PROPERTY ACQUISITION/DISPOSITION AGREEMENT
Exhibit 10.5
PROPERTY ACQUISITION/DISPOSITION
AGREEMENT
THIS AGREEMENT is made and entered into as of the 2nd day of January, 2003, by and between Apple Hospitality Five, Inc., a Virginia
corporation (hereinafter referred to as “Owner”), and Apple Suites Realty Group, Inc., a Virginia corporation (hereinafter referred to as “Agent”).
1
a. To supervise, on behalf of Owner, the preparation of
contracts of purchase or sale for each Property, on such terms as are specified by Owner or its duly authorized representatives, and all other documents related thereto or required to effectuate such purchase or sale;
b. To coordinate the activities of, and act as liaison between Owner and, independent professionals connected with
the purchase or sale of a Property, including attorneys, appraisers, engineers, inspectors, lenders, if any, and others;
c. To assist Owner and its authorized representatives in satisfying any conditions precedent to the purchase or sale of a Property, which shall include contracting on behalf of Owner with any third parties
whose services are required to close any such purchase or sale;
d. To represent Owner at
the closing of the purchase or sale of a Property, to coordinate the activities of professionals and other third persons connected with such closing, and to supervise the compliance by Owner with all requirements and customary actions associated
with such purchase or sale, including, without limitation, the obtaining of property title insurance, the delivery and recordation of deeds and other instruments of conveyance, and the delivery and recordation, as required, of any documents
evidencing loans obtained or made by Owner;
e. Generally to act on behalf of Owner in
connection with such purchase or sale as a commercial real estate broker would customarily act with respect to such transaction, including the provision of such additional services as would normally be provided by such a person.
(a) Owner shall pay to Agent a real estate commission in connection with each purchase of a Property in an amount equal to two
percent (2%) of the gross purchase price of the Property (which does not include amounts budgeted for repairs and improvements), in consideration of Agent (or any person with whom Agent subcontracts or contracts hereunder) performing the services
provided for in this Agreement in
2
connection with the purchase of the Property. In consideration of Agent (or any person with whom Agent subcontracts or
contracts hereunder) performing the services provided for in this Agreement in connection with the sale of a Property, Owner shall pay to Agent the following: a real estate commission in connection with the sale of a Property in an amount equal to
two percent (2%) of the gross sales price of the Property, if, but only if, the sales price of the Property exceeds the sum of (A) the Company’s cost for the Property (consisting of the original purchase price plus all capitalized costs and
expenditures connected with the Property), without any reduction for depreciation, and (B) ten percent (10%) of such cost. If the sales price of the Property does not equal such amount, Agent shall be entitled only to payment by the Company of its
“direct costs” incurred in marketing such property (where “direct costs” refers to a reasonable allocation of all costs, [including salaries of personnel, overhead and utilities]), allocable to services in marketing such
property. If the two percent (2%) real estate commission is payable in connection with sale of a Property, Agent shall not also be paid the reimbursement of its “direct costs” as described in the preceding sentence. If the person from whom
Owner purchases or to whom Owner sells a Property pays any fee to Agent, such amount shall decrease the amount of Owner’s obligation to Agent. Furthermore, Agent shall not be entitled to any real estate commission in connection with a sale of a
Property by Owner to Agent or any Affiliate of Agent (where “Affiliate” has the meaning specified in the Prospectus of Owner), but Agent will, in such case, be entitled to payment by Owner of its direct costs in such regard. The fees and
expenses provided for herein shall be payable if Owner sells a property, sells shares in Owner, effects a merger of Owner with another entity, or undertakes any other transaction, the purpose or effect of which is, in essence, to dispose of some or
all Properties. In any case other than an actual sale of Properties, Owner and Agent shall in good faith agree upon an allocation of purchase price to each Property which is effectively disposed of.
(b) In the event Owner purchases, sells, conveys or otherwise transfers a Property within ninety
(90) days after the expiration of this Agreement to a person or persons with whom Agent on behalf of Owner has negotiated as a prospective purchaser or buyer of a Property during the term of this Agreement, Agent shall be deemed to have earned the
compensation provided in Section 5(a) and such compensation shall be due and payable to Agent pursuant to the terms of this Agreement; provided, however, that (i) Agent substantially performs all of the duties and obligations that it would otherwise
have under this Agreement if the Agreement had not terminated, and (ii) Agent has given written notice to Owner of the name of such purchaser or buyer prior to the expiration of the term of this Agreement.
3
attorney coupled with an interest. It shall terminate when this Agreement terminates as provided herein.
9. Governing Law. This
Agreement shall be construed in accordance with and be governed by the laws of the Commonwealth of Virginia without regard to conflicts of law.
OWNER: | ||
APPLE HOSPITALITY FIVE, INC., a Virginia corporation | ||
By: |
/s/ Xxxxx X. Xxxxxx | |
Title: |
President | |
AGENT: | ||
APPLE SUITES REALTY GROUP, INC., a Virginia corporation | ||
By: |
/s/ Xxxxx X. Xxxxxx | |
Title: |
President |
4