Utah-St. George-1450 South Hilton Drive Real Estate Purchase Contract - East Bay Lodging Associates Ltd., Wade Cook Seminars Inc. and St. George Inn LC
To: Wade R. Cook
From: Glen Overton
Subject: Property #UT-040, St. George, Utah
Date: August 15, 1997
HILTON INN
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Location: 1450 South Hilton Drive
St. George, Utah 84770
Property sets on approximately 5.5 acres
Description: Existing 100 units, 2-story inn with attached (and leased)
Tony Romas Restaurant and service station site. The U-shaped
building surrounds a courtyard with an outdoor pool and hot
tub.
Time Line: Offer to be made 8/14/97
Projected closing, October, 1997
Hotel Cost: Purchase offer is for $4,050,000 ($3.8 mil hotel & $250k
service station) Y.E. 1996 NOI of $518,000 = a hotel cap
rate of 13.63
Equity
Distribution: East Bay Lodging Associates, Ltd to receive 50% ownership
Wade Cook Seminars, Inc. to receive 50% ownership.
Investment: East Bay Lodging Associates, Ltd to invest $500,000 cash as
down payment plus given credit for locating and organizing
purchase, overseeing ownership transfer, and secure debt
financing for $3,050,000.
Wade Cook Seminars, Inc. to invest $800,000 cash, $500,000
as down payment and $300,000 for capital renovation as
required by franchise.
Cook Payments: $250,000 due August 28, 1997
$250,000 due September 15, 1997
$250,000 due October 15, 1997
$50,000 due November 15, 1997
Agreement Accepted by
/s/ Wade Cook 8/22/97
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Wade Cook Seminars, Inc. by Date
Wade Cook, ---------
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COMMERCIAL - INDUSTRIAL - INVESTMENT
REAL ESTATE PURCHASE CONTRACT
This is a legally binding Contract. It has been prepared by the Utah
Association of REALTORS(R) for the use of its members only, in their
transactions with clients and customers. Parties to this Contract may agree
in writing to alter or delete provisions of this Contract. Seek advice from
your attorney or tax advisor before entering into a binding Contract.
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EARNEST MONEY RECEIPT
The Buyer, Glen Overton/East Bay Lodging, offers to purchase the Property
described below and delivers as Earnest Money Deposit $500.00 in the form of a
check to: Associated Title Company.
[ ] The Brokerage, to be deposited within three business days after Acceptance
of this Offer to Purchase by all parties.
[X] The Title/Escrow Company identified below.
Broker or Title Escrow Company: Associated Title Company
Address: -------------------------------
Received by: Mary Lou Webster on ---------- Phone Number: 801-383-0909
(If Title/Escrow Company) for deposit no later than -----------------
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OFFER TO PURCHASE
1. PROPERTY: The Hilton Inn & Service Station, approximately 6 acres.
Exhibit A attached.
Address: 1450 Hilton Drive, City of St. George, County of Washington,
State of Utah
For legal description, see: [ ] Attached Addendum #_______. [ ]
Preliminary title report when available as provided below.
1.1 INCLUDED ITEMS. Unless included herein, this sale shall include all
fixtures presently attached to the Property. The following personal
property shall also be included in this sale and conveyed under
separate Bill of Sale with warranties as to title: All.
1.2 EXCLUDED ITEMS. These items are excluded from this sale: None.
2. PURCHASE PRICE AND FINANCING. Buyer agrees to pay for the Property as
follows:
$500,000 Earnest Money Deposit
$--------- Loan Proceeds:
[] Representing the liability to be assumed by Buyer under an existing
assumable loan ( with without Seller being released of liability) in
this approximate amount with Buyer Seller agreeing to pay any loan
transfer and assumption fees. Any [illegible] differences between the
approximate balance of the loan shown above and the actual balance at
Closing shall be then adjusted in cash other.
[] From new institutional financing on terms no less favorable to the
Buyer than the following: --------- (interest rate for first period
prior to adjustment, if any): ----------- (amortization period):
----------(term). Other than these, the loan terms shall be the best
obtainable under the loan for which the Buyer applies below.
[] From Seller-held financing, as described in the attached Seller
Financing Addendum.
$---------- Other: -----------------------
$ 3,500,000 Balance of purchase price in cash at closing
$ 4,050,000 TOTAL PURCHASE PRICE
3. CLOSING. This transaction shall be closed on January 2, 1998. Closing shall
occur when: (a) Buyer and Seller have signed and delivered to each other
(or to the escrow/title company), all documents required by this Contract,
by the lender, by written escrow instructions signed by the Buyer and the
Seller, and by applicable law; (b) the monies required to be paid under
these documents have been delivered to the escrow/title company in the form
of collected or cleared funds; and (c) the deed which the Seller has agreed
to deliver under Section 6 has been recorded. Seller and Buyer shall each
pay one-half of the escrow Closing fee, unless otherwise agreed by the
parties in writing. Taxes and assessments for the current year, rents, and
interest on assumed obligations shall be prorated as set forth in this
Section. All deposits on tenancies shall be transferred to Buyer at
Closing. Prorations set forth in this Section shall be made as of the date
of Closing: [X] date of possession; [ ] other.
4. POSSESSION. Seller shall deliver possession to Buyer by 11:59 p.m., October
1, 1997.
5. CONFIRMATION OF AGENCY DISCLOSURE. At the signing of this Contract the
Listing Agent, Kimball Investment Company, represents [X] Seller [ ] Buyer,
and the Selling Agent (None) represents Seller Buyer. Buyer and Seller
confirm that prior to signing this Contract written disclosure of the
agency relationship was provided to him/her. ( ) Buyer's initials ( )
Seller's initials. A brokerage commission equal to 1% of the purchase price
shall be paid by Seller in cash at closing to Kimball Investment Company.
6. TITLE TO PROPERTY AND TITLE INSURANCE. (a) Seller has, or shall have at
Closing, fee title to the Property and agrees to convey such title to Buyer
by [ ] general [X] special warranty deed, free of financial encumbrances as
warranted under Section 10 (?); (b) Seller agrees to pay for, and furnish
Buyer at Closing with a current standard form Owner's policy of title
insurance in the amount of the Total Purchase Price; (c) the title policy
shall conform with Seller's obligations under Subsections (a) and (b).
Unless otherwise agreed under Section 8.4, the commitment shall conform
with the title insurance commitment provided under Section 7.1.
[X] The Buyer elects to obtain a full-coverage extended ALTA policy of
title insurance under 6(b). The cost of this coverage, above that of a
standard Owner's policy, shall be paid for by the [X] Buyer, Seller.
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7. SPECIFIC UNDERTAKINGS OF SELLER AND BUYER.
7.1 SELLER DISCLOSURES. The Seller will deliver to the Buyer the following
Seller Disclosures no later than the number of calendar days indicated
below which shall be days after Acceptance.
(Days)
[ ] (a) a Seller Property Condition Disclosure for the
Property, signed and dated by Seller:
[X] (b) a commitment for the policy of title insurance required 15
under Section 6, to be issued by the title insurance company
chosen by Seller, including copies of all documents listed
as Exceptions on the Commitment:
[ ] (c) a copy of all loan documents relating to any loan now
existing which will encumber the Property after Closing:
[ ] (d) a copy of all leases and rental agreements now in effect 15
with regard to the Property together with a current rent
roll:
[ ] (e) operating statement of the Property for December 31, 15
1996 full fiscal years of operation plus the current fiscal
year through July 1997: (f) tenant Estoppel agreements:
Seller agrees to pay any charge for cancellation of the title commitment
provided under Subsection (b).
If Seller does not provide any of the Seller Disclosures within the time
periods agreed above, the Buyer may either waive the particular Seller
Disclosure requirement by taking no timely action or the Buyer may notify
the Seller in writing within 5 calendar days after the expiration of the
particular disclosure time period that the Seller is in Default under this
Contract and that the remedies under Section 15 are at the Buyer's
disposal. The holder of the Earnest Money Deposit shall, upon receipt of a
copy of Buyer's written notice, return to the Buyer the Earnest Money
Deposit without the requirement of further written authorization from the
Seller.
7.2 BUYER UNDERTAKINGS. The Buyer agrees to:
[ ] (a) apply for approval of the assumption or funding of the loan
proceeds described in Section 2 by completing, signing, and
delivering to the Lender the initial loan application and
documentation required by the Lender and by paying all fees as
required by the Lender (including appraisal fee) no later than
------- calendar days after Acceptance; and -------
[ ] (b) no later than -------- calendar days after Acceptance, obtain
from the Lender to whom application is made under Subsection (a)
a written commitment to approve the assumption of the existing
loan or to fund the new loan subject only to changes of
conditions in Buyer's credit worthiness and to normal loan
closing procedures; or, if Buyer elects, providing the Seller
with absolute assurance, within the same time frame, that the
proceeds required for funding the Total Purchase Price are
available. -------
These Buyer Undertakings are at the sole expense of the Buyer and are
material elements of this Contract for the benefit of both the Buyer
and the Seller.
If Buyer does not initial any Buyer Undertakings and provide Seller
with written confirmation in the time agreed above, the Seller may
either waive the particular Buyer Undertakings requirement by taking
no timely action or the Seller may notify the Buyer in writing within
5 calendar days of the expiration of the particular undertaking time
period that the Buyer is in Default under this Contract and that the
remedies under Section 15 are at the Seller's disposal. The holder of
the Earnest Money Deposit shall, upon receipt of a copy of Seller's
written notice, deliver to the Seller the Earnest Money Deposit
without the requirement of further written authorization from the
Buyer.
7.3 ADDITIONAL DUE DILIGENCE. The Buyer shall undertake the following
Additional Due Diligence elements at its own expense and for its own
benefit for the purpose of complying with the Contingencies under
Section 8.
[](a)Ordering and obtaining an appraisal of the Property if one is not
otherwise required under Section 7.2;
[](b)Ordering and obtaining a survey of the Property if one is not
otherwise required under Section 6;
[](c)Ordering and obtaining any environmentally related study of the
Property;
[X](d)Ordering and obtaining a physical inspection report
regarding, and completing a personal inspection of, the Property;
[](e)Requesting and obtaining verification that the Property complies
with all applicable federal, state and local laws, ordinances and
regulations with regard to zoning and permissible use of the
Property.
Seller agrees to cooperate fully with Buyer's completing those Due
Diligence matters and to make the Property available as reasonable and
necessary for the same.
8. CONTINGENCIES. This offer is subject to the Buyer's approving, in the sole
discretion, the Seller Disclosures, the Buyer Undertakings and Additional
Due Diligence matters in Section 7. However, the Buyer's discretion in
approving the terms of the loan under Subsection (b) is subject to Buyer's
covenant with regard to minimally acceptable financing terms under Section
2.
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8.1 Buyer shall have 5 calendar days after the times specified in Section 7.1
and 7.2 for receipt of Seller Disclosures and for completion of Buyer
Undertakings to review the content of the disclosures and the outcome of
the undertakings. The latest applicable date under Section 7.1 and 7.2
applies for completing a review of Additional Due Diligence matters under
Section 7.3. This time period is the length due to extensive due diligence
being done prior to this offer being submitted.
8.2 If Buyer does not deliver a written objection to Seller regarding a Seller
Disclosure, Buyer Undertaking or Due Diligence matter within the time
provided in Section 8.1, that item will be deemed approved by Buyer.
8.3 If Buyer objects, Buyer and Seller have 15 calendar days after receipt of
the objections to resolve Buyer's objections. Seller may, but shall not be
required to, resolve Buyer's objections. Likewise, the Buyer is under no
obligation to accept any resolution proposed by the Seller. If Buyer's
objections are not received within the stated time, Buyer may void this
Contract by providing written notice to Seller within same stated time. The
holder of the Earnest Money Deposit shall, upon receipt of a copy of
Buyer's written notice, return to Buyer the Earnest Money Deposit without
the requirement of any further written authorization from Seller. If this
Contract is not voided by Buyer, Buyer's objection is deemed to have been
waived. However, this waiver does not affect warranties under Section 10.
8.4 Resolution of Buyer's objections under Section 8.3 shall be in writing and
shall become part of this Contract.
9. SPECIAL CONTINGENCIES. This offer is made subject to:
------------------------------ . The terms of the attached Addendum #1 are
incorporated into this Contract by this reference.
10. SELLER'S LIMITED WARRANTIES. Seller's warranties to Buyer regarding the
Property are limited to the following:
10.1 [Intentionally deleted]
10.2 [Intentionally deleted]
10.3 [Intentionally deleted]
10.4 [Intentionally deleted]
10.5 [Intentionally deleted]
10.6 At Closing, Seller will bring current all financial obligations
encumbering the Property which are assumed in writing by Buyer and
will discharge all such obligations which Buyer has not so assumed;
11. VERIFICATION OF WARRANTED AND INCLUDED ITEMS. After all contingencies
have been removed and before Closing, the Buyer may conduct a
"walk-through" inspection of the Property to determine whether or not
items warranted by Seller in Section 10.1, 10.2, 10.3 and 10.4 are in
the warranted condition and to verify that items included in Section
1.1 are presently on the Property. If any item is not in the warranted
condition, Seller will correct, repair or replace it as necessary or,
with the consent of Buyer and (if required) Lender, escrow an amount
at Closing to provide for such repair or replacement. The Buyer's
failure to conduct a "walk-through" inspection or to claim during the
"walk-through" inspection that the Property does not include all items
referenced in Section 1.1 or is not in the condition warranted in
Section 10, shall constitute a waiver of Buyer's rights under Section
1.1 and the warranties contained in Section 10.
12. CHANGES DURING
TRANSACTION. Seller agrees that no changes in any existing leases
shall be made, no new leases entered into, and no substantial
alteration or improvements to the Property shall be undertaken without
the written consent of the Buyer.
13. AUTHORITY OF SIGNERS. If Buyer or Seller is a corporation, partnership,
trust, estate, or other entity, the person signing this Contract on its
behalf warrants his or her authority to do so and to bind Buyer or Seller
and the heirs or successors in interest to Buyer or Seller. If the Seller
is not the vested Owner of the Property but has control over the vested
Owner's disposition of the Property, the Seller agrees to exercise this
control and deliver title under this Contract as if it had been signed by
the Vested Owner.
14. COMPLETE CONTRACT. This instrument (together with its Addenda, any attached
Exhibits, and Seller Disclosures) constitutes the entire Contract between
the parties and supersedes all prior dealings between the parties. This
Contract cannot be changed except by written agreement of the parties.
15. DISPUTE RESOLUTION. The parties agree that any dispute or claim relating to
this Contract, including but not limited to the disposition of the Earnest
Money Deposit and the breach or termination of this Contract, shall first
be submitted to mediation in accordance with the Utah Real Estate
Buyer/Seller Mediation Rules of the American Arbitration Association. Each
party agrees to bear its own costs of mediation. Any Agreement signed by
the parties pursuant to the mediation shall be binding. If mediation fails,
the procedures applicable and remedies available under this Contract shall
apply. Nothing in this Section shall prohibit the Buyer from seeking
specific performance by the Seller by filing a complaint with the court,
serving it on the Seller by means of summons or as otherwise permitted by
law, and recording a lis pendens with ----------- regard to the action
provided that the Buyer permits the Seller to refrain from answering the
complaint pending mediation. Also, the parties may agree in writing to
waive mediation.
16. DEFAULT. If Buyer defaults, Seller may elect to either retain the Earnest
Money Deposit as liquidated damages or to return
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the Earnest Money Deposit and sue Buyer to enforce Seller's rights. If
Seller defaults, in addition to return of the Earnest Money Deposit, Buyer
may elect to either accept from Seller as liquidated damages a sum equal to
the Earnest Money Deposit or sue Seller for specific performance and/or
damages. If Buyer elects to accept the liquidated damages, Seller agrees to
pay the liquidated damages to Buyer upon demand. Where a Section of this
Contract provides a specific remedy, the articles intend that the remedy
shall be exclusive regardless of rights which might otherwise be available
under common law.
17. ATTORNEY'S FEES. In any action arising out of Contract, the prevailing
party shall be entitled to costs and reasonable attorney's fees.
18. DISPOSITION OF EARNEST MONEY. The Earnest Money Deposit shall not be
released unless it is authorized by: (a) Section 7.1, 7.2 and 8.3; (b)
separate written agreement of the parties, including an agreement under
Section 15 if (a) does not apply; or (c) court order.
19. ABROGATION. Except for express warranties made in this Contract, the
provision of this Contract shall not apply after Closing.
20. RISK OF LOSS. All risk of loss or damage to the Property shall be borne by
Seller until Closing.
21. TIME IS OF THE ESSENCE. Time is of the essence regarding the dates set
forth in this transaction. Extensions must be agreed to in writing by all
parties. Performance under each Section of this Contract which references a
date shall be required absolutely by 5:00 p.m. Mountain Time on the stated
date.
22. COUNTERPARTS AND FACSIMILE (FAX) DOCUMENTS. This Contract may be signed in
counterparts, and each counterpart bearing an original signature shall be
considered one document with all other bearing original signature. Also,
facsimile transmission of any signed original document and re-transmission
of any signed facsimile transmission shall be the same as delivery of an
original.
23. ACCEPTANCE. Acceptance occurs when Seller or Buyer, responding to an offer
or counteroffer of the other: (a) signs the offer or counteroffer where
noted to indicate acceptance; and (b) communicates to the other party or
the other party's agent that the offer or counteroffer has been signed as
required.
24. OFFER AND TIME FOR ACCEPTANCE. Buyer offers to purchase the Property on the
above terms and conditions. If Seller does not accept this offer AM PM
Mountain Time, August 25, 1997, this offer shall lapse, and the holder of
the Earnest Money Deposit shall return it to the Buyer.
/s/ Glen Overton
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Buyer's Signature Offer Reference Date
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Buyer's Name (please print)
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Notice Address Phone
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ACCEPTANCE/ REJECTION/ COUNTER OFFER
[ ] Acceptance of Offer to Purchase: Seller accepts the foregoing offer on the
terms and conditions specified above.
[Illegible] 8/26/97
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Seller's Signature Date Time
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Seller's Name (please print)
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Notice Address Phone
[ ] Rejection: Seller rejects the foregoing offer.
---------- Seller's initials --------------- Date ------------ Time
Counter Offer: Seller presents for Buyer's Acceptance the terms of Buyer's offer
subject to the exceptions or modifications as specified in the attached Counter
Offer #------------.
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