Second Liquidating Trust And Escow Agreement

SECOND LIQUIDATING TRUST AND ESCROW AGREEMENT


THIS SECOND LIQUIDATING TRUST AND ESCROW AGREEMENT (this "Agreement") is entered into and effective as of September 30, 1996 (the "Effective Date") by and between GUARANTEED HOTEL INVESTORS 1985, L.P., a Delaware limited partnership ("GHI"), and NORWEST BANK ARIZONA, NATIONAL ASSOCIATION, a national banking association principally located in the State of Arizona ("Escrow Agent").


PRELIMINARY STATEMENTS


Unless otherwise expressly provided herein, all defined terms used in this Agreement shall have the meanings set forth in Section 1 of this Agreement.


On the Closing Date, GHI sold the Hotel Properties to Buyer pursuant to the terms of the Purchase Agreement, and GHI, Buyer and Escrow Agent entered into the Initial Trust Agreement which provided for the deposit and disbursement of the Initial Escrow Funds.


GHI now desires to enter into this Agreement for the purpose of appointing Escrow Agent to receive and hold the Escrow Funds in escrow and disburse such Escrow Funds as contemplated by this Agreement, including, without limitation, to satisfy (i) possible sales tax obligations of GHI resulting from its ownership and operation of the Hotel Properties prior to the Closing Date, and (ii) other possible obligations of GHI which were unknown to GHI as of the Closing Date but which are disclosed to and acknowledged by GHI subsequent to the Closing Date.


This Agreement shall govern the terms upon which Escrow Agent shall distribute the Escrow Funds.


AGREEMENT


In consideration of the premises set forth above and other good and valuable consideration, the receipt of which is acknowledged, the parties agree as follows:


1. Definitions. The following terms shall have meanings set forth in this Section 1 for all purposes of this Agreement:


"Buyer" means SLT Realty Limited Partnership, a Delaware limited partnership.


"Closing Date" means April 26, 1996.
"Escrow Funds" means the sum of $1,000,000 to be deposited by GHI into an interest bearing trust account with Escrow Agent pursuant to this Agreement on the Effective Date. The term "Escrow Funds" shall include all interest accruing thereon.


"General Partner" means FFCA Management Company Limited Partnership, a Delaware limited partnership, whose general partner is Perimeter Center Management Company, a Delaware corporation.


"Hotel Properties" has the meaning set forth in the Purchase Agreement.


"Initial Escrow Funds" means the sum of $2,500,000 deposited by GHI with Escrow Agent from the Purchase Price (as defined in the Purchase Agreement), which Initial Escrow Funds will be distributed by Escrow Agent to Investors and/or Buyer pursuant to the Initial Trust Agreement.


"Initial Trust Agreement" means that certain Liquidating Trust and Escrow Agreement entered into among GHI, Buyer and Escrow Agent as of the Closing Date.


"Investors" means each person who holds one or more Units in GHI and was reflected as an Investor on the books and records of GHI on the Closing Date.


"Purchase Agreement" means that certain Purchase Agreement dated as of October 27, 1995 between GHI and Buyer, as amended.


"Unit" means one or more units of assigned limited partnership interests in GHI.


2. Appointment of Escrow Agent. (a) Effective as of the Effective Date, Escrow Agent is appointed escrow agent to hold and disburse the Escrow Funds in accordance with the instructions set forth herein. Escrow Agent agrees, upon such appointment, to act as escrow agent under this Agreement.


(b) Escrow Agent shall have no powers or rights with respect to holding, investing and disbursing the Escrow Funds other than as expressly set forth in this Agreement.


(c) Escrow Agent shall be responsible for providing to each Investor periodic reports containing unaudited financial statements and certain other information and will file such reports on Forms 10-K and 8-K with the Securities and Exchange Commission in accordance with applicable securities laws. Such reports shall include, without limitation, an annual written report, certified by Escrow Agent, setting forth:


(i) an unaudited balance sheet of the Escrow Fund account as
of the end of the calendar year and the investment status of any funds
held in the Escrow Fund account;
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(ii) the amount of all liabilities discharged during such
calendar year;


(iii) the amount of all distributions, if any, made to
Investors during such calendar year; and


(iv) any action taken by Escrow Agent in the performance of
its duties not previously reported that materially effect the Escrow
Funds.


In preparing the periodic reports, Escrow Agent will rely on information provided by General Partner. Escrow Agent shall be indemnified in accordance with the provisions set forth in Section 9 of this Agreement for all losses, costs and expenses arising from and related to the preparation and distribution of the periodic reports to Investors.


(d) Escrow Agent may resign upon 30-days advance written notice to General Partner. If a successor escrow agent is not appointed by General Partner within the 30-day period following such notice, Escrow Agent may petition any court of competent jurisdiction to name a successor escrow agent.


3. Purpose of Agreement. This Agreement is being executed, and the Escrow Funds are being deposited with Escrow Agent, for the purpose of liquidating and distributing the Escrow Funds.


4. Deposit of Escrow Funds. On the Effective Date GHI agrees to deposit with Escrow Agent the Escrow Funds. The Escrow Funds shall be credited by Escrow Agent and recorded in a separate, segregated account. Escrow Agent is directed and is hereby authorized to deposit, transfer, hold and invest all funds received in the Escrow Funds account, including principal and interest, in the account described on the attached Exhibit A (the "Fund"), during the period of escrow. The Escrow Agent may sell all or any interest in the Fund only to the extent necessary to make any disbursement under the terms of Section 5 of this Agreement or to the extent necessary to make any distribution to Investors under the terms of Section 7 of this Agreement. Escrow Agent shall not otherwise sell, transfer or convey all or any interest in the Fund.


5. Disbursement of Escrow Funds. (a) Escrow Agent shall only disburse the Escrow Funds pursuant to directions to be provided by General Partner as described in this Section or to the Investors upon termination of this Agreement as contemplated by Sect ...