Exhibit 10.22
HOTEL PURCHASE AND SALE AGREEMENT
HOTEL 71
CHICAGO, ILLINOIS
BY AND BETWEEN
BOYKIN CHICAGO L.L.C., A DELAWARE LIMITED LIABILITY COMPANY
AS SELLER
AND
THE FALOR COMPANIES, INC., AN ILLINOIS CORPORATION
AS PURCHASER
HOTEL PURCHASE AND SALE AGREEMENT
Table of Contents
Article Page No.
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ARTICLE I DEFINITIONS AND REFERENCES................................. 1
1.01 DEFINITIONS............................................... 1
1.02 REFERENCES................................................ 6
ARTICLE II SALE AND PURCHASE; "AS-IS" SALE........................... 6
2.01 SALE AND PURCHASE......................................... 6
2.02 PROPERTY SOLD "AS IS"..................................... 9
2.03 LIMITS OF ASSUMPTIONS AND ASSIGNMENTS..................... 11
ARTICLE III PURCHASE PRICE and DEPOSIT............................... 12
3.01 PURCHASE PRICE............................................ 12
3.02 ALLOCATION OF PURCHASE PRICE.............................. 13
3.03 DEPOSIT ESCROW............................................ 13
ARTICLE IV INSPECTION PERIOD......................................... 13
4.01 INSPECTION PERIOD......................................... 13
4.02 REVIEW AND INSPECTION..................................... 13
4.03 TESTING................................................... 14
4.04 ACCEPTANCE OR REJECTION................................... 14
4.05 CONFIDENTIALITY........................................... 14
4.06 TITLE AND SURVEY.......................................... 15
4.07 RELEASE AND INDEMNIFICATION............................... 16
ARTICLE V REPRESENTATIONS AND WARRANTIES............................. 16
5.01 REPRESENTATIONS AND WARRANTIES OF SELLER.................. 16
5.02 REPRESENTATIONS AND WARRANTIES OF PURCHASER............... 23
5.03 BROKERAGE................................................. 24
5.04 DURATION OF REPRESENTATIONS AND WARRANTIES................ 24
5.05 SELLER'S INDEMNIFICATION.................................. 25
5.06 LIMITATION OF SELLER'S REPRESENTATIONS.................... 25
5.07 GUARANTY OR REPRESENTATIONS AND WARRANTIES................ 26
ARTICLE VI CLOSING AND CLOSING DELIVERIES............................ 26
6.01 CLOSING................................................... 26
6.02 ESCROW.................................................... 26
6.03 SELLER'S DELIVERIES....................................... 26
6.04 PURCHASER'S DELIVERIES.................................... 27
6.05 EXPENSES.................................................. 28
6.06 CONCURRENT TRANSACTIONS................................... 28
6.07 POSSESSION................................................ 29
6.08 RESTAURANT SPACE.......................................... 29
ARTICLE VII ADJUSTMENTS AND PRORATIONS-CLOSING STATEMENTS............ 30
7.01 ADJUSTMENTS AND PRORATIONS................................ 30
7.02 PAYMENT................................................... 32
7.03 CLOSING STATEMENTS........................................ 32
ARTICLE VIII CONDITIONS TO SELLER'S OBLIGATIONS...................... 33
8.01 CONDITIONS................................................ 33
8.02 FAILURE OF SELLER CLOSING CONDITION....................... 34
ARTICLE IX CONDITIONS TO PURCHASER'S OBLIGATIONS..................... 34
9.01 CONDITIONS................................................ 34
9.02 FAILURE OF PURCHASER CLOSING CONDITION.................... 34
ARTICLE X ACTIONS AND OPERATIONS PENDING CLOSING..................... 34
10.01 ACTIONS AND OPERATIONS PENDING CLOSING.................... 34
ARTICLE XI CASUALTIES AND TAKINGS.................................... 36
11.01 CASUALTIES................................................ 36
11.02 TAKINGS................................................... 36
ARTICLE XII ADDITIONAL COVENANTS..................................... 37
12.01 LIQUOR LICENSE; OTHER PERMITS; CONSENTS AND CLOSING
CONDITIONS............................................. 37
12.02 GUEST BAGGAGE............................................. 38
12.03 SAFE DEPOSITS............................................. 38
12.04 TAX APPEAL PROCEEDINGS.................................... 38
12.05 TERMINATION OF MANAGEMENT AGREEMENT....................... 39
ARTICLE XIII DEFAULTS AND REMEDIES................................... 39
13.01 SELLER'S REMEDIES......................................... 39
13.02 PURCHASER'S REMEDIES...................................... 39
ARTICLE XIV EMPLOYEES................................................ 39
ARTICLE XV MISCELLANEOUS............................................. 40
15.01 NOTICES................................................... 40
15.02 SURVIVAL.................................................. 41
15.03 CONSTRUCTION.............................................. 41
15.04 PUBLICITY................................................. 41
15.05 ASSIGNMENT................................................ 41
15.06 COUNTERPARTS; FACSIMILE EXECUTION; INTEGRATION............ 42
15.07 GOVERNING LAW; JURISDICTION AND VENUE..................... 42
15.08 FURTHER ASSURANCES........................................ 43
15.09 CONFIDENTIALITY........................................... 43
15.10 ATTORNEYS' FEES........................................... 43
15.11 PREVAILING PARTY.......................................... 43
15.12 DELIVERY OF DRAFTS NOT AN OFFER........................... 44
15.13 SEVERABILITY.............................................. 44
ARTICLE XVI GENERAL ESCROW PROVISIONS................................ 44
16.01 GENERAL ESCROW PROVISIONS................................. 44
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HOTEL PURCHASE AND SALE AGREEMENT
THIS HOTEL PURCHASE AND SALE AGREEMENT (this "AGREEMENT") is made this 5th
day of November, 2004, by and between Boykin Chicago L.L.C., a Delaware limited
liability company ("SELLER"), and The Falor Companies, Inc., an Illinois
corporation ("PURCHASER").
RECITALS:
A. Seller is the owner of the hotel and related facilities known as the
Hotel 71 located at 71 East Wacker Drive, Chicago, Illinois.
B. Seller desires to sell, and Purchaser desires to purchase, such hotel
property and related facilities upon and subject to the terms and conditions set
forth in this Agreement.
AGREEMENTS:
NOW, THEREFORE, in consideration of the representations, warranties,
agreements, covenants, and conditions contained in this Agreement, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller and Purchaser agree as set forth below:
ARTICLE I
DEFINITIONS AND REFERENCES
1.01 DEFINITIONS. As used in this Agreement, the following terms shall have
the meanings indicated below:
ACCOUNT CASH: The balances of all cash and securities and other
instruments held by Seller or by Manager or for the benefit of Seller or
the Property and deposited, held, or contained in any account, bank, or
vault.
ACCOUNTS RECEIVABLE: All accounts receivable with regard to the Hotel
other than accounts receivable for room revenues for guests of the Hotel as
of the Cut-off Time.
ADDITIONAL DEPOSIT: Shall have the meaning given to it in Section
3.01(b).
AFFILIATE: With respect to a specific entity, any natural person or
any firm, corporation, partnership, association, trust, or other entity
which, directly or indirectly, controls or is under common control with the
subject entity, and with respect to any specific entity or person, any
firm, corporation, partnership, association, trust, or other entity which
is controlled by the subject entity or person. For purposes hereof, the
term "control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
any such entity or the power to veto major policy decisions of any such
entity, whether through the ownership of voting securities, by contract, or
otherwise.
AGREEMENT: This Hotel Purchase and Sale Agreement, including the
exhibits attached hereto and made a part hereof.
ASSUMED LIABILITIES: Shall have the meaning given to it in Section
2.03(a).
BOOKINGS: Shall have the meaning given to it in Section 2.01(m).
BOOKS AND RECORDS: Shall have the meaning given to it in Section
2.01(k).
BROKER: Shall have the meaning given to it in Section 5.03.
BUSINESS DAY: Shall mean all days of the year except Saturdays,
Sundays, and holidays recognized by the Federal Reserve Bank of New York.
If any deadline provided in this Agreement falls on a day other than a
Business Day, such deadline shall be extended until the first Business Day
thereafter.
CODE: Shall have the meaning given to it in Section 5.01(n)(iii).
CONSUMABLES: Shall have the meaning given to it in Section 2.01(e).
CLOSING: The consummation of the transaction contemplated by this
Agreement.
CLOSING DATE: A date that is mutually agreeable to Seller and
Purchaser which is not later than forty-five (45) days after the expiration
of the Inspection Period (or the next Business Day if such day falls on a
date that is not a Business Day), subject to the right of Seller to extend
the Closing Date pursuant to Section 6.08(b) of this Agreement.
COLLECTIVE BARGAINING AGREEMENTS: These contracts listed in Exhibit
C-5 under the heading "Collective Bargaining Agreements."
COMPENSATION: The direct salaries and wages paid to, or accrued for
the benefit of, any Employee, incentive compensation, vacation pay,
severance pay, employer's contributions under F.I.C.A. or COBRA,
unemployment compensation, workmen's compensation or other employment
taxes, payments under Employee Benefit Plans, or benefits; to the extent
Seller is responsible for the aforementioned at law.
CUT-OFF TIME: 11:59 P.M. (Central Standard or Daylight Savings Time,
as applicable) on the date prior to the Closing Date.
DEED: Shall have the meaning given to it in Section 6.03(a).
DEPOSIT: Shall have the meaning given to it in Section 3.01(b).
DOCUMENTS: All plans, specifications, drawings, blueprints, surveys,
environmental reports, and other documents in Seller's possession that
relate to the Property.
DILIGENCE: Shall have the meaning given to it in Section 4.01.
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EMPLOYEE(S): All persons employed by Manager, or an Affiliate of
Manager pursuant to Management Agreement or employment contracts or
otherwise.
EMPLOYEE BENEFIT PLANS: All "EMPLOYEE BENEFIT PLANS," as that term is
defined in Section 3(3) of ERISA, and each other employee benefit plan or
program to which Seller contributes on behalf of any of the Employees.
ENVIRONMENTAL LAWS: Any federal, state and local laws, statutes,
ordinances, rules, regulations (including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended from time to
time (42 U.S.C. Section 9601 et seq.) and the applicable provisions of all
applicable state and local statutes, as amended from time to time, and
rules and regulations promulgated thereunder), authorizations, judgments,
decrees, administrative orders, concessions, grants, franchises, agreements
and other governmental restrictions and requirements relating to the
environment.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
ESCROW: The escrow, if any, created for the purpose of facilitating
the transactions contemplated by this Agreement pursuant to the escrow
instructions with the Escrow Company.
ESCROW COMPANY: Stewart Title Guaranty Company.
EXCLUDED ASSETS: Those assets, if any, listed on Exhibit A to this
Agreement, the Account Cash and reserve for replacement of fixtures,
furnishings and equipment, the Management Agreement, the Accounts
Receivable and the Employee Benefit Plans.
EXCLUDED PERMITS: Those permits and licenses required for the
ownership and operation of the Hotel which, under applicable law, are
nontransferable.
FINAL CLOSING STATEMENT: The Final Closing Statement required under
Section 7.03(a).
FIXTURES AND TANGIBLE PERSONAL PROPERTY: Shall have the meaning given
to it in Section 2.01(c).
GENERAL ASSIGNMENT: Shall have the meaning given to it in Section
6.03(c).
HOTEL: The hotel known as the Hotel 71 located at 71 East Wacker
Drive, Chicago, Illinois and all related facilities and the lodging, food
and beverage, and other businesses and activities related thereto and
conducted at such hotel.
HOTEL CONTRACTS: Shall have the meaning given to it in Section
2.01(i).
IMPROVEMENTS: Shall have the meaning given to it in Section 2.01(b).
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INDEMNIFIED PARTIES: With respect to an entity, such entity's
partners, trustees, officers, directors, employees, beneficiaries,
shareholders, members, managers, advisors, and other agents and each of
their respective partners, trustees, beneficiaries, employees, officers,
directors, members, managers and shareholders.
INITIAL DEPOSIT: Shall have the meaning given to it in Section
3.01(a).
INSPECTION PERIOD: Shall have the meaning given to it in Section 4.01.
INVENTORY: Shall have the meaning given to it in Section 2.01(g).
IT SYSTEMS: Shall have the meaning given to it in Section 2.01(f).
LAND: Shall have the meaning given to it in Section 2.01(a).
LEGAL REQUIREMENTS: All laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, permits,
licenses, authorizations, directions, and requirements of all governments
and governmental authorities having jurisdiction of the Property
(including, for purposes of this Agreement, any local Board of Fire
Underwriters), and the operation of the Hotel.
LIABILITIES: All liabilities, demands, liens, interest, claims,
actions or causes of action, assessments, losses, fines, penalties, costs
(including, without limitation, response and/or remedial costs), damages
and expenses including, without limitation, those asserted by any Federal,
state or local governmental or quasi-governmental agency, third party, or
former or present employee, including attorneys', consultants' and expert
witness fees and expenses.
LIQUOR LICENSE: Any and all licenses and permits required by any
applicable governmental authorities for the sale and consumption of
alcoholic beverages at the Hotel solely or jointly held by Seller.
MANAGEMENT AGREEMENT: That certain Management Agreement between Seller
and Manager pursuant to which Manager manages the Hotel.
MANAGER: Chiboy LLC, an Ohio limited liability company.
MATERIAL CONTRACTS: All Hotel Contracts which cannot be cancelled by
thirty (30) days' or less written notice without penalty or premium
payment.
MISCELLANEOUS HOTEL ASSETS: Shall have the meaning given to it in
Section 2.01(o).
MONETARY EXCEPTION: Shall have the meaning given to it in Section
4.06.
NEW EXCEPTION: Shall have the meaning given to it in Section 4.06.
NOTICE AND NOTICES: Shall have the meanings given to them in Section
15.01.
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OBLIGATIONS: All payments required to be made and all representations,
warranties, covenants, agreements, and commitments required to be performed
under the provisions of this Agreement by Seller or Purchaser, as
applicable.
OPENING OF ESCROW: Shall mean the earliest date on which Escrow
Company has received both a fully executed copy of this Agreement and the
Initial Deposit.
PERMITS: Shall have the meaning given to it in Section 2.01(j).
PERSONAL PROPERTY: All of the Property other than the Real Property.
PRELIMINARY CLOSING STATEMENT: The Preliminary Closing Statement
required by Section 7.03(a).
PRESENT STANDARDS: The standards to which Seller and the Manager have
generally operated and maintained the Hotel during the period prior to the
execution of this Agreement.
PROPERTY: Shall have the meaning given to it in Section 2.01.
PROPRIETARY INFORMATION: Shall have the meaning given to it in Section
15.09.
PURCHASE PRICE: Shall have the meaning given to it in Section 3.01.
REAL PROPERTY: The Land together with the Improvements located on the
Land.
RESTAURANT LEASE: That certain Restaurant Lease dated November 20,
2002 between 71 East Wacker Leasing, Inc., a Delaware corporation, the
landlord thereunder and an affiliate of Seller, and MRG Enterprises,
L.L.C., an Illinois limited liability company, the tenant thereunder, with
regard to the restaurant in the Hotel, together with all Exhibits thereto,
including without limitation, the Ancillary Food Service Operating
Agreement, a copy of which has been provided to Purchaser.
RESTAURANT SPACE: The portion of the Real Property subject to the
Restaurant Lease.
RETAINED LIABILITIES: Shall have the meaning given to it in Section
2.03(b).
SELLER ENCUMBRANCE: Any mortgage or deed of trust or other monetary
lien voluntarily granted or assumed by Seller and encumbering the Property
or any portion thereof and any and all judgments or mechanic's or
supplier's liens encumbering the Property or any portion thereof arising
from work performed or materials furnished at the Property by or on behalf
of Seller.
SPACE LEASES: Shall have the meaning given to it in Section 2.01(h).
SPACE LESSEE: Any person or entity entitled to occupancy of any
portion of the Real Property under a Space Lease.
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SUPPLIES: Shall have the meaning given to it in Section 2.01(d).
SURVEY: Shall have the meaning given to it in Section 4.06.
TERMINATION NOTICE: Shall have the meaning given to it in Section
4.04.
TITLE COMMITMENT: Shall have the meaning given to it in Section 4.06.
TITLE COMPANY: Stewart Title Guaranty Company.
TITLE DEFECTS: Shall have the meaning given to it in Section 4.06.
TITLE POLICY: An ALTA Owner's Title Insurance Policy, Form B-1992,
issued by the Title Company pursuant to the Title Commitment, in favor of
Purchaser and in the amount of the portion of the Purchase Price allocated
to the Real Property, showing good and marketable fee simple title in the
Real Property to be vested in Purchaser, subject to only the title
exceptions listed in the Title Policy.
TRANSFER: Shall have the meaning given to it in Section 15.05.
UCC: The Uniform Commercial Code in effect in the jurisdiction where
the Real Property is located.
UCC SEARCH: A search of the filings (at the state and county levels)
pursuant to the UCC with regard to the Personal Property.
WARN ACTS: Shall have the meaning given to them in Section 14.01.
WARRANTIES: Shall have the meaning given to it in Section 2.01(l).
1.02 REFERENCES. Except as otherwise specifically indicated, all references
to Section and Subsection numbers refer to Sections and Subsections of this
Agreement, and all references to Exhibits refer to the Exhibits attached to this
Agreement. The words "hereby," "hereof," "herein," "hereto," "hereunder,"
"hereinafter," and words of similar import refer to this Agreement as a whole
and not to any particular section or subsection of this Agreement. Captions are
for convenience only and shall not be used to construe the meaning of any part
of this Agreement.
ARTICLE II
SALE AND PURCHASE; "AS-IS" SALE
2.01 SALE AND PURCHASE. Seller hereby agrees to sell to Purchaser, and
Purchaser hereby agrees to purchase from Seller, on the terms and subject to the
conditions set forth in this Agreement, the following assets (collectively, the
"PROPERTY"):
(a) LAND. The fee simple interest in the parcel of real estate
described in Exhibit B, together with all right, title, and interest, if
any, of Seller in and to all land
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lying in any street, alley, road, or avenue, open or proposed, in front of
or adjoining such land, and all easements, development rights, air rights,
mineral rights, water rights, rights under restrictive covenants and other
rights appurtenant to such land (collectively, the "LAND").
(b) IMPROVEMENTS. The buildings, structures (surface and sub-surface,
including underground parking), and other improvements, including such
fixtures as shall constitute real property, located on the Land
(collectively, the "IMPROVEMENTS").
(c) FIXTURES AND TANGIBLE PERSONAL PROPERTY. All fixtures, furniture,
furnishings, fittings, equipment, cars, trucks, machinery, tools,
apparatus, signage, art work, appliances, draperies, carpeting, rugs, keys,
and other articles of personal property now located on the Real Property
and used or usable in connection with any part of the Hotel including,
without limitation, those listed on Exhibit C-1, subject to such
depletions, resupplies, substitutions, and replacements as shall occur and
be made in the normal course of business but in accordance with Present
Standards excluding, however: (i) Consumables; (ii) Supplies; (iii)
equipment and other property leased pursuant to Hotel Contracts; (iv)
property owned by Space Lessees, Manager, guests, employees, or other
persons (other than Seller or any Affiliate of Seller, unless specifically
denominated as an Excluded Asset) furnishing goods or services to the
Hotel; (v) Improvements; and (vi) IT systems (collectively, the "FIXTURES
AND TANGIBLE PERSONAL PROPERTY").
(d) SUPPLIES. All china, glassware, linens, silverware, and uniforms,
whether in use or held in reserve storage for future use, in connection
with the operation of the Hotel, which are on hand on the date of this
Agreement including, without limitation, those listed on Exhibit C-2,
subject to such depletion and restocking as shall be made in the normal
course of business but in accordance with Present Standards (collectively,
the "SUPPLIES").
(e) CONSUMABLES. All engineering, maintenance, and housekeeping
supplies, including soap, cleaning materials and matches; stationery and
printing; and other supplies of all kinds, whether unused or held in
reserve storage for future use in connection with the maintenance and
operation of the Hotel, which are on hand on the date of this Agreement
including, without limitation, those listed on Exhibit C-3, subject to such
depletion and restocking as shall occur and be made in the normal course of
business but in accordance with Present Standards, excluding, however, (i)
Supplies and (ii) all items of personal property owned by Space Lessees,
Manager, guests, employees, or persons (other than Seller or any Affiliate
of Seller, unless denominated as an Excluded Asset under this Agreement)
furnishing food or services to the Hotel (collectively, the "CONSUMABLES").
(f) IT SYSTEMS. All computer hardware, telecommunications and
information technology systems located at the Hotel, and all computer
software used at the Hotel (subject to the terms of any applicable third
party license agreement) including, without limitation, those listed on
Exhibit C-4, to the extent such IT Systems are transferable if they are the
subject of a third party license agreement, or the parties obtain any
consent necessary to effectuate such transfer (the "IT SYSTEMS");
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(g) INVENTORY. All articles of personal property now located on the
Real Property and used, usable, or salable in connection with any part of
the Hotel, subject to such depletions, substitutions and replacements as
shall occur and be made in the normal course of business, but in accordance
with Present Standards including, without limitation, any inventory held
for sale in any gift shop or newsstand operated by Seller or by Manager,
but excluding: (i) Fixtures and Tangible Personal Property; (ii)
Consumables; (iii) Supplies; (iv) equipment and other property leased
pursuant to Hotel Contracts; (v) property owned by Manager, guests,
employees, or other persons (other than Seller or any Affiliate of Seller,
unless denominated as an Excluded Asset) furnishing goods or services to
the Hotel; (vi) Improvements; and (vii) IT Systems (collectively, the
"INVENTORY").
(h) SPACE LEASES. All of Seller's right title of interest, if any, in
leases, subleases, licenses, concessions, and other agreements for the use
or occupancy of any portion of the Real Property (including any guarantee
with respect to any obligation thereunder and all security and other
deposits held by or on behalf of Seller) to the extent assignable
excluding, however, Bookings and the Management Agreement (collectively,
the "SPACE LEASES").
(i) HOTEL CONTRACTS. All assignable service contracts, maintenance
contracts, purchase orders, leases, and other contracts or agreements,
including equipment leases capitalized for accounting purposes, booking and
reservation agreements (credit card service agreements, and any amendments
thereto and including all deposits made thereunder, with respect to the
ownership, maintenance, operation, provisioning, or equipping of the Hotel,
or any of the Property, as well as written warranties and guaranties
relating thereto, if any, including, but not limited to, those relating to
heating and cooling equipment and/or mechanical equipment including,
without limitation, those listed on Exhibit C-5, but exclusive, however, of
(i) insurance policies, (ii) the Bookings (iii) the Collective Bargaining
Agreements, (iv) the Employee Benefit Plans; and (v) the Space Leases
(collectively, the "HOTEL CONTRACTS").
(j) PERMITS. All licenses, permits, certificates, authorizations,
registrations, and approvals issued by any governmental authority used in
or relating to the construction, ownership, occupancy, or operation of any
part of the Property, including, without limitation, all of Seller's right,
title and interest in those necessary for the sale and on-premises
consumption of food, liquor, and other alcoholic beverages including,
without limitation, those listed on Exhibit C-6, together with any deposits
made by Seller or for the benefit of Seller thereunder (collectively, the
"PERMITS").
(k) BOOKS AND RECORDS. All of Seller's right, title and interest in
and to (a) all Space Lessee and Material Contract counterparty
correspondence, billing and other files, (b) all property surveys,
structural reviews, environmental assessments or audits, architectural
drawings and engineering, geophysical, soils, seismic, geologic,
environmental (including with respect to the impact of materials used in
the construction or renovation of the Improvements) and architectural
reports, studies and certificates pertaining to the Property, and (c) all
accounting, tax, financial, and other books and records relating to the
use, maintenance, leasing and operation of the Property including,
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without limitation, profiles, contact information, histories, preferences,
and other information obtained in the ordinary course of business from
guests of the Hotel, but excluding Seller's internal appraisals,
valuations, projections and similar internal records and excluding items
that are legally privileged or that constitute attorney work product as
long as such privileged is not utilized for the primary purpose of avoiding
disclosure of Purchaser, and documents that are subject to a bona fide
confidentiality agreement with a third party that prohibits their
disclosure by Seller to Purchaser (collectively, the "BOOKS AND RECORDS").
(l) WARRANTIES. All of Seller's right, title and interest in and to
all presently effective and assignable warranties, guaranties,
representations or covenants given to or made in favor of Seller in
connection with the acquisition, development, construction, maintenance,
repair, renovation, operation or inspection of any of the Property,
including any made under any construction contracts and the service or
maintenance contracts (collectively, the "WARRANTIES").
(m) BOOKINGS. Agreements for the use or occupancy of guest rooms and
meeting and banquet facilities or other facilities of the Hotel, including
any off-site catering, for any time after the Cut-Off Time, including all
deposits held by or on behalf of Seller with respect thereto (collectively,
the "BOOKINGS").
(n) MISCELLANEOUS HOTEL ASSETS. All contract rights, tradenames,
trademarks, logos, copyrights, goodwill, website, and other items of
intangible personal property relating to the ownership of the Property or
the operation of the Hotel owned by Seller, but excluding (i) Bookings;
(ii) Hotel Contracts; (iii) the Management Agreement; (iv) Space Leases;
(v) Permits; (vi) Books and Records; (vii) refunds, rebates, or other
claims, or any interest thereon, for periods or events occurring prior to
the Cut-off Time; (viii) utility and similar deposits; (ix) prepaid
insurance or other prepaid items; or (xi) prepaid license and permit fees;
except to the extent that Seller receives a credit on the Final Closing
Statement for any such excluded item or matter (collectively, the
"MISCELLANEOUS HOTEL ASSETS").
Notwithstanding anything to the contrary set forth above, the Property
shall not include any of the Excluded Assets, all of which shall be
retained by Seller.
2.02 PROPERTY SOLD "AS IS".
(a) Purchaser acknowledges, represents and warrants that, except as
expressly provided in this Agreement, (i) any information ("Information")
supplied or made available by Seller, whether written or oral, or in the
form of maps, surveys, plats, soil reports, engineering studies,
environmental studies, inspection reports, plans, specifications, or any
other information whatsoever, without exception, pertaining to the
Property, any and all records, rent rolls, and other documents pertaining
to the use and occupancy of the Property, income thereof, the cost and
expenses of maintenance thereof, and any and all other matters concerning
the condition, suitability, integrity, marketability, compliance with law,
or other attributes or aspects of the Property, or a part thereof, is
furnished to Purchaser solely as a courtesy; (ii) THE INFORMATION IS
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PROVIDED, AND THE PROPERTY IS PURCHASED, ON AN AS-IS-WHERE-IS BASIS AND
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT SELLER MAKES NO
REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW OR
OTHERWISE, INCLUDING, BUT IN NO WAY LIMITED TO, ANY WARRANTY OF CONDITION,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE AS TO THE INFORMATION
OR THE PROPERTY; and (iii) no representations, whether written or oral,
have been made by Seller, or its agents or employees in order to induce
Purchaser to enter into this Agreement. Without limiting the generality of
the foregoing, Purchaser acknowledges, warrants and represents to Seller
that neither Seller nor its agents or employees have made any
representations or statements, whether written or oral, to Purchaser
concerning the investment potential, operation or resale of the Property at
any future date, at a profit or otherwise, nor has Seller or its agents or
employees rendered any advice or expressed any opinion to Purchaser
regarding any tax consequences of ownership of the Property.
(b) Purchaser acknowledges, represents and warrants that as of the
Closing Date, Purchaser will be familiar with the Property and will have
made such independent investigations as Purchaser deems necessary or
appropriate concerning the Property. If Purchaser elects to proceed with
the purchase of the Property, any objections which Purchaser may have with
respect to the Property shall be waived by Purchaser. Except as expressly
provided in this Agreement, Seller makes no representations or warranties
and specifically disclaims any representation, warranty, or guaranty oral
or written, past, present or future with respect to the physical condition
or any other aspect of the Property, including, without limitation, the
structural integrity of the Improvements, the manner, construction,
condition, and state of repair or lack of repair of any of the
Improvements, the conformity of the Improvements to any plans or
specifications for the Property, including, but not limited to, any plans
and specifications that may have been or which may be provided to
Purchaser, the conformity of the Property to past, current or future
applicable zoning or building code requirements or the compliance with any
other laws, rules, ordinances, or regulations of any government or other
body, the financial earning capacity or history or expense history of the
operation of the Property, the nature and extent of any right-of-way,
lease, possession, lien encumbrance, license, reservation, condition, or
otherwise, the existence of soil instability, past soil repairs, soil
additions or conditions of soil fill, susceptibility to landslides,
sufficiency of undershoring, sufficiency of drainage, whether the Property
is located wholly or partially in a flood plain or a flood hazard boundary
or similar area, the existence or non-existence of hazardous waste or other
toxic materials of any kind (including, without limitation, asbestos) or
any other matter affecting the stability or integrity of the Land and/or
the Improvements.
(c) Seller shall not be responsible for any failure to investigate the
Property on the part of Seller, any real estate broker or sales agent, or
any other agent or employee of Seller or any third party.
(d) Except as expressly provided in this Agreement, including but not
limited to Section 5.05, as part of Purchaser's agreement to purchase and
accept the Property AS-IS-WHERE-IS, and not as limitation on such
agreement, PURCHASER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES AND
RELEASES ANY
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AND ALL CLAIMS PURCHASER MIGHT HAVE REGARDING ANY FORM OF WARRANTY, EXPRESS
OR IMPLIED, OF ANY KIND OR TYPE, RELATING TO THE PROPERTY AND THE
INFORMATION. SUCH WAIVER AND RELEASE IS ABSOLUTE, UNCONDITIONAL,
IRREVOCABLE, COMPLETE, TOTAL AND UNLIMITED IN ANY WAY. SUCH WAIVER AND
RELEASE INCLUDES, BUT IS NOT LIMITED TO, A WAIVER AND RELEASE OF EXPRESS
WARRANTIES, IMPLIED WARRANTIES, WARRANTIES OF FITNESS FOR A PARTICULAR USE,
WARRANTIES OF MERCHANTABILITY, WARRANTIES OF HABITABILITY, STRICT LIABILITY
RIGHTS AND CLAIMS OF EVERY KIND AND TYPE, INCLUDING BUT NOT LIMITED, TO
CLAIMS REGARDING DEFECTS WHICH WERE NOT OR ARE NOT DISCOVERABLE, PRODUCT
LIABILITY CLAIMS, PRODUCT LIABILITY TYPE CLAIMS, ANY RIGHTS AND CLAIMS
RELATING TO OR ATTRIBUTABLE TO ENVIRONMENTAL CONDITIONS, ALL OTHER EXTANT
OR LATER CREATED OR CONCEIVED OF STRICT LIABILITY OR STRICT LIABILITY TYPE
CLAIMS AND RIGHTS, SUBJECT TO THE EXPRESS PROVISIONS OF THIS AGREEMENT
2.03 LIMITS OF ASSUMPTIONS AND ASSIGNMENTS.
(a) ASSUMPTION OF CERTAIN LIABILITIES. Purchaser shall assume and be
responsible for the timely satisfaction or performance, as the case may be,
of all liabilities or obligations arising under or in connection with the
Property and the business related to the Property to the extent such
liabilities or obligations arise or are incurred and are first required to
be performed after the Closing Date (collectively, the "ASSUMED
LIABILITIES").
(b) LIABILITIES NOT ASSUMED. With the exception of the Assumed
Liabilities and as stated otherwise herein, Purchaser shall not by
execution and performance of this Agreement or otherwise, assume or
otherwise be responsible for any liability or obligation of any nature of
Seller or claims of such liability or obligation, whether arising out of
occurrences prior to, at, or after the date hereof (collectively, the
"RETAINED LIABILITIES").
(c) ASSIGNMENT OF HOTEL CONTRACTS. Not later than ten (10) days prior
to the end of the Inspection Period, Purchaser shall notify Seller of any
Hotel Contract that Purchaser does not elect to assume. Any such Hotel
Contract not assumed by Purchaser shall be deemed a part of the Retained
Liabilities; provided, however, that in the event Purchaser elects not to
assume all of the Hotel Contracts, then Seller may terminate this Agreement
without liability by providing Purchaser with written notice of termination
within ten (10) days of receipt of Purchaser's election not to assume all
of the Hotel Contracts.
(d) NON-ASSIGNMENT OF CERTAIN PROPERTY. To the extent that the
assignment hereunder of any of the Hotel Contracts, any of the Space Leases
or the Restaurant Lease shall require the consent of the other party (or in
the event that any of the same shall be non-assignable), neither this
Agreement nor any action taken pursuant to its provisions shall constitute
an assignment or an agreement to assign if such
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assignment or attempted assignment would constitute a breach thereof or
result in the loss or diminution in value thereof. Seller and Purchaser
agree to each use reasonable efforts to obtain any assignments where
necessary; provided, however, the failure to obtain any such assignments
shall not effect Purchaser's assumption of the liabilities under such Hotel
Contracts, Space Leases or Restaurant Lease in accordance with Section
2.03(a) hereof.
ARTICLE III
PURCHASE PRICE AND DEPOSIT
3.01 PURCHASE PRICE. The purchase price (the "PURCHASE PRICE") for the
Property to be paid by Purchaser to Seller at the Closing shall be NINETY-TWO
MILLION FIVE HUNDRED THOUSAND AND 00/100 Dollars ($92,500,000.00). The Purchase
Price shall be payable by Purchaser as follows:
(a) Purchaser has previously deposited in an interest bearing account,
with the Escrow Company, as escrow agent, the amount of One Million and
00/100 Dollars ($1,000,000.00) by a certified check or wire transfer of
immediately available funds as a deposit (the "INITIAL DEPOSIT"). Purchaser
shall have the right to cancel this Agreement and the Escrow for any reason
or no reason prior to the expiration of the Inspection Period. Subject to
the provisions of Section 3.01(d) and 3.01(e), if Purchaser terminates this
Agreement prior to the expiration of the Inspection Period the Initial
Deposit shall be fully refundable to Purchaser without off-set.
(b) Unless Purchaser has terminated this Agreement as provided in
Section 4.04, on or before the expiration of the Inspection Period,
Purchaser shall deposit with the Escrow Company, as escrow company, the
additional amount of One Million and 00/100 Dollars ($1,000,000.00) by a
certified check or wire transfer of immediately available funds as an
additional deposit (together with interest earned thereon, the "ADDITIONAL
DEPOSIT", and together with the Initial Deposit, and interest earned on the
Initial Deposit or Additional Deposit, the "DEPOSIT").
(c) On the date of Closing, Purchaser shall pay the balance of the
Purchase Price, less the amount of the Deposit and subject to the
prorations and adjustments provided for in this Agreement, including,
without limitation, a possible reduction pursuant to Section 6.08(b), in
cash by certified check or wire transfer of immediately available funds to
the Escrow Company, as escrow company, in accordance with the terms and
conditions of this Agreement. Purchaser shall be responsible for any income
taxes payable with respect to any interest and/or dividends earned with
respect to the Deposit and shall deliver a form W-9 to Escrow Company in
connection therewith.
(d) If Purchaser or its agents issue a press release or hold a press
conference about the proposed transaction or otherwise disclose non-public
information traceable to Purchaser without the prior written consent of
Seller after September 9, 2004, the Deposit shall become non-refundable and
shall immediately be released to Seller (but shall be applied against the
Purchase Price in the event Purchaser performs its obligations under
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the Agreement). Notwithstanding the foregoing, Purchaser shall have the
right to commence efforts to market sales of to be formed condominium units
comprising part of the Hotel on the later of (a) the expiration of the
Inspection Period and (b) November 25, 2004, provided that in no event
shall Purchaser (i) disclose the terms or timing of the transaction
contemplated by this Agreement; (ii) represent that they own the Hotel;
(iii) commence the process of creating a condominium; or (iv) purport to
bind the Seller or otherwise enter into any binding contract with respect
to the sale of such units prior to the Closing.
(e) Purchaser and Seller acknowledge and agree that a portion of the
Initial Deposit equal to $250,000 is not refundable to the Purchaser if the
Purchaser terminates this Agreement prior to the expiration of the
Inspection Period. Purchaser acknowledges that if Purchaser terminates this
Agreement prior to the expiration of the Inspection Period, Purchaser shall
be entitled to $750,000 plus interest accrued on such $750,000 and Seller
shall be entitled to $250,000 plus interest accrued on the $250,000.
3.02 ALLOCATION OF PURCHASE PRICE. Seller and Purchaser hereby agree that
the Purchase Price shall be allocated among the Land, the Improvements and
Personal Property as set forth in Exhibit C for federal, state and local tax
purposes. The parties shall file all federal, state and local tax returns and
related documents consistent with the allocations set forth in Exhibit C.
3.03 DEPOSIT ESCROW. The Deposit shall be held and disbursed by the Escrow
Company acting as escrow company. The Deposit shall be invested in a federally
issued or insured interest bearing instrument and shall be paid to the party to
which the Deposit is paid pursuant to the provisions of this Agreement. If the
sale of the Property is consummated in accordance with the terms of this
Agreement, the Deposit shall be applied to the Purchase Price to be paid by
Purchaser at the Closing. In the event of a default under this Agreement by
Purchaser or Seller, the Deposit shall be applied as provided in this Agreement.
ARTICLE IV
INSPECTION PERIOD
4.01 INSPECTION PERIOD. The "INSPECTION PERIOD" shall be the period from
the date of this Agreement through 6:00 P.M. (Eastern Daylight Savings Time) on
November 19, 2004, subject to extension by the Seller pursuant to Section
5.01(n)(vii)(A). Purchaser and its representatives shall be permitted to enter
upon the Property at any reasonable time and from time to time during the
Inspection Period to examine, inspect, and shall be provided with reasonable
access to the books and records and other records and documentation with respect
to the Property for its review of the same and shall have access to key
Employees responsible for the management and maintenance of the Hotel
(collectively, "DILIGENCE"). The Diligence shall be subject to the terms,
conditions, and limitations set forth in this Article IV. As part of the
Diligence, Seller shall provide to Purchaser the diligence items listed on the
attached Exhibit D.
4.02 REVIEW AND INSPECTION. Purchaser shall have a right, subject to the
rights of tenants, to enter upon the Property for the purpose of conducting its
Diligence provided that in
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each such instance (i) Purchaser notifies Seller of its intent to enter the
Property to conduct its Diligence not less than twenty-four (24) hours prior to
such entry and (ii) the date and approximate time period are scheduled with
Seller or the Manager. At Seller's election, a representative of Seller shall be
present during any entry by Purchaser or its representatives upon the Property
for Diligence. Purchaser shall take all necessary actions to ensure that neither
it nor any of its representatives unreasonably interfere with the Space Lessees
or guests of the Hotel or ongoing operations occurring at the Property.
Purchaser shall not cause or permit any mechanic liens, materialmen's liens, or
other liens to be filed against the Property as a result of its Diligence.
4.03 TESTING. Purchaser shall have the right to conduct, at its sole cost
and expense, any inspections, studies or tests that Purchaser deems appropriate
in determining the condition of the Property, provided, however, Purchaser is
not permitted to perform any sampling, boring, drilling or other physically
intrusive testing into the structures or ground comprising the Property,
including, without limitation, a so-called "PHASE II" environmental assessment,
without (i) submitting to Seller the scope and inspections for such testing; and
(ii) obtaining the prior written consent of Seller for such testing.
4.04 ACCEPTANCE OR REJECTION. Purchaser shall have until the expiration of
the Inspection Period to conduct its Diligence to determine whether the Property
is acceptable to Purchaser. Purchaser may, for any or no reason in its sole and
absolute discretion, terminate this Agreement by giving written notice of
termination (the "TERMINATION NOTICE") to Seller and the Escrow Company on or
before the expiration of the Inspection Period. Upon receipt by Seller and the
Escrow Company of the Termination Notice on or prior to the expiration of the
Inspection Period, (i) this Agreement shall automatically terminate, and the
parties shall have no further obligations to or recourse against each other
(except for any provisions of this Agreement which are expressly stated to
survive the termination of this Agreement, including, without limitation, the
indemnification obligations set forth in Section 4.07) and (ii) subject to
provisions of Sections 3.01(d) and 3.01(e), the Escrow Company shall promptly
return to Purchaser the Deposit. If Purchaser does not timely give a Termination
Notice on or before the expiration of the Inspection Period: (i) Purchaser shall
be deemed to have fully and knowingly waived its right to terminate this
Agreement pursuant to this Section 4.04 and (ii) the Deposit shall become
non-refundable, subject to the provisions of this Agreement.
4.05 CONFIDENTIALITY. Prior to Closing, Purchaser agrees and covenants with
Seller (i) not to disclose to any third party (other than its investors,
lenders, accountants, attorneys, and other professionals and consultants in
connection with the transaction contemplated in this Agreement) without Seller's
prior written consent, unless Purchaser is obligated by law to make such
disclosure, any of the reports or any other documentation or information
obtained by Purchaser which relates to the Property or Seller in any way, all of
which shall be used by Purchaser and its agents solely in connection with the
transaction contemplated by this Agreement and (ii) not to issue a press release
or hold a press conference about the proposed transaction or otherwise disclose
non-public information about the Property or the transaction contemplated
hereunder without the prior written consent of Seller. If this Agreement is
terminated, Purchaser agrees that all such information will continue to be held
in strict confidence and, to the extent possible, all such information that was
provided by Seller to Purchaser shall be returned or delivered to Seller or
destroyed.
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4.06 TITLE AND SURVEY. Within three (3) business days of the execution by
Purchaser and Seller of this Agreement, Seller shall order from, and, upon
completion, cause the Title Company to deliver to Purchaser a commitment for
title insurance (the "TITLE COMMITMENT") for the Property together with copies
(to the extent recorded) of each of the underlying documents listed as an
exception on the Title Commitment, as well as copies of any surveys or easement
plats that Seller or Title Company may have in their possession with respect to
the Real Property (together with an update of same to paid for by Seller, the
"SURVEY"). Within seven (7) days after receipt by Purchaser of the Title
Commitment, the Survey and all underlying documents of record, Purchaser will
notify Seller and the Title Company of any restrictions, reservations,
limitations, easements, conditions, defects or encumbrances disclosed in the
Title Commitment that are objectionable to Purchaser (together herein called
"TITLE DEFECTS" ). All exceptions shown on the Title Commitment not objected to
by Purchaser in its notice to Seller shall be deemed acceptable to Purchaser.
Seller shall have a period of seven (7) days following Seller's receipt of
Purchaser's objection to any Title Defects in which to notify Purchaser which of
such Title Defects Seller will cure or have removed. If Seller will not cure or
remove all such Title Defects, Purchaser shall elect either to (i) waive its
objection to those Title Defects that Seller will not cure or remove, in which
case this Agreement will continue, and Seller shall have until expiration of the
Inspection Period to use its commercially reasonable efforts to cure or remove
those Title Defects identified in its notice to Purchaser as Title Defects that
Seller will cure or remove; or (ii) terminate this Agreement, in which case, the
Escrow Company shall thereupon return to Purchaser the funds and documents
previously paid or deposited by it, including, but not limited to, the Deposit,
and the parties shall be fully released and discharged from any obligation
hereunder. Purchaser shall notify Seller of its election in writing within three
(3) days after receipt of Seller's notice, and Purchaser's failure to provide
such timely notice in response to Seller's notice shall constitute Purchaser's
election to waive its objection to the Title Defects that Seller will not cure
or remove and proceed as provided in (i) above. Notwithstanding anything to the
contrary contained in this Section 4.06, prior to the Closing Date, Seller shall
remove and discharge from record any and all deeds of trust, mortgages,
mechanic's liens for work performed on or material delivered to the Property,
delinquent taxes and delinquent assessments (collectively, the "MONETARY
EXCEPTIONS") encumbering title to the Real Property regardless of whether
Purchaser has objected thereto or not. Seller acknowledges and agrees that in
the event that Seller fails or refuses to remove and discharge any Monetary
Exception from title on or prior to the Closing Date, Purchaser may instruct the
Escrow Company to use and apply Purchase Price at the Closing Date to remove
such Monetary Exceptions.
Notwithstanding anything to the contrary contained herein, if any new lien,
covenant, condition, restriction, reservation, easement, right of way or other
encumbrance affecting the Real Property (each, a "NEW EXCEPTION") becomes of
record after the date of the Title Commitment (other than an exception caused by
Purchaser or consented to in writing by Purchaser), then (i) if the New
Exception was caused or consented to by Seller or any of its affiliates, then
Seller shall cause such New Exception to be removed prior to the Closing Date;
or (ii) if the New Exception was not caused or consented to by Seller or any of
its affiliates, then Seller may, but shall not be obligated to, remove such new
title exception within five (5) days after receipt of notice of such New
Exception.
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If Seller elects or is obligated to remove a New Exception, then, if
necessary, the Seller may extend the Closing Date by up to five (5) Business
Days to permit or arrange for any such removal. In the event that, pursuant to
clause (ii) in the previous paragraph, Seller elects not to remove such New
Exception within such period, then Purchaser shall have the right, by written
notice to Seller and the Escrow Company given within five (5) Business Days
after receipt of written notice from Seller that Seller has elected not to
remove such New Exception, to (A) accept such New Exception or (B) terminate
this Agreement, in which case Purchaser shall be refunded the Deposit, this
Agreement shall become null and void and of no further force or effect and the
parties shall thereafter have no further rights or obligations hereunder. If
such New Exception was caused by or consented to in writing by Purchaser, then
Purchaser shall take title to the Property subject to such New Exception.
4.07 RELEASE AND INDEMNIFICATION Except with respect to any loss, cost,
damage or claim arising from the Purchaser's discovery of the existence of any
adverse conditions of any nature existing at the Real Property, the Purchaser
shall indemnify and defend the Seller against any loss, damage or claim arising
from the Diligence activities of the Purchaser or any agents, contractors or
employees of the Purchaser or from the entry upon the Real Property by the
Purchaser or any agents, contractors or employees of the Purchaser (including
any loss, damage or claim arising from the exercise of inspection rights by
Purchaser hereunder). The Purchaser, at its own expense, shall restore any
damage to the Real Property caused by any of the tests or studies made by the
Purchaser. Purchaser shall return the Property to the same condition as prior to
any tests or studies. This indemnification shall survive any termination of this
Agreement or any closing of the transaction contemplated herein.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents and
warrants the following matters to Purchaser. Whenever a representation or
warranty or other reference is made in this Agreement on the basis of the actual
knowledge of Seller or words of similar import, such representation, warranty or
reference is made solely on the basis of the actual, as distinguished from
implied, imputed and constructive, knowledge on the date that such
representation or warranty is made, of Richard Conti, President and Chief
Operating Officer of Boykin Lodging Company, or James Luchars, Vice President of
AEW Capital Management, L.P., without inquiry or investigation or duty.
(a) DUE ORGANIZATION AND AUTHORIZATION. Seller is a limited liability
company duly formed, validly existing and in good standing under the laws
of Delaware and qualified to do business in Illinois. Seller has full power
and authority, and has taken all corporate and other action necessary to
authorize Seller to make, execute, deliver, and perform this Agreement. The
person executing this Agreement on behalf of Seller has been duly
authorized to do so. Except as provided in Article 8, this Agreement is a
binding and legal agreement of Seller, enforceable against Seller in
accordance with its terms, except as such may be subject to or limited by
the effect of any bankruptcy, reorganization, moratorium, insolvency, or
other laws affecting the rights of creditors generally
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(b) NO CONFLICT. The execution and delivery of this Agreement and the
closing documents to be executed in connection herewith and the
consummation of the transactions contemplated hereby and thereby, except as
otherwise provided herein, do not require the consent or approval of any
governmental authority, nor shall such execution and delivery result in a
breach or violation of any Legal Requirement or Permit, or conflict with,
breach, result in a default (or an event which with notice and passage of
time or both will constitute a default) under, or violate any contract or
agreement to which Seller is a party or by which it or the Property is
bound or any Permit.
(c) PENDING LITIGATION. To Seller's actual knowledge, except as
described in Exhibit E, there are no actions, suits, or proceedings,
pending or threatened against Seller related to the Property or the Hotel
or otherwise affecting the Property or any of Seller's rights therein or
Seller's ability to perform its obligations under this Agreement and which,
if decided adversely against Seller, would have a materially adverse effect
on the Hotel or the Property. To Seller's actual knowledge, except as noted
in Exhibit F, there is no violation of any Legal Requirement with regard to
the Property and Seller has not received any notice of any violation of a
Legal Requirement or a Permitted Exception which has not been corrected and
which, if decided adversely against Seller, would have a materially adverse
effect on the Hotel or the Property.
(d) CONDEMNATION. To Seller's actual knowledge, there are no pending,
or threatened, condemnation proceedings, or condemnation actions against
the Property.
(e) EMPLOYEES.
(i) Except as set forth in Exhibit G, to Seller' actual knowledge
(a) there is no labor strike, picketing of any nature, labor dispute,
slowdown or any other concerted interference with normal operations,
stoppage or lockout in effect, pending against or affecting the
Manager or any Affiliate of the Manager with respect to the operation
of the Hotel and neither the Manager or any Affiliate of the Manager
has received any written notice specifically threatening any of the
foregoing; (b) neither the Manager or any Affiliate of Manager is
delinquent in any payments to any Employee for any Compensation due
with respect to any services performed or amounts required to be
reimbursed to such Employees; (c) there are no formal material
grievances, complaints or charges with respect to employment or labor
matters pending in any judicial, regulatory or administrative forum,
or under any private dispute resolution procedure (and neither Manager
nor any Affiliate of Manager has received any notice threatening any
of the foregoing); (d) there are no audits or investigations of any of
Manager's or any Affiliate of Manager's employment practices or
policies by any governmental entity pending or threatened, and (e)
neither the Manager nor any Affiliate of Manager is subject to any
order, consent decree, judgment or injunction in respect of any matter
relating to the Employees.
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(ii) Neither Seller, Manager nor any Affiliate of Manager have
made any representation, express or implied, concerning the terms or
conditions on which Purchaser or its Manager may offer to employ any
Employees.
(iii) Except as set forth in Exhibit G, there are no pending or
threatened demands for settlement or other resolution of employment or
labor claims or disputes.
(f) TITLE TO PERSONAL PROPERTY; EQUIPMENT LEASES. Except as set forth
in Exhibit I, Seller has good and valid title to all of the tangible
Personal Property, which shall be free and clear of all liens and
encumbrances as of the Closing. Exhibit I sets forth a correct and complete
list of equipment and other Personal Property leased by Seller pursuant to
Hotel Contracts and requiring aggregate annual payments in excess of Two
Thousand Five Hundred Dollars ($2,500.00) for any year during the term of
such lease after the Closing.
(g) TAXES. Except as listed on Exhibit J Seller has not received any
written notice of any audit of any taxes payable with respect to the
Property which has not been resolved or completed, and Seller is not
currently contesting any such taxes or seeking an abatement or rollback of
any taxes.
(h) BOOKS AND RECORDS. Seller has made available to Purchaser complete
copies of the Books and Records in Seller's possession.
(i) SPACE LEASES.
(i) Exhibit K sets forth a correct and complete list of the Space
Leases, and the Seller has made available to Purchaser correct and
complete copies of the Space Leases.
(ii) Except as set forth in Exhibit K, the Seller has neither
given nor received any written notice of any breach or default under
any of the Space Leases which has not been cured and, to the Seller's
actual knowledge, no event has occurred or circumstance exists which,
with notice or the passage of time, would result in a breach or
default by the Seller or the Space Lessee thereunder. Seller has fully
reconciled all operating expenses and other additional rent and
percentage rent for calendar year 2003 with all Space Lessees under
the Space Leases, and neither Seller nor any Space Lessee owes any
payments pursuant to such reconciliation that has not been paid.
(iii) Exhibit K lists all security or other deposits made by any
Space Lessee under the Space Leases, and except as set forth in such
Exhibit K, no security or other deposit made by any Space Lessee under
the Space Leases has been applied towards the obligations of such
party in accordance with the Space Leases. No security or other
deposit is in the form of a letter of credit or any other form other
than cash. Except as set forth in Exhibit K, no rent has been paid by
any Space Lessee more than one month in advance.
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(iv) Except as set forth in Exhibit K, (A) no leasing or similar
commissions are payable with respect to any of the Space Leases,
either for the term currently in effect or for any renewal,
substitution, extension or expansion thereunder, and (B) Seller has no
unperformed obligation to construct or pay or reimburse the costs of
any improvements, to pay relocation costs, or any similar obligation
pursuant to the Space Leases.
(j) HOTEL CONTRACTS. Seller has made available to Purchaser correct
and complete copies of all Hotel Contracts to the extent available to
Seller. To Seller's actual knowledge, Seller has neither given nor received
any written notice of any breach or default under any Hotel Contract which
has not been cured and no event has occurred or circumstance exist which,
with notice of the passage of time, would result in a breach or default by
Seller or the other party thereunder.
(k) FINANCIAL STATEMENTS; ACCRUED LIABILITIES. The annual income and
expense statements for the Property provided to Purchaser for calendar
years 2001, 2002 and 2003 and "year-to-date" through July 31, 2004 with
respect to the Property are correct and complete copies of the financial
statements prepared by Seller or the Manager and have been prepared in
accordance with US Generally Accepted Accounting Principals and present
fairly, in all material respects, the operating results of the Property for
the periods covered by such statements, subject to standard year-end
adjustments for the "year-to-date" statement which shall be updated to the
Closing Date hereof. Exhibit S attached hereto is a correct and complete
list of all accrued liabilities related to the Property and the Hotel as of
the date indicated in such Exhibit S.
(l) HAZARDOUS SUBSTANCES. To Seller's actual knowledge and except as
set forth in the Books and Records and Exhibit L (i) Seller has not
received any written notice from any governmental authority or neighboring,
upgradient or downgradient property owner or other third party regarding
any non-compliance with or violation of any Environmental Laws with respect
to the Real Property or the presence or release of hazardous substances in,
on, under, or from, the Real Property, and (ii) during the Seller's
ownership of the Property, Seller has not made or been requested in writing
to make or, to the Seller's actual knowledge, been advised by legal counsel
or its environmental consultant to make, any report or disclosure to any
governmental authority relating to a release or a threatened release of
hazardous substances to or from the Real Property.
(m) AGREEMENTS WITH GOVERNMENTAL AUTHORITIES. Seller has not entered
into any unrecorded commitment or agreement with any governmental authority
affecting the Property and which could reasonably be expected to have a
material adverse effect on the ownership, value or operation of the
Property.
(n) EMPLOYEE BENEFIT PLANS.
(i) As used in this Section 5.01(n), the term "Employee Benefit
Plan" includes any pension, retirement, savings, disability, medical,
dental, health, life, death benefit, group insurance, profit sharing,
deferred compensation, stock option, bonus, incentive, vacation pay,
tuition reimbursement, severance pay, or
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other employee benefit plan, trust, agreement, contract, policy or
commitment (including, without limitation, any pension plan, as
defined in Section 3(2) of ERISA ("Pension Plan"), and any welfare
plan as defined in Section 3(1) of ERISA ("Welfare Plan")), whether
any of the foregoing is funded, insured or self-funded (1) sponsored
or maintained by Seller, or any of its affiliates, to the extent such
affiliate is described in Code Section 414(b), (c) or (m) and
corresponding Treasury Regulations (each a "Controlled Group Member")
and covering any Controlled Group Member's active or former employees
(or their beneficiaries), (ii) to which any Controlled Group Member is
a party or by which any Controlled Group Member (or any of the rights,
properties or assets thereof) is bound, or (iii) with respect to which
any Controlled Group Member has made any payments, contributions or
commitments or may otherwise have any liability (whether or not such
Controlled Group Member still maintains such Employee Benefit Plan).
(ii) Exhibit M provides a complete list of all Employee Benefit
Plans maintained or contributed to by Seller for the Employees or
former Employees.
(iii) There is no pending litigation or governmental
administrative proceeding (or investigation) or other proceeding
(other than those relating to routine claims for benefits) relating to
any Employee Benefit Plan.
(iv) No Welfare Plan provides for continuing benefits or coverage
for any employee or any beneficiary of an employee after such
employee's termination of employment, except as may be required by
Code Section 4980B or Section 601 (et seq.) of ERISA ("COBRA"), or
under any applicable state law, and at the expense of the employee or
the beneficiary of the employee.
(v) Except as otherwise specified in Exhibit N, Seller does not
contribute to, sponsor or otherwise maintain any Employee Benefit Plan
which provides benefits or compensation to any Employee.
(vi) With respect to the multiemployer plan listed on Exhibit N
as Hotel Employees and Restaurant Employees International Union
Pension Plan (the "Multiemployer Plan"), all contributions required by
law or by a collective bargaining or other agreement to be made under
such plan with respect to eligible Employees for all periods through
the Closing Date will have been made by the Closing Date.
(vii) (A) With respect to the Multiemployer Plan, Seller has
delivered to Purchaser true and complete copies of the collective
bargaining agreement pursuant to which Manager is obligated to
contribute and has requested and prior to the expiration of the
Inspection Period will deliver a written estimate of the amount of
potential withdrawal liability of Manager calculated as of the last
valuation date by the Multiemployer Plan. In the event Manager has not
received such a written estimate prior to the expiration of the
Inspection Period, Seller shall have the right to extend the
expiration of the Inspection Period in
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order to obtain such written estimate and the Inspection Period
shall thereafter expire on the day after the date upon which
Manager delivers such written estimate to Purchaser.
(B) Seller and the Controlled Group Members have not
received notice from the Multiemployer Plan that such plan is in
reorganization or is insolvent, that increased contributions may
be required to avoid a reduction in plan benefits or the
imposition of any excise tax, or that such plan intends to
terminate or has terminated.
(C) To Seller's knowledge, the Multiemployer Plan is not a
party to any pending merger or asset or liability transfer or is
subject to any proceeding brought by the PBGC.
(viii) With respect to the Multiemployer Plan, Seller and
Purchaser intend to comply with the requirements of Section 4204 of
ERISA in order that there shall not be a complete or partial
withdrawal from such Multiemployer Plan as a result of the sale under
this Agreement. In accordance therewith and notwithstanding anything
in this Agreement to the contrary, Seller and Purchaser agree to the
following:
(A) After the Closing Date Purchaser shall contribute to the
Multiemployer Plan with respect to the Hotel substantially the
same number of "contribution base units" for which the Seller had
an "obligation to contribute" to the Multiemployer Plan (as those
terms are defined in Sections 4001(a)(ii) and 4212 of ERISA,
respectively) pursuant to the collective bargaining agreement
applicable to the Multiemployer Plan;
(B) Seller agrees that if Purchaser withdraws from the
Multiemployer Plan in a complete or partial withdrawal during the
first five plan years beginning after the Closing, Seller shall
be secondarily liable for any withdrawal liability it would have
had to the Multiemployer Plan (but for this Section 5.01(n) and
Section 4204 of ERISA) if the liability of Purchaser with respect
to the Multiemployer Plan is not paid;
(C) Subject to subsection (C)(1) hereof, (1) Purchaser shall
provide to the Multiemployer Plan for a period of five
consecutive plan years commencing with the first plan year
beginning after the Closing, a bond, if required, issued by a
corporate surety company that is an acceptable surety for
purposes of Section 412 of ERISA, or a letter of credit or an
amount held in escrow, if required, by a bank or similar
financial institution acceptable to the Multiemployer Plan, in an
amount satisfying the requirements of ERISA Section
4204(a)(1)(B);
(2) Purchaser may apply for a variance or exemption
from the bond or escrow requirements of this Subsection (C) and
Section
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4204(a)(1)(B) of ERISA in accordance with the applicable rules of
the Pension Benefit Guaranty Corporation ("PBGC").
(D) Seller and Purchaser further agree:
(1) If Purchaser withdraws from the Multiemployer Plan
before the last day of the fifth consecutive plan year
beginning after the Closing and fails to make any withdrawal
liability payment when due, then Seller shall pay to the
Multiemployer Plan an amount equal to the payment that would
have been due from Seller but for the provisions of ERISA
Section 4204;
(2) If all, or substantially all, of Seller's assets
are distributed, or if Seller is liquidated before the end
of the five year plan period described in (B) above, then
Purchaser shall provide to the Multiemployer Plan on behalf
of Seller to satisfy Seller's obligations under Section
4204(a)(3) of ERISA a bond or letter of credit or an amount
in escrow held in a reputable bank or similar financial
institution acceptable to the Multiemployer Plan, if
required, equal to the present value of the withdrawal
liability Seller would have had but for this Section
5.01(n). If only a portion of Seller's assets are
distributed during such period, then a bond or letter of
credit or an amount in escrow shall be provided to the
Multiemployer Plan by Purchaser on behalf of Seller to
satisfy Seller's obligations under Section 4204(a)(3) of
ERISA in accordance with applicable regulations prescribed
by the PBGC.
(3) Purchaser shall indemnify and hold Seller harmless
for any loss, cost or expense incurred by Seller in the
event Seller has to make payments to the Multiemployer Plan
as a result of Purchaser's withdrawal.
(E) Notwithstanding Seller's and Purchaser's intent to
comply with ERISA Section 4204, if any exemption, limitation or
variance is found to apply to Seller's or Purchaser's withdrawal
liability or the requirements of Section 4204, the agreements of
this Section 5.01(n) may be modified or terminated as mutually
agreed to by Seller and Purchaser; and
(F) Seller and Purchaser are unrelated within the meaning of
ERISA Section 4204.
As used in this Section 5.01(n)(viii) and to the extent
appropriate to comply with the requirements of Section 4204 of ERISA in order
that there shall not be a complete or partial withdrawal from the Multiemployer
Plan as a result of the sale under this Agreement,
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(A) the term "Seller" shall include the Manager, and
(B) the term "Purchaser" shall include the employer of the
Hotel employees after the closing ("Purchaser's Manager").
Purchaser's Manager shall be an entity under common control and
treated as a single employer with Purchaser as determined under
Section 414(b) or (c) of the Code.
(ix) Each Employee Benefit Plan complies in all material respects
with the applicable requirements of ERISA, the Code and any other
applicable law governing such Employee Benefit Plan, and each Employee
Benefit Plan has at all times been properly administered in all
material respects in accordance with all such requirements of law, and
in accordance with its terms and the terms of any applicable
collective bargaining agreement to the extent consistent with all such
requirements of law. Each Employee Benefit Plan which is intended to
be qualified is qualified under Code Section 401(a), has received a
favorable determination letter from the Internal Revenue Service
("IRS") stating that such Employee Benefit Plan meets the requirements
of Code Section 401(a) and that the trust associated with such
Employee Benefit Plan is tax-exempt under Code Section 501(a) and no
event has occurred which would jeopardize the qualified status of any
such plan or the tax exempt status of any such trust under Section
401(a) and 501(a) of the Code, respectively.
(x) No Employee Benefit Plan is subject to Title IV of ERISA,
Code Section 412 or ERISA Section 302, or is a multiemployer plan (as
defined in Section 4001(a)(3) of ERISA) except as indicated on Exhibit
M.
(xi) No Controlled Group Member or any organization which is a
successor or parent corporation of such entities, within the meaning
of ERISA Section 4069(b), has engaged in a transaction described in
ERISA Section 4069.
(xii) The consummation of the transactions contemplated by this
Agreement will not: (A) entitle any current or former Employee of
Seller to severance pay, unemployment compensation or any similar
payment; (B) accelerate the time of payment or vesting, or increase
the amount of any compensation due to, or in respect of, any current
or former Employee of Seller; or (C) result in or satisfy a condition
to the payment of compensation that would, in combination with any
other payment, result in an "excess parachute payment" within the
meaning of Code Section 280(G).
(o) RIGHTS TO PURCHASE. Subject to any renewal, expansion or similar
rights of Space Lessees under the Space Leases, Seller has not granted any
option, right of first refusal or similar right in favor of any person or
entity to purchase or otherwise acquire the Property or any portion thereof
or interest therein.
5.02 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants the following to Seller:
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(a) DUE ORGANIZATION AND AUTHORIZATION. Purchaser is a corporation
duly formed, validly existing and in good standing under the laws of
Illinois. Purchaser has full power and authority to enter into and perform
this Agreement and the transactions contemplated by this Agreement, and
Purchaser has taken all corporate and other action necessary to authorize
Purchaser to make, execute, deliver, and perform this Agreement and the
transactions contemplated by this Agreement.
(b) NO CONFLICT. The execution and delivery of this Agreement and the
closing documents to be executed in connection herewith and the
consummation of the transactions contemplated hereby and thereby, except as
otherwise provided herein, do not require the consent or approval of any
governmental authority, nor shall such execution and delivery result in a
breach or violation of any Legal Requirement or conflict with, breach,
result in a default (or an event which with notice and passage of time or
both will constitute a default) under, or violate any contract or agreement
to which Purchaser or an Affiliate of Purchaser is a party or by which it
or its property is bound.
(c) PENDING LITIGATION. To Purchaser's actual knowledge, except as
described in Exhibit N, there are no actions, suits, or proceedings,
pending or threatened against Purchaser or otherwise affecting the
Purchaser's ability to perform its obligations under this Agreement; which,
if adversely determined might have a material adverse effect on the
Purchaser's ability to perform its obligations under this Agreement. To
Purchaser's actual knowledge, except as noted in Exhibit O, there is no
violation of any Legal Requirement with regard to the Purchaser's
activities.
5.03 BROKERAGE. Seller and Purchaser each represent and warrant to the
other that it has not had any dealings with any broker, agent, or finder
relating to the sale of the Property or the transactions contemplated hereby
other than CB Richard Ellis (the "BROKER"). Each party agrees to indemnify and
hold the other and its Indemnified Parties harmless against and from any and all
Liabilities incurred by the other party arising out of or resulting from any
breach of the foregoing representation and warranty. Seller shall be responsible
for the Broker's commission in an amount of $125,000 when the Property is sold
and Purchaser receives the Purchase Price, and Seller shall indemnify, defend
and hold Purchaser harmless from any claim made by the Broker with respect to
such commission. The provisions of this Section 5.03 shall survive any
termination of this Agreement.
5.04 DURATION OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties contained in this Agreement shall survive the Closing for a period of
one (1) year and shall not merge into any of the closing documents. Any party
seeking to assert liability under representation or warranty set forth in this
Agreement must give notice to the other party in writing prior to the expiration
to such one (1) year period, which notice shall set forth specifically the
representation or warranty allegedly breached and a detailed description of the
alleged breach. In addition, Purchaser shall only be entitled to maintain an
action or claim with respect to a breach of representation or warranty hereunder
if Purchaser has initiated legal proceedings with respect to such claims on or
before the date which is three (3) months after the expiration of such one (1)
year period. All liabilities and obligations of both parties under any
representation or warranty shall lapse and be of no further force or effect with
respect to any
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matter not contained in such a written notice delivered as contemplated above on
or prior to the date that is one (1) year after the Closing Date.
Notwithstanding anything to the contrary contained in this Agreement, in no
event shall any party have any liability under this Agreement for any
prospective or speculative profits or special, consequential or punitive
damages, whether based upon contract, tort, or negligence or in any other manner
arising from this Agreement or the transactions contemplated by this Agreement.
Purchaser will not have any right to bring any action against Seller as a result
of any breach, untruth or inaccuracy of a representation or warranty, unless and
until the aggregate amount of all liability and losses arising out of such
breaches, untruths and/or inaccuracies exceeds $25,000.00 whereupon Seller shall
be liable for such breaches, untruths or inaccuracies to the extent the same
exceed $25,000.00, but the liability of Seller for such representation and
warranty shall not exceed, in the aggregate $1,000,000.00. Purchaser assumes the
risk of liability or losses attributable to any such breaches, untruths or
inaccuracies up to and including $25,000.00.
5.05 SELLER'S INDEMNIFICATION. Seller hereby agrees to indemnify, hold
harmless and defend Purchaser, its members, directors, officers, employees,
agents and representatives from and against any and all loss, damage, claim,
cost and expense and any other liability including, without limitation,
reasonable accountants' and attorneys' fees, charges and costs, incurred by
Purchaser by reason of, or with respect to (i) any material inaccuracy in or
breach of any of the representations, warranties or agreements made by Seller in
the Agreement, (ii) the non-performance of any covenant or obligation to be
performed by Seller hereunder; (iii) Seller's failure to comply with the bulk
transfer laws of any locality or state or its misapplication of the proceeds of
the Purchase Price in fraud of its creditor; or (iv) any liability imposed upon
Purchaser as transferee of the business or operations of Seller or the assets
being transferred under the Agreement, or otherwise relating to the conduct of
the business and operations of Seller prior to the Closing.
5.06 LIMITATION OF SELLER'S REPRESENTATIONS.
(a) In the event Purchaser obtains actual knowledge of any breach of
Seller's representations or warranties under Article 5 prior to Closing,
Purchaser shall give written notice thereof to Seller at or prior to the
Closing. Upon receipt of such notice, Seller may elect to extend the
Closing for as long as sixty (60) days to enable Seller to attempt to cure
the condition that gives rise to such breach or otherwise provide evidence
to Purchaser that the same does not exist. If Seller either does not elect
to extend or, at or prior to the extended Closing, shall be unable to cure
such condition or provide such evidence to Purchaser, then Purchaser shall
elect either (a) to terminate this Agreement on account thereof or (b) to
close the purchase of the Property and pay the Purchase Price in accordance
with the terms of this Agreement, but in the case of an election under
clause (b), Purchaser shall be entitled to indemnification under Section
5.05 on account of such breach subject to the limitations on Seller's
liability under Section 2.03. The provisions of this Section 5.06(a) shall
survive the closing of the purchase of the Property.
(b) Notwithstanding the foregoing, if during the course of Purchaser's
tests and studies during the Inspection Period Purchaser obtains knowledge
based upon review of written information from any reports, documents, test
results, or other written
U-25
materials or written information provided to Purchaser by Purchaser's
consultants, by Seller or any other party, that contain facts or disclosure
of circumstances that are at variance with any of Seller's representations
or warranties, and if Purchaser thereafter consummates Closing, Purchaser
shall be deemed to have accepted such variant facts and circumstances and
Seller's representations and warranties shall be deemed excised or modified
to comport with such variant facts and circumstances.
5.07 GUARANTY OR REPRESENTATIONS AND WARRANTIES.At closing, AEW Partners
III, L.P. and Boykin Hotel Properties, L.P. shall execute a guaranty, limited to
each party's proportionate interest in the Seller, for Seller's obligations
under this Article 5.
ARTICLE VI
CLOSING AND CLOSING DELIVERIES
6.01 CLOSING. The Closing shall take place at the offices of Escrow Company
on the Closing Date, or through customary closing escrow arrangements reasonably
acceptable to Seller and Purchaser by the delivery of documents and funds to
Escrow Company on or prior to the Closing Date.
6.02 ESCROW. This Agreement shall not be merged into any closing escrow
instructions, but any closing escrow instructions shall be deemed auxiliary to
this Agreement and, as between Purchaser and Seller, the provisions of this
Agreement shall govern and control.
6.03 SELLER'S DELIVERIES. At Closing, Seller shall execute (to the extent
required) and deliver, or cause to be delivered, to Purchaser or the Escrow
Company as appropriate:
(a) a special warranty deed (the "DEED") from Seller to Purchaser, or
Purchaser's designee, conveying Seller's interest in the Real Property
subject to only the encumbrances listed in the Title Policy in the form
attached to this Agreement as Exhibit P;
(b) a Bill of Sale transferring to Purchaser all of Seller's right,
title, and interest in and to each and every item of Personal Property to
be transferred in the form attached to this Agreement as Exhibit Q;
(c) an assignment and assumption (the "GENERAL ASSIGNMENT") of all of
Seller's right, title, and interest in, to, and under the Space Leases,
Bookings, Hotel Contracts, Permits (other than Excluded Permits), Books and
Records, Warranties and Miscellaneous Hotel Assets, in the form of Exhibit
R;
(d) the certificate referred to in Section 9.01(b);
(e) an affidavit of Seller in customary form stating that Seller is
not a "foreign person" within the meaning of Section 1445 of the Code in
the form of Exhibit T;
(f) notices to Space Lessees and parties to Hotel Contracts of change
in ownership of the Hotel, if requested by Purchaser;
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(g) the Preliminary Closing Statement;
(h) any required real estate transfer tax declarations or similar
documentation required to evidence the payment of any tax imposed by any
state, county, or municipality together with any change of ownership
statements required under applicable law;
(i) copies of such articles of incorporation, organization, or
formation; agreements or certificates of partnership; resolutions;
authorizations; bylaws; certifications; or other corporate, partnership,
limited liability company, or trust documents or agreements relating to
Seller as the Title Company or Purchaser shall reasonably require in
connection with this transaction;
(j) a certificate or registration of title for any owned motor vehicle
or other Personal Property which requires such certification or
registration, conveying such vehicle or such other Personal Property to
Purchaser;
(k) evidence satisfactory to Purchaser that the Management Agreement
has been terminated and that there are no continuing obligations
thereunder;
(l) to the extent not previously delivered to Purchaser, all originals
(or copies if originals are not available), of the Space Leases, Books and
Records, Permits, written employment contracts, hotel contracts, keys and
lock combinations in the Seller's possession or control;
(m) the original of any estoppel certificate obtained in connection
with any Space Lease or reciprocal easement agreement;
(n) certificate updating all Exhibits to this Agreement;
(o) the guaranty described in Section 5.07; and
(p) an assignment and assumption (the "Collective Bargaining Agreement
Assumption") of the right, title and interest in, to and liability under,
the Collective Bargaining Agreements.
6.04 PURCHASER'S DELIVERIES. At the Closing, Purchaser shall execute (to
the extent required) and deliver, or cause to be delivered, to Seller or the
Escrow Company as appropriate:
(a) the Purchase Price required to be paid pursuant to Section 3.01;
(b) the Bill of Sale;
(c) the General Assignment;
(d) the certificate referred to in Section 8.01(b);
(e) the Collective Bargaining Assignment;
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(f) the Preliminary Closing Statement;
(g) copies of such articles of incorporation, organization, or
formation; agreements or certificates of partnership; resolutions;
authorizations; bylaws; certifications; or other corporate, partnership, or
trust documents or agreements relating to Purchaser as Seller or the Title
Company shall reasonably require in connection with this transaction; and
(h) any required real estate transfer tax declarations or similar
documentation required to evidence the payment of any tax imposed by any
state, county, or municipality together with any change of ownership
statements required under applicable law.
6.05 EXPENSES.
(a) Seller shall pay the following expenses: (i) state and county
transfer taxes, deed stamps, sale taxes and similar taxes and charges
payable to any governmental authority in the connection with the transfer
of the Property, (ii) fifty percent (50%) of all closing Escrow fees; (iii)
Seller's legal fees and expenses, (iv) the cost of the Survey, (v) charges
for an extended coverage Title Policy (but not endorsements) and (vi) the
fees for the recording of any discharge of Seller Encumbrances and any
other encumbrances required to be discharged by Seller at or before
Closing.
(b) Purchaser shall pay the following expenses: (i) the cost of any
endorsements to the Title Policy; (ii) the cost of any reinsurance of, and
endorsements to, the Title Policy; (iii) City of Chicago transfer taxes,
(iv) fifty percent (50%) of all closing Escrow fees; (v) all costs and
expenses incurred in connection with the transfer of any transferable
Permits, warranties, or licenses in connection with the ownership or
operation of the Property; (vi) all costs and expenses associated with
Purchaser's financing including but not limited to, all recordation tax
therein, if any; (vii) the recordation tax and fee for the recording of the
Deed; and (viii) Purchaser's legal fees and expenses.
(c) Any other ordinary and usual closing costs and expenses, except as
expressly provided in this Agreement, in connection shall be allocated
between Purchaser and Seller in accordance with the customary practice in
the county where the Property is located.
(d) Purchaser shall receive a credit of $500,000 for the removal of
asbestos related materials that Purchaser discovered during its diligence.
6.06 CONCURRENT TRANSACTIONS. All documents or other deliveries required to
be made by Purchaser or Seller at Closing, and all transactions required to be
consummated concurrently with Closing, shall be deemed to have been delivered
and to have been consummated simultaneously with all other transactions and all
other deliveries, and no delivery shall be deemed to have been made, and no
transaction shall be deemed to have been consummated, until all deliveries
required by Purchaser and Seller shall have been made, and all concurrent or
other transactions shall have been consummated.
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6.07 POSSESSION.
Possession of the Property shall be delivered at Closing. Excluded Assets shall
be removed from the Hotel by Seller, at its expense, on or before the Closing
Date. Seller, at its sole cost and expense, shall repair all damage caused by
such removal but shall have no obligation to replace any Excluded Asset so
removed.
6.08 RESTAURANT SPACE.
(a) Subject to the provisions of 6.08(b) below, it shall be a
condition to the obligation of Purchaser and Seller to perform hereunder
that at Closing the Restaurant Space is delivered (x) with all mechanics
liens discharged or bonded over and (y) either:
(i) free and clear of the Restaurant Lease and any other
leasehold interest; or
(ii) subject to a lease with an Approved Operator (as defined
below), as lessee, having economic terms, operating standards and
other material provisions consistent with or no less favorable than
the Restaurant Lease, provided that such Approved Operator must have
commenced operation of a restaurant in the Restaurant Space on or
before the Closing Date.
As used herein, the term an Approved Operator shall mean an operator that
does not operate any other restaurant or establishment within a six block
radius of the Hotel with the same concept as contemplated for the
Restaurant Space (unless accepted specifically by Buyer) and is: (i) an
entity controlled by any one of the operators, or the principal(s) of one
of the operators listed on Exhibit V attached hereto and that meets the
operating standards set forth in the Restaurant Lease; (ii) an operator
that can meet the operating standards set forth in the Restaurant Lease and
has sufficient financial capacity and strength, as acceptable to Buyer; or
(iii) any other operator proposed by Seller, subject to Buyer's consent,
not to be unreasonably withheld or delayed.
(b) Seller shall have the right to extend the Closing Date for a
period of up to ninety (90) days to enable Seller to satisfy the condition
precedent set forth in Section 6.08(a). In the event that (i) Seller
extends the Closing for such period and at the expiration of such period is
unable to satisfy the condition in Section 6.08(a) or (ii) Seller is unable
to satisfy the conditions set forth in Section 6.08(a) above and does not
elect to extend the Closing Date, in either event, (x) the Closing shall
take place on the Closing Date, (y) the Purchase Price shall be reduced by
$2,400,000 and (z) Purchaser shall accept the Property with the Restaurant
Space in such condition as Seller can deliver at Closing and shall
indemnify Seller for any loss, expense, cost or liability associated in
connection with the Restaurant Space and the Restaurant Lease including,
without limitations any employee or union matters related thereto.
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ARTICLE VII
ADJUSTMENTS AND PRORATIONS-CLOSING STATEMENTS
7.01 ADJUSTMENTS AND PRORATIONS. The following matters and items shall be
apportioned between the parties or, where appropriate, credited in total to a
particular party, as of the Cut-off Time as provided below:
(a) ACCOUNTS RECEIVABLE; ACCOUNTS PAYABLE; ROOM REVENUES. Purchaser is
not acquiring Accounts Receivable, and all Accounts Receivable shall remain
the property of Seller. Purchaser shall promptly remit any funds received
by Purchaser in payment of such Accounts Receivable arising prior to the
Cut-off Time. Seller shall pay at or prior to Closing all accounts payable
that are more than thirty (30) days old as of Closing and all other
accounts payable shall be apportioned and prorated and adjusted as of the
Cut-off Time. At Closing Seller shall receive a (i) credit in an amount
equal to all charges accrued to the open accounts of any guests or
customers staying at the Hotel as of the Cut-off Time for all room nights
up to (but not including) the night during which the Cut-off Time occurs
and (ii) fifty percent (50%) of all charges for the room night which
includes the Cut-off Time, in each case less amounts payable on account of
third party collection costs (e.g. fees retained by credit card companies,
banks or other collection companies, travel agent commissions and other
third party commissions), and Purchaser shall be entitled to retain all
deposits made and amounts collected with respect to such charges. Revenue
from the Hotel attributable to food and beverage (including alcoholic
beverages), if any, and other sales or services through the close of
business on the night immediately preceding the Closing Date shall belong
to Seller (such revenue to be determined based on completion of the night
auditor's run on the night of the Cut-Off Time). Thereafter, revenue from
the Hotel attributable to food and beverage and other sales or services
shall belong to Purchaser. Each of Purchaser and Seller shall be
responsible for the payment of any sales and/or hotel/motel occupancy taxes
collected or otherwise due and payable in connection with the revenue
allocated to such party under this Section 7.01(a) and shall indemnify,
defend and hold the other party harmless from and against any and all
Liabilities suffered or incurred as a result of the failure to pay such
taxes.
(b) TAXES AND ASSESSMENTS. All ad valorem taxes, special or general
assessments and real estate taxes, assessments under the exceptions listed
in the Title Policy, personal property taxes, water and sewer rents, rates
and charges, vault charges, canopy permit fees, and other permit fees shall
be prorated (accrual basis) as of the Cut-off Time provided, however, that
if any taxes or assessments relating to the period prior to the Closing are
paid in installments, then Seller shall pay on or before Closing Date any
remaining installments thereof. If the amount of any such item is not
ascertainable on the Closing, the adjustment therefor shall be based on the
most recent available bill and assessment notice and shall be reprorated
upon receipt of the actual bill, as provided in this subsection (b), which
obligation shall survive the Closing Date and not be extinguished as of the
Cut-Off Time.
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(c) UTILITY CONTRACTS. Telephone and telex contracts and contracts for
the supply of heat, steam, electric power, gas, lighting and any other
utility service shall be prorated as of the Cut-off Time, with Seller
receiving a credit for each deposit, if any, made by Seller as security
under any such public service contracts if the same is transferable and
provided such deposit remains on account for the benefit of Purchaser.
Where possible, readings as of the Cut-off Time (or as close thereto as
practicable) will be secured for all utilities on the Closing Date.
(d) HOTEL CONTRACTS. Subject to Section 7.01(a) with respect to
accounts payable, any amounts prepaid, payable or accrued under any Hotel
Contracts shall be prorated as of the Cut-off Time. Notwithstanding the
foregoing, Purchaser shall pay or credit Seller only for those Hotel
Contract prepaid expenses that are in the categories listed in Exhibit U
attached hereto, which Exhibit U lists prepaid expenses as of the date
hereof and there shall be no proration on account of any other prepaid
expenses.
(e) SPACE LEASES. Any rents and other amounts payable under the Space
Leases, in each case as and when actually received, shall be prorated as of
the Cut-off Time between Seller and Purchaser. Purchaser shall receive a
credit for all prepaid rents and other amounts for periods from and after
the Closing Date and all security deposits held by Seller under the Space
Leases which are not transferred to Purchaser, and Purchaser thereafter
shall be obligated to refund or apply such deposits in accordance with the
terms of such Space Leases. Rents and other amounts payable under the Space
Leases which are delinquent as of the Closing Date shall not be pro rated
as of the Cut-off Time. To the extent that Purchaser receives rents or
other payments payable under the Space Leases on or after the Closing Date,
such payments shall be applied first towards the payment in full of all
rents and other amounts due to Purchaser with respect to periods following
the Cut-off Time, with the balance applied to delinquent rents or other
amounts due to Seller for the period prior to the Cut-off Time, with
Seller's share thereof being promptly delivered to Seller by Purchaser.
Purchaser shall use commercially reasonable efforts to collect any such
delinquent rents after the Closing. With respect to any Space Leases which
provide for the payment of percentage rent by the tenant thereunder, the
parties shall use good faith efforts to prorate such percentage rent as of
the Closing and, within twenty (20) days after Purchaser completes the
annual reconciliation of such percentage rent payments with each such
tenant, the parties agree to reprorate percentage rent based on the actual
percentage rent paid by such tenant, and the Party in whose favor such
original proration was made shall refund such difference to the other Party
promptly thereafter.
(f) LICENSE FEES. Fees paid or payable for Permits (other than
Excluded Permits) shall be prorated as of the Cut-off Time.
(g) BOOKINGS DEPOSITS AND MISCELLANEOUS HOTEL MATTERS. Purchaser shall
receive a credit for advance payments or deposits, if any, made pursuant to
any Bookings that relate to a period after the Cut-Off Time.
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(h) EMPLOYMENT. Except as provided herein below, Seller shall be
responsible for, and when due and payable as required by law, shall pay all
Compensation to any Hotel Employee through the Cut-Off Time.
(i) SUPPLIES AND CONSUMABLES. Seller shall receive a credit at Closing
to the extent of the value of all unopened Supplies and Consumables at the
Hotel as of Closing (valued at Seller's actual cost).
(j) OTHER. Such other items as are expressly provided to be prorated
or otherwise adjusted or credited for in other this Agreement shall be so
prorated, adjusted or credited.
7.02 PAYMENT. Any net credit due to Seller as a result of the adjustments
and prorations under Section 7.01 shall be paid to Seller in cash at the time of
Closing. Any net credit due to Purchaser as a result of the adjustments and
prorations under Section 7.01 shall be credited against the Purchase Price at
the time of Closing.
7.03 CLOSING STATEMENTS.
(a) PREPARATION. Each party shall cause its designated representatives
to enter the Hotel only at reasonable times and without unreasonably
interfering with operations, both before and after the Closing Date, for
the purpose of making such inventories, examinations, and audits of the
Hotel, and of the Books and Records, as they deem necessary to make the
adjustments and prorations required under this Article VII, or under any
other provisions of this Agreement. Based upon such inventories,
examinations, and audits, two (2) Business Days prior to the Closing, the
representatives of the parties shall jointly prepare a preliminary closing
statement (the "PRELIMINARY CLOSING STATEMENT") which shall show the net
amount due either to Seller or Purchaser as a result thereof, and such net
amount will be added to, or subtracted from the payment of the Purchase
Price to be paid to Seller pursuant to Section 3.01 hereof. Within thirty
(30) days following the Closing Date, Seller and Purchaser shall agree on a
final closing statement (the "FINAL CLOSING STATEMENT") setting forth the
final determination of all items to be included on the Closing Statement
(subject to any subsequent adjustments for percentage rent under any Space
Lease pursuant to Section 7.01(e)). The net amount due Seller or Purchaser,
if any, by reason of adjustments to the Preliminary Closing Statement as
shown in the Final Closing Statement, shall be paid in cash by the party
obligated therefor within ten (10) days following the date of the Final
Closing Statement.
(b) DISPUTES. In the event the representatives of the parties are
unable to reach agreement with respect to preparation of the Preliminary
Closing Statement then, except as hereinafter provided, the disputed amount
shall be held in a joint order Escrow, pending agreement of the parties or
a determination pursuant to Section 7.03(b), and the Closing shall occur as
scheduled. Purchaser shall be required to deposit in the Escrow any
additional sum of the disputed amount which it may be required to pay and
Seller shall be required to deposit in the Escrow any sum of the disputed
amount which it may be required to credit or pay to Purchaser. Any such
dispute shall survive and be subject
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to later resolution pursuant to this Section 7.03. In the event the
representatives of the parties are unable to reach agreement with respect
to either the Preliminary Closing Statement or the Final Closing Statement,
the parties shall submit their dispute to a firm of independent certified
public accountants of recognized standing in the hotel industry mutually
acceptable to Seller and Purchaser. If Seller and Purchaser cannot agree on
such firm of independent certified public accounts within five (5) Business
Days after notice from either party requesting such agreement, then such
dispute shall be resolved by binding arbitration, and either party may
request that the then president or managing director of the New York Office
of the American Arbitration Association (or any successor organization, or
if no successor organization exists, an organization composed of persons of
similar qualifications) to appoint an independent individual arbitrator
with a minimum of ten (10) years' personal experience directly relevant to
the purchase and sale of assets similar to the Hotel, and the determination
of such arbitrator shall be final and binding on Seller and Purchaser and
shall be enforceable in any court of competent jurisdiction. The fees and
expenses of the arbitrator shall be borne by the non-prevailing party, as
determined by the arbitrator.
(c) PERIOD FOR RECALCULATION. Notwithstanding the foregoing, if at any
time within six (6) months following the Closing Date, either party
discovers any items which should have been included in the Final Closing
Statement but were omitted therefrom, or discovers any items that were
improperly prorated in the Final Closing Statement, then such items shall
be adjusted in the same manner as if their existence or such improper
proration had been known at the time of the preparation of the Final
Closing Statement. The foregoing limitations shall not apply to any items
which, by their nature, cannot be finally determined within the periods
specified including, without limitation, real estate taxes and adjustments
following such six (6) month period pursuant to Section 7.01(e) with
respect to percentage rent under Space Leases.
ARTICLE VIII
CONDITIONS TO SELLER'S OBLIGATIONS
8.01 CONDITIONS. Seller's obligation to close the transaction contemplated
by this Agreement shall be subject to the satisfaction of each of the following
conditions, any one or more of which may be waived by Seller in writing:
(a) PURCHASER'S COMPLIANCE WITH OBLIGATIONS. Purchaser shall have
complied with all material Obligations required by this Agreement to be
complied with by Purchaser.
(b) TRUTH OF PURCHASER'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Purchaser contained in this Agreement
were true in all material respects when made, and are true in all material
respects on the Closing Date, and Seller shall have received a certificate
to that effect signed by Purchaser. In the event any of the Purchaser's
representations become untrue during the term of the Agreement, Seller may
terminate this Agreement without thereby waiving any right or remedy.
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8.02 FAILURE OF SELLER CLOSING CONDITION. Subject to the provisions of
Section 12.01, if any closing condition set forth in Section 8.01(a) and Section
8.01(b) is not satisfied at Closing and provided all conditions of Article IX
have been satisfied by Seller, then Seller shall have the right either (i) to
terminate this Agreement by providing written notice to such effect to
Purchaser, in which case the Deposit shall be disbursed to Seller in accordance
with Article XVI as Seller's sole remedy at law or in equity, and the parties
shall have no further rights or obligations under this Agreement, or (ii) to
waive such closing condition at or prior to Closing.
ARTICLE IX
CONDITIONS TO PURCHASER'S OBLIGATIONS
9.01 CONDITIONS. Purchaser's obligation to close the transaction
contemplated by this Agreement shall be subject to the satisfaction of each of
the following conditions, any one or more of which may be waived by Purchaser in
writing:
(a) SELLER'S COMPLIANCE WITH OBLIGATIONS. Seller shall have complied
with all material Obligations required by this Agreement to be complied
with by Seller.
(b) TRUTH OF SELLER'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Seller contained in this Agreement were
true in all material respects when made, and continue to be true in all
material respects on the Closing Date, and Purchaser shall have received a
certificate to that effect signed by Seller. If the representations and
warranties of Seller contained in this Agreement are no longer true in all
material respects as of Closing due to changes in fact since the date of
this Agreement, then Seller shall so indicate in its update certificate
provided at Closing, and any such changes shall be subject to the approval
of Purchaser in its reasonable discretion.
9.02 FAILURE OF PURCHASER CLOSING CONDITION. Subject to the provisions of
Section 12.01, if any closing condition set forth in Section 9.01 is not
satisfied at Closing, then Purchaser shall have the right either (i) to
terminate this Agreement by providing written notice to such effect to Seller,
in which case, subject to the provisions of Section 3.01(d), the Deposit shall
be refunded to Purchaser or (ii) to waive such closing condition at or prior to
Closing. Notwithstanding the foregoing, if the failed closing condition is
reasonably susceptible to cure by Seller, then Seller shall have the one time
right to extend the Closing Date for up to thirty (30) days in order to allow
such cure by giving notice to such effect to Purchaser on or before the
scheduled Closing Date, which notice shall include a covenant of Seller to use
all commercially reasonable diligent efforts to effect such cure.
ARTICLE X
ACTIONS AND OPERATIONS PENDING CLOSING
10.01 ACTIONS AND OPERATIONS PENDING CLOSING. Seller agrees that at all
times prior to the Closing Date:
(a) Subject to conditions beyond Seller's reasonable control (which
the parties agree shall not include the unavailability of funds), during
the pendency of this
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Agreement the Hotel will continue to be operated and maintained
substantially in accordance with Present Standards including, without
limitation, (i) maintaining the inventories of Fixtures and Tangible
Personal Property, Inventory, Consumables, Supplies and Miscellaneous Hotel
Assets, (ii) performing maintenance and repairs to the Improvements and
tangible Personal Property; (iii) implementing the current marketing
program for the Hotel; (v) maintaining the level of customer service at the
Hotel; (vi) maintaining the level of security at the Real Property; and
(vii) continuing to take all Bookings in the ordinary course of business.
Without limiting the foregoing, Seller shall perform its obligations under,
and otherwise comply with, the Space Leases, the Hotel Contracts, the
Permits, any license agreements for IT Systems, the Liquor License, the
Management Agreement, the Bookings and Legal Requirements, in each case in
all material respects; provided, however, that the Seller shall have the
right to exercise any of its rights under any of the foregoing. From the
date of this Agreement until the Closing or earlier termination of this
Agreement, Seller shall promptly provide Purchaser of any written notices
or complaints Seller receives concerning the presence of toxic mold or
fungi at the Real Property or other written claims made with respect to
environmental matters at the Real Property.
(b) From and after the Opening of Escrow, Seller will not enter into
any new Hotel Contract or Space Lease, or cancel, modify, or renew any
existing Hotel Contract or Space Lease or Permitted Exception, without the
prior written consent of Purchaser, which Purchaser shall not unreasonably
withhold, condition or delay prior to the expiration of the Inspection
Period but which Purchaser may withhold in its sole and absolute discretion
after the expiration of the Inspection Period; provided, however, that
Purchaser's consent shall not be required for any Hotel Contract entered
into with a third party prior to the expiration of the Inspection Period as
long as (i) such Hotel Contract is cancelable upon not more than thirty
(30) days notice without penalty or premium payment and (ii) Seller
promptly gives notice to Purchaser of such Hotel Contract. If Purchaser
fails to respond to a request for consent within ten (10) days after
receipt of such request, such consent shall be deemed given.
(c) Seller shall have the right, without notice to or consent of
Purchaser, to make Bookings in the ordinary course of business, at no less
than the Hotel's standard rates (including customary discounted rates as
long as such discounted rates are bona fide third party Bookings).
(d) Seller shall use commercially reasonable efforts to preserve in
force all existing Permits and to cause all those expiring on or before the
Closing Date to be renewed prior to the Closing Date. If any such Permit
shall be suspended or revoked, Seller shall promptly notify Purchaser and
shall take commercially reasonable measures to cause the reinstatement of
such Permit.
(e) Seller will maintain in effect all policies of casualty and
liability insurance, or similar policies of insurance, with the same limits
of coverage which it now carries with respect to the Hotel.
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(f) Seller shall not remove any Fixtures and Tangible Personal
Property from the Property (other than in the ordinary course of business
in which case adequate replacements shall have been made).
(g) Seller shall not alter the terms and conditions of the employment
of any Employees, except in accordance with past practice consistently
applied.
(h) Seller shall not (i) create or allow any lien or similar
encumbrance to be placed against the Property, and shall use commercially
reasonable efforts to promptly discharge any such encumbrance that may
arise, (ii) grant or enter into any easement, restrictive covenant or
similar agreement affecting title to the Real Property without Purchaser's
prior written consent in its sole but good faith discretion, or (iii)
cancel, modify, or renew any existing Permitted Exception without
Purchaser's prior written consent in its sole but good faith discretion.
ARTICLE XI
CASUALTIES AND TAKINGS
11.01 CASUALTIES.
(a) If any damage to the Property shall occur prior to the Closing
Date by reason of fire, windstorm, earthquake, hail, explosion or other
casualty, and if the cost of repairing such damage will equal or exceed Two
Million Dollars ($2,000,000), Purchaser may elect to (i) terminate this
Agreement by giving written notice to Seller, in which event, subject to
the provisions of Section 3.01(d), the Deposit shall be returned to
Purchaser and neither party shall have any further Obligations or liability
whatsoever to the other hereunder or (ii) receive an assignment of all of
Seller's rights to any insurance proceeds and claims (including business
interruption proceeds for the period after Closing) relating to such damage
and acquire the Property without any adjustment in the Purchase Price in
connection therewith.
(b) If the cost of repairing such damage will not exceed Two Million
Dollars ($2,000,000), the transactions contemplated hereby shall close
without any adjustment in the Purchase Price in connection therewith and
Purchaser shall receive an assignment of all of Seller's rights to any
insurance proceeds or claims (including business interruption proceeds for
any period after the Closing Date) except those proceeds allocable to costs
incurred by, and lost profits of Seller for the period prior to Closing;
provided, however, that the Purchaser shall receive a credit against the
Purchase in the amount of any deductible or other uninsured amount with
respect to any such damage.
11.02 TAKINGS. If, prior to the Closing Date, all or any portion of the
Real Property is taken by eminent domain or by an act of governmental authority,
Seller shall promptly give Purchaser written notice thereof, and the following
shall apply:
(a) If a material part of the Real Property is taken, either party
may, within five (5) days after the giving of Seller's notice, by written
notice to the other, elect to terminate this Agreement. In the event that
either party shall so elect, subject to the
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provisions of Section 3.01(d), the Deposit shall be returned to Purchaser
whereupon this Agreement shall terminate and neither party hereto shall
have any further rights or obligations hereunder.
(b) If a material part of the Real Property is taken but neither party
elects to terminate this Agreement pursuant to paragraph (a) above, or if
an immaterial part of the Real Property is taken by an act of governmental
authority, neither party shall have any right to terminate this Agreement,
and the parties shall nonetheless proceed to the Closing in accordance with
this Agreement, without any abatement of the Purchase Price or any
liability or obligation on the part of Seller by reason of such taking,
provided, however, that Seller shall, at the Closing, (i) assign and turn
over, and Purchaser shall be entitled to receive and keep, the net proceeds
of any award or other proceeds of such taking which may have been collected
by Seller as a result of such taking, less any portion thereof applied to
the cost of repairs necessitated by such taking and made by Seller prior to
the Closing, or (ii) if no award or other proceeds shall have been
collected, deliver to Purchaser an assignment of Seller's right to any such
award or other proceeds which may be payable to Seller as a result of such
taking and all claims related thereto, less an amount equal to the cost of
any repairs necessitated by such taking and made by Seller prior to the
Closing, which amount shall be paid to Seller by Purchaser at the Closing.
(c) For the purposes hereof, a "material part" shall be deemed to mean
any taking (i) which causes a reduction in the size of any of the buildings
comprising the Real Property or materially interferes with the present use
and operation of any of the buildings comprising the Real Property (ii)
which results in the elimination of the sole or any required means of legal
ingress and/or egress from the Real Property, to public roads, with no
comparable, convenient, legal substitute ingress and/or egress being
available, or (iii) which results in the elimination of any parking on the
Land unless Purchaser concludes in its sole but good faith discretion that
such parking is not required for the continued operation of the Hotel.
ARTICLE XII
ADDITIONAL COVENANTS
12.01 LIQUOR LICENSE; OTHER PERMITS; CONSENTS AND CLOSING CONDITIONS.
Purchaser and Seller shall use diligent, good faith efforts to effect the
transfer of the existing Liquor License to Purchaser or its designee on the
Closing Date or to enable Purchaser or its designee to obtain a new Liquor
License effective on the Closing Date. Purchaser agrees to pay all fees and
other amounts payable to any governmental authority in connection with the
transfer of the existing Liquor License. If Seller engages counsel in connection
with the transfer of the existing Liquor License, Purchaser shall be responsible
for the fees of such counsel. As promptly as practicable following the date of
this Agreement, Purchaser or its designee shall complete, execute and file with
the applicable liquor licensing authority all necessary applications for
transfer of the Liquor License or the issuance of a new Liquor License.
Purchaser specifically acknowledges and agrees that the transfer of the Liquor
License to Purchaser on the Closing Date shall not be a condition to Purchaser's
obligation to close the transaction contemplated under this Agreement. Purchaser
and Seller shall use diligent, good faith efforts to effect the
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transfer of the other Permits to Purchaser (other than the Excluded Permits) and
to enable Purchaser to obtain new Permits to replace any Excluded Permits.
Purchaser agrees to pay all out-of-pocket third party fees, charges, and related
costs in connection with the transfer of such Permits. Seller and Purchaser
shall use diligent, good faith efforts to obtain any other consent required to
be obtained from any third party in order to effect the transactions
contemplated by this Agreement including, without limitation, any consent
required for the assignment of any license for the use of any of the IT Systems
or any Hotel Contract; provided, however, that Seller shall not be required to
incur any unreimbursed material out-of-pocket costs in connection with obtaining
any such consent. It is understood that, except as otherwise provided in this
Agreement, obtaining any such consent is not a condition precedent to the
Closing and the failure to obtain any such consent shall not entitle Purchaser
to terminate this Agreement or defer the Closing Date or seek any other remedy.
Each of Seller and Purchaser agrees to act in good faith and to use commercially
reasonable efforts to satisfy all conditions to Closing set forth in Article
VIII and IX, as applicable.
12.02 GUEST BAGGAGE. All baggage, boxes and similar items of guests who are
still in the Hotel on the Closing Date, which has been checked with or left in
the care of Seller shall be inventoried, sealed, and tagged jointly by Seller
and Purchaser on the Closing Date. Purchaser shall be responsible for and hereby
indemnifies Seller and its Indemnified Parties against any Liabilities in
connection with such baggage arising out of the acts of omissions of Purchaser
or its Affiliates (or any of their employees or agents) after the Closing Date.
Seller hereby indemnifies Purchaser and its Indemnified Parties against any
Liabilities in connection with baggage arising out of the acts or omissions of
Seller or its Affiliates (or any of their employees or agents) prior to the
Closing Date. The provisions of this Section 12.02 shall survive Closing.
12.03 SAFE DEPOSITS. Immediately after the Closing, Seller shall send
written notice to guests or tenants or other persons who have safe deposit
boxes, if any, advising of the sale of the Hotel to Purchaser and requesting
immediate removal of the contents thereof or the removal thereof and concurrent
re-deposit of such contents pursuant to new safe deposit agreements with
Purchaser. Seller shall have a representative present when the boxes are opened,
in the presence of a representative of the Purchaser. Any property contained in
the safe deposit boxes after such re-deposit shall be the responsibility of
Purchaser, and Purchaser agrees to indemnify and hold harmless Seller and its
Indemnified Parties from and against any Liabilities arising out of or with
respect to such property. Upon Closing, Seller shall deliver to Purchaser all
keys in Seller's possession or control for all safe deposit boxes not then in
use and a list of all safe deposit boxes which are then in use but where the
contents have not been removed and re-deposited as set forth above, including
the name and room number of such depositor. Seller and Purchaser shall continue
to use reasonable efforts to cause such depositors to remove the contents and
re-deposit such contents pursuant to new safe deposit agreements with Purchaser
as set forth above. Seller shall continue to be responsible for, and shall
indemnify and hold harmless Purchaser and its Indemnified Parties from and
against any Liabilities arising out of or with respect to the contents of any
safe deposit box prior to the time that the contents thereof are removed and
re-deposited pursuant to a new safe deposit agreement with Purchaser as set
forth above.
12.04 TAX APPEAL PROCEEDINGS. Seller shall be entitled to receive and
retain the proceeds from any tax appeals or protests for tax fiscal years ending
prior to the tax fiscal year ending in which the Closing Date occurs. Seller
shall continue to process any pending appeals or
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protests with respect to the tax fiscal year in which the Closing Date occurs,
and Purchaser shall have the right to participate therein with counsel of its
choosing at Purchaser's cost and expense. Seller shall have no right after the
date of this Agreement to file or otherwise initiate any appeal or protest with
respect to the property taxes on the Property for the tax fiscal year in which
the Closing Date occurs, and only Purchaser shall have the right to file or
otherwise initiate any such appeal or protest after the date hereof. Any net
proceeds obtained from any such proceeding with the respect to the tax fiscal
year in which the Closing Date occurs, after payment of attorneys' fees and
other costs associated with such process, will be prorated between the parties,
when received, as of the Closing Date.
12.05 TERMINATION OF MANAGEMENT AGREEMENT. Seller shall terminate the
Management Agreement on or before Closing at its sole cost and expense.
ARTICLE XIII
DEFAULTS AND REMEDIES
13.01 SELLER'S REMEDIES. If Purchaser fails to perform its material
obligations under this Agreement for any reason except a default by Seller or
the failure of any condition precedent to Purchaser's obligations, Seller shall
be entitled as its sole remedy at law or in equity to terminate this Agreement
and receive the Deposit and interest thereon as liquidated damages and not as a
penalty, in full satisfaction of any claims against Purchaser. Seller and
Purchaser agree that the Seller's damages resulting from Purchaser's default are
difficult to determine, and the amount of the Deposit is a fair estimate of
those damages.
13.02 PURCHASER'S REMEDIES. If Seller fails to perform its obligations
under this Agreement for any reason except the failure of any condition
precedent to Seller's obligations under this Agreement or Purchaser's default of
its material obligations, then Purchaser's sole remedies shall be: (a) to
terminate this Agreement by giving Seller written notice of such election prior
to or at Closing, whereupon (i) subject to the provisions of Section 3.01(d),
the Escrow Company shall promptly return to Purchaser the Deposit, and (ii)
Purchaser shall be entitled to payment by Seller of all actual out-of-pocket
costs incurred by Purchaser in connection with the transaction contemplated by
this Agreement; (b) to obtain a court order for specific performance; or (c) to
waive the default and close.
ARTICLE XIV
EMPLOYEES
At Closing, Seller or Seller's Manager shall terminate or cause to be
terminated the employment of all Employees. Purchaser shall employ from and
after the Closing Date such of the Employees as Purchaser determines, in its
sole and absolute discretion, on such terms and conditions as Purchaser may
determine ("NEW HIRES"). Nothing in this provision shall be construed to limit
Purchaser's right to terminate, at Purchaser's sole cost and expense, the New
Hires subsequent to the Closing Date, subject to the requirements of applicable
law and the Collective Bargaining Agreements that Purchaser has agreed to
assume. Purchaser agrees to indemnify and hold Seller harmless from and against
any violations of the Worker Adjustment
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and Retraining Notification Act, 29 USC Section 2101 et seq., ("WARN ACT") or
the Illinois Worker Adjustment and Retraining Notification Act, 820 ILCS65
("ILLINOIS WARN") arising as a result of its actions subsequent to the Closing
Date. No employees shall be transferred. Any New Hires hired by the Purchaser
shall in all respects be and remain "at will" employees, and Purchaser shall
have the right to dismiss such employees at any time in its sole discretion and
Seller and Seller's Manager each hereby acknowledges and agrees that none of its
respective employee benefit programs are being assumed or continued by
Purchaser. Nothing in this Section 14.01 is intended to, or shall, confer on any
person or entity not a party of this Agreement any rights or benefits. Seller
shall, upon termination of the New Hires as set forth above, cause Seller's
Manager to pay the employees all earned wages, vacation pay, if any, or any
other compensation payable to the New Hires under federal and Illinois wage and
hour laws, that is due and payable.
ARTICLE XV
MISCELLANEOUS
15.01 NOTICES. Except as otherwise provided in this Agreement, all notices,
demands, requests, consents, approvals, and other communications (each a
"NOTICE", collectively "NOTICES") required or permitted to be given under this
Agreement, or which are to be given with respect to this Agreement, shall be in
writing and shall be personally delivered, sent by registered or certified mail,
postage prepaid and return receipt requested, by overnight express courier,
postage prepaid, or by facsimile transmission with a confirming copy sent by
registered or certified mail or overnight express courier as set forth above, in
each case addressed to the party as designated below:
If intended for Seller, to: Boykin Chicago L.L.C.
c/o AEW Capital Management, L.P.
World Trade Center East
Two Seaport Lane
Attention: James Luchars
Facsimile No.: (617) 261-9555
with a copy to: Boykin Lodging Company
Guildhall Building
45 West Prospect Avenue
Suite 1500
Cleveland, Ohio 44115
Attention: Andrew C. Alexander, Esq.
Facsimile No.: (216) 430-1201
With a copy to: Goodwin Procter, LLP
Exchange Place
Boston, Massachusetts 02109
Attention: Samuel L. Richardson, Esq.
Facsimile No.: (617) 227-8591
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If intended for Purchaser, to: The Falor Companies, Inc.
980 North Michigan Avenue
Suite 1400
Chicago, Illinois 60611
Attention: Robert D. Falor
Facsimile No.: (312) 214-4905
with a copy to: Piper Rudnick LLP
203 North LaSalle Street
Suite 1800
Chicago, Illinois 60601
Attention: Donald A. Shindler, Esq.
Facsimile No.: (312) 630-5344
Notice mailed by registered or certified mail shall be deemed received by the
addressee three (3) days after mailing thereof. Notice personally delivered
shall be deemed received when delivered or refused. Notice mailed by overnight
express courier shall be deemed received by the addressee on the next Business
Day after mailing thereof. Notice transmitted by facsimile shall be deemed
received by the addressee upon sender's receipt of confirmation thereof. Either
party may at any time change the address for notice to such party by mailing a
Notice as aforesaid.
15.02 SURVIVAL. Subject to Section 5.03, all of the representations,
warranties, obligations, covenants, agreements, undertakings, and
indemnifications of Seller and Purchaser contained in this Agreement and in any
closing documents delivered in connection with this Agreement shall survive the
Closing.
15.03 CONSTRUCTION. This Agreement shall not be construed more strictly
against one party than against the other, merely by virtue of the fact that it
may have been prepared primarily by counsel for one of the parties, it being
recognized that both Purchaser and Seller have contributed substantially and
materially to the preparation of this Agreement.
15.04 PUBLICITY. Unless required by law or necessary securities filings,
subject to Purchaser's right to perform certain marketing activities pursuant to
Section 3.01(d) of this Agreement, all notices to third parties and all other
publicity prior to Closing concerning the transactions contemplated by this
Agreement shall be jointly planned and coordinated by and between Purchaser and
Seller. Neither party shall act unilaterally in this regard without the prior
written approval of the other; however, this approval shall not be unreasonably
withheld or delayed. Purchaser may issue press releases after the Closing,
provided that such press releases do not contain references to either Boykin
Lodging Company or AEW Capital Management, L.P.
15.05 ASSIGNMENT. Neither all nor any portion of Purchaser's interest under
this Agreement may be sold, assigned, encumbered, conveyed, or otherwise
transferred, whether directly or indirectly, voluntarily or involuntarily, or by
operation of law or otherwise including, without limitation, by a transfer of
all or substantially all of the interest in Purchaser (collectively, a
"TRANSFER"), without the prior written consent of Seller, which consent may be
granted or denied in Seller's sole and absolute discretion. Any attempted
Transfer without
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Seller's consent shall be null and void. Any request by Purchaser for Seller's
consent to a Transfer shall set forth in writing the details of the proposed
Transfer, including, without limitation, the name, ownership, and financial
condition of the prospective transferee and the financial details of the
proposed Transfer. Notwithstanding the foregoing, Purchaser, upon prior written
notice to Seller given not less than three (3) Business Days prior to the
Closing (which time period is agreed to be material and is required to permit
Seller properly to prepare, execute and deliver the items required to be
delivered by it pursuant to this Agreement) which notice specifies the exact
legal name, address and any other information necessary for the preparation of
the closing documents to be delivered under this Agreement, may assign its
rights and delegate its duties under this Agreement to an entity which is owned
or controlled by or under common control with, directly or indirectly,
Purchaser, the principals of Purchaser and/or investors with Purchaser or the
principals of Purchaser, for the purposes of closing on the transaction provided
that such assignment shall not delay the Closing and shall not require Seller to
obtain any additional or revised third party consents, certificates or
approvals. In the event Purchaser so assigns and delegates its rights and duties
under this Agreement, it shall deliver to Seller at or prior to Closing an
instrument of assignment and assumption evidencing such assignment and
delegation. In addition, Purchaser shall provide Seller with copies of all
Transfer documentation, certified by Purchaser to be true, correct, and
complete, and with all other information which Seller may reasonably request. No
transfer, whether with or without Seller's consent: (i) shall operate to release
Purchaser or alter Purchaser's primary liability to perform the obligations of
Purchaser under this Agreement or (ii) shall cause Seller to incur any cost or
other economic detriment in connection with such Transfer. Purchaser shall pay
any and all additional costs and expenses (including, without limitation,
reasonable attorneys' fees, charges, and disbursements) incurred by Seller that
would not otherwise have been incurred by Seller had Purchaser not caused a
Transfer. Subject to the foregoing, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective permitted
successors and assigns.
15.06 COUNTERPARTS; FACSIMILE EXECUTION; INTEGRATION. This Agreement may be
executed in any number of counterparts, each of which shall constitute an
original but all of which, taken together, shall constitute but one and the same
instrument. A party may deliver executed signature pages to this Agreement by
facsimile transmission to the other party, which facsimile copies shall be
deemed to be an original executed signature page binding on the party that so
delivered the executed signature page by facsimile. This Agreement (including
all exhibits) contains the entire agreement between the parties with respect to
the subject matter hereof, supersedes all prior letters of intent,
understandings, or other agreement, whether written or oral, if any, with
respect thereto and may not be amended, supplemented, or terminated, nor shall
any Obligation hereunder or condition hereof be deemed waived, except by a
written instrument to such effect signed by the party to be charged.
15.07 GOVERNING LAW; JURISDICTION AND VENUE. This Agreement shall be
governed by and construed in accordance with the laws of the State of Illinois,
without giving effect to any principles regarding conflict of laws. Any
litigation or other court proceeding with respect to any matter arising from or
in connection with this agreement shall be conducted in the Illinois State
Superior Court in Cook County or The United States District Court for the
Northern District Court in the State of Illinois, and each of Seller (for itself
and its Indemnified Parties)
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and Purchaser (for itself and its Indemnified Parties) hereby submit to
jurisdiction and consent to venue in such courts, and waive any defense based on
forum non conveniens.
15.08 FURTHER ASSURANCES. From the date of this Agreement until the Closing
or termination of this Agreement, Seller and Purchaser shall use commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to consummate the
transaction described in this Agreement, including, without limitation, (a)
effecting all registrations and filings required under this Agreement or Legal
Requirements, and (c) satisfying the Closing Conditions set forth in this
Agreement. After the Closing, Seller and Purchaser shall use commercially
reasonable efforts (at no cost or expense to such Party, other than any de
minimis cost or expense or any cost or expense which the requesting Party agrees
in writing to reimburse) to further effect the transaction contemplated in this
Agreement.
15.09 CONFIDENTIALITY. Unless the other party specifically and expressly
otherwise agrees in writing, each party hereby agrees that all information
regarding the Property or this transaction, of whatsoever nature made available
to it ("PROPRIETARY INFORMATION") is confidential and shall not be disclosed to
any other person except those reasonably assisting such party with the
transaction, Purchaser's investors or Purchaser's lender, if any (and then only
upon Purchaser making such person aware of the confidentiality restriction and
procuring such person's agreement to be bound thereby). In the event that the
transaction contemplated by this Agreement fails to close for any reason
whatsoever, Purchaser agrees to return to Seller, or cause to be returned to
Seller, all Proprietary Information that was provided to Purchaser by Seller and
Purchaser agrees not to retain any copy of such Proprietary Information provided
to it by Seller and to instruct all persons and entities that have received a
copy or copies of such Proprietary Information to immediately destroy such
Proprietary Information. Further, Purchaser agrees not to use or allow to be
used any Proprietary Information for any purpose other than to determine whether
to proceed with the transaction contemplated by this Agreement, or if the same
is consummated, in connection with the operation of the Property post-Closing.
The provisions of this Section 15.09 shall survive the Closing or the
termination of this Agreement.
15.10 ATTORNEYS' FEES. If any action or proceeding is commenced by either
party to enforce their rights under this Agreement or to collect damages as a
result of the breach of any of the provisions of this Agreement, the prevailing
party in such action or proceeding, including any bankruptcy, insolvency or
appellate proceedings, shall be entitled to recover all reasonable costs and
expenses, including, without limitation, reasonable attorneys' fees and court
costs, in addition to any other relief awarded by the court.
15.11 PREVAILING PARTY. If any litigation or other court action,
arbitration or similar adjudicatory proceeding is commenced by any party to
enforce its rights under this Agreement or any document delivered pursuant to
this Agreement against any other party, all fees, costs and expenses, including,
without limitation, reasonable attorneys fees and court costs, incurred by the
prevailing party in such litigation, action, arbitration or proceeding shall be
reimbursed by the losing party; provided, that if a party to such litigation,
action, arbitration or proceeding prevails in part, and loses in part, the
court, arbitrator or other adjudicator presiding over such litigation, action,
arbitration or proceeding shall award a reimbursement of the fees, costs and
expenses incurred by such party on an equitable basis.
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15.12 DELIVERY OF DRAFTS NOT AN OFFER. The preparation and/or delivery of
unsigned drafts of this Agreement shall not create any legally binding rights in
the Property and/or obligations of the parties, and Purchaser and Seller
acknowledge that this Agreement shall be of no effect until it is duly executed
and delivered by both Purchaser and Seller.
15.13 SEVERABILITY. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules, and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby but rather shall be enforced to the greatest extent permitted
by law.
ARTICLE XVI
GENERAL ESCROW PROVISIONS
16.01 GENERAL ESCROW PROVISIONS. The obligations and rights of the Escrow
Company under this Agreement shall be subject to the following terms and
conditions:
(a) The duties and obligations of Escrow Company shall be determined
solely by the express provisions of this Agreement and no implied duties or
obligations shall be implied against Escrow Company. Further, Escrow
Company shall be under no obligation to refer to any other document between
or among Purchaser and Seller referred to in or related to this Agreement,
unless Escrow Company is provided with a copy of such document and consents
thereto in writing.
(b) Escrow Company shall not be liable to anyone by reason of any
error of judgment, or for any act done or step taken or omitted by Escrow
Company in good faith, or for any mistake of fact or law, or for anything
which Escrow Company may do or refrain from doing in connection herewith,
unless caused by or arising out of Escrow Company's actual and intentional
misconduct or gross negligence.
(c) Escrow Company shall be entitled to rely, and shall be protected
in acting in reliance, upon any writing furnished to Escrow Company by
either Purchaser or Seller and shall be entitled to treat as genuine, and
as the document it purports to be, any letter, paper or other document
furnished to Escrow Company. Escrow Company may rely on any affidavit of
either Purchaser or Seller or any other person as to the existence of any
facts stated therein to be known by the affiant.
(d) If Seller shall become entitled to retain or receive the Deposit
or other amount paid under this Agreement, Escrow Company shall pay the
same to Seller together with all interest earned thereon and if Purchaser
shall become entitled to a return of the Deposit or other amount paid under
this Agreement, Escrow Company shall pay the same to Purchaser together
with all interest earned thereon; provided, however, that no disbursement
pursuant to this subsection shall be made by Escrow Company until the third
(3rd) Business Day following the receipt or deemed receipt of notice by
Seller and Purchaser from Escrow Company of its intention to so disburse,
and disbursement made
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by Escrow Company after the passage of such three (3) Business Day period
shall relieve Escrow Company from all liability in connection with such
disbursement unless such disbursement is proscribed by order of a court of
competent jurisdiction or objected to in writing by Seller or Purchaser. If
such disbursement is objected to in writing by Seller or Purchaser within
such three (3) Business Day period, then Escrow Company shall not make such
disbursement until unanimously instructed in writing by Purchaser and
Seller, or is directed to make such disbursement by a court of competent
jurisdiction. Notwithstanding anything to the contrary set forth above, no
such notice by Escrow Company shall be given and no notice of objection may
or shall be given by Seller in the event Purchaser terminates this
Agreement as set forth in Section 4.04, and in such event Escrow Company
shall promptly pay the Deposit together with all interest thereon to
Purchaser.
(e) In the event of any disagreement between Purchaser and Seller
resulting in adverse claims and demands being made in connection with or
against the funds held in escrow, Escrow Company shall refuse to comply
with the claims or demands of either party until such disagreement is
finally resolved (i) by a court of competent jurisdiction (in proceedings
which Escrow Company or any other party may initiate, it being understood
and agreed by Purchaser and Seller that Escrow Company has authority (but
not the obligation) to initiate such proceedings), or (ii) by an arbitrator
in the event that Purchaser and Seller mutually and jointly determine to
submit the dispute to arbitration pursuant to the rules of the American
Arbitration Association, and in so doing Escrow Company shall not be or
become liable to a party, or (iii) by written settlement between Purchaser
and Seller.
(f) Purchaser and Seller each agree to jointly and severally indemnify
and hold harmless Escrow Company against any and all losses, liabilities,
costs (including legal fees) and other expenses in any way incurred by
Escrow Company (except to the extent the Escrow Company willfully
disregards any provision of this Agreement to which it is bound) in
connection with or as a result of any disagreement between Purchaser and
Seller under this Agreement or otherwise incurred by Escrow Company in any
way on account of its role as Escrow Company.
(g) Escrow Company in its sole discretion shall have the right to
resign as Escrow Company under this Agreement, provided that it shall
provide both Purchaser and Seller with at least thirty (30) days written
notice of such resignation pursuant to the notice provisions of this
Agreement. Upon any such resignation, Escrow Company shall transfer the
Deposit and any interest earned thereon to a successor Escrow Company
jointly approved by Purchaser and Seller, whereupon the original Escrow
Company shall have no further obligation or liability whatsoever as Escrow
Company under this Agreement.
(h) The parties hereby acknowledge and agree that Federal Deposit
Insurance for the Deposit, if any, is limited to a cumulative maximum
amount of $100,000 for each individual depositor for all of the depositor's
accounts at the same or related institution. The parties further hereby
acknowledge and agree that certain banking instruments such as, but not
limited to, repurchase agreements and letters of credit, are not covered at
all
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by Federal Deposit Insurance. The parties acknowledge and agree that Escrow
Company shall have no obligation or liability with respect to insuring the
Deposit or with respect to the solvency of the depository institution, or
otherwise with respect to the appropriateness of the depository institution
for purposes of the Deposit. Further, the parties understand that Escrow
Company assumes no responsibility for, nor will the parties hold the same
liable for, any loss occurring which arises from the fact that (x) the
amount of the account or accounts contemplated hereby may cause the
aggregate amount of any individual depositor's account or accounts to
exceed $100,000, (y) that this excess amount is not insured by the Federal
Deposit Insurance Corporation, or (z) that Federal Deposit Insurance is not
available on certain types of bank instruments.
(i) Escrow Company may pay the Deposit into a court of competent
jurisdiction upon commencement by the Escrow Company of an interpleader
action in such court. The reasonable out-of-pocket costs and attorneys'
fees of the Escrow Company for such interpleader action shall be paid by
the losing party in such interpleader action.
(j) The rights and immunities of Escrow Company hereunder shall apply
equally to its partners, of counsel, associates, employees, affiliates and
agents.
(k) All of Escrow Company's obligations under this Agreement shall
automatically terminate upon disbursing the Deposit as set forth above.
[The signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed, all as of the day and year first above written.
SELLER:
BOYKIN CHICAGO L.L.C., a Delaware
limited liability company
By: Boykin/AEW LLC, its Manager
By: Boykin Hotel Properties, L.P., its
Operating Member
By: Boykin Lodging Company, its General
Partner
By: /s/ Robert W. Boykin
------------------------------------
Name: Robert W. Boykin
------------------------------
Title: Chief Executive Officer
------------------------------
and Chairman
------------------------------
PURCHASER:
THE FALOR COMPANIES, INC., an
Illinois corporation
By: /s/ Robert Falor
------------------------------------
Name: Robert Falor
------------------------------
Title: President
------------------------------
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written solely with respect to their respective obligations set
forth in Section 5.01(n)(vi).
MANAGER:
CHIBOY LLC, an Ohio limited liability
company
By: /s/ John E. Boykin
------------------------------------
Name: John E. Boykin
------------------------------
Title: President
------------------------------
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ESCROW COMPANY:
STEWART TITLE GUARANTY COMPANY
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
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FIRST AMENDMENT TO HOTEL PURCHASE AND SALE AGREEMENT
This First Amendment to Hotel Purchase and Sale Agreement (the "Amendment")
is made and entered into as of December 20, 2004 by and between Boykin Chicago
L.L.C. ("Seller") and the Falor Companies, Inc. ("Purchaser").
RECITALS
A. Seller and Purchaser are parties to that certain Hotel Purchase and Sale
Agreement dated as of November 5, 2004 (the "Purchase Agreement") concerning the
hotel and related facilities known as the Hotel 71 located at 71 East Wacker
Drive, Chicago, IL.
B. Seller and Purchaser desire to enter into this Amendment for the
purposes of amending certain terms and provisions of the Purchase Agreement.
AGREEMENT
NOW THEREFOR, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Purchaser agree as
follows:
1. Defined Terms. All capitalized terms used herein and not otherwise
defined shall have the meaning set forth in the Purchase Agreement.
2. MRG Personal Property. Pursuant to Section 6.07 of the Purchase
Agreement, Seller is obligated to remove Excluded Assets, including assets owned
by MRG Enterprises, LLC, the previous tenant at the restaurant space, on or
before the Closing Date. The assets of MRG Enterprises LLC which Seller is
obligated to remove are more particularly described on Exhibit A attached hereto
(the "MRG Personal Property"). Purchaser and Seller agree that notwithstanding
the provisions of Section 6.7 of the Purchase Agreement, Seller shall not be
obligated to remove the MRG Personal Property on or before the Closing Date.
Notwithstanding the foregoing, in the event that Purchaser gives Seller notice
on or before January 31, 2005 to remove the MRG Personal Property, Purchaser
shall remove the MRG Personal Property at its expense, on or before fourteen
(14) days after receipt of such notice, and shall repair all damage caused by
such removal, but shall have not obligation to replace any MRG Personal Property
so removed.
3. Miscellaneous. A telecopied facsimile of a duly executed counterpart of
this Amendment shall be sufficient to evidence the binding agreement of each
party to the terms hereof. Except as amended hereby, all terms and conditions of
the Purchase Agreement are, and remain in full force and effect. In the event of
a conflict between the terms of the Purchase Agreement and the terms of this
Amendment, the terms of this Amendment shall control.
IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the
date set forth above.
SELLER:
BOYKIN CHICAGO L.L.C., a Delaware
limited liability company
By: Boykin/AEW LLC, its manager
By: Boykin Hotel Properties, L.P.,
its operating member
By: Boykin Lodging Company,
its general partner
By: /s/ Richard C. Conti
--------------------------------------
Name: Richard C. Conti
--------------------------------
Title: President
-------------------------------
PURCHASER:
THE FALOR COMPANIES, INC., an Illinois corporation
By: /s/ Robert Falor
----------------------------------------------
Name: Robert Falor
----------------------------------------
Title: President
---------------------------------------
SECOND AMENDMENT TO HOTEL PURCHASE AND SALE AGREEMENT
This Second Amendment to Hotel Purchase and Sale Agreement (the
"Amendment") is made and entered into as of December 27, 2004 by and between
Boykin Chicago L.L.C. ("Seller") and the Falor Companies, Inc. ("Purchaser").
RECITALS
A. Seller and Purchaser are parties to that certain Hotel Purchase and Sale
Agreement dated as of November 5, 2004 as amended by First Amendment to Hotel
Purchase and Sale Agreement dated as of December 20, 2004 (as amended, the
"Purchase Agreement") concerning the hotel and related facilities known as the
Hotel 71 located at 71 East Wacker Drive, Chicago, IL.
B. Seller and Purchaser desire to enter into this Amendment for the
purposes of amending certain terms and provisions of the Purchase Agreement.
AGREEMENT
NOW THEREFOR, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Purchaser agree as
follows:
1. Defined Terms. All capitalized terms used herein and not otherwise
defined shall have the meaning set forth in the Purchase Agreement.
2. Closing Date. The Closing Date is hereby extended to Tuesday, February
1, 2005. Notwithstanding the foregoing, Purchaser shall have the right to
accelerate the Closing Date to a date earlier than February 1, 2005 by providing
Seller with fourteen (14) days prior written notice.
3. Purchase Price. The Purchase Price is hereby increased by Five Hundred
Thousand Dollars to Ninety-Three Million Dollars ($93,000,000).
Notwithstanding the foregoing, in the event that the Closing Date occurs
prior to February 1, 2005, the Purchase Price shall be reduced by $18,520 for
each day prior to February 1, 2005 that the Closing occurs. For example, if the
closing occurs on January 27, 2005, Purchaser shall be entitled to a reduction
in the Purchase Price in an amount equal to $92,600 (e.g. $18,520 x 5).
4. Second Additional Deposit. On or before Thursday, December 30,
Purchaser shall deposit with the Escrow Company, as escrow company, the
additional amount of $1,000,000 by certified check or wire transfer of
immediately available funds as an additional
deposit (the "Second Additional Deposit"). The Second Additional Deposit,
together with interest earned thereon, shall constitute part of the Deposit.
5. Waiver of Contingencies. Notwithstanding anything to the contrary
contained in the Purchase Agreement, including without limitation, the
provisions of Section 9.01 and 9.02 of the Purchase Agreement, Purchaser waives
any right to terminate the Purchase Agreement for any reason other than (i) the
failure of the Seller to deliver the items set forth in Section 6.03 of the
Purchase Agreement (other than the certificate referenced in Section 6.03(d)
which Purchaser agrees Seller no longer has to deliver) and (ii) the failure of
Seller to comply with the provisions of Section 6.08 of the Purchase Agreement.
6. Miscellaneous. A telecopied facsimile of a duly executed counterpart of
this Amendment shall be sufficient to evidence the binding agreement of each
party to the terms hereof. Except as amended hereby, all terms and conditions of
the Purchase Agreement are, and remain in full force and effect. In the event of
a conflict between the terms of the Purchase Agreement and the terms of this
Amendment, the terms of this Amendment shall control.
IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the
date set forth above.
SELLER:
BOYKIN CHICAGO L.L.C., a Delaware
limited liability company
By: Boykin/AEW LLC, its manager
By: Boykin Hotel Properties, L.P.,
its operating member
By: Boykin Lodging Company,
its general partner
By: /s/ Shereen P. Jones
--------------------------------------
Name: Shereen P. Jones
--------------------------------
Title: Executive Vice President,
-------------------------------
Chief Financial and Investment
-------------------------------
Officer
-------------------------------
PURCHASER:
THE FALOR COMPANIES, INC., an Illinois corporation
By: /s/ Robert Falor
----------------------------------------------
Name: Robert Falor
----------------------------------------
Title: President
---------------------------------------
ASSIGNMENT AND ASSUMPTION OF HOTEL PURCHASE AND SALE
----------------------------------------------------
AGREEMENT (HOTEL 71)
--------------------
THIS ASSIGNMENT AND ASSUMPTION OF HOTEL PURCHASE AND SALE AGREEMENT
(this "ASSIGNMENT") is made as of this 28th day of January, 2005, by THE FALOR
COMPANIES, INC., an Illinois corporation ("ASSIGNOR"), to CHICAGO H&S HOTEL
PROPERTY, LLC, a Delaware limited liability company ("ASSIGNEE").
RECITALS:
---------
A. Assignor, as buyer, and Boykin Chicago, L.L.C., a Delaware
limited liability company ("SELLER"), as seller, have entered
into a Hotel Purchase and Sale Agreement dated as of November
5, 2004, as amended by the First Amendment to Hotel Purchase
and Sale Agreement dated as of December 20, 2004, the Second
Amendment to Hotel Purchase and Sale agreement dated as of
December 27, 2004 (as so amended and as further amended from
time to time, the "AGREEMENT"). Under the Agreement Seller has
agreed to sell to Assignor, and Assignor has agreed to purchase
from Seller, the Property (as defined in the Agreement); and
B. Assignor desires to assign to Assignee, and Assignee desires
to accept from Assignor, all of Assignor's interest in the
Agreement.
Assignor and Assignee agree:
1. Assignor hereby assigns to Assignee all of Assignor's
interest in the Agreement.
2. Assignee, for itself and its successors and assigns, hereby
accepts the assignment identified above, and assumes each of
Assignor's obligations as "Buyer" under the Agreement.
[signatures on following page]
Assignor and Assignee have executed this Assignment and Assumption of Hotel
Purchase and Sale Agreement as of the date first written above.
ASSIGNOR:
---------
THE FALOR COMPANIES, INC.
By: /s/ Robert Falor
----------------
Name: Robert Falor
Title: President
ASSIGNEE:
---------
CHICAGO H&S HOTEL PROPERTY, LLC
By: Chicago H&S Investors, LLC, a Delaware limited liability
company, its manager
By: Chicago H&S Manager, LLC, a Delaware limited
liability company, its manager
By: Chicago H&S Senior Investors, LLC, a
Delaware limited liability company,
its manager
By: /s/ Robert Falor
----------------
Name: Robert Falor, its Manager
THIRD AMENDMENT TO HOTEL PURCHASE AND SALE AGREEMENT
This Third Amendment to Hotel Purchase and Sale Agreement (the "Amendment")
is made and entered into as of February 1, 2005 by and between Boykin Chicago
L.L.C. ("Seller") and the Falor Companies, Inc. ("Purchaser").
RECITALS
A. Seller and Purchaser are parties to that certain Hotel Purchase and Sale
Agreement dated as of November 5, 2004 as amended by First Amendment to Hotel
Purchase and Sale Agreement dated as of December 20, 2004 and Second Amendment
to Hotel Purchase and Sale Agreement dated as of December 27, 2004 (as amended,
the "Purchase Agreement") concerning the hotel and related facilities known as
the Hotel 71 located at 71 East Wacker Drive, Chicago, IL.
B. Seller and Purchaser desire to enter into this Amendment for the
purposes of amending certain terms and provisions of the Purchase Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Purchaser agree as
follows:
1. Defined Terms. All capitalized terms used herein and not otherwise
defined shall have the meaning set forth in the Purchase Agreement.
2. Closing Date. The Closing Date is hereby extended to Tuesday, March 1,
2005. Notwithstanding the foregoing, Purchaser shall have the right to
accelerate the Closing Date to a date earlier than March 1, 2005 by providing
Seller with fourteen (14) days prior written notice.
3. Purchase Price. The Purchase Price is hereby increased by One Million
Two Hundred Thousand Dollars to Ninety-Four Million Two Hundred Thousand Dollars
($94,200,000). The Purchase Price is also be increased by the amount of the
Corus Extension Fee, if any.
Notwithstanding the foregoing, in the event that the Closing Date occurs
prior to March 1, 2005, the Purchase Price shall be reduced by $21,425.00 for
each day prior to March 1, 2005 that the Closing occurs. For example, if the
Closing occurs on February 24, 2005, Purchaser shall be entitled to a reduction
in the Purchase Price in an amount equal to $107,125 (e.g. $21,425 x 5).
4. Deposit. Purchaser and Seller hereby authorize the Escrow Company to
release the entire Deposit to Seller pursuant to the wire instructions attached
as Exhibit A (as the same may be changed by Seller by notice to Purchaser, the
"Wire Instructions"). Purchaser acknowledges that the Deposit has been fully
earned by Seller and is completely non-refundable,
but shall be applied to the Purchase Price at Closing. In addition, on or before
one Business Day after the execution by Seller of this Amendment, Purchaser
shall wire to Seller pursuant to the Wire Instructions an additional amount of
$300,000 (the "First Extension Fee"). On or before February 20, 2005, Purchaser
shall wire to Seller pursuant to the Wire Instructions a second additional
amount of $300,000 (the "Second Extension Fee"). The First Extension Fee and the
Second Extension Fee have been fully earned by Seller and are completely
non-refundable, but shall be applied to the Purchase Price at Closing. In the
event that Purchaser fails to wire to Seller the First Extension Fee or the
Second Extension Fee within the time frame set forth herein, Seller shall have
the right to terminate the Purchase Agreement and shall have a claim against
Purchaser for the amount of the unfunded First Extension Fee and Second
Extension Fee.
5. Corus Extension Fee. Purchaser acknowledges that in order to extend the
maturity date of the existing mortgage loan encumbering the property, Seller is
required to pay its lender an extension fee of $250,000 on or before February
12, 2005 (as the same may be reduced or eliminated by Seller's lender in its
sole discretion, the "Corus Extension Fee"). Seller shall request that the
lender eliminate and/or reduce the Corus Extension Fee but can give Purchaser no
assurances that such fee will be reduced or eliminated. On or before February
10, 2005, Purchaser shall wire to Seller an amount equal to the Corus Extension
Fee.
6. MRG Personal Property. Pursuant to the First Amendment to Hotel
Purchase and Sale Agreement, Purchaser agreed that Seller has no obligation to
remove the MRG Personal Property on or before the Closing Date unless Purchaser
gave Seller notice on or before January 31, 2005. Purchaser acknowledges that
Purchaser did not deliver such notice and waives any claim it may have against
Seller as a result of Seller failing to remove the MRG Personal Property on or
before the Closing Date.
7. Remedies. Notwithstanding anything contrary contained in the Purchase
Agreement, Purchaser acknowledges that its sole remedy in the event Seller fails
to perform its obligations under, or otherwise breaches, the Agreement shall be
to obtain a court order for specific performance compelling Seller to convey the
Property to Purchaser in accordance with the terms of the Purchase Agreement .
Except for Purchaser's right to initiate such process to obtain a court order
for a specific performance, Purchaser, on behalf of itself, its agents and
successors and assigns, covenants not to sue Seller with respect to any matter
relating to the Property, the Purchase Agreement or the transaction described
therein and releases Seller and its members, officers, directors and agents from
any liability with respect thereto.
8. Miscellaneous. A telecopied facsimile of a duly executed counterpart of
this Amendment shall be sufficient to evidence the binding agreement of each
party to the terms hereof. Except as amended hereby, all terms and conditions of
the Purchase Agreement are, and remain in full force and effect. In the event of
a conflict between the terms of the Purchase Agreement and the terms of this
Amendment, the terms of this Amendment shall control.
IN WITNESS WHEREOF, the parties have executed this Amendment effective as
of the date set forth above.
SELLER:
BOYKIN CHICAGO L.L.C., a Delaware
limited liability company
By: Boykin/AEW LLC, its manager
By: Boykin Hotel Properties, L.P.,
its operating member
By: Boykin Lodging Company,
its general partner
By: /s/ Shereen P. Jones
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Name: Shereen P. Jones
Title: Executive Vice President and
Chief Financial and Investment Officer
PURCHASER:
THE FALOR COMPANIES, INC., an Illinois corporation
By: /s/ Robert D. Falor
--------------------------------------------------
Name: Robert D. Falor
--------------------------------------------
Title: President and CEO
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FOURTH AMENDMENT TO HOTEL PURCHASE AND SALE
AGREEMENT
This Fourth Amendment to Hotel Purchase and Sale Agreement (the
"Amendment") is made and entered into as of March 1, 2005 by and between Boykin
Chicago L.L.C. ("Seller") and Chicago H&S Hotel Property, LLC ("Purchaser").
RECITALS
A. Seller and Purchaser are parties to that certain Hotel Purchase and Sale
Agreement dated as of November 5, 2004 as amended by First Amendment to Hotel
Purchase and Sale Agreement dated as of December 20,2004, Second Amendment to
Hotel Purchase and Sale Agreement dated as of December 27, 2004 and Third
Amendment dated February 1, 2005 (as amended, the "Purchase Agreement")
concerning the hotel and related facilities known as the Hotel 71 located at 71
East Wacker Drive, Chicago, IL.
B. Seller and Purchaser desire to enter into this Amendment for the
purposes of amending certain terms and provisions of the Purchase Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Purchaser agree as
follows:
1. Defined Terms. All capitalized terms used herein and not otherwise
defined shall have the meaning set forth in the Purchase Agreement.
2. Closing Date. The Closing Date is hereby extended to noon Eastern
Standard Time, Friday, March 11, 2005.
3. Purchase Price. The Purchase Price is hereby increased by Three Hundred
and Fifty Thousand Dollars ($350,000) to Ninety-Four Million Five Hundred Fifty
Thousand Dollars ($94,550,000). One Hundred Thousand Dollars ($100,000) (the
"Cost Coverage Amount") of such Purchase Price increase shall be wired to Seller
pursuant to the wire instructions attached hereto as Exhibit A (the "Wire
Instructions") on or before 5:00 pm on March 1, 2005 and shall be applied by
Seller, at Seller's sole and absolute discretion, to cover Seller's costs with
respect to the fourth extension of the Closing Date. The Cost Coverage Amount
shall be applied to the Purchase Price at Closing.
4. Additional Payment. Purchaser acknowledges that the Deposit, the First
Extension Fee, the Second Extension Fee and the Third Extension Fee have been
fully earned by Seller and are completely non-refundable, but shall be applied
to the Purchase Price at Closing. In addition, on or before 5:00 pm on March 2,
2005, Purchaser shall wire to Seller pursuant to the Wire Instructions an
additional amount of Seven Hundred Fifty Thousand Dollars ($750,000). The Fourth
Extension Fee has been fully earned by Seller and is completely non-
refundable, but shall be applied to the Purchase Price at Closing. In the event
that Purchaser fails to wire to Seller the Fourth Extension Fee and/or the Cost
Coverage Amount within the time fiame set forth herein, Seller shall have the
right to terminate the Purchase Agreement and shall have a claim against
Purchaser for the amount of the unfunded Fourth Extension Fee and the Cost
Coverage Amount.
5. Collective Bargaining Assignment. The Collective Bargaining Assignment
referred to in Section 6.04(e) of the Purchase Agreement and attached hereto as
Exhibit B shall be executed and delivered by Purchaser or Purchaser's management
company designated by Purchaser to operate the Hotel on or before one (1)
Business Day after the date hereof.
6 . Remedies. Notwithstanding anything contrary contained in the Purchase
Agreement, Purchaser acknowledges that its sole remedy in the event Seller fails
to perform its obligations under, or otherwise breaches, the Agreement shall be
to obtain a court order for specific performance compelling Seller to convey the
Property to Purchaser in accordance with the terms of the Purchase Agreement .
Except for Purchaser's right to initiate such process to obtain a court order
for a specific performance, Purchaser, on behalf of itself, its agents and
successors and assigns, covenants not to sue Seller with respect to any matter
relating to the Property, the Purchase Agreement or the transaction described
therein and releases Seller and its members, officers, directors and agents from
any liability with respect thereto.
7. Miscellaneous. A telecopied facsimile of a duly executed counterpart of
this Amendment shall be sufficient to evidence the binding agreement of each
party to the terms hereof. Except as amended hereby, all terms and conditions of
the Purchase Agreement are, and remain in full force and effect. In the event of
a conflict between the terms of the Purchase Agreement and the terms of this
Amendment, the terms of this Amendment shall control.
IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the
date set forth above.
SELLER:
BOYKIN CHICAGO L.L.C., a Delaware
limited liability company
By: Boykin/AEW LLC, its manager
By: Boykin Hotel Properties, L.P.,
its operating member
By: Boykin Lodging Company,
its general partner
By: /s/ Richard C. Conti
------------------------------------------
Name: Richard C. Conti
Title: President and Chief
Operating Officer
PURCHASER:
CHICAGO H&S HOTEL PROPERTY, LLC, a
Delaware limited liability Company
By: /s/ Robert D. Falor
--------------------------------------------------
Robert D. Falor, Authorized Signatory
FIFTH AMENDMENT TO HOTEL PURCHASE AND SALE AGREEMENT
This Fifth Amendment to Hotel Purchase and Sale Agreement (the
"Amendment") is made and entered into as of March 11, 2005 by and between Boykin
Chicago L.L.C. ("Seller") and Chicago H&S Property, LLC ("Purchaser").
RECITALS
A. Seller and Purchaser are parties to that certain Hotel
Purchase and Sale Agreement dated as of November 5, 2004 as amended by First
Amendment to Hotel Purchase and Sale Agreement dated as of December 20, 2004,
Second Amendment to Hotel Purchase and Sale Agreement dated as of December 27,
2004, Third Amendment dated February 1, 2005 and Fourth Amendment dated March 1,
2005 (as amended, the "Purchase Agreement") concerning the hotel and related
facilities known as the Hotel 71 located at 71 East Wacker Drive, Chicago, IL.
B. Seller and Purchaser desire to enter into this Amendment for
the purposes of amending certain terms and provisions of the Purchase Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Purchaser agree as
follows:
1. Defined Terms. All capitalized terms used herein and not
otherwise defined shall have the meaning set forth in the Purchase Agreement.
2. Closing Date. The Closing Date is hereby extended to noon
Eastern Standard Time on Wednesday, March 23, 2005.
3. Purchase Price. The Purchase Price is hereby increased by Five
Hundred Thousand Dollars ($500,000) to Ninety-Five Million Fifty Thousand
Dollars ($95,050,000).
4. Additional Payment. On or before 5:00 pm on Monday, March 14,
2005, Purchaser shall wire to Seller pursuant to the wire instructions attached
hereto as Exhibit A (the "Wire Instructions") an additional amount of Three
Hundred Thousand Dollars ($300,000) (the "Fifth Extension Fee"). The Fifth
Extension Fee has been fully earned by Seller and is completely non-refundable,
but shall be applied to the Purchase Price at Closing. In the event that
Purchaser fails to wire to Seller the Fifth Extension Fee within the time frame
set forth herein, Seller shall have the right to terminate the Purchase
Agreement and shall have a claim against Purchaser for the amount of the
unfunded Fifth Extension Fee.
5. Collective Bargaining Assignment. Purchaser agrees not to, and
to cause its management agent not to, attempt to negotiate any provisions of the
Collective Bargaining
Agreements hereafter up to and through the date of closing and to execute or
cause such management agent to execute the assignment attached as Exhibit B.
6. Remedies.
(a) Notwithstanding anything contrary contained in the
Purchase Agreement, Purchaser hereby waives any and all claims against
Seller under the Purchase Agreement and acknowledges that its sole
remedy in the event Seller fails to perform its obligations under, or
otherwise breaches, the Agreement shall be to obtain a court order for
specific performance compelling Seller to convey the Property to
Purchaser in accordance with the terms of the Purchase Agreement .
Except for Purchaser's right to initiate such process to obtain a court
order for a specific performance, Purchaser, on behalf of itself, its
agents and successors and assigns, covenants not to sue Seller with
respect to any matter relating to the Property, the Purchase Agreement
or the transaction described therein and releases Seller and its
members, officers, directors and agents from any liability with respect
thereto.
(b) Notwithstanding anything to the contrary contained in
the Purchase Agreement, in addition to all remedies which Seller may
have against Purchaser pursuant to the Purchase Agreement, Purchaser
agrees that in the event that Purchaser fails to perform its obligation
to close the transaction contemplated by the Purchase Agreement on the
Closing Date, Purchaser shall pay Seller additional liquidated damages
in the amount of $3,000,000. Seller and Purchaser agree that the
Seller's damages resulting from Purchaser's default are difficult to
determine, and the amount of the additional liquidated damages, in
addition to Seller's remedies pursuant to Section 13.01 of the Purchase
Agreement, is a fair estimate of those damages. Robert Falor and Guy
Mitchell (collectively "Guarantor") jointly and severally agree to
guarantee the obligation of the Purchaser to pay the liquidated damages
set forth in this Section 6(b). Such guarantee is unconditional and
Robert Falor and Guy Mitchell waive any and all defenses to such claim
and acknowledge that Seller shall have no obligation to pursue action
against any other party, including Purchaser, prior to enforcing its
rights against Guarantor. Guarantor agrees that their obligation under
this Section 6(b) shall be governed by the laws of the Commonwealth of
Massachusetts and any litigation in connection therewith shall be
conducted in the Commonwealth of Massachusetts and each of Robert Falor
and Guy Mitchell submit to jurisdiction and consent to venue in such
courts and waive any defense based on forum non conveniens.
7. Acceleration of Closing Date: Release of Guaranty.
(a) Purchaser shall have the right to accelerate the
Closing Date to Friday, March 18, 2005 by providing Seller with written
notice thereof on or before 12:00 noon eastern standard time on
Tuesday, March 15. Such acceleration shall only be effective in the
event that Purchaser wires to Seller an additional $1,000,000 pursuant
to the Wiring Instructions on or before 5:00 p.m. eastern standard time
on Tuesday, March 15, 2005. Upon receipt, such $1,000,000 will have
been fully earned by Seller and is completely non-refundable, but shall
be applied to the Purchase Price at Closing. In the event that
Purchaser validly exercise its right to accelerate the Closing Date and
delivers the $1,000,000 in accordance with the provisions set forth in
this Paragraph 7, (i) the provisions of Section 6(b) of this Amendment
shall be of no further force and effect (e.g. Seller shall not be
entitled to the additional $3,000,000 as liquidated damages in the
event Purchaser defaults and Robert Falor and Guy Mitchell shall be
released from any liability with respect to the guaranty and (ii) the
Purchase Price shall be reduced by $200,000.00.
(b) In the event that Purchaser wires to Seller an
additional $1,000,000 pursuant to the Wiring Instructions on or before
5:00 p.m. eastern standard time on Tuesday, March 15, 2005, but does
not accelerate the Closing Date as provided in subsection (a) above,
the provisions of Section 6(b) of this Amendment shall be of no further
force and effect (e.g. Seller shall not be entitled to the additional
$3,000,000 as liquidated damages in the event Purchaser defaults and
Robert Falor and Guy Mitchell shall be released from any liability with
respect to the guaranty). There shall be no reduction in the Purchase
Price if the Closing Date is not accelerated. Upon receipt, such
$1,000,000 will have been fully earned by Seller and is completely
non-refundable, but shall be applied to the Purchase Price at Closing.
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8. Miscellaneous. A telecopied facsimile of a duly executed
counterpart of this Amendment shall be sufficient to evidence the binding
agreement of each party to the terms hereof. Except as amended hereby, all terms
and conditions of the Purchase Agreement are, and remain in full force and
effect. In the event of a conflict between the terms of the Purchase Agreement
and the terms of this Amendment, the terms of this Amendment shall control.
IN WITNESS WHEREOF, the parties have executed this Amendment effective
as of the date set forth above.
SELLER:
BOYKIN CHICAGO L.L.C., a Delaware
limited liability company
By: Boykin/AEW LLC, its manager
By: Boykin Hotel Properties, L.P.,
its operating member
By: Boykin Lodging Company,
its general partner
By:/s/ Richard C. Conti
------------------------------
Name: Richard C. Conti
Title: President and Chief
Operating Officer
PURCHASER:
CHICAGO H&S HOTEL PROPERTY, LLC
By: /s/ Robert Falor
----------------------------
Name: Robert Falor
Title: Authorized Signer
By executing below, subject to Section 7 of this Amendment, the undersigned
jointly and severally agree to guaranty Purchaser's obligations under Section
6(b) of this Amendment to pay Seller an additional $3,000,000 in the event
Purchaser fails to close the transaction contemplated by the Purchase Agreement
on the Closing Date.
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/s/ Robert Falor
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Robert Falor
/s/ Guy Mitchell
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Guy Mitchell
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