1
INDEX TO
CONTRACT OF PURCHASE AND SALE
BETWEEN
HILLSBOROUGH ASSOCIATES, MERIDEN HOTEL ASSOCIATES,L.P.,
WELLESLEY I, L.P., MULTI-WELLESLEY LIMITED PARTNERSHIP, SELLER
AND
PRIME HOSPITALITY CORP., BUYER
ARTICLE NO. DESCRIPTION OF ARTICLE PAGE NO.
----------- ---------------------- --------
1 Purchase and Sale of Property 1
2 Purchase Price 4
3 Closing 4
4 Title and Survey 6
5 Adjustments 7
6 Brokerage 12
7 Inspection Period 12
8 "As Is" "Where Is" Sale 13
9 Conditions to Closing 15
10 Condemnation 15
11 Warranties and Representations 16
12 Survival of Representations and Warranties 17
13 Default 17
14 Tax Reduction Proceedings 17
15 Operations Pending Closing 18
16 Employees 19
17 Risk of Loss 19
18 Notices 19
19 Indemnities 20
20 Xxxx-Xxxxx-Xxxxxx Act 20
21 Seller's Covenant to Notify 21
22 Assignment; Captions; Construction; Plurals 21
23 Severability; Entire Agreement;
Counterparts; Modification 21
24 Relationship of Parties; Further Instruments
No Third Party Beneficiaries 22
25 Successors 22
2
CONTRACT OF PURCHASE AND SALE
THIS CONTRACT made as of the 1st day of February 1996 between
HILLSBOROUGH ASSOCIATES, a general partnership, having an address at 000 Xxxxx
00, Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 ("Hillsborough"), MERIDEN HOTEL
ASSOCIATES, L.P. and WELLESLEY I L.P., 00 Xxxxxxxxxx Xxxxx, Xxxxx, Xxx Xxxxxx
00000 (collectively, "Wellesley I") and MULTI-WELLESLEY LIMITED PARTNERSHIP, c/o
Wiss & Co., 000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000
("Multi-Wellesley") (collectively, "Hillsborough", "Wellesley I", and
"Multi-Wellesley" are referred to as the "Seller"), and PRIME HOSPITALITY CORP.,
having an address at 000 Xxxxx 00, Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, ("Buyer").
W I T N E S S E T H:
In consideration of the sum of $100.00 and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. PURCHASE AND SALE OF PROPERTY
A. Subject to the terms and conditions of this Agreement, Seller
will sell and assign and Buyer will purchase and assume, all of Seller's right,
title and interest in and to the following (collectively, the "Property"):
(i) those certain tracts of land on which are situated the
hotels listed on the attached Exhibit A, (the "Hotels"), together with all and
singular easements, covenants, agreements, rights, privileges, tenements,
hereditaments and appurtenances thereunto now or hereafter owned by Seller and
belonging or appertaining thereto (collectively, the "Land"); and
(ii) all of the buildings, structures and other improvements
now or hereafter in or on the Land (collectively referred to as the "Premises");
and
(iii) all furniture, furnishings, fixtures, equipment,
machinery and other tangible personal property including Consumables situated in
or on the Premises or used in connection therewith, owned by Seller, subject to
such depletion and resupply as will occur and be made in the normal course of
business, excluding, however, (a) equipment and property leased pursuant to
Hotel Contracts (as defined below) and (b) all items of property owned by
3
tenants under the Leases (as defined below), Hotel guests, employees, or person
or entity furnishing goods or services to the Hotels, (collectively, the
"Equipment"); and
(iv) all books, records, ledgers, files, information and data
with respect solely to the Hotels to the extent located at the Hotels and in
Seller's possession and control, including, all promotional and advertising
materials concerning the Hotels or any part thereof to the extent available and
in Seller's possession and control; and
(v) to the extent transferable, the Leases and Hotel
Contracts; and
(vi) to the extent transferable, governmental licenses and
permits; and
(vii) to the extent transferable and in Seller's possession,
all architectural
plans and drawings, surveys, copyrights, warranties and other items of
intangible personal property not specifically listed or excluded above and
relating solely to the ownership, occupancy or operation of the Hotels and owned
by Seller (including, for example, telephone and facsimile numbers to the extent
of Seller's interest therein, listings and directories), excluding, however, (a)
cash, any reserves for Equipment or other funds on deposit in bank accounts or
in transit for deposit; (b) receivables; (c) refunds, rebates or other claims,
or any interest thereon for periods or events occurring prior to the Cut-off
Time (as defined in Section 5.A.); (d) prepaid insurance premiums; (e) utility
and similar deposits or other prepaid items (except to the extent they are
transferred to Buyer and Seller receives credit on the Closing Statements for
any such prepaid item); (f) prepaid government permit and license fees (except
to the extent they are transferred to Buyer and Seller received a credit on the
Closing Statements for any such prepaid item); and (g) funds on deposit with
Seller's lenders.
It is acknowledged that Buyer is purchasing the existing mortgage loans
from a group of participant lenders and it is agreed hereby that in its capacity
as purchaser of such loans, Buyer will refund to Seller any reserve, escrow, or
other deposits held by lenders in conjunction with such loans.
B. The following definitions will apply:
(i) Consumables will mean all maintenance and housekeeping
supplies and
2
4
inventory, including, without limitation, linens, soap, toiletries, glassware,
silverware, cleaning materials, matches, stationery, pencils and other supplies
of all kinds, whether used, unused, or held in reserved storage for future use
in connection with the maintenance and operation of the Hotels, which are owned
by Seller and on hand on the date hereof, subject to such depletion and resupply
as will occur and be made in the normal course of business, excluding, however,
all items of property owned by tenants under the Leases, Hotel guests,
employees, or other persons or entities furnishing goods or services to the
Hotels.
(ii) Hotel Contracts will mean all service, maintenance, purchase
order, reservation and telephone equipment and system contracts, and other
contracts and/or leases where Seller is lessee or purchaser, with respect to the
ownership, maintenance, operation, provisioning;
(iii) Leases will mean leases of space and concessions at the
Hotels. C. Buyer acknowledges that the interest of each of Hillsborough,
Wellesley I, and Multi-Wellesley extends only to the Hotels of which they are
individually identified as Owner on Exhibit A and that obligations of each of
Hillsborough, Wellesley I, and Multi- Wellesley hereunder run only to those
Hotels. The obligations of Hillsborough, Wellesley I, or Multi-Wellesley are
entirely and for all purposes several so that neither Hillsborough, nor
Wellesley I, nor Multi-Wellesley will be liable for any obligations related to
any Hotel not owned by it and that any certification or affidavit given by
Hillsborough, Wellesley I, Multi- Wellesley will relate only to Hotels owned by
it. Further, Buyer acknowledges that as managing agent and prior owner of the
Properties it has special knowledge of the Properties and that with respect to
any affidavit or certificate given by the Seller to Buyer will be deemed to (and
any such certificate may recite that such certificate does) include facts to the
knowledge of Buyer and available to Buyer in such capacity. Further, Seller will
has no liability under this Contract with respect to any matter within the
control of Buyer as managing agent. Notwithstanding limitations of this Section
1.C., Buyer has no obligation to close unless and until each of Hillsborough,
Wellesley I, and Multi-Wellesley have complied with each and every material
3
5
term and condition of this Agreement, unless such compliance is within the
control of Buyer as managing agent.
2. PURCHASE PRICE.
The purchase price for the Property is $3,600,000, payable as
follows:
A. Within ten (10) days of the
Effective Date the as defined
below, the initial deposit $ 25,000
B. At closing wire transfer, of
immediately available funds
subject to adjustments,
credits, and prorations, the balance $3,599,975
Total $3,600,000
The initial deposit and all additional deposits under this Contract and
all interest accruing (the "Deposit") will be held in an interest bearing
account by the Title Company (as defined in Section 4) and will be applied
against the purchase price at Closing or otherwise disbursed in accordance with
the terms of this Contract. The interest shall be credited against the Purchase
Price at Closing or disbursed to the party entitled to the Deposit upon
termination or breach of this Contract. For purposes of this Contract, the
"Effective Date" will be deemed to be the date upon which a copy of this
Contract, fully executed by the Seller, is received by Buyer.
3. CLOSING.
A. The closing for payment of the purchase price and delivery of the
closing documents (the "Closing") will take place on a day mutually acceptable
but no later than March 11, 1996, commencing at 10:00 a.m. at the offices of
Seller's attorneys or the Title Company.
B. At Closing, Seller will deliver to Buyer:
(i) an executed and acknowledged limited warranty deed or deed of
bargain and sale with covenants against grantor's acts transferring to Buyer
title to the Premises subject only
4
6
to the Permitted Exceptions (as defined in Section 4), together with any real
estate tax forms or affidavits as are required by law;
(ii) an executed xxxx of sale transferring to Buyer all of Seller's
right, title and interest in and to the Equipment and Consumables;
(iii) an executed general assignment and assumption agreement
transferring to Buyer all of Seller's right, title and interest in, to and under
the Hotel Contracts, the licenses and permits, to the extent assignable under
the terms of the Hotel Contracts and, as to the licenses and permits, under
applicable law;
(iv) an executed lease assignment and assumption agreements
transferring to Buyer all of Seller's right, title and interest in, to and under
the Leases, to the extent Leases are assignable;
(v) an executed Seller's affidavit stating, under penalty of
perjury, Seller's U.S. taxpayer identification number and that Seller is not a
foreign person within the meaning of Section 1445 of the Internal Revenue Code;
(vi) an affidavit of title by Seller (which will be to the best of
Seller's knowledge, with reliance as appropriate on information provided by
Buyer, as Seller's managing agents) with regard to the absence of liens, claims
and encumbrances other than Permitted Exceptions and matters required to all
exceptions customarily omitted by affidavit from the title insurance policy to
be obtained by Buyer,
(vii) Seller's certification that its representations and
warranties, pursuant to Section 11 are true and correct or have not been
breached;
(viii) instruments as to each respective Property from the owner
thereof acceptable to Buyer and Title Company reflecting the proper power, good
standing and authorization for the sale of the Property to Buyer; and
(ix) possession of the Property
C. At Closing Buyer will deliver to Seller:
(i) the balance of the Purchase Price as required pursuant to
Section 2.C. above;
5
7
(ii) executed counterparts of any documents listed in Section 3.B.
required to be signed by Buyer;
(iii) evidence that the transaction contemplated by this Agreement
has been authorized by Buyer;
(iv) reasonable affidavits and certification as back up for Seller
affidavits and certifications in areas within Prime's knowledge and
responsibility.
D. At Closing, Seller will pay the following costs and expenses to
effect the consummation of the transaction: (i) all transfer tax, documentary
stamps, surtax and other tax on the deed or transfer of title to the Property or
the transfer of any mortgages encumbering the Property, (ii) the cost of the
title insurance commitment and premium, (iii) recording fees, and (iv) the cost
of Xxxx Xxxxx Xxxxxx applications if necessary. Buyer will endeavor to minimize
such costs and shall be responsible for any costs in excess of $600,000.
4. TITLE AND SURVEY.
A. Seller will convey to Buyer good and marketable, fee simple title
to the Property. The Property will be insurable at regular rates pursuant to an
ALTA form of owner's policy (the "Title Policy") without exception other than
(i) mortgages securing indebtedness to the participant lenders and Prime, (ii)
all exceptions to current title insurance policies and (iii) exceptions approved
by Buyer (the "Permitted Exceptions"). Within thirty (30) days from the
Effective Date, Buyer will obtain a commitment to issue the Title Policy from a
title company selected by Buyer (the "Title Company").
B. Buyer, at its option, may obtain a survey of the Property drawn
by a licensed surveyor in accordance with the minimum standards established for
surveyors in the state in which a Hotel is located and the minimum standard
detail requirement for ALTA/ACSM land surveys, which is satisfactory to Buyer,
confirms or establishes the correct legal description of the Property, and
identifies all easements, rights of way, and other visible items or matters of
record affecting the Property.
C. Prior to the expiration of the Inspection Period as defined in
Section 7, Buyer
6
8
will notify Seller's attorney of any objections to title. Seller will have no
obligation to cure any objections to title. Buyer may, at its option, either:
(i) close the transaction on the terms of this Contract and
accept, in full satisfaction of Seller's obligation hereunder, such title as
Seller can convey; or
(ii) cancel this Contract pursuant to Section 7.
5. ADJUSTMENTS.
A. Adjustments and Prorations.
The following matters and items will be apportioned between
the parties hereto, on an accrual basis, as of the Cut-off Time or, where
applicable, credited in total to a particular party with respect to such Hotel
being transferred at any Closing. For purposes of this Agreement Cut-off Time
will mean the customary close of business for each Hotel department or facility
for the immediately preceding the Closing Date or, where no other time is
applicable, 7:00 a.m. on the Closing Date.
(i) House Funds. All cash on hand in each Hotel in cash
registers, cashiers' "banks", and change funds (collectively, the "House Funds")
as of the Cut-off Time will be purchased by Buyer and credited (in the amount
thereof) to Seller and debited (in the amount thereof) to Buyer. All other funds
will remain the sole property of Seller and will be applied and returned to
Seller at the Closing.
(ii) Guest Ledger. All amounts in the guest ledger (including
charges for rooms, food, beverage, telephone charges and otherwise), accruing
prior to the Cut-off Time will be credited to Seller at face value less a two
percent (2%) discount. All amounts in the guest ledger accruing after the
Cut-off Time will belong to the Buyer. The entire guest ledger will thereupon
become the property of Buyer.
(iii) Accounts Receivable. Buyer will purchase all Accounts
Receivable under ninety (90) days old as of Closing at par. All Accounts
Receivable ninety (90) days or older will be retained by Seller. Buyer will
remit promptly to Seller all funds received by it following Closing in payment
of such accounts receivable. Such collection will be applied as designated,
7
9
but if there is no designation, then any such collection received within thirty
(30) days after the Closing Date will be applied first to the indebtedness
accrued prior to the Closing Date.
(iv) Advance Deposits. Buyer will receive a credit for all
advance deposits received by Seller.
(v) Vending. Coin and vending machine income, and telephone,
washroom income collected up to the Cut-off Time will be the property of Seller;
(vi) Taxes and Assessments. All ad valorem real estate taxes
due and payable in the year 1996 (or with respect to fiscal year 1995/1996),
special or general assessments, water and sewer rents, rates and charges and
vault charges and other municipal permit fees will be prorated as of the Closing
Date. If the amount of any such item is unascertainable on the Closing Date, the
credit therefor will be based on the most recent available xxxx therefor or, if
unavailable, Seller's good faith estimate thereof. If the actual amount of any
such item, when later determined and prorated for the applicable period, differs
from the credit given therefor at the Closing, the parties will promptly make
the appropriate adjustment, and the party owing sums by reason of such
adjustment will promptly remit such sums to the other party. Buyer will give
Seller written notice of the actual amounts of any such bills within three (3)
days after receipt thereof. If, at the time of the Closing, the Property or any
portion thereof is subject to a special assessment or assessments which are
payable by Seller and which are or may become payable in installments, then,
such special assessment or assessments will be paid and discharged by Seller in
full;
(vii) Utility Contracts. Cut-off readings will be secured for
all utilities as of the Cut-off Time;
(viii) Hotel Contracts and Leases. All income and expenses
with respect to the Leases and Hotel Contracts which continue to affect the
Hotels after the Closing will be prorated as of the Cut-off Time. Buyer will
receive a credit for the amount of any prepaid rents, security deposits, or
other deposits previously paid to Seller and not applied to delinquent rents or
otherwise as provided under the Leases as of the Closing. Seller will receive a
credit for the
8
10
amount of any prepaid expenses under any Hotel Contracts. Delinquent rentals
payable by tenants under the Leases will be the property of Seller. To the
extent Buyer receives any delinquent rents, Buyer will immediately remit same to
Seller. All security deposits held by Seller will be transferred to Buyer, a
receipt will be executed by Buyer, and all obligations with respect to such
security deposits will be assumed by Buyer who will indemnify Seller with
respect thereto. Seller agrees to send to each tenant under the Lease, by
certified mail return receipt requested, on the Closing Date, notices of the
sale of the relevant Hotel to Buyer (and transfer of the security deposits in
connection therewith), provided that failure to deliver such notices will not
invalidate the transfers contemplated hereby.
(ix) License Fees. Fees paid or payable for transferrable
licenses and permits will be prorated as of the Cut-off Time
(x) Inventories. Seller will receive a credit for inventories
by the aggregate invoice amount (including all shipping charges, taxes, etc.) of
all unopened items on hand at any Hotel as of the Cut-off Time normally
inventoried at such Hotel on a monthly or quarterly basis including, but not
limited to, all glass, china, linen and silver, all food and beverages and all
other Consumables, located at such Hotel as of the Cut-off Time as determined by
Buyer and Seller pursuant to an inventory to be conducted by Buyer and Seller
between 8:00 p.m., Eastern Standard Time, of the evening immediately before the
Cut-off Time, and 8:00 a.m., Eastern Standard Time, immediately after the
Cut-off Time.
(xi) Employees. Periodic employment compensation accrued as of
the Cut-off Time will be paid by Seller. To the extent Buyer employs any
employees of any Hotel, accrued vacation pay and other employee benefits with
respect to such employees, will be prorated as of the Cut-off Time based on
compensation, pay and benefits actually accrued as of that time; provided,
however, that accrued sick leave will not be prorated or paid by Seller. Nothing
set forth in this Section 5.A. (xii) will create any obligation of Buyer to
employ any employees of any Hotel.
(xii) Miscellaneous. Seller will receive a credit for all
trade association dues and
9
11
trade subscriptions that extend beyond the Closing Date, prorated as of the
Cut-off Time; Seller will receive a credit for prepaid advertising expenses to
the extent the advertising services relate to the period from and after the
Closing Date.
(xiii) Other. Such other items, if any, as are provided for in
this Agreement or as are normally prorated and adjusted in the sale of a hotel
property in the New York metropolitan area, including, without limitation, all
promotional items, trade advertising due bills (based upon the period during
which goods or services were rendered or received, as the case may be), deposits
and prepaid items which inure to the benefit of Buyer, taking into account all
refunds or rebates applicable to liabilities assumed by Buyer hereunder or
otherwise to periods after the Cut-off Time.
B. Closing Statements.
(i) The parties hereto authorize each other's agents and
employees to enter the Hotel, at reasonable times and otherwise under reasonable
circumstances, upon two (2) Business Days' prior written notice, both before and
after the Closing Date, for the purpose of making such inventories, examinations
and audits of the Hotels and the Hotel books and records as they reasonably deem
necessary in order to make the adjustments and prorations required under this
Section 5 or under any other provisions of this Agreement, and to determine
which items of personal property are excluded from this transaction and are to
be retained by Seller or are subject to payment by Buyer or proration between
Buyer and Seller in accordance with the terms of this Agreement. Based upon
preliminary audits and inventories, at or before the Closing, Seller or its
agents will prepare, and Buyer will review and approve (which approval will not
be unreasonably withheld, delayed or conditioned) a preliminary closing
statement (the "Preliminary Closing Statement") which will show the net amount
due either to Seller or to Buyer as the result of the adjustments and prorations
provided for herein, and such net due amount will be added to or subtracted from
the cash balance of the Purchase Price to be paid to Seller pursuant to Section
2 hereof. Within thirty (30) days following the Closing Date, Seller or its
agent will prepare, and Buyer will review and approve (which approval will not
be
10
12
unreasonably withheld, delayed or conditioned) a final closing statement (the
"Final Closing Statement") setting forth the final determination of all items to
be included on the Closing Statements. The net amount due Seller or Buyer, if
any, by reason of adjustments to the Preliminary Closing Statement as shown in
the Final Closing Statement, will be paid in cash by the party obligated
therefor within ten (10) days following the party's receipt of the approved
Final Closing Statement. The adjustments, prorations and determinations agreed
to by Seller and Buyer will be conclusive and binding on the parties hereto.
(ii) Seller will have the right to have its representatives
present after the Closing Date for the purpose of review of receivables or any
other post-closing adjustments provided for in this Agreement, and such
representatives will be given reasonable access to the books and records of the
Hotels which are relevant to the preparation of the Closing Statements. Buyer
will furnish Seller with access to the accounting computer system for a period
of not less than ninety (90) days after the Closing Date to allow Seller to make
any post-closing accounting necessary and Seller will be entitled to use on site
personnel for this purpose at no cost to Seller, and Buyer will fully cooperate
in making such personnel available to Seller for such purpose.
D. Calculations.
Subject to the provisions of Section 5 above and solely for purposes
of calculating prorations, Buyer will be deemed to be entitled to the Property
and, therefore, entitled to the income therefrom and responsible for the
expenses thereof as of the Cut-off Time. All such prorations will be made on the
basis of the actual number of days of the year and month which will have elapsed
as of the Closing Date. Except as set forth herein, all items of income and
expense for the period after Closing will be for the account of Buyer, all as
determined by the accrual method of accounting in accordance with generally
accepted accounting principles consistently applied. Bills received after
Closing which relate to expenses incurred, services performed, and any and all
amounts allocable to the period prior to Closing, will be paid by Seller and
amounts received (including, without limitation, refunds and insurance proceeds)
by Buyer relating to the period prior to Closing will be immediately paid to
Seller.
11
13
E. Inability to Agree.
In the event Seller and Buyer are unable to agree on (i) the
Preliminary Closing Statement on or before the Closing Date or (ii) the Final
Closing Statement within thirty (30) days following the Closing Date, then, in
either such event, the issues relating to the Preliminary Closing Statement or
the Final Closing Statement, as the case may be, will be submitted to Xxxxxx
Xxxxxxxx LLP or another independent certified public accountant reasonably
acceptable to Seller and Buyer, for final resolution and Seller and Buyer agree
to be bound by the determination of such accountant. The costs and expenses
incurred in connection with the services of such accountant will be borne
equally by Buyer and Seller.
6. BROKERAGE. Buyer and Seller represent and warrant to each other
that they have not dealt with any broker or finder in connection with the
transaction contemplated by this Contract. Each party agrees to defend,
indemnify and hold harmless the other from and against any and all expense,
cost, damage or liability (including, without limitation, court costs and
reasonable attorneys' fees, at trial and appeal) resulting from the claims of
any brokers or those claiming to have performed services in the nature of
brokerage or finding services by reason of the indemnifying party's acts.
7. INSPECTION PERIOD.
A. For a period terminating March 11, 1996 (the "Inspection
Period") Buyer, its agents, employees and contractors will have the right to
enter onto the Property to perform engineering studies, soil tests,
environmental tests, economic feasibility studies, title and survey reviews and
any other tests and investigations as Buyer may elect (the "Property Studies").
Within ten (10) days after the Effective Date Seller will deliver to Buyer (i)
copies of the reports of any tests, investigations, or inspections with respect
to the Property undertaken by or at the direction of or otherwise in the
possession of Seller, and (ii) all notices received from any governmental
authority with respect to the Property. If, during the Inspection Period, Buyer
determines in its sole and absolute discretion, that the results of any Property
Studies are unsatisfactory, then Buyer will notify Seller that it is terminating
this Contract in which event
12
14
the Deposit, together with interest, will be returned to Buyer, and neither
party will have any further liability under this Contract, except that Buyer (i)
will indemnify and hold harmless Seller from and against any and all claims
arising from Buyer's entering upon the Property prior to Closing, and (ii)
return the Property to the original condition prior to Buyer's entrance.
B. During the Inspection Period, Seller will provide Buyer with
a schedule of Hotel Contracts and Leases together with copies of such documents.
Prior to the expiration of the Inspection Period, Buyer will prepare a schedule
of Hotel Contracts and Leases that it will assume.
C. Buyer acknowledges that the Seller will have to obtain
partner approvals. If Seller is unable to present evidence of such approvals to
Buyer within twenty (20) days of the Effective Date either party may terminate
this Agreement upon such termination the deposit will be returned to Buyer and
the parties will have no further obligations under this Contract.
8. "AS IS" "WHERE IS" SALE.
A. Notwithstanding anything to the contrary contained herein,
Buyer expressly understands, acknowledges and agrees that the conveyance of the
Property shall be made by Seller to Buyer on an "as is, where is" basis, and
"with all faults" with no right of set-off or reduction in the Purchase Price,
and Buyer acknowledges that Buyer has agreed (subject to the provisions hereof)
to buy the Property in its present condition, subject to reasonable use, wear,
tear and natural deterioration, and that Buyer is relying solely on its own
examination and inspections of the Property and not on any oral or written
statements or representations made by Seller or any agents or representatives of
Seller, except as specifically set forth herein. Additionally, Buyer hereby
acknowledges that, except as otherwise specified herein, Seller makes no
warranty or representation, express or implied, or arising by operation of law,
including, but in no way limited to, any warranty of condition, habitability,
merchantability or fitness for a particular purpose of the Property or any
portion thereof, or with respect to the economical, functional, environmental or
physical condition of the Property. Seller hereby specifically disclaims any
warranty, guaranty or representation, oral or written, past, present or
13
15
future, of, as to, or concerning: (a) the nature and condition of the Property
or any part thereof, including, but not by way of limitation, as to its water,
soil or geology, or the suitability thereof, for any and all activities and uses
which Buyer may elect to conduct thereon or which are presently conducted
thereon by Seller, or any improvements Buyer may elect to construct thereon, or
any income to derived therefrom or expenses to be incurred with respect thereto,
or any obligations or any other matter or thing relating to or affecting the
same; (b) the absence of any environmentally toxic or hazardous substances,
including, without limitation, asbestos, on, in or under the Premises or on, in
or under any property adjacent to or abutting the Premises; (c) the manner of
construction or condition or state of repair or lack of repair of any
Improvements constituting part of or located within the Premises; (d) the
condition of any of the FF&E or other tangible personal property; (e) the part
performance of or revenues or income from the Hotels or operating expenses; (f)
the nature, extent or effect of any easement, restrictive covenant,
right-of-way, lease, possession, lien, encumbrance, license, reservation,
condition or other similar matter pertaining to the Premises or any portion
thereof; or (g) the compliance of the Property or the rules, ordinances, or
regulations of any government or other body. Buyer acknowledges that Seller's
delivery of the Deeds at Closing shall fulfill all obligations of Seller
concerning the condition of and title to the Property, whether expressed or
implied.
B. Buyer, for Buyer and Buyer's successors in interest, releases
Seller from, and waives all claims and liability against Seller from, any
structural, physical or environmental condition at the Property and further
releases Seller from, and waives all liability against Seller attributable to,
the structural, physical and environmental condition of the Property, including
without limitation, the presence, discovery or removal of any hazardous
materials in, at, about or under the Property, or for, connected with or arising
out of any and all claims or causes or action based upon CERCLA (Comprehensive
Environmental Response, Compensation, and Liability Act of 1989, as amended by
XXXX (Superfund Amendment and Reauthorization Act of 1986 (and as the same may
be further amended from time) or any related claims or causes of action
14
16
or any other federal or state based statutory or regulatory causes of action for
environmental contamination in, at, about or under the Property.
C. Buyer agrees to assume all responsibilities with respect to
all Hotel Contracts and Leases. To the extent such Hotel Contracts and Leases
are not assignable, Buyer will take the economic benefit and undertake to carry
out Seller's obligations under such Hotel Contracts and Leases and indemnify
Seller with respect to such liabilities arising under such Hotel Contracts and
Leases.
D. Buyer is solely responsible for obtaining any resale
certificate, certificate of occupancy or any other approval or permit of any
nature whatsoever necessary for transfer, ownership, operation or occupancy of
the Property. In the event that any repairs or alterations necessary to obtain
the same that cost less than $100,000.00 in the aggregate, payment of such costs
will be a Closing cost payable by Seller pursuant to Section 3D. In the event
such cost is $100,000.00 or more either party may terminate this Agreement in
the same manner and with the same effect as set forth in Section 7.
9. CONDITIONS TO CLOSING. The obligations of Buyer are
conditioned upon the following:
A. The contingencies of Section 8 have been
satisfied.
B. All of Seller's material representations and
warranties are true or have not been breached, as the case may be as of the date
of Closing Date.
C. Buyer will have completed the purchase of lender
participant loans on terms satisfactory to Buyer.
If on the date set for Closing pursuant to Section 3
the above conditions have not been fully and unconditionally satisfied, Buyer
may terminate this Contract, in which event the Deposit, together with interest
will be returned to Buyer and neither party will have any further liability
under this Contract.
10. CONDEMNATION. If prior to Closing, there are any
condemnation proceedings or eminent domain proceedings pending or contemplated
against the Property, (other than
15
17
precedings with no substantial adverse affect on the Property) or the access to
the Property becomes subject to any restrictions (collectively "Condemnation
Proceedings"), Buyer may, either (a) terminate this Contract in the same manner
and with the same effect as a termination under Section 7 or (b) proceed to
Closing in which event Seller will assign to Buyer any award or settlement
whether or not made prior to Closing.
11. WARRANTIES AND REPRESENTATIONS. Hillsborough, Wellesley I,
and Multi-Wellesley, as to each of their Hotels, and except with respects to
matters within Buyer's knowledge, warrants and represents (subject to the
limitation set forth in Section 1C). that:
A. Except for partner approvals, Seller has the
power and authority to enter into this Contract and to consummate the
contemplated transactions and the execution and delivery of the Contract and the
performance by Seller of its obligations have been duly authorized and will not
violate or constitute an event of default under the terms or provisions of any
agreement, document or other instrument to which Seller is a party or by which
it is bound, or any law, statute, rule or regulation to which Seller is subject;
B. Other than as may have been received by Buyer as
managing agent, Seller has received no written notice of any actions, suits,
investigations or proceedings before any court, investigative body, governmental
department, commission, board, agency, bureau, or other governmental
instrumentality, concerning or affecting the Hotel;
C. Other than as may have been received by Buyer as
managing agent, Seller has received no written notice of any condemnation
proceedings or other similar proceeding is pending or, to the best of Seller's
knowledge, is threatened against the Property;
D. Other than as may have been received by Buyer as
managing agent, Seller has received no written notice that the Property is not
in compliance with applicable laws, rules, codes and regulations, and there are
no notices from any governmental entity of non-compliance with any applicable
laws, rules, codes or regulations with respect to all or any portion of the
Property;
16
18
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of
Seller's representations, warranties and covenants contained in this Contract
(a) are true and complete and have not been breached as of the Contract date,
(b) will be true and complete and will not be breached as of the date of
Closing, and will not survive the Closing.
13. DEFAULT.
A. Seller's sole remedy for Buyer's breach or default
under this Contract will be liquidated at and limited to the funds represented
by the Deposit, it being agreed between Seller and Buyer that any damages to
Seller would be speculative and cannot be determined at this time, provided
however that such limitation of Seller's remedy will not prevent Seller from
seeking damages for Buyer's failure or refusal to return the Property to
original condition prior to Buyer's entry thereon as provided under Section 7.
B. In the event of Seller's default, Buyer's only
remedy will be a suit for specific performance.
14. TAX REDUCTION PROCEEDINGS
Seller will be entitled to receive and retain the
proceeds from any real estate tax appeals or protests for taxes due and payable
prior to the year in which the Closing Date occurs. Seller will be entitled to
commence and/or continue to process any new or pending appeals or protests with
respect to taxes due and payable in the tax year in which the Closing Date
occurs, and the net proceeds from any such proceedings, after payment of
attorneys' fees and other costs and any amounts payable to third parties
including, but not limited to, legal fees and disbursements and consultant and
expert witness fees, will be prorated, as of the Closing Date, between the
parties when received. In the event Buyer files an appeal or protest with
respect to taxes due and payable for the tax year in which the Closing Date
occurs, the net proceeds from such proceedings, after payment of attorneys' fees
and other costs and any amounts payable to third parties including, but not
limited to, legal fees and disbursements and consultant and expert witness fees,
will be prorated, as of the Closing Date, between the parties when received.
Buyer and Seller will be entitled to any such proceeding after the Closing Date
and
17
19
neither party will settle any such appeal or protest relating to the tax year in
which the Closing Date occurs without the prior consent of the delayed or
conditioned. Promptly after Closing Buyer as managing agent will provide Seller
with a schedule of pending appeals. The provisions of this Section 15 will
survive Closing.
15. OPERATIONS PENDING CLOSING.
A. Seller agrees that, from the Effective Date to the date of
Closing it will not take any action to prevent its managing agent (subject to
the availability of cash) from:
(i) Operating and marketing the Property in the same
manner as prior to the execution hereof,
(ii) Maintaining the Property in the same condition as
exists as of the date hereof, including maintaining the inventories, supplies,
and Equipment at levels that exist as of the date hereof and not remove or
substitute any item of Equipment or other property from the Property;
(iii) Continuing to pay in a timely manner all taxes
relative to the operation and ownership of the Property; and
(iv) Making all payments, and perform, when due, all
of Seller's obligations under the Leases, and Hotel Contracts; and
B. Seller agrees that, from the Effective Date to the date of
Closing it will not (other than through the action of its managing agent):
(i) become a party to any service contract or
agreement or undertaking with respect to or affecting the Property which will
extend beyond the date of Closing without the prior written consent of Buyer,
not to be unreasonably withheld;
(ii) make or allow any material alteration to the
Property without the prior written consent of Buyer (except in emergency
circumstances), not to be unreasonably withheld;
(iii) allow any presently existing service contract or
agreement or undertaking with respect to or affecting the Property to lapse or
terminate (other than by stated maturity) without the prior written consent of
Buyer;
(iv) Enter into, or entertain, any negotiations,
discussions, or offers to purchase
18
20
with any person not a party to this Contract with respect to the sale, leasing,
conveyance, or other transfer of the Property, or any portion thereof, so long
as this Contract remains in effect; and
(v) Enter into any lease, occupancy agreement, service
contract or use agreement for the Property, or any part thereof, which will
extend beyond the date of Closing without the prior written consent of Buyer, or
make or permit any material modification, renewal or other undertaking with
respect to any agreement affecting the Property existing as of the date hereof.
C. Buyer will arrange for necessary consents for the transfer
of any hotel franchises.
16. EMPLOYEES. Seller will be responsible for all salaries,
wages, accrued and earned vacation pay, payroll taxes and other employee
benefits through the Closing Date ("Pre-Closing Payroll Expenses"). Buyer, at
its option, may request an appropriate adjustment for Pre-Closing Payroll
Expenses and assume the obligation for the payment of Pre-Closing Payroll
Expenses. Buyer will give notices required by law.
17. RISK OF LOSS. The risk of loss for casualty or other
damage is assumed by Seller. Seller will promptly repair any casualty or damage
to the Hotel, provided that if the cost of repair costs in excess of $100,000
with respect to any one Hotel, Buyer may elect to terminate the Contract on five
(5) days written notice to Seller.
18. NOTICES. Any notice, approval, consent or other
communication ("Notices") permitted or required under this Contract will be
effective only if in writing and given by hand delivery or by mailing by
certified or by registered mail, postage prepaid, return receipt requested, or
by Federal Express, other comparable expedited mail service or Western Union
telegram to the addressee first set forth above or at such other addresses as
the party to be notified may from time to time designate by notice given in the
manner provided in this Section. Notices will be effective upon receipt, if hand
delivered, or upon deposit with Federal Express, other comparable expedited mail
service, Western Union or in the United States mail. Copies of all Notices to
Seller will be sent to Xxxx X. Xxxxxxx, Esq. Saiber, Schlesinger, Satz &
Xxxxxxxxx, Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000-0000 will be
similarly
19
21
sent to said party's named attorney.
19. INDEMNITIES
Buyer agrees that it will (using reputable and qualified
counsel approved by Seller) indemnify, defend, protect and hold Seller and its
agents, shareholders, directors, officers, employees and representatives
harmless from and against all actions, suits, claims, penalties, damages,
liabilities, costs and expenses including, without limitation, attorneys' fees,
costs and disbursements (collectively, "Losses"), based upon or arising out of:
(a) any and all matters relating to the use, operation or maintenance of the
Property or any portion thereof and arising prior to, on or after the Closing
Date (including, without limitation, the failure of Buyer to honor any Bookings,
or other existing arrangements and obligations for the use of any Hotel made
prior to the Closing Date in the ordinary course of business), (b) any claim for
personal injury or property damaged based on any event occurring on or about the
Property or any portion thereof and arising prior to, on or after the Closing
Date or in connection with Buyer's access to the Property or any portion thereof
in accordance with this Agreement prior to the Closing Date, (c) failure of
Buyer to timely pay all sums which are payable by Buyer hereunder and (d)
anyother matter whatsoever (including, without limitation, demands and actions
by tenants under the Leases or any vendors or suppliers of goods or services to
the Property after the Closing) relating to the Property or any portion thereof
with respect to the period on or after the Closing Date and arising on or after
the Closing Date.
20. XXXX-XXXXX-XXXXXX ACT. Buyer will notify Seller within
fifteen (15) days after the date hereof whether the within transaction is
subject to the reporting requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx"). If Buyer determines that the within
transaction is subject to such reporting requirements, then, by no later than
the first Business Day after the expiration of the Inspection Period and, if
Buyer has not terminated this Agreement as permitted in Section 5.C. hereof,
each of Seller and Buyer will file the notification and report forms with
respect to the transactions contemplated hereby required by the HSR Act and the
rules and regulations promulgated thereunder, and will
20
22
promptly take or cause to be taken all other actions necessary, proper or
advisable (not including the disposition of other assets owned by it) to cause
the waiting period under the HSR Act to have expired no later than three (3)
Business Days prior to the Closing Date. Filing fees will be at Seller's expense
under Section 3D.
21. SELLER'S COVENANT TO NOTIFY. Seller will immediately
provide Buyer with copies of any correspondence received from any governmental
agency with respect to the Property.
22. ASSIGNMENT; CAPTIONS; CONSTRUCTION; PLURALS. The captions
of this Contract are for convenience and reference only and in no way define,
describe, extend or limit the scope, meaning or intent of this Contract. This
Contract and any related instruments will not be construed more strictly against
one party then against the other by virtue of the fact that drafts may have been
prepared by counsel for one of the parties, it being recognized that this
Contract and any related instruments are the product of negotiations between the
parties and that both parties have contributed to the final preparation of this
Contract and all related instruments. This Contract will not be binding or
effective until properly executed and delivered by both Seller and Buyer.
Whenever the context of this Contract may require, any pronoun will include the
corresponding masculine, feminine and neuter form, and the singular form of
nouns and pronouns will include the plural. Neither Buyer nor Seller may assign
this Contract.
23. SEVERABILITY; ENTIRE AGREEMENT; COUNTERPARTS;
MODIFICATION. Invalidation of one or more of the provisions of this Contract
will in no way affect any other provision. This Contract contains the entire
agreement between the parties with respect to the Property and supersedes all
prior agreements between the parties respecting such matters. This Contract may
be executed in any number or counterparts, each of which will be deemed an
original, but all of which will constitute one and the same instrument. This
Contract may not be modified, discharged or changed in any respect whatsoever,
except by a further agreement in writing duly executed by the parties. A waiver
of any breach by any party will not be construed as a waiver of any rights or
remedies of any party or a waiver of any future breach.
21
23
24. RELATIONSHIP OF PARTIES; FURTHER INSTRUMENTS; NO THIRD
PARTY BENEFICIARIES. At the request of either party, at any time from time to
time before and after Closing, the other party will execute, acknowledge and
deliver all reasonable instruments requested by the other party in order to
carry out the purposes of this Contract. This Contract is intended to benefit
only the signatories, their successors, and permitted assigns and not any third
party and may be enforced only by the signatories, their successors, and
permitted assigns.
25. SUCCESSORS. This Contract will be binding upon and inure
to the benefit of the parties hereto and their respective heirs, administrators,
executors, personal representatives,
22
24
successors and assigns.
SELLER:
HILLSBOROUGH ASSOCIATES
By:
---------------------------------------------
, General Partner
MERIDEN HOTEL ASSOCIATES, L.P.
BY: FL MERIDEN, INC., GENERAL PARTNER
By:
---------------------------------------------
Xxxx Xxxxx, President
WELLESLEY I, L.P.
BY: FL-GP CORP., GENERAL PARTNER
By:
---------------------------------------------
Xxxx Xxxxx, President
MULTI-WELLESLEY LIMITED
PARTNERSHIP
BY: BGN FRANKLIN, INC., GENERAL PARTNER
By:
---------------------------------------------
Xxxxxx Xxxxxx, President
BUYER:
PRIME HOSPITALITY CORP.
By:
---------------------------------------------
23
25
SCHEDULE A
DESCRIPTION OF PROPERTY
HILLSBOROUGH ASSOCIATES MULTI WELLESLEY HOTELS
LIMTED PARTNERSHIP
Wellesley Inn Holiday Inn
00 Xxxxx Xxxxxxx Xxxx 000 Xxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000 Xxxxxxx, Xxxxxxxx 00000
Wellesley Inn Wellesley Inn
000 Xxxx Xxxxxxxxx Xxxx 00000 Xxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000 Xxxxxxx, Xxxxxxxx 00000
Wellesley Inn Wellesley Inn
1101 Dual Highway 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxx Xxxx 00000
Days Inn Wellesley Inn (Lakes)
0000 X"Xxxxx Xxxxxxx 0000 XX 000xx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000 Xxxxx, Xxxxxxx 00000
Wellesley Inn
0000 Xxxxx 0
Xxxxxxxx, Xxx Xxxx 00000
Wellesley Inn
0000 X. Xxxxxxxxxx Xxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Wellesley Inn (East)
0000 Xxxxxxxxx 0xx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxx 00000
Wellesley Inn (West)
0000 X. Xxxxx Xxxx 0
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Wellesley Inn
000 Xxxxx 00 Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
24
26
WELLESLEY I, L.P. AND MERIDEN HOTEL ASSOCIATES, L.P.
Wellesley Inn (North)
0000 Xxxx Xxxxx Xxxx
Xxxxxx, Xxx Xxxx 00000-0000
Wellesley Inn
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Wellesley Inn
0000 Xxxxx 00
Xxxxxx, Xxx Xxxxxx 00000
Wellesley Inn
000 XX 00xx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Wellesley Inn (Xxxxxxx)
00000 Xxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
25
