Common use of Exceptions to Title Clause in Contracts

Exceptions to Title. (a) Attached as Exhibit “D” is CWI’s final form of pro forma title insurance policy, incorporating the data described in the survey, and including all endorsements thereto and all other insurance provisions as mutually agreed upon between CWI and the Title Company (the “Pro Forma Title Policy”), which is satisfactory to CWI in all respects. CWI acknowledges and agrees that the (i) liens, encumbrances or other exceptions to title set forth in the Pro Forma Title Policy (the “Title Exceptions”), (ii) all encroachments by improvements from adjoining properties onto or over the Land, any encroachments of the Improvements onto or over adjoining properties, setback lines, rights-of-way or easements (to the extent in violation thereof) or other survey defects (the “Survey Defects”) set forth on the Pro Forma Title Policy, and (iii) all matters shown in the Survey shall collectively constitute “Permitted Exceptions” to title to the Land (the “Permitted Exceptions”). (b) If any update of the Title Commitment delivered to CWI after the Effective Date discloses any new Title Exception which was not disclosed in the Pro Forma Title Policy (a “New Title Exception”), or any update of the Survey delivered to CWI after the Effective Date discloses any new Survey Defect which was not disclosed in the Survey delivered to CWI prior to the Effective Date (a “New Survey Defect” and together with any New Title Exception, the “Unpermitted Exceptions”), and such New Title Exception or New Survey Defect was not caused by CWI, then CWI shall have the right to request WPPI to remove or cure such New Title Exception or New Survey Defect at or prior to Closing by providing written notice to WPPI promptly after determining (in CWI’s sole but reasonable discretion) that such New Title Exception or New Survey Defect is not acceptable to CWI (the “New Title and Survey Objection Notice”). The terms New Title Exception and New Survey Defect shall not include (i) exceptions or defects that do not impair the marketability of title to the Real Property, (ii) easements or agreements with a benefit to the operation of the Hotel, such as utility and reciprocal parking easements or (iii) easements or agreements which WPPI became legally obligated to execute prior to the Effective Date and ultimately placed of record, such as the Tunnel Easements (collectively, the “Acceptable Matters”); provided, however, that the Acceptable Matters shall expressly exclude any liens of record encumbering the marketability of title arising as the result of or in connection with the ▇▇▇▇▇ dispute, the Construction Contract and/or the Architect Agreement. Notwithstanding anything in this Agreement to the contrary (including, without limitation, the terms of Section 2.8.3(c)), WPPI agrees that the following shall in all events constitute Unpermitted Exceptions which shall be removed from title by WPPI (the failure or refusal of which by WPPI at or prior to Closing shall constitute a default by WPPI hereunder): (i) any mechanics liens or judgments arising therefrom relating to Seller’s construction and/or development of the Hotel unless discharged by Closing pursuant to the posting of a bond or bonds in accordance with RCW 60.04.161, and (ii) subject to prorations, ad valorem real property taxes which constitute Title Exceptions which would be delinquent if unpaid at Closing, and if any such taxes are payable in installments, such obligation shall apply to all such installments which would be payable prior to or at Closing. (c) Subject to Section 2.8.3(b) above, if CWI provides a New Title and Survey Objection Notice to WPPI, WPPI may elect, by providing written notice (the “New Title and Survey Election Notice”) to CWI within the earlier of (i) five (5) business days after WPPI’s receipt of such New Title and Survey Objection Notice or (ii) the Closing, to (A) accept such New Title Exception or New Survey Defect as an additional Unpermitted Exception to be removed at or prior to Closing, or (B) refuse to remove or cure such New Title Exception or New Survey Defect; provided, however, that if (1) WPPI or any Person on behalf of WPPI caused such New Title Exception or New Survey Defect, or (2) such New Title Exception or New Survey Defect, whether or not caused by WPPI, may be removed by the payment of liquidated amounts not in excess of $100,000 or the posting of a statutory bond with collateral not in excess of $150,000, then in each such instance, such New Title Exception or New Survey Defect shall constitute an Unpermitted Exception and WPPI shall be obligated to remove or cure such New Title Exception or New Survey Defect at or prior to Closing (the failure or refusal of which by WPPI at or prior to Closing shall constitute a default by WPPI hereunder). To the extent the New Title Exception relates to a lien filed against the Property that WPPI is obligated or elects to discharge and such lien was filed against the Property within ten (10) business days of the Target Closing Date or the Outside Closing Date, as applicable, WPPI shall have the right to elect by written notice to CWI to extend the Target Closing Date or the Outside Closing Date, as applicable, ten (10) calendar days to allow WPPI the ability to remove or cure such New Title Exception. If WPPI does not provide a New Title and Survey Election Notice to CWI within such time period, then WPPI shall be deemed to have elected to accept the New Title Exception or New Survey Defect as an Unpermitted Exception pursuant to clause (A) of the preceding sentence. If WPPI elects not to remove or cure (such cure to be subject to the reasonable approval of CWI) a New Title Exception or New Survey Defect, then CWI shall have the right to elect, by providing written notice (the “New Title and Survey Response Notice”) to WPPI within the earlier of five (5) business days after CWI’s receipt of the New Title and Survey Election Notice or the Closing to: (x) terminate this Agreement whereupon this Agreement shall automatically terminate and become null and void, and of no further force and effect, the Escrow Agent shall immediately return the Good Faith Deposit to CWI and the Parties shall have no further obligations under this Agreement, except as shall expressly survive the termination hereof or (y) proceed to Closing pursuant to this Agreement and accept title to the Real Property, subject to such New Title Exception or New Survey Defect which thereafter shall be deemed to constitute a Permitted Exception. If CWI does not provide a New Title and Survey Response Notice to WPPI within such time period, CWI shall be deemed to have elected to proceed to Closing pursuant to this Agreement and accept title to the Real Property subject to such New Title Exception or New Survey Defect pursuant to clause (y) of the preceding sentence.

Exceptions to Title. (a) Attached as Exhibit “D” is CWI’s final form of pro forma title insurance policyDuring the Due Diligence Period, incorporating the data described CWI shall (i) determine, in the surveyits sole and absolute discretion, and including all endorsements thereto and all other insurance provisions as mutually agreed upon between CWI notify Seller and the Title Company in writing (the “Pro Forma Title Policyand Survey Objection Notice”), ) which is satisfactory to CWI in all respects. CWI acknowledges and agrees that the (iA) liens, encumbrances or other exceptions to title set forth in the Pro Forma Title Policy (the “Title Exceptions”), and (iiB) all encroachments by improvements from on adjoining properties onto or over the Land, any encroachments of the Improvements onto or over adjoining properties, setback lines, rights-of-way lines or easements (to the extent in violation thereof) or other survey defects (the “Survey Defects”) set forth on the Pro Forma Title Policy), and (iii) all matters shown in the Survey shall collectively constitute “Permitted Exceptions” to title to the Land (the “Permitted Exceptions”), and (ii) endeavor to obtain from the Title Company a pro forma title insurance policy, including all endorsements thereto and all other insurance provisions required by CWI in such title insurance policy (the “Pro Forma Title Policy”), or enter into a side letter agreement with Seller setting forth which Title Exceptions and Survey Defects shall constitute the Permitted Exceptions (the “Title and Survey Side Letter”). If CWI does not obtain the Pro Forma Title Policy or Title and Survey Side Letter acceptable to CWI, in its sole and absolute discretion, prior to the expiration of the Due Diligence Period (the “Title and Survey Review Period”), CWI shall have the right to terminate this Agreement in accordance with Section 2.8.1. If CWI does not obtain the Pro Forma Title Policy or Title and Survey Side Letter acceptable to CWI, in its sole and absolute discretion, prior to the expiration of the Title and Survey Review Period and does not terminate this Agreement pursuant to this Section 2.9.3(a), CWI shall be deemed to have waived all objections to any Title Exceptions disclosed in the Title Commitment and Survey Defects disclosed in the Survey, in which case such Title Exceptions and Survey Defects shall be deemed to be Permitted Exceptions. (b) To the extent that Seller and CWI enter into a Title and Survey Side Letter, all Title Exceptions and Survey Defects that Seller agrees to remove as identified in such Title and Survey Side Letter, if any, shall constitute “Unpermitted Exceptions” to title to the Real Property (the “Unpermitted Exceptions”). Seller shall remove such Unpermitted Exceptions at or prior to Closing by removing such Unpermitted Exception from title (with the parties expressly acknowledging and agreeing that Seller’s causing the Title Company to commit to insure over such Unpermitted Exception in the Title Policy shall not constitute removal unless such insuring over by the Title Company is in form and substance acceptable to CWI in its sole and absolute discretion). Notwithstanding anything in this Agreement to the contrary, Seller agrees that the following shall in all events constitute Unpermitted Exceptions which shall be removed by Seller (the failure or refusal of which by Seller at or prior to Closing shall constitute a default by Seller hereunder): (i) any judgments or mechanics or similar liens, (ii) excluding the Assumed Indebtedness if CWI elects to assume such Assumed Indebtedness pursuant to Section 2.13, any mortgages, deeds of trust or other security interests for any financing incurred by Seller, and (iii) Taxes which constitute Title Exceptions which would be delinquent if unpaid at Closing, and if any such Taxes are payable in installments, such obligation shall apply to all such installments which would be payable whether prior to or after Closing. (c) If any update of the Title Commitment delivered to CWI after the Effective Date expiration of the Title and Survey Review Period discloses any new Title Exception which was is not disclosed in the Pro Forma Title Policy Commitment provided to CWI prior to the expiration of the Title and Survey Review Period (a “New Title Exception”), or any update of the Survey delivered to CWI after the Effective Date expiration of the Title and Survey Review Period discloses any new Survey Defect which was is not disclosed in the Survey delivered to CWI prior to the Effective Date expiration of the Title and Survey Review Period (a “New Survey Defect” and together with any New Title Exception, the “Unpermitted Exceptions”), and such New Title Exception or New Survey Defect was not caused by CWI or any Person on behalf of CWI, then CWI shall have the right to request WPPI Seller to remove or cure such New Title Exception or New Survey Defect at or prior to Closing by providing written notice to WPPI Seller promptly after determining (in CWI’s its sole but reasonable discretion) discretion that such New Title Exception or New Survey Defect is not acceptable to CWI (the “New Title and Survey Objection Notice”). The terms New Title Exception and New Survey Defect shall not include (i) exceptions or defects that do not impair the marketability of title to the Real Property, (ii) easements or agreements with a benefit to the operation of the Hotel, such as utility and reciprocal parking easements or (iii) easements or agreements which WPPI became legally obligated to execute prior to the Effective Date and ultimately placed of record, such as the Tunnel Easements (collectively, the “Acceptable Matters”); provided, however, that the Acceptable Matters shall expressly exclude any liens of record encumbering the marketability of title arising as the result of or in connection with the ▇▇▇▇▇ dispute, the Construction Contract and/or the Architect Agreement. Notwithstanding anything in this Agreement to the contrary (including, without limitation, the terms of Section 2.8.3(c)), WPPI agrees that the following shall in all events constitute Unpermitted Exceptions which shall be removed from title by WPPI (the failure or refusal of which by WPPI at or prior to Closing shall constitute a default by WPPI hereunder): (i) any mechanics liens or judgments arising therefrom relating to Seller’s construction and/or development of the Hotel unless discharged by Closing pursuant to the posting of a bond or bonds in accordance with RCW 60.04.161, and (ii) subject to prorations, ad valorem real property taxes which constitute Title Exceptions which would be delinquent if unpaid at Closing, and if any such taxes are payable in installments, such obligation shall apply to all such installments which would be payable prior to or at Closing. (c) Subject to Section 2.8.3(b) above, if If CWI provides a New Title and Survey Objection Notice to WPPISeller, WPPI Seller may elect, by providing written notice (the “New Title and Survey Election Notice”) to CWI within the earlier of (i) five (5) business days after WPPISeller’s receipt of such New Title and Survey Objection Notice or (ii) the Closing, to (Ai) accept such New Title Exception or New Survey Defect as an additional Unpermitted Exception to be removed at or prior to Closing, or (Bii) refuse to remove or cure such New Title Exception or New Survey Defect; provided, however, that if (1A) WPPI Seller or any Person on behalf of WPPI Seller caused such New Title Exception or New Survey Defect, or (2B) Seller may remove or cure such New Title Exception or New Survey Defect, whether or not caused Defect by WPPI, may be removed by the payment of liquidated amounts not in excess of $100,000 or the posting of a statutory bond with collateral not in excess of $150,000amounts, then in each such instance, such New Title Exception or New Survey Defect shall constitute an Unpermitted Exception and WPPI Seller shall be obligated to remove or cure such New Title Exception or New Survey Defect at or prior to Closing (the failure or refusal of which by WPPI at or prior to Closing shall constitute a default by WPPI hereunder). To the extent the New Title Exception relates to a lien filed against the Property that WPPI is obligated or elects to discharge and such lien was filed against the Property within ten (10) business days of the Target Closing Date or the Outside Closing Date, as applicable, WPPI shall have the right to elect by written notice to CWI to extend the Target Closing Date or the Outside Closing Date, as applicable, ten (10) calendar days to allow WPPI the ability to remove or cure such New Title ExceptionClosing. If WPPI Seller does not provide a New Title and Survey Election Notice to CWI within such time period, then WPPI Seller shall be deemed to have elected to accept the New Title Exception or New Survey Defect as an Unpermitted Exception pursuant to clause (Ai) of the preceding sentence. If WPPI Seller elects not to remove or cure (such cure to be subject to the reasonable approval of CWI) a New Title Exception or New Survey Defect, then CWI then shall have the right to elect, by providing written notice (the “New Title and Survey Response Notice”) to WPPI Seller within the earlier of five ten (510) business days after CWI’s receipt of the New Title and Survey Election Notice or the Closing to: to (x1) terminate this Agreement whereupon this Agreement shall automatically terminate and become null and void, and of no further force and effect, the Escrow Agent shall immediately return the Good Faith Deposit (including all interest thereon) to CWI and the Parties shall have no further obligations under this Agreement, except as shall expressly survive the termination hereof or (y2) proceed to Closing pursuant to this Agreement and accept title to the Real Property, subject to such New Title Exception or New Survey Defect which thereafter shall be deemed to constitute a Permitted Exception. If CWI does not provide a New Title and Survey Response Notice to WPPI Seller within such time period, CWI shall be deemed to have elected to proceed to Closing pursuant to this Agreement and accept title to the Real Property subject to such New Title Exception or New Survey Defect pursuant to clause (y2) of the preceding sentence.

Exceptions to Title. Evidence of title shall be the issuance by Title Company of its A.L.T.A. Owner's Policy of Title Insurance with extended coverage (a) Attached including such endorsements as Exhibit “D” is CWI’s final form of pro forma Buyer may reasonably request), insuring that fee title insurance policy, incorporating the data described in the surveyReal Property is vested in Buyer as of the Closing Date, and including all endorsements thereto and all other insurance provisions as mutually agreed upon between CWI subject only to the Permitted Exceptions (the "Owner's Title Policy"). Buyer shall notify Seller in writing of any objections Buyer has to the Preliminary Report and the Title Company (the “Pro Forma Title Policy”), which is satisfactory title exceptions referenced therein and to CWI in all respects. CWI acknowledges and agrees that the (i) liens, encumbrances any subsequent amendments or other additional exceptions to title set forth in the Pro Forma Title Policy Preliminary Report (A) within ten (10) days of the “Title Exceptions”)latest to occur of (x) Buyer's receipt of the subject exception document, (iiy) all encroachments by improvements from adjoining properties onto or over the Land, any encroachments date of the Improvements onto or over adjoining properties, setback lines, rights-of-way or easements (to the extent in violation thereof) or other survey defects (the “Survey Defects”) set forth on the Pro Forma Title Policythis Agreement, and (iiiz) all matters shown in the Survey shall collectively constitute “Permitted Exceptions” to title to the Land (the “Permitted Exceptions”). (b) If any update case of plotable easements, Buyer's receipt of the Title Commitment delivered to CWI after 1989 Survey or, if the Effective Date discloses any new Title Exception which was not disclosed in the Pro Forma Title Policy (a “New Title Exception”), or any update of the Survey delivered to CWI after the Effective Date discloses any new Survey Defect which was not disclosed in the Survey delivered to CWI prior to the Effective Date (a “New Survey Defect” and together with any New Title Exception, the “Unpermitted Exceptions”), and such New Title Exception or New Survey Defect was not caused by CWI, then CWI shall have the right to request WPPI to remove or cure such New Title Exception or New Survey Defect at or prior to Closing by providing written notice to WPPI promptly after determining (in CWI’s sole but reasonable discretion) that such New Title Exception or New Survey Defect subject easement is not acceptable to CWI (shown on the “New Title and Survey Objection Notice”). The terms New Title Exception and New Survey Defect shall not include (i) exceptions or defects that do not impair the marketability of title to the Real Property1989 Survey, (ii) easements or agreements with a benefit to the operation of the Hotel, such as utility and reciprocal parking easements or (iii) easements or agreements which WPPI became legally obligated to execute prior to the Effective Date and ultimately placed of record, such as the Tunnel Easements (collectively, the “Acceptable Matters”); provided, however, that the Acceptable Matters shall expressly exclude any liens of record encumbering the marketability of title arising as the result of or in connection with the ▇▇▇▇▇ dispute, the Construction Contract and/or the Architect Agreement. Notwithstanding anything in this Agreement to the contrary (including, without limitation, the terms of Section 2.8.3(c)), WPPI agrees that the following shall in all events constitute Unpermitted Exceptions which shall be removed from title by WPPI (the failure or refusal of which by WPPI at or prior to Closing shall constitute a default by WPPI hereunder): (i) any mechanics liens or judgments arising therefrom relating to Seller’s construction and/or development of the Hotel unless discharged by Closing pursuant to the posting of a bond or bonds in accordance with RCW 60.04.161, and (ii) subject to prorations, ad valorem real property taxes which constitute Title Exceptions which would be delinquent if unpaid at Closing, and if any such taxes are payable in installments, such obligation shall apply to all such installments which would be payable prior to or at Closing. (c) Subject to Section 2.8.3(b) above, if CWI provides a New Title and Survey Objection Notice to WPPI, WPPI may elect, by providing written notice (the “New Title and Survey Election Notice”) to CWI within the earlier of (i) five (5) business days after WPPI’s Buyer's receipt of another survey reflecting the location of such New Title and Survey Objection Notice or (ii) the Closing, to (A) accept such New Title Exception or New Survey Defect as an additional Unpermitted Exception to be removed at or prior to Closingeasement, or (B) refuse prior to the Closing Date, whichever is earlier. Buyer's failure to disapprove such exception, amendment or addition within the period specified in the immediately preceding sentence shall be deemed to be approval. All such exceptions, amendments and additions that are approved by Buyer (including without limitation those deemed approved by Buyer pursuant to the immediately preceding sentence) shall be deemed "Permitted Exceptions." Seller shall use reasonable efforts to remove as matters affecting title any such disapproved exceptions, amendments or cure such New Title Exception additions prior to the Closing Date, but (a) in the case of disapproved exceptions that are referenced in the Preliminary Report, Seller shall not be required to institute any litigation or New Survey Defect; providedincur any cost to do so, howeverand (b) in the case of disapproved amendments or additions to the Preliminary Report, that if (1) WPPI Seller shall not be required to institute any litigation or incur any Person on behalf of WPPI caused such New Title Exception or New Survey Defect, or (2) such New Title Exception or New Survey Defect, whether or not caused by WPPI, may be removed by the payment of liquidated amounts not cost in excess of $100,000 or 10,000 to do so. If, prior to the posting of a statutory bond with collateral Closing Date, Seller notifies Buyer that Seller will not in excess of $150,000, then in each such instance, such New Title Exception or New Survey Defect shall constitute an Unpermitted Exception and WPPI shall be obligated able to remove any such disapproved exceptions, amendments or cure additions, then, within five (5) days after the giving of such New Title Exception or New Survey Defect at notice by Seller, or prior to the Closing Date, whichever is earlier, Buyer shall give Seller and Title Company written notice, either that Buyer (i) waives its prior disapproval of the failure disapproved exceptions, amendments and additions and accepts such exceptions, amendments and additions and such title as Seller is able to convey (in which case such disapproved exceptions, amendments and additions shall be deemed Permitted Exceptions), or refusal of which (ii) terminates this Agreement. If no such notice is given by WPPI at Buyer within such five (5) day period or prior to Closing shall constitute a default by WPPI hereunder). To the extent the New Title Exception relates to a lien filed against the Property that WPPI is obligated or elects to discharge and such lien was filed against the Property within ten (10) business days of the Target Closing Date or the Outside Closing Date, as applicable, WPPI shall have the right to elect by written notice to CWI to extend the Target Closing Date or the Outside Closing Date, as applicable, ten (10) calendar days to allow WPPI the ability to remove or cure such New Title Exception. If WPPI does not provide a New Title and Survey Election Notice to CWI within such time periodwhichever is earlier, then WPPI Buyer shall be deemed to have elected to accept the New Title Exception or New Survey Defect as an Unpermitted Exception pursuant to clause (A) waived its prior disapproval of the preceding sentence. If WPPI elects not disapproved exceptions, amendments and additions and accepted such exceptions, amendments and additions and such title as Seller is able to remove or cure convey (in which case such cure to be subject to the reasonable approval of CWI) a New Title Exception or New Survey Defectdisapproved exceptions, then CWI shall have the right to elect, by providing written notice (the “New Title amendments and Survey Response Notice”) to WPPI within the earlier of five (5) business days after CWI’s receipt of the New Title and Survey Election Notice or the Closing to: (x) terminate this Agreement whereupon this Agreement shall automatically terminate and become null and void, and of no further force and effect, the Escrow Agent shall immediately return the Good Faith Deposit to CWI and the Parties shall have no further obligations under this Agreement, except as shall expressly survive the termination hereof or (y) proceed to Closing pursuant to this Agreement and accept title to the Real Property, subject to such New Title Exception or New Survey Defect which thereafter additions shall be deemed to constitute a Permitted Exception. If CWI does not provide a New Title and Survey Response Notice to WPPI within such time period, CWI shall be deemed to have elected to proceed to Closing pursuant to this Agreement and accept title to the Real Property subject to such New Title Exception or New Survey Defect pursuant to clause (y) of the preceding sentenceExceptions).