EXHIBIT 10.46
Purchase and Sale Agreement between
Residence Inn by Mariott, Inc.,
Courtyard Management Corporation, SpringHill SMC Corporation
and TownePlace Management Corporation, as Sellers,
CNL Hospitality Partners, LP, as Purchaser,
CCCL Leasing LLC, as Tenant,
Crestline Capital Corporation, Marriott International, Inc.,
and joined in by CNL Hospitlatiy Properties, Inc.,
relating to the Residence Inn - Cottonwood, Courtyard - Alpharetta,
and TownePlace Suites - Mt. Laurel, Scarborough and Tewksbury
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
MARRIOTT INTERNATIONAL, INC.
as MI,
- and -
RESIDENCE INN BY MARRIOTT, INC.,
- and -
COURTYARD MANAGEMENT CORPORATION
- and -
SPRINGHILL SMC CORPORATION
- and -
TOWNEPLACE MANAGEMENT CORPORATION
respectively, as Sellers,
- and -
CNL HOSPITALITY PARTNERS, LP
as Purchaser
-and-
CCCL LEASING LLC
as Tenant
-and-
CRESTLINE CAPITAL CORPORATION
as Crestline
Dated: August 18, 2000
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of the
18th day of August, 2000 (the "Effective Date"), by and between (i)(a) RESIDENCE
INN BY MARRIOTT, INC., a Delaware corporation, (b) COURTYARD MANAGEMENT
CORPORATION, a Delaware corporation, (c) SPRINGHILL SMC CORPORATION, a Delaware
corporation, and (d) TOWNEPLACE MANAGEMENT CORPORATION, a Delaware corporation,
as sellers, (ii) CNL HOSPITALITY PARTNERS, LP, a Delaware limited partnership,
or any permitted affiliate, as purchaser, (iii) CCCL LEASING LLC, a Delaware
limited liability company, as tenant, (iv) CRESTLINE CAPITAL CORPORATION, a
Maryland corporation, (v) MARRIOTT INTERNATIONAL, INC., a Delaware corporation,
and (vi) joined in by CNL HOSPITALITY PROPERTIES, INC., a Maryland corporation.
W I T N E S S E T H:
WHEREAS, each 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 of such Seller as more fully set forth
herein; and
WHEREAS, Purchaser desires to purchase all of the Properties and
thereby acquire all of each of such Seller's right, title and interest in and to
such Seller's Properties upon the terms and conditions hereinafter set forth;
and
WHEREAS, each Seller desires to sell to Purchaser all of such Seller's
Properties and thereby convey all its right, title and interest in such
Properties, upon the terms and conditions hereinafter set forth; and
WHEREAS, Purchaser desires to lease all of the Properties to Tenant,
and Tenant desires to lease all of the Properties from Purchaser; and
WHEREAS, Tenant desires to contract with MI and the applicable Seller
for the management and operation of each of the Properties.
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, each Seller (as applicable),
MI, Purchaser, Tenant and Crestline 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 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 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; (2) the appointment of a receiver, custodian, trustee
or liquidator for such party or general partner 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 unstayed 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 X 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 "Allocable Purchase Price" as set forth on Schedule A hereto for
such Property, it being understood and agreed that the aggregate amount of the
Allocable Purchase Prices of all nine (9) Properties shall be One Hundred
Million One Hundred Seventy Thousand Dollars ($100,170,000), as such Allocable
Purchase Price for any of the Properties may be reduced pursuant to Section 3.2.
1.4 "Atlanta/Alpharetta Property" shall mean the Property located in
Alpharetta, ▇▇▇▇▇▇ County, Georgia.
1.5 "Architect" shall mean, with respect to each Property, that certain
architect or architectural firm identified on Schedule R hereto.
1.6 "As-Built Drawings" shall mean the final "as-built" plans and
specifications for the Improvements which are to be furnished by the Seller to
the Purchaser pursuant to Section 4.1 of this Agreement and to the Tenant
pursuant to Section 4A.1 of this Agreement.
1.7 "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.
1.8 "Boston/Tewksbury Property" shall mean the Property located in
Tewksbury, Middlesex County, Massachusetts.
1.9 Intentionally Deleted.
1.10 "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.
1.11 "Centerville Property" shall mean the Property located in
Centerville, Fairfax County, Virginia.
1.12 "Charlotte Property" shall mean the Property located in Charlotte,
Mecklenburg County, North Carolina.
1.13 "CHP" shall mean CNL Hospitality Properties, Inc., a Maryland
corporation.
1.14 "CHLP" shall mean CNL Hospitality Partners, LP, a Delaware limited
partnership.
1.15 "Closing" shall have the meaning given such term in Section 3.1.
1.16 "Closing Date" shall have the meaning given such term in Section
3.1.
1.17 "Competitor" shall mean a Person that owns or has an equity
interest in a hotel brand, trade name, 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.
1.18 "Contracts" shall mean, with respect to any Property, (a)
equipment leases relating to telephone switches and voice mail benefiting such
Property and to which the Seller is a party, (b) motor vehicle leases relating
to motor vehicles used in the operation of such Property and to which the Seller
is a party and (c) any other equipment leases to which the Seller is a party
that benefit the Property, are disclosed in writing to Purchaser and Tenant on
or before Closing, are reasonably acceptable to Purchaser and Tenant and are to
survive the Closing for such Property.
1.19 "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.
1.20 "Crestline" shall mean Crestline Capital Corporation, a Maryland
corporation.
1.21 "Effective Date" shall have the meaning set forth in the preamble
to this Agreement.
1.22 "Engineer" shall mean with respect to each Property, that certain
engineer or engineering firm identified on Schedule S hereto.
1.23 "Entity" shall mean any corporation, general or limited
partnership, limited liability company, partnership, stock company or
association, joint venture, company, trust, bank, trust company, land trust,
business trust, cooperative, any government or agency or political subdivision
thereof or any other entity.
1.24 "Environmental Reports" shall have the meaning given such term in
Section 2.5.
1.25 "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," "Courtyard," "SpringHill" and "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) any FAS (as defined in the Lease for such Property) associated
with such Property, (iv) any Inventories (as defined in the Lease for such
Property) located at such Property, (v) working capital associated with or set
aside with respect to such Property, (vi) all items, tangible or intangible,
consisting of Proprietary Information, (vii) computer software, (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 such Property that will be issued by the franchisor to the
Tenant, as franchisee, under the Franchise Agreements.
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 applicable 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, but in any event excluding any Excluded
Assets.
1.27 "FF&E Schedule" shall have the meaning given such term in Section
4.5.
1.28 "Force Majeure Event" shall mean any circumstance caused by any of
the following: strikes; lockouts; acts of God; civil commotion; fire or other
casualty; governmental action (including renovation or refusal to grant any
required license or permit where such revocation or refusal is not due to the
fault of the party affected thereby); or other cause or circumstance which is
not in the reasonable control of the party asserting the existence of such cause
or circumstance.
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 N-1
(Residence Inn Franchise Agreement), N-2 (Courtyard Franchise Agreement), N-3
(SpringHill Suites Franchise Agreement) and N-4 (TownePlace Suites Franchise
Agreement), respectively, and, in each instance, the memorandum thereof in the
form of Schedule O hereto.
1.30 "Guarantors" shall mean CHP and CHLP, jointly and severally.
1.31 "Guaranty of Landlord's Obligations" shall mean, in respect of
each Property, collectively (a) the Guaranty in the form of Schedule B hereto to
be entered into by Guarantors for the benefit of Tenant, in respect of the Lease
for each Property, guarantying the Purchaser's obligations under such Lease, and
(b) the Guaranty in the form of Schedule B-1 hereto to be entered into by
Guarantors for the benefit of MI in respect of the Owner Agreement for each
Property, guarantying the Purchaser's obligations under such Owner Agreement.
1.32 "Guaranty of Purchase Agreement Performance" shall mean the
guaranty in the form of Schedule W hereto to be entered into by Crestline for
the benefit of MI and Purchaser guarantying Tenant's obligations (i) to deposit
the applicable portion of the initial Security Deposit with Purchaser as and
when Tenant is required to do so pursuant to this Agreement and each applicable
Lease, and (ii) to enter into and deliver each document or instrument which
Tenant is required to enter into and deliver pursuant to this Agreement.
1.33 "Guaranty of Tenant's Obligations" shall mean a guaranty by
Crestline, in the form of Schedule V hereto, of certain of Tenant's obligations
to fund operating shortfalls under the Management Agreements by and between
Tenant and each Seller, and with respect to which Crestline's maximum aggregate
liability in respect of all of such Management Agreements shall in no event
exceed One Million Dollars ($1,000,000) for all of the Properties.
1.34 "Hotel" shall mean the hotel being constructed and/or already
constructed and operated on each Property.
1.35 "Immaterial Taking" shall have the meaning given such term in
Section 2.6.
1.36 "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.
1.37 "Inspection Period" shall have the meaning given such term in
Section 2.2.
1.38 "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, 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, other than (x)
the Excluded Assets and (y) such permits, operating permits, certificates,
licenses and approvals, including, without limitation, liquor licenses, which
are to be held by, or transferred to, the affiliate of MI which is to be the
manager for the Property pursuant to a Management Agreement in order to permit
the such affiliate of MI to operate such Property properly in accordance with
the terms of the Management Agreement for such Property.
1.39 "Lease" shall mean, in respect of each Property, the "triple net"
Lease Agreement in the form of Schedule C hereto, each of which Lease shall be
cross-defaulted and cross-collateralized with each and every other Lease for a
Property, and the memorandum thereof in the form of Schedule C-1 hereto, to be
entered into by Tenant and the Purchaser, subject to such changes as may be
reasonably requested by either party and approved by Purchaser, MI and Tenant,
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.
1.40 "Liquidity Facility Agreement" shall mean the Liquidity Facility
Agreement in the form of Schedule D hereto, and all documents required
thereunder and in connection therewith, including, without limitation, (i) an
assignment of Tenant's rights thereunder to Purchaser in the form of Schedule
D-1 hereto, to be entered into by Tenant in favor of Purchaser (the "Liquidity
Facility Assignment"), and (ii) leasehold deeds of trust in the form of Schedule
D-2 hereto, as modified to reflect applicable provisions of local law, custom
and recording requirements in the jurisdictions in which the same are to be
recorded, to be entered into by Tenant in favor of MI with respect to each Lease
(each, a "Leasehold Deed of Trust" and collectively, the "Leasehold Deeds of
Trust"), and a lien or mortgage on all other assets of Tenant (including
Tenant's interest in the Security Deposit to the extent set forth in the
Liquidity Facility Agreement) in form and substance reasonably satisfactory to
MI, in each instance as further security for the performance of Tenant's
obligations under the Liquidity Facility Agreement.
1.41 "Management Agreement" shall mean, in respect of each Property,
the applicable Management Agreement to be entered into at or prior to the
Closing of the purchase and sale of a Property between the applicable Manager,
as manager, and Tenant, substantially in the forms attached hereto at Schedule
T-1 (Residence Inn Management Agreement), T-2 (Courtyard Management Agreement),
T-3 (SpringHill Suites Management Agreement) and T-4 (TownePlace Suites
Management Agreement), respectively, and, in each instance, the memorandum
thereof in the form of Schedule T-5 hereto.
1.42 "Manager" shall mean, with respect to each Property, the
applicable Seller of such Property which will manage the Property pursuant to
the Management Agreement for such Property.
1.43 "Mt. Laurel Property" shall mean the Property located in Mt.
Laurel, Burlington County, New Jersey.
1.44 "Membership Interest Pledge" shall mean the Membership Interest
Pledge Agreement in the form of Schedule G hereto to be entered into by
Crestline as the owner of all of the outstanding ownership interests in Tenant,
as pledgor, and Purchaser, as pledgee, as further security for the performance
of Tenant's obligations under the Leases for the Properties.
1.45 "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.
1.46 "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.
1.47 "Opening Date" shall mean, with respect to any Property, the date
as of which (i) all Improvements located at such Property, including, without
limitation, all guest rooms and/or suites, shall be in all material respects
completed (subject only to punch list items which Seller will complete after
such date), (ii) the Hotel on such Property is fully furnished in accordance
with this Agreement and the applicable brand standards, and (iii) the Hotel on
such Property is open for business to the public as a Residence Inn hotel,
TownePlace Suites hotel, Courtyard by Marriott, or SpringHill Suites, as the
case may be.
1.48 "Outside Substantial Completion Date" shall mean March 31, 2001.
1.49 "Overland Park Property" shall mean the Property located in
Overland Park, ▇▇▇▇▇▇▇ County, Kansas.
1.50 "Owner Agreement" shall mean the Owner Agreement in substantially
the form of Schedule E hereto to be entered into by MI, Tenant and Purchaser
and, which shall be applicable to each Property from and after the Closing Date
for such Property, and with respect to the obligations of Purchaser thereunder,
guaranteed by the Guarantors.
1.51 "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 with respect to the Properties for which Closing will occur on the
initial Closing Date hereunder; (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, other than assessments for improvements
commenced prior to the Closing Date for such Property which are not otherwise
reflected in the pro forma budget prepared by MI and delivered to Purchaser and
Tenant prior to the Closing; (c) applicable zoning regulations and ordinances
and other governmental laws, ordinances and regulations provided the same do not
prohibit or impair in any material respects the use of such Property as a
Residence Inn hotel, TownePlace Suites hotel, Courtyard by Marriott hotel, or
SpringHill Suites hotel, as contemplated by this Agreement; (d) such other
nonmonetary encumbrances which do not, in Purchaser's and Tenant's reasonable
opinions, impair marketability, prohibit or impair in any material respect the
use of such Property as a fully functioning Residence Inn hotel, TownePlace
Suites hotel, Courtyard by Marriott hotel, or SpringHill Suites hotel as
contemplated by this Agreement, or impose any additional material costs or
expenses on Tenant or Purchaser; (e) any utility, drainage or other easements
which are customary in connection with (or which reasonably serve) the
Improvements (provided that the same do not lie under any building) and with
respect to which there are no material violations as of the Closing Date for
such Property; (f) the Lease, Memorandum of Lease, Memorandum of Franchise
Agreement and Memorandum of Management Agreement for such Property; and (g) such
other nonmonetary encumbrances with respect to such Property which are not
objected to by the Purchaser or Tenant in accordance with Sections 2.3 and 2.4.
1.52 "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.
1.53 "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.
1.54 "Pooling Agreement" shall mean the Pooling Agreement entered into
between Tenant, MI and each affiliate of MI which is to be the manager of one or
more of the Properties pursuant to a Management Agreement in the form of
Schedule U hereto, which shall incorporate and be applicable to each Property
from and after the Closing Date for such Property.
1.55 "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.
1.56 "Properties" shall mean, collectively, each and every Property.
1.57 "Proprietary Information" shall mean (a) all computer software and
accompanying documentation (including all future upgrades, enhancements,
additions, substitutions and modifications thereof), other than that which is
commercially available, which are used by MI or any Manager in connection with
the property management system, the reservation system and all future electronic
systems developed by MI or any Manager for use with respect to the Properties,
(b) all manuals, brochures and directives used by MI or any Manager with respect
to the procedures and techniques to be used in operating the Properties, (c)
customer lists, and (d) employee records which must remain confidential either
under legal requirements or under reasonable corporate policies of MI or any
Manager; provided, however, that "Proprietary Information" shall not include any
software, manuals, brochures or directives issued by MI, as franchisor, to
Tenant, as franchisee, under any Franchise Agreement, the use of which is
governed by such Franchise Agreement.
1.58 "Purchaser" shall mean CHLP and its permitted successors and
assigns.
1.59 "Raleigh/Durham Property" shall mean the Property located in
Raleigh/Durham, Durham County, North Carolina.
1.60 "Real Property" shall mean, in respect to each Property, the real
property described in the applicable Schedules F-1 through F-9 hereto, 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.
1.61 "Salt Lake/Cottonwood Property" shall mean the Property located in
Salt Lake/Cottonwood, Salt Lake County, Utah.
1.62 "Scarborough Property" shall mean the Property located in
Scarborough, Cumberland County, Maine.
1.63 "Security Deposit" shall mean the applicable security deposit
required to be posted by Tenant with Landlord upon the Closing for each Property
pursuant to the Lease for such Property, in an amount equal to five percent (5%)
of the Allocable Purchase Price for such Property.
1.64 "Seller" shall mean (a) with respect to the Salt Lake/Cottonwood
Property described on Schedule F-1 hereto, Residence Inn by Marriott, Inc; (b)
with respect to the Atlanta/Alpharetta Property, and Overland Park Property
described on Schedule F-2 and Schedule F-3, respectively, hereto, Courtyard
Management Corporation; (c) with respect to the Centerville Property, Charlotte
Property and Raleigh/Durham Property described on Schedules F-4 through F-6,
respectively, hereto, SpringHill SMC Corporation; and (d) with respect to the
Scarborough Property, Boston/Tewksbury Property and Mt. Laurel Property
described on Schedules F-7 through F-9, respectively, hereto, TownePlace
Management Corporation.
1.65 "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), free of all liens and encumbrances (other than Permitted
Encumbrances) such that the Improvements may be used for their intended use, and
the furnishing of all FF&E required for the operation of such Property, in each
case in accordance with the requirements of this Agreement and the applicable
Franchise Agreement and System Standards Manual. "Substantially Complete" shall
mean, with respect to any Property, that Substantial Completion of the
Improvements on such Property has occurred.
1.65A "Surveys" shall have the meaning given such term in Section 2.4.
1.66 "Surveyor" shall mean, with respect to each Property, that certain
surveyor identified on Schedule J-1 hereto.
1.67 "Systems Standards Manual" shall mean the Systems Standards Manual
(or successor thereto) set forth on Schedule P hereto (copies of which shall be
provided by each applicable Seller to Purchaser and Tenant simultaneously
herewith), setting forth the standards and requirements for the construction,
renovation and operation of hotels within the applicable brand (i.e., Residence
Inn, TownePlace Suites, Courtyard, and SpringHill Suites) of hotel to be
constructed and operated on the applicable Property.
1.68 "Tenant" shall mean CCCL Leasing LLC, a Delaware limited liability
company, which shall at all relevant times hereunder be a bankruptcy remote,
single purpose entity, wholly-owned by Crestline, and whose sole business shall
be ownership of Tenant's interests under the Leases.
1.69 "Title Commitments" shall have the meaning given such term in
Section 2.3.
1.70 "Title Company" shall mean First American Title Insurance Company
or such other title insurance company as shall have been approved by Purchaser,
Seller and Tenant.
SECTION 2. PURCHASE-SALE AND LEASE; DILIGENCE.
2.1 Purchase-Sale And Lease.
(a) Purchaser hereby agrees to purchase from each applicable
Seller and each applicable Seller hereby agrees to sell to Purchaser, the
Properties of each applicable Seller for the respective Allocable Purchase
Prices, as applicable, relating thereto, subject to and in accordance with the
terms and conditions of this Agreement. Also in consideration of the mutual
covenants herein contained, upon, and subject to, acquisition by Purchaser of
each of the Properties, Purchaser hereby agrees to simultaneously lease to
Tenant, and Tenant hereby agrees to simultaneously lease from Purchaser, each of
such Properties purchased by Purchaser, on the terms and conditions of the Lease
applicable thereto, and in accordance with the terms of this Agreement.
(b) Pursuant to the terms of the Guaranty of Purchase Agreement
Performance, Crestline shall unconditionally guarantee the obligation of Tenant
to enter into each Lease and to post the applicable initial Security Deposit
with Landlord upon the execution and delivery of each Lease, and the obligation
of Tenant to enter into each Management Agreement, Franchise Agreement and each
and every other instrument, document or agreement contemplated by this Agreement
to which Tenant is to be a party upon the satisfaction of all conditions
precedent thereto. Crestline further agrees to deliver the Guaranty of Tenant's
Obligations to the Managers upon the execution and delivery of the Management
Agreements at the initial Closing hereunder, and will deliver a confirmation of
the same at each subsequent Closing.
2.2 Diligence Inspections. Prior to each Closing, and on the terms and
conditions set forth below, Purchaser and Tenant shall have the right to
continue their inspections of the Properties. If either Purchaser or Tenant is
not reasonably satisfied with the results of its due diligence review with
respect to any Property, such party may terminate this Agreement with respect to
such Property at any time during the thirty (30) day period beginning on the
Effective Date (the "Inspection Period"), by notifying each other party hereto
in writing of such election to terminate (and, if requested by Seller at any
time thereafter, Purchaser or Tenant, as the case may be, will also advise
Seller of the basis therefor). If neither Purchaser nor Tenant terminates this
Agreement as aforesaid with respect to a Property during the Inspection Period,
Purchaser and Tenant shall be deemed to have approved each such Property in its
"as is, where is" condition as of the end of such thirty (30) day period,
subject to the representations, warranties, terms and conditions of this
Agreement. In respect to the Improvements to be developed on the Properties by
the Seller, the Seller shall permit the Purchaser, Tenant and their
representatives to inspect the Improvements at appropriate stages of completion
at such reasonable times as the Purchaser, Tenant or their representatives may
request by reasonable prior notice to the Seller. During any such inspection,
the Purchaser, Tenant and their 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, the Tenant, or their agents, representatives or
contractors, damages or disturbs any of the Properties, the Purchaser or Tenant,
as the case may be, shall return the same to substantially the same condition
which existed immediately prior to such damage or disturbance. The Purchaser and
Tenant shall each 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 Tenant, respectively, as the case may be, or their
respective 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, with
respect to each Property, survive the termination of this Agreement or the
Closing hereunder with respect to such Property, as applicable, for a period of
one year.
2.3 Title Matters. Prior to the date hereof, the Purchaser shall have
ordered from the Title Company and directed the Title Company promptly to
deliver to the Purchaser, the Seller and Tenant a preliminary title commitment
for an ALTA extended owner's policy and ALTA leasehold policy of title insurance
with respect to each of the Properties, together with complete and legible
copies of all instruments and documents referred to as exceptions to title
(collectively, the "Title Commitments").
Within the Inspection Period, the Purchaser and the Tenant shall give
the Seller notice of any title exceptions (other than Permitted Encumbrances)
which adversely affect such Property in any material respect and as to which the
Purchaser or the Tenant reasonably objects. If, for any reason, the Seller is
unable or unwilling to take such actions as may be required to cause such
exceptions to be removed from the Title Commitments, the Seller shall give the
Purchaser and the Tenant notice thereof; it being understood and agreed that the
failure of the Seller to give such notice within fifteen (15) days after the
later of Purchaser's and Tenant's notice of objection and the Effective Date
shall be deemed an election by the Seller not to remedy such matters. If the
Seller shall be unwilling or unable to remove any title defects to which the
Purchaser and/or Tenant has reasonably objected, the Purchaser and/or the Tenant
may elect (i) to terminate this Agreement with respect to the affected Property,
in which event the Purchase Price shall be reduced by the amount of the
Allocable Purchase Price of such Property and this Agreement shall be of no
further force and effect with respect to such Property and Seller shall
reimburse to Purchaser and Tenant the Purchaser's and Tenant's respective
direct, out of pocket expenses incurred in respect of such affected Property
(and an allocable share of expenses attributable generally to the transactions
contemplated by this Agreement and not attributable specifically to any
Property), not to exceed $30,000 per Property per party, or (ii) to consummate
the transactions contemplated hereby, notwithstanding such title defect, without
any abatement or reduction in the Allocable Purchase Price of the affected
Property on account thereof. The Purchaser and Tenant shall make any such
election by written notice to the Seller given on or prior to the fifth (5th)
day after the Seller's notice of its inability or unwillingness to cure such
defect. Failure of the Purchaser and the Tenant both to give such notice of its
election in accordance with clause (i) above shall be deemed an election by both
the Purchaser and Tenant to proceed in accordance with clause (ii) above.
Notwithstanding the foregoing, Seller shall cause all mortgages, deeds of trust
and other monetary liens encumbering any Property to be released at or prior to
the Closing of such Property; provided, however, such liens may continue to
encumber the Property at Closing if the Title Company is willing to insure over
such liens in a manner acceptable to Purchaser and such liens are released
promptly following the applicable Closing. Seller's obligation to cause the
release of any such liens pursuant to the immediately preceding sentence shall
survive Closing. Upon completion of the procedures set forth in this paragraph
for resolving objections to matters concerning title, and with respect to all
Properties for which a Closing has not yet occurred and with respect to which no
party has exercised a right to terminate this Agreement provided for herein,
revised Title Commitments shall be agreed to by the parties in substance
consistent with the provisions of this paragraph, and such revised Title
Commitments shall be appended to and become a part of Schedule E-1.
In the event that Seller decides to encumber a Property with an
additional document, instrument or other matter, Seller shall give Purchaser and
Tenant 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 ( and a copy) of any
Additional Exception with respect to any Property, the Purchaser and/or Tenant
shall give the Seller notice of its approval or disapproval thereof. Neither
Purchaser nor Tenant shall withhold its approval of any such Additional
Exception which would be a Permitted Encumbrance specified in clauses (a)
through (g), inclusive, of Section 1.51, and neither shall unreasonably
withhold, delay or condition its approval of any other Additional Exception. If
Purchaser and/or Tenant fail to respond within said five (5) Business Day
period, Purchaser and/or Tenant, as the case may be, shall be deemed to have
approved such Additional Exception. If Purchaser and/or Tenant 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. Notwithstanding
anything herein to the contrary, an Additional Exception shall not include any
monetary encumbrance, and except as set forth in the next succeeding paragraph,
Seller shall discharge all such encumbrances on or before the Closing Date for
such Property. No consent or approval to any Additional Exception by Tenant or
Purchaser shall constitute an agreement by Tenant or Purchaser to pay any
special assessment or other tax or levy arising under 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) not otherwise consented to by Purchaser or Seller in
accordance with the preceding paragraph, the Purchaser's and Tenant's sole
remedy (which may be exercised by either of them) 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 and Tenant the
Purchaser's and Tenant's respective direct, out of pocket expenses incurred in
respect of such affected Property (and an allocable share of expenses
attributable generally to the transactions contemplated by this Agreement and
not attributable specifically to any Property), not to exceed $30,000 per
Property per party, 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.
Notwithstanding anything herein to the contrary, Purchaser and Tenant
acknowledge and agree that, subject to any indemnities provided by Seller to
Purchaser and Tenant with respect to any matters set forth therein, Purchaser
and Tenant have approved the form and substance of the Fee Title Commitments set
forth at Schedule H and the Leasehold Policy Commitments set forth at Schedule
I, respectively, for the Properties for which a Closing is occurring on the
initial Closing Date hereunder.
2.4 Survey. At least thirty (30) days prior to the Closing Date for
each Property for which a Closing is occurring on a date other than the initial
Closing Date hereunder, the Seller shall arrange for the preparation of an
as-built ALTA survey with respect to each of the Properties closing on such
Closing Date (together with the Surveys for the Properties for which a Closing
is occurring on the initial Closing Date hereunder, collectively, the
"Surveys"), by a licensed surveyor in the jurisdiction in which each such
Property is located, which (i) contains an accurate legal description of the
applicable Property, (ii) shows the exact location, dimension and description
(including applicable recording information) of all utilities, easements,
encroachments and other physical matters affecting such Property, the number of
striped parking spaces located thereon and all applicable building set-back
lines, (iii) states whether the applicable Property is located within a 100-year
flood plain, and (iv) includes a certification substantially in the form set
forth in Schedule J, for the benefit of the parties identified therein, dated no
earlier than forty-five (45) days prior to the Closing Date for the Properties
closing on such Closing Date.
Within ten (10) days after receiving any Survey, the Purchaser and the
Tenant shall give the Seller notice of any matters shown thereon (other than
Permitted Encumbrances) which adversely affect any such Property in any material
respect and as to which the Purchaser or the Tenant 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, the Seller shall give the
Purchaser and the Tenant prompt notice thereof; it being understood and agreed
that the failure of the Seller to give such notice within ten (10) days after
the later of the Purchaser's and the Tenant's notice of objection and the
Effective Date shall be deemed an election by the Seller not to remedy such
matters. If the Seller shall be unable or unwilling to remove any survey defect
to which the Purchaser and/or the Tenant has reasonably objected, the Purchaser
and/or the Tenant may elect (i) to terminate this Agreement with respect to the
affected Property, in which event the Purchase Price shall be reduced by the
amount of the Allocable Purchase Price of such Property and this Agreement shall
terminate and be of no further force or effect with respect to the affected
Property and Seller shall reimburse to Purchaser and Tenant the Purchaser's and
Tenant's respective direct, out of pocket expenses incurred in respect of such
affected Property (and an allocable share of expenses attributable generally to
the transactions contemplated by this Agreement and not attributable
specifically to any Property), not to exceed $30,000 per Property per party, or
(ii) to consummate the transactions contemplated hereby, notwithstanding such
defect, without any abatement or reduction in the Allocable Purchase Price of
the affected Property on account thereof. The Purchaser and Tenant shall make
any such election by written notice to the Seller given on or prior to the fifth
(5th) day after the Seller's notice of its inability or unwillingness to cure
such defect and time shall be of the essence with respect to the giving of such
notice. Failure of the Purchaser and the Tenant both to give such notice of its
election in accordance with clause (i) above shall be deemed an election by both
the Purchaser and Tenant to proceed in accordance with clause (ii) above.
Notwithstanding anything herein to the contrary, Purchaser and Tenant
acknowledge and agree that, subject to any indemnities provided by Seller to
Purchaser and Tenant with respect to any matters set forth therein, Purchaser
and Tenant have approved the form and substance of the Surveys provided to each
of them with respect to the Properties for which Closing will occur on the
initial Closing Date hereunder.
2.5 Environmental Reports. During the Inspection Period, Purchaser and
Tenant shall have the right to determine the environmental condition of the
Properties as existing on the date hereof. In order to assist Purchaser and
Tenant with such determination, Sellers shall deliver to Purchaser and Tenant
(without representation or warranty of any sort except as otherwise expressly
set forth in this Agreement) those certain Phase I environmental reports in
respect of the Properties identified in Schedule Q hereto ("Environmental
Reports"). At the written election of Purchaser or Tenant, made no later than
twenty (20) days prior to the Closing Date for the acquisition of a given
Property, the Seller, Purchaser and Tenant shall order, with respect to such
Property, an update of the Environmental Report for such Property (an "Updated
Environmental Report"), which will certify the Environmental Report and the
Updated Environmental Report to Purchaser and Tenant.
Within five (5) Business Days after receipt of an Updated Environmental
Report with respect to any Property, the Purchaser and/or Tenant shall give the
Seller notice of any matters therein as to which the Purchaser or Tenant
reasonably object. 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 or Tenant (as the case may be), the
Seller shall give the Purchaser and Tenant 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 or Tenant'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
or Tenant has reasonably objected, the Purchaser and/or Tenant (as the case may
be) 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 and Tenant the Purchaser's and Tenant's respective direct, out of
pocket expenses incurred in respect of such affected Property (and an allocable
share of expenses attributable generally to the transactions contemplated by
this Agreement and not attributable specifically to any Property), not to exceed
$30,000 per Property per party 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 and/or Tenant (as the case may be) 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 or Tenant's receipt of
Seller's notice of its inability or unwillingness to cure such defect and (y)
the expiration of the five (5) Business Day period within which Seller was to
have responded to Purchaser's or Tenant's notice of objection. Failure of the
Purchaser or Tenant to give such notice within the time prescribed by the
preceding sentence shall be deemed an election by the Purchaser or Tenant (as
the case may be) to proceed in accordance with clause (B) above.
Notwithstanding anything herein to the contrary, Purchaser and Tenant
acknowledge and agree that Purchaser and Tenant have approved the form and
substance of the Environmental Reports or Updated Environmental Reports, as
applicable, provided to each of them with respect to the Properties for which
Closing will occur on the initial Closing Date hereunder.
2.6 Taking and Casualty.
(a) If prior to the Closing of the purchase of a Property, such
Property is the subject of a condemnation, Seller shall promptly notify
Purchaser and Tenant of the same. If such condemnation 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 or the projected
net cash flow from the Property (an "Immaterial Taking"), Seller shall so notify
Purchaser and Tenant 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. If such condemnation is not an Immaterial Taking, then
either Purchaser or Tenant shall have the right to terminate this Agreement with
respect to the affected Property, in which event this Agreement shall be of no
further force and effect with respect to such Property except with respect to
provisions hereof which by their express terms survive a termination of this
Agreement.
(b) If prior to the Closing with respect to any Property, such
Property is damaged or destroyed by fire or other casualty, Seller shall
promptly notify Purchaser and Tenant of the same. If the cost of restoring the
damage is, in the reasonable judgment of Seller, Five Million Dollars
($5,000,000) or greater or if the Property cannot be fully restored prior to
September 30, 2001, Purchaser and Tenant shall each have the right, upon notice
to Seller in writing within ten (10) days of receipt of Seller's notice advising
of such damage or destruction, to terminate this Agreement with respect to such
Property, in which event, subject to the provisions of Section 2.2 hereof, this
Agreement shall be of no further force or effect with respect to such Property.
If neither Purchaser nor Tenant terminates this Agreement pursuant to the
foregoing sentence, or if the costs of restoring the damage is, in the
reasonable judgment of Seller, less than Five Million Dollars ($5,000,000), then
Seller shall undertake and pursue the restoration of such damage in a
commercially reasonable fashion, and Closing on such Property shall be extended
for such period of time as may be reasonably necessary or appropriate to permit
Seller to complete such restoration, but in no event later than September 30,
2001. The risk of loss to any Property shall remain with Seller until Closing on
such Property.
2.7 Changes to Plans and Specifications.
(a) Purchaser and Tenant shall each have the following rights in
respect of changes to the Plans and Specifications for the Improvements to be
constructed on the Property: In respect to any Property, Seller will not enter
into a change order to the general contract or otherwise materially modify the
plans and specifications for the construction of the Improvements on such
Property as the same is in effect on the Effective Date (the "General Contract")
without first receiving Purchaser's and Tenant'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 to
such Property 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 with respect to any Property by Fifty Thousand Dollars
($50,000.00) or more per change order or One Hundred Fifty Thousand Dollars
($150,000.00) or more in the aggregate for all change orders, or (iii) would
result in a reduction of a standard provided for in the Systems Standards Manual
applicable to such Improvements.
(b) Seller shall provide to Purchaser and Tenant 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; neither Purchaser nor Tenant will 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 (w) 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 (x) resulted in a change which decreased the cost of the
Improvements by Fifty Thousand Dollars ($50,000) or more per change or One
Hundred Fifty Thousand Dollars ($150,000.00) or more for all changes in the
aggregate, or (y) resulted in a reduction of a standard or standards provided
for in the Systems Standard Manual applicable to such Improvements), Seller
shall provide written notice to Purchaser and Tenant and in such notice Seller
shall elect whether to remedy such deviations, which election shall be binding
on Seller. If Seller elects not to remedy the deviations, Purchaser's and
Tenant's sole remedy (which may be exercised by either of them) 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 and
Tenant the Purchaser's and Tenant's respective direct, out of pocket expenses
incurred in respect of such affected Property, (and an allocable share of
expenses attributable generally to the transactions contemplated by this
Agreement and not attributable specifically to any Property), not to exceed
$30,000 per Property per party, or (ii) to proceed to close in accordance with
this Agreement without any abatement in the Allocable Purchase Price for such
Property except as may be specifically provided for herein.
SECTION 3. PURCHASE, SALE AND LEASE.
3.1 Closing.
(a) The purchase, sale and lease of the Properties and other
transactions contemplated hereby shall be consummated at one or more closings
(each, a "Closing") in escrow with the Title Company at the offices of Lowndes,
Drosdick, Doster, ▇▇▇▇▇▇ & ▇▇▇▇, PA., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, or
at such other location as the Seller and the Purchaser and the Tenant may agree,
at 10:00 a.m. local time, the Closing with respect to any Property (subject to
Section 3.1(b) below) to occur on a date (each, a "Closing Date") designated by
Seller in a written notice ("Closing Notice") from Seller to Purchaser and
Tenant stating that the Opening Date has occurred with respect to such Property
and that all conditions precedent to Purchaser's and Tenant's respective
obligations to close which have not been waived have been satisfied. 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 a condition
precedent to the Closing herein set forth with respect to the applicable
Property has been either satisfied or waived by all of the parties in whose
favor such conditions shall run. In the event that Closing with respect to a
given Property shall not have occurred within thirty (30) days after the Outside
Substantial Completion Date (except as the Closing Date may have been extended
pursuant to Section 2.6 hereof or by a Force Majeure Event (but in no event to
be extended beyond September 30, 2001)), any party (provided such party shall
not be in default hereunder), shall have the right, by the giving of written
notice to the others, to terminate this Agreement with respect to such Property,
in which event this Agreement shall terminate on the date such notice is
provided and thereafter be of no further force or effect with respect to the
affected Property, and Seller shall reimburse to Purchaser and Tenant the
Purchaser's and Tenant's respective direct, out of pocket expenses incurred in
respect of such affected Property (and an allocable share of expenses
attributable generally to the transactions contemplated by this Agreement and
not attributable specifically to any Property), not to exceed $30,000 per
Property per party.
(b) Notwithstanding the foregoing, neither MI, Seller nor Tenant
shall have the right to terminate this Agreement with respect to such Property
as set forth in Section 3.1(a) above if prior to March 31, 2001 Purchaser shall
have filed with a court of applicable jurisdiction, and thereafter diligently
prosecutes and obtains a judgment in its favor in, an action seeking specific
performance of this Agreement with respect to such Property; provided, however,
that Tenant shall have the right to terminate this Agreement with respect to any
such Property if the Closing for such Property does not occur on or before
September 30, 2001. If this Agreement is terminated with respect to any Property
pursuant to the last sentence of Section 3.1(a) above, then through March 31,
2002, Seller will not sell such Property to Purchaser unless Tenant is likewise
given an option to lease such Property from Purchaser, all on the terms and
conditions of this Agreement as if the Closing for such Property had occurred by
March 31, 2001 pursuant to this Agreement.
(c) Notwithstanding the foregoing, if Seller sets the Closing Date
for any of the Centerville Property, the Charlotte Property, the Overland Park
Property, or the Raleigh Property (the "Four Properties") prior to March 30,
2001, and further provided that if Purchaser has not exercised the option
granted to it in Section 11.16 of this Agreement to delay the closing of the
transaction contemplated by the Purchase and Sale Agreement dated September 17,
1998 between MI and CHLP known as the "Little ▇▇▇▇ ▇▇▇▇▇" transaction, Purchaser
may, by written notice to MI, Seller and Tenant, delay the Closing Date for the
Four Properties to a date no later than March 30, 2001.
3.2 Purchase Price. At each Closing, the Allocable Purchase Price for
each Property being purchased shall be payable by Purchaser 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.
If the number of guest rooms for any Hotel is decreased from the number of
projected guest rooms for such Hotel as indicated on Schedule A hereto, the
Allocable Purchase Price for such Property on which such Hotel is located shall
be reduced by an amount equal to the Allocable Purchase Price for such Property
multiplied by a fraction, the numerator of which is the number of projected
guest rooms for such Hotel as indicated on Schedule A hereto minus the actual
number of guest rooms in such Hotel upon completion, and the denominator of
which is the number of projected guest rooms for such Hotel as indicated on
Schedule A hereto. In addition to the foregoing, if the number of guest rooms
for any Hotel is decreased from the number of projected guest rooms for such
Hotel as indicated on Schedule A hereto by more than ten (10) guest rooms,
Purchaser's and Tenant's sole remedy (other than the Allocable Purchase Price
reduction set forth in the preceding sentence), and which may be exercised by
either of them in lieu of the Allocable Purchase Price reduction set forth in
the preceding sentence, shall be to either 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 and Tenant the Purchaser's and Tenant's respective
direct, out of pocket expenses incurred in respect of such affected Property
(and an allocable share of expenses attributable generally to the transactions
contemplated by this Agreement and not attributable specifically to any
Property), not to exceed $30,000 per Property per party, or (ii) to proceed to
close in accordance with this Agreement without any abatement in the Allocable
Purchase Price for such Property except as may be specifically provided for
hereinabove in this Section 3.2.
3.3 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 Crestline or Tenant or any Person
having an interest in Purchaser or Crestline or Tenant, directly or indirectly,
results, directly or indirectly, in a Competitor owning a Controlling Interest
in Purchaser or Crestline or Tenant, 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).
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, Crestline and/or Tenant, as
applicable, shall have delivered (or cause to be delivered) to the Purchaser
with respect to the applicable Property:
(a) A Special Warranty Deed, 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 agreement's
constituting any of the same;
(c) A copy of the Liquidity Facility Agreement duly executed by MI
and Tenant and the original of the Assignment of Liquidity Facility Agreement
duly executed by Tenant;
(d) A copy of the Franchise Agreement with respect to the
applicable Property duly executed by MI and Tenant;
(e) A copy of the Management Agreement with respect to the
applicable Property duly executed by the applicable Manager and Tenant;
(f) The Lease with respect to the applicable Property duly
executed by Tenant;
(g) The Owner Agreement duly executed by MI, the applicable
Manager and Tenant;
(h) The Membership Interest Pledge duly executed by Crestline (or,
at any Closing occurring after the first Closing, a written certification and
acknowledgment by Crestline that the Membership Interest Pledge continues in
full force and effect in accordance with its terms and which confirms the
inclusion of the applicable Property thereto);
(i) The Guaranty of Purchase Agreement Performance duly executed
by Crestline (or, at any Closing occurring after the first Closing, a written
certification and acknowledgment by Crestline that the Guaranty of Purchase
Agreement Performance continues in full force and effect in accordance with its
terms and which confirms the inclusion of the applicable Property thereto);
(j) An original (or if not available, a copy) of the final
certificate of occupancy for the applicable Property;
(k) An architect's certificate in respect of the Improvements to
the applicable Property in the form attached hereto as Schedule L;
(l) An engineer's certificate in respect of the Improvements to
the applicable Property in the form attached hereto as Schedule M;
(m) Certified copies of applicable resolutions and certificates of
incumbency with respect to the Seller, MI, Crestline and Tenant and such other
persons as the Purchaser may reasonably require;
(n) A certificate of a duly authorized officer of each of MI,
Seller, Crestline and Tenant confirming the continued truth and accuracy of its
representations and warranties 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));
(o) The Survey for such Property;
(p) The "As-Built" Drawings;
(q) Copies of the Permits (certified by Seller as true and
correct);
(r) Copies of the Contracts (certified by Seller as true and
correct);
(s) The original (or if not available, copies) of any and all
warranties and guarantees pertaining to the Improvements, specifically including
the manufacturer's roof membrane warranty issued with respect to the buildings
comprising the Improvements;
(t) The FF&E Schedule;
(u) An owner's affidavit executed by Seller 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;
(v) A settlement statement;
(w) Any required bonds and a certificate of substantial completion
substantially in the form set forth in AIA Form G704;
(x) A copy of the final "punch-list" work, if any, required upon
Substantial Completion of the Improvements for such Property certified by
Seller;
(y) Written certification from MI that the Property (including all
guest rooms) is Substantially Complete, opened and, in all material respects,
fully furnished pursuant to and in compliance with the standards set forth in
the Franchise Agreement and the System Standards Manual for the Property, and
which shall also certify the number of guest rooms of such Property;
(z) Written certification in form reasonably acceptable to
Purchaser from each other party to this Agreement, the Liquidity Facility
Agreement, the Pooling Agreement, and the Membership Interest Pledge confirming
and ratifying such instruments and their applicability and effectiveness with
respect to each Property for which a Closing has previously occurred as well as
with respect to the Property or Properties which are the subject of the instant
Closing; and
(aa) 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; and
(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 6.11 of this Agreement and proceed with Closing.
(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 an employee of Seller or MI
and who is familiar with the Property and Improvements in substantially the form
attached 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 (as modified in the form of the
▇▇▇▇-ups attached as Schedule H and Schedule I attached hereto with respect to
each applicable Property for which a Closing is occurring on the initial Closing
Date hereunder), and otherwise in accordance with Section 2.3, including,
without limitation, the provisions thereof relating to preparing and agreeing to
revised Title Commitments for the Properties for which a Closing is occurring
other than on the initial Closing Date hereunder.
(b) The Purchaser shall have received the Survey with respect to
the applicable Property, in accordance with Section 2.4.
4.4 Opinions of Counsel. The Purchaser shall have received written
opinions from counsel to (i) the Seller and MI (which may be its in-house
counsel as to organization, good standing, authorization and enforceability of
applicable documents), and (ii) Crestline and Tenant (which may be its in-house
counsel as to organization, good standing, authorization and enforceability of
applicable documents and local counsel as to enforceability of applicable
documents), in each instance 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, Crestline and Tenant, and the enforceability of
applicable documents and such other matters with respect to the transactions
contemplated by this Agreement as the Purchaser may reasonably require, and for
each Closing subsequent to the initial Closing hereunder, opinions of counsel in
form and substance similar to the opinions of counsel provided at the initial
Closing hereunder.
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, MI,
Crestline and Tenant set forth in Section 6 and Section 6A hereof respectively
(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, Crestline
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) 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
(e) 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 4A. CONDITIONS TO TENANT'S OBLIGATION TO CLOSE.
The obligation of the Tenant to lease each of the Properties (and the
obligation of Crestline to cause Tenant to lease 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:
4A.1 Closing Documents. The Seller, MI or Purchaser, as applicable,
shall have delivered (or cause to be delivered) to the Tenant with respect to
the applicable Property:
(a) The Lease with respect to the applicable Property duly
executed by Purchaser and a Memorandum of Lease with respect to the applicable
Property in recordable form duly executed by Purchaser;
(b) The Liquidity Facility Agreement duly executed by MI;
(c) The Franchise Agreement with respect to the applicable
Property duly executed by MI and a Memorandum of Franchise Agreement with
respect to the applicable Property in recordable form duly executed by MI;
(d) The Management Agreement with respect to the applicable
Property duly executed by the affiliate of MI which is the Manager of such
Property and a Memorandum of Management Agreement with respect to the applicable
Property in recordable form duly executed by such Manager;
(e) The Pooling Agreement duly executed by MI and each affiliate
of MI which is to manage one or more of the Properties pursuant to a Management
Agreement;
(f) The Guaranty of Landlord's Obligations duly executed by the
Guarantors;
(g) A copy of the final certificate of occupancy for the
applicable Property;
(h) An architect's certificate in respect of the Improvements to
the applicable Property in the form attached hereto as Schedule L;
(i) An engineer's certificate in respect of the Improvements to
the applicable Property in the form attached hereto as Schedule M;
(j) Certified copies of applicable resolutions and certificates of
incumbency with respect to the Seller, MI, Guarantors and Purchaser and such
other persons as the Tenant may reasonably require;
(k) A certificate of a duly authorized officer of each of MI,
Seller, the Guarantors and Purchaser confirming the continued truth and accuracy
of its representations and warranties in this Agreement (subject to such changes
as Seller has given notice of to Tenant pursuant to Section 6 and subject to
Section 4A.2(b);
(l) The Survey for the Property;
(m) The "As-Built" Drawings;
(n) The Permits (or copies thereof certified by Seller as true and
correct);
(o) The Contracts (or copies thereof certified by Seller as true
and correct);
(p) Copies of any and all warranties and guarantees pertaining to
the Improvements, specifically including the manufacturer's roof membrane
warranty issued with respect to the buildings comprising the Improvements;
(q) The FF&E Schedule;
(r) An owner's affidavit executed by Seller 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.
(s) A settlement statement;
(t) Any required bonds and a certificate of substantial completion
substantially in the form set forth in AIA Form G704;
(u) A copy of the final "punch-list" work, if any, required upon
Substantial Completion of the Improvements for such Property certified by
Seller;
(v) Written certification from MI that the Property and
Improvements (including all guest rooms) is Substantially Complete, opened and,
in all material respects, fully furnished pursuant to and in compliance with the
standards set forth in the Franchise Agreement and System Standards Manual for
the Property, and which shall also certify the number of guest rooms of such
Property;
(w) Written certification in form reasonably acceptable to Tenant
from each other party to this Agreement, the Guaranty of Landlord's Obligations,
the Liquidity Facility Agreement and the Pooling Agreement confirming and
ratifying such instruments and their applicability and effectiveness with
respect to each Property for which a Closing has occurred as well as with
respect to the Property or Properties which are the subject of the instant
Closing; and
(x) Such other documents, certificates and other instruments as
may be reasonably required to consummate the transaction contemplated hereby.
4A.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 Tenant, Tenant may, but shall not be required to, waive Seller's
compliance with Section 6.11 of this Agreement and proceed with Closing.
(c) Tenant 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 Tenant either or both of the foregoing certificates executed by the
Architect and/or Engineer, as applicable, Tenant shall accept, in lieu thereof,
a certificate executed by an architect and engineer employed by Seller and
familiar with the Property in substantially the form attached as Schedule L-1
and/or Schedule M-1, as applicable.
4A.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 (as modified in the form of the
▇▇▇▇-ups attached as Schedule H and Schedule I attached hereto) with respect to
the Properties for which a Closing is occurring on the initial Closing Date
hereunder, and otherwise in accordance with Section 2.3, including, without
limitation, the provisions thereof relating to preparing and agreeing to revised
Title Commitments for the Properties for which a Closing is occurring other than
on the initial Closing Date hereunder.
(b) The Tenant shall have received the Survey with respect to the
applicable Property, in accordance with Section 2.4.
4A.4 Opinions of Counsel. The Tenant shall have received written
opinions in form and substance reasonably satisfactory to the Tenant and its
counsel (i) from counsel to the Seller and MI (which may be its in-house counsel
as to organization, good standing, authorization and enforceability of
applicable documents) and (ii) from counsel to the Purchaser and Guarantors
regarding the organization, good standing and/or authority of Purchaser and
Guarantors, and the enforceability of applicable documents and such other
matters with respect to the transactions contemplated by this Agreement as the
Tenant may reasonably require, and for each Closing subsequent to the initial
Closing hereunder, opinions of counsel in form and substance similar to the
opinions of counsel provided at the initial Closing hereunder.
4A.5 FF&E Schedule. No later than twenty (20) days prior to Closing of
the purchase of any Property, Seller shall provide to Tenant 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 leased to Tenant upon and following such Closing. Upon
reasonable prior notice to Seller, Tenant shall be entitled to inspect the FF&E
at the Property prior to Closing in order to confirm and verify the FF&E
Schedule.
4A.6 Other.
(a) The representations and warranties of the Seller, MI and
Purchaser set forth in Section 6 and Section 7 hereof respectively (as the same
may have been changed by notice from Seller 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, Purchaser
or the Guarantors 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) 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
(e) 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 3.2.
5.2 Closing Documents. The Purchaser, Tenant or Crestline, as the case
may be, shall have delivered to the Seller:
(a) Duly and fully executed and acknowledged counterparts of the
documents described in Subsections 4.1(b), (c,) (d), (e), (g) and (v);
(b) The Pooling Agreement duly executed by Tenant (or, at any
Closing occurring after the first Closing, a written certification and
acknowledgment by Tenant that the Pooling Agreement continues in force and
effect in accordance with its terms);
(c) The Guaranty of Tenant's Obligations duly executed by
Crestline (or, at any Closing occurring after the first Closing, a written
certification and acknowledgment by Crestline that the Guaranty of Tenant's
Obligations continues in force and effect in accordance with its terms);
(d) A copy of the Lease with respect to the applicable Property
executed by Purchaser and Tenant, and a duly executed and acknowledged original
of the leasehold deed of trust for such Property as set forth in Section 1.35.
(e) The Guaranty of Landlord's Obligations for such Property duly
executed by the Guarantors;
(f) The Guaranty of Purchase Agreement Performance duly executed
by Crestline (or, at any Closing occurring after the first Closing, a written
certification and acknowledgment by Crestline that the Guaranty of Purchase
Agreement Performance continues in force and effect in accordance with its
terms);
(g) A certificate of a duly authorized officer of the Purchaser,
Crestline and Tenant confirming the continued truth and accuracy of the
respective representations and warranties of the Purchaser, Crestline and Tenant
in this Agreement;
(h) Certified copies of applicable resolutions and certificates of
incumbency with respect to the Purchaser, the Guarantors, Tenant, Crestline and
such other persons as the Seller may reasonably require;
(i) Written certification in form reasonably acceptable to Seller
from each other party to this Agreement, the Liquidity Facility Agreement, and
the Pooling Agreement confirming and ratifying such instruments and their
applicability and effectiveness with respect to each Property for which a
Closing has occurred as well as with respect to the Property or Properties which
are the subject of the instant Closing; and
(j) 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, ▇▇▇▇▇▇ & ▇▇▇▇, PA., counsel to the
Purchaser and Guarantor (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, (b) counsel for Crestline and Tenant (which may be its in-house
counsel as to organization, good standing, authorization and enforceability of
applicable documents and local counsel as to enforceability of applicable
documents), in form and substance reasonably satisfactory to MI, Seller, and its
counsel regarding good standing and authority of Crestline and Tenant and the
enforceability of applicable documents contemplated by this Agreement, and (c)
counsel reasonably acceptable to Seller, MI, and its counsel regarding the
enforceability of applicable documents contemplated by this Agreement and such
other matters with respect to the transactions contemplated by this Agreement as
MI or Seller may reasonably require, and for each Closing subsequent to the
initial Closing hereunder, opinions of counsel in form and substance similar to
the opinions of counsel provided at the initial Closing hereunder.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SELLER.
To induce the Purchaser, Guarantors, Crestline and Tenant to enter into
this Agreement, each Seller, as applicable, and MI represents and warrants to
the Purchaser, Guarantors, Crestline and Tenant 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 for such Seller. 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 and in which the conduct
of its business requires such qualification.
6.3 Employees. The applicable 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 at the Property owned by such Seller relating to the period prior to
the applicable Closing and the affiliate of MI which is to be the manager of the
Property pursuant to a Management Agreement 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
applicable 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 or
Tenant, and upon and after Closing, be or be deemed to be transferred to
Purchaser or Tenant. 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 and Tenant 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 and Tenant are 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 or Tenant.
6.4 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 the applicable Seller with respect to any
Property which will be obligations of Purchaser or Tenant 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) the Management Agreement, (vii) the Franchise
Agreement, and (viii) any other document or instrument given or entered into in
connection with Closing.
6.5 Tax Returns. All privilege, gross receipts, excise, sales and use,
personal property and franchise taxes with respect to any Property resulting
from operations prior to the Apportionment Time applicable to such Property will
be paid by the Seller of each Property as and when due and payable, and all tax
returns for such taxes shall be prepared and duly filed, prior to the Closing
(or after Closing with respect to pre-Apportionment Time matters).
6.6 Action of MI and Seller. MI and Seller have each taken all
necessary action to authorize the execution, delivery and performance of this
Agreement by them, 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. The person or persons executing and delivering this
Agreement or any other document to be delivered by MI or the Seller on or prior
to each Closing Date is or shall have been prior to each Closing Date, duly
authorized to execute and deliver such documents on behalf of MI and the Seller,
as applicable.
6.7 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.
6.8 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.
6.9 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.
6.10 Construction Contracts: Mechanics' Liens. At the Closing for each
Property, there will be no outstanding contracts made by the Seller for the
construction or repair of any Improvements relating to such 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.
6.11 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 Tenant
in writing, and Purchaser waives compliance herewith in accordance with Section
4.2(b) and Section 4A.2(b) of this Agreement.
6.12 Hazardous Substances. Except as otherwise disclosed in writing to
Purchaser and Tenant in the Environmental Reports and any Updated Environmental
Reports, to the Seller's and MI's knowledge, none of the Sellers or any other
occupant or user of any of the subject Properties, or any portion thereof, have
stored or disposed of (or engaged in the business of storing or disposing of, or
authorized the storage or disposal of) or has released or caused or authorized
the release of any hazardous waste, contaminants, oil, radioactive or other
material on any of the Properties, or any portion thereof, the removal of which
is required or the maintenance of which is prohibited or penalized by any
applicable Federal, state or local statutes, laws, ordinances, rules or
regulations, and to Seller's and MI's actual knowledge, except as otherwise
disclosed to Purchaser and Tenant, including, without limitation, any matters
described in the Environmental Reports and any Updated Environmental Reports,
the Properties are free from any such hazardous waste, contaminants, oil,
radioactive and other materials, except for reasonable amounts of any such
materials necessary for the maintenance, repair and operation of the Property as
a hotel and stored, maintained and used in accordance with applicable law.
6.13 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.
6.14 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, in compliance in all material
respects with the requirements set forth in the Franchise Agreement and System
Standards Manual for such Property and constructed with materials that are
"new," subject to such "punch list" work as may be required upon Substantial
Completion of such Improvements.
6.15 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 and Tenant by MI and
Seller are true, correct and complete in all material respects.
6.16 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.
6.17 Title to FF&E. Seller has good and marketable title to such
Seller's 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).
6.18 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. As of the Closing Date for each
Property, the FF&E for such Property shall comply in all material respects with
the requirements of the System Standards Manual for such Property and the
Franchise Agreement for such Property.
6.19 No Proffers. As of the Closing Date for each Property, the Seller
of such Property and/or MI shall have paid (or the provision for the payment of
which has been made by the Seller) and/or performed, as applicable, all
proffers, exactions, development fees, tap fees, connection charges, impact
fees, improvements (including off-site improvements) and other requirements
imposed by applicable law of any federal, state or local governmental or
quasi-governmental authority in connection with the construction and development
of such Property.
6.20 No Violations. There exists no violation of any law, regulation,
order or requirement issued by any governmental authority against or affecting
any of the Properties. No Seller has received any written notice or order from
any governmental authority requiring any repairs, maintenance or improvements to
such Seller's Property which have not been fully performed.
6.21 Separate Tax Parcel. Each Property constitutes a separate parcel
for purposes of ad valorem real property taxes, and is not subject to a lien for
non-payment of real property taxes relating to any other property.
6.22 No Defaults. There exists no material default on the part of each
Seller or MI with respect to any Permitted Encumbrance affecting such Property,
other than those defaults which can be cured or discharged by the payment of
money and for which an allowance for the payment thereof has been made at
Closing. Notwithstanding anything to the contrary contained in this Section 6
regarding the survival period for the representations and warranties made
hereunder, the representation and warranty made in this Section 6.22 by the
Sellers and MI shall survive the applicable Closing for an unlimited period of
time.
6.23 Substantial Completion and Opening Date. As of the date hereof,
Seller and MI reasonably anticipate that Substantial Completion and the opening
of all of the Properties will occur on or before March 31, 2001.
6.24 American with Disabilities Act. As of the Closing Date for each
Property, such Property shall comply in all material respects with the Americans
with Disabilities Act.
The representations and warranties made in this Agreement by the
applicable Seller and MI, in Section 6.1 through Section 6.9, inclusive, are
made as of the date hereof and shall be deemed remade by such Seller and MI, as
of each Closing Date for the Property then being conveyed by such 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 such Seller and MI, in
Section 6.10 through Section 6.24, inclusive, shall be made as of the Closing
Date in respect of the Property being sold and transferred, provided, however,
that, MI and 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
6.7 (No Violations of Agreements), Section 6.8 (Litigation), Section 6.13
(Insurance), Section 6.20 (No Violations) and Section 6.23 (Substantial
Completion and Opening Date) as a result of changes in applicable conditions
beyond the control of MI or Seller, by notice to the Purchaser and Tenant 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 and Tenant against any loss that may be suffered by Purchaser or
Tenant as a result of such changes, then Purchaser and Tenant 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 and Tenant, Purchaser and Tenant shall each have the option to either
accept the change and close, or reject the change, in which case, if either of
Purchaser or Tenant reject such change, Purchaser's obligation to purchase the
Property and Tenant's obligation to lease the Property and Crestline's
obligation to cause Tenant to lease the Property in question shall terminate,
and Seller shall reimburse to Purchaser or Tenant their respective direct, out
of pocket expenses incurred in respect of such affected Property (and an
allocable share of expenses attributable generally to the transactions
contemplated by this Agreement and not attributable specifically to any
Property), not to exceed $30,000 per Property per party. All representations and
warranties made in this Agreement by the Seller and MI shall survive the
applicable Closing for a period of one (1) 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 and
Tenant 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 or Tenant deem 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 and Tenant each represent and
warrant that, in entering into this Agreement, they have 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 AND TENANT EACH
ACKNOWLEDGE THAT THE PROPERTY OWNED BY THE SELLER WILL, UPON THE ACQUISITION BY
PURCHASER AND TENANT OF THEIR RESPECTIVE INTERESTS IN 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 AND/OR TENANT 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 or Tenant 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, Crestline and Tenant each acknowledge that they
have entered into this Agreement with the intention of making and relying upon
their 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 this Agreement. The Purchaser, Crestline and Tenant
further each acknowledge 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 except for inquiring with respect to such
matters with the general manager of each Property, 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 MI, the Seller, Crestline and Tenant to enter into this
Agreement, the Purchaser, CHLP if Purchaser is other than CHLP and CHP represent
and warrant to MI, the Seller, Tenant and Crestline 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.
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. The person or persons executing and delivering this
Agreement or any other document to be delivered by Purchaser or Guarantors on or
prior to each Closing Date is or shall have been prior to each Closing Date,
duly authorized to execute and deliver such documents on behalf of Purchaser and
the Guarantors, as applicable.
7.4 Action of the Guarantors. The Guarantors have taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
and upon the execution and delivery of the subject Guaranty of Landlord's
Obligations on or prior to each Closing Date, such document shall constitute the
valid and binding obligation and agreement of the Guarantors, enforceable
against the Guarantors in accordance with their 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.
7.5 No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by the Purchaser or Guarantors, 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 or Guarantors 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 or any Guarantor is bound.
7.6 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 (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.
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 (1) 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 ▇▇▇▇▇ ▇▇▇▇▇▇ (and any successors to such individuals in their
current or substantially similar positions).
SECTION 7A. REPRESENTATIONS AND WARRANTIES OF CRESTLINE AND TENANT.
To induce MI, Seller and Purchaser to enter into this Agreement,
Crestline and Tenant represent and warrant to MI, the Seller and Purchaser as
follows:
7A.1 Status and Authority of Crestline and the Tenant. Each of
Crestline and the Tenant 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 Tenant is, or shall use its best efforts
from and after the initial Closing Date to become, duly qualified and in good
standing in each of the states in which the Properties are located as promptly
as reasonably practicable, provided that Tenant shall obtain all such
qualifications on or prior to the date which is forty-five (45) days after the
Effective Date for all states other than Utah, and one hundred twenty (120) days
after the Effective Date for Utah. Tenant will have been, and at all relevant
times during the term hereof remain, organized as a bankruptcy remote, single
purpose entity, wholly-owned by Crestline, whose sole business shall be the
ownership of Tenant's interest under the Leases.
7A.2 Actions of Crestline and the Tenant. Each of Crestline and the
Tenant 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 Crestline or the Tenant on or prior to each Closing
Date, such document shall constitute the valid and binding obligation and
agreement of Crestline or the Tenant, as the case may be, enforceable against
Crestline or the Tenant, respectively, 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.
7A.3 No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by Crestline or the Tenant, 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 Crestline or the Tenant pursuant to the terms of any indenture,
mortgage, deed of trust, note, evidence of indebtedness or any other agreement
or instrument by which Crestline or the Tenant is bound. The person or persons
executing and delivering this Agreement or any other document to be delivered by
Tenant or Crestline on or prior to each Closing Date is or shall have been prior
to each Closing Date, duly authorized to execute and deliver such documents on
behalf of Tenant and Crestline, as applicable.
7A.4 Litigation. Neither Crestline nor the Tenant has received any
written notice of and, to Crestline's and the Tenant's knowledge, no
investigation, action or proceeding is pending and, to Crestline's and the
Tenant's knowledge, no action or proceeding is threatened and neither Crestline
nor the Tenant has received any notice of, and to Crestline's and the Tenant'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 Crestline
and the Tenant are made as of the date hereof and shall be deemed remade by
Crestline and the Tenant 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 Crestline and the Tenant shall survive the
applicable Closing for a period of one (1) 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 phrases "to Crestline's knowledge" or
"to the Tenant's knowledge" or words of similar import shall mean the actual
(and not constructive or imputed) knowledge, without independent investigation
or inquiry, of ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (or any
successor to such individuals in their current or substantially similar
positions).
SECTION 8. COVENANTS OF MI AND THE SELLER.
The Seller, as applicable, 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 such Seller's 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 Construction, Completion of Punch List; Correction of Defects.
(a) From and after the expiration of the Inspection Period with
respect to any Property for which this Agreement has not been terminated by
Purchaser or Tenant, the applicable Seller shall use commercially reasonable
efforts to cause Substantial Completion of each Property to occur no later than
March 31, 2001, subject to Force Majeure Events.
(b) In respect of any Property which has been sold and transferred
to Purchaser at a Closing hereunder, the applicable Seller shall use
commercially reasonable efforts 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 (1) year following the acceptance of the Improvements by the
Seller from the general contractor for such Improvements. At each Closing,
Seller and MI shall certify the outside date of such one (1) year warranty
period to Purchaser and Tenant. The Purchaser and Tenant agree to cooperate with
the Seller and/or MI in enforcing any applicable warranties or guaranties with
respect to such defects. Seller shall have the exclusive right and obligation to
pursue the aforementioned rights and remedies; however, in the event that Seller
fails to exercise such rights and remedies, after ten (10) days from notice by
Purchaser or Tenant to Seller of such failure to exercise such rights and
remedies, Purchaser and Tenant shall then have the right to pursue the same. The
provisions of this Section 8.2(b) 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 for such Property.
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 and Tenant, 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 and Tenant's sole remedy shall be to terminate
this Agreement with respect to the affected Property (which remedy may be
effected by either of them), 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 and Tenant the Purchaser's and Tenant's
respective direct, out of pocket expenses incurred in respect of such affected
Property, (and an allocable share of expenses attributable generally to the
transactions contemplated by this Agreement and not attributable specifically to
any Property), not to exceed $30,000 per Property per party.
8.5 Final Payment. Upon final payment to the general contractor in
respect of a given Property, Seller shall provide Purchaser and Tenant with a
copy of the final requisition received from the general contractor, evidence of
Seller's payment thereof, and a final release of liens.
8.6 Opening Date for Each Property. MI and Seller covenant to use
commercially reasonable efforts to cause the Opening Date for each Property to
occur on or before March 31, 2001, subject to Force Majeure Events.
8.7 FF&E Reserve. If the Opening Date for a Property occurs prior to
the Closing Date for such Property, MI and Seller shall from and after such
Opening Date create and maintain for such Property a reserve for replacements,
repairs and other capital costs consistent with the requirements set forth in
the System Standards Manual and the Franchise Agreement, and on the Closing Date
for each Property such reserve shall be contributed to the "Reserve" as defined
in and maintained pursuant to the Management Agreements.
8.8 FAS & Inventory. As of the Closing Date for each Property, such
Property will have sufficient FAS and Inventory (each as defined in the Lease
applicable to such Property) required by the System Standards Manual and the
Franchise Agreement applicable to such Property.
SECTION 9. APPORTIONMENTS.
9.1 Apportionments. (a) At the Closing for each Property, the following
adjustments and prorations shall be computed as of 12:01 a.m. (local time at the
Property) on the day after the Closing Date ("Apportionment Time") for such
Property. All items of revenue, cost and expense of such Property with respect
to the period prior to the Apportionment Time shall be for the account of MI and
the Seller of such Property. All items of revenue, cost and expense of such
Property with respect to the period from and after the Apportionment Time shall
be for the account of Tenant according to the terms of the Lease for such
Property. All adjustments shall be on an accrual basis in accordance with
generally accepted accounting principles, and otherwise in accordance with the
requirements set forth in Schedule X. Seller shall be responsible for rent due
under the Lease for each Property and for all other operating expenses incurred
in respect of such Property from and after the Closing Date but prior to the
Apportionment Time for such Property.
(b) At each Closing, a fair and reasonable estimated accounting of
all adjustments and prorations shall be performed and agreed to by MI, each
applicable Seller, Purchaser and Tenant. Subsequent final adjustments and
payments (the "True-Up") shall be made in cash or other immediately available
funds as soon as practicable after the Closing Date for such Property, based
upon an accounting performed by the Manager for such Property and acceptable to
Purchaser and Tenant. In the event the parties have not agreed with respect to
the adjustments required to be made pursuant to this Section 9.1,upon
application by any such party, a certified public accountant reasonably
acceptable to the parties to such disputed adjustment shall determine any such
adjustments which have not theretofore been agreed to between such parties. The
charges of such accountant shall be borne equally by the parties to such
disputed adjustment. All adjustments to be made as a result of the final results
of the True-Up shall be paid to the party entitled to such adjustment within
thirty (30) days after the final determination thereof.
(c) The provisions of this Section 9.1 shall survive each Closing.
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 until such Third-Party Costs have equaled the sum of one percent (1%)
of the aggregate Allocable Purchase Prices, and thereafter such Third-Party
Costs shall be borne solely by Seller. As used herein, the term "Third-Party
Costs" shall include the following: (i) any transfer, sales, use, recordation or
other similar taxes, impositions or expenses ("Recording Charges") incurred in
connection with the recordation or filing of the instruments required at Closing
on each Property or the transfer of the assets and/or the Properties; (ii)
Environmental Reports and Updated Environmental Reports prepared in connection
with the purchase and sale of the Properties pursuant to this Agreement; (iii)
Surveys of the Properties prepared in connection with due diligence under this
Agreement; (iv) premiums for the title insurance policies to be provided at each
Closing pursuant to Section 2.3, Section 4.3(a) and Section 4A.3(a); (v) any
closing or escrow charges or other expenses payable to the Title Company
conducting the Closing; (vi) property appraisals prepared in connection with the
purchase and sale of the Properties pursuant to this Agreement; and (vii) local
counsel fees (which fees shall be limited to those incurred in connection with
usual and customary local counsel services in similar commercial real estate
transactions). Purchaser shall bear the costs of all Recording Charges imposed
in connection with the recordation of the memorandum of lease and the memorandum
of management agreement for each Property, in an amount not to exceed, with
respect to both of such instruments, $25,000 per Property (and any sums so
expended by Purchaser shall be counted against the maximum obligation of
Purchaser hereunder with respect to Recording Charges as set forth in this
Section 9.2(a)).
(b) Seller shall be solely responsible for any taxes due in
respect of its income, net worth or capital, if any, and any privilege, sales,
use 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 the
Apportionment Time, and Tenant shall be solely responsible for all such taxes
for any period from and after the Apportionment Time, 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 borne as provided in the Lease for each such Property.
(c) Except as expressly provided in this Section 9, Seller,
Purchaser and Tenant 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 herewith 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 or Tenant, either the Purchaser or the Tenant
may terminate this Agreement with respect to the affected Property and each of
Purchaser and Tenant may respectively elect that either Seller shall reimburse
to Purchaser or Tenant, as the case may be, the Purchaser's or the Tenant's
respective direct, out of pocket expenses incurred in respect of such affected
Property (and an allocable share of expenses attributable generally to the
transactions contemplated by this Agreement and not attributable specifically to
any Property), not to exceed $30,000 per Property per party, or the Purchaser
and/or Tenant may instead elect to pursue any and all remedies available to them
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 and Tenant hereby agree that
they will not commence or prosecute any action for) consequential or punitive or
exemplary damages (other than Tenant's, Crestline's, Purchaser's or Guarantor's
reasonable attorneys' fees and expenses pursuant to Section 11.11 hereof or for
any matter indemnified pursuant to Section 11.1 hereof) and (y) in no event
shall the aggregate liability of the Seller or MI under this Agreement exceed an
amount equal to five percent (5%) (provided, Tenant and Crestline together shall
be limited to, and shall not recover in excess of, one percent (1%) of such
Allocable Purchase Price from Seller or MI) of the aggregate of the Allocable
Purchase Prices for all of the Properties affected by the default plus any
amounts necessary to be paid to indemnify and hold harmless Tenant, Crestline,
Purchaser or Guarantors pursuant to Section 11.1 and the reasonable attorneys'
fees and expenses incurred by Purchaser and Tenant 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 or Guarantors 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 Purchaser
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 Seller or Tenant, either the Seller or the
Tenant may terminate this Agreement with respect to the affected Property and
each of Seller and Tenant may respectively elect that either Purchaser or
Guarantors shall reimburse to Seller or Tenant, as the case may be, the Seller's
or the Tenant's respective direct, out of pocket expenses incurred in respect of
such affected Property (and an allocable share of expenses attributable
generally to the transactions contemplated by this Agreement and not
attributable specifically to any Property), not to exceed $30,000 per Property
per party, or the Seller and/or Tenant may instead elect to pursue any and all
remedies available to them 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 Purchaser be liable for (and Seller and Tenant
hereby agree that they will not commence or prosecute any action for)
consequential or punitive or exemplary damages (other than Tenant's,
Crestline's, Seller's or MI's reasonable attorneys' fees and expenses pursuant
to Section 11.11 hereof or for any matter indemnified pursuant to Section 11.1
hereof) and (y) in no event shall the aggregate liability of the Purchaser under
this Agreement exceed an amount equal to five percent (5%) (provided, Tenant and
Crestline together shall be limited to, and shall not recover in excess of, one
percent (1%) of such Allocable Purchase Price from Purchaser) of the aggregate
of the Allocable Purchase Prices for all of the Properties affected by the
default plus any amounts necessary to be paid to indemnify and hold harmless
Tenant, Crestline, Seller or MI pursuant to Section 11.1 and the reasonable
attorneys' fees and expenses incurred by Seller and/or Tenant in enforcing the
Agreement against Purchaser in respect of Purchaser's default. 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 Default by Crestline and/or the Tenant. If Crestline and/or the
Tenant 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
Crestline and/or the Tenant 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 Seller or the
Purchaser, either the Seller or the Purchaser may terminate this Agreement with
respect to the affected Property and each of Seller or Purchaser may
respectively elect that Crestline and the Tenant shall jointly and severally
reimburse to Seller or to Purchaser, as the case may be, the Seller's or
Purchaser's respective direct, out of pocket expenses incurred in respect of
such affected Property (and an allocable share of expenses attributable
generally to the transactions contemplated by this Agreement and not
attributable specifically to any Property), not to exceed $30,000 per Property
per party, or the Seller and/or Purchaser may instead elect to pursue any and
all remedies available to them 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 Crestline or the Tenant be liable for (and
Seller and Purchaser hereby agree that they will not commence or prosecute any
action for) consequential or punitive or exemplary damages (other than Seller's,
MI's, Purchaser's or Guarantor's reasonable attorneys' fees and expenses
pursuant to Section 11.11 hereof or for any matter indemnified pursuant to
Section 11.1 hereof) and (y) in no event shall the aggregate liability of
Crestline and the Tenant under this Agreement exceed an amount equal to two
percent (2.00%) of the aggregate of the Allocable Purchase Prices for all of the
Properties affected by the default plus any amounts necessary to be paid to
indemnify and hold harmless Seller, MI, Purchaser or Guarantors pursuant to
Section 11.1 and the reasonable attorneys' fees and expenses incurred by Seller
and/or Purchaser in enforcing the Agreement against Crestline and/or the Tenant
in respect of Crestline's or Tenant's default. It is understood and agreed that
for purposes of this Section 10.3, 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.
10.4 Limitations on Liability. The parties hereto confirm and agree
that in each instance herein where one party and its parent or affiliate are
obligated to reimburse another party or its parent or affiliate for costs and
expenses herein, (i) in the case of Purchaser such reimbursement shall be
conclusively deemed to be for the account of Purchaser, CHP, and if Purchaser is
an entity other than CHLP, CHLP shall have no independent claim for damages,
costs or expenses, (ii) in the case of Tenant such reimbursement shall be
conclusively deemed to be for the account of Tenant and Crestline and Crestline
shall have no independent claim for damages, costs or expenses, (iii) in the
case of Seller such reimbursement shall be conclusively deemed to be for the
account of Seller and MI, and MI shall have no independent claim for damages,
costs or expenses. The parties further confirm and agree that no party hereto (a
"Non-Performing Party") will be deemed to be in default hereunder if its failure
to perform an obligation hereunder is based solely other the non-performance of
another party to this Agreement (which other party is not an affiliate of the
Non-performing party).
SECTION 11. MISCELLANEOUS.
11.1 Agreement to Indemnify. (a) Subject to any express provisions of
this Agreement to the contrary, but not subject to any limitation on liability
contained in Section 10, from and after any Closing, with respect to the
applicable Property, (i) the applicable Seller and, if the applicable Seller is
not MI, MI shall indemnify, defend and hold harmless the Purchaser, Tenant and
Crestline 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 (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 such Seller that occurred in connection with its
ownership or operation of the applicable Property prior to the applicable
Closing Date or obligations accruing prior to the applicable Closing Date under
any Contract of such 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 such Seller and, MI under Section 6 (as such
representations and warranties may be modified pursuant to said Section 6 and
subject to the one (1) year limitation period set forth therein), or (z) any
claim against Purchaser or Tenant for damage to property of others or injury to
or death of any person or any debts or obligations of or against such Seller and
arising out of any event occurring on or about or in connection with the
applicable Property or any portion thereof, at any time or times prior to the
applicable Closing Date, (ii) the Purchaser and, if Purchaser is not CHLP, CHLP
shall indemnify, defend and hold harmless the applicable Tenant, Crestline,
Seller and MI 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 applicable Property from and after the applicable Closing Date
provided that any provision of any Management Agreement (with respect to MI or
the Seller) or any Lease (with respect to Purchaser, or Owner Agreement that
applies to such event, act or omission shall take precedence over the indemnity
provided for in this clause (x), or (y) any material breach of a representation
or warranty made by Purchaser and, if Purchaser is not CHLP, CHLP under Section
7 as such representations and warranties may be modified pursuant to said
Section 7 (and subject to the one (1) year limitation period set forth therein);
(iii) the Tenant shall indemnify, defend and hold harmless MI, the Seller and
Purchaser from and against any and all obligations, claims, losses, damages,
liabilities and expenses (including, without limitation, reasonable attorneys'
and accountants' fees and disbursements) arising out of (x) events, acts, or
omissions of the Tenant that occur in connection with its lease of the Property
from and after the applicable Closing Date, provided that any provision of any
Management Agreement (with respect to MI or the Seller) or any Lease (with
respect to Purchaser, or Owner Agreement that applies to such event, act or
omission shall take precedence over the indemnity provided for in this clause
(x), and (y) any material breach of a representation or warranty made by Tenant
and/or Crestline under Section 7A (and subject to the one (1) year limitation
period set forth therein); and (iv) Crestline shall indemnify, defend and hold
harmless MI, the Seller and 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 any material breach of a representation or warranty made by
Crestline under Section 7A (and subject to the one (1) year limitation period
set forth therein. 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 6.12. The indemnity provided for in this
Section 11.1 shall not extend to any consequential damages.
(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 Tenant and their respective successors and assigns from
and against any 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 any 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 another 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 without limitation as to time.
All representations and warranties made in this Agreement shall survive the
applicable Closing for a period of one (1) 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.
11.1A Election of Purchaser to Continue After Termination or Default of
Tenant. In the event Tenant exercises any right to terminate this Agreement as
to any of the Properties, or otherwise fails to perform its obligations
hereunder (in which event of such failure to perform Tenant shall not have any
right to proceed hereunder for any Property for which a Closing has not yet
occurred) with respect the closing of any of such Properties, MI agrees that
Purchaser may, notwithstanding, elect to close under this Agreement provided
that Purchaser provides a replacement tenant for Tenant which is reasonably
acceptable to MI, and that such closing otherwise occurs on the same terms and
conditions contemplated by this Agreement. Nothing in this subsection shall be
construed to limit or waive any rights which MI and/or Purchaser may have
against Tenant or Crestline with respect to such failure.
11.2 Brokerage Commissions. Each of the parties hereto represents to
the other parties that it dealt with no broker, finder or like agent in
connection with this Agreement or the transactions contemplated hereby, 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, Tenant and Crestline and their 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, Crestline and Tenant and their
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. Crestline and the Tenant (as the case may be) shall indemnify and
hold harmless the Seller and Purchaser and their 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 Crestline or the Tenant (as the case may be). 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 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, Crestline, or Tenant 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 parties as soon as such party learns that it must make such disclosure.
11.4 Notices. (a) Any and all notices, demands, consents, approvals,
offers, elections and other communications required or permitted under this
Agreement shall be deemed adequately given if in writing and the same shall be
delivered either in hand, 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, 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
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/924.04
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasury
with a copy to:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/923.00
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Law Department
and
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, L.L.P.
1800 Mercantile Bank & Trust Building
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
if to the Purchaser, to:
CNL Hospitality Partners, LP
CNL Center at City Commons
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Senior Vice President of Finance
and Administration
with a copy to:
Lowndes, Drosdick, Doster, ▇▇▇▇▇▇ & ▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Post Office Box 2809
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
if to MI:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/924.04
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasury
with a copy to:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/923.00
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Law Department
and
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, L.L.P.
1800 Mercantile Bank & Trust Building
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
if to Tenant:
CCCL Leasing LLC
c/o Crestline Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
with a copy to:
CCCL Leasing LLC
c/o Crestline Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasurer
if to Crestline:
Crestline Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
and with a copy to:
Crestline Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasurer
(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.
11.5 Waivers, Etc. Any waiver of any term or condition of this
Agreement, or of the breach of any covenant, representation or warranty
contained herein, in any one instance, shall not operate as or be deemed to be
or construed as a further or continuing waiver of any other breach of such term,
condition, covenant, representation or warranty or any other term, condition,
covenant, representation or warranty, nor shall any failure at any time or times
to enforce or require performance of any provision hereof operate as a waiver of
or affect in any manner such party's right at a later time to enforce or require
performance of such provision or any other provision hereof. This Agreement may
not be amended nor shall any waiver, change, modification, consent or discharge
be effected, except by an instrument in writing executed by or on behalf of the
party against whom enforcement of any amendment, waiver, change, modification,
consent or discharge is sought.
11.6 Assignment; Successors and Assigns. This Agreement and all rights
and obligations hereunder shall not be assignable by any party without the
written consent of the other parties, except that 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, and except
that Tenant may assign this Agreement to any entity to which assignment would be
permitted under the Leases for the Properties. 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.
11.7 Severability. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision or provisions
in question invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case.
11.8 Counterparts, Etc. This Agreement may be executed in two (2) 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.
11.9 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 shall 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.
11.10 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.
11.11 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.
11.12 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 (except as and to the
extent specifically provided for herein) 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 and
landlord and prospective tenant, as the case may be.
11.13 Section and Other Headings. The headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
11.14 Disclosure. From and after Closing on the purchase and sale of
any Property, and at the written request of Purchaser, the applicable Seller
shall provide such financial statements (in addition to the financial statements
to be provided at Closing pursuant to this Agreement) in respect of such
Seller's operations from the date of such 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.
11.15 Time of the Essence. Time is of the essence with respect to this
Agreement.
11.16 Little ▇▇▇▇ ▇▇▇▇▇ Transaction. Provided that Purchaser has not
exercised its option to delay the Closing Date for the Four Properties as set
forth in Section 3.1(c) hereof, and further provided that at the time of
exercise of the option to delay the Little ▇▇▇▇ ▇▇▇▇▇ closings, as herein
provided, there exists no default by Purchaser or CHLP hereunder or by CHLP
under any agreement to which it is a party in connection with the "Little ▇▇▇▇
▇▇▇▇▇" transaction, MI hereby grants to CHLP an option, to be exercised by
providing written notice to MI, to delay the closing date for the "Little ▇▇▇▇
▇▇▇▇▇" transaction until June 30, 2001. If CHLP exercises this option, and there
occurs thereafter a default by either Purchaser or CHLP under this Agreement or
by CHLP under any agreement to which it is a party in connection with the
"Little ▇▇▇▇ ▇▇▇▇▇" transaction, and in addition to any other right or remedy
available to MI, MI may, by written notice to CHLP, require CHLP to proceed to
closing with respect to the "Little ▇▇▇▇ ▇▇▇▇▇" transaction on any Business Day
designated by MI which is at least thirty (30) days after the date of such
notice (but which shall in no event be sooner than the original scheduled
closing date therefor).
[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.
MI:
MARRIOTT INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
SELLER:
RESIDENCE INN BY MARRIOTT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
COURTYARD MANAGEMENT CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SPRINGHILL SMC CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
TOWNEPLACE MANAGEMENT CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
PURCHASER:
CNL HOSPITALITY PARTNERS, LP
By: CNL Hospitality GP Corp.
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President of Finance
and Administration
CRESTLINE:
CRESTLINE CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
TENANT:
CCCL LEASING LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
The undersigned, CNL Hospitality Properties, Inc., a Maryland corporation, joins
herein for the purpose of evidencing its agreement to enter into and deliver
each Guaranty of Landlord's Obligations pursuant to the terms of the foregoing
Agreement.
CNL Hospitality Properties, Inc.
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President of
Finance and Administration