EXHIBIT 1.2
ESCROW AGREEMENT
(APPLE HOSPITALITY TWO, INC.)
THIS ESCROW AGREEMENT, dated as of , 2001 ("Escrow Agreement"), is by
and among XXXXX XXXXXX ASSOCIATES, INC., a New York corporation ("Agent"); APPLE
HOSPITALITY TWO, INC., a Virginia corporation ("Company"); and FIRST UNION
NATIONAL BANK, a national banking association, as Escrow Agent hereunder
("Escrow Agent").
BACKGROUND
Company has engaged Agent to sell up to 20,111,111 Common Shares, no
par value (the "Shares"), with a minimum required investment of $5,000 in Shares
($2,000 in Shares in the case of Qualified Plans) at a price of $9.00 per Share
until the Minimum Offering of 1,111,111 Shares ($10,000,000) is achieved and
thereafter $10.00 per Share on a "best efforts" basis, pursuant to Registration
Statement No. 333-________ filed with the Securities and Exchange Commission
(the "SEC") which includes a Prospectus, as supplemented and amended from time
to time (the "Offering Document").
In accordance with the Offering Document, subscribers to the Shares
(the "Subscribers" and individually, a "Subscriber") will be required to submit
full payment for their respective investments in the manner set forth in their
subscription agreements.
In accordance with the Offering Document, all payments received by
Agent on or before sale of the Minimum Offering amount (as defined in the
Offering Document) in connection with subscriptions for Shares shall be promptly
forwarded to Escrow Agent, and Escrow Agent has agreed to accept, hold, and
disburse such funds deposited with it and the earnings thereon in accordance
with the terms of this Escrow Agreement.
In order to establish the escrow of funds and to effect the provisions
of the Offering Document, the parties hereto have entered into this Escrow
Agreement.
STATEMENT OF AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, for
themselves, their successors and assigns, hereby agree as follows:
Definitions. The following terms shall have the following meanings when used
herein:
"Agent" shall mean Xxxxx Xxxxxx Associates, Inc., and/or any
selected dealer participating at a later date.
"Cash Investment" shall mean the number of Shares to be
purchased by any Subscriber multiplied by the offering price per share of $9.00
until the Minimum Offering is achieved and thereafter $10.00 as set forth in the
Offering Document. Cash Investments shall not include any interest or other
earnings thereon.
"Cash Investment Instrument" shall mean a check, money order
or similar instrument, made payable to "First Union National Bank, Escrow
Agent," or funds wired to Escrow Agent directed in the manner described in
Section 3 and referencing the Agent's account number in full payment for the
Shares to be purchased by any Subscriber or Subscribers.
"Escrow Funds" shall mean the funds deposited with Escrow
Agent pursuant to this Agreement, consisting of (1) the Cash Investments, and
(2) any interest and other earnings thereon.
"Minimum Offering" shall mean the sale of $10,000,000 in
Shares at $9.00 per Share (1,111,111 Shares) by the Company in the offering made
by the Offering Document.
"Shares" shall have the meaning set forth in the section of
this Escrow Agreement titled "Background."
"Subscriber" or "Subscribers" shall have the meaning set forth
in the section of this Escrow Agreement titled "Background."
Appointment of and Acceptance by Escrow Agent. Company and Agent hereby
appoint Escrow Agent to serve as escrow agent hereunder, and Escrow Agent hereby
accepts such appointment in accordance with the terms of this Escrow Agreement.
Deposits into Escrow
Procedures for Deposits. Upon receipt by Agent of any Cash Investment
Instrument for the purchase of Shares, Agent shall forward to Escrow Agent the
Cash Investment Instrument for deposit into the following escrow account, or
shall wire to Escrow Agent funds aggregating the Cash Investments of one or more
Subscribers for deposit in the following escrow account:
First Union National Bank, Escrow Agent
Charlotte, North Carolina
ABA # 000000000
[Account # 5000000016439
ATTN: Xxxxx Xxxxxxxx]
for Apple Hospitality Two, Inc. Escrow Account
Notify (000) 000-0000
The Escrow Agent is under no obligation to accept deposits from anyone
other than the Agent. If a deposit is received by 12:00 P.M. on a given business
day, it will be accepted that business day; otherwise it will be accepted on or
as of the next business day, except that a wire of funds will be deemed to be
received on the actual day of receipt.
ALL FUNDS SO DEPOSITED SHALL REMAIN THE PROPERTY OF THE SUBSCRIBERS
ACCORDING TO THEIR RESPECTIVE INTERESTS AND SHALL NOT BE SUBJECT TO ANY LIEN OR
CHARGE BY ESCROW AGENT OR BY JUDGMENT OR CREDITORS' CLAIMS AGAINST COMPANY UNTIL
RELEASED TO COMPANY IN ACCORDANCE WITH SECTION 4(a) HEREOF.
Deposits Subject to Collection. Agent and Company understand and agree
that all checks and similar instruments received by Escrow Agent hereunder are
subject to collection requirements of presentment and final payment, and that
the funds represented thereby cannot be drawn upon or disbursed until such time
as final payment has been made and is no longer subject to dishonor. Upon
receipt, Escrow Agent shall, as appropriate, process each Cash Investment
Instrument for collection, and the proceeds thereof shall be held as part of the
Escrow Funds until disbursed in accordance with Section 4 hereof. If, upon
presentment for payment, any Cash Investment Instrument is dishonored, Escrow
Agent's sole obligation shall be to notify Agent of such dishonor and to return
such Cash Investment Instrument to Agent to take whatever action it deems
necessary. Notwithstanding the foregoing, if for any reason any Cash Investment
Instrument is uncollectible after payment of the funds represented thereby has
been made by Escrow Agent, the party receiving such funds shall immediately
reimburse Escrow Agent upon receipt from Escrow Agent of written notice thereof.
Upon receipt of any Cash Investment Instrument that represents payment
of less than or greater than the Cash Investment, Escrow Agent's sole obligation
shall be to notify Company and Agent of such fact and to return such Cash
Investment Instrument to Agent.
Form of Instruments. All Cash Investment Instruments shall be made
payable to the order of, or endorsed to the order of, "First Union National
Bank, Escrow Agent" and Escrow Agent shall not be obligated to accept, or
present for payment, any Cash Investment Instrument that is not payable or
endorsed in that manner, but this paragraph shall not apply in the case of a
direct wire of funds into the escrow account as described in Section 3.
Disbursements of Escrow Funds.
Generally. Subject to the provisions of Section 10 hereof, Escrow Agent
shall pay to Company the liquidated value of the Cash Investments (excluding,
however, any interest or other earnings on Cash Investments), by certified or
bank check or by wire transfer, no later than three (3) days following receipt
of the following documents:
(1) A request in writing from the Company for
disbursement, including a statement that the
conditions, if any, to disbursement described in
the Offering Document have been satisfied; and
(2) Such other certificates and notices as Escrow
Agent shall reasonably require.
Interest. At such time or times as amounts comprising the Cash
Investment portion of the Escrow Funds are paid to Company pursuant to Section
4(a) of this Escrow Agreement, Escrow Agent shall simultaneously pay to Agent
the portion of the Escrow Funds comprising interest and other earnings on the
Cash Investments. At the time of such payments, Escrow Agent shall also deliver
to Agent a notice (the "Earnings Notice") showing in reasonable detail the rate
or rates at which interest or other earnings were earned on Cash Investments
during the period such Cash Investments were held by Escrow Agent and the period
or periods during which such rate or rates applied. Such interest and other
earnings shall thereafter promptly be paid by Agent to Subscribers in a manner
determined by Agent to be consistent with the Offering Document.
Rejection of Any Subscription or Termination of the Offering. No later
than five (5) business days after receipt by Escrow Agent of written notice (1)
from Company or Agent that Company intends to reject a Subscriber's
subscription, or (2) that a subscriber has revoked his subscription, or (3) from
the SEC or any other federal or state regulatory authority that a stop order has
been issued with respect to the Offering Document and has remained in effect for
at least twenty (20) days, Escrow Agent will, upon written instructions given by
the Company, transmit to Agent that portion of the Escrow Funds attributable to
such subscriber or subscribers affected by such event, or equal to the amount of
the reduction in a subscription, as the case may be, with interest, and Agent
shall promptly deposit such funds directly to the account of the Subscriber or
Subscribers entitled thereto, together with an Earnings Notice of the type
described in Section 4(b).
Suspension of Performance or Disbursement Into Court. If, at any time,
there shall exist any dispute between Agent, Company, Escrow Agent, any
Subscriber or any other person with respect to the holding or disposition of any
portion of the Escrow Funds or any other obligations of Escrow Agent hereunder,
or if at any time Escrow Agent is unable to determine, to Escrow Agent's sole
satisfaction, the proper disposition of any portion of the Escrow Funds or
Escrow Agent's proper actions with respect to its obligations hereunder, or if
Agent and Company have not within 30 days of the furnishing by Escrow Agent of a
notice of resignation pursuant to Section 7 hereof appointed a successor Escrow
Agent to act hereunder, then Escrow Agent may, in its sole discretion, take
either or both of the following actions:
Suspension of Performance. Suspend the performance of any of its
obligations under this Escrow Agreement until such dispute or uncertainty shall
be resolved to the sole satisfaction of Escrow Agent or until a successor Escrow
Agent shall have been appointed (as the case may be); provided however, that
Escrow Agent shall continue to invest the Escrow Funds in accordance with
Section 6 hereof; and/or
Court Proceeding. Petition (by means of an interpleader action or any
other appropriate method) any court of competent jurisdiction in Charlotte,
North Carolina, for instructions with respect to such dispute or uncertainty,
and pay into such court all funds held by it as Escrow Funds for holding and
disposition in accordance with the instructions of such court.
Escrow Agent shall have no liability to Agent, Company, any Subscriber
or any other person with respect to any such suspension of performance or
disbursement into court, specifically including any liability or claimed
liability that may arise, or be alleged to have arisen, out of or as a result of
any delay in the disbursement of funds held as Escrow Funds or any delay in or
with respect to any other action required or requested of Escrow Agent.
Investment of Funds. Escrow Agent shall invest and reinvest the Escrow
Funds as Company shall direct (subject to applicable minimum investment
requirements) in writing; provided, however, that no investment or reinvestment
may be made except in the following:
Short-term direct obligations of the United States of America or
obligations the principal of and the interest on which are unconditionally
guaranteed by the United States of America; or
Short-term certificates of deposit issued by any bank (as defined in
Section 3(a)(6) of the Securities Exchange Act of 1934) (including Escrow Agent
and its affiliates) located in the United States and having a net worth of at
least $50,000,000; or
Bank repurchase agreements covering the securities of the United States
government or United States governmental agencies issued by banks located in the
United States having a net worth of at least $50,000,000; or
Any money market fund substantially all of which is invested in the
foregoing investment categories, including any money market fund managed by
Escrow Agent and any of its affiliates.
If Escrow Agent has not received written instructions from Company at
any time that an investment decision must be made, Escrow Agent shall invest the
Escrow Funds, or such portion thereof as to which no written instructions have
been received, in investments described in clause (d) above. Each of the
foregoing investments shall be made in the name of Escrow Agent in its stated
capacity as escrow agent. No investment shall be made in any instrument or
security that has a maturity of greater than three (3) months. Notwithstanding
anything to the contrary contained herein, Escrow Agent may, without notice to
Company or Agent, sell or liquidate any of the foregoing investments at any time
if the proceeds thereof are required for any release of funds permitted or
required hereunder, and Escrow Agent shall not be liable or responsible for any
loss, cost or penalty resulting from any such sale or liquidation. With respect
to any funds received by Escrow Agent for deposit into the Escrow Funds or any
written investment instruction of Company received by Escrow Agent after ten
o'clock, a.m., Charlotte, North Carolina, time, Escrow Agent shall not be
required to invest such funds or to effect such investment instruction until the
next day upon which banks in Charlotte, North Carolina, are open for business.
Escrow Agent shall deliver to Company, upon request by Company, an
accounting of all funds held in escrow pursuant to this Agreement, to the extent
such funds have not been previously paid over by Escrow Agent.
Resignation and Removal of Escrow Agent.
Generally. Escrow Agent may resign from the performance of its duties
hereunder at any time by giving at least five (5) days' prior written notice to
Agent and Company or may be removed, with or without cause, by Agent and
Company, acting jointly in writing, at any time by
the giving of at least five (5) days' prior written notice to Escrow Agent. Such
resignation or removal shall take effect upon the appointment of a successor
Escrow Agent as provided herein below. Upon any such notice of resignation or
removal, Agent and Company jointly shall appoint a successor Escrow Agent
hereunder, which shall be a bank (as defined in Section 3(a)(6) of the
Securities Exchange Act of 1934). Upon the acceptance in writing of any
appointment as Escrow Agent hereunder by a successor Escrow Agent, such
successor Escrow Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Escrow Agent, and the
retiring Escrow Agent shall be discharged from its duties and obligations under
this Escrow Agreement, but shall not be discharged from any liability for
actions taken as escrow agent hereunder prior to such succession. After any
retiring Escrow Agent's resignation or removal, the provisions of this Escrow
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Escrow Agent under this Escrow Agreement.
Following Sale of Minimum Offering. Notwithstanding anything to the
contrary in this Escrow Agreement, at any time after Shares representing the
Minimum Offering have been sold (and the corresponding Escrow Funds disbursed in
accordance with this Escrow Agreement), Company and Agent, by two (2) days'
prior written notice to Escrow Agent, may terminate this Escrow Agreement. Any
Escrow Funds remaining at the time of termination of this Escrow Agreement shall
be disbursed in accordance with Section 4 hereof.
Liability of Escrow Agent. Escrow Agent shall have no liability or
obligation with respect to the Escrow Funds except for Escrow Agent's willful
misconduct or gross negligence. Escrow Agent's sole responsibility shall be for
the safekeeping, investment, and disbursement of the Escrow Funds in accordance
with the terms of this Escrow Agreement. Escrow Agent shall have no implied
duties or obligations and shall not be charged with knowledge or notice of any
fact or circumstance not specifically set forth herein or in a written notice
provided hereunder. Escrow Agent may rely upon any instrument, not only as to
its due execution, validity and effectiveness, but also as to the truth and
accuracy of any information contained therein which Escrow Agent shall in good
faith believe to be genuine, to have been signed or presented by the person or
parties purporting to sign the same and to conform to the provisions of this
Escrow Agreement. In no event shall Escrow Agent be liable for incidental,
indirect, special, consequential or punitive damages. Escrow Agent shall not be
obligated to take any legal action or commence any proceeding in connection with
the Escrow Funds or any account in which Escrow Funds are deposited or this
Escrow Agreement, or to appear in, prosecute or defend any such legal action or
proceeding. Without limiting the generality of the foregoing, Escrow Agent shall
not be responsible for or required to enforce any of the terms or conditions of
any subscription agreement with any Subscriber or any other agreement between
Company, Agent and/or any Subscriber. Escrow Agent shall not be responsible or
liable in any manner for the performance by Company or any Subscriber of their
respective obligations under any subscription agreement nor shall Escrow Agent
be responsible or liable in any manner for the failure of Company, Agent or any
third party (including any Subscriber) to honor any of the provisions of this
Escrow Agreement. Escrow Agent may consult legal counsel selected by it in the
event of any dispute or question as to the construction of any of the provisions
hereof or of any other agreement or of its duties hereunder, and shall incur no
liability and shall be fully protected from any liability whatsoever in acting
in good faith in accordance with the opinion or instruction of such counsel.
Company shall promptly pay, upon demand, the reasonable fees and expenses of any
such counsel.
Indemnification of Escrow Agent. From and at all times after the date
of this Escrow Agreement, Company shall, to the fullest extent permitted by law,
indemnify and hold harmless the Escrow Agent and each director, officer,
employee, attorney, agent and affiliate of Escrow Agent (collectively, the
"Indemnified Parties") against any and all actions, claims (whether or not
valid), losses, damages, liabilities, costs and expenses of any kind or nature
whatsoever (including without limitation reasonable attorneys' fees, costs and
expenses) incurred by or asserted against any of the Indemnified Parties from
and after the date hereof, whether direct, indirect or consequential, as a
result of or arising from or in any way relating to any claim, demand, suit,
action or proceeding (including any inquiry or investigation) by any person,
whether threatened or initiated, asserting a claim for any legal or equitable
remedy against any person under any statute or regulation, including, but not
limited to, any federal or state securities laws, or under any common law or
equitable cause or otherwise, arising from or in connection with the
negotiation, preparation, execution, performance or failure of performance of
this Escrow Agreement or any transactions contemplated herein, whether or not
any such Indemnified Party is a party to any such action, proceeding, suit or
the target of any such inquiry or investigation; provided, however, that no
Indemnified Party shall have the right to be indemnified hereunder for any
liability finally determined by a court of competent jurisdiction, subject to no
further appeal, to have resulted solely from the gross negligence or willful
misconduct of such Indemnified Party. If any such action or claim shall be
brought or asserted against any Indemnified Party, such Indemnified Party shall
promptly notify Company in writing, and Company shall assume the defense
thereof, including the employment of counsel and the payment of all expenses.
Such Indemnified Party shall, in its sole discretion, have the right to employ
separate counsel in any such action and to participate in the defense thereof,
and the fees and expenses of such counsel shall be paid by such Indemnified
Party unless (a) Company agrees to pay such fees and expenses, or (b) Company
shall fail to assume the defense of such action or proceeding or shall fail, in
the reasonable discretion of such Indemnified Party, to employ counsel
satisfactory to the Indemnified Party in any such action or proceeding, or (c)
the named parties to any such action or proceeding (including any impleaded
parties) include both Indemnified Party and Company, and Indemnified Party shall
have been advised by counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to
Company. All such fees and expenses payable by Company pursuant to the foregoing
sentence shall be paid from time to time as incurred, both in advance of and
after the final disposition of such action or claim. The obligations of Company
under this Section 9 shall survive any termination of this Escrow Agreement and
the resignation or removal of Escrow Agent.
Compensation to Escrow Agent.
Fees and Expenses. Company shall compensate Escrow Agent for its
services hereunder in accordance with Exhibit A attached hereto and, in
addition, shall reimburse Escrow Agent for all of its reasonable and necessary
out-of-pocket expenses, including attorneys' fees, travel expenses, telephone
and facsimile transmission costs, postage (including express mail and overnight
delivery charges), copying charges and the like. All of the foregoing
compensation and reimbursement obligations shall be payable by Company upon
demand by Escrow Agent. The obligations of Company under this Section 10 shall
survive any termination of this Escrow Agreement and the resignation or removal
of Escrow Agent.
Disbursements from Escrow Funds to Pay Escrow Agent. Escrow Agent is
authorized to and may disburse from time to time, to itself or to any
Indemnified Party from the Escrow Funds (but only to the extent of Company's
rights thereto), the amount of any compensation and reimbursement of
out-of-pocket expenses due and payable hereunder (including any amount to which
Escrow Agent or any Indemnified Party is entitled to seek indemnification
pursuant to Section 9 hereof). Escrow Agent shall, prior to disbursement, notify
Company of any disbursement from the Escrow Funds to itself or to any
Indemnified Party in respect of any compensation or reimbursement hereunder and
shall furnish to Company copies of all related invoices and other statements.
Security and Offset. Company hereby grants to Escrow Agent and the
Indemnified Parties a security interest in and lien upon the Escrow Funds (but
only to the extent of Company's rights thereto) to secure all obligations
hereunder, and Escrow Agent and the Indemnified Parties shall have the right to
offset the amount of any compensation or reimbursement due any of them hereunder
(including any claim for indemnification pursuant to Section 9 hereof) against
the Escrow Funds (but only to the extent of Company's rights thereto.) If for
any reason the Escrow Funds available to Escrow Agent and the Indemnified
Parties pursuant to such security interest or right of offset are insufficient
to cover such compensation and reimbursement, Company shall promptly pay such
amounts to Escrow Agent and the Indemnified Parties upon receipt of an itemized
invoice.
Representations and Warranties
Company. Company makes the following representations and warranties to
Escrow Agent:
(1) Company is a corporation duly organized, validly existing, and in
good standing under the laws of the Commonwealth of Virginia, and has full power
and authority to execute and deliver this Escrow Agreement and to perform its
obligations hereunder;
(2) This Escrow Agreement has been duly approved by all necessary
corporate action of Company, has been executed by duly authorized officers of
Company, and constitutes a valid and binding agreement of Company, enforceable
in accordance with its terms.
(3) The execution, delivery, and performance by Company of this Escrow
Agreement will not violate, conflict with, or cause a default under the articles
of incorporation or bylaws of Company, any applicable law or regulation
applicable to the Company, any court order or administrative ruling or decree to
which Company is a party or any of its property is subject, or any agreement,
contract, indenture, or other binding arrangement to which Company is a party or
any of its property is subject. The execution, delivery and performance of this
Escrow Agreement is consistent with and accurately described in the Offering
Document, and the allocation of interest and other earnings to Subscribers, as
set forth in Section 4 hereof, has been properly described therein.
(4) No party other than the parties hereto and the prospective Subscribers
have, or shall have, any lien, claim or security interest in the Escrow Funds or
any part thereof. No financing statement under the Uniform Commercial Code is on
file in any jurisdiction claiming a security interest in or describing (whether
specifically or generally) the Escrow Funds or any part thereof.
(5) Company hereby acknowledges that the status of Escrow Agent is that of
agent only for the limited purposes set forth herein, and hereby represents and
covenants that no representation or implication has been or shall be made that
Escrow Agent has investigated the desirability or advisability of investment in
the Shares or has approved, endorsed or passed upon the merits of the investment
therein and that the name of the Escrow Agent has not and shall not be used in
any manner in connection with the offer or sale of the Shares other than to
state that the Escrow Agent has agreed to serve as escrow agent for the limited
purposes set forth herein.
(6) All of the representations and warranties of Company contained
herein are true and complete as of the date hereof and will be true and complete
at the time of any deposit to or disbursement from the Escrow Funds.
Agent. Agent makes the following representations and warranties to
Escrow Agent:
(1) Agent is a corporation duly organized, validly existing, and in
good standing under the laws of the State of New York, and has full power and
authority to execute and deliver this Escrow Agreement and to perform its
obligations hereunder;
(2) This Escrow Agreement has been duly approved by all necessary
corporate action of Agent, has been executed by duly authorized officers of
Agent, and constitutes a valid and binding agreement of Agent, enforceable in
accordance with its terms.
(3) The execution, delivery, and performance by Agent of this Escrow
Agreement will not violate, conflict with, or cause a default under the articles
of incorporation or bylaws of Agent, any applicable law, regulation or license
applicable to Agent, any court order or administrative ruling or decree to which
Agent is a party or any of its property is subject, or any agreement, contract,
indenture, or other binding arrangement to which Agent is a party or any of its
property is subject. The execution, delivery and performance of this Agreement
is consistent with and accurately described in the Offering Document, and the
allocation of interest and other earnings to Subscribers, as set forth in
Section 4 hereof, has been properly described therein.
(4) The deposit with Escrow Agent by Agent of Cash Investment Instruments
pursuant to Section 3 hereof shall be deemed a representation and warranty by
Agent that such Cash Investment Instrument represents a bona fide sale to the
Subscriber or Subscribers described therein of the amount of Shares set forth
therein, subject to and in accordance with the terms of the Offering Document.
(5) Agent hereby acknowledges that the status of Escrow Agent is that of
agent only for the limited purposes set forth herein, and hereby represents and
covenants that no representation or implication has been or shall be made that
Escrow Agent has investigated the desirability or advisability of investment in
the Shares or has approved, endorsed or passed upon the merits of the investment
therein and that the name of the Escrow Agent has not and shall not be used in
any manner in connection with the offer or sale of the Shares other than to
state that the Escrow Agent has agreed to serve as escrow agent for the limited
purposes set forth herein.
(6) All of the representations and warranties of Agent contained herein are
true and complete as of the date hereof and will be true and complete at the
time of any deposit to or disbursement from the Escrow Funds.
Consent to Jurisdiction and Venue. In the event that any party hereto
commences a lawsuit or other proceeding relating to or arising from this Escrow
Agreement, the parties hereto agree that the United States District Court for
the Western District of North Carolina shall have the sole and exclusive
jurisdiction over any such proceeding. If all such courts lack federal subject
matter jurisdiction, the parties agree that the Superior Court Division of the
General Court of Justice of Mecklenburg County, North Carolina shall have sole
and exclusive jurisdiction. Any of these courts shall be proper venue for any
such lawsuit or judicial proceeding and the parties hereto waive any objection
to such venue. The parties hereto consent to and agree to submit to the
jurisdiction of any of the courts specified herein and agree to accept service
or process to vest personal jurisdiction over them in any of these courts.
Notice. All notices and other communications hereunder shall be in
writing and shall be deemed to have been validly served, given or delivered five
(5) days after deposit in the United States mails, by certified mail with return
receipt requested and postage prepaid, when delivered personally, one (1) day
after delivery to any overnight courier, or when transmitted by facsimile
transmission facilities (with a copy mailed or otherwise delivered as provided
in this section 13), and addressed to the party to be notified as follows:
If to Agent at:
Xxxxx Xxxxxx Associates, Inc.
000 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile Number: (000) 000-0000
If to Company at:
Apple Hospitality Two, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, President
Facsimile Number: (000) 000-0000
If to the Escrow
Agent at:
First Union National Bank, as Escrow Agent
Corporate Trust Department
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxxx
Facsimile Number: (___) ___-____
or to such other address as each party may designate for itself by like notice.
Amendment or Waiver. This Escrow Agreement may be changed, waived,
discharged or terminated only by a writing signed by Agent, Company and Escrow
Agent. No delay or omission by any party in exercising any right with respect
hereto shall operate as a waiver. A waiver on any one occasion shall not be
construed as a bar to, or waiver of, any right or remedy on any future occasion.
Severability. To the extent any provision of this Escrow Agreement is
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Escrow Agreement.
Governing Law. This Escrow Agreement shall be construed and interpreted
in accordance with the internal laws of the Commonwealth of Virginia without
giving effect to the conflict of laws principles thereof.
Entire Agreement. This Escrow Agreement constitutes the entire
agreement between the parties relating to the acceptance, collection, holding,
investment and disbursement of the Escrow Funds and sets forth in their entirety
the obligations and duties of the Escrow Agent with respect to the Escrow Funds.
Binding Effect. All of the terms of this Escrow Agreement, as amended
from time to time, shall be binding upon, inure to the benefit of and be
enforceable by the respective successors and assigns of Agent, Company and
Escrow Agent.
Execution in Counterparts. This Escrow Agreement may be executed in two
or more counterparts, which when so executed shall constitute one and the same
agreement.
Termination. Upon the first to occur of notice of termination by
Company or deposit of all amounts of the Escrow Funds into court pursuant to
Section 5 hereof, this Escrow Agreement shall terminate and Escrow Agent shall
have no further obligation or liability whatsoever with respect to this Escrow
Agreement or the Escrow Funds.
Acts of the Escrow Agent. The Escrow Agent and any stockholder,
director, officer or employee of the Escrow Agent may buy, sell, and deal in any
of the securities of the Company and become pecuniary interested in any
transaction in which the Company may be interested, and contract and lend money
to the Company and otherwise act as fully and freely as though it were not
Escrow Agent under this Agreement. Nothing herein shall preclude the Escrow
Agent from acting in any other capacity for or with respect to the Company or
for any other entity.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be executed under seal as of the date first above written.
APPLE HOSPITALITY TWO, INC.
By:
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Title: President
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XXXXX XXXXXX ASSOCIATES, INC.
By:
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Title:
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FIRST UNION NATIONAL BANK, AS ESCROW AGENT
By:
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Title:
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EXHIBIT A
FEES PAYABLE TO ESCROW AGENT
I. ACCEPTANCE FEE $500 One-time, Upfront
Initial fee for reviewing documents, setting up accounts and administration of records.
Escrow Agent's Counsel Fees if needed for review of escrow agreement. Billed at cost
II. ADMINISTRATION FEE $2,500 Annually in Advance
Day-to-day administration of governing documents, maintenance of investments, communications and
providing statements, and other duties defined in the Agreement.
III. OUT-OF-POCKET EXPENSES
Advance or out-of-pocket expenses including but not limited to postage, telephone, freight, legal, courier,
and express mail will be billed in addition to the fees quoted herein.
IV. ACTIVITY CHARGES
Wire Transfers $25 per Transfer
Check Disbursements $25 Per Disbursement
Securities Transactions - Buy/Sell/Maturity $25 Per Transaction
Automatic Cash Investment Management 30 Basis Points Annualized
(AAA rated U.S. Treasury daily money market fund) Net of Income
Counsel fees, if ever retained as a result of default or other extraordinary Billed at Cost
occurrence on behalf of Escrow Agent.
