Exhibit 2.1
MOTEL PURCHASE AGREEMENT
AGREEMENT, dated for reference purposes only, September 12, 2005, is among
SUPERTEL LIMITED PARTNERSHIP, a Virginia limited partnership ("Buyer") and
INDEPENDENT PROPERTY OPERATORS OF AMERICA, LLC, a Virginia limited liability
company ("Seller").
RECITALS:
This Agreement is made with reference to the following facts and
objectives:
(a) Seller is the owner of certain parcels of real estate, together with
improvements and related assets located at the Comfort Inn in Fayetteville,
North Carolina, the Comfort Suites located in Ft. Xxxxx, Iowa, the Comfort
Suites located in Lafayette, Indiana, the Comfort Suites located in Marion,
Indiana, the Comfort Suites located in South Bend, Indiana, and the Hampton
Inn & Suites located in Warsaw, Indiana (the "Motels"), the address of
which Motels are more particularly described in Section 1(a) below. Each
individual Motel described in the preceding sentence may sometimes
hereinafter be referred to individually as a "Motel".
(b) Seller desires to sell on the terms and conditions hereinbelow set forth
the real estate, improvements and other designated assets relating to the
Motels.
(c) Buyer wishes to purchase all such assets relating to the Motels, upon the
terms and conditions hereinafter set forth.
AGREEMENT:
In order to consummate the desires of the parties set forth in the foregoing
recitals, which are made a contractual part of this Agreement, and in
consideration of the mutual agreements, provisions and covenants herein
contained, Seller and Buyer each hereby agree as follows:
1. Sale and Purchase of Property. Subject to the terms and conditions of
this Agreement, Seller hereby agrees that, at closing, it will sell, convey,
assign, transfer and deliver to Buyer, the following real estate, improvements,
buildings, facilities, machinery, equipment, furniture, fixtures and other
designated assets (collectively, the "Property"):
(a) Real Property. The real property, including all buildings and
improvements situated thereon, located at the following locations:
Comfort Inn, 0000 Xxxxx Xxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxxxx Xxxxxx,
Xxxxx Xxxxxxxx
Comfort Suites, 0000 Xxxxxxxx Xxxx, Xx. Xxxxx, Xxxxx Xxxxxx, Xxxxxxx
Comfort Suites, 31 Frontage Road, Lafayette, Tippecanoe County,
Indiana
Comfort Suites, 1345 North Xxxxxxx Avenue, Marion, Grant County,
Indiana
Xxxxxxx Xxxxxx, 00000 XX 933 North, South Bend, St. Xxxxxx County,
Indiana
Hampton Inn & Suites, 0000 Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxx
Xxxxxx, Xxxxxxx
the legal descriptions of which are set forth in Exhibit A attached hereto and
incorporated by reference herein;
(b) Machinery, Equipment, Furniture, Fixtures and Signage. All items of
machinery, equipment, furniture, fixtures, leasehold improvements and
signage located in, on or about the Motels and used in connection with
the operation thereof, including, but not limited to, all of those
items of personal property described in Exhibit B attached hereto and
incorporated by reference herein, together with all inventories of
spare parts, tools, maintenance equipment, and miscellaneous similar
items and materials related thereto presently owned, acquired or
leased by Seller between the date of execution hereof and closing;
(c) Sales, General and Administrative Property. All customer and supplier
lists, books and records, computer programs and systems and other
sales, general and administrative property owned by Seller;
(d) Licenses, Permits and Orders. All approvals, authorizations, consents,
licenses, orders and establishment numbers and other permits and
similar items of all governmental agencies whether federal, state or
local, owned, held or utilized by Seller;
(e) Prepaids. All prepaid rent, and similar prepaid items (subject to
proration as provided below); and
(f) Materials and Supplies. All office and room supplies located at and
used in connection with the operation of the Motels, including, but
not limited to, all sheets, pillows, linens and towels and all
maintenance equipment and all similar property used in connection with
the operation of the Motels.
The property referred to in Section 1(a) above shall hereinafter sometimes
be referred to individually as the "Real Property" when intending to exclude
reference to the other assets and property being purchased hereunder and,
similarly, the other assets and property referred to in subparagraphs 1(b), (c),
(d), (e), and (f) shall sometimes hereinafter be referred to as the "Personal
Property", when it is intended that the Real Property shall be excluded from
such reference. The Real Property and the Personal Property shall otherwise be
collectively referred to as the "Property". Buyer hereby agrees to purchase the
Property from Seller upon the terms and conditions set forth herein.
2. Purchase Price. As consideration for the sale, conveyance, assignment,
transfer and delivery of the Property by Seller to Buyer, Buyer hereby agrees
that the purchase price for the Property shall be $32,000,000.00.
Of the purchase price, the sum of $10,000.00 xxxxxxx money (the "Deposit")
shall be paid to Platte County Title & Escrow Company, 0000 00xx Xxxxxx,
Xxxxxxxx, Xxxxxxxx (the "Escrow Agent") upon acceptance of this Agreement by
Seller. In the event that all of the conditions set forth in this Agreement have
not been satisfied prior to the time set for Closing, Buyer may elect to
terminate or rescind this Agreement whereupon the Deposit shall be refunded by
the Escrow Agent to Buyer and all further rights and obligations to the parties
under this Agreement shall terminate.
In the event all of the conditions sets forth in this Agreement and
required to be performed by Seller are satisfied prior to the time set forth for
the Closing, and Buyer fails to purchase the Property as provided herein, then
Seller shall be entitled to receive the entire Deposit from the Escrow Agent as
Seller's sole and exclusive remedy.
3. No Assumption of Liabilities. Buyer does not assume and shall not be
deemed to assume any liability or obligation of Seller except as provided
herein. Buyer shall not be responsible for the payment of any wages of salaries
due to any employees of Seller, including any bonuses, deferred compensation or
sick leave or vacation pay, shall not be responsible for reimbursing lost
vacation days due to any of Seller's employees and shall not have any obligation
to hire any of Seller's employees.
4. Closing. The time of closing the purchase and sale of the Property shall
be as follows:
(a) Closing. The transfer of the Property from Seller to Buyer and the
closing of the transaction contemplated by this Agreement (the
"Closing") will take place at the offices of the Escrow Agent, 0000
00xx Xxxxxx, Xxxxxxxx, Xxxxxxxx, or at such other mutually agreeable
location, commencing at 10:00 a.m., on October 31, 2005 (the "Closing
Date"),
(b) Buyer's Obligations at Closing. At Closing, Buyer shall pay to Seller
the purchase price described in Section 2 above, after crediting the
Deposit, by cashier's check or certified check or other immediately
available funds and shall perform its obligations hereunder and
execute and deliver any closing documents required to be executed by
Buyer and Escrow Agent shall deliver the Deposit to Seller.
(c) Seller's Obligations at Closing. At Closing, Seller shall deliver, or
cause to be delivered, to Buyer:
(i) Instruments of Conveyance. Duly executed assignments, "as is"
bills of sale with covenants of warranty, special warranty deeds,
notices, consents, assurances and such other instruments of
conveyance and transfer, consistent with the terms of this
Agreement, as the Title Company (as hereinafter defined) shall
reasonably request as effective or necessary to vest in Buyer
good, marketable and sufficient title to all of the Property,
subject to no monetary liens, encumbrances or claims or security
interests whatsoever other than liens for real estate taxes not
yet due and payable. Seller shall deliver to Buyer actual
possession or control of the Property. Appropriate forms of such
instruments of conveyance and transfer in conformity with this
Agreement shall be submitted by Buyer's counsel to Seller's
counsel for examination within a reasonable time in advance of
the Closing Date.
(ii) Special Warranty Deed. Duly executed and notarized special
warranty deeds conveying to Buyer all of Seller's right, title
and interest to the Real Property.
(iii)Resolutions. Deliver any required resolutions or consents of the
Manager of Seller authorizing and ratifying the execution and
performance of this Agreement.
(iv) Certificates. Deliver the executed and completed Certificate of
Taxpayer Identification Number in the form attached hereto as
Exhibit C and the Certification of Non-Foreign Status in the form
attached hereto as Exhibit D.
5. Employee Matters. Seller shall terminate all of its employees as of the
Closing Date. Buyer shall be free to extend offers of employment to any such
terminated employees of Seller as Buyer desires, upon terms and conditions
acceptable solely to Buyer. Seller shall be responsible for severance,
termination and other liabilities, obligations, costs and expenses incurred in
connection with the termination of Seller's employees. Seller will make its best
efforts to deliver to Buyer, within 20 days after acceptance of this Agreement
by Seller, a list of all employees working on-site at the Motels, listing such
employees' initial hiring date, position, current pay and any accrued vacation
time or other accrued benefits. The parties hereto acknowledge that these are
employees of Seller's management company, and are not employed by Seller.
6. Representations, Warranties and Covenants of Seller. Seller hereby
represents, warrants and covenants to and with Buyer as follows:
(a) Leases. Except as disclosed by Seller to Buyer in writing within 10
days from the date of this Agreement (including copies of any such
leases and the status of the same), there are no leases affecting any
of the Property. None of the Property or any of the equipment used in
conjunction with the Motels is leased from any third party. None of
the Property has been leased by Seller to any third party, except as
otherwise disclosed pursuant to the first sentence of this Section
6(a).
(b) Maintenance of the Property; Inventory. The Property will be
maintained by Seller until Closing in accordance with normal business
and maintenance practices which are consistent with good business and
maintenance practices. As of Closing, the Motels shall be sufficiently
stocked with inventory so that there exists two and one-half par level
sets of all linens, including sheets and pillow cases, and terrycloth
items, including towels, wash clothes and hand towels for each bed
located in the Motels, one par level set of blankets and bedspreads
for each bed located in the Motels, and one par level set of bath mats
per room located in the Motels. As of Closing there shall also be
sufficient number of good quality, new guests supplies sufficient for
two weeks of operation at occupancy rates similar to the occupancy
rates of the Motels over the six months preceding the Closing. Buyer
and Seller shall conduct a walk-through of the Property within 48
hours prior to the closing to verify that the Property is in
compliance with the terms of this Agreement.
(c) Organization, Good Standing and Corporate Power. Seller is a limited
liability company duly organized, validly existing and in good
standing under the laws of the State of Virginia and has the limited
liability company power to own, operate and lease its properties and
carry on its business as now being conducted.
(d) Authorization, Binding Effect. The execution, delivery and performance
of this Agreement by Seller have been duly authorized by all of its
Managers. This Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all
necessary limited liability company action on the part of Seller, and
constitutes the legal, valid and binding obligation of Seller
enforceable in accordance with its terms.
(e) No Conflict with Charter. The execution, delivery and performance of
this Agreement by Seller will not result in a breach or violation of
or constitute a default under Seller's Articles of Organization or
Operating Agreement.
(f) No Conflicting Agreement. There are no provisions of any existing
mortgage, indenture, trust indenture, loan agreement, contract bonds
or other agreement binding on Seller or materially affecting any of
the Property or the Motels, which if it remained unpaid after the
Closing Date would conflict with the execution, delivery and carrying
out of the terms of this Agreement by Seller. The execution and
delivery by Seller of this Agreement and the performance by Seller of
its obligations hereunder do not require the consent, approval of
action of, or any filing with, or notice to, any public authority or
other party other than or contemplated by this Agreement.
(g) Litigation and Other Proceedings. Seller has no knowledge of any
suits, actions or legal, administrative, arbitration or other
proceedings or governmental investigations, or any event or condition
of any character pertaining to the Motels, or any change in the zoning
or building ordinances affecting the Property, pending or threatened
against the Seller which might adversely affect the Property.
(h) Absence of Certain Changes and Events. During the period from the date
hereof to the Closing Date there will have not have been, without the
prior written consent of Buyer, any change in the general policies or
methods of operation of Seller, any material increase in its supply
levels, or any sales, alterations or changes in the Property, except
in the ordinary course of business, and Seller will not obligate
itself to incur any capital expenditures with respect to the Motels
except as contemplated by Exhibit F.
(i) No Unpaid Bills. Seller shall have paid all bills and charges for all
materials delivered to, and services rendered with respect to, the
Motels.
(j) Financial Statements. Seller has previously furnished to Buyer (i) the
audited financial statements of Seller as of December 31, 2004,
December 31, 2003 and December 31, 2002, and (ii) certain of Seller's
operating financial reports for various reporting periods for the
Motels up to and including June 30, 2005 (collectively, the "Financial
Statements"). To the best of Seller's knowledge, such audited
Financial Statements have been prepared in conformity with GAAP
consistently applied and such Financial Statements fairly present in
all material respects the financial condition, results of operations
and cash flow of the Seller as of their respective dates and for the
respective periods covered thereby. In addition, all operating
financial reports for the Motels delivered to Buyer have been prepared
by Seller in a consistent manner and such financial information was
incorporated into the audited Financial Statements for the periods
previously identified.
(k) Compliance with SEC Reporting Requirements. For a period of time
commencing on the date of this Agreement and continuing through the
first anniversary of the Closing Date, Seller shall, or shall cause
Seller's property manager (the "Property Manager"), as applicable,
from time to time, upon reasonable advance written notice from Buyer,
and at Buyer's sole cost and expense, provide Buyer and its
representatives with reasonable access to all of Seller's information
and documentation relating to the Property, provided the same shall
then be in Seller's (or a representative or affiliate of Seller's)
possession, which information is relevant and reasonably necessary, in
the opinion of the outside accountants of Buyer, to enable Buyer and
Buyer's outside accountants to file financial statements, pro formas
and any and all other information in compliance (at Buyer's cost) with
any or all of (a) Rule 3-05 or 3-14 of Regulation S-X of the SEC; (b)
any other rule issued by the SEC and applicable to Buyer or its
subsidiaries; and (c) any registration statement, 424(b) prospectus,
report or disclosure statement filed with the SEC by or on behalf of
Buyer. Seller shall reasonably cooperate with Buyer to cause any SEC
audit requirements to be completed and delivered to Buyer within a
reasonable time period to insure that all SEC filing requirements are
met, and Buyer shall reimburse Seller for all reasonable
out-of-pocket, third-party costs and expenses paid to third parties by
Seller in connection therewith. Seller shall also authorize, and shall
cause the Property Manager to authorize, as applicable, any attorneys
who have represented Seller or the Property Manager, as applicable, in
material outstanding litigation pertaining to or affecting the
Property to respond, at Buyer's expense, to inquiries from Buyer's
representatives, attorneys and independent accounting firm. Seller
shall also provide and/or shall cause the Property Manager, as
applicable, to provide to Buyer's independent accounting firm a signed
representation letter which would be sufficient to enable an
independent public accountant to render an opinion on the financial
statements related to the Property.
(l) Tax Returns and Other Filings. Proper and accurate amounts have been
withheld by Seller from its employees who will or could become
employees of Buyer after the Closing Date for all periods in full and
complete compliance with the tax withholding provisions of applicable
state and federal laws. Proper and accurate returns have been filed by
Seller for all periods for which returns were due with respect to
income tax withholdings, social security and unemployment taxes of
such employees. The amounts shown on such returns to be due and
payable have been paid in full.
(m) Employee Matters. To the best of Seller's knowledge, the manager of
the Motels has no employment agreements, or any agreements that
contain any severance or termination pay liabilities, or any
obligations for any bonus, deferred compensation, or similar amounts
with respect to any employees working on-site at the Motels. To the
best of Seller's actual knowledge, the manager of the Motels has no
employee with respect to whom there is any accrued or potential
liability for sick leave or vacation pay for periods up to the Closing
Date with respect to any employees working at the Motels.
(n) Preservation of Relationships. Prior to the Closing Date, Seller shall
use reasonable efforts (without making any commitments on behalf of
Buyer) to preserve for Buyer the present relationships of Seller with
its suppliers and customers and others having business relations with
them.
(o) Access to Information. During the period from the date hereof to the
Closing Date Seller shall give Buyer and its duly authorized
representatives full access to all books, records and facilities of
Seller which relate to the Property so that Buyer may conduct such
inspection, investigation and review of the financial records,
business and properties of Seller being purchased hereunder as Buyer
deems appropriate.
(p) Release of Information. Within 10 days after acceptance and execution
of this Agreement by Seller, Seller will authorize the Motels'
franchisors to release to Buyer any and all information regarding the
franchise agreement affecting the Motels, including all royalty
reports and operating reports relating to the Motels. Seller agrees to
execute any such documents required by said franchisor to release such
information. Further, within 10 days after acceptance and execution of
this Agreement by Seller, Seller shall deliver to Buyer true and
correct copies of all service contracts for the Property as well as
income tax returns, profit and loss statements and operating
statements for Seller's last three fiscal years.
(q) Environmental. To the best of Seller's actual knowledge, no notice has
been served on Seller from any entity, governmental body or individual
claiming any violation of any law, regulation, ordinance or code, or
requiring compliance with any law, regulation, ordinance or code,
demanding payment or contribution, for environmental damage or injury
to natural resources. To the best of Seller's actual knowledge, Seller
has not received any notice, whether written or oral, from any person
that Seller or the Property is the subject of any investigation or
proceeding pertaining to the presence of or the release or threatened
release of any Hazardous Material in violation of applicable
Environmental Laws, any claim arising from, based on, or relating to
any environmental condition at or involving the Property, or the
compliance or noncompliance with any Environmental Laws. For purposes
of this Agreement:
"Environmental Laws" shall mean any present federal, state, and
local law, regulation or ordinance and any amendments thereto,
permits, directives, and other requirements of governmental
authorities relating to the environment, public health, safety
(including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. xx.xx. 9601
to 9675), or to any Hazardous Material.
"Hazardous Material" shall mean any substance or material
regulated under any Environmental Laws, including without
limitation any "hazardous substance," "solid waste," "hazardous
waste," "petroleum," or "petroleum product," and any other
substance or material whose presence would be detrimental to
property, health, or the environment.
(r) Survival of Representations, Warranties, Covenants and
Indemnifications. The representations, warranties, covenants,
agreements and indemnifications contained in this Section 6 of this
Agreement shall survive for a period of six (6) months from and after
the Closing.
7. AS IS CONVEYANCE. Purchaser acknowledges that the Property is being
conveyed by Seller on an AS-IS-WHERE-IS-WITH-ALL-FAULTS-BASIS-IN-ITS-PRESENT-
CONDITION and, except as specifically provided in this Agreement, Seller makes
no representations, express or implied, or arising by operation of law or
otherwise, including, but not limited to any warranty of condition,
merchantability or fitness for a particular purpose as to the information
provided by Seller or the Property.
8. Survey. Buyer may cause the Property to be surveyed by a competent, duly
licensed land surveyor in the state where the Property is located, which survey
shall show the Property free from any material defects, discrepancies or
conflicts in boundary lines and encroachments. The survey shall be an "as-built"
survey showing, inter alia, all boundaries, improvements, encroachments,
easements, roadways, rights-of-way and rights of access to public streets. If
the survey discloses any such discrepancies, conflicts, defects or encroachments
regarding the Property, Buyer shall have the right to make written request of
Seller to cure the same in like manner as provided in Section 8 below, if Seller
elects not to cure such matters or if the same are not timely cured, Buyer shall
have the right to rescind this Agreement or waive such defect, and Buyer shall
be deemed to have waived such matters unless this Agreement is rescinded in
writing by Buyer within seven (7) of the election of Seller not to cure or the
failure of Seller to cure in a timely manner. These, rights shall be the sole
remedy Buyer shall have against Seller. In the event Buyer elects to thus
rescind this Agreement, the Deposit shall be immediately refunded to Buyer and
the parties shall be discharged from all further obligation or liability under
this Agreement.
9. Evidence of Title. Buyer shall order a title insurance commitment for an
ALTA Owner's policy in the full amount of the Purchase Price from a title
company designated by Buyer (the "Title Company"). Buyer shall have until the
Termination Date (as that term is defined in Section 18 below) to notify Seller
of any defects in title, other than the permitted exceptions, which render title
unmarketable, or of any survey defects under Section 8 above, otherwise Buyer
shall be deemed to have approved title to and the survey of the Property. Seller
shall have until Closing, or such additional time (not to extend beyond December
31, 2005) as Buyer may allow at its discretion, to cure any defects and, if not
cured in such time, Buyer shall have the right to rescind this Agreement or
waive such defects. These rights shall be the sole rights and remedies Buyer
shall have against Seller. In the event Buyer elects to thus rescind this
Agreement, the Deposit shall be immediately refunded to Buyer and the parties
shall be discharged from all further obligation or liability under this
Agreement.
10. Loss or Damage Prior to Closing. Risk of loss arising from fire,
windstorm, explosion, condemnation, or other casualty ("Loss") to the Property
shall be borne by Seller until the Closing Date. In the event any material
Property is subject to a Loss prior to the Closing Date, Buyer may elect either
to accept the proceeds of any insurance or any condemnation award as full
settlement for the Loss or, alternatively, may elect to terminate this
Agreement. In the event of any such Loss occurs prior to the Closing Date,
Seller shall notify Buyer within 5 business days after it receives notice of
such Loss and Buyer shall then have 10 days after receipt of such notice to
review the Property as to which the Loss occurred and advise Seller of Buyer's
election under this Section 9.
11. Pro Rata Adjustments. The following adjustments shall be computed as of
the Closing Date and prorated at the Closing:
(a) Real Estate Taxes and Assessments. Consolidated real estate taxes and
any personal property taxes assessed for the tax year in which Closing
occurs shall be prorated as of the Closing based on the latest tax
bills available which adjustment shall be final and binding upon the
parties after the date of Closing; all prior taxes shall be paid by
Seller and all subsequent taxes shall be paid by Buyer. Seller shall
pay all special assessments for public improvements constructed or
under construction prior to the Closing.
(b) Utility Charges. Proration of sewer and water rents and other utility
charges shall be made as of Closing. To the extent such charges are
based upon meter readings, the meter readings shall be made as close
as reasonably possible to the Closing Date.
(c) Revenues/Operating Expenses. All revenues generated from or with
respect to the Motels, and all operating expenses of the Motels shall
be prorated as of midnight the day before Closing Date. All prepaid
rent, utility deposits and similar prepaid items of expense shall be
similarly prorated.
(d) Franchisor Required Capital Expenses. Buyer shall be responsible for
the payment of all capital expenditures required by franchisors and
identified on Exhibit E attached hereto, but only for that work to be
done after the Closing Date. Buyer shall assume Seller's obligations
under all contracts identified on Exhibit E attached hereto, but only
for that work to be done after the Closing Date.
12. Expenses. Except as otherwise specifically provided in this Agreement,
the parties shall be liable for expenses as follows:
(a) Document or Transfer Taxes. Seller shall pay the cost of any required
documentary or transfer taxes due in connection with the transfer,
conveyance, assignment or delivery of the Property or any instruments
in connection therewith pursuant to this Agreement.
(b) Recording Fees. Buyer shall pay any recording fees (other than
documentary or transfer taxes) required for recording the deeds
described in Section 4(c)(ii) above.
(c) Title Insurance. Buyer shall pay the cost of obtaining the title
insurance under Section 8, above.
(d) Survey. Buyer shall pay the cost of providing the survey under Section
7, above.
(e) Escrow Fees. Seller and Buyer shall each pay one-half of the cost of
all escrow fees necessary for the closing of the transaction
contemplated by this Agreement.
13. Benefit. This Agreement shall be binding upon and inure to the benefit
of Seller and Buyer and their respective successors and assigns.
14. Notices. All notices which are required or may be given pursuant to the
terms of this Agreement shall be in writing and either be sent by facsimile
transmission or be in writing and shall be delivered personally or mailed by
registered, certified or express mail, postage prepaid, as follows:
If to Seller, to: Independent Property Owners of America, LLC
x/x Xxxxxxx X. Xxxxx, XXX
Xxxxxxxx & Strudwick
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Independent Property Operators of America, LLC
000 Xxxxxxxx Xxxxxxx, Xxxxx X
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Facsimile #: (000) 000-0000
With copy to: Xxxxxx X. Xxxxxxx
XxXxxxx Xxxx, A Professional Corporation
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile #: (000) 000-0000
If to Buyer, to: Supertel Limited Partnership
000 Xxxxx 0xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile #: (000) 000-0000
With copy to: Xxxxxx X. Xxxxxx
XxXxxxx North Xxxxxx & Xxxxx, PC LLO
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Facsimile #: (000) 000-0000
15. Waivers. The waiver by any party hereto of a breach of any portion of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach.
16. Specific Performance/Time of the Essence. Either party may seek
specific performance and enforcement of this Agreement by a court of law having
jurisdiction hereof in the event of default by the other party in the
performance of its obligation under the terms of this Agreement. Time is of the
essence to performance of the obligations of the parties under this Agreement
17. Broker's Fees. Both parties hereto represent and warrant to the other
party that no real estate broker or agent has been involved in this transaction.
Seller and Buyer shall indemnify and hold harmless each other from any loss,
damage or claim resulting from breach of this representation and warranty.
18. A. Conditions Precedent to Buyer's Obligations. Buyer's obligations
under this Agreement are subject to the satisfaction of all of the conditions
set forth in this Section 18.A at or prior to the date that is 15 days prior to
the Closing Date (the "Termination Date"). In the event Buyer elects to
terminate or rescind this Agreement by reason of any condition precedent not
having been satisfied within the time limited, Buyer shall notify Seller on or
before the Termination Date, whereupon the Escrow Agent shall immediately refund
the Deposit to Buyer without any further action of Buyer or Seller being
required and all further rights and obligations of the parties under this
Agreement shall terminate. If Buyer does not timely terminate this Agreement for
failure of a condition being satisfied, such conditions shall be deemed waived.
The conditions precedent are as follows:
(a) Seller shall have complied with, or Buyer shall have waived, all the
requirements of Sections 8 and 9 above, regarding survey of and title
to the Property.
(b) Environmental surveys of the Property and engineering studies of the
buildings and facilities located on the Property, to be conducted by
Buyer at Buyer's own expense, reveal the Property is suitable for
Buyer's intended use of the Property, and the Property is free of any
underground storage tanks and any hazardous or toxic waste or
material. Buyer shall be allowed access to the Property in order to
conduct such soil tests and environmental surveys.
(c) Buyer shall have obtained appraisals on the Property satisfactory to
Buyer's lender.
(d) The Property shall be properly zoned, or proper special use permits or
zoning variances shall have been obtained, so as to permit the
operation of motels at the Property.
(e) All of Seller's representations, warranties and covenants contained in
Section 6 above shall be true and correct in al material respects as
of the Closing.
(f) Buyer shall have negotiated and obtained new franchise agreements with
the franchisors of Comfort Suites, Comfort Inn and Hampton Inn &
Suites granting Buyer franchise agreements for the Motels and
protection agreements defining areas of protection, for the exclusive
operation, by Buyer, of the Comfort Inn in Fayetteville, North
Carolina, Comfort Suites in Fayetteville, Indiana, Lafayette, Indiana,
Marion, Indiana and South Bend, Indiana and Hampton Inn & Suites in
Warsaw, Indiana acceptable to Buyer in Buyer's sole discretion. Buyer
shall be responsible for payment of all costs incurred and payments
due to such franchisors in connection with obtaining such franchise
agreements.
(g) Seller shall have performed all of its obligations under this
Agreement.
(h) Buyer shall have approved the terms and conditions and effect on the
Property of the leases disclosed by Seller to Buyer pursuant to
Section 6(a) above.
18. B. Conditions Precedent to Seller's Obligations. Seller's obligations
under this Agreement are subject to the satisfaction of all of the conditions
set forth in this Section 18 B. at or prior to the Termination Date. In the
event Seller elects to terminate or rescind this Agreement by reason of any
condition precedent not having been satisfied within the time limited, Seller
shall notify Buyer on or before the Termination Date, whereupon the Escrow Agent
shall immediately refund the Deposit to Buyer without any further action of
Buyer or Seller being required and all further rights and obligations of the
parties under this Agreement shall terminate. If Buyer does not timely terminate
this Agreement for failure of a condition being satisfied, such conditions shall
be deemed waived. The conditions precedent is as follows:
Seller shall have negotiated and obtained a consent to the sale of the
Property and termination at Closing of the existing franchise agreements with
the franchisors of Comfort Suites, Comfort Inn and Hampton Inn & Suites pursuant
to a consent and termination agreement satisfactory to Seller. If Seller does by
the Termination Date terminate this Agreement by written notice to Seller for
failure of this condition being satisfied, such condition shall be deemed
waived.
19. Noncompetition. In order to further induce Buyer to enter into this
Agreement and consummate the transactions contemplated hereunder, Seller agrees
that from and after Closing and for a period of three (3) years thereafter,
Seller and Xxxxxxx X. Xxxxx, III shall not, within the Trade Area (as defined
below) own or operate a motel or hotel of a type directly competitive with the
business of Seller as conducted by Buyer following the Closing. At the Closing,
Seller and Xxxxxxx X. Xxxxx, III will execute and deliver to Buyer a
Noncompetition Agreement memorializing the terms of the previous sentence, in
the form attached hereto as Exhibit F. For purposes of this Section 19, "Trade
Area" shall mean Fayetteville, North Carolina, Ft. Xxxxx, Indiana, Lafayette,
Indiana, Marion, Indiana, South Bend, Indiana, Warsaw, Indiana and anywhere
within the metropolitan area of any of the aforementioned cities.
The parties hereto acknowledge that the restrictions in this noncompetition
agreement are essential to the Buyer's successful operation of the Motels and
Buyer would not have entered into this Agreement except for the inducement of
the restrictions contained herein. The parties hereto further acknowledge that
these restrictions are reasonable and necessary means of protecting Buyer's
legitimate business interests in the Property and the Motels.
20. Indemnification of Buyer by Seller. Seller shall, and hereby agrees to,
jointly and severally, indemnify and hold Buyer harmless against and in respect
of:
(i) All debts, liabilities and obligations of Seller of any nature,
whether accrued, absolute, contingent, or known or unknown on the
Closing Date, existing or arising on or resulting from events
which occurred or failed to occur on or before the Closing Date,
to the extent not specifically assumed by Buyer hereunder.
(ii) Any liability, loss, claim, damage or deficiency resulting
directly or indirectly from any misrepresentation, breach of
warranty or non-fulfillment of any agreement on the part of
Seller under this Agreement, or from any misrepresentation in or
omission from any certificate or other instrument furnished or to
be furnished to Buyer hereunder;
(iii)All other actions, suits, proceedings, demands, assessments,
adjustments, costs and expenses incident to the foregoing,
including, without limitation, attorneys' fees and other
out-of-pocket expenses.
Notwithstanding anything to the contrary provided in this Agreement, Seller
shall only be required to indemnify Buyer to the extent Seller's indemnification
obligations under this Section 20 exceed $10,000.00 in the aggregate.
21. Acceptance of Agreement. Buyer's signature hereon constitutes an offer
to purchase the Property upon the terms and conditions hereof. Unless acceptance
hereof is executed by Seller and the duly executed counterpart delivered to
Buyer either in person, by facsimile transmission, by email or by depositing in
U. S. Mail, as provided in Section 13, above, on or before September 14, 2005 at
5:00 p.m., this offer shall be deemed revoked.
IN WITNESS WHEREOF, the parties have executed this Agreement in multiple
counterparts, each of which shall be deemed an original and all of which shall
constitute one agreement, as of the date first written above.
INDEPENDENT PROPERTY OPERATORS OF SUPERTEL LIMITED PARTNERSHIP, a Virginia
AMERICA, LLC limited partnership
By: Supertel Hospitality REIT Trust
By: Xxxxx Management II, Inc. Its: General Partner
/s/ Xxxxxxx X. Xxxxx, III By: /s/ Xxxx X. Xxxxxxx
By:________________________________ __________________________________
Xxxxxxx X. Xxxxx, III, President Xxxx X Xxxxxxx
Title: President
