PURCHASE AND SALE AGREEMENT
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This Purchase and Sale Agreement (this "Agreement") is entered into as of
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December 6, 1996, between INNHOME AUSTIN, LTD., a Texas limited partnership
("Seller"), and HOMEGATE HOSPITALITY, INC., a Delaware corporation
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("Purchaser").
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In consideration of the mutual covenants set forth herein and in
consideration of the ▇▇▇▇▇▇▇ money deposit herein called for, whose receipt and
sufficiency are acknowledged by Seller, the parties agree as follows:
Section 1. Sale and Purchase. Seller shall sell, convey, and
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assign to Purchaser, and Purchaser shall purchase and
accept from Seller, for the Purchase Price (defined
below) and on and subject to the terms and conditions
herein set forth, the following:
1. The tracts or parcels of land situated in ▇▇▇▇▇▇ County, Texas,
described in Exhibit A, together with all rights and interests
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appurtenant thereto, including all of Seller's right, title, and
interest in and to adjacent streets, alleys, rights-of-way, and any
adjacent strips and gores of real estate (the "Land"); all
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improvements located on the Land, including, without limitation,
the 3-story extended-stay hotel facility consisting of one building
containing 149 units, parking garage, and all other buildings,
structures, fixtures, parking areas, and other improvements presently
located upon the Land (collectively, the "Improvements"); and all
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rights, titles, and interests appurtenant to the Land and
Improvements, including, without limitation, all rights to receive
water and wastewater capacity and utilities.
2. All tangible personal property and fixtures (which are not part
of the Improvements) of any kind attached to, or located upon and used
in connection with the ownership, maintenance, use or operation of the
Land or Improvements and owned by Seller (or acquired by Seller and so
employed prior to Closing, as defined herein), including, but not
limited to, all furniture, furnishings, fixtures, equipment, and
signs; all heating, lighting, plumbing, drainage, electrical, air
conditioning, and other mechanical fixtures and equipment and systems;
all elevators, escalators, and related motors and electrical equipment
and systems; all hot water heaters, furnaces, heating controls, motors
and boiler pressure systems and equipment; all shelving and
partitions, all ventilating equipment, and all incinerating and
disposal equipment; all tennis, pool and health club and fitness
equipment and furnishings; all carpet, drapes, beds, furniture,
televisions, telephones and other furnishings; and all stoves, ovens,
freezers, refrigerators, dishwashers, disposals, kitchen equipment and
utensils, tables, chairs, plates and other dishes, glasses,
silverware, serving pieces, apparatus and utensils (collectively, the
"FF&E").
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3. All merchandise, supplies, inventory and other items owned by
Seller and used for the operation or maintenance of guest rooms, guest
services, restaurants, lounges, swimming pools, health clubs, and
other common areas and recreational areas located within or relating
to the Improvements, office supplies and stationery, advertising and
promotional materials (whether stored on the Land or otherwise),
towels, washcloths, mattresses, pillows, linens and bedding, cleaning,
paper and other supplies, napkins and tablecloths, upholstery
material, carpets, rugs, furniture, engineers' supplies, paint and
painters' supplies, employee uniforms, and pool, tennis court and
other recreational area cleaning and maintenance supplies
(collectively, the "Supplies").
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4. To the extent owned by Seller and assignable, all leases,
licenses, and other agreements with respect to tenancies of the nature
of space leases, if any, together with all amendments, modifications,
renewals and extensions thereof, and all guaranties by third parties
of the obligations of tenants, licensees, and similarly situated
parties thereunder, if any (collectively, the "Leases"), and all
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occupancy agreements, advance booking agreements, convention
reservation agreements, or other similar agreements, other than Leases
demising space in, providing for the use or occupancy of, or otherwise
similarly affecting or relating to the use or occupancy of the
Improvements or Land, together with all amendments, modifications,
renewals and extensions thereof, and all guaranties by third parties
of the obligations of the holder of the occupancy right and similarly
situated parties thereunder (collectively, the "Occupancy
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Agreements").
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5. To the extent owned by Seller and assignable, all prepaid rents
and deposits, including, but not limited to, utility deposits,
refundable security deposits and rental deposits, and all other
deposits for advance reservations or future services, made in
connection with the use or occupancy of the Improvements
(collectively, the "Deposits"); provided, however, that to the extent
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Purchaser does not receive the Deposits at Closing, Purchaser shall be
entitled to a credit against the Purchase Price in an amount equal to
the Deposits, and Purchaser agrees to assume all of Seller's liability
and obligations, if any, with regard to the Deposits so received or
credited.
6. Any and all of the following to the extent owned by Seller and
assignable that relate to or affect in any way the design,
construction, ownership, use, occupancy, leasing, maintenance,
service, or operation of the Land, Improvements, FF&E, Leases,
Deposits, Supplies, or Occupancy Agreements.
1. To the extent Purchaser elects to take assignment thereof,
contracts and agreements, such as labor, collective bargaining,
service, or maintenance contracts, management or employment
agreements, utility contracts, contracts for the purchase of
supplies, insurance contracts, airline agreements, corporate
account agreements, travel agency agreements, telephone service
agreements, and yellow pages or other advertising agreements
(collectively, the "Service Contracts");
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2. Warranties, guaranties, indemnities, and claims for the
benefit of Seller (collectively, the "Warranties");
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3. Licenses permits, utility reservations, certificates of
occupancy, and similar documents issued by any federal, state,
or municipal authority or by any private party (collectively,
the "Licenses");
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4. Trade names, trade styles, trademarks, service marks, and
other identifying material, and all variations thereof, together
with all related intellectual property and goodwill
(collectively, the "Tradenames");
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5. Plans, drawings, specifications, surveys, soil reports,
engineering reports, inspection reports, environmental audits
and other technical descriptions and reports to the extent in
Seller's possession or control (collectively, the "Plans and
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Specs"); and
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6. Leases of any FF&E and other contracts permitting the use of
any FF&E at the Improvements, if any (collectively, the "FF&E
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Leases").
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7. All books and records, promotional material, telephone numbers,
tenant data, marketing and leasing material and forms, market studies,
keys, active guest ledger, tray ledger, and other materials of any
kind owned by Seller and in Seller's possession or control, or to
which Seller has access or may obtain and has the right to convey and
deliver which are or may be used in Seller's ownership or use of the
Land, the Improvements or the FF&E, whether any of the foregoing are
in hard copy form or in computerized data storage form (collectively,
the "Records"); provided, however, that a copy of any such material
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which constitutes a part of Seller's continuing business or financial
records may be retained by Seller.
8. Seller's ▇▇▇▇▇ cash, cash drawers, and house accounts as of 2:00
A.M. on the Closing Date (defined below), but excluding Seller's
accounts receivable, reserves, and bank accounts (the "Cash and
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Equivalents"). The Cash and Equivalents shall be separately paid for
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by Purchaser by adding the amount thereof to the Purchase Price at
Closing.
The above listed items are herein collectively called the "Property."
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Section 2. Purchase Price. The price for which Seller shall sell and
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convey the Property to Purchaser, and which Purchaser shall pay
to Seller, is $7,700,000 (the "Purchase Price"), to be paid in
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cash or cash equivalent as set forth in Section 9.(a)(1),
subject to adjustment as provided herein. Subject to adjustments
in accordance with the terms of this Agreement, the Purchase
Price shall be allocated among the Land, Improvements, FF&E, and
the other components of the Property in the manner determined by
Purchaser and
Seller prior to the end of the Contingency Period (defined
below), provided that $400,000 of the Purchase Price shall be
allocated to the cancellation of the existing management
agreement for the Property. At Closing, at Purchaser's option,
either Seller shall pay up to $130,000 of any loan
origination or other related financing fees incurred by
Purchaser relating to its acquisition of the Property or
Purchaser shall receive a credit of $130,000 against the
Purchase Price.
Section 3. ▇▇▇▇▇▇▇ Money. Within three business days after the
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execution hereof, Purchaser shall deliver to Heritage Title
Company of Austin, Inc., ▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Title
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Company"), a check in the amount of $25,000 which the Title
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Company shall immediately deposit in an interest-bearing account
until the ▇▇▇▇▇▇▇ Money is delivered pursuant to the provisions
hereof. The term "▇▇▇▇▇▇▇ Money" means the amount so deposited
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by Purchaser, together with all interest earned thereon while in
the custody of Title Company. Seller and Purchaser stipulate
that Purchaser's agreement to so deposit the ▇▇▇▇▇▇▇ Money is
sufficient consideration to support this Agreement
notwithstanding Purchaser's rights under Section 5; however, if
Purchaser does not timely deposit the ▇▇▇▇▇▇▇ Money, then this
Agreement shall terminate and be of no further effect.
Section 4. Delivery of Information by Seller.
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1. Within ten days after the date of this Agreement, Seller, at its
expense, shall deliver or cause to be delivered to Purchaser the
following:
1. commitment for Title Insurance (the "Title Commitment") from
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the Title Company setting forth the status of the title of the
Land, and the Improvements and showing all liens, claims,
encumbrances, easements, rights-of-way, encroachments,
reservations, restrictions, and all other matters of record
affecting the Land, and the Improvements;
2. true, complete, and legible copies of all documents referred
to in the Title Commitment and tax certificates showing the
current outstanding ad valorem taxes due on the Land and the
Improvements (the "Title Documents"); and
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3. current searches of all uniform commercial financing
statements filed with the office of the Secretary of State of
Texas and the County Clerk of the County where the Land is
located (collectively, the "UCC Search"), against Seller
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reflecting all effective financing statements then of record
relating to the Property or any part thereof.
2. Within ten days after the date of this Agreement, Seller, at its
expense, shall deliver or cause to be delivered to Purchaser a survey
(the "Survey") consisting of a plat and field notes prepared by a
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licensed surveyor acceptable to Purchaser and Title Company, which
Survey shall reflect the actual dimensions of, and area within, the
Land, the location of any easements, rights-of-way, setback lines,
encroachments, or overlaps thereon or thereover, and the outside
boundary lines of all improvements, identify by recording
reference all easements, rights-of-way, setback lines, and other
matters referred to in the Title Commitment, include the
surveyor's registered number and seal, the date the Survey was
performed, and a certificate satisfactory to Purchaser, reflect
that there is access to and from the Land from a publicly dedicated
street or road, be sufficient to cause the Title Company to delete
(except for "shortages in area") the printed exception for
"discrepancies, conflicts or shortages in area or boundary lines, or
encroachments, or any overlapping of improvements" in the owner's
policy of title insurance to be delivered pursuant to Section 9,
reflect any area within the Land that has been designated by the
Federal Insurance Administration, the Army Corps of Engineers, or any
other governmental agency or body as being subject to special or
increased flooding hazards, and vii. in general, comply with the
requirements of the Texas Society of Professional Surveyors for a
Category 1A, Condition II survey. For purposes of the property
description to be included in the special warranty deed to be
delivered pursuant to Section 9, the field notes prepared by the
surveyor shall control any conflicts or inconsistencies with Exhibit A
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and such field notes shall be incorporated herein by this reference
upon their completion and approval by Purchaser.
3. As soon as practicable but in no event later than ten days after
the date of this Agreement, Seller, at its expense, will deliver to
Purchaser true, correct and complete copies (or where specifically
indicated, original counterparts) of the following, together with all
amendments, modifications, renewals or extensions thereof (provided,
however, in the event that the Closing does not actually occur,
Purchaser shall return such information to Seller):
1. All Warranties relating to the Property or any part thereof
which are still in effect;
2. Financial statements, operating statements, budgets and
Federal and State income tax returns relating to the Property,
to the extent that such items have been prepared, for the
current year to date and each of the years prior to the year of
this Agreement that Seller has owned the Property (the
"Financial Statements"), and, to the extent not reflected in
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such items and reasonably available to Seller, itemization of
annual insurance premiums for each such year for fire,
extended coverage, workers' compensation, vandalism and
malicious mischief, general liability, business interruption,
rents and other forms of insurance shown thereon; expenses
incurred for water, electricity, natural gas, sewer and other
utility charges; total rents and revenues collected from
tenants and from hotel guests and other patrons of the Property;
management fees; maintenance, repairs and other expenses
relating to the management and operation of the Property;
historical occupancy statistics for the Property; and all
capital expenditures made during the aforementioned periods;
3. All Licenses;
4. Copies of all documents, filings, and instruments relating
to the Tradenames;
5. All of the most recent real estate and personal property tax
statements with respect to the Property and notices of appraised
value for the Land and Improvements;
6. To the extent in Seller's possession or control or readily
obtainable without material expense, all engineering and
architectural plans, drawings and specifications relating to the
Property, as well as copies of any environmental reports,
engineering reports and subsurface or soils studies affecting
the Property. If the Property is purchased by Purchaser, to the
extent assignable, all such documents and information shall
thereupon be and become the property of Purchaser without
payment of any additional consideration therefor;
7. All Service Contracts and a schedule of such Service
Contracts including, without limitation, a schedule of media and
advertising commitments and programs (the "Schedule of Service
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Contracts");
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8. All Leases, if any, a schedule of any such Leases ("Schedule
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of Leases") and all agreements for real estate commissions,
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brokerage fees, finder's fees or other compensation payable by
Seller in connection therewith which would be binding on
Purchaser after Closing, if any;
9. To the extent in Seller's possession or control, all notices
received from governmental authorities in connection with the
Property within the most recent 12 months;
10. A list of all current employees of Seller at the Property
and their salaries or wages and all employment benefits
accompanied by copies of their employment agreements and/or
union contracts, if any;
11. All FF&E Leases, if any, and a schedule of any such FF&E
Leases (the "Schedule of FF&E Leases");
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12. Seller's guest comments results and call reports relating to
potential customers, if any, with respect to the Property;
13. The most recent inventory of the FF&E and Supplies to the
extent such inventory exists;
14. A schedule of Deposits and the utility reservations (the
"Schedule of Deposits and Utility Reservations");
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15. Standard market segment reports identifying the aggregate
segments by month for 1996 and including the number of room
nights and rate information, and group business information for
1996 (as well as tentative and other booking information for
1997) identifying only the top five (5) clients in each group
segment, the number of groups, the average daily rates, the
receivables by collection category, any special series (such as
transportation or food and/or beverage service) included in the
rate or otherwise committed, and the termination dates of the
various agreements giving rise to the foregoing. Purchaser
agrees that it shall not make use of the names of Seller's
clients disclosed in the above information for competitive
purposes prior to Closing or if this Agreement does not close;
16. Copies of all records or other information relating to
advance bookings for the Property; and
17. Such other documents or information to the extent in
Seller's possession or control as may be reasonably requested by
Purchaser no later than 20 days after the execution hereof.
Section 5. Right of Inspection; Contingency Period.
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1. From the date of execution hereof to the Closing Date, Seller
shall afford Purchaser and its representatives a continuing right to
inspect, at reasonable hours, the Property, and all books, records,
contracts, and other documents or data pertaining to the ownership,
operation, or maintenance of the Property; however, in conducting its
inspection Purchaser shall not unreasonably interfere with the
business and operations of Seller. Further, Purchaser shall indemnify,
defend and hold Seller harmless from all costs, damages and
liabilities arising out of Purchaser's inspection of the Property.
2. If for any reason Purchaser, in its sole discretion, is not
satisfied with the Property, then Purchaser may terminate this
Agreement in accordance with Section 13.(b), by delivering to Seller a
written notice of termination at any time during the period from the
date hereof until 5:00 p.m. Dallas, Texas time, December 23, 1996 (the
"Contingency Period"). The Contingency Period shall be extended for
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each day Seller is late in delivering the items required under Section
4 (other than Section 4.(c)(17)) which are material to this
transaction. If Purchaser does not so terminate this Agreement prior
to the expiration of the Contingency
Period, Purchaser shall have waived its right to terminate this
Agreement under this Section 5.
3. Purchaser and Purchaser's authorized representatives, auditors,
agents, employees and lenders shall have the right, prior to the end
of the Contingency Period, at Purchaser's expense, to enter upon and
pass through the Property during normal business hours and upon at
least 24 hours prior notice to Seller to examine and inspect the then
existing books, records, surveys, plans, specifications, permits,
certificates of occupancy and other files that are relevant to the
management, ownership, operation, use, occupancy, construction or
leasing of the Property, which are in Seller's possession or control,
and which have not been otherwise provided to Purchaser as required
elsewhere herein. No access will be allowed with respect to the
Occupancy Agreements or guest room bookings other than the information
required in Section 4.(c)(15) above. In addition, Purchaser may, upon
at least 24 hours prior notice to Seller, have its agents, employees
or auditors conduct an audit (the "Audit") of the books and records of
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the Property which Audit shall be performed during the Contingency
Period and shall be performed as one generally continuous inspection
and not subject to periods of interruption or delay, the intention
being that Purchaser and its representatives, auditors, agents,
employees and lenders will make their best efforts to minimize
disruption of Seller's business while still being allowed the
opportunity fully to review, examine and inspect all such matters. In
connection with Purchaser's inspections and studies during the
Contingency Period, upon at least 24 hours prior notice to Seller,
Purchaser may engage in discussions with the Property's General
Manager, Controller, Director of Engineering, and Director of
Marketing. Purchaser and its representatives and employees shall not
unreasonably interfere with the operation of the Property or the right
to privacy of guests and patrons of the Property. Further, and not in
limitation of Section 4.(c)(2) above, Purchaser's representatives
shall have access to all financial and other information relating to
the Property sufficient to enable them to prepare audited financial
statements in conformity with Regulation S-X of the Securities and
Exchange Commission (the "SEC") and to enable them to prepare a
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registration statement, report or disclosure statement for filing with
the SEC on behalf of Purchaser. Prior to the end of the Contingency
Period, Seller shall also provide to Purchaser's representatives a
signed representation letter sufficient to enable an independent
public accountant to render an opinion on the financial statements
related to the Property; provided, however, that any information
provided by Seller in such letter shall be limited to Seller's actual
knowledge and shall not expand the representations and warranties made
by Seller in this Agreement. During the Contingency Period, Seller and
Purchaser shall agree to the form of such letter.
4. Prior to the expiration of the Contingency Period, Purchaser
shall notify Seller in writing of any items of deferred maintenance,
repairs or replacements of any of the Improvements and the reasonable
estimated cost to remedy such matters, including without limitation
those relating to the parking lot (the "Deferred Maintenance"). Seller
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shall use its best efforts to perform the Deferred Maintenance
prior to Closing, provided that Seller shall not be required to spend
more than $40,000 for such Deferred Maintenance. If the Deferred
Maintenance is not completed by Closing, Purchaser may, at Purchaser's
option, elect to receive a credit towards the Purchase Price in the
amount of such outstanding Deferred Maintenance, or require the
amount of such outstanding Deferred Maintenance to be held in escrow
out of the proceeds of the Purchase Price pending Seller's full
performance of the Deferred Maintenance, the form of such escrow
agreement to be negotiated by the parties in good faith before the
Closing Date.
Section 6. Title; Environmental Matters.
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1. Title. Purchaser may, during the Contingency Period, object in
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writing to any liens, encumbrances, and other matters reflected by the
Title Commitment, Title Documents, UCC Search or Survey (any such
objection is herein called an "Objection Notice"). All liens and
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encumbrances to which Purchaser so objects shall be "Non-Permitted
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Encumbrances;" if no Objection Notice is given during the Contingency
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Period, all matters reflected by the Title Commitment, Title
Documents, UCC Search, or Survey, other than liens, shall be
"Permitted Encumbrances." Seller may, but shall not be obligated to,
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cure or remove the Non-Permitted Encumbrances and give Purchaser
written notice thereof within ten days after Seller's receipt of the
Objection Notice (the "Cure Period"); however Seller shall be
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obligated to cure, remove or bond or insure around by Closing all
mortgages, deeds of trust, judgment liens, mechanic's and
materialmen's liens, and other liens against the Property, whether or
not Purchaser timely objects thereto. If Seller does not timely cause
all of the Non-Permitted Encumbrances to be removed, cured, or bonded
or insured around and timely written notice thereof to be given to
Purchaser, then Purchaser may either terminate this Agreement in
accordance with Section 13.(b) by delivering to Seller notice thereof
within ten days after the expiration date of the Cure Period or
purchase the Property subject to the Non-Permitted Encumbrances (other
than liens that Seller is obligated to cure, remove, or bond or insure
around), in which case such Non-Permitted Encumbrances shall be
Permitted Encumbrances. Non-delinquent taxes and matters hereafter
specifically approved in writing by Purchaser shall be Permitted
Encumbrances.
If Seller fails to cure, remove, or bond or insure around any liens
affecting the Property by Closing, Purchaser may pay such liens and deduct the
amount paid therefor from the Purchase Price. If any matters affecting title
arise between the date of the Title Commitment and Closing which are created or
caused by Seller and are not cured by Seller before Closing, then Purchaser may,
at its option, (1) terminate this Agreement by delivering
written notice thereof to Seller, in which
case, the ▇▇▇▇▇▇▇ Money shall be returned
to Purchaser and, if such title defect was
caused by Seller, Seller shall pay to
Purchaser all out-of-pocket costs incurred
by
Purchaser in connection with or under
this Agreement, its due diligence, and
other matters relating to the Property
("Purchaser's Contract Costs," which shall
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include, without limitation, reasonable
attorneys' fees and expenses), or reduce
the Purchase Price by the amount
reasonably determined by Purchaser to be
necessary to cure such title defects and
proceed with Closing.
2. Environmental Matters. In connection with its inspections of the
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Property, Purchaser may perform environmental investigations and
audits of the Property. If any such environmental investigation or
audit reveals the presence of Hazardous Materials on, under, or about
the Property, Purchaser may terminate this Agreement in accordance
with Section 13.(b) by delivering written notice thereof to Seller on
or before the last day of the Contingency Period, in which case the
entire ▇▇▇▇▇▇▇ Money shall be returned to Purchaser.
Section 7. Seller's Representations and Warranties. Seller represents
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and warrants to Purchaser that:
1. Seller has full right, power, and authority to execute and
deliver this Agreement and to consummate the purchase and sale
transactions provided for herein without obtaining any further
consents or approvals from, or the taking of any other actions with
respect to, any third parties. This Agreement, when executed and
delivered by Seller and Purchaser, will constitute the valid and
binding agreement of Seller, enforceable against Seller in accordance
with its terms.
2. To Seller's current, actual knowledge, there are no actions,
suits, claims, assessments, or proceedings pending or threatened that
could affect the ownership, operation, or maintenance of the Property,
the zoning classification thereof, or Seller's ability to perform
hereunder, nor are there any special assessment proceedings pending or
affecting the Property.
3. The Improvements have been constructed in a good and
workmanlike manner, free from defects in workmanship and material and,
to the best of Seller's current, actual knowledge, do not require any
repair or replacement other than minor, routine maintenance not
aggregating in excess of $5,000, other than repairs to the parking
lot, and have been constructed and are being occupied, maintained,
and operated in compliance with all applicable laws, regulations,
insurance requirements, contracts, leases, permits, licenses,
ordinances, restrictions, building setback lines, covenants,
reservations, and easements, and Seller has received no notice,
written or oral, claiming any violation of any of the same or
requesting or requiring the
performance of any repairs, alterations, or other work in order to so
comply. A certificate of occupancy has been duly issued with regard to
the Improvements.
4. Seller is the owner of all Personalty free and clear of all
liens, claims, or encumbrances except liens and security interests
that will be released at or before Closing and, to Seller's current,
actual knowledge, all items of Personalty are in good working order
and condition.
5. All bills and other payments due with respect to the ownership,
operation, and maintenance of the Property have been paid or will be
paid prior to Closing in the ordinary course of business.
6. During the period of Seller's ownership, the Property, and to
the best of Seller's current, actual knowledge, any adjacent property,
has not been the site of any activity that would violate any past or
present environmental law or regulation of any governmental body or
agency having jurisdiction over the Property. Solid waste, petroleum,
or petroleum products have not been handled by Seller on the Property,
or to the best of Seller's current, actual knowledge, any adjacent
property, such that they may have leaked or spilled onto the Property
or contaminated the Property and, to Seller's current, actual
knowledge, neither the Property nor any adjacent property contains any
Hazardous Materials. "Hazardous Materials" means any petroleum
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products, flammables, explosives, radioactive materials, asbestos,
radon, or other hazardous waste including without limitation
substances defined as "hazardous substances," "hazardous materials",
"toxic substances," in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Hazardous Materials
Transportation Act, and the Resources Conversation and Recovery Act,
or any other law regulating the discharge of materials into, or
otherwise pertaining to, the environment.
7. All utilities and services necessary for construction and
operation of the Improvements (including, without limitation, road
access, gas, water, electricity, cable, and telephone) are available
at the boundary of the Property and are of sufficient capacity to meet
adequately all needs and requirements necessary for the Improvements
and the current use thereof, and all tap fees and other connection
charges for such utilities and services have been paid. To Seller's
current, actual knowledge, no fact, condition or proceeding exists
which would result in the termination or impairment of the furnishing
of such utilities or services to the Property. To Seller's current,
actual knowledge, no building or other improvement not included in any
part of the Property relies on any part of the Property to fulfill any
zoning, building code parking, open space, or other requirements under
applicable restrictive covenants or any applicable laws, ordinances or
regulations. Seller has no responsibility for maintenance of off-site
pumps, lines, lift stations, or other facilities.
8. All of the exhibits attached hereto, all information delivered
pursuant to Section 4, and all other information hereafter delivered
to Purchaser by Seller shall
contain a full, complete, and accurate statement of the matters
referred to therein. Seller knows of no facts nor has Seller failed to
disclose any fact that would prevent Purchaser from using and
operating the Property as an extended-stay hotel facility.
9. Seller has good and indefeasible fee simple title to the Land,
free and clear of all liens (other than the deed of trust lien in
favor of Bank One, Texas, National Association) and no party, except
as herein set forth, has or shall have on the Closing Date any rights
in, or to acquire, the Property.
10. Seller has not entered into any employment or collective
bargaining agreement with respect to the Property. There are no labor
disputes, organizational campaigns, or union contracts existing or
under negotiation with respect to the Property or the operation
thereof. There are no employees engaged in the operation or
maintenance of the Property for whom Purchaser will be responsible
after Closing.
11. Attached as Schedule 7(l) is a complete and correct list of all
------------
insurance policies maintained by Seller for the Property, describing
the coverage afforded thereby.
l2. Attached hereto as Schedule 7(m) is a complete and correct list
------------
of all Service Contracts setting forth the identity of the parties
thereto, the date of such agreement, the consideration payable
thereunder, the services to be rendered thereunder, and the expiration
date thereof. Except as otherwise expressly indicated on Schedule
--------
7(m), all of the Service Contracts are cancelable on 30 or fewer days
---
notice, without payment of any cancellation consideration.
13. All financial statements, reports, rent rolls, and other data,
including but not limited to information concerning gross rental
income, operating expenses, debt service, and cash flow statements
heretofore furnished by Seller to Purchaser relative to the Property
are true and correct in all material respects and fully and accurately
present the financial condition, the financial results, or other
subject matter thereof as of the dates thereof. All such statements,
reports, information, and other data hereafter furnished by Seller to
Purchaser shall be true and correct in all material respects and shall
fully and accurately present the financial condition, the financial
results, or other subject matter thereof as of the dates thereof.
Seller disclaims any representation or warranty as to the future
operations or profitability of the Property.
14. The current zoning classification of the Property is GO, LO, and
CS-1 (with a special permit site plan) to Seller's current, actual
knowledge, the Improvements have been constructed and are being
occupied and maintained in compliance therewith; and there are no
proceedings pending or, to Seller's current, actual knowledge,
contemplated to alter such zoning classification.
15. To Seller's current, actual knowledge, in all material respects
the Schedule of Service Contracts, Schedule of FF&E Leases, Schedule
of Leases, and Schedule
of Deposits and Utility Reservations, when delivered, will be a true,
correct, and complete list of all Service Contracts, all FF&E Leases,
all Leases, and all Deposits and Utility Reservations in effect at
that time, the copies of the Service Contracts, FF&E Leases, and
Leases when delivered to Purchaser will be true, complete and correct
copies of such Service Contracts, FF&E Leases, and Leases (including,
without limitation, all amendments, modifications, renewals, and
extensions thereof), there are and will be no written or oral
agreements of any kind (other than as provided in clause (iv) below
and other than guest room bookings) binding on the Property or on
Purchaser after Closing, other than the Service Contracts, FF&E
Leases, Leases and Occupancy Agreements, there are and will be no
other written or oral agreements binding on the Property or on
Purchaser after Closing with any tenants, licensees, franchisees,
concessionaires or other persons or entities (collectively, "Tenants,"
-------
and individually, "Tenant") or any guarantors of the Tenants'
------
obligations (collectively, "Guarantors," and individually,
----------
"Guarantor") relating to their use or occupancy other than those
---------
permitted under Section 8.(b)(5) of this Agreement, the Service
Contracts, FF&E Leases, Leases and Occupancy Agreements are in full
force and effect and, to Seller's current, actual knowledge, no
default (beyond applicable grace or cure periods) exists thereunder
and no condition exists that, with the giving of notice or passage of
time, or both, would constitute a default, no Tenant has made any
claim of any right of offset, and to Seller's current, actual
knowledge, the information provided under Section 4.(c)(15) above,
when delivered, will reflect the information contained in the
Occupancy Agreements and guest room bookings which is neither
inaccurate nor incomplete in any material respect. The term "Tenant"
shall refer only to tenants under Leases and not guests of the
Property.
16. Seller has received no notice, and has no current, actual
knowledge, that it lacks any permit, license, or certificate of
authority necessary for the present use and occupancy of the
Improvements.
17. To Seller's current, actual knowledge, Seller and the Property
are in compliance in all material respects (i) with all terms and
conditions of all notices, permits, licenses, registrations,
certificates of occupancy, applications, consents, zoning and/or
building code restrictions, variances, notices of intent, and/or other
authorizations which are required for the use or operation of the
Property, (ii) with all applicable laws, rules, regulations,
ordinances and orders in effect as of the date hereof promulgated by
any federal, state or local executive, legislative, judicial,
regulatory or administrative agency, board or authority, or any
applicable judicial or administrative decision that relate to the
Property, and (iii) with all limitations, requirements, restrictions,
conditions, standards, prohibitions, schedules and timetables
contained in any of the foregoing.
18. To Seller's current, actual knowledge, the use by Seller of any
of the Tradenames does not infringe any United States or state
trademark, service ▇▇▇▇, or
trade name laws existing at the Closing, or constitute actionable
appropriation of rights with respect to any other person, business or
entity.
19. All of Seller's or its manager's employees at the Property
shall be terminated as of the day before the Closing Date unless
Purchaser agrees otherwise prior to Closing. Except as provided in the
first sentence of this section, Purchaser will in no way be obligated
for any employees, or union contracts with respect to employees,
employed by Seller or its manager with regard to the Property either
before or after the Closing. In particular, neither Seller nor its
manager will, between the date hereof and the date of Closing, enter
into any new employment or union contracts or agreements or hire any
new employees that will be binding on Purchaser on or after the
Closing. Except as provided in the first sentence of this section,
Purchaser will not be obligated to give or pay any amount to any
employee of Seller or Seller's manager. Purchaser shall not have any
liability under any pension or profit sharing plan that Seller or its
manager may have established with respect to the Property or their or
its employees. It is expressly agreed that Seller shall be and remain
liable for all accrued salaries, wages, bonuses, profit-sharing, and
other compensation, vacation, sick leave, seniority, worker's
compensation, and welfare benefits, deferred compensation, savings,
pension, profit sharing, 401(k), and retirement plans, and insurance
and other benefits of all employees of the Property whether or not re-
employed by Purchaser and for all liabilities of whatever kind
(including without limitation those arising under COBRA) with respect
to all employees of the Property who are not employed by Purchaser,
and Seller hereby indemnifies Purchaser with respect to the foregoing.
20. To Seller's current, actual knowledge, neither the Property
nor any portion thereof is (i) listed, or eligible to be listed, in
any national, state or local register of historic places or areas, or
(ii) located within any designated district or area in which the
permitted uses of land located therein are restricted by regulations,
rules or laws other than those specified under local zoning
ordinances.
21. To Seller's current, actual knowledge, except as provided
in the Permitted Exceptions, there are no, and it has not received any
written notice of, any special taxes or assessments relating to the
Property or any part thereof or any planned public improvements that
may result in a special tax or assessment against the Property and any
of same which are Permitted Exceptions shall be current as of the
Closing Date. Otherwise, all real estate, personal property, sales,
and other taxes assessed against the Seller in connection with the
Property or the operation of the Property which are due and payable
have been paid in full or will be paid in full by Seller by the
Closing Date.
22. Not in limitation on any other provision hereof, there are
no cross-use, mutual access or similar agreements of any kind binding
upon Seller or the Property and benefitting any other person, entity,
or property, except as may be disclosed in the Title Commitment.
If (1) any of Seller's representations and warranties set forth in
this Section 7 are untrue in any material respect, or at
any time at or before Closing there is any material change
with respect to the matters represented and warranted by
Seller pursuant to this Section 7, then Seller shall give
Purchaser prompt written notice thereof, and Purchaser shall
have the right to terminate this Agreement in accordance
with Section 13.(b) by delivering notice to Seller at any
time at or before the Closing, in which case the entire
▇▇▇▇▇▇▇ Money shall be refunded to Purchaser and, if any
representation or warranty is untrue in any material respect
or Seller causes a material change with respect to the
matters represented and warranted by Seller, Seller shall
reimburse Purchaser for all of Purchaser's Contract Costs.
All of Seller's representations and warranties shall survive
the Closing; provided, however, that Purchaser may not
maintain an action for breach of such representations and
warranties unless it shall have given Seller written notice
of such breach in reasonable detail not later than a date
which is one year from the Closing Date.
Section 8. Seller's Covenants. Seller hereby covenants as follows (a
------------------
breach of which shall entitle Purchaser to terminate this
Agreement in accordance with Section 13.(b) by delivering notice
to Seller at any time at or before the Closing, in which case
the entire ▇▇▇▇▇▇▇ Money shall be refunded to Purchaser, and
Seller shall reimburse Purchaser for all of Purchaser's Contract
Costs):
1. New Agreements. While this Agreement is in effect Seller
--------------
will not, without the prior written consent of Purchaser, execute any
Service Contract or Lease, amend or alter in any respect any Service
Contract or Lease, terminate any Service Contract or Lease or enter
into any other agreement affecting the Property relating to the
design, construction, or operation thereof (including, without
limitation, those relating to the acquisition and installation of
FF&E), except as may be approved by Purchaser, in its reasonable
discretion, and except for guest room bookings in the ordinary course
of business. Purchaser shall not unreasonably delay its response to
any request by Seller for Purchaser's approval under this Section
8.(a). In determining whether to grant its approval, Purchaser may
consider, among other matters, its intended use, design, and image of
the Improvements.
2. Interim Operation. Seller hereby covenants and agrees that
-----------------
between the date of this Agreement and Closing, Seller shall (in all
cases consistent with past practices):
1. Operate, manage, and maintain the Property consistent with
Seller's prior practice and as a reasonable and prudent operator
of similar hotels in the
same competitive market would operate, manage, and maintain the
Property, including, without limitation, (a) using reasonable
efforts to keep available the services of its present employees
at the Improvements and to preserve its relations with guests,
suppliers and other parties doing business with Seller with
respect to the Property, (b) accepting booking contracts for the
use of the Property facilities on terms not less favorable than
the terms typically arranged by Seller as of the date of this
Agreement and retaining such bookings consistent with prior
practice, (c) maintaining the current level of advertising and
other promotional activities for Property facilities, (d)
maintaining its books of accounts and records in the usual,
regular, timely, and ordinary manner, in accordance with
accounting principles applied on a basis consistent with the
basis used in keeping its books in prior years, (e) remaining in
substantial compliance with all current license and franchise
agreements, and (f) maintaining the present level of insurance
with respect to the Property;
2. Not commit waste of any portion of the Property affecting
the value of the Property in any material respect;
3. Keep and maintain the Property in a state of repair and
condition consistent with the requirements of clause 8.(b)(1)
above;
4. Keep, observe, and perform all its obligations under the
Leases, the FF&E Leases, the Service Contracts, the Licenses,
and all other applicable contractual arrangements relating to
the Property;
5. Not enter into (a) any new agreements of the nature of the
Occupancy Agreements or any amendments, modifications, renewals
or extensions of any existing Occupancy Agreements that are not
consistent with Seller's prior practice at the Property, or (b)
any new agreements of the nature of the Service Contracts, FF&E
Leases, or Leases or any amendments, modifications, renewals or
extensions of any existing Service Contracts, FF&E Leases, or
Leases without Purchaser's prior written consent, except that
Seller shall not be required to obtain Purchaser's consent to
any new agreement or to any renewal or extension specifically
permitted under the terms of an existing Service Contract, FF&E
Lease, or Lease on terms consistent with prudent commercial
practice, provided that any such new agreement or renewal or
extension shall be terminable without penalty on not more than
30 days' notice, for Service Contracts and FF&E Leases, and
shall not exceed a term of 6 months, for Leases, or in any case
costs in excess of $10,000.00, without Purchaser's prior written
consent, such consent not to be unreasonably withheld or
delayed; provided that Seller shall deliver to Purchaser a copy
of any such new agreement or renewal or extension whether or not
such consent is required under this Section 8.(b)(5);
6. Not cause or permit the removal of FF&E from the Property
except for the purpose of discarding and replacing, where needed
or appropriate, worn items, and timely make all repairs,
maintenance, and replacements to keep the Property and all FF&E
in good operating condition;
7. Keep supplies adequately stocked, consistent with Seller's
prior practice, as if the sale of the Property hereunder was not
going to occur, including without limitation, maintaining linens
and bath towels and washcloths at least at a 3-par level for all
guest rooms in the Property;
8. Not grant any bonus, free rent, rebate or other concession
to any present or future Tenant, not otherwise specifically
granted in the operative Lease, without Purchaser's prior
written consent;
9. Advise Purchaser promptly of any litigation, arbitration, or
administrative hearing before any court or governmental agency
concerning or affecting the Property which Seller becomes aware
of being instituted or threatened after the date of this
Agreement;
10. Comply with all matters of the nature of the matters
described in subsections 7.(f) and 7.(q) above;
11. Not sell or assign or enter into any agreement to sell or
assign, or to create or permit to exist (as of Closing) any lien
or encumbrance (other than a Permitted Exception) on the
Property or any portion thereof;
12. Not allow any License or other right currently in existence
with respect to the operation, use, occupancy or maintenance of
the Property to expire, be canceled or otherwise terminated
without Purchaser's prior written consent;
13. Except to the extent consistent with prior practice, not
cancel any existing booking contracts for the use of Property
facilities or new booking contracts obtained by Seller after the
date of this Agreement; and
14. Pay or cause to be paid all taxes, assessments and other
impositions levied or assessed on the Property or any part
thereof prior to the date on which the payment thereof is due.
3. Limitation on Further Sales Efforts. Seller shall not
-----------------------------------
execute other offers prior to the termination of this Agreement in
accordance with its terms and shall not market the Property after the
Contingency Period has expired and Purchaser is fully committed to the
transaction as contemplated herein, subject to the terms hereof.
4. Shadow Management. Solely for the purpose of assisting
-----------------
Purchaser in connection with Purchaser's transition to ownership,
Seller shall permit Purchaser to establish and maintain a shadow
management operation with respect to the Property no earlier than two
(2) weeks prior to the Closing Date. Personnel from Purchaser's shadow
management operation shall have reasonable access during normal
business hours to all books, records and other information in the
possession or control of Seller or its agents concerning the Property
and shall have the right (at Purchaser's expense) to establish
duplicate books and records in order to effect a smooth transition in
the ownership and management of the Property; provided, however, that
Purchaser and its shadow management operation and employees i. shall
not unreasonably interfere with the normal management and operation of
the Property, ii. shall hold all information acquired from such books
and records confidential in accordance with the provisions of this
Agreement, iii. shall repair any damage to the physical condition of
the Property caused by Purchaser or its agents in any such shadow
management operation, and iv. shall not be deemed to have assumed
management responsibilities prior to Closing by virtue of such shadow
management.
Section 9. Closing. The closing (the "Closing") of the sale of the
------- -------
Property by Seller to Purchaser shall occur on December 31, 1996
(the "Closing Date"), in the offices of Title Company commencing
------------
at 10:00 a.m., Dallas, Texas time. Purchaser may elect to
accelerate the Closing Date by delivering written notice thereof
to Seller specifying the accelerated Closing Date. At the
Closing the following, which are mutually concurrent conditions,
shall occur:
1. Purchaser, at its expense, shall deliver or cause to be
delivered to Seller the following:
1. wire transfer or other immediately available cash funds, in
the amount of the Purchase Price adjusted in accordance with
Section 1.(h) and 10; and
2. evidence satisfactory to Seller and Title Company that the
person executing the Closing documents on behalf of Purchaser
has full right, power, and authority to do so.
2. Seller, at its expense, shall deliver or cause to be delivered
to Purchaser the following:
1. Special Warranty Deed in the form of Exhibit B, fully
---------
executed and acknowledged by Seller, conveying to Purchaser the
Land and Improvements, subject only to the Permitted
Encumbrances.
2. ▇▇▇▇ of Sale and Assignment in the form of Exhibit C, fully
---------
executed and acknowledged by Seller, assigning, conveying, and
transferring to Purchaser all of the Property other than the
Land and Improvements;
3. an Assignment and Assumption of all of the Leases, FF&E
Leases, Service Contracts, and Occupancy Agreements, in the form
of Exhibit E, which Purchaser shall execute at Closing;
---------
4. Owner policy of title insurance in the amount of
the Purchase Price issued by Title Company, insuring that
Purchaser is the owner of the Land, and Improvements subject
only to the Permitted Encumbrances and the standard printed
exceptions included in a Texas standard form owners policy of
title insurance; however, the standard exception for
discrepancies, conflicts, or shortages in area shall be deleted
except for "shortages in area," the rights of parties in
possession shall be limited only to those holding under the
Leases, the standard exception for taxes shall be limited to
the year in which the Closing occurs, and subsequent years and
subsequent assessments for prior years due to change in land
usage or ownership, and such policy shall have no exceptions
for restrictive covenants except for restrictions that are
Permitted Encumbrances;
5. current certificate issued by a company acceptable
to Purchaser reflecting that since the date of the searches
furnished pursuant to Section 4.(a) no Uniform Commercial Code
filings, chattel mortgages, assignments, pledges, or other
encumbrances have been filed in the offices of the Secretary of
State of the State of Texas or the County Clerk of ▇▇▇▇▇▇ County
with reference to the Property;
6. evidence satisfactory to Purchaser and the Title Company
that the persons executing and delivering the Closing documents
on behalf of Seller have full right, power and authority to do
so;
7. certificate executed by Seller stating that, as of the
Closing Date, each of Seller's representations and warranties
set forth in Section 7 is true and correct in all material
respects, except as previously disclosed by Seller to Purchaser
pursuant to the provisions of Section 7;
8. certificate in the form of Exhibit D meeting the
---------
requirements of Section 1445 of the Internal Revenue Code of
1986, executed and sworn to by Seller;
9. to the extent not previously delivered to and in the
possession of Purchaser, all Plans and Specs, all keys, access
cards, and combinations for the Property (which shall be
properly tagged for identification), all Records, and all
Licenses;
10. to the extent permitted under applicable law, documents of
transfer necessary to transfer to the Purchaser Seller's
employment rating for workmen's compensation and state
unemployment tax purposes;
11. fully executed and effective terminations of all management
agreements with respect to the Property;
12. an assignment of Seller's rights to the Tradenames in form
necessary to evidence such assignment with the U.S. Office of
Patents and Trademarks, with the cost of such filing to be paid
by Seller; and
13. such other instruments as are customarily executed in Texas
to effectuate the conveyance of property similar to the
Property, with the effect that, after the Closing, Purchaser
will have succeeded to all of the rights, titles, and interests
of Seller relating to the Property and Seller will no longer
have any rights, titles, or interests in and to the Property.
3. Seller shall pay all costs and liabilities relating to the
Property that arise out of or are attributable to the period prior to
the Closing Date in accordance with Section 10, and shall indemnify
and hold harmless Purchaser from such costs and liabilities and from
all reasonable attorneys' fees expended by Purchaser in connection
therewith. Purchaser shall pay all costs and liabilities relating to
the Property that arise out of or are attributable to the period from
and after the Closing Date in accordance with Section 10, except such
costs and liabilities that arise out of or result from a breach by
Seller of its representations and warranties set forth in Section 7,
and Purchaser shall indemnify and hold harmless Seller from such costs
and liabilities and from all reasonable attorneys' fees expended by
Seller in connection therewith. This Section 9.(c) shall survive the
Closing.
4. Title Company shall return the ▇▇▇▇▇▇▇ Money to Purchaser or, at
Purchaser's option, apply the ▇▇▇▇▇▇▇ Money to the Purchase Price.
5. Upon completion of the Closing, Seller shall deliver to
Purchaser possession of the Property free and clear of all tenancies
of every kind and parties in possession, except pursuant to the
Occupancy Agreements, but subject to the Permitted Encumbrances.
Section 10. Prorations.
----------
1. Closing Prorations. All income and expenses with respect to
------------------
the Property, and applicable to the period of time before and after
Closing determined in accordance with sound accounting principles
consistently applied, shall be allocated between Seller and Purchaser
as set forth herein. Unless otherwise explicitly provided in this
Agreement, Seller shall be entitled to all income and responsible for
all expenses for the period of time up to but not including the Closing Date,
and Purchaser shall be entitled to all income and responsible for all expenses
for the period or time, after and including the Closing Date. At Closing, the
following items of revenue and expense shall be prorated, adjusted and
appropriated as of 12:01 A.M. (except as otherwise provided) on the Closing
Date:
1. Property Taxes. Real estate taxes, personal property or use taxes,
--------------
assessments (special or otherwise), and sewer rents, on the basis of
the best available estimates for such taxes, assessments and rents that
will be due and payable on the Property for the calendar year in which
the Closing occurs. As soon as the exact amount of such taxes,
assessments and rents for such calendar year is ascertained, Seller and
Purchaser shall readjust the amounts thereof to be paid by each party
to the end that Seller shall pay for those such taxes, assessments and
rents attributable to the period of time prior to the Closing Date, and
Purchaser shall pay for same which are attributable to the Closing Date
and thereafter.
2. Operating Costs. All costs and expenses of operating the Property,
---------------
including without limitation amounts paid or payable under the Service
Contracts, the FF&E Leases, the Leases, the Occupancy Agreements, and
the Licenses.
3. Lease Rents. Rents under Leases and other revenues as and when
-----------
collected.
4. Revenues. Guest, convention, room, food,
--------
beverage, and all other charges and revenues for services rendered and
the operation of all departments of the Property, including, but not
limited to, advance payments under booking agreements for rooms,
facilities and services of the Property and any other revenues, as and
when collected, provided, however, that room rental receipts through
the night before Closing shall belong to Seller, though Seller shall be
responsible for all room maid service costs for such night. All cash,
checks, and other funds, and all other notes, security and other
evidence of indebtedness located at the Property on the Closing Date
and balances on deposit to the credit of the Seller with banking
institutions are and shall remain the property of the Seller and are
not included in this sale. The amount of the Cash and Equivalents shall
be added to the Purchase Price.
5. Miscellaneous. Fees and expenses for music, entertainment, trade
-------------
association dues, trade subscriptions, coin machine income, and
washroom and checkroom income.
6. Deposits. Purchaser shall receive a cash credit
--------
in an amount equal to the sum of all prepaid rentals and all security
deposits, utility deposits, cleaning fees and deposits and other
deposits paid under any Lease or
otherwise and not properly applied as of the Closing to a monetary
obligation of the related Tenant. Seller shall receive a cash credit
for all utility deposits which are transferred to Purchaser.
7. Sales Taxes. All sales, use and occupancy taxes, if any, due or to
-----------
become due in connection with revenues received from the Property prior
to the time of proration as set forth herein, and all sales, use and
occupancy taxes, if any, payable in connection with any of the
transactions contemplated by this Agreement will be paid by Seller.
Seller shall be entitled to receive any rebates or refunds on such
taxes paid by Seller prior to the Closing.
2. Reconciliation and Final Payment. Seller and Purchaser shall reasonably
--------------------------------
cooperate after Closing to make a final determination of the prorations
required hereunder. Upon the final reconciliation of the prorations under
Section 10, the party which owes the other party any sums hereunder shall pay
such party such sums within ten (10) days after the reconciliation of such
sums. The obligations to calculate such prorations, make such reconciliations
and pay any such sums shall survive the Closing.
3. Accounts Payable. Seller shall retain and be responsible for the
----------------
payment of all accounts payable and other debts relating to the Property
which have accrued prior to or as of the Closing and payable after the
Closing to the extent the Purchase Price is not adjusted in favor of
Purchaser under the proration provisions of Section 10 of this Agreement for
such accounts payable and other debts. Purchaser shall be responsible for the
particular accounts payable relating to the Property arising and accruing
after the Closing to the extent the Purchase Price is not adjusted in favor
of Seller under the same provisions.
4. Accounts Receivable. Purchaser shall not be obligated to collect any
-------------------
accounts receivable or revenues accrued prior to the Closing Date for Seller,
but if Purchaser collects same, such amounts will be remitted at least once a
month to Seller in the form received. These amounts shall specifically
include, without limitation, amounts collected from any taxing authority on
account of a successful tax contest resulting in a recovery of previously
paid taxes; to the extent any such tax recovery applicable to the period
prior to the Closing Date is in the form of credits or rebates in tax periods
after the Closing Date, the cash amount equivalent to such credits or rebates
attributable to the period prior to the Closing Date shall be promptly paid
by Purchaser to Seller. If Purchaser collects any accounts receivable or
revenues which are not attributed to any particular period, Purchaser shall
use reasonable efforts to ascertain from the payor the applicable period to
which such receivables or revenue apply, but if Purchaser is unable to do so,
it will be presumed that they first apply to post-Closing periods. Purchaser
acknowledges that following the Closing, Seller is permitted to collect
accounts receivable accrued prior to the Closing Date.
Section 11. Commissions. Seller has agreed to pay a commission to ▇▇▇▇
-----------
▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as provided in a
separate written agreement, upon the consummation of Closing.
Except as set forth in the preceding sentence, Seller shall
defend, indemnify, and hold harmless Purchaser, and Purchaser
shall defend, indemnify, and hold harmless Seller, from and
against all claims by third parties for brokerage, commission,
finders, or other fees relative to this Agreement or the sale of
the Property, and all court costs, attorneys' fees, and other
costs or expenses arising therefrom, and alleged to be due by
authorization of the indemnifying party. As provided for in the
Texas Real Estate License Act, Purchaser is advised to have an
abstract of title with regard to the Property examined by an
attorney of its choice, or to obtain a policy of title
insurance.
Section 12. Destruction, Damage, or Taking Before Closing. If, before
---------------------------------------------
Closing, all or any part of the Improvements or Personalty are
destroyed or damaged, or become subject to condemnation or
eminent domain proceedings, then Seller shall promptly notify
Purchaser thereof. Purchaser shall have the right to elect to
proceed with the Closing (subject to the other provisions of
this Agreement) by delivering notice thereof to Seller within
five business days of receipt of Seller's notice respecting the
damage, destruction, or taking, but Purchaser shall be entitled
to all insurance proceeds or condemnation awards payable as a
result of such damage or taking (to the extent the same may be
necessary or appropriate) Seller shall assign to Purchaser at
Closing Seller's rights to such proceeds or awards, and (in case
of damage or destruction) the Purchase Price shall be reduced by
the applicable deductible amount under Seller's insurance. If,
within five business days of receipt of Seller's notice
respecting the damage, destruction, or taking, Purchaser
notifies Seller of its intent to terminate this Agreement, or if
Purchaser gives no notice within such period, then Purchaser
shall be deemed to have terminated this Agreement pursuant to
Section 13.(b).
Section 13. Termination and Remedies.
------------------------
1. If Purchaser fails to consummate the purchase of the Property pursuant
to this Agreement for any reason other than termination hereof pursuant to a
right granted to Purchaser in Sections 5, 6, 7, 8, and 12 then Seller, as
its sole remedy, shall have the right to terminate this Agreement by
notifying Purchaser thereof, in which event Title Company shall deliver all
of the ▇▇▇▇▇▇▇ Money to Seller as liquidated damages, whereupon neither
Purchaser nor Seller shall have any further rights or obligations hereunder
except for those that survive the termination of this Agreement.
2. If Purchaser timely terminates this Agreement pursuant to Sections 5,
6, 7, 8, and 12, then Title Company shall return the ▇▇▇▇▇▇▇ Money to
Purchaser, whereupon neither party hereto shall have any further rights or
obligations hereunder, except for those that expressly survive the
termination of this Agreement.
3. If Seller fails to consummate the sale of the Property or perform its
obligations hereunder pursuant to this Agreement for any reason other than
Purchaser's failure to perform its obligations hereunder or termination
hereof by Purchaser in accordance with Section 13.(b), then Purchaser shall
have the right to, as Purchaser's sole and exclusive remedies for Seller's
default, either: terminate this Agreement by notifying Seller thereof, in
which case Title Company shall return the entire ▇▇▇▇▇▇▇ Money to Purchaser
and Seller shall pay to Purchaser all of Purchaser's Contract Costs
whereupon neither party hereto shall have any further rights or obligations
hereunder except for those that survive the termination of this Agreement;
or enforce specific performance of the obligations of Seller hereunder.
4. Seller and Purchaser hereby acknowledge and agree that they have
included the provision for payment of liquidated damages in Section 13.(a)
because, in the event of a breach by Purchaser, the actual damages to be
incurred by Seller can reasonably be expected to approximate the amount of
liquidated damages called for herein and because the actual amount of such
damages would be difficult if not impossible to measure accurately.
Section 14. Notices. All notices provided or permitted to be given under
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this Agreement must be in writing and may be served by depositing
same in the United States mail, addressed to the party to be
notified, postage prepaid and registered or certified with return
receipt requested; by delivering the same in person to such party;
or by facsimile copy transmission. Notice given in accordance
herewith shall be effective upon receipt at the address of the
addressee. For purposes of notice, the addresses of the parties
shall be as follows:
If to Purchaser, to: Homegate Hospitality, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller, to: InnHome Austin, Ltd.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Either party hereto may change its address for notice by giving three days prior
written notice thereof to the other party.
Section 15. Assigns; Beneficiaries. This Agreement may be assigned
----------------------
by Purchaser to any affiliate or successor thereof or to
Extended Stay Limited Partnership or any affiliate or
successor thereof without Seller's prior written consent.
This Agreement shall inure to the benefit of and be
binding on the parties hereto and their respective heirs,
legal representatives, successors, and permitted assigns.
This Agreement is for the sole benefit of Seller and
Purchaser, and no third party is intended to be a
beneficiary of this Agreement.
Section 16. Governing Law. This Agreement shall be governed and
-------------
construed in accordance with the laws of the State of
Texas.
Section 17. Entire Agreement. This Agreement is the entire
----------------
agreement between Seller and Purchaser concerning the sale
of the Property, and no modification hereof or subsequent
agreement relative to the subject matter hereof shall be
binding on either party unless reduced to writing and
signed by the party to be bound. All Exhibits attached
hereto are incorporated herein by this reference for all
purposes.
Section 18. Trade Name. If Purchaser elects to take an assignment
----------
of the trade name, "InnHome America," and Purchaser or its
assigns does not to use such name within two years after
the Closing Date or abandons the use of the name,
Purchaser shall, upon Seller's request, grant to Seller an
exclusive non-assignable license to use such name (to the
extent Purchaser has the right to grant the same) in
connection with Seller's extended-stay hotel facilities,
for $10.00 consideration and the costs associated with the
license. The form of such license shall be negotiated by
the parties in good faith. If after such license is
granted, Seller fails to use such name in connection with
the operation of its extended stay hotel facilities for
more than 90 days or abandons the use of such name, such
license shall immediately terminate. The provisions of
this Section shall survive Closing.
Executed as of the date first set forth above.
SELLER:
INNHOME AUSTIN, LTD., a Texas limited
partnership
By: InnHome America, Inc.,
a Texas corporation, its
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
---------------------------------
PURCHASER:
HOMEGATE HOSPITALITY, INC., a Delaware
corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Chief Operating Officer
---------------------------------
Schedule of Exhibits
--------------------
A - Description of the Land
B - Form of Special Warranty Deed
C - Form of ▇▇▇▇ of Sale and Assignment
D - Form of FIRPTA Certificate
E - Form of Assignment of Leases
