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Exhibit 10.1
PURCHASE AND SALE AGREEMENT
by and among
CANDLEWOOD HOTEL COMPANY, INC. AND CERTAIN OF ITS AFFILIATES,
as Sellers,
and
HOSPITALITY PROPERTIES TRUST,
as Purchaser
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November 19, 1997
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TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS.......................................................................1
1.1. "Agreement".....................................................................1
1.2. "Agreement to Lease"............................................................1
1.3. "Allocable Purchase Price"......................................................1
1.4. "Assets"........................................................................2
1.5. "Business Day"..................................................................2
1.6. "Candlewood"....................................................................2
1.7. "Candlewood Parties"............................................................2
1.8. "Closing".......................................................................2
1.9. "Closing Date"..................................................................2
1.10. "Contracts"....................................................................2
1.11. "Defective Property"...........................................................2
1.12. "Documents"....................................................................2
1.13. "FF&E".........................................................................2
1.14."Guaranty"......................................................................2
1.15. "Guaranty Retained Funds"......................................................2
1.16. "Hotel"........................................................................2
1.17. "Improvements".................................................................2
1.18. "Intangible Property"..........................................................3
1.19. "Lease"........................................................................3
1.20. "Opening Date".................................................................3
1.21. "Permitted Encumbrances".......................................................3
1.22. "Plans and Specifications".....................................................3
1.23. "Properties"...................................................................3
1.24. "Purchase Price"...............................................................3
1.25. "Purchaser"....................................................................3
1.26. "Real Property"................................................................3
1.27. "Retained Funds"...............................................................3
1.28. "Review Period"................................................................4
1.29. "Sellers"......................................................................4
1.30. "Substantial Completion".......................................................4
1.31. "Surveys"......................................................................4
1.32. "Tenant".......................................................................4
1.33. "Tenant Leases"................................................................4
1.34. "Title Commitments"............................................................4
1.35. "Title Company"................................................................4
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PAGE
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SECTION 2. PURCHASE AND SALE; DILIGENCE......................................................4
2.1. Purchase and Sale...............................................................4
2.2. Diligence Inspections...........................................................4
2.3. Defective Properties............................................................5
2.4. Title Matters...................................................................6
2.5. Survey Matters..................................................................6
SECTION 3. PURCHASE AND SALE.................................................................7
3.1. Closing.........................................................................7
3.2. Purchase Price..................................................................7
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE.....................................8
4.1. Closing Documents...............................................................8
4.2. Condition of Properties.........................................................9
4.3. Title Policies and Surveys......................................................9
4.4. Opinions of Counsel.............................................................9
SECTION 5. CONDITIONS TO CANDLEWOOD PARTIES' OBLIGATION TO CLOSE............................10
5.1. Purchase Price.................................................................10
5.2. Closing Documents..............................................................10
5.3. Opinion of Counsel.............................................................10
SECTION 6. REPRESENTATIONS AND WARRANTIES OF CANDLEWOOD PARTIES.............................10
6.1. Status and Authority of the Candlewood Parties.................................10
6.2. Action of the Candlewood Parties...............................................11
6.3. No Violations of Agreements....................................................11
6.4. Litigation.....................................................................11
6.5. Existing Leases, Agreements, Etc...............................................11
6.6. Disclosure.....................................................................11
6.7. Utilities, Etc.................................................................11
6.8. Compliance With Law............................................................11
6.9. Taxes..........................................................................12
6.10. Not A Foreign Person..........................................................12
6.11. Hazardous Substances..........................................................12
6.12. Insurance.....................................................................12
6.13. Ownership of Sellers..........................................................12
6.14. Substantial Completion........................................................12
6.15. Condition of Properties.......................................................12
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PAGE
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SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER......................................13
7.1. Status and Authority of the Purchaser..........................................13
7.2. Action of the Purchaser........................................................14
7.3. No Violations of Agreements....................................................14
7.4. Litigation.....................................................................14
SECTION 8. COVENANTS OF THE CANDLEWOOD PARTIES..............................................14
8.1. Compliance with Laws, Etc......................................................14
8.2. Approval of Agreements.........................................................14
8.3. Notice of Material Changes or Untrue Representations...........................15
8.4. Substantial Completion.........................................................15
8.5. Financial Information..........................................................15
SECTION 9. APPORTIONMENTS...................................................................15
9.1. Real Property Apportionments...................................................15
9.2. Closing Costs..................................................................16
SECTION 10. DEFAULT.........................................................................16
10.1. Default by the Candlewood Parties.............................................16
10.2. Default by the Purchaser......................................................16
SECTION 11. MISCELLANEOUS...................................................................16
11.1. Agreement to Indemnify........................................................16
11.2. Brokerage Commissions.........................................................17
11.3. Publicity.....................................................................17
11.4. Notices.......................................................................18
11.5. Waivers, Etc..................................................................19
11.6. Assignment; Successors and Assigns............................................19
11.7. Severability..................................................................20
11.8. Counterparts, Etc.............................................................20
11.9. Governing Law.................................................................20
11.10. Performance on Business Days.................................................20
11.11. Attorneys' Fees..............................................................20
11.12. Section and Other Headings...................................................21
11.13. Nonliability of Trustees.....................................................21
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made as of the 19th day of November,
1997, by and among (i) CANDLEWOOD HOTEL COMPANY, INC. ("Candlewood"), a Delaware
corporation, (ii) the fifteen entities listed as "sellers" on the signature
pages of this Agreement (each, individually, a "Seller" and collectively, the
"Sellers") and HOSPITALITY PROPERTIES TRUST, a Maryland real estate investment
trust ("Purchaser").
WITNESSETH:
WHEREAS, the Sellers are the owners of all the Properties (all
capitalized terms used and not otherwise defined herein having the meanings
ascribed to such terms in Section 1); and
WHEREAS, the Purchaser desires to purchase the Properties, as more fully
set forth below; and
WHEREAS, the Sellers are willing to sell all of the Properties to the
Purchaser, subject to and upon the terms and conditions hereinafter set forth;
and
WHEREAS, Candlewood owns, directly or indirectly, all of the outstanding
capital stock of the Sellers and the transactions contemplated by this Agreement
are of direct and material benefit to Candlewood;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, the Candlewood Parties and
the Purchaser hereby agree as follows:
SECTION 1. DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings set
forth below or in the Section of this Agreement referred to below:
1.1."AGREEMENT" shall mean this Purchase and Sale Agreement, together
with Schedules A through G attached hereto, as it and they may be amended from
time to time as herein provided.
1.2."AGREEMENT TO LEASE" shall mean that certain Agreement to Lease,
dated as of the date hereof, by and between the Purchaser and Candlewood, as it
may be amended, restated, supplemented or otherwise modified from time to time.
1.3."ALLOCABLE PURCHASE PRICE" shall mean, with respect to each
Property, the amount set forth in Schedule A opposite the name of such Property,
it being understood and agreed that the aggregate amount of the Allocable
Purchase Prices of the Properties shall be One Hundred Million Dollars
($100,000,000).
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1.4."ASSETS" shall mean, with respect to any Hotel, collectively, all of
the Real Property, the FF&E, the Contracts, the Documents, the Improvements, the
Intangible Property and the Tenant Leases owned by any of the Sellers in
connection with or relating to such Hotel.
1.5."BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
any other day on which banking institutions in The Commonwealth of Massachusetts
or the State of New York are authorized by law or executive action to close.
1.6."CANDLEWOOD" shall have the meaning given such term in the first
paragraph of this Agreement.
1.7."CANDLEWOOD PARTIES" shall mean, collectively, Candlewood and the
Sellers.
1.8."CLOSING" shall have the meaning given such term in Section 3.1.
1.9."CLOSING DATE" shall have the meaning given such term in Section
3.1.
1.10."CONTRACTS" shall mean, with respect to any Property, all hotel
licensing agreements and other service contracts, equipment leases, booking
agreements and other arrangements or agreements to which any of the Sellers is a
party affecting the ownership, repair, maintenance, management, leasing or
operation of such Property, to the extent the Sellers' interest therein is
assignable or transferable.
1.11."DEFECTIVE PROPERTY" shall have the meaning given such term in
Section 2.3(a).
1.12."DOCUMENTS" shall mean, with respect to any Property, all books,
records and files relating to the leasing, maintenance, management or operation
of such Property.
1.13."FF&E" shall mean, with respect to any Property, all appliances,
machinery, devices, fixtures, appurtenances, equipment, furniture, furnishings
and articles of tangible personal property of every kind and nature whatsoever
(other than motor vehicles) owned by any of the Sellers and located in or at, or
used in connection with the ownership, operation or maintenance of such
Property.
1.14."GUARANTY" shall mean the guaranty to be executed pursuant to the
Agreement to Lease.
1.15."GUARANTY RETAINED FUNDS" shall mean an amount equal to Five
Million Dollars ($5,000,000).
1.16."HOTEL" shall mean each hotel located at the properties identified
on Schedule A, the legal descriptions of which are set forth on Schedules B-1
through B-15.
1.17."IMPROVEMENTS" shall mean, with respect to any Property, all
buildings, fixtures, walls, fences, landscaping and other structures and
improvements situated on, affixed or appurtenant to the Real Property with
respect to such Property.
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1.18."INTANGIBLE PROPERTY" shall mean, with respect to any Property, all
transferable or assignable permits, certificates of occupancy, operating
permits, sign permits, development rights and approvals, certificates, licenses,
warranties and guarantees, the Contracts, telephone exchange numbers identified
with such Property held by any of the Sellers and all other transferable
intangible property, miscellaneous rights, benefits and privileges of any kind
or character with respect to such Property held by any of the Sellers.
1.19."LEASE" shall mean the lease to be entered into between the
Purchaser or its subsidiary, as landlord, and the Tenant, as tenant, with
respect to the Properties pursuant to the Agreement to Lease, as amended,
modified or supplemented from time to time.
1.20."OPENING DATE" shall mean, with respect to any Property, the date
as of which all Improvements located at such Property, including, without
limitation, all guest rooms and/or suites, shall be open for business to the
public as a Candlewood hotel, in accordance with applicable brand standards.
1.21."PERMITTED ENCUMBRANCES" shall mean, with respect to any Property,
(a) liens for taxes, assessments and governmental charges with respect to such
Property not yet due and payable or due and payable but not yet delinquent; (b)
applicable zoning regulations and ordinances provided the same do not prohibit
or impair in any material respect use of such Property as an extended stay hotel
as currently operated and constructed; (c) such other nonmonetary encumbrances
as do not, in the Purchaser's reasonable opinion, impair marketability and do
not materially interfere with the use of such Property as a fully functioning
Candlewood hotel; (d) UCC Financing Statements which would be permitted pursuant
to the terms of Section 21.9 of the Lease; and (e) such other nonmonetary
encumbrances with respect to such Property which are not objected to by the
Purchaser in accordance with Sections 2.4 and 2.5.
1.22."PLANS AND SPECIFICATIONS" shall mean, with respect to each
Property, the plans and specifications identified on Schedule G with respect to
such Property.
1.23."PROPERTIES" shall mean, collectively, all of the Assets relating
to the properties identified on Schedule A, the legal descriptions of which are
set forth in Schedules B-1,B-15.
1.24."PURCHASE PRICE" shall mean the sum of the Allocable Purchase
Prices, but in no event more than One Hundred Million Dollars ($100,000,000).
1.25."PURCHASER" shall have the meaning given such term in the first
paragraph of this Agreement.
1.26."REAL PROPERTY" shall mean, with respect to any Property, the real
property described in the applicable Schedule B-1 through B-15, together with
all easements, rights of way, privileges, licenses and appurtenances which the
Sellers may own with respect thereto.
1.27."RETAINED FUNDS" shall mean, with respect to each Property, an
amount equal to ten percent (10%) of the Allocable Purchase Price of such
Property.
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1.28."REVIEW PERIOD" shall mean the period commencing on the date of
this Agreement and expiring on the first to occur of the date thirty (30) days
after the date of this Agreement and the Closing Date.
1.29."SELLERS" shall have the meaning given such term in the first
paragraph of this Agreement.
1.30."SUBSTANTIAL COMPLETION" shall mean, with respect to any Property,
physical completion of the Improvements on such Property, including, without
limitation, physical completion of a hotel of the brand and consisting of the
number of rooms set forth on Schedule A, consistent with the Plans and
Specifications therefor (other than so-called "punch-list" items as do not
individually or in the aggregate impair use of such Property for its intended
use), free of all liens and encumbrances (other than Permitted Encumbrances)
such that the Opening Date shall have occurred and the Improvements may be used
for their intended use.
1.31."SURVEYS" shall have the meaning given such term in Section 2.5.
1.32."TENANT" shall have the meaning given such term in the Agreement to
Lease.
1.33."TENANT LEASES" shall mean, with respect to any Property, all
leases, rental agreements or other agreements (other than agreements for letting
of rooms or other facilities to hotel guests) (including all amendments or
modifications thereto) which entitle any person to have rights with respect to
the use or occupancy of any portion of such Property.
1.34."TITLE COMMITMENTS" shall have the meaning given such term in
Section 2.4.
1.35."TITLE COMPANY" shall mean ▇▇▇▇▇▇▇ Title Company, or such other
title insurance company as shall have been selected by the Purchaser and
approved by the Sellers, which approval shall not be unreasonably withheld,
delayed or conditioned.
SECTION 2. PURCHASE AND SALE; DILIGENCE.
2.1.PURCHASE AND SALE. In consideration of the mutual covenants herein
contained, the Purchaser hereby agrees to purchase from the Sellers and
Candlewood hereby agrees to cause the Sellers to sell and the Sellers hereby
agree to sell to the Purchaser, all of the Sellers' right, title and interest in
and to the Properties for the Purchase Price, subject to and in accordance with
the terms and conditions of this Agreement.
2.2.DILIGENCE INSPECTIONS. For the Review Period and, thereafter, until
Closing, the Sellers shall permit the Purchaser and its representatives to
inspect the Properties and the Improvements (including, without limitation, all
roofs, electric, mechanical and structural elements, and HVAC systems therein),
to perform due diligence, soil analysis and environmental investigations, to
examine the books of account and records of the Sellers with respect to the
Properties, including, without limitation, all leases and agreements affecting
the Properties, and make copies thereof, at such reasonable times as the
Purchaser or its representatives may request by notice to the Sellers (which
notice may be oral). To the extent that, in connection with such
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investigations, the Purchaser, its agents, representatives or contractors,
damages or disturbs any of the Real Property, the Improvements or FF&E located
thereon, the Purchaser shall, at its expense, return the same to substantially
the same condition which existed immediately prior to such damage or
disturbance. Neither the Purchaser nor any of its agents, representatives or
contractors shall have any right whatsoever to alter the condition of any
Property, or portion thereof, without the prior written consent of the Sellers,
which consent shall not be unreasonably withheld, delayed or conditioned. The
Purchaser shall indemnify, defend and hold harmless the Sellers from and against
any and all expense, loss or damage which the Sellers may incur as a result of
any act or omission of the Purchaser or its representatives, agents or
contractors in connection with such examinations and inspections, other than to
the extent that any expense, loss or damage arises from any negligence or
misconduct of the Sellers. The provisions of this Section 2.2 shall survive the
termination of this Agreement and the Closing.
2.3.DEFECTIVE PROPERTIES. (a) In the event that (i) the Purchaser
reasonably determines that a Property has structural, environmental or other
structural defects or conditions such that (x) expenditures equal to or greater
than three percent (3%) of the Allocable Purchase Price of such Property are
required in order to bring such Property into a reasonably satisfactory
condition in accordance with prevailing standards, as the case may be, for like
hotels, or (y), with respect to Properties as to which the Opening Date has
already occurred, the calculation with respect to such Property of net operating
income varies by three percent (3%) or more of that set forth in the financial
data provided by the Candlewood Parties to the Purchaser prior to the date
hereof (any such Property being hereinafter referred to as a "Defective
Property"), and (ii) the Purchaser gives written notice thereof to the
Candlewood Parties no later than the expiration of the Review Period (time being
of the essence with respect to the giving of such notice), identifying the
Defective Property or Defective Properties and the specific defects with respect
thereto, the Candlewood Parties shall, subject to paragraph (c) below, be
required to permit the Purchaser to acquire all of the Properties other than
such Defective Property or Defective Properties.
(b) If, prior to the applicable Closing, (i) any Property suffers
a casualty or condemnation which would cause such Property or Properties to
become a Defective Property, (ii) such Property is not, prior to the Closing,
restored to a condition substantially the same as the condition thereof
immediately prior to such casualty or condemnation, and (iii) the Purchaser
provides written notice of same to the Candlewood Parties no later than the
applicable Closing Date, time being of the essence, the Candlewood Parties
shall, subject to paragraph (c) below, be required to permit the Purchaser to
acquire all of the Properties other than such Defective Property or Properties.
Promptly upon learning of the same, the Candlewood Parties covenant and agree to
provide the Purchaser with prompt written notice of any casualty or condemnation
affecting any Property.
(c) If the Purchaser timely identifies any Defective Property and
the Purchaser and the Candlewood Parties shall, acting reasonably and in good
faith be unable or unwilling to agree that (x) the Candlewood Parties shall, at
their sole cost, remedy the applicable defect prior to the applicable Closing
(in which event the Candlewood Parties shall have the right to adjourn the
applicable Closing Date for up to ninety (90) days for such purpose), (y) the
Purchaser shall, notwithstanding such defect, acquire the Defective Property
subject to a reduction in the
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Allocable Purchase Price of the Defective Property sufficient to compensate the
Purchaser for such defect (in which event the applicable Seller shall retain all
available insurance or condemnation proceeds) or (z) on the substitution of
another property owned by the Candlewood Parties for such Defective Property,
this Agreement shall, at the Purchaser's option, terminate with respect to such
Defective Property and the Purchase Price shall be reduced by the Allocable
Purchase Price of such Defective Property.
2.4.TITLE MATTERS. Promptly upon execution of this Agreement, the
Candlewood Parties shall order from the Title Company and direct the Title
Company promptly to deliver to the Purchaser a preliminary title commitment, for
an ALTA extended owner's policy of title insurance with respect to each of the
Properties, together with complete and legible copies of all instruments and
documents referred to as exceptions to title (collectively, the "Title
Commitments").
Within ten (10) Business Days after receipt of the Title Commitments,
the Purchaser shall give the Candlewood Parties notice of any title exceptions
(other than Permitted Encumbrances) which adversely affect any Property in any
material respect and as to which the Purchaser reasonably objects. If, for any
reason, the Candlewood Parties are unable or unwilling to take such actions as
may be required to cause such exceptions to be removed from the Title
Commitments, the Candlewood Parties shall give the Purchaser notice thereof; it
being understood and agreed that the failure of the Candlewood Parties to give
such notice within ten (10) Business Days after the Purchaser's notice of
objection shall be deemed an election by the Candlewood Parties not to remedy
such matters. If the Candlewood Parties shall be unable or unwilling to remove
any title defects to which the Purchaser has reasonably objected, the Purchaser
may elect (i) to terminate this Agreement with respect to the affected Property,
in which event, the Purchase Price shall be reduced by the Allocable Purchase
Price of the affected Properties and this Agreement shall be of no further force
and effect with respect to the affected Properties or (ii) to consummate the
transactions contemplated hereby, notwithstanding such title defect, without any
abatement or reduction in the Purchase Price on account thereof. The Purchaser
shall make any such election by written notice to the Candlewood Parties given
on or prior to the fifth Business Day after the Candlewood Parties' notice of
their unwillingness or inability to cure such defect. Failure of the Purchaser
to give such notice shall be deemed an election by the Purchaser to proceed in
accordance with clause (ii) above and such exception shall be deemed a Permitted
Encumbrance.
2.5.SURVEY MATTERS. Upon execution of this Agreement, the Candlewood
Parties shall arrange for the preparation of an ALTA survey with respect to each
of the Properties (the "Surveys") by a licensed surveyor in the jurisdiction in
which each such Property is located, which (i) contains an accurate legal
description of the applicable Property, (ii) shows the exact location, dimension
and description (including applicable recording information) of all utilities,
easements, encroachments and other physical matters affecting such Property, the
number of striped parking spaces located thereon and all applicable building
set-back lines, (iii) states whether the applicable Property is located within a
100-year flood plain and (iv) includes a certification in the form set forth in
Schedule C, or such other form as may be acceptable to the Purchaser, addressed
to the Purchaser, the Title Company and any other persons requested by the
Purchaser or designated by the Candlewood Parties.
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Within ten (10) Business Days after receipt of the Surveys, the
Purchaser shall give the Candlewood Parties notice of any matters shown thereon
(other than Permitted Encumbrances) which adversely affect any such Property in
any material respect and as to which the Purchaser reasonably objects. If, for
any reason, the Candlewood Parties are unwilling or unable to take such actions
as may be required to remedy the objectionable matters, the Candlewood Parties
shall give the Purchaser prompt notice thereof; it being understood and agreed
that the failure of the Candlewood Parties to give such notice within ten (10)
Business Days after the Purchaser's notice of objection shall be deemed an
election by the Candlewood Parties not to remedy such matters. If the Candlewood
Parties shall be unwilling or unable to remove any survey defect to which the
Purchaser has reasonably objected, the Purchaser may elect (i) to terminate this
Agreement with respect to the affected Property, in which event, the Purchase
Price shall be reduced by the Allocable Purchase Price of the affected
Properties and this Agreement shall terminate and be of no further force or
effect with respect to the affected Properties or (ii) to consummate the
transactions contemplated hereby, notwithstanding such defect, without any
abatement or reduction in the Purchase Price on account thereof. The Purchaser
shall make any such election by written notice to the Candlewood Parties given
on or prior to the fifth Business Day after the Candlewood Parties' notice of
their inability to cure such defect and time shall be of the essence with
respect to the giving of such notice. Failure of the Purchaser to give such
notice shall be deemed an election by the Purchaser to proceed in accordance
with clause (ii) above and such matter shall be deemed a Permitted Encumbrance.
SECTION 3. PURCHASE AND SALE.
3.1.CLOSING. The purchase and sale of the Properties shall be
consummated at one or more closings (each, a "Closing") to be held at the
offices of ▇▇▇▇▇▇▇▇ & Worcester LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, or at such other location as the Sellers and the Purchaser may
agree, at 10:00 a.m. local time, the Closing with respect to any Property to
occur on a date (each, a "Closing Date") designated in writing by the Sellers,
which date shall not be less than ten (10) Business Days nor more than thirty
(30) Business Days after notice from the Sellers to the Purchaser that
Substantial Completion and the Opening Date have occurred with respect to such
Property (and which notice shall identify the proposed Closing Date) or, if
later, the date as of which all conditions precedent to the Closing herein set
forth with respect to the applicable Property have either been satisfied or
waived by the party in whose favor such conditions run. In the event that
Closings with respect to all of the Properties shall not have occurred on or
before March 31, 1998, provided that no action for specific performance shall
have been commenced by the Purchaser to enforce this Agreement, any party shall,
provided such party shall not be in default hereunder, have the right, by the
giving of written notice, to terminate this Agreement with respect to all of the
Properties as to which a Closing has not yet occurred as of the date of
termination.
3.2.PURCHASE PRICE. The Allocable Purchase Prices shall be payable as
follows:
(a) At each Closing, the Allocable Purchase Price of each
Property being purchased, less the amount of the Retained Funds with respect
thereto and, in the case of the first closing only, less the amount of the
Guaranty Retained Funds, shall be payable by wire transfer of
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immediately available funds on the applicable Closing Date to an account or
accounts to be designated by the Sellers prior to such Closing;
(b) Except as otherwise provided in the Lease, the Retained Funds
with respect to each Property shall be payable by wire transfer of immediately
available funds upon the expiration or sooner termination of the Lease, in
accordance with the terms of the Lease, to an account or accounts to be
designated by the Sellers prior to such date; and
(c) Except as otherwise provided in the Guaranty, the Guaranty
Retained Funds shall be payable by wire transfer of immediately available funds
in accordance with the terms of the Guaranty, to an account or accounts to be
designed by Candlewood prior to such date.
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE.
The obligation of the Purchaser to acquire each of the Properties on the
applicable Closing Date shall be subject to the satisfaction of the following
conditions precedent on and as of such Closing Date:
4.1.CLOSING DOCUMENTS. The applicable Candlewood Parties shall have
delivered to the Purchaser with respect to the applicable Property:
(a) A good and sufficient warranty deed with covenants against
grantor's acts, or its local equivalent, in proper statutory form for recording,
duly executed and acknowledged by the Sellers, conveying good and marketable
title to the applicable Fee Properties, free from all liens and encumbrances
other than the Permitted Encumbrances;
(b) A ▇▇▇▇ of sale and assignment agreement, in form and
substance reasonably satisfactory to the Sellers and the Purchaser, duly
executed and acknowledged by the Sellers, with respect to all of the Sellers'
right, title and interest in, to and under the FF&E, the Contracts, the
Documents, the Intangible Property and the Tenant Leases with respect to the
Properties and the Sellers' rights under all builder's warranties with respect
to the applicable Property;
(c) A copy of the final duly issued certificate of occupancy for
each of the applicable Properties;
(d) A Sellers' closing certificate in the form attached hereto as
Schedule D;
(e) An architect's certificate in the form attached hereto as
Schedule E;
(f) An engineer's certificate in the form attached hereto as
Schedule F;
(g) A duly executed copy of the Lease, or applicable amendment
thereto, all of the Incidental Documents (as such term is defined in the Lease)
and all other documents and sums required to be delivered by the Candlewood
Parties and/or the Tenant pursuant to the Agreement to Lease;
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(h) Certified copies of all charter documents, applicable
corporate resolutions and certificates of incumbency with respect to the
applicable Candlewood Parties and the Tenant; and
(i) Such other conveyance documents, certificates, deeds,
affidavits and other instruments as the Purchaser or the Title Company may
reasonably require to effectuate the transactions contemplated by this
Agreement.
4.2.CONDITION OF PROPERTIES.
(a) No material default or event which with the giving of notice
and/or lapse of time could constitute a material default shall have occurred and
be continuing under any material agreement benefiting or affecting the
applicable Properties in any respect;
(b) No action shall be pending or threatened for the condemnation
or taking by power of eminent domain of all or any material portion of the
applicable Properties which would render any Property a Defective Property;
(c) All material licenses, permits and other authorizations
necessary for the current use, occupancy and operation of the applicable
Properties shall be in full force and effect;
(d) The Purchaser shall have received an engineer's report, in
form and substance reasonably satisfactory to the Purchaser, confirming that
Substantial Completion has occurred; and
(e) No Default or Event of Default (as defined therein) shall
have occurred and be continuing under the Lease.
4.3.TITLE POLICIES AND SURVEYS. (a) The Title Company shall be prepared,
subject only to payment of the applicable premium and endorsement fees and
delivery of all conveyance documents in recordable form, to issue title
insurance policies to the Purchaser with respect to the applicable Properties,
in form and substance reasonably satisfactory to the Purchaser in accordance
with Section 2.4, together with such affirmative coverages as the Purchaser may
reasonably require and shall have been determined by the Title Company as
available prior to the expiration of the Review Period.
(b) The Purchaser shall have received an as-built survey with
respect to the applicable Properties, such survey to be consistent with the
requirements of Section 2.5.
4.4.OPINIONS OF COUNSEL. (a) The Purchaser shall have received a written
opinion from counsel to the Candlewood Parties, which counsel shall be
reasonably acceptable to the Purchaser, in form and substance reasonably
satisfactory to the Purchaser, regarding the organization and authority of the
Candlewood Parties and the Tenant, the enforceability of this Agreement, the
Lease or amendment thereto, as the case may be, and the Incidental Documents (as
defined in the Lease) and such other matters with respect to the transactions
contemplated by this Agreement as the Purchaser may reasonably require.
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(b) The Purchaser shall have received a zoning diligence
memorandum from local counsel to the Purchaser, in form and substance reasonably
satisfactory to the Purchaser, regarding the compliance of the Properties with
respect to zoning, licensing and such other matters as the Purchaser may
reasonably require.
SECTION 5. CONDITIONS TO CANDLEWOOD PARTIES' OBLIGATION TO CLOSE.
The obligation of the Candlewood Parties to convey the Properties on the
applicable Closing Date to the Purchaser is subject to the satisfaction of the
following conditions precedent on and as of such Closing Date:
5.1.PURCHASE PRICE. The Purchaser shall deliver to the Candlewood
Parties the Allocable Purchase Prices of the applicable Properties as provided
in Section 3.2.
5.2.CLOSING DOCUMENTS. The Purchaser shall have delivered to the
Sellers:
(a) Duly executed and acknowledged counterparts of the documents
described in Section 4.1, where applicable; and
(b) Certified copies of all charter documents, applicable
resolutions and certificates of incumbency with respect to the Purchaser.
5.3.OPINION OF COUNSEL. The Candlewood Parties shall have received a
written opinion from ▇▇▇▇▇▇▇▇ & Worcester LLP, counsel to the Purchaser, in form
and substance reasonably satisfactory to the Candlewood Parties, regarding the
organization and authority of the Purchaser and such other matters with respect
to the transactions contemplated by this Agreement as the Candlewood Parties may
reasonably require.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF CANDLEWOOD PARTIES.
To induce the Purchaser to enter into this Agreement, each of
Candlewood, with respect to all Properties, and, each Seller, with respect to
its Property, represent and warrant to the Purchaser as follows:
6.1.STATUS AND AUTHORITY OF THE CANDLEWOOD PARTIES. It is a corporation
or limited liability company duly organized, validly existing and in good
standing under the laws of its state of incorporation or formation, and has all
requisite power and authority under the laws of such state and its respective
charter documents to enter into and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. It has duly qualified to
transact business in each jurisdiction in which the nature of the business
conducted by it requires such qualification, except where failure to do so could
not reasonably be expected to have a material adverse effect.
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6.2.ACTION OF THE CANDLEWOOD PARTIES. It has taken all necessary action
to authorize the execution, delivery and performance of this Agreement, and upon
the execution and delivery of any document to be delivered by it on or prior to
the Closing Date, such document shall constitute its valid and binding
obligation and agreement, enforceable against such Candlewood Party in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors.
▇.▇.▇▇ VIOLATIONS OF AGREEMENTS. Neither the execution, delivery or
performance of this Agreement, nor compliance with the terms and provisions
hereof, will result in any breach of the terms, conditions or provisions of, or
conflict with or constitute a default under, or result in the creation of any
lien, charge or encumbrance upon its Property pursuant to the terms of any
indenture, mortgage, deed of trust, note, evidence of indebtedness or any other
agreement or instrument by which it is bound.
6.4.LITIGATION. It has received no written notice of and, to its
knowledge, no action or proceeding is pending or threatened and no investigation
looking toward such an action or proceeding has begun, which (a) questions the
validity of this Agreement or any action taken or to be taken pursuant hereto,
(b) will result in any material adverse change in the business, operation,
affairs or condition of its Property, (c) will result in or subject its Property
to a material liability, or (d) involves condemnation or eminent domain
proceedings against any material part of its Property.
6.5.EXISTING LEASES, AGREEMENTS, ETC. Other than any agreements provided
to the Purchaser not less than ten (10) days prior to the expiration of the
Review Period, there are no other material agreements affecting its Property
which will be binding on the Purchaser subsequent to the Closing Date which the
Purchaser cannot terminate on thirty (30) days notice without payment of premium
or penalty.
6.6.DISCLOSURE. To its knowledge, there is no fact or condition which
materially and adversely affects the business or condition of its Property which
has not been set forth in this Agreement or in the other documents, certificates
or statements furnished to the Purchaser in connection with the transactions
contemplated hereby.
6.7.UTILITIES, ETC. To its knowledge, all utilities and services
necessary for the use and operation of its Property (including, without
limitation, road access, gas, water, electricity and telephone) are available
thereto and are of sufficient capacity to meet adequately all needs and
requirements necessary for the current use and operation of its Property. To its
knowledge, no fact, condition or proceeding exists which would result in the
termination or material impairment of the furnishing of such utilities to its
Property.
6.8.COMPLIANCE WITH LAW. To its knowledge, except as disclosed to the
Purchaser in writing not less than ten (10) days' prior to the expiration of the
Review Period, including in any engineering report, (a) its Property and the
current use and operation thereof do not violate any material federal, state,
municipal and other governmental statutes, ordinances, by-laws, rules,
regulations or any other legal requirements, including, without limitation,
those relating to
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construction, occupancy, zoning, adequacy of parking, environmental protection,
occupational health and safety and fire safety applicable thereto; and (b) at
the time of the applicable Closing there will be in effect all material
licenses, permits and other authorizations necessary for the current use,
occupancy and operation thereof. Except as disclosed to the Purchaser in writing
not less than ten (10) days' prior to the expiration of the Review Period, none
of the Candlewood Parties has received written notice of any threatened request,
application, proceeding, plan, study or effort which would materially adversely
affect the present use or zoning of its Property or which would modify or
realign any adjacent street or highway in a material and adverse way.
6.9.TAXES. To its knowledge, other than the amounts disclosed by tax
bills, no taxes or special assessments of any kind (special, bond or otherwise)
are or have been levied with respect to its Property, or any portion thereof,
which are outstanding or unpaid, other than amounts not yet due and payable or,
if due and payable, not yet delinquent.
6.10.NOT A FOREIGN PERSON. It is not a "foreign person" within the
meaning of Section 1445 of the United States Internal Revenue Code of 1986, as
amended, and the treasury regulations promulgated thereunder.
6.11.HAZARDOUS SUBSTANCES. Except as disclosed to the Purchaser or as
described in any environmental report delivered to the Purchaser prior to the
expiration of the Review Period, to its knowledge, neither it nor any tenant or
other occupant or user of any of its Property, or any portion thereof, has
stored or disposed of (or engaged in the business of storing or disposing of) or
has released or caused the release of any hazardous waste, contaminants, oil,
radioactive or other material on its Property, or any portion thereof, the
removal of which is required or the maintenance of which is prohibited or
penalized by any applicable Federal, state or local statutes, laws, ordinances,
rules or regulations, and, to each of the Candlewood Party's knowledge, except
as disclosed to the Purchaser or as described in any environmental report
delivered to the Purchaser prior to the expiration of the Review Period, its
Property is free from any such hazardous waste, contaminants, oil, radioactive
and other materials, except any such materials maintained in accordance with
applicable law.
▇.▇▇.▇▇▇▇▇▇▇▇▇. It has not received written notice from any insurance
carrier of defects or inadequacies in its Property which, if uncorrected, would
result in a termination of insurance coverage or a material increase in the
premiums charged therefor.
6.13.OWNERSHIP OF SELLERS. Candlewood is the sole owner, directly or
indirectly, of all of the issued and outstanding beneficial interests in the
Sellers and the transactions contemplated by this Agreement are of direct
material benefit to Candlewood.
6.14.SUBSTANTIAL COMPLETION. As of the date hereof, Candlewood
reasonably anticipates that Substantial Completion of all of the Properties will
occur on or before March 31, 1998.
6.15.CONDITION OF PROPERTIES. To its knowledge, its Property is, or on
the applicable Closing Date will be, in good working order and repair,
mechanically and structurally sound, free from material defects in materials and
workmanship.
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The representations and warranties made in this Agreement by the
Candlewood Parties are made as of the date hereof and shall be deemed remade by
the Candlewood Parties as of the applicable Closing Date for the Property or
Properties then being conveyed by the Sellers, with the same force and effect as
if made on, and as of, such date; provided, however, that, the Candlewood
Parties shall have the right, from time to time prior to the applicable Closing
Date, with respect to any Property as to which a Closing has not yet occurred,
to modify the representations and warranties by notice to the Purchaser and, in
such event, the Purchaser shall have the rights provided in Section 2.3. All
representations and warranties made in this Agreement by the Candlewood Parties
shall survive the applicable Closing for a period of one year thereafter.
Except as otherwise expressly provided in this Agreement or any
documents to be delivered to the Purchaser at the Closing, the Candlewood
Parties disclaim the making of any representations or warranties, express or
implied, regarding the Properties or matters affecting the Properties, whether
made by the Candlewood Parties, on the Candlewood Parties' behalf or otherwise,
including, without limitation, the physical condition of the Properties, title
to or the boundaries of the Real Property, pest control matters, soil
conditions, the presence, existence or absence of hazardous wastes, toxic
substances or other environmental matters, compliance with building, health,
safety, land use and zoning laws, regulations and orders, structural and other
engineering characteristics, traffic patterns, market data, economic conditions
or projections, and any other information pertaining to the Properties or the
market and physical environments in which they are located. The Purchaser
acknowledges (i) that the Purchaser has entered into this Agreement with the
intention of making and relying upon its own investigation or that of third
parties with respect to the physical, environmental, economic and legal
condition of each Property and (ii) that the Purchaser is not relying upon any
statements, representations or warranties of any kind, other than those
specifically set forth in this Agreement or in any document to be delivered to
the Purchaser at any Closing, made by the Candlewood Parties or anyone acting on
the Candlewood Parties' behalf. The Purchaser further acknowledges that it has
not received from or on behalf of the Candlewood Parties any accounting, tax,
legal, architectural, engineering, property management or other advice with
respect to this transaction and is relying solely upon the advice of third party
accounting, tax, legal, architectural, engineering, property management and
other advisors. Subject to the provisions of this Agreement, the Purchaser shall
purchase the Properties in their "as is" condition on each Closing Date.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
To induce the Candlewood Parties to enter in this Agreement, the
Purchaser represents and warrants to the Candlewood Parties as follows:
7.1.STATUS AND AUTHORITY OF THE PURCHASER. The Purchaser is a Maryland
real estate investment trust duly organized, validly existing and in trust good
standing under the laws of the State of Maryland, and has all requisite power
and authority under the laws of such state and under its charter documents to
enter into and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby. The Purchaser has duly qualified and is in
good standing as a trust or unincorporated business association in each
jurisdiction in which the
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nature of the business conducted by it requires such qualification, except where
the failure to do so could not reasonably be expected to have a material adverse
effect.
7.2.ACTION OF THE PURCHASER. The Purchaser has taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
and upon the execution and delivery of any document to be delivered by the
Purchaser on or prior to the Closing Date such document shall constitute the
valid and binding obligation and agreement of the Purchaser, enforceable against
the Purchaser in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting the rights and remedies of creditors.
▇.▇.▇▇ VIOLATIONS OF AGREEMENTS. Neither the execution, delivery or
performance of this Agreement by the Purchaser, nor compliance with the terms
and provisions hereof, will result in any breach of the terms, conditions or
provisions of, or conflict with or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any property or assets of the
Purchaser pursuant to the terms of any indenture, mortgage, deed of trust, note,
evidence of indebtedness or any other agreement or instrument by which the
Purchaser is bound.
7.4.LITIGATION. No investigation, action or proceeding is pending and,
to the Purchaser's knowledge, no action or proceeding is threatened and no
investigation looking toward such an action or proceeding has begun, which
questions the validity of this Agreement or any action taken or to be taken
pursuant hereto.
The representations and warranties made in this Agreement by the
Purchaser shall be continuing and shall be deemed remade by the Purchaser as of
the applicable Closing Date with the same force and effect as if made on, and as
of, such date. The Purchaser's liability with respect to all representations and
warranties made in this Agreement by the Purchaser shall survive the applicable
Closing for a period of one (1) year thereafter.
SECTION 8. COVENANTS OF THE CANDLEWOOD PARTIES.
Candlewood, with respect to all Properties, and each Seller, with
respect to its Property, hereby covenant with the Purchaser between the date of
this Agreement and the Closing Date as follows:
8.1.COMPLIANCE WITH LAWS, ETC. To comply or to cause compliance with in
all material respects with (i) all applicable laws, regulations and other
requirements from time to time of every governmental body having jurisdiction of
its Property or the use or occupancy of the Improvements located on the Real
Property and (ii) all terms, covenants and conditions of all instruments of
record and other agreements affecting its Property.
8.2.APPROVAL OF AGREEMENTS. Except as otherwise authorized by this
Agreement or in the ordinary course of business, not to enter into, modify,
amend or terminate any other agreement with respect to its Property which would
encumber or be binding upon its Property from and after the applicable Closing
Date without in each instance obtaining the prior written
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consent of the Purchaser, which consent shall not be unreasonably withheld,
delayed or conditioned.
8.3.NOTICE OF MATERIAL CHANGES OR UNTRUE REPRESENTATIONS. Upon learning
of any material change in any condition with respect to its Property or of any
event or circumstance which makes any representation or warranty of the
Candlewood Parties to the Purchaser under this Agreement untrue or misleading in
any material respect, promptly to notify the Purchaser thereof (the Purchaser
agreeing, on learning of any such fact or condition, promptly to notify the
Candlewood Parties thereof).
8.4.SUBSTANTIAL COMPLETION. From the date of this Agreement to the
Closing Date for any Property, to use reasonable efforts to cause Substantial
Completion of such Property to occur as soon as reasonably practicable after the
date hereof, subject to any events of force majeure.
▇.▇.▇▇▇▇▇▇▇▇▇ INFORMATION. To provide to the Purchaser, promptly upon
request at the Candlewood Parties' sole cost and expense, such audited and
unaudited financial and other information and certifications of the Candlewood
Parties with respect to the Candlewood Parties and the Properties as the
Purchaser may from time to time reasonably request in order to comply with any
applicable securities laws and/or any rules, regulations or requirements of the
Securities and Exchange Commission and, if required or requested, to permit the
Purchaser to incorporate by reference any information included in filings made
by Candlewood with the Securities and Exchange Commission. Notwithstanding the
foregoing, the Candlewood Parties shall not be required to provide, pursuant to
this Agreement, audited financial information with respect to individual
Properties, unless the Purchaser shall pay for the cost thereof.
SECTION 9. APPORTIONMENTS.
9.1.REAL PROPERTY APPORTIONMENTS. Representatives of the Purchaser and
the Candlewood Parties shall perform any and all of the adjustments and
apportionments which are appropriate and usual for a transaction of this nature
and taking into account the simultaneous execution of the Lease. The adjustments
hereunder shall be calculated or paid in an amount based upon a fair and
reasonable estimated accounting performed and agreed to by representatives of
the Candlewood Parties and the Purchaser at or prior to the Closing. Subsequent
final adjustments and payments shall be made in cash or other immediately
available funds as soon as practicable after the Closing Date and in any event
within ninety (90) days after such Closing Date, based upon an agreed accounting
performed by representatives of the Candlewood Parties and the Purchaser. In the
event the parties have not agreed with respect to the adjustments required to be
made pursuant to this Section 9.1 within such ninety-day period, upon
application by either party, Ernst & Young, LLP or other certified public
accountants reasonably acceptable to the Purchaser and the Candlewood Parties
shall determine any such adjustments which have not theretofore been agreed to
between the Candlewood Parties and the Purchaser. The charges of such accountant
shall be borne by the Candlewood Parties.
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9.2.CLOSING COSTS. The Candlewood Parties shall pay all costs and
expenses associated with the transactions contemplated hereby, including,
without limitation, recording costs, title insurance premiums, the costs and
expenses of preparing engineering and environmental reports, market studies and
appraisals and the reasonable costs and expenses of legal counsel retained by
the Purchaser.
The obligations of the parties under this Section 9 shall survive the
Closing.
SECTION 10. DEFAULT.
10.1.DEFAULT BY THE CANDLEWOOD PARTIES. If the Candlewood Parties shall
have made any representation or warranty herein which shall be untrue or
misleading in any material respect, or if the Candlewood Parties shall fail to
perform any of the material covenants and agreements contained herein to be
performed by the Candlewood Parties and such failure continues for a period of
ten (10) days after notice thereof from the Purchaser or if the Tenant shall
default in its obligations under the Agreement to Lease and such default shall
continue beyond the expiration of any applicable cure period, the Purchaser may
terminate this Agreement and/or the Purchaser may pursue any and all remedies
available to it at law or in equity, including, but not limited to, a suit for
specific performance or other equitable relief.
10.2.DEFAULT BY THE PURCHASER. If the Purchaser shall have made any
representation or warranty herein which shall be untrue or misleading in any
material respect, or if the Purchaser shall fail to perform any of the covenants
and agreements contained herein to be performed by it and such failure shall
continue for a period of ten (10) days after notice thereof from the Candlewood
Parties or if the Purchaser shall default in its obligations under the Agreement
to Lease and such default shall continue beyond the expiration of any applicable
cure period, the Candlewood Parties may, as its sole and exclusive remedy at law
and in equity, terminate this Agreement. In the event that the Candlewood
Parties shall so terminate this Agreement, the Purchaser shall thereupon pay to
the Candlewood Parties, as liquidated damages and not as a penalty, the sum of
Two Hundred Fifty Thousand Dollars ($250,000) plus all expenses incurred by the
Candlewood Parties in connection with the transactions contemplated hereby,
whereupon, the Purchaser shall have no further monetary or, except as expressly
provided herein, nonmonetary obligations hereunder.
SECTION 11. MISCELLANEOUS.
11.1.AGREEMENT TO INDEMNIFY. (a) Subject to any express provisions of
this Agreement to the contrary, (i) the Candlewood Parties shall indemnify and
hold harmless the Purchaser from and against any and all obligations, claims,
losses, damages, liabilities, and expenses (including, without limitation,
reasonable attorneys' and accountants' fees and disbursements) arising out of
(x) events, contractual obligations, acts or omissions of the Candlewood Parties
that occurred in connection with the ownership or operation of any Property
prior to the Closing or (y) any damage to property of others or injury to or
death of any person or any claims for any debts or obligations occurring on or
about or in connection with any Property
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or any portion thereof at any time or times prior to the Closing, and (ii) the
Purchaser shall indemnify and hold harmless the Candlewood Parties from and
against any and all obligations, claims, losses, damages, liabilities and
expenses (including, without limitation, reasonable attorneys' and accountants'
fees and disbursements) arising out of (x) events, contractual obligations, acts
or omissions of Purchaser that occur in connection with the ownership or
operation of any Property on or after the Closing, or (y) any damage to property
of others or injury to or death of any person or any claims for any debts or
obligations occurring on or about any Property or any portion thereof at any
time or times after the Closing.
(b) Whenever it is provided in this Agreement that an obligation
of the Candlewood Parties will be assumed by the Purchaser on or after the
Closing, the Purchaser shall be deemed to have also agreed to indemnify and hold
harmless the Candlewood Parties and their respective successors and assigns from
and against all claims, losses, damages, liabilities, costs, and expenses
(including, without limitation, reasonable attorneys' and accountants' fees and
expenses) arising from any failure of the Purchaser to perform the obligation so
assumed on or after the Closing.
(c) Whenever either party shall learn through the filing of a
claim or the commencement of a proceeding or otherwise of the existence of any
liability for which the other party is or may be responsible under this
Agreement, the party learning of such liability shall notify the other party
promptly and furnish such copies of documents (and make originals thereof
available) and such other information as such party may have that may be used or
useful in the defense of such claims and shall afford said other party full
opportunity to defend the same in the name of such party and shall generally
cooperate with said other party in the defense of any such claim.
(d) The provisions of this Section 11.1 shall survive the Closing
and the termination of this Agreement.
11.2.BROKERAGE COMMISSIONS. Each of the parties hereto represents to the
other parties that, except ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, it dealt with no
broker, finder or like agent in connection with this Agreement or the
transactions contemplated hereby. The Candlewood Parties shall be solely
responsible for and shall indemnify and hold harmless the Purchaser and its
respective legal representatives, heirs, successors and assigns from and against
any loss, liability or expense, including, reasonable attorneys' fees, arising
out of any claim or claims for commissions or other compensation for bringing
about this Agreement or the transactions contemplated hereby made by ▇▇▇▇▇▇▇▇▇,
Lufkin & ▇▇▇▇▇▇▇▇ or any other broker, finder or like agent other than such
loss, liability or expense arising from the Purchaser's breach of its
representation made in this Section 11.2. The provisions of this Section 11.2
shall survive the Closing and any termination of this Agreement.
11.3.PUBLICITY. The parties agree that no party shall, with respect to
this Agreement and the transactions contemplated hereby, contact or conduct
negotiations with public officials, make any public pronouncements, issue press
releases or otherwise furnish information regarding this Agreement or the
transactions contemplated to any third party without the consent of the other
parties, which consent shall not be unreasonably withheld, delayed or
conditioned, except as
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required by law or unless such action is taken based on advice of counsel given
in good faith. No party, or its employees shall trade in the securities of any
parent or affiliate of the Sellers or of the Purchaser until a public
announcement of the transactions contemplated by this Agreement has been made.
No party shall record this Agreement or any notice thereof, except as required
by law or unless such action is taken based on advice of counsel given in good
faith.
11.4.NOTICES. (a) Any and all notices, demands, consents, approvals,
offers, elections and other communications required or permitted under this
Agreement shall be deemed adequately given if in writing and the same shall be
delivered either in hand, by telecopier with written acknowledgment of receipt,
or by mail or Federal Express or similar expedited commercial carrier, addressed
to the recipient of the notice, postpaid and registered or certified with return
receipt requested (if by mail), or with all freight charges prepaid (if by
Federal Express or similar carrier).
(b) All notices required or permitted to be sent hereunder shall
be deemed to have been given for all purposes of this Agreement upon the date of
acknowledged receipt, in the case of a notice by telecopier, and, in all other
cases, upon the date of receipt or refusal, except that whenever under this
Agreement a notice is either received on a day which is not a Business Day or is
required to be delivered on or before a specific day which is not a Business
Day, the day of receipt or required delivery shall automatically be extended to
the next Business Day.
(c) All such notices shall be addressed,
if to the Candlewood Parties to:
Candlewood Hotel Company, Inc.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
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If to the Purchaser, to:
Hospitality Properties Trust
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
with a copy to:
▇▇▇▇▇▇▇▇ & Worcester LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
(d) By notice given as herein provided, the parties hereto and
their respective successors and assigns shall have the right from time to time
and at any time during the term of this Agreement to change their respective
addresses effective upon receipt by the other parties of such notice and each
shall have the right to specify as its address any other address within the
United States of America.
11.5.WAIVERS, ETC. Any waiver of any term or condition of this
Agreement, or of the breach of any covenant, representation or warranty
contained herein, in any one instance, shall not operate as or be deemed to be
or construed as a further or continuing waiver of any other breach of such term,
condition, covenant, representation or warranty or any other term, condition,
covenant, representation or warranty, nor shall any failure at any time or times
to enforce or require performance of any provision hereof operate as a waiver of
or affect in any manner such party's right at a later time to enforce or require
performance of such provision or any other provision hereof. This Agreement may
not be amended, nor shall any waiver, change, modification, consent or discharge
be effected, except by an instrument in writing executed by or on behalf of the
party against whom enforcement of any amendment, waiver, change, modification,
consent or discharge is sought.
11.6.ASSIGNMENT; SUCCESSORS AND ASSIGNS. This Agreement and all rights
and obligations hereunder shall not be assignable by any party without the
written consent of the other parties, except that (x) Purchaser may assign this
Agreement to any entity wholly owned, directly or indirectly, by the Purchaser
(provided, however, that, in the event this Agreement shall be assigned to any
entity wholly owned, directly or indirectly, by the Purchaser, Hospitality
Properties Trust shall remain liable for the obligation of the "Purchaser"
hereunder) and (y) after the Closing, the Sellers may assign its surviving
rights, if any, under this Agreement to the Tenant. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective legal representatives, successors and permitted assigns. This
Agreement is not intended and shall not be construed to create any rights in or
to be enforceable in any part by any other persons.
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11.7.SEVERABILITY. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision or provisions
in question invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case.
11.8.COUNTERPARTS, ETC. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and shall supersede and take the place of any other
instruments purporting to be an agreement of the parties hereto relating to the
subject matter hereof.
11.9.GOVERNING LAW. This Agreement shall be interpreted, construed,
applied and enforced in accordance with the laws of The Commonwealth of
Massachusetts applicable to contracts between residents of Massachusetts which
are to be performed entirely within Massachusetts, regardless of (i) where this
Agreement is executed or delivered; or (ii) where any payment or other
performance required by this Agreement is made or required to be made; or (iii)
where any breach of any provision of this Agreement occurs, or any cause of
action otherwise accrues; or (iv) where any action or other proceeding is
instituted or pending; or (v) the nationality, citizenship, domicile, principal
place of business, or jurisdiction of organization or domestication of any
party; or (vi) whether the laws of the forum jurisdiction otherwise would apply
the laws of a jurisdiction other than The Commonwealth of Massachusetts; or
(vii) any combination of the foregoing.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in such court or courts located in
The Commonwealth of Massachusetts as is provided by law; and the parties consent
to the jurisdiction of said court or courts located in The Commonwealth of
Massachusetts and to service of process by registered mail, return receipt
requested, or by any other manner provided by law.
11.10.PERFORMANCE ON BUSINESS DAYS. In the event the date on which
performance or payment of any obligation of a party required hereunder is other
than a Business Day, the time for payment or performance shall automatically be
extended to the first Business Day following such date.
11.11.ATTORNEYS' FEES. If any lawsuit or arbitration or other legal
proceeding arises in connection with the interpretation or enforcement of this
Agreement, the prevailing party therein
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shall be entitled to receive from the other party the prevailing party's costs
and expenses, including reasonable attorneys' fees incurred in connection
therewith, in preparation therefor and on appeal therefrom, which amounts shall
be included in any judgment therein.
11.12.SECTION AND OTHER HEADINGS. The headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
11.13.NONLIABILITY OF TRUSTEES. THE DECLARATION OF TRUST ESTABLISHING
THE PURCHASER, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
"DECLARATION"), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF
THE STATE OF MARYLAND, PROVIDES THAT THE NAME "HOSPITALITY PROPERTIES TRUST"
REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT
INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE
OR AGENT OF THE PURCHASER SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR
SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE PURCHASER. ALL PERSONS
DEALING WITH THE PURCHASER, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF THE
PURCHASER FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as a sealed instrument as of the date first above written.
CANDLEWOOD PARTIES:
CANDLEWOOD HOTEL COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. FIX
--------------------------------
Its: Executive Vice President
CANDLEWOOD WICHITA NORTHEAST, LLC
CANDLEWOOD ENGLEWOOD, LLC
CANDLEWOOD JEFFERSONTOWN, LLC
CANDLEWOOD BLUE ASH, LLC
CANDLEWOOD BIRMINGHAM, LLC
CANDLEWOOD LOS ANGELES, CA-LAKE
FOREST, LLC
CANDLEWOOD OMAHA, LLC
CANDLEWOOD PHOENIX METRO, AZ, LLC
CANDLEWOOD NORTH TEMPLE, LLC
CANDLEWOOD HORSHAM, PA, LLC
CANDLEWOOD FT. UNION, UT, LLC
CANDLEWOOD SOUTHFIELD, LLC
CANDLEWOOD HAMPTON, LLC
CANDLEWOOD WICHITA AIRPORT, LLC
CANDLEWOOD HOUSTON, TX-TOWN &
COUNTRY, LLC
BY: CANDLEWOOD HOTEL COMPANY, INC., MANAGER
By: /s/ ▇▇▇▇▇▇ ▇. FIX
--------------------------------
▇▇▇▇▇▇ ▇. Fix
Executive Vice President
PURCHASER:
HOSPITALITY PROPERTIES TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Its: President and Chief Operating Officer
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