PURCHASE AND SALE AGREEMENT dated as of February 1, 2007 between BCM, LLC and HPS Seaport, LLC as Sellers, and SEAPORT HOSPITALITY, LLC as Purchaser IN CONNECTION WITH THE SALE AND PURCHASE OF Hampton Inn Seaport
AMENDED
AND RESTATED
dated
as
of February 1, 2007 between
BCM,
LLC
and
HPS
Seaport, LLC
as
Sellers,
and
SEAPORT
HOSPITALITY, LLC as Purchaser
IN
CONNECTION WITH THE SALE AND PURCHASE OF
Hampton
Inn Seaport
000
Xxxxx
Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000
This
PURCHASE AND SALE AGREEMENT, dated as of the 1st
day of
February, 2007, (the “Agreement”) between
BCM, LLC,
a New
York limited liability company (“Seller”), HPS Seaport, LLC, a New York limited
liability company (“Seller”), and
SEAPORT HOSPITALITY, LLC,
a New
York limited liability company, and its assignee or designee (collectively
“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 shall (a) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee or liquidator
of itself or of all or a substantial part of its property, (b) admit in
writing its inability to pay its debts as they become due, (c) make a
general assignment for the benefit of its creditors, (d) file a voluntary
petition or commence a voluntary case or proceeding under the Federal Bankruptcy
Code (as now or hereafter in effect), (e) be adjudicated a bankrupt or
insolvent, (f) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up or composition
or
adjustment of debts, (g) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case or proceeding under the Federal Bankruptcy Code (as now
or
hereafter in effect), or (h) take any action for the purpose of effecting
any of the foregoing; or if a proceeding or case shall be commenced, without
the
application or consent of a party hereto 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 , (2) the
appointment of a receiver, custodian, trustee or liquidator for such party
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.
“Agreement
Date”
shall
mean the date first written above in the preamble of this Agreement conditioned
upon the receipt of the Net Income data required pursuant to Section 2.2(h)
hereinunder.
“Apportionment
Date”
shall
mean the day immediately preceding the Closing Date.
“Assignment
and Assumption Agreement”
shall
mean that certain Assignment and Assumption Agreement, dated as of the Closing
Date by and between Seller and Purchaser, whereby Seller assigns and Purchaser
assumes all of Seller’s right, title and interest in, to and under all licenses,
contracts, leases, permits and agreements affecting the Property that Purchaser
has expressly agreed to assume in writing on or before the Closing Date.
“Authorizations”
shall
mean all licenses (including, without limitation, the beer and wine license
for
the Hotel, if any), 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.
“Brand”
shall
mean Hampton Inn.
“Closing”
shall
mean the closing of the sale and acquisition of the Property pursuant to
this
Agreement.
“Closing
Date”
shall
mean the date on which the Closing occurs.
“Consideration”
shall
mean Twenty Seven Million, Six Hundred Twenty Five Thousand Dollars
($27,625,000).
“Contract
Period”
shall
mean the period commencing on the Agreement Date and ending on the Closing
Date.
“Employees”
shall
mean the personnel employed to operate the Hotel.
2
“Employment
Agreements”
shall
mean any and all employment agreements, written or oral, between the Seller
or
its managing agent and any Employee.
“Escrow
Agent”
shall
mean Summit Associates, 000 Xxxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx
00000.
“Excluded
Assets”
shall
mean:
(a) all
cash,
bank accounts and money invested with financial institutions and other liquid
assets of the Seller;
(b)
any
interest in and to any refund of Taxes of the Seller for any period and any
interest in and to any refund of Taxes relating to the Hotel or its operations,
prior to the Closing;
(c)
all
credits, claims for refund, prepaid expenses, deferred charges, escrow accounts,
advance payments, security or other deposits, including recoverable deposits,
and prepaid items (and, in each case, security interests relating thereto)
arising from or in connection with, or related to, the Hotel, its contracts
or
assets;
(d)
all
claims or rights against any Person of the Seller arising prior to Closing
date;
(e)
all
insurance policies owned by the Seller and all rights, claims, proceeds and
causes of action of the Seller under insurance policies and all rights in
the
nature of insurance, indemnification or contribution relating to the Seller
or
its property, except as otherwise provided in this Agreement;
(f)
all
of
Seller’s rights under this Agreement and any other agreement to sell assets of
the Seller now existing or in the future and all cash and non-cash consideration
payable or deliverable to Seller pursuant to the terms and provisions hereof
and
thereof;
(g)
Seller’s
interest in any Lease or Operating Agreement that is not assumable by Purchaser
or that Purchaser elects not to assume;
(h)
all
items
listed on Exhibit G;
(i)
Seller’s
interest in any Employment Agreements;
3
(j)
any
balances in Lender retained escrows for taxes, insurance, FF&E Reserve and
other funds held by Lender; and
(k)
all
books
and records of the Seller that do not relate primarily to the Hotel, financial
statements, and accounting ledgers, records, and work-papers.
“Existing
Financing”
shall
mean, collectively, that certain financing by and among Seller and lender(s)
with existing mortgage(s) on the Property. Such Existing Financing shall
be
assumed in full by Purchaser at Closing. The Existing Financing on the property
is projected to total $19,250,000.00.
“Existing
Franchise License”
shall
mean the existing Franchise License, which is required under this Agreement
to
be maintained by Seller through the Closing Date.
“FF&E”
shall
mean all tangible property and fixtures (which are not part of the Real
Property) of any kind owned by Seller and attached to or located upon and
used
in connection with the ownership, maintenance, use or operation of the Hotel
as
of the date hereof (or acquired by Seller and so employed prior to Closing),
including, but not limited to, all furniture, fixtures, equipment, signs;
all
heating, lighting, plumbing, drainage, electrical, air conditioning, and
other
mechanical fixtures and equipment and systems; all copy machines, computers,
software, facsimile machines and other office equipment; all elevators,
escalators, and related motors and electrical equipment and systems; all
hot
water heaters, furnaces, heating controls, motors and boiler pressure systems
and equipment; all shelving and partitions; all ventilating equipment, and
all
incinerating and disposal equipment; all tennis, pool and health club and
fitness equipment and furnishings; all vans, automobiles and other motor
vehicles; all carpets, drapes, beds, furniture, furnishings, televisions,
telephones and similar property; all stoves, ovens, freezers, refrigerators,
dishwashers, disposals, kitchen equipment and utensils, tables, chairs, plates
and other dishes, glasses, silverware, serving pieces and other restaurant
and
bar equipment, apparatus and utensils; all audiovisual equipment, banquet
equipment and laundry equipment; exclusive of (a) any personal property leased
under the Operating Agreements, (b) items belonging to Hotel guests and tenants
under the rooms agreements, and (c) the items, if any, listed on Exhibit G,
which Exhibit shall be provided to Purchaser by Seller within fifteen (15)
business days of the Agreement Date and attached hereto.
4
FIRPTA
Certificate”
shall
mean the affidavit of the Seller under Section 1445 of the Internal Revenue
Code certifying that Seller is not a foreign corporation, foreign Seller,
foreign limited liability company, foreign trust, foreign estate or foreign
person (as those terms are defined in the Internal Revenue Code and the Income
Tax Regulations), in form and substance satisfactory to the Purchaser.
“Franchise
License”
shall
mean the license granted by the Franchisor enabling the Hotel to operate
under
the Brand.
“Franchisor”
shall
mean
Promus Hotels, Inc.
“Governmental
Body”
means
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign.
“Hotel”
shall
mean the 65-room hotel and related amenities located on the Land and operating
under the Brand.
“House
Banks”
shall
mean xxxxx cash funds and cashiers’ banks.
“Improvements”
shall
mean the Hotel and all other buildings, improvements, fixtures and other
items
of real estate located on the Land.
“Insurance
Policies”
shall
mean those certain policies of insurance described on Exhibit C
attached
hereto.
“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 (other than the Excluded Assets and the License), including,
without limitation, the Authorizations (to the extent transferable), Seller’s
interest in any Leases that Purchaser has agreed to assume, Seller’s interest in
any Operating Agreements that Purchaser has agreed to assume, Seller’s interest
in any construction, equipment, service or other types of guarantees and
warranties, general intangibles, business records, plans and specifications,
surveys pertaining to the real property, all other licenses which are
transferable, permits and approvals with respect to the construction, ownership,
operation, leasing, occupancy or maintenance of the Property, 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, excluding (a) the
Excluded Assets which shall be maintained and/or distributed to Seller prior
to
the Closing Date and (b) any of the aforesaid rights the Purchaser elects
not to acquire.
5
“Inventory”
or
“Inventories”
shall
mean all inventories of supplies of any kind owned by the Seller and used
in the
operation of the Hotel (irrespective of whether such are located on the premises
or stored off premises), including without limitation, all mattresses, pillows,
bed linens, towels, paper goods, soaps, cleaning supplies, foodstuff, beverage
inventories, utensils, and other such supplies.
“Knowledge”
shall
mean the actual knowledge of Xxxxxx X. Xxxxx and Xxxx X. Xxxx.
“Land”
shall
mean that certain portion of the Site that contains those Improvements necessary
for the existing operation of the Hotel.
“Leases”
shall
mean those leases of real property listed on Exhibit D
attached
hereto.
“Net
Income”
shall
mean hotel operating revenues, less hotel operating expenses (excluding reserve
contributions), less interest payments, less income taxes, less depreciation,
less amortization.
“New
Franchise License”
shall
mean the Franchise License that Purchaser or its affiliate shall enter into
with
Franchisor as a condition to Closing.
“Note
Payable”
shall
mean a legally enforceable promise by the Purchaser to the Seller to pay
a
certain amount of money in United States currency.
“Operating
Agreements”
shall
mean the service contracts, supply contracts, Space Leases, leases (other
than
the Leases) and other agreements, if any, in effect with respect to the
construction, ownership, operation, occupancy or maintenance of the Property.
All of the Operating Agreements in force and effect as of the date hereof
are
listed on Exhibit E
attached
hereto.
6
“Permitted
Title Exceptions”
shall
mean those exceptions to title to the Real Property waived by the Purchaser
under Section 2.2(c)(x) and as set forth on Exhibit J and are deemed
satisfactory to the Purchaser.
“Pre-Closing
Period”
shall
mean the period commencing on the Agreement Date through the earlier of
(i) the Closing Date or (ii) the date of termination of this Agreement
in accordance with the terms of this Agreement.
“Property”
shall
mean collectively the Land, Improvements, the Inventory, Systems, the Tangible
Personal Property and the Intangible Personal Property.
“Purchaser”
shall
mean SEAPORT HOSPITALITY, LLC and its assignee or designee.
“Real
Property”
shall
mean the Land and the Improvements.
“Seller”
shall
mean both BCM, LLC and HPS Seaport, LLC individually as well as collectively,
unless otherwise stated.
“Site”
shall
mean that certain parcel of real estate lying and being in the County of
New
York and located at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 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 Seller
therein, in the streets and ways adjacent thereto and in the beds thereof,
either at law or in equity, in possession or expectancy, now or hereafter
acquired.
“Space
Lease”
shall
mean a lease with a term in excess of 30 days between Seller and a third
party
for any portion of the premises that is used by the lessee for purposes other
than those necessary for the operations of a hotel. Examples of such uses
include a gift shop or rental car agency. A guestroom or meeting space rented
to
a third party shall only be considered subject to a Space Lease if the guestroom
or meeting space in question is being used for a purpose other than its intended
use as a guestroom or meeting space (for example, if the space is being used
as
office space).
7
“Systems”
shall
mean, without limitation, the equipment, supplies, licenses and software
required to operate the Franchise Licensor’s reservation system, the property
management system, point-of-sales system, telephone system, wireless or cabled
internet service system, back office system, fire-life safety system,
surveillance system, time clock system and other systems used in the marketing
or operations of the hotel, all of which include requisite cabling, user
manuals, warranty certificates, software and any written and any electronic
books and records produced by the Systems. Systems shall not include Seller’s
interest in any Operating Agreements applicable to a particular system that
is
not assumable or that the Seller has not agreed to assume.
“Tangible
Personal Property”
shall
mean the all tangible items of personal Property, other than the Excluded
Assets, used in or requisite to the operations of the Hotel, including, but
not
limited to all FF&E situated on, attached to, or used in the operation of
the Hotel.
“Target
Closing Date”
shall
mean the date set forth in Section 6.1.
“Termination
Fee”
shall
have the meaning set forth in Section 6.1(c) of this Agreement.
“Title
Commitment”
shall
mean the commitment by the Title Company to issue the Title Policy.
“Title
Company”
shall
mean Summit Associates, 000 Xxxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx
00000, as agent for First American.
“Title
Policy”
shall
mean a policy of title insurance with appropriate endorsements issued to
the
Purchaser by the Title Company, dated as of the Closing Date, 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. The Title Policy shall insure the Purchaser in the amount
of
the Consideration and shall be reasonably acceptable in form and substance
to
the Purchaser.
“Utilities”
shall
mean public sanitary and storm sewers, natural gas, telephone, public water
facilities, electrical facilities and all other utility facilities and services
necessary for the operation and occupancy of the Property as a
hotel.
8
|
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, subsections,
clauses
or exhibits are references to articles, sections, subsections,
clauses or
exhibits of this Agreement.
|
|
(c)
|
Headings
contained herein are solely for convenience of reference and shall
not
constitute a part of this Agreement nor shall they affect its meaning,
construction or effect.
|
|
(d)
|
Each
party hereto and its counsel have reviewed and revised (or requested
revisions of) this Agreement, and therefore any usual rules of
construction requiring that ambiguities are to be resolved against
a
particular party shall not be applicable in the construction and
interpretation of this Agreement or any exhibits
hereto.
|
|
(e)
|
Any
reference to a “business day” shall mean Monday through Friday, United
States federal and bank holidays
excepted.
|
|
(f)
|
Wherever
the word “including” is used in this Agreement, it shall be deemed to be
followed by the words “without
limitation”.
|
|
(g)
|
All
times designated in this Agreement shall refer to Eastern Daylight
Time or
Eastern Standard Time, as
applicable.
|
9
ARTICLE
2
PURCHASE
AND SALE;
PAYMENT
OF CONSIDERATION
|
2.1
|
Purchase
and Sale.
In consideration of the payment of the Consideration by Purchaser
to
Seller, other good and valuable consideration received by each
of the
parties hereto, and intending to be legally bound hereby, Seller
agrees to
sell, assign and transfer the Property to Purchaser and Purchaser
agrees
to purchase the Property, in accordance with the terms and conditions
set
forth herein. A complete list of the actual amounts due each individual
Seller after applying a credit against assumption of existing financing
is
attached hereto as Exhibit
K for BCM, LLC and Exhibit L for HPS Seaport, LLC.
|
|
(a)
|
The
Consideration shall be paid as follows:
|
| (i) |
Purchaser
shall receive a credit against assumption of existing financing.
This
credit is projected to be
$19,250,000.00.
|
|
(b)
|
After
taking into account any applicable adjustments pursuant to Section
6.1
below, the balance of the Consideration shall be paid by the Purchaser
as
follows:
|
|
(i)
|
Ninety-Eight
percent (98%) of the balance due shall be payable by Purchaser
to Seller
through issuance of a Note Payable. Payment of such Note Payable
must be
fulfilled by the Purchaser to the Seller either within seven (7)
calendar
days of Seller’s demand for payment, or if no such demand is made, then
the Note Payable shall be due one (1) year from its issuance. Purchaser
shall pay eight percent (8%) annual interest on the value of the
Note
Payable beginning on the Note Payable’s issuance date and ending on the
Note Payable’s payment date.
|
|
(ii)
|
The
Purchaser shall pay to the Seller the remaining two percent (2%)
of the
balance due in limited partnership units of Hersha Hospitality
Limited
Partnership. The price of the limited partnership units shall be
$11.15
per unit as determined by utilizing the five day volume weighted
average
closing price for Priority Class A Common Stock of Hersha Hospitality
Trust for the five (5) trading days beginning on January 25th,
2007 and ending on January 31st,
2007.
|
10
ARTICLE
3
SELLER’S
REPRESENTATIONS, WARRANTIES AND COVENANTS
To
induce
the Purchaser to enter into this Agreement and to purchase the Property,
each
Seller hereby makes the following representations, warranties and covenants,
upon each of which Seller acknowledges and agrees that Purchaser is entitled
to
rely and has relied upon:
|
3.1
|
Identity
and Power.
|
|
(a)
|
Each
Seller is and has all requisite powers and all governmental licenses,
authorizations, consents and approvals necessary to carry on its
business
as now conducted, to execute and deliver this Agreement and any
document
or instrument required to be executed and delivered on behalf of
the
Seller hereunder, to perform its obligations under this Agreement
and any
such other documents or instruments and to consummate the transactions
contemplated hereby; and
|
|
(b)
|
Each
Seller is a limited liability company duly organized, validly existing
and
in good standing under the laws of the State of New York, and has
all
requisite power and authority under the laws of such State and
under its
charter documents to conduct its business and enter into and perform
its
obligations under this Agreement and to consummate the transactions
contemplated hereby.
|
|
3.2
|
Authorization,
No Violations and Notices.
|
|
(a)
|
The
execution, delivery and performance of this Agreement by Seller,
and the
consummation of the transactions contemplated hereby have been
duly
authorized, adopted and approved by the Seller as necessary. No
other
Seller proceedings are necessary to authorize this Agreement and
the
transactions contemplated hereby. This Agreement has been duly
executed by
Seller and is a valid and binding obligation enforceable against
Seller in
accordance with its terms.
|
11
|
(b)
|
Neither
the execution, delivery, or performance by Seller of this Agreement,
nor
the consummation of the transactions contemplated hereby, nor compliance
by Seller with any of the provisions hereof,
will,
|
|
(i)
|
violate,
conflict with, result in a breach of any provision of, constitute
a
default (or an event, which, with the passage of time, the giving
of
notice, or both, would constitute a default) under, result in the
termination of, accelerate the performance required by, or result
in a
right of termination or acceleration, or the creation of any lien,
security interest, charge, or encumbrance upon any of the Property
or
assets of the Seller, under any of the terms, conditions, or provisions
of, the Certificate of Limited Partnership or Articles of Organization
or
Articles of Incorporation, as applicable, of such Seller, the Limited
Partnership Agreement or Operating Agreement, or Bylaws, as applicable,
license, lease, agreement, or other instrument, or obligation to
which the
Seller is a party, or by which the Seller may be bound, or to which
the
Seller or the Property or assets may be subject with the exception
of the
Existing Franchise License and the Existing Financing;
or
|
|
(ii)
|
violate
any judgment, ruling, order, writ, injunction, decree, statute,
rule, or
regulation applicable to the Seller or its Property or assets that
would
not be violated by the execution, delivery or performance of this
Agreement or the transactions contemplated hereby by the Seller
or
compliance by the Seller with any of the provisions
hereof.
|
|
(c)
|
The
Seller has conducted no business other than the ownership of the
Property.
|
|
3.3
|
Litigation
With Respect to Seller.
Except as set forth on Exhibit F
there is no action, suit, claim or proceeding pending, or to Seller’s
Knowledge, threatened against or affecting the Seller, any of the
Seller’s
assets, or any part of or interest in the Property in any court,
before
any arbitrator or before or by any governmental agency which (a)
in any
manner raises any question affecting the validity or enforceability
of
this Agreement or any other material 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 the Property, (c) could
materially
and adversely affect the ability of the Seller to perform its obligations
hereunder, or under any document to be delivered pursuant hereto,
or (d)
could create a lien on the Property.
|
12
|
3.4
|
Property.
The Property will be on the Closing Date, free and clear of all
liens and
encumbrances, except for the Permitted Title Exceptions, and the
Seller
has good, marketable title thereto and the right to convey same.
The
Seller is the fee simple owner of the Real Property and the sole
owner of
the Property.
|
|
3.5
|
Bankruptcy
with Respect to Seller.
No Act of Bankruptcy has occurred with respect to the
Seller.
|
|
3.6
|
Brokerage
Commission.
The Seller is wholly liable for any claims brought by 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.
|
|
3.7
|
Contracts
and Agreements.
There is no loan agreement, guarantee, note, bond, indenture and
other
debt instrument, lease and other contract to which the Seller is
a party
and which encumber the Property or by which its assets are bound
other
than the Permitted Title Exceptions, the Leases, the Operating
Agreements,
and the existing loan documents respecting the Existing Financing
(the
“Existing
Financing Documents”)
with Countrywide Financial (“Lender”),
provided that the Existing Financing shall be assumed in full by
Purchaser
at Closing. All loan assumption fees are to be paid by Purchaser.
|
|
3.8
|
No
Special Taxes.
The Seller has no Knowledge of, nor has received any written notice
of,
any special taxes or assessments relating to the Seller or Property
or any
part thereof or any planned public improvements that may result
in a
special tax or assessment against the
Property.
|
13
|
3.9
|
Compliance
with Existing Laws.
|
|
(a)
|
The
Seller possesses all Authorizations, each of which is valid and
in full
force and effect, and, to Seller’s Knowledge, no provision, condition or
limitation of any of the Authorizations has been breached or violated.
Seller has not misrepresented or, to its Knowledge, 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 result in their termination,
suspension,
modification or limitation.
|
|
(b)
|
The
Seller has no Knowledge, nor has it received written notice within
the
past three (3) years, of any existing 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.
|
|
3.10
|
Operating
Agreements.
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 material
default under any of the Operating Agreements. Without the prior
written
consent of the Purchaser, the Seller shall not enter into any new
management agreement, maintenance or repair contract, supply contract,
lease in which it is lessee or other agreements with respect to
the
Property (in all such cases, requiring payments by the owner of
the
Property in excess of $1,000 per year) that will be binding on
Purchaser
or the Property following the Closing, nor shall the Seller enter
into any
agreements modifying the Operating Agreements that will be binding
on
Purchaser or the Property following the Closing.
|
|
3.11
|
Warranties
and Guaranties.
The Seller shall not release or modify any warranties or guarantees,
if
any, of manufacturers, suppliers and installers relating to the
Improvements and the Tangible Personal Property or any part thereof,
except with the prior written consent of the Purchaser, which consent
shall not be unreasonably withheld, conditioned or delayed. A complete
list of all such warranties and guaranties in effect as of the
date of
this Agreement is attached hereto as Exhibit B.
|
14
|
3.12
|
Insurance.
All of the Seller’s Insurance Policies are valid and in full force and
effect and the Seller shall pay all future premiums for such policies
up
to the Closing Date (and any replacements thereof) on or before
the due
date therefor. The Seller shall pay all premiums on, and shall
not cancel
or allow to expire, any of the Insurance Policies prior to the
Closing
Date unless such policy is replaced, without any lapse of coverage,
by
another policy or policies providing coverage at least as extensive
as the
policy or policies being replaced.
|
|
3.13
|
Condemnation
Proceedings; Roadways.
The Seller has received no written notice of any condemnation or
eminent
domain proceeding pending or threatened against the Property or
any part
thereof. The Seller has no Knowledge of any change or proposed
change in
the route, grade or width of, or otherwise affecting, any street
or road
adjacent to or serving the Real
Property.
|
|
3.14
|
Labor
Disputes and Agreements.
There are not currently any labor disputes pending or, to 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. To the
Seller’s
Knowledge, there is no labor organizing activity, pending or threatened,
with respect to any workers of Seller. All of the employees of
the Seller
are at will employees.
|
|
3.15
|
Financial
Information.
Seller has provided to Purchaser financial information regarding
the
Property and the business operations of the Hotel, including profit
and
loss statements, occupancy reports and net income statements from
the date
the Hotel opened through the Closing Date. All of the foregoing
information has been prepared in conformity with generally accepted
accounting procedures and the Uniform System of Accounts for the
Lodging
Industry, and present fairly the results of operations by Seller
of the
Hotel. To the Seller’s Knowledge, except as otherwise disclosed in writing
to the Purchaser, for each of the accounting years, when a given
year is
taken as a whole, all of the Seller’s and the Property’s financial
information previously delivered or to be delivered to the Purchaser
is
and shall be correct and complete in all material respects.
|
15
|
3.16
|
Organizational
Documents.
The Seller’s organizational documents are in full force and effect and
have not been modified or supplemented, and to Seller’s Knowledge 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
|
Operation
of Property.
The Seller covenants that between the date hereof and the Closing
Date,
Seller shall or shall cause the Hotel management company to (a)
operate
the Property only in the usual, regular and ordinary manner consistent
with the Seller’s prior practice, (b) maintain the books of account and
records in the usual, regular and ordinary manner, in accordance
with
Seller’s accounting system, (c) use all reasonable efforts to preserve
intact the present business organization, (d) maintain the quality
and
condition of the Improvements and Tangible Personal Property in
the same
or better quality and condition as they are as of the date hereof,
and (e)
keep available the services of the present officers and employees
and
preserve their relationships with suppliers and others having business
dealings with them. The Seller shall continue to make good faith
efforts
to take guest room reservations and to book functions and meetings
and
otherwise to promote the business of the Property in generally
the same
manner as the Seller did prior to the execution of this Agreement.
Except
as otherwise permitted hereby, from the date hereof until Closing,
the
Seller shall not take any action or fail to take action the result
of
which would have a material adverse effect on the Property or the
Purchaser’s ability to continue the operation thereof after the Closing
Date in substantially the same manner as presently
conducted.
|
16
|
3.18
|
Hazardous
Substances.
Except for matters in Purchaser’s environmental reports and statements,
and except for cleaning, swimming pool and hot tub/whirlpool supplies
and
the like used in the ordinary course of the operations of the Hotel,
Seller has no Knowledge (a) of the presence of any “Hazardous
Substances”
(as defined below) on the Property, or any portion thereof, or,
(b) of any spills, releases, discharges, or disposal of Hazardous
Substances that have occurred or are presently occurring on or
onto the
Property, and or any portion thereof, or (c) of the presence of
any PCB
transformers serving, or stored on, the Property, or any portion
thereof,
or (d) of any failure to comply with any applicable local, state
and
federal environmental laws, regulations, ordinances and administrative
and
judicial orders relating to the generation, recycling, reuse, sale,
storage, handling, transport and disposal of any Hazardous Substances
(as
use herein, “Hazardous Substances” shall mean any substance or material
whose presence, nature, quantity or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect,
either by
itself or in combination with other materials is either:
(1) potentially injurious to the public health, safety or welfare,
the environment or the Property, (2) regulated, monitored or defined
as a hazardous or toxic substance or waste by any Governmental
Body, or
(3) a basis for liability of the owner of the Property to any
Governmental Body or third party, and Hazardous Substances shall
include,
but not be limited to, hydrocarbons, petroleum, gasoline, crude
oil, or
any products, by-products or components thereof, and asbestos and
mold).
|
|
3.19
|
Furnishings.
All public spaces, lobbies, meeting rooms, and each room in the
Hotel
available for guest rental are furnished in accordance with Franchisor’s
standards for the Hotel and room
type.
|
|
3.20
|
License.
|
|
(a)
|
The
Existing Franchise License is valid and in full force and effect,
and to
Seller’s Knowledge on the Closing Date, Seller will not be in default
with
respect thereto (with or without the giving of any required notice
and/or
lapse of time); however, the Existing Franchise License will not
be
transferable without Franchisor’s
consent.
|
|
(b)
|
Subject
to Purchaser obtaining a New Franchise License, neither the execution,
delivery, or performance by the Seller of this Agreement, nor the
consummation of the transactions contemplated hereby, nor compliance
by
the Seller with any of the provisions hereof, will violate, conflict
with,
result in a breach of any provision of, constitute a default (or
an event
that, with notice or lapse of time or both, would constitute a
default)
under, result in the termination of, or result in a right of termination
under any of the terms, conditions, or provisions of, the Existing
Franchise License.
|
17
|
3.21
|
Access
to Financial Information.
Subject to the other provisions of this Agreement (including Sections
2.2(b) and 3.15), Seller shall provide access to Purchaser’s
representatives to all financial and other information relating
to the
operations, maintenance and condition of the Property, and shall
provide
Purchaser with detailed financial reporting for the Hotel in Seller’s
possession. The parties acknowledge that Seller has no responsibility
or
liability for any information regarding the performance of the
Hotel prior
to Seller’s ownership.
|
|
3.22
|
Leases.
True, complete copies of the Leases, are attached as Exhibit D
hereto. The Leases are, and will at Closing be, in full force and
effect,
and to Seller’s Knowledge Seller is not in default under the Leases and
the Seller shall make good faith efforts not to be in default with
respect
thereto (with or without the giving of any notice and/or lapse
of time).
The Leases are, or will be at Closing, freely assignable by Seller
and
Seller will have obtained all consents of any third party necessary
to
assign the Leases to Purchaser.
|
|
3.23
|
Noncontravention.
Except as provided in the Franchise License with Licensor, and
the
Existing Financing, and except for non-transferable Authorizations,
the
execution and delivery of, and the performance by the Seller of
its
respective obligations under this Agreement do not and will not
contravene, or constitute a default under, any provision of applicable
law
or regulation, 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 or the
Property.
|
|
3.24
|
Sufficiency
of Certain Items.
The Property includes:
|
|
(a)
|
a
sufficient amount of furniture, furnishings, color television sets,
carpets, drapes, rugs, floor coverings, mattresses, pillows, bedspreads
and the like, of requisite quality and condition, to furnish each
guest
room in accordance with Franchisor’s standards;
and
|
18
|
(b)
|
An
amount of towels, washcloths and bed linens, so that there are
at least
two point five (2.5) par (as such term, “par” is commonly used in the
hotel industry) sets of towels, washcloths and linens for each
guest room,
together with a sufficient supply of paper goods, soaps, cleaning
supplies
and other such supplies and materials, as Licensor requires or
recommends
as part of the opening inventory for an identically Branded
hotel.
|
|
3.25
|
FF&E;
Fixed Asset Supplies and Inventories.
Attached hereto as Exhibit H
is
a listing of all FF&E, Fixed Asset Supplies and Inventories located at
the Hotel as of the date hereof. On or before the Closing Date
the
FF&E, Fixed Asset Supplies and Inventories shall be brought to the
levels required under Section 3.24
above.
|
ARTICLE
4
PURCHASER’S
REPRESENTATIONS, WARRANTIES AND COVENANTS
To
induce
the Seller to enter into this Agreement, the Purchaser hereby makes the
following representations, warranties and covenants, upon each of which the
Purchaser acknowledges and agrees that the Seller is entitled to rely and
has
relied upon:
|
4.1
|
Identity
and Power.
|
|
(a)
|
Purchaser
is and has all requisite powers and all governmental licenses,
authorizations, consents and approvals necessary to carry on its
business
as now conducted, to execute and deliver this Agreement and any
document
or instrument required to be executed and delivered on behalf of
the
Purchaser hereunder, to perform its obligations under this Agreement
and
any such other documents or instruments and to consummate the transactions
contemplated hereby; and
|
|
(b)
|
Purchaser
is a New York limited liability company duly organized, validly
existing
under the laws of the State of New York, and has all requisite
power and
authority under the laws of such State and under its charter documents
to
enter into and perform its obligations under this Agreement and
to
consummate the transactions contemplated hereby. Purchaser is in
good
standing as a limited liability company in the State of New
York.
|
19
|
4.2
|
Authorization,
No Violations and Notices.
|
|
(a)
|
The
execution, delivery and performance of this Agreement by Purchaser,
and
the consummation of the transactions contemplated hereby have been
duly
authorized, adopted and approved by the Purchaser as necessary.
No other
proceedings are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed by Purchaser
and is a valid and binding obligation enforceable against Purchaser
in
accordance with its terms. Purchaser is in possession of all third
party
consents required to execute this Agreement and to perform its
obligations
hereunder.
|
|
(b)
|
Neither
the execution, delivery, or performance by Purchaser of this Agreement,
nor the consummation of the transactions contemplated hereby, nor
compliance by Purchaser with any of the provisions hereof,
will.
|
|
(i)
|
result
in the termination of, accelerate the performance required by,
or result
in a right of termination or acceleration, or the creation of any
lien,
security interest, charge, or encumbrance upon the Purchaser or
assets of
the Purchaser, under any of the terms, conditions, or provisions
of, the
Articles of Organization of Purchaser, license, lease, agreement,
or other
instrument, or obligation to which the Purchaser is a party, or
by which
the Purchaser may be bound, or to which the Purchaser may be subject;
or
|
|
(ii)
|
violate
any judgment, ruling, order, writ, injunction, decree, statute,
rule, or
regulation applicable to the
Purchaser.
|
|
4.3
|
Noncontravention.
The execution and delivery of this Agreement 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
Purchaser.
|
20
|
4.4
|
Litigation.
There is no action, suit or proceeding, pending against the Purchaser,
or
Purchaser’s assets, 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 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 ability
of the Purchaser to perform its obligations hereunder, or under
any
document to be delivered pursuant hereto, or (c) could materially
and
adversely affect the financial position of the Purchaser.
|
|
4.5
|
Bankruptcy.
No Act of Bankruptcy has occurred with respect to the
Purchaser.
|
|
4.6
|
No
Brokers.
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
obligations of Seller and Purchaser hereunder are subject to the satisfaction
of
the following conditions precedent and the compliance by the Seller and
Purchaser, as applicable, with the following covenants:
|
5.1
|
Seller’s
Deliveries.
The Seller shall have delivered to the Escrow Agent or the Purchaser,
as
the case may be, 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 Parties;
Certificate.
All of the Seller’s representations and warranties made in this Agreement
shall be true and correct as of the date hereof and as of the Closing
Date
as if then made, the Seller shall have performed all of its material
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. All of the Purchaser’s representations and
warranties made in this Agreement shall be true and correct as
of the date
hereof and as of the Closing Date as if then made, the Purchaser
shall
have performed all of its material covenants and other obligations
under
this Agreement, and the Purchaser shall have executed and delivered
to the
Seller at Closing a certificate to the foregoing
effect.
|
21
|
5.3
|
Title
Insurance.
Purchaser shall have received a title policy from the Title Company
insuring good and indefeasible fee simple title to the Real Property
issued by the Title Company at or below its regularly scheduled
rates
subject only to Permitted Title Exceptions as determined in accordance
with Section 2.2.
|
|
5.4
|
Condition
of Improvements.
The Improvements and the Tangible Personal Property shall be in
the same
condition at Closing as they are as of the date hereof, reasonable
wear
and tear excepted. Except for the Excluded Assets which shall be
distributed to the Seller prior to the Closing Date, 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 condition and acceptable to the
Purchaser.
|
|
5.5
|
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.
|
|
5.6
|
License.
From the date hereof to and including the Closing Date, Seller
shall
comply with and perform all of the duties and obligations of licensee
under the Franchise License and Seller shall not be in default
under the
Franchise License.
|
|
5.7
|
Franchise
License Contingency.
As a condition to Closing, Franchisor shall approve and grant a
New
Franchise License to Purchaser or its affiliate or subsidiary.
Purchaser
shall be responsible for obtaining, and shall use diligent efforts
to
obtain a New Franchise License respecting the Hotel, provided that
Seller
shall use its best efforts in assisting Purchaser in obtaining
a New
Franchise License, and shall fully cooperate with Purchaser’s application
and pursuit of the same with Franchisor. In the event that Purchaser
is
unable to obtain a New Franchise License on or before the Target
Closing
Date (or for purpose of option (ii) below on or before the expiration
of any of the applicable extension periods) then either (i) Purchaser
may elect to extend the Closing Date for up to three thirty (30)
day
periods after the Target Closing Date, during which period Purchaser
shall
diligently strive to secure a New Franchise License or
(ii) Purchaser, at Purchaser’s sole option, may elect to terminate
this Agreement.
|
22
|
5.8
|
Existing
Financing.
Purchaser will assume the Existing Financing upon completion of
the
Closing Process. Purchaser will pay all loan assumption costs in
assuming
the Existing Financing.
|
|
5.9
|
Existing
Management Agreement.
Seller shall cause the existing management agreement for the Hotel
to be
terminated on the Closing Date, and Seller shall be responsible
for all
fees and costs associated with such
termination.
|
|
5.10
|
Liquor
License.
Intentionally Deleted.
|
|
5.11
|
Property.
The Property shall be free and clear of all liens and encumbrances,
except
for the Permitted Title Exceptions.
|
|
5.12
|
Hotel
Employees.
On the Closing Date, the Seller shall or shall cause the employer
of the
Hotel Employees, to terminate the employment of all Hotel Employees.
Purchaser shall have no obligation to hire the Hotel Employees.
The
provisions of this Section 5.12 shall survive the Closing. Sellers
shall have sole and exclusive responsibility for any compliance,
including
all applicable notices, with the requirements, if any, of the Worker
Adjustment and Retraining Notification
Act.
|
|
5.13
|
Right
to Audit.
For two years following the Closing Date, Purchaser shall have
the right,
at its expense, to audit the books, records, financials, and financial
control procedures of the Seller with respect to the Hotel for
any portion
of the 24 months preceding the Closing Date. This right shall survive
Closing.
|
ARTICLE
6
CLOSING
|
6.1
|
Closing
|
|
(a)
|
Closing
shall be held at a location that is mutually acceptable to the
parties or
may be conducted via telephone, facsimile and overnighted escrow
documents. The date that Closing is expected to occur is March
31, 2007
(“Target
Closing Date.”)
|
23
|
(b)
|
In
the event of a termination, the parties shall have no further obligations
to one another under this Agreement except those which expressly
survive
termination.
|
|
6.2
|
Seller’s
Deliveries.
At Closing, the Seller shall deliver to Purchaser or the Escrow
Agent 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:
|
|
(a)
|
Bargain
and Sale Deed with covenants against Grantor’s Acts conveying fee simple
title of the Real Property to Purchaser (“Deed”).
|
|
(b)
|
The
Assignment and Assumption
Agreement.
|
|
(c)
|
The
FIRPTA Certificate.
|
|
(d)
|
True,
correct and complete copies of all warranties, if any, of manufacturers,
suppliers and installers possessed by the Seller and relating to
the
Improvements and the Personal Property, or any part
thereof.
|
|
(e)
|
The
certificate required by Section 5.2.
|
|
(f)
|
Appropriate
consent of the Seller, authorizing (A) the execution of any documents
to be executed and delivered by the Seller prior to, at or otherwise
in
connection with Closing and in connection with the transactions
contemplated by this Agreement, and (B) the performance by the Seller
of its obligations hereunder and under such
documents.
|
|
(g)
|
Valid,
final and unconditional certificate(s) of occupancy for the Real
Property
and Improvements, issued by the appropriate Governmental
Body.
|
|
(h)
|
All
current real estate and personal property tax bills in the Seller’s
possession or under its control.
|
|
(i)
|
A
set of all guest registration cards, guest transcripts, guest histories,
and all other available guest
information.
|
24
|
(j)
|
A
list of advance room reservations, functions and the like, in reasonable
detail so as to enable the Purchaser to honor the Seller’s commitments in
that regard.
|
|
(k)
|
All
keys for the Property.
|
|
(l)
|
To
the extent not previously delivered to Purchaser, all books, records,
operating reports, appraisal reports, files and other materials
relating
to the Hotel in the Seller’s possession or
control.
|
|
(m)
|
Such
proof, reasonably acceptable to the Seller evidencing the payment
by
Purchaser and Seller of all transfer taxes, if any, incurred in
connection
with the transactions contemplated by this Agreement.
|
|
(n)
|
An
updated schedule of employees of the Seller or its hotel manager,
showing
salaries and duties with a statement of the length of service of
each such
employee, brought current to a date not more than 48 hours prior
to the
Closing.
|
|
(o)
|
Xxxx
of Sale conveying the Seller’s interest in the Intangible Personal
Property and Tangible Personal
Property.
|
|
(p)
|
Written
evidence of Seller’s satisfaction of all Monetary Liens (except the
Existing Financing).
|
|
(q)
|
A
tax clearance certificate (or similar evidence) from the New York
Department of Taxation and Finance concerning taxes for the Property,
and
an escrow of funds in the amount of all sales taxes owed by Seller,
if
any.
|
|
(r)
|
Real
estate transfer tax forms required by law in connection with the
sale of
the Land.
|
|
(s)
|
Any
other document or instrument reasonably requested by the Purchaser,
the
Title Company, or required
herein.
|
25
|
6.3
|
Purchaser’s
Deliveries.
At Closing, the Purchaser shall pay or deliver to the Seller or
the Escrow
Agent the following:
|
|
(a)
|
The
Consideration, paid in accordance with the provisions set forth
in this
Agreement;
|
|
(b)
|
The
Assignment and Assumption
Agreement;
|
|
(c)
|
Appropriate
consent of the Purchaser, authorizing (A) the execution of any
documents to be executed and delivered by the Purchaser prior to,
at or
otherwise in connection with Closing and in connection with the
transactions contemplated by this Agreement, and (B) the performance
by the Purchaser of its obligations hereunder and under such documents;
and
|
|
(d)
|
Intentionally
Deleted
|
|
(e)
|
Any
other document or instrument reasonably requested by the Seller,
the Title
Company, or required hereby.
|
|
6.4
|
Closing
Costs.
Real
estate transfer taxes due with respect to the transfer of the Property
and
any and all other taxes shall be paid by the Purchaser. All filing
fees,
recording or other similar taxes due with respect to the transfer
of the
Property shall be paid by Purchaser. All charges for title insurance
premiums shall be paid by Purchaser. All fees and costs associated
with
the satisfaction and/or termination of the Existing Financing shall
be
paid by the Purchaser.
All charges for title insurance premiums shall be paid by Purchaser
and
Purchaser shall also pay all other of its own closing costs, including
without limitation, all costs of settlement, all costs and fees
for title
examination, and survey costs. All fees and costs associated with
the
assumption of the Existing Financing by the Purchaser shall be
paid by
Purchaser. All fees and costs associated with the transfer of the
franchise license shall be paid by Purchaser. Each party shall
pay their
own attorney’s fees.
|
26
|
6.5
|
Apportionments
and Other Economic Adjustments.
|
|
(a)
|
Items
to be Apportioned.
The following shall be prorated and apportioned between Seller
and
Purchaser as of 11:59 P.M. on the Apportionment
Date,
except as otherwise expressly provided to the contrary
below:
|
|
(i)
|
Property
Taxes.
Real estate taxes, ad valorem taxes, if any, personal property
taxes, if
any, special assessments, sewer rents and taxes, and any other
governmental tax or charge levied or assessed against the Property
(collectively, the “Property
Taxes”),
shall be apportioned on the basis of the respective periods of
ownership
of the Property by Seller and Purchaser. If the Closing Date shall
occur
either before an assessment is made or a tax rate is fixed for
the tax
period in which the Closing occurs, the apportionment of such Property
Taxes shall be calculated on the basis of the prior year’s Property Taxes,
but, after the assessment and tax rate for the current year are
fixed, the
apportionment thereof shall be recalculated and Seller or Purchaser,
as
the case may be, shall promptly pay to the other the amount determined
to
be due based on such recalculation.
|
|
(ii)
|
Utilities.
The Utilities shall be apportioned (i) by having the utility
companies servicing the Property make final meter readings on the
Apportionment Date, the payment of which shall be Seller’s responsibility,
or (ii) if such readings cannot be obtained, on the basis of the most
recent bills that are available, reasonably adjusted (if necessary)
to
reflect any changes in occupancy, temperature or other relevant
variables
between the respective periods covered by such bills and the most
recent
relevant at period, to the extent such changes would have a material
impact on the amount of the estimated charges for the most recent
period
for the utility in question. If the apportionment is not based
on an
actual current reading, then, upon the taking of a subsequent actual
reading, or upon receipt of a subsequent xxxx, such apportionment
shall be
recalculated and Seller or Purchaser, as the case may be, shall
promptly
pay to the other the amount determined to be due upon such recalculation.
Purchaser shall be under no obligation to assume or reimburse Seller
for
any utility deposits made by Seller, provided that, in the event
Purchaser
either receives the monetary benefit of such deposit or a credit
from the
applicable utility company for such deposit or, at its sole discretion,
assumes utility a deposit made by Seller, Purchaser shall credit
Seller
the amount of such monetary benefit, credit or assumed utility
deposit, as
applicable, at Closing. In the event Purchaser elects not to assume
a
utility deposit made by Seller and does not receive a credit or
monetary
benefit from the utility company for such utility deposit made
by Seller,
the collection of such deposit shall be Seller’s sole
responsibility.
|
27
|
(iii)
|
Licenses.
Prepaid fees or other charges for transferable licenses agreed to be
assumed by Purchaser, if any, shall be apportioned on the basis
of the
respective periods of ownership of the Property by Seller and Purchaser,
but all amounts refundable under unassigned or unassignable licenses
shall
remain the property of Seller. Purchaser shall reimburse the Seller
for
actual and substantiated out-of-pocket costs expended by the Seller
from
the Agreement Date through the Apportionment Date in order to obtaining
signage from the New York State Department of Transportation. These
costs
are not expected to exceed $20,000 and shall result in the signage
be
delivered in May 2007. Should the out-of-pocket costs exceed $20,000
(or
should the Seller become aware of a circumstance that would lead
Seller to
expect that the costs will exceed $20,000), Seller shall secure
the
consent of the Purchaser prior to expending or committing to expend
over
$20,000.
|
|
(iv)
|
Operating
Agreements and Leases.
Amounts paid or payable under the Operating Agreements and Leases
agreed
to be assumed by Purchaser hereto shall be apportioned on the basis
of the
period covered by such payments.
|
28
|
(v)
|
Revenues.
All revenues (whether collected or not) from the rental of guestrooms
and
from food and beverage and other sales or services posted to a
guest room
account through 11:59 pm on the Apportionment Date shall belong
100% to
Seller. After this time all revenues from the rental of guestrooms
and
from food and beverage and other sales or services posted to a
guest room
account shall belong to Purchaser. For purpose of these apportionments,
the hotel personnel shall promptly post all charges as they are
incurred.
Guestroom rental charges of those guests who check-in on the Apportionment
Date shall be deemed incurred at check-in. Revenues from any meeting
room
occupied, but vacated prior to midnight of the Apportionment Date
shall
belong to Seller. Revenues from any meeting room that was not occupied
until after this time shall belong to Purchaser. Revenues for any
meeting
room that was occupied by the same customer on both the Apportionment
Date
and the Closing Date shall be allocated between the Seller and
Purchaser
based on the number of hours on each such date that the room was
occupied
and unavailable for rental to other customers.
|
|
(vi)
|
Space
Leases.
All rents and other charges paid or payable to Seller pursuant
to Space
Lease, if any, shall be apportioned as of the Apportionment Date.
At the
Closing, Seller shall furnish to Purchaser a schedule of all minimum
rents
and other monthly charges, and an estimate of any percentage rents
and
other variable charges under the Space Leases (including the current
month), which rents and charges are then due and payable but remain
unpaid
(in the case of minimum rents and fixed charges) or which have
accrued but
have not been billed or paid (in the case of percentage rents and
other
variable charges) and Seller shall receive a credit for all such
unpaid
rents and charges accrued (or estimated to have accrued) through
the
Apportionment Date, provided that no credits shall be given to
Seller for
any unpaid minimum rents or fixed charges that are more than one
(1) month
overdue. If any payments of rent or other fixed charges are received
by
Seller after the Closing which are payable to Purchaser by reason
of this
allocation, such sum shall be promptly paid by Seller to Purchaser.
Percentage rents and other variable charges under the Space Leases,
which
are not fixed in amount, shall be apportioned based on a reasonable
estimate by Seller, but, when the actual amounts are determined,
the
apportionment thereof shall be recalculated and Seller or Purchaser,
as
the case may be, shall adjust to the extent necessary by making
an
appropriate payment to the other based on such recalculation.
|
29
|
(vii)
|
Sales
Taxes.
All sales, use and occupancy taxes, if any, due or to become due
in
connection with revenues from the Hotel apportioned or allocated
to Seller
in accordance with Section 6.5(v) shall
be paid by Seller, and all sales, use and occupancy taxes due or
to become
due in connection with revenues apportioned or allocated to Purchaser
in
accordance with Section 6.5(v) shall
be paid by Purchaser. Seller and Purchaser shall each indemnify
the other
from and against any liability for unpaid sales, use or occupancy
tax
resulting from the indemnifying party’s failure to make the payments
required under this
Section 6.5(viii).
|
|
(b)
|
Receivables.
Seller, at its sole option, may require Purchase to purchase the
entire
book of accounts receivable under the following
formula:
|
|
Account
Aging at Closing
|
Purchase
Price
|
|
|
0-45
days
46-90
days
91
days and beyond
|
90%
of Account Balance
25%
of Account Balance
0%
of Account Balance
|
If
Seller
does not choose to sell the entire book of accounts receivables to Purchaser,
Purchaser shall not be obligated to collect any accounts receivable for Seller,
except that in the first two billing cycles following closing, Purchaser
shall
reasonably cooperate with Seller in its efforts to collect receivables from
accounts which owe a receivable balance to the Seller and Purchaser, it being
understood that in all instances, Purchaser shall prioritize its interest
above
those of the Seller. Notwithstanding anything to the contrary in this Agreement
if Purchaser receives checks for payment of a receivable owned by Seller,
Purchaser shall promptly forward same to Seller.
30
|
(c)
|
House
Banks.
Purchaser shall have the option, at its sole discretion, to purchase
the
House Banks, provided Purchaser, if it chooses to do so, shall
only
purchase cash on hand and shall in no event purchase any receipts.
|
|
(d)
|
Employee
Wages and Other Compensation.
On or before the Closing Date, Seller shall pay or cause to be
paid (i)
all unpaid wages or salaries (including any earned but unused vacation
days accrued, irrespective of whether such vacation days are actually
vested) of the Employees; (ii) any employment taxes or government
levies
on item (i) above; and (iii) any retirement plan payments, medical
insurance payments or other similar deductions. Hereinafter, (i)
through
(iii) above shall be referred to as the “Seller’s
Employee Payment.”
Seller shall be responsible for Seller’s Employee Payment accruing
(i) through the Closing Date for housekeeping and laundry service
employees, (ii) through the posted check-out time for front desk
employees, (iii) through 7:00 am on the Closing Date for the night
auditor and security force, and (iv) through 11:59 pm on the
Apportionment Date for all other Employees. From these timeframes
forward,
Purchaser shall be responsible for these expenses.
|
|
(e)
|
Reconciliation
and Final Payment; Intent of Section.
Seller and Purchaser shall cooperate after Closing to make a final
determination of the prorations and adjustments required hereunder
as soon
as reasonably practicable, but in no event later than ninety (90)
days
after the Closing Date (except with respect to any item which is
not
determinable within such time frame, as to which the time period
shall be
extended until such item is determinable). Upon the final reconciliation
of the prorations and adjustments under this Section 6.5,
the party which owes the other party any sums hereunder shall pay
such
party such sums within ten (10) days after the reconciliation thereof.
It
is the intent of the parties that all items herein which are subject
to
apportionment shall, except as otherwise specifically provided
in
Section 6.5,
result in Seller receiving all of the economic benefits and burdens
of the
Hotel with respect to the period prior to the Closing Date, and
Purchaser
receiving all of the economic benefits and burdens of the Hotel
with
respect to the period from and after the Closing
Date.
|
31
|
(f)
|
Seller’s
Acknowledgement.
It is expressly acknowledged and agreed by Seller that Purchaser
has no
intention of assuming, and does not and will not, in any way, assume,
undertake, agree to perform or accept responsibility for any debts,
liabilities or obligations of Seller of any kind whatsoever, whether
absolute, contingent or otherwise, known or unknown, pending or
threatened, concerning the Property or otherwise, other than liabilities
and obligations that Purchaser expressly assumes under the terms
of this
Agreement or under any of the documents executed by Purchaser at
the
Closing. Seller shall remain fully and solely responsible for the
satisfaction of all of Seller’s own liabilities and obligations, absolute,
contingent or otherwise, known or unknown, liquidated or unliquidated,
pending or threatened, whether incurred before or after the Closing
Date,
except as aforesaid. Likewise, Seller shall not assume or be liable
for
any liabilities of Purchaser from and after the date of Closing,
and
Purchaser shall remain fully and solely responsible and liable
for the
same.
|
|
(g)
|
Accounts
Payable.
Seller shall retain and be responsible for the payment of all accounts
payable and other debts and liabilities of Seller or otherwise
relating to
the Hotel, which have accrued prior to the Closing, whether or
not
invoiced (the “Accounts
Payable”),
except to the extent Purchaser has received a credit for any such
item
under Section 6.5
of
this Agreement. The parties acknowledge and agree that except as
may be
expressly set forth in this Agreement, Purchaser is in no way assuming
any
responsibility for the payment of any Accounts Payable of Seller.
|
|
(h)
|
Seller’s
Indemnity.
Seller shall and hereby agrees to defend, indemnify and hold harmless
Purchaser, its successors and assigns, from and against any and
all loss,
damage, cost, claim, liability or expense (including court costs
and
reasonable attorneys’ fees) suffered or incurred by Purchaser as a result
of Seller’s failure to pay any Accounts Payable or any sales, use or
occupancy taxes due in connection with the rental of rooms or the
sale of
goods prior to the Closing Date, the performance of services prior
to 4:00
am on the Closing Date, except to the extent Purchaser has received
a
credit therefor against the Consideration pursuant to this Agreement
or to
the extent of any sales, use or occupancy tax due in connection
with any
Accounts Receivable purchased by Purchaser.
|
32
|
(i)
|
Purchaser’s
Indemnity.
Purchaser shall and hereby agrees to defend, indemnify and hold
harmless
Seller, its successors and assigns, from and against any and all
loss,
damage, cost, claim, liability or expense (including court costs
and
reasonable attorneys’ fees) suffered or incurred by Seller as a result of
Purchaser’s failure to pay any Accounts Payable after Closing, or any
sales taxes owed in connection with the transfer of the Tangible
Personal
Property, or any sales, use or occupancy taxes due in connection
with the
rental of rooms or the sale of goods arising out of any liability
or
obligation expressly assumed by Purchaser hereunder or in any agreement
executed and/or delivered at the Closing, or resulting from Purchaser’s
failure to pay any item for which it received a credit against
the
Consideration under this Agreement, or resulting from the operation
of the
Hotel subsequent to Closing.
|
|
(j)
|
Survival.
The provisions of this Section 6.5
shall survive the Closing for a period of six (6)
months.
|
33
|
6.6
|
Safes
and Baggage.
|
|
(a)
|
Safes.
On the Closing Date Seller shall cause the delivery to Purchaser
of all of
Seller’s keys to all safes and safe deposit boxes (collectively, the
“safes”)
at the Property. On or prior to the Closing Date, Seller shall
give
written notices to those persons who have deposited items in any
central
safes (excluding in-room safes), advising them of the sale of the
Hotel to
Purchaser and requesting the removal or verification of their contents
in
the safes on the Closing Date. All such removals or verifications
on the
Closing Date shall be under the supervision of Seller’s and Purchaser’s
respective representatives. All contents which are to remain in
the safes
shall be recorded. Items belonging to guests who have not responded
to
such written notice by so removing or verifying their safe contents
by the
end of the day shall be recorded in the presence of the respective
representatives. Any such contents so verified or recorded and
thereafter
remaining in the hands of Purchaser shall be the responsibility
of
Purchaser and Purchaser hereby agrees to indemnify, defend and
hold Seller
harmless from any liability therefor. Seller hereby agrees to indemnify
and hold Purchaser harmless from any liability arising from claims
by
guests for any loss of contents in the safes not verified or recorded
on
the Closing Date.
|
|
(b)
|
Baggage.
On the Closing Date representatives of Purchaser and Seller shall
take an
inventory of all baggage, valises and trunks checked or left in
the care
of Seller at the Property. From and after the Closing Date, Purchaser
shall be responsible for all baggage listed in said inventory and
Purchaser hereby indemnifies and agrees to hold Seller harmless
from any
liability therefor. Seller shall remain liable for any negligence
or
malfeasance with respect to such baggage which occurred prior to
the
Closing Date as well as for claimed omissions from said inventory,
and
hereby indemnifies and agrees to hold Purchaser harmless from any
liability therefor.
|
34
|
6.7
|
Pre-Closing
Interim Operation.
|
|
(a)
|
Seller
hereby covenants and agrees that between the date of this Agreement
and
the Closing, Seller shall use commercially reasonable efforts to
cause the
Hotel to be operated and maintained consistent with prior practice,
it
being understood that the termination of the existing franchise
may have
negative repercussions on the performance of the Hotel. Until the
Closing
Date, Seller shall be permitted to terminate or modify existing
Leases,
Operating Agreements and room agreements, and to enter into new
leases,
service contracts and room agreements on commercially reasonable
terms
only with the prior written consent of Purchaser, which consent
shall not
be unreasonably withheld, conditioned or delayed; provided, however,
that
no such consent shall be required in the case of a lease, service
contract
or room agreement which is terminable without penalty on not more
than
thirty (30) days notice. If Purchaser fails to respond to a written
request for consent within seven (7) days after receipt of such
request,
such consent shall be deemed given. Seller shall provide Purchaser
with
copies of any such terminations and modifications, and new leases,
service
contracts and agreements promptly after the execution thereof.
Except in
the ordinary course of business, Seller shall not transfer to any
third
party or remove any FF&E from the Hotel after the date hereof, except
for repair or replacement thereof with items of substantially similar
quality. Seller will not take any action which will adversely affect
title
to the Property or cause the representations and warranties set
forth in
Article III
above to be untrue as of the Closing
Date.
|
|
(b)
|
Contract
Defaults.
If Seller shall receive written notice of any default under any
lease,
service contract or room agreement, including, without limitation
any
Operating
Agreement, Lease or Space Lease,
Seller shall promptly deliver a copy of said notice to
Purchaser.
|
35
|
(c)
|
Transition
of Management, Communications with Employees.
Seller shall permit Purchaser’s transition management team to witness and
review the management and operation of the Hotel during the fourteen
day
period that precedes the Target Closing Date. If the Target Closing
Date
is delayed for any reason, Purchaser shall use commercially reasonable
efforts to reschedule its activities to accommodate the extension.
In all
instances, Purchaser shall give at least a 24-hour notice to Xxxxxx
X.
Xxxxx and Xxxx X. Xxxx at the Site prior entering the premises.
Personnel
from Purchaser’s transition management team shall have reasonable access
during normal business hours to all books and records to be transferred
to
Purchaser, and shall have the right (at Purchaser’s expense) to establish
duplicate books in order to effect a smooth transition in the ownership
and management of the Hotel; provided, however, that Purchaser
and its
transition management team (a) shall not unreasonably interfere
with the
normal management and operation of the Hotel, (b) shall hold all
information acquired from such books and records confidential
(c) shall repair any damage to the physical condition of the Hotel
caused by Purchaser, its agents or their respective employees,
and
(d) shall not be deemed to have assumed management responsibilities
of the current management of the Hotel prior to Closing by virtue
of their
presence at the Hotel. Purchaser shall indemnify Seller from and
against
any and all loss, damage, liability, cost or expense resulting
from the
violation or breach of any of the covenants set forth in clauses
(a)
through (d) of the preceding sentence, which indemnity shall survive
the
Closing or the termination of this Agreement for six (6) months.
All
expenses of Purchaser’s transition management team, including the cost of
rooms, food and beverage and other services, shall be paid by Purchaser;
provided, however, that Seller will endeavor to make available
to
Purchaser (at no cost or expense to Purchaser) up to three (3)
rooms for
Purchaser’s transition management team, subject to availability. Except as
expressly provided above and in Section 2.2,
Purchaser shall not, through its officers, employees, managers,
contractors, consultants, agents, representatives or any other
person
(including, without limitation, any person that conducted inspections
by
or on behalf of Purchaser), directly or indirectly, communicate
with any
Employees or any person representing any Employees involving any
matter
with respect to the Property, the Employees or this Agreement,
without
Seller’s prior consent, which consent may be withheld in Seller’s sole
discretion, unless such communication is arranged by Seller.
Notwithstanding anything contained in this Agreement to the contrary,
it
is hereby agreed that Purchaser shall only be entitled to communicate
directly with Seller’s General Manager, Director of Sales, Director of
Operations, and Chief Engineer, and with no other employee of the
Hotel
except that if Purchaser shall set up an employment center to rehire
employees, it shall be allowed to communicate with any hotel employee
solely for the purpose of applying for rehire. Seller agrees that
Purchaser shall be allowed to set up an employment center provided
that
such activity takes place no earlier than 72 hours prior to the
scheduled
Closing without the Seller’s expressed consent. Seller shall reasonably
cooperate with Purchaser in order to arrange communications, pursuant
to a
schedule to be reasonably agreed upon by the parties, between Purchaser
and the Employees in order to allow Purchaser to interview the
Employees
for possible continued employment, and Purchaser shall apprise
Seller from
time to time as to its plans for communicating with such
Employees.
|
36
|
(d)
|
Representations
and Warranties.
In addition to the rights and obligations conveyed pursuant to
Section 2.3(c)
of
this Agreement, each of the parties hereto shall refrain from taking
any
action which knowingly violates any representation and/or warranty
contained in this Agreement.
|
|
(e)
|
Existing
Franchise License Termination.
Seller shall cause Franchisor to terminate, effective on the Closing
Date,
the Existing Franchise License, which termination shall create
no
Purchaser liability as the result of the Existing Franchise License
or its
termination, including, without limitation, liability for the payment
of
any termination fee. Purchaser shall enter into a New Franchise
License on
the Closing Date.
|
|
(f)
|
No
Material Changes.
From and after the date hereof and up to the Closing Date, Seller
shall
not, without the prior written consent of Purchaser, (i) make, cause
to be made, or permit to be made any material physical change to
the
Property or (ii) sell or otherwise dispose of any of the Property or
enter into any new tenant leases.
|
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 learn or receive
notice
thereof. If all or a material portion of the Real Property is,
or is to
be, so condemned or sold, the Purchaser shall have the right to
terminate
this Agreement and promptly receive a full refund of the Deposit
and
interest thereon. 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 or assigned, as applicable,
to the Purchaser at Closing. For the purposes hereof, a “material part”
shall be deemed to mean any taking (i) which causes a reduction in
the size of any of the buildings comprising the improvements or
materially
interferes with the present use and operation of any of such buildings,
or
(ii) which reduces the total area of the Land so that the land area
available for parking is insufficient to service the Hotel thereon
at
maximum capacity or to provide the number of parking spaces required
under
current law (considering any variance to which the Hotel is entitled),
or
(iii) which results in the elimination of the sole or any required
means of legal ingress and/or egress from the Property to public
roads, no
comparable, convenient, legal substitute ingress and/or egress
being
available.
|
37
|
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 to the Property
is less
than ten percent (10%) of the value of the Improvements, Purchaser
shall
be obligated to purchase the Property in accordance the terms of
this
Agreement as if the loss or damage did not occur, provided that
such loss
and/or damage shall be fully insured or Seller, at Closing, shall
reimburse Purchaser for the balance of the cost to fully repair
such loss
and/or damage not fully covered by the proceeds of insurance, and
provided
that Seller shall have the obligation to pay the deductible on
any
insurance relating to the loss and/or damage, at Seller’s sole cost and
expense, and all insurance proceeds and rights to proceeds arising
out of
such loss and/or damage shall be paid or assigned, as applicable,
by
Seller to the Purchaser at Closing, except if Seller fails to comply
with
the foregoing requirements, Purchaser shall have the right, at
its sole
and absolute discretion, to terminate this Agreement and promptly
receive
its out-of pocket expenses incurred from the date of this Agreement
through the termination date. If any such loss or damage to more
than ten
percent (10%) of the value of the Improvements occurs prior to
Closing or
any loss or damage to the Property occurs prior to Closing and
is
uninsured or underinsured, the Purchaser shall have the right,
at its sole
and absolute discretion, to terminate this Agreement. If the Purchaser
elects not to terminate this Agreement or in the event Closing
occurs
following any loss or damage, Seller shall have the obligation
to pay the
deductible, at its sole cost and expense, for all insurance covering
such
loss and/or damage, and all insurance proceeds and rights to proceeds
arising out of such loss or damage shall be paid or assigned, as
applicable, to the Purchaser at Closing.
|
38
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 and in the Assignment and Assumption Agreement,
the
Purchaser does not assume any obligation of the Seller or any liability
for claims arising out of any occurrence prior to Closing. Likewise,
the
Seller does not assume and shall not be liable for any obligation
of the
Purchaser or any liability for claims arising out of any occurrence
subsequent to Closing.
|
|
8.2
|
Indemnification
by Seller.
The Seller hereby indemnifies and holds the Purchaser harmless
from and
against any and all claims, costs, penalties, damages, losses,
liabilities
and expenses, subject to Section
10.11
that may at any time be incurred by the Purchaser, whether before
or after
Closing, arising out of the operations of the Hotel or use of the
Property
prior to the Closing Date and/or as a result of any breach or violation
by
the Seller of any of its representations, warranties, covenants
or
obligations set forth herein or in any other document delivered
by the
Seller pursuant hereto.
|
|
8.3
|
Termination
by Purchaser.
If any material condition set forth in this Agreement cannot or
will not
be satisfied immediately prior to Closing, and the Seller fails
to satisfy
such condition within ten (10) days after notice thereof from the
Purchaser, the Seller defaults in performing any of its material
obligations under this Agreement (including its obligation to sell
the
Property), and the Seller fails to cure any such default within
ten (10)
days after notice thereof from the Purchaser (except for Seller’s
obligation to sell the Property at the Closing in which case no
notice to
cure period shall apply), 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, shall elect
either
(a) to terminate this Agreement and receive a reimbursement from
Seller for Purchaser’s actual out-of-pocket costs (including, without
limitation, reasonable attorney fees) incurred for due diligence
and
activities relating to the enforcement of Purchaser’s rights under this
Agreement from the Agreement Date through the date on which it
receives
payment in full from Seller, and all other rights and obligations
of the
Seller and the Purchaser hereunder shall terminate immediately,
or
(b) to waive its right to terminate and, instead, to proceed to
Closing, or (c) to seek specific performance of the consummation
of the
transaction contemplated herein.
|
39
|
8.4
|
Termination
by Seller.
If, prior to Closing, the Purchaser defaults in performing any
of its
material obligations under this Agreement and the Purchaser fails
to cure
any such default within ten (10) days after notice thereof from
the Seller
(except for Purchaser’s failure to close hereunder, in which case no
notice and cure period shall apply) and Closing does not occur
as a result
of Purchaser’s default, then the Seller’s sole remedy for such default
shall be to terminate this Agreement.
|
|
8.5
|
Survival
of Article VIII.
The provisions of this Article VIII
shall survive the Closing or earlier termination of this
Agreement.
|
ARTICLE
9
ESCROW
TERMS
|
9.1
|
Any
notice to or demand upon the Title Company shall be in writing
and shall
be sufficient only if received by the Title Company within the
applicable
time periods set forth herein, if any. Notices to or demands upon
the
Title Company shall be sent by United States mail, registered or
certified, return receipt requested, postage prepaid, by facsimile
transmission with printed confirmation, or overnight courier service,
with
respect for next day delivery, to the address set forth in Section
10.9 of
this Agreement, or served personally upon the Title Company with
receipt
acknowledged in writing by the Title Company. Notices from the
Title
Company to Seller or Buyer shall be mailed to them in accordance
with
Section 10.9 of this Agreement.
|
|
9.2
|
If
at any time the Title Company is uncertain of its duties hereunder
or if
the Title Company for any other reason is no longer willing to
serve as
escrow agent, the Title Company may, on notice to the parties,
take such
affirmative steps as it may, at its option, elect in order to terminate
its duties as the Title Company.. Upon the taking by the Title
Company of
such action described, the Title Company shall be released of and
from all
liability hereunder.
|
40
|
9.3
|
The
Title Company shall not incur any liability in acting upon any
signature,
notice, demand, request, waiver, consent, receipt or other paper
or
document believed by the Title Company to be genuine. The Title
Company
may assume that any person purporting to give it any notice on
behalf of
any party in accordance with the provisions hereof has been duly
authorized to do so, or is otherwise acting or failing to act under
this
Section except in the case of the Title Company's gross negligence
or
willful misconduct.
|
|
9.4
|
The
terms and provisions of this Article shall create no right in any
person,
firm or corporation other than the parties and their respective
successors
and permitted assigns and no third party shall have the right to
enforce
or benefit from the terms hereof.
|
|
9.5
|
The
Title Company has executed this Agreement for the sole purpose
of agreeing
to act as such in accordance with the terms of this
Agreement.
|
ARTICLE
10
MISCELLANEOUS
PROVISIONS
|
10.1
|
Completeness;
Modification.
This Agreement constitutes the entire agreement between the parties
hereto
with respect to the transactions contemplated hereby and supersedes
all
prior discussions, understandings, agreements and negotiations
between the
parties hereto. This Agreement may be modified only by a written
instrument duly executed by the parties
hereto.
|
|
10.2
|
Assignments.
The Purchaser may assign its rights hereunder to Hersha Hospitality
Trust
(“HT”) or any affiliate of HT or of Purchaser (meaning at least 50%
common
ownership) without the consent of the Seller. No such assignment
shall
relieve the Purchaser of any of its obligations and liabilities
hereunder.
All other assignments shall require the consent of the
Seller.
|
|
10.3
|
Successors
and Assigns.
The benefits and burdens of this Agreement shall inure to the benefit
of
and bind the Purchaser and the Seller and their permitted successors
and
assigns.
|
41
|
10.4
|
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.
|
|
10.5
|
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 of
New York.
|
|
10.6
|
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.
|
|
10.7
|
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 provided the parties realize the material benefits
of
this Agreement, and each term, covenant or condition of this Agreement
shall be valid and enforceable to the fullest extent permitted
by
law.
|
|
10.8
|
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.
|
|
10.9
|
Notices.
All notices, requests, demands and other communications hereunder
shall be
in writing and shall be delivered by hand, transmitted by facsimile
transmission, sent prepaid by Federal Express (or a comparable
overnight
delivery service) or sent 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 (or the date delivery
is
refused by) the intended
recipient.
|
42
|
If
to the Purchaser:
|
Seaport
Hospitality, LLC
000
Xxxxxx Xxxxxx, 0xx
Xxxxx
Xxxxxxxxxxxx,
XX 00000
Attn:
Xxxxxx X. Xxxxxx
Telephone:
215/000-0000
Facsimile:
215/238-0157
|
|
|
With
a copy to:
|
Franklin
Firm, LLP
Penn
Mutual Towers
000
Xxxxxx Xxxxxx, 0xx
Xxxxx
Xxxxxxxxxxxx,
XX 00000
Attn:
Lok Mohapatra, Esq.
Telephone:
000-000-0000
Facsimile:
000-000-0000
|
|
|
If
to the Seller (BCM, LLC):
|
BCM,
LLC
00
Xxxxxx Xxxxx
Xxxxxxxxxx,
XX 00000
Attn:
Xxxxxx X. Xxxxx
Telephone:
(000)000-0000
Facsimile:
(000)000-0000
|
|
|
With
a copy to:
|
Xxxxx
Xxxxx, Esquire
c/o
Hersha Group
00
Xxxxxx Xxxxx
Xxxxxxxxxx,
XX 00000
Phone:
(000) 000-0000
Fax:
(000) 000-0000
|
|
|
If
to Seller (HPS Seaport, LLC):
|
HPS
Seaport, LLC
00
Xxxxxx Xxxxx
Xxxxxxxxxx,
XX 00000
Attn:
Xxxx X. Xxxx
Phone:
(000) 000-0000
Fax:
(000) 000-0000
|
|
|
With
a Copy to:
|
Xxxxx
Xxxxx, Esquire
c/o
Hersha Group
00
Xxxxxx Xxxxx
Xxxxxxxxxx,
XX 00000
Phone:
(000) 000-0000
Fax:
(000) 000-0000
|
|
|
If
to the Title Company:
|
Summit
Associates.
000
Xxxxxxxxx Xxxxxx
Xxxxx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Telephone:
(000) 000-0000
E-mail:
xxxx.xxxx@xxxxxxxxxxxxxxxx.xxx
|
43
Or
to
such other address as the intended recipient may have specified in a notice
to
the other party. Any party hereto may change its address or designate different
or other persons or entities to receive copies by notifying the other party
and
the Escrow Agent in a manner described in this Section.
|
10.10
|
Incorporation
by Reference.
All of the exhibits attached hereto are by this reference incorporated
herein and made a part hereof.
|
|
10.11
|
Survival.
All of the representations, warranties, covenants and agreements
of the
Seller and the Purchaser made in, or pursuant to, this Agreement
shall
survive for a period of twelve (12) months following the Closing
Date,
except as otherwise expressly provided in this Agreement, and shall
not
merge into the Deed or any other document or instrument executed
and
delivered in connection herewith.
|
|
10.12
|
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.
|
44
|
10.13
|
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.
|
|
10.14
|
Time
of Essence.
Time is of the essence with respect to every provision
hereof.
|
|
10.15
|
Confidentiality.
Purchaser and Seller and their representatives, including any
professionals representing the Purchaser and Seller, shall keep
the
material business terms of this Agreement strictly confidential,
except to
the extent disclosure is compelled by law, and then only to the
extent of
such compulsion.
|
|
10.16
|
Publicity.
The parties agree that no party shall contact or conduct negotiations
with
public officials, make any public pronouncements, issue press releases
or
otherwise furnish information regarding the business terms of this
Agreement to a third party without obtaining the prior written
consent of
all parties. No party, or its employees with knowledge of the transactions
contemplated herein, shall trade in the securities of any affiliate
of
Purchaser until a public announcement of the transactions contemplated
by
this Agreement has been made public. Notwithstanding anything in
Section 10.15
and Section 10.16
to
the contrary, the Purchaser and Seller shall have the right to
report any
information relating to this transaction required to be reported
to any
governmental entity, in connection with tax reporting information
filed by
the Purchaser or Seller with the governmental entity or as may
be required
by any other governmental regulatory entity without obtaining Seller’s or
Purchaser’s consent.
|
|
10.17
|
Brokers.
Seller and Purchaser hereby represent and warrant each to other
that,
except as set forth below, neither has discussed this Agreement
or the
subject matter hereof with any real estate broker or salesman so
as to
create any legal right in any such broker or salesman to claim
a real
estate commission or similar fee with respect to the purchase or
sale of
the Property contemplated by this Agreement. Purchaser and Seller
hereby
indemnify each other against, and agree to defend and hold the
other
harmless from any and all claims for any real estate commission
or similar
fees arising out of or in any way connected with any claimed agency
relationship with the indemnitor and relating to the purchase and
sale of
the Property contemplated by this Agreement.
|
[The
remainder of the page is intentionally left
blank]
45
IN
WITNESS WHEREOF,
the
Seller and the Purchaser, intending to be legally bound, have caused this
Agreement to be executed in their names by their respective duly-authorized
representatives.
|
SELLER:
|
|||
|
BCM,
LLC, a New York
|
|||
|
limited
liability company
|
|||
|
By:
|
|||
|
Name:
Xxxxxx X. Xxxxx
|
|||
|
Title:
Member
|
|||
|
SELLER:
|
|||
|
HPS
Seaport, LLC, a New York
|
|||
|
limited
liability company
|
|||
|
By:
|
|||
|
Name:
Xxxx X. Xxxx
|
|||
|
Title:
Member
|
|||
|
PURCHASER:
|
|||
|
SEAPORT
HOSPITALITY, LLC,
|
|||
|
a
New York limited liability company
|
|||
|
By:
|
|||
|
Name:Xxxxxx
Xxxxxx
|
|||
|
Title:
Secretary and
Treasurer
|
|||
46
EXECUTION
BY TITLE COMPANY
The
Title
Company executes this Agreement for the purposes of acknowledging its Agreement
to serve as escrow agent in accordance with the terms of the Agreement.
|
By:
|
||
48
