Exhibit 10.1
PURCHASE AND SALE AGREEMENT
by and among
SHOLODGE, INC. AND CERTAIN OF ITS AFFILIATES
as Sellers,
and
HOSPITALITY PROPERTIES TRUST,
as Purchaser
___________________________
October 24, 1997
TABLE OF CONTENTS
SECTION 1. DEFINITIONS...............................1
1.1 Adjacent Land...................................1
1.2 Agreement.......................................1
1.3 Agreement to Lease..............................2
1.4 Allocable Purchase Price........................2
1.5 Assets..........................................2
1.6 Business Day....................................2
1.7 Closing.........................................2
1.8 Closing Date....................................2
1.9 Contracts.......................................2
1.10 Defective Property..............................2
1.11 Documents.......................................2
1.12 Far West........................................2
1.13 Fee Properties..................................2
1.14 FF&E............................................2
1.15 Ground Lease ...................................3
1.16 Ground Lease Property...........................3
1.17 Hotel...........................................3
1.18 Improvements....................................3
1.19 Intangible Property.............................3
1.20 Lease...........................................3
1.21 Midwest.........................................3
1.22 Mobat...........................................3
1.23 Permitted Encumbrances..........................3
1.24 Properties......................................4
1.25 Purchase Price..................................4
1.26 Purchaser.......................................4
1.27 Real Property...................................4
1.28 Retained Funds..................................4
1.29 Review Period...................................4
1.30 Sellers.........................................4
1.31 ShoLodge........................................4
1.32 ShoLodge Parties................................4
1.33 Shoney's .......................................4
1.34 Sunshine .......................................4
1.35 Surveys.........................................4
1.36 Tenant..........................................4
1.37 Tenant Leases...................................5
1.38 Texas...........................................5
1.39 Title Commitments...............................5
1.40 Title Company...................................5
SECTION 2. PURCHASE AND SALE; DILIGENCE..............5
2.1 Purchase and Sale................................5
2.2 Diligence Inspections............................5
2.3 Defective Properties.............................6
2.4 Title Matters. .................................7
2.5 Survey Matters...................................8
SECTION 3. PURCHASE AND SALE.........................9
3.1 Closing..........................................9
3.2 Purchase Price...................................9
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE9
4.1 Closing Documents................................9
4.2 Condition of Properties.........................10
4.3 Title Policies..................................11
4.4 Opinions of Counsel.............................11
4.5 Market Studies..................................11
4.6 FF&E Reserve Funding............................11
4.7 Certain Documents and Exhibits..................11
SECTION 5. CONDITIONS TO SHOLODGE PARTIES' OBLIGATION
TO CLOSE......................................12
5.1 Purchase Price..................................12
5.2 Closing Documents...............................12
5.3 Opinion of Counsel..............................12
5.4 Certain Documents and Exhibits..................12
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SHOLODGE
PARTIES.......................................13
6.1 Status and Authority of the ShoLodge Parties....13
6.2 Action of the ShoLodge Parties..................13
6.3 No Violations of Agreements.....................13
6.4 Litigation......................................13
6.5 Existing Leases, Agreements, Etc................14
6.6 Disclosure......................................14
6.7 Utilities, Etc..................................14
6.8 Compliance With Law.............................14
6.9 Taxes...........................................14
6.10 Not A Foreign Person............................15
6.11 Hazardous Substances............................15
6.12 Insurance.......................................15
6.13 Ground Lease....................................15
6.14 Ownership of Sellers............................15
6.15 Adjacent Land...................................15
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER17
7.1 Status and Authority of the Purchaser...........17
7.2 Action of the Purchaser.........................17
7.3 No Violations of Agreements.....................17
7.4 Litigation......................................17
SECTION 8. COVENANTS OF THE SHOLODGE PARTIES........18
8.1 Compliance with Laws, Etc.......................18
8.2 Approval of Agreements..........................18
8.3 Estoppel Certificates...........................18
8.4 Notice of Material Changes or Untrue
Representations...............................18
8.5 Operation of Properties.........................18
8.6 Financial Information...........................18
SECTION 9. APPORTIONMENTS...........................19
9.1 Real Property Apportionments....................19
9.2 Closing Costs...................................19
SECTION 10. DEFAULT.................................19
10.1 Default by the ShoLodge Parties................19
10.2 Default by the Purchaser.......................20
SECTION 11. MISCELLANEOUS...........................20
11.1 Agreement to Indemnify.........................20
11.2 Brokerage Commissions..........................21
11.3 Publicity......................................21
11.4 Notices........................................22
11.5 Waivers, Etc...................................23
11.6 Assignment; Successors and Assigns.............23
11.7 Severability...................................23
11.8 Counterparts, Etc..............................24
11.9 Governing Law..................................24
11.10 Performance on Business Days...................24
11.11 Attorneys' Fees................................25
11.12 Section and Other Headings.....................25
11.13 Nonliability of Trustees.......................25
Schedule A - The Properties; Allocable Purchase Prices
Schedule B-1-14 - Legal Descriptions
Schedule C - Form of Surveyor's Certificate
Schedule D - Materials Regarding Tempe and Albuquerque Lots
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made as of the ____ day of
October, 1997, by and among (i) SHOLODGE, INC.,("SHOLODGE"), (ii) SUNSHINE
INNS, INC. ("SUNSHINE"), (iii) SOUTHEAST TEXAS INNS, INC. ("TEXAS"), (iv)
MIDWEST INNS, INC. ("MIDWEST"), (v) FAR WEST INNS, INC. ("FAR WEST"), (vi)
SHONEY'S INN, INC. ("SHONEY'S"), (vii) MOBAT, INC. ("MOBAT"), each a
Tennessee corporation, and (viii) THE HOTEL GROUP, INC., a Kansas
corporation (together with Sunshine, Texas, Midwest, Far West, Shoney's and
Mobat, jointly and severally, the "SELLERS") and HOSPITALITY PROPERTIES
TRUST, a Maryland real estate investment trust ("PURCHASER").
WITNESSETH:
WHEREAS, the Sellers are the owners of all the Fee Properties and the
holders of the tenant's interest under the Ground Lease (all capitalized
terms used and not otherwise defined herein having the meanings ascribed to
such terms in SECTION 1); and
WHEREAS, the Purchaser desires to purchase the Properties, as more
fully set forth below; and
WHEREAS, the Sellers are willing to sell all of the Fee Properties to
the Purchaser and assign the tenant's interest under the Ground Lease to
the Purchaser, subject to and upon the terms and conditions hereinafter set
forth; and
WHEREAS, ShoLodge owns, directly or indirectly, all of the outstanding
capital stock of the Sellers and the transactions contemplated by this
Agreement are of direct and material benefit to ShoLodge;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, the ShoLodge Parties
and the Purchaser hereby agree as follows:
SECTION 1. DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings set
forth below or in the Section of this Agreement referred to below:
1.1 "ADJACENT LAND" shall mean vacant land owned by the ShoLodge
Parties and their affiliates adjacent to the Properties located in San
Antonio, Texas, Atlanta, Georgia, Dallas, Texas, Austin, Texas and
Hendersonville, Tennessee.
1.2 "AGREEMENT" shall mean this Purchase and Sale Agreement, together
with SCHEDULES A THROUGH D attached hereto, as it and they may be amended
from time to time as herein provided.
1.3 "AGREEMENT TO LEASE" shall mean that certain Agreement to Lease,
dated as of the date hereof, by and between the Purchaser and ShoLodge, as
it may be amended, restated, supplemented or otherwise modified from time
to time.
1.4 "ALLOCABLE PURCHASE PRICE" shall mean, with respect to any
Property, the applicable amount set forth on SCHEDULE A to this Agreement.
1.5 "ASSETS" shall mean, with respect to any Hotel, collectively, all
of the Real Property, the FF&E, the Contracts,
the Documents, the Improvements, the Intangible Property and the Tenant
Leases owned by any of the Sellers in connection with or relating to such
Hotel.
1.6 "BUSINESS DAY" shall mean any day other than a Saturday, Sunday
or any other day on which banking institutions in The Commonwealth of
Massachusetts or the State of New York are authorized by law or executive
action to close.
1.7 "CLOSING" shall have the meaning given such term in SECTION 3.1.
1.8 "CLOSING DATE" shall have the meaning given such term in SECTION
3.1.
1.9 "CONTRACTS" shall mean, with respect to any Property, all hotel
licensing agreements and other service contracts, equipment leases, booking
agreements and other arrangements or agreements to which any of the Sellers
is a party affecting the ownership, repair, maintenance, management,
leasing or operation of such Property, to the extent the Sellers' interest
therein is assignable or transferable.
1.10 "DEFECTIVE PROPERTY" shall have the meaning given such term in
SECTION 2.3(A).
1.11 "DOCUMENTS" shall mean, with respect to any Property, all books,
records and files relating to the leasing, maintenance, management or
operation of such Property.
1.12 "FAR WEST" shall have the meaning given such term in the first
paragraph of this Agreement.
1.13 "FEE PROPERTIES" shall mean all of the Properties identified on
SCHEDULE A other than the Properties located in Dallas, Galleria, Texas.
1.14 "FF&E" shall mean, with respect to any Property, all appliances,
machinery, devices, fixtures, appurtenances, equipment, furniture,
furnishings and articles of tangible personal property of every kind and
nature whatsoever (other than motor vehicles) owned by any of the Sellers
and located in or at, or used in connection with the ownership, operation
or maintenance of such Property.
1.15 "GROUND LEASE" shall mean the Ground Lease, dated January 24,
1996, by and between Christian Chapel CME Church, as landlord, and Texas,
as tenant, as amended from time to time.
1.16 "GROUND LEASE PROPERTY" shall mean the Property identified on
SCHEDULE A as located in Dallas, Galleria, Texas.
1.17 "HOTEL" shall mean each hotel located at the properties
identified on SCHEDULE A, the legal descriptions of which are set forth on
SCHEDULES B-1 THROUGH B-14.
1.18 "IMPROVEMENTS" shall mean, with respect to any Property, all
buildings, fixtures, walls, fences, landscaping and other structures and
improvements situated on, affixed or appurtenant to the Real Property with
respect to such Property.
1.19 "INTANGIBLE PROPERTY" shall mean, with respect to any Property,
all transferable or assignable permits, certificates of occupancy,
operating permits, sign permits, development rights and approvals,
certificates, licenses, warranties and guarantees, the Contracts, telephone
exchange numbers identified with such Property held by any of the Sellers
and all other transferable intangible property, miscellaneous rights,
benefits and privileges of any kind or character with respect to such
Property held by any of the Sellers, except for liquor licenses or to the
extent held by or transferred to the Tenant under the Lease.
1.20 "LEASE" shall mean the lease to be entered into between the
Purchaser or its subsidiary, as landlord, and the Tenant, as tenant, with
respect to the Properties pursuant to the Agreement to Lease.
1.21 "MIDWEST" shall have the meaning given such term in the first
paragraph of this Agreement.
1.22 "MOBAT" shall have the meaning given such term in the first
paragraph of this Agreement.
1.23 "PERMITTED ENCUMBRANCES" shall mean, with respect to any
Property, (a) liens for taxes, assessments and governmental charges with
respect to such Property not yet due and payable or due and payable but not
yet delinquent; (b) applicable zoning regulations and ordinances provided
the same do not prohibit or impair in any material respect use of such
Property as an all suites hotel as currently operated and constructed; (c)
such other nonmonetary encumbrances as do not, in the Purchaser's
reasonable opinion, impair marketability and do not materially interfere
with the use of such Property as a fully functioning all suites hotel as
currently operated and constructed; (d) the Ground Lease; (e) UCC Financing
Statements which would be permitted pursuant to the terms of Section 21.9
of the Lease; and (f) such other nonmonetary encumbrances with respect to
such Property which are not objected to by the Purchaser in accordance with
SECTIONS 2.4 AND 2.5.
1.24 "PROPERTIES" shall mean, collectively, all of the Assets relating
to the properties identified on SCHEDULE A, the legal descriptions of which
are set forth in SCHEDULES B-1-B-14.
1.25 "PURCHASE PRICE" shall have the meaning given such term in
SECTION 3.2.
1.26 "PURCHASER" shall have the meaning given such term in the first
paragraph of this Agreement.
1.27 "REAL PROPERTY" shall mean, with respect to any Property which is
a Fee Property, the real property described in the applicable SCHEDULE B-1
THROUGH B-14, and, with respect to any Property which is a Ground Lease
Property, the leasehold estate created by the applicable Ground Lease,
together with all easements, rights of way, privileges, licenses and
appurtenances which the Sellers may own with respect thereto.
1.28 "RETAINED FUNDS" shall mean an amount equal to ten percent (10%)
of the Purchase Price of the Properties.
1.29 "REVIEW PERIOD" shall mean the period commencing on the date of
this Agreement and expiring on the first to occur of the date thirty (30)
days after the date of this Agreement and the Closing Date.
1.30 "SELLERS" shall have the meaning given such term in the first
paragraph of this Agreement.
1.31 "SHOLODGE" shall have the meaning given such term in the first
paragraph of this Agreement.
1.32 "SHOLODGE PARTIES" shall mean, collectively, ShoLodge and the
Sellers, jointly and severally.
1.33 "SHONEY'S" shall have the meaning given such term in the first
paragraph of this Agreement.
1.34 "SUNSHINE" shall have the meaning given such term in the first
paragraph of this Agreement.
1.35 "SURVEYS" shall have the meaning given such term in SECTION 2.5.
1.36 "TENANT" shall have the meaning given such term in the Agreement
to Lease.
1.37 "TENANT LEASES" shall mean, with respect to any Property, all
leases, rental agreements or other agreements (other than agreements for
letting of rooms or other facilities to hotel guests) (including all
amendments or modifications thereto) which entitle any person to have
rights with respect to the use or occupancy of any portion of such
Property.
1.38 "TEXAS" shall have the meaning given such term in the first
paragraph of this Agreement.
1.39 "TITLE COMMITMENTS" shall have the meaning given such term in
SECTION 2.4.
1.40 "TITLE COMPANY" shall mean American Title Company of Dallas,
Texas, or such other title insurance company as shall have been selected by
the Purchaser and approved by the Sellers, which approval shall not be
unreasonably withheld, delayed or conditioned.
SECTION 2. PURCHASE AND SALE; DILIGENCE.
2.1 PURCHASE AND SALE. In consideration of the mutual covenants
herein contained, the Purchaser hereby agrees to purchase from the Sellers
and ShoLodge hereby agrees to cause the Sellers to sell and the Sellers
hereby agree to sell to the Purchaser, all of the Sellers' right, title and
interest in and to the Properties for the Purchase Price, subject to and in
accordance with the terms and conditions of this Agreement.
2.2 DILIGENCE INSPECTIONS. For the Review Period and, thereafter,
until Closing, the Sellers shall permit the Purchaser and its
representatives to inspect the Properties and the Improvements (including,
without limitation, all roofs, electric, mechanical and structural
elements, and HVAC systems therein), to perform due diligence, soil
analysis and environmental investigations, to examine the books of account
and records of the Sellers with respect to the Properties, including,
without limitation, all leases and agreements affecting the Properties, and
make copies thereof, at such reasonable times as the Purchaser or its
representatives may request by notice to the Sellers (which notice may be
oral). To the extent that, in connection with such investigations, the
Purchaser, its agents, representatives or contractors, damages or disturbs
any of the Real Property, the Improvements or FF&E located thereon, the
Purchaser shall return the same to substantially the same condition which
existed immediately prior to such damage or disturbance. Neither the
Purchaser nor any of its agents, representatives or contractors shall have
any right whatsoever to alter the condition of any Property, or portion
thereof, without the prior written consent of the Sellers, which consent
shall not be unreasonably withheld, delayed or conditioned. In no event
shall any such inspection include any drilling into or under the surface of
any Property, soil sampling, water sampling or similar activities commonly
known as a "Phase II environmental study" without the prior written consent
of the Sellers, which consent shall not be unreasonably withheld, delayed
or conditioned. In the event that the transactions contemplated by this
Agreement are not closed and consummated for any reason, the Purchaser
shall, upon the Sellers' request, deliver to the Sellers all tests, reports
and inspections of the Properties made and conducted by the Purchaser or
for its benefit or any other documents or information the Purchaser has
received pursuant to this Agreement. The Purchaser shall indemnify, defend
and hold harmless the Sellers from and against any and all expense, loss or
damage which the Sellers may incur as a result of any act or omission of
the Purchaser or its representatives, agents or contractors in connection
with such examinations and inspections, other than to the extent that any
expense, loss or damage arises from any negligence or misconduct of the
Sellers. The provisions of this SECTION 2.2 shall survive the termination
of this Agreement and the Closing.
2.3 DEFECTIVE PROPERTIES. (a) In the event that (i) the Purchaser
reasonably determines that a Property has structural, environmental or
other structural defects or conditions such that (x) expenditures equal to
or greater than three percent (3%) of the Allocable Purchase Price of such
Property are required in order to bring such Property into a reasonably
satisfactory condition in accordance with prevailing standards, as the case
may be, for like hotels, (y) the calculation with respect to such Property
of net operating income varies by three percent (3%) or more of that set
forth in the financial data provided by the ShoLodge Parties to the
Purchaser prior to the date hereof, or (z), in the case of the Ground Lease
Property, if the Purchaser shall determine that it is dissatisfied with any
material provision of the Ground Lease (any such Property being hereinafter
referred to as a "DEFECTIVE PROPERTY"), and (ii) the Purchaser gives
written notice thereof to the ShoLodge Parties no later than the expiration
of the Review Period (time being of the essence with respect to the giving
of such notice), identifying the Defective Property or Defective Properties
and the specific defects with respect thereto, the ShoLodge Parties shall,
subject to paragraph (c) below, be required to permit the Purchaser to
acquire all of the Properties other than such Defective Property or
Defective Properties.
(b) If, prior to the Closing, (i) any Property suffers a casualty or
condemnation which would cause such Property or Properties to become a
Defective Property, (ii) such Property is not, prior to the Closing,
restored to a condition substantially the same as the condition thereof
immediately prior to such casualty or condemnation, and (iii) the Purchaser
provides written notice of same to the ShoLodge Parties no later than the
Closing Date, time being of the essence, the ShoLodge Parties shall be
required to permit the Purchaser to acquire all of the Properties other
than such Defective Property or Properties. Promptly upon learning of the
same, the ShoLodge Parties covenant and agree to provide the Purchaser with
prompt written notice of any casualty or condemnation affecting any
Property.
(c) If the Purchaser timely identifies any Defective Property and the
Purchaser and the ShoLodge Parties shall, acting reasonably and in good
faith be unable or unwilling to agree that (x) the ShoLodge Parties shall,
at their sole cost, remedy the applicable defect prior to the Closing (in
which event the ShoLodge Parties shall have the right to adjourn the
Closing Date for up to ninety (90) days for such purpose), (y) the
Purchaser shall, notwithstanding such defect, acquire the Defective
Property subject to a reduction in the Allocable Purchase Price of the
Defective Property sufficient to compensate the Purchaser for such defect
or (z) on the substitution of another property owned by the ShoLodge
Parties for such Defective Property, this Agreement shall, at the
Purchaser's option, terminate with respect to such Defective Property and
the Purchase Price shall be reduced by the Allocable Purchase Price of such
Defective Property.
2.4 TITLE MATTERS. Prior to execution of this Agreement, the
Purchaser has ordered from the Title Company and directed the Title Company
promptly to deliver to the Purchaser a preliminary title commitment, for an
ALTA extended owner's policy of title insurance with respect to each of the
Properties, together with complete and legible copies of all instruments
and documents referred to as exceptions to title (collectively, the "TITLE
COMMITMENTS").
Within ten (10) Business Days after receipt of the Title Commitments,
the Purchaser shall give the ShoLodge Parties notice of any title
exceptions (other than Permitted Encumbrances) which adversely affect any
Property in any material respect and as to which the Purchaser reasonably
objects. If, for any reason, the ShoLodge Parties are unable or unwilling
to take such actions as may be required to cause such exceptions to be
removed from the Title Commitments, the ShoLodge Parties shall give the
Purchaser notice thereof; it being understood and agreed that the failure
of the ShoLodge Parties to give such notice within ten (10) Business Days
after the Purchaser's notice of objection shall be deemed an election by
the ShoLodge Parties to remedy such matters. If the ShoLodge Parties shall
be unable or unwilling to remove any title defects to which the Purchaser
has reasonably objected, the Purchaser may elect (i) to terminate this
Agreement with respect to the affected Property, in which event, the
Purchase Price shall be reduced by the Allocable Purchase Price of the
affected Properties and this Agreement shall be of no further force and
effect with respect to the affected Properties or (ii) to consummate the
transactions contemplated hereby, notwithstanding such title defect,
without any abatement or reduction in the Purchase Price on account
thereof. The Purchaser shall make any such election by written notice to
the ShoLodge Parties given on or prior to the fifth Business Day after the
ShoLodge Parties' notice of their unwillingness or inability to cure such
defect. Failure of the Purchaser to give such notice shall be deemed an
election by the Purchaser to proceed in accordance with clause (ii) above
and such exception shall be deemed a Permitted Encumbrance.
2.5 SURVEY MATTERS. Prior to execution of this Agreement, the
ShoLodge Parties have arranged for the preparation of an ALTA survey with
respect to each of the Properties (the "SURVEYS") by a licensed surveyor in
the jurisdiction in which each such Property is located, which (i) contains
an accurate legal description of the applicable Property, (ii) shows the
exact location, dimension and description (including applicable recording
information) of all utilities, easements, encroachments and other physical
matters affecting such Property, the number of striped parking spaces
located thereon and all applicable building set-back lines, (iii) states
whether the applicable Property is located within a 100-year flood plain
and (iv) includes a certification in the form set forth in SCHEDULE C, or
such other form as may be acceptable to the Purchaser, addressed to the
Purchaser, the Title Company and any other persons requested by the
Purchaser or designated by the ShoLodge Parties.
Within ten (10) Business Days after receipt of the Surveys, the
Purchaser shall give the ShoLodge Parties notice of any matters shown
thereon (other than Permitted Encumbrances) which adversely affect any such
Property in any material respect and as to which the Purchaser reasonably
objects. If, for any reason, the ShoLodge Parties are unwilling or unable
to take such actions as may be required to remedy the objectionable
matters, the ShoLodge Parties shall give the Purchaser prompt notice
thereof; it being understood and agreed that the failure of the ShoLodge
Parties to give such notice within ten (10) Business Days after the
Purchaser's notice of objection shall be deemed an election by the ShoLodge
Parties to remedy such matters. If the ShoLodge Parties shall be unwilling
or unable to remove any survey defect to which the Purchaser has reasonably
objected, the Purchaser may elect (i) to terminate this Agreement with
respect to the affected Property, in which event, the Purchase Price shall
be reduced by the Allocable Purchase Price of the affected Properties and
this Agreement shall terminate and be of no further force or effect with
respect to the affected Properties or (ii) to consummate the transactions
contemplated hereby, notwithstanding such defect, without any abatement or
reduction in the Purchase Price on account thereof. The Purchaser shall
make any such election by written notice to the ShoLodge Parties given on
or prior to the fifth Business Day after the ShoLodge Parties' notice of
their inability to cure such defect and time shall be of the essence with
respect to the giving of such notice. Failure of the Purchaser to give
such notice shall be deemed an election by the Purchaser to proceed in
accordance with clause (ii) above and such matter shall be deemed a
Permitted Encumbrance.
SECTION 3. PURCHASE AND SALE.
3.1 CLOSING. The purchase and sale of the Properties shall be
consummated at a closing (the "CLOSING") to be held at the offices of
▇▇▇▇▇▇▇▇ & Worcester LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, or
at such other location as the ShoLodge Parties and the Purchaser may agree,
at 10:00 a.m. local time, on a date (the "CLOSING DATE") which is the later
to occur of (i) November 10, 1997 and (ii) the date as of which all
conditions precedent to the Closing herein set forth have either been
satisfied or waived by the party in whose favor such conditions run. In
the event that the Closing shall not have occurred on or before January 30,
1998, either party shall have the right, provided such party is not in
default under this Agreement, by the giving of written notice thereof to
the other, to terminate this Agreement.
3.2 PURCHASE PRICE. (a) At the Closing, the Purchaser shall pay to
the ShoLodge Parties, for the Properties, a purchase price (the "PURCHASE
PRICE") in the amount of One Hundred Forty Million Dollars ($140,000,000),
less the amount of the Retained Funds, which amount shall be held and paid
in accordance with the applicable provisions of the Lease, except that
there shall be added to or deducted from the Purchase Price such amounts as
may be required pursuant to SECTION 9.
(b) The Purchase Price shall be payable at the Closing by wire
transfer of immediately available funds on the Closing Date to an account
or accounts to be designated by the ShoLodge Parties prior to the Closing.
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE.
The obligation of the Purchaser to acquire the Properties on the
Closing Date shall be subject to the satisfaction of the following
conditions precedent on and as of the Closing Date:
4.1 CLOSING DOCUMENTS. The ShoLodge Parties shall have delivered to
the Purchaser:
(a) With respect to all of the Fee Properties, a good and sufficient
warranty deed with covenants against grantor's acts, or its local
equivalent, in proper statutory form for recording, duly executed and
acknowledged by the Sellers, conveying good and marketable title to the
applicable Fee Properties, free from all liens and encumbrances other than
the Permitted Encumbrances;
(b) With respect to all of the Ground Lease Property, an assignment
and assumption agreement, in form and substance reasonably satisfactory to
the Sellers and the Purchaser, duly executed and acknowledged by the holder
of the ground tenant's interest, with respect to all of such tenant's
right, title and interest in, to and under the Ground Lease together with
the written consent of the lessor under the Ground Lease if such consent is
required pursuant to the terms of such Ground Lease;
(c) An estoppel certificate, in form and substance reasonably
satisfactory to the Purchaser, from the lessor under the Ground Lease,
confirming, to such party's knowledge, that the Ground Lease, is in full
force and effect, the amount of the rents and other sums payable
thereunder, that, to the knowledge of the certifying party, no default or
event which with the giving of notice and/or lapse of time could constitute
a default has occurred and is continuing thereunder, and regarding such
other matters as the Purchaser may reasonably require;
(d) A ▇▇▇▇ of sale and assignment agreement, in form and substance
reasonably satisfactory to the Sellers and the Purchaser, duly executed and
acknowledged by the Sellers, with respect to all of the Sellers' right,
title and interest in, to and under the FF&E, the Contracts, the Documents,
the Intangible Property and the Tenant Leases with respect to the
Properties;
(e) A duly executed copy of the Lease, all of the Incidental
Documents (as such term is defined in the Lease) and all other documents
and sums required to be delivered by the ShoLodge Parties and/or the Tenant
pursuant to the Agreement to Lease;
(f) Certified copies of all charter documents, applicable corporate
resolutions and certificates of incumbency with respect to the ShoLodge
Parties and the Tenant; and
(g) Such other conveyance documents, certificates, deeds, affidavits
and other instruments as the Purchaser or the Title Company may reasonably
require to effectuate the transactions contemplated by this Agreement.
4.2 CONDITION OF PROPERTIES. (a) All the Improvements located on
the Real Property shall, except as otherwise provided in SECTION 2.3, be in
substantially the same physical condition as on the date of this Agreement,
ordinary wear and tear excepted;
(b) No material default or event which with the giving of notice
and/or lapse of time could constitute a material default shall have
occurred and be continuing under any material agreement benefiting or
affecting the Properties in any respect;
(c) No action shall be pending or threatened for the condemnation or
taking by power of eminent domain of all or any material portion of the
Properties which would render any Property a Defective Property; and
(d) All material licenses, permits and other authorizations necessary
for the current use, occupancy and operation of the Properties shall be in
full force and effect.
4.3 TITLE POLICIES. The Title Company shall be prepared, subject
only to payment of the applicable premium and endorsement fees and delivery
of all conveyance documents in recordable form, to issue title insurance
policies to the Purchaser, in form and substance reasonably satisfactory to
the Purchaser in accordance with SECTION 2.4, together with such
affirmative coverages as the Purchaser may reasonably require and shall
have been determined by the Title Company as available prior to the
expiration of the Review Period.
4.4 OPINIONS OF COUNSEL. (a) The Purchaser shall have received a
written opinion from counsel to the ShoLodge Parties, which counsel shall
be reasonably acceptable to the Purchaser, in form and substance reasonably
satisfactory to the Purchaser, regarding the organization and authority of
the ShoLodge Parties and the Tenant, the enforceability of this Agreement,
the Lease and the Incidental Documents (as defined in the Lease) and such
other matters with respect to the transactions contemplated by this
Agreement as the Purchaser may reasonably require.
(b) The Purchaser shall have received a zoning diligence memorandum
from local counsel to the Purchaser, in form and substance reasonably
satisfactory to the Purchaser, regarding the compliance of the Properties
with respect to zoning, licensing and such other matters as the Purchaser
may reasonably require.
4.5 MARKET STUDIES. As of the Closing Date, the Purchaser shall have
received and approved original market study reports, dated within sixty
(60) days prior to the Closing Date, addressed to the Purchaser, prepared
by a qualified real estate appraiser reasonably satisfactory to the
Purchaser, such market studies to be otherwise in form and substance
reasonably acceptable to the Purchaser.
4.6 FF&E RESERVE FUNDING. The FF&E Funded Amount (as defined in the
Lease) shall have been deposited in accordance with the Lease.
4.7 CERTAIN DOCUMENTS AND EXHIBITS. (a) The Purchaser and the owners
of the Adjacent Land shall have entered into an easement and restriction
agreement with respect to all Adjacent Land providing, INTER ALIA, (i)
that, other than in the case of the San Antonio, Texas Adjacent Land, no
building more than thirty feet in height shall be constructed on the
Adjacent Land, (ii) for driveway and other easements over the Adjacent Land
for the benefit of the Real Property adjacent thereto, (iii) that, other
than in the case of the San Antonio, Texas Adjacent Land, such Adjacent
Land may be used only for restaurant purposes or other uses approved by the
Purchaser (which approval shall not be unreasonably withheld, delayed or
conditioned), and (iv) covering such other matters as the Purchaser may
reasonably require, such easement and restriction agreement to be otherwise
in form and substance reasonably satisfactory to the Purchaser and the
ShoLodge Parties.
(b) The Purchaser and the applicable ShoLodge Parties shall have
entered into a reconveyance agreement providing, INTER ALIA, (i) for the
reconveyance of a portion of the Real Property located in Tempe, Arizona
and Albuquerque, New Mexico as shown on and in accordance with SCHEDULE D,
attached hereto and made a part hereof, upon final subdivision thereof,
(ii) for an easement and restriction agreement, substantially similar to
that described in paragraph (a) above, to be entered into with respect to
such subdivided parcels and (iii) for such other matters as Purchaser may
reasonably require, such reconveyance agreement to be otherwise in form and
substance reasonably satisfactory to the Purchaser and the ShoLodge
Parties.
(c) The Purchaser and the Tenant shall have approved the form of
Exhibit D to the Lease, such approval not to be unreasonably withheld,
delayed or conditioned.
SECTION 5. CONDITIONS TO SHOLODGE PARTIES' OBLIGATION TO CLOSE.
The obligation of the ShoLodge Parties to convey the Properties on the
Closing Date to the Purchaser is subject to the satisfaction of the
following conditions precedent on and as of the Closing Date:
5.1 PURCHASE PRICE. The Purchaser shall deliver to the ShoLodge
Parties the Purchase Price payable hereunder, adjusted as herein provided,
less the amount of the Retained Funds.
5.2 CLOSING DOCUMENTS. The Purchaser shall have delivered to the
Sellers:
(a) Duly executed and acknowledged counterparts of the documents
described in SECTION 4.1, where applicable; and
(b) Certified copies of all charter documents, applicable resolutions
and certificates of incumbency with respect to the Purchaser.
5.3 OPINION OF COUNSEL. The ShoLodge Parties shall have received a
written opinion from ▇▇▇▇▇▇▇▇ & Worcester LLP, counsel to the Purchaser, in
form and substance reasonably satisfactory to the ShoLodge Parties,
regarding the organization and authority of the Purchaser and such other
matters with respect to the transactions contemplated by this Agreement as
the ShoLodge Parties may reasonably require.
5.4 CERTAIN DOCUMENTS AND EXHIBITS. The Purchaser and the ShoLodge
Parties shall have entered into the agreements and approved the exhibit
described in SECTION 4.7.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF SHOLODGE PARTIES.
To induce the Purchaser to enter into this Agreement, the ShoLodge
Parties represent and warrant to the Purchaser as follows:
6.1 STATUS AND AUTHORITY OF THE SHOLODGE PARTIES. Each of the
ShoLodge Parties is a corporation duly organized, validly existing and in
corporate good standing under the laws of its state of incorporation, and
has all requisite power and authority under the laws of such state and its
respective charter documents to enter into and perform its obligations
under this Agreement and to consummate the transactions contemplated
hereby. Each of the ShoLodge Parties has duly qualified to transact
business in each jurisdiction in which the nature of the business conducted
by it requires such qualification, except where failure to do so could not
reasonably be expected to have a material adverse effect.
6.2 ACTION OF THE SHOLODGE PARTIES. Each of the ShoLodge Parties has
taken all necessary action to authorize the execution, delivery and
performance of this Agreement, and upon the execution and delivery of any
document to be delivered by any of the ShoLodge Parties on or prior to the
Closing Date, such document shall constitute the valid and binding
obligation and agreement of such ShoLodge Party, enforceable against such
ShoLodge Party in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws of general application affecting the rights and remedies of creditors.
6.3 NO VIOLATIONS OF AGREEMENTS. Neither the execution, delivery or
performance of this Agreement by any of the ShoLodge Parties, nor
compliance with the terms and provisions hereof, will result in any breach
of the terms, conditions or provisions of, or conflict with or constitute a
default under, or result in the creation of any lien, charge or encumbrance
upon any Property pursuant to the terms of any indenture, mortgage, deed of
trust, note, evidence of indebtedness or any other agreement or instrument
by which any of the ShoLodge Parties is bound.
6.4 LITIGATION. None of the ShoLodge Parties has received written
notice of and, to each of the ShoLodge Party's knowledge, no action or
proceeding is pending or threatened and no investigation looking toward
such an action or proceeding has begun, which (a) questions the validity of
this Agreement or any action taken or to be taken pursuant hereto, (b) will
result in any material adverse change in the business, operation, affairs
or condition of any of the Properties, (c) will result in or subject the
Properties to a material liability, or (d) involves condemnation or eminent
domain proceedings against any material part of the Properties.
6.4 EXISTING LEASES, AGREEMENTS, ETC. Other than the Ground Lease
and any other agreements provided to the Purchaser not less than ten (10)
days prior to the expiration of the Review Period, there are no other
material agreements affecting the Properties which will be binding on the
Purchaser subsequent to the Closing Date which the Purchaser cannot
terminate on thirty (30) days notice without payment of premium or penalty.
6.6 DISCLOSURE. To each of the ShoLodge Party's knowledge, there is
no fact or condition which materially and adversely affects the business or
condition of the Properties which has not been set forth in this Agreement
or in the other documents, certificates or statements furnished to the
Purchaser in connection with the transactions contemplated hereby.
6.7 UTILITIES, ETC. To each of the ShoLodge Party's knowledge, all
utilities and services necessary for the use and operation of the
Properties (including, without limitation, road access, gas, water,
electricity and telephone) are available thereto and are of sufficient
capacity to meet adequately all needs and requirements necessary for the
current use and operation of the Properties. To each of the ShoLodge
Party's knowledge, no fact, condition or proceeding exists which would
result in the termination or material impairment of the furnishing of such
utilities to the Properties.
6.8 COMPLIANCE WITH LAW. To each of the ShoLodge Party's knowledge,
except as disclosed to the Purchaser in writing not less than ten (10)
days' prior to the expiration of the Review Period, including in any
engineering report, (i) the Properties and the current use and operation
thereof do not violate any material federal, state, municipal and other
governmental statutes, ordinances, by-laws, rules, regulations or any other
legal requirements, including, without limitation, those relating to
construction, occupancy, zoning, adequacy of parking, environmental
protection, occupational health and safety and fire safety applicable
thereto; and (ii) there are presently in effect all material licenses,
permits and other authorizations necessary for the current use, occupancy
and operation thereof. Except as disclosed to the Purchaser in writing not
less than ten (10) days' prior to the expiration of the Review Period, none
of the ShoLodge Parties has received written notice of any threatened
request, application, proceeding, plan, study or effort which would
materially adversely affect the present use or zoning of any of the
Properties or which would modify or realign any adjacent street or highway
in a material and adverse way.
6.9 TAXES. To each of the ShoLodge Party's knowledge, other than the
amounts disclosed by tax bills, no taxes or special assessments of any kind
(special, bond or otherwise) are or have been levied with respect to any of
the Properties, or any portion thereof, which are outstanding or unpaid,
other than amounts not yet due and payable or, if due and payable, not yet
delinquent.
6.10 NOT A FOREIGN PERSON. None of the ShoLodge Parties is a "foreign
person" within the meaning of Section 1445 of the United States Internal
Revenue Code of 1986, as amended, and the treasury regulations promulgated
thereunder.
6.11 HAZARDOUS SUBSTANCES. Except as disclosed to the Purchaser or as
described in any environmental report delivered to the Purchaser prior to
the expiration of the Review Period, to each of the ShoLodge Party's
knowledge, none of the ShoLodge Parties nor any tenant or other occupant or
user of any of the Properties, or any portion thereof, has stored or
disposed of (or engaged in the business of storing or disposing of) or has
released or caused the release of any hazardous waste, contaminants, oil,
radioactive or other material on any of the Properties, or any portion
thereof, the removal of which is required or the maintenance of which is
prohibited or penalized by any applicable Federal, state or local statutes,
laws, ordinances, rules or regulations, and, to each of the ShoLodge
Party's knowledge, except as disclosed to the Purchaser or as described in
any environmental report delivered to the Purchaser prior to the expiration
of the Review Period, the Properties are free from any such hazardous
waste, contaminants, oil, radioactive and other materials, except any such
materials maintained in accordance with applicable law.
6.12 INSURANCE. None of the ShoLodge Parties has received written
notice from any insurance carrier of defects or inadequacies in the
Properties which, if uncorrected, would result in a termination of
insurance coverage or a material increase in the premiums charged therefor.
6.13 GROUND LEASE. The copy of the Ground Lease heretofore delivered
by the ShoLodge Parties to the Purchaser is a true, correct and complete
copy thereof; the Ground Lease has not been amended except as evidenced by
amendments similarly delivered and constitutes the entire agreement between
the parties thereto. To each of the ShoLodge Party's knowledge, the Ground
Lease is in full force and effect and no default or event which with the
giving of notice and/or lapse of time could constitute a default thereunder
has occurred with respect to any party thereto.
6.14 OWNERSHIP OF SELLERS. ShoLodge is the sole owner, directly or
indirectly, of all of the issued and outstanding beneficial interests in
the Sellers and the transactions contemplated by this Agreement are of
direct material benefit to ShoLodge.
6.15 ADJACENT LAND. No ShoLodge Party or any of its affiliates owns
any property adjacent to the Properties which is not being conveyed to the
Purchaser pursuant to this Agreement other than the Adjacent Land.
The representations and warranties made in this Agreement by the
ShoLodge Parties shall be continuing and shall be deemed remade by the
ShoLodge Parties as of the Closing Date with the same force and effect as
if made on, and as of, such date; PROVIDED, HOWEVER, that, the ShoLodge
Parties shall have the right, from time to time prior to the Closing Date,
to modify the representations and warranties as a result of changes in
condition of the Properties by notice to the Purchaser and, in such event,
the Purchaser shall have the rights provided in SECTION 2.3. The ShoLodge
Parties' liability with respect to all representations and warranties made
in this Agreement by the ShoLodge Parties with respect to the Properties
shall survive the Closing for a period of one (1) year, after which the
ShoLodge Parties shall have no liability with respect thereto other than as
to any matters for which claims have been asserted prior to the expiration
of such one (1) year period.
Except as otherwise expressly provided in this Agreement or any
documents to be delivered to the Purchaser at the Closing, the ShoLodge
Parties disclaim the making of any representations or warranties, express
or implied, regarding the Properties or matters affecting the Properties,
whether made by the ShoLodge Parties, on the ShoLodge Parties' behalf or
otherwise, including, without limitation, the physical condition of the
Properties, title to or the boundaries of the Real Property, pest control
matters, soil conditions, the presence, existence or absence of hazardous
wastes, toxic substances or other environmental matters, compliance with
building, health, safety, land use and zoning laws, regulations and orders,
structural and other engineering characteristics, traffic patterns, market
data, economic conditions or projections, and any other information
pertaining to the Properties or the market and physical environments in
which they are located. The Purchaser acknowledges (i) that the Purchaser
has entered into this Agreement with the intention of making and relying
upon its own investigation or that of third parties with respect to the
physical, environmental, economic and legal condition of each Property and
(ii) that the Purchaser is not relying upon any statements, representations
or warranties of any kind, other than those specifically set forth in this
Agreement or in any document to be delivered to the Purchaser at the
Closing made by the ShoLodge Parties. The Purchaser further acknowledges
that it has not received from or on behalf of the ShoLodge Parties any
accounting, tax, legal, architectural, engineering, property management or
other advice with respect to this transaction and is relying solely upon
the advice of third party accounting, tax, legal, architectural,
engineering, property management and other advisors. Subject to the
provisions of this Agreement, the Purchaser shall purchase the Properties
in their "as is" condition on the Closing Date.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
To induce the ShoLodge Parties to enter in this Agreement, the
Purchaser represents and warrants to the ShoLodge Parties as follows:
7.1 STATUS AND AUTHORITY OF THE PURCHASER. The Purchaser is a
Maryland real estate investment trust duly organized, validly existing and
in trust good standing under the laws of the State of Maryland, and has all
requisite power and authority under the laws of such state and under its
charter documents to enter into and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. The
Purchaser has duly qualified and is in good standing as a trust or
unincorporated business association in each jurisdiction in which the
nature of the business conducted by it requires such qualification, except
where the failure to do so could not reasonably be expected to have a
material adverse effect.
7.2 ACTION OF THE PURCHASER. The Purchaser has taken all necessary
action to authorize the execution, delivery and performance of this
Agreement, and upon the execution and delivery of any document to be
delivered by the Purchaser on or prior to the Closing Date such document
shall constitute the valid and binding obligation and agreement of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting
the rights and remedies of creditors.
7.3 NO VIOLATIONS OF AGREEMENTS. Neither the execution, delivery or
performance of this Agreement by the Purchaser, nor compliance with the
terms and provisions hereof, will result in any breach of the terms,
conditions or provisions of, or conflict with or constitute a default
under, or result in the creation of any lien, charge or encumbrance upon
any property or assets of the Purchaser pursuant to the terms of any
indenture, mortgage, deed of trust, note, evidence of indebtedness or any
other agreement or instrument by which the Purchaser is bound.
7.4 LITIGATION. No investigation, action or proceeding is pending
and, to the Purchaser's knowledge, no action or proceeding is threatened
and no investigation looking toward such an action or proceeding has begun,
which questions the validity of this Agreement or any action taken or to be
taken pursuant hereto.
The representations and warranties made in this Agreement by the
Purchaser shall be continuing and shall be deemed remade by the Purchaser
as of the Closing Date with the same force and effect as if made on, and as
of, such date. The Purchaser's liability with respect to all
representations and warranties made in this Agreement by the Purchaser
shall survive the Closing for a period of one (1) year, after which the
Purchaser shall have no liability with respect thereto other than as to any
matters for which claims have been asserted prior to the expiration of such
one (1) year period.
SECTION 8. COVENANTS OF THE SHOLODGE PARTIES.
The ShoLodge Parties hereby covenant with the Purchaser between the
date of this Agreement and the Closing Date as follows:
8.1 COMPLIANCE WITH LAWS, ETC. To comply or to cause compliance with
in all material respects with (i) all applicable laws, regulations and
other requirements from time to time of every governmental body having
jurisdiction of the Properties or the use or occupancy of the Improvements
located on the Real Property and (ii) all terms, covenants and conditions
of the Ground Lease and all instruments of record and other agreements
affecting Properties.
8.2 APPROVAL OF AGREEMENTS. Except as otherwise authorized by this
Agreement or in the ordinary course of business, not to enter into, modify,
amend or terminate the Ground Lease or any other agreement with respect to
the Properties which would encumber or be binding upon such Properties from
and after the Closing Date without in each instance obtaining the prior
written consent of the Purchaser, which consent shall not be unreasonably
withheld, delayed or conditioned.
8.3 ESTOPPEL CERTIFICATES. To request, and use reasonable efforts to
obtain, from the landlord under the Ground Lease, certifications, in form
and substance reasonably satisfactory to the Purchaser, regarding the
status of the Ground Lease.
8.4 NOTICE OF MATERIAL CHANGES OR UNTRUE REPRESENTATIONS. Upon
learning of any material change in any condition with respect to any of the
Properties or of any event or circumstance which makes any representation
or warranty of the ShoLodge Parties to the Purchaser under this Agreement
untrue or misleading in any material respect, promptly to notify the
Purchaser thereof (the Purchaser agreeing, on learning of any such fact or
condition, promptly to notify the ShoLodge Parties thereof).
8.5 OPERATION OF PROPERTIES. To continue to operate each of the
Properties as a ▇▇▇▇▇▇ Suite hotel, in a good and businesslike fashion
consistent with their past practices and to cause each of the Properties to
be maintained in good working order and condition in a manner consistent
with their past practice.
8.6 FINANCIAL INFORMATION. To provide to the Purchaser, promptly
upon request at the ShoLodge Parties' sole cost and expense, such audited
and unaudited financial and other information and certifications of the
ShoLodge Parties with respect to the ShoLodge Parties and the Properties as
the Purchaser may from time to time reasonably request in order to comply
with any applicable securities laws and/or any rules, regulations or
requirements of the Securities and Exchange Commission and, if required or
requested, to permit the Purchaser to incorporate by reference any
information included in filings made by ShoLodge with the Securities and
Exchange Commission.
SECTION 9. APPORTIONMENTS.
9.1 REAL PROPERTY APPORTIONMENTS. Representatives of the Purchaser
and the ShoLodge Parties shall perform any and all of the adjustments and
apportionments which are appropriate and usual for a transaction of this
nature and taking into account the simultaneous execution of the Lease.
The adjustments hereunder shall be calculated or paid in an amount based
upon a fair and reasonable estimated accounting performed and agreed to by
representatives of the ShoLodge Parties and the Purchaser at or prior to
the Closing. Subsequent final adjustments and payments shall be made in
cash or other immediately available funds as soon as practicable after the
Closing Date and in any event within ninety (90) days after such Closing
Date, based upon an agreed accounting performed by representatives of the
ShoLodge Parties and the Purchaser. In the event the parties have not
agreed with respect to the adjustments required to be made pursuant to this
SECTION 9.1 within such ninety-day period, upon application by either
party, Deloitte & Touche LLP or other certified public accountants
reasonably acceptable to the Purchaser and the ShoLodge Parties shall
determine any such adjustments which have not theretofore been agreed to
between the ShoLodge Parties and the Purchaser. The charges of such
accountant shall be borne by the ShoLodge Parties.
9.2 CLOSING COSTS. The ShoLodge Parties shall pay all costs and
expenses associated with the transactions contemplated hereby, including,
without limitation, recording costs, title insurance premiums, the costs
and expenses of preparing engineering and environmental reports, market
studies and appraisals and the reasonable costs and expenses of legal
counsel retained by the Purchaser.
The obligations of the parties under this SECTION 9 shall survive the
Closing.
SECTION 10. DEFAULT.
10.1 DEFAULT BY THE SHOLODGE PARTIES. If the ShoLodge Parties shall
have made any representation or warranty herein which shall be untrue or
misleading in any material respect, or if the ShoLodge Parties shall fail
to perform any of the material covenants and agreements contained herein to
be performed by the ShoLodge Parties and such failure continues for a
period of ten (10) days after notice thereof from the Purchaser or if the
Tenant shall default in its obligations under the Agreement to Lease and
such default shall continue beyond the expiration of any applicable cure
period, the Purchaser may terminate this Agreement and/or the Purchaser may
pursue any and all remedies available to it at law or in equity, including,
but not limited to, a suit for specific performance or other equitable
relief.
10.2 DEFAULT BY THE PURCHASER. If the Purchaser shall have made any
representation or warranty herein which shall be untrue or misleading in
any material respect, or if the Purchaser shall fail to perform any of the
covenants and agreements contained herein to be performed by it and such
failure shall continue for a period of ten (10) days after notice thereof
from the ShoLodge Parties or if HPT shall default in its obligations under
the Agreement to Lease and such default shall continue beyond the
expiration of any applicable cure period, the ShoLodge Parties may, as its
sole and exclusive remedy at law and in equity, terminate this Agreement.
In the event that the ShoLodge Parties shall so terminate this Agreement,
the Purchaser shall thereupon pay to the ShoLodge Parties, as liquidated
damages and not as a penalty, the sum of One Million Dollars ($1,000,000),
whereupon, the Purchaser shall have no further monetary or, except as
expressly provided herein, nonmonetary obligations hereunder.
SECTION 11. MISCELLANEOUS.
11.1 AGREEMENT TO INDEMNIFY. (a)Subject to any express provisions of
this Agreement to the contrary, (i) the ShoLodge Parties shall indemnify
and hold harmless the Purchaser from and against any and all obligations,
claims, losses, damages, liabilities, and expenses (including, without
limitation, reasonable attorneys' and accountants' fees and disbursements)
arising out of (x) events, contractual obligations, acts or omissions of
the ShoLodge Parties that occurred in connection with the ownership or
operation of any Property prior to the Closing or (y) any damage to
property of others or injury to or death of any person or any claims for
any debts or obligations occurring on or about or in connection with any
Property or any portion thereof at any time or times prior to the Closing,
and (ii) the Purchaser shall indemnify and hold harmless the ShoLodge
Parties from and against any and all obligations, claims, losses, damages,
liabilities and expenses (including, without limitation, reasonable
attorneys' and accountants' fees and disbursements) arising out of (x)
events, contractual obligations, acts or omissions of Purchaser that occur
in connection with the ownership or operation of any Property on or after
the Closing, or (y) any damage to property of others or injury to or death
of any person or any claims for any debts or obligations occurring on or
about any Property or any portion thereof at any time or times after the
Closing.
(b) Whenever it is provided in this Agreement that an obligation of
the ShoLodge Parties will be assumed by the Purchaser on or after the
Closing, the Purchaser shall be deemed to have also agreed to indemnify and
hold harmless the ShoLodge Parties and their respective successors and
assigns from and against all claims, losses, damages, liabilities, costs,
and expenses (including, without limitation, reasonable attorneys' and
accountants' fees and expenses) arising from any failure of the Purchaser
to perform the obligation so assumed on or after the Closing.
(c) Whenever either party shall learn through the filing of a claim
or the commencement of a proceeding or otherwise of the existence of any
liability for which the other party is or may be responsible under this
Agreement, the party learning of such liability shall notify the other
party promptly and furnish such copies of documents (and make originals
thereof available) and such other information as such party may have that
may be used or useful in the defense of such claims and shall afford said
other party full opportunity to defend the same in the name of such party
and shall generally cooperate with said other party in the defense of any
such claim.
(d) The provisions of this SECTION 11.1 shall survive the Closing and
the termination of this Agreement.
11.2 BROKERAGE COMMISSIONS. Each of the parties hereto represents to
the other parties that, except ▇▇▇▇▇▇▇▇▇▇ Securities, it dealt with no
broker, finder or like agent in connection with this Agreement or the
transactions contemplated hereby. The ShoLodge Parties shall be solely
responsible for and shall indemnify and hold harmless the Purchaser and its
respective legal representatives, heirs, successors and assigns from and
against any loss, liability or expense, including, reasonable attorneys'
fees, arising out of any claim or claims for commissions or other
compensation for bringing about this Agreement or the transactions
contemplated hereby made by ▇▇▇▇▇▇▇▇▇▇ Securities or any other broker,
finder or like agent other than such loss, liability or expense arising
from the Purchaser's breach of its representation made in this SECTION
11.2. The provisions of this SECTION 11.2 shall survive the Closing and
any termination of this Agreement.
11.3 PUBLICITY. The parties agree that no party shall, with respect
to this Agreement and the transactions contemplated hereby, contact or
conduct negotiations with public officials, make any public pronouncements,
issue press releases or otherwise furnish information regarding this
Agreement or the transactions contemplated to any third party without the
consent of the other parties, which consent shall not be unreasonably
withheld, delayed or conditioned, except as required by law or unless such
action is taken based on advice of counsel given in good faith. No party,
or its employees shall trade in the securities of any parent or affiliate
of the Sellers or of the Purchaser until a public announcement of the
transactions contemplated by this Agreement has been made. No party shall
record this Agreement or any notice thereof, except as required by law or
unless such action is taken based on advice of counsel given in good faith.
11.4 NOTICES. (a) Any and all notices, demands, consents, approvals,
offers, elections and other communications required or permitted under this
Agreement shall be deemed adequately given if in writing and the same shall
be delivered either in hand, by telecopier with written acknowledgment of
receipt, or by mail or Federal Express or similar expedited commercial
carrier, addressed to the recipient of the notice, postpaid and registered
or certified with return receipt requested (if by mail), or with all
freight charges prepaid (if by Federal Express or similar carrier).
(b) All notices required or permitted to be sent hereunder shall be
deemed to have been given for all purposes of this Agreement upon the date
of acknowledged receipt, in the case of a notice by telecopier, and, in all
other cases, upon the date of receipt or refusal, except that whenever
under this Agreement a notice is either received on a day which is not a
Business Day or is required to be delivered on or before a specific day
which is not a Business Day, the day of receipt or required delivery shall
automatically be extended to the next Business Day.
(c) All such notices shall be addressed,
if to the ShoLodge Parties to:
ShoLodge, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
with a copy to:
Boult ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇, PLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
If to the Purchaser, to:
Hospitality Properties Trust
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
with a copy to:
▇▇▇▇▇▇▇▇ & Worcester LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
(d) By notice given as herein provided, the parties hereto and their
respective successors and assigns shall have the right from time to time
and at any time during the term of this Agreement to change their
respective addresses effective upon receipt by the other parties of such
notice and each shall have the right to specify as its address any other
address within the United States of America.
11.5 WAIVERS, ETC. Any waiver of any term or condition of this
Agreement, or of the breach of any covenant, representation or warranty
contained herein, in any one instance, shall not operate as or be deemed to
be or construed as a further or continuing waiver of any other breach of
such term, condition, covenant, representation or warranty or any other
term, condition, covenant, representation or warranty, nor shall any
failure at any time or times to enforce or require performance of any
provision hereof operate as a waiver of or affect in any manner such
party's right at a later time to enforce or require performance of such
provision or any other provision hereof. This Agreement may not be
amended, nor shall any waiver, change, modification, consent or discharge
be effected, except by an instrument in writing executed by or on behalf of
the party against whom enforcement of any amendment, waiver, change,
modification, consent or discharge is sought.
11.6 ASSIGNMENT; SUCCESSORS AND ASSIGNS. This Agreement and all
rights and obligations hereunder shall not be assignable by any party
without the written consent of the other parties, except that (x) Purchaser
may assign this Agreement to any entity wholly owned, directly or
indirectly, by the Purchaser (PROVIDED, HOWEVER, that, in the event this
Agreement shall be assigned to any entity wholly owned, directly or
indirectly, by the Purchaser, Hospitality Properties Trust shall remain
liable for the obligation of the "Purchaser" hereunder) and (y) after the
Closing, the Sellers may assign its surviving rights, if any, under this
Agreement to the Tenant. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective legal
representatives, successors and permitted assigns. This Agreement is not
intended and shall not be construed to create any rights in or to be
enforceable in any part by any other persons.
11.7 SEVERABILITY. If any provision of this Agreement shall be held
or deemed to be, or shall in fact be, invalid, inoperative or unenforceable
as applied to any particular case in any jurisdiction or jurisdictions, or
in all jurisdictions or in all cases, because of the conflict of any
provision with any constitution or statute or rule of public policy or for
any other reason, such circumstance shall not have the effect of rendering
the provision or provisions in question invalid, inoperative or
unenforceable in any other jurisdiction or in any other case or
circumstance or of rendering any other provision or provisions herein
contained invalid, inoperative or unenforceable to the extent that such
other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had never been contained herein and
such provision reformed so that it would be valid, operative and
enforceable to the maximum extent permitted in such jurisdiction or in such
case.
11.8 COUNTERPARTS, ETC. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and shall supersede and take the place of any other
instruments purporting to be an agreement of the parties hereto relating to
the subject matter hereof.
11.9 GOVERNING LAW. This Agreement shall be interpreted, construed,
applied and enforced in accordance with the laws of The Commonwealth of
Massachusetts applicable to contracts between residents of Massachusetts
which are to be performed entirely within Massachusetts, regardless of (i)
where this Agreement is executed or delivered; or (ii) where any payment or
other performance required by this Agreement is made or required to be
made; or (iii) where any breach of any provision of this Agreement occurs,
or any cause of action otherwise accrues; or (iv) where any action or other
proceeding is instituted or pending; or (v) the nationality, citizenship,
domicile, principal place of business, or jurisdiction of organization or
domestication of any party; or (vi) whether the laws of the forum
jurisdiction otherwise would apply the laws of a jurisdiction other than
The Commonwealth of Massachusetts; or (vii) any combination of the
foregoing.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions
of this Agreement may be brought and prosecuted in such court or courts
located in The Commonwealth of Massachusetts as is provided by law; and the
parties consent to the jurisdiction of said court or courts located in The
Commonwealth of Massachusetts and to service of process by registered mail,
return receipt requested, or by any other manner provided by law.
11.10 PERFORMANCE ON BUSINESS DAYS. In the event the date on which
performance or payment of any obligation of a party required hereunder is
other than a Business Day, the time for payment or performance shall
automatically be extended to the first Business Day following such date.
11.11 ATTORNEYS' FEES. If any lawsuit or arbitration or other legal
proceeding arises in connection with the interpretation or enforcement of
this Agreement, the prevailing party therein shall be entitled to receive
from the other party the prevailing party's costs and expenses, including
reasonable attorneys' fees incurred in connection therewith, in preparation
therefor and on appeal therefrom, which amounts shall be included in any
judgment therein.
11.12 SECTION AND OTHER HEADINGS. The headings contained in this
Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.
11.13 NONLIABILITY OF TRUSTEES. THE DECLARATION OF TRUST ESTABLISHING
THE PURCHASER, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
"DECLARATION"), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND
TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT THE NAME "HOSPITALITY
PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY
AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE,
OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF THE PURCHASER SHALL BE HELD TO
ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR
CLAIM AGAINST, THE PURCHASER. ALL PERSONS DEALING WITH THE PURCHASER, IN
ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF THE PURCHASER FOR THE PAYMENT OF
ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as a sealed instrument as of the date first above written.
SHOLODGE PARTIES:
SHOLODGE, INC.
By:▇▇▇▇ ▇▇▇▇▇
Its President
SUNSHINE INNS, INC.
By:▇▇▇▇ ▇▇▇▇▇
Its President
SOUTHEAST TEXAS INNS, INC.
By:▇▇▇▇ ▇▇▇▇▇
Its President
MIDWEST INNS, INC.
By:▇▇▇▇ ▇▇▇▇▇
Its President
FAR WEST INNS, INC.
By:▇▇▇▇ ▇▇▇▇▇
Its President
SHONEY'S INN, INC.
By:▇▇▇▇ ▇▇▇▇▇
Its President
MOBAT, INC.
By:▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its (Vice) President
THE HOTEL GROUP, INC.
By:▇▇▇▇ ▇▇▇▇▇
Its President
PURCHASER:
HOSPITALITY PROPERTIES TRUST
By:▇▇▇▇ ▇. ▇▇▇▇▇▇
Its:PRESIDENT
SCHEDULE A
THE PROPERTIES
LOCATIONALLOCABLE PURCHASE PRICE
Tampa, FL $ 4,311,803
San Antonio, Riverwalk, TX 14,131,789
Fort ▇▇▇▇▇, IN 9,692,801
Albuquerque, NM 11,518,052
El Paso, TX 9,148,840
Hendersonville, TN 7,511,675
Cumberland, GA 9,598,544
Gwinett, GA 11,330,331
Columbus, OH 13,415,320
Atlanta Airport, GA 10,316,742
Dallas, Galleria, TX 11,189,621
Austin, TX 9,231,065
Tempe, AZ 10,067,959
Tucson, AZ 8,535,458
$140,000,000
SCHEDULE B-1 THROUGH B-14
LEGAL DESCRIPTIONS OF PROPERTIES
[See attached copies.]
SCHEDULE C
FORM OF SURVEYOR'S CERTIFICATE
SURVEYOR'S CERTIFICATE
TO: Hospitality Properties Trust
and its assignees or nominees
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: Survey Entitled "_______________________________________"
DATED _________ ___, 1997, PREPARED BY
The undersigned hereby certifies that the above-referenced survey was
prepared from an actual on-the-ground instrument survey of the subject
premises; that the same accurately shows the location of the boundaries of
the subject premises and the location of all streets, highways, alleys and
public ways crossing or abutting said premises; that the dimensions of the
improvements and the locations thereof with respect to the boundaries are
accurately shown as the same were situated on ___________ ___, 1996; that
there are no encroachments by improvements appurtenant to adjoining premises
upon the subject premises, nor from the subject premises, unless shown
thereon; that all buildings and structures, if any, lie wholly within all
applicable building restriction lines, if any, and do not violate any
restriction or other recorded agreements set forth in the title insurance
commitment for the subject premises dated __________ __, 1997, issued to you
by _________ Title Insurance Company, Commitment No. _______ (the "TITLE
POLICY"); that all easements and rights of way which are appurtenant to or
burden the subject premises and (i) are referred to in the Title Commitment
or (ii) are apparent from a visual inspection are delineated thereon, and
are located other than through the existing building shown hereon; that all
parking spaces, if any, are delineated thereon; and that, except as
otherwise shown thereon, the subject premises are not located (x) within any
flood hazard or flood way area or district as designed by Federal, state or
municipal authority or (y) within any area subject to regulation by Federal,
state or municipal authority as inland or coastal wetlands, beach, estuary
or the like.
Access to and egress from the subject premises and the improvements
and structures thereon to ________ Street, a public way, are provided by the
means indicated thereon. Municipal water, storm sewer facilities and
telephone, gas and electric services of public utilities are available in
the locations indicated thereon.
The undersigned hereby certifies that the square footage of each
parcel delineated on the above-referenced survey is as set forth thereon,
that all such parcels are contiguous without any strips, gaps or gores
existing between any of said parcels, and that said parcels, when combined,
form and create one complete and uninterrupted parcel without any strips,
gaps or gores.
This survey is made in accordance with the "Minimum Standard Detail
Requirements for Land Title Surveys" jointly established and adopted by ALTA
and ACSM in 1986.
Dated: _________ ___, 1997 ___________________________
Registered Land Surveyor
__________#_______________
[Surveyor's Seal]
SCHEDULE D
Materials Regarding Tempe
AND ALBUQUERQUE LOTS
[See attached copies.]