PURCHASE AND SALE AGREEMENT
between
WEST MONTROSE PROPERTIES,
an Ohio limited partnership
as Seller,
and
JANUS AMERICAN GROUP, INC.,
A Delaware corporation
as Buyer
TABLE OF CONTENTS
Page
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1. Definitions
(a) "Affiliated Sale Agreements" 4
(b) "Agreement" 4
(c) "Assets" 4
(d) "Closing" 4
(e) "Closing Date" 4
(f) "Concurrent Escrows" 4
(g) "Contracts" 5
(h) "Documents" 5
(i) "Xxxxxxx Money" 5
(j) "Escrow" 5
(k) "Escrow Agent" 5
(l) "Feasibility Expiration Date" 5
(m) "Federal Code" 5
(n) "Food and Beverage Inventory" 5
(o) "Franchise Agreement" 5
(p) "Franchisor" 5
(q) "Hotel" 5
(r) "Improvements" 5
(s) "Intangible Property" 5
(t) "Latent Defects" 6
(u) "Laws" 6
(v) "Managing Partner" 6
(w) "Operating Equipment" 6
(x) "Operating Supplies" 6
(y) "Person" 6
(z) "Permitted Title Exceptions" 6
(aa) "Permitted Transferee" 6
(ab) "Personalty" 6
(ac) "Purchase Price" 6
(ad) "Real Property" 6
(ae) "Title Agent" 7
2. Agreement of Purchase and Sale 7
3. Purchase Price 7
(a) Xxxxxxx Money 7
(b) Liquidated Damages 7
(c) Cash at Closing 7
4. Allocation of Purchase Price 8
5. Buyer's Contingencies 8
(a) Due Diligence 8
(b) Conditions to Buyer's Obligations 9
6. Seller's Contingencies and Covenants 10
(a) Seller's Contingencies 10
(i) Buyer's Covenants 10
(ii) Closing of Concurrent Escrows 10
(iii) Truth of Representations 10
(iv) Franchisor Consent 10
(v) Release 11
(vi) Consulting Agreement 11
(b) Covenants 11
(i) Maintenance of the Assets 11
(ii) Permits and Approvals 11
(iii) Notification to Existing Employees 11
(iv) Seller's Obligations Concerning Its Employees 12
(v) Franchise Transfer 12
7. Inspections 12
(a) Entry and Investigation 12
(b) No Interference 12
8. Title Insurance Policy 13
9. The Escrow and Closing 13
(a) Escrow Instructions 13
(b) Closing 13
(c) Action at the Closing by Seller 13
(d) Action at the Closing by Buyer 15
(e) Closing Costs 15
(f) Pre-Closing Settlement Statement 16
(g) Transfer of Guest Property in Safe Keeping 16
10. Apportionments 16
(a) Closing Adjustments and Proration of Taxes, Rents, and Other Costs 16
(b) Utility and Maintenance Charges 18
(c) Adjustments to Prorations 18
11. Indemnification 19
12. Possession 19
13. Representations and Warranties 20
(a) Buyer 20
(b) Seller 20
14. Notices 22
15. Seller's Remedies 23
16. Buyer's Remedies 23
17. Casualty; Condemnation 23
18. Commissions 23
19. Disclaimer 24
20. Confidentiality and Return of Documents 24
21. Waiver 25
22. Time Periods 25
23. Survival of Covenants, Agreements, Representations and Warranties 25
24. Modification of Agreement 25
25. Further Instruments 25
26. Entire Agreement 25
27. Inurement 26
28. Applicable Law 26
29. Descriptive Headings 26
30. Time of the Essence 26
31. Assignment 26
32. Construction 26
33. Interpretation 26
34. Exhibits and Schedules 26
35. Counterparts 26
36. Recordation 26
37. Exclusive Negotiations 26
38. IRS Real Estate Sales Reporting 27
39. Bulk Sales Waiver 27
SCHEDULES
Affiliated Sales Agreements
Contracts
Franchise Agreement
Personalty
Real Property
Allocation of Purchase Price
Disclosure Statement
EXHIBITS
Consulting Agreement
Limited Warranty Deed
Affidavit of Non-Foreign Person
Assignment and Assumption
Assignment of Intangible Property
Xxxx of Sale
Assignment and Assumption of the Franchise Agreement
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (the "Agreement") is made effective as of the
31st day of July, 1998, by and between WEST MONTROSE PROPERTIES., an Ohio
limited partnership ("Seller"), and JANUS AMERICAN GROUP, INC., a Delaware
corporation and/or its Permitted Transferee (hereinafter collectively referred
to as "Buyer").
Background of Agreement
A. Seller is the owner of certain real property located in Akron, Ohio, having
located thereon a 136-room hotel known as the Montrose West Comfort Inn.
B. Buyer desires to purchase such real property and related assets, and Seller
desires to sell to Buyer such real property and related assets, subject to and
in accordance with the terms, covenants and conditions of this Agreement.
Agreement
NOW, THEREFORE, in consideration of the premises, the terms, conditions and
covenants contained herein and for other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS. As used in this Agreement, the terms below shall have the
following meanings unless the context requires otherwise.
(a) "Affiliated Sale Agreements". The various purchase and sale agreements
described on Schedule "A" hereto.
(b) "Agreement". This Purchase and Sale Agreement, as amended or
supplemented from time to time.
(c) "Assets". The Contracts, the Documents, the Improvements, the
Intangible Property, the Personalty, and the Real Property now owned, or
hereafter acquired, by Seller in connection with or relating to the Hotel.
(d) "Closing". The event at which the transaction contemplated hereby will
be consummated and when Buyer acquires title to the Assets.
(e) "Closing Date". The date designated by Buyer in a written notice
delivered to Seller at least five (5) business days in advance; however, in no
event shall the Closing Date occur later than the date provided in subparagraph
9(b) hereof.
(f) "Concurrent Escrows". The escrows, established with Escrow Agent
pertaining to the purchase by Buyer of certain other hotel properties and
related assets pursuant to the Affiliated Sale Agreements.
(g) "Contracts". All service contracts, equipment leases, booking
agreements and other arrangements or agreements to which Seller is a party
affecting the ownership, repair, maintenance, management, leasing or operation
of the Hotel that will remain in effect after Closing, all of which are
described on Schedule "B" hereto.
(h) "Documents". All books, records and files relating to the leasing,
maintenance, management or operation of the Hotel in Seller's possession or in
the possession of any management company currently managing any portion of the
Hotel.
(i) "Xxxxxxx Money". The deposit required to be paid by Buyer to Escrow
Agent pursuant to subparagraph 3(a), together with all interest earned thereon.
(j) "Escrow". The Escrow established with Escrow Agent to facilitate the
transaction contemplated hereby, bearing Escrow No. .
(k) "Escrow Agent". American Title Company, 0000 Xxxx Xxxx Xxxx, Xxxxx 000,
Xxxxxx, Xxxxx 00000.
(l) "Feasibility Expiration Date". July 25, 1998.
(m) "Federal Code". The United States Internal Revenue Code of 1986, as
amended.
(n) "Food and Beverage Inventory". All inventory of food and beverages,
including alcoholic beverages, owned by Seller located at the Hotel, and used in
the operation of any restaurant, cafe, bar or other food service operation
within the Hotel.
(o) "Franchise Agreement". The agreement and/or agreements referenced on
Schedule "C" attached hereto.
(p) "Franchisor". Comfort Inn Franchising, Inc., a Delaware corporation.
(q) "Hotel". The 136-room hotel located on the Real Property known as the
Montrose West Inn.
(r) "Improvements". All buildings, fixtures, walls, fences, landscaping and
other structures and improvements situated on, affixed or appurtenant to the
Real Property.
(s) "Intangible Property". All transferable or assignable permits, building
plans and specifications, certificates of occupancy, operating permits, sign
permits, development rights and approvals, certificates, licenses, including,
without limitation, liquor licenses, warranties and guarantees, rights to
deposits, rebates and refunds, trade names, service marks, appraisals,
engineering, soils, pest control and other reports relating to the Hotel, the
Contracts, customer or tenant lists, correspondence with present or prospective
tenants, customers or
suppliers, advertising materials, telephone exchange numbers identified with the
Hotel, and all other transferable intangible property, miscellaneous rights,
benefits or privileges of any kind or character with respect to the Hotel.
(t) "Latent Defect". Any defect in the Hotel which could not have been
discovered through a reasonable due diligence inspection of the Hotel by Buyer.
(u) "Laws". All present and future laws, statutes, codes, ordinances,
orders, awards, judgments, decrees, injunctions, approvals, permits,
requirements, regulations and licenses of every governmental or
quasi-governmental authority or agency.
(v) "Managing Partner". Xxxxxxx Xxxxxxxx
(w) "Operating Equipment". All chinaware, glassware, linens, silverware,
tools, kitchen utensils, uniforms, engineering and housekeeping tools, vans,
automobiles, and other equipment and utensils owned by Seller and used in the
operation of the Hotel.
(x) "Operating Supplies". All fuel, soap, toilet paper, tissues,
toiletries, towels, light bulbs, mechanical stores, cleaning supplies and
materials, pool maintenance supplies and materials, matches, stationery, paper
supplies, laundry supplies, housekeeping supplies, accounting supplies, goods
and merchandise used for retail sale and other immediately consumable items,
owned by Seller and used in the operation of the Hotel.
(y) "Person". Any individual, firm, corporation, partnership, limited
liability company, trust or other entity.
(z) "Permitted Title Exceptions". The various matters affecting title to
the Assets that are approved by Buyer pursuant to subparagraph 5(a) below.
(aa) "Permitted Transferee". Buyer or JAGI Montrose West, L.L.C., a
Delaware limited liability company.
(ab) "Personalty". All furniture (including television sets, except where
leased), furnishings, fixtures, equipment (including, without limitation, office
equipment and the Operating Equipment), machinery, tools, pool maintenance
equipment, inventory, drapes, carpeting, rugs, artwork, the Operating Supplies,
the Food and Beverage Inventory, and other items of personal property owned by
Seller and found or used exclusively at the Hotel, including, without
limitation, the items described on Schedule "D" hereto.
(ac) "Purchase Price". The purchase price for the Assets as set forth in
Paragraph 3 hereof.
(ad) "Real Property". The real property more particularly described on
Schedule "E" attached hereto, together with all easements, rights of ways,
privileges, licenses and appurtenances which Seller may now own or hereafter
acquire with respect to such real property.
(ae) "Title Agent". Chicago Title Insurance Company.
2. AGREEMENT OF PURCHASE AND SALE . At the Closing, subject to the terms,
covenants and conditions of this Agreement, Seller shall sell to Buyer and Buyer
shall purchase from Seller the Assets.
3. PURCHASE PRICE. The Purchase Price to be paid for the Assets shall be Three
Million Four Hundred Seventy-Nine Thousand Nine Hundred Dollars ($3,479,900.00)
payable by Buyer as follows:
(a) Xxxxxxx Money. Promptly following the execution of this Agreement,
Buyer shall deposit with Escrow Agent, Twenty-Four Thousand Eight Hundred
Seventy-Nine Dollars and No/100 Dollars ($24,879.00) as Xxxxxxx Money to be held
in the Escrow in accordance with the terms and conditions of this Agreement.
Escrow Agent is hereby authorized and directed to invest all funds deposited by
Buyer into Escrow as directed by Buyer. Interest on the Xxxxxxx Money shall
accrue for the benefit of and be payable to the party otherwise entitled to such
sums upon the Closing or earlier termination of this Agreement. If the sale of
the Assets contemplated hereunder is consummated, the Xxxxxxx Money (inclusive
of all interest earned thereon) shall be paid to Seller at the Closing and
applied as a credit against Buyer's payment of the Purchase Price.
(b) Cash at Closing. On or before the Closing Date, Buyer shall deliver to
Escrow Agent, for the benefit of Seller, the remaining balance of the Purchase
Price (reduced by any credits due Buyer hereunder) by wire transfer of
immediately available funds to the account of Escrow Agent.
4. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated as set
forth in Schedule "F" hereto. Buyer and Seller agree that the allocations set
forth in Schedule "F" were determined in good faith and at arms length, and
represent the parties' best good faith estimate of the fair market value, as of
the Closing Date, of each component of the Assets described on Schedule "F".
Buyer and Seller shall each report the transactions contemplated by this
Agreement for income tax purposes in accordance with the agreed upon allocations
set forth on Schedule "F" and will not take or assert a position inconsistent
therewith.
5. BUYER'S CONTINGENCIES. The following are conditions precedent to Buyer's
obligation to purchase the Assets:
(a) Due Diligence. Buyer shall have until the Feasibility Expiration Date
within which to perform such physical inspections and other reasonable due
diligence pertaining to the Assets as Buyer deems necessary, and to decide, in
Buyer's sole discretion, whether the Assets are in all respects satisfactory to
Buyer. Such due diligence shall include, without limitation, the following:
(i) Title. Buyer's review and approval of title to the Property, as
follows. Seller shall, as soon as possible after executing this Agreement,
deliver to Buyer at Seller's sole cost and expense:
(A) a current extended coverage preliminary title report on the
Real Property, issued by Title Agent, and accompanied by copies of all
documents referred to in the report;
(B) copies of all existing and proposed easements, covenants,
restrictions, agreements or other documents which affect the Property
and which are not disclosed by the preliminary title report, or, if no
such documents exist, a certification of Seller to that effect;
(C) an ALTA/ACSM "as-built" survey of the Real Property and
Improvements prepared by a licensed surveyor or engineer (the
"Survey"). The Survey shall be acceptable and certified by the
surveyor to Buyer and in sufficient detail to provide the basis for
the Title Policy (as defined below) without boundary, encroachment or
survey exceptions, and shall show the location of all easements and
Improvements (including underground improvements) and any and all
other pertinent information with respect to the Property. The Survey
shall also indicate any encroachments of Improvements onto easements
or onto adjacent properties or certify to their absence, the presence
of improvements and easements on property adjoining the Real Property
if located within five (5) feet of the boundaries of the Real
Property, the number and location of all parking spaces on the
Property, and the square footage of the Real Property and the
Improvements. Prior to Closing, the Survey shall be certified to Buyer
and to the company issuing the Title Policy; and
(D) copies of the most recent property tax bills for the Property
and any filings, notices or correspondence regarding any challenges or
appeals to the applicable taxes, and copies of any improvement
assessments and any other bonds and assessments affecting the
Property.
Buyer shall advise Seller, within ten (10) days after actual receipt of all such
materials, what exceptions to title, if any, are objectionable to Buyer. Any
exceptions not objected to shall be deemed accepted by Buyer (the "Permitted
Exceptions"). Seller shall have ten (10) days after receipt of Buyer's
objections to give Buyer notice: (1) that Seller will remove any objectionable
exceptions from title and provide Buyer with evidence satisfactory to Buyer of
such removal, or provide Buyer with evidence satisfactory to Buyer that said
exceptions will be removed on or before the Closing, or (2) that Seller elects
not to cause such exceptions to be removed. Seller's failure to notify Buyer
within such ten (10) day period shall be deemed an election by Seller not to
remove the objectionable exceptions as provided in clause (2) above. If Seller
elects not to cure under clause (2), notwithstanding that the Feasibility
Expiration Date shall have passed, Buyer shall have ten (10) days to elect
whether to proceed with the purchase and take the Real Property subject to such
exceptions, or to terminate this Agreement. If Buyer shall fail to give Seller
notice of its election within said ten (10) days, Buyer shall be deemed to have
elected not to proceed with this Agreement.
(ii) Physical Characteristics. Buyer's review and approval of the
structural, mechanical, electrical and other physical characteristics of
the Hotel.
(iii) Reports. Buyer's receipt and approval of satisfactory
architectural, engineering, soils and environmental reports. Pursuant to
the terms of Paragraph 7 of this Agreement, Seller shall provide Buyer the
opportunity to conduct, at Buyer's expense, an environmental site
assessment by a qualified engineer to determine the extent, if any, that
the Hotel contains any asbestos, underground storage tanks, or any other
toxic or hazardous substance or materials, or other environmental hazards
as defined by applicable Laws.
If Buyer is not satisfied, for any reason determined in its sole discretion,
with the results of its due diligence investigation, or if for no reason, Buyer
may terminate this Agreement by written notice to Seller and Escrow Agent
delivered on or before the Feasibility Expiration Date. Buyer's failure to
timely deliver written notice of termination on or before the Feasibility
Expiration Date shall be deemed Buyer's election to proceed with this Agreement.
Upon such termination Buyer shall be entitled to the return of the Xxxxxxx Money
and thereafter, except as provided in Paragraphs 7 and 21, neither party shall
have any further rights or obligations hereunder. Buyer's right to conduct any
inspection of the Assets shall be governed by the provisions of Paragraph 7
below.
(b) Conditions to Buyer's Obligations. Buyer's obligation to purchase the
Assets shall be subject to the following further conditions precedent:
(i) Buyer's Mortgage. A first mortgage loan with respect to all of the
Affiliated Sales Agreements aggregating not less than Thirty-Six Million
Dollars ($36,000,000) under terms and conditions acceptable to Purchaser;
(ii) Appraisals. Appraisals on the Hotels and those hotels subject of
the Affiliated Sales Agreements aggregating not less than Forty-Two Million
Five Hundred Thousand Dollars ($42,500,000);
(iii) PIP Reports. "PIP" reports approved by Holiday Inn and Comfort
Inn acceptable to Buyer in an aggregate amount for the Hotel and those
hotels subject to the Affiliated Sales Agreements not to exceed Two Million
Five Hundred Thousand Dollars ($2,500,000);
(iv) Franchisor Approval. Approval of Buyer as a franchisee by
Franchisor;
(v) Title Insurance. Receipt by Buyer of an ALTA Owner's Title
Insurance Policy together with any agreed endorsements;
(vi) Consulting Agreement. Buyer entering into a consulting agreement
with The Cornerstone Company, in the form of Exhibit "A" hereto (the
"Consulting Agreement").
(vii) Closing of Concurrent Escrows. The purchase and sale
transactions that are the subject of the Concurrent Escrows shall be
consummated in accordance with the respective terms and conditions thereof
on the Closing Date concurrently with the closing of the Escrow and
consummation of the transaction contemplated by this Agreement.
6. SELLER'S CONTINGENCIES AND COVENANTS.
(a) Seller's Contingencies. The following are conditions precedent to
Seller's obligation to sell the Assets:
(i) Buyer's Covenants . All covenants of Buyer shall have been
fulfilled by Buyer in timely fashion or waived by Seller;
(ii) Closing of Concurrent Escrows. The purchase and sale transactions
that are the subject of the Concurrent Escrows shall be consummated in
accordance with the respective terms and conditions thereof on the Closing
Date concurrently with the closing of the Escrow and consummation of the
transaction contemplated by this Agreement;
(iii) Truth of Representations. All of Buyer's representations and
warranties contained in or made pursuant to this Agreement shall have been
true and correct when made and shall be true and correct as of the Closing
Date;
(iv) Franchisor Consent. Consent to the consummation of the
transaction contemplated by this Agreement shall have been obtained from
Franchisor; and
(v) Release. Release of Sellers, by Franchisor, of any future
responsibility or liability to the Franchisor for termination or transfer
fees, or for actions or events occurring after the Closing Date (the
"Franchisor Release"); provided, however, Seller shall remain liable for
all amounts due and owing to Franchisor for activities of Seller prior to
the Closing Date.
(vi) Consulting Agreement. Buyer entering into a consulting agreement
with The Cornerstone Company, in the form of Exhibit "A" hereto (the
"Consulting Agreement").
(b) Covenants.
(i) Maintenance of the Assets. From and after the date hereof to the
Closing Date, Seller shall: (A) cause the Hotel to be maintained and
operated in compliance with all Laws, in accordance with its current
standards and consistent with its past operating procedures for the Hotel,
shall maintain present services, shall maintain sufficient Food and
Beverage Inventory, and Operating Supplies for the proper management,
maintenance, operation and servicing of the Hotel and shall continue to
market the Hotel and to accept reservations and group bookings at its
currently established rates therefor; (B) not sell or otherwise dispose of
any significant items of Personalty (other than Food and Beverage Inventory
and Operating Supplies in connection with the ordinary course operation or
maintenance of the Property) unless replaced with an item of like value,
quality and utility; (C) not enter into any service, maintenance,
landscaping, operating, repair, equipment lease, employment, management,
leasing or other similar contract or agreement relating to the operation or
maintenance of the Hotel, except for those entered into in the ordinary
course of business and which are cancelable upon not more than thirty (30)
days prior notice or in the event of a sale of the Hotel; and (D) maintain
in full force and effect all liability and casualty insurance currently in
effect. The insurance currently in effect is described in Exhibit F. Seller
shall timely perform all its obligations under all Contracts (including,
without limitation, the Franchise Agreement), including, without
limitation, the payment of all bills, charges, invoices, salaries,
benefits, and other expenses arising in connection with the Hotel prior to
the Closing Date.
(ii) Permits and Approvals. Seller shall cooperate with Buyer in
obtaining all Permits and Approvals required for Buyer's intended use and
operation of the Hotel and shall not seek or acquiesce in any amendment to
any of the existing Permits and Approvals or any change in the present
zoning classification of the Real Property which would alter the present
permitted uses of the Real Property.
Notification to Existing Employees. Prior to Closing, Seller will notify
its employees at the Hotel of the pending sale in writing and the date the
sale will be effective. Such notice shall further inform the employees that
they will be offered an opportunity to submit applications for employment
to Buyer or its Agent, and that Buyer or its Agent shall continue to employ
those individuals who meet certain employment criteria to be determined at
the sole discretion of Buyer or its Agent.
(iv) Seller's Obligations Concerning Its Employees. Within ten (10)
days of the closing of this transaction, or as soon thereafter as required
by law, Seller shall pay to all employees receiving notice of the sale
under Section 6(b)(iii) above the full amount of wages earned and other
benefits accrued as of such date (including the entire amount of all
vacation accruals) or the last day an employee worked if employee is no
longer employed on the date set forth above and shall remain fully liable
for any related payroll expenses, severance pay, unfair labor practice
claims, employment discrimination charges and other employee claims
relating to any period prior to the closing. After the closing, Seller
shall transfer to Buyer or its Agent, the records of all employees who
submit applications or otherwise request to continue their employment
relationship with the Hotel if each such employee making application has
first executed a Release/Consent to Transfer Records form which has been
provided to Seller.
(v) Franchise Transfer. Promptly following the date of this Agreement,
Seller shall notify Franchisor of the sale contemplated by this Agreement.
Seller shall use its best efforts to ascertain, and provide written notice
thereof to Buyer prior to the Feasibility Expiration Date, the specific
requirements (including the PIP) of Franchisor to obtaining its consent to
the sale contemplated hereby and allowing the Franchise Agreement to be
assigned to Buyer. It is contemplated that Buyer's inspection and the PIP
requirements will result in no more than $2,500,000 of improvements being
required to be made to the Hotel and those hotels which are the subject of
the Affiliated Sale Agreements (the "PIP Requirements").
The parties acknowledge that in order to obtain from the Franchisor a Franchise
Agreement for the Hotel, a Franchise Fee of $40,000 shall be due and owing to
the Franchisor, which Franchise Fee Seller agrees to pay.
The parties agree that the cost to satisfy the PIP Requirements for this Hotel
is estimated to be $20,000, which cost Seller agrees to pay, but only on the
condition to the extent that, at the time of Closing of this sale transaction, a
separate escrow account is established from Seller's gross sales proceeds in
such amount (the "PIP Escrow"). The PIP Escrow funds shall be used solely and
exclusively for the purpose of paying the costs of completing the PIP
Requirements, and Seller shall have absolutely no right to claim any right,
title or interest to the PIP Escrow other than for the purpose of paying for the
cost of completing PIP Requirements. It is agreed that responsibility for taking
all actions required in order to complete the PIP Requirements shall be as set
forth in the Franchise Agreement, and in order to comply with the terms of
Buyer's mortgage financing, Amresco Capital, L.P. ("Amresco") will hold the PIP
Escrow in a non-interest bearing account. Release of funds from the PIP Escrow
shall be subject to the requirements and consent of Amresco and shall be pledged
to Amresco as security for the Buyer's Mortgage loan to Amresco and to insure
completion of the PIP Requirements. If funds remain in the PIP Escrow after
completion of the PIP Requirements (which is not anticipated), such excess funds
shall be paid to Amresco as a principal payment on the Buyer's mortgage loan. If
the PIP Escrow is insufficient to complete the PIP Requirements, Seller shall
have absolutely no responsibility to fund such deficit. Because third parties
shall control and supervise the completion of the PIP Requirements, Seller shall
have no liability or responsibility therefor, and makes no representation or
warranty that the PIP Requirements shall be completed in a workmanlike manner,
or otherwise, and/or can be completed at a cost equal to the amount of the PIP
Escrow.
7. INSPECTIONS.
(a) Entry and Investigation. Between the date hereof and the Feasibility
Expiration Date, Seller grants to Buyer and its employees, agents, contractors
and consultants (collectively, "Consultants"), a license to enter the Hotel at
reasonable times for the purpose of performing certain inspections on or
concerning the Hotel, which inspections may include: (i) research regarding the
Property and surrounding parcels as is generally conducted in a Level I or Phase
I environmental audit, surveying the Real Property, and conducting other
inspections of the Real Property and the physical condition of the Improvements
and any furniture, fixtures, equipment and machinery located therein; (ii) the
performance of engineering or structural investigations and tests of the Hotel
and any improvements thereon as may be approved by Seller; (iii) reviewing the
books and records of the Hotel; and (iv) meeting with and interviewing
Franchisor and other persons involved in property management of the Hotel
(collectively, the "Investigation"). The Investigation and all related
activities or events shall be limited and conducted as herein required, all at
Buyer's sole risk, cost and expense. Seller shall incur no cost or expense in
connection with the Investigation or any related activities or events.
(b) No Interference. The Investigation shall be diligently performed and
prosecuted to completion so as to minimize interference with the operation or
use of the Hotel by Seller and
its employees, agents and contractors and any hotel guests or other invitees and
licensees. Any entry and any Investigation by Buyer or its Consultants shall be
subject to and conducted in accordance with all Contracts and the Franchise
Agreement. Because of Seller's concern with any interference with the operation
of the Hotel, Seller reserves the right to impose reasonable restrictions on
time and frequency of Buyer's entry, provided such restrictions shall not
interfere with Buyer's ability to complete the Investigation prior to the
Feasibility Expiration Date. All persons who enter the Hotel shall do so at
their own risk. Buyer acknowledges and agrees that Buyer and its Consultants
shall cooperate with and comply with all directions of Seller and its
Consultants.
8. TITLE INSURANCE POLICY. At the Closing, and as a condition to Buyer's
obligation to close, Escrow Agent shall deliver to Buyer an extended coverage
owner's policy of title insurance (ALTA Form) issued by Title Agent, or the
unconditional commitment of Title Agent, to issue such policy, insuring Buyer in
the amount of the portion of the Purchase Price allocated to the Real Property
as set forth on Schedule "F" that title to the Real Property has vested in Buyer
free and clear of all liens and encumbrances other than the Permitted Title
Exceptions and such other matters as are approved by Buyer in writing, together
with such endorsements and such reinsurance (with direct access) as is requested
by Buyer (the "Title Policy"). The Title Policy shall provide full coverage
against mechanics' and materialmen's liens arising out of the construction,
repair or alteration of any of the Improvements. Buyer and Seller shall each be
responsible for one-half of the title insurance premium. Buyer shall be
responsible for the cost of any endorsements and reinsurance requested by Buyer.
9. THE ESCROW AND CLOSING.
(a) Escrow Instructions. Buyer and Seller shall establish the Escrow with
Escrow Agent to facilitate the consummation of the transactions contemplated by
this Agreement. Buyer and Seller shall provide Escrow Agent with instructions
consistent with this Agreement and each agrees to execute such additional
instructions as may be reasonably requested by Escrow Agent in connection
herewith. If any conflict or inconsistency exists between the provisions of any
instructions provided to Escrow Agent and this Agreement or any deed, instrument
or document executed or delivered in connection with the transaction
contemplated hereby, the provisions of this Agreement, or such deed, instrument
or document shall control in resolving such conflict or inconsistency. No
provision of any such instructions shall excuse any performance by either party
at the times provided in this Agreement, extend the Closing Date provided for
herein or provide either party hereto with any grace period not provided in this
Agreement, and any such provision in such instructions shall be deleted.
(b) Closing. The Closing shall occur through the Escrow and shall take
place on the Closing Date at Escrow Agent's office at 10:00 a.m., or such other
place or time as the parties may mutually agree in writing. Subject to the
conditions and contingencies set forth herein, the Closing shall take place not
later than thirty (30) days after the Feasibility Expiration Date, provided that
the Closing Date may be extended, at the Buyer's option, by up to two (2)
extensions of thirty (30) days each upon deposit by the Purchaser into the
Escrow of additional non-refundable deposits in the amount of Eight Thousand Two
Hundred Fifty-Eight and No/100
Dollars ($8,258.00) each. Any such additional deposits into the Escrow shall be
paid to Seller at the Closing and applied as a credit against Buyer's payment of
the Purchase Price. Interest on such additional deposits shall accrue for the
benefit of and be payable as the Xxxxxxx Money.
(c) Action at the Closing by Seller. At or prior to the Closing, Seller
shall each, as applicable, deliver or cause to be delivered to Buyer, or to
Escrow Agent for the account of Buyer, all of the following, and with respect to
any instruments referred to below, all such instruments shall be dated as of the
Closing Date, fully and duly executed by Seller and, if appropriate,
acknowledged:
(i) Deed. A Statutory Form Limited Warranty Deed from Seller conveying
the Real Property to Buyer in the form of Exhibit "B" hereto;
(ii) Affidavit. An Affidavit of Non-Foreign Person from Seller as
contemplated by Federal Code Section 1445, in the form of Exhibit "C"
hereto;
(iii) Assignment and Assumption. An Assignment and Assumption of
Contracts from Seller (excluding the Franchise Agreement) in the form of
Exhibit "D" hereto with respect to those Contracts to which Buyer has
elected to accept;
(iv) Assignment of Intangible Property. An Assignment of the
Intangible Property from Seller in the form of Exhibit "E" hereto;
(v) Xxxx of Sale. A Xxxx of Sale from Seller relating to the
Personalty in the form of Exhibit "F" hereto;
(vi) Assignment and Assumption of Franchise Agreement. An Assignment
and Assumption of the Franchise Agreement (if required) in the form of
Exhibit "G";
(vii) Keys. All keys and/or means to operate all locks and alarms for
the Property;
(viii) Contracts. The originals of the Contracts and the Documents to
the extent in Seller's possession and not previously delivered to Buyer.
(ix) The Consulting Agreement. The Consulting Agreement
(x) Due Authorization. Such documentation as is reasonably
satisfactory to Escrow Agent evidencing that Seller, and the individual
signing on behalf of Seller, has the power and authority to execute and
deliver this Agreement and all documents and instruments required or
contemplated hereby;
(xi) Seller's Acknowledgment. A written acknowledgment of Seller's
approval of Escrow Agent's final settlement statement setting forth all
prorations, and adjustments made in accordance with the provisions of this
Agreement;
(xii) Lien Releases. Such documentation as is reasonably satisfactory
to Buyer and Escrow Agent to cause all of the Assets to be released from
any lien, financing statement, or other encumbrance which is not a
Permitted Exception; and
(xiii) Further Documentation. Such other instruments or documents as
are reasonably necessary to fulfill the covenants and obligations to be
performed by Seller pursuant to this Agreement, specifically including,
without limitation, all properly endorsed certificates of title necessary
to transfer all motor vehicles and such other documents necessary to
transfer all other licenses and permits.
(d) Action at the Closing by Buyer. At or prior to the Closing, Buyer shall
deliver or cause to be delivered to Buyer, or to Escrow Agent for the account of
Seller all of the following, and with respect to any instruments or documents
referred to below, all such items shall be dated as of the Closing Date, fully
and duly executed by Buyer and, if appropriate, acknowledged:
(i) Purchase Price. All funds necessary to pay the Purchase Price
together with all closing costs and applicable prorations payable by Buyer
as required by the provisions of this Agreement;
(ii) Assignment and Assumption. The Assignment and Assumption of
Contracts from Seller and the Assignment (excluding the Franchise
Agreement) in the form of Exhibit "D" hereto;
(iii) Assignment and Assumption of Franchise Agreement. The Assignment
and Assumption of the Franchise Agreement (if required) in the form of
Exhibit "G" hereto;
(iv) The Consulting Agreement. The Consulting Agreement;
(v) Due Authorization. Such documentation as is reasonably
satisfactory to Escrow Agent evidencing that Buyer, and the individual
signing on behalf of Buyer, has the power and authority to execute and
deliver this Agreement and all documents and instruments required or
contemplated hereby;
(vi) Buyer's Acknowledgment. A written acknowledgment of Buyer's
approval of Escrow Agent's final settlement statement setting forth all
prorations and adjustments made in accordance with the provisions of this
Agreement; and
(vii) Further Documentation. Such other funds, instruments, or
documents as are reasonably necessary to fulfill the covenants and
obligations to be performed by Buyer pursuant to this Agreement.
(e) Closing Costs. Buyer and Seller shall each be responsible for its own
legal fees and the costs of its respective legal counsel. All documentary
stamps, transfer taxes, sales taxes and all other similar taxes, together with
the cost of the Survey shall be paid by Seller. The
Escrow fee payable to Escrow Agent in respect of the conveyance and transfer of
the Assets to Buyer shall be shared equally by the parties. All other fees,
recording costs, charges or expenses incidental to the sale, transfer and
assignment of the Assets to Buyer shall, except as otherwise herein expressly
provided, be paid according to the standard custom and practice pertaining to
real estate transactions consummated in Summit County, Ohio.
(f) Pre-Closing Settlement Statement. At least three (3) business days
prior to the Closing, Buyer and Seller shall provide to Escrow Agent as much
information as is then available to enable Escrow Agent to prepare a pre-audit
settlement statement setting forth in detail all prorations and adjustments
contemplated by this Agreement based on the information available to Escrow
Agent. Escrow Agent shall provide such pre-audit settlement statement to Buyer
and Seller and their respective legal counsel no later than two (2) business
days prior to the Closing and shall include therewith an indication of any
specific information remaining to be provided to Escrow Agent by Buyer and
Seller to enable Escrow Agent to show all final prorations and adjustments
calculated by Buyer and Seller, and required by this Agreement. Such statement
shall be approved by both Buyer and Seller in writing prior to Closing, such
approval to be indicated by the parties signatures thereon.
(g) Transfer of Guest Property in Safe Keeping.
(i) Baggage. All baggage or other property of guests of the Property
which has been checked with or left in the care of Seller and remains in
Seller's care on the Closing Date shall be inventoried and tagged jointly
by Seller and Buyer.
(ii) Safe Deposit Boxes. As of the Closing Date, Seller and Buyer
shall prepare a list of all guests of the Property maintaining items in
safe deposit boxes. Buyer shall not be liable or responsible for any items
contained in any safe deposit box not specified on such list or specified
on such list and not included in safe deposit boxes, and Seller agrees to
indemnify and hold harmless Buyer from and against any such liability or
responsibility.
10. APPORTIONMENTS.
(a) Closing Adjustments and Proration of Taxes, Rents, and Other Costs.
(i) Taxes. Real estate taxes, personal property taxes and any general
or special assessments in respect of the Assets shall be prorated as of the
Closing Date such that Seller shall be responsible for all taxes and
assessments that are allocable to any period prior to the Closing Date and
Buyer shall be responsible for all taxes and assessments that are allocable
to any period from and after the Closing Date. If the actual amount of
taxes, assessments or other amounts to be prorated for the year in which
the Closing occurs is not known as of the Closing Date, the proration shall
be based on the parties' reasonable estimates of such taxes, assessments
and other amounts. Notwithstanding any other provision of this Agreement to
the contrary, if Buyer shall become liable after the Closing for payment of
any taxes or assessments assessed against the Assets for any period of time
prior to the Closing Date, Seller shall immediately pay
to Buyer on demand an amount equal to such tax assessment in accordance
with subparagraph 10(c) below.
(ii) Deposits. At the Closing, Buyer shall be charged for all house
banks and all security or other deposits paid by Seller to third parties
for which the right to the return of any such sums is transferred to Buyer
at the Closing.
Inventory and Supplies.
[INTENTIONALLY OMITTED]
(iv) Other Items. The following additional prorations and adjustments
shall occur as of the Closing and, prior to the Closing Date, Seller shall
provide all information to Buyer required to calculate such prorations and
adjustments; representatives of Buyer and Seller shall together make such
calculations and provide Escrow Agent with the results of such prorations
and adjustments.
(A) All xxxxx cash and cash in cash registers and vending
machines as of 11:59 p.m. on the day preceding the Closing Date shall
remain the property of Seller, and if not paid to Seller at or before
the Closing shall be charged to Buyer.
(B) All receipts from guest room rentals and Hotel services prior
to the Closing Date shall belong to Seller. One half of the guest room
rentals and Hotel services, whether in cash or accounts receivable,
arising from occupancy for the entire night beginning on the day
preceding the Closing Date shall be credited to each of Buyer and
Seller. All receipts thereafter shall belong to Buyer. All prepaid
rentals, room rental deposits and all other deposits for advance
registration, banquets, or future services paid to Seller prior to the
Closing Date shall be credited to Buyer.
(C) All receipts and expenses from restaurant and bar operations
concluded prior to 11:59 p.m. on the day preceding the Closing Date
shall belong to, and be paid by, Seller.
(D) All accounts receivable and credit card claims for goods and
services furnished prior to 11:59 p.m. on the day preceding the
Closing Date shall remain the property of Seller and, to the extent
Buyer receives any payments on account thereof after Closing, Buyer
shall immediately remit such amount to Seller.
(E) All accounts payable owing for goods and services furnished
prior to 11:59 p.m. on the day preceding the Closing Date shall be
paid by Seller. Buyer shall assume, and after the Closing, pay, all
accounts payable relating to goods and services (including
advertising) for which orders have been placed, but as of 11:59 p.m.
on the day preceding the Closing Date, such goods and services have
not yet been delivered or provided so long as such goods and services
are of the type, quality and quantity used by Seller in the ordinary
course of operating the Hotel. Prior to the Closing, Seller shall
provide to Buyer a list of all accounts
payable for which the goods and services have not yet been delivered
or provided, and Buyer and Seller shall determine whether any such
accounts payable should remain the obligation of Seller, and for which
Buyer shall receive a credit at the Closing in the amount of all such
payables which do not relate to goods and services provided to Seller
in the ordinary course of operating the Hotel.
(v) Employee Wages and Benefits. All employee benefits, wages and
other compensation shall be the sole responsibility of Seller. Seller
shall make all such payments and/or post such bonds as are required by
law or necessary to ensure that all such liabilities will be
satisfied.
(vi) Remittance. Buyer and Seller each agree to promptly remit to
the other any monies received by such party which is due to the other
in accordance with this Agreement. All prorations shall be based on
the actual number of days in the calendar month in which the Closing
occurs.
(b) Utility and Maintenance Charges. Seller shall pay or cause to be paid
(i) all unpaid charges for water, electricity, gas, trash removal, sewer,
telephone or other utility services which are furnished to or in connection with
the Hotel prior to the Closing Date and (ii) all unpaid charges for landscaping
and all other maintenance services which are furnished to or in connection with
the Hotel prior to the Closing Date. Not less than three (3) days prior to
Closing, Seller and Buyer shall notify and instruct the suppliers of the
foregoing utility services to read the meters for such services as of the day
prior to the Closing Date and to render to Seller a final statement for all
charges for utility services furnished to the Property prior to the Closing
Date. If the final meter readings cannot be obtained, Buyer and Seller shall
prorate such charges based upon the particular utility company's billing for the
immediately preceding billing period determined on a per diem basis based on the
actual number of days in the billing period. Buyer shall receive a credit for
the allocated amount of such charges applicable to the period to and including
the day preceding the Closing Date and, following the Closing, Buyer shall be
responsible for, and shall pay, all xxxxxxxx received from the utility company
for the current and future billing periods.
(c) Adjustments to Prorations. After the Closing, the parties shall from
time to time, as soon as is practicable after accurate information becomes
available, recalculate and reapportion any of the items subject to proration or
apportionment under this Paragraph 10: (i) which were not prorated and
apportioned at the Closing because of the unavailability of the information
necessary to compute such proration, or (ii) which were prorated or apportioned
at the Closing based upon estimated or incomplete information, or (iii) for
which any errors or omissions in computing prorations at the Closing are
discovered subsequent thereto, and thereafter the proper party shall be
reimbursed based on the results of such recalculation and reapportionment.
Unless otherwise specified herein, all such reimbursements shall be made on or
before thirty (30) days after receipt of notice of the amount due. Any such
reimbursements not timely paid shall bear interest at a per annum rate equal to
ten percent (10%) from the due date until all such unpaid sums together with all
interest accrued thereon is paid if payment is not made within ten (10) days
after receipt of a xxxx therefor.
11. INDEMNIFICATION.
(a) Buyer shall indemnify, defend and hold harmless Seller, its officers,
directors, agents, employees, partners and/or shareholders for, from and against
any and all claims, liabilities, damages, losses, causes of action, and
obligations and expenses (including reasonable attorneys' fees) incurred as a
result of, or arising in connection with: (i) physical damage to the Assets or
personal injury arising out of any tests, inspections, and studies of the Assets
performed by Buyer, its agents, employees or contractors, or the entry of Buyer
or its agents, employees or contractors onto the Real Property for any reason
prior to the Closing Date; (ii) any acts or omissions of Buyer and its agents,
employees or contractors pertaining to the Hotel occurring or arising out of
events occurring on or after the Closing Date or any liability or obligation
required to be assumed by Buyer hereunder or which accrues on or after the
Closing Date; and (iii) any misrepresentation or breach of any warranty or
covenant made herein or in any document, certificate or exhibit given or
delivered pursuant hereto.
(b) Notwithstanding any other provisions of this Agreement, Buyer shall
indemnify, defend and hold harmless Seller, its directors, officers, employees,
partners and/or shareholders from and against any Claim asserted against,
resulting to, imposed upon or incurred by any such person, directly or
indirectly, by reason of or resulting from any claim brought by any employee of
Seller at the Hotel as of the date of closing of this transaction and/or any
unit of local government (as defined in 29 U.S.C. ss. 2101(a)(7)) alleging a
violation by Seller of the Worker Adjustment and Retraining Notification Act
(WARN) 29 U.S.C. xx.xx. 2101 et seq.
(c) Seller shall indemnify, defend, and hold harmless Buyer, its owners,
officers, directors, agents, employees, partners and/or shareholders for, from
and against any and all claims, liabilities, damages, losses, causes of action,
and obligations and expenses (including reasonable attorneys' fees) incurred as
a result of, or arising in connection with: (i) any acts or omissions of Seller
and its agents, employees and contractors pertaining to the Assets occurring or
arising out of events occurring prior to the Closing Date or any liability or
obligation of Seller which Buyer is not required to assume hereunder or which
accrues prior to the Closing, and (ii) any misrepresentation or breach of any
warranty or covenant made herein or in any document, certificate or exhibit
given or delivered pursuant hereto. The obligation set forth in this paragraph
shall survive the Closing and shall be a continuing obligation of Seller and its
successors and assigns.
12. POSSESSION. Seller shall deliver possession of the Assets to Buyer at the
Closing, subject to the Permitted Title Exceptions, provided, however, that
Seller shall afford authorized representatives of Buyer reasonable access to the
Hotel, subject to Paragraph 7 above, for the purposes of satisfying Buyer with
respect to the representations, warranties, and covenants of Seller contained
herein and with respect to satisfaction of any conditions precedent to the
Closing contained herein.
13. REPRESENTATIONS AND WARRANTIES.
(a) Buyer. Buyer acknowledges, covenants, represents and warrants to Seller
that the following are true as of the date of this Agreement and, in entering
into this Agreement, Seller is relying upon the following:
(i) Existence. Buyer is a validly existing corporation under the
law of the state of its formation and in good standing under the law
of the State of Delaware, and Buyer has the full right, authority and
power to enter into this Agreement, to consummate the transactions
contemplated herein and to perform its obligations hereunder and under
those documents and instruments to be executed by it at the Closing,
and each of the individuals executing this Agreement on behalf of
Buyer is authorized to do so, and this Agreement constitutes a valid
and legally binding obligation of Buyer enforceable against Buyer in
accordance with its terms.
(ii) Due Authorization. Buyer's execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby
and the performance of Buyer's obligations under the instruments
required to be delivered by Buyer at the Closing, do not and will not
result in any violation of, or default under, any term or provision of
any agreement, instrument, mortgage, loan agreement or similar
document to which Buyer is a party or by which Buyer is bound.
(iii) Threatened Proceedings. There is no litigation,
investigation or proceeding pending or, to the best of Buyer's
knowledge, contemplated or threatened against Buyer which would impair
or adversely affect Buyer's ability to perform its obligations under
this Agreement or any other instrument or document related hereto.
(b) Seller. Seller represents and warrants to Buyer that the following are
true as of the date of this Agreement, and in entering into this Agreement Buyer
is relying upon the following:
(i) Existence. Seller is a duly formed and validly existing
partnership under the law of the State of Ohio and is in good standing
under the law of the State of Ohio, and Seller has the full right,
authority and power to enter into this Agreement, to consummate the
transaction contemplated herein and to perform its obligations
hereunder and under those documents and instruments to be executed by
it at the Closing, and each of the individuals executing this
Agreement on behalf of Seller is authorized to do so, and this
Agreement constitutes a valid and legally binding obligation of Seller
enforceable against Seller in accordance with its terms.
(ii) Due Authorization. Seller's execution and delivery of this
Agreement, and the consummation of the transactions contemplated
hereby and the performance of Seller's obligations under the
instruments required to be delivered by Seller at the Closing, do not
and will not result in any violation of or default under, any term or
provision of any agreement, instrument, mortgage, loan agreement or
similar document to which Seller is a party or by which Seller is
bound.
(iii) Threatened Proceedings. Other than as set forth in Schedule
"G" hereto (the "Disclosure Statement"), there is no pending or, to
the best of Seller's knowledge, threatened judicial, municipal or
administrative proceedings affecting the Hotel or in which Seller is
or will be a party by reason of Seller's ownership of the Hotel or any
portion thereof, including, without limitation, proceedings for or
involving alleged building code violations, or personal injuries or
property damage alleged to have occurred on the Hotel or by reason of
the condition or use of the Hotel. The Disclosure Statement contains
an accurate summary of the status of all matters shown thereon. If any
proceeding of the character described in this subparagraph is
initiated prior to closing, Seller shall promptly advise Buyer in
writing.
(iv) Liabilities. That except for: (a) debts, liabilities and
obligations for which provision is made herein for proration or other
adjustments as of the Closing Date; (b) debts and obligations incurred
by Seller in the ordinary course of business which Seller agrees to
pay on or before the Closing Date except as provided herein; (c)
debts, liabilities and obligations to be assumed by Purchaser provided
for herein; (d) debts and obligations for goods which are purchased
prior to the Closing Date but remain the property of Purchaser
thereafter, there will be no debts, liabilities or obligations of
Seller with respect to the Hotels or the Property.
(v) Foreign Person. Seller is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Internal Revenue Code of 1954 as
amended.
(vi) Compliance With Laws. The Hotel properties are all in
material compliance with all Federal, State, Local (including local
sewage district) laws, rules, regulations ordinances, codes and orders
governing, establishing, limiting or otherwise affecting the discharge
or disposal of air pollutants, water pollutants, process wastewater or
solid and hazardous wastes. There are no pending or to Seller's
knowledge threatened actions or proceedings by the local municipality,
sewage districts, state agencies having jurisdiction over such
matters, the U.S. Environmental Protection Agency or any other
governmental entity and to Seller's knowledge there is no basis for
any such action or proceedings. Seller has never disposed of any
noxious, toxic, solid or hazardous waste on the Real Property.
Further, Seller warrants and represents, to the best of its knowledge,
that the Real Property has not been used as a landfill, dump site,
waste disposal area or for any similar usage, and no underground
storage tanks, petroleum products or solid hazardous or toxic
materials, as such terms are used and defined under applicable local,
state and federal environmental regulations, exist on the surface or
under the subsurface of the four properties or in any surface or
ground waters on or under the four properties.
(vii) Inventory Levels. As of the Closing Date, the inventory of
Operating Equipment and Operating Supplies will be in amounts which
are at least equal to the normal and customary levels of such
inventories historically maintained by the Hotel during the month in
which the Closing occurs, and all rooms will be consistently furnished
and equipped with items in good condition and repair (ordinary wear
and tear expected).
(viii) Known Latent Defects. That to the actual knowledge of the
managing partner of the Seller, there are no material latent defects
affecting the Hotel.
14. NOTICES. All notices or other communications required or provided to be sent
by either party or Escrow Agent shall be in writing and shall be sent by United
States Postal Service, postage prepaid or certified mail, return receipt
requested, or by any nationally known overnight delivery service, or by courier,
or in person (including by way of facsimile transmission). All notices shall be
deemed to have been given forty-eight (48) hours following deposit in the United
States Postal Service or upon personal delivery if sent by overnight delivery
service, courier or personally delivered. All notices shall be addressed to the
party at the address below:
If to Seller:
West Montrose Properties
c/o The Cornerstone Company
0000 Xxxxxxx Xxxxx
Xxxxx Xxxx 00000-0000
Attention: Xx. Xxxxxxx Xxxxxxxx, Xx. President
Fax No. (000) 000-0000
With a copy to:
Xxxxx & Xxxxx Co., LP.A.
1512 Ohio Edison Xxxx.
00 X. Xxxx Xxxxxx
Xxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Fax No. (000) 000-0000
If to Buyer:
Janus American Group, Inc.
0000 Xxxxxxxxx Xxxx., XX, Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Fax No.: (000) 000-0000
With a copy to:
Janus American Group, Inc.
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Fax No.: (000) 000-0000
Any address or name specified above may be changed by notice given to the
addressee by the other party in accordance with this Paragraph 14 The inability
to deliver because of a changed address of which no notice was given, or
rejection or other refusal to accept any notice, shall be deemed to be the
receipt of the notice as of the date of such inability to deliver or rejection
or refusal to accept. Any notice to be given by any party hereto may be given by
the counsel for such party. Any notice to be given to Escrow Agent shall be sent
to the address set forth in subparagraph 1(l) above.
15. SELLER'S REMEDIES. If Buyer shall breach any of the terms or provisions of
this Agreement or otherwise default hereunder after the Feasibility Expiration
Date, and as a result of such breach or default Buyer is unable to perform its
obligations at Closing and provided Seller has performed or tendered performance
of all its obligations hereunder, Seller's exclusive remedy shall be to retain
the Xxxxxxx Money as liquidated damages as provided in subparagraph 3(b) above.
Nothing contained in this paragraph shall limit or prevent Seller from enforcing
Buyer's obligations and liabilities which expressly survive a termination of
this Agreement.
16. BUYER'S REMEDIES. If Seller breaches any of the terms or provisions of this
Agreement or otherwise defaults hereunder, in addition to all other rights and
remedies available at law or in equity, Buyer may (i) terminate this Agreement
and the Escrow by written notice to Seller and Escrow Agent, whereupon the
Xxxxxxx Money shall be immediately returned to Buyer; (ii) waive such default
and consummate the transaction contemplated hereby in accordance with the terms
hereof; or (iii) specifically enforce this Agreement. Nothing contained in this
paragraph shall limit or prevent Buyer from enforcing Seller's obligations and
liabilities which survive a termination of this Agreement.
17. CASUALTY; CONDEMNATION. Seller shall notify Buyer immediately of the
occurrence of any damage to or destruction of the Hotel, or any portion thereof,
or the institution or maintenance of any condemnation or similar proceedings
with respect to the Real Property or any portion thereof. In the event of any
damage to or destruction of any portion of the Hotel for which the cost to
repair exceeds $250,000, or if any such condemnation or other proceedings are
instituted or maintained, Buyer at its option either (i) may terminate this
Agreement, in which case the Xxxxxxx Money shall be returned to Buyer and
neither party shall have any further rights or obligations hereunder except as
provided in Paragraphs 7 and 20 or (ii) may consummate the purchase evidenced by
this Agreement. In all other events or if Buyer elects to consummate the
purchase pursuant to clause (ii) above, Buyer shall receive a credit at Closing
in an amount equal to (A) all insurance or condemnation proceeds collected by
Seller prior to the Closing, plus (B) Seller's deductible or self-insurance
limit or such lesser amount as is equal to the estimated cost to repair or
reconstruct those portions of the Property damaged or destroyed, and all rights
to all other insurance or condemnation proceeds arising out of such damage or
destruction or proceedings and not collected prior to the Closing, including any
business interruption and rental loss proceeds for any period after the Closing,
shall be assigned by Seller to Buyer as of the Closing.
18. COMMISSIONS. Seller has committed to pay a business brokerage fee to Xxx X.
Xxxxxxxxxx of $19,900 for his services in connection with the transactions
represented by this
Agreement and the Affiliated Sales Agreements. Buyer warrants and represents to
Seller that no other real estate sales or brokerage commissions or like
commissions are or may be due in connection with this transaction as a result of
Buyer's acts. Seller shall be solely responsible for all commissions or like
fees owing in connection with this transaction as a result of its acts. Each
party agrees to indemnify, defend and hold harmless the other party from and
against any claims by third parties made by or through the acts of such party,
for real estate or brokerage commissions, or a finders fee, in connection with
the transaction provided for herein, and all costs and expenses incurred by the
indemnitee in connection therewith including, but not limited to, reasonable
attorneys' fees. The indemnity provided for in this paragraph shall survive the
Closing or any earlier termination of this Agreement.
19. DISCLAIMER. Other than as expressly set forth herein, Seller hereby
specifically disclaims any warranty, guaranty or representation, oral or
written, past, present or future, of, as to, or concerning (i) the nature and
condition of the Assets, including, without limitation, the water, soil and
geology or any other matter affecting the stability or integrity of the Real
Property or Improvements, and the suitability thereof and of the Assets for any
and all activities and uses which Buyer may elect to conduct thereon, and the
existence of any environmental hazards or conditions thereon (including the
presence of asbestos) or compliance with applicable Laws; (ii) the condition of
title to the Assets or the nature and extent of any right-of-way, lease,
possession, lien, encumbrance, license, reservation, condition or otherwise;
(iii) the compliance of the Assets or its operation with any covenants,
conditions, restrictions, or Laws; (iv) the profitability or losses or expenses
relating to the Assets and the businesses conducted in connection therewith; (v)
the existence, quality, nature, adequacy or physical condition of any utility
serving the Project; (vi) the zoning or other legal status of the Project; (vii)
the quality of any labor or materials relating in any way to the Assets; (viii)
the legal or tax consequences of this Agreement or its underlying transaction;
and (ix) the transferability of the Seller's rights under the Contracts. Buyer
acknowledges that prior to the Feasibility Expiration Date Seller will afford
Buyer the opportunity for full and complete investigations, examinations and
inspections of the Assets and all information to be delivered by Seller pursuant
to this Agreement and, other than as expressly set forth herein, Buyer is
relying solely on its own investigation and inspection of the Assets. Other than
as expressly set forth herein, or in subparagraph 14(b)(viii) hereof, the sale
of the Assets as provided for herein is made on an "AS IS" and "WHERE IS" basis,
and Buyer expressly acknowledges that, in consideration of the agreements of
Seller herein, other than as expressly set forth herein, Seller makes no
warranty or representation, express or implied, or arising by operation of law,
including, but not limited to, any warranty of condition, habitability,
merchantability, suitability or fitness for a particular use or purpose, in
respect of all or any of the Assets.
20. CONFIDENTIALITY AND RETURN OF DOCUMENTS. Buyer agrees that, until after the
Closing, all documentation or information delivered to Buyer or its
representatives or agents by Seller or Seller's representatives or agents
pertaining to the Assets shall be kept strictly confidential and will not be
used by Buyer or its representatives or agents, directly or indirectly, for any
purpose other than evaluating the Assets. Neither party shall release, or cause
or permit to be released any press notices, publicity (oral or written) or
advertising or otherwise announce or disclose, or cause or permit to be
announced or disclosed, in any manner whatsoever, except as
may be required by applicable law or regulation, the terms, conditions or
substance of the transaction contemplated herein without first obtaining the
express written consent of the other party hereto. It is understood that the
foregoing shall not, however, preclude Buyer from discussing the substance or
any relevant details of the transaction contemplated in this Agreement, nor
disclosing the terms of this Agreement, or the existence thereof, to Buyer's
accountants, attorneys and Consultants engaged in connection with this
transaction, or such other persons or entities to which disclosure is required
by Law. If the sale of the Assets contemplated herein is not consummated, each
party shall promptly return to the other party all information, documents, and
other items received from such other party in connection herewith. This
provision shall survive the Closing or any termination of this Agreement.
21. WAIVER. The exercise or waiver of the performance by a party of any
obligation of the other party under this Agreement shall only be effective if
evidenced by a written statement signed by the party so exercising. No delay in
exercising any right or remedy shall constitute a waiver thereof and no waiver
by Seller or Buyer of the breach of any covenant of this Agreement shall be
construed as a waiver of any preceding or succeeding breach of the same or any
other covenant or condition of this Agreement.
22. TIME PERIODS. If the time for performance of any obligation hereunder
expires on a Saturday, Sunday or legal holiday, the time for performance shall
be extended to the next day which is not a Saturday, Sunday or legal holiday.
23. SURVIVAL OF COVENANTS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES. All
covenants, agreements, representations and warranties set forth in this
Agreement shall survive the Closing and shall not merge into the deed or other
instrument executed or delivered in connection with the transaction contemplated
hereby. The representations and warranties of Seller contained in Paragraph
14.(b) and of Seller contained in Paragraph 14.(c) shall survive the Closing
until the date which is one (1) year following the Closing Date except for
matters disclosed or actually known to Buyer prior to the Closing.
24. MODIFICATION OF AGREEMENT. No modification of this Agreement shall be deemed
effective unless in writing and signed by the parties hereto.
25. FURTHER INSTRUMENTS. Each party, promptly upon the request of the other,
shall execute and have acknowledged and delivered to the other or to Escrow
Agent, as may be appropriate, any and all further instruments reasonably
requested or appropriate to evidence or give effect to the provisions of this
Agreement and which are consistent with the provisions hereof.
26. ENTIRE AGREEMENT. This Agreement constitutes the entire contract between the
parties with regards to the purchase and sale of the Assets. All terms and
conditions contained in any other writings previously executed by the parties
(including the letter of intent dated May 21, 1998) and all other discussions,
understandings or agreements regarding the Assets and the subject matter hereof
shall be deemed to be superseded hereby.
27. INUREMENT. This Agreement shall be binding upon and inure to the benefit of
the permitted successors and assigns, if any, of the respective parties hereto.
28. APPLICABLE LAW. This Agreement, and all questions and disputes arising in
connection with it, shall be governed by and construed in accordance with the
laws of the State of Ohio.
29. DESCRIPTIVE HEADINGS. The descriptive headings of the paragraphs of this
Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any provisions hereof.
30. TIME OF THE ESSENCE. Time is of the essence of this Agreement.
31. ASSIGNMENT. Other than to a Permitted Transferee, Buyer may not assign its
rights hereunder without the prior written consent of Seller, which consent may
be unreasonably withheld. No assignment proposed by Buyer, even if to a
Permitted Transferee, shall be valid and effective until the delivery to Seller
of written notice of such assignment together with an executed copy of the
documents pursuant to which such assignee assumes all of Buyer's covenants,
indemnities, obligations and agreements under this Agreement and agrees to be
bound by all of the terms, conditions and provisions hereof and thereof.
Notwithstanding any assignment to a Permitted Transferee, Buyer shall not be
released from all obligations and liabilities hereunder.
32. CONSTRUCTION. The parties agree that each party and its counsel have
reviewed and revised this Agreement and that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
apply in the interpretation of this Agreement or any amendments or exhibits
hereto.
33. INTERPRETATION. In this Agreement, the neuter gender includes the feminine
and masculine, and the singular number includes the plural, and the words
"person" and "party" include corporations, partnerships, individuals, firms,
trusts, or associations wherever the context so requires.
34. EXHIBITS AND SCHEDULES. All exhibits and schedules attached hereto and
referred to in this Agreement are incorporated herein by this reference and are
part of this Agreement.
35. COUNTERPARTS. This Agreement may be executed simultaneously or in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
36. RECORDATION. This Agreement shall not be recorded, but Buyer may record a
Memorandum of the Agreement upon obtaining Seller's prior written approval.
EXCLUSIVE NEGOTIATIONS. As an inducement to Buyer to investigate and analyze the
Assets, and to encourage Buyer to satisfy or waive the contingencies
[LEFT INTENTIONALLY BLANK]
referenced in Paragraph 6 above as soon as possible, Seller shall not, prior to
the Feasibility Expiration Date (and then only if Buyer fails to remove the
contingencies set forth in Paragraph 6.(a) or otherwise terminates this
Agreement), either seek or solicit any purchase offer or financing with respect
to the Assets, and Seller shall deal exclusively with Buyer toward consummating
the transaction contemplated by this Agreement in accordance with the terms and
conditions of this Agreement.
38. IRS REAL ESTATE SALES REPORTING. Buyer and Seller shall appoint Escrow Agent
as, and Escrow Agent shall agree to act as, "the person responsible for closing"
the transaction which is the subject of this Agreement pursuant to Internal
Revenue Code Section 6045(e). Buyer and Seller shall confirm such appointment in
the separate instructions given to Escrow Agent and shall instruct Escrow Agent
to prepare and file all informational returns, including without limitation, IRS
Form 1099-S and to otherwise comply with the provisions of Internal Revenue Code
Section 6045(e).
39. BULK SALES WAIVER. Seller waives any requirement of Buyer to comply with any
applicable notice requirements pertaining to bulk sales or other similar laws.
Seller shall indemnify, defend and hold Buyer harmless for, from and against any
liability resulting from such waiver.
SELLER: BUYER:
WEST MONTROSE PROPERTIES, JANUS AMERICAN GROUP, INC.
an Ohio limited partnership
By The Cornerstone Company, Developers
and Operators of Inns, Hotels and Resorts, Its
General Partner
By: By:
Name: Xxxxxxx Xxxxxxxx, Xx. Name: Xxxxx X. Xxxxxx
Its: President Its: President
SCHEDULE "A"
Affiliated Sales Agreements
1. Purchase and Sale Agreement dated July 31, 1998 between North Canton
Operating Corp., Canton North Properties and Janus American Group, Inc.
2. Purchase and Sale Agreement dated July 31, 1998 between Rockside Road
Operating Corp., Rockside Road Properties and Janus American Group, Inc.
3. Purchase and Sale Agreement dated July 31, 1998 between Galburton Inn, Inc.
and Janus American Group, Inc.
SCHEDULE "B"
Contracts
SCHEDULE "C"
Franchise Agreement
Quality Inns International, Inc. Franchise Agreement dated January 17,
1989, between Quality Inns, Inc., a Delaware corporation and Motel Management,
Inc., an Ohio corporation.
SCHEDULE "D"
Personalty
[See Attached]
SCHEDULE "E"
Real Property Description
[See Attached]
SCHEDULE "F"
Allocation of Purchase Price
$ 500,000 - Land
$2,500,000 - Building
$ 400,000 - Chattels
$3,400,000 - Total Purchase Price
SCHEDULE "G"
Disclosure Statement
EXHIBIT "A"
Consulting Agreement
[See Attached]
EXHIBIT "B"
Limited Warranty Deed
[See Attached]
EXHIBIT "C"
Affidavit of Non-Foreign Person
[See Attached]
EXHIBIT "D"
Assignment and Assumption of Contracts
[See Attached]
EXHIBIT "E"
Assignment of Intangible Property
[See Attached]
EXHIBIT "F"
Xxxx of Sale
[See Attached]
EXHIBIT "G"
Assignment and Assumption of
Franchise Agreement
[Not Required]
