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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 1998
THE PEREGRINE REAL ESTATE TRUST
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
California 0-9097 94-2255677
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification
incorporation or organization) Number)
1300 Ethan Way, Suite 200
Sacramento, California 95825
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(Address of principal executive offices) (Zip Code)
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(916) 929-8244
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(Registrant's telephone number, including area code)
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THE PEREGRINE REAL ESTATE TRUST
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 1, 1998, pursuant to a purchase and sale agreement, as amended,
(the "Agreement of Purchase and Sale"), The Peregrine Real Estate Trust (the
"Trust") purchased a full service 191 room hotel located in Concord, California
for $9,000,000. The purchase price for the Concord hotel was determined based on
an analysis of the market as well as the historical performance of the hotel.
Funding for the hotel acquisition was provided from borrowings under the Trust's
existing $20,000,000 credit facility (the "Credit Facility"). Attached hereto
as Exhibits 2.1 through 2.3 is the Agreement of Purchase and Sale.
ITEM 5. OTHER EVENTS
On June 30, 1998, the Trust and the noteholders that are party to the
Trust's Senior Credit Agreement executed a Fourth Amendment to Second Amended
and Restated Note Agreement to permit the Trust to use the proceeds from the
Credit Facility to acquire the hotel and enter into an amendment to the existing
Credit Facility for additional borrowing capacity. Attached hereto as Exhibit
10.18 is the Fourth Amendment to Second Amended and Restated Note Agreement. The
Trust anticipates that it will enter into an amendment of the Credit Facility
with its lender, Fleet Capital Corporation ("Fleet"), to provide an additional
$7,500,000 of borrowing capacity; however, there can be no assurance that an
agreement will be entered into or financing will be provided by Fleet or an
alternative lender. Under the existing $20,000,000 Credit Facility the Trust
currently has approximately $2,500,000 of available borrowing capacity. After
amendment, the Trust's total borrowing capacity under the Credit Facility will
be $27,500,000 which will bring the total current available borrowing capacity
to approximately $10,000,000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
2.1 Agreement of Purchase and Sale dated March 23, 1998, by
and between Jeannette Nebout and Pierre Nebout, as Trustees of the
Pierre Nebout and Jeannette Nebout Inter Vivos Revocable Trust dated
July 20, 1995, as Seller and The Peregrine Real Estate Trust as Buyer.
2.2 First Amendment to Agreement of Purchase and Sale dated
March 23, 1998, by and between Jeannette Nebout and Pierre Nebout, as
Trustees of the Pierre Nebout and Jeannette Nebout Inter Vivos Revocable
Trust dated July 20, 1995, as Seller and The Peregrine Real Estate Trust
as Buyer, dated May 18, 1998.
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2.3 Second Amendment to Agreement of Purchase and Sale dated
March 23, 1998, by and between Jeannette Nebout and Pierre Nebout, as
Trustees of the Pierre Nebout and Jeannette Nebout Inter Vivos Revocable
Trust dated July 20, 1995, as Seller and The Peregrine Real Estate Trust
as Buyer, dated June 22, 1998.
10.17 Third Amendment to the Second Amended and Restated Note
Agreement dated May 1, 1998, by and among The Peregrine Real Estate
Trust, the Noteholders Named Therein, and The Prudential Insurance
Company of America as Agent for the Noteholders.
10.18 Fourth Amendment to the Second Amended and Restated Note
Agreement dated June 30, 1998, by and among The Peregrine Real Estate
Trust, the Noteholders Named Therein, and The Prudential Insurance
Company of America as Agent for the Noteholders.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE PEREGRINE REAL ESTATE TRUST
Registrant
Date: July 15, 1998 /s/ Larry Knorr
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Larry Knorr
Vice President and Chief Accounting Officer
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INDEX TO EXHIBITS
2.1 Agreement of Purchase and Sale dated March 23, 1998, by and
between Jeannette Nebout and Pierre Nebout, as Trustees of the
Pierre Nebout and Jeannette Nebout Inter Vivos Revocable Trust
dated July 20, 1995, as Seller and The Peregrine Real Estate
Trust as Buyer.
2.2 First Amendment to Agreement of Purchase and Sale dated March
23, 1998, by and between Jeannette Nebout and Pierre Nebout, as
Trustees of the Pierre Nebout and Jeannette Nebout Inter Vivos
Revocable Trust dated July 20, 1995, as Seller and The Peregrine
Real Estate Trust as Buyer, dated May 18, 1998.
2.3 Second Amendment to Agreement of Purchase and Sale dated March
23, 1998, by and between Jeannette Nebout and Pierre Nebout, as
Trustees of the Pierre Nebout and Jeannette Nebout Inter Vivos
Revocable Trust dated July 20, 1995, as Seller and The Peregrine
Real Estate Trust as Buyer, dated June 22, 1998.
10.17 Third Amendment to the Second Amended and Restated Note
Agreement dated May 1, 1998, by and among The Peregrine Real
Estate Trust, the Noteholders Named Therein, and The Prudential
Insurance Company of America as Agent for the Noteholders.
10.18 Fourth Amendment to the Second Amended and Restated Note
Agreement dated June 30, 1998, by and among The Peregrine Real
Estate Trust, the Noteholders Named Therein, and The Prudential
Insurance Company of America as Agent for the Noteholders.
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EXHIBIT 2.1
AGREEMENT OF PURCHASE AND SALE DATED MARCH 23, 1998, BY AND BETWEEN
JEANNETTE NEBOUT AND PIERRE NEBOUT, AS TRUSTEES OF THE PIERRE NEBOUT
AND JEANNETTE NEBOUT INTER VIVOS REVOCABLE TRUST DATED JULY 20, 1995,
AS SELLER AND THE PEREGRINE REAL ESTATE TRUST AS BUYER.
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AGREEMENT OF PURCHASE AND SALE
between
JEANNETTE NEBOUT AND PIERRE NEBOUT,
as Trustees of the Pierre Nebout and Jeannette Nebout
Inter Vivos Revocable Trust dated July 20, 1995
as Seller
and
THE PEREGRINE REAL ESTATE TRUST
as Buyer
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AGREEMENT OF PURCHASE AND SALE
This Agreement is made and entered into as of this 23rd day of
March, 1998, by and between JEANNETTE NEBOUT and PIERRE NEBOUT as trustees of
the Pierre Nebout and Jeannette Nebout Inter Vivos Revocable Trust dated 7/20/95
(collectively, "Seller") and THE PEREGRINE REAL ESTATE TRUST, a California
business trust ("Buyer").
RECITALS
A. Seller is the fee owner of a certain parcel of real property
(the "Real Property") as further defined in Section 1.29 and more particularly
described in Exhibit A), and is the fee owner of the improvements located on the
Real Property consisting of, among other things, the hotel presently known as
the Holiday Inn located at 1050 Burnett Avenue, Concord, California (the
"Hotel", as further defined in Section 1.9). The Real Property and the Hotel are
sometimes referred to herein as the "Property".
B. Buyer desires to purchase the Property from Seller and Seller
is willing to sell the Property to Buyer upon and subject to the terms and
conditions of this Agreement.
C. Buyer and Seller desire to enter into this Agreement for the
purpose of providing for the consummation of the acquisition of the Property by
Buyer upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the respective agreements
hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the following terms shall have the following
meanings:
1.1 Agreement shall mean this Agreement and all future amendments
and modifications hereto.
1.2 Closing shall mean the consummation of the sale of the
Property to Buyer, which Closing shall occur on the Closing Date.
1.3 Closing Date shall have the meaning set forth in Section 9.1.
1.4 Contracts shall mean all of the contracts, agreements,
franchise or license agreements, commitments, warranties and guaranties, and
other documents and instruments, oral or written, in effect as of the date
hereof with respect to the Hotel, which are described on attached Exhibit B, all
Service Contracts and all contracts relating to Hotel Employees.
1.5 Deposit shall have the meaning set forth in Section 2.2.
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1.6 Equipment Leases shall mean all of the equipment leases, oral
or written, in effect as of the date hereof with respect to the Hotel, which are
described on attached Exhibit C, including, without limitation, equipment leases
for television sets, mini-bars and computer software or equipment.
1.7 FF&E shall mean all of the furniture, fixtures and equipment
owned by Seller and located in the Hotel or off-site, if any, including, without
limitation, floor coverings, pictures, beds, mattresses, bedspreads, pillows,
radios, television sets, other furniture located within the Hotel and all
specialized hotel equipment, including, without limitation, all equipment used
in the operation of kitchens, dining rooms, bars, laundry and dry cleaning
facilities, cleaning equipment, office equipment, machines, special lighting and
other equipment of a like nature, including, without limitation, those items
listed on Exhibit D attached hereto with additions and deletions as may occur or
have previously occurred in the ordinary course of business; provided, however,
that FF&E shall exclude the Operating Equipment and the Operating Supplies.
1.8 Financial Information shall mean the quarterly (prepared on a
monthly-year to date basis) and year-end income and expense statements with
respect to the Property for all calendar years since Seller has owned the Hotel
and, to the extent available, for the current year. The financial statements
shall have been certified by Tom Lynden, Seller's accountant, as having been
prepared in accordance with the Uniform System of Accounts for Hotels,
consistently applied.
1.9 Hotel shall mean with respect to the Property (i) all
buildings, structures, fixtures, landscaping and other improvements constructed
on or affixed to the Property, (ii) the Contracts, the Service Contracts, the
Leases, the Equipment Leases, the Permits and the Intangibles, if and to the
extent such Contracts, Service Contracts, Leases, Equipment Leases, Permits and
Intangibles are assignable or the necessary approvals for the assignment thereof
to Buyer can be obtained, (iii) the FF&E, the Liquor Assets, the Operating
Equipment, the Operating Supplies and all other equipment, machinery, vehicles,
inventory, supplies, goods and Personal Property owned by Seller and located in
or affixed to the Hotel or owned by Seller and used in connection with the
ownership or operation of the Hotel, (iv) all accounts receivable (subject to
proration and adjustment as provided in Sections 9.3 and 9.4), and all
reservation deposits and advance or prepaid payments or deposits relating to the
operation of the Hotel and to be credited to Buyer in accordance with Section
9.3, and (v) all books and records relating to the operation of the Hotel,
including, without limitation, applicable computer software owned or licensed by
Seller (to the extent assignable or to the extent that the necessary approvals
for the assignment thereof to Buyer can be obtained).
1.10 Hotel Employee shall mean any person who is employed by Seller
in connection with the operation or management of the Hotel.
1.11 [Intentionally Deleted].
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1.12 Inspection Period shall mean the period commencing on the date
hereof and expiring thirty (30) days thereafter.
1.13 Insurance Policies shall mean all of Seller's policies of
insurance in effect as of the date hereof with respect to the Property, which
are described on attached Exhibit E, other than so-called "blanket" policies.
1.14 Intangibles shall mean any trademarks, service marks,
copyrights, trademark, service mark and copyright registrations, applications
for trademark and service mark registrations, business and trade names or logos,
patent and patent applications, which are owned by or licensed to Seller and/or
are used in connection with the operation of the Hotel, which are described on
attached Exhibit F.
1.16 Leases shall mean all of the leases, licenses, concessions and
other similar occupancy agreements, oral or written, in effect as of the date
hereof with respect to the Property, which are described on attached Exhibit G.
1.17 Legal Requirements shall mean any of the following which are
applicable to the ownership and/or operation of the Property (including, without
limitation, the Hotel Employees in their role as employees with regard to the
Hotel): all laws, statutes, rules, regulations, ordinances, codes, orders,
decrees or rulings of any governmental or judicial authority including, without
limitation, all zoning, land use, subdivision, redevelopment, environmental,
health, energy, building and construction laws and regulations affecting the
use, occupancy or operation of the Hotel; any permit or occupancy certificate
issued pursuant to any law, statute, rule, regulation, ordinance, code, and/or
any order or decree by any public officer having jurisdiction.
1.18 Liquor Assets shall mean the Liquor Licenses and Seller's
inventory of alcoholic beverages as of the Closing Date which are saleable in
connection with the operation of the Hotel or the restaurants, bars, function
rooms and guest rooms located therein.
1.19 Liquor Licenses shall mean all of the licenses pursuant to
which the sale of alcoholic beverages is permitted in the Hotel or the
restaurants, bars, function rooms or guest rooms located therein.
1.20 [Intentionally Deleted].
1.21 Operating Equipment shall mean all items of equipment owned or
leased by Seller on the Closing Date and used in the operation or maintenance of
the Hotel, including, but not limited to, food service preparation utensils,
guest room utensils (ash trays, hangers, etc.), chinaware, glassware, silverware
and hollowware, food and beverage service equipment, uniforms, all pool and
recreation area equipment and supplies, the supply of guest room linens and
towels, all vehicles and machinery, and the elevators, HVAC and electrical and
mechanical systems; provided, however, that Operating Equipment shall exclude
FF&E and Operating Supplies.
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1.22 Operating Supplies shall mean all items owned by Seller on the
Closing Date and used in the operation or maintenance of the Hotel and which are
consumable or, when once used, are disposed of, including, without limitation,
supplies for laundry, housekeeping, food and beverage service (excluding the
Liquor Assets), pool and recreation areas, engineering, accounting and office
use, together with paper supplies, inventories of food and beverages (excluding
the Liquor Assets) and other inventories and miscellaneous general supply items.
1.23 Permits shall mean all the licenses and permits and any other
similar certificates and approvals issued to Seller, and applications therefor,
in effect as of the date hereof with respect to the Property as listed on
attached Exhibit H; provided, however, that Permits shall exclude the Liquor
Licenses.
1.24 Person shall mean any natural person, corporation,
partnership, firm, association, government, governmental agency or any other
entity and whether acting in an individual, fiduciary or other capacity.
1.25 Personal Property shall mean all of the personal property
(tangible or intangible) owned by Seller and used in connection with the
operation or maintenance of the Hotel, including, without limitation, the
Contracts listed on Exhibit B the FF&E listed on attached Exhibit D, the
Operating Equipment, the Operating Supplies, the Intangibles listed on attached
Exhibit F, and those additional items, if any, listed on attached Exhibit I.
1.26 Plans and Specifications shall mean the as-built plans and
specifications with respect to the Hotel which are described on attached Exhibit
J.
1.27 Preliminary Title Report shall collectively mean that certain
PTR issued by the Title Company (the "PTR").
1.28 Purchase Price shall have the meaning set forth in Section
2.2.
1.29 Real Property shall mean the real property as more
particularly described in Exhibit A, and including, without limitation, to the
extent owned by Seller, all minerals, oil, gas and other hydrocarbon substances
on and under the Real Property, as well as all development rights, air rights,
water, water rights and water stock relating to the Real Property and any other
easements, rights of way or appurtenances used in connection with the beneficial
use and enjoyment of the Real Property.
1.30 Service Contracts shall mean all of the service, maintenance
and other similar contracts, oral or written, in effect as of the date hereof
with respect to the Property, which are described on attached Exhibit L.
1.31 Title Company shall mean First American Title Company located
in San Francisco, California.
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1.32 Title Policy shall mean an ALTA Owner's Policy of Title
Insurance (Form B, rev. 10/17/70), in the amount of the Purchase Price and
showing Buyer as the fee owner of such Property, subject only to such exceptions
and with such endorsements as Buyer may designate in during the Inspection
Period.
ARTICLE II
PURCHASE AND SALE
2.1 Sale. Seller agrees to sell and assign (as applicable) to
Buyer, and Buyer agrees to purchase from Seller and accept the assignment from
Seller of, all of Seller's right, title and interest in and to the Property,
subject to the terms, covenants and conditions set forth herein.
2.2 Purchase Price.
(a) The purchase price (the "Purchase Price") of the Hotel
shall be Nine Million Six Hundred Thousand Dollars ($9,600,000). The Purchase
Price shall be subject to adjustment as provided herein.
(b) The Purchase Price shall be paid as follows:
(i) Upon the execution of this Agreement by both Buyer
and Seller, Buyer shall deposit in escrow with Title Company a cash payment in
the amount of One Hundred Thousand Dollars ($100,000) (the "Deposit"). The
Deposit shall be held in an interest bearing account approved by Seller and
Buyer, and all interest thereon shall be deemed a part of the Deposit. If Buyer
elects to terminate this Agreement pursuant to the terms and conditions
contained herein, the Deposit together with all interest thereon, shall be
returned to Buyer upon five (5) days written notice.
(ii) In the event the sale of the Property as
contemplated hereunder is consummated, the Deposit shall be paid to Seller and
credited against the Purchase Price. In the event the sale of the Property is
not consummated due to the failure of any condition to Buyer's obligations or
for any other reason except a default under this Agreement on the part of Buyer,
the Deposit shall be returned to Buyer. IF THE SALE IS NOT CONSUMMATED AS A
RESULT OF A DEFAULT BY BUYER HEREUNDER, THEN THE DEPOSIT SHALL BE PROMPTLY PAID
BY TITLE COMPANY TO SELLER AS LIQUIDATED DAMAGES. THE PARTIES HAVE AGREED THAT
SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE AS
SPECIFIED ABOVE, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE.
AFTER NEGOTIATION, THE PARTIES HAVE AGREED UPON THE AMOUNT OF THE DEPOSIT,
CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, AS
A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN SUCH EVENT AND
AS SELLER'S EXCLUSIVE REMEDY AGAINST BUYER, AT LAW OR IN EQUITY, IN THE EVENT OF
A DEFAULT ON THE PART OF BUYER. IN PLACING THEIR INITIALS BELOW, EACH PARTY
SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE
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ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT
THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES
PROVISION.
INITIALS: SELLER ________ BUYER _______
In the event of any default by Seller under the terms of this
Agreement, Buyer shall be entitled to pursue any remedy at law or in equity,
including specific performance.
(iv) The Purchase Price, less any portion of the
Deposit that may have been applied to the Purchase Price, shall be paid to
Seller in immediately available funds at the Closing. Said sum shall be reduced
or increased by any closing adjustments and prorations and any substitutions,
deletions, or additions of Property as set forth in this Agreement.
ARTICLE III
BUYER'S INSPECTION PERIOD
3.1 Buyer's Inspection Period. Buyer shall have the right during
the Inspection Period to inspect and approve (at Buyer's sole cost and expense)
all aspects of the Property. Buyer's review shall include the following:
(a) All matters with respect to title to the Property,
including, without limitation, (i) the PTR and all documents described therein;
(ii) a current survey of the Property by a duly licensed surveyor authorized to
act in such capacity in the State of California, acceptable to Buyer and in
sufficient detail to allow the Title Company to delete the standard pre-printed
survey exceptions from the Title Policy and issue the Title Policy; (iii) copies
of the real and personal property tax bills for the Property for the last three
(3) tax years (or for such period of time that Seller has owned the Property if
less than three (3) years and for such period prior to Seller's ownership to the
extent reasonably available); and (iv) copies of any assessment appeals,
applications or notices filed during the last three (3) tax years (or for such
period of time that Seller has owned the Property if less than three (3) years
and for such period prior to Seller's ownership to the extent reasonably
available) with respect to real and personal property taxes applicable to the
Property and any documents related thereto.
(b) The Contracts, the Service Contracts, and any other
agreements entered into by Seller pertaining to the management of the Property,
the Leases, the Equipment Leases, the Permits, the Insurance Policies and the
Intangibles; together with any other agreements, documents or instruments
relating to the ownership or operation of the Property, if and to the extent
same will survive the Closing and be binding upon Buyer.
(c) The FF&E, the Liquor Assets, the Operating Equipment,
the Operating Supplies, and all other Personal Property, and copies of all bills
of sale and contracts under which such items were acquired (to the extent
reasonably available to Seller).
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(d) The Legal Requirements and the Property's compliance
therewith, and all governmental permits, approvals and certificates obtained or
held by Seller relating to the Property, or the construction, operation, use or
occupancy of any part thereof, including, without limitation, all building
permits, certificates of occupancy and all other Permits and the Liquor
Licenses.
(e) The Financial Information and the Hotel's current
accounts receivable, current inventories, current and future bookings of
function rooms and guestrooms and deposits, and all other similar books and
records and Seller's tax returns relating to the operation of the Property since
Seller's purchase of the Hotel, the monthly reports received from the Hotel
operator during the twelve-month period prior to the Closing regarding the
operation and condition of the Hotel and the computation of any fee due the
operator, and all matters with respect to the market conditions relating to
comparable hotels in the metropolitan area where the Hotel is located, which
Buyer shall obtain at Buyer's sole expense. Seller shall have no obligation to
provide information or documentation that identifies existing or potential
clientele during the Inspection Period; provided, however, on the Closing, such
information and/or documentation shall be deposited by Seller with the Title
Company and distributed to Buyer in accordance with the terms and conditions of
this Agreement.
(f) The physical and environmental condition of the
Property, including, without limitation, a hazardous substances assessment of
the Property to be obtained by Buyer at Buyer's sole expense and prepared by an
engineer or environmental auditor selected or approved by Buyer, the interior,
the exterior, the structure, the mechanical (including elevators), the
electrical, HVAC, and plumbing components, the roof, the paving, the utilities,
the Plans and Specifications and all other functional aspects of the Property.
Seller shall deliver to Buyer any copies of the Plans and Specifications that
are in Seller's possession, engineering studies, and all other similar reports
or assessments relating to the physical and environmental condition of the
Property, including, without limitation, all maintenance records (which shall be
made available for Buyer's review at the Property) and soils and/or
environmental reports and studies.
(h) A detailed breakdown of all capital improvements
performed on the Property subsequent to the opening of the Hotel, including, but
not limited to, the cost thereof, plus projected capital improvement costs for
the calendar year 1998.
(i) An itemized list of all suppliers and trade creditors of
the Hotel, and of all customers of the Hotel to whom Seller regularly extends
special credit or special pricing arrangement.
(j) Any actions, suits, disputes, legal or administrative
proceedings, pending or threatened, which could affect the Property or Seller's
ability to perform its obligations hereunder, together with a copy of the most
recent advisory reports from counsel for Seller to the independent certified
public accountants auditing Seller's financial statements.
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(k) A resolution by Seller authorizing the execution and
delivery of this Agreement. (l) A detailed budget for the Property for the
calendar year 1998.
(m) An interview with the on-site current general manager of
the Property.
(n) All other information within the possession or control
of Seller which Buyer reasonably requires, and specifically requests from
Seller, to investigate matters affecting the Property.
The information and/or items described in subparagraphs (a) through
(n) above shall be delivered by Seller to Buyer on the date of the execution of
this Agreement to the extent said information is in Seller's possession or
reasonably obtainable by Seller.
Buyer shall notify Seller in writing on or before the expiration of
the Inspection Period which (if any) of the foregoing conditions are fulfilled
to Buyer's satisfaction. If any of the foregoing conditions are not fulfilled to
Buyer's satisfaction, or if any other aspect of the Property is not approved by
Buyer, as determined by Buyer in its sole and absolute discretion, Buyer shall
have the right at its sole election, to be exercised by written notice to Seller
on or before the expiration of the Inspection Period, either to waive the
condition or other item in question and proceed to Closing or to terminate this
Agreement. Notwithstanding the foregoing, the failure to provide any such
notices to Seller shall be deemed to be an election to terminate this Agreement.
Upon Seller's or Title Company's request, Buyer shall promptly confirm in
writing its disapproval of any such condition and Buyer's election to terminate
this Agreement.
In the event Buyer elects to terminate this Agreement or this
Agreement is otherwise deemed to be terminated in accordance with this Section
3.1, Buyer shall pay the title and escrow charges, if any, the Initial Deposit
shall be returned to Buyer, and neither party shall have any further rights or
obligations hereunder, except pursuant to the indemnities contained in Sections
11.1, 12.1 (to the extent it applies to Seller) and 12.9 hereof.
ARTICLE IV
CONDITIONS TO BUYER'S OBLIGATIONS
4.1 Conditions to Buyer's Obligations. The obligation of Buyer to
purchase the Property shall be subject to the satisfaction, on or before the
Closing Date (except as otherwise provided below), of each of the following
conditions:
(a) Termination of Management Agreement. Seller shall
deliver title to the Hotel free of (i) any management contracts or similar
commitments of any nature with any hotel management entity, (ii) the Contracts
described in Exhibit B, if any, and (iii) of all employment contracts and
benefit plans.
(b) No Termination. Buyer shall not have exercised any other
termination right provided in this Agreement.
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(c) Delivery of Documents. Seller shall have delivered to
Buyer or to the Title Company, as applicable, all of the items listed in Section
9.2(a). Seller, upon request, shall have delivered such other documents not
inconsistent with the terms of this Agreement as are customary in order to carry
out the purchase and sale of the Property in accordance with the terms of this
Agreement as reasonably determined by Buyer.
(d) Title Policy. The Title Company shall have issued or be
prepared to issue the Title Policy to Buyer at the Closing in the form of the
proforma obtained by Buyer upon the expiration of the Inspection Period.
(e) Title to Personal Property. Buyer shall have received
evidence reasonably satisfactory to Buyer that the Personal Property shall be
conveyed to Buyer at the Closing, free of any liens, encumbrances or interests
of third parties (except of equipment lessors of any Operating Equipment being
leased by Seller) except as otherwise approved by Buyer in writing and in its
sole and absolute discretion, including, without limitation, if available, a
certificate from the Secretary of State or other appropriate government official
of the State of California to the effect that, as of the Closing Date, there are
no filings against Seller in the office of the Secretary of State or other
government agency under the Uniform Commercial Code of California which would be
a lien on any of the Personal Property or the Liquor Assets. Seller and Buyer
shall use their good faith efforts to obtain any necessary consents to the
assignment of all Permits, Equipment Leases, Service Contracts and other
Contracts and of the Liquor Licenses.
(f) Representations and Warranties. All of the
representations and warranties contained in or made pursuant to this Agreement
shall have been true and correct in all material respects when made as
reasonably determined by Buyer, and shall (subject to Section 6.2) be true and
correct in all material respects as of the Closing Date as if made on the
Closing Date as reasonably determined by Buyer.
(g) No Governmental Proceeding; Litigation. No suit, action,
investigation, inquiry or other legal or administrative proceeding by any
governmental body or other Person shall have been instituted or threatened with
respect to the transactions contemplated hereby which questions the validity or
legality of the transactions contemplated hereby or which, if successfully
asserted, would otherwise, in the reasonable judgment of Buyer, have a material
adverse effect on the assets, employees, properties or business (as conducted or
proposed to be conducted) of Seller, the value or marketability of the Property
or the ability of Buyer to operate the Property in the manner it is being
operated on the date hereof, and no proceeding shall be pending or threatened
which could cause the change, redesignation or other modification of the zoning
classification of any building or environmental code requirements applicable to,
the Property, any portion thereof, or any property adjacent thereto, where such
change, redesignation or other modification would have a material adverse effect
on the Property.
(h) No Material Adverse Change to Property. The physical
condition of the Property shall be substantially the same on the Closing Date as
on the date hereof reasonable wear and tear and loss by casualty excepted
(subject to Section 8.1). Buyer shall be
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entitled to make a final walk through inspection of the Property prior to the
Closing to confirm that there has been no material change in the Property (other
than the diminution of supplies in the ordinary course of business, reasonable
wear and tear and loss by casualty excepted (subject to Section 8.1)) following
its initial inspection during the Inspection Period. The additional financial
information to be delivered or made available to Buyer pursuant to Section 11.4
shall not differ in any material adverse respect from the Financial Information
for the same time period delivered or made available to Buyer pursuant to
Section 3.1, and the financial information to be delivered or made available to
Buyer pursuant to Section 10.4 shall not evidence any material adverse
difference in the financial condition or operations of the Property from the
Financial Information previously delivered or made available to Buyer.
(i) Liquor Licenses. At the Closing, either (i) the Liquor
Licenses shall have been transferred or be transferable to Buyer in a manner
reasonably satisfactory to Buyer, if and to the extent permitted by all
applicable laws and regulations, or (ii) Buyer shall have obtained temporary
liquor license permits subject only to conditions reasonably satisfactory to
Buyer sufficient to permit the continued sale of alcoholic beverages in the
Hotel (the "Temporary Liquor License Permit").
(j) Compliance. Seller shall have complied with all
covenants to be performed by Seller pursuant to this Agreement as reasonably
determined by Buyer.
(k) Franchise Agreement. Buyer shall have entered into a
franchise agreement with Holiday Inn in a form acceptable to Buyer which shall
be effective upon the Closing Date.
(l) Property Improvement Plan Agreement. Buyer shall have
entered into a Property Improvement Plan Agreement with Holiday Inn in a form
acceptable to Buyer which shall be effective upon the Closing Date.
If any of the foregoing conditions set forth in Sections 4.1(a)
through 4.1(l) are not satisfied in Buyer's discretion, or otherwise, on or
before the respective outside date for the satisfaction of such condition
provided above Buyer shall have the right to terminate this Agreement upon
written notice to Seller, and the Deposit shall be returned to Buyer. If such
termination is due to an act or failure to act by a third party, then Buyer and
Seller shall each pay one-half (1/2) of the title and escrow charges, if any. If
such termination is due to an act or failure to act by Seller, then Seller shall
pay all of the title and escrow charges, if any. If such termination is not due
to an act or failure to act by a third party or by Seller, then Buyer shall pay
all of the title and escrow charges, if any. In the event that this Agreement is
terminated in accordance with this Paragraph, neither party shall have any
further rights or obligations hereunder, except pursuant to the indemnities
contained in Sections 11.1, 12.1 (to the extent applicable to any partner of any
Seller) and 12.9 hereof.
ARTICLE V
CONDITIONS TO SELLER'S OBLIGATIONS
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5.1 Conditions to Seller's Obligations. The obligation of the
Seller to sell that portion of the Property owned by Seller to Buyer shall be
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions:
(a) Delivery of Documents. Buyer shall have delivered to
Seller or to escrow, as applicable, all of the items listed in Section 9.2(b).
Buyer shall have delivered such other documents not inconsistent with the terms
of this Agreement as are customary in order to carry out the purchase and sale
of the Property in accordance with the terms of this Agreement as reasonably
determined by Seller.
(b) Representations and Warranties. All of Buyer's
representations and warranties contained in or made pursuant to this Agreement
shall have been true and correct in all material respects when made as
reasonably determined by Seller and shall be true and correct in all material
respects as of the Closing Date as if made on the Closing Date as reasonably
determined by Seller.
(c) Compliance. Buyer shall have complied with all covenants
to be performed by Buyer pursuant to this Agreement as reasonably determined by
Seller.
ARTICLE VI
SELLER'S REPRESENTATIONS AND WARRANTIES
6.1 Seller's Representations and Warranties. Seller represents and
warrants that as of the date hereof and as of the Closing Date (subject to any
additional matters specified by Seller pursuant to Section 6.2):
(a) Organization, etc. Seller is duly authorized, qualified,
and licensed to do business in the jurisdictions in which its ownership of
property or conduct of business legally requires such authorization,
qualification, or license.
(b) Authority and Enforceability; No Violation. The
execution, delivery and performance by Seller of this Agreement and the
instruments referenced herein have been duly authorized by Seller, and when
executed and delivered by Seller, this Agreement and the instruments referenced
herein will constitute legal, valid and binding obligations of Seller and will
not violate any provision of any agreement or judicial order to which Seller is
a party or to which Seller or the Property is subject.
(c) Consents and Approvals of Government Authorities. To the
best of Seller's knowledge, no consent, approval, authorization, order,
registration or qualification of or by any Person, including, without
limitation, any governmental or regulatory authority, is required in connection
with the execution, delivery and performance by Seller of this Agreement or any
instrument referenced herein and the consummation of the transactions
contemplated thereby, (i) except pursuant to laws, rules and regulations
regulating the sale of alcoholic beverages and (ii) except for the requisite
consent of parties to certain of the Equipment Leases, the Contracts and the
Service Contracts.
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(d) Permits, etc. To the best of Seller's knowledge, there
are currently in full force and effect all Permits, easements and rights of way
(including proof of dedication), required by governmental authorities having
jurisdiction over the Property or from private parties for the normal use,
operation and occupancy of the Property or any part thereof and to insure
vehicular and pedestrian ingress to and egress from the Property. Seller has not
received any notice from any Person that there are any defaults or violations
with respect to the Permits or that any of the Permits has not been maintained
in full force and effect.
(e) Plans and Specifications. Except as disclosed by Seller
to Buyer in writing, to the best of Seller's knowledge, the Hotel was
constructed in substantial accordance with the Plans and Specifications, which
Plans and Specifications were approved by all governmental authorities having
jurisdiction thereof and whose approval was required pursuant to any Legal
Requirement, and were and continue to be in material compliance with all
applicable Legal Requirements.
(f) Employees. All employees at the Hotel are employees of
the Seller.
(g) Litigation, etc. Except as set forth on Schedule 1
attached hereto, to the best of Seller's knowledge, there is no insured or
uninsured suit, action, investigation, inquiry or other proceeding by any
governmental body or other Person or any legal or administrative proceeding
pending against or threatened against Seller.
(h) Compliance with Legal Requirements; Environmental.
Except as disclosed by Seller to Buyer in writing, to the best of Seller's
knowledge, the use and operation of the Property are in material compliance with
all Legal Requirements. To the best of Seller's knowledge, no hazardous or toxic
materials or wastes (including, without limitation, asbestos-containing
materials and PCBs) have been produced, disposed of or stored in, on, under or
about the Property.
(i) No Defaults. To the best of Seller's knowledge, Seller
is not in default under any of the Contracts, Service Contracts, Equipment
Leases, Permits or other obligations being assumed by Buyer as of the Closing.
(j) Foreign Person. Seller is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as
amended (the "Code").
(k) Fee Title. Seller has fee simple title to the Property
and on the Closing Date, the Property shall be delivered to Buyer free from any
and all liens, encumbrances, and interest of third parties (except for equipment
lessors of any Operating Equipment being leased by Seller) except as may be
revealed by the PTR and approved by Buyer in writing and in its sole and
absolute discretion and except for any UCC financing statements or fixture liens
as may be revealed by a search of the County of Contra Costa records and
approved by Buyer in writing and in its sole and absolute discretion.
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(l) Complimentary Certificates. To the best of Seller's
knowledge, Seller has not issued more that twenty-five (25) certificates for
complimentary rooms and/or dinners (the "Complimentary Certificates") in the
form attached hereto as Schedule 2.
References to "the best of Seller's knowledge" or any similar phrase
shall refer to matters within the actual knowledge of Jeannette Nebout, Pierre
Nebout, and David Nebout.
All of the foregoing representations and warranties of Seller, as
same may be modified pursuant to Section 6.2 below, shall survive the Closing
for a period of one (1) year after the Closing Date.
6.2 Pre-closing Certification. Within five (5) days prior to the
Closing, Seller shall be entitled to deliver to Buyer a written notice (the
"Exceptions List") specifying any exceptions to the representations and
warranties specified in Section 6.1 that will not be true as of the Closing. In
the event the Exceptions List contains any material deviations from the
representations and warranties set forth in Section 6.1, Buyer shall have five
(5) days from the receipt of the Exceptions List to notify Seller whether it
elects to proceed with the Closing and waive any objection to the items on the
Exceptions List, or terminate this Agreement. In the event Buyer elects to
proceed with the Closing, the Closing shall occur on the later of (i) the
Closing Date, or (ii) two (2) business days after the date of Buyer's notice of
election. In the event Buyer elects to terminate or shall be deemed to have
terminated this Agreement, Seller shall pay all title and escrow charges
involved in such termination. For the purposes of this Section 6.2, a material
deviation shall be deemed to be any item which Buyer determines in its sole
reasonable discretion would have a cost to Buyer to correct or adverse financial
impact to Buyer in excess of Twenty Thousand Dollars ($20,000).
ARTICLE VII
BUYER'S REPRESENTATIONS AND WARRANTIES
7.1 Buyer's Representations and Warranties. Buyer represents and
warrants to Seller that as of the date hereof and as of the Closing Date:
(a) Organization, etc. Buyer is a business trust duly
organized and validly existing under the laws of the State of California. Buyer
is duly authorized, qualified, and licensed to do business in the jurisdictions
in which its ownership of property or conduct of business legally requires such
authorization, qualification, or license.
(b) Authority and Enforceability; No Violation. The
execution, delivery and performance by Buyer of this Agreement and the
instruments referenced herein have been duly authorized by Buyer by all
necessary corporate action, and when executed and delivered by Buyer, this
Agreement and the instruments referenced herein will constitute legal, valid and
binding obligations of Buyer and will not violate any provision of any agreement
or judicial order to which Buyer is a party or to which Buyer is subject.
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ARTICLE VIII
RISK OF LOSS AND INSURANCE PROCEEDS
8.1 Damage by Casualty. Seller shall promptly notify Buyer if,
prior to the Closing, the Property or any portion thereof is damaged or
destroyed by casualty. If the cost to repair such damage or destruction (as
reasonably estimated by Buyer) would exceed $150,000, Buyer may, at its option,
terminate this Agreement by delivering notice of such termination to Seller not
later than ten (10) business days after the date Buyer first receives
notification from Seller of such damage or destruction. If Buyer first receives
such notification less than ten (10) business days prior to the Closing Date,
Buyer may, by notice delivered to Seller, delay the Closing Date to a date not
later than ten (10) business days after the date Buyer first receives such
notification, and Buyer may elect to terminate this Agreement, as provided
above, during such ten (10) business day period. In the event Buyer exercises
its election to terminate this Agreement by reason of this Section 8.1, this
Agreement will terminate, Buyer and Seller shall each pay one-half (1/2) of the
title and escrow charges, if any, the Deposit shall be returned to Buyer and
neither party shall have any further rights or obligations hereunder, except
pursuant to the indemnities contained in Sections 11.1, 12.1 (to the extent
applicable to any partner of any Seller) and 12.9 hereof. In the event Buyer
does not elect to terminate this Agreement by reason of this Section 8.1, or in
the event that the cost to repair such damage or destruction is $150,000 or
less, then the Closing shall occur on the Closing Date, Seller shall assign to
Buyer any right to insurance proceeds by reason of such casualty, and the
Purchase Price shall be reduced by the amount of any deductible or co-insurance
applicable to such casualty under Seller's insurance policies. It is understood
that Seller is presently carrying and will carry through the Closing all-risk
insurance on the Property for the full replacement cost thereof and any failure
by Seller to carry insurance for the full replacement cost shall be a default by
Seller under this Agreement.
8.2 Condemnation. Seller shall promptly notify Buyer if, prior to
the Closing, the Property or any portion thereof or interest therein, is taken
pursuant to the power of eminent domain, or Seller becomes aware of any
proceeding with respect thereto which is instituted or threatened. In such
event, Buyer may, at its option, terminate this Agreement by delivering notice
of such termination to Seller not later than ten (10) business days after the
date Buyer first receives notification from Seller of such taking, institution
of proceeding or threat. If Buyer first receives such notification less than ten
(10) business days prior to the Closing Date, Buyer may, by notice delivered to
Seller, delay the Closing Date to a date not later than ten (10) business days
after the date Buyer first receives such notification. In the event Buyer
exercises its election to terminate this Agreement by reason of this Section
8.2, this Agreement will terminate, Buyer and Seller shall each pay one-half
(1/2) of the title and escrow charges, if any, the Deposit shall be returned to
Buyer and neither party shall have any further rights or obligations hereunder,
except pursuant to the indemnities contained in Sections 11.1, 12.1 (to the
extent applicable to any partner of any Seller) and 12.9 hereof. In the event
Buyer does not elect to terminate this Agreement by reason of this Section 8.2,
the Closing shall occur on the Closing Date, the Purchase Price shall not be
reduced, and Seller shall assign to Buyer all of its rights to compensation from
the condemning authority.
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ARTICLE IX
CLOSING AND PRORATIONS
9.1 Closing. The Closing hereunder shall be held, and delivery of
all items to be made at the Closing under the terms of this Agreement shall be
made, at the Title Company ten (10) days after the expiration of the Inspection
Period, or such earlier date as Buyer and Seller may mutually agree upon in
writing (the "Closing Date"). Except as otherwise expressly provided herein,
such date may not be extended without the prior written approval of both Seller
and Buyer.
9.2 Deposit and Delivery of Documents.
(a) At or before the Closing, Seller shall deposit into
escrow with the Title Company (the "Escrow") or deliver to Buyer the following
items:
(i) a grant deed conveying all of Seller's right,
title and interest in and to the Real Property and all buildings, structures,
fixtures, landscaping and other improvements constructed on or affixed to the
Real Property in the form of attached Exhibit P (the "Deed"), duly executed and
acknowledged by Seller, subject only to the title exceptions accepted by Buyer
in accordance with Section 3.1 above;
(ii) a bill of sale with respect to the Personal
Property in the form of attached Exhibit R (the "Bill of Sale"), duly executed
by Seller;
(iii) two (2) counterparts of an assignment and
assumption of the Contracts, the Service Contracts and the Equipment Leases, the
Leases, the Permits and the Intangibles, to the extent such items are (A) owned
by Seller, (B) assignable (and/or any necessary consents thereto have been
obtained), and (C) in effect as of the Closing, in the form of attached Exhibit
S (the "Assignment and Assumption of Contracts"), duly executed by Seller;
(iv) an affidavit that Seller is not a "foreign
person," in compliance with Section 1445(f)(3) of the Code, in the form of
attached Exhibit S (the "FIRPTA Affidavit"), duly executed by Seller;
(v) a certificate to the effect that the
representations and warranties of Seller in Section 6.1 (subject to the
Exceptions List) are true and correct in all material respects as of the Closing
Date, in the form of attached Exhibit T;
(vi) two (2) counterparts of a preliminary schedule of
adjustments pursuant to Section 9.3 (the "Preliminary Schedule of Adjustments");
and
(vii) any other agreements, documents and other items
expressly required to be delivered to Buyer by Seller pursuant to this
Agreement.
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(b) At or before the Closing, Buyer shall deposit into the
Escrow or deliver to Seller the following items:
(i) funds necessary to close this transaction;
(ii) two (2) counterparts of the Assignment and
Assumption of Contracts, duly executed by Buyer;
(iii) a certificate to the effect that the
representations and warranties of Buyer in Section 7.1 are true and correct in
all material respects as of the Closing Date, in the form of attached Exhibit U,
duly executed by Buyer;
(iv) two (2) counterparts of the Preliminary Schedule
of Adjustments; and
(v) any other agreements, documents and other items
expressly required to be delivered to Seller by Buyer pursuant to this
Agreement.
(c) Buyer and Seller shall each deposit such other
instruments as are reasonably required by the escrow holder or otherwise
required to close the escrow and consummate the purchase and sale of the
Property in accordance with the terms hereof.
9.3 Prorations. At the Closing, the Purchase Price shall be
adjusted using generally accepted accounting principles and standard hotel
accounting procedures. The following adjustments shall be calculated for the
Property:
(a) The books of the Hotel shall be closed as of 12:01 a.m.
on the Closing Date, and all items relating to the balance sheet for the
Property and income and expense with respect to the ownership, operation and
management of the Property shall be allocated and/or prorated between Buyer and
Seller. Except as otherwise provided herein, all such allocations and/or
prorations shall be made in accordance with generally accepted accounting
principles, consistently applied, and practices for hotel accounting on the
basis of a 365-day year. The items to be allocated and/or prorated shall
include, without limitation, the following:
(i) Real and personal property taxes on the basis of
the fiscal year for which assessed;
(ii) Water, sewer, electricity, steam, gas, fuel oil,
telephone, cable television and all other utility charges; (iii) Payments
payable under any Contracts, Service Contracts or Equipment Leases for services
already performed as of the Closing Date; as well as any payments under said
agreements for services not yet rendered;
(iv) Rent and other payments owing under any Leases;
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(v) Guest room revenue of the Hotel, whether in cash
or in accounts receivable, and revenues from the mini-bars, vending machines,
coin telephones or other income-producing equipment (with Seller receiving an
allocation for any of same arising from occupancy for the night beginning on the
day preceding the Closing Date and ending on the Closing Date), as well as any
commissions or other similar amounts owing with respect to room rental;
(vi) Income from the operation of restaurants, bars or
banquet facilities (with Seller receiving an allocation with regard to any
thereof which remain open beyond 12:01 a.m. on the Closing Date through the time
such operations first close on the Closing Date);
(vii) All other revenue, including, without limitation,
guest telephone charges, room service and interest income;
(viii) All other amounts payable that are expressly
assumed by Buyer, including, without limitation, trade account payables assumed
by Buyer by virtue of Buyer's assumption of the Contracts, Service Contracts and
Equipment Leases, but excluding amounts payable for capital improvements to the
Property made prior to the Closing Date;
(ix) Annual permits and/or inspection fees (calculated
on the basis of the period covered), insurance premiums (on Insurance Policies,
if any, continued after the Closing), and other expenses normal to the operation
and maintenance of the Property.
(b) In addition to the allocations and prorations provided
for in 9.3(a) above, the following amounts shall be credited to Seller or to
Buyer, as provided below:
(i) Utility deposits made by Seller, which are
credited or transferred to the account of Buyer by the holder thereof, shall be
credited to Seller at the Closing;
(ii) Prepaid deposits for room and banquet charges for
the period from and after the Closing and shall be credited to Buyer at the
Closing, net of any commissions or other expenses incurred in booking such rooms
and banquets which were paid by Seller prior to the Closing Date. Buyer shall
also receive a credit at Closing in the amount of Six Hundred Twenty Five
Dollars ($625) which shall represent the post Closing obligations in connection
with the Complimentary Certificates;
(iii) Cash on hand which remains at the Property as of
12:01 a.m. on the Closing Date shall be credited to Seller;
(iv) All accounts receivable shall be assigned to Buyer
and Buyer shall forward to Seller or pay to Seller the amount of any payments
received by Buyer on account of such accounts receivable, within a reasonable
period of time after receipt of each
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payment by Buyer, said accounts receivable being subject to reassignment to
Seller as provided for in Section 9.4; and
(v) All existing bank accounts of Seller shall be
retained by Seller and closed out by Seller in due course; and Buyer shall open
and fund its own bank accounts.
(c) Buyer and Seller shall each pay their own attorney's
fees and other fees and costs incurred in connection with the negotiation and
consummation of this Agreement and the transaction contemplated hereunder.
(d) Buyer shall pay (i) the premium for the Title Policy and
endorsements, if any, (ii) the cost of the survey, and (iii) one half (1/2) of
the escrow charges, if any, of the Title Company. Seller shall pay (i) any real
property transfer taxes, (ii) any personal property sales taxes applicable to
the sale of the Personal Property, (iii) one half (1/2) of the escrow charges,
if any, of the Title Company, and (v) all recordation fees with respect to any
documents required to clear Seller's title to the Property.
(e) Notwithstanding any provision of this Agreement to the
contrary, if Buyer shall become liable after the Closing for payment of any
property taxes validly assessed against the Property for any period of time
prior to the Closing, Seller shall pay to Buyer on demand an amount equal to
such tax assessment if and to the extent that Buyer did not receive a credit for
same at Closing, together with interest thereon at the rate of twelve percent
(12%) per annum from the date of receipt by Seller of Buyer's written demand to
the date of payment, if payment is not made within ten (10) days after demand.
Seller shall have the right, at Seller's sole expense, to contest the validity
or amount of any property taxes assessed against the Property for any period of
time prior to the Closing by appropriate proceeding diligently conducted in good
faith, and may withhold or defer payment of such taxes or pay under protest
during such proceeding; provided, however, that prior to delinquency Seller
shall obtain and deliver to Buyer a surety bond or other assurance of payment
satisfactory to Buyer protecting Buyer and the Property from any lien, claim,
demand, loss, cost, liability or expense which Buyer or the Property might
suffer or incur as a consequence of the withheld or protested payment. Upon the
termination of any such proceeding, Seller shall pay the amount finally
determined to be payable, together with all fines, interest, penalties or other
charges incurred or payable as a result thereof. Any refund of Property taxes
received by Property for any period prior to the Closing Date, including,
without limitation, refunds, penalties, and interest resulting from any contest
of taxes by Seller as provided in this Section 9.3(e), shall be promptly paid to
Seller.
(f) The provisions of this Section 9.3 shall survive the
Closing.
9.4 Proration Calculation. The closing adjustments provided for in
Section 9.3 shall be initially prepared by Seller and reviewed by Buyer. In the
event of any dispute regarding such prorations, such dispute shall be submitted
to a nationally recognized accounting firm mutually acceptable to Buyer and
Seller and the decision of such firm shall be
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final. Each party shall bear one half (1/2) of the costs and expenses in
connection with such accountants. Buyer and Seller shall provide such
accountants reasonable access to the Property prior to and after the Closing
Date for the purpose of reviewing adjustments, if necessary. Buyer and Seller
hereby agree that if any of the aforesaid prorations cannot be calculated
accurately on the Closing Date, then the same shall be calculated within ninety
(90) days after the Closing Date and either party owing the other party a sum of
money based on such subsequent proration(s) shall promptly pay said sum to the
other party, together with interest thereon at the rate of twelve percent (12%)
per annum from the Closing Date to the date of payment, if payment is not made
within ten (10) days after delivery of a bill therefor. Buyer and Seller further
agree that if any accounts receivable arising prior to the Closing Date that are
assigned to Buyer pursuant to Section 9.3 are not collected by Buyer within one
hundred twenty (120) days after the Closing Date despite Buyer's normal efforts
to collect such accounts receivable during such period, the Buyer shall have no
further obligation to collect or pay Seller for such accounts receivable and
such accounts receivable shall be reassigned to Seller; provided, that if
following such reassignment, Buyer shall receive payment with respect to any
such reassigned accounts receivable, Buyer shall promptly forward same to
Seller. Buyer and Seller agree that during the one hundred twenty (120) days
after the Closing Date, any funds received by Buyer from a Hotel customer with
an accounts receivable arising prior to the Closing Date shall be first applied
to the accounts receivable that arose prior to the Closing Date and delivered to
Seller pursuant to the terms hereof, and the balance, if any, shall be retained
by Buyer.
9.5 Allocation of Consideration. The Purchase Price shall be
allocated among the assets purchased by Buyer pursuant to Section 2.1 hereof as
provided for in a separate letter agreement to be agreed to by Seller and Buyer
on or prior to the end of the Inspection Period and such allocation shall be
utilized by Seller and Buyer in connection with the preparation of their
respective income tax returns. Seller and Buyer agree that they will not assert
any position subsequent to the filing of such returns (whether upon audit or
otherwise) which is inconsistent with such allocation. Seller and Buyer shall
each comply with and furnish any information required by Section 1060 of the
Internal Revenue Code of 1986, as amended (the "Code") and the Treasury
Regulations thereunder and corresponding state law.
ARTICLE X
SELLER'S COVENANTS
10.1 Maintenance of the Property. From the date hereof until the
Closing Date, Seller shall cause the Property to be maintained in good order,
condition and repair, reasonable wear and tear and casualty excepted (subject to
Section 8.1), shall cause all repairs, maintenance and replacements of the
Property and Personal Property, necessary in the ordinary course of business, to
be made, shall maintain adequate inventories of Operating Equipment and
Operating Supplies, shall not remove any FF&E from the Property (other than in
the ordinary course of business in which case adequate replacements shall have
been made), and shall otherwise operate the Property in substantially the same
manner as before the making of this Agreement, as though Seller were retaining
the Property.
10.2 Buyer's Consent to New Contracts Affecting the Property.
Seller shall not, between the execution of this Agreement and the Closing Date,
enter into any lease,
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amendment of lease, contract or agreement pertaining in any material way to the
Property, or modify in any material way any existing Lease, Equipment Lease,
Contract, Service Contract or other agreement pertaining in any material way to
the Property, or waive any material rights of Seller thereunder, without in each
case obtaining Buyer's prior written consent thereto, which consent shall not be
unreasonably withheld or delayed (excluding, however, any booking or room
reservation agreements or contracts which are on commercially reasonable terms
with unaffiliated third parties, and any other contracts or agreements with
unaffiliated third parties which are on commercially reasonable terms and which
will not survive the Closing or which may be canceled without penalty on not
more than thirty (30) days' notice.
10.3 Purchase of Personal Property. Seller shall do all acts
reasonably required to be done by Seller, and shall cooperate with Buyer, to
facilitate and expedite the purchase and sale of the Personal Property according
to and in full compliance with the requirements of Division 6 of the California
Commercial Code and any other applicable law.
10.4 Delivery of Additional Information and Materials. Seller shall
cause the following to be delivered to or otherwise made available to Buyer: (i)
a copy of the profit-and-loss statement for the calendar year 1997, if
available, and a year-end financial statement for the Hotel for the calendar
year ending December 31, 1997, if available, certified by Tom Lynden, Seller's
accountant, as having been prepared in accordance with the Uniform System of
Accounts for Hotels, consistently applied, (ii) within two (2) business days
after receipt by Seller, an unaudited profit-and-loss statement for the period
from January 1, 1998 to the end of each calendar month prior to the Closing
Date, and as soon as available, records maintained by Seller or the current
manager with respect to the operation of the Hotel from January 1, 1998 through
the Closing Date.
10.5 Sales Tax Clearance. Prior to the Closing, Seller shall obtain
from the applicable governmental agency in California a sales tax clearance with
respect to the Hotel for the period prior to the Closing. Seller hereby agrees
to indemnify Buyer and Buyer's directors, officers, partners, shareholders,
affiliates and agents (collectively, the "Buyer Indemnitees") and hold the Buyer
Indemnitees harmless from and against any and all damages, liabilities, losses,
costs and expenses (including, without limitation, reasonable attorneys' fees
and expenses) paid or incurred by the Buyer Indemnitees due to (i) any unpaid
sales taxes with respect to the Hotel for the period prior to the Closing, or
(ii) Seller's failure to pay in accordance with Section 9.3(d) hereof any sales
taxes applicable to the sale of the Personal Property. The provisions of this
Section 10.5 shall survive the Closing.
10.6 Use of Name. From and after the Closing, Buyer shall have the
right to use, subject to applicable license and franchise agreements, items of
inventory, FF&E, Operating Equipment, Operating Supplies and Personal Property
containing the name and/or the present logo of the Hotel in the operation of the
Hotel until any such item is required to be replaced in the ordinary course of
business.
10.7 Employees. Seller shall as of the Closing Date terminate the
employment of all individuals employed at or in connection with the Property. To
the extent applicable,
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<PAGE> 23
Seller shall comply fully with the Worker Adjustment and Retraining Notification
Act ("WARN Act") 29 U.S.C. 2101 et seq. and shall indemnify and hold Buyer
harmless from and against any and all claims of the employees of Seller or any
claims based on Seller's failure to comply with the WARN Act. Such indemnity
shall survive the Closing hereunder. Seller shall be solely responsible for any
liability for payment of all employees' wages, accrued vacation pay, sick leave,
bonuses, pension benefits and other benefits, including, without limitation, any
COBRA rights, earned by and due to or accrued to employees at the Property,
together with FICA, unemployment and other taxes and benefits due from any
employer of such employees.
ARTICLE XI
SELLER'S AND BUYER'S COVENANTS
11.1 Access. Between the execution of this Agreement and the
Closing Date, Seller shall give Buyer and its authorized representatives and
agents reasonable access to the Property and to all of Seller's books,
contracts, commitments, permits and records with respect thereto at such times
and in such manner as Seller shall reasonably approve and subject to Section
3.1(e) above, and to reasonable security precautions and limitations imposed by
Seller as necessary to maintain confidentiality. Seller will cause its
accountants to furnish such additional financial and operating data and other
information, within the possession and control of such accountants, as Buyer may
from time to time reasonably request. Buyer agrees to conduct any investigation
of the Hotel in a manner so as to minimize, to the greatest extent reasonable,
interference with the business or operations of the Property.
Buyer shall indemnify and defend Seller against and hold Seller
harmless from, any losses, damages, liability, costs and expenses (including,
without limitation, reasonable attorneys' fees) arising out of or relating to
any entry on the Property by Buyer, its representatives, agents, employees or
contractors in the course of performing any inspections or inquiries regarding
the Property prior to the Closing. The indemnification provisions of this
Section 11.1 shall survive the Closing or any termination of this Agreement and
shall be in addition to any liability under Section 2.2(b)(i).
11.2 Confidentiality. Between the execution of this Agreement and
the Closing, neither party shall directly or indirectly use or disclose any
confidential information concerning the Property, the other party, the other
party's assets or the transactions contemplated by this Agreement to any Person
except that such matters may be disclosed (a) to such party's directors,
officers, partners, and employees; (b) to such party's legal counsel,
accountants, engineers, architects, financial advisors and similar professionals
and consultants to the extent such party deems it reasonably necessary or
appropriate in connection with the evaluation of the transactions contemplated
hereby; and (c) by Seller to third parties having an ownership interest in or
relationship with the Hotel (such as existing mortgagees and equipment lessors)
to whom disclosure is necessary or desirable in order to facilitate the
consummation of the transactions contemplated hereby. For the purpose of this
Section 11.2, the term "confidential information" shall mean information which
is or becomes known to a party or its respective affiliates or to their
employees, former employees, consultants or others in a confidential
relationship with such
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<PAGE> 24
party, including, without limitation, pursuant to the terms of this Agreement,
and which relates to the Property, the transactions contemplated by this
Agreement or the business of either party; provided, however, that confidential
information shall not include (i) information which is or becomes generally
available to the public other than through a violation of law or obligation
hereunder, (ii) information which, in the opinion of counsel to either party,
such party is required by law, court order, governmental order or decree to
disclose, except that the other party may at its own expense appeal such court
order, (iii) information which was developed by such party on its own,
independent from the proprietary information made available to such party
hereunder, and (iv) information which was subsequently made available to such
party by a third party who was not violating the law or any obligation hereunder
in making such disclosure.
11.3 Further Assurances. Subject to the terms and conditions
hereof, each party agrees to use its best efforts to do, or cause to be done,
all things, not inconsistent with the terms of this Agreement, necessary,
proper, or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement as expeditiously as practicable,
including, without limitation, the performance of such further acts or the
execution and delivery of such additional instruments or documents, not
inconsistent with the terms of this Agreement, as any party may reasonably
request in order to carry out the purposes of this Agreement and the
transactions contemplated hereby, including, without limitation, in connection
with the transfer to Buyer of the Permits, the Contracts, the Service Contracts,
the Leases, the Equipment Leases and the Liquor Assets.
11.4 Marketing. Buyer and Seller acknowledge that Seller shall have
the right to list the Property with a broker, and market and accept any and all
backup offers to sell the Property during the Inspection Period; provided,
however, from and after the expiration of the Inspection Period, Seller shall
not otherwise solicit or make or accept any offers to sell the Property, engage
in any discussions or negotiations with any third party with respect to the sale
or other disposition of the Property, or enter into any contracts or agreements
(whether binding or not) regarding any disposition of the Property.
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<PAGE> 25
ARTICLE XII
MISCELLANEOUS
12.1 Indemnification. Each party (each, an "Indemnifying Party")
hereby agrees to indemnify the other party and its respective officers,
partners, directors, shareholders, affiliates and agents (the "Indemnified
Parties") and hold the Indemnified Parties harmless from and against any and all
damages, liabilities, losses, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) paid or incurred by the Indemnified
Parties due to any misrepresentations or breach of warranty or breach of
covenant made by the Indemnifying Party in this Agreement or in any document,
certificate, or exhibit given or delivered to the other party hereto pursuant to
or in connection with this Agreement, and, in the case of Seller, any action or
threatened action by any partner of any Seller relating to this Agreement and
the transactions contemplated herein. All of the representations and warranties
contained in this Agreement and all of the indemnification provisions of this
Section 12.1 shall survive the Closing (but only for a period of one (1) year
from the Closing Date) or any termination of this Agreement.
12.2 Notices. Except for the delivery of materials described in
Section 3.1, all notices, statements, demands, requirements or other
communications and documents ("Communications") required or permitted to be
given, served or delivered by either party or intended recipient under this
Agreement shall be in writing and shall be either delivered by hand or sent by
prepaid certified or registered mail (airmail in the case of all international
communications) with return receipt requested to the party or intended recipient
at its address stated below or sent by facsimile machine to the other at its
facsimile number stated below or to such other address or facsimile number as
either party may from time to time have notified the other party as being its
address or facsimile number for purposes of this Agreement to the exclusion of
all previously applicable addresses and facsimile numbers. Such Communications
shall be deemed to have been given, served or delivered:
(a) if delivered by hand, upon delivery;
(b) if sent by mail, four (4) days after the date of
mailing; or
(c) if sent by facsimile machine, one (1) hour after its
transmission if such time is during business hours in the place of its receipt
or, if it is not, on the opening of business on the next succeeding Business Day
in the place of its receipt, subject, if sent by facsimile machine transmission,
to its having in fact been received in legible form.
The addresses and facsimile numbers of the parties are as follows:
To Buyer: The Peregrine Real Estate Trust
1300 Ethan Way, Suite 200
Sacramento, California 95825-2211
Att'n: Mr. Roger Snell
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<PAGE> 26
Phone Number: (916) 929-8244
Facsimile Number: (916) 929-1122
with copies to:
The Peregrine Real Estate Trust
225 Bush Street, Suite 790
San Francisco, California 94104
Att'n: Mr. Paul Gradeff
Phone Number: (415) 288-6833
Facsimile Number: (415) 288-6829
Orrick, Herrington & Sutcliffe LLP
400 Sansome Street
San Francisco, California 94111
Att'n: Pamela H. Bennett, Esq.
Phone Number: (415) 773-5983
Facsimile Number: (415) 773-5759
To Seller: Pierre Nebout and Jeannette Nebout
120 Alhambra Hills Drive
Martinez, California 94553
with copies to:
Jim G. Price, Esq.
1855 Olympic Boulevard
Suite 210
Walnut Creek, California 94596
Phone Number: (510) 932-5872
or to such other address as either party may from time to time
specify in writing to the other party.
12.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California. The venue for
any legal proceeding arising out of this Agreement shall be Contra Costa County.
12.4 Interpretation of Agreement. The article, section and other
headings of this Agreement are for convenience of reference only and shall not
be construed to affect the meaning of any provision contained herein. Where the
context so requires, the use of the singular shall include the plural and vice
versa and the use of the masculine shall include the feminine and the neuter.
The parties acknowledge that, with respect to the transactions contemplated by
this Agreement, (a) each party and its attorneys have reviewed and revised this
Agreement and that the normal rule of construction to the effect that any
ambiguities are to be
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<PAGE> 27
resolved against the drafting party shall not be employed in the interpretation
of this Agreement or any amendments or Exhibits thereto and (b) each party has
relied solely on the advice of its own accounting, tax, legal and other
advisors. All dates and times referred to in this Agreement shall be on Pacific
Standard Time or Pacific Daylight Savings Time (as applicable).
12.5 Entire Agreement. The parties intend that the terms of this
Agreement, including the Exhibits hereto and the documents referred to herein,
shall be the final expression of their agreement with respect to the subject
matter hereof and may not be contradicted by evidence of any prior or
contemporaneous agreement. The parties further intend that this Agreement,
including the Exhibits hereto and the documents referred to herein, shall
constitute the complete and exclusive statement of its terms and that no
extrinsic evidence whatsoever may be introduced in any judicial, administrative,
or other legal proceeding involving this Agreement. This Agreement shall not be
binding until it is signed by both parties hereto.
12.6 Severability. If any provision of this Agreement, or the
application thereof to any Person, place, or circumstance, except for any item
which constitutes a material element of the consideration between the parties,
shall be held by a court of competent jurisdiction to be invalid, unenforceable,
or void, the remainder of this Agreement and such provisions as applied to other
Persons, places, and circumstances shall remain in full force and effect.
12.7 Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
12.8 Successors and Assigns. Buyer shall have the right to assign
all or any portion of its rights under this Agreement to any entity owned or
controlled by Buyer, or to designate any such affiliated entity as nominee to
take title to the Property by delivering written notice thereof to Seller and
Title Company; provided, however, that Buyer shall not be relieved of any of its
obligations under this Agreement as a result of any such assignment or
designation. Subject to the foregoing, this Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors,
heirs, administrators and assigns.
12.9 Brokers. Except as expressly provided to the contrary in this
Agreement, each party hereto shall pay its own expenses (including, without
limitation, attorneys' fees) incurred in connection with this Agreement and the
transactions contemplated hereby. Seller shall pay any and all broker's
commission or finder's fee and all costs associated therewith. In the event that
any broker or finder brings a claim for a commission or finder's fee based upon
any contact, with Seller, Seller shall defend Buyer from such claim, and shall
indemnify Buyer and hold Buyer harmless from any and all damages, liabilities,
losses, costs and expenses (including reasonable attorneys' fees and
disbursements) paid or incurred by Buyer in defending against the claim. The
provisions of this Section 12.9 shall survive the Closing or any termination of
this Agreement and shall be in addition to any liability under Section
2.2(b)(i).
12.10 Litigation. Seller agrees to indemnify and hold the Buyer
Indemnitees harmless from and against any and all damages, liabilities, losses,
costs and expenses (including,
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<PAGE> 28
without limitation, reasonable attorneys' fees and expenses) paid or incurred by
the Buyer Indemnitees due to those litigation matters set forth on Schedule 1
attached hereto (the "Litigation Matters").
12.11 Attorneys' Fees. In the event either party hereto fails to
perform any of its obligations under this Agreement or in the event any dispute
arises between the parties hereto concerning the meaning or interpretation of
any provision of this Agreement, the defaulting party or the party not
prevailing in such dispute, as the case may be, shall pay any and all costs and
expenses incurred by the other party on account of such default and/or in
enforcing or establishing its rights hereunder, including, without limitation,
court costs and reasonable attorneys' fees and disbursements.
12.12 Arbitration of Disputes. Any dispute arising out of this
Agreement shall be decided by binding arbitration pursuant to the rules of the
American Arbitration Association, and not by court action, except as otherwise
provided in this Section or as allowed by California law for judicial review of
arbitration proceedings. Judgment on the arbitration award may be entered in any
court having jurisdiction. The parties may conduct discovery in accordance with
Code of Civil procedure Section 1283.05. The following matters are excluded from
arbitration:
(a) a judicial or nonjudicial foreclosure of a deed of
trust, mortgage, or real property sales contract as defined in Civil Code
Section 2985;
(b) an unlawful detainer action; or
(c) any matter within the jurisdiction of a probate court.
This provision shall not prohibit the parties from the filing a
judicial action to enable the recording of a notice of pending action for order
of attachment, receivership, injunction, or other provisional remedy.
"NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE
ANY DISPUTE ARISING OUT OF THE MATTER INCLUDED IN THE `ARBITRATION OF DISPUTES'
PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU
ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A
COURT OR BY JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR
JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY
INCLUDED IN THE `ARBITRATION OF DISPUTES' PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO
THIS ARBITRATION PROVISION IS VOLUNTARY."
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"WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT
DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE `ARBITRATION OF DISPUTES'
PROVISION TO NEUTRAL ARBITRATION."
12.13 Waiver of Compliance. Any failure of Seller, on the one hand,
or Buyer, on the other, to comply with any provision of this Agreement may be
expressly waived in writing by Buyer or Seller, respectively, but such waiver or
failure to insist upon strict compliance with such provision shall not operate
as a waiver of, or estoppel with respect to, any subsequent or other failure. No
failure to exercise and no delay in exercising any right, remedy, or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, or power hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, or power provided
herein or by law or in equity. The waiver by any party of the time for
performance of any act or condition hereunder does not constitute a waiver of
the act or condition itself.
12.14 1031 Exchange. Buyer agrees, provided that such exchange
results in no additional or potential cost, liability, obligation or expense to
Buyer, to accommodate Seller as set forth below in effectuating a like-kind
exchange of Property pursuant to Section 1031 of the Internal Revenue Code of
1986, as amended. If, prior to the Closing, Seller has located a property
suitable for a like-kind exchange (the "Exchange Property"), Buyer agrees to
cooperate with Seller by executing reasonable documentation to accommodate
Seller in effectuating such like-kind exchange (the "Exchange") through either
(I) a "Type I Exchange" whereby Seller causes the owner(s) of the Exchange
Property to acquire the Property and convey it to Buyer or (ii) through the use
of an accommodating party who acquires the Exchange Property for and conveys it
to Seller. In no event shall Buyer be required to acquire fee title to any such
Exchange Property or acquire any beneficial or legal interest in any Exchange
Property, whether temporarily or otherwise. The accomplishment of the Exchange
shall not be a condition to Seller's obligations hereunder, and Seller's failure
to locate an Exchange Property or to consummate the Exchange for any reason
shall in no way relieve Seller of its obligation to timely sell the Property to
Buyer pursuant to the terms and provisions of this Agreement or otherwise
relieve Seller of any obligations under this Agreement or any document or
instrument to be delivered to Buyer in accordance with the terms hereof,
including, without limitation, obligations under the closing documents described
in Section 9.2 of the Agreement. Buyer shall have no obligation to make any
representation or warranty with respect to the Exchange Property or the
Exchange. Buyer shall have the right to review and approve any and all documents
to be executed by Buyer in connection with the Exchange. Such documents shall
provide, without limitation, that notwithstanding the consummation of the
Exchange, Seller shall remain fully liable for all of its obligations under this
Agreement or any document or instrument to be executed and delivered to Buyer in
accordance with the terms of the Agreement, including, without limitation, the
closing documents described in Section 9.2 of the Agreement. All such closing
documents shall run directly between Buyer and Seller. Seller shall indemnify
Buyer and hold Buyer harmless from and against any and all claims, damages,
losses, liabilities, costs and expenses, including, without limitation,
reasonable attorneys' fees and costs, arising out of or in
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<PAGE> 30
any way connected with the Exchange Property and/or the Exchange. The
obligations of Seller under this paragraph shall survive the Closing.
12.15 Transfer of Liquor Assets.
(a) Application for Transfer. Buyer shall promptly after the
execution of this Agreement cause to be filed with the California Department of
Alcoholic Beverage Control (the "Department") an application for the transfer of
the Liquor Licenses to Buyer and shall prosecute such application with due
diligence, including supplying to the Department promptly all information
required or reasonably requested by the Department. Buyer shall pay all fees
required by the Department in connection with such application for the transfer
of the Liquor Licenses.
(b) Liquor Escrow. Prior to applying to the Department
pursuant to Section 12.15(a) above, the parties shall open an escrow (the
"Liquor Escrow") with Title Company, as escrow holder, in accordance with the
provisions of the Alcoholic Beverage Control Act and Title 4, California Code of
Regulations, to provide for the transfer of the Liquor Assets through the Liquor
Escrow, following approval by the Department of Buyer's application for the
transfer of the Liquor Licenses.
(c) Seller's Cooperation. Seller agrees, both in connection
with the application for the transfer of the Liquor Licenses and in connection
with any application for a temporary permit as described in Section 12.15(e)
below, to cooperate with Buyer in supplying information required or reasonably
requested by the Department and executing any necessary documents for filing
with the Department or as otherwise required to be executed or recorded by the
Department.
(d) Allocation of Purchase Price to Liquor Assets; Closing;
Temporary Permit. The parties shall allocate Ten Thousand Dollars ($10,000) of
the Purchase Price to the Liquor Assets, which amount shall be paid into the
Liquor Escrow from the Purchase Price due Seller at Closing. On or prior to the
Closing Date, Seller shall deposit into the Liquor Escrow a liquor escrow bill
of sale conveying the Liquor Assets to Buyer in the form of attached Exhibit R,
which bill of sale shall be delivered to Buyer upon close of the Liquor Escrow.
(e) In the event Buyer obtains the Temporary Liquor Licenses
Permit on or before Closing, Buyer shall have the right, on and after the
Closing Date, to use the Liquor Assets pending the closing of the Liquor Escrow,
and at the Closing the portion of the Purchase Price allocated to the Liquor
Assets shall be transferred by the Title Company to the Liquor Escrow. Buyer and
Seller shall instruct the escrow holder under the Liquor Escrow to make payment
to creditors for any outstanding amounts owed for the Liquor Assets and to
invest all funds held in the Liquor Escrow as Seller shall direct and to pay all
interest earned thereon, together with any portion thereof not required to
satisfy the claims of creditors of the Hotel with respect to the Liquor Assets
whose claims accrued prior to the Closing Date, to Seller upon close of the
Liquor Escrow.
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<PAGE> 31
(f) Failure of Approval; Indemnity. In the event that the
Department shall have failed to approve the transfer of the Liquor Licenses to
Buyer and the Liquor Escrow shall not have been closed on or before December 31,
1998, the Liquor Escrow shall be terminated and the escrow holder under the
Liquor Escrow shall disburse the amount deposited in the Liquor Escrow and all
accrued interest thereon to Seller. Buyer shall give to the escrow holder such
appropriate instructions as may be necessary to implement the foregoing
provisions. Buyer shall then comply with all laws and requirements regarding the
Liquor Assets. Buyer shall indemnify Seller against and hold Seller harmless
from any failure by Buyer to comply with all applicable laws and regulations
concerning the sale of alcoholic beverages.
29
<PAGE> 32
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
Seller: THE PIERRE NEBOUT AND JEANNETTE NEBOUT
INTER VIVOS REVOCABLE TRUST dated 7/20/95
-----------------------------------------
Jeannette Nebout, Trustee
-----------------------------------------
Pierre Nebout, Trustee
Buyer: THE PEREGRINE REAL ESTATE TRUST,
a California business trust
By: ______________________________________________
Its: _____________________________________________
30
<PAGE> 33
LIST OF EXHIBITS AND SCHEDULES
A - Real property
B - Contracts
C - Equipment Leases
D - FF&E
E - Insurance Policies
F - Intangibles
G - Leases
H - Permits
I - Personal Property
J - Plans and Specifications
K - Service Contracts
L - Deed
M - Assignment and Assumption of Contracts
N - Bill of Sale -- Personal Property
O - FIRPTA Affidavit
P - Certificate of Seller
Q - Certificate of Buyer
R - Liquor Assets Bill of Sale
Schedule 1 -Litigation
Schedule 2-Complimentary Certificates
31
<PAGE> 1
EXHIBIT 2.2
FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE DATED MARCH 23, 1998 BY AND
BETWEEN JEANNETTE NEBOUT AND PIERRE NEBOUT, AS TRUSTEES OF THE PIERRE NEBOUT AND
JEANNETTE NEBOUT INTER VIVOS REVOCABLE TRUST DATED JULY 20, 1995, AS SELLER AND
THE PEREGRINE REAL ESTATE TRUST AS BUYER
<PAGE> 2
May 18, 1998
VIA FACSIMILE AND FEDERAL EXPRESS
Pierre Nebout and Jeannette Nebout
120 Alhambra Hills Drive
Martinez, California 94596
Law Offices of Jim G. Price
1855 Olympic Boulevard, Suite 20
Walnut Creek, California 94596
Attention: Jim G. Price, Esq.
Re: Agreement of Purchase and Sale/Holiday Inn, Concord,
California
To Mr. and Mrs. Nebout and Law Offices of Jim Price:
Confirming our conversations, pursuant to that certain Agreement of
Purchase and Sale dated as of March 23, 1998 between The Peregrine Real Estate
Trust ("Purchaser") and Jeannette Nebout and Pierre Nebout, as Trustees of the
Pierre Nebout and Jeannette Nebout Inter Vivos Revocable Trust dated 7/20/95
("Seller") (the "Agreement"), Purchaser and Seller hereby agree as follows:
1. Section 2.2(a) of the Agreement is hereby amended to change
the Purchase Price of the Property from Nine Million Six Hundred Thousand
Dollars ($9,600,000) to Nine Million Dollars ($9,000,000). Whenever the
capitalized term "Purchase Price" appears in the Agreement, it shall refer to
the amount of Nine Million Dollars ($9,000,000).
2. Effective as of the date of this letter agreement, except as
set forth in the next sentence, the Inspection Period referred to in Section
1.12 and Article 3 of the Agreement shall be extended up to May 22, 1998 at 6:00
p.m. The Inspection Period shall be extended up to June 9, 1998 at 6:00 p.m. for
purposes of Purchaser's reviewing and approving, in Purchaser's sole discretion,
the environmental condition of the Property and such additional review and
approval reasonably related thereto.
3. Without waiving or limiting Purchaser's rights pursuant to the
other terms and conditions of the Agreement, Purchaser hereby waives the
conditions set forth in Section 4.1(k) and 4.1(l) of the Agreement.
1
<PAGE> 3
Pierre Nebout and Jeannette Nebout
Jim G. Price
May 18, 1998
Page Two
4. Effective as of the date of this letter agreement, the Closing
Date referred to in Section 9.1 of the Agreement shall be June 17, 1998.
5. In the event that Purchaser does not elect to proceed with the
purchase of the Property in accordance with the terms of the Agreement, as
amended by this letter agreement, the Deposit and any accrued interest thereon,
shall be promptly returned to Purchaser.
Please reconfirm Seller's agreement to the terms of this letter
agreement by executing a copy hereof and return the original via overnight
courier and a copy via facsimile to me and a copy via facsimile to Pamela
Bennett.
Except as modified hereby, the Agreement shall remain in full force
and effect. All capitalized terms used herein which have defined meanings in the
Agreement shall have the same defined meanings herein. This letter agreement may
be executed in counterparts.
2
<PAGE> 4
Pierre Nebout and Jeannette Nebout
Jim G. Price
May 18, 1998
Page Three
We sincerely appreciate your cooperation in this matter.
Very truly yours,
THE PEREGRINE REAL ESTATE TRUST
By:______________________________________
Its:_____________________________________
cc: Pamela H. Bennett, Esq.
We agree to the terms and conditions of this letter agreement.
Pierre Nebout and Jeannette Nebout,
as Trustees of the Pierre Nebout and Jeannette Nebout
Inter Vivos Revocable Trust dated 7/20/95
By:______________________________________
By:______________________________________
3
<PAGE> 1
EXHIBIT 2.3
SECOND AMENDMENT TO AGREEMENT OF PURCHASE AND SALE DATED MARCH 23, 1998 BY AND
BETWEEN JEANNETTE NEBOUT AND PIERRE NEBOUT, AS TRUSTEES OF THE PIERRE NEBOUT AND
JEANNETTE NEBOUT INTER VIVOS REVOCABLE TRUST DATED JULY 20, 1995, AS SELLER AND
THE PEREGRINE REAL ESTATE TRUST AS BUYER
<PAGE> 2
June 22, 1998
The Peregrine Real Estate Trust
1300 Ethan Way, Suite 200
Sacramento, CA 95825-2211
Attn: Mr. Roger Snell
Pamela II. Bennett, Esq.
Orrick, Herrington & Sutcliffe LLP
400 Sansome Street
San Francisco, CA 94111
Re: Agreement of Purchase and Sale/Holiday Inn, Concord,
California
To Peregrine Real Estate Trust and Ms. Bennett.
Confirming our conversations, pursuant to that certain Agreement of
Purchase and Sale dated as of March 23, 1998 between The Peregrine Real Estate
Trust ("Purchaser") and Jeannette Nebout and Pierre Nebout, as Trustees of the
Pierre Nebout and Jeannette Nebout Inter Vivos Revocable Trust dated 7/20/95
("Seller"), as amended by that certain side letter agreement dated May 18, 1998
(collectively, the "Agreement"), Purchaser and Seller hereby agree as follows:
1. Effective as of the date of this letter agreement, the parties
hereto elect to reinstate the Agreement as modified by this letter
agreement.
2. Section 12.15 of the Agreement shall be amended as follows:
(a) All references in Section 12.15 to "Title Company" shall
be amended to refer to "Bank of San Francisco, 550 Montgomery
Street, 10th Floor, San Francisco, California 94111."
(b) Section 12.15 (d) shall be amended by deleting the
reference to "Ten Thousand Dollars ($10,000)" and replacing with
"Twenty Thousand Dollars ($20,000").
3. Notwithstanding the 10 day provision contained therein,
effective as of the date of this agreement, the closing date
referred to in Section 9.1 of the Agreement shall be July 1, 1998.
4. Buyer notifies Seller that all of the conditions contained in
3.1 of the above referenced Agreement of Purchase have been
fulfilled and said conditions are waived.
1
<PAGE> 3
The Peregrine Real Estate Trust
Pamela II. Bennett, Esq
June 22, 1998
Page Two
5. In the event that Purchaser does not elect to proceed with the
purchase of the Property in accordance with the terms of the
Agreement, as amended by this letter agreement, the Deposit and any
accrued interest thereon, shall be promptly returned to Purchaser.
Please confirm Buyer's agreement to the terms of this letter
agreement by executing a copy hereof and return the original via overnight
courier and a copy via facsimile to Jim G. Price.
Except as modified hereby, the Agreement shall remain in full force
and effect. All capitalized terms used herein, which have defined meanings in
the Agreement, shall have the same defined meanings herein. This letter
agreement may be executed in counterparts.
We sincerely appreciate your cooperation in this matter.
Very truly yours,
PIERRE NEBOUT AND JEANNETTE
NEBOUT, AS TRUSTEES OF THE PIERRE
NEBOUT AND JEANNETTE NEBOUT
INTER VIVOS REVOCABLE TRUST
DATED 7/20/95
PIERRE NEBOUT
JEANNETTE NEBOUT
cc: Jim G. Price, Esq.
We agree to the terms and conditions of this letter agreement.
THE PEREGRINE REAL ESTATE TRUST
By:______________________________________
ITS:_____________________________________
2
<PAGE> 1
EXHIBIT 10.17
THIRD AMENDMENT TO THE SECOND AMENDED AND RESTATED NOTE AGREEMENT DATED MAY 1,
1998, BY AND AMONG THE PEREGRINE REAL ESTATE TRUST, THE NOTEHOLDERS NAMED
THEREIN, AND THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AS AGENT FOR THE
NOTEHOLDERS
<PAGE> 2
THIRD AMENDMENT TO SECOND AMENDED AND RESTATED
NOTE AGREEMENT
THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED NOTE AGREEMENT
(this "Amendment"), dated as of May 1, 1998, is made by and among The Peregrine
Real Estate Trust, formerly known as Commonwealth Equity Trust (the "Company");
each of the noteholders party to the Senior Credit Agreement (as defined below)
(individually, a "Noteholder" and, collectively, the "Noteholders"); and The
Prudential Insurance Company of America, as Agent for the Noteholders (in such
capacity, together with its successors in such capacity, the "Agent").
R E C I T A L S
Whereas, the Company, the Agent and the Noteholders are parties to
the Second Amended and Restated Note Agreement dated as of September 27, 1994
(as amended, the "Senior Credit Agreement");
Whereas, the Senior Credit Agreement permits the Company to incur
certain additional indebtedness, subject to the terms and conditions of the
Senior Credit Agreement, including the New Credit Line;
Whereas, it was not the intent of the Company and the Noteholders to
require that the proceeds of the New Credit Line be used to prepay the Notes;
Whereas, the Company and the Noteholders wish to make a
clarification change to the Senior Credit Agreement;
The Company, the Agent and the Majority Noteholders agree as
follows:
1. Defined Terms. Capitalized terms used but not defined in this
Amendment shall have the meanings assigned to such terms in the Senior Credit
Agreement.
2. Amendment to Senior Credit Agreement. Section 2.4(b) of the
Senior Credit Agreement is hereby amended by adding the parenthetical "(other
than the New Credit Line)" in clause (D) of such section, immediately following
the word "Collateral".
3. Representations and Warranties. The Company represents and
warrants to the Majority Noteholders that (a) the execution, delivery and
performance of this Amendment have been duly authorized by all necessary
corporate action by the Company; (b) this Amendment constitutes the legal, valid
and binding obligation of the Company; and (c) prior to and after giving effect
to this Amendment no Default or Event of Default shall have occurred or be
continuing.
1
<PAGE> 3
4. Effect of Amendment. The Senior Credit Agreement is modified only
by the express provisions of this Amendment, and shall otherwise remain in full
force and effect and is hereby ratified and confirmed by the Company in all
respects.
5. Entire Agreement. This Amendment constitutes the complete
agreement of the parties with respect to the subject matters referred to in this
Amendment and supersedes all prior or contemporaneous negotiations, promises,
covenants, agreements or representations of every nature whatsoever with respect
to such subject matters, all of which become merged and finally integrated into
this Amendment.
6. Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties to this Amendment and their respective
successors and permitted assigns.
7. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AMENDMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA. EACH OF THE PARTIES TO THIS AMENDMENT HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL
DISTRICT OF CALIFORNIA AND OF ANY CALIFORNIA STATE COURT SITTING IN LOS ANGELES,
CALIFORNIA, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING
TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AMENDMENT. EACH OF
THE PARTIES TO THIS AMENDMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
8. WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AMENDMENT
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
9. Counterparts. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties to this Amendment may execute this Amendment
by signing any such counterpart.
2
<PAGE> 4
IN WITNESS WHEREOF, the parties have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
COMPANY
THE PEREGRINE REAL ESTATE TRUST,
(fka Commonwealth Equity Trust)
By: ______________________________________
Name:
Title:
AGENT
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, as Agent
By: ______________________________________
Name:
Title:
NOTEHOLDERS
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: ______________________________________
Name:
Title:
3
<PAGE> 5
GATEWAY RECOVERY TRUST
By: The Prudential Insurance Company of
America, Asset Manager
By: ______________________________________
Name:
Title:
WEYERHAEUSER COMPANY MASTER RETIREMENT
TRUST
By: TCW Special Credits,
Its Investment Manager
By: TCW Asset Management Company, its
Managing General Partner
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
4
<PAGE> 6
TCW SPECIAL CREDITS FUND IV
By: TCW Special Credits,
Its General Partner
By: TCW Asset Management Company, its
Managing General Partner
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
TCW SPECIAL CREDITS PLUS FUND
By: TCW Special Credits,
Its General Partner
By: TCW Asset Management Company, its
Managing General Partner
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
5
<PAGE> 7
TCW SPECIAL CREDITS TRUST IV
By: Trust Company of the West, Trustee
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
TCW SPECIAL CREDITS TRUST IVA
By: Trust Company of the West, Trustee
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
6
<PAGE> 8
OCM REAL ESTATE OPPORTUNITIES
FUND A, L.P.
By: Oaktree Capital Management, LLC, Its
General Partner
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
OCM REAL ESTATE OPPORTUNITIES
FUND B, L.P.
By: Oaktree Capital Management, LLC, Its
General Partner
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
7
<PAGE> 9
WEYERHAEUSER REAL ESTATE OPPORTUNITIES
SEPARATE ACCOUNT
By: Oaktree Capital Management, LLC,
Its Investment Manager
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
8
<PAGE> 1
EXHIBIT 10.18
FOURTH AMENDMENT TO THE SECOND AMENDED AND RESTATED NOTE AGREEMENT DATED JUNE
30, 1998, BY AND AMONG THE PEREGRINE REAL ESTATE TRUST, THE NOTEHOLDERS NAMED
THEREIN, AND THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AS AGENT FOR THE
NOTEHOLDERS
<PAGE> 2
FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED
NOTE AGREEMENT AND CONSENT AND WAIVER
THIS FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED NOTE AGREEMENT
AND CONSENT AND WAIVER (this "Amendment"), dated as of June 30, 1998, is made by
and among The Peregrine Real Estate Trust, formerly known as Commonwealth Equity
Trust (the "Company"); each of the noteholders party to the Senior Credit
Agreement (as defined below) (individually, a "Noteholder" and, collectively,
the "Noteholders"); and The Prudential Insurance Company of America, as Agent
for the Noteholders (in such capacity, together with its successors in such
capacity, the "Agent").
R E C I T A L S
WHEREAS, the Company, the Agent and the Noteholders are parties to
the Second Amended and Restated Note Agreement dated as of September 27, 1994
(as amended, the "Senior Credit Agreement");
WHEREAS, the Company and Fleet Capital Corporation ("Fleet") are
parties to the Loan and Security Agreement dated as of December 4, 1997 which
constitutes the current "New Credit Line" under the Senior Credit Agreement;
WHEREAS, the Company wishes to amend the New Credit Line to increase
the commitment thereunder from $20,000,000 to $27,500,000;
WHEREAS, the Company wishes to use proceeds of the New Credit Line
to purchase the hotel property described in Exhibit A attached hereto (the
"Acquired Property") and grant a lien on the Acquired Property to Fleet to
secure the New Credit Line;
WHEREAS, Section 2.10 of the Senior Credit Agreement prohibits the
Company from using proceeds from the New Credit Line to purchase real property
and Section 1.3 of the Senior Credit Agreement precludes property purchased with
proceeds of the New Credit Line from constituting After Acquired Property;
WHEREAS, the Company has requested that the Agent and the
Noteholders (i) consent to the increase in the New Credit Line, the use of
proceeds of the New Credit Line to purchase the Acquired Property and the
granting of a lien on the Acquired Property to Fleet, (ii) waive the application
of Section 2.10 and Section 1.3 of the Senior Credit Agreement to allow the
Company's use of proceeds of the New Credit Line to purchase the Acquired
Property, the granting of a lien on the Acquired Property to Fleet and the
characterization of the Acquired Property as After Acquired Property and (iii)
amend the Senior Credit Agreement to reflect the foregoing; and
1
<PAGE> 3
WHEREAS, the Agent and the Noteholders are willing to grant such
consent and agree to such waivers and amendments on the terms and conditions set
forth herein.
NOW, THEREFOR, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company, the Agent and the
Noteholders agree as follows:
1. Defined Terms. Capitalized terms used but not defined in this
Amendment shall have the meanings assigned to such terms in the Senior Credit
Agreement.
2. Amendment to Senior Credit Agreement. Section 1.60 of the
Senior Credit Agreement is hereby amended to read in its entirety as follows:
1.60 "New Credit Line" means the line of credit provided to
the Company pursuant to the Loan and Security Agreement dated as of
December 4, 1997 between the Company and Fleet Financial Corporation, as
the same may be amended, modified, renewed, refunded, replaced or
refinanced from time to time, in whole or in part; provided, that the
principal amount outstanding thereunder does not exceed $27,500,000.
3. Consent and Agreement. The Agent and the Noteholders hereby
consent to (i) the amendment to the New Credit Line increasing the amount of the
New Credit Line to $27,500,000, (ii) the Company's purchase of the Acquired
Property, (iii) the Company's granting of a lien on the Acquired Property to
Fleet and (iv) the Company's use of up to $9,250,000 of the proceeds of the New
Credit Line to purchase the Acquired Property. In addition, the Agent and the
Noteholders hereby agree that the Acquired Property shall constitute After
Acquired Property; provided that, subject to the prior consent of Fleet or such
other provider of the New Credit Line, in the event the Acquired Property ceases
to secure the New Credit Line or any refinancing of any portion of the New
Credit Line or the refinancing of the Acquired Property, the Company, upon the
written request of Agent, shall grant a lien on the Acquired Property to the
Agent for the benefit of the Agent and the Noteholders.
2
<PAGE> 4
4. Waiver. The Agent and the Noteholders hereby waive the
application of the provisions of Section 2.10 of the Senior Credit Agreement to
the extent such section would preclude the Company from using proceeds of the
New Credit Line to consummate the purchase of the Acquired Property; provided
that such waiver shall apply solely with respect to the use of up to $9,250,000
of proceeds of the New Credit Line. In addition, the Agent and the Noteholders
hereby waive the provisions of Section 1.3 to the extent such section precludes
the Acquired Property from constituting After Acquired Property as result of the
Acquired Property being purchased with proceeds of the New Credit Line.
5. Representations and Warranties. The Company represents and
warrants to the Agent and the Noteholders that (a) the execution, delivery and
performance of this Amendment have been duly authorized by all necessary
corporate action on behalf of the Company, (b) this Amendment constitutes the
legal, valid and binding obligation of the Company and (c) prior to and after
giving effect to this Amendment, no Default or Event of Default has or shall
have occurred and be continuing.
6. Effect of Amendment. The consent and agreement set forth in
Section 3 of this Amendment and the waiver set forth in Section 4 of this
Amendment are limited in effect, shall apply only as expressly set forth in this
Amendment and shall not constitute a waiver of any other provision of the Senior
Credit Agreement. The Senior Credit Agreement is modified only by the express
provisions of this Amendment, and shall otherwise remain in full force and
effect and is hereby ratified and confirmed by the Company in all respects.
7. Entire Agreement. This Amendment constitutes the complete
agreement of the parties with respect to the subject matters referred to in this
Amendment and supersedes all prior or contemporaneous negotiations, promises,
covenants, agreements or representations of every nature whatsoever with respect
to such subject matters, all of which become merged and finally integrated into
this Amendment.
8. Additional Assurances. The parties agree that they shall take
such actions and execute and deliver such documents as are reasonably required
to effectuate the purposes of this Amendment, including, without limitation, the
execution and delivery by the Agent on behalf of itself and the Noteholders of a
subordination agreement in favor of Fleet with respect to the Acquired Property
and amendments to the existing subordination agreements between the Agent and
Fleet to increase the amount set forth therein from $20,000,000 to $27,500,000.
9. Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties to this Amendment and their respective
successors and permitted assigns.
3
<PAGE> 5
10. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AMENDMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA. EACH OF THE PARTIES TO THIS AMENDMENT HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL
DISTRICT OF CALIFORNIA AND OF ANY CALIFORNIA STATE COURT SITTING IN LOS ANGELES,
CALIFORNIA, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING
TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AMENDMENT. EACH OF
THE PARTIES TO THIS AMENDMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
11. WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AMENDMENT
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12. Counterparts. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties to this Amendment may execute this Amendment
by signing any such counterpart.
4
<PAGE> 6
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
and delivered as of the day and year first above written.
COMPANY
THE PEREGRINE REAL ESTATE TRUST,
(fka Commonwealth Equity Trust)
By: ______________________________________
Name:
Title:
AGENT
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, as Agent
By: ______________________________________
Name:
Title:
NOTEHOLDERS
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: ______________________________________
Name:
Title:
5
<PAGE> 7
GATEWAY RECOVERY TRUST
By: The Prudential Insurance Company of
America, Asset Manager
By: ______________________________________
Name:
Title:
WEYERHAEUSER COMPANY MASTER RETIREMENT
TRUST
By: TCW Special Credits,
Its Investment Manager
By: TCW Asset Management Company, its
Managing General Partner
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
6
<PAGE> 8
TCW SPECIAL CREDITS FUND IV
By: TCW Special Credits,
Its General Partner
By: TCW Asset Management Company, its
Managing General Partner
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
TCW SPECIAL CREDITS PLUS FUND
By: TCW Special Credits,
Its General Partner
By: TCW Asset Management Company, its
Managing General Partner
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
7
<PAGE> 9
TCW SPECIAL CREDITS TRUST IV
By: Trust Company of the West, Trustee
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
TCW SPECIAL CREDITS TRUST IVA
By: Trust Company of the West, Trustee
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
8
<PAGE> 10
OCM REAL ESTATE OPPORTUNITIES
FUND A, L.P.
By: Oaktree Capital Management, LLC, Its
General Partner
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
OCM REAL ESTATE OPPORTUNITIES
FUND B, L.P.
By: Oaktree Capital Management, LLC,
Its General Partner
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
9
<PAGE> 11
WEYERHAEUSER REAL ESTATE OPPORTUNITIES
SEPARATE ACCOUNT
By: Oaktree Capital Management, LLC,
Its Investment Manager
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
10
<PAGE> 12
EXHIBIT A
DESCRIPTION OF ACQUIRED PROPERTY
Real Property in the City of Concord, County of Contra Costa, State of
California, described as follows:
Parcel 2, as shown on the Parcel Map filed June 27, 1967, Book 1 of Parcel Maps,
Page 15, Contra Costa County Records.
A.P. No.: 126-325-002
11
