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EXHIBIT 10.50
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE ("Agreement"), dated as of the date
of this Agreement as defined hereinafter, between XXXX Limited Partnership, a
North Carolina limited partnership, or its assigns, with offices at 0000 Xxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx Xxxxxxxx 00000 ("Purchaser") and WHB Hotel
Corp., Ltd., a Florida limited partnership ("Seller").
NOW, THEREFORE, for $1.00 and other good and valuable consideration,
the receipt and sufficiency of which is hereby mutually acknowledged, and the
mutual covenants contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
I. PURCHASE AND SALE OF PROPERTY AND BUSINESS
On the terms and subject to all of the conditions set forth in this
Agreement, the Purchaser agrees to purchase and the Seller agrees to sell, for
the purchase price set forth herein, all of the following property
(collectively, the "Premises"):
(a) the real estate described on Schedule 1 attached hereto and made a
part hereof by this reference, together with all tenements, appurtenances,
easements, agreements, development rights, air rights, rights-of-way, strips,
gores, rights in adjacent avenues, streets and alleys, rights and uses
appurtenant thereto (collectively the "Real Property");
(b) all improvements now or hereafter located on the Real Property,
including but not limited to that certain 215 room Comfort Suites located at
0000 Xxxxxx Xxxx Xxxx, Xxxxxxx, Xxxxxxx and all fixtures which are affixed to
the Real Property or Improvements (the "Improvements");
(c) all furniture, fixtures (not part of the Real Property and
Improvements or affixed thereto, (equipment, machinery, furnishings, carpets,
drapes, blinds or mini-blinds, service and maintenance equipment, linens (not
less than two and one-half (2 1/2) turns of linens shall be included), tools,
signs, landscaping equipment, supplies, pool equipment, television systems,
intercom equipment and systems, and replacement parts (the "Equipment");
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(d) moneys advanced for future guest reservations ("Prepaid Items");
(e) all contracts, service contracts, agreements, licenses, contract
rights, rights to use and other similar rights in connection with the Real
Property and Improvements and set forth on Schedule 2 attached hereto and made a
part hereof by this reference and which the Purchaser elects to purchase and
assume as provided in Article III, Paragraph A hereof (the "Contracts");
(f) all leases, including leases of Equipment, and rights to use the
Improvements or all or any part thereof in third parties as more particularly
identified on Schedule 3 attached hereto and made a part hereof by this
reference and which the Purchaser elects to purchase and assume as provided in
Article III, Paragraph A hereof (the "Leases"). Notwithstanding anything in the
foregoing which may be construed to the contrary, with respect to any leases of
Equipment, Seller shall be responsible for all costs and expenses to pay off
same in order that all Equipment shall be conveyed in fee simple in accordance
with the requirements of Article II, Paragraph C;
(g) all permits, licenses, government licenses, certificates of
occupancy and approvals necessary to operate the Real Property, Improvements,
Equipment, Contracts, Leases, Intangible Rights and the other property and
rights transferred under this Agreement (the
"Permits");
(h) all inventory, supplies and other materials used in connection with
the Real Property and Improvements and the hotel business operated thereon
(excluding gift shop items owned by third parties and tiki bar items identified
in a written list provided to Purchaser within five (5) days after the date of
this Agreement; provided, however, there shall be conveyed herewith such tiki
bar items as are necessary for the continued full service operation of the tiki
bar in a manner consistent with the current operation thereof) (the
"Inventory");
(i) all plans, specifications and "as-built" drawings and surveys
relating to the Real Property and Improvements, all books and records relating
to the operation or management of the Real Property and Improvements and all
warranties and guaranties of
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Seller pertaining to the Premises; and
(j) all intangible property, guest ledgers, customer and mailing lists,
catalogues and brochures, telephone numbers and similar property used in
connection with the operation of the Real Property, Improvements and the
business known as the Comfort Suites located at 0000 Xxxxxx Xxxx Xxxx, Xxxxxxx,
Xxxxxxx (the "Hotel"), and any telephone numbers assigned thereto (the
"Intangible Rights").
II. TERMS OF PURCHASE AND SALE
The purchase price for the Premises shall be Eleven Million Five
Hundred Fifty Thousand and NO/100 Dollars ($11,550,000.00), adjusted as provided
in Article IX hereof, (the "Purchase Price"), payable by Purchaser to Seller as
follows:
A. The sum of One Hundred Thousand and NO/100 Dollars ($100,000.00)
(the "Deposit") within three (3) days after the date of this Agreement as
defined hereinafter by check subject to collection,payable to The Title Company
of North Carolina, Inc., as agent for First American Title Insurance Company as
escrow agent (the "Escrow Agent"). The Escrow Agent shall maintain the Deposit
in an interest bearing account subject to the provisions of Article XIII. The
Escrow Agent shall not disburse the Deposit except in accordance with the terms
of this Agreement. Upon the satisfaction of all of the conditions contained in
this Agreement, on the Closing Date (as hereinafter defined), the Deposit shall
be paid to Seller and reduce the portion of the Purchase Price payable at
Closing pursuant to Article II, Paragraph B hereof. In the event that this
transaction is not consummated for any reason, the Deposit shall be paid as
provided in Article XIII of this Agreement. Purchaser shall be entitled to
payment of or a credit for any interest earned on the Deposit unless the Deposit
is forfeited in which event interest shall be paid to Seller.
B. The balance of the Purchase Price, plus or minus any closing
adjustments, by certified or bank funds or by wire transfer on the Closing Date
(as hereinafter defined) to an account designated in writing by Seller to
Purchaser at least five (5) days prior to Closing. Seller shall have the right
and option to elect
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to accept all or a portion of such balance of the Purchase Price in the form of
limited partnership units in Purchaser ("Units"). The number of Units issued
shall be determined and based upon such balance of the Purchase Price or portion
thereof so elected by Seller divided by the average closing price of the stock
of Purchaser's general partner, Winston Hotels, Inc., a North Carolina
corporation, on the NASDAQ market for the ten (10) days of trading immediately
preceding the Closing Date.
C. Upon the Closing, the Seller shall deliver the Premises to the
Purchaser in fee simple, including but not limited to, the Real Property
Improvements, Equipment and Inventory, free and clear of all liens and
encumbrances of whatever type or description other than the Permitted Exceptions
as defined in Article IV, Paragraph A hereof.
D. Choice International has issued a Product Improvement Plan (the
"PIP") relative to the Hotel, a copy of which is attached hereto as Schedule 4
and incorporated herein by this reference. Purchaser accepts the PIP and
acknowledges that the completion of same subsequent to Closing (as hereinafter
defined) shall be Purchaser's responsibility. In connection with the application
for a Comfort Suites franchise, Purchaser shall pay all franchise fees to Choice
International and other associated costs to obtain such franchise as long as
such costs are acceptable to Purchaser in Purchaser's sole, absolute and
unreviewable discretion.
III. FEASIBILITY PERIOD; PURCHASER'S CONTINGENCIES
A. This Agreement is contingent upon Purchaser's approval of the
Premises, including but not limited to, approval of the Inspection Items (as
hereinafter defined). The Inspection Items if not submitted to Purchaser on or
prior to the date of this Agreement, shall be submitted to Purchaser within five
(5) days after the date of this Agreement, or as specifically provided herein,
are available to Purchaser for inspection at the Improvements. Purchaser shall
have until a period of forty-five (45) days from and after the date of this
Agreement as defined hereinafter to review the Inspection Items and to otherwise
inspect the Premises and its or their condition (such period is hereinafter
referred to as the "Feasibility Period"). On or prior to the expiration of the
Feasibility Period, the Purchaser shall notify the Seller whether or not the
Purchaser elects to purchase the Premises,
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which election shall be made in the sole, absolute and unreviewable discretion
of the Purchaser. In the event that the Purchaser elects to proceed with this
transaction, then on or prior to the expiration of the Feasibility Period, the
Purchaser shall notify the Seller, which of the Contracts and Leases the
Purchaser shall accept and assume and the Seller shall retain and not assign to
Purchaser those Contracts and Leases not acceptable to Purchaser. In the event
Purchaser fails to notify Seller, on or prior to the expiration of the
Feasibility Period, whether or not the Purchaser elects to proceed with the
purchase, all items shall be deemed approved. If Purchaser notifies Seller that
it elects not to proceed with this transaction on or prior to the expiration of
the Feasibility Period, then this Agreement shall terminate and shall be null,
void and without further force or effect, the Deposit (together with all
interest) shall be promptly refunded to Purchaser by Escrow Agent and neither
party shall have any further liability to the other. The conditions enumerated
in this Article III are for Purchaser's benefit only and the non-occurrence of a
state of facts sufficient to satisfy any of such conditions may not be used or
pleaded by Seller as a defense to the enforceability of this Agreement.
For purposes of this Agreement, the term "Inspection Items" shall mean:
(a) any existing engineer's reports, architectural plans,
appraisals, environmental reports, boundary surveys, as-built
surveys or other reviews, evaluations or studies of or with
respect to the Premises;
(b) the Leases, Contracts and Permits;
(c) the utility bills for the thirty six month (36) period
immediately preceding the date of this Agreement;
(d) tax returns and proof of payment of all taxes for the thirty
six (36) month period immediately preceding the date of this
Agreement (including, but not limited to, all ad valorem,
property, income, employment, sales or occupancy taxes
available for inspection at the Improvements, excluding,
however, Seller's partnership tax returns);
(e) guest registration records (to be available for inspection
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at the Improvements);
(f) employee records (to be available for inspection at the
Improvements);
(g) financial statements (the "Financial Statements") for the
Premises (including balance sheets, income statements,
operating statements and statements of changes in
financial position) for each of the two preceding fiscal
years and for the year to date period ending thirty (30)
days prior to the Closing Date defined hereinafter. An
itemized breakdown of room sales per month, occupancy and
ADR for the preceding thirty six (36) month period. The
books and records of the operations of the Premises
necessary to confirm the accuracy of the Financial
Statements shall be made available to Purchaser or its
agents at the Improvements;
(h) Star Reports covering the preceding thirty six (36) month
period (upon the execution of this Agreement, Seller shall
deliver to Purchaser the written documentation as required by
Xxxxx Xxxxx Travel, Inc. necessary for Purchaser to obtain
Star Reports for the Premises; and,
(i) copies of all condominium documents relative to the Real
Property and Improvements, including, but not limited to,
copies of the declaration of condominium and all amendments
thereto, all condominium plats of record, copies of the
articles of incorporation and by-laws of the condominium
association.
B. Purchaser's obligation to close this transaction shall be
conditioned on the Purchaser's receipt, on or before the Closing Date, of an
acceptable franchise license agreement for the Hotel from Choice International
with a term of not less than ten (10) years.
C. Purchaser's obligation to close this transaction shall be
conditioned on Purchaser having received, effective as of the Closing Date, all
necessary governmental approvals and licenses for operation of the Premises as a
hotel.
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D. Seller acknowledges that Purchaser is a real estate investment trust
and in accordance therewith, Purchaser's obligation to close this transaction
shall be conditioned upon Purchaser obtaining the approval of this Agreement and
the transaction contemplated herein from the board of directors of the general
partner of Purchaser.
Seller and Purchaser shall cooperate and take all actions necessary, in
a diligent and expeditious manner, to effectuate the inspections, transfers and
other reviews required by this Article III during the Feasibility Period. The
Purchaser and its representatives and agents shall be provided with access to
the Premises at all reasonable times, in order to inspect the Premises,
including but not limited to, taking soil samples and test borings, and
conducting environmental studies, engineering studies and other such inspections
and reviews that the Purchaser shall deem reasonably necessary to determine the
condition and financial status of the Premises. Purchaser does hereby agree to
replace and repair any and all areas disturbed by any of the foregoing
activities to a condition substantially similar to that which existed prior to
such sampling, boring, study or inspection. Purchaser does hereby agree to
indemnify and hold Seller harmless from and against any loss, liability, damage
or expense resulting from Purchaser and its representatives and agents
conducting any of the foregoing activities.
IV. TITLE; TITLE POLICY; SURVEY
A. Seller has provided Purchaser with a copy of Seller's owner's title
insurance policy issued by Chicago Title Insurance Company and copies of all
exceptions to title shown thereon. Within fifteen (15) days after the date of
this Agreement, Purchaser shall obtain at Purchaser's cost a preliminary title
report and title insurance binder (the "Title Commitment") from First American
Title Insurance Company (the "Title Company") pursuant to which the Title
Company shall commit to issue a current A.L.T.A. Form B (insuring access and
marketability) owner's fee simple title insurance policy or other policy of
title insurance as shall be reasonably satisfactory to Purchaser and to any
lender of Purchaser (the "Lender") in the amount of the Purchase Price (the
"Title Policy") insuring that the Purchaser shall receive at closing, good,
marketable and indefeasible fee simple title to the Real Property, free and
clear of all liens, exceptions, encumbrances or defects
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other than the matters expressly approved in writing by Purchaser as permitted
exceptions to title as set forth hereinafter (the "Permitted Exceptions"). With
respect to so-called "standard exceptions set forth in the preprinted portion of
the Title Commitment, the Title Commitment shall include a statement whereby the
Title Company agrees to the deletion of such standard exceptions on the basis
specified in Section 627.7842 Florida Statutes (1993). Seller shall furnish to
Purchaser copies of all condominium documents, liens, exceptions or defects set
forth in the Title Commitment at the same time as the Title Commitment is
furnished to Purchaser.
On or prior to the expiration of the Feasibility Period, the Purchaser
shall notify (the "Title Notice") the Seller as to which of the liens, defects,
encumbrances or exceptions set forth in the Title Commitment are objectionable
to Purchaser ("the Title Defects") and which of such matters are acceptable to
Purchaser as the Permitted Exceptions. Within ten (10) days after receipt by
Seller of the Title Notice, the Seller shall cure the Title Defects to the
reasonable satisfaction of the Purchaser. In the event the Seller is unable to
cure the Title Defects to the reasonable satisfaction of the Purchaser (except
for those Title Defects that can be cured with the payment of money and will be
satisfied of record by Seller at or prior to Closing) within such ten (10) day
period or the Purchaser does not agree to waive such Title Defects, then this
Agreement shall terminate and shall be null, void and without further force or
effect, the Deposit (together with all interest) shall be returned to Purchaser
and neither party shall have any further liability to the other. Notwithstanding
the foregoing, the Seller shall be obligated to remove and be responsible for
removing all Title Defects capable of being removed or discharged by payment of
money, including but not limited to, money judgments, mortgages and mechanic's
liens.
B. Within fifteen (15) days after the date of this Agreement, Seller
shall deliver to Purchaser, at Seller's expense, a survey (the "Survey") of the
Premises, dated after the date of this Agreement, prepared by a surveyor duly
licensed under the laws of the State of Florida and reasonably acceptable to the
Purchaser and the Lender in accordance with ALTA or such other standards as
shall be reasonably satisfactory to Purchaser, including meeting the minimum
technical standards set forth in Chapter 61G17-6, Florida Administrative Code,
pursuant to Section 472.027 Florida Statutes
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(1993). The Survey shall be in form and substance satisfactory to the Purchaser,
the Title Company and the Lender. The Survey delivered to Purchaser and Title
Company within fifteen (15) days after the date of this Agreement, shall be
certified to Purchaser and the Title Company (the form of certification to be
satisfactory to the Title Company and Purchaser). The Survey shall show that all
buildings are within lot and building lines, the location of such lines, the
dimensions and total area of the Real Property and Improvements, the location
and number of parking spaces, ingress and egress to adjoining streets, all
benefiting and burdening easements, improvements, appurtenances, rights of way
and utilities whether above or below ground, all encroachments from or into the
Premises, all structures and improvements on the Real Property and all
easements, rights-of-way and other restrictions of record properly identified
with recording information and certifying that the Premises are not within a
flood plain or other flood hazard area. The Survey and certification shall be
sufficient to remove the survey exception from the Title Policy without
indemnity or additional premium. On or prior to the expiration of the
Feasibility Period, the Purchaser shall notify the Seller of any objections of
Seller or Lender to the Survey ("Survey Defects"). Survey Defects shall be
deemed to be Title Defects for purposes of this Agreement and Seller shall cure
such Survey Defects according to the same procedure as for Title Defects.
C. The Purchaser and Seller shall each be responsible for the payment
of its own transaction costs, including counsel fees. Purchaser shall be
responsible for the costs incurred with the physical inspection of the Real
Property and Improvements, including any environmental and engineering studies
other than those delivered by Seller to Purchaser in accordance with Article
III, Paragraph A. At Closing, Seller shall pay the Survey and Purchaser shall
pay all premiums for the issuance of the Title Commitment and Title Policy. Any
and all transfer taxes, real estate excise taxes and sales taxes payable in
connection with the transfer of the Premises, or any portion thereof, and the
Personalty (as hereinafter defined) shall be paid by Seller. Purchaser shall pay
any mortgage registration tax, document recording fees and the cost Purchaser
incurs relative to financing if financing is involved. Unless otherwise stated
in this Agreement, the Purchaser and Seller shall pay all other costs in
connection with the Closing of this transaction as are customary in Orlando,
Florida.
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V. CLOSING
A. The closing of this transaction shall occur on or about the
fifteenth (15th) day following the expiration of the Feasibility Period, but in
no event later than May 1, 1997, by and through the National Accounts office of
the Title Company located at 0000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000,
Xxxxxxxxxx, X.X. 00000, or such other date or place as shall be mutually
acceptable to Purchaser and Seller (the "Closing Date"), without the requirement
that Purchaser or Seller be physically present thereat. The closing of the
transaction contemplated by this Agreement shall be deemed effective as of 12:01
a.m. on the Closing Date ("Closing"). If the date of Closing falls on a
Saturday, Sunday or banking holiday, the Closing shall take place on the next
business day thereafter.
B. At the Closing, the Seller, shall deliver to Purchaser and
perform the following:
1. A General Warranty Deed conveying good, marketable, insurable and
indefeasible fee simple title to the Real Property free and clear of all
defects, exceptions, liens or encumbrances, except for the Permitted Exceptions.
2. Seller shall pay and discharge any special assessment which on or
before the date of Closing, (a) has been levied, imposed, or confirmed against
the Premises, (b) affects or is a lien upon the Premises or (c) although not yet
a lien upon the Premises, is attributable to improvements which benefit or will
benefit the Premises or the property in the vicinity of the Premises for which
improvement work has been commenced. If any of the foregoing assessments may be
paid in installments, all installments shall be deemed payable as of the day
prior to the Closing, and shall be discharged of record by Seller. If, at the
Closing, any amount which Seller is required to pay with respect to the
foregoing has not been determined, Seller agrees to pay such amount as can be
reasonably estimated at the Closing and the final amount shall be adjusted
within fifteen (15) days after Purchaser gives Seller notice that same has been
determined. This provision shall survive the Closing.
3. A Xxxx of Sale conveying the Equipment, Inventory, Real Property not
conveyed by other instruments provided for herein, and other personal property
and intangible property included in the
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Premises ("Personalty"), free and clear of any lien or encumbrance, other than
the Permitted Exceptions, and containing a general warranty of title to the
Equipment, Inventory and Personalty and an inventory of all Equipment, Inventory
and Personalty.
4. An assignment of Seller's interest in and to all Permits, Contracts
to be assumed by Purchaser in accordance with Article III, Paragraph A, Leases
to be assumed by Purchaser in accordance with Article III, Paragraph A,
Intangible Rights, Prepaid items and other items of the Premises, free and clear
of any lien or encumbrance, together with written evidence satisfactory to
Purchaser of any required third party consent to such assignment. Seller shall
deliver to Purchaser all original Contracts and Leases which Purchaser has
elected to purchase pursuant to Article III hereof; the Permits, including the
existing certificates of occupancy for the Premises as presently constituted and
if no such certificates are available, evidence that the Premises are legally
constructed and properly zoned in accordance with all applicable laws; all
warranties and guarantees (and assignments thereof to Purchaser) issued in
connection with the initial construction of the Real Property and Improvements;
any Personalty, and any repairs or additions thereto; cash bank; moneys advanced
for future registrations; guest registration records; keys; permits, approvals
and licenses issued by all appropriate governmental authorities and fire
underwriting organizations with respect to the construction and use of the
Premises or any part thereof; and any existing copies of architectural plans and
specifications, blueprints and building plans which may be in Seller's
possession.
5. At Purchaser's option, an assignment of all fire and extended
coverage insurance policies, liability policies and loss of rental policies,
affecting any of the Premises to the extent assignable (if assigned, premiums to
be adjusted at Closing).
6. Tax certificates or other evidence of payment from all appropriate
taxing authorities certifying the payment of all real and personal property
taxes through the current tax year.
7. A certificate of Seller dated as of the Closing that Seller is not a
foreign person or corporation within the meaning of Sections 1445 and 7701 of
the Internal Revenue Code (the "IRC").
8. A bring down certificate dated as of the Closing
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certifying the truth and accuracy of each representation and warranty set forth
in Article XII as of the Closing Date.
9. An affidavit of title reasonably satisfactory to the Title Company
enabling the Title Company to issue the Title Policy without exception for
mechanic's or materialman's or other statutory liens or for the rights of
parties in possession other than temporary hotel patrons.
C. At the Closing, the Purchaser shall deliver to the Seller the
following:
1. Subject to Article IX, the Balance of the Purchase Price in
the manner elected by Seller pursuant to Article II, Paragraph
B.
2. Proof of authority for Purchaser to complete the transaction
reasonably satisfactory to Seller.
VI. DELIVERY OF POSSESSION
Seller shall deliver actual and exclusive possession of the Premises to
Purchaser on the Closing Date.
Seller hereby grants to Purchaser the right to enter the Premises at
any reasonable time after the date hereof for the purpose of inspecting, testing
and examining the Premises, which purpose is more particularly provided in
Article III hereof.
VII. DAMAGE TO PROPERTY
Seller shall give Purchaser immediate notice of any fire or other
casualty or of any pending or threatened condemnation occurring to all or any
portion of the Premises between the date hereof and the Closing. If prior to the
Closing, there shall occur:
(i) damage to the Premises caused by fire or other casualty,
which would cost $100,000.00 or more to repair or replace; or
(ii) the taking or condemnation of all or any portion of the
Premises (including any parking areas) as would materially interfere
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with the use thereof, as determined by Purchaser; then, if any of the
events set forth in (i) or (ii) above occurs, Purchaser, at its option,
may terminate this Agreement by written notice given to Seller within
fifteen (15) days after Purchaser has received the notice referred to
above or at the Closing, whichever is earlier. If Purchaser does not
elect to terminate this Agreement, the Closing shall take place as
provided herein without an abatement of the Purchase Price and there
shall be assigned to the Purchaser at Closing, all interest of the
Seller in and to any insurance proceeds or condemnation awards which
may be payable to Seller on account of such occurrence.
If, prior to the Closing, there shall occur:
(x) damage to the Premises caused by fire or other casualty which
would cost less than $100,000.00 to repair or replace; or
(y) the taking or condemnation of all or any portion of the
Premises which is not material to the use thereof, as
determined by Purchaser;
then, if any of the events set forth in (x) or (y) above occurs, Purchaser shall
have no right to terminate this Agreement (solely as a result of the occurrence
of such events), and Seller shall, at its sole expense, with respect to
subparagraph (x), restore or replace the damaged Premises to its original
condition; and, with respect to subparagraph (y), there shall be assigned to
Purchaser at Closing all interest of Seller in and to any condemnation awards
which may be payable to Seller on account of any such occurrence.
VIII. REMEDIES
A. If the transaction contemplated by this Agreement is not consummated
solely by reason of Purchaser's failure to perform its obligations under this
Agreement, then Seller, as its sole and exclusive remedy, shall be entitled to
the Deposit as full liquidated damages in complete and total accord and
satisfaction, the parties hereby acknowledging and agreeing to the difficulty of
ascertaining Seller's actual damages in such circumstances.
B. If this transaction is not consummated by reason of:
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(i) cancellation by Purchaser as permitted by the terms
of this Agreement, including but not limited to,
cancellation by Purchaser at any time on or prior to
the expiration of the Feasibility Period;
(ii) the inability of Purchaser to obtain any approval or
consent required pursuant to or otherwise satisfy any
condition or contingency set forth in Article III;
(iii) the occurrence of any of the events described in
Article VII;
(iv) Title Defects and Survey Defects which are not cured
as provided in this Agreement (except for those Title
Defects or Survey Defects which Seller is obligated
to cure); or
(v) cancellation by Purchaser pursuant to any other
applicable provisions of this Agreement,
then Purchaser shall be entitled to a return of the Deposit (together with all
interest thereon) and this Agreement shall be null and void and all parties
relieved from any further liability hereunder, unless Purchaser elects to waive
any of the items or occurrences set forth in this Article VIII, Paragraph B. The
items enumerated in this Article VIII, Paragraph B are for Purchaser's benefit
only and the non-occurrence of a state of facts sufficient to satisfy any of
such items may not be used or pleaded by Seller as a defense to the
enforceability of this Agreement.
C. If this transaction is not consummated because of a default on the
part of Seller or if Seller fails to close this transaction in breach of its
obligation to do so, then Purchaser, at its option, may
(i) seek specific performance of this Agreement;
(ii) receive a return of the Deposit (together with all interest
thereon) and to recover monetary damages as allowed by law;
and
(iii) seek any other remedy available at law or in equity to enforce
the terms of this Agreement, all of which
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remedies available to Purchaser shall be cumulative.
IX. PRORATIONS
All income (including cash on hand and accounts receivable), current
operating expenses, accounts payable, real estate taxes, other taxes and
assessments, all utilities, water and sewer charges, licenses or permit fees
relating to the operation of the Premises, real estate and personal property ad
valorem taxes, prepayments made under the Contracts (to be assumed by Purchaser
pursuant to Article III hereof) and insurance premiums (if applicable), shall be
adjusted and prorated as of the Closing. All franchise fees, maintenance and
service agreements (whether or not service is continued by Purchaser) and
utility charges shall be determined as of Closing and paid by Seller or
appropriate adjustments made if Purchaser at its option accepts an assignment of
any such agreement. If such charges and expenses are unavailable on the Closing
Date, a re-adjustment of such charges and expenses shall be made within thirty
(30) days after the Closing or as soon thereafter as such charges and expenses
are available. The parties agree to cooperate in good faith in effecting such a
final reconciliation and each party shall promptly pay (or reimburse the other
party for) any expense item that is chargeable to the former party and shall
promptly remit any income item to the other party if entitled thereto. Seller
shall use reasonable efforts to arrange for the rendition of final bills by the
utility companies involved as of the Closing Date.
Guest room revenues of the Premises, whether in cash or in accounts receivable,
arising from occupancy for the night beginning on the day preceding the Closing
Date and ending on the Closing Date shall be credited one-half to Purchaser and
one-half to Seller. Seller shall collect all income and other sums payable by
tenants or guests (or otherwise) and shall be responsible for the payment of all
expenses on account of services and supplies furnished to and for the benefit of
the Premises through and including the Closing, with expenses for the night
beginning on the day preceding the Closing Date and ending on the Closing Date
being handled in the same manner as guest room revenues for such period.
Purchaser shall be credited with any deposits from tenants or guests of the
Premises which are refundable to such tenants or guests. Seller shall remit to
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Purchaser at closing all prepaid income items. In addition, at Closing, Seller
shall deliver to Purchaser a schedule of all unpaid accounts receivable and
other income items as of Closing. All such accounts receivable and other income
items collected by or for Purchaser after Closing shall be promptly remitted to
the order of Seller; provided, however, payments received by Purchaser following
the Closing with respect to receivables shall be deemed to be in payment of
receivables of Purchaser unless the payment received specifically identifies
that it is in payment of a receivable attributed to Seller or there is no
receivable due to Purchaser with respect to such payment. Seller and Purchaser
agree to attempt to reconcile and prorate the accounts receivable within sixty
(60) days after Closing. Except for sums actually received by Purchaser pursuant
to the immediately preceding sentence, Purchaser shall assume no obligation to
collect or enforce the payment of any amounts that may be due to Seller, except
that Purchaser shall render reasonable assistance, at no expense to Purchaser,
to Seller after Closing in the event Seller proceeds against any third party to
collect any accounts receivable or other income items due Seller. Nothing
contained in this Article shall be deemed to prohibit Purchaser and Seller from
entering into an agreed settlement in writing of all prorations at or following
Closing.
In the event any adjustments pursuant to this Article are, subsequent
to Closing, found to be erroneous, then either party hereto is entitled to
additional monies and shall invoice the other party for such additional amounts
as may be owing, and such amount shall be paid promptly by the other party upon
receipt of the invoice. Such invoice shall be accompanied by reasonable
substantiating evidence. Notwithstanding anything contained in this Article IX
to the contrary, in order to provide security for all of the adjustments and
prorations set forth in this Article IX to be made after Closing, Purchaser and
Seller agree that the sum of $50,000.00 from the net sales proceeds portion of
the Purchase Price available to Seller at Closing shall be deposited with Escrow
Agent and shall be held by Escrow Agent until all such adjustments and
prorations are deemed final by Purchaser and Seller. Escrow Agent shall not
disburse such amount or any portion thereof except in accordance with written
instructions relative thereto signed by both Purchaser and Seller. The terms of
such escrow shall be set forth in an escrow agreement to be executed at Closing,
the terms thereof being subject to the reasonable approval of Purchaser and
Seller.
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Purchaser shall have no obligation with respect to Seller's employees
whatsoever all of whom shall be compensated and terminated by Seller as of
Closing, though Purchaser reserves the right to employ any such employees.
The provisions of this Article IX shall survive the delivery of the
Deed.
X. NOTICES
Any notice to be given by either party to this Agreement shall be in
writing and shall be either delivered personally, or by facsimile (provided that
a copy of such notice is also sent on the same day by one of the other methods
set forth herein) or by certified or registered U.S. Mail, postage prepaid, or
by nationally recognized overnight courier delivery service with charges to the
sender, as follows:
To Seller: WHB Hotel Corp., Ltd.
c/o Xx. Xxxx Xxxxxxxxxx
Xxxx Xxxxxx Xxx 0000
Xx. Xxxxxxxxxx, XX 00000-0000
Fax No. ______________________
With copies to: Xxxxxx X. Xxxxx, Esquire
Xxxxxxx, Xxxxxx & Xxxxxxxxx
0000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Fax No. (000) 000-0000
To Purchaser: XXXX Limited Partnership
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, III
Fax No. (000) 000-0000
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With copies to: Xxxxxxx X. Xxxxx, III, Esquire
Xxxxx & Bunch
0000 Xxxxx xx Xxxxx Xxxx,
Xxxxx 000 (street zip code 27609)
Xxxx Xxxxxx Xxx 00000
Xxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Fax No. (000)000-0000
Notice shall be deemed given if properly addressed and delivered as set forth
herein two (2) business days following deposit in the U.S. Mail, one (1)
business day following deposit with any generally recognized overnight delivery
service, on personal hand delivery to a person authorized to receive such
delivery, on the day of such hand delivery and, on the date of the facsimile
transmission as evidenced by the printed receipt therefor, provided a second
method is utilized as required hereinbefore. Any party may change addresses for
notices by delivering written notice of such change in accordance with this
Article X.
XI. INDEMNITY
A. Seller shall indemnify and hold the Purchaser harmless from and
against any claim for any real estate commission, brokerage fee or finder's fee
made by any person, firm or corporation, claiming by, through or under the
Seller. Purchaser shall indemnify and hold the Seller harmless from and against
any claim for any real estate commission, brokerage fee or finder's fee made by
any person, firm or corporation, claiming by, through or under the Purchaser.
Notwithstanding the foregoing, Seller warrants and represents that there are no
brokerage fees, real estate commissions, finder's fees or other acquisition
costs or any other compensation payable by Seller and due to any third party in
connection with this transaction other than commissions to be paid to
International Hospitality Group (Xxx Xxxxxx). Seller shall pay such commission
in full to such brokers upon the Closing of the transaction contemplated hereby.
This warranty and representation shall survive the Closing and the parties shall
indemnify each other from any liability, cost or loss arising out of a breach of
said warranty and representation, including consequential damages.
B. The Seller shall indemnify and hold the Purchaser harmless from and
against any and all liabilities, claims, demands, costs and
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expenses of any kind or nature, including but not limited to, reasonable
attorney's fees, arising out of or incurred in connection with (i) any breach of
the representations and warranties of Seller set forth in this Agreement, (ii)
the ownership, use, maintenance or operation of the Premises on or prior to the
Closing or the transfer of the Premises to the Purchaser (including the payment
of all taxes),or (iii) compliance or failure to comply with the notice
provisions relating to bulk sales laws applicable to the transfer of all or any
part of the Premises. Purchaser shall indemnify and hold Seller harmless from
and against any and all liabilities, claims, demands, costs and expenses of any
kind or nature, including reasonable attorney's fees, arising after the date of
Closing and which arise out of the ownership or operation of the Premises by the
Purchaser following the Closing. Such indemnities shall survive Closing.
C. If Purchaser or Seller propose to make any claim for indemnification
under any Article or Paragraph of this Agreement (the "Indemnitee"), the
Indemnitee shall deliver to the other party (the "Indemnitor") a certificate
signed by the Indemnitee which certificate shall (i) state that a loss has
occurred and (ii) specify in reasonable detail each individual item of loss or
other claim including the amount thereof and the date such loss was incurred.
The Indemnitor shall have the right in its discretion and at its expense to
participate in and control (a) the defense or settlement of any claim, suit,
action or proceeding (including appeals) in respect of such item (or items) by
any person other than a party hereto, (b) any and all negotiations with respect
thereto, and (c) the assertion of any claim against any insurer with respect
thereto, and the Indemnitee shall not settle any such claim, suit, action or
proceeding or agree to extend any applicable statute of limitation without the
prior written approval of the Indemnitor. The rights of participation, control
and approval granted to the Indemnitor shall be subject as a condition precedent
to the Indemnitor's acknowledging to the Indemnitee, in writing, the obligation
of the Indemnitor to indemnify the Indemnitee in respect of such third party's
claim, suit, action or proceeding giving rise to such item. Upon satisfaction of
such condition precedent, the Indemnitee shall provide the Indemnitor with all
reasonably available information, assistance and authority to enable the
Indemnitor to effect such defense or settlement and upon the Indemnitor's
payment of any amounts due in respect of such claim,
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suit, action or proceeding, the Indemnitee shall, to the extent of such payment,
assign or cause to be assigned to the Indemnitor the claims of the Indemnitee,
if any, against such third parties in respect of which such payment is made. If
the Indemnitor is not so willing to acknowledge such obligation, the parties
shall jointly consult and proceed as to any such third party claim, suit, action
or proceeding.
XII. SELLER'S REPRESENTATIONS AND WARRANTIES
The Seller represents and warrants to the Purchaser that:
A. Seller is a limited partnership duly organized, and existing and in
good standing under the laws of the state of its formation and authorized to do
business in the State in which the Premises are located.
B. Seller is authorized to enter into this Agreement and to consummate
the transaction contemplated hereby, and the individuals executing this
Agreement on behalf of Seller are also duly authorized to execute this Agreement
and to bind Seller to consummate such transaction. The execution and delivery of
this Agreement and the conveyance of the Premises by Seller, pursuant to this
Agreement, do not require the consent of any person, agency or entity not a
party to this Agreement. The execution of this Agreement by Seller and the
transaction contemplated herein have been duly authorized by proper corporate or
partnership action, as the case may be, including the board of directors of
Seller, if Seller is a corporation.
C. There are no pending or, to the knowledge of Seller, threatened,
condemnation or similar proceedings affecting the Premises, or any portion
thereof. Seller has not received any written notice that any such proceeding is
contemplated, and no part of the Premises has been destroyed or damaged by any
casualty.
D. To the best of Seller's knowledge, the maintenance, operation, use
or occupancy of the Premiss as a hotel does not violate any building, health,
zoning, environmental, fire or similar law, ordinance, regulation or restrictive
covenant. To the best of
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Seller's knowledge, the Premises do not violate any federal, state, county, or
municipal laws, ordinances, orders, regulations or requirements nor has Seller
received any notice of such a violation.
E. There are no options to purchase, rights of first refusal or other
similar agreements with respect to the Premises which give anyone the right to
purchase the Premises or any part thereof, except as set forth in Section 16 of
that certain Declaration of Condominium of Capital Hotel Restaurant Group - A
Condominium, dated October 30, 1989, recorded in Official Records Book 4127,
Page 4155, as amended by the First Amendment thereto recorded in Official
Records Book 4149, Page 607, Public Records of Orange County, Florida, given and
granted therein to the owner of Unit 2 of such Condominium, the same having been
waived by such owner of such Unit 2 by letter dated February 28, 1997. There are
no contracts or agreements which affect or cover the Premises, except for the
Contracts, Permits and Leases. There are no unpaid bills or claims in connection
with the construction repair or replacement of the Premises. There are no
agreements allowing for any reduction, concession or abatement of room rates,
other than coupons based on room availability and standard concessions and
wholesale and bulk room customers, a list setting forth the names, rates and
term of agreement for such concessions and amount of outstanding coupons shall
be provided to Purchaser within five (5) days after the date of this Agreement,
to be updated at Closing.
F. The Financial Statements for the Premises provided by Seller to
Purchaser pursuant to Article III, Paragraph A, item (g) are or shall be true,
correct and accurate in all material respects and fairly present the results of
operations of the Premises for the periods then ended. Attached hereto as
Schedule 5 and incorporated herein by this reference is a trailing twelve (12)
month profit and loss statement ending February, 1997, evidencing a net
operating income for the Premises of $1,391,472.00, and such Schedule 5 is true,
correct and accurate in all material respects and fairly presents the results of
the operations of the Premises for such period. It is acknowledged that such
profit and loss statement has been amended and adjusted as agreed to by
Purchaser and Seller to be in accordance with generally accepted accounting
principles and to exclude therefrom items extraneous to the operation of the
Hotel previously included therein. During the immediately preceding two year
period, no single customer (or its or their affiliates) comprised more than 10%
of gross room sales, with the exception that
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in 1995, Choice-Sunburst accounted for 14.2% and Carnival accounted for 16.8%
and in 1996, Carnival accounted for 9.6%, Choice-Sunburst accounted for 13.5%
and AAA accounted for 18.8%.
G. The Seller has duly filed in a timely manner all federal, state,
county and local income, franchise, excise, withholding, sales, occupancy,
payroll, property (real, personal and intangible), and any other tax returns and
reports required to have been filed up to the date hereof, and has paid all
taxes, interest, penalties and all assessments that have become due. The Seller
has paid, or made adequate provision for the payment of, all taxes with respect
to the conduct of its business upon the Premises through the Closing. Neither
the Seller nor its agents have been advised or notified of any tax deficiency,
assessment or penalty with respect to the Seller, nor does the Seller know of
any basis for any additional claim or assessment for taxes, interest or
penalties. No liens for taxes, federal, state or local, have been filed against
the Seller or its assets.
H. Certificates of Occupancy for all buildings and other improvements
have been duly issued, and the buildings and improvements may be legally
occupied and are presently being occupied as a hotel/motel. Copies of such
Certificates of Occupancy or their equivalent in Florida shall be delivered by
Seller to Purchaser within five (5) days after the date of this Agreement. The
Real Property is zoned properly for the present uses made thereof.
I. Except as set forth in the Title Commitment, the Seller owns and has
good and marketable title to all of its assets and properties which constitute
the Premises free and clear of any security interest, mortgage, pledge, lien,
conditional sale or other encumbrance or charge. All of the Premises owned by
Seller is, and at the time of Closing will be, in good condition and in good
working order. The Premises to be purchased is all of the property of every kind
and nature necessary for the operation of the Seller's business in the ordinary
course.
J. To the best of Seller's knowledge, the Premises are in compliance
with and have not violated any statute, law, ordinance, rule, regulation, order
and directive (including, without limitation, all labor and environmental
control and antipollution laws, ordinances, rules, regulations or directives) of
any and all
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Governmental Agencies pertaining to the use or occupancy of the Premises.
The Seller has not received any notice of and the Seller and the
Premises have not been charged with, are not under investigation or threatened
investigation for failure to comply with and are in compliance with, any and all
statutes, laws, ordinances, rules, regulations, orders and directives of any and
all Governmental Agency or Agencies pertaining to the use, generation, dumping,
releasing, burying or disposing of or emitting of any particles, materials,
substances, or emissions that are now or have heretofore been determined by any
and all Governmental Agency or Agencies to be of a hazardous, toxic, pollutive,
or ecologically or environmentally damaging nature, including but not limited to
asbestos ("Hazardous Materials"). Seller has not previously disposed of any
Hazardous Materials at the Premises.
For purposes of this Agreement, the term "Hazardous Materials" shall
include, but not be limited to, those materials or substances now or heretofore
defined as "hazardous substances," "hazardous materials," "hazardous waste,"
"toxic substances," or other similar designations under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C., Section 9601, et seq., the Resource Conservation and Recovery Act, 42
U.S.C., Section 6901, et seq., the Hazardous Materials Transportation Act, 49
U.S.C., Section 1801, et seq. and other laws, whether or not of a similar
nature, applicable to the Premises and adopted by, enacted in or applicable to
the State of Florida.
For purposes of this Agreement, the term "Governmental Agency or
Agencies" means, whether of the United States of America, of any state or
territory thereof or of any foreign jurisdiction, any government, political
subdivision, court, agency, or other entity, body, organization or group
exercising any executive, legislative, judicial, regulatory or administrative
function of government.
To the best of Seller's knowledge, the Real Property has never appeared
on any federal or state registry of active or inactive hazardous waste disposal
sites. Seller has never received any notice of claim from a Governmental Agency
concerning the alleged release or threatened release of Hazardous Materials at
the Real Property. To the best of Seller's knowledge, no hazardous waste sites
exist within a one mile radius of the Real Property.
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K. There are no employment or union agreements in effect relative to
any employee at the Premises and no employee has received a commitment from the
Seller for continued employment after Closing. The Seller shall be responsible
for and shall pay all salary, compensation, vacation time, bonuses and benefits
to which each employee of and at the Premises is entitled for the period of time
prior to the Closing Date.
L. Seller has no knowledge of and has received no notice of any causes
of action, actions, or proceedings of whatever type or description which have
been instituted or threatened or are pending relating to the Premises or any
interest therein.
M. No representation or warranty made by the Seller, nor in any
statement or document furnished or to be furnished to the Purchaser hereunder,
or in connection with the transaction contemplated hereby, contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained therein not misleading.
The Seller has disclosed herein to the Buyer all facts or developments of any
kind which are material to the assets, prospects, financial condition and
business of the Seller, and is solely responsible for the accuracy and
completeness of the contents thereof and all other statements and documents
submitted in connection with this Agreement and the transactions contemplated
hereby.
Purchaser, in Purchaser's sole and absolute discretion, may waive any
condition to close or breach of any representation or warranty provided for
herein or any Title or Survey Defect, and in such event, this transaction shall
be consummated as if such condition, representation, warranty or defect was
satisfied. All of the representations and warranties contained in this Agreement
shall survive the Closing. The representations and warranties set forth above
shall be true, correct and accurate on the date hereof and as of the date of
Closing.
XIII. ESCROW
The Escrow Agent hereby acknowledges receipt of the Deposit and agrees
to hold the Deposit in escrow until the Closing or sooner termination of this
Agreement and shall pay over and apply the proceeds thereof in accordance with
the terms of this Agreement.
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If, for any reason, the Closing does not occur and either party makes a written
demand upon the Escrow Agent for payment of the Deposit, the Escrow Agent shall
give written notice to the other party of such demand. If the Escrow Agent does
not receive a written objection from the other party to the proposed payment
within five (5) business days after the giving of such notice, the Escrow Agent
is hereby authorized to make such payment. If the Escrow Agent does receive such
written objection within such five (5) day period, or if for any reason the
Escrow Agent in good faith shall elect not to make such payment, the Escrow
Agent shall continue to hold the Deposit until otherwise directed by written
instructions from the parties to this Agreement or until a final judgment
(beyond any applicable appeal period) by a court of competent jurisdiction is
rendered disposing of such Deposit.
The Escrow Agent shall be liable as a depository only and its duties
hereunder are limited to the safekeeping of the Deposit and the delivery of same
in accordance with the terms of this Agreement. The Escrow Agent shall not be
liable for any act or omission done in good faith, or for any claim, demand,
loss or damage made or suffered by any party to this Agreement, except such as
may arise through or be caused by the Escrow Agent's willful misconduct or
negligence.
XIV. COVENANTS
A. Following the date of this Agreement and to and including the
Closing, the Seller (i) shall continue normal and prudent maintenance and
management of the Premises, (ii) shall continue to maintain supplies and payroll
at their current level, and (iii) shall operate the Hotel in the ordinary and
prudent course of business.
B. All taxes levied against the Premises which were or shall be due and
payable prior to the Closing have been or shall be paid in full by the Seller on
or prior to the Closing.
C. All Contracts and Leases which the Purchaser elects to assume in
accordance with Article III shall be current and not in default as of the
Closing. Seller shall not enter into new Contracts or Leases except in the
ordinary course of business, and provided that any such new Contract or Lease
shall either provide that it may be cancelled on not more than 30 days notice by
Seller
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at no penalty or cost or, Purchaser shall consent to such Contract or Lease in
writing.
D. Seller shall maintain fire and casualty insurance on the Premises up
to and including the Closing in amounts reasonably satisfactory to Purchaser.
E. Seller shall deliver to Purchaser a report itemizing room sales per
month, occupancy and ADR through a date which is not later than one month prior
to the Closing Date ("Monthly Report"). The Monthly Report shall be satisfactory
to Purchaser in all respects.
F. During the Feasibility Period, representatives of Seller and
Purchaser shall meet at the Premises and prepare a schedule of the Equipment,
which schedule shall be attached hereto and made a part hereof at such time.
XV. 1031 EXCHANGES. Seller may elect at Seller's option to structure
the sale of the Premises as a tax free exchange as follows:
A. Direct Exchange. To conclude the Closing of the Premises, in whole
or in part, by exchanging the Premises for property of "like kind" as defined in
Section 1031 of the Internal Revenue Code of 1986 (the "Code"), and, in
accordance with all of the terms and conditions for such an exchange, as
provided in Section 1031 of the Code. Purchaser agrees to cooperate fully and
completely with Seller to exchange the Premises, rather than sell the Premises
directly; provided, however, that Seller agrees to be solely responsible for any
and all costs or additional costs or expenses relating to such an exchange
transaction. Seller shall provide to the Purchaser notice of same, which notice
shall include all of the usual and customary "exchange" requirements, as
provided in Section 1031 of the Code, together with the details regarding the
party or parties making the exchange and the proposed structure of such
exchange. The notice shall expressly incorporate all of the terms, provisions
and conditions of this Agreement which are not directly contrary to such
exchange transaction.
B. Delayed Exchange. Without limitation to the generality of the
foregoing, Seller may further elect to conduct the aforesaid
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exchange on a delayed basis (provided, however, that such delayed exchange shall
have no adverse effect on the Purchaser and not result in additional costs,
expenses, liabilities or obligations to the Purchaser), in which case the
balance of the Purchase Price of the Premises shall, upon the Closing, be
delivered to the Title Company or other designee of the Seller, pursuant to such
exchange entity's standard tax-deferred exchange documents.
C. No Delays or Liability to Purchaser. Notwithstanding anything in the
foregoing to the contrary, the Purchaser shall not be required to take title to
any property of "like kind", shall incur no liability whatsoever as a result of
the efforts of Seller to proceed under Section 1031 of the Code, and the failure
of Seller to locate or identify property of "like kind" shall not delay or
affect this Agreement in any manner whatsoever.
XVI. BINDING EFFECT; MISCELLANEOUS
A. This Agreement shall be binding upon and shall inure to the parties
hereto, their respective heirs, successors, legal representatives and assigns.
This Agreement sets forth the entire Agreement between the parties hereto and no
other prior written or oral statement or agreement or understanding shall be
recognized or enforced. All modifications or amendments shall be in writing and
signed by the parties. This Agreement is to be construed according to the laws
of the State of North Carolina. This Agreement may be executed in two or more
counterparts all of which shall constitute one and the same instrument. The
singular shall include the plural and vice versa.
B. The Purchaser may assign this Agreement.
C. For a period of four (4) years immediately following the Closing,
Seller, including any and all entities and individuals owning at least a twenty
five percent (25%) ownership interest in Seller, agrees that it shall not,
directly or indirectly, for its own account or as agent, employee, officer,
director, trustee, lessor, sublessor, consultant or as a stockholder of any
corporation or any other entity, or as a member of any firm or otherwise, (i)
engage or attempt to engage within the Restricted Area (as hereinafter defined),
in the hotel, motel or other business which is the same as, substantially
similar to or competitive with the operation of the Premises purchased pursuant
to this Agreement, or
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(ii) employ or solicit the employment of any employees of Seller at the
Premises; provided, however, the foregoing shall not apply to Xxx Xxxxxxxx who
is currently employed by Seller at the Hotel and therefore, notwithstanding the
foregoing, Seller, including any and all entities and individuals owning at
least a twenty five percent (25%) ownership in Seller, shall have the right to
employ Xxx Xxxxxxxx subsequent to Closing. For purposes of this Agreement, the
term "Restricted Area" shall mean an area which shall consists of a circle the
radius of which is seven (7) miles with the center point being located at the
Premises in Orlando, Florida. Each of the Seller, including any and all entities
and individuals owning at least a twenty five percent (25%) ownership interest
in Seller, and Purchaser acknowledges and agrees that the foregoing territorial,
time and other limitations and restrictions contained in this Article XVI are
reasonable and properly required for the adequate protection of the business and
affairs of the Purchaser, and in the event that any one or more of such
territorial, time or other limitations is found to be unreasonable by a court of
competent jurisdiction, each of Purchaser and Seller, including any and all
entities and individuals owning at least a twenty five percent (25%) ownership
interest in Seller, hereby agree to submit to the reduction of the said
territorial, time or other limitation, to such an area, period or otherwise as
the court may determine to be reasonable. In the event that any limitation or
restriction under this Article XVI is found to be unreasonable or otherwise
invalid in any jurisdiction in whole or in part, each of Purchaser and Seller,
including any and all entities and individuals owning at least a twenty five
percent (25%) ownership interest in Seller, acknowledges, warrants, represents
and agrees that such limitation shall remain and be valid in all other
jurisdictions. Each of Purchaser and Seller, including any and all entities and
individuals owing at least a twenty five percent (25%) ownership interest in
Seller, acknowledges, warrants, represents and agrees that the restrictive
covenants contained in this Article XVI are necessary for the protection of
Purchaser's legitimate business interests and are reasonable in scope and
content, and Seller, including any and all entities and individuals owning at
least a twenty five percent (25%) ownership interest in Seller, represents and
warrants that its and their attorneys have thoroughly and completely reviewed
this Agreement with it and them, and it and they understand the contents hereof.
Seller, including any and all entities and individuals owning at least a twenty
five percent (25%) ownership interest in Seller, and Purchaser acknowledges and
agrees that because a remedy
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at law for any breach of the provisions of this Article XVI will be inadequate,
in addition to all other remedies available to Purchaser, Purchaser shall have
the remedies of a restraining order, injunction or other equitable relief to
enforce the provisions hereof. Each of Purchaser and Seller, including any and
all entities and individuals owning at least a twenty five percent (25%)
ownership interest in Seller, agrees that the issues in any action brought under
this Article XVI will be limited to claims under this Article XVI and all other
claims or counterclaims under other provisions of this Agreement will be
excluded. All expenses, including reasonable attorneys' fees and expenses
arising out of claims under this Article XVI shall be borne by the losing party
to the fullest extent permitted by law. Purchaser and Seller, including any and
all entities and individuals owning at least a twenty five percent (25%)
ownership interest in Seller, acknowledge and agree that the payment of the
Purchase Price is sufficient consideration to support the enforcement of this
Paragraph C. of Article XVI and further, the agreements of Seller herein,
including any and all entities and individuals owning at least a twenty five
percent (25%) ownership interest in Seller, are given and made to and for the
benefit of Purchaser as a material inducement to Purchaser to pay the Purchase
Price pursuant to the terms of this Agreement. The terms and provisions of this
Article XVI shall survive Closing. The entities and individuals owning at least
a twenty five percent (25%) ownership interest in Seller are identified on
Schedule 6 attached hereto and incorporated herein by this reference. Such
entities and individuals have executed Schedule 6 to acknowledge, consent and
agree to the terms and provisions of this Paragraph C. of Article XVI.
D. As used herein, "the date of this Agreement" shall mean the date
noted below as the date upon which this Agreement was executed by the latter of
the Purchaser or the Seller.
XVII. SECURITIES MATTERS. Purchaser and Seller acknowledge, agree,
represent and warrant each to the other, that the Units to be issued pursuant to
this Agreement will be received and accepted as follows:
A. Each of such persons to whom the Units will be transferred
(a) if an individual, either (i) has an individual net worth, or a
joint net worth with his/her spouse, at the time of purchase in excess
of
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$1,000,000.00; or (ii) has an individual gross income (jointly with
his/her spouse) in excess of $200,000.00 for the two most recent years
and reasonably expects an income in the current year in excess of
$300,000.00, or (b) if a corporation, partnership or trust, is
otherwise an "accredited investor" as that term is defined in
Regulation D promulgated by the Securities and Exchange Commission; and
Seller shall have written corroboration of such matters as to each
party who will receive Units as a result of the transaction provided
for herein, as of the time they receive Units;
B. Seller and each of the persons to whom the Units may be
transferred hereby acknowledge and agree that the Units shall be held
by Seller and such persons for a period of at least one (1) year from
and after their issuance to Seller or such persons and that the Units
are being acquired pursuant to the terms and conditions described in
the Partnership Agreement of Purchaser, a copy of which has been
obtained by or otherwise provided to Seller and such persons;
C. Except in connection with a redemption of the Units, the
Units are being and shall be received and held by Seller and such
persons for their own account for investment purposes only, and not
with a view to any offering or distribution thereof, and Seller and
such persons have no present intention of selling or otherwise
disposing of the Units;
D. The Units have been obtained by Seller and such persons
without the service of any broker, dealer, investment banker or finder,
and there is no obligation to pay a commission, fee, bonus or
remuneration of any type to any broker, dealer, investment banker, or
finder;
E. Seller and such persons have been given access to all
registration statements, proxy materials, financial statements and
filings with the Securities and Exchange Commission relating to the
shares of Winston Hotels, Inc. and the business of the Purchaser, and
such materials are understood by Seller without the benefit of an
investment adviser, lawyer, accountant or other professional;
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F. Seller and such persons have been afforded the opportunity
to ask questions of and receive answers from Winston Hotels, Inc., the
Purchaser and their representatives concerning matters relating to the
capitalization, management, financial condition, operations and
prospects, financial and otherwise, of the Purchaser and Winston
Hotels, Inc., and no verbal information has been furnished to Seller or
such persons in connection with this transaction which is in any way
inconsistent with or at variance from the written information so
provided;
G. The Units are not registered under the Securities Act of
1933, as amended, and the owners thereof may be required to bear the
economic risk of ownership of the Units for an indefinite period of
time; and, consequently, the Units cannot be sold unless the offer and
sale thereof is subsequently registered under the Securities Act of
1933 and the "blue sky" law of each state in which any of the Units are
offered for sale, unless an exemption from registration is available;
H. Purchaser will distribute or transfer the Units only to
persons who make the same representations and warranties as are set
forth in this Article XVII; and,
I. Seller and such persons understand that the Units have not
been and will not be registered under state or federal securities laws.
Seller and such persons shall be entitled to convert the Units into an
equal number of shares of common stock, par value $.01 per share, in
Purchaser's general partner, Winston Hotels, Inc., a North Carolina
corporation ("Shares"), at a conversion price based on the then current
trading price of the common stock of Winston Hotels, Inc. at the time
of such conversion or cash as set forth in the partnership agreement of
Purchaser. Seller and such persons further understand that neither the
Units nor Shares may be sold or transferred except according to the
terms of this Agreement, the partnership agreement of Purchaser and
pursuant to an effective registration statement under the Securities
Act of 1933, as amended, or pursuant to an exemption from registration.
Notwithstanding the
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foregoing, Seller hereby requests and Purchaser hereby agrees, that it
shall cause the registration of Shares issuable hereunder upon
redemption of Units on at least sixty (60) days notice after the
expiration of the one (1) year period set forth in paragraph B above.
Purchaser shall use its best efforts to file and obtain the necessary
regulatory approvals for a registration statement under which Seller
and such persons can sell the Shares. Seller and such persons shall
cooperate with Purchaser, at no expense to Seller or such persons, with
respect to obtaining the necessary regulatory approvals for a
registration, all of which shall be at the expense of Purchaser.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year first above written.
Purchaser:
XXXX Limited Partnership,
a North Carolina limited partnership
(SEAL)
By: Winston Hotels, Inc.,
a North Carolina corporation,
General Partner
(Corporate Seal) By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
President
---------
Attest:
Xxxxxx X Xxxxx
--------------------
Assistant Secretary
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Seller:
WHB Hotel Corp., Ltd.,
a Florida limited partnership
By: Hotel Investors of Orlando, Inc,
a Florida corporation,
general partner
By: /s/ Xxxxxxx X. Xxxxxxxxxx (SEAL)
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
Escrow Agent:
The Title Company of North Carolina,
Inc., as agent for First American
Title Insurance Company
Name: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Title: Vice President
--------------------------------
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STATE OF NORTH CAROLINA
COUNTY OF WAKE
I, a Notary Public of the County and State aforesaid, certify that
Xxxxxx X. Xxxxx, personally came before me this day and acknowledged that she is
Assistant Secretary of Winston Hotels, Inc., a North Carolina corporation,
General Partner of XXXX Limited Partnership, a North Carolina limited
partnership, and that by authority duly given and as the act of the corporation,
as such General Partner, the foregoing instrument was signed in its name by its
President, sealed with its corporate seal and attested by herself as its
Assistant Secretary. Witness my hand and seal, this the 17th day of March, 1997.
My commission expires:_____ _____________________________
Notary Public
(SEAL)
STATE OF FLORIDA
COUNTY OF BROWARD
I, a Notary Public of the County and State aforesaid, certify that
Xxxxxxx X. Xxxxxxxxxx, President of Hotel Investors of Orlando, Inc., a Florida
corporation and general partner of WHB Hotel Corp., Ltd., a Florida limited
partnership, personally appeared before me this day and acknowledged the due
execution of the foregoing instrument. Witness my hand and seal, this the 14th
day of March, 1997.
My commission expires: 10/18/99 /s/ Xxxxx Xxxxxxx
--------------------------------
Notary Public
(SEAL)
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Schedule 1
Legal Description
BEING ALL of Unit 1 established by and pursuant to that certain
Declaration of Condominium of Capital Hotel Restaurant Group - A Condominium,
dated October 30, 1989, recorded in Official Records Book 4127, Page 4155,
Public Records of Orange County, Florida, as amended by the First Amendment
thereto dated November 6, 1989, recorded in Official Records Book 4149, Page
607, Public Records of Orange County, Florida (collectively "the Declaration"),
together with all of the rights, benefits and easements to which such Unit 1 is
entitled pursuant to the Declaration, and an undivided interest in and to the
Common Elements appurtenant to such Unit 1 as set forth in the Declaration and
membership in and to the Association defined in the Declaration, together with
all of the rights and benefits arising by virtue of membership in such
Association, subject to all of the responsibilities and obligations, including
the obligation for Common Expenses and assessments, as set forth in the
Declaration.
(Subject to change in accordance with the requirements of the Title Company
relative to the description of the Real Property.)
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Schedule 2
CONTRACTS
CONTRACTS BUSINESS AMOUNT TERM EXPIRES
--------- -------- ------ ------------
Brownie Quarterly Grease $200.00/cleaning 30 Day Notice
Trap Cleaning
Coca-Cola Vending Machine Vending Comm 30 Day notice
Copy Co. Copier Maint $693.00/yr-Prepaid 9/26/97
Entech Pest Control $220.00/mo 8/31/97-30 Day Notice
Firestone Roof Warranty N/C 4/25/2000
Xxxxxxx Xxxx Xxxxx Oil No Fee 6/2/98-30 Day Notice
Removal
Hemisphere Time Share Desk Income
$4,000.00/mo
Hotel Computers Computer $150.00/mo 30 Day Notice
Software
Lodgenet In-Room $619.00/mo 5/22/04
Entertainment +10% Comm
Xxxxxx Services Termite Control $713.00/yr 4/3/97
Annual Renewal
Miami Elevator Repair/Upkeep $225.00/mo 4/1/98
Muzak Lobby Music $43.00/mo 90 Day Notice
Sand Lake Commons Assoc. Dues $543.00/mo Indefinite
Simply Computers Computer $175.00/mo 30 Day Notice
Hardware
Xxxxxxx'x Landscaping Monthly Lawn $12,400.00/yr 8/1/97-30 Day Notice
Maintenance 10 Installments
Vending Services Coin Laundry 50% Commission 1/15/02
Visitel In-room TV Info N/C 60 Day Notice
Waste Management Trash Removal $612.50/mo 6/26/98-60 Day Notice
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Schedule 3
LEASES
CONTRACTS BUSINESS AMOUNT TERM EXPIRES
--------- -------- ------ ------------
Pitney Xxxxx Mail Machines $63./mo 1/10/98
Postage Scale
Auto Feeder
Meter Rental $162./qtr 90 day notice
Maintenance $156./yr 12/31/97
Contract-Mailing
Machine
Maintenance $173./yr 12/31/97
Scale
Maintenance $88./yr 12/31/97
Auto Feeder
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Schedule 4
Product Improvement Plan
AES Addenda for FL268
Franchisee agrees to make the following changes and additions to upgrade
the Hotel to meet the Franchisor's standards or to cure existing deficiencies
after entering the comfort suites System, in accordance with the following
schedule, at which time the property will be reinspected.
HSKP MCI Unit Cost Ext. Exp
---- --- ---- ---- --------
0 0 paint all railings 1 1,200.00 1,200.00
0 0 seal parking lot 1 7,500.00 7,500.00
0 0 increase exterior building lighting to improve 1 5,000.00 5,000.00
security
0 0 add glass door or window to the guest laundry room 1 300.00 300.00
door to allow view or guest laundry from outside
the laundry room for guest security
0 0 replace all damaged/fogged windows 50 150.00 7,500.00
0 0 install electronic locks 215 300.00 64,500.00
0 0 increase linen xxxx inventory to 3 changes per room 1 8,000.00 8,000.00
to include all xxxxx and bed linens
0 0 replace worn sofas 45 500.00 22,500.00
0 0 replace worn guest room chairs or recover chairs 50 45.00 2,250.00
0 0 replace sagging mattresses 100 300.00 30,000.00
0 0 replace damaged/rusted room lamps 50 75.00 3,750.00
0 0 repair desilvered vanity mirrors 100 35.00 3,500.00
0 0 replace worn bath floors 25 150.00 3,750.00
--- --- ----------
0 0 Grand Totals 159,750.00
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Schedule 5
Twelve Month Trailing Profit and Loss Statement
COMFORT SUITES ORLANDO
TRAILING 12 MONTHS DEPARTMENTAL SUMMARY
Mar-96 Apr-96 May-96 Jun-96 Jul-96 Aug-96 Sep-96 Oct-96 Nov-96 Dec-96 Jan-97 Feb-97 TOTAL
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ -----
PRELIM
Rooms Available 6665 6450 6665 6450 6665 6665 6450 6665 6450 6665 6665 6020 78,475
Rooms Occupied 6430 6112 5733 6268 6556 6228 4369 5687 4988 5103 5884 5821 69,179
Occupancy % 96.47% 94.76% 86.02% 97.18% 98.36% 93.44% 67.74% 85.33% 77.33% 76.56% 88.28% 96.69% 88.15%
ADR 58.09 55.86 48.79 52.14 55.35 51.68 49.70 49.97 50.35 54.16 59.15 62.53 53.96
REVPAR 54.12 52.93 41.97 50.67 54.44 48.29 33.67 42.64 38.96 41.49 52.22 60.46 47.59
REVENUES
Rooms Dept 360,679 341,393 279,737 326,829 362,864 321,871 217,158 284,170 251,316 276,499 348,028 363,995 3,734,539
Food Dept 6,883 6,400 5,435 5,946 4,857 3,888 2,326 4,044 3,809 2,648 5,044 7,520 68,800
Beverage Dept 6,491 7,708 7,295 6,960 5,276 5,706 4,723 6,347 5,852 3,407 6,025 7,070 72,860
Telephone Dept 9,632 8,613 7,068 7,863 5,910 7,819 5,910 8,042 6,695 6,893 7,479 6,984 88,908
Net Other Inc. 19,306 21,396 20,255 26,098 26,944 23,601 16,762 16,280 16,750 22,616 40,679 20,824 271,511
------------------------------------------------------------------------------------------------------------
TOTAL REVENUE 402,991 385,510 319,790 373,696 405,851 362,885 246,879 318,883 284,422 312,063 407,255 406,393 4,226,618
COST OF REVENUE
Rooms Dept 75,271 77,942 70,738 76,605 85,969 85,198 70,870 70,519 70,558 87,821 83,055 74,569 929,115
Food Depts 1,905 1,726 4,761 5,928 (822) 3,089 2,084 1,674 2,485 1,664 1,600 4,094 30,188
Beverage Depts 5,623 8,054 7,867 6,120 9,522 6,396 5,965 6,321 6,029 4,432 5,653 6,136 78,118
Telephone Dept 5,007 5,086 4,662 3,645 2,506 3,083 3,054 4,569 2,535 725 876 3,006 38,754
Choice Fees 3,367 4,550 4,148 3,069 3,944 4,481 3,807 1,984 3,106 2,532 2,973 4,224 42,185
------------------------------------------------------------------------------------------------------------
TOTAL COST OF REV 91,173 97,358 92,176 95,367 101,119 102,247 85,780 85,067 84,713 97,174 94,157 92,029 1,118,360
TOTAL OPERATING REV 311,818 288,152 227,614 278,329 304,732 260,638 161,099 233,816 199,709 214,889 313,098 314,364 3,108,258
UNDISTRIBUTED COST
Adm & General 32,980 30,865 31,674 35,773 28,855 35,026 31,560 29,266 27,871 59,384 38,065 37,453 418,772
Sales & Mktg 44,818 40,256 35,773 36,327 37,331 38,866 36,350 36,734 34,500 29,936 35,753 42,373 449,017
Energy/Util 18,819 17,153 17,336 19,039 21,537 24,487 19,670 18,336 17,059 16,707 18,797 18,095 227,035
Prop. Maintenance 16,934 12,177 17,049 15,705 19,375 22,576 27,532 17,415 15,968 19,680 12,738 14,506 211,655
------------------------------------------------------------------------------------------------------------
TOTAL UNDISTRIBUTED 113,551 100,451 101,832 106,844 107,098 120,955 115,112 101,751 95,398 125,707 105,353 112,427 1,306,479
GROSS PROFIT - OPER 198,267 187,701 125,782 171,485 197,634 139,683 45,987 132,065 104,311 89,182 207,745 201,937 1,801,779
49.20% 48.69% 39.33% 45.89% 48.70% 38.49% 18.63% 41.41% 36.67% 28.58% 51.01% 49.69% 42.63%
PROPERTY TAXES $ (121,307)
7% MGMT/RESERVE FEE $ (289,000)
NOI 1,391,472
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Schedule 6
The undersigned are all of the entities and individuals owning at least
a twenty five percent (25%) ownership interest in Seller and the undersigned
join in the execution hereof to acknowledge, consent and agree to the terms and
provisions of Paragraph C. of Article XVI of the Agreement to which this
Schedule 6 is attached and incorporated into.
/s/ Xxxxxxx X. Xxxxxxxxxx (SEAL)
-----------------------------
Xxxxxxx X. Xxxxxxxxxx,
Individually
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