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Sale 1616

The Inn at Silver Lakes

62-Room Resort Hotel

Bankruptcy Auction - 363 Sale

Helendale, CA (Located 2 Hours from L.A. in the High Desert)

Qualified Bid Deadline: August 7, 2020

The following Bid Procedures (the “Bid Procedures”) will be used for the sale and transfer of interests in certain property of the bankruptcy estate of Silver Lakes Resort Lodge Interval Owners Association (the “Debtor”), the debtor and debtor-in-possession in Case No. 6:19-bk-16352-MW (the “Proceeding”), which is pending under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Central District of California, Riverside Division (the “Bankruptcy Court”). The Debtor has determined that certain real property located at 14818 Clubhouse Drive, Helendale, California, together with all fixtures, improvements and personal property located thereon or appurtenant thereto, (the “Property”) is to be sold pursuant to section 363 of the Bankruptcy Code through an auction (the “Auction”) that will commence with the submission of bids (a “Bid”). The sale of the Property is subject to (i) the terms and conditions outlined herein, (ii) the due diligence material concerning the Property, as made available electronically, online, or in another form, (iii) any assignment and assumption agreement(s) and (iv) the Purchase and Sale Agreement (hereinafter referred to as the “PSA”).

Property. The Property is a 62-room condominium and timeshare hotel. The Property shall be sold to the bidder who submits the highest and best offer at or over a minimum bid of $670,000 plus the Buyer’s Premium (4% of the Purchase Price and defined in the PSA) subject to Debtor and Bankruptcy Court approval. The Property will be conveyed or assigned, as described below, pursuant to the PSA and, as applicable, section 363 of the Bankruptcy Code, free and clear of any liens, claims, encumbrances, or interests asserted by any party, except as expressly provided below.

Bid Procedures. The offering and sale of the Property is subject to these Bid Procedures (the “Bid Procedures”) and the Bankruptcy Court’s sale approval process. Prospective bidders are advised to carefully review the Bid Procedures. Failure to meet the requirements for submitting a bid (the “Bid Requirements”) as described in these Bid Procedures may, in the sole discretion of NRC with the Debtor’s consent, cause a bid to be deemed non-conforming (a “Non-conforming Bid”) and, therefore not a Qualified Bid (“Qualified Bid”, as defined in the below), and may be disqualified from consideration, with approval by the Debtor. The Debtor reserves the right to amend, supplement or modify these Bid Procedures at any time and to direct NRC to provided written notice of such modifications to prospective bidders. The Bid Procedures outlined are included in various NRC sales materials, the NRC Sale website, and are incorporated accordingly as part of the PSA. In the event of a conflict between these Bid Procedures and the PSA, the provisions of the PSA shall control.

Bid Requirements. Bids must be submitted: (1) on or before the Bid Deadline (“Bid Deadline”, as defined below); 2) on the non-contingent PSA contract form contained in the Bid Package, (3) at or above the Minimum Bid amount (“Minimum Bid”, as defined below); (4) accompanied by a Bid Deposit (“Bid Deposit”, as defined below); and (5) include a Bidder Pre-Qualification Form (“Bidder Pre-Qualification Form”, as defined below). The PSA is required to be fully and correctly completed and each Bid must be at or above the Minimum Bid amount (see below). Bidders fulfilling these requirements may, in the Debtor’s discretion, be deemed to have submitted a Qualified Bid (“Qualified Bid”) and be a Qualified Bidder (individually a “Qualified Bidder”, collectively “Qualified Bidders”). Bids received by NRC after the Bid Deadline may be deemed by the Debtor to be Non-conforming and therefore not a Qualified Bid. NRC reserves the right, with consent of the Debtor, to extend the Bid Deadline in advance of the Bid Deadline, on notice to interested parties. Any changes to the Bid Deadline will be published on the sale website, www.NRC.com/1616 (the “Sale Website”).

Bid Package. The bid package for the Property contains bid submission instructions, the approved PSA to be completed, the Bidder Qualification form, and various due diligence materials (the “Bid Package”). The Bid Package for the Property will be available for download on the NRC Sale Website by registering for the Sale by creating a user account on the Sale Website.

Bid Deadline. All bids must be received by the Debtor’s real estate broker, NRC Realty Advisors of California, Inc. (“NRC”) in care of its parent company NRC Realty & Capital Advisors, LLC. The Bid Deadline will be 5:00 p.m. Central Time on August 7, 2020. All bids should be sent to:

NRC Realty & Capital Advisors, LLC
445 W. Erie Street
Suite 210
Chicago, Illinois 60654
Attn: Sale 1616: Inn at Silver Lakes
Email: david.levy@nrc.com

Bid Deposit. Bidders must include a bid deposit (the “Bid Deposit”) with their bid in the amount of 10% of the bid price by certified or cashier’s check or money order made payable to NRC Realty & Capital Advisors, LLC (“NRC”) or wire transfer of immediately available funds to NRC’s escrow account (wire instructions may be obtained from NRC). Personal or company checks will not be accepted.

Minimum Bid. The aggregate cash consideration proposed by each Bid must equal or exceed the sum of $670,000.00, plus Buyer’s Premium (4% of the Purchase Price and defined in the PSA).

Buyer's Premium. At closing, the successful bidder (the “Successful Bidder”) will pay, in addition to the purchase price, a Buyer’s Premium at an amount equal to four percent (4%) of the Purchase Price.

Bidder Pre-Qualification. To participate in the bidding process under these Bidding Procedures, a person or entity must also deliver the Bidder Pre-Qualification Form as contained in the Bid Package (the “Bid Package” as defined below) containing information on the bidder’s source of funds to close the transaction and disclosure of any connections to the Debtor and its major creditors.

Non-Revocation of Bid. The Bid must by its terms remain binding and irrevocable until 30 business days from the Bid Deadline.

Auction: If the Debtor and NRC receive one or more Qualified Bids, the Qualified Bidders will be invited to participate in a video conference auction to be conducted by NRC on August 14, 2020 (the “Auction”). All bids at the Auction will have to be made in increments of no less than Ten Thousand and No/100 Dollars ($10,000.00) and be in whole $5,000 or $10,000 increments.

Backup Bidder. The Debtor may also select the second highest and best bid to serve as a Backup Bidder (“Backup Bidder”), in the event the Successful Bidder is unable to close on the transaction for any reason. The Purchase Agreement submitted with a Qualified Bid will stipulate that the bidder selected as the Backup Bidder agrees their bid will remain in full force and effect for 60 business days or until the closing of a sale of Debtor’s Property to the Successful Bidder. If a Successful Bidder fails to consummate the approved transactions contemplated by its Successful Bid, the Debtor may select the Backup Bidder as the Successful Bidder, and such Backup Bidder shall be deemed a Successful Bidder for all purposes. The Bid Documents from such Backup Bidder will be promptly filed with the Court. In such case, the defaulting Successful Bidder’s Deposit shall be forfeited to the Debtor, and the Debtor specifically reserves the right to seek all available remedies against the defaulting Successful Bidder

Return of Bid Deposits. After a Non-conforming Bid is rejected, NRC will return the related Bid Deposit by mail or wire transfer within seven business days after the later to occur of (i) the date of such rejection, and (ii) the date that the related funds have cleared NRC’s escrow account. The Bid Deposits of all unsuccessful Auction bidders, except the Backup Bidder, shall be returned on or within seven (7) business days after the auction. The Bid Deposit for the Backup Bidder shall be returned on or within seven (7) business days of the closing of a transaction to the Successful Bidder.

Court Approval. All bids for the Property are subject to approval by the Bankruptcy Court and said approval is a condition of Closing. The Sale Hearing will be held on a date set by the Bankruptcy Court.

Property Inspections. Bidders may inspect the Property during normal business hours with “back office” and other private storage areas only available for inspection if accompanied by a representative of the Debtor. In no event shall such inspections include any environmental testing or sampling. Please check the Sale Website for additional details.

Due Diligence Materials. Various due diligence materials pertaining to the Property, will be available for download at no charge on the Sale Website www.NRC.com/1616 as part of the Bid Package. Available documents will include, as available, property-specific physical, financial, legal, tax bills, surveys or site plans, and title information.

Effective Date of Award of Bid. The effective date of the award of the bid for the Property shall be the date that the Debtor executes the PSA.

Closing. The Closing shall occur on the later of 30 calendar days and fifteen (15) business days following the Court Approval Date (the "Closing Date"), unless extended at the sole discretion of Seller for up to an additional one hundred and eighty (180) days provided Purchaser is given prior written notice by NRC. Failure to close in a timely fashion will result in the forfeiture of the bidder’s Earnest Money Deposit. Transfer of possession will occur upon the escrow closing.

Free and Clear of All Liens. The Property will be conveyed free and clear of all liens, claims and interests, including the interests of timeshare owners, pursuant to and order of the Bankruptcy Court, or by the provision of title insurance which will insure the purchaser and its lender against any liens not transferred or released at closing, except for certain permitted exceptions outlined in the title commitment. Title insurance coverage will be at the bidder’s sole expense. The property will be conveyed “AS IS, WHERE IS, WITH ALL FAULTS,” regarding any conditions affecting the Property, with no representations or warranties whatsoever, express or implied.

Licenses, Permits and Authorization. The successful bidder will be responsible for obtaining, at its expense, any licenses, permits and authorizations (collectively, “Licenses”) required to acquire, manage, develop and/or operate the Property. Obtaining such Licenses will not be a condition to the successful bidder’s obligation to close.

Confidentiality. All information contained in the due diligence materials is confidential and is to be kept confidential by each person and entity receiving same.

Conflicts. In the event of a conflict between these Bid Procedures and the PSA or the assignment and assumption documents for the Property (hereinafter referred to as the “Transfer Documents”), the provisions of the Transfer Documents shall control.

Amendments. These Bid Procedures, the Transfer Documents, and any other required sale or closing documents may be amended only in writing and with the prior consent of the Debtor.

Cooperating Broker Participation. A fee equal to two percent (2.0%) of the Purchase Price (as defined in the PSA) of the Property, will be paid upon the closing of escrow of the sale of the Property pursuant to the PSA to any licensed broker or agent whose registered prospect consummates the sale. Brokers must register their prospect(s) with NRC no less than three (3) days prior to the Bid Deadline by completing the Cooperating Broker Registration Form (“Cooperating Broker Registration Form”) provided by NRC without modification, and emailing it to david.levy@nrc.com, referencing Sale 1616. All such registrations are not effective until accepted in writing by NRC, who shall have the authority to determine if any registration is accepted based upon the requirements of these cooperating broker terms as stated on the Cooperating Broker Registration Form, in its sole judgment. No commissions will be paid on the Property to brokers participating as a principal in the purchase of the Property or who has a direct or indirect ownership interest in purchaser, and an affidavit may be required stating that the broker is acting solely as broker and not as purchaser and has no direct or indirect ownership interest in purchaser. NO OTHER FORM OR ORAL REGISTRATION IS PERMITTED.

Disclaimer. The Debtor, NRC, NRC Realty Advisors of California, Inc., and their employees, agents, subsidiaries and affiliates, acknowledge that the Debtor and NRC may not have complete knowledge of the physical or economic characteristics of the Property being sold. Accordingly, except as otherwise specifically stated in the Transfer Documents, the Debtor and NRC and their employees, agents, subsidiaries and affiliates, hereby disclaim any warranty, guaranty or representation, express or implied, oral or written, past, present, or future, of, as to, or concerning (a) the extent of any right-of-way, lease, possession, lien, encumbrance, easements, license, reservation, or condition in connection with the Property; (b) the compliance of the Property or its operation with any applicable laws, ordinances, or regulations of any government or other body, including without limitation, compliance with any land use, Americans with Disabilities Act, wetland, or zoning law or regulation, or applicable environmental or coastal laws, rules, ordinances and regulations; (c) title to or the boundaries of the Property; and (d) the physical condition of the Property, including without limitation, the structural, mechanical and engineering characteristics of the improvements to the Property. Except as stated above and as set forth in the Transfer Documents, the sale of the Property shall be on an “AS IS, WHERE IS, WITH ALL FAULTS,” basis, and purchaser expressly agrees that the Debtor and NRC, and their employees, agents, subsidiaries or affiliates, make no warranty or representation, express or implied, or arising by operation of law, including, but not limited to, any warranty of condition, habitability, merchantability or fitness for a particular purpose, with respect to the Property. Purchaser is buying the Property based on their own investigation, and, by accepting title to all or part of the Property, acknowledge that they have conducted such investigations as they have deemed necessary or advisable and that the purchaser is not relying upon any representations of the Debtor, NRC, or any of their agents whatsoever. The materials and information concerning the Property contained herein, together with any marketing material, websites and Bid Package, and any and all other information provided by the Debtor, NRC, their counsel and/or their employees, agents, subsidiaries or affiliates, is based in part upon information and materials obtained from sources deemed reliable without independent verification. Bidders must not base their bids upon information disseminated in the Sale Website, any marketing material, due diligence information, and Bid Package, such as, but not limited to, environmental studies, repair estimates, or other studies, pro forma and financial information that may be provided by the Debtor or NRC, but shall rely solely on their own estimates and studies. No warranty or representation, express or implied, is made by either the Debtor, NRC, or any of their employees and agents, as to the accuracy or completeness of any or all such information.