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EXHIBIT 10.2
AGREEMENT OF PURCHASE
AND SALE
dated as of August 31, 1996
between
JF ATLANTA, LLC,
a Georgia limited liability company
as Seller,
and
INNKEEPERS USA LIMITED PARTNERSHIP,
a Virginia limited partnership,
as Purchaser
HAMPTON INN
Norcross, Georgia
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Rules of Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
PURCHASE AND SALE; DEPOSIT;
PAYMENT OF PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . 5
2.1 Purchase and Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Deposit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Payment of Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.4 Allocation of Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS . . . . . . . . . . . . . . . 6
3.1 Organization and Power. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Authorization and Execution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Noncontravention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 No Special Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Compliance with Existing Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Operating Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Warranties and Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.8 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.9 Condemnation Proceedings; Roadways. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.10 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.11 Labor Disputes and Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.12 Financial Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.13 Organizational Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.14 Operation of Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.15 Personal Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.16 Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.17 Zoning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.18 No Broker. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.19 Hazardous Substances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.20 Room Furnishings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.21 License. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.22 Independent Audit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.23 Bulk Sale Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.24 Curb Cuts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.25 Sufficiency of Certain Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.26 As Is. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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3.27 Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV
PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS . . . . . . . . . . . . . . 12
4.1 Organization and Power. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.3 Noncontravention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.4 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.5 Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.6 No Broker. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V
CONDITIONS AND ADDITIONAL COVENANTS . . . . . . . . . . . . . . . . . . . 13
5.1 Seller's Deliveries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.2 Representations, Warranties and Covenants; Obligations of Seller; Certificate. . . . . . . . . . . . 13
5.3 Survey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.4 Title to Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.5 Condition of Improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.6 Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.7 Land Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.8 Hotel Franchise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.9 Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.10 License. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VI
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.2 Seller's Deliveries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.3 Purchaser's Deliveries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.4 Mutual Deliveries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.5 Closing Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.6 Income and Expense Allocations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII
CONDEMNATION; RISK OF LOSS . . . . . . . . . . . . . . . . . . . . . 20
7.1 Condemnation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.2 Risk of Loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII
LIABILITY OF PURCHASER; INDEMNIFICATION BY SELLER;
TERMINATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . 20
8.1 Liability of Purchaser. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2 Indemnification by Seller. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.3 Termination by Purchaser. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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8.4 Termination by Seller. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IX
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 22
9.1 Completeness; Modification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.2 Assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.3 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.4 Days. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.5 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.6 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.7 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.8 Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.9 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.10 Incorporation by Reference. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.11 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.12 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.13 No Partnership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.14 Time of Essence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.15 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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LIST OF EXHIBITS
Exhibit A - Land
Exhibit B - Previous Contract
Exhibit C - Permitted Title Exceptions
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AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT, dated as of the 31st day of August, 1996,
between JF ATLANTA, LLC, a Georgia limited liability company (the "Seller"),
and INNKEEPERS USA LIMITED PARTNERSHIP, a Virginia limited partnership (the
"Purchaser"), provides:
ARTICLE I
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
general partner 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, 1.2(a)
file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or adjustment
of debts, (b) 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 (c) take any corporate or partnership 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 general partner
thereof, in any court of competent jurisdiction seeking (1) the liquidation,
reorganization, dissolution or winding-up, or the composition or readjustment
of debts, of such party or general partner, (2) the appointment of a receiver,
custodian, trustee or liquidator or such party or general partner or all or any
substantial part of its assets, or (3) 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 the Seller (a) assigns and the
Purchaser assumes the Operating Agreements to the extent assignable, 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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"▇▇▇▇ 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, Intangible
Personal Property and the Reservation System from the Seller to the Purchaser
to the extent conveyable and subject to applicable law and the franchisor of
the Property.
"Closing" shall mean the Closing of the purchase and sale of
the Property pursuant to this Agreement.
"Closing Date" shall mean the date on which the Closing
occurs.
"Deed" shall mean that certain deed conveying title to the
Real Property with special or limited warranty and good, marketable and
insurable title from the Seller to the Purchaser, subject only to Permitted
Title Exceptions. The description of the Land in the Deed shall be by courses
and distances and, if there is a discrepancy between the description of the
Land attached hereto as Exhibit A and the description of the Land as shown on
the Survey, the description of the Land in the Deed shall be identical to the
description shown on the Survey.
"Deposit" shall mean all amounts deposited from time to time
with the Seller by the Purchaser pursuant to Section 2.2, plus any unpaid
interest accrued thereon in accordance with the terms of Section 2.2.
"Employment Agreements" shall mean any and all employment
agreements, written or oral, between the Seller or its managing agent and the
persons employed with respect to the Property.
"FIRPTA Certificate" shall mean the affidavit of the Seller
under Section 1445 of the Internal Revenue Code certifying 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), in form and substance satisfactory to the
Purchaser.
"Governmental Body" means any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
"Hotel" shall mean the 150-room hotel and related amenities
located on the Land.
"Improvements" shall mean the Hotel and all other buildings,
improvements, fixtures and other items of real estate located on the Land.
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"Insurance Policies" shall mean those certain policies of
insurance described in the Previous Contract.
"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, all of Seller's remaining rights under the
Previous Contract, the right to use the trade name "Residence Inn" and all
variations thereof, the Authorizations, escrow accounts, insurance policies,
general intangibles, business records, plans and specifications, surveys and
title insurance policies pertaining to the Real Property and the Personal
Property, all licenses, permits and approvals with respect to the construction,
ownership, operation, leasing, occupancy or maintenance of the Property, 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 Room Ledger, if any, determined under Section 6.6, excluding (a)
any of the aforesaid rights the Purchaser elects not to acquire, (b) the
Seller's cash on hand, in bank accounts and invested with financial
institutions and (c) accounts receivable except for the above described share
of the Room Ledger, if any.
"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 the same may be revised) and similar
consumable supplies.
"Land" shall mean that certain parcel of real estate lying and
being in Gwinnett County, Georgia, 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.
"Operating Agreements" shall mean the management agreements,
service contracts, supply contracts, leases and other agreements with respect
to the ownership, operation, occupancy or maintenance of the Property.
"Owner's Title Policy" shall mean an owner's policy of title
insurance 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. 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.
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"Permitted Title Exceptions" shall mean those exceptions to
title to the Real Property that are set forth in Exhibit C.
"Previous Contract" shall mean that certain Agreement of
Purchase and Sale dated as of February 12, 1996, by and between Peachtree
Corners Hotels, L.P., a Georgia limited partnership ("Peachtree Corners"), as
seller and Purchaser, as purchaser, a copy of which is attached hereto as
Exhibit B. Pursuant to that certain Assignment of Agreement of Purchase and
Sale dated as of August 30, 1996, Purchaser assigned all of its rights and
obligations under the Previous Contract to Seller.
"Property" shall mean collectively the Real Property, the
Inventory, the Tangible Personal Property and the Intangible Personal Property.
"Purchase Price" shall mean $9,500,000, plus the amount of all
closing costs paid by Seller in connection with the Previous Contract, as
reflected on the settlement statement executed in connection with the
acquisition of the Property from Peachtree Corners, plus the net tax liability
incurred by members of the Seller in connection with the acquisition, ownership
and sale of the Property, plus the amount of any capital contributions made by
members of the Seller that are required to fund the acquisition and sale of the
Property or finance operations of the Property payable in the manner described
in Section 2.3.
"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.
"Room 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.
"Seller's Organizational Documents" shall mean the current
operating agreement and articles of organization of the Seller.
"Survey" shall mean the survey prepared pursuant to Section
5.3.
"Tangible Personal Property" shall mean the items of tangible
personal Property consisting of all furniture, fixtures and equipment situated
on, attached to, or used in the operation of the Hotel, to the extent owned by
Seller (excluding all Licensor Signage and the GuesTrak Kiosk System, if any)
and all furniture, furnishings, equipment, machinery, and other personal
property of every kind located on or used in the operation of the Hotel and
owned by the Seller; provided, however, that the Purchaser agrees that, all
Inventory shall be conveyed to the Purchaser's property manager.
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"Title Commitment" shall mean the commitment by the Title
Company to issue 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
State of Georgia.
"Utilities" shall mean public sanitary and storm sewers,
natural gas, telephone, public water facilities, electrical facilities and all
other utility facilities and services necessary for the operation and occupancy
of the Property as a hotel.
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, subsections, clauses or exhibits are references to articles,
sections, subsections, clauses or exhibits of this Agreement.
(c) The table of contents and 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.
ARTICLE II
PURCHASE AND SALE; DEPOSIT;
PAYMENT OF PURCHASE PRICE
2.1 Purchase and Sale. The Seller agrees to sell and the
Purchaser agrees to purchase the Property for the Purchase Price and in
accordance with the other terms and conditions set forth herein.
2.2 Deposit. The Purchaser shall make on the date hereof an
initial deposit of One Million Nine Hundred Thirty-Three Thousand Seven Hundred
Six and 41/100 Dollars ($1,933,706.41) with the Seller. The Deposit shall
accrue interest at the rate of eight and one-half percent (8.5%) per annum.
Interest on the Deposit shall be paid by the Seller to the Purchaser monthly,
in arrears, on the first day of each calendar month. The Deposit shall be (a)
applied at the Closing against the Purchase Price, (b) returned to the
Purchaser pursuant to Sections 5.9 or 8.3 or (c) paid to the Seller pursuant to
Section 8.4.
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2.3 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, plus any accrued interest
thereon that has not been paid to Purchaser.
(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.
2.4 Allocation of Purchase Price. The parties agree that the
Purchase Price shall be allocated among the various components of the Property
in the manner indicated in the Previous Contract.
ARTICLE III
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
To induce the Purchaser to enter into this Agreement and to purchase
the Property, 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 a limited liability
company duly formed, validly existing and in good standing under the laws of
the State of Georgia 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. There
is no other person or entity who has an ownership interest in the Property or
whose consent is required in connection with the Seller's performance of its
obligations hereunder.
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
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the Seller (or any predecessor to or representative of the Seller) has
agreed to sell or has granted an option or right of first refusal 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 Authorizations has been
breached or violated. The Seller has not misrepresented 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 Seller has no knowledge, nor has it received notice within the
past three years, or during the Seller's ownership of the Property, whichever
is less, of any existing or threatened violation of any provision of any
applicable building, zoning, subdivision, environmental or other govern- mental
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 Operating Agreements. As of the date hereof, there are no
Operating Agreements with respect to the Property, except as attached to the
Previous Contract, which Purchaser expressly agrees to assume and Seller agrees
to assign to Purchaser pursuant to the Assignment and Assumption Agreement.
The Seller shall not enter into any new Operating Agreements with respect to
the Property, unless (a) any such Operating Agreement will not bind the
Purchaser or the Property after the Closing Date or (b) the Seller has obtained
the Purchaser's prior written consent to such Operating Agreement. The Seller
agrees to cancel and terminate all Operating Agreements at the Closing, unless
the Purchaser requests in writing at least five (5) business days prior to
Closing that one or more remain in effect after Closing.
3.7 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
Personal Property or any part thereof, except with the prior written consent of
the Purchaser. A complete list of all such warranties and guaranties in effect
as of this date is attached to the Previous Contract.
3.8 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, if due and payable
prior to Closing. The Seller shall pay all premiums on, and
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shall not cancel or voluntarily allow to expire prior to Closing, 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.
3.9 Condemnation Proceedings; Roadways. The Seller has received
no 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.
3.10 Litigation. There is no action, suit or proceeding pending or
to Seller's knowledge known to be threatened against or affecting 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 adversely
affect the business, financial position or results of operations of the Seller,
(c) could materially and 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.
3.11 Labor Disputes and 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 Agreements, and neither
the Seller nor its managing agent will, between the date hereof and the date of
Closing, enter into any Employment Agreements or hire a General Manager or
Director of Sales and Marketing for the Hotel without consulting with the
Purchaser with respect to such Employment Agreements and the hiring of the
General Manager and the Director of Sales and Marketing. The Purchaser will not
be obligated to give or pay any amount to any employee of the Seller or the
Seller's managing agent unless the Purchaser elects to hire that employee. 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.
3.12 Financial Information. All of the Seller's financial
information, including, without limitation, all books and records and financial
statements ("Financial Information") is correct and complete in all respects
and presents accurately the results of the operations of the Property for the
periods indicated. Since the date of the last financial statement included
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in the Seller's Financial Information, there has been no material adverse change
in the financial condition or in the operations of the Property.
3.13 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.
3.14 Operation of Property. The Seller covenants, that between the
date that the Hotel first opens to the Public and the Closing Date (if a period
at all) it will (a) operate the Property only in a usual, regular and ordinary
manner consistent with the Seller's general business practice, (b) maintain its
books of account and records in a usual, regular and ordinary manner, in
accordance with sound accounting principles applied on a consistent basis and
(c) use all reasonable efforts to preserve its relationships with suppliers and
others having business dealings with it. The Seller shall use its best efforts
to take guest room reservations and to book functions and meetings and otherwise
to promote the business of the Property. The Seller shall provide Purchaser
with its marketing plan and all pre-opening plans and advertising for the
Property and shall cooperate with Purchaser with regard to any inquiries and
requests of Purchaser related to the same. Except as otherwise permitted
hereby, from the date hereof until Closing, the Seller shall not take any action
or fail to take action the result of which (i) would have a material adverse
effect on the Property or the Purchaser's ability to continue the operation
thereof after the date of Closing in substantially the same manner as conducted
immediately prior to the date of Closing, (ii) reduce or cause to be reduced any
room rents or any other charges over which the Seller has operational control,
or (iii) would cause any of the representations and warranties contained in this
Article III to be untrue as of Closing. From and after the date the
Improvements are Ready for Occupancy, Seller shall deliver to the Purchaser
daily reports showing the income and expenses of the Hotel 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.
3.15 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 or will
be at Closing, free and clear of all liens, leases and the Seller has, or will
at the time of closing have, good, merchantable title thereto and the right to
convey same in accordance with the terms of the Agreement.
3.16 Bankruptcy. No Act of Bankruptcy has occurred with respect to
the Seller or any general partner of the Seller.
3.17 Zoning. The use and occupancy of the Property for hotel and
restaurant purposes are permitted under all laws applicable thereto without the
necessity of any special use permit, special exception or other special permit,
permission or consent.
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3.18 No Broker. The Seller has not engaged the services of, nor is
it 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 transactions described herein.
3.19 Hazardous Substances. Seller has no knowledge: (a) of the
presence of any "Hazardous Substances" (as defined below) on the Property, or
any portion thereof, or, (b) of any spills, releases, discharges, or disposal of
Hazardous Substances that have occurred or are presently occurring on or onto
the Property, or any portion thereof, or (c) of the presence of any PCB
transformers serving, or stored on, the Property, or any portion thereof, and
Seller has no knowledge of any failure to comply with any applicable local,
state and federal environmental laws, regulations, ordinances and administrative
and judicial orders relating to the generation, recycling, reuse, sale, storage,
handling, transport and disposal of any Hazardous Substances (as used herein,
"Hazardous Substances" shall mean any substance or material whose presence,
nature, quantity or intensity of existence, use, manufacture, disposal,
transportation, spill, release or effect, either by itself or in combination
with other materials is either: (1) potentially injurious to the public health,
safety or welfare, the environment or the Property, (2) regulated, monitored or
defined as a hazardous or toxic substance or waste by any Environmental
Authority, or (3) a basis for liability of the owner of the Property to any
Environmental Authority or third party, and Hazardous Substances shall include,
but not be limited to, hydrocarbons, petroleum, gasoline, crude oil, or any
products, by-products or components thereof, and asbestos).
3.20 Room Furnishings. All public spaces, lobbies, meeting rooms,
and each room in the Hotel available for guest rental shall be furnished in
accordance with Licensor's standards for the Hotel and room type.
3.21 License. The Seller has a valid commitment from Promus
Hotels, Inc. (the "Licensor") to issue a license with respect to the Hotel (the
"License") after the Improvements are Ready for Occupancy. At Closing, the
License will be valid and in full force and effect, and Seller will not be in
default with respect thereto (with or without the giving of any required notice
and/or lapse of time).
3.22 Independent Audit. Seller shall provide access by Purchaser's
representatives, to all financial and other information relating to the
Property which would be sufficient to enable them to prepare audited financial
statements in conformity with Regulation S-X of the Securities and Exchange
Commission (the "Commission") and to enable them to prepare a registration
statement, report or disclosure statement for filing with the Commission.
Seller shall also provide to Purchaser's representatives a signed
representative letter which would be sufficient to enable an independent public
accountant to render an opinion on the financial statements related to the
Property.
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3.23 Bulk Sale Compliance. Seller shall indemnify Purchaser
against any claim, loss or liability arising under all bulk sales laws
applicable to and in connection with the transaction contemplated herein.
3.24 Curb Cuts. To the best of Seller's knowledge, all curb cut
street 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 Sufficiency of Certain Items. The Property, on the Closing
Date, shall contain not less than:
(a) 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
(b) two (2) sets of towels, washcloths and bed linens, so
that there are two sets of towels, washcloths and linens for each guest room
(one on the beds and one on the shelves or 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 Hotel.
3.26 As Is.
(a) Seller makes no representations and warranties to Purchaser
other than as specifically set forth herein;
(b) The Property will, on the Closing Date, be transferred "as
is" without warranty or representation of any kind or character except as
specifically set forth herein, including without limitation, any representation
as to physical condition, value, compliance with legal requirements, the
existed or status of contracts affecting the Property or absence of toxic or
hazardous substances. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THERE
IS NO WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR A
SPECIFIC PURPOSE. Purchaser will make inspections of the Property as it deems
appropriate, and has not received any warranties or representations from Seller
of any kind, whether written or oral, except as specifically set forth herein.
3.27 Distribution. Seller shall make no distributions to its
members except to fund the tax liabilities of the members arising from the
acquisition, ownership and sale of the Property.
Each of the representations and warranties contained in this Article III and
its various subparagraphs 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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Except for those representations and warranties set forth in Section 3.19, each
of said representations and warranties of this Article III shall survive the
closing of the transactions contemplated hereby for the earlier to occur of one
(1) year after the Closing Date or a sale assignment or other transfer of the
Property by Purchaser (unless Purchaser makes a claim by notice in writing to
Seller in connection with the untruth or inaccuracy of such representation or
warranty within such one (1) year period, in which event the representation or
warranty that is the subject of such claim shall survive until such claim is
finally resolved) except to the extent that Seller gives Purchaser written
notice prior to Closing of the untruth or inaccuracy of any representation or
warranty, or Purchaser otherwise obtains actual knowledge prior to Closing of
the untruth or inaccuracy of any representation or warranty, and Purchaser
nevertheless elects to close this transaction. The representations and
warranties set forth in Section 3.19 shall survive the Closing for the earlier
to occur of two (2) years after the Closing Date or a sale, assignment or other
transfer of the Property by Purchaser. Except to the extent otherwise expressly
provided in the immediately preceding sentence, no investigation, audit,
inspection, review or the like conducted by or on behalf of Purchaser shall be
deemed to terminate the effect of any such representation, warranties and
covenants, it being understood that Purchaser has the right to rely thereon and
that each such representation and warranty constitutes a material inducement to
Purchaser as a result of the inaccuracy or breach of any of the representations
and warranties of Seller hereunder to the extent provided herein other than
representations and warranties as to which Seller has give Purchaser written
notice prior to Closing of the truth or inaccuracy or which Purchaser otherwise
obtains actual knowledge of the untruth or inaccuracy; provided, however, the
foregoing limitation on Seller's indemnity shall not limit Purchaser's remedy as
otherwise described herein.
ARTICLE IV
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 Organization and Power. The Purchaser is a limited
partnership duly organized, validly existing and in good standing under the
laws of the Commonwealth of Virginia, and has all requisite partnership 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 under any document or instrument required to be
executed and delivered on behalf of the Purchaser hereunder.
4.2 Authorization and Execution. This Agreement has been duly
authorized by all necessary action on the part of the Purchaser, has been duly
executed and delivered by the Purchaser, and constitutes the valid and binding
agreement of the Purchaser, and is enforceable in accordance with its terms.
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4.3 Noncontravention. The execution and delivery of this
Agreement 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, the Purchaser's organizational documents,
partnership agreement 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 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 adversely affect the business,
financial position or results of operations of the Purchaser, (c) could
materially and 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 No Broker. The Purchaser has not engaged the services of, nor
is it 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.
ARTICLE V
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 date of Closing, 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 date hereof and as of the
date of Closing as if then made, there shall have occurred no material adverse
change in the financial condition of the Property since the date hereof, the
Seller shall have performed all of its covenants and other obligations under
this
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Agreement and the Seller shall have executed and delivered to the
Purchaser at Closing a certificate to the foregoing effect.
5.3 Survey. The Purchaser shall have obtained a current Survey of
the Land 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. The Survey shall be prepared
for the benefit of, and shall be certified to, the Purchaser and the Title
Company. Furthermore, the Survey shall be adequate for the Title Company to
delete any exception for general survey matters in the Owner's Title Policy.
5.4 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 and to the Tangible Personal 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 date of Closing that would
adversely affect the status of title to the Real Property.
5.5 Condition of Improvements. The Improvements and the Tangible
Personal Property (including but not limited to the mechanical systems,
plumbing, electrical, wiring, appliances, fixtures, heating, air conditioning
and ventilating equipment, elevators, boilers, equipment, roofs, structural
members and furnaces) shall be in the same condition at Closing as they are as
of the date hereof, reasonable wear and tear excepted. Prior to Closing, 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 and the Seller shall not have diminished the Inventory. 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, after consultation with and prompt acceptance by
the Purchaser, which shall not be unreasonably withheld, with similar items of
at least equal quality and quantity.
5.6 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
date of Closing, the Seller shall have received no notice of any extraordinary
increase or proposed increase in the rates charged for the Utilities from the
rates in effect as of the date hereof.
5.7 Land Use. The use and occupancy of the Property for hotel and
restaurant purposes are permitted as a matter of right as a principal use under
all laws applicable thereto without the necessity of any special use permit,
special exception or other special permit, permission or consent.
5.8 Hotel Franchise. Purchaser or its designee shall have
received a franchise with respect to the Hotel from the Licensor for a minimum
term of ten (10) years from the date hereof, all upon terms and conditions
acceptable to Purchaser. Purchaser will use its
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best efforts to obtain such approval and shall pay all costs and expenses
associated therewith, except with respect to any improvements to the Property
required by Licensor which Seller shall pay for at its sole cost and expense.
Seller shall assist Purchaser in all respects thereto.
5.9 Approval. The obligations of the Purchaser under this
Agreement are subject to the approval of (i) the board of directors of
Innkeepers Financial Corporation, a Virginia corporation, general partner of
the Purchaser, and (ii) the board of trustees of Innkeepers USA Trust, a
Maryland real estate investment trust (the "REIT"). In the event such approval
is not obtained by August 31, 1998, this Agreement shall automatically
terminate and the Deposit shall promptly be returned to Purchaser by Seller.
5.10 License. From the date hereof to and including the Closing
Date, Seller shall comply with and perform all of the duties and obligations of
licensee under the License and/or Commitment to License.
ARTICLE VI
CLOSING
6.1 Closing. On a date that is fifteen (15) days after the date
of notice from Purchaser to Seller of its intent to consummate the purchase of
the Property, Closing shall be held at on such date at the Washington, D.C.
offices of Hunton & ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, or
at a location that is mutually acceptable to the parties. In no event shall
Closing be held on a date later than September 1, 1998. Possession of the
Property shall be delivered to the Purchaser at Closing, subject only to the
Permitted Title Exceptions and guests of the Hotel.
6.2 Seller's Deliveries. 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 date of Closing:
(a) The certificate required by Section 5.2.
(b) The Deed.
(c) The ▇▇▇▇ of Sale [Inventory].
(d) The ▇▇▇▇ of Sale [Personal Property].
(e) Certificate(s)/Registration of Title for any
vehicle owned by the Seller and used in connection with the Property.
(f) Such agreements, affidavits or other
documents as may be required by the Title Company to issue the Owner's Title
Policy with affirmative coverage over mechanics' and materialmen's liens.
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(g) The FIRPTA Certificate.
(h) True, correct and complete copies of all
warranties, if any, of manufacturers, suppliers and installers possessed by the
Seller and relating to the Improvements and the Personal Property, or any part
thereof.
(i) Certified copies of the Seller's
Organizational Documents.
(j) Appropriate resolutions of the Seller,
together with all other necessary approvals and consents 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.
(k) If the Purchaser is assuming the Seller's
obligations under any or all of the Operating Agreements, the originals or
certified true and correct copies of such agreements, duly assigned to the
Purchaser and with such assignment acknowledged and approved by the other
parties to such Operating Agreements.
(l) The written consent of the Licensor to the
transfer of the license, if applicable, and if so required.
(m) A valid, final and unconditional certificate
of occupancy for the Real Property and Improvements, issued by the appropriate
governmental authority.
(n) A written instrument executed by the Seller,
to the extent the Seller has the right and authority to do so, conveying and
transferring to the Purchaser all of the Seller's right, title and interest in
any telephone numbers and facsimile numbers relating to the Property, and, if
the Seller maintains a post office box, conveying to the Purchaser all of its
interest in and to such post office box and the number associated therewith, so
as to assure a continuity in operation and communication.
(o) All current real estate and personal property
tax bills in the Seller's possession or under its control.
(p) An affidavit from the chief executive officer
of the Seller setting forth the date through which all employees have been paid
and setting forth and describing, in detail, as to each employee, all accrued
but unpaid vacation pay and other fringe benefits.
(q) A complete set of all guest registration
cards, guest transcripts, guest histories, and all other available guest
information. Such information as set out in this Section 6.2(q) shall be
deemed delivered at Closing if provided to the Purchaser at the Property.
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(r) An updated schedule of employees, showing
salaries and duties with a statement of the length of service of each such
employee, brought current to a date not more than 48 hours prior to the
Closing.
(s) A complete list of all advance room
reservations, functions and the like, in reasonable detail so as to enable the
Purchaser to honor the Seller's commitments in that regard.
(t) A list of the 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.
(u) Written notice executed by Seller notifying
all interested parties, including all tenants under any leases of the Property,
that the Property has been conveyed to the Purchaser and directing that all
payments, inquiries and the like be forwarded to the Purchaser at the address
to be provided by the Purchaser.
(v) All keys for the Property, which shall be
deemed delivered at Closing if provided to Purchaser at the Property.
(w) All books, records, operating reports,
appraisal reports, files and other materials in the Seller's possession or
control which are necessary in the Purchasers discretion to maintain continuity
of operation of the Property, which shall be deemed delivered at Closing if
provided to Purchaser, in whole or in part, at the Property, with the remainder
at the Closing.
(x) To the extent permitted under applicable law,
documents of transfer necessary to transfer to the Purchaser the Seller's
employment rating for workmens' compensation and state unemployment tax
purposes.
(y) An assignment of all warranties and
guarantees from all contractors and subcontractors, manufacturers, and
suppliers in effect with respect to the Improvements, to the extent the same
can be assigned.
(z) Complete set of "as-built" drawings for the
Improvements.
(aa) Such agreements, affidavits or other
documents as may be required by the Title Company in order to issue affirmative
mechanics lien coverage in the Owner's Title Policy for the Property.
(ab) Any other document or instrument reasonably
requested by the Purchaser or required hereby.
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6.3 Purchaser's Deliveries. At Closing, the Purchaser shall pay
or deliver to the Seller the following:
(a) The Purchase Price described in Section 2.3.
(b) Any other document or instrument reasonably requested
by the Seller or required hereby.
(c) Appropriate consents of the partners of the Purchaser
if required by Purchaser's Organizational Documents, together with appropriate
resolutions of the board of directors of the general partner of the Purchaser,
and all other necessary approvals of the consents of the Purchaser and the
REIT, authorizing (A) the execution on behalf of the Purchaser 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
Purchaser of its obligations hereunder and under such documents.
6.4 Mutual Deliveries. At Closing, the Purchaser and the Seller
shall mutually execute and deliver each to the other:
(a) The Assignment and Assumption Agreement.
(b) A closing statement reflecting the Purchase Price and
the adjustment and prorations required hereunder and the allocation of income
and expenses required hereby.
(c) Such transfer forms, if any, as may be required by
Licensor, to the extent not theretofore executed.
(d) Such other and further documents, papers and
instruments as may be reasonably requested by either party hereto or their
respective counsel.
6.5 Closing Costs. Except as is otherwise provided in Article
VII, each party hereto shall pay its own legal fees and expenses. All filing
fees for the Deed and the real estate transfer, recording or other similar taxes
due with respect to the transfer of title, all charges for title insurance
premiums and all other costs in carrying out the transactions contemplated
hereunder shall be paid by the Purchaser.
6.6 Income and Expense Allocations. All income, except any
Intangible Personal Property, and expenses with respect to the Property, and
applicable to the period of time before and after Closing, determined in
accordance with sound accounting principles consistently applied, shall be
allocated between the Seller and the Purchaser. The Seller shall be entitled
to all income and responsible for all expenses for the period of time up to but
not including the date of Closing, and the Purchaser shall be entitled to all
income and responsible for all expenses for the period of time from, after and
including the date of
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Closing. Only adjustments for real estate taxes 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 amount payable by the Purchaser
pursuant to Section 2.3. All other such adjustments shall be made by separate
agreement between the parties and shall be payable by check or wire directly
between the parties. Without limiting the generality of the foregoing, the
following items of income and expense shall be allocated at Closing:
(a) Current and prepaid rents, including, without
limitation, prepaid room receipts, function receipts and other reservation
receipts.
(b) Real estate and personal property taxes.
(c) Amounts under Operating Agreements to be assigned to
and assumed by the Purchaser.
(d) Utility charges (including but not limited to charges
for water, sewer and electricity).
(e) Value of fuel stored on the Property at the price
paid for such fuel by the Seller, including any taxes.
(f) All prepaid reservations and contracts for rooms
confirmed by Seller prior to the Closing Date for dates after the Closing Date,
all of which shall be honored by Purchaser.
(g) The Room Ledger, if any, shall be divided equally
between the parties.
(h) Wages, vacation pay, pension and welfare benefits and
other fringe benefits of all persons employed at the Property who the Purchaser
elects to employ.
(i) Such other items as are usually and customarily
prorated between purchasers and sellers of hotel properties in the area where
the Property is located.
The Seller shall be required to pay all sales taxes and similar
impositions currently up to, but not including, the date of Closing.
Purchaser shall not be obligated to collect any accounts receivable or
revenues accrued prior to the Closing Date for Seller, but if Purchaser
collects same, such amounts will be promptly remitted to Seller in the form
received.
If accurate allocations cannot be made at Closing because current
bills are not obtainable (as, for example, in the case of utility bills or tax
bills), the parties shall allocate such income or expenses at Closing on the
best available information, subject to adjustment
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upon receipt of the final ▇▇▇▇ or other evidence of the applicable income or
expense. The obligation to make the adjustment shall survive the closing of the
transaction contemplated by this Agreement. Any income received or expense
incurred by the Seller or the Purchaser with respect to the Property after the
date of Closing shall be promptly allocated in the manner described herein and
the parties shall promptly pay or reimburse any amount due. The Seller shall
pay at Closing all special assessments and taxes applicable to the Property then
due and owing except real estate taxes, which shall be prorated between the
parties.
ARTICLE VII
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 or assigned, as
applicable, to the Purchaser at Closing.
7.2 Risk of Loss. The risk of any loss or damage to the Property
prior to the recordation of the Deed, or delivery of the Deed and physical
possession of the Property at 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, all insurance proceeds and rights to proceeds
arising out of such loss or damage shall be paid or assigned, as applicable, to
the Purchaser at Closing.
ARTICLE VIII
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.
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 its representations, warranties, covenants or obligations set forth
herein except for any breach of a representation or warranty of which Purchaser
had actual knowledge prior to the Closing and nevertheless elected to
consummate the Closing.
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Purchaser hereby indemnifies and holds Seller 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
Seller, whether before or after Closing, as a result of any breach in any
material respect by Purchaser of any of its representations, warranties,
covenants or obligations set forth herein, except for any breach of a
representation or warranty of which Seller had actual knowledge prior to Closing
and nevertheless elected to consummate the Closing. The provisions of this
Section shall survive the Closing of the transaction contemplated hereby for a
period of one (1) year after the Closing Date (unless Purchaser or Seller makes
a claim by notice in writing to the other party in connection with any such
representation, warranty, covenant or obligation that is the subject of such
claim shall survive until such claim is finally resolved).
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, and the Seller fails to cure any such matter within
ten business days after notice thereof from the Purchaser, the Purchaser, at
its option, may elect either (a) to terminate this Agreement, in which event
the Deposit shall be forthwith returned to the Purchaser and all other rights
and obligations of the Seller and the Purchaser hereunder shall terminate
immediately, or (b) to waive its right to terminate and, instead, to proceed
to Closing. If the Purchaser terminates this Agreement as a consequence of a
misrepresentation or breach of a warranty or covenant by the Seller, or a
failure by the Seller to perform its obligations hereunder, at Purchaser's
option, either the Deposit shall be promptly returned to Purchaser and, in
addition, Seller shall be obligated upon demand to reimburse Purchaser for
Purchaser's reasonable out-of-pocket investigation, financing and other costs,
including reasonable attorney fees, relating to Purchaser's entering into this
Agreement, inspecting the Property and preparing for a Closing of the
transaction contemplated hereby, not to exceed One Hundred Thousand Dollars
($100,000.00) (which reimbursement obligation shall survive such termination),
and the parties hereto shall be released from all further obligations hereunder
except those which expressly survive a termination of this Agreement, or
Purchaser may elect to proceed to Closing and shall have the right to pursue
specific performance.
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), and the Purchaser fails to cure any
such default within ten business days after notice thereof from the Seller,
then 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. 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.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Completeness; Modification. This Agreement constitutes the
entire agreement between the parties hereto with respect to the transactions
contemplated hereby and supersedes all prior discussions, understandings,
agreements and negotiations between the parties hereto. This Agreement may be
modified only by a written instrument duly executed by the parties hereto.
9.2 Assignments. The Purchaser may freely assign its rights
hereunder to an affiliate of the Purchaser without the consent of the Seller.
Except as otherwise set forth in this section neither the Seller nor the
Purchaser shall have the right to assign all or any part of its interest in this
Agreement without the prior written consent of the other party, which consent
shall not be unreasonably withheld, conditioned or delayed, and any such
attempted assignment without the other party's consent shall be null and void
and of no force and effect.
9.3 Successors and Assigns. This Agreement shall bind and inure
to the benefit of the parties hereto and their respective successors and
assigns.
9.4 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.
9.5 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 of Georgia.
9.6 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 parties hereto appear on each counterpart
hereof. All counterparts hereof shall collectively constitute a single
agreement.
9.7 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,
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covenant or condition of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
9.8 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.
9.9 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 Express (or a
comparable overnight delivery service) or sent by the United States mail,
certified, postage prepaid, return receipt 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 delivered to the intended recipient.
If to the Seller: JF Atlanta, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: 407/▇▇▇-▇▇▇▇
If to the Purchaser: Innkeepers USA Limited Partnership
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: 407/▇▇▇-▇▇▇▇
With a copy to: Hunton & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Or to such other address as the intended recipient may have specified in a
notice to the other party. Any party hereto may change its address or
designate different or other persons or entities to receive copies by notifying
the other party and the Escrow Agent in a manner described in this Section.
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 the
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Closing and shall not merge into the Deed or any other 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.
9.14 Time of Essence. Time is of the essence with respect to every
provision hereof.
9.15 Confidentiality. Seller and its representatives, including
any brokers or other professionals representing Seller, shall keep the
existence and terms of this Agreement strictly confidential, except to the
extent disclosure is compelled by law, and then only to the extent of such
compulsion.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be executed in their names by their respective duly-authorized
representatives.
SELLER:
JF ATLANTA, LLC, a Georgia limited liability
company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Member
PURCHASER
INNKEEPERS USA LIMITED PARTNERSHIP, a
Virginia limited partnership
By: Innkeepers Financial Corporation,
a Virginia corporation, its sole general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
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EXHIBIT A
THE LAND
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EXHIBIT B
THE PREVIOUS CONTRACT
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EXHIBIT C
PERMITTED TITLE EXCEPTIONS