AGREEMENT OF PURCHASE AND SALE
[COUNTRY LAKE APARTMENTS, WEST PALM BEACH FLORDA]
This Agreement of Purchase and Sale ("Agreement") is made and entered into
by and between Purchaser and Seller.
RECITALS
A. Defined terms are indicated by initial capital letters. Defined terms shall
have the meaning set forth herein, whether or not such terms are used
before or after the definitions are set forth.
B. Purchaser desires to purchase the Property and Seller desires to sell the
Property, all upon the tennis and conditions set forth in this Agreement.
NOW, TREREFORE, in consideration of the mutual terms, provisions, covenants
and agreements set forth herein, as well as the sums to be paid by Purchaser to
Seller, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Purchaser and Seller agree as follows:
ARTICLE 1 - Basic Information
Certain Basic Terms. The following defined terms shall have the meanings
set forth below:
1.1.1 Seller: Sherwood Glen and Willows Apartments Real Estate Limited
Partnership, a Delaware limited partnership
1.1.2 Purchaser: Country Lake - Homes Holdings, Inc., a Florida Corporation
1.1.3 Purchase Price: $4,000,000.00
1.1.4 Earnest Money: $50,000.00 (the "Initial Earnest Money"), including
interest thereon, to be deposited in accordance with Section 3.1
below, to be increased by $150,000.00 (the "Additional Earnest Money")
to $200,000.00, plus interest thereon, pursuant to Section 3.1.
1.1.5 Title Company: Lawyers Title Insurance Corporation 600 N. Pearl
Street, Suite 700 Dallas, Texas 75201 Attention: Pat Noska Telephone:
(214) 720-7611 Facsimile: (214)720-7614
1.1.6 Escrow Agent: Lawyers Title Insurance Corporation
600 N. Pearl Street, Suite 700
Dallas, Texas 75201
Attention: Pat Noska
Telephone: (214)720-7611
Facsimile: (214) 720-7614
1.1.7 Broker: Atlantic Realty Partners, Inc.
1.1.8 Effective Date: The date on which this Agreement is executed by the
latter to sign of Purchaser or Seller, as indicated on the signature
page of this Agreement
1.1.9 Property Information Delivery Date: The date which is five (5) days
after the Effective Date.
Exhibit 10.22 - Page 1
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1.l.10 Title Commitment The date which is five (5) days after the Effective
Date. Delivery Date:
1.1.11 Survey Delivery The date which is five (5) days after the Effective
Date. Date:
1.1.12 Title and Survey Review Period: The period ending ten (10) days
after Purchaser's receipt of the initial Title Commitment and the
initial Survey, but in any event not later than the expiration of the
Inspection Period.
1.1.13 Inspection Period: The period beginning on the Effective Date and
ending April 23,1999.
1.1.14 Closing Date: May 14,1999
1.2 Closing Costs.
Closing costs shall be allocated and paid as follows:
Title Commitment required to be delivered pursuant to Section 5.1
Responsible Party: Seller
Premium for standard form Title Policy required to be delivered pursuant to
Section 54 Responsible Party: Seller
Premium for any upgrade of Title Policy for extended or additional coverage
and any Purchaser endorsements desired by Purchaser, tax certificates,
municipal and utility lien certificates, and any other Title Company
charges
Costs of Survey and/or any revisions, modifications or recertifications
thereto Responsible Party: Purchaser
Costs for UCC Searches Responsible Party: Purchaser
Recording Fees Responsible Party: 1/2 Seller, 1/2 Purchaser
Any deed taxes, documentary stamps, transfer taxes, intangible taxes,
mortgage Responsible Party taxes or other similar taxes, fees or
assessments
Any escrow fee charged by Escrow Agent for holding the Earnest Money or
conducting the Closing Responsible Party: 1/2 Seller, 1/2 Purchaser
Real Estate Sales Commission to Broker Responsible Party: Seller
All other closing costs, expenses, charges and fees Responsible Party:
Purchaser
1.3 Notice
Addresses:
Purchaser: Country Lake - Homes Holdings, Inc.
1725 Desales Street, NW, Suite 30
Washington, D.C. 20036
Attention: Robert Kohn
Telephone: (202)785-9191, Ext. 398
Facsimile: (202)785-9717
Copy to: Berman Wolfe & Rennert, P.A.
100 SE 2 Street, Suite 3500 Miami, Florida 33131
Attention: Leon J. Wolfe, Esq.
Telephone: (305) 577-4177
Facsimile: (305) 373-6036
Exhibit 10.22 - Page 2
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Seller: Sherwood Glenn and Willows
Apartments Real Estate
Limited Partnership
c/o Archon Group
600 E. Las Colinas Boulevard
Suite 1900
Irving, Texas 75039
Attention: Paul Harris
Telephone: (972) 868-2417
Facsimile: (972) 830-7614
Copy to: Locke Liddell & Sapp LLP
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201
Attention: Thomas P. Arnold
Telephone: (214) 740-8656
Facsimile: (214) 740-8800
1.4 Index of Certain Additional Defined Terms
Application ............................................ Section 4.4
Approval ............................................... Section 4.4
Asset Manager .......................................... Section 12.18
Asset Manager Employee ................................. Section 9.3
Assignment ............................................. Subsection 7.3.2
Bonds .................................................. Section 2.1.5
Bond Documents ......................................... Section 2.1.5
Bond Parties ........................................... Section 4.4
Bond Party Costs ....................................... Section 4.6
Bond Purchase Agreement ................................ Section 2.1.6
Bondholder ............................................. Section 2.1.6
CERCLA ................................................. Section 11.3
Closing ................................................ Section 7.1
Deed ................................................... Subsection 7.3.1
Designated Representative(s) ........................... Section 12.20
Due Diligence Termination Notice ....................... Section 4.1
ERISA .................................................. Subsection 7.4.3
Hazardous Materials .................................... Section 11.4
Improvements ........................................... Subsection 2.1.1
Independent Consideration .............................. Section 3.2
Intangible Personal Property ........................... Subsection 2.1.4
Land ................................................... Subsection 2.1.1
Lease Files ............................................ Subsection 4.2.1
Leases ................................................. Subsection 2.1.2
Material Damage ........................................ Subsection 6.2.1
Permitted Exceptions ................................... Section 5.3
Permitted Outside Parties .............................. Section 4.8
Property ............................................... Section 2.1
Property Documents ..................................... Section 4.5
RCRA ................................................... Section 11.3
Real Property .......................................... Subsection 2.1.1
Reports ................................................ Section 4.6
Rules .................................................. Section 12.21
Seller's Casualty Termination Notice ................... Subsection 6.2.1
Survey ................................................. Section 5.2
Tangible Personal Property ............................. Subsection 2.1.3
Taxes .................................................. Section 8.1
Tenant Receivables ..................................... Subsection 8.1.3
Title Commitment ....................................... Section 5.1
Title Policy ........................................... Section 5.4
Unbilled Tenant Receivables ............................ Subsection 8.1.3(a)
Uncollected Tenant Receivables ......................... Subsection 8.1.3(a)
Exhibit 10.22 - Page 3
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ARTICLE 2 - Property
2.1 Subject to the terms and conditions of this Agreement, Seller agrees to
sell to Purchaser, and Purchaser agrees to purchase from Seller, the
following property (collectively, the "Property"):
2.1.1 Real Property.
The land described in Exhibit A attached hereto (the "Land"), together with
(i) all improvements located thereon ("Improvements"), (ii) all and singular the
rights, benefits, privileges, easements, tenements, hereditaments, and
appurtenances thereon or in anywise appertaining thereto, and (iii) all right,
title, and interest of Seller, if any, in and to all strips and gores and any
land lying in the bed of any street, road or alley, open or proposed, adjoining
such Land (collectively, the "Real Property").
2.1.2 Leases.
All of Seller's right, title and interest, without warranty, in all leases
of the Real Property, including leases which may be made by Seller after the
Effective Date and prior to Closing as permitted by this Agreement (the
"Leases").
2.1.3 Tangible Personal Property.
All of Seller's right, title and interest, with special warranty of title,
in the equipment, machinery, furniture, furnishings, supplies and other tangible
personal property, if any, owned by Seller and now or hereafter located in and
used in connection with the operation, ownership or management of the Real
Property, but specifically excluding any items of personal property owned by
tenants at or on the Real Property and further excluding any items of personal
property owned by third parties and leased to Seller (collectively, the
"Tangible Personal Property").
2.1.4 Intangible Personal Property.
All of Seller's right, title and interest, if any, without warranty, in all
intangible personal property related to the Real Property and the Improvements,
including, without limitation: all trade names and trade marks associated with
the Real Property and the Improvements, including Seller's rights and interests,
if any, in the name of the Real Property; the plans and specifications and other
architectural and engineering drawings for the Improvements, if any (to the
extent assignable); warranties (to the extent assignable); contract rights
related to the construction, operation, ownership or management of the Real
Property, if any (but only to the extent assignable and only to the extent
Seller's obligations hereunder are expressly assumed by Purchaser pursuant to
this Agreement and the hereinafter defined Assignment); governmental permits,
approvals and licenses, if any (to the extent assignable); and telephone
exchange numbers (to the extent assignable) (collectively the "Intangible
Personal Property").
2.1.5 Bond Documents.
All of Seller's right, title and interest in and to the following documents
(collectively, the "Bond Documents"), including deposits and escrows held by the
Trustee in connection with such Bond Documents, if any:
$6,255,000 Housing Finance Authority of Palm Beach County, Florida
Multifamily Housing Revenue Bonds, Series 1985 C (Sherwood Glen Apartments
Project) dated as of July 1, 1985 from the Housing Finance Authority of
Palm Beach County, Florida ("Issuer") to Bondholder;
Land Use Restriction Agreement dated July 1, 1985, between Sherwood
Associates, Limited a/k/a Sherwood Associates ("Original Developer"),
Barnett Banks Trust Company, N.A., as Trustee ("Trustee"), and Issuer;
Trust Indenture dated as of July 1,1985, between Issuer and Original
Trustee;
First Supplemental Trust Indenture dated as of November 24, 1993, between
Issuer and Original Trustee, consented to by Resolution Trust Corporation
as agent for the Conservator for Hollywood Federal Savings Bank ("RTC"),
and Original Developer;
Exhibit 10.22 - Page 4
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Second Supplemental Trust Indenture dated as of September 1, 1996, between
Issuer and First Bank National Association, as Trustee (together with its
successor and assigns, including, without limitation, U.S. Bank Trust
National Association, ("Trustee"), consented to by Seller and Bondholder;
Letter of Credit Reimbursement Agreement dated July 1,1985, between
Hollywood Federal Savings and Loan Association (the "Association") and the
Original Developer, as amended by letter agreements dated July 1, 1985 and
July 11,1986;
Affidavit of Lost Reimbursement Agreement executed by RTC;
Remarketing Agreement dated July 1, 1985, between the Original Trustee, the
Original Developer, and William R. Hough & Co. and Smith Barney, Harris
Upham & Co., Incorporated (collectively, the "Underwriters").
Bond Purchase Agreement dated July 30, 1985, executed by the Underwriters
and accepted by the Issuer and the Original Developer;
Loan Agreement dated July 1,1985, between the Issuer and the Original
Developer;
Promissory Note dated August 5, 1985, in the original principal amount of
$6,800,000.00, executed by Original Developer, payable to Issuer;
Mortgage and Security Agreement dated July 1, 1985, executed by Original
Developer to Issuer and Association;
Assignment of Leases, Rents and Profits dated July 1, 1985, by Original
Developer to Association and Original Trustee;
Collateral Agreement dated July 1,1985, between the Association and the
Original Trustee;
Construction Loan Agreement dated July 1, 1985, between the Association and
the Original Developer;
Assignment of Mortgage and Note dated August 6,1985, by the Issuer to the
Original Trustee;
Promissory Note dated April 9,1985 in the original principal amount of
$500,000, executed by Original Developer and The Satter Companies, Inc.
("General Partner") to Association, as amended by letter agreement dated
June 5,1990, endorsed by RTC to Bondholder;
Mortgage dated April 9,1985, executed by Original Developer to Association,
as modified and affected by Mortgage Modification Agreement dated July 2,
1985, Corrective Mortgage Modification Agreement dated August 5, 1985, and
Subordination Agreement dated August 6, 1985, executed by Original
Developer and Association;
Conditional Assignment of Rentals dated April 9, 1985, executed by Original
Developer and The Satter Companies, Inc. to the Association;
Promissory Note dated July 2, 1985 in the original principal amount of
$107,000, executed by Original Developer and General Partner to the
Association and endorsed by RTC to Bondholder;
Affidavit of Lost Note executed by RTC,
Assignment of Mortgage Loans dated June 8, 1993, by RTC to Bondholder;
Assignment of Additional Collateral dated June 8, 1993, by RTC to
Bondholder;
Assignment of Bond Funds and Directions to Trustee by Bondholder to RTC;
Exhibit 10.22 - Page 5
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Consent, Modification and Assumption Agreement dated as of April 1, 1995,
among Original Developer, Seller, Bondholder, Trustee and Issuer;
All other documents entered into in connection with the issuance of,
governing, or otherwise relating to the Bonds.
2.1.6 Bond Purchase Agreement.
Simultaneously with the execution hereof, Purchaser has entered into a Bond
Purchase Agreement (the "Bond Purchase Agreement") with TE-Two Real Estate
Limited Partnership, a Delaware limited partnership ("Bondholder"), to (a)
purchase from Bondholder all of Bondholder's right, title and interest in the
Bonds, all rights of the holder of the Bonds which arise under the Bond
Documents, and all of Bondholder's right, title and interest as credit enhancer
and co-mortgagee under the Bond Documents; and (b) assume all of Bondholder's
obligations as credit enhancer and co-mortgagee under the Bond Documents.
ARTICLE 3 - Earnest Money
3.1 Deposit and Investment of Earnest Money.
Within twenty-four (24) hours after the Effective Date, Purchaser shall
deposit the Initial Earnest Money with Escrow Agent. If upon the expiration of
the Inspection Period, this Agreement is still in force and effect, Purchaser
shall, no later than the last day of the Inspection Period, deposit the
Additional Earnest Money, if any, as specified in Subsection 1.1.4 above, with
Escrow Agent. Escrow Agent shall invest the Earnest Money in government insured
interest-bearing accounts satisfactory to Seller and Purchaser, shall not
commingle the Earnest Money with any funds of Escrow Agent or others, and shall
promptly provide Purchaser and Seller with confirmation of the investments made.
Such account shall have no penalty for early withdrawal, and Purchaser accepts
alt risks with regard to such account.
3.2 Independent Consideration.
Simultaneously with the delivery of the Initial Earnest Money to the Title
Company by the Purchaser, Purchaser shall pay to Seller One Hundred and No/100
Dollars ($100.00) as independent consideration for Seller's performance under
this Agreement ("Independent Consideration"), which shall be retained by Seller
in all instances, and shall not be applied against the Purchase Price.
3.3 Form; Failure to Deposit.
The Earnest Money and Independent Consideration shall be in the form of a
certified or cashier's check or the wire transfer to Escrow Agent of immediately
available U.S. federal funds. If Purchaser fails to timely deposit any portion
of the Earnest Money or the Independent Consideration within the time periods
required, Seller may terminate this Agreement by written notice to Purchaser, in
which event the parties hereto shall have no further rights or obligations
hereunder, except for rights and obligations which, by their terms, survive the
termination hereof.
3.4 Disposition of Earnest Money.
The Earnest Money shall be applied as a credit to the Purchase Price at
Closing. However, if Purchaser elects to terminate this Agreement prior to the
expiration of the Inspection Period pursuant to Section 4.5, Escrow Agent shall
pay the entire Earnest Money to Purchaser one (1) business day following receipt
of the Due Diligence Termination Notice from Purchaser (as long as the current
investment can be liquidated and disbursed in one business day). No notice to
Escrow Agent from Seller shall be required for the release of the Earnest Money
to Purchaser by Escrow Agent if Purchaser terminates this Agreement pursuant to
Section 4.5. In the event of a termination of this Agreement by either Seller or
Purchaser for any reason other than pursuant to Section 4.5 Escrow Agent is
authorized to deliver the Earnest Money to the party hereto entitled to same
pursuant to the terms hereof on or before the tenth (10th) business day
following receipt by Escrow Agent and the non-terminating party of written
notice of such termination from the terminating party, unless the other party
hereto notifies Escrow Agent that it disputes the right of the other party to
receive the Earnest Money. In such event, Escrow Agent may interplead the
Earnest Money into a court of competent jurisdiction in the county in which the
Property is located. All attorneys' fees and costs and Escrow Agent's costs and
expenses incurred in connection with such interpleader shall be assessed against
the party that is not awarded the Earnest Money, or if the Earnest Money is
distributed in part to both parties, then in the inverse proportion of such
distribution.
Exhibit 10.22 - Page 6
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3.4.1 Earnest Money Under Bond Purchase Agreement.
The Earnest Money described herein is the same as, and not in addition to,
the "Earnest Money" described in the Bond Purchase Agreement. In any instance in
which the Title Company is authorized to deliver the Earnest Money to Seller
pursuant to this Agreement, such Earnest Money shall be disbursed pursuant to
written instructions executed by Seller and Bondholder (subject to the right of
Purchaser to object thereto as provided in Section 3.4), and in the absence
thereof may be interplead by the Title Company. In any instance in which the
Title Company is authorized to return the Earnest Money to Purchaser pursuant to
the terms of this Agreement, the Title Company shall not return the Earnest
Money to Purchaser unless Purchaser is also entitled to a return of the Earnest
Money under the Bond Purchase Agreement. In any instance in which the Earnest
Money is to be applied to the Purchase Price under this Agreement and the
Purchase Price, as defined in the Bond Purchase Agreement, the credit will be
apportioned pursuant to written instructions executed by Seller and Bondholder.
ARTICLE 4 - Due Diligence
4.1 Due Diligence Materials To Be Delivered.
To the extent such items are in Seller's possession, Seller shall deliver
to Purchaser the following (the "Property Information") on or before the
Property Information Delivery Date:
4.1.1 Rent Roll.
A current rent roll ("Rent Roll") for the Property;
4.1.2 Financial Information.
Copy of operating statements and a summary of capital expenditures
pertaining to the Property for the twelve (12) months preceding the Effective
Date of this Agreement or such lesser period as Seller has owned the Property
("Operating Statements");
4.1.3 Lease Form.
Copy of Seller's current standard lease form;
4.1.4 Environmental Reports.
Copy of any environmental reports or site assessments related to the
Property prepared for the benefit of Seller;
4.1.5 Tax Statements.
Copy of ad valorem tax statements relating to the Property for the current
tax period;
4.1.6 Title and Survey.
Copy of Seller's most current title insurance information and survey of the
Property;
4.1.7 Service Contracts.
A list, together with copies, of service, supply, equipment rental, and
other service contracts related to the operation of the Property ("Service
Contracts");
4.1.8 Personal Property.
A list of Tangible Personal Property; and
4.1.9 Bond Documents.
Copies of the Bond Documents. Seller shall also permit Purchaser to
inspect, at Seller's office or where otherwise held, to the extent in Seller's
possession, the lease files, low-income compliance documentation, and other tax
related materials pertaining to the Bonds and the Bond Documents.
4.2 Due Diligence Materials To Be Made Available.
To the extent such items are in Seller's possession, Seller shall make
available to Purchaser for Purchaser's review, at Seller's option at either the
offices of Seller's Asset Manager or property manager or at the Property, the
following items and information (the "Additional Property Information") on or
before the Property Information Delivery Date, and Purchaser at its expense
shall have the right to make copies of same:
4.2.1 Lease Files.
The lease files for all tenants, including the Leases, amendments,
guaranties, any letter agreements and assignments which are then in effect
("Lease Files");
Exhibit 10.22 - Page 7
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4.2.2 Maintenance Records and Warranties.
Maintenance work orders for the twelve (12) months preceding the Effective
Date of this Agreement and warranties, if any, on roofs, air conditioning units,
fixtures and equipment;
4.2.3 Plans and Specifications.
Building plans and specifications relating to the Property; and
4.2.4 Licenses, Permits and Certificates of Occupancy.
Licenses, permits and certificates of occupancy relating to the property.
4.3 Physical Due Diligence.
Commencing on the Effective Date and continuing until the Closing,
Purchaser shall have reasonable access to the Property at all reasonable times
during normal business hours, upon appropriate notice to tenants as permitted or
required under the Leases, for the purpose of conducting reasonably necessary
tests, including surveys and architectural, engineering, geotechnical and
environmental inspections and tests, provided that (i) Purchaser must give
Seller twenty-four (24) hours' prior telephone or written notice of any such
inspection or test, and with respect to any intrusive inspection or test (i.e.,
core sampling) must obtain Seller's prior written consent (which consent may be
given, withheld or conditioned in Seller's sole discretion), (ii) prior to
performing any inspection or test, Purchaser must deliver a certificate of
insurance to Seller evidencing that Purchaser and its contractors, agents and
representatives have in place reasonable amounts of comprehensive general
liability insurance and workers compensation insurance for its activities on the
Property in terms and amounts reasonably satisfactory to Seller covering any
accident arising in connection with the presence of Purchaser, its contractors,
agents and representatives on the Property, which insurance shall name Seller
and Asset Manager as additional insureds hereunder, and (iii) all such tests
shall be conducted by Purchaser in compliance with Purchaser's responsibilities
set forth in Section 4.12 below. Purchaser shall bear the cost of all such
inspections or tests and shall be responsible for and act as the generator with
respect to any wastes generated by those tests. Subject to the provisions of
Section 4.8 hereof, Purchaser or Purchaser's representatives may meet with any
tenant; provided, however, Purchaser must contact Seller at least forty-eight
(48) hours in advance by telephone or fax to inform Seller of Purchaser's
intended meeting and to allow Seller the opportunity to attend such meeting if
Seller desires. Subject to the provisions of Section 4.8 hereof, Purchaser or
Purchaser's representatives may meet with any governmental authority for any
good faith, reasonable purpose in connection with the transaction contemplated
by this Agreement; provided, however, Purchaser shall, to the extent reasonably
practical, contact Seller at least forty-eight (48) hours in advance by
telephone or fax to inform Seller of Purchaser's intended meeting and to allow
Seller the opportunity to attend such meeting if Seller desires.
4.4 Assumption of Bond Documents; Release.
On or before April 5, 1999, Purchaser shall (i) submit to the Issuer, the
Trustee, and all other required entities and their respective agents and counsel
(the "Bond Parties") a formal request or application (the "Application") seeking
approval (the "Approval") by the Issuer, Trustee and all such other required
entities of (1) the acquisition by Purchaser of the Property, (2) the assumption
by Purchaser of the obligations of Seller as "Developer" under the Bond
Documents, (3) the release (the "Release") of Seller and Bondholder from all
obligations under, or arising out of or in connection with the Bonds and the
Bond Documents, and (4) the purchase by Purchaser or an affiliate or designee of
Purchaser of the Bonds and the assumption by Purchaser or such affiliate or
designee of the obligations of Bondholder as credit enhancer and co-mortgagee
under the Bond Documents pursuant to the Bond Purchase Agreement; and (ii)
submit to the Bond Parties all materials and documents required by the
Application or which Purchaser reasonably anticipates will be required as a
condition to the Approval. In addition, Purchaser thereafter shall promptly
provide the Bond Parties with all additional materials and documents that any of
the Bond Parties deems appropriate to facilitate the Approval of the
Application. Purchaser's Application shall not seek approval of any credit
enhancement arrangement or any restructure or refunding of the Bonds without
Seller's written approval. Copies of the Application and all Application
materials will be promptly provided to Seller, and copies of all documents which
Purchaser receives from any of the Bond Parties shall be provided to Seller
within five (5) business days following receipt thereof by Purchaser. Purchaser
Exhibit 10.22 - Page 8
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shall have until the last day of the Inspection Period to obtain the written
Approval from all necessary Bond Parties, including the issuance of any required
opinions of bond counsel. If the Approval does not contain or provide for the
Release, Purchaser shall expressly so notify Seller in writing, and Seller in
such instance may elect, by written notice to Purchaser given with ten (10) days
of receipt of such written notice from Purchaser, to terminate this Agreement,
whereupon the Earnest Money shall be returned to Purchaser, Purchaser shall pay
the Bond Party Costs, and the parties shall have no further obligations
hereunder except for obligations that expressly survive the termination hereof.
4.5 Due Diligence/Termination Right.
Purchaser shall have through the last day of the Inspection Period in which
to (i) examine, inspect, and investigate the Property Information and the
Additional Property Information (collectively, the "Property Documents") and the
Property and, in Purchaser's sole and absolute judgment and discretion,
determine whether the Property is acceptable to Purchaser, (ii) obtain all
necessary internal approvals, and (iii) satisfy all other contingencies of
Purchaser. Notwithstanding anything to the contrary in this Agreement, Purchaser
may terminate this Agreement for any reason or no reason by giving written
notice of termination to Seller and Escrow Agent (the "Due Diligence Termination
Notice") on or before the last day of the Inspection Period. If Purchaser does
not give a Due Diligence Termination Notice, this Agreement shall continue in
full force and effect, Purchaser shall be deemed to have waived its right to
terminate this Agreement pursuant to Section 4.4 and this Section 4.5, and
Purchaser shall be deemed to have acknowledged that it has received or had
access to all Property Documents and conducted all inspections and tests of the
Property that it considers important.
4.6 Return of Documents and Reports.
If this Agreement terminates for any reason other than Seller's default
hereunder or Bondholder's default under the Bond Purchase Agreement, Purchaser
shall promptly (i) return and/or deliver to Seller all Property Documents and
copies thereof, and (ii) pay any amounts due or payable to any of the Bond
Parties or their respective counsel or advisors which are incurred as a result
of the transactions contemplated by this Agreement, the Bond Purchase Agreement
or as a result of other transactions proposed by Purchaser (the "Bond Party
Costs"). Additionally, if this Agreement terminates for any reason other than
Seller's default, then Purchaser must deliver to Seller copies of all third
party reports, investigations and studies, other than economic analyses
(collectively, the "Reports" and, individually, a "Report") prepared for
Purchaser in connection with its due diligence review of the Property. The
Reports shall be delivered to Seller without any representation or warranty of
any kind, including the completeness or accuracy of the Reports or any other
matter relating thereto, and Seller shall have no right to rely on any Report
without the written consent of the party preparing same. Purchaser's obligation
to deliver the Property Documents, and the Reports to Seller and to pay the Bond
Party Costs shall survive the termination of this Agreement.
4.7 Service Contracts.
On or prior to the last day of the Inspection Period, Purchaser will advise
Seller in writing of those Service Contracts (previously disclosed by Seller to
Purchaser) which Purchaser will assume and those Service Contracts (previously
disclosed to Purchaser) which Purchaser requests that Seller deliver written
termination at or prior to Closing, provided Seller shall have no obligation to
terminate, and Purchaser shall be obligated to assume, any Service Contracts
(previously disclosed by Seller to Purchaser) which by their terms cannot be
terminated without penalty or payment of a fee. Seller shall deliver at Closing
notices of termination of all Service Contracts that are not so assumed.
Purchaser must assume the obligations arising from and after the Closing Date
under those Service Contracts (i) that Purchaser has agreed to assume, or that
Purchaser is obligated to assume pursuant to this Section 4.7, and (ii) for
which a termination notice is delivered as of or prior to Closing but for which
termination is not effective until after Closing.
4.8 Proprietary Information; Confidentiality.
Purchaser acknowledges that, to the extent not already in the public
domain, the Property Documents are proprietary and confidential and will be
delivered to Purchaser solely to assist Purchaser in determining the feasibility
of purchasing the Property. Purchaser shall not use the Property Documents for
any purpose other than as set forth in the preceding sentence. Purchaser shall
not disclose the contents to any person other than to the Bond Parties and those
persons
Exhibit 10.22 - Page 9
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(including Purchaser's lawyers, accountants, investors, purchasers of the Bonds
from Purchaser, and advisors) who are responsible for determining the
feasibility of Purchaser's acquisition of the Property and who have agreed to
preserve the confidentiality of such information as required hereby
(collectively, "Permitted Outside Parties"). At any time and from time to time,
within two (2) business days after Seller's request, Purchaser shall deliver to
Seller a list of all parties to whom Purchaser has provided any Property
Documents or any information taken from the Property Documents. Purchaser shall
not divulge the contents of the Property Documents and other information except
in strict accordance with the confidentiality standards set forth in this
Section 4.8. In permitting Purchaser to review the Property Documents or any
other information, Seller has not waived any privilege or claim of
confidentiality with respect thereto, and no third party benefits or
relationships of any kind, either express or implied, have been offered,
intended or created.
4.9 No Representation or Warranty by Seller.
Purchaser acknowledges that, except as expressly set forth in this
Agreement, neither Seller nor Asset Manager has made nor makes any warranty or
representation regarding the truth, accuracy or completeness of the Property
Documents or the source(s) thereof. In particular, Seller makes no
representations or warranties as to the suitability or usefulness of the Bonds
as financing for the Property or that the Bonds may be refunded, reissued or
resold. Purchaser further acknowledges that some if not all of the Property
Documents were prepared by third parties other than Seller and Asset Manager.
Seller and Asset Manager expressly disclaim any and all liability for
representations or warranties, express or implied, statements of fact and other
matters contained in such Property Documents, or for omissions from the Property
Documents, or in any other written or oral communications transmitted or made
available to Purchaser. Purchaser shall rely solely upon its own investigation
with respect to the Property, including, without limitation, the Property's
physical, environmental or economic condition, compliance or lack of compliance
with any ordinance, order, permit or regulation or any other attribute or matter
relating thereto, provided that Purchaser may rely on the representations of
Seller set forth in Section 9.1 hereof. Seller and Asset Manager have not
undertaken any independent investigation as to the truth, accuracy or
completeness of the Property Documents and are providing the Property Documents
solely as an accommodation to Purchaser.
4.10 Purchaser's Responsibilities.
In conducting any inspections, investigations or tests of the Property
and/or Property Documents, Purchaser and its agents and representatives shall:
(i) not unreasonably disturb the tenants or interfere with their use of the
Property pursuant to their respective Leases; (ii) not interfere with the
operation and maintenance of the Property; (iii) not damage any part of the
Property or any personal property owned or held by any tenant or any third
party; (iv) not injure or otherwise cause bodily harm to Seller, Asset Manager,
or their respective agents, guests, invitees, contractors and employees or any
tenants or their guests or invitees; (v) comply with all applicable laws; (vi)
promptly pay when due the costs of all tests, investigations, and examinations
done with regard to the Property; (vii) not permit any liens to attach to the
Real Property by reason of the exercise of its rights hereunder; (viii) repair
any damage to the Real Property resulting from any such inspection or tests; and
(ix) not reveal or disclose prior to Closing any information obtained during the
Inspection Period concerning the Property and the Property Documents to anyone
other than the Permitted Outside Parties, in accordance with the confidentiality
standards set forth in Section 4.8 above, or except as may be otherwise required
by law.
4.11 Purchaser's Agreement to Indemnify.
Purchaser indemnifies and holds Seller and Asset Manager harmless from and
against any and all liens, claims, causes of action, damages, liabilities and
expenses (including reasonable attorneys' fees) arising out of the Application
or out of Purchaser's inspections or tests permitted under this Agreement or any
violation of the provisions of Sections 4.3, 4.8, and 4.10; provided, however,
the indemnity shall not extend to protect Seller from any pre-existing
liabilities for states of fact, matters or conditions merely discovered by
Purchaser in performing permitted inspections and tests hereunder (i.e., latent
environmental contamination) so long as Purchaser's actions do not aggravate any
pre-existing liability of Seller. Purchaser's obligations. under this Section
4.11 shall survive the termination of this Agreement and shall survive the
Closing.
Exhibit 10.22 - Page 10
<PAGE>
4.12 Environmental Studies; Seller's Right to Terminate.
As additional consideration for the transaction contemplated in this
Agreement, Purchaser must provide to Seller, immediately following the receipt
of same by Purchaser, copies of any and all reports, tests or studies involving
contamination of or other environmental concerns relating to the Property;
provided, however, Purchaser shall have no obligation to cause any such tests or
studies to be performed on the Property. Seller acknowledges that Purchaser has
not made and does not make any warranty or representation regarding the truth or
accuracy of any such studies or reports. Notwithstanding Section 4.11 above,
Purchaser shall have no liability or culpability of any nature as a result of
having provided such information to Seller or as a result of Seller's reliance
thereon or arising out of the fact that Purchaser merely conducted such tests or
studies, so long as Purchaser's actions do not aggravate any pre-existing
liability of Seller. In the event that such reports, tests or studies indicate
the existence or reasonable potential existence of any contamination of any
portion of the Property that is not disclosed in the Property Documents and that
is material (meaning that the reasonably estimated cost of remediation and/or
other liability associated therewith, as determined in good faith by Seller's
environmental consultants, exceeds $50,000.00), then Seller may terminate this
Agreement by giving written notice to Purchaser within ten (10) business days
after Purchaser has provided Seller with copies of such reports, tests or
studies, whereupon the Earnest Money shall be returned to Purchaser, the parties
shall have no further obligations hereunder except for obligations that
expressly survive the termination hereof, and Seller shall pay to Purchaser an
amount equal to the lesser of (A) Purchaser's actual out-of-pocket expenditures
incurred directly in connection with negotiating this Agreement, seeking the
Approval, and/or conducting due diligence activities contemplated hereunder, or
(B) Fifty Thousand and No/100 Dollars ($50,000.00), provided, however, that
Purchaser must make written demand of Seller for such reimbursement and provide
Seller reasonable supporting documentation of actual expenditures within thirty
(30) days of the termination of this Agreement, and if Purchaser fails to
provide such written demand and supporting documentation within such thirty (30)
day period, then Purchaser shall be deemed to have forever waived its right to
recover any amount from Seller.
ARTICLE S - Title and Survey
5.1 Title Commitment.
Seller shall cause to be prepared and delivered to Purchaser on or before
the Title Commitment Delivery Date: (i) a current commitment for title insurance
or preliminary title report (the "Title Commitment") issued by the Title
Company, in the amount of the Purchase Price and on an ALTA 1992 Standard Form
commitment, with Purchaser as the proposed insured, and (ii) copies of all
documents of record referred to in the Title Commitment as exceptions to title
to the Property.
5.2 New or Updated Survey.
Purchaser may elect to obtain a new survey or revise, modify, or re-certify
an existing survey ("Survey") as necessary in order for the Title Company to
delete the survey exception from the Title Policy or to otherwise satisfy
Purchaser's objectives.
5.3 Title Review.
During the Title and Survey Review Period, Purchaser shall review title to
the Property as disclosed by the Title Commitment and the Survey. Seller shall
have no obligation to cure title objections except (i) financing liens of an
ascertainable amount created by, under or through Seller (except the Bond
Documents), and (ii) mechanics' liens of an ascertainable amount arising from
the performance of work or repairs at the request or instance of Seller, which
liens Seller shall cause to be released at or prior to Closing (with Seller
having the right to apply the Purchase Price or a portion thereof for such
purpose), and Seller shall deliver the Property free and clear of any such
financing liens (except the Bond Documents) Seller further agrees to remove any
exceptions or encumbrances to title which are voluntarily created by, under or
through Seller after the Effective Date without Purchaser's consent (if
requested, such consent shall not be unreasonably withheld or delayed). The term
"Permitted Exceptions" shall mean: the specific exceptions (excluding exceptions
that are part of the promulgated title insurance form) in the Title Commitment
that the Title Company has not agreed to remove from the Title Commitment as of
the end of the Title and Survey Review Period and that Seller is not required to
remove as provided above; matters created by, through or under Purchaser; items
shown on the Survey which have not been removed as of the end of the Inspection
Period; real estate taxes not yet due and payable; tenants, as tenants only,
under the Leases; and any licensees under any Service Contracts not terminated
as of Closing.
Exhibit 10.22 - Page 11
<PAGE>
5.4 Delivery of Title Policy at Closing.
In the event that the Title Company or other title insurer satisfactory to
Purchaser does not issue at Closing, or unconditionally commit at Closing to
issue, to Purchaser, an owner's title policy in accordance with the Title
Commitment, insuring Purchaser's title to the Property in the amount of the
Purchase Price, subject only to (a) the standard exclusions from coverage
contained in such policy, (b) the Permitted Exceptions and (c) such standard
exceptions from coverage as are contained in such policy, except to the extent
Purchaser requests removal of such standard exceptions, provides any necessary
documentation, and pays any applicable premium associated with such removal
(provided that removal of such exceptions is permitted under applicable
regulation and does not obligate Seller to furnish any documentation or incur
any liability in excess of that otherwise provided for hereunder) (the "Title
Policy"), Purchaser shall have the right to terminate this Agreement, in which
case the Earnest Money shall be immediately returned to Purchaser and the
parties hereto shall have no further rights or obligations, other than those
that by their terms survive the termination of this Agreement.
ARTICLE 6 - Operations and Risk of Loss
6.1 Ongoing Operations.
From the Effective Date through Closing:
6.1.1 Leases and Service Contracts.
Seller will perform its material obligations under the Leases and Service
Contracts.
6.1.2 New Contracts.
Except as provided in Subsection 6.1.4, Seller will not enter into any
contract that will be an obligation affecting the Property subsequent to the
Closing, except contracts entered into in the ordinary course of business that
are terminable without cause and without the payment of any termination penalty
on not more than thirty (30) days' prior notice.
6.1.3 Maintenance of Improvements; Removal of Personal Property.
Subject to Sections 6.2 and 6.3, Seller shall maintain all Improvements
substantially in their present condition (ordinary wear and tear and casualty
excepted) and in a manner consistent with Seller's maintenance of the
Improvements during Seller's period of ownership. Seller will continue to
maintain the types and amounts of insurance coverage which Seller currently
maintains with respect to the Property. Seller will not remove any Tangible
Personal Property except as may be required for necessary repair or replacement,
and replacement shall be of approximately equal quality and quantity as the
removed item of Tangible Personal Property.
6.1.4 Leasing.
Seller will continue to lease apartment units in the Improvements in the
ordinary course of business; provided that after the expiration of Inspection
Period hereunder (if Purchaser shall not have executed its right to terminate
pursuant to Section 4.5 hereof and shall have deposited the Additional Earnest
Money), Seller agrees to use such standard lease form as Purchaser may submit to
Seller for use at the Property, subject to Seller's reasonable review and
approval.
6.2 Damage.
If prior to Closing the Property is damaged by fire or other casualty,
Seller shall estimate the cost to repair and the time required to complete
repairs and will provide Purchaser written notice of Seller's estimation (the
"Casualty Notice") as soon as reasonably possible after the occurrence of the
casualty.
6.2.1 Material.
In the event of any Material Damage to or destruction of the Property or
any portion thereof prior to Closing, Purchaser may, at its option, terminate
this Agreement by delivering written notice to the other on or before the
expiration of thirty (30) days after the date Seller delivers the Casualty
Notice to Purchaser (and if necessary, the Closing Date shall be extended to
give the parties the full thirty-day period to make such election and to obtain
insurance settlement agreements with Seller's insurers). Upon any such
termination, the Earnest Money shall be returned to Purchaser and the parties
hereto shall have no further rights or obligations hereunder, other than those
that by their terms survive the termination of this Agreement. If Purchaser does
not terminate this Agreement within said
Exhibit 10.22 - Page 12
<PAGE>
thirty (30) day period, then the parties shall proceed under this Agreement and
close on schedule (subject to extension of Closing as provided above), and as of
Closing Seller shall assign to Purchaser, without representation or warranty by
or recourse against Seller, all of Seller's rights in and to any resulting
insurance proceeds (including any rent loss insurance applicable to any period
on and after the Closing Date) due Seller as a result of such damage or
destruction and Purchaser shall assume full responsibility for all needed
repairs, and Purchaser shall receive a credit at Closing for any deductible
amount under such insurance policies (but the amount of the deductible plus
insurance proceeds shall not exceed the lesser of (A) the cost of repair or (B)
the Purchase Price and a pro rata share of the rental or business loss proceeds,
if any). For the purposes of this Agreement, "Material Damage" and "Materially
Damaged" means damage which, in Seller's reasonable estimation, exceeds
$500,000.00 to repair or which, in Seller's reasonable estimation, will take
longer than ninety (90) days to repair..
6.2.2 Not Material.
If the Property is not Materially Damaged, then neither Purchaser nor
Seller shall have the right to terminate this Agreement, and Seller shall, at
its option, either (i) repair the damage before the Closing in a manner
reasonably satisfactory to Purchaser, or (ii) credit Purchaser at Closing for
the reasonable cost to complete the repair (in which case Seller shall retain
all insurance proceeds and Purchaser shall assume full responsibility for all
needed repairs).
6.3 Condemnation.
If proceedings in eminent domain are instituted with respect to the
Property or any portion thereof, Purchaser may, at its option, by written notice
to Seller given within ten (10) days after Seller notifies Purchaser of such
proceedings (and if necessary the Closing Date shall be automatically extended
to give Purchaser the full ten-day period to make such election), either: (i)
terminate this Agreement, in which case the Earnest Money shall be immediately
returned to Purchaser and the parties hereto shall have no further rights or
obligations, other than those that by their terms survive the termination of
this Agreement, or (ii) proceed under this Agreement, in which event Seller
shall, at the Closing, assign to Purchaser its entire right, title and interest
in and to any condemnation award, and Purchaser shall have the sole right after
the Closing to negotiate and otherwise deal with the condemning authority in
respect of such matter. If Purchaser does not give Seller written notice of its
election within the time required above, then Purchaser shall be deemed to have
elected option (ii) above.
ARTICLE 7 - Closing
7.1 Closing.
The consummation of the transaction contemplated herein ("Closing") shall
occur on the Closing Date at the offices of Escrow Agent (or such other location
as may be mutually agreed upon by Seller and Purchaser). Funds for Closing shall
be deposited into and held by Escrow Agent in a closing escrow account with a
bank satisfactory to Purchaser and Seller. Upon satisfaction or completion of
all closing conditions and deliveries, the parties shall direct Escrow Agent to
immediately record and deliver the closing documents to the appropriate parties
and make disbursements according to the closing statements executed by Seller
and Purchaser.
7.2 Conditions to Parties' Obligation to Close.
In addition to all other conditions set forth herein, the obligation of
Seller, on the one hand, and Purchaser, on the other hand, to consummate the
transactions contemplated hereunder are conditioned upon the following:
7.2.1 Representations and Warranties.
The other party's representations and warranties contained herein shall be
true and correct in all material respects as of the date of this Agreement and
the Closing Date;
7.2.2 Deliveries.
As of the Closing Date, the other party shall have tendered all deliveries
to be made at Closing; and
7.2.3 Actions, Suits, etc.
There shall exist no pending or threatened actions, suits, arbitrations,
claims, attachments, proceedings, assignments for the benefit of creditors,
insolvency, bankruptcy, reorganization or other proceedings, against the other
party that would materially and adversely affect the operation or value of the
Property or the other party's ability to perform its obligations under this
Agreement.
Exhibit 10.22 - Page 13
<PAGE>
So long as a party is not in default hereunder, if any condition to such
party's obligation to proceed with the Closing hereunder has not been satisfied
by the other party as of the Closing Date (or such earlier date as is provided
herein), such party may, in its sole discretion, terminate this Agreement by
delivering written notice to the other party on or before the Closing Date (or
such earlier date as is provided herein), or elect to close (or to permit any
such earlier termination deadline to pass) notwithstanding the non-satisfaction
of such condition, in which event such party shall be deemed to have waived any
such condition. In the event such party elects to close (or to permit any such
earlier termination deadline to pass), notwithstanding the non-satisfaction of
such condition, said party shall be deemed to have waived said condition, and
there shall be no liability on the part of any other party hereto for breaches
of representations and warranties of which the party electing to close had
knowledge at the Closing.
7.3 Special Conditions to Parties' Obligation to Close.
In addition to all other conditions set forth herein, the following shall
apply:
7.3.1 Purchaser's Compliance with the Bond Purchase Agreement.
The Seller's obligation to consummate the transactions contemplated hereby
is conditioned upon the absence of any default by Purchaser under the Bond
Purchase Agreement and the consummation of the purchase of the "Bond Documents",
as described therein, unless the failure to consummate such purchase is
attributable to a default by the Bondholder under the Bond Purchase Agreement.
7.3.2 Bondholder's Compliance with the Bond Purchase Agreement.
The Purchaser's obligation to consummate the transactions contemplated
hereby is conditioned upon the absence of any default by Bondholder under the
Bond Purchase Agreement and the consummation of the sale of the "Bond Documents"
as described therein, unless the failure to consummate such sale is attributable
to a default by Purchaser under the Bond Purchase Agreement.
7.4 Seller's Deliveries in Escrow.
As of or prior to the Closing Date, Seller shall deliver in escrow to
Escrow Agent the following:
7.4.1 Deed.
A special warranty deed (as Seller's local counsel or Title Company shall
advise, warranting title only against any party claiming by, through or under
Seller) in form acceptable for recordation under the law of the state where the
Property is located and restating (in summary form) the provisions of Article 11
hereof and including a list of Permitted Exceptions to which the conveyance
shall be subject, executed and acknowledged by Seller, conveying to Purchaser
Seller's interest in the Real Property (the "Deed");
7.4.2 Bill of Sale, Assignment and Assumption.
A Bill of Sale, Assignment and Assumption of Leases and Contracts in the
form of Exhibit B attached hereto (the "Assignment"), executed and acknowledged
by Seller, vesting in Purchaser, with special warranty of title as to the
Personality but otherwise without warranty, Seller's right, title and interest
in and to the property described therein free of any claims, except for the
Permitted Exceptions to the extent applicable;
7.4.3 Conveyancing or Transfer Tax Forms or Returns.
Such conveyancing or transfer tax forms or returns, if any, as are required
to be delivered or signed by Seller by applicable state and local law in
connection with the conveyance of the Real Property;
7.4.4 FIRPTA.
A Foreign Investment in Real Property Tax Act affidavit executed by Seller;
7.4.5 Bonds.
Possession of the Bonds;
7.4.6 Bond Assignment.
An assignment and assumption agreement concerning the Bond Documents to
which Seller is a party executed by Seller in the form customarily used by the
Trustee and the Issuer, pursuant to which Seller assigns and conveys its
interest in the Bond Documents to which it is a party, and Purchaser, among
other things, assumes the obligations of "Developer" under the Bond Documents
(the "Bond Assignment);
Exhibit 10.22 - Page 14
<PAGE>
7.4.7 Authority.
Evidence of the existence, organization and authority of Seller and of the
authority of the persons executing documents on behalf of Seller reasonably
satisfactory to the underwriter for the Title Policy; and
7.4.8 Additional Documents.
Any additional documents that Purchaser, Escrow Agent or the Title Company
may reasonably require for the proper consummation of the transaction
contemplated by this Agreement (provided, however, no such additional document
shall expand any obligation, covenant, representation or warranty of Seller or
Purchaser or result in any new or additional obligation, covenant,
representation or warranty of Seller or Purchaser under this Agreement beyond
those expressly set forth in this Agreement).
7.5 Purchaser's Deliveries in Escrow.
As of or prior to the Closing Date, Purchaser shall deliver in escrow to
Escrow Agent the following:
7.5.1 Bill of Sale, Assignment and Assumption.
The Assignment, executed and acknowledged by Purchaser;
7.5.2 ERISA Letter.
A letter to Seller in the form of Exhibit C attached hereto duly executed
by Purchaser, confirming that Purchaser is not acquiring the Property with the
assets of an employee benefit plan as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA") and, in the event Purchaser is
unable or unwilling to make such a representation, Purchaser shall be deemed to
be in default hereunder, and Seller shall have the right to terminate this
Agreement and to receive and retain the Earnest Money;
7.5. Conveyancing or Transfer Tax Forms or Returns.
Such conveyancing or transfer tax forms or returns, if any, as are required
to be delivered or signed by Purchaser by applicable state and local law in
connection with the conveyance of Real Property;
7.5.4 Bond Assignment.
The Bond Assignment, executed by Purchaser; and
7.5.5 Additional Documents.
Any additional documents that Seller, Escrow Agent or the Title Company may
reasonably require for the proper consummation of the transaction contemplated
by this Agreement, provided, however, no such additional document shall expand
any obligation, covenant, representation or warranty of Purchaser or Seller or
result in any new or additional obligation, covenant, representation or warranty
of Purchaser or Seller under this Agreement beyond those expressly set forth in
this Agreement).
7.6 Closing Statements.
As of or prior to the Closing Date, Seller and Purchaser shall deposit with
Escrow Agent executed closing statements consistent with this Agreement in the
form required by Escrow Agent.
7.7 Purchase Price.
At or before 1:00 p.m. local time on the Closing Date, Purchaser shall
deliver to Escrow Agent the Purchase Price, less the Earnest Money that is
applied to the Purchase Price, plus or minus applicable prorations, in
immediate, same-day U.S federal funds wired for credit into Escrow Agent's
escrow account, which funds must be delivered in a manner to permit Escrow Agent
to deliver good funds to Seller or its designee on the Closing Date (and, if
requested by Seller, by wire transfer); in the event that Escrow Agent is unable
to deliver good funds to Seller or its designee on the Closing Date, then the
closing statements and related prorations will be revised as necessary.
7.8 Possession.
Seller shall deliver possession of the Property to Purchaser at the Closing
subject only to the Permitted Exceptions.
7.9 Delivery of Books and Records.
After the Closing, Seller shall deliver to the offices of Purchaser's
property manager or to the Real Property to the extent in Seller's or its
property manager's possession or control: Lease Files; maintenance records and
warranties; plans and specifications; licenses, permits and certificates of
occupancy; copies or originals of all books and records of account, contracts,
and copies of correspondence with tenants and suppliers; receipts for deposits,
unpaid bills and other papers or documents which pertain to the Property; all
advertising materials; booklets; keys; and other items, if any, used in the
operation of the Property.
Exhibit 10.22 - Page 15
<PAGE>
7.10 Notice to Tenants.
Seller and Purchaser shall deliver to each tenant immediately after the
Closing a notice regarding the sale in substantially the form of Exhibit D
attached hereto, or such other form as may be required by applicable state law.
ARTICLE 8 - Prorations, Deposits, Commissions
8.1 Prorations.
At Closing, the following items shall be prorated as of the date of Closing
with all items of income and expense for the Property and interest on the Bonds
being borne by Purchaser from and after (but including) the date of Closing:
Tenant Receivables and other income and rents; fees and assessments; prepaid
expenses and obligations under Service Contracts; accrued operating expenses;
interest on the Bonds; real and personal ad valorem taxes ("Taxes"); and any
assessments by private covenant for the then-current calendar year of Closing.
Specifically, the following shall apply to such prorations:
8.1.1 Taxes.
If Taxes for the year of Closing are not known or cannot be reasonably
estimated, Taxes shall be prorated based on Taxes for the year prior to Closing.
Any additional Taxes relating to the year of Closing or prior years arising out
of a change in the use of the Real Property or a change in ownership shall be
assumed by Purchaser effective as of Closing and paid by Purchaser when due and
payable, and Purchaser shall indemnify Seller from and against any and all such
Taxes, which indemnification obligation shall survive the Closing.
8.1.2 Utilities.
Purchaser shall take all steps necessary to effectuate the transfer of all
utilities to its name as of the Closing Date, and where necessary, post deposits
with the utility companies. Seller shall ensure that all utility meters are read
as of the Closing Date. Seller shall be entitled to recover any and all deposits
held by any utility company as of the Closing Date.
8.1.3 Tenant Receivables.
Rents due from tenants under Leases and operating expenses and/or taxes
payable by tenants under Leases (collectively, "Tenant Receivables") shall be
apportioned on the basis of the period for which the same is payable and if, as
and when collected, as follows:
(a) Purchaser shall apply rent and other income received from tenants under
Leases after Closing in the following order of priority: (i) first, to
payment of the current Tenant Receivables then due for the month in which
the Closing Date occurs, which amount shall be apportioned between
Purchaser and Seller as of the Closing Date as set forth in Section 8.1
hereof (with Seller's portion thereof to be delivered to Seller); (ii)
second, [intentionally omitted]; (iii) third, to Tenant Receivables first
coming due after Closing and applicable to the period of time after
Closing, which amount shall be retained by Purchaser; and (iv) thereafter,
to delinquent Tenant Receivables which were due and payable as of Closing
but not collected by Seller as of Closing (collectively, "Uncollected
Delinquent Tenant Receivables"), which amount shall be delivered to Seller.
Notwithstanding the foregoing, Seller shall have the right to pursue the
collection of Uncollected Delinquent Tenant Receivables for a period of one
(1) year after Closing without prejudice to Seller's rights or Purchaser's
obligations hereunder, provided, however, Seller shall have no right to
institute any legal proceedings against any such tenant so long as such
tenant remains in occupancy at the Property or to cause any such tenant to
be evicted or to exercise any other "landlord" remedy (as set forth in such
tenant's Lease) against such tenant. Any sums received by Purchaser to
which Seller is entitled shall be held in trust for Seller on account of
such past due rents payable to Seller, and Purchaser shall remit to Seller
any such sums received by Purchaser to which Seller is entitled within ten
(10) business days after receipt thereof less reasonable, actual costs and
expenses of collection, including reasonable attorneys' fees, court costs
and disbursements, if any. Seller expressly agrees that if Seller receives
any amounts after the Closing Date which are attributable, in whole or in
part, to any period after the Closing Date, Seller shall remit to Purchaser
that portion of the monies so received by Seller to which Purchaser is
entitled within ten (10) business days after receipt thereof The provisions
of this Subsection 8.1.3(a) shall survive the Closing.
(b) [Reserved]
Exhibit 10.22 - Page 16
<PAGE>
8.2 [Reserved]
8.3 Closing Costs.
Closing costs shall be allocated between Seller and Purchaser in accordance
with Section 1.2.
8.4 Final Adjustment After Closing.
If final bills are not available or cannot be issued prior to Closing for
any item being prorated under Section 8.1, then Purchaser and Seller agree to
allocate such items on a fair and equitable basis as soon as such bills are
available, final adjustment to be made as soon as reasonably possible after the
Closing. Payments in connection with the final adjustment shall be due within
thirty (30) days of written notice. All such rights and obligations shall
survive the Closing.
8.5 Tenant Deposits.
All tenant security deposits collected and not applied by Seller (and
interest thereon if required by law or contract) shall be transferred or
credited to Purchaser at Closing. As of the Closing, Purchaser shall assume
Seller's obligations related to tenant security deposits, but only to the extent
they are credited or transferred to Purchaser.
8.6 Commissions.
Seller shall be responsible to Broker for a real estate sales commission at
Closing (but only in the event of a Closing in strict accordance with this
Agreement) in accordance with a separate agreement between Seller and Broker.
Broker may share its commission with any other licensed broker involved in this
transaction, but the payment of the commission by Seller to Broker shall fully
satisfy any obligations of Seller to pay a commission hereunder. Under no
circumstances shall Seller owe a commission or other compensation directly to
any other broker, agent or person. Any cooperating broker shall not be an
affiliate, subsidiary or related in any way to Purchaser. Other than as stated
above in this Section 8.6, Seller and Purchaser each represent and warrant to
the other that no real estate brokerage commission is payable to any person or
entity in connection with the transaction contemplated hereby, and each agrees
to and does hereby indemnify and hold the other harmless against the payment of
any commission to any other person or entity claiming by, through or under
Seller or Purchaser, as applicable. This indemnification shall extend to any and
all claims, liabilities, costs and expenses (including reasonable attorneys'
fees and litigation costs) arising as a result of such claims and shall survive
the Closing.
ARTICLE 9 - Representations and Warranties
9.1 Seller's Representations and Warranties.
Seller represents and warrants to Purchaser that:
9.1.1 Organization and Authority.
Seller has been duly organized, is validly existing, and is in good
standing in the state in which it was formed and is qualified to do business in
the State of Florida. Seller has the full right and authority and has obtained
any and all consents required to enter into this Agreement and to consummate or
cause to be consummated the transactions contemplated hereby. This Agreement has
been, and all of the documents to be delivered by Seller at the Closing will be
authorized and executed and constitute, or will constitute, as appropriate, the
valid and binding obligation of Seller, enforceable in accordance with their
terms.
9.1.2 Conflicts and Pending Actions.
There is no agreement to which Seller is a party or, to Seller's knowledge,
that is binding on Seller which is in conflict with this Agreement. To Seller's
knowledge, there is no action or proceeding pending or threatened against Seller
or relating to the Property, which challenges or impairs Seller's ability to
execute or perform its obligations under this Agreement.
9.1.3 [Reserved]
9.1. Service Contracts.
To Seller's knowledge, the list of Service Contracts to be delivered to
Purchaser pursuant to this Agreement will be correct and complete as of the date
of its delivery.
9.1.5 Notices from Governmental Authorities.
To Seller's knowledge, Seller has not received from any governmental
authority written notice of any material violation of any laws applicable (or
alleged to be applicable) to the Real Property, or any part thereof, that has
not been corrected, except as may be reflected by the Property Documents.
Exhibit 10.22 - Page 17
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9.2 Purchaser's Representations and Warranties.
Purchaser represents and warrants to Seller that:
9.2.1 Organization and Authority.
Purchaser has been duly organized and is validly existing as a corporation
in good standing in the State of Florida and is qualified to do business in the
state in which the Real Property is located. Purchaser has the full right and
authority and has obtained any and all consents required to enter into this
Agreement and to consummate or cause to be consummated the transactions
contemplated hereby. This Agreement has been, and all of the documents to be
delivered by Purchaser at the Closing will be, authorized and properly executed
and constitute, or will constitute, as appropriate, the valid and binding
obligation of Purchaser, enforceable in accordance with their terms.
9.2.2 Conflicts and Pending Action.
There is no agreement to which Purchaser is a party or to Purchaser's
knowledge binding on Purchaser which is in conflict with this Agreement. There
is no action or proceeding pending or, to Purchaser's knowledge, threatened
against Purchaser which challenges or impairs Purchaser's ability to execute or
perform its obligations under this Agreement.
9.3 Survival of Representations and Warranties.
The representations and warranties set forth in this Article 9 are made as
of the date of this Agreement and, except in the case of Subsection 9.1.5, are
remade as of the Closing Date and shall not be deemed to be merged into or
waived by the instruments of Closing, but shall survive the Closing for a period
of six (6) months (the "Survival Period"). Terms such as "to Seller's
knowledge," "to the best of Seller's knowledge" or like phrases mean the actual
present knowledge of Stacey Pickett, asset manager of the Property ("Asset
Manager's Employee"), after inquiry of Seller's on-site Property manager but
without any other duty of inquiry or investigation; provided that so qualifying
Seller's knowledge shall in no event give rise to any personal liability on the
part of Asset Manager's Employee or any other officer or employee of Seller or
its Asset Manager, on account of any breach of any representation or warranty
made by Seller herein. Said terms do not include constructive knowledge, imputed
knowledge, or knowledge Seller or such persons do not have but could have
obtained through further investigation or inquiry. No broker, agent, or party
other than Seller is authorized to make any representation or warranty for or on
behalf of Seller (although the actual present knowledge of the Asset Manager
Employee is imputed to Seller as hereinabove provided). Each party shall have
the right to bring an action against the other on the breach of a representation
or warranty hereunder, but only on the following conditions: (i) the party
bringing the action for breach first learns of the breach after Closing and
files such action within the Survival Period, and (ii) neither party shall have
the right to bring a cause of action for a breach of a representation or
warranty unless the damage to such party on account of such breach (individually
or when combined with damages from other breaches) equals or exceeds $25,000.00.
Neither party shall have any liability after Closing for the breach of a
representation or warranty hereunder of which the other party hereto had
knowledge as of Closing. Furthermore, Purchaser agrees that the maximum
aggregate liability of Seller for the alleged breach of any or all
representations or warranties set forth in this Agreement and Bondholder for the
alleged breach of any or all representations and warranties set forth in the
Bond Purchase Agreement is limited to $400,000.00; provided that any breach of a
representation or warranty that occurs prior to Closing shall be governed by
Article 10. The provisions of this Section 9.3 shall survive the Closing.
9.4 [Intentionally Omitted]
ARTICLE 10 Default and Remedies
10.1 Seller's Remedies.
If Purchaser fails to perform its obligations pursuant to this Agreement at
or prior to Closing for any reason except failure by Seller to perform
hereunder, or if prior to Closing any one or more of Purchaser's representations
or warranties are breached in any material respect, Seller shall be entitled, as
its sole remedy (except as provided in Sections 4.11, 8.6, 10.3 and 10.4
hereof), to terminate this Agreement and recover the Earnest Money as liquidated
damages and not as penalty, in full satisfaction of claims against Purchaser
hereunder. Seller and
Exhibit 10.22 - Page 18
<PAGE>
Purchaser agree that Seller's damages resulting from Purchaser's default are
difficult, if not impossible, to determine and the Earnest Money is a fair
estimate of those damages which has been agreed to in an effort to cause the
amount of such damages to be certain. Notwithstanding anything in this Section
10.1 or in Exhibit F to the contrary, in the event of Purchaser's default or a
termination of this Agreement, Seller shall have all remedies available at law
or in equity in the event Purchaser or any party related to or affiliated with
Purchaser is asserting any claims or fight to the Property that would otherwise
delay or prevent Seller from having clear, indefeasible and marketable title to
the Property, and in said event Seller shall not be required to submit such
matter to arbitration as contemplated by Exhibit F. In all other events Seller's
remedies shall be limited to those described in this Section 10.1 and Sections
4.11, 8.6, 10.3 and 10.4 hereof. If Closing is consummated, Seller shall have
all remedies available at law or in equity in the event Purchaser fails to
perform any obligation of Purchaser under this Agreement which specifically
survives Closing.
10.2 Pnrcliaser's Remedies.
If Seller fails to perform its obligations pursuant to this Agreement for
any reason except failure by Purchaser to perform hereunder, or if prior to
Closing any one or more of Seller's representations or warranties are breached
in any material respect, Purchaser shall elect, as its sole remedy, either to
(a) terminate this Agreement by giving Seller timely written notice of such
election prior to or at Closing and recover the Earnest Money, (b) enforce
specific performance, or (c) waive said failure or breach and proceed to
Closing. Notwithstanding anything herein to the contrary, Purchaser shall be
deemed to have elected to terminate this Agreement if Purchaser fails to deliver
to Seller written notice of its intent to file a claim or assert a cause of
action for specific performance against Seller on or before ten (10) business
days following the scheduled Closing Date or, having given such notice, fails to
file a lawsuit asserting such claim or cause of action in the county in which
the Property is located within two (2) months following the scheduled Closing
Date. Purchaser's remedies shall be limited to those described in this Section
10.2 and Sections 10.3 and 10.4 hereof. If, however, (i) the equitable remedy of
specific performance is not available for any reason other than as provided in
clause (ii) below, Purchaser may seek any other right or remedy available at law
or in equity, provided that in no event shall the aggregate liability of Seller
under this clause (i) and Bondholder under the corresponding provisions of the
Bond Purchase Agreement exceed the lesser of (1) $75,000.00 or (2) the actual
reasonable out-of-pocket expenses incurred by Purchaser and paid (A) to
Purchaser's attorneys in connection with the negotiation of this Agreement, (B)
to the Bond Parties in submitting the Application and seeking the Approval, and
(C) to unrelated and unaffiliated third party consultants in connection with the
performance of examinations, inspections and/or investigations pursuant to
Article 4; or (ii) the remedy of specific performance is not available solely as
a result of a willful or intentional breach of this Agreement by Seller for the
purpose of conveying the Property to a third party and the subsequent conveyance
by Seller of the Property to such third party (an "Intentional Breach and
Conveyance"), Purchaser may seek any other right or remedy available at law or
in equity, provided that in no event shall the aggregate liability of Seller
under this clause (ii) and Bondholder under the corresponding provision of the
Bond Purchase Agreement exceed $500,000.00. For purposes of this provision,
specific performance shall be considered not available to Purchaser only if a
court of competent jurisdiction (or an arbitrator, as per Exhibit F) determines
conclusively that Purchaser is entitled to specific performance on the merits of
its claim but said court or arbitrator is unable to enforce specific performance
due to reasons beyond the control of the court or arbitrator and, in the case of
clause (ii) above, said Court or arbitrator shall have further conclusively
determined that an Intentional Breach and Conveyance shall have occurred. IN NO
EVENT SHALL SELLER'S DIRECT OR INDIRECT PARTNERS, SHAREHOLDERS, OWNERS OR
AFFILIATES, ANY OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY
AFFILIATE OR CONTROLLING PERSON THEREOF HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE
OF ACTION OR OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
PROPERTY, WHETHER BASED ON CONTRACT, COMMON LAW, STATUTE, EQUITY OR OTHERWISE.
Any breach of a representation or warranty first discovered after Closing is
governed by Section 9.3.
10.3 Attorneys' Fees.
In the event either party hereto employs an attorney in connection with
claims by one party against the other arising from the operation of this
Agreement, the non-prevailing party shall pay the prevailing party all
reasonable fees and expenses, including attorneys' fees, incurred in connection
with such transaction.
Exhibit 10.22 - Page 19
<PAGE>
10.4 Other Expenses.
If this Agreement is terminated due to the default of a party, then the
defaulting party shall pay any fees or charges due to Escrow Agent for holding
the Earnest Money as well as any escrow cancellation fees or charges and any
fees or charges due to the Title Company for preparation and/or cancellation of
the Title Commitment.
ARTICLE 11 - Disclaimers. Release and Indemnity
11.1 Disclaimers By Seller:
Except as expressly set forth in this Agreement, the Bond Purchase
Agreement or any document delivered at Closing, it is understood and agreed that
Seller and Asset Manager have not at any time made and are not now making, and
they specifically disclaim, any warranties or representations of any kind or
character, express or implied, with respect to the Property and the Bond
Documents, including, but not limited to, warranties or representations as to
(i) matters of title, (ii) environmental matters relating to the Property or any
portion thereof, including, without limitation, the presence of Hazardous
Materials in, on, under or in the vicinity of the Property, (iii) geological
conditions, including, without limitation, subsidence, subsurface conditions,
water table, underground water reservoirs, limitations regarding the withdrawal
of water, and geologic faults and the resulting damage of past and/or future
faulting, (iv) whether, and to the extent to which the Property or any portion
thereof is affected by any stream (surface or underground), body of water,
wetlands, flood prone area, flood plain, floodway or special flood hazard, (v)
drainage, (vi) soil conditions, including the existence of instability, past
soil repairs, soil additions or conditions of soil fill, or susceptibility to
landslides, or the sufficiency of any undershoring, (vii) the presence of
endangered species or any environmentally sensitive or protected areas, (viii)
zoning or building entitlements to which the Property or any portion thereof may
be subject, (ix) the availability of any utilities to the Property or any
portion thereof including, without limitation, water, sewage, gas and electric,
(x) usages of adjoining property, (xi) access to the Property or any portion
thereof, (xii) the value, compliance with the plans and specifications, size,
location, age, use, design, quality, description, suitability, structural
integrity, operation, title to, or physical or financial condition of the
Property or any portion thereof, or any income, expenses, charges, liens,
encumbrances, rights or claims on or affecting or pertaining to the Property or
any part thereof, (xiii) the condition or use of the Property or compliance of
the Property with any or all past, present or future federal, state or local
ordinances, rules, regulations or laws, building, fire or zoning ordinances,
codes or other similar laws, (xiv) the existence or non-existence of underground
storage tanks, surface impoundments, or landfills, (xv) the merchantability of
the Property or fitness of the Property for any particular purpose, (xvi) the
truth, accuracy or completeness of the Property Documents, (xvii) tax
consequences, (xviii) the suitability or usefulness of the Bonds as financing
for the Property or the ability of Purchaser to have the Bonds refunded,
reissued or resold, or (xix) any other matter or thing with respect to the
Property or the Bond Documents.
11.2 Sale "As Is, Where Is."
Purchaser acknowledges and agrees that upon Closing, Seller shall sell and
convey to Purchaser and Purchaser shall accept the Property "AS IS, WHERE IS,
WITH ALL FAULTS," except to the extent expressly provided otherwise in this
Agreement and any document executed by Seller and delivered to Purchaser at
Closing. Except as expressly set forth in this Agreement and in any document
executed by Seller and delivered to Purchaser at Closing, Purchaser has not
relied and will not rely on, and Seller has not made and is not liable for or
bound by, any express or implied warranties, guarantees, statements,
representations or information pertaining to the Property or relating thereto
(including specifically, without limitation, Property information packages
distributed with respect to the Property) made or furnished by Seller, the Asset
Manager of the Property, or any real estate broker, agent or third party
representing or purporting to represent Seller, to whomever made or given,
directly or indirectly, orally or in writing. Purchaser represents that it is a
knowledgeable, experienced and sophisticated purchaser of real estate and tax
exempt bonds and that, except as expressly set forth in this Agreement and in
any document executed by Seller and delivered to Purchaser at Closing, it is
relying solely on its own expertise and that of Purchaser's consultants in
purchasing the Property and shall make an independent verification of the
accuracy of any documents
Exhibit 10.22 - Page 20
<PAGE>
and information provided by Seller. Purchaser will conduct such inspections and
investigations of the Property as Purchaser deems necessary, including, but not
limited to, the physical and environmental conditions thereof, and shall rely
upon same. By failing to terminate this Agreement prior to the expiration of the
Inspection Period, Purchaser acknowledges that Seller has afforded Purchaser a
full opportunity to conduct such investigations of the Property as Purchaser
deemed necessary to satisfy itself as to the condition of the Property and the
existence or non-existence or curative action to be taken with respect to any
Hazardous Materials on or discharged from the Property, and will rely solely
upon same and not upon any information provided by or on behalf of Seller or its
agents or employees with respect thereto, other than such representations,
warranties and covenants of Seller as are expressly set forth in this Agreement.
Upon Closing, Purchaser shall assume the risk that adverse matters including,
but not limited to, adverse physical or construction defects or adverse
environmental health or safety conditions, may not have been revealed by
Purchaser's inspections and investigations.
Purchaser's Initial ---------------
s/s RM
11.3 Seller Released from Liability.
Purchaser acknowledges that it will have the opportunity to inspect the
Property during the Inspection Period, and during such period, observe its
physical characteristics and existing conditions and the opportunity to conduct
such investigation and study on and of the Property and adjacent areas as
Purchaser deems necessary, and Purchaser hereby FOREVER RELEASES AND DISCHARGES
Seller and Asset Manager from all responsibility and liability, including
without limitation, liabilities tinder the Comprehensive Environmental Response
Compensation and Liability Act Of 1980 (42 U.S.C. Sections 9601 et seq.), as
amended ("CERCLA"), regarding the condition (including the presence in the soil,
air, structures and surface and subsurface waters, of Hazardous Materials or
other materials or substances that have been or may in the future be determined
to be toxic, hazardous, undesirable or subject to regulation and that may need
to be specially treated, handled and/or removed from the Property under current
or future federal, state and local laws regulations or guidelines), valuation,
salability or utility of the Property, or its suitability for any purpose
whatsoever. Purchaser further hereby WAIVES (and by closing this transaction
will be deemed to have waived) any and all objections to or complaints regarding
(including, but not limited to, federal, state and common law based actions), or
any private right of action under, state and federal law to which the Property
is or may be subject, including, but not limited to, CERCLA, RCRA, physical
characteristics and existing conditions, including, without limitation,
structural and geologic conditions, subsurface soil and water conditions and
solid and hazardous waste and Hazardous Materials on, under, adjacent to or
otherwise affecting the Property. Purchaser further hereby assumes the risk of
changes in applicable laws and regulations relating to past, present and future
environmental conditions on the Property and the risk that adverse physical
characteristics and conditions, including, without limitation, the presence of
Hazardous Materials or other contaminants, may not have been revealed by its
investigation.
11.4 "Hazardous Materials" Defined.
For purposes hereof, "Hazardous Materials" means "Hazardous Material,"
"Hazardous Substance," "Pollutant or Contaminant," and "Petroleum" and "Natural
Gas Liquids," as those terms are defined or used in Section 101 of CERCLA, and
any other substances regulated because of their effect or potential effect on
public health and the environment, including, without limitation, PCBs, lead
paint, asbestos, urea formaldehyde, radioactive materials, putrescible, and
infectious materials.
11.5 Indemnity.
Purchaser agrees to indemnify and hold Seller harmless of and from any and
all liabilities, claims, demands, and expenses of any kind or nature which arise
or accrue after Closing and which are in any way related to the ownership,
maintenance, or operation of the Property after the Closing Date by Purchaser
and its successors and assigns, including, without limitation, in connection
with Hazardous Materials.
11.6 Survival.
The terms and conditions of this Article 11 shall expressly survive the
Closing, not merge with the provisions of any closing documents and shall be
incorporated into the Deed.
Exhibit 10.22 - Page 21
<PAGE>
Purchaser acknowledges and agrees that the disclaimers and other agreements
set forth herein are an integral part of this Agreement and that Seller would
not have agreed to sell the Property to Purchaser for the Purchase Price without
the disclaimers and other agreements set forth above.
ARTICLE 12 - Miscellaneous
12.1 Parties Bound; Assignment.
This Agreement, and the terms, covenants, and conditions herein contained,
shall inure to the benefit of and be binding upon the heirs, personal
representatives, successors, and assigns of each of the parties hereto.
Purchaser may assign its rights under this Agreement upon the following
conditions: (i) the Assignee of Purchaser must be an affiliate of Purchaser or
an entity controlling, controlled by, or under common control with Purchaser,
(ii) all of the Earnest Money must have been delivered in accordance herewith,
(iii) the Inspection Period shall be deemed to have ended, (iv) the assignee of
Purchaser shall assume all obligations of Purchaser hereunder, but Purchaser
shall remain primarily liable for the performance of Purchaser's obligations,
(v) the Purchaser s rights under the Bond Purchase Agreement are simultaneously
assigned to the same Assignee or to another affiliate of Purchaser or entity
controlling, controlled by, or under common control with Purchaser, in
compliance with the terms of the Bond Purchase Agreement, and (vi) a copy of the
fully executed written assignment and assumption agreement shall be delivered to
Seller at least ten (10) days prior to Closing.
12.2 Headings.
The article, section, subsection, paragraph and/or other headings of this
Agreement are for convenience only and in no way limit or enlarge the scope or
meaning of the language hereof.
12.3 Invalidity and Waiver.
If any portion of this Agreement is held invalid or inoperative, then so
far as is reasonable and possible the remainder of this Agreement shall be
deemed valid and operative, and, to the greatest extent legally possible, effect
shall be given to the intent manifested by the portion held invalid or
inoperative. The failure by either party to enforce against the other any term
or provision of this Agreement shall not be deemed to be a waiver of such
party's right to enforce against the other party the same or any other such term
or provision in the future.
12.4 Governing Law.
This Agreement shall, in all respects, be governed, construed, applied, and
enforced in accordance with the law of the state in which the Real Property is
located.
12.5 Survival.
The provisions of this Agreement that contemplate performance after the
Closing and the obligations of the parties not fully performed at the Closing
shall survive the Closing and shall not be deemed to be merged into or waived by
the instruments of Closing.
12.6 Entirety and Amendments.
This Agreement embodies the entire agreement between the parties and
supersedes all prior agreements and understandings relating to the Property.
This Agreement may be amended or supplemented only by an instrument in writing
executed by the party against whom enforcement is sought.
12.7 Time.
Time is of the essence in the performance of this Agreement.
12.8 Confidentiality.
Purchaser shall make no public announcement or disclosure of any
information related to this Agreement to outside brokers or third parties,
before or after the Closing, without the prior written specific consent of
Seller; provided, however, that Purchaser may, subject to the provisions of
Section 4.8, make disclosure of this Agreement to its Permitted Outside Parties
as necessary to perform its obligations hereunder and as may be required under
laws or regulations applicable to Purchaser.
12.9 Notices.
All notices required or permitted hereunder shall be in writing and shall
be served on the parties at the addresses set forth in Section 1.3. Any such
notices shall, unless otherwise provided herein, be given or served (i) by
depositing the same in the United States mail, postage paid, certified and
addressed to the party to be notified, with return receipt requested, (ii) by
overnight delivery using a nationally recognized overnight courier, (iii) by
personal delivery, or (iv) by facsimile, evidenced by confirmed receipt. Notice
deposited in the mail in the manner
Exhibit 10.22 - Page 22
<PAGE>
hereinabove described shall be effective on the third (3rd) business day after
such deposit. Notice given in any other manner shall be effective only if and
when received by the party to be notified between the hours of 8:00 am and 5:00
p.m. of any business day with delivery made after such hours to be deemed
received the following business day. A party's address may be changed by written
notice to the other party; provided, however, that no notice of a change of
address shall be effective until actual receipt of such notice. Copies of
notices are for informational purposes only, and a failure to give or receive
copies of any notice shall not be deemed a failure to give notice. Notices given
by counsel to the Purchaser shall be deemed given by Purchaser and notices given
by counsel to the Seller shall be deemed given by Seller.
12.10 Construction.
The parties acknowledge that the parties and their counsel have reviewed
and revised this Agreement and agree that the normal rule of construction - to
the effect that any ambiguities are to be resolved against the drafting party -
shall not be employed in the interpretation of this Agreement or any exhibits or
amendments hereto.
12.11 Calculation of Time Periods.
Unless otherwise specified, in computing any period of time described
herein, the day of the act or event after which the designated period of time
begins to run is not to be included and the last day of the period so computed
is to be included, unless such last day is a Saturday, Sunday or legal holiday
for national banks in the location where the Property is located in which event
the period shall run until the end of the next day which is neither a Saturday,
Sunday, or legal holiday. The last day of any period of time described herein
shall be deemed to end at 5:00 p.m. local time in the state in which the Real
Property is located.
12.12 Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, and all of such counterparts shall constitute
one Agreement. To facilitate execution of this Agreement, the parties may
execute and exchange by telephone facsimile counterparts of the signature pages,
provided that executed originals thereof are forwarded to the other party on the
same day by any of the delivery methods set forth in Section 12.9 other than
facsimile.
12.13 No Recordation.
Without the prior written consent of Seller, there shall be no recordation
of either this Agreement or any memorandum hereof, or any affidavit pertaining
hereto, and any such recordation of this Agreement or memorandum or affidavit by
Purchaser without the prior written consent of Seller shall constitute a default
hereunder by Purchaser, whereupon Seller shall have the remedies set forth in
Section 10.1 hereof.
12.14 Further Assurances.
In addition to the acts and deeds recited herein and contemplated to be
performed, executed and/or delivered by either party at Closing, each party
agrees to perform, execute and deliver, but without any obligation to incur any
additional liability or expense, on or after the Closing any further deliveries
and assurances as may be reasonably necessary to consummate the transactions
contemplated hereby or to further perfect the conveyance, transfer and
assignment of the Property to Purchaser.
12.15 Discharge of Obligations.
The acceptance of the Deed by Purchaser shall be deemed to be a full
performance and discharge of every representation and warranty made by Seller
herein and every agreement and obligation on the part of Seller to be performed
pursuant to the provisions of this Agreement, except those which are herein
specifically stated to survive Closing.
12.16 ERISA.
Under no circumstances shall Purchaser have the right to assign this
Agreement to any person or entity owned or controlled by an employee benefit
plan if Seller's sale of the Property to such person or entity would, in the
reasonable opinion of Seller's ERISA advisors or consultants, create or
otherwise cause a "prohibited transaction" under ERISA. In the event Purchaser
assigns this Agreement or transfers any ownership interest in Purchaser, and
such assignment or transfer would make the consummation of the transaction
hereunder a "prohibited transaction" under ERISA and necessitate the termination
of this Agreement then, notwithstanding any contrary provision which may be
contained herein, Seller shall have the right to terminate this Agreement.
Exhibit 10.22 - Page 23
<PAGE>
12.17 No Third Party Beneficiary.
The provisions of this Agreement and of the documents to be executed and
delivered at Closing are and will be for the benefit of Seller, Asset Manager
and Purchaser only and are not for the benefit of any third party (other than
Asset Manager), and accordingly, no third party (other than Asset Manager) shall
have the right to enforce the provisions of this Agreement or of the documents
to be executed and delivered at Closing, except that a tenant of the Property
may enforce Purchaser's indemnity obligation under Section 4.11 hereof.
12.18 Asset Manager: Designated Representative.
Seller has engaged Archon Group, L.P. or affiliated companies ("Asset
Manager") to provide certain asset management services with respect to the
Property, including acting as a liaison between Seller and Purchaser in
connection with the Property and this Agreement. The Asset Manager will appoint
one or more representatives ("Designated Representative(s)") to deal with
Purchaser within two (2) business days after request by Purchaser. Whenever any
approval, acceptance, consent, direction or action of Seller is required
pursuant to this Agreement, Purchaser shall send to the Designated
Representative a written notice requesting same which notice shall: (i) describe
in detail the matter for which such approval, acceptance, consent, direction or
other action of Seller is requested; (ii) be accompanied by a copy of any
contract, agreement or other document to be executed by Seller evidencing such
approval, consent, acceptance, direction or action of Seller; and (iii) be
accompanied by such other documents, written explanations and information as may
be reasonably necessary to explain the request fully and completely. The Asset
Manager will communicate Seller's response to any such requests to Purchaser.
12.19 Mandatory Arbitration.
The parties have agreed to submit certain disputes to mandatory arbitration
in accordance with the provisions of Exhibit F attached hereto and made a part
hereof for all purposes.
12.20 Radon.
Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities, may present health risks to
persons who are exposed to it over time. Levels of radon gas that exceed federal
and state guidelines have been found in buildings in Florida. Additional
information regarding radon and radon testing may be obtained from your county
public health unit.
12.21 Energy Efficiency Rating.
Seller hereby notifies Purchaser that Purchaser may have the energy
efficiency rating of the Improvements determined in accordance with the
requirements of Florida Statutes Section 553.996. Purchaser acknowledges receipt
on or before the Effective Date of the energy efficiency rating informational
brochure issued by the Florida Department of Community Affairs.
12.22 Mutually Dependent Transactions.
Purchaser and Seller expressly acknowledge and agree that the consummation
of the transactions contemplated by this Agreement is dependent upon the
consummation of the transactions contemplated by the Bond Purchase Agreement.
Accordingly, the parties hereto agree that:
12.22.1 Seller Default.
A default by the Bondholder under the Bond Purchase Agreement shall be
deemed to be a default by the Seller hereunder.
12.22.2 Purchaser Default.
A default by the Purchaser under the Bond Purchase Agreement shall be
deemed to be a default by the Purchaser hereunder.
12.22.3 Termination.
If the Purchaser hereunder is entitled to, and elects to terminate this
Agreement pursuant to the provisions hereof, then, notwithstanding any contrary
provision in this Agreement or the Bond Purchase Agreement, this Agreement and
the Bond Purchase Agreement shall both terminate.
[SIGNATURE PAGES AND EXHIBITS TO FOLLOW]
Exhibit 10.22 - Page 24
<PAGE>
SIGNATURE PACE TO AGREEMENT OF
PURCHASE AND SALE
BY AND BETWEEN
SHERWOOD GLEN AND WILLOWS APARTMENTS REAL ESTATE LIMITED
PARTNERSHIP
AND
COUNTRY LAKE - HOMES HOLDINGS, INC.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year written below.
SELLER:
SHERWOOD GLEN AND WILLOWS APARTMENTS
REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: MFH Realty Limited Partnership,
a Delaware limited partnership,
General Partner
By: WH TE-Two Investors Gen-Par, Inc.,
a Delaware corporation,
General Partner
Date executed by Seller:
April -------- 1999 By: ------------------------------
Name: ------------------------------
Title: ------------------------------
PURCHASER:
COUNTRY LAKE HOMES HOLDINGS, INC.,
a Florida corporation
Date executed by Purchaser:
April -------- 1999 By: ------------------------------
s/s Robert A. MacFarlane
Name: ------------------------------
Title: ------------------------------
Exhibit 10.22 - Page 25
<PAGE>
JOINDER BY ESCROW AGENT
Escrow Agent has executed this Agreement in order to confirm that Escrow Agent
has received and shall hold the Initial Earnest Money required to be deposited
under this Agreement and the interest earned thereto, in escrow, and shall
disburse the Earnest Money, and the interest earned thereon, pursuant to the
provisions of this Agreement.
LAWYERS TITLE INSURANCE COPRORATION,
a ---------------------------------
Date executed by Escrow Agent:
April -------- 1999 By: ------------------------------
Name: ------------------------------
Title: ------------------------------
Exhibit 10.22 - Page 26
<PAGE>
LIST OF EXHIBITS
A Legal Description of Real Property
B Bill of Sale, Assignment and Assumption of Leases and Contracts
C ERISA Letter
D Notice to Tenants
E [Intentionally Omitted]
F Mandatory Arbitration
EXHIBIT A
LEGAL DESCRIPTION
[Attached]
EXHIBIT B
BILL OF SALE. ASSIGNMENT AND ASSUMPTION
(Country Lake Apartments)
THIS BILL OF SALE, ASSIGNMENT AND ASSUMPTION is made as of the -------- day of
-------------, 1999, by and between SHERWOOD GLEN AND WILLOWS APARTMENTS REAL
ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership ("Assignor"), and
--------------------, a --------------------------- ("Assignee").
WITNESSETH:
For good and valuable consideration, receipt and sufficiency of which are
hereby acknowledged Assignor hereby agree as follows:
1. Assignor hereby sells, transfers, assigns and conveys to Assignee the
following:
a. All right, title and interest of Assignor in and to all tangible personal
property ("Personality") set forth in the inventory on Exhibit A attached
hereto and made a part hereof, and located on, and used in connection with
the management, maintenance or operation of that certain land and
improvements located in the County of Palm Beach, State of Florida, as more
particularly described in Exhibit B attached hereto and made a part hereof
("Real Property"'), but excluding tangible personal property owned or
leased by Assignor's property manager or the tenants of the Real Property
under the Tenant Leases (as defined below).
b. All right, title and interest of Assignor in and to those certain leases
described on Exhibit C attached hereto and made a part hereof (the "Tenant
Leases"), relating to the leasing of space in the Real Property and all of
the rights, interests, benefits and privileges of the lessor hereunder, and
to the extent Assignee has not received a credit therefore under the
Purchase Agreement (as defined below), all prepaid rents and security and
other deposits held by Assignor under the Tenant Leases and not credited or
returned to tenants, but subject to all terms conditions, reservations and
limitations set forth in the Tenant Leases.
Exhibit 10.22 - Page 27
<PAGE>
c. To the extent assignable, all right, title and interest in and to those
certain contracts set forth on Exhibit D attached hereto and made a part
hereof, and all warranties, guaranties, indemnities and claims (including,
without limitation, for workmanship, materials and performance) and which
exist or may hereafter exist against any contractor, subcontractor,
manufacturer or supplier or laborer or other services relating thereto
(collectively, the "Contracts").
2. This Bill of Sale, Assignment and Assumption is given pursuant to that
certain Agreement of Sale and Purchase (as amended, the "Purchase Agreement
") dated as of ------------------ 1999, between Assignor and Assignee,
providing for, among other things, the conveyance of the Personality, the
Tenant Leases and the Contracts.
3. As set forth in Article 11 of the Purchase Agreement, which is hereby
incorporated by reference as if herein set out in full and except as set
forth herein, the property conveyed hereunder is conveyed by Assignor and
accepted by Assignee AS IS, WHERE IS, AND WITHOUT ANY WARRANTIES OF
WHATSOEVER NATURE, EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY SET FORTH IN THE
PURCHASE AGREEMENT OR HEREIN, IT BEING THE INTENTION OF ASSIGNOR AND
ASSIGNEE EXPRESSLY TO NEGATE AND EXCLUDE ALL WARRANTIES, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY
PARTICULAR PURPOSE, WARRANTIES CREATED BY ANY AFFIRMATION OF FACT OR
PROMISE OR BY ANY DESCRIPTION OF THE PROPERTY CONVEYED HEREUNDER, OR BY ANY
SAMPLE OR MODEL THEREOF, AND ALL OTHER WARRANTIES WIIATSOEVER CONTAINED IN
OR CREATED BY THE FLORIDA UNIFORM COMMERCIAL CODE.
4. Assignor hereby agrees to warrant and defend title to the Personality unto
Assignee against every person whomsoever lawfully claiming or to claim the
same or any part thereof by, through or under Assignor, but not otherwise.
5. Assignee hereby accepts the assignment of the Personality, the Tenant
Leases and the Contracts and agrees to assume and discharge, in accordance
with the terms thereof, all of the obligations hereunder from and after the
date hereof.
6. Assignee agrees to indemnify and hold harmless Assignor from any cost,
liability, damage or expense (including attorneys' fees) arising out of or
relating to Assignee's failure to perform any of the foregoing obligations
arising from and accruing on or after the date hereof.
7. Assignor agrees to indemnify and hold harmless Assignee from any cost,
liability, damage or expense (attorneys' fees) arising out of or relating
to Assignor's failure to perform any of the obligations of Assignor under
the Tenant Leases or Contracts, to the extent accruing prior to the date
hereof.
8. This Bill of Sale, Assignment and Assumption may be executed in any number
of counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
Exhibit 10.22 - Page 28
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Bill of Sale,
Assignment and Assumption as of the date first above written.
ASSIGNOR:
SHERWOOD GLEN AND WILLOWS APARTMENTS
REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: MFH Realty Limited Partnership,
a Delaware limited partnership,
General Partner
By: WH TE-Two Investors Gen-Par, Inc.,
a Delaware corporation,
General Partner
By: ------------------------------
Name: ------------------------------
Title: ------------------------------
ASSIGNEE:
------------------------------
a ----------------------------
By: ------------------------------
Name: ------------------------------
Title: ------------------------------
[INSERT APPROPRIATE ACKNOWLEDGMENTS FOR THE STATE]
Exhibit 10.22 - Page 29
<PAGE>
Exhibit A Personality
Exhibit B Real Property
Exhibit C Tenant Leases
Exhibit D Contracts
EXHIBIT C
ERISA LETTER
------------------------------, 1999
Sherwood Glen and Willows Apartments Real Estate Limited Partnership
Re: Acquisition of Country Lake Apartments in West Palm Beach, Florida
Ladies and Gentlemen:
The undersigned represents to you that [Purchaser], or any affiliates
thereof, or any firm, person or entity providing financing for the purchase of
the entire interest of Sherwood Glen and Willows Apartments Real Estate Limited
Partnership in the above-described property (the "Property") are not using the
assets of an employee benefit plan as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and covered under
Title I, Part 4 of the ERISA or Section 4975 of the Internal Revenue Code of
1986, as amended, in the performance or discharge of its obligations under that
certain Agreement of Purchase and Sale dated ------------------------------,
1999, with respect to the Property by and between Sherwood Glen and Willows
Apartments Real Estate Limited Partnership, as Seller, and the undersigned, as
Purchaser, including the acquisition of the Property.
Very truly yours,
------------------------------,
a ----------------------------
By: ------------------------------
Name: ------------------------------
Title: ------------------------------
EXHIBIT D
NOTICE TO TENANTS
------------------------------, 1999
Dear Tenant:
You are hereby notified that Sherwood Glen and Willows Apartments Real Estate
Limited Partnership ("Seller"), the current owner of the Country Lake Apartments
in West Palm Beach, Florida (the "Property") and the current owner of the
landlord's interest in your lease in the Property, has sold the Property to
[Purchaser] ("New Owner"), as of the above date. In connection with such sale,
Seller has assigned and transferred its interest in your lease and any and all
security deposits hereunder or relating thereto to New Owner, and New Owner has
assumed and agreed to perform all of the landlord's obligations under your lease
(including any obligations set forth in your lease to repay or account for any
security deposits hereunder from and after such date).
Accordingly, (a) all your obligations under the lease from and after the date
hereto including your obligation to pay rent, shall be performable to and for
the benefit of New Owner, its successors and assigns, and b) all the obligations
of the landlord under the lease, including any obligations to repay or account
for any security deposits hereunder, shall be the binding obligation of New
Owner and its successors and assigns; Unless and until you are otherwise
notified in writing by New Owner, the address of New Owner for all purposes
under your lease is:
------------------------------
------------------------------
------------------------------
Exhibit 10.22 - Page 30
<PAGE>
SELLER:
SHERWOOD GLEN AND WILLOWS APARTMENTS
REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: MFH Realty Limited Partnership,
a Delaware limited partnership,
General Partner
By: WH TE-Two Investors Gen-Par, Inc.,
a Delaware corporation,
General Partner
By: ------------------------------
Name: ------------------------------
Title: ------------------------------
NEW OWNER:
------------------------------,
a ----------------------------
By: ------------------------------
Name: ------------------------------
Title: ------------------------------
EXHIBIT E
[INTENTIONALLY OMITTED]
EXHIBIT F
MANDATORY ARBITRATION
The parties have agreed to submit certain disputes to mandatory arbitration
in accordance with the following provisions:
Scope of Arbitration.
The parties to this Agreement have agreed to submit all disputes with an
amount in controversy of $250,000.00 or less to final and binding arbitration as
the sole and exclusive remedy for all claims for damages arising out of,
involving, or relating to (a) this Agreement or (b) the events giving rise to
this Agreement, including all non-contractual claims for damages related to this
Agreement or the events giving rise to it (including claims for fraudulent
inducement of contract). Notwithstanding the foregoing, the dispute resolution
procedure set forth below shall not apply to (i) claims for injunctive or other
equitable relief, or (ii) any claims for damages exceeding $250,000.00. The
parties agree that two (2) sets of rules will apply, depending on the amount in
controversy. If the amount in controversy is equal to or less than $50,000.00,
then SET A (as set forth below) will apply. If the amount in controversy is
greater than $50,000.00 and less than or equal to $250,000.00, then SET B will
apply. The amount in controversy is calculated using the amount of actual
damages alleged by the Claiming Party (defined below), exclusive of interest and
attorneys' fees. The dispute resolution procedure set forth below does not
independently give rise to any right or remedy. The procedure is intended to be
applied to rights or remedies expressly granted in other sections of this
Agreement.
Notice of Dispute.
Any party shall give the other parties written notice of the existence and
nature of any dispute proposed to be arbitrated (the "Written Notice"). The
Written Notice must be served on the other parties as required below. The party
serving Written Notice shall be referred to as the "Claiming Party." The party
to whom the claims are directed shall be referred to as the "Responding Party."
Appointment of Arbitrators.
Exhibit 10.22 - Page 31
<PAGE>
SET A: The parties agree that these disputes will be arbitrated by a single
arbitrator who is a board certified or licensed real estate attorney in the
state in which the Property is located. The parties shall attempt to agree upon
an arbitrator within ten (10) days of the service of the Written Notice. If the
parties are unable to agree, then the arbitrator shall be appointed from, and
pursuant to the rules for commercial arbitration of, the American Arbitration
Association. Prior to appointment, the arbitrator shall agree to conduct such
arbitration in strict accordance with the terms of this Agreement.
SET B: The parties agree that these disputes will be arbitrated by a panel
of three (3) arbitrators. Each party shall appoint one person to serve as an
arbitrator within fifteen (15) days of receipt of the Written Notice. The two
(2) arbitrators thus appointed shall within seven (7) days of their appointment
together select a third arbitrator with such knowledge and expertise as
necessary to serve as chairman of the panel of arbitrators (preferably a board
certified or licensed real estate attorney in the state in which the Property is
located), and this person shall serve as chairman. The three arbitrators shall
determine all matters, including the panel's final decision with respect to the
claims presented in the arbitration, by majority vote. If the two arbitrators
selected by the parties are unable to agree upon the appointment of the third
arbitrator within seven (7) days of their appointment, both shall give written
notice of such failure to agree to the parties, and if the parties fail to agree
upon the selection of such third arbitrator within five (5) days thereafter,
such third arbitrator shall be appointed from, and pursuant to the rules for
commercial arbitration of, the American Arbitration Association. Prior to
appointment, each arbitrator shall agree to conduct such arbitration in strict
accordance with the terms of this Agreement.
Initial Meeting of the Arbitrators.
Within seven (7) days after the selection of the last arbitrator (SET A:
the arbitrator; SET B: the third arbitrator), the arbitrator(s) shall conduct an
initial meeting with the parties (the "Initial Meeting"). All meetings between
the arbitrators, or between the arbitrator(s) and the parties, including the
Initial Meeting, may be conducted by telephone, with the exception of the
arbitration hearing at which evidence is presented. At the Initial Meeting, the
parties and the arbitrator(s) shall agree upon a schedule for the arbitration
proceedings, with dates no later than the deadlines provided below The statement
of claim, the response to the statement of claim and counterclaims (if any), and
the response to the counterclaims (if any) (collectively, the "Pleadings") shall
be submitted to each arbitrator on the date they are served, unless service
occurs prior to appointment of all arbitrators. If service of any of the
Pleadings occurs prior to the appointment of any of the arbitrators, copies of
any such Pleadings shall be submitted to such arbitrator promptly after such
arbitrator's appointment.
Conduct of the Arbitration.
SET A: With respect to each dispute to be arbitrated, no more than six (6)
months shall pass between the selection of the arbitrator and the release of a
decision by the arbitrator; no more than two (2) depositions (lasting in total
for both depositions no more than 15 hours) may be taken by each of the Claiming
Party or the Responding Party, and no more than ten (10) interrogatories may be
asked for by each of the Claiming Party or the Responding Party. The arbitration
hearing shall last no more than two (2) days with the time divided equally
between the parties. All proceedings, including discovery, depositions, and the
arbitration hearings shall be governed by the Federal Rules of Civil Procedure
and the Local Rules of Civil Procedure of the United States District Court for
the district in which the Property is located, unless such rules conflict with
the provisions of this Agreement, in which case the provisions of this Agreement
control; provided, however, that the parties agree that the provisions of
Federal Rule of Civil Procedure 26(a) shall not apply.
SET B: With respect to each dispute to be arbitrated, no more than eleven
(11) months shall pass between the selection of the third arbitrator and the
release of a decision by the arbitration panel; no more than eight (8)
depositions (lasting in total for all eight depositions no more than 50 hours)
may be taken by each of the Claiming Party or the Responding Party, and no more
than thirty (30) interrogatories may be asked for by each of the Claiming Party
or the Responding Party. The arbitration hearing. shall last no more than five
(5) days with the time divided equally between the parties. All proceedings,
including discovery, depositions, and the arbitration hearings shall be governed
by the Federal Rules of Civil Procedure and the Local Rules of Civil Procedure
of the United States District Court for the district in which the Property is
located, unless such rules conflict with the provisions of this Agreement, in
which case the provisions of this Agreement control; provided, however, that the
parties agree that the provisions of Federal Rule of civil Procedure 26(a) shall
not apply.
Exhibit 10.22 - Page 32
<PAGE>
Motions.
The parties may make applications to the panel of arbitrator(s) regarding
issues of discovery, procedure and privilege. Any such motions shall be made to
and resolved by the arbitrator(s) as soon as practicable. No party shall be
permitted to file any motions for dismissal of claims (including dismissal based
upon failure to join an indispensable party), or for summary judgment,
concerning the claims or counterclaims asserted in any arbitration.
Schedule of Arbitration Proceedings.
SET A: At the Initial Meeting, the parties and the arbitrator shall agree
to a schedule that conforms with the following deadlines:
Service of statement of claim by Claiming Party Deadline Not Later Than: 15
days after service of Written Notice
Issuance of decision by the arbitrator(s) Deadline Not Later Than: 14 days
after receipt of the last hearing transcript by
SET B: At the Initial Meeting, the parties and the arbitrators shall agree
to a schedule that conforms with the following deadlines:
Service of statement of claim by Claiming Party Deadline Not Later Than: 15
days after service of Written Notice
Commencement of deposition Deadline Not Later Than:75 days after service of
statement of claim discovery
Completion of all discovery Deadline Not Later Than: 200 days after service
of statement of claim
Extensions of Time. The parties may jointly agree, in writing, to extend
any of the foregoing deadlines.
Decision Binding on the Parties.
Unless the parties agree otherwise in writing, the arbitrator(s)' decision
shall become binding on the parties at such time as the decision is confirmed by
order of a court in the jurisdiction where the Property is located. The parties
irrevocably and unconditionally submit to the jurisdiction of such court for any
and all proceedings relating to such confirmation. Any award ordered shall be
paid within ten (10) days of confirmation of the arbitrator(s)' decision.
Cost of Arbitration Proceedings.
Except as specifically provided, the costs incurred by the parties in
conjunction with an arbitration proceeding pursuant to this Agreement, including
reasonable attorney's fees, fees paid to experts, and fees for obtaining
transcripts shall be paid or reimbursed in accordance with the provisions of
Section 10.3 of the Agreement. In the event that the arbitrators determine that
no party is entitled to indemnification by any other party, then (a) each party
shall pay its own expenses, including attorney's fees, fees paid to experts,
fees for obtaining transcripts, expenses of witnesses called solely by that
party, and all fees charged by the arbitrator appointed by such party and (b)
the parties shall each pay fifty percent of all remaining expenses of the
arbitration proceeding.
Service of Documents.
Any process, notice, memorandum, motion, demand, or other paper or
communication, or application to the panel of arbitrators shall be deemed to
have been sufficiently served or submitted if done in accordance with Section
12.9 of this Agreement, except that service by facsimile shall not suffice for
purposes of this Exhibit F.
Exhibit 10.22 - Page 33
<PAGE>
