AGREEMENT OF PURCHASE AND SALE

DRAFT for discussion purposes only. Neither this Agreement, nor any email or other statement (whether written or oral), shall constitute an offer or legally binding obligation on the part of any party identified herein or any affiliate thereof, related to the Hotel or the Property described herein, which obligation shall arise, with respect to any such party, only if and when this Agreement is executed and delivered by such party and the other party(party (ies) contemplated herein.

AGREEMENT OF PURCHASE AND SALE

AmongBetween

MHC Norcross, LLC, a Tennessee limited liability company,

SELLER

and

[______________________________________],
BUYER

Dated as of the [___] day of [__________, 2021]

Hampton Inn Peachtree Corners Norcross440 Technology Pkwy. NW, Norcross, GA 30092

AGREEMENT OF PURCHASE AND SALE

This AGREEMENT OF PURCHASE AND SALE (this “Agreement”) is made as of the [___] day of [__________, 2021] (the “Effective Date”) by and between MHC Norcross, LLC, a Tennessee limited liability company (“Seller”), and [______________________________________________________________] (“Buyer”).

BACKGROUND

A. Seller is the owner of a parcel of land located in, Norcross, Georgia (the “Land”) as more particularly described on Schedule A. Seller also owns hotel facilities and other Improvements (as defined below) on the Land commonly known as the Hampton Inn Peachtree Corners Norcross, 440 Technology Pkwy. NW, Norcross, GA 30092. Seller’s interest in the Land, together with the hotel facility and other Improvements located thereon, is referred to as the “Hotel”. The Hotel and the Property- Related Assets (as defined below) shall be referred to, collectively, as the “Assets”.

B. Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, Seller’s right, title and interest in the Assets on the terms and conditions hereinafter set forth.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound, the parties hereby agree as follows:

DEFINITIONS
1. Defined Terms. The capitalized terms used herein will have the following meanings.

“Accounts Receivable” means all amounts which Seller or OpCo is entitled to receive from the operation of the Hotel, but are not paid as of the Closing (including, without limitation, charges for the use or occupancy of any guest, conference, meeting or banquet rooms or other facilities at the Hotel, or any other goods or services provided by or on behalf of Seller at the Hotel, but expressly excluding any credit card charges and checks which Seller has submitted for payment as of the Closing).

“Additional Deposit” has the meaning provided in SECTION 2.3.

“Additional Deposit Date” means 5:00 pm Memphis, Tennessee time on the day that is forty five (45) days after the Effective Date.

“Affiliate” means any Person (as defined below) that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another Person. The term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and shall in any event include the ownership or power to vote fifty one percent (51%) or more of the outstanding equity or voting interests, respectively, of such other Person.

“Agreement” means this Agreement of Purchase and Sale, together with the exhibits and schedules attached hereto, as the same may be amended, restated, supplemented or otherwise modified.

“Anti-Money Laundering and Anti-Terrorism Laws” has the meaning assigned thereto in SECTION 3.1(f).

“Applicable Law” means all statutes, laws, common law, rules, regulations, ordinances, codes or other legal requirements of any Governmental Authority, board of fire underwriters and similar quasi-governmental agencies or entities, and any judgment, injunction, order, directive, decree or other judicial or regulatory requirement of any Governmental Authority of competent jurisdiction affecting or relating to the Person or Assets in question.

“Assets” has the meaning assigned thereto in “Background” paragraph A.

“Asset File” means the materials with respect to the Assets (i) previously or hereafter delivered to Buyer or its representatives by or on behalf of Seller, whether written or orally, (ii) made available to Buyer at the Hotel or at the offices of Broker, each of which may be orally or written, or (iii) on the data room web site created for the transactions contemplated hereby.

“Asset Management Agreement” means that certain asset management agreement entered into by Asset Manager and Seller.

“Asset Manager” means McNeill Asset Management Services, LLC, a Delaware limited liability Company.

“Assigned Accounts Receivable” has the meaning assigned thereto in SECTION 10.3(b)() (i)

“Assignment of Contracts and Leases” has the meaning assigned thereto in SECTION 6.1(a).

“Assignment of Intangibles” has the meaning assigned thereto in SECTION 6.1(b).

“Basket Limitation” means an amount equal to 0.5% of the Purchase Price.

“Beverage Operations” has the meaning given to it in SECTION 14.23.

“Bill of Sale” has the meaning assigned thereto in SECTION 6.2(b).

“Bookings” has the meaning assigned thereto in SECTION 2.1(b)() (vii).

“Broker” means Hodges Ward Elliott, Inc. as agent for the Seller.

“Business Day” means any day other than a Saturday, Sunday or other day on which banks are authorized or required by law to be closed in Memphis, Tennessee.

“Buyer” has the meaning assigned thereto in the Preamble to this Agreement.

“Buyer-Related Entities” has the meaning assigned thereto in SECTION 11.1.

“Buyer Waived Breach” has the meaning assigned thereto in SECTION 11.3.

“Buyer’s Knowledge” means, collectively, (i) the actual knowledge of Buyer based upon the actual knowledge of [________________], (ii) any and all information contained in the Asset File, and (iii) any and all information from any of Buyer’s reports, inspections, surveys and/or studies. The named individuals shall have no personal liability by virtue of their inclusion in this definition.

“Buyer’s Vendors” has the meaning assigned thereto in SECTION 7.1.

“Cap Limitation” means an amount equal to 1.5% of the Purchase Price.

“Claims” has the meaning assigned thereto in SECTION 7.3.

“Closing” has the meaning assigned thereto in SECTION 2.4(a).

“Closing Date” has the meaning assigned thereto in SECTION 2.4(a).

“Closing Documents” means any certificate, assignment, instrument or other document delivered pursuant to this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. Any reference herein to a particular provision of the Code means, where appropriate, the corresponding provision in any successor statute.

“Condition of the Assets” has the meaning assigned thereto in SECTION 7.2(b).

“Cut-Off Time” has the meaning assigned thereto in SECTION 10.1.

“Deed” has the meaning assigned thereto in SECTION 6.2(a).

“Deposit” has the meaning assigned thereto in SECTION 2.3.

“Effective Date” has the meaning assigned thereto in the preamble to this Agreement.

“Employees” means, at any time, all employees who are employed by Manager (whether on a full-time or part-time basis) at the Hotel at the time in question.

“Environmental Laws” has the meaning assigned thereto in SECTION 3.2(f).

“Equipment Leases” has the meaning assigned thereto in SECTION 2.1(b)() (viVI).

“ERISA” means The Employee Retirement Income Security Act of 1974, as amended.

“Escrow Account” has the meaning assigned thereto in SECTION 14.5(a).

“Escrow Agent” has the meaning assigned thereto in SECTION 2.3.

“Excluded Assets” has the meaning assigned thereto in SECTION 2.1(c).

“Executive Order” has the meaning assigned thereto in SECTION 3.1(f).

“Existing Franchise Agreement” means that certain Franchise Agreement by and between Franchisor and OpCo related to the Hotel.

“Existing Survey” means any existing survey of the Land or Hotel in the Asset File.

“FF&E” has the meaning assigned thereto in SECTION 2.1(b)() (ii).

“Franchise Approval” has the meaning assigned thereto in SECTION 4.5(b).

“Franchisor” means Hilton Franchise Holding LLC or its affiliates.

“Governmental Authority” means any federal, state or local government or other political subdivision thereof, including, without limitation, any agency or entity exercising executive, legislative, judicial, regulatory or administrative governmental powers or functions, in each case to the extent the same has jurisdiction over the Person or Assets in question.

“Government List” has the meaning assigned thereto in SECTION 14.25.

“Guest Ledger” means any and all charges accrued to the open accounts of any guests or customers at the Hotel as of the Cut-Off Time for the use and occupancy of any guest, conference, meeting or banquet rooms or other facilities at the Hotel, any restaurant, bar or banquet services, or any other goods or services provided by or on behalf of Seller.

“Hazardous Materials” has the meaning assigned thereto in SECTION 7.2(b)() (i).

“Hotel” has the meaning assigned thereto in “Background” paragraph A.

“Hotel Lease” means that certain Hotel Lease whereby OpCo has leased the Hotel from Seller.

“Improvements” means to the extent the same constitute real property under Applicable Law, the buildings, structures, fixtures and other improvements on the Land, including, without limitation, any and all hotel rooms, meeting facilities, conference rooms, parking facilities, restaurants, spa and pool facilities and other recreational amenities.

“Initial Deposit” has the meaning provided in SECTION 2.3.

“Intangible Property” has the meaning assigned thereto in SECTION 2.1(b)() (xii).

“Inventories” has the meaning assigned thereto in SECTION 2.1(b)() (x).

“IRS” means the Internal Revenue Service.

“IRS Reporting Requirements” has the meaning assigned thereto in SECTION 14.4(c).

“Land” has the meaning assigned thereto in “Background” paragraph A.

“Leases” has the meaning given to it in SECTION 3.2(c).

“Licenses and Permits” has the meaning assigned thereto in SECTION 2.1(b)() (iii).

“Liquor Licenses” has the meaning given to it in SECTION 14.23.

“Losses” has the meaning assigned thereto in SECTION 11.1.

“Management Agreement” means that certain management agreement entered into by Manager and OpCo.

“Manager” means McNeill Hotel Company, LLC, a Tennessee limited liability Company.

“Material Casualty” has the meaning assigned thereto in SECTION 9.2(b).

“Material Condemnation” has the meaning assigned thereto in SECTION 9.2(b).

“New Franchise Agreement” has the meaning assigned thereto in SECTION 4.5(b).

“OpCo” means MHI – Norcross HI OpCo, LLC, a Georgia limited liability company which has leased the Hotel from Seller pursuant to the Hotel Lessee.

“Operating Agreements” means all maintenance, service and supply contracts, management agreements, credit card service agreements, booking and reservation agreements, and all other contracts and agreements which are held by Seller in connection with the operation of the Hotel, but excluding the Existing Franchise Agreement, the Management Agreement, the Asset Management Agreement, the Equipment Leases, the Leases, the Hotel Lease, the Licenses and Permits, and any Master and/or National Agreements (identified on Schedule 3.2(a) hereto).

“Permitted Exceptions” means (i) the matters set forth in the Title Commitment and on the Existing Survey and on the Survey, (ii) the Equipment Leases, the Leases, the Licenses and Permits and the Operating Agreements, (iii) liens for real estate taxes and assessments which are not yet due and payable or are being contested in good faith, (iv) standard exceptions and provisions contained in forms of title insurance policies, (v) discrepancies, conflicts in boundary lines, shortages in area, encroachments and any state of facts which a survey of the Land would disclose as of the date of the Title Commitment (without regard to any update of the Title Commitment after the date hereof) or which are shown on the public records as of the date of the Title Commitment (without regard to any update of the Title Commitment after the date hereof), (vi) subject to the adjustments provided for herein, any service, installation, connection or maintenance charge, and charges for sewer, water, electricity, telephone, cable television, or gas due after the Cut-Off Time, (vii) rights of vendors and holders of security interests on personal property installed on the Land by tenants under Leases and rights of tenants to remove fixtures at the expiration of the term of the Leases of such tenants, (viii) any title exception which is created in accordance with the provisions of this Agreement, (ix) rights of tenants, as tenants only, under the Leases and any new Lease entered into after the date hereof in accordance with the terms of this Agreement, (x) equipment liens and financing statements relating to an Operating Agreement, (xi) any exceptions caused by Buyer or its Affiliate or any of their agents, representatives or employees, (xii) such other exceptions as the Title Company shall commit to insure over without any additional cost or liability to Buyer, whether such insurance is made available in consideration of payment, bonding, indemnity of Seller or otherwise, or made pursuant to an endorsement to the title policy, (xiii) any title exception created pursuant to a Lease by a Tenant or pursuant to a Lease or otherwise that is to be discharged by a tenant or occupant of the Assets, including, without limitation, any construction or mechanics liens arising by or through the tenants under the Leases affecting any Assets, notices of commencement or similar filings filed in connection with tenant improvements, and (xiv) easements and laws, regulations, resolutions or ordinances, including, without limitation, building, zoning and environmental protection, as to the use, occupancy, subdivision, development, conversion or redevelopment of any Land currently or hereinafter imposed by any Governmental Authority.

“Person” means a natural person, partnership, limited partnership, limited liability companyLimited Liability Company, corporation, trust, estate, association, unincorporated association or other entity.

“Post Effective Date Monetary Encumbrance” has the meaning assigned thereto in SECTION 8.3(c).

“Post Effective Date Seller Encumbrance” has the meaning assigned thereto in SECTION 8.3(a).

“Property and Equipment” has the meaning assigned thereto in SECTION 2.1(b)() (ix).

“Purchase Price” has the meaning assigned thereto in SECTION 2.2(a).

“Property –Related Assets” has the meaning assigned thereto in SECTION 2.1(b).

“Reporting Person” has the meaning assigned thereto in SECTION 14.4(c).

“Retail Merchandise” has the meaning assigned thereto in SECTION 2.1(b)() (xi).

“Seller” has the meaning assigned thereto in the Preamble to this Agreement.

“Seller-Related Entities” has the meaning assigned thereto in SECTION 11.2.

“Seller Response” has the meaning assigned thereto in SECTION 8.2(b).

“Seller’s Knowledge” means the actual knowledge of Seller based upon the actual knowledge of Phillip H. McNeill, Jr. with respect to the Assets, without any duty on the part of such Person to conduct any independent investigation or make any inquiry of any Person. The named individual shall have no personal liability by virtue of his inclusion in this definition.

“Survey” has the meaning assigned thereto in SECTION 8.2(a).

“Title Company” shall mean Fidelity National Title Group (Chicago Title Insurance Company), 6060 Poplar Ave #LL37, Memphis, TN 38119, attn.: Staci Blackwell, Direct: 901-786-6006, E-mail staci.blackwell@fntg.com.

“Title Commitment” has the meaning assigned thereto in SECTION 8.2(a).

“Title Objections” has the meaning assigned thereto in SECTION 8.2(b).

“Title Policy” has the meaning assigned thereto in SECTION 8.2(a).

“Trade Payables” has the meaning assigned thereto in SECTION 10.1(k).

“Transferred Employee” has the meaning assigned thereto in SECTION 4.3(b).

“UCC” means the Uniform Commercial Code.

“Uniform System of Accounts” has the meaning assigned thereto in SECTION 2.1(b)() (ix).

“WARN Act” means the Worker’s Adjustment and Retraining Notification Act of 1988, 29 U.S.C. § 2101, et seq., and any similar state and local applicable law, as amended from time to time, and any regulations, rules and guidance issued pursuant thereto.

SALE, PURCHASE PRICE AND CLOSING
1. Sale of the Assets.
  1. On the Closing Date and pursuant to the terms and subject to the conditions set forth in this Agreement, Seller shall sell (or if applicable, cause OpCo to sell) to Buyer, and Buyer shall purchase from Seller (or OpCo, if applicable), Seller’s (or, if applicable, OpCo’s) right, title and interest in the Assets.
  2. The transfer of the Assets to Buyer shall include the transfer of all Property-Related Assets. For purposes of this Agreement, subject to SECTION 2.1(c) “Property-Related Assets” means all of Seller’s right, title and interest in and to the following:
    1. all easements, covenants and other rights appurtenant to the Land and all right, title and interest of Seller, if any, in and to any land lying in the bed of any street, road, avenue or alley, open or closed, in front of or adjoining the Land and to the center line thereof;
    2. all furniture, furnishings, fixtures, rugs, vehicles, mats, carpeting, appliances, devices, engines, telephone and other communications equipment, televisions and other video equipment, plumbing fixtures and other equipment, and all other equipment and other personal property which are now, or may hereafter prior to the Closing Date may be, placed in or attached to the Hotel and are used exclusively in connection with the operation of the Hotel (but not including items which are leased by Seller or OpCo or owned or leased by the Manager, Asset Manager, Franchisor, and any of their Affiliates or any other Excluded Assets) (the “FF&E”);
    3. to the extent they may be transferred under Applicable Law without consent, all licenses, permits and authorizations presently issued to and held by Seller in connection with the operation of all or any part of the Hotel as it is presently being operated (the “Licenses and Permits”);
    4. to the extent assignable without consent, all warranties, if any, issued to Seller by any manufacturer or contractor in connection with construction or installation of equipment or any component of the improvements included as part of the Hotel;
    5. all Operating Agreements (except for those Operating Agreements labeled on Schedule 3.2(a) hereto as Master and/or National Agreements that will not be assigned to Buyer at Closing); provided, however, if any such Operating Agreement requires consent of the vendor party or any other counterparty, Buyer shall use commercially reasonable good faith efforts to obtain such consent as of the Closing (in any event, Buyer shall assume all Operating Agreements even if such consent has not been obtained and provide replacement guarantees to the vendor party or other counterparty and Seller in the event Seller or any Affiliate thereof has theretofore executed a guarantee in connection therewith);
    6. all leases and purchase money security agreements for any equipment, machinery, vehicles, furniture or other personal property located at the Hotel and used exclusively in the operation of the Hotel which are held by or on behalf of Seller (the “Equipment Leases”), together with all deposits made thereunder; provided, however, if such Equipment Leases require consent of the vendor party or other counterparty, Buyer shall use commercially reasonable good faith efforts to obtain such consent as of Closing (in any event, Buyer shall assume all Equipment Leases even if such consent has not been obtained and provide replacement guarantees to the vendor party or other counterparty and Seller in the event Seller or any Affiliate thereof has theretofore executed a guarantee in connection therewith);
    7. all bookings and reservations for guest, conference, meeting and banquet rooms or other facilities at the Hotel for dates from and after the Closing Date (the “Bookings”), together with all deposits held by Seller with respect thereto;
    8. allAll Assigned Accounts Receivable;
    9. all items included within the definition of “Property and Equipment” under the Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, as published by the Hotel Association of Tennessee City, Inc. (the “Uniform System of Accounts”) and used exclusively in the operation of the Hotel (including, without limitation, linen, china, glassware, tableware, uniforms and similar items, subject to such depletion prior to the Closing Date as shall occur in the ordinary course of business) (the “Property and Equipment”);
    10. all “Inventories” as defined in the Uniform System of Accounts and used exclusively in the operation of the Hotel, such as provisions in storerooms, refrigerators, pantries, and kitchens, beverages in wine cellars and bars, other merchandise intended for sale or resale, fuel, mechanical supplies, stationery, guest supplies, maintenance and housekeeping supplies and other expensed supplies and similar items and including all food and beverages which are located at the Hotel, or ordered for future use at the Hotel as of the Closing, but expressly excluding any alcoholic beverages to the extent the sale or transfer of the same is not permitted under Applicable Law (the “Inventories”);
    11. all merchandise located at the Hotel and held for sale to guests and customers of the Hotel, or ordered for future sale at the Hotel as of the Cut-Off Time, but not including any such merchandise owned by any tenant at (or other licensee or occupant of) the Hotel or by the Manager or Asset Manager (“Retail Merchandise”);
    12. to the extent Seller’s rights and interests therein are assignable and subject to any consents required thereunder, all names, tradenames, trademarks, service marks, logos, telephone and fax numbers, domain names, website names, and other similar proprietary rights and all registrations or applications for registration of such rights used by Seller exclusively in the operation of the Hotel (the “Intangible Property”); provided, however, Seller makes no representations or warranties with respect to its rights or interests in such Intangible Property; and
    13. to the extent in Seller’s possession or control, all surveys, architectural, engineering blueprints, and plans and specifications, if any, related exclusively to the Hotel, all current books and records, if any, related to the Hotel, and any goodwill of Seller related to the Hotel; provided, however, that Seller may retain a copy of all books and records.
  3. Excluded Assets. Notwithstanding anything to the contrary in this Agreement, including but not limited to in SECTION 2.1(a) and SECTION 2.1(b), all assets, property, rights, interests, and other items set forth in this SECTION 2.1(c) are expressly excluded from the Assets (collectively the “Excluded Assets”):
    1. Cash. All cash on hand or on deposit in any house bank, operating account or other account maintained in connection with the ownership of the Hotel (including, without limitation, any capital, FF&E or other reserves maintained by Seller, or Asset Manager pursuant to the Asset Management Agreement, OpCo, or Manager pursuant to the Management Agreement, or any person pursuant to the Existing Franchise Agreement or otherwise (subject to SECTION 10.1(l)));
    2. Third Party Property. Any fixtures, personal property or equipment owned by (A) the lessor under any Equipment Leases, or any Leases, (B) the supplier, vendor, licensor or other party under any other Operating Agreements, Licenses and Permits, (C) any Employees, (D) Manager, (E) Asset Manager, (F) Franchisor, (G) (excepting OpCo) the tenant under any Lease or similar agreement, or (H) any guests or customers of the Hotel, and (I) including, without limitation, those items set forth on Schedule 2.1(c) attached hereto;
    3. Brand Name or Logo. Any FF&E, Assets, Equipment, Inventories, Retail Merchandise, or Intangible Property bearing the brand names or logos of any Seller-Related Entities or Franchisor;
    4. Insurance Claims. Any insurance claims or proceeds arising out of or relating to events that occur prior to the Closing Date (subject to the terms of SECTION 9.2(a));
    5. Additional Reserved Seller Assets. Any proprietary or confidential materials (including, without limitation, any materials relating to the background or financial condition of any Seller-Related Entities), the internal books and records of Seller relating, for example, to contributions and distributions prior to the Closing, any software not used exclusively in the day-to-day operation of the Hotel, the names “McNeill”, “McNeill Hotel Investors”, “MHI”, “McNeill Hotel Company”, “MHC”, and any derivations thereof, and any trademarks, service marks, trade names, brand marks, brand names, domain names, social media sites (such as Facebook, Instagram, Snapchat or Twitter), trade dress or logos relating thereto, any development bonds, letters of credit or other collateral held by or posted with any Governmental Authority or other third party with respect to any improvement, subdivision or development obligations concerning the Hotel or any other real property, insurance policies (subject to SECTION 9.2), claims or other rights against any present or prior partner, member, employee, agent, manager, officer or director of Seller or its direct or indirect partners, members, shareholders or affiliates, all contracts between Seller and any law firm, accounting firm, Manager, Asset Manager, OpCo, Franchisor, any Affiliate, lenders, leasing agent, brokers, engineers, surveyors, environmental consultants and other consultants or appraisers entered into prior to the Closing, organizational documents of any Seller-Related Entities, contracts for construction that is not ongoing as of the Effective Date or the Closing Date, and any intangible property that is not used exclusively in connection with the Assets.
2. Purchase Price.
  1. The consideration for the purchase of the Assets shall be [ElevanEleven Million Nine Hundred Thousand and No/100 ($11,900,00.00, 900, 000.00)] (the “Purchase Price”). No later than 12:00 PM (Eastern Time) one (1) Business Day prior to the Closing Date, Buyer shall deposit with Escrow Agent, by wire transfer of immediately available funds to such account or accounts that Seller shall designate to Buyer, an amount equal to (A) the Purchase Price (subject to adjustments and credits as described in Article X below), minus (B) the Deposit.
  2. No adjustment shall be made to the Purchase Price except as explicitly set forth in this Agreement.
  3. Seller and Buyer agree that the Purchase Price shall be allocated among the real property and other tangible and intangible property comprising the Assets as set forth on Schedule 2.2(c) attached hereto for federal, state and local tax purposes in accordance with Section 1060 of the Code. Buyer and Seller shall file all federal, state and local tax returns and related tax documents consistent with such allocation, as the same may be adjusted pursuant to SECTION 10.1 or any other provisions of this Agreement. This SECTION 2.2(c) shall survive the Closing without limitation.
3. Deposit. Not later than one (1) Business day following the Effective Date, Buyer shall deposit with Escrow Agent as described in SECTION 14.9(c) (“Escrow Agent”), One Hundred Fifty Thousand and No/100 Dollars ($150,000) (such cash deposit, together with all accrued interest thereon, if any, shall be referred to as the “Initial Deposit”) in immediately available funds by wire to such account as Escrow Agent shall designate to Buyer. The Seller and Buyer agree to execute Escrow Agent’s standard escrow agreement in connection with the Deposit. Buyer shall deposit with Escrow Agent no later than one (1) Business day following the Additional Deposit Date an additional One Hundred Fifty Thousand and No/100 Dollars ($150,000) in immediately available funds by wire to such account as Escrow Agent shall designate to Buyer (such cash deposit, together with all accrued interest thereon, shall be referred to as the “Additional Deposit”). If such Additional Deposit is not timely deposited, the same shall constitute a material default hereunder and Seller may terminate this Agreement, in which event the Initial Deposit, shall be immediately delivered to Seller as liquidated damages in accordance with SECTION 12.1. The Initial Deposit and, if delivered, the Additional Deposit, together with all accrued interest thereon, shall be referred to collectively herein as the “Deposit”. Upon delivery by Buyer to Escrow Agent, the Deposit will be deposited by Escrow Agent in an interest-bearing account and shall be held in escrow in accordance with the provisions of SECTION 14.5. All interest earned on the Deposit while held by Escrow Agent shall be paid to the party to whom the Deposit is paid, except that if the Closing occurs, Buyer shall receive a credit for such interest in accordance with sub-SECTION 2.2(a). On the Additional Deposit Date, the Deposit shall become non-refundable to Buyer (but applicable to the Purchase Price if Closingclosing occurs), except as expressly set forth in SECTION 12.2.
4. The Closing.
  1. The closing of the sale and purchase of the Assets (the “Closing”) shall take place on a mutually acceptable date not later than thirty (30) days after the Additional Deposit Date, and in no event later than [__________, 2022] (such date, the “Closing Date”), time being of the essence with respect to Buyer’s and Seller’s obligations hereunder on the Closing Date, subject only to the right of Seller to extend the Closing Date expressly provided in this Agreement.
  2. The Closing shall be held on the Closing Date at 10:00 a.m. (Central Time) by “New York Style Closing” through Escrow Agent.
  3. Notwithstanding any other provision herein to the contrary, there shall be no requirement that Seller or Buyer physically attend the Closing. Buyer and Seller hereby authorize their respective attorneys to execute and deliver to Escrow Agent any additional or supplementary instructions as may be necessary or convenient to implement the terms of this Agreement and facilitate the closing of the transactions contemplated hereby, provided that such instructions are consistent with and merely supplement this Agreement and shall not in any way modify, amend or supersede this Agreement. Formal tender of an executed deed or the Purchase Price is hereby waived.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER
1. General Seller Representations and Warranties. Subject to the information disclosed in the Asset File, Seller represents and warrants to Buyer as to itself as follows:
  1. Formation; Existence. It is a limited liability company, duly formed, validly existing and in good standing under the laws of the State of its organization.
  2. Power and Authority. It has all requisite power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation of the transactions provided for in this Agreement have been duly authorized by all necessary action on the part of Seller. This Agreement has been duly executed and delivered by Seller and constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights and by general principles of equity (whether applied in a proceeding at law or in equity).
  3. No Consents. No consent, license, approval, order, permit or authorization of, or registration, filing or declaration with, any court, administrative agency or commission or other Governmental Authority is required to be obtained or made by Seller in connection with the execution, delivery and performance of this Agreement or any of the transactions required or contemplated hereby, except for the items contemplated in SECTION 6.2 and any consent or approval required in connection with the transfer or issuance of Licenses and Permits, the liquor licenses or permits, the Operating Agreements, or the Equipment Leases.
  4. No Conflicts. The execution, delivery and compliance with, and performance of the terms and provisions of, this Agreement, and the sale of the Assets, will not (i) conflict with or result in any violation of its organizational documents, (ii) conflict with or result in any violation of any provision of any bond, note or other instrument of indebtedness, contract, indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party in its individual capacity, or (iii) violate any existing term or provision of any order, writ, judgment, injunction, decree, statute, law, rule or regulation applicable to it or its assets or properties, except, in each case, for any conflict or violation which will not materially adversely affect (A) Seller’s ability to consummate the transactions contemplated by this Agreement, (B) Seller’s interest in the Assets or (C) the operation of the Hotel.
  5. Foreign Person. It is not a “foreign person” as defined in Section 1445 of the Code and the regulations issued thereunder.
  6. Anti-Money Laundering and Anti-Terrorism Laws. None of Seller or, to Seller’s Knowledge, any of its subsidiaries, officers, directors or employees, is in violation of any laws relating to terrorism, money laundering or the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Action of 2001, Public Law 107-56 and Executive Order No. 13224 (Blocking Assets and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism) (the “Executive Order”) (collectively, the “Anti-Money Laundering and Anti-Terrorism Laws”). None of Seller or, to Seller’s Knowledge, any of its subsidiaries, officers, directors or employees, is acting, directly or indirectly, on behalf of terrorists, terrorist organizations or narcotics traffickers, including those persons or entities that appear on the Annex to the Executive Order, or are included on any relevant lists maintained by the Office of Foreign Assets Control of U.S. Department of Treasury, U.S. Department of State, or other U.S. government agencies, all as may be amended from time to time. Neither Seller, nor, to Seller’s Knowledge, any person controlling or controlled by Seller, is a country, territory, individual or entity named on a Government List, and the monies used in connection with this Agreement and amounts committed with respect thereto, were not and are not derived from any activities that contravene any of the Anti-Money Laundering and Anti-Terrorism Laws (including funds being derived from any person, entity, country or territory on a Government List or engaged in any unlawful activity defined under Title 18 of the United States Code, Section 1956(c)(7)).
2. Representations and Warranties of Seller as to the Assets. Subject to the information disclosed in the Asset File, Seller hereby represents and warrants to Buyer as follows with respect to the Assets:
  1. Operating Agreements. To Seller’s Knowledge as of the date hereof, all material Operating Agreements affecting the Hotel are set forth on Schedule 3.2(a) attached hereto. To Seller’s Knowledge, Seller has delivered or made available, or promptly following the date hereof shall deliver or make available, to Buyer true and complete copies of all such written Operating Agreements and Equipment Leases in its possession.
  2. Employees. All Employees of the Hotel are employees of Manager, and none of Seller or OpCo has any employees. Neither Seller, OpCo nor Manager are parties to any collective bargaining agreement or other contract or agreement with any labor organization with respect to Employees.
  3. Leases. To Seller’s Knowledge as of the date hereof: Excepting the Hotel Lease, Schedule 3.2(c) sets forth a correct and complete list of the material leases for the Hotel as of the date hereof (excepting the Hotel Lease, the “Leases”). Except as set forth in Schedule 3.2(c), as of the date hereof, to Seller’s Knowledge (i) all such Leases are in full force and effect, and (ii) Seller has not given or received any written notice of any material breach or default under any of the Leases that has not been cured.
  4. Condemnation. As of the date hereof, Seller has not received written notice of any condemnation or similar proceedings affecting the Assets, which has not been resolved, and to Seller’s Knowledge, no such action is threatened in writing.
  5. Litigation. To Seller’s Knowledge and except as disclosed in Schedule 3.2(e) attached hereto, as of the date hereof, there are no actions, suits or proceedings filed and pending against or affecting the Assets in any court or before or by an arbitration tribunal or regulatory commission, department or agency which are not covered by insurance and which would materially and adversely affect the ability of Seller to perform its obligations hereunder, and to Seller’s Knowledge, no such actions, suits or proceedings have been threatened in writing.
  6. Environmental Matters. To Seller’s Knowledge as of the date hereof, Seller has not received any written notice from any governmental or regulatory authority of any violation of applicable Environmental Laws, which has not been corrected. For the purposes of this Section, “Environmental Laws” means any and all federal or state laws in effect on the date of this Agreement relating to the protection of the environment or to the use, transportation and disposal of Hazardous Materials.
3. Amendments to Schedules and Limitations on Representations and Warranties of Seller.
  1. The representations and warranties of Seller herein shall be deemed modified to reflect any facts disclosed to or otherwise known prior to Closing by Buyer, Buyer-Related Entities, as hereinafter defined, or their counsel involved in conducting due diligence, including, but not limited to, any information contained in the Asset File and any third party inspection reports obtained by Buyer at any time. In addition, if Buyer has Buyer’s Knowledge (or is deemed to have Buyer’s Knowledge) prior to the Closing of a breach of any representation or warranty made by Sellers in this Agreement and Buyer nevertheless elects to proceed to Closing, such representation or warranty by Sellers shall be deemed to be qualified or modified to reflect Buyer’s Knowledge of such breach.
  2. Seller shall have the right to amend and supplement the schedules to this Agreement from time to time prior to the Closing by providing a written copy of such amendment or supplement to Buyer; provided, however, to the extent that any amendment or supplement to the schedules to this Agreement provided to Buyer discloses any fact that would adversely impact the ownership or value of the Assets, Seller shall have no liability, and Buyer shall make no claim against Seller, for (and, except as provided in the parenthetical set forth in clause (ii) below, Buyer shall be deemed to have waived any failure of a condition hereunder by reason of) a failure of any condition or a breach of any representation or warranty, covenant or other obligation of Seller under this Agreement or any amendment or supplement described in this SECTION 3.3(a) or any document executed by Seller in connection with this Agreement (including for this purpose any matter that would have constituted a breach of Seller’s representations and warranties had they been made on the Closing Date) if the failure or breach in question constitutes or results from a condition, facts or other matter that (i) was within Buyer’s Knowledge prior to the Closing and Buyer elects to proceed with the Closing or (ii) was not within Seller’s Knowledge as of the Effective Date (provided that, nothing referenced in this SECTION 3.3(a)(ii) shall prevent any Seller amendment or supplement that would materially adversely impact the ownership or value of the Assets as aforesaid from constituting a failure of a condition to Closing pursuant to the terms and conditions of SECTION 5.2).
  3. Notwithstanding anything in this Agreement to the contrary, if the representations and warranties relating to the Leases, the Equipment Leases and the Operating Agreements set forth in SECTION 3.2(a) and the status of the contract parties thereunder contained herein were true and correct in all material respects as of the date of this Agreement, no change in circumstances or status of the contract parties (e.g., defaults, bankruptcies or other adverse matters relating to such contract party) occurring after the date hereof shall permit Buyer to terminate this Agreement or constitute grounds for Buyer’s failure to close or otherwise constitute a breach of any representation or warranty by Seller.
4. Covenants of Seller Prior to Closing. From the date hereof until the Closing or earlier termination of this Agreement, Seller or Seller’s agents shall:
  1. Insurance. Keep the Hotel insured against fire and other hazards in such amounts and under such terms as Seller deems advisable consistent with past practices.
  2. Conduct of Business, Maintenance and Operation of Hotel. Continue to use commercially reasonable efforts to cause OpCo to continue to carry on the business and maintain the Hotel substantially in the same manner as currently conducted and maintained (or if not within OpCo’s control under the Management Agreement, use commercially reasonable efforts to cause OpCo to cause Manager to do so) including, but not limited to, payment of all occupancy taxes (and other hotel/motel taxes and fees).
  3. New Operating Agreements. Without the prior written consent of Buyer, which consent shall not be unreasonably withheld, conditioned, or delayed, not enter into any third party contracts, or renew, amend or supplement any third party contracts; provided that Seller may enter into or renew third party contracts, or amend or supplement such third party contracts, without Buyer’s consent if (i) such contract is entered into (or renewed, amended, or supplemented, as the case may be) in the course of customary operation of the Hotel, or does not require OpCo’s approval under the Management Agreement, or is necessary as a result of an emergency at the Hotel, (ii) is terminable on 30 days or less notice, without penalty of more than $50,000, or (iii) requires the payment of no more than $50,000 in any calendar year. If Seller enters into or renews any third party contracts, or amends or supplements any third party contracts after the date of this Agreement, then Seller shall promptly provide written notice and a copy thereof to Buyer and unless the same required Buyer’s approval pursuant to this paragraph and such approval was not obtained, Buyer shall assume such contract at the Closing and the schedule of contracts attached to the Assignment of Contracts and Leases shall be so modified, and such contract shall be deemed added to Schedule 3.2(a) attached hereto and Schedule 3.2(a) shall be deemed amended at the Closing to include such contracts. If a new contract, or a renewal, amendment or supplement to an existing contract, requires Buyer’s approval or Seller otherwise requests Buyer’s approval and Buyer does not object within two days after receipt of a copy of such contract, then Buyer shall be deemed to have approved such contract, renewal, amendment or supplement.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER
1. Representations and Warranties of Buyer. Buyer hereby represents and warrants to Seller as follows:
  1. Formation and Existence. It is a [_______________________________] organized, validly existing and in good standing under the laws of the State of [______________________________________].
  2. Power and Authority. It has all requisite power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement, the purchase of the Assets and the consummation of the transactions provided for in this Agreement have been duly authorized by all necessary action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer and constitutes the legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights and by general principles of equity (whether applied in a proceeding at law or in equity).
  3. No Consents. No consent, license, approval, order, permit or authorization of, or registration, filing or declaration with, any court, administrative agency or commission or other Governmental Authority, is required to be obtained or made in connection with the execution, delivery and performance of this Agreement by Buyer or any of Buyer’s obligations in connection with the transactions required or contemplated hereby.
  4. No Conflicts. The execution, delivery and compliance with, and performance of the terms and provisions of, this Agreement, and the purchase of the Assets, will not (i) conflict with or result in any violation of its organizational documents, (ii) conflict with or result in any violation of any provision of any bond, note or other instrument of indebtedness, contract, indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party in its individual capacity, or (iii) violate any existing term or provision of any order, writ, judgment, injunction, decree, statute, law, rule or regulation applicable to it or its assets or properties.
  5. Anti-Money Laundering and Anti-Terrorism Laws. Neither Buyer nor, to Buyer’s Knowledge, its direct or indirect owners, principals, employees or affiliates, is in violation of, has been charged with or is under indictment for the violation of, or has pled guilty to or been found guilty of the violation of, any Anti-Money Laundering and Anti-Terrorism Laws. None of Buyer or, to Buyer’s Knowledge, its direct or indirect owners, principals, employees or affiliates, is acting, directly or indirectly, on behalf of terrorists, terrorist organizations or narcotics traffickers, including those persons or entities that appear on the Annex to the Executive Order, or are included on any relevant lists maintained by the Office of Foreign Assets Control of U.S. Department of Treasury, U.S. Department of State, or other U.S. government agencies, all as may be amended from time to time. None of Buyer or, to Buyer’s Knowledge, any of its subsidiaries, officers, directors or employees or, without inquiry, any of its brokers or other agents, in any capacity (A) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any person included in any Government List; (B) deals in, or otherwise engages in any transaction blocked pursuant to the Executive Order; or (C) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Money Laundering and Anti-Terrorism Laws. Buyer understands and acknowledges that Seller may become subject to further anti-money laundering regulations, and agrees to execute instruments, provide information, or perform any other acts as may reasonably be requested by Seller, for the purpose of: (i) carrying out due diligence as may be required by Applicable Law to establish Buyer’s identity and source of funds; (ii) maintaining records of such identities and sources of funds, or verifications or certifications as to the same; and (iii) taking any other actions as may be required to comply with and remain in compliance with anti-money laundering regulations applicable to Seller. Neither Buyer, nor any person controlling or controlled by Buyer, is a country, territory, individual or entity named on a Government List, and the monies used in connection with this Agreement and amounts committed with respect thereto, were not and are not derived from any activities that contravene any of the Anti-Money Laundering and Anti-Terrorism Laws or any other applicable anti-money laundering or anti-bribery Applicable Laws and regulations (including funds being derived from any person, entity, country or territory on a Government List or engaged in any unlawful activity defined under Title 18 of the United States Code, Section 1956(c)(7)). Buyer is not engaging in the transactions contemplated hereunder, directly or indirectly, in violation of any Applicable Laws relating to drug trafficking, money laundering or predicate crimes to money laundering or drug trafficking. None of the funds of Buyer have been or will be derived from any unlawful activity with the result that the investment of direct or indirect equity owners in Buyer is prohibited by Applicable Laws or that the transactions contemplated hereunder or this Agreement is or will be in violation of Applicable Laws. Buyer has implemented and will continue to implement procedures, and has consistently and will continue to consistently apply those procedures, to ensure the foregoing representations and warranties remain true and correct at all times prior to and at the Closing.
  6. Franchise Agreement Representations. Buyer hereby represents and warrants to Seller that Buyer (i) has received and reviewed a copy of Franchisor’s then-current franchise disclosure document as of the Effective Date, (ii) is not a “Sanctioned Person” or a “Competitor” (as defined by the Franchisor), (iii) is capable of operating the Hotel pursuant to the “Standards” (as defined by the Franchisor), and (iv) knows no reason why it would not be approved by Franchisor or as a franchisee of the Hotel pursuant to the current requirements of Franchisor.
2. Covenants of Buyer Prior to Closing.
  1. Licenses and Permits. Buyer shall use all commercially reasonable and good faith efforts to obtain the transfer of all Licenses and Permits (to the extent transferable) or the issuance of new licenses and permits. Buyer, at its cost and expense, shall submit all necessary applications and other materials to the appropriate Governmental Authority and take such other actions to effect the transfer of the Licenses and Permits or issuance of new licenses and permits, as of the Closing, and Seller shall use commercially reasonable efforts (at no cost or expense to Seller) to cooperate with Buyer to cause the Licenses and Permits to be transferred or new licenses and permits to be issued to Buyer. Notwithstanding anything to the contrary in this SECTION 4.2(a), Buyer shall not post any notices at the Hotel or publish any notices required for the transfer of the Licenses or Permits or issuance of new licenses and permits without the prior written consent of Seller, which consent may not be unreasonably withheld. It shall not be a condition to the Closing hereunder that Buyer has obtained any transfer of Licenses or Permits or issuance of any new licenses or permits.
  2. Data Privacy. To the extent Buyer reviews, is given access to, or otherwise obtains any Hotel guest data and information, Buyer shall at all times comply with all Applicable Laws and contracts, including but not limited to (i) Laws concerning the privacy and use of such data and information, and the sharing of any of same with third parties (including without limitation, any restrictions with respect to Seller’s or Buyer’s or any third party’s ability to use, transfer, store, sell or share such data and information) and (ii) the establishment of adequate security measures to protect such data and information. In addition, Buyer shall provide a full defense to, and indemnify Seller for any Losses which Seller may incur related to any violation by Buyer hereof. This Section shall survive the Closing and any termination of this Agreement.
3. Employee Matters.
  1. Employees. Buyer acknowledges that the Employees are currently employed by Manager or its Affiliates.
  2. Continuity of Employees. The parties intend that there will be continuity of employment with respect to all of the Employees. It is agreed that prior to, or in connection with, the Closing, Buyer shall take no action to cause Seller, OpCo, Manager, or any of their respective Affiliates to terminate the employment of any Employee, and none of Seller, OpCo, Manager, or any of their respective Affiliates shall be under any obligation to terminate any Employee prior to or on the Closing Date. It is further agreed that on or prior to the Closing Date, Buyer shall offer employment at the Hotel (or cause its manager to employ) commencing on the Closing Date to all Employees, including those on vacation, leave of absence, disability or layoff, who were employed at the Hotel on the day immediately preceding the Closing Date, on the same terms and conditions (including, without limitation, compensation, salary, employee benefits, job responsibility and descriptions, location, seniority and deemed length of service) as those provided to such Employees by Manager on the day immediately preceding the Closing Date. Those Employees who accept Buyer’s (or its manager’s) offer of employment and commence (or continue) employment with Buyer (or its manager) on the Closing Date shall hereafter be referred to as “Transferred Employees”. Seller or OpCo shall cause Manager to terminate (or arrange for the termination) all Transferred Employees. Buyer shall be liable for any amounts for which any Employee with respect to which Buyer is obligated to make an offer of employment hereunder becomes entitled under any severance policy, plan, agreement, arrangement or program which exists or arises, or may be deemed to exist or arise, as a result of or in connection with the transactions contemplated by this Agreement, whether under Applicable Law or otherwise.
  3. Indemnity. Buyer shall indemnify, defend and hold the Seller-Related Entities and Manager harmless from and against any and all claims, actions, suits, demands, proceedings, losses, expenses, damages, obligations and liabilities (including costs of collection, attorney’s fees and other costs of defense) arising out of or otherwise in respect of (i) the termination of any Employees in violation of this Agreement; (ii) failure of Buyer (or its manager) to continue the employment of any Transferred Employee on the same terms and conditions as said Employee enjoys on the day immediately preceding the Closing Date; (iii) a breach by Buyer of the covenants set forth in SECTION 4.3(b); (iv) the failure of Buyer to comply with its obligations (including, but not limited to, any statutory obligations) with respect to the Transferred Employees or obligations under SECTION 4.3(d); (v) any claim made by any Transferred Employee for severance pay; (vi) any claim made by any Employee in relation to any alleged discriminatory hiring or firing practices of Buyer; and (vii) any claim made by any Transferred Employee arising on or after the Closing Date.
  4. WARN Act. Buyer (or its manager) shall not, at any time prior to 90 days after the Closing Date, effectuate a “plant closing” or “mass layoff,” as those terms are defined in the WARN Act, or take any action that would trigger the requirements under the WARN Act, affecting in whole or in part any site of employment, facility, operating unit or Employee, without notifying Seller in advance and without complying with the notice requirements and other provisions of the WARN Act. In addition, Buyer shall provide a full defense to, and indemnify Seller for any Losses which Seller may incur in connection with any suit or claim of violation brought against or affecting Seller under the WARN Act or any similar state law for any actions taken by Buyer (or its manager or any of its and its manager’s Affiliates) with regard to any site of employment, facility, operating unit or employee affected by this Agreement, including but not limited to liability under the WARN Act that arises in whole or in part as a result of any “employment loss”, as that term is defined in the WARN Act, which was caused or directed by Buyer or its manager or their Affiliates subsequent to the Closing Date.
  5. No Third Party Beneficiaries. Nothing in this SECTION 4.3 shall create any third-party beneficiary rights for the benefit of any employees of the Hotel or their affiliates. Buyer and Seller acknowledge that all provisions contained in this SECTION 4.3 with respect to employees are included for the sole benefit of Buyer (and Buyer’s Affiliates, as applicable) and Seller, OpCo, Manager, or any of their respective Affiliates and shall not be deemed to constitute an amendment to any employee benefit plan or create any right (i) in any other person, including any employees, former employees, or any beneficiary thereof or (ii) to employment or continued employment with Buyer or any of its Affiliates, managers or contractors following the Closing Date.
  6. Survival. The provisions of this SECTION 4.3 shall survive the Closing without limitation.
4. Bookings. Buyer shall honor all existing Bookings and all other Bookings made in accordance with this Agreement for any period on or after the Closing Date. The provisions of this SECTION 4.4 shall survive the Closing without limitation.
5. Franchise Agreement.
  1. The parties acknowledge and agree that the purchase and sale contemplated by this Agreement will constitute a “Transfer” as defined in the Existing Franchise Agreement.
  2. No later than one (1) Business Day after the Effective Date, Buyer shall notify Franchisor of the transactions contemplated hereby, request all documents necessary for Buyer’s prompt compliance with the provisions of this Section, and as soon as acceptable by Franchisor, but in no event later than the earlier of five (5) days after the Franchisor disclosure document “dark” period or ten (10) days after the Effective Date, Buyer shall (i) complete and submit to Franchisor its then-current form of application for a new franchise agreement (for a term to be determined by Franchisor and Buyer, provided that Buyer shall accept a term of at least the remainder of the Term (as defined in the Existing Franchise Agreement)) and Franchisor’s then-current questionnaire as contemplated by its then-current franchise disclosure document, and (ii) pay all applicable franchise application fees to Franchisor required by Franchisor for approval of Buyer as a new franchisee under the “Hilton” brand (the “Franchise Approval”), and for a new franchise agreement (together with such other agreements required by Franchisor, the “New Franchise Agreement”), on the terms and conditions required by Franchisor as a condition to the Franchise Approval including, but not limited to, (A) providing to Franchisor in a timely fashion all documents, information and representations and warranties required by Franchisor (including, without limitation, any information relating to Buyer, its ownership, hotel management company and personnel, or any guarantor of Buyer’s obligations under the New Franchise Agreement, if any), (B) the agreement of Buyer to pay Franchisor’s then-current franchise application fee and any and all costs associated with any Assets improvement plan required by Franchisor to be carried as a condition to issuing the New Franchise Agreement to Buyer, (C) seeking Franchisor’s approval of Buyer or any third-party manager designated by Buyer as the manager of the Hotel from and after the Closing, and (D) the delivery of an executed guaranty by a guarantor approved by Franchisor of all of Buyer’s obligations under the New Franchise Agreement for the benefit of Franchisor, if required. Seller may terminate this Agreement if Buyer does not deliver to Seller evidence of its timely compliance with this SECTION 4.5(b), in which event the Initial Deposit, shall be immediately delivered to Seller as liquidated damages in accordance with SECTION 12.1.
  3. Seller shall reasonably cooperate with Buyer’s efforts to obtain the Franchise Approval, provided that Seller shall not be required to incur any out-of-pocket costs (other than Seller’s own attorneys’ fees), liabilities or obligations in connection therewith; provided, however, Buyer shall not be responsible for Seller’s performance or compliance prior to the Closing with Seller’s pre-Closing obligations under the Existing Franchise Agreement and Seller shall not be responsible for Buyer’s performance or compliance prior to or after the Closing with respect to Seller’s pre-or post-Closing obligations under the New Franchise Agreement.
  4. Buyer shall use commercially reasonable efforts to diligently pursue and negotiate in good faith the New Franchise Agreement and Buyer shall diligently undertake all such acts as may be reasonably necessary to (i) obtain the Franchise Approval prior to the Additional Deposit Date, and (ii) satisfy the closing condition set forth in SECTION 5.1(f) on or prior to the Closing Date.
  5. At the request of Seller (which request may be given at any time before delivery of evidence of the Franchise Approval to Seller), Buyer shall promptly confirm to Seller in writing that Buyer has complied with the requirements of SECTION 4.5 (and, if not, in what respect it has not and the expected time frame for doing so).
  6. Buyer shall defend, indemnify, and hold Seller and Seller-Related Entities harmless from and against any and all claims, costs, penalties, damages, losses, liabilities and expenses (including court costs and attorneys’ fees) that may at any time be incurred by Seller or any Seller-Related Entities arising out of, by reason of, or in connection with any obligation of, or breach or default by, Buyer under the New Franchise Agreement.
  7. The obligations of Buyer contained in this SECTION 4.5 shall survive the Closing or any termination of this Agreement without limitation.
6. Management Agreements. Buyer agrees that the Management Agreement and the Asset Management Agreement shall be terminated as of the Closing Date at the expense of Seller. Buyer’s obtaining a new management agreement (and/or an asset management agreement) for the Hotel shall not be a condition to Closing for Buyer. For the avoidance of doubt, nothing stated in this SECTION 4.6 shall limit in any respect the obligations of Buyer set forth in SECTION 4.5(b)) (ii)() (C).
CONDITIONS PRECEDENT TO CLOSING
1. Conditions Precedent to Seller’s Obligations. The obligation of Seller to consummate the transfer of the Assets to Buyer on the Closing Date is subject to the satisfaction (or waiver by Seller) as of the Closing of the following conditions:
  1. Each of the representations and warranties made by Buyer in this Agreement shall be true and correct in all material respects when made and on and as of the Closing Date as though such representations and warranties were made on and as of the Closing Date (unless such representation or warranty is made on and as of a specific date, in which case it shall be true and correct in all material respects as of such date).
  2. Buyer shall have performed or complied in all material respects with each obligation and covenant required by this Agreement to be performed or complied with by Buyer on or before the Closing.
  3. No order or injunction of any court or administrative agency of competent jurisdiction nor any statute, rule, regulation or executive order promulgated by any Governmental Authority of competent jurisdiction shall be in effect as of the Closing which restrains or prohibits the transfer of the Assets or the consummation of any other transaction contemplated hereby.
  4. Seller shall have received all of the documents required to be delivered by Buyer under SECTION 6.1.
  5. Seller shall have received the Purchase Price in accordance with SECTIONS 2.2(a) and 2.2(b) and all other amounts due to Seller from Buyer hereunder.
  6. Franchisor shall have committed, in a writing acceptable to Seller in its sole and absolute discretion, subject to the consummation of the Closing, to terminate all obligations and liabilities of Seller and all and Seller-Related Entities under the Existing Franchise Agreement or any guaranties or agreements related thereto, other than those obligations and liabilities which would survive the natural expiration thereof (e.g., all franchise fees and other amounts which have accrued under the Existing Franchise Agreement in the Ordinary Course of Business as of the Closing, all indemnity and related obligations and liabilities for events occurring prior to the Closing, etc.), without any requirement to pay any termination fee or liquidated damages as a result of such termination.
2. Conditions to Buyer’s Obligations. The obligation of Buyer to purchase and pay for the Assets is subject to the satisfaction (or waiver by Buyer) as of the Closing of the following conditions:
  1. Each of the representations and warranties made by Seller in this Agreement shall be true and correct in all material respects when made and on and as of the Closing Date as though such representations and warranties were made on and as of Closing Date (unless such representation or warranty is made on and as of a specific date, in which case it shall be true and correct in all material respects as of such date), excluding, however, any inaccuracies or changes in the representations and warranties made by Seller resulting from any action, condition or matter that is (i) expressly permitted or contemplated by the terms of this Agreement, (ii) subject to SECTION 3.4, within Buyer’s Knowledge prior to the Closing, (iii) a result of events or occurrences outside of the reasonable control of Seller after the mutual execution of this Agreement, or (iv) permitted under SECTION 3.3.
  2. Seller shall have performed or complied in all material respects with each obligation and covenant required by this Agreement to be performed or complied with by Seller on or before the Closing.
  3. No order or injunction of any court or administrative agency of competent jurisdiction nor any statute, rule, regulation or executive order promulgated by any Governmental Authority of competent jurisdiction shall be in effect as of the Closing which restrains or prohibits the transfer of the Assets or the consummation of any other transaction contemplated hereby.
3. Waiver of Conditions Precedent. The Closing shall constitute conclusive evidence that Seller and Buyer have respectively waived any conditions which are not satisfied as of the Closing.
4. Frustration of Closing Conditions. Neither Seller nor Buyer may rely on the failure of a closing condition set forth in SECTION 5.1 or SECTION 5.2 if such failure was caused by such Party’s failure to act in good faith or to use its commercially reasonable efforts to cause the Closing to occur.
CLOSING DELIVERIES
1. Buyer Closing Deliveries. Buyer shall deliver the following documents to the Escrow Agent at or before the Closing Date:
  1. anAn assignment and assumption of the Operating Agreements, the Equipment Leases, Bookings, and Leases (an “Assignment of Contracts and Leases”) duly executed by Buyer in substantially the form of Exhibit A attached hereto;
  2. aA general assignment and assumption of the Licenses and Permits and Intangible Property in the form of Exhibit D attached hereto (the “Assignment of Intangibles”), duly executed by Buyer;
  3. theThe New Franchise Agreement, duly executed by Franchisor and Buyer, and any other instruments or documents required to be signed and/or delivered by Franchisor in order for Buyer to satisfy its obligations under SECTION 4.5;
  4. all transfer tax returns which are required by law and the regulations issued pursuant thereto (if any) in connection with the payment of all state or local real property transfer taxes that are payable or arise as a result of the consummation of the transactions contemplated by this Agreement, in each case, as prepared by Seller and duly executed by Buyer;
  5. anyAny documents required to be delivered in connection with the Deed described in SECTION 6.2(a) such as an affidavit of value, duly executed by Buyer;
  6. such other documents and instruments as may be reasonably requested by Title Company or Seller in order to consummate the transactions described in this Agreement; and
  7. a closing statement for the Assets prepared and reasonably approved by Seller and Buyer, consistent with the terms of this Agreement (a “Closing Statement”) and duly executed by Buyer.
2. Seller Closing Deliveries. Seller shall deliver the following documents to the Escrow Agent (to hold in escrow pending the Closing) at or before the Closing Date:
  1. aA special warranty deed (the “Deed”) in substantially the form of Exhibits B attached hereto, duly executed by Seller;
  2. a bill of sale (a “Bill of Sale”) duly executed by Seller (and OpCo if necessary) in substantially the form of Exhibit C attached hereto, transferring the FF&E, supplies, Inventories, and Accounts Receivable to Buyer;
  3. theThe Assignment of Contracts and Leases duly executed by Seller, together with copies, and if available, originals of all contracts and agreements assigned thereby;
  4. theThe Assignment of Intangibles, duly executed by Seller;
  5. aA termination of the Management Agreement, Asset Management Agreement, and the Hotel Lease, each duly executed by Seller or its Affiliates;
  6. anAn affidavit that Seller is not a “foreign person” within the meaning of the Foreign Investment in Real Property Tax Act of 1980, as amended;
  7. titleTitle to the vehicles owned by Seller and used at the Hotel, if any;
  8. such other documents and instruments as may be reasonably requested by Title Company in order to consummate the transactions described in this Agreement, including a title affidavit (a “Title Affidavit”) duly executed by Seller in substantially the form of Exhibit E attached hereto;
  9. all transfer tax returns which are required by law and the regulations issued pursuant thereto (if any) to be delivered by Seller in connection with the payment of all state or local real property transfer taxes that are payable or arise as a result of the consummation of the transactions contemplated by this Agreement, in each case, as prepared and duly executed by Seller, as applicable; and
  10. the Closing Statement duly executed by Seller.
INSPECTIONS AND RELEASE
1. Right of Inspection. Commencing prior to the date hereof and continuing until the Additional Deposit Date, Buyer and its agents shall have the right, upon reasonable prior written notice to Seller (which shall in any event be at least two (2) Business Days’ prior written notice) and at Buyer’s sole cost, risk and expense, to inspect the Hotel during normal business hours on Business Days, provided that any such inspection shall not unreasonably impede the normal day to day business operation of the Hotel, Buyer and all agents shall comply with Seller’s requests with respect to the inspections to minimize such interference, and provided further that Seller shall be entitled to accompany Buyer and its agents on each such inspection. Buyer, at its own expense, shall comply (and shall cause each of Buyer’s agents and Buyer’s Vendors to comply) with all Applicable Law including, without limitation, those relating to health, safety, noise, environmental protection, waste disposal, water and air quality, and worker occupational health and safety, and shall furnish to Seller reasonable evidence of such compliance upon request. Seller shall have the right to redact proprietary documents and information, documents and information which are subject to confidentiality agreements which do not permit their disclosure to Buyer or due to other confidentiality concerns, and documents and information subject to the attorney client privilege so long as the items delivered to Buyer after such redaction are not materially misleading or incomplete, and Seller shall have the right to refuse to deliver to Seller copies of each of the Existing Franchise Agreement, Management Agreement, Asset Management Agreement, and the Hotel Lease. No tests, inspections or other actions of Buyer or its agents or contractors shall have any material adverse impact on the Assets or any adjacent properties, property owners, or users of adjacent properties. Notwithstanding the foregoing, Buyer shall not have the right to interview or otherwise communicate with the Employees, Seller-Related Entities (excluding Seller), Franchisor, any guests or licensees of the Hotel or other users or occupants of the Hotel without the prior written consent of Seller (which may be granted or denied in Seller’s sole discretion), to interview or communicate with any Governmental Authority with respect to the Hotel without the prior written consent of Seller (which may be granted or denied in Seller’s sole discretion), or to do any drilling, coring or other invasive testing without the prior written consent of Seller which may be granted or denied in Seller’s sole and absolute discretion (and which may be conditioned upon Buyer’s ability to the furnish acceptable certificates of insurance). After the expiration of the Additional Deposit Date and delivery of the Additional Deposit, but not more than five days immediately preceding the Closing Date, Buyer shall have the right as agreed with Seller to interview the General Manager, Director of Sales and the Engineer of the Hotel, and prior to the Closing Date, as agreed with Seller, Buyer shall have the right to contact and interview other employees. A representative of Seller shall be entitled to accompany Buyer and its agents on any such permitted interviews, communications and testing. Buyer’s right of inspection of the Hotel shall be subject to the rights of the guests of the Hotel and the rights of Manager under the Management Agreement, Asset Manager under the Asset Management Agreement, OpCo under the Hotel Lease, and Franchisor under the Existing Franchise Agreement. Prior to any such inspection, Buyer shall deliver to Seller copies of certificates of insurance reasonably satisfactory to Seller evidencing commercial general liability insurance policies (naming Seller and OpCo, and such other affiliated parties as Seller may reasonably designate, as an additional insureds) and written through an insurance company licensed to do business in the state in which the Land is located and having a rating of at least “A” by A.M. Best Company, evidencing current worker’s compensation insurance meeting the legally mandated limits of coverage as well as commercial general liability insurance on an occurrence basis with coverage limits, which shall be maintained by Buyer and all third parties engaged by Buyer with access to the Hotel (“Buyer’s Vendors”) in connection with Buyer’s or any Buyer’s Vendor’s investigations upon the Hotel, with limits, coverages and insurers under such policies reasonably satisfactory to Seller. Seller hereby agrees that limits of $1,000,000 per occurrence/$2,000,000 in the aggregate (“Minimum Insurance Limits”) for Assets damage, bodily or personal injury or death shall be acceptable to Seller (except that such limits may be increased for any drilling, coring or other invasive testing). In addition, Buyer and each of Buyer’s Vendors shall carry the following: (i) excess (umbrella) liability insurance with limits of not less than $2,000,000 per occurrence; (ii) comprehensive automobile liability insurance of not less than Minimum Insurance Limits; (iii) employer’s liability insurance with a limit of not less than Minimum Insurance Limits; and (iv) worker’s compensation insurance in compliance with applicable statutory requirements. Buyer shall not permit any mechanics’ or materialmen’s liens to be filed against the Assets as a result of the inspections or of any activities by Buyer or Buyer’s Vendor or Buyer’s agents on or with respect to the Assets, including but not limited to, with respect to any labor or materials furnished to the Hotel at their insistence or request. If any such lien is filed against the Assets, Buyer shall cause the same to be promptly discharged of record. If Buyer fails to have any such lien removed of record within ten (10) days following written notice from Seller, then Seller may cause the same to be removed of record and recover from Buyer all out-of-pocket costs and expenses incurred by Seller in connection therewith. Buyer shall, at its sole cost and expense, repair any damage to the Assets or any other Assets owned by a person other than Buyer arising from or in connection with the inspections caused by Buyer or any Buyer’s Vendor, and restore the Assets or such other third-party Assets to the same condition as existed prior to such inspections. Buyer hereby indemnifies and agrees to defend and hold Seller and the Seller-Related Entities harmless from and against all loss, cost (including, without limitation, reasonable attorneys’ fees), claim or damage arising out of, resulting from, relating to or in connection with or from any such inspection by Buyer or Buyer’s employees, agents or contractors, except to the extent such claim or damage was caused solely by Seller or Seller’s agents. Prior to the Closing, the Deposit shall secure Buyer’s obligations under the indemnifications in this Agreement, and Buyer hereby grants to Seller a security interest in the Deposit. Seller shall have the right (but not the obligation) to cure any of Buyer’s and/or Buyer’s agentsagents’ violations of this SECTION 7.1. The security interest granted by Buyer to Seller hereby shall be superior to any interest in, or claim to, the Deposit that Buyer may have. Therefore, any claims that Seller may seek to satisfy from the Deposit due to a breach by Buyer of any of its obligations in this SECTION 7.1 shall have precedence over any claim that Buyer may have to the return of the Deposit. If Seller uses any portion of the Deposit to cure any violations of Buyer under this SECTION 7.1, then Buyer shall be required to replace such sums within one (1) day of receiving written notice from Seller that it has drawn funds from the Deposit. The failure by Buyer to timely replace such funds shall be deemed a default hereunder by Buyer resulting in Seller having the right to exercise any of its remedies under this Agreement arising out of a default by Buyer. Upon any termination of this Agreement (for any reason), Buyer shall deliver to Seller a copy of all third party inspection reports obtained by Buyer at any time. The provisions of this SECTION 7.1 shall survive the Closing or the termination of this Agreement without limitation.
2. Examination and No Contingencies.
  1. PRIOR TO THE ADDITIONAL DEPOSIT DATE, BUYER WILL BE MAKING SUCH INVESTIGATIONS AND EXAMINATION OF THE ASSETS AND ALL OTHER MATTERS AFFECTING OR RELATING TO THE TRANSACTIONS CONTEMPLATED HEREUNDER AS BUYER HAS DEEMED NECESSARY OR ADVISABLE IN ITS SOLE AND ABSOLUTE DISCRETION AND BUYER WILL RELY ON SUCH INSPECTIONS AND TESTS IN DETERMINING IF THE ASSETS ARE IS SUITABLE FOR BUYER’S PURPOSES. IF FOR ANY REASON BUYER IS UNABLE ON OR BEFORE THE ADDITIONAL DEPOSIT DATE TO MAKE ANY INQUIRY THAT IT DESIRED TO MAKE, OR THAT IS CUSTOMARILY MADE IN TRANSACTIONS OF THIS SORT, OR OTHERWISE FAILS TO OBTAIN INFORMATION SUFFICIENT TO ANSWER ANY QUESTION REGARDING THE CONDITION AND SUITABILITY OF THE ASSETS, AND YET NONETHELESS PROCEEDS WITH THE PURCHASE OF THE ASSETS, BUYER SHALL, EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, ASSUME ALL RISKS THAT, HAD IT PERFORMED SUCH INQUIRY OR OBTAINED SUCH INFORMATION, IT WOULD HAVE ELECTED NOT TO PROCEED WITH THE PURCHASE OF THE ASSETS ON THE TERMS CONTAINED HEREIN.

IN ENTERING INTO THIS AGREEMENT, BUYER HAS NOT BEEN INDUCED BY AND HAS NOT RELIED UPON ANY WRITTEN OR ORAL REPRESENTATIONS, WARRANTIES OR STATEMENTS, WHETHER EXPRESS OR IMPLIED, MADE BY SELLER-RELATED ENTITIES OR OTHER REPRESENTATIVE OF ANY OF THE FOREGOING OR BY ANY BROKER OR ANY OTHER PERSON REPRESENTING OR PURPORTING TO REPRESENT SELLER WITH RESPECT TO THE ASSETS, THE CONDITION OF THE ASSETS OR ANY OTHER MATTER AFFECTING OR RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY, OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT. BUYER’S OBLIGATIONS UNDER THIS AGREEMENT SHALL NOT BE SUBJECT TO ANY CONTINGENCIES, DILIGENCE OR CONDITIONS EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT. BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED OR ARISING BY OPERATION OF LAW, WITH RESPECT TO THE ASSETS OR THE CONDITION OF THE ASSETS. BUYER AGREES THAT THE ASSETS WILL BE SOLD AND CONVEYED TO (AND ACCEPTED BY) BUYER AT THE CLOSING IN THE THEN EXISTING CONDITION OF THE ASSETS, AS IS, WHERE IS, WITH ALL FAULTS, AND WITHOUT ANY WRITTEN OR VERBAL REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, OF ANY KIND WHATSOEVER, WHETHER BY SELLERS OR BY ANYONE ACTING ON SELLERS’ BEHALF (INCLUDING, WITHOUT LIMITATION, AGENTS, BROKERS, CONSULTANTS, COUNSEL, EMPLOYEES, OFFICERS, DIRECTORS, SHAREHOLDERS, PARTNERS, TRUSTEES OR BENEFICIARIES), OTHER THAN AS EXPRESSLY SET FORTH IN THIS AGREEMENT.

Without limiting the generality of the foregoing, except as set forth in this Agreement, the transactions contemplated by this Agreement are without statutory, express or implied warranty, representation, agreement, statement or expression of opinion of or with respect to the Condition of the Assets or any aspect thereof, including, without limitation, (i) any and all statutory, express or implied representations or warranties related to the suitability for habitation, merchantability, or fitness for a particular purpose, (ii) any statutory, express or implied representations or warranties created by any affirmation of fact or promise, by any description of the Assets or by operation of law and (iii) all other statutory, express or implied representations or warranties by Seller whatsoever. Buyer acknowledges that Buyer has knowledge and expertise in financial and business matters that enable Buyer to evaluate the merits and risks of the transactions contemplated by this Agreement. The provisions of this SECTION 7.2 shall survive the Closing without limitation and shall not be deemed merged into any instrument or conveyance delivered at the Closing.

For purposes of this Agreement, the term “Condition of the Assets” means the following matters:
1. Physical Condition of the Hotel. The quality, nature and adequacy of the physical condition of the Hotel, including, without limitation, the quality of the design, labor and materials used to construct the improvements included in the Hotel; the condition of structural elements, foundations, roofs, glass, mechanical, plumbing, electrical, HVAC, sewage, and utility components and systems; the capacity or availability of sewer, water, or other utilities; the geology, flora, fauna, soils, subsurface conditions, groundwater, landscaping, and irrigation of or with respect to the Hotel, the location of the Hotel in or near any special taxing district, flood hazard zone, wetlands area, protected habitat, geological fault or subsidence zone, hazardous waste disposal or clean-up site, or other special area, the existence, location, or condition of ingress, egress, access, and parking; the condition of the personal property and any fixtures; the presence of any bedbugs, rodents, or other pests; and the presence of any asbestos or other Hazardous Materials, dangerous, or toxic substance, material or waste in, on, under or about the Hotel and the improvements located thereon. “Hazardous Materials” means (A) those substances included within the definitions of any one or more of the terms “hazardous substances,” “toxic pollutants”, “hazardous materials”, “toxic substances”, and “hazardous waste” in the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (as amended), the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Sections 1801 et seq., the Resource Conservation and Recovery Act of 1976 as amended, 42 U.S.C. Section 6901 et seq., Section 311 of the Clean Water Act, 15 U.S.C. § 2601 et seq., 33 U.S.C. § 1251 et seq., 42 U.S.C. 7401 et seq. and the regulations and publications issued under any such laws, (B) petroleum, radon gas, lead based paint, asbestos or asbestos containing material and polychlorinated biphenyls and (C) mold or water conditions which may exist at the Hotel or other matters governed by any applicable federal, state or local law or statute.
2. Adequacy of the Assets. The economic feasibility, cash flow and expenses of the Assets, and habitability, merchantability, fitness, suitability and adequacy of the Hotel for any particular use or purpose.
3. Legal Compliance of the Assets. The compliance or non-compliance of Seller or the operation of the Hotel or any part thereof in accordance with, and the contents of, (A) all codes, laws, ordinances, regulations, agreements, licenses, permits, approvals and applications of or with any Governmental Authorities asserting jurisdiction over the Hotel, including, without limitation, those relating to zoning, land use, building, public works, parking, fire and police access, handicap access, life safety, subdivision and subdivision sales, and Hazardous Materials, dangerous, and toxic substances, materials, conditions or waste, including, without limitation, the presence of Hazardous Materials in, on, under or about the Hotel that would cause state or federal agencies to order a cleanup of the Hotel under any applicable legal requirements and (B) all agreements, covenants, conditions, restrictions (public or private), condominium plans, development agreements, site plans, building permits, building rules, and other instruments and documents governing or affecting the use, management, and operation of the Hotel.
4. Matters Disclosed in the Schedules and the Asset File. Those matters referred to in this Agreement and the documents listed on the schedules attached hereto and the matters disclosed in the Asset File.
5. Insurance. The availability, cost, terms and coverage of liability, hazard, comprehensive and any other insurance of or with respect to the Hotel.
6. Condition of Title. The condition of title to the Hotel, including, without limitation, vesting, legal description, matters affecting title, title defects, liens, encumbrances, boundaries, encroachments, mineral rights, options, easements, and access; violations of restrictive covenants, land use, zoning ordinances, setback lines, or development agreements; the availability, cost, and coverage of title insurance; leases, rental agreements, occupancy agreements, rights of parties in possession of, using, or occupying the Hotel; and standby fees, taxes, bonds and assessments.
Release. AS A MATERIAL PART OF THE CONSIDERATION TO SELLERS FOR THE SALE OF THE HOTELS HEREUNDER, BUYER HEREBY WAIVES AND RELINQUISHES, AND RELEASES SELLER AND ALL SELLER-RELATED ENTITIES AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS AND REPRESENTATIVES SHALL BE, AND ARE HEREBY, FULLY AND FOREVER RELEASED AND DISCHARGED FROM ANY AND ALL LIABILITIES, LOSSES, CLAIMS (OF ANY PERSON INCLUDING THIRD PARTY CLAIMS), DEMANDS, DAMAGES (OF ANY NATURE WHATSOEVER), CAUSES OF ACTION, COSTS, PENALTIES, FINES, JUDGMENTS, REASONABLE ATTORNEYS’ FEES, CONSULTANTS’ FEES AND COSTS AND EXPERTS’ FEES (COLLECTIVELY, THE “CLAIMS”) WITH RESPECT TO ANY AND ALL CLAIMS, WHETHER DIRECT OR INDIRECT, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, THAT MAY ARISE ON ACCOUNT OF OR IN ANY WAY BE CONNECTED WITH THE ASSETS OR THE HOTEL INCLUDING, WITHOUT LIMITATION, THE PHYSICAL, ENVIRONMENTAL AND STRUCTURAL CONDITION OF THE HOTEL OR ANY LAW OR REGULATION APPLICABLE THERETO, INCLUDING, WITHOUT LIMITATION, ANY CLAIM OR MATTER (REGARDLESS OF WHEN IT FIRST APPEARED) RELATING TO OR ARISING FROM (A) THE PRESENCE OF ANY ENVIRONMENTAL PROBLEMS, OR THE USE, PRESENCE, STORAGE, RELEASE, DISCHARGE, OR MIGRATION OF HAZARDOUS MATERIALS ON, IN, UNDER OR AROUND THE HOTEL REGARDLESS OF WHEN SUCH HAZARDOUS MATERIALS WERE FIRST INTRODUCED IN, ON OR ABOUT THE HOTEL, (B) ANY PATENT OR LATENT DEFECTS OR DEFICIENCIES WITH RESPECT TO THE HOTEL, (C) ANY AND ALL MATTERS RELATED TO THE HOTEL OR ANY PORTION THEREOF, INCLUDING WITHOUT LIMITATION, THE CONDITION AND/OR OPERATION OF THE HOTEL AND EACH PART THEREOF, (D) THE PRESENCE, RELEASE AND/OR REMEDIATION OF ASBESTOS AND ASBESTOS CONTAINING MATERIALS IN, ON OR ABOUT THE HOTEL REGARDLESS OF WHEN SUCH ASBESTOS AND ASBESTOS CONTAINING MATERIALS WERE FIRST INTRODUCED IN, ON OR ABOUT THE HOTEL, OR (E) EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, ANY MISREPRESENTATION, OR FAILURE TO DISCLOSE TO BUYER ANY INFORMATION, REGARDING THE ASSETS (INCLUDING, WITHOUT LIMITATION, ANY DEFECTIVE, HAZARDOUS OR UNLAWFUL CONDITION WHICH SELLER SHOULD BE AWARE, WHETHER OR NOT SUCH CONDITION REASONABLY COULD HAVE BEEN DISCOVERED BY BUYER THROUGH AN INSPECTION OF THE HOTELS OR THE PROPERTY RECORDS); PROVIDED, HOWEVER, THAT IN NO EVENT SHALL SELLER-RELATED ENTITIES BE RELEASED FROM (X) ANY CLAIMS ARISING PURSUANT TO THE PROVISIONS OF THIS AGREEMENT OR SELLER’S OBLIGATIONS, IF ANY, UNDER THE CLOSING DOCUMENTS OR (Y) ANY CLAIMS ARISING FROM ANY FRAUDULENT ACTS COMMITTED BY SELLER TO BUYER IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. BUYER HEREBY WAIVES AND AGREES NOT TO COMMENCE ANY ACTION, LEGAL PROCEEDING, CAUSE OF ACTION OR SUITS IN LAW OR EQUITY, OF WHATEVER KIND OR NATURE, INCLUDING, BUT NOT LIMITED TO, A PRIVATE RIGHT OF ACTION UNDER THE FEDERAL SUPERFUND LAWS, 42 U.S.C. SECTIONS 9601 ET SEQ. (AS SUCH LAWS AND STATUTES MAY BE AMENDED, SUPPLEMENTED OR REPLACED FROM TIME TO TIME), DIRECTLY OR INDIRECTLY, AGAINST THE SELLER-RELATED ENTITIES OR THEIR AGENTS IN CONNECTION WITH CLAIMS DESCRIBED ABOVE AND ALL SIMILAR PROVISIONS OR RULES OF LAW. IN THIS CONNECTION AND TO THE GREATEST EXTENT PERMITTED BY LAW, BUYER HEREBY AGREES, REPRESENTS AND WARRANTS THAT BUYER REALIZES AND ACKNOWLEDGES THAT FACTUAL MATTERS NOT KNOWN TO IT MAY HAVE GIVEN OR MAY HEREAFTER GIVE RISE TO CAUSES OF ACTION, CLAIMS, DEMANDS, DEBTS, CONTROVERSIES, DAMAGE, COSTS, LOSSES AND EXPENSES WHICH ARE PRESENTLY UNKNOWN, UNANTICIPATED AND UNSUSPECTED, AND BUYER FURTHER AGREES, REPRESENTS AND WARRANTS THAT THE WAIVERS AND RELEASES HEREIN HAVE BEEN NEGOTIATED AND AGREED UPON IN LIGHT OF THAT REALIZATION AND THAT BUYER NEVERTHELESS HEREBY INTENDS TO RELEASE, DISCHARGE AND ACQUIT THE SELLER-RELATED ENTITIES FROM ANY SUCH UNKNOWN, UNANTICIPATED OR UNSUSPECTED CLAIMS, DEBTS, AND CONTROVERSIES WHICH MIGHT IN ANY WAY BE INCLUDED AS A MATERIAL PORTION OF THE CONSIDERATION GIVEN TO SELLER BY BUYER IN EXCHANGE FOR SELLER’S PERFORMANCE HEREUNDER. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE SALE OF THE ASSETS SHALL BE SUBJECT TO ALL WAIVERS OF WARRANTY AND RELEASES SET FORTH HEREIN OR IN THE DEED. BUYER UNDERSTANDS THAT SUCH WAIVER AND RELEASE INCLUDES STATUTORY AS WELL AS “COMMON LAW” AND EQUITABLE RIGHTS AND REMEDIES AND THAT IT COVERS POTENTIAL CLAIMS OF WHICH BUYER MAY BE CURRENTLY UNAWARE OR UNABLE TO DISCOVER. BUYER ACKNOWLEDGES THAT THE FOREGOING WAIVER AND RELEASE IS OF MATERIAL CONSIDERATION TO SELLERS IN ENTERING INTO THIS AGREEMENT, THAT BUYER’S COUNSEL HAS ADVISED BUYER OF THE POSSIBLE LEGAL CONSEQUENCES OF MAKING SUCH WAIVER AND RELEASE AND THAT BUYER HAS TAKEN INTO ACCOUNT, IN AGREEING TO PURCHASE THE ASSETS AT THE PURCHASE PRICE SPECIFIED HEREIN, SELLERS’ DISCLAIMER OF ANY WARRANTIES AND REPRESENTATIONS REGARDING THE HOTELS OTHER THAN THOSE EXPRESSLY SET FORTH HEREIN. BUYER FURTHER AGREES AND ACKNOWLEDGES THAT, IN GIVING THE FOREGOING WAIVER AND RELEASE, IT HAS WITH ITS LEGAL COUNSEL, CONSIDERED ANY STATUTE OR OTHER LAW THAT MIGHT APPLY TO AND LIMIT THE EFFECT OF BUYER’S WAIVER AND RELEASE HEREIN AND HEREBY KNOWINGLY WAIVES THE BENEFITS OF ANY SUCH LAW AND INTENDS THAT IT NOT BE APPLICABLE HERE. SELLER HAS GIVEN BUYER MATERIAL CONCESSIONS REGARDING THIS TRANSACTION IN EXCHANGE FOR BUYER AGREEING TO THE PROVISIONS OF THIS SECTION 7.3. SELLER AND BUYER HAVE EACH INITIALED THIS SECTION 7.3 TO FURTHER INDICATE THEIR AWARENESS AND ACCEPTANCE OF EACH AND EVERY PROVISION HEREOF. THE PROVISIONS OF THIS SECTION 7.3 SHALL SURVIVE THE CLOSING WITHOUT LIMITATION AND SHALL NOT BE DEEMED MERGED INTO ANY INSTRUMENT OR CONVEYANCE DELIVERED AT THE CLOSING.

SELLER’S INITIALS: BUYER’S INITIALS:

DISCLAIMER. ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE ASSETS IS SOLELY FOR BUYER’S CONVENIENCE AND WAS OR WILL BE OBTAINED FROM A VARIETY OF SOURCES. NONE OF ANY SELLER-RELATED ENTITIES, OR ANY OFFICER, DIRECTOR, MEMBER, AGENT, EMPLOYEE, OR OTHER REPRESENTATIVE OF ANY OF THE FOREGOING OR BY ANY BROKER OR ANY OTHER PERSON REPRESENTING OR PURPORTING TO REPRESENT SELLER WITH RESPECT TO THE ASSETS HAS MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND NONE MAKES ANY (AND EXPRESSLY DISCLAIMS ALL) REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR THE CLOSING DOCUMENTS. NONE OF SAME SHALL BE LIABLE FOR ANY MISTAKES, OMISSIONS, MISREPRESENTATION OR ANY FAILURE TO INVESTIGATE THE ASSETS NOR SHALL SELLER BE BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS, APPRAISAL, ENVIRONMENTAL ASSESSMENT REPORTS OR OTHER INFORMATION PERTAINING TO THE ASSETS OR THE OPERATION THEREOF, FURNISHED BY ANY OF THEM EXCEPT, IN EACH CASE, AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE CLOSING DOCUMENTS.

SELLER’S INITIALS: BUYER’S INITIALS:

TITLE AND PERMITTED EXCEPTIONS
1. Title Insurance and Survey. The Hotel shall be sold and is to be conveyed, and Buyer agrees to purchase the Hotel, subject to the Permitted Exceptions.
2. Title Commitment and Survey.
  1. Within two (2) business days following the Effective Date, Buyer shall (i) request that Escrow Agent (“Title Company”) deliver as soon as practicable a commitment (the “Title Commitment”) to issue an ALTA owner’s policy of title insurance to Buyer insuring good and marketable fee simple title to the Land and any improvements thereon (the “Title Policy”), and (ii) procure an ALTA survey of the Land, including any improvements thereon (the “Survey”), and (iii) any other title related matters Buyer desires with respect to the Assets, all at Buyer’s sole cost and expense. Buyer shall deliver a copy of the Title Commitment and Survey to Seller via e-mail upon receipt. Seller may terminate this Agreement if Buyer does not deliver to Seller evidence of its timely compliance with this SECTION 8.2(a), in which event the Initial Deposit, shall be immediately delivered to Seller as liquidated damages in accordance with SECTION 12.1.
  2. Not less than fifteen (15) days prior to the Additional Deposit Date, Buyer shall notify Seller and Seller’s attorney in writing of Buyer’s objections to any title or survey defects or other matters disclosed by the Title Commitment and/or the Survey (the “Title Objections”). Buyer’s failure to timely deliver the Title Objections shall constitute Buyer’s acceptance of same and a waiver of Buyer’s right to object. If any Title Objections are timely received by Seller, Seller may remedy, or agree to remedy prior to Closing, all or any of the matters noted in the Title Objections to the reasonable satisfaction of Purchaser by delivering a notice to that effect (the “Seller Response”) prior to the Additional Deposit Date. Seller shall not be required to remedy or agree to remedy any matter noted in any Title Objections, except as provided in the Seller Response, and Seller shall have the right to apply the Purchase Price or a portion thereof for such purpose. If Seller does not timely deliver a Seller Response indicating that it will cure or remedy all of the title objections set forth in the Title Objections, then Seller shall be deemed to have elected to refuse to cure or remedy any of the objections set forth in the Title Objections except as specifically provided in SECTION 8.3(a). If Seller fails to deliver a Seller Response indicating that it will cure or remedy all Title Objections (in addition to those required by except as specifically provided in SECTION 8.3(a)), then Purchaser, at its election, shall have the right (as its sole and exclusive remedy) either to: (a) accept title subject to the objections that Seller has not agreed to cure or remedy (and such matters shall be deemed Permitted Exceptions); or (b) terminate this Agreement. Nothing in this SECTION 8.2 shall require Seller to attempt to discharge any title exceptions, to take or bring any action or proceeding or any other steps to remove any title exception or to expend any moneys therefor, other than with respect to items which Seller agrees to cure in the Seller’s Response.
  3. On the Additional Deposit Date, the Deposit shall become non-refundable to Buyer (but applicable to the Purchase Price if Closingclosing occurs), except as expressly set forth in SECTION 12.2.
3. Delivery of Title.
  1. As of the Closing, Seller shall obtain releases of or cause Title Company to insure over or against (i) the deeds of trust or mortgages created by Seller encumbering the Hotel, and (ii) any tax liens relating to taxes and assessments that are delinquent or judgment liens encumbering the Property, recorded against title to the Property and voluntarily created by Seller after the effective date of the Title Commitment (“Post Effective Date Seller Encumbrances”). Other than as specifically set forth in this Agreement (including, without limitation, the first sentence of this SECTION 8.3(a), and the entirety of SECTION 8.3(c)), Seller shall not be required to take or bring any action or proceeding or any other steps to remove any title exception or to expend any moneys therefor, nor shall Buyer have any right of action against Seller, at law or in equity, for Seller’s inability to convey title subject only to the Permitted Exceptions.
  2. Notwithstanding the foregoing, in the event that Seller is unable to convey title subject only to the Permitted Exceptions, and Buyer has not, prior to the Closing Date, given notice to Seller that Buyer is willing to waive objection to each title exception which is not a Permitted Exception, Seller shall have the right, in Seller’s sole and absolute discretion, to (i) take such action as Seller shall deem advisable to attempt to discharge or cause Title Company to insure over or against each such title exception which is not a Permitted Exception or (ii) terminate this Agreement. In the event that Seller shall elect to attempt to discharge or cause Title Company to insure over or against such title exceptions which are not Permitted Exceptions, Seller shall be entitled to one or more adjournments of the Closing Date for a period not to exceed sixty (60) days in the aggregate. If, for any reason whatsoever, Seller has not discharged or caused Title Company to insure over or against such title exceptions which are not Permitted Exceptions prior to the expiration of the last of such adjournments, and if Buyer is not willing to waive objection to such title exceptions, this Agreement shall be terminated as of the expiration of the last of such adjournments. In the event of a termination of this Agreement pursuant to this SECTION 8.3(b), the Deposit shall be refunded to Buyer and neither party shall have any further rights or obligations hereunder except for those that expressly survive the termination of this Agreement. Nothing in this clause (b) shall require Seller, despite any election by Seller to attempt to discharge or cause Title Company to insure over or against any title exceptions, to take or bring any action or proceeding or any other steps to remove any title exception or to expend any moneys therefor, other than with respect to the Post Effective Date Seller Encumbrances and the Post Effective Date Monetary Encumbrances (as hereinafter defined).
  3. Notwithstanding the foregoing, at the Closing, in addition to releasing or causing Title Company to insure over or against any Post Effective Date Seller Encumbrances which Buyer does not waive its objection to pursuant to SECTION 8.3(b), Seller shall obtain a release of or cause Title Company to insure over or against any lien encumbering the Hotel after the effective date of the Title Commitment which may be removed or insured over solely by the payment of a sum of money (a “Post Effective Date Monetary Encumbrance”); provided that Seller shall not be obligated to spend more than $10,000 in the aggregate to remove or insure over or against any Post Effective Date Monetary Encumbrances.
4. Cooperation. In connection with obtaining the Title Policy, Buyer and Seller, as applicable, and to the extent requested by Title Company, will deliver to Title Company (a) evidence sufficient to establish (i) the legal existence of Buyer and Seller and (ii) the authority of the respective signatories of Seller and Buyer to bind Seller and Buyer, as the case may be, and (b) a certificate of good standing of Seller.
TRANSACTION COSTS AND RISK OF LOSS
1. Transaction Costs.
  1. In addition to the their respective apportionment obligations hereunder, (i) Seller and Buyer shall each be responsible for the payment of the costs of their respective legal counsel, advisors and other professionals employed thereby in connection with the sale of the Assets; (ii) Buyer and Seller shall each be responsible for fifty percent (50%) of the fees related to any escrow established under this Agreement (including, but not limited to, any reasonable fees and expenses of Escrow Agent); (iii) Buyer and Seller shall each be responsible for fifty percent (50%) of any transfer taxes or documentary stamps on the Deed; and (iv) Buyer shall be responsible for all costs and expenses associated with (A) Buyer’s due diligence, (B) the policy premiums for the Title Policy, including any extended coverage or endorsements to the Title Policy, (C) the cost of removing any so-called “standard exceptions” to the Title Policy, (D) the cost of updating the Existing Survey or obtaining the Survey, (E) the policy premiums in respect of any mortgage title insurance obtained by Buyer, (F) all search costs with respect to the Assets and updates related thereto not included in the basic policy premium, (G) except as otherwise provided in this SECTION 9.1(a), payment, at the Closing, of the recording charges and fees for the documents necessary to transfer the Assets, (H) except as otherwise provided in this SECTION 9.1(a), all taxes, levies, charges or fees incurred with respect to transfer, recording or other charges payable in connection with the assignment, transfer or conveyance of the Assets and the Property-Related Assets, all costs and expenses related to recording of the Deed, including but not limited to all the state and local recording taxes and fees, and any fees payable to replace the goods or services provided under the Operating Agreements (which are not assigned or transferred to Buyer), (I) obtaining any financing Buyer may elect to obtain (including any fees, financing costs, mortgage and recordation taxes and documentary stamps in connection therewith), (J) the application for, the issuance of and/or the performance under the New Franchise Agreement (including, but not limited to, any fees, reimbursements or other amounts charged by Franchisor in connection with the issuance of the New Franchise Agreement to Buyer), (K) any fees and costs related to Buyer obtaining a transfer of or replacement Liquor Licenses and (L) all sales, use or similar taxes due in connection with the transfer of the portion of the Assets constituting personal property (including vehicles).
  2. Each party to this Agreement shall indemnify the other parties and their respective successors and assigns from and against any and all loss, damage, cost, charge, liability or expense (including court costs and reasonable attorneys’ fees) which such other party may sustain or incur as a result of the failure of either party to timely pay any of the aforementioned taxes, fees or other charges for which it has assumed responsibility under this Section. The provisions of this Article IX shall survive the Closing or the termination of this Agreement without limitation.
2. Risk of Loss.
  1. If, after the Effective Date but on or before the Closing Date, the Hotel or any portion thereof shall be (i) damaged or destroyed by fire or other casualty or (ii) taken as a result of any condemnation or eminent domain proceeding, Seller shall promptly notify Buyer and, at Closing, Seller will credit against the Purchase Price payable by Buyer at the Closing an amount equal to the net proceeds (other than on account of business or rental interruption relating to the period prior to Closing), if any, received by Seller as a result of such casualty or condemnation, plus the amount of any deductible payable by Buyer (unless such casualty or condemnation constitutes a Material Casualty or Material Condemnation, as applicable), less any amounts spent by Seller to restore the Hotel. Subject to SECTION 9.2(d), if as of the Closing Date, Seller has not received any such insurance or condemnation proceeds, then the parties shall nevertheless consummate on the Closing Date the conveyance of the Assets (without any credit for such insurance or condemnation proceeds except for a credit for any deductible payable by Buyer under such insurance) and Seller will at the Closing assign to Buyer all rights of Seller, if any, to the insurance or condemnation proceeds (other than on account of business or rental interruption relating to the period prior to Closing) and to all other rights or claims arising out of or in connection with such casualty or condemnation.
  2. Notwithstanding the provisions of SECTION 9.2(a), if, on or before the Closing Date, the Hotel or any portion thereof shall be (i) damaged or destroyed by a Material Casualty or (ii) taken as a result of a Material Condemnation, Buyer shall have the right, exercised by written notice to Seller no more than five days after Buyer has received notice of such Material Casualty or Material Condemnation, to terminate this Agreement, in which event the Deposit shall be refunded to Buyer and neither party shall have any further rights or obligations hereunder other than those which expressly survive the termination of this Agreement. If Buyer fails to timely terminate this Agreement in accordance with this SECTION 9.2(b), the provisions of SECTION 9.2(a) shall apply. As used in this SECTION 9.2(b), a “Material Casualty” means any damage to the Hotel or any portion thereof by fire or other casualty that in Seller’s reasonable judgment may be expected to cost in excess of twenty percent (20%) of the Purchase Price to repair. As used in this SECTION 9.2(b), a “Material Condemnation” means a taking of the Hotel or any material portion thereof as a result of a condemnation or eminent domain proceedings that permanently impairs the use and value of such Land, and which cannot be restored to substantially the same use and value as before the taking.
  3. Subject to the provisions of this SECTION 9.2, the risk of loss or damage to the Hotel shall remain with Seller until delivery of the Deed.
  4. Subject to SECTION 9.2(a) and SECTION 9.2(b), Buyer and Seller hereby agree that any insurance claims, insurance proceeds or other recoveries payable in connection with a casualty occurring prior to the Closing Date shall be retained by or paid to Seller, and are not part of the Assets to be transferred to Buyer. If any such proceeds or recoveries are received by Buyer, Buyer shall promptly deliver the same to Seller. The provisions of this SECTION 9.2(d) shall survive the Closing without limitation.
ADJUSTMENTS
1. Adjustments. Unless otherwise provided below, the following and all revenue and expenses are to be adjusted and prorated between Seller (or OpCo: all references to “Seller” in this Article X shall refer to “Seller and/or OpCo” as applicable) and Buyer as of 11:59 P.M. on the day preceding the Closing, local time for the Hotel (the “Cut-Off Time”), based upon a 365 day year, and the net amount thereof under this SECTION 10.1 shall be added to (if such net amount is in Seller’s favor) or deducted from (if such net amount is in Buyer’s favor) the Purchase Price payable at the Closing (the parties’ obligations under this Article X shall survive the Closing without limitation):
  1. Taxes and Assessments. All real estate taxes and assessments levied against the Assets shall be prorated, based on the fiscal year of the taxing authority, as of the Cut-Off Time between Buyer and Seller. If the amount of any such taxes is not ascertainable on the Closing Date, the proration for such taxes shall be based on the most recently available bill, assessed valuations and/or mill levies, to the extent allowed under Applicable Law; provided, however, that after the Closing, Seller and Buyer shall re-prorate the taxes and pay any deficiency in the original proration to the other party promptly upon receipt of the final bill for the relevant taxable period, to the extent allowed under Applicable Law. In the event that the Assets or any part thereof shall be or shall have been affected by an assessment or assessments, whether or not the same become payable in annual installments, Seller shall, at the Closing, be responsible for any installments due prior to the Closing and Buyer shall be responsible for any installments due on or after the Closing. The re-proration obligation under this SECTION 10.1(a) shall survive the Closing without limitation.
  2. Water and Sewer Charges, Utilities. All utility services shall be prorated as of the Cut-Off Time between Buyer and Seller. To the extent possible, readings shall be obtained for all utilities as of the Cut-Off Time. If not possible, the cost of such utilities shall be prorated between Seller and Buyer by estimating such cost on the basis of the most recent bill for such service; provided, however, that after the Closing, Seller and Buyer shall re-prorate the amount for such utilities and pay any deficiency in the original proration to the other party promptly upon receipt of the actual bill for the relevant billing period. Seller shall receive a credit for all deposits transferred to Buyer or which remain on deposit for the benefit of Buyer with respect to such utility contracts, otherwise such deposits shall be refunded to Seller, as applicable. The re-proration obligation in this SECTION 10.1(b) shall survive the Closing without limitation.
  3. Operating Agreements. Charges and payments (including the reimbursement of expenses) under all Operating Agreements (other than the Existing Franchise Agreement, the Management Agreement, the Asset Management Agreement, the Equipment Leases, the Leases, the Hotel Lease, the Licenses and Permits, and any Master and/or National Agreements (identified on Schedule 3.2(a) hereto not being assigned to Buyer at Closing).
  4. Miscellaneous Revenues. Revenues, if any, arising out of any other income producing agreements not described in this SECTION 10.1.
  5. Inventory. Notwithstanding the foregoing, Seller shall receive a credit for all Assets Inventory and Retail Merchandise in unopened cases in an amount equal to Seller’s actual cost (including sales and/or use tax) for such items.
  6. Alcoholic Beverages. Notwithstanding the foregoing, Seller shall receive a credit for all unopened bottles or containers of alcoholic beverages as of the Closing in an amount equal to Seller’s actual cost (including sales and/or use tax) if the sale or transfer of the same is permitted under Applicable Law.
  7. Licenses and Permits. All amounts prepaid, accrued or due and payable under any Licenses and Permits (other than utilities which are separately prorated under SECTION 10.1(b)) transferred to Buyer shall be prorated as of the Cut-Off Time between Seller and Buyer. Seller shall receive a credit for all deposits made by Seller under the Licenses and Permits which are transferred to Buyer or which remain on deposit for the benefit of Buyer.
  8. Deposits for Bookings. Buyer shall receive a credit for all prepaid deposits for Bookings scheduled for accommodations or events on or after the Closing Date which Buyer is obligated to honor pursuant to this Agreement, except to the extent such deposits are transferred to Buyer.
  9. Restaurants and Bars. Seller shall close out the transactions in the restaurants and bars in the Hotel as of the Cut-Off Time and shall retain all monies accrued as of the Cut-Off Time, and Buyer shall be entitled to any monies accrued from the restaurants and bars thereafter.
  10. Vending Machines. Seller shall remove all monies from all vending machines, laundry machines, pay telephones and other coin-operated equipment as of the Cut-Off Time and shall retain all monies collected therefrom as of the Cut-Off Time, and Buyer shall be entitled to any monies collected therefrom after the Cut-Off Time.
  11. Trade Payables. Except to the extent an adjustment or proration is made under another Section of this SECTION 10.1, (i) Seller shall be responsible for all amounts payable to vendors, contractors or other suppliers of goods or services to the Hotel (the “Trade Payables”) prior to the Cut-Off Time which are due and payable as of the Cut-Off Time for which goods or services have been delivered to the Hotel prior to Cut-Off Time, and (ii) Buyer shall receive a credit for the amount of such Trade Payables which have accrued, but are not yet due and payable as of the Cut-Off Time, and Buyer shall pay all such Trade Payables accrued after the Cut-Off Time when such Trade Payables become due and payable up to the amount of such credit (plus any late fees and penalties resulting from Buyer’s failure to pay such Trade Payables when due); provided, however, Seller and Buyer shall re-prorate the amount of credit for any Trade Payables and pay any deficiency in the original proration to the other party promptly upon receipt of the actual bill for such goods or services. Seller shall receive a credit for all advance payments or deposits made with respect to FF&E, Retail Merchandise, Land and Equipment, Inventories and other Assets ordered, but not delivered to the Hotel prior to the Cut-Off Time, and Buyer shall pay the amounts which become due and payable for such FF&E, Retail Merchandise, Land and Equipment, Inventories and other Assets which were ordered but not delivered prior to Cut-Off Time. The re-proration obligation in this SECTION 10.1(k) shall survive the Closing without limitation.
  12. Cash. Seller shall receive a credit for all cash on hand at the Hotel and all cash on deposit in any house bank at the Hotel as of the Closing. Seller shall retain all amounts in any operating accounts of the Hotel in any bank, and there shall be no credit or adjustment hereunder with respect to such cash; provided, however, Seller shall receive a credit for any reserve fund or account established pursuant to the terms of the Management Agreement, Asset Management Agreement, or Franchise Agreement which Seller transfers to Buyer at Closing, if any.
  13. Employee Compensation. Seller shall be responsible for the following liabilities to or respecting Employees having accrued prior to the Cut-Off Time: all Employees’ wages, bonuses, pension benefits, any COBRA rights, together with F.I.C.A. unemployment and other taxes and benefits due from any employer of such Employees excluding accrued sick leave and accrued but unearned vacation pay. Notwithstanding the foregoing, with respect to accrued bonuses for the year in which the Closing occurs, Seller’s pro-rated share shall be based upon the estimated bonus to be paid in the year of Closing. Buyer shall be responsible for all other liabilities to or respecting Employees, whether having accrued prior to or after the Cut-Off Time. Buyer shall be responsible for all severance payments for Transferred Employees arising on or after the Closing and for all Employees not offered employment by Buyer (or its manager) as of the Closing on the same terms as those provided to such Employees by Manager on the day immediately preceding the Closing Date.
  14. Leases. All rents and other amounts prepaid, accrued or due and payable under any of the Leases shall be prorated as of the Cut-Off Time between Seller and Buyer.
  15. Other. If applicable, the Purchase Price shall be adjusted at Closing to reflect the adjustment of any other item which, (i) under the explicit terms of this Agreement, is to be apportioned at Closing to effectuate the intent that, except as otherwise expressly provided herein, all items of operating revenue and operating expense of the Assets prior to the Cut-Off Time shall be for account of and paid by Seller and all items of operating revenue and operating expense of the Assets with respect to the period after the Cut-Off Time shall be for the account of and paid by Buyer, or (ii) is customarily prorated at the closing of similar transactions.
2. Re-Adjustment.
  1. Except as provided in SECTION 10.1(a), if any items to be adjusted pursuant to this Article X are not determinable at the Closing, the adjustment shall be made subsequent to the Closing when the charge is determined. Either Seller or Buyer may deliver to the other party no later than 120 days following the Closing Date a schedule of prorations setting forth such party’s determination of any adjustments to the prorations made at Closing that it believes are necessary to complete the prorations as set forth in this Article X. Any errors or omissions in computing adjustments or readjustments at the Closing or thereafter shall be promptly corrected or made, provided that the party seeking to correct such error or omission or to make such readjustment shall have notified the other party of such error or omission or readjustment on or prior to the date that is 90 days following the Closing.
  2. The provisions of this Article X and the obligations of Seller and Buyer hereunder shall survive the Closing without limitation.
3. Accounts Receivable.
  1. Guest Ledger. All revenues received or to be received from transient guests on account of room rents for the period prior to and including the Cut-Off Time shall belong to Seller. At Closing, Seller shall receive a credit in an amount equal to: (i) all amounts charged to the Guest Ledger for all room nights up to (but not including) the night during which the Cut-Off Time occurs, and (ii) one-half of all amounts charged to the Guest Ledger for the room night which includes the Cut-Off Time. For the period beginning on the day immediately following the Cut-Off Time, such revenues collected from the Guest Ledger shall belong to Buyer. In the event that an amount less than the total amount due from a guest is collected and the guest continues in occupancy after the Cut-Off Time, such amount shall be applied first to any amount owing by such person to Seller and thereafter to such person’s amounts accruing to Buyer.
  2. Accounts Receivable (Other than Guest Ledger).
    1. On the Closing Date Seller shall assign to Buyer all Accounts Receivable (the “Assigned Accounts Receivable”), and Buyer shall pay to Seller an amount equal to 100% of all Accounts Receivable. Buyer shall have the sole right to collect and retain all such Assigned Accounts Receivable. If Buyer collects more than 100% of the face amount of the Assigned Accounts Receivable, Buyer shall pay to Seller such amount collected in excess of 100% of the face amount.
    2. The Accounts Receivable addressed in this SECTION 10.3(b) shall not include the Guest Ledger, which is addressed in SECTION 10.3(a).
    3. The parties’ obligations under this SECTION 10.3(b) shall survive the Closing without limitation.
  3. Safe Deposit Boxes/Luggage. The Seller and Buyer shall prepare an inventory as of the Cut-Off Time (which shall be binding on all parties thereto) of (i) all luggage, valises and trunks checked or left in the care of the Hotel by guests then or formerly in the Hotel, (ii) parcels, laundry, valet packages and other Assets of guests checked or left in the care of the Hotel by guests then or formerly in the Hotel (excluding, however, Assets in Hotel safe deposit boxes), (iii) all luggage or other Assets of guests retained by Seller as security for any unpaid accounts receivable, (iv) all safe deposit boxes in use at the Hotel, other than safes or lockboxes, if any, located inside individual guest rooms in the Hotel and (v) all items contained in the Hotel lost and found.
INDEMNIFICATION
1. Indemnification by Seller. From and after the Closing and subject to SECTION 11.3 and SECTION 11.4, Seller shall indemnify and hold Buyer, its Affiliates, members and partners, and the partners, shareholders, officers, directors, employees, representatives and agents of each of the foregoing (collectively, the “Buyer-Related Entities”) harmless from and against any and all costs, fees, expenses, damages, deficiencies, interest and penalties (including, without limitation, reasonable attorneys’ fees and disbursements) actually suffered or incurred by any such indemnified party in connection with any and all losses, liabilities, claims, damages and expenses (“Losses”), arising out of, or in any way relating to, (a) any breach of any representation or warranty of Seller contained in this Agreement or in any Closing Document and (b) any breach of any covenant of Seller which survives the Closing contained in this Agreement or in any Closing Document. Notwithstanding anything to the contrary contained herein, Seller shall have no liability or obligation to indemnify and hold Buyer-Related Entities harmless from any Losses to the extent such Losses results from or is related to any acts or omissions of any Manager or results from or is related to any acts or omissions of any of the Buyer-Related Entities. The provisions of this SECTION 11.1 shall survive the Closing without limitation.
2. Indemnification by Buyer. From and after the Closing, Buyer shall indemnify and hold Seller, OpCo, Manager, Asset Manager and any of their Affiliates, members and partners, and the partners, shareholders, officers, directors, employees, representatives and agents of each of the foregoing (collectively with Seller, the “Seller-Related Entities”) harmless from any and all Losses arising out of, or in any way relating to, (a) any breach of any representation or warranty by Buyer contained in this Agreement or in any Closing Document and (b) any breach of any covenant or obligation of Buyer which survives the Closing contained in this Agreement or in any Closing Document. The provisions of this SECTION 11.2 shall survive the Closing without limitation.
3. Limitations on Indemnification. Notwithstanding the foregoing provisions of SECTION 11.1, (a) Seller shall not be required to indemnify Buyer or any Buyer-Related Entities under this Agreement unless the aggregate of all amounts for which an indemnity would otherwise be payable by Seller under SECTION 11.1 or any other indemnity provisions of this Agreement exceeds the Basket Limitation and, in such event, Seller shall be responsible only for such amount in excess of the Basket Limitation, (b) in no event shall the liability of Seller with respect to the indemnification provided for in SECTION 11.1 or any other indemnity provisions of this Agreement exceed in the aggregate the Cap Limitation, and (c) if prior to the Closing, Buyer obtains or has knowledge of any inaccuracy or breach of any representation, warranty or covenant of Seller contained in this Agreement (a “Buyer Waived Breach”) and nonetheless proceeds with and consummates the Closing, then Buyer and any Buyer-Related Entities shall be deemed to have waived and forever renounced any right to assert a claim for indemnification under this Article XI for, or any other claim or cause of action under this Agreement, at law or in equity on account of any such Buyer Waived Breach.
4. Survival. The representations, warranties and covenants of Seller contained in this Agreement and the Closing Documents shall survive for a period of ninety (90) days after the Closing unless otherwise provided for in this Agreement.
5. Indemnification as Sole Remedy. If the Closing has occurred, the sole and exclusive remedy available to a party in the event of a breach by the other party to this Agreement of any representation, warranty, covenant or other provision of this Agreement or any Closing Document which survives the Closing shall be the indemnifications provided for under this Article XI, which indemnifications shall survive the Closing as provided in this Article XI without limitation.
DEFAULT AND TERMINATION
1. Seller’s Termination.
  1. THIS AGREEMENT MAY BE TERMINATED BY SELLER PRIOR TO THE CLOSING IF (I) ANY OF THE CONDITIONS PRECEDENT TO SELLER’S OBLIGATIONS SET FORTH IN SECTION 5.1 HAVE NOT BEEN SATISFIED OR WAIVED BY SELLER BY THE CLOSING DATE OR (II) THERE IS A MATERIAL BREACH OR DEFAULT BY BUYER IN THE PERFORMANCE OF ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT.
  2. IN THE EVENT THIS AGREEMENT IS TERMINATED PURSUANT TO SECTION 12.1(a), THIS AGREEMENT SHALL BE NULL AND VOID AND OF NO FURTHER FORCE OR EFFECT AND NEITHER PARTY SHALL HAVE ANY RIGHTS OR OBLIGATIONS AGAINST OR TO THE OTHER EXCEPT (I) FOR THOSE PROVISIONS HEREOF WHICH BY THEIR TERMS EXPRESSLY SURVIVE THE TERMINATION OF THIS AGREEMENT AND (II) AS SET FORTH IN SECTION 12.1(c).
  3. IN THE EVENT SELLER TERMINATES THIS AGREEMENT AS A RESULT OF A BREACH OR DEFAULT BY BUYER IN ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT, ESCROW AGENT SHALL IMMEDIATELY DISBURSE THE DEPOSIT TO SELLER, AND UPON SUCH DISBURSEMENT SELLER AND BUYER SHALL HAVE NO FURTHER OBLIGATIONS UNDER THIS AGREEMENT, EXCEPT THOSE WHICH EXPRESSLY SURVIVE SUCH TERMINATION. BUYER AND SELLER HEREBY ACKNOWLEDGE AND AGREE THAT IT WOULD BE IMPRACTICAL AND/OR EXTREMELY DIFFICULT TO FIX OR ESTABLISH THE ACTUAL DAMAGE SUSTAINED BY SELLER AS A RESULT OF SUCH DEFAULT BY BUYER, AND AGREE THAT THE DEPOSIT IS A REASONABLE APPROXIMATION THEREOF. ACCORDINGLY, IN THE EVENT THAT BUYER BREACHES THIS AGREEMENT BY DEFAULTING IN THE PERFORMANCE OF ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT, THE DEPOSIT SHALL CONSTITUTE AND BE DEEMED TO BE THE AGREED AND LIQUIDATED DAMAGES OF SELLER, AND SHALL BE PAID BY ESCROW AGENT TO SELLER AS SELLER’S SOLE AND EXCLUSIVE REMEDY HEREUNDER; PROVIDED, HOWEVER, THE FOREGOING SHALL NOT LIMIT BUYER’S OBLIGATION TO PAY TO SELLER ALL ATTORNEYS’ FEES AND COSTS OF SELLER TO ENFORCE THE PROVISIONS OF THIS SECTION 12.1 OR LIMIT BUYER’S INDEMNITY OBLIGATIONS WHICH SURVIVE A TERMINATION OF THIS AGREEMENT. THE PAYMENT OF THE DEPOSIT AS LIQUIDATED DAMAGES IS NOT INTENDED TO BE A FORFEITURE OR PENALTY, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER.

SELLER’S INITIALS: BUYER’S INITIALS:

Buyer’s Termination.
1. THIS AGREEMENT MAY BE TERMINATED BY BUYER PRIOR TO THE CLOSING IF ANY OF THE CONDITIONS PRECEDENT TO BUYER’S OBLIGATIONS SET FORTH IN SECTION 5.2 HAVE NOT BEEN SATISFIED OR WAIVED BY BUYER ON OR PRIOR TO THE CLOSING DATE FOR ANY REASON OTHER THAN BUYER’S BREACH OR DEFAULT UNDER THIS AGREEMENT, IN WHICH CASE, SUBJECT TO ARTICLE VII, ESCROW AGENT SHALL DISBURSE THE DEPOSIT TO BUYER, AS BUYER’S SOLE AND EXCLUSIVE REMEDY, AND UPON SUCH DISBURSEMENT THIS AGREEMENT SHALL BE OF NO FURTHER FORCE OR EFFECT, EXCEPT FOR THOSE PROVISIONS WHICH EXPRESSLY SURVIVE SUCH TERMINATION. IN THE EVENT OF BUYER’S BREACH OR DEFAULT UNDER THIS AGREEMENT, ESCROW AGENT SHALL DISBURSE THE DEPOSIT TO SELLER.
2. IF SELLER SHALL MATERIALLY DEFAULT IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT TO CAUSE THE SALE OF THE ASSETS AS OF THE LATER OF THE CLOSING DATE OR TEN (10) BUSINESS DAYS AFTER SELLER’S RECEIPT OF BUYER’S WRITTEN NOTICE THEREOF (AND SELLER HAS FAILED TO CURE WITHIN FIFTEEN (15) BUSINESS DAYS OF SUCH NOTICE OR THE THEN-SCHEDULED CLOSING DATE), BUYER, AS ITS SOLE AND EXCLUSIVE REMEDY, MAY EITHER (I) TERMINATE THIS AGREEMENT AND DIRECT ESCROW AGENT TO DELIVER THE DEPOSIT TO BUYER AND RETAIN THE DEPOSIT, AT WHICH TIME THIS AGREEMENT SHALL BE TERMINATED AND OF NO FURTHER FORCE AND EFFECT EXCEPT FOR THE PROVISIONS WHICH EXPLICITLY SURVIVE SUCH TERMINATION, OR (II) IF (A) SELLER’S DEFAULT CONSTITUTES A WILLFUL AND INTENTIONAL REFUSAL OR FAILURE TO CONVEY THE ASSETS AS PROVIDED IN THIS AGREEMENT FOR ANY REASON OTHER THAN A PROVISION OF THIS AGREEMENT THAT (1) PERMITS SELLER TO TERMINATE THIS AGREEMENT, (2) RELIEVES SELLER OF THE OBLIGATION TO CONVEY THE ASSETS OR (3) CONDITIONS SELLER’S OBLIGATION TO CONVEY THE ASSETS AND SUCH CONDITION HAS NOT BEEN SATISFIED, AND (B) BUYER HAS (1) WAIVED ALL CONDITIONS TO CLOSING FOR THE BENEFIT OF BUYER UNDER THIS AGREEMENT, (2) HAS DELIVERED TO ESCROW AGENT AND TITLE COMPANY THE DOCUMENTS, INSTRUMENTS AND OTHER ITEMS REQUIRED TO BE DELIVERED BY BUYER AT THE CLOSING, INCLUDING IMMEDIATELY AVAILABLE FUNDS ON ACCOUNT OF THE PURCHASE PRICE, TOGETHER WITH AN UNCONDITIONAL WRITTEN INSTRUCTION TO PROCEED TO THE CLOSING, AND (3) SELLER THEREAFTER FAILS OR REFUSES TO DELIVER TO ESCROW AGENT WITHIN FIVE (5) BUSINESS DAYS THEREAFTER THE DOCUMENTS AND INSTRUMENTS REQUIRED TO BE DELIVERED BY SELLER AT THE CLOSING, THEN BUYER MAY, IN LIEU OF EXERCISING THE REMEDY PROVIDED FOR IN SECTION 12.2(b)(I) (BUT NOT IN ADDITION THERETO), COMMENCE APPROPRIATE LEGAL PROCEEDINGS SEEKING TO ENFORCE SELLER’S OBLIGATION TO CONVEY THE ASSETS THROUGH SPECIFIC PERFORMANCE; PROVIDED, HOWEVER, THAT NO SUCH PROCEEDING FOR SPECIFIC PERFORMANCE SHALL NOT REQUIRE SELLER TO DO ANY OF THE FOLLOWING (UNLESS OTHERWISE EXPRESSLY REQUIRED OF SELLER BY THIS AGREEMENT): (X) CHANGE THE PHYSICAL CONDITION OF THE ASSETS OR RESTORE THE SAME AFTER FIRE, CASUALTY OR CONDEMNATION; (Y) EXPEND MONEY OR POST A BOND TO REMOVE A TITLE OBJECTION OR OTHER TITLE DEFECT OR CORRECT ANY MATTER SHOWN ON THE EXISTING SURVEY (EXCEPT AS SET FORTH IN SECTION 8.3(c)); OR (Z) SECURE ANY PERMIT, APPROVAL, CONSENT OR OTHER AGREEMENT OR INSTRUMENT FROM ANY THIRD PARTY NOT AFFILIATED WITH SELLER WITH RESPECT TO THE ASSETS OR SELLER’S CONVEYANCE OF THE ASSETS; PROVIDED, FURTHER, THAT THE REMEDY PROVIDED FOR IN THIS SECTION 12.2(b)(II) SHALL BE AVAILABLE TO BUYER ONLY IF BUYER COMMENCES SUCH PROCEEDING WITHIN NOT MORE THAN TEN (10) DAYS AFTER THE SCHEDULED CLOSING DATE. FAILURE TO FILE A SUIT FOR SPECIFIC PERFORMANCE WITHIN TEN (10) DAYS AFTER THE SCHEDULED CLOSING DATE SHALL BE DEEMED A WAIVER OF SUCH REMEDY. BUYER AND SELLER HEREBY ACKNOWLEDGE AND AGREE THAT IT WOULD BE IMPRACTICAL AND/OR EXTREMELY DIFFICULT TO FIX OR ESTABLISH THE ACTUAL DAMAGE SUSTAINED BY BUYER AS A RESULT OF SUCH DEFAULT BY SELLER, AND AGREE THAT THE REMEDY SET FORTH IN CLAUSE (I) ABOVE IS A REASONABLE APPROXIMATION THEREOF. ACCORDINGLY, IN THE EVENT THAT SELLER BREACHES THIS AGREEMENT BY DEFAULTING IN THE COMPLETION OF THE SALE, AND BUYER DOES NOT EXERCISE THE REMEDY SET FORTH IN CLAUSE (II) ABOVE, THEREBY LIMITING IT TO THE REMEDY SET FORTH IN CLAUSE (I) ABOVE, THE DELIVERY OF THE DEPOSIT TO BUYER SHALL CONSTITUTE AND BE DEEMED TO BE THE AGREED AND LIQUIDATED DAMAGES OF BUYER WHICH IS NOT INTENDED TO BE A FORFEITURE OR PENALTY, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO BUYER. BUYER AGREES TO, AND DOES HEREBY, WAIVE ALL OTHER REMEDIES AGAINST SELLER WHICH BUYER MIGHT OTHERWISE HAVE AT LAW OR IN EQUITY BY REASON OF SUCH DEFAULT BY SELLER. IN NO EVENT SHALL THE DEPOSIT BE DELIVERED TO BUYER PRIOR TO BUYER’S DELIVERY TO SELLER OF A COPY OF ALL THIRD PARTY INSPECTION REPORTS OBTAINED BY BUYER.

SELLER’S INITIALS: BUYER’S INITIALS:

REAL PROPERTY TAX REDUCTION PROCEEDINGS
1. Prosecution and Settlement of Proceedings. Seller reserves unto itself and shall have the right to initiate, prosecute and/or settle any tax reduction proceedings in respect of the Hotel relating to any period of Seller’s ownership of the Hotel; provided, however, that Seller shall not settle any tax reduction proceedings in respect of the Hotel relating to or affecting taxes attributable to the fiscal year in which the Closing occurs without Buyer’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Buyer shall reasonably cooperate with Seller in connection with the prosecution of any such tax reduction proceedings.
2. Application of Refunds or Savings. Any refunds or savings in the payment of taxes resulting from such tax reduction proceedings applicable to taxes payable during the period prior to the date of the Closing shall belong to and be the Assets of Seller, and any refunds or savings in the payment of taxes applicable to taxes payable from and after the date of the Closing shall belong to and be the Assets of Buyer. All attorneys’ fees and other expenses incurred in obtaining such refunds or savings shall be apportioned between Seller and Buyer in proportion to the gross amount of such refunds or savings payable to Seller and Buyer, respectively (without regard to any amounts reimbursable to tenants); provided, however, that neither Seller nor Buyer shall have any liability for any such fees or expenses in excess of the refund or savings paid to such party unless such party initiated such proceeding.
3. Survival. The provisions of this Article XIII shall survive the Closing without limitation.
MISCELLANEOUS
1. Use of McNeill Name. Buyer hereby acknowledges and agrees that neither Buyer nor any Affiliate, successor, assignee or designee of Buyer shall be entitled to use the names “McNeill”, “McNeill Hotel Investors”, “MHI”, “McNeill Hotel Company”, “MHC”, and any derivations thereof, in any way whatsoever. The provisions of this SECTION 14.1 shall survive the Closing and any termination of this Agreement without limitation.
2. Exculpation of Seller. Notwithstanding anything to the contrary contained herein, Seller’s shareholders, partners, members, the partners or members of such partners, the shareholders of such partners, members, and the trustees, officers, directors, employees, agents and security holders of Seller and the partners or members of Seller assume no personal liability for any obligations entered into on behalf of Seller and its individual assets shall not be subject to any claims of any person relating to such obligations. The foregoing shall govern any direct and indirect obligations of Seller under this Agreement. The provisions of this SECTION 14.2 shall survive the Closing or any termination of this Agreement without limitation.
3. Brokers.
  1. Seller represents and warrants to Buyer, as of the date hereof and as of the Closing, that it has dealt with no broker, salesperson, finder or consultant with respect to this Agreement or the transactions contemplated hereby other than Broker. Seller agrees to indemnify, protect, defend and hold Buyer harmless from and against all claims, losses, damages, liabilities, costs, expenses (including reasonable attorneys’ fees and disbursements) and charges resulting from Seller’s breach of the foregoing representation in this SECTION 14.3(a). Seller shall be responsible for the payment of any amounts due Broker. The provisions of this SECTION 14.3(a) shall survive the Closing and any termination of this Agreement without limitation.
  2. Buyer represents and warrants to Seller, as of the date hereof and as of the Closing, that it has dealt with no broker, salesman, finder or consultant with respect to this Agreement or the transactions contemplated hereby other than Broker. Buyer agrees to indemnify, protect, defend and hold Seller harmless from and against all claims, losses, damages, liabilities, costs, expenses (including reasonable attorneys’ fees and disbursements) and charges resulting from Buyer’s breach of the foregoing representations in this SECTION 14.3(b). The provisions of this SECTION 14.3(b) shall survive the Closing and any termination of this Agreement without limitation.
4. Confidentiality, Press Release and IRS Reporting Requirements.
  1. Buyer, and each of its respective Affiliates shall hold as confidential all information disclosed in connection with the transactions contemplated hereby and concerning Seller, the Assets, this Agreement and the transactions contemplated hereby and shall not release any such information to third parties without the prior written consent of the Seller, except (i) any information which was previously or is hereafter publicly disclosed (other than in violation of this Agreement or other confidentiality agreements with Seller or its Affiliates to which Buyer or Affiliates of Buyer are parties), (ii) to Buyer’s partners, advisers, underwriters, analysts, employees, Affiliates, officers, directors, consultants, lenders, accountants, legal counsel, title companies or other advisors of any of the foregoing, provided that they are advised as to the confidential nature of such information and are instructed to maintain such confidentiality and (iii) to comply with any law, rule or regulation (including without limitation those of the United States Securities and Exchange Commission). The foregoing shall constitute a modification of any prior confidentiality agreement that may have been entered into by the parties. The provisions of this SECTION 14.4 shall survive the Closing or the termination of this Agreement for a period of one year.
  2. After the Closing, Seller or Buyer may issue a press release with respect to this Agreement and the transactions contemplated hereby, provided that the content of any such press release shall be subject to the prior written consent of the other party hereto and in no event shall any such press release issued by Buyer disclose the identity of Seller’s direct or indirect beneficial owners by name or the consideration paid to Seller for the Assets.
  3. For the purpose of complying with any information reporting requirements or other rules and regulations of the IRS that are or may become applicable as a result of or in connection with the transaction contemplated by this Agreement, including, but not limited to, any requirements set forth in proposed Income Tax Regulation Section 1.6045-4 and any final or successor version thereof (collectively, the “IRS Reporting Requirements”), Seller and Buyer hereby designate and appoint Escrow Agent to act as the “Reporting Person” (as that term is defined in the IRS Reporting Requirements) to be responsible for complying with any IRS Reporting Requirements. Escrow Agent hereby acknowledges and accepts such designation and appointment and agrees to fully comply with any IRS Reporting Requirements that are or may become applicable as a result of or in connection with the transaction contemplated by this Agreement. Without limiting the responsibility and obligations of Escrow Agent as the Reporting Person, Seller and Buyer hereby agree to comply with any provisions of the IRS Reporting Requirements that are not identified therein as the responsibility of the Reporting Person, including, but not limited to, the requirement that Seller and Buyer each retain an original counterpart of this Agreement for at least four years following the calendar year of the Closing.
5. Escrow Provisions.
  1. Escrow Agent shall hold the Deposit in escrow in an interest-bearing bank account at a federally insured banking institution (the “Escrow Account”).
  2. Escrow Agent shall hold the Deposit in escrow in the Escrow Account until the Closing or sooner termination of this Agreement and shall hold or apply such proceeds in accordance with the terms of this SECTION 14.5(b). Seller and Buyer understand that no interest is earned on the Deposit during the time it takes to transfer into and out of the Escrow Account. At the Closing, the Deposit shall be paid by Escrow Agent to, or at the direction of, Seller. If for any reason the Closing does not occur and either party makes a written demand upon Escrow Agent for payment of such amount, Escrow Agent shall, within twenty-four (24) hours, give written notice to the other party of such demand. If Escrow Agent does not receive a written objection within five (5) Business Days after the giving of such notice, Escrow Agent is hereby authorized to make such payment. If Escrow Agent does receive such written objection within such five (5) Business Day period or if for any other reason Escrow Agent in good faith shall elect not to make such payment, Escrow Agent shall continue to hold such amount until otherwise directed by joint written instructions from the parties to this Agreement or a final judgment of a court of competent jurisdiction. However, Escrow Agent shall have the right at any time to deposit the Deposit with the clerk of the court of Tennessee. Escrow Agent shall give written notice of such deposit to Seller and Buyer. Upon such deposit Escrow Agent shall be relieved and discharged of all further obligations and responsibilities hereunder.
  3. The parties acknowledge that Escrow Agent is acting solely as a stakeholder at their request and for their convenience, that Escrow Agent shall not be deemed to be the agent of either of the parties, and Escrow Agent shall not be liable to either of the parties for act or omission on its part, other than for its gross negligence or willful misconduct. Seller and Buyer shall jointly and severally indemnify and hold Escrow Agent harmless from and against all costs, claims and expenses, including attorneys’ fees and disbursements, incurred in connection with the performance of Escrow Agent’s duties hereunder as well as the costs and expenses of defending against any claim or liability arising under this Agreement. The hold harmless and indemnification in this Section shall not be applicable in the event of Escrow Agent’s willful misconduct or gross negligence. This provision shall survive the Closing or earlier termination of this Agreement.
  4. Escrow Agent has acknowledged its agreement to these provisions by signing this Agreement in the place indicated following the signatures of Seller and Buyer.
6. Successors and Assigns and No Third-Party Beneficiaries. The stipulations, terms, covenants and agreements contained in this Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective permitted successors and assigns (including any successor entity after a public offering of stock, merger, consolidation, purchase or other similar transaction involving a party hereto) and nothing herein expressed or implied shall give or be construed to give to any Person, other than the parties hereto and such assigns, any legal or equitable rights hereunder.
7. Assignment. This Agreement may not be assigned by Buyer without the prior written consent of Seller. Any transfer of direct or indirect interests in Buyer shall be deemed to be an assignment of this Agreement by Buyer. Notwithstanding the foregoing, Buyer may designate an Affiliate that is majority owned and controlled by Buyer to which the Agreement will be assigned at the Closing, provided that Buyer provides Seller with a fully executed and enforceable assignment of this Agreement at least five (5) days prior to Closing and provided that (i) Buyer will continue to remain liable under this Agreement notwithstanding any such designation and no such assignment or designation shall limit, abrogate or release Buyer’s obligations hereunder, and (ii) any Buyer assignee (x) must, as of the date of such designation and as of the Closing Date, be able to make with the representations and warranties contained in this Agreement and (y) will be subject to acceptable “know your customer” and Anti-Terrorism Law searches to be conducted by Seller. In the event Buyer assigns its rights under this Agreement, Buyer shall be solely responsible for any additional realty transfer taxes assessed as a result thereof, if any, and shall pay such additional taxes at settlement and recording of the Deed. Seller shall have no liability for any realty transfer taxes, interest and penalties assessed based on any consideration greater than the Purchase Price set forth herein, and Buyer shall indemnify, defend and hold Seller harmless from any costs, liability or expense incurred by Seller in connection with an assignment of this Agreement by Buyer, including, without limitation, any transfer taxes and legal fees incurred by Seller in connection therewith.
8. Further Assurances. From time to time, as and when requested by any party hereto, the other party shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such further or other actions as such other party may reasonably deem necessary or desirable to consummate the transactions contemplated by this Agreement.
9. Notices. All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and shall be (i) personally delivered, (ii) delivered by express mail, Federal Express or other comparable overnight courier service, (iii) faxed or emailed, with telephone or written confirmation within one Business Day, or (iv) mailed to the party to which the notice, demand or request is being made by certified or registered mail, postage prepaid, return receipt requested, as follows:
  1. To Seller:

MHC Norcross, LLC

c/o McNeill Hotel Investors, LLC

1468 Kimbrough Rd., Suite 103

Germantown, TN 38138

ATTN: Phillip H. McNeill, Jr.

Email: __________________

Direct: __________________

Fax: __________________

with a required copy to:

Wyatt, Tarrant & Combs, LLP

6070 Poplar Avenue, Suite 300

Memphis, TN 38119-3907

ATTN: Sussan P. Harshbarger

Email: sharshbarger@wyattfirm.com

Direct: (901) 537-1114

Fax: (901) 537-1010

To Buyer:

[______________________________________]

______________________________

ATTN: __________________

Email: __________________

Direct: __________________

Fax: __________________

To Escrow Agent/Title Company

Fidelity National Title Group

Chicago Title Insurance Company

6060 Poplar Ave #LL37

Memphis, TN 38119

ATTN: Staci Blackwell

E-mail staci.blackwell@fntg.com

Direct: 901-786-6006

All notices (x) shall be deemed to have been given on the date that the same shall have been delivered in accordance with the provisions of this Section (for purposes of clarification, notices given by facsimile and email shall be deemed given on the date received), and () may be given either by a party or by such party’s attorneys. Any party may, from time to time, specify as its address for purposes of this Agreement any other address upon the giving of 10 days’ prior notice thereof to the other parties.

Entire Agreement. This Agreement, along with the exhibits and schedules hereto contains all of the terms agreed upon between the parties hereto with respect to the subject matter hereof, and all understandings and agreements heretofore had or made among the parties hereto are merged in this Agreement which alone fully and completely expresses the agreement of the parties hereto.
Amendments. This Agreement may not be amended, modified, supplemented or terminated, nor may any of the obligations of Seller or Buyer hereunder be waived, except by written agreement executed by the party or parties to be charged.
No Waiver. No waiver by either party of any failure or refusal by the other party to comply with its obligations hereunder shall be deemed a waiver of any other or subsequent failure or refusal to so comply.
Governing Law. This Agreement shall be governed by, interpreted under, and construed and enforced in accordance with, the laws of the State of Tennessee.
Submission to Jurisdiction. Each of Buyer and Seller irrevocably submits to the jurisdiction of (a) the Supreme Court of the State of Memphis, Tennessee and (b) the United States District Court located in Memphis, Tennessee for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby. Each of Buyer and Seller further agrees that service of any process, summons, notice or document by U.S. registered mail to such party’s respective address set forth above shall be effective service of process for any action, suit or proceeding in Tennessee with respect to any matters to which it has submitted to jurisdiction as set forth above in the immediately preceding sentence. Each of Buyer and Seller irrevocably and unconditionally waives trial by jury and irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (a) the Supreme Court of the State of Tennessee, Shelby and (b) the United States District Court located in Memphis, Tennessee, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
Severability. If any term or provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
Section Headings. The headings of the various Sections of this Agreement have been inserted only for purposes of convenience, are not part of this Agreement and shall not be deemed in any manner to modify, explain, expand or restrict any of the provisions of this Agreement.
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.
Acceptance of Deed. The acceptance of the Deed by Buyer shall be deemed full compliance by Seller of all of Seller’s obligations under this Agreement except for those obligations of Seller which are specifically stated to survive the delivery of the Deed or the Closing hereunder. The provisions of this SECTION 14.18 shall survive the Closing or any termination of this Agreement without limitation.
Construction. The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto.
Recordation. Neither this Agreement nor any memorandum or notice of this Agreement may be recorded by any party hereto without the prior written consent of the other party hereto. Buyer also agrees not to file any lis pendens or other instrument against the Assets in connection herewith. In furtherance of the foregoing, Buyer (i) acknowledges that the filing of a lis pendens or other evidence of Buyer’s rights or the existence of this Agreement against or encumbering the Assets could cause significant monetary and other damages to Seller, and (ii) hereby indemnifies Seller-Related Entities from and against any and all liabilities, damages, losses, costs or expenses (including without limitation attorneys’ fees and expenses) arising out of a breach of this SECTION 14.20. The provisions of this SECTION 14.20 shall survive the Closing or any termination of this Agreement without limitation.
WAIVER OF JURY TRIAL. SELLER AND BUYER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST ANOTHER PARTY ON ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT. THE PROVISIONS OF THIS SECTION 14.21 SHALL SURVIVE THE CLOSING OR ANY TERMINATION OF THIS AGREEMENT WITHOUT LIMITATION.
Time is of the Essence. Seller and Buyer agree that time is of the essence with respect to the obligations of Buyer and Seller under this Agreement.
Liquor Licenses. Prior to the Closing, Buyer shall use best efforts to obtain new liquor licenses and all other necessary permits (“Liquor Licenses”) for the sale, serving, and dispensing of alcoholic beverages (“Beverage Operations”) at the Hotel in the name of the Buyer or an entity designated by Buyer. In furtherance of the foregoing, to the extent permitted under Applicable Law, Buyer further shall use best efforts to obtain interim, temporary, or new Liquor Licenses for Beverage Operations at the Hotel immediately upon the Closing. Buyer shall be responsible for complying, at its sole cost and expense, with all statutes and regulations applicable to obtaining the Liquor Licenses or the interim, or temporary, Liquor Licenses, including, but not limited to, paying all filing or application fees, license and transfer fees, fees imposed by local governing bodies, issuance fees, sales and use taxes, and all other fees and expenses incurred in connection with the interim, temporary, or new Liquor Licenses. Notwithstanding the foregoing, none of the issuance of interim, temporary, or new Liquor Licenses to Buyer or its designee nor the ability of Buyer to conduct Beverage Operations at the Hotel shall be a condition to.
Prevailing Party. Should either party employ an attorney to enforce any of the provisions hereof (whether before or after Closing, and including any claims or actions involving amounts held in escrow) or to recover damages for the breach of this Agreement, the non-prevailing party in any final judgment agrees to pay the other party’s reasonable expenses, including reasonable attorneys’ fees and expenses in or out of litigation and, if in litigation, trial, appellate, bankruptcy or other proceedings, expended or incurred in connection therewith, as determined by a court of competent jurisdiction.
Anti-Terrorism Law. Each party shall take any actions that may be required to comply with the terms of the USA Patriot Act of 2001, as amended, any regulations promulgated under the foregoing law, the Executive Order, the other Anti-Money Laundering and Anti-Terrorism Laws, or any other Laws, regulations or executive orders designed to combat terrorism, drug-trafficking or money laundering, if applicable, to this Agreement. Each party represents and warrants to the other party that it is not an entity named on the List of Specially Designated Nationals and Blocked Persons maintained by the U.S. Department of Treasury (the “Government List”), as last updated prior to the date of this Agreement.
Calculation of Time Periods. Unless otherwise specified, in computing any period of time described herein, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is not a Business Day, in which event the period shall run until the end of the next day which is a Business Day.
Section 1031 Exchange. Buyer and Seller may acquire or sell the Land in connection with a 1031 tax deferred exchange. Seller and Buyer agree to cooperate with each other and will execute such documents as may reasonably be required by the exchanging party in order to effectuate such tax deferred exchanges, provided that neither party (a) will assume or be obligated to bear any liability or cost in connection with the tax deferred exchange of the exchanging party, and (b) shall have any obligation to take title to, or first acquire, any other property in connection with such qualified exchange. The exchanging party’s inability to obtain any benefits for a tax deferred exchange under Section 1031 of the Code will not relieve any party of any of its obligations under this Agreement. In no event shall any exchange pursuant to this Section result in a delay of the Closing Date.
Notice of Water Level Fluctuations. If the Hotel or any Property- Related Assets adjoin a lake, reservoir, or other impoundment of water that has a storage capacity of at least two thousand (2,000) acre-feet at the impoundment’s normal operating level, then the following notice applies:

NOTICE OF WATER LEVEL FLUCTUATIONS: The water level of the impoundment of water adjoining the Land fluctuates for various reasons, including as a result of: (1) an entity lawfully exercising its right to use the water stored in the impoundment; or (2) drought or flood conditions.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

100654861

IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the day and year first above written.

SELLER:

MHC Norcross, LLC,

a Tennessee limited liability company

By: McNeill Hotel Investors, LLC,

a Delaware limited liability company

Its: Manager

By:

Phillip H. McNeill, Jr.

Chief Executive Officer

SCHEDULE A

LEGAL DESCRIPTION OF LAND

SCHEDULE 2.1(c)

EXCLUDED FIXTURES, PERSONAL PROPERTY OR EQUIPMENT

SCHEDULE 2.2(c)

Purchase Price Allocation

	Purchase Price
Land	$______________
Building	$______________
Personal Property (OpCo)	$______________
Personal Property (Seller)	$______________
Site Improvements	$______________
Total	$______________

SCHEDULE 3.2(a)

OPERATING AGREEMENTS

VENDOR	TYPE OF GOODS OR SERVICE PROVIDED

*Master and/or National Agreements

that are not assignable unless specifically noted otherwise.

SCHEDULE 3.2(c)

LIST OF LEASES

SCHEDULE 3.2(e)

LITIGATION

EXHIBIT A

FORM OF ASSIGNMENT OF CONTRACTS AND LEASES

ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND LEASES dated as of _____________________, 20____, by and among ______________________, a ___________ limited liability company, having an address at _____________________________________________________________ (“Assignor”), and _________________________, a ______________________ having an address at ___________________________________ (“Assignee”).

Background

This Assignment and Assumption of Contracts and Leases is being executed and delivered pursuant to that certain Purchase and Sale Agreement dated as of _____________________, 20______ (as assigned and/or amended, the “Purchase Agreement”) between _______________________________, as seller, and __________________________, as buyer related to the Hotel commonly known as: _________________________________________________________ (the “Hotel”). All capitalized terms used but not defined herein has the meanings ascribed to them in the Purchase Agreement.

Assignment and Assumption

In consideration of Tenten ($10.00) Dollars in hand paid by Assignee, the receipt and sufficiency of which is hereby acknowledged, Assignor does hereby assign, transfer and set over unto Assignee, all of Assignor’s right, title and interest in and to:

all Operating Agreements, including but not limited to, those set forth on Schedule A attached hereto (collectively, the “Contracts”);
all Equipment Leases, including but not limited to, set forth on Schedule B attached hereto (collectively, the “Equipment Leases”);
all Leases set forth on Schedule C attached hereto (collectively, the “Leases”);
to the extent assignable, all of Assignor’s right, title and interest in and to all warranties and guarantees, if any, relating to the personal property located on the Land or in the buildings and other improvements located thereon (collectively, the “Warranties”); and
all Bookings at the Hotel for dates after the date hereof.

TO HAVE AND TO HOLD, the same unto Assignee, its successors and assigns, from and after the date hereof, subject to the terms, covenants, conditions and provisions contained in the Agreements.

Assignee hereby assumes the performance of all of the terms, covenants and conditions of the Contracts, Equipment Leases, Leases, and Bookings on the Assignor’s part to be performed thereunder from and after the date hereof and will perform all of the terms, covenants and conditions arising or accruing from and after the date hereof, all with the same force and effect as though the Assignee had signed such Contracts, Equipment Leases, Leases, and Bookings as a party named therein.

This Assignment is made without warranty or representation, express or implied, by, or recourse against, Assignor of any kind or nature whatsoever except as expressly provided in the Purchase Agreement.

This Assignment may be executed in multiple counterparts, each of which shall constitute an original and all of which shall constitute one and the same agreement.

[Remainder of page intentionally blank]

IN WITNESS WHEREOF, the Assignor and Assignee have duly executed this instrument as of the day first above written.

ASSIGNOR:

___________________________,

a ________________________

By:

Name:

Title:

ASSIGNEE:

___________________________,

a ________________________

By:

Name:

Title:

Schedules:

Schedule A Contracts

Schedule B Equipment Leases

Schedule C Lease

EXHIBIT B

FORM OF DEED

This Instrument Prepared by and return to:

_______________________

ATTN: _______________________

For Informational Purposes: Tax Parcel No.: ____________________________

_______________________Space above this line for recording data_______________________

STATE OF

COUNTY OF

SPECIAL WARRANTY DEED

This SPECIAL WARRANTY DEED (this “Deed”) is made as of the _____ day of _______________, 20______, by and between ______________________________, a _______________ limited liability company, whose post office address is _________________________________________ _________________________ (“Grantor”) and ______________________________________, a _________________________________, whose address is ___________________________ ________________________________________ (“Grantee”).

WITNESSETH:

For Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor does hereby GRANT, BARGAIN, SELL and CONVEY unto Grantee, its successors and assigns, with special warranty, the land described on Exhibit A attached hereto and incorporated herein by reference (the “Assets”).

TOGETHER with all the tenements, hereditaments and appurtenances thereto belonging or in anywise appertaining.

To Have and to Hold, the same in fee simple forever.

The Assets is not the homestead of the Grantor.

GRANTOR’S WILL WARRANT and forever defend the right and title to the above-described real property unto the Grantees against the claims of all person, claiming by, through or under Grantor’s, but not further or otherwise.

Any and all provisions of this Warranty Deed notwithstanding, the Assets conveyed herein and all improvements thereon are being conveyed in “AS IS, WHERE IS WITH ALL FAULTS” condition with no repairs to be made by Grantor and no warranty by Grantor as to the fitness or defects of any nature or kind as to the Assets and any improvements on the Assets to Grantee, their successors, heirs and assigns. Grantor has not made and does not hereby make (except as expressly set forth in this deed) any representations or warranties of any nature, kind or character whatsoever, express or implied, with respect to the Assets or its improvements, its condition, (environmental, or otherwise), uses, fitness for any particular purpose, income to be derived therefrom or expenses to be incurred with respect thereto, and Grantor hereby disclaims and renounces any such representations or warranties.

IN WITNESS WHEREOF, this Deed has been executed as of the date first above written.

IN WITNESS WHEREOF, the grantor has caused these presents to be executed in its name, and its corporate seal to be hereunto affixed, by its proper officers thereunto duly authorized, the day and year first above written.

Signed, sealed and delivered in our presence:

[___________________________], a [_______________]limited liability companyBy: McNeill Hotel Investors, LLC, a Delaware limited liability companyIts: Manager
By: Phillip H. McNeill, Jr. Chief Executive Officer

STATE OF TENNESSEE

COUNTY OF SHELBY

The foregoing instrument was acknowledged before me this _____ day of __________________, 20_______ by Phillip H. McNeill, Jr., as Chief Executive Officer of McNeill Hotel Investors, LLC, a Delaware limited liability company, the Manager of _________________________________, a ______________ limited liability company, the Grantor. He is personally known to me or who has produced driver license(s) as identification.

My Commission Expires:
	Printed Name: _________________________

EXHIBIT “A”

LEGAL DESCRIPTION

EXHIBIT C

FORM OF BILL OF SALE

___________________________, a _______________________________ having an address at _______________________________________________________________ (hereinafter “Seller”), in consideration of Ten ($10.00) Dollars in hand paid by _________________________________ having a mailing address at ________________________________________________________ (hereinafter referred to as “Buyer”), the receipt and sufficiency of which is hereby acknowledged, does hereby sell, grant, assign, convey, transfer, set over, and quit-claim unto Buyer, its successors and assigns, all of Seller’s right, title and interest in and to the FF&E, the Property and Equipment, the Inventories, and the Retail Merchandise other than with respect to any Excluded Assets (all of the Assets and interests hereinbefore described are hereinafter referred to as the “Assets”).

TO HAVE AND TO HOLD the Assets unto Buyer, its successors and assigns forever.

This Bill of Sale is made without warranty or representation, express or implied, by, or recourse against, Seller of any kind or nature whatsoever except as expressly provided in the Purchase and Sale Agreement dated as of _________________________, 20____ between Seller and Buyer (as assigned and/or amended, the “Purchase Agreement”) related to the Hotel commonly known as:____________________________________________________. Capitalized terms used but not defined herein has the meanings ascribed to them in the Purchase Agreement

This Bill of Sale has been duly executed by Seller as of the ____ day of ______________, 20_____.

SELLER:

By:

Name:

Title:

EXHIBIT D

FORM OF ASSIGNMENT AND ASSUMPTION OF INTANGIBLE PROPERTY

ASSIGNMENT AND ASSUMPTION OF INTANGIBLE PROPERTY dated as of ___________________, 20_____, by and among ___________________________________, a ____________________________________________, having an address at ________________________________________ (“Assignor”), and ______________________ having an address at ___________________________________ (“Assignee”).

Background

This Assignment and Assumption of Intangible Property is being executed and delivered pursuant to that certain Purchase and Sale Agreement dated as of _____________________, 20_____ related to the Hotel commonly known as: ___________________________________________ (as assigned and/or amended, the “Purchase Agreement”) between Assignor, as seller, and Assignee, as buyer. All capitalized terms used but not defined herein has the meanings ascribed to them in the Purchase Agreement.

Assignment and Assumption

In consideration of Ten ($10.00) Dollars in hand paid by Assignee, the receipt and sufficiency of which is hereby acknowledged, Assignor does hereby assign, transfer and set over unto Assignee, other than with respect to any Excluded Assets, all of Assignor’s right, title and interest in and to:

to the extent Assignor’s rights and interests therein are assignable, the Intangible Property; and
to the extent assignable, the Licenses and Permits.

TO HAVE AND TO HOLD, the same unto Assignee, its successors and assigns, from and after the date hereof, subject to the terms, covenants, conditions and provisions contained therein.

IN WITNESS WHEREOF, the Assignor and Assignee have duly executed this instrument as of the day first above written.

ASSIGNOR:

By:

Name:

Title:

ASSIGNEE:

By:

Name:

Title:

EXHIBIT E

FORM OF SELLER TITLE AFFIDAVIT

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AGREEMENT OF PURCHASE AND SALE

NOTICE OF WATER LEVEL FLUCTUATIONS: The water level of the impoundment of water adjoining the Land fluctuates for various reasons, including as a result of: (1) an entity lawfully exercising its right to use the water stored in the impoundment; or (2) drought or flood conditions.

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AGREEMENT OF PURCHASE AND SALE

NOTICE OF WATER LEVEL FLUCTUATIONS: The water level of the impoundment of water adjoining the Land fluctuates for various reasons, including as a result of: (1) an entity lawfully exercising its right to use the water stored in the impoundment; or (2) drought or flood conditions.

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