Exhibit 10.20
PURCHASE AGREEMENT
dated as of March ____, 1997
between
544 Associates
a Pennsylvania limited partnership
as Seller,
and
Xxxxxxxx Hospitality Limited Partnership,
a Virginia limited partnership
as Purchaser
Comfort Inn Hotel,
Chambersburg, Pennsylvania
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of March _____, 1997, between 544
Associates, a Pennsylvania limited partnership (the Seller), and Xxxxxxxx
Hospitality Limited Partnership, a Virginia limited partnership (the Purchaser),
provides:
ARTICLE 1
DEFINITIONS; RULES OF CONSTRUCTION
1.1 Definitions. The following terms shall have the indicated meanings:
"Act of Bankruptcy" shall mean if a party hereto or any principal
thereof shall (a) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property, (b) admit in writing its inability to pay
its debts as they become due, (c) make a general assignment for the benefit of
its creditors, (d) file a voluntary petition or commence a voluntary case or
proceeding under the Federal Bankruptcy Code (as now or hereafter in effect),
(e) be adjudicated a bankrupt or insolvent, (f) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, (g) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case or proceeding under the Federal Bankruptcy
Code (as now or hereafter in effect), or (h) take any action for the purpose of
effecting any of the foregoing; or if a proceeding or case shall be commenced,
without the application or consent of a party hereto or any principal thereof,
in any court of competent jurisdiction seeking (a) the liquidation,
reorganization, dissolution or winding-up, or the composition or readjustment of
debts, of such party or principal, (b) the appointment of a receiver, custodian,
trustee or liquidator or such party or principal of all or any substantial part
of its assets, or (c) other similar relief under any law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts,
and such proceeding or case shall continue undismissed, or an order (including
an order for relief entered in an involuntary case under the Federal Bankruptcy
Code, as now or hereafter in effect) judgment or decree approving or ordering
any of the foregoing shall be entered and continue unstayed and in effect, for a
period of 60 consecutive days.
"Assignment and Assumption Agreement" shall mean that certain
assignment and assumption agreement whereby Seller (a) assigns and the Purchaser
assumes the Operating Agreements that have not been canceled at Purchaser's
request and (b) assigns all of the Seller's right, title and interest in and to
the Intangible Personal Property, to the extent assignable.
"Authorizations" shall mean all licenses, permits and
approvals required by any governmental or quasi-governmental agency, body or
officer for the ownership, operation and use of the Property or any part
thereof.
"Xxxx of Sale - Personal Property" shall mean that certain
xxxx of sale conveying title to the Tangible Personal Property or, with respect
to, Intangible Personal Property [and the Reservation System] from the Seller to
the Purchaser's property manager, lessee or designee.
"Closing" shall mean the closing of the purchase and sale of
the Property.
"Closing Date" shall mean the date on which the Closing
occurs.
"Deed" shall mean that certain deed conveying title to the
Real Property with general warranty covenants of title from the Seller to the
Purchaser, subject only to Permitted Title Exceptions. If there is any
difference between the description of the Land, as shown on Exhibit A attached
hereto and the description of the Land as shown on the Survey, the description
of the Land to be contained in the Deed and the description of the Land set
forth in the Title Commitment shall conform to the description shown on the
Survey.
"Deposit" shall mean all amounts deposited from time to time
with the Escrow Agent by the Purchaser pursuant to Sections 2.2 and 6.1, plus
all interest accrued thereon. The Deposit shall be held by the Escrow Agent in
an interest-bearing account of a federally-insured bank or banks, and shall be
held and disbursed by the Escrow Agent in strict accordance with the terms and
provisions of this Agreement.
"Escrow Agent" shall mean Xxxxxxxxx, Xxxxxxx & Xxxxx.
"Governmental Body" means any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
"Guest Ledger" shall mean that certain guest ledger dated as
of ____________________, 199__, certified by the Seller, a copy of which is
attached hereto as Exhibit C. The Guest Ledger shall be updated and recertified
as of the Closing Date.
"Hotel" shall mean the 65-room hotel and related amenities
located on the Land.
"Improvements" shall mean the Hotel and all other buildings,
improvements, fixtures and other items of real estate located on the Land.
"Income Tax Certificate" shall mean the affidavit of the
Seller certifying (i) that the Seller is not a foreign corporation, foreign
partnership, foreign trust, foreign estate or foreign person (as those terms are
defined in the Internal Revenue Code and the Income Tax Regulations) under
Section 1445 of the Internal Revenue Code, (ii) the information to complete IRS
Form 1099S, and (iii) the information to complete any required state income or
recordation tax reporting requirement, prepared by counsel to the Purchaser and
in form and substance reasonably acceptable to the Purchaser.
"Intangible Personal Property" shall mean all intangible
personal property owned or possessed by the Seller and used in connection with
the ownership, operation, leasing, occupancy or maintenance of the Property,
including, without limitation, the right to use any trade name associated with
the Real Property and all variations thereof, all of the Leases and any future
leases of space in the Property, all Operating Agreements, Authorizations,
escrow accounts, insurance policies, general intangibles, business records,
plans and specifications, surveys and title insurance polices pertaining to the
Real Property, the Tangible Personal Property and intangible personal property,
all licenses, permits and approvals with respect to the construction, ownership,
operation, leasing, occupancy or maintenance of the Property and any unpaid
award for taking by condemnation or any damage to the Land by reason of a change
of grade or location of or access to any street or highway, and the share of the
Tray Ledger determined under Section 6.5, but excluding (i) any of the aforesaid
rights the Purchaser elects not to acquire and (ii) the Seller's cash on hand,
in bank accounts and invested with financial institutions, and (iii) the
accounts receivable except for the above described share of the Tray Ledger.
"Inventory" shall mean all "inventories of merchandise" and
"inventories of supplies", as such terms are defined in the Uniform System of
Accounts for Hotels [8th Revised Edition, 1986] as published by the Hotel
Association of New York City, Inc., as revised, and similar consumable supplies.
"Land" shall mean that certain parcel of real estate lying
and being in Franklin County, Pennsylvania, as more particularly described in
Exhibit A attached hereto, together with all easements, rights, privileges,
remainders, reversions and appurtenances thereunto belonging or in any way
appertaining, and all of the estate, right, title, interest, claim or demand
whatsoever of the Seller therein, in the streets and ways adjacent thereto and
in the beds thereof, either at law or in equity, in possession or expectancy,
now or hereafter acquired.
"Leases" shall mean all of the leases, if any, now in effect
with respect to the Property or any portion thereof, under which the Seller is
either a landlord or tenant, and all addenda, modifications or amendments
thereto, certified true copies of which have been delivered by the Seller to the
Purchaser.
"Operating Agreements" shall mean the management agreements,
service contracts and other agreements, if any, in effect with respect to the
construction, ownership, operation, leasing, occupancy or maintenance of the
Property. All of the Operating Agreements in force and effect as of the date
hereof are listed on Exhibit B attached hereto.
"Owner's Title Policy" shall mean an owner's policy of title
insurance (ALTA Form B-1970) issued to the Purchaser by the Title Company,
pursuant to which the Title Company insures the Purchaser's ownership of fee
simple title to the Real Property (including the marketability thereof), subject
only to Permitted Title Exceptions (which shall exclude all preprinted,
standard, general or similar exceptions), and which provides such affirmative
coverages and endorsements reasonably requested by the Purchaser. The Owner's
Title Policy shall insure the Purchaser in the amount of the Purchase Price and
shall be acceptable in form and substance to the Purchaser. The description of
the Land in the Owner's Title Policy shall be by courses and distances and shall
be identical to the description shown on the Survey.
"Permitted Title Exceptions" shall mean those exceptions to
title to the Real Property set forth in the Title Commitment (a) which do not
require or secure the payment of money and (b) to which Purchaser makes no
objection under Section 2.3(d).
"Property" shall mean collectively the Real Property, the
Inventory, the Tangible Personal Property and the Intangible Personal Property.
"Purchase Price" shall mean Two Million Six Hundred Thousand
Dollars ($2,600,000).
"Real Property" shall mean the Land and the Improvements.
"Reservation System" shall mean the Seller's Reservation
Terminal and Reservation System, Equipment and Software, if any.
"Seller's Financial Information" shall mean that certain
financial information relative to the Seller and the Property, including audited
income and expense statements for the Property for the immediately preceding
three years, copies of which are attached hereto as Exhibit D.
"Study Period" shall mean the period commencing at 9:00 a.m.
on the date Seller certifies that it has delivered its current title policy or
marked-up binder, its current Survey and all environmental studies it has
performed on the Property, and continuing through 5:00 p.m. on the date that is
thirty (30) days from such date. The time periods herein referred to shall mean
the time periods as in effect, from time to time, at the place where the Real
Property is located.
"Survey" shall mean the survey to be delivered pursuant to
Section 5.4.
"Tangible Personal Property" shall mean the Inventory and all
other items of personal property owned by the Seller, used in connection with
the Property, including, without limitation, those items listed on Exhibit E
hereto.
"Title Commitment" shall mean the commitment by the Title
Company to issue the Owner's Title Policy.
"Title Company" shall mean a title insurance company selected
by the Purchaser.
"Tray Ledger" shall mean the final night's room revenue
(revenue from rooms occupied as of 12:01 a.m. on the Closing Date, exclusive of
food, beverage, telephone and similar charges which accrue prior to Closing),
including any sales taxes, room taxes or other taxes thereon.
"Utilities" shall mean public sanitary and storm sewers,
natural gas, telephone, public water facilities, electrical facilities, cable
television facilities and all other utility facilities and services necessary
for the operation and occupancy of the Property.
1.2 Rules of Construction. The following rules shall apply to the
construction and interpretation of this Agreement:
(a) Singular words shall connote the plural number as well as
the singular and vice versa, and the masculine shall include the feminine and
the neuter.
(b) All references herein to particular articles, sections or
subsections, subsections or clauses are references to articles, sections,
subsections or clauses of this Agreement.
(c) The headings contained herein are solely for convenience
of reference and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.
(d) Each party hereto and its counsel have reviewed and
revised (or requested revisions of) this Agreement, and therefore any usual
rules of construction requiring that ambiguities are to be resolved against a
particular party shall not be applicable in the construction and interpretation
of this Agreement or any exhibits hereto or amendments hereof.
ARTICLE 2
PURCHASE AND SALE; ACCESS; STUDY PERIOD;
PAYMENT OF PURCHASE PRICE
2.1 Purchase and Sale. The Seller agrees to sell and the Purchaser
agrees to acquire the Property for the Purchase Price and in accordance with the
other terms and conditions set forth herein.
2.2 Deposit. Simultaneously with the execution hereof, the Purchaser has
made an initial deposit of $25,000, by check, with the Escrow Agent and pursuant
to Section 6.1, the Purchaser may make additional payments to extend the Closing
Date (all such payments and interest accrued thereon referred to as the
"Deposit"). The Escrow Agent shall clear said check(s) and shall hold the
Deposit in an interest bearing account pursuant to the terms, considerations and
provisions of this Agreement. The initial Deposit shall be returned to Purchaser
if it fails, prior to the end of the Study Period, to notify the Seller in
writing, pursuant to Section 2.3, that the Purchaser elects to proceed to
Closing. The Deposit shall be (a) applied at the Closing against the Purchase
Price, (b) returned to the Purchaser pursuant to Section 8.3 or Section 2.3(a),
or (c) paid to the Seller pursuant to Section 8.4.
2.3 Study Period. (a) The Purchaser shall have the right, until 5:00
p.m. on the last day of the Study Period, and thereafter if the Purchaser
notifies the Seller that the Purchaser has elected to proceed to Closing in the
manner described below, to enter upon the Real Property and to perform, at the
Purchaser's expense, such economic, surveying, engineering, topographic,
environmental and marketing tests, studies and investigations as the Purchaser
may deem appropriate; including review by Purchaser's Board of Directors. If
after such tests, studies and investigations as Purchaser determines to make,
Purchaser decides to proceed with the purchase of the Property for the purposes
contemplated by the Purchaser, then the Purchaser may elect to proceed to
Closing and shall so notify the Seller and the Escrow Agent, in writing, prior
to the expiration of the Study Period. If for any reason, in the Purchaser's
sole, absolute and unreviewable discretion, the Purchaser does not so notify the
Seller and the Escrow Agent of its determination to proceed to Closing prior to
the expiration of the Study Period, or notifies the Seller and the Escrow Agent,
in writing, prior to the expiration of the Study Period that it has determined
not to proceed to Closing, this Agreement automatically shall terminate, the
Deposit shall be returned to the Purchaser and upon the return of the Deposit,
the Purchaser and the Escrow Agent shall be released form any further liability
or obligation under this Agreement.
(b) During the Study Period, the Seller shall make available
to the Purchaser, its agents, auditors, engineers, attorneys and other
designees, for inspection and/or copying, copies of all existing architectural
and engineering studies, surveys, title insurance policies, zoning and site plan
materials, correspondence, environmental audits and reviews, books, records, tax
returns, bank statements, financial statements, advance reservations and room
bookings and function bookings, rate schedules and any and all other materials
or information relating to the Property which are in, or come into, the Seller's
possession or control.
(c) The Purchaser shall indemnify and defend the Seller
against any loss, damage or claim arising from entry upon the Real Property by
the Purchaser or any agents, contractors or employees of the Purchaser. The
Purchaser, at its own expense, shall restore any damage to the Property caused
by any of the tests or studies made by the Purchaser.
(d) The Seller agrees to provide to the Purchaser, within
five business days following the date of this Agreement, a copy of any existing
title insurance policies or marked-up title binders which the Seller may have in
its possession or control covering the Real Property, together with legible
copies of all exception documents referred to therein. During the Study Period,
the Purchaser, at its expense, shall obtain a Title Commitment, and prior to the
expiration of the Study Period, shall notify the Seller of any defects in title
shown by such Title Commitment that the Purchaser is unwilling to accept. Within
ten days after such notification, which ten day period may extend beyond the
Study Period (the "Title Response Period"), the Seller shall notify the
Purchaser whether the Seller is willing to cure such defects. If the Purchaser
agrees to proceed to Closing prior to the end of the Study Period but before the
Seller responds to title issues during the Title Response Period, the Purchaser
shall not have waived any of its rights with regard to title issues as set forth
herein. If the Seller is willing to cure such defects, the Seller shall act
promptly and diligently to cure such defects at its expense. If the Seller is
unable to cure such defects by Closing, after having attempted to do so
diligently and in good faith, the Purchaser may elect (1) to waive such defects
and proceed to Closing without any abatement in the Purchase Price or (2) to
terminate this Agreement and receive a full refund of the Deposit; provided,
however, that if such defects consist of mortgages, deeds of trust, construction
or mechanics' liens, tax liens or other liens or charges in a fixed sum or
capable of computation as a fixed sum, then, to that extent, and notwithstanding
the foregoing, the Seller shall be obligated to pay and discharge and the title
agent or company conducting the Closing is authorized to pay and discharge such
defects from Seller's proceeds at Closing. The Seller shall not, after the date
of this Agreement, subject the Property to any liens, encumbrances, covenants,
conditions, restrictions, easements or other title matters or seek any zoning
changes or take any other action which may affect or modify the status of title
or the use of the Property without the Purchaser's prior written consent. All
title matters revealed by the Purchaser's title examination and not objected to
by the Purchaser as provided above shall be deemed Permitted Title Exceptions.
Notwithstanding the foregoing, the Purchaser shall not be required to take title
to the Property subject to any matters which may arise subsequent to the
effective date of its examination of title to the Property made during the Study
Period.
2.4 Inspection of Books and Records; Access. The Purchaser, from the
date hereof until termination of this Agreement, shall have complete and free
access during normal business hours to all documents, agreements and other
information in the possession of the Seller and its agents pertaining to the
ownership, use, rental and operation of the Property and to the Seller's
representations, warranties and covenants set forth herein, including but not
limited to financial records, tax assessments, bills and leases, and the
Purchaser shall have the right to inspect and make copies of the same. The
Seller hereby grants to the Purchaser and its officers, agents, servants,
employees, assigns and independent contractors a license to enter upon the
Property and the full right of access to the Real Property for the purposes of
inspecting the condition or status of the Property and the books and records
maintained by the Seller or its agents with respect to the Property, undertaking
any tests and inspections desired by Purchaser hereunder and verifying the
Seller's representations, warranties and covenants set forth herein.
Notwithstanding the foregoing, if the Purchaser desires to enter the premises or
contact any agent of the Seller, the Purchaser shall give twenty-four (24) hours
oral or written notice to Xxxx X. Xxxx or X.X. Xxxxx so that either may make
arrangements for Seller's or Seller's agent to escort the Purchaser or
Purchaser's agent onto the Property or to the place where requested records or
documents are held. All inspections of records shall be done off-site at a
mutually agreeable location.
2.5 Payment of Purchase Price. The Purchase Price shall be paid
to the Seller in the following manner:
(a) At Closing, the Deposit shall be paid to the Seller. The
Purchaser shall receive a credit against the Purchase Price in an amount equal
to the Deposit paid to Seller.
(b) The Purchaser shall pay the balance of the Purchase Price
(after application of the Deposit), as adjusted in the manner specified in
Article VI and as set forth below, to the Seller or other applicable party at
Closing by making a wire transfer of immediately available federal funds to the
account of the Seller or other applicable party as specified in writing by the
Seller.
2.6 Allocation of Purchase Price. The parties agree that the Purchase
Price shall be allocated among the various components of the Property in the
manner indicated by the Purchaser at Closing.
2.7 Confidentiality. Except as hereinafter provided, from and after the
execution of this Agreement, the Purchaser and the Seller shall keep the terms,
conditions and provisions of this Agreement confidential and neither shall make
any public announcements hereof unless the other first approves of same in
writing, nor shall either disclose the terms, conditions and provisions hereof,
except to persons who "need to know", such as their respective attorneys,
accountants, engineers, surveyors, financiers and bankers. Notwithstanding the
foregoing, it is acknowledged that the general partner of the Purchaser has
elected to be a real estate investment trust ("REIT") and that the REIT has sold
shares and may seek to sell additional shares to the general public and that in
connection therewith, the Purchaser will have the absolute and unbridled right
to market such securities and prepare and file all necessary or reasonably
required registration statements, disclosure statements, and other papers,
documents and instruments necessary or reasonably required in the Purchaser's
judgment and that of its attorneys and underwriters with respect to the REIT's
shares with the U.S. Securities and Exchange Commission and/or similar state
authorities and to cause same to become effective and to disclose therein and
thus to its underwriters, to the U.S. Securities and Exchange Commission and/or
to similar state authorities and to the public all of the terms, conditions and
provisions of this Agreement.
ARTICLE 3
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
To induce the Purchaser to enter into this Agreement and to purchase the
Property, and to pay the Purchase Price therefor, the Seller hereby makes the
following representations, warranties and covenants with respect to the
Property, upon each of which the Seller acknowledges and agrees that the
Purchaser is entitled to rely and has relied:
3.1 Organization and Power. The Seller is an entity duly formed and
validly existing and in good standing under the laws of the State of its
organization and has all requisite powers and all governmental licenses,
authorizations, consents and approvals to carry on its business as now conducted
and to enter into and perform its obligations hereunder and under any document
or instrument required to be executed and delivered on behalf of the Seller
hereunder.
3.2 Authorization and Execution. This Agreement has been duly authorized
by all necessary action on the part of the Seller, has been duly executed and
delivered by the Seller, constitutes the valid and binding agreement of the
Seller and is enforceable in accordance with its terms.
3.3 Noncontravention. The execution and delivery of, and the performance
by the Seller of its obligations under this Agreement do not and will not
contravene, or constitute a default under, any provision of applicable law or
regulation, the Seller's organizational documents or any agreement, judgment,
injunction, order, decree or other instrument binding upon the Seller, or result
in the creation of any lien or other encumbrance on any asset of the Seller.
There are no outstanding agreements (written or oral) pursuant to which the
Seller (or any predecessor to or representative of the Seller) has agreed to
sell or has granted an option to purchase the Property (or any part thereof).
3.4 No Special Taxes. The Seller has no knowledge of, nor has it
received any notice of, any special taxes or assessments relating to the
Property or any part thereof or any planned public improvements that may result
in a special tax or assessment against the Property.
3.5 Compliance with Existing Laws. The Seller possesses all
Authorizations, each of which is valid and in full force and effect, and no
provision, condition or limitation of any of the Authorizations has been
breached or violated. The Seller has not represented or failed to disclose any
relevant fact in obtaining all Authorizations, and the Seller has no knowledge
of any change in the circumstances under which those Authorizations were
obtained that could result in their termination, suspension, modification or
limitation. The current use and occupancy of the Property as a hotel are
permitted as a principal use under all laws applicable thereto without the
necessity of resort to any grandfathered or nonconforming use status, or any
special use permit, special exception or other special permit, permission or
consent. The Seller has no knowledge, nor has it received notice within the past
three years, of any existing or threatened violation of any provision of any
applicable building, zoning, subdivision, environmental or other governmental
ordinance, resolution, statute, rule, order or regulation, including but not
limited to those of environmental agencies or insurance boards of underwriters,
with respect to the ownership, operation, use, maintenance or condition of the
Property or any part thereof, or requiring any repairs or alterations other than
those that have been made prior to the date hereof.
3.6 Personal Property. All of the Tangible Personal Property and
Intangible Personal Property are owned and will be conveyed by the Seller free
and clear of all liens and encumbrances. The Seller has good, merchantable title
thereto and the right to convey same in accordance with the terms of this
Agreement.
3.7 Title and Survey Matters. The Seller is the sole owner of full
legal, equitable and beneficial title to the Property and no consent of or
joinder by any other person is required for the Seller to convey the full legal,
equitable and beneficial title to and ownership of the Property to the Purchaser
in accordance with this Agreement. Except to the extent such obligations may be
inconsistent herewith, the Seller shall perform all of its obligations under all
documents affecting title to all or any part of the Property and shall not
permit or allow to continue any defaults thereunder. The Seller shall not, after
the date of this Agreement, subject the Property to any liens, encumbrances,
covenants, conditions, restrictions, easements or other title matters or seek
any zoning or other land use changes or take any other action which may affect
or modify the status of title to or the permitted uses of the Property without
the Purchaser's prior express written consent.
3.8 Status of Leases. Each of the Leases is valid and in full force and
effect, has not been further modified or amended and is assignable to Purchaser
without the consent of the other party thereto. There are no defaults under any
of the Leases by the Seller or, to the best of the Seller's knowledge, by the
other party thereunder, and no fact or circumstance has occurred that, by itself
or with the giving of notice or the passage of time or both, would constitute
such a default by the Seller or, to the best of the Seller's knowledge, by the
other party thereunder. The Seller has the sole right to collect the rent under
the Leases and neither such right nor any of the Leases has been assigned,
pledged, hypothecated or otherwise encumbered. From the date hereof through and
including the date of Closing, the Seller shall not modify any of the Leases in
any material manner. The Seller shall perform all of its obligations under the
Leases from the date hereof through and including the date of Closing.
3.9 Operating Agreements. Each of the Operating Agreements may be
terminated by the Seller or the Purchaser upon not more than 30 days' prior
written notice and without the payment of any penalty, fee, premium or other
amount. The Seller has performed all of its obligations under each of the
Operating Agreements and no fact or circumstance has occurred which, by itself
or with the passage of time or the giving of notice or both, would constitute a
default under any of the Operating Agreements. The Seller shall not enter into
any new management agreement, maintenance or repair contract, supply contract,
lease (as lessor or lessee) or other agreements with respect to the Property,
nor shall the Seller enter into any agreements modifying the Operating
Agreements, unless (a) any such agreement or modification will not bind the
Purchaser or the Property after the Closing Date or (b) the Seller has obtained
the express prior written consent of the Purchaser to such agreement or
modification. The Seller agrees to cancel and terminate all of the Operating
Agreements as of Closing unless the Purchaser requests in writing prior to
Closing that one or more remain in effect after Closing.
3.10 Warranties and Guaranties. The Seller shall not before or after
Closing, release or modify any warranties or guarantees, if any, of
manufacturers, suppliers and installers relating to the Improvements and the
Tangible Personal Property and Intangible Personal Property or any part thereof,
except with the prior written consent of the Purchaser.
3.11 Insurance. All of the Seller's insurance policies are valid and in
full force and effect, all premiums for such policies were paid when due and all
future premiums for such policies (and any replacements thereof) shall be paid
by the Seller on or before the due date therefor. The Seller shall pay all
premiums on, and shall not cancel or voluntarily allow to expire, any of the
Seller's insurance policies unless such policy is replaced, without any lapse of
coverage, by another policy or policies providing coverage at least as extensive
as the policy or policies being replaced. The Seller shall name the Purchaser as
an additional insured on each of the Seller's insurance policies. The Seller
agrees to transfer any such policies as of the Closing Date upon the written
request of the Purchaser and the premiums on any of such policies that the
Purchaser elects to have assigned to it shall be allocated between the Seller
and the Purchaser as of the Closing Date.
3.12 Condemnation Proceedings; Roadways. The Seller has not received
notice of any condemnation or eminent domain proceeding pending or threatened
against the Property or any part thereof. The Seller has no knowledge of any
change or proposed change in the route, grade or width of, or otherwise
affecting, any street or road adjacent to or serving the Real Property.
3.13 Litigation. There is no action, suit or proceeding pending or known
to be threatened against or affecting the Seller or any principal, subsidiary or
affiliate of the Seller in any court, before any arbitrator or before or by any
Governmental Body which (a) in any manner raises any question affecting the
validity or enforceability of this Agreement or any other agreement or
instrument to which the Seller is a party or by which it is bound and that is or
is to be used in connection with, or is contemplated by, this Agreement, (b)
could materially and adversely affect the business, financial position or
results of operations of the Seller or any principal, subsidiary or affiliate of
the Seller, (c) could adversely affect the ability of the Seller to perform its
obligations hereunder, or under any document to be delivered pursuant hereto,
(d) could create a lien on the Property, any part thereof or any interest
therein, (e) the subject matter of which concerns any past or present employee
of the Seller or its managing agent or (f) could otherwise adversely affect the
Property, any part thereof or any interest therein or the use, operation,
condition or occupancy thereof.
3.14 Labor and Employment Agreements. There are no labor disputes
pending or, to the best of the Seller's knowledge, threatened as to the
operation or maintenance of the Property or any part thereof. The Seller is not
a party to any union or other collective bargaining agreement with employees
employed in connection with the ownership, operation or maintenance of the
Property. The Seller is not a party to any employment contracts or agreements,
written or oral, with any persons employed with respect to the Property that
will be binding on the Purchaser on or after the Closing. Neither the Seller nor
its managing agent (if any) will, between the date hereof and the Closing Date,
enter into any new employment contracts or agreements or hire any new employees
that will be binding on the Purchaser on or after the Closing. The Purchaser
will not be obligated to give or pay any amount to any employee of the Seller or
the Seller's managing agent. The Purchaser shall not have any liability under
any pension or profit sharing plan that the Seller or its managing agent may
have established with respect to the Property or their or its employees.
3.15 Financial Information. All of the Seller's Financial Information is
correct and complete in all respects and presents accurately the results of the
operations of the Property for the three years immediately prior to the Closing.
Since the date of the last financial statement included in the Seller's
Financial Information, there has been no material adverse change in the
financial condition or in the operations of the Property. The Seller will
provide access by Purchaser's representatives, to all financial and other
information relating to the Property, and such representatives shall determine
that such information is sufficient to enable them to prepare audited financial
statements in conformity with Regulation S-X of the Securities and Exchange
Commission and any registration statement, report or disclosure statement filed
with and any rule issued by, the Securities and Exchange Commission. The Seller
will provide a signed representation letter as prescribed by Generally Accepted
Auditing Standards as promulgated by the Auditing Standards Division of the
American Institute of Public Accountants which representation is required to
enable an independent public accountant to render an opinion on such financial
statements.
3.16 Organizational Documents. The Seller's Organizational Documents are
in full force and effect and have not been modified or supplemented, and no fact
or circumstance has occurred that, by itself or with the giving of notice or the
passage of time or both, would constitute a default thereunder.
3.17 Excluded Liabilities.
(i) The Purchaser is not assuming or undertaking to assume
and shall have no responsibility for any expenses, debts, obligations,
liabilities, claims, demands, fines or penalties, whether fixed or contingent,
past, present or future, or direct or indirect, arising out of or in connection
with the conduct by the Seller of its business or the ownership and use of the
Property prior to the Closing (the "Excluded Liabilities"), including without
limitation, any of the Excluded Liabilities arising out of or in connection with
the failure by the Seller to comply with any applicable Environmental Laws
including, without limitation any Environmental Laws regarding pollution
control, underground storage tanks, asbestos or other environmental matters
applicable to the Property.
(ii) The Seller agrees to defend, indemnify and hold harmless
the Purchaser from and against any of the Excluded Liabilities and any other
damages, losses, costs, expenses, claims or demands (including fines, penalties,
diminution in value of the Property, court costs and reasonable attorneys' fees)
that may be incurred by or imposed on the Purchaser as a result of (i) the
conduct by the Seller of its business in connection with the Property prior to
the Closing and (ii) any material breach by the Seller of any representation or
warranty of the Seller contained herein applicable to the Property.
3.18 Historical Districts. Neither the Property, nor any portion
thereof, is (a) listed, or eligible to be listed, in any national, state or
local register of historic places or areas, or (b) located within any designated
district or area in which the permitted uses of land located therein are
restricted by regulations, rules or laws other than those specified under local
zoning ordinances.
3.19 Brokerage Commission. The Seller has not engaged the services of,
nor is it or will it become liable to, any real estate agent, broker, finder or
any other person or entity for any brokerage or finder's fee, commission or
other amount with respect to the transactions described herein except for a real
estate commission to Mid-South Hotel Brokers, the payment of which shall be the
sole responsibility of Seller.
3.20 Environmental.
(i) To the best of our knowledge, based on reasonable
inspections of the Property by us and others, the Seller, and any person or
entity for whose conduct the Seller is liable, has no liability under, has never
materially violated, and is presently in material compliance with, all federal,
state and local environmental or health and safety-related laws, rules,
regulations and ordinances (together, Environmental Laws) applicable to the
Property.
(ii) To the best of our knowledge, based on reasonable
inspections of the Property by us and others, there exist no environmental
conditions with respect to the Property that could or do result in any damage,
loss, cost, expense or liability to or against the Seller or the Purchaser.
(iii) Other than those hazardous or toxic substances commonly
used in the operation of a hotel, which hazardous or toxic substances are stored
in accordance with all applicable Environmental Laws, to the best of our
knowledge, based on reasonable inspections of the Property by us and others, the
Seller, and any other person or entity for whose conduct Seller is liable, has
not generated, transported, stored, handled or disposed of any hazardous or
toxic substances at the Property, and has no knowledge of any release or
threatened release of any hazardous or toxic substance at the Property or in the
vicinity of the Property.
(iv) No lien has been imposed on the Property by any federal,
state or local governmental agency in connection with the presence at or near
the Property of any hazardous or toxic substance.
(v) The Seller, and any person or entity for whose conduct
the Seller is responsible, has not (i) entered into or been the subject of any
order or decree with respect to environmental matters with respect to the
Property, (ii) received notice under the citizen suit provisions of any
Environmental Law in connection with the Property, (iii) received any request
for information, notice, demand letter, administrative inquiry or formal or
informal complaint or claim in respect of any environmental condition relating
to the Property, or (iv) been subject to or threatened with any governmental or
citizen enforcement action with respect to the Property; and the Seller, and any
other person for whose conduct the Seller is liable, has no reason to believe
that any of the foregoing will be forthcoming.
(vi) The Seller has all licenses, permits or approvals, if
any, required for the activities and operations conducted at the Property and
for any past or ongoing alterations or improvements on the Property.
3.21 Sufficiency of Certain Items. The Property contains not less
than:
(a) a sufficient amount of kitchen equipment, bar equipment,
refrigeration equipment, silverware, glassware, china, dishes, "small goods",
napkins, tablecloths, paper goods and other such personal property to
efficiently operate each of the restaurants, bars and lounges, located upon or
within the Improvements;
(b) a sufficient amount of furniture, furnishings, color
television sets, carpets, drapes, rugs, floor coverings, mattresses, pillows,
bedspreads and the like, to furnish each guest room, so that each such guest
room is, in fact, fully furnished; and
(c) a sufficient amount of towels, washcloths and bed linens,
so that there are two and one-half sets of towels, washcloths and linens for
each guest room, together with a sufficient supply of paper goods, soaps,
cleaning supplies and other such supplies and materials, as are reasonably
adequate for the current operation of the Hotel.
3.22 Operation of Property Prior to Closing. Between the date of this
Agreement and the Closing Date, Seller shall operate the Property in compliance
with all laws and in the same manner in which Seller operated the Property prior
to the execution of this Agreement, so as to keep the Property in good
condition, reasonable wear and tear excepted, and so as to maintain the existing
calibre of the Hotel operations conducted at the Property and the reasonable
good will of the tenants, the Hotel guests, the employees and other customers of
the Hotel. The Seller shall continue to use its best efforts to take guest room
reservations and to book functions and meetings and otherwise to promote the
business of the Property in generally the same manner as the Seller did prior to
the execution of this Agreement. All advance room bookings and reservations and
all meetings and function bookings shall be booked at rates, prices and charges
heretofore customarily charged by the Seller for such purposes, and in
accordance with Seller's published rate schedules. From and after the execution
and delivery of this Agreement, the Seller shall not (i) make any agreements
which shall be binding upon the Purchaser with respect to the Property, or (ii)
reduce or cause to be reduced any room rents or any other charges over which
Seller has operational control. Between the date hereof and the Closing Date,
the Seller shall deliver to the Purchaser monthly reports (or for the partial
monthly period up to the Closing Date) showing the income and expenses of the
Hotel and all departments thereof, together with such periodic information with
respect to room reservations and other bookings, as the Seller customarily keeps
internally for its own use. The Seller agrees that it will operate the Property
and the Hotel in accordance with the provisions of this section between the date
hereof and the Closing Date.
3.23 Utilities. All Utilities required for the operation of the Property
either enter the Property through adjoining streets, or they pass through
adjoining land, do so in accordance with valid public easements or private
easements, and all of said Utilities are installed and operating and all
installation and connection charges therefor have been paid in full.
3.24 Curb Cuts. All curb cut street opening permits or licenses required
for vehicular access to and from the Real Property from any adjoining public
street have been obtained and paid for and are in full force and effect. The
Real Property has a right of unrestricted access to a public street.
3.25 Room Furnishings. Each room in the Hotel available for guest rental
is currently furnished and at Closing will be furnished in accordance with
Licensor's standards for the Hotel and room type.
3.26 Franchise Agreement. The franchise agreement with respect to the
Hotel is, and at Closing will be, valid and in full force and effect, and Seller
is not and will not be in default with respect thereto (with or without the
giving of any required notice and/or lapse of time).
ARTICLE 4
PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
To induce the Seller to enter into this Agreement and to sell the
Property, the Purchaser hereby makes the following representations, warranties
and covenants with respect to the Property, upon each of which the Purchaser
acknowledges and agrees that the Seller is entitled to rely and has relied:
4.1 Power. The Purchaser has all powers and all governmental licenses,
authorizations, consents and approvals to carry on its business as now conducted
and to enter into and perform its obligations under this Agreement and any
document or instrument required to be executed and delivered on behalf of the
Purchaser hereunder.
4.2 Execution. This Agreement has been executed and delivered by the
Purchaser, constitutes the valid and binding agreement of the Purchaser and is
enforceable in accordance with its terms.
4.3 Noncontravention. The execution and delivery of and the performance
by the Purchaser of its obligations hereunder do not and will not contravene, or
constitute a default under, any provisions of applicable law or regulation, or
any agreement, judgment, injunction, order, decree or other instrument binding
upon the Purchaser or result in the creation of any lien or other encumbrance on
any asset of the Purchaser.
4.4 Litigation. There is no action, suit or proceeding, pending or known
to be threatened, against or affecting the Purchaser or any principal,
subsidiary or affiliate of the Purchaser in any court or before any arbitrator
or before any Governmental Body which (a) in any manner raises any question
affecting the validity or enforceability of this Agreement or any other
agreement or instrument to which the Purchaser is a party or by which it is
bound and that is to be used in connection with, or is contemplated by, this
Agreement, (b) could materially and adversely affect the business, financial
position or results of operations of the Purchaser or any principal, subsidiary
or affiliate of the Purchaser, (c) could adversely affect the ability of the
Purchaser to perform its obligations hereunder, or under any document to be
delivered pursuant hereto, (d) could create a lien on the Property, any part
thereof or any interest therein or (e) could adversely affect the Property, any
part thereof or any interest therein or the use, operation, condition or
occupancy thereof.
4.5 Bankruptcy. No Act of Bankruptcy has occurred with respect to the
Purchaser.
4.6 Brokerage Commission. The Purchaser has not engaged the services of,
nor is it or will it become liable to, any real estate agent, broker, finder or
any other person or entity for any brokerage or finder's fee, commission or
other amount with respect to the transaction described herein.
4.7 Exchange. Purchaser shall, at Seller's sole expense, cooperate with
Seller to effectuate a tax-free exchange pursuant to Section 1031 of the
Internal Revenue Code of 1986, as amended (a "1031 Exchange"), if the Seller
elects a 1031 Exchange.
4.8 Property Improvement Plan. Purchaser assumes all
responsibility for improvements required by any "Property Improvement Plan" of
the Franchisor as defined in Section 5.9.
4.9 Liquidated Damages. Purchaser shall be responsible for any
liquidated damages charged to the Seller from cancellation prior to its
termination of the current franchise agreement with respect to the Hotel.
ARTICLE 5
CONDITIONS AND ADDITIONAL COVENANTS
The Purchaser's obligations hereunder are subject to the satisfaction of
the following conditions precedent and the compliance by the Seller with the
following covenants:
5.1 Seller's Deliveries. The Seller shall have delivered to the
Purchaser, on or before the Closing Date, all of the documents and other
information required of Seller pursuant to Section 6.2.
5.2 Representations, Warranties and Covenants; Obligations of Seller;
Certificate. All of the Seller's representations and warranties made in this
Agreement shall be true and correct as of the Closing Date as if then made,
there shall have occurred no material adverse change in the financial condition
of the Seller or the physical or financial condition of the Property since the
date hereof, the Seller shall have performed all of its covenants and other
obligations under this Agreement and the Seller shall have executed and
delivered to the Purchaser at Closing a Certificate to the foregoing effect.
5.3 Title Matters. Purchaser shall have received from Seller a copy of
Seller's Owner's Title Policy. The Purchaser shall have determined that the
Seller is the sole owner of good and marketable fee simple title to the Real
Property free and clear of all liens, encumbrances, restrictions, conditions and
agreements except for Permitted Title Exceptions. The Seller shall not have
taken any action from the date hereof and through and including the Closing Date
that would adversely affect the status of title to the Real Property. Fee simple
title to the Real Property shall be insurable as such by the Title Company at or
below its regularly scheduled rates subject only to Permitted Title Exceptions.
The Property shall be conveyed in an "as is" condition.
5.4 Survey. The Purchaser shall have received the most recent Survey of
the Land obtained by or in the possession of Seller. The Survey provided by the
Seller (or a survey obtained by Purchaser if Seller's Survey was prepared more
than one year earlier) shall be adequate for the Title Company to delete any
exception for survey in the Owner's Title Policy.
5.5 Condition of Improvements and the Tangible Personal Property. The
Improvements and the Tangible Personal Property (including but not limited to
the mechanical systems, plumbing, electrical, wiring, appliances, fixtures,
heating, air conditioning and ventilating equipment, elevators, boilers,
equipment, roofs, structural members and furnaces) shall be in good condition
and working order and shall have no material defects, structural or otherwise,
and there shall be no deferred maintenance with respect to the Real Property,
the Tangible Personal Property or any part thereof, and the Seller shall not
have diminished the Inventory. The Seller, at its expense, shall have maintained
the Real Property and the Tangible Personal Property in compliance with all
applicable laws and in at least as good condition as they are in as of the date
hereof, normal wear and tear excepted. The Seller shall not have diminished the
quality or quantity of maintenance and upkeep services heretofore provided to
the Real Property and the Tangible Personal Property. The Seller shall not have
removed or caused or permitted to be removed any part or portion of the Real
Property or the Tangible Personal Property unless the same is replaced, prior to
Closing, with similar items of at least equal quality and acceptable to the
Purchaser.
5.6 Utilities. All of the Utilities shall be installed in and operating
at the Property, and service shall be available for the removal of garbage and
other waste from the Property. Between the date hereof and the Closing Date, the
Seller shall not have received notice of any extraordinary or material increase
or proposed increase in the rates charged for the Utilities from the rates in
effect as of the date hereof.
5.7 Land Use. The current use and occupancy of the Property as a hotel
and for hotel-related purposes are permitted as a principal use under all laws
applicable thereto without the necessity of resort to any grandfathered or
permitted nonconforming use status, or any special use permit, special exception
or other special permit, permission or consent.
5.8 Lease Estoppel Certificates. The Purchaser shall have received an
estoppel certificate for each of the Leases as provided herein and, if required
by the Purchaser's lender, subordination, attornment and nondisturbance
agreements acceptable to such lender, all in form and substance reasonably
acceptable to the Purchaser. The Seller, at its expense, shall request and use
Seller's best efforts to obtain a lease estoppel certificate from all of third
parties under all of the Leases prior to Closing Date.
5.9 Franchise. The Purchaser or its designee shall have received, at the
Purchaser's option and expense, an assignment or transfer of any existing
franchise agreement currently applicable to the Hotel or a new franchise
agreement from Choice Hotels International, Inc. (the "Franchisor"), together
with an estoppel certificate from the existing franchisor in form and substance
acceptable to the Purchaser, which the Seller agrees to use its best efforts to
obtain.
5.10 Operational Licenses. Purchaser shall have obtained all permits,
licenses, approvals and Authorizations necessary or desirable to operate the
Hotel and all restaurants, bars and lounges presently located in the Hotel,
including, without limitation, liquor licenses or alcoholic beverage licenses.
To that end, the Seller and the Purchaser shall have cooperated with each other,
and each shall have executed such transfer forms, license applications and other
documents as may be necessary or desirable for Purchaser to obtain such permits,
licenses, approvals and Authorizations.
5.11 Securities Compliance. Seller shall cooperate with Purchaser to
provide all information and execute all documents necessary for Purchaser to
comply with all applicable state and federal securities laws.
5.12 Acquisition of Other Properties. Simultaneously with the closing of
the transaction contemplated hereby, the Seller or the Seller's affiliates or
related entities shall have sold and conveyed to Purchaser and Purchaser shall
have purchased those certain properties listed on Exhibit F attached hereto.
5.13 Noncompetition. Neither 544 Associates, nor any of its partners or
the owners of its partners, or any entities controlled by such partners or
owners, or in which such partners or owners individually or collectively have
more than a 10% ownership interest, will acquire, develop, manage, lease,
operate, or have any interest in any hotel or lodging establishment within a
twelve (12) mile radius of Chambersburg, Pennsylvania for a period of five (5)
years from the Closing Date. This provision shall survive the Closing Date.
Each of the conditions and additional covenants contained in this Section are
intended for the benefit of the Purchaser and may be waived in whole or in part,
by the Purchaser, but only by an instrument in writing signed by the Purchaser.
ARTICLE 6
CLOSING
6.1 Closing. Closing shall be held at the offices of the Purchaser or
its counsel on or before April 30, 1997, upon ten (10) days notice from
Purchaser to Seller commencing at 9:00 AM local time unless otherwise agreed by
the Purchaser and the Seller. The Purchaser and Seller shall have the right, but
not the obligation, to extend the Closing Date, one or more times, but not
beyond May 15, 1997, by written notice thereof to the Seller. Possession of the
Property shall be delivered to the Purchaser at Closing, subject only to
Permitted Title Exceptions.
6.2 Seller's Deliveries.
(a) At Closing, the Seller shall deliver to Purchaser all of
the following instruments, each of which shall have been duly executed and,
where applicable, acknowledged on behalf of the Seller and shall be dated as of
the Closing Date:
(i) The certificate required by Section
5.2.
(ii) An Assignment of Leases, if
applicable.
(iii) Lease estoppel certificates, if
applicable.
(iv) The Income Tax Certificate.
(v) The Assignment and Assumption
Agreement.
(vi) Settlement Sheet.
(vii) Xxxx of Sale for all Tangible
Personal Property.
(viii) Deed.
(ix) Opinion of counsel or other evidence
(such as organization documents, including certificates and authorizing
resolutions) satisfactory to Purchaser as to Seller's authority to enter into
and consummate this Agreement.
(x) Such agreements, affidavits or other
documents as may be required by the Title Company to issue the Owner's Title
Policy.
(b) At Closing, the Seller shall also deliver or cause to be
delivered to the Purchaser the following:
(i) The originals of any Leases or true,
correct and complete copies thereof certified by the Seller.
(ii) A valid, final and unconditional
certificate of occupancy as to the Real Property issued by the appropriate
governmental authority.
(iii) If part of the Tangible Personal Property
consists of a motor vehicle titled under state law, a duly executed and
delivered document transferring title pursuant to applicable state law and
related documents.
(iv) True, correct and complete copies of
all plans, specifications, guaranties and warranties, if any, of contractors,
subcontractors, manufacturers, suppliers and installers possessed by the Seller
and relating to the Improvements and the Tangible Personal Property and
Intangible Personal Property, or any part thereof.
(v) Copies of all correspondence, files,
documents, records and data relating the operation of the Property for the 3
years immediately before Closing.
(vi) All keys for the Property.
(vii) A complete list of all advance room
reservations, functions and the like, including all deposits thereon, in
reasonable detail specified by the Purchaser.
(viii) Updated Guest Ledger.
(ix) Any other document, instrument,
information or item reasonably requested by the Purchaser or required hereby.
6.3 Purchaser's Deliveries. At Closing, the Purchaser shall pay,
deliver or cause to be delivered to the Seller, as appropriate, the following:
(a) The Purchase Price in the manner set forth in Section 2.5
hereof.
(b) The Assignment and Assumption Agreement.
(c) Any other document or instrument reasonably requested by
the Seller or required hereby.
6.4 Closing Costs. The Seller shall pay (i) all applicable sales and use
taxes (if any) levied on the transfer of the Tangible or Intangible Personal
Property, and (ii) any expenses incurred by or on behalf of the Seller. The
Purchaser shall pay (i) all Title Company charges, (ii) all of the recording
taxes and fees, (iii) the costs of currently non-existing audited financial
statements, survey and environmental studies, and (iv) any expenses incurred by
or on behalf of the Purchaser. Each party hereto shall pay its own legal fees
and expenses.
6.5 Income and Expense Allocations.
(a) At Closing, all income and expenses with respect to the
Property, and applicable to the period of time before and after Closing,
determined in accordance with generally accepted accounting principles
consistently applied, shall be allocated between the Seller and the Purchaser as
of the Closing Date. The Seller shall be entitled to all income, including the
Tray Ledger, and responsible for all expenses for the period of time up to but
not including the Closing Date, and the Purchaser shall be entitled to all
income and responsible for all expenses for the period of time from, after and
including the Closing Date. Without limiting the generality of the foregoing,
Seller shall pay to Purchaser or Purchaser shall pay to Seller at Closing, or
there shall be an appropriate Closing adjustment for, the net cash payable to
the Purchaser or Seller, as appropriate, based on the allocation set forth
above. All adjustments shall be shown on the settlement statement or may be done
outside the settlement statement (with such supporting documentation as the
parties may reasonably require being attached as exhibits to the settlement
statements or submit to the parties as appropriate) and if on the settlement
statement shall increase or decrease (as the case may be) the balance of the
Purchase Price payable by the Purchaser at Closing. The Seller shall pay at
Closing all special assessments and taxes applicable to the Property and
relating to the period prior to Closing.
(b) If accurate allocations cannot be made at Closing because
current bills are not obtainable (as, for example, in the case of utility
bills), the parties shall allocate such income or expenses at Closing on the
best available information, subject to adjustment upon receipt of the final xxxx
or other evidence of the applicable income or expense. Any expense paid by the
Seller or the Purchaser with respect to the Property after the Closing Date
shall be promptly allocated in the manner described herein and the parties shall
promptly pay or reimburse any amount due.
(c) Purchaser shall have no obligation to collect any
accounts receivable allocable to the period prior to Closing. All income
attributable to the Property collected by the Purchaser after the Closing Date
shall be first applied against accounts receivable and other obligations
allocable to the period after the Closing Date. The Seller shall not xxx an
obligor with respect to the Property that maintains a contractual relationship
with the Purchaser after the Closing Date.
ARTICLE 7
CONDEMNATION; RISK OF LOSS
7.1 Condemnation. In the event of any actual or threatened taking,
pursuant to the power of eminent domain, of all or any portion of the Real
Property, or any proposed sale in lieu thereof, the Seller shall give written
notice thereof to the Purchaser promptly after the Seller learns or receives
notice thereof. If all or any part of the Real Property is, or is to be, so
condemned or sold, the Purchaser shall have the right to terminate this
Agreement pursuant to Section 8.3. If the Purchaser elects not to terminate this
Agreement, all proceeds, awards and other payments arising out of such
condemnation or sale (actual or threatened) shall be paid to the Purchaser at
Closing.
7.2 Risk of Loss. The risk of any loss or damage to the Property prior
to the Closing shall remain upon the Seller. If any such loss or damage occurs
prior to Closing, the Purchaser shall have the right to terminate this Agreement
pursuant to Section 8.3. If the Purchaser elects not to terminate this
Agreement, it may choose to restore the Property itself, in which event Seller
shall assign or pay, or cause to be paid, to Purchaser all insurance proceeds
payable on account of such loss or damage and the Seller shall not be
responsible to the Purchaser for any additional sums required to restore the
Property.
ARTICLE 8
LIABILITY OF PURCHASER; INDEMNIFICATION BY SELLER;
TERMINATION RIGHTS
8.1 Liability of Purchaser. Except for any obligation expressly assumed
or agreed to be assumed by the Purchaser hereunder, the Purchaser does not
assume any obligation of the Seller or any liability for claims arising out of
any occurrence prior to Closing.
8.2 Indemnification.
(a) The Seller hereby indemnifies and holds the Purchaser
harmless from and against any and all claims, costs, penalties, damages, losses,
liabilities and expenses (including reasonable attorneys' fees) that may at any
time be incurred by the Purchaser, whether before or after Closing, as a result
of any material breach by the Seller of any of Seller's representations,
warranties, covenants or obligations set forth herein or in any other document
delivered by the Seller under this Agreement, or as a result of acts or events
occurring prior to the Closing Date.
(b) The Purchaser hereby indemnifies and holds the Seller
harmless from and against any and all claims, costs, penalties, damages, losses,
liabilities and expenses (including reasonable attorneys' fees) that may at any
time be incurred by the Seller, whether before or after Closing, as a result of
any material breach by the Purchaser of any of Purchaser's representations,
warranties, covenants or obligations set forth herein or in any other document
delivered by the Purchaser under this Agreement, or as a result of acts or
events occurring after the Closing Date.
8.3. Termination by Purchaser. If any condition set forth herein cannot
or will not be satisfied prior to Closing, or upon the occurrence of any other
event that would entitle the Purchaser to terminate this Agreement and its
obligations hereunder, the Purchaser, at its option, may elect either (a) to
terminate this Agreement and all other rights and obligations of the Seller and
the Purchaser hereunder shall terminate immediately and the Deposit shall be
returned to the Purchaser or (b) to waive its right to terminate and to proceed
to Closing. If the Purchaser terminates this Agreement as a consequence of a
material misrepresentation or breach of a warranty or covenant by the Seller, or
a failure by the Seller to perform its obligations hereunder, the Purchaser
shall have all remedies available hereunder or at law or in equity, including
but not limited to the right to specific performance of this Agreement.
8.4. Termination by Seller. If, prior to Closing, the Purchaser defaults
in performing any of its obligations under this Agreement (including its
obligation to purchase the Property), the Seller's sole remedy for such default
shall be to terminate this Agreement and receive the Deposit. The Seller and the
Purchaser agree that, in the event of such a default, the damages that the
Seller would sustain as a result thereof would be difficult if not impossible to
ascertain. The Seller hereby waives and releases any and all other rights and
remedies for a default by the Purchaser. Therefore, the Seller and the Purchaser
agree that, the Seller shall retain the Deposit as full and complete liquidated
damages and as the Seller's sole remedy.
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.1 Completeness; Modification. This Agreement constitutes the entire
agreement among the parties hereto with respect to the transactions contemplated
hereby and supersedes all prior discussions, understandings, agreements and
negotiations between the parties hereto. The provisions of the prior sentence
reflects the true intent of the Seller and the Purchaser and is intended to be
enforceable, notwithstanding any existing or further case law to the contrary.
This Agreement may be modified only by a written instrument duly executed by the
parties hereto.
9.2 Successors and Assigns. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns.
9.3 Days. If any action is required to be performed, or if any notice,
consent or other communication is given, on a day that is a Saturday or Sunday
or a legal holiday in the jurisdiction in which the action is required to be
performed or in which is located the intended recipient of such notice, consent
or other communication, such performance shall be deemed to be required, and
such notice, consent or other communication shall be deemed to be given, on the
first business day following such Saturday, Sunday or legal holiday. Unless
otherwise specified herein, all references herein to a "day" or "days" shall
refer to calendar days and not business days.
9.4 Governing Law. This Agreement and all documents referred to herein
shall be governed by and construed and interpreted in accordance with the laws
of the state wherein the Property is located.
9.5 Counterparts. To facilitate execution, this Agreement may be executed
in as many counterparts as may be required. It shall not be necessary that the
signature on behalf of both parties hereto appear on each counterpart hereof.
All counterparts hereof shall collectively constitute a single agreement.
9.6 Severability. If any term, covenant or condition of this Agreement, or
the application thereof to any person or circumstance, shall to any extent be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term, covenant or condition to other persons or circumstances, shall not be
affected thereby, and each term, covenant or condition of this Agreement shall
be valid and enforceable to the fullest extent permitted by law and shall be
construed so as to give effect to the intent of the parties.
9.7 Costs. Regardless of whether Closing occurs hereunder, and except as
otherwise expressly provided herein, each party hereto shall be responsible for
its own costs in connection with this Agreement and the transactions
contemplated hereby, including without limitation fees of attorneys, engineers
and accountants.
9.8 Notices. Unless otherwise set forth herein, all notices, requests,
demands and other communications hereunder shall be in writing and shall be
delivered by hand, by telecopy, overnight delivery service, or by the United
States mail, certified, postage prepaid, return receipt requested, at the
addresses and with such copies as designated below. Any notice, request, demand
or other communication delivered or sent in the manner aforesaid shall be deemed
given or made (as the case may be) when actually delivered to the intended
recipient.
For the Seller:
Xx. Xxxx Xxxx
Hersha Enterprises Ltd.
Xxxxxxxx Xxxx, Xxx X
Xxx Xxxxxxxxxx, XX 00000
Telecopy No.: 000-000-0000
with a copy to:
Mr. Xxx Xxxx
c/o Clarion Suites Hotel
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopy No.: 215-238-1045
For the Purchaser:
Xxxxxxxx Hospitality Limited Partnership
00000 Xxx Xxxxxxxx Xxxx
Xxxxxx Xxxxxx, Xxxxxxxx 00000
Telecopy No.: (000)000-0000
with a copy to:
Xxxxxxxxx, Xxxxxxx & Xxxxx
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
ATTN: Xxxxx X. Xxxxxxxx, Esquire
Telecopy No.: (000)000-0000
Any party hereto may change its address or designate different or other persons
or entities to receive copies by notifying the other party in a manner described
in this Section.
9.9 Escrow Agent. The Escrow Agent referred to in the definition thereof
contained in Paragraph 1.1 hereof has agreed to act as such for the convenience
of the parties without fee or other charges for such services as Escrow Agent.
The Escrow Agent shall not be liable: (a) to any of the parties for any act or
omission to act except for its own willful misconduct; (b) for any legal effect,
insufficiency, or undesirability of any instrument deposited with or delivered
by Escrow Agent or exchange by the parties hereunder, whether or not Escrow
Agent prepared such instrument; (c) for any loss or impairment of funds that
have been deposited in escrow while those funds are in the course of collection,
or while those funds are on deposit in a financial institution, if such loss or
impairment results from the failure, insolvency or suspension of a financial
institution; (d) for the expiration of any time limit or other consequence of
delay, unless a properly executed written instruction, accepted by Escrow Agent,
has instructed the Escrow Agent to comply with said time limit; (e) for the
default, error, action or omission of either party to the escrow. The Escrow
Agent shall be entitled to rely on any document or paper received by it,
believed by such Escrow Agent, in good faith, to be bona fide and genuine. The
Escrow Agent is counsel for Purchaser. It is agreed that the Escrow Agent shall
not be disqualified from representing either party in connection with any
litigation which might arise out or in connection with this Agreement, merely by
virtue of the fact that such Escrow Agent has agreed to act as Escrow Agent
hereunder. Further, in that event of any dispute as to the disposition of the
Deposit or any other monies held in escrow, the Escrow Agent may, if such Escrow
Agent so elects, interplead the parties by filing an interpleader action in any
court having subject matter jurisdiction of such a matter (to the personal
jurisdiction of which both parties do hereby consent), and pay into the registry
of the court the Deposit and any other monies held in escrow, including all
interest earned thereon, whereupon such Escrow Agent shall be relieved and
released from any further liability as Escrow Agent hereunder. In the event of
such interpleader action, the Escrow Agent shall not be disabled from
representing a party hereto. Escrow Agent shall not be liable for Escrow Agent's
compliance with any legal process, subpoena, writs, orders, judgments and decree
of any court, whether issued with or without jurisdiction, and whether or not
subsequently vacated, modified, set aside or reversed.
9.10 Incorporation by Reference. All of the Exhibits attached hereto are by
this reference incorporated herein and made a part hereof.
9.11 Survival. All of the representations, warranties, covenants and
agreements of the Seller and the Purchaser made in, or pursuant to, this
Agreement shall survive Closing and shall not merge into any document or
instrument executed and delivered in connection herewith.
9.12 Further Assurances. The Seller and the Purchaser each covenant and
agree to sign, execute and deliver, or cause to be signed, executed and
delivered, and to do or make, or cause to be done or made, upon the written
request of the other party, any and all agreements, instruments, papers, deeds,
acts or things, supplemental, confirmatory or otherwise, as may be reasonably
required by either party hereto for the purpose of or in connection with
consummating the transactions described herein.
9.13 No Partnership. This Agreement does not and shall not be construed to
create a partnership, joint venture or any other relationship between the
parties hereto except the relationship of Seller and Purchaser specifically
established hereby.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be executed in their names by their respective duly-authorized
representatives as a sealed instrument.
[SIGNATURE PAGES FOLLOW.]
SIGNATURE PAGE
PURCHASE AGREEMENT
(Comfort Inn Hotel,
Chambersburg, Pennsylvania)
SELLER:
544 ASSOCIATES,
a Pennsylvania limited
partnership
By: Xxxxxxxxxxx Enterprises Ltd.,
general partner
By: /s/ Hash X. Xxxx (SEAL)
------------------
Name: Hash X. Xxxx
Title: Partner
SIGNATURE PAGE
PURCHASE AGREEMENT
(Comfort Inn Hotel,
Chambersburg, Pennsylvania)
PURCHASER:
XXXXXXXX HOSPITALITY LIMITED
PARTNERSHIP
By: XXXXXXXX HOSPITALITY
TRUST, INC.,
General Partner
By: /s/ Xxxxx X. Xxxxxxxx, Xx.(SEAL)
--------------------------
Xxxxx X. Xxxxxxxx, Xx..
President
LIST OF EXHIBITS
Exhibit A Deed
Exhibit B Operating Agreements
Exhibit C Guest Ledger
Exhibit D Seller's Financial Information
Exhibit E Tangible Personal Properties
Exhibit F Acquisition of Other Properties
EXHIBIT A
Deed
EXHIBIT B
Operating Agreements
EXHIBIT C
Guest Ledger
EXHIBIT D
Seller's Financial Information
EXHIBIT E
Tangible Personal Property
EXHIBIT F
Acquisition of Other Properties
. Comfort Inn Hotel, Gettysburg, Pennsylvania
. Holiday Inn Express, Allentown, Pennsylvania
. Holiday Inn Express, Gettysburg, Pennsylvania
