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EXHIBIT 10.1
DRAFT September 24, 1996
( ---------- , ------ )
CONTRACT FOR PURCHASE OF REAL ESTATE
THIS CONTRACT FOR PURCHASE OF REAL ESTATE, is made as of the _____ day
of ________, 1996, by and between ______________ LIMITED PARTNERSHIP, an Indiana
limited partnership ("Seller"), and SIGNATURE INNS, INC., an Indiana corporation
("Purchaser") .
AGREEMENT
In consideration of the payment by Purchaser to Seller of Ten Dollars
($10) and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and the mutual covenants herein contained, Seller
and Purchaser agree as follows:
1. PURCHASE AND SALE. Purchaser hereby agrees to purchase from Seller
and Seller hereby agrees to sell to Purchaser the undivided interest as
tenant-in-common set forth on Schedule I attached hereto and made a part hereof
in and to the motel commonly referred to as Signature Inn ________________
located at ____________________, _______ County, ________________ (collectively,
the "Project") (the undivided interest in the Project which is being purchased
and sold hereunder being referred to herein as the "Transferred Interest" and
the undivided interest as tenant-in-common in the Project which will be retained
by Seller as of the Closing (as hereinafter defined), as such interest is set
forth on Schedule I, being referred to herein as the "Remaining Interest"),
which Project consists of (a) the real estate described in Exhibit A attached
hereto and made a part hereof (the "Real Estate"), together with all rights,
privileges, easements and interests appurtenant thereto, including, but not
limited to, any rights, title and interests in and to any streets or other
public ways adjacent to the Real Estate; (b) all improvements located on the
Real Estate, which shall include not less than _______________ (____) guest
rooms and suites and any and all amenities located on the Real Estate,
including, without limitation, any recreational facilities (all such
improvements being referred to herein as the "Improvements," and the Real Estate
and the Improvements being referred to herein collectively as the "Real
Property") (the undivided interest as tenant-in-common in and to the Real
Property being purchased and sold hereunder as part of the Transferred Interest
being referred to herein as the "Transferred Real Property Interest"); (c) all
personal property owned by Seller located on or in the Real Property or used in
connection with the operation or maintenance of the Real Property, including,
without limitation, all inventory, foodstuffs, alcoholic and non-alcoholic
beverages, furniture (including, without limitation, beds, nightstands, chests
of drawers, tables, chairs, lobby furniture and outdoor furniture), fixtures,
heating, plumbing, ventilating and air conditioning equipment, electrical
systems, elevators and other machinery, appliances (including, without
limitation, refrigerators, freezers, ice machines, stoves, ranges, and ovens) ,
vending machines, mini-bars, trade fixtures, office equipment and supplies,
tools and maintenance equipment and supplies, fuels, drapery shades and blinds,
lamps, chandeliers and other lighting fixtures, rugs, carpets, carpeting and
other floor coverings, sculptures and art work, landscaping, linen, case goods,
silverware, china, dishes, glassware, computer equipment and hardware, computer
software, telephones, telephone systems, televisions and radios and motor
vehicles, but excluding all cash and cash equivalents (whether on hand or in
reserve or other accounts maintained with third parties) (all such personal
property being referred to herein collectively as the "Tangible Personal
Property") (the undivided interest as tenant-in-common in and to the Tangible
Personal Property being purchased and sold hereunder as part of the Transferred
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Interest being referred to herein as the "Transferred Tangible Personal
Property Interest"); (d) all of Seller's rights and interests in all leases,
room rental agreements and other agreements pursuant to which Seller agrees to
provide accommodations in, or the use of, the Improvements, or any part thereof,
to guests, licensees or invitees on and after the Closing Date (as hereinafter
defined) (the "Rental and Guest Agreements"); (e) all of Seller's rights, title
and interests in and to the leases of equipment used in or relating to the
ownership, maintenance, use or operation of the Real Property (the "Equipment
Leases") and the contracts relating to the ownership, maintenance, use or
operation of the Real Property (the "Service Contracts") (the Equipment Leases
and the Service Contracts being referred to herein collectively as the
"Operations Contracts"); and (f) all of Seller's rights, title and interests in
and to all intangible property used or useful in connection with the foregoing,
including without limitation, all books, records, plans, specifications,
drawings and reports, and all contract rights, guarantees, licenses and permits
(including any liquor licenses and permits) and warranties (collectively, the
"Intangible Personal Property") (the undivided interest as tenant-in-common in
and to the Intangible Personal Property being purchased and sold hereunder as
part of the Transferred Interest being referred to herein as the "Transferred
Intangible Personal Property") (the Tangible Personal Property, Rental and Guest
Agreements, Operations Contracts, and Intangible Personal Property being
referred to herein collectively as the "Personal Property") .
On the Closing Date, immediately following the Closing, the
Remaining Interest will be conveyed to Purchaser, as the general partner of
Seller, as a liquidating distribution of Seller (the "Liquidating Distribution")
As a result of the sale and purchase of the Transferred Interest as
contemplated hereby and the Liquidating Distribution, immediately after the
Closing, Purchaser will own the Transferred Interest and the Remaining Interest
and therefore One Hundred Percent (100%) of the Project.
2. XXXXXXX MONEY. Concurrently with the execution of this
Contract, Purchaser is delivering xxxxxxx money in the amount of ____________
Dollars ($ ) (the "Xxxxxxx Money") to the Indianapolis office of Lawyers
Title Insurance Corporation (the "Title Company") . The Xxxxxxx Money shall be
held by the Title Company in escrow, subject to the terms and conditions
hereinafter set forth, and shall be invested in a time deposit of a federally
insured banking institution approved by Purchaser and Seller. The Xxxxxxx
Money, and any interest thereon, shall be applied to the obligation of
Purchaser at the Closing and shall be credited against any portion of the
Purchase Price (as hereinafter defined) payable in cash.
3. PURCHASE PRICE AND MANNER OF PAYMENT. The purchase price for the
Transferred Interest (the "Purchase Price") shall be an amount equal to
_____________________ Dollars ($_______) . The Purchase Price shall be paid at
the Closing as follows:
a. Purchaser will assume (i) the Transferred Interest's share of
the principal balance outstanding as of the Closing Date of the
Existing Financing (as hereinafter defined); and (ii) all accrued and
unpaid interest on the Existing Loan as of the Closing Date. For the
purposes hereof, the "Existing Loan" shall mean the loan described on
Schedule II attached hereto and made a part hereof (the "Existing
Financing") , which Existing Financing is secured by a first
mortgage/deed of trust lien on the Project (the "Existing Financing
Lien") . Because Purchaser will own the entire Project after its
acquisition of the Transferred Interest and the Remaining Interest,
Purchaser may enter into an assumption agreement at the Closing for One
Hundred Percent (100%) of the Existing Financing. If Purchaser enters
into such an agreement at the Closing, it will
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be deemed to have satisfied the requirement of this subparagraph (a);
and
b. Purchaser shall pay to Seller by wire transfer of federal funds,
the difference between the Purchase Price, as adjusted as provided
herein, and the amount of the Existing Loan, principal and interest,
assumed by Purchaser pursuant to Paragraph (a) (i) and (ii) above.
The Purchase Price shall be allocated among the Project assets in the manner set
forth in Schedule III hereto. Each party agrees that it will not take any
position that varies from or is inconsistent with such allocation in any filing
made by such party with the Internal Revenue Service or any other federal, state
or local governmental or regulatory authority.
The Purchase Price shall be increased by an amount equal to the Transferred
Interest's Share of all amounts held in escrow or reserve as of the Closing Date
by Seller, a lenders or any other party for the payment of taxes and insurance
or as a furniture, fixture and equipments reserve or other reserve for the
Project (the "Escrows") . Seller shall transfer the Transferred Interest's Share
of the Escrows to Purchaser at Closing.
4. CLOSING. The purchase and sale of the Transferred Interest shall be
closed on a date specified by Purchaser which is not earlier than five (5) days
after the date on which the conditions precedent set forth in Paragraph 5 (a) -
(f) have been fulfilled (or waived by Purchaser) and which is not later than
_______ , 1996.
The purchase and sale of the Transferred Interest shall be closed at
the offices of Johnson, Smith, Pence, Densborn, Xxxxxx & Heath, Xxx Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxx 00000, or at such other location as
may be mutually agreed to by the parties. The date and event of the consummation
of the purchase and sale of the Transferred Interest as contemplated hereby are
referred to herein, respectively, as the "Closing Date" and the "Closing."
5. CONDITIONS PRECEDENT TO CLOSING. Purchaser's obligations hereunder
shall be subject to the condition that as of the Closing Date there is no breach
of any of Seller's covenants, representations or warranties hereunder and to the
satisfaction of the following conditions precedent:
a. BUILDING DOCUMENTS. Within ______ ( ) days after the Effective
Date (as hereinafter defined) , Seller shall have furnished to
Purchaser the following documents (the "Building Documents") :
i. copies of architectural drawings and plans and
specifications for the Project in Seller's Possession (as
hereinafter defined);
ii. all Service Contracts, including, but not limited to, any
and all utility contracts, construction contracts and employment
and labor agreements, maintenance agreements (including, without
limitation, all janitorial, elevator, scavenger, laundry and
landscaping agreements) .
iii. all books and records and other documents relating to
the Project maintained by Seller or their agents in connection with
the ownership and operation of the Project in Seller's Possession
which Purchaser may reasonably require .
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iv. copies of all certificates of occupancy, licenses,
permits, authorizations and approvals (other than any such
certificates, licenses, permits, authorizations and approvals which
are no longer in effect) required by law as a condition to
occupancy of the Project or to any of its present uses or otherwise
issued with respect to the Project by any governmental authorities
having jurisdiction affecting the Project (the "Governmental
Approvals") , which are in Seller's possession.
v. copies of the xxxx or bills issued for the years 1994 and
1995 for real estate taxes and any special assessments and copies
of any subsequently issued notices pertaining to real estate taxes
or assessments applicable to the Project.
vi. copies of any engineering reports or other studies
(including inspection reports of governmental authorities or
insurance carriers) in Seller's Possession concerning the physical
condition and operation of the Project or recommended improvements
thereto .
vii. copies of any contracts entered into by Seller or its
agents for repairs or other work to be performed to the Project or
covering repairs or other work performed during the three (3) years
immediately preceding the Effective Date for a contract price in
excess of Ten Thousand Dollars ($10,000), which are in Seller's
Possession .
viii. copies of any reports or inspections of the Real
Property with respect to environmental, health or safety matters,
which are in Seller's Possession.
ix. such other documents as Purchaser may reasonably request
which are in Seller's Possession.
For purposes of this subparagraph 5(a), "Seller's Possession" shall
mean in Seller's actual possession or under Seller's reasonable control, or
reasonably available to Seller.
b. TITLE INSURANCE. Within _______ (____) days after the Effective
Date, Seller shall have furnished Purchaser, at Seller's expense, a commitment
for an owner's policy of title insurance (the "Title Commitment") issued by the
Title Company containing the agreement of the Title Company to issue an owner's
policy of title insurance (ALTA Form 1992) insuring fee simple title to the
Transferred Real Property Interest in the name of Purchaser upon delivery of a
limited warranty deed from Seller to Purchaser. The Title Commitment shall set
forth the state of title to the Real Estate together with all exceptions or
conditions to such title, including, but not limited to, all easements,
restrictions, rights-of-way, covenants, reservations and all other encumbrances
affecting the Real Estate which would appear in an owner's policy of title
insurance issued pursuant to the Title Commitment. Purchaser shall receive with
the Title Commitment, legible copies of the special exceptions set forth
therein. The Title Commitment shall contain the commitment of the Title Company
to insure such title to the Transferred Real Property Interest in Purchaser for
the full amount
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of the Purchase Price, shall contain the further agreement of the Title Company
to insure access from the Real Estate to a dedicated public right-of-way which
is contiguous to the boundary of the Real Estate, a 3.0 zoning endorsement
certifying that the Real Estate is zoned under the zoning ordinance of the
zoning jurisdiction in which the Property is located to permit the use of the
Real Property as a room motel.
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c. SURVEY. Within _______ (____) days after the Effective Date, Seller
shall have furnished Purchaser, at Seller's expense, a boundary survey of the
Real Estate prepared by a surveyor or engineer who is licensed by the
appropriate governmental authorities of the state in which the Real Estate is
located and who is acceptable to Purchaser (such boundary survey for the Real
Estate being referred to herein as the "Survey") , and certified as of a date
not more than ten (10) days prior to the date of delivery to Purchaser. The
Survey shall be prepared in accordance with Minimum Standard Detail Requirements
for Land Title Surveys jointly established and adopted by [the Indiana Land
Title Association] [ALTA and ACSM in 1992] , and shall certify that the Real
Estate is not located within a Special Flood Hazard Area. The Survey shall be
certified to Seller, Purchaser, and such other parties as Purchaser may request.
Within _____ (____) days after receipt by Purchaser of the Title
Commitment and the Survey, Purchaser shall advise Seller of any defect or
objections affecting the marketability of title to the Real Property or the use
of the Real Property as a motel, whether disclosed by the Title Commitment or
the Survey. Any item to which no objection is made by that date shall thereafter
be a "Permitted Exception." Purchaser agrees that the Existing Financing Lien
shall be a Permitted Exception, and that Purchaser shall not be entitled to
raise such Existing Financing Lien as a defect or objection affecting the
marketability of title to the Real Property, so long as no event of default is
continuing thereunder. If any objection is timely made, Seller shall endeavor to
satisfy the same within ______ (___) days after Seller's receipt of such
objection. If Seller fails to satisfy such objection within such _________ (___)
day period, Purchaser may, by written notice given to Seller within __________
(____) days after the expiration of such _______________ (____) day period,
terminate this Contract, in which event the Xxxxxxx Money, together with all
interest thereon, shall be returned to Purchaser, and neither Seller nor
Purchaser shall have any further rights, remedies or obligations hereunder.
Purchaser's failure to so terminate this Contract shall be deemed a waiver of
any objection not satisfied by Seller, other than objection to liens (other than
the Existing Financing Lien) that may be satisfied out of the Purchase Price at
Closing, and all such objections deemed waived shall thereafter constitute
Permitted Exceptions.
d. ADDITIONAL SIGNATURE INN PROJECTS. Within ___________ (_____) days
after the Effective Date (the "Additional Contract Deadline") , Purchaser shall
have entered into a binding contract (including and subject to terms and
conditions similar to those included herein) with the owner of each Signature
Inn project set forth on Schedule IV attached hereto and made a part hereof
(such projects being referred to herein singly, as an "Additional Signature Inn
Project," and collectively as the "Additional Signature Inn Projects") for the
acquisition by Purchaser of the interests in such Additional Signature Inn
Project set forth on Schedule IV (such interests being referred to herein singly
as an
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"Additional Signature Inn Interest," and collectively as the "Additional
Signature Inn Interests") . In the event Purchaser is unable to enter into such
a binding contract in respect of each Additional Signature Inn Interest by the
Additional Contract Deadline, Purchaser may terminate this Contract by written
notice given to Seller within ______ (____) days after the Additional Contract
Deadline. If Purchaser fails to terminate this Contract within such ___________
(______) day period, Purchaser shall be deemed to have waived the condition set
forth herein. In the event this Contract is so terminated, the Xxxxxxx Money,
together with all interest thereon, shall be returned to Purchaser, and neither
Seller nor Purchaser shall have any further rights, remedies or obligations
hereunder .
e. FINANCING. By no later than _______________, Purchaser shall have
obtained:
(i) the consent of the party holding the Existing Financing to the
assumption by Purchaser of the Transferred Interest's Share (as
hereinafter defined) thereof, which consent shall be upon terms and
conditions acceptable to Purchaser; and
(ii) a commitment for the funding of the amounts necessary to pay
Seller that portion of the Purchase Price payable in cash in accordance
with the terms of this Contract, which commitment shall be upon terms
and conditions acceptable to Purchaser.
f. INSPECTION. By no later than the Closing Date, Purchaser shall have
received, at its expense, a satisfactory inspection report describing the
physical condition of the Real Property .
In the event a condition set forth in Paragraph 5(e) or (f) is not
timely and completely satisfied, Purchaser may terminate this Contract by
written notice given to Seller within _________ (____) days after the date for
satisfaction of such condition. If Purchaser fails to terminate this Contract
within such _________ (____) day period, Purchaser shall be deemed to have
waived the respective condition. In the event this Contract is so terminated,
the Xxxxxxx Money, together with all interest thereon, shall be returned to
Purchaser, and neither Seller nor Purchaser shall have any further rights,
remedies or obligations hereunder .
Purchaser obligations hereunder shall be subject to the additional
condition that, by no later than the Closing Date, Purchaser shall have acquired
(or shall be acquiring simultaneously with the Closing) each Additional
Signature Inn Interest (other than Excluded Additional Signature Inn Interests
(as hereinafter defined) ) . If Purchaser does not so acquire each Additional
Signature Inn Interest (other than Excluded Additional Signature Inn Interests)
and such failure is not due to default by Purchaser under the contract in
respect thereof, Purchaser may terminate this Contract by written notice given
to Seller by the last day provided for the Closing pursuant to Paragraph 4
hereof. In the event this Contract is so terminated, the Xxxxxxx Money, together
with all interest thereon, shall be returned to Purchaser, and neither Seller
nor Purchaser shall have any further rights, remedies or obligations hereunder.
If Purchaser is unable to enter into a binding contract with respect to an
Additional Signature Inn Interest, but Purchaser does not terminate this
contract as a result thereof, such Additional Signature Inn shall thereafter be
deemed an "Excluded Additional Signature Inn Interest."
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6. CLOSING ADJUSTMENTS AND PRORATIONS.
a. TAXES AND ASSESSMENTS. All real estate and personal property taxes
assessed against the Project for years prior to the year of the Closing and all
penalties and interest thereon shall be paid by Seller. The Transferred
Interest's Share of all real estate and personal property taxes assessed against
the Project for the year of the Closing shall be prorated between Seller and
Purchaser as of the Closing Date on the basis of the exact number of days each
will own the Transferred Interest during the year of the Closing. If the amount
of such real estate and personal property taxes is not known at the Closing,
closing adjustments will be finally made on the basis of the most recent tax
rate and assessed valuation for the Project and, if the Real Property has been
taxed as part of a tax parcel including other real estate, a reasonable estimate
as to the allocation of taxes between the Real Property and such other real
estate. Purchaser shall have the right, in the name of Seller or Purchaser, to
contest or appeal any such tax or assessment. Immediately upon conveyance of the
Transferred Interest, Seller shall pay all state, county and city property
transfer taxes, documentary stamp taxes and gross income or adjusted gross
income taxes then due and payable in respect of the transfer hereby
contemplated. The Transferred Interest's Share of any taxes and assessments in
respect of the Project for the year of Closing shall be paid by Purchaser and
Purchaser will assume the same at Closing. Purchaser shall be allowed as a
credit against that portion of the Purchase Price payable in cash at the
Closing, the Transferred Interest's Share of the taxes and assessments in
respect of the Project for the year of Closing. The owner of the Remaining
Interest shall be liable for the Remaining Interest's Share of any taxes and
assessments in respect of the Project for the year of Closing .
b. RECORDING FEES. Seller shall pay all state, county and city
recording fees and costs related to the conveyance of the Transferred Interest
to Purchaser. Purchaser shall pay all recording costs and fees related to the
financing of the Transferred Interest, including any recording costs and fees
for the assignment and assumption agreement in respect of the Existing
Financing.
c. ROOM RENTALS. Seller shall be entitled to all guest room rental
charges, public room rental charges, food and beverage charges and other charges
and revenues derived from the operation of the Project ("Charges") for the
period prior to the Closing Date. Purchaser shall be entitled to the Transferred
Interest's Share of all Charges derived from the operation of the Project from
and after the Closing Date. The owner of the Remaining Interest shall be
entitled to the Remaining Interest's Share (as hereinafter defined) of all
charges derived from the operation of the Project on and after the Closing Date.
d. UTILITIES. Water, electricity, sewer, gas, cable television,
telephone and other utility charges shall be prorated based, to the extent
practicable, on the average monthly charges for such utilities over the twelve
months immediately preceding the month in which the Closing is held, and on the
basis of the actual number of days of the month which shall have elapsed as of
the Closing Date. Seller shall be responsible for all such charges for the
periods prior to the Closing Date. Purchaser shall be responsible for the
Transferred Interest's Share of such charges for the period on and after the
Closing Date. The owner of the
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Remaining Interest shall be responsible for the Remaining Interest's Share of
all such charges for the periods on and after the Closing Date.
e. OPERATIONS CONTRACTS. Amounts paid or payable under the Operations
Contracts shall be prorated as of the Closing Date on the basis of the actual
number of days of the month which shall have elapsed as of the Closing Date.
Seller shall be responsible for all such amounts payable for the period prior to
the Closing Date. Purchaser shall be responsible for the Transferred Interest's
Share of such amounts payable under the Operation's Contract for the period on
and after the Closing Date. The Owner of the Remaining Interest shall be
responsible for the Remaining Interest's Share of such amounts payable under the
Operation's Contract for the period on and after the Closing Date. At the
Closing, Purchaser, as the owner of the Transferred Interest and the Remaining
Interest, shall assume and agree to pay, perform and discharge, pursuant to an
Assignment and Assumption Agreement in a form reasonably satisfactory to Seller
and Purchaser (the "Assignment and Assumption") , all obligations accruing on
and after the Closing Date under the Operations Contracts (the "Assumed
Liabilities") .
f. EMPLOYMENT EXPENSES. All payroll, F.I.C.A., employee benefits and
employee-related taxes and accrued and unpaid vacation and sick pay for the
Project for the period prior to the Closing Date shall be paid by Seller in full
at or prior to the Closing, without contribution or proration from Purchaser.
g. MAINTENANCE ASSESSMENTS. All Maintenance Assessments (as hereinafter
defined) for years prior to the year of Closing and all penalties and interest
thereon shall be paid by Seller. The Transferred Interest's Share of any unpaid
Maintenance Assessments assessed against the Project for the year of Closing
shall be prorated between Seller and Purchaser as of the Closing Date on the
basis of the exact number of days each will own the Transferred Interest during
the year of Closing. If the amount of such Maintenance Assessments is not known
at the Closing, closing adjustments will be finally made on the basis of the
amount of the most recent Maintenance Assessments. Purchaser shall have the
right, in the name Seller or Purchaser, to contest or appeal any such
Maintenance Assessment. The Transferred Interest's Share of any unpaid
Maintenance Assessments for the year of it shall be paid by Purchaser, and
Purchaser will assume the same at Closing. Purchaser shall be allowed as a
credit against that portion of the Purchase Price payable in cash at the
Closing, the amount so assumed. The owner of the Remaining Interest shall be
liable for the Remaining Interest's Share of any unpaid Maintenance Assessments
for the year of Closing. For the purposes hereof, "Maintenance Assessments"
shall mean all amounts payable by Seller, as the owner of the Project, under any
declaration, easement or other agreement for the maintenance, repair or use by
the Project of any road, street sign, easement, utility (including any storm
sewer or sanitary sewer) , common area or other area.
h. ESCROW. The Transferred Interest's share of all amounts held in
escrow or reserve for the Project (the "Escrowed Amounts") , including, without
limitation amounts escrowed for taxes and insurance, and furniture, fixture and
equipment reserves, whether held by the lender of the Existing Financing or any
other party, shall be transferred to Purchaser at the Closing. The Purchase
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Price shall be increased by the amount of any Escrowed Amounts so transferred to
Purchaser.
i. ADDITIONAL ITEMS. Such other items that are customarily prorated
in transactions of this nature shall be ratably prorated.
For the purposes hereof, the "Transferred Interest's Share" shall be a
fraction which is equal to the undivided interest in the Project described on
Schedule I attached hereto being sold to, and purchased by, Purchaser pursuant
to this Contract, and the " Remaining Interest's Share" shall be a fraction
which is equal to the undivided interest in the Project described on Schedule I
attached hereto which is not sold under this Contract. Seller and Purchaser
acknowledge and agree that any reference herein to the owner of the Remaining
Interest shall be a reference to Purchaser after the Closing. For purposes of
calculating prorations under this Contract, Purchaser shall be deemed to be in
title to the Transferred Interest and the Remaining Interest, and therefore
entitled to the income in respect thereof and responsible for the expenses in
respect thereof, for the entire day upon which the Closing occurs. Bills
received after the Closing which relate to expenses incurred, services performed
or other amounts allocable to the period prior to the Closing Date shall be paid
by Seller, except to the extent this Contract otherwise provides.
All credits to Purchaser from the closing adjustments and prorations
described above or elsewhere in this Contract shall reduce the cash portion of
the Purchase Price payable at the Closing and all credits to Seller from the
closing adjustments and prorations described above or elsewhere in this Contract
shall increase the cash portion of the Purchase Price payable at the Closing.
Any accounts receivable for Charges accruing prior to the Closing Date (all
accounts receivable for Charges accruing prior to the Closing Date being
referred to herein as "Pre-Closing Accounts Receivable") , shall remain the sole
property of Seller and Purchaser shall have no rights, title or interests
therein. In no event shall any adjustment be made to the Purchase Price as a
result of uncollectible Pre-Closing Accounts Receivable. All costs, expenses,
bills and other obligations relating to the operation of the Project which are
incurred or accrued through the day immediately preceding the Closing Date shall
be the obligation of Seller.
Except as set forth in Paragraph 3 (a) hereof and Paragraph 6 (a) ,
6(e) and 6(f) hereof, Purchaser shall not assume any indebtedness, obligations,
commitments or liabilities of Seller of any nature whatsoever, including,
without limitation (a) any obligation for federal, state and local income taxes
incurred by Seller or arising out of transactions entered into or any state of
facts existing at or prior to the Closing or arising out of or incident to the
sale of the Transferred Interest to Purchaser; (b) any obligation or liability
relating to the Project imposed under any law relating to the environment,
health or safety, and arising out of any act, event or condition occurring or
existing prior to the Closing; (c) the obligations and liabilities of Seller
imposed hereunder and under any other documents delivered by Seller at the
Closing; and (d) any obligations and liabilities of Seller in respect of any and
all present and former employees of the Project, including, without limitation,
liabilities and obligations for (x) all disability income; unemployment
benefits; workers' compensation claims and benefits; (y) all benefits and
liabilities under any employee benefit plans (within the meaning of Section 3(3)
of the Employee Retirement Income Securities Act of 1974, as amended) ,
programs, or arrangements maintained by or contributed to by Seller; and (z)
violations by Seller of the Immigration Reform and Control Act of 1986,
including Form 1-9 requirements. Purchaser agrees solely for the benefit of
Seller, but not for the benefit of any other person, that the Assumed
Liabilities shall be paid and discharged in accordance with the terms thereof,
provided that Purchaser may in good faith contest any Assumed Liability. Seller
agrees, solely for the benefit of Purchaser but not for the benefit of any other
person, that any liabilities or
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obligations of Seller not included in the Assumed Liabilities will be paid and
discharged by Seller in accordance with the terms thereof, provided that Seller
may in good faith contest any such liability or obligation.
7. INSPECTIONS. Purchaser and its employees, agents, contractors and
engineers shall, upon reasonable notice to Seller, have the right to enter the
Project at any time and from time to time for purposes of inspecting, surveying,
making engineering studies and geotechnical and soil tests of the same and
making such other investigations and tests as Purchaser deems necessary or
desirable. Purchaser shall repair any damage incurred or arising in connection
with inspections or work performed by Purchaser, its agents, contractors or
engineers pursuant to the provisions of this Paragraph 7 and Purchaser shall
indemnify Seller against any losses, claims, damages or liabilities arising from
any such inspections or work. Such indemnity shall be deemed to include the
payment of reasonable attorneys' fees and court costs incurred in defending any
such claim and shall survive any rescission or termination of this Contract.
8. RISK OF LOSS: CONDEMNATION. Until the purchase and sale of the
Transferred Interest is consummated at the Closing, the risks of ownership and
loss of the Project shall be borne by Seller.
In the event the Project or any part thereof is taken by condemnation
or other exercise of the power of eminent domain prior to the Closing, Purchaser
shall have the option to:
a. Require Seller to convey to Purchaser in accordance with the
terms of this Contract the Transferred Interest in and to that part of
the Project not taken and assign to Purchaser, as the owner of the
Transferred Interest and the Remaining Interest, all condemnation
proceeds payable in respect of that part of the Project taken; or
b. If the taking materially adversely affects the use of the
Project or reduces the number of rooms or parking spaces, terminate
this Contract.
Seller shall promptly notify Purchaser of any condemnation or eminent domain
proceeding affecting the Project of which it receives notice.
If, prior to the Closing, any portion of the Project is damaged or
destroyed to a "material" (as hereinafter defined) extent, Seller shall give
Purchaser prompt written notice thereof, and Purchaser may, at its option,
terminate this Contract by delivery to Seller of written notice of such
termination within fourteen (14) days after receipt of notice of such damage or
destruction. If damage or destruction occurs within fourteen (14) days prior to
the Closing, the Closing shall be extended to the date which is fourteen (14)
days after the occurrence of such damage or destruction. Upon receipt of such
notice of termination, the Xxxxxxx Money, together with all interest thereon,
shall be returned to Purchaser, and the parties shall have no further rights,
remedies or obligations hereunder. If Purchaser elects not to so terminate this
Contract, then: (a) the Closing shall take place as provided in this Contract;
(b) Seller shall assign to Purchaser, as the owner of the Transferred Interest
and the Remaining Interest, all of Seller's rights with respect to the
settlement of all insurance proceeds receivable in respect of such damage or
destruction; and (c) Purchaser shall receive credit at the Closing against the
Purchase Price in an amount equal to the Transferred Interest's Share of
applicable insurance deductibles After the Closing, Purchaser shall have the
exclusive right to settle the loss and shall receive all proceeds of the
insurance covering the Improvements so damaged or destroyed, if a settlement of
insurance proceeds has not occurred. If any amounts remain after the complete
restoration of the Project, Purchaser shall be entitled to the Transferred
Interest's Share of such
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remainder and the owner of the Retained Interest shall be entitled to the
Retained Interest's Share of such remainder.
If, prior to the Closing, any portion of the Project is damaged or
destroyed, but such damage or destruction is not "material," Seller shall give
Purchaser prompt written notice thereof and shall use its best efforts to
restore, prior to the Closing, the Project to its previous condition. If Seller
is unable to complete said restoration prior to the Closing, Purchaser shall be
entitled to elect by written notice to Seller either (a) to receive credit at
the Closing for the entire cost of restoration of the Project, or (b) to accept
an assignment from Seller to Purchaser of all of Seller's rights with respect to
the settlement of all insurance proceeds receivable in respect of such damage or
destruction and to receive credit at the Closing equal to the Transferred
Interest's Share of all insurance deductibles therefrom. If Purchaser elects the
option set forth in clause (b) of this subparagraph, until the settlement of
loss there shall be retained in escrow out of the proceeds at the Closing such
sum as the parties shall agree upon as sufficient to pay the Transferred
Interest's Share of the estimated cost of fully repairing and rehabilitating
such damaged or destroyed Project (and to pay all indirect and incidental costs
and expenses) . Upon ascertainment of the actual cost of repairs and
rehabilitation and receipt of the insurance proceeds an appropriate refund shall
be made to Seller of any excess sum in said escrow which was not required to
complete the work. In the event Purchaser elects the option set forth in clause
(a) of this subparagraph, Seller shall be entitled to retain all insurance
proceeds with respect to such damage or destruction.
For purposes of this Paragraph 8, "material" shall mean damage to or
destruction of the Project for which the aggregate estimated cost of repair,
restoration and rehabilitation (including all indirect and incidental costs and
expenses) is in excess of Twenty Five Thousand Dollars ($25,000) .
9. POSSESSION OF THE PROJECT; TERMINATION OF EMPLOYEES. Possession of
the Project shall be delivered by Seller to Purchaser at the Closing, free and
clear of the rights of any other party to possession thereof (excluding the
rights of the owner of the Retained Interest as a tenant-in-common with
Purchaser and excluding the rights of guests under Rental and Guest Agreements).
Upon delivery of possession to Purchaser, the Project shall be in the same
condition as it is on the date hereof, ordinary wear and tear excepted.
Effective as of 12:01 a.m. on the Closing Date of all of the employees of Seller
at the Project will be terminated.
10. SELLER'S OBLIGATIONS AT CLOSING. At the Closing, Seller agrees to
deliver to Purchaser in accordance with the terms of this Contract the
following:
a. an owner's policy of title insurance issued by the Title Company
(the "Title Policy") with an effective date as of the Closing Date in
the amount of the Purchase Price, which shall insure fee simple,
indefeasible title in and to the Transferred Real Property Interest in
the name of Purchaser as legal owner, subject only to the Permitted
Exceptions. The Title Policy shall be issued on ALTA Form 1992, shall
certify in a form 3.0 zoning endorsement the zoning of the Real
Property as of the Closing Date and shall insure access from the Real
Property to a dedicated public right-of-way which is contiguous to the
boundary of the Real Estate. All standard pre-printed exceptions shall
be deleted from such Title Policy. Any closing fee charged by the Title
Company to issue the Title Policy with an effective date as of the
Closing Date and the use of its personnel and facilities shall be paid
one-half (1/2) by Seller and one-half (1/2) by Purchaser. All other
costs in respect of the Title Policy shall be borne by Seller. The
requirement set forth in this Section 10(a) shall be deemed to be
satisfied if, at
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the Closing, the Title Company issues to Purchaser an owner's policy of
title insurance which insures fee simple, indefeasible title to the
entire Real Property; provided, however, in no event shall Seller be
required to bear any greater cost for such title policy than it would
be required to bear hereunder for the Title Policy;
b. A duly authorized and executed Limited Warranty Deed in
recordable form conveying good and marketable title to the Transferred
Interest, free and clear of all liens, claims, encumbrances, security
interests or other defects in title, other than Permitted Exceptions
(including the Existing Loan, the Transferred Interest's Share in which
Purchaser will assume in such deed);
c. A xxxx of sale executed by Seller conveying and assigning title
to the Transferred Tangible Personal Property Interest and Intangible
Personal Property Interest to Purchaser free and clear of all liens,
claims, encumbrances or security interests or other defects in title;
d. A duly authorized and executed Affidavit in the form required by
the Title Company to provide extended coverage under the Title Policy;
e. A duly authorized and executed Assignment and Assumption and an
assignment of all Governmental Approvals and Building Documents, and
Escrows;
f. A duly authorized and executed affidavit in a form reasonably
satisfactory to Purchaser stating that Seller is not a "Foreign Person"
as such term is used in Section 1445 of the Internal Revenue Code;
g. A duly authorized and executed sales disclosure statement, as
required by I.C. 6-1.1-5.5, et seq, which allocates the Purchase Price
between the Transferred Real Property Interest and the Transferred
Personal Property Interest as set forth on Schedule III (the "Sales
Disclosure Statement");
h. Evidence that all employees of Seller at the Project have been
terminated as of 12:01 a.m. on the Closing Date.
i. Such other documents relating to Seller's authorization,
existence, and organization as Purchaser or the Title Company may
reasonably require and such other documents as are contemplated by this
Contract.
All of the documents and instruments required pursuant to this
Paragraph 10 or otherwise in connection with the consummation of this Contract
shall be in a form and manner reasonably satisfactory to Purchaser's and
Seller's counsel.
11. PURCHASER'S OBLIGATIONS AT CLOSING. At the Closing, Purchaser
agrees to deliver to Seller in accordance with the terms of this Contract the
following:
a. the Assignment and Assumption;
b. the amount of the Purchase Price payable under Paragraph 3 (b)
above, subject to the Closing adjustments and prorations provided for
herein;
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c. an assignment and assumption with the holder of the Existing
Financing pursuant to which Purchaser assumes the Transferred Interests
Share of the Existing Financing; and
d. a duly authorized and executed Sales Disclosure Statement .
12. SELLER'S COVENANTS. Seller covenants and agrees:
a. Seller shall not enter into any new undertakings or agreements
relating to the management, financing or maintenance of the Project,
other than the agreements entered into the ordinary course of Seller's
operation and management of the Project which do not create or permit a
lien or interest in the Project and will not survive the Closing,
without the prior written approval of Purchaser, which approval shall
not be unreasonably withheld.
b. Seller shall continue to operate and maintain the Project in the
same manner that Seller has operated and maintained the Project during
its ownership, which includes maintaining the Project in such a manner
that all rooms in the Project are habitable in accordance with state
and local laws, and complying with the provisions of all Service
Contracts and other agreements to which it is a party or by which it is
bound and all applicable laws, ordinances, rules and regulations which
affect the Project.
c. Seller shall maintain all insurance on the Project that is in
effect as of the date hereof.
d. Seller shall not remove any Personal Property from the Project
unless such Personal Property is replaced with personal property of
like kind and like value.
e. Seller shall not, after the date of this Contract and prior to
the Closing, enter into any contract, agreement or option granting to
any party the right to purchase the Property or alienate, lien,
encumber or otherwise transfer the Project, any part thereof or any
interest therein, except in connection with a refinancing of the
indebtedness presently on the Project.
13. REPRESENTATIONS AND WARRANTIES. As a material inducement to
Purchaser for entering into this Contract, Seller hereby represents and warrants
to Purchaser as follows:
a. Seller is a limited partnership duly organized and validly
existing under the laws of the State of Indiana [and is duly qualified
to do business in the State of ______________ as a foreign
-------------- ];
b. Seller has the power and authority to enter into and perform its
obligations under this Contract and all necessary action has been taken
to authorize Seller's execution and performance of this Contract and
the consummation of the transactions herein contemplated;
c. Seller owns good, marketable and indefeasible fee simple title
to the Real Property free and clear of all liens, encumbrances,
security interests or other defects in title, other than Permitted
Exceptions; and
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d. Seller owns good and marketable title to the Personal Property
free and clear of all liens, encumbrances, security interests or other
defects in title, other than Permitted Exceptions .
Each of the foregoing representations and warranties shall be and
remain true at and as of the Closing Date.
14. DEFAULT. In the event the purchase and sale contemplated by this
Contract is not consummated due to the breach hereof or default hereunder by
Purchaser and such breach or default shall not have been cured by Purchaser
within thirty (30) days (or such additional time as may be reasonably necessary
to cure any non-payment default) after delivery by Seller of written notice
thereof to Purchaser, then the Xxxxxxx Money shall be forfeited to Seller as
full liquidated damages and Seller shall have no further rights to a claim for
damages, specific performance or otherwise, and this Contract shall be of no
further force or effect.
In the event the purchase and sale contemplated by this Contract is not
consummated due to the breach hereof or default hereunder by Seller, or if any
representation or warranty made herein by Seller is untrue or breached as of the
Closing Date, then, after notifying Seller in writing of such breach, default or
misrepresentation and allowing Seller thirty (30) days (or such additional time
as may be reasonably necessary) to cure, the Xxxxxxx Money, together with all
interest earned thereon, shall be returned immediately to Purchaser, and
Purchaser may avail itself of any and all remedies at law or in equity,
including, but not limited to, a suit for specific performance of this Contract
or for damages for the breach of this Contract or any of the representations or
warranties set forth herein.
15. USE OF BROKERS. Purchaser represents and warrants to Seller that it
has contracted with no real estate broker, finder or other person with respect
to this Contract or the transactions contemplated hereby; and, insofar as it
knows, no real estate broker or other person claiming through Purchaser is
entitled to any commission or finder's fee in any such connection. Seller
represents and warrants to Purchaser that it has neither contracted nor dealt
with any real estate broker, finder or other person with respect to this
Contract or the transactions contemplated hereby; and, insofar as it knows, no
other real estate broker or other person claiming through Seller is entitled to
any commission or finder's fee in any such connection. Seller and Purchaser each
agree to indemnify and hold harmless one another against any loss, liability,
damage or claim incurred by reason of any brokerage commission or finder's fee
alleged to be payable because of the indemnifying party's representation in this
Paragraph 15 being untrue. Such indemnity obligation shall be deemed to include
the payment of reasonable attorneys' fees and court costs incurred in defending
any such claim.
16. NOTICES. All notices, requests, demands, consents and other
communications required or permitted under this Contract shall be in writing and
shall be deemed to have been duly and properly given on the date of service if
delivered personally or on the date of mailing if deposited in a receptacle of
the United States mail, first class postage prepaid, addressed appropriately as
follows :
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If to Seller: _______________________________
000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxx Crossing
Indianapolis, IN 46240
Attention: Xxxx X. Xxxxxxxxx
With a copy to: Xxxxxx Xxx, Esquire
Xxxxxx & Xxxxxxxxx
00 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
If to Purchaser: Signature Inns, Inc.
000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxx Xxxxxxxx
Xxxxxxxxxxxx, XX 00000
With a copy to: Xxxxxx X. Xxxxxxx, Esquire
Johnson, Smith, Pence, Densborn,
Xxxxxx & Xxxxx
Xxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Either party may change its address for purposes of this Paragraph 16 by giving
the other party written notice of the new address in the manner set forth above.
17. ASSIGNMENT. Purchaser may assign its interest in this Contract to
any person or entity which is an affiliate of Purchaser or may nominate any such
person or entity to receive title to the Transferred Interest pursuant to this
Contract. Except as provided in the preceding sentence, neither party may assign
its interest in this Contract without the prior written consent of the other
party.
18. BINDING ON SUCCESSORS. This Contract shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
representatives, successors and permitted assigns.
19. GOVERNING LAW. This Contract shall be governed by and construed in
accordance with the laws of the State of Indiana.
20. COUNTERPARTS. This Contract may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
21. MODIFICATION. This Contract may not be changed or modified except
by an agreement in writing signed by the party sought to be charged with such
modification.
22. WAIVER. No failure on the part of either party to exercise any
power or right given hereunder or to insist upon strict compliance with any
obligations specified herein, and no custom or practice at variance with the
terms hereof, shall constitute a waiver of either party's right to demand exact
compliance with the terms hereof; provided, however, that either party may, at
its sole option, waive in writing any requirement, covenant or condition herein
established for the benefit of such party without affecting any of the other
terms or provisions of this Contract. No delay on the part of either party in
the exercise of any power or right hereunder shall operate as a waiver thereof
nor shall any single or partial exercise of any power or right preclude other or
further exercise thereof or the exercise of any other power or right. All rights
and remedies existing under this Contract shall be cumulative and shall be in
addition to those otherwise provided by law.
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23. RECORDING OF CONTRACT. In the event Seller or Purchaser desires to
record this Contract, the parties agree to execute for recording purposes a
memorandum thereof indicating the parties to this Contract and a legal
description of the Real Estate, but omitting the payment provisions and other
terms hereof, notice of which is not required to protect the respective
interests of the parties hereto as against third persons. Purchaser shall bear
the cost of the preparation and recording of any such memorandum.
24. ENTIRE AGREEMENT. This Contract constitutes the entire agreement
among the parties hereto and supersedes all prior discussions, letters of
intent, agreements, writings and representations between Seller and Purchaser
with respect to the Transferred Interest and the transaction contemplated
herein.
25. LIMITED PARTNERSHIP APPROVAL. The rights and obligations hereunder
of Purchaser and Seller and the effectiveness of this Contract shall be subject
to the condition that a Majority (as such term is defined in the Partnership
Agreement of Seller) of the limited partners of Seller shall have approved the
transaction contemplated hereby and the execution hereof by the general partner
of Seller. Seller shall notify Purchaser in writing immediately upon the
determination of the approval or non-approval by the Majority of the limited
partners of Seller of the transaction contemplated hereby. In the event such
approval is not obtained by _______________, the Xxxxxxx Money shall be returned
to Purchaser and neither Seller nor Purchaser shall have any further rights,
remedies or obligations hereunder. In the event such approval is obtained, the
date upon which Purchaser receives notice from Seller of such approval shall be
referred to herein as the "Effective Date."
IN WITNESS WHEREOF, Purchaser and Seller have executed this Contract as
of the date first hereinabove written.
"SELLER"
___________________PARTNERSHIP ,
an Indiana limited partnership
By: Signature Inns, Inc., an Indiana corporation,
Its General Partner
By: _________________________________
Printed : ___________________________
Title : _____________________________
"PURCHASER"
SIGNATURE INNS, INC., an Indiana corporation
By: _____________________________________________
Printed : _______________________________________
Title : _________________________________________
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DESCRIPTION OF REAL ESTATE
Exhibit A
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TRANSFERRED INTEREST
Purchaser is purchasing an undivided ___________ interest as
tenant-in-common in and to the Project.
RETAINED INTEREST
Seller is retaining an undivided _____________ interest as
tenant-in-common and to the Project.
SCHEDULE I
