Exhibit 2.1
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of the 30th day of April, 2003, by and
between LANSDOWNE RESORT LIMITED PARTNERSHIP, an Illinois limited partnership
(hereinafter called "Seller"), and LHO NEW ORLEANS LM, L.P., a Delaware
limited partnership ("Purchaser").
W I T N E S S E T H:
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WHEREAS, Seller owns the property known as the Lansdowne Resort in
Leesburg, Virginia and desires to sell such property to Purchaser on the terms
and conditions set forth below; and
WHEREAS, the Purchaser desires to purchase such property from Seller on
the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and the respective
undertakings of the parties hereinafter set forth, it is hereby agreed:
SECTION1. DEFINITIONS. Wherever used in this Agreement, the words and
phrases set forth below shall have the meanings set forth below or in an
Exhibit to this Agreement to which reference is made, unless the context
clearly requires otherwise.
A. "Closing" means the closing at which Seller conveys title to the
Project to Purchaser and Purchaser pays Seller the cash purchase price
described in Section 2 herein below.
B. "Closing Date" means the date which is ten (10) days after the end of
the Inspection Period, or such other date as shall otherwise be agreed upon by
the parties for the Closing; provided, however, either party may extend the
Closing Date for up to additional days if necessary to obtain the Mortgagee's
approval and estoppel certificate referred to in Section 6(12) below.
C. "Consumables" shall mean the following items which are located at or
held in storage and available for use in connection with the Land and
Improvements and which have a useful life which extends beyond the Closing
Date: (i) all unopened, store-room food and beverages (alcoholic and
non-alcoholic) which are usable (Consumables described in this clause (i)
being collectively, "Food and Beverage Consumables"), (ii) all opened food and
beverages, whether alcoholic or non-alcoholic, and (iii) all goods held in
inventory for sale (other than such goods owned by tenants or licensees) which
are deemed usable, including without limitation pro shop inventory
(Consumables described in this clause (iii) being collectively, "Shop
Inventory").
D. "Development Contracts" shall have the meaning set forth in Section
3(U) below.
E. "Expendables" shall mean all china, glassware, stemware, silverware,
bath mats, bath rugs, shower curtains, tools, linens, towels, bedding, kitchen
and bar small goods, paper goods, guest supplies, cleaning supplies, operating
supplies, engineering supplies, maintenance supplies, printing, stationery,
uniforms and any other equipment, goods, utensils (other than Consumables and
Furnishings) located at or usable in connection with any part of the Land and
Improvements, whether in use or held in reserve storage for future use in
connection with the operation of the Land and Improvements.
F. "Financial Statements" means all financial statements and information
relating to the Project which are referred to in Section 3(O) hereof.
G. "First Mortgage" shall mean the first mortgage on the Project held by
the Mortgagee with an outstanding principal balance of approximately
$63,000,000.
H. "Furniture, Fixtures and Equipment" shall mean all tangible personal
property, excluding the Consumables, located on the Project, and used in
connection with the ownership, operation and maintenance of the Project
(collectively, the "FF & E"). The FF & E shall include all fixtures,
furniture, furnishings, fittings, televisions, art work, vans and other
vehicles, equipment, computer hardware and non-proprietary software,
machinery, apparatus, appliances, china, glassware, linens, silverware, keys
and uniforms owned by Seller and used in connection with the ownership,
operation, and maintenance of the Project.
I. "Improvements" means all buildings, structures, fixtures and other
improvements now or hereafter located or erected on the Land, including
(without limitation) an approximately square foot hotel located on the Land,
which includes 297 guest rooms and approximately ______ square feet of meeting
rooms, and an eighteen hole golf course and is commonly known as the
"Lansdowne Resort."
J. "Inspection Period" shall mean the period commencing on the date
hereof and ending at 5:00 P.M. Eastern Time on the date which is forty-five
(45) days after the date hereof.
K. "Land" means the real property located in Leesburg, Virginia,
containing approximately 206 acres for the original development on such real
property and 348 acres for the expansion area for such real property, and more
particularly described on Exhibit A hereto, including all adjacent roadways,
rights-of-way and alleys to the extent Seller has an interest therein, all
oil, gas and other mineral rights and all easements and other rights
appurtenant to such real property.
L. "Loan Documents" shall have the meaning set forth in Section 3(T)
below.
M. "Management Agreement" shall have the meaning set forth in Section
3(S) below.
N. "Mortgagee" means iStar Financial, Inc. which is the holder of the
First Mortgage.
O. "Operator" shall mean The Benchmark Management Company.
P. "Permitted Exceptions" shall have the meaning set forth in Section
6(1) below.
Q. "Personal Property" means all tangible and intangible personal
property now or hereafter owned by the Seller and used in connection with the
operation of the Project, including, without limitation, (i) the personal
property described in Exhibit B, and all other building and construction
materials, equipment, appliances, machinery and personal property owned by
Seller and used in connection with the operation of the Project, (ii) the
Consumables and Expendables, (iii) the Furniture, Fixtures and Equipment, (iv)
all permits, licenses, certificates and approvals issued in connection with
the Project, (v) Seller's right to use the name of the Project and all other
names, logos, and designs used in connection with the Project, including the
Project's bars, restaurants, banquet rooms and meeting rooms (excluding,
however, the name of the Operator),
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(vi) the right to use the Project's telephone numbers and post office boxes,
(vii) all booking agreements, (viii) all service marks and trademarks, (ix)
all prepaid assets, including prepaid advertising and sales materials, (x) all
plans and specifications, operating manuals, guaranties and warranties and any
other items used in the development and operation of the Project, (xi) any
materials and other property relating to the development of the Project's
second golf course, clubhouse and spa and the redevelopment of the Project's
first golf course, and (xii) all books and records pertaining to the Project,
including all documents relating to guests at the Project and employees at the
Project.
R. "Project" means the Land, the Personal Property and the Improvements.
S. "Project Agreement(s)" means, collectively, the Service Contracts, the
Permitted Exceptions, Tenant Leases, Equipment Leases, and any other lease,
rental agreement, loan agreement, loan commitment, mortgage, deed of trust,
easement, covenant or agreement affecting Seller's interest in the Project or
any part thereof.
T. "Title Company" means Chicago Title Insurance Company (Baltimore
office).
SECTION 2. AGREEMENT TO SELL AND PURCHASE.
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A. Purchase Price. On the Closing Date Seller shall convey the Project to
Purchaser or Purchaser's designee on the terms and conditions set forth
herein. On the Closing Date the Purchaser or Purchaser's designee shall accept
title to the Project from Seller on the terms and conditions set forth herein
and shall pay to the Seller the purchase price ("Purchase Price") in
immediately available funds of ONE HUNDRED FIFTEEN MILLION EIGHT HUNDRED
THOUSAND AND 00/100 DOLLARS ($115,800,000.00), subject to the prorations and
credits set forth below, as follows:
1. Purchaser shall assume the First Mortgage and Van Financing Documents
(hereinafter defined) at Closing and the outstanding principal balance of
the First Mortgage shall be credited against the Purchase Price;
provided, however, Seller shall retain (a) the obligation to pay any
prepayment fee or penalty if and when the First Mortgage is prepaid, and
(b) the right to receive the refund of the debt service reserve
(including interest thereon) held by the Mortgagee (the "Debt Service
Reserve") when the First Mortgage is repaid. If the First Mortgage is not
repaid within twelve (12) months from the Closing, Purchaser shall pay
Seller an amount equal to the funds held in the Debt Service Reserve on
the 12th month anniversary of the Closing less the amount of the
prepayment fee which would be due if the First Mortgage was repaid on
such date, and Purchaser shall then be entitled to any funds in the Debt
Service Reserve and shall be obligated to pay the prepayment fee if and
when it is due. Such payment shall be made by Purchaser on the twelve
month anniversary of the Closing and shall, at Purchaser's option, be
either in the form of cash or in the form of shares of common stock in
LaSalle Hotel Properties ("LHO stock") having a value equal to such
amount based on the average NYSE closing price for such LHO stock over
the last thirty (30) trading days prior to such twelve month anniversary.
Purchaser shall give Seller notice at least ten (10) days prior to the
end of such twelve month anniversary whether Purchaser shall pay Seller
such amount in cash or in LHO stock. If Purchaser elects to pay Seller in
LHO stock, Seller shall have the right, by giving Purchaser notice at
least five days prior to the twelve month anniversary, to defer receipt
of such payment until January, 2007, at which xxxx Xxxxxx shall have the
right to receive such payment in cash and shall not be obligated to
accept payment in LHO
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stock. If Purchaser reasonable believes in good faith that it has a claim
against Seller under this Agreement on the twelve month anniversary of
the Closing, Purchaser shall have the right to withhold from the payment
due Seller hereunder a portion of such payment equal to such claim
provided Purchaser deposits such portion in a joint order escrow with the
Title Company. The Title Company shall then hold such portion in escrow
until the parties mutually agree to the disposition of the funds in
escrow or until there is a final ruling on Purchaser's claim from a court
of applicable jurisdiction; and
2. The balance of the Purchase Price, plus or minus prorations, shall be
paid in cash at the Closing.
X. Xxxxxxx Money. Upon the execution of this Agreement, Purchaser shall
deposit $1,000,000 (the "Initial Xxxxxxx Money Deposit") with the Title
Company. Upon the expiration of the Inspection Period (defined below),
Purchaser shall deposit an additional $4,000,000 with the Title Company (the
"Second Xxxxxxx Money Deposit") provided this Agreement has not been
terminated prior thereto (the Initial Xxxxxxx Money Deposit and the Second
Xxxxxxx Money Deposit are herein collectively called the "Xxxxxxx Money"). The
Xxxxxxx Money shall be held by the Title Company in accordance with the terms
hereof and invested in a money market account with all interest earned thereon
payable to Purchaser. If this Agreement is terminated due to Purchaser's
default hereunder, the Xxxxxxx Money shall be paid to Seller as liquidated
damages and as Seller's sole and exclusive remedy. If the Closing occurs
hereunder, the Xxxxxxx Money shall be paid to Seller and credited against the
Purchase Price. If the Closing does not occur hereunder for any reason other
than Purchaser's default hereunder, the Xxxxxxx Money shall be refunded to
Purchaser.
C. 12 Acre Parcel. Seller is currently negotiating a contract (the "12
Acre Contract")with Lansdowne Community Development, LLC, a Virginia limited
liability company, or one of its affiliates (collectively "LCD"), for a
portion of the Land described on Exhibit C attached hereto containing
approximately twelve acres (the "12 Acre Parcel"). If the 12 Acre Contract is
executed prior to the end of the Inspection Period, the general business terms
of the 12 Acre Contract shall be subject to Purchaser's approval; and, if the
12 Acre Contract is executed after the Inspection Period, the entire 12 Acre
Contract shall be subject to Purchaser's approval. In either event Purchaser's
approval shall not be unreasonably withheld, and in either event the 12 Acre
Contract shall be assigned to Purchaser at Closing if executed by Seller prior
to the Closing. Without limiting the foregoing, the 12 Acre Contract shall
provide that it is subject to confirmation by Purchaser within twelve (12)
months of the Closing that Purchaser can relocate the planned clubhouse for
the Property to a new location on the Property which is satisfactory to
Purchaser in its sole discretion, including the right to obtain any necessary
legal approvals for such relocation. If Purchaser closes on the sale of the 12
Acre Parcel to LCD, Purchaser shall pay Seller from the closing proceeds,
after deducting any closing costs (including title insurance costs, transfer
taxes, reasonable legal fees and any market brokerage fees payable to
independent third-party brokers for the sale of the 12 Acre Parcel), the first
$1,600,000 of net sale proceeds and, after Purchaser has retained the next
$272,000 of net sale proceeds, any net sale proceeds received by Purchaser
thereafter; provided, however, Seller shall be solely responsible for the cost
of enforcing the 12 Acre Contract. If the Mortgagee requires that the proceeds
from the sale of the 12 Acre Parcel be deposited in escrow with the Mortgagee
for use in making improvements to the Project, then such payments shall be
made to Seller as and when such proceeds are released from the escrow to
Purchaser by the Mortgagee; provided, however, to the extent such proceeds are
used for improvements to the Project, Purchaser shall pay Seller, as the
proceeds are used, the amount Seller would have been entitled to pursuant to
this paragraph up to the amount so used for the improvements.
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D. 2-3 Acre Parcel. Seller is currently negotiating a contract (the "2-3
Acre Contract")with LCD, for a portion of the Land described on Exhibit D
attached hereto containing two to three acres (the "2-3 Acre Parcel") for
approximately $200,000 or $66,667 per acre. If the 2-3 Acre Contract is
executed prior to the end of the Inspection Period, the general business terms
of the 2-3 Acre Contract shall be subject to Purchaser's approval; and, if the
2-3 Acre Contract is executed after the Inspection Period, the entire 2-3 Acre
Contract shall be subject to Purchaser's approval. In either event Purchaser's
approval shall not be unreasonably withheld, and in either event the 2-3 Acre
Contract shall be assigned to Purchaser at Closing if executed by Seller prior
to the Closing. Without limiting the foregoing, the 2-3 Acre Contract shall
provide that it is subject to confirmation by Purchaser that the sale of the
2-3 Acre Parcel will not impact any zoning or other governmental approvals for
the remainder of the Project. If Purchaser closes on the sale of the 2-3 Acre
Parcel to LCD, Purchaser shall pay Seller from the closing proceeds, after
deducting any closing costs (including title insurance costs, transfer taxes,
reasonable legal fees and any market brokerage fees payable to independent
third-party brokers for the sale of the 2-3 Acre Parcel), in accordance with
the formula set forth in Section 2(C) above (i.e., the proceeds from the sale
of the 2-3 Acre Parcel shall be aggregated with the proceeds from the sale of
the 12 Acre Parcel and such aggregated proceeds shall be distributed in
accordance with Section 2(C) above); provided, however, Seller shall be solely
responsible for the cost of enforcing the 2-3 Acre Contract.
SECTION 3. REPRESENTATIONS AND WARRANTIES BY SELLER. Seller hereby
represents and warrants to, and covenants and agrees with, Purchaser as of the
date hereof and as of the Closing as follows (all of which representations and
warranties shall be deemed automatically remade as of the Closing):
A. Due Organization. Seller is a limited partnership duly organized and
validly existing under the laws of the State of Illinois and is qualified to
do business in the State of Virginia; Seller has full power and authority, and
is duly authorized, to execute, enter into, deliver and perform this Agreement
and its obligations hereunder.
B. Power. This Agreement and all other agreements, instruments and
documents required to be executed or delivered by Seller pursuant hereto have
been or (if and when executed) will be duly executed and delivered by Seller,
and are or will be legal, valid and binding obligations of Seller. Except for
any consents required under the Loan Documents (defined below), no consents
and permissions are required to be obtained by Seller for the execution and
performance of this Agreement and the other documents to be executed by Seller
hereunder. The consummation of the transactions contemplated herein and the
fulfillment of the terms hereof will not result in a breach of any of the
terms or provisions of, or constitute a default under, any agreement or
document to which the Seller is a party or by which it is bound, or any order,
rule or regulation of any court or of any federal or state regulatory body or
any administrative agency or any other governmental body having jurisdiction
over the Seller or the Project.
C. Title. Seller has good and marketable title to the Project, subject
only to the Tenant Leases, Permitted Exceptions and those liens and
encumbrances which will be released or assumed at Closing. All food and
beverage operations at the Project are owned by Seller, and Seller owns all
merchandise for sale at the Project other than merchandise in stores leased
pursuant to the Tenant Leases.
D. Intentionally Deleted.
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E. FF & E, Consumables and Expendables. All of the Project's rooms and
public areas are fully equipped; and, subject to normal wear and tear, all of
the Furniture, Fixtures and Equipment are in good operating order and
condition and are sufficient to operate the Project in accordance with
Seller's past practices. All Consumables and Expendables are in good
condition, are sufficient in quantities and quality for the proper and
efficient operation of the Project and are suitable for the uses intended
thereby.
F. Permits and Legal Compliance. To the best of Seller's knowledge,
Seller has all licenses, permits and certificates necessary for the use and
operation of the Project, including, without limitation, all certificates of
occupancy and hotel, restaurant and liquor licenses necessary for the
occupancy and operation of the Project, and all permits and licenses necessary
to complete development of the Project as currently contemplated. To the best
of Seller's knowledge, the Project, including the use thereof, materially
complies with all Project Agreements and all applicable laws, rules and
regulations, including the Americans with Disabilities Act and all applicable
zoning laws.
G. No Proceedings. There is not now pending or, to the best of Seller's
knowledge, threatened, any action, suit or proceeding before any court or
governmental agency or body against (i) the Project or (ii) the Seller which
might have a material adverse effect on the Project. Without limiting the
generality of the foregoing, Seller has not received any notices of violations
or alleged violations of any laws, rules, regulations or codes, including
building codes, with respect to the Project which have not been corrected to
the satisfaction of the governmental agency issuing such notices.
H. Eminent Domain. There are no pending, or to the best of Seller's
knowledge, threatened condemnation, eminent domain or similar proceedings
relating to the Project or any portion thereof or any interest (whether legal,
beneficial or otherwise) or estate therein.
I. Zoning; Taxes. Except for the revised Riverfront Park Plan and
clubhouse relocation in the Concept Plan Amendment which have been submitted
to Loudoun County, there are no pending or, to the best of Seller's knowledge,
threatened zoning changes or variances with respect to the Project; nor has
anyone initiated any request or application for a zoning change or variance
with respect to the Project. There are no pending or, to the best of Seller's
knowledge, threatened changes in access to the Project. There are no pending
or, to the best of Seller's knowledge, threatened reassessments or special tax
assessments against the Project, and the Project is separately assessed for
real estate tax purposes.
J. Service and Supply Contracts. Attached hereto as Exhibit E is a list
of all contracts or agreements to which Seller is a party for the providing of
services or supplies to or management of the Project, including (without
limitation) a list of all amendments and modifications thereto and assignments
thereof (which contracts and agreements, together with the contracts and
agreements entered into with respect to the Project after the date hereof with
the consent of Purchaser pursuant to Section 6 below, are herein referred to
collectively as the "Service and Supply Contracts"). Seller has hereto
delivered to Purchaser true and correct copies of the Service and Supply
Contracts. Except as may be shown in said exhibit, all of the Service and
Supply Contracts are in full force and effect and free from default and there
is no existing event which, with the passage of time or giving of notice, or
both, could become a default under the Service and Supply Contracts, and there
are no disputes, claims or rights of set-off under the Service and Supply
Contracts.
K. Equipment Leases. Attached hereto as Exhibit F is a list of all
equipment leases to which Seller is a party for the leasing of equipment for
the Project, including (without limitation) a
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list of all amendments and modifications thereto and assignments thereof
(which leases, together with the equipment leases entered into with respect to
the Project after the date hereof with the consent of Purchaser pursuant to
Section 6 below, are herein referred to collectively as the "Equipment
Leases"). Seller has hereto delivered to Purchaser true and correct copies of
the Equipment Leases. Except as may be shown in said exhibit, all of the
Equipment Leases are in full force and effect and free from default and there
is no existing event which, with the passage of time or giving of notice, or
both, could become a default under the Equipment Leases, and there are no
disputes, claims or rights of set-off under the Equipment Leases.
L. Tenant Leases. Attached hereto as Exhibit G is a list of all
outstanding leases or agreements pursuant to which any person occupies, or has
the right to occupy, space in the Project including all amendments and
modifications thereto and assignments and guaranties thereof (which leases,
agreements and other documents, together with the lease documents entered into
after the date hereof with the consent of Purchaser, are referred to
collectively as the "Tenant Leases"). Seller has heretofore delivered to
Purchaser true and correct copies of the Tenant Leases. Except as shown on
such exhibit, (a) to the best of Seller's knowledge, there are no defaults
under any of the Tenant Leases and the Tenant Leases are in full force and
effect, there are no existing events which with the passage of time or giving
of notice or both could become a default under the Tenant Leases, and there
are no disputes, claims or rights of set-off under the Tenant Leases, (b)
except as shown on such exhibit, there are no security deposits nor any rights
to refunds of rents previously paid under the Tenant Leases, and all rents due
to date have been paid on the Tenant Leases, (c) there are no brokerage
commissions or fees due now or payable in the future in connection with the
Tenant Leases, (d) all of the landlord's concessions under the Tenant Leases
have been paid and performed in full (other than any unexpired rent abatement
set forth in the Tenant Leases), (e) to the best of Seller's knowledge there
are no bankruptcy or insolvency proceedings pending or threatened with respect
to any of the tenants under the Tenant Leases, and there are no material
adverse changes in the financial condition of any such tenants, and (f) no
tenant has notified Seller of any material, uncured defect or alleged defects
in its premises or the common areas of the Project. In the event any such
notices are received by Seller between the date of this Agreement and Closing,
copies thereof shall be furnished to Purchaser, and Seller shall be obligated
to correct the matters referred to therein prior to Closing.
M. Labor Contracts. Attached hereto as Exhibit H is a list of all
employees working on behalf of Seller at the Project, including their salaries
and benefits, all of whom are employees of Seller's operator for the Project;
and Purchaser will be under no obligation to use or hire such employees for
the Project after Closing. There are no employment agreements or union
contracts with respect to the Project that will be binding on Purchaser after
Closing. There are no unfair labor proceedings, strikes or other employee
disputes pending or, to the best of Seller's knowledge, threatened with
respect to the Project. To Seller's knowledge, all employees working at the
Project comply with all immigration laws and have all work permits, visas and
other documents necessary to legally work at the Project.
N. Disclosure. There are no contracts or agreements of any kind relating
to the Project to which Seller or its agents is a party and which would be
binding on Purchaser after Closing, including brokerage agreements, other than
this Agreement, the documents delivered pursuant hereto, the Permitted
Exceptions, the Equipment Leases, Tenant Leases, Service Contracts, the 12
Acre Contract, the 2-3 Acre Contract and the Development Contracts. To the
best of Seller's knowledge, there are no other facts or events which could
materially affect the Project which have not been disclosed to Purchaser.
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O. Financial Information. Seller has delivered to Purchaser audited
financial statements for the Project for calendar years 2001 and 2002,
prepared by Ernst & Young. Such financial statements are true, complete and
correct in all material respects and have been prepared in accordance with
generally accepted accounting principles, and no material adverse change has
occurred from the respective dates thereof to the date hereof; no material
adverse change has occurred in the condition (financial or otherwise) of the
Project, since the dates of such statements.
P. Bookings. Attached hereto as Exhibit I is a list of all bookings for
the Project as of the date set forth on Exhibit I.
Q. Hazardous Wastes. Except as disclosed in the environmental reports for
the Project which have been delivered to Purchaser, to the best of Seller's
knowledge, the Project is free of asbestos, PCBs, toxic wastes and other
hazardous materials, has never been used as a dumping site or storage site for
toxic or hazardous wastes and is in compliance with all environmental laws.
For purposes of this paragraph, "toxic wastes and other hazardous materials"
shall include any hazardous, toxic or dangerous waste, substance or material
defined as such in (or for purposes of) the Comprehensive Environmental
Response, Compensation, and Liability Act, and so-called "Superfund" or
"Superlien" law, or any Federal, state or local statute, law, ordinance, code,
rule, regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning, any hazardous, toxic or
dangerous waste, substance or material, as now or at any time hereafter in
effect.
R. ERISA. Seller is not and is not acting on behalf of an "employee
benefit plan" within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), a "plan" within the meaning
of Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code")
or an entity deemed to hold "plan assets" within the meaning of 29 C.F.R. ss.
2510.3-101 of any such employee benefit plan or plans.
S. Management Agreement. Seller and Operator are parties to a Master
Management Agreement, dated August 17, 1989, as amended on November 30, 1999,
for the Project (the "Management Agreement"). The Management Agreement has not
been modified or amended and is in full force and effect. Seller has
previously delivered to Purchaser a true, correct and complete copy of the
Management Agreement. To the best of Seller's knowledge, there are no defaults
by Seller under the Management Agreement and there are no existing events
which with the passage of time or giving of notice or both could become a
default by Seller under the Management Agreement, and there are no disputes or
claims or rights of set-off against Seller under the Management Agreement. No
unpaid incentive fees have accrued under the Management Agreement, and Seller
does not anticipate or believe that any will accrue during calendar year 2003.
T. First Mortgage. Attached hereto as Exhibit J is a list of all
agreements and other documents, including all amendments and modifications,
evidencing, securing or relating to First Mortgage (the "Loan Documents").
Seller has heretofore delivered to Buyer true, correct and complete copies of
the Loan Documents. The principal amount of the First Mortgage currently
outstanding is approximately Sixty-Three Million Dollars ($63,000,000), all
accrued interest which has become due thereunder has been paid to the date
hereof, and there are no other amounts owed in connection with the First Note
or the other Loan Documents. Seller has not received any notification that
Seller is in default of its obligations under the Loan Documents, and to
Seller's knowledge, Seller is not in default of its obligations thereunder;
and there are no disputes or claims outstanding in connection with the Loan
Documents.
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U. Development. Attached hereto as Exhibit K is a list of all contracts
to which Seller is a party for development of improvements on the Land,
including (without limitation) a list of all amendments and modifications
thereto and assignments thereof (which contracts, together with any
development contracts entered into with respect to the Project after the date
hereof with the consent of Purchaser pursuant to Section 6 below, are herein
referred to collectively as the "Development Contracts"). Seller has hereto
delivered to Purchaser true and correct copies of the Development Contracts.
Except as may be shown in said exhibit, all of the Development Contracts are
in full force and effect and free from default by Seller and there is no
existing event which, with the passage of time or giving of notice, or both,
could become a default by Seller under the Development Contracts, and there
are no disputes, claims or rights of set-off under the Development Contracts.
All amounts that have been paid and are remaining to be paid by Seller under
the Development Contracts are set forth in Draw Request No. 10, dated March
25, 2003, a true and correct copy of which has been delivered to Purchaser.
Seller has not received any information which would indicate that development
of the Project can not be completed substantially in accordance with the
budget attached hereto as Exhibit T (the "Development Budget") and the plans
previously delivered to Purchaser (the "Development Plans"), and such
Development Budget and Development Plans incorporate all material information
known to Seller about the completion of such development.
V. Golf Membership Documents. Attached hereto as Exhibit U is a list of
all agreements and other documents, including all amendments and
modifications, evidencing or relating to memberships in the Project's golf
club (the "Golf Membership Documents"). Seller has heretofore delivered to
Buyer true, correct and complete copies of the Golf Membership Documents.
Seller has not received any notification that Seller is in default of its
obligations under the Golf Membership Documents, and to Seller's knowledge,
Seller is not in default of its obligations thereunder; and there are no
disputes or claims against Seller outstanding in connection with the Golf
Membership Documents. All money which has been paid under the Golf Membership
Documents has been deposited in the Golf Membership Deposit Account.
W. Van Loan Documents. Attached hereto as Exhibit V is a list of all
agreements and other documents, including all amendments and modifications,
evidencing or relating to the financing of the Project's vans (the "Van
Financing Documents"). Seller has heretofore delivered to Buyer true, correct
and complete copies of the Van Financing Documents. Seller has not received
any notification that Seller is in default of its obligations under the Van
Financing Documents, and to Seller's knowledge, Seller is not in default of
its obligations thereunder; and there are no disputes or claims against Seller
outstanding in connection with the Van Financing Documents. There is currently
outstanding $ owed by Seller under the Van Financing Documents.
PURCHASER ACKNOWLEDGES THAT, IF IT DOES NOT ELECT TO TERMINATE THIS
AGREEMENT PURSUANT TO SECTION 6(4) BELOW, PURCHASER SHALL BE DEEMED SATISFIED
WITH ITS INVESTIGATION OF THE PROJECT SUBJECT TO THE REPRESENTATIONS AND
WARRANTIES SET FORTH HEREIN. EXCEPT AS SET FORTH HEREIN, THE PROJECT IS BEING
SOLD "AS IS" AND SELLER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, INCLUDING ANY IMPLIED REPRESENTATION OR WARRANTY AS TO THE CONDITION,
MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PROJECT, OR ANY OTHER MATTER; AND IT IS UNDERSTOOD THAT, EXCEPT FOR THE
EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT,
PURCHASER TAKES THE PROJECT ON AN "AS IS" AND "WHERE IS" BASIS. If Purchaser
discovers during the Inspection Period that any of Seller's representations
and warranties herein are not true and Purchaser nonetheless elects to waive
its
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right to terminate this Agreement pursuant to Section 6(4) below, Purchaser
shall be deemed to have waived any claim for the breach of such representation
and warranty. If Purchaser discovers after the Inspection Period and prior to
the Closing that any of Seller's representations and warranties herein are not
true and Purchaser desires to terminate this Agreement as a result thereof,
Purchaser shall give Seller notice of the breach of such representation and
warranty, and Seller shall have a maximum of ten (10) business days to cure
such breach. If the cost to cure such default does not exceed $100,000 but
Seller is unable to cure such default within such ten (10) business day period
after using best efforts to do so, Seller may deposit 150% of the cost to cure
such default in a joint order escrow with the Title Company in which case
Purchaser shall be obligated to proceed with the Closing notwithstanding such
default. The funds in such escrow shall be released to Seller upon the curing
of such default; provided, however, if such default is not cured within twelve
(12) months, Purchaser may use such money to cure such default or reimburse
itself for such cure. The representations and warranties set forth above shall
terminate twelve (12) months after the Closing except to the extent Purchaser
gives Seller notice of the breach thereof during such twelve (12) month
period. For purposes of this Agreement, phrases such as "Seller's knowledge,"
"to the best of Seller's knowledge" or "known to Seller' shall mean the
current actual knowledge of Xxxx X. Xxxxx, Xxxxxxx X. Xxxxx and/or Xxxxxx X.
Xxxxx on the particular date the representation or warranty is deemed to be
made, without independent inquiry or investigation other than inquiries of the
general manager and controller for the Project.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants to, and covenants and agrees with, Seller as of the
date hereof and as of the Closing as follows (all of which representations
shall be deemed automatically remade as of the Closing):
A. Due Organization. Purchaser is a limited partnership organized,
validly existing and in good standing under the laws of the State of Delaware.
Purchaser has full power and authority, and is duly authorized, to execute,
enter into, deliver and perform this Agreement and its obligations hereunder.
B. Power. This Agreement and all other agreements, instruments and
documents required to be executed or delivered by Purchaser pursuant hereto
have been or (if and when executed) will be duly executed and delivered by
Purchaser, and are or will be legal, valid and binding obligations of
Purchaser. No consents and permissions are required to be obtained by
Purchaser for the execution and performance of this Agreement and the other
documents to be executed by Purchaser hereunder. The consummation of the
transactions contemplated herein and the fulfillment of the terms hereof will
not result in a breach of any of the terms or provisions of, or constitute a
default under, any agreement or document to which Purchaser is a party or by
which it is bound, or any order, rule or regulation of any court or of any
federal or state regulatory body or any administrative agency or any other
governmental body having jurisdiction over Purchaser.
C. No Proceedings. There are not now pending or, to the best of
Purchaser's knowledge, threatened, any proceedings, legal, equitable or
otherwise, against Purchaser which would affect its ability to perform its
obligations hereunder. There is not now pending or, to the best of Purchaser's
knowledge, threatened any action, suit or proceeding before any court or
governmental agency or body which might adversely affect Purchaser's ability
to perform its obligations hereunder.
SECTION 5. OPERATION OF THE PROJECT PRIOR TO CLOSING. The Seller shall do
all of the following, from and after the date hereof through and including the
Closing Date:
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(a) operate and maintain the Project in the same manner as currently
being operated and maintained, maintain the good will of the Project and
subject to damage, destruction or loss to the Project in which event
Purchaser shall have the rights set forth in Section 6(3), cause the
Project to be, on the Closing Date, in the same condition as exists as of
the date of this Agreement (normal wear and tear excepted); and promptly
correct all building code and other governmental violations with respect
to the Project of which it receives notice or has knowledge prior to
Closing;
(b) maintain the Furniture, Fixtures and Equipment in the same
manner as currently being maintained, and not remove any of the
Furniture, Fixtures or Equipment from the Project unless replaced with
Furniture, Fixtures and Equipment of at least as good a quality as that
removed;
(c) maintain the Consumables and Expendables in the same manner as
currently being maintained and in quantities consistent with historic
levels at the Project;
(d) maintain, or cause to be maintained, all existing insurance
carried by Seller on the Improvements;
(e) without the prior written consent of Purchaser which shall not
be unreasonably withheld or delayed, not enter into any new Project
Agreements, or any other agreements affecting the Project which would be
binding on Purchaser after Closing, not modify, amend, terminate, cancel
or grant concessions regarding any such existing contracts or agreements,
including the Management Agreement, which would be binding on the
Purchaser after Closing, and perform all of its obligations under the
Project Agreements, including the Management Agreement;
(f) without the prior written consent of Purchaser (except in the
case of emergencies), not make, or obligate itself to make, any material
alterations or modifications to the Project except as set forth in the
Second Loan Modification Agreement which is set forth on Exhibit J
attached hereto;
(g) not amend or modify the First Mortgage or the other Loan
Documents or the Van Financing Documents, not make any prepayment under
the First Mortgage or borrow additional money under the First Mortgage or
Van Financing Documents, and perform all of its obligations under the
First Mortgage and the other Loan Documents and the Van Financing
Documents;
(h) without the prior written consent of Purchaser, not enter into
any new bookings for the Project which are not in the ordinary course of
business and consistent with past practices or, after the end of the
Inspection Period, exceed one hundred (100) room nights or obligate the
Project to a rate which is not cancelable on thirty (30) days' notice or
less; and
(i) not make any material modifications to the Development Budget or
the Development Plans without the prior written approval of Purchaser,
which approval shall not be unreasonably withheld.
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SECTION 6. CONDITIONS TO CLOSING. In addition to the conditions provided
in other provisions of this Agreement, the parties' obligations to perform
their undertakings provided in this Agreement, are each conditioned on the
fulfillment of each of the following which is a condition to such party's
obligation to perform hereunder (subject to such party's waiver in strict
accordance with Section 9 below):
(1) Seller shall promptly deliver to Purchaser copies of Seller's
most recent survey and title report for the Project, and Purchaser shall
obtain and deliver to Seller as soon as possible each of the following:
(i) an ALTA/ACSM Class A survey of the Project (the "Survey") certified
to Purchaser, Mortgagee and the Title Company, (ii) evidence (which can
be in the form of a certificate of the surveyor in form and substance
acceptable to Purchaser) as to any flood plains affecting the Project,
and (iii) a current title insurance commitment for the Project (the
"Title Commitment") together with legible copies of all exceptions
appearing in such title commitment. Seller shall discharge any liens or
encumbrances of a definite or ascertainable amount shown therein,
including any mortgages or deeds of trust on the Project, other than the
First Mortgage. Purchaser shall have ten (10) days to approve the Survey
and all other matters in the Title Commitment. The First Mortgage and all
other matters showing thereon which are approved by Purchaser shall be
deemed "Permitted Exceptions." If Purchaser disapproves any other matters
in the Survey or Title Commitment, Seller shall use its best efforts to
cure such matters; but if Seller cannot cure such matters within fifteen
(15) days, Purchaser may elect to terminate this Agreement or accept such
matters as Permitted Exceptions; provided, however, Seller shall in any
event (a) cause to be discharged and released of record any liens or
monetary encumbrances voluntarily placed on the Project by Seller other
than the Loan Documents and the Equipment Leases and (b) cause to be
discharged and released of record or insured over any other liens or
monetary encumbrances up to the aggregate amount of $100,000 placed on
the Project.
(2) As a condition to each party's obligation to perform hereunder,
the due performance by the other of all undertakings and agreements to be
performed by the other hereunder and the truth of each representation and
warranty as set forth herein made pursuant to this Agreement by the other
at the Closing Date.
(3) As a condition to Purchaser's obligation to perform hereunder
(and not as a default), that there shall not have occurred between the
date hereof and the Closing Date, inclusive, destruction of or damage or
loss to the Project (whether or not covered by insurance proceeds) from
any cause whatsoever the cost of which to repair exceeds $500,000 in the
aggregate; provided, however, that in the event of such destruction or
damage, Purchaser may elect to proceed with the Closing in which case
Seller shall assign to Purchaser any claims for proceeds from the
insurance policies covering such destruction or damage (including any
rent loss insurance) and shall pay to Purchaser the amount of any
deductibles thereunder. If the cost of repairing the destruction, damage
or loss is less than $500,000 in the aggregate, the parties shall proceed
with the Closing as provided herein and the cost of repair shall be
deducted from the Purchase Price. Prior to the end of the Inspection
Period, Seller shall cause Purchaser to be named as an additional insured
as its interest may appear on Seller's business interruption policy for
the Project, which policy shall include coverage for at least one year of
business interruption at the Project. Proceeds under the business
interruption policy for the period prior to Closing shall be paid to
Seller, and proceeds under such policy for the period from and after
Closing shall be paid to Purchaser.
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(4) As a condition of Purchaser's obligation to perform hereunder
(and not as a default), Purchaser shall be satisfied in its sole and
absolute discretion with all aspects of the Project (including, but not
limited to, the physical and environmental condition of the Project);
provided, however, if Purchaser does not notify Seller in writing by the
end of the Inspection Period that it is not so satisfied, this condition
shall be deemed waived by Purchaser. Purchaser shall not be required to
give its reasons for terminating this Agreement pursuant to this
paragraph, and Purchaser's notice shall be conclusive evidence that it is
dissatisfied with the Project.
(5) As a condition to Purchaser's obligation to perform hereunder
(and not as a default), that there shall not have occurred at any time or
times on or before the Closing Date any taking or threatened taking of
the Project or any part thereof or any interest or estate therein by
condemnation, eminent domain or similar proceedings which is material to
the Project; provided, however, Purchaser may elect to waive such
condition. If the taking or threatened taking is not material to the
Project or if the taking or threatened taking is material and Purchaser
waives its right to terminate this Agreement, Seller shall assign to
Purchaser at Closing all of Seller's right, title and interest in and to
any proceeds resulting from any such proceeding. A taking or threatened
taking to the Project shall be deemed material if it reduces the value of
the Project by more than $500,000 or materially impacts the operation of
the Project.
(6) As a condition to Purchaser's obligation to perform hereunder,
that as of the Closing Date, the Project Agreements shall be in full
force and effect, unmodified and unwaived, and in good standing and free
from default by Seller except as reasonably approved otherwise by
Purchaser and except for Project Agreements which by their terms expire
prior to the Closing Date.
(7) Seller covenants and agrees, and it shall be a condition to
Purchaser's obligation to perform its undertakings hereunder, that from
and after the date hereof, at all reasonable times, Purchaser (and its
agents) shall be permitted access to the Project and to all books,
records and reports relating to the Project for the purpose of inspecting
same, and Purchaser (and its agents) shall have the right to photocopy
any and all such books, records and information. All information relating
to the Project made available to Purchaser shall be treated as
confidential. Purchaser (and its agents) shall also have the right to
meet with the operator of the Project (including key employees and
consultants) and tenants in the Project to discuss any matters relating
to the operation of the Project. Any entry by Purchaser and its agents on
the Project shall be upon reasonable prior notice to Seller, and
Purchaser will indemnify and hold Seller harmless against any and all
injuries, claims, losses, damages and expenses arising out of its
negligence in the performance of any such entry, inspection or other
activities. Prior to performing any inspections of the Project, Purchaser
shall provide Seller with a certificate of insurance from Purchaser's
insurance carrier evidencing that Purchaser has in place commercial
general liability insurance in an amount not less than $1,000,000
combined limits for any injuries, deaths or property damage sustained as
a result of such inspections. If this Agreement is terminated for any
reason, Purchaser shall return to Seller any documents related to the
Project which were given to Purchaser by Seller or its representatives.
(8) As a condition to Purchaser's obligation to perform hereunder,
no notices of any material violations of building codes or other
governmental regulations and no requests for material repairs to the
Project shall have been issued with respect to the Project which have not
been corrected prior to Closing; provided, however, if there are
-13-
any notices of immaterial violations or requests for repairs, Seller
shall give Purchaser a credit at Closing for the reasonable cost to
correct such notice or request.
(9) Seller acknowledges that Purchaser intends to obtain all
licenses, including liquor licenses, necessary for the operation of the
Project. To the extent necessary Seller shall cooperate with Purchaser to
obtain the required approvals for such license, and the costs and
expenses associated with Purchaser's efforts to obtain such licenses
shall be paid by the Purchaser. It is expressly understood and agreed
that Purchaser's ability to obtain all necessary licenses for the
Project, including liquor licenses, is a condition precedent to the
obligations of Purchaser to purchase the Project pursuant to this
Agreement. Purchaser agrees to use its best efforts to obtain the
required licenses; and Purchaser may, upon at least five (5) days' prior
notice, extend the Closing Date for up to ninety (90) days in order to
obtain the liquor license. If the Closing is postponed pursuant to this
paragraph and, as a result, any estoppel certificates to be delivered
hereunder would be dated more than thirty (30) days prior to the Closing,
Seller shall use its best efforts to obtained updates of such estoppel
certificates; but Seller's ability to obtain such updates shall not be a
condition of Closing and Purchaser shall proceed with the Closing on the
terms set forth herein even though such estoppel certificates are not
dated within thirty (30) days of Closing.
(10) As a condition to Purchaser's obligation to perform hereunder,
Purchaser may in its sole discretion elect to either (a) assume the
Management Agreement at Closing in which case Seller shall deliver to
Purchaser an estoppel certificate from the Operator, dated not more than
thirty (30) days prior to Closing, in the form of Exhibit L attached
hereto, or (b) require Purchaser to terminate the Management Agreement
immediately prior to the Closing in which case Seller shall deliver a
termination of the Management Agreement to Purchaser at the Closing and
Purchaser shall give Seller a credit at the Closing for any termination
fee owed in connection therewith up to a maximum of $1,000,000. Purchaser
shall give Seller notice of its election at least thirty (30) days prior
to the Closing.
(11) As a condition to Purchaser's obligation to perform hereunder,
Purchaser shall have obtained approval from the board of trustees of its
general partner for the transaction set forth herein. If Purchaser does
not notify Seller by the end of the Inspection Period that Purchaser has
not obtained such approval, this condition shall be deemed waived by
Purchaser. If Purchaser so notifies Seller by the end of the Inspection
Period that Seller has not obtained approval for the transaction set
forth herein, this Agreement shall be null and void and the Xxxxxxx Money
shall be returned to Purchaser.
(12) Purchaser shall have received approval from the Mortgagee for
the assumption of the First Mortgage by Purchaser if required under the
terms of the Loan Documents, and Purchaser shall have received an
estoppel certificate from the Mortgagee, dated not more than thirty (30)
days prior to Closing, confirming (a) the list all loan documents,
including amendments and modifications thereto, evidencing, securing or
otherwise affecting the loan secured by the First Mortgage, (b) the
unpaid principal balance of the First Mortgage as of the Closing Date,
(c) that there are no other outstanding obligations under the First
Mortgage or the other Loan Documents other than accrued interest, (d)
confirming the date to which interest has been paid under the First
Mortgage, (e) the amounts held in escrow by the Mortgagee for the
Project, and (f) that there is no default under the First Mortgage or the
other Loan Documents or any existing events which with the giving of
notice or the passage of time or both could become a default under the
First Mortgage or other Loan Documents. If the Mortgagee is unwilling
-14-
to give an estoppel certificate in the foregoing form through no fault of
Seller, Purchaser shall accept such other form as the Mortgagee is
reasonably willing to give. Seller intends to request a release from the
Mortgagee for Xxxx X. Xxxxx from his obligations under the guaranty
listed on Exhibit J (the "Stone Release"); and, if Seller is unable to
obtain the Stone Release, Purchaser shall indemnify and hold Xxxx X.
Xxxxx harmless from any obligations or liabilities under such guaranty to
the extent such obligations or liabilities relate to events occurring at
the Project from and after the Closing (the "Stone Indemnity").
(13) If Seller enters into the 12 Acre Contract, Seller shall use
its best efforts to obtain an estoppel certificate from the purchaser
under the 12 Acre Contract, dated not more than thirty (30) days prior to
Closing, confirming (a) that the 12 Acre Contract has not been modified
or amended and is in full force and effect, (b) that Seller has performed
all of its obligations under the 12 Acre Contract which are required to
be performed through the date of such estoppel certificate, (c) the
amount of any deposits or other payments which have been made under the
12 Acre Contract, and (d) that there is no default by Seller under the 12
Acre Contract or any existing events which with the giving of notice or
the passage of time or both could become a default by Seller under the 12
Acre Contract. Seller shall include a provision in the 12 Acre Contract
requiring the purchaser therein to deliver the foregoing estoppel
certificate at Seller's request; but, if Seller is unable to obtain and
deliver such estoppel certificate to Purchaser prior to the Closing
through no fault of Seller, Seller shall deliver the foregoing estoppel
certificate to Purchaser instead.
(14) If Seller enters into the 2-3 Acre Contract, Seller shall use
its best efforts to obtain an estoppel certificate from the purchaser
under the 2-3 Acre Contract, dated not more than thirty (30) days prior
to Closing, confirming (a) that the 2-3 Acre Contract has not been
modified or amended and is in full force and effect, (b) that Seller has
performed all of its obligations under the 2-3 Acre Contract which are
required to be performed through the date of such estoppel certificate,
(c) the amount of any deposits or other payments which have been made
under the 2-3 Acre Contract, and (d) that there is no default by Seller
under the 2-3 Acre Contract or any existing events which with the giving
of notice or the passage of time or both could become a default by Seller
under the 2-3 Acre Contract. Seller shall include a provision in the 2-3
Acre Contract requiring the purchaser therein to deliver the foregoing
estoppel certificate at Seller's request; but, if Seller is unable to
obtain and deliver such estoppel certificate to Purchaser prior to the
Closing through no fault of Seller, Seller shall deliver the foregoing
estoppel certificate to Purchaser instead.
(15)At Purchaser's election, Seller shall use its best efforts to
obtain an estoppel certificate from the other parties to the Development
Contracts, dated not more than thirty (30) days prior to Closing,
confirming (a) that the Development Contracts have not been modified or
amended and are in full force and effect, (b) that Seller has performed
all of its obligations under the Development Contracts which are required
to be performed through the date of such estoppel certificate, (c) the
amount of any deposits or other payments which have been made under the
Development Contracts and the amounts remaining to be paid under the
Development Contracts, and (d) that there is no default by Seller under
the Development Contracts or any existing events which with the giving of
notice or the passage of time or both could become a default by Seller
under the Development Contracts. If Seller is unable to obtain and
deliver such estoppel certificate to Purchaser prior to the Closing
through no fault of Seller, Seller shall deliver the foregoing estoppel
certificate to Purchaser instead.
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SECTION 7. CLOSING.
A. Time. The Closing hereunder shall occur on the Closing Date at the
offices of the Title Company.
B. Actions. At the Closing, each party shall satisfy itself that the
other is then in position to deliver the items specified in Section 7C below
and that the conditions contained herein have been satisfied. Upon being so
satisfied and concurrently with the delivery of the documents described below,
the following, subject to the terms and conditions hereof, shall occur:
(1) Seller shall convey the Project to Purchaser on the terms set
forth herein; and
(2) Purchaser shall pay to Seller the cash portion of the Purchase
Price by wire transfer of immediately available funds, plus or minus
prorations as set forth herein, on the terms set forth herein.
At Purchaser's election, the Closing shall occur either as a "New York
style" closing or through an escrow, the cost of which shall be shared equally
between Purchaser and Seller. If Purchaser elects to have a "New York style"
closing, Seller shall deliver to the Title Company a so-called gap indemnity
agreement. Purchaser shall receive full possession of the Project at Closing,
subject only to the Management Agreement if applicable, the Tenant Leases and
the Permitted Exceptions and the Van Financing Documents.
C. Deliveries.
(1) At the Closing, Purchaser shall receive all of the following, in
form and substance reasonably satisfactory to Purchaser (it being agreed
by Purchaser that the documents attached hereto as exhibits are
satisfactory in form to Purchaser):
(a) a special warranty deed in the form customarily used in the
jurisdiction where the Project is located;
(b) a xxxx of sale and assignment for the Personal Property in
the form of Exhibit M, executed by Seller;
(c) an assignment to Purchaser's lessee of the Service and
Supply Contracts, including the Management Agreement if it is to be
assumed under the terms hereof, and the Development Contracts in the
form of Exhibit N attached hereto (the "Assignment of Service and
Supply Contracts and Development Contracts"), executed by Seller,
assigning to Purchaser the Service and Supply Contracts, except for
those which Purchaser has elected not to assume pursuant to
subparagraph (l) below and except for the Management Agreement if it
is not to be assumed under the terms hereof, and the Development
Contracts;
(d) an assignment of the Tenant Leases, in the form of Exhibit
O hereto (the "Assignment of Tenant Leases"), executed by Seller,
assigning the Tenant Leases to Purchaser;
(e) an assignment to Purchaser's lessee of the Equipment
Leases, in the form of Exhibit P hereto (the "Assignment of
Equipment Leases"), executed by
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Seller, assigning to Purchaser the Equipment Leases except for those
which Purchaser has elected not to assume pursuant to subparagraph
(l) below;
(f) a certificate from Seller that each of the representations
and warranties contained in Section 3 hereof is true and correct as
set forth herein as of the Closing Date. Such certificate shall
contain an updated list of the Tenant Leases, Service Contracts and
Equipment Leases, which Seller shall certify to be true and correct
as of Closing.
(g) written acknowledgments (the "Estoppel Certificates") from
the parties (other than the Seller) obligated on the Tenant Leases
(said estoppels from tenants to be in the form of Exhibit Q hereto),
dated as of a date not more than thirty (30) days prior to Closing;
(h) all licenses, permits, approvals, zoning exceptions and
approvals, consents and orders of governmental, municipal or
regulatory authorities in Seller's possession or control and
relating to the ownership, operation and use of the Project,
including, without limitation, a certificate of occupancy for the
Project;
(i) notices to each of the tenants under the Tenant Leases,
notifying them of the sale of the Project and directing them to pay
all future rent as Purchaser may direct, and notices to the other
parties under the Service and Supply Contracts and Equipment Leases
notifying them of the sale of the Project to Purchaser;
(j) a closing statement setting forth all prorations and
credits required hereunder;
(k) UCC, judgment and tax lien searches showing no financing
statements on file with respect to the Personal Property other than
those in favor of the Mortgagee, the lender under the Van Financing
Documents and any lessor under the Equipment Leases;
(l) terminations, effective no later than Closing, of (i) those
Service and Supply Contracts and Equipment Leases which Purchaser
has elected not to assume provided such Contracts and Leases are
terminable prior to Closing and provided Purchaser pays any
termination fees, together with an indemnity from Seller for any
claims or liabilities arising under such Service and Supply
Contracts and Equipment Leases, and (ii) the Management Agreement if
it is not to be assumed under the terms hereof;
(m) an affidavit from Seller that it is not a "foreign person"
or subject to withholding requirements under the Foreign Investment
in Real Property Tax Act of 1980, as amended;
(n) any documents reasonably required of Seller by the Title
Company, including an owner's affidavit as to parties in possession
and work in progress;
(o) evidence reasonably satisfactory to Purchaser and the Title
Company that the sale of the Project to Purchaser has been duly
authorized by Seller.
-17-
(p) the original of all Project Agreements to the extent they
are in the possession of Seller or its agents;
(q) all keys and combinations to locks located at the Project;
(r) except to the extent previously delivered to Purchaser, all
soil reports, engineering studies, maintenance records, consultant
reports, plans and specifications and books and records relating to
the Project which are in the possession of Seller or its managing
agent;
(s) a complete set of all guest registration cards, guest
transcripts, guests' histories and all other guest information;
(t) a complete list of all advance room reservations and
functions in reasonable detail so as to enable Purchaser to honor
them;
(u) evidence that Seller has complied with all bulk sales laws
or an indemnity from Seller for all claims arising out of Seller's
failure to give any bulk sale notices required by law;
(v) an assignment of Seller's rights under the Loan Documents
to the escrow pursuant to which the deposits from prospective
members for the Project's golf course are being held, together with
written confirmation from the escrow holder that the escrow holder
is holding all amounts required to be held in escrow in connection
with the golf course;
(w) if any employees at the Project are covered by any defined
benefit programs, a letter from the trustee or sponsor for such
program confirming that such programs are not underfunded as of the
Closing;
(x) an assignment of the 12 Acre Contract in the form of
Exhibit R attached hereto (the "Assignment of the 12 Acre
Contract"), executed by Seller, assigning the 12 Acre Contract to
Purchaser;
(y) and assignment of the 2-3 Acre Contract in the form of
Exhibit S attached hereto (the "Assignment of the 2-3 Acre
Contract"), executed by Seller, assigning the 2-3 Acre Contract to
Purchaser;
(z) any documents reasonably required by the Mortgagee or the
lender under the Van Financing Documents for the assignment by
Seller of the Loan Documents and the Van Financing Documents
respectively; and
(aa) and any transfer and sales tax returns required by law.
(2) Seller shall have received from Purchaser all of the following, in
form and substance reasonably satisfactory to Seller (it being agreed by
Seller that the documents attached hereto as exhibits are satisfactory in form
to the Seller):
(a) payment of the Purchase Price, plus or minus prorations;
(b) a certificate from Purchaser that each of the representations
and warranties contained in Section 4 is true and correct as of the
Closing Date;
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(c) copies of the Assignment of Service and Supply Contracts and
Development Contracts, the Assignment of Tenant Leases, the Assignment of
Equipment Leases, the Assignment of the 12 Acre Contract and the
Assignment of the 2-3 Acre Contract, executed by Purchaser;
(d) any transfer and sales tax returns required by law;
(e) any documents reasonably required by the Mortgagee or the lender
under the Van Financing Documents for the assumption by Purchaser of the
Loan Documents and the Van Financing Documents respectively; and
(f) the Stone Indemnity executed by Purchaser if the Mortgagee does
not deliver the Stone Release by Closing.
D. Prorations. The Purchase Price for the Property shall be subject to
prorations and credits as follows to be determined as of 12:01 A.M. on the
Closing Date, the Closing Date being a day of income and expense to Purchaser:
1. Hotel Revenues. Except as set forth below, Seller shall be
entitled to all hotel room, food service, bar, beverage and liquor
revenues and charges and all revenues and charges from hotel room
operations, restaurant operations, hotel banquet and conference facility
operations, and other revenue of any kind attributable to the same for
the period prior to 12:01 a.m. on the Closing Date. Purchaser shall be
entitled to all hotel room, food service, bar, beverage and liquor
revenues and charges and all revenues and charges from restaurant
operations, hotel banquet and conference facility operations, and all
other revenue of any kind attributable to any of the same for the period
on and after 12:01 a.m. on the Closing Date. Notwithstanding the
foregoing, Purchaser shall be entitled to one-half (1/2) of the revenue
from hotel rooms at the Project for the night preceding the Closing.
Purchaser shall not give Seller a credit at Closing for any accounts
receivable in connection with the Project as of Closing; but Purchaser
shall use reasonable efforts to collect such accounts receivable and
shall remit them to Seller within fifteen (15) days of collection, less
all reasonable costs of collection; provided, however, any collection of
account receivables shall be applied to those accounts designated by the
payor, and, if there is no such designation, first to undisputed accounts
receivable accruing prior to Closing but less than ninety (90) days old
and then to undisputed accounts receivable accruing after Closing and
lastly to undisputed accounts receivable accruing prior to Closing which
are more than ninety (90) days old. Seller shall deliver to Purchaser or
provide Purchaser a credit against the Purchase Price for the Project in
an amount equal to all guest reservation deposits held by the hotel for
hotel guests arriving or staying after check out time for the Project on
the Closing Date. If any account receivable accruing prior to the Closing
is not paid within forty-five (45) days of the due date, Seller may elect
to pursue the party obligated on the account receivable; and Purchaser
shall cooperate in such pursuit provided Purchaser shall not be obligated
to become a party to any lawsuit and provided Purchaser shall not incur
any expense as a result thereof
2. Rents payable under Tenant Leases. Any portion of any Rents
collected subsequent to the Closing Date and properly allocable to
periods prior to the Closing Date, net of Purchaser's costs of
collection, if any, shall be paid, promptly after receipt, to the Seller,
but subject to all of the provisions of this Section hereof; and any
portion thereof properly allocable to periods subsequent to the Closing
Date, if any, shall be paid to Purchaser. Any amount collected from a
tenant shall first be applied to such tenant's
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current monthly rental and then to past due amounts in the reverse order
in which they were due. Any advance rental payments or deposits paid by
tenants prior to the Closing Date and applicable to the period of time
subsequent to the Closing Date and any security deposits or other amounts
paid by tenants, together with any interest on both thereof to the extent
such interest is due to tenants, shall be credited to Purchaser on the
Closing Date. No credit shall be given the Seller for accrued and unpaid
Rent or any other non-current sums due from tenants until said sums are
paid.
3. Cash. Purchaser shall give Seller a credit at Closing for all
xxxxx cash funds at the Project and all cash in any operating accounts
for the Project to the extent such xxxxx cash and operating accounts are
transferred to Purchaser at Closing. Purchaser and Seller shall make
mutually satisfactory arrangements for counting such cash and determining
the balances in the operating accounts as of 12:01 a.m. Central time on
the Closing Date. Seller shall also receive a credit for any cash in
escrow accounts controlled by the Mortgagee which are set forth in the
Loan Documents, other than any cash in the Golf Membership Deposit
Account, provided Seller's rights to such escrow accounts are transferred
to Purchaser at Closing.
4. Trade Payables. Trade payables shall mean (for all purposes)
under this Agreement open accounts payable to trade vendors or suppliers
of the Project's hotel, restaurant, bar or similar facilities. Seller
agrees to give Purchaser a credit at Closing for all trade payables from
the Project which have accrued on or prior to 12:01 a.m. Central time on
the Closing Date, and Purchaser shall be obligated to pay such payables
to the extent it has received a credit from Seller at Closing. Purchaser
agrees to pay all trade payables from the Project which have accrued
after 12:01 a.m. Central time on the Closing Date and shall and hereby
does indemnify and hold Seller harmless from payment of the same.
Purchaser shall also assume responsibility for any purchase orders made
by Seller in the ordinary course of business for Expendables and
Consumables not delivered to the Project as of the Closing Date provided
the Consumables and Expendables at the Project are at historic levels on
the Closing Date. The indemnities contained or provided for in this
section survive Closing.
5. Banquet and Event Deposits. Purchaser shall receive and be
entitled to a credit against the Purchase Price for all prepaid deposits
for banquets and other functions that are scheduled to take place at the
Project on or after the Closing Date.
6. Service Contracts and Equipment Leases. Any amounts prepaid or
payable under any Service Contracts or Equipment Leases which Purchaser
has elected to assume shall be prorated at the Closing as of the Closing
Date with Seller obligated for all sums accrued prior to 12:01 a.m. on
the Closing Date and Purchaser obligated for all sums accrued after 12:01
a.m. on the Closing Date. Seller shall remain liable for all obligations
under Service Contracts and Equipment Leases which Purchaser has not
elected to assume in accordance with the terms hereof.
7. Sales Tax. Seller shall give Purchaser a credit for any and all
sales, occupancy, use or other taxes due in connection with the operation
of the Project which have accrued prior to the Closing Date and shall
indemnify Purchaser for all such taxes to the extent Purchaser has not
received such credit. Purchaser shall be responsible to pay all such
taxes to the extent it has received a credit and shall indemnify Seller
for such taxes. The indemnifications set forth herein shall survive the
Closing.
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8. Taxes. Purchaser shall receive a credit for any accrued but
unpaid real estate taxes imposed in respect of the Project for the
portion of the current year which has elapsed prior to the Closing Date
(and to the extent unpaid, for prior years). If the amount of any such
taxes have not been determined as of Closing, such credit shall be based
on 105% of the most recent ascertainable taxes and shall be reprorated
upon issuance of the final tax xxxx. Seller shall also give Purchaser a
credit for any special assessments which are levied or charged against
the Project prior to Closing, whether or not then due and payable.
9. Utilities. Utilities and fuel, including, without limitation,
steam, water, electricity, gas and oil shall be prorated as of Closing.
The Seller shall cause the meters, if any, for utilities to be read the
day on which the Closing Date occurs and to pay the bills rendered on the
basis of such readings. If any such meter reading for any utility is not
available, then adjustment therefor shall be made on the basis of the
most recently issued bills therefor which are based on meter readings no
earlier than thirty (30) days prior to the Closing Date; and such
adjustment shall be reprorated when the next utility bills are received.
Seller shall receive a credit at Closing for any refundable deposits made
by Seller with utility companies for the Project.
10. Employee Expenses. Seller has informed Purchaser that all
persons currently employed for work in or in connection with the Project
and its operation ("Employees") are employees of third party manager of
the hotel and not of Seller. Purchaser shall receive a credit at Closing
for any wages or benefits accrued prior to the Closing which are payable
or owed to the Employees, including any accrued sick, personal and
vacation days and any unfunded or underfunded pension obligations; and
Seller shall indemnify Purchaser against any claim in connection with
such obligations to the extent not credited to Purchaser at the Closing.
The indemnity provided herein shall survive the Closing. In addition,
Seller shall comply with all obligations imposed on Seller, by the
Consolidated Omnibus Budget Reconciliation Act ("COBRA") or by other
applicable federal or state laws regarding continuation coverage rights,
to the extent that it is required to do so under applicable laws.
11. Management Agreement. Management fees payable under the
Management Agreement shall be prorated at Closing on an estimated basis.
As soon as the Operator has finally determined the management fees for
the year in which the Closing occurs, Seller and Purchaser shall
reprorate such management fees.
12. Golf Operations. All revenue from golf operations at the
Project, including annual membership fees, shall be prorated at Closing,
and Seller shall give Purchaser a credit for any initiation fees or
payments which have been deposited with Seller prior to the Closing
except to the extent such initiation fees or deposits are being held by
the Mortgagee or have been used for the development of the Project's new
golf course or for the Project's golf membership program, all as provided
in the budget approved in writing by Purchaser.
13. First Mortgage. Seller shall receive a credit at Closing for any
prepaid interest under the First Mortgage, and Buyer shall receive a
credit at Closing for any accrued interest and other outstanding
obligations under the First Mortgage.
14. Golf Course Development. Purchaser shall give Seller a credit at
Closing for any amounts expended by Seller after the date hereof and
prior to the Closing in accordance with the Development Budget, except to
the extent Seller is reimbursed for
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such costs out of the Golf Membership Deposit Escrow Account maintained
by the Mortgagee. Seller shall have the right to use funds in the Golf
Membership Deposit Escrow for such expenditures in accordance with the
Development Budget, but Seller shall not be entitled to any credit at
Closing for the balance in the Golf Membership Deposit Escrow.
15. Pro Shop Inventory. Purchaser shall give Seller a credit at
Closing for eighty percent (80%) of Seller's cost of the inventory in the
Project's pro shop.
At least five (5) days prior to Closing, Seller shall deliver to
Purchaser copies of all information and records necessary to support the
prorations hereunder. In the event any prorations made pursuant hereto shall
prove incorrect for any reason whatsoever, either party shall be entitled to
an adjustment to correct the same. The parties shall reprorate the foregoing
amounts and agree upon a final proration of all items set forth herein within
ninety (90) days after the Closing except for items with respect to which the
parties have not received final information within such ninety (90) day
period.
E. Expenses. The Seller shall pay (1) the so-called grantor's tax payable
in connection with the transfer of the Project to Purchaser, (2) all of its
own legal costs, (3) one-half of any escrow or closing fees charged by the
Title Company, (4) any costs or expenses charged by the Mortgagee in
connection with the approval of the transaction set forth herein and the
assumption of the First Mortgage by Purchaser, including the cost to Purchaser
of a so-called non-consolidation opinion and an independent director, (5) any
fees charges by the lessors under the Equipment Leases for the transfer of the
Equipment Leases to Purchaser, and (6) any fees charged by the lender under
the Van Financing Documents. Purchaser shall pay (1) any and all documentary
or transfer taxes payable in connection with the recording of the deed
provided in this Agreement except for the so-called grantor's tax, (2) all
expenses of or related to the policies of owner's title insurance (including,
but not limited to, insurance premiums, the costs of endorsements and the cost
of reinsurance), except for the costs of any endorsements which Seller is
obligated to obtain pursuant to the terms hereof, (3) all of its own legal and
due diligence costs, (4) the cost of the survey of the Project, and (5)
one-half of any escrow or closing fees charged by the Title Company. Any other
closing costs not specifically allocated to either Seller or Purchaser under
this Agreement shall be allocated to the party customarily bearing such cost
in the county where the Project is situated.
F. Title. At the Closing and as a condition to the Closing, Purchaser
shall have received from the Title Company, an ALTA owner's policy of title
insurance or equivalent in form and substance acceptable to Purchaser (the
"Owner's Policy") with Purchaser named as the insured, dated as of the Closing
Date, with a liability limit equal to the Purchase Price, and with reinsurance
in amounts and with companies acceptable to Purchaser, insuring that fee title
to the Land and Improvements are vested in Purchaser, subject only to the
Permitted Exceptions and Tenant Leases. The Owner's Policy shall include the
following express affirmative coverage (either by the express terms of the
Owner's Policy or by title endorsements), all in form and substance reasonably
acceptable to Purchaser provided the Title Company has agreed in writing to
issue such coverage prior to the end of the Inspection Period:
(a) protection against (i) liens for labor, services or materials
whether or not of record; (ii) parties in possession (other than tenants
under Tenant Leases, as such tenants only); (iii) unrecorded easements;
(iv) taxes or special assessments not shown by the public records; and
(v) exceptions which a correct survey would disclose;
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(b) a long form (3.1) zoning endorsement including insurance that
the Project is in compliance with all zoning requirements relating to
parking and loading docks;
(c) if the legal description for the Land contains more than one
parcel, a contiguity endorsement for each of the parcels which comprise
the Land insuring that such parcels are contiguous parcels of real
estate;
(d) coverage insuring that the Project has access, that the Project
abuts on physically open streets and that the property insured in the
Owner's Policy is the same as that shown on the Survey (defined below);
(e) the owner's equivalent of a so-called Comprehensive Endorsement
No. 1, insuring that there are no encroachments over property lines or
easements and that there are no violations of any covenants, conditions
or restrictions of record;
(f) a endorsement insuring that the Project includes only the tax
parcel numbers listed on the Owner's Policy and that none of such numbers
covers property other than the Project;
(g) an endorsement insuring that all utilities serving the Project
come through publicly dedicated streets or valid, perpetual easements;
(h) an endorsement insuring over all survey exceptions; and
(i) an endorsement that the Project complies with all subdivision
laws.
Except with the prior written approval of Purchaser, Seller shall not deliver
(nor cause or permit to be delivered) to the Title Company, on behalf of the
Seller, any indemnities of the Seller relating to the issuance of the Owner's
Policy for any liens in excess of $100,000. If the Owner's Policy discloses
any liens or encumbrances which are not Permitted Exceptions which Seller is
obligated to cure pursuant to Section 6(1) above, Purchaser may remove such
liens at Closing by paying so much of the Purchase Price to the holders of the
liens as is necessary to do so.
G. Guest Property. The parties shall arrange for hotel guests to sign new
deposit box or other appropriate receipts on the day before the Closing Date
with respect to baggage, personal property, laundry, valet packages and other
property checked or left in the care of Seller by transient hotel guests or
tenants or left in lockers by parties using the Project's golf courses; and,
to the extent such receipts are not obtained, such property shall be sealed,
listed in an inventory prepared and signed jointly by the parties as of the
Closing Date, and Purchaser shall be responsible from and after the Closing
Date for all such property listed in said inventory. Seller shall be
responsible for all items allegedly left at the Project by guests prior to
Closing and not listed on said inventory.
SECTION8. INDEMNIFICATION. (a) Except to the extent Purchaser has
received a credit therefore and except to the extent arising out of the
actions of Purchaser, Seller shall hold harmless, indemnify and defend the
Purchaser and Project from and against: (a) any and all obligations,
liabilities, claims, liens or encumbrances, whether direct, contingent or
consequential and no matter how arising, in any way related to or arising from
the Project prior to the Closing Date, including, but not limited to, (i) any
damage to property or injury to or death of any person occurring prior to the
Closing, (ii) claims by guests at the Project arising out of events occurring
prior to Closing, (iii) obligations to pay any taxes in connection with the
operation of the Project prior to Closing, and (iv) liabilities or obligations
with respect to employees at the Project
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accruing prior to Closing; (b) any loss or damage to Purchaser resulting from
any inaccuracy in or breach of any representation or warranty of Seller or
resulting from any breach or default by Seller under this Agreement; (c) any
claims for brokerage commissions or fees in connection with leases of the
Project executed prior to the Closing except to the extent Seller gives
Purchaser a credit for such commissions at Closing; (d) any obligations
existing on the Closing Date for tenant alterations, improvements and
punchlist items in connection with the Project arising out of tenant leases
for the Project executed prior to Closing; (e) any wages, salaries, pension
liabilities or fringe benefits accruing prior to Closing for those employees
of Seller or Seller's operator at the Project; and (f) all costs and expenses
of Purchaser, including reasonable attorneys' fees, related to any actual or
threatened actions, suits or judgments incident to any of the foregoing,
whether or not any such action or suit is ever filed or such judgment is ever
rendered.
(b) Except to the extent Seller has received a credit therefore and
except to the extent arising out of the actions of Seller, Purchaser shall
hold harmless, indemnify and defend the Seller from and against: (a) any and
all obligations, liabilities, claims, liens or encumbrances, whether direct,
contingent or consequential and no matter how arising, in any way related to
or arising from the Project from and after the Closing Date, including, but
not limited to, (i) any damage to property or injury to or death of any person
occurring after the Closing, (ii) claims by guests at the Project arising out
of events occurring after the Closing, (iii) obligations to pay any taxes in
connection with the operation of the Project after the Closing, and (iv)
liabilities or obligations with respect to employees of Purchaser or its
operator at the Project accruing after the Closing; (b) any loss or damage to
Seller resulting from any inaccuracy in or breach of any representation or
warranty of Purchaser or resulting from any breach or default by Purchaser
under this Agreement; (c) any claims for brokerage commissions or fees in
connection with leases of the Project executed after the Closing; (d) any
obligations incurred after the Closing Date for tenant alterations,
improvements and punchlist items in connection with the Project arising out of
tenant leases for the Project executed after the Closing; (e) any wages,
salaries, pension liabilities or fringe benefits accruing after the Closing
for those employees of Purchaser or Purchaser's operator at the Project; and
(f) all costs and expenses of Seller, including reasonable attorneys' fees,
related to any actual or threatened actions, suits or judgments incident to
any of the foregoing, whether or not any such action or suit is ever filed or
such judgment is ever rendered.
SECTION9. WAIVER. Each party hereto may, at any time or times, at its
election, waive any of the conditions to its obligations hereunder by a
written waiver expressly detailing the extent of such waiver (and no other
waiver or alleged waiver by such party shall be effective for any purpose). No
such waiver shall reduce the rights or remedies of such party by reason of any
breach by the other party or parties of any of its or their obligations
hereunder.
SECTION10. BROKERS. Purchaser and Seller each represents and warrants to
the other that it has not dealt with any brokers or finders in connection with
the transactions set forth herein other than HREC Hospitality Real Estate
Counselors and The Greenwich Group (collectively, the "Broker"); and each
party shall indemnify and hold the other party harmless from all claims and
expenses resulting from its breach of the foregoing representation and
warranty. Seller shall be responsible for and pay at Closing any fees,
commissions or other amounts due the Broker in connection with the
transactions set forth herein.
SECTION11. SURVIVAL; FURTHER INSTRUMENTS. Except as set forth herein, all
warranties, representations, covenants, obligations and agreements contained
in or made pursuant to this Agreement shall survive the Closing hereunder and
the transfers and conveyances and other transactions hereunder or contemplated
hereby and any and all performances hereunder. All warranties and
representations shall be effective regardless of any investigation made or
which could have been made. Each party will, whenever and as often as it shall
be requested so to do by
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the other, cause to be executed, acknowledged or delivered any and all such
further instruments and documents as may be necessary or proper, in the
reasonable opinion of the requesting party, in order to carry out the intent
and purpose of this Agreement and as is consistent with this Agreement.
SECTION12. NO THIRD PARTY BENEFITS. This Agreement is made for the sole
benefit of Purchaser and Seller and their respective successors and assigns
(subject to the limitation on assignment set forth in Section 14 below), and
no other person or persons shall have any right or remedy or other legal
interest of any kind under or by reason of this Agreement. Whether or not
either party hereto elects to employ any or all the rights, powers or remedies
available to it hereunder, such party shall have no obligation or liability of
any kind to any third party by reason of this Agreement or by reason of any of
such party's actions or omissions pursuant hereto or otherwise in connection
with this Agreement or the transactions contemplated hereby.
SECTION13. REMEDIES. If Seller shall default hereunder prior to Closing,
Purchaser shall be entitled to xxx for specific performance of this Agreement
in addition to any other rights and remedies it may have at law or equity. If
Purchaser shall default hereunder, Seller's sole and exclusive remedy shall be
to collect the Xxxxxxx Money as liquidated damages, Seller hereby waiving all
other claims and remedies.
SECTION14. MISCELLANEOUS. This Agreement (including all Exhibits hereto)
contains the entire agreement between the parties respecting the matters
herein set forth and supersedes all prior agreements between the parties
hereto respecting such matters; provided, however, the parties shall have two
(2) weeks after execution of this Agreement to agree on any Exhibits hereto
which are not attached at the time this Agreement is executed. If the parties
cannot agree on such Exhibits within such two (2) week period, this Agreement
shall be null and void and the Xxxxxxx Money shall be returned to Purchaser.
The section headings shall not be used in construing this Agreement. Except as
otherwise provided above, no remedy conferred upon a party in this Agreement
is intended to be exclusive of any other remedy herein or by law provided or
permitted, but each shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity
or by statute. Except as herein expressly provided, no waiver by a party of
any breach of this Agreement or of any warranty or representation hereunder by
the other party shall be deemed to be a waiver of any other breach by such
other party (whether preceding or succeeding and whether or not of the same or
similar nature) and no acceptance of payment or performance by a party after
any breach by the other party shall be deemed to be a waiver of any breach of
this Agreement or of any representation or warranty hereunder by such other
party whether or not the first party knows of such breach at the time it
accepts such payment or performance. No failure or delay by a party to
exercise any right it may have by reason of the default of the other party
shall operate as a waiver of default or modification of this Agreement or
shall prevent the exercise of any right by the first party while the other
party continues to be so in default. This Agreement shall be construed and
enforced in accordance with the laws of the state where the Project is
located. Purchaser may assign its rights under this Agreement without the
prior written consent of Seller (in which event the transferee shall assume in
writing all of the transferor's obligations hereunder). Subject to the
preceding sentence, this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns.
The provisions of this Agreement may not be amended, changed or modified
orally, but only by an agreement in writing signed by the party against whom
any amendment, change or modification is sought.
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SECTION15. NOTICES. All notices and other communications which either
party is required or desires to send to the other shall be in writing and
shall be sent by messenger, facsimile, reputable overnight courier or
registered or certified mail, postage prepaid, return receipt requested.
Notices and other communications shall be deemed to have been given on the
date of actual receipt. If a notice is sent by facsimile, a copy of the notice
shall be sent by one of the other methods specified above. Notices shall be
addressed as follows:
(a) Lansdowne Resort Limited Partnership
%Lansdowne Resort Corp, General Partner
Attn. Xx. Xxxx X. Xxxxx, President,
000 Xxxxxx Xx., Xxxxx 000
Xxxxxxxxxx, XX 00000;
Phone (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxxxxxx, Attorney at Law
000 Xxxxxx Xx., Xxxxx 000
Xxxxxxxxxx, XX 00000;
Phone (000) 000-0000
Facsimile No.: (000) 000-0000
(b) To Purchaser:
c/o LaSalle Hotel Properties
0000 Xxxxxxxxxx Xxxx
Xxxxx X00
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Phone (000) 000-0000
Facsimile No. (000) 000-0000
with a copy to:
Xxxxx & Associates
000 Xxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: X. X. Xxxxx
Phone (000) 000-0000
Facsimile No. (000) 000-0000
or to such other person and/or address as shall be specified by either party
in a notice given to the other pursuant to the provisions of this Paragraph.
SECTION 16. ATTORNEYS' FEES. In the event either party institutes legal
proceedings to enforce its rights hereunder, the prevailing party in such
litigation shall be paid all reasonable expenses of the litigation by the
losing party, including its attorneys' fees.
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SECTION 17. CONFIDENTIALITY. Except for any disclosures required by law
or the Securities and Exchange Commission, including, without limitation,
Regulation FD, Seller and Purchaser agree to keep this Agreement and all
information delivered pursuant hereto confidential and not disclose or make
any public announcements with respect to the subject matter hereof without the
consent of the other party.; provided, however, either party may make
disclosures to the Operator, governmental agencies and its advisors, lenders
and investors to the extent reasonably necessary to consummate the
transactions set forth herein.
SECTION 18. AUDITED FINANCIAL STATEMENTS. Within thirty (30) days after
the Closing, Seller shall cause to be delivered to Purchaser audited financial
statements for the Project covering the period from January 1, 2001, through
the Closing from one of the so-called "Big 4" accounting firms, together with
a consent from the accounting firm for the use of such financial statements in
Purchaser's SEC Form 305 filing. Seller shall be liable for the cost of such
financial statements except that Purchaser shall be responsible for any
additional costs required to put such financial statements in a form which can
be used with SEC Form 305.
SECTION 19. LIKE KIND EXCHANGE. Seller agrees to reasonably cooperate
with Purchaser in effecting an exchange transaction by Purchaser which
includes the Project pursuant to Section 1031 of the United States Internal
Revenue Code, provided that any exchange initiated by Purchaser shall be at
Purchaser's sole cost and expense and shall not delay the Closing.
SECTION 20. HOLDBACK. Seller shall retain a liquid net worth of at least
$3,000,000 for the period commencing on the Closing and ending one (1) year
after the Closing, which liquid net worth can be used to satisfy Seller's
obligations hereunder after the Closing; and, if Purchaser makes a claim for
breach of Seller's obligations hereunder during such period, Seller shall
continue to maintain a liquid net worth at least equal to such claim, up to a
maximum amount of $3,000,000, until such claim has been finally resolved.
Seller's obligations under this Section shall be reduced by (a) the difference
between any funds held by the Mortgagee in the Debt Service Reserve and the
amount of the prepayment penalty under the First Mortgage or (b) any funds
deposited in escrow with the Title Company pursuant to Section 2(A)(1) above.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
LANSDOWNE RESORT LIMITED PARTNERSHIP, an
Illinois limited partnership
By: Lansdowne Resort Corp., an Illinois
corporation, its general partner
By: /s/ Xxxx Xxxxx
-------------------------------------
Title: President
----------------------------------
LHO NEW ORLEANS LM, L.P.,
a Delaware limited partnership
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By: LHO New Orleans Financing, Inc., a
Delaware corporation, its general
partner
By: /s/ Xxxx XxXxxxxx
--------------------------------
Title: Vice President
------------------------------
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EXHIBITS
Exhibit A - Legal Description
Exhibit B - Personal Property
Exhibit C - 12 Acre Parcel
Exhibit D - 2-3 Acre Parcel
Exhibit E - Service and Supply Contracts
Exhibit F - Equipment Leases
Exhibit G - Tenant Leases
Exhibit H - Labor Contracts
Exhibit I - Existing Bookings
Exhibit J - Loan Documents
Exhibit K - Development Contracts
Exhibit L - Operator's Estoppel Certificate
Exhibit M - Xxxx of Sale and Assignment
Exhibit N - Assignment of Service and Supply Contracts and Development
Contracts
Exhibit O - Assignment of Tenant Leases
Exhibit P - Assignment of Equipment Leases
Exhibit Q - Tenant Estoppel Certificate
Exhibit R - Assignment of 12 Acre Contract
Exhibit S - Assignment of 2-3 Acre Contract
Exhibit T- Development Budget
Exhibit U - Golf Membership Documents
EXHIBIT L
ESTOPPEL CERTIFICATE
--------------------
To:
--------------------------------
--------------------------------
--------------------------------
Attention: -------------------------
Property Address:
---------------------------------
---------------------------------
(the "Property")
The undersigned (the "Operator") hereby certifies to you as follows:
(1) Operator is a the operator under a certain management agreement (the
"Management Agreement"), dated ________________, 19__, for the Property; the
Management Agreement has not been canceled, modified, assigned, extended or
amended except as follows:
________________________.
(2) All payments due under the Management Agreement have been paid
through the date hereof, and there have been no prepayments under the
Management Agreement.
(3) The Management Agreement terminates on _________, and Operator has no
renewal options. _______________.
(4) To Operator's knowledge: (a) the Management Agreement is in full
force and effect; (b) the Management Agreement is free from default and free
from any event which could become a default under the Management Agreement;
(c) Operator has no outstanding claims against the owner under the Management
Agreement, and (d) there are no outstanding disputes under the Management
Agreement.
The undersigned has executed this Estoppel Certificate with the knowledge
and understanding that you, or one of your affiliates, is acquiring the
Property in reliance on this Estoppel Certificate and that the undersigned
will be bound by this Estoppel Certificate. The statements contained herein
may be relied upon by you and your affiliates, and any mortgagee of the
Property and their successors and assigns.
Dated this ______ day of _____________, 20___.
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By:
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Title:
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EXHIBIT M
XXXX OF SALE AND ASSIGNMENT
---------------------------
For valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, __________________________________,
a ___________________________ (hereinafter called "Seller"), hereby assigns,
conveys and transfers to ________________________, a _____________________
("Purchaser"), all of the Personal Property (as defined in that certain
Purchase and Sale Agreement, dated ___________________, 20____, between
Purchaser and Seller for the _________ Hotel in ___________, _____________).
TO HAVE AND TO HOLD the Personal Property unto Purchaser, its successors
and assigns. Seller, for itself, its successors and assigns, does hereby
warrant and will forever defend title to the Personal Property unto Purchaser,
its successors and assigns, against the lawful claims of all persons, claiming
by, through or under Seller, but not otherwise.
IN WITNESS WHEREOF, Seller has caused this instrument to be executed as of the
____ day of ___________, 20___.
, a
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By:
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Title:
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EXHIBIT N
ASSIGNMENT OF SERVICE AND SUPPLY CONTRACTS AND DEVELOPMENT CONTRACTS
--------------------------------------------------------------------
THIS ASSIGNMENT dated _____________, 20____ (the "Assignment"), is
entered into by and between ________________________________, a
____________________ (hereinafter called "Assignor"), and
_______________________, a __________________________ ("Assignee").
WITNESSETH:
WHEREAS, Assignor is a party to those certain service and supply
contracts set forth in Exhibit A attached hereto (the "Service and Supply
Contracts") with respect to that certain real property located at in , (the
"Property"); and
WHEREAS, Assignor is a party to those certain development contracts set
forth in Exhibit B attached hereto (the "Development Contracts") with respect
to the Property; and
WHEREAS, Assignor desires to assign its interest in the Service and
Supply Contracts and the Development Contracts to Assignee, and Assignee
desires to accept the assignment thereof and assume the obligations of
Assignor thereunder;
NOW, THEREFORE, in consideration of the promises and conditions contained
herein, the parties hereby agree as follows:
1. Effective as of the date hereof, Assignor hereby assigns to Assignee
all of its right, title and interest in and to the Service and Supply
Contracts and the Development Contracts; provided, however, Assignor shall
remain liable for and shall pay, perform and discharge any obligations
accruing under the Service and Supply Contracts and the Development Contracts
prior to the date hereof except to the extent Assignor has given Assignee a
credit for such obligations.
2. Assignee hereby assumes and shall pay, perform and discharge all of
the Assignor's obligations under the Service and Supply Contracts and the
Development Contracts accruing on or after the date hereof and, to the extent
Assignor has given Assignee a credit therefor, any such obligations under the
Service and Supply Contracts and the Development Contracts accruing prior to
the date hereof.
3. Assignor hereby agrees to indemnify, protect, defend and hold harmless
Assignee from and against any and all claims, demands, liabilities, losses,
costs, damages or expenses (including, without limitation, reasonable
attorneys' fees and costs) arising out of or resulting from any breach or
default by Assignor under the terms of the Service and Supply Contracts and
the Development Contracts arising prior to the date hereof. Assignee hereby
agrees to indemnify, protect, defend and hold Assignor harmless from and
against any and all claims, demands, liabilities, losses, costs, damages or
expenses (including, without limitation, reasonable attorneys' fees and costs)
arising out of or resulting from any breach or default by Assignee under the
terms of the Service and Supply Contracts and the Development Contracts
arising on or after the date hereof
4. This Assignment shall be binding on and inure to the benefit of the
parties hereto, their heirs, executors, administrators, successors in interest
and assigns.
5. This Assignment may be executed in counterparts, each of which shall
be deemed to be an original and all of which shall be deemed to be one and the
same instrument.
IN WITNESS WHEREOF, the Assignor and Assignee have executed this
Assignment the day and year first above written.
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By:
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Title:
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By:
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Title:
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EXHIBIT O
ASSIGNMENT OF TENANT LEASES
---------------------------
THIS ASSIGNMENT dated _____________, 20____ (the "Assignment"), is
entered into by and between ________________________________, a
__________________________ (hereinafter called "Assignor"), and
____________________________, a _____________________________ ("Assignee").
WITNESSETH:
WHEREAS, Assignor is the landlord under those certain tenant leases set
forth in Exhibit A attached hereto (the "Tenant Leases") with respect to that
certain real property located at ________________________ in
__________________________, _______________________; and
WHEREAS, Assignor desires to assign its interest in the Tenant Leases to
Assignee, and Assignee desires to accept the assignment thereof and assume the
obligations of Assignor thereunder;
NOW, THEREFORE, in consideration of the promises and conditions contained
herein, the parties hereby agree as follows:
1. Effective as of the date hereof, Assignor hereby assigns to Assignee
all of its right, title and interest in and to the Tenant Leases; provided,
however, Assignor shall remain liable for and shall pay, perform and discharge
any obligations accruing under the Tenant Leases prior to the date hereof
except to the extent Assignor has given Assignee a credit for such
obligations.
2. Assignee hereby assumes and shall pay, perform and discharge all of
the Assignor's obligations under the Tenant Leases accruing on or after the
date hereof (including, but not limited to the obligation, on or subsequent to
the date hereof, to return any security deposits under the Tenant Leases) and,
to the extent Assignor has given Assignee a credit therefor, any such
obligations under the Tenant Leases accruing prior to the date hereof.
3. Assignor hereby agrees to indemnify, protect, defend and hold harmless
Assignee from and against any and all claims, demands, liabilities, losses,
costs, damages or expenses (including, without limitation, reasonable
attorneys' fees and costs) arising out of or resulting from any breach or
default by Assignor under the terms of the Tenant Leases arising prior to the
date hereof. Assignee hereby agrees to indemnify, protect, defend and hold
Assignor harmless from and against any and all claims, demands, liabilities,
losses, costs, damages or expenses (including, without limitation, reasonable
attorneys' fees and costs) arising out of or resulting from any breach or
default by Assignee under the terms of the Tenant Leases arising on or after
the date hereof
4. This Assignment shall be binding on and inure to the benefit of the
parties hereto, their heirs, executors, administrators, successors in interest
and assigns.
5. This Assignment may be executed in counterparts, each of which shall
be deemed to be an original and all of which shall be deemed to be one and the
same instrument.
IN WITNESS WHEREOF, the Assignor and Assignee have executed this
Assignment the day and year first above written.
, a
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By:
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Title:
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Title:
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EXHIBIT P
ASSIGNMENT OF EQUIPMENT LEASES
------------------------------
THIS ASSIGNMENT dated ______________, 20___ (the "Assignment"), is
entered into by and between ____________________________, a
________________________ (hereinafter called "Assignor"), and
_________________________, a ___________________________ ("Assignee").
WITNESSETH:
WHEREAS, Assignor is the lessee under those certain equipment leases set
forth in Exhibit A attached hereto (the "Equipment Leases") with respect to
that certain real property located at in , ; and
WHEREAS, Assignor desires to assign its interest in the Equipment Leases
to Assignee, and Assignee desires to accept the assignment thereof and assume
the obligations of Assignor thereunder;
NOW, THEREFORE, in consideration of the promises and conditions contained
herein, the parties hereby agree as follows:
1. Effective as of the date hereof, Assignor hereby assigns to Assignee
all of its right, title and interest in and to the Equipment Leases; provided,
however, Assignor shall remain liable for and shall pay, perform and discharge
any obligations accruing under the Equipment Leases prior to the date hereof
except to the extent Assignor has given Assignee a credit for such
obligations.
2. Assignee hereby assumes and shall pay, perform and discharge all of
the Assignor's obligations under the Equipment Leases accruing on or after the
date hereof and, to the extent Assignor has given Assignee a credit therefor,
any such obligations under the Equipment Leases accruing prior to the date
hereof.
3. Assignor hereby agrees to indemnify, protect, defend and hold harmless
Assignee from and against any and all claims, demands, liabilities, losses,
costs, damages or expenses (including, without limitation, reasonable
attorneys' fees and costs) arising out of or resulting from any breach or
default by Assignor under the terms of the Equipment Leases arising prior to
the date hereof. Assignee hereby agrees to indemnify, protect, defend and hold
Assignor harmless from and against any and all claims, demands, liabilities,
losses, costs, damages or expenses (including, without limitation, reasonable
attorneys' fees and costs) arising out of or resulting from any breach or
default by Assignee under the terms of the Equipment Leases arising on or
after the date hereof
4. This Assignment shall be binding on and inure to the benefit of the
parties hereto, their heirs, executors, administrators, successors in interest
and assigns.
5. This Assignment may be executed in counterparts, each of which shall
be deemed to be an original and all of which shall be deemed to be one and the
same instrument.
IN WITNESS WHEREOF, the Assignor and Assignee have executed this
Assignment the day and year first above written.
, a
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By:
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Title:
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Title:
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EXHIBIT Q
TENANT ESTOPPEL CERTIFICATE
---------------------------
To:
--------------------------------
--------------------------------
--------------------------------
Attention:
---------------------
Property Address:
---------------------------------
---------------------------------
(the "Property")
Premises at Property: ____________________________________(the "Premises")
The undersigned tenant (the "Tenant") hereby certifies to you as follows:
(1) Tenant is a tenant at the Property under a lease (the "Lease") dated
________________, 19__, for the Premises; the Lease has not been canceled,
modified, assigned, extended or amended except as follows:
__________________________.
(2) All base rent, rent escalations and additional rent under the Lease
has been paid through ______________, 19___. There is no prepaid rent, except
for the current month, and the amount of security deposit is $________.
(3) Base rent is currently payable in the amount of $___________ per
month, and Tenant is currently making estimated payments for operating
expenses and taxes in the amount of $__________ per month.
(4) The Lease terminates on _________, and Tenant has the following
renewal option(s)_______________________________.
(5) To Tenant's knowledge: (a) the Lease is in full force and effect; (b)
the Lease is free from default and free from any event which could become a
default under the Lease; and (c) Tenant has no claims against the landlord or
offsets or defenses against rent.
(6) The Tenant has received no notice of prior sale, transfer or
assignment, hypothecation or pledge of the Lease or of the rents payable
thereunder, except
________________________________________________.
(7) The Tenant has full possession of the Premises, has not assigned the
Lease or sublet any part of the Premises and does not hold the Premises under
an assignment or sublease, except:
______________________________.
(8) The Tenant has no rights or options to purchase the Property.
(9) The Tenant is not insolvent or bankrupt and is not contemplating
seeking relief under any insolvency or bankruptcy statutes.
The undersigned has executed this Estoppel Certificate with the knowledge
and understanding that you, or one of your affiliates, is acquiring the
Property in reliance on this Estoppel Certificate and that the undersigned
will be bound by this Estoppel Certificate. The statements contained herein
may be relied upon by you and your affiliates, and any mortgagee of the
Property and their successors and assigns.
Dated this ______ day of _____________, 20___.
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By:
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Title:
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EXHIBIT R
ASSIGNMENT OF 12 ACRE CONTRACT
------------------------------
THIS ASSIGNMENT dated __________________, 20____ (the "Assignment"), is
entered into by and between ______________________________, a
________________________ (hereinafter called "Assignor"), and
_______________________ , a ______________________ ("Assignee").
WITNESSETH:
-----------
WHEREAS, Assignor is the Seller under a certain Real Estate Sales
Contract, dated as of ___________________, 20_____, by and between Seller and
_______________ for certain real property described in Exhibit A attached
hereto (the "12 Acre Contract"); and
WHEREAS, Assignor desires to assign its interest in the 12 Acre Contract
to Assignee, and Assignee desires to accept the assignment thereof and assume
the obligations of Assignor thereunder;
NOW, THEREFORE, in consideration of the promises and conditions contained
herein, the parties hereby agree as follows:
1. Effective as of the date hereof, Assignor hereby assigns to Assignee
all of its right, title and interest in and to the 12 Acre Contract; provided,
however, Assignor shall remain liable for and shall pay, perform and discharge
any obligations accruing under the 12 Acre Contract prior to the date hereof;
and, provided further, the foregoing assignment shall not be deemed to affect
or negate Assignor's rights to certain payments from Assignee with respect to
the 12 Acre Contract as set forth in that certain Purchase and Sale Agreement
between Assignor and Assignee for the Lansdowne Resort in Leesburg, Virginia.
2. Assignee hereby assumes and shall pay, perform and discharge all of
the Assignor's obligations under the 12 Acre Contract accruing on or after the
date hereof.
3. Assignor hereby agrees to indemnify, protect, defend and hold harmless
Assignee from and against any and all claims, demands, liabilities, losses,
costs, damages or expenses (including, without limitation, reasonable
attorneys' fees and costs) arising out of or resulting from any breach or
default by Assignor under the terms of the 12 Acre Contract arising prior to
the date hereof. Assignee hereby agrees to indemnify, protect, defend and hold
Assignor harmless from and against any and all claims, demands, liabilities,
losses, costs, damages or expenses (including, without limitation, reasonable
attorneys' fees and costs) arising out of or resulting from any breach or
default by Assignee under the terms of the 12 Acre Contract arising on or
after the date hereof
4. This Assignment shall be binding on and inure to the benefit of the
parties hereto, their heirs, executors, administrators, successors in interest
and assigns.
5. This Assignment may be executed in counterparts, each of which shall
be deemed to be an original and all of which shall be deemed to be one and the
same instrument.
IN WITNESS WHEREOF, the Assignor and Assignee have executed this
Assignment the day and year first above written.
, a
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Title:
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Title:
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EXHIBIT S
ASSIGNMENT OF 2-3 ACRE CONTRACT
-------------------------------
THIS ASSIGNMENT dated __________________, 20____ (the "Assignment"), is
entered into by and between ______________________________, a
________________________ (hereinafter called "Assignor"), and
_______________________ , a ______________________ ("Assignee").
WITNESSETH:
-----------
WHEREAS, Assignor is the Seller under a certain Real Estate Sales
Contract, dated as of , 20 , by and between Seller and for certain real
property described in Exhibit A attached hereto (the "2-3 Acre Contract"); and
WHEREAS, Assignor desires to assign its interest in the 2-3 Acre Contract
to Assignee, and Assignee desires to accept the assignment thereof and assume
the obligations of Assignor thereunder;
NOW, THEREFORE, in consideration of the promises and conditions contained
herein, the parties hereby agree as follows:
1. Effective as of the date hereof, Assignor hereby assigns to Assignee
all of its right, title and interest in and to the 2-3 Acre Contract;
provided, however, Assignor shall remain liable for and shall pay, perform and
discharge any obligations accruing under the 2-3 Acre Contract prior to the
date hereof; and, provided further, the foregoing assignment shall not be
deemed to affect or negate Assignor's rights to certain payments from Assignee
with respect to the 2-3 Acre Contract as set forth in that certain Purchase
and Sale Agreement between Assignor and Assignee for the Lansdowne Resort in
Leesburg, Virginia.
2. Assignee hereby assumes and shall pay, perform and discharge all of
the Assignor's obligations under the 2-3 Acre Contract accruing on or after
the date hereof.
3. Assignor hereby agrees to indemnify, protect, defend and hold harmless
Assignee from and against any and all claims, demands, liabilities, losses,
costs, damages or expenses (including, without limitation, reasonable
attorneys' fees and costs) arising out of or resulting from any breach or
default by Assignor under the terms of the 2-3 Acre Contract arising prior to
the date hereof. Assignee hereby agrees to indemnify, protect, defend and hold
Assignor harmless from and against any and all claims, demands, liabilities,
losses, costs, damages or expenses (including, without limitation, reasonable
attorneys' fees and costs) arising out of or resulting from any breach or
default by Assignee under the terms of the 2-3 Acre Contract arising on or
after the date hereof
4. This Assignment shall be binding on and inure to the benefit of the
parties hereto, their heirs, executors, administrators, successors in interest
and assigns.
5. This Assignment may be executed in counterparts, each of which shall
be deemed to be an original and all of which shall be deemed to be one and the
same instrument.
IN WITNESS WHEREOF, the Assignor and Assignee have executed this
Assignment the day and year first above written.
, a
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Title:
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Title:
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