PURCHASE AGREEMENT
------------------
THIS PURCHASE AGREEMENT, dated as of the ___ day of ________ 2001,
between 3244 ASSOCIATES, a Pennsylvania limited partnership ( the "Seller"), and
HHLP VALLEY FORGE ASSOCIATES, a Pennsylvania 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 general
---------------------
partner 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 corporate or partnership 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 general partner thereof, in any
court of competent jurisdiction seeking (1) the liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of debts, of such
party or general partner, (2) the appointment of a receiver, custodian, trustee
or liquidator or such party or general partner or all or any substantial part of
its assets, or (3) 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 the Seller (a) assigns and the
Purchaser assumes the Leases, (b) assigns and the Purchaser assumes the
Operating Agreements that have not been canceled at Purchaser's request and (c)
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, Intangible Personal Property
and the Reservation System to the Purchaser's property manager, lessee or
designee.
"Closing" shall mean the closing of the sale and purchase 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 existing title owner
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 atatched
---------
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 the Sentinel Agency, 0000 Xxxxx Xxxxxx
---------------
Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, Telephone: 717/000-0000, Fax:
717/000-0000.
"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 June
-------------
1, 2001, 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 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 or the existing title owner 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
2
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
------
located at 000 Xxxxxxxx Xxxxxx, Xxxx Prussia, Upper Merion Township, Xxxxxxxxxx
County, Pennsylvania, more commonly known as the Sleep Inn & Mainstay Suites, as
more particularly described on 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 the existing title owner
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.
3
"Purchase Price" shall mean $9,444,545.00.
---------------
"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 one year,
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 all of the items required by Section
2.3(b), 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
a 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.
4
(d) Each party hereto and/or 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 Seller's rights under certain Agreement of Sale in connection
with the the Property for the Purchase Price and in accordance with the other
terms and conditions set forth herein.
2.2 Intentioanlly Omitted.
----------------------
2.3 Intentionally Omitted.
----------------------
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.
2.5 Payment of Purchase Price. The Purchase Price shall be paid to the
----------------------------
Seller in the following manner:
(a) At Closing, 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.
5
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.
6
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 has right, under certain Agreement
------------------------
of Sale, to acquire 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, have 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
7
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 the 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.
3.12 Condemnation Proceedings; Roadways. The Seller or the existing title
-----------------------------------
owner has not received notice of any condemnation or eminent domain proceeding
pending or threatened against the Property or any part thereof. The Seller or
the existing title owner 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
8
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 Aud1ting 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 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
--------------------
9
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.
3.20 Environmental.
-------------
(i) 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) 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, 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;
10
(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 (one on the beds, one on the shelves, and one-half in the laundry),
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, the Property shall be operated in compliance
with all laws and in the same manner as it was operated 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 caliber 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.
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
----------------
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.
11
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, p ding 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.
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 144
Associates, 344 Associates, 544 Associates and 644 Associates are the sole owner
12
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 or the existing title owners 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.
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
13
agreement from Choice Hotels International (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 Noncompetition. Neither Seller nor 144 Associates, 344 Associates, 544
--------------
Associates and 644 Associates , nor any of their officers or affiliates will
acquire, develop, manage, lease, operate, or have any interest in any hotel or
lodging establishment within a five(5) mile radius of 000 Xxxxxxxx Xxxxxx, Xxxx
xx Xxxxxxx, Xxxxxxxxxxxx for a period of five (5) years from the Closing Date.
This provision shall survive the Closing Date unless such provision is waived by
Purchaser.
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 June 1, 2001, 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 shall have the right, but not the obligation, to
extend the Closing Date, one or more times, but not beyond, August 1, 2001 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.
14
(vii) Xxxx of Sale for all Tangible Personal Property.
(viii) Deed.
(ix) 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) A11 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.
15
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, (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, and (iii) 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.
16
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 3.3. 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
17
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.
18
9.8 Notices. 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.
If to the Seller: Xxxxx X. Xxxxx
--------------------
Hersha Enterprises, Ltd.
000 Xxxxxxxx Xxxxx, Xxx X
Xxx Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
With a copy to:
------------------ -----------------------------
Lok Mohapatra, Esq.
XXXX XXX & XXXXX, LLP
Penn Mutual Towers
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Fax: 215/000-0000
If to the Purchaser:
-----------------------
Xxxx X. Xxxx
Hersha Hospitality Limited Partnership
000 Xxxxxxxx Xxxxx, Xxx X
Xxx Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
With a copy to:
-----------------
Lok Mohapatra, Esq.
XXXX XXX & XXXXX, LLP
Penn Mutual Towers
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Fax: 215/000-0000
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
19
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.
9.14 Like-Kind Exchange. Seller or Purchaser may desire to designate the
----
purchase or sale under this Agreement to exchange with one or more like-kind
exchange properties as contemplated by Section 1031 of the Internal Revenue Code
("Sec.1031"). If Seller or Purchaser so elects and provides notices of such
election to the other party, each party shall cooperate with the other in all
reasonable ways so that the conveyance of the Property, pursuant to this
Agreement, will qualify for nonrecognition treatment under Sec.1031. Without
limiting the generality of the preceding, each party shall consent to the
20
assignment of this Agreement and the conveyance of the Property prior to the
Closing to a third party, escrow agent, accommodation party, or qualified
intermediary as directed by the other party, and Purchaser shall pay the
purchase price to such person as directed by Seller. Notwithstanding the
preceding, in connection with any like-kind exchange, the nonelecting party
shall not be required to:
a. Incur any additional expense;
b. Incur any additional material obligation, such as assuming
indebtedness with respect to an exchange property; or
c. Take title to any property other than the Property.
The provisions of this Section 15 shall be interpreted to be consistent with
Sec.1031; in the event of any ambiguity, such ambiguous provisions shall be
interpreted so that the transaction contemplated by this paragraph and this
Agreement shall qualify for nonrecognition treatment under Sec.1031.
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.
SELLER:
3244 Associates, a Pennsylvania limited partnership
By: Xxxxxxxxxxx Enterprises, Ltd., a Pennsylvania
corporation, its sole general partner
By:
------------------------------------------
Xxxx X. Xxxx, President
21
PURCHASER:
---------
HHLP Valley Forge Associates,
a Pennsylvania limited partnership
Hersha Hopitality, LLC, a Virginia
limited liability company, its sole general partner
Hersha Hospitality Limited Partnership, a Virginia
limited partnership, its sole member
By: Hersha Hospitality Trust, a Maryland business
trust, its sole general partner
By:
-------------------------------------------
Xxxx X. Xxxx, President
22
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
23
EXHIBIT A
---------
Deed
24
EXHIBIT B
---------
Operating Agreements
25
------
EXHIBIT C
---------
Guest Ledger
26
EXHIBIT D
---------
Seller's Financial Information
27
EXHIBIT E
---------
Tangible Personal Property
28
