Exhibit 10.2
PROPERTY ACQUISITION/DISPOSITION
AGREEMENT
THIS AGREEMENT is made and entered into as of the ___ day of _______,
1999, by and between Apple Suites, Inc., a Virginia corporation (hereinafter
referred to as "Owner"), and Apple Suites Realty Group, Inc., a Virginia
corporation (hereinafter referred to as "Agent").
W I T N E S S E T H :
WHEREAS, Owner plans to conduct business as a "real estate investment
trust," and, in connection therewith, plans to, from time to time, acquire and
dispose of real property, including particularly corporate apartments and
extended-stay hotel properties (hereinafter referred to individually as a
"Property" and collectively as the "Properties");
WHEREAS, Owner desires to use the services of Agent as a broker in
connection with the acquisition and disposition of the Properties on the terms
set forth in this Agreement; and
WHEREAS, Owner and Agent desire to enter into this Agreement for the
purposes herein contained.
NOW, THEREFORE, in consideration of the promises herein contained, and for
other valuable consideration, receipt of which is hereby acknowledged, the
parties agree as follows:
1. Engagement of Agent as Broker for the Properties. Owner hereby engages
Agent as a broker in connection with the purchase and sale of the Properties,
upon the conditions and for the term and compensation herein set forth. All or
any portion of the services being performed by Agent may be contracted or
subcontracted by Agent to another company, provided that such company agrees to
be bound by the terms of this Agreement.
2. Term of Agreement; Renewal. This Agreement shall be valid for an initial
term of five (5) years. Unless either party by written notice sent to the other
party at least sixty (60) days before the end of any 5-year term hereof elects
not to renew this Agreement, this Agreement shall renew automatically for
successive terms of five (5) years on the same terms as contained herein.
3. Acceptance of Engagement. Agent hereby accepts its engagement as a
broker for the purchase and sale of the Properties and agrees to perform all
services necessary to
effectuate such purchases and sales which are customarily provided by commercial
real estate brokers, and, without limitation, Agent agrees:
a. To supervise, on behalf of Owner, the preparation of contracts of
purchase or sale for each Property, on such terms as are specified by Owner or
its duly authorized representatives, and all other documents related thereto or
required to effectuate such purchase or sale;
b. To coordinate the activities of, and act as liaison between Owner
and, independent professionals connected with the purchase or sale of a
Property, including attorneys, appraisers, engineers, inspectors, lenders, if
any, and others;
c. To assist Owner and its authorized representatives in satisfying
any conditions precedent to the purchase or sale of a Property, which shall
include contracting on behalf of Owner with any third parties whose services are
required to close any such purchase or sale;
d. To represent Owner at the closing of the purchase or sale of a
Property, to coordinate the activities of professionals and other third persons
connected with such closing, and to supervise the compliance by Owner with all
requirements and customary actions associated with such purchase or sale,
including, without limitation, the obtaining of property title insurance, the
delivery and recordation of deeds and other instruments of conveyance, and the
delivery and recordation, as required, of any documents evidencing loans
obtained or made by Owner;
e. Generally to act on behalf of Owner in connection with such
purchase or sale as a commercial real estate broker would customarily act with
respect to such transaction, including the provision of such additional services
as would normally be provided by such a person.
4. Indemnification. Owner hereby agrees to indemnify and hold harmless
Agent against and in respect of any loss, cost or expense (including reasonable
investigative expenses and attorneys' fees), judgment, award, amount paid in
settlement, fine, penalty and liability of any and every kind incurred by or
asserted against Agent by reason of or in connection with the engagement of
Agent hereunder, the performance by Agent of the services described herein or
the occurrence or existence of any event or circumstance which results or is
alleged to have resulted in death or injury to any person or destruction of or
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damage to any property and any suit, action or proceeding (whether threatened,
initiated or completed) by reason of the foregoing; provided, however, that no
such indemnification of Agent shall be made, and Agent shall indemnify and hold
Owner harmless against, and to the extent of, any loss that a court of competent
jurisdiction shall, by final adjudication, determine to have resulted from
willful misconduct, gross negligence or fraud by or on the part of Agent.
5. Compensation of Agent. Owner shall pay to Agent a real estate commission
in connection with each purchase of a Property in an amount equal to two percent
(2%) of the gross purchase price of the Property (which does not include amounts
budgeted for repairs and improvements), in consideration of Agent (or any person
with whom Agent subcontracts or contracts hereunder) performing the services
provided for in this Agreement in connection with the purchase of the Property.
In consideration of Agent (or any person with whom Agent subcontracts or
contracts hereunder) performing the services provided for in this Agreement in
connection with the sale of a Property, Owner shall pay to Agent the following:
a real estate commission in connection with the sale of a Property in an amount
equal to two percent (2%) of the gross sales price of the Property, if, but only
if, the sales price of the Property exceeds the sum of (A) the Company's cost
for the Property (consisting of the original purchase price plus all capitalized
costs and expenditures connected with the Property), without any reduction for
depreciation, and (B) ten percent (10%) of such cost. If the sales price of the
Property does not equal such amount, Agent shall be entitled only to payment by
the Company of its "direct costs" incurred in marketing such property (where
"direct costs" refers to a reasonable allocation of all costs, including
salaries of personnel, overhead and utilities), allocable to services in
marketing such property. If the two percent (2%) real estate commission is
payable in connection with sale of a Property, Agent shall not also be paid the
reimbursement of its "direct costs" as described in the preceding sentence. If
the person from whom Owner purchases or to whom Owner sells a Property pays any
fee to Agent, such amount shall decrease the amount of Owner's obligation to
Agent. Furthermore, Agent shall not be entitled to any real estate commission in
connection with a sale of a Property by Owner to Cornerstone Realty Income
Trust, Inc. or any Affiliate of Agent (where "Affiliate" has the meaning
specified in the Prospectus of Owner), but Agent will, in such case, be entitled
to payment by Owner of its direct costs in such regard. The fees and expenses
provided for herein shall be payable if Owner sells a Property, sells shares in
Owner, effects a merger of Owner with another entity, or undertakes any other
transaction, the purpose or effect of which is, in essence, to dispose of some
or all Properties. In any case other than an actual sale of Properties, Owner
and Agent shall in good faith agree upon an allocation of purchase price to each
Property which is effectively disposed of.
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6. Power of Attorney. Owner hereby makes, constitutes and appoints Agent
its true and lawful attorney-in-fact, for it and in its name, place and stead
and for its use and benefit to sign, acknowledge and file all documents and
agreements (other than contracts for purchase or sale of a Property, promissory
notes, mortgages, deeds of trust or other documents or instruments which would
bind Owner to purchase or sell a Property, result or evidence the incurrence of
debt by Owner, or encumber a Property) necessary to perform or effect the duties
and obligations of Agent under the terms of this Agreement. The foregoing power
of attorney is a special power of attorney coupled with an interest. It shall
terminate when this Agreement terminates as provided herein.
7. Relationship of Parties. The parties agree and acknowledge that Agent is
and shall operate as an independent contractor in performing its duties under
this Agreement, and shall not be deemed an employee of Owner.
8. Entire Agreement. This Agreement represents the entire understanding
between the parties hereto with regard to the transactions described herein and
may only be amended by a written instrument signed by the party against whom
enforcement is sought.
9. Governing Law. This Agreement shall be construed in accordance with and
be governed by the laws of the Commonwealth of Virginia.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
OWNER:
APPLE SUITES, INC.,
a Virginia corporation
By:
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Title:
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AGENT:
APPLE SUITES REALTY GROUP, INC.,
a Virginia corporation
By:
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Title:
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