THIRD AMENDMENT TO MOTEL PURCHASE AGREEMENT
THIS THIRD AMENDMENT is made effective as of this November 7, 2005, by
and between SUPERTEL LIMITED PARTNERSHIP ("Buyer") and INDEPENDENT PROPERTY
OPERATORS OF AMERICA, LLC ("Seller").
RECITALS:
WHEREAS, on September 12, 2005, Buyer and Seller entered into that
certain Motel Purchase Agreement ("Purchase Agreement");
WHEREAS, on October 14, 2005, Buyer and Seller entered into that
certain Amendment to Motel Purchase Agreement and on October 31, 2005, Buyer and
Seller entered into that certain Second Amendment to Motel Purchase Agreement
which revised certain terms of the Purchase Agreement as more particularly set
forth therein; and
WHEREAS, Buyer and Seller desire to further amend the Purchase
Agreement to provide for two separate closings and to provide for the assumption
of the GE South Bend Mortgage Documents (as hereinafter defined) applicable to
the South Bend, Indiana portion of the Property.
WITNESSETH:
Buyer and Seller hereby agree to amend the Purchase Agreement as follows:
1. The Closing shall occur on two separate dates. The parties hereto
will close on the Fayetteville, North Carolina, Ft. Xxxxx, Indiana, Lafayette,
Indiana, Marion, Indiana and Warsaw, Indiana locations (the "1st Properties")
effective on November 7, 2005 (the "1st Closing Date"). $20,229,705.00 of the
purchase price set forth in Section 2 of the Purchase Agreement (as amended)
shall be allocated to the 1st Properties.
The closing (the "2nd Closing") on the Comfort Suites in South Bend,
Indiana (the "South Bend Property") shall occur on November 30, 2005 (the "2nd
Closing Date"), or such earlier date as the parties may agree to. $12,080,000.00
of the purchase price set forth in Section 2 of the Purchase Agreement (as
amended) shall be allocated to the South Bend Property. The Deposit shall not be
credited to the Purchase Price unless and until the 2nd Closing occurs.
2. The South Bend Property is encumbered by a mortgage (the "GE
Mortgage") dated May 30, 2002 in favor of GE Capital Franchise Finance
Corporation ("GE") securing a Balloon Promissory Note dated May 30, 2002 (the
"GE Note") in the original principal amount of $6,825,000. The GE Note, the GE
Mortgage and all other documents encumbering the South Bend Property and
securing the GE Note are collectively referred to as the "GE Financing
Documents." At Closing Buyer shall assume Seller's obligations under the GE
Financing Documents (arising from and after the 2nd Closing Date) and shall be
entitled to a credit against the Purchase Price in the amount of the then
principal balance of the GE Note. Interest due under the GE Note shall be
pro-rated as of the 2nd Closing Date and Seller shall be entitled to a credit in
the amount of any real estate tax, insurance and other escrows held under the GE
Financing Documents. All funds in such escrows shall be transferred to Buyer.
The assumption fee due and payable under the GE Financing Documents, together
with any other fees or costs charged by GE in connection with such assumption,
shall be paid by Seller at the 2nd Closing.
3. Section 4(b) of the Purchase Agreement "Buyer's Obligations at
Closing" is amended to read as follows, but only with respect to the closing on
the South Bend Property:
At Closing on the 2nd Closing Date, Buyer shall perform its
obligations hereunder and execute and deliver any closing
documents required to be executed by Buyer and Buyer shall pay to
Seller the purchase price allocated to the South Bend Property,
as follows:
(i) Buyer shall assume the obligations under the GE Financing
Documents and receive a credit in the amount of the
principal balance of the GE Note.
(ii) Buyer shall execute and deliver to Seller a promissory note
in the principal amount of $3,000,000.00 (the "South Bend
Second Note"), in form attached hereto as Exhibit A, which
shall be due and payable 1 year after the 2nd Closing Date,
shall not bear interest until maturity and shall bear
interest at the rate of ten percent (10 %) per annum after
maturity. The South Bend Second Note shall be guaranteed by
Supertel Hospitality, Inc., which guaranty shall be in the
form attached hereto as Exhibit B. To the extent permitted
under the GE Consent (as hereinafter defined), the South
Bend Second Note shall also be secured by a mortgage on the
South Bend Property in form reasonably acceptable to Seller.
To the extent the GE Consent does not permit execution and
delivery of the South Bend Second Note by Buyer, the South
Bend Second Note shall be executed and delivered by Supertel
Hospitality, Inc.
(iii) After crediting the Deposit, the principal balance of the
GE Note and the amount of the South Bend Second Note, Buyer
shall pay the balance of the Purchase Price by cashier's
check or certified check or other immediately available
funds and Escrow Agent shall deliver the Deposit to Seller.
4. The following which must be satisfied or waived as of the 2nd
Closing Date is hereby added as subsection (i) under Section 18 A. "Conditions
Precedent to Buyer's Obligations":
(i) GE shall have issued its consent to the assumption of the
GE Financing Documents (collectively, the "GE Consent") in
form reasonably satisfactory to Buyer. The GE Consent shall
set forth the current principal balance due under the GE
Financing Documents.
5. The following which must be satisfied or waived as of the Second
Closing Date is hereby added as the last paragraph under Section 18 B.
"Conditions Precedent to Seller's Obligations":
GE shall have issued the GE Consent and its consent to the
release of Seller under the GE South Bend Financing Documents
in form reasonably satisfactory to Seller.
6. The third paragraph of Section 2 of the Purchase Agreement is hereby deleted.
7. Supertel Hospitality, Inc. joins in the execution and delivery of this Third
Amendment to agree to the terms and provisions hereof.
8. Capitalized terms used herein without definition shall have the meanings
provided therefore in the Purchase Agreement unless the context otherwise
requires.
IN WITNESS WHEREOF, the parties have executed this Third Amendment in
multiple counterparts, including facsimile counterpart, each of which shall be
deemed an original and all of which shall constitute one agreement, as of the
date first written above.
INDEPENDENT PROPERTY OPERATORS SUPERTEL LIMITED PARTNERSHIP, a
OF AMERICA, LLC Virginia limited partnership
By: Xxxxx Management II, Inc. By: Supertel Hospitality REIT Trust
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxx, III
Title: President By: /s/ Xxxx X. Xxxxxxx
Title: President
SUPERTEL HOSPITALITY, INC., a
Virginia corporation
By: /s/ Xxxx X. Xxxxxxx
Title: President