10.15 Agreement of Sale
AGREEMENT OF SALE
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THIS AGREEMENT OF SALE, made this 23rd day of September 1998, by and
between XxXXXX HOTEL, INC., a West Virginia corporation, with its principal
office and place of business located at Xxx Xxxx Xxxxx, Xxxxxxxx, Xxxx Xxxxxxxx,
00000 (hereinafter called "Seller"), and OHIO KEY I, INC. and OHIO KEY II, INC.,
Florida corporations, with offices c/o Lakeside Inn, 000 Xxxxx Xxxxxxxxx Xxxxxx,
Xx. Xxxx, Xxxxxxx, 00000 (hereinafter collectively called "Buyer").
WHEREAS, the Seller owns certain real estate which includes the XxXxxx
House Hotel and Conference Center, a one hundred seventy-three (173) room full
service hotel, together with an appurtenant apartment building containing
approximately thirty (30) apartments, and an appurtenant seven-story parking
garage with parking spaces for approximately two hundred twenty-five (225)
vehicles, which real estate is more particularly described on Exhibit A,
attached (hereinafter collectively called the "XxXxxx Hotel"), and
WHEREAS, the Seller has contracted with Lane Hotels, Inc., a Delaware
corporation (hereinafter called "Manager"), to manage the XxXxxx Hotel for the
Seller pursuant to a Management Agreement dated effective as of the 1st day of
November, 1995, and
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase
from the Seller the XxXxxx Hotel for the purchase price of Three Million Two
Hundred Thousand Dollars ($3,200,000.00) subject to adjustments for the
proration of rents, taxes, utilities, expenses and receivables, all as
hereinafter provided.
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NOW, THEREFORE, THIS AGREEMENT WITNESSETH: That for and in
consideration of the mutual covenants and agreements hereinafter contained, and
for the consideration hereinafter set forth, the parties hereto, intending to be
legally bound hereby, covenant and agree as follows:
1. SALE AND PURCHASE. Seller agrees to sell and convey to the Buyer and
Buyer agrees to purchase from the Seller, in accordance with the terms,
conditions and covenants hereinafter set forth, all of Seller's right, title and
interest in and to the XxXxxx Hotel.
2. THE PURCHASE PRICE. The purchase price for the XxXxxx Hotel shall be
Three Million Two Hundred Thousand Dollars ($3,200,000.00), which shall be paid
in the following manner:
(A) Twenty-five Thousand Dollars ($25,000.00) payable to the
Mumford Company (hereinafter called "Agent") as an xxxxxxx money
deposit within five (5) days of the full execution of this Agreement.
The deposit shall be held by the Agent and shall be distributed as
follows:
(i) In the event the purchase and sale of the XxXxxx
Hotel closes as contemplated by this Agreement, then the Agent
shall pay the deposit to the Seller on the closing date, which
shall be credited against the purchase price.
(ii) In the event Buyer violates or fails to perform
any of the terms or conditions of this Agreement then, at the
election of the Seller, (a) the deposit shall be paid to and
retained by Seller and Seller may pursue any and all rights
available for damages, or (b) Seller may enforce this
Agreement and pursue any and all remedies available at law or
in equity including, but not limited to, a suit for specific
performance.
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(iii) In the event Seller violates or fails to
perform any of the terms or conditions of this Agreement,
then, at the election of the Buyer, (a) the deposit shall be
paid to and retained by Buyer and Buyer may pursue any and all
rights available for damages, or (b) Buyer may enforce this
Agreement and pursue any and all remedies available at law or
in equity including, but not limited to, a suit for specific
performance. In the event that the Buyer initiates an action
for specific performance or other remedy available in law or
equity, the Agent shall hold the deposit in escrow pursuant to
a determination by a court of competent jurisdiction as to
which party is entitled to the funds, or as the parties may in
writing jointly instruct. (B) The balance of Three Million One
Hundred Seventy-five Thousand Dollars ($3,175,000.00) in cash,
certified check or wire transfer funds at closing.
3. TITLE. Title to the XxXxxx Hotel shall be good and marketable fee
simple title, free of all liens, encumbrances, restrictions, easements and
rights of others, except such recorded easements, conditions, restrictions and
limitations which shall not inhibit or prohibit the development, use and
operation of the XxXxxx Hotel as intended by Buyer.
4. APPORTIONMENTS AND ADDITIONAL PAYMENTS. The following apportionments
and additional payments are to be made:
(A) All rent from the various tenants occupying the premises
shall be prorated to the date of closing. Any advance rents or security
deposits of tenants shall be remitted to the Buyer. The rental paid by
Undo's is both a base rent and an override. Undo's rent shall be
prorated to the date of closing based on a proportion of both the base
rent and any applicable override for the year of the closing. If not
already provided for in the closing statement, Buyer shall remit to
Seller within fifteen (15) days of receipt of any override payment from
Undo's a proportionate share of the same prorated on the basis of the
calendar year and the portion of the year during which each party owned
the XxXxxx Hotel.
(B) Provided that the Buyer accepts the transfer of such
policies, premiums on transferable insurance policies or renewals of
those expiring before the closing shall be prorated to the date of
closing.
(C) Taxes, including real estate taxes, shall be prorated to
the date of closing. Transfer taxes payable on the recording of the
deed shall be paid by Seller.
(D) Utility charges shall be prorated to the date of closing,
including water, electric, telephone, gas, sewer and any other
applicable utility service charges affecting the premises.
(E) Employee vacation pay and other fringe benefits due
current employees shall be paid by the Seller at the date of closing.
(F) Provided that the Buyer accepts the transfer and
assignment of such contracts, all rents and charges payable under any
servicing and/or maintenance contracts assignable to the Buyer, each of
which will be identified by the Seller to the Buyer in advance of
closing, shall be prorated to the day of closing. Each such contract
shall be assigned to the Buyer who shall assume the obligations to be
performed thereunder after the closing.
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(G) Employee accrued wages and/or salaries for the XxXxxx
Hotel shall be paid by Seller on the date of closing.
(H) An inventory shall be conducted as of the date of closing
to determine the status of all current inventory and supplies,
including linen, glass, cleaning and paper supplies and other items
used in the day to day operation of the hotel. The Seller covenants and
agrees to deliver at closing sufficient inventory to meet the day to
day operation of the XxXxxx Hotel for at least three turns of such
inventory. The inventory of all kitchen equipment and all other
supplies shall be restored to the original inventories at minimum which
were identified and agreed to by the current Food and Beverage Lessee,
Undo's.
(I) Within ten (10) days of the full execution hereof, Seller
shall furnish to Buyer a full and complete accounting and listing of
all accounts and liabilities of the Seller which shall be adjusted and
reconciled pursuant to the provisions of this paragraph. Additionally,
the parties shall determine and reconcile all accounts and liabilities
of the XxXxxx Hotel prorating all such expenses and accounts receivable
as of the date of closing and adjust the accounts receivable and
accounts payable, room deposits, security deposits and other funds on
hand to determine the net cash adjustment from the balancing of such
items. Any positive adjustment to such items shall be reflected by a
supplemental cash payment of the Buyer to the Seller and a negative
adjustment shall be reflected by a supplemental cash payment from the
Seller to the Buyer. Such prorations and reconciliations shall be
confirmed by the accountants for the parties within thirty (30) days of
the closing.
5. INSTRUMENTS OF CONVEYANCE. Transfer of the foregoing assets and
contract rights by Seller to Buyer shall be made at the Closing provided for
herein by Seller's execution of a General Warranty Deed as to the real property,
subject to all recorded conditions, restrictions and easements, none of which
shall materially and adversely affect the use and enjoyment of the XxXxxx Hotel,
a xxxx of sale conveying the personalty "As Is" without any warranty as to
merchantability or otherwise, (with the exception of warranty of title), an
assignment of all licenses, permits and contracts referred to herein, and such
other instruments as may be required to convey to Buyer, or its assigns, the
foregoing assets.
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6. CONDITIONS. This Agreement is subject to the following conditions:
(A) Buyer shall have the right to enter upon the XxXxxx Hotel
and to make all inspections and investigations of the books and records
relating to the XxXxxx Hotel and of the condition of the XxXxxx Hotel
which it has deemed necessary; such inspections shall occur between the
date of this Agreement and the Closing Date. At Buyer's expense, Buyer
shall have the right to have the following tests and inspections
performed.
(i) An inspection of the XxXxxx Hotel by an engineer
or contractor selected by the Buyer.
(ii) An environmental audit by an environmental
consultant or consulting firm selected by the Buyer.
(iii) A survey of the subject real property,
certified in favor of Buyer and the title insurer, the right
to which survey shall be waived if not performed by Buyer.
(B) Seller hereby grants access to the XxXxxx Hotel to Buyer
and Buyer's agents for those purposes. Prior to commencing any
inspections on the XxXxxx Hotel, Buyer shall provide Seller with
reasonable notice of its intention to conduct inspections. Buyer shall
coordinate with Seller any on-site inspections of the XxXxxx Hotel,
which inspections shall be conducted during normal business hours. All
information obtained by Buyer from its inspection of the XxXxxx Hotel
shall be kept confidential except for disclosures to such
professionals, mortgage lenders and permitted assignees as may be
connected with the acquisition of the XxXxxx Hotel.
(C) In the event Buyer is unsatisfied with either the
inspection, audit, or its own analysis for any material reason, in the
Buyer's sole discretion, Buyer shall have the right to terminate this
Agreement and declare this Agreement null and void; provided, however,
that if Buyer does not provide notice to the Seller of the Buyer's
exercise of this right to terminate no later than 5:00 p.m. thirty (30)
days after the full execution of this Agreement by both parties, that
right to terminate this Agreement shall be deemed waived and this
Agreement shall be in full force and effect. In the event that the
Buyer elects to exercise such right of termination, the xxxxxxx money
deposit shall be forthwith returned to the Buyer by the Agent, and
neither Seller nor Buyer shall be further obligated to the other.
(D) The Buyer agrees to accept the property and the personalty
in "As Is" condition as of Closing. Buyer agrees that, except as
provided in this Agreement, Buyer is not relying upon any
representations, statements, or warranties (oral or written, implied or
express) of any officer, employee, agent of Seller, or any salesperson
or broker involved in this transaction as to the condition of the
property, including, but not limited to, any representations,
statements or warranties as to the physical condition of the property
with respect to applicable building, zoning, subdivision, environmental
or land use laws, codes, ordinances, rules or regulations; the state of
repair of the property; or otherwise in any respect. Buyer is relying
upon the warranties and representations contained in this Agreement and
in the documents supplied by Seller.
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(E) The Seller shall, within ten (10) days of the full
execution hereof, complete and deliver to the Buyer, the applicable
items noted on the Due Diligence Checklist attached hereto and by
reference incorporated herein.
(F) Buyer confirming, to its satisfaction, that the following
leases (hereinafter "Leases") involving the XxXxxx Hotel constitute the
only leases, other than the apartment leases hereinafter described, in
effect regarding the XxXxxx Hotel, and that the same are valid and
subsisting Leases as of the date of closing:
(i) Lease dated May 1, 1998, from XxXxxx Hotel, Inc.
to Cafe La News for certain store front property;
(ii) Lease dated the 14th day of February, 1996, by
and between XxXxxx Hotel, Inc. and Xxxxxxx & Xxxxx, Inc. for
certain storefront property;
(iii) Lease dated the 31st day of January, 1996, by
and between XxXxxx Hotel, Inc. and Sparachane Enterprises,
Inc., d/b/a Undo's for certain food service and banquet
facilities;
(iv) Lease dated the 31st day of December, 1996, by
and between XxXxxx Hotel, Inc. and Enterprise Rent-A-Car
Company of Pittsburgh for certain storefront property, an
antenna and parking.
(v) Management Agreement for Xxxxxxx Xxxxx - Parking
Garage.
(vi) Lease dated February 1, 1988, by and between
XxXxxx Land Company and Mancan, Inc. d/b/a Manpower for
certain storefront property.
(vii) A schedule of the apartment tenants including
the name of the tenant, the dates of the rental term, the
amount of monthly rental and the current status of the rental
payments will be delivered by Seller to Buyer within five (5)
days of the full execution hereof.
(viii) Lease dated March 1, 1990, by and between
XxXxxx Land Company and Associates Financial Services Company
of West Virginia, Inc. for certain storefront property.
(G) Seller shall, prior to the closing date, provide written
notice of termination of the Lease Agreement between XxXxxx Hotel, Inc.
and Sparachane Enterprises, Inc. in accordance with Paragraph 2 of said
Lease permitting the Seller to terminate such Lease upon sixty (60)
days prior written notice to Sparachane Enterprises, Inc.
(H) Seller shall, at or prior to the closing date, provide
written notice of termination of the Management Agreement between
Seller and Lane Hotels, Inc. in accordance with Section 11.02(b) of
said Agreement permitting the Seller to terminate such Agreement upon
the closing of the sale of the XxXxxx Hotel to a non-affiliated third
party.
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(I) Seller has good and marketable title to the real estate
and to those assets conveyed or to be conveyed hereunder and such
assets shall at the time of closing be free and clear of all liens,
encumbrances, restrictions, and claims of every kind and nature
whatsoever, except for those encumbrances which do not materially
affect the marketability of the title to the real estate or materially
adversely affect the use and enjoyment of the real estate for its
intended purpose.
(J) Promptly after the execution hereof, Buyer shall apply for
issuance by a Title Insurer of its choice, for a commitment for an ALTA
owner's title insurance policy, insuring title to the real property for
the full purchase price. The cost of the title insurance commitment and
owner's policy shall be paid by Buyer. The title commitment and owner's
policy shall insure marketable title subject only to those
qualifications contained herein, and easements and reservations of
record and those which shall be discharged by Seller at or before
closing. Buyer shall have ten (10) days, from date of receiving the
commitment, to examine same. If title is found defective, Buyer shall,
within seven (7) days thereafter, notify Seller in writing specifying
defect(s). If said defect(s) render title unmarketable, Seller shall
have one hundred twenty (120) days from receipt of notice within which
to remove said defect(s), and if Seller is unsuccessful in removing
them within said time, Buyer shall have the option of either (1)
accepting the title as it then is, or (2) demanding a refund of all
monies paid hereunder which shall forthwith be returned to Buyer and
thereupon Buyer and Seller shall be released, as to one another, of all
further obligations under this Agreement. Seller agrees that Seller
will, if title is found to be unmarketable, use diligent effort to
correct the defect(s) in title within the time provided therefore,
including the bringing of necessary suits. Any encroachment, overlap,
easement (other than existing power or utility easements) or other
discrepancy revealed by a survey of the property shall be treated like
a title defect under the provisions of this paragraph.
7. REPRESENTATIONS CONCERNING LEASES. The Seller represents and
warrants to the Buyer that each of the foregoing identified Leases are valid and
subsisting leases and that they are the only written Leases affecting the XxXxxx
Hotel; that Seller has not sold, assigned, transferred or pledged any of the
rents, issues or profits from said Leases; that no rents, issues or profits of
the Leases becoming due subsequent to the date hereof have been collected by
Seller other than as specifically provided in the Lease Agreements, nor has
payment of any of the same been anticipated, waived, released, discounted or
otherwise discharged or compromised by the Seller. There are no other leases,
oral or written, except for the Leases and the apartment leases listed on the
attached schedule.
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8. PERSONAL PROPERTY. The sale of the XxXxxx Hotel shall include all
fixtures, chattels, and articles of personal property that are now, or later may
be, placed upon, attached to, or used in connection with or in the operation of
the XxXxxx Hotel, regardless of whether enumerated herein, including, among
other items, furnaces, boilers, radiators and piping, plumbing and bathroom
fixtures, refrigeration, air conditioning and sprinkler systems, washtubs,
sinks, gas and electric fixtures, stoves, ranges, awnings, screens, window
shades, elevators, motors, refrigerators, kitchen cabinets, incinerators, and
all furniture, fixtures, silverware, linen, china, glassware, napery, and all
other articles of personal property owned by the Seller and used in connection
with that portion of the premises used and operated as the XxXxxx Hotel.
Seller represents that it owns all of the above property free from
liens and encumbrances, except as set forth hereinafter. Expressly excluded,
however, are the following:
(A) Fixtures, chattels, and articles of personal property in
that portion of the premises known as Xxxxxxx & Xxxxx, Enterprise
Rent-A-Car, Cafe La News and Undo's storefront locations and leased
areas, all of which are owned by the tenants in possession.
(B) Furniture, furnishings and articles of personal property
owned by tenants or occupants of rooms, apartments, or other areas in
that portion of the premises used and operated as an apartment complex;
and
(C) Certain kitchen and bar appliances, dishes, cooking
utensils, food inventory and other items owned by Undo's in the
operation of its food service operation within the XxXxxx Hotel as
described on Exhibit B, attached hereto.
9. CLOSING. The closing of the transaction contemplated hereby shall be
held within fifteen (15) days of the end of the Buyer's due diligence period as
provided in Paragraph 6(C), unless otherwise agreed to by the parties in
writing, and shall be held at the offices of Seller or such other location as
the parties shall mutually agree.
10. TITLE EXAMINATION. Buyer shall pay the cost of any title
examination undertaken by Buyer with respect to the XxXxxx Hotel.
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11. DAMAGE OR DESTRUCTION. Between the date hereof and the date of
closing, Seller assumes the full risk of any damage or destruction by fire or
the elements to the property, including without limitation, the buildings, and
other improvements, and the cost of the work of restoring, rebuilding, repairing
and replacing the same shall be borne by Seller, at its sole cost and expense,
before the closing date. Such risk of loss or damage assumed by Seller shall
continue until the actual delivery of the deed of conveyance at closing in
accordance with the terms of this Agreement. In the event of loss or damage
occurring prior to closing, Seller shall have, at its election, the right to
either repair the damage or assign to Buyer the rights to any proceeds of
insurance. In the event Seller elects to make an assignment of insurance
proceeds, then Buyer may, at its election, (a) consummate the purchase
contemplated hereunder by paying the full purchase price herein set forth, with
Buyer receiving the proceeds of insurance or (b) cancel this Agreement by
written notice to Seller, in which case the deposit, together with interest
accrued thereon, shall be forthwith returned to Buyer and neither of the parties
hereto have any further liability or obligation hereunder.
12. CONDEMNATION. If, prior to closing, all or any part of the property
shall be condemned by governmental or other lawful authority, then this
Agreement shall be null and void, the deposit and interest accrued thereon shall
be returned to Buyer, and neither party shall have any further liability
hereunder.
13. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of West Virginia.
14. NOTICES. All notices, demands or other communications which are
required or permitted to be given hereunder shall be in writing and personally
served or shall be sent by certified mail, postage prepaid, return receipt
requested, addressed to the respective parties as follows:
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If to Seller:
Xx. Xxxx X. Xxxxxxx
Vice Chairman
Wesbanco Bank Wheeling
Xxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
with a copy to:
Xxxxx X. Xxxxxxx, Esq.
PHILLIPS, GARDILL, XXXXXX & XXXXXXXX
00-00xx Xxxxxx
Xxxxxxxx, XX 00000
If to Buyer:
Xxxxx X. Xxxxxxxx
Ohio Key I, Inc.
c/o Lakeside Inn
000 Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxx, Esq.
Knaust & Xxxxxxx, P.A.
0000 Xxxxxxx Xxxxxx
Xx. Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Xxxxxx Xxxxxx, Jr., Esq.
X.X. Xxx 000000
Xxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(000) 000-0000
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15. ENTIRE AGREEMENT/SURVIVAL. This Agreement, including exhibits
hereto, represents the entire Agreement between the parties with respect to the
property and may not be modified or terminated, except by agreement, in writing,
signed by the parties. All representations, covenants, warranties and promises
to perform herein contained shall survive closing hereunder, except as otherwise
expressly stated.
16. POSSESSION. Buyer shall be entitled to possession at closing,
subject, however, to Buyer's right to inspect the property as hereinabove
provided prior to closing.
17. PROPERTY SOLD "AS IS". Subject to the right to inspect the property
as provided in Paragraph 6 above and except as to the warranties and
representations otherwise provided herein, Buyer acknowledges that it has not
relied on statements of the Seller or Seller's agents with respect to the
condition of the property and accepts the property "as is".
18. BINDING EFFECT. This Agreement shall be binding upon and shall
benefit the parties hereto and their respective heirs, successors and assigns.
19. BROKER. Seller represents to Buyer that this sale was brought about
by the Mumford Company as broker, and that the negotiations of the parties with
respect to the terms hereof have been conducted through such broker. The Seller
shall be responsible for the payment of any commissions to the broker, which
said commissions shall be paid as of the date of closing.
20. SELLER'S FINANCIAL REPRESENTATIONS. Seller has not made and does
not make any representations as to the physical condition, income, expense,
operation or other matter or thing affecting or relating to the XxXxxx Hotel,
except as herein specifically set forth, and Buyer acknowledges that no such
representations have been made. Seller is not liable or bound in any manner by
any verbal or written statements, representations or information pertaining to
the XxXxxx Hotel furnished by any other person, except as specifically set forth
herein. The parties acknowledge that the Buyer is expressly relying upon the
accuracy of the financial information prepared by Lane Management Company, as
submitted to Seller.
21. TIME IS OF THE ESSENCE. Time is of the essence of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
XxXXXX HOTEL, INC.
By /s/Xxxx X. Xxxxxxx
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Its Treasurer
OHIO KEY I, INC.
By /s/C. Xxxx Xxxxx, Xx
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Its President
OHIO KEY II, INC.
By /s/C. Xxxx Xxxxx, Xx
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Its President
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ACKNOWLEDGMENT AND RECEIPT
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XXXXXX X. XXXXXXX, on behalf of The Mumford Company, hereby
acknowledges receipt of the sum of Twenty-five Thousand Dollars ($25,000.00)
xxxxxxx money deposit this 1st day of October, 1998, pursuant to the provisions
of Section 2 of the foregoing Agreement and agrees to abide by the terms and
provisions thereof with respect to the application of said xxxxxxx money
deposit.
/s/ Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX
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