Exhibit 10.1

 

 

 

 

 

 

PURCHASE AND SALE AGREEMENT

 

By and Between

 

NMG-BRAINTREE, LLC,

a Delaware limited liability company

 

(“Seller”)

 

-and-

 

CWI BRAINTREE HOTEL, LLC,

a Delaware limited liability company

 

(“Purchaser”)

 

of

 

Hampton Inn Hotel,

Braintree, Massachusetts

 

Dated March 19, 2012

 

 

 

 

 

 

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TABLE OF CONTENTS

 

I. DEFINITIONS; PURCHASE AND SALE; DUE DILIGENCE PERIOD

1

 

 

 

1.1

Definitions

1

 

 

 

1.2

Purchase and Sale

1

 

 

 

1.3

Due Diligence Period; Access; Review of Materials

3

 

 

 

II. CONSIDERATION

5

 

 

 

2.1

Purchase Price

5

 

 

 

2.2

Earnest Money

6

 

 

 

2.3

Allocation

6

 

 

 

III. SURVEY

6

 

 

 

3.1

Survey

6

 

 

 

IV. TITLE INSURANCE

7

 

 

 

4.1

Title Commitment

7

 

 

 

V. REPRESENTATIONS AND WARRANTIES

8

 

 

 

5.1

Seller’s Representations and Warranties

8

 

 

 

5.2

Purchaser’s Representations and Warranties

11

 

 

 

5.3

Remedies Prior to Closing

12

 

 

 

5.4

Survival

12

 

 

 

5.5

Indemnification

12

 

 

 

VI. COVENANTS

15

 

 

 

6.1

Seller’s Covenants

15

 

 

 

6.2

Purchaser’s Covenants

16

 

 

 

VII. REMEDIES

17

 

 

 

7.1

Seller’s Remedies

17

 

 

 

7.2

Purchaser’s Remedies

17

 

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7.3

Holdback

18

 

 

 

7.4

Attorneys’ Fees

18

 

 

 

7.5

Survival

18

 

 

 

VIII. CLOSING MATTERS

19

 

 

 

8.1

Closing

19

 

 

 

8.2

Adjustment and Prorations

19

 

 

 

8.3

Guest Property in Seller’s Possession on Closing Date

21

 

 

 

8.4

Closing Documents

22

 

 

 

8.5

Closing Costs

24

 

 

 

8.6

Real Estate Commissions

24

 

 

 

8.7

Hotel Employees

24

 

 

 

8.8

Disbursements and Other Actions by Escrow Agent

25

 

 

 

8.9

Conditions Precedent to Purchaser’s Obligations

26

 

 

 

8.10

Conditions Precedent to Seller’s Obligations

27

 

 

 

8.11

Survival

27

 

 

 

IX. CONDEMNATION AND RISK OF LOSS

27

 

 

 

9.1

Notice

27

 

 

 

9.2

Condemnation

27

 

 

 

9.3

Casualty

28

 

 

 

X. DISCLAIMERS AND RELEASE

28

 

 

 

10.1

Independent Investigations

29

 

 

 

10.2

Disclaimer of Warranties

29

 

 

 

10.3

Condition of Hotel

29

 

 

 

10.4

Release

30

 

 

 

XI. MISCELLANEOUS

31

 

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11.1

Entire Agreement

31

 

 

 

11.2

Binding Effect

31

 

 

 

11.3

Notices

31

 

 

 

11.4

Governing Law

33

 

 

 

11.5

Interpretation

33

 

 

 

11.6

Discharge of Obligations

33

 

 

 

11.7

Execution in Counterparts

33

 

 

 

11.8

No Recordation

33

 

 

 

11.9

Time of the Essence

33

 

 

 

11.10

Invalid Provisions

34

 

 

 

11.11

Computation of Time

34

 

 

 

11.12

Knowledge

34

 

 

 

11.13

Confidentiality

34

 

 

 

11.14

No-Offer

35

 

 

 

11.15

Privacy Laws

35

 

 

 

11.16

Further Assurances

35

 

 

 

11.17

WAIVER OF TRIAL BY JURY

36

 

 

 

11.18

Liability Under Deed

36

 

 

 

11.19

Exhibits and Schedules

36

 

 

 

11.20

Assignments

36

 

 

 

11.21

Escrow Agent as Reporting Person

36

 

 

 

11.22

Exclusivity

37

 

 

 

SIGNATURE BY SELLER

38

 

 

SIGNATURE BY PURCHASER

39

 

 

SIGNATURE BY ESCROW AGENT

40

 

iv

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EXHIBITS:

 

Exhibit “A”       (Definitions)

 

Exhibit “B”       (Legal Description of Hotel Land)

 

Exhibit “C”       (Escrow Instructions)

 

Exhibit “D”       (Material Contracts)

 

Exhibit “E”        (Permits)

 

Exhibit “F”        (Bill of Sale and Assignment)

 

Exhibit “G”       (Seller’s Closing Certificate)

 

Exhibit “H”       (Purchaser’s Closing Certificate)

 

Exhibit “I”         (Investigation Documents)

 

Exhibit “J”        (Equipment Leases)

 

Exhibit “K”       (Improvements)

 

Exhibit “L”        (Audit Request Materials)

 

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PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”), dated as of March 19, 2012
(the “Effective Date”), is made by and between NMG-BRAINTREE, LLC, a Delaware
limited liability company (“Seller”), and CWI BRAINTREE HOTEL, LLC, a Delaware
limited liability company (“Purchaser”).

 

Recitals:

 

A.          Seller owns all of the Real Property and Personal Property located
at that certain hotel having approximately one hundred three (103) guest rooms
commonly known as the “Hampton Inn Hotel, Braintree, Massachusetts”
(collectively, the “Hotel”);

 

B.           Seller desires to sell to Purchaser and Purchaser desires to buy
from Seller the Hotel on the terms and conditions set forth herein.

 

Agreement:

 

I. DEFINITIONS; PURCHASE AND SALE; DUE DILIGENCE PERIOD

 

1.1         Definitions.

 

For the purpose of this Agreement, capitalized terms shall have the meanings set
forth in Exhibit “A,” which is attached hereto and incorporated herein.

 

1.2         Purchase and Sale.

 

(a)         Real Property. Subject to the terms and on the conditions set forth
in this Agreement, Seller hereby covenants and agrees to sell and convey and
Purchaser agrees to purchase Seller’s fee interest in the following assets
(collectively, the “Real Property”):

 

(i)

that land and all appurtenances thereto which is more particularly described in
Exhibit “B” hereto (the “Hotel Land”); and

 

 

(ii)

the buildings, structures (surface and sub-surface), installations and other
improvements and fixtures as shall constitute real property located on the Hotel
Land (collectively, the ‘Hotel Improvements”).

 

(b)          Personal Property. In addition to the Real Property, and subject to
the terms and on the conditions set forth in this Agreement, Seller agrees to
sell and convey and Purchaser agrees to purchase the following assets
(collectively, the “Personal Property”):

 

(i)

all of Seller’s right, title and interest in and to all fixtures, furniture,
furnishings, fittings, equipment, machinery, apparatus, appliances, vehicles and
other articles of personal property (other than the Expendables, the Consumables
or the Excluded Assets) located at, affixed or attached to the Real Property or
held in reserve storage for future use exclusively in connection with the Hotel,
including, without limitation, Seller’s interest as lessee under an Equipment
Lease with

 

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respect to any such items, subject to such depletions, substitutions and
replacements as shall occur and be made in the Ordinary Course of Business prior
to the Closing Date (collectively, “Furnishings”);

 

 

(ii)

all of Seller’s right, title and interest in and to all opened and unopened food
and beverages whether in use or held in reserve storage for future use
exclusively in connection with the operation of the Hotel (collectively, the
“Consumables”);

 

 

(iii)

all of Seller’s right, title and interest in and to all expendable supplies,
including, without limitation, all linens, towels, paper goods, guest supplies,
cleaning supplies, operating supplies, printing supplies, stationery, uniforms
and similar items, whether in use or held in reserve storage for future use in
connection with the operation of the Hotel (collectively, the “Expendables”);

 

 

(iv)

to the extent transferable by Seller, all of Seller’s right, title and interest
in and to all service and maintenance contracts, supply contracts, and other
contracts or agreements relating to the maintenance, operation, provisioning or
equipping of the Hotel, together with all related written warranties and
guaranties, but excluding the Franchise Agreement, the Management Agreement, the
Operating Lease and any other contracts or agreements that are Excluded Assets
(collectively, the “Hotel Contracts”);

 

 

(v)

all of Seller’s right, title and interest in and to all equipment leases set
forth on Exhibit “J” (collectively, the “Equipment Leases”);

 

 

(vi)

all of Seller’s right, title and interest in and to all of Seller’s books,
records, files, computer data, operating reports, plans and specifications and
other documentation to the extent relating to the ownership and operation of the
Hotel, including the list of Hotel Employees and records relating to the
Bookings but excluding (A) the personnel files and employment records for all
Hotel Employees (except for employees retained/rehired by Purchaser), (B) items
that belong to or are proprietary to Franchisor, Manager and either of their
affiliates or other third parties, (C) internal memoranda regarding the sale,
financing and/or valuation of the Hotel, and (D) materials and information that
are covered by the attorney-client privilege or any confidentiality agreement
entered into by or binding on Seller or Tenant or their affiliates
(collectively, the “Books and Records”);

 

 

(vii)

all of Seller’s right, title and interest in and to all contracts, reservations
and sales files for the use or occupancy of guest rooms of the Hotel
(collectively, the “Bookings”) and the aggregate amount of any deposits received
by or on behalf of Seller (whether paid in cash or by credit card) as a down
payment for any Bookings (the “Advance Deposits”);

 

 

(viii)

to the extent transferable by Seller, all of Seller’s right, title and interest
in and to all licenses, franchises, permits, certificates of occupancy,
authorizations and approvals used in or relating to the ownership, maintenance,
occupancy, operation or use of any part of the Hotel (collectively, the
“Permits”); and

 

 

(ix)

to the extent transferable by Seller, all of Seller’s right, title and interest
in and to, (1) all intangible personal property used in connection with the
ownership or

 

2

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operation of the Hotel, including, without limitation, telephone numbers, post
office boxes, warranties and guaranties, signage rights, utility and development
rights and privileges, general intangibles; and (2) all websites and domains
exclusively used for the Hotel (collectively, the “Intangible Assets”).

 

 

(c)          Excluded Assets. The following items are expressly excluded from
the transaction contemplated by this Agreement (collectively, the “Excluded
Assets”):

 

 

(i)

 

any fixtures, personal property or intellectual property owned by (1) third
parties (including, without limitation, equipment lessors, suppliers, vendors
and licensors) under Hotel Contracts or Permits, (2) Franchisor, (3) Manager,
(4) any Hotel Employees or (5) any guests or customers of the Hotel;

 

 

 

(ii)

 

all data and information relating to guests or customers of any hotel or lodging
property (including condominium or interval ownership properties) other than the
Hotel that are owned, leased, operated, licensed or franchised by Franchisor,
Manager or an affiliate of either of them, or any facility associated with such
hotels or other properties (including restaurants, golf courses and spas); and

 

 

 

(iii)

 

Any items expressly excluded from Section 1.2(b).

 

1.3         Due Diligence Period; Access; Review of Materials.

 

(a)          Investigations and Inspections. During the Due Diligence Period,
Seller shall use commercially reasonable efforts to cooperate with Purchaser in
connection with Purchaser’s investigations and inspections of the Hotel and the
conduct of the Business thereon. Prior to or within three (3) Business Days
after the Effective Date, Seller shall provide to Purchaser the Investigation
Documents; provided, however, that if any of the Investigation Documents are not
in Seller’s possession or reasonably available to Seller, Seller shall notify
Purchaser and Seller shall not be in breach or default of this Agreement for the
failure to provide such documents. From and after the Effective Date, except to
the extent that items constitute or relate to the Excluded Assets, Seller shall
promptly provide or make available to Purchaser such additional information,
documents or files relating to the Hotel and the conduct of the Business thereon
which are in Seller’s possession or control as Purchaser may reasonably request,
provided such request is not inconsistent with any provision of this Agreement
and as requested in writing. During the Due Diligence Period, Purchaser shall,
subject to the rights of Franchisor, Manager and the guests of the Hotel and the
limitations set forth below, have the right to enter upon the Real Property to
perform such physical inspections (including, without limitation, Phase I
environmental site assessments, engineering tests and studies, and other due
diligence investigations of the Real Property), surveys and studies, and review
such other matters related to the Hotel (including, without limitation, the
Hotel Contracts, the Permits, and the Books and Records), as Purchaser
reasonably deems necessary for its review of the Hotel (collectively,
“Inspections and Studies”). In connection with the Inspections and Studies:

 

(i)

Purchaser shall have the right, at its sole risk, responsibility, cost and
expense, to enter upon the Real Property at reasonable times and upon at least
twenty-four (24) hours advance notice to Seller for the purpose of conducting
such Inspections and Studies;

 

 

(ii)

Purchaser and its agents, contractors and consultants must be accompanied by an
employee, agent or representative of Seller or Manager;

 

3

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(iii)

 

such Inspections and Studies will be conducted during normal business hours on
Business Days;

 

 

 

(iv)

 

Purchaser and its agents, contractors and consultants shall not perform any
drilling, coring or other invasive testing or sampling, without Seller’s prior
written consent, which consent shall not be unreasonably withheld, conditioned
or delayed;

 

 

 

(v)

 

Purchaser’s right to perform the Inspections and Studies shall be subject to and
will not unreasonably interfere with or disturb the rights of guests at the
Hotel; and

 

 

 

(vi)

 

the Inspections and Studies shall not unreasonably interfere with the Business,
and Purchaser and its agents, contractors and consultants shall comply with
Seller’s requests with respect to the Inspections and Studies to minimize such
interference.

 

(b)          Insurance. Prior to conducting any on-site inspection of the Hotel,
other than mere visual examination, Purchaser shall obtain, and during the
period of such inspection or testing shall maintain, at its expense, commercial
general liability insurance, including a contractual liability endorsement, and
personal injury liability coverage, naming Seller, Tenant and Manager as
additional insureds, from an insurer reasonably acceptable to Seller, which
insurance policies must have limits for bodily injury and death of not less than
Two Million and No/100 Dollars ($2,000,000.00) for any one occurrence and not
less than Two Million and No/100 Dollars ($2,000,000.00) for property damage
liability for any one occurrence. Prior to making any entry upon the Real
Property other than for visual inspection, Purchaser shall furnish to Seller a
certificate of insurance evidencing the foregoing coverages.

 

(c)          Indemnity. Purchaser shall indemnify, defend and hold harmless
Seller, Manager, Tenant and their respective affiliates, subsidiaries, officers,
directors, members, shareholders, employees, representatives and agents from any
Claims arising from or related to Purchaser’s or its agents or contractors entry
upon the Real Property or any such Inspections and Studies, except (i) for the
discovery of existing conditions at the Hotel so long as following such
discovery Purchaser does not exacerbate such conditions through its actions, and
(ii) to the extent caused by Seller, Tenant or Manager, or any of their
respective agents, employees or contractors. After any such entry, Purchaser
shall promptly restore the Hotel to its prior condition, if its condition was
changed by such entry. This Section 1.3(c) shall survive the Closing and any
termination of this Agreement.

 

(d)          Contact with the Hotel Employees. Prior to the Closing, all contact
by Purchaser at the Hotel shall be coordinated through the Hotel’s General
Manager. Prior to the expiration of the Due Diligence Period, Purchaser shall
not interview any Hotel Employees (other than the Hotel’s General Manager)
outside the presence of a representative of Seller (which may include the
Hotel’s General Manager) without Seller’s prior consent. Between the expiration
of the Due Diligence Period and Closing, Purchaser shall have the right to
interview any such Hotel Employees for possible employment and any such
interview shall be conducted in the presence of the Hotel’s General Manager
(unless Seller agrees otherwise) and in accordance with Manager’s customary
policies and procedures for such interviews.

 

(e)          Destruction or Return of Materials. If Purchaser does not acquire
the Hotel for any reason whatsoever, Purchaser shall promptly destroy (i) all
materials provided to Purchaser by Seller and (ii) all materials and documents
obtained or commissioned by Purchaser in connection with its investigation of
the Hotel (with no retention by Purchaser of copies of any such materials and
documents). Purchaser

 

4

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agrees that the information contained in the aforesaid documents shall be deemed
confidential information subject to the terms and conditions of Section 11.13 of
this Agreement.

 

(f)           Termination. If Purchaser elects on or before expiration of the
Due Diligence Period, for no reason or for any reason whatsoever, in its sole
and absolute discretion, not to proceed with the transaction contemplated by
this Agreement, Purchaser will deliver written notice of such decision to Seller
and Escrow Agent, whereupon (i) this Agreement shall automatically terminate,
(ii) the Escrow Agent shall immediately release and return the Earnest Money
(including any interest accrued thereon) to Purchaser, (iii) each party shall
pay one-half (1/2) of the expenses of escrow and (iv) neither party shall have
any further obligation to the other party hereunder, except each party shall
continue to be obligated under the indemnity and other provisions in this
Agreement that survive termination (collectively, the “Surviving Obligations”). 
Except for Purchaser’s right to the Franchisor Approval Period as set forth in
Section 1.3(g), Purchaser’s failure to deliver to Seller and Escrow Agent a
written notice of termination on or before expiration of the Due Diligence
Period shall be deemed to constitute Purchaser’s election to proceed with the
transaction contemplated hereby.

 

(g)          New Franchise Agreement. From and after the Effective Date,
Purchaser shall work in good faith using commercially reasonable efforts to
cause Franchisor to commit in writing, in form and substance reasonable
acceptable to the parties, to at Closing: (i) terminate the Franchise Agreement,
with no cost, expense or liability to Seller or Tenant or any of their
affiliates and to release each of them from any and all obligation therewith
including releasing any and all guarantees given in connection with the
Franchise Agreement by any of them or any of their affiliates (pursuant to a
release in form and substance delivered by Franchisor in the ordinary course of
business under substantially similar circumstances), and (ii) allow Purchaser to
receive a license to operate the Hotel as a Hampton Inn Hotel after the Closing
pursuant to the New Franchise Agreement in the form and substance acceptable to
Purchaser (in Purchaser’s reasonable discretion) (collectively, the “Franchisor
Approval”). If Franchisor has not granted Franchisor Approval by the expiration
of the Due Diligence Period, Purchaser shall have an additional fifteen (15) day
period (the “Franchisor Approval Period”) solely to allow Purchaser to obtain
the Franchisor Approval; provided Purchaser shall be obligated to (a) deposit
the Second Deposit in accordance with Section 2.2(c), and (b) notify Seller in
writing, prior to the expiration of the Due Diligence Period, of its intent to
utilize the Franchisor Approval Period.  Upon receipt of the Franchisor Approval
during the Franchisor Approval Period, (i) the Franchisor Approval Period shall
automatically expire, and (ii) Purchaser shall have no further right to
terminate this Agreement pursuant to Section 1.3(f).  If Purchaser has not
obtained the Franchisor Approval by the last day of the Franchisor Approval
Period and delivered evidence of the same to Seller, (a) this Agreement shall
automatically terminate, (b) the Escrow Agent shall immediately release and
return the Earnest Money (including any interest accrued thereon) to Purchaser,
(c) each party shall pay one-half (1/2) of the expenses of escrow and (d)
neither party shall have any further obligation to the other party hereunder,
except for the Surviving Obligations.

 

(h)          Obligation to Purchase the Hotel. If Purchaser does not terminate
this Agreement in accordance with Section 1.3(f) or 1.3(g) above or as otherwise
expressly set forth in this Agreement, then Purchaser agrees, at Closing, to
purchase the Hotel and to assume all of the Hotel Contracts and to assume and
honor all of the Bookings.  Seller shall pay any transfer or other fee or
payment payable under any Hotel Contract as a result of the assignment and
assumption of such Hotel Contract in connection with the transfer of the Hotel. 
Seller shall use commercially reasonable efforts to obtain the consent to the
transfer of any Hotel Contract which requires such consent; provided, however,
Purchaser shall reasonably cooperate with Seller in obtaining any such consent.

 

II. CONSIDERATION

 

2.1         Purchase Price.

 

5

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The total purchase price for the Hotel shall be Twelve Million Five Hundred
Thousand and No/100 Dollars ($12,500,000.00) (the “Purchase Price”), as
increased or decreased by prorations and adjustments pursuant to and in
accordance with this Agreement, and will be paid by Purchaser by wire transfer
of immediately available good funds to Escrow Agent on the Closing Date.

 

2.2         Earnest Money.

 

(a)          Escrow Instructions. Concurrently with the execution and delivery
of this Agreement, Purchaser, Seller and Escrow Agent have executed or will
promptly execute escrow instructions (the “Escrow Instructions”), the form of
such Escrow Instructions being attached hereto as Exhibit “C”.

 

(b)          Good Faith Deposit. No later than 5:00 p.m. (Eastern Time) three
(3) Business Days after the Effective Date (the “Good Faith Deposit Date”),
Purchaser shall deposit the sum of Two Hundred Thousand and No/100 Dollars
($200,000.00) in cash as an earnest money deposit (together with any interest
earned thereon, the “Good Faith Deposit”) by wire transfer to Escrow Agent. If
the Good Faith Deposit is not timely made, Seller may terminate this Agreement
at any time prior to receipt by the Title Company of the Good Faith Deposit, in
which case this Agreement shall terminate (in which case neither party shall
have any further obligation to the other party hereunder, except for the
Surviving Obligations).

 

(c)          Second Deposit. If the Due Diligence Period expires without
Purchaser having terminated this Agreement, then no later than 5:00 p.m.
(Eastern Time) two (2) Business Days after the expiration of the Due Diligence
Period (the “Second Deposit Date”), Purchaser shall deposit an additional Two
Hundred Thousand and No/100 Dollars ($200,000.00) in cash as an earnest money
deposit (together with any interest earned thereon, the “Second Deposit”) by
wire transfer to Escrow Agent (the Good Faith Deposit and the Second Deposit and
any interest earned thereon are collectively referred to herein as the “Earnest
Money”).  Failure of Purchaser to make the Second Deposit as required pursuant
to this Section 2.2(c) shall be deemed a material default by Purchaser under
this Agreement and Seller shall have the rights set forth in Section 7.1.

 

(d)          Earnest Money. The Earnest Money shall be delivered to and held by
Escrow Agent in escrow in an interest-bearing account pursuant to the terms of
this Agreement and the Escrow Instructions. If the Closing occurs in accordance
with the terms and provisions of this Agreement, the Earnest Money shall be paid
to Seller and credited against the Purchase Price. If the Closing does not
occur, the Earnest Money (including interest accrued thereon) shall be held and
delivered as expressly provided in Sections 1.3(f), 1.3(g), 3.1, 4.1, 5.3, 7.1,
7.2, 8.1(b), 8.9, 8.10, 9.2 or 9.3, as applicable.

 

2.3         Allocation.

 

Prior to the expiration of the Due Diligence Period, Purchaser will notify
Seller in writing of the allocation of the Purchase Price between the Real
Property and the Personal Property, and such allocation shall be subject to
Seller’s reasonable approval. Seller and Purchaser agree to file federal, state
and local tax returns consistent with such allocations agreed upon between the
parties. If Purchaser and Seller cannot agree upon allocation of the Purchase
Price, each party shall file federal, state and local returns based on each
party’s own determination of the proper allocations of the Purchase Price, each
bearing its own consequences of any discrepancies.

 

III.
SURVEY

 

3.1         Survey.

 

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Seller shall, as part of the Investigation Documents required hereunder, deliver
to Purchaser a copy of the existing ALTA survey with respect to the Real
Property. Purchaser shall have the right, at its sole cost and expense, to have
a current ALTA/ACSM survey (the “Survey”) prepared. Purchaser shall on or before
the date that is ten (10) Business Days before the expiration of the Due
Diligence Period (the “Objection Period”), object in writing to any matters
shown on the Survey, which objection must be accompanied by a copy of the
Survey.  Purchaser’s failure to timely object to any such matters shall be
deemed to constitute Purchaser’s approval thereof.  If Purchaser timely objects
to any matters shown on the Survey, then Seller shall have the right, but not
the obligation, to (a) elect to cure such objections to Purchaser’s satisfaction
(in Purchaser’s sole and absolute discretion); or (b) subject to Section 8.1(b),
unconditionally and irrevocably agree in writing that such objections will be
cured to Purchaser’s satisfaction (in Purchaser’s sole and absolute discretion)
prior to or upon Closing.  Seller shall have until 5:00 p.m. (Eastern Time) on
the date which is three (3) Business Days after the Objection Period (the “Cure
Date”) to make its election pursuant to the immediately preceding sentence.  If
Seller timely cures or commits in writing to cure such objections to Purchaser’s
satisfaction (in Purchaser’s sole and absolute discretion), then the Survey
shall be deemed approved; provided, however, if Seller does not timely cure or
commit in writing to cure such objections to Purchaser’s satisfaction (in
Purchaser’s sole and absolute discretion) prior to the Cure Date, then Purchaser
shall, on or before the expiration of the Due Diligence Period (the “Review
Date”), either (i) terminate this Agreement by delivering to Seller a written
notice of termination, whereupon (A) this Agreement shall automatically
terminate, (B) the Escrow Agent shall immediately release and return the Earnest
Money (including any interest accrued thereon) to Purchaser, (C) each party
shall pay one-half (1/2) of the expenses of escrow and (D) neither party shall
have any further obligation to the other party hereunder, except for the
Surviving Obligations; or (ii) waive the objections that Seller has not cured or
committed to cure to Purchaser’s satisfaction, which shall then become Permitted
Exceptions. Purchaser’s failure to timely deliver to Seller and Escrow Agent a
written notice of termination shall be deemed to constitute Purchaser’s waiver
of such objections that Seller has not cured or committed to cure.

 

IV.
TITLE INSURANCE

 

4.1         Title Commitment.

 

(a)         Title Objections. Seller shall, as part of the Investigation
Documents required hereunder, deliver to Purchaser a copy of the existing title
insurance policy with respect to the Real Property, together with complete and
legible copies of all instruments and documents referred to therein which are in
Seller’s possession.  Purchaser, at its sole cost and expense, shall obtain a
preliminary title report for the Real Property (the “Title Report”) from First
American Title Insurance Company (the “Title Company”), together with complete
and legible copies of all instruments and documents referred to therein
(collectively, the “PTR Exceptions”).  Purchaser shall provide to Seller the
contact information of the Title Company as soon as practicable.  Purchaser
shall, on or before the expiration of the Objection Period, provide Seller with
a written description of its title requirements (the “Title Requirement
Letter”), including, without limitation, (A) the form and amount of such final
title policy, (B) all objections to any PTR Exceptions which are unacceptable to
Purchaser (which it may do in its sole and absolute discretion for any reason or
no reason) and setting forth the manner in which it will accept the removal or a
cure to such objected PTR Exceptions (the form of removal or cure being
acceptable to Purchaser in its sole and absolute discretion) (the “Title
Objections”) and (C) all title insurance endorsements required by Purchaser (the
form of such endorsements being acceptable to Purchaser in its sole and absolute
discretion) (the “Title Endorsements”).  Purchaser’s failure to timely deliver
the Title Requirement Letter shall be deemed to constitute Purchaser’s approval
of the PTR Exceptions, and such PTR Exceptions which Purchaser has been deemed
to approve shall then become Permitted Exceptions.  If Purchaser timely delivers
the Title Requirement Letter, then Seller shall have the right, but not the

 

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obligation, to elect to (a) cure such Title Objections to Purchaser’s
satisfaction (in Purchaser’s sole and absolute discretion); or (b) subject to
Section 8.1(b), unconditionally and irrevocably agree in writing that such Title
Objections will be cured to Purchaser’s satisfaction (in Purchaser’s sole and
absolute discretion) prior to or upon Closing.  Seller shall have until 5:00
p.m. (Eastern Time) on the Cure Date to make its election pursuant to the
immediately preceding sentence.  If Seller does not timely cure such Title
Objections to Purchaser’s satisfaction (in Purchaser’s sole and absolute
discretion) prior to the Cure Date or unconditionally and irrevocably agree in
writing that such objections will be cured to Purchaser’s satisfaction (in
Purchaser’s sole and absolute discretion) prior to Closing, then Purchaser
shall, on or before the Review Date, either (i) terminate this Agreement by
delivering to Seller a written notice of termination, whereupon (A) this
Agreement shall automatically terminate, (B) the Escrow Agent shall immediately
release and return the Earnest Money (including any interest accrued thereon) to
Purchaser, (C) each party shall pay one-half (1/2) of the expenses of escrow and
(D) neither party shall have any further obligation to the other party
hereunder, except for the Surviving Obligations; or (ii) waive its objection to
the disapproved items that Seller has not cured or committed in writing to cure
to Purchaser’s satisfaction, which shall then become Permitted Exceptions.
Purchaser’s failure to timely deposit with Seller and Escrow Agent a written
notice of termination shall be deemed to constitute Purchaser’s waiver of its
Title Objections to said items and such items shall become Permitted Exceptions.

 

(b)          Intervening Liens. Subjection to Section 8.1(b), In the event of
any encumbrances (of the type of the PTR Exceptions) on Seller’s title to the
Real Property which are created after the effective date of the Title Report
(other than Permitted Exceptions) (each, an “Intervening Lien”), Purchaser and
Seller agree that (i) to the extent that there exist any Intervening Liens which
arise by, under or through Seller (each a “Seller’s Lien”), Seller, at its
expense, shall undertake all necessary actions to remove and cure any and all
Seller’s Liens to Purchaser’s satisfaction (in Purchaser’s sole and absolute
discretion) prior to Closing; and (ii) to the extent that there exist any
Intervening Liens which arise by, under or through a third party, Seller, at its
expense, shall use commercially reasonable efforts to remove and cure any and
all such Intervening Liens to Purchaser’s satisfaction (in Purchaser’s sole and
absolute discretion) prior to Closing.  In the event that any Intervening Liens
exist at Closing, Purchaser shall have the right, as its sole and exclusive
remedy, to terminate this Agreement and in the event of such termination (A)
this Agreement shall automatically terminate, (B) the Escrow Agent shall
immediately release and return the Earnest Money (including any interest accrued
thereon) to Purchaser, (C) each party shall pay one-half (1/2) of the expenses
of escrow and (D) neither party shall have any further obligation to the other
party hereunder, except for the Surviving Obligations.  In the event that Seller
obtains actual knowledge of any Intervening Lien, Seller shall promptly bring
any such Intervening Lien to Purchaser’s attention. Notwithstanding the
foregoing, Purchaser shall be responsible for any and all liens which arise by,
under or through Purchaser.

 

V.REPRESENTATIONS AND WARRANTIES

 

5.1         Seller’s Representations and Warranties.

 

Seller represents and warrants to Purchaser, as of the Effective Date, that:

 

(a)          Organization. Seller is a duly organized and validly existing
limited liability company, is in good standing in the State of Delaware, is
qualified to transact business in the Commonwealth of Massachusetts, and has
full power to enter into this Agreement and to perform its obligations under
this Agreement.

 

(b)          Authorization. The execution and delivery of this Agreement has
been duly authorized by all necessary and appropriate action of Seller.

 

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(c)          Consents and Conflicts. No consent or approval of any person,
entity, or governmental authority is required with respect to the execution and
delivery of this Agreement by Seller or to authorize the consummation by Seller
of the transactions contemplated hereby or the performance by Seller of its
obligations under this Agreement. The execution, delivery and performance of
this Agreement by Seller and the consummation of the transactions contemplated
hereby by Seller (i) will not violate any provision of the Seller’s
organizational or governing documents; (ii) will not violate any Laws; (iii)
will not result in the creation or imposition of any lien or encumbrance on the
Hotel or any portion thereof; and (iv) is not prohibited by any material
agreement to which Seller is a party or may be bound.

 

(d)          Solvency. Neither Seller, nor any of its respective members or
managers, has made or filed, with respect to any Person or entity, any general
assignment for the benefit of creditors, become insolvent or filed a petition
for voluntary bankruptcy or filed a petition or answer seeking reorganization or
an arrangement or composition, extension or readjustment of its indebtedness or
consented, in any creditors’ proceeding, to the appointment of a receiver or
trustee of Seller or the property or any part thereof of either of them or been
named in an involuntary bankruptcy proceeding and to Seller’s knowledge, no such
actions are contemplated or have been threatened.

 

(e)          Space Leases. There are no Space Leases affecting all or any
portion of the Hotel.

 

(f)          Equipment Leases. There are no Equipment Leases affecting the Hotel
except as set forth in Exhibit “J” to this Agreement. True and complete copies
of the Equipment Leases (including all amendments), have been provided to
Purchaser or will be provided to Purchaser pursuant to Section 1.2(b). All of
the Equipment Leases described in Exhibit “J” are in full force and effect, and,
to Seller’s knowledge, there are no material defaults by any party thereunder
except as disclosed in Exhibit “J”.

 

(g)          Material Contracts. There are no Material Contracts affecting the
Hotel except as set forth in Exhibit “D” to this Agreement. True and complete
copies of the Material Contracts (including all amendments), have been provided
to Purchaser or will be provided to Purchaser pursuant to Section 1.2(b). All of
the Material Contracts described in Exhibit “D” are in full force and effect,
and, to Seller’s knowledge, there are no material defaults by any party
thereunder except as disclosed in Exhibit “D”.

 

(h)          Permits. True and complete copies of the Permits, to the extent in
Seller’s or Manager’s possession or control, have been provided to Purchaser or
will be provided to Purchaser pursuant to Section 1.3(a). Except as otherwise
disclosed to Purchaser on Exhibit “E,” Seller has not received any written
notice of any uncured violations of any Permit, and to Seller’s knowledge, all
of the Permits described in Exhibit “E” are in full force and effect.

 

(i)            Title to Personal Property. Seller has good and valid title to
all tangible Personal Property, which shall be free and clear of all liens and
encumbrances as of the Closing, except for the Equipment Leases, which shall be
subject only to the ownership interest of the lessor thereunder.

 

(j)           Condemnation. Seller has received no written notice of any pending
condemnation proceeding or other proceeding in eminent domain, and to Seller’s
actual knowledge, no condemnation proceeding or eminent domain proceeding is
threatened affecting the Real Property or any portion thereof.

 

(k)          Compliance with Applicable Law. Within the last two (2) years,
Seller has received no written notice from any governmental authority of any
violation of any applicable Law with respect to the Hotel which has not been
cured or dismissed.

 

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(l)         Litigation. Seller is not currently involved in any litigation,
administrative action, arbitration or similar adjudicatory proceeding with
respect to the Hotel which has not been resolved, settled or dismissed, nor to
Seller’s actual knowledge have any of the foregoing been threatened which, if,
adversely determined, could reasonably be expected to have a material adverse
effect on the operation of the Hotel or the Business.

 

(m)       Employees. Seller does not have any employees and is not a party to
any written employment, collective bargaining agreement or compensation
agreement. To Seller’s actual knowledge, there are no union organization efforts
pending or threatened with respect to any of the Hotel Employees.

 

(n)        Sales and Use Taxes. To Seller’s actual knowledge, all sales and use
taxes (other than those sales taxes, if any, arising from the sale of the Real
Property and the Personal Property from Seller to Purchaser), hotel/motel
occupancy taxes, real and personal property taxes, employer withholding taxes
and similar taxes that are due as of the Closing have been paid in full (or will
be provided for at the Closing pursuant to the provisions of Section 8.2), and
all required reports and returns relating thereto have been, or will be, timely
filed. Seller has not received written notice of any special tax assessment
relating to the Hotel or any portion thereof, and there are no tax agreements in
place affecting the Real Property.

 

(o)        Financial Statements. Seller has provided or will provide to
Purchaser all books and records, financial reports, profit and loss statements,
financial statements pertaining to the Hotel and any year-to-date financial
statements and operating budgets prepared for the Hotel for the current year. To
Seller’s actual knowledge, all such statements are in all material respects true
and complete and fairly represent the financial condition of Seller and the
Hotel as of the dates stated therein.

 

(p)        Improvements.  Except as set forth on Exhibit “K,” any and all
construction contracts or development and/or other agreements for the
performance of any work on or improvement at, or for the benefit of, the Hotel
entered into by Seller shall be terminated or completed and fully paid on or
before Closing, and, except as set forth on any of the Exhibits attached hereto,
there is no amount remaining to be paid under any such construction contracts or
development or other agreements, nor, to Seller’s actual knowledge, any
liability or obligation with respect thereto that is reasonably likely to be or
become, or give rise to a claim of, a lien against the Hotel or any of the
Personal Property.  There are no ongoing capital improvement projects at the
Hotel that have commenced on or before the date hereof that will not be
completed prior to Closing.

 

(q)        Environmental Notices. Seller has received no written notice from any
governmental authority alleging or otherwise asserting that the Hotel or their
operation are in violation of any law, rule or regulation relating to Hazardous
Substances.

 

(r)        Environmental Matters. The Seller has received no written notice from
any governmental authority that any of the Real Property or Seller is not in
compliance with all Hazardous Waste Laws.  Seller has received no written notice
from any governmental agency, board or department that Seller does not have all
required governmental permits and licenses, if any, relating to Hazardous
Substances.

 

(s)        Foreign Person. Seller is not a “foreign person” as defined in the
Foreign Investment in Real Property Tax Act of 1980, as amended.

 

(t)         Foreign Corrupt Practices. Neither Seller nor any of its affiliates,
or their respective employees, officers, directors, representatives or agents
is, nor will they become, (i) a person or entity with whom U.S. persons or
entities are restricted from doing business under any OFAC regulations

 

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(including those named on OFAC’s Specially Designated Nationals and Blocked
Persons List any other similar list maintained by the Office of Foreign Assets
Control, Department of the Treasury or the Department of Foreign Affairs and
International Trade (Canada), pursuant to any authorizing statute, executive
order or regulation) or under any statute, executive order (including the
September 24, 2001, Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism,
as the same has been from time to time updated and amended), or other
governmental action and is not and will not assign or otherwise transfer this
Agreement to, contract with or otherwise engage in any dealings of transactions
or be otherwise associated with such persons or entities; or (ii) a Person
either (a) included within the term “designated national” as defined in the
Cuban Assets Control Regulations, 31 C.F.R. Part 515; or (b) designated under
Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order No. 13224, 66 Fed. Reg.
49079 (published September 25, 2001) or a person similarly designated under any
related enabling legislation or any other similar Executive Orders.

 

The representations and warranties of Seller shall survive the Closing as and to
the extent provided in Sections 5.4 and 5.5. Seller shall indemnify, defend and
hold Purchaser harmless from and against any Claim arising or resulting from a
breach of any of Seller’s representations or warranties pursuant to Sections
5.5.

 

5.2       Purchaser’s Representations and Warranties.

 

Purchaser represents and warrants to Seller, as of the Effective Date, that:

 

(a)        Organization. Purchaser is a duly organized and validly existing
limited liability company, is in good standing in the State of Delaware and has
full power to enter into this Agreement and to perform its obligations under
this Agreement.

 

(b)        Authorization. The execution and delivery of this Agreement has been
or will be duly authorized by all necessary and appropriate action of Purchaser.

 

(c)        Consents and Conflicts. No consent or approval of any person, entity,
or governmental authority is required with respect to the execution and delivery
of this Agreement by Purchaser or the consummation by Purchaser of the
transactions contemplated hereby or the performance by Purchaser of its
obligations under this Agreement except for such consents as shall be obtained
by Purchaser prior to the Closing.

 

(d)        Foreign Corrupt Practices. Neither Purchaser nor any of its
affiliates, or their respective employees, officers directors, representatives
or agents is, nor will they become, (i) a person or entity with whom U.S.
persons or entities are restricted from doing business under any OFAC
regulations (including those named on OFAC’s Specially Designated Nationals and
Blocked Persons List any other similar list maintained by the Office of Foreign
Assets Control, Department of the Treasury or the Department of Foreign Affairs
and International Trade (Canada), pursuant to any authorizing statute, executive
order or regulation) or under any statute, executive order (including the
September 24, 2001, Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism,
as the same has been from time to time updated and amended), or other
governmental action and is not and will not assign or otherwise transfer this
Agreement to, contract with or otherwise engage in any dealings of transactions
or be otherwise associated with such persons or entities; or (ii) a Person
either (a) included within the term “designated national” as defined in the
Cuban Assets Control Regulations, 31 C.F.R. Part 515; or (b) designated under
Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order No. 13224, 66 Fed. Reg.
49079 (published September 25, 2001) or a person similarly designated under any
related enabling legislation or any other similar Executive Orders.

 

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The representations and warranties of Purchaser shall survive the Closing as and
to the extent provided in Sections 5.4 and 5.5. Purchaser shall indemnify and
hold Seller harmless from and against any Claim arising or resulting from a
material breach of any of Purchaser’s representations or warranties pursuant to
Sections 5.5.

 

5.3       Remedies Prior to Closing.

 

By executing and delivering the Seller’s Certificate, Seller shall be deemed to
have made all of the representations and warranties of Seller in Section 5.1
above and elsewhere in this Agreement, as of the Effective Date and as of the
Closing.  Should Seller obtain knowledge that any of such representations and
warranties are incorrect in any material respect prior to the Closing, Seller
shall immediately advise Purchaser in writing of the same and Seller shall have
the option, but not the obligation, to cure same to Purchaser’s satisfaction (in
Purchaser’s reasonable discretion) by the Closing Date, and upon Seller’s
election to attempt such cure as evidenced by written notice to Purchaser, the
Closing shall, at Purchaser’s option, be postponed until Purchaser’s receipt of
proof satisfactory to Purchaser (in Purchaser’s reasonable discretion) that such
matters have been cured; provided, however, if Purchaser elects not to extend
the Closing Date or Seller is unable or unwilling to cure the same within
fifteen (15) days after the scheduled Closing Date, Purchaser shall have the
option either to (i) waive the same by proceeding to close the transaction, or
(ii) to terminate this Agreement.  In the event Purchaser elects to terminate
this Agreement pursuant to the immediately prior sentence, Section 7.2 shall
control the rights, remedies and obligations of the parties.  Notwithstanding
the foregoing, Seller shall have no obligation to cure, and Purchaser shall have
no right to terminate this Agreement on account of a supplement or amendment to
Seller’s representations and warranties which (a) arises on account of Seller’s
Ordinary Course of Business; or (b) does not have a materially adverse effect on
the Hotel or the Business. In the event Purchaser waives or is deemed to have
waived a breach of Seller’s representations and warranties in accordance with
this Section 5.3 and proceeds to Closing, such waiver shall be deemed to include
any and all Claims associated with the same, including any post-closing
survivability or post-closing indemnity.  If, prior to the Closing, Purchaser
obtains actual knowledge that any representation or warranty of Seller is
inaccurate or incorrect and Purchaser nonetheless proceeds with the Closing,
Seller shall have no liability for any such inaccurate or incorrect
representation or warranty.

 

5.4       Survival.

 

The representations and warranties of Seller and Purchaser as set forth herein
shall expressly survive the Closing for a period of nine (9) months and
thereafter will automatically expire unless Purchaser has given written notice
to Seller of a breach of any such representation or warranty prior to the
expiration of the nine (9) month period following the Closing.

 

5.5       Indemnification.

 

(a)        Seller’s Indemnification Obligations.

 

(i)

Seller hereby acknowledges, covenants and unconditionally, absolutely and
irrevocably, agrees to indemnify, protect, defend and hold harmless, as well as
reimburse, Purchaser and its affiliates and their respective parents,
affiliates, shareholders, officers, directors, members, partners, trustees,
agents, representatives and employees (collectively, the “Related Parties”) to
the fullest extent provided by law, from and against, and for, any and all
Claims brought by or otherwise commenced on behalf of any third party, and all
actual, out-of-pocket and/or, subject to the terms of this Agreement, economic
damages, liabilities, any amounts reasonably incurred to settle any Claims, and
losses

 

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(including, without limitation, reasonable attorneys’ fees and
costs)(collectively, “Losses”) (but in all cases without duplication with
respect to any and all payments made by or on behalf of Seller for a breach or
default under the certificates and declarations provided to the Title Company in
connection with the Closing hereunder (but excluding in either case, fraud or
intentional misrepresentation by Seller (to the extent caused by Seller’s
actions)) actually incurred by Purchaser or any Related Parties or the Hotel as
a direct result of such Claims, to the extent the Closing occurs and such Claims
and Losses result from any of the following (collectively, the “Indemnity
Obligations”): (1) any one or more breach by Seller of Seller’s representations
or warranties and/or of any covenant of Seller contained in this Agreement that
expressly survives the Closing, but only to the extent that such Claims in the
aggregate exceed Fifty Thousand and No/100 Dollars ($50,000.00) (the
“Threshold”) (provided that such indemnity shall be for the aggregate Losses
incurred thereby measured by the first dollar of Loss); (2) any failure Seller
to have reported and/or paid any and all transfer taxes assessed or assessable
by any governmental authority arising or related in any way to the sale of the
Hotel, as well as any and all penalties and interest related to any such
transfer taxes; (3) the Excluded Assets; (4) any Employee Claim to the extent
attributable to their employment at the Hotel prior to the Closing Date, (5) any
physical or personal injury or death caused to any person, or damage to property
of unaffiliated third parties, to the extent such injury, death or damage
occurred prior to the Closing Date in connection with the Hotel, and (6) except
(A) as may be the obligation of Purchaser pursuant to an express provision of
this Agreement or (B) for any item for which Purchaser receives a credit at
Closing (to the extent of such credit), any Claims brought by a third party to
the extent arising from acts, omissions or occurrences that occur or accrue in
connection with the Hotel prior to the Closing Date, including, without
limitation, with respect to the Hotel Contracts.

 

 

 

(ii)

 

Notwithstanding the foregoing: (1) Purchaser shall have no right to file an
action for rescission in connection with any breaches of Seller’s
representations or warranties; (2) Seller’s aggregate liability to Purchaser
with respect to any and all such breaches of Seller’s representations or
warranties, and breaches of any of Seller’s covenants that expressly survive the
Closing or in any Seller closing document shall not exceed three percent (3%) of
the Purchase Price (the “Post-Closing Liability Cap”) and Purchaser hereby
waives any damages, costs and expenses in excess of said amount; provided,
however, the Post-Closing Liability Cap shall not apply in the event of Seller’s
fraud; (3) except for Claims arising based on any breach of the express
representations and warranties of Seller set forth in Section 5.1 and elsewhere
in this Agreement or in any closing documents to be delivered by Seller to
Purchaser at Closing, neither Claims for change to or remediation of the
physical, structural or environmental condition of the Hotel nor Claims of any
government or governmental agency or authority relating to the physical,
structural or environmental condition of the Hotel are subject to
indemnification by Seller under Section 5.5(a)(i); or (4) Seller shall not be
liable for any incidental, consequential, indirect, punitive, special or
exemplary damages, or for lost profits, unrealized expectations or other similar
claims except those of third parties against which Seller has indemnified
Purchaser. In the event that Purchaser actually recovers any insurance proceeds
or any indemnity, contribution or other similar payment from any insurance
company, tenant, or other third party for damages against which Seller
indemnified and

 

 

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actually paid Purchaser under this Agreement, then to the extent Purchaser’s
damages did not exceed the amount paid by Seller to Purchaser, Purchaser shall
promptly reimburse Seller to the extent of any such double-recovery.

 

(b)        Purchaser’s Indemnification Obligations.

 

(i)

Purchaser hereby acknowledges, covenants and unconditionally, absolutely and
irrevocably, agrees to indemnify, protect, defend and hold harmless, as well as
reimburse, Seller and Seller’s Related Parties to the fullest extent provided by
law, from and against, and for, any and all Claims brought by or otherwise
commenced on behalf of any third party, and all Losses actually incurred by
Seller or any of Seller’s Related Parties as a direct result of such Claims, to
the extent the Closing occurs and such Claims and Losses result from any of the
following: (1) any one or more breach by Purchaser of Purchaser’s
representations or warranties and/or of any covenant of Purchaser contained in
this Agreement that expressly survives the Closing, but only to the extent that
such Claims in the aggregate exceed the Threshold (provided that such indemnity
shall be for the aggregate Losses incurred thereby measured by the first dollar
of Loss); (2) Employee Claims to the extent attributable to their employment at
the Hotel from and after the Closing Date, but only to the extent that such
claims accrue on or after the Closing Date, (3) any physical or personal injury
or death caused to any person, or damage to property of unaffiliated third
parties, to the extent such injury, death or damage occurred on or after the
Closing Date in connection with the Hotel, and (4) except (A) as may be the
obligation of Seller pursuant to an express provision of this Agreement and with
respect to which Purchaser did not receive a credit at Closing or (B) for any
item for which Seller receives a credit at Closing (to the extent of such
credit), any Claims brought by a third party to the extent arising from acts,
omissions, or occurrences that occur or accrue in connection with the Hotel on
or after the Closing Date, including, without limitation, with respect to the
Hotel Contracts and Space Leases.

 

 

(ii)

Notwithstanding the foregoing, (1) Seller shall have no right to file an action
for rescission in connection with any breaches of Purchaser’s representations or
warranties, (2) Purchaser’s aggregate liability to Seller with respect to any
and all such breaches of Purchaser’s representations or warranties, and breaches
of any of Purchaser’s covenants that expressly survive the Closing or in any
Purchaser closing document shall not exceed the Post-Closing Liability Cap and
Seller hereby waives any damages, costs and expenses in excess of said amount;
provided, however, the Post-Closing Liability Cap shall not apply in the event
of Purchaser’s fraud; and (3) Purchaser shall not be liable for any incidental,
consequential, indirect, punitive, special or exemplary damages, or for lost
profits, unrealized expectations or other similar claims except those of third
parties against which Purchaser has indemnified Seller. In the event that Seller
actually recovers any insurance proceeds or any indemnity, contribution or other
similar payment from any insurance company, tenant, or other third party for
damages against which Purchaser indemnified and actually paid Seller under this
Agreement, then to the extent Seller’s damages did not exceed the amount paid by
Purchaser to Seller, Seller shall promptly reimburse Purchaser to the extent of
any such double-recovery.

 

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(c)        Survival. The provisions of this Section 5.5 shall survive the
Closing for a period of one (1) year (except with respect to either party’s
representations and warranties, for which the survival period shall correspond
to the survival period for the applicable representations and warranties in
Section 5.4), and a party will be entitled to indemnification only for those
matters as to which it has given written notice to the party which is to provide
indemnification prior to the expiration of the one (1) year period following the
Closing (or the applicable period set forth in Section 5.4).

 

VI.
COVENANTS

 

6.1        Seller’s Covenants.

 

Seller covenants and agrees to perform (and where applicable, Seller agrees to
cause Tenant to perform and agrees to use commercially reasonable efforts to
cause Manager to perform) the following covenants from the Effective Date to the
Closing:

 

(a)        Cooperation. Seller shall assist Purchaser and Purchaser’s agents, on
or before Closing, in acquiring all information necessary to enable Purchaser’s
agents and Seller’s agents to compute the prorations described in Section 8.2.

 

(b)        Personal Property. Seller will not, without the prior approval of
Purchaser, which approval shall not be unreasonably withheld or delayed, sell,
exchange, assign, transfer, convey, lease or otherwise dispose of all or any
part of the Personal Property or any interest therein except for Furnishings,
Consumables and Expendables in the Ordinary Course of Business; provided,
however, that in the event Purchaser fails to respond to Seller within three (3)
Business Days after Purchaser is notified of such desired disposition, such
failure to respond shall be deemed to constitute Purchaser’s approval of same.

 

(c)        Material Contracts. Prior to the expiration of the Due Diligence
Period, Seller will not, and will not permit Tenant or Manager to, amend in any
material respect or terminate any Material Contracts or Permits (except as
required by the terms thereof) without the prior approval of Purchaser, which
approval shall not be unreasonably withheld or delayed; provided, however, that
in the event Purchaser fails to respond to Seller within three (3) Business Days
after Purchaser is notified of such proposed amendment or termination, such
failure to respond shall be deemed to constitute Purchaser’s approval of same.
Notwithstanding the foregoing, from and after the expiration of the Due
Diligence Period, Seller shall not (i) amend, extend or terminate any Material
Contracts and/or Permits without the prior consent of Purchaser (in Purchaser’s
reasonable discretion); or (ii) enter into new Material Contracts, without the
prior consent of Purchaser (in Purchaser’s sole and absolute discretion). Seller
will pay all charges prior to delinquency under such Material Contracts, and
Seller will perform all of its obligations under such Material Contracts
accruing through the Closing Date.

 

(d)        Liens. Seller will not enter into any contracts, licenses, easements
or other agreements relating to the Hotel which will obligate Purchaser or be a
charge or lien against the Hotel, except those necessary to continue the
Business and operation of the Hotel in the Ordinary Course of Business and which
are terminable without penalty on no more than thirty (30) days notice, without
the prior approval of Purchaser, which approval shall not be unreasonably
withheld or delayed; provided, however, that in the event Purchaser fails to
respond to Seller within three (3) Business Days after Purchaser is notified of
Seller’s intention to take such proposed actions, such failure to respond shall
be deemed to constitute Purchaser’s approval of same. Seller shall promptly
provide written notice to Purchaser of any new agreements entered into by Seller
pursuant to this Section 6.1, along with a copy of any such agreements.

 

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(e)        Operations in Ordinary Course of Business. Seller will cause the
Hotel to be operated and maintained in the Ordinary Course of Business which
undertaking includes, but is not limited to, (i) maintaining the levels of
inventories of Expendables, Furnishings and Consumables in the Ordinary Course
of Business, including without limitation all linens and terry, (ii) instructing
Manager to enter into Bookings on Seller’s behalf in the Ordinary Course of
Business, and (iii) performing maintenance and repairs for the Hotel in the
Ordinary Course of Business.

 

(f)         Insurance. Seller will maintain until the Closing Date the existing
insurance coverage for the Hotel.

 

(g)        Books and Records. Seller shall maintain its Books and Records in the
Ordinary Course of Business, in accordance with sound accounting principles
applied on a basis consistent with the basis used in keeping its Books and
Records in prior years. At the Closing, Purchaser shall become the owner of all
Books and Records except for Excluded Assets; provided, however, Seller or
Manager may, prior to or at the Closing, photocopy and remove such photocopies
from the Hotel any of the Books and Records other than the Bookings. After the
Closing, Purchaser shall provide to the officers, employees, agents and
representatives of Seller reasonable access to (i) the Books and Records with
respect to the Hotel, (ii) the employees at the Hotel, for any purpose deemed
necessary or advisable by Seller, including, without limitation, to prepare any
documents required to be filed by Seller under applicable Laws or to
investigate, evaluate and defend any claim, charge, audit, litigation or other
proceeding made by any person or insurance company involving Seller, Tenant or
Manager or their officers, employees, agents and representatives; provided,
however, that (A) Seller shall provide reasonable prior notice to Purchaser; (B)
Purchaser shall not be required to provide such access during non-business
hours; and (C) Purchaser shall have the right to accompany the officer,
employees, agents or representatives of Seller in providing access to the Books
and Records, the Hotel or the employees of Purchaser (or Purchaser’s manager).
This Section 6.1(g) shall survive the Closing.  Without limiting the foregoing
and in addition thereto, Seller shall, from time to time, upon reasonable
advance notice from Purchaser, provide Purchaser and its representatives, agents
and employees with access to all financial and other information in its
possession relating to the Hotel pertaining to the period of Seller’s ownership
and operation of the Hotel, including, without limitation, the information set
forth on Exhibit “L” attached hereto, provided that, for a reasonable period
after the Closing, but in no event longer than one hundred eighty (180) days
after the Closing Date, Seller acknowledges and agrees to use its commercially
reasonable efforts (at Purchaser’s sole cost and expense) to also provide the
same upon request by Purchaser or its accountants.  This Section 6.1(g) shall
survive Closing for a period of twelve (12) months.

 

(h)        Promotion of Business. Seller shall cause Tenant and Manager to
continue to use their commercially reasonable efforts to take guest room
reservations and to otherwise promote the business of the Hotel in the Ordinary
Course of Business; and all advance room bookings and reservations shall be
booked at rates, prices and charges heretofore customarily charged by them for
such purposes in the Ordinary Course of Business. Seller acknowledges that the
Purchase Price includes the transfer of Bookings.

 

(i)         Operating Lease and Management Agreement. At or prior to Closing,
Seller shall cause the Operating Lease and the Management Agreement to be
terminated, in each case, without any liability or lost cost assumed by
Purchaser and Seller agrees to indemnify Purchaser and the Hotel against any and
all Claims brought by Tenant and/or Manager or any of their respective
affiliates.

 

6.2        Purchaser’s Covenants.

 

Purchaser, or its affiliate, is an experienced purchaser, owner and operator of
hotels and real property such as the Hotel, and Purchaser acknowledges and
agrees that Purchaser has made, or will make

 

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prior to Closing, such independent investigations, inspections, analyses and
research as Purchaser has deemed necessary or appropriate (or, in the
alternative, Purchaser has elected at its risk not to make such investigations,
inspections, analyses and research), concerning the condition, ownership, use
and operation of the Hotel, including, but not limited to, investigations,
inspections, analyses and research of: (a) present and future Laws and
restrictions concerning the use, location and suitability of the Hotel or any
existing or proposed development or build-out or condition thereof, including,
but not limited to, zoning, environmental, barrier removal and other such Laws;
(b) the necessity and availability of any building permits, environmental impact
reports, or any other governmental permits, approvals, entitlements or acts in
respect of the Hotel; (c) the necessity or existence of any dedications, fees,
charges, costs or assessments that may be imposed in connection with any Laws or
the obtaining of any items set forth in subsection (b); (d) the economic value
of the Hotel; (e) the seismic and structural integrity of the Hotel
Improvements; (f) any surface, soil, subsoil, geologic or ground water
conditions or other physical conditions of or affecting the Hotel; (g) the
extent or condition of title to the Hotel and the extent of existing
encumbrances against the Hotel, as reflected in the Survey and Title Report; (h)
the operation and management of the Hotel; (i) any employment matters affecting
the Hotel; and (j) the presence, use, transportation or storage of Hazardous
Substances on, over, under or nearby the Real Property.

 

VII.
REMEDIES

 

7.1       Seller’s Remedies.

 

Due to the fluctuation in land values, the unpredictable state of the economy
and of governmental regulations, the fluctuating money market for real estate
loans of all types, and other factors which directly affect the value and
marketability of the Hotel, the parties recognize that it would be extremely
difficult and impracticable, if not impossible, to ascertain with any degree of
certainty the amount of damages which would be suffered by Seller in the event
of Purchaser’s failure to perform its obligations under this Agreement to
purchase the Hotel. Accordingly, the parties agree that a reasonable estimate of
Seller’s damages in such event is the amount of the Earnest Money, and if
Purchaser defaults in any material respect in performing the obligations under
this Agreement to close the purchase of the Hotel, including, but not limited
to, its obligations under Section 8.4(b), then Seller, after delivery of written
notice to Purchaser of such failure and the expiration of a five (5) Business
Day cure period from delivery of such notice, shall be entitled to immediately
terminate this Agreement by giving Purchaser written notice to such effect, and
receive and retain the Earnest Money (including interest accrued thereon) as
liquidated damages which retention thereof shall be Seller’s sole and exclusive
remedy under this Agreement, at law or in equity, for such breach of default to
close the transaction contemplated under this Agreement. In addition, (i)
Purchaser shall pay the expenses of escrow, and (ii) each party shall continue
to be obligated under the Surviving Obligations. Upon the occurrence of a
Purchaser default entitling Seller to receive and retain the Earnest Money
(including interest accrued thereon) as liquidated damages and following the
proper termination of the Agreement by Seller pursuant to this Section 7.1,
Purchaser hereby waives and releases all rights to purchase the Hotel and upon
demand from Seller, Purchaser agrees to evidence such waiver and release in
written form satisfactory to Seller.

 

7.2       Purchaser’s Remedies.

 

If Seller defaults in any material respect in performing its obligations under
this Agreement to close the sale of the Hotel, including but not limited to its
obligations under Section 8.4(a), then Purchaser shall have the right, after
delivery of written notice to Seller of such failure and the expiration of a
five (5) Business Day cure period from delivery of such notice, to exercise any
one of the following as Purchaser’s sole and exclusive remedy:

 

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(a)        proceed to Closing without any reduction in or set-off against the
Purchase Price, in which case Purchaser shall be deemed to have waived Seller’s
default in performing its obligations and covenants under this Agreement or
Seller’s incorrect representations and warranties and such waiver will be deemed
to include any and all Claims associated with the same, including any
post-closing survivability or post-closing indemnity; or

 

(b)        terminate this Agreement by giving Seller written notice of such
election prior to or at the Closing whereupon (i) Escrow Agent shall immediately
return the Earnest Money (including interest accrued thereon) to Purchaser, (ii)
Seller shall reimburse Purchaser within ten (10) Business Days following demand
by Purchaser for all of Purchaser’s documented out-of-pocket costs of the
transaction actually incurred to third parties, including reasonable attorney’s
fees and costs incurred in connection with this Agreement and the investigation
of the Hotel, not to exceed a total of One Hundred Fifty Thousand and No/100
Dollars ($150,000.00), and (iii) neither party to this Agreement shall
thereafter have any further rights or liabilities under this Agreement, except
that (A) Seller shall pay the expenses of escrow, (B) each party shall continue
to be obligated under the Surviving Obligations; or

 

(c)        pursue the remedy of specific performance to the extent available as
a legal or equitable remedy.

 

If Purchaser fails to elect, by written notice to Seller, any of the foregoing
remedies within ten (10) Business Days after Purchaser’s delivery of the default
notice contemplated by this Section 7.2, Purchaser shall conclusively be deemed
to have elected the remedy set forth in Section 7.2(a).

 

7.3       Holdback.

 

From and after Closing, Seller shall maintain a positive cash balance of no less
than Three Hundred Seventy Five Thousand and No/100 Dollars ($375,000.00) (the
“Holdback”) for nine (9) months following the Closing Date (as may be extended
pursuant to this Agreement) for the purpose of discharging the obligations of
Seller set forth in this Agreement which survive Closing (including, without
limitation, the indemnification obligations set forth in Section 5.5).  Seller
may commingle the Holdback with other funds of Seller, but the Holdback may not
be transferred, pledged or otherwise encumbered.  At the end of such nine (9)
month period, Seller may disburse or otherwise utilize the funds in Seller’s
sole and absolute discretion.  Seller’s obligations under this Section 7.3 shall
survive the Closing.

 

7.4       Attorneys’ Fees.

 

If any litigation or other enforcement proceeding is commenced in connection
with this Agreement, then the prevailing party shall be entitled to receive
payment of its reasonable attorneys’ fees and expenses and court costs from the
other party (and in addition to any liquidated damages under Section 7.1).

 

7.5       Survival.

 

The provisions of this Article VII shall survive the Closing or earlier
termination of this Agreement.

 

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VIII.
CLOSING MATTERS

 

8.1         Closing.

 

(a)          Closing Date. The Closing shall be held thirty (30) days after the
expiration of the Due Diligence Period, or such earlier date as set forth in a
written notice from Purchaser to Seller (the “Closing Date”). For the avoidance
of doubt, the Closing Date shall not be extended in the event the Purchaser
utilizes the Franchisor Approval Period. The Closing shall be effected through
the escrow with Escrow Agent on terms reasonably acceptable to Seller, Purchaser
and Escrow Agent (including that all of the funds and documents to be
transferred hereunder shall be delivered through the escrow with Escrow Agent).
Purchaser and Seller shall execute appropriate instructions to implement the
closing of such escrow.

 

(b)          Postponement by Seller.  Notwithstanding any provision of this
Agreement to the contrary, if Seller fails to cure (i) any item under Sections
3.1, or 4.1(a) that Seller committed to cure to Purchaser’s satisfaction on or
prior to Closing, or (ii) any item under Section 4.1(b) that Seller is obligated
to use its commercially reasonable efforts to cure to Purchaser’s satisfaction
on or prior to Closing, Seller shall have the right to postpone the Closing for
up to fifteen (15) days by providing written notice to Purchaser no later than
three (3) Business Days prior to the scheduled Closing Date. If such items are
not cured to Purchaser’s satisfaction (in Purchaser’s sole and absolute
discretion) by the Closing Date (as extended pursuant to this Agreement),
Purchaser’s sole and exclusive remedy shall be to either (i) terminate this
Agreement  pursuant to Section 8.9 by delivering to Seller a written notice of
termination; or (ii) waive its objection to the disapproved items that Seller
has not cured or committed in writing to cure to Purchaser’s satisfaction, which
shall then become Permitted Exceptions. Purchaser’s failure to timely deposit
with Seller and Escrow Agent a written notice of termination shall be deemed to
constitute Purchaser’s waiver of its objection to said items and such items
shall become Permitted Exceptions.

 

(c)          Postponement by Purchaser. The Closing Date may be extended for a
period of up to thirty (30) days by Purchaser upon written notice (the
“Extension Election Notice”) from Purchaser to Seller delivered at least two
(2) days prior to the scheduled Closing Date, provided that within one
(1) Business Day following the delivery of the Extension Election Notice,
Purchaser shall deposit an additional One Hundred Thousand and No/100 Dollars
($100,000.00) of Earnest Money with Escrow Agent (the “Additional Deposit”).
Upon payment of the Additional Deposit, the Additional Deposit shall be deemed
included with and a part of the Earnest Money for all purposes of this Agreement
and shall be credited to the Purchase Price at Closing.

 

8.2         Adjustment and Prorations.

 

All assets and liabilities of the Hotel, determined in accordance with the
Uniform System of Accounts (provided that all other non-Hotel assets and
liabilities, if any, shall be determined in accordance with GAAP), shall be
prorated as of the Cut Off Time.  In connection with the foregoing:

 

(a)          Closing Statements.

 

(i)        Not later than five (5) Business Days prior to the Closing Date,
Seller will prepare and deliver to Purchaser a preliminary statement of
prorations and adjustments required under this Section 8.2, or under any other
provisions of this Agreement, with such supporting documentation as the parties
hereto may

 

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reasonably require being attached thereto (the “Preliminary Closing Statement”);
and

 

(ii)       On the day prior to Closing, Purchaser and Seller will conduct
inventories, examinations and audits of the Hotel as may be necessary to verify
and/or make revisions to the Preliminary Closing Statement based on such audits,
examinations and inventories, and conducted on the night preceding the Closing
Date. Seller and Purchaser will prepare a settlement statement, which will show
the net amount due either to Seller or to Purchaser as the 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 this Agreement (the “Closing
Statement”).

 

The matters and items set forth below shall be apportioned between Seller and
Purchaser or, where applicable, credited in total to a particular party:

 

(b)         Taxes. All real and personal property taxes and special assessments,
if any, whether payable in installments or not, shall be prorated as of the
Cut-Off Time and Seller shall be responsible for all such amounts attributable
to the period prior to the Cut-Off Time, and Purchaser shall be responsible for
all such amounts attributable to the period after the Cut-Off Time. If such
taxes for the tax year in which the Closing occurs or any previous tax year have
not been finally determined on the Closing Date, then such taxes shall be
prorated on an estimated basis using the most current information available.
When such taxes have been finally determined, the parties shall recalculate such
prorations and any amount payable by Seller or Purchaser shall be paid to the
other party within fifteen (15) days after such taxes are finally determined.

 

(c)          Room Rentals. Room rentals attributable to the night prior to the
Closing Date and all nights prior thereto shall be the property of Seller.
Room rentals attributable to the night following the Closing and all nights
thereafter shall be the property of Purchaser.

 

(d)          Reservation Deposits. Prepaid and unearned reservation deposits and
other such third party prepaid items relating to periods after the Cut-Off Time
shall be transferred to Purchaser, or the amounts thereof credited to Purchaser,
at the Closing.

 

(e)          Utility Charges. Utility charges for telephone, gas, electricity,
sewer, water and other services shall not be prorated to the extent that Seller
can make arrangements for the rendering of final bills based on meter readings
as of the Cut-Off Time. Seller shall be responsible for the payment at the
Closing of all bills for utility charges up to and including the Cut-Off Time.
To the extent that utility bills cannot be rendered as of the Closing Date, such
charges for the period through the Cut-Off Time shall be prorated as of the
Cut-Off Time based upon the most recent available bills and readjusted on the
basis of the actual bills as and when received. Any utility deposits which are
required to be transferred to Purchaser or which Purchaser elects to assume (in
Purchaser’s sole and absolute discretion) shall be transferred to Purchaser and
credited to Seller at the Closing.

 

(f)           Operating Expenses and Trade Accounts. At Closing, Seller shall
receive a credit for all unconsumed portions of prepaid expenses; provided,
Seller shall, concurrently with the delivery of the Preliminary Closing
Statement, deliver to Purchaser a certified list of all prepaid expenses which
Seller shall represent and warrant to be a materially true, correct and complete
list thereof. Seller shall be responsible for all operating expenses and trade
accounts of the Hotel (including, without limitation, charges and fees payable
under the Hotel Contracts and all hotel/motel sales and occupancy taxes) up to
and including the Cut-Off Time; provided, however, that Purchaser shall be
responsible for all purchase orders (“Purchase Orders”) made by Seller in the
Ordinary Course of Business for Expendables or

 

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Consumables not delivered to the Hotel as of the Closing Date; provided,
further, Seller shall, concurrently with the delivery of the Preliminary Closing
Statement, deliver to Purchaser a certified list of all Purchase Orders with
liabilities in excess of Two Hundred and No/100 Dollars ($200.00) which Seller
shall represent and warrant to be a materially true, correct and complete list
thereof. All operating expenses and trade accounts accruing after the Cut-Off
Time (“Post-Closing Expenses”) shall be the responsibility of Purchaser and
Purchaser agrees to indemnify, defend and hold Seller harmless from and against
any Claims or other matters relating to (i) the Purchase Orders, or (ii) the
Post-Closing Expenses.

 

(g)          Employees. Seller shall, or shall cause Manager to, pay to Hotel
Employees, as required under Section 8.7.

 

(h)          Cash. All cash on hand in house banks (including any petty cash
fund, if any) on the morning of the Closing Date shall become the property of
Purchaser and the amount thereof shall be credited to Seller at the Closing. All
other funds of Seller and Tenant shall remain their property and shall be
withdrawn by or transferred or credited to Seller or Tenant at Closing.

 

(i)            Ledger and Other Receivables. All accounts receivable of any kind
attributable to guests in the Hotel on the night preceding the Closing shall be
prorated as provided in Section 8.2 and Seller’s share shall be credited to
Seller at Closing. All other accounts receivable of Seller for the period prior
to Closing shall remain the property of Seller (“Retained Accounts”). If any
receivables specifically identified for Retained Accounts shall be collected by
Purchaser, Purchaser shall remit the same to Seller within fifteen (15) days
after receipt. Any monies collected by Purchaser from any customer after the
Closing Date who then owes amounts both on a Retained Account and on an account
with the Hotel accruing after Closing (a “Current Account”), shall be applied to
the invoices specified by the payor or to which such payment (by the amount
thereof or other indicia) plainly applies, and, if the payor makes such payment
without reference to a specific invoice and the applicable invoice is not
otherwise obvious, then such payment shall be allocated to the Current Accounts
first and thereafter to the Retained Accounts, on a pro-rata basis based on the
amounts then currently owed to each. Notwithstanding the foregoing, the Parties
acknowledge and agree that Seller shall have the obligation to collect any and
all such accounts receivables at no cost to Purchaser and/or the Hotel.

 

(j)           Existing Consumables Inventory. There shall be no adjustment or
credit at Closing for the value of the Hotel’s existing inventory of unopened
containers of Consumables.

 

To the extent that any of the items described above cannot be finally determined
on the Closing Date, then such items shall be prorated on an estimated basis
using the most current information. Within ninety (90) days after the Closing
Date, Seller and Purchaser shall recalculate such prorations and any amount
payable by Seller or Purchaser shall be paid to the other party within fifteen
(15) days after such recalculation. This Section 8.2 shall survive the Closing.

 

8.3         Guest Property in Seller’s Possession on Closing Date.

 

Property of guests of the Hotel in Seller’s care, possession or control
(excluding that in guest rooms) on the Closing Date shall be handled in the
following manner:

 

(a)          Safe Deposit Boxes. On the day prior to the Closing Date, Seller
shall notify all guests of the Hotel who have safe deposit boxes advising them
of the pending sale of the Hotel and requesting the removal and verification of
the contents of such safe deposit boxes within three days thereafter. Seller may
have a representative present at the Hotel during such period for the purpose of
viewing such removal and verification. Boxes of guests not responding to the
written notice shall be listed at the end of such three day period. Such boxes
shall be opened on the following day in the presence of representatives

 

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of Seller and Purchaser to be agreed upon between Seller and Purchaser and the
contents thereof shall be recorded. Any property contained in the safe deposit
boxes and so recorded and thereafter remaining in the hands of Purchaser shall
be the responsibility of Purchaser; and Purchaser hereby agrees to indemnify,
defend and save and hold Seller harmless from and against any Claim or
obligation arising out of or with respect to such recorded property. Seller
shall be responsible for, and shall indemnify, defend and hold Purchaser
harmless from and against, any Claim arising with respect to property placed in
the safe deposit boxes before the Closing that is not listed in said inventory.
The indemnities set forth in this Section 8.3(a) shall survive the Closing.

 

(b)          Baggage Inventory. All guest baggage and other guest property
checked and left in the possession, care and control of Seller shall be listed
in an inventory to be prepared in duplicate and signed by Seller’s and
Purchaser’s representatives on the day prior to the Closing Date (the “Baggage
Inventory List”). Purchaser shall be responsible from and after the Closing Date
for all baggage (and the contents thereof) and other guest property listed on
the Baggage Inventory List. Purchaser agrees to indemnify, defend and save and
hold Seller harmless from and against any Claim arising out of or with respect
to the baggage listed on the Baggage Inventory List, and Seller agrees to
indemnify, defend and save and hold Purchaser harmless from and against any
Claim arising prior to the Closing Date out of or with respect to any guest
baggage or other guest property not listed on the Baggage Inventory List. The
indemnities set forth in this Section 8.3(b) shall survive the Closing.

 

8.4         Closing Documents.

 

(a)          Purchaser’s Closing Deliveries. On or before the Closing Date,
Seller shall deliver to Escrow Agent or to Purchaser, as appropriate, the
following, dated as of the Closing Date (as applicable):

 

(i)

a special warranty deed conveying the fee simple title in the Real Property to
Purchaser, duly authorized, executed and acknowledged by Seller, in the form
commonly used in the Commonwealth of Massachusetts and reasonably approved by
Seller and Purchaser (the “Deed”);

 

 

(ii)

two (2) counterparts of a Bill of Sale and Assignment and Assumption Agreement
(the “Bill of Sale and Assignment”) transferring to Purchaser all of the
Furnishings, Expendables and Consumables, the Bookings, the Books and Records,
the Hotel Contracts, and the assignable Permits, (other than those items leased
or loaned to Seller), which Bill of Sale and Assignment shall contain an
indemnity by Seller of Purchaser with respect to obligations arising thereunder
prior to the Closing Date, and a reciprocal indemnity by Purchaser of Seller
with respect to obligations arising thereunder subsequent to the Closing Date,
duly authorized and executed by Seller, in the form attached hereto as
Exhibit “F”, together with original certificates of title for all vehicles that
are part of the Hotel, endorsed to transfer same to Purchaser (and any necessary
governmental forms to effect the transfer);

 

 

(iii)

a certificate executed by Seller (the “Seller’s Certificate”) stating that each
of the representations and warranties of Seller set forth in this Agreement (as
the same may be updated by Seller from time to time pursuant to and in
accordance with Section 5.3) are, as of the Closing Date, true and accurate in
all respects as required by Section 8.9(a), in the form attached hereto as
Exhibit “G”;

 

 

(iv)

evidence of termination of the Operating Lease and the Management Agreement (and
Manager shall have peacefully vacated the Hotel);

 

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(v)

possession of the Hotel and any and all keys, access codes and plans and
specifications for the Hotel Improvements in Seller’s possession;

 

 

(vi)

a certified copy of such authorizations and approvals of Seller as the Title
Company shall reasonably require;

 

 

(vii)

a FIRPTA Affidavit executed by Seller in form required by the Internal Revenue
Service;

 

 

(viii)

the Closing Statement, the form and substance of which has been mutually
approved by Purchaser and Seller;

 

 

(ix)

if applicable, the Tax Certificates required by Section 8.5(c) of the Agreement;

 

 

(x)

to the extent not previously delivered to Purchaser, copies (or originals if
available) of the Hotel Contracts and assignable Permits, and all Books and
Records, which shall be deemed to be delivered to Purchaser upon delivery of
possession of the Hotel if located at the Hotel on the Closing Date;

 

 

(xi)

a customary affidavit of Seller (in form reasonably acceptable to the Title
Company) in favor of the Title Company; and

 

 

(xii)

any other agreements, documents and/or instruments as may be reasonably required
or requested by the Title Company to consummate this transaction.

 

(b)          Seller’s Closing Deliveries. On or before the Closing Date,
Purchaser shall deliver to Escrow Agent or to Seller, as appropriate, the
following, dated as of the Closing Date (as applicable):

 

(i)

funds evidencing the Purchase Price (as adjusted by the application of the
Earnest Money), plus or minus costs and prorations as set forth herein and any
other funds needed to satisfy Purchaser’s obligations hereunder;

 

 

(ii)

two (2) counterparts of the Bill of Sale and Assignment, duly authorized and
executed by Purchaser;

 

 

(iii)

such authorizations, approvals and incumbency as Seller or the Title Company
shall reasonably require;

 

 

(iv)

a certificate executed by Purchaser (the “Purchaser’s Certificate”) stating that
each of the representations and warranties of Purchaser set forth in this
Agreement are, as of the Closing Date, true and accurate in all respects as
required by Section 8.10(a) hereof, in the form attached hereto as Exhibit “H”;

 

 

(v)

if applicable, the Tax Certificates required by Section 8.5(c) of the Agreement;

 

 

(vi)

the Closing Statement, the form and substance of which has been mutually
approved by Purchaser and Seller;

 

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(vii)

any other agreements, documents and/or instruments as may be reasonably required
or requested by the Title Company or Seller to consummate this transaction.

 

8.5         Closing Costs.

 

(a)          Seller’s Closing Costs. In addition to the other costs and expenses
to be paid by Seller set forth elsewhere in this Agreement, Seller shall pay for
the following costs in connection with this transaction: (i) the fees and
expenses of its own accountants and attorneys; (ii) one hundred percent (100%)
of all state and local transfer and recordation taxes payable in connection with
the conveyance of the Hotel; and (iii) one-half of any escrow fees.

 

(b)          Purchaser’s Closing Costs. In addition to the other costs and
expenses to be paid by Purchaser set forth elsewhere in this Agreement,
Purchaser shall pay for the following costs in connection with this transaction:
(i) the fees and expenses of its own accountants and attorneys; (ii) the cost of
the base premium for the Title Policy, the cost of any endorsements or
modifications to the Title Policy and the cost of any mortgagee policy;
(iii) the fees, costs and expenses incurred by Purchaser in connection with its
due diligence activities, including the Inspections and Studies, Title Report
and Survey; and (iv) one-half of any escrow fees and costs.

 

(c)          Tax Certificates. Seller and Purchaser shall execute and deliver
such transfer and sales tax returns, exemption certificates and/or occasional
sales certificates (collectively, the “Tax Certificates”) as may be required by
law or deemed reasonably necessary by either party.

 

(d)          Survival. The provisions of this Section 8.5 shall survive the
Closing.

 

8.6         Real Estate Commissions.

 

Seller and Purchaser each represent and warrant to the other that it has not
dealt with any broker or finder in the negotiation of this transaction other
than Broker, who is Seller’s broker in this transaction. Each party agrees to
and does hereby indemnify and hold the other harmless against the payment of any
commission or finder’s fee to any other person or entity claiming by, through or
under such party, as applicable. Seller shall pay the commission of Broker
pursuant to separate agreement. This Section 8.6 shall survive the Closing or
earlier termination of this Agreement.

 

8.7         Hotel Employees.

 

(a)          Existing Employees. Seller shall, or shall cause Manager to,
terminate or arrange for the termination of all Hotel Employees to be effective
as of the Closing and shall, or shall cause Manager to, pay (i) to Hotel
Employees all wages, severance pay, bonuses, benefits and other compensation
(including earned and fully accrued but not taken vacation and sick time of any
Hotel Employee (the “Accrued Vacation and Sick Time”)) and (ii) all payroll
taxes and other employment taxes that any Hotel Employee is owed through
termination, pursuant to statute or contract. Purchaser covenants to Seller that
Purchaser or its management company shall, before the Closing, offer employment
(to be effective as of the Closing) to a sufficient number of Hotel Employees on
substantially the same terms and conditions as their employment prior to the
Closing Date and for a sufficient period of time so that the actions of the
parties pursuant to this Agreement shall not trigger the application of the
federal Worker Adjustment and Retraining Notification Act (the “WARN Act”) or
applicable state laws with respect to employees regarding transfers of
businesses. Nothing in this Section, however, shall require Purchaser to retain
for any period of time any Hotel Employee who is unable to establish identity
and work authorization for employment verification, who does not pass a criminal
background check or who fails to pass any drug

 

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test requirement of Purchaser. It is further agreed, that nothing within this
Section shall prohibit the Purchaser from terminating any rehired Hotel Employee
for cause in accordance with the WARN Act and its implementing regulations. In
addition, no part of this provision is intended to alter, nor does it alter, the
at will status of the Hotel Employees. Seller will use commercially reasonable
efforts to cause Manager to cooperate with Purchaser to cause an orderly
transfer of the Hotel Employees to the employ of Purchaser. Seller and Purchaser
acknowledge that Purchaser may, but is not obligated to, offer employment to the
General Manager and other management level employees. Manager shall remain fully
responsible for all liability and obligations to the General Manager and other
management level Hotel Employees who are not rehired by Purchaser and to Hotel
Employees who do not accept Purchaser’s offer of employment. No Hotel Employee
shall be obligated to accept Purchaser’s or its management company’s offer for
employment. Nothing in this Agreement shall require Purchaser to assume any
obligations under any employee benefit plans, programs or arrangements currently
maintained for Hotel Employees, and Seller shall, or shall cause Manager to,
retain and be solely responsible for all obligations under such plans, programs
or arrangements.

 

(b)          WARN Act. As long as Purchaser has received the Hotel Employee
Schedule or Seller has otherwise identified the Hotel Employees to Purchaser
prior to the Closing and provided sufficient information to Purchaser to allow
Purchaser to make an offer of employment to such Hotel Employees pursuant to
this Section 8.7 prior to Closing, if Purchaser elects not to retain or rehire
such Hotel Employees, Purchaser will be responsible for all obligations, if any,
arising with respect to such terminated Hotel Employees under, pursuant to, and
in accordance with the provisions of the WARN Act and applicable state laws with
respect to employees regarding transfers of businesses. Purchaser acknowledges
that it expects to retain or rehire a sufficient number of the Hotel Employees,
so that Seller will not be required to give any notices that would otherwise be
required under the WARN Act (or applicable state laws with respect to employees
regarding transfers of businesses) prior to the termination of the Hotel
Employees. Purchaser agrees to indemnify Seller and hold Seller harmless from
and against any and all costs and expenses (including, without limitation,
reasonable attorneys’ fees) incurred by Seller under the WARN Act and applicable
state laws with respect to employees regarding transfers of businesses resulting
from any termination by Purchaser or Purchaser’s manager of Hotel Employees at
any time after the Closing Date.

 

(c)          Survival. The provisions of this Section 8.7 shall survive the
Closing.

 

8.8         Disbursements and Other Actions by Escrow Agent.

 

At the Closing, Escrow Agent shall promptly undertake all of the following as
and to the extent reflected on the settlement statement executed by Seller at
Closing:

 

(a)          Disbursements. Disburse all funds deposited with Escrow Agent by
Purchaser as follows:

 

(i)           If, as a result of the prorations and credits pursuant to
Section 8.2 above, amounts are to be charged to the account of Seller, deduct
the total amount of such charges;

 

(ii)          Deduct and pay to the appropriate third party all items chargeable
to the account of Seller pursuant to Section 8.5 above;

 

(iii)          Pay to the appropriate third party from funds deposited by
Purchaser all items chargeable to the account of Purchaser pursuant to
Section 8.5 above;

 

(iv)          Disburse the balance of the funds due to Seller to or as directed
by Seller; and

 

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(v)        Disburse any remaining funds to or as directed by Purchaser.

 

All amounts and payees with respect to the items listed above shall be shown on
settlement statements executed at the Closing.

 

(b)          Recordation of Deed. Cause the Deed to be recorded in the Office of
the County Recorder where the Hotel is located (with instructions to return the
Deed to Purchaser after recordation), and obtain conformed copies thereof for
distribution to Seller and Purchaser;

 

(c)          Title Policy. Issue to Purchaser the Title Policy (including any
endorsements issued in connection therewith);

 

(d)          Closing Documents. Deliver to Purchaser and Seller the other
applicable fully-executed documents; and

 

(e)          Miscellaneous Actions. Take such other actions as Seller and
Purchaser may deem necessary or convenient for the consummation of the Closing,
as set forth in closing instruction letters provided by parties.

 

8.9         Conditions Precedent to Purchaser’s Obligations.

 

Purchaser’s obligations under this Agreement are conditioned upon the
satisfaction or waiver by Purchaser of the following conditions:

 

(a)          Accuracy of Representations and Warranties. Subject to Section 5.3,
Seller’s representations and warranties set forth in this Agreement shall
continue to be true and accurate in all material respects.

 

(b)          Performance of Obligations and Covenants. Seller shall have
performed all of its obligations in all material respects under this Agreement,
including, without limitation, the covenants contained in Section 6.1 and the
delivery of the documents set forth in Section 8.4(a).

 

(c)          Litigation. There shall be no judicial, quasi-judicial,
administrative or other proceeding initiated by a person or entity that is not
an affiliate of Purchaser pending that seeks to enjoin the consummation of the
sale and purchase hereunder as of the Closing Date.

 

(d)         Title Policy.  The Title Company shall be unconditionally obligated
and prepared, subject only to payment by Purchaser of the applicable premium and
other related charges, to issue a policy of title insurance for the Real
Property, in favor of Purchaser, in every respect consistent with the Title
Requirement Letter with no exceptions or encumbrances other than the Permitted
Exceptions and including each and every Title Endorsement required thereby.

 

If any of the foregoing conditions have not been satisfied as of the Closing
Date for reasons other than a Purchaser default, then Purchaser, subject to any
applicable notice and cure periods as provided in other provisions of this
Agreement (including, without limitation, Sections 7.2 and 8.1(b)), shall be
entitled to terminate this Agreement pursuant to this Section 8.9 by giving
Seller written notice to such effect, whereupon (i) this Agreement shall
automatically terminate, (ii) the Escrow Agent shall immediately release and
return the Earnest Money (including any interest accrued thereon) to Purchaser,
(iii) each party shall pay one-half (1/2) of the expenses of escrow and
(iv) neither party shall have any further obligation to the other party
hereunder, except for the Surviving Obligations; provided, however, that
notwithstanding the foregoing, in the event that Purchaser terminates this
Agreement due to a Seller

 

26

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default (excluding any termination of this Agreement by Purchaser pursuant to
this Section 8.9), Section 7.2 shall control the rights, remedies and
obligations of the parties.  If Purchaser has actual knowledge that a condition
remains unsatisfied but nonetheless elects not to terminate this Agreement or to
pursue any remedies it may have under Article VII and proceeds with Closing,
then such unsatisfied condition shall be deemed waived by Purchaser.

 

8.10       Conditions Precedent to Seller’s Obligations.

 

Seller’s obligations under this Agreement are conditioned upon the satisfaction
or waiver by Seller of the following conditions:

 

(a)          Accuracy of Representation and Warranties. Purchaser’s
representations and warranties set forth in this Agreement shall continue to be
true and accurate in all material respects.

 

(b)          Performance of Obligations. Purchaser shall have performed all of
its obligations in all material respects under this Agreement, including,
without limitation, the delivery of the documents set forth in Section 8.4(b).

 

(c)          Franchise Termination and Release.  Seller shall have received
evidence of termination of the Franchise Agreement together with a release of
Seller, Tenant and their affiliates, and any guarantors, from all liability,
cost or expense with respect thereto, including without limitation termination
costs and fees, in form and substance delivered by Franchisor in the ordinary
course of business under substantially similar circumstances.

 

(d)          Litigation. There shall be no judicial, quasi-judicial,
administrative or other proceeding initiated by a person or entity that is not
an affiliate of Seller pending that seeks to enjoin the consummation of the sale
and purchase hereunder as of the Closing Date.

 

If any of the forgoing conditions have not been satisfied as of the Closing Date
as the result of Purchaser default, then Seller, subject to any applicable
notice and cure periods as provided in other provisions of this Agreement
(including without limitation, Section 7.1), shall be entitled to terminate this
Agreement and Section 7.1 shall control the rights, remedies and obligations of
the parties.  If Seller has actual knowledge that a condition remains
unsatisfied but nonetheless elects not to terminate this Agreement or to pursue
any remedies it may have under Article VII and proceeds with the Closing, then
such unsatisfied condition shall be deemed waived by Seller.

 

8.11       Survival.

 

The provisions of Article VIII shall survive the Closing.

 

IX.

CONDEMNATION AND RISK OF LOSS

 

9.1         Notice.

 

Seller shall promptly notify Purchaser in writing of any condemnation proceeding
filed or any casualty to the Real Property occurring prior to the Closing.

 

9.2         Condemnation.

 

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If any condemnation proceeding filed prior to the Closing may result in a loss
of all or more than fifteen percent (15%) of the Real Property or any portion of
the Real Property that would cause a loss of ingress or egress to the Real
Property or otherwise materially and adversely impair the operation of the Hotel
(any or all of the foregoing instances shall be referred to herein as the
“Condemnation Threshold”), then this Agreement shall, at Purchaser’s sole
election, either (i) continue in effect without modification of the terms
thereof, in which event, upon the Closing, Purchaser shall be entitled to any
compensation, awards, or other payments or relief resulting from such
condemnation proceeding, or (ii) terminate by Purchaser’s written notice to
Seller and Escrow Agent delivered within five (5) days after receipt by
Purchaser of notice of such condemnation, in which event (a) this Agreement
shall automatically terminate, (b) the Escrow Agent shall immediately release
and return the Earnest Money (including any interest accrued thereon) to
Purchaser, (c) each party shall pay one-half (1/2) of the expenses of escrow and
(d) neither party shall have any further obligation to the other party
hereunder, except for the Surviving Obligations.  If Purchaser does not elect to
terminate this Agreement within such time period, or if any such occurrence does
not meet the Condemnation Threshold, then this Agreement shall continue in
effect without modification of the terms thereof, in which event, upon the
Closing, Purchaser shall be entitled to any compensation, awards, or other
payments or relief resulting from such condemnation proceeding.

 

9.3                            Casualty.

 

In the event of fire, casualty or any other damage of any kind whatsoever
(insured or uninsured) to the Hotel occurring after the Effective Date which is
reasonably estimated to cost Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) or more to repair, replace or remediate (the “Casualty
Threshold”), Purchaser may, at its option, terminate this Agreement by written
notice to Seller within thirty (30) days after Purchaser’s receipt of the notice
of casualty referred to above or at Closing, whichever is earlier, whereupon
(i) this Agreement shall automatically terminate, (ii) the Escrow Agent shall
immediately release and return the Earnest Money (including any interest accrued
thereon) to Purchaser, (iii) each party shall pay one-half (1/2) of the expenses
of escrow and (iv) neither party shall have any further obligation to the other
party hereunder, except for the Surviving Obligations.  If Purchaser does not
elect to terminate this Agreement within such time period, or if any such
occurrence costs less than the Casualty Threshold to repair, replace or
remediate, then:

 

(a)                               the parties shall proceed to the Closing
pursuant to the terms and conditions hereof, without modification of the terms
of this Agreement and without any reduction in the Purchase Price except as set
forth in Section 9.3(b); and

 

(b)                              Seller shall assign to Purchaser at Closing all
of Seller’s interest in any insurance proceeds (except only, rent loss and
business interruption insurance, and any similar insurance attributable to the
period preceding the interruption insurance, and any similar insurance
attributable to the period preceding the Closing Date) that may be payable to
Seller on account of any such fire, casualty or other damage (provided that the
amount of such insurance proceeds credited to Purchaser plus any other credits
to Purchaser set forth below will never exceed the Purchase Price), and
Purchaser will receive a credit against the Purchase Price for any such proceeds
that are received and retained by any creditor of Seller and for the amount of
any deductibles under any policies related to such proceeds, to the extent such
deductibles or insurance proceeds have not been previously expended or are
otherwise required to reimburse Seller for actual expenditures of restoration or
the reasonable cost of securing the insurance proceeds.

 

X.
DISCLAIMERS AND RELEASE

 

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10.1                    Independent Investigations.

 

In entering into this Agreement, Purchaser is relying solely upon (i) its own
inspections, investigations, research and analyses of the matters set forth in
Section 6.2, and (ii) the express representations and warranties of Seller set
forth in Section 5.1 above and elsewhere in this Agreement and in the Seller’s
Certificate, and Purchaser is not relying in any way upon any other
representations, warranties, statements, plans, specifications, cost estimates,
studies, reports, descriptions, guidelines or other information or material
furnished by Seller or its representatives to Purchaser or its representatives,
whether oral or written (all such matters herein referred to as the “Delivered
Information”), express or implied, of any nature whatsoever regarding any such
matters. Except as otherwise provided in an express representation or warranty
contained in Section 5.1, Seller shall have no liability with respect to the
accuracy or completeness of the Delivered Information.

 

10.2                    Disclaimer of Warranties.

 

PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
IN THIS AGREEMENT, NEITHER SELLER, TENANT, MANAGER OR ANY OF THEIR AFFILIATES,
NOR ANY OF THEIR RESPECTIVE SHAREHOLDERS, MEMBERS, PARTNERS, TRUSTEES,
BENEFICIARIES, DIRECTORS, OFFICERS, MANAGERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS,
CONTRACTORS, CONSULTANTS, AGENTS OR REPRESENTATIVES, NOR ANY PERSON PURPORTING
TO REPRESENT ANY OF THE FOREGOING, HAVE MADE ANY REPRESENTATION, WARRANTY,
GUARANTY, PROMISE, PROJECTION OR PREDICTION WHATSOEVER WITH RESPECT TO THE HOTEL
OR THE BUSINESS, WRITTEN OR ORAL, EXPRESS OR IMPLIED, ARISING BY OPERATION OF
LAW OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY REPRESENTATION OR WARRANTY AS TO
(A) THE CONDITION, SAFETY, QUANTITY, QUALITY, USE, OCCUPANCY OR OPERATION OF THE
HOTEL, (B) THE PAST, PRESENT OR FUTURE REVENUES OR EXPENSES WITH RESPECT TO THE
HOTEL OR THE BUSINESS, (C) THE COMPLIANCE OF THE HOTEL OR THE BUSINESS WITH ANY
ZONING REQUIREMENTS, BUILDING CODES OR OTHER APPLICABLE LAW, INCLUDING, WITHOUT
LIMITATION, THE AMERICANS WITH DISABILITIES ACT OF 1990, (D) THE ACCURACY OF ANY
ENVIRONMENTAL REPORTS OR OTHER DATA OR INFORMATION SET FORTH IN THE DELIVERED
INFORMATION PROVIDED TO PURCHASER WHICH WERE PREPARED FOR OR ON BEHALF OF
SELLER, OR (E) ANY OTHER MATTER RELATING TO SELLER, THE HOTEL OR THE BUSINESS.

 

10.3                    Condition of Hotel.

 

SUBJECT TO THE EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN
SECTION 5.1 AND ELSEWHERE IN THIS AGREEMENT OR IN ANY CLOSING DOCUMENTS TO BE
DELIVERED BY SELLER OR TENANT TO PURCHASER AT CLOSING, PURCHASER AGREES THAT:
(i) PURCHASER SHALL ACCEPT THE HOTEL IN ITS PRESENT STATE AND CONDITION AND
“AS-IS WITH ALL FAULTS”; (ii) SELLER SHALL NOT BE OBLIGATED TO DO ANY
RESTORATION, REPAIRS OR OTHER WORK OF ANY KIND OR NATURE WHATSOEVER ON THE HOTEL
(OTHER THAN AS REQUIRED BY SECTION 6.1(E)) AND, SPECIFICALLY, BUT WITHOUT
DEROGATING FROM THE GENERALITY OF THE FOREGOING, SELLER SHALL NOT BE RESPONSIBLE
FOR ANY WORK ON OR IMPROVEMENT OF THE REAL PROPERTY NECESSARY (x) TO CAUSE THE
HOTEL TO MEET ANY APPLICABLE HAZARDOUS WASTE LAWS, OR (y) TO REPAIR, RETROFIT OR
SUPPORT ANY PORTION OF THE IMPROVEMENTS DUE TO THE SEISMIC OR STRUCTURAL

 

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INTEGRITY (OR ANY DEFICIENCIES THEREIN) OF THE IMPROVEMENTS; AND (iii) NO PATENT
OR LATENT CONDITION AFFECTING THE HOTEL IN ANY WAY, WHETHER OR NOT KNOWN OR
DISCOVERABLE OR DISCOVERED AFTER THE CLOSING DATE, SHALL AFFECT PURCHASER’S
OBLIGATION TO PURCHASE THE HOTEL OR TO PERFORM ANY OTHER ACT OTHERWISE TO BE
PERFORMED BY PURCHASER UNDER THIS AGREEMENT, NOR SHALL ANY SUCH CONDITION GIVE
RISE TO ANY ACTION, PROCEEDING, CLAIM OR RIGHT OF DAMAGE OR RESCISSION AGAINST
SELLER, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED FOR IN THIS AGREEMENT.

 

10.4                    Release.

 

EXCEPT FOR THE EXPRESS OBLIGATIONS AND LIABILITIES OF SELLER SPECIFICALLY SET
FORTH HEREIN OR IN ANY CLOSING DOCUMENTS DELIVERED BY SELLER IN CONNECTION WITH
CLOSING (THE “SELLER PARTY OBLIGATIONS”), PURCHASER AND ANYONE CLAIMING BY,
THROUGH OR UNDER PURCHASER HEREBY WAIVES ITS RIGHT TO RECOVER FROM AND FULLY AND
IRREVOCABLY RELEASES SELLER, MANAGER AND THEIR RESPECTIVE EMPLOYEES, OFFICERS,
DIRECTORS, REPRESENTATIVES, AGENTS, SERVANTS, ATTORNEYS, AFFILIATES, PARENT,
SUBSIDIARIES, SUCCESSORS AND ASSIGNS, AND ALL PERSONS, FIRMS, CORPORATIONS AND
ORGANIZATIONS ACTING IN ITS OR THEIR BEHALF (“RELEASED PARTIES”) FROM ANY AND
ALL CLAIMS THAT IT HAS OR MAY HAVE AGAINST ANY OF THE RELEASED PARTIES FOR ANY
COSTS, LOSS, LIABILITY, DAMAGE, EXPENSES, DEMAND, ACTION OR CAUSE OF ACTION
ARISING FROM OR RELATED TO ANY MATTERS AFFECTING THE HOTEL, OR ANY PORTION
THEREOF, INCLUDING, WITHOUT LIMITATION, SIGNAGE RIGHTS, ENTITLEMENTS, ZONING,
PARKING, TITLE DOCUMENTS OR DEFECTS, CONSTRUCTION DEFECTS, ANY AND ALL
VIOLATIONS OF APPLICABLE LAW INCLUDING VIOLATIONS OF THE AMERICANS WITH
DISABILITIES ACT OF 1990 AND ALL ENVIRONMENTAL CLAIMS AND ENVIRONMENTAL
LIABILITIES, WHETHER NOW KNOWN OR UNKNOWN TO PURCHASER. THIS RELEASE INCLUDES
CLAIMS OF WHICH PURCHASER IS PRESENTLY UNAWARE OR WHICH PURCHASER DOES NOT
PRESENTLY SUSPECT TO EXIST WHICH, IF KNOWN BY PURCHASER, WOULD SIGNIFICANTLY
AFFECT PURCHASER’S RELEASE TO SELLER. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, PURCHASER EXPRESSLY WAIVES ANY AND ALL RIGHTS CONFERRED UPON IT BY
ANY STATUTE OR RULE OF LAW WHICH PROVIDES THAT A RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CLAIMANT DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE SIGNIFICANTLY
AFFECTED HIS SETTLEMENT WITH THE RELEASED PARTY, INCLUDING, WITHOUT LIMITATION,
ANY PROVISIONS SIMILAR TO THE FOLLOWING: “A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE SIGNIFICANTLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

 

IN THIS CONNECTION AND TO THE EXTENT PERMITTED BY LAW, AND EXCEPT FOR THE SELLER
PARTY OBLIGATIONS, PURCHASER HEREBY AGREES, REPRESENTS AND WARRANTS, WHICH
REPRESENTATION AND WARRANTY SHALL SURVIVE THE CLOSING AND NOT BE MERGED WITH THE
CLOSING, THAT PURCHASER REALIZES AND ACKNOWLEDGES THAT FACTUAL MATTERS NOW
UNKNOWN TO IT MAY HAVE GIVEN OR MAY HEREAFTER GIVE RISE TO CLAIMS WHICH ARE
PRESENTLY UNKNOWN, UNANTICIPATED AND UNSUSPECTED, AND PURCHASER FURTHER AGREES,
REPRESENTS AND WARRANTS, WHICH REPRESENTATION AND WARRANTY SHALL SURVIVE THE
CLOSING AND NOT BE MERGED WITH THE CLOSING, THAT THE

 

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WAIVERS AND RELEASES HEREIN HAVE BEEN NEGOTIATED AND AGREED UPON IN LIGHT OF
THAT REALIZATION AND THAT PURCHASER NEVERTHELESS HEREBY INTENDS TO RELEASE,
DISCHARGE AND ACQUIT SELLER, EXCEPT WITH RESPECT TO THE SELLER PARTY
OBLIGATIONS, FROM ANY SUCH UNKNOWN CLAIMS WHICH MIGHT IN ANY WAY BE INCLUDED AS
A PORTION OF THE CONSIDERATION GIVEN TO SELLER BY PURCHASER IN EXCHANGE FOR
SELLER’S PERFORMANCE HEREUNDER.

 

The foregoing waivers and releases shall not apply to any of the
representations, warranties, covenants, indemnities or other matters expressly
contained in this Agreement, or in any of the closing documents delivered by
Seller, to the extent same expressly survive the Closing.

 

Seller and Purchaser have each initialed this Article X to further indicate
their awareness and acceptance of each and every provision hereof.

 

 

 

 

 

SELLER’S INITIALS

 

PURCHASER’S INITIALS

 

 

XI.
MISCELLANEOUS

 

11.1                    Entire Agreement.

 

This Agreement (including the Exhibits and Schedules attached hereto)
constitutes the complete and final expression of the agreement of the parties
relating to the Hotel and supersedes all previous contracts, agreements, and
understandings of the parties, either oral or written, relating to the Hotel.
Except as expressly set forth herein, this Agreement cannot be modified, or any
of the terms hereof waived, except by an instrument in writing (referring
specifically to this Agreement) executed by the party against whom enforcement
of the modification or waiver is sought.

 

11.2                    Binding Effect.

 

This Agreement shall inure to the benefit of and be binding upon the heirs,
personal representatives, successors and permitted assigns of each of the
parties to this Agreement; provided, however, the same is not intended nor shall
it be construed as creating any rights in or for the benefit of any person or
entity other than the parties to this Agreement and their respective personal
representatives, successors and permitted assigns.

 

11.3                    Notices.

 

Any notice, communication, request, reply or advice (collectively, “Notice”)
provided for or permitted by this Agreement to be made or accepted by either
party must be in writing. Notice shall, unless otherwise provided herein, be
given or served (a) by depositing the same in the United States mail, postage
paid, registered or certified, and addressed to the party to be notified, with
return receipt requested; or (b) by delivery by hand or overnight courier; or
(c) by facsimile transmission evidenced by confirmed receipt by the transmitting
machine; or (d) by e-mail with proof of delivery. Notice deposited in the mail
in the manner herein above described shall be effective two (2) Business Days
after such deposit. Notice by overnight courier shall be effective one
(1) Business Day after deposit with the courier service. Notice given by
facsimile transmission or email shall be effective on the Business Day delivered
as evidenced by the printed delivery confirmation receipt retained by the
sender, provided that such notice is also sent concurrently by registered or
certified mail or overnight courier. Notwithstanding the foregoing, any

 

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Notice received after 5:00 p.m. (Eastern Time) shall be deemed to have been
delivered the following Business Day. For the purposes of Notice, the addresses
of the parties shall be:

 

Seller:

NMG-BRAINTREE, LLC

 

c/o Greenfield Partners, LLC

 

50 North Water Street

 

South Norwalk, CT 06854

 

Attention: Mr. Barry P. Marcus

 

 

 

Phone No.: (203) 354-5000

 

Email: Barry.marcus@greenfieldpartners.com

 

 

With a copy to:

Magna Hospitality Group, LC

 

300 Centerville Road, Suite 300 East

 

Warwick, RI 02886

 

Attention: Mr. Robert A. Indeglia, Jr.

 

 

 

Phone No.: (401) 562-2200

 

Email: Bob.indeglia@magnahospitality.com

 

 

 

 

With a copy to:

Nutmeg Partners, LLC

 

551 Post Road

 

Darien, CT 06820

 

Attention: Mr. William F. Reighley

 

 

 

Phone No.: (203) 655-0455

 

Email: BillReigh@aol.com

 

 

With a copy to:

GALLOP, JOHNSON & NEUMAN, L.C.

 

1350 Connecticut Avenue, N.W., Suite 850

 

Washington, DC 20036

 

Attention: Michael S. Kosmas, Esq.

 

 

 

Phone No.: (202) 293-1556

 

Email: Michael.Kosmas@GallopLaw.com

 

 

Purchaser:

CWI Braintree Hotel, LLC

 

c/o Watermark Capital Partners, LLC

 

272 E. Deerpath Road, Suite 320

 

Lake Forest, IL 60045

 

Attention: Michael G. Medzigian

 

 

 

Phone No.: (847) 482-8600

 

Email: medzigian@watermarkcap.com

 

 

With a copy to:

Paul Hastings LLP

 

515 S. Flower Street, 25th FL

 

Los Angeles, CA 90071

 

Attention: Rick S. Kirkbride, Esq.

 

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Phone No.: (213) 683-6261

 

Email: RickKirkbride@paulhastings.com

 

The parties shall have the right from time to time to change their respective
addresses for notice by at least five (5) Business Days’ written notice to the
other party.

 

11.4                    Governing Law.

 

This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts.

 

11.5                    Interpretation.

 

The section headings contained in this Agreement are for convenience only and
shall in no way enlarge or limit the scope or meaning of the various and several
sections of this Agreement. This Agreement shall not be construed more strongly
against either party regardless of who was more responsible for its preparation.

 

11.6                    Discharge of Obligations.

 

THE ACCEPTANCE OF THE DEED BY PURCHASER SHALL BE DEEMED TO BE A FULL PERFORMANCE
AND DISCHARGE OF EVERY REPRESENTATION AND WARRANTY MADE BY SELLER HEREIN AND
EVERY AGREEMENT AND OBLIGATION ON THE PART OF SELLER TO BE PERFORMED PURSUANT TO
THE PROVISIONS OF THIS AGREEMENT, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
HEREIN AND EXCEPT THOSE WHICH ARE HEREIN SPECIFICALLY STATED TO SURVIVE OR BE
PERFORMED AFTER CLOSING.

 

11.7                    Execution in Counterparts.

 

This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument. For purposes of negotiating and finalizing this Agreement, any
signed document transmitted by fax machine with automatic telephonic
confirmation of receipt or by e-mail with confirmation of receipt shall be
treated in all manners and respects as an original document. The signature of
any party transmitted as aforesaid shall be considered for all purposes as an
original signature and any such document shall be considered to have the same
binding legal effect as an original document executed, delivered and exchanged
between the parties. At the request of either party, any fax or email document
shall be re-executed by both parties in original form. Seller and Purchaser
hereby agree that neither shall raise the use of a fax or email transmission of
signatures as a defense to this Agreement and each hereby waives such a defense.
This Agreement may be executed in counterparts, each of which shall be deemed an
original and all of which shall be deemed to be one and the same instrument.

 

11.8                    No Recordation.

 

Purchaser shall not record this Agreement or any memorandum or other notice of
this Agreement in any public records; provided, however, the parties acknowledge
and agree that Purchaser may disclose and/or provide the material terms of this
Agreement in connection with any filings required under the Securities and
Exchange Act. This Section 11.8 shall survive the Closing or earlier termination
of this Agreement.

 

11.9                    Time of the Essence.

 

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Time is of the essence of this Agreement and of the obligations of the parties
to purchase and sell the Property, it being acknowledged and agreed by and
between the parties that any delay in effecting a closing pursuant to this
Agreement may result in loss or damage to the party in full compliance with its
obligations hereunder.

 

11.10            Invalid Provisions.

 

If any one or more of the provisions of this Agreement, or the applicability of
any such provision to a specific situation, shall be held invalid or
unenforceable, such provision shall be modified to the minimum extent necessary
to make it or its application valid and enforceable, and the validity and
enforceability of all other provisions of this Agreement and all other
applications of any such provision shall not be affected thereby.

 

11.11            Computation of Time.

 

The time in which any act under this Agreement is to be done shall be computed
by excluding the first day and including the last day. If the last day of any
time period stated herein shall fall on a Saturday, Sunday or legal holiday,
then the duration of such time period shall be extended so that it shall end on
the next succeeding day which is not a Saturday, Sunday or legal holiday. Unless
preceded by the word “business,” the word “day” shall mean a calendar day. The
phrase “Business Day” or “Business Days” shall mean those days on which the
state courts of the Commonwealth of Massachusetts are open.

 

11.12            Knowledge.

 

For the purposes of this Agreement and the documents to be delivered pursuant
hereto, references to “To Seller’s knowledge” or “Seller’s actual knowledge” or
“Seller has no knowledge” or any similar phrase implying a limitation on the
basis of knowledge shall mean the actual, present, conscious knowledge of Robert
A. Indeglia, Jr. or Chris Morosetti after inquiry to the General Manager for the
Hotel (collectively, the “Seller Knowledge Individuals”), on the Effective Date
but without any additional further investigation or inquiry (provided that
Seller hereby confirms that the Sellers Knowledge Individuals and the General
Manager for the Hotel have read the representations and warranties of Seller set
forth in Section 5.1 and elsewhere in this Agreement) but such individuals shall
not have any individual liability in connection herewith. Without limiting the
foregoing, Purchaser acknowledges that the Seller Knowledge Individuals have not
performed and are not obligated to perform any investigation or review of any
files or other information in the possession of Seller, or to make any inquiry
of any persons other than the General Manager, or to take any other actions in
connection with the representations and warranties of Seller set forth in this
Agreement. Neither the actual, present, conscious knowledge of any other
individual or entity, nor the constructive knowledge of the Seller Knowledge
Individuals or of any other individual or entity, shall be imputed to the Seller
Knowledge Individuals.

 

For the purposes of this Agreement and the documents to be delivered pursuant
hereto, references to “To Purchaser’s knowledge” or “Purchaser’s actual
knowledge” or “Purchaser has no knowledge” or any similar phrase implying a
limitation on the basis of knowledge shall mean the actual, present, conscious
knowledge of Michael C. Coolidge or Gil Murillo (collectively, the “Purchaser
Knowledge Individuals”), on the Effective Date but without any additional
further investigation or inquiry but such individuals shall not have any
individual liability in connection herewith.  Neither the actual, present,
conscious knowledge of any other individual or entity, nor the constructive
knowledge of the Purchaser Knowledge Individuals or of any other individual or
entity, shall be imputed to the Purchaser Knowledge Individuals.

 

11.13            Confidentiality.

 

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(a)                               Disclosure of Confidential Information. The
terms of the transfers contemplated in this Agreement, including the Purchase
Price and all other financial terms, as well as the non-public information
discovered by, provided to or otherwise obtained by Purchaser and Seller and
their respective agents either prior to or after the Effective Date in
connection with the Hotel or the Business (the “Confidential Information”) shall
remain confidential and shall not be disclosed by Purchaser or Seller without
the written consent of the other party except (i) to each party’s affiliates,
officers, directors, lenders, investors and prospective investors, employees,
agents and representatives (including legal counsel, accountants and similar
professionals to the extent the party deems it reasonably necessary to inform
such person(s), in which case they shall inform each of the foregoing persons of
such party’s obligations under this Section and shall secure the agreement of
such persons to be bound by the terms hereof); (ii) as otherwise required by
law, rule or regulation or as may be necessary to obtain Permits from any
governmental authority; or (iii) in connection with Purchaser’s filings or other
disclosures as required by the Securities and Exchange Commission; provided,
however, that Purchaser and Seller will advise the other party immediately upon
receiving any demand for disclosure of any Confidential Information and the
other party will have the right to attempt to obtain a protective order or agree
to an arrangement with the person or entity demanding such Confidential
Information to prevent or limit the extent of such disclosure, prior to the
applicable party’s disclosure of such Confidential Information.

 

(b)                              Publicity. Prior to or following Closing, any
press releases or public announcements with respect to the sale contemplated
herein or any matters set forth in this Agreement will be made only in the form
approved by both Purchaser and Seller, in such parties’ sole discretion;
provided, however, this Section 11.13(b) shall not restrict Seller or Purchaser
from public announcements or filings required or allowed per the terms of
Section 11.13(a).

 

(c)                               Indemnification. Each party shall indemnify
and hold the other party harmless from and against any and all Claims suffered
or incurred by the other party and arising out or in connection with a breach by
the other party of the provisions of this Section 11.13.

 

(d)                            Survival. The provisions of this Section 11.13
shall survive the Closing and termination of this Agreement.

 

11.14            No-Offer.

 

The delivery of this Agreement to Seller shall not be deemed an offer by
Purchaser to enter into any transaction or to enter into any other relationship
with Seller, whether on the terms contained in this Agreement or on any other
terms. This Agreement shall not be binding upon Purchaser or Seller, nor shall
Purchaser or Seller have any obligations or liabilities or any rights with
respect hereto, unless and until both Purchaser and Seller have executed and
delivered this Agreement.

 

11.15            Privacy Laws.

 

To the extent Purchaser reviews, is given access to or otherwise obtains any
Hotel Guest Data or other customer or guest information as part of the purchase
of the Hotel, Purchaser shall at all times comply in all material respects with
all applicable Laws concerning (i) the privacy and use of such data and
information and the sharing of such information and data with third parties
(including, without limitation, any restrictions with respect to Purchaser’s or
any third party’s ability to use, transfer, store, sell, or share such
information and data), and (ii) the establishment of adequate security measures
to protect such data and information. This Section 11.15 shall survive the
Closing or earlier termination of this Agreement.

 

11.16            Further Assurances.

 

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From the Effective Date until the Closing or earlier 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, (i) obtaining all necessary
consents, approvals and authorizations required to be obtained from any
governmental authority or other person under this Agreement or applicable laws,
and (ii) effecting all registrations and filings required under this Agreement
or applicable laws. 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. The immediately preceding sentence of this Section 11.16
shall survive the Closing.

 

11.17            WAIVER OF TRIAL BY JURY.

 

SELLER AND PURCHASER EACH HEREBY WAIVE ITS RIGHT TO A TRIAL BY JURY IN ANY
LITIGATION OR OTHER COURT PROCEEDING WITH RESPECT TO ANY MATTER ARISING FROM OR
IN CONNECTION WITH THIS AGREEMENT. THIS SECTION 11.17 SHALL SURVIVE THE CLOSING
OR EARLIER TERMINATION OF THIS AGREEMENT.

 

11.18            Liability Under Deed.

 

Purchaser agrees that if Purchaser has any right or claim against Seller
pursuant to the Deed delivered by Seller to Purchaser, Purchaser shall exhaust
all of its rights and remedies against the Title Company pursuant to the Title
Policy prior to bringing any claim or action against Seller in respect of such
warranties. This Section 11.18 shall only be effective to the extent it does not
impair Purchaser’s ability to pursue its rights and remedies against the Title
Company and it shall survive the Closing.

 

11.19            Exhibits and Schedules.

 

Notwithstanding any specific reference to a section of part of this Agreement in
a disclosure set forth in any exhibit or schedule, such disclosures shall be
deemed to have been disclosed with respect to all other sections of this
Agreement to which such disclosure is reasonably apparent. Terms used in the
schedules and exhibits and not otherwise defined therein shall have the meanings
as are ascribed to such terms in this Agreement.

 

11.20            Assignments.

 

Purchaser may not assign this Agreement without Seller’s prior written consent
which consent may be withheld in Seller’s sole discretion; provided, however,
Purchaser may assign its rights under this Agreement upon notice to but without
Seller’s consent to any affiliate of Purchaser, provided that the persons who
have control over Purchaser also have control over such affiliate of Purchaser.
Any assignee of Purchaser shall assume in writing all obligations and
liabilities of Purchaser under this Agreement. From and after any such
assignment, said assignee shall be substituted for Purchaser under this
Agreement, and Purchaser shall have no further obligation with respect thereto
(except, if such is the case, as a partner of the assignee).

 

11.21            Escrow Agent as Reporting Person.

 

In order to assure compliance with the requirements of Section 6045 of the Code,
and any related reporting requirements of the Code, the parties hereto agree as
follows:

 

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(a)                                              Reporting Person. Escrow Agent
agrees to assume all responsibilities for information reporting required under
Section 6045(e) of the Code, and Seller and Purchaser hereby designate Escrow
Agent as the person to be responsible for all information reporting under
Section 6045(e) of the Code (the “Reporting Person”).

 

(b)                                             Obligations of Seller and
Purchaser. Seller and Purchaser hereby agree (i) to provide to the Reporting
Person all information and certifications regarding such party, as reasonably
requested by the Reporting Person or otherwise required to be provided by a
party to the transaction described herein under Section 6045 of the Code;
(ii) to provide to the Reporting Person such party’s taxpayer identification
number and a statement (on Internal Revenue Service Form W-9 or an acceptable
substitute form, or on any other form the applicable current or future Code
sections and regulations might require and/or any form requested by the
Reporting Person), signed under penalties of perjury, stating that the taxpayer
identification number supplied by such party to the Reporting Person is correct;
and (iii) to retain this Agreement for not less than four (4) years from the end
of the calendar year in which the Closing occurred, and to produce it to the
Internal Revenue Service upon a valid request therefore.

 

11.22            Exclusivity.

 

Following the mutual execution of this Agreement and continuing until any
termination of this Agreement, Seller agrees not to offer the Property,
entertain offers for the Property, negotiate for its sale, or make information
about the Property available (for purpose of sale or refinance) to any third
party.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

 

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SIGNATURE BY SELLER

 

IN WITNESS WHEREOF, this Agreement has been duly executed in multiple
counterparts by the parties hereto on the dates set forth below.

 

 

SELLER:

 

 

 

NMG-BRAINTREE, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/ Robert Indeglia, Jr.

 

 

 

Robert Indeglia, Jr., Authorized Party

 

 

 

 

Date:

3/19/2012

 

 

 

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SIGNATURE BY PURCHASER

 

IN WITNESS WHEREOF, this Agreement has been duly executed in multiple
counterparts by the parties hereto on the dates set forth below.

 

 

PURCHASER:

 

 

 

CWI BRAINTREE HOTEL, LLC,

 

a Delaware limited liability company

 

 

 

By:

/s/ Michael G. Medzigian

 

 

 

 

Michael G. Medzigian, President

 

 

 

 

Date: March 16, 2012

 

 

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SIGNATURE BY ESCROW AGENT

 

The undersigned hereby acknowledges receipt of a fully-executed copy of this
Agreement and agrees to accept, hold, deliver and disburse the Earnest Money
strictly in accordance with the terms of the Agreement and to otherwise perform
the obligations of Escrow Agent and Reporting Person as set forth in the
Agreement.

 

 

 Date:

 

 

 

 

 

 

 

FIRST AMERICAN TITLE INSURANCE COMPANY

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

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EXHIBIT “A”

 

(Definitions)

 

“Accrued Vacation and Sick Time” shall have the meaning set forth in
Section 8.7(a).

 

“Additional Deposit” shall have the meaning set forth in Section 8.1(c).

 

“Advance Deposits” shall have the meaning set forth in Section 1.2(b)(vii).

 

“Agreement” shall have the meaning set forth in the first paragraph of this
Agreement.

 

“Baggage Inventory List” shall have the meaning set forth in Section 8.3(b).

 

“Bill of Sale and Assignment” shall have the meaning set forth in
Section 8.4(a)(ii).

 

“Bookings” shall have the meaning set forth in Section 1.2(b)(vii).

 

“Books and Records” shall have the meaning set forth in Section 1.2(b)(vi).

 

“Broker” shall mean O’Connell Hospitality Group.

 

“Business” means the lodging business and all activities related thereto
conducted at the Hotel, including, without limitation, (i) the rental of any
guest rooms or other facilities at the Hotel, (ii) the maintenance and repair of
the Real Property and, to the extent applicable, the Personal Property,
(iii) the employment of the Hotel Employees, and (iv) the payment of taxes.

 

“Business Day” shall have the meaning set forth in Section 11.11.

 

“Casualty Threshold” shall have the meanings set forth in Section 9.3.

 

“Claims” shall mean any demands, claims, legal or administrative proceedings,
losses, liabilities, damages, penalties, fines, liens, judgments, costs or
expenses whatsoever (including, without limitation, reasonable attorneys’ fees
and expenses), whether direct or indirect, known or unknown, foreseen or
unforeseen.

 

“Closing” shall mean the consummation of the purchase and sale of the Hotel
pursuant to this Agreement.

 

“Closing Date” shall mean the date specified in Section 8.1(a).

 

“Closing Statement” shall have the meaning set forth in Section 8.2(a)(ii).

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Condemnation Threshold” shall have the meaning set forth in Section 9.2.

 

“Confidential Information” shall have the meaning set forth in Section 11.13(a).

 

“Consumables” shall have the meaning set forth in Section 1.2(b)(ii).

 

“Cure Date” shall have the meaning set forth in Section 3.1.

 

A-1

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“Current Account” shall have the meaning set forth in Section 8.2(i).

 

“Cut-off Time” shall mean 11:59 p.m. on the date preceding the Closing Date.

 

“Deed” shall have the meaning set forth in Section 8.4(a)(i).

 

“Delivered Information” shall have the meaning set forth in Section 10.1.

 

“Due Diligence Period” shall mean a period of time commencing on the Effective
Date and ending at 5:00 PM, Eastern Time, on the date that is forty-five (45)
days after the Effective Date.

 

“Earnest Money” shall have the meaning set forth in Section 2.2(c).

 

“Effective Date” shall have the meaning set forth in the first paragraph of this
Agreement.

 

“Employee Claims” shall mean any loss, damage, liability, claim, cost or expense
(including, without limitation, reasonable attorneys’ fees) relating to a past
or present Hotel Employee.

 

“Equipment Leases” shall have the meaning set forth in Section 1.2(b)(v).

 

“Escrow Agent” shall mean the Title Company specified in Section 4.1(a).

 

“Escrow Instructions” shall have the meaning set forth in Section 2.2(a).

 

“Excluded Assets” shall have the meaning set forth in Section 1.2(c).

 

“Expendables” shall have the meaning set forth in Section 1.2(b)(iii).

 

“Extension Election Notice” shall have the meaning set forth in Section 8.1(c).

 

“Franchise Agreement” shall mean the franchise agreement pursuant to which
Tenant operates the Hotel as a Hampton Inn Hotel.

 

“Franchisor” shall mean Hampton Inns Franchise LLC, a Delaware limited liability
company, as successor in interest to Promus Hotels, Inc., a Delaware
corporation.

 

“Franchisor Approval” shall have the meaning set forth in Section 1.3(g).

 

“Franchisor Approval Period” shall have the meaning set forth in Section 1.3(g).

 

“Furnishings” shall have the meaning set forth in Section 1.2(b)(i).

 

“General Manager” shall mean the then current general manager of the Hotel.

 

“Good Faith Deposit” shall have the meaning set forth in Section 2.2(b).

 

“Good Faith Deposit Date” shall have the meaning set forth in Section 2.2(b).

 

“Hazardous Substances” shall mean any substance or material which (i) has been
or is at any time determined by any state or federal court in a reported
decision to be a waste, pollutant, contaminant, hazardous waste or hazardous
substance, (ii) has been or is determined by any governmental authority to be a
waste, pollutant, contaminant, hazardous waste, hazardous substance or hazardous
material capable

 

A-2

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of posing a risk of injury to health, safety or property, (iii) is described as,
or has been or is determined to be a waste, pollutant, contaminant, hazardous
waste, hazardous substance, hazardous material, dangerous or toxic chemical,
material, waste or substance (“pollutant”) under any Hazardous Waste Law;
(iv) petroleum, crude oil or any fraction of petroleum or crude oil, (v) any
radioactive material, including any source, special nuclear or by product
material, as defined at 42 U.S.C. §2011 et seq., and amendments thereto and
reauthorizations thereof, (vi) asbestos containing materials in any form or
condition, (vii) polychlorinated biphenyls, (viii) methane gas or any related
substance in violation of any Hazardous Waste Laws, (ix) lead based paint in any
form or condition in violation of any Hazardous Waste Laws, (x) bioaerosols in
excess of the guidelines and recommendations established by the United States
Environmental Protection Agency (“USEPA”), and (xi) any pathogen and airborne
pathogen (naturally occurring or otherwise), toxin, or other biological agent or
condition, including without limitation any fungus mold, mycotoxins and
microbial matter (“Pathogens”), further including, without limitation, those
molds, mycotoxins, microbial matter, and airborne Pathogens (naturally occurring
or otherwise) in the USEPA guidelines on Mold Remediation in Schools and
Commercial Buildings, EPA 402-K-01-001, March 2001 and any analogous Hazardous
Waste Law.

 

“Hazardous Waste Law” shall mean any law, statute, ordinance, code, rule,
regulation, decree, resolution, requirement, standard, permit or license
(including consent decrees, judicial decisions and administrative orders),
together with all related amendments, implementing preservation, conservation or
regulation of the environment, regulations and reauthorizations, pertaining to
the protection, preservation, conservation or regulation of the environment or
public health or safety, including, without limitation, the following: (i) the
Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and
Solid Waste Amendments of 1984, 42 U.S.C. Section 6901 et seq. (“RCRA”);
(ii) the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. Section 9601 et seq. (“CERCLA”); (iii) the Clean Water Act, 33 U.S.C.
Section 1251 et seq.; (iv) the Safe Drinking Water Act, 42 U.S.C. Section 300f
et seq.; (v) the Toxic Substances Control Act, 15 U.S.C. Sections 2601-2629
(“TOSCA”); (vi) the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq.; (vii) the Clean Air Act, 42 U.S.C. Section 7401 et seq.;
(viii) the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
Section 136 et seq.; and (ix) the Occupational Safety and Health Act of 1970, 29
U.S.C. Section 651 et seq.

 

“Holdback” shall have the meaning set forth in Section 7.3.

 

“Hotel” shall have the meaning set forth in Recital A.

 

“Hotel Contracts” shall have the meaning set forth in Section 1.2(b)(iv).

 

“Hotel Employee Schedule” shall mean such employment information for all Hotel
Employees as is provided to the Purchaser by the Manager, it being understood
and agreed that the Hotel Employee Schedule may consist only of a list of
employees (without names or Social Security numbers), with an identification of
each such employee’s department, position, pay rate (hourly or annually), tenure
(start date) and status (whether full-time or part-time).

 

“Hotel Employees” shall mean the persons employed by Manager to operate the
Hotel.

 

“Hotel Guest Data” means all guest or customer profiles, contact information
(e.g., addresses, phone numbers, facsimile numbers and email addresses),
histories, preferences and any other guest or customer information obtained or
collected by Seller, Tenant and/or Manager in the Ordinary Course of Business
from guests of the Hotel relating specifically to such guests’ stay at the
Hotel. Hotel Guest Data does not include (i) any information maintained by
Manager or its affiliates or Franchisor or its affiliates in their

 

A-3

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corporate databases that is not specific to guest stays at the Hotel including,
without limitation, websites, central reservation databases, operational
databases and preferred guest programs of Manager or affiliates of Manager or
Franchisor or affiliates of Franchisor, and (ii) any data and information
collected by Manager or Franchisor the transfer or disclosure of which is
prohibited or to the extent that it is restricted by applicable Laws.

 

“Hotel Improvements” shall have the meaning set forth in Section 1.2(a)(ii).

 

“Hotel Land” shall have the meaning set forth in Section 1.2(a)(i).

 

“Indemnity Obligations” shall have the meaning set forth in Section 5.5(a)(i).

 

“Inspections and Studies” shall have the meaning set forth in Section 1.3(a).

 

“Intangible Assets” shall have the meaning set forth in Section 1.2(b)(ix).

 

“Intervening Lien” shall have the meaning set forth in Section 4.1(b).

 

“Investigation Documents” shall mean and refer to those documents listed and
described on Exhibit “I”, all of which shall be deemed Confidential Information.

 

“Laws” shall mean all federal, state or local laws, statutes or regulations, in
each instance to the extent applicable to the ownership and/or operation of the
Hotel, or otherwise binding upon a party to this Agreement.

 

“Losses” shall have the meaning set forth in Section 5.5(a)(i).

 

“Manager” shall mean MHG-Braintree, LLC.

 

“Management Agreement” shall mean that certain management agreement currently in
effect between Manager and Tenant.

 

“Material Contract” shall mean any Hotel Contract which both (a) requires
aggregate annual payments in excess of Fifty Thousand and No/100 Dollars
($50,000.00) for any year during the term of such Hotel Contract after Closing,
and (b) cannot be terminated without cost on less than thirty (30) days notice.

 

“New Franchise Agreement” shall mean the franchise agreement pursuant to which
Purchaser intends to execute to operate the Hotel as a Hampton Inn Hotel.

 

“Notice” shall have the meaning set forth in Section 11.3.

 

“Objection Period” shall have the meaning set forth in Section 3.1.

 

“Operating Lease” shall mean that certain Operating Lease pursuant to which
Seller leases the Hotel to Tenant.

 

“Ordinary Course of Business” shall mean the ordinary course of business
consistent with Seller’s, Tenant’s and/or Manager’s past custom and practice for
the Business within the previous twenty-four (24) months, taking into account
the facts and circumstances in existence from time to time, including, without
limitation, actions taken by Manager pursuant to the Management Agreement.

 

“Permits” shall have the meaning set forth in Section 1.2(b)(viii).

 

A-4

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“Permitted Exceptions” shall mean, collectively, (i) any lien, encumbrance or
security interest created by Purchaser at Closing in connection with Purchaser’s
acquisition of the Hotel, (ii) any exceptions to title that are mutually agreed
upon by Seller and Purchaser in writing, and (iii) any title exceptions set
forth on the Title Report to which Purchaser does not object in accordance with
Section 3.1 or Section 4.1, and any title exceptions to which Purchaser objects
that are not cured and which Purchaser is deemed to have accepted and approved
in accordance with Section 3.1 or Section 4.1; provided, however, that the
following items will be deemed Permitted Exceptions whether or not Purchaser
objects thereto: (x) zoning ordinances and regulations, (y) mechanic’s liens
caused by Purchaser or its agents, and (z) standard printed title exceptions,
other than those that may be removed by endorsement or deletion or by the
execution and delivery of a customary affidavit of Seller (in form reasonably
acceptable to the Title Company) in favor of the Title Company.

 

“Personal Property” shall have the meaning set forth in Section 1.2(b).

 

“Post-Closing Expenses” shall have the meaning set forth in Section 8.2(f).

 

“Post-Closing Liability Cap” shall have the meaning set forth in Section 5.5(a).

 

“Preliminary Closing Statement” shall have the meaning set forth in
Section 8.2(a)(i).

 

“PTR Exceptions” shall have the meaning set forth in Section 4.1(a).

 

“Purchase Orders” shall have the meaning set forth in Section 8.2(f).

 

“Purchase Price” shall have the meaning set forth in Section 2.1.

 

“Purchaser” shall have the meaning set forth in the first paragraph of this
Agreement.

 

“Purchaser’s Certificate” shall have the meaning set forth in
Section 8.4(b)(iv).

 

“Purchaser Knowledge Individuals” shall have the meaning set forth in
Section 11.12.

 

“Real Property” shall mean the Hotel Land and Hotel Improvements, as set forth
in Section 1.2(a).

 

“Related Parties” shall have the meaning set forth in Section 5.5(a)(i).

 

“Released Parties” shall have the meaning set forth in Section 10.4.

 

“Reporting Person” shall have the meaning set forth in Section 11.21(a).

 

“Retained Accounts” shall have the meaning set forth in Section 8.2(i).

 

“Review Date” shall have the meaning set forth in Section 3.1.

 

“Second Deposit” shall have the meaning set forth in Section 2.2(c).

 

“Second Deposit Date” shall have the meaning set forth in Section 2.2(c).

 

“Seller” shall have the meaning set forth in the first paragraph of this
Agreement.

 

“Seller Knowledge Individuals” shall have the meaning set forth in
Section 11.12.

 

A-5

--------------------------------------------------------------------------------

 

“Seller Party Obligations” shall have the meaning set forth in Section 10.4.

 

“Seller’s Certificate” shall have the meaning set forth in Section 8.4(a)(iii).

 

“Seller’s Lien” shall have the meaning set forth in Section 4.1(b).

 

“Space Leases” shall mean leases or other grants of rights to third parties to
occupy space in or about the hotel for retail or other commercial purposes, and
shall include leases for space on the rooftop of the Hotel. The Operating Lease
shall not constitute a Space Lease.

 

“Survey” shall have the meaning set forth in Section 3.1.

 

“Surviving Obligations” shall have the meaning set forth in Section 1.3(f).

 

“Tax Certificates” shall have the meaning set forth in Section 8.5(c).

 

“Tenant” shall mean NMG-Braintree Operating, LLC, a Delaware limited liability
company.

 

“Threshold” shall have the meaning set forth in Section 5.5(a)(i).

 

“Title Company” shall have the meaning set forth in Section 4.1(a).

 

“Title Endorsements” shall have the meaning set forth in Section 4.1(a).

 

“Title Objections” shall have the meaning set forth in Section 4.1(a).

 

“Title Report” shall have the meaning set forth in Section 4.1(a).

 

“Title Requirement Letter” shall have the meaning set forth in Section 4.1(a).

 

“WARN Act” shall have the meaning set forth in Section 8.7(a).

 

A-6

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EXHIBIT “B”

 

(Legal Description of the Hotel Land)

 

A certain parcel of land in Braintree, Norfolk County, Commonwealth of
Massachusetts, known as Lot 52 shown on Land Court No. 11973R, a plan prepared
by Bradford Saivetz and Associates and dated December 8, 1997, with Certificate
of Title 154171, and bounded and described as follows:

 

Beginning at a point on the northerly side of a curve to the left having a
radius of 1,200.00 feet and an arc length of 205.79 feet to a point at the
southeasterly corner of Lot 51 as shown on said plan;

 

Thence turning and running by Lot 51 N 37◦ 29' 15" W a distance of 391.13 feet
to a point on the Town Line that divides the Town of Braintree and the City of
Quincy;

 

Thence turning and running by said Town Line and by land now or formerly of the
Commonwealth of Massachusetts, blue Hills Reservation, N 48◦ 26' 45" E a
distance of 203.76 feet to a point;

 

Thence turning and running by Lot 18 as shown on Land Court Plan 119731 S 37◦
30' 57" E a distance of 434.78 feet to the point of beginning.

 

Together with the right to use Purgatory Road shown on Land Court Plan No.
11973A now known as Wood Road as set forth in Certificate of Title No. 10555.

 

B-1

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EXHIBIT “C”

 

(Escrow Instructions)

 

March       , 2012

 

FIRST AMERICAN TITLE INSURANCE COMPANY

[Insert Address of Title Company]

 

Re:                        Earnest Money deposit under Purchase and Sale
Agreement (the “Agreement”) dated as of March 19, 2012 (“Effective Date”) by and
between NMG-BRAINTREE, LLC, a Delaware limited liability company (“Seller”) and
CWI BRAINTREE HOTEL, LLC, a Delaware limited liability company (“Purchaser”)
covering the Hampton Inn Hotel, in Braintree, Massachusetts.

 

Ladies and Gentlemen:

 

Purchaser and Seller have entered into the Agreement pursuant to which Purchaser
agrees to purchase the hotel and property identified therein all as more
particularly set forth in the Agreement. All capitalized terms used, but not
defined in these escrow instructions shall have the meaning set forth in the
Agreement.

 

In accordance with the Agreement, Purchaser will deliver to the Escrow Agent
cash in the amounts set forth in the Agreement (and together with any interest
earned thereon, the “Deposit”).You are to hold the Deposit in escrow and deliver
it or any portion of it to Seller or Purchaser in accordance with these
instructions and the express terms of the Agreement which Escrow Agent
acknowledges it has received a fully executed copy thereof.  If Closing occurs
under the Agreement, you shall apply the Deposit in accordance with instructions
from Purchaser and Seller.

 

If, prior to the expiration of the Due Diligence Period (as the same may be
extended), you receive a notice from Purchaser stating that it is terminating
the Agreement, you shall return the Deposit to Purchaser by delivering the same
in cash, by certified check or some other form of immediately available funds as
directed in writing by Purchaser.

 

If, after the expiration of the Due Diligence Period, you receive a written
statement from Seller or Purchaser (the “Notice”) stating that (i) the notifying
party is entitled to the Deposit pursuant to the provisions of the Agreement;
and (ii) a copy of the Notice has been delivered to the other party (with
evidence of such delivery to the other party and the date thereof), you shall,
on the eleventh (11th) Business Day after your receipt of the Notice, deliver
the Deposit to the notifying party by delivering the same in cash, by certified
check or some other form of immediately available funds as directed in writing
by the notifying party, except that if you receive written notice from the other
party or its counsel within ten (10) Business Days after your receipt of the
Notice that the other party disputes the notifying party’s right to receive the
Deposit and directs you not to make the foregoing delivery, you shall not
deliver the Deposit to the notifying party but shall instead retain it pending
receipt of joint instructions from Purchaser and Seller, or, if appropriate,
interplead the Deposit in a court of competent jurisdiction. The Notice shall be
delivered, if at all, by recognized overnight courier with receipted delivery.

 

C-1

--------------------------------------------------------------------------------

 

You are not to disclose to any person (other than the parties hereto, their
employees, agents or independent contractors) any information about the
Agreement or its existence or this letter of instructions (except if requested
by the parties hereto or as may be required by court in any litigation or by
law).

 

The Deposit shall be deposited by Escrow Agent in an interest bearing money
market account at [Insert]. All interest will accrue to and be reported to
applicable taxing authorities, including the Internal Revenue Service, for the
account of the party to whom such interest is or will be paid. Upon request of
the Escrow Agent, the parties hereto shall supply the Escrow Agent with their
Federal Identification Numbers. A form W-9 must be completed by Purchaser
concurrently with the execution of these escrow instructions. You shall not be
required to institute legal proceedings of any kind pursuant to these
instructions, nor be required to defend any legal proceedings which may be
instituted against you with respect to the subject matter of these instructions
unless you are requested to do so by Purchaser or Seller and arrangements
reasonably satisfactory to you have been made to indemnify you against the cost
and expense of such defense by the party making such request. If any dispute
shall arise with respect to these instructions, whether such dispute arises
between the parties hereto or between the parties hereto and other persons, you
may interplead such disputants. You shall be responsible only for the
performance of such duties as are strictly set forth herein and in no event
shall you be liable for any act or failure to act under the provisions of this
letter except where such action or inaction is the result of your willful breach
of the provisions hereof, willful misconduct or gross negligence.

 

Seller and Purchaser each hereby agrees to indemnify you and hold you harmless
against any loss, liability or damage (including the cost of litigation and
reasonable counsel fees) incurred in connection with the performance of your
duties hereunder except as a result of your willful misconduct or gross
negligence. Purchaser and Seller shall each pay one-half (1/2) of your escrow
fees in connection with the transaction contemplated by this escrow agreement.

 

Please indicate your agreement to comply with the foregoing instructions by
executing at least two copies of this letter and returning one to Purchaser’s
counsel and one to Seller’s counsel.

 

Very truly yours,

 

SELLER:

 

 

 

NMG-BRAINTREE, LLC,

 

a Delaware limited liability company

 

 

 

By:

 

 

 

 

 

 

Printed name:

 

 

 

 

 

 

Title:

 

 

 

 

C-2

--------------------------------------------------------------------------------

 

PURCHASER:

 

 

 

 

 

CWI BRAINTREE HOTEL, LLC,

 

 

a Delaware limited liability company

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Printed name: Michael G. Medzigian

 

 

 

 

 

Title: President

 

 

 

C-3

--------------------------------------------------------------------------------

 

ACKNOWLEDGED AND AGREED:

 

 

 

 

 

ESCROW AGENT

 

 

 

 

 

FIRST AMERICAN TITLE INSURANCE COMPANY

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Printed name:

 

 

 

 

 

 

Title:

 

 

 

 

C-4

--------------------------------------------------------------------------------

 

EXHIBIT “D”

 

(Material Contracts)

 

 

None

 

D-1

--------------------------------------------------------------------------------

 

EXHIBIT “E”

 

(Permits)

 

 

Braintree Water & Sewer

Grease Trap Inspection

 

 

 

 

Town Of Braintree - Dept of Municipal License & Inspections

Food Service & MC

 

 

 

 

Town Of Braintree - Dept of Municipal License & Inspections

Hotel/Motel

 

 

 

 

Town Of Braintree - Dept of Municipal License & Inspections

Pool & Jacuzzi

 

 

 

 

The Commonwealth of MA

Certificate of Inspecation

 

 

 

 

Building Dept

Certificate of Occupancy

 

 

 

 

Massachusetts Department of Revenue

Excise Registration

 

 

 

 

Massachusetts Department of Revenue

Sales & Tax Registration

 

E-1

--------------------------------------------------------------------------------

 

EXHIBIT “F”

 

BILL OF SALE AND ASSIGNMENT

 

THIS ASSIGNMENT AND BILL OF SALE (this “Agreement’) is made as of the ____ day
of _____________, 2012 by and between NMG-BRAINTREE, LLC, a Delaware limited
liability company (“Seller”), and CWI BRAINTREE HOTEL, LLC, a Delaware limited
liability company (“Purchaser”), in furtherance of that certain Purchase and
Sale Agreement by and among Seller and Purchaser, dated March 19, 2012 (the
“Purchase Agreement”).

 

1.         Sale and Transfer of Assets. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller hereby sells,
conveys, transfers, assigns and delivers unto Purchaser, all of Seller’s legal
and beneficial right, title and interest in and to all of the Personal Property,
including, without limitation, those Hotel Contracts listed on Exhibit “F-1”
attached hereto, the Equipment Leases listed on Exhibit “F-2” and the assignable
Permits listed on Exhibit “F-3” attached hereto, all as described and defined in
the Purchase Agreement (collectively, the “Purchased Assets”).

 

2.         Assumption and Indemnity.        Seller agrees to perform all duties
and obligations related to the Purchased Assets arising from or attributable to
the period prior to the Closing Date, and except (i) as may be the express
obligation of Purchaser pursuant to an express provision of the Purchase
Agreement, or (ii) for any item for which Purchase received a credit at Closing
(as defined in the Purchase Agreement) (to the extent of such credit), Seller
agrees to indemnify, defend, and hold harmless Purchaser, on Purchaser’s demand,
for, from, and against any claims related to the Purchased Assets arising from
or attributable to the period prior to the Closing Date. Purchaser assumes and
agrees to perform all duties and obligations related to the Purchased Assets
arising from or attributable to the period from and after the Closing Date, and
except (i) as may be the express obligation of Seller pursuant to an express
provision of the Purchase Agreement and with respect to which Purchaser did not
receive a credit at Closing, or (ii) for any item for which Seller received a
credit at Closing (to the extent of such credit), Purchaser agrees to indemnify,
defend, and hold harmless Seller, on Seller’s demand, for from, and against any
claims related to the Purchased Assets arising from or attributable to the
period from and after the Closing Date.

 

3.         Purchase Agreement Governs. This Agreement is delivered pursuant to,
and is subject to the express representations, warranties, covenants, and
agreements set forth in the Purchase Agreement. This Agreement is only intended
to effectuate the sale, transfer and conveyance to Purchaser of the Purchased
Assets in accordance with the provisions of the Purchase Agreement, and nothing
herein shall expand the rights, covenants, obligations, representations or
warranties of Seller or Purchaser (express or implied) beyond what is provided
for in the Purchase Agreement, and the terms of this Agreement shall be
understood and construed accordingly. To the extent that any provision of this
Agreement is inconsistent with the provisions of the Purchase Agreement, the
provisions of the Purchase Agreement shall govern.

 

4.         Condition of Purchased Assets. Except as expressly provided in the
Purchase Agreement, including those representations and warranties of Seller set
forth pursuant to Article 5 thereof, which representations and warranties are
expressly incorporated herein by this reference, all Purchased Assets
transferred by this Agreement are transferred in their present condition and
state of repair, “AS IS” and “WHERE IS”, with all defects and liabilities,
latent or apparent.

 

F-1

--------------------------------------------------------------------------------

 

5.         Terms Defined. Initially capitalized terms used but not defined
herein have the respective meanings given to them in the Purchase Agreement.

 

6.         Additional Assurances. Purchaser and Seller shall, as may be
reasonably requested by the other party from time to time, provide such
additional assurances, execute and deliver such instruments, assignments,
certificates, or other documents, and take such actions as reasonably shall be
necessary or desirable to evidence and to give full effect to the provisions of
this Agreement.

 

7.         Counterpart Execution. This Agreement may be executed in any number
of original counterparts, each of which will be effective on delivery and all of
which together will constitute one binding agreement of Seller and Purchaser.
Any signature page of this Agreement may be detached from any executed
counterpart of this Agreement without impairing the legal effect of any
signatures and may be attached to another counterpart of this Agreement that is
identical in form to the document signed (but that has attached to it one or
more additional signature pages).

 

8.         Successors and Assigns. This Agreement shall be binding upon the
parties hereto, their successors, assigns and transferees.

 

9.         Controlling Law. This Agreement and all questions relating to its
validity, interpretation, performance, and enforcement shall be governed by and
construed in accordance with the laws of the State of Massachusetts.

 

[Signature pages to follow]

 

F-2

--------------------------------------------------------------------------------

 

SIGNATURE PAGE TO ASSIGNMENT AND BILL OF SALE

 

IN WITNESS WHEREOF, this Agreement has been duly executed in multiple
counterparts by the parties hereto on the dates set forth below.

 

SELLER:

 

 

 

NMG-BRAINTREE, LLC,

 

a Delaware limited liability company

 

 

 

 

By:

 

 

 

 

 

Printed name:

 

 

 

 

 

Title:

 

 

 

 

 

 

PURCHASER:

 

 

 

CWI BRAINTREE HOTEL, LLC,

 

a Delaware limited liability company

 

 

 

 

 

 

By:

 

 

 

 

 

Printed name:

 

 

 

 

 

Title:

 

 

 

F-3

--------------------------------------------------------------------------------

 

EXHIBIT F-1

 

(Hotel Contracts)

 

F-4

--------------------------------------------------------------------------------

 

EXHIBIT “F-2”

 

(Equipment Leases)

 

F-5

--------------------------------------------------------------------------------

 

EXHIBIT “F-3”

 

(Permits)

 

F-6

--------------------------------------------------------------------------------

 

EXHIBIT “G”

 

SELLER’S CLOSING CERTIFICATE

 

THIS SELLER’S CLOSING CERTIFICATE (the “Seller’s Certificate”) is made as of the
_____________________ 2012, NMG-BRAINTREE, LLC, a Delaware limited liability
company (“Seller”), in favor of CWI BRAINTREE HOTEL, LLC, a Delaware limited
liability company (the “Purchaser”), in furtherance of that certain Purchase and
Sale Agreement by and among Seller and Purchaser, dated March 19, 2012 (the
“Purchase Agreement”).

 

Recitals:

 

A.        Pursuant to the Purchase Agreement, Seller agreed to sell and
Purchaser agreed to purchase the Property (as defined in the Purchase Agreement)
commonly known as the “Hampton Inn Hotel, Braintree, Massachusetts”.

 

B.         Section 8.4(a)(iii) of the Purchase Agreement requires the delivery
of this Seller’s Certificate.

 

Certificate:

 

NOW THEREFORE, pursuant to the Purchase Agreement, Seller hereby certifies and
confirms to Purchaser as follows:

 

1.         All of the representations and warranties of Seller set forth in the
Purchase Agreement the are true, complete and correct in all material respects
as of the date hereof, except as modified pursuant to and in accordance with
Section 5.3, as set forth on Exhibit “G-1” attached hereto.

 

2.         This Seller’s Certificate is subject to the terms and conditions of
the Purchase Agreement, including all applicable limitations on liability and
all applicable survival limitations contained in the Purchase Agreement.

 

The undersigned have executed this Seller’s Certificate as of the date set forth
above.

 

NMG-BRAINTREE, LLC,

a Delaware limited liability company

 

 

 

 

By:

 

 

 

 

 

Printed name:

 

 

 

 

 

Title:

 

 

 

G-1

--------------------------------------------------------------------------------

 

EXHIBIT G-1

 

G-2

--------------------------------------------------------------------------------

 

Exhibit “H”

 

PURCHASER’S CLOSING CERTIFICATE

 

THIS PURCHASER’S CLOSING CERTIFICATE (the “Purchaser’s Certificate”) is made as
of ________________ 2012 by CWI BRAINTREE HOTEL, LLC, a Delaware limited
liability company (the “Purchaser”), in favor of NMG-BRAINTREE, LLC, a Delaware
limited liability company (“Seller”), in furtherance of that certain Purchase
and Sale Agreement by and among Seller and Purchaser dated March 19, 2012 (the
“Purchase Agreement”).

 

Recitals:

 

A.        Pursuant to the Purchase Agreement, Seller agreed to sell and
Purchaser agreed to purchase the Hotel (as defined in the Purchase Agreement)
commonly known as the “Hampton Inn Hotel, Braintree, Massachusetts”.

 

B.         Section 8.4(b)(iv) of the Purchase Agreement requires the delivery of
this Purchaser’s Certificate.

 

Certificate:

 

NOW THEREFORE, pursuant to the Purchase Agreement, Purchaser hereby certifies
and confirms to Seller as follows:

 

1.         All of the representations and warranties of Purchaser set forth in
the Purchase Agreement are true, complete and correct in all material respects
as of the date hereof, except as set forth on Exhibit “H-1” attached hereto.

 

2.         This Purchaser’s Certificate is subject to the terms and conditions
of the Purchase Agreement, including all applicable limitations on liability and
all applicable survival limitations contained in the Purchase Agreement.

 

The undersigned have executed this Purchaser’s Certificate as of the date set
forth above.

 

PURCHASER:

 

CWI BRAINTREE HOTEL, LLC,

a Delaware limited liability company

 

 

 

 

By:

 

 

 

 

 

Printed name:

 

 

 

 

 

Title:

 

 

 

 

 

H-1

--------------------------------------------------------------------------------

 

EXHIBIT H-1

 

H-2

--------------------------------------------------------------------------------

 

EXHIBIT I

 

(Investigation Documents)

 

1.    Annual profit and loss statements, with full supporting schedules for the
last five years, and audited financial statements for the Property for the past
3 years.

 

2.    Monthly profit and loss statements, with full supporting schedules for the
past three years.

 

3.    Balance Sheet for December 31, 2008, 2009, 2010 and 2011.

 

4.    Most recent year to date profit and loss statement with comparison to
previous year.

 

5.    Metrics and statistics such as occupancy, average rate, RevPAR, etc. by
month for the last three years including STR reports.

 

6.    Capital expenditures for the period of January 1, 2008 through Dec. 31,
2011, with any current estimates for future expenditures.

 

7.    Real and personal property tax bills for 2009, 2010 and 2011 as well as
copies of any open appeals that have been prepared or filed.

 

8.    List of all insurance coverages, including cost and expiration dates.

 

9.    Seller’s existing title report.

 

10.  Copies of all service contracts, leases, franchise or license agreements,
permits, and any instruments that Purchaser is expected to assume.

 

11.  Copies of all recent (within the last 3 years) appraisals, market studies,
engineering and soil reports, if any.

 

12.  Copies of all environmental reports performed by the Seller.

 

13.  Survey (as-built), legal description, architectural and engineering plans
and specifications.

 

14.  Recent health, fire, building and elevator inspection reports.

 

15.  Physical inventory of supplies, consumables, and inventories, if any.

 

16.  Employee census listing all employees by name with corresponding position,
salary or wage scale, benefits to which they are entitled, accrued benefits
including vacation and any other payments.

 

17.  A summary of the health insurance program available to employees, including
the scope of benefits offered, the cost of the insurance by employee with a
breakdown of both the employer’s contribution and the employee’s contribution as
well as a summary of claims experience for each of the last three years.

 

18.  A summary of workers’ compensation insurance coverage as well as a summary
of claims experience for each of the last three years.

 

I-1

--------------------------------------------------------------------------------

 

19.  Most recent group bookings pace report with comparison to previous three
years.

 

20.  Detailed list of advanced reservations and bookings, including name of
party, deposit received, rate guaranteed, dates, status, and other pertinent
information including copies of all contracts relative to future definite group
bookings and corporate and locally negotiated rates.

 

21.  List of all purveyors and sources of supplies and services.

 

22.  Details of any pending or expected litigation as well as claims where
litigation has not commenced including all employee claims.

 

23.  List of all tenants, rent rolls, deposits, and terms of lease, if any.

 

24.  Copies of any contemplated renovation expansion or redevelopment programs,
including scope of work, estimate cost of implementation, design schemes or
programs, architectural renderings and any other reports related to a
contemplated renovation as appropriate (or written acknowledgment that there are
none).

 

25.  Copies of the 2010, 2011 and 2012 business plans, including the marketing,
advertising and public relations plans.

 

26.  Market segmentation reports for each of the last three years showing
average rates and room nights for each market segment.

 

27.  PIP Documents from Hilton related to the change of ownership.

 

28.  Copy of the most recent Quality Assurance Report issued by Hilton.

 

I-2

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EXHIBIT J

 

(Equipment Leases)

 

1.            Ricoh Copier

 

2.            Van Lease

 

End.

 

J-1

--------------------------------------------------------------------------------

 

EXHIBIT K

 

(Improvements)

 

NONE

 

K-1

--------------------------------------------------------------------------------

 

EXHIBIT L

 

(Audit Request Materials)

 

L-1

--------------------------------------------------------------------------------