AGREEMENT OF SALE
THIS AGREEMENT OF SALE (this "Agreement") is made as of this 7th day of
November, 2002, between AP Properties of Mississippi, Inc., a Mississippi
corporation, having its office at 0000 Xxxxx Xxxxxxxxx Heights Road, Suite 400,
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000 (hereinafter referred to as "Seller"), and MPH
Investments of Mississippi, Inc., a Mississippi corporation (hereinafter
referred to as "Buyer").
RECITALS:
A. Seller is the leasehold tenant of a certain parcel of real estate
located at 0000 Xxxxxxxxx Xxxx, in the City of Vicksburg, Xxxxxx County, State
of Mississippi, commonly known as the AmeriHost Inn & Suites Rainbow Hotel
Casino - Vicksburg, Mississippi, and more particularly described on Exhibit A
attached hereto (the "Land").
B. Seller maintains its leasehold interest in the Land pursuant to a Ground
Lease dated June 21, 1994, as amended (the "Ground Lease").
C. The Land is improved with a hotel building containing approximately 89
guest rooms and related facilities which Seller has constructed (the
"Improvements") and of which Seller retains ownership during the term of the
Ground Lease.
D. Seller operates the Improvements and the related assets described below
as a hotel (the "Hotel").
E. Seller has agreed to sell and assign, or cause to be sold and assigned,
to Buyer, and Buyer has agreed to purchase and take from Seller, the Hotel and
the leasehold interest in the Ground Lease, together with: (i) all of Seller's
interest in all appliances, apparatus, furniture, furnishings, fixtures,
equipment, machinery, fittings, working supplies, building supplies, maintenance
and repair supplies, tools, inventory, towels, wash cloths, beds, sheets, pillow
cases, bed spreads, blankets, television sets, radios and articles of personal
property owned by Seller and used in connection with the occupancy and operation
of the Hotel (the "Tangible Personal Property"); (ii) all deposits taken from
any guests, groups, conventions or others, and any other amounts prepaid in
connection with services to be rendered on or after the Closing Date (as
hereinafter defined) now in the possession of Seller or hereinafter received by
Seller in connection with the running and operation of the Hotel (the
"Reservation Deposits"); (iii) all of Seller's interest in all contracts or
agreements and/or leases for the furnishing of maintenance, repairs, supplies,
equipment or other services to the Property (as hereinafter defined), which have
a term expiring after the Closing Date, including Seller's interest in all
transferable telephone numbers (the "Service Contracts"), a current list of the
Service Contracts is included herein as Exhibit B attached hereto, which shall
be updated through the Closing Date; (iv) to the extent assignable, all of
Seller's interest in all building and other permits, certificates, licenses
(except current franchise license agreement with AmeriHost Franchise Systems,
Inc.), authorizations and approvals granted in connection with the Property (the
"Licenses and Permits"); (v) all guest and customer lists for the Hotel owned
by, and in possession of, Seller (the "Guest and Customer Lists"); (vi) all
right, title and interest in any other leases encumbering or affecting the
Property
(the "Leases"); and (vii) all promotional advertising literature and
materials, catalogs, booklets, stationery and manuals ("Promotional Material").
F. The Ground Lease, the Improvements, the Hotel, the Tangible Personal
Property, the Reservation Deposits, the Service Contracts, the Licenses and
Permits, the Guest and Customer Lists, the Leases and the Promotional Material
are sometimes referred to herein, collectively, as the "Property."
G. Simultaneous with the execution of this Agreement, Freeport IL 899, LLC
(the "Freeport Seller"), a wholly-owned subsidiary of Arlington Hospitality,
Inc. ("AHI"), has contracted to sell the hotel owned by it in Freeport, Illinois
(the "Freeport Hotel") to MPH Investments of Illinois, Inc. (the "Freeport
Buyer"); as noted below, the sale of the Property called for herein is
contingent upon: (i) the Freeport Seller's simultaneous sale of the Freeport
Hotel in accordance with the aforesaid agreement; and (ii) the closing of the
transactions contemplated in that certain "Omnibus Agreement" of even date
herewith between AHI and Xxxxxxx X. Xxxxx.
NOW THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt and adequacy of which hereby are
acknowledged, and intending to be legally bound hereby, Seller and Buyer
covenant and agree as follows:
1. Purchase and Sale. Seller, on the Closing Date, shall sell, grant,
convey, assign, transfer and deliver the Property to Buyer, and Buyer agrees to
purchase, acquire and accept the Property from Seller. Seller shall (i) convey
Seller's interest in the Improvements by Special Warranty Deed, and (ii) assign
Seller's interest in the Ground Lease by an Assignment and Assumption of Ground
Lease; each of which shall be subject to the deed restrictions attached hereto
as Exhibit C, easements, covenants, conditions, restrictions and other matters
of record as of the Closing Date, which will not materially adversely affect
Buyer's use of the Property as a hotel, and the terms, provisions and conditions
of the Ground Lease (collectively the "Permitted Exceptions").
2. Consideration. Buyer will purchase the Property and pay therefor the sum
(the "Purchase Price") of Four Hundred Sixty-Eight Thousand, Eighty Hundred
Fifty and No/100 Dollars ($468,850.00) plus the amount of the first mortgage on
the Property due at Closing in lawful currency of the United States of America,
in cash or by cashier's or certified check, or by federal funds wire, subject to
closing apportionment adjustments as hereinafter set forth, payable on the
Closing Date.
3. Documents and Deliveries at Closing by Seller. Within thirty (30) days
after the Effective Date (as hereinafter defined) of this Agreement, Seller
shall provide to Buyer a commitment for leasehold title insurance (the "Title
Commitment") issued by the Escrow Agent with respect to the Ground Lease and the
Improvements. In the event that the Title Commitment sets forth exceptions (the
"Unpermitted Exceptions") other than the Permitted Exceptions, Buyer shall
notify Seller in writing of the Unpermitted Exceptions within ten (10) days
after Buyer's receipt of the Title Commitment. Seller shall have until the
Closing Date to either remove the Unpermitted Exceptions or arrange for the
issuance by the Escrow Agent of an endorsement to the owner's policy to be
issued to Buyer at the Closing insuring Buyer against any loss or
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damage Buyer might incur as a result of the existence of any Unpermitted
Exception which Seller cannot otherwise cause to be removed prior to the Closing
Date. If any Unpermitted Exception over which such an endorsement has not been
so issued remains unremoved as of the Closing Date, Buyer may terminate this
Agreement and this Agreement shall become null and void, without further
liability of either party to the other, except as otherwise expressly set forth
herein. In the event that Buyer does not notify Seller in writing of any
Unpermitted Exceptions within ten (10) days after Buyer's receipt of the Title
Commitment, then Buyer shall be deemed to have waived any right it otherwise
would have had to object to any Unpermitted Exceptions, and shall accept title
to the Property at the Closing subject to such Unpermitted Exceptions.
At the time and place of the Closing, upon payment in full of the Purchase
Price and satisfaction of all of Buyer's obligations under this Agreement,
Seller shall:
(a) Convey and deliver title to the Improvements by Special Warranty
Deed subject to the Permitted Exceptions.
(b) Assign and deliver to Buyer all of Seller's interest in the Ground
Lease subject to Permitted Exceptions by an Assignment and Assumption of
Ground Lease, whereby Buyer assumes all obligations of Seller thereunder
from and after the Closing Date; Buyer shall also cause the Ground Lease
lessor to deliver a full release without recourse or other liability to
Arlington Hospitality, Inc., f/k/a AmeriHost Properties, Inc. ("Guarantor")
of its guarantee of Seller's obligations under the Ground Lease.
(c) Assign and deliver to Buyer all of Seller's interest in the
Reservation Deposits, the Tangible Personal Property (to the extent
assignable), the Licenses and Permits and the Guest and Customer Lists by a
Xxxx of Sale, provided Buyer agrees that, from and after the Closing Date,
it will assume all of the obligations of Seller thereunder.
(d) Assign and deliver to Buyer all of Seller's interest in the
Service Contracts (to the extent assignable), by an Assignment and
Assumption Agreement, whereby Buyer assumes the obligations thereof from
and after the Closing Date. Seller shall be responsible for all obligations
owing prior to Closing. Seller, as of the Closing Date, shall terminate the
existing management contract for the Property.
(e) Deliver to Buyer, if available, copies of the Licenses and Permits
and the Service Contracts.
(f) Assign and deliver to Buyer all of Seller's interest in any other
Leases affecting the Property (to the extent assignable), by an Assignment
and Assumption of Leases, whereby Buyer assumes the obligations thereof
from and after the Closing Date.
(g) Deliver to Buyer an affidavit originally executed by Seller to the
effect that Seller is not a foreign person for purposes of 26 U.S.C. 1445
(b) (2).
(h) Terminate the employment of all of its employees at the Property.
Upon completion of the Due Diligence Period (as hereinafter defined),
Seller will provide notice to all of its employees of the impending sale.
Seller shall provide the employees an opportunity to submit applications
for employment with Buyer, and Buyer may
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discuss employment opportunities with the employees, provided that a
representative of Seller is present during all communications with
employees of Seller.
(i) Deliver to Buyer possession of the Property pursuant to the terms
of the Ground Lease, as modified to release Seller and AHI from all
liability thereunder.
The documents described in this Section 3 are hereinafter collectively
referred to as the "Seller's Closing Documents."
4. Documents and Deliveries at Closing by Buyer. At the time and place of
Closing, Buyer shall execute and deliver to:
(a) Seller: (i) all such documents as may be necessary to effect an
assumption by Buyer, and the consent of all relevant third parties thereto,
if applicable, from and after the Closing Date, of all obligations of
Seller under the Ground Lease, the Service Contracts, the Licenses and
Permits and the Leases, all obligations with respect to the Reservation
Deposits, and all other obligations or liabilities of Seller or the
Property to be assumed by Buyer pursuant to the terms of this Agreement
from and after the Closing Date, and (ii) a certified copy of a resolution
of the controlling body of Buyer (in the event that Buyer is not an
individual) authorizing Buyer to consummate the subject transaction upon
the terms and conditions herein contained;
(b) Documentation in form and content satisfactory to Seller
establishing that effective as of the Closing Date: (i) Seller and
Guarantor shall be released by the Ground Lease lessor from all of their
respective obligations under the Ground Lease and guarantee of tenant's
obligations under the Ground Lease accruing on or following the Closing
Date; and (ii) Seller, together with any guarantor of Seller's obligations,
shall be released by the holder of the first mortgage on the Property from
all obligations under the note, mortgage and other documentation associated
with the loan secured by the first mortgage on the Property;
(c) AmeriHost Franchise Systems, Inc. ("AFSI"), or to Seller as AFSI's
franchise document repository, all such documents as may be necessary to
(i) effect a release of Seller and Guarantor by AFSI from any and all
further liabilities and obligations under any franchise agreement between
Seller and AFSI with respect to the Property and any guarantee thereof, and
(ii) induce AFSI to enter into a franchise agreement granting to Buyer an
exclusive license to operate the Property as an AmeriHost Inn(R) hotel
within a specified territory, the form of which documents shall be agreed
upon by AFSI and Buyer prior to the expiration of the Due Diligence Period,
including, without limitation, payment to AFSI of a non-refundable
application fee of One Thousand and No/100 Dollars ($1,000.00), an initial
franchise fee of One Thousand and No/100 Dollars ($1,000.00), and issuance
of a certificate of insurance meeting AFSI coverage requirements. In the
event AFSI and Buyer cannot agree upon the form of the documents during the
Due Diligence Period, Buyer at its sole discretion and upon written notice
to Seller on or before expiration of the Due Diligence Period, may
terminate this Agreement, whereupon the Escrow Agent shall return the
Deposit and all interest earned thereon, but not the Non-refundable
Deposit, to Buyer, and this Agreement shall become
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null and void, without further liability of either party to the other,
except as otherwise expressly set forth herein. If Buyer fails to notify
Seller of its termination of this Agreement as set forth above, then Buyer
shall be deemed to have waived its right of termination under this
paragraph, whereupon the full amount of the Deposit shall be released to
Seller upon Escrow Agent's receipt of unilateral written notice by Seller;
(d) An indemnification agreement by Buyer and Xxxxxxx X. Xxxxx in the
form attached as Exhibit D, whereby they agree to indemnify and hold
harmless AHI from certain losses they may incur with AFSI in the event the
Property ceases to be operated under the AFSI system during the seven (7)
year period following the Closing Date; and
(e) A participation agreement in the form attached hereto as
Exhibit E.
The documents described in this Section 4 are hereinafter collectively
referred to as the "Buyer's Closing Documents." The Seller's Closing Documents
and the Buyer's Closing Documents are sometimes referred to herein,
collectively, as the "Closing Documents."
5. Closing Expenses. Seller shall be responsible for Seller's and up to
$5,000 of Buyer's attorneys' fees (and to the extent less than $5000, Seller
shall apply such difference to any of the Freeport Buyer's attorneys fees not
being paid by the Freeport Seller), the deed recording fees and the full cost of
any leasehold owner's title insurance policy, excluding extended coverage and
endorsements. Buyer shall be responsible for any survey expenses, any costs and
expenses attendant to the investigation into any environmental conditions on or
about the Property, the full cost of any lender's leasehold title insurance
policy, including costs for extended coverage and/or endorsements to the owner's
leasehold title insurance policy, and all costs, fees, taxes and other charges
associated with any financing obtained by Buyer to finance the acquisition of,
or improvements to, the Property. All real estate transfer taxes (i.e., the
State and local recording taxes, including the State and County transfer taxes
and the revenue stamps) shall be paid by the party designated in the transfer
tax statue or ordinance, and if not so designated then by Buyer. Escrow fees and
document preparation fees or any title insurance company fees for the use of the
title company's offices for the Closing shall be borne equally by the parties.
Except as provided elsewhere in this Agreement, all other costs in connection
with the Closing shall be paid by the party incurring such cost.
6. Conditions to Obligations of Buyer. The obligations of Buyer to perform
Buyer's obligations under this Agreement are, and shall be subject to, the
satisfaction of each of the following conditions at or prior to the Closing:
(a) Seller shall have executed, acknowledged (where applicable) and
delivered the Seller's Closing Documents to be executed and delivered by
Seller, and Seller shall have delivered to Buyer all of the agreements,
documents and other items required under this Agreement.
(b) All of the representations and warranties of Seller contained in
this Agreement shall have been true and correct in all material respects
when made, and shall be true and correct in all material respects on the
Closing Date.
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(c) Seller shall have performed, observed and complied in all material
respects with all covenants, agreements and conditions required by this
Agreement to be performed, observed and complied with on its part prior to
or as of the Closing.
7. Conditions to Obligations of Seller. The obligations of Seller to
perform Seller's obligations under this Agreement are, and shall be subject to,
the satisfaction of each of the following conditions at or prior to the Closing:
(a) Buyer shall have executed, acknowledged (where applicable) and
delivered the Buyer's Closing Documents to be executed and delivered by
Buyer, and Buyer shall have delivered to Seller all of the agreements,
documents and other items required under this Agreement. The Ground Lease
and all Leases and Service Contracts affecting the Property will be assumed
by Buyer from and after the Closing Date. In particular, with respect to:
(i) AFSI franchise documents, Buyer shall have executed and delivered all
required franchise documents to AFSI, or to Seller as AFSI's franchise
document repository, one week prior to the Closing Date (except for a copy
of the deed which shall be provided to AFSI immediately after the Closing)
and AFSI shall have countersigned said documents so that effective on the
Closing Date, Buyer shall become a franchisee of AFSI with respect to the
Property; (ii) the first mortgage loan on the Property, Buyer shall either
have obtained new financing sufficient to pay off the loan in full or a
duly executed release in form and substance satisfactory to Seller
releasing Seller and AHI, as guarantor of said loan, from all liability
under said loan; and (iii) the Ground Lease, Buyer shall have obtained a
full release of Seller and Guarantor by the Ground Lease lessor, in
recordable form, releasing Seller and Guarantor from all liability under
the Ground Lease.
(b) All of the representations and warranties of Buyer contained in
this Agreement shall have been true and correct in all material respects
when made, and shall be true and correct in all material respects on the
Closing Date.
(c) Buyer shall have performed, observed and complied in all material
respects with all covenants, agreements and conditions required by this
Agreement to be performed, observed and complied with on its part prior to
or as of the Closing.
(d) Seller shall have been released from any and all further
liabilities and obligations under and any franchise agreement between
Seller and AFSI with respect to the Property, including, without
limitation, any termination fee(s) required to be paid in connection with
such release.
(e) The simultaneous closing of the sale of the Freeport Hotel from
the Freeport Seller to the Freeport Buyer.
(f) The appraised value of the Property and the Freeport Hotel
collectively, pursuant to an appraisal to be conducted by Xxxxxxx &
Wakefield after the date of this Agreement but prior to the Closing Date,
shall not exceed the purchase price of the Property and the Freeport
Property, collectively.
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8. Casualty to Property. Seller shall maintain comprehensive insurance
coverage of the Property until the Closing. Promptly after the occurrence of any
fire or other casualty affecting the Property or any portion thereof occurring
between the Effective Date and the Closing Date (a "Casualty"), Seller shall
give Buyer written notice thereof (a "Casualty Notice"), which Casualty Notice
shall state the type, location and amount of damage to the Property.
If, prior to the Closing, such a Casualty shall occur and the cost to
complete repairs of such Casualty shall equal $500,000 or more, then, in any
such event, either party, at its sole option, may terminate this Agreement by
written notice to the other (a "Casualty Termination Notice"), within ten (10)
days after Buyer has received the Casualty Notice; provided, however, that if
the Closing is scheduled for a date which is less than ten (10) days after
Buyer's receipt of the Casualty Notice the Closing shall be adjourned until ten
(10) days after Buyer's receipt of the Casualty Notice; and provided, further,
however, that Seller shall have the sole option to terminate this Agreement, if
the insurance proceeds payable to Seller on account of such Casualty would
exceed the Purchase Price, in which event the Deposit and all interest earned
thereon and the Non-refundable Deposit shall be returned to Buyer, this
Agreement shall become null and void without further liability of either party
to the other, except as otherwise expressly set forth herein (other than the
obligation of Buyer to keep confidential all documents and other materials
furnished to Buyer pursuant to the transaction contemplated by this Agreement).
If neither Buyer nor Seller elect to terminate this Agreement, then the Closing
shall take place as provided herein, without credit to the Purchase Price.
9. Condemnation. In the event of any taking of all or any part of the
Property by eminent domain proceedings, or the commencement of any such
proceedings from the Effective Date to the Closing Date, Seller promptly shall
give Buyer written notice of such proceeding stating the amount, type and
location of such taking or proposed taking and Buyer shall proceed as follows:
(a) Should all of the Property, or a portion of the Property which
materially interferes with the present use thereof, be condemned, Buyer
shall be permitted to terminate this Agreement by written notice to that
effect to Seller on or before the date fixed for the Closing, and the
Deposit and all interest earned thereon and the Non-refundable Deposit
shall be returned to Buyer. Thereafter, this Agreement shall become null
and void without further liability of either party to the other, except as
otherwise expressly set forth herein (other than the obligation of Buyer to
keep confidential all documents and other materials furnished to Buyer
pursuant to the transaction contemplated by this Agreement).
(b) If only a portion of the Property is condemned, which would not
materially interfere with the present use thereof, Buyer will be liable and
obligated to take title to the remaining portion of the Property at the
Purchase Price, in which event Seller shall assign to Buyer all of Seller's
right, title and interest in and to any award resulting from such
condemnation.
10. Closing. Settlement of this transaction shall be held no later than
February 17, 2003, at a location to be mutually agreed upon by Seller and Buyer,
time being of the essence thereof; provided however, Buyer agrees to use its
best efforts to consummate the Closing on or
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about December 11, 2002 and shall permit Seller and its representatives to
contact Buyer's financing sources and to participate in conversations with them
and Buyer for purposes of verifying that Buyer is using Buyer's best efforts in
this regard. The settlement of this transaction and the date of such settlement
are referred to herein, respectively, as the "Closing" and the "Closing Date."
Seller and Buyer may mutually agree upon an earlier date for settlement of this
transaction or fix another place for settlement of this transaction.
Notwithstanding anything to the contrary contained in this Agreement, the
Closing of this Agreement is contingent upon the simultaneous closing of the
sale of the Freeport Hotel from the Freeport Seller to the Freeport Buyer.
11. Apportionments and Additional Payments. The following apportionments
and payments are to be made as of the Closing Date:
(a) All taxes attributable to the Property, including, but not limited
to, real estate taxes and personal property taxes, if any, shall be
apportioned on the basis of the tax year (or other period for which
assessed) whether due or payable. If the current year taxes are not
available as of the Closing Date, the amounts from the last-issued tax xxxx
shall be used. All tax refunds from prior years shall remain the property
of Seller. If a refund is received for a period after the Closing, Buyer
shall be entitled to the same, after deduction of any expenses incurred by
Seller in order to obtain such refund. If a refund is received for a period
prior to Closing, Seller shall be entitled to the same, after deduction of
any expenses incurred by Buyer in order to obtain such refund. The parties
agree to cooperate fully to assist each other in providing such information
in their possession or control as may be necessary to assist in obtaining
any such refunds. In no event shall Seller pay or be apportioned real
estate taxes and personal property taxes attributable to the Property for
any period after the Closing Date.
(b) All assessments attributable to the Property, including, but not
limited to, sewer rents, water charges, and all other municipal charges, if
any, which have become a lien upon the Land or the Hotel, whether or not
recorded at the Effective Date of this Agreement, shall be apportioned for
the year in which the Closing occurs. In no event shall Seller pay or be
apportioned assessments attributable to the Property for any period after
the Closing Date.
(c) All income of any type arising from the Hotel and the Service
Contracts, including, but not limited to, commissions, shall be apportioned
(except with respect to room rentals for the night preceding the Closing
Date, which is covered by Section 11(f) below and vending machine monies,
which is covered by Section 11(j) below).
(d) Charges for the consumption of electricity, fuel oil on the
Property, steam, gas, telephone services and other utility services, if
any, shall be apportioned, unless final readings therefor can be
established as of the Closing Date. Further, payments under the Service
Contracts, the Leases and any other executory contracts assigned to Buyer
will be apportioned.
(e) At the Closing and, in addition to the Purchase Price, Buyer shall
pay to Seller, in cash or by cashier's or certified check, or by Federal
funds wire transfer a sum
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equivalent to all monies in house banks, xxxxx cash and cash registers,
which monies shall be counted jointly by representatives of Seller and
Buyer. Seller shall notify accounts receivable of change of ownership and
any address change of account processing.
(f) The final night's room revenue (revenue from rooms occupied on the
evening preceding the Closing Date), including any sales tax (the "Guest
Ledger"), will be retained by Seller.
(g) The fees for Licenses and Permits assigned hereby shall be
apportioned.
(h) Refundable deposits made by Seller under the Leases or other
agreements transferred to Buyer hereunder shall be added to the cash
portion of the Purchase Price, and Buyer shall thereupon acquire all of
Seller's rights and obligations, if any, in and to such deposits.
(i) All prepaid rents, room rental deposits, and all other deposits
for advance reservations, banquets or future services shall be paid over to
Buyer. Seller agrees to provide to Buyer at the Closing a then current list
of all advance reservations, banquets or services for the period after the
Closing Date (and to update said list thereafter). Seller agrees that any
pricing for advanced reservations must be in accordance with past
practices. Buyer agrees to provide rooms and services for persons and
organizations who or which made advance reservations, and Buyer agrees to
indemnify and hold harmless Seller against any claim brought against Seller
as a result of Buyer's failure to honor any such reservations.
(j) All vending machine monies received from the first opening of and
collection from such machines subsequent to Closing shall be paid to Seller
without apportionment.
Except as herein otherwise provided, all apportionments provided for in
this agreement shall be made as of 12:01 a.m. CT on the Closing Date and based
upon the actual number of days in the period covered by the sum being
apportioned.
Closing adjustments and apportionments made pursuant to the foregoing
provisions shall be determined jointly by representatives of Buyer and Seller
tentatively at the Closing (or as otherwise set forth herein).
12. Inspection of Property. From the Effective Date of this Agreement and
continuing thereafter for a period of fifteen (15) days (the "Due Diligence
Period"), Seller shall permit and, to the extent reasonably required by Buyer
(but at no cost or expense to Seller), assist Buyer in the making of (a) a
complete physical inspection of the Property, and (b) investigations of all
financial data, records, insurance policies, utility bills, tax bills, Leases,
contracts, Service Contracts and all documents or papers (including copies of
recorded plats of the Property and copies of building plans for the improvements
thereon) in the possession of Seller, its agents or other parties pertaining to
the ownership, condition and operation of the Property. The costs and expenses
of Buyer's review shall be borne solely by Buyer.
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If, at any time prior to the expiration of the Due Diligence Period, Buyer,
in its sole and absolute discretion, determines that it is unwilling to proceed
with this transaction for any reason whatsoever, then Buyer, at its sole
discretion and upon written notice to Seller on or before the expiration of the
Due Diligence Period, may terminate this Agreement, whereupon the Escrow Agent
shall return the Deposit and all interest earned thereon, but not the
Non-refundable Deposit, to Buyer, and this Agreement shall become null and void,
without further liability of either party to the other, except as otherwise
expressly set forth herein. Seller shall retain the Non-refundable Deposit. If
Buyer fails to notify Seller of its termination of this Agreement as set forth
above, then Buyer shall be deemed to have waived its right of termination under
this paragraph, in which event Buyer shall accept title to the Property in its
then "as-is" and "where-is" condition, subject to the representations and
warranties of Seller expressly set forth herein.
All information furnished by Seller to Buyer in accordance with this
Agreement or obtained by Buyer in the course of its review or Closing
preparation shall be treated as confidential information by Buyer and shall be
returned to Seller. In addition, until the Closing has been consummated, Buyer
will not, without Seller's written consent, disclose or discuss with any
employee of Seller, or any other member of the staff of the Hotel, any of the
following: (i) this Agreement or any of the terms hereof, (ii) the transaction
contemplated by this Agreement, or (iii) any aspect of the Hotel's operations or
finances. Furthermore, copies of all reports, engineering studies, analyses and
other documents and information resulting from investigations under this
paragraph by Buyer, or any of its employees, agents or representatives, also
shall be treated as confidential information by Buyer (although Buyer need not
deliver copies of the same to Seller). Buyer shall maintain a policy of
comprehensive general liability insurance in order to insure against any damage,
claim, loss or injury which Buyer, or any of its employees, agents or
representatives, may cause in conducting such studies, analyses or
investigations, which policy shall name Seller as an additional insured
thereunder. Buyer shall defend, indemnify and hold Seller harmless from and
against any liabilities, claims, demands or actions incident to, resulting from,
or in any way arising out of, such test, inspection or entry by or on behalf of
Buyer onto the Property. The foregoing indemnity shall survive the Closing and
not be merged therein. Buyer's feasibility study shall include all steps
necessary to determine whether substances regarded as hazardous by any
applicable law, solid wastes, or other substances known or suspected to pose a
threat to health or the environment (collectively, "Hazardous Substances") have
been disposed of or otherwise released on or to the Property or exist on or
within any portion of the Property. Buyer's failure to indicate disapproval
based on such feasibility study shall relieve Seller of any liability to Buyer
as a result of any environmental hazard on or to the Property subsequently
discovered.
13. Covenants of Seller. Seller hereby agrees that during the period
between the Effective Date and the Closing Date that:
(a) Seller will (i) manage the Property or cause the Property to be
managed in accordance with past practices and shall continue to offer
services and amenities, including the pricing of such services and
amenities in accordance with such past practices, and (ii) continue past
normal practice with respect to reasonable maintenance and repairs of the
Property and the Property will be at least in the same condition on the
Closing Date as on the Effective Date, except for normal wear and tear and
damage by any Casualty; provided, however, that nothing herein shall
obligate Seller to undertake
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any major repairs or major renovations or make capital improvements to the
Property, except for that required to operate the Property in the course of
its day to day business.
(b) Seller shall allow Buyer or Buyer's representatives access to the
Property, and to any books, records for the Hotel and other documents
required to be delivered under this Agreement, upon reasonable prior notice
at reasonable times. Buyer shall hold in strict confidence all matters
pertaining to the Property.
(c) Seller will operate the business in the ordinary course and will
not significantly change rates and salaries without Buyer's approval.
14. Buyer's Representations and Warranties. Buyer represents and warrants
to Seller as follows, which representations and warranties shall be true and
correct in all material respects as of the Effective Date and as of the Closing
Date, and which shall survive the Closing for a period of seven (7) years
thereafter:
(a) In the event that Buyer is not an individual, Buyer is duly
organized, validly existing and in good standing under the laws of the
State in which it has been formed.
(b) Buyer has full power and authority to enter into this Agreement
and to perform its obligations hereunder.
(c) The person executing this Agreement on behalf of Buyer has been
duly authorized to do so and, when so executed, this Agreement shall
constitute a valid obligation of Buyer, binding upon and enforceable
against Buyer in accordance with its terms.
Buyer will indemnify and hold harmless Seller, its successors and assigns,
from and against any and all loss, liability, damage, cost or expense,
including, without limitation, reasonable attorneys' fees, suffered or incurred
by Seller due to a breach of any of the foregoing representations and
warranties. No claim for a breach of any representation or warranty of Buyer
shall be actionable after Closing if the breach in question was actually known
to Seller prior to Closing.
15. Seller's Representations and Warranties. Seller represents and warrants
to Buyer as follows, which representations and warranties shall be true and
correct in all material respects as of the Effective Date and as of the Closing
Date, and which shall survive the Closing for a period of seven (7) years
thereafter that except as set forth on Exhibit F as attached hereto and as may
be amended from time to time by Seller through the Closing Date:
(a) To Seller's knowledge, no notice of any material violation of any
zoning, building or other law, ordinance, regulation, requirement or
directive of any type against the Property or any portion thereof has been
received by Seller from a governmental body.
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(b) To Seller's knowledge, no notice of a pending condemnation,
expropriation, eminent domain or similar proceeding affecting all or any
portion of the Property has been received by Seller.
(c) Seller will not enter into any employment contracts or deferred
compensation agreements with employees of Seller, if any, at the Property,
which will be binding upon Buyer after the Closing, without the prior
consent of Buyer.
(d) All of the Property to be transferred on the Closing Date shall be
in the same condition as on the Effective Date of this Agreement, except
for reasonable wear and tear.
(e) Seller is a corporation duly constituted, validly existing, and in
good standing under the laws of the State of Mississippi.
(f) To Seller's knowledge, Seller's income tax returns have not been
audited by the Internal Revenue Service or the State of Mississippi.
(g) As of the Closing Date, Seller will hold good and marketable title
to all of the Property, subject to no mortgage, pledge, lien, encumbrance,
security interest or charge, that will not be discharged prior to Closing,
other than the Permitted Exceptions.
(h) The Property is and will be adequately insured against fire and
casualty to the Closing Date, and valid policies therefor are and will be
outstanding and duly enforced, and the premiums to become due thereon to
the Closing Date will be paid when due by Seller. Seller has not received
any notice of any cancellation of policies pertaining to the foregoing.
Seller will indemnify and hold harmless Buyer, its successors and assigns,
from and against any and all loss, liability, damage, cost or expense,
including, without limitation, reasonable attorneys' fees, suffered or incurred
by Buyer due to a breach of any of the foregoing representations and warranties.
No claim for a breach of any representation or warranty of Seller shall be
actionable after Closing if the breach in question was actually known to Buyer
prior to Closing.
16. Indemnity and Survival. Seller agrees to and does hereby indemnify,
defend, exonerate and save Buyer harmless of and from any and all liability,
loss, damage, claim and expense incurred or suffered by Buyer arising out of or
incidental to the operation of the Property by Seller prior to the conveyance of
the Property to Buyer and for liability incurred by it relating to Hazardous
Substances during the time it owned the Property prior to the Closing, except
for any liability attributable to actions or omissions by Buyer, or any of its
employees, agents or representatives, in connection with the studies, analyses
or investigations to be conducted by or at the direction of Buyer in accordance
with the provisions of Section 12 hereof. Buyer agrees to and does hereby
indemnify, defend exonerate and save Seller harmless of and from any and all
liability, loss, damage, claims and expense incurred or suffered by Seller
arising out of or incidental to the operation of the Property by Buyer after the
conveyance of the Property to Buyer, including liability for Hazardous
Substances, from and after the Closing, except for any
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liability attributable to actions or omissions by Seller before the Closing. All
obligations of the parties called for herein shall survive the Closing of
Buyer's purchase of the Property.
17. AS IS, WHERE IS. THE PROPERTY IS BEING SOLD "AS IS, WHERE IS" AND,
EXCEPT AS SPECIFIED ANYWHERE IN THIS AGREEMENT, SELLER MAKES NO REPRESENTATION
OR WARRANTY OF ANY KIND AS TO THE CONDITION THEREOF, AND BUYER ACKNOWLEDGES THAT
BUYER IS RELYING ON ITS DUE DILIGENCE REVIEW IN PURCHASING THE PROPERTY. IT IS
UNDERSTOOD AND AGREED THAT BUYER ASSUMES FULL AND COMPLETE RESPONSIBILITY FOR
COMPLIANCE WITH ALL TITLES OF THE FEDERAL AMERICANS WITH DISABILITIES ACT
("ADA") AND THE REGULATIONS PROMULGATED PURSUANT THERETO, AS WELL AS ANY AND ALL
STATE OR LOCAL ACCESSIBILITY STANDARDS.
18. Deposit. [INTENTIONALLY DELETED]
19. Broker. Seller and Buyer each represent and warrant to the other that
it has not utilized the services of any real estate broker, salesperson or
finder in connection with this Agreement or the purchase and sale of the
Property contemplated hereby. Seller and Buyer each agree to indemnify, defend
and hold harmless the other and their respective successors and assigns from and
against all claims for brokerage commissions and finder's fees arising from or
attributable to the acts or omissions of the indemnifying party or any person or
entity purportedly acting on behalf of the indemnifying party. The foregoing
indemnifications shall survive the Closing for a period of two (2) years
thereafter.
20. Termination, Default and Remedies.
(a) Default by Seller. If Seller shall be in default hereunder,
Buyer's sole remedy shall be to terminate this Agreement by written notice
delivered to Seller at or prior to the Closing whereupon this Agreement
shall become null and void, without further liability of either party to
the other.
(b) Default by Buyer. In the event of a default by Buyer hereunder,
Seller's sole remedy shall be to terminate this Agreement by notice to
Buyer, whereupon this Agreement shall become null and void, without further
liability of either party to the other.
21. Special Conditions. [INTENTIONALLY DELETED]
22. Supplemental Documents. The parties agree to execute all documents
which may reasonably be required to effectuate the terms and provisions of this
Agreement.
23. Notices. Any notices given or required to be given hereunder shall be
by hand delivery, by overnight courier or by telecopy confirmed by answerback
received. Notices shall be deemed given on the date sent for hand delivery and
telecopy, and the day after the date sent for overnight courier. All notices
shall be sent to the following addresses, or such other addresses as the party
may direct by written notice:
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IF TO SELLER: WITH A COPY TO:
Arlington Hospitality, Inc. Xxxxxxx & Xxxxxxxx Ltd.
0000 Xxxxx Xxxxxxxxx Heights Road--Suite 400 444 North Michigan Avenue--Suite 2500
Xxxxxxxxx Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Attention: Xxxxx Xxxx, Chief Financial Officer Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
Telephone: 000-000-0000 Telephone: 000-000-0000
Facsimile: 000-000-0000 Facsimile: 000-000-0000
IF TO BUYER: WITH A COPY TO:
Xxxxxxx X. Xxxxx Xxxxx Xxxxxxx
000 Xxxx Xxxxx 22 203 North LaSalle Street--Suite 0000
Xxxxx Xxxxxxxxxx, XX 00000 Xxxxxxx, XX 00000
Telephone: 000-000-0000 Attention: Xxxxx Xxxxxxxxxx, Esq.
E-Mail: xxxxxxx@xxx.xxx Telephone: 000-000-0000
Facsimile: 000-000-0000
IF TO ESCROW AGENT:
First American Title Insurance Company
00 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxx, Esq.
24. Section Headings. The section headings used herein are inserted solely
for the convenience of reference and shall not affect the construction or
interpretation of this Agreement.
25. Entire Contract. This Agreement constitutes the entire sale and
purchase contract between the parties hereto and there are no other
understandings, oral or written, relating to the subject matter hereof. This
Agreement may not be changed, modified or amended, in whole or in part, except
in writing, signed by all parties.
26. Invalid Provisions. If any one or more the provisions of this
Agreement, or the applicability or any such provision to a specific situation,
shall be held invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it or its application valid and enforceable,
and the validity and enforceability of all other provisions of this Agreement
and all other applications of any such provision shall not be affected thereby.
27. Construction. The words "include" or "including" shall be construed as
incorporating, also "but not limited to" or "without limitation." The word "day"
means a calendar day, unless otherwise specified. The words "herein," "hereof,"
"hereunder" and other similar compounds of the words "here" when used in this
Agreement shall refer to the entire Agreement and not to any particular
provision or section. If the last day of any time period stated herein shall
fall on a Saturday, Sunday or legal holiday, then the duration of such time
period shall be extended so that it shall end on the next succeeding day which
is not a Saturday, Sunday or legal holiday. Whenever used in this Agreement, the
singular shall include the plural, the plural the singular, and the use of any
gender shall be applicable to all genders. Marginal
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notes are inserted for convenience only and shall not form part of the text of
this Agreement. No inference in favor or against either party shall be drawn
based upon which party or which party's counsel served as principal draftsman of
this Agreement.
28. Covenant Not to Record. Buyer will not record this Agreement. Any
attempted recording of this Agreement by Buyer shall constitute a default
hereunder on the part of Buyer and shall cause forfeiture by Buyer of the
Deposit and all interest thereon and the Non-refundable Deposit.
29. Binding Effect. This Agreement and the terms and conditions hereof
shall extend to and be binding upon the parties hereto and their successors and
assigns; provided, that Buyer only may assign this Agreement (with written
notice to Seller) to an entity controlled by Buyer, and in such event, Buyer
shall remain liable hereunder.
30. Counterparts and Copies. This Agreement may be executed in several
counterparts, all of which, when taken together, shall be deemed to be one
original. Each fully executed copy also shall be deemed to be an original.
31. Governing Law. This Agreement shall be governed by and construed in
accordance with substantive laws of the State of Mississippi.
32. Notice to Third Parties. Buyer and Seller jointly shall inform all
contractors, suppliers, and required others (all as mutually agreed to by Buyer
and Seller) of the sale of the Property to Buyer. The form and substance and
timing of such notice and the persons to whom such notices are to be sent are to
be mutually agreed upon by Buyer and Seller, but in no event shall such notice
be sent prior to expiration of the Due Diligence Period, or sooner than seven
(7) days prior to the Closing.
33. Like Kind Exchange. Notwithstanding anything contained herein to the
contrary, in the event that Seller desires to complete the sale of the Property
contemplated hereby as part of a "like-kind exchange" in accordance with
Internal Revenue Code Section 1031, Buyer agrees to execute and deliver any and
all documents and instruments reasonably required in order to accomplish the
foregoing.
34. Gift Certificates. Buyer must honor whirlpool gift certificates
("Certificates") for a period of one (1) year after the Closing Date. Seller
shall reimburse Buyer $25.00 for each Certificate if redeemed when the Hotel was
not sold-out and $50.00 for each Certificate if redeemed when the Hotel was
sold-out. This provision shall survive the Closing.
35. Effective Date. The date of formation of this Agreement shall for all
purposes be the date of the last party to execute this Agreement between Buyer
and Seller (the "Effective Date"). If not effective by ten (10) days following
the date of counterpart execution of this Agreement by Seller, this Agreement
shall be null and void.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
later of the dates written below.
BUYER: SELLER:
MPH INVESTMENTS OF MISSISSIPPI, INC., AP PROPERTIES OF MISSISSIPPI, INC.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxx
-------------------------------- ------------------------------
Xxxxxxx X. Xxxxx, President Xxxxx X. Xxxx, Secretary
Dated: November 7, 2002 Dated: November 7, 2002
-------------------------------- ---------------------------
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