EXHIBIT 10.24
Purchase and Sale Agreement between
Marriott International, Inc., CBM Annex, Inc.,
Courtyard Annex, Inc., as Sellers,
and CNL Hospitality Partners, LP as Purchaser
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
MARRIOTT INTERNATIONAL, INC.
as MI,
CBM ANNEX, INC.
as CBM,
COURTYARD ANNEX, INC.
as Seller,
and
CNL HOSPITALITY PARTNERS, LP
as Purchaser
---------------------------
Dated: November 15, 1999
TABLE OF CONTENTS
SECTION 1. DEFINITIONS.....................................................1
1.1 "Act of Bankruptcy\................................................1
1.1A "Agency Agreement\................................................2
1.2 "Agreement\........................................................2
1.2A "Amended and Restated Operating Agreement\........................2
1.3 \ [Intentionally Omitted]\.........................................2
1.4 "Architect\........................................................2
1.5 "As-Built' Drawings\...............................................3
1.6 "Assets\...........................................................3
1.7 \ [Intentionally Omitted]\.........................................3
1.8 "Business Day\.....................................................3
1.9 [Intentionally Omitted]............................................3
1.9A "CBM Guaranty\....................................................3
1.10 "CHP\.............................................................3
1.11 "CHLP\............................................................3
1.12 "Closing\.........................................................3
1.13 "Closing Date\....................................................3
1.14 "Competitor\......................................................3
1.15 "Contracts\.......................................................3
1.16 "Controlling Interest\............................................4
1.17 [Intentionally Omitted]...........................................4
1.18 [Intentionally Omitted]...........................................4
1.19 [Intentionally Omitted]...........................................4
1.20 [Intentionally Omitted]...........................................4
1.21 [Intentionally Omitted]...........................................4
1.22 "Entity\..........................................................4
1.23 "Environmental Reports\...........................................4
1.24 "Excluded Assets\.................................................4
1.25 "FAS\.............................................................5
1.26 "FF&E\............................................................5
1.27 "FF&E Schedule\...................................................5
1.28 [Intentionally Omitted.]..........................................5
1.29 "Franchise Agreement\.............................................5
1.30 "Guarantors\......................................................5
1.31 "Guaranty of Landlord's Obligations (CHP and CHLP)................5
1.31A "Guaranty of Landlord's Obligations (MI)\........................5
1.31B "Guaranty of Member's Obligations\...............................5
1.32 [Intentionally Omitted]...........................................5
1.33 "Improvements\....................................................5
1.34 "Intangible Property\.............................................6
1.35 "Inventories\.....................................................6
1.36 "Lease\...........................................................6
1.37 "Limited Rent Guaranty\...........................................6
1.38 "[Intentionally Omitted]..........................................6
1.39 "[Intentionally Omitted]..........................................6
1.40 "Mere Director\...................................................6
1.41 "MI\..............................................................6
1.42 "Opening Date\....................................................7
1.43 [Intentionally Omitted\...........................................7
1.44 "Owner Agreement\.................................................7
1.45 "Ownership Interests\.............................................7
1.46 "Permitted Encumbrances\..........................................7
1.47 "Person\..........................................................7
1.48 "Plans and Specifications\........................................7
1.49 "Property\........................................................7
1.50 [Intentionally Omitted]...........................................7
1.51 "Proprietary Information\.........................................7
1.51A "Purchase Price\.................................................7
1.52 "Purchaser\.......................................................7
1.53 "Real Property\...................................................8
1.54 "Reserve\.........................................................8
1.55 "Seller\..........................................................8
1.57 "Stock Pledge\....................................................8
1.58 "Substantial Completion\..........................................8
1.59 "Surveyor\........................................................8
1.60 [Intentionally Omitted\...........................................8
1.61 "Tenant\..........................................................8
1.62 "Title Commitments\...............................................8
1.63 "Title Company\...................................................8
1.64 "Title Insurance Policies\........................................8
1.65 "Updated Survey"..................................................9
SECTION 2. PURCHASE-SALE; DILIGENCE........................................9
2.1 Purchase-Sale......................................................9
2.2 Diligence Inspections..............................................9
2.3 Title Matters......................................................9
2.4 Survey............................................................10
2.5 Environmental Reports.............................................10
2.6 [Intentionally Omitted]...........................................10
2.7 [Intentionally Omitted]...........................................10
SECTION 3. PURCHASE AND SALE..............................................10
3.1 Closing...........................................................10
3.2 [Intentionally Omitted]...........................................10
3.3 Purchase Price....................................................10
3.4 [Intentionally Omitted]...........................................10
3.5 [Intentionally Omitted]...........................................10
3.6 Competitor........................................................11
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE..................11
4.1 Closing Documents.................................................11
4.2 Condition of Property.............................................13
4.3 Title Policies and Surveys........................................13
4.4 Opinions of Counsel...............................................13
4.5 FF&E Schedule.....................................................14
4.6 Other.............................................................14
SECTION 5. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE.....................14
5.1 Purchase Price....................................................15
5.2 Closing Documents.................................................15
5.3 Opinions of Counsel...............................................15
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SELLER.......................15
6.1 Status and Authority of the Seller................................15
6.2 Status and Authority of MI........................................16
6.3 Status and Authority of Owner.....................................16
6.4 Status and Authority of Tenant....................................16
6.4 Status and Authority of CBM.......................................16
6.5 Owner's Organizational Documents..................................16
6.6 Assets and Liabilities of Owners..................................16
6.7 Ownership of Owners...............................................16
6.8 [Intentionally Omitted]...........................................17
6.9 Existing Agreements...............................................17
6.10 Tax Returns......................................................17
6.11 Action of the Seller.............................................17
6.12 No Violations of Agreements......................................17
6.13 Litigation.......................................................18
6.14 Not a Foreign Person.............................................18
6.15 Construction Contracts; Mechanics' Liens.........................18
6.16 Permits, Licenses................................................18
6.17 Hazardous Substances.............................................18
6.18 Insurance........................................................19
6.19 Condition of Property............................................19
6.20 Financial Information............................................19
6.21 Contracts........................................................19
6.22 Title to FF&E....................................................19
6.23 FF&E.............................................................19
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER....................21
7.1 Status and Authority of the Purchaser.............................21
7.2 Status and Authority of the Guarantors............................22
7.3 Action of the Purchaser...........................................22
7.4 No Violations of Agreements.......................................22
7.5 Litigation........................................................22
SECTION 8. COVENANTS OF THE SELLER........................................23
8.1 Compliance with Laws..............................................23
8.2 Correction of Defects.............................................23
8.3 [Intentionally Omitted]...........................................23
8.4 [Intentionally Omitted]...........................................23
8.5 Final Payment.....................................................23
SECTION 9. APPORTIONMENTS.................................................24
9.1 Apportionments....................................................24
9.2 Closing Costs.....................................................24
SECTION 10. Intentionally Omitted.........................................25
SECTION 11. MISCELLANEOUS.................................................25
11.1 Agreement to Indemnify...........................................25
11.2 Brokerage Commissions............................................27
11.3 [Intentionally Omitted]..........................................28
11.4 Publicity........................................................28
11.5 Notices..........................................................28
11.6 Waivers, Etc.....................................................30
11.7 Assignment; Successors and Assigns...............................31
11.8 Severability.....................................................31
11.9 Counterparts, Etc................................................31
11.10 Governing Law...................................................32
11.11 Performance on Business Days....................................32
11.12 Attorneys' Fees.................................................32
11.13 Relationship....................................................32
11.14 Section and Other Headings......................................32
11.15 Disclosure......................................................32
SECTION 12. SELLER REPURCHASE OBLIGATION; OTHER POST-CLOSING
DELIVERIES\...................................................33
12.1 Repurchase Requirement...........................................33
12.2 Repurchase Closing...............................................33
12.3 Repurchase Price.................................................34
12.4 Reports..........................................................34
12.5 Termination......................................................34
12.6 Other Post-Closing Deliveries....................................35
SECTION 13. PURCHASE PRICE ADJUSTMENT.....................................35
13.1 Remaining Work and Payments......................................35
13.2 Adjustment to Purchaser Price and Capital Contributions..........35
SECTION 14. CHANGE OF NAME OF OWNER.......................................36
14.1 Purchaser to Cover Name Change...................................36
Schedule A - Intentionally Omitted
Schedule B - Guaranty of Landlord's Obligations (CHP and CHLP)
Schedule C - Lease Agreement
Schedule D - Limited Rent Guaranty
Schedule E - Owner Agreement
Schedule F - Legal Description of Property
Schedule G - Intentionally Omitted
Schedule H - Stock Pledge Agreement
Schedule I-1 - Endorsement Commitment
Schedule I-2 - Leasehold Policy Commitment
Schedule I-3 - Existing Owner's Title Policy
Schedule J - Intentionally Omitted
Schedule K - Intentionally Omitted
Schedule L - Form of Architect's Certificate
Schedule M - Intentionally Omitted
Schedule N - Intentionally Omitted
Schedule O - Courtyard by Marriott Franchise Agreement
Schedule P - Intentionally Omitted
Schedule Q - Intentionally Omitted
Schedule R - Guaranty of Member's Obligations
Schedule S - First Amended and Restated Limited Liability Company
Agreement
Schedule T - CBM Guaranty
Schedule U - Plans and Specifications
Schedule V - Warranty Assignment Agreement
Schedule W - Guaranty of Landlord's Obligations (MI)
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made as of the 15th day of
November, 1999, by and between COURTYARD ANNEX, INC., a Delaware corporation, as
seller, CNL HOSPITALITY PARTNERS, LP, a Delaware limited partnership, as
purchaser, MARRIOTT INTERNATIONAL, INC., a Delaware corporation, as MI, and CBM
ANNEX, INC., a Delaware corporation, as CBM.
W I T N E S S E T H :
WHEREAS, the Seller (this and other capitalized terms used and not
otherwise defined herein having the meanings ascribed to such terms in Section
1) is the owner of eighty-nine percent (89%) of the ownership interests in
Courtyard Annex, L.L.C. ("Owner"), a Delaware limited liability company;
WHEREAS, CBM Annex, Inc. ("CBM"), a Delaware corporation, is the owner
of eleven percent (11%) of the ownership interests in Owner;
WHEREAS, Seller and CBM are the sole members of Owner and collectively
own one hundred percent (100%) of the ownership interests in Owner;
WHEREAS, Owner is the owner of the Property;
WHEREAS, Purchaser desires to purchase all of the Ownership Interest of
Seller in the Owner and thereby acquire all of Seller's right, title and
interest in and to the Owner upon the terms and conditions hereinafter set
forth; and
WHEREAS, the Seller desires to sell to the Purchaser all of the
Ownership Interest and convey all right, title and interest of Seller in and to
the Owner, upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
SECTION 1. DEFINITIONS.
Capitalized terms used in this Agreement and not defined elsewhere
herein shall have the meanings set forth below, in the Section of this Agreement
referred to below, or in such other document or agreement referred to below:
1.1 "Act of Bankruptcy" shall mean if a party hereto or any general
partner thereof or Tenant shall (a) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or all of or a substantial part of its property; (b) admit in writing its
inability to pay its debts as they become due; (c) make a general assignment for
the benefit of its creditors; (d) file a voluntary petition or commence a
voluntary case or proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect); (e) be adjudicated a bankrupt or insolvent; (f) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts;
(g) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case or proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect); or (h) take
any corporate or partnership action for the purpose of effecting any of the
foregoing; or if the proceeding or case shall be commenced, without the
application or consent of a party hereto or any general partner thereof or
Tenant, in any court of competent jurisdiction seeking (1) the liquidation,
reorganization, dissolution or winding-up, or the composition or readjustment of
debts, of such party or general partner or Tenant; (2) the appointment of a
receiver, custodian, trustee or liquidator for such party or general partner or
Tenant or all or any substantial part of its assets; or (3) other similar relief
under any law relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts, and such proceeding or case shall continue
undismissed; or an order (including an order for relief entered in an
involuntary case under the Federal Bankruptcy Code, as now or hereinafter in
effect), judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstated and in effect, for a period of sixty (60)
consecutive days.
1.1A "Agency Agreement" shall mean that certain Agency Agreement dated
October 31, 1997, by and between Courtyard Annex, L.L.C. and Stonebrick Annex
Corporation, as amended by that certain Amendment No. 1 to Agency Agreement
dated April 21, 1998.
1.2 "Agreement" shall mean this Purchase and Sale Agreement, together
with Schedules A through W hereto, as it and they may be amended from time to
time as herein provided.
1.2A "Amended and Restated Operating Agreement" shall mean that certain
First Amended and Restated Limited Liability Company Operating Agreement of
Courtyard Annex, L.L.C. in the form of Schedule K hereto.
1.3 [Intentionally Omitted].
1.4 "Architect" shall mean ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Rittleman Associates.
1.5 "As-Built Drawings" shall mean the final "as-built" plans and
specifications for the Improvements which are to be furnished by the Seller to
Purchaser pursuant to Section 4.1 or Section 12.6 of this Agreement.
1.6 "Assets" shall mean all of the Real Property, the FF&E, the
Contracts and the Intangible Property, collectively, now owned or hereafter (but
prior to the Closing Date) acquired by Owner in connection with or relating to
the Property other than any Excluded Assets.
1.7 [Intentionally Omitted].
1.8 "Business Day" shall mean any day other than a Saturday, Sunday or
any other day on which banking institutions in the Commonwealth of Pennsylvania
are authorized by law or executive action to close.
1.9 [Intentionally Omitted].
1.9A "CBM Guaranty" shall mean the Guaranty in the form of Schedule T
hereto to be entered into at Closing for the benefit of Owner, CHLP and CHP and
guarantying CBM's obligations as a Member in Owner pursuant to the Amended and
Restated Operating Agreement.
1.10 "CHP" shall mean CNL Hospitality Properties, Inc., a Maryland
corporation.
1.11 "CHLP" shall mean CNL Hospitality Partners, LP, a Delaware limited
partnership.
1.12 "Closing" shall have the meaning given such term in Section 3.1.
1.13 "Closing Date" shall have the meaning given such term in Section
3.1.
1.14 "Competitor" shall mean a Person that owns or has an equity
interest in a hotel brand, tradename, system or chain (a "Brand") which is
comprised of at least ten (10) hotels; provided that such Person shall not be
deemed a Competitor if it holds its interest in a Brand merely as (i) a
franchisee or (ii) a mere passive investor that has no control or influence over
the business decisions of the Brand at issue, such as a mere limited partner in
a partnership, a mere shareholder in a corporation or a mere payee of royalties
based on a prior sale transaction. A mere passive investor that is represented
by a Mere Director on the board of directors of a Competitor shall not be deemed
to have control or influence over the business decisions of that Competitor.
1.15 "Contracts" shall mean equipment leases relating to telephone
switches and voice mail relating to the Property and to which Owner is a party
and any other equipment leases relating to the Property and disclosed to
Purchaser on or before Closing and which are to survive the Closing and to which
the Owner is or is to become a party.
1.16 "Controlling Interest" shall mean (a) as to a corporation, the
right to exercise, directly or indirectly, more than fifty percent (50%) of the
voting rights attributable to the shares of the Entity (through ownership of
such shares or by contract), and (b) as to an Entity not a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the Entity.
1.17 [Intentionally Omitted].
1.18 [Intentionally Omitted].
1.19 [Intentionally Omitted].
1.20 [Intentionally Omitted].
1.21 [Intentionally Omitted].
1.22 "Entity" shall mean any corporation, general or limited
partnership, limited liability company, partnership, stock company or
association, joint venture, association, company, trust, bank, trust company,
land trust, business trust, cooperative, any government or agency or political
subdivision thereof or any other entity.
1.23 "Environmental Report" shall have the meaning given such term in
Section 2.5.
1.24 "Excluded Assets" shall mean (i) any right, title or interest in
any name containing any of the names "Marriott," "Courtyard," and other marks
used, or that may in the future be used, by MI or its affiliates, including the
Seller (and MI shall have the right to remove any such name or ▇▇▇▇ appearing on
any signage or other property pursuant to the terms of the Franchise Agreement
for such Property), (ii) all items, tangible or intangible, consisting of
Proprietary Information, (iii) computer software, (iv) FAS, (v) any Inventories
located at the Property, (vi) working capital, including without limitation,
cash, bank accounts and accounts receivable owned or held by Owner or Seller or
any of its affiliates, (vii) all contracts pertaining to the operation of the
Property other than the Contracts, and (viii) any software, manuals, brochures
or directives used by the Owner or any of its affiliates, including the Seller,
in the operation of the Property that will be issued by the franchisor to the
Tenant, as franchisee, under the Franchise Agreements.
1.25 "FAS" shall have the meaning given such term in the Lease.
1.26 "FF&E" shall mean all appliances, machinery, devices, fixtures,
appurtenances, equipment, furniture, furnishings and articles of tangible
personal property of every kind and nature whatsoever owned by the Owner or any
of its affiliates, including the Seller, and located in or at, or used in
connection with the ownership, operation or maintenance of the Property, other
than motor vehicles.
1.27 "FF&E Schedule" shall have the meaning given such term in Section
4.5.
1.28 [Intentionally Omitted].
1.29 "Franchise Agreement" shall mean the Franchise Agreement to be
entered into at or prior to the Closing of the purchase and sale of the
Ownership Interest of the Seller between MI, as franchisor, and Tenant, as
franchisee, substantially in the form attached hereto at Schedule O (Courtyard
by Marriott Franchise Agreement).
1.30 "Guarantors" shall mean CHP and CHLP, jointly and severally.
1.31 "Guaranty of Landlord's Obligations (CHP and CHLP)" shall mean the
Guaranty in the form of Schedule B hereto to be entered into by Guarantors for
the benefit of Tenant in respect of the Lease and guarantying the landlord's
obligations under the Lease.
1.31A. "Guaranty of Landlord's Obligations (MI)" shall mean the
Guaranty in the form of Schedule W hereto to be entered into by MI for the
benefit of Tenant in respect of the Lease and guarantying the landlord's
obligations under the Lease.
1.31B "Guaranty of Member's Obligations" shall mean the guaranty in the
form of Schedule R hereto to be entered into at Closing for the benefit of
Owner, CBM and MI and guarantying Purchaser's obligations as a Member in Owner
pursuant to the Amended and Restated Operating Agreement.
1.32 [Intentionally Omitted].
1.33 "Improvements" shall mean all buildings, fixtures, walls, fences,
landscaping and other structures and improvements situated on, affixed or
appurtenant to the Real Property, including, but not limited to, all pavement,
access ways, curb cuts, parking, kitchen and support facilities, meeting and
conference rooms, swimming pool facilities, recreational amenities, office
facilities, drainage system and facilities, air ventilation and filtering
systems and facilities and utility facilities and connections for sanitary
sewer, potable water, irrigation, electricity, telephone, cable television and
natural gas, if applicable, to the extent the same form a part of the Property
and all appurtenances thereto.
1.34 "Intangible Property" shall mean all transferable or assignable
(a) governmental permits, including licenses and authorizations, required for
the construction, ownership and operation of the Improvements, including without
limitation certificates of occupancy, building permits, signage permits, liquor
licenses, site use approvals, zoning certificates, environmental and land use
permits and any and all necessary approvals from state or local authorities
(hereinafter defined as "Permits") and other approvals granted by any public
body or by any private party pursuant to a recorded instrument relating to the
Property and (b) certificates, licenses, warranties and guarantees and the
Contracts held by the Owner, other than (x) the Excluded Assets and (y) such
permits, operating permits, certificates, licenses and approvals which are to be
held by, or transferred to, the Tenant in order to permit the Tenant to operate
such Property properly in accordance with the terms of the Leases.
1.35 "Inventories" shall have the meaning given such term in the Lease.
1.36 "Lease" shall mean the Lease Agreement in the form of Schedule C
hereto to be entered into by Tenant and the Owner.
1.37 "Limited Rent Guaranty" shall mean the Limited Rent Guaranty in
the form of Schedule D hereto to be entered into by MI in respect of the Lease.
1.38 [Intentionally Omitted].
1.39 [Intentionally Omitted].
1.40 "Mere Director" shall mean a Person who holds the office of
director of a corporation and who, as such director, has the right to vote not
more than twelve and one-half percent (12.5%) of the total voting rights on the
board of directors of such corporation, and who represents or acts on behalf of
a mere passive investor which neither (i) owns more than three percent (3%) of
the total voting rights attributable to all shares or ownership interests of a
Competitor, nor (ii) otherwise has the power to direct or cause the direction of
the management or policies of a Competitor.
1.41 "MI" shall mean Marriott International, Inc., a Delaware
corporation, its successor or successors by merger or operation of law, and
assignee or assignees to whom it has transferred all or substantially all of its
hotel and related lodging assets and/or businesses and which assumes in writing
Marriott International, Inc's. obligations under this Agreement.
1.42 "Opening Date" shall mean the date on which the first paying
customer is accepted at the Property.
1.43 [Intentionally Omitted].
1.44 "Owner Agreement" shall mean the Owner Agreement in the form of
Schedule E hereto to be entered into by MI, Tenant and Owner in respect of the
Lease.
1.45 "Ownership Interest" shall mean the eighty-nine percent (89%)
interest in the Owner held by Seller.
1.46 "Permitted Encumbrances" shall mean (a) any and all matters
affecting title to the Property as of the date hereof and as reflected in the
Title Commitments attached hereto; (b) liens for taxes, assessments and
governmental charges with respect to the Property not yet due and payable or due
and payable but not yet delinquent; (c) applicable zoning regulations and
ordinances and other governmental laws, ordinances and regulations; and (d) the
Lease.
1.47 "Person" shall mean any individual or Entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of such
Person where the context so admits.
1.48 "Plans and Specifications" shall mean those certain plans and
specifications for the construction of the Improvements on the Property which
have been approved by Purchaser and are identified on Schedule U attached
hereto.
1.49 "Property" shall mean that certain property known or to be known
as the Courtyard by Marriott at City Hall Annex having an address of ▇▇-▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, including the Assets.
1.49A "Property Opening" shall have the meaning given such term in
Section 12.1.
1.50 [Intentionally Omitted].
1.51 "Proprietary Information" shall have the meaning given such term
in the Lease.
1.51A "Purchase Price" shall mean Fifty-Seven Million Eight Hundred
Fifty Thousand Dollars ($57,850,000).
1.52 "Purchaser" shall mean CHLP and its permitted successors and
assigns.
1.53 "Real Property" shall mean the land described in Schedule F to
this Agreement, together with the Improvements, all easements, rights of way,
privileges, licenses and appurtenances which the Owner may own as of the date
hereof with respect thereto.
1.53A "Renovation Work" shall mean the work performed or to be
performed at the Property pursuant to the Plans and Specifications.
1.54 "Reserve" shall have the meaning given such term in the Lease.
1.55 "Seller" shall mean Courtyard Annex, Inc.
1.56 [Intentionally Omitted].
1.57 "Stock Pledge" shall mean the Stock Pledge Agreement in the form
of Schedule H hereto to be entered into by Courtyard Management Corporation, as
the owner of all of the outstanding stock of Tenant, as pledgor, and Owner, as
pledgee, as further security for the performance of Tenant's obligations under
the Lease.
1.58 "Substantial Completion" shall mean substantial completion of the
Improvements in conformance, in all material respects, with the Plans and
Specifications therefor (other than so-called "punch-list" items as do not
individually or in the aggregate substantially impair the use of the Property
for its intended use).
1.59 "Surveyor" shall mean ▇▇▇▇▇▇ & ▇▇▇▇▇▇ Engineers, Philadelphia,
Pennsylvania.
1.60 [Intentionally Omitted].
1.61 "Tenant" shall mean City Center Annex Tenant Corporation, a
Delaware corporation and a direct wholly-owned subsidiary of Courtyard
Management Corporation.
1.62 "Title Commitment" shall have the meaning given such term in
Section 2.3.
1.63 "Title Company" shall mean Commonwealth Land Title Insurance
Company or such other title insurance company as shall have been approved by the
Purchaser and the Seller.
1.64 "Title Insurance Policy" shall have the meaning given such term in
Section 2.3.
1.65 "Updated Survey" shall have the meaning given such term in Section
2.4.
SECTION 2. PURCHASE-SALE; DILIGENCE.
2.1 Purchase-Sale. In consideration of the mutual covenants herein
contained, the Purchaser hereby agrees to purchase from the Seller and the
Seller hereby agrees to sell to the Purchaser, the Ownership Interest for the
Purchase Price, subject to and in accordance with the terms and conditions of
this Agreement.
2.2 Diligence Inspections. Except as contemplated in Section 12,
Purchaser has approved (or is deemed to have approved for purposes of this
Agreement) the Property in its "as is, where is" condition as of the date
hereof. In respect to the Improvements located on the Property, the Seller shall
permit (or cause the Owner to permit) the Purchaser and its representatives to
inspect the Improvements at such reasonable times as the Purchaser or its
representatives may request by reasonable prior notice to the Seller. During any
such inspection, the Purchaser and its representatives shall minimize any
resulting interference with ongoing construction or pre-opening activities at
the Property. To the extent that, in connection with such investigations, the
Purchaser, its agents, representatives or contractors, damages or disturbs the
Property, or any part thereof, the Purchaser shall return the same to
substantially the same condition which existed immediately prior to such damage
or disturbance. The Purchaser shall indemnify, defend and hold harmless the
Seller and Owner from and against any and all expense, loss or damage
(including, without limitation, reasonable attorneys' fees) which the Seller
and/or the Owner may incur as a result of any act or omission of the Purchaser
or its representatives, agents or contractors in connection with any such
inspections, other than any expense, loss or damage arising from any act or
omission of the Seller or the Owner. The foregoing indemnification agreement
shall survive the termination of this Agreement and the Closing hereunder.
2.3 Title Matters. Purchaser has approved (or is hereby deemed to have
approved) the state of title to the Property and all exceptions thereto as
reflected in that certain Owner's Title Insurance, Policy No. D167374 issued to
Owner in respect of the Property by the Title Company, a copy of which title
policy is attached hereto as Schedule I-3 (the "Title Insurance Policy"). The
Title Company has delivered to the Purchaser and the Seller a preliminary
written commitment for (a) the issuance of an Endorsement to the Title Insurance
Policy, a copy of which commitment is attached hereto as Schedule I-1 (the
"Endorsement Commitment"), and (b) the issuance of a Leasehold Owner's Title
Insurance Policy for the Property naming Tenant as the insured, a copy of which
commitment is attached hereto as Schedule I-2 (the "Leasehold Policy
Commitment") (the Endorsement Commitment and Leasehold Policy Commitment herein,
collectively, the "Title Commitments"). Purchaser has approved the Endorsement
Commitment and the form of Endorsement provided for therein for purposes of this
Agreement. MI has approved the Leasehold Policy Commitment and the form of the
leasehold policy provided for therein on behalf of the Tenant.
2.4 Survey. Purchaser has approved the survey of the Property and all
matters shown thereon, prepared by Surveyor dated May 13, 1997 and last revised
and certified on November 2, 1999 ("Updated Survey").
2.5 Environmental Reports. Purchaser has approved and accepts the
environmental condition of the Property as existing on the date hereof and as
reflected in that certain Phase I environmental report in respect of the
Property prepared by Dames and ▇▇▇▇▇ and dated October 12, 1999 ("Environmental
Report").
2.6 [Intentionally Omitted].
2.7 [Intentionally Omitted].
SECTION 3. PURCHASE AND SALE.
3.1 Closing. The purchase and sale of the Ownership Interest shall be
consummated at a closing (the "Closing") to be held at the offices of Holland &
Knight LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, or at such
other location as the Seller and the Purchaser may agree, at 10:00 a.m. local
time, the Closing to occur on the date hereof , or such later date as of which
all conditions precedent to the Closing herein set forth have either been
satisfied or waived by the party in whose favor such conditions run ("Closing
Date"). In the event that the Closing shall not have occurred within ten (10)
days after the date hereof, either party (provided such party shall not be in
default hereunder), shall have the right, by the giving of written notice to the
other, to terminate this Agreement.
3.2 [Intentionally Omitted].
3.3 Purchase Price. At Closing, the Purchase Price shall be payable by
wire transfer of immediately available funds to an account or accounts to be
designated by the Seller prior to Closing, subject to any adjustments and
apportionments made pursuant to Section 9.1 of this Agreement.
3.4 [Intentionally Omitted].
3.4A [Intentionally Omitted].
3.5 [Intentionally Omitted].
3.6 Competitor. In the event that any sale, assignment, transfer or
other disposition, for value or otherwise, voluntary or involuntary, by merger,
operation of law or otherwise, in a single transaction or a series of
transactions, of any interest in Purchaser or any Person having an interest in
Purchaser, directly or indirectly, results, directly or indirectly, in a
Competitor owning a Controlling Interest in Purchaser, Seller shall have the
right, but not the obligation, to terminate this Agreement (and such termination
shall not constitute a default under any of the related transactions or
documents contemplated thereby, including this Agreement).
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE.
The obligation of the Purchaser to acquire the Ownership Interest on
the Closing Date shall be subject to the satisfaction or waiver of the following
conditions precedent on and as of such Closing Date:
4.1 Closing Documents. The Seller shall have delivered to the
Purchaser:
(a) A warranty assignment and assumption of the Ownership Interest
in the form of Schedule V hereto, duly executed by the Seller, transferring,
assigning and warranting to Purchaser all right, title and interest of Seller
therein, free from all liens, encumbrances, security interests, options and
adverse claims of any kind or character;
(b) To the extent the same are in the Seller's or the Owner's (or
their agents) possession, original (or copies certified by Seller as true and
correct), fully executed copies of all agreements constituting Assets;
(c) The Lease duly executed by Tenant;
(d) The Limited Rent Guaranty duly executed by MI;
(e) The Stock Pledge duly executed by Courtyard Management
Corporation as the owner of all the outstanding stock in Tenant;
(f) A copy of the fully executed Franchise Agreement with respect to
the Property;
(g) The Owner Agreement duly executed by MI and Tenant ;
(h) A copy of the final certificate of occupancy for the Property;
(i) An architect's certificate in respect of the Improvements in
substantially the form attached hereto as Schedule L ("Architect's
Certificate");
(j) [Intentionally Omitted];
(k) Original secretary's certificate and certificates of incumbency
with respect to the Seller, Tenant, MI, and such other persons as the Purchaser
may reasonably require;
(l) [Intentionally Omitted];
(m) A certificate of a duly authorized officer of MI and Seller
confirming the continued truth and accuracy of the representations and
warranties of the Seller in this Agreement (subject to Section 4.2(b));
(n) The Updated Survey;
(o) [Intentionally Omitted];
(p) The Permits (or copies thereof certified by Seller as true and
correct);
(q) The Contracts;
(r) Copies of any and all warranties and guarantees pertaining to
the Improvements, specifically including the manufacturers roof membrane
warranty issued with respect to the buildings comprising the Improvements, and
any other warranties and guarantees with respect to other aspects of the
Improvements to the extent given pursuant to the construction contracts for the
Improvements;
(s) Insurance certificates to be provided by Tenant pursuant to the
Lease;
(t) The FF&E Schedule;
(u) Copies of any tax returns previously filed for Owner;
(v) An Owner's affidavit in the usual and customary form of the
Title Company for the purpose of satisfying any request for the same in the
Title Commitment;
(w) A copy of the duly executed Articles of Formation of the Owner;
(x) A settlement statement;
(y) The original (or copy thereof certified by Seller as true and
correct) of the Agency Agreement, the construction contract, the Architect's
agreement, any bonds required under the construction contract, the most recent
partial waivers of liens received from the general contractor reflecting all
sums paid to date, and a certificate of substantial completion substantially in
the form set forth in AIA Form G704;
(z) Such other documents, certificates, and other instruments as may
be reasonably required to consummate the transaction contemplated hereby;
(aa) The Amended and Restated Operating Agreement duly executed by CBM;
(bb) A copy of the final "punch-list" work, if any, required upon
Substantial Completion of the Renovation Work certified by Seller;
(cc) The CBM Guaranty; and
(dd) Guaranty of Landlord's Obligations (MI).
4.2 Condition of Property.
(a) No action shall be pending or threatened for the condemnation or
taking by power of eminent domain of all or any material portion of the
Property;
(b) Copies of any material licenses, permits and other authorizations
necessary for the use, occupancy and operation of the Property issued as of the
Closing shall be in full force and effect and provided to Purchaser at Closing;
as contemplated by and subject to Section 12, Seller shall provide all other
such material licenses, permits and other authorizations identified in Section
12 to Purchaser after Closing as and when received; and
(c) The Purchaser shall have received the Architect's Certificate
executed by the Architect in respect of the Property.
4.3 Title Policies and Surveys.
(a) The Title Company shall be prepared, subject only to payment of the
applicable premium, to issue the Endorsement to the Title Insurance Policy and
the Leasehold Owner's Title Insurance Policy in accordance with Section 2.3.
(b) The Purchaser shall have received the Updated Survey with respect
to the Property, in accordance with Section 2.4.
4.4 Opinions of Counsel. The Purchaser shall have received a written
opinion from counsel to the Seller, Tenant, CBM and MI (which may be its
in-house counsel), in form and substance reasonably satisfactory to the
Purchaser and its counsel, regarding the good standing and/or authority of the
Seller, Tenant, CBM and MI, to enter into the documents to be entered into in
connection with the Closing and to which they are a party and the enforceability
of this Agreement, the Lease, the Limited Rent Guaranty, the Owner Agreement,
the CBM Guaranty, the Stock Pledge and the Guaranty of Landlord's Obligations
(MI) and such other matters with respect to the transactions contemplated by
this Agreement as the Purchaser may reasonably require.
4.5 FF&E Schedule. Prior to Closing, Seller shall provide to Purchaser
a schedule (the "FF&E Schedule") of all FF&E at the Property (other than the
FF&E listed in the Plans and Specifications) owned by Owner and intended to be
part of the Assets to be owned by Owner upon and following Closing. Upon
reasonable prior notice to Seller, Purchaser shall be entitled to inspect the
FF&E at the Property prior to Closing in order to confirm and verify the FF&E
Schedule.
4.6 Other.
(a) The representations and warranties of the Seller and MI
set forth in Section 6 hereof shall be true, correct and complete in all
material respects on and as of the Closing Date;
(b) No Act of Bankruptcy on the part of the Seller, the Owner
or Tenant shall have occurred and remain outstanding as of the Closing Date;
(c) The Seller shall be the sole owner of good title to the
Ownership Interest free and clear of all liens, encumbrances, restrictions,
conditions and agreements (other than this Agreement);
(d) Except as otherwise expressly provided for herein, the
Seller shall not have amended or allowed to be amended, and hereby covenants not
to amend or allow the amendment of, the organizational documents of the Owner
without Purchaser's express prior written consent;
(e) There shall be no unsatisfied state or federal tax liens
against or affecting the Owner or Seller, or any tax audit of the Owner or
Seller in process, which could result in a lien against the Property or the
Ownership Interest; and
(f) There shall be no outstanding, unsettled claim against the
Owner arising under any insurance policies in respect of the Owner or the
Property.
SECTION 5. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE.
The obligation of the Seller to assign and transfer to the Purchaser
the Ownership Interest on the Closing Date is subject to the satisfaction or
waiver of the following conditions precedent on and as of the Closing Date:
5.1 Purchase Price. The Purchaser shall deliver to the Seller the
Purchase Price as provided in Section 3.3.
5.2 Closing Documents. The Purchaser shall have delivered to the
Seller:
(a) Duly executed and acknowledged (by the remaining parties
thereto) counterparts of the documents described in Subsections 4.1 (a), (c),
(d), (e), (g), (x) and (aa);
(b) The Guaranty of Landlord's Obligations duly executed by
the Guarantors;
(c) The Guaranty of Member's Obligations duly executed by CHP;
(d) A certificate of a duly authorized officer of the
Purchaser confirming the continued truth and accuracy of the representations and
warranties of the Purchaser in this Agreement;
(e) Certified copies of applicable resolutions and
certificates of incumbency with respect to the Purchaser, each of the
Guarantors, and such other persons as the Seller or the Tenant may reasonably
require; and
(f) Such other documents, certificates and other instruments
as may be reasonably required to consummate the transaction contemplated hereby.
5.3 Opinions of Counsel. The Seller, Tenant, CBM and MI, as applicable,
shall have received a written opinion from Lowndes, Drosdick, Doster, ▇▇▇▇▇▇ &
▇▇▇▇, P.A., or other counsel to the Purchaser and the Guarantors reasonably
acceptable to Seller, MI and its counsel, in form and substance reasonably
satisfactory to Seller and its counsel, regarding the good standing and
authority of the Purchaser and the Guarantors to enter into the documents to be
entered into in connection with the Closing and to which they are a party, and
the enforceability of this Agreement, the Owner Agreement, the Guaranty of
Landlord's Obligations, the Guaranty of Member's Obligations, the Lease and such
other matters with respect to the transactions contemplated by this Agreement as
the Seller, Tenant or MI may reasonably require.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SELLER.
To induce the Purchaser and CHP to enter into this Agreement, the
Seller and MI (and, to the extent specified below, CBM), represent and warrant
to the Purchaser and CHP as follows:
6.1 Status and Authority of the Seller. The Seller is, or will be at or
before Closing, a corporation duly organized, validly existing and in corporate
good standing under the laws of its state of incorporation, and has all
requisite power and authority under the laws of such state and its respective
charter documents to enter into and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. The Seller has, or will
have at or before Closing, duly qualified to transact business and is in good
standing in the Commonwealth of Pennsylvania.
6.2 Status and Authority of MI. MI is a corporation duly organized,
validly existing and in corporate good standing under the laws of its state of
incorporation, and has all requisite power and authority under the laws of such
state and its respective charter documents to enter into and perform its
obligations
under this Agreement and to consummate the transactions contemplated hereby. MI
has duly qualified to transact business and is in good standing in the
Commonwealth of Pennsylvania.
6.3 Status and Authority of Owner. Owner is a limited liability
company, duly organized, validly existing and in good standing under the laws of
the State of Delaware and duly qualified to do business and in good standing
under the laws of the Commonwealth of Pennsylvania.
6.4 Status and Authority of Tenant. Tenant is, or will be at Closing, a
corporation, duly organized, validly existing and in good standing under the
laws of the State of Delaware and duly qualified to do business and in good
standing under the laws of the Commonwealth of Pennsylvania.
6.4A Status and Authority of CBM. CBM is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and duly qualified to do business and in good standing under the laws of the
Commonwealth of Pennsylvania.
6.5 Owner's Organizational Documents. Owner's organizational documents
provided (or to be provided) by Seller to Purchaser at Closing are true and
complete copies thereof and of all amendments and modifications with respect
thereto and there are no other agreements between or among the members of Owner
pertaining to Owner or the Property.
6.6 Assets and Liabilities of Owner. The sole assets and liabilities of
Owner are, or will be at Closing, the Assets and the Lease relating to the
Property.
6.7 Ownership of Owner. The Seller owns good and valid title to 89% of
the ownership interests in Owner, free and clear of all liens, security
interests, assignments, options, warrants, calls and adverse claims to title of
any kind or character, and such Ownership Interest is not the subject of any
agreement (other than this Agreement and any other document or instrument given
or entered into in connection with Closing) providing for the sale and transfer
thereof or any rights with respect thereto. CBM owns good and valid title to 11%
of the ownership interests in Owner, free and clear of all liens, security
interests, assignments, options, warrant, calls and adverse claims to title of
any kind or character, and such ownership interests are not the subject of any
agreement (other than this Agreement and any other document or instrument given
or entered into in connection with Closing) providing for the sale and transfer
thereof or any rights with respect thereto.
6.8 [Intentionally Omitted].
6.9 Existing Agreements. There are no (or will not be at the Closing)
service contracts, maintenance agreements, leasing commissions or brokerage
agreements, repair contracts, property management contracts, contracts for the
purchase or delivery of labor, services, materials or goods, supplies or
equipment, leases, licensees or occupancy agreements, or similar agreements
entered into by or on behalf of Owner which will be obligations of Purchaser or
Owner after the Closing, other than (i) the Permitted Encumbrances, (ii) the
Contracts, (iii) the Lease, (iv) the Owner Agreement, and (v) any other document
or instrument given or entered into in connection with Closing.
6.10 Tax Returns. All tax returns for federal, state or local income,
excise, sales and use, personal property, privilege, gross receipts and
franchise taxes required by law to be filed by Owner prior to the date of
Closing will be prepared and duly filed, prior to the Closing (or after Closing
with respect to pre-Closing matters) and all taxes, if any, shown on such
returns or otherwise determined to be due, together with any interest or
penalties thereon, will be paid by or on behalf of Owner prior to Closing, or
will be paid by Seller or MI on behalf of Owner after Closing and Seller or MI
will provide Owner with evidence of the same.
6.11 Action of the Seller. Each of Seller, MI and CBM has taken all
necessary action to authorize the execution, delivery and performance of this
Agreement, and upon the execution and delivery of any document to be delivered
by it on or prior to the Closing Date, such document shall constitute its valid
and binding obligation and agreement, enforceable against it in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting the
rights and remedies of creditors and general principles of equity.
6.12 No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by the Seller, MI or CBM, nor compliance with the
terms and provisions hereof, will result in any breach of the terms, conditions
or provisions of, or conflict with or constitute a default under, or result in
the creation of any lien, charge or encumbrance upon the Property pursuant to
the terms of any indenture, mortgage, deed of trust, note, evidence of
indebtedness or any other agreement or instrument by which the Seller, MI, CBM
or Owner is bound.
6.13 Litigation. Neither the Seller nor the Owner has received written
notice of and, to the Seller's and MI's knowledge, no investigation, action or
proceeding is pending or, to the Seller's and MI's knowledge, threatened, and
neither the Seller nor the Owner has received written notice of and, to the
Seller's and MI's knowledge, no investigation looking toward such an action or
proceeding has begun, which (a) questions the validity of this Agreement or any
action taken or to be taken pursuant hereto, or (b) may result in or subject
Owner or the Property to a material liability which is not covered by insurance,
whether or not Purchaser is indemnified by Seller and/or MI with respect to the
same, or (c) involves condemnation or eminent domain proceedings against any
material part of the Property.
6.14 Not A Foreign Person. The Seller is not a "foreign person" within
the meaning of Section 1445 of the United States Internal Revenue Code of 1986,
as amended, and the regulations promulgated thereunder.
6.15 Construction Contracts; Mechanics' Liens. At the Closing, there
will be no outstanding contracts made by the Seller or the Owner for the
construction or repair of any improvements to the Real Property which have not
been fully paid for or provision for the payment of which has not been made by
Seller and Seller shall cause the Owner to discharge and have released of record
or bonded all mechanics' or materialmen's liens, if any, arising from any labor
or materials furnished to such Real Property prior to the Closing to the extent
any such lien is not insured over by the Title Company or bonded over pursuant
to applicable law.
6.16 Permits, Licenses. At Closing, there will be in effect all
material licenses (including liquor licenses, if required), permits and other
authorizations necessary for the then current use, occupancy and operation of
the Property; except those licenses, permits and authorizations identified in
Section 12, which shall be obtained after Closing in accordance with Section 12.
6.17 Hazardous Substances. Except as described in the Environmental
Report, to the Seller's and MI's knowledge, neither the Seller nor Owner, since
the date that Owner acquired title to the Property, has stored or disposed of
(or engaged in the business of storing or disposing of, or authorized the
storage or disposal of) or has released or caused or authorized the release of
any hazardous waste, contaminants, oil, radioactive or other material on the
Property, or any portion thereof, the removal of which is required or the
maintenance of which is prohibited or penalized by any applicable Federal, state
or local statutes, laws, ordinances, rules or regulations, and which has not as
of the Closing Date been removed from the Property in accordance with such
applicable statutes, laws, ordinances, rules or regulations.
6.18 Insurance. The Seller has received no written notice from any
insurance carrier of defects or inadequacies in the Property which, if
uncorrected, would result in a termination of insurance coverage or a material
increase in the premiums charged therefor.
6.19 Condition of Property. To Seller's and MI's knowledge, the
Improvements on the Property, as of the Closing Date, will be in good working
order and repair, mechanically and structurally sound, and are, to Seller's and
MI's knowledge, free from material defects in materials and workmanship and, in
respect of the Renovation Work, constructed with materials that are "new,"
subject to such "punch list" work as may be required upon Substantial Completion
of such Renovation Work.
6.20 Financial Information. Financial information, including, without
limitation, all books and records and financial statements of the Owner, which
have been provided to Purchaser are true, correct and complete in all material
respects.
6.21 Contracts. Seller and Owner have performed all of their
obligations under each Contract to which the Owner is a party or is subject and
no fact or circumstance has occurred, which by itself or with the passage of
time or the giving of notice or both would constitute a default under any such
Contract. Further, to Seller's knowledge, all other parties to such Contracts
have performed all of their obligations thereunder in all material respects and
are not in default thereunder.
6.22 Title to FF&E. Owner has good and marketable title to the FF&E
described on the FF&E Schedule and in the Plans and Specifications (to the
extent that the Plans and Specifications describe FF&E).
6.23 FF&E. The FF&E Schedule and the Plans and Specifications (to the
extent the Plans and Specifications describe FF&E) accurately describe in all
material respects the FF&E owned by Owner and located at the Property and, to
Seller's knowledge, such FF&E is "new" and has not been used prior to its use at
the Property.
The representations and warranties made in this Agreement by Seller and
MI (and CBM, as applicable), as indicated in Section 6.1 through Section 6.14,
inclusive, are made as of the date hereof and shall be deemed remade by the
Seller and MI (and CBM, as applicable), as of the Closing Date, with the same
force and effect as if made on, and as of, such date; and the representations
and warranties made in this Agreement by Seller and MI (or CBM, as applicable),
in Section 6.15 through Section 6.23, inclusive, shall be made as of the Closing
Date. All representations and warranties made in this Agreement by the Seller
and MI (and CBM, as applicable) shall survive the Closing for a period of one
year. Any action, suit or proceeding with respect to the truth, accuracy or
completeness of any such representation or warranty shall be commenced and
served, if at all, on or before the date which is twelve (12) months after the
date of Closing and, if not commenced on or before such date, thereafter shall
be void and of no force or effect.
Except as contemplated by Section 12, prior to the Closing contemplated
by this Agreement, Purchaser will have had the opportunity to investigate
independently all physical aspects of the Property, and to make all such
independent inspections and/or investigations of the Property that Purchaser
deems necessary or desirable including, without limitation, review of the
building permits, certificates of occupancy, environmental audits and
assessments, toxic reports, surveys, investigation of land use and development
rights, development restrictions and conditions that are or may be imposed by
governmental agencies, agreements with associations or other private parties
affecting or concerning the Property (if any), the condition of title, soils and
geological reports, engineering and structural certificates, tests and
third-party reports (if any), governmental agreements and approvals and
architectural plans and site plans. Purchaser represents and warrants that, in
entering into this Agreement, Purchaser has not relied on any representation,
warranty, promise or statement, express or implied, of Seller, CBM, MI or Owner,
or anyone acting for or on behalf of Seller, CBM, MI or Owner, other than as
expressly set forth in this Agreement; AND THAT, AS A MATERIAL INDUCEMENT TO THE
EXECUTION AND DELIVERY OF THIS AGREEMENT BY SELLER, CBM OR MI, PURCHASER
ACKNOWLEDGES THAT THE PROPERTY WILL, UPON THE ACQUISITION BY PURCHASER OF THE
OWNERSHIP INTEREST, BE IN ITS "AS IS" CONDITION AND IN ITS "AS IS" STATE OF
REPAIR, WITH ALL FAULTS SUBJECT ONLY, HOWEVER, TO THE EXPRESS COVENANTS,
REPRESENTATIONS AND WARRANTIES MADE BY THE SELLER, CBM, AND MI FOR THE BENEFIT
OF PURCHASER EXPRESSLY SET FORTH IN THIS AGREEMENT.
Except as otherwise expressly provided in this Agreement or any
documents executed and delivered by Seller, CBM, or MI to the Purchaser at the
Closing, the Seller, MI, CBM and Owner disclaim the making of any
representations or warranties, express or implied, regarding the Ownership
Interest, Owner or Property or matters affecting the same, whether made by the
Seller, CBM, MI or Owner, on the Seller's behalf, CBM's behalf, MI's behalf or
Owner's behalf, or otherwise, including, without limitation, the physical
condition of the Property, title to, the boundaries or other survey matters of,
the Real Property, pest control matters, soil conditions, the presence,
existence or absence of hazardous wastes, toxic substances or other
environmental matters, compliance with building, health, safety, land use and
zoning laws, regulations and orders, structural and other engineering
characteristics, traffic patterns, market data, economic conditions or
projections, and any other information pertaining to the Property or the market
and physical environments in which it is located. The Purchaser acknowledges
that the Purchaser has entered into this Agreement with the intention of making
and relying upon its own investigation or that of third parties with respect to
the physical, environmental, economic and legal condition of each Property,
except as expressly provided in Section 6.12, Section 6.13, Section 6.15,
Section 6.16, Section 6.17, Section 6.19, Section 6.20 and Section 6.22. The
Purchaser further acknowledges that it has not received from or on behalf of the
Seller, CBM, MI or Owner, any accounting, feasibility, marketing, economic, tax,
legal, architectural, engineering, property management or other advice with
respect to this transaction and is relying solely upon the advice of third party
accounting, tax, legal, architectural, engineering, property management and
other advisors.
As used in this Agreement, the phrases "to Seller's knowledge," "to
Owner's knowledge", "to MI's knowledge" and/or "to CBM's knowledge" or words of
similar import shall mean the actual (and not constructive or imputed)
knowledge, without independent investigation or inquiry, of ▇▇▇▇▇ ▇▇▇▇▇▇ (and
any subsequent officer of Lodging Development at MI having direct oversight
responsibility for the transactions contemplated hereby), or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(and any subsequent finance officer of MI having direct oversight responsibility
for the transactions contemplated hereby), or ▇▇▇ ▇▇▇▇▇ (and any subsequent
officer of MI serving as project manager for the transaction contemplated
hereby), or ▇▇▇▇ ▇▇▇ (and any subsequent Vice President - Design and Project
Management of Marriott International Design and Construction Services, Inc.
having direct oversight responsibility for the transactions contemplated hereby)
or of an employee of Seller or MI, or any Affiliated Person as to either,
assigned to work at the Property in connection with construction of the
Improvements and/or in connection with the installment of the FF&E on a
full-time basis, if any.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
To induce the Seller, CBM and MI to enter into this Agreement, the
Purchaser (and, to the extent specified below, CHP) represents and warrants to
the Seller, MI and CBM as follows:
7.1 Status and Authority of the Purchaser. The Purchaser is duly
organized and validly existing under the laws of the jurisdiction in which it
was formed, and has all requisite power and authority under the laws of such
state and under its charter documents to enter into and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby. The
Purchaser is, or will be by the Closing Date, duly qualified and in good
standing in the Commonwealth of Pennsylvania.
7.2 Status and Authority of the Guarantors. CHLP is a limited
partnership duly organized and validly existing under the laws of the State of
Delaware. CHP is a corporation duly organized and validly existing under the
laws of the State of Maryland. CHP and CHLP each has all requisite power and
authority under the laws of the state under whose laws it has organized or
incorporated and under their respective charter documents to enter into and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby. CHLP is, or will be by the Closing Date, duly qualified and
in good standing in the Commonwealth of Pennsylvania.
7.3 Action of the Purchaser. The Purchaser has taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
and upon the execution and delivery of any document to be delivered by the
Purchaser on or prior to each Closing Date, such document shall constitute the
valid and binding obligation and agreement of the Purchaser, enforceable against
the Purchaser in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting the rights and remedies of creditors and general
principles of equity.
7.4 No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by the Purchaser, nor compliance with the terms
and provisions hereof, will result in any breach of the terms, conditions or
provisions of, or conflict with or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any property or assets of the
Purchaser pursuant to the terms of any indenture, mortgage, deed of trust, note,
evidence of indebtedness or any other agreement or instrument by which the
Purchaser is bound.
7.5 Litigation. Purchaser has received no written notice of and, to
Purchaser's knowledge, no investigation, action or proceeding is pending and, to
Purchaser's knowledge, no action or proceeding is threatened and Purchaser has
received no notice of, and to Purchaser's knowledge, no investigation looking
toward such an action or proceeding has begun, which questions the validity of
this Agreement or any action taken or to be taken pursuant hereto.
The representations and warranties made in this Agreement by the
Purchaser are made as of the date hereof and shall be deemed remade by the
Purchaser as of the Closing Date with the same force and effect as if made on,
and as of, such date. All representations and warranties made in this Agreement
by the Purchaser shall survive the Closing for a period of one year. Any action,
suit or proceeding with respect to the truth, accuracy or completeness of any
such representation or warranty shall be commenced and served, if at all, on or
before the date which is twelve (12) months after the date of Closing and, if
not commenced on or before such date, thereafter shall be void and of no force
or effect.
As used in this Agreement, the phrase "to Purchaser's knowledge" or
words of similar import shall mean the actual (and not constructive or imputed)
knowledge, without independent investigation or inquiry, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or
▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇, or C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, or any subsequent officer
or employee of CHLP or CHP, or any Affiliated Person as to CHLP or CHP, having
direct oversight responsibility for the transactions contemplated in this
Agreement.
SECTION 8. COVENANTS OF THE SELLER.
The Seller and MI hereby covenant with the Purchaser as follows:
8.1 Compliance with Laws. From the date of this Agreement to the
Closing Date, to cause the Owner to use commercially reasonable efforts to
comply in all material respects with (i) all laws, regulations and other
requirements affecting the Property, from time to time applicable, of every
governmental body having jurisdiction of the Property or the use or occupancy of
any Improvements located thereon and (ii) all terms, covenants and conditions of
instruments of record affecting such Property.
8.2 Completion of Punchlist/Correction of Defects. If necessary, after
Closing hereunder, to complete, at the Seller's or MI's cost, all punch-list
items and to correct, at Seller's or MI's cost, all defects in the Renovation
Work that are discovered by Owner or Purchaser and disclosed to the Seller
within one year following the acceptance of the Renovation Work by Owner from
the general contractor for such Renovation Work. At Closing, Seller or MI shall,
at Purchaser's request, certify the outside date of such one-year warranty
period to Purchaser. The Purchaser agrees to cooperate, or cause the Owner to
cooperate, with the Seller, MI and/or the Tenant in enforcing any applicable
warranties or guaranties with respect to such defects. Seller, MI and/or Tenant
shall have the exclusive right and obligation to pursue the aforementioned
rights and remedies; however, in the event that Seller, MI and/or Tenant fail to
exercise such rights and remedies, after ten (10) days from notice by Purchaser
to Seller and MI of such failure to exercise such rights and remedies, Owner
shall then have the right to pursue the same. The provisions of this Section 8.2
shall survive the Closing under this Agreement.
8.3 [Intentionally Omitted].
8.4 [Intentionally Omitted].
8.5 Final Payment. Upon final payment to the general contractor, Seller
shall provide Purchaser with a copy of the final requisition received from the
general contractor, evidence of Owner's payment thereof, and a final release of
liens.
SECTION 9. APPORTIONMENTS.
9.1 Apportionments. Representatives of the Purchaser, Tenant and the
Seller shall make and perform any and all of the adjustments and apportionments
which are appropriate and usual for a transaction of this nature, taking into
account the applicable provisions of the Lease and this Agreement. The
adjustments hereunder shall be calculated or paid in an amount based upon a fair
and reasonable estimated accounting performed and agreed to by representatives
of the Seller, Tenant and the Purchaser at the Closing. Subsequent final
adjustments and payments shall be made in cash or other immediately available
funds as soon as practicable after the Closing Date, and in any event within
ninety (90) days after such Closing Date, based upon an agreed accounting
performed by representatives of the Seller, Tenant and the Purchaser. In the
event the parties have not agreed with respect to the adjustments required to be
made pursuant to this Section 9.1 within such ninety-day period, upon
application by either party, a certified public accountant reasonably acceptable
to the Purchaser and the Seller shall determine any such adjustments which have
not theretofore been agreed to between the Seller and the Purchaser. The charges
of such accountant shall be borne fifty percent (50%) by the Seller and fifty
percent (50%) by the Purchaser.
Seller and Purchaser acknowledge and agree that Purchaser, in acquiring
the Ownership Interest hereunder, is doing so based on the understanding that
the Assets will be owned by Owner at the time of Closing, and that any and all
other assets, including without limitation, cash on hand or in accounts in
excess of Owner's liabilities, will be distributed to and/or retained by, and be
the property of, Seller and CBM in accordance with their respective ownership
interests in Owner just prior to Closing.
9.2 Closing Costs. (a) All Third-Party Costs (hereinafter defined)
shall be borne fifty percent (50%) by Seller and fifty percent (50%) by
Purchaser. As used herein, the term "Third-Party Costs" shall include the
following: (i) the Environmental Report prepared in connection with the purchase
and sale of the Ownership Interest pursuant to this Agreement; (ii) the Updated
Survey of the Real Property prepared in connection with due diligence under this
Agreement; (iii) premiums for the title insurance policies to be provided at the
Closing pursuant to Section 2.3 and Section 4.3(a); (iv) any closing or escrow
charges or other expenses payable to the Title Company conducting the Closing;
and (v) property appraisals prepared in connection with the purchase and sale of
the Ownership Interest pursuant to this Agreement. Seller and Purchaser each
agree to cooperate with each other in minimizing due diligence, closing and
other costs to be incurred in connection with the transactions contemplated
hereby.
(b) Seller and Purchaser shall each pay one-half of any transfer,
sales, use, recordation or other similar taxes, impositions or expenses incurred
in connection with the Closing of the transactions contemplated hereby and/or
the recordation or filing of any documents or instruments in connection
therewith or the sale, transfer or conveyance of any of the Property in
connection with the transaction contemplated hereby and the entering into of the
Lease of the Property from Owner to Tenant; provided Owner (and derivatively,
Seller and CBM in accordance with their respective interests in Owner) shall be
responsible for any taxes due in respect of its, (and their respective) income,
franchise, net worth or capital, if any, and any privilege, sales and occupancy
taxes, due or owing to any governmental entity in connection with the operation
of the Property for any period of time prior to Closing, and Owner (and
derivatively Purchaser and CBM in accordance with their respective interests in
Owner), or Tenant, (to the extent Tenant is obligated to pay same under the
terms of the Lease), shall be responsible for all such taxes for any period from
and after Closing, and provided further that any income tax arising as a result
of the sale and transfer of the Ownership Interest by Seller to Purchaser shall
be the sole responsibility of Seller and any income tax arising as a result of
the Lease of the Property from Owner to Tenant shall be the sole responsibility
of Tenant (to the extent Tenant is obligated to pay same under the terms of the
Lease) or Owner (and derivatively Purchaser and CBM as the members of Owner).
(c) Except as expressly provided in this Section 9, Seller and
Purchaser shall each pay their own separate costs and expenses incurred in
connection with the transactions contemplated hereby, including the fees and
expenses of counsel in connection with the preparation and negotiation of this
Agreement, the Lease and all other documents and instruments in connection
therewith and in consummating any and all of the transactions contemplated
hereby and thereby. The obligations of the parties under this Section 9 shall
survive the Closing.
SECTION 10. [Intentionally Omitted].
SECTION 11. MISCELLANEOUS.
11.1 Agreement to Indemnify. (a) Subject to any express provisions of
this Agreement to the contrary, from and after Closing, (i) the Seller and MI
shall indemnify, defend and hold harmless the Purchaser (which term, for
purposes of this Section 11.1, shall include, as to matters arising out of
clause (y) below, CHP) from and against any and all obligations, claims, losses,
damages, liabilities, and expenses (including, without limitation, reasonable
attorneys' and accountants' fees and disbursements) arising out of (v) any
termination of employment of employees at the Property prior to or upon the
Closing resulting from the termination of employment of such employees by Owner
or its operator and/or the failure of Tenant to hire such employees (including,
without limitation, severance pay, wrongful discharge claims, and claims and/or
fines under federal, state or local statutes or regulations, including without
limitation the Worker Adjustment and Retraining Notification Act), (w) the
employment of such individuals prior to the Closing Date, including, without
limitation, employment-related claims; COBRA-related claims; disability claims;
vacation; sick leave; wages; salaries; payments due (or allocable) to any
medical, pension, and health and welfare plans, and any other employee benefit
plan established for the employees at the Property; and employee-related tax
obligations such as, but not limited to, social security and unemployment taxes
accrued as of the Closing Date, (x) events, acts, or omissions of the Owner that
occurred in connection with its ownership or operation of the Property prior to
the Closing Date or obligations accruing prior to the Closing Date under any
Contract of Owner (except to the extent of any adjustment made in respect of
such Contract at Closing and except to the extent provided for in Section 13),
(y) any material breach of a representation or warranty made by Seller and MI
(and CBM, as applicable) under Section 6 (as such representations and warranties
may be modified pursuant to said Section 6 and subject to the one-year
limitation period set forth therein), or (z) any claim against Owner or
Purchaser for damage to property of others or injury to or death of any person
or any debts or obligations of or against Owner and arising out of any event
occurring on or about or in connection with the Property or any portion thereof,
at any time or times prior to the Closing Date, and (ii) the Purchaser and, if
Purchaser is not CHLP, CHLP shall indemnify, defend and hold harmless the Seller
(which term, for the purposes of this Section 11.1, shall include MI and, as to
any matters arising out of clause (y) below, CBM) from and against any and all
obligations, claims, losses, damages, liabilities and expenses (including,
without limitation, reasonable attorneys' and accountants' fees and
disbursements) arising out of (x) events, acts, or omissions of the Owner that
occur in connection with its ownership or operation of the Property from and
after the Closing Date or obligations accruing from and after the Closing Date
under any Contract of Owner (except to the extent of any adjustment made in
respect of such Contract at Closing and except to the extent of CBM's obligation
as a Member of Owner to fund cash needs of Owner arising from and after Closing
pursuant to the Amended and Restated Operating Agreement), (y) any material
breach of a representation or warranty made by Purchaser and, if Purchaser is
not CHLP, CHLP under Section 7 (and subject to the one year limitation period
set forth therein), or (z) any claim against Owner or Seller for damage to
property of others or injury to or death of any person or any claims for any
debts or obligations of or against Owner and arising out of any event occurring
on or about or in connection with the Property or any portion thereof, at any
time or times from and after the Closing Date. The provisions of this Section
11.1 shall not apply to any liabilities or obligations with respect to hazardous
substances, the liabilities of the parties with respect thereto being governed
by the representation and warranty of Seller set forth in Section 6.17.
(b) Whenever it is provided in this Agreement that an obligation will
continue after Closing as an obligation of Owner or be assumed by Owner after
the Closing, the Purchaser and, if Purchaser is not CHLP, CHLP shall be deemed
to have also agreed to indemnify and hold harmless the Seller and its respective
successors and assigns from and against all claims, losses, damages,
liabilities, costs, and expenses (including, without limitation, reasonable
attorneys' and accountants' fees and expenses) arising from any failure of the
Purchaser to fund its 89% share of such obligation as a Member of Owner or to
perform any other obligation it may have as an 89% Member of Owner in respect of
the obligation so continued or assumed after the Closing (but not with respect
to any act or omission which occurred prior to Closing).
(c) Whenever any party shall learn through the filing of a claim or the
commencement of a proceeding or otherwise of the existence of any liability for
which another party is or may be responsible under this Agreement, the party
learning of such liability shall notify the other party promptly and furnish
such copies of documents (and make originals thereof available) and such other
information as such party may have that may be used or useful in the defense of
such claims and shall afford said other party full opportunity to defend the
same in the name of such party and shall generally cooperate with said other
party in the defense of any such claim.
(d) The provisions of this Section 11.1 shall survive the Closing
hereunder and the termination of this Agreement. All representations and
warranties made in this Agreement shall survive the Closing for a period of one
year. Any action, suit or proceeding with respect to the truth, accuracy or
completeness of any such representation or warranty shall be commenced, if at
all, on or before the date which is twelve (12) months after the date of Closing
and served promptly (but in no event later than sixty (60) days after
commencement) and, if not commenced on or before such date and so served,
thereafter shall be void and of no force or effect.
11.2 Brokerage Commissions. Each of the parties hereto represents to
the other party that it dealt with no broker, finder or like agent in connection
with this Agreement or the transactions contemplated hereby, and that it
reasonably believes that there is no basis for any other person or entity to
claim a commission or other compensation for bringing about this Agreement or
the transactions contemplated hereby. The Seller shall indemnify and hold
harmless the Purchaser and its successors and assigns from and against any loss,
liability or expense, including, reasonable attorneys' fees, arising out of any
claim or claims for commissions or other compensation for bringing about this
Agreement or the transactions contemplated hereby made by any broker, finder or
like agent, if such claim or claims are based in whole or in part on dealings
with the Seller. The Purchaser shall indemnify and hold harmless the Seller and
its successors and assigns from and against any loss, liability or expense,
including, reasonable attorneys' fees, arising out of any claim or claims for
commissions or other compensation for bringing about this Agreement or the
transactions contemplated hereby made by any broker, finder or like agent, if
such claim or claims are based in whole or in part on dealings with the
Purchaser. Nothing contained in this section shall be deemed to create any
rights in any third party. The provisions of this Section 11.2 shall survive the
Closings hereunder and any termination of this Agreement.
11.3 [Intentionally Omitted].
11.4 Publicity. The parties agree that no party shall, with respect to
this Agreement and the transactions contemplated hereby, contact or conduct
negotiations with public officials, make any public pronouncements, issue press
releases or otherwise furnish information regarding this Agreement or the
transactions contemplated hereby to any third party without the consent of the
other party, which consent shall not be unreasonably withheld, except as may be
required by law or as may be reasonably necessary, on a confidential basis, to
inform any rating agencies, potential sources of financing, financial analysts,
or to entities involved with a sale of a controlling interest in the Seller, the
Purchaser or any of their affiliates or to receive legal, accounting and/or tax
advice; provided, however, that, if such information is required to be disclosed
by law, the party so disclosing the information will use reasonable efforts to
give notice to the other party as soon as such party learns that it must make
such disclosure.
11.5 Notices. (a) Any and all notices, demands, consents, approvals,
offers, elections and other communications required or permitted under this
Agreement shall be deemed adequately given if in writing and the same shall be
delivered either in hand, by telecopier with written acknowledgment of receipt,
or by mail or Federal Express or similar expedited commercial carrier, addressed
to the recipient of the notice, postpaid and registered or certified with return
receipt requested (if by mail), or with all freight charges prepaid (if by
Federal Express or similar carrier).
(b) All notices required or permitted to be sent hereunder shall be
deemed to have been given for all purposes of this Agreement upon the date of
acknowledged receipt, in the case of a notice by telecopier, and, in all other
cases, upon the date of receipt or refusal, except that whenever under this
Agreement a notice is either received on a day which is not a Business Day or is
required to be delivered on or before a specific day which is not a Business
Day, the day of receipt or required delivery shall automatically be extended to
the next Business Day.
(c) All such notices shall be addressed,
if to the Seller to:
Marriott International, Inc
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/924.11
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasury
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/923.00
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Law Department
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
and
Holland & Knight LLP ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
If to the Purchaser, to:
CNL Hospitality Partners, LP
CNL Center at City Commons
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Vice President Finance and Administration
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
with a copy to:
Lowndes, Drosdick, Doster, ▇▇▇▇▇▇ & ▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Post Office Box 2809
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
If to Tenant:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/924.11
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasury
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Marriott International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 52/923.00
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Law Department
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
and
Holland & Knight LLP ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
(d) By notice given as herein provided, the parties hereto and their
respective successors and assigns shall have the right from time to time and at
any time during the term of this Agreement to change their respective addresses
effective upon receipt by the other parties of such notice and each shall have
the right to specify as its address any other address within the United States
of America.
11.6 Waivers, Etc. Any waiver of any term or condition of this
Agreement, or of the breach of any covenant, representation or warranty
contained herein, in any one instance, shall not operate as or be deemed to be
or construed as a further or continuing waiver of any other breach of such term,
condition, covenant, representation or warranty or any other term, condition,
covenant, representation or warranty, nor shall any failure at any time or times
to enforce or require performance of any provision hereof operate as a waiver of
or affect in any manner such party's right at a later time to enforce or require
performance of such provision or any other provision hereof. This Agreement may
not be amended, nor shall any waiver, change, modification, consent or discharge
be effected, except by an instrument in writing executed by or on behalf of the
party against whom enforcement of any amendment, waiver, change, modification,
consent or discharge is sought.
11.7 Assignment; Successors and Assigns. This Agreement and all rights
and obligations hereunder shall not be assignable by any party without the
written consent of the other party, except that the Purchaser may assign this
Agreement to any entity wholly owned, directly or indirectly, by CHLP provided,
however, that, in the event this Agreement shall be assigned to any entity
wholly owned, directly or indirectly, by CHLP, CHLP shall remain fully and
primarily liable for the obligations of the "Purchaser" hereunder. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Agreement is
not intended and shall not be construed to create any rights in or to be
enforceable in any part by any other persons.
11.8 Severability. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision or provisions
in question invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case.
11.9 Counterparts, Etc. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and shall supersede and take the place of any other
instruments purporting to be an agreement of the parties hereto relating to the
subject matter hereof. This Agreement may not be amended or modified in any
respect other than by the written agreement of all of the parties hereto.
11.10 Governing Law. This Agreement shall be interpreted, construed,
applied and enforced in accordance with the laws of the State of Maryland.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in such court or courts located in
the State of Maryland as is provided by law; and the parties consent to the
jurisdiction of said court or courts located in the State of Maryland and to
service of process by registered mail, return receipt requested, or by any other
manner provided by law.
11.11 Performance on Business Days. In the event the date on which
performance or payment of any obligation of a party required hereunder is other
than a Business Day, the time for payment or performance shall automatically be
extended to the first Business Day following such date.
11.12 Attorneys' Fees. If any lawsuit or arbitration or other legal
proceeding arises in connection with the interpretation or enforcement of this
Agreement, the prevailing party therein shall be entitled to receive from the
other party the prevailing party's costs and expenses, including reasonable
attorneys' fees, incurred in connection therewith, in preparation therefor and
on appeal therefrom, which amounts shall be included in any judgment therein.
11.13 Relationship. Nothing herein contained shall be deemed or
construed by the parties hereto, nor by any third party, as creating the
relationship of principal and agent or of partnership or joint venture between
the parties hereto, it being understood and agreed that no provision contained
herein, nor any acts of the parties hereto shall be deemed to create the
relationship between the parties hereto other than the relationship of the
seller and purchaser.
11.14 Section and Other Headings. The headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
11.15 Disclosure. From and after Closing, and at the written request of
Purchaser, Seller shall provide such financial statements in respect of Owner's
operations from the date of Owner's commencement of business to the date of such
Closing to the extent such financial statements are required by applicable
securities laws and regulations and the SEC's interpretation thereof; provided,
however, that (i) Seller reserves the right, in good faith, to challenge, and
require Purchaser to use commercially reasonable efforts to challenge, any
assertion by the SEC, any other applicable regulatory authority, or Purchaser's
independent public accountants that applicable law or regulations require the
provision of such financial statements, (ii) Purchaser shall not, without
Seller's consent (which consent shall not be unreasonably withheld, delayed or
conditioned), acquiesce to any such challenged assertion until Purchaser has
exhausted all reasonable available avenues of administrative review, and (iii)
Purchaser shall consult with Seller in pursuing any such challenge and will
allow Seller to participate therein if and to the extent that Seller so elects.
Any and all costs and expenses incurred by Seller, including without limitation
reasonable attorneys fees and expenses, in connection with providing such
financial statements to Purchaser or in connection with any challenge to an SEC
assertion (including Seller's consultation or participation with Purchaser in
respect of same) shall be reimbursed to Seller by Purchaser within ten (10) days
following written demand by Seller.
SECTION 12: SELLER AND MI REPURCHASE OBLIGATION; OTHER POST-CLOSING
DELIVERIES
12.1 Repurchase Requirement. If the Property Opening (hereinafter
defined) does not occur on or before the second anniversary of the Closing Date,
Purchaser shall have the right to require Seller and/or MI to repurchase the
Ownership Interest in accordance with the terms and conditions of this Section
12. As used herein, the term "Property Opening" means the satisfaction of each
of the following requirements:
(a) the receipt by Tenant (with copies to Owner) of the Franchisor
Letter acknowledging the Opening Date; and
(b) the occurrence of the Opening Date.
If Purchaser elects to exercise its right to demand Seller's or MI's
repurchase of the Ownership Interest under this Section (the "Repurchase
Right"), then Purchaser shall deliver, within thirty (30) days after the second
anniversary of the Closing Date, written notice to Seller and MI that Purchaser
has elected to exercise the Repurchase Right (the "Repurchase Notice"). The
Repurchase Notice shall specify a date, which date shall be not sooner that
thirty (30) days, nor more than sixty (60) days, from the day of delivery of the
Repurchase Notice, on which Purchaser and Seller (and/or MI) shall consummate
the purchase by Seller (and/or MI) of all of Purchaser's right, title and
interest in and to the Ownership Interest(the "Repurchase Closing") in
accordance with this Section 12.
12.2 Repurchase Closing. The Repurchase Price (as defined hereinbelow)
shall be paid at the Repurchase Closing in all-cash or with good funds
immediately available in Washington, D.C. Rent and every other entitlement and
obligation of the parties under the Lease and any other obligation of Owner
consistent with Section 9 shall be prorated as of the date of the Repurchase
Closing. The Repurchase Closing shall take place in the offices of Seller's
attorney in Washington, D.C., or another location mutually acceptable to
Purchaser and Seller. At the Repurchase Closing, Purchaser shall convey the
Ownership Interest back to Seller by a warranty assignment and assumption
agreement (substantially similar to the Warranty Assignment and Assumption
Agreement entered into at Closing), duly executed by Purchaser, assigning and
warranting to Seller all right, title and interest of Purchaser therein, free
from all liens, encumbrances, security interests, options and adverse claims of
any kind or character. Seller and/or MI shall pay any transfer, recordation or
other similar taxes, impositions or expenses incurred in connection with the
transfer and conveyance of the Ownership Interest at the Repurchase Closing.
Each party shall pay its own attorneys' fees.
12.3 Repurchase Price. Subject to adjustment as provided hereinbelow,
the Repurchase Price to be paid by Seller for the Ownership Interest shall be
Sixty Million Eight Hundred Thousand Dollars ($60,800,000). If a condemnation
action has commenced against Owner for any portion of the Property and Purchaser
shall have received condemnation proceeds from Owner or a governmental or
quasi-governmental entity for any portion of the Property prior to the
Repurchase Closing, Seller shall receive a credit against the Repurchase Price
in such amount of the condemnation proceeds paid to Purchaser or if no
condemnation award has been granted to or distributed by Owner, Purchaser shall
assign to Seller any and all right, title and interest Purchaser may have to
such condemnation proceeds to be received in connection with the Property. The
Repurchase Price calculated as described above shall be reduced by the amount of
any mortgages (other than any mortgage given in connection with the TIF
Financing (as such term is defined in the Amended and Restated Operating
Agreement)), judgment liens and other monetary encumbrances in a liquidated
amount of record and any other indebtedness of Owner whether or not such
indebtedness is secured by the Property or any part thereof; as of the date of
the Repurchase Closing which have not been previously satisfied and released by
the Owner and/or Purchaser.
12.4 Reports. Upon the closing of Seller's repurchase of the Ownership
Interest pursuant to this Section 12, following Purchaser's exercise of the
Repurchase Right, Purchaser shall provide Seller with any and all books,
records, contracts, reports, drawings and other documents in respect of the
ownership, operation and management of the Property which are in Purchaser's
possession or control and which have not previously been delivered to Seller.
12.5 Termination. Promptly following the Property Opening (or the
expiration of the aforesaid exercise period without Purchaser having exercised
its right of repurchase), Seller and Purchaser shall enter into a memorandum
confirming the occurrence of the Property Opening and the termination of this
Section 12.
12.6 Other Post-Closing Deliveries. Seller and/or MI shall obtain and
deliver to Purchaser, within one hundred twenty days (120) days after the
Closing Date, the following items:
(a) "As-Built" Drawings;
(b) Warranties issued in connection with the Renovation Work;
(c) Assignment from Stonebrick Annex Corporation ("Stonebrick") of its
rights under the general contractor's agreement and architect's
agreement (or at such later date as the work under the Agency
Agreement between Owner and Stonebrick has been completed);
(d) The Contracts;
(e) Final lien waivers for all first tier sub-contractors (to the
extent copies of the same are available to Seller);
(f) Permits identified in the Architect's Certificate; and
(g) No Violation Letter from the City of Philadelphia Department of
Licenses and Inspection.
SECTION 13. PURCHASE PRICE ADJUSTMENT.
13.1 Remaining Work and Payments. Owner is in the process of having the
punch list for the Renovation Work and certain other work at the Improvements
completed. It is understood and acknowledged that such work will not be
completed and paid for prior to Closing. Owner may also be responsible to pay
the contractor(s) for such work certain "retainage" held back out of prior
payments.
13.2 Adjustment to Purchaser Price and Capital Contributions. The
Purchaser shall be granted a downward adjustment to the Purchase Price in an
amount equal to eighty-nine percent (89%) of the amount of any payments to be
made by or on behalf of Owner for such work or retainage after Closing. Each
such credit to the Purchase Price shall be deemed to have been returned to
Purchaser under this Agreement and immediately paid over to the Owner by
Purchaser as its capital contribution to the Owner on account of the required
payment by Owner. The remaining eleven percent (11%) of each such post Closing
payment shall be contributed to Owner by or on behalf of CBM. The respective
capital accounts of Purchaser and CBM in Owner will be credited with such deemed
contributions. Seller or MI shall provide to Purchaser written evidence of the
amount, nature and time of each such payment in order that the adjustment to the
Purchase Price and aforesaid capital accounts may be properly recorded.
SECTION 14. CHANGE OF NAME OF OWNER.
14.1 Purchaser to Cover Name Change. Purchaser shall, on or before the
sixtieth (60th) day following the Closing Date, change (or cause to be changed)
the limited liability company name of the Owner from "Courtyard Annex, L.L.C."
to a different name; provided, however, that in no event shall the name so
chosen by Purchaser contain any of the names "Marriott," "Courtyard" or any
other names used by MI or any of its affiliates, including the Seller, or any
name or names which may be confusingly similar to said names.
[Signatures appear on the following page.]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as a
sealed instrument as of the date first above written.
SELLER:
COURTYARD ANNEX, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
PURCHASER:
CNL HOSPITALITY PARTNERS, LP
By: CNL Hospitality GP Corp., a Delaware
corporation, its general partner
By:/s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Vice President of Finance and
Administration
CBM:
CBM ANNEX, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
MI:
MARRIOTT INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Authorized Signatory
The undersigned, CNL Hospitality Properties, Inc., joins herein for the
purpose of (i) evidencing its agreement to enter into and deliver the Guaranty
of Landlord's Obligations (CHP and CHLP) and the Guaranty of Member's
Obligations, and (ii) confirming the representations and warranties made on its
behalf pursuant to the terms of the foregoing Agreement.
CNL HOSPITALITY PROPERTIES, INC.
By:/s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Vice President of Finance and
Administration