UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED JUNE 30, 1998.
Commission File Number:
333-264
Exact name of Registrant as specified in its charter:
South Seas Properties Company Limited Partnership
State or other Jurisdiction of incorporation or
organization:
Ohio
I.R.S. Employer Identification Number:
59-2541464
Address of Principal Executive Offices:
12800 University Drive, Suite 350
Fort Myers, FL 33907
Registrant?s Telephone Number, including Area Code:
(941) 481-5600
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90
days.
X YES NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has
filed all documents and reports required to be filed by
Sections 12, 13 or 15(d) of the Securities Exchange Act of
1934 subsequent to the distribution of securities under a
plan confirmed by a court.
YES NO
Amendment No. 1
This Amendment No. 1 on Form 10-Q/A to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998 (the "Report") is being filed to amend
Exhibit 10.1 to the Report as previously filed with the
Securities and Exchange Commission (the "Commission"). An
amended Exhibit 10.1 is filed herewith.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
ROBERT M. TAYLOR RICHARD E. KRICHBAUM
CHAIRMAN OF T&T RESORTS, L.C. VICE PRESIDENT OF FINANCE
GENERAL PARTNER OF S.S. RESORT MANAGEMENT L.C.
SOUTH SEAS PROPERTIES GENERAL PARTNER OF
COMPANY LIMITED PARTNERSHIP SOUTH SEAS RESORTS
(SIGNATURE) COMPANY, L.P.
AUGUST 14, 1998 (SIGNATURE)
AUGUST 14, 1998
TIMOTHY R. BOGOTT VIRGINIA S. BROOKS
PRESIDENT CORPORATE CONTROLLER
S.S. RESORT MANAGEMENT, L.C. S.S. RESORT MANAGEMENT,
GENERAL PARTNER OF SOUTH SEAS L.C.
RESORTS COMPANY, L.P. GENERAL PARTNER OF SOUTH
(SIGNATURE) SEAS RESORTS COMPANY, L.P.
AUGUST 14, 1998 (SIGNATURE)
AUGUST 14, 1998
EXHIBIT INDEX
The following exhibits are included in this Quarterly Report
on Form 10-Q/A:
* Filed herewith
+ Previously filed with and incorporated by reference
to the exhibit of the same number to the Company's
Quarterly Report on Form 10-Q filed August 14, 1998.
EXHIBIT 10.1 - MERISTAR (FORMERLY CAPSTAR) ASSET
PURCHASE AGREEMENT *
EXHIBIT 10.2 - MERISTAR (FORMERLY CAPSTAR)
CONTRIBUTION AGREEMENT +
EXHIBIT 10.3 - MERISTAR (FORMERLY CAPSTAR) FIRST
AMENDMENT TO CONTRIBUTION AGREEMENT +
EXHIBIT 10.4 - PERCENTAGE LEASE AGREEMENT DATED AS OF
FEBRUARY 19, 1998 AMONG BOYKIN HOTEL PROPERTIES, L.P.
AS LESSOR, SOUTH SEAS ESTERO ISLAND, LTD., AS LESSEE,
AND SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
AS GUARANTOR +
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is
made as of April 3,1998, among South Seas Properties Company
Limited Partnership, an Ohio limited partnership ("SSPC"),
South Seas Resorts Company Limited Partnership, a Florida
limited partnership ("SSRC") Safety Harbor Management
Company, Ltd., a limited partnership ("SHMC"), and South Seas
Estero Island, Ltd., a Florida limited Partnership ("SSEI";
SSPC, SSRC, SHMC and SSEI are referred to herein individually
as a "Seller" and collectively as "Sellers") and CapStar
Hotel Company, a Delaware corporation ("CapStar" or
"Purchaser").
RECITALS:
A. SSPC owns, among other things, the hotel, resort
and other properties listed below (individually, an "SSPC
Owned Property" and, collectively, the "SSPC Owned
Properties"):
1. Sundial Beach & Tennis Resort, Sanibel Island, Florida
("Sundial");
2. Sanibel Inn, Sanibel Island, Florida ("Sanibel Inn");
3. Seaside Inn, Sanibel Island, Florida ("Seaside");
4. Plantation View Shopping Center, Captiva Island,
Florida ("Plantation View"); and
5. Certain vacant land located on Captiva Island, Florida
("Shirley's Parcel").
B. SHMC holds a leasehold interest in the property
commonly known as the Safety Harbor Resort & Spa, Safety
Harbor, Florida ("Safety Harbor") , pursuant to the terms of
the Safety Harbor Ground Lease, and owns in fee simple
certain vacant land adjacent to Safety Harbor (the "SHMC
Land");
C.SSRC currently manages the Best Western Pink Shell
Beach Resort, Estero Island, Florida ("Pink Shell"), pursuant
to the terms of the Pink Shell Management Agreement;
provided, however, that: (i) the owner of the Pink Shell has
entered into a chase agreement (the "Pink Shell Purchase
Agreement") pursuant to which the Pink Shell will be sold to
Boykin Hotel Properties, L.P., an Ohio limited partnership
(the "Prospective Purchaser"), (ii) SSEI has entered into a
purchase agreement pursuant to which, upon the consummation
of the transactions contemplated by the Pink Shell Purchase
Agreement, SSEI will purchase and the Prospective Purchaser
will sell substantially all of the furniture, fixtures and
equipment located at the Pink Shell (the "Pink Shell FF&E
Purchase Agreement") for a purchase price equal
to.$2,000,000,(the "Pink Shell FF&E Consideration"), and
(iii) SSPC has entered into a lease (the "Pink Shell Lease")
with the Prospective Purchaser pursuant to which SSPc will
lease the Pink Shell from the Prospective Purchaser for a
period of ten (10) years commencing upon consummation of the
transaction contemplated by the Pink Shell Purchase Agreement;
D. Sellers are engaged, directly or indirectly,
in the following related businesses: (i) owning, operating
and managing the SSPC owned Properties and the SHMC Land
(which are referred to herein individually as a "Property",
and collectively as the Properties"), (ii) managing the Pink
Shell under the Pink Shell Management Agreement, (iii)
operating and managing the Safety Harbor under the SHMC Ground
Lease; (iv) operating the Vacation Planning Center pursuant
to the Vacation Planning Center Lease; and (v) managing the
short-term rental and leasing of individual condominium units
and private residences at Sundial and Sanibel Inn, (all of
the foregoing are hereafter collectively referred to as the
"Business");
E. Each Seller desires to sell to CapStar all of
the right, title and interest in and to substantially all of
the assets, properties and rights (contractual or otherwise)
and business of such Seller with respect to the Business, on
the terms and conditions set forth herein;
F. Concurrently with the execution of this
Agreement, SSPC, SSRC, South Seas Resort Limited Partnership,
an Ohio limited partnership ("SSRLP"), Marco SSP, Ltd., a
Florida limited partnership ("Marco"), and South Seas &
Captiva Properties, L.P., a Florida limited partnership
("SS&CP"), Capstar Hotel Company and CapStar Management
Company, L.P. have entered into a separate Contribution
Agreement (the "Other Agreement") providing for the
contribution of certain assets of SSPC, SSRC, SSRLP, Marco
and SS&CP to CapStar Management Company, L.P.; and
G. CapStar Hotel Company and American General
Hospitality Corporation ("AGT") have signed definitive
agreement pursuant to which, among other things, CapStar will
merge with and into AGT (the "Merger").
NOW, THEREFORE, in consideration of the mutual
covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, each Seller and CapStar agrees as
follows:
ARTICLE I
DEFINITIONS; DESCRIPTION OF PURCHASED ASSETS;
EXCLUDED PROPERTY
Section 1.1 Definitions. Capitalized words not
otherwise defined in this Agreement have the meanings set
forth in Exhibit A.
Section 1.2 Description of Assets. Upon the terms
and subject to the conditions set forth in this Agreement,
at the Closing, each Seller shall convey, sell, transfer,
assign and deliver to CapStar and Capstar shall purchase and
take all right title and interest of each Seller in and to
the Purchased Assets' but expressly excluding the Excluded
Assets.
Section 1.3 -Excluded Assets. There shall be
excluded from the assets, properties, rights (contractual and
otherwise) and business to be sold transferred, assigned and
delivered to CapStar pursuant to Section 1.2 the assets,
Properties, rights (contractual and otherwise) and business
set forth on schedule (the "Excluded Assets").
Section 1.4 Non-Assiqnment of Certain Property.
Notwithstanding anything to the contrary in this Agreement,
to the extent that the assignment hereunder of any of the
Purchased Assets shall require the consent of any other party
(or in the event that any of the same shall be non-
assignable), neither this Agreement nor any action taken
pursuant to its provisions shall constitute an assignment or
an agreement to assign if such assignment or attempted
assignment would constitute a breach thereof or result in the
loss or diminution in the value of such Purchased Asset;
provided, however, that in each such case, Sellers shall use
commercially reasonable efforts to obtain the consent of such
other party to an assignment thereof to CapStar.
ARTICLE II
ASSUMPTION OF CERTATN LIABILITIES, LIABILITIES NOT ASSUMED
Section 2.1 Assumption of Certain Liabilities.
CapStar shall assume and be responsible for the timely
satisfaction or performance, as the case may be, of the
following: (i) all Liabilities with respect to the Properties
and the Purchased Assets (including, without limitation, the
Contracts and the Leases) arising or accruing on or after the
Closing Date; provided, however, that in no event will
CapStar be responsible for the payment of the Pink Shell FF&E
Consideration; and (ii) any Liabilities described herein to
the extent CapStar has received a credit against the Purchase
Price therefor (collectively, the "Assumed Liabilities").
Section 2.2 Liabilities Not Assumed. Except for
the Assumed Liabilities, CapStar shall not by execution and
performance of this Agreement assume or otherwise be responsible
for any Liabilities of Sellers or with respect to the
Purchased Assets (the "Excluded Liabilities").
ARTICLE III
PURCHASE PRICE; PAYMENT OF PURCHASE PRICE
Section 3.1 Purchase Price. In consideration for
the Purchased Assets, CapStar shall pay to Sellers, in the
manner set forth in Section 3.2 below, Forty-Four Million
Five Hundred Thousand Dollars ($44,500,000), plus or minus
the adjustments and prorations called for in Article XII and
elsewhere in this Agreement (the "Purchase Price").
Section 3.2 Payment of Purchase Price. On the
terms and subject to the conditions of this Agreement, on the
Closing Date, CapStar shall assume the Assumed Liabilities
and pay to SSPC, by wire transfer of immediately available
funds to an account designated by SSPC, the Purchase Price.
Section 3.3 Allocation. Sellers and CapStar hereby
agree that the Purchase Price shall be allocated for
purposes, of this Agreement and for federal, state and local
tax purposes in the manner agreed to between Sellers and
CapStar prior to the Closing. Sellers and CapStar shall file
all federal, state, local and foreign tax returns, including
Internal Revenue Form 8594 in accordance with any such
allocation agreed to by the parties, as the same may be
adjusted by Article XII. The provisions of this Section
3.3 shall survive the Closing.
ARTICLE IV
DUE DILIGENCE PERIOD
Section 4.1 Due Diligence Period.
(a) CapStar shall have until 5:00 p.m., Eastern
Standard Time, on April 13, 1998 (the "Due Diligence
Period"), to determine whether in its sole and absolute
discretion it will proceed with this transaction. If CapStar
fails to notify SSPC in writing prior to the expiration of
the Due Diligence Period that CapStar has elected not to
proceed with this transaction, CapStar shall be deemed to
have irrevocably elected to proceed with this
transaction.
(b) Subject to the remaining provisions of this
Section 4.1, during the Due Diligence Period, Sellers shall
give CapStar access to the Purchased Assets (in the case of
the Pink Shell and Safety Harbor, to the extent Sellers are
not otherwise restricted from providing such access by the
fee owners of such properties). Sellers shall furnish to
CapStar as promptly as reasonably practicable during the Due
Diligence Period all materials, documents and information
concerning the
Purchased assets as CapStar may reasonably request, to the
extent the same exist and are in the possession or control of
Sellers. CapStar agrees that no Seller shall have to
undertake any tests, studies or investigations in discharging
its obligations under this Section 4.1(b).
(c) CapStar shall have the right, at its cost and
expense, to perform or cause to be performed, any structural,
engineering and environmental tests, studies and investigations
deemed necessary by CapStar; provided, however, that such
tests, studies and investigations undertaken by CapStar or
its employees, agents or representatives (collectively, the
'CapStar Representatives") shall be conducted only: (i) upon
not less than. forty-eight (48) hours, prior notice to SSPC;
(ii) during normal business hours of SSPC; and (iii) with
SSPC's prior written approval (which approval shall not be
unreasonably withheld) All of CapStar's activities under this
Section 4.1 shall be coordinated through Richard E. Krichbaum
or his designee. CapStar shall conduct its activities under
this Section 4.1 in a manner so as not to unreasonably
interfere or otherwise unreasonably disrupt the Business,
operation of the Properties, operation of Safety Harbor or
the Employees or guests of Sellers. Notwithstanding any
other provision of this Section 4.1 to the contrary, CapStar
shall not perform any drilling, boring or similar invasive
testing without Richard E. Krichbaum's prior written consent.
CapStar shall not, without the prior written consent of
Richard E. Krichbaum, (i) disclose the nature or purpose of
its activities to anyone other than CapStar Representatives
and Robert M. Taylor, Richard E. Krichbaum, Timothy R. Bogott
or Judy Emens, or (ii) disrupt Sellers, Employees or guests.
CapStar agrees to indemnify and hold harmless Sellers, their
respective employees and partners from and against any and
all losses, damages, claims, costs and expenses (including
legal fees and expenses) to the extent caused by CapStar or
the CapStar Representatives arising from any inspection
activities undertaken under this Section 4.1. CapStar, at its
own cost and expense, shall restore any damage to the
Property caused by any of the tests, studies or
investigations made by CapStar or the CapStar
Representatives. Any information obtained CapStar or the
CapStar Representatives under this Section 4.1 shall be
subject to the confidentiality provisions of Section 8.3(a)
of this Agreement. The indemnification obligations and other
obligations of CapStar in this Section 4.1 shall survive
termination
of this Agreement and the Closing.
(d) Sellers and CapStar have caused the Title Company
to furnish to CapStar the title insurance commitments listed on
Schedule 4.1(d) issued by the Title Company covering each parcel
of Real Property, binding the Title Company to issue ALTA Form
B1970
Owners Policies of Title Insurance, in favor of CapStar,
together with copies of all documents identified in such title
insurance commitments as exceptions to title (the "Title
Commitments"). Sellers have delivered or made available to
CapStar copies of the existing land surveys listed on Schedule
4.l(d) with respect to each parcel of Real Property (the
"Existing Surveys"). CapStar shall have until 5:oo p.m., Eastern
Standard Time, on April 13, 1998, to notify SSPC and the Title
Company of any restrictions, reservations, limitations,
easements, conditions, defects or encumbrances (together
herein called "Title Defects") disclosed in the Title
Commitments which are objectionable to CapStar. If CapStar
so notifies SSPC of a Title Defects, SSPC shall have until
5:00 p.m., Eastern Standard Time, on April 14, 1998 (the
"Reply Period") in which to cure or remove or commit to cure
or remove such Title Defects. Upon expiration of the Reply
Period, the Title Company shall notify SSPC and CapStar as to
whether or not it is then in a position to insure over the
Title Defects or issue its policies of title insurance
(collectively, the "Title Policies") without showing as
exceptions the Title Defects. If the Title Company shall
notify the parties that it will issue the Title Policies,
this transaction shall be consummated in accordance with the
terms and provisions of this Agreement. If the Title Company
shall notify the parties that it will not issue the Title
Policies with the Title Defects removed or insured over, this
Agreement shall, at CapStar's option, thereupon be
terminated, void and of no further force and effect, the
Escrow Agent shall thereupon return to CapStar the documents
Previously deposited by it, and the parties shall be fully
released and discharged from any liability or obligation
hereunder. The items set forth in the Title Commitments to
which CapStar does not object or to which CapStar has
objected prior to expiration of the Due Diligence Period but
which the Title Company has agreed in writing to remove or
insure over are hereafter referred to as "Permitted Title
Exceptions." Permitted Title Exceptions shall also include any
purchase money security interests granted in connection with
the purchase of any of the personal property that is the
subject of the Equipment Leases being assumed by CapStar
hereunder. Notwithstanding anything to the contrary contained
in this Agreement, with the exception of the Permitted Title
Exceptions and any items for which CapStar has received a
credit against the Purchase Price under Section 12.1 hereof,
Sellers shall cause all monetary liens or encumbrances
affecting the Properties and disclosed in the Title
Commitments (or incurred after the effective time of the
Title Commitments) to be removed on or prior to Closing.
ARTICLE V
SELLERS REPRESENTATIONS
AND WARRANTIES
To induce CapStar to enter into this Agreement and
to consummate the transaction contemplated hereby, each
Seller hereby makes the following representations and
warranties with respect to itself and the Purchased Assets in
which such Seller has an ownership interest (directly or
indirectly), upon which each Seller acknowledges and agrees that
CapStar is entitled to rely:
Section S. Organization and Power of Sellers. Each
Seller is duly formed or organized (as the case may be),
Validly existing and in good standing or full force and effect in
the
jurisdiction of its formation or organization, and is
qualified to do business in all jurisdictions in which such
qualification is necessary (except where such failure to qualify
would not
result in a Material Adverse Effect), and has all requisite
corporate or partnership (as the case may be) power and
authority to own, lease and operate its property and to
carry on its business as now being conducted.
Section 5.2 Authority and Binding Obligation
Seller has full corporate or partnership (as the case may be)
power and authority to execute and deliver this Agreement and
all documents now or hereafter to be executed and delivered
by such Seller pursuant to this Agreement and to perform all
obligations arising under this Agreement and under such other
documents. The execution, deliver and performance of this
Agreement by each Seller has been duly and validly authorized
by all necessary corporate or partnership (as the case may
be) action on the part of such Seller, and this Agreement has
been duly executed and delivered by such Seller. This
Agreement and such other documents, when executed and
delivered, will each constitute the legal, valid and binding
obligations of each Seller, enforceable against each Seller in
accordance with their respective terms.
Section 5.3 Consents and Approvals; No Conflicts.
With respect to each Seller: (i) there is no legal
impediment to such Seller's consummation of the transaction
contemplated by this Agreement; and (ii) no filing with, and
no permit, authorization, consent or approval of, any
Governmental Authority is necessary for the consummation by
such Seller of the transaction contemplated by this
Agreement. Neither the execution and delivery of this
Agreement by such Seller, nor the consummation by such Seller
of the transaction contemplated hereby, nor compliance by
such Seller with any of the provisions hereof will: (i) result
in a violation of any provision of such Seller's
organizational or governing documents in which such Seller
owns an interest; (ii) violate any Applicable Law to such
Seller is subject; or (iii) result in a violation or breach of,
or constitute a default under, any Material Contract.
Section 5.4 Title to Purchased Assets.
a) Schedule 1.2(a) sets forth a true, correct and
complete legal description of each parcel of the Land and the
correct and complete address of each Property. SSPC (with
respect to Sanibel Inn, Seaside, Sundial, Plantation View and
Shirley's Parcel), and SHMC (with respect to the SHMC Land),
owns fee simple title to such Real Prooerty, which in
each case shall be free and clear of all mortgages, pledges,
liens, security interests, encumbrances and restrictions of
any nature whatsoever as of the Closing Date, subject only to
the Permitted Title Exceptions. SHMC has good title to the SHMC
Ground Lease and SSPC has good title to the Pink Shell Management
Agreement, the Pink Shell Lease.
(b) Each Seller has good title to the Personal
Property used by it in connection with its business, which in
each case shall be free and clear of all mortgages, pledges,
liens, security interests, encumbrances and restrictions of
any nature whatsoever as of the Closing Date, subject only to
the Permitted Title Exceptions.
Section 5.5 Absence of Changes. Since December 31,
1997, there has not been any material adverse change in the
business, assets, properties, liabilities, revenues or
financial condition of any Seller or the Properties, except
for changes due to the seasonal nature of the Business.
Section 5.6 Financial Statements and Reports; Absence of
Undisclosed Liabilities.
(a) Schedule 5.6 sets forth: (i) the audited and
unaudited consolidated financial statements of SSPC, (ii) the
unconsolidated unaudited financial statements of SSPC and
SHMC, and (iii) certain other financial reports that have
been furnished previously to CapStar by Sellers (the
"Financial Statements"). The Financial Statements are true
and correct in all material respects, have been prepared from
and are in accordance with the books and records of each
Seller in substantial conformity with GAAP applied on a
consistent basis throughout the periods involved, and fairly
present in all material respects the financial condition of
each Seller as of the dates stated and the results of
operations for the periods then ended (subject, in the case
of unaudited interim consolidated financial statements, to normal
year-end adjustments). SSPC has filed all required forms,
reports and documents with the Securities and Exchange
Commission required to be filed by it pursuant to the
Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder, all of which have
complied in all material respects with the applicable
requirements of the Securities Exchange Act of 1934, as amended,
and such rules and regulations (hereinafter collectively
referred to as the "SSPC Reports"). None of the SSPC
Reports, at the time filed, contained any untrue statement of
a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. The financial statements of SSPC included
in
the SSPC Reports complied as to form in all material respects
with
applicable accounting requirements and the published
regulations of the Securities and Exchange Commission
applied on a consistent basis (except as otherwise noted in
such financial statements) and present fairly in all material
respects the financial position, results of operations, cash
flows and changes in financial position of SSPC and its
consolidated subsidiaries as of the dates stated or the
periods indicated, subject, in the case of unaudited interim
consolidated financial statements, to normal year-end
adjustments. CapStar acknowledges
that under the terms of the SHMC Ground Lease the annual
lease payment is $1,200,000 and that a portion of the lease
payment will be credited against the option to purchase
contained in the SHMC Ground Lease if the option is
exercised. Because SHMC expects to exercise the option,
SSPC has capitalized a portion of the annual lease payment
and SSPC's Financial Statements reflect lease expense of
approximately $135,000 for the calendar year 1997.
(b) To Sellers, Knowledge, no Seller has any
Liabilities which are required to be disclosed on a balance
Sheet under GAAP, other than (i) the Liabilities shown in the
Financial Statements, (ii) Liabilities disclosed in any of
the Schedules attached hereto or to the Other Agreement, and
(ii) Liabilities which have arisen since December 31, 1997 in the
ordinary
course of business (none of which relate to any breach of
contract, tort, or violation of Applicable Law).
Section 5.7 Compliance with Applicable Law. Except
as disclosed in Schedule 5.7, to Sellers' Knowledge, no Seller
is in violation of any Applicable Law.
Section 5.8 Litigation. Except as disclosed in Schedule 5.8,
there is no action, suit or proceeding pending
or, to Sellers' Knowledge, threatened against any Seller, the
Properties or Safety Harbor in any court or before any
Governmental Authority which: (i) seeks to enjoin or
prohibit, or otherwise questions the validity or,,
enforceability of this Agreement or any action taken or to be
taken by Sellers in connection with this Agreement, or (ii)
if adversely determined would have a Material Adverse Effect.
Section 5.9 Insurance. Schedule 5.9 sets forth a
true, correct and complete list and description of each
insurance policy maintained by any Seller with respect to the
Properties and Safety Harbor (the "Insurance Policies"). To
Sellers'
Knowledge, all of the Insurance Policies are valid and in
full force and effect.
Section 5.10 Labor and Employment Matters. To
Sellers, Knowledge, each Seller has complied in all respects
with all Applicable Laws relating to employment matters.
There are no collective bargaining or other labor agreements
to which any Seller is bound with respect to employees of any
Seller.
Section 5.11 Taxes. All Taxes imposed upon any Seller
the respect to the Business or the Purchased Assets which
are payable by the applicable Seller have been paid in
full and are current. No Seller has received any written
notice that such Taxes are overdue or have not been paid. To
Sellers, Knowledge, each Seller has duly filed all federal,
state and local tax returns and tax reports required to be
filed by it under Applicable Law, all such returns and
reports are true and correct in all material respects and all
Taxes and other
charges arising under such returns and reports have been
fully paid or will be timely paid.
Section 5.12 Environmental Matters. Schedule
5.12 sets forth a true, correct and complete list of all
environmental assessments, reports and studies with respect
to the Land prepared within the last three (3) years by or on
behalf of, or otherwise in the possession or control of, any
Seller, and Sellers have delivered or made available to
CapStar a copy of each such assessment, report and study.
Except as disclosed in Schedule 5.12, there are no pending
Environmental Claims, and to Sellers, Knowledge, no
Environmental Claims are threatened with respect to the Land.
Section 5.13 ERISA. (a) The only "employee
pension benefit plans", as defined in Section 3 of ERISA,
maintained by Sellers are those disclosed in Schedule 5.13
(the "Pension Plans"), and the only "employee welfare benefit
plans", as defined in Section 3 of ERISA, maintained by any
Seller are those disclosed in Schedule 5.13 (the "Welfare
Plans"; the Pension Plans and the Welfare Plans are
hereafter collectively referred to as the "Plans") .
(b) Except as disclosed in Schedule 5.13, a
favorable determination letter has been issued by the
Internal Revenue Service with respect to the tax-qualified
status under Section 401(a) of the Code for each Pension
Plan. Since the date of the most recent determination
letter, each Pension Plan has been timely amended to comply
with all Applicable Laws with respect to such Pension Plan,
and a request for a new determination letter has been filed
with the Internal Revenue Service within the time required
to preserve the rights of the sponsor of such Pension Plan to
adopt such amendments to such Pension Plan as may be required
by the Internal Revenue Service in order to secure a
favorable determination letter with respect to such Pension
Plan's continued tax-qualified status.
(c) No Seller has incurred any material liability
to the Internal Revenue Service, the U.S. Department of
Labor, the Pension Benefit Guaranty Corporation or any
participant or former participant with respect to the Plans,
other than routine claims for benefits.
(d) Except as disclosed in Schedule 5.13: (i) the
Plans have been maintained, operated and administered in all
material respects in accordance with their respective terms
and the provisions of ERISA and the Code, and (ii) there are
no accumulated funding deficiencies (as defined in Section
302 of ERISA and 412 of the Code) with respect to any Plan.
Section 5.14 Permits. Except as disclosed in Schedule
5.14, to Sellers' Knowledge, each Seller holds all Permits
required in conducting its business and operating its
properties, each of which to Sellers' Knowledge is valid and
in full force and effect and no provision or condition
of which has been breached or violated.
Section 5.15 Leases. Schedule 1.2(i) and
Schedule 1.2(j) set forth a true, correct and complete list of
the Tenant Leases and Seller Leases, respectively, and
Sellers have delivered or made available to CapStar a true,
correct and complete copy of the Tenant Leases and Seller
Leases, and true, correct and complete sample forms of the
Condominium Lease Agreements. No Seller has received any
written notice of any default under any of the Leases, and to
Sellers' Knowledge, no event has occurred or circumstance
exists which, with notice or the passage of time, would
result in a default thereunder. Schedule 5.15 sets forth a
true, correct and complete list of the Condominium Lease
Agreements as of March 31, 1998, including the units covered
by such Condominium Lease Agreements, the dates such
Condominium Lease Agreements were entered into and the names
of the other parties thereto.
Section 5.16 Contracts. Schedule 5.16 sets forth a
true, correct and complete list of all Equipment Leases
(indicating therein which Equipment Leases constitute Capital
Leases) and all Material Contracts in effect as of the date
hereof, and Sellers have delivered or made available to
CapStar a true, correct and complete copy of the Equipment
Leases, Material Contracts, Management Agreements and
Memberships. No Seller has received any written notice of
any default under any of the contracts, and to Sellers,
Knowledge, no event has occurred or circumstances exist which,
with notice or the passage of
time would result in a default thereunder. Schedule 5.16 sets
forth a true, correct and complete list of all Contracts and
Leases
that require aggregate remaining payments in excess of Two
Hundred Thousand Dollars ($200,000) and that require by
their express terms the consent of the other party thereto in
connection with the assignment thereof to CapStar as
contemplated by this Agreement. CapStar acknowledges that
only the consents listed as deliveries under Section 9.2
shall constitute a condition to CapStar's obligations
hereunder.
Section 5.17 Foreign Person. No Seller is a
"foreign person" for purposes of the withholding
provisions of Sections 1445 and 7701 of the Code.
Section 5.18 Finders and Investment Brokers.
Except for NationsBanc Montgomery Securities LLC, no broker,
finder or financial adviser has acted directly or indirectly
as such for Sellers in connection with the transaction
contemplated by this Agreement, or is entitled to any fee or
commission in connection with this Agreement or the
transaction contemplated hereby.
Section 5.20 SHMC Ground Lease. SHMC has
delivered or made available to CapStar a true, correct and
complete copy of the SHMC Ground Lease. No Seller has
received any written notice of any default under the SHMC
Ground Lease, and to Sellers, Knowledge, no event has
occurred or circumstance exists which, with notice or the
passage of time, would result in a default thereunder.
Section 5.21 Trademarks. Schedule 5.21 sets forth
a true, correct and complete list of each registered
trademark, tradename, symbol and logo used by Sellers in
connection with the Business (the "Proprietary Rights").
Sellers are the sole and exclusive owners of all right, title
and interest in and to all Proprietary Rights. The
Proprietary Rights do not infringe upon any trademark,
tradename, symbol or logo of any third party and, to the best
of Sellers, Knowledge, none of the Proprietary Rights are
being infringed upon by any person, firm, corporation or
other legal entity.
Section 5.22 Refurbishment Program at Sundial.
SSPC has the right, pursuant to the terms of Condominium
Lease Agreements or the Refurbishment Program Promissory
Notes Receivable, to offset against rent due and owing
individual condominium owners under the Condominium Lease
Agreements the amount of any payment to SSPC under any
Refurbishment Program Note Receivable (as defined in Section
12.4(d)) that is not paid to SSPC when the same is due and
payable.
CAPSTAR ACKNOWLEDGES AND AGREES THAT, SUBJECT TO
THE PROVISIONS OF THIS AGREEMENT, CAPSTAR IS TAKING THE
PURCHASED ASSETS AND THE PROPERTIES ON AN AS-IS, WHERE-IS
BASIS WITH ALL FAULTS AND THAT, EXCEPT AS EXPRESSLY SET FORTH
IN THIS ARTICLE V, NO SELLER MAKES ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW
OR OTHERWISE, INCLUDING, BUT IN NO WAY LIMITED TO, ANY
WARRANTY OF CONDITION,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE AS TO THE
PURCHASED ASSETS AND THE PROPERTIES. CAPSTAR REPRESENTS
THAT IT IS ENGAGED IN THE BUSINESS OF HOTEL AND RESORT
PROPERTIES INVESTMENT, OWNERSHIP AND OPERATION AND AS OF THE
CLOSING DATE, IT HAS BEEN GIVEN FULL AND COMPLETE ACCESS TO
THE PURCHASED ASSETS AND THE PROPERTIES FOR ALL INSPECTIONS
AND REVIEWS THAT IT HAS DESIRED TO CONDUCT IN PERSON AND
THROUGH THEIR RESPECTIVE AGENTS, EMPLOYEES OR REPRESENTATIVES
AND IT WILL BE FAMILIAR WITH THE PURCHASED ASSETS
AND THE PROPERTIES AND WILL HAVE MADE SUCH INDEPENDENT
INVESTIGATIONS AS IT DEEMS NECESSARY OR APPROPRIATE
CONCERNING THE PURCHASED ASSETS AND THE PROPERTIES.
Each of the representations and warranties
contained in this Article V and its various subparagraphs are
intended for the benefit of CapStar and may be waived in
whole or in part by CapStar, but only by an instrumental in
writing signed by CapStar. All rights and remedies arising
i-n connection with the untruth or inaccuracy of any such
representations and warranties shall
12
survive the Closing of the transaction contemplated hereby
for the period set forth in Section 11.1 hereof unless
CapStar has Knowledge prior to Closing of the untruth or
inaccuracy of any representation or warranty and CapStar
nevertheless elects to close this transaction.
ARTICLE VI
CAPSTAR'S REPRESENTATIONS AND WARRANTIES
To induce Sellers to enter into this Agreement and
to consummate the transaction contemplated hereby, CapStar
hereby makes the J'-ollowing representations and warranties,
upon which CapStar acknowledges and agrees that Sellers are
entitled to rely:
Section 6.1 Organization and Power. CapStar is
duly formed or organized (as the case may be), validly
existing and in good standing or full force and effect in the
jurisdiction of its formation or organization and is
qualified to do business in all jurisdictions in which such
qualification is necessary (except where such failure to
qualify would not result in a Material Adverse Effect) and
has all requisite corporate or partnership (as the case may
be) power and authority to own, lease and operate its
property and to carry on its business as now being conducted.
Section 6.2 Authoritv and Binding Obliqation.
CapStar has full corporate or partnership (as the case may
be) power and authority to execute and deliver this Agreement
and all documents now or hereafter to be executed and
delivered by CapStar pursuant to this Agreement and to
perform all obligations arising under this Agreement and
under such other documents. The execution ' ' delivery and
Derformance of this Agreement by CapStar has been duly and
validly authorized by all necessary corporate or partnership
(as the case may be) action on the part oLc CapStar and this
Agreement has been duly executed and delivered by CapStar.
This Agreement and such other documents, when executed and
delivered, will each constitute the legal, valid and binding
obligations of CapStar, enforceable against CapStar in
accordance with their respective te=s.
Section 6.3 Consents and A-p-orovals; No
Conflicts. There is no legal impediment to consummation by
CapStar of the transaction contemplated by th@-s Agreement,
and (ii) no filing with, and no pe=it, authorization, consent
or approval of, any Governmental Authority or other third
idarty is necessary for the consummation by CapStar of the
transaction contemplated by this Agreement. Neither the
execution and delivery of this Agreement by CapStar, nor the
consummation by CapStar of the transaction contemplated
hereby, nor compliance by CapStar with any of the provisions
hereof will: (i) result in a violation of any provision of
the organizational or governing documents of Ca,pStar; (ii)
violate any Applicable Law to which CapStar is
13
subject; or (iii) result in a violation or breach of or
constiti-,te a default under any contract, agreement, note,
bond,
mortgage, indenture, license, lease, franchise, permil- or o-
her
L
- -
i,nstrumenL-- or obligation to which Ca-oStar is a party or
by which any of CapStar's properties are boun@.
Section 6.4 Liticration. There is no claim,
litigation, proceeding or investigation pending, or to
CapStar's Knowledge, threatened, which seeks to enjoin or
prohibit, or otherwise questions the validity or
enforceability of this Agreement or any action taken or to be
taken by CapStar in connection with this Agreement.
Section 6.5 Finders and Investment Brokers. All
negotiations relating to this Agreement and the transaction
contemplated by this Agreement have been carried on without
the involvement of any person or entity acting on behalf of
CaiDStar in such a manner as to give rise to any valid claim
against any Seller for any broker's fee, finder's fee or
similar compensation.
Each of the representations and warranties
contained in this Article VI and its various subparagraphs is
intended for the benefit of Sellers and may be waived in
whole or in part by Sellers, but only by an instrument in
writing signed by Sellers. All rights and remedies arising
in connection with the untruth or inaccuracy of any such
representations and warranties shall survive the Closing of
the transaction contemplated hereby for the period set forth
in Section 11.1 hereof, unless Sellers have Knowledge prior
to Closing of the untruth or inaccuracy of any representation
or warranty, and Sellers nevertheless elect to close this
transaction.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions Precedent to the
Obligations of Both CaDStar and-Sellers. The respective
obligations o@L Capstar and Sellers hereunder are subject to
the satisfaction at or prior to the Closing Date of the
following conditions precedent:
(a) Adverse Proceedinqs. No preliminary or
pe=anent injunction or other order, decree or ruling issued
by a court of co=etent jurisdiction or by a Governmental
Authority nor any statute, rule, --egulation or executive
order promulgated or enacted by any Governmental Authority
shall be in effect which would: (i) make the consummation of
the transaction contemplated hereby illegal, or (ii)
otherwise prevent consummation of the transaction
contemplated hereby.
(b) Consu=ation of Transaction Contem-Dlated by
the Other Agreement. The transaction contemplated by the
Other Agreement shall have been consummated or shall be
consummated
14
simultaneously with the consummation o'L the transaction
contemplated hereby.
Section 7.2 Additional Conditions As to CapStar's
OblicTations. CapStar's obligations hereunder are also
subject to the satisfaction on or prior to the Closing Date
of the following conditions precedent:
(a) Sellers' Deliveries. Sellers shall have
delivered to or for the benefit of CapStar, on or before the
Closing Date, all of the documents recruited of Sellers
pursuant to Section 9.2.
.(b) Representations and Warranties. All of the
re7oresent,itions and warranties made in Article V of this
Agreement shall be true and correct in all material respects
when made (without taking into account any qualification as
to Knowledge) and, unless such representation or warranty is
made as of a specific date, at and as of the Closing Date as
if made at and as of such time (without taking into account
any qualification as to Knowledge), and Sellers shall have
executed and delivered to CapStar a certificate to the
foregoing effect.
(c) Covenants and Obliaations. Sellers shall have
perfo=ed in all material respects all of their covenants and
other obligations under this Agreement, and Sellers shall
have executed and delivered to CapStar a certificate to the
foregoing effect.
(d) Title Policies. The Title Company shall he
ready, willing and able to issue the Title Policies insuring
in CapStar fee simple title to each parcel of Real Property
with gap coverage from Sellers through the date of recording,
subjec-L only to the Permitted Title ExceDtions.
(e) Liauor Licenses. (i) CapStar or its designee
shall have obtained valid liquor licenses for all Properties
and Safety -@arbor either (A) through the transfer of
existing licenses (if pe--missi-ble under Applicable Law) or
(E) through the Issuance of new licenses, or (ii) Sellers and
CapStar or its designee shall have entered into an interim
arrangement allowing CapStar or its designee to sell liquor
at the Properties and Safety Harbor until licenses are
obl@ained by CaDStar or its designee.
(f) Material Adverse Chanue. From the date of
expiration of the Due Diligence Period, there shall not have
occurred any materi-al adverse change in the condition of the
Purchased Assets or the operation of the Properties, except
for changes due to the seasonal nature of the Business and
except for any matter that may arise after the expiration of
the Due Diligence Period under Article X of this Agreement.
is
Each o'L the conditions set forth in this Section
7.2 is intended for the benefit o@L CapStar; provided,
however, that if CaDStar consummates the transaction
contemplated by this Agreement without the benefit of one or
more of -Lhe foregoing conditions having been satisfied,
CapStar shall be deemed to have waived any such condition or
conditions.
Section 7.3 As to Sellers' Obligations. Each
Seller's obligations hereunder are subject to the
satisfaction on or prior to the Closing Date of the following
conditions precedent:
(a) CapStar's Deliveries. CapStar shall have
delivered to or for the hene-fit of Sellers, on or before the
Closing Date, all of the documents required of CapStar
pursuant to Section 9.3.
(b) Representations and Warranties. All of
representations and warranties made in Article VI of this
Agreement shall be true and correct in all mal--erial
respects when made (without taking into account any
qualification as to Knowledge) and, unless such
representation or warranty is made as of a specific date, at
and as of the Closing Date as if made at and as of such time
(without taking into account any crualif ication as to
Knowledge), and CapStar shall have executed and delivered to
Sellers a certificate to the foregoing effect.
(c) Covenants and OblicTations - CapStar shall
have performed in all material respects all of its covenants
and other obligations under this Agreement, and CapStar shall
have executed and delivered to Sellers a certificate to the
foregoing effect.
(d) Receipt of Purchase Price. Sellers shall have
received the Purchase P--ice, as adjusted pursuant to Article
XII, and all other sums required to be paid by CapStar
hereunder.
Each of the conditions set forth i-n this Section
7.3 is intended for the benefit o@' Sellers; provided,
however, that if Sellers consummate the transaction
contemplated by this Agreement without the benefit of one or
more of the foregoing conditions having been satisfied,
Sellers shall be deemed to have waived any such condition or
conditions.
ARTICLE VIII
COVENANTS
Section 8.1 Mutual Covenants. CaoStar and Sellers
mutually covenant as follows:
(a) Covenants Against Disclosure; Public
Anno=cements. CapStar and Sellers shall keep conf idential
and not disclose to any person or entity the terms,
conditions and provisions of thi-s Agreement; provided,
however, that: (i) CapStar and Sellers s,hall make a joint
public announcement
16
relating to the transaction contemplated hereby
simultaneously with the announcement o@L the transaction
contemplated by the other Agreement, (ii) each parl'-y may at
any time after execu-Lic)n hereof disclose the terms,
conditions and provisions of this Agreement as required under
Applicable Law (including, wi--Lhout limitation, SEC Laws),
and (iii) each party may at any t ime a@ter
L
execution hereof disclose the terms, conditions and -
provisions of this Agreement to persons on a "need to know"
basis, such as thei-r respective officers, directors,
employees, attorneys, accountants, engineers, surveyors,
consultants, lenders, partners, investors, potential lessees
and bankers and such other third parties whose assistance is
required in connection with the consummation of this
transaction.
(b) Additional Agreements. Subject to the terms
and conditions provided in this Agreement, CapStar and each
Seller agrees to use their commercially reasonable efforts to
take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary, proper or advisable to
consummate and make effective as promptly as practicable the
transaction contemplated by this Agreement and to cooperate
with one another in connection with the foregoing, including
using its commercially reasonable efforts to obtain all
necessary consents, approvals and authorizations as are
required to be obtained from third parties or under
Applicable Law, to defend all lawsuits or other legal
proceedings challenging this Agreemen-L or the consummation
of the transaction contemplated hereby, to cause to be lifted
or rescinded any injunction or restraining order or other
order adversely affecting the ability of the parties to
consummate the transaction contemplated hereby, and to effect
all necessary registrations and filings.
(c) Assiq=ent and Ass=Dtion of Sanibel Ea=-Out
Aareement. At the Time of Closing, SSPC shall assign and
deliver to CapSta-- and CapStar shall assume and -Lake from
SSPC the EarnOut Agreement, dated as of January 1, 1995 (as
amended by Amendment No. I to the Earn-Out Agreement dated
October 11, 1996), between Sanibel Resort Hotel Limited
Partnership and SSPC (the "Earn-Out Agreement'')- SSPC agrees
to fund an escrow account, with a mutually agreeable escrow
agent pursuant to the terms of an escrow agreement
satisfacto--y in form and substance to CapStar and SSPC, in
the amounl-- of $700,000 (the "Sanibel Escrow Amount"). The
Sanibel Escrow shall be used to fund the Earn-Out Amount (as
defined in -L-he Earn-Out Agreement) if and when due and
Dayable. SSPC agrees to pay the difference between the Earn-
Out Amount that is due and uayable and the Sanibel Escrow
Amount. To the extent the Sanibel Escrow Amount is greater
than the Earn-Out Amount, the excess shall be refunded to
SSPC within three (3) days after the payment of the Earn-Out
Amount to Sanibel Resort Hotel Limited Partnership.
Section 8.2 Covenants of Sellers. Sellers hereby
covenant with CapStar as follows:
17
(a) Continuance of Business; Maintenance of
rrom the date hereof unl--il the Closing Date, Sellers shall
Operate the Business and main-Lain and OiDerate each Property
in the Ordinary Course of Business. Without limiting the
generality of the foregoing: (i) no Seller will sell,
exchange, assign, -Lransfer, convey, lease or otherwise
dispose of all or any part of the Purchased Assets or any
interesl-- therein except for Fixtures and Tangible Personal
Property, Consumables and Supply inventories which are sold
or consumed in the Ordinary Course of Business; (ii) each
Seller will keep all Contracts, Leases and Permits to which
it is a party in full force and effect, will pay all charges
when due under such agreements (unless being contested in
good fai-th) and will perform all of its obligations under
such agreements in the Ordinary Course of Business; (iii) no
Seller will enter into any material contracts, licenses,
easements or other agreements relating to the Purchased
Assets which will obligate CapStar or be a charge or lien
against the Purchased Assets, except those that will be
discharged on or before the Closing Date, those entered into
in the Ordinary Course of Business which are necessary to
continue the operations of the Properties and Safety Harbor
in the ordinary Course of Business or -Lhose which are
terminable without penalty on sixty (60) days' notice; (iv)
each Seller will cause its respective Property to be operated
and maintained in the manner in which it is being operated
and maintained as of the date of this Agreement, which
undertaking includes, but is not limited to, maintaining
Fixtures and Tangible Personal Property, Consumables and
Suvply Inventories in those quantities and at those levels
present as of the date of this Agreement (subject to normal
adjustments to take into account the seasonal nature of the
Business) and entering into bookings in the Ordinary Course
of Business; (v) SSPC will Dromptly notify CapStar o'L any
matter arising Drior to the Closing which could reasonably be
expected to have a Material Adverse Effect (including,
without limitation, the commencement o'L any litigation or
Droceeding or any notice of a violation of AiDplicable Laws
issued @y any governmental or quasi-governmental authority;
(vi) SSPC will promptly notify CapStar of any actual or
Droposed change in the assessed value of the ProDerties or
any portion of the Properties (including any tentative or
preliminary assessment) and of the institution or proposed
institution of any pr I oceeding (whether formal, informal,
judicial or administrative) relal-ing to any such change or
proposed change; and (vi-i) no Seller will take any action
with respecl- to the contesting or resolution of the taxable
assessed value of the Land and Imorovements without the pr@or
written consent of CaDStar, whic@ consent shall not be
unreasonably withheld.
(b) Licruor Licenses. Sellers shall use all
reasonable efforts -Lo cause to be -Lransferred to CapStar or
its designee, all liquor licenses and alcoholic beverages
licenses currently i-n use i-n connection with the Business
and operation of the Properties and Safe-Ly Harbor. To that
end, Sellers and CapStar
18
shall cooperate each wi-th the other, and each shall execute
such transfer forms, license apvli-caL--i-ons and other
documents as may be necessary to effect such trans@Ler. If
permitted under Applicable Law, the narties shall execute and
file all necessary applications and papers wik--h the a-
oproldriate liquor and alcoholic beverage authorities prior
to the Closing, to the end that the issuance of new licenses
shall take effect, if possible, on the Closing Date,
simultaneously with Closing. If not so permitted, then the
parties agree each with the other that they will promptly
execute all aD'Dlications and other documents required by the
liquor authorities in order to effect the issuance of new,
licenses at the earliest da-Le possible consistent with
Applicable Law in order that all liquor licenses may be
issued to Ca-oStar or its designee at the earliest possible
time. If under Applicable Law the new licenses cannot be
issued until after the Closing of the transaction
contemplated hereby, then Sellers covenant and agree that
they will use reasonable efforts to enable CapStar to keet)
the bars and lounges and liquor facilities at the Im-
orovements open between the Closing Date and the time when
the new liquor licenses actually become effective, by
exercising management and supervision of such facilities
under the existing licenses under a management agreement to
be executed between Sellers and CaoStar (or its designee) in
a form reasonably agreed to between Sellers and cavstar,
until such time as new liquor licenses can be issued (but in
no event longer than six (6) months from the Clos@-ng Date);
provided, however, that CapS,--ar shall indemnify and hold
Sellers harmless from any liabilities, damages, claims, dosts
or expenses (including reasonable attorneys, fees)
encountered in connection with such operations during said
period of time and CapStar shall maintain commercial general
liability insurance (including dram shop liability) i,-l the
amount of Ten Mi-llion Dollars ($10,000,000) in favor of
Sellers. The provisions ci@ this Section 8.2(b) shall
survive the Closing.
(c) Employee Matters '. The employment of the Employees
shall be terminated by SSRC and S.@C at the Time of Closing.
(d) Capital improvement Projects. In connection
with any Projec-L- CaiDital Expenditure undertaken by any
Seller after the date of execution of this Agreement, each
Seller agrees as .Lollows: to submit plans and specifications
therefor to CapStar for its review and approval (which
aDDroval shall not he unreasonably withheld or delayed); (ii)
to complete such projects in accordance with the plans and
specifications therefor; (iii) to complete such projects in a
good and workmanlike manner, in timely fashion and usi-ng
good materials; and (iv) to complete such projects in
accordance with all A-oDlicable Laws. At the Time of
Closing, Sellers shall deliver to CapStar a report detailing
each Project Capital ExDenditure undertaken by Sellers, the
work comnleted i-n connection with each Project Capital
Expenditure, the amount spent (or committed to be spen-) in
connection with each Project CaDital Expenditure and the
work, if
19
any, needed to be comvieted in connection with each Project
Canital Expendi-ture.
Section 8.3 Covenants of CaT)Star. CaDStar hereby
covenants with Sellers as 'Lollows:
(a) Confidential Info=ation. Neither CapStar nor
any of its agents or representatives shall use for their own
bene'Lit (exce,ot in connection with this transaction and as
required by SEC Laws) and shall hold in stric-L confidence
and not disclose any data and information relating to the
financial statements,-
conditions and operations of Sellers that is confidential
in
nature and not generally known to the public (the
"Confidential
Inf o=a-Li-on"). If the transaction contemplated by this
Agreement
is not consummated for any reason, CapStar shall return to
Sellers within five (5) business days of the termination of
this Agreement for any reason all data, information and any
other written material obtained by CapS-Lar or its agents and
representatives from Sellers in connection with this
transaction and any copies, summaries or extracts thereof,
and except as noted herein, shall refrain from disclosing any
of the Confidential Information -Lo any third party or using
any of the Confidential Info=ati-on 'Lor its own benefit or
that of any other person or entity. This Section 8.3(a)
shall survive termination of this Agreement.
(b) 7-mployee Matters. On the Closing Date,
CapStar
shall: (i) offer Initial employment to all Management
Level Em@loyees; provided, that CapStar may at any time prior
to June 1, 1998, designate in writing to SSPC up to ten (10)
Management Level EmDloyees that CapStar shall not be required
to offer employment; and (ii) offer initial employment to
such other EmDloyees as CaDStar so desires; provided,
however, that CaDStar shall o'Lfer e=@-oyment to a sufficient
number of such otherEmvloyees to prevent Sellers from
incurring liability under the Worker AdjusL-ment and
Retraining Notification Act, 29 U.S.C. 2101 et sea (the "WARN
Act"), and CapStar shall indemnify and hold @ar;l-ess Sellers
@Lrom and against any claims, penalties, damages, losses,
liabilities and expenses incurred by Sellers under the WARN
Act. The Management Level Employees and the other Employees
who accept such offers of employment by CaDStar are re'Lerred
to herein as the "Transferred Emoloyees". Subject to the
penultimate sentence of this Section 8.3(h), L-he parties
acknowledge tha-L- all Transferred Employees shall be subject
to such te=s and conditions of employmen-L- as CapSL--ar may
set or establish, including, but not limited to, such matters
as wages, hours and working conditions. The Transferred
Employees shall receive credit -Lcrom Ca-oStar for years of
service (time worked) with Sellers for all vurposes
(including, without limitation, compensation, vacation,
severance, options, bonuses and all pension or welfare plans
of CaDSta--)- Notwithstanding any Drovision of this Section
8.3(b) to the contrary, CaDStar agrees that for the one year
period commencing on the Closing Date all
2 0
Management Level Employees whose employment is te--mi-nated
by CapStar without cause shall be paid one week of severance
pay for each year ol-@ credited service such Em-oloyee has
with Sellers and CapStar or any a@'filiate of CapStar. The
provisions of this Section 8.3(h) shall survive the Closing.
(c) Prolect Car>ital Exmenditures. CapStar
acknowledges that it has received Sellers' proposed list of
Project Capital Expenditures in connection with its due
diligence e'Lforts. Promptly after execution of this
Agreement (but in any event within 20 days after execution of
this Agreement), CanStar shall evaluate all proposed Project
Capital Expenditures of Sellers L--o determine a final scope
and schedule for the Project CaDital Expenditures. If
Sellers undertake any Project Capital Expenditures that have
been approved by CapStar ("A-oproved ProjecL-- Capital
Expenditures"), the Purchase Price shall be increased, as
contemplated by Section 12.4 hereof, by the amount spent by
Sellers on the Approved Project Capital Ex-oenditures. If
CapStar does not aidvrove a Project Capital Ex-oen@iture,
Sellers shall be under no obligation -Lo undertake such
Projec-L Ca-oital Ex-oenditure. If CapStar fails to
undertake its evaluation of the Project Capital ExiDenditures
as required under this Section 8.3(c) and deliver to SSPC its
determination of the final scope and schedule for the Project
Capital Expenditures within the time period set forth i-h
thi-s Section 8.3(h), CapStar shall be deemed to have
approved all the Project Capital Expenditures submitted to
CapStar.
ARTICLE IX
CLOSING
Section 9.1 Closincr. The Closi-ng shall occur
simultaneously with the closing ol-@ the transaction
contemplated .by this Other Agreement. As more particularly
described below, at the Clos@-ng L--he parties will meet: (i)
to execute all of the documents required to be delivered in
connection with the transaction contemplated hereby (the
"Closing Documents,,); (ii) initiate the wire transfer of the
Purchase Price; and (iii) take all other action required by
this Agreement to be taken in order to consummate the
transaction contemplated by this Agreement (the "Closing").
The Closing shall take Dlace at the Corporate Offices, or at
any other place to which SSPC and CapStar may mutually agree
prior to the Closing Date. The Doint in time at which L-he
Closing shall have been consummated is referred to herein as
the "Ti-me of Closing.,,
Section 9.2 Sellers' Deliveries. At the Closing,
each Seller (as indicated below) shall deliver to CapStar all
of the following instruments, each of which shall have been
duly executed and, where a-Dvlicable, acknowledged and/or
sworn on behalf o4L such Seller and, except as otherwise
noted, shall be dated as of the Closing Date:
2 1
(a) The certificates required by Section 7.2(b)
and
(c) hereo-Lc.
(b) Appror)riate resolutions of the shareholders
or board of directors (!or corporate Sellers), and the
general partner (for partnership Sellers) authorizing this
transaction, toge-Lher with all other necessary approvals and
consents of Sellers and such documentary and other evidence
as may be reasonably required by CapStar authorizing and
evidencing the authorization o'L (i) the execution on behalf
of Sellers of this Aareement and the authority of the person
or persons who are executing the Closing Documents to be
executed and delivered by Sellers prior to, at or otherwise
in connection with the Closing, and (ii) the performance by
Sellers of their obligations hereunder and under the Closing
Documents.
(c) All Deeds and Conveyance Documents necessary
to transfer title to the Purchased Assets to CapStar as
contemplated by the terms of this Agreement and as reasonably
requested by Ca,oStar.
(d) A consent from the landlord under each of the
Seller Leases, in form and substance reasonably satisfactory
to CapStar, if required by the terms of the Seller Leases.
(e) A Termination of Management Agreement in form and
substance reasonably satisfactory to CapStar.
(f) Such agreements, affidavits or other
documents as may be reasonably required by the Title Company
to Issue the Title Policies.
(g) A FIRPT-K affidavit in the form set forth in the
regulations under Section 1445 of the Code.
(h) All current real estate and -Dersonal
property -Lax bills relating to the Properties and Safety
Harbor in Sellers, possession.
(i) All originals (or copies if orig- inals are
not available) of the Books and Records, Customer and
Marketing information, Pe=its, Property ReDorts, and all
other documents and records relating to the Business or any
Property in the possession or conl--rol of Sellers, which
shall be deemed to be delivered upon delivery o'L possession
of the ProDerL-ies, the Corporate Of@Lice and Safety F@arbor.
(j) A payoff letter from each lessor under each
Capi-tal Lease indicating all amounts due and owing in order
to fully discharge and payoff as of the Time of Closing such
CaDital Lease.
22
(k) Such other and further documents and
instruments as may he reasonably requested by CapStar or its
counsel @-n order to better effectuate the purposes of this
Agreement.
Secti-on 9.3 ' Ca-oStar's Deliveries. At the
Closing, CapStar shall deliver to Sellers the Purchase Price
(by wire transfer of immediately available funds to an
account designated by Sellers) and all other sums required to
be paid by CapStar hereunder, and all of the following
instruments, each of which shall have been duly executed and,
where applicable, acknowledged and/or sworn on behalf of
CapStar, and, except as otherwise I noted, shall be dated as
of the Closing Date:
(a) The certificates required by Section 7.3(]D) and
(c)
(b) Appronriate resolutions of the Board of
Directors or other governing body of CapStar and such
documentary and other evidence as may be reasonably required
by Sellers authorizing and evidencing the authorization of
(i) the execution on behalf of CapStar of this Agreement and
the authority of the person or persons who are executing the
various documents to be executed and delivered by CapStar
prior to, at or otherwise in connection with the Closing,
and (ii) the performance by CapStar of its obligations
hereunder and under such documents.
(c) A counterpart of each of the agreements to be
delivered by Sellers under Section 9.2 which require
execution by CapStar.
(d) Such other and further documents and
instruments as may be reasonably requested by Sellers or
their counsel in order to better e--Ffectuate the purposes
o'L this Agreement.
Section 9.4 Possession. Sellers shall deliver
- -Dossession of the Purchased Assets at the Closing.
ARTICLE X
CONDEMNATION; DAMAGE OR DESTRUCTION
Secti-on 10.1 Condemnation. In the event of any
actual or threatened L--aking, pursuant to the power of
eminent domain, of all or any porL--i-on of the Real
Property, or any proposed sale in lieu thereof, SSPC shall
give writtet-i notice thereof to CapStar pro=tly after SSPC
receives nol-ice thereof. If all or more than twenty percent
(2o-.), by value, of Sundi-al, Seaside Inn ' or Sanibel Inn,
taken individually, is, or is to be, so condemned or sold,
CapStar shall have the right to terminate this Agreement. If
CapStar elects not to terminate this Agreement, all proceeds,
awards and other payments arising out of such condemnation or
sale (acL--ual or threatened) shall be paid or assigned, as
applicable, to CapStar at Closing. If CaDStar elects to
terminate this Agreement by giving Sellers written notice L--
hereo'L
23
prior to the Closing, all rights and obligations o-L Sellers
and CapStar hereunder (except those rights and obligations
set forth herei-n which expressly survive a L--ermination of
this Agreement) shall terminate immediately.
Section 10.2 Damage or Destruction.
(a) If, after expiration of the Due Diligence
Period but prior to Closing, there shall occur any uninsured
damage or destruction to the ProDerty in excess of twenty
percent (20'-.) , by value, of Sundial, Seaside Inn or
Sanibel Inn, taken individually, or that would require longer
than three hundred sixty-five (365) days to repair, CapStar
shall have the option, in its sole judgment and discretion,
(i) to terminate this Agreement, or (ii) to proceed with
Closing without any adjustment in the Purchase Price, in
which event, at Closing, Sellers shall transfer and assign to
CapStar all of Sellers' right, title and interest in and to
all proceeds from all insurance policies owned by Sellers
with respect to the Purchased Assets for such damage or
destruction, provided that any existing mortgagees having
approval or similar rights relating to application of
insurance proceeds have agreed that the insurance proceeds
may he transferred and assigned to CapStar. If CapStar
elects to proceed with Closing, and, as of the Closing Date,
the existing mortga ees have no . t agreed that the insurance
proceeds may be transferred and assigned to CaDStar, then, in
such event, the insurance proceeds shall be trans'Lerred and
assigned by Sellers to Ca-oStar as soon as practicable after
Closing. If CapStar elects to terminate this Agreement,
CapStar shall give written notice thereof to Sellers on or
before the earlier to occur of (A) ten (10) days after
CapStar shall have received written notice of such damage or
destruction, or (B) the Closing Date. If CapStar does not
give such notice within such time, CapStar shall he
conclusively deemed to have elected to @roceed with Closing,
and shall not have any further right to terminate this
Agreement as a result of such damage or destruction. Upon
any te=ination o'L this Agreement under this Section 10.2(a),
all rights and obligations of Sellers and CapStar hereunder
(except those rights and obligations set forth herein which
expressly survive a te=ination of this Agreement) shall
te=inate immediately.
(b) If, prior to Closing, there shall occur any
damage or destructi-oi-i -Lo the ProDerty that would require
less than
twenty Dercent (20%), by value, of Sund@al, Seaside Inn ' or
Sani-bel Inn, taken individually, and take not longer than
three hundred sixty-five (365) days to repair, CapStar shall
not have the option to L--erminate this Agreement, but
Closing shall proceed pursuant to Section 10.2(a)(ii) unless
Sellers, insurance company has in good fai-th denied coverage
and SSPC is unwilling to pay for the cost (or estimated cost)
to repair or restore the damaged ProperL@-y through a
reduction in the Purchase Price. I'L Sellers' insurance
company denies coverage and SSPC is unwilling to pay
24
for the cost (or estimated cost) to renair or restore the
damaged Pro-oerty through a reduct@-on in L--he Purchase
Price, CapStar may elect to te--Mi-nate th-Ls Agreemen-L by
gi-ving Sellers written notice thereof prior l'o the Clos@-ng
and all rights and obligations of Sellers and CapStar
hereunder (excent those rights and obligations set forth
herein which expressly survive a termination of this
Agreement) shall terminate immediately. CapStar acknowledges
that Sellers make no representation or warranty as to the
amount of any insurance policy proceeds, if any, that will be
available to CaDStar in the event ocL a Closing pursuant to
Section 10.2(a)(ii) or this Section 10.2(h). If Sellers'
insurance company denies coverage and SSPC pays for the cost
or estimated cost to repair or restore the damaged Property
through a reduction in the Purchase Price, SSPC shall be
entitled to collecl-- and receive any insurance proceeds
ultimately dete=ined to be due and ow@-ng by Sellers,
insurance company in respect of such c'Lamage.
Section 10.3 Inability to Deliver SHMC Ground Lease. If SHMC is
unable to deliver at the Time of Closing the consent of the
ground lessor under the SHMC Ground Lease (the "Ground Lessor")
and the Grand Lessor's lender to the assignment of the SHMC
Ground Lease to CapStar, then CapStar shall be entitled to
eliminate from this Agreement the SHMC Ground Lease and the SHMC
Land and the Purchase Price shall be reduced by $5,150,000.
CapStar shall not be entitled to eliminate the SHMC Ground Lease
unless it also eliminates the SHMC Land. CapStar shall not have
the right to eliminate the SHMC Ground Lease from this Agreement
solely as a result of the consent of the Ground Lessor to the
assignment of the Ground Lease to CapStar being conditioned upon
the restructuring of the earn-out provisions of the SHMC Ground
Lease (the "SHMC Ground Lease Earn-Out"). The Purchase Price will
be adjusted as follows: (i) if the present value of the SHMC
Ground Lease Earn-Out (after obtaining such consent) is in excess
of Seven Million Dollars ($7,000,000), the Purchase Price shall
be reduced by the amount of such excess, or (ii) if the present
value of the SHMC Ground Lease Earn-Out (after obtaining such
consent) is less than or equal to Seven Million Dollars
($7,000,000), the Purchase Price shall be increased by fifty
percent (50%) of the difference between Seven Million Dollars
($7,000,000) and such present value of the SHMC Ground Lease
Earn-Out. For purposes of the preceding sentence the following
shall apply: (x) the present value of the SHMC Ground Lease Earn-
Out shall be determined using a May 1, 2000, valuation date and a
ten percent (10%) discount rate, and (y) if the SHMC Ground Lease
Earn-Out (after obtaining such consent) is based upon the net
operating income of Safety Harbor for periods not yet completed,
the parties shall use commercially reasonable efforts to agree
upon pro-forma financial statements for the basis of determining
such net operating income for purposes of the present value
computation of the SHMC Ground Lease Earn-Out (after obtaining
such consent). If the parties can not agree under clause (y) of
the preceding sentence, the parties will appoint a mutually
agreed upon expert to determine the pro-forma net operating
income. The determination of such expert shall be final and non-
appealable and the fees and expenses of such expert shall be
divided equally between SSPC and CapStar.
Section 10.4 Inabilitv to Deliver Pink Shell
Management AcTreement or Pink Shell Lease. If: (a) SSRC is
unable to deliver at the Time of Closing the consent of the
owner of the Pink Shell to the assignment of the Pink Shell
Management Agreement, (ii) if the transaction contemplated by
the Pink Shell Purchase Agreement is consummated Drior to
consummation of thi's transaction and if SSEI is unable to
deliver the consent o-P Boykin Hotel Properties, L.P.
("]Boykin") to an assignment of the Pink Shell Lease (which
consent shall include Boykin's agreement to amend the non-
economic provisions of the Pink Shell Lease to con.Lorm the
Pink Shell Lease in all material respects to the form of
Percentage Lease Agreement customarily entered into between
Boykin and CaDStar's Affiliates), then CapStar shall be
entitled to eliminate irom this Agreement the Pink Shell
Management Agreement or the Pink Shell Lease, as the case may
be, and the Purchase Price shall be reduced by $2,500,000, or
(iii) if the transactions contemplated by -Lhis Agreement are
consummated prior to consummation of the transactions
contemplated by the Pink Shell Purchase Agreement and if upon
the consummation of the transactions contemplated by the Pink
Shell Purchase Agreement SSEI is unable to deliver the
consent of Boykin to an assignment of the Pink Shell Lease
(which consent shall include Boykin's agreement to amend the
non-economic provisions of the Pink Shell Lease to conform
the Pink Shell Lease in all material respects to the form of
Percentage Lease Agreement customarily entered into between
Boykin and CapStar, s Af f iliates) , then CapStar shall be
entitled to eliminate 'Lrom this Agreement the Pink Shell
Management Agreement and shall be entitled to a payment from
SSEI in the amount of $2,500,000.
Section 10.5 .Inability to Deliver any Other
Propert-y. Subjec-L to the provisions of Section 10.1 and
Section 10.2 hereof, if: (i)-Sellers are unable to deliver to
CapStar title to any ProDerty as required by the terms of
this Agreement (other than the SHMC Ground Lease or the Pink
Shell Management Agreement or Pink Shell Lease, which shall
be governed by the provisions of Sections 10.3 and 10.4,
respectively), or (ii) any of the representations and
warranties of Sellers set forth in Article V hereof shall at
the Time of Closing be untrue in any mal@-erial respect with
resvect to a particular Proper-Ly, or (iii) Sellers are
unable to deliver any ProDerty by reason oz- any
condemnation, damage or destruction with respect to a
particular Property that would allow CapStar to te=inate this
Agreement under Sections 10.1 or 10.2, then CapStar shall be
entitled to eliminate from this Agreement the Property or
ProDerties so affected and the Purchase Price shall be
adjusted by deducting the amount or amounts shown in Exhibit
B for the Property or Properties to be eliminated. If the
Purchase Price declines below $19,000,000 as
2 Do
a result of the elimination o'L Properties, Sellers may
terminate L-his Agreement by wr@-tten notice to CapStar de!4-
vered at any time after the elimination of the Property or
Properties which resul-Ls in the Purchase Price declining
below such amount.
Notwithstanding Section 8.3(b), if a Pro-.oerty is eliminated
pursuant to this Section 10.3, CapStar's obligations under
Section 8.3(b) and Sellers' obligations under Section 8.2(c)
shall cease and terminate with respect to the EmDloyees of
Sellers relating to the Pro-oerty eliminated under this
Section 10.3.
ARTICLE XI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
TERMINATION RIGHTS
Section 11.1 Survival of Rer>resentations and
Warranties. The represe ntations and warranties of Sellers
and CapStar shall survive the Closing for a period of one (1)
year commencing on the Closing Date (the "Indemnity
ExpiraLion Date"). To the extent any Indemnitee i-s seeking
indemni@Lication, the Indemnitee shall be entitled to
indemnity only for those matters as to which the Indemnitee
has given written notice thereof to the other party prior to
the expiration of the one (1) year period commencing on the
Closing Date.
Section 11.2 Indemnification by Ca-ostar. CaDStar
hereby indemnities and holds Sellers, their partners, -L@eir
respective Affiliates and the officers, directors, employees,
agents, advisers and representatives of each of -Lhe
foregoing (individually, a "Seller IndemT-iitee", and
collectively, the "Seller Indemnitees") harmless from and
against any and all claims, costs, penalties, damages,
losses, liabilities and expenses (including reasonable
attorneys' fees) (individually, an "Indemni-i'-ication Loss",
and collectively, the "Indemnification Losses") that may at
any time be incurred by any Seller Indemnitee, whether before
or after Closing, as a result of: (i) any inaccuracy or
breach by CaDStar of any of its reldresentations, warranties,
covenants or obligations set forth herein, (ii) the non-
payment or nonperformance of any Assumed Liabilities, and
(iii) the conduct of the Business after the Closing Date.
Section 11.3 Inde=ification by Sellers. Sellers
hereby jointly and severally indemnify and hold Ca-oStar, its
partners, their respective Af@Liliates and the o@Lficers,
directors, employees, agenl-s, advisers and representatives
of each sucn person (individually, a "Purchaser IndemniL--
ee", and collectively, the "Purchaser Indemnitees") ha=less
from and against any and all claims, costs, Denalties,
damages, losses, liabilities and e)menses (including
reasonable attorneys' fees) (individually, an
!'Indemnification Loss", and collectively, the "Indemn4-
fication Losses") that may at any time be incurred by any
Purchaser Indemnitee, whether before or after Closing, as a
27
result of: (i) any inaccuracy or breach by Sellers of any of
the representations, warranties, covenants or obligations set
forth herei-n (except for any breach or inaccuracy of any
renresentat@on or warranty as to which CaoStar had Knowledge
prior to the Closing and nevertheless elected to consummate
the Closing), and (ii) Sellers, failure to timely discharge
or satisfy any Excluded Liabilities. Sellers' obligations
under this Section 11.3 with respect to indemnity under
clause (i) hereof shall terminate on the one year anniversary
of the Closing Date and on the second year anniversary of the
Closing Date with respect to indemnity under clause (ii)
hereof.
Section 11.4 Limitations on Inde=ification.
(a) Notwithstanding anything in Section 11.3
hereof to the contrary, to the extent indemnification is
sought by any Purchaser Indemnitee under clause (i) of
Section 11.3 hereof or under clause (i) of Section 11.3 of
the Other Agreement, Sellers shall be recruited (-o provide
indemnification only to the extent the aggregal-- Z@ amount
of all Indemnification Losses under clause
(i) of Section 11.3 of this Agreement and clause (i) of
Section
11.3 of the Other Agreement exceed Seven Hundred Fif-Ly
Thousand
Dollars ($750,000) and not for any amounts up thereto (the
"Indemnity Deductible"). Indemnification under clause (ii)
of
Section 11.3 hereof shall not be subject to the Indemnity
Deductible.
(b) Notwithstanding anything in Section 11.3
hereof to the contrary, the maximum amount payable for
indemnification under clause (i) of Section 11.3 hereof and
under clause (i) of Section 11.3 of the Other Agreement shall
not in the aggregate exceed Seven Million Five Hundred
Thousand Dollars ($7,500,000) and the maximum amount payable
by Sellers for all claims for indemnification under Section
11-3 hereof and under Section 11.3 of the Other Agreement
shall -iot in the aggregate exceed Ten Millio'n Dollars
($10,000,000).
(c) The amount of any Indemnification Loss for
which indemnification is provided under this Article XI shall
be net of any tax bene@@its or insurance proceeds actually
realized by the indemnified party as a result thereof.
Section 11-5 Indenmification Procedure. In the
case of any claim asserted by a third party against a party
entitled to inde@-ii@Licati-on under this AgreemenL- (the
"Indemni--Fied Party"), notice shall be given by the
Indemnified Party to the party required to provide
indemnification (the "Indemnifying Party") promptly after
such indemnified Party has actual knowledge of any claim as
L--o which indemnification may be sought, and the Indemnifi-
ed Party shall Dermit the Indemnifying Party (at the expense
of the Indemnii-ying Party) to assume the defense of any
claim or any litigation resulting therefrom; provided, that
(i) the counsel for the Indemnifying ParL-y who shall
conduct the
2 8
defense of the claim or litigation shall be reasonably
satisfactory to the Indemni@Lied Party, (ii) -L-he
indemnified Party may participate in the defense at the
indem-Tii@Lied Party's expense, a.-Lad (@-ii) the failure by
any Indemnified Patty to give notice as provided herein shall
not relieve the indemnifying Party of its indemnification
obligation under this Agreement, except to the extent that
such omission resull--s in a failure of actual notice to the
indemnifying Party and such Indemnifying ParL--y is
materially damaged as a result of such failure to give
notice.
Section 11.6 ' Exclusive Remedy. Subject to
Section 11.7 below, the indemnification provisions of this
Article Xi shall be the sole and exclusive remedy of the
Seller-Indemnitees and the Purchaser indemnitees with respect
to any claim for moneta--y relief based upon or arising out
of this Agreement.
Section 11.7 Te=ination by Ca-PStar. If Sellers
default in any material respect in the performance of any o@
their obligations hereunder and if Sellers fail to cure that
L default within ten (10) business days after notice thereo'
from CapStar (or such other time period as may be explicitly
provided for herein), CapSL-ar, shall have the right to
exercise any and all legal and equitable remedi-es which
CapStar may have against Sellers, including, without
limitation, the right to require that Sellers specifically
pe.rform their respective obligations under this Agreement.
Section 11.8 Te=ination by Sellers. If CapStar
defaults in any material respect in the perfo=ance of any of
their obligations hereunder and if CapStar fails to cure that
defaull-- within ten (10) business days after nol--ice
thereof from Sellers (or such other time period as may be
explicitly provided for herein), Sellers may ei-ther: (i)
te=inate this Agreement in which all rights and obligations
of Sellers and CapStar hereunder (except those rights and
obligations set forth herein which expressly survive a
termination of this Agreement) shall te=inate immediately, or
(ii) proceed to Closing.
Section 11.9 ' Te=ination by Either Sellers or a-
DStar.If the Closing shall not- have occurred before November
1, 1998, any party hereto may elect to te=inate this
Agreement, in which event all rights and obligations of
Sellers and CapStar hereunde-(excevt those rights and
obligations set forth herein which exvressly survive a te--
mination of this Agreement) shall L-e=inate immediately. In
connection with any such termination, each party shall pay
its own costs and expenses incurred in connection wil--h -Lhe
transaction contemplated hereby.
29
ARTICLE XII
PRORA-TIONS; TRANSACTION COSTS AND ADJUSTMENTS
SecL--ion 12.1 Prorations. The follow@-ng matters
and items pe--tainina to th-- Business and each Property
shall be apportioned between Sellers, on the one hand, and
CapStar, on the other hand or, where applicable, credited in
total to Sellers or CapStar, as of midniaht on L-he day
preceding the Closing Date (the "Cutoff Time"). Ne'L credits
in favor of CapStar shall he deducted from the Purchase Price
and net credits in favor of Sellers shall be added to the
Purchase Price. Unless otherwise indicated below, CapStar
shall receive a credit for any of the following items to the
extenl-- the same are accrued but unpaid as of the Cutoff
Time (whether or not due, owing or delinquent as of the
Cuto'L--F Time), and Sellers shall receive a credit to the
extent any of the following items shall have been paid prior
to the Closing Date to the extent the payment thereof relates
to any peri-od of time after the Cutoff Time:
(a) All Taxes (other than federal, state, local
and foreign income, capital stock, windfall profits and
franchise taxes) shall be prorated as of the CuL--off Time
between CapStar and Sellers. Sellers shall be charged with
such Taxes accrued or payable as of the Cutoff Time, which
shall be credited to CapStar as a reduction of L--he Purchase
Price. If the amount of any such item is not ascertainable
on the Closing Date, the credit therefor shall be based on
the most recent available bill and adjusted as necessary
post-closing, as contemplated in Section 12.3.
(b) Any amounts -oredaid, accrued or Dayable
under the IndenL--ure shall be prorate@ as of the Cutoff Time
between CapStar and Sellers. All amounl--s accrued or
payable under the Indenture with reference to periods vrior
to the Closing Date shall be credited to CapStar as a
reduction of 1-he Purchase Price. All amounts paid under the
Indenture with reference to periods after the Closing Date
shall be added to the Purchase Price.
(c) Any amounts prepaid, accrued or due and
payable under the Contracts (including any deposits payable
thereunder, .but excluding any Contracts for utilities which
proration is addressed separately in Section 12.1(i)) shall
he prorated as o'L the Cutoff Time between CapStar and
Sellers. All amounts accrued or payable under the Co-
ritracts with re--@erence to periods prior to L--he Clos@-ng
DaL--e shall be credited to CapSL--ar as a reduction of the
Purchase Price. All amounts Daid under the Contracts with
reference to ueriods after the Closing Date shall he added to
the Purchase Price- Notwithstanding the foregoing, Sellers
shall pay off at or prior to Closing all Equipment Leases
which are treated as capital leases (as oidposed to o-oeraL-
i-ng leases) under GAAP, including, without limitations the
Equipment Leases with respect to the computer, televhone and
reservations systems and equipment used at the Vacation
Planning Cent-er.
3 0
(d) Any amounts prepaid, accrued or due and
Dayable under the Leases (including any deposits payable
thereunder) shall be vrorated as of the Cuto'Lf Time between
CapStar and Sellers. All amounts accrued or Dayable under
the Leases with reference to Deri-ods prior to the Closing
Date shall be credited to CapStar as a reduction of the
Purchase Price. All amounts vaid under the Leases with
reference to periods after the Closing bate shall be added to
the Purchase Price.
(e) Any ComiDensation for the following specific
items:
direct salaries an@ wages; (ii) incentive compensation;
(iii) employer's contributions under the Federal Insurance
Contribution Act, unemployment compensation and other
employment taxes; (iv) accrued vacation -may with respect to
the Transferred Employees (A) which are due and Dayable at
Clos@ng, or (E) with respect to which the right to receive
such Compensation first arises or accrues prior to Closing
(without regard to when such Compensati-on i-s paid or
becomes due and payable) shall he prorated as of the Cutoff
Time between CaDStar and Sellers. All Compensation with
reference to periods pr@lor to the Closing Date shall be
credited to CaQStar as a reduction of the Purchase Price.
(f) All fees and charges paid for transferable
Permits the current --Deriod for which Permit includes the
Closing Date shall be prorated as of the Cutoff Time between
CapStar and Sellers. All amounts accrued or payable under
such Permits with reference to -Deriods Drior to the Closing
Date shall be credited to CapStar as a reduc@ion of the
Purchase Price. All amounts paid under such Permits with
reference to periods after the Closing Date shall be added to
the Purchase Price.
(g) The Purchase Pri-ce shall be reduced by the
amount o-f all accounts for current guests at the Prooerties,
the Pink Shell and Sa'LeL--y Harbor including items charged
to such accounts by guesl-s reflected on the ledger of each
Property, the Pink Shell and Safety Harbor as of the Cutoff
Time in an amount equal to fifty percent (50'-.) of all of
such room charges for such night, plus all other guest ledger
charges for such night.
(h) Ca-oSL--ar shall receive a credit as a
reduction in the Purchase Price for all iDreDaid deposits for
Reservatiors scheduled for accommodations or events on or
afte-- the Closing Date.
(i) All utility services, including, without
limitation, telephone and telex contracts and contracts for
the supply of heat, steam, electric power, gas, water, sewer
and ligh-Ling, shall be prorated as o@L the Cutoff Time
between CaDStar and Sellers. Where possible, cutoff readings
will be secured 'Lor all utilities as of the Cuto'Lf Time.
To the extent they are no-L available, the cost of such
utilities shall be apportioned between the varl--ies by
estimating such cost on the basis of the
3 1
latest actual (not estimated) bill for such service. All
such amounts whi-ch are payable or estimated to have accrued
for such utility services w@ith reference L-o periods Drior
to L--he Closing Date shall be credited to CapStar as a
reduction o'L the Purchase Price. All amounts idaid for such
utility services with reference to ideriods after the Closing
Date shall be added to the Purchase Price. Sellers shall
receive a credit for all deposits, if any, made by Sellers as
security under any such public service contracts if the same
are trans'Lerable and provided such deposits remain on
deposit for the benefit of CapStar.
(j) Vending machine, laundry machine, pay
telephone and other coin-operated equipment monies will be
removed by Sellers as of the Cuto'Lf Time for the benefit of
Sellers (subject -Lo the payment by Sellers or- any amounts
owed third parties in connection with such vending machines,
laundry machines, pay telephones and other coin-oderated
equipment).
(k) The Purchase Price shall be increased in an
amount equal to the amount of all Accounts Receivable
generated from the Business prior to the Cutoff Time which as
of the Cut-Off Time have been unpaid for not more than ninety
(90) days (the "Transferred Accounts Receivable"), and
CapStar shall be entitled to collect and retain all such
Accounts Receivables as they are received. If CapStar i-s
unable to collect the Trans@Lerred Accounts Receivable within
ninety (90) days following the Closing Date, Sellers shall
repurchase at the face value thereof those Trans'Lerred
Accounts Receivable that CapStar is unable to collect. No
adjustmenl-- shall be made for any Accounts Receivable
generated from the Business prior to the Cut-Off Time which
as of the Cut-Off Time shall have been unpaid for nine-Ly
(90) days or more, and Sellers shall be entitled to collect
and retain all such Accounts Receivable. Sellers shall
deliver to CapStar on the Closing Date a L--rue, correct and
comidlete schedule listing all of the Transferred Accounts
Receivable.
(1) The Purchase Price shall be increased by the
amount paid by Sellers for the items of Consumables and
Sunply Inventory shown on the Financial Statements as follows
to @he extent such items have not been exdensed prior to the
Cutoff Time: (i) unopened licruor and wine inventory; (ii)
retail (gifts, groceries, etc); (iii@ marina - gas/oil.; (iv)
general store; (v) gift shop; (vi) Warehouse Storage; (vii)
tennis Dro shop; (viii) maintenance supplies; (ix) food
service suldplies; (x) office and vending equipment; (x@-)
computer equipment (which shall be limited to Sellers, on-
hand supply o-.cL computer replacement parts and replacemenl-
- - equipment); and (xii) items customarily included in the
"miscellaneous" category. Notwithstanding this Section
12.1(1), CapStar shall have the right to advise SSPC no later
than thirty (30) days -Drior to the Closing Date that CapStar
elects not to vurchase certain beverage inventory (in which
case no prora-Lion for such excluded inventory shall be made
hereunder)- If CaDStar so notilcies SSPC, the beverage
inventory
32
that CaDStar elects not to purchase shall not be trans-erred
@o
- - L
L-
CapStar.
(m) The Purchase Price shall be decreased by the
outs-Landing accounts payable and accrued expenses of Sellers
as of the Cutoff Time to the extent that such accounts
Dayable and accrued expenses have not otherwise been deduc-
Led from the Purchase Price pursuant to this Section 12.1.
(n) All prepaid expenses (including, without
limitation, proiderty, casualty, workers, compensation or
health insurance premiums) which are required for operation
of the Properties, the Pink Shell and Safety Harbor and which
have not otherwise been prorated pursuant to this Article XII
and which relate to a period of more than one year shall be
prorated as of the Cutoff Time between CaDStar and Sellers.
Section 12.2 Settlement Statement and Closing Date
Calculation.
(a) Sellers and CapStar, through their respective
accountants or representatives, together shall make such
examinations and inventories of Sellers as may be necessary
to make the adjustments and Drorations and allocations of
Purchase Price among the Purchased Assets under this Article
XII or under any other provisions of this Agreement. Sellers
and CapStar jointly shall prepare no later than the Closing
Date a settlement statemenl- (the "Se-Ltlement Statement")
that is based upon (i) the last available month-end balance
sheet and income statement of Sellers (such mon-Lh-end
statements are generally prepared by Sellers within twenty
days following the prior month-end), and (ii) the
examinations and inventories described in the preceding
sentence. The Settlement Statement shall contain Sellers,
and Ca,DStar's best estimate of the amounts of the items
requiring the prorations and adjustments in this Agreement
and shall segregate such items on a Property by Property
basis to the extent avdlicable. The amounts set forth on the
Settlement Statement shall be the basis u-Don which the
prorations and adjustments provided for herein shall be made
at the Closing. Subject to Sections 12.2(b) and (c), the
Settlement Statement shall be binding and conclusive on all
parties hereto to the extent of the items covered by the
Settlement Statement.
(b) in the event that, at any time within nine
(9) months after the Closing Da-Le, ei-ther party discovers
any items (other than the items se-L forth in Sections
12.1(i), (k) and (1)) which should have been included in -Lhe
Settlement Statement but were omitted therefrom, such items
shall be adjusted in the same manner as if their existence
had been known at the time of the preparation of the
Settlement Statement.
(c) With respect to the items set forth in Sections
12.1(i), (k) and (1), within sixty days after the Closing
Date,
3 3
Sellers shall prepare a calculation of such items as of the
Closing Date (the "Clos@-ng Date Calculation") and shall
segregate such items therein on a Property by Property basis
to the extent applicable. The Closing Date calculation shall
also set forl--h any adjustments -Lo the prorations and
adjustments set forth in the Settlement Statement. If
CaDStar has any objections to the Closing Date Calculation,
CapStar shall deliver a detailed statement describing its
objections to Sellers within thirty (30) days after receiving
the Closing Date Calculation. CapStar and Sellers shall use
reasonable efforts to resolve any such objections themselves.
If Sellers and CapSL--ar do not obtain a' final resolution
within thi-rty (30) days a-LcL--er Sellers have received the
statement of objections, Sellers and CapStar shall select an
accounting firm mutually acceptable to them to resolve any
remaining objections. If CapStar and Sellers are unable to
agree on the choice of an accounting farm, they will select a
nationally-recognized accounting firm by lot (after excluding
their respective regular outside accounting firms). The
determination of any accounting firm so selected will be set
.Lorth in writing and will be conclusive and binding upon
CaDStar and Sellers. Upon resolution of all objections to
the Closing Date CalculaL--ion, Sellers promptly shall revise
the Closing Date Calculation to reflect such resolution of
objections. CapStar or Sellers, as the case may be, shall
promptly pay the other party the amount of any additional
adjustment required under such revised Closing Date
Calculation (or as required under the initial Closing Date
Calculati-on if Ca-oS-Lar does not notify Sellers of any
objections within the applicable thirty-day period). CapStar
and Sellers shall split the costs and expenses of the
accounting firm referenced above. Sellers shall make the
work papers and back-up,materials used in DreDari-ng the
Closing Date Calculation available to CaDStar and its
accountants and other reoresentatives at reasonable times and
upon reasonable notice at a-Lly time during (i) the
preparation by Sellers of the Closing Date Calculation, (ii)
the review by CaDStar of the Closi-ng Date Calculation, and
(iii) the resolution by CapStar and Sellers of any ob'ections
thereto.
3
Section 12.3 Transaction Costs.
(a) Sellers shall -may for the following costs
associated with this transaction: (i) the fees and expenses
o-L 4-ts accountants and attorneys, and (ii) the costs and
expenses o-any mortgage or other releases associated with the
pay off and release o@' existing mortgages and other non-
permitted encumbrances.
(b) CapSL--ar shall pay for the following costs
associated with this transaction: (i) the fees and expenses
of its investment bankers or advisers; (ii) the fees and
expenses of its accountants and attorneys; (iii) appraisal
@Lees and charges, (iv) the fees, charges and expenses
incurred in connection with any third party repo@-ts obtained
by CaDStar (including, without
34
limitation, environmental, structural engineering and
marketing reports), (v) application and/or trans@Ler fees
relating to any franchise affil@-ations CaDStar desires to
obtain, and (vi) fees and expenses relating to the transfer
of all liquor licenses for the Properties, the Pi-nk Shell
and Sa'Let7 Harbor.
(c) Sellers and CapStar shall split equally the
following costs associated with this transaction: (i)
recording fees and charges, (ii-) the fees and expenses of
any escrow agent, (iii) the costs of updates to the Existing
Surveys or obtaining new surveys, (iv) transfer taxes, (v)
documentary stamp taxes, (vi) sales and use taxes incurred by
reason of the transfer of the Purchased Assets as con-
LemiDlated by this Agreement, and (vii) costs and charges
relating to all Title Commitments and Title Policies
(includ@-ng, without limitat4-on, any costs and charges of
Guardian Title of Lee County). All other costs and expenses
not e@ressly addressed in this Section 12.3 shall be
allocated between the parties i-n accordance with local
custom for similar transactions.
(d) If SSPC is able to provide CapStar wi-th
engineering, building condition, environmental or aDDraisal
reports that are satisfactory to CapStar and for which
CapStar can obtain reliance letters, then if CapStar elects
to use such reports CapStar will nay to SSPC the fees CapStar
no=ally would pay for such reports under its nal--ional
contracts.
Notwithstanding the foregoing sentence, CapStar shall have no
obligation to use and Day for reports that SSPC may be able
to provide to CapStar.
Section 12.4 ' Further Increases to Purchase
Price. The Purchase Price shall be increased by the amounts
of the following items and such items shall be transferred to
CapStar at Closing and, i-f appropriate, shall be deemed to
be included in the Purchased Assets.
(a) all deposits for liquor licenses, utility
deposits and beverage deposits with respect to the li-quor
licenses, utilities and beverage services at the Properties,
the Pink Shell and Safety Harbor; and
(b) L--he amount by which Sellers' Actual Base
Cavital Ex-oenditures as o--F L-he Closi-ng Dat-e exceed
Sellers, Prorated Base Bu@geted Capital Ex-oenditures vlus
the amount spent by any Seller in respect of any -Zpproved
ProjecL@ CaDital Expenditure. The 1998 annual budgeted base
canital e@enditures for the purposes of the calculation
required by this Section 12.4(h) and as previously submitted
to CaDStar i-s $1,566,000; and
(c) the accruisiti-on costs and d;irect expenses
incurred by SSPC in com-iection-wi-th the purchase of the
Plantation View and Shirley's Parcel (which as of the date
hereo@L is estimated to be approximately $3,470,000) ; and
3 5
(d) all notes receivable payable to any Seller by
any condominium owner or condominium association at Sundial
in connection with the assisted owner refurbishment program
or association assisted refurbishment program at Sundial (but
excluding any notes receivable arising in connection with the
refurbishment program undertaken wi'Lh the proceeds of the
Unit Rehab Loan) (each, a "Refurbishment Program Note
Receivable").
Section 12.5 Further Reduction to Purchase Price.
The Purchase Price shall be decreased by: (i) the amount by
which Seller's Prorated Base BudgeL-ed Capital ExiDenditures
exceed Seller's Actual Base Capital Expenditures as of the
Closing Date, and (ii) all amounts due and owing in order to
fully discharge and payoff as o@L the Time of Closing the
Capital Leases as set forth in the payoff letters required to
be delivered under Section 9.2(j) hereof.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Com-pleteness, Modification. This
Agreement, the Exhibits and Schedules hereto and the
documents required to be delivered hereby constitute the
entire agreement between Sellers and CapStar with respect to
the transaction contemidlated hereby and supersede all prior
discussions, understandings, agreements and negotiations
between the parties hereto. This Agreement may be modified
only by a written instrument duly executed by Sellers and
CapStar. Each reference in thi-s Agreement to an Exhibit or
Schedule shall mean an Exhibit or Schedule attached to this
Agreement and incorporated into this Agreement by such
reference.
Section 13.2 Assicr=ent. ExcepL- in connection
with the Merger, neither any Seller nor CapStar shall assign
its rights, dut-'Les or obligations hereunder withou-L the
prior written consent of the others.
Secti-on 13.3 Successors and Assicrns; No Third rt
Beneficiarv. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors
and permitted assigns and shall not inure to the benefit of,
and shall not be enforceable by, any third DarL--y. If the
Merger is consummated prior to consummation of this
transaction, this Agreement shall be binding upon each
successor entity to CaDStar.
Section 13.4 ' GovernincT Law. This Agreement and
all documenL--s.referred to herein shall be governed by and
construed and interpreted in accordance with the laws of the
State of Florida.
Section 13.5 Co=te=arts. To facilitate execution,
this Agreement may be executed in as many counterparts as may
be required. It shall not be necessary that L--he signatures
on
3 6
behalf of the parties hereto aTDDear on each counterda--t
hereof. All counte-@arL--s hereof shall collectively
constitute a single agreement'.
Section 13.6 ' Severability. If any term, covenant
or condition of this Agreement, or the application thereof to
any person or circumstance, shall to any extent be invalid or
unenforceable, the remainder of this Agreement, or the
application of such te=, covenant or condition to other
persons or circumstances shall not be af@Lected thereby, and
each term, covenant or condition of this Agreement shall be
valid and enforceable to the fullest exl--ent pe=itted by
law.
Section 13.7 Notices. All notices, requests,
demands and other communications hereunder shall be in
writing and shall be delivered by hand, transmitted by
facsimile transmission, sent prepaid by Federal Ex-oress (or
a comparable overnight delivery service) or sent by t@e
United SL-ates mail, certified, postage p--epaid, return
receiidt requested, at the addresses and with such copies as
designated below. Any notice, request, demand or other
communication delivered or sent in the manner aforesaid shall
be deemed given or made (as the case may be) when actually
del@-vered to the intended recipient.
If to Sellers: South Seas Properties Company
Limited Partnershir)
12800 University Drive, Suite 350
Fort Myers, Florida 33907
Attn: Richard E. Krichbaum
Telecopy: (941) 481-6667
W@-th a coi)y to: Baker & Hostetler LLP 1900 East Ninth
Street, Suite 3200 Cleveland, Ohio
44114-3485
Attn: Albert T. Adams, Esq.
Teleco,oy: (216) 696-0740
If to CapStar: CapStar Hotel Company
1010 Wisconsin Avenue, N.W.
Washington, D.C. 20007
Attn: John Plunket
Telecopy: (202) 295-2230
With a cody to: DeCamoo, Diamond & Ash
805 Third Avenue
New York, New York 10022
Attn: William H. Diamond, Esa.
Telecopy: (212) 758-1728
or to such other address as the intended recipient may have
specified in a nol--ice to L-he other party. Any party
hereto may change its address or desi-gnate different or
other persons or
3 7
entities to receive coidi-es by notifying the other party in
a
manner described in this Section 13.7.
Section 13.8 Rules of Construction. The following
rules shall apply to the construction and interpretation of
this Agreement:
(a) Singular words shall connote the plural
number as well as the singular and vi-ce versa, and the
masculine shall include the feminine and the neuter.
(b) All re@@erences herein to particular
articles, sections, subsections, clauses or exhibits are
references to articles, sections, subsections, clauses or
exhibits of this Agreement.
(c) The headings contained herein are solely for
convenience of reference and shall not constitute a part of
this Agreement nor shall they affecl-- its meaning,
construction or effect.
(d) Each Darty hereto and its counsel have
reviewed and revised (or requested revisions of) this
Agreement and have participated in -Lhe preparation of this
Agreement, and therefore any usual rules of construction
requiring that ambiguities are to he resolved against a
particular party shall no-L be applicable in the construction
and interpretation o'L this Agreement or any exhibits hereto.
Section 13.9 Su-pplements to Schedules. Any party
may at any time, or from time to time after the date hereof,
but not later than five (5) days prior to the Closing Date,
supplement or amend the Schedules required by this Agreemen-
L. No supplement or amendment L--o such Schedules shall have
any effect for the Durpose of determining the satisfaction of
the conditions to the obligation of the other parties under
Article VII hereof, but any matter disclosed in an amended or
supplemental Schedule pursuant to this Section 13.9 shall not
form the basis for any claim for indemnification pursuant to
this Agreement if the transaction contemplated by this
Agreement is consummated.
Sec-Lion 13.10 Radon Gas. Radon is a naturally
occurring radioactive gas that, when it has accumulated in a
building in [email protected] cruantities, may present health
risks to Dersons who are exmosed to i-L over time. Levels of
radon that exceed federal and state guidelines have been
found in buildings in Florida. Additional info=ation
regarding radon and radon testing may be obtained from your
county public health unit.
IN WI =-SS WHEREOF, Sellers and CavStar have
caused this Agreement to be executed i-n their names by their
respective duly auk--horized representatives.
- -3 8
Sellers:
SOUTH SEAS PROPERTIES COMPANY LIMITED
PARTNERSHIP, an Ohio limited partnership
By: T&T Resorts, L.C., a Florida
limited
partner
By:
Rober
ility company, general
Manager
lor, Chairma and
SOUTH SEAS RESORTS COMPAN-Y LIMITED PARTNERSHIP, a Florida
limited partnership
By: S.S. Resorr_
Florida
general
By:
Management, L.C., a
ted liability company,
r
Robert M. Tay ,@r, Chai=a and
Manager
SAFETY HARBOR MANAGEMENT COMPANY, LTD.,
a Florida limited partnership
By: S.S. Resort
agement, L.C., a
Florida li te
general pa
By:
3 9
Robert ".
Manager
liability company,
lor, Chai=an nd
SOUTH SEAS ESTERO IS@-ND, LTD., a
Flori-da limited zartnershid
By: South Seas Estero Island, L.L.C.
By: SouL--h Seas Properties Company
Limited Partnership
By: T&T Res
By:
CanStar:
Rob
Manager
L. C.
aylor, Chairm
.By_ @., c@ 4.
Name: @
Title: @.,c, @re- ,lr4
4 0
and
LIST OF EXHIBITS AND SCHEDULES
TO
ASSET PURCHASE AGREEMENT
Schedules to Asset
Schedule 1.2(a)
Schedule 1.2(1)
Schedule 1.2(j)
Schedule 1.2(1)
Schedule 1.3
Schedule 4.1(d)
Schedule 5.3
Schedule 5.6
Schedule 5.7
Schedule 5.8
Schedule 5.9
Schedule 5.12
Schedule 5.13
Schedule 5.14
Schedule 5.15
Schedule 5.16
Schedule 5.21
Exhibits
Exhibit A
Exhibit B
to Asset
Purchase Agreement:
Legal Description of Land and Addresses of
Properties
Tenant Leases
Seller Leases
Management Agreements
Excluded Assets
Title Commitments and Surveys
Sellers' Conflicts
Financial Statements
ComDliance with ADplicable Laws
Litigati-on
Insurance
Environmental Matters
Pension and Welfare Plans
Permits
List of Condominium Lease Agreements
Equipment Leases and Material Contracts
Proprietary Rights
Purchase Aareement:
Definitions
Elimination Price Reductions
4 1
EXHIBIT A
The following terms when used @-n this Agreement shall have
L-he
indicated meanings:
"Accounts Receivable" has the meaning set forth in
clause (s) of the definition of Purchased Assets.
"Actual Base Caoital Ex-oenditures" means the
amount of base capital expenditures undertaken by Sellers for
the period commencing January 1, 1998 and ending on -Lhe
Closing Date.
"Affiliate,, has the meaning set forth in Section 12b-2
of the Securities Exchange Act of 1934, as amended.
"AGTII has the meaning set forth in Recital G to this
Agreement.
"A-o,olicable Law" means all laws, statutes,
rules, regulations, ordinances and codes of any Governmental
Authority and any Board of Fire Unde--writers and similar
agencies, and any judgment, injunction, order, decree or
other judicial requirement affecting or in any way relating
to the Business and the operation of the ProDerties,
including, without limitation, Environmental Health and
Safety Laws and SEC Laws.
"Assumed Liabilities" has the meaning set forth in
Section 2.1 of this Agreemen'L.
"Base 'Canital Pr6lects" means those normal,
recurring
projects o'L a capital nature that are reflected in Sellers'
1998
budget.
"Books and Records" has t--he meaning set forth in
clause
(q) of the d=-@Lin-Ltion of Purchased Assets.
"Business" has the meani-ng set forth in Recital D to
this Agreement.
"CaDital Leases" means all Leases the obligations
of which are required to be classified and accounted for
under GAAP as capital lease obligations on a balance sheet.
"CanStar" has the meaning set forth in the first
paragraph o@L this Agreement.
"CaDStar ReDresentatives" has the meani-ng set forth in
Section 4.1(c) of this Agreement.
"Closincr" has the meaning set forth in Section. 9.1 of
this Agreement-
42
"Closina Date,, has the meaning set forth in Section 9.1
o'L th'Ls Agreement.
"Closina Da-Le Calculation" has the meaning set forth in
Section 12.2(c) of this Ag--eement.
"Closing Documents" has the meaning set forth in
Section 9.1 of this Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended.
"ComDensation" means the direct salaries and wages
paid to or accrued for the benefit o'L the Employees,
including incentive compensation, together with all fringe
benefits payable to, or accrued for the benefit of, any
executive or other employee, including employer's
contributions under the Federal Insurance Contribution Act,
unemployment compensation, or other employment taxes, pension
fund contributions, workers, compensation, group life and
accident and health insurance premiums, profit sharing,
retirement, disability, maternity leave, and other similar
benefits, accrued vacatibn pay, accrued sick pay, and all
other contributions to, and amounts paid or accrued under,
Dension and other employee health and benefit plans,
'Drograms or policies, including, without limitation, as of
any date, the right to receive any of the foregoing
notwithstanding L-hat such right entitles such Employee to
receive payment at a time a@Lter the date in quest-ion.
"Condominium Lease Aareements" has the meaning set
forth in clause (f) of the definition of Purchased Assets.
"Confidential Ini@ormation" has the meaning set @Lorth in
Section 8.3(a) of this Agreement.
"Consumables" has the meaning set forth in clause (d)
OIL the definition of Purchased Assets.
"Contracts" means, collectively, the Operating
Agreements, Ecruir)ment Leases, Management Agreements and
memberships.
"Co--Dorate Offices" means the offices of Sellers
located at 12800 University Drive, Sui-Les 350 and 420, For-L
Myers, Flori-da.
"Customer and Marketincr Information" has the meaning
set forth in clause (p) of the definition of Purchased
Assets.
"Cutoff Time" has the meaning set 'LorL--h in section 12.1
O@L this Agreemen-L-
43
"Deeds and Convevance Documents" mean the
following documents necessary to convey and assign to CauStar
all o-Lc Sellers' right, title and interest in and to t@e
Purchased Assets:
(a) with respect to the transfer of the Real Property under
this Agreement, a special warranty deed in form and
substance reasonably satisfactory to SSPC and CaDStar,
subject only to the Pe=itted Title Exceptions;
(b) with respect to the transfer of the Personal Property
@other than the Personal Property covered under clauses
(d),(e) and (f) of this definition) under this
Agreement, a Bi-11 of Sale in form and substance
reasonably satisfactory to SSPC and Ca7oStar;
(c) with respect to the assignment of the Tenant Leases, the
Pink Shell Lease, the Safety Harbor Ground Lease, Seller
Leases and Condominium Lease Agreements under this
Agreement, an Assignment and Assumption of Leases in
form and substance reasonably satisfactory to SSPC and
CapStar;
(d) with respect to the assignment of the Operating
Agreements, Equipment Leases, the Pink Shell Management
Agreement, Management Agreements, Mem.berships and
Pe=its under this Agreement, an Assignment and
AssumDtion of Operating Agreements in fo= and substance
reasonably satis-Lcactory to SSPC and CaDStar;
(e) with respecl-- to the L--ransfer of any Intellectual
Property, Reservations and other intangible Personal
Property under this Agreement, an Assignment and
Assumption Agreement in form and substance reasonably
satisfactory to SSPC and CaDStar.
"Due Diliqence Period" has the meaning set forth in
Section 4.1 of this Agreement.
"EmD!ovees" means all emvloyees of SSRC, SSPC and SHMC
employed exclusively in connection wi-Lh the Business.
"Environmental Claims" means any claim for
reimbursement or remediation expense, contribution, personal
inju--y, proverty damage or damage to natural resources made
in writing by or on behal'L of any third party including,
without limitation, any Governmental Authority, relating to
or arising
Id A
out of the release of any F-azardous Substances or the
violation
of any Environmental, Health and Safety Laws.
"Environmental, Health and Safetv Laws" means any
federal, state, or local statute, law, rule, regulation,
ordinance and code of any Governmental Authority, and any
judgment, injunction, order, decree or other judicial
requirement which regulates or controls (i) Dollution,
contamination, or the condition of groundwater, sur'Lace
water, soil, sediment, air or the workplace or (ii) a spill,
leak, emission, discharge, release or disposal into
groundwater, surface water, soil, sediment, dir or the
workplace, including without limitation the federal
Comprehensive, Environmental Response, Compensation, and
Liability Act ("CERCLAII) , 42 U.S.C. 9601 e-L- sea., as
amended; the federal Resource Conservation and Recovery Act
("RCPAll), 42 U.S.C. 6901 et sea., as amended; the
Hazardous Materials Transportation Act (11 HMT-Z.") , 49 U.S.
C. 1801 et sea., as amended; the Toxic Subs'Lances Control
Ac-L ("TSCAII), is u.s.c. 2601 et sea., as amended; the
Clean Air Act ("CA-k"), 42 U.S.C. 7401 et sea., as amended;
the Clean Water Act ("CWA"), 33 U.S.C. 1251 et sea., as
amended; the Safe Drinking Water Act .(IISDWAIT), 42 U.S.C.
300f et sea., as amended; the Emergency Planning and
Community Right to Know Act ("EPCPAll) , 42 U.S. C. 11001
et sea., as amended; the Federal, Insecticide, Fungicide and
Rodenticide Act ("FIFR-z,") , 7 U.S.C. 136 et ' sea., as
amended; the Occupational Safety and Health Act ("OSHA"), 29
U.S.C. 651 et secr., as amended; the National Environmental
Policy Act ("NEPAII) , 42 U.S. C. 4321 et secr. , as
amended; any similar state or local statutes or ordinances,
and the regulations promulgated thereunder.
"Ecrui,oment Leases" has the meaning set forth in
clause
(m) of the definition o'L Purchased Assets.
"ERISAII means the Employee Retirement Income
Security Act of 1974, as amended, and the regulations,
interpretations and exemptions promulgated thereunder.
"Excluded Assets" has the meaning set forth in
Section
1.3 of this Agreement.
"Excluded Liabilities" has the meaning set forth in
Section 2.2 of thi-s Agreement-.
"Existing Survevs" has the meaning set forth in Section
4.1(d) of this Agreement.
"Financi-al SL@atements" has the meaning set forth in
Section 5.6 of this Agreement.
"Fixtures and Tanaible Personal Pro-c>ertv" has
the meaning set forth i-n clause (c) o'L the definition of
Purchased Assets.
45
"GAAP" means generally accepted accounting principles,
consis,--ently ai)-olied.
"Governmental Authoritv" means any nation or
government, any state or other political subdivision thereof
or any entity exercising executive, legislative, judicial,
regulato--y or administrative functions of or pertaining to
government, i-n each case to the extent the same has
jurisdiction over the person or property i-n question.
"Hazardous Substances" means any toxic substance,
. hazardous substance, hazardous waste, hazardous material,
soli-d waste, residual waste, infectious waste, contaminant,
pollutant, or constituent L--hereof, whether solid,
semisolid, liquid or gaseous, which are regulated, listed or
controlled by Environmental, Health and Safety Laws.
"Imnrovements" has the meani-ng set forth in clause (b)
of the definition of Purchased Assets.
"Indemnification Loss" or "Indemnification Losses"
have the meaning set forth in Sections 11.2 and 11.3 of this
Agreement.
"Indemnified Partv" has the meaning set forth in
Section 11.5 of this Agreement.
"Indemnifying Partv" has the meaning set forth in
Section 11.5 of this Agreement.
"Indemniteell means either a Seller Indemnitee or a
Purchaser Indemnitee, as the case may be.
"Indemnitv Ex-oiration Date" has the meaning set
forth
4n Section 11.1 of this Agreement.
L
"Insurance Policies" has the meaning set forth in
Section 5.9 of this Agreement.
"Intellectual ProoertV" has the meaning seL-- forth in
clause (p) of the definition of Purchased Assets.
"KnowledcTell means, (i) with respect to any
Seller, the current actual knowledge of Robert M. Taylor,
Timothy R. Bogott, Richard E. Krichbaum or Judy Emens (a'Lter
due @-nquiry of the general managers of the Properties) and
shall not be construed to refer to the knowledge of any other
trustee, partner, officer, director, agent, employee or
representative of any Seller, or any Affiliate of any Seller;
and (ii) with respect to either Purchase--, the current
actual knowledge of John Plunket, William Reynolds, Troy
Furbay, Robin Kirk, John Emery and David McCasli-n, and shall
not be construed to refer to the knowledge of any other
trustee, partner, o@L'Li-cer, director, agent, employee or
46
represenL@-ati-ve of either Purchaser or any A'Lfiliate of
either Purchaser, or any matter disclosed by Sellers to
Purchasers in w'riting pursuant to Article V or Article VI
hereof-
"Land" has the meaning set forth in clause (a) of the
definition of Purchased Assets.
"Leases" means, collectively, the Condominium Lease
Agreements, Seller Leases and Tenant Leases.
"Liabilities" means any liability, obligation,
loss 'in value, damage, cost or expense of any nature
whatsoever, whether now known or unknown, asserted or
unasserted, accrued or unaccrued, liquidated or unli-
quidated, due or to become due, including, without
limitation, any liability with respect to taxes of any kind
whatsoever that relate to any of the Purchased Assets or the
Busi-ness.
"Management Agreements" has the meaning set forth in
clause (k) o'L the definition of Purchased Assets.
"Manaaement Level EmDlovees'l means all salaried
Em-oloyees of SHMC having an annual salary of $25,000 or
more.
"Marco" has the meaning se-L forth in Recital F of this
Agreement.
"Material Adverse Ef 1-@ect 11 means, with respect
to Sellers, a material adverse e@Lfect on the business,
assets, properties or liabilities of Sellers taken as a
whole, and with respect tb Purchasers, a material adverse
effec-L on the business, asseL--s, properties or liabilities
of Purchasers taken as a whole.
"Ma'L--erial Contract" means any Operating
Agreements a-nd EquiT)ment Leases requiring aggregate
remaining paymen-Ls in excess of Fifty Thousand Dollars
($50,000).
"Membershir)sll has the meaning set forth in clause (g)
of the definition of Purchased Assets.
"Meraer" has the meaning set forth in Recital G of this
Agreement.
"ODerating Aareemen-s" has the meaning set forth
in
L:5
clause (1) o'L the definition of Purchased Assets.
"Ordinary Course o@L Business" means with respect
to the Business and each Property the ordinary course of
business consistent with past custom and practices for the
Business and such Pro@rty.
"Other Aareement" has the meaning set forth in Recital
F of this Agreement.
4 7
"Pension Plans" has the meani-ng set forth in Section
5.13(a) of this Agreement.
"Permits" has the meaning set forth in clause (n) of
the de@Linition of Purchased Assets.
"Permitted Title Exceoti..o.n.s-" has the meaning set forth
in Section 4.1(d) of this Agreement.
"Personal ProDert-VII means, collectively, all of the
Purchased Assets other than the Real Property.
"Pink Shell" has the meaning set forth in Recital C to
this Agreement.
"Pink Shell Lease" has the meaning set forth in Recital
C to this Agreem7ent.
"Pink ' Shell Manaaement Aareement" means that
certain Management Agreement, dated January 1, 1995, between
Florida Income Fund III, Limited Partnership, an Iowa limited
partnership, and SSRC.
"P.i-nk Shell FF&E Purchase Agreement" has the meaning
set forl-h in Recital C to this Agreement.
"Pink Shell FF&E Consideration" has the meaning set
forth in Re a@tal'C to this AgreemenL-.
"Pink Shell Purchase Agreement" has the meaning set
forth i-n Recital C to this Agre6ment.
"Plans" has the meaning set forth in Section 5.13(a) of
this Agreement.
"Pro@ect CaDital Exr)end@tures" means all non-
recurring, extraordinary, special -Droject capital
expenditures (other than any work undertaken with the
proceeds of the Unit Rehab Loan) incurred by Sellers in
excess of Sellers' Base Capital Projects.
"Pro-oertvll and "Prolperties" have the meaning set forth
in Recital D to this Agreement.
"Pro-oerty Re-oorts" has the meaning set forth in
clause
(r) of the definition of Purchased Assets.
"Pronrietarv Riahts" has the meaning set f. orth in
Section 5.21 of this Agreement.
"Prorated Base Budaeted Canital Ex-oenditures"
means $130,500 multiplied by the number of full months from
January 1, 1998 to, but noL-- including, the month of
Closing.
4 8
"Prosnective Purchaser" has the mean ing set forth in
ReciL--al C to this Agreement.
"Purchased Assets" means the following:
(a) The land described on Schedule 1.2(a), along
with all appurtenant rights, easements, rights-of-way and
privileges relating thereto and landscaping located thereon
(the "Land") ;
(b) All buildings, structures and improvements on
or affixed to the Land, including fixtures constituting real
properl-y under Applicable Law (-@he "Improvements"; the Land
and the Improvements are referred to herei-n collectively as
the "Real ProperL@-y'l);
(c) All fixtures, furniture, furnishings,
fittings, equipment--, machinery, appliances, vehicles,
computer hardware, art work and other articles of tangible
personal property (together with all warranties and
guaranties with respect thereto, to the exten-L
transferable), which are used or usable or have been ordered
for future use in connection with the operation of the Busi-
ness and which are located at the SSPC Owned Properties, the
Pink Shell or Safety Harbor or which are owned by SSRC
(wherever located), other than the Consumables and SuDply
Inventories (the "Fixtures and Tangible Personal Property");
(d) All food and beverages (alcoholic and
nonalcoholic) that are held for sale, whether opened or
unopened, which are used or held in reserve or ordered fo'r
future use in connection with the operation of the Business
and which are located at the SSPC Owned Properties, the Pink
Shell or Safety Harbor or which are owned by SSRC (wherever
located) at normal operating levels, and including all
resupplies and reiDlacemenL-s in the Ordinary Cou--se of
'Rusiness prior to the Closing Date (the "Consumables'l);
(e) All chi-na, glassware, silverware; linens;
uniforms; engineering, maintenance, cleaning and housekeeping
supplies; matches and ashtrays; soap and other toiletries;
stationery, menus and other printed materials; and all other
materials and supplies, whether in use or held in reserve or
ordered 'Lor 'Luture use in connection with the operation of
the Business and located at the SSPC Owned Properties, the
Pink Shell or Safety Harbor or which are owned by SSRC
(wherever located) at no=al operating levels, and including
all resupplies, substitutions and replacements in the
Ordinary Course of Business prior to the Closing Date (the
"Sur)ply inventories");
(f) All guaranteed lease agreements, rental
agreements and other similar agreements between any Seller
and owners of individual condominium units or Drivate
residences for the shortterm rental of such units or
residences by such Seller to third
49
Darties on behalf of such owners at Sundial and Sanibel Inn
(the
,,Condominium Lease Agreements,,);
(g) All memberships and membership agreements for
access to or the use of any of the facilities at any
Property, the Pink Shell or Safety Harbor (the
"Memberships,,);
(h) All bookings and reservations for (i) guest
rooms and conference, convention and banquet rooms or other
facilities at the Properties, the Pink Shell and Safety
Harbor, and (ii) the condominium units or private residences
under Condominium Lease Agreements (the "Reservations");
(i) The leases, subleases and similar agreements
(including all amendments, modi@Lications and supplements
thereto and guaranties, extensions and renewals thereof5
listed on Schedule 1.2(i) for the use or occupancy by third
parties of any portion of the Real Property (other than the
Reservations)(the "Tenant Leases''),-
(j) The leases, subleases and similar agreements
(including all amendments, modifications and supplements
thereto and guaranties, extensions and renewals thereof)
listed on Schedule 1.2(i) for the use or occupancy by Sellers
of real property (the "Seller Leases,,);
(k) The management agreements listed on Schedule
1.2(l) (the "Management Agreements");
(1) All service and maintenance contracts, credit
card service agreements, booking and reservation agreements,
brokerage and commission agreements, and all other contracts
and agreements (including all amendments, modifications and
suDDlements thereto and extensions and renewals thereof, and
all warranties and guaranties thereunder to the extent
transferable) which are held by any Seller in connection with
the Business or operation of the Properties, the Pink Shell
or Safety Harbor, other than the Condominium Lease
Agreements, Memberships, Seller Leases, Tenant Leases,
Management Agreements and Equipment Leases (the "Operating
Agreements");
(m) All leases and purchase money security
agreements .Lor any Fixtures and Tangible Personal Property
(including all amendments, modifications and supplements
thereto and extension and renewals thereof, and all
warranties and guaranties thereunder to the extent
transferable) which are held by any Seller i-n connection
with the Business or overation of the Properties, the Pink
Shell or Sa@Lety Harbor, other than the Condominium Lease
Agreements, Memberships, Seller Leases, Tenant Leases,
Management Agreements and OperaL--ing Agreements (the
"Equipment Leases");
5 0
(n) All licenses, De--mits, consents,
authorizations, approvals and certi-Lcicates of any
Governmental Authority used in connection with the Business
or operation of the Properties, the Pink Shell or Safety
Harbor (to t@e extent the same are transferable) (the
"Permits");
(o) All of the following owned by, issued to or
licensed to any Seller and used in connection with the
Business or operation of the Properties, the Pink Shell or
Safety Harbor (to the extent the same are transferable) : (i)
trademarks, trade names (including, without limitation, the
names of the Properties set forth in the recitals to this
Agreement), service marks, trade dress, symbols and logos,
together w@-th all goodwill associated therewith, and all
registrations, applications, renewals, adaptations,
derivations and combinations thereof; (ii-) copyrights an@
covyrightable works and all registration, applications and
renewals therefor; (iii) trade secrets and confidential
information (including, without limitation, ideas, drawings,
specifications designs, plans, proposals, financial and
accounting data, business and marketing plans) ; (iv)
computer software; (v) all other intellectual property
rights; and (vi) all copies and tangible embodiments of the
foregoing (in whatever .Lorm or medium) (the "Intellectual
Property");
(p) All guest lists, customer files, group files,
sales records, sales literature and brochures and other
written marketing materials, and all telephone numbers used
in the Business or operation of the ProDerties, the P@-nk
Shell and Safety Harbor, and all goodwill associated with the
Properties and the SHMC Lease (the "Cus-Lomer and Marketing
Information");
(q) All books and records, ledgers,
correspondence and other @Liles and documents maintained by
or on behalf of Sellers in connection with the Business or
operation of the Properties, L-he Pink Shell and Safety
Harbor (the "Books and Recordsil) ;
(r) All blueprints, plans and specifications,
engineering and environmental reports and studies relating to
the Real Pro-oerty, to the exten-L the same exist and are
transferable, (the "Property Reports");
(s) Subject to Section 12.1(i) hereof, all trade
accounts receivable, notes receivable and other receivables
(the "Accounts Receivable"), and all claims, deposits,
refunds, causes of acti-on, rights o@L --econvey, ri-ghts ol-
@ setoff, rights of recou-Dment and investments, and -prepaid
expenses in connection with the Business or onerati-on or-
t@e Properties, the Pink Shell and the SafeL--y Harbor.-
(t) All cash in house banks at the Properties, the
Pink Shell and aL-- Safety Harbor;
(u) The Sa-Fety Harbor Ground Lease;
51
(v) The Pink Shell FF&E Purchase Agreement;
provided, however, that the payment of the Pink Shell @rF&E
Considerati-on shall remai-n the liability of Sellers;
(w) The Pink Shell Management Agreement;
(x) The Pink Shell Lease; and
(y) The Vacation Planning Center Lease.
"Purchase Price" has the meaning set forth in
Section
3.1 of this Agreement.
"Purchaser" has the meaning set forth in the first
paragraph of this Agreement.
e
e
s
"
h
a
v
e
"Purchaser Indemniteell and "Purchaser Indemnit
the meaning set forth in Section 11.3 of this Agreement.
"Real ProDerL-vll has the meaning set forth in clause (b)
of the defi action of Purchased Assets.
"Reservations" has the meaning set forth in clause (h)
of the definition of Purchased Assets.
"Safetv Harbor" has the meaning set forth in Recital B
to this Agreement.
"Safetv Harbor Ground Lease" means that certain
Lease Agreement, dated June 14, 1995, between Safety Harbor
Spa & Fitness Center, Inc., a Florida corporation, as
landlord, and S-HMC, as tenant, with respect to Safety
Harbor, as amended by that certain First Lease A-mendment,
dated January 29, 1997.
"Sanibel Inn" has the meaning set forthlin Recital A to
this Agreement.
"Seaside" has the meaning set forth in Recital A to
this Agreement.
"SEC Laws" means The Securities Act of 1933, as
amended, The Securi-ties Exchange Act of 1934, as
amended,other federal and state laws advlicable to
securities.
and all
"Seller Leases" has the meaning set forth in clause (j)
of the definition of Purchased Assets.
"Seller Indemniteell-and "Seller Indemnitees" have the
meaning set forth in Section 11.2 of this Agreement.
"Settlement Statement" has the meaning set forth in
Section 12.2 of this Agreement.
52
"SHMC" has the meaning set forth in the first idaragraph
of this Agreement.
IISS&CPII has the meaning set forth in Recital F of this
Agreement.
IISSEIII has the meaning set forth in L--he first paragraoh
of this Agreement.
IISSPCII has the meaning set forth in the first paragraph
of this Agreement.
IISSPC Owned Pro-oerty" and IISSPC Owned Pror)erties" have
the meaning set forl--h in Recital A to this Agreement.
IISSPC Renorts" has the meaning set forth in Section 5.6
of this Agreement.
IISSRC" has the meaning set forth in the first paragraph
of this Agreement.
IISSRLP" has the meaning set forth in Recital F of this
Agreement.
"Sundial,, has the meaning set forl-h in Recital A to
this Agreement.
"SunDly Inventories" has the meaning set forth in
clause (e) of the definition of Purchased Assets.
"Taxes" means any federal, state, local or foreign
Income, gross receipts, license, Dayroll, employment, excise,
severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, capital stock, @Lranchise,
profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use,
room, occupancy, beach renourishment, vault, transfer,
registration, ad valorem, betterment assessments, value
added, alternative or add-on minimum, estimated or other tax,
charges or fees of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or
not, and including any obligation to indemnify or otherwise
assume or succeed to such tax liability of any other person.
"Tenant Leases" has the meaning set forth in clause (i)
of the defii-iition of Purchased Assets.
Time o'L Closing" has the meaning set forth in
Section
9.1 of this Agreement.
"Title Commi-Lments" has -Lhe meaning set forth in
Section 441(d) of this Agreement.
53
"Title Comnany" means First American Title Insurance
ComDany, Washington, D.C.
"Title Policies" has the meaning set forth in Sectic)n
4.1(d) o'L this Agreement.
"Transferred Emnloyees" has the meaning set forth in
Section 8.3(c) of this Agreement.
"Vacation Plannincr Center Lease" means the Lease
Agreement, dated May 24, 1994, between Health Park Medical
Pla'za One Associates, Ltd., as landlord, and SSRC, as
tenant, and the unexecuted Lease Agreement, dated February
14, 1995, between Lee Health Ventures, Inc., as landlord, and
SSRC, as tenant.
"Welfare Plans" has the meaning set forth in Section
5.13(a) of this Agreement.
EXHIBIT B
Property Elimination Price
Seaside Inn 5,500,000
Vacation Planning Center 0
Pink Shell Lease/Mgmt Fee 2,500,000
Sundial 18,600,000
Sanibel Inn 13,750,000
Safety Harbor 5,150,000
