Liquidating Trust And Escrow Agreement

LIQUIDATING TRUST AND ESCROW AGREEMENT


THIS LIQUIDATING TRUST AND ESCROW AGREEMENT (this "Agreement") is entered into and effective as of April 26, 1996 (the "Effective Date"), which Effective Date shall be the date of the Closing (as defined below), by and among SLT REALTY LIMITED PARTNERSHIP, a Delaware limited partnership ("Buyer"), GUARANTEED HOTEL INVESTORS 1985, L.P., a Delaware limited partnership ("Seller"), 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. Seller has agreed to sell to Buyer the Hotel Properties pursuant to the terms of the Purchase Agreement.


Seller and Buyer desire 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.


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


AGREEMENT


NOW, THEREFORE, in consideration of the premises set forth above and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:


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


"Closing" shall have the meaning set forth in Section 4 of the Purchase Agreement.


"Escrow Funds" means the sum of $2,500,000 from the proceeds of the Purchase Price to be deposited by Seller into an interest bearing trust account with Escrow Agent pursuant to this Agreement immediately after 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.


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


"Purchase Agreement" means that certain Purchase Agreement dated as of October 27, 1995, as amended.


"Purchase Price" means the amount of $73,250,000.00 to be paid by Buyer to Seller at the Closing, subject to adjustment and prorations as set forth in the Purchase Agreement.


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


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;


(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.
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In preparing the periodic reports, Escrow Agent will rely on information provided by General Partner. Seller also agrees to indemnify Escrow Agent 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 Seller and Buyer. If a successor escrow agent is not appointed by Seller and Buyer 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. Immediately after the Effective Date, Seller 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 to Buyer 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) The Escrow Funds shall be the sole and exclusive source of funds to which Buyer shall look subsequent to the Effective Date for recourse in the event of a breach or default by Seller of any of its representations, warranties, covenants or obligations under the Purchase Agreement, any other document or instrument executed by Seller as contemplated by the Purchase Agreement, including, without limitation, the Special Warranty Deeds, Bills of Sale and Assignment Agreements (all as defined in the Purchase Agreement), and/or this Agreement (collectively, the "Documents"). Escrow Agent shall not disburse any Escrow Funds to (i) Buyer unless Seller shall have consented to such disbursement as contemplated in subsection (b) below or there has been a Final Decision (as defined below) with respect to a Disputed Claim (as defined below), or (ii) Seller, except that Escrow Agent shall disburse Escrow Funds to Investors as contemplated by Section 7.


(b) Subsequent to the Effective Date, Buyer may, from time to time, but in no event more than 18 months after the Effective Date, make a claim to some or all of the Escrow Funds (a "Claim") by delivering to Escrow Agent and Seller a certificate (a "Claim Certificate") signed by the president or a vice president of Buyer's general partner stating:


(i) That Buyer has or will incur damages in the aggregate of
at least $10,000 as a result of one or more breaches or defaults by
Seller under one or more of the Documents (the "Default"), exclusive,
however, of Claims previously made;


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(ii) The basis for the Default, set forth in reasonable
detail; and


(iii) Buyer's reasonable estimate of the damages which Buyer
has or will incur or sustain as a result of such Default.


The Claim Certificate delivered to each of Escrow Agent and Seller shall be accompanied by copies of all relevant third-party documentation supporting such a ...