ASHFORD HOSPITALITY PRIME,INC. (NYSE:AHP) Files An 8-K Entry into a Material Definitive AgreementITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On February 28, 2017, the option period expired under the Agreement of Purchase and Sale by and among Hotel Yountville, LLC, Hotel Yountville Holdings, LLC, Altamura Family, LLC and George Altamura, Jr., LLC (collectively, the “Sellers”) and Ashford Hospitality Prime Limited Partnership (the “Company”), a subsidiary of Ashford Hospitality Prime, Inc., as amended on January 30, 2017 and February 28, 2017 (as amended, the “Acquisition Agreement”). the Acquisition Agreement, the Company has agreed to acquire the 80-room Hotel Yountville in Yountville, California from the Sellers for an aggregate purchase price of $96.5 million, subject to adjustment as provided in the Acquisition Agreement, which represents a purchase price of $1,200,000 per key (the “Acquisition”). The Acquisition is expected to close in the second quarter of 2017, subject to customary closing conditions and the approval of a development agreement by the town of Yountville.
The Acquisition Agreement contains terms, conditions, covenants, representations and warranties from each of the respective parties that are customary and typical for a transaction of this nature. As required by the Acquisition Agreement, the Company has deposited a total of $4 million into escrow pending the closing or termination of the Acquisition Agreement. Subject to limitations set forth in the Acquisition Agreement, the Sellers have agreed to indemnify the Company against any losses that the Company incurs to the extent such losses arise out of or resulting from any material breach of the Sellers’ representations or warranties made under the Acquisition Agreement and certain ancillary agreements. The Sellers’ liability for such losses to this indemnity is generally subject to a cap of $4 million (the “Indemnification Limit”), except in the case of certain insured third party claims, revenue and expense allocations and employee liability claims as provided in the Acquisition Agreement that are not subject to the Indemnification Limit. Following the closing of the Acquisition Agreement, Remington Lodging and Hospitality LLC will manage the Hotel Yountville.