EXHIBIT 2.9
HOTEL PURCHASE AGREEMENT
BY AND BETWEEN
AMERICAN GENERAL HOSPITALITY OPERATING PARTNERSHIP, L.P.
AS PURCHASER
AND
RENTHOTEL DURHAM, L.L.C.,
AS SELLER
TABLE OF CONTENTS
-----------------
ARTICLE 1
THE CONTRACT......................................................... 1
------------
ARTICLE 2
HOTEL................................................................ 4
-----
ARTICLE 3
PURCHASE PRICE....................................................... 4
--------------
3.1. Purchase Price................................................. 5
--------------
3.2. Allocations.................................................... 5
-----------
3.3. ▇▇▇▇▇▇▇ Money.................................................. 6
-------------
ARTICLE 4
TITLE DELIVERIES..................................................... 6
----------------
4.1. Deed........................................................... 6
----
4.2. ▇▇▇▇ of Sale................................................... 6
------------
4.3. Title Commitment............................................... 7
----------------
4.4. UCC Search..................................................... 7
----------
4.5. Survey......................................................... 8
------
ARTICLE 5
HOTEL DOCUMENTS, INSPECTION AND OBJECTIONS........................... 8
------------------------------------------
5.1. Inspections.................................................... 8
-----------
5.2. Hotel Documents................................................ 10
---------------
5.3. Review Period.................................................. 11
-------------
ARTICLE 6
PERMITTED EXCEPTIONS................................................. 11
6.1. Permitted Exceptions........................................... 12
--------------------
ARTICLE 7
LEASES, OCCUPANCY AGREEMENTS, FF&E LEASES, AND SERVICE CONTRACTS..... 12
----------------------------------------------------------------
7.1. Schedules...................................................... 12
---------
ARTICLE 8
OPERATION OF HOTEL................................................... 12
------------------
8.1. Interim Operation.............................................. 14
-----------------
8.2. Mechanics Liens................................................ 14
---------------
8.3. Notices of Violation........................................... 15
--------------------
8.4. Third Party Consents........................................... 15
--------------------
8.5. Estoppel Letters............................................... 15
----------------
ARTICLE 9
REPRESENTATIONS AND COVENANTS........................................ 15
-----------------------------
9.1. Representations by Purchaser.................................. 16
----------------------------
9.2. Representations by Seller..................................... 20
-------------------------
9.3. Subsequent Developments....................................... 20
-----------------------
9.4. Limitation on Further Sales Efforts........................... 21
-----------------------------------
9.5. Shadow Management............................................. 21
-----------------
9.6. Access to Records and Financial Information................... 22
-------------------------------------------
9.7. Seller's Indemnity............................................ 22
------------------
9.8. Purchaser's Indemnity......................................... 22
---------------------
9.9. Seller's Actual Knowledge..................................... 22
-------------------------
9.10. Investigation................................................. 23
-------------
9.11. Sign.......................................................... 23
----
ARTICLE 10
CONDITIONS PRECEDENT TO THE CLOSING.................................. 23
-----------------------------------
10.1. Seller's Obligations.......................................... 23
--------------------
10.2. Seller's Representations and Warranties....................... 23
---------------------------------------
10.3. Title Policy.................................................. 24
------------
10.4. Franchisor and Lender Conditions.............................. 24
--------------------------------
ARTICLE 11
CLOSING AND CLOSING DOCUMENTS........................................ 24
-----------------------------
11.1. Closing....................................................... 24
-------
11.2. Seller's Deliveries........................................... 26
-------------------
11.3. Purchaser's Deliveries........................................ 26
----------------------
11.4. Prorations.................................................... 27
----------
11.5. Document Preparation and Closing Costs........................ 28
--------------------------------------
11.6. Reconciliation and Final Payment.............................. 28
--------------------------------
11.7. Accounts Payable.............................................. 28
----------------
11.8. Accounts Receivable........................................... 28
-------------------
ARTICLE 12
CASUALTY AND CONDEMNATION............................................ 28
-------------------------
12.1. Risk of Loss; Notice.......................................... 29
--------------------
12.2. Purchaser's Termination Right................................. 29
-----------------------------
12.3. Procedure for Closing......................................... 29
---------------------
ARTICLE 13
DEFAULT AND REMEDIES................................................. 29
--------------------
13.1. Purchaser's Default........................................... 30
-------------------
13.2. Seller's Default.............................................. 30
----------------
13.3. Survival...................................................... 30
--------
ARTICLE 14
BROKERS...................................................................... 30
-------
14.1. Identity of Brokers................................................... 31
-------------------
14.2. Indemnification by Seller............................................. 31
-------------------------
14.3. Indemnification by Purchaser.......................................... 31
----------------------------
ARTICLE 15
FRANCHISE.................................................................... 31
---------
15.1. Franchise............................................................. 32
---------
ARTICLE 16........................................................................ 32
LIQUOR LICENSE
--------------
16.1. Liquor Licenses....................................................... 33
---------------
ARTICLE 17........................................................................ 33
MISCELLANEOUS................................................................ 33
-------------
17.1. Notices............................................................... 34
-------
17.2. Entire Agreement; Modifications and Waivers; Cumulative Remedies...... 34
----------------------------------------------------------------
17.3. Exhibits.............................................................. 34
--------
17.4. Successors and Assigns................................................ 34
----------------------
17.5. Article Headings...................................................... 35
----------------
17.6. Governing Law......................................................... 35
-------------
17.7. Time Periods.......................................................... 35
------------
17.8. Counterparts.......................................................... 35
------------
17.9. Survival.............................................................. 35
--------
17.10. Further Acts.......................................................... 35
------------
17.11. Severability.......................................................... 36
------------
17.12. Attorneys' Fees....................................................... 36
---------------
17.13. Qualification on Confidentiality...................................... 36
--------------------------------
17.14. Rules of Construction................................................. 36
---------------------
17.15. Dependent Contract.................................................... 36
------------------
17.16. Seller's Right of Access to Employment and Other Records.............. 36
--------------------------------------------------------
HOTEL PURCHASE AGREEMENT
------------------------
THIS HOTEL PURCHASE AGREEMENT (this "Agreement") is made as of the date
last below written by and between RENTHOTEL DURHAM, L.L.C., a North Carolina
limited liability company ("Seller"), and American General Hospitality
Operating Partnership, L.P., a Delaware limited partnership ("Purchaser").
RECITALS:
--------
A. Seller is the owner of the Hotel (as hereinafter defined) currently
licensed and operated as a Doubletree hotel.
B. Purchaser is affiliated with, and owned directly or indirectly in part
by, American General Hospitality Corporation, a Maryland corporation that has
elected to be taxed as a real estate investment trust ("REIT").
C. Seller desires to sell the Hotel to Purchaser, and Purchaser desires
to purchase the Hotel from Seller, on the terms and conditions hereinafter set
forth.
AGREEMENT:
---------
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE 1
THE CONTRACT
------------
For and in consideration of the mutual benefits enjoyed by one another
under this Agreement, Seller agrees to sell and convey the Hotel to Purchaser
and Purchaser agrees to purchase and accept conveyance of the Hotel pursuant to
the terms and conditions set forth in this Agreement.
ARTICLE 2
HOTEL
-----
As used in this Agreement, the term "Hotel" shall mean and refer to the
following and Seller's businesses operated with respect thereto:
(a) The real property located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, more particularly described on Exhibit A attached hereto,
---------
together with all rights, alleys, streets, strips, gores, waters, privileges,
appurtenances, advantages and easements belonging thereto or in anywise
appertaining thereto (collectively the "Land");
HOTEL PURCHASE AGREEMENT - Page 1
------------------------
(b) The six (6) story, approximately 152 room hotel, and all other
buildings, structures, fixtures, parking areas, and other improvements presently
located upon the Land (collectively, the "Improvements");
(c) All tangible personal property and fixtures (which are not part
of the Improvements) of any kind attached to, or located upon and used in
connection with the ownership, maintenance, use or operation of the Land or
Improvements as of the date hereof and owned by Seller (or acquired by Seller
and so employed prior to Closing, as defined below), including, but not limited
to, all furniture, furnishings, fixtures, equipment, signs; all heating,
lighting, plumbing, drainage, electrical, air conditioning, and other mechanical
fixtures and equipment and systems; all elevators, escalators, and related
motors and electrical equipment and systems; all hot water heaters, furnaces,
heating controls, motors and boiler pressure systems and equipment, all shelving
and partitions, all ventilating equipment, and all incinerating and disposal
equipment; all tennis, pool and health club and fitness equipment and
furnishings; all vans, automobiles and other motor vehicles; all carpet, drapes,
beds, furniture, televisions, telephones and other furnishings; and all stoves,
ovens, freezers, refrigerators, dishwashers, disposals, kitchen equipment and
utensils, tables, chairs, plates and other dishes, glasses, silverware, serving
pieces and other restaurant and bar equipment, apparatus and utensils
(collectively, the "FF&E");
(d) All merchandise, supplies, inventory and other items owned by
Seller and used for the operation and maintenance of guest rooms, guest
services, restaurants, lounges, swimming pools, health clubs, and other common
areas and recreational areas located within or relating to the Improvements,
including, without limitation, all food and beverage (alcoholic and non-
alcoholic) inventory except to the extent any applicable law prohibits the
transfer of unopened alcoholic beverages (if applicable, the Purchase Price
shall be reduced by Seller's substantiated cost thereof), office supplies and
stationery, advertising and promotional materials, towels, washcloths,
mattresses, pillows, linens and bedding, cleaning, paper and other supplies,
napkins and tablecloths, upholstery material, carpets, rugs, furniture,
engineers' supplies, paint and painters' supplies, employee uniforms, and pool,
tennis court and other recreational area cleaning and maintenance supplies
(collectively, the "Supplies");
(e) To the extent owned by Seller and assignable, (i) all leases,
licenses, and other agreements with respect to tenancies of the nature of space
leases, together with all amendments, modifications, renewals and extensions
thereof and all guaranties by third parties of the obligations of tenants,
licensees, and similarly situated parties thereunder (the "Leases"), and (ii)
all occupancy agreements, "trade-out" agreements, advance booking agreements,
convention reservation agreements, or other similar agreements, other than
Leases and other than guest or room bookings, demising space in, providing for
the use or occupancy of, or otherwise similarly affecting or relating to the use
or occupancy of the Improvements or Land together with all amendments,
modifications, renewals and extensions thereof, and all guaranties by third
parties of the obligations of the holder of the occupancy right and similarly
situated parties thereunder (the "Occupancy Agreements");
(f) To the extent owned by Seller and assignable, all prepaid rents
and deposits, including, but not limited to, utility deposits, refundable
security deposits and rental deposits, and
HOTEL PURCHASE AGREEMENT - Page 2
------------------------
all other deposits for advance reservations, banquets or future services, made
in connection with the use or occupancy of the Improvements (collectively the
"Deposits"); provided, however, that to the extent Purchaser does not receive
the Deposits at Closing, Purchaser shall be entitled to a credit against the
cash portion of the Purchase Price (as defined below) in an amount equal to the
Deposits, and Purchaser agrees to assume all of Seller's liability and
obligations, if any, with regard to the Deposits so received or credited;
(g) Any and all of the following to the extent owned by Seller and
assignable that relate to or affect in any way, the design, construction,
ownership, use, occupancy, leasing, maintenance, service, or operation of the
Land, Improvements, Leases, Deposits, Supplies, or FF&E:
(i) Contracts and agreements, such as labor, collective
bargaining, service, or maintenance contracts, management or employment
agreements, utility contracts, contracts for the purchase of supplies,
insurance contracts, airline agreements, corporate account agreements,
travel agency agreements, telephone service agreements, and yellow pages or
other advertising agreements (collectively, the "Service Contracts");
(ii) Warranties, guaranties, indemnities, and claims for the
benefit of Seller (collectively the "Warranties");
(iii) Licenses (including without limitation liquor, beer, wine,
bar and similar licenses, unless otherwise herein provided), permits,
franchises (including without limitation hotel franchise license
agreements), utility reservations, certificates of occupancy, and similar
documents issued by any federal, state, or municipal authority or by any
private party so long as assignment can be made without material cost to
Seller (collectively the "Licenses");
(iv) Trade names, trade styles, trade marks, service marks, and
other identifying material, and all variations thereof, together with all
related goodwill (collectively, the "Tradenames") (it being understood and
agreed that the name of the hotel chain to which the Hotel is affiliated by
franchise or other license agreement is a protected name or registered
service ▇▇▇▇ of such hotel chain and cannot be transferred to Purchaser by
this Agreement);
(v) Plans, drawings, specifications, surveys, soil reports,
engineering reports, inspection reports, environmental audits and other
technical descriptions and reports to the extent in Seller's possession or
control (collectively, the "Plans and Specs");
(vi) Leases of any FF&E and other contracts permitting the use
of any FF&E at the Improvements (including, without limitation, vehicles,
reservations and other such franchise related systems and related satellite
programing leases and contracts) (collectively, the "FF&E Leases");
HOTEL PURCHASE AGREEMENT - Page 3
------------------------
(h) To the extent owned by Seller and assignable, Seller's interest
in the right to receive immediately on and after Closing and continuously
consume thereafter water service, sanitary and storm sewer service, electrical
service, gas service, and telephone service on and for the Land and
Improvements, and the foregoing right shall include, but not be limited to the
following, to the extent assignable and owned by Seller, (i) the right to the
present and future use of wastewater, drainage, water and other utility
facilities to the extent such use benefits the Land or Improvements, (ii) all
reservations of or commitments covering any such use in the future, and (iii)
all wastewater capacity reservations ever issued and relating to the Land or
Improvements (all of the foregoing are referred to in this Agreement
collectively as the "Utility Reservations");
(i) All rights, titles, and interests of Seller appurtenant to the
Land and Improvements, including, but not limited to, (i) all easements, rights
of way, rights of ingress and egress, tenements, hereditaments, privileges, and
appurtenances in any way belonging to the Land or Improvements, (ii) any land
lying in the bed of any alley, highway, street, road or avenue, open or
proposed, in front of or abutting or adjoining the Land, (iii) any strips or
gores of real estate adjacent to the Land, and (iv) the use of all alleys,
easements and rights-of-way, if any, abutting, adjacent or contiguous to or
adjoining the Land (collectively, the "Appurtenances");
(j) All books and records, promotional material, telephone numbers,
tenant data, marketing and leasing material and forms, market studies, keys, and
other materials of any kind owned by Seller and in Seller's possession or
control, or to which Seller has access or may obtain and has the right to convey
and deliver which are or may be used in Seller's ownership or use of the Land,
the Improvements or the FF&E, whether any of the foregoing are in hard copy form
or in computerized data storage form (collectively, the "Records"); provided,
however, (i) that a copy of any such material which constitutes a part of
Seller's continuing business or financial records may be retained by Seller and
(ii) that Seller's and Seller's manager's accounting software shall not be
conveyed; and
(k) Seller's active guest ledger, tray ledger, ▇▇▇▇▇ cash, cash
drawers, and house accounts as of 2:00 A.M. on the Closing Date but excluding
Seller's accounts receivable, reserves, and bank accounts (the "Cash and
Equivalents"). The Cash and Equivalents shall be separately paid for by
Purchaser by adding the amount thereof to the Purchase Price at Closing.
The Hotel shall be conveyed, assigned, and transferred to Purchaser at Closing,
(i) free and clear of all mortgages, debts, liens, encumbrances, management
agreements, security interests, other encumbrances, and prior assignments and
conveyances, and (ii) free and clear of all licenses, leases, franchises, and
other agreements, and all conditions, restrictions, rights-of-way, easements,
encroachments, claims and other matters affecting title, except for those
matters specifically set forth on Exhibit B attached hereto and as described in
---------
Section 6.1 below (the "Conveyance Standard").
ARTICLE 3
PURCHASE PRICE
--------------
3.1. Purchase Price. The total price (the "Purchase Price") for which
--------------
Seller agrees to sell
HOTEL PURCHASE AGREEMENT - Page 4
------------------------
and convey the Hotel to Purchaser, and which Purchaser agrees to pay or deliver
to Seller, subject to the terms of this Agreement, and adjustments as provided
herein, shall consist of $12,000,000.00 plus the sum of the Cash and
Equivalents, subject to adjustments as herein provided, in immediately available
funds payable to Seller at the Closing.
3.2. Allocations. Subject to adjustments in accordance with the terms of
-----------
this Agreement, the Purchase Price shall be allocated among the Land,
Improvements, FF&E, and the other components of the Hotel in the manner
determined by Purchaser and Seller prior to the end of the Review Period.
3.3. ▇▇▇▇▇▇▇ Money.
-------------
(a) For the purpose of securing the performance of Purchaser under
the terms and provisions of this Agreement, Purchaser has delivered the ▇▇▇▇▇▇▇
Money (below defined) to the Title Company (below defined). The term "▇▇▇▇▇▇▇
Money" means an irrevocable, unconditional letter of credit in favor of Seller
issued by Bank One, Texas, N.A., in the amount of $107,000.00, which, by its
terms, will be paid to Seller on presentment accompanied by a certification by
Seller that Purchaser has defaulted under this Agreement, together with any
other sums or letters of credit which may from time to time be deposited as
"▇▇▇▇▇▇▇ Money" or "Additional ▇▇▇▇▇▇▇ Money" under the terms of this Agreement
or any addendum or amendment hereto. All interest accruing on any cash portion
of the ▇▇▇▇▇▇▇ Money shall become a part of and be added to the ▇▇▇▇▇▇▇ Money
so that it shall be subject to disbursement or application in the same manner as
is the principal of the ▇▇▇▇▇▇▇ Money. The Title Company shall deposit any cash
portion of the ▇▇▇▇▇▇▇ Money in an interest bearing account at a bank or savings
institution reasonably acceptable to Seller and Purchaser, and all interest
accrued thereon shall be reported under Purchaser's federal tax identification
number. If the sale of the Hotel is not consummated in accordance with the terms
hereof, the ▇▇▇▇▇▇▇ Money, less the sum of $100.00 therefrom which shall be paid
to Seller as independent consideration for entering into this Agreement, shall
be returned to Purchaser or delivered to Seller as liquidated damages as herein
provided. If the sale of the Hotel is consummated in accordance with the terms
hereof, the ▇▇▇▇▇▇▇ Money, less such $100.00 independent consideration, shall be
applied to the Purchase Price.
(b) Within three (3) business days of the execution hereof, Purchaser
shall deliver to the Title Company a similar letter of credit in the amount of
$133,000.00 so that the aggregate amount of the ▇▇▇▇▇▇▇ Money is then
$240,000.00.
(c) If this Agreement shall then still be in effect, within three (3)
business days after the end of the Review Period (below defined), Purchaser
shall deliver to the Title Company a similar letter of credit in the amount of
$120,000.00 so that the aggregate amount of the ▇▇▇▇▇▇▇ Money is then
$360,000.00.
(d) If this Agreement shall then still be in effect, on or before
November 15, 1996, Purchaser shall deliver to the Title Company a similar letter
of credit in the amount of $176,000.00 so that the aggregate amount of the
▇▇▇▇▇▇▇ Money is then $536,000.00.
HOTEL PURCHASE AGREEMENT - Page 5
------------------------
(e) All letters of credit constituting part of the ▇▇▇▇▇▇▇ Money
shall (or if already deposited and not thus providing shall immediately be made
to) (i) name the Title Company as an additional beneficiary thereunder, and (ii)
have an expiration date of no earlier than February 3, 1997. All such letters
of credit shall, if necessary, no fewer than five (5) days prior to the then
scheduled Closing Date, be extended so that expiration shall be no earlier than
thirty (30) days following the then scheduled Closing Date, failing in which the
Title Company shall draw the letters of credit and thereafter maintain the
▇▇▇▇▇▇▇ Money under the terms of Section 3.3 above.
(f) Purchaser reserves the right to make all ▇▇▇▇▇▇▇ Money deposits
in cash and, with respect to any ▇▇▇▇▇▇▇ Money deposits which are made in the
form of letters of credit, to substitute cash therefor and thereupon receive the
return of the letters of credit for which cash has been substituted.
ARTICLE 4
TITLE DELIVERIES
----------------
4.1. Deed. On the Closing Date, Seller shall convey, transfer, and assign
----
title to the Hotel to Purchaser. The Land, Improvements and Appurtenances shall
be conveyed to Purchaser by Seller's Special Warranty Deed in a form reasonably
acceptable to both Purchaser and Seller ("Seller's Deed") conveying good,
indefeasible, and insurable fee simple title to the Land and Improvements, in
accordance with the Conveyance Standard.
4.2. ▇▇▇▇ of Sale. Seller's interest in all FF&E, Supplies, Warranties,
------------
Licenses, Tradenames, Plans and Specs, Utility Reservations, Records, Deposits,
Cash and Equivalents, and other personal property shall be conveyed to Purchaser
(and/or, at Purchaser's option, Purchaser's lessee or other designee) by
Seller's Special Warranty ▇▇▇▇ of Sale, Assignment and Assumption Agreement in
a form reasonably acceptable to both Purchaser and Seller (the "▇▇▇▇ of Sale")
conveying good title to all such property in accordance with the Conveyance
Standard..
4.3. Title Commitment. As soon as practicable but no later than thirty
----------------
(30) days after the execution of this Agreement, Purchaser shall obtain (and
promptly deliver a copy to Seller) the following:
(a) A Commitment for Title Insurance (the "Title Commitment") issued
for Chicago Title Insurance Company ("Chicago") or other title company
designated by Purchaser, issued through Chicago Title Insurance Company, ▇▇▇ ▇.
▇▇. ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(214/720-4000) (the "Title Company"), for the most recent form of ALTA owner's
policy and the 1970 form of Loan Policy (modified to include the Creditors'
Rights exception), covering the Land and Improvements, in the full amount of the
Purchase Price and endorsed as Purchaser or its lender may reasonably require,
setting forth the current status of the title to the Land and Improvements,
showing all liens, claims, encumbrances, easements, rights of way,
encroachments, reservations, restrictions, and any other matters affecting the
Land and Improvements, and pursuant to which the Title Company agrees to issue
to Purchaser at Closing an Owner Policy of Title Insurance (the "Title Policy")
on the most recent form of ALTA
HOTEL PURCHASE AGREEMENT - Page 6
------------------------
comprehensive coverage owner's policy and loan policy (as above provided) as
endorsed as Purchaser or its lender may reasonably require; and
(b) A true, complete, and legible copy of all documents and
instruments (as recorded, where applicable) (the "Supporting Documents")
referred to or identified in the Title Commitment, including, but not limited
to, all deeds and other conveyance documents evidencing transfer of title into
Seller, lien instruments, leases, plats, surveys, reservations, restrictions,
and easements.
4.4. UCC Search. As soon as practicable but no later than thirty (30) days
----------
after the execution of this Agreement, Purchaser shall obtain (and promptly
deliver a copy to Seller) current written reports on those names requested by
Purchaser (the "UCC Searches") from the Office of the Secretary of State of the
State where the Hotel is located and the deed recording offices of the county
where the Hotel is located reflecting the results of current searches of the
Uniform Commercial Code Records maintained by such offices.
4.5. Survey. As soon as practicable but no later than thirty (30) days
------
after the execution of this Agreement, Purchaser shall obtain (and promptly
deliver a copy to Seller) a current "as built" survey (the "Survey") of the Land
and Improvements made on the ground and certified by a professional land
surveyor licensed in the state in which the Hotel is located and approved by the
Title Company and Purchaser (the "Surveyor"). Except as Purchaser shall
otherwise direct, the Survey must be prepared, and the field work surveying must
be conducted, in accordance with the current Minimum Standard Detail
Requirements for ALTA/ACSM Real Property Title Surveys and the items set forth
in Table A thereto (other than contours and elevations of the Land but including
elevations of the Improvements) and, except as Purchaser shall otherwise direct,
shall (i) accurately show the locations and dimensions of all existing
easements, fire hydrants, fences, encroachments, conflicts, protrusions, alleys,
streets and roads (including median and curb cuts), and rights-of-way on or
adjacent to or serving the Land which are visible on the ground or listed in the
Title Commitment (with recording information shown if applicable); (ii)
accurately show the locations of all existing improvements, monuments,
sidewalks, driveways, parking lots (with striped spaces shown) and other visible
items on the Land; (iii) accurately show all areas designated as being flood
prone or subject to special flood hazards or other hazardous conditions
according to the most current official maps of the Flood Insurance
Administration, the Federal Emergency Management Agency or any other public or
semi-public body charged with determining the existence of such conditions which
has jurisdiction over the Hotel; (iv) set forth a metes and bounds description
of the Land and all on-the-ground Appurtenances tied at all corners to physical
monuments and on all sides and curves to adjoining tracts (with any
discrepancies fully reconciled) and a description by reference to the recorded
plat or map of the Land; and (v) contain a certification by the Surveyor in form
reasonably acceptable and addressed to Seller, Purchaser and the Title Company,
indicating that the Survey was made on the ground and accurately shows all the
matters required above. If different from the description contained in Exhibit
-------
A attached to this Agreement, the legal description of the Land contained in the
-
Survey, once the correctness thereof has been confirmed by Seller, Purchaser and
the Title Company, shall be substituted for the description of the Land
contained in said Exhibit A and this Agreement shall be deemed amended by the
---------
substitution of the legal description
HOTEL PURCHASE AGREEMENT - Page 7
------------------------
of the Land contained in the Survey as a new Exhibit A without the necessity of
---------
the parties executing any additional written amendments to this Agreement
provided that the Title Company shall accept such description to be used in the
Owner Policy of Title Insurance, in Seller's Deed, and in any Mortgagee Policy
of Title Insurance and any mortgage to be delivered to any lender at Closing.
ARTICLE 5
HOTEL DOCUMENTS, INSPECTION AND OBJECTIONS
------------------------------------------
5.1. Inspections. Seller shall give Purchaser and Purchaser's agents and
-----------
representatives reasonable access to the Hotel, upon at least 48 hours prior
notice to ▇▇▇▇▇ ▇▇▇▇▇▇ or his designee, during normal business hours prior to
the end of the Review Period and the right to physically inspect the Hotel and
to conduct soil tests, environmental tests and inspections, and other tests and
inspections (so long as such tests and inspections do not unreasonably interfere
with the use and occupancy of the Hotel by Seller, by guests or patrons of the
Hotel property, or by tenants). Seller may accompany Purchaser and its agents
and representatives in any such inspections. The costs and expenses of
Purchaser's investigation shall be borne solely by Purchaser and Purchaser shall
indemnify and hold Seller harmless from any cost, claim or expense in connection
therewith. Purchaser shall also be allowed during the Review Period to obtain
(and promptly deliver a copy to Seller) from Franchisor (as defined in Section
15.1 below) an evaluation from Franchisor incident to the customary terms of
Franchisor granting a new license ("Franchisor Evaluation"), at Purchaser's sole
cost and expense. Purchaser shall have the obligation to repair any damage
caused by Purchaser's inspections and tests to the condition prior to
Purchaser's entry, which obligation shall survive any termination of this
Agreement. The terms of this Agreement and all information furnished by Seller
to Purchaser in accordance with the provisions of this Agreement or obtained by
Purchaser in the course of its investigations shall be treated as confidential
information by Purchaser, except that Purchaser may disclose such information as
provided in Section 17.13 and/or to prospective investors and lenders, to
attorneys and other parties assisting or representing Purchaser in connection
with the subject transaction, and to others as may be required by lawful order.
The foregoing obligation to treat such information as confidential shall survive
any termination of this Agreement but shall not survive Closing.
5.2. Hotel Documents. As soon as practicable but in no event later than
---------------
ten (10) days after the execution hereof, Seller, at Seller's sole cost and
expense, will deliver to Purchaser true, correct and complete copies (or where
specifically indicated, original counterparts) of the following, together with
all amendments, modifications, renewals or extensions thereof:
(i) All Warranties relating to the Hotel or any part thereof
which are still in effect;
(ii) Financial statements, operating statements, budgets and
Federal and State income tax returns for the Hotel, to the extent that such
items have been prepared, for the current year to date and each of the
years prior to the year of this Agreement that Seller has owned the Hotel
(the "Financial Statements"), and, to the extent not reflected in such
items and reasonably available to Seller, itemization of (1) annual
insurance premiums for
HOTEL PURCHASE AGREEMENT - Page 8
------------------------
each such year for fire, extended coverage, workers' compensation,
vandalism and malicious mischief, general liability, business interruption,
rents and other forms of insurance shown thereon; (2) expenses incurred for
water, electricity, natural gas, sewer and other utility charges; (3) total
rents and revenues collected from tenants and from hotel guests and other
patrons of the Hotel; (4) management fees; (5) maintenance, repairs and
other expenses relating to the management and operation of the Hotel; (6)
historical occupancy statistics for the Hotel; and (7) all capital
expenditures made during the aforementioned periods; further, to the extent
in Seller's possession, Seller shall deliver all items of the nature of the
Financial Statements and other itemizations as above described for the
period prior to the date that Seller acquired the Hotel but Seller
expressly disclaims any representation or warranty with respect to any such
items;
(iii) All Licenses;
(iv) All of the most recent real estate and personal property
tax statements with respect to the Hotel and notices of appraised value for
the Land and Improvements;
(v) That certain suvey prepared by S.D. ▇▇▇▇▇▇▇ & Assoc.,
Inc., dated July 25, 1995, and, to the extent in Seller's possession or
control or readily obtainable without material expense, all engineering and
architectural plans, drawings and specifications relating to the Hotel, as
well as copies of any environmental reports, boundary and/or improvements
surveys, engineering reports and subsurface studies affecting the Hotel. If
the Hotel is purchased by Purchaser, to the extent assignable, all such
documents and information shall thereupon be and become the property of
Purchaser without payment of any additional consideration therefor;
provided, however, in the event that the Closing does not actually occur,
Purchaser shall return such information to Seller;
(vi) All Services Contracts and a schedule of such Service
Contracts including, without limitation, a schedule of media and
advertising commitments and programs (the "Schedule of Service Contracts");
(vii) All Leases, a schedule of such Leases (the "Schedule of
Leases") and all agreements for real estate commissions, brokerage fees,
finder's fees or other compensation payable by Seller in connection
therewith which would be binding on Purchaser after Closing;
(viii) [Deleted]
(ix) To the extent in Seller's possession or control, all
notices received from governmental authorities in connection with the Hotel
within the most recent twelve (12) months;
(x) A list of all current employees of Seller at the Hotel and
their salaries or wages and all employment benefits accompanied by copies
of their employment
HOTEL PURCHASE AGREEMENT - Page 9
------------------------
agreements and/or union contracts, if any;
(xi) All FF&E Leases and a schedule of such FF&E Leases (the
"Schedule of FF&E Leases");
(xii) Seller's franchise agreement and guest comments results
with respect to the Hotel;
(xiii) The most recent inventory of the FF&E and Supplies to the
extent such inventory exists;
(xiv) A schedule of the Deposits and the Utility Reservations
(the "Schedule of Deposits and Utility Reservations");
(xv) Standard market segment reports identifying the aggregate
segments by month for 1996 and including the number of room nights and rate
information, and group business information for 1996 (as well as tentative and
other booking information for 1997) identifying the number of groups, the
average daily rates, the receivables by collection category, all significant
tradeouts, any special services (such as transportation or food and/or beverage
service) included in the rate or otherwise committed, and the termination dates
of the various agreements giving rise to the foregoing; and
(xvi) Such other documents or information to the extent in
Seller's possession or control as may be reasonably requested by Purchaser
no later than twenty (20) days after the execution hereof.
5.3. Review Period.
-------------
(a) Purchaser shall have until thirty (30) days following the
execution of this Agreement to notify Seller in writing of any objections
Purchaser may have to matters reflected in or concerning the Title Commitment,
the Supporting Documents, the Survey, or the UCC Searches (the "Title
Objections"). If Purchaser shall so notify Seller of Title Objections, Seller
may elect to cure and eliminate such objections within five (5) days from the
date on which Seller receives Purchaser's Title Objections (for purposes of this
sentence, "eliminate" shall not include "insuring around" unless (i) the Title
Objection has a quantifiable value of less than $100,000.00, or (ii) Purchaser,
in its sole discretion, agrees thereto). If Seller so cures, or within said
five-day period unconditionally commits in writing so to cure prior to Closing
(the "Committed Title Cure Matters"), Purchaser shall not have the right to
terminate this Agreement because of the cured Title Objections or the Committed
Title Cure Matters. If the Committed Title Cure Matters are not cured by
Closing, such failure shall be a Seller default hereunder. Any such matters to
which Purchaser does not object and any Title Objections which Seller neither
cures nor commits to be Committed Title Cure Matters shall be Permitted
Exceptions if Purchaser does not terminate this Agreement under Section 5.3(b)
below.
HOTEL PURCHASE AGREEMENT - Page 10
------------------------
(b) Purchaser shall have until forty-five (45) days following the
execution of this Agreement (the "Review Period") to notify Seller in writing if
Purchaser, in Purchaser's sole discretion, is not satisfied with the results of
any matter relating to the Hotel for any reason whatsoever (other than the
Franchisor Evaluation and other than the Title Objections which are cured or
which have become Committed Title Cure Matters under Section 5.3(a) above) or if
the REIT's Board or Directors or lender shall fail to approve this Agreement or
the Dependent Contract (below defined). Purchaser may terminate this Agreement
by giving written notice of termination to Seller at any time prior to the end
of the Review Period. If this Agreement closes, Purchaser shall be responsible
for the costs of the improvements required by the Franchisor Evaluation,
provided that if the Franchisor Evaluation results in estimated costs of
improvements in excess of four percent (4%) of gross revenues from the Hotel for
the twelve (12) full calendar month period immediately preceding the date of
this Agreement, then Seller may, at Seller's sole election, notify Purchaser in
writing, within ten (10) days of Seller's receipt of a copy of the Franchisor
Evaluation, that Seller will credit such excess against the Purchase Price at
Closing. If Seller fails to elect to credit such excess, Purchaser may
terminate this Agreement by giving written notice of termination to Seller at
any time prior to the later to occur of the end of the Review Period or ten (10)
days following the end of Seller's 10-day notification period, as above
provided. If Purchaser terminates this Agreement pursuant to this Section or
this Agreement terminates under Section 17.15 below, Seller shall be entitled to
retain and, to the extent it has not already done so, Purchaser shall deliver to
Seller a copy of all reports and studies of third parties relating to the Hotel
resulting from the inspection of the Hotel (or the portions of such reports and
studies that are specific to the Hotel) and the originals of all documents
delivered to Purchaser pursuant to Section 5.2. The ▇▇▇▇▇▇▇ Money shall be
returned to Purchaser within five (5) days after any such termination, and
neither party shall have any further rights or obligations one to the other,
except for the indemnification and repair obligation set forth in Section 5.1.
If Purchaser does not terminate this Agreement prior to the end of the Review
Period as provided herein, Purchaser shall be deemed to have waived the right to
terminate this Agreement under this Section 5.3 and shall be deemed to have
accepted and approved the condition of the Hotel subject to the Permitted
Exceptions (below defined) and the delivered items, subject to the remaining
terms of this Agreement. By Closing, Seller shall, at Seller's expense, cancel
any and all management agreements affecting the Hotel and shall pay and cause
to be released all debts, liens, and encumbrances in any way affecting the Hotel
other than the Permitted Exceptions and any other matter expressly otherwise
agreed in this Agreement.
ARTICLE 6
PERMITTED EXCEPTIONS
--------------------
6.1. Permitted Exceptions. Notwithstanding any other provision herein set
--------------------
forth, Purchaser shall not be entitled to make any objection or terminate this
Agreement on the basis of any lien, encumbrance or security interest which
Seller is to discharge contemporaneous with Closing or which are created by
Purchaser at Closing in connection with Purchaser's acquisition of the Hotel.
The agreed exceptions to title specified in the immediately preceding sentence,
together with any title exceptions, test items, or deliveries to which the
Purchaser does not object in accordance with Section 5.3 and any title
exceptions, test items, or deliveries to which Purchaser objects that are not
cured and which Purchaser is deemed to have accepted and approved in
HOTEL PURCHASE AGREEMENT - Page 11
------------------------
accordance with Section 5.3 shall be hereinafter referred to as the "Permitted
Exceptions." Permitted Exceptions also include matters described in Exhibit B,
---------
applicable building and zoning laws, regulations, and ordinances and the lien,
for taxes, assessments and governmental charges not yet due and payable;
provided that nothing in this Section 6.1 limits Purchaser's termination rights
under Section 5.3 above.
ARTICLE 7
LEASES, OCCUPANCY AGREEMENTS, FF&E LEASES, AND SERVICE CONTRACTS
----------------------------------------------------------------
7.1. Schedules. Seller hereby warrants, represents, and certifies unto
---------
Purchaser, to the best of Seller's knowledge and belief, in all material
respects (i) that the Schedule of Service Contracts, Schedule of FF&E Leases,
Schedule of Leases, and Schedule of Deposits and Utility Reservations, when
delivered, will be a true, correct, and complete list of all Service Contracts,
all FF&E Leases, all Leases, and all Deposits and Utility Reservations in effect
at that time, (ii) that the copies of the Service Contracts, FF&E Leases, and
Leases when delivered to Purchaser, will be true, complete and correct copies of
such Service Contracts, FF&E Leases, and Leases (including, without limitation,
all amendments, modifications, renewals, and extensions thereof), (iii) that
there are and will be no written or oral agreements of any kind (other than as
provided in clause (iv) below and other than guest room bookings) binding on the
Hotel or on Purchaser after Closing, other than the Service Contracts, FF&E
Leases, Leases and Occupancy Agreements, (iv) that there are and will be no
other written or oral agreements binding on the Hotel or on Purchaser after
Closing with any tenants, licensees, franchisees, concessionaires or other
persons or entities (collectively, "Tenants", and individually, "Tenant") or any
guarantors of the Tenants' obligations (collectively "Guarantors", and
individually, "Guarantor") relating to their use or occupancy other than those
permitted under Section 8.1(e) of this Agreement, (v) that the Service
Contracts, FF&E Leases, Leases and Occupancy Agreements are in full force and
effect and, to Seller's actual knowledge, no default (beyond applicable grace or
cure periods) exists thereunder and no condition exists that, with the giving of
notice or passage of time, or both, would constitute a default, (vi) that no
Tenant has made any claim of any right of offset, and (vii) that, to Seller's
actual knowledge, the information provided under Section 5.2 (xv) above, when
delivered, will reflect the information contained in the Occupancy Agreements
and guest room bookings which is neither inaccurate nor incomplete in any
material respect.. The term "Tenant" shall refer only to tenants under Leases
and not guests of the Hotel.
ARTICLE 8
OPERATION OF HOTEL
------------------
8.1. Interim Operation. Seller hereby covenants and agrees that between
-----------------
the date of this Agreement and the Closing, Seller shall (in all cases
consistent with past practices):
(a) Operate, manage, and maintain the Hotel consistent with Seller's
prior practice and as a reasonable and prudent operator of like-kind hotels in
the same competitive market would operate, manage, and maintain the Hotel,
including, without limitation, (i) using reasonable efforts to keep available
the services of its present employees at the Improvements and to preserve its
HOTEL PURCHASE AGREEMENT - Page 12
------------------------
relations with guests, suppliers and other parties doing business with Seller
with respect to the Hotel, (ii) accepting booking contracts for the use of the
Hotel facilities on terms not less favorable than the terms typically arranged
by Seller as of the date of this Agreement and retaining such bookings
consistent with prior practice, (iii) maintaining the current level of
advertising and other promotional activities for Hotel facilities, (iv)
maintaining its books of accounts and records in the usual, regular, timely,
and ordinary manner, in accordance with accounting principles applied on a basis
consistent with the basis used in keeping its books in prior years, (v)
remaining in substantial compliance with all current license and franchise
agreements, and (vi) maintaining the present level of insurance with respect to
the Hotel;
(b) Not commit waste of any portion of the Hotel affecting the value
of the Hotel in any material respect;
(c) Keep and maintain the Hotel in a state of repair and condition
consistent with the requirements of clause (a) above;
(d) Keep, observe, and perform all its obligations under the Leases,
the FF&E Leases, the Service Contracts, the Licenses (in particular, the license
agreement between Seller and Franchisor (as hereinafter defined) for the Hotel),
and all other applicable contractual arrangements relating to the Hotel;
(e) Not enter into (i) any new agreements of the nature of the
Occupancy Agreements or any amendments, modifications, renewals or extensions of
any existing Occupancy Agreements that are not consistent with Seller's prior
practice at the Hotel, or (ii) any new agreements of the nature of the Service
Contracts, FF&E Leases, or Leases or any amendments, modifications, renewals or
extensions of any existing Service Contracts, FF&E Leases, or Leases without
Purchaser's prior written consent, except that Seller shall not be required to
obtain Purchaser's consent to any new agreement or to any renewal or extension
specifically permitted under the terms of an existing Service Contract, FF&E
Lease, or Lease on terms consistent with prudent commercial practice, provided
that any such new agreement or renewal or extension shall be terminable without
penalty on not more than thirty (30) days' notice, for Service Contracts and
FF&E Leases, and shall not exceed a term of six (6) months, for Leases, or in
any case cost in excess of $10,000.00, without Purchaser's prior written
consent, such consent not to be unreasonably withheld or delayed; provided that
Seller shall deliver to Purchaser a copy of any such new agreement or renewal or
extension whether or not such consent is required under this Section 8.1(e) at
the time that Seller updates the Schedules as provided in Section 9.3;
(f) Not cause or permit the removal of FF&E from the Hotel except for
the purpose of discarding and replacing, where needed or appropriate, worn
items, and timely make all repairs, maintenance, and replacements to keep the
Hotel and all FF&E in good operating condition;
(g) Keep Supplies adequately stocked, consistent with Seller's prior
practice, as if the sale of the Hotel hereunder were not to occur, including
without limitation, maintaining linens and bath towels and washcloths at least
at a 3-par level for all guest rooms in the Hotel;
HOTEL PURCHASE AGREEMENT - Page 13
------------------------
(h) Not grant any bonus, free rent, rebate or other concession to any
present or future Tenant, not otherwise specifically granted in the operative
Lease, without Purchaser's prior written consent;
(i) Advise Purchaser promptly of any litigation, arbitration, or
administrative hearing before any court or governmental agency concerning or
affecting the Hotel which is instituted or threatened after the date of this
Agreement;
(j) [Deleted]
(k) Comply with all matters of the nature of the matters described in
subsections 9.2(j) and (k) below;
(l) Not sell or assign or enter into any agreement to sell or assign,
or to create or permit to exist (as of Closing) any lien or encumbrance (other
than a Permitted Exception) on, the Hotel or any portion thereof;
(m) Not allow any License or other right currently in existence with
respect to the operation, use, occupancy or maintenance of the Hotel to expire,
be canceled or otherwise terminated without Purchaser's prior written consent;
(n) Except to the extent consistent with prior practice, not cancel
any existing booking contracts for the use of Hotel facilities or new booking
contracts obtained by Seller after the date of this Agreement; and
(o) Pay or cause to be paid all taxes, assessments and other
impositions levied or assessed on the Hotel or any part thereof prior to the
date on which the payment thereof is due.
8.2. Mechanics Liens. Seller hereby represents, warrants, and covenants
---------------
that all work required to be done prior to the Closing Date under the terms of
any Lease or License has been or will be performed and fully paid for by Seller
prior to the Closing Date in accordance with the terms of such Lease or License,
and all mechanics' and materialmen's liens arising from any labor or material
furnished prior to the Closing Date will be discharged or bonded so as to be
omitted from Purchaser's Title Policy.
8.3. Notices of Violation. Seller hereby covenants and agrees that all
--------------------
notices of violation of restrictions, easements or similar matters issued by any
third party and all notices of violation of federal, state or municipal laws,
ordinances, orders, regulations or requirements issued, filed, or served by any
governmental agency having jurisdiction over the Hotel against or affecting the
Hotel, in either case which are issued on or before the Closing Date and of
which Seller has actual knowledge ("Notices of Violation") shall be promptly
disclosed to Purchaser.
8.4. Third Party Consents. Prior to the Closing Date, Seller shall,
--------------------
provided there is no material expense to Seller, use reasonable good faith
efforts and cooperate with Purchaser to obtain
HOTEL PURCHASE AGREEMENT - Page 14
------------------------
all third party consents and approvals required in order for Purchaser to
purchase the Hotel but obtaining such consents shall not be a condition
precedent to Purchaser's obligations hereunder.
8.5. Estoppel Letters. Seller shall employ reasonable good faith efforts
----------------
to obtain from each Tenant (as defined in Section 7.1 above) under any Lease
affecting the Hotel, and to deliver to Purchaser not less than five (5) days
before the expiration of the Review Period, an estoppel letter substantially in
the form attached to this Agreement as Exhibit 8.5. In the event that Seller is
-----------
unable to obtain an estoppel letter from any such Tenant by said date, Seller
shall deliver to Purchaser a certificate in which Seller certifies, to the best
of Seller's actual knowledge, the information required by the form of estoppel
letter attached to the Agreement as Exhibit 8.5.
-----------
ARTICLE 9
REPRESENTATIONS AND COVENANTS
-----------------------------
9.1. Representations by Purchaser. Purchaser hereby represents and
----------------------------
warrants unto Seller that each and every one of the following statements is
true, correct and complete in every material respect as of the date of this
Agreement and will be true, correct and complete as of the Closing Date:
(a) Purchaser is duly organized, validly existing and in good
standing under the laws of the State of Delaware, and, other than qualifying to
do business in the state where the Hotel is located, has full right, power and
authority to enter into this Agreement and to assume and perform all of its
obligations under this Agreement; and the execution and delivery of this
Agreement and the performance by Purchaser of its obligations under this
Agreement require no further action or approval of Purchaser's shareholders,
directors, members, managers or partners (as the case may be) or of any other
individuals or entities in order to constitute this Agreement as a binding and
enforceable obligation of Purchaser. The individuals and/or entities signing
below in the indicated representative capacities are fully authorized so to act.
(b) Purchaser is not a foreign entity, foreign corporation, foreign
partnership, foreign trust or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations).
(c) To Purchaser's actual knowledge, none among the entry into,
performance of, or compliance with this Agreement by Purchaser has resulted, or
will result, in any violation of, default under, or acceleration of any
obligation under any existing corporate charter, certificate of incorporation,
bylaw, articles of organization, limited liability company agreement or
regulations, partnership agreement, mortgage indenture, lien agreement, note,
contract, permit, judgment, decree, order, restrictive covenant, statute, rule
or regulation applicable to Purchaser.
(d) There is no action, suit or proceeding pending, or to Purchaser's
actual knowledge threatened, against or affecting the Purchaser in any court or
before any arbitrator or before any governmental agency or other instrumentality
which (a) in any manner raises any question
HOTEL PURCHASE AGREEMENT - Page 15
------------------------
affecting the validity or enforceability of this Agreement or any other
agreement or instrument to which the Purchaser is a party or by which it is
bound and that is to be used in connection with, or is contemplated by, this
Agreement, (b) could materially and adversely affect the business, financial
position or results of operations of the Purchaser, (c) could materially and
adversely affect the ability of the Purchaser to perform its obligations
hereunder, or under any document to be delivered pursuant hereto, (d) could
create a lien on the Hotel, any part thereof or any interest therein or (e)
could adversely affect the Hotel, any part thereof or any interest therein or
the use, operation, condition or occupancy thereof.
(e) No Act of Bankruptcy (below defined) has occurred with respect to
the Purchaser. "Act of Bankruptcy" means that a party hereto or any general
partner or member 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 an involuntary proceeding or case shall be commenced in any
court of competent jurisdiction seeking (1) the liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of debts, of such
party or general partner or managing member, (2) the appointment of a receiver,
custodian, trustee or liquidator for such party or general partner or managing
member 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), judgment, or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, in any such case for a period of 60
consecutive days.
9.2. Representations by Seller. Seller hereby represents and warrants unto
-------------------------
Purchaser that each and every one of the following statements is true, correct
and complete in every material respect as of the date of this Agreement and,
except to the extent that there are Subsequent Developments as contemplated by
Section 9.3 below, will be true, correct and complete as of the Closing Date
provided that each such representation and warranty is subject to, limited by,
and conditioned upon the information disclosed to Purchaser pursuant to the
terms of this Agreement:
(a) Seller is duly organized, validly existing and in good standing
under the laws of the State of North Carolina, and has full right, power and
authority to enter into this Agreement and to assume and perform all of its
obligations under this Agreement, and the execution and delivery of this
Agreement and the performance by Seller of its obligations under this Agreement
require no further action or approval of Seller's shareholders, directors,
members, managers or
HOTEL PURCHASE AGREEMENT - Page 16
------------------------
partners (as the case may be) or of any other individuals or entities in order
to constitute this Agreement as a binding and enforceable obligation of Seller.
The individuals and/or entities signing below in the indicated representative
capacities are fully authorized so to act. No person or entity owns any interest
in the Hotel other than Seller.
(b) Seller is not a foreign entity, foreign corporation, foreign
partnership, foreign trust or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations).
(c) To Seller's actual knowledge, and except to the extent that
certain items are to be discharged as of the Closing, none among the entry into,
the performance of, or compliance with this Agreement by Seller has resulted, or
will result, in any violation of, default under, or acceleration of any
obligation under any existing corporate charter, certificate of incorporation,
bylaw, articles of organization, operating agreement, regulations, partnership
agreement, mortgage indenture, lien agreement, note, contract, permit, judgment,
decree, order, restrictive covenant, statute, rule or regulation applicable to
Seller or to the Hotel which will, in any one case or in the aggregate,
materially and adversely affect the ownership or operation of the Hotel or
Seller's ability to consummate the transactions contemplated hereby.
(d) No Act of Bankruptcy has occurred with respect to Seller.
(e) There are no union contracts or collective bargaining agreements
with respect to any employees at the Hotel, and there are no leases, management
agreements, leasing agent's agreements, equipment leases, building service
agreements, maintenance contracts, suppliers contracts, warranty contracts,
operating agreements, or other agreements (i) to which Seller is a party or an
assignee, or (ii) binding upon the Hotel, relating to the ownership, occupancy,
operation or maintenance of the Land, Improvements, FF&E or Supplies, except for
(I) the Warranties previously disclosed to Purchaser, (II) guest or room
bookings and Occupancy Agreements, and (III) those Service Contracts, Leases,
and FF&E Leases as set forth in the Schedule of Service Contracts, Schedule of
Leases, and Schedule of FF&E Leases. With respect to all of the foregoing other
than guest or room bookings and Occupancy Agreements, to Seller's actual
knowledge, no default (beyond applicable grace or cure periods) exists.
(f) Seller has received no notice, and has no actual knowledge, that
it lacks any permit, license, certificates or authority necessary for the
present use and occupancy of the Improvements.
(g) No party has any right or option to acquire the Hotel or any
portion thereof, other than Purchaser.
(h) To Seller's actual knowledge, there are no:
(i) pending arbitration proceedings or unsatisfied arbitration
awards, or judicial proceedings or orders respecting awards, which might
become a lien on the Hotel;
HOTEL PURCHASE AGREEMENT - Page 17
------------------------
(ii) pending unfair labor practice charges or complaints, labor
disputes, or unsatisfied unfair labor practice orders or judicial
proceedings or orders with respect thereto;
(iii) pending charges or complaints with or by city, state or
federal civil or human rights agencies, unremedied orders by such agencies
or judicial proceedings or orders with respect to obligations under city,
state or federal civil or human rights or antidiscrimination laws or
executive orders;
(iv) condemnation proceeding pending or threatened with regard
to all or any part of the Hotel; or
(v) other pending, threatened or actual litigation claims,
charges, complaints, petitions or unsatisfied orders by or before any
administrative agency or court which affects the Hotel or might become a
lien on the Hotel,
(all collectively, the "Pending Claims") which Pending Claims could materially
adversely affect the financial condition or operation of the Hotel or Seller's
ability to perform under this Agreement.
(i) Seller has received no Notice of Violations.
(j) To Seller's actual knowledge, Seller and the Hotel are in
compliance in all material respects (i) with all terms and conditions of all
notices, permits, licenses, registrations, certificates of occupancy,
applications, consents, zoning and/or building code restrictions, variances,
notices of intent, and/or other authorizations which are required for the use or
operation of the Hotel, (ii) with all applicable laws, rules, regulations,
ordinances and orders in effect as of the date hereof promulgated by any
federal, state or local executive, legislative, judicial, regulatory or
administrative agency, board or authority, or any applicable judicial or
administrative decision that relate to the Hotel, and (iii) with all
limitations, requirements, restrictions, conditions, standards, prohibitions,
schedules and timetables contained in any of the foregoing. Seller expressly
makes no representation or warranty with respect to compliance of the Hotel with
the Americans with Disability Act of 1990, as amended, except that Seller has
received no Notice of Violation with respect thereto.
(k) With respect to environmental matters, Seller has no actual
knowledge: (i) of the presence of any "Hazardous Substances" (as defined below)
on or in the Hotel, or any portion thereof, except in strict accordance with
applicable law, or, (ii) of any spills, releases, discharges, or disposal of
Hazardous Substances that have occurred or are presently occurring on or onto
the Hotel, or any portion thereof, or (iii) of the presence of any PCB
transformers serving, or stored on, the Hotel, or any portion thereof, and
Seller has no actual knowledge of any failure to comply with any applicable
local, state or federal environmental laws, regulations, ordinances or
administrative or judicial orders relating to the generation, recycling, reuse,
sale, storage, handling, transport and disposal of any Hazardous Substances with
respect to the Hotel. As used herein, "Hazardous Substances" shall mean any
substance or material whose presence, nature, quantity or intensity of
existence, use, manufacture, disposal, transportation, spill, release or effect,
is either (1) regulated,
HOTEL PURCHASE AGREEMENT - Page 18
------------------------
monitored or defined as a hazardous or toxic substance or waste by a
governmental authority, or (2) a basis for liability of the owner of the Hotel
to any governmental authority or third party, and "Hazardous Substances" shall
also include, but not be limited to, hydrocarbons, petroleum, gasoline, crude
oil, or any products, by-products or components thereof, and asbestos.
(l) To Seller's actual knowledge, the use by Seller of any of the
Tradenames does not infringe any United States or state trademark, service ▇▇▇▇,
or tradename laws existing at the Closing, or constitute actionable
appropriation of rights with respect to any other person, business or entity.
(m) All of Seller's or its manager's employees at the Hotel shall be
terminated as of the Closing Date. Purchaser will in no way be obligated for
any employees, or union contracts with respect to employees, employed by Seller
or its manager with regard to the Hotel either before or after the Closing. In
particular, neither Seller nor its manager will, between the date hereof and the
date of Closing, enter into any new employment or union contracts or agreements
or hire any new employees that will be binding on Purchaser on or after the
Closing. Purchaser will not be obligated to give or pay any amount to any
employee of Seller or Seller's manager. Purchaser shall not have any liability
under any pension or profit sharing plan that Seller or its manager may have
established with respect to the Hotel or their or its employees. It is
expressly agreed that Seller shall be and remain liable for all accrued
salaries, wages, bonuses, profit-sharing, and other compensation, vacation, sick
leave, seniority, worker's compensation, and welfare benefits, deferred
compensation, savings, pension, profit sharing, 401(k), and retirement plans,
and insurance and other benefits of all employees of the Hotel whether or not
re-employed by Purchaser and for all liabilities of whatever kind (including
without limitation those arising under COBRA) with respect to all employees of
the Hotel who are not employed by Purchaser, and Seller hereby indemnifies
Purchaser with respect to the foregoing. Except as contemplated in Section 9.6
with respect to the personnel expressly identified therein, Seller shall not be
permitted to contact or engage in discussions with Seller's or manager's
employees except in conjunction with the shadow management contemplated in
Section 9.5, and then such contact and discussions shall be pursuant to a human
resources program and procedure with respect to the rehiring of such employees
that shall be consistent with Purchaser's standard rehiring program, the
procedures of which shall be disclosed to ▇▇▇▇▇ ▇▇▇▇▇▇ or his designee in
advance, and which program shall be conducted with the least interruption to
Seller's business as is practicable.
(n) To Seller's actual knowledge, there is no material defect in the
condition of the Hotel, or any portion thereof, which has not been corrected or
which will materially impair the operation of the Hotel and the Hotel will be in
materially good operating condition on the Closing Date.
(o) To Seller's actual knowledge, neither the Hotel nor any portion
thereof is (i) listed, or eligible to be listed, in any national, state or local
register of historic places or areas, or (ii) located within any designated
district or area in which the permitted uses of land located therein are
restricted by regulations, rules or laws other than those specified under local
zoning ordinances.
HOTEL PURCHASE AGREEMENT - Page 19
------------------------
(p) To Seller's actual knowledge, except as provided in the Permitted
Exceptions, there are no, and it has not received any written notice of, any
special taxes or assessments relating to the Hotel or any part thereof or any
planned public improvements that may result in a special tax or assessment
against the Hotel and any of same which are Permitted Exceptions shall be
current as of the Closing Date. Otherwise, all real estate, personal property,
sales, and other taxes assessed against the Seller in connection with the Hotel
or the operation of the Hotel which are due and payable have been paid in full
or will be paid in full by Seller by the Closing Date.
(q) To the best knowledge and belief of the Identified Persons (as
defined in Section 9.9 below), except as expressly set forth herein, all of
Seller's financial information delivered to Purchaser hereunder is correct and
complete in all material respects and presents accurately in all material
respects the results of the operations of the Hotel for the periods indicated.
Since the date of the last financial statement included in such financial
information, there has been no material adverse change in the financial
condition or in the operations of the Hotel.
(r) Not in limitation on any other provision hereof, there are no
cross-use, mutual access or similar agreements of any kind binding upon Seller
or the Hotel and benefitting any other person, entity, or property.
(s) To the best knowledge and belief of the Identified Persons,
Franchisor has not issued to Seller any written inspection reports or written
deficiency reports with respect to the Hotel.
9.3. Subsequent Developments. After the date of this Agreement and until
-----------------------
the Closing Date, Seller shall keep Purchaser fully informed of all subsequent
developments of which Seller has knowledge ("Subsequent Developments") which
would cause any of Seller's representations or warranties contained in this
Agreement to be no longer accurate in any material respect. Without limiting
the foregoing, Seller shall deliver to Purchaser (i) within five (5) days after
the last day of each week through the week of Closing (facsimile delivery being
expressly approved), summaries of occupancies, rates, and total food and
beverage volumes, (ii) within twenty (20) days after the last day of each
calendar month through the month of Closing, updated Financial Statements, and
(iii) within twenty (20) days after the last day of each calendar month through
the month of Closing, an update, if any is necessary, of the Schedule of Service
Contracts, the Schedule of FF&E Leases, the Schedule of Leases, and the Schedule
of Deposits and Utility Reservations, along with a true copy of any new written
agreements described therein.
9.4. Limitation on Further Sales Efforts. Seller shall not execute other
-----------------------------------
offers prior to the termination of this Agreement in accordance with its terms
and shall not market the Hotel after the Review Period has expired and Purchaser
is fully committed to the transaction as contemplated herein, subject to the
terms hereof.
9.5. Shadow Management. Solely for the purpose of assisting Purchaser in
-----------------
connection with Purchaser's transition to ownership, Seller shall permit
Purchaser to establish and maintain a shadow management operation with respect
to the Hotel no earlier than two (2) weeks prior to the
HOTEL PURCHASE AGREEMENT - Page 20
------------------------
Closing Date. Personnel from Purchaser's shadow management operation shall have
reasonable access during normal business hours to all books, records and other
information in the possession or control of Seller or its agents concerning the
Hotel and shall have the right (at Purchaser's expense) to establish duplicate
books and records in order to effect a smooth transition in the ownership and
management of the Hotel; provided, however, that Purchaser and its shadow
management operation and employees (a) shall not unreasonably interfere with the
normal management and operation of the Hotel, (b) shall hold all information
acquired from such books and records confidential in accordance with the
provisions of this Agreement, (c) shall repair any damage to the physical
condition of the Hotel caused by Purchaser or its agents in any such shadow
management operation, and (d) shall not be deemed to have assumed management
responsibilities prior to Closing by virtue of such shadow management.
9.6. Access to Records and Financial Information. Purchaser and
-------------------------------------------
Purchaser's authorized representatives, auditors, agents, employees and lenders
shall have the right, prior to the end of the Review Period, at Purchaser's sole
cost, risk and expense, to enter upon and pass through the Hotel during normal
business hours and upon at least 48 hours prior notice to ▇▇▇▇▇ ▇▇▇▇▇▇ or his
designee to examine and inspect the then existing books, records, surveys,
plans, specifications, permits, certificates of occupancy and other files that
are relevant to the management, ownership, operation, use, occupancy,
construction or leasing of the Hotel, which are in Seller's possession or
control, and which have not been otherwise provided to Purchaser as required
elsewhere herein. No access will be allowed with respect to the Occupancy
Agreements or guest room bookings other than the information required in Section
5.2(xv) above. In addition, Purchaser may, upon at least 48 hours prior notice
to ▇▇▇▇▇ ▇▇▇▇▇▇ or his designee, have its agents, employees or auditors conduct
an audit (the "Audit") of the books and records of the Hotel which Audit shall
be performed during the Review Period and shall be performed as one generally
continuous inspection and not subject to periods of interruption or delay the
intention being that Purchaser and its representatives, auditors, agents,
employees and lenders will make their best efforts to minimize disruption of
Seller's business while still being allowed the opportunity fully to review,
examine and inspect all such matters. In connection with Purchaser's
inspections and studies during the Review Period, upon at least 48 hours prior
notice to ▇▇▇▇▇ ▇▇▇▇▇▇ or his designee, Purchaser may engage in discussions with
the Hotel's General Manager, Controller, Director of Engineering, and Director
of Marketing but is not to engage in discussions with any other Hotel personnel
without the specific prior approval of ▇▇▇▇▇ ▇▇▇▇▇▇ or his designee which
approval for, but only for, other management personnel will not be unreasonably
withheld. Purchaser and its representatives and employees shall not
unreasonably interfere with the operation of the Hotel or the right to privacy
of guests and patrons of the Hotel. Further, and not in limitation of Section
5.2(ii) above, Purchaser's representatives shall have access to all financial
and other information relating to the Hotel sufficient to enable them to prepare
audited financial statements in conformity with Regulation S-X of the Securities
and Exchange Commission (the "SEC") and to enable them to prepare a registration
statement, report or disclosure statement for filing with the SEC on behalf of
the REIT and/or its affiliates. Prior to the end of the Review Period, Seller
shall also provide to Purchaser's representatives a signed representation letter
sufficient to enable an independent public accountant to render an opinion on
the financial statements related to the Hotel; provided, however, that any
information provided by Seller in such letter shall be limited to Seller's
actual knowledge and shall not expand the representations and
HOTEL PURCHASE AGREEMENT - Page 21
------------------------
warranties made by Seller in this Agreement. During the Review Period, Seller
and Purchaser shall agree to the form of such letter.
9.7. Seller's Indemnity. Seller hereby indemnifies and agrees to hold
------------------
Purchaser harmless of and from all liabilities, losses, damages, costs, expenses
(including reasonable attorneys' fees) which the Purchaser may suffer or incur
by reason of any debt, act or cause of action occurring or accruing prior to the
Closing Date and arising from the ownership or operation of the Hotel prior to
the Closing Date, including but not limited to any claims by employees of Seller
or third parties covered by insurance carried by Seller.
9.8. Purchaser's Indemnity. Purchaser hereby indemnifies and agrees to
---------------------
hold Seller harmless of and from all liabilities, losses, damages, costs,
expenses (including reasonably attorneys' fees) which the Seller may suffer or
incur by reason of any debt, act or cause of action occurring and accruing
subsequent to the Closing Date and arising from the ownership or operation of
the Hotel by Purchaser subsequent to the Closing Date, including but not limited
to any claims by employees of Purchaser or third parties covered by insurance
carried by Purchaser.
9.9. Seller's Actual Knowledge. For the purpose of this Agreement, the
-------------------------
phrase "Seller's knowledge" or "Seller's actual knowledge" means the actual
knowledge of the President of City Hotels USA and Heritage Hotel, Inc., the
President of C.H. Corp., the Senior Vice President and Director of Operations of
City Hotels USA, the Chief Financial Officer of City Hotels USA, and the Hotel's
General Manager ("Identified Persons"). "Actual knowledge" shall mean (a) facts
that are actually known to the Identified Persons and shall not include facts
that on any theory of law might be attributable to Seller or the Identified
Persons by reason of a principal-agent or other similar relationship but which
are not actually known to the Identified Persons; and (b) without inquiry, so
that neither Seller nor the Identified Persons shall be required to have
performed any due diligence, other than review of their files as to the subject
matter of the representations or warranties contained herein, with respect to
the matters covered by this Agreement.
9.10. Investigation. Purchaser acknowledges and agrees that, except as
-------------
expressly otherwise provided in this Agreement, it is relying on its own
independent factual, physical, and legal inspections and examinations of the
Hotel. Except as otherwise provided in this Agreement, Purchaser shall accept
the Hotel "AS IS", and "with all faults," and subject only to the terms and
conditions of this Agreement. EXCEPT AS PROVIDED IN THIS AGREEMENT, ALL EXPRESS
AND IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
ARE HEREBY DISCLAIMED. Purchaser acknowledges that Seller has not made any
representation, warranty, or statement, or held out any inducements to
Purchaser, other than those expressly made in this Agreement, and Seller shall
not be liable or bound in any manner by express or implied warranties,
guarantees, promises, statements, representations or information pertaining to
the Hotel, its physical or structural condition, permits, licenses, leases,
rents, income, cash flow, gross income, net income, profits, earnings,
occupancies, expenses or operations, or any other matter or thing, except as
specifically set forth in this Agreement. Purchaser acknowledges that Seller
shall not be bound or liable in any manner by any verbal or written statements,
representations or any information pertaining to the Hotel, furnished or claimed
to have been furnished by any person or
HOTEL PURCHASE AGREEMENT - Page 22
------------------------
party, agent, contractors, engineer, consultant or employee, unless the same is
specifically set forth herein, and the parties acknowledge that all prior
communications and negotiations between the parties have been merged into this
Agreement.
9.11. Sign. Prior to Closing, Seller shall make its best efforts to cause
----
the Hotel sign that is currently in storage in conjunction with certain street
improvements to be replaced at the Hotel. In the event that such sign has not
been replaced prior to Closing, in conjunction with conveyance by Seller to
Purchaser of said sign as part of the Hotel (with possession subject to the
possession of the party currently in possession), Seller shall assign all of its
rights and claims with respect to said sign to Purchaser.
ARTICLE 10
CONDITIONS PRECEDENT TO THE CLOSING
-----------------------------------
Purchaser's obligations to consummate the Closing are subject to
Purchaser's termination rights under Section 5.3 prior to the end of the Review
Period and to the timely satisfaction of each and every one of the conditions
and requirements set forth in this Article 10, all of which shall be conditions
precedent to Purchaser's obligations under this Agreement. The notice and cure
provisions of Section 13.2 apply to this Article 10. If the conditions of
Sections 10.1 or 10.2 fail, Article 13 shall apply. If the condition of Section
10.3 fails for any reason, Purchaser may terminate this Agreement, the ▇▇▇▇▇▇▇
Money shall be returned to Purchaser within five (5) days after any such
termination, and neither party shall have any further rights or obligations one
to the other, except for the repair obligation set forth in Section 5.1.
Notwithstanding the foregoing, Purchaser, in its sole discretion, may waive any
such condition by notice to Seller.
10.1. Seller's Obligations. Seller shall have performed or shall perform
--------------------
concurrently with Closing all obligations of Seller hereunder which are to be
performed prior to or concurrently with Closing.
10.2. Seller's Representations and Warranties. Seller's representations
---------------------------------------
and warranties set forth in Section 9.2, exclusive of any Subsequent
Developments that Purchaser does not waive in writing, shall be true and correct
in all material respects as if made again on the Closing Date; provided that if
a change in circumstances not expressly contemplated by this Agreement and
relating to one or more representation or warranty is not the result of any act
or omission of Seller and does not result in a material diminution in the value
of the Hotel, then Purchaser shall be deemed to have waived such change.
10.3. Title Policy. Seller shall be able and willing to deliver title to
------------
the Land and Improvements which is insurable in accordance with and pursuant to
the Title Commitment as approved by Purchaser under the terms of this Agreement,
subject only to the Permitted Exceptions.
10.4. Franchisor and Lender Conditions. Franchisor has rights in the
--------------------------------
nature of first refusal, and the first trust lender with respect to the Hotel
has the right to prohibit pre-payment of its financing. Seller shall in good
faith diligently seek Franchisor's waiver of such right and such
HOTEL PURCHASE AGREEMENT - Page 23
------------------------
lender's waiver of such prohibition and, to that end, shall immediately apply
for such waivers seeking written response within two weeks of the date of this
Agreement. Failure by Seller to deliver such waivers, in written form, to
Purchaser by the end of the Review Period shall be deemed to be a failure of the
conditions of this Section 10.4, and this Agreement and the Dependent Contract
shall automatically terminate under the terms of Section 5.3(b) above unless,
prior to the end of the Review Period, Purchaser, in a written notice to Seller,
shall have waived the condition of this Section 10.4.
ARTICLE 11
CLOSING AND CLOSING DOCUMENTS
-----------------------------
11.1. Closing. The consummation and closing (the "Closing") of the
-------
transaction contemplated under this Agreement shall take place at the offices of
the Title Company or such other place as is mutually agreeable to the parties
on, or at Purchaser's election upon ten (10) days notice before, January 8,
1997, though in no event, unless Seller and Purchaser mutually agree, before
January 2, 1997 (the "Closing Date"), or as otherwise set by agreement of the
parties.
11.2. Seller's Deliveries. At the Closing and at Seller's sole cost and
-------------------
expense, Seller shall deliver the following to the Title Company for delivery
to, or processing in accordance with the instructions of, Purchaser in addition
to all other items required to be delivered to Purchaser by Seller:
(a) Seller's Deed. Seller's Deed duly executed and acknowledged by
-------------
Seller;
(b) ▇▇▇▇ of Sale. The ▇▇▇▇ of Sale duly executed and acknowledged
------------
by Seller;
(c) Assignment and Assumption of Leases, FF&E Leases, Service
---------------------------------------------------------
Contracts and Occupancy Agreements. An Assignment and Assumption of all of the
----------------------------------
Leases, FF&E Leases, Service Contracts, and Occupancy Agreements, in a form
reasonably acceptable to, and duly executed by, both Purchaser and Seller
provided that it shall in any event contain the concepts set forth in Sections
9.7 and 9.8 above (the "Assignment");
(d) FIRPTA Affidavit. An affidavit from Seller in form and
----------------
substance acceptable to Purchaser, as required by Section 1445 of the Internal
Revenue Code, specifying (i) that Seller is not a foreign entity, foreign
corporation, foreign partnership, foreign trust or foreign estate (as those
terms are defined in the Internal Revenue Code and Income tax regulations), (ii)
Seller's taxpayer identification number or U.S. employer identification number,
(iii) Seller's office address, and (iv) such other matters as Purchaser may
reasonably require in order to satisfy itself that no withholding is required
under Section 1445 of the Internal Revenue Code including an indemnity against
any claim for taxes which should have been withheld;
(e) Vehicle Titles. The necessary certificates of titles duly
--------------
endorsed for transfer together with any required affidavits and other
documentation necessary for the transfer of title from Seller to Purchaser of
any motor vehicles used in connection with the Hotel's operations;
HOTEL PURCHASE AGREEMENT - Page 24
------------------------
(f) Authority Documents. Evidence satisfactory to Purchaser that the
-------------------
person or persons executing the closing documents on behalf of Seller have full
right, power and authority to do so, and the following documentation: (i) the
Certificate of the Secretary (or similarly appointed partner or member) of
Seller certifying attached copies of the articles of incorporation or
organization, By-Laws, operating agreement, partnership agreement, or other
organizational documentation, and enabling resolutions of Seller and all entity
constituents of Seller as true and correct, unamended, and continuing, and of
the incumbency of its or their officers, partners, or members, (ii) Certificates
of Existence and Good Standing from the Secretary of State of Seller's
incorporation or organization, and (iii) from the Secretary of State of the
state where the Hotel is located, a Certificate of Existence and Qualification
to Do Business in such state;
(g) [Deleted]
(h) Miscellaneous. Such other instruments as are customarily
-------------
executed in the county and State where the Hotel is located to effectuate the
conveyance of property similar to the Hotel, with the effect that, after the
Closing, Purchaser will have succeeded to all of the rights, titles, and
interests of Seller related to the Hotel and Seller will no longer have any
rights, titles, or interests in and to the Hotel. Such instruments shall
include, if appropriate, any documents required effectively to transfer the
Utility Reservations by Seller to Purchaser;
(i) Plans, Keys, and Records. To the extent not previously delivered
------------------------
to and in the possession of Purchaser, all Plans and Specs, all keys, access
cards, and combinations for the Hotel (which shall be properly tagged for
identification), all Records, and all Licenses;
(j) Original Documents. To the extent in Seller's possession or
------------------
control, originals (or copies if no Originals exists) of all of the documents
and agreements covered by the foregoing that have not already been delivered to
Purchaser and all Occupancy Agreements;
(k) Updates. A complete list of all advance room reservations,
-------
functions and the like, in reasonable detail specified by Purchaser;
(l) Estoppel Letters. Either the estoppel letters or Seller's
----------------
certificates as described in Section 8.5 above together with written notice to
all Tenants under assumed Leases of the assignment of its Lease to Purchaser
hereunder; and
(m) Ratings. To the extent permitted under applicable law, documents
-------
of transfer necessary to transfer to the Purchaser Seller's employment rating
for workmens' compensation and state unemployment tax purposes.
(n) Termination of Agreements. Fully executed and effective
-------------------------
terminations of all management agreements with respect to the Hotel.
HOTEL PURCHASE AGREEMENT - Page 25
------------------------
On the Closing Date, Seller shall deliver to Purchaser possession of the Hotel
free and clear of all tenancies of every kind and parties in possession, except
for the Tenants under the Leases and guests in the Hotel, and with all parts of
the Hotel (including, without limitation, the Improvements and FF&E) in
substantially the same condition as the same were on the date of this Agreement,
normal wear only excepted.
11.3. Purchaser's Deliveries. At the Closing and at Purchaser's sole cost
----------------------
and expense, Purchaser shall deliver the following to the Title Company for
delivery to Seller:
(a) Purchase Price. The Purchase Price, plus or minus the
--------------
adjustments to be made at the Closing in accordance with the terms of this
Agreement;
(b) Assignment. The Assignment;
----------
(c) Authority Documents. Evidence satisfactory to Seller that the
-------------------
person or persons executing the closing documents on behalf of Purchaser have
full right, power and authority to do so; and
(d) Miscellaneous. Such other instruments as are customarily
-------------
executed by the purchaser in the county and State where the Hotel is located to
effectuate the purchase of property similar to the Hotel.
11.4. Prorations. All income and expenses with respect to the Hotel, and
----------
applicable to the period of time before and after Closing determined in
accordance with sound accounting principles consistently applied, shall be
allocated between Seller and Purchaser as set forth herein. Unless otherwise
explicitly provided in this Agreement, Seller shall be entitled to all income
and responsible for all expenses for the period of time up to but not including
the Closing Date, and Purchaser shall be entitled to all income and responsible
for all expenses for the period of time from, after and including the Closing
Date. At Closing, the following items of revenue and expense shall be prorated,
adjusted and appropriated as of 12:01 A.M. (except as otherwise provided) on the
Closing Date:
(a) Hotel Taxes. Real estate taxes, personal property or use
-----------
taxes, assessments (special or otherwise), and sewer rents, on the basis of the
best available estimates for such taxes, assessments and rents that will be due
and payable on the Hotel for the calendar year in which the Closing occurs. As
soon as the exact amount of such taxes, assessments and rents for such calendar
year is ascertained, Seller and Purchaser shall readjust the amounts thereof to
be paid by each party to the end that Seller shall pay for those such taxes,
assessments and rents attributable to the period of time prior to the Closing
Date, and Purchaser shall pay for same which are attributable to the Closing
Date and thereafter.
(b) Operating Costs. All costs and expenses of operating the
---------------
Hotel, including without limitation amounts paid or payable under the Service
Contracts, the FF&E Leases, the Leases, the Occupancy Agreements, and the
Licenses;
HOTEL PURCHASE AGREEMENT - Page 26
------------------------
(c) Lease Rents. Rents under Leases and other revenues as and when
-----------
collected;
(d) Revenues. Guest, convention, room, food, beverage, and all
--------
other charges and revenues for services rendered and the operation of all
departments of the Hotel, including, but not limited to, advance payments under
booking agreements for rooms, facilities and services of the Hotel and any other
revenues, as and when collected, provided, however, that food, room service and
restaurant revenue shall be apportioned as of the closing of dinner service
hours at each restaurant on the evening preceding the Closing Date, and bar
revenues shall be read, measured (and tapes preserved) and apportioned as of the
closing of such bars in the morning of the Closing Date (or in the preceding
evening, if applicable) and provided further that room rental receipts through
the night before Closing shall belong to Seller, though Seller shall be
responsible for all room maid service costs for such night. All cash, checks,
and other funds, and all other notes, security and other evidence of
indebtedness located at the Hotel on the Closing Date and balances on deposit to
the credit of the Seller with banking institutions are and shall remain the
property of the Seller and are not included in this sale. The amount of the Cash
and Equivalents shall be added to the Purchase Price;
(e) Miscellaneous. Fees and expenses for music, entertainment,
-------------
trade association dues, trade subscriptions, coin machine income, and washroom
and checkroom income;
(f) Deposits. Purchaser shall receive a cash credit in an amount
--------
equal to the sum of all prepaid rentals and all security deposits, utility
deposits, cleaning fees and deposits and other deposits paid under any Lease and
not properly applied as of the Closing to a monetary obligation of the related
Tenant; and
(g) Sales Taxes. All sales, use and occupancy taxes, if any, due
-----------
or to become due in connection with revenues received from the Hotel prior to
the time of proration as set forth herein, and all sales, use and occupancy
taxes, if any, payable in connection with any of the transactions contemplated
by this Agreement will be paid by Seller. Seller shall be entitled to receive
any rebates or refunds on such taxes paid by Seller prior to the Closing.
11.5. Document Preparation and Closing Costs. The cost of preparing or
--------------------------------------
obtaining documents to be delivered by Purchaser to Seller pursuant to this
Agreement and Purchaser's attorney's fees and expenses shall be paid by
Purchaser. The cost of preparing or obtaining documents to be delivered by
Seller to Purchaser pursuant to this Agreement and Seller's attorneys fees and
expenses shall be paid by Seller. If Closing occurs hereunder, Purchaser shall
pay one-half, but in no event more than $10,715.00, of the Title Company's
escrow fees and all transfer and recording fees and taxes, Title Policy premiums
for the ALTA comprehensive coverage Owner Policy of Title Insurance pursuant to
the Title Commitment in the amount of the Purchase Price (any additional
endorsements and any loan title policy shall be Purchaser's expense), Survey
costs, all transfer, assumption and/or assignment fees and charges imposed by
any party with whom Seller has privity having an interest in the Hotel (other
than for Purchaser's debt instruments and except as provided in Sections 15.1
and 16.1 below) and other Closing costs and expenses, and Seller shall pay the
balance thereof. Purchaser shall pay all fees and charges with respect to
additional Title Policy
HOTEL PURCHASE AGREEMENT - Page 27
------------------------
endorsements, any loan title policy, and Purchaser's debt instruments and as
provided in Sections 15.1 and 16.1 below.
11.6. Reconciliation and Final Payment. Seller and Purchaser shall
--------------------------------
reasonably cooperate after Closing to make a final determination of the
prorations required hereunder. Upon the final reconciliation of the prorations
under this Section and Section 11.4, the party which owes the other party any
sums hereunder shall pay such party such sums within ten (10) days after the
reconciliation of such sums. The obligations to calculate such prorations, make
such reconciliations and pay any such sums shall survive the Closing.
11.7. Accounts Payable. Seller shall retain and be responsible for the
----------------
payment of all accounts payable and other debts relating to the Hotel which have
accrued prior to or as of the Closing and payable after the Closing to the
extent the Purchase Price is not adjusted in favor of Purchaser under the
proration provisions of Sections 11.4 and 11.6 of this Agreement for such
accounts payable and other debts. Purchaser shall be responsible for the
particular accounts payable relating to the Hotel arising and accruing after the
Closing to the extent the Purchase Price is not adjusted in favor of Seller
under the same provisions.
11.8. Accounts Receivable. Purchaser shall not be obligated to collect
-------------------
any accounts receivable or revenues accrued prior to the Closing Date for
Seller, but if Purchaser collects same, such amounts will be remitted at least
once a month to Seller in the form received. These amounts shall specifically
include, without limitation, amounts collected from any taxing authority on
account of a successful tax contest resulting in a recovery of previously paid
taxes; to the extent any such tax recovery applicable to the period prior to the
Closing Date is in the form of credits or rebates in tax periods after the
Closing Date, the cash amount equivalent to such credits or rebates attributable
to the period prior to the Closing Date shall be promptly paid by Purchaser to
Seller. If Purchaser collects any accounts receivable or revenues which are not
attributed to any particular period, Purchaser shall use reasonable efforts to
ascertain from the payor the applicable period to which such receivables or
revenue apply, but if Purchaser is unable to do so, it will be presumed that
they first apply to post-Closing periods. Purchaser acknowledges that following
the Closing, Seller is permitted to collect accounts receivable accrued prior to
the Closing Date.
ARTICLE 12
CASUALTY AND CONDEMNATION
-------------------------
12.1. Risk of Loss; Notice. Prior to Closing and the delivery of
--------------------
possession of the Hotel to Purchaser in accordance with this Agreement, all risk
of loss to the Hotel (whether by casualty, condemnation or otherwise) shall be
borne by Seller. In the event that (a) any loss or damage to the Hotel shall
occur prior to the Closing Date as a result of fire or other casualty, or (b)
Seller receives notice that a governmental authority has initiated or threatened
to initiate a condemnation proceeding affecting the Hotel, Seller shall give
Purchaser immediate written notice of such loss, damage or condemnation
proceeding.
HOTEL PURCHASE AGREEMENT - Page 28
------------------------
12.2. Purchaser's Termination Right. If, prior to Closing and the
-----------------------------
delivery of possession of the Hotel to Purchaser in accordance with this
Agreement, (a) any condemnation proceeding shall be pending against a
substantial portion of the Hotel or (b) there is any substantial casualty loss
or damage to the Hotel, Purchaser shall have the option to terminate this
Agreement provided it delivers written notice to Seller of its election so to
terminate this Agreement within thirty (30) days after the date Seller has
delivered Purchaser written notice of any such loss, damage or condemnation
(which notice shall include a certification of (i) the amounts of insurance
coverages in effect with respect to the loss or damage and (ii) if known, the
amount of the award to be received in such condemnation), and in such event all
▇▇▇▇▇▇▇ Money shall be delivered to Purchaser and thereafter no party shall have
any further obligation or liability to the other under this Agreement. In the
context of condemnation, "substantial" shall mean condemnation of such portion
of the Hotel as would, in Purchaser's sole judgment, render use of the remainder
impractical or unfeasible for the uses herein contemplated, and, in the context
of casualty loss or damage, "substantial" shall mean a loss or damage in excess
of $100,000 in value.
12.3. Procedure for Closing. If Purchaser shall not timely elect to
---------------------
terminate this Agreement under Section 12.2 above, or if the loss, damage or
condemnation is not substantial, Seller agrees to pay to Purchaser at the
Closing all insurance proceeds or condemnation awards which Seller has received
as a result of the same plus an amount equal to the insurance deductible, if
any, and assign to Purchaser all insurance proceeds and condemnation awards
payable as a result of the same in which event the Closing shall occur without
Seller replacing or repairing such damage.
ARTICLE 13
DEFAULT AND REMEDIES
--------------------
13.1. Purchaser's Default. If, at or prior to Closing, for any reason
-------------------
other than termination hereof pursuant to a right granted to Purchaser hereunder
to do so or because of an uncured default by Seller (i) Purchaser refuses or
fails to consummate the purchase of the Hotel pursuant to this Agreement, or
(ii) Purchaser shall otherwise fail in any material respect to perform any of
its material obligations as and when required hereunder, or if, at or prior to
Closing, any representation or warranty made by or on behalf of Purchaser herein
shall have been materially incorrect when made, then Seller shall give Purchaser
and the Title Company written notice specifying the nature of the default, and
Purchaser shall have ten (10) days from receipt of Seller's notice within which
to cure the specified default. If at the end of the ten (10) day period the
default is still not cured, then Seller, as its sole and exclusive remedy, shall
have the right to terminate this Agreement by giving Purchaser and the Title
Company written notice thereof, in which event neither party shall have any
further rights, duties or obligations hereunder (except to the extent this
Agreement may specifically provide for the survival of certain obligations of
Purchaser) and Seller shall be entitled to receive the ▇▇▇▇▇▇▇ Money as
liquidated damages, Seller and Purchaser hereby acknowledging that the amount of
damages resulting from breach of this Agreement by Purchaser would be difficult
or impossible accurately to ascertain, and the Title Company shall immediately
deliver the ▇▇▇▇▇▇▇ Money to Seller. Notwithstanding the foregoing, in the
event of any default by Purchaser under this Agreement due to a breach after
Closing or any termination hereof of any covenant or indemnity which survives
the Closing or any termination hereof, or if Seller shall discover after Closing
that
HOTEL PURCHASE AGREEMENT - Page 29
------------------------
any warranty or representation made by Purchaser herein or in connection with
the transaction contemplated herein was materially incorrect or breached when
made, Seller shall have any and all rights and remedies available at law or in
equity by reason of such default. If Purchaser terminates this Agreement
pursuant to a right granted to Purchaser hereunder to do so, then neither party
shall have any further rights, duties or obligations hereunder (except to the
extent this Agreement may specifically provide for the survival of certain
obligations of Purchaser), and the ▇▇▇▇▇▇▇ Money together with all interest
earned thereon shall be returned to Purchaser.
13.2. Seller's Default. If, at or prior to Closing, for any reason other
----------------
than termination hereof pursuant to a right granted to Seller hereunder to do so
or because of an uncured default by Purchaser (i) Seller refuses or fails to
consummate the transaction contemplated by this Agreement, or (ii) otherwise
wrongfully fails to perform any of its obligations or agreements hereunder, or
if, at or prior to Closing, any representation or warranty made by or on behalf
of Seller herein shall have been materially incorrect when made, then Purchaser
shall give Seller and the Title Company written notice specifying the nature of
the default, and Seller shall have ten (10) days from receipt of Purchaser's
notice within which to cure the specified default. If at the end of the ten
(10) day period, the default is still not cured, then Purchaser, as its sole
remedies, shall have the right to do any one or more of the following:
(a) Terminate this Agreement by written notice given to Seller and
the Title Company within fifteen (15) days of the expiration of the ten (10) day
cure period, in which event the ▇▇▇▇▇▇▇ Money shall be returned to Purchaser by
the Title Company promptly upon receipt of such notice; or
(b) Seek specific performance of this Agreement.
Notwithstanding the foregoing, in the event of any default by Seller under this
Agreement due to a breach after Closing or any termination hereof of any
covenant or indemnity which survives the Closing or any termination hereof, or
if Purchaser shall discover after Closing that any warranty or representation
made by Seller herein or in connection with the transaction contemplated herein
was materially incorrect or breached when made, Purchaser shall have any and all
rights and remedies available at law or in equity by reason of such default.
13.3. Survival. Neither Purchaser's nor Seller's attendance or appearance
--------
at Closing shall be deemed to nullify or void the provisions of this Article 13.
ARTICLE 14
BROKERS
-------
14.1. Identity of Brokers. The parties hereto represent to each other
-------------------
that they dealt with no finder, broker or consultant in connection with this
Agreement or the transactions contemplated hereby except for The ▇▇▇▇▇▇▇▇-
▇▇▇▇▇▇▇▇ Company (the "Brokers") which have been engaged by Seller to assist as
brokers in the sale of the Hotel. Seller shall be responsible for payment of the
commissions owing to the Brokers out of the Purchase Price payable at Closing.
HOTEL PURCHASE AGREEMENT - Page 30
------------------------
14.2. Indemnification by Seller. Seller agrees to, and hereby does,
-------------------------
indemnify and save harmless Purchaser and its affiliates and their respective
successors and assigns against and from any loss, liability or expense,
including reasonable attorneys' fees, arising out of any claim or claims for
commissions or other compensation for bringing about this Agreement or the
transactions contemplated hereby made by any broker, finder, consultant or like
agent if such claim or claims made by any such broker, finder, consultant or
like agent are based in whole or in part on any agreements entered into by
Seller or its representatives for a commission or other compensation. Seller
shall likewise indemnify and save harmless Purchaser and its affiliates and
their respective successors and assigns against and from any loss, liability or
expense, including reasonable attorneys' fees, arising out of any claim or
claims for commissions or other compensation relating to the Leases.
14.3. Indemnification by Purchaser. Purchaser agrees to, and hereby does,
----------------------------
indemnify and save harmless Seller and its affiliates and their respective
successors and assigns against and from any loss, liability or expense,
including reasonable attorneys' fees, arising out of any claim or claims for
commissions or other compensation for bringing about this Agreement or the
transactions contemplated hereby made by any broker, finder, consultant or like
agent if such claim or claims made by any such broker, finder, consultant or
like agent are based on any agreements entered into by Purchaser or its
representatives for a commission or other compensation.
ARTICLE 15
FRANCHISE
---------
15.1. Franchise. Purchaser shall as soon as practicable make such
---------
application to Hilton Inns, Inc., ("Franchisor") as should be reasonably
required for the assignment and assumption of the existing franchise or license
agreement, as applicable, or for a new franchise or license, or for issuance of
a new franchise or license from a different franchisor, whichever Purchaser
chooses. Purchaser shall also utilize reasonable efforts to obtain such
assignment and assumption agreement or new franchise agreement. Seller
represents that its franchise or license is in full force and effect and that
there is no default thereunder or condition which, with the giving of notice or
passage of time, would constitute a default thereunder. Seller shall provide
such cooperation with Purchaser in connection with the obtaining of such license
or franchise from the Franchisor as Purchaser may reasonably request, but Seller
shall not be required to incur any costs or liability in connection therewith.
Purchaser shall pay any transfer fee with respect to the transfer of the
existing license or franchise agreement and shall pay any termination fees,
penalties or damages with respect to Seller's termination of its license or
franchise if Purchaser obtains a new license or franchise. Purchaser may freely
discuss the foregoing, including possible termination of the existing franchise
or license, with Franchisor. In the event that Purchaser shall take an
assignment of Seller's franchise or license or shall obtain a new franchise or
license from Franchisor, unless Purchaser shall otherwise notify Seller in
writing prior to Closing, and to the extent that Seller may do so, all
reservations terminals and systems equipment and software (exclusive of Seller's
manager's accounting software) shall be conveyed to Purchaser in the ▇▇▇▇ of
Sale.
HOTEL PURCHASE AGREEMENT - Page 31
------------------------
ARTICLE 16
LIQUOR LICENSE
--------------
16.1. Liquor Licenses. (a) Purchaser and Seller recognize that the
---------------
issuance of the Liquor License (defined below) is statutorily regulated pursuant
to North Carolina law, and is subject to the approval of the North Carolina
Department of Alcoholic Beverage Control and the City of Durham, as applicable
(the "ABC"). In order to comply with these statutory requirements, Purchaser
and any other parties to be holding a Liquor License shall execute applications
for issuance of the Liquor License, and Seller shall cooperate in completing
applications to the ABC. To the extent legally permissible, pending issuance of
the Liquor License, Purchaser or its designee (in this context, "Operator") may
enter into an interim arrangement with Seller for the use of the original Liquor
License, and, upon request of Purchaser, Seller shall join in such agreement;
provided, however, this interim arrangement shall be a temporary measure until
issuance of the Liquor License can be accomplished but in no event, without
Seller's consent, longer than ninety (90) days following Closing. This
provision shall survive the Closing.
(b) Purchaser shall be responsible for complying at its sole cost
and expense, with all statutes and regulations applicable to the issuance of the
Liquor License including, without limitation, paying all license and transfer
fees and costs of recordation and publication.
(c) As soon as is practicable after the date of execution of this
Agreement, Purchaser shall submit an application to the ABC for issuance of the
Liquor License. Purchaser shall use its best efforts and shall diligently
pursue the issuance of the Liquor License. Purchaser agrees to provide Seller
with written evidence that the applications for issuance of the Liquor License
have been timely filed and to act reasonably in connection with its
determination to obtain an issuance of the Liquor License or reach an interim
agreement with Operator and others holding the Liquor License.
(d) "Liquor Licenses" shall mean collectively (1) that certain ABC
License number 134525 issued to Seller by the ABC, and (2) any other alcoholic
beverage, liquor, beer and/or wine licenses and/or permits with respect to the
Hotel.
(e) If Operator and Seller enter into the interim agreement
described in subsection (a) above, (i) Purchaser and Operator shall indemnify,
defend and hold Seller harmless from any liability, damages, claims, costs,
penalties, losses or expenses (including reasonable attorney's fees) encountered
by Seller in connection with, arising out of, or growing from such operations
and the sale of alcoholic beverages at and from the restaurants, bars and
lounges located at the Hotel during said period of time, and (ii) Purchaser or
Operator shall reimburse Seller for Seller's costs in maintaining the Liquor
Licenses in full force and effect. In no event shall Seller be required to
obtain any additional liquor or alcoholic beverage licenses which Seller does
not possess at the time of Closing. Purchaser shall be responsible for all
application and issuance fees for the transfer and/or issuance to Purchaser of
the Liquor Licenses.
HOTEL PURCHASE AGREEMENT - Page 32
------------------------
ARTICLE 17
MISCELLANEOUS
-------------
17.1. Notices. Any notice provided for by this Agreement and any other
-------
notice, demand or communication which any party may wish to send to another
shall be in writing and either delivered in person or sent by registered or
certified mail, return receipt requested, or recognized overnight courier
requiring signature upon receipt, in a sealed envelope, postage prepaid, and
addressed to the party for which such notice, demand or communication is
intended at such party's address as set forth in this Section. Purchaser's
address for all purposes under this Agreement shall be the following:
American General Hospitality Operating Partnership, L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇, PLLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Seller's address for all purposes under this Agreement shall be the following:
C.H. Corp.
▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, President
and to:
Heritage Hotel LLC
c/o City Hotels USA
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
HOTEL PURCHASE AGREEMENT - Page 33
------------------------
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
Columbia Square
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ King
Any address or name specified above may be changed by a notice given by the
addressee to the other party. Any notice, demand or other communication shall
be deemed given and effective as of the date of delivery in person or receipt
set forth on the return receipt. The inability to deliver because of changed
address of which no notice was given, or rejection or other refusal to accept
any notice, demand or other communication, shall be deemed to be receipt of the
notice, demand or other communication as of the date of such attempt to deliver
or rejection or refusal to accept.
17.2. Entire Agreement; Modifications and Waivers; Cumulative Remedies.
----------------------------------------------------------------
This Agreement constitutes the entire agreement between the parties hereto and
may not be modified or amended except by an instrument in writing signed by the
parties hereto, and no provisions or conditions may be waived other than by a
writing signed by the party waiving such provisions or conditions. No delay or
omission in the exercise of any right or remedy accruing to Seller or Purchaser
upon any breach under this Agreement shall impair such right or remedy or be
construed as a waiver of any such breach theretofore or thereafter occurring.
The waiver by Seller or Purchaser of any breach of any term, covenant or
condition herein stated shall not be deemed to be a waiver of any other breach,
or of a subsequent breach of the same or any other term, covenant or condition
herein contained. All rights, powers, options or remedies afforded to Seller or
Purchaser either hereunder or by law shall be cumulative and not alternative,
and the exercise of one right, power, option or remedy shall not bar other
rights, powers, options or remedies allowed herein or by law, unless expressly
provided to the contrary herein.
17.3. Exhibits. All exhibits referred to in this Agreement and attached
--------
hereto are hereby incorporated in this Agreement by reference.
17.4. Successors and Assigns. Purchaser may assign its rights under this
----------------------
Agreement to any limited partnership, limited liability company or other entity
to be formed for the purpose of purchasing the Hotel so long as such entity is
controlled by Purchaser or the REIT, or by an affiliate of Purchaser or the
REIT, or the REIT, Purchaser or an affiliate of the REIT or Purchaser is an
investor or co-owner of such entity, and, in any case, and Purchaser provides
notice thereof to Seller prior to Closing. Any such assignment shall not
relieve Purchaser of its obligations hereunder. This Agreement shall be binding
upon, and inure to the benefit of, Seller and Purchaser and their respective
legal representatives, successors, and assigns. Whenever a reference is made in
this Agreement to Purchaser, it shall include Purchaser's successors and assigns
under this Agreement.
17.5. Article Headings. Article headings and article and section numbers
----------------
are inserted herein only as a matter of convenience and in no way define, limit
or prescribe the scope or intent
HOTEL PURCHASE AGREEMENT - Page 34
------------------------
of this Agreement or any part thereof and shall not be considered in
interpreting or construing this Agreement.
17.6. Governing Law. This Agreement shall be construed and interpreted in
-------------
accordance with the laws of the State where the Hotel is located.
17.7. Time Periods. If the final day of any time period or limitation set
------------
out in any provision of this Agreement falls on a Saturday, Sunday or legal
holiday under the laws of the State where the Hotel is located or of the federal
government, then and in such event the time of such period shall be extended to
the next day which is not a Saturday, Sunday or legal holiday. Time is of the
essence in this Agreement.
17.8. Counterparts. This Agreement may be executed in any number of
------------
counterparts and by either party hereto on a separate counterpart, each of which
when so executed and delivered shall be deemed an original and all of which
taken together shall constitute but one and the same instrument.
17.9. Survival. All covenants, agreements and indemnities contained in
--------
the Agreement which contemplate performance after the Closing Date shall survive
the Closing. All representations and warranties contained in this Agreement
shall expressly survive the Closing for a period of one (1) year, and all claims
with respect thereto must be made within eighteen (18) months after the Closing
Date. None of the foregoing shall be deemed to merge into, or be waived by,
Seller's Deed or any other closing documents. Each of Seller's representations,
warranties and covenants contained in this Agreement is intended for the benefit
of Purchaser and may be waived in whole or in part by Purchaser, but only by an
instrument in writing signed by Purchaser. No investigation, audit, inspection,
review or the like conducted by or on behalf of Purchaser shall be deemed to
terminate the effect of any such representations, warranties and covenants;
provided, however, that if Purchaser should discover any defect in any
representation or warranty of Seller during the Review Period and fail to
disclose such defect to Seller, then Purchaser shall not have a claim therefor
after Closing. Purchaser has the right to rely thereon and that each such
representation, warranty and covenant constitutes a material inducement to
Purchaser to execute this Agreement and to close the transaction contemplated
hereby and to pay the Purchase Price to Seller. Except as expressly set forth
herein, Seller makes no other representation or warranty with respect to any
matter relating to the Hotel or any part thereof.
17.10. Further Acts. In addition to the acts, deeds, instruments and
------------
agreements recited herein and contemplated to be performed, executed and
delivered by Purchaser and Seller, Purchaser and Seller shall perform, execute
and deliver or cause to be performed, executed and delivered at the Closing or
after the Closing, any and all further acts, deeds, instruments and agreements
and provide such further assurances as the other party or the Title Company may
reasonably require to consummate the transaction contemplated hereunder.
However, the foregoing shall not be deemed to (i) require Seller to expend a sum
of money which it could not reasonably have anticipated on the date of execution
of this Agreement, or (ii) require Purchaser to expend a sum of money which it
could not reasonably have anticipated on the expiration of the Review Period.
HOTEL PURCHASE AGREEMENT - Page 35
------------------------
17.11. Severability. In case any one or more of the provisions contained
------------
in this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
17.12. Attorneys' Fees. Should either party employ an attorney or
---------------
attorneys to enforce any of the provisions hereof or to protect its interest in
any manner arising under this Agreement, the nonprevailing party in any action
pursued in a court of competent jurisdiction (the finality of which is not
legally contested) agrees to pay to the prevailing party all reasonable costs,
damages, and expenses, including attorneys' fees, expended or incurred in
connection therewith.
17.13. Qualification on Confidentiality. Notwithstanding the
--------------------------------
confidentiality requirements elsewhere herein contained, it is acknowledged that
Purchaser is an affiliate of the REIT whose shares are traded to the general
public and that City Hotels, S.A., an affiliate of Seller, is also traded
publicly. In connection therewith, Purchaser and Seller will have the absolute
and unbridled right to market such securities and prepare all statements and
other papers, documents and instruments necessary or reasonably required in
Purchaser's or Seller's judgment as the case may be and that of their respective
attorneys and underwriters, to file same with the U.S. Securities and Exchange
Commission and/or similar state or foreign authorities, and to disclose therein
and thus to its underwriters, to the U.S. Securities and Exchange Commission
and/or to similar state or foreign authorities and to the public all of the
terms, conditions and provisions of this Agreement.
17.14. Rules of Construction. 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. Each party hereto and its counsel have reviewed and
revised (or requested revisions 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.
17.15. Dependent Contract. Unless Purchaser and Seller mutually agree
------------------
otherwise, the Closing of this Agreement is conditioned upon there being no
failure of a condition precedent under Article 10 of that certain Hotel Purchase
Agreement (the "Dependent Contract") of the same date as this Agreement between
Renthotel Utah, L.C. ("RUL") and Purchaser providing for the sale and purchase
of the Salt Lake City Doubletree hotel located at ▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, provided that (i) if Purchaser is in default under the
Dependent Contract then Seller may, in addition to any rights or remedies
available under the Dependent Contract (or hereunder if a default by Purchaser
also exists hereunder), or (ii) if RUL is in default under the Dependent
Contract then Purchaser may, in addition to any rights or remedies available
under the Dependent Contract (or hereunder if a default by Seller also exists
hereunder), terminate this Agreement.
17.16. Seller's Right of Access to Employment and Other Records. Purchaser
--------------------------------------------------------
acknowledges and agrees Seller may require access after the Closing Date to
personnel, employment, financial, engineering and other records located at the
Hotel and under Purchaser's control. Purchaser agrees that Seller shall have
the ability from time to time during normal business hours, after giving
HOTEL PURCHASE AGREEMENT - Page 36
------------------------
reasonable advance notice, to review any and all records relating to the Hotel
and its operations for the period prior to Closing related to any claim or
liability where the Seller may be responsible. This obligation of Purchaser
shall survive Closing.
(Signatures on next page)
HOTEL PURCHASE AGREEMENT - Page 37
------------------------
IN WITNESS WHEREOF, this Agreement has been entered into effective as of
the ____ day of _______________________, 1996.
SELLER:
RENTHOTEL DURHAM, L.L.C.
By: C.H. Corp., a Delaware corporation, member
By: _______________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
By: Heritage Hotel, LLC, a ____________ limited
liability company, member
By: Heritage Hotel, Inc., a ___________
corporation
By:_______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
PURCHASER:
AMERICAN GENERAL HOSPITALITY
OPERATING PARTNERSHIP, L.P.
By: AGH GP, Inc., a Nevada corporation,
general partner
By:_____________________________________
__________, Executive Vice President
HOTEL PURCHASE AGREEMENT - Signature Page
------------------------
LIST OF EXHIBITS
----------------
Exhibit A - Legal Description of Land
Exhibit B - Permitted Exceptions
Exhibit 8.5 - Tenant Estoppel Letter
The exhibits and/or schedules identified above which comprise a part of this
Exhibit 2.9 have not been included as part of this Exhibit. The Registrant
agrees to furnish supplementally a copy of any such omitted schedule or exhibit
upon request.
EXHIBIT 8.5
-----------
TENANT ESTOPPEL CERTIFICATE
---------------------------
WHEREAS, ________________________, a ___________ ("Landlord"), as landlord,
and _______________________ ("Tenant"), as tenant, entered into that certain
lease (the "Lease"), dated ________________, 19__ of certain premises more
particularly described in the Lease (the "Premises").
NOW, THEREFORE, Tenant hereby certifies as follows:
1. True and complete copies of the Lease and all agreements, amendments,
guarantees, side letters and other documents relating thereto are attached
hereto as Exhibit A and made a part hereof, and there are no other such
---------
agreements or documents.
2. The Lease has not been modified (except pursuant to documents attached
hereto as part of Exhibit A) and is in full force and effect.
---------
3. The Lease has not been assigned, mortgaged, pledged, or otherwise
encumbered, nor has all or any portion of the Premises been sublet.
4. Rent, additional rent and percentage rent required to be paid under
the Lease have been paid through ______________.
5. Tenant has accepted possession of and is now occupying the Premises.
6. To Tenant's knowledge, there exist no defaults on the part of Landlord
under the Lease; nor has any event occurred which, with the passage of time or
the giving of notice or both, would constitute a default by Landlord thereunder,
nor has Landlord suffered or permitted the occurrence of any such event.
7. Tenant has no offset, defense, claim or counterclaim, including,
without limitation, claims to "free" rent, concessions, rebates, or abatements
in rent, under the Lease.
8. The expiration date of the term of the Lease is _______________, and
except as set forth in the documents attached hereto as Exhibit A, Tenant has no
---------
option to renew the Lease or otherwise extend the term of the Lease.
9. Tenant has no option to purchase the Premises or any portion thereof,
or the building in which the Premises are located.
10. Tenant has no option to lease any other space in the building in which
the Premises are located.
1
11. Any and all work to be performed by Landlord under the Lease has been
completed in accordance with the Lease and has been accepted by Tenant and all
reimbursements and allowances due to Tenant under the Lease in connection with
any work have been paid in full.
12. Tenant has deposited the sum of $ ____________ with Landlord as
security for the performance of Tenant's obligations under the Lease.
13. This certificate is binding upon the undersigned and may be relied
upon by Landlord, by any prospective purchaser of Premises, and by any lender
making a loan to such purchaser secured by a mortgage on the building in which
the Premises are located.
IN WITNESS WHEREOF, Tenant has duly executed this certificate this ___ day
of _______, 19___.
[TENANT NAME]
By:
Name:
Title:
2