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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Date of Report (Date of earliest event reported) June 10, 1997
Essex Hospitality Associates IV L.P.
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(Exact name of registrant as specified in its charter)
New York
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(State or other jurisdiction of incorporation)
33-96716 16-1485632
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(Commission File Number) (IRS Employer Identification No.)
100 Corporate Woods, Suite 300, Rochester, NY 14623
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (716) 272-2300
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An exhibit index is presented on page 2.
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Item 2. Acquisition or Disposition of Assets
On June 10, 1997, pursuant to two separate purchase agreements from unaffiliated
individuals, one dated May 17, 1996 and the second dated May 18, 1996, Erie
Hotel L.L.C. a New York limited liability corporation 99% owned by the
Registrant and 1% owned by Essex Hotels L.L.C., (which is wholly-owned by the
Registrant) purchased three adjacent parcels of undeveloped land consisting of
approximately 2.5 acres located in Erie, Pennsylvania. The purchase prices,
arrived at through arm's-length negotiation, were $290,000 and $361,000 for a
total purchase price of $651,000 in cash, a portion of which was paid on or
after execution of the purchase agreements and the balance of which was paid at
closing.
There were no material relationships between the sellers and the Registrant, or
any of its affiliates, officers, directors or any associates of its officers or
directors. The cash for the acquisition was obtained from the proceeds of
closings of the public offering of the Registrant.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) The acquisition relates to the purchase of raw land which is to be developed
by the Partnership. Accordingly, no financial statements with respect to real
estate operations are required.
(c) Exhibits
2-1 Real Estate Purchase Contract and extension amendments dated
as of May 17, 1996 between Essex Partners Inc. and Richard E.
and May L. Hess.
2-2 Real Estate Purchase Contract and extension amendments dated
as of May 18, 1996 between Essex Partners Inc. and David A.
Kellogg.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ESSEX HOSPITALITY ASSOCIATES IV L.P.
(Registrant)
Dated: June 23, 1997 By: /s/ Lorrie L. LoFaso
---------------------------------
Lorrie L. LoFaso
Vice President
Essex Partners Inc.
(Managing General Partner)
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REAL ESTATE PURCHASE CONTRACT
THIS AGREEMENT, made as of the 17th day of May, 1996 between Richard E. and May
L. Hess at 8042 Old Oliver Road, Erie, PA 16509 ("Seller"), and Essex Partners
Inc., a New York corporation with offices at 100 Corporate Woods, Suite 300,
Rochester, New York 14623 ("Purchaser"),
WITNESSETH:
1. Seller agrees to sell to Purchaser and Purchaser agrees to buy from
Seller, in accordance with the terms, conditions and stipulations set forth in
this Real Estate Purchase Contract ("Contract"), that real property with all
improvements located thereon, known as 8042 Old Oliver Road, Erie, PA 16509
with Erie County Index Number 40-017-073.0002.01 (the "Land").
2. Purchase Price: The total purchase price to be paid to Seller by
Purchaser for the Land (the "Purchase Price") shall be two hundred ninety
thousand dollars ($290,000).
3. Payment of Purchase Price: Subject to the terms and conditions of
this Contract, the Purchase Price shall be payable to Seller at the Closing in
immediately available U.S. funds.
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4. Deposit: Upon receipt of a fully executed Contract (the "Time Line
Date"), Purchaser shall deliver its check in the amount of five thousand dollars
($5,000) to Seller's attorney which shall constitute Purchaser's good faith
deposit ("Deposit"). Purchaser shall have 90 days after the Time Line Date to
notify Seller of its intent to cancel this Contract for any reason whatsoever
and the full Deposit as set forth herein shall be directly returned to
Purchaser. Thereafter in the event this Contract does not close as a result of
failure of any condition in Section 16 or through no fault of Purchaser and
Purchaser waives its right to specific performance of this Contract then the
Deposit and any Additional Deposit as described in Section 10 shall be directly
returned to Purchaser. If Purchaser does not terminate this Contract pursuant
to Section 17 and Purchaser shall fail or refuse to perform its obligations
herein specified at or before the date of Closing (or any agreed upon
extension), the Deposit and Additional Deposit, if any, shall be forfeited as
liquidated damages which the parties hereto agree is a reasonable and proper
amount in light of the circumstances, and which forfeiture shall be Seller's
sole remedy in law and equity. Deposit of Five Thousand Dollars ($5,000.00)
shall be given to Seller 90 days after Time Line Date. These monies are
non-refundable.
5. Title: Promptly after execution the time Line Date, Seller shall
provide Purchaser with a copy of any Abstract of Title and any title policy
pertaining to the Land in its possession and Purchaser shall order evidence of
title to the Land by the issuance of a current title insurance binder (the
"Title Binder") through a major national title insurance company selected by
Purchaser (the "Title Company") in the amount of the Purchase Price. The Title
Binder shall set forth the state of title to the Land and to other property
that is or will be subject to any easements or restrictions (existing or to be
created pursuant to this
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Contract) benefitting the Land, together with all exceptions or conditions to
such title, including, but without limitation to, all easements, restrictions,
rights-of-way, covenants, reservations, and all other encumbrances affecting
the Land which would appear in the owner's title policy.
6. Survey: Promptly after execution of this Contract, Seller agrees
to provide Purchaser with the most recent instrument survey pertaining to the
Land in its possession. Purchaser acknowledges Seller is not in possession of
survey.
7. Review of Title Binder and Survey: Purchaser shall have 60 days
after the Time Line Date to deliver in writing to Seller Purchaser's objections
to title. Purchaser's failure to object to any item on the Title Binder or
survey within the time limitation imposed hereby shall be deemed to be approval
of same by Purchaser.
8. Other Documentation: Seller shall deliver to Purchaser upon
execution of this Contract the originals or copies of any Phase I and Phase II
environmental studies, soils test, utility information, topographical maps and
subdivision plots and correspondence, information and documentation which would
relate to the use and/or occupancy of the Land which are in possession of
Seller or to which Seller has access without cost other than copying or
duplicating charges.
9. Purchaser's Objection to Title; Defects in Title: Should Purchaser
as described in Section 7 above deliver to Seller its written objections to
title or to matters
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contained in the survey, Seller shall have 60 days either to remove all such
defects or objections or to provide assurance acceptable to Purchaser that same
will be removed at or before Closing; mortgages, deeds of trust or other liens
of a specific amount shall be cleared before or at Closing, by Seller or, if
requested by the Seller, by Purchaser by deduction from proceeds due Seller.
Should Seller be unable to cure (or provide assurances with respect to) any
and all such defects or objections (except liens as provided above) on or
before expiration of the 60 day period, then Purchaser may, at its option, elect
to terminate this Contract and receive a full refund of the Deposit, or to
waive its objections and proceed to Closing. Seller shall not further
intentionally encumber or restrict the title to the Land without Purchaser's
prior written consent which shall not be unreasonably withheld.
10. Closing: The Closing shall be on or before the sooner of (i)
the date which is thirty (30) days after the date upon which Purchaser has
received site plan approval for the Improvements (as hereinafter defined), or
(ii) 210 days after the Time Line Date, and shall take place in the offices of
the Erie County Clerk, or such other place mutually designated by the parties;
provided, however, that Purchaser may designate an earlier date for the Closing
by written notice delivered to Seller not less than fifteen (15) days prior to
such earlier date for the Closing so designated in such notice by Purchaser.
Provided, however, that if Purchaser has shown due diligence in endeavoring to
satisfy all contingencies herein and has been delayed by any agency or entity
having control over satisfaction of those contingencies, then it is agreed
that upon written notice to Seller of
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such delay, Purchaser shall be entitled to an extension of two months to enable
Purchaser to satisfy those contingencies and close this transaction. An
Additional Deposit of $5,000 shall be paid to the Seller on or before the first
day of each month of the extension period.
11. Prorations and Adjustments at Closing: Ad Valorem and similar
taxes assessed against the Land shall be prorated between Seller and Purchaser
at the time of Closing on the basis of a 365 day year. Prorations shall be
based upon current year's taxes and assessments, if available, or upon figures
for the last preceding year, in which event Purchaser and Seller shall readjust
the prorations when the current year's taxes and assessments become available.
Any special assessments applicable to the Land including, but no limited to,
"rollback" or other similar assessment or taxes which apply on a change in use
of the Land, if any, whether, payable in a lump sum, in installments or
otherwise, shall be paid by Seller. The foregoing obligations shall survive the
Closing.
12. Transaction Costs: Seller and Purchaser shall each be
responsible for the payment of one-half of all transfer, state and documentary
stamps to be affixed to the instrument. Purchaser shall be responsible for all
other costs, including the cost of the Title Policy, Survey and recording the
deed, provided, however, that each party shall pay its own attorney's fees.
13. Warranty Deed and Other Documents Required For Closing:
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A. At the Closing, Seller shall deliver the following:
1. Warranty Deed in fee simple, free and clear of all liens
and encumbrances, except subject to the following items now of record: utility,
rights-of-way and easements for the purpose of providing utility service to the
property herein described, common driveway or party wall agreement, recorded
restrictions, and zoning regulations; otherwise the title to the
above-described real estate shall be good and marketable and such as will be
insured at the regular rates by a title insurance company licensed to do
business in Pennsylvania. Also, access to a public road may require issuance
of a highway occupancy permit from the Department of Transportation. A specimen
deed shall be delivered by Seller to Purchaser's attorney for review at least
ten (10) days before closing.
2. Documents evidencing he legal status, standing and
authority of Seller and such other documents, including standard form Seller's
affidavits, as may be required by Title Company for issuance of the Title
Policy.
B. At the Closing, Purchaser shall deliver the following:
1. The Purchase Price plus any costs to be shared by
Purchaser in cash, certified funds, or a bank draft.
2. Such documents evidencing the legal status, standing and
authority
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of Purchaser.
14. Possession: Possession of the premises shall be delivered to the
Purchaser either (i) 120 days after Closing, or (ii) 120 days after Purchaser
has provided written notice to vacate, but in no event prior to the Closing
Date, and Purchaser has deposited with Seller's attorney twenty-five thousand
dollars ($25,000) which together with the Deposit and Additional Deposit, if
any, would be forfeited as liquidated damages in the event that Closing does
not occur through no fault of Seller. At Closing, the twenty-five thousand
dollars ($25,000) together with the Deposit and Additional Deposit, if any,
will be applied against the Purchase Price.
15. Representations and Warranties: For the purpose of inducing
Purchaser to enter into and consummate this transaction, Seller represents and
warrants to Purchaser that to the best of his knowledge and belief:
(i) The Land is not currently being used, has never been used,
as a hazardous waste disposal facility as defined in 40 C.F.R. Section 260.10;
the Land is free of any lien or encumbrance which may be created under any
applicable state of federal law, statute or regulation pertaining to hazardous
waste; and no hazardous waste has been placed onto or into the Land (for
purposes hereof, the term "hazardous waste" includes those substances listed in
40 C.F.R. Section 261.30 and those substances previously determined to be
hazardous by any applicable state or federal law, statute or regulation),
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(ii) There is no pending or threatened condemnation or
any road widening respecting all or any part of the Land,
(iii) Seller is currently, or has entered into a
contract by which he will become, the owner and holder of fee simple title to
the Land and has full power and authority to execute this Contract and all
other documents necessary to consummate the transaction.
(iv) Seller warrants that he has no knowledge of any
deed restrictions or other contractual restrictions or covenants which would
restrict or other impair the Purchaser from developing and operating a limited
service hotel on the land.
16. Conditions to Closing: Purchaser's obligation to purchase the
Land at the Closing is subject to all of the following conditions, which shall
have been fulfilled to Purchaser's satisfaction:
A. At the Closing, the following conditions shall have
been satisfied:
1. Good and marketable fee simple title to the Land
shall be in the name of the Seller and any beneficial easements and/or
restrictions appurtenant to the Land are not subject to any interest, the
termination, enforcement, exercise or foreclosure of which could terminate or
prevent the enforcement of such easement or restriction.
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2. No portion of the Land has been taken by or is the subject
of a condemnation proceeding or is under threat of condemnation.
3. There has been no material or adverse change to the
condition of the Land or to the representations and warranties of Seller set
forth in Section 18 hereof.
B. The following condition shall have been satisfied by the
Purchaser or be deemed waived by the Purchaser on or before Closing:
1. That zoning and the conditions of zoning, including any use
permit, site plan approval, curb cut permit, demolition permit, variances and
other similar governmental approvals required by law or necessitated by
Purchaser's planned use of the Land in conjunction with other land for the
construction and operation thereon of a three-story, limited service hotel
having a minimum of 100 guest rooms, along with all facilities and amenities
attendant thereto (hereinafter the "Improvements"), shall have been received.
2. That all platting or replatting requirements in respect of
the Land have been satisfied by the Purchaser or permit the transfer of title
and to accommodate construction and operation of the Improvements under
applicable laws and regulations.
3. That Purchaser has reasonably determined that all permits
necessary, in Purchaser's sole opinion, for the construction and operation of
the
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Improvements on the Land, are available to Purchaser after receipt of site plan
approval.
4. Easements: Purchaser, with Seller's assistance must be able to
obtain without cost any and all easements necessary to build the proposed
development. Said easements, including but not limited to the access easement,
shall be unencumbered and the title insurance in favor of Purchaser shall
insure such easements.
5. Soil Conditions: The soil, in its natural state, must have
sufficient load-bearing characteristics to support Purchaser's proposed
development, and must have adequate permeability to drain the proposed
development. Seller warrants that to the best of his knowledge, the Premises do
not contain a landfill, hazardous waste, underground mines, caves or
underground streams and that the soil condition and water table are such that
Purchaser can build the proposed development without incurring additional
extraordinary expenses.
6. That no federal, state or local governmental restrictions or
requirements would preclude construction and operation of the Improvements on
the Land.
7. That all utilities including but not limited to electric, gas,
telephone, cable TV, will be available for use by Purchaser along Old Oliver
Road or on the Land. Water will be available at the intersection of Old Oliver
Road and Oliver Road. Purchaser will be responsible for bringing water to the
Land along Old Oliver Road. Seller warrants.
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that to the best of his knowledge sanitary sewer is currently available on the
Land. The capacity of these various services, i.e., utilities, water and sewer,
are not conditions to Closing.
8. That Purchaser has reasonably determined that the Land is free of
any hazardous substances or wastes that would preclude the Construction of the
Improvements on the Land.
9. That Purchaser is able to secure a franchise for the national hotel
brand of its choice.
C. During the term of this Contract, Purchaser shall have the right to
enter upon the Land for the purpose of making the tests and investigations, at
its expense, necessary or appropriate to satisfy the foregoing conditions.
Purchaser shall defend, indemnify and hold Seller harmless from any liability
which may arise due solely to such entry. Purchaser shall repair any damage to
the Land in the event this transaction is not consummated.
17. Failure of Conditions: If any of the conditions precedent to
Purchaser's obligation to close have not occurred or been satisfied or been
deemed satisfied on or
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before 210 days after the Time Line Date or any extension thereof as set forth
in Section 10, Purchaser at its sole option may: (a) terminate this Contract by
written notice delivered to Seller on or before the Closing Date, or (b) waive
such conditions precedent and proceed to Closing.
18. Notices: All notices and other communications hereunder shall be
in writing and shall be delivered personally against receipt or shall be sent by
registered mail, certified mail, or Express Mail services, postage prepaid and
return receipt requested, or by nationally utilized overnight delivery service,
addressed to the parties as follows:
As to Seller: Richard E. and May L. Hess
8042 Old Oliver Road
Erie, PA 16509
As to Purchaser: ESSEX PARTNERS INC.
100 Corporate Woods
Rochester, New York 14623
Attn: Thomas W. Blank
Any notice in accordance herewith shall be deemed received when delivery is
received or refused, as the case may be. Additionally, notices may be given by
telephone facsimile transmission, provided that an original copy of said
transmission shall be delivered to the addressee by nationally utilized
overnight delivery services on the day following such transmission. Telephone
facsimiles shall be deemed delivered on the date of such transmission.
19. Parties Bound: This Contract shall be binding upon and inure to
the benefit
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of Seller and Purchaser, their respective heirs, personal representatives,
successors and assigns.
20. Assignment: Purchaser may assign this Contract to a partnership in
which it is a general partner or a corporation in which it is a shareholder,
provided that Purchaser shall remain responsible for the faithful performance of
its obligations under the Contract.
21. Governing Law: The laws of the Commonwealth of Pennsylvania shall
govern the validity, construction, enforcement and interpretation of this
Contract.
22. Expiration: The offer of Purchaser extended by the delivery of this
Contract to Seller shall be automatically revoked unless Seller shall execute
and deliver an executed facsimile copy of the Contract to Purchaser on or before
5:00 p.m., May 13, 1996 to be followed by originals in overnight mail.
23. Multiple Counterparts: This Contract may be executed in a number of
identical counterparts. If so executed, each of such counterparts shall,
collectively, constitute one agreement, but in making proof of this Contract, it
shall not be necessary to produce or account for more than one such counterpart.
If requested by Purchaser, Seller agrees to execute a memorandum of this
Contract in form recordable in the real property records where the Land is
situate.
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24. Entire Agreement: This Contract embodies the entire agreement of the
parties in respect of the transaction herein contemplated, superseding all prior
agreements whether oral or written. Any amendments hereto shall be in writing
and executed by the parties hereto.
Sellers may remove all or part of any building or building fixtures on the
property but are not obligated to do so.
SELLER
/s/ Chuck Patton /s/ Richard E. Hess
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Witness
/s/ May L. Hess
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PURCHASER
ESSEX PARTNERS INC.
/s/ Barbara J. Purvis By: /s/ Jerald P. Eichelberger
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Witness Executive V.P.
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A G R E E M E N T
THIS AGREEMENT made this 19th day of March, 1997, by and between
RICHARD E. HESS and MAY L. HESS, his wife
and
ESSEX PARTNERS, INC.
WITNESSETH:
WHEREAS, the parties have entered into an agreement dated May 17, 1996, and
which agreement has been continued and extended through February 28, 1997, and
WHEREAS, the parties desire to amend said agreement, as continued, as herein set
forth,
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NOW, THEREFORE, the parties acknowledged receipt of a valuable consideration,
state their intent to be legally bound hereby, and agree as follows:
1. The agreement between the parties dated May 17, 1996, as continued and
extended through February 28, 1997, shall be amended so that the settlement
date shall be ten (10) days after final approval of the sewer module for the
project and the entering of a development agreement with regard to the
intersection of Oliver Road and Old Oliver Road, but in no event later than May
16, 1997. Buyer shall have the right to extend the period of time within which
to close by payment of a further nonrefundable deposit of $1,000.00 for one two
week extensions.
2. The parties understand and agree that in addition to the deposits
previously made, an additional Five Thousand ($5,000.00) Dollar deposit is made
with the execution of this agreement, which down payment shall be applied
against the purchase price but which shall be nonrefundable in the event a
closing does not take place under the agreement, unless said closing does not
take place because of the fault of the Seller.
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3. Occupancy of the premises shall be delivered to Buyer no later than one
hundred twenty (120) days after closing.
IN WITNESS WHEREOF, the parties have executed this agreement this 19th day of
March, 1997.
/s/ Richard E. Hess
--------------------------------
Richard E. Hess
/s/ May L. Hess
--------------------------------
May L. Hess
ESSEX PARTNERS, INC.
By /s/ Thomas W. Blank
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Senior V.P.
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AGREEMENT
THIS AGREEMENT, made this 30th day of May, 1997, by and between
RICHARD E. HESS and MAY L. HESS, his wife
and
ESSEX PARTNERS, INC.
WITNESSETH:
WHEREAS, the parties have entered into an agreement dated May 17, 1996, and
which agreement has been continued and extended through February 28, 1997, and
WHEREAS, the parties have entered into an additional agreement dated March 19,
1997, in which the Buyer has the right to extend the settlement date under
certain terms and conditions, therein, until May 30, 1997.
WHEREAS, the parties desire to amend this agreement, as continued, as herein
set forth,
NOW, THEREFORE, the parties acknowledged the receipt of a valuable
consideration, state their intent to be legally bound hereby, and agree as
follows:
1. The agreement between the parties dated May 17, 1996, as continued and
extended through additional agreement dated March 19, 1997 shall be amended so
that
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the settlement date shall be June 4, 1997, or as soon thereafter as can be
scheduled between all parties, but in no case later than June 13, 1997.
2. The Buyer has received a Highway Occupancy Permit for PADOT for improvements
to Oliver Road and Old Oliver Road and approval of its sewer module as a
revision to the Official Sewer Plan of Summit Township by the Pennsylvania
Department of Environmental Protection.
3. The parties understand and agree that in addition to the deposits previously
made, an additional One Thousand ($1,000.00) Dollar deposit is made with the
execution of this agreement, which down payment shall be applied against the
purchase price but shall be non-refundable, unless closing does not take place
because of the fault of the Seller.
4. All other terms and conditions of the Real Estate Purchase Contract as
amended shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this agreement this _________ day
of ________________________, 1997.
/s/ Richard E. Hess
---------------------------------------
RICHARD E. HESS
/s/ May L. Hess
---------------------------------------
MAY L. HESS
ESSEX PARTNERS, INC.
By: /s/ Thomas W. Blank
------------------------------------
Senior V.P.
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REAL ESTATE PURCHASE CONTRACT
-----------------------------
THIS AGREEMENT, made as of the 18th day of May, 1996 between David A.
Kellogg c/o American Business Machines at 115 West 20th Street, Erie, PA 16502
("Seller"), and Essex Partners Inc., a New York corporation with offices at 100
Corporate Woods, Suite 300, Rochester, New York 14623 ("Purchaser"),
WITNESSETH:
1. Seller agrees to sell to Purchaser and Purchaser agrees to buy from
Seller, in accordance with the terms, conditions and stipulations set forth in
this Real Estate Purchase Contract ("Contract"), all of Seller's right, title
and interest in that real property with all improvements located thereon,
approximately as outlined on Exhibit A attached hereto and made a part hereof,
containing 2.5 acres, together with an Ingress/Egress and Sign Easement as set
forth in Section 15 of this Contract (the "Land"). Further, Purchaser shall have
the option of increasing the size of the Land after receipt of its market study
and/or preliminary site plan. It is expressly understood and agreed that Seller
has no right, title or interest in the parcel currently owned by Richard E. and
May L. Hess, 8042 Old Oliver Road, Erie, PA 16509 Erie County Index Number
40-017-073-002.01 for which Purchaser is entering into a separate Real Estate
Purchase Contract. At the time of Closing, that portion of the Hess property
which lies outside of the boundaries of the Land as shown on Exhibit A shall
become the property of Seller.
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2. Purchase Price: The total purchase price to be paid to Seller by
Purchaser for the Land (the "Purchase Price") shall be three hundred sixty-one
thousand dollars ($361,000). If Purchaser exercises its option to purchase more
than the Land as set forth in Exhibit A, the Purchase Price shall be increased
in the amount of $6.89 per square foot.
3. Payment of Purchase Price: Subject to the terms and conditions of
this Contract, the Purchase Price shall be payable to seller at the Closing in
immediately available U.S. funds.
4. Deposit: Upon receipt of a fully executed Contract (the "Time Line
Date"), Purchaser shall deliver its check in the amount of five thousand
dollars ($5,000) to Seller's attorney which shall constitute Purchaser's good
faith deposit ("Deposit"). Purchaser shall have 90 days after the Time Line
Date to notify Seller of its intent to cancel this Contract for any reason
whatsoever and the full Deposit as set forth herein shall be directly returned
to Purchaser. Thereafter in the event this Contract does not close as a result
of failure of any condition in Section 20 or through no fault of Purchaser and
Purchaser waives its right to specific performance of this Contract then the
Deposit and any Additional Deposit as described in Section 12 shall be directly
returned to Purchaser. If Purchaser does not terminate this Contract pursuant
to Section 21 and Purchaser shall fail or refuse to perform its obligations
herein specified at or before the date of Closing (or any agreed upon
extension), the Deposit and Additional Deposit, if any, shall be forfeited as
liquidated damages which the parties hereto agree is a reasonable and proper
amount in light of the
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circumstances, and which forfeitures shall be Seller's sole remedy in law and
equity.
5. Condition of Ownership: A portion of the Land is comprised of
a parcel that Seller does not own, specifically the parcel with Erie County
Index Number: 40-17-73-202 (the "Not Owned Parcel"). At the time of execution
of this Contract, Seller shall deliver to Purchaser evidence of such control
over the Not Owned Parcel sufficient to enable Seller to convey title to the
Land to Purchaser in accordance with all terms of this Contract.
6. Title: Promptly after the Time Line Date, Seller shall provide
Purchaser with a copy of any Abstract of Title any title policy pertaining to
the Land in its possession and Purchaser shall order evidence of title to the
Land by the issuance of a current title insurance binder (the "Title Binder")
through a major national title insurance company selected by Purchaser (the
"Title Company") in the amount of the Purchase Price. The Title Binder shall
set forth the state of title to the Land and to other property that is or will
be subject to any easements or restrictions (existing or to be created pursuant
to this Contract) benefitting the Land, together with all exception or
conditions to such title, including, but without limitation to, all easement,
restrictions, rights-of-way, convenants, reservations, and all other
encumbrances affecting the Land which would appear in the owner's title policy.
7. Exclusive Use and Right of First Refusal: Seller convenants and
agrees that, provided Purchaser fully performs in obligations under this
Contract, Purchaser shall have
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the exclusive right to develop a hotel facility on other lands which Seller
currently owns or controls fronting on Old Oliver Road and all lands contiguous
to such lands fronting on Old Oliver Road and such other lands which Seller may
own or control in the future contiguous to such lands the ("Adjacent Lands").
The exclusive right shall commence on Closing, shall run with the Adjacent Lands
and continue for a period of five (5) years. After expiration of the five (5)
year period, if Seller proposes to sell all or a portion of the Adjacent Lands
for the development of a hotel facility, Purchaser shall have a right of first
refusal exercisable within 30 days of presentation of an executed contract from
a bonafide purchaser acceptable to Seller. A memorandum evidencing the rights
contained herein shall be recorded at the time of Closing.
8. Survey: Promptly after execution of this Contract, Seller
agrees to provide Purchaser with the most recent instrument survey pertaining
to the Land in it possession.
9. Review of Title Binder and Survey: Purchaser shall have 60 days
after the Time Line Date to deliver in writing to Seller Purchaser's objections
to title. Purchasers failure to object to any item on the Title Binder or
survey within the time limitation imposed hereby shall be deemed to be approval
of same by Purchaser.
10. Other Documentation: Seller shall deliver to Purchaser upon
execution of this Contract the originals of copies of any Phase I and Phase II
environmental studies, soils
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test, utility information, topographical maps and subdivision plots and
correspondence, information and documentation which would relate to the use
and/or occupancy of the Land which are in possession of Seller or to which
Seller has access without cost other than copying or duplicating charges.
11. Purchaser's Objection to Title; Defects in Title: Should
Purchaser as described in Section 9 above deliver to Seller its written
objections to title or to matters contained in the survey, Seller shall have 60
days either to remove all such defects or objections or to provide assurances
acceptable to Purchaser that same will be removed at or before Closing;
mortgages, deeds of trust or other liens of a specific amount shall be cleared
before or at Closing, by Seller or, if requested by the Seller, by Purchaser by
deduction from proceeds due Seller. Should Seller be unable to cure (or
provide assurances with respect to) any and all such defects or objections
(except liens as provided above) on or before expiration of the 60 day period,
then Purchaser may, as its option, elect to terminate this Contract and receive
a full refund of the Deposit, or to waive it objections and proceed to Closing.
Seller shall not further intentionally encumber or restrict the title to the
Land without Purchaser's prior written consent which shall not be unreasonably
withheld.
12. Closing: The Closing shall be on or before sooner of (i) the
date which is thirty (30) days after the date which Purchaser has received site
plan approval for
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the improvements (as hereinafter defined), or (ii) 210 days after the Time Line
Date, and shall take place in the offices of the Erie County Clerk, or such
other place mutually designated by the parties, provided, however, that
Purchaser may designate an earlier date for the Closing by written notice
delivered to Seller not less than fifteen (15) days prior to such earlier date
for the Closing so designated in such by Purchaser. Provided, however, that if
Purchaser has shown due diligence in endeavoring to satisfy all contingencies
herein and has been delayed by any agency or entity having control over
satisfaction of those contingencies, then it is agreed that upon written notice
to seller of such delay, Purchaser shall be entitled to an extension of two
months to enable Purchaser to satisfy those contingencies and close this
transaction. An Additional Deposit of $5,000 shall be paid to the Seller on or
before the first day of each month of the extension period.
13. Prorations and Adjustments at Closing: Ad Valorem and similar
taxes assessed against the Land shall be prorated between seller and Purchaser
at the time of Closing on the basis of a 365 day year. Prorations shall be based
upon current year's taxes and assessments, if available, or upon figures for the
last preceding year, in which event Purchaser and Seller shall readjust the
prorations when the current year's taxes and assessments become available. Any
special assessments applicable to the Land including, but not limited to,
"rollback" or other similar assessments or taxes which apply on a change in use
of the Land, if any, whether payable in a lump sum, in installments or
otherwise, shall be paid by Seller. The foregoing obligations shall survive the
Closing.
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14. Transaction Costs: Seller and Purchaser shall each be responsible
for the payment of one-half of all transfer, state and documentary stamps to be
affixed to the instrument. Purchaser shall be responsible for all other costs,
including the cost of the Title Policy, Survey and recording the deed,
provided, however, that each party shall pay its own attorneys' fees.
15. Ingress/Egress and Sign Easement: Serving the demised property is
a 30-foot wide access and sign easement from Peach Street (Route 19) through
land designated as Residue of Land of Travelers Motel, also known as Muggs
Restaurant and Lounge and connecting on the west with Old Oliver Road
("Easement"). The resulting Easement will benefit the Land as well as the lands
remaining with the Seller. A condition of this Contract will be successful
establishment of an Easement Maintenance Agreement between the Seller and the
Purchaser. This condition must be satisfied within ninety (90) days of the Time
Line Date.
A. Conditions of the Easement Maintenance Agreement shall include
but are not limited to the following:
1. Purchaser shall improve and maintain to established standards
the entire surface of the Easement. A proportionate share of improvement and
maintenance expenses, based on lineal feet of frontage, may be assessed against
properties using or served by the Easement. Said expenses may be liened against
the properties.
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2. Bids for expenditures of said improvements and maintenance are to
be presented for approval by the parties which approval may not be unreasonably
withheld prior to the award of Contract. All accounting for said work will be
made available at all times to the affected parties.
3. Obligations for such expenditures for improvements, upkeep and
maintenance are to run with the lands effected by the Easement. A copy of the
Easement Maintenance Agreement shall be recorded at the time of Closing.
4. Purchaser shall be solely responsible for any signs which Purchaser
places in the Easement for its benefit.
16. Warranty Deed and Other Documents Required For Closing:
A. At the Closing, Seller shall deliver the following:
1. Warranty Deed in fee simple, free and clear of all liens and
encumbrances, except subject to the following items now of record: utility,
rights-of-way and easements for the purpose of providing utility service to the
property herein described, common driveway or party wall agreements, recorded
restrictions, and zoning regulations; otherwise the title to the above-described
real estate shall be good and marketable and such as will be insured at the
regular rates by a title insurance company licensed to do business.
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in Pennsylvania. Also, access to a public road may require issuance of a
highway occupancy permit for the Department of Transportation. A specimen deed
shall be delivered by Seller to Purchaser's attorney for review at least ten
(10) days before closing.
2. Documents evidencing the legal status, standing and
authority of Seller and such other documents, including standard form Seller's
affidavits, as may be required by Title Company for issuance of the Title
Policy.
B. At the Closing, Purchaser shall deliver the following:
1. The Purchase Price plus any costs to be shared by
Purchaser in cash, certified funds, or a bank draft.
2. Such documents evidencing the legal status, standing
and authority of Purchaser.
17. Possession: Possession of the Premises shall be delivered to the
Purchaser up to 120 day of closing DAK provided, however, that possession of
the Not Owned Parcel shall be delivered to Purchaser either (i) 120 DAK days
after Closing, or (ii) 120 DAK days after Purchaser has provided written notice
to vacate, but in no event prior to the Closing Date, and Purchaser has
deposited with Seller's attorney twenty-five thousand dollars ($25,000) which
together with the Deposit and Additional Deposit, if any, would be
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forfeited as liquidated damages in the event that the Closing does no occur
through no fault of Seller. At Closing, the twenty-five thousand dollars
($25,000) together with the Deposit and Additional Deposit, if any, will be
applied against the Purchase Price.
18. Demolition: Within 120 DAK days after Closing, Seller, at its
sole cost and expense, shall remove all structural improvements to their
foundation levels, all tanks whether above ground or underground and all other
material and non-organic debris from the Land provided, however, that Buyer
shall be responsible for all demolition on the Not Owned Parcel. Such removal
shall be done in a manner that prevents contamination of the Land by any
environmentally sensitive or toxic material or liquid.
19. Representations and Warranties: For the purpose of inducing
Purchaser to enter into and consummate this transaction, Seller represents and
warrants to Purchaser that to the best of his knowledge and belief:
(i) The Land is not currently being used, has never been used,
as a hazardous waste disposal facility as defined in 40 C.F.R. Section 260.10;
the Land is free of any lien or encumbrance which may be created under any
applicable state or federal law, statute or regulation pertaining to hazardous
waste; and no hazardous waste has been placed onto or into the Land (for
purposes hereof, the term "hazardous waste" includes those substances listed in
40 C.F.R. Section 261.30 and those substances previously determined to be
hazardous by any applicable state or federal law, statute or regulation),
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(ii) There is no pending or threatened condemnation or any road
widening respecting all or any part of the Land,
(iii) Seller is currently or has entered into a contract by
which he will become the owner and holder of fee simple title to the Land and
has full power and authority to execute this Contract and all other documents
necessary to consummate the transaction.
(iv) Seller warrants that he has no knowledge of any deed
restrictions or other contractual restrictions or covenants which would restrict
or impair the Purchaser from developing and operating a limited service hotel
on the land.
20. Conditions to Closing: Purchaser's obligation to purchase the Land
at the Closing is subject to all of the following conditions, which shall have
been fulfilled to Purchaser's satisfaction:
A. At the Closing, the following conditions shall have been satisfied:
1. Good and marketable fee simple title to the Land shall be in
the name of the Seller and any beneficial easements and/or restrictions
appurtenant to the Land are not subject to any interest, the termination,
enforcement, exercise or foreclosure of which could terminate or prevent the
enforcement of such easement or restriction.
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2. No portion of the Land has been taken by or is the subject of a
condemnation proceeding or is under threat of condemnation.
3. There has been no material or adverse change to the condition of
the Land or to the representations and warranties of Seller set forth in
Section 18 hereof.
B. The following conditions shall have been satisfied by the Purchaser or
be deemed waived by the Purchaser on or before Closing:
1. That zoning and the conditions of zoning, including any use permit,
site plan approval, curb cut permit, demolition permit, variances and other
similar governmental approvals required by law or necessitated by Purchaser's
planned use of the property for the construction and operation thereon of a
three-story, limited service hotel having a minimum of 100 guest rooms, along
with all facilities and amenities attendant thereto (hereinafter the
"Improvements"), shall have been received.
2. That all platting or replatting requirements in respect of the Land
have been satisfied by the Purchaser to permit the transfer of title and to
accommodate construction and operation of the Improvements under applicable
laws and regulations.
3. That Purchaser has reasonably determined that all permits
necessary, in Purchaser's sole opinion, for the construction and operation of
the
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Improvements on the Land, are available to Purchaser after receipt of site plan
approval.
4. Easements: Purchaser, with Seller's assistance must be able to
obtain without cost any and all easements necessary to build the proposed
development. Said easements, including but not limited to the access easement,
shall be unencumbered and the title insurance in favor of Purchaser shall
insure such easements.
5. Soil Conditions: The soil, in its natural state, must have
sufficient load-bearing characteristics to support Purchaser's proposed
development, and must have adequate permeability to drain the proposed
development. Seller warrants that to the best of his knowledge, the Premises do
not contain a landfill, hazardous waste, underground mines, caves or
underground streams and that the soil condition and water table are such that
Purchaser can build the proposed development without incurring additional
extraordinary expenses.
6. That no federal, state or local governmental restrictions or
requirements would preclude construction and operation of the Improvements on
the Land.
7. That all utilities including but not limited to electric, gas,
telephone, cable TV, will be available for use by Purchaser along Old Oliver
Road or on the Land. Water will be available at the intersection of Old Oliver
Road and Oliver Road. Purchaser will be responsible for bringing water to the
Land along Old Oliver Road. Seller will pay
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a prorata share of the expense of installation upon Seller's hook-up, based
upon square footage of lands remaining with the Seller. (Tap-in size and
location(s) to be determined during installation.) Seller has the right to
examine and pre-approve cost to accomplish same which approval is not to be
unreasonably withheld. Seller warrants that to the best of his knowledge
sanitary sewer is currently available on the Land. Further, that a storm water
management system can be approved and installed without unreasonable cost. the
capacity of these various services, i.e., utilities, water and sewer, are not
conditions to Closing.
8. That Purchaser has reasonably determined that the Land is free
of any hazardous substances or wastes that would preclude the Construction of
the Improvements on the Land.
9. That Purchaser is able to secure a franchise for the national
hotel brand of its choice.
C. During the term of this Contract, Purchaser shall have the right to
enter upon the Land for the purpose of making the tests and investigations, at
its expense, necessary or appropriate to satisfy the foregoing conditions.
Purchaser shall defend, indemnify and hold Seller harmless from any liability
which may arise due solely to such entry. Purchaser shall repair any damage to
the Land in the event this transaction is not consummated.
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21. Failure of Conditions: If any of the conditions precedent to
Purchaser's obligation to close have not occurred or been satisfied or been
deemed satisfied on or before 210 days after the Time Line Date or any extension
thereof as set forth in Section 12, Purchaser at its sole option may: (a)
terminate this Contract by written notice delivered to Seller on or before the
Closing Date, or (b) waive such conditions precedent and proceed to Closing.
22. Brokers: Seller shall be solely responsible for, and shall pay
Orlando Realtors' real estate commission fee of seven (7%) percent. Seller
agrees to indemnify, defend, and hold Purchaser harmless for any claim for such
commission. Orlando Realtors shall be solely responsible for paying Holland
Metro Inc., REALTORS its share of the commission. Purchaser represents that it
has dealt with no broker other than Holland Metro Inc., REALTORS.
Notwithstanding anything contained herein to the contrary, these indemnities
shall survive the closing.
23. Notices: All notices and other communications hereunder shall be in
writing and shall be delivered personally against receipt or shall be sent by
registered mail, certified
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mail, or Express Mail services, postage prepaid and return receipt requested, or
by nationally utilized overnight delivery service, addressed to the parties as
follows:
As to Seller: David A. Kellogg
c/o American Business Machines
115 West 20th Street
Erie, PA 16502
As to Purchaser: ESSEX PARTNERS INC.
100 Corporate Woods
Rochester, New York 14623
Attn: Thomas W. Blank
Any notice in accordance herewith shall be deemed received when delivery is
received or refused, as the case may be. Additionally, notices may be given by
telephone facsimile transmission, provided that an original copy of said
transmission shall be delivered to the addressee by nationally utilized
overnight delivery services on the day following such transmission. Telephone
facsimiles shall be deemed delivered on the date of such transmission.
24. Parties Bound: This Contract shall be binding upon and inure to
the benefit of Seller and Purchaser, their respective heirs, personal
representatives, successors and assigns.
25. Assignment: Purchaser may assign this Contract to a partnership in
which it is a general partner or a corporation in which it is a shareholder,
provided that Purchaser
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shall remain responsible for the faithful performance of its obligations under
the Contract.
26. Governing Law: The laws of the Commonwealth of Pennsylvania shall
govern the validity, construction, enforcement and interpretation of this
Contract.
27. Expiration: The offer of Purchaser extended by the delivery of this
Contract to Seller shall be automatically revoked unless Seller shall execute
and deliver an executed facsimile copy of the Contract to Purchaser on or before
5:00 p.m., May 18, 1996 to be followed by originals in overnight mail.
28. Multiple Counterparts: This Contract may be executed in a number of
identical counterparts. If so executed, each of such counterparts shall,
collectively, constitute one agreement, but in making proof of this Contract, it
shall not be necessary to produce or account for more than one such counterpart.
If requested by Purchaser, Seller agrees to execute a memorandum of this
Contract in form recordable in the real property records where the Land is
situate.
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29. Entire Agreement: This Contract embodies the entire agreement of the
parties in respect of the transaction herein contemplated, superseding all prior
agreements whether oral or written. Any amendments hereto shall be in writing
and executed by the parties hereto.
SELLER
/s/ /s/ David A. Kellogg
- ---------------------------------- ----------------------------------
Witness David A. Kellogg
PURCHASER
ESSEX PARTNERS INC.
/s/ Barbara J. Purvis By: /s/ Jerald P. Eichelberger
- ---------------------------------- -------------------------------
Witness Executive V.P.
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A G R E E M E N T
THIS AGREEMENT made this 18th day of March, 1997, by and between
DAVID A. KELLOGG, single
and
ESSEX PARTNERS, INC.
WITNESSETH:
WHEREAS, the parties have entered into an agreement dated May 17, 1996, and
which agreement has been continued and extended through February 28, 1997, and
WHEREAS, the parties desire to amend said agreement, as continued, as herein set
forth,
<PAGE> 20
NOW, THEREFORE, the parties acknowledged receipt of a valuable consideration,
state their intent to be legally bound hereby, and agree as follows:
1. The agreement between the parties dated May 17, 1996, as continued and
extended through February 28, 1997, shall be amended so that the settlement date
shall be ten (10) days after final approval of the sewer module for the project
and the entering of a development agreement with regard to the intersection of
Oliver Road and Old Oliver Road, but in no event later than may 16, 1997. Buyer
shall have the right to extend the period of time within which to close by
payment of further nonrefundable deposit of $1,000.00 for each of three two
week extensions.
2. The parties understand and agree that a Five Thousand ($5,000.00) Dollar
deposit was made under the original agreement which shall be delivered to
Kellogg at the time of the execution hereof, and shall be considered a
nonrefundable deposit, but shall be applied to the purchase price upon closing.
In addition to said deposit, there will be a further Five Thousand ($5,000.00)
Dollar deposit made at the execution of this agreement, which down payment shall
be applied against the purchase price but which shall be nonrefundable in the
event a closing does not take place under the agreement, unless said closing
does not take place because of the
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fault of the Seller; same to be delivered at the time of execution hereof.
3. Occupancy of the premises shall be delivered to Buyer no later than one
hundred twenty (120) days after closing.
IN WITNESS WHEREOF, the parties have executed this agreement this 18th day of
March, 1997.
/s/ David A. Kellogg
---------------------------------
David A. Kellogg
ESSEX PARTNERS, INC.
/s/ Thomas W. Blank
----------------------------------
Senior V.P.
3
