Exhibit 10.1
Form of Escrow Agreement between CNL Hospitality Properties, Inc.
and SouthTrust Bank
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement") is dated this ____ day of
___________, 2003, by and among CNL HOSPITALITY PROPERTIES, INC., a Maryland
corporation (the "Company"), CNL SECURITIES CORP., a Florida corporation (the
"Managing Dealer"), and SOUTHTRUST BANK (the "Escrow Agent"). This Agreement
shall be effective as of the effective date of the Company's Registration
Statement filed with the Securities and Exchange Commission (the "Effective
Date").
WHEREAS, the Company proposes to offer and sell, on a best-efforts
basis through the Managing Dealer and selected broker-dealers registered with
the National Association of Securities Dealers, Inc. (the Managing Dealer and
such selected broker-dealers are hereinafter referred to collectively as the
"Soliciting Dealers") up to 175,000,000 shares of common stock of the Company
(the "Shares") to investors at $10.00 per Share pursuant to a registration
statement (the "Registration Statement") filed with the Securities and Exchange
Commission; and
WHEREAS, the Company and the Managing Dealer desire to establish an
escrow in which funds received from subscribers will be deposited and the Escrow
Agent is willing to serve as Escrow Agent upon the terms and conditions herein
set forth;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, the parties covenant and agree as follows.
1. Establishment of Escrow Accounts. On or prior to the Effective
Date, the Company and the Managing Dealer shall establish an interest-bearing
escrow account with the Escrow Agent, which escrow account shall be entitled
"ESCROW ACCOUNT FOR THE BENEFIT OF SUBSCRIBERS FOR COMMON STOCK OF CNL
HOSPITALITY PROPERTIES, INC." (the "Escrow Account"). All monies deposited in
the Escrow Account are hereinafter referred to as the "Escrowed Funds." The
Managing Dealer will, and will cause selected broker-dealers acting as
Soliciting Dealers to, instruct subscribers to make checks for subscriptions
payable to either the Escrow Agent or the Company. The Managing Dealer may
authorize certain Soliciting Dealers which are "$250,000 broker-dealers" to
instruct their customers to make their checks for Shares subscribed for payable
directly to the Soliciting Dealer. In such case, the Soliciting Dealer will
collect the proceeds of the subscribers' checks and issue a check made payable
to the order of the Escrow Agent for the aggregate amount of the subscription
proceeds.
2. Deposits into the Escrow Account. The Managing Dealer will
promptly deliver all monies received from subscribers for the payment of Shares
to the Escrow Agent for deposit in the Escrow Account.
3. Collection Procedure.
(a) The Escrow Agent is hereby authorized to forward each check
for collection and, upon collection of the proceeds of each check, to
deposit the collected proceeds in the Escrow Account or, alternatively,
the Escrow Agent may telephone the bank on which the check is drawn to
confirm that the check has been paid.
(b) Any check returned unpaid to the Escrow Agent shall be
returned to the Soliciting Dealer that submitted the check. In such
cases the Escrow Agent will promptly notify the Company of such return.
(c) In the event that (i) the Company rejects any subscription
for Shares or (ii) an investor who has telephonically or orally
subscribed for Shares properly withdraws such subscription within
fifteen (15) days from the date written confirmation has been mailed to
the subscriber, and, in either such event, the Escrow Agent has already
collected funds for such subscription, the Escrow Agent shall promptly
issue a refund check to the drawer of the check submitted by or on
behalf of the rejected or withdrawing subscriber. If either of the
events specified in the clauses (i) or (ii) of the preceding sentence
occur and, in either such event, the Escrow Agent has not yet collected
funds for such subscription but has submitted the check relating to
such subscription for collection, the Escrow Agent shall promptly issue
a check in the amount of such check to the rejected or withdrawing
subscriber after the Escrow Agent has cleared such funds. If the Escrow
Agent has not yet submitted the check relating to the subscription of
the rejected or withdrawing subscriber, the Escrow Agent shall promptly
remit such check directly to the drawer of the check submitted by or on
behalf of the subscriber.
4. Investment of Escrowed Funds. The Escrow Agent, immediately upon
receipt of each check remitted to it, shall deposit such check in a bank account
(including, but not limited to, interest-bearing savings accounts and bank money
market accounts), in short-term certificates of deposit issued by a bank, in
short-term securities directly or indirectly issued or guaranteed by the United
States Government, or in other short-term highly liquid investments with
appropriate safety of principal, all as directed by the Company. Interest and
dividends earned on such investments shall be similarly reinvested.
5. Distribution of Escrowed Funds. The Escrow Agent shall release
from the Escrow Account to the Company any and all Escrowed Funds therein,
together with all interest earned thereon, upon written request of an officer of
the Company.
6. Liability of Escrow Agent.
(a) In performing any of its duties under this Agreement, or upon
the claimed failure to perform its duties hereunder, the Escrow Agent
shall not be liable to anyone for any damages, losses, or expenses
which it may incur as a result of the Escrow Agent so acting, or
failing to act; provided, however, the Escrow Agent shall be liable for
damages arising out of its willful default or misconduct or its gross
negligence under this Agreement. Accordingly, the Escrow Agent shall
not incur any such liability with respect to (i) any action taken or
omitted to be taken in good faith upon advice of its counsel or counsel
for the Company which is given with respect to any questions relating
to the duties and responsibilities of the Escrow Agent hereunder, or
(ii) any action taken or omitted to be taken in reliance upon any
document, including any written notice or instructions provided for in
this Escrow Agreement, not only as to its due execution and to the
validity and effectiveness of its provisions but also as to the truth
and accuracy of any information contained therein, if the Escrow Agent
shall in good faith believe such document to be genuine, to have been
signed or presented by a proper person or persons, and to conform with
the provisions of this Agreement.
(b) The Company hereby agrees to indemnify and hold harmless the
Escrow Agent against any and all losses, claims, damages, liabilities
and expenses, including, without limitation, reasonable costs of
investigation and counsel fees and disbursements which may be incurred
by it resulting from any act or omission of the Company; provided,
however, that the Company shall not indemnify the Escrow Agent for any
losses, claims, damages, or expenses arising out of the Escrow Agent's
willful default, misconduct, or gross negligence under this Agreement.
(c) If a dispute ensues between any of the parties hereto which,
in the opinion of the Escrow Agent, is sufficient to justify its doing
so, the Escrow Agent shall be entitled to tender into the registry or
custody of any court of competent jurisdiction, including the Circuit
Court of Orange County, Florida, all money or property in its hands
under the terms of this Agreement, and to file such legal proceedings
as it deems appropriate, and shall thereupon be discharged from all
further duties under this Agreement. Any such legal action may be
brought in any such court as the Escrow Agent shall determine to have
jurisdiction thereof. The Company shall indemnify the Escrow Agent
against its court costs and attorneys' fees incurred in filing such
legal proceedings.
7. Inability to Deliver. In the event that checks for subscriptions
delivered to the Escrow Agent by the Company pursuant to this Agreement are not
cleared through normal banking channels within 120 days after such delivery, the
Escrow Agent shall deliver such uncleared checks to the Company.
8. Notice. All notices, requests, demands and other communications
or deliveries required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given if delivered personally, given by
prepaid telegram or deposited for mailing, first class, postage prepaid,
registered or certified mail, as follows:
If to the subscribers for Shares: To their respective
addresses as specified in
their Subscription
Agreements.
If to the Company: CNL Hospitality Properties, Inc.
CNL Center at City Commons
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx, Xx.,
Chairman of the Board
If to the Managing Dealer: CNL Securities Corp.
CNL Center at City Commons
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx, President
If to the Escrow Agent: SOUTHTRUST BANK
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxxx Xxxxxxx
9. Fees to Escrow Agent. In consideration of the services to be
provided by the Escrow Agent hereunder, the Company will pay the Escrow Agent a
fee for its services hereunder (the "Escrow Fee"). The Escrow Fee shall be $350
for each month or any portion thereof that the Escrow Account continues for the
Company. Payments by the Company, if any, shall be due and payable no less
frequently than six-month intervals while the escrow continues for the Company.
In no event shall the total Escrow Fees payable by the Company pursuant to this
Agreement be less than $2,100, nor more than $4,200, for any 12-month period.
Notwithstanding anything contained in this Agreement to the contrary, in no
event shall any fee, reimbursement for costs and expenses, indemnification for
any damages incurred by the Escrow Agent, or monies whatsoever be paid out of or
chargeable to the Escrowed Funds in the Escrow Account.
10. General.
(a) This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Florida.
(b) The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
(c) This Agreement sets forth the entire agreement and
understanding of the parties with regard to this escrow transaction and
supersedes all prior agreements, arrangements and understandings
relating to the subject matter hereof.
(d) This Agreement may be amended, modified, superseded or
cancelled, and any of the terms or conditions hereof may be waived,
only by a written instrument executed by each party hereto or, in the
case of a waiver, by the party waiving compliance. The failure of any
party at any time or times to require performance of any provision
hereof shall in no manner affect the right at a later time to enforce
the same. No waiver in any one or more instances by any party of any
condition, or of the breach of any term contained in this Agreement,
whether by conduct or otherwise, shall be deemed to be, or construed
as, a further or continuing waiver of any such condition or breach, or
a waiver of any other condition or of the breach of any other terms of
this Agreement.
(e) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(f) This Agreement shall inure to the benefit of the parties
hereto and their respective administrators, successors, and assigns.
11. Representation of the Company. The Company hereby acknowledges
that the status of the Escrow Agent with respect to the offering of the Shares
is that of agent only for the limited purposes herein set forth, and hereby
agrees it will not represent or imply that the Escrow Agent, by serving as the
Escrow Agent hereunder or otherwise, has investigated the desirability or
advisability of an investment in the Shares, or has approved, endorsed or passed
upon the merits of the Shares, nor shall the Company use the name of the Escrow
Agent in any manner whatsoever in connection with the offer or sale of the
Shares, other than by acknowledgement that it has agreed to serve as Escrow
Agent for the limited purposes herein set forth.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
"Company"
CNL HOSPITALITY PROPERTIES, INC.
By: __________________________________
XXXXX X. XXXXXX, XX.,
Chairman of the Board
"MANAGING DEALER"
CNL SECURITIES CORP.
Attest: By: ___________________________________
-------------- XXXXXX X. XXXXXX, President
"ESCROW AGENT"
SOUTHTRUST BANK
Attest: By: ___________________________________
-------------- Name: ___________________________________
Title: ___________________________________
