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EXHIBIT 2(g)
Frenchman's Reef
PURCHASE AND SALE AGREEMENT
by and among
PRIME HOSPITALITY CORP.,
as Seller,
and
MARRIOTT INTERNATIONAL, INC.,
as Purchaser
----------------------
September 15, 1999
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TABLE OF CONTENTS
PAGE
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1. Agreement to Sell and Purchase Subject Property.........................
2. Purchase Price and Terms................................................
3. Allocation of Purchase Price............................................
4. Transaction Taxes.......................................................
5. Environmental...........................................................
6. Debts and Liabilities...................................................
7. Representations and Warranties of Seller................................
8. Title and Survey........................................................
9. Conditions Precedent to Closing.........................................
10. Closing.................................................................
11. Risk of Loss............................................................
12. Indemnification.........................................................
13. Inventory of Personal Property..........................................
14. Union/Contract/Contract Employees.......................................
15. Default.................................................................
16. Notice .................................................................
17. Brokers.................................................................
18. Publicity...............................................................
19. Purchaser's Right of Entry..............................................
20. Assignment..............................................................
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21. No Third Party Beneficiaries............................................
22. Attorney's Fees.........................................................
23. Time....................................................................
24. Severability............................................................
25. Counterparts; Facsimile Signatures......................................
26. Binding Effect, Etc.....................................................
27. Further Assurances......................................................
28. [Intentionally Deleted].................................................
29. Exclusivity.............................................................
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), made and
entered into this _____ day of September, 1999, by and between PRIME HOSPITALITY
CORP, a Delaware corporation (hereby referred to as "Seller"), and MARRIOTT
INTERNATIONAL, INC., its successor or assigns (hereinafter referred to as
"Purchaser").
WITNESSETH:
WHEREAS, Seller desires to sell, convey, transfer, assign and
deliver to Purchaser, and Purchaser desires to purchase from Seller:
(i) those certain parcels of real property situated in St.
Xxxxxx in the Territory of the U.S. Virgin Islands, more
particularly described on Exhibit A attached hereto,
together with all structures, improvements and fixtures
located thereon, and together with all hereditaments,
appurtenances, easements, and other rights and interests
belonging or incident thereto (the "Real Property"); and
(ii) all of the assets of the resort businesses conducted by
Seller on the above-described Real Property under the
trade names "Frenchman's Reef Beach Resort" and "Morning
Star Beach Resort" (collectively hereinafter referred to
as the "Resorts"), including without limitation the
rights, title, and interest to the name and trademarks
"Frenchman's Reef Beach Resort" and "Morning Star Beach
Resort;" and all registrations for such names (the
"Names") to the extent assignable, all goodwill of the
businesses, all furniture, vehicles, appliances,
televisions and other video equipment, furnishings, floor
and wall coverings, fixtures (including lighting, heating,
plumbing, and ventilating fixtures, and everything
attached in any manner to walls, ceilings or floors), all
fixed assets and supplies and inventories (as such terms
are defined in the Uniform System of Accounts for the
Lodging Industry, Ninth Revised Edition), appliances,
equipment, machinery, security and alarm and telephone and
sprinkler and computer systems, supplies, advance room
reservations and deposits, (such deposits being referred
to as "Room Reservation Deposits") any and all telephone
and telecopy numbers related to and used in the operation
of the Resorts, Seller's right, title and interest in all
leases or services contracts listed on Exhibit E hereto,
all permits and licenses related to the operation of the
Real Property and Resorts, and all other tangible and
intangible personal property owned by Seller and presently
located upon or within the Real Property or otherwise used
in connection with the operation of the
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Resorts or the operation and maintenance of the Real
Property, building plans and specifications, equipment
warranties and the like, and copies of all financial and
operating records of the business (other than personnel
files) and of the Real Property, specifically including
without limitation all those tangible assets to be listed
on Exhibit B pursuant to the terms of Section 13 hereto,
but specifically excluding all cash, bank accounts,
accounts receivable, and liabilities of any kind or
nature, except for the Room Reservation Deposits and
liabilities specifically assumed herein (said Real
Property and Business Assets being hereinafter
collectively referred to as the "Subject Property"); and
WHEREAS, Purchaser desires to acquire the Subject Property from
Seller, all upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises, the
mutual covenants and agreements herein contained, and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:
1. AGREEMENT TO SELL AND PURCHASE SUBJECT PROPERTY. Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller all of
the above-described Subject Property, subject to the terms and conditions herein
contained. It is expressly understood that this transaction does not include any
of Seller's cash, bank accounts or accounts receivable, other than any Room
Reservation Deposits, and that, other than as expressly set forth in this
Agreement, Purchaser shall not assume nor be liable or responsible in any manner
for any of the liabilities or obligations of Seller of any kind or nature
relating to the Subject Property, the Resorts' business, or any other matter
whatsoever, existing or accrued or otherwise arising prior to the date of
Closing hereunder. Purchaser will be obligated to honor advance room
reservations, to assume Seller's yellow pages advertising contracts, and to
assume those space leases, leases on equipment, machinery and items of personal
property, and service contracts identified on Exhibit E hereto (collectively,
the "Leases and Contracts"), and to assume the other obligations as may be
expressly set forth in this Agreement.
2. PURCHASE PRICE AND TERMS. The purchase price for the
Subject Property shall be Seventy Five Million Dollars ($75,000,000). The total
purchase price shall be payable by Purchaser as follows:
(a) Xxxxxxx Money Deposit:
A $2,000,000 xxxxxxx money deposit (this deposit, and all
interest thereon, the "Xxxxxxx Money Deposit") will be
delivered to Chicago Title Insurance Company ("Escrow
Agent"), within five business days following receipt by
Purchaser of a fully-executed copy of this Agreement, such
sum to be promptly deposited by
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Escrow Agent in an interest-bearing money market escrow
account at a federally insured banking institution, and to
be held by Escrow Agent in such account pursuant to the
terms of this Agreement. If Purchaser fails to deliver the
Xxxxxxx Money Deposit by said deadline, this Agreement
shall be null and void and the parties shall be relieved
of all further rights or responsibilities hereunder. At
the time of the making of such Xxxxxxx Money Deposit,
Seller, Purchaser and Escrow Agent shall execute an Escrow
Instruction Letter substantially in the form of Exhibit C
hereof.
(b) Balance:
The balance of the Purchase Price (subject to customary
closing adjustments and those adjustments set forth
herein) shall be delivered by Purchaser to Escrow Agent in
the form of wired funds at the Closing. Title company
escrow and closing fees shall be shared equally between
the parties. Any monetary lien or encumbrance on the
Subject Property or any part thereof shall be paid in full
by Seller at Closing, and shall be released/terminated of
record prior to or at Closing.
(c) Apportionments.
(i) Seller shall be entitled to and responsible for all
income, cost and expense which accrues up to the day
preceding Closing with respect to the Subject Property.
Purchaser shall be entitled to and responsible for all
income, cost and expense accruing as of the date of
Closing and thereafter with respect to the Subject
Property. In accordance with the foregoing, closing
adjustments for the Subject Property will be made as
follows:
a. All real estate taxes, personal property
taxes, gross receipt taxes, ad valorem taxes and
assessments and other state, county or city taxes, fees,
charges and assessments affecting the Subject Property
shall be prorated as of the Closing on an accrual basis
based on the most recent ascertainable amounts of or other
reliable information in respect to each such item of
income and expense. Franchise fees and all other expenses
due Purchaser or its affiliates (in its capacity as
franchisor) shall be paid by Seller based upon all
revenues due Seller through Closing. Any net credit due to
Seller as a result of such prorations shall be paid in
cash by Purchaser at Closing. Any net credit due to
Purchaser as a result of such prorations shall be credited
against the Purchase Price.
b. The following items shall be prorated as of
the Closing on an accrual basis based on the most recent
ascertainable
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amounts of or other reliable information in respect to
each such item of income and expense:
(i) Utility charges.
(ii) Income, if any, from the operation of the
Resorts including, but not limited to, leases and
concession agreements with third parties, room
rentals, restaurant, telephone, room service and
other charges due from guests or other customers
(Seller and Purchaser shall each be entitled to
receive a credit equal to one-half of the amount of
all transient guest revenues for the full night
preceding the Closing).
(iii) Commission of rental agents, travel agents,
credit organizations and others, provided, however,
that commissions respecting guest room rentals for
the night preceding the Closing shall be treated in
the same fashion as guest room rentals.
(iv) Seller's prepayments of purchase orders, and
other prepaid items.
(v) Amounts paid or payable under the Leases and
Contracts, if any, assigned to Purchaser at the
Closing. All security deposits shall be transferred
to Purchaser.
(vi) All other costs and expenses in connection
with operation of the Resorts, which are
customarily and usually apportioned on the purchase
or transfer of a hotel property.
(vii) Laundry, valet and vending machines income.
(ii) At the Closing, Purchaser shall pay to Seller for
all unopened items of food, beverage and operating
supplies which are in good and usable condition for the
purposes of the operation of the Resorts, as further
described by category on Exhibit F hereto, and which are
in quantities normal and customary for resorts of the
nature and size of the Resorts. The payment shall be in
the amount of Seller's cost for such items.
(iii) Seller shall be entitled to all accounts receivable
accruing, but not realized, prior to 11:59 p.m. on the
night preceding Closing. Payments relating to such
accounts receivable realized after Closing shall be the
sole property of Seller and to the extent Purchaser
receives any such payments, it will promptly remit them
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to Seller. Purchaser will cooperate with Seller in
connection with Seller's efforts to collect its account
receivables.
(iv) Accounting: Except as otherwise expressly provided
herein, all apportionments and adjustments shall be made
on an accural basis in accordance with generally accepted
accounting principles. The computation of the adjustments
shall be jointly prepared by Seller and Purchaser, and,
upon the request of either Purchaser or Seller, shall be
reviewed by a reputable accounting firm mutually selected
by Seller and Purchaser (the "Accountants") and reviewed
by representatives of both Purchaser and Seller. To the
extent the exact amount of any adjustment item provided
for in this Agreement cannot be precisely determined on
the Closing, the Seller and Purchaser (or, if either
elects, the Accountants) shall estimate the amount
thereof, for purposes of computing the net amount due
Seller or Purchaser pursuant to this Agreement and shall
determine the exact amount thereof not later than sixty
(60) days after the Closing. The determinations made by
the Accountants shall be binding on both Seller and
Purchaser. The fees and expenses of the Accountants shall
be borne by the party requesting the use of the
Accountants.
(v) The parties hereto will agree at Closing to adjust
and/or apportion the Purchase Price, as necessary due to
the assumption by Purchaser of a settlement agreement
reached by and between Seller and Xxxxxxx and Xxxx
Xxxxxxxx, as more particularly set forth in that certain
letter agreement dated August 3, 1999.
3. ALLOCATION OF PURCHASE PRICE. Set forth on Exhibit D
hereof is the agreed upon allocation of the total Purchase Price; such
allocation being made only among land, buildings, fixtures, personal property
and good will.
The parties further agree that each of them will timely file IRS
Form 8594 with the Internal Revenue Service, reflecting the allocation set forth
above.
4. TRANSACTION TAXES. All documentary fees/stamps/taxes and
real property and transfer taxes shall be paid 50% by Seller and 50% by
Purchaser. Purchaser shall pay for all other recording taxes and any sales or
use taxes imposed upon the sale of any personal property.
5. ENVIRONMENTAL. Purchaser has delivered to Seller that
certain Phase I Environmental Site Assessment dated June, 1999 prepared by
Xxxxxxx Engineering Science, Inc. (the "Environmental Report"). Seller agrees
that prior to Closing, it shall undertake and complete, to Purchaser's
reasonable satisfaction, the items specified under Section 6.2 of the report, a
copy of which is attached hereto as Exhibit G. Purchaser will inspect Seller's
work within fifteen (15) days of Seller's written notice that
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such work is complete. No later than four (4) days after the expiration of said
fifteen (15) day period Purchaser will notify Seller in writing of any
corrections it requires in order for the work to be completed in accordance with
industry standards for resorts of a similar nature. Seller shall promptly make
any such corrections. Upon Seller's final completion of the work required under
Section 5, Seller shall have no further responsibility or liability with respect
to the correction of items specified in Section 6.2 of the Environmental Report.
6. DEBTS AND LIABILITIES. Other than as expressly set forth
in this Agreement, it is expressly understood that Purchaser shall not assume or
pay, perform or discharge or cause to be paid, performed or discharged any
obligation or liability of Seller. Purchaser agrees to honor advance room
reservations made by Seller prior to Closing in the ordinary course of business,
to assume Seller's yellow pages advertising contracts, and to accept the
assignment of and to assume the Leases and Contracts. Other than as expressly
set forth in this Agreement, Seller agrees to pay all debts and liabilities
relating to the Subject Property and the Resorts business at or prior to the
Closing hereunder. The parties agree that Purchaser shall acquire title,
ownership and possession of the Subject Property free and clear of all claims of
any kind or nature whatsoever (excepting (a) advance room reservations, (b) Room
Reservation Deposits, (c) obligations pursuant to the leases and service
contracts set forth on Exhibit E hereto, and (d) all matters of record).
7. REPRESENTATIONS AND WARRANTIES OF SELLER.
(a) Seller hereby makes the following additional
representations and warranties to Purchaser as of the date
of this Agreement, continuing throughout the term of this
Agreement, and as of the date and time of Closing
hereunder, with the knowledge that Purchaser is acting in
full reliance thereon;
(i) Seller possesses full power and authority to enter
into and perform this Agreement and the execution,
delivery, or performance of this Agreement will
not conflict with or violate the terms or
provisions of any loan agreement (excepting those
which will be discharged at the Closing
hereunder), contract, other agreement, court
order, decree, statute, rule or regulation by
which Seller is bound or affected. This Agreement
is a valid and binding obligation of Seller, and
is enforceable against Seller in accordance with
its terms. Seller is duly organized, validly
existing and in good standing under the laws of
the state of formation, has all requisite power
and authority under the laws of such state and by
proper corporate proceedings to execute and
consummate this Agreement and the transactions
contemplated hereby, and shall deliver to
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Purchaser prior to Closing a certificate of good
standing and copies of such corporate
authorizations.
(ii) Seller is the owner of, both beneficially and of
record, and has good and marketable title to, all
of the Subject Property, and at the Closing will
convey and assign to Purchaser good and marketable
title to all of the Subject Property free and
clear of all encumbrances, covenants, easements,
leases and restrictions, excepting (a) those items
set forth on the Title Commitment (as defined in
Section 8 hereof) (the "Permitted Exceptions"),
and (b) those rights of governmental entities
pursuant to the terms of the Coastal Zone Permit
No. C2T-1-81W and C2T-12-90W, (c) monetary liens,
judgments and mechanic's liens, which will be
satisfied and released at Closing and (d) those
leases and service contracts set forth on Exhibit
E hereto. Seller has no ownership or other direct
or indirect interest in any strip or
parcel of land which adjoins the Real Property. To
the best of Seller's knowledge and belief, no
further consent of any person or entity, and no
license, approval, or authorization of, or
registration or declaration with, any governmental
authority is required in connection with the
execution and delivery of or performance by Seller
of its obligations under this Agreement.
(iii) Seller holds Federal Trademark No. 1,976,397 and
1,973,749 for the names "Frenchman's Reef Beach
Resort" and "Morning Star Beach Resort."
(iv) Seller shall continue to be solely responsible for
and shall pay as and when due all of Seller's
obligations, debts and liabilities which are
associated in any way with the Subject Property
and/or the Resorts business accruing prior to the
Closing, and not otherwise expressly assumed by
Purchaser.
(v) Within the times and in the manner prescribed by
law, Seller has filed all federal, state and local
tax returns required by law and has paid all
applicable sales, use, withholding, real and
personal property, income, FICA, employment and
other taxes, assessments and penalties due and
payable, in connection with the Subject Property
and the Resorts business. There are no proceedings
pending, or to the best of Seller's knowledge,
threatened with or by any taxing authorities as to
taxes of any nature payable by
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Seller in connection with the Subject Property or
the Resorts business.
(vi) There are no outstanding judgments against Seller,
and there is no suit, action, claim, demand,
arbitration, or legal, administrative or other
proceedings pending or, to the best of Seller's
knowledge, threatened against or affecting the
Subject Property or the Resorts business, and
Seller does not know or have reasonable grounds to
know of any basis for any such action or claim.
(vii) Other than as set forth in Exhibit M, to the best
of Seller's knowledge and belief, Seller has
complied with, and is not in violation of, any
applicable federal, state or local statutes, laws,
rules and regulations affecting the Subject
Property or the Resorts business.
(viii) Other than documents recorded in the public
records, the Leases and Contracts to be assigned to
Purchaser pursuant to the terms of this Agreement,
the Coastal Zone Permit No. C2T-1-81W and
C2T-12-90W and agreements and easements with
governmental bodies and utility companies which are
customary reasonably necessary for the development
and operation of the Subject Property and the
Resorts business (and of which true and complete
copies have been supplied by Seller to Purchaser),
Seller is not a party to or bound by any
agreements, contracts, employment arrangements,
leases, subleases or commitments relating to the
Subject Property or any part or portion thereof or
the Resorts business which will extend beyond or
survive the Closing hereunder.
(ix) Seller has received no written notice that the
present development, improvement, use and
operation of the Subject Property and of the
Resorts business are not in compliance with or
violate any local, state or federal laws,
ordinances, resolutions, codes, regulations or
requirements of any kind or nature, including,
without limitation, zoning, adequacy of parking,
land use laws and building codes, or any private
covenants, restrictions, or setbacks. There are
presently, and at the date of Closing there will
be, in effect all material licenses, permits and
other authorizations necessary for the Seller's
use, occupancy and operation of the Subject
Property and the Resorts business as it is
currently being used.
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(x) To the best of Seller's knowledge, Seller is in
compliance and in good standing with all permits,
approvals, licenses, grants and other similar
items from governmental entities relating to, or
affecting the Property, (including, without
limitation, liquor licenses, coastal zone
management permits and industrial development
credit agreements) (collectively, "Governmental
Permits and Grants"). Set forth on Exhibit I
hereto is a complete list of all Governmental
Permits and Grants.
(xi) There are no unpaid ad valorem taxes on the Real
Property (except to the extent current taxes are
not yet due and payable) or governmental or special
district assessments or levies for sewer, sidewalk,
curb, gutter, water, paving, electrical, gas, storm
drainage, park dedication fees, or other such
impositions related to the Real Property, matured
or unmatured, and Seller does not know of any such
threatened assessments or levies.
(xii) Seller has not received written notice of any
pending or threatened condemnation proceeding,
proposed change of zoning, or other proposed land
use regulation or action affecting the Real
Property.
(xiii) All bills for work done or materials furnished with
respect to the Real Property have been paid in full
or will be paid in full and discharged by Seller at
or prior to Closing.
(xiv) Seller is not a party to any oral or written
employment contracts or agreements with respect to
the Property other than those set forth on Exhibit
H hereto (the "Employment Agreements"). To the best
of Seller's knowledge, no party is in default under
any Employment Agreement.
(xv) There are no property interests, buildings,
structures or other improvements or personal
property that are owned or leased by Seller which
are necessary for the operation of the Subject
Property that are not being conveyed pursuant to
this Agreement.
(xvi) Seller has not received written notice from any
insurance carrier of defects or inadequacies in the
Subject Property which, if uncorrected, would
result in a termination of insurance coverage or an
increase in the premiums charged therefor.
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(xvii) All space leases, leases and service contracts for
any space, property services or advance room
contracts relating to the Subject Property and/or
the Resort are listed on Exhibit E hereto, and
Seller has supplied to Purchaser true and complete
copies of all such documents.
(xviii) Exhibit H sets forth and describes in detail, as to
each employee, all accrued but unpaid vacation pay
and sick leave, a description of whether any of
Seller's employees are participating in a Seller
group health plan, and all other fringe benefits,
as well as a schedule of employees, showing
salaries and duties, with a statement of the length
of service of each such employee, such Exhibit to
be brought current to the date of Closing.
(xix) Other than as set forth in Exhibit M, to the best
of knowledge of Seller, there are no Hazardous
Materials upon or in any way affecting the Real
Property. As used herein, "Hazardous Materials"
shall mean any chemical, material or substance to
which exposure is prohibited, limited, or regulated
by any federal, state, county or regional authority
and/or which is known to pose a hazard to the
health and/or safety of humans, animals or the
environment.
(xx) Between the date of this Agreement and the Closing,
Seller:
(a) Shall not transfer or otherwise dispose of
any interest in the Subject Property or any part
thereof and shall not create or suffer the
imposition of any further liens or encumbrances or
restrictions on the Subject Property or any
interest therein.
(b) Shall maintain all existing policies of
insurance on the Subject Property.
(c) Shall maintain the Subject Property and all
mechanical, heating, plumbing, electrical and other
utility systems which serve the Real Property in
such repair and order as existed on the date of
this Agreement.
(d) Shall conduct the Resorts' business only in
the normal and ordinary course thereof, consistent
with past practices, and in compliance with the
law and shall continue to use its reasonable and
good faith efforts to take guest room reservations
and to otherwise promote the
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business of the subject property in the same
manner as Seller did prior to the execution of
this Agreement; and shall maintain the level of
fixed assets and supplies and inventories as has
been its practice within the past one (1) year
from the date of this Agreement.
(e) Shall not make any material alterations in
the Subject Property.
(f) Shall not enter into any contracts,
agreements or leases affecting the Subject
Property which will survive the Closing hereunder.
(g) Shall not take any actions of any kind which
might interfere with the performance by any party
hereto of the obligations and responsibilities set
forth herein or the enjoyment by any party hereto
of the rights created hereby.
(h) Shall use and operate the Subject Property
in compliance with all applicable laws, rules,
regulations of any applicable governmental agency
and the requirements of any mortgage, operating
agreement or insurance policy affecting the
Subject Property.
(i) Shall file for and obtain, at Seller's
expense, any federal, state or local
authorizations, consents, approvals, or
clearances, which may be required in connection
with Seller's conveyance of the Subject Property
to Purchaser.
(xxi) Seller has terminated the employment of Xxxx
Xxxxxxx and Xxxx Xxxxxxx no longer has any rights
to live on the Subject Property.
(xxii) Seller has no knowledge of any impediment to the
issuance of the Second Certificate (as defined in
Section 9(a)(v) Conditions Precedent to Closing
hereof) other than the normal governmental
requirements for such issuance.
(b) To the best of Seller's knowledge: (i) the information
that has been furnished to Purchaser by Seller pursuant to
this Agreement does not contain any material
misrepresentation as to any material fact; and (ii) Seller
has not omitted any material fact or information which
would reasonably affect a prudent investor's decision to
purchase the Subject Property and the Resorts business in
the manner herein set forth.
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(c) To Seller's "best knowledge" or similar qualification
means to the actual knowledge of Xxxxxx Xxxxxxxxx, General
Counsel; Xxxxxx Xxxxxx, vice president - construction; and
Xxxxxx XxXxx, General Manager, without independent inquiry
other than to the internal files of Seller.
(d) All representations, warranties, and covenants contained
in this Section 7 shall survive closing for a period of
three (3) months from the date of Closing.
(e) Purchaser acknowledges that it is relying on its
independent investigation of the condition of the
Subject Property (including the physical and the
environmental condition of the Subject Property), that
it has not relied upon any statement, representation or
warranty, written or otherwise, of Seller, other than as
expressly set forth in this Agreement, or of any
employee or agent of Seller and that it is purchasing
the Subject Property "as is." Purchaser acknowledges
that any budgets or forecasts of financial results
provided to it are estimates only, that such budgets and
forecasts do not constitute guaranties of future
performance and that future performance of the Subject
Property may vary substantially from such budgets and
forecasts. Purchaser warrants and represents that it has
no knowledge of any fact which would render any
representation, warranty or covenant contained in this
Section 7 to be false or incorrect or cause Seller to be
in breach thereof.
(f) Seller agrees that if any deed, Leases and Service
Contracts or Governmental Permits and Grants or other
document to be assigned or conveyed to Purchaser is not in
the name of "Prime Hospitality Corp.," but instead is in
the name of Frenchman's Reef Beach Associates or other
similar name ("Beach Associates"), Seller shall undertake
such acts as may be necessary to assign and/or convey the
interest in such documents(s) to Purchaser.
(g) The limitations to the representations and warranties
contained in Sections 7(c); 7(d) and the last sentence of
7(e) shall apply to and be incorporated by referenced in
each and every warranty and representation given by Seller
anywhere in this Agreement.
8. TITLE AND SURVEY.
(a) Attached hereto as Exhibit J is a current
commitment for a title insurance policy covering the Real
Property, issued by Escrow Agent, in the amount of the purchase
price (the "Title Commitment"). As a condition to Closing, the
Escrow Agent will deliver to Purchaser an endorsement to the
title commitment which extends the effective date
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thereof to the date of Closing and which discloses no further
exceptions to title, as well as such other endorsements as
Purchaser may reasonably request. In addition, Seller shall
cooperate with Purchaser's efforts to produce such agreements,
affidavits or other documents as may be reasonably required by
the Escrow Agent to issue the owner's title policy. Finally,
Seller agrees that on the date of Closing it will deliver to
Purchaser evidence reasonably satisfactory to Purchaser and
Escrow Agent, by Certificate or otherwise, which discloses no
unpaid taxes or assessments on the Real Property except those
pertaining to the year of Closing, it being mutually understood
that Seller will have paid in full all prior years' taxes and
assessments as well as all taxes and assessments allocated to the
date of Closing, on or before the date of Closing.
(b) Attached hereto as Exhibit K is a survey of the
Real Property (the "Existing Survey"). Within sixty (60) days
from the date of this Agreement, Purchaser shall obtain, at its
expense, an updated survey, certified by a licensed surveyor for
the express benefit of Purchaser and the Escrow Agent depicting
all property corners, improvements, fences, roads, driveways,
parking areas, easements and rights-of-way, encroachments on or
off the Real Property, utility lines, restrictions of record, and
setbacks, existing upon the Real Property (the "Improvement
Survey"). The Improvement Survey shall be in form and content
sufficient to cause the Escrow Agent as title company to issue an
endorsement to its title commitment agreeing to delete from
Schedule B, Section 2, of its to-be-issued title policy, the
standard printed exceptions (including exceptions 2 and 3) and
the exception for parties in possession (exception 1). If the
Improvement Survey depicts any condition different than the
conditions shown on the Existing Survey which causes the Escrow
Agent as title company to add any additional exceptions or
conditions to its Title Commitment that substantially, adversely
affect the utility of the Subject Property as currently used, or
substantially diminishes its value, Purchaser shall have the
option in its sole discretion of (i) terminating this Agreement
by written notice to Seller and receiving a prompt refund of the
Xxxxxxx Money Deposit, in which case the parties shall be deemed
relieved of all further rights or responsibilities hereunder, or
(ii) waiving such right to terminate and proceeding to Closing in
accordance with the terms and provisions of this Agreement.
9. CONDITIONS PRECEDENT TO CLOSING
(a) It shall be an express condition to Purchaser's obligation
to purchase the Subject Property that each and every one
of the following conditions shall have been satisfied as
of the date of Closing (or waived by Purchaser):
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(i) Representations and Warranties. Each of Seller's
representations and warranties shall be true and
accurate, in all material respects, as if made on
and as of the Closing.
(ii) Covenants of Seller. All actions Seller covenants
herein to take shall have been completed in all
material respects, including those obligations set
forth in Section 5. Environmental hereto.
(iii) Permits; No Impediments. Purchaser shall have been
able to obtain all Governmental Permits and Grants
(including a liquor license) necessary to operate
the Subject Property on and subsequent to the
Closing, or such permits shall have been applied
for and Purchaser is satisfied will be issued in
the normal course and the absence thereof as of
Closing will not interfere with the operation of
the Subject Property immediately subsequent to the
Closing, in all material respects. There shall be
no impediments to reissuance to Purchaser of any
Permits required for the ongoing uninterrupted
operation of the Subject Property immediately
following the Closing, if transfer of such Permits
is not allowed.
(iv) Title and Survey. Purchaser shall be able to obtain
a policy of title insurance in conformance with the
provisions of Section 8 hereof, and shall obtain an
Improvement Survey in conformance of the provisions
of Section 8 hereof.
(v) Transfer of Industrial Development Certificate and
Industrial Development Benefits. Purchaser shall
have been able to obtain a transfer of (i) that
certain Industrial Development Certificate (the
"First Certificate") and any and all benefits
including, without limitation, Industrial
Development benefits, pursuant to the First
Certificate issued by the Virgin Islands
Industrial Development Commission ("Commission")
and currently benefiting Seller until March 31,
2001, by virtue of that certain Transfer of
Certificate from Frenchman's Reef Beach Associates
to Seller dated March 18, 1998, and (ii) that
certain Industrial Development Certificate (the
"Second Certificate") and any and all benefits
including, without limitation, Industrial
Development benefits, pursuant to the Second
Certificate issued or to be issued by the
Commission for the benefit of Seller for a period
of 10 years commencing April 1, 2001. It is the
requirement of Purchaser that transfer of the
First Certificate and the
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Second Certificate provide for the following
exemptions from taxes and duties through March 31,
2011:
- Gross Receipt Taxes 100% exemption
- USVI Income Taxes 90% exemption
- Dividend Withholding Taxes 80% exemption
- Interest Withholding Taxes 100% exemption
- USVI Real Property Taxes 100% exemption
on real property used for operating a hotel
- Customs Duties Customs duty capped
at 1% ad valorem assessment on certain items
- Excise Taxes 100% exemption
Purchaser agrees to use its reasonable efforts to
comply with and complete all preconditions set by
the Commission for the transfer of the First and
Second Certificates. Seller agrees to cooperate
with Purchaser to obtain the Commission's approval
to transfer the First Certificate and the Second
Certificate and all of the benefits pursuant
thereto (including, without limitation, benefits
relating to income taxes, gross receipt taxes, and
excise taxes) to Purchaser. In addition, Seller
agrees to use its reasonable efforts to obtain the
issuance of the Second Certificate.
(vi) Environmental. Seller shall have completed the work
required to be completed pursuant to Section 5
hereof.
(vii) Documents/Agreements. Seller shall have delivered
at Closing all of the documents, agreements and
instruments required under Section 10 hereof.
(b) Failure of Condition. In the event of the failure of any
condition precedent set forth above, Purchaser, at its
sole election, may (a) terminate this Agreement (and
receive a return of the Xxxxxxx Money Deposit); (b)
waive the condition and proceed to Closing; (c) extend
the date of Closing for an additional period of thirty
(30) days to allow Purchaser to remedy such failure;
and/or (d) if such failure arises from Seller's breach
of this Agreement, avail itself of any remedies provided
in herein.
10. CLOSING. The purchase and sale of the Subject Property shall
close on the date which Seller and Purchaser shall mutually agree upon and
designate in writing, but in no event later than the earlier of (a) fifteen (15)
days from the date on which all of the conditions precedent set forth in Section
9 hereinabove have been satisfied or (b) one hundred twenty (120) days from the
date of this Agreement (the "Closing"), provided, however, if Closing would
otherwise occur during the period of
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December 24, 1999 to and including January 3, 2000, the Closing shall occur on
January 4, 2000. The Closing shall be held at 10:00 a.m., at the offices of
Escrow Agent on St. Xxxxxx or at such other location, time and date as may be
mutually agreed upon by the parties. At the Closing the following shall occur:
(a) Seller shall deliver to Purchaser a duly executed and
acknowledged Special Warranty Deed, or its local
equivalent in proper statutory form for recording,
covering the Real Property free and clear of all taxes,
liens, encumbrances, restrictions or claims of any kind or
nature except the Permitted Exceptions.
(b) Seller shall deliver to Purchaser a duly executed and
acknowledged Xxxx of Sale with full warranty of title
covering the Business Assets (to the extent the same are
not leased) and all architectural and other plans,
specifications, studies, reports and other materials
owned by Seller pertaining in any way to the existing or
potential use, development, expansion or alteration of
the Real Property or any part thereof, free and clear of
all taxes, liens, encumbrances, restrictions or claims
of any kind or nature except the Permitted Exceptions.
Seller and Purchaser shall each execute and deliver to
the other, assignments and assumptions in form and
content set forth in Exhibit L wherein Seller assigns
and Purchaser assumes the Leases and Contracts.
(c) Seller shall deliver to Purchaser such documentation as
Purchaser may reasonably request to evidence the sale and
transfer of the Federal Trademarks for the names
"Frenchman's Reef Beach Resort" and "Morning Star Beach
Resort."
(d) Seller shall deliver to Purchaser a duly executed and
acknowledged Assignment covering all warranties which
Seller may have on the equipment, appliances, fixtures or
other of the Business Assets being conveyed to Purchaser.
(e) Seller shall deliver to the Escrow Agent a duly executed
and acknowledged Mechanic's Lien Affidavit and Indemnity
Agreement indemnifying Purchaser and Escrow Agent against
any claims or demands for work performed or materials
furnished for the benefit of the Real Property.
(f) Seller shall execute and deliver to Purchaser and Escrow
Agent a FIRPTA Non-Withholding Certificate in the name of
the Seller from the Virgin Islands Internal Revenue
Bureau, in form and content reasonably acceptable to
Purchaser.
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(g) Purchaser shall deliver to Escrow Agent the balance of the
Purchase Price (subject to any contract credits and
closing adjustments) in the form of wired funds.
(h) Purchaser and Seller shall execute Statements of
Settlement prepared by Escrow Agent which reflect the
purchase price and all credits and other adjustments
thereto.
(i) Seller and Purchaser shall execute and deliver such other
documents as may be necessary or appropriate to effectuate
the intent and purpose of this Agreement and the
transactions contemplated hereby.
(j) Seller shall cause possession and management of the
Subject Property and of the Resorts business to be
delivered to Purchaser, in a clean condition and free
and clear of any leases or tenancies other than the
Leases and Contracts, and the advance room reservations
taken by Seller in the ordinary course of business; and
the Subject Property shall contain and include all fixed
assets and supplies and inventory as are designated on
Exhibit B hereto (as amended pursuant to Section 13
hereof) all in the same condition and repair as they are
on the date of this Agreement, reasonable wear and tear
accepted.
(k) Any franchise agreements for the Resorts between Seller
and Purchaser, or Purchaser's affiliates, will be
terminated without payment of any penalty or termination
fee, provided that payment of all fees under such
franchise agreements, other than any penalty or
termination fees, have been paid in full by Seller prior
to Closing.
11. RISK OF LOSS. The risk of loss to the Subject Property or
any part or portion thereof shall remain with Seller until the Closing hereunder
has been completed, and Purchaser shall have the option to either cancel this
Agreement without further obligation (and receive a prompt refund of all Xxxxxxx
Money Deposit) or to close without adjustment in price and to receive from
Seller an assignment of all property loss insurance other than business
interruption insurance or similar coverage or other proceeds or awards in the
event of any material loss, destruction, damage or taking to or of the Subject
Property or any part or portion thereof by reason of fire, other casualty or
condemnation prior to Closing. As used in this Paragraph 11, the term "material"
shall mean any damage or destruction to the Subject Property which cannot be
fully repaired by Seller prior to the Closing, or the commencement of a
condemnation proceeding involving any part of the Property. Such option must be
exercised by Purchaser by written notice given to Seller no later than thirty
(30) days following the occurrence of the event which causes the loss, damage or
taking. If no such notice is timely given, Purchaser shall be deemed to have
elected to close without adjustment in price and to
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receive an assignment of all proceeds or awards. If the Closing falls within the
said thirty (30) day notice period, the Closing shall be extended to the fifth
business day following the expiration of said thirty (30) day period.
12. INDEMNIFICATION. Seller agrees to and does hereby
indemnify, defend (including reasonable attorneys' fees), save and hold harmless
Purchaser against and in respect of any and all claims, demands, losses, costs,
expenses, injuries, liabilities, obligations or damages which may be asserted
against, incurred or suffered by Purchaser ("Purchaser's Loss") caused by or
arising out of Seller's ownership and/or operation of the Subject Property prior
to the date of Closing, including losses caused by liability to third parties
for personal injuries occurring prior to the date of Closing, but excluding any
loss caused by or arising out of any physical, environmental or other condition
of the Subject Property existing prior to the date of Closing, except with
respect to personal injuries if such injuries occurred prior to the date of
Closing. The foregoing indemnity shall include all attorneys' fees incurred by
Purchaser in prosecuting or defending any claim, cause of action, or lawsuit
within the scope of the indemnity, including any suit that may be necessary to
enforce the indemnity, and shall survive the Closing hereunder and remain in
full force and effect.
In addition to the indemnifications set forth in the
immediately preceding paragraph, Seller agrees to and does hereby indemnify,
defend (including reasonable attorneys' fees), save and hold harmless Purchaser
against and in respect to any claims, demands, losses, costs, expenses,
injuries, liabilities, obligations or damages which may be asserted against,
incurred by or suffered by Purchaser or the Subject Property, which relate to
any rights, title, interest or other claims, of any type or nature (including
any right, title or interest or other claim relating to the Subject Property) by
Xxxx Xxxxxxx and/or his spouse (collectively and individually, the "Pourzals")
or any business entity in which the Pourzals have an interest (collectively,
"Pourzals' Claims") to the extent and only to the extent, such Pourzals' Claims
relate to conditions, facts or events alleged or existing prior to the date of
Closing and arise from acts or omissions by Seller or any predecessor in
interest to Seller of the Subject Property. The foregoing indemnity shall
include all attorneys' fees incurred by Purchaser in any suit that may be
necessary to enforce the indemnity, and shall survive the Closing hereunder and
remain in full force and effect. Purchaser agrees that Seller may (a) retain
counsel on behalf of Purchaser, such counsel to be reasonably acceptable to
Purchaser, and (b) direct the course of any litigation, and negotiate any
settlement, provided such course and negotiations are consistent with the
reasonable goals of MI and provided that the cost of such counsel, litigation
and settlement shall be borne solely by Seller.
Purchaser agrees to and does hereby indemnify, defend
(including reasonable attorneys' fees), save and hold harmless Seller against
and in respect of any and all claims, demands, losses, costs, expenses,
injuries, liabilities, obligations or damages which may be asserted against,
incurred or suffered by Seller, caused by or arising out of Purchaser's
ownership or operation of the Real Property and Resorts after the date of
Closing. In addition, except for any rights it may have (i) for breach of any
representation or warranty contained in this Agreement and (ii) related to the
work to be
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performed by Seller pursuant to Section 5 hereof, Purchaser agrees to and does
hereby waive and release Seller from any claim Purchaser may have against Seller
relating to or caused by any physical, environmental or other conditions of the
Subject Property existing prior to the date of Closing, including any liability
arising from any claim of a third party against Purchaser with respect to any
such physical, environmental or other condition of the Subject Property. The
foregoing indemnity shall include all attorneys' fees incurred by Seller in
prosecuting or defending any claim, cause of action, or lawsuit within the scope
of the indemnity, including any suit that may be necessary to enforce the
indemnity. This paragraph shall survive the Closing hereunder and remain in full
force and effect. The rights which Purchaser may have for breach of any
representation or warranty contained in this Agreement are subject to the terms
of Section 7(d) of this Agreement, relating to the period of survival of the
representations and warranties. The rights of Purchaser relating to the work to
be performed by Seller pursuant to Section 5 hereof are subject to Seller's
release of liability for such work upon final completion of the work, as set
forth in the last sentence of Section 5 hereto.
13. INVENTORY OF PERSONAL PROPERTY. An inventory of the
personal property, including fixed supplies, supplies and inventory, located on
the Real Property and Resorts shall be performed by Seller and Purchaser within
thirty (30) days of the date of the execution of this Agreement and attached
hereto as Exhibit B hereto. Purchaser and Seller will amend Exhibit B to reflect
such inventory as of the date of Closing.
14. UNION CONTRACT/CONTRACT EMPLOYEES.
(a) Union Employees. On the date of Closing, Purchaser agrees
to assume the collective Bargaining Agreement dated June
27, 1997 between Seller and United States of America
AFL-CIO ("Union") ("Union Contract"). Seller shall
reasonably cooperate with Purchaser to assist Purchaser
in making such modifications to the Union Contract as
may be reasonably necessary to provide equivalent
benefits thereunder (i.e., to account for the fact that
Purchaser may be unable to duplicate Prime's benefits
but can provide equivalent Marriott benefits), provided
that no such modification shall be a condition to
Closing. Seller represents that it is not a party to any
union or other collective bargaining agreement with
employees employed in connection with the Subject
Property, other than the Union Contract, and that there
are no amendments to or modifications of the Union
Contract and that the copy of the Union Contract
provided to Purchaser is true, correct and complete in
all respects. Seller represents that, to its knowledge
and except as provided on Exhibit H, there are no
grievances or similar claims pending or threatened
pursuant to the Union Contract. Purchaser assumes all
liability and agrees to indemnify Seller against any
liability, including any severance costs and liabilities
imposed by law, arising out of Purchaser's
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failure to hire any union employee at closing or
termination of any union employee subsequent to the
closing date.
(b) Non-Union Employees. Purchaser will hire all employees
not subject to the Union Contract, subject to
Purchaser's standard ninety-day probationary period for
new employees, provided that Purchaser assumes all
liability and agrees to indemnify Seller against all
liability, including any severance costs and liabilities
imposed by law arising out of Purchaser's failure to
hire any employee at closing or termination of any
employee within the ninety (90) day probationary period
for new employees, and further provided that the
employment of the individuals identified on Exhibit H is
provided for in subsection (f) below.
(c) Benefits. With respect to all Union employees and all
non-union employees, Seller shall pay to Purchaser at
Closing all costs and expenses associated with accrued but
unpaid or unearned costs associated with the following,
calculated through the date of Closing: salary, vacation
leave, sick leave, medical, pension, and welfare benefits
and employee fringe benefits (collectively, the "Employee
Plans"). Purchaser agrees to promptly pay when due all
amounts due to employees under the Employee Plans.
(d) Mutual Indemnity. Seller shall indemnify and hold
harmless Purchaser, from and against any and all claims,
causes of action, proceedings, judgments, damages,
penalties and liabilities made, assessed or rendered
against Purchaser or its affiliates and any and all
costs and expenses (including reasonable attorneys fees
and expenses) incurred by Purchaser or its affiliates
with respect to (i) any termination of any employee
prior to the Closing Date, (ii) any grievances, claims,
or actions of any employees of the Property occurring or
relating to periods on or prior to Closing, any employee
benefits pursuant to any Employee Plans accrued or
earned as of the Closing Date, payment for which Seller
has failed to make to Purchaser pursuant to subsection
(c) above. Purchaser shall indemnify and hold harmless
Seller, from and against any and all claims, causes of
action, proceedings, judgments, damages, penalties and
liabilities made, assessed or rendered against Seller or
its affiliates and any and all costs and expenses
(including reasonable attorneys fees and expenses)
incurred by Seller or its affiliates (i) with respect to
any employee benefits pursuant to any Employee Plans
accrued or earned after the Closing Date, (ii) with
respect to any employee benefits pursuant to any
Employee Plans for which Seller has made payment to
Purchaser pursuant to subsection (c) above, and (iii)
the termination of any employee after the Closing Date
(other than with respect to the employees
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identified on Exhibit H, which are provided for in
subsection (f) below).
(e) Access to Employees. Seller will cooperate reasonably in
connection with Purchaser's interviewing of employees at
the Hotel and, upon Purchaser's request, provide
Purchaser with access to wage and benefits information.
Purchaser shall indemnify and hold harmless Seller, from
and against any and all claims, causes of action,
proceedings, judgments, damages, penalties and
liabilities made, assessed or rendered against Seller or
its affiliates and any and all costs and expenses
(including reasonable attorneys fees and expenses)
incurred by Seller or its affiliates with respect to its
interviewing employees or with respect to any employment
decisions made with respect to such interviews. Seller
agrees that it will not make any promise, commitment or
representation to any non-Union employee regarding
possible employment with Purchaser, other than the
employees listed on Exhibit H.
(f) Designated Employees. Purchaser agrees to assume the
Employment Agreements for those six (6) employees
identified as "Designated Employees," which employees and
agreements are described on Exhibit H ("Designated
Employees' Agreements"). Each Designated Employee has
consented to this assumption pursuant to the executed
Consents attached hereto as Exhibit H-2 (such consents
being known as the "Designated Employee's Consent").
(g) Purchaser's/Seller's Obligations. Purchaser's assumption
of the Designated Employees' Agreement shall be subject to
the following terms:
(i) If Purchaser notifies Seller of Purchaser's
election to terminate the employment of any
Designated Employee between the 180th day and the
210th day after the date of Closing (the
"Termination Period"), Seller shall conclusively
be deemed to have accepted a reassignment and
reassumption of such Designated Employee
Agreement. In the event that any Designated
Employee receives a bonus for the calendar year of
the reassignment pursuant to the terms of the
Designated Employee Agreement, Purchaser shall
reimburse Seller for a portion of such bonus equal
to the portion of such year which expired prior to
the date of reassignment. Purchaser may not
reassign a Designated Employee Agreement before
the 180th day after the date of Closing.
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(ii) If Purchaser reassigns the Designated Employee
Agreement of any Designated Employee to Seller
during the Termination Period, and as a result of
such reassignment or subsequent termination by
Seller Designated Employee has any claim or cause
of action against Purchaser or is entitled to any
payment under the Designated Employee's Agreement
or pursuant to law (including any payment required
pursuant to the U.S. Virgin Islands Wrongful
Discharge Act), Seller agrees to indemnify and
hold Purchaser harmless form any such claims,
damages or expenses, including all reasonable
legal fees incurred by Purchaser. Seller's
foregoing indemnification shall not extend to any
claim or cause of action resulting from any act or
omission taken by Purchaser during the course of
Purchaser's employment of the Designated Employee.
(iii) If Purchaser terminates the employment of any
Designated Employee at any time or attempts to
reassign the Designated Employee Agreement to
Seller before or after the Termination Period, and
as a result of such termination or attempted
reassignment by Purchaser, Designated Employee has
any claim or cause of action against Seller or is
entitled to any payment under the Designated
Employees' Agreement or pursuant to law (including
any payment required pursuant to the U.S. Virgin
Island Wrongful Discharge Act), Purchaser agrees
to indemnify and hold Seller harmless from any
such claims, damages or expenses, including all
reasonable legal fees incurred by Seller.
Purchaser agrees to defend and indemnify Seller
against, and agrees to hold it harmless from, any
and all claims or losses incurred to suffered by
Seller as a result of (i) any breach or claims of
breach of any Designated Employee Agreement by
Purchaser and (ii) any claim by the Designated
Employee resulting from or relating to any actions
or omissions of Purchaser and its employees or
agents, including without limitation, any claim of
discrimination, unfair labor practices, or
violation of labor or employment laws or
regulations. Purchaser's foregoing
indemnifications shall not extend to any claim or
cause of action resulting from any act or omission
taken by Seller during the course of Seller's
employment of the Designated Employee.
(iv) Purchaser shall pay to Seller all sums which seller
had previously paid to Purchaser pursuant to the
terms of this subsection for any Designated
Employee whose Designated
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Employee Agreement the Purchaser reassigned to
Seller or who is otherwise terminated at any time
by Purchaser and thereafter prior to the
expiration of the stated term of the Designated
Employee Agreement either Purchaser (or any
subsidiary in which Purchaser owns all or
substantially all of the voting interests) hires
or otherwise retains the services of such
Designated Employee in connection with the
management, ownership or operation of any hotel in
the U.S. Virgin Islands.
15. DEFAULT. If Purchaser fails or refuses to perform or
tender any of its closing obligations hereunder, which default Seller elects not
to waive, the Xxxxxxx Money Deposit and accrued interest shall be forfeited by
Purchaser and retained by Seller and both parties shall thereafter be released
from all obligations and responsibilities hereunder. It is agreed that such
forfeited xxxxxxx monies and interest are liquidated damages and are Seller's
sole and only remedy for Purchaser's failure to perform or tender its closing
obligations under this Agreement. Seller expressly waives the remedies of
specific performance and additional damages.
In the event that during the term of this Agreement (i) any of
Seller's representations or warranties are (or become prior to Closing) untrue
or incapable of performance, or (ii) Seller shall fail or refuse to perform any
of its obligations hereunder, which default Purchaser elects not to waive,
Purchaser shall have the option of (aa) declaring this Agreement terminated, in
which event Purchaser shall be entitled to a prompt refund of the Xxxxxxx Money
Deposit and the parties shall be deemed discharged from any further rights or
responsibilities hereunder, or (bb) treating this Agreement as being in full
force and effect and suing for the specific performance hereof, or damages, or
both. Such option shall be exercised by written notice provided by Purchaser to
Seller.
16. NOTICE. All notices provided for herein shall be in
writing and shall either be delivered personally or sent by facsimile
transmission, by Federal Express, or by certified mail, return receipt
requested, postage prepaid, addressed to the party for whom intended at the
address set forth below. Any party may change its address by written notice to
the other party.
To the Seller: Prime Hospitality Corp
000 Xxxxx 00 Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: President
With a copy to: Xxxxxx Xxxxxxxxx, Esquire
(which shall not 000 Xxxxx 00 Xxxx
constitute notice) Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: General Counsel
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To the Purchaser: Marriott International, Inc.
00000 Xxxxxxxx Xxxx
Lodging Development
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxx
Fax: (000) 000-0000
With a copy to: Xxxxx X. Xxxxxx, Esquire
(which shall not Xxxxxxx, Xxxxxxx and Xxxxxx, LLP
constitute notice) Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Fax No. (000) 000-0000
Each such notice shall be deemed given on the date personally
delivered or faxed, on the date following the date of delivery to Federal
Express, or two days after mailing by certified mail, return receipt requested.
17. BROKERS. Seller agrees to indemnify and hold harmless
Purchaser with respect to all commissions and fees due to or claims by CIBC
Xxxxxxxxxxx and any other brokers employed by Seller who may claim a commission,
in connection with this transaction. Purchaser represents and warrants to the
other that it has not employed or used the services of any broker or finder in
connection with this transaction. Each of said parties agrees to and does hereby
indemnify, defend (including attorney's fees), save and hold harmless the other
from and against any and all claims, demands, costs, expenses and liability
arising out of any claims for a brokerage commission or other compensation made
by any broker or brokers (other than those identified above) purporting to
represent the indemnifying party or claiming by, through or under the
indemnifying party in connection with this transaction.
18. 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 parties, 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 parties as
soon as such party learns that is must make such disclosure.
19. PURCHASER'S RIGHT OF ENTRY. Throughout the term of this
Agreement Purchaser and Purchaser's authorized representatives shall have the
right, upon the giving of reasonable notice to Seller, to enter upon the Real
Property and to undertake such activities to prepare to operate the Resorts on
and after the Closing;
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provided that no activity of Purchaser or its authorized representative on the
Real Property will unreasonably interfere with the normal operation of business
by Seller.
20. ASSIGNMENT. Purchaser may assign or transfer its interest
in this Agreement to any other person or entity which assumes Purchaser's rights
and obligations hereunder, without the consent of the Seller being required.
21. NO THIRD PARTY BENEFICIARIES. None of the terms,
covenants, obligations or rights contained in this Agreement is or shall be
deemed to be for the benefit of any person or entity not a party hereto.
22. ATTORNEY'S FEES. In the event of any litigation between
Seller and Purchaser involving the interpretation and/or enforcement of this
Agreement or any provisions hereof or any other element of this transaction,
including the indemnification contained in Paragraph 11 above, the prevailing
party shall be entitled to an award of its costs and expenses (including
reasonable costs and attorney's fees) incurred therein as a part of the judgment
or stipulated settlement entered in such litigation.
23. TIME. Time is of the essence hereof. In the event the day
or last day specified or permitted for the performance of any act required or
allowed under this Agreement falls on a Saturday, Sunday, or legal holiday, the
time for such performance shall be extended to the next succeeding business day.
24. SEVERABILITY. If any provisions of this Agreement shall be
invalid, illegal or unenforceable, it shall not affect or impair the validity,
legality or enforceability of this Agreement itself or of any other provisions
hereof, and there shall be substituted for the affected provision, a valid and
enforceable provision as similar as possible to the affected provision. For
purposes of avoiding the rule against perpetuities, no provision of this
Agreement shall be effective, and no closing or conveyance shall occur, after 20
years from the date of this Agreement.
25. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
executed in one instrument, signed by all parties, or in counterparts, in which
case all such counterparts together shall constitute one and the same instrument
and Agreement, binding on all of the parties thereto, notwithstanding that all
of the parties are not signatory to the original or the same counterpart.
Facsimile signatures shall be treated as original signatures hereon, but not on
closing documents.
26. BINDING EFFECT, ETC. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns, and shall be construed in
accordance with and governed by the laws of the Territory of the U.S. Virgin
Islands. This Agreement contains the entire agreement between the parties
pertaining to the subject matter hereof and supersedes all prior arrangements,
writings, representations, and negotiations relating thereto. Finally, this
Agreement may not be amended or modified except by an instrument in writing
signed by all of the parties.
-25-
29
27. FURTHER ASSURANCES. Each party hereto shall from time to time
execute and deliver such additional instruments or do such additional acts as
the other party may reasonably request in order to effectuate the full intent of
this Agreement.
28. ACCEPTANCE DEADLINE. In the event this Agreement has not been
fully executed and copies thereof delivered to Purchaser by __________________
the offer of Purchaser represented by this Agreement shall be deemed withdrawn
at that time, and this Agreement shall no longer be capable of acceptance by
Seller.
29. EXCLUSIVITY. During the pendency of this Agreement, Seller
agrees not to seek, negotiate or accept any other offers or agreements for the
sale of the Subject Project, or any portion thereof, with any prospective
purchaser(s) other than the Purchaser under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.
SELLER:
PRIME HOSPITALITY CORP
By: /s/ XXXXXXX XXXXXX,
-----------------------------------
Its: Xxxxxxx Xxxxxx, Xx. V.P.
----------------------------------
PURCHASER:
MARRIOTT INTERNATIONAL, INC.
By: /s/ XXXXX X. SULLUS
-----------------------------------
Its: Executive Vice President
----------------------------------
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LIST OF EXHIBITS
A Description of Real Property
B Business Assets
C Escrow Instruction Letter
D Allocation of Total Purchase Price
E Leases and Service Contracts To Be Assumed by Purchaser
F Categories of Unopened Food, Beverage and Operating Supplies
G Environmental Report
H Employment Agreements/Designated Employees Agreements
I List of Governmental Permits and Grants
J Title Commitment
K Existing Survey
L Form of Assignment and Assumption Agreement of Leases and
Service Contracts
31
EXHIBIT A
DESCRIPTION OF REAL PROPERTY
Property A: Parcel of P1 Bakkero (a/k/a "East Point" "The Quarantine
Station" and "Muhlenfeldt Point")
Xx. 0x Xxxxxxxxx'x Xxx Xxxxxxx
Xx. Xxxxxx Virgin Islands as shown on PWD D9-167-T48
Property B: Xxxxxxxxxxx Xxxxx Xxxxx Xxxxxxx Xxxxxx Xxxxxxx
Xx. 0 Frenchman's Bay Quarter
St. Xxxxxx, Virgin Islands as shown on PWD D3-30-T34
Property C: Parcel No. 2K Estate Bakkero and Elisenlund
No. 3 Frenchman's Bay Quarter
St. Xxxxxx, Virgin Islands as shown on PWD G9-554-T60
Property D: Parcel Xx. 0X Xxxxxx Xxxxxxx
Xx. 0 Frenchman's Bay Quarter
St. Xxxxxx, Virgin Islands as shown on PWD F9-3593-T78
Property E: Parcel Xx. 0 Xxxxxxxxx Xxxxxx Xxxxxxx
Xx. 0 Frenchman's Bay Quarter
St. Xxxxxx, Virgin Islands as shown on PWD D9-1418-T78,
excluding the following parcels:
(1) Parcel No. 4A Estate Bakkero
Xx.0 Xxxxxxxxx'x Xxx Xxxxxxx
Xx. Xxxxxx, Xxxxxx Xxxxxxx as shown on XXX Xx.
X0-00-X00
(0) Xxxxxx Xx. 0X Xxxxxx Bakkero
No. 5 Frenchman's Bay Quarter
St Xxxxxx, Virgin Islands as shown on PWD No.
F9-3593-T78
(3) Parcel No. 4C Remainder Estate Bakkero
No. 5 Frenchman's Bay Quarter
St. Xxxxxx, Virgin Islands as shown on PWD No.
F9-3594-T78
excluding: Parcel No. 4C-1 Estate Bakkero
No. 5 Frenchman's Bay Quarter
St. Xxxxxx, Virgin Islands as shown on
PWD No. D9-3040-T85
32
Property F: Xxxxxx Xx. 0X Xxxxxxxxx Xxxxxx Bakkero
No. 5 Frenchman's Bay Quarter
St. Xxxxxx, Virgin Islands as shown on PWD No. F9-3594-T78
excluding: Xxxxxx Xx. 0X Xxxxxxxxx Xxxxxx Bakkero
No. 5 Frenchman's Bay Quarter
St. Xxxxxx, Virgin Islands as shown
on PWD No. D9-3040-T85
Property G: Parcel Xx. 0-00 Xxxxxx Xxxxxxx
Xxxxxxx XX Xx. 0 Frenchman's Bay Quarter
St. Xxxxxx, Virgin Islands as shown on PWD A9-88-T68
Property H: Parcel Xx. 0X-0 Xxxxxx Xxxxxxx
Xx. 0 Frenchman's Bay Quarter
St. Xxxxxx, Virgin Islands as shown on PWD D9-3040-T85
33
EXHIBIT D
ALLOCATION OF TOTAL PURCHASE PRICE
Land $ 4,700,000
-----------
Buildings 61,000,000
-----------
Fixtures 7,300,000
-----------
Personal Property --
-----------
Good Will --
----------------------- -----------
TOTAL $73,000,000
===========
34
EXHIBIT L
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
OF LEASES AND SERVICE CONTRACTS
THIS ASSIGNMENT OF LEASES AND SERVICE CONTRACTS ("this Assignment") made
the ___ day of_____________ , ____, by and between PRIME HOSPITALITY CORP, a
Delaware corporation (hereby referred to as "Assignor"), and MARRIOTT
INTERNATIONAL, INC., its successor or assigns (hereinafter referred to as
"Assignee").
EXPLANATORY STATEMENT
A. Assignor is the owner of those certain parcels of real
property situated in St. Xxxxxx in the Territory of the U.S. Virgin Islands,
more particularly described on Schedule A attached hereto (the "Property"), a
portion of which Property is improved by two (2) resorts operating under the
trade names "Frenchman's Reef Beach Resort" and "Morning Star Beach Resort"
(collectively, the "Resorts").
B. Pursuant to a Purchase and Sale Agreement dated __________,
______________ by and between Assignor and Assignee (the "Agreement"), Assignee
has contracted to purchase the Property from Assignor.
C. Pursuant to the terms of the Agreement, Assignor has agreed
to assign, transfer, sell, and convey unto Assignee, all of Assignor's right,
title, and interest in, to, and under a variety of leases and service contracts
to which Assignor is a party, which leases and service contracts are required or
desirable for the orderly operation and maintenance of the Property and the
Resorts.
NOW, THEREFORE, in consideration of the foregoing Explanatory
Statement, the covenants and agreements set forth below and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Explanatory Statement. The Explanatory Statement portion of
this Assignment forms an integral part of this Assignment and is hereby
incorporated by reference. All terms used herein shall be given the meaning
assigned to them in the Agreement, unless expressly assigned a different meaning
in this Assignment.
2. Assignment. Assignor does hereby assign, transfer, sell, and
convey unto Assignee and does hereby confirm the assignment, transfer, sale, and
conveyance unto Assignee of all of Assignor's right, title, and interest in, to,
and under those leases and service contracts set forth and described on Schedule
B attached hereto (collectively, the "Leases and Service Contracts") Assignor
acknowledges and agrees that its obligations
35
3. Assumption. By execution hereof, Assignee does hereby, from
and after the date of this Assignment, assume and agree to perform all duties,
obligations, and responsibilities of Assignor under the Leases and Service
Contracts.
4. Indemnification. Assignee does hereby agree to defend,
indemnify, and hold Assignor harmless from and against any and all causes,
claims, demands, losses, liabilities, costs, damages, expenses, and fees
(including, but not limited to, reasonable attorneys' fees) incurred or suffered
by Assignor as a result of Assignee's failure to perform, after the date of this
Assignment, any or all of Assignee's obligations under the Leases and Service
Contracts. Assignor does hereby agree to defend, indemnify, and hold Assignee
harmless from and against any and all causes, claims, demands, losses,
liabilities, costs, damages, expenses, and fees (including, but not limited to,
reasonable attorneys' fees) incurred or suffered by Assignee as a result of
Assignor's failure to perform, prior to and through the date of this Assignment,
any or all of Assignor's obligations under the Leases and Service Contacts.
5. Representations by Assignor.
5.1 Assignor, for itself and its legal
representatives, successors, and assigns, covenants and represents to Assignee
and agrees that (a) Assignor has full right, authority, and power to assign its
rights and interests in and under the Leases and Service Contracts, subject to
any consents which may be required pursuant to the terms of such Leases or
Service Contracts, (b) no other assignment of the Leases and Service Contracts
has been made by Assignor, and the rights and interests of Assignor in and under
the Leases and Service Contracts are now and will, on the date hereof, be free
and clear of any liens and encumbrances made by Assignor, and (c) as of the date
hereof, to its best knowledge, there exist no outstanding material defaults
under the Leases and Service Contracts. The limitation contained in Section
7(c), 7(d), and the last sentence of Section 7(e) of the Agreement shall apply
to and is incorporated into this Section 5.
5.2 Notwithstanding any term herein to the contrary,
Assignee hereby waives any and all rights, claims, causes or demands
(collectively, the "CLAIMS") against Assignor as the grantor of the Special
Warranty Deed (the "DEED") to be executed and delivered by Assignee in
connection with the consummation of the sale of the Property from Assignor to
Assignee pursuant to the terms of the Agreement, to the extent the Claims relate
to the Leases and Service Contracts.
5.3 Notwithstanding any term herein to the contrary,
Assignee hereby waives any and all Claims against Assignor as the grantor of the
Deed to the extent the Claims related to any and all matters, encroachments, and
conditions set forth on that certain Survey of the Property revised as of
January 1, 2000 as prepared by Xxxxxxx X. Xxxx.
6. Representations by Assignee. Assignee, for itself and its
legal representatives, successors and assigns, covenants and represents to
Assignor and agrees
-2-
36
under the Leases and Service Contracts arising before the date of this
Assignment shall remain the sole responsibility of Assignor.
3. Assumption. By execution hereof, Assignee does hereby, from
and after the date of this Assignment, assume and agree to perform all duties,
obligations, and responsibilities of Assignor under the Leases and Service
Contracts.
4. Indemnification. Assignee does hereby agree to defend,
indemnify, and hold Assignor harmless from and against any and all causes,
claims, demands, losses, liabilities, costs, damages, expenses, and fees
(including, but not limited to, reasonable attorneys' fees) incurred or suffered
by Assignor as a result of Assignee's failure to perform, after the date of this
Assignment, any or all of Assignee's obligations under the Leases and Service
Contracts. Assignor does hereby agree to defend, indemnify, and hold Assignee
harmless from and against any and all cases, claims, demands, losses,
liabilities, costs, damages, expenses, and fees (including, but not limited to,
reasonable attorneys' fees) incurred or suffered by Assignee as a result of
Assignor's failure to perform, prior to and through the date of this Assignment,
any or all of Assignor's obligations under the Leases and Service Contracts.
5. Representations by Assignor. Assignor, for itself and its
legal representatives, successors, and assigns, covenants and represents to
Assignee and agrees that (a) Assignor has full right, authority, and power to
assign its rights and interests in and under the Leases and Service Contracts,
subject to any consents which may be required pursuant to the terms of such
Leases or Service Contracts, (b) no other assignment of the Leases and Service
Contracts has been made by Assignor, and the rights and interests of Assignor in
and under the Leases and Service Contracts are now and will, on the date hereof,
be free and clear of any liens and encumbrances made by Assignor, and (c) as of
the date hereof, to its best knowledge, there exist no outstanding material
defaults under the Leases and Service Contracts. The limitation contained in
Section 7(c), 7(d), and the last sentence of Section 7(e) of the Agreement shall
apply to and is incorporated into this Section 5.
6. Representations by Assignee. Assignee, for itself and its
legal representatives, successors and assigns, covenants and represents to
Assignor and agrees that all payments required by the terms of the Leases and
Service Contracts, which become due and payable on and after the date hereof,
shall be made by Assignee in accordance with the terms of the respective Leases
and Service Contracts and sent directly to the respective named contractor
thereunder or as otherwise directed in writing by such contractor.
7. Governing Law. This Assignment shall be construed,
interpreted and enforced in accordance with and governed by the laws of the
Territory of the U.S. Virgin Islands, without regard to principles of conflict
of laws.
37
8. No Partnership. Nothing in this Assignment shall be deemed
in any way to create between the parties hereto any relationship of partnership,
joint venture, or association, and the parties hereto hereby disclaim the
existence of any such relationship.
IN WITNESS WHEREOF, the parties hereto have each caused this
Assignment to be executed on its behalf by its duly authorized representative
with the specific intention of creating a document under seal.
WITNESS: ASSIGNOR:
PRIME HOSPITALITY CORP.
------------------------ By: (SEAL)
-------------------
Name:
------------------------
Title:
-----------------------
WITNESS:
ASSIGNEE:
MARRIOTT INTERNATIONAL, INC.
------------------------ By: (SEAL)
--------------------
Name:
------------------------
Title:
------------------------
38
SCHEDULE A
DESCRIPTION OF PROPERTY
39
SCHEDULE B
LIST OF LEASES AND SERVICE CONTRACTS
40
LISTING OF EXHIBITS INTENTIONALLY OMMITTED
EXHIBIT B BUSINESS ASSETS
EXHIBIT C ESCROW INSTRUCTION LETTER
EXHIBIT E LEASES AND SERVICE CONTRACTS TO BE ASSUMED
BY PURCHASER
EXHIBIT F CATEGORIES OF UNOPENING FOOD, BEVERAGE,
AND OPERATING SUPPLIES
EXHIBIT G ENVIRONMENTAL REPORT
EXHIBIT H EMPLOYMENT AGREEMENTS/DESIGNATED
EMPLOYEES AGREEMENTS
EXHIBIT I LIST OF GOVERNMENTAL PERMITS AND GRANTS
EXHIBIT J TITLE COMMITMENT
EXHIBIT K EXISTING SURVEY
EXHIBIT M VIOLATIONS
