Exhibit 2.2
CONTRACT FOR THE PURCHASE
AND SALE OF PROPERTY
THIS CONTRACT FOR THE PURCHASE AND SALE OF PROPERTY ("Agreement") is made
and entered into this ____ day of June, 1999, by and among RIDGEWOOD ORLANDO,
INC., a Florida corporation ("ROI") and RIDGEWOOD HOTELS, INC., a Delaware
corporation ("RHI"), as sellers (hereinafter sometimes collectively referred to
as "Seller"), FULGENT STREET MOTEL & HOTEL, INC., a Florida corporation, as
purchaser (hereinafter referred to as "Purchaser"), and BROKERS TITLE, L.L.C.,
as escrow agent ("Escrow Agent").
WITNESSETH:
WHEREAS, ROI, a wholly-owned subsidiary of RHI, owns the Ramada Inn North
located at 2025 West S.R. 434, in Longwood, Florida 32779 ("Hotel"); and
WHEREAS, the Hotel is located on that certain tract or parcel of land
described in Exhibit "A" attached hereto and made a part hereof by this
reference (said tract, together with all rights, easements and appurtenances
belonging or appertaining thereto, hereinafter called the "Hotel Tract"); and
WHEREAS, RHI owns that certain lot, tract or parcel of land adjoining the
Hotel Tract described in Exhibit "A-1" attached hereto and made a part hereof by
this reference (said tract, together with all rights, easements and
appurtenances belonging or appertaining thereto, hereinafter called the
"Adjoining Land"; the Hotel Tract and the Adjoining Land are hereinafter
sometimes collectively called the "Land");
WHEREAS, Seller desires to sell the Land, together with the improvements
thereon and certain related tangible and intangible personal property
hereinafter described, and Purchaser desires to purchase the Land, together with
such improvements and other property, subject to and upon the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants contained herein, and other good and valuable consideration, the
receipt, sufficiency and adequacy of which are hereby acknowledged by the
parties hereto, Seller, Purchaser, and Escrow Agent hereby covenant and agree as
follows:
1. Agreement for Purchase and Sale. Seller hereby agrees to sell, transfer
and convey to Purchaser, and Purchaser hereby agrees to purchase from Seller,
subject to and upon the terms and conditions set forth in this Agreement, the
following:
(a) The Land;
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(b) Any and all buildings, structures, and other improvements now or
hereafter located on the Land (collectively, the "Improvements") including,
but not limited to, the hotel buildings (the "Buildings") constructed upon
the Land;
(c) Any and all furniture, fixtures, apparatus, equipment, machinery
and appliances, linens, supplies, and other items of tangible personal
property and replacements thereto and substitutions thereof, if any, owned
by Seller and located on or attached to the Land or used in connection with
the Land or Improvements (collectively, the "Personal Property");
(d) All of Seller's right, title and interest in and to any and all
warranties, guaranties, licenses, and permits related to the Land,
Improvements, or Personal Property or the development or operation of any
of the foregoing (collectively, the "Intangible Property") to the extent
assignable; and
(e) All service contracts, utility contracts, maintenance agreements,
equipment leases, and other operational agreements concerning the operation
of the Property which Purchaser shall elect to assume pursuant to Section
5(b) below (collectively, the "Operating Agreements").
For the purposes of this Agreement, the term "Property" shall collectively
refer to the Land, the Improvements, the Personal Property, the Intangible
Property and the Operating Agreements.
2. Earnest Money. Within three (3) business days after the Date of this
Agreement, Purchaser will deliver to Escrow Agent, as earnest money, the sum of
FIFTY THOUSAND AND NO/100 DOLLARS ($50,000.00), which earnest money (hereinafter
called "Earnest Money") shall be held and released by Escrow Agent in accordance
with the terms of this Agreement. Escrow Agent shall deposit the Earnest Money
in a trust account with a federal savings and loan association, national banking
association, state chartered bank or other depository acceptable to Purchaser
and Seller. Any interest which shall accrue on the Earnest Money shall be paid
to Purchaser as and when such interest shall accrue and become due and payable.
At the consummation of the purchase and sale of the Property as hereinafter
provided, the Earnest Money shall be refunded to Purchaser or credited to the
Purchase Price of the Property. Upon default by either Purchaser or Seller under
the terms of this Agreement, or upon the termination of this Agreement by either
Purchaser or Seller, the Earnest Money shall be paid and applied by Escrow Agent
as hereinafter provided.
3. Purchase Price; Method of Payment. The purchase price (the "Purchase
Price") to be paid by Purchaser to Seller for and in consideration of the
conveyances described in Section 10 hereof shall be SIX MILLION ONE HUNDRED
THOUSAND AND NO/100 DOLLARS ($6,100,000.00); provided, however, the Purchase
Price shall be increased by an amount equal to the wholesale cost of the food
and beverage inventories taken on the evening prior to "Closing" (as hereinafter
defined). Subject to the prorations, credits and adjustments hereinafter set
forth, the Purchase Price shall be payable by Purchaser to Seller at Closing as
follows:
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(a) Purchaser shall take title to the Property subject to that certain
Mortgage, Assignment of Leases and Rents and Security Agreement dated as of
June 30, 1995, by Ridgewood Orlando, Inc., as "Mortgagor," in favor of
Bloomfield Acceptance Company, L.L.C., as "Mortgagee," a copy of which is
attached hereto as Exhibit "C", hereinafter called the "Mortgage", which
was given to secure an indebtedness evidenced by that certain Mortgage Note
(Loan No. 04-05-FL-0000) dated June 30, 1995, by Ridgewood Orlando, Inc.,
as "Maker," in favor of Bloomfield Acceptance Company, L.L.C., as "Payee,"
in the original principal amount of Two Million Eight Hundred Thousand and
No/100 Dollars ($2,800,000.00), a copy of which is attached hereto as
Exhibit "D", hereinafter called the "Note". Purchaser's taking title to the
Property subject to the Mortgage shall be deemed payment of that portion of
the Purchase Price equal to the outstanding principal balance of the
indebtedness secured by the Mortgage on the Closing Date; and
(b) Purchaser shall execute and deliver to RHI a purchase money real
estate note, in the original principal amount of SIX HUNDRED THOUSAND AND
NO/100 DOLLARS ($600,000.00) in the form of, and on the terms and
conditions set forth in, that form attached hereto as Exhibit "E",
hereinafter called the "Purchase Money Note". The indebtedness evidenced by
the Purchase Money Note shall be secured by a first priority purchase money
mortgage executed and delivered by Purchaser to RHI, conveying and covering
the Adjoining Land, in the form of, and on the terms and conditions set
forth in, that form attached hereto as Exhibit "F", hereinafter called the
"Purchase Money Mortgage"; and
(c) The remaining balance of the Purchase Price, after crediting the
Earnest Money, and subject to the prorations and adjustments hereinafter
described, shall be paid by Purchaser to ROI in cash or good Federal Funds
by wire transfer of funds through the Federal Reserve System to Seller's
designated account.
4. Title to Property. Except for those encumbrances and title exceptions
set forth in Exhibit "B" attached hereto and made a part hereof by this
reference (the "Existing Title Exceptions"), Seller hereby represents and
warrants to Purchaser that Seller owns good and marketable fee simple title in
and to the Property free and clear of all liens, assessments, easements,
encroachments, reservations, restrictions, covenants, encumbrances and other
limitations.
Purchaser shall have one hundred twenty (120) days after the Date of this
Agreement to complete an initial examination of the title to the Land and
Improvements and to notify Seller of any objections or defects (hereinafter
referred to as "Defect(s)") affecting the title thereto disclosed by said
examination. In the event said initial examination or any subsequent examination
of the title discloses any Defect, Seller agrees to promptly attempt to cure any
such Defect within fifteen (15) days after receipt of notice thereof. In the
event Seller fails or refuses to cure such Defect prior to the Closing Date,
Purchaser may, at its option: (i) terminate this Agreement by giving written
notice thereof to Seller, whereupon Escrow Agent shall refund the Earnest Money
to Purchaser and this Agreement shall thereupon be of no further force or effect
and no party hereto shall have any further rights, obligations, or liabilities
hereunder; (ii) cure any or all such Defects hereafter created by
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Seller in violation of this Agreement and which remain uncured, in which event
the Purchase Price shall be reduced by an amount equal to the actual, reasonable
costs and expenses incurred by Purchaser in connection with curing such Defects,
in which event the date by which the Closing shall occur shall be extended until
such Defects are cured; (iii) accept the title to the Property subject to such
Defects; or (iv) any combination of the foregoing.
5. Inspection of Property.
(a) Purchaser shall before the Closing have the right and privilege of
going upon the Land and inspecting the Property with its agents or
engineers as needed to inspect, examine, survey and otherwise do what
Purchaser deems necessary in planning for its acquisition and ownership of
the Property; provided that (i) any such inspections shall not unreasonably
interfere with the customary operation of the Property, and (ii) Purchaser
shall indemnify and hold Seller harmless from any damages incurred by
Seller in connection with Purchaser's exercise of such privilege.
(b) Purchaser shall have one hundred twenty (120) days after the Date
of this Agreement (the "Examination Period") in which to examine the
Property and determine to Purchaser's satisfaction in its sole discretion
the condition of the Property (including, without limitation, all
electrical, plumbing, heating, air-conditioning and other systems; roofs;
structures; and the equipment used in connection with the operation of the
Property). During the Examination Period, Seller shall cause the books,
records and other data concerning the Property to be fully available and
accessible to Purchaser and Purchaser's agents for inspection and
examination. Within ten (10) days after the Date of this Agreement, Seller
shall provide to Purchaser copies of all surveys, appraisals, environmental
studies and title insurance policies in Seller's possession, an inventory
of all Personal Property, and copies of the "License Agreement" (as
hereinafter defined) and all Operating Agreements. Within fifteen (15) days
after its receipt of such documents, Purchaser shall give written notice to
Seller of any Operating Agreements which Purchaser declines to assume.
Seller shall cancel and terminate at or prior to the Closing those
Operating Agreements, if any, which Purchaser declined to assume and which
are cancelable without penalty upon sixty (60) or fewer days notice. Within
fifteen (15) days after Seller's receipt of such notice from Purchaser,
Seller shall give written notice to Purchaser that Seller shall either (i)
cause all other Operating Agreements to which Purchaser objected to be
cancelled and terminated at Seller's sole cost and expense at or prior to
the Closing, or (ii) elect to terminate this Agreement, whereupon the
Earnest Money shall be returned to Purchaser and this Agreement shall be
null and void and of no further force or effect; provided that Purchaser
may nullify Seller's election to terminate this Agreement by giving written
notice to Seller, within ten (10) days after receipt of Seller's notice of
termination, that Purchaser waives its objection to such Operating
Agreements and will either assume such Operating Agreements at Closing or
be responsible for the cost of cancellation of such Operating Agreements.
(c) At all times during the Examination Period, Purchaser shall have
the unqualified right to terminate this Agreement, and to an immediate
return of the Earnest Money (less the sum of $100.00 which shall be paid to
Seller as independent consideration for this Agreement) on written notice
to Seller in the event the Property is unacceptable to
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Purchaser, and thereupon this Agreement shall be null and void and of no
further force and effect.
(d) Subject to and except for the Seller's express warranties and
representations set forth in Section 6 below, the Property shall be
conveyed to Purchaser "as is" and Seller disclaims any other
representations or warranties, express or implied, with respect to the
Property, including without limitation, any warranties of merchantability
or fitness for a particular purpose.
(e) Seller and Purchaser acknowledge that Seller's existing license
agreement (the "License Agreement") with Ramada Franchise Systems, Inc., a
Delaware corporation ("Licensor"), provides that Seller shall not sell the
Hotel or assign the License Agreement without the prior approval of
Licensor and that Purchaser must therefore obtain a new license from
Licensor. Purchaser shall promptly make application for such new license
and shall diligently pursue the obtaining of such license at Purchaser's
sole cost and expense. Any new improvements required by Licensor, as a
condition to such new license, shall be the responsibility of Purchaser.
Application for such new license shall be contingent on the Closing and
Purchaser shall do nothing to jeopardize Seller's License Agreement. Seller
shall not be obligated to cancel the License Agreement or take any action
that would result in the cancellation of the License Agreement unless and
until Purchaser has obtained a new license.
6. Warranties of Seller. Each of ROI and RHI, solely as to the portions of
the Property owned by them, respectively, and to induce Purchaser to enter into
this Agreement and to purchase the Property, hereby represents and warrant to
Purchaser, as follows:
(a) Seller is a corporation organized and in good standing under the
laws of the State of Delaware.
(b) Seller has all requisite power and authority to execute and
deliver this Agreement and to perform the obligations of Seller hereunder.
The execution, delivery and performance of this Agreement by Seller does
not and will not violate any provisions of Seller's charter, by-laws or
similar governing instruments, violate any law or governmental or
regulatory rule or regulation, or any order, judgment or award of any court
or administrative agency or any contract to which Seller is a party or
require the consent of any third party.
(c) There are no pending suits, judgments, summonses or proceedings
relating to or arising out of any actual or alleged violation or breach of,
or any deficiency under, any zoning, building, plumbing, electrical, fire,
public hazard, occupational safety, pollution, environmental protection or
waste disposal ordinance, code, law, rule, requirement or regulation of any
entity having jurisdiction over the Property.
(d) To the best of Seller's knowledge, the Property and the operation
thereof fully complies with all ordinances, codes, laws, rules,
requirements and regulations of every entity having jurisdiction over the
Property which may be applicable to the Property or to any portion thereof
or which may be applicable to the use or manner of use, occupancy,
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possession or operation of the Property; and no notice has been given to
Seller of any violation or breach of any ordinance, code, law, rule,
requirement or regulation applicable to the Property.
(e) To the best of Seller's knowledge, neither the Property nor any
portion thereof is subjected to or affected by (1) any special assessments,
whether or not presently constituting a lien thereon, or (ii) any
condemnation, eminent domain, change in grade of public streets, or similar
proceedings.
(f) To the best of Seller's knowledge, no present default or breach
exists under any covenants, conditions, restrictions, rights-of-way or
easements which may affect the Property or any portion or portions thereof
which are to be performed or complied with by the owner of the Property,
and no condition or circumstance exists which, with the passage of time or
the giving of notice, or both, would constitute a default or breach under
any such covenants, conditions, restrictions, rights-of-way or easements.
(g) There are no actions, suits or proceedings of any kind or nature
whatsoever, legal or equitable, affecting title to the Property or any
portion or portions thereof or relating to or arising out of the ownership,
management or operation of the Property, in any court or before or by any
federal, state, county or municipal department, commission, board, bureau
or agency or other governmental instrumentality, and there is no proceeding
pending by or against Seller for the reduction or increase of the assessed
valuation of the Property or any portion or portions thereof.
(h) To the best of Seller's knowledge, all of the licenses, permits,
authorizations and approvals required by all governmental authorities
having jurisdiction have been issued for the operation of the Hotel on the
Property and are in full force and effect, and all fees and charges payable
with respect thereto have been paid. Purchaser shall be responsible for
obtaining replacement licenses, permits, authorizations and approvals for
any license, permit, authorization or approval which is not transferable by
Seller to Purchaser and for any fee, charge or other payment due in
connection therewith.
(i) No person, firm, corporation or other legal entity whatsoever has
any right or option whatsoever to acquire the Property or any portion or
portions thereof or any interest or interests therein.
(j) The execution and delivery of this Agreement and the consummation
of the transactions contemplated herein shall not and do not constitute a
violation or breach by Seller of any provision of any agreement or other
instrument to which Seller is a party or to which Seller may be subject
although not a party nor shall result in or constitute a violation or
breach of any judgment, order, writ, injunction or decree issued against
Seller.
(k) To the best of Seller's knowledge, there are no pollutants,
contaminants, hazardous or toxic wastes in, on or underlying the Property
and the Property has not been used as a landfill or dump site. Seller has
not stored any hazardous substance or toxic materials on, in or under the
Property or permitted the Property to be used for storage of the same; nor
does Seller have knowledge of any prior storage of hazardous materials or
toxic substances on, in or under the Property and/or the assertion of any
environmental or
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other lien on the Property by any governmental agency, authority or
instrumentality to secure the cost and expense of removing or neutralizing
any hazardous substance or toxic materials stored in, on or under the
Property.
(l) To the best of Seller's knowledge, except as shown on the survey
and as disclosed by Seller to Purchaser, there are no encroachments on the
Land; the Improvements which are constructed on the Land do not encroach
upon the land of others; the corners of the Land are clearly marked and
there are no disputes concerning the location of said corners or the
boundaries of the Land.
(m) Seller's books, records and financial statements with respect to
Seller's operation of the Property, including without limitation, sales tax
and income tax returns, profit and loss statements, and other operating
financial information, are accurate and complete in all material respects
and properly reflect the results of operations and financial condition of
the Property for the periods and as of the dates indicated.
(n) Except for the License Agreement and as otherwise set forth on
Exhibit "B" hereto, there are no leases, licenses or concession agreements
affecting the Property or any part thereof.
(o) Seller has properly and timely filed all federal, state, county
and local tax returns (including income, employee withholding, sales tax
and property tax returns) required to have been filed by Seller, and has
paid (or shall pay when due) all taxes shown thereon as due and payable.
(p) Seller shall have paid and satisfied as of the Closing Date any
and all sums and obligations then owed to any past or present employees of
Seller relating to or associated with operation of the Property; without
limiting the generality of the foregoing, Seller shall have paid (or shall
have made provisions for the payment of and shall pay when due) as of the
Closing Date all Social Security, withholding and unemployment insurance
taxes, workers' compensation insurance premiums and other amounts to the
appropriate local, state and federal government agencies then owing. None
of the employees of Seller is represented by any labor union, and there is
not presently in effect any collective bargaining agreement pertaining to
the Property or the employees working thereon. To the best of Seller's
knowledge, there has not ever occurred any labor strike, work stoppage,
interruption or slow down or other labor disturbance in connection with
Seller's operation of the Property. Seller will make any employer
contribution to any "employee benefit pension plan" (within the meaning of
Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended (ERISA)) or any "employee welfare benefit plan" (within the meaning
of Section 3(1) of ERISA) affecting any employee working at the Property
and accrued as of the Closing Date. Seller acknowledges that, although
Purchaser may intend to employ certain of the employees of Seller currently
working at the Property, Purchaser is under no obligation to employ any of
such employees.
(q) The Property is zoned for the operation of a hotel under the
zoning ordinances of Longwood, Florida, with no special conditions to such
zoning and no special covenants restricting the use of the Property for any
purpose permitted under such zoning
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classification. Such zoning classification supports the current use of the
Property. There exist no violations of any requirement or condition to such
zoning classification which is applicable to the Property. Seller has no
knowledge of any proceeding to change such zoning classification or the
conditions applicable thereto and shall not itself apply for or acquiesce
in any such change.
(r) Those public utilities (including, without limitation, water,
electric, gas, sanitary sewage, storm water drainage facilities and
telephone utility) sufficient to operate the Property for its current use
as a hotel are available to the Property and are completed on the Property
and, as may be appropriate, are connected to the Building comprising a part
of the Property. Such utilities enter the Property through adjoining public
streets, and all installation costs, "tap-on" fees, and similar costs for
such utilities have been paid in full.
(s) Seller has no knowledge of any hidden, latent or concealed
structural or mechanical defects in the Property or any portion thereof or
of any infestation or damage by termites or other destructive pests in or
to the Property or any portion thereof. The Improvements and Personal
Property shall, as of the Closing Date, be in at least as good order as
exists on the Date of this Agreement, subject to casualty and ordinary wear
and tear. All guest rooms shall be in rentable condition
7. Covenants and Agreements of Seller. Seller hereby expressly covenants
and agrees as follows:
(a) Seller shall and does hereby agree to indemnify Purchaser from and
against any and all liabilities, claims, costs, liens and demands arising
from and out of or in any manner connected with the Property or the
Operating Agreements and relating to the period prior to the Closing.
(b) At Closing, Seller shall deliver to Purchaser current valid
Certificates of Occupancy or the equivalent for the Property, to the extent
the same are in Seller's possession;
(c) From even date herewith until and including the date of Closing,
Seller shall:
(1) not enter into any lease, license, permit, contract or other
agreement of any kind or nature whatsoever affecting the Property or
any portion or portions thereof, or in any way relating to the
ownership, use or occupancy of the Property or any portion or portions
thereof, without Purchaser's prior written consent, except in the
ordinary course of Seller's business; provided that in no event shall
Seller enter into any new lease or extension of any existing lease or
any other agreement affecting the Property or the operation thereof
which is not terminable without penalty upon thirty (30) or fewer days
notice, without in each instance Purchaser's prior written consent.
(2) comply in all respects with all federal, state and municipal
laws, ordinances, directives, orders, regulations and requirements
which apply to Seller or
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to the Property or to any portion or portions thereof or to any
adjacent street or other public area or to the ownership, maintenance,
operation or use of the Property or any portion or portions thereof,
and shall promptly remedy any violation thereof of which notice shall
have been given by any governmental authority having jurisdiction; and
(3) continue to operate and maintain the Property, from and after
the date hereof and until Closing, in a manner consistent with
Seller's past management practices and calculated to be in the best
interest of the Property, including without limitation, the continued
maintenance of levels of linens and other operating supplies
consistent with Seller's past management practices.
(d) Seller shall promptly notify Purchaser as to any notice which
Seller shall receive as to any actual or threatened action by any person,
firm, corporation, entity, or governmental agency, division or body which
may, or may have the likely effect to, cause a change in the truth of
Seller's warranties or representations made in this Agreement or affect
Seller's ability to perform under the terms and conditions of this
Agreement.
(e) At least one day prior to the expiration of the Examination
Period, Seller shall furnish to Purchaser a termite pest infestation report
from a licensed pest control contractor certifying that the Buildings are
free and clear of all visible evidence of termites, fungus, dry rot,
beetles, other wood destroying insects, cellulose debris or excessive
moisture conditions. If such report discloses that the Buildings are not
free and clear of such visible evidence, then Seller shall cause to be
performed such curative work as may be necessary to treat the cause of such
visible evidence and to render the Buildings free and clear of such visible
evidence and Seller shall deliver to Purchaser at Closing a certificate
from such licensed pest control contractor to the effect that the Buildings
are free and clear of such visible evidence.
(f) Purchaser acknowledges that there are various liquor licenses
associated with the operation of the Hotel. Purchaser represents and
warrants to Seller that it shall make application with the appropriate
governmental agencies during the Examination Period for the issuance or
transfer, as applicable, of such licenses promptly after the date hereof,
and shall diligently pursue the obtaining of such licenses at Purchaser's
sole cost and expense; provided that if such licenses cannot be obtained by
Purchaser prior to Closing, Seller shall cooperate with Purchaser in
maintaining the current liquor licenses for the Hotel until such liquor
licenses are issued to Purchaser (but not longer than ninety (90) days
after Closing) by entering into a liquor license agreement in form and
content reasonably acceptable to Purchaser and Seller ("Liquor License
Agreement") pursuant to which Seller shall incur no cost or liability and
Purchaser shall indemnify, defend and hold Seller harmless from any claims
incurred by Seller in connection with maintaining the current liquor
licenses pursuant to the Liquor License Agreement. Purchaser shall not
impair any existing license or take any action to prevent Seller's licenses
from remaining in full force and effect prior to the Closing.
8. Survival of Seller's Warranties. The Seller's representations and
warranties set forth in this Agreement shall survive the Closing of the
transaction contemplated herein and shall not merge into the delivery of any
deed or other transfer document. Said
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representations and warranties shall expire at the end of the twenty-fourth
(24th) full calendar month after the "Closing Date" (as hereinafter defined);
except for claims made in writing by Purchaser against Seller prior to such
expiration date, and except for fraudulent misconduct as to which Purchaser may
make a claim therefor at any time prior to the end of the applicable statute of
limitations. Seller shall indemnify Purchaser against and hold Purchaser
harmless from any and all damages, losses, suits, claims, judgments or expenses
(including reasonable attorneys' fees) asserted against or suffered by Purchaser
resulting from or arising out of (i) any breach of any representation or
warranty made by Seller herein; (ii) any claim of any third party arising from
circumstances occurring prior to the Closing Date; (iii) any failure of Seller
to duly pay, perform or otherwise discharge any liability or obligation of
Seller accruing prior to the Closing Date; (iv) any claim (against the Property
or Purchaser) arising from any third party based upon any applicable bulk sales
statute as applied to the transaction contemplated by this Agreement; (v) any
claims by former employees of Seller relating to "COBRA" or similar medical or
health insurance arrangements which are obligations of, or are to be made
available by Seller; (vi) any claims by any former employee of Seller relative
to the WARN Act or similar act affecting employees' rights; and (vii) any and
all sales or use tax owing to or claimed by the State of Florida or any other
governmental instrumentality and accrued prior to the Closing of the transaction
contemplated by this Agreement. In the event of any circumstances given rise to
hold-harmless and indemnification protection as set forth above, Purchaser shall
give Seller prompt notice thereof in order to allow Seller the opportunity to
defend, satisfy or otherwise resolve such claim; in the event Seller fails to
properly defend, satisfy or otherwise resolve such claim, Purchaser may do so
and charge the expense, cost or expenditure thereof and any resulting loss
against Seller pursuant to the foregoing indemnity. The foregoing indemnity and
hold-harmless provision shall survive the Closing and shall not be merged into
any deeds or other closing documents executed by the parties.
9. Conditions to Purchaser's Obligations. Notwithstanding any other
provisions of this Agreement to the contrary, all of Purchaser's duties and
obligations under this Agreement shall be conditioned upon and subject to the
complete satisfaction of the following conditions precedent, each of which is
for the sole benefit of Purchaser and any of which may be waived by Purchaser at
Purchaser's sole election.
(a) Each and every warranty and representation made by Seller in this
Agreement shall be true, correct, complete and accurate in all material
respects as of the date hereof and the Closing Date.
(b) Seller shall timely perform each and every duty, obligation,
covenant and agreement of Seller contained in this Agreement, including,
without limitation, the execution and/or delivery by Seller to Purchaser of
each and every instrument referred to in Section 10 hereof.
(c) Purchaser shall be able to obtain an owner's title insurance
policy from Brokers Title, L.L.C. issued on behalf of Old Republic Title
Company on the Closing Date, pursuant to which such company shall insure
Purchaser's title to the Property, based upon the conveyances from Seller
to Purchaser as set forth in this Agreement and the payment by
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Purchaser of not more than the "standard" premium normally charged by such
company for the amount of coverage contained in such policy.
(d) The Land and Improvements shall be in the same condition as at the
date hereof, subject to casualty, condemnation and ordinary wear and tear.
(e) Purchaser shall have received approval from Licensor for the
issuance of a license agreement in favor of Purchaser for the operation of
the Property or approval from Licensor for the transfer of Seller's License
Agreement to Purchaser.
(f) Purchaser shall have received approval for Purchaser's assumption
of the existing mortgage loan secured by the Property in the approximate
amount of TWO MILLION SEVEN HUNDRED THOUSAND AND NO/100 DOLLARS
($2,700,000.00) having an interest rate of ten and thirty-five one
hundredths percent (10.35%) per annum for the remaining term of the loan.
(g) Seller shall provide financial statements of Seller showing that
for the twelve (12) month period ending March 31, 1998, gross income for
the Hotel was greater than or equal to approximately Three Million One
Hundred Twenty-four Thousand One Hundred Ninety-six and No/100 Dollars
($3,124,196.00) and net income before depreciation reserves and interest
was greater than or equal to approximately Eight Hundred Fifty-nine
Thousand Six Hundred Fifty-four and No/100 Dollars ($859,654.00).
(h) All Personal Property shall be transferred free and clear of all
liens, including such Personal Property held in stock, as well as Personal
Property located in the kitchen, restaurants, lounge, conference areas and
Hotel vehicles.
(i) Within thirty (30) days after the Date of this Agreement, Seller
shall provide a list of all items needed for immediate repairs, servicing
or replacements and Seller's good faith estimate of the cost of such
repairs, servicing or replacements.
(j) Within thirty (30) days after the Date of this Agreement, Seller
shall deliver to Purchaser a detailed list of Personal Property and
inventory (excepting the food and beverage inventories, which shall be
taken on the evening prior to Closing) presently located on the Property
and such Personal Property held in stock to be transferred to Purchaser at
Closing. Upon execution of this Agreement, Seller shall provide to
Purchaser Licensor's latest requirements commonly known as a "punch list".
(k) Prior to the expiration of the Examination Period, Seller shall
deliver to the existing manager of the Hotel written notice terminating
Seller's management contract with such manager, effective as of the Closing
Date.
If any such condition shall not be satisfied or expressly waived in writing
by Purchaser prior to the expiration of the Examination Period, then on or
before the expiration of the Examination Period Purchaser may terminate this
Agreement by written notice to Seller, whereupon the Earnest Money shall be
refunded to Purchaser and this Agreement shall be null and void and of no
further force and effect.
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10. Closing and Closing Date. The consummation of the sale by Seller and
the purchase by Purchaser of the Property (herein referred to as the "Closing")
shall be held not later than thirty (30) days after expiration of the
Examination Period, at such time and date ("Closing Date") as shall be
designated by Purchaser in a written notice to Seller not less than ten (10)
days prior to the date specified in such notice. The Closing shall be conducted
by Escrow Agent and shall be held at the offices of Marvin E. Rooks, Esquire
located at 940 Highland Avenue, Orlando, Florida 32802. At the Closing, Seller
shall do the following:
(a) Execute and deliver to Purchaser a special warranty deed, in
recordable form conveying marketable fee simple title in and to the Land
and Improvements to Purchaser, free and clear of all liens, encumbrances
and matters of record other than the Existing Title Exceptions and the
Defects approved by Purchaser pursuant to Section 4 above;
(b) Execute and deliver to Purchaser a special warranty bill of sale,
conveying title in and to the Personal Property to Purchaser, free and
clear of all security interests, liens, charges and encumbrances;
(c) Execute and deliver to Purchaser an assignment, transferring and
assigning all of Seller's right, title and interest in and to the
Intangible Property, as well as any Operating Agreements assigned to
Purchaser;
(d) Execute and deliver to Purchaser an owner's affidavit which has as
its subject matter averments that, with respect to the Property, to the
best of Seller's knowledge, there are no rights or claims of parties in
possession not shown by the public records and that there are no liens, or
rights to a lien, for services, labor or materials furnished and/or imposed
by law and not shown by the public records;
(e) Execute and deliver a Non-Foreign Affidavit with respect to Seller
stating that Seller is not a foreign corporation and providing such party's
U.S. employer identification number.
(f) Deliver possession of the Property and all keys to Purchaser as of
Closing free of any tenants or occupants other than hotel guests in the
ordinary course of business and free of any management contract.
11. Closing Expenses. Purchaser and Seller shall each pay the fees and
expenses of their own attorneys. Seller shall pay any real estate conveyance tax
due and payable in connection with the special warranty deed from Seller to
Purchaser. Purchaser shall pay for the cost of Purchaser's as-built survey,
title examination and title insurance premium. Purchaser shall pay the cost of
recording the deed from Seller. Purchaser shall pay for all tests and
inspections requested by Purchaser including the environmental audit. All other
closing costs shall be paid by the party incurring the cost or apportioned
according to customary practice.
12. Bulk Sales. The parties hereto acknowledge that they have not
determined the applicability of nor complied with the bulk sales statutes in
Florida in connection with the
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transactions contemplated by this Agreement. In the event of any claim by any
third party against Purchaser or the Property relating to noncompliance with
such statute, Seller shall indemnify Purchaser against and hold Purchaser
harmless from any losses or expenses resulting from such claim as set forth in
the foregoing indemnity provisions.
13. Prorations and Adjustments. Except as otherwise specifically set forth
in this Section 13, all income, expenses and costs relating to the Property and
the operation thereof shall be prorated, adjusted and apportioned as of the
Closing Date (with such items to be for the account of Purchaser on the Closing
Date).
(a) Taxes. All real estate and personal property ad valorem taxes and
all special assessments relating to the Property shall be prorated as of
the Closing Date.
(b) Income and Rentals. Income from the rental of rooms shall belong
to Seller to the extent attributable to any period through the day before
the Closing Date, except room charges for the night commencing on the day
before the Closing Date and ending on the morning of the Closing Date shall
be apportioned one-half to Seller and one-half to Purchaser. Income from
food and beverage and other sales or services at the bars, lounges, and
restaurants of the Hotel through the close of business which shall have
commenced on the day before the Closing Date and ended after 12:01 A.M. on
the Closing Date shall belong to Seller. Income from other food and
beverage and other sales or services on the Closing Date shall belong to
Purchaser.
(c) Reservations. On the Closing Date, Seller shall provide Purchaser
with a complete schedule of post-Closing Date confirmed reservations, which
schedule shall list the party for whose benefit the reservation was made,
the amount of prepaid rent thereunder, the amount of any room rental
deposits, and the amount of any other deposits made for advance
reservations, banquets and/or future services to be provided after the
Closing Date. Purchaser will honor, for its account, all pre-Closing Date
reservations as so confirmed by Seller for dates subsequent to the Closing
Date at the rate or price previously agreed to by Seller (so long as such
rates conform to customary rates charged by Seller). Seller shall pay to
Purchaser the amount of all prepayments or deposits disclosed in such
schedule. Seller's accounts receivable shall be transferred to Purchaser,
and Purchaser shall use commercially reasonable efforts to collect such
receivables on Seller's behalf. Upon collection of the same, Purchaser
shall promptly remit to Seller the amount of rentals and guest charges
attributable to the period through the night preceding the Closing Date;
provided that amounts collected shall be applied first by Purchaser to
current obligations accruing from and after the Closing Date.
(d) Utilities. Purchaser shall be responsible for all dealings with
utility service providers with respect to any actions to change over
accounts to Purchaser as of the Closing Date; provided that at Purchaser's
option Seller shall arrange to have all metered utilities read on the
Closing Date. Otherwise, any charges for utilities which are paid on a
monthly basis shall be prorated as of Closing Date. In the event the actual
amounts for such charges for utilities or telephone calls are not known as
of the Closing Date or cannot be billed separately to the responsible
party, such charges shall be prorated between the parties as of the Closing
Date when the actual amounts thereof become known. If necessary, at the
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request of Purchaser, Seller shall complete the customary forms required by
any telephone company or telephone company service provider to assign the
Property's existing telephone number(s) to Purchaser.
(e) Employee Wages. Seller shall pay all wages, salaries and benefits
payable to its employees up to 11:59 p.m. on the day preceding the Closing
Date. Seller shall timely pay all federal, state and other employment taxes
due through such date and time. Purchaser may (but shall not be required
to) continue to employ all or some of Seller's employees with respect to
the Property; however, Purchaser's employment of any employees after
Closing Date shall not be deemed a continuation of Seller's employment of
such employees.
(f) House Bank. Seller shall deliver and transfer to Purchaser at
Closing all amounts contained in the "house bank" at the Property, and
Purchaser shall reimburse Seller for all such amounts through a credit to
Seller on the settlement statement.
(g) Operating Agreements. All accrued obligations for payments due to
third parties under Operating Agreements which Purchaser is assuming at
Closing shall be prorated as of the Closing Date.
Except as otherwise provided herein, to the extent that the amount of any
of the above items shall not be available for exact proration and adjustment as
of the Closing Date, within forty-five (45) days after the Closing Date Seller
or its representative and Purchaser or its representative shall determine,
complete, settle and adjust, or readjust, closing prorations between the parties
as of the Closing Date. All of Seller's liabilities and obligations which can be
paid and satisfied at or prior to the Closing Date shall be so paid. The parties
acknowledge that any such liabilities and obligations which cannot be so paid
prior to the Closing Date or which have accrued but then are unpaid including,
but not limited to, liabilities for utility expenses, sales taxes, unemployment
taxes, social security taxes, income tax withholding and any other federal,
state and local taxes and fees, shall be paid and satisfied by Seller as
promptly as such can be determined and are due and payable.
14. No Assumption of Liabilities. Except as otherwise provided in this
Agreement, Purchaser is not assuming or agreeing to pay or otherwise become
liable for any liabilities, debts or obligations of Seller of any type or nature
(including, without limitation, any taxes, accounts payable or expenses accrued
prior to the Closing Date).
15. Assignment. Purchaser's rights and duties under this Agreement may not
be assigned by Purchaser, in whole or in part, without the prior written consent
of Seller; provided, however, that Purchaser shall have the right to assign its
rights and duties under this Agreement to an affiliate of Purchaser or an entity
in which Purchaser is a general partner or owns a controlling interest. No
assignment shall relieve Purchaser of liability for the performance of
Purchaser's duties and obligations hereunder related to any interest in this
Agreement so transferred or assigned.
16. Defaults. In the event Seller breaches, defaults or fails to comply
with, satisfy or perform any of the covenants, agreements, conditions or
obligations to be performed by
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Seller under the terms and provisions of this Agreement or if any material
representation or warranty of Seller contained in this Agreement is incorrect or
untrue, at Purchaser's option, Purchaser shall be entitled (i) to terminate this
Agreement, by giving written notice thereof to Seller, whereupon Escrow Agent
shall immediately return the Earnest Money to Purchaser, and Seller shall
reimburse Purchaser for all actual, out-of-pocket expenses incurred by
Purchaser, not to exceed $20,000.00, including, but not limited to, the cost of
survey, attorney's fees and environmental studies, and this Agreement shall
thereupon be of no further force or effect and the parties hereto shall not have
any further rights, obligations or liabilities hereunder; or (ii) to seek
specific performance against Seller to require the performance by Seller of its
obligations under this Agreement. In no event shall Seller be liable for any
damages on account of any default under this Agreement. In the event Purchaser
breaches, defaults or fails to comply with, satisfy or perform any of the
covenants, agreements or obligations to be performed by Purchaser under the
terms and provisions of this Agreement, at Seller's option and as its sole
remedy, Seller shall be entitled to retain the Earnest Money as full liquidated
damages, and this Agreement shall thereafter be of no further force or effect
and the parties hereto shall not have any further rights, obligations or
liabilities hereunder.
17. Destruction of Property. In the event the Property or any portions
thereof shall be damaged or destroyed by fire or any other casualty prior to the
Closing Date, Seller shall immediately notify Purchaser thereof, and Purchaser
shall have the option of either: (i) terminating this Agreement by giving notice
thereof to Seller, whereupon Escrow Agent shall immediately return the Earnest
Money to Purchaser and this Agreement shall thereupon be of no further force or
effect and the parties hereto shall not have any further rights, obligations or
liabilities hereunder; or (ii) requiring Seller to convey the remaining portion
of the Property to Purchaser pursuant to the terms and provisions of this
Agreement and to transfer and assign to Purchaser, at the Closing, all of
Seller's right, title and interest in and to any insurance proceeds and/or
recoveries payable as a result of any such damage or destruction. In the event
of any such fire or other casualty, Seller shall not compromise or settle any
claim arising therefrom with any insurance company or any other party without
the prior written consent of Purchaser, which consent shall not be unreasonably
withheld or delayed.
18. Condemnation. In the event the Property or any portion thereof shall
become the subject of any condemnation, eminent domain or other similar
proceedings or be taken or condemned by any governmental authority or other
entity prior to the Closing Date, Seller shall immediately notify Purchaser
thereof, and Purchaser shall have the option of either: (i) terminating this
Agreement by giving notice thereof to Seller, whereupon Escrow Agent shall
immediately return the Earnest Money to Purchaser, and this Agreement shall
thereupon be of no further force or effect and the parties hereto shall not have
any further rights, obligations or liabilities hereunder; or (ii) requiring
Seller to convey the remaining portion of the Property to Purchaser pursuant to
the terms and provisions of this Agreement and to transfer and assign to
Purchaser at the Closing, all of Seller's right, title and interest in and to
any award and/or other compensation made or to be made by reason of such
condemnation or other proceeding. Seller shall not compromise or settle any
claim connected with any such proceeding without the prior written consent of
Purchaser, which consent shall not be unreasonably withheld or delayed.
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19. Real Estate Commission. Seller and Purchaser agree that, except for
United Family Realty and E&M Realty Investments, Inc., whose commission shall be
paid by Seller pursuant to a separate agreement, no broker or agent was involved
in the procurement or negotiation of this Agreement, and no other brokerage fee
or commission is due to anyone in regard to this Agreement or the transaction
contemplated herein. Each of Seller and Purchaser hereby indemnifies and agrees
to hold the other harmless from and against any and all loss, cost, damage or
expense (including, but not limited to, attorney's fees and cost of litigation)
which the other may ever suffer or incur by reason of any demand or claim,
whether or not meritorious, by any broker or agent for any fee, commission or
other compensation with respect to this Agreement or the sale or purchase of the
Property contemplated herein, and arising out of any act or agreement of the
indemnifying party.
20. Notices. All notices required, necessary or desired to be given
pursuant to this Agreement shall be in writing and shall be deemed effective and
given upon date of personal delivery by hand or express courier service or upon
the third (3rd) day after the date upon which such notice shall have been
deposited to the United States Mail, certified, return receipt requested,
postage prepaid and addressed as follows:
(a) If to Seller:
Ridgewood Orlando, Inc.
2859 Paces Ferry Road Suite 700
Atlanta, Georgia 30339
Attn.: Mr. N. R. Walden
with a copy to:
Troutman Sanders LLP
Suite 5200
600 Peachtree Street, N.E.
Atlanta, Georgia 30308-2216
Attn.: John W. Moore, Esq.
(b) If to Purchaser:
Fulgent Street Motel & Hotel, Inc.
2127 Langley Circle
Orlando, Florida 32835
Attn.: Hasan Ahmed
with a copy to:
Marvin E. Rooks, Esq.
940 Highland Avenue
Orlando, Florida 32803
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(c) If to Escrow Agent:
Brokers Title, L.L.C.
2699 S. Lee Avenue
Orlando, Florida 32805-5445
Attn.: Reinhard G. Stephan
21. No Waivers, Entire Agreement. No failure of either party to exercise
any power given hereunder or to insist upon strict compliance with any
obligations specified herein, and no custom or practice at variance with the
terms hereof shall constitute a waiver of any party's right to demand strict
compliance with the terms hereof. This Agreement contains the entire agreement
of the parties hereto with respect to the subject matter hereof.
22. Escrow Agent. Escrow Agent hereby agrees to hold, keep and deliver the
Earnest Money in accordance with the terms and conditions of this Agreement.
Escrow Agent shall not be entitled to any fees or other compensation for its
services as Escrow Agent hereunder. Escrow Agent shall be liable only to hold
the Earnest Money and to deliver same to the parties named herein in accordance
with the provisions of this Agreement, it being expressly understood that by its
execution of this Agreement, Escrow Agent is acting in the capacity of a
depository only, and shall not be liable or responsible to anyone for any
damages, losses or expenses unless same shall be caused by the gross negligence
or willful malfeasance of Escrow Agent. In the event of any disagreement among
any of the parties to this Agreement, or among them or any of them and any other
person, resulting in adverse claims and demands being made in connection with or
for any property involved herein or affected hereby, Escrow Agent shall be
entitled to refuse to comply with any such claims or demands as long as such
disagreement may continue, and in so refusing, shall make no delivery or other
disposition of any property then held by it under this Agreement, and in so
doing Escrow Agent shall not become liable in any way for such refusal, and
Escrow Agent shall be entitled to continue to refrain from acting until (i) the
rights of adverse claimants shall have been finally settled by binding
arbitration or finally adjudicated in a court assuming and having jurisdiction
of the property involved herein or affected hereby or (ii) all differences shall
have been adjusted by agreement and Escrow Agent shall have been notified in
writing of such agreement signed by the other parties hereto. Further, the
Escrow Agent shall have the right at any time after a dispute between Seller and
Purchaser has arisen, to pay the Earnest Money into any court of competent
jurisdiction for payment to the appropriate party, whereupon Escrow Agent's
obligations hereunder shall terminate.
23. Successors and Assigns. The provisions of this Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns.
24. Controlling Law. This Agreement and all rights and obligations of the
parties hereunder shall be construed under and according to the laws of the
State of Florida.
25. No Merger. This Agreement shall not be merged into the documents
executed at the Closing and the terms and provisions hereof shall expressly
survive the delivery of any deed and payment of any sums of money in connection
therewith.
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26. Time of Essence. Time is of the essence of this Agreement and all dates
and periods of time contained herein have entered into and formed a part of the
consideration of this Agreement.
27. Multiple Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.
28. Headings. The headings inserted at the beginning of each paragraph
hereof are for convenience only and do not add to or subtract from the meaning
of the contents of this Agreement.
29. Amendments. This Agreement may only be amended by an amendment in
writing executed by the parties hereto.
30. NonBusiness Days. Whenever action must be taken (including the giving
of notice or delivery of documents) under this Agreement during a certain period
of time or by a particular date that ends or occurs on a nonbusiness day (i.e.,
Saturday, Sunday or a holiday recognized by the U.S. federal government or the
State of Florida), then such period or date shall be extended until the
immediately following business day.
31. Severability. If any term or provision 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 or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
such term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.
32. Attorney's Fees. If any party obtains a judgment against any other
party by reason of breach of this Agreement, a reasonable attorneys' fee as
fixed by the court shall be included in such judgment.
33. Like-Kind Exchange. Purchaser agrees to reasonably cooperate with
Seller in effecting one or more tax-deferred exchanges under Section 1031 of the
Internal Revenue Code, provided that Purchaser shall not be obligated to incur
or assume any expense or liability of any kind whatsoever in connection
therewith and provided further that Purchaser shall not be obligated to take
title to any other property in Purchaser's name. All contracts and documents to
be executed by Purchaser in connection with any such exchange must be reasonably
satisfactory to Purchaser's counsel.
34. Date of Agreement. As used herein, the phrase "Date of this Agreement"
shall mean and refer to the date on which Purchaser, Seller and Escrow Agent
shall have executed this Agreement, and at least one (1) fully-executed
counterpart of this Agreement shall have been delivered to Purchaser.
35. Non-Compete Covenant. Seller covenants and agrees that, for so long as
a written management agreement (the "Management Agreement") between Seller and
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Purchaser exists and is in full force and effect pursuant to which Purchaser
engages Seller to manage the Hotel, Seller shall not, on its own account or as
an employee, consultant, partner, officer, director or shareholder of any other
person or entity, directly or indirectly own, operate, lease, franchise,
conduct, engage in, be connected with, have interest in or assist any person or
entity engaged in any motel or hotel business which is located within ten (10)
miles of the Property without the prior written consent of Purchaser. Seller
further covenants and agrees that, in the event the Management Agreement is
terminated prior to the expiration of six (6) months from the Closing Date,
Seller shall be bound by the terms of the non- compete covenant set forth in
this Section 35 for a period of one (1) year from the date of such termination;
provided, however, in the event the Management Agreement is terminated more than
six (6) months after the Closing Date, Seller shall be bound by the terms of the
non- compete covenant set forth in this Section 35 for a period of six (6)
months from the date of such termination. The terms and provisions of this
Section 35 shall survive the Closing and shall remain in full force and effect
as of the Closing Date.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Purchaser has caused this Agreement to be executed
under seal by its duly authorized corporate officers this ___ day of June, 1999,
as an offer to Seller upon the terms and conditions herein contained. This offer
shall be null and void unless it is accepted by Seller by its execution hereof,
and such acceptance communicated to Purchaser, on or before midnight on the ____
day of June, 1999.
"PURCHASER"
FULGENT STREET MOTEL & HOTEL, INC.,
a Florida corporation
By:
-------------------------------------
Its:
--------------------------------
Attest:
---------------------------------
Its:
--------------------------------
[CORPORATE SEAL]
IN ACCEPTANCE HEREOF, Seller has hereunto executed this Agreement under
seal this ____ day of June, 1999.
"SELLER"
RIDGEWOOD ORLANDO, INC.,
a Florida corporation
By:
-------------------------------------
Its:
--------------------------------
Attest:
---------------------------------
Its:
--------------------------------
[CORPORATE SEAL]
[Signatures continue on following page]
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[Signatures continued from preceding page]
RIDGEWOOD HOTELS, INC.,
a Delaware corporation
By:
--------------------------------------
Its:
----------------------------------
Attest:
----------------------------------
Its:
----------------------------------
[CORPORATE SEAL]
Escrow Agent joins in the execution of this Agreement solely to evidence
the acceptance of its responsibilities as the escrow agent under this Agreement.
"ESCROW AGENT"
BROKERS TITLE, L.L.C.
By:
-------------------------------------
Its:
--------------------------------
Date:
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