Attached files
| file | filename |
|---|---|
| S-1 - WINDGATE ACQUISITION LTD | v210183_s1.htm |
| EX-3.2 - WINDGATE ACQUISITION LTD | v210183_ex3-2.htm |
| EX-2.3 - WINDGATE ACQUISITION LTD | v210183_ex2-3.htm |
| EX-2.1 - WINDGATE ACQUISITION LTD | v210183_ex2-1.htm |
| EX-3.1 - WINDGATE ACQUISITION LTD | v210183_ex3-1.htm |
| EX-4.1 - WINDGATE ACQUISITION LTD | v210183_ex4-1.htm |
| EX-23.1 - WINDGATE ACQUISITION LTD | v210183_ex23-1.htm |
PURCHASE
AND SALE AGREEMENT
1. PARTIES: This
Purchase and Sale Agreement (the “Contract”) is made by JM
Daniel, LLC, a Montana limited liability company as “Seller” and Windgate
Capital Partners LLC, a Delaware limited liability
company and/or permitted assigns as “Buyer” and is effective as of
the later of the date this Contract is executed by Buyer and Seller, (the
“Effective Date”).
2. PROPERTY: Subject
to the terms and conditions of this Contract, Seller agrees to sell to Buyer,
and Buyer hereby agrees to purchase, the following described real property,
personal property and intangible personal property owned by Seller and/or
comprising MICROTEL-612
NIKLES DRIVE BOZEMAN MT.
Such real property, tangible personal property and intangible personal
property shall be collectively referred to in this Contract as the “Property”.
The precise legal description of the real property shall be provided by Seller
and shall be incorporated herein by reference as Exhibit A, and made part of
this Contract.
(a) the
real estate, together with any buildings and improvements thereon, and all
easements, rights and appurtenances, legally described in Exhibit A attached
hereto and by this reference incorporated herein; and
(b) all
tangible personal property, including, but not limited to, if any, all
mechanical systems, furniture, furnishings, fixtures, televisions, radios,
clocks, inventories (including, but not limited to linen, uniform, soft goods,
paper goods, linens, liquor, wine, beer, soft drinks, food and supplies at usual
and customary levels), machinery, equipment, heating, ventilating and
air-conditioning equipment, electrical systems signs and lighting, plumbing
equipment and fixtures, floor coverings, commercial washers and
dryers, ice machines, keys, maintenance equipment and supplies,
business and office equipment including copier, fax, front desk computers,
monitors and printers, credit card readers and printers, security system and
cameras, vans, vehicles, lawn maintenance
equipment including mowers and tractors
and all other equipment and supplies used in the operation of the Property
(excluding, however, Seller’s proprietary management materials, if any,
corporate employee policies and original employment files, corporate manuals,
handbooks, websites, and corporate forms. And, further excluding any and all
equipment, operating and reservation systems and the like of which are not owned
by Seller, but have been provided as part of any franchise system or third party
license agreement). Subject to the provisions of this Article 2(b), all personal
property used in the operation of the Property and located on the Property as of
the Effective Date, shall remain with the Property. Seller shall provide an
itemized listing of all furniture, furnishings, fixtures, equipment, and other
personal property, used in the operation of the Property (the “FF&E
Inventory”) ten (10) days prior to Closing. At Buyer’s election, an inspection
of the personal property and review of the FF&E Inventory may be conducted within
two (2) weeks prior to Closing, provided, however, such FF&E Inventory
review shall not be a contingency to Closing so long as the FF&E Inventory
is substantially the same in content and quality as of the Effective
Date. All such personal property shall be conveyed to Buyer, upon
Closing, by a Bill of Sale, in a form and substance satisfactory to Seller and
Buyer with the FF&E Inventory attached as an exhibit to the Bill of
Sale.
Seller(s)______/______
Buyer(s)______/______
1
Notwithstanding
the excluded tangible personal property described heretofore, any other tangible
personal property specifically excluded by Seller, of which is not owned by
Seller or shall be removed by Seller, shall be provided to Buyer within 7 days
of the Effective Date, said excluded items to be identified, listed and attached
to this Contract as Exhibit B and incorporated herein by this reference. Such
items to be removed shall to identified as “To be removed”. Furthermore, any
equipment to remain with the Property, but is owned by others as part of a
lease, contract, service agreement, trade out agreement and the like,
shall also be listed and included in Exhibit C, such equipment to be identified
as “Owned by others, remains with the Property”.
(c) All
intangible personal property and rights, privileges and appurtenances,
including, but not limited to, if any, goodwill, telephone numbers, room
reservations, service or trade marks, mailing lists, register books, rental
records, guest records, promotion records, tenant or guest deposits, customer
data sheet, franchise or marketing materials (excluding Seller’s proprietary
materials), site or building plans, surveys, plans and specifications,
engineering or architectural plans and reports, floor plans, landscaping or
underground irrigation plans, soil reports, environmental reports, drawings,
copies of pertinent business records, permit, licenses, leases, contracts and
agreements, all to the extent assignable or transferable.
3. EXCEPTIONS: The
Property shall be subject to the Permitted Exceptions (as defined in Article 14
of this Contract), including all zoning ordinances, laws and the leases
currently in effect on the above-described Property which shall be subject to
Buyer’s review in accordance with Articles 8 and 15 of this
Contract.
4. PURCHASE
PRICE: The purchase price
$[REDACTED] (the “Purchase Price”), payable by Buyer to Seller, as
follows:
(a) ($ 10,000.00)
as earnest money, (the “Earnest Money”), shall be deposited by Buyer, within ten
(10) business days of the Effective Date of this Contract, in an
interest bearing insured trust escrow account with SECURITY
TITLE COMPANY (“Escrow Agent”). In order to facilitate
deposit of the Earnest Money in an interest bearing account, Buyer shall provide
its Federal Employer Identification Number (FEIN #) or Social Security Number
(whichever applies), directly to Escrow Agent. Interest
earned upon the Earnest Money, shall accrue to the benefit of the Buyer and the
Earnest Money, together with all interest earned, shall be applied toward the
Purchase Price at Closing.
(c) $
[REDACTED], at
closing, as may be adjusted at closing for prorations, closing costs and
other agreed upon expenses.
5. CLOSING
DATE: Subject to all the provisions of this Contract, the
closing of this Contract (the “Closing”) shall take place at the offices of the
Escrow Agent on Month
Day Year, or prior thereto by mutual consent, and possession shall be
delivered at Closing. Any closing costs and the costs of recording of the deed
and release documents assessed by the Escrow Agent shall be equally divided
between the parties. Closing Date shall be extended an additional 30
days, if requested in writing by Financial Institution or SBA.
6. FINANCING
CONTINGENCY: This Contract shall be subject to Buyer
obtaining financing acceptable in its sole discretion (the “Financing
Contingency”). Buyer shall make diligent efforts to apply and to acquire said
financing. The term of this Financing Contingency shall be forty five (45) days
after the Effective Date hereof. Buyer shall provide copies of any
and all written loan proposals to Seller within two (2) days of receipt of same
by Buyer. If Buyer is unable to obtain financing as set forth herein, prior to
expiration of the Financing Contingency, Buyer shall have the option to
terminate this Contract by serving written notice of termination to the Seller.
If this Contract is so terminated by either Buyer or Seller, all of the Earnest
Money paid by Buyer together with interest earned thereon shall be returned to
Buyer and the parties will have no further obligation, one to the other. In the
absence of written notification of termination by Buyer, the Earnest Money shall
become non-refundable with respect to this Financing Contingency.
Seller(s)______/______
Buyer(s)______/______
2
7.
PRORATIONS: (a) Seller shall pay all general real estate
and personal property taxes, taxes levied and assessed against the Property, and
all installments of special assessments for the years prior to the calendar year
of Closing. All such real estate and personal property taxes and
installments of special assessments becoming due and accruing during the
calendar year of Closing shall be prorated between Seller and Buyer on the basis
of such calendar year as of Closing, all of which will be prorated by Title
Company and shall be included on the Closing Statement. If the amount
of such taxes cannot be ascertained, proration shall be computed on the amount
of the preceding year’s tax or special assessment. Buyer shall assume
and pay all such taxes and installments of special assessments accruing after
the Closing. (b) Seller shall pay, when due, all state and local retail sales
taxes, including any transient, tourism, and lodging taxes and the like,
attributable to the operation of the Property up to and including the date of
Closing. Buyer shall pay all state and local retail sales tax, , including any
transient, tourism, and lodging taxes and the like, attributable to the Property
after the date of Closing.
8. EXECUTORY CONTRACTS AND OTHER
AGREEMENTS: Copies of all leases, franchise
agreements, technology and entertainment agreements, executory contracts,
service contracts, advertising agreements, operating and maintenance
agreements (collectively the “Vendor Agreements”) with vendors and other third
parties with which the Seller does business in connection with the operation of
the Property, shall be provided to Buyer within seven (7) business
days of the Effective Date, with a list of the Vendor Agreements to be attached
to this Contract as Exhibit D, and is incorporated
herein by this reference. Subject to Buyer’s review and approval of the Vendor
Agreements and the consent to the assignment of each Vendor Agreement by the
other party thereto, if required, Buyer shall assume the
rights and obligations of said Vendor Agreements. If Buyer rejects assumption of
any or all Vendor Agreements, Buyer may terminate this Contract under the
termination provisions set forth under Article 16. In lieu of such termination
notice, Buyer shall be deemed to have accepted the assumption of such Vendor
Agreements. Any other agreements and services used in operation of the Property
that are cancelable “at will” or with 30 days notice are not subject to the
provisions of this Article 9.
In those
instances where the terms and conditions of the Vendor Agreements specifically
provide for assignment and assumption of said Vendor Agreements, Seller shall
notify each Vendor Agreement service provider of the pending sale and
assignment, such notification to comply with the assignment provisions of the
Vendor Agreement. After Seller’s notice to each service provider, Buyer shall
contact each service provider for the purpose of assuming each Vendor Agreement
and to take the required steps to relieve Seller of liability under said Vendor
Agreement, such release of liability to be effective on the date of
Closing. All Vendor Agreements identified in Exhibit D shall be
assigned to Buyer by a form of an Assignment and Assumption Agreement acceptable
to both parties.
Seller(s)______/______
Buyer(s)______/______
3
9. ROOM REVENUE/OPERATIONS
SETTLEMENT: It is understood that the time for determining the proration
of all matters to be prorated under this Article 9 shall be on the day of the
Closing. Regardless whether completed as of the Transfer Time, (as
hereinafter described in Article 13), it shall be Seller’s responsibility and
obligation, at Seller’s cost, to clean all rooms occupied on the night before
Closing. All income, prepaid and unpaid expenses for services
spanning the Closing date shall be settled pursuant to an operations settlement
prepared by Seller (the “Operations Settlement”). All prepaid and unpaid Vendor
Agreements and all other prepaid and unpaid expenses, including but not limited
to leases, entertainment agreements, technology agreements, maintenance
agreements, franchise agreements, service agreements, highway signage, and
advertising agreements shall be prorated jointly by Seller and Buyer as of the
day of Closing and shall be part of the Operations Settlement. All Vendor
Agreements or any other obligations assumed by Buyer shall be paid current at
the time of Closing by Seller. A pro forma Operations Settlement shall be
provided by Seller to Buyer for its review seven (7) days prior to Closing,
using the Closing date as the basis to calculate the prorated items. The
Operations Settlement payment will occur at Closing or at a time of mutual
consent, but no later than 5 pm on the day of Closing.
As soon
as practical after the customary checkout time, all registered “stay
over” guests shall be or shall have been checked out under Seller’s name and
immediately checked back in under Buyer’s name. Seller shall retain income from
the guests prior to the time they were checked out. Buyer shall retain room
revenue after check out time. The parties shall cooperate in the
implementation of the foregoing Operations Settlement to minimize the impact on
guests.
10. ACCOUNTS
RECEIVABLE: Seller’s aged accounts
receivable (the “Aged Accounts”) are not part of the Property. Prior to Closing,
Seller shall perform an audit of its Aged Accounts, which are payable to Seller
as of and including the Closing date and shall deliver to Buyer an itemized list
of such Aged Accounts, including the amounts due under each Aged
Account. Seller may, at its discretion within 5 business days
subsequent to Closing, provide an updated audit of its aged accounts, to include
any new accounts receivable occurring after the date of the original audit.
Subsequent to Closing, Buyer shall turn over to Seller, without charge to
Seller, all payments of Seller’s Aged Accounts coming into Buyer’s possession;
provided, however Buyer shall not be required to undertake any collection
efforts with regard to any Aged Accounts, delinquent or otherwise, and Buyer
shall not have any liability for failure to collect any Aged Accounts. Open
accounts attributed to third party contracts or direct bill clients shall be
deemed Aged Accounts under this article. The parties shall cooperate in dealing
with third party contracts or direct bill clients to minimize the adverse impact
on such parties or their continuing relationship with the Property.
In the
event any accounts receivable payments are received by either party, after
Closing, where said payments span the Closing date and include amounts owed to
both parties, the receiving party shall promptly notify the other party of its
receipt of such payment and all payments made under the terms of this
Article arising both prior and subsequent to the Closing date, shall be applied
in chronological order starting with the oldest account receivable of such
account. Any payments made from one party to the other, under the terms of this
Article 10, shall include the supporting documentation of the payment and the
proration.
Seller(s)______/______
Buyer(s)______/______
4
11. RESERVATIONS,
DEPOSITS: Under the provisions of the Inspection Period hereinafter
defined in Article 15, Seller shall provide a list of all post closing
reservations. Unless this Contract is terminated by Buyer, Buyer will honor, for
its account, all such Special Event reservations so confirmed by Seller for
dates subsequent to Closing at the rate or price previously agreed to by Seller.
Seller shall pay to Buyer the amount of all prepaid deposits (the “Prepaid
Deposits”) resulting from all reservations, including Special Event
reservations, made prior to Closing, for dates subsequent to
Closing.. Any such Prepaid Deposits shall be paid over to Buyer as a
credit to Buyer and shall be included in the Operations Settlement. Any other
post Closing, reservations made by Seller shall be made in accordance with
Seller’s usual and customary rates, with said rates subject to
seasonal adjustments or special events, at Seller’s discretion.
12. UTILITIES: Prior
to the Closing, Seller shall notify all utility companies servicing the Property
of the change in ownership and direct that all billings after the Closing be
made to Buyer at the Property address with no interruption of
service. Correspondingly, and prior to Closing, Buyer shall take
steps to establish its own utility accounts to begin as of Closing and to make
the required utility deposits or surety. If possible, utility meters will be
read during the daylight hours on the Closing Date, with charges to that time
paid by Seller and charges thereafter paid by Buyer. In the event
such reading is not possible, utilities will be prorated as of the Closing Date
based upon the prior month’s charges. Seller agrees to fill out the
customary forms required by the telephone company to assign the existing phone
number(s) to Buyer, including any toll free numbers to be retained by Buyer.
Seller shall assign all website addresses, domain names, and email addresses
used in connection with the Property to Buyer at Closing. Any charges for
utilities, which are prepaid on a monthly basis, will be prorated between Buyer
and Seller as of the Closing Date and shall be settled at the time of the
Operations Settlement. Any and all of Seller’s prepaid deposits for
such utilities shall be reimbursed to Seller solely by the appropriate utility
company.
13. EMPLOYEES: Seller’s employ of all
Property employees shall end at 3 pm on the date of Closing, (the “Transfer Time”). Seller
shall be responsible for accrued benefits, vacations, wages and salaries of each
employee of the Property up to the Transfer Time. Buyer shall be
responsible for the payment of the salaries, vacations, wages or benefits of any
employees accruing after the Transfer Time. Buyer shall have complete discretion
in determining which of Seller’s employees to hire/rehire as of Closing, and
complete discretion with respect to the terms of employment for such employees
hired/rehired. Seller warrants and represents that there are no
written employment agreements with any employees. During the Inspection Period,
defined hereinafter, Seller shall inform Buyer of any of its employees it
intends to retain and transfer. The parties shall cooperate in
dealing with the employees to minimize the adverse impact on the Property from
the loss of staff due to the pendency of this Contract or the change of
ownership at Closing. Seller shall
indemnify and hold harmless Buyer from all claims, damages, suits and the like
relating to employees for the period of time when Seller owned the
Property. Buyer shall indemnify and hold harmless Seller from all
claims, damages, suits and the like relating to employees for the period of time
when Buyer owned the Property.
Seller
shall be granted access to the Property for a period of two (2) business days,
following the date of Closing, for the purposes of removing all original
employment files and original financial records. Seller shall complete removal
of all such items prior to 5 p.m. of the second business day following the date
of Closing. Buyer shall have the right to keep copies of the
foregoing.
Seller(s)______/______
Buyer(s)______/______
5
14. TITLE
INSURANCE: Within fifteen (15) days after the Effective Date, Seller
shall deliver to Buyer a commitment to insure title, (the “Title Commitment”)
issued by a title company authorized to issue title insurance in the State of
Montana (the “Title Company”) selected by Seller and approved by Buyer, which
approval shall not be unreasonably withheld, committing to issue a title policy
(the “Title Policy”) on the ALTA Owner’s Title Policy form, insuring
marketable fee simple title in the real estate portion of the Property, in
Buyer’s name, in the amount of the Purchase Price as of the date and
time of the recordation of the deed, subject only to the Permitted Exceptions,
hereinafter defined, and committing to delete the standard
exceptions. Simultaneously with the delivery of the Title
Commitment, the Title Company shall deliver to Buyer complete and legible copies
of all instruments referred to in the Title Commitment affecting title to the
Property. Seller shall pay the cost of the Title Commitment fee, if
any, and the Title Policy insurance premium for the Owner’s policy including any
premiums to delete the standard exceptions, (provided however, that Buyer shall
pay for the cost of any additional endorsements required by Buyer or its
lender). Buyer shall have ten (10) days after receipt of the Title Commitment
and associated documents (the “Title Review Period”) in
which to notify Seller in writing of any objections Buyer has to any matters
shown or referred to in the Title Commitment, provided however, Buyer shall pay
for any survey as required by its lender or the Title company in order to cause
removal of the standard exception to title coverage commonly known as the
“survey exception”. Any matters which are set forth in the Title
Commitment and to which Buyer does not object within the Title Review Period,
shall be deemed to be Permitted Exceptions as to the status of Seller’s title
(the “Permitted Exceptions”). With regard to items to which Buyer does object
within the Title Review Period, Seller shall diligently attempt to cure such
objections and shall have until Closing to cure the objections and complete the
Title Commitment requirements. If Seller is unable to cure such objections using
reasonable diligence, Buyer may waive its objections and close or may terminate
the Contract. If Buyer so terminates this Contract, the Earnest Money
shall be returned to Buyer and the parties would have no further obligation one
to the other. The Title Company shall also serve as Escrow Agent,
unless Buyer and Seller mutually agree to use a third party Escrow
Agent.
15. INSPECTIONS: Seller
shall grant Buyer reasonable access to the Property for a period ending forty-five (45) days after the
Effective Date, (the “Inspection Period”), for the purpose of inspecting the
financial, environmental and physical condition of the Property. Buyer shall
provide 48 hour notification to Seller prior to any inspection. Inspections
shall not interfere with normal business operations. Buyer's inspection rights
shall include, but not limited to, the review of copies of any and
all mechanical, engineering or environmental reports in Seller’s possession, and
copies of permits, licenses, leases, contracts and agreements, to be transferred
or assigned with the Property, client room contracts, direct bill accounts,
insurance policies, benefit plans, employee lists and the like. In addition,
Buyer’s inspection rights shall include, but not limited to, the review of
Seller’s financial information pertaining to the Property, including federal tax
returns if applicable, sales, transient and unemployment tax reports,
and income and expense reports for the past three (3) years. Seller
shall deliver to Buyer all documents in its possession relevant to Buyer’s
inspections within seven (7) business days of the Effective Date. Seller shall
provide to Buyer any survey or plat in its possession, if any. Buyer shall pay
for any updates or new survey as required by Title Company to remove the survey
exception from the title insurance policy. Buyer’s inspection rights
shall also include performing soil tests, environmental tests or audits,
foundation, roof,
engineering and mechanical inspections, termite inspections, inspections
of appliances and equipment and such other inspections as Buyer may desire. Buyer shall pay
for all tests or inspections Buyer deems necessary. Buyer agrees to repair any
damage to the Property arising from these inspections and to indemnify, defend
and hold Seller harmless from and against all claims, costs, demands and
expenses, including without limitation, reasonable attorneys’ fees, court costs
and other legal expenses, resulting from these inspections. Buyer’s obligations
under this article shall survive termination of this Contract.
Seller(s)______/______
Buyer(s)______/______
6
If Buyer
determines that the physical, environmental or financial condition of the
Property is not suitable for Buyer, in Buyer’s sole and absolute discretion,
Buyer shall provide written notice to Seller on or before the expiration of the
Inspection Period that this Contract is terminated and the Earnest Money
deposited herewith shall be returned to the Buyer and neither party
shall have any further obligation or liability under this
Contract. In such notice of termination, all
due diligence information supplied by the Seller to Buyer shall be promptly
returned to Seller’s agent. In the absence of such termination notice, this
inspection condition shall be deemed satisfied, and Buyer shall be deemed to be
thoroughly acquainted and satisfied with the physical, environmental and
financial condition of the Property.
16. REPRESENTATIONS: Buyer
acknowledges that, except as otherwise expressly provided in this Contract or in
documents and materials provided to Buyer by Seller in connection with this
Contract, neither Seller nor any party on Seller's behalf has made, nor do they
hereby make, any representations as to the past, present or future condition,
income, expenses, operation or any other matter or thing affecting or relating
to the Property, its future operating, financial or environmental condition.
Buyer acknowledges it is experienced in the operation, purchase and sale of
hotel real estate and the Property is being sold “as is, where is” by Seller.
Subsequent to Seller’s delivery of due diligence items referenced in Article 15,
Inspections, Buyer agrees to assume full responsibility for conducting Buyer’s
due diligence in such a manner as to be thoroughly acquainted with all aspects
of the Property.
17. DELIVERY OF
DOCUMENTS; PAYMENT DISBURSEMENT OF PROCEEDS: At or before
Closing, Seller agrees to properly execute and deliver into escrow a General
Warranty Deed, a Bill of Sale and an Assignment and Assumption Agreement for any
nonrealty portion of the Property, and all other documents and funds reasonably
deemed by either party to be necessary to
complete the Closing. The General Warranty Deed shall convey to Buyer
marketable fee simple title to the Property, free and clear of all liens and
encumbrances, other than the Permitted Exceptions. At or
before the Closing, Buyer agrees to deliver into escrow with the Title Company
wired or guaranteed funds sufficient to satisfy Buyer’s obligations under this
Contract. Seller acknowledges that, unless otherwise agreed,
disbursement of proceeds, including loan payoff(s), will
not be made until after the General Warranty Deed or the instrument
of conveyance, and, if applicable, the mortgage/deed of trust have been recorded
and the Title Company is in a position to issue the Title Policy subject only to
the Permitted Exceptions.
18. INSURANCE;
MAINTENANCE; CASUALTY; CONDEMNATION; CHANGE OF CONDITION: Seller agrees
to maintain Seller's current fire and extended coverage insurance, if any, on
the Property until Closing. Seller shall do ordinary and necessary
maintenance, upkeep and repair to the Property until the Transfer
Time. Seller shall continue to operate the Property in its customary
fashion and in good faith until Closing. If, before Closing, all or any part of
the Property is taken by eminent domain, or if a condemnation proceeding has
been filed or is threatened against the Property or any part thereof, or if all
or any part of the Property is destroyed or materially damaged after the
Inspection Period, Seller shall promptly provide written notice to Buyer of any
such event. Upon notice of such occurrence, Buyer may re-inspect the
Property and may, by written notice to Seller within ten (10) days after
receiving Seller's notice, terminate this Contract. Unless this
Contract is so terminated, it shall remain in full force and effect, and Seller
shall at Closing assign and transfer to Buyer all of Seller's right, title and
interest in and to any awards that may be made for any taking and any insurance
proceeds payable on account of casualty and shall pay Buyer the amount of any
deductible. If a non-material change in condition occurs with respect
to the Property, Seller shall remedy such change before Closing. The
provision of this Article shall survive Closing or termination of this
Contract.
Seller(s)______/______
Buyer(s)______/______
7
19. FOREIGN
INVESTMENT: Seller represents that Seller is not a
foreign person as described in the Foreign Investment in Real Property Tax Act
and agrees to deliver a certificate at Closing to that effect which shall
contain Seller's tax identification number.
20. TERMINATION:
If this Contract is terminated by either party pursuant to a right
expressly given in this Contract, Buyer shall be entitled to return of the
Earnest Money deposit together with interest thereon, and neither party shall
have any further rights or obligations under this Contract except as otherwise
stated in this Contract. Each Party shall thereupon pay any costs or
expenses incurred by the Party pursuant to the terms of this Contract, without
further lien on the Property or assignment thereof.
21. DEFAULT AND
REMEDIES: Seller or Buyer shall be in default under this
Contract if either fails to comply with any material covenant, agreement or
obligation within any time limits required by this
Contract. Following a default by either Seller or Buyer under this
Contract, the other party shall have the following remedies, subject to the
provisions of Article 22 of this Contract:
(a) If
Seller defaults, except with respect to the failure to close by the date of
Closing (for which Seller shall have no right to cure), Seller shall have ten
(10) days to cure said default. If Seller refuses or is unable to
cure said default as set forth herein, Buyer may (i) specifically enforce this
Contract and recover damages suffered by Buyer as a result of the delay in the
acquisition of the Property; or (ii) terminate this Contract by written notice
to Seller and receive the return of the Earnest Money and interest accrued
thereon and, at Buyer’s option, pursue any remedy and damages available at law
or in equity. If Buyer elects to terminate this Contract, the Earnest Money and
interest accrued thereon shall be returned to Buyer upon written demand to the
Escrow Agent and the Escrow agent is hereby authorized by Buyer and Seller to so
return the Earnest Money to Buyer.
(b) If Buyer
defaults, Seller may (i) specifically enforce this Contract and recover damages
suffered by Seller as a result of the delay in the sale of the Property; or (ii)
terminate this Contract by written notice to Buyer and, at Seller's option,
either retain the Earnest Money as liquidated damages as Seller's sole remedy
(the parties recognizing that it would be extremely difficult to ascertain the
extent of actual damages caused by Buyer's breach, and that the Earnest Money
represents a fair approximation of such actual damages as the parties can now
determine), or pursue any other remedy and damages available at law or in
equity.
If, as a
result of a default under this Contract, either Seller or Buyer employs an
attorney to enforce its rights, the losing party shall, unless
prohibited by law, reimburse the prevailing party for all reasonable attorneys’
fees, court costs and other legal expenses incurred by the prevailing party in
connection with such default.
Seller(s)______/______
Buyer(s)______/______
8
22. DISPOSITION OF
EARNEST MONEY AND OTHER FUNDS AND DOCUMENTS: In the absence of
written escrow instructions, the Escrow Agent shall not distribute the Earnest
Money or other escrowed funds or documents, once deposited, without the written
consent of all parties to this Contract except as provided in Article 21(a) of
this Contract. A party's signature on a closing statement prepared by the Escrow
Agent shall constitute such consent. In the absence of either written
consent or written notice of a dispute, failure by either Buyer or Seller to
respond in writing to a certified letter from the Escrow Agent within
fifteen (15) days of receipt, or failure by either Buyer or Seller to make
written demand upon the other party and upon the Escrow Agent for return or
forfeiture of the Earnest Money, other escrowed funds or documents within sixty
(60) days after receiving written notice of cancellation of this Contract, shall
constitute consent to distribution of all funds and documents
deposited with the Escrow Agent as suggested in any
such certified letter or written demand.
If a
dispute arises over the disposition of funds or documents deposited with the
Escrow Agent that results in litigation, any reasonable attorney's fees, court
costs and other legal expenses incurred by the Escrow Agent in connection with
such dispute shall be paid by the losing party.
23. 1031
EXCHANGE. The parties agree to execute any documents necessary
at or prior to Closing upon the request of the either party should the either
party decide to affect a tax deferred exchange or reverse exchange pursuant to
Section 1031 of the Internal Revenue Code; provided, however, (i) in no event
shall any such exchange, or either party’s inability to complete any such
exchange, impair or otherwise affect the Closing Date, (ii) Buyer shall have no
obligation or liability to Seller or any other party in any respect for any
matters in connection with Seller’s exchange other than payment of the Purchase
Price in exchange for the conveyance to Buyer of fee simple interest to the
Property, subject only to those matters permitted under this Contract, and (iii)
the party affecting the exchange shall
indemnify and hold the other party harmless from and against any claims,
actions, liability and expense in connection with each such
exchange.
24. ENTIRE AGREEMENT
AND MANNER OF MODIFICATION: This Contract, and any attachments
or addenda hereto, constitute the complete agreement of the parties concerning
the Property, supersede all other agreements and may be modified only by both
parties’ initialing
changes in this Contract or by written agreement signed by both
parties.
25. NOTICES: All
notices, consents, approvals, requests, waivers, objections or other
communications (collectively “Notices”) required under this
Contract shall be in writing and shall be delivered by hand delivery, by prepaid
United States Postal Service certified or priority mail, return receipt
requested or delivery confirmation, or by reputable overnight delivery service
guaranteeing next-day delivery and providing a receipt or by
facsimile or electronic transmission of the original
Notice. All Notices shall be addressed to the parties at the
respective addresses as set forth below, except that any party may, by notice in
the manner provided above, change this address for all subsequent
notices. Notices shall be deemed served and received upon the earlier
of the third day following the date of mailing (in the case of notices mailed by
certified or priority mail) or upon delivery (in all other cases). A
party's failure or refusal to accept service of a notice shall constitute
delivery of the notice.
Seller(s)______/______
Buyer(s)______/______
9
26. TIME
AND EXACT PERFORMANCE ARE OF THE ESSENCE UNDER THIS CONTRACT. It is agreed that time
is of the essence of this Contract and each and every provision
hereof.
27. CONSULT AN
ATTORNEY/CONTRACT INSPECTION PERIOD: This document is intended to be an
enforceable, legally binding contract. READ IT CAREFULLY. The
Realtor(s) involved in the negotiation of this document, if any, cannot give you
legal advice. By law, the Realtors are limited to discussing factual and
business details of the transaction. Before you sign this document, you should
consult an attorney of your choice to review this document on your behalf and to
discuss the legal effect of the terms and provisions hereof. This Contract has
been negotiated fully by the parties hereto and shall not be interpreted against
one party, by virtue of its being the party having drafted the last
draft.
28. TOXIC WASTE/HAZARDOUS
MATERIALS: Each party acknowledges that the Broker involved in
the negotiation of this transaction has no expertise with respect to hazardous
materials, although said Broker will disclose any actual knowledge possessed by
them. Each party acknowledges and agrees that each party shall look
solely to experts and professionals selected by each party to advise each party
with respect to the condition of the Property and shall not hold the Broker or
Seller responsible for any hazardous materials relating to the Property. To the
best of Seller’s knowledge without duty of inquiry, Seller expressly
represents and warrants that it has operated the Property in compliance in all
material aspects with all applicable environmental statutes, regulations,
orders, decisions and restrictions of the United States of America (including
state, county and local statutes, regulations, orders decisions and
restrictions), including without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Resource Conservation and Recovery Act of 1976,
The Clean Air Act and Clean Air Act Amendments of 1966 and 1977, the Clean Air
Amendments of 1970, the Clean Water Act of 1977 and the Federal Water Pollution
Control Act and Amendments. Except as otherwise expressly provided in
this Contract, this Property is sold by Seller “as is” without further
environmental representation. Except as otherwise expressly provided
in this Contract, Buyer
shall rely solely on the inspections available to Buyer pursuant to the
provisions of this Contract.
29. LABOR AND
MATERIALS: Seller shall furnish to the Title Company at
Closing an affidavit and indemnification agreement in form and substance
satisfactory to Seller and Title Company showing that all labor and materials,
if any, furnished to the Property prior to the date of Closing have been paid
for and agreeing to indemnify Buyer and the Title Company against all loss from
any cause or claim arising therefrom.
30. WARRANTIES: To the best of
Seller’s knowledge, Seller warrants the following to Buyer as of the Effective
Date, and shall remake such warranties as of the Closing date:
a. No
present or former guest, lessee or licensee at the Property has made any claim
of any nature against Seller of the Property that has not been fully and finally
resolved or otherwise fully covered by insurance.
b. Except
as disclosed herein, there is no rental, lease or similar commission now or
hereafter payable to any person or entity with respect to the
Property.
Seller(s)______/______
Buyer(s)______/______
10
c. Seller
has no knowledge nor has Seller received any notice of any actual or threatened
action, litigation, re-zoning, condemnation or proceeding by any person, entity,
or governmental agency that would or could adversely affect the
Property.
d. To the
best of Seller’s knowledge, without duty of inquiry, there are no violations of
law, municipal or county ordinances and codes, or other legal requirements with
respect to the Property, and Seller has received no notice of
such. Seller has received no notice of any governmental assessments
concerning the Property that are due and unpaid.
e. Seller
is not in default under any loan that presently encumbers the Property, nor has
there occurred any event which with the giving of notice or the passage of time
would constitute a default by Seller under such.
f. To
the best of Seller’s knowledge, without duty of inquiry, (a) no waste or
hazardous materials have been deposited on the Property; (b) no portion of the
Property has been used as a landfill, dump, or depository for waste or refuse;
(c) no portion of the Property has been used for the storage, use, manufacture,
treatment or disposal of toxic waste or hazardous materials, and (d) Seller has
neither filed nor been required to file with any local, state, federal, or
regional governmental agency any reports of hazardous materials, toxic wastes or
hazardous substances found or disposed of on the Property. As used in
this Contract the term “hazardous materials”, “toxic waste”, or “hazardous
substances”, shall include, without limitation, any substance, the presence of
which on the Property is prohibited by any federal, state or local law, order or
regulation.
g. Other
than Seller’s obligations disclosed and described under the provisions of this
Contract, Seller is not a debtor under any obligation incurred in connection
with the operation of the Property and will hold Buyer harmless from any and all
obligations incurred by Seller prior to Closing, including reasonable attorney
fees incurred by Buyer as a result of the breach of warranty.
h. The
income and expense information submitted by Seller to Buyer, as
provided for in Article 15, is accurate and fully reflects all income
and expense of Seller required to be reflected therein as at the date thereof,
and fairly sets forth the results of operations of Seller as of the relevant
dates thereof and the periods covered thereby.
31. COUNTERPARTS:
This offer shall become a binding contract when signed by both Buyer and Seller.
This Contract may be executed in counterparts and delivered by facsimile or
electronically, which when delivered from both parties, shall constitute one in
the same executed document.
32. PERMITTED
ASSIGNMENTS: This Contract may be only assigned to any
business entity formed by Buyer prior to closing and registered to do business
in the State of Montana for the purpose of the purchase and ownership of the
Property, so long as Buyer holds controlling interest in said assignee entity.
Provided however, that no such assignment shall release Buyer’s obligations
hereunder and Buyer and assignee shall be jointly and severely liable for such
obligations. Furthermore, Buyer’s assignee shall enter into a written
assumption agreement with Seller to assume Buyer’s obligations hereunder prior
to Closing.
Seller(s)______/______
Buyer(s)______/______
11
33. SUCCESSORS AND
ASSIGNS: This Contract shall be binding upon and shall
inure to the benefit of the parties and their heirs, successors and
assigns. As used herein, words in the singular include the plural and
the masculine includes the feminine and neuter genders, as
appropriate.
34. SURVIVAL: If
any provision herein contained which by its nature and effect is required to be
observed, kept or performed after the Closing, it shall survive the Closing and
remain binding upon and for the benefit of the parties hereto until fully
observed, kept or performed.
35. OTHER OBLIGATIONS, TAXES AND
LIABILITIES: All liabilities and obligations which cannot be determined
and paid prior to Closing or have not otherwise been prorated at Closing or
discussed in this Contract, or which have accrued and are yet unpaid for periods
in which Seller owns the Property, including but not limited to, unemployment
tax, social security tax, income tax, withholding taxes and any other City,
State, or Federal taxes, (including sales and transient taxes), all or any of
which may not be due and payable prior to the Closing shall be paid by Seller as
promptly as can be determined and paid.
With
regard to accounts payable, any such accounts payable received by either party,
after Closing, where said accounts payable describe an amount owed and payable
by both parties for service spanning the Closing date, before and after, the
receiving party shall promptly notify the other party of its receipt of such
accounts payable and each party shall promptly pay its pro rata share of the
amounts due, based on the Closing date.
36. ALLOCATION OF PURCHASE
PRICE: During the Financing Contingency, Seller shall present
to Buyer, Seller’s opinion of the allocation of Purchase Price. The parties
shall use their best efforts to agree and allocate, in writing, the Purchase
Price to and among the various classes of Property being conveyed under this
Contract (the “Allocation”), said Allocation to be reasonably reflective of the
value of the various asset classes. Should Seller and Buyer reach
agreement as to such Allocation, they shall execute and attach to this Contract
the Allocation as Exhibit E hereto, by this reference incorporated herein, which
shall control and be used by each party without further document or consent
required, and at Closing they shall complete and execute Internal Revenue
Service Form 8594 as provided by Section 1060 of the Internal Revenue Code of
1986, as amended, to attach to their respective income tax returns. Mutual
agreement as to the Allocation is not a condition precedent to Closing for both
party and either party may use its own asset class allocation.
37. OPERATION PRIOR
TO CLOSING: Seller shall maintain and operate the Property and shall
maintain staffing levels consistent with Seller’s usual and customary practice.
As of Closing, the Property shall be, in all material aspects, in good, workable
and usable condition as well as in the condition it was in on the Effective Date
subject only to ordinary wear and tear, capable of performing the functions and
purpose for which it was normally used by Seller, including all guest rooms,
machinery, equipment and mechanical systems. Prior to and up to the Closing,
Seller shall maintain the inventory, operating supplies of all kind, including
but not limited to liquor, wine, beer, soft drinks, food, linens, guest room and
housekeeping supplies, breakfast supplies and all other usual supplies used in
the operation of the Property, at quantities consistent with Seller’s usual and
customary practice, and in sufficient quantities for Buyer to operate the
Property for a minimum period of one week following Closing. All opened and
unopened supplies shall be conveyed to Buyer at Closing. Seller represents that
at Closing, the Property will be equipped with a minimum of 1
½ Turns of Guest Linens. (Guest Linens shall be defined as sheet sets,
pillow cases, towels and wash cloths. One Turn shall be defined
as the amount of Guest Linens sufficient to supply all guest rooms as
fully and customarily stocked with Guest Linens, with no Guest Linens remaining
in storage).
Seller(s)______/______
Buyer(s)______/______
12
38. MUTUAL
INDEMNITIES.
(a) Indemnification
of Buyer: Seller does hereby indemnify and agree to hold harmless and
defend Buyer, and its successors and assigns, from and against any and all
liabilities, losses, damages, actions, suits, proceedings, claims, demands,
assessments, fines, penalties, judgments, fees, costs, and expenses (including,
without limitation, reasonable attorney’s fees), of every nature and kind, which
Buyer, (or any assignee made prior to Closing) may sustain or incur, directly or
indirectly, at any time, as a result of, arising out of, incident to, or in any
way connected with (i) the ownership, custody, control, operation or use of the
Property, or the operation of Seller’s business related thereto, prior to
Closing, (ii) Seller’s failure to comply with any provision of applicable law
pertaining to the rights of creditors of sellers of bulk assets; (iii) Seller’s
failure to pay all taxes, of whatsoever kind, arising from Seller’s ownership or
operation of the Property (excluding items for which Buyer is given a purchase
price adjustment credit at closing) accruing prior to Closing; (iv) Seller’s
failure to pay and satisfy any of its liabilities, obligations and debts for
services, utilities, labor, material, equipment or supplies furnished to or at
the Property prior to Closing; (v) any labor costs, employee benefits, franchise
fees, utility costs, management fees, trade payables or other expenses, of any
kind whatsoever, relating to the operation of the Property accruing prior to
Closing; and (vi) the costs of Buyer’s enforcement of the foregoing
indemnities.
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|
(b)
|
Indemnification
of Seller: Buyer does hereby indemnify and agree to hold
harmless and defend Seller, and its successors and assigns, from and
against any and all liabilities, losses, damages, actions, suits,
proceedings, claims, demands, assessments, fines, penalties, judgments,
costs and expenses (including reasonable attorney's fees and expenses), of
every nature and kind, which Seller, or its successor or assigns, may
sustain or incur, directly or indirectly, at any time, as a result of,
arising out of, or in any way connected with (i) the operation, ownership,
custody, control or use of the Property, or the operation of
Buyer’s business related thereto, from and after Closing; and (ii) Buyer’s
failure to pay and satisfy any of its liabilities, obligations and debts
for services, utilities, labor, material, equipment or supplies furnished
to or at the Property after Closing; (iii) any labor costs, employee
benefits, franchise fees, utility costs, management fees, trade payables
or other expenses, of any kind whatsoever, relating to the operation of
the Property accruing after Closing; and (iv) the cost of Seller’s
enforcement of the foregoing
indemnities.
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39. INTERPRETATION:
This Contract shall be construed and interpreted in accordance with the laws of
the State of Montana and jurisdiction is proper in the District Court of the
State of Montana located in Holt County.
40. COUNTERPARTS: This Contract
may be executed in one or more counterparts each of which shall constitute an
original and all of which together shall constitute but one and the same
instrument binding on all the parties. Facsimile or electronically transmitted
signatures are binding.
Seller(s)______/______
Buyer(s)______/______
13
41. DISCLOSURE
STATEMENT: See Addendum/Agency Disclosure attached hereto and
made a part of this Contract.
42. PROPERTY IMPROVEMENT CONTINGENCY:
Buyer shall have the right to terminate this Contract if, in Buyer’s sole
and absolute discretion, the property improvement plan required by the current
franchisor is not acceptable to Buyer.
43. FRANCHISE
CONTINGENCY: Buyer shall have the right to terminate this
Contract if, in Buyer’s sole and absolute discretion, the current franchisor
does not permit Buyer to operate the Property under terms and conditions
acceptable to Buyer.
REST OF PAGE LEFT BLANK
INTENTIONALLY.
Seller(s)______/______
Buyer(s)______/______
14
IN
WITNESS WHEREOF, Seller and Buyer execute this Contract, effective as of the
date of the last signature or initialization herein.
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SELLER:
|
BUYER:
|
|||
|
JM
Daniel, LLC
|
Windgate
Capital Partners LLC
|
|||
|
By:
|
/s/ John Daniel
|
|||
|
John
Daniel, Managing Member
|
By:
|
/s/ Michael B. Elliott
|
||
|
Michael
B. Elliott, President
|
||||
|
By:
|
/s/ Jere Daniel
|
|||
|
Jere
Daniel, Managing Member
|
||||
|
1.24.11
|
1.19.11
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|||
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Date:
|
Date:
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|||
|
Address
of Notice:
|
Address
of Notice:
|
|||
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9824
Cottonwood Road
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PO
Box 10250
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|||
|
Bozeman,
MT 59718
|
||||
|
Bozeman,
MT 59719
|
||||
Seller(s)______/______
Buyer(s)______/______
15
EXHIBIT
A
LEGAL
DESCRIPTION
Lot 2 of
the Amended Subdivision Plat of Lots 1 and 2A of the Amended Subdivision Plat of
McChesncy Industrial Park, City of Bozeman, Gallatin County, Montana, according
to the official plat thereof on file and of record in the office of the County
Clerk and Recorder, Gallatin County, Montana. (Plat Reference:
J-50-D)
Seller(s)______/______
Buyer(s)______/______
16
EXHIBIT
B
INVENTORY OF PERSONAL
PROPERTY
(To
be provided prior to Closing)
Seller(s)______/______
Buyer(s)______/______
17
EXHIBIT
C
EXCLUDED PERSONAL
PROPERTY
Seller(s)______/______
Buyer(s)______/______
18
EXHIBIT
D
LIST OF OPERATING
AGREEMENTS
TO BE
ASSUMED
Seller(s)______/______
Buyer(s)______/______
19