EXHIBIT 10.4
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
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SECTION 3. PURCHASE AND SALE.....................................................................................9
3.1 Closing.............................................................................................9
3.2 Purchase Price......................................................................................9
SECTION 4. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE.........................................................9
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 PURCHASER..........................................................17
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
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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 24th 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,
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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
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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
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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.
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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
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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
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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
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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.
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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
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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.
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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.
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(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.
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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.
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6.5 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.
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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
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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.
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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
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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
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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
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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.
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(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
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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. (▇▇▇) ▇▇▇-▇▇▇▇]
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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
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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
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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.
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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: /s/ ▇▇▇▇ ▇▇▇▇▇
Its President
SUNSHINE INNS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Its President
SOUTHEAST TEXAS INNS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Its President
MIDWEST INNS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Its President
FAR WEST INNS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Its President
SHONEY'S INN, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Its President
MOBAT, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its President
THE HOTEL GROUP, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Its President
PURCHASER:
HOSPITALITY PROPERTIES TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President