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EXHIBIT 2.1
PURCHASE AGREEMENT
DATED AS OF MAY ____, 1998
BETWEEN
▇▇▇▇▇ INVESTMENTS, INC.
AS SELLER,
AND
▇▇▇▇▇▇▇▇ HOSPITALITY LIMITED PARTNERSHIP,
A VIRGINIA LIMITED PARTNERSHIP
AS PURCHASER
BEST WESTERN HOTEL
ELLENTON, FLORIDA
HAMPTON INN HOTEL,
BRANDON, FLORIDA
SHONEY'S INN
ELLENTON, FLORIDA
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of May ____, 1998 between ▇▇▇▇▇
INVESTMENTS, INC. (the Seller), and ▇▇▇▇▇▇▇▇ HOSPITALITY LIMITED PARTNERSHIP,
a Virginia limited partnership (the Purchaser), provides:
ARTICLE 1
DEFINITIONS; RULES OF CONSTRUCTION
1.1 Definitions. The following terms shall have the indicated
meanings:
"Act of Bankruptcy" shall mean if a party hereto or any principal
thereof shall (a) apply for or consent to the appointment of, or the taking
of possession by, a receiver, custodian, trustee or liquidator of itself or
of all or a substantial part of its property, (b) admit in writing its
inability to pay its debts as they become due, (c) make a general assignment
for the benefit of its creditors, (d) file a voluntary petition or commence a
voluntary case or proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect), (e) be adjudicated a bankrupt or insolvent, (f) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts,
(g) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case or
proceeding under the Federal Bankruptcy Code (as now or hereafter in effect),
or (h) take any action for the purpose of effecting any of the foregoing; or
if a proceeding or case shall be commenced, without the application or
consent of a party hereto or any principal thereof, in any court of competent
jurisdiction seeking (a) the liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of debts, of such party or
principal, (b) the appointment of a receiver, custodian, trustee or
liquidator or such party or principal of all or any substantial part of its
assets, or (c) other similar relief under any law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts,
and such proceeding or case shall continue undismissed, or an order
(including an order for relief entered in an involuntary case under the
Federal Bankruptcy Code, as now or hereafter in effect) judgment or decree
approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 60 consecutive days.
"Assignment and Assumption Agreement" shall mean that certain
assignment and assumption agreement whereby Seller (a) assigns and the
Purchaser assumes the Operating Agreements that have not been canceled at
Purchaser's request and (b) assigns all of the Seller's right, title and
interest in and to the Intangible Personal Property, to the extent assignable.
"Authorizations" shall mean all licenses, permits and approvals
required by any governmental or quasi-governmental agency, body or officer
for the ownership, operation and use of the Property or any part thereof.
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"Best Western Hotel" shall mean the 73-room hotel and related
amenities located on the Best Western Land.
"Best Western Land" shall mean that certain parcel of real
estate lying and being in Manatee County, Florida, as more particularly
described on Exhibit A attached hereto, together with all easements, rights,
privileges, remainders, reversions and appurtenances thereunto belonging or
in any way appertaining, and all of the estate, right, title, interest, claim
or demand whatsoever of the Seller therein, in the streets and ways adjacent
thereto and in the beds thereof, either at law or in equity, in possession or
expectancy, now or hereafter acquired.
"▇▇▇▇ of Sale - Inventory" shall mean that certain ▇▇▇▇ of sale
conveying title to the Inventory to the Purchaser's property manager, lessee
or designee.
"▇▇▇▇ of Sale - Personal Property" shall mean that certain ▇▇▇▇
of sale conveying title to the Tangible Personal Property or, with respect
to, Intangible Personal Property and the Reservation System from the Seller
to the Purchaser's property manager, lessee or designee.
"Closing" shall mean the closing of the purchase and sale of the
Property.
"Closing Date" shall mean the date on which the Closing occurs.
"Deed" shall mean those certain deeds conveying title to the
Real Property with general warranty covenants of title from the Seller to the
Purchaser, subject only to Permitted Title Exceptions. If there is any
difference between the descriptions of the Land, as shown on Exhibit A
attached hereto and the descriptions of the Land as shown on the Survey, the
descriptions of the Land to be contained in the Deed and the descriptions of
the Land set forth in the Title Commitment shall conform to the description
shown on the Survey.
"Deposit" shall mean all amounts deposited from time to time
with the Escrow Agent by the Purchaser pursuant to Sections 2.2 and 6.1, plus
all interest accrued thereon. The Deposit shall be invested by the Escrow
Agent in a commercial bank or banks, at money market rates and shall be held
and disbursed by the Escrow Agent in strict accordance with the terms and
provisions of this Agreement.
"Escrow Agent" shall mean ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP.
"Governmental Body" means any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
"Hampton Hotel" shall mean the 80-room hotel and related
amenities located on the Hampton Land.
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"Hampton Land" shall mean that certain parcel of real estate
lying and being in Hillsborough County, Florida, as more particularly
described on Exhibit A attached hereto, together with all easements, rights,
privileges, remainders, reversions and appurtenances thereunto belonging or
in any way appertaining, and all of the estate, right, title, interest, claim
or demand whatsoever of the Seller therein, in the streets and ways adjacent
thereto and in the beds thereof, either at law or in equity, in possession or
expectancy, now or hereafter acquired.
"Hotels" shall mean the Best Western Hotel, the Hampton Hotel
and the Shoney's Hotel.
"Improvements" shall mean the Hotels and all other buildings,
improvements, fixtures and other items of real estate located on the Land.
"Income Tax Certificate" shall mean the affidavit of the Seller
certifying (I) that the Seller is not a foreign corporation, foreign
partnership, foreign trust, foreign estate or foreign person (as those terms
are defined in the Internal Revenue Code and the Income Tax Regulations)
under Section 1445 of the Internal Revenue Code, (ii) the information to
complete IRS Form 1099S, and (iii) the information to complete any required
state income or recordation tax reporting requirement, prepared by counsel to
the Purchaser and in form and substance reasonably acceptable to the
Purchaser.
"Intangible Personal Property" shall mean all intangible
personal property owned or possessed by the Seller and used in connection
with the ownership, operation, leasing, occupancy or maintenance of the
Property, including, without limitation, the right to use any trade name
associated with the Real Property and all variations thereof, all of the
Leases and any future leases of space in the Property, all Operating
Agreements, Authorizations, escrow accounts, insurance policies, general
intangibles, business records, plans and specifications, surveys and title
insurance polices pertaining to the Real Property, the Tangible Personal
Property and intangible personal property, all licenses, permits and
approvals with respect to the construction, ownership, operation, leasing,
occupancy or maintenance of the Property and any unpaid award for taking by
condemnation or any damage to the Land by reason of a change of grade or
location of or access to any street or highway, and the share of the Tray
Ledger determined under Section 6.5, but excluding (i) any of the aforesaid
rights the Purchaser elects not to acquire and (ii) the Seller's cash on
hand, in bank accounts and invested with financial institutions, and (iii)
the accounts receivable except for the above described share of the Tray
Ledger.
"Inventory" shall mean all "inventories of merchandise" and
"inventories of supplies", as such terms are defined in the Uniform System of
Accounts for Hotels [8th Revised Edition, 1986] as published by the Hotel
Association of New York City, Inc., as revised, and similar consumable
supplies.
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"Land" shall mean the Best Western Land, the Hampton Land and
the Shoney's Land.
"Leases" shall mean all of the leases, if any, now in effect
with respect to the Property or any portion thereof, under which the Seller
is either a landlord or tenant, and all addenda, modifications or amendments
thereto, as indicated on the Rent Roll, certified true copies of which have
been delivered by the Seller to the Purchaser.
"Operating Agreements" shall mean the management agreements,
service contracts and other agreements, if any, in effect with respect to the
construction, ownership, operation, leasing, occupancy or maintenance of the
Property. All of the Operating Agreements in force and effect as of the date
hereof are listed on Exhibit B attached hereto.
"Owner's Title Policy" shall mean an owner's policy of title
insurance (ALTA Form B-1970) issued to the Purchaser by the Title Company,
pursuant to which the Title Company insures the Purchaser's ownership of fee
simple title to the Real Property (including the marketability thereof),
subject only to Permitted Title Exceptions (which shall exclude all
preprinted, standard, general or similar exceptions), and which provides such
affirmative coverages and endorsements reasonably requested by the
Purchaser. The Owner's Title Policy shall insure the Purchaser in the amount
of the Purchase Price and shall be acceptable in form and substance to the
Purchaser. The description of the Land in the Owner's Title Policy shall be
by courses and distances and shall be identical to the description shown on
the Survey.
"Permitted Title Exceptions" shall mean those exceptions to
title to the Real Property that the Purchaser, in its sole discretion, agrees
in writing to accept.
"Property" shall mean collectively the Real Property, the
Inventory, the Tangible Personal Property and the Intangible Personal
Property for all three of the Hotels.
"Purchase Price" shall mean Ten Million Seven Hundred and Fifty
Thousand Dollars ($10,750,000).
"Real Property" shall mean the Land and the Improvements.
"Reservation System" shall mean the Seller's Reservation
Terminal and Reservation System, Equipment and Software, if any.
"Seller's Financial Information" shall mean that certain
financial information relative to the Seller and the Property, including
audited income and expense statements for the Property for the immediately
preceding three years, copies of which are attached hereto as Exhibit C.
"Shoney's Hotel" shall mean the 63-room hotel and related
amenities located on the Shoney's Land.
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"Shoney's Land" shall mean that certain parcel of real estate
lying and being in Manatee County, Florida, as more particularly described on
Exhibit A attached hereto, together with all easements, rights, privileges,
remainders, reversions and appurtenances thereunto belonging or in any way
appertaining, and all of the estate, right, title, interest, claim or demand
whatsoever of the Seller therein, in the streets and ways adjacent thereto
and in the beds thereof, either at law or in equity, in possession or
expectancy, now or hereafter acquired.
"Study Period" shall mean the period commencing at 9:00 a.m. on
the date hereof, and continuing through 5:00 p.m. on the date that is thirty
days from the date hereof. The time periods herein referred to shall mean
the time periods as in effect, from time to time, in Brandon, Florida.
"Surveys" shall mean the surveys to be delivered pursuant to
Section 5.4.
"Tangible Personal Property" shall mean the items of personal
property owned by the Seller, used in connection with the Property,
including, without limitation, those items listed on Exhibit D hereto.
"Title Commitment" shall mean the commitments by the Title
Company to issue for each of the Hotels the Owner's Title Policy.
"Title Company" shall mean a title insurance company selected by
the Purchaser and authorized to conduct a title insurance business in the
states wherein the Property is located.
"Tray Ledger" shall mean the final night's room revenue (revenue
from rooms occupied as of 12:01 a.m. on the Closing Date, exclusive of food,
beverage, telephone and similar charges which shall be retained by the
Seller), including any sales taxes, room taxes or other taxes thereon.
"Utilities" shall mean public sanitary and storm sewers, natural
gas, telephone, public water facilities, electrical facilities, cable
television facilities and all other utility facilities and services necessary
for the operation and occupancy of the Property.
1.2 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 vice versa, and the masculine shall include the feminine and
the neuter.
(b) All references herein to particular articles, sections or
subsections, subsections or clauses are references to articles, sections,
subsections or clauses of this Agreement.
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(c) The headings contained herein are solely for convenience of
reference and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.
(d) Each party hereto and its counsel have reviewed and revised
(or requested revisions of) this Agreement, and therefore any usual rules of
construction requiring that ambiguities are to be resolved against a
particular party shall not be applicable in the construction and
interpretation of this Agreement or any exhibits hereto or amendments hereof.
ARTICLE 2
PURCHASE AND SALE; ACCESS; STUDY PERIOD;
PAYMENT OF PURCHASE PRICE
2.1 Purchase and Sale. The Seller agrees to sell and the Purchaser
agrees to acquire the Property for the Purchase Price and in accordance with
the other terms and conditions set forth herein.
2.2 Deposit. Simultaneously with the execution hereof, the
Purchaser has made an initial deposit of $100,000, by check, with the Escrow
Agent and pursuant to Section 6.1, the Purchaser may make additional payments
to extend the Closing Date (all payments and interest accrued thereon
referred to as the "Deposit"). The Escrow Agent shall clear said check(s)
and shall hold the Deposit at money market rates pursuant to the terms,
considerations and provisions of this Agreement. The initial Deposit shall
be returned to Purchaser if it fails, prior to the end of the Study Period,
to notify the Seller in writing, pursuant to Section 2.3, that the Purchaser
elects to proceed to Closing. The Deposit shall be (a) applied at the
Closing against the Purchase Price, (b) returned to the Purchaser pursuant to
Section 8.3 or (c) paid to the Seller pursuant to Section 8.4.
2.3 Study Period. (a) The Purchaser shall have the right, until
5:00 p.m. on the last day of the Study Period, and thereafter if the
Purchaser notifies the Seller that the Purchaser has elected to proceed to
Closing in the manner described below, to enter upon the Real Property and to
perform, at the Purchaser's expense, such economic, surveying, engineering,
topographic, environmental and marketing tests, studies and investigations as
the Purchaser may deem appropriate. If such tests, studies and
investigations warrant, in the Purchaser's sole, absolute and unreviewable
discretion, the purchase of the Property for the purposes contemplated by the
Purchaser, then the Purchaser may elect to proceed to Closing and shall so
notify the Seller and the Escrow Agent, in writing, prior to the expiration
of the Study Period. If for any reason the Purchaser does not so notify the
Seller and the Escrow Agent of its determination to proceed to Closing to
purchase all of the Hotels prior to the expiration of the Study Period, or if
the Purchaser notifies the Seller and the Escrow Agent, in writing, prior to
the expiration of the Study Period that it has determined not to proceed to
Closing to purchase all of the Hotels, this
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Agreement automatically shall terminate, the Deposit shall be returned to the
Purchaser and upon the return of the Deposit, the Purchaser and the Escrow Agent
shall be released from any further liability or obligation under this Agreement.
(b) During the Study Period, the Seller shall make available to
the Purchaser, its agents, auditors, engineers, attorneys and other
designees, for inspection and/or copying, copies of all existing
architectural and engineering studies, surveys, title insurance policies,
zoning and site plan materials, correspondence, environmental audits and
reviews, books, records, tax returns, bank statements, financial statements,
advance reservations and room bookings and function bookings, rate schedules
and any and all other materials or information relating to the Property which
are in, or come into, the Seller's possession or control.
(c) The Purchaser shall indemnify and defend the Seller against
any loss, damage or claim arising from entry upon the Real Property by the
Purchaser or any agents, contractors or employees of the Purchaser. The
Purchaser, at its own expense, shall restore any damage to the Property
caused by any of the tests or studies made by the Purchaser.
(d) The Seller agrees to provide to the Purchaser, within five
business days following the date of this Agreement, a copy of any existing
title insurance policies which the Purchaser may have in its possession or
control covering the Real Property, together with legible copies of all
exception documents referred to therein, and the Surveys. During the Study
Period, the Purchaser, at its expense, shall cause an examination of title to
the Property to be made, and prior to the expiration of the Study Period,
shall notify the Seller of any defects in title shown by such examination
that the Purchaser is unwilling to accept. Within ten days after such
notification, which ten day period may extend beyond the Study Period (the
"Title Response Period"), the Seller shall notify the Purchaser whether the
Seller is willing to cure such defects. If the Purchaser agrees to proceed
to Closing prior to the end of the Study Period but before the Seller
responds to title issues during the Title Response Period, the Purchaser
shall not have waived any of its rights with regard to title issues as set
forth herein. If the Seller is willing to cure such defects, the Seller
shall act promptly and diligently to cure such defects at its expense. If
such defects consist of mortgages, deeds of trust, construction or mechanics'
liens, tax liens or other liens or charges in a fixed sum or capable of
computation as a fixed sum, then, to that extent, and notwithstanding the
foregoing, the Seller shall be obligated to pay and discharge and the Escrow
Agent is authorized to pay and discharge at Closing such defects at Closing.
For such purposes, the Seller may use all or a portion of the cash to close.
If the Seller is unable to cure such defects by Closing, after having
attempted to do so diligently and in good faith, the Purchaser shall elect
(1) to waive such defects and proceed to Closing without any abatement in the
Purchase Price or (2) to terminate this Agreement and receive a full refund
of the Deposit. The Seller shall not, after the date of this Agreement,
subject the Property to any liens, encumbrances, covenants, conditions,
restrictions, easements or other title matters or seek any zoning changes or
take any other action which may affect or modify the status of title without
the Purchaser's prior written consent. All title matters revealed by the
Purchaser's title examination and not objected to by the Purchaser as
provided above shall be deemed Permitted Title
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Exceptions. Notwithstanding the foregoing, the Purchaser shall not be required
to take title to the Property subject to any matters which may arise subsequent
to the effective date of its examination of title to the Property made during
the Study Period. In addition, if the Purchaser, after the Study Period,
determines that a defect in title exists for any of the Best Western Land, the
Hampton Land or the Shoney's Land, the Purchaser shall elect to purchase none or
all of the Hotels.
2.4 Inspection of Books and Records; Access. The Purchaser, from
the date hereof until termination of this Agreement, shall have complete and
free access during normal business hours to all documents, agreements and
other information in the possession of the Seller and its agents pertaining
to the ownership, use, rental and operation of the Property and to the
Seller's representations, warranties and covenants set forth herein,
including but not limited to financial records, tax assessments, bills and
leases, and the Purchaser shall have the right to inspect and make copies of
the same. The Seller hereby grants to the Purchaser and its officers,
agents, servants, employees, assigns and independent contractors a license to
enter upon the Property and the full right of access to the Real Property for
the purposes of inspecting the condition or status of the Property and the
books and records maintained by the Seller or its agents with respect to the
Property, undertaking any tests and inspections desired by Purchaser
hereunder and verifying the Seller's representations, warranties and
covenants set forth herein.
2.5 Payment of Purchase Price. The Purchase Price shall be paid to
the Seller in the following manner:
(a) The Purchaser shall receive a credit against the Purchase
Price in an amount equal to the Deposit.
(b) The Purchaser shall pay the balance of the Purchase Price,
as adjusted in the manner specified in Article VI and as set forth below, to
the Seller or other applicable party at Closing by making a wire transfer of
immediately available federal funds to the account of the Seller or other
applicable party as specified in writing by the Seller.
2.6 [Intentionally Omitted]
2.7 Confidentiality. Except as hereinafter provided, from and after
the execution of this Agreement, the Purchaser and the Seller shall keep the
terms, conditions and provisions of this Agreement confidential and neither
shall make any public announcements hereof unless the other first approves of
same in writing, nor shall either disclose the terms, conditions and
provisions hereof, except to persons who "need to know", such as their
respective attorneys, accountants, engineers, surveyors, financiers and
bankers. Notwithstanding the foregoing, it is acknowledged that the general
partner of the Purchaser has elected to be a real estate investment trust
("REIT") and that the Purchaser anticipates that the REIT may seek to sell
additional shares to the general public and that in connection therewith, the
Purchaser will have the absolute and unbridled right to market such
securities and prepare and file all necessary or reasonably required
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registration statements and other papers, documents and instruments necessary
or reasonably required in the Purchaser's judgment and that of its attorneys
and underwriters to file a registration statement with respect to the REIT's
shares with the U.S. Securities and Exchange Commission and/or similar state
authorities and to cause same to become effective and to disclose therein and
thus to its underwriters, to the U.S. Securities and Exchange Commission
and/or to similar state authorities and to the public all of the terms,
conditions and provisions of this Agreement.
ARTICLE 3
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
To induce the Purchaser to enter into this Agreement and to purchase
the Property, and to pay the Purchase Price therefor, the Seller hereby makes
the following representations, warranties and covenants with respect to the
Property, upon each of which the Seller acknowledges and agrees that the
Purchaser is entitled to rely and has relied:
3.1 Organization and Power. The Seller is an entity duly formed and
validly existing under the laws of the State of its organization and has all
requisite powers and all governmental licenses, authorizations, consents and
approvals to carry on its business as now conducted and to enter into and
perform its obligations hereunder and under any document or instrument
required to be executed and delivered on behalf of the Seller hereunder.
3.2 Authorization and Execution. This Agreement has been duly
authorized by all necessary action on the part of the Seller, has been duly
executed and delivered by the Seller, constitutes the valid and binding
agreement of the Seller and is enforceable in accordance with its terms.
3.3 Noncontravention. The execution and delivery of, and the
performance by the Seller of its obligations under this Agreement do not and
will not contravene, or constitute a default under, any provision of
applicable law or regulation, the Seller's organizational documents or any
agreement, judgment, injunction, order, decree or other instrument binding
upon the Seller, or result in the creation of any lien or other encumbrance
on any asset of the Seller. There are no outstanding agreements (written or
oral) pursuant to which the Seller (or any predecessor to or representative
of the Seller) has agreed to sell or has granted an option to purchase the
Property (or any part thereof).
3.4 No Special Taxes. The Seller has no knowledge of, nor has it
received any notice of, any special taxes or assessments relating to the
Property or any part thereof or any planned public improvements that may
result in a special tax or assessment against the Property.
3.5 Compliance with Existing Laws. The Seller possesses all
Authorizations, each of which is valid and in full force and effect, and no
provision, condition or limitation of any of the
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Authorizations has been breached or violated. The Seller has not represented or
failed to disclose any relevant fact in obtaining all Authorizations, and the
Seller has no knowledge of any change in the circumstances under which those
Authorizations were obtained that result in their termination, suspension,
modification or limitation. The current use and occupancy of the Property as
hotels are permitted as a principal use under all laws applicable thereto
without the necessity of resort to any grandfathered permitted nonconforming use
status, or any special use permit, special exception or other special permit,
permission or consent. The Seller has no knowledge, nor has it received notice
within the past three years, of any existing or threatened violation of any
provision of any applicable building, zoning, subdivision, environmental or
other governmental ordinance, resolution, statute, rule, order or regulation,
including but not limited to those of environmental agencies or insurance boards
of underwriters, with respect to the ownership, operation, use, maintenance or
condition of the Property or any part thereof, or requiring any repairs or
alterations other than those that have been made prior to the date hereof.
3.6 Personal Property. All of the Tangible Personal Property,
Intangible Personal Property and Inventory being conveyed by the Seller to
the Purchaser or to the Purchaser's managing agent, lessee or designee, are
free and clear of all liens and encumbrances and will be so on the Closing
Date and the Seller has good, merchantable title thereto and the right to
convey same in accordance with the terms of this Agreement.
3.7 Title and Survey Matters. The Seller is the sole owner of full
legal, equitable and beneficial title to the Property and no consent of or
joinder by any other person is required for the Seller to convey the full
legal, equitable and beneficial title to and ownership of the Property to the
Purchaser in accordance with this Agreement. Except to the extent such
obligations may be inconsistent herewith, the Seller shall perform all of its
obligations under all documents affecting title to all or any part of the
Property and shall not permit or allow to continue any defaults thereunder.
The Seller shall not, after the date of this Agreement, subject the Property
to any liens, encumbrances, covenants, conditions, restrictions, easements or
other title matters or seek any zoning or other land use changes or take any
other action which may affect or modify the status of title to or the
permitted uses of the Property without the Purchaser's prior express written
consent.
3.8 Status of Leases. Each of the Leases is valid and in full force
and effect, has not been further modified or amended and is assignable to
Purchaser without the consent of the other party thereto. There are no
defaults under any of the Leases by the Seller or, to the best of the
Seller's knowledge, by the other party thereunder, and no fact or
circumstance has occurred that, by itself or with the giving of notice or the
passage of time or both, would constitute such a default by the Seller or, to
the best of the Seller's knowledge, by the other party thereunder. The
Seller has the sole right to collect the rent under the Leases and neither
such right nor any of the Leases has been assigned, pledged, hypothecated or
otherwise encumbered. From the date hereof through and including the date of
Closing, the Seller shall not modify any of the Leases in any material
manner. The Seller shall perform all of its obligations under the Leases
from the date hereof through and including the date of Closing.
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3.9 Operating Agreements. Each of the Operating Agreements may be
terminated by the Seller or the Purchaser upon not more than 30 days' prior
written notice and without the payment of any penalty, fee, premium or other
amount. The Seller has performed all of its obligations under each of the
Operating Agreements and no fact or circumstance has occurred which, by
itself or with the passage of time or the giving of notice or both, would
constitute a default under any of the Operating Agreements. The Seller shall
not enter into any new management agreement, maintenance or repair contract,
supply contract, lease in which it is lessee or other agreements with respect
to the Property, nor shall the Seller enter into any agreements modifying the
Operating Agreements, unless (a) any such agreement or modification will not
bind the Purchaser or the Property after the Closing Date or (b) the Seller
has obtained the express prior written consent of the Purchaser to such
agreement or modification. The Seller agrees to cancel and terminate all of
the Operating Agreements unless the Purchaser requests in writing prior to
Closing that one or more remain in effect after Closing.
3.10 Warranties and Guaranties. The Seller shall not before or after
Closing, release or modify any warranties or guarantees, if any, of
manufacturers, suppliers and installers relating to the Improvements and the
Tangible Personal Property and Intangible Personal Property or any part
thereof, except with the prior written consent of the Purchaser.
3.11 Insurance. All of the Seller's insurance policies are valid and
in full force and effect, all premiums for such policies were paid when due
and all future premiums for such policies (and any replacements thereof)
shall be paid by the Seller on or before the due date therefor. The Seller
shall pay all premiums on, and shall not cancel or voluntarily allow to
expire, any of the Seller's insurance policies unless such policy is
replaced, without any lapse of coverage, by another policy or policies
providing coverage at least as extensive as the policy or policies being
replaced. The Seller shall name the Purchaser as an additional insured on
each of the Seller's insurance policies. The Seller agrees to transfer any
such policies as of the Closing Date upon the written request of the
Purchaser and the premiums on any of such policies that the Purchaser elects
to have assigned to it shall be allocated between the Seller and the
Purchaser as of the Closing Date.
3.12 Condemnation Proceedings; Roadways. The Seller has not received
notice of any condemnation or eminent domain proceeding pending or threatened
against the Property or any part thereof. The Seller has no knowledge of any
change or proposed change in the route, grade or width of, or otherwise
affecting, any street or road adjacent to or serving the Real Property.
3.13 Litigation. There is no action, suit or proceeding pending or
known to be threatened against or affecting the Seller or any principal,
subsidiary or affiliate of the Seller in any court, before any arbitrator or
before or by any Governmental Body which (a) in any manner raises any
question affecting the validity or enforceability of this Agreement or any
other agreement or instrument to which the Seller is a party or by which it
is bound and that is or is to be used in connection with, or is contemplated
by, this Agreement, (b) could materially and
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adversely affect the business, financial position or results of operations of
the Seller or any principal, subsidiary or affiliate of the Seller, (c) could
adversely affect the ability of the Seller to perform its obligations hereunder,
or under any document to be delivered pursuant hereto, (d) could create a lien
on the Property, any part thereof or any interest therein, (e) the subject
matter of which concerns any past or present employee of the Seller or its
managing agent or (f) could otherwise adversely affect the Property, any part
thereof or any interest therein or the use, operation, condition or occupancy
thereof.
3.14 Labor and Employment Agreements. There are no labor disputes
pending or, to the best of the Seller's knowledge, threatened as to the
operation or maintenance of the Property or any part thereof. The Seller is
not a party to any union or other collective bargaining agreement with
employees employed in connection with the ownership, operation or maintenance
of the Property. The Seller is not a party to any employment contracts or
agreements, written or oral, with any persons employed with respect to the
Property that will be binding on the Purchaser on or after the Closing.
Neither the Seller nor its managing agent (if any) will, between the date
hereof and the Closing Date, enter into any new employment contracts or
agreements or hire any new employees that will be binding on the Purchaser on
or after the Closing. The Purchaser will not be obligated to give or pay any
amount to any employee of the Seller or the Seller's managing agent. The
Purchaser shall not have any liability under any pension or profit sharing
plan that the Seller or its managing agent may have established with respect
to the Property or their or its employees.
3.15 Financial Information. All of the Seller's Financial
Information is correct and complete in all respects and presents accurately
the results of the operations of the Property for the three years immediately
prior to the Closing. Since the date of the last financial statement
included in the Seller's Financial Information, there has been no material
adverse change in the financial condition or in the operations of the
Property. The Seller will provide access by Purchaser's representatives, to
all financial and other information relating to the Property, and such
representatives shall determine that such information is sufficient to enable
them to prepare audited financial statements in conformity with Regulation
S-X of the Securities and Exchange Commission and any registration statement,
report or disclosure statement filed with and any rule issued by, the
Securities and Exchange Commission. The Seller will provide a signed
representation letter as prescribed by Generally Accepted Auditing Standards
as promulgated by the Auditing Standards Division of the American Institute
of Public Accountants which representation is required to enable an
independent public accountant to render an opinion on such financial
statements.
3.16 Organizational Documents. The Seller's Organizational Documents
are in full force and effect and have not been modified or supplemented, and
no fact or circumstance has occurred that, by itself or with the giving of
notice or the passage of time or both, would constitute a default thereunder.
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3.17 Bankruptcy. No Act of Bankruptcy has occurred with respect to
the Seller thereof.
3.18 Historical Districts. Neither the Property, nor any portion
thereof, is (a) listed, or eligible to be listed, in any national, state or
local register of historic places or areas, or (b) located within any
designated district or area in which the permitted uses of land located
therein are restricted by regulations, rules or laws other than those
specified under local zoning ordinances.
3.19 Brokerage Commission. Except for the $100,000 brokerage
commission described in Section 4.6, the Seller has not engaged the services
of any real estate agent, broker, finder or any other person or entity for
any brokerage or finder's fee, commission or other amount with respect to the
transactions described herein.
3.20 Environmental.
(i) The Seller, and any person or entity for whose conduct the
Seller is liable, has no liability under, has never violated, and is
presently in compliance with, all federal, state and local environmental or
health and safety-related laws, rules, regulations and ordinances (together,
Environmental Laws) applicable to the Property.
(ii) There exist no environmental conditions with respect to
the Property that could or do result in any damage, loss, cost, expense or
liability to or against the Seller or the Purchaser.
(iii) Other than those hazardous or toxic substances commonly
used in the operation of a hotel, which hazardous or toxic substances are
stored in accordance with all applicable Environmental Laws, the Seller, and
any other person or entity for whose conduct Seller is liable, has not
generated, transported, stored, handled or disposed of any hazardous or toxic
substances at the Property, and has no knowledge of any release or threatened
release of any hazardous or toxic substance at the Property or in the
vicinity of the Property.
(iv) No lien has been imposed on the Property by any federal,
state or local governmental agency in connection with the presence at or near
the Property of any hazardous or toxic substance.
(v) The Seller, and any person or entity for whose conduct the
Seller is responsible, has not (i) entered into or been the subject of any
order or decree with respect to environmental matters with respect to the
Property, (ii) received notice under the citizen suit provisions of any
Environmental Law in connection with the Property, (iii) received any request
for information, notice, demand letter, administrative inquiry or formal or
informal complaint or claim in respect of any environmental condition
relating to the Property, or (iv) been subject to or threatened with any
governmental or citizen enforcement action with respect to the Property; and
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the Seller, and any other person for whose conduct the Seller is liable, has
no reason to believe that any of the foregoing will be forthcoming.
(vi) The Seller has all licenses, permits or approvals, if any,
required for the activities and operations conducted at the Property and for
any past or ongoing alterations or improvements on the Property.
(vii) The Purchaser is not assuming or undertaking to assume
and shall have no responsibility for any expenses, debts, obligations,
liabilities, claims, demands, fines or penalties, whether fixed or
contingent, past, present or future, or direct or indirect, arising out of or
in connection with the conduct by the Seller of its business or the ownership
and use of the Property prior to the Closing (the "Excluded Liabilities"),
including without limitation, any of the Excluded Liabilities arising out of
or in connection with the failure by the Seller to comply with any applicable
Environmental Laws including, without limitation any Environmental Laws
regarding pollution control, underground storage tanks, asbestos or other
environmental matters applicable to the Property.
(viii) The Seller agrees to defend, indemnify and hold harmless
the Purchaser from and against any of the Excluded Liabilities and any other
damages, losses, costs, expenses, claims or demands (including fines,
penalties, diminution in value of the Property, court costs and reasonable
attorneys' fees) that may be incurred by or imposed on the Purchaser as a
result of (i) the conduct by the Seller of its business in connection with
the Property prior to the Closing and (ii) any material breach by the Seller
of any representation or warranty of the Seller contained herein applicable
to the Property.
3.21 Sufficiency of Certain Items. The Property contains not less
than:
(a) a sufficient amount of kitchen equipment, bar equipment,
refrigeration equipment, silverware, glassware, china, dishes, "small goods",
napkins, tablecloths, paper goods and other such personal property to
efficiently operate each of the restaurants, bars and lounges, located upon
or within the Improvements;
(b) a sufficient amount of furniture, furnishings, color
television sets, carpets, drapes, rugs, floor coverings, mattresses, pillows,
bedspreads and the like, to furnish each guest room, so that each such guest
room is, in fact, fully furnished; and
(c) a sufficient amount of towels, washcloths and bed linens,
so that there are two and one-half sets of towels, washcloths and linens for
each guest room (one on the beds, one on the shelves, and one-half in the
laundry), together with a sufficient supply of paper goods, soaps, cleaning
supplies and other such supplies and materials, as are reasonably adequate
for the current operation of the Hotels.
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3.22 Operation of Property Prior to Closing. Between the date of
this Agreement and the Closing Date, Seller shall operate the Property in the
same manner in which Seller operated the Property prior to the execution of
this Agreement, so as to keep the Property in good condition, reasonable wear
and tear excepted, and so as to maintain the existing calibre of the Hotels'
operations conducted at the Property and the reasonable good will of the
tenants, the Hotels' guests, the employees and other customers of the
Hotels. The Seller shall continue to use its best efforts to take guest room
reservations and to book functions and meetings and otherwise to promote the
business of the Property in generally the same manner as the Seller did prior
to the execution of this Agreement. All advance room bookings and
reservations and all meetings and function bookings shall be booked at rates,
prices and charges heretofore customarily charged by the Seller for such
purposes, and in accordance with Seller's published rate schedules. From and
after the execution and delivery of this Agreement, the Seller shall not (i)
make any agreements which shall be binding upon the Purchaser with respect to
the Property, or (ii) reduce or cause to be reduced any room rents or any
other charges over which Seller has operational control. Between the date
hereof and the Closing Date, the Seller shall deliver to the Purchaser
monthly reports (or for the partial monthly period up to the Closing Date)
showing the income and expenses of the Hotels and all departments thereof,
together with such periodic information with respect to room reservations and
other bookings, as the Seller customarily keeps internally for its own use.
The Seller agrees that it will operate the Property and the Hotels in
accordance with the provisions of this section between the date hereof and
the Closing Date.
3.23 Utilities. All Utilities required for the operation of the
Property either enter the Property through adjoining streets, or they pass
through adjoining land, do so in accordance with valid public easements or
private easements, and all of said Utilities are installed and operating and
all installation and connection charges therefor have been paid in full.
3.24 Curb Cuts. All curb cut street opening permits or licenses
required for vehicular access to and from the Property from any adjoining
public street have been obtained and paid for and are in full force and
effect.
3.25 Room Furnishings. Each room in the Hotels available for guest
rental is and at Closing will be furnished in accordance with Licensor's
standards for the Hotels and room type.
3.26 Franchise Agreement. The franchise agreement with respect to
the Hotels is, and at Closing will be, valid and in full force and effect,
and Seller is not and will not be in default with respect thereto (with or
without the giving of any required notice and/or lapse of time).
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ARTICLE 4
PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
To induce the Seller to enter into this Agreement and to sell the
Property, the Purchaser hereby makes the following representations,
warranties and covenants with respect to the Property, upon each of which the
Purchaser acknowledges and agrees that the Seller is entitled to rely and has
relied:
4.1 Power. Except as otherwise set forth herein, the Purchaser has
all powers and all governmental licenses, authorizations, consents and
approvals to carry on its business as now conducted and to enter into and
perform its obligations under this Agreement and any document or instrument
required to be executed and delivered on behalf of the Purchaser hereunder.
4.2 Execution. Except as otherwise set forth herein, this Agreement
has been executed and delivered by the Purchaser, constitutes the valid and
binding agreement of the Purchaser and is enforceable in accordance with its
terms.
4.3 Noncontravention. The execution and delivery of and the
performance by the Purchaser of its obligations hereunder do not and will not
contravene, or constitute a default under, any provisions of applicable law
or regulation, or any agreement, judgment, injunction, order, decree or other
instrument binding upon the Purchaser or result in the creation of any lien
or other encumbrance on any asset of the Purchaser.
4.4 Litigation. There is no action, suit or proceeding, pending or
known to be threatened, against or affecting the Purchaser or any principal,
subsidiary or affiliate of the Purchaser in any court or before any
arbitrator or before any Governmental Body which (a) in any manner raises any
question affecting the validity or enforceability of this Agreement or any
other agreement or instrument to which the Purchaser is a party or by which
it is bound and that is to be used in connection with, or is contemplated by,
this Agreement, (b) could materially and adversely affect the business,
financial position or results of operations of the Purchaser or any
principal, subsidiary or affiliate of the Purchaser, (c) could adversely
affect the ability of the Purchaser to perform its obligations hereunder, or
under any document to be delivered pursuant hereto, (d) could create a lien
on the Property, any part thereof or any interest therein or (e) could
adversely affect the Property, any part thereof or any interest therein or
the use, operation, condition or occupancy thereof.
4.5 Bankruptcy. No Act of Bankruptcy has occurred with respect to
the Purchaser.
4.6 Brokerage Commission. The Purchaser has not engaged the
services of, nor it is or will it become liable to any real estate agent,
broker, finder or any other person or entity for any brokerage or finder's
fee, commission or other amount with respect to the transaction described
herein. The Purchaser shall, however, pay the One Hundred Thousand Dollar
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($100,000) real estate commission to Hotel Partners International and any of
its co-brokers upon the purchase of all three Hotels.
ARTICLE 5
CONDITIONS AND ADDITIONAL COVENANTS
The Purchaser's obligations hereunder are subject to the satisfaction
of the following conditions precedent and the compliance by the Seller with
the following covenants:
5.1 Seller's Deliveries. The Seller shall have delivered to the
Purchaser, on or before the Closing Date, all of the documents and other
information required of Seller pursuant to Section 6.2.
5.2 Representations, Warranties and Covenants; Obligations of
Seller; Certificate. All of the Seller's representations and warranties made
in this Agreement shall be true and correct as of the Closing Date as if then
made, there shall have occurred no material adverse change in the financial
condition of the Seller or the Property since the date hereof, the Seller
shall have performed all of its covenants and other obligations under this
Agreement and the Seller shall have executed and delivered to the Purchaser
at Closing a Certificate to the foregoing effect.
5.3 Title Insurance. Fee simple title to the Real Property shall be
insurable as such by the Title Company at or below its regularly scheduled
rates subject only to Permitted Title Exceptions. The Purchaser shall order
from the Title Company the Title Commitment (along with certified true copies
of all documents referred to therein) in the name of the Purchaser or the
Purchaser's assignee or designee. Pursuant to Section 2.3 hereof, the
Purchaser shall notify the Seller in writing of any title objections that the
Purchaser is not willing to accept as a Permitted Title Exception. Title
Policy issues shall be dealt with pursuant to Section 2.3 hereof.
5.4 Surveys. The Purchaser shall have received the most recent
Surveys of all three parcels of the Land held by the Seller delineating the
boundary lines of the Land, the location of the Improvements, all rights of
way and easements thereon and contiguous public roads and otherwise
acceptable to the Purchaser and any mortgagee and securities dealer of the
Purchaser.
5.5 Title to Property. The Purchaser shall have determined that the
Seller is the sole owner of good and marketable fee simple title to the Real
Property free and clear of all liens, encumbrances, restrictions, conditions
and agreements except for Permitted Title Exceptions. The Seller shall not
have taken any action from the date hereof and through and including the
Closing Date that would adversely affect the status of title to the Real
Property.
5.6 Condition of Improvements and the Tangible Personal Property.
The Improvements and the Tangible Personal Property (including but not
limited to the mechanical
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systems, plumbing, electrical, wiring, appliances, fixtures, heating, air
conditioning and ventilating equipment, elevators, boilers, equipment, roofs,
structural members and furnaces) shall be in good condition and working order
and shall have no material defects, structural or otherwise, and there shall be
no deferred maintenance with respect to the Real Property, the Tangible Personal
Property or any part thereof, and the Seller shall not have diminished the
Inventory. The Seller, at its expense, shall have maintained the Real Property
and the Tangible Personal Property in at least as good condition as they are in
as of the date hereof, normal wear and tear excepted. The Seller shall not have
diminished the quality or quantity of maintenance and upkeep services heretofore
provided to the Real Property and the Tangible Personal Property. The Seller
shall not have removed or caused or permitted to be removed any part or portion
of the Real Property or the Tangible Personal Property unless the same is
replaced, prior to Closing, with similar items of at least equal quality and
acceptable to the Purchaser.
5.7 Utilities. All of the Utilities shall be installed in and
operating at the Property, and service shall be available for the removal of
garbage and other waste from the Property. Between the date hereof and the
Closing Date, the Seller shall not have received notice of any extraordinary
or material increase or proposed increase in the rates charged for the
Utilities from the rates in effect as of the date hereof.
5.8 Land Use. The current use and occupancy of the Property as
hotels and for hotel-related purposes are permitted as a principal use under all
laws applicable thereto without the necessity of resort to any grandfathered
permitted nonconforming use status, or any special use permit, special exception
or other special permit, permission or consent.
5.9 Lease Estoppel Certificates. The Purchaser shall have received
an estoppel certificate for each of the Leases as provided herein and, if
required by the Purchaser's lender, subordination, attornment and
nondisturbance agreements acceptable to such lender, all in form and
substance reasonably acceptable to the Purchaser. The Seller, at its
expense, shall request and use Seller's best efforts to obtain a lease
estoppel certificate from all of third parties under all of the Leases prior
to Closing Date.
5.10 [Intentionally Omitted]
5.11 Franchise. The Purchaser or its designee shall have received,
as a condition to Closing, at the expense of the Purchaser, a new franchise
agreement for each Hotel in form and substance acceptable to the Purchaser,
with a term of not less than ten (10) years from the Closing Date and at the
same royalty and other assessment rates found in the current franchise
agreements for each of the Hotels. To the extent required by Promus Hotel
Corporation for the Hampton Hotel, Best Western International, Inc. for the
Best Western Hotel and ShoLodge, Inc. for the Shoney's Hotel ("Franchisor"),
a Property Improvement Plan ("PIP") shall have been obtained by and at the
cost of Purchaser from the Franchisor of each Hotel. The estimated cost
(exclusive of any licensing fees) of any improvements to the Property for all
the Hotels required by the PIP shall be no more than $100,000; provided,
however, that all such amounts in excess of
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$100,000 shall be paid by Seller or the Seller may terminate this Agreement and
the Deposit shall be returned to the Purchaser.
5.12 Operational Licenses. Purchaser shall have obtained all permits,
licenses, approvals and Authorizations necessary or desirable to operate the
Hotels and all restaurants, bars and lounges presently located in the Hotels
including, without limitation, liquor licenses or alcoholic beverage
licenses. To that end, the Seller and the Purchaser shall have cooperated
with each other, and each shall have executed such transfer forms, license
applications and other documents as may be necessary or desirable for
Purchaser to obtain such permits, licenses, approvals and Authorizations.
5.13 Liquor License. If applicable, Purchaser shall have obtained al
liquor licenses, alcoholic beverage licenses and other permits and
Authorizations necessary to operate the restaurant, bars and lounges
presently located in the Hotel. To that end, the Seller and the Purchaser
shall have cooperated with each other, and shall have executed such transfer
forms, license applications and other documents as may be necessary to effect
the obtaining of the liquor licenses, alcoholic beverage licenses and other
Authorizations required hereby.
5.14 Securities Compliance. Seller shall cooperate with Purchaser to
provide all information and execute all documents necessary for Purchaser to
comply with all applicable state and federal securities laws.
5.15 Board Approval. Prior to the end of the Study Period, the Real
Property may be inspected and found acceptable by the Board of Directors of
▇▇▇▇▇▇▇▇ Hospitality Trust, Inc. and the documents reviewed pursuant to
Section 2.4 shall be satisfactory to Purchaser in its sole and absolute
discretion. Seller shall cooperate with the Board of Directors and Purchaser
and furnish all requested information promptly.
5.16 Acquisition of All Hotels. The Seller shall sell and convey to
Purchaser and Purchaser shall purchase all of the Hotels. The Purchaser may
terminate this Agreement and obtain a refund of the Deposit in the event that
it determines during the Study Period not to purchase all of the Hotels or
the Seller defaults in its obligations to sell all of the Hotels to the
Purchaser pursuant to the terms of this Agreement.
5.17 Noncompetition. Neither ▇▇▇▇▇ Investments, Inc., nor any of its
officers or affiliates will acquire, develop, manage, lease, operate, or have
any interest in any hotel or lodging establishment within fifteen (15) mile
radius of Ellenton, Florida or Brandon, Florida for a period of ten (10)
years from the Closing Date. This provision shall survive the Closing Date.
Each of the conditions and additional covenants contained in this Section are
intended for the benefit of the Purchaser and may be waived in whole or in
part, by the Purchaser, but only by an instrument in writing signed by the
Purchaser.
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ARTICLE 6
CLOSING
6.1 Closing. Closing shall be held at the offices of the Purchaser
or by mail on or before June 25, 1998, upon ten (10) days notice from
Purchaser to Seller commencing at 9:00 AM local time unless otherwise agreed
by the Purchaser and the Seller. Possession of the Property shall be
delivered to the Purchaser at Closing, subject only to Permitted Title
Exceptions.
6.2 Seller's Deliveries.
(a) At Closing, the Seller shall deliver to Purchaser all of
the following instruments, each of which shall have been duly executed and,
where applicable, acknowledged on behalf of the Seller and shall be dated as
of the Closing Date:
(i) The certificate required by Section 5.2.
(ii) The Assignment of Leases.
(iii) The Lease estoppel certificates.
(iv) The Income Tax Certificate.
(v) The Assignment and Assumption Agreement.
(vi) Settlement Sheet.
(vii) Deed.
(viii) Such agreements, affidavits or other documents
as may be required by the Title Company to issue the Owner's Title Policy.
(ix) Any other document, instrument, information or
other item reasonably requested by the Purchaser.
(b) At Closing, the Seller shall also deliver or cause to be
delivered to the Purchaser the following:
(i) The originals of the Leases or true, correct
and complete copies thereof certified by the Seller.
(ii) Certified copies of the Seller's organizational
documents.
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(iii) Appropriate resolutions of the board of
directors of the Seller, certified by the secretary or an assistant secretary
of the Seller, authorizing (a) the execution on behalf of the Seller of this
Agreement and the documents to be executed and delivered by the Seller prior
to, at or otherwise in connection with Closing, and (b) the performance by
the Seller of its obligations hereunder and under such documents.
(iv) A valid, final and unconditional certificate of
occupancy as to the Real Property issued to the Purchaser by the appropriate
governmental authority.
(v) If part of the Tangible Personal Property
consists of a motor vehicle titled under state law, a duly executed and
delivered document transferring title pursuant to applicable state law and
related documents.
(vi) True, correct and complete copies of all plans,
specifications and warranties, if any, of contractors, subcontractors,
manufacturers, suppliers and installers possessed by the Seller and relating
to the Improvements and the Tangible Personal Property and Intangible
Personal Property, or any part thereof.
(vii) Copies of all correspondence, files, documents,
records and data relating the operation of the Property for the 5 years
immediately before Closing.
(viii) All keys for the Property.
(ix) A complete list of all advance room
reservations, functions and the like, in reasonable detail specified by the
Purchaser.
(x) A list of Seller's outstanding accounts
receivable as of midnight on the date prior to the Closing, specifying the
name of each account and the amount due the Seller.
(xi) Any other document, instrument, information or
item reasonably requested by the Purchaser or required hereby.
6.3 Purchaser's Deliveries. At Closing, the Purchaser shall pay or
deliver to the Seller, as appropriate, the following:
(a) The portion of the Purchase Price described in Section
2.5(b).
(b) The Assignment and Assumption Agreement.
(c) To the Seller, any other document or instrument reasonably
requested by the Seller or required hereby.
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6.4 Closing Costs. The Seller shall pay for (i) all sales and use
taxes on the sale of the Property, and (ii) such other expenses incurred by
or on behalf of the Seller. The Purchaser shall pay such expenses incurred
by or on behalf of the Purchaser. All recording and transfer taxes and fees
shall be paid for one-half each by the Seller and Purchaser. Each party
hereto shall pay its own legal fees and expenses.
6.5 Income and Expense Allocations.
(a) At Closing, all income and expenses with respect to the
Property, and applicable to the period of time before and after Closing,
determined in accordance with generally accepted accounting principles
consistently applied, shall be allocated between the Seller and the Purchaser
as of the Closing Date. The Seller shall be entitled to all income and
responsible for all expenses for the period of time up to but not including
the Closing Date, and the Purchaser shall be entitled to all income and
responsible for all expenses for the period of time from, after and including
the Closing Date. Such adjustments shall be shown on the settlement
statements (with such supporting documentation as the parties hereto may
require being attached as exhibits to the settlement statements) and shall
increase or decrease (as the case may be) the balance of the Purchase Price
payable by the Purchaser at Closing. The Seller shall pay at Closing all
special assessments and taxes applicable to the Property.
(b) If accurate allocations cannot be made at Closing because
current bills are not obtainable (as, for example, in the case of utility
bills), the parties shall allocate such income or expenses at Closing on the
best available information, subject to adjustment upon receipt of the final
▇▇▇▇ or other evidence of the applicable income or expense. Any expense paid
by the Seller or the Purchaser with respect to the Property after the Closing
Date shall be promptly allocated in the manner described herein and the
parties shall promptly pay or reimburse any amount due.
(c) All income attributable to the Property collected by the
Seller or the Purchaser after the Closing Date shall be first applied against
obligations accruing after the Closing Date. The Seller shall not ▇▇▇ an
obligor with respect to the Property that maintains a contractual
relationship with the Purchaser after the Closing Date.
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ARTICLE 7
CONDEMNATION; RISK OF LOSS
7.1 Condemnation. In the event of any actual or threatened taking,
pursuant to the power of eminent domain, of all or any portion of the Real
Property, or any proposed sale in lieu thereof, the Seller shall give written
notice thereof to the Purchaser promptly after the Seller learns or receives
notice thereof. If all or any part of the Real Property is, or is to be, so
condemned or sold, the Purchaser shall have the right to terminate this
Agreement pursuant to Section 8.3. If the Purchaser elects not to terminate
this Agreement, all proceeds, awards and other payments arising out of such
condemnation or sale (actual or threatened) shall be paid to the Purchaser at
Closing.
7.2 Risk of Loss. The risk of any loss or damage to the Property
prior to the Closing shall remain upon the Seller. If any such loss or
damage occurs prior to Closing, the Purchaser shall have the right to
terminate this Agreement pursuant to Section 8.3. If the Purchaser elects
not to terminate this Agreement, it may choose to restore the Property
itself, in which event all insurance proceeds shall be paid or assigned to
the Purchaser and the Seller shall not be responsible to the Purchaser any
additional sums required to restore the Property.
ARTICLE 8
LIABILITY OF PURCHASER; INDEMNIFICATION BY SELLER;
TERMINATION RIGHTS
8.1 Liability of Purchaser. Except for any obligation expressly
assumed or agreed to be assumed by the Purchaser hereunder, the Purchaser
does not assume any obligation of the Seller or any liability for claims
arising out of any occurrence prior to Closing. The Purchaser shall acquire
the Property subject to the Permitted Title Exceptions.
8.2 Indemnification by Seller. The Seller hereby indemnifies and
holds the Purchaser harmless from and against any and all claims, costs,
penalties, damages, losses, liabilities and expenses (including reasonable
attorneys' fees) that may at any time be incurred by the Purchaser, whether
before or after Closing, as a result of any material breach by the Seller of
any of their representations, warranties, covenants or obligations set forth
herein or in any other document delivered by the Seller under this Agreement.
8.3 Termination by Purchaser. If any condition set forth herein
cannot or will not be satisfied prior to Closing, or upon the occurrence of
any other event that would entitle the Purchaser to terminate this Agreement
and its obligations hereunder, the Purchaser, at its option, may elect either
(a) to terminate this Agreement and all other rights and obligations of the
Seller and the Purchaser hereunder shall terminate immediately and have the
Deposit returned to the Purchaser or (b) to waive its right to terminate and
to proceed to Closing. If the Purchaser terminates this Agreement as a
consequence of a material misrepresentation or breach of a
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warranty or covenant by the Seller, or a failure by the Seller to perform its
obligations hereunder, the Purchaser shall retain all remedies accruing as a
result thereof including but not limited to the right to specific performance of
this Agreement.
8.4 Termination by Seller. If, prior to Closing, the Purchaser
defaults in performing any of its obligations under this Agreement (including
its obligation to purchase the Property), the Seller's sole remedy for such
default shall be to terminate this Agreement and retain the Deposit. The
Seller and the Purchaser agree that, in the event of such a default, the
damages that the Seller would sustain as a result thereof would be difficult
if not impossible to ascertain. The Seller hereby waives and releases any
and all other rights and remedies for a default by the Purchaser. Therefore,
the Seller and the Purchaser agree that, the Seller shall retain the Deposit
as full and complete liquidated damages and as the Seller's sole remedy.
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.1 Completeness; Modification. This Agreement constitutes the
entire agreement among the parties hereto with respect to the transactions
contemplated hereby and supersedes all prior discussions, understandings,
agreements and negotiations between the parties hereto. The provisions of
the prior sentence reflects the true intent of the Seller and the Purchaser
and is intended to be enforceable, notwithstanding any existing or further
case law to the contrary. This Agreement may be modified only by a written
instrument duly executed by the parties hereto.
9.2 Successors and Assigns. This Agreement shall bind and inure to
the benefit of the parties hereto and their respective successors and
assigns.
9.3 Days. If any action is required to be performed, or if any
notice, consent or other communication is given, on a day that is a Saturday
or Sunday or a legal holiday in the jurisdiction in which the action is
required to be performed or in which is located the intended recipient of
such notice, consent or other communication, such performance shall be deemed
to be required, and such notice, consent or other communication shall be
deemed to be given, on the first business day following such Saturday, Sunday
or legal holiday. Unless otherwise specified herein, all references herein
to a "day" or "days" shall refer to calendar days and not business days.
9.4 Governing Law. This Agreement and all documents referred to
herein shall be governed by and construed and interpreted in accordance with
the laws of the state wherein the Property is located.
9.5 Counterparts. To facilitate execution, this Agreement may be
executed in as many counterparts as may be required. It shall not be
necessary that the signature on behalf of both
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parties hereto appear on each counterpart hereof. All counterparts hereof shall
collectively constitute a single agreement.
9.6 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 term, covenant or condition to other persons or
circumstances, shall not be affected thereby, and each term, covenant or
condition of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
9.7 Costs. Regardless of whether Closing occurs hereunder, and
except as otherwise expressly provided herein, each party hereto shall be
responsible for its own costs in connection with this Agreement and the
transactions contemplated hereby, including without limitation fees of
attorneys, engineers and accountants.
9.8 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered by hand, sent prepaid by
Federal Express (or a comparable overnight delivery service), sent by the
United States mail, certified, postage prepaid, return receipt requested, or
by fax at the addresses and fax numbers 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 delivered to the intended recipient.
For the Seller:
▇▇▇▇▇ Investments, Inc.
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
--------------------------.
--------------------------.
--------------------------.
--------------------------
Fax Number: _______________
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For the Purchaser:
▇▇▇▇▇▇▇▇ Hospitality Limited Partnership
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Any party hereto may change its address or fax number, or designate different
or other persons or entities to receive copies by notifying the other party
in a manner described in this Section.
9.9 Escrow Agent. The Escrow Agent referred to in the definition
thereof contained in Paragraph 1.1 hereof has agreed to act as such for the
convenience of the parties without fee or other charges for such services as
Escrow Agent. The Escrow Agent shall not be liable: (a) to any of the
parties for any act or omission to act except for its own willful misconduct;
(b) for any legal effect, insufficiency, or undesirability of any instrument
deposited with or delivered by Escrow Agent or exchange by the parties
hereunder, whether or not Escrow Agent prepared such instrument; (c) for any
loss or impairment of that have been deposited in escrow while those funds
are in the course of collection, or while those funds are on deposit in a
financial institution, if such loss or impairment results from the failure,
insolvency or suspension of a financial institution; (d) for the expiration
of any time limit or other consequence of delay, unless a properly executed
written instruction, accepted by Escrow Agent, has instructed the Escrow
Agent to comply with said time limit; (e) for the default, error, action or
omission of either party to the escrow. The Escrow Agent shall be entitled
to rely on any document or paper received by it, believed by such Escrow
Agent, in good faith, to be bona fide and genuine. It is agreed that the
Escrow Agent shall not be disqualified from representing said party in
connection with any litigation which might arise out or in connection with
this Agreement, merely by virtue of the fact that such Escrow Agent has
agreed to act as Escrow Agent hereunder. Further, in that event of any
dispute as to the disposition of the Deposit or any other monies held in
escrow, the Escrow Agent may, if such Escrow Agent so elects, interplead the
parties by filing an interpleader action in the Circuit Court in and for
▇▇▇▇▇▇▇▇▇▇ County, Maryland (to the jurisdiction of which both parties do
hereby consent), and pay into the registry of the court the Deposit and any
other monies held in escrow, including all interest earned thereon, whereupon
such Escrow Agent shall be relieved and release from any further liability as
Escrow Agent
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hereunder. In the event of such interpleader action, the Escrow Agent shall not
be disabled from representing its client. Escrow Agent shall not be liable for
Escrow Agent's compliance with any legal process, subpoena, writs, orders,
judgments and decree of any court, whether issued with or without jurisdiction,
and whether or not subsequently vacated, modified, set aside or reversed.
9.10 Incorporation by Reference. All of the Exhibits attached hereto
are by this reference incorporated herein and made a part hereof.
9.11 Survival. All of the representations, warranties, covenants and
agreements of the Seller and the Purchaser made in, or pursuant to, this
Agreement shall survive Closing and shall not merge into any document or
instrument executed and delivered in connection herewith.
9.12 Further Assurances. The Seller and the Purchaser each covenant
and agree to sign, execute and deliver, or cause to be signed, executed and
delivered, and to do or make, or cause to be done or made, upon the written
request of the other party, any and all agreements, instruments, papers,
deeds, acts or things, supplemental, confirmatory or otherwise, as may be
reasonably required by either party hereto for the purpose of or in
connection with consummating the transactions described herein.
9.13 No Partnership. This Agreement does not and shall not be
construed to create a partnership, joint venture or any other relationship
between the parties hereto except the relationship of Seller and Purchaser
specifically established hereby.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be executed in their names by their respective duly-authorized
representatives as a sealed instrument.
[SIGNATURE PAGES FOLLOW.]
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SIGNATURE PAGE
PURCHASE AGREEMENT
BEST WESTERN HOTEL
ELLENTON, FLORIDA
HAMPTON INN HOTEL,
BRANDON, FLORIDA
SHONEY'S INN HOTEL
ELLENTON, FLORIDA
SELLER:
▇▇▇▇▇ INVESTMENTS, INC.
BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
-----------------------
AS ITS: PRESIDENT AND OWNER
-----------------------
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SIGNATURE PAGE
PURCHASE AGREEMENT
BEST WESTERN HOTEL
ELLENTON, FLORIDA
HAMPTON INN HOTEL,
BRANDON, FLORIDA
SHONEY'S INN HOTEL
ELLENTON, FLORIDA
PURCHASER:
▇▇▇▇▇▇▇▇ HOSPITALITY LIMITED
PARTNERSHIP
By: ▇▇▇▇▇▇▇▇ HOSPITALITY
REIT TRUST,
General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.(SEAL)
-------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
President
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