PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of the 1st day of September, 1999,
between 144 ASSOCIATES, 344 ASSOCIATES, 544 ASSOCIATES, and 644 ASSOCIATES, all
Pennsylvania limited partnerships (individually and collectively the "Sellers"),
and 3544 ASSOCIATES, a Pennsylvania limited partnership (the "Purchaser"),
provides:
ARTICLE 1
DEFINITIONS; RULES OF CONSTRUCTION
1.1 Definitions. The following terms shall have the indicated meanings:
"Act of Bankruptcy" shall mean if a party hereto or any
general partner thereof shall (a) apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property, (b) admit in writing its
inability to pay its debts as they become due, (c) make a general assignment for
the benefit of its creditors, (d) file a voluntary petition or commence a
voluntary case or proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect), (e) be adjudicated a bankrupt or insolvent, (f) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts,
(g) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case or proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect), or (h) take
any corporate or partnership action for the purpose of effecting any of the
foregoing; or if a proceeding or case shall be commenced, without the
application or consent of a party hereto or any general partner thereof, in any
court of competent jurisdiction seeking (1) the liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of debts, of such
party or general partner, (2) the appointment of a receiver, custodian, trustee
or liquidator or such party or general partner or all or any substantial part of
its assets, or (3) other similar relief under any law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts,
and such proceeding or case shall continue undismissed; or an order (including
an order for relief entered in an involuntary case under the Federal Bankruptcy
Code, as now or hereafter in effect) judgment or decree approving or ordering
any of the foregoing shall be entered and continue unstayed and in effect, for a
period of 60 consecutive days.
"Assignment and Assumption Agreement" shall mean that certain
assignment and assumption agreement whereby the Sellers (a) assign and the
Purchaser assumes the Leases, (b) assigns and the Purchaser assumes the
Operating Agreements that have not been canceled at Purchaser's request and (c)
assigns all of the Sellers's right, title and interest in and to the Intangible
Personal Property, to the extent assignable.
"Authorizations" shall mean all licenses, permits and
approvals required by any governmental or quasi-governmental agency, body or
officer for the ownership, operation and use of the Property or any part
thereof.
"Xxxx of Sale-Personal Property" shall mean that certain xxxx
of sale conveying title to the Tangible Personal Property, Intangible Personal
Property and the Reservation System from the Sellers to the Purchaser's property
manager, lessee or designee.
"Closing" shall mean the closing of the sale and purchase of
the Property.
"Closing Date" shall mean the date on which the Closing
occurs.
"Deed" shall mean that certain deed conveying title to the
Real Property with general warranty covenants of title from the Sellers to the
Purchaser, subject only to Permitted Title Exceptions. If there is any
difference between the description of the Land, as shown on Exhibit A atatched
hereto and the description of the Land as shown on the Survey, the description
of the Land to be contained in the Deed and the description of the Land set
forth in the Title Commitment shall conform to the description shown on the
Survey.
"Escrow Agent" shall mean the Sentinel Agency, 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, Telephone: 717/000-0000,
Fax: 717/000-0000.
"Governmental Body" means any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
"Guest Ledger" shall mean that certain guest ledger dated as
of September 1, 1999, certified by the Sellers, a copy of which is attached
hereto as Exhibit C. The Guest Ledger shall be updated and recertified as of the
Closing Date.
"Hotel" shall mean the hotel and related amenities located on
the Land.
"Improvements" shall mean the Hotel and all other buildings,
improvements, fixtures and other items of real estate located on the Land.
"FIRPTA Certifcate" shall mean the affidavit of the
Sellers certifying (i) that the Sellers are not a foreign corporation, foreign
partnership, foreign trust, foreign estate or foreign person (as those terms are
defined in the Internal Revenue Code and the Income Tax Regulations) under
Section 1445 of the Internal Revenue Code, (ii) the information to complete IRS
Form 1099S, and (iii) the information to complete any required state income or
recordation tax reporting requirement, prepared by counsel to the Purchaser and
in form and substance reasonably acceptable to the Purchaser.
"Intangible Personal Property" shall mean all intangible
personal property owned or possessed by the Sellers and used in connection with
the ownership, operation, leasing, occupancy or maintenance of the Property,
including, without limitation, the right to use any trade name associated with
the Real Property and all variations thereof, all of the Leases and any future
leases of space in the Property, all Operating Agreements, Authorizations,
escrow accounts, insurance policies, general intangibles, business records,
plans and specifications, surveys and title insurance polices pertaining to the
Real Property, the Tangible Personal Property and intangible personal property,
all licenses, permits and approvals with respect to the construction, ownership,
operation, leasing, occupancy or maintenance of the Property and any unpaid
award for taking by condemnation or any damage to the Land by reason of a change
of grade or location of or access to any street or highway, and the share of the
Tray Ledger determined under Section 6.5, but excluding (i) any of the aforesaid
rights the Purchaser elects not to acquire and (ii) the Sellers's cash on hand,
in bank accounts and invested with financial institutions, and (iii) the
accounts receivable except for the above described share of the Tray Ledger.
"Inventory" shall mean all "inventories of merchandise" and
"inventories of supplies", as such terms are defined in the Uniform System of
Accounts for Hotels [9th Revised Edition] as published by the Hotel Association
of New York City, Inc., as revised, and similar consumable supplies.
"Land" shall mean that certain parcel of real estate lying and
being located at the intersection of I-80 and Route 54 in Danville, Valley
Township, Montour County, Pennsylvania, more commonly known as the Hampton Inn,
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 Sellers therein, in the
streets and ways adjacent thereto and in the beds thereof, either at law or in
equity, in possession or expectancy, now or hereafter acquired.
"Leases" shall mean all of the leases, if any, now in effect
with respect to the Property or any portion thereof, under which the Sellers are
either a landlord or tenant, and all addenda, modifications or amendments
thereto, certified true copies of which have been delivered by the Sellers to
the Purchaser.
"Operating Agreements" shall mean the management agreements,
service contracts and other agreements, if any, in effect with respect to the
construction, ownership, operation, leasing, occupancy or maintenance of the
Property. All of the Operating Agreements in force and effect as of the date
hereof are listed on Exhibit B attached hereto.
"Owner's Title Policy" shall mean an owner's policy of title
insurance (ALTA Form B-1970) issued to the Purchaser by the Title Company,
pursuant to which the Title Company insures the Purchaser's ownership of fee
simple title to the Real Property (including the marketability thereof), subject
only to Permitted Title Exceptions (which shall exclude all preprinted,
standard, general or similar exceptions), and which provides such affirmative
coverages and endorsements reasonably requested by the Purchaser. The Owner's
Title Policy shall insure the Purchaser in the amount of the Purchase Price and
shall be acceptable in form and substance to the Purchaser. The description of
the Land in the Owner's Title Policy shall be by courses and distances and shall
be identical to the description shown on the Survey.
"Partnership Units" shall mean the limited partnership units
of Hersha Hospitality Limited Partnership.
"Permitted Title Exceptions" shall mean those exceptions to
title to the Real Property set forth in the Title Commitment (a) which do not
require or secure the payment of money and (b) to which Purchaser makes no
objection under Section 2.3(d).
"Property" shall mean collectively the Real Property, the
Inventory, the Tangible Personal Property and the Intangible Personal Property.
"Purchase Price" shall mean Three Million and Six Hundred
Thousand Dollars ($3,600,000.00).
"Real Property" shall mean the Land and the Improvements.
"Reservation System" shall mean the Sellers's Reservation
Terminal and Reservation System equipment and software, if any.
"Sellers's Financial Information" shall mean that certain
financial information relative to the Sellers and the Property, including the
income and expense statements for the Property for the period commencing on the
1st of January, 1999, copies of which are attached hereto as Exhibit D.
"Survey" shall mean the survey to be delivered pursuant to
Section 5.4.
"Tangible Personal Property" shall mean the Inventory and
all other items of personal property owned by the Sellers, used in connection
with the Property, including, without limitation, those items listed on Exhibit
E hereto.
"Title Commitment" shall mean the commitment by the Title
Company to issue the owner's Title Policy.
"Title Company" shall mean a title insurance company
selected by the Purchaser.
"Tray Ledger" shall mean the final night's room revenue
(revenue from rooms occupied as of 12:01 a.m. on the Closing Date, exclusive of
food, beverage, telephone and similar charges which accrue prior to Closing),
including any sales taxes, room taxes or other taxes thereon.
"Utilities" shall mean public sanitary and storm sewers,
natural gas, telephone, public water
facilities, electrical facilities, cable television facilities and all other
utility facilities and services necessary for the operation and occupancy of the
Property.
1.2 Rules of Construction. The following rules shall apply to the
construction and interpretation of this Agreement:
(a) Singular words shall connote the plural number as well
as the singular and vice versa, and the masculine shall include the feminine and
the neuter.
(b) All references herein to particular articles, sections
or subsections, subsections or clauses are references to articles, sections,
subsections or clauses of this Agreement.
(c) The headings contained herein are solely for convenience
of reference and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.
(d) Each party hereto and/or its counsel have reviewed and
revised (or requested revisions of) this Agreement, and therefore any usual
rules of construction requiring that ambiguities are to be resolved against a
particular party shall not be applicable in the construction and interpretation
of this Agreement or any exhibits hereto or amendments hereof.
ARTICLE 2
PURCHASE AND SALE; ACCESS; STUDY PERIOD;
PAYMENT OF PURCHASE PRICE
2.1 Purchase and Sale. The Sellers agree to sell and the Purchaser
agrees to acquire the Property for the Purchase Price and in accordance with the
other terms and conditions set forth herein.
2.2 Intentionally Ommitted.
2.3 Intentionally Omitted.
2.4 Inspection of Books and Records; Access. The Purchaser, from
the date hereof until termination of this Agreement, shall have complete and
free access during normal business hours to all documents, agreements and other
information in the possession of the Sellers and their agents pertaining to the
ownership, use, rental and operation of the Property and to the Sellers's
representations, warranties and covenants set forth herein, including but not
limited to financial records, tax assessments, bills and leases, and the
Purchaser shall have the right to inspect and make copies of the same. The
Sellers hereby grant to the Purchaser and its officers, agents, servants,
employees, assigns and independent contractors a license to enter upon the
Property and the full right of access to the Real Property for the purposes of
inspecting the condition or status of the Property and the books and records
maintained by the Sellers or their agents with respect to the Property,
undertaking any tests and inspections desired by Purchaser hereunder and
verifying the Sellers's representations, warranties and covenants set forth
herein.
2.5 Payment of Purchase Price. The Purchase Price shall be paid to the
Sellers in the following manner:
(a) The Purchaser shall receive a credit against the Purchase Price in
an amount equal to the Sellers's closing costs assumed and paid for by the
Purchaser pursuant to Section 6.4 hereof.
(b) The Acquiror shall receive a credit against the Purchase Price in
an amount equal to the outstanding balance (principal, interest, fees and the
like), as of the date of Closing, of the existing mortgage loan encumbering the
property as such balance is evidenced by a letter from the lender, which loan
the Purchaser shall take subject to or, if requested, assume.
(c) The Purchaser shall pay the balance of the Purchase Price, as
adjusted by the prorations pursuant to Section 6.5 hereof, in the form of units
of limited partnership interest in the Purchaser (the "LP Units") or in the
lawful money of the United States or in any combination thereof as acceptable to
the Sellers.
2.6 Allocation of Purchase Price. The parties agree that the
Purchase Price shall be allocated among the various components of the Property
in the manner indicated by the Purchaser at Closing.
2.7. Determination of Number of Partnership Units. For purposes of
determining the number of Partnership Units to be delivered by the Acquiror at
the Closing, each Partnership Unit shall be deemed to have a value equal to
$6.00. No fractional Partnership Units will be issued at Closing; in lieu of any
such fraction, the value shall be rounded up to a whole share value.
2.8 Sellers's Distribution of Partnership Units . On the Closing Date,
the Partnership Units shall be distributed among the Sellers , as set forth on
Exhibit K attached hereto , in the amount specified on Exhibit K. On the date
hereof, Sellers shall deliver or cause to be delivered to Acquiror an Investor
Questionnaire and Agreement in the form attached hereto as Exhibit F (a
"Questionnaire"), completed and executed by each of the Sellers . On the Closing
Date, Acquiror shall issue certificates reflecting each of the Sellers's
ownership of the Partnership Units. The certificates evidencing the Partnership
Units will bear appropriate legends indicating (i) that the Partnership Units
have not been registered under the Securities Act of 1933, as amended
("Securities Act"), and (ii) that the Acquiror's Partnership Agreement restricts
the transfer of Partnership Units. The Acquiror shall assume no responsibility
for any allocation of the consideration, including Partnership Units, to any of
the Sellers's partners. Sellers agree to hold Acquiror and its affiliates
harmless and to indemnify Acquiror and its affiliates for all costs, claims,
damages and expenses, including reasonable attorney's fees, incurred by Acquiror
in connection with such allocations. Upon receipt of Partnership Units, the
Acquiror's Partnership Agreement shall be executed by or on behalf of each of
the Sellers and the Sellers shall become limited partners of Acquiror and agree
to be bound by the Partnership Agreement.
2.9 Redemption. The Partnership Units may be redeemed upon delivery of
a notice ("Redemption Notice") from the Sellers , for common shares ("Common
Shares") of beneficial interest in Hersha Hospitality Trust (the "REIT") or for
cash, in accordance with the Hersha Hospitality Limited Partnership Agreement,
attached hereto as Exhibit M, and incorporated herein.
2.10 Registration of Common Shares. The Sellers acknowledge that the
issuance of the Common Shares issuable upon redemption of the Partnership Units
shall not have been registered under the applicable provisions of the Securities
Act, as of the Closing Date. The REIT shall have the Common Shares issuable upon
redemption registered in accordance with the Hersha Hospitality Limited
Partnership Agreement attached hereto as Exhibit M and incorporated herein.
2.11 Consideration Contingency. The Sellers shall value the Hotel on
December 31, 2001. The value of the Hotel shall be computed by applying a 12%
capitalization rate to the audited trailing 12 months net operating income,
adjusted for a 4% of revenue management fee and a 4% of revenue furniture,
fixture and equipment reserve.
If the then current value of the Hotel exceeds the consideration paid
by Acquiror hereunder, the Acquiror will issue additional Partnership Units at
$6.00 per Unit or in the lawful money of the United States equal to the
difference between the then current value and the consideration paid hereunder
and all distributions paid on those units since Closing Date.
If the then current value of the Hotel is less than the Consideration
paid by the Acquiror hereunder, the Sellers will return to the Acquirer
Partnership Units at $6.00 per Unit or any lawful money of the United States, if
any, equal to the difference between the then current value of the Hotel and the
Consideration paid hereunder and all distributions paid on those units since the
Closing Date.
2.12 Confidentiality. Except as hereinafter provided, from and
after the execution of this Agreement, the Purchaser and the Sellers shall keep
the terms, conditions and provisions of this Agreement confidential and neither
shall make any public announcements hereof unless the other first approves of
same in writing, nor shall either disclose the terms, conditions and provisions
hereof, except to persons who "need to know", such as their respective
attorneys, accountants, engineers, surveyors, financiers and bankers.
Notwithstanding the foregoing, it is acknowledged that the general partner of
the Purchaser has elected to be a real estate investment trust ("REIT") and that
the REIT has sold shares and may seek to sell additional shares to the general
public and that in connection therewith, the Purchaser will have the absolute
and unbridled right to market such securities and prepare and file all necessary
or reasonably required registration statements, disclosure statements, and other
papers, documents and instruments necessary or reasonably required in the
Purchaser's judgment and that of its attorneys and underwriters with respect to
the REIT's shares with the U.S. Securities and Exchange Commission and/or
similar state authorities and to cause same to become effective and to disclose
therein and thus to its underwriters, to the U.S. Securities and Exchange
Commission and/or to similar state authorities and to the public all of the
terms, conditions and provisions of this Agreement.
ARTICLE 3
SELLERS'S REPRESENTATIONS, WARRANTIES AND COVENANTS
To induce the Purchaser to enter into this Agreement and to purchase the
Property, and to pay the Purchase Price therefor, the Sellers hereby make the
following representations, warranties and covenants, on joint and several basis
with respect to the Property, upon each of which the Sellers acknowledge and
agrees that the Purchaser is entitled to rely and has relied:
3.1 Organization and Power. The Sellers are an entity duly formed and
validly existing and in good standing under the laws of the State of its
organization and has all requisite powers and all governmental licenses,
authorizations, consents and approvals to carry on its business as now conducted
and to enter into and perform its obligations hereunder and under any document
or instrument required to be executed and delivered on behalf of the Sellers
hereunder.
3.2 Authorization and Execution. This Agreement has been duly authorized
by all necessary action on the part of the Sellers, has been duly executed and
delivered by the Sellers, constitutes the valid and binding agreement of the
Sellers and is enforceable in accordance with its terms.
3.3 Noncontravention. The execution and delivery of, and the
performance by the Sellers of their obligations under this Agreement do not and
will not contravene, or constitute a default under, any provision of applicable
Law or regulation, the Sellers's organizational documents or any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Sellers, or result in the creation of any lien or other encumbrance on any asset
of the Sellers. There are no outstanding agreements (written or oral) pursuant
to which the Sellers (or any predecessor to or representative of the Sellers)
have agreed to sell or has granted an option to purchase the Property (or any
part thereof).
3.4 No Special Taxes. The Sellers have no knowledge of, nor has it
received any notice of, any special taxes or assessments relating to the
Property or any part thereof or any planned public improvements that may result
in a special tax or assessment against the Property.
3.5 Compliance with Existing Laws. The Sellers possess all
Authorizations, each of which is valid and in full force and effect, and no
provision, condition or limitation of any of the Authorizations has been
breached or violated. The Sellers have not represented or failed to disclose any
relevant fact in obtaining all Authorizations, and the Sellers have no knowledge
of any change in the circumstances under which those Authorizations were
obtained that could result in their termination, suspension, modification or
limitation. The current use and occupancy of the Property as a hotel are
permitted as a principal use under all laws applicable thereto without the
necessity of resort to any grandfathered or nonconforming use status, or any
special use permit, special exception or other special permit, permission or
consent. The Sellers have no knowledge, nor has it received notice within the
past three years, of any existing or threatened violation of any provision of
any applicable building, zoning, subdivision, environmental or other
governmental ordinance, resolution, statute, rule, order or regulation,
including but not limited to those of environmental agencies or insurance boards
of underwriters, with respect to the ownership, operation, use, maintenance or
condition of the Property or any part thereof, or requiring any repairs or
alterations other than those that have been made prior to the date hereof.
3.6 Personal Property. All of the Tangible Personal Property and
Intangible Personal Property are owned and will be conveyed by the Sellers free
and clear of all liens and encumbrances. The Sellers have good, merchantable
title thereto and the right to convey same in accordance with the terms of this
Agreement.
3.7 Title and Survey Matters. The Sellers are the sole owner of full
legal, equitable and beneficial title to the Property and no consent of or
joinder by any other person is required for the Sellers to convey the full
legal, equitable and beneficial title to and ownership of the Property to the
Purchaser in accordance with this Agreement. Except to the extent such
obligations may be inconsistent herewith, the Sellers shall perform all of its
obligations under all documents affecting title to all or any part of the
Property and shall not permit or allow to continue any defaults thereunder. The
Sellers shall not, after the date of this Agreement, subject the Property to any
liens, encumbrances, covenants, conditions, restrictions, easements or other
title matters or seek any zoning or other land use changes or take any other
action which may affect or modify the status of title to or the permitted uses
of the Property without the Purchaser's prior express written consent.
3.8 Status of Leases. Each of the Leases is valid and in full force and
effect, have not been further modified or amended and is assignable to Purchaser
without the consent of the other party thereto. There are no defaults under any
of the Leases by the Sellers or, to the best of the Sellers's knowledge, by the
other party thereunder, and no fact or circumstance has occurred that, by itself
or with the giving of notice or the passage of time or both, would constitute
such a default by the Sellers or, to the best of the Sellers's knowledge, by the
other party thereunder. The Sellers have the sole right to collect the rent
under the Leases and neither such right nor any of the Leases has been assigned,
pledged, hypothecated or otherwise encumbered. From the date hereof through and
including the date of Closing, the Sellers shall not modify any of the Leases in
any material manner. The Sellers shall perform all of its obligations under the
Leases from the date hereof through and including the date of Closing.
3.9 Operating Agreements. Each of the Operating Agreements may be
terminated by the Sellers or the Purchaser upon not more than 30 days' prior
written notice and without the payment of any penalty, fee, premium or other
amount. The Sellers have performed all of their obligations under each of the
Operating Agreements and no fact or circumstance has occurred which, by itself
or with the passage of time or the giving of notice or both, would constitute a
default under any of the Operating Agreements. The Sellers shall not enter into
any new management agreement, maintenance or repair contract, supply contract,
lease (as lessor or lessee) or other agreements with respect to the Property,
nor shall the Sellers enter into any agreements modifying the Operating
Agreements, unless (a) any such agreement or modification will not bind the
Purchaser or the Property after the Closing Date or (b) the Sellers have
obtained the express prior written consent of the Purchaser to such agreement or
modification. The Sellers agree to cancel and terminate all of the Operating
Agreements as of the Closing unless the Purchaser requests in writing prior to
Closing that one or more remain in effect after Closing.
3.10 Warranties and Guaranties. The Sellers shall not before or
after Closing, release or modify any warranties or guarantees, if any, of
manufacturers, suppliers and installers relating to the Improvements and the
Tangible Personal Property and Intangible Personal Property or any part thereof,
except with the prior written consent of the Purchaser.
3.11 Insurance. All of the Sellers's insurance policies are valid
and in full force and effect, all premiums for such policies were paid when due
and all future premiums for such policies (and any replacements thereof) shall
be paid by the Sellers on or before the due date therefor. The Sellers shall pay
all premiums on, and shall not- cancel or voluntarily allow to expire, any of
the Sellers's insurance policies unless such policy is replaced, without any
lapse of coverage, by another policy or policies providing coverage at least as
extensive as the policy or policies being replaced. The Sellers shall name the
Purchaser as an additional insured on each of the Sellers's insurance's
policies. The Sellers agree to transfer any such policies as of the Closing Date
upon the written request of the Purchaser and the premiums on any of such
policies that the Purchaser elects to have assigned to it shall be allocated
between the Sellers and the Purchaser as of the Closing Date.
3.12 Condemnation Proceedings; Roadways. The Sellers have not received
notice of any condemnation or eminent domain proceeding pending or threatened
against the Property or any part thereof. The Sellers have no knowledge of any
change or proposed change in the route, grade or width of, or otherwise
affecting, any street or road adjacent to or serving the Real Property.
3.13 Litigation. There is no action, suit or proceeding pending or known
to be threatened against or affecting the Sellers or any principal, subsidiary
or affiliate of the Sellers in any court, before any arbitrator or before or by
any Governmental Body which (a) in any manner raises any question affecting the
validity or enforceability of this Agreement or any other agreement or
instrument to which the Sellers are parties or by which they are 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 Sellers or any principal, subsidiary or affiliate
of the Sellers, (c) could adversely affect the ability of the Sellers to perform
its obligations hereunder, or under any document to be delivered pursuant
hereto, (d) could create a lien on the Property, any part thereof or any
interest therein, (e) the subject matter of which concerns any past or present
employee of the Sellers or their managing agent or (f) could otherwise adversely
affect the Property, any part thereof or any interest therein or the use,
operation, condition or occupancy thereof.
3.14 Labor and Employment Agreements. There are no labor disputes
pending or, to the best of the Sellers's knowledge, threatened as to the
operation or maintenance of the Property or any part thereof. The Sellers are
not parties to any union or other collective bargaining agreement with employees
employed in connection with the ownership, operation or maintenance of the
Property. The Sellers are not parties to any employment contracts or agreements,
written or oral, with any persons employed with respect to the Property that
will be binding on the Purchaser on or after the Closing. Neither the Sellers
nor their managing agent (if any) will, between the date hereof and the Closing
Date, enter into any new employment contracts or agreements or hire any new
employees that will be binding on the Purchaser on or after the Closing. The
Purchaser will not be obligated to give or pay any amount to any employee of the
Sellers or the Sellers's managing agent. The Purchaser shall not have any
liability under any pension or profit sharing plan that the Sellers or its
managing agent may have established with respect to the Property or their or its
employees.
3.15 Financial Information. All of the Sellers's Financial Information
is correct and complete in all respects and presents accurately the results of
the operations of the Property for the period commencing on the 1st of January
1999 prior to the Closing. Since the date of the last financial statement
included in the Sellers's Financial Information, there has been no material
adverse change in the financial condition or in the operations of the Property.
The Sellers will provide access by Purchaser's representatives, to all financial
and other information relating to the Property, and such representatives shall
determine that such information is sufficient to enable them to prepare audited
financial statements in conformity with Regulation S-X of the Securities and
Exchange Commission and any registration statement, report or disclosure
statement filed with and any rule issued by, the Securities and Exchange
Commission. The Sellers will provide a signed representation letter as
prescribed by Generally Accepted Auditing Standards as promulgated by the
Aud1ting Standards Division of the American Institute of Public Accountants
which representation is required to enable an independent public accountant to
render an opinion on such financial statements.
3.16 Organizational Documents. The Sellers's Organizational Documents
are in full force and effect and have not been modified or supplemented, and no
fact or circumstance has occurred that, by itself or with the giving of notice
or the passage of time or both, would constitute a default thereunder.
3.17 Excluded Liabilities.
(i) The Purchaser is not assuming or undertaking to assume and
shall have no responsibility for any expenses, debts, obligations, liabilities,
claims, demands, fines or penalties, whether fixed or contingent, past, present
or future, or direct for indirect, arising out of or in connection with the
conduct by the Sellers of their business or the ownership and use of the
Property prior to the Closing (the "Excluded Liabilities"), including without
limitation, any of the Excluded Liabilities arising out of or in connection with
the failure by the Sellers to comply with any applicable Environmental Laws
including, without limitation any Environmental Laws regarding pollution
control, underground storage tanks, asbestos or other environmental matters
applicable to the Property.
(ii) The Sellers agree to defend, indemnify and hold harmless
the Purchaser from and against any of the Excluded Liabilities and any other
damages, losses, costs, expenses, claims or demands (including fines, penalties,
diminution in value of the Property, court costs and reasonable attorneys' fees)
that may be incurred by or imposed on the Purchaser as a result of (i) the
conduct by the Sellers of their business in connection with the Property prior
to the Closing and (ii) any material breach by the s of any representation or
warranty of the Sellers contained herein applicable to the Property.
3.18 Historical Districts. Neither the Property, nor any portion
thereof, is (a) listed, or eligible to be listed, in any national, state or
local register of historic places or areas, or (b) located within any designated
district or area in which the permitted uses of land located therein are
restricted by regulations, rules or laws other than those specified under local
zoning ordinances.
3.19 Brokerage Commission. The Sellers have not engaged the services
of, nor are they or will they or Acquiror become liable to, any real estate
agent, broker, finder or any other person or entity for any brokerage or
finder's fee, commission or other amount with respect to the transactions
described herein on account of any action by the Sellers.
3.20 Environmental.
(i) The Sellers, and any person or entity for whose conduct
the s are liable, has no liability under, has never materially violated, and is
presently in material compliance with, all federal, state and local
environmental or health and safety-related laws, rules, regulations and
ordinances (together, Environmental Laws) applicable to the Property.
(ii) There exist no environmental conditions with respect to
the Property that could or do result in any damage, loss, cost, expense or
liability to or against the Sellers or the Purchaser.
(iii) Other than those hazardous or toxic substances commonly
used in the operation of a hotel, which hazardous or toxic substances are stored
in accordance with all applicable Environmental Laws, the Sellers, and any other
person or entity for whose conduct Sellers are liable, has not generated,
transported, stored, handled or disposed of any hazardous or toxic substances at
the Property, and has no knowledge of any release or threatened release of any
hazardous or toxic substance at the Property or in the vicinity of the Property.
(iv) No lien has been imposed on the Property by any federal,
state or local governmental agency in connection with the presence at or near
the Property of any hazardous or toxic substance.
(v) The Sellers, and any person or entity for whose conduct
the Sellers are responsible, has not (i) entered into or been the subject of any
order or decree with respect to environmental matters with respect to the
Property, (ii) received notice under the citizen suit provisions of any
Environmental Law in connection with the Property, (iii) received any request
for information, notice, demand letter, administrative inquiry or formal or
informal complaint or claim in respect of any environmental condition relating
to the Property, or (iv) been subject to or threatened with any governmental or
citizen enforcement action with respect to the Property; and the Sellers, and
any other person for whose conduct the Sellers are liable, have no reason to
believe that any of the foregoing will be forthcoming.
(vi) The Sellers have all licenses, permits or approvals, if
any, required for the activities and operations conducted at the Property and
for any past or ongoing alterations or improvements on the Property.
3.21 Sufficiency of Certain Items. The Property contains not less than:
(a) a sufficient amount of kitchen equipment, bar equipment,
refrigeration equipment, silverware, glassware, china, dishes, "small goods",
napkins, tablecloths, paper goods and other such personal property to
efficiently operate each of the restaurants, bars and lounges, located upon or
within the Improvements;
(b) a sufficient amount of furniture, furnishings, color
television sets, carpets, drapes, rugs, floor coverings, mattresses, pillows,
bedspreads and the like, to furnish each guest room, so that each such guest
room is, in fact, fully furnished; and
(c) a sufficient amount of towels, washcloths and bed linens,
so that there are two and one-half sets of towels, washcloths and linens for
each guest room (one on the beds, one on the shelves, and one-half in the
laundry), together with a sufficient supply of paper goods' soaps, cleaning
supplies and other such supplies and materials, as are reasonably adequate for
the current operation of the Hotel.
3.22 Operation of Property Prior to Closing. Between the date of this
Agreement and the Closing Date, Sellers shall operate the Property in compliance
with all laws and in the same manner in which Sellers operated the Property
prior to the execution of this Agreement, so as to keep the Property in good
condition, reasonable wear and tear excepted, and so as to maintain the existing
caliber of the Hotel operations conducted at the Property and the reasonable
good will of the tenants, the Hotel guests, the employees and other customers of
the Hotel. The Sellers shall continue to use its best efforts to take guest room
reservations and to book functions and meetings and otherwise to promote the
business of the Property in generally the same manner as the Sellers did prior
to the execution of this Agreement. All advance room bookings and reservations
and all meetings and function bookings shall be booked at rates, prices and
charges heretofore customarily charged by the Sellers for such purposes, and in
accordance with Sellers's published rate schedules. From and after the execution
and delivery of this Agreement, the Sellers shall not (i) make any agreements
which shall be binding upon the Purchaser with respect to the Property, or (ii)
reduce or cause to be reduced any room rents or any other charges over which
Sellers have operational control. Between the date hereof and the Closing Date,
the Sellers shall deliver to the Purchaser monthly reports (or for the partial
monthly period up to the Closing Date) showing the income and expenses of the
Hotel and all departments thereof, together with such periodic information with
respect to room reservations and other bookings, as the Sellers customarily keep
internally for its own use. The Sellers agree that they will operate the
Property and the Hotel in accordance with the provisions of this section between
the date hereof and the Closing Date.
3.23 Utilities. All Utilities required for the operation of the Property
either enter the Property through adjoining streets, or they pass through
adjoining land, do so in accordance with valid public easements or private
easements, and all of said Utilities are installed and operating and all
installation and connection charges therefor have been paid in full.
3.24 Curb Cuts. All curb cut street opening permits or licenses required
for vehicular access to and from the Real Property from any adjoining public
street have been obtained and paid for and are in full force and effect. The
Real Property has a right of unrestricted access to a public street.
3.25 Room Furnishings. Each room in the Hotel available for guest rental
is and at Closing will be furnished in accordance with Licensor's standards for
the Hotel and room type.
3.26 Franchise Agreement. The franchise agreement with respect to the
Hotel is, and at Closing will be, valid and in full force and effect, and
Sellers are not and will not be in default with respect thereto (with or without
the giving of any required notice and/or lapse of time).
ARTICLE 4
PURCHASER'S REPRESENTATIONS; WARRANTIES AND COVENANTS
To induce the Sellers to enter into this Agreement and to sell the
Property, the Purchaser hereby makes the following representations, warranties
and covenants with respect to the Property, upon each of which the Purchaser
acknowledges and agrees that the Sellers are entitled to rely and has relied:
4.1 Power. The Purchaser has all powers and all governmental
licenses, authorizations, consents and approvals to carry on its business as now
conducted and to enter into and perform its obligations under this Agreement and
any document or instrument required to be executed and delivered on behalf of
the Purchaser hereunder.
4.2 Execution. This Agreement has been executed and delivered by the
Purchaser, constitutes the valid and binding agreement of the Purchaser and is
enforceable in accordance with its terms.
4.3 Noncontravention. The execution and delivery of and the performance
by the Purchaser of its obligations hereunder do not and will not contravene, or
constitute a default under, any provisions of applicable law or regulation, or
any agreement, judgment, injunction, order, decree or other instrument binding
upon the Purchaser or result in the creation of any lien or other encumbrance on
any asset of the Purchaser.
4.4 Litigation. There is no action, suit or proceeding, pending or
known to be threatened, against or affecting the Purchaser or any principal,
subsidiary or affiliate of the Purchaser in any court or before any arbitrator
or before any Governmental Body which (a) in any manner raises any question
affecting the validity or enforceability of this Agreement or any other
agreement or instrument to which the Purchaser is a party or by which it is
bound and that is to be used in connection with, or is contemplated by, this
Agreement, (b) could materially and adversely affect the business, financial
position or results of operations of the Purchaser or any principal, subsidiary
or affiliate of the Purchaser, (c) could adversely affect the ability of the
Purchaser to perform its obligations hereunder, or under any document to be
delivered pursuant hereto, (d) could create a lien on the Property, any part
thereof or any interest therein or (e) could adversely affect the Property, any
part thereof or any interest therein or the use, operation, condition or
occupancy thereof.
4.5 Bankruptcy. No Act of Bankruptcy has occurred with respect to the
Purchaser.
4.6 Brokerage Commission. The Purchaser has not engaged the services of,
nor is it or will it become liable to, any real estate agent, broker, finder or
any other person or entity for any brokerage or finder's fee, commission or
other amount with respect to the transaction described herein.
ARTICLE 5
CONDITIONS AND ADDITIONAL COVENANTS
The Purchaser's obligations hereunder are subject to the satisfaction of
the following conditions precedent and the compliance by the Sellers with the
following covenants:
5.1 Sellers's Deliveries. The Sellers shall have delivered to the
Purchaser, on or before the Closing Date, all of the documents and other
information required of Sellers pursuant to Section 6.2.
5.2 Representations, Warranties and Covenants; Obligations of Sellers;
Certificate. All of the Seller's representations and warranties made in this
Agreement shall be true and correct as of the Closing Date as if then made,
there shall have occurred no material adverse change in the financial condition
of the Seller or the physical or financial condition of the Property since the
date hereof, the Seller shall have performed all of its covenants and other
obligations under this Agreement and the Seller shall have executed and
delivered to the Purchaser at Closing a Certificate to the foregoing effect.
5.3 Title Matters. Purchaser shall have received from Sellers a copy of
Sellers's Owner's Title Policy. The Purchaser shall have determined that the
Sellers are the sole owner of good and marketable fee simple title to the Real
Property free and clear of all liens, encumbrances, restrictions, conditions and
agreements except for Permitted Title Exceptions. The Sellers shall not have
taken any action from the date hereof and through and including the Closing Date
that would adversely affect the status of title to the Real Property. Fee simple
title to the Real Property shall be insurable as such by the Title Company at or
below its regularly scheduled rates subject only to Permitted Title Exceptions.
5.4 Survey. The Purchaser shall have received the most recent Survey of
the Land obtained by or in the possession of Sellers. The Survey provided by the
Sellers (or a survey obtained by Purchaser if Sellers's Survey was prepared more
than one year earlier) shall be adequate for the Title Company to delete any
exception for survey in the Owner's Title Policy.
5.5 Condition of Improvements and the Tangible Personal Property. The
Improvements and the Tangible Personal Property (including but not limited to
the mechanical systems, plumbing, electrical, wiring, appliances, fixtures,
heating, air conditioning and ventilating equipment, elevators, boilers,
equipment, roofs, structural members and furnaces) shall be in good condition
and working order and shall have no material defects, structural or otherwise,
and there shall be no deferred maintenance with respect to the Real Property,
the Tangible Personal Property or any part thereof, and the Sellers shall not
have diminished the Inventory. The Sellers, at their expense, shall have
maintained the Real Property and the Tangible Personal Property in compliance
with all applicable laws and in at least as good condition as they are in as of
the date hereof, normal wear and tear excepted. The Sellers shall not have
diminished the quality or quantity of maintenance and upkeep services heretofore
provided to the Real Property and the Tangible Personal Property. The Sellers
shall not have removed or caused or permitted to be removed any part or portion
of the Real Property or the Tangible Personal Property unless the same is
replaced, prior to Closing, with similar items of at least equal quality and
acceptable to the Purchaser.
5.6 Utilities. All of the Utilities shall be installed in and
operating at the Property, and service shall be available for the removal of
garbage and other waste from the Property. Between the date hereof and the
Closing Date, the Sellers shall not have received notice of any extraordinary or
material increase or proposed increase in the rates charged for the Utilities
from the rates in effect as of the date hereof.
5.7 Land Use. The current use and occupancy of the Property as a
hotel and for hotel-related purposes are permitted as a principal use under all
laws applicable thereto without the necessity of resort to any grandfathered or
permitted nonconforming use status, or any special use permit, special exception
or other special permit, permission or consent.
5.8 Lease Estoppel Certificates. The Purchaser shall have received
an estoppel certificate for each of the Leases as provided herein and, if
required by the Purchaser's lender, subordination, attornment and nondisturbance
agreements acceptable to such lender, all in form and substance reasonably
acceptable to the Purchaser. The Sellers, at their expense, shall request and
use Sellers's best efforts to obtain a lease estoppel certificate from all of
third parties under all of the Leases prior to Closing Date.
5.9 Franchise. The Purchaser or its designee shall have received, at
the Purchaser's option and expense, an assignment or transfer of any existing
franchise agreement currently applicable to the Hotel or a new franchise
agreement from Promus Hotels (the "Franchisor"), together with an estoppel
certificate from the existing Franchisor in form and substance acceptable to the
Purchaser, which the Sellers agree to use its best efforts to obtain.
5.10 Operational Licenses. Purchaser shall have obtained all
permits, licenses, approvals and Authorizations necessary or desirable to
operate the Hotel and all restaurants, bars and lounges presently located in the
Hotel, including, without limitation, liquor licenses or alcoholic beverage
licenses. To that end, the Sellers and the Purchaser shall have cooperated with
each other, and each shall have executed such transfer forms, license
applications and other documents as may be necessary or desirable for Purchaser
to obtain such permits, licenses, approvals and Authorizations.
5.11 Securities Compliance. Sellers shall cooperate with Purchaser to
provide all information and execute all documents necessary for Purchaser to
comply with all applicable state and federal securities laws.
5.12 First Right of Refusal. Sellers or any of their officers or
affiliates shall have right to acquire, develop, manage, lease, operate, or have
any interest in any hotel or lodging establishment in any location within any
distance from the Property (Hampton Inn Danville). However, the Purchaser shall
have a first right of refusal to purchase such a hotel or lodging establishment
within a fifteen (15) mile radius of the Property during a period of five (5)
years from the Closing Date. This provision shall survive the Closing Date.
Each of the conditions and additional covenants contained in this
Section are intended for the benefit of the Purchaser and may be waived in whole
or in part, by the Purchaser, but only by an instrument in writing signed by the
Purchaser.
ARTICLE 6
CLOSING
6.1 Closing. Closing shall be held at the offices of the Purchaser or
its counsel on or before September 1,1999, upon ten (10) days notice from
Purchaser to Sellers commencing at 9:00 AM local time unless otherwise agreed by
the Purchaser and the Sellers. The Purchaser shall have the right, but not the
obligation, to extend the Closing Date, one or more times, but not beyond, 1999,
by written notice thereof to the Sellers. Possession of the Property shall be
delivered to the Purchaser at-Closing, subject only to Permitted Title
Exceptions.
6.2 Sellers's Deliveries.
(a) At Closing, the Sellers shall deliver to Purchaser all
of the following instruments, each of which shall have been duly executed and,
where applicable, acknowledged on behalf of the Sellers and shall be dated as of
the Closing Date:
(i) The certificate required by Section 5.2.
(ii) An Assignment of Leases, if applicable
(iii) Lease estoppel certificates, if applicable.
(iv) The FIRPTA Certificate.
(v) The Assignment and Assumption Agreement.
(vi) Settlement Sheet.
(vii) Xxxx of Sale for all Tangible Personal Property.
(viii) Deed.
(ix) Opinion of counsel or other evidence (such as
organization documents including certificates and authorizing resolutions)
satisfactory to Purchaser as to Sellers's authority to enter into and consummate
this Agreement.
(x) Such agreements, affidavits or other documents as
may be required by the Title Company to issue the Owner's Title Policy.
(b) At Closing, the Sellers shall also deliver or cause to be
delivered to the Purchaser the following:
(i) The originals of any Leases or true, correct and
complete copies thereof certified by the Sellers.
(ii) A valid, final and unconditional certificate
of occupancy as to the Real Property issued by the: appropriate governmental
authority.
(iii) If part of the Tangible Personal Property consists
of a motor vehicle titled under state law, a duly executed and delivered
document transferring title pursuant to applicable state law and related
documents.
(iv) True, correct and complete copies of all plans,
specifications, guaranties and warranties, if any, of contractors,
subcontractors, manufacturers, suppliers and installers possessed by the Sellers
and relating to the Improvements and the Tangible Personal Property and
Intangible Personal Property, or any-part thereof.
(v) Copies of all correspondence, files, documents,
records and data relating the operation of the Property for the period
commencing on January 1, 1999 until Closing.
(vi) A11 keys for the Property.
(vii) A complete list of all advance room reservations,
functions and the like, including all deposits thereon, in reasonable detail
specified by the Purchaser.
(viii) Updated Guest Ledger.
(ix) Any other document, instrument, information or item
reasonably requested by the Purchaser or required hereby.
6.3 Purchaser's Deliveries. At Closing, the Purchaser shall pay, deliver
or cause to be delivered to the Sellers, as appropriate, the following:
(a) The Purchase Price in the manner set forth in Section 2.5
hereof.
(b) The Assignment and Assumption Agreement.
(c) Any other document or instrument reasonably requested by
the Sellers or required hereby.
6.4 Closing Costs. The Sellers shall pay (i) all applicable sales and
use taxes (if any) levied on the transfer of the Tangible or Intangible Personal
Property, (ii) any expenses incurred by or on behalf of the Sellers. The
Purchaser shall pay (i) all Title Company charges, (ii) all of the recording
taxes and fees, (iii) all costs of the transfer of franchise and assignment of
mortgage secured on the Property, and (iv) any expenses incurred by or on behalf
of the Purchaser. Each party hereto shall pay its own legal fees and expenses.
6.5 Income and Expense Allocations.
(a) At Closing, all income and expenses with respect to the
Property, and applicable to the period of time before and after Closing,
determined in accordance with generally accepted accounting principles
consistently applied, shall be allocated between the Sellers and the Purchaser
as of the Closing Date. The Sellers shall be entitled to all income, including
the Tray Ledger, and responsible for all expenses for the period of time up to
but not including the Closing Date, and the Purchaser shall be entitled to all
income and responsible for all expenses for the period of time from, after and
including the Closing Date. Without limiting the generality of the foregoing,
Sellers shall pay to Purchaser or Purchaser shall pay to Sellers at Closing, or
there shall be an appropriate Closing adjustment for, the net cash payable to
the Purchaser or Sellers, as appropriate, based on the allocation set forth
above. All adjustments shall be shown on the settlement statement or may be done
outside the settlement statement (with such supporting documentation as the
parties may reasonably require being attached as exhibits to the settlement
statements or submit to the parties as appropriate) and if on the settlement
statement shall increase or decrease (as the case may be) the balance of the
Purchase Price payable by the Purchaser at Closing. The Sellers shall pay at
Closing all special assessments and taxes applicable to the Property and
relating to the period prior to Closing.
(b) If accurate allocations cannot be made at Closing
because current bills are not obtainable (as, for example, in the case of
utility bills), the parties shall allocate such income or expenses at Closing on
the best available information, subject to adjustment upon receipt of the final
xxxx or other evidence of the applicable income or expense. Any expense paid by
the Sellers or the Purchaser with respect to the Property after the Closing Date
shall be promptly allocated in the manner described herein and the parties shall
promptly pay or reimburse any amount due.
(c) Purchaser shall have no obligation to collect any
accounts receivable allocable to the period prior to Closing. All income
attributable to the Property collected by the Purchaser after the Closing Date
shall be first applied against accounts receivable and other obligations
allocable to the period after the Closing Date. The Sellers shall not xxx an
obligor with respect to the Property that maintains a contractual relationship
with the Purchaser after the Closing Date.
ARTICLE 7
CONDEMNATION: RISK OF LOSS
7.1 Condemnation. In the event of any actual or threatened taking,
pursuant to the power of eminent domain, of all or any portion of the Real
Property, or any proposed sale in lieu thereof, the Sellers shall give written
notice thereof to the Purchaser promptly after the Sellers learn or receive
notice thereof. If all or any part of the Real Property is, or is to be, so
condemned or sold, the Purchaser shall have the right to terminate this
Agreement pursuant to Section 8.3. If the Purchaser elects not to terminate this
Agreement, all proceeds, awards and other payments arising out of such
condemnation or sale (actual or threatened) shall be paid to the Purchaser at
Closing.
7.2 Risk of Loss. The risk of any loss or damage to the Property prior
to the Closing shall remain upon the Sellers. If any such loss or damage occurs
prior to Closing, the Purchaser shall have the right to terminate this Agreement
pursuant to Section 3.3. If the Purchaser elects not to terminate this
Agreement, it may choose to restore the Property itself, in which event Sellers
shall assign or pay, or cause to be paid, to Purchaser all insurance proceeds
payable on account of such loss or damage and the Sellers shall not be
responsible to the Purchaser for any additional sums required to restore the
Property.
ARTICLE 8
LIABILITY OF PURCHASER; INDEMNIFICATION BY SELLERS;
TERMINATION RIGHTS
8.1 Liability of Purchaser. Except for any obligation expressly assumed
or agreed to be assumed by the Purchaser hereunder, the Purchaser does not
assume any obligation of the Sellers or any liability for claims arising out of
any occurrence prior to Closing.
8.2 Indemnification.
(a) The Sellers hereby indemnify and hold the Purchaser
harmless from and against any and all claims, costs, penalties, damages, losses,
liabilities and expenses (including reasonable attorneys' fees) that may at any
time be incurred by the Purchaser, whether before or after Closing, as a result
of any material breach by the Sellers of any of Sellers's representations,
warranties, covenants or obligations set forth herein or in any other document
delivered by the Sellers under this Agreement, or as a result of acts or events
occurring prior to the Closing Date.
(b) The Purchaser hereby indemnifies and holds the Sellers
harmless from and against any and all claims, costs, penalties, damages, losses,
liabilities and expenses (including reasonable attorneys' fees) that may at any
time be incurred by the Sellers, whether before or after Closing, as a result of
any material breach by the Purchaser of any of Purchaser's representations,
warranties, covenants or obligations set forth herein or in any other document
delivered by the Purchaser under this Agreement, or as a result of acts or
events occurring after the Closing Date.
8.3 Termination by Purchaser. If any condition set forth herein cannot
or will not be satisfied prior to Closing, or upon the occurrence of any other
event that would entitle the Purchaser to terminate this Agreement and its
obligations hereunder, the Purchaser, at its option, may elect either (a) to
terminate this Agreement and all other rights and obligations of the Sellers and
the Purchaser hereunder shall terminate immediately and the Deposit, if any,
shall be returned to the Purchaser or (b) to waive its right to terminate and to
proceed to Closing. If the Purchaser terminates this Agreement as a consequence
of a material misrepresentation or breach of a warranty or covenant by the
Sellers, or a failure by the Sellers to perform their obligations hereunder, the
Purchaser shall have all remedies available hereunder or at law or in equity,
including but not limited to the right to specific performance of this
Agreement.
8.4 Termination by Sellers. If, prior to Closing, the Purchaser defaults
in performing any of its obligations under this Agreement (including its
obligation to purchase the Property), the Sellers's sole remedy for such default
shall be to terminate this Agreement and receive the Deposit, if any. The
Sellers and the Purchaser agree that, in the event of such a default, the
damages that the Sellers would sustain as a result thereof would be difficult if
not impossible to ascertain. The Sellers hereby waive and release any and all
other rights and remedies for a default by the Purchaser. Therefore, the Sellers
and the Purchaser agree that, the Sellers shall retain the Deposit, if any, as
full and complete liquidated damages and as the Sellers's sole remedy.
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.1 Completeness; Modification. This Agreement constitutes the entire
agreement among the parties hereto with respect to the transactions contemplated
hereby and supersedes all prior discussions, understandings, agreements and
negotiations between the parties hereto. The provisions of the prior sentence
reflects the true intent of the Sellers and the Purchaser and is intended to be
enforceable, notwithstanding any existing or further case law to the contrary.
This Agreement may be modified only by a written instrument duly executed by the
parties hereto.
9.2 Successors and Assigns. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns.
9.3 Days. If any action is required to be performed, or if any notice,
consent or other communication is given, on a day that is a Saturday or Sunday
or a legal holiday in the jurisdiction in which the action is required to be
performed or in which is located the intended recipient of such notice, consent
or other communication, such performance shall be deemed to be required, and
such notice, consent or other communication shall be deemed to be given, on the
first business day following such Saturday, Sunday or legal holiday. Unless
otherwise specified herein, all references herein to a "day" or "days" shall
refer to calendar days and not business days.
9.4 Governing Law. This Agreement and all documents referred to herein
shall be governed by and construed and interpreted in accordance with the laws
of the state wherein the Property is located.
9.5 Counterparts. To facilitate execution, this Agreement may be executed
in as many counterparts as may be required. It shall not be necessary that the
signature on behalf of both parties hereto appear on each counterpart hereof.
All counterparts hereof shall collectively constitute a single agreement.
9.6 Severability. If any term, covenant or condition of this Agreement,
or the application thereof to any person or circumstance, shall to any extent be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term, covenant or condition to other persons or circumstances, shall not be
affected thereby, and each term, covenant or condition of this Agreement shall
be valid and enforceable to the fullest extent permitted by law and shall be
construed so as to give effect to the intent of the parties.
9.7 Costs. Regardless of whether Closing occurs hereunder, and except as
otherwise expressly provided herein, each party hereto shall be responsible for
its own costs in connection with this Agreement and the transactions
contemplated hereby, including without limitation fees of attorneys, engineers
and accountants.
9.8 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered by hand, by telecopy,
overnight delivery service, or by the United States mail, certified, postage
prepaid, return receipt requested, at the addresses and with such copies as
designated below. Any notice, request, demand or other communication delivered
or sent in the manner aforesaid shall be deemed given or made (as the case may
be) when actually delivered to the intended recipient.
If to the Sellers: Xxxxx X. Xxxxx
Hersha Enterprises, Ltd.
000 Xxxxxxxx Xxxxx, Xxx X
Xxx Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
With a copy to: Xxx X. Xxxx, Esquire
The Shah Law Frim
The Lafayette Building
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Fax: (000)000-0000
If to the Purchaser: Xxxx X. Xxxx
Hersha Hospitality Trust
000 Xxxxxxxx Xxxxx, Xxx X
Xxx Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
With a copy to: Xxx X. Xxxx, Esquire
The Shah Law Frim
The Lafayette Building
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Fax: (000)000-0000
Any party hereto may change its address or designate different or
other persons or entities to receive copies by notifying the other party in a
manner described in this Section.
9.9 Escrow Agent. The Escrow Agent referred to in the definition
thereof contained in Paragraph 1.1 hereof has agreed to act as such for the
convenience of the parties without fee or other charges for such services as
Escrow Agent. The Escrow Agent shall not be liable: (a) to any of the parties
for any act or omission to act except for its own willful misconduct; (b) for
any legal effect, insufficiency, or undesirability of any instrument deposited
with or delivered by Escrow Agent or exchange by the parties hereunder, whether
or not Escrow Agent prepared such instrument; (c) for any loss or impairment of
funds that have been deposited in escrow while those funds are in the course of
collection, or while those funds are on deposit in a financial institution, if
such loss or impairment results from the failure, insolvency or suspension of a
financial institution; (d) for the expiration of any time limit or other
consequence of delay, unless a properly executed written instruction, accepted
by Escrow Agent, has instructed the Escrow Agent to comply with said time limit;
(e) for the default, error, action or omission of either party to the escrow.
The Escrow Agent shall be entitled to rely on any document or paper received by
it, believed by such Escrow Agent, in good faith, to be bona fide and genuine.
It is agreed that the Escrow Agent shall not be disqualified from representing
either party in connection with any litigation which might arise out or in
connection with this Agreement, merely by virtue of the fact that such Escrow
Agent has agreed to act as Escrow Agent hereunder. Further, in that event of any
dispute as to the disposition of the Deposit, if any, or any other monies held
in escrow, the Escrow Agent may, if such Escrow Agent so elects, interplead the
parties by filing an interpleader action in any court having subject matter
jurisdiction of such a matter (to the personal jurisdiction of which both
parties do hereby consent), and pay into the registry of the court the Deposit,
if any, and any other monies held in escrow, including all interest earned
thereon, whereupon such Escrow Agent shall be relieved and released from any
further liability as Escrow Agent hereunder. In the event of such interpleader
action, the Escrow Agent shall not be disabled from representing a party hereto.
Escrow Agent shall not be liable for Escrow Agent's compliance with any legal
process, subpoena, writs, orders, judgments and decree of any court, whether
issued with or without jurisdiction, and whether or not subsequently vacated,
modified, set aside or reversed.
9.10 Incorporation by Reference. All of the Exhibits attached hereto
are by this reference incorporated herein and made a part hereof.
9.11 Survival. All of the representations, warranties, covenants and
agreements of the Sellers and the Purchaser made in, or pursuant to, this
Agreement shall survive Closing and shall not merge into any document or
instrument executed and delivered in connection herewith.
9.12 Further Assurances. The Sellers and the Purchaser each covenant
and agree to sign, execute and deliver, or cause to be signed, executed and
delivered, and to do or make, or cause to be done or made, upon the written
request of the other party, any and all agreements, instruments, papers, deeds,
acts or things, supplemental, confirmatory or otherwise, as may be reasonably
required by either party hereto for the purpose of or in connection with
consummating the transactions described herein.
9.13 No Partnership. This Agreement does not and shall not be
construed to create a partnership, joint venture or any other relationship
between the parties hereto except the relationship of Sellers and Purchaser
specifically established hereby.
IN WITNESS WHEREOF, the Sellers and the Purchaser have caused this
Agreement to be executed in their names by their respective duly-authorized
representatives as a sealed instrument.
SELLERS:
144 Associates, a Pennsylvania limited partnership
By: Xxxxxxxxxxx Enterprises, Ltd., a Pennsylvania
corporation, its sole general partner
By: /s/ X.X. Xxxxx
--------------------------
X.X. Xxxxx, Vice President
344 Associates, a Pennsylvania limited partnership
By: Xxxxxxxxxxx Enterprises, Ltd., a Pennsylvania
corporation, its sole general partner
By: /s/ X.X. Xxxxx
--------------------------
X.X. Xxxxx, Vice President
544 Associates, a Pennsylvania limited partnership
By: Xxxxxxxxxxx Enterprises, Ltd., a Pennsylvania
corporation, its sole general partner
By: /s/ X.X. Xxxxx
---------------------------
X.X. Xxxxx, Vice President
644 Associates, a Pennsylvania limited partnership
By: Xxxxxxxxxxx Enterprises, Ltd., a Pennsylvania
corporation, its sole general partner
By: /s/ X.X. Xxxxx
--------------------------
X.X. Xxxxx, Vice President
PURCHASER:
3544 ASSOCIATES, a Pennsylvania limited partnership
By: HERSHA HOSPITALITY, LLC, a Virginia limited
liability company, its general partner
By: HERSHA HOSPITALITY LIMITED PARTNERSHIP, a
Virginia limited partnership, its sole
member
By: HERSHA HOSPITALITY TRUST, a Maryland
business trust, its sole general
partner
By: /s/ Xxxx X. Xxxx
-------------------------
Xxxx X. Xxxx, President
LIST OF EXHIBITS
Exhibit A Deed
Exhibit B Operating Agreements
Exhibit C Guest Ledger
Exhibit D Sellers's Financial Information
Exhibit E Tangible Personal Properties
