices (i) received by Seller after the Effective Date from any governmental or quasi-governmental organizations regarding any violations of Legal Requirements, or (ii) given or received by Seller (or on behalf of Seller) after the Effective Date alleging material defaults under any material Hotel Contracts, Space Leases or Equipment Leases.
(j) Subject to Article IV and prior to the Closing, neither Purchaser nor any of Purchaser’s representatives shall communicate concerning the Property with Manager, any tenant, employee, guest or occupant of the Real Property any governmental or quasi-governmental authority, agency, commission, board or regulatory body or any party to any Hotel Contract without the prior written approval of Seller, which approval shall not be unreasonably withheld, conditioned or delayed.
(k) Between the Effective Date and the Closing Date or earlier termination of this Agreement, neither Seller, Manager, nor any of their respective Affiliates nor any of their respective members, partners, or agents (including, without limitation, any broker) shall offer, solicit or negotiate the possible direct or indirect acquisition of the Property (or any other form of transaction having a similar effect) or make any information about the Property available (for purpose of sale or refinance) to any Person other than Purchaser, its Affiliates and their respective designees, agents and/or authorized third parties. Seller agrees to direct its broker, if any, to cease the marketing of the Property. Such restrictions shall be in effect until the earlier of (i) the Closing Date, or (ii) the termination of this Agreement by either party pursuant to the terms and conditions hereof; and thereafter shall be null and void and of no further force or effect.
(l) Seller shall use commercially reasonable efforts to deliver to Purchaser prior to the Closing each of the Certificates of No Tax Due with respect to the Property and a tax certificate from the Dallas County Tax Assessor-Collector’s office pursuant to Texas Tax Code section 31.08 with respect to the Property.
(m) No later than five (5) days after the Effective Date, Seller shall send to Residences HOA and Condominium Owner the form of ORE Agreement Estoppel and Seller shall use commercially reasonable efforts (without any obligation to incur any expenses (other than attorneys’ fees)) to obtain the ORE Agreement Estoppels from the Residences HOA and Condominium Owner prior to Closing.
(n) From and after the Effective Date and continuing until completion, Seller shall use commercially reasonable and diligent efforts to complete at its sole cost and expense (i) an upgrade of the Hotel’s POS system and (ii) implementation of a chip & pin POS system at the Hotel, each in accordance with the Hotel’s 2015 Capital Improvement Plan. Such work shall be completed in a good and workmanlike manner, in compliance with all applicable Legal Requirements and as soon as reasonably possible. Upon completion of such work, Seller shall provide Purchaser reasonable evidence that such work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto. The terms of this Section 10.1(n) shall survive the Closing.
Appears in 1 contract
Actions and Operations Pending Closing. Seller agrees that at all times prior to the Closing Date, subject to the terms of the Existing Marriott Agreements and to conditions beyond Seller's reasonable control:
(a) Subject to conditions beyond Seller’s reasonable control, the The Hotel will continue to be operated and maintained substantially in the ordinary course of business substantially consistent accordance with Present Standards including, without limitation (i) maintaining the inventories of FF&E, Operating Equipment and Consumables at the Property at levels substantially consistent with Present Standards, (ii) maintaining all Fixtures and Tangible Personal Property in the same condition as it existed as of the Effective Date (reasonable wear, tear and loss excepted) and not trading, substituting or removing any Personal Property from the Hotel, except Consumables and Inventory substantially consistent with Present Standards, (iii) performing routine maintenance and repairs for the Property substantially consistent with Present Standards, (iv) renewing all material Licenses and Permits prior to their expiration, (v) maintaining all insurance policies, (vi) not making any material alterations or improvements at the Property (other than those items covered by the Renovation Work), or demolishing any of the Property subject to Section 11.1, (vii) not selling, transferring or otherwise disposing of any of the Property, other than substantially consistent with Present Standards and (viii) not removing any Property from the Hotel, other than consistent with Present Standards or as required in connection with the work covered by the Renovation Workpresent standards.
(b) Seller will not consent to any new Space Lease, or consent to any cancellation, modification or renewal of any Space Lease, without, in each instance, the prior written consent of Purchaser, which Purchaser shall be responsible for not unreasonably withhold, condition or delay. After the payment in full and completion expiration of the Renovation Work, and the release of any and all mechanic’s liens related thereto. Seller shall use commercially reasonable and diligent efforts to complete the Renovation Work in a good and workmanlike manner, in compliance with all applicable Legal Requirements, in compliance with the plans and specifications reviewed by Purchaser, and as soon as reasonably possible following Closing at Seller’s sole cost and expense; provided that Seller shall endeavor to complete the Renovation Work no later than March 31, 2016 (provided that Seller shall have until July 1, 2016 to finalize and receive any lien waivers or related close-out payments with respect to the Renovation Work). In connection with the Renovation WorkDue Diligence Expiration Date, Seller shall promptly bond over or remove any and all monetary liens arising in connection thereto. In addition, Seller shall cause each contractor involved in the Renovation Work to list Purchaser and Dallas Hotel Operator, Inc. as additional insureds on any insurance required pursuant to each agreement with a contractor relating to the Renovation Work. Furthermore, Seller agrees to pursue in good faith all remedies of any nature against each contractor with respect to any matter arising from, in connection with or related to the Renovation Work. Upon completion of the Renovation Work, Seller shall provide Purchaser (y) reasonable evidence that the Renovation Work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto and (z) provide Purchaser any applicable sign-offs from Franchisor. Purchaser hereby grants a license to Seller or its agents to enter upon the Property from and after the Closing to complete the Renovation Work, provided, that all such Renovation Work shall be done in a manner to avoid any commercially unreasonable material disruption to the operation of the Hotel and in accordance with rules established by Purchaser from time to time; provided, further, that Seller shall provide Purchaser with prior written notice of any material disruption to the operation of the Hotel such that Purchaser can work with Seller to minimize such disruption. In connection with the Seller’s obligations under this Section 10.1(b), Seller shall establish at Closing an escrow holdback reserve pursuant to an escrow agreement by and among Seller, Purchaser and Purchaser’s lender (“Lender”), in an amount equal to the anticipated cost to complete the Renovation Work (as agreed upon by Purchaser and Seller in their respective good faith discretion) (the “Anticipated Completion Cost”), plus a contingency amount equal to fifteen percent (15%) of the Anticipated Completion Cost (collectively, the “Renovation Reserve Funds”). The Renovation Reserve Funds shall be held back from the Purchase Price payable to Seller at Closing and shall be deposited with Lender at Closing. In the event that after the Closing Seller fails to complete the Renovation Work in the manner required under this Section 10.1(b) and such failure continues for a period of thirty (30) days following written notice from Purchaser with respect thereto (and is not the result of any force majeure event of which Seller has provided Purchaser with written notice within a reasonable period of time after the onset thereof), then, upon written notice to Seller and Lender, Purchaser shall have the right (but not the obligation) to complete the Renovation Work itself (whether directly or through a third-party) and if Purchaser so elects, Seller shall assign any and all applicable contracts to Purchaser (or its designee) and Purchaser shall use funds from the Renovation Reserve Funds to complete the Renovation Work. The Renovation Reserve Funds shall be released in accordance with the terms of the escrow agreement, which the parties shall negotiate in good faith prior to the Closing Date; provided, however, the conditions of such release shall be limited to Seller’s delivery of (i) reasonable evidence that the parties performing such Renovation Work shall have no liens or claims of liens upon payment, (ii) invoices or other satisfactory evidence of the costs incurred and (iii) such other reasonable requirements of Lender, as agreed upon by Seller in its reasonable discretion. In the event the Renovation Reserve Funds are insufficient to complete the Renovation Work, Seller shall immediately pay directly to the applicable contractor or reimburse Purchaser for any and all costs and expenses actually incurred by Purchaser in excess of the Renovation Reserve Funds; provided, however, Seller shall not cover any increased cost of the Renovation Work resulting from any changes in scope or other modifications to the Renovation Work approved or implemented by Purchaser that are not contemplated by the original contracts and subcontracts for such Renovation Work. In the event any Renovation Reserve Funds remain after (x) Purchaser’s receipt of reasonable evidence that the Renovation Work has been completed and paid for, (y) unconditional lien waivers have been delivered to Purchaser and (z) Seller has provided Purchaser any applicable sign-offs from Franchisor and satisfied such other reasonable requirements of Lender, Lender shall disburse such funds to Seller. Notwithstanding anything herein to the contrary, if Lender has not disbursed any required portion of the Renovation Reserve Fund (either interim draws or the balance of the funds after the Renovation Work has been completed) after the applicable requirements set forth in this Section 10.1 have been met (other than requirements not relating to the Renovation Work that can only be met by Purchaser as borrower), within thirty (30) days after receipt of a valid request from Seller, Seller may request such funds from Purchaser. After such request, and provided Lender has not made a disbursement to Seller, Purchaser shall pay to Seller the amount of such funds and Purchaser shall be entitled to reimbursement therefor from the Renovation Reserve Funds. Notwithstanding anything to the contrary set forth in this Agreement, Seller’s obligations under this Section 10.1(b) shall in no way be limited or reduced by Section 5.3 (i.e., the Cap, Deductible and/or Survival Periods shall not apply). The terms of this Section 10.1(b) shall survive the Closing.
(c) From and after the end of the Inspection Period, Seller shall will not enter into any new Hotel Contract or Space Lease, or cancel, modify or renew any (as opposed to the renewal of an existing Hotel Contract or Space Lease that Contract) which is not cancelable upon thirty (30) or less days’ terminable on not more than 60 days prior notice and without payment of any penalty or termination feepenalty, without without, in each instance, the prior written consent of Purchaser, in its sole and good faith discretion; provided, however, that Purchaser’s prior consent shall not be required for Seller to enter into Hotel Contracts with third parties as required to complete the Renovation Work so long as the same are upon commercially reasonable and arm’s length terms and conditions. If Purchaser fails to respond to a request for consent within three ten (310) Business Days days after receipt of such request, such consent shall be deemed given.
(dc) Seller shall have the right and obligationright, without notice to or consent of Purchaser, to make Bookings in the ordinary course of business and consistent with business, at no less than the Present StandardHotel's standard rates, including customary discounted rates.
(ed) Seller shall use commercially reasonable efforts to preserve in force all existing Permits and to cause all those expiring on or before the Closing Date to be renewed prior to the Closing Date. If any such Permit shall be suspended or revoked, Seller shall promptly notify Purchaser and shall take all commercially reasonable measures necessary to cause the reinstatement of such Permit. Seller shall join in all applications for and cooperate with Purchaser in obtaining all necessary consents, permits, approvals, and licenses, and otherwise cooperate with Purchaser as may be reasonably necessary to facilitate the transfer of the Property to Purchaser; provided, however, that any costs, expenses or fees paid or incurred by Seller in connection therewith shall be reimbursed and credited to Seller.
(f) From and after the expiration of the Inspection Period through the Closing Date, Purchaser shall have the right to consult with Seller and Manager with respect to the hiring, initially and with respect to any replacement, of the following Hotel staff positions: (i) general manager; (ii) director of human resources; (iii) director of food and beverage; (iv) chief engineer; (v) director of marketing; and (vi) comptroller/chief financial officer.
(ge) Seller shall will maintain in effect until the Closing all policies of casualty and liability insurance, or similar policies of insurance, with the same limits of coverage which it now carries with respect to the Hotel.
(hf) Seller shall will not cause enter into or permit any Fixtures and Tangible Personal Property or Operating Equipment located, installed or used in the Hotel as of the Effective Date (except Excluded Assets, if applicable) to be sold, exchanged, assigned, conveyed, leased, disposed of or removed, other than in the ordinary course of business conducted in accordance with the Present Standards or as contemplated by the Renovation Work.
(i) Seller shall provide (and shall instruct Manager to provide) copies of any written notices (i) received by Seller after the Effective Date from any governmental or quasi-governmental organizations regarding any violations of Legal Requirements, or (ii) given or received by Seller (or on behalf of Seller) after the Effective Date alleging material defaults under any material Hotel Contracts, Space Leases or Equipment Leases.
(j) Subject to Article IV and prior to the Closing, neither Purchaser nor any of Purchaser’s representatives shall communicate concerning the Property with Manager, any tenant, employee, guest or occupant of the Real Property any governmental or quasi-governmental authority, agency, commission, board or regulatory body or any party consent to any Hotel Contract union contracts or collective bargaining agreements without the prior written approval consent of SellerPurchaser, which approval shall not to be unreasonably withheld, conditioned or delayed.
(k) Between the Effective Date and the Closing Date or earlier termination of this Agreement, neither Seller, Manager, nor any of their respective Affiliates nor any of their respective members, partners, or agents (including, without limitation, any broker) shall offer, solicit or negotiate the possible direct or indirect acquisition of the Property (or any other form of transaction having a similar effect) or make any information about the Property available (for purpose of sale or refinance) to any Person other than Purchaser, its Affiliates and their respective designees, agents and/or authorized third parties. Seller agrees to direct its broker, if any, to cease the marketing of the Property. Such restrictions shall be in effect until the earlier of (i) the Closing Date, or (ii) the termination of this Agreement by either party pursuant to the terms and conditions hereof; and thereafter shall be null and void and of no further force or effect.
(l) Seller shall use commercially reasonable efforts to deliver to Purchaser prior to the Closing each of the Certificates of No Tax Due with respect to the Property and a tax certificate from the Dallas County Tax Assessor-Collector’s office pursuant to Texas Tax Code section 31.08 with respect to the Property.
(m) No later than five (5) days after the Effective Date, Seller shall send to Residences HOA and Condominium Owner the form of ORE Agreement Estoppel and Seller shall use commercially reasonable efforts (without any obligation to incur any expenses (other than attorneys’ fees)) to obtain the ORE Agreement Estoppels from the Residences HOA and Condominium Owner prior to Closing.
(n) From and after the Effective Date and continuing until completion, Seller shall use commercially reasonable and diligent efforts to complete at its sole cost and expense (i) an upgrade of the Hotel’s POS system and (ii) implementation of a chip & pin POS system at the Hotel, each in accordance with the Hotel’s 2015 Capital Improvement Plan. Such work shall be completed in a good and workmanlike manner, in compliance with all applicable Legal Requirements and as soon as reasonably possible. Upon completion of such work, Seller shall provide Purchaser reasonable evidence that such work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto. The terms of this Section 10.1(n) shall survive the Closing.
Appears in 1 contract
Sources: Agreement for Sale and Purchase of Hotel (Strategic Hotel Capital Inc)
Actions and Operations Pending Closing. Seller agrees that at all times prior to the Closing Date:
(a) Subject to conditions beyond Seller’s reasonable control, the Hotel will continue to be operated and maintained in the ordinary course of business substantially consistent with Present Standards including, without limitation (i) maintaining the inventories of FF&E, Operating Equipment and Consumables at the Property at levels substantially consistent with Present Standards, (ii) maintaining all Fixtures and Tangible Personal Property in the same condition as it existed as of the Effective Date (reasonable wear, tear and loss excepted) and not trading, substituting or removing any Personal Property from the Hotel, except Consumables and Inventory substantially consistent with Present Standards, (iii) performing routine maintenance and repairs for the Property substantially consistent with Present Standards, (iv) renewing all material Licenses and Permits prior to their expiration, (v) maintaining all insurance policies, (vi) not making any material alterations or improvements at the Property (other than those items covered by the Renovation PIP Work), or demolishing any of the Property subject to Section 11.1, (vii) not selling, transferring or otherwise disposing of any of the Property, other than substantially consistent with Present Standards and (viii) not removing any Property from the Hotel, other than consistent with Present Standards or as required in connection with the work covered by the Renovation PIP Work.
(b) Seller shall be responsible for the payment in full and completion of the Renovation PIP Work and the Chiller Work, and the release of any and all mechanic’s liens related thereto, at or prior to Closing. Seller shall use commercially reasonable efforts to complete the PIP Work and the Chiller Work lien free prior to Closing and provide Purchaser with (x) reasonable evidence that the PIP Work and the Chiller Work has been completed and paid for, (y) unconditional interim lien waivers with respect to any completed PIP Work or Chiller Work from the applicable contractors and subcontractors, and (z) if, and only if, possible given the amount of PIP Work completed, any applicable sign-offs from Franchisor as to such completed PIP Work; provided, however, if despite Seller’s commercially reasonable efforts, the PIP Work or Chiller Work is not completed in accordance with the foregoing clauses (x)-(z) (if applicable) on or prior to Closing, Seller shall not be in default under this Agreement and such completion shall not be a condition to Purchaser’s obligation to proceed to Closing, but Seller shall be unconditionally and irrevocably obligated to use commercially reasonable and diligent efforts to complete the Renovation Work in a good and workmanlike manner, in compliance with all applicable Legal Requirements, in compliance with the plans and specifications reviewed by Purchaser, and work as soon as reasonably possible following Closing at Seller’s its sole cost and expense; , provided that Seller shall endeavor to complete the Renovation PIP Work no later than March 31, 2016 and Chiller Work within forty-five (45) days after the Closing (provided that Seller shall have until July 1, 2016 2015 to finalize and receive any lien waivers or related close-out payments with respect to the Renovation PIP Work). In connection with Notwithstanding the Renovation Workforegoing, Seller shall promptly bond over or remove any and all monetary liens arising in connection thereto. In addition, Seller shall cause each contractor involved in the Renovation Work to list Purchaser and Dallas Hotel Operator, Inc. must obtain sign-off from Franchisor as additional insureds on any insurance required pursuant to each agreement with a contractor relating to the Renovation Work. Furthermore, Seller agrees to pursue in good faith all remedies of any nature against each contractor with respect to any matter arising from, in connection with or related to the Renovation Work. Upon completion first phase of the Renovation WorkProperty Improvement Plan issued on April 3, Seller shall provide Purchaser (y) reasonable evidence that the Renovation Work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto and (z) provide Purchaser any applicable sign-offs from Franchisor. Purchaser hereby grants a license to Seller or its agents to enter upon the Property from and after the Closing 2014 in order to complete the Renovation PIP Work, provided, that all such Renovation Work shall be done in a manner to avoid any commercially unreasonable material disruption to the operation of the Hotel and in accordance with rules established by Purchaser from time to time; provided, further, that Seller shall provide Purchaser with prior written notice of any material disruption to the operation of the Hotel such that Purchaser can work with Seller to minimize such disruption. In connection with the Seller’s obligations under this Section 10.1(b), Seller shall establish at Closing an escrow holdback reserve pursuant to an escrow agreement by and among Seller, Purchaser and Purchaser’s lender (“Lender”), in an amount equal to the anticipated cost to complete the Renovation Work (as agreed upon by Purchaser and Seller in their respective good faith discretion) (the “Anticipated Completion Cost”), plus a contingency amount equal to fifteen percent (15%) of the Anticipated Completion Cost (collectively, the “Renovation Reserve Funds”). The Renovation Reserve Funds shall be held back from the Purchase Price payable to Seller at Closing and shall be deposited with Lender at Closing. In the event that after the Closing Seller fails to complete the Renovation PIP Work or the Chiller Work in the manner required under this Section 10.1(b) (including by the time period above) and such failure continues for a period of thirty (30) days following written notice from Purchaser with respect thereto (and is not the result of any force majeure event of which Seller has provided Purchaser with written notice within a reasonable period of time after the onset thereofbeyond Seller’s control), then, upon written notice to Seller and LenderSeller, Purchaser shall have the right (but not the obligation) to complete the Renovation Work itself (whether directly or through a thirdexercise self-party) help remedies and if Purchaser so electselects such self-help remedy, Seller shall assign any and all applicable contracts to Purchaser (or its designee) and Purchaser shall use funds from the Renovation Reserve Funds to complete the Renovation Work. The Renovation Reserve Funds shall be released in accordance with the terms of the escrow agreement, which the parties shall negotiate in good faith prior to the Closing Date; provided, however, the conditions of such release shall be limited to Seller’s delivery of (i) reasonable evidence that the parties performing such Renovation Work shall have no liens or claims of liens upon payment, (ii) invoices or other satisfactory evidence of the costs incurred and (iii) such other reasonable requirements of Lender, as agreed upon by Seller in its reasonable discretion. In the event the Renovation Reserve Funds are insufficient to complete the Renovation Work, Seller shall immediately pay directly to the applicable contractor or reimburse Purchaser for any and all costs and expenses actually incurred by Purchaser in excess of the Renovation Reserve Fundswhich were due and payable under such assigned contracts or as otherwise necessary to satisfy Seller’s obligations under this Section 10.1(b); provided, however, Seller shall not cover any increased cost of the Renovation PIP Work or the Chiller Work resulting from any changes in scope or other modifications to the Renovation PIP Work or Chiller Work approved or implemented by Purchaser that are not required by Franchisor as part of the first phase of the property improvement plan issued on April 3, 2014 or as contemplated by the original contracts and subcontracts for such Renovation PIP Work or Chiller Work. In the event any Renovation Reserve Funds remain after (x) Purchaser’s receipt of reasonable evidence that the Renovation Work has been completed and paid for, (y) unconditional lien waivers have been delivered to Purchaser and (z) Seller has provided Purchaser any applicable sign-offs from Franchisor and satisfied such other reasonable requirements of Lender, Lender shall disburse such funds to Seller. Notwithstanding anything herein to the contrary, if Lender has not disbursed any required portion of the Renovation Reserve Fund (either interim draws or the balance of the funds after the Renovation Work has been completed) after the applicable requirements set forth in this Section 10.1 have been met (other than requirements not relating to the Renovation Work that can only be met by Purchaser as borrower), within thirty (30) days after receipt of a valid request from Seller, Seller may request such funds from Purchaser. After such request, and provided Lender has not made a disbursement to Seller, Purchaser shall pay to Seller the amount of such funds and Purchaser shall be entitled to reimbursement therefor from the Renovation Reserve Funds. Notwithstanding anything to the contrary set forth in this Agreement, Seller’s obligations under this Section 10.1(b) shall in no way be limited or reduced by Section 5.3 (i.e., the Cap, Deductible and/or Survival Periods shall not apply). The terms of Seller’s obligations under this Section 10.1(b) shall survive the Closing.
(c) From and after the end of the Inspection Period, Seller shall not enter into any new Hotel Contract or Space Lease, or cancel, modify or renew any existing Hotel Contract or Space Lease that is not cancelable upon thirty (30) or less days’ notice and without payment of any penalty or termination fee, without the prior written consent of Purchaser, in its sole and good faith discretion; provided, however, that Purchaser’s prior consent shall not be required for Seller to enter into Hotel Contracts with third parties as required to complete the Renovation PIP Work so long as the same are upon commercially reasonable and arm’s arms-length terms and conditions. If Purchaser fails to respond to a request for consent within three (3) Business Days after receipt of such request, such consent shall be deemed given.
(d) Seller shall have the right and obligation, without notice to or consent of Purchaser, to make Bookings in the ordinary course of business and consistent with the Present Standard, including customary discounted rates.
(e) Seller shall use commercially reasonable efforts to preserve in force all existing Permits and to cause all those expiring on or before the Closing Date to be renewed prior to the Closing Date. If any such Permit shall be suspended or revoked, Seller shall promptly notify Purchaser and shall take commercially reasonable measures to cause the reinstatement of such Permit. Seller shall join in all applications for and cooperate with Purchaser in obtaining all necessary consents, permits, approvals, and licenses, and otherwise cooperate with Purchaser as may be reasonably necessary to facilitate the transfer of the Property to Purchaser; provided, however, that any costs, expenses or fees paid or incurred by Seller in connection therewith shall be reimbursed and credited to Seller.
(f) From and after the expiration of the Inspection Period through the Closing Date, Purchaser shall have the right to consult with Seller and Manager with respect to the hiring, initially and with respect to any replacement, of the following Hotel staff positions: (i) general manager; (ii) director of human resources; (iii) director of food and beverage; (iv) chief engineer; (v) director of marketing; and (vi) comptroller/chief financial officer.
(g) Seller shall maintain in effect all policies of casualty and liability insurance, or similar policies of insurance, with the same limits of coverage which it now carries with respect to the Hotel.
(h) Seller shall not cause or permit any Fixtures and Tangible Personal Property or Operating Equipment located, installed or used in the Hotel as of the Effective Date (except Excluded Assets, if applicable) to be sold, exchanged, assigned, conveyed, leased, disposed of or removed, other than in the ordinary course of business conducted in accordance with the Present Standards or as contemplated by the Renovation PIP Work.
(i) Seller shall provide (and shall instruct Manager to provide) copies of any written notices (i) received by Seller after the Effective Date from any governmental or quasi-governmental organizations regarding any violations of Legal Requirements, or (ii) given or received by Seller (or on behalf of Seller) after the Effective Date alleging material defaults under any material Hotel Contracts, Space Leases or Equipment Leases.
(j) Subject to Article IV and prior to the Closing, neither Purchaser nor any of Purchaser’s representatives shall communicate concerning the Property with Manager, any tenant, employee, guest or occupant of the Real Property any governmental or quasi-governmental authority, agency, commission, board or regulatory body or any party to any Hotel Contract without the prior written approval of Seller, which approval shall not be unreasonably withheld, conditioned or delayed.
(k) Between the Effective Date and the Closing Date or earlier termination of this Agreement, neither Seller, Manager, nor any of their respective Affiliates nor any of their respective members, partners, or agents (including, without limitation, any broker) shall offer, solicit or negotiate the possible direct or indirect acquisition of the Property (or any other form of transaction having a similar effect) or make any information about the Property available (for purpose of sale or refinance) to any Person other than Purchaser, its Affiliates and their respective designees, agents and/or authorized third parties. Seller agrees to direct its broker, if any, to cease the marketing of the Property. Such restrictions shall be in effect until the earlier of (i) the Closing Date, or (ii) the termination of this Agreement by either party pursuant to the terms and conditions hereof; and thereafter shall be null and void and of no further force or effect.
(l) Seller shall use commercially reasonable efforts to deliver to Purchaser prior to the Closing each of the Certificates of No Tax Due with respect to the Property and a tax certificate from the Dallas County Tax Assessor-Collector’s office pursuant to Texas Tax Code section 31.08 with respect to the Property.
(m) No later than five (5) days after the Effective Date, Seller shall send to Residences HOA and Condominium Owner the form of ORE Agreement Estoppel and Seller shall use commercially reasonable efforts (without any obligation to incur any expenses (other than attorneys’ fees)) to obtain the ORE Agreement Estoppels from the Residences HOA and Condominium Owner prior to Closing.
(n) From and after the Effective Date and continuing until completion, Seller shall use commercially reasonable and diligent efforts to complete at its sole cost and expense (i) an upgrade of the Hotel’s POS system and (ii) implementation of a chip & pin POS system at the Hotel, each in accordance with the Hotel’s 2015 Capital Improvement Plan. Such work shall be completed in a good and workmanlike manner, in compliance with all applicable Legal Requirements and as soon as reasonably possible. Upon completion of such work, Seller shall provide Purchaser reasonable evidence that such work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto. The terms of this Section 10.1(n) shall survive the Closing.
Appears in 1 contract
Sources: Agreement for Sale and Purchase of Hotel (Carey Watermark Investors Inc)
Actions and Operations Pending Closing. Seller agrees that at all times prior to the Closing Date:
(a) Subject to conditions beyond Seller’s reasonable control, the Hotel will continue to be operated and maintained in the ordinary course of business substantially consistent with Present Standards including, without limitation (i) maintaining the inventories of FF&E, Operating Equipment and Consumables at the Property at levels substantially consistent with Present Standards, (ii) maintaining all Fixtures and Tangible Personal Property in the same condition as it existed as of the Effective Date (reasonable wear, tear and loss excepted) and not trading, substituting or removing any Personal Property from the Hotel, except Consumables and Inventory substantially consistent with Present Standards, (iii) performing routine maintenance and repairs for the Property substantially consistent with Present Standards, (iv) renewing all material Licenses and Permits prior to their expiration, (v) maintaining all insurance policies, (vi) not making any material alterations or improvements at the Property (other than those items covered by the Renovation Work)Property, or demolishing any of the Property subject to Section 11.1, (vii) not selling, transferring or otherwise disposing of any of the Property, other than substantially consistent with Present Standards and (viii) not removing any Property from the Hotel, other than consistent with Present Standards or as required in connection with the work covered by the Renovation WorkStandards.
(b) Seller shall be responsible for the payment in full and completion of the Renovation Work, and the release of any and all mechanic’s liens related thereto. Seller shall use commercially reasonable and diligent efforts to complete the Renovation Work in a good and workmanlike manner, in compliance with all applicable Legal Requirements, in compliance with the plans and specifications reviewed by Purchaser, and as soon as reasonably possible following Closing at Seller’s sole cost and expense; provided that Seller shall endeavor to complete the Renovation Work no later than March 31, 2016 (provided that Seller shall have until July 1, 2016 to finalize and receive any lien waivers or related close-out payments with respect to the Renovation Work). In connection with the Renovation Work, Seller shall promptly bond over or remove any and all monetary liens arising in connection thereto. In addition, Seller shall cause each contractor involved in the Renovation Work to list Purchaser and Dallas Hotel Operator, Inc. as additional insureds on any insurance required pursuant to each agreement with a contractor relating to the Renovation Work. Furthermore, Seller agrees to pursue in good faith all remedies of any nature against each contractor with respect to any matter arising from, in connection with or related to the Renovation Work. Upon completion of the Renovation Work, Seller shall provide Purchaser (y) reasonable evidence that the Renovation Work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto and (z) provide Purchaser any applicable sign-offs from Franchisor. Purchaser hereby grants a license to Seller or its agents to enter upon the Property from and after the Closing to complete the Renovation Work, provided, that all such Renovation Work shall be done in a manner to avoid any commercially unreasonable material disruption to the operation of the Hotel and in accordance with rules established by Purchaser from time to time; provided, further, that Seller shall provide Purchaser with prior written notice of any material disruption to the operation of the Hotel such that Purchaser can work with Seller to minimize such disruption. In connection with the Seller’s obligations under this Section 10.1(b), Seller shall establish at Closing an escrow holdback reserve pursuant to an escrow agreement by and among Seller, Purchaser and Purchaser’s lender (“Lender”), in an amount equal to the anticipated cost to complete the Renovation Work (as agreed upon by Purchaser and Seller in their respective good faith discretion) (the “Anticipated Completion Cost”), plus a contingency amount equal to fifteen percent (15%) of the Anticipated Completion Cost (collectively, the “Renovation Reserve Funds”). The Renovation Reserve Funds shall be held back from the Purchase Price payable to Seller at Closing and shall be deposited with Lender at Closing. In the event that after the Closing Seller fails to complete the Renovation Work in the manner required under this Section 10.1(b) and such failure continues for a period of thirty (30) days following written notice from Purchaser with respect thereto (and is not the result of any force majeure event of which Seller has provided Purchaser with written notice within a reasonable period of time after the onset thereof), then, upon written notice to Seller and Lender, Purchaser shall have the right (but not the obligation) to complete the Renovation Work itself (whether directly or through a third-party) and if Purchaser so elects, Seller shall assign any and all applicable contracts to Purchaser (or its designee) and Purchaser shall use funds from the Renovation Reserve Funds to complete the Renovation Work. The Renovation Reserve Funds shall be released in accordance with the terms of the escrow agreement, which the parties shall negotiate in good faith prior to the Closing Date; provided, however, the conditions of such release shall be limited to Seller’s delivery of (i) reasonable evidence that the parties performing such Renovation Work shall have no liens or claims of liens upon payment, (ii) invoices or other satisfactory evidence of the costs incurred and (iii) such other reasonable requirements of Lender, as agreed upon by Seller in its reasonable discretion. In the event the Renovation Reserve Funds are insufficient to complete the Renovation Work, Seller shall immediately pay directly to the applicable contractor or reimburse Purchaser for any and all costs and expenses actually incurred by Purchaser in excess of the Renovation Reserve Funds; provided, however, Seller shall not cover any increased cost of the Renovation Work resulting from any changes in scope or other modifications to the Renovation Work approved or implemented by Purchaser that are not contemplated by the original contracts and subcontracts for such Renovation Work. In the event any Renovation Reserve Funds remain after (x) Purchaser’s receipt of reasonable evidence that the Renovation Work has been completed and paid for, (y) unconditional lien waivers have been delivered to Purchaser and (z) Seller has provided Purchaser any applicable sign-offs from Franchisor and satisfied such other reasonable requirements of Lender, Lender shall disburse such funds to Seller. Notwithstanding anything herein to the contrary, if Lender has not disbursed any required portion of the Renovation Reserve Fund (either interim draws or the balance of the funds after the Renovation Work has been completed) after the applicable requirements set forth in this Section 10.1 have been met (other than requirements not relating to the Renovation Work that can only be met by Purchaser as borrower), within thirty (30) days after receipt of a valid request from Seller, Seller may request such funds from Purchaser. After such request, and provided Lender has not made a disbursement to Seller, Purchaser shall pay to Seller the amount of such funds and Purchaser shall be entitled to reimbursement therefor from the Renovation Reserve Funds. Notwithstanding anything to the contrary set forth in this Agreement, Seller’s obligations under this Section 10.1(b) shall in no way be limited or reduced by Section 5.3 (i.e., the Cap, Deductible and/or Survival Periods shall not apply). The terms of this Section 10.1(b) shall survive the Closing.
(c) From and after the end of the Inspection Period, and except as expressly permitted pursuant to and in accordance with Section 4.12 or this Article X, Seller shall not enter into any new Hotel Contract or Space Lease, or cancel, modify or renew any existing Hotel Contract or Space Lease that is not cancelable upon thirty (30) or less days’ notice and without payment of any penalty or termination fee, without the prior written consent of Purchaser, in its sole and good faith discretion; provided, however, that Purchaser’s prior consent shall not be required for Seller to enter into Hotel Contracts with third parties as required to complete the Renovation Work so long as the same are upon commercially reasonable and arm’s length terms and conditions. If Purchaser fails to respond to a request for consent within three (3) Business Days after receipt of such request, such consent shall be deemed given.
(dc) Seller shall have the right and obligation, without notice to or consent of Purchaser, to make Bookings in the ordinary course of business and consistent with the Present Standard, including customary discounted rates.
(ed) Seller shall use commercially reasonable efforts to preserve in force all existing Permits and to cause all those expiring on or before the Closing Date to be renewed prior to the Closing Date. If any such Permit shall be suspended or revoked, Seller shall promptly notify Purchaser and shall take commercially reasonable measures to cause the reinstatement of such Permit. Seller shall join in all applications for and cooperate with Purchaser in obtaining all necessary consents, permits, approvals, and licenses, and otherwise cooperate with Purchaser as may be reasonably necessary to facilitate the transfer of the Property to Purchaser; provided, however, that any costs, expenses or fees paid or incurred by Seller in connection therewith shall be reimbursed and credited to Seller.
(fe) From and after the expiration of the Inspection Period through the Closing Date, Purchaser shall have the right to consult with Seller and Manager with respect to the hiring, initially and with respect to any replacement, of the following Hotel staff positions: (i) general manager; (ii) director of human resources; (iii) director of food and beverage; (iv) chief engineer; (v) director of marketing; and (vi) comptroller/chief financial officer.
(gf) Seller shall maintain in effect all policies of casualty and liability insurance, or similar policies of insurance, with the same limits of coverage which it now carries with respect to the Hotel.
(hg) Seller shall not cause or permit any Fixtures and Tangible Personal Property or Operating Equipment located, installed or used in the Hotel as of the Effective Date (except Excluded Assets, if applicable) to be sold, exchanged, assigned, conveyed, leased, disposed of or removed, other than in the ordinary course of business conducted in accordance with the Present Standards or as contemplated by the Renovation WorkStandards.
(ih) Seller shall provide (and shall instruct Manager to provide) copies of any written notices (i) received by Seller after the Effective Date from any governmental or quasi-governmental organizations regarding any violations of Legal Requirements, or (ii) given or received by Seller (or on behalf of Seller) after the Effective Date alleging material defaults under any material Hotel Contracts, Space Leases or Equipment Leases.
(ji) Subject to Article IV and prior to the Closing, neither Purchaser nor any of Purchaser’s representatives shall communicate concerning the Property with Manager, any tenant, employee, guest or occupant of the Real Property any governmental or quasi-governmental authority, agency, commission, board or regulatory body or any party to any Hotel Contract without the prior written approval of Seller, which approval shall not be unreasonably withheld, conditioned or delayed.
(kj) Between the Effective Date and the Closing Date or earlier termination of this Agreement, neither Seller, Manager, nor any of their respective Affiliates nor any of their respective members, partners, or agents (including, without limitation, any broker) shall offer, solicit or negotiate the possible direct or indirect acquisition of the Property (or any other form of transaction having a similar effect) or make any information about the Property available (for purpose of sale or refinance) to any Person other than Purchaser, its Affiliates and their respective designees, agents and/or authorized third parties. Seller agrees to direct its broker, if any, to cease the marketing of the Property. Such restrictions shall be in effect until the earlier of (i) the Closing Date, or (ii) the termination of this Agreement by either party pursuant to the terms and conditions hereof; and thereafter shall be null and void and of no further force or effect.
(lk) Seller shall use commercially reasonable efforts to deliver to Purchaser prior to the Closing each of the Certificates Statements of No Tax Due with respect to the Property and a tax certificate from the Dallas County Tax Assessor-Collector’s office pursuant to Texas Tax Code section 31.08 with respect to the PropertyHotel.
(ml) No later than five (5) days after the Effective Date, Seller shall send to Residences HOA and Condominium Owner the form of ORE Agreement Estoppel and Seller shall use commercially reasonable efforts to complete the Act 250 Master Plan application process with the appropriate governmental authorities.
(without any obligation m) Seller shall use commercially reasonable efforts to incur any expenses deliver in advance of the Closing Date written notice of the proposed sale of the Hotel to Purchaser as follows: (other than attorneys’ fees)i) with respect to obtain the ORE VLT Agreement, to Vermont Land Trust, Inc.; and (ii) with respect to the Conservation Agreement, to The Nature Conservatory at least thirty (30) days in advance of Closing, in each case, as required pursuant to and in accordance with the terms of the VLT Agreement Estoppels from the Residences HOA and Condominium Owner prior to ClosingConservation Agreement, as applicable.
(n) From and after the Effective Date and continuing until completion, Seller shall use commercially reasonable and diligent efforts to complete obtain closure from the Vermont Department of Environmental Conservation of that certain Recognized Environmental Condition (AST Release) as set forth in that certain Phase I Environmental Site Assessment prepared by RPS GaiaTech and dated September, 2015 (the “Recognized Condition”) and to perform any additional monitoring and/or reporting required thereunder; provided, however, that in the event that, despite Seller’s commercially reasonably efforts, such closure of the Recognized Condition is not completed on or prior to Closing, Seller covenants and agrees to continue using its commercially reasonable efforts (at its sole cost and expense (icost) an upgrade to complete the closure of the Hotel’s POS system Recognized Condition from and after the Closing with completing the same and to perform any additional monitoring and/or reporting required thereunder. This clause (ii) implementation of a chip & pin POS system at the Hotel, each in accordance with the Hotel’s 2015 Capital Improvement Plan. Such work shall be completed in a good and workmanlike manner, in compliance with all applicable Legal Requirements and as soon as reasonably possible. Upon completion of such work, Seller shall provide Purchaser reasonable evidence that such work has been completed and paid for and there are no mechanic’s or materialmen’s liens or claims of liens related thereto. The terms of this Section 10.1(nn) shall survive the ClosingClosing for a period of one year.
Appears in 1 contract
Sources: Agreement for Sale and Purchase of Hotel (Carey Watermark Investors Inc)