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EXHIBIT 10.13
COMMONWEALTH OF KENTUCKY
COUNTY OF ______________
SALES CONTRACT
THIS SALES CONTRACT ("Contract") is made as of the Date of this
Contract (as defined in the last paragraph below) among the following parties:
Purchaser: WINN Limited Partnership,
a North Carolina limited partnership
2209 Century Drive, Suite 300
Raleigh, North Carolina 27622
Attention: Robert W. Winston, III
Seller: Russell Parman and wife, Ruby Parman
410 Whitley Road
London, Kentucky 40741
Escrow Agent: The Title Company of North Carolina, Inc.
Post Office Box 2718
Raleigh, North Carolina 27602
Attention: F. Alton Russell, Esquire
W I T N E S S E T H T H A T:
WHEREAS, Seller is the owner of the Property (as hereinafter defined); and
WHEREAS, Seller desires to sell the Property and Purchaser desires to
purchase the Property from Seller;
NOW, THEREFORE, in consideration of the agreements contained herein,
the Earnest Money, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
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1. Property. Seller agrees to sell, and Purchaser agrees to
purchase from Seller, the land described on Exhibit A, together with all
rights, specifically including, but not limited to, timber rights, members, and
appurtenances thereto and together with all improvements and fixtures located
thereon (the "Property"). The Property contains approximately one (1) acre,
with the exact acreage thereof to be determined in accordance with the survey
to be provided by Purchaser in accordance with paragraph 20 hereof.
Additionally, Seller agrees to provide Purchaser with copies of all studies,
reports and plans, if any, which Seller has compiled relative to the
development of the Property and assign all rights in any of the foregoing to
Purchaser as set forth in paragraph 20.
2. Earnest Money. Purchaser shall deliver to Escrow Agent the
sum of Twenty Five Thousand and N0/100 Dollars ($25,000.00) as the earnest
money, to be delivered to Escrow Agent within five (5) days after the Date of
this Contract. Such sum, together with all interest earned thereon is
hereinafter referred to as the "Earnest Money". The Escrow Agent is hereby
authorized and directed to invest such sum in interest bearing obligations of a
bank in the state in which the Property is located. The Earnest Money shall be
retained or refunded, as the case may be, in accordance with the terms of this
Contract and shall be applied as a credit against the Purchase Price at
Closing.
3. Purchase Price. The purchase price (the "Purchase Price") of
the Property shall be One Hundred Fifty Thousand and
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N0/100 Dollars ($150,000.00) payable in cash at Closing. The Purchase Price is
based on the Property being properly zoned so as to permit and allow
Purchaser's intended use of the Property set forth in paragraph 20.
4. Costs and Prorations.
4.1 Purchaser shall pay the Commonwealth of Kentucky property
transfer tax applicable to this transaction. Purchaser shall pay the cost of
recording the general warranty deed. Each party shall pay its own attorney's
fees. Seller shall pay the costs of the title insurance commitment and survey
which Seller shall provide pursuant to paragraph 20. Purchaser shall pay the
premium for the title insurance policy which may be issued to Purchaser
pursuant to the title insurance commitment provided by Seller.
4.2 Ad valorem taxes assessed against the Property for
the year in which Closing occurs shall be prorated as of the date of Closing.
If the proration is not based on the actual tax bill for the year in which
Closing occurs, the parties agree to adjust the proration when the actual tax
bill is available.
5. Title. Seller shall convey good, marketable, fee simple and
insurable title to the Property to Purchaser by general warranty deed. The
title may be subject to current and future ad valorem property taxes, general
utility easements serving the Property only and zoning, municipal land use
rules, regulations, ordinances and statutes which do not prohibit or impair in
any way Purchaser's intended use of the Property as set
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forth in paragraph 20. The Property shall not be subject to any (i) deed of
trust, mortgage, security agreement, judgment, prepaid assessments for
improvements, lien or claim of lien, or any other title exception or defect
that is monetary in nature, Seller hereby agrees to pay and satisfy of record
any such title defects or exceptions prior to or at Closing at Seller's
expense, or (ii) any leases, rental agreements or other rights of occupancy of
any kind, whether written or oral. As to any other title exceptions or defects
not covered by the preceding two sentences, including, but not limited to
easements or restrictions, Purchaser shall have until the expiration of the
Feasibility Period to review the title insurance commitment to be provided by
Seller and the title exceptions listed therein and to notify Seller in writing
of any objections which Purchaser may have. If Purchaser fails to give any
notice to Seller by such date, Purchaser shall be deemed to have waived this
right to object to any other title exceptions or defects. If Purchaser does
give Seller notice of objection to any other title exceptions or defects,
Seller shall then have the right, but not the obligation, for a period of ten
(10) days after receipt of such notice within which to cure or satisfy such
objection ("cure period"). If the objection is not so satisfied by Seller,
then Purchaser shall have the right to terminate this Contract, in which case
the Earnest Money shall be returned to Purchaser and neither party shall have
any further rights, obligations or duties under this Contract. If Seller does
so cure or satisfy
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the obligation, then this Contract shall continue in effect. Purchaser shall
have the right at any time to waive any objections that it may have made and
thereby to preserve this Contract in effect. Seller agrees not to further
encumber in any way Seller's title to the Property after the Date of this
Contract.
6. Closing. Purchaser has entered into a contract to purchase
that certain Comfort Suites hotel containing 62 rooms located in London,
Kentucky ("the Hotel"), which is located upon certain real property which
adjoins the Property. Subject to paragraphs 20 and 22, the closing or
settlement ("Closing") of the transaction contemplated hereby shall be held in
the area in which the Property is located during regular business hours and
shall occur concurrent with the closing of the Hotel.
7. Real Estate Commission. Purchaser and Seller do hereby
represent each to the other that they know of no realtor, agent or other party
involved in this transaction who is entitled to, or has a claim for, a real
estate commission or fee and neither Seller or Purchaser has employed any such
party. Seller and Purchaser covenant and agree to indemnify and forever hold
each other harmless against any loss, liability, costs, claims, demands,
damages, actions, causes of action, and suits arising out of or in any manner
related to the alleged employment or use by Seller or Purchaser, as the case
may be, of any real estate broker or agent.
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8. Inspection. Purchaser and Purchaser's agents, employees and
independent contractors shall have the right and privilege to enter upon the
Property prior to Closing to inspect the Property and to conduct soil borings
and other geological, environmental, engineering, or landscaping tests or
studies, all at Purchaser's sole cost and expense. The right shall be
exercised after notice to Seller, and Seller or Seller's designated
representative or agent shall have the right to be present. Purchaser agrees
to refill and repair any holes created while conducting soil borings and to
minimize disturbance or damage which may be caused. Purchaser hereby covenants
and agrees to indemnify and hold Seller harmless from any and all loss,
liability, costs, claims, demands, damages, actions, causes of actions, and
suits arising out of or in any manner related to the exercise by Purchaser of
Purchaser's rights under this paragraph.
9. Eminent Domain. If, after the Date of this Contract and prior
to Closing, Seller receives notice of the commencement or threatened
commencement of eminent domain or other like proceedings against the Property
or any portion thereof, Seller shall immediately notify Purchaser in writing,
and Purchaser shall elect within ten (10) days from and after such notice, by
written notice to Seller, either: (i) to terminate this Contract, in which
event the Earnest Money shall be returned to Purchaser and this Contract shall
be null and void and of no further force and effect; or (ii) to close the
transaction contemplated hereby
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in accordance with its terms but subject to such proceedings, in which event
the Purchase Price shall not be reduced, and Seller shall assign to Purchaser,
Seller's rights in any condemnation award or proceeds relative to the Property.
If Purchaser does not make such election within the aforesaid time period,
Purchaser shall be deemed to have elected to close the transaction contemplated
hereby in accordance with clause (ii) above.
10. Notice. Each notice required or permitted to be given
hereunder must comply with the requirements of this paragraph. Each such
notice shall be sent by personal hand delivery, by depositing it with a
nationally recognized overnight courier service or by depositing it with the
United States Postal Service or any official successor thereto, certified or
registered mail, return receipt requested, with adequate postage prepaid,
addressed to the appropriate party (and marked to a particular individual's
attention) as hereinbefore provided. Each such notice shall be effective upon
being so hand delivered or deposited, but the time period in which a response
to any such notice must be given or any action taken with respect thereto shall
commence to run from the date of delivery if by personal hand delivery or
overnight courier service or the date of receipt of the notice by the addressee
thereof if mailed as set forth above, as evidenced by the return receipt.
Rejection or other refusal by the addressee to accept delivery or the inability
to deliver because of a changed address of which no notice was given
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shall be deemed to be the receipt of the notice sent. In the event that
registered or certified mail service is not being provided by the United States
Postal Service or any official successor thereto at the time in question, each
notice may then be served by personal service or sent by regular mail to the
address as hereinbefore provided. The addresses of the parties shall be those
set forth on the first page of this Contract. With respect to any notices to
be given to Purchaser hereunder, a copy shall also be delivered as follows:
William W. Bunch, III
Brown & Bunch
4900 Falls of Neuse Road, Suite 210
Raleigh, North Carolina 27609
With respect to any notices to be given to Seller hereunder, a copy
shall also be delivered as follows:
___________________________
___________________________
___________________________
Any party shall have the right from time to time to change the address
to which notices to it shall be sent and to specify up to two additional
addresses to which copies of notices to it
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shall be sent by giving to the other party at least fifteen (15) days prior
notice of the changed address or additional addresses.
11. Documents. At or prior to Closing, each party shall deliver
to the other party appropriate evidence to establish the authority of such
party to enter into and close the transaction contemplated hereby. Seller
shall also deliver to Purchaser at Closing Seller's general warranty deed
containing a legal description of the Property drafted in accordance with the
survey of the Property to be provided by Seller in accordance with paragraph 21
hereof and an affidavit of title with respect to the Property in form
reasonably satisfactory to Purchaser's title insurer to issue title insurance
without exception for mechanic's or materialmen's or other statutory liens or
for the rights of parties in possession. Seller shall also deliver an
affidavit in order to meet the requirements of Internal Revenue Code Section
1445 (non-foreign affidavit) and shall provide such information as is necessary
and required for the closing attorney to comply with the reporting requirements
of Internal Revenue Code Section 1099. The parties shall also deliver at
Closing any other documents reasonably necessary to complete and evidence the
transaction contemplated hereby.
12. Remedies. In the event that this transaction fails to close
by reason of Purchaser's failure to perform its obligations under this
Contract, the Earnest Money shall be retained by Seller as full liquidated
damages in complete and total accord and satisfaction, the parties hereby
acknowledging and agreeing
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to the difficulty of ascertaining Seller's actual damages in such
circumstances. In the event that Seller fails or refuses to convey the
Property in accordance with the terms of this Contract or otherwise perform its
obligations hereunder after all conditions precedent to Seller's obligations to
close have been met, then Purchaser shall have the right to a return of the
Earnest Money or to seek all rights and remedies available at law or in equity,
including the right to seek specific performance of Seller's obligations under
this Contract, including the conveyance of the Property in accordance with the
terms of this Contract, together with the costs and expenses incurred by
Purchaser in specifically enforcing this Contract, including reasonable
attorney's fees actually incurred by Purchaser.
13. Entire Agreement. This Contract constitutes the entire
agreement of the parties and may not be amended except by written instrument
executed by Purchaser and Seller. Escrow Agent need not be a party to
amendments to this Contract, but such amendments shall not affect or impair his
rights or duties hereunder.
14. Headings. The paragraph headings are inserted for convenience
only and are in no way intended to interpret, define, or limit the scope of
content of this Contract or any provision hereof.
15. Possession. Seller shall deliver actual possession of the
Property at Closing.
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16. Surviving Clauses. The provisions of this Contract relating
to tax prorations after Closing, Purchaser's indemnification with respect to
its entering upon the Property prior to Closing, Seller's and Purchaser's
indemnification concerning real estate commissions or brokerage fees, shall
survive any Closing pursuant to this transaction or any termination of this
Contract by either party as a matter of right hereunder or in breach of this
Contract, notwithstanding any other provisions in this Contract to the
contrary. Except as set forth in the preceding sentence or as otherwise
expressly set forth herein, all other provisions of this Contract shall not
survive the Closing of this transaction or any termination hereof by either
party as a matter of right.
17. Applicable Law. This Contract shall be construed, interpreted
and enforced in accordance with the laws and decisions of the Commonwealth of
Kentucky.
18. Successors and Assigns. This Contract shall be binding upon
and inure to the benefit of Seller, Purchaser and Escrow Agent, and their
respective successors and assigns, if any. The Purchaser's rights under this
Contract are assignable provided such assignee shall expressly assume and agree
to all of the terms and obligations of Purchaser set forth in this Contract or
any written amendment hereto.
19. Exhibits. The exhibits referred to in and attached to this
Contract are incorporated herein by this reference.
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20. Feasibility Study. The Purchaser's obligations under this
Contract are subject to and conditional upon Purchaser's satisfaction with
respect to the following:
20.1 The overall economic feasibility of Purchaser's intended
use of the Property (which, at Purchaser's election, is the
development, construction and operation of a free standing
hotel/motel upon the Property containing at least 60 rooms or
an expansion of the Hotel by at least 60 rooms).
In order to assist Purchaser in determining the foregoing, Seller
shall provide certain items to Purchaser for inspection as follows:
(a) within ten (10) days after the Date of this Agreement, copies of
any existing engineer's reports, environmental reports, surveys or other
reviews, evaluations or studies of or with respect to the Property;
(b) within ten (10) days after the Date of this Agreement, copies of
any leases, contracts and permits pertaining in any way to the Property and the
ownership and operation thereof;
(c) within twenty (20) days after the Date of this Agreement, a title
insurance commitment relative to the Property issued by First American Title
Insurance Company and copies of all exceptions from coverage shown thereon;
and,
(d) within twenty (20) days after the Date of this Agreement, a survey
prepared by a duly licensed surveyor dated subsequent to the date hereof and
sufficient to obtain title
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insurance coverage for matters of survey in accordance with the matters
disclosed thereon.
Purchaser shall have sixty (60) days from and after the Date of this
Contract (the "Feasibility Period") by which to make such investigations and
studies with respect to the foregoing as Purchaser deems appropriate and to
give notice to Seller if any of the foregoing are not satisfactory to the
Purchaser, in Purchaser's sole discretion. If Purchaser fails to give any
notice prior to the end of the Feasibility Period, then such conditions shall
be deemed to have been waived by Purchaser and this Contract shall remain in
full force and effect. If Purchaser does give notice of such objections, then
this Contract shall be thereby terminated, with Seller having the right to
retain $100.00 of the Earnest Money (such amount in effect constituting option
money for said time period), with the remainder of the Earnest Money being
returned to Purchaser and the parties having no further rights, obligations or
duties under this Contract. The conditions enumerated above are for
Purchaser's benefit only, and the non-occurrence of a state of facts sufficient
to satisfy any of the conditions above may not be used or pleaded by Seller as
a defense to the enforceability of this Contract.
21. Escrow Agent. In performing any of its duties hereunder, the
Escrow Agent shall not incur any liability to anyone for any damages, losses or
expenses, except for willful default or breach of trust, and he shall
accordingly not incur
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any such liability with respect (i) to any action taken or omitted in good
faith upon advice of his counsel or (ii) to any action taken or omitted in
reliance upon any instrument, including any written notice or instruction
provided for in this Contract, not only as to its due execution and the
validity and effectiveness of its provisions but also as to the truth and
accuracy of any information contained therein, which the Escrow Agent shall in
good faith believe to be genuine, to have been signed or presented by a proper
person or persons and to conform with the provisions of this Contract. The
Escrow Agent is hereby specifically authorized to refuse to act except upon the
written consent of both parties, or lawful order issued by a court or competent
jurisdiction. The parties hereby agree to indemnify and hold harmless the
Escrow Agent against any and all losses, claims, damages, liabilities and
expenses, including reasonable costs of investigation and counsel fees and
disbursements, which may be imposed upon the Escrow Agent or incurred by the
Escrow Agent in connection with its acceptance or the performance of its duties
hereunder, including any litigation arising from this Contract or involving the
subject matter hereof. In the event of a dispute between any of the parties
hereto sufficient in the discretion of the Escrow Agent to justify his doing
so, the Escrow Agent shall be entitled to tender into the registry or custody
of any court of competent jurisdiction all money or property in his hands under
this Contract, together with such legal pleadings as he deems appropriate, and
thereupon be
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discharged from all further duties and liabilities under this Contract. Any
such legal action may be brought in such court as the Escrow Agent shall
determine to have jurisdiction thereof. The parties shall bear all costs and
expenses of any such legal proceedings.
22. Conditions Precedent to Purchaser's Obligation to Close. In
order for Purchaser to implement its intended use and development of the
Property, it is necessary that certain assurances and agreements be received by
Purchaser and the conditions specifically set forth herein be satisfied in
accordance with the terms and provisions set forth herein prior to Closing.
Therefore, Purchaser's obligations under this Contract are expressly
conditioned upon Purchaser's satisfaction with respect to the matters set forth
hereinafter:
(1) The acquisition and closing of the Hotel by Purchaser; and
(2) Seller acknowledges that Purchaser is a real estate investment
trust and in accordance therewith, Purchaser's obligation to close
this transaction shall be conditioned upon Purchaser obtaining the
approval of this Contract and the transaction contemplated herein from
the board of directors of the general partner of Purchaser, Winston
Hotels, Inc.
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The failure to satisfy either of the foregoing conditions, shall give
Purchaser the right to terminate this Contract, with Seller having the right to
retain $100.00 of the Earnest Money (such amount in effect constituting option
money for said time period), with the remainder of the Earnest Money being
returned to Purchaser and the parties having no further rights, obligations or
duties under this Contract. The conditions enumerated above are for
Purchaser's benefit only and the non-occurrence of a state of facts sufficient
to satisfy any of the conditions above may not be used or pleaded by Seller as
a defense to the enforceability of this Contract. In the event Purchaser shall
waive an unsatisfied condition and preserve this Contract in effect, Closing
shall occur in accordance with paragraph 6.
23. Offer, Acceptance and Contract. This document shall
constitute an offer by Purchaser. If this offer is accepted by Seller, it
shall become a binding Contract between them when signed by Purchaser which
signing by Purchaser shall occur on the date of receipt of two (2) signed
originals from Seller. The validity of this Contract between Purchaser and
Seller shall not be affected by whether or not the Escrow Agent has signed this
Contract or any amendments hereto. As used herein, the phrase "Date of this
Contract" shall mean the date on which the Contract is executed by both
Purchaser and Seller.
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IN WITNESS WHEREOF, Seller, Purchaser and Escrow Agent set their hands
and seals hereto as of the date and year indicated next to their signatures.
PURCHASER:
WINN Limited Partnership,
a North Carolina limited partnership
By: Winston Hotels, Inc.,
a North Carolina corporation
and sole general partner
(Corporate Seal) By:__________________________________
President
Attest:
______________________________
_____________________Secretary
Date Signed by Purchaser:
_______________________________, 1996
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STATE OF NORTH CAROLINA
COUNTY OF WAKE
I, a Notary Public of the County and Commonwealth aforesaid, certify
that __________________________________________________, personally came before
me this day and acknowledged that __he is ______________ Secretary of Winston
Hotels, Inc., a North Carolina corporation, as sole general partner of WINN
Limited Partnership, a North Carolina limited partnership, and that by
authority duly given and as the act of the corporation as such general partner,
the foregoing instrument was signed in its name by its _______ President,
sealed with its corporate seal and attested by ___________________ as its
___________Secretary. Witness my hand and official stamp or seal, this the
____ day of _____________, 1996.
My Commission Expires: _________ __________________________________
Notary Public
(SEAL)
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SELLER:
____________________________(SEAL)
Russell Parman
____________________________(SEAL)
Ruby Parman
Date signed by Seller:
__________________________, 1996
COMMONWEALTH OF KENTUCKY
COUNTY OF _______________
I, a Notary Public of the County and Commonwealth aforesaid, certify
that Russell Parman and Ruby Parman personally appeared before me this day and
acknowledged the execution of the foregoing instrument. Witness my hand and
official stamp or seal this ____ day of ___________ , 1996.
My Commission Expires: ________ _________________________________
Notary Public
(SEAL)
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Agreed to for purposes of serving as Escrow Agent hereunder and I
hereby acknowledge receipt of the Earnest Money for the purposes set forth
herein.
The Title Company of North Carolina,
Inc.
By:___________________________________
F. Alton Russell, President
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