PURCHASE AND SALE AGREEMENT
Dated as of April 30, 1998
By and Between
Super 8 Motels III, Ltd.
a California Limited Partnership
and
Tiburon Capital Corporation
a California Corporation
TABLE OF CONTENTS
SECTION 1: DEFINITIONS ............................................1
SECTION 2: AGREEMENT TO SELL AND PURCHASE .........................5
SECTION 3: REPRESENTATIONS AND WARRANTIES
BY SELLER ..............................................7
SECTION 4: REPRESENTATIONS AND WARRANTIES
OF PURCHASER .........................................14
SECTION 5: OPERATION OF THE PROPERTIES PRIOR
TO CLOSING ............................................15
SECTION 6: CONDITIONS TO CLOSING .................................16
SECTION 7: CLOSING ...............................................22
SECTION 8: INDEMNIFICATION ......................................32
SECTION 9: WAIVER ................................................32
SECTION 10: BROKERS ...............................................33
SECTION 11: SURVIVAL; FURTHER ASSURANCES ..........................33
SECTION 12: NO THIRD PARTY BENEFITS ...............................34
SECTION 13: REMEDIES ..............................................35
SECTION 14: TERMINATION ...........................................35
SECTION 15: MISCELLANEOUS .........................................36
SECTION 16: NOTICES ...............................................37
SECTION 17: ATTORNEYS' FEES .......................................38
SECTION 18: CONFIDENTIALITY .......................................39
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LIST OF EXHIBITS
Exhibit Description Primary Section Reference
A Identification of Motels 1 (J)
B List of Franchise Agreements 1 (F)
C Allocation of Purchase Price 2 (A)
D List of Service Contracts 3 (J)
E List of Equipment Leases 3 (K)
F List of Tenant Leases 3 (L)
G List of Labor Contracts 3 (M)
H Form of Grant Deeds 7 (C)(1)(a)
I Bills of Sale and Assignment,
Personal Property 7(C)(1)(b)
J Assignment of Franchise Agreements 7(C)(1)(c)
K Assignment of Service Contracts 7(C)(1)(d)
L Assignment of Tenant Leases 7(C)(1)(e)
M Assignment of Equipment Leases 7(C)(1)(f)
N Estoppel Certificates 7(C)(1)(h)
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PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of the 30th day of April, 1998, by and
between SUPER 8 MOTELS III, LTD., a California limited partnership ("Seller"),
and TIBURON CAPITAL CORPORATION, a California corporation ("Purchaser").
W I T N E S S E T H
WHEREAS, Seller owns and operates two Super 8 Motels, as a franchisee
of Super 8 Motels, Inc., in the cities of Bakersfield and San Bernardino,
California, and desires to sell such motels to Purchaser on the terms and
conditions set forth below; and
WHEREAS, the Purchaser desires to purchase such motels from Seller on
the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and the respective
undertakings of the parties hereinafter set forth, it is hereby agreed:
SECTION 1: DEFINITIONS
Wherever used in this Agreement, the words and phrases set forth below
shall have the meanings set forth below unless the context clearly requires
otherwise.
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A. "Bakersfield Motel" refers to the Super 8 Motel located at 000 Xxxx
Xxxx, Xxxxxxxxxxx, Xxxxxxxxxx 00000.
B. "Closing" means the closing at which Seller conveys title to the
Properties to Purchaser and Purchaser pays Seller the Purchase Price described
in Section 2 herein below.
C. "Closing Date" means July 15, 1998, or if later, 30 days after
satisfaction of the conditions set forth in Section 6(11) hereof, subject to
commer cially reasonable extensions, but in no event later than December 31,
1998.
D. "Consumables" shall mean all food and beverages (including alcoholic and
non-alcoholic), engineering, maintenance, and housekeeping supplies, stationery,
printing and other supplies of all kinds (collectively, the "Consumables") used
in connection with the ownership, operation and maintenance of the Properties.
E. "Financial Statements" means all financial statements and information
relating to the Properties which are referred to in Section 3(N) hereof.
F. "Franchise Agreements" refers to the franchise agreements between the
Seller and Super 8 Motels, Inc., as identified on Exhibit B hereto.
G. "Furniture, Fixtures, and Equipment" shall mean all tangible personal
property, excluding the Consumables, located on the Properties, and used in
connection with the ownership, operation and maintenance of the Properties
(collectively, the "FF & E"). The FF & E shall include all fixtures, furniture,
furnishings, fittings, televisions, vehicles, equipment, computer hardware and
nonproprietary software, machinery, apparatus, books and records of Seller
pertaining to the Properties, appliances, china, glassware, linens, silverware,
keys and uniforms
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owned by Seller and used in connection with the ownership, operation, and
maintenance of the Properties.
H. "GMS" refers to Grotewohl Management Services, Inc., a California
corporation and the general partner of the Seller.
I. "Improvements" means all buildings, structures, fixtures and other
improvements now or hereafter located or erected on the Purchased Land.
J. "Motels" refers to the Bakersfield Motel and the San Bernardino Motel,
as identified on Exhibit A hereto.
K. "Personal Property" means all tangible and intangible personal property
now or hereafter owned by the Seller and used in connection with the operation
of the Properties, including, without limitation, (i) all building and
construction materials, equipment, appliances, machinery and other personal
property owned by Seller and used in connection with the operation of the
Properties, (ii) the Consumables, (iii) the FF & E, (iv) Seller's rights under
the Franchise Agreements, (v) all transferable permits, licenses, certificates
and approvals issued in connection with the Properties, (vi) the exclusive right
to use the name of the Properties and the right to all other names, logos and
designs used in connection with the Properties, including the names of
restaurants, bars, banquet rooms and meeting rooms, (vii) the right to use the
Properties' telephone numbers and post office boxes, (viii) all booking
agreements, (ix) all service marks and trademarks, (x) all plans and
specifications, operating manuals, guaranties and warranties and any other items
used in the operation of the Properties, (xi) all documents relating to guests
at the Properties, including booking agreements, (xii) all books, records,
promotional materials, marketing and leasing materials related to the
Properties, and all of Seller's right to receive and utilize water service,
sanitary and storm sewer service, electrical and gas service and other utility
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services presently supplied to the Properties, and (xiii) all documents
relating to employees at the Properties.
L. "Properties" means the Seller's interest in the Purchased Land, the
Motels, the Personal Property, and the Improvements.
M. "Property Agreement(s)" means, collectively, the Franchise Agree ments,
the Purchased Land, the Tenant Leases, the Service Contracts, the Permitted
Exceptions, the Equipment Leases, and any other lease, rental agreement, loan
agreement, loan commitment, mortgage, deed of trust, easement, covenant or
agreement affecting Seller's interest in the Properties or in any Property.
N. "Purchased Land" refers to the two parcels of land purchased by Seller
in Bakersfield and San Bernardino, California, where the Bakersfield Motel and
the San Bernardino Motel, respectively, are located.
O. "San Bernardino Motel" refers to the Super 8 Motel located at 000 Xxxx
Xxxxxxxxxxx Xxxx, Xxx Xxxxxxxxxx, Xxxxxxxxxx 00000.
P. "Seller's Knowledge," including "to the best of Seller's knowledge," or
any similar phrase, shall mean the present actual knowledge of the officers of
GMS, without any duty of inquiry or independent investigation of the relevant
matter by any of such individuals.
Q. "Title Company" means Chicago Title Company, Sacramento, California.
///
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SECTION 2: AGREEMENT TO SELL AND PURCHASE
A. Purchase Price. On the Closing Date Seller shall convey the
Properties to Purchaser or Purchaser's designee on the terms and conditions set
forth herein. On the Closing Date the Purchaser or Purchaser's designee shall
accept title to the Properties from Seller on the terms and conditions set forth
herein and shall pay to the Seller the Purchase Price ("Purchase Price"), in
immediately available funds, of Two Million Nine Hundred Thousand Dollars
($2,900,000) subject to prorations as set forth below. Exhibit C hereto sets
forth the allocation of the Purchase Price among the two Motels.
X. Xxxxxxx Money. Upon the later to occur of the completion of the
inspection period referred to in Section 6(4) hereof or the date Seller notifies
Purchaser that Seller's limited partners have approved this Agreement and all
matters related thereto (Section 6(11) hereof), Purchaser shall deposit $15,000
(the "Xxxxxxx Money") with the Title Company. The Xxxxxxx Money shall be held by
the Title Company in accordance with the terms hereof and invested in a money
market account with all interest earned thereon payable to Purchaser. If this
Agreement is terminated due to Purchaser's default hereunder, the Xxxxxxx Money
shall be paid to Seller as liquidated damages and as Seller's sole and exclusive
remedy. If the Closing occurs hereunder, the Xxxxxxx Money shall be paid to
Seller and credited against the Purchase Price. If the Closing does not occur
hereunder for any reason other than Purchaser's default hereunder, the Xxxxxxx
Money shall be refunded to Purchaser.
///
///
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C. Liquidated Damages. PURCHASER AND SELLER AGREE THAT SELLER'S
ECONOMIC DETRIMENT RESULTING FROM THE REMOVAL OF THE PROPERTIES FROM THE REAL
ESTATE MARKET FOR AN EXTENDED PERIOD OF TIME AND ANY CARRYING AND OTHER COSTS
INCURRED AFTER THE REMOVAL OF THE PROPERTIES FROM THE REAL ESTATE MARKET ARE
IMPRACTICABLE OR EXTREMELY DIFFICULT TO ASCER TAIN. PURCHASER AND SELLER AGREE
THAT, FROM AND AFTER THE DATE PURCHASER DEPOSITS THE XXXXXXX MONEY INTO ESCROW
WITH THE TITLE COMPANY, THE AMOUNT OF THE XXXXXXX MONEY IS A REASONABLE ESTIMATE
OF THE DAMAGES THAT WILL BE INCURRED BY SELLER IN THE EVENT ESCROW FAILS TO
CLOSE ON THE PROPER TIES AS A RESULT OF A BREACH OR DEFAULT OF PURCHASER'S
OBLIGATION TO PURCHASE THE PROPERTIES PURSUANT TO THE TERMS OF THIS AGREEMENT BY
PURCHASER. PURCHASER AGREES THAT IN THE EVENT OF A MATERIAL BREACH OR DEFAULT BY
PURCHASER RESULTING IN A TERMINATION OF THIS AGREEMENT, SELLER SHALL BE ENTITLED
TO RECEIVE THE XXXXXXX MONEY AS LIQUIDATED DAM AGES AND NOT AS A PENALTY. SELLER
HEREBY WAIVES THE REMEDY OF SPECIFIC PERFORMANCE WITH RESPECT TO ANY DEFAULT BY
PURCHASER OF ITS OBLIGATION TO PURCHASE THE PROPERTIES AND AGREES THAT THE
LIQUIDATED DAMAGES SET FORTH HEREIN SHALL BE SELLER'S SOLE REMEDY IN THE EVENT
PURCHASER BREACHES OR DEFAULTS IN ITS OBLIGATION TO PURCHASE THE PROPERTIES
HEREUN DER. BY INITIALING THIS SECTION 2(C) BELOW, PURCHASER AND SELLER AGREE TO
THE TERMS OF THIS SECTION 2(C).
Seller's Initials: ________ Purchaser's Initials: ________
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SECTION 3: REPRESENTATIONS AND WARRANTIES BY SELLER
Seller hereby represents and warrants to, and covenants and agrees
with, Purchaser as of the date hereof and as of the Closing as follows (all of
which representations and warranties shall be deemed automatically remade as of
the Closing):
A. Due Organization. Seller is a limited partnership duly organized and
validly existing under the laws of the State of California. Seller has the full
power and authority, and is duly authorized, to execute, enter into, deliver and
perform this Agreement and its obligations hereunder.
B. Power. This Agreement and all other agreements, instruments and
documents required to be executed or delivered by Seller pursuant hereto have
been or (if and when executed) will be duly executed and delivered by Seller,
and are or will be legal, valid and binding obligations of Seller. No consents
and permissions are required to be obtained by Seller for the execution and
performance of this Agreement and the other documents to be executed by Seller
hereunder; provided, however, that sale of the Properties to Purchaser by Seller
requires (i) the consent of the franchisors and sub-franchisors under the
Franchise Agreements and (ii) the approval of the limited partners of Seller.
The consummation of the transactions contemplated herein and the fulfillment of
the terms hereof will not result in a breach of any of the terms or provisions
of, or constitute a default under, any agreement or document to which the Seller
is a party or by which it is bound, or, to the best of Seller's knowledge, any
order, rule or regulation of any court or of any federal or state regulatory
body or any administrative agency or any other governmental body having
jurisdiction over the Seller or the Properties.
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C. Title. Seller has good and marketable title to the Properties, subject
only to the Tenant Leases, Permitted Exceptions, and those liens and
encumbrances which will be released at Closing. Subject to obtaining the consent
of the limited partners of Seller, Seller has the full right, power, and
authority to convey its interest in and to the Properties to Purchaser.
D. Condition of Properties. To the best of Seller's knowledge, (i) the
Improvements (including, without limitation, all heating, ventilating, air
conditioning, electrical, elevator, plumbing and all other building systems (the
"Building Systems"), roofs, exterior walls, windows and all other structural
elements of the Properties (the "Structural Elements") are structurally sound
and have been constructed in a good and workmanlike manner, are free from
material defects, and there are no subsurface soil conditions adversely
affecting the Properties; (ii) any parking on the Properties is sufficient for
its current uses and satisfies all legal requirements, (iii) all streets and
driveways necessary for access and utilization of the Properties are complete
and available for use, (iv) the Properties include all easements necessary for
their current use and there are no off-site facilities or rights needed for
their operation or use; (v) all utilities servicing the Properties are adequate
for the use and operation of the Properties as currently intended; (vi) the
Properties are not located in any wetlands and no geological faults traverse the
Properties, and (vii) the Properties are free from infestation by pests. Seller
has not received any written notice of unsatisfied requests for repairs,
restorations or improvements from any person, entity or authority (including,
but not limited to, tenants, insurers, lenders or governmental agencies) with
respect to the Properties. Seller has not received any written notice of
complaints from adjoining property owners with respect to the Properties. In the
event any such requests or complaints are received by Seller between the date of
this Agreement and Closing, copies thereof shall be furnished to Purchaser, and
if the cost to correct the matters referred to therein exceeds $25,000 then
Purchaser may terminate this Agreement if Seller elects not to correct such
matters.
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E. Permits and Legal Compliance. To the best of Seller's knowledge, Seller
has all licenses, permits and certificates necessary for the use and operation
of the Properties, including, without limitation, all certificates of occupancy
necessary for the occupancy of the Properties. To the best of Seller's
knowledge, the Properties, including the use thereof, comply with all Property
Agreements and all applicable laws.
F. No Proceedings. There is not now pending or, to the best of Seller's
knowledge, threatened, any action, suit or proceeding before any court or
governmen tal agency or body against (i) the Seller which might result in any
material adverse change in the condition (financial or otherwise), business,
prospects, revenue or income of the Properties, or which might have any material
adverse result to the Properties, or (ii) the Properties. Without limiting the
generality of the foregoing, Seller has not received any written notice of
violations or alleged violations of any laws, rules, regulations or codes,
including building codes, with respect to the Properties which have not been
corrected to the satisfaction of the governmental agency issuing such notices.
G. Eminent Domain. Seller has not received written notice of any pending,
or to the best of Seller's knowledge, threatened condemnation, eminent domain or
similar proceeding relating to the Properties or any portion thereof or any
interest (whether legal, beneficial or otherwise) or estate therein.
H. Zoning; Taxes. Seller has not received any written notice regarding
threatened zoning changes or variances with respect to the Properties; nor has
Seller received written notice that anyone initiated any request or application
for a zoning change or variance with respect to the Properties. Seller has not
received any written notices regarding pending or threatened reassessments or
special tax assessments
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against the Properties, and the Properties are separately assessed for real
estate tax purposes.
I. Franchise Agreements. Exhibit B lists the Franchise Agreements for
each of the Properties pursuant to which Seller operates each of the Properties
as a Super 8 Motel. Exhibit B also includes a list of all amendments and
modifications thereto. To the best of Seller's knowledge, except as may be shown
in said exhibit, all of the Franchise Agreements are in full force and effect
and free from default, Seller is current in the payment of all fees due under
the Franchise Agreements, and there is no existing event which, with the passage
of time or the giving of notice, or both, could become a default under the
Franchise Agreements, and there are no disputes, claims, or rights of set-off
under the Franchise Agreements.
J. Service Contracts. Attached hereto as Exhibit D is a list of all
contracts or agreements to which Seller is a party for the providing of services
or supplies to or management of the Properties, including (without limitation) a
list of all amendments and modifications thereto and assignments thereon (which
contracts and agreements, together with the contracts and agreements entered
into with respect to the Properties after the date hereof with the consent of
Purchaser pursuant to Section 6 below, are herein referred to collectively as
the "Service Contracts"). To the best of Seller's knowledge, except as may be
shown in said exhibit, all of the Service Contracts are in full force and effect
and free from default and there is no existing event which, with the passage of
time or giving of notice, or both, could become a default under the Service
Contracts, and there are no disputes, claims or rights of set-off under the
Service Contracts. Except as may be shown in said exhibit, all management
agreements relating to the Properties are terminable by Seller at or prior to
Closing, without cost or expense to Purchaser.
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K. Equipment Leases. Attached hereto as Exhibit E is a list of all
equipment leases to which Seller is a party for the leasing of equipment for the
Properties, including (without limitation) a list of all amendments and
modifications thereto and assignments thereof (which leases, together with the
equipment leases entered into with respect to the Properties after the date
hereof with the consent of Purchaser pursuant to Section 6 below, are herein
referred to collectively as the "Equipment Leases"). To the best of Seller's
knowledge, except as may be shown in said exhibit, all of the Equipment Leases
are in full force and effect and free from default and there is no existing
event which, with the passage of time or giving of notice, or both, could become
a default under the Equipment Leases, and there are no disputes, claims or
rights of set-off under the Equipment Leases.
L. Tenant Leases. Attached hereto as Exhibit F is a list of all
outstanding leases or agreements pursuant to which any person occupies, or has
the right to occupy, space in the Properties including (without limitation) all
amendments and modifications thereto and assignments and guaranties thereof
(which leases, agreements and other documents, together with the lease documents
entered into with respect to the Properties after the date hereof with the
consent of purchaser pursuant to Section 6 below, are herein referred to
collectively as the "Tenant Leases"). Except as shown on such exhibit, (a) to
the best of Seller's knowledge, there are no defaults under any or the Tenant
Leases and the Tenant Leases are in full force and effect, there are no existing
events which with the passage of time or giving of notice or both could become a
default under the Tenant Leases, and there are no disputes, claims or rights of
set-off under the Tenant Leases, (b) there are no security deposits nor any
rights to refunds of rents previously paid under the Tenant Leases except as
shown on Exhibit F, (c) no person has acquired from Seller any options or rights
to lease space in the Properties or extend any Tenant Leases or rights of first
refusal or offer for space in the Properties except as set forth in the Tenant
Leases, (d) there are no brokerage commissions or fees due now or payable in the
future in connection with
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the Tenant Leases except as set forth in Exhibit F and Seller agrees to pay all
such commissions and fees, (e) all of the landlord's obligations to construct
tenant improvements or reimburse the tenants for tenant improvements under the
Tenant Leases have been paid and performed in full and all concessions (other
than any unexpired rent abatement set forth in the Tenant Leases) from the
landlord under the Tenant Leases have been paid and performed in full, (f) to
the best of Seller's knowledge there are no bankruptcy or insolvency proceedings
pending or threatened with respect to any of the tenants under the Tenant
Leases, and (g) no tenant has notified Seller in writing of any material,
uncured defect or alleged defect in its premises or the common areas of the
Properties. In the event any such notices are received by Seller between the
date of this Agreement and Closing, copies thereof shall be furnished to
Purchaser, and if the cost to correct the matters referred to therein (together
with the cost of correcting all other matters requiring correction by Seller
under this Agreement prior to Closing) exceeds $50,000 and Seller elects not to
correct such matters, then Purchaser may terminate this Agreement (and, in such
event, Purchaser shall be entitled to a return of its Xxxxxxx Money).
M. Labor Contracts. Except as disclosed on Exhibit G hereto, there are no
employment agreements or union contracts with respect to the Motels that will be
binding on Purchaser after Closing, and, other than as disclosed on Exhibit G
hereto, and except as provided by Section 7(E) hereof, Purchaser will be under
no obligation to use or hire such employees for the Properties after Closing.
N. Financial Information. Seller has delivered to Purchaser financial
statements of Seller for the calendar year 1997, prepared by Vocker
Xxxxxxxxxxxxx and Co., San Mateo, California. Such financial statements are
true, complete and correct in all material respects and have been prepared in
accordance with generally accepted accounting principles; such financial
statements fairly present the financial condition of Seller as of the date
thereof, there are no liabilities with respect to the Properties
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which are required to be shown in accordance with generally accepted accounting
principles as of the date thereof and which are not shown on such financial
statements. Seller has delivered to Purchaser operating statements for each of
the Properties for the calendar year 1997, which are true, complete and correct,
and no material adverse change has occurred in the financial condition of the
Properties from the date thereof to the date hereof.
O. Hazardous Materials. To Seller's best knowledge, during the period
of Seller's ownership, no portion of the Properties has ever been used by Seller
as a landfill or as a dump to receive garbage, refuse, waste or fill material
whether or not hazardous. Seller, to the best of Seller's knowledge, during the
period of Seller's ownership, has not stored, handled, installed or disposed of
any Hazardous Substances (as hereinafter defined) in, on or about the Properties
or any other location within the vicinity of the Properties; and, to Seller's
knowledge, there are no Hazardous Substances in, under, or on the Properties. As
used in this Agreement, the terms "Hazardous Substances" means asbestos,
polychlorinated biphenyl and such materials, waste, contaminants or other
substances defined as toxic, dangerous to health or otherwise hazardous by
cumulative reference to the following sources as amended from time to time: (i)
the Resource Conservation and Recovery Act of 1976, 42 USC Section 6901 et seq.
("RCRA"); (ii) the Hazardous Materials Transportation Act, 49 USC Section 1801,
et seq.; (iii) the Comprehensive Environmental Response Compensation and
Liability Act of 1980, 42 USC Section 9601 et seq. ("CERCLA"); (iv) applicable
laws of the State of California; and (v) any federal, state or local statutes,
regulations, ordinances, rules or orders issued or promulgated under or pursuant
to any of those laws or otherwise by any department, agency or other
administrative, regulatory or judicial body. The term "Hazardous Substances"
does not include usual and customary cleaning and other supplies necessary for
the normal operations, maintenance and/or occupancy of the Properties.
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P. ERISA. The Seller is not and is not acting on behalf of an "employee
benefit plan" within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), a "plan" within the meaning
of Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"),
or an entity deemed to hold "plan assets" within the meaning of 29 C.F.R.
Section 2510.3-101 of any such employee benefit plan or plans.
Q. Work Under Licenses. To the best of Seller's knowledge, except as may be
set forth on Exhibit D hereto, Seller is current in the payment of all fees and
expenses incurred by Seller for work conducted by or for Seller under any
license relating to the Property, and there is no existing event which, with the
passage of time or the giving of notice, or both, could become a default under
any contract for the performance of services under any such license, and there
are no disputes, claims, or rights of set-off under any such contract.
SECTION 4: REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to, and covenants and agrees
with, Seller as of the date hereof and as of the Closing as follows (all of
which representa tions shall be deemed automatically remade as of the Closing):
A. Due Organization. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of California.
Purchaser has full power and authority, and is duly authorized, to execute,
enter into, deliver and perform this Agreement and its obligations hereunder.
B. Power. This Agreement and all other agreements, instruments and
documents required to be executed or delivered by Purchaser pursuant hereto have
been or (if and when executed) will be duly executed and delivered by Purchaser,
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and are or will be legal, valid and binding obligations of Purchaser. No
consents and permissions are required to be obtained by Purchaser for the
execution and performance of this Agreement and the other documents to be
executed by Purchaser hereunder. The consummation of the transactions
contemplated herein and the fulfillment of the terms hereof will not result in a
breach of any of the terms or provisions of, or constitute a default under, any
agreement or document to which Purchaser is a party or by which it is bound, or
any order, rule or regulation of any court or of any federal or state regulatory
body or any administrative agency or any other governmental body having
jurisdiction over Purchaser.
C. No Proceedings. There are not now pending or, to the best of
Purchaser's knowledge, threatened, any proceeding, legal, equitable or
otherwise, against Purchaser which would affect its ability to perform its
obligations hereunder. There is not now pending or, to the best of Purchaser's
knowledge, threatened any action, suit or proceeding before any court or
governmental agency or body which might adversely affect Purchaser's ability to
perform its obligations hereunder.
SECTION 5: OPERATION OF THE PROPERTIES PRIOR TO CLOSING
The Seller shall do all of the following, from and after the date
hereof through and including the Closing Date:
(a) operate and maintain the Properties in the same manner as currently
being operated, and shall, subject to damage, destruction or loss to the
Properties in which event Purchaser shall have the rights set forth in Section
6(3), cause the Properties to be, on the Closing Date, in the same condition as
exists as of the date of this Agreement (normal wear and tear excepted);
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(b) maintain the FF & E in the same manner as currently being main-tained,
and not remove any of the FF & E from the Properties unless replaced with FF & E
of at least as good a quality as that removed;
(c) maintain the Consumables in the same manner and quantity as currently
being maintained, and replace any Consumables used at the Properties with new
Consumables which are substantially equal in quality and quantity to those that
have been used at the Properties;
(d) maintain, or cause to be maintained, all existing insurance carried by
Seller on the Improvements;
(e) without the prior written consent of Purchaser, not enter into any new
Property Agreements, or any other agreements affecting the Properties which
would be binding on Purchaser after Closing, nor modify, amend, terminate,
cancel or grant concessions regarding any such existing contracts or agreements
which would be binding on the Purchaser after Closing; and
(f) without the prior written consent of the Purchaser (except in the case
of emergencies), not make, or obligate itself to make, any material alterations
or modifications to the Properties.
SECTION 6: CONDITIONS TO CLOSING
In addition to the conditions provided in other provisions of this
Agreement, the parties' obligations to perform their undertakings provided in
this Agreement, are each conditioned on the fulfillment of each of the following
which is a condition to such party's obligation to perform hereunder (subject to
such party's waiver in strict accordance with Section 9 below).
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(1) Purchaser shall have obtained each of the following at Seller's
expense: (i) an ALTA Survey prepared by a licensed surveyor of each of the
Properties (hereinafter, the "Surveys") certified to Purchaser, Purchaser's
lender, and to the Title Company, (ii) preliminary title reports for each of the
Properties (the "Title Reports") together with legible copies of all exceptions
appearing in such reports issued by the Title Company, and (iii) a UCC search
(the "UCC Search") of all currently effective financing statements naming Seller
as debtor from the California Secretary of State, together with legible copies
of all of such financing statements. Purchaser shall have until June 30, 1998 to
approve the Surveys, the Title Reports, and the results of the UCC Search. If
Purchaser approves the Surveys, the Title Reports, and the results of the UCC
Search, then all matters showing thereon shall be deemed "Permitted Exceptions."
If Purchaser disapproves any matters in the Surveys, the Title Reports, or the
UCC Search, then Seller may either cure such matters, in which case the
remaining matters approved by Purchaser shall be deemed Permitted Exceptions, or
notify Purchaser that it has elected not to cure such matters. Any such notice
by Seller shall be given to Purchaser not later than five (5) days following the
date Purchaser notifies Seller of any objectionable title matters. If Seller
elects not to cure any matter which has been disapproved by Purchaser, then
Purchaser may elect either to accept such matter as a Permitted Exception or
terminate this Agreement (and, in such event, Purchaser shall be entitled to the
return of its Xxxxxxx Money).
(2) As a condition to each party's obligation to perform hereunder, the
due performance by the other of all undertakings and agreements to be performed
by the other hereunder and the truth of each representation and warranty as set
forth herein made pursuant to this Agreement by the other at the Closing Date.
(3) As a condition to Purchaser's obligation to perform hereunder (and
not as a default), that there shall not have occurred between the date hereof
and the Closing Date, inclusive, destruction of or damage or loss to the
Properties (whether
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or not covered by insurance proceeds) from any cause whatsoever, the cost of
which to repair plus any resulting abatement of any rent after Closing under any
Tenant Leases and any resulting business interruption exceeds $100,000 in the
aggregate; provided, however, that in the event of such destruction or damage,
Purchaser may elect to proceed with the Closing in which case Seller shall
assign to Purchaser any claims for proceeds from the insurance policies covering
such destruction or damage (including any rental loss insurance) and shall pay
to Purchaser the amount of any deductibles thereunder. If the cost of repairing
the destruction, damage or loss plus any resulting rent abatement and business
interruption after Closing is less than $100,000 in the aggregate, the parties
shall proceed with the Closing as provided herein, the cost of repair plus the
amount of any rent abatement shall be deducted from the Purchase Price and
Seller shall retain any insurance proceeds.
(4) As a condition of Purchaser's obligation to perform hereunder (and
not as a default), Purchaser shall be satisfied in its sole and absolute
discretion with all aspects of the Properties (including, but not limited to,
the physical and environmental condition of the Properties); provided, however,
if Purchaser does not notify Seller in writing prior to June 30, 1998 that it is
not so satisfied, this condition shall be deemed waived by Purchaser. Purchaser
shall not be required to give its reasons for terminating this Agreement
pursuant to this Paragraph, and Purchaser's notice shall be conclusive evidence
that it is dissatisfied with the Properties. It is understood and agreed, and
Purchaser hereby acknowledges, that the period of time afforded by this section
of the Agreement (the "Inspection Period") should be ample time to review and
inspect the condition of the Properties and that if, for any reason, it is
dissatisfied with the condition of the Properties or with the information
provided or available to Purchaser within the Inspection Period, it has the
unrestricted right to terminate this Agreement and receive a return of its
Xxxxxxx Money. Accordingly, in the event that Purchaser does not terminate this
Agreement and proceeds beyond the expiration of the Inspection Period, it is
understood and agreed that the Properties are being sold
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"as is," "where is" and "with all faults," except as set forth in Section 3.
Purchaser further agrees and confirms that it is not relying on information
other than the financial statements and other information supplied during the
Inspection Period and Seller makes no representation or warranty whatsoever as
to the condition or value of the Properties or otherwise except as set forth in
Section 3.
(5) As a condition of Purchaser's obligation to perform hereunder (and
not as a default), Purchaser shall have until June 30, 1998 to obtain a
commitment (the "Lender's Commitment") from a third-party lender to provide
financing in an amount of not less than 90% of the Purchase Price of the
Properties on terms deemed satisfactory by Purchaser, and such lender shall have
until July 15, 1998 (i) to perform its due diligence (including, without
limitation, reviewing the Surveys, the Title Reports, and the results of the UCC
Search, and to otherwise satisfy itself that all conditions to loan funding are
satisfied), (ii) to prepare and approve loan documentation acceptable to the
lender and Purchaser, and (iii) to satisfy itself that all conditions to loan
funding have been satisfied (conditions (i), (ii) and (iii) referred to as the
"Lender's Conditions"). If Purchaser does not notify Seller in writing on or
prior to July 15, 1998 that it has not obtained the Lender's Commitment, or that
Purchaser's lender has not satisfied the Lender's Conditions, then the
conditions of this subsection (5) shall be deemed waived by Purchaser. If
Purchaser notifies Seller in writing on or prior to July 15, 1998 that it has
not obtained the Lender's Commit ment or that Purchaser's lender has not
satisfied the Lender's Conditions, then this Agreement shall become null and
void and terminated, with neither Purchaser nor Seller having any further
obligation to consummate this Agreement or any liability to the other party for
the failure of this Agreement. On any such termination of this Agreement,
Purchaser shall be entitled to a return of its Xxxxxxx Money.
(6) As a condition to Purchaser's obligation to perform hereunder (and
not as a default), that there shall not have occurred at any time or times on or
before the
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Closing Date any taking or threatened taking of the Properties or any part
thereof or any interest or estate therein by condemnation, eminent domain or
similar proceed ings; provided, however, Purchaser may elect to waive such
condition in which case Seller shall assign to Purchaser at Closing all of
Seller's right, title and interest in and to any proceeds resulting from any
such proceeding.
(7) As a condition to Purchaser's obligation to perform hereunder, that
as of the Closing Date, the Property Agreements shall be in full force and
effect, unmodified and unwaived, and in good standing and free from default, and
there shall be no material changes in the operation of the Properties.
(8) As a condition to Purchaser's obligation to perform hereunder (and
not as a default), Seller shall obtain the consent or approval, at its sole cost
and expense, of all necessary consents to assign all of Seller's right, title,
and interest in and to the Franchise Agreements to Purchaser (or its designee)
provided, however, that Purchaser, not Seller, shall be responsible for paying
any application or related fee imposed by the franchisor under the franchise
agreement chargeable to new franchisees. The consents and approvals required
under this paragraph shall be in a form reasonably satisfactory to Purchaser.
(9) Seller covenants and agrees, and it shall be a condition to
Purchaser's obligation to perform its undertakings hereunder, that from and
after the date hereof, at all reasonable times, Purchaser (and its agents) shall
be permitted access to the Properties and to all books, records and reports
relating to the Properties for the purpose of inspecting same, and Purchaser
(and its agents) shall have the right to photocopy any and all such books,
records and information. All information relating to the Properties made
available to Purchaser and its agents shall be treated as confidential.
Purchaser (and its agents) shall also have the right to meet with GMS and its
officers and employees to discuss any matters relating to the operation of the
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Properties. Any entry by Purchaser and its agents on the Properties shall be
upon reasonable prior notice to Seller, and the Purchaser will indemnify and
hold Seller harmless against any and all injuries, claims, losses, damages and
expenses arising out of its negligence in the performance of any such entry,
inspection or other activities.
(10) As a condition to Purchaser's obligation to perform hereunder (and
not as a default), no written notices of any violation of building codes or
other govern mental regulations have been issued.
(11) As a condition to Seller's obligation to perform hereunder, Seller
shall have obtained the approval by Seller's limited partners (1) to sell the
Properties to Purchaser pursuant to the terms of this Agreement, and (2) to take
all other actions necessary or appropriate to consummate the transaction
contemplated by this Agreement.
(12) As a condition to Seller's obligation to perform hereunder, Seller
shall have received, in a form satisfactory to GMS, on or before June 30, 1998,
a fairness opinion from PKF Consulting, San Francisco, or other qualified
independent real estate advisory or investment banking firm, to the effect that
the sale of the Properties to Purchaser pursuant to the terms and conditions of
this Agreement is fair, from a financial point of view, to Seller. If Seller
notifies Purchaser in writing on or prior to June 30, 1998, that is has not
obtained a fairness opinion satisfactory to GMS, then this Agreement shall
become null and void, with neither Purchaser nor Seller having any further
obligation to consummate this Agreement or any liability to the other party for
the failure of this Agreement. If the Agreement is terminated as aforesaid, then
Purchaser shall be entitled to a return of its Xxxxxxx Money.
///
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SECTION 7: CLOSING
A. Time. The Closing hereunder shall occur on the Closing Date at the
offices of the Title Company.
B. Actions. At the Closing, each party shall satisfy itself that the other
is then in position to deliver the items specified in Section 7(C) below and
that the conditions contained herein have been satisfied. Upon being so
satisfied and concurrently with the delivery of the documents described below,
the following, subject to the terms and conditions hereof, shall occur:
(1) Seller shall convey each of the Properties to Purchaser; and
(2) Purchaser shall pay to Seller the Purchase Price by wire transfer of
immediately available funds, plus or minus prorations as set forth herein.
Purchaser shall receive full possession of the Properties at
Closing, subject only to the Tenant Leases, Permitted Exceptions, Service
Contracts, Franchise Agreements, and Equipment Leases.
The Closing shall be held at the same time as the closings of
the other Purchase and Sale Agreements referred to in Section 14(iii) hereof.
C. Deliveries.
(1) At the Closing, Purchaser shall receive all of the
following, in form and substance reasonably satisfactory to Purchaser (it being
agreed by Purchaser that the documents attached hereto as exhibits are
satisfactory in form to Purchaser):
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(a) grant deeds in the form attached hereto as Exhibit H executed by the
Seller;
(b) bills of sale and assignment for the Personal Property in the form of
Exhibit I, executed by Seller;
(c) an assignment of the Franchise Agreements, in the form of Exhibit J
attached hereto (the "Assignment of Franchise Agree ments"), executed by Seller,
assigning to Purchaser the Franchise Agreements, and the consents of the
franchisors to such assignments in form and content reasonably acceptable to
Purchaser;
(d) an assignment of the Service Contracts, in the form of Exhibit K
attached hereto (the "Assignment of Service Contracts"), executed by Seller,
assigning to Purchaser the Service Contracts;
(e) an assignment of the Tenant Leases, in the form of Exhibit L hereto
(the "Assignment of Tenant Leases"), executed by Seller, assigning the Tenant
Leases to Purchaser;
(f) an assignment of the Equipment Leases, in the form of Exhibit M hereto
(the "Assignment of Equipment Leases"), executed by Seller, assigning to
Purchaser the Equipment Leases;
(g) a certificate from Seller that each of the representations and
warranties contained in Section 3 hereof is true and correct as set forth herein
as of the Closing Date.
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(h) written acknowledgments reasonably acceptable to Purchaser (the
"Estoppel Certificates") from the parties (other than the Seller) obligated on
the Tenant Leases (said estoppels from tenants to be in the form of Exhibit N
hereto), dated as of a date not more than thirty (30) days prior to Closing,
with no material omissions from the form of estoppel certificate set forth in
Exhibit N.
(i) all assignable licenses, permits, approvals, zoning exceptions and
approvals, consents and orders of governmental, municipal or regulatory
authorities in Seller's possession or control which have been obtained in
connection with the ownership, operation and use of the Properties, including,
without limitation, certificates of occupancy for the Properties;
(j) notices to each of the tenants under the Tenant Leases, notifying them
of the sale of the Properties and directing them to pay all future rent as
Purchaser may direct, and notices to the other parties under the Service
Agreements and Equipment Leases notifying them of the sale of the Properties to
Purchaser;
(k) a closing statement setting forth all prorations and credits required
hereunder;
(l) UCC searches showing no financing statements on file with respect to
the Personal Property;
(m) an affidavit from Seller that it is not a "foreign person" or subject
to withholding requirements under the Foreign Investment in
- 24 -
Real Property Tax Act of 1980, as amended, and a comparable affidavit or
form under California law;
(n) any documents reasonably required of Seller by the Title Company;
(o) evidence satisfactory to Purchaser that Seller has the right to assign
to Purchaser the exclusive right to use the names of the Properties;
(p) the original of all Property Agreements to the extent they are in the
possession of Seller or its agents;
(q) all keys and combinations to locks located at the Properties;
(r) all soil reports, engineering studies, maintenance records, consultant
reports, plans and specifications and books and records relating to the
Properties which are in the possession of Seller or its General Partner;
(s) a complete set of all guest registration cards, guest transcripts,
guests' histories and all other guest information;
(t) a complete list of all advance room reservations and functions in
reasonable detail so as to enable Purchaser to honor them; and
- 25 -
(u) evidence that the Seller has terminated all existing management
agreements for the Motels (unless Purchaser has notified Seller, no later than
thirty (30) days prior to the Closing Date, that it has elected to continue such
management agreements in force).
(2) Seller shall have received from Purchaser all of the
following, in form and substance reasonably satisfactory to Seller (it being
agreed by Seller that the documents attached hereto as exhibits are satisfactory
in form to the Seller):
(a) payment of the Purchase Price, plus or minus prorations;
(b) a certificate from Purchaser that each of the representa tions and
warranties contained in Section 4 is true and correct as of the Closing Date;
and
(c) copies of the Assignment of Franchise Agreements, the Assignment of
Service Contracts, the Assignment of Tenant Leases, and the Assignment of
Equipment Leases executed by Purchaser, pursuant to which Purchaser assumes the
obligations of Seller accruing from and after the Closing Date under the
Franchise Agreements, Tenant Leases, Service Contracts, and Equipment Leases.
D. Prorations. The Purchase Price for the Property shall be subject to
prorations and credits as follows to be determined as of 12:01 a.m. on the
Closing Date:
1. Rents Payable Under Tenant Leases. Any portion of any rents collected
subsequent to the Closing Date and properly allocable to periods prior to the
Closing Date, net of Purchaser's third-party costs of collection, if any, shall
be paid,
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promptly after receipt, to the Seller, but subject to all of the provisions of
this Section; and any portion thereof properly allocable to periods subsequent
to the Closing Date, if any, shall be paid to Purchaser. Any amount collected
from a tenant shall first be applied to such tenant's current monthly rental and
then to past due amounts in the reverse order in which they were due. Any
advance rental payments or deposits paid by tenants prior to the Closing Date
and applicable to the periods of time subsequent to the Closing Date and any
security deposits or other amounts paid by tenants, together with any interest
on both thereof to the extent such interest is due to tenants, shall be credited
to Purchaser on the Closing Date. No credit shall be given the Seller for
accrued and unpaid rent or any other non-current sums due from tenants until
said sums are paid.
2. Motel Room, Restaurant and Bar Revenues. Purchaser shall be
entitled to all food service, bar, beverage and liquor revenues and charges and
all revenues and charges from restaurant operations, Motel banquet and
conference facility operations, and all other revenue of any kind attributable
to any of the same for the period on and after 12:01 a.m. on the Closing Date.
Purchaser shall pay over to Seller all collections of accounts receivable in
connection with the Properties which have accrued as of Closing (the "Closing
Accounts Receivable"). By no later than sixty (60) days after Closing, Purchaser
shall pay to Seller an amount equal to the remaining Closing Accounts
Receivable, minus those uncollectible Closing Accounts Receivable as agreed upon
by Purchaser and Seller. Seller shall deliver to Purchaser or provide Purchaser
a credit against the Purchase Price for the Properties in an amount equal to all
guest reservation deposits held by the Motels for Motel guests arriving or
staying after check-out time for the Motel on the Closing Date. All collections
of Motel receivables from any party after Closing shall be applied first to
receivables due from such party which have accrued prior to Closing and second
to receivables due from such party which have accrued after Closing.
- 27 -
3. Cash. Purchaser shall give Seller a credit at Closing for all xxxxx cash
funds at the Properties and all cash in any operating accounts for the
Properties to the extent such xxxxx cash and operating accounts are transferred
to Purchaser at Closing. Purchaser and Seller shall make mutually satisfactory
arrangements for counting such cash and determining the balances in the
operating accounts as of 12:01 a.m. on the Closing Date.
4. Motel Consumables. Seller shall not be entitled to any credit for
Consumables located on the Properties as of the Closing Date.
5. Trade Payables. Trade payables shall mean (for all purposes) under this
Agreement open accounts payable to trade vendors or suppliers of the Properties.
Except for trade payables for Consumables, Seller agrees to give Purchaser a
credit at Closing for all trade payables from the Properties which have accrued
on or prior to 12:01 a.m. on the Closing Date, and Purchaser shall be obligated
to pay (i) such payables to the extent it has received a credit from Seller at
Closing and (ii) trade payables or the Consumables. Purchaser agrees to pay all
trade payables from the Properties which have accrued after 12:01 a.m. on the
Closing Date and shall and hereby does indemnify and hold Seller harmless from
payment of the same. The indemnities contained or provided for in this section
survive Closing.
6. Banquet and Event Deposits. Purchaser shall receive and be entitled to a
credit against the Purchase Price for all prepaid deposits for banquets and
other functions that are scheduled to take place at any of the Properties on or
after the Closing Date.
7. Franchise Agreements, Service Contracts, and Equipment Leases. Subject
to the provisions of Section 6(8) hereof, any amounts prepaid or payable under
any Franchise Agreement, Service Contract, or Equipment Lease shall
- 28 -
be prorated at the Closing as of the Closing Date with Seller obligated for
all sums accrued prior to 12:01 a.m. on the Closing Date and Purchaser obligated
for all sums accrued after 12:01 a.m. on the Closing Date.
8. Sales Tax. Seller hereby agrees to indemnify and hold Purchaser harmless
from the payment of any and all sales, occupancy, use or other taxes due in
connection with the operation of the Properties prior to the Closing Date. The
indemnification set forth herein shall survive the Closing.
9. Taxes. Purchaser shall receive a credit for any accrued but unpaid real
estate taxes imposed in respect of the Properties for the portion of the current
year which has elapsed prior to the Closing Date (and, to the extent unpaid, for
prior years). Seller shall also give Purchaser a credit for any special
assessments which are due and payable in connection with the Properties prior to
Closing.
10. Utilities. Utilities and fuel, including, without limitation, water,
electricity, and gas shall be prorated as of Closing. The Seller shall cause the
meters, if any, for utilities to be read the day on which the Closing Date
occurs and to pay the bills rendered on the basis of such readings. If any such
meter reading for any utility is not available, then adjustment therefor shall
be made on the basis of the most recently issued bills therefor which are based
on meter readings no earlier than thirty (30) days prior to the Closing Date;
and such adjustment shall be prorated when the next utility bills are received.
11. Employee Expenses. Purchaser shall not be responsible for any wages or
benefits payable to employees of the Motels accruing prior to the Closing Date
and Purchaser shall not be required to assume any obligation with respect to any
employee benefits that were incurred prior to the Closing Date; and Seller shall
indemnify Purchaser against any claim in connection therewith. The indemnity
- 29 -
provided herein shall survive the Closing. In addition, Seller shall comply with
all obligations imposed on Seller by applicable federal or California laws
regarding continuation coverage rights, to the extent that it is required to do
so under applicable laws; provided, however, Purchaser acknowledges that Seller
is not giving any notice under the Worker Adjustment and Retraining Act and
agrees to indemnify Purchaser and hold Purchaser harmless from and against any
and all costs and expenses incurred by Purchaser as a result of Seller's failure
to give such notice.
12. Purchaser shall receive a credit for any reduction in the brokerage
commission payable pursuant to Section 10 hereof.
E. Staff. Seller shall terminate or arrange for the termination of all
Motel employees as of the Closing Date and shall pay all wages and fringe
benefits (including, but not limited to, accrued vacation pay and payroll taxes)
through the Closing Date. Purchaser shall not be obligated to employ any such
Motel employee, but may do so on such terms and for such compensation as
Purchaser (and any such employee) deems appropriate.
Prior to Closing, Seller shall deliver to Purchaser copies of
all information and records necessary to support the prorations hereunder. In
the event any prorations made pursuant hereto shall prove incorrect for any
reason whatsoever, either party shall be entitled to an adjustment to correct
the same.
F. Expenses. The Seller shall pay (1) for all documentary transfer taxes,
(2) the premium attributable to the standard coverage portion of the "Owner's
Policies" (defined below), (3) the sales taxes arising in connection with the
sale of the Personal Property, Consumables, and FF & E by Seller to Purchaser,
and (4) one-half
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of escrow fees and costs. Purchaser shall pay (1) all costs associated with its
due diligence investigation, (2) all recording costs, (3) the premium
attributable to the extended coverage portion of the Owner's Policies (and any
endorsements or affirmative coverages), (4) one-half of escrow fees and costs.
Purchaser shall reimburse Seller at Closing for the costs of any appraisal of
the Properties obtained by Seller subsequent to the appraisals of PKF Consulting
of December 4, 1997 and for the costs incurred by Seller in obtaining any
engineering or environmental studies or reports of the Properties in preparation
for their sale. Each party shall pay its own attorneys' fees. Seller and
Purchaser shall execute and deliver such transfer and sales tax returns as may
be required by law.
G. Title. It shall be a condition of Closing that the Title Company issue
to Purchaser, in form and substance acceptable to Purchaser, an owner's policy
of title insurance for each Property (the "Owner's Policies") with Purchaser
named as insured, dated as of the Closing Date, with a liability limit equal to
the Purchase Price allocable to the Property, insuring that fee title to the
Improvements and the Purchased Land are vested in Purchaser, subject only to the
Permitted Exceptions and Tenant Leases.
Except with the prior written approval of Purchaser, Seller
shall not deliver (nor cause or permit to be delivered) to the Title Company, on
behalf of the Seller, any indemnities of the Seller relating to the issuance of
the Owner's Policies. If the Owner's Policies disclose any liens or encumbrances
which are not Permitted Exceptions, Purchaser may remove such liens at Closing
by paying so much of the Purchase Price to the holders of the liens as is
necessary to do so.
H. Guest Property. The parties shall arrange for Motel guests to sign new
deposit box or other appropriate receipts on the day before the Closing Date
with respect to baggage, personal property, laundry, valet packages and other
property of
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Motel guests checked or left in the care of Seller by Motel 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 the parties as of
the Closing Date, and Purchaser shall be responsible from and after the Closing
Date for all such property listed in said inventory. Seller shall be responsible
for all items allegedly left at the Properties by guests prior to Closing and
not listed on such inventory.
SECTION 8: INDEMNIFICATION
Seller shall hold harmless, indemnify and defend the Purchaser from and
against: (i) any and all obligations to, liabilities to or claims by third
parties, whether direct, contingent or consequential and no matter how arising,
in any way related to or arising from the Properties prior to the Closing Date,
including, but not limited to, for any injury to or death of any person or
damage to any property of third parties; (ii) any claims for brokerage,
commissions or fees in connection with leases of the Properties executed prior
to the Closing except to the extent Seller gives Purchaser a credit for such
commissions at Closing; (iii) any wages, salaries, pension liabilities or fringe
benefits accruing prior to the Closing for those employees at the Motels; (iv)
any and all obligations to, and liabilities to or claims by third parties,
whether direct, contingent, or consequential and no matter how arising, in any
way related to or arising from the sale or transfer of the Properties by Seller
to Purchaser, including, but not limited to, by any limited partner of Seller;
and (v) all costs and expenses of Purchaser, including reasonable attorneys'
fees, related to any actual or threatened actions, suits or judgments incident
to any of the foregoing.
SECTION 9: WAIVER
Each party hereto may, at any time or times, at its election, waive any
of the conditions to its obligations hereunder by a written waiver expressly
detailing the
- 32 -
extent of such waiver (and no other waiver or alleged waiver by such party shall
be effective for any purpose). No such waiver shall reduce the rights or
remedies of such party by reason of any breach by the other party of any of its
or their obligations hereunder.
SECTION 10: BROKERS
Seller has retained Everest Financial, Inc. as its broker in connection
with this transaction and shall be responsible for the payment of a brokerage
commission equal to 2.75% of the Purchase Price of the Properties (before
prorations) to Everest in connection with the sale of the Properties to
Purchaser. Everest has agreed to reallow 1.25% of the Purchase Price of the
Properties (before proration) to Purchaser's broker or, at Purchaser's option,
Purchaser shall be entitled to a credit, pursuant to the provisions of Section
7(D)(12) hereof, equal to 1.25 % of the Purchase Price of the Properties (before
prorations). Other than as aforesaid, each party represents to the other that it
has not retained any broker or finder in connection with the transaction
contemplated by this Agreement, and agrees to indemnify and hold the other party
harmless from and against any claim of any broker or finder claiming a brokerage
commission or finder's fee by or through the party.
SECTION 11: SURVIVAL; FURTHER ASSURANCES
All warranties, representations, covenants, obligations and agreements
contained in or made pursuant to this Agreement shall survive the Closing
hereunder and the transfers and conveyances and other transactions hereunder for
twelve (12) months from the Closing Date. All warranties, representations,
covenants, obligations, and agreements contained in or made pursuant to this
Agreement shall terminate and be of no further force or effect on the first
anniversary of the Closing Date, unless an action is brought with respect to
such applicable warranty, representation,
- 33 -
covenant, obligation, or agreement within such 12-month period. Purchaser
understands that, promptly after the Closing, Seller will make a distribution of
the net proceeds realized by Seller with respect to the sale of the Properties
to Purchaser to Seller's partners, and that Seller's limited partners shall have
no liability or responsibility to return distributions made to them. Purchaser
further understands and agrees that the liability of GMS, as General Partner of
Seller, for any obligation of Seller pursuant to Section 8 hereof, shall be
limited as set forth in this Section 11 and shall be further limited in an
amount equal to GMS' share of any distribution made by Seller to its partners of
the proceeds from sale of the Properties to Purchaser hereunder.
Each party agrees to use such party's best efforts to cause the
conditions to consummation of this Agreement to be satisfied and implemented as
soon as practicable. Each party will, whenever and as often as it shall be
requested so to do by the other, cause to be executed, acknowledged or delivered
any and all such further instruments and documents as may be necessary or
proper, in the reasonable opinion of the requesting party, in order to carry out
the intent and purpose of this Agreement and as is consistent with this
Agreement.
SECTION 12: NO THIRD PARTY BENEFITS
This Agreement is made for the sole benefit of Purchaser and Seller
(and Seller's partners) and their respective successors and assigns (subject to
the limitation on assignment set forth in Section 15 below), and no other person
or persons shall have any right or remedy or other legal interest of any kind
under or by reason of this Agreement. Whether or not either party hereto elects
to employ any or all the rights, powers, or remedies available to it hereunder,
such party shall have no obligation or liability of any kind to any third party
by reason of this Agreement or by reason of
- 34 -
any of such party's actions or omissions pursuant hereto or otherwise in
connection with this Agreement or the transactions contemplated hereby.
SECTION 13: REMEDIES
If Seller shall default hereunder prior to Closing, Purchaser shall be
entitled, as its sole and exclusive remedies, to (i) xxx for specific
performance of this Agreement, or (ii) terminate this Agreement, receive a
refund of the Xxxxxxx Money and recover damages in an amount not to exceed
$50,000; provided, however, in exercising its right of specific performance,
Purchaser may not require Seller to spend in excess of $50,000 to correct any
matter which Seller did not deliberately cause. After Closing, Purchaser shall
be entitled to any other rights and remedies it may have at law or equity,
subject to the restrictions thereon set forth in this Agreement. If Purchaser
shall default hereunder, Seller's sole and exclusive remedy shall be to retain
the Xxxxxxx Money as liquidated damages.
SECTION 14: TERMINATION
This Agreement may be terminated --
(i) By mutual written consent of Seller and Purchaser;
(ii) By either Seller or Purchaser by written notice to the other
party if the transaction contemplated hereby has not been consummated on or
before the Closing Date as defined in Section 1(B) hereof; provided, however,
that the right to terminate this Agreement under this Section 14 shall not be
available to any party whose failure to fulfill any of its obligations under
this Agreement has been the cause of or has resulted in the failure of the
transaction contemplated hereby being consummated on or before the Closing Date;
or
- 35 -
(iii) By Purchaser or by Seller if one or more of the Purchase and Sale
Agreements entered concurrently herewith by Purchaser for the purchase of the
motel properties from Super 8 Motels, Ltd., Super 8 Motels II, Ltd., Super 8
Economy Lodging IV, Ltd., and Famous Host Lodging V, L.P. is terminated for any
reason other than Purchaser's or Seller's (as the case may be) breach thereof.
If this Agreement is terminated pursuant to the provisions of
this Section 14, then and in such event this Agreement shall be null and void,
neither party shall have any obligation or liability to the other, and Purchaser
shall be entitled to the return of its Xxxxxxx Money.
SECTION 15: MISCELLANEOUS
This Agreement (including all Exhibits hereto) contains the entire
agreement between the parties respecting the matters herein set forth and
supersedes all prior agreements between the parties hereto respecting such
matters. The table of contents and section headings shall not be used in
construing this Agreement. Except as otherwise provided in Section 13 above, no
remedy conferred upon a party in this Agreement is intended to be exclusive of
any other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute. Except as herein
expressly provided, no waiver by a party of any breach of this Agreement or of
any warranty or representation hereunder by the other party shall be deemed to
be a waiver of any other breach by such other party (whether preceding or
succeeding and whether or not of the same or similar nature) and no acceptance
of payment or performance by a party after any breach by the other party shall
be deemed to be a waiver of any breach of this Agreement or of any
representation or warranty hereunder by such other party whether or not the
first party knows of such breach at the time it accepts such payment or
performance. No failure or delay by a
- 36 -
party to exercise any right it may have by reason of the default of the other
party shall operate as a waiver of default or modification of this Agreement or
shall prevent the exercise of any right by the first party while the other party
continues to be so in default. This Agreement shall be construed and enforced in
accordance with the laws of the State of California. Purchaser may assign its
rights under this Agreement to an affiliate of Purchaser without the prior
written consent of Seller (in which event the transferee shall assume in writing
all of the transferor's obligations hereunder). Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns. The provisions
of this Agreement may not be amended, changed or modified orally, but only by an
agreement in writing signed by the party against whom any amend ment, change or
modification is sought.
SECTION 16: NOTICES
All notices and other communications which either party is required or
desires to send to the other shall be in writing and shall be sent by (i)
messenger, (ii) a nationally recognized overnight delivery service or (iii)
registered or certified mail, postage prepaid, return receipt requested. Notices
and other communications shall be deemed to have been given on the earlier of
actual receipt or the third business day after the date so mailed. Notices shall
be addressed as follows:
(a) To Seller:
c/o Grotewohl Management Services, Inc.
0000 "X" Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
///
- 37 -
with a copy to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxxx & Xxxxxx, P.C.
00 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
(b) To Purchaser:
Tiburon Capital Corporation
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
Fax: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxx, Esq.
Berliner Xxxxx
Ten Xxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
or to such other person and/or address as shall be specified by either party in
a notice given to the other pursuant to the provisions of this Section.
SECTION 17: ATTORNEYS' FEES
In the event either party institutes legal proceedings to enforce its
rights hereunder, the prevailing party in such litigation shall be paid all
reasonable expenses of the litigation by the losing party, including its
attorneys' fees.
///
///
- 38 -
SECTION 18: CONFIDENTIALITY
Seller and Purchaser agree to keep this Agreement confidential and not
disclose or make any public announcements with respect to the subject matter
hereof without the consent of the other party except for any disclosures
required by federal or state securities laws or as required by legal process or
other law. Notwithstanding the foregoing, each party may disclose the provisions
of this Agreement to such parties' advisors as long as such advisors agree to
maintain in confidence the provisions of this Agreement pursuant to this Section
18.
///
///
///
///
///
///
///
///
///
///
- 39 -
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
SUPER 8 MOTELS III, LTD.
By Grotewohl Management Services, Inc.
Its General Partner
By ___________________________________
Xxxxxx X. Xxxxxxxxx
Chairman
And___________________________________
Xxxxx X. Xxxxxxxxx
President
TIBURON CAPITAL CORPORATION
By _________________________________
Xxxx X. Xxxxx
President
And __________________________________
Xxxxxxx X. Xxxxx, Xx.
Vice President
- 40 -
IDENTIFICATION OF MOTELS
Bakersfield Motel Property 000 Xxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxxx 00000
San Bernardino Motel Property 000 Xxxx Xxxxxxxxxxx Xxxx, Xxx Xxxxxxxxxx,
Xxxxxxxxxx 00000
A-1
LIST OF FRANCHISE AGREEMENTS
Date of
Franchisor Description Agreement
Super 8 Motels, Inc. Territorial Agreement relating 9/14/78
to the expansion of the Super 8
Motels, Inc. system in the State
of California
Super 8 Motels, Inc. License agreement relating to 11/18/82
the Bakersfield Motel property
Super 8 Motels, Inc. License agreement relating to 4/26/82
the San Bernardino Motel property
B-1
ALLOCATION OF PURCHASE PRICE
Bakersfield Motel Property $ 1,300,000
San Bernardino Motel Property 1,600,000
---------
TOTAL $ 2,900,000
===========
C-1
LIST OF SERVICE CONTRACTS
Both properties are subject to the following service contract:
Management Agreement by and between Super 8 Motels III, Ltd., and Super 8
Management, Inc., as amended.
Bakersfield Motel Property
Vendor Description Expiration Date
Tri-County Elevator Elevator Service 90 days notice
Time Warner Cable Cable Service 30 days notice
Control Fire Protection Alarm System Service 30 days notice
Xxxxxxxxx Aire Mechanical Service 30 days notice
Prinova Laundry and Cleaning Service 8/1/98
San Bernardino Motel Property
Vendor Description Expiration Date
Hue & Cry Security System Alarm System Service 9/10/99
Hi Desert Alarm Fire Sprinkler Service 12/5/00
Security Maintenance Service Alarm System Service 30 days notice
Xxxxxx'x Plumbing Mechanical Service 30 days notice
Xxxxxxxx Service Landscape Service 30 days notice
Prinova Laundry and Cleaning Service 8/1/98
D-1
LIST OF EQUIPMENT LEASES
None
E-1
LIST OF TENANT LEASES
Bakersfield Motel Property
There are no formal tenant leases with respect to the Bakersfield Motel
property. However, from October 1, 1982 to January 31, 1993, an agreement was in
effect granting Super 8 Motels, III, Ltd. the first opportunity to provide rooms
to employees of Santa Fe Railroad at a room rate of $20.00. Though expired
according to its terms, the contract continues to be observed by both parties,
except that the agreed rate is now $23.00 per room night.
In addition, on December 31, 1992, Super 8 Motels III, Ltd. entered
into a written agreement with the National Railroad Passenger Corporation
(Amtrak) for the provision of lodging services to its employees at a room rate
of $25.75, which included a transpor tation credit of $1.75 per room night
payable to Super 8 Motels III, Ltd. for providing transportation from the train
terminal. Due to competitive bids, the rate was lowered to $24.00 per room night
effective October 1, 1994.
San Bernardino Motel Property
None
F-1
LIST OF LABOR CONTRACTS
None
G-1
FORM OF GRANT DEEDS
Subject to completion
H-1
XXXX OF SALE AND ASSIGNMENT
PERSONAL PROPERTY
For valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, SUPER 8 MOTELS III, LTD., a California limited partnership
("Seller") hereby assigns and transfers to TIBURON CAPITAL CORPORATION, a
California corporation ("Purchaser"), all of Seller's right, title and interest
in and to any and all fixtures, machinery, apparatus, equipment and other
personal property (the "Personal Property") used in the ownership, operation,
repair and maintenance of any and all of the Seller's interest in the Land
Leases, the Personal Property, and the Improvements (the "Properties"),
including without limitation, (i) all building and construction materials,
equipment, appliances, machinery and other personal property owned by Seller and
used in connection with the operation of the Properties, (ii) the Consumables,
(iii) the FF & E, (iv) Seller's rights under the Franchise Agreements, (v) all
transferable permits, licenses, certificates and approvals issued in connection
with the Properties, (vi) the exclusive right to use the name of the Properties
and the right to all other names, logos and designs used in connection with the
Properties, including the names of restaurants, bars, banquet rooms and meeting
rooms, (vii) the right to use the Properties's telephone numbers and post office
boxes, (viii) all booking agreements, (ix) all service marks and trademarks, (x)
all plans and specifications, operating manuals, guaranties and warranties and
any other items used in the operation of the Properties, (xi) all documents
relating to guests at the Properties, including booking agreements, and (xii)
all documents relating to employees at the Properties. All terms used herein but
not defined herein shall have the same meaning as set forth in that certain
Purchase and Sale Agreement, dated as of April 30, 1998, between Seller and
Purchaser for the Properties.
I-1
TO HAVE AND TO HOLD the Personal Property, subject as aforesaid, unto
Purchaser, its successors and assigns. Seller, for itself, its successors and
assigns, does hereby warrant and will forever defend title to the Personal
Property unto Purchaser, its successors and assigns, against the lawful claims
of all persons, claiming by, through or under Seller, but not otherwise.
IN WITNESS WHEREOF, Seller has caused this instrument to be executed as
of the ____ day of ____________, 1998.
SELLER:
SUPER 8 MOTELS III, LTD.,
By Grotewohl Management Services, Inc.
Its General Partner
By ______________________________
Xxxxxx X. Xxxxxxxxx
Chairman
And ______________________________
Xxxxx X. Xxxxxxxxx
President
I-2
ASSIGNMENT OF FRANCHISE AGREEMENTS
THIS ASSIGNMENT dated ______________, 1998 (the "Assignment"), is
entered into by and between SUPER 8 MOTELS III, LTD., a California limited
partner ship ("Assignor"), and TIBURON CAPITAL CORPORATION, a California
corporation ("Assignee").
WITNESSETH:
WHEREAS, Assignor is party to those certain franchise agreements
executed with respect to those certain real properties known as the Bakersfield
Motel property and San Bernardino Motel property, which franchise agreements are
described in Exhibit A attached hereto (the "Agreements"); and
WHEREAS, Assignor desires to assign its interest in the Agreements to
Assignee, and Assignee desires to accept the assignment thereof and assume the
obligations of Assignor thereunder;
NOW, THEREFORE, in consideration of the promises and conditions
contained herein, the parties hereby agree as follows:
1. Effective as of the date hereof, Assignor hereby assigns to Assignee all
of its right, title and interest in and to the Agreements.
2. Assignee hereby assumes all of the Assignor's obligations under the
Agreements accruing after the date hereof.
3. This Assignment shall be binding on and inure to the benefit of the
parties hereto, their heirs, executors, administrators, successors in interest
and assigns.
J-1
4. Assignor hereby agrees to indemnify Assignee against and hold
Assignee harmless from any and all cost, liability, loss, damage or expense,
including without limitation, reasonable attorneys' fees, accruing prior to the
date hereof and arising under the Agreements. Assignee hereby agrees to
indemnify Assignor against and hold Assignor harmless from any and all cost,
liability, loss, damage or expense, including without limitation, reasonable
attorneys' fees, accruing on or subsequent to the date hereof and arising under
the Agreements.
IN WITNESS WHEREOF, the Assignor and Assignee have executed this
assignment the day and year first above written.
ASSIGNOR:
SUPER 8 MOTELS III, LTD.,
By Grotewohl Management Services, Inc.
Its General Partner
By ______________________________
Xxxxxx X. Xxxxxxxxx
Chairman
And______________________________
Xxxxx X. Xxxxxxxxx
President
ASSIGNEE:
TIBURON CAPITAL CORPORATION
By ______________________________
Xxxxxxx X. Xxxxx, Xx.
Vice President
J-2
EXHIBIT A
Schedule of Franchise Agreements
Date of
Franchisor Description Agreement
Super 8 Motels, Inc. Territorial Agreement relating 9/14/78
to the expansion of the Super 8
Motels, Inc. system in the State
of California
Super 8 Motels, Inc. License agreement relating to 11/18/82
the Bakersfield Motel property
Super 8 Motels, Inc. License agreement relating to 4/26/82
the San Bernardino Motel property
J-3
ASSIGNMENT OF SERVICE CONTRACTS
THIS ASSIGNMENT dated ______________, 1998 (the "Assignment"), is
entered into by and between SUPER 8 MOTELS III, LTD., a California limited
partnership ("Assignor"), and TIBURON CAPITAL CORPORATION, a California
corporation ("Assignee").
WITNESSETH:
WHEREAS, Assignor is party to those certain contracts executed with
respect to those certain real properties known as the Bakersfield Motel property
and San Bernardino Motel property, which contracts are described in Exhibit A
attached hereto (the "Contracts"); and
WHEREAS, Assignor desires to assign its interest in the Contracts to
Assignee, and Assignee desires to accept the assignment thereof and assume the
obligations of Assignor thereunder;
NOW, THEREFORE, in consideration of the promises and conditions
contained herein, the parties hereby agree as follows:
1. Effective as of the date hereof, Assignor hereby assigns to Assignee all
of its right, title and interest in and to the Contracts.
2. Assignee hereby assumes all of the Assignor's obligations under the
Contracts accruing after the date hereof.
3. This Assignment shall be binding on and inure to the benefit of the
parties hereto, their heirs, executors, administrators, successors in interest
and assigns.
K-1
4. Assignor hereby agrees to indemnify Assignee against and hold
Assignee harmless from any and all cost, liability, loss, damage or expense,
including without limitation, reasonable attorneys' fees, accruing prior to the
date hereof and arising under the Contracts. Assignee hereby agrees to indemnify
Assignor against and hold Assignor harmless from any and all cost, liability,
loss, damage or expense, including without limitation, reasonable attorneys'
fees, accruing on or subsequent to the date hereof and arising under the
Contracts.
IN WITNESS WHEREOF, the Assignor and Assignee have executed this
Assignment the day and year first above written.
ASSIGNOR:
SUPER 8 MOTELS III, LTD.,
By Grotewohl Management Services, Inc.
Its General Partner
By ______________________________
Xxxxxx X. Xxxxxxxxx
Chairman
And______________________________
Xxxxx X. Xxxxxxxxx
President
ASSIGNEE:
TIBURON CAPITAL CORPORATION
By ______________________________
Xxxxxxx X. Xxxxx, Xx.
Vice President
K-2
EXHIBIT A
Schedule of Service Contracts
Both properties are subject to the following service contract:
Management Agreement by and between Super 8 Motels III, Ltd., and Super 8
Management, Inc., as amended.
Bakersfield Motel Property
Vendor Description Expiration Date
Tri-County Elevator Elevator Service 90 days notice
Time Warner Cable Cable Service 30 days notice
Control Fire Protection Alarm System Service 30 days notice
Xxxxxxxxx Aire Mechanical Service 30 days notice
Prinova Laundry and Cleaning Service 8/1/98
San Bernardino Motel Property
Vendor Description Expiration Date
Hue & Cry Security System Alarm System Service 9/10/99
Hi Desert Alarm Fire Sprinkler Service 12/5/00
Security Maintenance Service Alarm System Service 30 days notice
Xxxxxx'x Plumbing Mechanical Service 30 days notice
Xxxxxxxx Service Landscape Service 30 days notice
Prinova Laundry and Cleaning Service 8/1/98
K-3
ASSIGNMENT OF TENANT LEASES
THIS ASSIGNMENT dated ______________, 1998 (the "Assignment"), is
entered into by and between SUPER 8 MOTELS III, LTD., a California limited
partnership ("Assignor"), and TIBURON CAPITAL CORPORATION, a California
corporation ("Assignee").
WITNESSETH:
WHEREAS, Assignor is a lessor under certain leases executed with
respect to that certain real property known as the Bakersfield Motel property
located at 000 Xxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxxx 00000, which leases are
described in Exhibit A attached hereto (the "Leases"); and
WHEREAS, Assignor desires to assign its interest as lessor in the
Leases to Assignee, and Assignee desires to accept the assignment thereof and
assume the obligations of Assignor thereunder;
NOW, THEREFORE, in consideration of the promises and conditions
contained herein, the parties hereby agree as follows:
1. Effective as of the date hereof, Assignor hereby assigns to Assignee all
of its right, title and interest in and to the Leases.
2. Assignee hereby assumes all of the lessor's obligations under the Leases
accruing after the date hereof.
3. This Assignment shall be binding on and inure to the benefit of the
parties hereto, their heirs, executors, administrators, successors in interest
and assigns.
L-1
4. Assignor hereby agrees to indemnify Assignee against and hold
Assignee harmless from any and all cost, liability, loss, damage or expense,
including without limitation, reasonable attorneys' fees, accruing prior to the
date hereof and arising under the Leases. Assignee hereby agrees to indemnify
Assignor against and hold Assignor harmless from any and all cost, liability,
loss, damage or expense, including without limitation, reasonable attorneys'
fees, accruing on or subsequent to the date hereof and arising under the Leases.
IN WITNESS WHEREOF, the Assignor and Assignee have executed this
Assignment the day and year first above written.
ASSIGNOR:
SUPER 8 MOTELS III, LTD.,
By Grotewohl Management Services, Inc.
Its General Partner
By ______________________________
Xxxxxx X. Xxxxxxxxx
Chairman
And______________________________
Xxxxx X. Xxxxxxxxx
President
ASSIGNEE:
TIBURON CAPITAL CORPORATION
By ______________________________
Xxxxxxx X. Xxxxx, Xx.
Vice President
L-2
EXHIBIT A
Schedule of Tenant Leases
Written Agreement by and between Super 8 Motels III, Ltd. and National
Railroad Passenger Corporation (Amtrak), dated as of December 31, 1992, as
amended
L-3
ASSIGNMENT OF EQUIPMENT LEASES
THIS ASSIGNMENT dated ______________, 1998 (the "Assignment"), is
entered into by and between SUPER 8 MOTELS III, LTD., a California limited
partnership ("Assignor"), and TIBURON CAPITAL CORPORATION, a California
corporation ("Assignee").
WITNESSETH:
WHEREAS, Assignor is the lessee under certain equipment leases executed
with respect to those certain real properties known as the Bakersfield Motel
property and San Bernardino Motel property, which leases are described in
Exhibit A attached hereto (the "Leases"); and
WHEREAS, Assignor desires to assign its interest as lessee in the
Leases to Assignee, and Assignee desires to accept the assignment thereof and
assume the obligations of Assignor thereunder;
NOW, THEREFORE, in consideration of the promises and conditions
contained herein, the parties hereby agree as follows:
1. Effective as of the date hereof, Assignor hereby assigns to Assignee all
of its right, title and interest in and to the Leases.
2. Assignee hereby assumes all of the lessee's obligations under the Leases
accruing after the date hereof.
3. This Assignment shall be binding on and inure to the benefit of the
parties hereto, their heirs, executors, administrators, successors in interest
and assigns.
M-1
4. Assignor hereby agrees to indemnify Assignee against and hold
Assignee harmless from any and all cost, liability, loss, damage or expense,
including without limitation, reasonable attorneys' fees, accruing prior to the
date hereof and arising under the Leases. Assignee hereby agrees to indemnify
Assignor against and hold Assignor harmless from any and all cost, liability,
loss, damage or expense, including without limitation, reasonable attorneys'
fees, accruing on or subsequent to the date hereof and arising under the Leases.
IN WITNESS WHEREOF, the Assignor and Assignee have executed this
Assignment the day and year first above written.
ASSIGNOR:
SUPER 8 MOTELS III, LTD.,
By Grotewohl Management Services, Inc.
Its General Partner
By ______________________________
Xxxxxx X. Xxxxxxxxx
Chairman
And______________________________
Xxxxx X. Xxxxxxxxx
President
ASSIGNEE:
TIBURON CAPITAL CORPORATION
By ______________________________
Xxxxxxx X. Xxxxx, Xx.
Vice President
M-2
EXHIBIT A
Schedule of Equipment Leases
None
M-3
ESTOPPEL CERTIFICATE
To: TIBURON CAPITAL CORPORATION
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Re: Bakersfield Motel property located at 000 Xxxx Xxxx, Xxxxxxxxxxx,
Xxxxxxxxxx 00000 (the "Property")
--------------------------------------------------------------------------
The undersigned tenant (the "Tenant") hereby certifies to you (the
"Purchaser") as follows:
1) Tenant is a tenant under a lease, dated ______________, 19____
(the "Lease"); the Lease has not been cancelled, modified,
assigned, extended or amended; and there are no other
agreements, written or oral, affecting or relating to Tenant's
sublease of the premises described in the Lease (the
"Premises").
2) All rent under the Lease has been paid through ______________,
19____. There is no prepaid rent, except $______, and the
amount of security deposit is $______. Rent is currently
payable in the amount of $______ per month.
3) The Lease terminates on ______________, 19____, and Tenant has
the following renewal option(s): _____________________.
4) All work to be performed for Tenant under the Lease has been
performed as required and has been accepted by Tenant, and all
allowances to be paid to Tenant have been paid.
5) The Lease is: (a) in full force and effect; (b) free from
default and free from any event which with the giving of
notice or passage of time or both could become
N-1
a default under the Lease; and (c) Tenant has no claims against
the sublandlord or offsets against rent, and there are no
disputes with the sublandlord.
6) The Tenant has received no notice of prior sale, transfer or
assignment, hypothecation or pledge of the Lease or of the
rents payable thereunder, except ___________________________.
7) The Tenant has not assigned the sublease or sublet any part of
the Premises.
8) The Tenant has no right to remove any property from the
Premises except for its personal property and trade fixtures.
9) The Tenant has not placed any hazardous or dangerous materials
on the Premises, and the Tenant's use of the Premises complies
with all applicable environmental laws.
The undersigned has executed this Estoppel Certificate with the
knowledge and understanding that the Purchaser is acquiring the Property in
reliance on this Estoppel Certificate and that the undersigned will be bound by
this Estoppel Certificate. The statements contained herein may be relied upon by
Purchaser and its successors and assigns.
Dated this ____ day of __________, 19____.
-------------------------------------
By _________________________________
Title: ___________________________
N-2
