<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: August 2, 1996
Date of Earliest Event Reported: July 18, 1996
----------------
SERVICO, INC.
(Exact name of registrant as specified in its charter)
Florida 1-11342 65-0350241
- --------------- ---------------- ---------------------------
(State of other (Commission File (I.R.S. Identification No.)
jurisdiction of Number)
incorporation)
1601 Belvedere Road,
West Palm Beach, FL 33406
- ---------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
407-689-9970
----------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
On July 18, 1996 Servico, Inc., through wholly owned subsidiaries,
acquired five hotels from Seldin Properties, a Nebraska general partnership,
35th Street Corp., an Iowa corporation, Council Bluffs Downtown Center, Inc., an
Iowa corporation, Wichita Airport Hotel, Inc., a Kansas corporation, Northview
Properties, Inc., a Nebraska corporation, Capitol Properties, Inc., an Iowa
corporation, and Southwest Hotel Company, a Nebraska corporation, a series of
related entities, (collectively, the "Sellers"). The hotels consist of: an 89
room Best Western Hotel, Council Bluffs, Iowa; a 161 room Best Western Hotel,
Des Moines, Iowa; a 213 room Best Western Hotel, Omaha, Nebraska; a 168 room
Sheraton Inn, Omaha, Nebraska and a 152 room Holiday Inn, Wichita, Kansas.
The aggregate acquisition price for the properties was $23,300,000 and was
funded by $16,840,000 loan from GMAC Commercial Mortgage Corporation secured
by a first mortgage on each of the hotels and cash of $6,460,000.
Item 7. Financial Statements and Exhibits
a. and b. It is not practical for the Registrant to file the required
historical audited financial statements of certain hotel properties purchased in
1996 or the required proforma financial information on or before the due date of
this Form 8-K. It is anticipated that the financial statements and proforma
financial information required by Item 7 of this Form 8-K will be filed under
cover of Form 8-K/A as soon as practicable but not later than October 1, 1996.
c. Exhibits:
10.1 Purchase Agreement dated as of May 1, 1996.
10.2 Amendment to Purchase Agreement dated June 18, 1996.
<PAGE> 3
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.
SERVICO, INC.
By: /s/ Warren M. Knight
------------------------------
Warren M. Knight
Vice President-Finance and
Chief Financial Officer
Date: August 2, 1996
<PAGE> 1
Exhibit 10.1
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is made as of May 1, 1996, by
and between Servico Hospitality, Inc., a Florida corporation ("Buyer"), Seldin
Properties, a Nebraska general partnership, 35th Street Corp., an Iowa
corporation, Council Bluffs Downtown Center, Inc., an Iowa corporation, Wichita
Airport Hotel, Inc., a Kansas corporation, Northview Properties, Inc., a
Nebraska corporation, Capitol Properties, Inc., an Iowa corporation, and
Southwest Hotel Company, a Nebraska corporation (collectively, "Seller").
RECITALS:
A. Seller owns certain real property and related improvements commonly
known as the "Best Western Central Omaha" and the "Sheraton Inn Omaha", each
located in Omaha, Nebraska, the "Best Western Des Moines West", located in Des
Moines, Iowa, the "Best Western Metro Omaha", located in Council Bluffs, Iowa,
and the "Holiday Inn Wichita", located in Wichita, Kansas.
B. Seller desires to sell said property and improvements, and Buyer
desires to purchase the same, upon the terms and conditions hereinafter set
forth, which, as more fully set forth below, provide for a purchase price of
$24.5 million and an initial deposit of earnest money of $250,000.
AGREEMENTS:
NOW, THEREFORE, in consideration of the amount of Ten Dollars and No/100
($10.00) paid by Buyer to Seller, the receipt and sufficiency of which is
hereby acknowledged, and in consideration of the foregoing Recitals, the mutual
promises of the parties hereto and the mutual benefits to be gained by the
performance hereof, Seller and Buyer hereby agree as follows:
1. Definitions. Defined terms utilized in this Agreement are set forth
on Schedule "1" attached hereto. As used herein, such terms shall have such
meanings to be equally applicable to both the singular and plural forms of the
terms defined.
2. Sale. Seller hereby agrees to sell to Buyer, and Buyer hereby agrees
to purchase from Seller, upon the terms and conditions hereinafter provided,
the Project.
3. Buyer's Conditions Precedent.
(a) It is a condition precedent to the performance by Buyer of its
obligations hereunder that the following conditions precedent be satisfied
or expressly waived in writing by Buyer: (i) on or before the expiration
of the Due Diligence Period, Buyer obtains the final, unconditional and
irrevocable approvals and such assurances as Buyer may deem necessary or
desirable of all governmental and quasi- governmental authorities,
agencies and bodies having or purporting to have jurisdiction over Seller,
Buyer, and the Project, or any of them, to Buyer's acquisition of the
Project and Buyer's intended use thereof, all on terms and conditions
satisfactory to Buyer in its sole and absolute discretion; (ii) on or
before the expiration of the Due Diligence Period, Buyer is satisfied in
its sole and absolute discretion with the results of its inspections,
document reviews and studies described in Sections 5, 6 and 10 hereof;
(iii) on the Actual Closing Date, there has been no material adverse
changes in the physical condition of any of the Improvements which has
occurred subsequent to the expiration of the Due Diligence Period; (iv) on
the Actual Closing Date, the representations and warranties of Seller
hereunder are true and correct; and (v) on or before the Closing Date,
Seller shall fulfill its obligations under this Agreement.
<PAGE> 2
(b) In the event the conditions precedent set forth in Section 3(a)
hereof are not fully and completely satisfied, as evidenced conclusively
in a written certification from Buyer, or waived in writing by Buyer on or
before the expiration of the Due Diligence Period, in the case of Sections
3(a)(i) and (ii) hereof, on or before the Actual Closing Date, in the case
of Sections 3(a)(iii) and (iv) hereof, or on or before the Closing Date,
in the case of Section 3(a)(v) hereof, and Buyer elects in writing to
terminate this Agreement, then this Agreement shall thereafter terminate.
In the event of termination of this Agreement pursuant to this Section,
both parties shall be relieved of all of their respective obligations
hereunder.
4. Closing Date Extension; Closing.
(a) Buyer may, at its option and without any action on the part of
Seller, unilaterally extend the Closing Date from July 1, 1996 to August
16, 1996 by delivery by Buyer to Seller of written notice of Buyer's
election to extend the Closing Date, as aforesaid, and delivery by Buyer
to Title Company of the Additional Deposit, to be held, maintained,
invested and disbursed by Title Company in accordance with the Deposit
Agreement. Such notice and the Additional Deposit shall be delivered
prior to 11:59 p.m. (Miami, Florida time) on July 1, 1996. Upon delivery
of such notice and the Additional Deposit, as aforesaid, the Closing Date
shall be automatically extended to August 16, 1996 and, for purposes of
the Deposit Agreement, the Deposit shall include the amount of the
Additional Deposit.
(b) Buyer and Seller shall arrange a mutually agreeable date and
time for closing, which closing shall be held no later than the Closing
Date. The closing of the purchase and sale of the Project shall take
place at the offices of Buyer's counsel in Minneapolis, Minnesota, or at
such other location as may be agreed upon by Buyer and Seller.
5. Title Examination.
(a) On or before May 17, 1996, Seller, at its sole cost and expense,
shall obtain and deliver to Buyer, for Buyer's review and approval, the
Title Evidence.
(b) The Title Evidence shall be subject to Buyer's satisfactory
review and approval as to marketability and compliance of the Project with
Legal Requirements. All objections to the Title Evidence shall be
delivered to Seller in writing within ten (10) days of the receipt of all
such Title Evidence.
(c) Seller agrees to correct all such objections, excluding
Permitted Exceptions, no later than the Closing Date.
<PAGE> 3
(d) In the event that any title objections have not been corrected
by Seller or waived in writing by Buyer prior to the Closing Date, Buyer
may either (i) delay closing for such period(s) as Buyer may elect (not to
exceed 120 days in the aggregate), without waiving such objections, (ii)
proceed with closing and waive such objections, (iii) terminate this
Agreement, or (iv) pursue one or more of the remedies available to it
under Section 12 hereof. In the event of termination pursuant to the
provision of this Section, both parties shall be relieved of all
obligations hereunder. In the event that, initially, Buyer elects (i)
above, Buyer may subsequently elect (ii), (iii) or (iv) above.
(e) On the Actual Closing Date, Buyer shall attach to this Agreement
as Exhibit "1" the legal description of the Land, as determined by the
Title Evidence and any corrections required by Buyer pursuant thereto.
The legal description currently set forth on Exhibit "1" attached hereto
is, to the best of Seller's knowledge, the correct legal description of
the Land.
6. Delivery of Documents; Inspection. Seller shall, at its sole cost
and expense and within ten (10) days after the date of this Agreement, provide
Buyer with true, accurate, complete and legible copies of the Property Records
and all documents, information and other materials comprising, evidencing or
creating the Personal Property, Contract Rights, Space Leases and Name.
7. Taxes; Prorations and Closing Costs.
(a) Seller shall pay or cause to be paid all real estate taxes and
special assessments for the Project due and payable in or deferred with
respect to the years prior to the year in which the Actual Closing Date
occurs. All real estate taxes due and payable in the year in which the
Actual Closing Date occurs shall be prorated between Buyer and Seller as
of the Actual Closing Date. All special assessments pending, levied or
due and payable on or prior to the Actual Closing Date shall be paid by
Seller on or before the Actual Closing Date. Seller agrees to pay into
escrow with the Title Company on the Actual Closing Date the amount, if
any, required by the Title Company in order to provide Buyer with
affirmative coverage over the amount of real estate taxes and special
assessments pending or not susceptible of payment on the Actual Closing
Date and required to be paid by Seller hereunder. On the Actual Closing
Date, Seller shall pay all other impositions, liens, and charges affecting
the Project attributable to the period through the Actual Closing Date.
(b) All subdivision and platting costs and expenses heretofore
incurred in connection with the Land, including all subdivision exactions,
fees and costs and all dedication of land for parks or other public uses
or payment of fees in lieu thereof, shall be paid by Seller on or prior to
the Actual Closing Date.
<PAGE> 4
(c) Seller shall pay on the Actual Closing Date any recording costs
(other than with respect to the Warranty Deed described in Section 11(a)
hereof), transfer and deed taxes, sales taxes, surtax, excise or similar
taxes incurred in connection with conveying the Project to Buyer. The
amount of the premium for any title insurance policy issued to Buyer
pursuant to the Commitment shall be paid by Buyer. Buyer and Seller shall
share equally any closing fee charged by Title Company. Buyer shall pay
the recording costs with respect to the Warranty Deed described in Section
11(a) hereof.
(d) Seller shall be solely responsible for any charge incurred in
order to obtain the estoppel certificates required under Section 11(a)
hereof.
(e) Prepaid rents and all room and other deposits and advance
payments under booking arrangements and tradeout agreements for use of any
of the Project shall be transferred to Buyer on the Actual Closing Date.
Except as set forth in the preceding sentence, Seller shall be entitled to
all income, receipts and revenue with respect to the period up to the
Actual Closing Date and remain responsible for all invoices, payables and
other obligations with respect to the period up to and including the
Actual Closing Date. Buyer shall be entitled to all income, receipts and
revenue with respect to the period on and subsequent to the Actual Closing
Date and become responsible only for such invoices, payables and other
obligations as arise with respect to the period subsequent to the Actual
Closing Date and which are the subject of the Assumption Agreement.
(f) All tenant security and damage deposits, tax, insurance and
other escrows and prepaid rent with respect to the Space Leases shall be
transferred by Seller to Buyer on the Actual Closing Date. All collected
rental income under the Space Leases, if any, with respect to the month in
which the Actual Closing Date occurs shall be prorated between Seller and
Buyer as of the Actual Closing Date.
(g) Seller shall arrange for hotel guests to sign new deposit box or
other appropriate receipts on the day before the Actual Closing Date with
respect to baggage, personal property, laundry, valet packages and other
property of hotel guests checked or left in the care of Seller by
transient hotel guests or tenants and, to the extent such receipts are not
obtained, such property shall be sealed, listed in an inventory prepared
and signed jointly by Buyer and Seller as of the Actual Closing Date, and
Buyer shall be responsible from and after the Actual Closing Date for all
such property listed in said inventory. Notwithstanding the foregoing, to
the extent a hotel guest has not signed a new safe deposit box receipt,
Seller shall continue to be responsible for the contents thereof and shall
indemnify and hold Buyer harmless for any and all losses,
misappropriations, thefts, or otherwise improper removals from said safe
deposit boxes.
<PAGE> 5
(h) All accrued and unpaid obligations of Seller and its manager
under its salary and employee benefits arrangements in place as of the
Actual Closing Date for employees at the Project for those employees whom
Buyer shall be retaining as of the Actual Closing Date, including without
limitation, unemployment compensation benefits, pension benefits,
salaries, bonuses, sick leave, vacation and other similar forms of
compensation through the Actual Closing Date, including all employer taxes
associated with vacation and sick pay, shall be credited to Buyer.
(i) Prorations hereunder shall, where applicable, be made on the
basis of a 365-day year and, for any month, on the basis of the number of
days elapsed. For purposes of the provisions of this Section 7, all
accounting shall occur as of 12:01 a.m. on the Actual Closing Date.
(j) In the event Seller shall fail to obtain and deliver the
certificate required under Section 11(a)(xviii) hereof, Buyer shall be
entitled to withhold from the Purchase Price an amount which it reasonably
determines is necessary to adequately protect Buyer against Seller's
failed performance.
(k) On the Actual Closing Date, Buyer shall be responsible for any
transfer fee imposed by any franchisor under the License Agreement, to the
extent required under the License Agreement and to the extent such License
Agreement is the subject of the Assumption Agreement.
(l) On the Actual Closing Date, Buyer shall reimburse Seller an
amount equal to one-half of the actual costs paid by Seller to obtain the
Survey.
(m) On the Actual Closing Date, Seller shall reimburse Buyer an
amount equal to one-half of the actual costs paid by Buyer for filing fees
incurred in connection with Buyer's compliance with the reporting
requirements of the Hart-Scott- Rodino Antitrust Improvements Act of 1976,
as amended.
8. Representations and Warranties of Seller. As a material inducement
to Buyer to effectuate the transactions herein contemplated, Seller represents
and warrants to and covenants and agrees with Buyer as set forth on Schedule
"2" attached hereto.
9. Eminent Domain; Casualty. In the event that, prior to the Actual
Closing Date, all or any portion of the Project, shall have been damaged or
destroyed to any extent by fire, earthquake, flood or other cause or casualty
or shall have been affected by condemnation or taking by eminent domain, or
shall be the subject of any condemnation proceeding which shall have been
commenced or of which Buyer or Seller shall have received actual or
constructive notice, or shall be sold by Seller in lieu thereof, Buyer shall
have the option, but not the obligation, to accept the Project, or such title
thereto as Seller can convey, in such condition as the Project or title may
then be, with no reduction in the Purchase Price, but together with the right
to receive the proceeds of any insurance or condemnation award or sale in lieu
of such condemnation proceeding which shall have been or shall be made in
connection with such damage, destruction, condemnation or taking. Such option
must be exercised by Buyer by written notice to Seller within a reasonable time
following receipt by Buyer of written notice from Seller of such damage,
destruction, condemnation or taking. In the event of termination of this
Agreement pursuant to this Section, both parties shall be relieved of all
obligations hereunder. Pending the exercise, if any, of such option by Buyer,
at Buyer's option the Closing Date shall be extended for a reasonable period of
time.
<PAGE> 6
10. Possession of the Project; Inspection. Possession of the Project
shall be delivered to Buyer on the Actual Closing Date. Buyer, and Buyer's
employees, agents and representatives, shall have the right, at its cost and
expense and upon reasonable advance notice, to enter on the Land and
Improvements at any reasonable time, and from time to time, before the Actual
Closing Date, for the purposes of making environmental, soil, percolation and
other tests and evaluations, examining and surveying the Land, preparing
preliminary architectural, engineering, and zoning plans and studies, showing
the Land and Improvements to prospective tenants and lenders, and otherwise.
Buyer shall indemnify and hold Seller harmless from all actual liabilities and
expenses incurred and paid by Seller as a direct result of any act or omission
of Buyer or its employees, agents or representatives with respect to such right
of entry and shall also restore the Land and Improvements to their condition
prior to the exercise of such right of entry. The obligations of Buyer under
the preceding sentence shall survive for six (6) months following the
termination of this Agreement in accordance with the terms of this Agreement.
11. Documents to be Delivered and Actions to be Taken at Closing.
(a) Seller shall, on the Closing Date, execute and deliver, or cause
to be executed and delivered, to Buyer the following documents and shall
take or cause to be taken the following actions, all of which documents
and actions shall be satisfactory to Buyer, and at Buyer's election, shall
be made and taken separately for each Hotel:
(i) A Warranty Deed from Seller in recordable form conveying
good and marketable fee simple title to all of the Land and
Improvements to Buyer, free and clear of all matters, except for the
Permitted Exceptions.
(ii) A Bill of Sale from Seller conveying good and marketable
title to the Personal Property to Buyer, free and clear of all
matters.
(iii) An Assignment from Seller conveying all of the
Contract Rights and Name to Buyer.
(iv) An agreement between Buyer and Seller pursuant to which
Seller assigns to Buyer and Buyer assumes from Seller, as of the
Actual Closing Date, the License Agreement (which Buyer elects to
assume in accordance with the provisions of Section 8(ee) hereof
(Schedule "2" attached hereto)), Space Leases and Service Contracts
(which Buyer elects to assume in accordance with the provisions of
Section 8(jj) hereof (Schedule "2" attached hereto)) (the "Assumption
Agreement").
(v) An Affidavit of Seller certifying that on the Actual
Closing Date there are no parties in possession (other than tenants
under the Space Leases and hotel guests), no outstanding, unsatisfied
judgments, tax liens or bankruptcies against or involving Seller,
that there has been no skill, labor or material furnished to the
Project for which mechanics' liens could be filed, and that to
Seller's knowledge there are no other unrecorded interests the
Project of any kind.
<PAGE> 7
(vi) A FIRPTA Affidavit in accordance with Section 1445 of
the Tax Code.
(vii) Estoppel certificates from each franchisor or licensor
under License Agreement which are the subject of the Assumption
Agreement.
(viii) Estoppel certificates from each tenant under the Space
Leases.
(ix) Estoppel certificates from each party to the Service
Contracts which are the subject of the Assumption Agreement.
(x) All such documents as Buyer may reasonably require (other
than opinions of counsel) in order to determine that: Seller is a
duly organized, validly existing entity and in good standing under
the laws of its state of organization; Seller has the authority to
execute, deliver and perform this Agreement and the documents
required to be delivered hereunder; the persons who executed the same
were duly authorized to execute the same and to bind Seller by all
necessary action of Seller; and said documents are enforceable
against Seller in accordance with their respective terms, subject
only to equitable principles and the application of laws dealing with
creditor's rights.
(xi) Any Due Diligence Materials not previously delivered by
Seller to Buyer in accordance with Section 6 hereof and, to the
extent available, originals of all Due Diligence Materials.
(xii) Operating statements for the Project through the
period ending thirty (30) days prior to the Actual Closing Date.
(xiii) Keys to the Improvements and every lock thereon.
(xiv) A complete set of all guest registration cards, guest
transcripts, guest histories and all other available guest
information.
(xv) Certificate(s)/registration(s) of title for any vehicles
comprising the Personal Property.
(xvi) An opinion of counsel to Seller that: Seller is a
duly organized, validly existing entity and in good standing under
the laws of its state of organization; Seller has the authority to
execute, deliver and perform this Agreement and the documents
required to be delivered hereunder and that the persons who executed
the same were duly authorized to execute the same and to bind Seller
by all necessary action of Seller; said documents are enforceable
against Seller in accordance with their respective terms, subject to
equitable principles and the application of laws dealing with
creditor's rights; the Project is not in violation of any Legal
Requirement; the Project has all necessary permits, authorizations,
approvals, and licenses to operate in accordance with applicable
Legal Requirements for its current use; and the conveyance of the
Project is in compliance with all applicable Bulk Sales laws and
requirements.
<PAGE> 8
(xvii) Original letters signed by Seller for delivery by
Buyer to the tenants and service providers of the Project giving
notice of the change of ownership of the Project.
(xviii) A certificate under seal, issued by the appropriate
official of the State showing that Seller (or the management company,
as may be applicable) has paid all required sales taxes and state
unemployment compensation contributions or other taxes required of it
as an employer with respect to the Project through the Actual Closing
Date.
(ixx) A written instrument executed by Seller conveying and
transferring to Buyer all of Seller's right, title and interest in
any telephone numbers and TWX numbers relating to the Project, and,
if Seller maintains a post office box, conveying to Buyer all of its
interest in and to such post office box and the number associated
therewith, so as to assure a continuity in operation and
communication.
(xx) All such further instruments and documents as may required
under the terms of this Agreement or as may be reasonably necessary
in order to complete any and all of the transactions contemplated in
this Agreement to be completed by Seller on or before the Closing
Date.
(b) If Buyer shall have satisfied or waived in writing the
conditions precedent to its performance as herein provided, and if Seller
shall have performed all of its obligations hereunder to the Closing Date,
Buyer shall, on the Closing Date, deliver to Seller the Purchase Price, or
such lesser amount as a result of the adjustments and prorations set forth
in Section 7 hereof, and shall execute and deliver the Assumption
Agreement.
<PAGE> 9
12. Remedies.
(a) In the event that Seller shall fail to perform any of its
obligations hereunder within the time for or in the manner of performance
herein provided following the expiration of any applicable grace or cure
period, Buyer shall have the right to receive from Title Company the
Deposit under the Deposit Agreement, and in addition to any other rights
or remedies available to Buyer at law or in equity, Buyer shall have the
right, but not the obligation, to commence an action against Seller for
specific performance.
(b) In the event that Buyer shall fail to perform any of its
obligations hereunder following the expiration of any applicable grace or
cure period, Seller may, in the event of such an occurrence, and as its
sole and exclusive remedy, terminate this Agreement by written notice to
Buyer and in accordance with applicable law. In the event of termination
of this Agreement in accordance with applicable law, all of the rights and
obligations of Buyer and Seller under this Agreement shall be terminated.
The Deposit Agreement provides that upon termination of this Agreement by
Seller, as aforesaid, Seller shall be entitled to receive from Title
Company the Deposit. It is intended by Buyer and Seller that the Deposit
(and the Additional Deposit, if delivered to Title Company in accordance
with Section 4(a) hereof) shall, upon default by Buyer and termination of
this Agreement by Seller, constitute liquidated damages to Seller and not
a penalty.
(c) Prior to the exercise by Buyer or Seller of their respective
rights under this Section 12, the non-defaulting party shall provide
written notice specifying such default to the other party (the "Defaulting
Party") and the Defaulting Party shall have ten (10) days following such
notice to cure such default.
13. [Intentionally Omitted]
14. Liquor Licenses. Buyer shall make and diligently prosecute an
application for approval of the transfer of all liquor licenses and alcoholic
beverage licenses necessary to operate the restaurants, bars and lounges
presently located within the Project, from Seller to Buyer (or for the issuance
of new licenses in favor of Buyer) . To that end, Seller and Buyer shall
cooperate each with the other, and each shall execute such transfer forms,
license applications and other documents as may be necessary to effect such
transfer. If the liquor license is in the name of a third party manager or
related party to Seller, Seller shall cause such party or parties to cooperate
in such transfer. If permitted under the laws of the jurisdiction in which the
Project is located, the parties shall execute and file all necessary transfer
forms, applications and papers with the appropriate liquor authorities prior to
the Actual Closing Date, to the end that the transfer shall take effect, if
possible, on the Actual Closing Date. If not so permitted, then the parties
agree each with the other that they will promptly execute all transfer forms,
applications and other documents required by the liquor authorities in order to
effect such transfer at the earliest date in time possible consistent with the
laws of the State in order that said liquor licenses may be transferred from
Seller to Buyer at the earliest possible time. If under the laws of the State,
such licenses cannot be transferred until after the closing of the transaction
contemplated hereby, Seller will cooperate with Buyer in keeping open the bars
and lounges and liquor facilities of the Project between the Actual Closing
Date and the time when such liquor license transfers actually become effective,
by exercising management and supervision of such facilities under the existing
liquor license, which may include entering into lease agreements and management
agreements in form and content reasonably acceptable to both Buyer and Seller;
provided, however that (a) Buyer shall indemnify and hold Seller harmless from
any liability, damages or claims encountered in connection with such operations
during said period of time, and Buyer shall procure and pay for dram shop
liability insurance naming Buyer and Seller as insured thereunder, and (b) the
obligation of Seller to cooperate and keep open the liquor facilities of the
Project shall terminate one hundred eighty (180) days after the Actual Closing
Date, or earlier, if Buyer obtains its liquor licenses at an earlier date.
Buyer shall not be required to close the within transaction if, prior to the
Actual Closing Date, Buyer reasonably determines that there will be an
interruption of more than two (2) days of its right to operate the restaurants,
bars and lounges located at the Project. Upon such determination by Buyer,
Buyer, prior to the Actual Closing Date, may elect to extend the Closing Date
for an additional thirty (30) days or to terminate this Agreement. In the
event of termination of this Agreement pursuant to the preceding sentence, both
parties shall be relieved of all obligations hereunder. Following the Actual
Closing Date, Buyer shall have no right to terminate this Agreement in
accordance with this Section 14.
<PAGE> 10
15. Notices. All notices and demands hereunder shall be in writing, and
shall be deemed to have been properly given or served as of (a) the date of
personal delivery with acknowledgement of receipt or refusal; (b) three (3)
business days after the same is deposited in the United States mail, prepaid,
for delivery by registered or certified mail, return receipt requested; or (c)
the first business day after the date delivered to a reputable overnight
courier service providing proof of delivery. Notice may be given by facsimile
and shall be deemed given upon receipt (provided a hard copy of such notice is
mailed or delivered in accordance with the preceding sentence of this Section
15). The initial addresses of Seller and Buyer are set forth below:
Buyer: Servico Hospitality, Inc.
Servico Centre-South
1601 Belvedere Road
West Palm Beach, Florida 33406
Attention: Mr. David A. Buddemeyer
Mr. Peter J. Walz
Facsimile: (407) 689-0321
Confirmation No.: (407) 689-9970
With a Copy to: Popham, Haik, Schnobrich & Kaufman, Ltd.
3300 Piper Jaffray Tower
222 South Ninth Street
Minneapolis, Minnesota 55402
Attention: L.J. Rotman, Esq.
Facsimile: (612) 334-8888
Confirmation No.: (612) 334-2675
Seller: Seldin Company
Montclair Professional Center
13057 West Center Road
Omaha, Nebraska 68144
Attention: Mr. Bill R. Myers
Mr. Ted M. Seldin
Facsimile: (402) 333-4251
Confirmation No.: (402) 333-7373
With a Copy to: Epstein & Epstein
Regency One Building
10050 Regency Circle, No. 123
Omaha, Nebraska 68114-3721
Attention: Irving B. Epstein, Esq.
Facsimile: (402) 397-1535
Confirmation No.: (402) 397-1515
Buyer and Seller may designate an additional or another address upon
giving notice to the other parties pursuant to this Section. Notice given
in any other manner other than as stated herein, shall be deemed effective
only upon receipt by the party to whom such notice is given.
<PAGE> 11
16. Revision of Legal Description (Best Western Central Omaha). Buyer
acknowledges that Seller is attempting to subdivide the Land described on
Exhibit "1-C" attached hereto (the "Entire Parcel") such that the portion
thereof to be conveyed to Buyer shall exclude an approximately 2.5 acre parcel
in the northerly portion of the Entire Parcel as generally depicted on the
sketch attached hereto as Exhibit "9" (the "Excluded Land"). Buyer agrees that
the Entire Parcel to be conveyed on the Closing Date shall exclude the Excluded
Land (such portion of the Entire Parcel excluding the Excluded Land being
referred to herein as the "New Parcel"), provided that Buyer receives prior to
the Closing Date the following in form and substance satisfactory to Buyer:
(a) evidence that all required governmental approvals have been
received in order to separate the Excluded Land from the balance of the
Entire Parcel;
(b) evidence that an acceptable legal description for the New Parcel
has been prepared and shown on the Survey and that the Title Company will
issue a title insurance policy for the New Parcel in form and content
similar to the title insurance policy to be required by Buyer for the
Entire Parcel;
(c) a recordable easement agreement pursuant to which access and
utility easements are mutually granted for the benefit of the New Parcel
and the Excluded Land as needed; and
(d) a recordable document containing use restrictions to be filed
against the Excluded Land which prohibit any use thereon as a hotel, gas
station, automotive repair shop, or industrial facility for a period of
not less than twenty-five (25) years from the Actual Closing Date.
17. Miscellaneous.
(a) Interpretation. All previous negotiations and understandings
between Seller and Buyer or their respective agents and employees, with
respect to the transactions set forth herein, whether oral or written, and
including that certain correspondence dated April 2, 1996, are merged in
this Agreement, which fully and completely expresses the parties' rights,
duties and obligations with respect to the subject matter hereof. This
Agreement and the Deposit Agreement, together with the related agreements
contemplated hereunder, constitutes the entire understanding between Buyer
and Seller. This Agreement may be amended or modified only in a writing
signed by Seller and Buyer. All conditions precedent to Buyer's
performance hereunder and all options in favor of Buyer hereunder to
terminate this Agreement are for the sole benefit of Buyer and, as such,
may be unilaterally waived by Buyer. If more than one person or entity
has executed this Agreement or the Deposit Agreement, as Seller, or any of
the documents required of Seller under Section 11(a) hereof, all such
persons and entities shall be jointly and severally liable hereunder and
thereunder.
<PAGE> 12
(b) Brokers. Buyer and Seller represent and warrant to each other
that they have not retained or utilized the services of any real estate
broker in connection with the transactions contemplated under this
Agreement. Each party agrees to indemnify, defend and hold the other
harmless from and against any and all claims, fees, commissions and suits
of any real estate broker or agent with respect to services claimed to
have been rendered at the request of or through or under such first party
in connection with the execution of this Agreement or the transactions set
forth herein.
(c) Headings. The headings of the Sections in this Agreement are
inserted for convenience only and shall not constitute a part hereof.
(d) Survival. The warranties, representations, covenants,
agreements, and guarantees contained herein on the part of Seller shall
survive any termination, cancellation or expiration of this Agreement,
shall survive the Actual Closing Date, and shall not be deemed merged into
any deed, bill of sale, assignment or other instrument delivered at
closing or at any other time.
(e) Time. Time shall be of the essence hereof.
(f) Governing Law. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the United States
of America and the State of Nebraska, without regard to principles of
conflict of laws. Buyer and Seller consent to venue and jurisdiction in
the state and federal courts situated in the State of Nebraska.
(g) Counterparts. This Agreement and any amendments to this
Agreement may be executed in counterparts, each of which shall be fully
effective and all of which together shall constitute one and the same
instrument.
(h) Third Party Beneficiary. There are no third party beneficiaries
of this Agreement, intended or otherwise.
(i) No Joint Venture. Buyer and Seller, by entering into this
Agreement or consummating the transactions contemplated hereby, shall not
be considered partners or joint venturers.
(j) Severability. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision hereof, and this
Agreement shall be construed as if such invalid, illegal, or unenforceable
provision had never been contained herein.
<PAGE> 13
(k) No Solicitation. From and after the date of this Agreement and
continuing through and until the Actual Closing Date, Seller shall not,
and shall cause its partners, affiliates and related parties and its and
their respective officers, directors, shareholders, trustees, employees
and agents to not, solicit, negotiate, discuss (other than to inform such
third party that Seller has entered into an agreement to sell the Project)
or enter into any proposal, offer or agreement in connection with the
sale, transfer or disposition of all or any portion of the Project from,
with, by or between any third party, other than Buyer.
(l) FIRPTA Covenant. Seller, under the penalty of perjury, declares
that it is not a resident alien, foreign corporation, foreign partnership,
foreign trust or foreign estate as those terms are defined in the Tax Code
and the regulations promulgated thereunder and warrants and represents to
Buyer that Buyer has no obligation under Section 1445 of the Tax Code to
withhold tax.
(m) Enforcement Costs. In the event Seller or Buyer fails to
fulfill any of their respective obligations under this Agreement and the
other commences an action to enforce this Agreement, the party prevailing
in such action shall be entitled to receive its reasonable attorney's fees
and costs of enforcement.
(n) Assignment. Seller agrees that Buyer, upon written notice to
Seller, may assign its rights and obligations under this Agreement at any
time provided, however, that (i) any such assignee expressly agrees to
assume Buyer's obligations hereunder, and (ii) such assignment shall not
relieve Buyer of its obligations hereunder.
(o) Seller Cooperation. Seller agrees that Buyer may, prior to
closing, make applications, requests and commence proceedings with third
parties and any Governmental Authority necessary and incident to Buyer's
acquisition and intended development and use of the Project. Seller
agrees to execute, join in and fully cooperate with all requests,
petitions and other instruments necessary or required by any such third
party or Governmental Authority.
(p) Successors. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
permitted assigns.
(q) Deposit Agreement. Contemporaneous with the execution and
delivery of this Agreement, Buyer shall deliver the Deposit to Title
Company and Buyer, Seller and Title Company shall execute and deliver the
Deposit Agreement.
<PAGE> 14
(r) Construction. All of the parties to this Agreement have
participated freely in the negotiation and preparation hereof;
accordingly, this Agreement shall not be more strictly construed against
any one of the parties hereto.
(s) Hold Harmless.
(i) Seller shall indemnify, defend, protect and hold Buyer
harmless for any and all claims for damage or injury to person or
property including death or other damages, or otherwise, which
occurred while the Project was owned by Seller, regardless of whether
claims are asserted for causes of action. Similarly, Buyer shall
indemnify, defend, protect and hold Seller harmless for any and all
claims for damage or injury to person or property including death or
other damages, or otherwise, which occurred while the Project is
owned by Buyer, regardless of when the claims are asserted for causes
of action.
(ii) Seller shall indemnify, defend, protect and hold Buyer
harmless from and against any damage, cost, expense, loss, claim or
liability that may arise as the result of the inaccuracy or breach of
any representation or warranty of Seller contained in this Agreement
or in any of the documents to be executed or delivered by Seller in
accordance with the terms hereof or in connection with or related to
any of the matters described on Exhibit "10" attached hereto.
(t) Tax-Deferred Exchange. Seller and Buyer agree to cooperate with
each other if notified that the Project, or any portion thereof, will be
part of a tax- deferred exchange under Section 1031 of the Tax Code.
Seller and Buyer agree to take such actions as may be reasonably requested
by the other in order to facilitate such exchange, so long as such actions
do not delay the Closing Date or result in any additional costs to Seller
or Buyer.
(u) Buyer Due Diligence. Prior to May 5, 1996, Buyer shall deliver
to Seller evidence that Buyer has ordered with respect to the Project an
appraisal, environmental audit and physical inspection.
<PAGE> 15
(v) "As-Is" Transaction. Except as set forth in this Agreement or
in any of the documents to be executed and delivered by Seller pursuant to
Section 11(a) of this Agreement, the sale of the Project from Seller to
Buyer shall be on an "as-is" basis.
(w) Buyer Authority. Buyer represents and warrants to Seller that:
(i) Buyer is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Florida. Buyer
has all necessary powers to own its own properties and to carry on
its business as now conducted, and has all requisite power and
authority to execute, deliver and perform its obligations under this
Agreement and the Deposit Agreement.
(ii) The execution and delivery by Buyer of this Agreement and
the Deposit Agreement, and the performance by Buyer of its
obligations hereunder and thereunder, have been duly and validly
authorized and no other actions or proceedings on the part of Buyer
are necessary to authorize such execution, delivery and performance.
This Agreement and the Deposit Agreement have been duly executed and
delivered by Buyer, and are the valid and legally binding obligations
of Buyer, enforceable against Buyer in accordance with the respective
terms hereof and thereof.
(x) Room Reservations. Following the Actual Closing Date, Buyer
agrees to honor all hotel room reservations for the Project which were
made by Seller in the ordinary course of business at prevailing market
rates and disclosed to Buyer in writing by Seller with reference to this
Section 17(x) no later than five (5) days prior to the expiration of the
Due Diligence Period.
(y) Charitable Remainder Trust. Buyer agrees to cooperate with
Seller if Buyer is notified by Seller prior to the Closing Date that
Seller desires to convey the Project to a charitable remainder trust in
accordance with the Tax Code, provided that such cooperation and
transaction do not (i) delay the Closing Date, (ii) result in any
additional costs to Buyer, and (iii) relieve Seller of any obligation or
liability under this Agreement, the Deposit Agreement or any of the
documents to be executed or delivered by Seller under this Agreement, and
provided that such transactions occur on the Actual Closing Date.
(z) Confidentiality. During the term of this Agreement, neither
Seller nor Buyer or their respective officers or employees shall divulge
or communicate any of the particular terms of this Agreement or the
existence of this Agreement or any matters related to this transaction to
any third party (except for counsel, the Title Company and its local
affiliates, surveyors, financial advisors and lenders). Notwithstanding
the foregoing, Buyer may seek advice and communicate with professional
agents, financial advisors, institutional lenders, investors or such other
consultants Buyer deems necessary regarding any inspections or due
diligence items set forth in this Agreement or prospective financing of
the acquisition. Except as provided herein, neither Seller nor Buyer
shall divulge any information to third parties without specific written
consent of the other party. After closing, Seller may disclose any
information which is in the public records and Buyer may disclose any
information which it desires to disclose. Notwithstanding the foregoing,
Buyer may issue such press releases or other public announcements or make
such filings as may be required by law or if advised by counsel to do so.
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"BUYER"
SERVICO HOSPITALITY, INC.,
a Florida corporation
By /s/ David Buddemeyer
Its President
"SELLER"
SELDIN PROPERTIES,
a Nebraska general partnership
By/s/ Theodore M. Seldin
Its General Partner
35TH STREET CORP.,
an Iowa corporation
By/s/ Theodore M. Seldin
Its President
COUNCIL BLUFFS DOWNTOWN CENTER,
INC.,
an Iowa corporation
By/s/ Theodore M. Seldin
Its Vice President
WICHITA AIRPORT HOTEL, INC.,
a Kansas corporation
By/s/ Theodore M. Seldin
Its Secretary
NORTHVIEW PROPERTIES, INC.,
a Nebraska corporation
By/s/ Theodore M. Seldin
Its Secretary
CAPITOL PROPERTIES, INC.,
an Iowa corporation
By/s/ Theodore M. Seldin
Its Treasurer
SOUTHWEST HOTEL COMPANY,
a Nebraska corporation
By/s/ Theodore M. Seldin
Its President
<PAGE> 17
SCHEDULE "1"
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings ascribed to them:
(a) "Actual Closing Date" shall mean the actual date that Buyer and
Seller consummate the transactions contemplated hereby and fulfill their
respective obligations under Section 11 hereof.
(b) "Additional Deposit" shall mean the amount of Two Hundred Fifty
Thousand and No/100 Dollars ($250,000.00).
(c) "Assumption Agreement" shall have the meaning ascribed to such term
in Section 11(a)(iv) hereof.
(d) "Closing Date" shall mean July 1, 1996, as the same may be extended
by Buyer to August 16, 1996 in accordance with the provisions of Section 4(a)
hereof, or such earlier date as Buyer may elect on no less than ten (10) days'
written notice to Seller.
(e) "Commitment" shall mean a commitment for the issuance of an ALTA
owner's policy of title insurance issued by Title Company in the full amount of
the Purchase Price certified to date and to include proper searches covering
bankruptcies, state and federal judgments and liens, and pending assessments.
(f) "Contract Rights" shall mean (i) any and all permits, approvals,
privileges, licenses, authorizations, leases, contracts and other agreements of
any kind relating in any way to the improvement, development, ownership,
occupancy or use of the Land, Improvements, Personal Property, Spaces Leases,
Name, License Agreement or any portion thereof; and (ii) any and all rights
(including, without limitation, rights to rents, escrowed funds, refunds,
deposits, credits or rebates), actions, causes of action, arbitration claims,
subrogation claims, contract claims, guarantees, warranties, and any other
claims and demands of any kind that Seller has or may have against any person
or entity, whether by contract or otherwise, arising out of or relating in any
way to the construction, improvement, development, ownership, occupancy or use
of the Land, Improvements, Personal Property, Space Leases, Name, License
Agreement or any portion thereof.
<PAGE> 18
(g) "Defaulting Party" shall have the meaning ascribed to such term in
Section 12(c) hereof.
(h) "Deposit" shall mean the amount of Two Hundred Fifty Thousand and
No/100 Dollars ($250,000.00).
(i) "Deposit Agreement" shall mean that certain Deposit Agreement of even
date herewith between Seller, Buyer and Title Company.
(j) "Due Diligence Materials" shall mean the collective reference to
those items described in Section 6 hereof whether delivered or to be delivered
prior or subsequent to the date of this Agreement.
(k) "Due Diligence Period" shall mean the period ending at 11:59 p.m.
(Miami, Florida time) on June 17, 1996.
(l) "Entire Parcel" shall have the meaning ascribed to such term in
Section 16 hereof.
(m) "Environmental Regulation(s)" means any law, rule, regulation, permit
or agreement relating to the environment, human health or safety now existing
or hereafter enacted on or prior to the Actual Closing Date.
(n) "Excluded Land" shall have the meaning ascribed to such term in
Section 16 hereof.
(o) "Governmental Authority" shall mean any federal, state, county,
municipal or other governmental or quasi-governmental department, entity,
authority, commission, board, bureau, court, agency or any instrumentality of
any of the foregoing having or purporting to have jurisdiction over Buyer,
Seller, the Project or any portion thereof, or any of them.
(p) "Hazardous Substances" shall mean any substance, pollutant or
contaminant, as those terms are now or hereafter (on or prior to the Actual
Closing Date) defined in any Environmental Regulation, and specifically
includes, but is not limited to, asbestos, asbestos- containing materials,
petroleum, or petroleum-based products, formaldehyde, and polychlorinated
biphenyls.
<PAGE> 19
(q) "Hotel" shall mean the collective reference to the Land (as described
on Exhibit "1-A", "1-B", "1-C", "1-D" or "1-E" attached hereto) and the related
Improvements, Space Leases, Contract Rights, Personal Property, Name and
License Agreement, together with all related amenities.
(r) "Improvements" shall mean all buildings, structures and improvements
now located or hereafter constructed on the Land and all fixtures and equipment
attached to, forming a part of or necessary for the operation of such
buildings, structures and improvements for their current use and in accordance
with all Legal Requirements.
(s) "Land" shall mean that certain real property which is generally and
legally described on Exhibits "1-A" through "1-E" attached hereto, together
with all easements and rights benefitting or appurtenant to such real property.
(t) "Legal Requirements" shall mean all laws, enactments, statutes,
codes, ordinances, orders, judgments, decrees, writs, injunctions, rules,
agreements, regulations and requirements pertaining to the Project, including
any applicable environmental, zoning or building, use and land use laws,
ordinances, rules or regulations, requirements of the Board of the Fire
Underwriters, the Spaces Leases, the License Agreement and all covenants,
restrictions and conditions of record which may be applicable to it or to any
of the Project, or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration, construction, repair or reconstruction of any of the
Project.
(u) "License Agreement" shall have the meaning ascribed to such term in
Section 8(ee) hereof (Schedule "2" attached hereto).
(v) "Name" shall mean the collective reference to the "Best Western
Central Omaha," "Sheraton Inn Omaha," "Best Western Des Moines West," Best
Western Metro Omaha," and "Holiday Inn Wichita."
(w) "Operating Equipment" shall mean all operating equipment required or
useful for the operation of a hotel, including chinaware, glassware, linens,
silverware, utensils, uniforms, smallwares, vehicles, telephone equipment,
computers, tools and all other similar items, together with all replacements,
substitutions and additions of and to all of the foregoing.
<PAGE> 20
(x) "Operating Supplies" shall mean all food, beverages and other
consumable items required or useful in the operation of a hotel, such as fuel,
soap, cleaning materials, matches, stationery, brochures, folios and all other
similar items, together with all substitutions, replacements and additions of
and to all of the foregoing.
(y) "Permitted Exceptions" shall mean those exceptions to title to the
Project, if any, which are specifically approved in writing by Buyer on or
before the Actual Closing Date.
(z) "Personal Property" shall mean any and all furniture, furnishings,
equipment, materials, signs, vehicles and other personal property, including
Operating Equipment and Operating Supplies, now or hereafter located on or
related to the Land or the Improvements or necessary or required under any
Legal Requirement, as well as any and all test results, reports, and studies
related to the Land or any portion thereof, and any all aerial photographs,
plans, specifications, drawings, plats, maps, surveys and similar depictions
relating to the Land and the Improvements, and any and all files, records,
manuals, data and other information relating to the Land and the Improvements
or necessary or required under any Legal Requirement.
(aa) "Project" shall mean the collective reference to all of the Hotels.
(bb) "Property Records" shall mean and include, but not be limited to,
each of the following for each Hotel which is in Seller's possession or in the
possession of any management company, related party or other party acting on
behalf of Seller, or in any instance where either Seller or such other party
has the right to obtain such items:
(i) All Space Leases, licenses, License Agreement, leases and
occupancy agreements of any kind of all tenants and concessionaires
located in, about or at the Project. The foregoing shall include all
parties that may have any possessory rights or interest in the
Project or any portion thereof subsequent to the Closing Date;
(ii) All operating statements (including income and expense
statements) and financial statements (for the most recent five (5)
year period), existing operating capital expenditure budgets and
other books and records for the Project;
(iii) All building, engineering and architectural plans,
specifications and drawings and as-built plans pertaining to the
Project and any proposed additions or renovations thereto, together
with all surveys, plats, topographical maps, aerial photographs and
oil, gas, soil, water and mineral studies and reports;
(iv) All advance reservations, schedules of deposits and
trade-out agreements for hotel rooms, meetings, conventions, and the
use of facilities for banquets, parties, affairs and the like which
extend to a period beyond the Closing Date;
<PAGE> 21
(v) Copies of prior reports from or to and correspondence with
the licensor (franchisor) for the Project;
(vi) Copies of all assignable guarantees and warranties
issued or made in connection with the construction, improvement,
alteration, maintenance or repair of any Improvements or any
Operating Equipment comprising a portion of or located on the Project
or any portion thereof;
(vii) Copies of all schedules of work currently in progress
and expected completion dates and copies of all schedules regarding
FF&E, value, age and anticipated replacement(s);
(viii) Copies of all certificates of occupancy, licenses,
permits, authorizations, and approvals required by any Legal
Requirement or issued by any Governmental Authority, Seller or the
use of the Project or any portion thereof and copies of all
certificates issued by the local board of fire underwriters or other
body exercising similar functions);
(ix) Copies of all employment agreements and a current list of
all employees as well as their salaries, benefits, and accrued
vacation time, together with copies of all personnel files for all
employees;
(x) Copies of an existing owner's title insurance policy and
existing survey;
(xi) Copies of all contracts and agreements which affect the
ownership, use or operation of the Project, including, but not
limited to Service Contracts, management agreements, and the License
Agreement;
(xii) All existing environmental audits, appraisals,
engineering reports, ADA compliance reports, similar studies,
examinations, analyses, notices and information concerning the
condition of the Project or any portion thereof and any Hazardous
Substances on or about the Project or any portion thereof, including
the most recent franchisor quality inspection report or its
equivalent; and
(xiii) Copies of all existing insurance policies affecting
the Project or any portion thereof.
(cc) "Purchase Price" shall mean the amount of Twenty Four Million Five
Hundred Thousand and No/100 Dollars ($24,500,000.00) in immediately available
funds.
(dd) "Searches" shall mean uniform commercial code searches of the
appropriate public records for Seller and the Project.
(ee) "Service Contracts" shall have the meaning ascribed to such term in
Section 8(jj) hereof (Schedule "2" attached hereto).
(ff) "Space Leases" shall mean any and all leases and agreements with
respect to the occupancy of all or any portion of the Land or the Improvements.
(gg) "State" shall mean the State where the Land is located.
(hh) "Survey" shall mean a current survey of the Land for each Hotel,
prepared at Seller's cost by a registered land surveyor acceptable to Buyer
which satisfies the requirements and contains a certification as set forth on
Exhibit "2" attached hereto.
(ii) "Tax Code" shall mean the Internal Revenue Code of 1986, as amended.
(jj) "Title Company" shall mean Chicago Title Insurance Company or another
duly licensed title insurance underwriter selected by Buyer.
(kk) "Title Documents" shall mean legible copies of all documents
affecting each Hotel and referred to in the Commitment or the Survey and a
current statement from the taxing authority with jurisdiction over each Hotel
of the ad valorem and personal property taxes for each Hotel and whether there
are any unpaid taxes then due.
(ll) "Title Evidence" shall mean the collective reference to the
Commitment, Survey, Title Documents and Searches.
<PAGE> 22
SCHEDULE "2"
REPRESENTATIONS AND WARRANTIES
(a) Seller is either a corporation or general partnership duly organized,
validly existing, and in good standing under the laws of the State of Nebraska,
Iowa or Kansas, as the case may be and as set forth on page 1 of this
Agreement. Seller has all necessary powers to own its own properties and to
carry on its business as now conducted, and has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement
and the Deposit Agreement.
(b) The execution and delivery by Seller of this Agreement and the
Deposit Agreement, and the performance by Seller of its obligations hereunder
and thereunder, have been duly and validly authorized and no other actions or
proceedings on the part of Seller are necessary to authorize such execution,
delivery and performance. This Agreement and the Deposit Agreement have been
duly executed and delivered by Seller, and are the valid and legally binding
obligations of Seller, enforceable against Seller in accordance with the
respective terms hereof and thereof.
(c) The execution and delivery of this Agreement, the Deposit Agreement
and the documents listed in Section 11 hereof do not and will not violate any
Legal Requirement, any provision of any indenture, agreement, or other
instrument to which Seller is a party or by which the Project or any portion
thereof is affected, or be in conflict with, result in a breach of or
constitute a default under any such indenture, agreement or other instrument.
(d) Seller is the sole owner of fee simple marketable title to the Land
and the Improvements and the sole owner of the Personal Property, Contract
Rights, Space Leases, Name and License Agreement. Seller has all requisite
power and authority to execute and deliver this Agreement, the Deposit
Agreement and the documents listed in Section 11 hereof, and the persons who
did or will execute the same for and on behalf of Seller have the power and
authority to do so and to bind Seller.
(e) No written or oral notice has been received by Seller of a violation
of any Legal Requirement which has not been cured. The Project complies with
all Legal Requirements.
(f) Except as expressly set forth on Exhibit "10" attached hereto, there
is no pending or threatened condemnation, eminent domain or any other action,
suit, proceeding or investigation affecting Seller, the Project or any portion
thereof. Those matters set forth on Exhibit "10" attached hereto affect only
Seller and not any of the Project, are fully covered by insurance (other than
with respect to the "French Quarter" claim related to the Best Western Des
Moines West Hotel and the "discrimination" claim related to the Sheraton Inn
Omaha Hotel, each as more fully described on Exhibit "10" attached hereto) and
are being, and will following the Actual Closing Date be, vigorously defended
by Seller.
(g) The Land is presently zoned for its current use. The Improvements
comply with the zoning classification for the Land. Seller knows of no actions
or proceedings pending or contemplated which would adversely affect the zoning
of the Land for its current use.
(h) Seller has conducted no activity on any portion of the Project
involving the generation, treatment, storage or disposal of Hazardous
Substances; no portion of the Project is now being used, or to the best of
Seller's knowledge, has ever been used to treat, store, generate or dispose of
Hazardous Substances; Seller has received no written notice that any previous
owner or tenant of the Project or any portion thereof conducted any such
activity; Seller has received no written notice of any discharge, spill, or
disposal of any Hazardous Substances on or under any portion of the Project;
Seller has received no written notice from any Governmental Authority or any
other party of any Environmental Regulations' violations concerning the Project
or any portion thereof, nor is Seller aware of any such violation; and Seller
has received no written notice as to any locations off the Project where
Hazardous Substances generated by or on the Project have been treated, stored,
deposited or disposed of.
<PAGE> 23
(i) Seller has not commenced and no bankruptcy or insolvency proceeding
has been commenced against Seller.
(j) To Seller's knowledge, there are no soil or subsoil conditions at the
Land which would restrict, impair or prohibit use of the Land or any portion
thereof for its current use.
(k) The Land has direct legal access to, abuts, and is served by a
publicly dedicated and maintained road, which road provides a valid legal means
of pedestrian and vehicular ingress and egress to and from the Land without
additional cost or expense to Buyer.
(l) Water, gas, telephone, electricity, storm and sanitary sewer and
other utilities are currently available to the Improvements, are supplied by
public utilities at normal and customary rates, are adequate to serve the
Project for its current use and in accordance with all Legal Requirements and
are fully paid for at Seller's sole cost and expense.
(m) All licenses, approvals, authorizations and permits necessary to
operate the Project in accordance with its current use and all Legal
Requirements are and will remain in full force and effect.
(n) All Due Diligence Materials are true, accurate, correct and complete
copies thereof and do not omit to state any material fact necessary to make the
statements contained therein not misleading.
(o) To Seller's knowledge, there are no storage tanks or wells located on
the Land.
(p) Seller is not currently contesting the real estate tax assessments
for the Land. The Land is separately assessed for real property tax assessment
purposes and is not combined with any other real property for tax assessment
purposes.
(q) Seller shall not commence, withdraw, settle or otherwise compromise
any tax protest or tax reduction proceeding affecting real estate taxes
assessed against the Land for any fiscal period in which the Closing Date is to
occur or any subsequent fiscal period without providing Buyer with advance
written notice thereof.
(r) No Personal Property is held under any security or title retention
arrangement other than as set forth in Exhibit "3" attached hereto, and with
respect to such matters the same will be satisfied, released and paid off by
Seller prior to the Closing Date. All Personal Property is in the possession
and control of Seller.
(s) Seller shall not remove any Improvements or Personal Property located
on or affixed to the Land on the date of this Agreement.
(t) There are no material, structural or mechanical defects in the
Improvements or Operating Equipment. Seller shall not do anything to adversely
affect the structural integrity of the Improvements and through the Actual
Closing Date Seller shall, at its own cost and expense, maintain all parts or
portions of the Project in good working order and repair and in accordance with
all Legal Requirements.
<PAGE> 24
(u) Prior to the Actual Closing Date, Seller will operate and maintain
the Project in a prudent and business-like manner in the ordinary course of
business and in accordance with its current use and all Legal Requirements.
(v) Except for tenants under the Space Leases and hotel guests, there are
no parties other than Seller in possession of any portion of the Land or
Improvements as lessees, tenants at sufferance or trespassers.
(w) There are no arrearages or prepayments in excess of one month under
the Space Leases and no action or proceeding instituted against Seller by a
tenant of the Project is presently pending or is threatened.
(x) All of the Spaces Leases are the result of bona fide arms length
negotiations between the parties thereto, are in writing and will be delivered
by Seller to Buyer in accordance with Section 6 hereof and there are no oral
agreements modifying, amending, extending, altering or in any way affecting the
Space Leases. Neither Seller nor any tenant is in default under any Space
Lease and no event has occurred that with the giving of notice or passage of
time or both or either would constitute a default thereunder. Each of the
tenants under the Space Leases is in possession of its respective premises. To
Seller's knowledge, no tenant has any offsets, defenses, claims or causes of
actions against Seller. There is no tenant contesting any tax, operating costs
or other escalation payments or occupancy charges or any other amounts payable
under its specific Space Lease. All tenants have furnished insurance
certificates indicating that the insurance coverage required by their
respective Space Leases is in full force and effect. No brokerage or leasing
commissions (including any renewals or residuals) or other compensation are due
or payable to any person, firm, corporation, or other entity with respect to or
on account of any of the Space Leases.
(y) The rent schedule attached hereto as Exhibit "4" has been prepared by
Seller, is a true, correct and complete copy of the current rent rolls and
delinquency reports maintained by Seller for the Project and the information
contained therein is true, accurate, correct and complete in all material
respects.
(z) Prior to the Actual Closing Date, Seller shall not, without Buyer's
prior written consent, which consent shall not be unreasonably withheld, do any
of the following:
(1) amend, renew or extend any Space Lease in any respect;
(2) grant any concessions or abatements under the Space Leases for
any period following the Actual Closing Date;
(3) apply all or any part of the security or damage deposit of any
tenant under the Space Lease to obligations of such tenant
unless such tenant has vacated its portion of the Project as of
the Actual Closing Date;
<PAGE> 25
(4) terminate any Space Lease or tenancy except by reason of a
default by the tenant thereunder; or
(5) grant any new leases, except in the ordinary course of business
for a term not to exceed thirty (30) days, on terms consistent
with those of the Space Leases and the rent schedule.
(aa) Other than Buyer pursuant to this Agreement, no person, firm,
corporation, or other entity has any right or option to acquire the Project or
any portion thereof or lease or occupy any space thereon, except as specified
in Exhibit "4" attached hereto.
(bb) There are no property interests, buildings, structures or other
improvements or personal property that are owned or held by Seller or any of
its affiliates or related parties which are necessary or useful for the
operation of the Project for its current use or in accordance with the Legal
Requirements that are not being conveyed pursuant to this Agreement.
(cc) Seller has no knowledge of any basis for any assertion against Seller
which would interfere with or prevent the transactions contemplated hereby.
(dd) There are no outstanding obligations with respect to the License
Agreement for product improvement plans.
(ee) Attached hereto as Exhibit "8" is a true, complete and accurate
listing of all franchise or license contracts or agreements affecting any of
the Project (collectively, the "License Agreement"). The License Agreement is
and shall remain in full force and effect through the Actual Closing Date and
shall not be amended, modified, supplemented, renewed, replaced or terminated
without the express written consent of Buyer. There is no default by any party
under the License Agreement and no event has occurred which with the giving of
notice, passage of time, or either or both, would constitute a default
thereunder. Buyer shall notify Seller on or before the Actual Closing Date of
any License Agreement Buyer will agree to assume on the Actual Closing Date.
Seller agrees to terminate, effective on the Actual Closing Date, any License
Agreement which Buyer does elect to expressly assume, as aforesaid, provided
that Buyer pays on the Actual Closing Date the cost of such termination, as set
forth in the License Agreement, and provided further that Seller is released
from all liabilities under such License Agreement arising after the Actual
Closing Date.
(ff) All sales and use tax, hotel accommodation tax or the equivalent and
any and all taxes with respect to any employee, required to be paid or
collected by Seller in the operation of the Project has been collected and paid
to the appropriate Governmental Authority. Seller shall be responsible for the
payment of all such taxes due and owing through the date of the Actual Closing
Date and shall be responsible for the payment of any sales tax due on the
Actual Closing Date with respect to the conveyance of the Personal Property.
Further, Seller shall file all necessary returns, petitions and request any
statutory audits under State law so as to release Buyer prior to or after
Actual Closing Date from any transferee liability with respect to any such
taxes.
<PAGE> 26
(gg) There are no employees of Seller or any management company at the
Property or otherwise who, by reason of any Legal Requirement or by reason of
any union or other employment contract, written or otherwise or any other
reason whatsoever, would become employees of Buyer as a result of the purchase
of the Project by Buyer.
(hh) There are no union, labor or collective bargaining agreements
affecting any of the Project.
(ii) No commitments relating to the Project or any portion thereof have
been made to any Governmental Authority, utility company, school board, church
or other religious body or any homeowner, or homeowners association, merchant's
association or any other organization, group or individual which would impose
an obligation upon Buyer or its successors or assigns to make any contribution
or dedication of money or land or to construct, install or maintain any
improvements of a public or private nature on or off the Land; and no
Governmental Authority has imposed any requirement that any owner of the Land
pay directly or indirectly any special fees or contributions or incur any
expenses or obligations in connection with the Land.
(jj) Attached hereto as Exhibit "6" is a true, complete and accurate
listing of all service contracts, vendor agreements, maintenance agreements,
management agreements and any other contracts or agreements affecting any of
the Project, other than the License Agreement, Space Leases and matters
affecting the Personal Property which are described on Exhibit "3" attached
hereto (collectively, the "Service Contracts"). All of the Service Contracts
are in full force and effect, there is no default by any party under any
Service Contract and no event has occurred which with the giving of notice,
passage of time, or either or both, would constitute a default thereunder.
Seller has received no notice that any party to any Service Contract intends to
cancel or terminate its Service Contract. All of the Service Contracts are
cancelable by Seller upon thirty (30) days notice. Buyer shall notify Seller
on or before a date thirty (30) days prior to the Actual Closing Date of any
Service Contracts Buyer will agree to assume on the Actual Closing Date.
Seller agrees to terminate, effective on the Actual Closing Date, any Service
Contract which Buyer does elect to expressly assume, as aforesaid.
(kk) Attached hereto as Exhibit "7" is a true, complete and accurate
listing of all insurance policies with respect to any of the Project. No
notice has been given by any insurer of any of the Project requesting the
performance of any repairs, alterations or other work on or to any of the
Project.
(ll) Seller has not filed any fictitious name filings or registrations
with respect to any names used in connection with any of the Project.
(mm) Seller, on the Closing Date, will have complied with all of its
obligations hereunder, unless such compliance has been waived in writing by
Buyer, and all warranties and representations made hereunder shall be true,
correct, accurate and complete as of the Actual Closing Date.
<PAGE> 1
Exhibit 10.2
SERVICO HOSPITALITY, INC.
Servico Centre-South
1601 Belvedere Road
West Palm Beach, Florida 33406
(Phone) (407) 689-9970
(Fax) (407) 689-0321
June 18, 1996
Seldin Properties
35th Street Corp.
Council Bluffs Downtown Center, Inc.
Wichita Airport Hotel, Inc.
Northview Properties, Inc.
Capitol Properties, Inc.
Southwest Hotel Company
c/o Seldin Company
Montclair Professional Center
13057 West Center Road
Omaha, Nebraska 68144
Attention: Mr. Bill R. Myers
Mr. Ted M. Seldin
Re: Purchase Agreement dated as of May 1, 1996 by and between Servico
Hospitality, Inc., Seldin Properties, 35th Street Corp., Council
Bluffs Downtown Center, Inc., Wichita Airport Hotel, Inc., Northview
Properties, Inc., Capitol Properties, Inc. and Southwest Hotel
Company (the "Purchase Agreement") (capitalized terms utilized in
this correspondence and not separately defined herein shall have the
meanings ascribed to them in the Purchase Agreement)
Gentlemen:
This correspondence shall confirm that the Purchase Agreement is amended
as follows:
1. Recital B and Section (cc) of Schedule "1" of the Purchase Agreement
are hereby amended by deleting "$24.5 million" and "Twenty Four
Million Five Hundred Thousand and No/100 Dollars ($24,500,000.00),"
respectively, and replacing the same with "Twenty Three Million Three
Hundred Thousand and No/100 Dollars ($23,300,000.00)."
<PAGE> 2
2. The second sentence of Section 4(a) of the Purchase Agreement is
hereby amended by deleting "July 1, 1996" and replacing the same with
"June 24, 1996."
3. Buyer hereby expressly waives the conditions precedent to its
performance under the Purchase Agreement which are set forth in
Sections 3(a)(i) and (ii) of the Purchase Agreement, except with
respect to the reference to Section 5 set forth in said Section
3(a)(ii) of the Purchase Agreement.
4. The last sentence of Section (ee) of Schedule "2" to the Purchase
Agreement is hereby amended by adding the word "not" between the
words "does" and "elect."
5. The last sentence of Section (jj) of Schedule "2" to the Purchase
Agreement is hereby amended by adding the word "not" between the
words "does" and "elect."
6. Except as hereby amended, the Purchase Agreement shall remain
unmodified and in full force and effect.
This correspondence shall also confirm the following:
A. As between Buyer and Seller, Section 3(a) of the Deposit Agreement is
deleted in its entirety and except as hereby amended the Deposit Agreement
remains unmodified and in full force and effect.
B. Contemporaneous with the execution and delivery of this
correspondence, Buyer shall deliver to Title Company the Deposit, which Buyer
received from Title Company on June 18, 1996, to be held, maintained and
disbursed by Title Company in accordance with the Deposit Agreement.
C. This correspondence may be executed in counterparts.
<PAGE> 3
To evidence your agreement with all of the foregoing, please execute the
enclosed copy of this correspondence and return the same to the undersigned
immediately.
Very truly yours,
SERVICO HOSPITALITY, INC.
By/s/ David Buddemeyer
Its President
Enclosure
Agreed and Accepted as of June 17, 1996
SELDIN PROPERTIES,
a Nebraska general partnership
By/s/ Theodore M. Seldin
Its General Partner
35TH STREET CORP.,
an Iowa corporation
By/s/ Theodore M. Seldin
Its President
COUNCIL BLUFFS DOWNTOWN CENTER,
INC.,
an Iowa corporation
By/s/ Theodore M. Seldin
Its Vice President
WICHITA AIRPORT HOTEL, INC.,
a Kansas corporation
By/s/ Theodore M. Seldin
Its Secretary
NORTHVIEW PROPERTIES, INC.,
a Nebraska corporation
By/s/ Theodore M.. Seldin
Its Secretary
CAPITOL PROPERTIES, INC.,
an Iowa corporation
By/s/ Theodore M. Seldin
Its Treasurer
SOUTHWEST HOTEL COMPANY,
a Nebraska corporation
By/s/ Theodore M. Seldin
Its President
