EXHIBIT 10.26
Purchase and Sale Agreement between
Marriott International, Inc., Towneplace
Management Corporation, and Residence Inn
by Marriott, Inc., as Sellers, and CNL Hospitality
Partners, L.P., as Purchaser
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
MARRIOTT INTERNATIONAL, INC.
as MI,
and
TOWNEPLACE MANAGEMENT CORPORATION
and
RESIDENCE INN BY MARRIOTT, INC.
as Sellers,
and
CNL HOSPITALITY PARTNERS, L.P.
as Purchaser
---------------------------
Dated: November 24, 1999
TABLE OF CONTENTS
SECTION 1. DEFINITIONS...................................................1
1.1 "Act of Bankruptcy"................................................1
1.2 "Agreement"........................................................2
1.3 "Allocable Purchase Price".........................................2
1.4 "Architect"........................................................2
1.5 "`As-Built'Drawings"...............................................2
1.6 "Assets"...........................................................2
1.7 "Building Location Survey".........................................2
1.8 "Business Day".....................................................3
1.10 "CHP".............................................................3
1.11 "CHLP"............................................................3
1.12 "Closing".........................................................3
1.13 "Closing Date"....................................................3
1.14 "Competitor"......................................................3
1.15 "Contracts\.......................................................3
1.16 "Controlling Interest"............................................3
1.17 Intentionally Omitted.............................................3
1.18 Intentionally Omitted.............................................3
1.19 Intentionally Omitted.............................................3
1.20 Intentionally Omitted.............................................4
1.20A "Deposit"........................................................4
1.21 "Engineer"........................................................4
1.22 "Entity"..........................................................4
1.23 "Environmental Reports"...........................................4
1.24 "Excluded Assets".................................................4
1.25 "FAS".............................................................4
1.26 "FF&E\............................................................4
1.27 "FF&E Schedule\...................................................4
1.28 "Intentionally Omitted\...........................................4
1.29 "Franchise Agreement\.............................................5
1.30 "Guarantors\......................................................5
1.31 "Guaranty of Landlord's Obligations\..............................5
1.32 "Immaterial Taking\...............................................5
1.33 "Improvements\....................................................5
1.34 "Intangible Property\.............................................5
1.35 "Inventories\.....................................................6
1.36 "Lease\...........................................................6
1.37 "Limited Rent Guaranty\...........................................6
1.38 "Intentionally Omitted\...........................................6
1.39 "Intentionally Omitted\...........................................6
1.39A "Membership Interest Pledge Agreement"\.........................6
1.40 "Mere Director\...................................................6
1.40A "Merrifield Property\............................................6
1.41 "MI\..............................................................6
1.42 "NewarkProperty\..................................................6
1.43 "Opening Date\....................................................7
1.44 "Outside Substantial Completion Date".............................7
1.45 "Owner Agreement\.................................................7
1.46 "Intentionally Omitted\...........................................7
1.47 "Permitted Encumbrances\..........................................7
1.48 "Person\..........................................................7
1.49 "Plans and Specifications\........................................7
1.50 "Property\........................................................7
1.51 "Properties\......................................................7
1.52 "Proprietary Information\.........................................7
1.53 "Purchaser\.......................................................8
1.54 "Real Property\...................................................8
1.55 "Reserve\.........................................................8
1.56 "Seller\..........................................................8
1.57 "Intentionally Omitted\...........................................8
1.58 "Intentionally Omitted\...........................................8
1.59 "Substantial Completion\..........................................8
1.60 "Surveyor\........................................................8
1.61 "Systems Standards Manual\........................................8
1.62 "Tenant\..........................................................8
1.63 "Title Commitments\...............................................8
1.64 "Title Company\...................................................9
SECTION 2. PURCHASE-SALE; DILIGENCE......................................9
2.1 Purchase-Sale......................................................9
2.2 Diligence Inspections..............................................9
2.3 Title Matters......................................................9
2.4 Survey............................................................10
2.5 Environmental Reports.............................................11
2.6 Immaterial Taking.................................................12
2.7 Changes to Plans and Specifications...............................12
SECTION 3. PURCHASE AND SALE............................................13
3.1 Closing...........................................................13
3.3 Purchase Price....................................................14
3.4 Seller's Determination of Purchase Price..........................14
3.4A Intentionally Omitted............................................14
3.5 Seller's Option to Terminate......................................14
3.6 Competitor........................................................15
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE................15
4.1 Closing Documents.................................................15
4.2 Condition of Applicable Property..................................17
4.3 Title Policies and Surveys........................................18
4.4 Opinions of Counsel...............................................18
4.5 FF&E Schedule.....................................................18
4.6 Other.............................................................18
SECTION 5. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE...................19
5.1 Purchase Price....................................................19
5.2 Closing Documents.................................................19
5.3 Opinions of Counsel...............................................19
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SELLER.....................20
6.1 Status and Authority of the Seller................................20
6.2 Status and Authority of MI........................................20
6.3 Intentionally Omitted.............................................20
6.4 Status and Authority of Tenant....................................20
6.5 Intentionally Omitted.............................................20
6.6 Intentionally Omitted.............................................20
6.7 Intentionally Omitted.............................................20
6.8 Employees.........................................................20
6.9 Existing Agreements...............................................21
6.10 Tax Returns......................................................21
6.11 Action of the Seller.............................................21
6.12 No Violations of Agreements......................................22
6.13 Litigation.......................................................22
6.14 Not A Foreign Person.............................................22
6.15 Construction Contracts; Mechanics' Liens.........................22
6.16 Permits, Licenses................................................22
6.17 Hazardous Substances.............................................22
6.18 Insurance........................................................23
6.19 Condition of Property............................................23
6.20 Financial Information............................................23
6.21 Contracts........................................................23
6.22 Title to FF&E....................................................23
6.23 FF&E.............................................................23
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER..................25
7.1 Status and Authority of the Purchaser.............................26
7.2 Status and Authority of the Guarantors............................26
7.3 Action of the Purchaser...........................................26
7.4 No Violations of Agreements.......................................26
7.5 Litigation........................................................26
SECTION 8. COVENANTS OF THE SELLER......................................27
8.1 Compliance with Laws..............................................27
8.2 Correction of Defects.............................................27
8.3 Insurance.........................................................28
8.4 Material Defects in Structural Systems............................28
8.5 Final Payment.....................................................28
SECTION 9. APPORTIONMENTS...............................................28
9.1 Apportionments....................................................28
9.2 Closing Costs.....................................................29
SECTION 10. DEFAULT.....................................................29
10.1 Default by the Seller............................................29
10.2 Default by the Purchaser.........................................30
10.3 Purchaser's Deposit..............................................31
SECTION 11. MISCELLANEOUS...............................................32
11.1 Agreement to Indemnify...........................................32
11.2 Brokerage Commissions............................................34
11.3 Intentionally Omitted............................................34
11.4 Publicity........................................................34
11.5 Notices..........................................................35
11.6 Waivers, Etc.....................................................37
11.7 Assignment; Successors and Assigns...............................37
11.8 Severability.....................................................37
11.9 Counterparts, Etc................................................38
11.10 Governing Law...................................................38
11.11 Performance on Business Days....................................38
11.12 Attorneys' Fees.................................................38
11.13 Relationship....................................................38
11.14 Section and Other Headings......................................38
11.15 Disclosure......................................................39
11.16 Newark Property-No Discrimination...............................39
11.17 Merrifield Property--Development Tax...........................40
Schedule A - Purchase Price Allocation
Schedule B - Guaranty
Schedule C - Lease Agreement
Schedule D - Limited Rent Guaranty
Schedule E - Form of Owner Agreement
Schedule E-1 - Permitted Encumbrances
Schedule E-2 - Plans & Specifications
Schedule ▇-▇ - ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇ Property
Schedule ▇-▇ - ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ Property
Schedule F-3 - Legal Description of Merrifield, VA Property
Schedule G - Intentionally Omitted
Schedule H - Membership Interest Pledge Agreement
Schedule I-1 - Commitments
Schedule I-2 - Leasehold Policy Commitments
Schedule J - Form of Surveyor's Certificate
Schedule J-1 - Surveys
Schedule K - Outline of Structural Systems
Schedule L - Form of Architect's Certificate
Schedule L-1 - Form of Marriott's Architect Certificate
Schedule M - Form of Engineer's Certificate
Schedule M-1 - Form of Marriott's Engineer Certificate
Schedule N - Intentionally Omitted
Schedule O-1 - Residence Inn Franchise Agreement
Schedule O-2 - TownePlace Suites Franchise Agreement
Schedule P - Escrow Agreement
Schedule Q - Systems Standards Manual
Schedule R - Environmental Reports
Schedule S - Architects
Schedule T - Engineers
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made as of the 24th day of
November, 1999, by and between TOWNEPLACE MANAGEMENT CORPORATION, a Delaware
corporation and RESIDENCE INN BY MARRIOTT, INC., a Delaware corporation, as
sellers, and CNL HOSPITALITY PARTNERS, L.P., a Delaware limited partnership, as
purchaser, and joined in by MARRIOTT INTERNATIONAL, INC., a Delaware
corporation.
W I T N E S S E T H :
WHEREAS, the Seller (this and other capitalized terms used and not
otherwise defined herein having the meanings ascribed to such terms in Section
1) is, the owner of all of the Properties; and
WHEREAS, Purchaser desires to purchase all of the Properties and
thereby acquire all of the Seller's right, title and interest in and to the
Properties upon the terms and conditions hereinafter set forth; and
WHEREAS, the Seller desires to sell to the Purchaser all of the
Properties and thereby convey all right, title and interest in the Properties,
upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, the Seller and the Purchaser
hereby agree as follows:
SECTION 1. DEFINITIONS.
Capitalized terms used in this Agreement and not defined elsewhere
herein shall have the meanings set forth below, in the Section of this Agreement
referred to below, or in such other document or agreement referred to below:
1.1 "Act of Bankruptcy" shall mean if a party hereto or any general
partner thereof or Tenant shall (a) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or all of or a substantial part of its property; (b) admit in writing its
inability to pay its debts as they become due; (c) make a general assignment for
the benefit of its creditors; (d) file a voluntary petition or commence a
voluntary case or proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect); (e) be adjudicated a bankrupt or insolvent; (f) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts;
(g) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case or proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect); or (h) take
any corporate or partnership action for the purpose of effecting any of the
foregoing; or if the proceeding or case shall be commenced, without the
application or consent of a party hereto or any general partner thereof or
Tenant, in any court of competent jurisdiction seeking (1) the liquidation,
reorganization, dissolution or winding-up, or the composition or readjustment of
debts, of such party or general partner or Tenant; (2) the appointment of a
receiver, custodian, trustee or liquidator for such party or general partner or
Tenant or all or any substantial part of its assets; or (3) other similar relief
under any law relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts, and such proceeding or case shall continue
undismissed; or an order (including an order for relief entered in an
involuntary case under the Federal Bankruptcy Code, as now or hereinafter in
effect), judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstated and in effect, for a period of sixty (60)
consecutive days.
1.2 "Agreement" shall mean this Purchase and Sale Agreement, together
with Schedules A through T hereto, as it and they may be amended from time to
time as herein provided.
1.3 "Allocable Purchase Price" shall mean, with respect to each
Property, the sum of the "Minimum Purchase Price" as set forth on Schedule A
hereto, plus the "Price Adjustment" determined by Seller as set forth on
Schedule A hereto, it being understood and agreed that the aggregate amount of
the Allocable Purchase Prices of all three (3) Properties shall be no less than
Forty-Seven Million Eight Hundred Thirty-Nine Thousand Dollars ($47,839,000) and
no more than Forty-Eight Million Eight Hundred Thirty-Nine Thousand Dollars
($48,839,000), as determined by Seller in accordance with Section 3.4.
1.4 "Architect" shall mean, with respect to each Property, that certain
architect or architectural firm identified on Schedule S attached hereto.
1.5 "`As-Built' Drawings" shall mean the final "as-built" plans and
specifications for the Improvements which are to be furnished by the Seller to
Purchaser pursuant to Section 4.1 of this Agreement.
1.6 "Assets" shall mean, with respect to any Property, all of the FF&E,
the Contracts and the Intangible Property, collectively, now owned or hereafter
(but prior to the Closing Date with respect to such Property) acquired by Seller
in connection with or relating to the Property owned by Seller other than any
Excluded Assets with respect to such Property.
1.7 "Building Location Survey" shall have the meaning given such term
in Section 2.4.
1.8 "Business Day" shall mean any day other than a Saturday, Sunday or
any other day on which banking institutions in the State of Maryland are
authorized by law or executive action to close.
1.9 Intentionally Omitted.
1.10 "CHP" shall mean CNL Hospitality Properties, Inc., a Maryland
corporation.
1.11 "CHLP" shall mean CNL Hospitality Partners, L.P., a Delaware
limited partnership.
1.12 "Closing" shall have the meaning given such term in Section 3.1.
1.13 "Closing Date" shall have the meaning given such term in Section
3.1.
1.14 "Competitor" shall mean a Person that owns or has an equity
interest in a hotel brand, tradename, system or chain (a "Brand") which is
comprised of at least ten (10) hotels; provided that such Person shall not be
deemed a Competitor if it holds its interest in a Brand merely as (i) a
franchisee or (ii) a mere passive investor that has no control or influence over
the business decisions of the Brand at issue, such as a mere limited partner in
a partnership, a mere shareholder in a corporation or a mere payee of royalties
based on a prior sale transaction. A mere passive investor that is represented
by a Mere Director on the board of directors of a Competitor shall not be deemed
to have control or influence over the business decisions of that Competitor.
1.15 "Contracts" shall mean, with respect to any Property, equipment
leases relating to telephone switches and voice mail relating to such Property
and to which the Seller is a party and any other equipment leases relating to
the Property and disclosed to Purchaser on or before Closing and which are to
survive the Closing and to which the Seller is a party.
1.16 "Controlling Interest" shall mean (a) as to a corporation, the
right to exercise, directly or indirectly, more than fifty percent (50%) of the
voting rights attributable to the shares of the Entity (through ownership of
such shares or by contract), and (b) as to an Entity not a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the Entity.
1.17 Intentionally Omitted.
1.18 Intentionally Omitted.
1.19 Intentionally Omitted.
1.20 Intentionally Omitted.
1.20A "Deposit" shall have the meaning given such term in Section 10.3
1.21 "Engineer" shall mean with respect to any Property, that certain
engineer or engineering firm identified on Schedule T attached hereto.
1.22 "Entity" shall mean any corporation, general or limited
partnership, limited liability company, partnership, stock company or
association, joint venture, association, company, trust, bank, trust company,
land trust, business trust, cooperative, any government or agency or political
subdivision thereof or any other entity.
1.23 "Environmental Reports" shall have the meaning given such term in
Section 2.5.
1.24 "Excluded Assets" shall mean, with respect to any Property, (i)
any right, title or interest in any name containing any of the names "Marriott,"
"Residence Inn," "TownePlace Suites" and other marks used, or that may in the
future be used, by MI or its affiliates, including the Seller of such Property
(and Seller and MI shall have the right to remove any such name or ▇▇▇▇
appearing on any signage or other property pursuant to the terms of the
Franchise Agreement for such Property), (ii) all property owned by the Seller or
any of its affiliates, not normally located at such Property and used, but not
exclusively, in connection with the operation of such Property, (iii) all items,
tangible or intangible, consisting of Proprietary Information, (iv) computer
software, (v) FAS, (vi) any Inventories located at such Property, (vii) working
capital, including without limitation, cash, bank accounts and accounts
receivable owned or held by Seller or any of its affiliates, (viii) all books,
ledger sheets, files and records, (ix) all contracts pertaining to the operation
of such Property other than the Contracts, and (x) any software, manuals,
brochures or directives used by the Seller or any of its affiliates, in the
operation of the Property that will be issued by the franchisor to the Tenant,
as franchisee, under the Franchise Agreements.
1.25 "FAS" shall have the meaning given such term in the Lease.
1.26 "FF&E" shall mean, with respect to any Property, all appliances,
machinery, devices, fixtures, appurtenances, equipment, furniture, furnishings
and articles of tangible personal property of every kind and nature whatsoever
owned by the Seller or any of its affiliates, and located in or at, or used in
connection with the ownership, operation or maintenance of such Property, other
than motor vehicles.
1.27 "FF&E Schedule" shall have the meaning given such term in Section
4.5.
1.28 "Intentionally Omitted"
1.29 "Franchise Agreement" shall mean, in respect of each Property, the
applicable Franchise Agreement to be entered into at or prior to the Closing of
the purchase and sale of a Property between MI, as franchisor, and Tenant, as
franchisee, substantially in the forms attached hereto at Schedule O-1
(Residence Inn Franchise Agreement), and O-2 (TownePlace Suites Franchise
Agreement), respectively.
1.30 "Guarantor" shall mean CHP and CHLP, jointly and severally.
1.31 "Guaranty of Landlord's Obligations" shall mean, in respect of
each Property, the Guaranty in the form of Schedule B hereto to be entered into
by Guarantor for the benefit of Tenant, in respect of the Lease for each
Property and guarantying the landlord's obligations under such Lease.
1.32 "Immaterial Taking" shall have the meaning given such term in
Section 2.6.
1.33 "Improvements" shall mean, with respect to any Property, all
buildings, fixtures, walls, fences, landscaping and other structures and
improvements situated on, affixed or appurtenant to the Real Property with
respect to such Property, including, but not limited to, all pavement, access
ways, curb cuts, parking, kitchen and support facilities, meeting and conference
rooms, swimming pool facilities, recreational amenities, office facilities,
drainage system and facilities, air ventilation and filtering systems and
facilities and utility facilities and connections for sanitary sewer, potable
water, irrigation, electricity, telephone, cable television and natural gas, if
applicable, to the extent the same form a part of the Property and all
appurtenances thereto acquired by Purchaser in connection with Purchaser's
acquisition of the Property pursuant to the terms of this Agreement.
1.34 "Intangible Property" shall mean, with respect to any Property,
all transferable or assignable (a) governmental permits, including licenses and
authorizations, required for the construction, ownership and operation of the
Improvements, including without limitation certificates of occupancy, building
permits, signage permits, liquor licenses, site use approvals, zoning
certificates, environmental and land use permits and any and all necessary
approvals from state or local authorities (hereinafter defined as "Permits") and
other approvals granted by any public body or by any private party pursuant to a
recorded instrument relating to such Property and (b) certificates, licenses,
warranties and guarantees and the Contracts held by the Seller of such Property
and/or Seller, other than (x) the Excluded Assets and (y) such permits,
operating permits, certificates, licenses and approvals which are to be held by,
or transferred to, the Tenant in order to permit the Tenant to operate such
Property properly in accordance with the terms of the Leases.
1.35 "Inventories" shall have the meaning given such term in the Lease.
1.36 "Lease" shall mean, in respect of each Property, the Lease
Agreement in the form of Schedule C attached hereto to be entered into by Tenant
and the Purchaser of such Property, subject to such changes as may be reasonably
requested by either party and approved by Purchaser, MI and Tenant, as the case
may be, which approval shall not be unreasonably withheld, conditioned or
delayed and as shall be required to conform the Lease to, and ensure the
enforceability of the Lease under, the applicable laws of the state in which
such Property is located.
1.37 "Limited Rent Guaranty" shall mean the Limited Rent Guaranty in
the form of Schedule D hereto to be entered into by MI in respect of each Lease.
1.38 "Intentionally Omitted"
1.39 "Intentionally Omitted"
1.39A "Membership Interest Pledge" shall mean, in respect of each
Property, the Membership Interest Pledge Agreement in the form of Schedule H
hereto to be entered into by MI, or its affiliates, owning all of the
outstanding membership interests in Tenant, as pledgor, and the Purchaser of
such Property, as pledgee, as further security for the performance of Tenant's
obligations under the Lease for such Property.
1.40 "Mere Director" shall mean a Person who holds the office of
director of a corporation and who, as such director, has the right to vote not
more than twelve and one-half percent (12.5%) of the total voting rights on the
board of directors of such corporation, and who represents or acts on behalf of
a mere passive investor which neither (i) owns more than three percent (3%) of
the total voting rights attributable to all shares or ownership interests of a
Competitor, nor (ii) otherwise has the power to direct or cause the direction of
the management or policies of a Competitor.
1.40A "Merrifield Property" shall mean the Property located in
Merrifield, Virginia
1.41 "MI" shall mean Marriott International, Inc., a Delaware
corporation, its successor or successors by merger or operation of law, and
assignee or assignees to whom it has transferred all or substantially all of its
hotel and related lodging assets and/or businesses and which assumes in writing
Marriott International, Inc.'s obligations under this Agreement.
1.42 "Newark Property" shall mean the Property located in Newark,
California.
1.43 "Opening Date" shall mean, with respect to any Property, the date
as of which all Improvements located at such Property, including, without
limitation, all guest rooms and/or suites, shall be open for business to the
public as a Residence Inn hotel or TownePlace Suites hotel, as the case may be.
1.44 "Outside Substantial Completion Date" shall mean, with respect of
any Property, June 30, 2001, subject to extension of such date on account of
force majeure.
1.45 "Owner Agreement" shall mean the Owner Agreement in substantially
the form of Schedule E hereto to be entered into by MI, Tenant and CHLP in
respect of each Lease.
1.46 "Intentionally Omitted"
1.47 "Permitted Encumbrances" shall mean, with respect to any Property:
(a) any and all matters affecting title to such Property as shown on Schedule
E-1 hereto; (b) liens for taxes, assessments and governmental charges with
respect to such Property not yet due and payable or due and payable but not yet
delinquent; (c) applicable zoning regulations and ordinances and other
governmental laws, ordinances and regulations; (d) such other nonmonetary
encumbrances which were granted by the Seller of the Property in order to
facilitate, in Seller's reasonable discretion, the construction and operation of
the Improvements; (e) any utility, drainage or other easements which are
customary in connection with (or which reasonably serve) the Improvements; (f)
the Lease; and (g) such other nonmonetary encumbrances with respect to such
Property which are not objected to by the Purchaser in accordance with Sections
2.3 and 2.4.
1.48 "Person" shall mean any individual or Entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of such
Person where the context so admits.
1.49 "Plans and Specifications" shall mean, with respect to each
Property, those certain plans and specifications which have been approved by
Purchaser and which are identified on Schedule E-2.
1.50 "Property" shall mean the Real Property and Improvements relating
to each of the hotels identified on Schedule A hereto, together with the Assets
relating to such Property.
1.51 "Properties" shall mean, collectively, each and every Property.
1.52 "Proprietary Information" shall have the meaning given such term
in the Lease.
1.53 "Purchaser" shall mean CHLP and its permitted successors and
assigns.
1.54 "Real Property" shall mean, in respect to any Property, the real
property described in the applicable Schedule F-1 through F-3 to this Agreement,
together with all easements, rights of way, privileges, licenses and
appurtenances which the Seller of such Property may now own or hereafter acquire
with respect thereto, less any portion or portions thereof taken by way of an
Immaterial Taking.
1.55 "Reserve" shall have the meaning given such term in the Lease.
1.56 "Seller" shall mean (a) with respect to the Property located in
Newark, California and described on Schedule F-1 attached hereto, TownePlace
Management Corporation; and (b) with respect to the Properties located in Mira
Mesa, California and Merrifield, Virginia, and described on Schedule F-2 and
Schedule F-3, respectively, Residence Inn by Marriott, Inc.
1.57 "Intentionally Omitted"
1.58 "Intentionally Omitted"
1.59 "Substantial Completion" shall mean, with respect to any Property,
substantial completion of the Improvements on such Property, including, without
limitation, substantial completion of a hotel of the applicable brand set forth
on Schedule A hereto, in conformance, in all material respects, with the Plans
and Specifications therefor (other than so-called "punch-list" items as do not
individually or in the aggregate substantially impair the use of such Property
for its intended use).
1.60 "Surveyor" shall mean, with respect to each Property, that certain
surveyor identified on Schedule J-1 attached hereto.
1.61 "Systems Standards Manual" shall mean the Systems Standards Manual
(or successor thereto) attached hereto at Schedule Q, setting forth the
standards and requirements for the construction, renovation and operation of
hotels within the applicable brand (i.e., Residence Inn and TownePlace Suites)
of hotel to be constructed and operated on the applicable Property.
1.62 "Tenant" shall mean a limited liability company, wholly-owned,
directly or indirectly, by MI.
1.63 "Title Commitments" shall have the meaning given such term in
Section 2.3.
1.64 "Title Company" shall mean First American Title Insurance Company
or such other title insurance company as shall have been approved by the
Purchaser and the Seller.
SECTION 2. PURCHASE-SALE; DILIGENCE.
2.1 Purchase-Sale. In consideration of the mutual covenants herein
contained, the Purchaser hereby agrees to purchase from the Seller and the
Seller hereby agrees to sell to the Purchaser, each of the Properties of Seller
for the respective Allocable Purchase Prices relating thereto, subject to and in
accordance with the terms and conditions of this Agreement.
2.2 Diligence Inspections. Purchaser has approved (or is deemed to have
approved for purposes of this Agreement) the Properties in their "as is, where
is" condition as of the date hereof. In respect to the Improvements to be
developed on the Properties by the Seller, the Seller shall permit the Purchaser
and its representatives to inspect the Improvements at appropriate stages of
completion at such reasonable times as the Purchaser or its representatives may
request by reasonable prior notice to the Seller. During any such inspection,
the Purchaser and its representatives shall minimize any resulting interference
with ongoing construction at the Properties or the operation of the Properties
as a hotel. To the extent that, in connection with such investigations, the
Purchaser, its agents, representatives or contractors, damages or disturbs any
of the Property, the Purchaser shall return the same to substantially the same
condition which existed immediately prior to such damage or disturbance. The
Purchaser shall indemnify, defend and hold harmless the Seller from and against
any and all expense, loss or damage (including, without limitation, reasonable
attorneys' fees) which the Seller may incur as a result of any act or omission
of the Purchaser or its representatives, agents or contractors in connection
with any such inspections, other than any expense, loss or damage arising from
any act or omission of the Seller. The foregoing indemnification agreement shall
survive the termination of this Agreement and the Closings hereunder.
2.3 Title Matters. Purchaser has approved (or is hereby deemed to have
approved) the state of title to the Properties and all exceptions thereto
reflected in the written commitments for the issuance of (a) a title insurance
policy for each of the Properties, copies of which commitments are attached
hereto as Schedule I-1 (the "Commitments"), and (b) a Leasehold Owner's Title
Insurance Policy for each of the Properties naming Tenant as the insured, copies
of which commitments are attached hereto as Schedule I-2 (the "Leasehold Policy
Commitment") (the Commitments and Leasehold Policy Commitments herein,
collectively, the "Title Commitments"). Purchaser has approved the Commitments
and the form of policy provided for therein. MI has approved the Leasehold
Policy Commitments and the form of the leasehold policy provided for therein on
behalf of the Tenant.
In the event that Seller decides to encumber a Property with an
additional document, instrument or other matter, Seller shall give Purchaser
notice thereof together with a copy of the document, instrument or other matter
to be placed of record against the Property ("Additional Exception"). Within
five (5) Business Days after receipt of a notice of any Additional Exception
with respect to any Property, the Purchaser shall give the Seller notice of its
approval or disapproval thereof. Purchaser shall not withhold its approval of
any such Additional Exception which would be a Permitted Encumbrance specified
in clauses (a) through (g), inclusive, of Section 1.46, and shall not
unreasonably withhold, delay or condition its approval of any other Additional
Exception. If Purchaser fails to respond within said five (5) Business Day
period, Purchaser shall be deemed to have approved such Additional Exception. If
Purchaser unreasonably disapproves of any Additional Exception, Seller shall be
excused from performing any term or condition (or any portion or aspect of a
term or condition) of this Agreement which Seller is unable or unwilling to
perform as a result of its inability to enter into and/or record such Additional
Exception.
In the event that an encumbrance is placed on any Property (other than
a monetary encumbrance, which Seller shall pay, provided such encumbrance does
not exceed $250,000) as a result of judicial action taken by a local, state, or
Federal governmental entity with respect to violation of any state or Federal
environmental laws not caused by, authorized or acquiesced to by Seller, the
Purchaser's sole remedy shall be (A) to terminate this Agreement with respect to
the affected Property, in which event this Agreement shall terminate and be of
no further force or effect with respect to the affected Property and Seller
shall reimburse to Purchaser the Purchaser's expenses incurred in respect of
such affected Property, not to exceed $30,000 (and direct Escrow Agent to refund
to Purchaser that portion of the Deposit allocable to the affected Property as
provided in Section 10.3) or (B) to consummate the transactions contemplated
hereby, notwithstanding such encumbrance, without any abatement or reduction in
the Allocable Purchase Price for the affected Property on account thereof.
2.4 Survey. Purchaser has approved the survey ("Existing Survey") for
each of the Properties and all matters shown thereon, which surveys are
identified on Schedule J-1 attached hereto. Prior to the Closing in respect of
each Property, Seller shall have a survey prepared by the Surveyor for such
Property so as to locate all Improvements thereon ("Building Location Survey")
and to be certified as of a date no earlier than thirty (30) days prior to the
Closing Date. Seller shall use commercially reasonable efforts to have the
Surveyor's Certificate conform to the form of certificate contained in Schedule
J hereto and to ensure that the Building Location Survey meets the survey
requirements set forth in such Schedule J. A copy of the Building Location
Survey shall be furnished by Seller to Purchaser when received by Seller.
Within fifteen (15) Business Days after receipt of the Building
Location Survey with respect to any Property, the Purchaser shall give the
Seller notice of any matters shown thereon (other than the Permitted
Encumbrances and any matters shown on the Existing Survey for such Property)
which adversely affect such Property in any material respect, for which
Purchaser is unable to obtain affirmative insurance at no cost, and as to which
the Purchaser reasonably objects. If, for any reason, the Seller is unable or
unwilling to take such actions as may be required to remedy the objectionable
matters or pay for the cost to obtain affirmative insurance over the
objectionable matter, the Seller shall give the Purchaser prompt notice thereof;
it being understood and agreed that the failure of the Seller to give such
notice within fifteen (15) Business Days after Seller's receipt of the
Purchaser's notice of objection shall be deemed an election by the Seller not to
remedy such matters. If the Seller shall be unable or unwilling to remove (or
pay the cost of insuring over same) any survey defect to which the Purchaser has
reasonably objected, the Purchaser may elect (A) to terminate this Agreement
with respect to the affected Property, in which event this Agreement shall
terminate and be of no further force or effect with respect to the affected
Property and Seller shall reimburse to Purchaser the Purchaser's expenses
incurred in respect of such affected Property, not to exceed $30,000 (and direct
Escrow Agent to refund to Purchaser that portion of the Deposit allocable to the
affected Property as provided in Section 10.3) or (B) to consummate the
transactions contemplated hereby, notwithstanding such defect, without any
abatement or reduction in the Allocable Purchase Price for the affected Property
on account thereof. The Purchaser shall make any such election by written notice
to the Seller given on or prior to the fifth (5th) Business Day after the
earlier of (x) Purchaser's receipt of the Seller's notice of its inability or
unwillingness to cure (or pay the cost of insuring over) such defect and (y) the
expiration of the 15-Business Day period within which Seller is required to
respond to Purchaser's notice of objection, time being of the essence with
respect to the giving of such notice. Failure of the Purchaser to give such
notice within the time prescribed in the preceding sentence shall be deemed an
election by the Purchaser to proceed in accordance with clause (B) above.
2.5 Environmental Reports. Purchaser has approved and accepts the
environmental condition of the Properties as existing on the date hereof and as
reflected in those certain Phase I environmental reports in respect of the
Properties identified in Schedule R hereto ("Environmental Reports"). At the
written election of Purchaser, made no later than twenty (20) days prior to the
Closing Date for the acquisition of a given Property, the Seller and Purchaser
shall order, with respect to such Property, an update of the Environmental
Reports (the "Updated Environmental Reports").
Within five (5) Business Days after receipt of an Updated Environmental
Report with respect to any Property, the Purchaser shall give the Seller notice
of any matters therein as to which the Purchaser reasonably objects. If, for any
reason, the Seller is unable or unwilling to take such actions as may be
required to cause such matters to be remedied to the reasonable satisfaction of
the Purchaser, the Seller shall give the Purchaser notice thereof; it being
understood and agreed that the failure of the Seller to give such notice within
five (5) Business Days after receipt of the Purchaser's notice of objection
shall be deemed an election by the Seller not to remedy such matters. If the
Seller shall be unwilling or unable to remedy any matters to which the Purchaser
has reasonably objected, the Purchaser may elect (A) to terminate this Agreement
with respect to the acquisition of the affected Property, in which event, this
Agreement shall be of no further force and effect with respect to such
acquisition and Seller shall reimburse to Purchaser the Purchaser's expenses
incurred in respect of such affected Property, not to exceed $30,000 (and direct
Escrow Agent to refund to Purchaser that portion of the Deposit allocable to the
affected Property as provided in Section 10.3) or (B) to consummate the
acquisition of the affected Property, notwithstanding such defect, without any
abatement or reduction in the Allocable Purchase Price for the affected Property
on account thereof. The Purchaser shall make any such election by written notice
to the Seller given on or prior to the fifth (5th) Business Day after the
earlier of (x) Purchaser's receipt of Seller's notice of its inability or
unwillingness to cure such defect and (y) the expiration of the 5-Business Day
period within which Seller was to have responded to Purchaser's notice of
objection. Failure of the Purchaser to give such notice within the time
prescribed by the preceding sentence shall be deemed an election by the
Purchaser to proceed in accordance with clause (B) above.
2.6 Immaterial Taking. If prior to the Closing of the purchase of a
Property, such Property is the subject of a condemnation which does not, in
Seller's reasonable opinion, affect any material part of the Improvements and
does not materially adversely affect access to the Improvements or compliance
with applicable zoning or building requirements, including parking (an
"Immaterial Taking"), Seller will provide written notice of such Immaterial
Taking to Purchaser and this Agreement will remain in full force and effect in
respect of the purchase and sale of such Property, but with an abatement of the
Allocable Purchase Price for such Property equal to the amount of the award paid
to Seller on account of such taking, less the amount of Seller's costs and
expenses, including reasonable attorneys' fees and expenses, in establishing and
collecting such award.
2.7 Changes to Plans and Specifications. Purchaser shall have the
following rights in respect of changes to the Plans and Specifications for the
Improvements to be constructed on the Property:
(a) In respect to any Property, Seller will not enter into a change
order to the general contract for the construction of the Improvements on such
Property (the "General Contract") without first receiving Purchaser's approval
(such approval not to be unreasonably withheld, conditioned or delayed) where
such change order would (i) effect a material change in the structural system of
the Improvements other than as described in the Outline of Structural Systems
attached hereto as Schedule K, or (ii) effect a change which would decrease the
cost of the Improvements by Fifty Thousand Dollars ($50,000.00) or more and
result in a reduction of a standard provided for in the Systems Standards Manual
applicable to such Improvements.
(b) Seller shall provide to Purchaser a copy of any change order to the
General Contract which effects a change in the amount of One Hundred Thousand
Dollars ($100,000.00) or more. Such copies will be for informational purposes
only; Purchaser will not have the right to approve or disapprove changes in the
Plans and Specifications except to the extent provided for in Section 2.7(a)
above.
(c) In the event that Seller materially deviates from the Plans and
Specifications as to any Property (and such deviation (x) resulted in a material
change in the structural system of the Improvements to such Property other than
as described in the Outline of Structural Systems attached hereto as Schedule K,
or (y) resulted in a change which decreased the cost of the Improvements by
Fifty Thousand Dollars ($50,000.00) or more and resulted in a reduction of a
standard or standards provided for in the Systems Standards Manual applicable to
such Improvements), Seller may, but is not obligated, to remedy such deviations.
If Seller elects not to remedy the deviations, Purchaser's sole remedy shall be
either (i) to terminate this Agreement with respect to the affected Property, in
which event this Agreement shall terminate and be of no further force or effect
with respect to the affected Property and Seller shall reimburse to Purchaser
the Purchaser's expenses incurred in respect of such affected Property, not to
exceed $30,000 (and direct Escrow Agent to refund to Purchaser that portion of
the Deposit allocable to the affected Property as provided in Section 10.3), or
(ii) to proceed to close in accordance with this Agreement without any abatement
in the Allocable Purchase Price for such Property.
SECTION 3. PURCHASE AND SALE.
3.1 Closing. (a) The purchase and sale of the Properties shall be
consummated at one or more closings (each, a "Closing") in escrow with the Title
Company at the offices of Lowndes, Drosdick, Doster, ▇▇▇▇▇▇ & ▇▇▇▇, P.A., ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, or at such other location as the Seller and
the Purchaser may agree, at 10:00 a.m. local time, the Closing with respect to
any Property to occur on a date (each, a "Closing Date") designated by Seller in
a written notice ("Closing Notice") from Seller to Purchaser stating that
Substantial Completion and the Opening Date have occurred with respect to such
Property. Such Closing Date shall not be less than thirty (30) days nor more
than forty-five (45) days after the Closing Notice, or such later date as of
which all conditions precedent to the Closing herein set forth with respect to
the applicable Property have either been satisfied or waived by the party in
whose favor such conditions run. In the event that Closing with respect to a
given Property shall not have occurred within ninety (90) days after the Outside
Substantial Completion Date, either party (provided such party shall not be in
default hereunder), shall have the right, by the giving of written notice to the
other, to terminate this Agreement with respect to such Property, in which event
this Agreement shall terminate and be of no further force or effect with respect
to the affected Property and Seller shall reimburse to Purchaser the Purchaser's
expenses incurred in respect of such affected Property, not to exceed $30,000
(and direct Escrow Agent to refund to Purchaser that portion of the Deposit
allocable to the affected Property as provided in Section 10.3).
3.2 Intentionally Omitted.
3.3 Purchase Price. At each Closing, the Allocable Purchase Price for
each Property being purchased shall be payable by wire transfer of immediately
available funds on the applicable Closing Date to an account or accounts to be
designated by the Seller prior to such Closing, subject to any adjustments and
apportionments made pursuant to Section 9.1 of this Agreement.
3.4 Seller's Determination of Purchase Price. At least ninety (90) days
prior to the Closing Date for the acquisition of a Property, Seller shall
provide written notice to Purchaser of the Allocable Purchase Price for such
acquisition. With respect to each Property, the "Individual Maximum Purchase
Price" shall mean the Minimum Purchase Price (plus, in the case of the Newark
Property, the maximum Price Adjustment allowable for such Property, as set forth
at Schedule A attached hereto; provided that the Allocable Purchase Price for
all the Properties shall not exceed Forty-Eight Million Eight Hundred
Thirty-Nine Thousand Dollars ($48,839,000) (the "Aggregate Maximum Purchase
Price") and, provided further, that the Price Adjustment for the Newark
Property, if any, shall be equal to the amount by which the total actual project
costs for such Property as certified by Seller exceeds the Minimum Purchase
Price for such Property (not to exceed One Million Dollars ($1,000,000), as
provided in Schedule A).
3.4A Intentionally Omitted
3.5 Seller's Option to Terminate. In addition to any other right of
Seller to terminate provided for elsewhere in this Agreement, Seller shall be
entitled to terminate its obligations to sell any Property, and its and/or
Tenant's obligation to lease such Property and any other transaction
contemplated herein (and such termination shall not constitute a default under
any of the related transactions or documents contemplated thereby, including
this Agreement), if Seller elects, in its sole and unfettered discretion, not to
commence or complete development of such Property as a hotel as contemplated by
this Agreement. In the event Seller elects to terminate its obligations to sell
any Property pursuant to this Section 3.5, this Agreement shall terminate and be
of no further force or effect with respect to the affected Property and Seller
shall reimburse to Purchaser the Purchaser's expenses incurred in respect of
such affected Property, not to exceed $30,000 (and direct Escrow Agent to refund
to Purchaser that portion of the Deposit allocable to the affected Property as
provided in Section 10.3).
3.6 Competitor. In the event that any sale, assignment, transfer or
other disposition, for value or otherwise, voluntary or involuntary, by merger,
operation of law or otherwise, in a single transaction or a series of
transactions, of any interest in Purchaser or any Person having an interest in
Purchaser, directly or indirectly, results, directly or indirectly, in a
Competitor owning a Controlling Interest in Purchaser, Seller shall have the
right, but not the obligation, to terminate this Agreement with respect to any
one or more of the Closings which have not yet occurred (and such termination
shall not constitute a default under any of the related transactions or
documents contemplated thereby, including this Agreement), and, solely with
respect to this Section 3.6, Purchaser shall be entitled to direct Escrow Agent
to either (a) refund to Purchaser the entire Deposit (not previously applied at
a Closing or refunded to Purchaser) if Seller elects to terminate all Closings
which have not yet occurred, or (b) refund to Purchaser the portion of the
Deposit allocable to such affected Property as provided in Section 10.3, if
Seller elects to terminate fewer than all of the Closings which have not yet
occurred.
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE.
The obligation of the Purchaser to acquire each of the Properties on
the applicable Closing Date shall be subject to the satisfaction or waiver of
the following conditions precedent on and as of such Closing Date:
4.1 Closing Documents. The Seller shall have delivered to the Purchaser
with respect to the applicable Property:
(a) A grant deed (for each Property located in California) or a special
warranty deed (for the Property located in Virginia), duly executed by the
Seller, conveying to Purchaser good and marketable title to the Property, free
from all liens, encumbrances, security interests, options and adverse claims of
any kind or character, subject to the Permitted Encumbrances and except as
otherwise specifically permitted hereunder;
(b) A Warranty ▇▇▇▇ of Sale, an Assignment of Contracts, an Assignment
of Intangible Property and an Assignment of Construction-Related Contracts, each
duly executed by Seller (or MI, as applicable), transferring and assigning to
Purchaser all rights, title and interest of Seller (and MI, as applicable) in
the Assets, together with, to the extent the same are in the Seller's or MI's
(or their agent's) possession, original (or copies certified by Seller as true
and correct), fully executed copies of all agreements constituting any of the
same;
(c) The Lease for the Property duly executed by Tenant;
(d) The Limited Rent Guaranty duly executed by MI;
(e) The Membership Interest Pledge duly executed by Seller (or, at any
Closing occurring after the first Closing, a written certification and
acknowledgment by Seller that the Membership Interest Pledge continues in force
and effect in accordance with its terms);
(f) A copy of the fully executed Franchise Agreement with respect to
the applicable Property ;
(g) The Owner Agreement duly executed by MI;
(h) A copy of the final certificate of occupancy for the applicable
Property;
(i) An architect's certificate in respect of the Improvements to the
applicable Property in the form attached hereto as Schedule L, or as otherwise
provided in Section 4.2(c) below;
(j) An engineer's certificate in respect of the Improvements to the
applicable Property in the form attached hereto as Schedule M, or as otherwise
provided in Section 4.2(c) below;
(k) Certified copies of applicable resolutions and certificates of
incumbency with respect to the Seller, Tenant, MI, and such other persons as the
Purchaser may reasonably require;
(l) Intentionally omitted.
(m) A certificate of a duly authorized officer of MI and Seller
confirming the continued truth and accuracy of the representations and
warranties of the Seller in this Agreement (subject to such changes as Seller
has given notice of to Purchaser pursuant to Section 6 and subject to Section
4.2(b));
(n) The Building Location Survey;
(o) The "As-Built" Drawings;
(p) The Permits (or copies thereof certified by Seller as true and
correct);
(q) The Contracts (or copies thereof certified by Seller as true and
correct);
(r) Copies of any and all warranties and guarantees pertaining to the
Improvements, specifically including the manufacturers roof membrane warranty
issued with respect to the buildings comprising the Improvements;
(s) Insurance certificates to be provided by Tenant pursuant to the
Lease;
(t) The FF&E Schedule;
(u) Intentionally omitted;
(v) An Owner's affidavit in the usual and customary form of the Title
Company for the purpose of satisfying any request for the same in the applicable
Title Commitment;
(w) Intentionally omitted;
(x) A settlement statement;
(y) Any required bonds and a certificate of substantial completion
substantially in the form set forth in AIA Form G704;
(z) A copy of the final "punch-list" work, if any, required upon
Substantial Completion of the Improvements for such Property certified by
Seller;
(aa) Joint written notification from Seller and Purchaser to Escrow
Agent pursuant to the Escrow Agreement (hereinafter defined) authorizing the
release of the portion of the Deposit allocable to the applicable Property for
application to the Allocable Purchase Price for such Property; and
(bb) Such other documents, certificates and other instruments as may be
reasonably required to consummate the transaction contemplated hereby.
4.2 Condition of Applicable Property
(a) No action shall be pending or threatened for the condemnation or
taking by power of eminent domain of all or any material portion of the
applicable Property;
(b) All material licenses, permits and other authorizations necessary
for the current use, occupancy and operation of the applicable Property shall be
in full force and effect; however, in the event that Seller fails to obtain any
such licenses, permits or other authorizations and discloses same to Purchaser,
Purchaser may, but shall not be required to, waive Seller's compliance with
Section 6.16 of this Agreement and proceed with Closing; and
(c) The Purchaser shall have received an architect's certificate in the
form of Schedule L executed by the Architect and an engineer's certificate in
the form of Schedule M, executed by the Engineer in respect of the applicable
Property; provided, however, that in the event that Seller is not able to
deliver to Purchaser either or both of the foregoing certificates executed by
the Architect and/or Engineer, as applicable, Purchaser shall accept in lieu
thereof, a certificate executed by Seller in substantially the form attached
hereto as Schedule L-1 and/or Schedule M-1, as applicable.
4.3 Title Policies and Surveys.
(a) The Title Company shall be prepared, subject only to payment of the
applicable premium and delivery of all conveyance documents, to issue the title
policies pursuant to the Title Commitments with respect to the applicable
Property, in accordance with Section 2.3.
(b) The Purchaser shall have received the Building Location Survey with
respect to the applicable Property, in accordance with Section 2.4.
4.4 Opinions of Counsel. The Purchaser shall have received a written
opinion from counsel to the Seller and MI (which may be its in-house counsel),
in form and substance reasonably satisfactory to the Purchaser and its counsel,
regarding the organization, good standing and/or authority of the Seller and MI,
the Tenant, and the guarantor under the Limited Rent Guaranty and the
enforceability of this Agreement, the Lease in respect of the applicable
Property, the Limited Rent Guaranty, the Owner Agreement and the Membership
Interest Pledge and such other matters with respect to the transactions
contemplated by this Agreement as the Purchaser may reasonably require.
4.5 FF&E Schedule. No later than twenty (20) days prior to Closing of
the purchase of any Property, Seller shall provide to Purchaser a schedule (the
"FF&E Schedule") of all FF&E at the Property (other than the FF&E listed in the
Plans and Specifications) owned by such Seller and which FF&E is intended to be
part of the Assets to be owned by Purchaser upon and following such Closing.
Upon reasonable prior notice to Seller, Purchaser shall be entitled to inspect
the FF&E at the Property prior to Closing in order to confirm and verify the
FF&E Schedule.
4.6 Other.
(a) The representations and warranties of the Seller and MI
set forth in Section 6 hereof (as the same may have been changed by notice from
Seller as provided therein) shall be true, correct and complete in all material
respects on and as of the Closing Date;
(b) No Act of Bankruptcy on the part of the Seller, MI or
Tenant shall have occurred and remain outstanding as of the Closing Date;
(c) The Seller shall be the sole owner of good and marketable
title to the applicable Property free and clear of all liens, encumbrances,
restrictions, conditions and agreements (other than the Permitted Encumbrances
and this Agreement);
(d) Intentionally Omitted;
(e) There shall be no unsatisfied state or federal tax liens
against or affecting the applicable Seller, or any tax audit of the applicable
Seller in process, which could result in a lien against the applicable Property;
and
(f) There shall be no outstanding, unsettled claim against the
applicable Seller arising under any insurance policies in respect of such Seller
or the applicable Property which could result in a lien against the applicable
Property.
SECTION 5. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE.
The obligation of the Seller to convey and transfer to the Purchaser
each of the Properties on the applicable Closing Date is subject to the
satisfaction or waiver of the following conditions precedent on and as of such
Closing Date:
5.1 Purchase Price. The Purchaser shall deliver to the Seller the
Allocable Purchase Price of the applicable Property as provided in Section 3.3.
5.2 Closing Documents. The Purchaser shall have delivered to the
Seller:
(a) Duly executed and acknowledged counterparts of the
documents described in Subsections 4.1(b), (c), (d), (e), (g), (x) and (aa);
(b) The Guaranty of Landlord's Obligations duly executed by
the Guarantor;
(c) A certificate of a duly authorized officer of the
Purchaser confirming the continued truth and accuracy of the representations and
warranties of the Purchaser in this Agreement;
(d) Certified copies of applicable resolutions and
certificates of incumbency with respect to the Purchaser, the Guarantor, and
such other persons as the Seller or the Tenant may reasonably require; and
(e) Such other documents, certificates and other instruments
as may be reasonably required to consummate the transaction contemplated hereby.
5.3 Opinions of Counsel. The Seller shall have received a written
opinion from (a) Lowndes, Drosdick, Doster, ▇▇▇▇▇▇ & ▇▇▇▇, P.A., counsel to the
Purchaser (or other counsel reasonably acceptable to Seller, MI and its
counsel), in form and substance reasonably satisfactory to Seller and its
counsel, regarding the good standing and authority of the Purchaser and the
Guarantor, and (b) counsel reasonably acceptable to Seller, MI, and its counsel
regarding the enforceability of this Agreement, the Lease, the Owner Agreement,
the Guaranty of Landlord's Obligations and such other matters with respect to
the transactions contemplated by this Agreement as MI, Seller or Tenant may
reasonably require.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SELLER.
To induce the Purchaser to enter into this Agreement, the Seller and
MI, represent and warrant to the Purchaser as follows:
6.1 Status and Authority of the Seller. The Seller is, or will be at or
before Closing, a corporation duly organized, validly existing and in corporate
good standing under the laws of its state of incorporation, and has all
requisite power and authority under the laws of such state and its respective
charter documents to enter into and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. Seller is duly qualified
to transact business and is in good standing in the state in which such Seller's
Property is located.
6.2 Status and Authority of MI. MI is a corporation duly organized,
validly existing and in corporate good standing under the laws of its state of
incorporation, and has all requisite power and authority under the laws of such
state and its respective charter documents to enter into and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. MI has duly qualified to transact business and is in good standing in
each of the states in which the Properties are located.
6.3 Intentionally Omitted
6.4 Status and Authority of Tenant. Tenant is, or will be at Closing, a
limited liability company, duly organized, validly existing and in good standing
under the laws of the State of Delaware and duly qualified to do business and in
good standing under the laws of the state in which the Property leased under the
applicable Lease is located.
6.5 Intentionally Omitted
6.6 Intentionally Omitted
6.7 Intentionally Omitted
6.8 Employees. The Seller shall be responsible for payment of all wages
and salaries payable to, and all vacation pay, pension and welfare benefits and
other fringe benefits accrued with respect to all individuals employed by the
Seller at the Property relating to the period prior to the applicable Closing
and Tenant shall be responsible for payment of all wages, salaries and benefits
relating to the period commencing on and from and after such Closing. At no time
hereunder, upon Closing or under the Lease, shall any of the employees at the
Property including employees of any manager thereof, be or be deemed to be the
employees of Purchaser, and upon and after Closing, be or be deemed to be
transferred to Purchaser. If required, the Seller will comply with the notice
and other requirements under the Worker Adjustment Retraining and Notification
Act ("WARN Act"), the Consolidated Omnibus Budget Reconciliation Act ("COBRA")
or any similar state or local legislation with respect to such employee matters,
and such obligation shall survive Closing, notwithstanding anything to the
contrary in the WARN Act. Because Purchaser at no time will be or be deemed to
be the employer of employees at the Property, it is expressly understood and
agreed that Purchaser is not and shall not be responsible or liable, directly or
indirectly, for payment of any benefits, severance liability, compensation, pay
or other obligations, of whatever nature, due or alleged to be due to any
employee at the Property including employees of any manager thereof, or of the
Seller attributable to any time period up to, upon and after Closing. Similarly,
there shall be no union agreements, pension plans, health plans, benefit plans,
deferred compensation plans, bonus plans or vacation plans or similar agreements
for or concerning such employees which shall be binding upon Purchaser.
6.9 Existing Agreements. There are no (or will not be at the Closing)
service contracts, maintenance agreements, leasing commissions or brokerage
agreements, repair contracts, property management contracts, contracts for the
purchase or delivery of labor, services, materials or goods, supplies or
equipment, leases, licensees or occupancy agreements, or similar agreements
entered into by or on behalf of any Seller which will be obligations of
Purchaser after the Closing, other than (i) the Permitted Encumbrances, (ii) the
documents to be assigned to the Purchaser pursuant to the terms hereof, (iii)
the Contracts, (iv) the Lease, (v) the Owner Agreement, and (vi) any other
document or instrument given or entered into in connection with Closing.
6.10 Tax Returns. All tax returns for privilege, gross receipts,
excise, sales and use, personal property and franchise taxes required by law to
be filed by a Seller of any Property prior to the date of the Closing applicable
to such Property will be prepared and duly filed, prior to the Closing (or after
Closing with respect to pre-Closing matters) and all taxes, if any, shown on
such returns or otherwise determined to be due, together with any interest or
penalties thereon, will be paid by Seller prior to Closing, or allowance made
therefor at Closing.
6.11 Action of MI and Seller. MI and Seller have taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
and upon the execution and delivery of any document to be delivered by MI or the
Seller on or prior to each Closing Date, such document shall constitute the
valid and binding obligation and agreement of MI and/or Seller, as applicable,
enforceable against MI and/or Seller, as applicable, as the case may be, in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors and general
principles of equity.
6.12 No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by the Seller and/or MI, nor compliance with the
terms and provisions hereof, will result in any breach of the terms, conditions
or provisions of, or conflict with or constitute a default under, or result in
the creation of any lien, charge or encumbrance upon any Property pursuant to
the terms of any indenture, mortgage, deed of trust, note, evidence of
indebtedness or any other agreement or instrument by which the Seller and/or MI,
as the case may be, is bound.
6.13 Litigation. Neither Seller nor MI has received written notice of
and, to the Seller's and MI's knowledge, no investigation, action or proceeding
is pending or, to the Seller's and MI's knowledge, threatened, and the Seller
has not received written notice of and, to the Seller's and MI's knowledge, no
investigation looking toward such an action or proceeding has begun, which (a)
questions the validity of this Agreement or any action taken or to be taken
pursuant hereto, or (b) may result in or subject the applicable Property to a
material liability which is not covered by insurance, whether or not Purchaser
is indemnified by Seller and/or MI with respect to the same, or (c) involves
condemnation or eminent domain proceedings against any material part of the
applicable Property.
6.14 Not A Foreign Person. The Seller is not a "foreign person" within
the meaning of Section 1445 of the United States Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.
6.15 Construction Contracts; Mechanics' Liens. At the Closing, there
will be no outstanding contracts made by the Seller for the construction or
repair of any Improvements relating to the Property which have not been fully
paid for or provision for the payment of which has not been made by Seller and
Seller shall discharge and have released of record or bonded all mechanics' or
materialmen's liens, if any, arising from any labor or materials furnished to
such Property prior to the Closing to the extent any such lien is not insured
over by the Title Company or bonded over pursuant to applicable law.
6.16 Permits, Licenses. As of the Closing related to a Property, there
will be in effect all material licenses (including liquor licenses, if
required), permits and other authorizations necessary for the then current use,
occupancy and operation of such Property, unless failure to obtain any such
licenses, permits and other authorizations is disclosed to Purchaser, and
Purchaser waives compliance herewith in accordance with Section 4.2(b) of this
Agreement.
6.17 Hazardous Substances. Except as otherwise disclosed to Purchaser,
including without limitation any matters described in the Environmental Reports
and any Updated Environmental Reports, to the Seller's and MI's knowledge, the
Seller of the subject Property, since the date that Seller acquired title to the
Property, has not stored or disposed of (or engaged in the business of storing
or disposing of, or authorized the storage or disposal of) nor has released nor
caused nor authorized the release of any hazardous waste, contaminants, oil,
radioactive or other material on such Property, or any portion thereof, the
removal of which is required or the maintenance of which is prohibited or
penalized by any applicable Federal, state or local statutes, laws, ordinances,
rules or regulations, and which has not as of the Closing Date been removed from
the subject Property in accordance with such applicable statutes, laws,
ordinances, rules or regulations.
6.18 Insurance. The Seller has received no written notice from any
insurance carrier of defects or inadequacies in the Property which, if
uncorrected, would result in a termination of insurance coverage or a material
increase in the premiums charged therefor.
6.19 Condition of Property. To MI's and Seller's knowledge, the
Improvements on the Property, as of the applicable Closing Date, will be in good
working order and repair, mechanically and structurally sound, free from
material defects in materials and workmanship, constructed with materials that
are "new," subject to such "punch list" work as may be required upon Substantial
Completion of such Improvements.
6.20 Financial Information. Financial information, including, without
limitation, all books and records and financial statements relating to the
applicable Property, which have been provided to Purchaser are true, correct and
complete in all material respects.
6.21 Contracts. Seller has performed all of its obligations under each
Contract to which the applicable Seller is a party or is subject and no fact or
circumstance has occurred, which by itself or with the passage of time or the
giving of notice or both would constitute a default under any such Contract.
Further, to Seller's knowledge, all other parties to such Contracts have
performed all of their obligations thereunder in all material respects and are
not in default thereunder.
6.22 Title to FF&E. The applicable Seller has good and marketable title
to the FF&E described on the FF&E Schedule and in the Plans and Specifications
(to the extent that the Plans and Specifications describe FF&E).
6.23 FF&E. The FF&E Schedule and the Plans and Specifications (to the
extent the Plans and Specifications describe FF&E) accurately describe in all
material respects the FF&E owned by the applicable Seller and located at such
Seller's Property and, to Seller's knowledge, such FF&E is "new" and has not
been used prior to its use at such Property.
The representations and warranties made in this Agreement by Seller
and, if applicable, MI, in Section 6.1 through Section 6.14, inclusive, are made
as of the date hereof and shall be deemed remade by the Seller and, if
applicable, MI, as of each Closing Date for the Property then being conveyed by
the Seller, with the same force and effect as if made on, and as of, such date;
and the representations and warranties made in this Agreement by Seller and, if
applicable, MI, in Section 6.15 through Section 6.23, inclusive, shall be made
as of the Closing Date in respect of the Property being sold and transferred,
provided, however, that, the Seller shall have the right, from time to time
prior to the applicable Closing Date, with respect to any Property as to which a
Closing has not yet occurred, to modify the representations and warranties made
in Section 6.12 (No Violation of Agreements), Section 6.13 (Litigation) and
Section 6.18 (Insurance) as a result of changes in applicable conditions beyond
the control of Seller, by notice to the Purchaser and, in such event, the
representations and warranties shall be deemed modified to the extent required
by such changes, and (a) if Seller and MI agree to indemnify Purchaser against
any loss that may be suffered by Purchaser as a result of such changes, then
Purchaser will be required to close hereunder without any abatement of Allocable
Purchase Price or changes in any other condition, and (b) if Seller and MI elect
not to so indemnify Purchaser, Purchaser shall have the option to either accept
the change and close, or reject the change, in which case Purchaser's obligation
to purchase the Property in question shall terminate. All representations and
warranties made in this Agreement by the Seller and MI shall survive the
applicable Closing for a period of one year. Any action, suit or proceeding with
respect to the truth, accuracy or completeness of any such representation or
warranty shall be commenced, if at all, on or before the date which is twelve
(12) months after the date of such Closing and, if not commenced on or before
such date, thereafter shall be void and of no force or effect.
Prior to any Closing contemplated by this Agreement, Purchaser will
have had the opportunity to investigate independently all physical aspects of
the Property which is the subject of the Closing, and to make all such
independent inspections and/or investigations of such Property that Purchaser
deems necessary or desirable including, without limitation, review of the
building permits, certificates of occupancy, environmental audits and
assessments, toxic reports, surveys, investigation of land use and development
rights, development restrictions and conditions that are or may be imposed by
governmental agencies, agreements with associations or other private parties
affecting or concerning the Property, the condition of title, soils and
geological reports, engineering and structural certificates, tests and
third-party reports (if any), governmental agreements and approvals and
architectural plans and site plans. Purchaser represents and warrants that, in
entering into this Agreement, Purchaser has not relied on any representation,
warranty, promise or statement, express or implied, of Seller or MI, or anyone
acting for or on behalf of Seller or MI, other than as expressly set forth in
this Agreement; AND THAT, AS A MATERIAL INDUCEMENT TO THE EXECUTION AND DELIVERY
OF THIS AGREEMENT BY SELLER AND MI, PURCHASER ACKNOWLEDGES THAT THE PROPERTY
OWNED BY THE SELLER WILL, UPON THE ACQUISITION BY PURCHASER OF SUCH PROPERTY, BE
IN ITS "AS IS" CONDITION AND IN ITS "AS IS" STATE OF REPAIR, WITH ALL FAULTS
SUBJECT ONLY, HOWEVER, TO THE EXPRESS COVENANTS, REPRESENTATIONS AND WARRANTIES
MADE BY THE SELLER AND MI FOR THE BENEFIT OF PURCHASER EXPRESSLY SET FORTH IN
THIS AGREEMENT.
Except as otherwise expressly provided in this Agreement or any
documents executed and delivered by Seller or MI to the Purchaser at the
Closing, the Seller and MI disclaim the making of any representations or
warranties, express or implied, regarding the Properties or matters affecting
the same, whether made by the Seller or MI, on the Seller's behalf or on MI's
behalf, or otherwise, including, without limitation, the physical condition of
the Properties, title to, the boundaries or other survey matters of, the Real
Property, pest control matters, soil conditions, the presence, existence or
absence of hazardous wastes, toxic substances or other environmental matters,
compliance with building, health, safety, land use and zoning laws, regulations
and orders, structural and other engineering characteristics, traffic patterns,
market data, economic conditions or projections, and any other information
pertaining to the Properties or the market and physical environments in which
they are located. The Purchaser acknowledges that the Purchaser has entered into
this Agreement with the intention of making and relying upon its own
investigation or that of third parties with respect to the physical,
environmental, economic and legal condition of each Property, except as
expressly provided in Section 6.12, Section 6.13, Section 6.15, Section 6.16,
Section 6.17, Section 6.19, Section 6.20 and Section 6.22. The Purchaser further
acknowledges that it has not received from or on behalf of the Seller or MI, any
accounting, feasibility, marketing, economic, tax, legal, architectural,
engineering, property management or other advice with respect to this
transaction and is relying solely upon the advice of third party accounting,
tax, legal, architectural, engineering, property management and other advisors.
As used in this Agreement, the phrases "to Seller's knowledge," "to
MI's knowledge" and "to Seller's and MI's knowledge" or words of similar import
shall mean the actual (and not constructive or imputed) knowledge, without
independent investigation or inquiry, of ▇▇▇▇▇ ▇▇▇▇▇▇ (and any subsequent
officer of Lodging Development at MI having direct oversight responsibility for
the transactions contemplated hereby), or ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (and any subsequent
finance officer of MI having direct oversight responsibility for the
transactions contemplated hereby), or ▇▇▇▇ ▇▇▇ (and any subsequent Vice
President - Design and Project Management of Marriott International Design and
Construction Services, Inc. having direct oversight responsibility for the
transactions contemplated hereby) or of an employee of Seller or MI, or any
Affiliated Person as to either, assigned to work at the Property in connection
with construction of the Improvements and/or in connection with the installment
of the FF&E on a full-time basis, if any.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
To induce the Seller to enter into this Agreement, the Purchaser and,
if Purchaser is other than CHLP, CHLP represents and warrants to the Seller as
follows:
7.1 Status and Authority of the Purchaser. The Purchaser is duly
organized and validly existing under the laws of the jurisdiction in which it
was formed, and has all requisite power and authority under the laws of such
state and under its charter documents to enter into and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby. The
Purchaser is, or will be by the Closing Date, duly qualified and in good
standing in each of the states in which the Properties are located.
7.2 Status and Authority of the Guarantors. CHLP is a limited
partnership duly organized and validly existing under the laws of the State of
Delaware. CHP is a corporation duly organized and validly existing under the
laws of the State of Maryland. CHP and CHLP each has all requisite power and
authority under the laws of the state under whose laws it has organized or
incorporated and under their respective charter documents to enter into and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby. CHLP is, or will be by the Closing Date, duly qualified and
in good standing in each of the states in which the Properties being acquired
are located.
7.3 Action of the Purchaser. The Purchaser has taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
and upon the execution and delivery of any document to be delivered by the
Purchaser on or prior to each Closing Date, such document shall constitute the
valid and binding obligation and agreement of the Purchaser, enforceable against
the Purchaser in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting the rights and remedies of creditors and general
principles of equity.
7.4 No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by the Purchaser, nor compliance with the terms
and provisions hereof, will result in any breach of the terms, conditions or
provisions of, or conflict with or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any property or assets of the
Purchaser pursuant to the terms of any indenture, mortgage, deed of trust, note,
evidence of indebtedness or any other agreement or instrument by which the
Purchaser is bound.
7.5 Litigation. Purchaser has received no written notice of and, to
Purchaser's knowledge, no investigation, action or proceeding is pending and, to
Purchaser's knowledge, no action or proceeding is threatened and Purchaser has
received no notice of, and to Purchaser's knowledge, no investigation looking
toward such an action or proceeding has begun, which questions the validity of
this Agreement or any action taken or to be taken pursuant hereto.
The representations and warranties made in this Agreement by the
Purchaser are made as of the date hereof and shall be deemed remade by the
Purchaser as of the applicable Closing Date with the same force and effect as if
made on, and as of, such date. All representations and warranties made in this
Agreement by the Purchaser shall survive the applicable Closing for a period of
one year. Any action, suit or proceeding with respect to the truth, accuracy or
completeness of any such representation or warranty shall be commenced and
served, if at all, on or before the date which is twelve (12) months after the
date of such Closing and, if not commenced on or before such date, thereafter
shall be void and of no force or effect.
As used in this Agreement, the phrase "to Purchaser's knowledge" or
words of similar import shall mean the actual (and not constructive or imputed)
knowledge, without independent investigation or inquiry, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇.
SECTION 8. COVENANTS OF THE SELLER.
The Seller and MI hereby covenant with the Purchaser as follows:
8.1 Compliance with Laws. From the date of this Agreement to the
Closing Date for the purchase of a Property, Seller shall use commercially
reasonable efforts to comply in all material respects with (i) all laws,
regulations and other requirements affecting the Property, from time to time
applicable, of every governmental body having jurisdiction of such Property or
the use or occupancy of any Improvements located thereon and (ii) all terms,
covenants and conditions of instruments of record affecting such Property.
8.2 Completion of Punch List; Correction of Defects. In respect of any
Property which has been sold and transferred to Purchaser at a Closing
hereunder, to complete, at the Seller's or MI's cost, all punch-list items and
any work required to obtain the final Certificate of Occupancy if not available
at Closing and to correct, at Seller's or MI's cost, all defects in the
Improvements that are discovered and disclosed by or to the Seller within one
year following the acceptance of the Improvements by the Seller from the general
contractor for such Improvements. At Closing, Seller and MI shall, at
Purchaser's request, certify the outside date of such one-year warranty period
to Purchaser. The Purchaser agrees to cooperate with the Seller, MI and/or the
Tenant in enforcing any applicable warranties or guaranties with respect to such
defects. Seller and/or Tenant shall have the exclusive right and obligation to
pursue the aforementioned rights and remedies; however, in the event that Seller
and/or Tenant fails to exercise such rights and remedies, after ten (10) days
from notice by Purchaser to Seller of such failure to exercise such rights and
remedies, Purchaser shall then have the right to pursue the same. The provisions
of this Section 8.2 shall survive any Closing under this Agreement.
8.3 Insurance. The Seller shall, at no expense to the Seller,
reasonably cooperate with Purchaser in connection with Purchaser's obtaining any
insurance which may be required to be maintained by Purchaser under the terms of
the Lease for each Property following the Closing.
8.4 Material Defects in Structural Systems. If, to Seller's or MI's
knowledge, a material construction defect or a material design defect in the
structural system of the Improvements being constructed on a Property exists at
any time during construction and prior to Closing, Seller or MI shall disclose
the same to Purchaser, provided that neither Seller nor MI shall have any
obligation to correct such disclosed defects if the cost to correct such defects
exceeds $250,000. If such cost exceeds $250,000 and Seller and MI elect not to
correct, then Purchaser's sole remedy shall be to terminate this Agreement with
respect to the affected Property, in which event this Agreement shall terminate
and be of no further force or effect with respect to the affected Property and
Seller shall reimburse to Purchaser the Purchaser's expenses incurred in respect
of such affected Property, not to exceed $30,000 (and direct Escrow Agent to
refund to Purchaser the portion of the Deposit allocable to such affected
Property as provided in Section 10.3).
8.5 Final Payment. Upon final payment to the general contractor in
respect of a given Property, Seller shall provide Purchaser with a copy of the
final requisition received from the general contractor, evidence of Seller's
payment thereof, and a final release of liens.
SECTION 9. APPORTIONMENTS.
9.1 Apportionments. Representatives of the Purchaser, Tenant and the
Seller shall make and perform any and all of the adjustments and apportionments
which are appropriate and usual for a transaction of this nature, taking into
account the applicable provisions of the Leases and this Agreement. The
adjustments hereunder shall be calculated or paid in an amount based upon a fair
and reasonable estimated accounting performed and agreed to by representatives
of the Seller and the Purchaser at the applicable Closing. Subsequent final
adjustments and payments shall be made in cash or other immediately available
funds as soon as practicable after the Closing Date, and in any event within
ninety (90) days after such Closing Date, based upon an agreed accounting
performed by representatives of the Seller, Tenant and the Purchaser. In the
event the parties have not agreed with respect to the adjustments required to be
made pursuant to this Section 9.1 within such ninety-day period, upon
application by either party, a certified public accountant reasonably acceptable
to the Purchaser and the Seller shall determine any such adjustments which have
not theretofore been agreed to between the Seller and the Purchaser. The charges
of such accountant shall be borne fifty percent (50%) by the Seller and fifty
percent (50%) by the Purchaser.
9.2 Closing Costs. (a) All Third-Party Costs (hereinafter defined)
shall be borne fifty percent (50%) by Seller and fifty percent (50%) by
Purchaser. As used herein, the term "Third-Party Costs" shall include the
following: (i) environmental reports prepared in connection with the purchase
and sale of the Properties pursuant to this Agreement; (ii) property surveys of
the Properties prepared in connection with due diligence under this Agreement;
(iii) premiums for the title insurance policies to be provided at each Closing
pursuant to Section 2.3 and Section 4.3(a); (iv) any closing or escrow charges
or other expenses payable to the Title Company conducting the Closing; and (v)
property appraisals prepared in connection with the purchase and sale of the
Properties pursuant to this Agreement.
(b) Seller and Purchaser shall each pay one-half of any transfer,
sales, use, recordation or other similar taxes, impositions or expenses incurred
in connection with the Closings of the transactions contemplated hereby and/or
the recordation or filing of any documents or instruments in connection
therewith or the sale, transfer or conveyance of any of the Property from Seller
to Purchaser or the lease of the Property from Purchaser to Tenant; provided
Seller shall be solely responsible for any taxes due in respect of its income,
net worth or capital, if any, and any privilege, sales and occupancy taxes, due
or owing to any governmental entity in connection with the operation of the
Property for any period of time prior to Closing, and Purchaser or Tenant, as
applicable, shall be solely responsible for all such taxes for any period from
and after Closing, and provided further that any income tax arising as a result
of the sale and transfer of the Property by Seller to Purchaser shall be the
sole responsibility of Seller and any income tax arising as a result of the
lease of the Property from Purchaser to Tenant shall be the sole responsibility
of Tenant or Purchaser, as applicable.
(c) Except as expressly provided in this Section 9, Seller and
Purchaser shall each pay their own separate costs and expenses incurred in
connection with the transactions contemplated hereby, including the fees and
expenses of counsel in connection with the preparation and negotiation of this
Agreement, the Leases and all other documents and instruments in connection
therewith and in consummating any and all of the transactions contemplated
hereby and thereby.
(d) The obligations of the parties under this Section 9 shall survive
the Closings.
SECTION 10. DEFAULT.
10.1 Default by the Seller. If the Seller or MI shall have made any
representation or warranty herein which shall be untrue in any material respect
when made or updated as herein provided, or if the Seller or MI shall fail to
perform any of the material covenants and agreements contained herein and such
condition or failure continues for a period of ten (10) days (or such additional
period as may be reasonably required to effectuate a cure of the same) after
notice thereof from the Purchaser, the Purchaser may terminate this Agreement
with respect to the affected Property and Seller shall reimburse to Purchaser
the Purchaser's expenses incurred in respect of such affected Property, not to
exceed $30,000 (and direct Escrow Agent to refund to Purchaser the portion of
the Deposit allocable to the affected Property as provided in Section 10.3),
and/or the Purchaser may pursue any and all remedies available to it at law or
in equity, including, but not limited to, a suit for specific performance or
other equitable relief; provided, however, that, (x) in no event shall the
Seller or MI be liable for (and Purchaser hereby agrees that it will not
commence or prosecute any action for) consequential or punitive or exemplary
damages and (y) in no event shall the aggregate liability of the Seller or MI
under this Agreement exceed an amount equal to Two Million Three Hundred
Ninety-One Thousand Nine Hundred Fifty Dollars ($2,391,950) plus the reasonable
attorneys' fees and expenses incurred by Purchaser in enforcing the Agreement
against Seller and/or MI in respect of Seller's or MI's default. It is
understood and agreed that for purposes of this Section 10.1, if a default
results from a false representation or warranty, such default shall be deemed
cured if the events, conditions, acts or omissions giving rise to the falsehood
are cured within the applicable cure period even though, as a technical matter,
such representation or warranty was false as of the date actually made.
10.2 DEFAULT BY THE PURCHASER. IF THE PURCHASER SHALL HAVE MADE ANY
REPRESENTATION OR WARRANTY HEREIN WHICH SHALL BE UNTRUE OR MISLEADING IN ANY
MATERIAL RESPECT OR IF THE PURCHASER SHALL FAIL TO PERFORM ANY OF THE COVENANTS
AND AGREEMENTS CONTAINED HEREIN AND SUCH CONDITION OR FAILURE SHALL CONTINUE FOR
A PERIOD OF TEN (10) DAYS (OR SUCH ADDITIONAL PERIOD AS MAY BE REASONABLY
REQUIRED TO EFFECTUATE A CURE OF THE SAME; PROVIDED THAT NO SUCH EXTENSION OF
TIME SHALL APPLY TO PURCHASER'S FAILURE TO PAY THE ALLOCABLE PURCHASE PRICE AT
CLOSING OR OTHERWISE OPERATE TO EXTEND THE CLOSING DATE) AFTER NOTICE THEREOF
FROM THE SELLER, THE SELLER MAY, AS ITS SOLE AND EXCLUSIVE REMEDY, AT LAW, OR IN
EQUITY, TERMINATE THIS AGREEMENT WITH RESPECT TO ANY PROPERTY OR PROPERTIES AS
TO WHICH A CLOSING SHALL NOT YET HAVE OCCURRED, WHEREUPON, THE PURCHASER SHALL
PAY TO THE SELLER, AS LIQUIDATED DAMAGES AND NOT AS A PENALTY FOR AND ON ACCOUNT
OF SUCH PROPERTIES (BUT NOT FOR EACH PROPERTY), THE SUM OF TWO MILLION THREE
HUNDRED NINETY-ONE THOUSAND NINE HUNDRED FIFTY DOLLARS ($2,391,950) PLUS THE
REASONABLE ATTORNEYS' FEES AND EXPENSES INCURRED BY
SELLER IN ENFORCING THE AGREEMENT AGAINST PURCHASER IN RESPECT OF PURCHASER'S
DEFAULT.
-------------------------------------- -----------------------------------------
PURCHASER'S INITIALS SELLER'S INITIALS
-------------------------------------- -----------------------------------------
----------------------------- -----------------------------------
CNL HOSPITALITY TOWNEPLACE MANAGEMENT
PARTNERS, LP CORPORATION
-----------------------------------
RESIDENCE INN BY MARRIOTT, INC.
-----------------------------------
MARRIOTT INTERNATIONAL, INC.
------------------------------------ -------------------------------------------
It is understood and agreed that for purposes of this Section 10.2, if
a default results from a false representation or warranty, such default shall be
deemed cured if the events, conditions, acts or omissions giving rise to the
falsehood are cured within the applicable cure period even though, as a
technical matter, such representation or warranty was false as of the date
actually made.
10.3 Purchaser's Deposit. In order to secure Purchaser's performance
hereunder, including, without limitation, its obligation to pay liquidated
damages as provided in Section 10.2, Purchaser has heretofore provided, or will
provide immediately upon the execution and delivery of this Agreement, a Two
Million Three Hundred Ninety-One Thousand Nine Hundred Fifty Dollars
($2,391,950) cash deposit (said deposit is herein referred to as the "Deposit")
to the Escrow Agent. The Escrow Agent shall hold and disburse the Deposit
pursuant to the terms of the Escrow Agreement entered into among Seller,
Purchaser and Escrow Agent of even date herewith, a true copy of which is
attached hereto as Schedule P (the "Escrow Agreement").
If Purchaser defaults on its obligations hereunder such that Seller
becomes entitled to the $2,391,950 liquidated damages as provided in Section
10.2, Seller shall be immediately entitled to the entire ($2,391,950) Deposit as
such liquidated damages. If Purchaser elects to terminate this Agreement in
respect of a Property pursuant to Sections 2.3, 2.4, 2.5, 2.7 or 8.4, or if
Seller elects to terminate this Agreement pursuant to the provisions of Section
3.5 or 3.6, or if either party elects to terminate this Agreement pursuant to
Section 3.1, Purchaser shall be entitled to the prompt return of the portion of
the Deposit allocable to the affected Property (as provided below) and the
parties shall so direct the Escrow Agent to pay such portion to Purchaser and
thereupon shall have no further obligations hereunder in respect of such
Property except any obligations which expressly survive a termination of this
Agreement. In the event Seller becomes entitled to the Deposit hereunder, the
Escrow Agent shall promptly disburse the Deposit to Seller in the manner
provided for in the Escrow Agreement.
The Deposit shall be held by Escrow Agent in an interest-bearing
account and Escrow Agent shall be authorized to deliver the interest accrued
thereon from time to time to Purchaser. Upon the occurrence of Closing in
respect of a given Property, the Escrow Agent shall return to the Purchaser that
portion of the Deposit allocable to the Property being closed upon. For purposes
hereof, the Deposit shall be allocated among the Properties as follows:
Residence Inn, Mira Mesa, California, $771,150; Residence Inn, Merrifield,
Virginia, $940,800; TownePlace Suites, Newark, California, $680,000. Any portion
of the Deposit not applied to liquidated damages and/or reasonable attorneys'
fees and expenses pursuant to Section 10.2., or previously returned to Purchaser
pursuant to the terms hereof will be returned to Purchaser promptly following
the occurrence of the Closing of all three (3) Properties.
SECTION 11. MISCELLANEOUS.
11.1 Agreement to Indemnify. (a) Subject to any express provisions of
this Agreement to the contrary, from and after any Closing, with respect to the
applicable Property, (i) the Seller and, if Seller is not MI, MI shall
indemnify, defend and hold harmless the Purchaser from and against any and all
obligations, claims, losses, damages, liabilities, and expenses (including,
without limitation, reasonable attorneys' and accountants' fees and
disbursements) arising out of (v) any termination of employment of employees at
any Property prior to or upon the Closing with respect to such Property
resulting from the termination of employment of such employees by Seller or its
operator and/or the failure of Tenant to hire such employees (including, without
limitation, severance pay, wrongful discharge claims, and claims and/or fines
under federal, state or local statutes or regulations, including without
limitation the Worker Adjustment and Retraining Notification Act), (w) the
employment of such individuals prior to the Closing Date, including, without
limitation, employment-related claims; COBRA-related claims; disability claims;
vacation; sick leave; wages; salaries; payments due (or allocable) to any
medical, pension, and health and welfare plans, and any other employee benefit
plan established for the employees at the Property; and employee-related tax
obligations such as, but not limited to, social security and unemployment taxes
accrued as of the Closing Date, (x) events, acts, or omissions of the Seller
that occurred in connection with its ownership or operation of the Seller's
Property prior to the applicable Closing Date or obligations accruing prior to
the applicable Closing Date under any Contract of Seller (except to the extent
of any adjustment made in respect of such Contract at Closing), (y) any material
breach of a representation or warranty made by Seller and, if Seller is not MI,
MI under Section 6 (as such representations and warranties may be modified
pursuant to said Section 6 and subject to the one-year limitation period set
forth therein), or (z) any claim against Purchaser for damage to property of
others or injury to or death of any person or any debts or obligations of or
against Seller and arising out of any event occurring on or about or in
connection with Seller's Property or any portion thereof, at any time or times
prior to the applicable Closing Date, and (ii) the Purchaser and, if Purchaser
is not CHLP, CHLP shall indemnify, defend and hold harmless the Seller from and
against any and all obligations, claims, losses, damages, liabilities and
expenses (including, without limitation, reasonable attorneys' and accountants'
fees and disbursements) arising out of (x) events, acts, or omissions of the
Purchaser that occur in connection with its ownership or operation of the
Property from and after the applicable Closing Date or obligations accruing from
and after the applicable Closing Date under any Contract (except to the extent
of any adjustment made in respect of such Contract at Closing), (y) any material
breach of a representation or warranty made by Purchaser and, if Purchaser is
not CHLP, CHLP under Section 7 (and subject to the one year limitation period
set forth therein), or (z) any claim against Seller for damage to property of
others or injury to or death of any person or any claims for any debts or
obligations of or against Seller and arising out of any event occurring on or
about or in connection with the Property or any portion thereof, at any time or
times from and after the applicable Closing Date. The provisions of this Section
11.1 shall not apply to any liabilities or obligations with respect to hazardous
substances, the liabilities of the parties with respect thereto being governed
by the representation and warranty of Seller set forth in Section 6.17.
(b) Whenever it is provided in this Agreement that an obligation will
continue after Closing as an obligation of Purchaser or be assumed by Purchaser
after the applicable Closing, the Purchaser and, if Purchaser is not CHLP, CHLP
shall be deemed to have also agreed to indemnify and hold harmless the Seller
and MI and their respective successors and assigns from and against all claims,
losses, damages, liabilities, costs, and expenses (including, without
limitation, reasonable attorneys' and accountants' fees and expenses) arising
from any failure of the Purchaser to perform the obligation so continued or
assumed after the applicable Closing (but not with respect to any act or
omission which occurred prior to Closing).
(c) Whenever either party shall learn through the filing of a claim or
the commencement of a proceeding or otherwise of the existence of any liability
for which the other party is or may be responsible under this Agreement, the
party learning of such liability shall notify the other party promptly and
furnish such copies of documents (and make originals thereof available) and such
other information as such party may have that may be used or useful in the
defense of such claims and shall afford said other party full opportunity to
defend the same in the name of such party and shall generally cooperate with
said other party in the defense of any such claim.
(d) The provisions of this Section 11.1 shall survive the Closings
hereunder and the termination of this Agreement. All representations and
warranties made in this Agreement shall survive the applicable Closing for a
period of one year. Any action, suit or proceeding with respect to the truth,
accuracy or completeness of any such representation or warranty shall be
commenced, if at all, on or before the date which is twelve (12) months after
the date of such Closing and served promptly (but in no event later than sixty
(60) days after commencement) and, if not commenced on or before such date and
so served, thereafter shall be void and of no force or effect.
11.2 Brokerage Commissions. Each of the parties hereto represents to
the other party that it dealt with no broker, finder or like agent in connection
with this Agreement or the transactions contemplated hereby, and that it
reasonably believes that there is no basis for any other person or entity to
claim a commission or other compensation for bringing about this Agreement or
the transactions contemplated hereby. The Seller shall indemnify and hold
harmless the Purchaser and its successors and assigns from and against any loss,
liability or expense, including, reasonable attorneys' fees, arising out of any
claim or claims for commissions or other compensation for bringing about this
Agreement or the transactions contemplated hereby made by any broker, finder or
like agent, if such claim or claims are based in whole or in part on dealings
with the Seller. The Purchaser shall indemnify and hold harmless the Seller and
its successors and assigns from and against any loss, liability or expense,
including, reasonable attorneys' fees, arising out of any claim or claims for
commissions or other compensation for bringing about this Agreement or the
transactions contemplated hereby made by any broker, finder or like agent, if
such claim or claims are based in whole or in part on dealings with the
Purchaser. Nothing contained in this section shall be deemed to create any
rights in any third party. The provisions of this Section 11.2 shall survive the
Closings hereunder and any termination of this Agreement.
11.3 Intentionally Omitted.
11.4 Publicity. The parties agree that no party shall, with respect to
this Agreement and the transactions contemplated hereby, contact or conduct
negotiations with public officials, make any public pronouncements, issue press
releases or otherwise furnish information regarding this Agreement or the
transactions contemplated hereby to any third party without the consent of the
other party, which consent shall not be unreasonably withheld, conditioned or
delayed, except as may be required by law or as may be reasonably necessary, on
a confidential basis, to inform any rating agencies, potential sources of
financing, financial analysts, or to entities involved with a sale of a
controlling interest in the Seller, the Purchaser or any of their affiliates or
to receive legal, accounting and/or tax advice; provided, however, that, if such
information is required to be disclosed by law, the party so disclosing the
information will use reasonable efforts to give notice to the other party as
soon as such party learns that it must make such disclosure.
11.5 Notices. (a) Any and all notices, demands, consents, approvals,
offers, elections and other communications required or permitted under this
Agreement shall be deemed adequately given if in writing and the same shall be
delivered either in hand, by telecopier with written acknowledgment of receipt,
or by mail or Federal Express or similar expedited commercial carrier, addressed
to the recipient of the notice, postpaid and registered or certified with return
receipt requested (if by mail), or with all freight charges prepaid (if by
Federal Express or similar carrier).
(b) All notices required or permitted to be sent hereunder shall be
deemed to have been given for all purposes of this Agreement upon the date of
acknowledged receipt, in the case of a notice by telecopier, and, in all other
cases, upon the date of receipt or refusal, except that whenever under this
Agreement a notice is either received on a day which is not a Business Day or is
required to be delivered on or before a specific day which is not a Business
Day, the day of receipt or required delivery shall automatically be extended to
the next Business Day.
(c) All such notices shall be addressed,
if to the Seller to:
Marriott International, Inc
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/924.11
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasury
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
with a copy to:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/923.00
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Law Department
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
and
Holland & Knight LLP ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
If to the Purchaser, to:
CNL Hospitality Partners, LP
CNL Center at City Commons
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Senior Vice President of Finance and Administration
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
with a copy to:
Lowndes, Drosdick, Doster, ▇▇▇▇▇▇ & ▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Post Office Box 2809
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
If to MI:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/924.11
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasury
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/923.00
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Law Department
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
and
Holland & Knight LLP ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
(d) By notice given as herein provided, the parties hereto and their
respective successors and assigns shall have the right from time to time and at
any time during the term of this Agreement to change their respective addresses
effective upon receipt by the other parties of such notice and each shall have
the right to specify as its address any other address within the United States
of America.
11.6 Waivers, Etc. Any waiver of any term or condition of this
Agreement, or of the breach of any covenant, representation or warranty
contained herein, in any one instance, shall not operate as or be deemed to be
or construed as a further or continuing waiver of any other breach of such term,
condition, covenant, representation or warranty or any other term, condition,
covenant, representation or warranty, nor shall any failure at any time or times
to enforce or require performance of any provision hereof operate as a waiver of
or affect in any manner such party's right at a later time to enforce or require
performance of such provision or any other provision hereof. This Agreement may
not be amended, nor shall any waiver, change, modification, consent or discharge
be effected, except by an instrument in writing executed by or on behalf of the
party against whom enforcement of any amendment, waiver, change, modification,
consent or discharge is sought.
11.7 Assignment; Successors and Assigns. This Agreement and all rights
and obligations hereunder shall not be assignable by any party without the
written consent of the other party, except that the Purchaser may assign this
Agreement to any entity wholly owned, directly or indirectly, by CHLP provided,
however, that, in the event this Agreement shall be assigned to any entity
wholly owned, directly or indirectly, by CHLP, CHLP shall remain fully and
primarily liable for the obligations of the "Purchaser" hereunder. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Agreement is
not intended and shall not be construed to create any rights in or to be
enforceable in any part by any other persons.
11.8 Severability. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision or provisions
in question invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case.
11.9 Counterparts, Etc. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and shall supersede and take the place of any other
instruments purporting to be an agreement of the parties hereto relating to the
subject matter hereof. This Agreement may not be amended or modified in any
respect other than by the written agreement of all of the parties hereto.
11.10 Governing Law. This Agreement shall be interpreted, construed,
applied and enforced in accordance with the laws of the State of Maryland.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in such court or courts located in
the State of Maryland as is provided by law; and the parties consent to the
jurisdiction of said court or courts located in the State of Maryland and to
service of process by registered mail, return receipt requested, or by any other
manner provided by law.
11.11 Performance on Business Days. In the event the date on which
performance or payment of any obligation of a party required hereunder is other
than a Business Day, the time for payment or performance shall automatically be
extended to the first Business Day following such date.
11.12 Attorneys' Fees. If any lawsuit or arbitration or other legal
proceeding arises in connection with the interpretation or enforcement of this
Agreement, the prevailing party therein shall be entitled to receive from the
other party the prevailing party's costs and expenses, including reasonable
attorneys' fees, incurred in connection therewith, in preparation therefor and
on appeal therefrom, which amounts shall be included in any judgment therein.
11.13 Relationship. Nothing herein contained shall be deemed or
construed by the parties hereto, nor by any third party, as creating the
relationship of principal and agent or of partnership or joint venture between
the parties hereto, it being understood and agreed that no provision contained
herein, nor any acts of the parties hereto shall be deemed to create the
relationship between the parties hereto other than the relationship of seller
and purchaser.
11.14 Section and Other Headings. The headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
11.15 Disclosure. From and after Closing on the purchase and sale of
any Property, and at the written request of Purchaser, Seller shall provide such
financial statements (in addition to the financial statements to be provided at
Closing in accordance with Section 4.1(u)) in respect of such Seller's
operations from the date of Seller's commencement of business to the date of
such Closing to the extent such financial statements are required by applicable
securities laws and regulations and the SEC's interpretation thereof; provided,
however, that (i) Seller reserves the right, in good faith, to challenge, and
require Purchaser to use commercially reasonable efforts to challenge, any
assertion by the SEC, any other applicable regulatory authority, or Purchaser's
independent public accountants that applicable law or regulations require the
provision of such financial statements, (ii) Purchaser shall not, without
Seller's consent (which consent shall not be unreasonably withheld, delayed or
conditioned), acquiesce to any such challenged assertion until Purchaser has
exhausted all reasonable available avenues of administrative review, and (iii)
Purchaser shall consult with Seller in pursuing any such challenge and will
allow Seller to participate therein if and to the extent that Seller so elects.
Any and all costs and expenses incurred by Seller, including without limitation
reasonable attorneys fees and expenses, in connection with providing such
financial statements to Purchaser or in connection with any challenge to an SEC
assertion (including Seller's consultation or participation with Purchaser in
respect of same) shall be reimbursed to Seller by Purchaser within ten (10) days
following written demand by Seller.
11.16 Newark Property-No Discrimination. The Newark Property is subject
to that certain Disposition and Development Agreement dated August 15, 1979,
made by the Newark Redevelopment Agency and Duffel Financial and Construction
Company, recorded among the Official records of Alameda County, California on
April 16, 1984 as No. 84-072986, as amended to date (the "Newark Development
Agreement"). In accordance with Section 5.2 of the Newark Development Agreement
the parties to this Agreement covenant and agree with regard to the Newark
Property that:
(a) Under this Agreement and any and all future contracts as to any
portion of the Newark Property there shall be no discrimination against or
segregation of any person or group of persons on account of race, color,
religion, creed, sex, sexual orientation, or national origin in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of any of the
Properties, nor shall the transferee or any person claiming under or through the
transferee establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, or vendees of the Properties;
(b) The deed conveying the Newark Property from Seller to Purchaser and
any and all subsequent deeds for any portion of the Newark Property shall be
subject to the Newark Development Agreement and shall contain the specific
covenants set forth in Section 5.2(a) thereof, as amended by the Amendment to
the Newark Development Agreement dated August 15, 1979, recorded February 28,
1985 as No. 85-042319; and
(c) The Lease for the Newark Property and any and all subsequent Leases
for any and all subsequent leases for any portion of the Newark Property shall
be subject to the Newark Development Agreement and shall contain the specific
covenants set forth in Section 5.2(b) thereof.
11.17 ▇▇▇▇▇▇▇▇▇▇ Property - Development Tax. In respect of the
Merrifield Property, it is understood and agreed that to the extent Section
4-7-16 of the Fairfax County Code (Fairfax County License Tax, Builders and
Developers) is applicable, Seller shall be responsible for the payment of the
license tax on gross receipts received by Seller in respect of the ▇▇▇▇▇▇▇▇▇▇
Property prior to and as of Closing, including the receipt by Seller of the
Allocable Purchase Price for the ▇▇▇▇▇▇▇▇▇▇ Property.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as a sealed instrument as of the date first above written.
SELLERS:
TOWNEPLACE MANAGEMENT CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Authorized Signatory
RESIDENCE INN BY MARRIOTT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
PURCHASER:
CNL HOSPITALITY PARTNERS, L.P.
By: CNL Hospitality GP Corp.,
a Delaware corporation its general
partner
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Vice President of Finance and
Administration
MI:
MARRIOTT INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Authorized Signatory
The undersigned, CNL Hospitality Properties, Inc., joins herein for the purpose
of evidencing its agreement to enter into and deliver the Guaranty of Landlord's
Obligations pursuant to the terms of the foregoing Agreement.
CNL HOSPITALITY PROPERTIES, INC.
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Vice President of Finance and
Administration
The undersigned, First American Title Insurance Company, joins herein
for the purpose of evidencing its agreement to enter into and deliver the Escrow
Agreement, attached hereto at Schedule P.
FIRST AMERICAN TITLE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. Deal
Name: ▇▇▇▇▇ ▇. Deal
Title: Vice President