EXHIBIT 10.29
PURCHASE AND SALE AGREEMENT
between
PATRIOT AMERICAN HOSPITALITY PARTNERSHIP, L.P.
("Patriot")
and
MTD ASSOCIATES
("Crow")
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
1.1 Definitions.......................................... 1
ARTICLE II ACQUISITION OF PROPERTY; DEPOSIT; ACCOUNTING
FOR PURCHASE PRICE; TITLE
2.1 Sale of Property..................................... 9
2.2 Acquisition Procedures............................... 9
2.3 Deposit.............................................. 9
2.4 Submission Matters and Title Information............. 10
ARTICLE III CROW'S REPRESENTATIONS AND WARRANTIES
3.1 Organization and Power............................... 14
3.2 Authorization and Execution.......................... 14
3.3 Non-Contravention.................................... 14
3.4 Intentionally Deleted................................ 14
3.5 No Special Taxes..................................... 14
3.6 Compliance with Existing Laws........................ 15
3.7 Intentionally Deleted................................ 15
3.8 Operating Agreements................................. 15
3.9 Insurance............................................ 15
3.10 Condemnation Proceedings; Roadways................... 15
3.11 Actions or Proceedings............................... 15
3.12 Labor and Employment................................. 16
3.13 Financial Information and Submission Matters......... 16
3.14 Submission Matters................................... 16
3.15 Bankruptcy........................................... 16
3.16 Hazardous Substances................................. 16
3.17 Intentionally Deleted................................ 17
3.18 Occupancy Agreements................................. 17
3.19 Leased Property...................................... 17
3.20 Intentionally Deleted................................ 17
3.21 Americans With Disabilities Act...................... 17
3.22 Structural Condition................................. 17
3.23 Zoning and Platting.................................. 18
3.24 Access............................................... 18
3.25 No Commitments....................................... 18
3.26 Intentionally Deleted................................ 18
3.27 No Other Property Interests.......................... 18
3.28 Intentionally Deleted................................ 18
3.29 Relationship to Certain Parties...................... 18
3.30 Space Leases......................................... 18
3.31 LIMITATIONS ON REPRESENTATIONS AND WARRANTIES........ 18
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ARTICLE IV PATRIOT'S REPRESENTATIONS AND WARRANTIES
4.1 Organization and Power.................................. 20
4.2 Authority of Patriot.................................... 20
4.3 Non-contravention....................................... 20
4.4 Litigation.............................................. 20
4.5 Bankruptcy.............................................. 20
ARTICLE V CONDITIONS PRECEDENT
5.1 As to Patriot's Obligations............................. 21
5.2 As to Crow's Obligations................................ 22
5.3 As to Patriot's and Crow's Obligations.................. 23
ARTICLE VI COVENANTS OF CROW
6.1 Operating Agreements and Occupancy Agreements........... 23
6.2 Warranties and Guaranties............................... 23
6.3 Insurance............................................... 23
6.4 Independent Audit....................................... 23
6.5 Operation of Property Prior to Closing.................. 24
6.6 Capital Reserve Account................................. 26
6.7 Employees............................................... 26
ARTICLE VII Intentionally Deleted
ARTICLE VIII CLOSING
8.1 Closing................................................. 27
8.2 Crow's Deliveries....................................... 27
8.3 Patriot's Deliveries.................................... 30
8.4 Mutual Deliveries....................................... 30
8.5 Closing Costs........................................... 31
8.6 Revenue and Expense Allocations......................... 31
ARTICLE IX GENERAL PROVISIONS
9.1 Condemnation............................................ 33
9.2 Risk of Loss............................................ 34
9.3 Absence of Broker....................................... 34
9.4 Bulk Sale............................................... 34
9.5 Intentionally Deleted................................... 35
9.6 Crow's Accounts Receivable.............................. 35
ARTICLE X LIABILITY OF PATRIOT; INDEMNIFICATION
10.1 Liability of Patriot.................................... 35
10.2 Indemnification by Crow................................. 36
10.3 Indemnification by Patriot.............................. 36
10.4 Default by Crow......................................... 36
10.5 Default by Patriot...................................... 36
10.6 Costs and Attorneys' Fees............................... 36
10.7 Limitation of Liability................................. 36
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ARTICLE XI MISCELLANEOUS PROVISIONS
11.1 Completeness; Modification.............................. 37
11.2 Assignments............................................. 37
11.3 Successors and Assigns.................................. 37
11.4 Days.................................................... 37
11.5 Governing Law........................................... 37
11.6 Counterparts............................................ 37
11.7 Severability............................................ 37
11.8 Costs................................................... 37
11.9 Notices................................................. 38
11.10 Escrow Agent............................................ 38
11.11 Incorporation by Reference.............................. 39
11.12 Survival................................................ 39
11.13 Further Assurances...................................... 39
11.14 No Partnership.......................................... 39
11.15 Time of Essence......................................... 39
11.16 Signatory Exculpation................................... 39
11.17 Rules of Construction................................... 40
11.18 Omnibus Purchase and Sale Agreement..................... 40
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PURCHASE AND SALE AGREEMENT
---------------------------
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of this
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14th day of April, 1997, between PATRIOT AMERICAN HOSPITALITY PARTNERSHIP,
L.P., a Virginia limited partnership or its permitted assigns ("Patriot"), and
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MTD ASSOCIATES, a Texas general partnership ("Crow").
R E C I T A T I O N S:
▇. ▇▇▇▇ is the owner of that certain real property described on Exhibit A
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attached hereto and the improvements situated thereon commonly known as the
"Wyndham Milwaukee Center", situate, lying and being in Milwaukee County, State
of Wisconsin.
B. Patriot is desirous of acquiring such hotel property from Crow and
Crow is desirous of selling such hotel property to Patriot, upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of premises and in consideration of the
mutual covenants, promises and undertakings of the parties hereinafter set
forth, and for other good and valuable considerations, the receipt and
sufficiency of which is hereby acknowledged by the parties, it is agreed:
ARTICLE I
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DEFINITIONS
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1.1 Definitions. The following terms shall have the indicated meanings:
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"Act of Bankruptcy" shall mean if a party hereto or any general
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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 of all 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 a 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 hereafter in effect)
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judgment or decree approving or ordering any of the foregoing shall be entered
and continue unstayed and in effect, for a period of 60 consecutive days.
"Advance Bookings" shall mean reservations made by Crow and/or its
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managing agent prior to Closing for Hotel rooms or meeting rooms to be utilized
after Closing, or for catering services or other Hotel services to be provided
after Closing, in the ordinary course of business.
"Affiliated Company" means any other entity which is, along with a
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party and/or its management company, a member of a controlled group of
corporations or a controlled group of trades or businesses (as defined in
Section 414(b) or (c) of the Internal Revenue Code), any entity which along with
such party and/or its management company is included in an affiliated service
group as defined in Section 414(m) of the Internal Revenue Code, and any other
entity which is required to be aggregated with such party and/or its management
company pursuant to Treasury Regulations under Section 414(o) of the Internal
Revenue Code.
"Applicable Laws" shall mean any applicable building, zoning,
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subdivision, environmental, health, safety or other governmental laws, statutes,
ordinances, resolutions, rules, codes, regulations, orders or determinations of
any Governmental Authority or of any insurance boards of underwriters (or other
body exercising similar functions), or any restrictive covenants or deed
restrictions affecting the Property or the ownership, operation, use,
maintenance or condition thereof.
"Assignment and Assumption Agreement" shall mean one or more
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assignment and assumption agreements whereby (a) Crow (1) assigns and Patriot's
lessee or other designee assumes the Operating Agreements, Space Leases and
Personal Property Leases that have not been terminated prior to Closing in
accordance herewith, (2) assigns all of Crow's right, title and interest in and
to the Intangible Personal Property, to the extent assignable, and (3)
indemnifies, defends and holds Patriot and Patriot's lessee or designee, as
applicable, harmless with respect to all defaults, liabilities, claims, costs
and expenses (including, without limitation, reasonable attorneys' fees)
relating to acts or omissions accruing under such Operating Agreements, Space
Lease and Personal Property Leases before the Closing Date; and (b) Patriot's
lessee indemnifies, defends and holds Crow harmless with respect to all
defaults, liabilities, claims, costs and expenses (including, without
limitation, reasonable attorneys' fees) relating to acts or omissions accruing
under such Operating Agreements, Space Lease and Personal Property Leases from
and after the Closing Date.
"Assignment of Ground Lease" shall mean that certain assignment and
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assumption agreement, in recordable form, whereby (a) Crow assigns to Patriot
and Patriot assumes, Crow's undivided interest in and to the lessor's right,
title and interest in and to the Parking Lease and the Parking Improvements, and
any other interest in the Parking Lease and Parking Improvements attributable to
the Real Property is assigned to Patriot, and (b)(1) Crow indemnifies, defends
and holds Patriot harmless with respect to all defaults, liabilities, claims,
costs and expenses (including, without limitation, reasonable attorneys' fees)
relating to acts or omissions of Crow accruing or occurring under the Parking
Lease before the Closing Date, and (2) Patriot indemnifies, defends and holds
Crow harmless with respect to all defaults, liabilities, claims, costs and
expenses (including, without limitation, reasonable attorneys' fees) relating to
acts or omissions of Patriot accruing and occurring under the Parking Lease from
and after the Closing Date.
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"Assignment of Occupancy Agreements" shall mean the assignment
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agreement, in recordable form, whereby (a) Crow (1) assigns and Patriot's lessee
or other designee assumes all of Crow's right, title and interest in and to the
Occupancy Agreements, and (2) indemnifies, defends and holds Patriot and
Patriot's lessee or other designee, as applicable, harmless with respect to all
defaults, liabilities, claims, costs and expenses (including, without
limitation, reasonable attorneys' fees) relating to acts or omissions accruing
under such Occupancy Agreements before the Closing Date; and (b) Patriot's
lessee or other designee, as applicable, indemnifies, defends and holds Crow
harmless with respect to all defaults, liabilities, claims, costs and expenses
(including, without limitation, reasonable attorneys' fees) relating to acts or
omissions accruing under such Occupancy Agreements from and after the Closing
Date.
"Authorizations" shall mean all licenses, permits and approvals
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required by any governmental or quasi-governmental agency, body, department,
commission, board, bureau, instrumentality or officer, with respect to the
construction, ownership, operation, leasing, maintenance, or use of the Property
or any part thereof.
"Badger Fourteen" shall mean Badger XIV Limited Partnership, a Texas
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limited partnership.
"Badger Nineteen" shall mean Badger XIX Limited Partnership, a Texas
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limited partnership.
"Badger Sixteen" shall mean Badger XVI Limited Partnership, a Texas
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limited partnership.
"▇▇▇▇ of Sale" shall mean one or more bills of sale conveying title to
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the Tangible Personal Property from Crow to Patriot or its designee (as Patriot
shall specify).
"Capital Reserve Account" shall mean the account maintained pursuant
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to Section 6.6.
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"Closing" shall mean the closing of the sale of the Property pursuant
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to this Agreement and the Omnibus Purchase and Sale Agreement and shall be
deemed to occur at the time set forth therein.
"Closing Adjustments" shall mean the closing costs set forth in
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Section 8.5 and the allocations set forth in Section 8.6.
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"Closing Date" shall mean the date on which the Closing occurs.
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"Closing Documents" shall mean the documents defined as such in
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Section 8.1 hereof.
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"Crow's Organization Documents" shall mean the current partnership
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agreement and certificate of limited partnership and all amendments thereto of
Crow and its general partners.
"Deed" shall mean that certain deed conveying fee simple title to the
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Real Property by deed, in the form which is the equivalent of a Texas special
warranty deed in the
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state in which the Property is located, in recordable form, and subject only to
Permitted Title Exceptions. If there is any difference between the description
of the Land, as shown on Exhibit A attached hereto and the description of the
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Land as shown on the Survey, the description of the Land to be contained in the
Deed and the description of the Land set forth in the Title Commitment shall
conform to the description shown on the Survey.
"Deposit" shall mean all amounts paid to Crow by Patriot pursuant to
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Section 2.3 hereof.
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"Effective Date" shall mean the date this Agreement has been fully
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executed and delivered by all parties hereto.
"Environmental Damages" shall mean all third-party claims, judgments,
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damages, losses, penalties, fines, liabilities (including, without limitation,
punitive damages and strict liability), encumbrances, liens, costs and expenses
of investigation and defense of any claim, whether or not such is ultimately
defeated, and of any settlement or judgment, of whatever kind or nature,
contingent or otherwise, matured or unmatured, including, without limitation,
attorneys' fees and disbursements and consultants' fees, any of which arise as a
result of the existence of Hazardous Materials upon, about or beneath the
Property or migrating or threatening to migrate from the Property, or as a
result of the existence of a violation of Environmental Requirements pertaining
to the Property.
"Environmental Requirements" shall mean (i) all applicable statutes,
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regulations, rules, policies, ordinances, codes, licenses, permits, orders,
approvals, plans, authorizations, and similar items, of all Governmental
Authorities, and (ii) all judicial, administrative and regulatory decrees,
judgments and orders, in each case of (i) and (ii) relating to the protection of
human health or the environment from Hazardous Materials, including, without
limitation: (a) all requirements thereof, including, without limitation, those
pertaining to reporting, licensing, permitting, investigation and remediation of
emissions, discharges, releases or threatened releases of Hazardous Materials
into the air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials; and (b) all requirements
pertaining to the protection of the health and safety of employees or the public
from Hazardous Materials.
"Escrow Agent" shall mean American Title Company, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
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▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
"Financial Information" shall mean the financial information defined
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as such in Section 3.13 hereof.
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"Governmental Authority" shall mean any federal, state, county,
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municipal or other government or any governmental or quasi-governmental agency,
department, commission, board, bureau, officer or instrumentality, foreign or
domestic, or any of them, having jurisdiction over Patriot or the Property.
"Ground Lease" shall mean the Parking Lease.
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"Ground Lessor" shall mean the Parking Lessor.
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"Ground Lessee" shall mean, collectively, RACM and ZML - Milwaukee
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Center Parking Garage, L.L.C., the current holder of the 54% undivided interest
in the Ground Lease formerly held by Badger Fourteen.
"Hazardous Materials" shall mean any chemical substance: (i) which is
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or becomes defined as a "hazardous substance," "hazardous waste," "hazardous
material," "pollutant," "contaminant," or "toxic," "explosive," "corrosive,"
"flammable," "infectious," "radioactive," "carcinogenic," or "mutagenic"
material under any law, regulation, rule, order, or other authority of the
federal, state or local governments, or any agency, department, commission,
board, or instrumentality thereof, regarding the protection of human health or
the environment from such chemical substances including, but not limited to, the
following federal laws and their amendments, analogous state and local laws, and
any regulations promulgated thereunder: the Clean Air Act, the Clean Water Act,
the Oil Pollution Control Act, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1986, the Emergency Planning and Community
Right to Know Act, the Solid Waste Disposal Act, the Resource Conservation and
Recovery Act, the Safe Drinking Water Act, the Federal Insecticide, Fungicide
and Rodenticide Act, and the Toxic Substances Control Act, including, without
limitation, asbestos and gasoline and other petroleum products (including crude
oil or any fraction thereof); (ii) without limitation, which contains gasoline,
diesel fuel or other petroleum hydrocarbons; (iii) without limitation, which
contains polychlorinated biphenyls or asbestos or asbestos-containing materials
or urea formaldehyde foam insulation; or (iv) without limitation, radon gas.
"Hotel" shall mean the 221-room hotel and related amenities located on
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the Land.
"Hotel Improvements" shall mean the Hotel and all other buildings,
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improvements, fixtures and other items of real estate located on the Hotel Land
other than the Parking Improvements.
"Hotel Land" shall mean that certain parcel of real estate lying and
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being in Milwaukee County, Wisconsin, as more particularly described on Exhibit
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A attached hereto, together with all easements, rights, privileges, remainders,
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reversions and appurtenances thereunto belonging or in any way appertaining,
including, without limitation those created by the REA, and all of the estate,
right, title, interest, claim or demand whatsoever of Crow therein, in the
streets and ways adjacent thereto and in the beds thereof, either at law or in
equity, in possession or expectancy, now or hereafter acquired.
"Insurance Policies" shall mean all policies of insurance maintained
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by or on behalf of Crow pertaining to the Property, its operation, or any part
thereof.
"Intangible Personal Property" shall mean all intangible personal
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property owned, licensed or possessed by Crow and used in connection with the
ownership, operation, leasing, occupancy or maintenance of the Property, to the
extent same is assignable, including, without limitation, (1) the
Authorizations, (2) utility and development rights and privileges, business
records, plans and specifications pertaining to the Real Property, and the
Personal Property, (3) any unpaid award for taking by condemnation or any damage
to the Land by reason of a change of grade or location of or access to any
street or highway which was not effective prior to the Effective Date, and (4)
Patriot's share of the Tray Ledger determined under Section 8.6 hereof,
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excluding (a) cash reserves for FF&E, real estate and personal property taxes
and
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insurance, except as set forth in Section 6.6, (b) accounts receivable except
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for the above described share of the Tray Ledger, and (c) claims against third
parties in connection with the Property, but only to the extent that such claims
relate to damages suffered by Crow prior to the Closing Date.
"Leased Property" shall mean all leased items of Tangible Personal
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Property.
"Management Agreement" shall mean the Management Agreement by and
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between Crow and Wyndham Hotel Corporation, with respect to the Property.
"Occupancy Agreements" shall mean all leases, concession or occupancy
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agreements in effect with respect to the Real Property under which any tenants
(other than Hotel guests) or concessionaires occupy space upon the Real
Property, which Occupancy Agreements are described on Exhibit F attached hereto
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and made a part hereof.
"Omnibus Purchase and Sale Agreement" shall mean that certain Omnibus
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Purchase and Sale Agreement dated of even date herewith executed by and among
Patriot, Crow and the affiliates of Crow which own the Other Properties.
"Operating Agreements" shall mean all management, service, supply and
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maintenance contracts, if any, in effect with respect to the Property and all
other contracts (other than the Occupancy Agreements and the Space Leases) that
affect the Property or are otherwise related to the construction, ownership,
operation, occupancy or maintenance of the Property, which Operating Agreements
are described on Exhibit G attached hereto and made a part hereof.
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"Other Purchase and Sale Agreements" means those certain Purchase and
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Sale Agreements of even date herewith for the Other Properties entered into by
Patriot and affiliates of Crow.
"Other Properties" means those certain hotels described on Exhibit C
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attached hereto and made a part hereof.
"Owner's Title Policy" shall mean an owner's policy of title insurance
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issued to Patriot by the Title Company, pursuant to which the Title Company
insures Patriot's ownership of fee simple title to the Real Property (including
the indefeasibility/marketability thereof) subject only to Permitted Title
Exceptions. The Owner's Title Policy shall insure Patriot in the amount of the
Purchase Price and shall be reasonably acceptable in form and substance to
Patriot. Patriot may require such deletions of standard exceptions and such
title endorsements as are legally available and customarily required by
institutional investors purchasing property comparable to the Property in the
State where the Property is situated. The description of the Land in the
Owner's Title Policy shall be by courses and distances or by reference to a
legal, subdivided lot and shall be identical to the description shown on the
Survey.
"Parking Lease" shall mean that certain Parking Ramp Ground lease
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dated December 20, 1985, by and among Badger Nineteen and Badger Sixteen as
lessor and RACM as lessee, a memorandum of which was recorded on December 31,
1985, in the office of the Register of Deeds of the County of Milwaukee,
Wisconsin in Reel 1832, Image 1749 as Document No. 5877014, the lessee's
interest in which has been assigned to RACM pursuant to that certain
Reassignment, Assignment and Assumption Agreement (Parking Ramp Lease)
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dated as of March 2, 1989, by and between ▇▇▇▇▇▇▇▇ ▇▇▇▇ Management Company-
Wisconsin, Inc. and RACM, a 54% undivided interest in which was assigned to
Badger Fourteen pursuant to that certain Assignment and Assumption Agreement
dated as of March 2, 1989, between RACM as assignor and Badger Fourteen as
assignee; as modified by (i) that certain Amendment to Parking Ramp Ground Lease
dated March 2, 1989, by and among Badger Nineteen, Badger Sixteen and Crow, as
lessor, and ▇▇▇▇▇▇▇▇ ▇▇▇▇ Management Company-Wisconsin, Inc., as lessee, and
(ii) that certain Second Amendment to Parking Ramp Ground Lease dated December
18, 1996, by and among Badger Nineteen, TRST, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Limited
Partnership, an Illinois limited partnership, and Crow, as lessor, and Badger
Fourteen and RACM, as lessee; and as supplemented by that certain Parking Ramp
Co-Tenancy Agreement dated March 2, 1989, by and between Badger Fourteen and
RACM.
"Parking Improvements" shall mean the improvements which are subject
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to the Parking Lease.
"Parking Lessee" shall mean, collectively, ZML Milwaukee Center
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Parking Garage, L.L.C. (which holds undivided 54% interest) and RACM (which
holds an undivided 46% interest).
"Parking Lessor" shall mean, collectively, Badger Nineteen, Crow, TRST
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Milwaukee, Inc. and ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Limited Partnership, an Illinois limited
partnership.
"Patriot's Objections" shall mean the objections defined as such in
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Section 2.4(d) hereof.
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"Permitted Title Exceptions" shall mean those exceptions to title to
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the Real Property that are satisfactory to Patriot or deemed satisfactory to
Patriot pursuant to Section 2.4(d) hereof.
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"Personal Property" shall mean collectively the Tangible Personal
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Property and the Intangible Personal Property.
"Personal Property Leases" shall mean the leases pursuant to which
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Crow leases the Leased Property, which Personal Property Leases are described on
Exhibit H attached hereto and made a part hereof.
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"Property" shall mean collectively the Real Property and the Personal
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Property.
"Purchase Price" shall mean the "Allocated Purchase Price" for the
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Property as set forth in the Omnibus Purchase and Sale Agreement, subject to the
Closing Adjustments.
"RACM" shall mean the Redevelopment Authority of the City of
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Milwaukee.
"REA" shall mean that certain Reciprocal Easement and Operating
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Agreement for Milwaukee Center dated April 20, 1988, recorded with the Register
of Deeds in Real 2229, Image 241, as Document No. 618695,
"Real Property" shall mean the Hotel Land and the Hotel Improvements
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and all of Crow's right, title and interest in and to the Parking Improvements.
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"Representations and Warranties Certificate" shall mean the
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certificate executed by Crow and delivered to Patriot within seven (7) days of
the Effective Date, certifying as to the accuracy of certain representations and
warranties of Crow provided for in Article III as of the date of delivery.
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"Requisite Consents" shall mean the consents referenced in Section
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3.3 hereof.
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"Reservation System" shall mean any interest of Crow in any
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reservation terminal and reservation system equipment and software related to
the Hotel.
"Space Leases" shall mean Crow's interest in any real property leases
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to which Crow is the lessee, all of which Space Leases are identified on Exhibit
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I attached hereto.
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"Study Period" shall mean the period commencing on the date this
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Agreement has been fully executed and delivered by all parties hereto, and
continuing through the date that is thirty (30) days thereafter. Except as
expressly noted herein to the contrary, time periods herein referred to shall
mean the time periods as in effect, from time to time, at Dallas, Texas.
"Submission Matters" shall mean all items Crow is required to deliver
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to Patriot or make available to Patriot for its review pursuant to Section 2.4
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hereof.
"Survey" shall mean the survey defined as such in and prepared
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pursuant to Section 2.4(d) hereof.
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"Tangible Personal Property" shall mean the items of tangible
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personal property consisting of all furniture, fixtures, equipment, machinery
and other personal property of every kind and nature (including amounts in the
Capital Reserve Account as specified in Section 6.6) located on or used or
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useful in the operation of the Hotel and owned by Crow, including, without
limitation, unopened inventories of food and beverages and the stock of linens,
towels, paper goods, soaps, cleaning supplies, china, glassware, silverware,
tablecloths, napkins, television sets, carpets, drapes, rugs, floor coverings,
mattresses, pillows, bed spreads and miscellaneous guest supplies, engineering
cleaning supplies and the like.
"Title Commitment" shall mean the title commitment and exception
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documents defined as such in Section 2.4(d) hereof.
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"Title Company" shall mean Escrow Agent on behalf of American Title
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Company or other title insurance underwriter selected by Patriot and Crow.
"Tray Ledger" shall mean the final night's room revenue (revenue from
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rooms occupied as of 12:01 a.m. on the Closing Date, exclusive of food,
beverage, telephone and similar charges which shall be retained by Crow),
including any sales taxes, room taxes or other taxes thereon.
"TRST" shall mean TRST Milwaukee, Inc.
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"UCC Reports" shall mean the reports defined as such in Section
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2.4(d) hereof.
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"Utilities" shall mean public sanitary and storm sewers, natural gas,
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telephone, public water facilities, electrical facilities and all other utility
facilities and services necessary or appropriate for the operation and occupancy
of the Property as a hotel.
"Warranties and Guaranties" shall mean all warranties and guaranties
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relating to the Improvements, the Reservation System or the Tangible Personal
Property or any part thereof, if any.
ARTICLE II
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ACQUISITION OF PROPERTY; DEPOSIT; ACCOUNTING
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FOR PURCHASE PRICE; TITLE
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2.1 Sale of Property. In consideration of, and subject to, the terms and
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conditions hereinafter set forth and the terms and conditions set forth in the
Omnibus Purchase and Sale Agreement, Crow shall sell to Patriot the Property on
the terms and conditions provided herein.
2.2 Acquisition Procedures. When the conditions to Closing set forth in
----------------------
Article V have been satisfied or waived, the following shall occur and the
---------
transaction contemplated hereby will be consummated, all in accordance with the
terms set forth in the Omnibus Purchase and Sale Agreement:
(a) Acquisition of Property. Crow shall sell the Property to
-----------------------
Patriot pursuant to the terms hereof and of the Omnibus Purchase and Sale
Agreement.
(b) Delivery of Consideration. In consideration of the sale of the
-------------------------
Property to Patriot, Patriot shall deliver to Crow the Purchase Price, in cash
or other immediately available funds acceptable to Crow or as otherwise may be
agreed to by Crow and Patriot.
(c) Take Title. Patriot shall take title subject to the Permitted
----------
Title Exceptions.
2.3 Deposit. Within three (3) days after the execution hereof by both
-------
Crow and Patriot and as a condition precedent to the effectiveness of this
Agreement, Patriot shall deliver to Crow a wire transfer or check in the sum of
Fifty Dollars ($50.00) payable to the order of Crow representing the independent
consideration for Crow's execution of this Agreement (the "Deposit"). If the
-------
Closing does not occur for any reason, such consideration shall nevertheless be
deemed earned, and shall be retained by Crow.
2.4 Submission Matters and Title Information.
----------------------------------------
(a) Patriot and Patriot's potential lessee or manager shall have
the right, until 5:00 p.m., Dallas, Texas time on the last day of the Study
Period, and thereafter if Patriot does not deliver to Crow written notice prior
to the expiration of the Study Period that Patriot has elected to terminate this
Agreement, to enter upon the Property and to perform, at Patriot's expense,
tests, studies and investigations with respect to the following matters
concerning the Property: (i) condition of title, including ground leases, (ii)
surveys, (iii) compliance with laws, (iv) other conditions affecting the
Property as set forth on Schedule 2.4 attached hereto, and (v) the matters set
------------
forth in any Schedules referenced herein which are not attached to this
Agreement as of the Effective Date. If, in Patriot's reasonable judgment,
Patriot determines,
9
based upon its review of the matters described in the immediately preceding
sentence, or based upon its inability to review any of such matters due to
Crow's failure to provide the Submission Matters or to deliver any Exhibit or
Schedule as required by Section 2.4(b), that any such matter has, had or is
--------------
reasonably likely to have a material adverse effect on the operation, value,
use, marketability, financeability or insurability of the Property, Patriot may
terminate this Agreement by written notice delivered to Crow on or prior to the
expiration of the Study Period (which notice shall specify the reason(s) why
Patriot is terminating this Agreement), at which time this Agreement shall
terminate and Patriot and Crow shall be released from all further liability or
obligation hereunder except those which expressly survive a termination of this
Agreement. Patriot's determination to terminate this Agreement based upon its
inability to review any of such matters due to Crow's failure to provide any
material Submission Matter or to deliver any of the Exhibits or Schedules as
required by Section 2.4(b) shall be conclusively reasonable. If Patriot does
--------------
not timely deliver a termination notice under this Section 2.4(a), then it shall
--------------
have waived its right to terminate this Agreement under this Section 2.4(a).
--------------
(b) Crow shall use reasonable and diligent efforts to deliver the
following to Patriot, to the extent not previously delivered to Patriot, and to
deliver any Exhibit or Schedule not attached to this Agreement as of the
Effective Date, in each case within seven (7) days after execution of this
Agreement:
(1) Copies of all Occupancy Agreements in effect as of the
date of this Agreement.
(2) Copies of the Space Leases in effect as of the date of
this Agreement.
(3) A copy of the Ground Lease and all material notices and
correspondence received from the Ground Lessor and Ground Lessee or sent by
Crow to the Ground Lessor or Ground Lessee during the last two years.
(4) Any existing list of all Tangible Personal Property,
including an indication of whether any Tangible Personal Property is Leased
Property, which list may be the most recent list prepared by Crow's
management agent under the Management Agreement, if any, and the accuracy
of which list prepared by Crow's management agent shall not be represented
or warranted by Crow.
(5) To the extent in Crow's possession or reasonably
available to Crow, copies of all Authorizations including, without
limitation, all certificates of occupancy, liquor licenses, liquor license
applications and permits, authorizations, approvals (including site plans
and other zoning materials and approvals), and licenses issued by
Governmental Authorities having jurisdiction over the Property and copies
of all certificates issued by the local board of fire underwriters (or
other body exercising similar functions) relating to the Property. For the
purpose of this Agreement "reasonably available to Crow" shall mean any
Submission Matters in the actual possession of Crow's management company or
located at the Hotel.
(6) Complete copies of all Operating Agreements.
10
(7) A schedule setting forth the type and amounts of
insurance coverage maintained by Crow with respect to the Property as of
the date of this Agreement and complete copies of all such Insurance
Policies.
(8) Operating statements and financial reports (audited, if
available) for the Property for the previous three (3) calendar years and
the year to date and any auditors reports issued in connection therewith
or, if less, the number of years the Hotel has been in operation.
(9) The operating and capital expenditure budget for the
Property for the current calendar year and, to the extent in Crow's
possession or reasonably available to Crow, for the previous three (3)
calendar years.
(10) A complete list of all Leased Property and complete
copies of all Personal Property Leases.
(11) To the extent in Crow's possession or reasonably
available to Crow, copies of invoices for all ad valorem taxes and special
assessments assessed against the Property for the current calendar year and
the prior three calendar years, either statements for Utilities payable for
the current calendar year and three (3) prior years (if available at the
Hotel or in the Dallas, Texas office of Crow's current manager of the
Hotel) or such other information which Crow may have in its or Crow's
current manager's possession itemizing the payment of utilities for the
Hotel, and any information in Crow's possession or reasonably available to
Crow regarding current or future renditions or assessments on the Property
or notices relative to change in valuation for ad valorem taxes or tax
rates.
(12) To the extent in Crow's possession or reasonably
available to Crow, a complete list of all Warranties and Guaranties in
effect as of the date of this Agreement and complete copies of all such
Warranties and Guaranties.
(13) Copies of all soil tests, structural engineering tests,
masonry tests, percolation tests, water, oil, gas, mineral, radon,
formaldehyde, PCB or other environmental (including asbestos) tests, audits
or reports, market studies and site plans related to the Property in Crow's
possession or reasonably available to Crow.
(14) If in Crow's possession or reasonably available to Crow,
Crow will make available to Patriot at the Property or at the office's of
Crow's current manager in Dallas, Texas, copies of complete sets of all
architectural, mechanical, structural and/or electrical plans and
specifications used in connection with the construction of or alterations
or repairs to the Property.
(15) If in Crow's possession or reasonably available to Crow,
Crow will make available to Patriot at the Property or at the office's of
Crow's current manager in Dallas, Texas, copies of as-built plans and
specifications for the Property.
(16) Parking, structural, mechanical or other engineering
reports or engineering studies related to the Property, if any, in Crow's
possession or reasonably available to Crow.
11
(17) If in Crow's possession or reasonably available to Crow,
copies of any title insurance policies covering the Real Property and any
surveys of all or any portion of the Land and Improvements.
(18) The Representations and Warranties Certificate.
During the Study Period and thereafter until the Closing, Crow shall make
available to Patriot, its agents, auditors, engineers, attorneys, potential
lessees, potential lenders and other designees, for inspection and/or copying,
copies of all Submission Matters and all books, records, tax returns relating to
operations of the Hotel (other than Crow's income tax returns), bank statements,
financial statements, advance reservations and room bookings and function
bookings, rate schedules and any and all other materials or information relating
to the Property which are in, or come into, Crow's possession or control or are
or become otherwise reasonably available to Crow.
(c) Patriot shall give Crow and the general manager of the Hotel
reasonable oral or written notice of all proposed inspections or testing to be
undertaken on the Property. Notwithstanding anything to the contrary contained
in Section 2.4(a), inspections may be made for any reason related to Patriot's
--------------
acquisition of the Property, but Patriot shall only be entitled to terminate
this Agreement pursuant to Section 2.4(a) with respect to the matters referenced
--------------
therein. Crow's prior oral or written consent shall be required (but shall not
be unreasonably withheld or delayed) only as to Patriot's undertaking of
invasive testing at the Property and such invasive testing and inspections shall
be coordinated with the general manager of the Hotel and Crow. Any such
inspection or activity shall (i) not unreasonably interfere with the operation
of the Property, (ii) shall be conducted at such times and in such manner as to
not unreasonably disturb the guests of the Hotel, and (iii) shall be conducted
in accordance with Applicable Laws. Crow shall have the right to designate a
representative to accompany Patriot's employees, agents, and independent
contractors on any such inspections or tests. Patriot shall indemnify and
defend Crow against any loss, damage or claim for personal injury or property
damage arising from the exercise of Patriot's rights under this Section caused
by Patriot or any agents, contractors or employees of Patriot or arising from
any mechanic's lien filed against the Real Property by Patriot's contractors in
connection with such inspections or tests. Patriot, at its own expense, shall
restore any damage to the Property caused by any of the tests or studies made by
or for Patriot. This provision shall survive any termination of this Agreement
and a closing of the transaction contemplated hereby.
(d) Crow shall use reasonable and diligent efforts to deliver to
Patriot within ten (10) days following execution of this Agreement, two copies
to Patriot's attorneys, Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., a Survey of
the Land and the Improvements, prepared by a Surveyor licensed to practice as
such in the State where the Land is located and reasonably acceptable to
Patriot, bearing a date not earlier than thirty (30) days from the date of its
delivery, containing the certificate attached hereto as Exhibit B, and
---------
substantially conforming to the requirements set forth in such certificate.
Crow shall use reasonable and diligent efforts to cause the Title Company to
furnish to Patriot, within seven (7) days following execution of this Agreement,
(i) a title insurance commitment bearing an effective date subsequent to the
date of this Agreement issued by the Title Company covering the Real Property,
binding the Title Company to issue its Owner's Policy of Title Insurance, in
form generally used in major commercial transactions in the state where the
Property is located in favor of Patriot, showing title held currently by Crow in
a good, indefeasible/marketable and insurable condition, together
12
with legible copies of all documents identified in such title insurance
commitment as exceptions to title certified as true and complete by the Title
Company (collectively, the "Title Commitment"), and (ii) reports of searches of
----------------
the Uniform Commercial Code records of both the county and State in which the
Property is located (collectively, the "UCC Reports") with respect to the state
-----------
of title to the Property. Prior to the expiration of the Study Period, Patriot
will notify Crow of any matters shown on the Survey or identified in the Title
Commitment or the UCC Reports that Patriot is unwilling to accept (collectively,
"Patriot's Objections"). Within ten (10) days after receiving Patriot's
--------------------
Objections (the "Cure Period"), Crow shall specify which of Patriot's Objections
-----------
Crow will cure, remove or bond around, if any, by delivering to Patriot written
notice thereof; however, Crow shall, at its sole cost and expense, be obligated
to cure, remove or bond around by Closing, in a manner sufficient to cause the
Title Company to insure over such item, all delinquent taxes and all mortgages,
deeds of trust, security agreements, construction or mechanics' liens, tax liens
or other liens in a fixed sum or capable of computation as a fixed sum. If Crow
does not deliver the Title Commitment or the UCC Reports as aforesaid or if,
before the Cure Period expires and other than those items which Crow is
obligated to cure, remove or bond around, as set forth in the immediately
preceding sentence, Crow does not agree in writing to cure, remove or bond
around all of Patriot's Objections at or prior to Closing, Patriot may either
(a) terminate this Agreement by delivering written notice thereof to Crow within
ten (10) days after the Cure Period expires or (b) purchase the Hotel subject to
such Patriot's Objections, in which case, such Patriot's Objections shall be
Permitted Title Exceptions. Crow shall not, after the date of this Agreement,
subject the Real Property to or permit or suffer to exist any new liens,
attachments, encumbrances, covenants, conditions, restrictions, easements or
other title matters or seek any zoning changes or take any other action which
may affect or modify the status of title without Patriot's prior written consent
(which shall not be unreasonably withheld or delayed) unless same are discharged
at or prior to Closing, and Patriot shall not be required to take title to the
Real Property subject to any matters which may arise subsequent to the effective
date of the Title Commitment, UCC Reports and Survey examined by Patriot if such
matter could reasonably be expected to have a material adverse effect on the
value, use, insurability, marketability, financeability or operation of the
Property, unless Patriot has consented thereto. All title matters revealed by
the Title Commitment, UCC Reports and Survey and not objected to by Patriot as
provided above (other than delinquent taxes and any mortgages, deeds of trust,
security agreements and other liens and charges that are to be paid at Closing)
shall be deemed Permitted Title Exceptions. Patriot and Crow agree that the
Occupancy Agreements previously disclosed to Patriot are Permitted Title
Exceptions.
ARTICLE III
-----------
CROW'S REPRESENTATIONS AND WARRANTIES
-------------------------------------
To induce Patriot to enter into this Agreement and to acquire the Property
in the manner provided herein, Crow hereby makes the following representations
and warranties as of the date the Representations and Warranties Certificate is
delivered with respect to the Property, upon each of which Crow acknowledges and
agrees that Patriot and its permitted assignees and lessee are entitled to rely
and have relied:
3.1 Organization and Power. Crow is a general partnership duly formed and
----------------------
validly existing under the laws of the State of Texas and is qualified to
transact business in the State of Wisconsin and has all requisite powers and all
governmental licenses, authorizations, consents and approvals to carry on its
business as now conducted and to enter into and perform its
13
obligations hereunder, under the Omnibus Purchase and Sale Agreement and under
any document or instrument required to be executed and delivered on behalf of
Crow hereunder or under the Omnibus Purchase and Sale Agreement.
3.2 Authorization and Execution. This Agreement and the Omnibus Purchase
---------------------------
and Sale Agreement have been duly authorized by all necessary action on the part
of Crow, have been duly executed and delivered by Crow, constitute the valid and
binding agreement of Crow and are enforceable in accordance with their terms.
The person(s) executing this Agreement and the Omnibus Purchase and Sale
Agreement on behalf of Crow has (have) the authority to do so.
3.3 Non-Contravention. Subject to obtaining all Requisite Consents, the
-----------------
execution and delivery of, and the performance by Crow of its obligations under,
this Agreement and the Omnibus Purchase and Sale Agreement do not and will not
contravene, or constitute a default under any of Crow's Organizational
Documents, any judgment, injunction, order or decree binding upon Crow or to
which the Property is subject, or, to Crow's knowledge, do not and will not
contravene, or constitute a default under, any provision of applicable law or
regulation, any agreement, or other instrument binding upon Crow or to which the
Property is subject, or result in the creation of any lien or other encumbrance
on any asset of Crow. As used in this Agreement, the term "Requisite Consents"
shall mean any consent to the execution and delivery of, and the performance by
Crow of its obligations under, this Agreement and the Omnibus Purchase and Sale
Agreement, which may be required from (i) the landlord under any Space Lease,
(ii) the lessor of any Tangible Personal Property, (iii) any party to an
Operating Agreement, (iv) any other person whose consent is required with
respect to the assignment of the Intangible Personal Property, (v) any
institutional lender holding a mortgage on the Property, and (vi) to the extent
necessary any other Parking Lessor whose consent is necessary for the assignment
of Crow's interest in the Ground Lease. There are no outstanding agreements
(written or oral) pursuant to which Crow (or, to Crow's knowledge, any
predecessor to or representative of Crow) has agreed to sell or has granted an
option or right of first refusal to purchase the Property or any part thereof
except for those that will be waived or released at or prior to Closing.
3.4 Intentionally Deleted.
---------------------
3.5 No Special Taxes. To Crow's knowledge and except as set forth on
----------------
Schedule 3.5 and in the financial statements delivered to Patriot, there are no
------------
special taxes or assessments relating to the Property or any part thereof or any
planned public improvements that may result in a special tax or assessment
against the Property or any agreement artificially reducing taxes and
assessments for the Property.
3.6 Compliance with Existing Laws. To Crow's knowledge, Crow possesses
-----------------------------
all Authorizations, each of which is valid and in full force and effect, and no
provision, condition or limitation of any of the Authorizations has been
breached or violated in a manner which could reasonably be expected to have a
materially adverse effect on the value, use, insurability or operation of the
Property. Crow has no knowledge of any termination, suspension, modification or
limitation affecting any of the Authorizations. Except as set forth on Schedule
--------
3.6, Crow has no knowledge, nor, to Crow's knowledge, has it received written
---
notice within the past two (2) years, of any existing or threatened violation of
any provision of any Applicable Laws including, but not limited to, those of
environmental agencies or insurance boards of underwriters with respect to the
ownership, operation, use, maintenance or condition of the Property or any part
14
thereof, or requiring any repairs or alterations to the Property other than
those that have been made prior to the date hereof, which existing or threatened
violation could reasonably be expected to have a materially adverse effect on
the value, use, insurability or operation of the Property. However, Crow makes
no representation and warranty regarding the Property's compliance with the
Americans With Disabilities Act or similar Applicable Law, except as provided in
Section 3.21.
------------
3.7 Intentionally Deleted.
---------------------
3.8 Operating Agreements. To Crow's knowledge, there are no management,
--------------------
service, supply or maintenance contracts in effect with respect to the Property
other than the Operating Agreements. Except as set forth on Schedule 3.8, to
------------
Crow's knowledge, Crow has performed in all material respects all of its
obligations under each of the Operating Agreements and there are no defaults
under any of the Operating Agreements and all other parties to the Operating
Agreements have performed all of their obligations thereunder in all material
respects, and are not in default thereunder in any material respect. To Crow's
knowledge, Crow has received no notice of any intention by any of the parties to
any of the Operating Agreements to cancel the same, nor has Crow canceled any of
same.
3.9 Insurance. To Crow's knowledge, all of Crow's Insurance Policies are
---------
valid and in full force and effect and Crow has complied with all material
requirements or recommendations of the insurance carriers of the Insurance
Policies.
3.10 Condemnation Proceedings; Roadways. To Crow's knowledge and except as
----------------------------------
set forth on Schedule 3.10, there are no condemnation or eminent domain
-------------
proceeding pending or threatened against the Property or any part thereof.
Except as set forth on Schedule 3.10, Crow has no knowledge of any change in the
-------------
route or width of any street or road adjacent to or serving the Real Property,
and, to Crow's knowledge, Crow has received no written notice of any proposed
change in the route, grade or width of, or otherwise affecting, any street or
road adjacent to or serving the Real Property.
3.11 Actions or Proceedings. To Crow's knowledge, there is no action, suit
----------------------
or proceeding pending or threatened against or affecting Crow in any court,
before any arbitrator or before or by any Governmental Authority which (a) in
any manner raises any question affecting the validity or enforceability of this
Agreement or the Omnibus Purchase and Sale Agreement, (b) could materially and
adversely affect the business, financial position or results of operations of
Crow or the Property, (c) could materially and adversely affect the ability of
Crow to perform its obligations hereunder or under the Omnibus Purchase and Sale
Agreement, (d) could reasonably be expected to create a lien on the Property,
any part thereof or any interest therein, (e) concerns any past or present
employee of Crow or (f) could otherwise materially and adversely affect the
Property, any part thereof or any interest therein or the use, operation,
condition or occupancy thereof. To Crow's knowledge, Schedule 3.11 attached
-------------
hereto correctly and completely lists all actions, suits or proceedings pending
or threatened against or affecting Crow or otherwise with respect to the
Property.
3.12 Labor and Employment Matters. To Crow's knowledge, Crow is not a
----------------------------
party to any oral or written employment contracts or agreements with respect to
the Property and there are no labor disputes or organizing activities pending or
threatened as to the operation or maintenance of the Property or any part
thereof. To Crow's knowledge and except as set forth
15
on Schedule 3.12, Crow is not a party to any union or other collective
-------------
bargaining agreement with employees employed in connection with the ownership,
operation or maintenance of the Property.
3.13 Financial Information and Submission Matters. To Crow's knowledge,
--------------------------------------------
all of Crow's financial information, including, without limitation, all books
and records and financial statements ("Financial Information") is correct and
---------------------
complete in all material respects and presents accurately the results of the
operations of the Property for the periods indicated. To Crow's knowledge,
since the date of the last financial statement included in Crow's Financial
Information, there has been no material adverse change in the financial
condition or in the operations of the Property.
3.14 Submission Matters. To Crow's knowledge, all Submission Matters
------------------
delivered by Crow to Patriot pursuant to this Agreement are true, correct and
complete in all material respects.
3.15 Bankruptcy. No Act of Bankruptcy has occurred with respect to Crow.
----------
3.16 Hazardous Substances. To Crow's knowledge and except as set forth on
--------------------
Schedule 3.16, (a) Crow has not, nor has Crow received any written notice that
-------------
any previous owner, tenant, occupant or user of the Property has, engaged in or
permitted any operations or activities upon, or any use or occupancy of the
Property or any portion thereof, for the purpose of or in any way involving the
handling, manufacture, treatment, storage, use, generation, release, discharge,
refining, dumping or disposal of any Hazardous Materials on, under, in or about
the Property in violation of any Applicable Laws; (b) Crow has not received any
written notice that any Hazardous Materials have migrated from or to the
Property upon, about, or beneath other properties in violation of any
Environmental Requirements; and (c) except as set forth on Schedule 3.16,
-------------
neither the Property nor its existing or prior uses fail or failed to materially
comply with Environmental Requirements. To Crow's knowledge and except as set
forth on Schedule 3.16, Crow has no knowledge of any permits, licenses or other
-------------
authorizations which are required under any Environmental Requirements with
regard to the current uses of the Property which have not been obtained and
complied with. To Crow's knowledge, and except as set forth on Schedule 3.16,
-------------
neither Crow nor any prior owner, occupant or user of the Property has received
any written notice concerning any alleged violation of Environmental
Requirements in connection with the Property or any liability for Environmental
Damages in connection with the Property for which Crow (or Patriot after
Closing) may be liable. To Crow's knowledge and except as set forth on Schedule
--------
3.16, no Hazardous Materials are constructed, deposited, stored or otherwise
----
located on, under, in or about the Property in violation of any Environmental
Requirements. To Crow's knowledge and except as set forth on Schedule 3.16,
-------------
there exists no writ, injunction, decree, order or judgment outstanding, nor any
lawsuit, claim, proceeding, citation, summons or investigation, pending or
threatened, relating to any alleged violation of Environmental Requirements on
the Property, or relating to any Environmental Damages. To Crow's knowledge and
except as set forth on Schedule 3.16, no underground chemical treatment or
-------------
storage tanks, or gas or oil ▇▇▇▇▇ are located on the Property.
3.17 Intentionally Deleted.
---------------------
3.18 Occupancy Agreements. To Crow's knowledge, there are no leases,
--------------------
concessions or occupancy agreements in effect with respect to the Real Property
other than the Occupancy
16
Agreements. To Crow's knowledge, except as specifically provided in the
Occupancy Agreements, no tenant or concessionaire is entitled to any rebates,
allowances, free rent or rent abatement (other than in connection with a
casualty to the Improvements) for any period after the Closing of the
transaction contemplated hereby. To Crow's knowledge, Crow has received no
notice of any intention by any of the parties to any of the Occupancy Agreements
to cancel the same, nor has Crow canceled any of same. To Crow's knowledge, to
the extent that any of the Occupancy Agreements call for security, such security
remains on deposit with Crow or its agent, and has not been applied towards any
payment due under said Occupancy Agreements. To Crow's knowledge, Crow has not
received any advance rent or advance compensation under any of said Occupancy
Agreements in excess of one month. To Crow's knowledge and except as set forth
on Schedule 3.18, no brokerage commissions or compensation of any kind shall be
-------------
due in connection with the Occupancy Agreements, or in connection with the rents
or revenues to be derived therefrom. To Crow's knowledge and except as set
forth on Schedule 3.18, no party is in default under any Occupancy Agreement and
-------------
the consummation of the transaction contemplated hereby will not constitute a
default under any such Occupancy Agreements. To Crow's knowledge and except as
set forth on Schedule 3.18, Crow has performed all obligations required of it
-------------
under all of the Occupancy Agreements and there remain no unfulfilled
obligations of Crow under the Occupancy Agreements. To Crow's knowledge, no
tenant has given notice to Crow of its intention to institute litigation with
respect to any Occupancy Agreement.
3.19 Leased Property. To Crow's knowledge and subject to obtaining the
---------------
Requisite Consents therefor, all Personal Property Leases are in good standing
and free from default and the consummation of the transaction contemplated
hereby will not constitute a default under any such Personal Property Leases.
3.20 Intentionally Deleted.
---------------------
3.21 Americans With Disabilities Act. To Crow's knowledge and except as
-------------------------------
set forth on Schedule 3.21, Crow has received no written notice from any
-------------
Governmental Authority that the Property is not in compliance with the Americans
With Disabilities Act.
3.22 Structural Condition. Except as disclosed in writing by Crow to
--------------------
Patriot and as contained in any engineering reports concerning the Property
delivered to Patriot, to Crow's knowledge, there is no latent material defect in
the Improvements or structural elements thereof, mechanical systems (including,
without limitation, all heating, ventilating, air conditioning, plumbing,
electrical, utility and sprinkler systems) therein, the utility system servicing
the Property and the roofs.
3.23 Zoning and Platting. Crow has no knowledge of any proceeding and has
-------------------
received no written notice of any threatened action or proceeding which could
result in a modification or termination of the present zoning of the Property.
To Crow's knowledge, the Property is properly platted as a separate lot under
Applicable Laws and constitutes a separate tax lot.
3.24 Access. To Crow's knowledge and except as set forth on Schedule 3.10,
------ -------------
there are no pending, and Crow has received no written notice of any, threatened
governmental proceeding which would limit or result in the termination of the
Property's existing access to and from public streets or roads.
17
3.25 No Commitments. To Crow's knowledge, no commitments have been made to
--------------
any Governmental Authority, utility company, school board, church or other
religious body, or any homeowners' association or any other organization, group
or individual, relating to the Property which would impose an obligation upon
Patriot to make any contribution or dedication of money or land or to construct,
install or maintain any improvements of a public or private nature on or off the
Property.
3.26 Intentionally Deleted.
---------------------
3.27 No Other Property Interests. To Crow's knowledge and except as set
---------------------------
forth on Schedule 3.27, there are no property interests, buildings, structures
-------------
or other improvements or personal property that are owned by Crow which are
necessary for the operation of the Hotel that are not being conveyed pursuant to
this Agreement.
3.28 Intentionally Deleted.
---------------------
3.29 Relationship to Certain Parties. To Crow's knowledge Crow does not
-------------------------------
have a direct or indirect relationship to the Central States, Southeast and
Southwest Areas Pension Fund within the meaning of Section 514(c)(9)(B)(iv) of
the Internal Revenue Code of 1986, as amended. To Crow's knowledge, the list of
partners in Crow delivered by Crow to Patriot is true, correct and complete.
3.30 Space Leases. To Crow's knowledge, Crow has performed in all material
------------
respects all of its obligations under the Space Leases and there are no defaults
under the Space Leases. To Crow's knowledge, all other parties (whether one or
more) to the Space Leases have performed all of their respective obligations
thereunder in all material respects, and are not in default thereunder in any
material respect. To Crow's knowledge, Crow has received no written notice of
any intention by any of the parties to the Space Leases to cancel the same, nor
has Crow canceled the same.
3.31 LIMITATIONS ON REPRESENTATIONS AND WARRANTIES. PATRIOT HEREBY AGREES
---------------------------------------------
AND ACKNOWLEDGES THAT, EXCEPT AS SET FORTH IN THIS ARTICLE 3, OR AS OTHERWISE
---------
EXPRESSLY STATED HEREIN OR IN THE ASSIGNMENT OF GROUND LEASE, DEED OR IN ANY
DOCUMENTS EXECUTED IN CONNECTION HEREWITH, NEITHER CROW NOR ANY AGENT, ATTORNEY,
EMPLOYEE OR REPRESENTATIVE OF CROW HAS MADE ANY REPRESENTATION WHATSOEVER
REGARDING THE SUBJECT MATTER OF THIS SALE, OR ANY PART THEREOF, INCLUDING
(WITHOUT LIMITING THE GENERALITY OF THE FOREGOING) REPRESENTATIONS AS TO THE
PHYSICAL NATURE OR CONDITION OF THE PROPERTY OR THE CAPABILITIES THEREOF, AND
THAT PATRIOT, IN EXECUTING, DELIVERING AND/OR PERFORMING THIS AGREEMENT, DOES
NOT RELY UPON ANY STATEMENT AND/OR INFORMATION TO WHOMEVER MADE OR GIVEN,
DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, BY ANY INDIVIDUAL, FIRM OR
CORPORATION EXCEPT THOSE EXPRESSLY CONTAINED HEREIN OR DELIVERED PURSUANT
THERETO OR IN ANY DOCUMENTS EXECUTED IN CONNECTION HEREWITH. EXCEPT AS
OTHERWISE PROVIDED HEREIN, PATRIOT AGREES TO TAKE THE REAL PROPERTY AND THE
PERSONAL PROPERTY "AS IS," AS OF THE DATE HEREOF, REASONABLE WEAR AND TEAR
EXCEPTED. IN ADDITION, EXCEPT AS SET FORTH HEREIN, CROW MAKES NO
18
REPRESENTATION OR WARRANTIES REGARDING THE COMPLIANCE WITH ANY ENVIRONMENTAL
REQUIREMENTS, INCLUDING THE EXISTENCE IN OR ON THE PROPERTY OF HAZARDOUS
MATERIALS. THE PROVISIONS OF THIS PARAGRAPH SHALL SURVIVE THE CLOSING OR ANY
TERMINATION HEREOF.
Each of the representations and warranties contained in this Article III and its
-----------
various subparagraphs are intended for the benefit of Patriot and may be waived
in whole or in part, by Patriot, but only by an instrument in writing signed by
Patriot. All rights and remedies arising in connection with the untruth or
inaccuracy of any such representations and warranties shall survive the Closing
of the transaction contemplated hereby for the period specified in Section 11.12
-------------
except to the extent that Crow gives Patriot written notice prior to Closing of
the untruth or inaccuracy of any representation or warranty, or Patriot
otherwise obtains actual knowledge prior to Closing of the untruth or inaccuracy
of any representation or warranty, and Patriot nevertheless elects to close this
transaction. Any such written notice from Crow to Patriot shall state in the
first paragraph thereof and in all capitalized letters that "THIS NOTICE IS
GIVEN PURSUANT TO THE PURCHASE AND SALE AGREEMENT MADE AS OF _________, 1997 AND
RELATES TO THE UNTRUTH OR INACCURACY OF CROW'S REPRESENTATIONS OR WARRANTIES."
Patriot shall be deemed to have actual knowledge of the untruth or inaccuracy of
any representation or warranty only if (i) Patriot receives written notice from
Crow satisfying the foregoing requirements, (ii) ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇ has actual
knowledge of any such untruth or inaccuracy or (iii) any such matter is
disclosed in any report delivered to or prepared for Patriot in respect of the
Property. Except to the extent otherwise expressly provided in the immediately
preceding sentence and as provided above, no investigation, audit, inspection,
review or the like conducted by or on behalf of Patriot shall be deemed to
terminate the effect of any such representations, warranties and covenants, it
being understood that Patriot has the right to rely thereon and that each such
representation and warranty constitutes a material inducement to Patriot to
execute this Agreement and to close the transaction contemplated hereby and to
pay the consideration provided herein to Crow.
Whenever the term "to Crow's knowledge" or "known to Crow" is used in this
Agreement or in any representations and warranties given to Patriot at Closing,
such knowledge shall be the actual knowledge of ▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the
"Key Personnel"), made as of the date of the Representations and Warranties
-------------
Certificate, after due inquiry by Crow's management company of the Hotel's
general manager, the controller, director of food and beverage service, chief
engineer and director of sales, as applicable. Crow shall have no duty to
conduct any further inquiry in making any such representations and warranties,
and no knowledge of any other person shall be imputed to the Key Personnel. In
connection with the representations made in Section 3.16, the term "to Crow's
------------
knowledge" or "known to Crow" shall be deemed to include, with respect to
representations and warranties relating to whether the Property complies with
Environmental Requirements, only those facts that an experienced, prudent
operator and/or manager of real estate properties could reasonably be expected
to know have environmental significance and not such facts that would be known
only to an environmental professional to have environmental significance.
19
ARTICLE IV
----------
PATRIOT'S REPRESENTATIONS AND WARRANTIES
----------------------------------------
To induce Crow to enter into this Agreement and to sell the Property to
Patriot, Patriot hereby makes the following representations and warranties, upon
each of which Patriot acknowledges and agrees that Crow is entitled to rely and
has relied:
4.1 Organization and Power. Patriot is duly organized, validly existing
----------------------
and in good standing under the laws of the State of Virginia and has all
corporate and/or partnership powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted and to enter into and perform its obligations under this Agreement,
the Omnibus Purchase and Sale Agreement and any document or instrument required
to be executed and delivered on behalf of Patriot hereunder and under the
Omnibus Purchase and Sale Agreement.
4.2 Authority of Patriot. This Agreement and the Omnibus Purchase and
--------------------
Sale Agreement have been duly authorized by all necessary action on the part of
Patriot, has been duly executed and delivered by Patriot, constitute the valid
and binding agreement of Patriot and are enforceable in accordance with their
terms. The person executing this Agreement on behalf of Patriot has the
authority to do so.
4.3 Non-contravention. The execution and delivery of this Agreement and
-----------------
the Omnibus Purchase and Sale Agreement and the performance by Patriot of its
obligations hereunder and under the Omnibus Purchase and Sale Agreement do not
and will not contravene, or constitute a default under, any provisions of
applicable law or regulation, or any agreement, judgment, injunction, order,
decree or other instrument binding upon Patriot or result in the creation of any
lien or other encumbrance on any asset of Patriot.
4.4 Litigation. There is no action, suit or proceeding, pending or to
----------
Patriot's knowledge threatened, against or affecting Patriot in any court or
before any arbitrator or before any Governmental Authority which (a) in any
manner raises any question affecting the validity or enforceability of this
Agreement or the Omnibus Purchase and Sale Agreement, (b) could materially and
adversely affect the business, financial position or results of operations of
Patriot, and (c) could materially and adversely affect the ability of Patriot to
perform its obligations hereunder or under the Omnibus Purchase and Sale
Agreement.
4.5 Bankruptcy. No Act of Bankruptcy has occurred with respect to
----------
Patriot.
ARTICLE V
---------
CONDITIONS PRECEDENT
--------------------
5.1 As to Patriot's Obligations. Patriot's obligations hereunder are
---------------------------
subject to the satisfaction of the following conditions precedent:
(a) Crow's Deliveries. Crow shall have delivered to or for the
-----------------
benefit of Patriot, on or before the Closing Date, all of the documents and
other information required of Crow pursuant to Sections 8.2 and 8.4 hereof.
--------------------
20
(b) Representations, Warranties and Covenants; Obligations of Crow.
--------------------------------------------------------------
All of Crow's representations and warranties made in this Agreement shall be
true and correct in all material respects as of the date hereof and as of the
date of Closing as if then made and Crow shall have performed in all material
respects all of its covenants and other obligations under this Agreement,
provided, however, Patriot may not terminate this Agreement unless the untrue
representations and warranties or failure to comply with covenants materially
and adversely affects conveyance of the Property to Patriot or the use, value,
operation, marketability, insurability or financeability of the Property.
(c) Title Insurance. Receipt by Patriot of an Owner Policy of Title
---------------
Insurance issued by the Title Company insuring good and marketable/indefeasible
fee simple title to the Real Property subject only to Permitted Title Exceptions
as determined in accordance with Section 2.4 hereof and including, without
-----------
limitation, all applicable deletions of standard exceptions and endorsements
permitted under applicable state law which are usually and customarily required
by institutional investors purchasing property comparable to the Property.
(d) Title to Property. Crow shall be the sole owner of good and
-----------------
indefeasible/marketable fee simple title to the Real Property and good and
marketable fee simple title to the Tangible Personal Property, free and clear of
all liens, encumbrances, restrictions, conditions and agreements except for
Permitted Title Exceptions, Personal Property Leases and those to be released,
bonded, or insured around at Closing.
(e) Condition of Improvements. The Improvements and the Tangible
-------------------------
Personal Property (including but not limited to the mechanical systems,
plumbing, electrical, wiring, appliances, fixtures, heating, air conditioning
and ventilating equipment, elevators, boilers, equipment, roofs, structural
members and furnaces) shall be in the same condition at Closing as they are as
of the date hereof, reasonable wear and tear and damage by casualty and
condemnation excepted. Prior to Closing, Crow shall not have diminished in any
material respect the quality or quantity of maintenance and upkeep services
heretofore provided to the Real Property, and the Tangible Personal Property.
Crow shall not have removed or caused or permitted to be removed any part or
portion of the Real Property or the Tangible Personal Property without Patriot's
prior written consent unless the same is replaced, prior to Closing, with a
similar item of at least equal suitability, quality and value, free and clear of
any lien or security interest or unless such item is no longer useful in the
operation of the Hotel.
(f) Liquor License. There shall be valid liquor licenses, alcoholic
--------------
beverage licenses and other permits and Authorizations necessary to operate the
restaurant, bars (including mini-bars) and lounges presently located in the
Hotel in place and all such liquor licenses, alcoholic beverage licenses and
other permits and Authorizations shall be held in the names of the operators of
such businesses. Crow shall use reasonable and diligent efforts to cause the
holders of such licenses to execute such consents and estoppels as reasonably
required by Patriot's lender.
(g) Dangerous Condition. There shall exist no Dangerous Condition
-------------------
(as hereinafter defined) with respect to the Property. A Dangerous Condition is
the occurrence of any of the following events (or events of similar magnitude)
which could in Patriot's reasonable judgment, materially and adversely affect
the Property:
21
(i) a structural failure causing significant human fatalities such
as the structural failure that occurred at the Hyatt Hotel in Kansas City,
Missouri;
(ii) significant human fatalities caused by disease which is
specifically identified with the Property such as the occurrence of
Legionnaires disease associated with the Bellevue Stratford Hotel in
Philadelphia, Pennsylvania;
(iii) significant human fatalities caused by the failure of
life/safety systems such as the fire which occurred at the MGM Grand Hotel
in Las Vegas, Nevada; or
(iv) the presence of any Hazardous Materials which first occurs
following the expiration of the Study Period if the abatement or other
remediation of such Hazardous Materials is required by Environmental
Requirements, as evidenced by a letter from a qualified engineer (with a
copy of the report of such engineer), and Crow is not willing to remediate
or ▇▇▇▇▇ the condition caused by Hazardous Materials on or before the
Closing Date.
(h) Absence of Material Change. Since the Effective Date, there
--------------------------
shall not have been any material adverse change in the condition, financial or
otherwise, of the Property and Crow shall certify at Closing as to the
foregoing.
Each of the conditions contained in this Section are intended for the benefit of
Patriot and may be waived in whole or in part, by Patriot, but only by an
instrument in writing signed by Patriot.
5.2 As to Crow's Obligations. Crow's obligations hereunder are subject to
------------------------
the satisfaction of the following conditions precedent:
(a) Patriot's Deliveries. Patriot shall have delivered to or for
the benefit of Crow, on or before the Closing Date, all of the documents and
payments required of Patriot pursuant to Sections 2.2(b), 8.3 and 8.4 hereof.
----------------------------
(b) Representations, Warranties and Covenants; Obligations of
---------------------------------------------------------
Patriot. All of Patriot's representations and warranties made in this Agreement
-------
shall be true and correct in all material respects as of the date hereof and as
of the date of Closing as if then made and Patriot shall have performed in all
material respects all of its covenants and other obligations under this
Agreement.
(c) Requisite Consents. Crow shall have received all Requisite
------------------
Consents for the transaction provided herein.
Each of the conditions contained in this Section are intended for the benefit of
Crow and may be waived in whole or in part, by Crow, but only by an instrument
in writing signed by Crow.
5.3 As to Patriot's and Crow's Obligations. Patriot's and Crow's
--------------------------------------
obligations hereunder are subject to the satisfaction of or waiver of all the
terms and conditions set forth in the Omnibus Purchase and Sale Agreement.
The conditions contained in this Section are intended for the benefit of both
parties hereto and may be waived in whole or in part only by an instrument in
writing signed by both parties.
22
ARTICLE VI
----------
COVENANTS OF CROW
-----------------
To induce Patriot to enter into this Agreement and to purchase the
Property, and to pay the consideration therefor, Crow covenants and agrees to
the following:
6.1 Operating Agreements and Occupancy Agreements. Subject to the rights
---------------------------------------------
of the manager under the Management Agreement to take any of the following
actions without Crow's consent, Crow shall not change, modify, extend, renew or
terminate any existing Occupancy Agreements, Operating Agreements, management
agreement, maintenance or repair contract, supply contract, lease in which it is
lessee or other agreements with respect to the Property, nor shall Crow enter
into any agreements modifying the Operating Agreements or Occupancy Agreements,
unless (a) any such agreement or modification will not bind Patriot or the
Property after the date of Closing or (b) Crow has obtained Patriot's prior
written consent to such agreement or modification (which shall not be
unreasonably withheld or delayed). Crow shall not apply all or any part of the
security or damage deposit of a tenant under any Occupancy Agreement to
obligations of such tenant unless such tenant has vacated its portion of the
Property as of the Closing Date. Patriot and Crow hereby agree that Patriot's
lessee shall assume the Operating Agreements from and after the Closing Date.
6.2 Warranties and Guaranties. Crow shall not before or after Closing
-------------------------
release or modify any Warranties and Guaranties, if any, except with the prior
written consent of Patriot, which consent shall not be unreasonably withheld or
delayed.
6.3 Insurance. Crow shall pay all premiums on, and shall not cancel or
---------
voluntarily allow to expire, any of Crow's Insurance Policies unless such policy
is replaced, without any lapse of coverage, by another policy or policies
providing coverage at least as extensive as the policy or policies being
replaced.
6.4 Independent Audit. Promptly following the execution of this
-----------------
Agreement, Crow shall provide and shall cause its management company to provide
to Patriot's representatives and independent accounting firm access to financial
and other information relating to the Property in the possession of or otherwise
available to Crow, its affiliates or Crow's management company which would be
sufficient to enable Patriot's representatives and independent accounting firm
to prepare audited financial statements for 1994, 1995 and 1996 in conformity
with generally accepted accounting principles and to enable them to prepare such
statements, reports or disclosures as Patriot may deem necessary or advisable
and to audit net operating income for the Property. Crow shall also provide
and/or shall cause its management company to provide to Patriot's independent
accounting firm a signed representation letter which would set forth
representations as to certain matters typically requested by an independent
public accountant when rendering an opinion on the financial statements related
to the Property. Crow shall authorize and shall cause its management company to
authorize any attorneys who have represented Crow or its management company in
material litigation pertaining to or affecting the Property to respond, at
Patriot's expense, to inquiries from Patriot's representatives and independent
accounting firm. If and to the extent Crow's financial statements pertaining to
the Property for any periods during the years 1994, 1995 or 1996 have been
audited, promptly after the execution of this Agreement Crow shall provide
Patriot with copies of such audited financial statements and shall cooperate
with Patriot's representatives and independent public accountants
23
to enable them to contact the auditors who prepared such audited financial
statements and to obtain, at Patriot's expense, a reissuance of such audited
financial statements.
6.5 Operation of Property Prior to Closing. Crow covenants and agrees
--------------------------------------
with Patriot that, between the date of this Agreement (or such other date as
specified below) and the date of Closing:
(a) Subject to the restrictions contained herein, Crow shall operate
the Property in the same manner in which Crow operated the Property prior to the
execution of this Agreement, so as to keep the Property in good condition,
reasonable wear and tear and damage by casualty and condemnation excepted, and
so as to maintain the existing caliber of the Hotel operations conducted at the
Property and the reasonable good will of all tenants of the Property and all
employees, guests and other customers of the Hotel.
(b) Crow shall maintain its books of account and records in the usual,
regular and ordinary manner, in accordance with sound accounting principles
applied on a basis consistent with the basis used in keeping its books in prior
years.
(c) Crow shall maintain in full force and effect all Insurance
Policies.
(d) Crow shall use and operate the Property in compliance in all
material respects with Applicable Laws and the requirements of any mortgage,
lease, Occupancy Agreement, Operating Agreement and Insurance Policy affecting
the Property.
(e) Crow shall cause to be paid prior to delinquency all ad valorem,
occupancy and sales taxes due and payable with respect to the Property or the
operation of the Hotel, unless same is being contested in accordance with
Applicable Laws.
(f) Crow shall not diminish the quality or quantity of maintenance and
upkeep services heretofore provided to the Real Property and the Tangible
Personal Property and Crow shall not permit the Tangible Personal Property to be
diminished other than as a result of the ordinary and necessary operation of the
Hotel by Crow.
(g) Crow shall not remove or cause or permit to be removed any part or
portion of the Real Property or the Tangible Personal Property without the
express written consent of Patriot unless the same is replaced, prior to
Closing, with similar items of at least equal suitability, quality and value,
free and clear of any liens or security interests or unless such item is no
longer useful in the operation of the Hotel. Without limiting the foregoing,
Crow shall ensure that the Property contains not less than:
(i) a sufficient amount of kitchen equipment, bar equipment,
refrigeration equipment, paper goods and other such
personal property to efficiently operate each of the
restaurants, bars and lounges, together with enough china,
dishes, glassware, "small goods," napkins, tablecloths,
silverware and supply of paper goods, soaps, cleaning
supplies and other such supplies and materials sufficient
to adequately operate the Hotel restaurants, bars, lounges
and banquet rooms, consistent with historical standards and
practices at the Property;
24
(ii) a sufficient amount of furniture, furnishings, color
television sets, carpets, drapes, rugs, floor coverings,
mattresses, pillows, bedspreads and the like, to furnish
each guest room so that each such guest room is, in fact,
fully furnished; and
(iii) a sufficient amount of towels, washcloths and bed linens as
is reasonably required to adequately operate the Hotel in
compliance with any and all legal requirements and
consistent with historical standards and practices at the
Property.
(h) Crow and Crow's managing agent shall continue to use commercially
reasonable efforts to take guest room reservations and to book functions and
meetings and otherwise to promote the business of the Property in generally the
same manner as Crow did prior to the execution of this Agreement; and all
advance room bookings and reservations and all meetings and function bookings
shall be booked at rates, prices and charges heretofore customarily charged by
Crow for such purposes. Crow acknowledges that the Purchase Price includes the
transfer of Advance Bookings.
(i) Except as provided in Section 6.1, neither Crow nor Crow's
-----------
managing agent shall make any agreements which shall be binding upon Patriot
with respect to the Property and cannot be terminated without penalty upon
thirty (30) days notice without the prior written consent of Patriot, which
consent shall not be unreasonably withheld or delayed.
(j) Crow shall promptly deliver to Patriot upon Patriot's request such
reports showing the revenue and expenses of the Hotel and all departments
thereof, together with such periodic information with respect to room
reservations and other bookings, as Crow customarily keeps or receives
internally for its own use.
(k) Crow shall not enter into any employment agreements which would be
binding on Patriot with respect to the Property.
(l) Crow shall promptly advise Patriot of any litigation, arbitration
or administrative hearing concerning or affecting the Property of which Crow
obtains written notice or of which Crow has knowledge.
(m) Crow shall not voluntarily terminate the Ground Lease or cause or
permit a default by Crow under the Ground Lease (with or without the giving of
any required notice and/or lapse of time).
6.6 Capital Reserve Account.
-----------------------
(a) Crow has reserved for capital expenditures at the Hotel (the
"Capital Reserve Account") the initial amount of $0. Crow shall not be
obligated to fund such initial amount, if any, of the Capital Reserve Account as
of the Effective Date, but shall be required to fund such initial amount, if
any, at or prior to the Closing, and, in connection therewith, Crow may satisfy
its obligations by, and to the extent of, Crow's expenditure, pursuant to the
following provisions of this Section 6.6, of funds required to be included in
-----------
the Capital Reserve Account as such initial amount, if any.
25
(b) In addition to the foregoing, during the period from the Effective
Date to the Closing Date, Crow shall: (i) fund the Capital Reserve Account in
the amount of four percent (4%) on a monthly basis, of gross revenues of the
Property (as defined in the Management Agreement), which monies shall become and
be a part of the Capital Reserve Account, and (ii) expend the Capital Reserve
Account pursuant to a schedule reflecting sound hotel management practices and
in accordance with the 1997 capital expenditures budget adopted pursuant to the
Management Agreement and previously provided to Patriot (the "Capital Expense
Budget"). Except in accordance with the Capital Expense Budget, the amount of
the Capital Reserve Account may not be reduced prior to the Closing Date.
(c) The parties intend that Crow shall bear the cost of implementing
the Capital Expense Budget to the extent the funds in the Capital Reserve
Account are insufficient to pay such costs and, to the extent the funds in the
Capital Reserve Account are more than sufficient to pay such costs, that Crow
receive such excess amounts. Accordingly, at the Closing, the parties will
adjust the Purchase Price based on the actual 1997 capital expenditures up to
the time of the Closing relative to the actual capital reserves accrued up to
the time of the Closing, so that: (a) if the funds in the Capital Reserve
Account plus the additional amounts which will accrue in the Capital Reserve
Account after the Closing Date through December 31, 1997 (calculated for such
additional amounts using pro forma gross revenues for 1997) exceed the amount
budgeted for any unperformed budgeted 1997 capital expenditures as of the
Closing Date, the Purchase Price shall be increased by such excess; or (b) if
the funds in the Capital Reserve Account plus the additional amounts which will
accrue in the Capital Reserve Account after the Closing Date through December
31, 1997 (calculated for such additional amounts using pro forma gross revenues
for 1997) is less than the amount budgeted for any unperformed budgeted 1997
capital expenditures as of the Closing Date, Patriot shall receive a credit
against the Purchase Price in the amount of such deficiency.
(d) After the Closing, Patriot shall continue to fund and make
expenditures from the Capital Reserve Account through the end of 1997 in the
same manner as Crow is required to fund and make expenditures from the Capital
Reserve Account during the period from the Effective Date to the Closing Date.
By January 31, 1998, the parties shall make, if necessary, a cash settlement
such that, whether by an increase in or credit to the Purchase Price as
aforesaid and/or by a cash payment by one party hereunder to the other by
January 31, 1998 (A) Crow shall have received from Patriot an amount equal to
the amount by which the funds in the Capital Reserve Account at the end of 1997
exceed the amount of the unperformed budgeted 1997 capital expenditures at the
end of 1997, or (B) Patriot shall have received from Crow an amount equal to the
amount by which the funds in the Capital Reserve Account at the end of 1997 are
less than the amount of the unperformed budgeted 1997 capital expenditures at
the end of 1997.
(e) The provisions of this Section 6.6 shall survive the Closing.
-----------
6.7 Employees. Payment of costs and expenses associated with accrued but
---------
unpaid salary, earned but unpaid vacation pay, accrued but unearned vacation
pay, pension and welfare benefits, the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA") benefits, employee fringe
-----
benefits, employee termination payments or any other employee benefits due to
Crow's, or Crow's management company's employees shall be the sole
responsibility and obligation of and shall be paid promptly by Crow or Crow's
management company and Patriot shall have no liability whatsoever for any such
payments and benefits
26
concerning the employees of Crow or of Crow's management company. Crow shall
indemnify and defend Patriot and its lessee, management company and affiliates,
from and against any and all claims, causes of action, proceedings, judgments,
damages, penalties and liabilities made, assessed or rendered against Patriot
and/or its lessee, management company and affiliates, and any costs and expenses
(including reasonable attorneys' fees and disbursements) incurred by Patriot
and/or its lessee, management company and affiliates, with respect to claims,
causes of action, judgments, damages, penalties and liabilities asserted by such
employees arising out of the failure of Crow or Crow's management company to
comply with the provisions of this Subsection 6.7. This indemnification shall be
--------------
separate from and in addition to the indemnification given by Crow to Patriot in
Article X below. The provisions of this Section 6.7 shall survive the Closing.
--------- -----------
6.8 Requisite Consents. Crow shall, in good faith, use commercially
------------------
reasonable and diligent efforts to obtain the Requisite Consents at or prior to
Closing.
ARTICLE VII
-----------
INTENTIONALLY DELETED
---------------------
ARTICLE VIII
------------
CLOSING
-------
8.1 Closing. The Closing shall occur in accordance with the Omnibus
-------
Purchase and Sale Agreement. As more particularly described below, at the
Closing the parties hereto will (i) execute all of the documents required to be
delivered in connection with the transactions contemplated hereby (the "Closing
-------
Documents"), (ii) deliver the same to Escrow Agent, and (iii) take all other
---------
action required to be taken in respect of the transactions contemplated hereby.
At the Closing, Escrow Agent shall update the title to the Property, Escrow
Agent shall record the Assignment of Ground Lease and the Deed, release and
date, where appropriate, the Closing Documents in accordance with the joint
instructions of Crow and Patriot. As provided herein, the parties hereto will
agree upon adjustments and prorations to certain items which cannot be exactly
determined at the Closing and will make the appropriate adjustments with respect
thereto. Possession of the Property shall be delivered to Patriot at the
Closing, subject only to Permitted Title Exceptions and the rights of tenants
under the Occupancy Agreements and guests in possession.
8.2 Crow's Deliveries. At the Closing, Crow shall have delivered, if not
-----------------
previously delivered by Crow pursuant to the terms hereof, to Escrow Agent all
of the following instruments, each of which, where applicable, shall have been
duly executed and, where applicable, acknowledged and/or sworn on behalf of Crow
and shall be dated as of the Closing Date:
(a) The Assignment of Ground Lease.
(b) The Deed.
(c) The ▇▇▇▇ of Sale.
27
(d) The Assignment and Assumption Agreement to Patriot and/or its
property manager, lessee or other designee (as Patriot shall specify).
(e) The Assignment of Occupancy Agreements together with an estoppel
letter from each of the tenants and concessionaires of Occupancy Agreements
being assigned thereunder (1) identifying each such Occupancy Agreement and
amendments or addenda thereto, or modifications thereof, by which each such
tenant or concessionaire occupies its premises, (2) certifying that there are no
further amendments or modifications thereof, (3) setting forth the amount of
security deposit, if any, (4) certifying that, so far as is known to such tenant
or concessionaire, Crow is not in default under the terms, conditions and
provisions of such Occupancy Agreements, (5) certifying that the tenant or
concessionaire is not due any rebates, offsets or other monies or things of
value thereunder, and (6) certifying as to the status of the rent and concession
payments as of the date of such Occupancy Agreement; provided, however, that if
any tenant refuses to execute an estoppel certificate, Patriot agrees to accept
in lieu thereof, a certificate of Crow as to such matters, qualified to Crow's
knowledge.
(f) Intentionally Deleted.
(g) Estoppel letters from the Ground Lessor and the Ground Lessee
addressed to Patriot in a form reasonably acceptable to Patriot; however, in
lieu of an estoppel letter from the Ground Lessor, Crow may deliver a
certificate as to the matters required to be addressed in the estoppel letters.
(h) To the extent necessary, consent by the Ground Lessor to the
Assignment of Ground Lease and mortgage of the interests conveyed thereby to
Patriot's lender.
(i) To the extent reasonably available, certificates from the
applicable State taxing authority and local taxing authorities stating that all
occupancy and sales taxes due and payable for the Property have been paid and,
if any such taxes have not been paid, the amount due and payable as of the
Closing Date.
(j) Certificate(s)/Registration of Title for any vehicle owned by Crow
and used in connection with the Property.
(k) Such agreements, affidavits or other documents as may be required
by the Title Company to issue the Owner's Title Policy subject only to the
Permitted Title Exceptions and to eliminate such standard exceptions and to
issue such endorsements thereto which may be eliminated and issued under
applicable State law and which are customarily required by institutional
investors purchasing property comparable to the Property.
(l) Deliver an affidavit in form acceptable to Patriot, stating, under
penalty of perjury, Crow's U.S. taxpayer identification number and that Crow is
not a foreign person within the meaning of Section 1445 of the Internal Revenue
Code. If Crow does not deliver such an affidavit to Patriot at Closing, or if
Patriot has actual knowledge or receives notice that the affidavit is false, or
if Crow is a foreign person within the meaning of Section 1445 of the Internal
Revenue Code, then, in any such event, Patriot shall be entitled to withhold
from Crow an amount equal to ten percent (10%) of the Purchase Price, which
amount Patriot shall report and pay over to the Internal Revenue Service within
ten (10) days after Closing as required by the Internal Revenue Code or
regulations promulgated pursuant thereto.
28
(m) All original Warranties and Guaranties in Crow's possession or
reasonably available to Crow.
(n) Appropriate resolutions of the partners of Crow, together with all
other necessary approvals and consents of Crow and such documentary and other
evidence as may be reasonably required by Escrow Agent, authorizing and
evidencing the authorization of (i) the execution on behalf of Crow of this
Agreement and the authority of the person or persons who are executing the
various documents to be executed and delivered by Crow prior to, at or otherwise
in connection with the Closing, and (ii) the performance by Crow of its
obligations hereunder and under such documents.
(o) A valid, final and unconditional certificate of occupancy for the
Real Property and Improvements, issued by the appropriate Governmental
Authority.
(p) The originals of all Operating Agreements and with respect to the
material Operating Agreements, consent to the assignment thereof acknowledged
and approved by the other parties to such Operating Agreements to the extent
required by such Operating Agreements.
(q) With respect to the material Personal Property Leases, (1) the
written consent of the lessors of such leases to such assignment, if required by
such Personal Property Leases, and (2) executed originals of all such leases in
Crow's possession or reasonably available to Crow.
(r) Intentionally Deleted.
(s) Copies of all existing Insurance Policies if same are assumed by
Patriot.
(t) To the extent in Crow's possession or reasonably available to
Crow, originals of the following items (which shall be deemed delivered by Crow
under this Section 8.2 if delivered to the property manager at the Hotel): (1)
-----------
complete sets of all architectural, mechanical, structural and/or electrical
plans and specifications used in connection with the construction of or
alterations or repairs to the Property; and (2) as-built plans and
specifications for the Property.
(u) To the extent assignable and at no cost to Crow, a written
instrument executed by Crow, conveying and transferring to Patriot all of Crow's
right, title and interest in any telephone numbers and TWX numbers relating to
the Property, and, if Crow maintains a post office box, conveying to Patriot all
of its interest in and to such post office box and the number associated
therewith, so as to assure a continuity in operation and communication.
(v) Duplicate originals of all agreements, leases, concession
agreements and other instruments affecting the Property and the Hotel and/or
restaurant business conducted thereon.
(w) All current real estate and personal property tax bills in Crow's
possession or under its control.
29
(x) If available, by delivery to the property manager at the Hotel, a
complete set of all guest registration cards, guest transcripts, guest
histories, and all other available guest information.
(y) A complete list of all advance room reservations, functions and
the like, in reasonable detail so as to enable Patriot to honor Crow's
commitments in that regard.
(z) A list of Crow's outstanding accounts receivable as of midnight on
the date prior to the Closing, specifying the name of each account and the
amount due Crow (which items shall be deemed delivered by Crow if delivered to
property manager of the Hotel).
(aa) All books, records, operating reports, appraisal reports, files
and other materials in Crow's possession or control which are necessary in
Patriot's discretion to maintain continuity of operation of the Property (which
items shall be deemed delivered by Crow under this Section 8.2 if delivered to
-----------
the property manager at the Hotel).
(ab) A current UCC Report showing no financing statements by Crow as
Debtor covering the Property other than those financing statements to be
released at Closing.
(ac) Executed originals of all Occupancy Agreements and, to the extent
available, Authorizations transferred or assigned to Patriot at Closing as
required hereunder (which items shall be deemed delivered by Crow under this
Section 8.2 is delivered to the property manager at the Hotel).
-----------
(ad) An opinion from Crow's counsel stating that Crow is validly
existing and is in good standing under the laws of the state of Crow's formation
and that Crow has duly authorized, executed and delivered to Patriot this
Agreement and all of the conveyance documents to be delivered by Crow hereunder.
If the Property is not located in the state of Crow's formation, Crow's counsel
may rely on appropriate existence and good standing certificates in opining that
Crow is qualified to transact business and is in good standing in the state
where the Property is located.
(ae) An estoppel letter from each party to any reciprocal easement
agreement, declaration of covenants and restrictions, or similar material
agreement affecting the Property to the effect that, to its knowledge, Crow is
not in default under such agreement and certifying as to such other factual
matters relating to such agreement as Patriot may reasonably require.
(af) A certificate executed by Crow to the effect that (1) the
representations and warranties of Crow contained in this Agreement are
materially true and correct at and as of the Closing Date (or, if not true and
correct, setting forth any exceptions thereto) as though made at and as of the
Closing Date and (2) Crow has in all material respects performed all obligations
required to be performed by it pursuant to the terms of this Agreement at or
prior to the Closing Date.
(ag) Consents, joinders and assignments from such other persons or
entities as may be necessary to effectuate the conveyance of the Property to
Patriot and consummate the transaction contemplated hereby.
30
(ah) Any other document or instrument reasonably requested by Patriot
or required hereby.
8.3 Patriot's Deliveries.
--------------------
(a) A certificate executed by Patriot to the effect that (1) the
representations and warranties of Patriot contained in this Agreement are
materially true and correct at and as of the Closing Date as though made at and
as of the Closing Date and (2) Patriot has in all material respects performed
all obligations required to be performed by it pursuant to the terms of this
Agreement at or prior to the Closing Date.
(b) At the Closing, Patriot shall deliver to Crow a written agreement
in recordable form whereby Patriot assumes the obligations of Crow under the REA
with respect to the Real Property first accruing on and after the Closing Date,
subject to the provisions of Section 13.23 of the REA, and any other document or
instrument reasonably requested by Crow or required hereby.
8.4 Mutual Deliveries. At the Closing, Patriot and Crow shall mutually
-----------------
execute and deliver each to the other:
(a) A final closing statement reflecting the Closing Adjustments
required hereby.
(b) Such other documents, instruments and undertakings as may be
required by the liquor authorities of the State where the Property is located,
or of any county or municipality or governmental entity having jurisdiction with
respect to the transfer or issue of liquor licenses or alcoholic beverage
licenses or permits for the Hotel, to the extent not theretofore executed and
delivered.
(c) Such other and further documents, papers and instruments as may be
reasonably required by the parties hereto or their respective counsel.
8.5 Closing Costs. Except as is explicitly provided in this Agreement,
-------------
each party hereto shall pay its own legal fees and expenses. All filing fees
for the Deed, the Assignment of Ground Lease and the transfer, recording, sales
or other similar taxes and surtaxes due with respect to the transfer of title
shall be paid by the party who customarily pays such expenses in the
jurisdiction where the Property is located. Crow shall pay for the costs
associated with the releases of any deeds of trust, mortgages and other
financing encumbering the Property and for any costs associated with any
corrective instruments. All other costs including, without limitation, the cost
of the Survey, the title searches and all premiums for the issuance of the Title
Policy and all endorsements (other than a zoning endorsement) thereto and
deletions therefrom which are usually and customarily required by institutional
investors purchasing property comparable to the Property shall be borne by the
party who normally pays such costs in the jurisdiction where the Property is
located.
8.6 Revenue and Expense Allocations. All revenues and expenses with
-------------------------------
respect to the Property, and applicable to the period of time before and after
Closing, determined in accordance with sound accounting principles consistently
applied, shall be allocated between Crow and Patriot as provided herein. Crow
shall be entitled to all revenue and shall be
31
responsible for all expenses for the period of time up to but not including the
date of Closing, and Patriot shall be entitled to all revenue and shall be
responsible for all expenses for the period of time from, after and including
the date of Closing (provided that housekeeping costs and the Tray Ledger for
the date of Closing shall be shared equally between Patriot and Crow).
Notwithstanding the foregoing, revenues generated by food and beverage
facilities at the Hotel shall be prorated as of 6:00 a.m. on the Closing Date.
Such adjustments shall be shown on the closing statements (with such supporting
documentation as the parties hereto may require being attached as exhibits to
the closing statements) and shall increase or decrease (as the case may be) the
Purchase Price. Without limiting the generality of the foregoing, the following
items of revenue and expense shall be allocated at Closing:
(a) Current rents.
(b) Real estate and personal property taxes.
(c) Revenue and expenses under the Operating Agreements.
(d) Utility charges (including, but not limited to, charges for water,
sewer and electricity).
(e) Value of fuel stored on the Property at the price paid for such
fuel by Crow, including any taxes.
(f) Municipal or other governmental improvement liens, which shall be
paid by Crow at Closing where the work has been completed prior to the Effective
Date, and which shall be assumed by Patriot at Closing where the work has not
been completed prior to the Effective Date.
(g) Insurance premiums, to the extent the Insurance Policies are
assumed by Patriot.
(h) Permit fees, where transferable.
(i) All other revenues and expenses of the Property, including, but
not limited to, such things as restaurant, bar and meeting room income and
expenses and the like.
(j) Such other items as are usually and customarily prorated between
purchasers and sellers of hotel properties in the area where the Property is
located.
Patriot shall retain and receive a credit against the Purchase Price for the
total of (i) prepaid rents, (ii) prepaid room receipts and deposits, function
receipts and deposits and other reservation receipts and deposits, (iii)
unforfeited security deposits (and, to the extent interest is payable to the
tenant, interest thereon) held by Crow under the Occupancy Agreements, and (iv)
the value of any complimentary rooms (based upon the "corporate" rate for each
room) and any complimentary food or beverages (based upon the advertised rate
for each food and beverage) provided by Crow, other than in the ordinary course
of business, from and after 12:01 a.m. on the Closing Date. At Closing, Crow
shall sell to Patriot in connection with the Hotel, and Patriot shall acquire
from Crow, and the Purchase Price shall be increased by the face value of the
so-called "guest ledger" as mutually approved by Patriot and Crow for the
32
Hotel of guest accounts receivable payable to the Hotel as of the check out time
for the Hotel on the Closing Date (based on guests and customers then using the
Hotel) both (1) in occupancy from the preceding night through check out time the
morning of the Closing Date, and (2) previously in occupancy prior to check out
time on the Closing Date; provided, however, that the term "guest ledger" shall
not include any accounts receivable which have been or are to be paid by any
means other than a credit card. Patriot shall not be obligated to acquire such
non-credit card accounts receivable, and Crow shall retain all rights with
respect thereto (including, without limitation, the right to collect same). For
purposes of this Agreement, transfer or sale at face value shall have the
following meaning for the guest ledger: the total of all credit card accounts
receivable as shown on the records of the Hotel, less actual collection costs
(i.e., fees retained by credit card companies), less Patriot's one-half (1/2)
share of the Tray Ledger.
Crow shall pay or cause to be paid all special assessments for the Property due
and payable in the year in which the Closing occurs. All special assessments
due and payable on or prior to the Closing Date shall be paid by Crow on or
before the Closing Date. All subdivision and platting costs and expenses
heretofore incurred by Crow, including, without limitation, all subdivision
exactions, fees and costs and all dedication of land for parks and other public
uses or payment of fees in lieu thereof, shall be paid by Crow on or prior to
the Closing Date.
Crow shall be required to pay all sales, occupancy and liquor taxes and like
impositions currently through the date of Closing and if reasonably available,
deliver evidence of payment of same to Patriot.
Patriot shall not be obligated to collect any delinquent rents, or revenues
accrued prior to the Closing Date for Crow, but if Patriot collects same, such
amounts shall be promptly remitted to Crow in the form received.
Crow shall either transfer the balance of the Capital Reserve Account to Patriot
or allow Patriot a credit against the Purchase Price for the amount thereof.
If accurate allocations cannot be made at Closing because current bills are not
obtainable (as, for example, in the case of utility bills and/or real estate or
personal property taxes) or appeals are pending, the parties shall allocate such
revenue or expenses at Closing on the best available information, subject to
adjustment upon receipt of the final ▇▇▇▇ or other evidence of the applicable
revenue or expense. The obligation to make the adjustment shall survive the
closing of the transaction contemplated by this Agreement. Any revenue received
or expense incurred by Crow or Patriot with respect to the Property after the
date of Closing shall be promptly allocated in the manner described herein and
the parties shall promptly pay or reimburse any amount due. The proration
provisions of this Agreement shall survive the Closing of the transaction
contemplated hereby for a period of twelve (12) months.
ARTICLE IX
----------
GENERAL PROVISIONS
------------------
9.1 Condemnation. In the event of any actual or threatened taking,
------------
pursuant to the power of eminent domain, of all or any portion of the Real
Property, or any proposed sale in lieu thereof, Crow shall give written notice
thereof to Patriot promptly after Crow learns or receives notice thereof. If
all or a Substantial Portion (as hereinafter defined) of the Real
33
Property is, or is to be, so condemned or sold, Patriot shall have the right to
terminate this Agreement. If Patriot elects not to terminate this Agreement, all
proceeds, awards and other payments arising out of such condemnation or sale
(actual or threatened) shall be paid or assigned, as applicable, to Patriot at
Closing. Crow shall not settle or compromise any such proceeding without
Patriot's written consent. If Patriot elects to terminate this Agreement by
giving Crow written notice thereof prior to the Closing, all rights and
obligations of Crow and Patriot hereunder (except those set forth herein which
expressly survive a termination of this Agreement) shall terminate immediately.
In the event any portion of the Real Property is affected by a condemnation,
sale or eminent domain action and such condemnation, sale or eminent domain
action does not constitute a Substantial Portion of the Real Property, this
Agreement shall remain in full force and effect without a reduction in the
Purchase Price except as provided below. In the event of any such condemnation,
sale or eminent domain action that does not constitute a Substantial Portion of
the Real Property, Patriot shall be entitled to any and all claims that Crow may
have to condemnation awards or any and all causes of action with respect to such
condemnation, sale or eminent domain action (all of which shall be assigned by
Crow to Patriot at Closing), and Crow shall credit to Patriot at Closing, by an
appropriate adjustment to the Purchase Price, an amount equal to all payments
(if any) theretofore received by Crow with respect to such condemnation, sale or
eminent domain action. For purposes of this Section 9.1, a "Substantial
----------- -----------
Portion" shall mean a condemnation of in excess of $1,000,000 in value of the
-------
Real Property. This provision shall survive the Closing of the transaction
contemplated hereby.
9.2 Risk of Loss. The risk of any loss or damage to the Property prior to
------------
the recordation of the Assignment of Ground Lease and/or the Deed shall remain
upon Crow. If any such loss or damage which constitutes Substantial Loss or
Damage occurs prior to Closing, Patriot shall have the right to terminate this
Agreement. If Patriot elects not to terminate this Agreement, all insurance
proceeds and rights to proceeds arising out of such loss or damage shall be paid
or assigned, as applicable, to Patriot at Closing and Patriot shall receive as a
credit against the Purchase Price the amount of any deductibles under the
policies of insurance covering such loss or damage. If Patriot elects to
terminate this Agreement by giving Crow written notice thereof prior to the
Closing, all rights and obligations of Crow and Patriot hereunder (except those
set forth herein which expressly survive a termination of this Agreement) shall
terminate immediately. In the event any of the Property or any of the items
constituting the Personal Property should be damaged or destroyed as a result of
fire or other casualty and such damage does not constitute Substantial Loss or
Damage and such damage is not repaired prior to Closing, the rights and
obligations of Crow and Patriot hereunder with respect to the Property shall not
be affected by such destruction or damage and Patriot shall accept title to the
Property in its destroyed or damaged condition. In such event, at the Closing,
all insurance proceeds and rights to proceeds arising out of such loss or damage
shall be paid or assigned, as applicable, and Patriot shall receive a credit
against the Purchase Price equal to the amount of any deductibles under the
policies of insurance covering such loss or damage. For purposes of this
Section 9.2, "Substantial Loss or Damage" shall mean loss or damage, the
----------- --------------------------
cost for repair of which (as mutually determined by Patriot and Crow at the time
of such loss or damage) exceeds $1,000,000.00. In the event that Patriot and
Crow are unable to agree on the cost of repair of any Substantial Loss or
Damage, then such cost of repair shall be determined by an insurance adjuster
selected by Crow and approved by Patriot, such approval not to be unreasonably
withheld. This provision shall survive the Closing of the transaction
contemplated hereby.
34
9.3 Absence of Broker. There is no real estate broker involved in this
-----------------
transaction. Patriot warrants and represents to Crow that Patriot has not dealt
with any real estate broker in connection with this transaction, nor has Patriot
been introduced to the Property or to Crow by any real estate broker, and
Patriot shall indemnify Crow and save and hold Crow harmless from and against
any claims, suits, demands or liabilities of any kind or nature whatsoever
arising on account of the claim of any person, firm or corporation to a real
estate brokerage commission or a finder's fee as a result of having dealt with
Patriot, or as a result of having introduced Patriot to Crow or to the Property.
In like manner, Crow warrants and represents to Patriot that Crow has not dealt
with any real estate broker in connection with this transaction, nor has Crow
been introduced to Patriot by any real estate broker, and Crow shall indemnify
Patriot and save and hold Patriot harmless from and against any claims, suits,
demands or liabilities of any kind or nature whatsoever arising on account of
the claim of any person, firm or corporation to a real estate brokerage
commission or a finder's fee as a result of having dealt with Crow in connection
with this transaction.
9.4 Bulk Sale. Crow shall indemnify Patriot and save and hold Patriot
---------
harmless from and against any claims, suits, demands, liabilities or obligations
of any kind or nature whatsoever, including all costs of defending same, and
reasonable attorneys' fees paid or incurred in connection therewith, arising out
of or relating to any claim made by any third party or any liability asserted by
any third party that any applicable bulk sales law or like statute has not been
complied with. The provisions of this Section shall survive the Closing of the
transaction contemplated hereby.
9.5 Intentionally Deleted.
---------------------
9.6 Crow's Accounts Receivable. Except as otherwise provided herein, it
--------------------------
is expressly agreed by and between Patriot and Crow that Crow is not hereby
agreeing to sell to Patriot, and Patriot is not hereby agreeing to purchase from
Crow, any of Crow's accounts receivable. All of Crow's accounts receivable
shall be and remain the property of Crow, subsequent to the Closing of the
transaction contemplated hereby. At the Closing, Crow shall prepare a list of
its outstanding accounts receivable as of midnight on the date prior to the
Closing, specifying the name of each account and the amount due to Crow.
Patriot shall hold any funds received by Patriot explicitly designated as
payment of such accounts receivable, in trust, if Patriot actually collects any
such amounts, and shall pay the monies collected in respect thereof to Crow at
the end of each calendar month, accompanied by a statement showing the amount
collected on each such account. Undesignated payments of accounts receivable
from account debtors owing amounts to both Crow and Patriot, which payments are
received by Patriot within sixty (60) days after the Closing Date, shall first
be applied to Crow's accounts receivable which are no more than sixty (60) days
delinquent as of the Closing Date; and any other undesignated payments shall
first be applied to Patriot's accounts receivable and then to Crow's. Other
than the foregoing, Patriot shall have no obligation with respect to any such
account, and Patriot shall not be required to take any legal proceeding or
action to effect collection on behalf of Crow. It is generally the intention of
Patriot and Crow that although all of Crow's accounts receivable shall be and
remain the property of Crow, still, if any such accounts are paid to Patriot,
then Patriot shall collect same and remit to Crow in the manner above provided.
Without first notifying Patriot in writing and giving Patriot a thirty (30) day
period to attempt to enforce collection of any delinquent payment, Crow agrees
that it shall not bring any legal action to enforce collection of such payment
of any accounts receivable against any current tenant of the
35
Property or other third party in a contractual or business relationship with the
Property which existed as of the Closing Date.
ARTICLE X
---------
LIABILITY OF PATRIOT; INDEMNIFICATION BY CROW
---------------------------------------------
10.1 Liability of Patriot. Except for obligations expressly assumed or
--------------------
agreed to be assumed by Patriot hereunder, Patriot is not assuming any
obligations of Crow or any liability for claims arising out of any act, omission
or occurrence which occurs, accrues or arises prior to the Closing Date, and
Crow hereby indemnifies and holds Patriot harmless from and against any and all
claims, costs, penalties, damages, losses, liabilities and expenses (including
reasonable attorneys' fees) that may at any time be incurred by Patriot and its
affiliates as a result of (1) obligations of Crow not expressly assumed or
agreed to be assumed by Patriot hereunder, or (2) acts, omissions or occurrences
which occur, accrue or arise prior to the Closing Date. Patriot hereby
indemnifies and holds Crow harmless from and against any and all claims, costs,
penalties, damages, losses, liabilities and expenses (including reasonable
attorneys' fees) that may at any time be incurred by Crow as a result of acts,
omissions or occurrences relating to the Property arising and accruing from and
after the Closing Date. The provisions of this Section shall survive the
Closing of the transaction contemplated hereby.
10.2 Indemnification by Crow. Crow hereby indemnifies and holds Patriot
-----------------------
harmless from and against any and all claims, costs, penalties, damages, losses,
liabilities and expenses (including reasonable attorneys' fees) that may at any
time be incurred by Patriot, whether before or after Closing, as a result of any
inaccuracy or breach by Crow of any of its representations, warranties,
covenants or obligations set forth herein or in any other document delivered by
Crow pursuant hereto except for any breach or inaccuracy of any representation
or warranty as to which Crow has given Patriot written notice prior to Closing
of the untruth or inaccuracy or of which Patriot otherwise had actual knowledge
prior to the Closing and nevertheless elected to consummate the Closing;
provided, however, the foregoing knowledge limitation on Crow's indemnity shall
not limit Patriot's remedy described in the Omnibus Purchase and Sale Agreement.
The provisions of this Section shall survive the Closing of the transaction
contemplated hereby for the period specified in Section 11.12.
-------------
10.3 Indemnification by Patriot. Patriot hereby indemnifies and holds Crow
--------------------------
harmless from and against any and all claims, costs, penalties, damages, losses,
liabilities and expenses (including reasonable attorneys' fees) that may at any
time be incurred by Crow, whether before or after Closing, as a result of any
inaccuracy or breach by Patriot of any of its representations, warranties,
covenants or obligations set forth herein or in any other document delivered by
Patriot to Crow pursuant hereto except for any breach or inaccuracy of any
representation or warranty as to which Patriot has given Crow written notice
prior to Closing of the untruth or inaccuracy or of which Crow otherwise had
actual knowledge prior to the Closing and nevertheless elected to consummate the
Closing. The provisions of this Section shall survive the Closing of the
transaction contemplated hereby for the period specified in Section 11.12.
-------------
10.4 Default by Crow. If any condition set forth herein for the benefit
---------------
of Patriot cannot or will not be satisfied prior to Closing and such condition
which has not been satisfied is a material breach of a representation, warranty
or covenant, Patriot shall have the right of specific performance as well as the
rights and remedies with respect thereto as set forth in the Omnibus Purchase
and Sale Agreement.
36
10.5 Default by Patriot. If, prior to Closing, Patriot defaults in
------------------
performing any of its obligations under this Agreement (including its obligation
to purchase the Property), Crow shall have the right of specific performance as
well as the rights and remedies with respect thereto as set forth in the Omnibus
Purchase and Sale Agreement.
10.6 Costs and Attorneys' Fees. In the event of any litigation or dispute
-------------------------
between the parties arising out of or in any way connected with this Agreement,
resulting in any litigation, then the prevailing party in such litigation shall
be entitled to recover its costs of prosecuting and/or defending same,
including, without limitation, reasonable attorneys' fees at trial and all
appellate levels. The provisions of this Section shall survive the Closing of
the transaction contemplated hereby.
10.7 Limitation of Liability. Notwithstanding anything herein to the
-----------------------
contrary, except in the case of fraud by either party, the liability of each
party hereto resulting from the breach or default by either party or pursuant to
any indemnity provided for in this Agreement shall be limited to actual damages
incurred by the injured party and except in the case of fraud by either party,
the parties hereto hereby waive their rights to recover from the other party
consequential, punitive, exemplary, and speculative damages. The provisions of
this Section 10.7 shall survive the Closing of the transaction contemplated
------------
hereby.
ARTICLE XI
----------
MISCELLANEOUS PROVISIONS
------------------------
11.1 Completeness; Modification. This Agreement constitutes the entire
--------------------------
agreement between the parties hereto with respect to the transactions
contemplated hereby and supersedes all prior discussions, understandings,
agreements and negotiations between the parties hereto. This Agreement may be
modified only by a written instrument duly executed by the parties hereto.
11.2 Assignments. Patriot shall have the right, without the consent of
-----------
Crow, to assign its rights hereunder to one or more affiliates of Patriot;
however, any such assignment shall not relieve Patriot of its obligations under
this Agreement. Patriot shall not have the right to assign this Agreement to
any other person. If Patriot assigns this Agreement in violation of this
Agreement, then Crow may terminate this Agreement by delivering written notice
to Patriot.
11.3 Successors and Assigns. This Agreement shall bind and inure to the
----------------------
benefit of the parties hereto and their respective successors and permitted
assigns.
11.4 Days. If any action is required to be performed, or if any notice,
----
consent or other communication is given, on a day that is a Saturday or Sunday
or a legal holiday in the jurisdiction in which the action is required to be
performed or in which is located the intended recipient of such notice, consent
or other communication, such performance shall be deemed to be required, and
such notice, consent or other communication shall be deemed to be given, on
the first business day following such Saturday, Sunday or legal holiday. Unless
otherwise specified herein, all references herein to a "day" or "days" shall
refer to calendar days and not business days.
37
11.5 Governing Law. This Agreement and all documents referred to herein
-------------
shall be governed by and construed and interpreted in accordance with the laws
of the State where the Land is located.
11.6 Counterparts. To facilitate execution, this Agreement may be executed
------------
in as many counterparts as may be required. It shall not be necessary that the
signature on behalf of both parties hereto appear on each counterpart hereof.
All counterparts hereof shall collectively constitute a single agreement.
11.7 Severability. If any term, covenant or condition of this Agreement,
------------
or the application thereof to any person or circumstance, shall to any extent be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term, covenant or condition to other persons or circumstances, shall not be
affected thereby, and each term, covenant or condition of this Agreement shall
be valid and enforceable to the fullest extent permitted by law.
11.8 Costs. Regardless of whether Closing occurs hereunder, and except as
-----
otherwise expressly provided herein, each party hereto shall be responsible for
its own costs in connection with this Agreement and the transactions
contemplated hereby, including, without limitation, fees of attorneys, engineers
and accountants.
11.9 Notices. All notices, requests, demands, consents, approvals, waivers
-------
and other communications hereunder shall be in writing and shall be delivered by
hand, transmitted by facsimile transmission, sent prepaid by Federal Express (or
a comparable overnight delivery service) or sent by the United States mail,
certified, postage prepaid, return receipt requested, at the addresses and with
such copies as designated below. Any notice, request, demand or other
communication delivered or sent in the manner aforesaid shall be deemed given or
made (as the case may be) when actually delivered to the intended recipient.
If to Crow: MTD Associates
▇/▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
If to Patriot: Patriot American Hospitality Partnership, L.P.
c/o Patriot American Hospitality, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
38
With a copy to: Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇, P.C. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
If to Escrow Agent: American Title Company
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
or to such other address as the intended recipient may have specified in a
notice to the other party. Any party hereto may change its address or designate
different or other persons or entities to receive copies by notifying the other
party and Escrow Agent in a manner described in this Section.
11.10 Escrow Agent. Escrow Agent referred to in the definition thereof
------------
contained in Section 1.1 hereof has agreed to act as such for the convenience of
-----------
the parties without fee or other charges for such services as Escrow Agent.
Escrow Agent shall not be liable: (a) to any of the parties for any act or
omission to act except for its own willful misconduct; (b) for any legal effect,
insufficiency, or undesirability of any instrument deposited with or delivered
by Escrow Agent or exchanged by the parties hereunder, whether or not Escrow
Agent prepared such instrument; (c) for any loss or impairment of funds that
have been deposited in escrow while those funds are in the course of collection,
or while those funds are on deposit in a financial institution, if such loss or
impairment results from the failure, insolvency or suspension of a financial
institution; (d) for the expiration of any time limit or other consequence of
delay, unless a properly executed written instruction, accepted by Escrow Agent,
has instructed Escrow Agent to comply with said time limit; or (e) for the
default, error, action or omission of either party to the escrow. Escrow Agent,
in its capacity as escrow agent, shall be entitled to rely on any document or
paper received by it, believed by such Escrow Agent, in good faith, to be bona
fide and genuine. In the event of any dispute as to the disposition of the
Deposit, the Deposit or any other monies held in escrow, or of any documents
held in escrow, Escrow Agent may, if such Escrow Agent so elects, interplead the
matter by filing an interpleader action in a court of general jurisdiction in
the county or circuit where the Real Property is located (to the jurisdiction of
which both parties do hereby consent), and pay into the registry of the court
the Deposit, or deposit any such documents with respect to which there is a
dispute in the Registry of such court, whereupon such Escrow Agent shall be
relieved and released from any further liability as Escrow Agent hereunder.
Escrow Agent shall not be liable for Escrow Agent's compliance with any legal
process, subpoena, writ, order, judgment and decree of any court, whether issued
with or without jurisdiction, and whether or not subsequently vacated, modified,
set aside or reversed.
11.11 Incorporation by Reference. All of the exhibits attached hereto are
--------------------------
by this reference incorporated herein and made a part hereof.
11.12 Survival. Except as otherwise provided herein, all of the
--------
representations, warranties, covenants and agreements of Crow and Patriot made
in, or pursuant to, this Agreement shall survive Closing for a period of twelve
(12) months and shall not merge into the Assignment of Ground Lease, the Deed or
any other document or instrument executed and delivered in connection herewith.
39
11.13 Further Assurances. Crow and Patriot each covenant and agree to
------------------
sign, execute and deliver, or cause to be signed, executed and delivered, and to
do or make, or cause to be done or made, upon the written request of the other
party, any and all agreements, instruments, papers, deeds, acts or things,
supplemental, confirmatory or otherwise, as may be reasonably required by either
party hereto for the purpose of or in connection with consummating the
transactions described herein.
11.14 No Partnership. This Agreement does not and shall not be construed
--------------
to create a partnership, joint venture or any other relationship between the
parties hereto except the relationship of Crow and Patriot specifically
established hereby.
11.15 Time of Essence. Time is of the essence with respect to every
---------------
provision hereof.
11.16 Signatory Exculpation. The signatory(ies) for Patriot and Crow
---------------------
is/are executing this Agreement in his/their capacity as representative of
Patriot or Crow, as the case may be, and not individually and, therefore, shall
have no personal or individual liability of any kind in connection with this
Agreement and the transactions contemplated by it.
11.17 Rules of Construction. The following rules shall apply to the
---------------------
construction and interpretation of this Agreement:
(a) Singular words shall connote the plural number as well as the
singular and vice versa, and the masculine shall include the feminine and the
neuter.
(b) Unless otherwise set forth herein to the contrary, all
references herein to particular articles, sections, subsections, clauses or
exhibits are references to articles, sections, subsections, clauses or exhibits
of this Agreement.
(c) The table of contents and headings contained herein are solely
for convenience of reference and shall not constitute a part of this Agreement
nor shall they affect its meaning, construction or effect.
(d) Each party hereto and its counsel have reviewed and revised (or
requested revisions of) this Agreement and have participated in the preparation
of this Agreement, and therefore any usual rules of construction requiring that
ambiguities are to be resolved against a particular party shall not be
applicable in the construction and interpretation of this Agreement or any
exhibits hereto.
11.18 Omnibus Purchase and Sale Agreement. The terms and conditions set
-----------------------------------
forth in that certain Omnibus Purchase and Sale Agreement are hereby
incorporated by reference in this Agreement in their entirety and, if the terms
of the Omnibus Purchase and Sale Agreement are inconsistent with the terms
hereof, the terms of the Omnibus Purchase and Sale Agreement shall govern.
IN WITNESS WHEREOF, Crow and Patriot have caused this Agreement to be
executed in their names by their respective duly authorized representatives.
40
[SIGNATURE PAGES TO FOLLOW]
41
SELLER:
MTD ASSOCIATES, a Texas general partnership
By MTD Partners, a Texas general partnership, its
general partner
By TCF Hotels L.P., a Texas limited partnership,
its general partner
By Mill Spring Holdings, Inc., its general
partner
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, its general partner
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, its general partner
BADGER XIV LIMITED PARTNERSHIP,a Texas limited
partnership by: Crow Family 1991 Limited Partnership,
By: Mill Spring Holdings, Inc.
By: /s/ M. ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------------
Name: M. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
Title: Vice President & Secretary
---------------------------------------------
PURCHASER:
PATRIOT AMERICAN HOSPITALITY PARTNERSHIP, L.P.,
a Virginia limited partnership
By PAH GP, Inc., its general partner
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: Senior Vice President
----------------------------------------