SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 23, 1996
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
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(Exact name of registrant as specified in its charter)
Illinois 0-9726 36-3057941
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
organization)
900 N. Michigan Avenue, Chicago, Illinois 60611-1575
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(Address of principal executive office)
Registrant's telephone number, including area code: (312) 915-1987
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SUNRISE MALL
Brownsville, TX
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On October 23, 1996,
Carlyle Real Estate Limited Partnership - X (the "Partnership"), through
the Sunrise Brownsville Associates, Ltd. joint venture, sold the land
and related improvements known as the Sunrise Mall. The purchaser,
Brownsville Sunrise Developers, L.P., was not affiliated with the
Partnership or its General Partners and the sale price was determined by
arm's length negotiations. The property is an approximately 311,000
square foot enclosed mall shopping center and, as of the date of this
report, was approximately 84% occupied.
The sale price of the land and improvements was approximately
$12,000,000 (after deducting selling costs), which was paid in cash at
closing. A significant portion of the sale proceeds was utilized to
retire the mortgage debt with an outstanding balance of $11,557,343.
The Partnership has agreed to pay the lender a portion of the net sales
proceeds (after certain adjustments) as a mortgage prepayment fee. This
amount is currently estimated to be approximately $165,000. As a result
of the sale, the Partnership expects to recognize a gain of
approximately $5,400,000 for financial reporting purposes and $5,900,000
for Federal income tax purposes in 1996. The Partnership is planning to
hold the remaining proceeds for future distribution to the Limited
Partners.
The Partnership Agreement provides that the General Partners shall
receive 15% of sale or refinancing proceeds (net after expenses and
related working capital) and the Limited Partners shall receive 85%.
However, the distributions of the General Partners are subject to the
Limited Partners' receipt of (i) an amount from sale or refinancing
proceeds equal to the Limited Partners' capital investment in the
Partnership, and (ii) cumulative cash distributions from net cash
receipts (plus any cumulative distributions of sale or refinancing
proceeds in excess of the Limited Partners' capital investment) equal to
a 6% annual return on their average capital investment (capital
investment reduced by sale or refinancing proceeds previously
distributed) for each year beginning with the third fiscal quarter of
1981. The Limited Partners have not yet received cash distributions
equal to their investment plus a 6% annual return on such investment.
Therefore, no portion of the proceeds of this sale will be distributed
to the General Partners at this time.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements. Not applicable.
(b) Pro Forma Financial Information - Narrative.
As a result of the sale of the Sunrise Mall, beyond October 23, 1996,
there will be no further rental income and other income, mortgage and
other interest, depreciation, or property operating expenses recorded
for the Sunrise Mall in the consolidated financial statements of the
Partnership, which for the Partnership's most recent year (the year
ended December 31, 1995) were approximately $3,744,000, $1,115,000,
$345,000 and $2,175,000, respectively. Rental and other income,
mortgage and other interest, depreciation and property operating
expenses were approximately $809,000, $274,000, $86,000 and $564,000,
respectively, for the three months ended June 30, 1996 and $1,664,000,
$549,000, $173,000 and $1,045,000, respectively, for the six months
ended June 30, 1996. Also, as a result of the sale of the Sunrise Mall,
there are no further assets and liabilities related to the Sunrise Mall,
which at June 30, 1996 consisted of cash and other current assets of
approximately $3,999,000, land and building and improvements (net of
accumulated depreciation) of approximately $6,347,000, deferred expenses
of approximately $82,000, other long term assets of approximately
$201,000, current liabilities of approximately $699,000, other
liabilities of $13,000, and long-term debt less current portion of
approximately $11,367,000.
(c) Exhibits
10. Purchase and sale agreement, dated October 23, 1996,
by and between Sunrise Brownsville Associates, Ltd. ("Seller") (a Texas
limited partnership) and Brownsville Sunrise Developers, L.P.
("Purchaser") (a Texas limited partnership) is filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X
By: JMB Realty Corporation
Corporate General Partner
By: GAILEN J. HULL
Gailen J. Hull
Senior Vice President
Dated: November 7, 1996
EXHIBIT 10
PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT (this "Agreement") is made and
entered into to be effective and binding as of the _____ day of October, 1996
(the "Effective Date"), by and between SUNRISE BROWNSVILLE ASSOCIATES,
LTD., a Texas limited partnership ("Seller"), and BROWNSVILLE SUNRISE
DEVELOPERS, L.P., a Texas limited partnership, or assigns ("Purchaser").
W I T N E S S E T H:
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In consideration of and in reliance upon the covenants herein
contained, and for ten dollars and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
agree as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following words and phrases shall have the
meanings set forth below:
1.1 "ASSIGNMENT OF CONTRACTS" means an assignment in the form
of EXHIBIT I attached hereto, executed and acknowledged by Seller and
Purchaser, pursuant to which Seller assigns to Purchaser, and Purchaser
assumes, all of Seller's right, title and interest under the Contracts.
1.2 "ASSIGNMENT OF LEASES" means an assignment in the form of
EXHIBIT J attached hereto, executed and acknowledged by Seller and Purchaser,
pursuant to which Seller assigns to Purchaser, and Purchaser assumes, all
right, title and interest of Seller under the Leases and the Specialty
License Agreements.
1.3 "ASSIGNMENT OF OPTION" means an assignment in the form of
EXHIBIT S attached hereto executed and acknowledged by Seller and Purchaser,
pursuant to which Seller assigns to Purchaser, and Purchaser assumes, all
right, title and interest of Seller under the Option.
1.4 "ASSIGNMENT OF REA" means an assignment in the form of
EXHIBIT M attached hereto, pursuant to which Seller assigns to Purchaser and
Purchaser assumes, all of Seller's right, title and interest in and to the
REA.
1.5 "BLANKET CONVEYANCE" means a blanket conveyance, bill of sale
and assignment in the form of EXHIBIT N attached hereto, pursuant to which
Seller assigns to Purchaser, and Purchaser assumes, all of Seller's right,
title and interest in and to the Personalty and certain other interests set
forth therein.
1.6 "CLOSING" means the closing of the Escrow, disbursement of the
Purchase Price and consummation of the transaction contemplated herein,
which shall occur in accordance with Article 6.
1.7 "CLOSING DATE" means the date set forth in Section 6.1.
1.8 "CONTRACTS" means all (a) management, leasing, service,
supplier, maintenance, operating and repair contracts (excluding the Leases,
the Specialty License Agreements and recorded documents evidencing the
Permitted Exceptions) and (b) equipment leases to which Seller is a party
and all rights and options of Seller thereunder, including rights to renew
or extend the term or purchase the leased equipment, relating to equipment
or property located in or upon the Real Property or used in connection
therewith which shall survive the Closing hereunder. A complete
schedule of the Contracts is attached hereto as EXHIBIT C.
1.9 "DEFECT" or "DEFECTS" means (a) a defect, discrepancy or other
element of a Survey which is objectionable to Purchaser or (b) a lien,
security interest or other encumbrance, other than a Permitted Exception
or any Lease or Specialty License Agreement; PROVIDED, HOWEVER, that any
lien, security interest or encumbrance shall not be a Defect so long as
Seller provides, to Purchaser's satisfaction and at Seller's sole cost
and expense at Closing, either (i) the commitment of the Title Insurer
to endorse or insure over such lien, security interest or encumbrance,
or (ii) security in the form of a bond, letter of credit or cash, in each
case deposited in escrow with Escrowee, in the amount of 150 percent of
the amount claimed under such Defect, to be used by Seller to obtain the
release of such lien, security interest or encumbrance.
1.10 "ESCROW" means the deed and money escrow for the Closing of the
transaction contemplated hereby, among Escrowee, Seller and Purchaser.
1.11 "ESCROW AGREEMENT" means the separate written instructions from
the parties (or their attorneys) to Escrowee governing the Escrow, which
shall be consistent with the general provisions of the usual form of deed
and money escrow trust instruments for the purchase and sale of real property
then in use by Escrowee, incorporating the provisions of Section 6.4 and
otherwise with such special provisions inserted therein as may be required
to conform with the provisions of this Agreement. This Agreement shall not
be merged into the Escrow Agreement, but the Escrow Agreement shall be
deemed auxiliary to this Agreement and, as between the parties
hereto, the provisions of this Agreement shall govern and control.
If there is any conflict between the Escrow Agreement and this Agreement,
this Agreement shall control.
1.12 "ESCROWEE" means Ticor Title Insurance Company, 203 North
LaSalle Street (Suite 1400), Chicago, Illinois 60601, Attention of Richard
Lucchesi.
1.13 "LEASES" means all leases, subleases, and other occupancy
agreements, to which Seller is a party for any portion of, or interest in,
the Real Property, other than the Specialty License Agreements, including
all such occupancy agreements which may be made by Seller after the date
hereof and prior to Closing in accordance with the terms of this Agreement.
A rent roll (the "Rent Roll") describing the Leases existing as of the
date hereof is attached hereto as EXHIBIT D.
1.14 "OPTION" means that certain Option Agreement dated as of July 1,
1993, by and between Seller and W-B Partnership, L.P., an Illinois limited
partnership ("W-B"), as amended by that certain Amendment to Option Agreement
dated as of November 1, 1994, by and between Seller and W-B, as further
amended by that certain Second Amendment to Option Agreement dated as of
June 24, 1996, by and between Seller and W-B, pursuant to which Seller
currently has the valid and enforceable right to acquire the property
referenced therein, which property is contiguous to the Real Property.
1.15 "PERMITTED EXCEPTIONS" means collectively, the exceptions to
title to the Real Property listed on EXHIBIT B attached hereto, such other
exceptions to title as are approved by Purchaser and those exceptions to
title that are not Defects under the terms of this Agreement.
1.16 "PERSONALTY" means all movable equipment, furniture,
furnishings, supplies and other personal property (other than computer
hardware or software, but including HVAC-related computer hardware and
software) owned by Seller and located on the Property and used in
connection with the operation, ownership, leasing, promotion, financing
or management of the Real Property. A preliminary inventory of
the Personalty is described in EXHIBIT F attached hereto, but such
inventory shall not limit the generality or inclusiveness of the above
description, it being the intent of the parties that all Personalty to
be conveyed hereby includes every item of personal property of any
nature (other than computer hardware or software, but including
HVAC-related computer hardware and software) owned by Seller and
related in any way to the Real Property or its operation, ownership,
leasing, promotion, financing or management, including, without limitation:
(a) all of Seller's right, title and interest in and to
transferable plans, studies or other materials (excluding proposals,
expressions of interest, term sheets, letters of intent or similar
conditional, non-binding written materials) relating to the marketing
of the Property to the public and prospective tenants and other occupants
of the Property, including leasing brochures, market studies and tenant
data sheets; and
(b) all right, title and interest of Seller in and to all
intangible personal property owned by Seller and used in the operation
of the Property, including, without limitation, all logos, goodwill,
going concern value, trade style, trademarks, service marks and
trade names (inclusive of the name "Sunrise Mall", but exclusive of
Urban Shopping Centers, Inc., JMB Realty Corporation or their affiliates)
used by Seller in connection with the Property.
1.17 "PROPERTY" means collectively, the Real Property, the
Personalty, the Records, the Leases, the Specialty License Agreements,
the Option and the Contracts.
1.18 "PURCHASER" means Brownsville Sunrise Developers, L.P., a Texas
limited partnership, having business offices at 4501 North Beach Street,
Fort Worth, Texas 76136, or its assigns.
1.19 "REAL PROPERTY" means all of that certain land particularly
described in EXHIBIT-A attached hereto, including the buildings and all
other improvements, structures, fixtures, facilities and installations
on the Real Property (except to the extent of trade fixtures and equipment
owned by tenants under the Leases or the Specialty License Agreements or
listed on EXHIBIT F-1), together with all easements, rights, tenements,
hereditaments and appurtenances thereunto belonging
or appertaining, commonly known as "Sunrise Mall".
1.20 "RECORDS" means all originals and all copies of any and all
Leases, Specialty License Agreements, Contracts, operating statements and
reports, permits, certificates of occupancy, plats, third-party marketing
reports or studies, photographs, brochures, manuals, forms, third-party
engineering reports or studies, promotional materials, plans, surveys,
pleadings, third-party environmental reports, correspondence
and tenant files relating to the ownership or operation of the Property
or any part thereof or interest therein, to the extent in Seller's
possession or control.
1.21 "SELLER" means Sunrise Brownsville Associates, Ltd.,
a Texas limited partnership, having its business offices at 900 North
Michigan Avenue (Suite 1900), Chicago, Illinois 60611.
1.22 "SPECIALTY LICENSE AGREEMENTS" means all agreements or
licenses for a term of one year or less for occupancy of space within
the Real Property including license agreements which may be entered into
after the date hereof and prior to Closing in accordance with the terms
of this Agreement. A complete schedule of the Specialty License
Agreements existing as of the date hereof is attached as EXHIBIT E.
1.23 "SURVEY" means a TLTA survey of the Real Property dated
within 30 days of the date of this Agreement, made by a surveyor or
civil engineer duly licensed in Texas, performed to the standards
described on, and certified in, the form attached hereto as EXHIBIT P
to Seller, Purchaser and Title Insurer as having been prepared, at
Seller's sole expense, in accordance with the MANUAL FOR PRACTICE FOR LAND
SURVEYING IN TEXAS, which survey meets the requirements of a Category 1A,
Urban Condition II, survey described therein and which shall set forth
all matters required on a TLTA survey.
1.24 "TITLE COMMITMENT" means a binder or commitment to be issued
by Title Insurer to Purchaser, at Seller's sole expense, providing for
the issuance at the Closing to Purchaser of the Title Policy, together
with tax certificates for the Property.
1.25 "TITLE INSURER" means Ticor Title Insurance Company.
1.26 "TITLE POLICY" means a current TLTA Form T-1 Owner's Policy of
Title Insurance dated the date and time of Closing and with liability in
the amount of the Purchase Price (as defined in Section 2.2), insuring
Purchaser as owner of fee title to the Real Property, together with
insurance as a separate estate of any and all rights under any and
all reciprocal easement agreements and other appurtenant easements,
subject only to the Permitted Exceptions and, to the extent available
deleting, or otherwise containing an endorsement over, the general or
standard exceptions contained in such title insurance policy,
all at Seller's sole expense.
ARTICLE 2
AGREEMENT TO SELL
2.1 AGREEMENT. Upon and subject to the terms and conditions
contained in this Agreement, Seller agrees to sell and Purchaser agrees
to purchase from Seller, all of Sellers' right, title and interest in and
to the Property.
2.2 PURCHASE PRICE. The purchase price for the Property (the
"Purchase Price") shall be $12,350,000, adjusted as set forth herein and
reflected on the closing statements to be delivered at Closing, payable
as follows:
(a) For the purpose of securing the performance of Purchaser
hereunder, Purchaser shall deposit with Escrowee, on or before the third
business day after the full execution hereof, the sum of $250,000 as earnest
money (together with all interest accrued thereon, the "Deposit"), in the
form of a certified or cashier's check payable to Escrowee or a wire
transfer of immediately available funds, which Deposit, along with
all interest or other earnings accrued on such sum, shall serve as
earnest money for this transaction. The Deposit shall be held and disbursed
by Escrowee in accordance with the terms and conditions of a joint order
escrow, executed by (and subject to the reasonable approval of) Purchaser
and Seller, which shall provide that Escrowee pay the Deposit: (i) to
Seller at and upon the Closing or upon any default of Purchaser under the
terms of this Agreement in accordance with the provisions of Section 11.2;
or (ii) to Purchaser immediately upon a permitted termination of this
Agreement in accordance with the provisions of this Agreement.
(b) The balance of the Purchase Price, less the aggregate amount
of the Deposit, plus or minus applicable prorations described below, shall
be deposited by Purchaser in the Escrow in immediate, same-day federal funds
wired for credit into such account as Escrowee may designate on or before
the Closing Date.
ARTICLE 3
SATISFACTION OF MORTGAGES; REDEVELOPMENT CONDITION
3.1 DESCRIPTION OF MORTGAGES. The Property is subject to the
mortgages and deeds of trust described on EXHIBIT K attached hereto (the
"Mortgages"), which secure promissory notes payable to the lenders (the
"Lenders") described on EXHIBIT K in connection with each of the Mortgages.
3.2 SATISFACTION. Purchaser shall only accept title to the
Property free from the Mortgages and other loan documents executed in
connection with the Mortgages. Seller shall use diligent, good-faith
efforts to cause, on or before the Closing Date, each Lender to release
the Mortgages, and such release shall be a condition of Closing hereunder.
ARTICLE 4
INSPECTION PERIOD
4.1 COMPLETED DUE DILIGENCE REVIEWS.
(a) Purchaser has performed and completed all of Purchaser's due
diligence examinations, reviews and inspections of matters pertaining to the
purchase of the Property, including leases, reciprocal easement agreements,
service contracts, warranties, survey and title matters, and physical,
environmental compliance and redevelopment matters and conditions respecting
the Property. Seller and Purchaser have discussed the results of Purchaser's
due diligence examinations, reviews and inspections and the Purchase Price,
as reflected herein, has been determined (and has been significantly reduced)
to appropriately take such due diligence matters into account to Purchaser's
full satisfaction.
(b) Purchaser will indemnify, defend, and hold Seller harmless from
and against any damage, loss, cost or expense for personal injury or property
damage or mechanic's liens caused by Purchaser or its agents in connection
with its due diligence reviews, inspections or examinations. The provisions
of this paragraph shall survive the closing of the transactions hereunder
(or the earlier termination of this Agreement) only until December 31, 1996.
ARTICLE 5
ESCROW, TITLE AND SURVEY
5.1 ESCROW. The Closing of the transaction contemplated hereby
shall be through the Escrow pursuant to the provisions of this Article 5.
5.2 ESCROW AND TITLE COSTS. Title insurance and escrow charges
shall be paid as follows:
(a) The cost of the Escrow shall be divided equally between Seller
and Purchaser;
(b) Seller shall pay the cost of securing the Title Commitment
and the Survey, Title Policy, and the cost of abstracting, title examination
and recording any documents required to satisfy or release Defects or to
insure over the same (to the extent Seller agrees to undertake such
satisfaction, release or insurance over hereunder);
(c) Purchaser shall pay the cost of any additional endorsements
to the Title Policies, the cost of recording any deeds from Seller to
Purchaser, and the cost of recording any other documents; and
(d) Notwithstanding the foregoing, if the Escrow fails to close
by reason of any default by either party hereto, all costs specified in this
Section 5.2 and any costs of recording of documents required to terminate
this Agreement and the Escrow shall be borne by the party at fault.
5.3 TITLE COMMITMENT AND SURVEY. Seller shall cause Escrowee,
as agent for Title Insurer, to deliver to Purchaser, on or before ten days
prior to Closing, at Seller's sole expense, the Title Commitment and the
Survey.
5.4 DEFECTS IN TITLE COMMITMENT OR SURVEY. If any Title
Commitment or Survey delivered by Seller discloses any Defects, Purchaser
shall have until the sooner to occur of Closing or five days after
Purchaser's receipt of both the Title Commitment and Survey to notify
Seller of the Defects, and then Seller shall have until the sooner to
occur of Closing or five days after notice thereof from Purchaser to
elect to (a) cure or remove the Defect, (b) obtain the commitment of Title
Insurer to "insure over" the Defect or provide an endorsement to the Title
Policy to Purchaser's satisfaction or (c) provide security in the form of
a bond, letter of credit or cash, in each case deposited in escrow with
Escrowee, to be used by Purchaser to obtain the release of such Defect.
If Seller is unable or unwilling to accomplish any of the foregoing
with respect to such Defect within such period, Seller shall promptly
so advise Purchaser in a written notice given not later than the
expiration of such period (it being understood and agreed that the failure
of Seller to give any notice in writing during such period shall be deemed
to be Seller's election not to undertake any action with respect to such
Defect). Purchaser shall have the right, by delivery of written notice
of such election to Seller within the period expiring on the sooner to
occur of Closing or five days after the receipt by Purchaser of Seller's
notice as aforesaid, to (i) terminate this Agreement, in which event all
of the Deposit shall be immediately refunded to Purchaser, as Purchaser's
sole and exclusive right and remedy with respect to any Defect, and
Purchaser shall not have the right to seek, pursue or obtain any other
right or remedy at law or in equity with respect thereto or (ii) proceed
to Closing, with such Defect being deemed to be a Permitted Exception
(with no reduction in the Purchase Price). In the event Purchaser does
not timely provide such notice of termination, this Agreement shall continue
in full force and effect and Purchaser shall be deemed to have accepted such
Defect as a Permitted Exception (with no reduction in the Purchase Price
with respect thereto.
ARTICLE 6
CLOSING
6.1 CLOSING DATE. The Closing shall take place at 10:00 a.m. CDT
on September 30, 1996 (the "Closing Date"), at the office of the affiliate
of Escrowee:
Chicago Title Insurance Company, 14607 San Pedro (Suite 175), San Antonio,
Texas 78232, or such other time, date or place as the parties shall agree.
6.2 ESCROW. The purchase and sale shall be closed through the
Escrow which shall be created by Seller and Purchaser concurrently herewith.
Upon creation of the Escrow, the Deposit shall be deposited therein.
6.3 DEPOSITS INTO ESCROW. The Escrow Agreement shall be upon the
following terms and conditions, and the Closing shall be contingent on the
performance of all of the following (other than with respect to subparagraph
(a)(iv) below, with respect to which Seller must only exert diligent,
good-faith efforts to deliver to Purchaser):
(a) On or before the Closing Date, Seller shall deposit or cause
to be deposited (other than with respect to subparagraph (iii) of this
paragraph (a), which shall be obtained by Purchaser outside the Escrow,
with the diligent, good-faith assistance of Seller, and the items referenced
in subparagraphs (ii), (iv), (viii) and (viii) of this paragraph (a), which
shall be delivered to Purchaser by Seller outside the Escrow) into the
Escrow the following:
(i) a recordable special warranty deed (the "Deed")
transferring to Purchaser fee simple title to the Real Property, subject
only to the Permitted Exceptions;
(ii) the original execution copies of all Leases and
Specialty License Agreements or copies certified to be true and correct,
if the execution copies are not available;
(iii) estoppel certificates, each in the form of EXHIBIT G
attached hereto (each, an "Estoppel Certificate") from Sears (which
estoppel certificate shall, among other things, acknowledge Sears'
responsibility for the remediation of a leaking underground storage
tank on Sears' parcel), Bealls, K-Mart, Luby's Cafeteria, Walgreen
and Cinemark, (each, an "Anchor" and collectively, the "Anchors")
occupying any portion of the Real Property under a Lease or an Anchor
Agreement (as defined in Section 9.1(o)). An Estoppel Certificate shall
be deemed to be in form and substance satisfactory to Purchaser
notwithstanding any qualifications made by the applicable tenant,
if it is executed by the applicable tenant in the form of EXHIBIT G,
with the information specifically required by the applicable tenant's
Lease and otherwise consistent with the information provided to Purchaser
by Seller in connection with Purchaser's inspection of the Real Property
and the Leases;
(iv) Estoppel Certificates from tenants occupying at least
75 percent of the currently occupied non-Anchor space of the Real Property
(v) any documentation required to be executed by Seller
with respect to any state, county, or local sales taxes applicable to
the conveyance of the Real Property pursuant to this Agreement;
(vi) any documentation (e.g., any certificate of vehicle
title) required to be executed in order to effect the transfer of the
Personalty to Purchaser;
(vii) a Rent Roll of the Closing Date certified as true
and correct by Seller;
(viii)notice to Tenants regarding the sale in form and
substance reasonably acceptable to Seller and Purchaser;
(ix) a FIRPTA Affidavit executed by Seller;
(x) a Form 1099S, executed by Seller; and
(xi) any additional documents that Purchaser determines to be
reasonably necessary to the proper consummation of the transaction
contemplated by this Agreement (provided the same do not materially increase
the costs to, or liability or obligations of, the party delivering the same
hereunder in a manner not otherwise provided for herein).
(b) On or before the Closing Date Purchaser shall deposit into the
Escrow the following:
(i) the Purchase Price, adjusted as set forth herein and
reflected on the closing statement described in Section 6.3(c)(i) (the
"Adjusted Purchase Price");
(ii) any documentation required to be executed by Purchaser
with respect to any state, county, or local sales taxes applicable to the
conveyance of the Real Property pursuant to this Agreement;
(iii) any documentation (e.g., any certificate of vehicle
title) required to be executed in order to effect the transfer of the
Personalty to Purchaser; and
(iv) any additional documents that Seller reasonably
determines to be necessary to the proper consummation of the transaction
contemplated by this Agreement (provided the same do not materially
increase the costs to, or liability or obligations of, the party delivering
the same hereunder in a manner not otherwise provided for herein).
(c) On or before the Closing, Seller and Purchaser shall jointly
deposit into the Escrow the following:
(i) a closing statement in quadruplicate in form and substance
satisfactory to the parties hereto;
(ii) the Assignment of Leases;
(iii) the Assignment of Contracts;
(iv) the Blanket Conveyance;
(v) the Assignment of Option; and
(vi) the Assignment of REA.
(d) Title Insurer shall be unconditionally prepared to issue the
Title Policy in strict accordance with the Title Commitment approved by
Purchaser as set forth in Article 5.
(e) The representations and warranties set forth in Article 9
shall be true and correct as of the date of Closing.
6.4 CLOSING. (a) At Closing, Escrowee shall:
(i) record the following documents in the appropriate records
of the appropriate jurisdictions:
(A) the Deed;
(B) the Assignment of Leases;
(C) the Assignment of Contracts;
(D) the Blanket Conveyance;
(E) the Assignment of REA;
(F) the Assignment of Option;
(G) all recordable documents required by Sections 5.4,
6.3(a)(v), (vi) and (xi), 6.3(b)(ii), (iii) and (iv);
(ii) deliver the Adjusted Purchase Price to Seller;
(iii) deliver to Seller counterparts of all documents described
in paragraph (a)(i) of this Section 6.4; and
(iv) deliver to Purchaser (A) counterparts of all documents
described in paragraph (a)(i) of this Section 6.4; (B) all other documents
described in paragraph 6.3; and (C) the Title Policy.
(b) At Closing, Seller shall deliver to Purchaser, or shall otherwise
leave at the Property, all Records, and shall authorize all third parties
(including, without limitation, Seller's attorneys, to the extent necessary
(and not privileged) to prosecute third-party claims) to deliver any Records
held by them to Purchaser.
ARTICLE 7
PRORATIONS BETWEEN PURCHASER AND SELLER;
TRANSFER OF ACCOUNTS
7.1 PRORATIONS. (a) GENERAL. For purposes of this Section
7.1, the "Proration Date" shall be deemed to be 11:59 p.m. CDT on the day
immediately preceding the Closing Date, so that Purchaser shall be deemed to
be in title to the Real Property and therefore entitled to the income and
responsible for the expenses for the entire day of the Closing Date. Seller
agrees to prepare and deliver to Purchaser prior to Closing a schedule of
tentative adjustments. Such adjustments, if and to the extent known and/or
estimated as of the Closing, shall be paid by Purchaser to Seller (if
the prorations result in a net credit to Seller) or by Seller to Purchaser
(if the prorations result in a net credit to Purchaser), by increasing or
reducing the cash to be paid by Purchaser at the Closing. Any such
adjustments not determined as of the Closing or later determined to have
been inaccurate, shall be paid by Purchaser to Seller, or by Seller to
Purchaser, as the case may be, in cash as soon as practicable
following the receipt or determination of the information necessary to
make such adjustments, but in no event later than December 31, 1996.
(b) RENTALS. Subject to the provisions of Section 7.1(c) and (d),
Rentals (as hereinafter defined) which have been collected shall be prorated
as of the Proration Date. "Rentals" includes fixed monthly rentals,
additional rentals, percentage rentals, escalation rentals, retroactive
rentals, operating cost pass-throughs and expense reimbursements, common
area maintenance charges, utility charges, sprinkler head rentals,
storage rentals, special event proceeds, temporary rents, telephone
receipts, locker rentals, vending machine receipts and other sums and
charges payable by Tenants under the Leases or Specialty License Agreements
or from other occupants or users of the Real Property.
(c) DELINQUENT RENTALS. Delinquent Rentals shall be prorated
between Purchaser and Seller as of the Proration Date but not until they are
actually collected by Purchaser. Rentals are "Delinquent" when payment
thereof is due on or before the Proration Date but has not been made by
the Proration Date. Purchaser shall use Purchaser's good faith efforts
to collect any Delinquent Rentals, but Purchaser shall not be required
to institute legal proceedings and Purchaser shall be required to expend
no more than nominal cost and expense in collecting Delinquent
Rentals. After the Closing, Seller shall not institute any legal
proceedings against any occupant of the Real Property, unless Purchaser
expressly waives in writing Purchaser's right to collect Delinquent
Rentals, in which event Seller may collect such Delinquent Rentals,
including, without limitation, the institution of such legal proceedings.
Notwithstanding the above, with respect to Delinquent Rentals and any
other amounts or rights of any nature regarding tenants who are no longer
tenants of the Property as of the Closing Date, Seller shall retain all
rights relating thereto. Under no circumstances shall Seller take any
action after the Closing against any such occupant which would affect
such occupant's right to occupy its owned, leased or licensed premises.
Seller shall not be entitled to any Rentals received from Tenants
after the Proration Date unless such Tenants are current in their Rental
obligations for periods occurring from and after the Proration Date.
Rentals actually collected by Purchaser shall be applied first against
any amount currently due and then to amounts which are most recently
overdue. For purposes hereof, "amounts currently due" shall include
amounts which would be due for a month which is to commence within five
days after receipt of such amounts.
(d) OPERATING COST PASS-THROUGHS, ETC.. Operating cost
pass-throughs, expense reimbursements, utility charges, common area
maintenance charges, HVAC, advertising and promotional fees, merchants'
association fees, percentage rentals, additional rentals and other
retroactive rental escalations, sums or charges payable by occupants of
the Real Property which accrue as of the Proration Date but are not then
due and payable, shall be prorated as of the Proration Date; PROVIDED,
HOWEVER, no payment thereof shall be made to Seller unless and until
Purchaser actually collects same from the Tenants. Purchaser shall use
Purchaser's good faith efforts to collect such amounts, but Purchaser
shall not be obligated to institute legal proceedings and Purchaser shall
be required to expend no more than nominal cost and expense in collecting
such amounts. After the Closing, Seller shall not institute any legal
proceedings against any occupant of the Real Property owing any amount
described in this paragraph (d), unless Purchaser expressly waives in
writing Purchaser's right to collect Delinquent Rentals, in which event
Seller may collect such Delinquent Rentals, including, without limitation,
the institution of such legal proceedings. Notwithstanding the above,
with respect to Delinquent Rentals and any other amounts or rights of
any nature regarding tenants who are no longer tenants of the Property
as of the Closing Date, Seller shall retain all rights relating thereto.
Seller shall not be entitled to any operating cost pass-throughs,
percentage rentals or other retroactive rental escalations sums or
other charges received from any such occupant after the Proration Date
unless such occupant are current in such obligations for periods from
and after the Proration Date. When and if Purchaser actually collects
any amount described in this paragraph (d), such amounts shall be applied
first to payment(s) currently due and then to payment(s) most recently due,
and the excess, if any, over such current obligations shall be due to
Seller, as and when actually received, to the extent of such operating
cost pass-throughs, percentage rentals or other retroactive rental
escalations, sums or charges, accruing prior the Proration Date.
(e) PREPAID RENTALS. Rentals already received by Seller
attributable to periods after the Proration Date and the amount of any
other credits due occupants of the Property, theretofore paid in cash
to Seller and applicable to any period or periods after the Closing
Date, shall be credited to Purchaser at the Closing.
(f) TAXES AND ASSESSMENTS. Any delinquent real estate taxes and
any delinquent installments of assessments (including penalties and charges)
on the Real Property shall be paid at the Closing from funds accruing to
Seller. All non-delinquent real estate taxes on the Real Property for the
fiscal tax year in which the Proration Date occurs shall be estimated based
upon the most recently available real estate tax bill and prorated as
hereinafter described at the Closing based upon such estimate. Purchaser
and Seller shall re-prorate the real estate taxes following the Closing
upon receipt of the actual real estate tax bill for the applicable fiscal
tax year in which the Proration Date occurs. Purchaser shall be credited
with an amount equal to all real estate taxes for the applicable fiscal
tax year which have accrued prior to the Proration Date. All real estate
taxes for fiscal tax years prior to the fiscal tax year in which the
Proration Date occurs shall be the obligation of Seller. Purchaser shall
also be credited with an amount equal to all real estate taxes already
collected or received by Seller from Tenants and attributable to periods
after the Proration Date, so long as such amounts have not previously
been used to pay real estate taxes already due for the period after the
Proration Date. If, after the Proration Date, any additional real
estate taxes are assessed against the Property by reason of back
assessments, corrections to previous tax bills and similar reasons relating
to the period prior to the Proration Date, Seller shall pay all such
additional real estate taxes, except to the extent the same are actually
collected from Tenants.
(g) OPERATING EXPENSES. All utility service charges for
electricity, heat and air conditioning service, other utilities, common area
maintenance, taxes other than real estate taxes such as rental taxes, other
expenses incurred in operating the Real Property, and any other costs
incurred in the ordinary course of business or the management and
operation of the Real Property, shall be prorated on an accrual basis.
All such charges accruing prior to the Proration Date shall be the
obligation of Seller, and Purchaser shall be credited with an amount equal
to all such charges, taxes, expenses and costs which have accrued prior
to the Proration Date. Purchaser shall be responsible for all such
charges accruing after the Proration Date.
(h) COMMISSIONS. Seller shall pay in full all leasing commissions
with respect to the Leases and the Specialty License Agreements, other than
with respect to options, extensions or expansions which have been disclosed
to Purchaser on EXHIBIT D.
(i) SECURITY DEPOSITS. Purchaser shall receive possession of,
or be credited with, an amount equal to all refundable security deposits
under all Leases and Specialty License Agreements.
(j) CONTRACTS. Amounts payable under the Contracts shall be
prorated on an accrual basis. All amounts payable under the Contracts
accruing prior to the Proration Date shall be the obligation of Seller,
and Purchaser shall be credited with an amount equal to all amounts payable
under the Contracts which have accrued prior to the Proration Date.
Purchaser shall be responsible for all amounts payable under the
Contracts accruing after the Proration Date.
(k) PREPAID EXPENSES. Seller shall be credited with an amount
equal to all costs, expenses, charges and fees prepaid by Seller and
attributable to the period after the Closing Date.
ARTICLE 8
ADDITIONAL AGREEMENTS OF SELLER AND PURCHASER
8.1 SELLER'S AGREEMENTS. Prior to Closing, Seller agrees:
(a) to comply with this Agreement, all Leases, Contracts,
Specialty License Agreements, Permitted Exceptions and Mortgages, and to
timely pay all taxes, insurance premiums, assessments and utility charges;
(b) to operate and manage the Property in the ordinary course of
business in accordance with Seller's normal and customary practice prior
to the date hereof, but subject to the terms of this Agreement and
in accordance with all applicable federal, state and local laws,
ordinances and requirements, and maintain the Property in good
order, condition and repair, reasonable wear and tear excepted, which
maintenance obligations shall be subject to Article 10 hereof and shall
not include extraordinary capital expenditures;
(c) except with Purchaser's prior written consent, not to enter
into any Contract, which consent shall not be unreasonably withheld prior
to the expiration of the Inspection Period; after the expiration of the
Inspection Period, Purchaser's consent shall be in Purchaser's sole and
absolute discretion; and
(d) to notify Purchaser promptly upon notice of Seller's receipt
of any casualty or threatened condemnation of any portion of the Property.
8.2 LEASING. (a) EXISTING LEASES. After the date hereof, Seller
shall not amend, modify, extend or terminate, nor enter into any written
or oral agreement to amend, modify, extend or terminate, any of the Leases
or the Specialty License Agreements without Purchaser's prior written
consent, which consent shall be in Purchaser's sole and absolute discretion.
If Purchaser does not provide such consent to Seller within five business
days after Purchaser's receipt of Seller's request therefor, Purchaser
shall be deemed to have denied its consent. Notwithstanding the foregoing,
without Purchaser's prior written consent, which consent shall be in
Purchaser's sole and absolute discretion, Seller shall not exercise any
legal remedy against any occupant of any of the Real Property who is
in default under its respective Lease or Specialty License Agreement or
other occupancy, reciprocal easement or operating agreement (including,
without limitation, the right to commence unlawful detainer or eviction
actions).
(b) PROPOSED LEASES. After the date hereof, without Purchaser's
prior written consent, which consent shall be in Purchaser's sole and
absolute discretion, Seller shall not enter into any new Leases and Specialty
License Agreements or expand the premises leased pursuant to any existing
Lease or Specialty License Agreement.
(c) LEASING COSTS. Except as set forth in paragraph 8.3, Seller
shall be solely responsible for all costs (collectively, the "Tenant Costs")
incurred in connection with placing tenants in occupancy at the Real Property
pursuant to new Leases or Specialty License Agreements executed prior to the
date of this Agreement and in connection with extensions of lease terms of
tenants scheduled on the Rent Roll beyond their scheduled expiration date
or expansions of the premises leased to existing tenants pursuant to
extension or expansion agreements executed prior to the date of
this Agreement, including, without limitation, tenant inducements,
moving costs, third party costs, attorneys' fees, leasing commissions
(other than commissions payable to Seller or its employees, only as
reflected in the financial information furnished by Seller to Purchaser
prior to the date of this Agreement), tenant improvement costs,
construction allowances and lease buy-outs; provided all such costs are
set forth in the Leases, Specialty License Agreements, lease modifications
or other documents or agreements provided to Purchaser.
8.3 PURCHASER'S ASSUMPTION OF OBLIGATIONS. From and after
the Closing Date, Purchaser shall assume and perform all of Seller's
obligations, if any, that are to be performed after the Closing Date under
the terms and conditions of all Leases, Specialty License Agreements and
Contracts assigned at Closing under the terms of this Agreement. Purchaser
shall also be solely responsible for all Tenant Costs incurred in
connection with Leases, Specialty License Agreements or extensions
thereof or expansions of leased premises thereunder, to which Purchaser
has consented pursuant to paragraphs 8.2(a) or (b).
8.4 POSSESSION. It shall be a condition of Purchaser's obligation
to purchase the Property that Purchaser shall obtain possession of the Real
Property upon the completion of the Closing, subject only to the Permitted
Exceptions.
8.5 CONFIDENTIALITY. Prior to Closing, Purchaser shall maintain as
confidential all information and materials relating to, the Property or
Seller, including, without limitation, all documents, instruments,
agreements, reports, data, compilations, summaries and notes and any
other information, whether written or oral (collectively, the
"Evaluation Material"), which is furnished or made available to Purchaser or
Purchaser's accountants, agents, attorneys, contractors, employees,
inspectors or representatives. The term "Evaluation Material" will also
include all analyses, compilations, studies, or other material prepared by
Purchaser or Purchaser's accountants, agents, attorneys, contractors,
employees, inspectors or representatives containing or based in whole
or in part on any information furnished or made available to Purchaser
in connection with the transactions contemplated under this Agreement.
Prior to Closing, Evaluation Material shall not be disclosed by
Purchaser or Purchaser's accountants, agents, attorneys, contractors,
employees, inspectors or representatives, in any manner whatsoever, whether
in whole or in part, without the prior written consent of Seller, except
for disclosures to accountants, attorneys, investment bankers, investors,
partners or lending institutions, but only to the extent reasonably
necessary or appropriate in connection with the transactions
contemplated under this Agreement, and except for the disclosure of
Evaluation Material which (a) is or becomes generally available to the
public other than as a result of a disclosure by Purchaser or Purchaser's
accountants, agents, attorneys, contractors, employees, inspectors or
representatives, (b) becomes available to Purchaser on a non-confidential
basis from a source other than Seller, which source is not known by
Purchaser to be bound by a confidentiality agreement with respect to the
Evaluation Material or (c) is required to be disclosed by court order.
The terms and conditions of this Section shall survive the termination of
this Agreement but shall not survive Closing.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
Except as specifically set forth in Section 9.1 below, the sale of the
Property hereunder is and will be made on an "as is" basis, without
representations and warranties of any kind or nature, express, implied or
otherwise, including, but not limited to, any representation or warranty
concerning title to the Property, the physical condition of the Property
(including, but not limited to, the condition of the soil or the
Improvements), the environmental condition of the Property (including, but
not limited to, the presence or absence of hazardous substances on or
respecting the Property), the compliance of the Property with applicable
laws and regulations (including, but not limited to, zoning and building
codes or the status of development or use rights respecting the Property),
the financial condition of the Property or any other representation or
warranty respecting any income, expenses, charges, liens or encumbrances,
rights or claims on, affecting or pertaining to the Property or any part
thereof. Purchaser acknowledges that, during the Inspection Period,
Purchaser will examine, review and inspect all matters which in Purchaser's
judgment bear upon the Property and its value and suitability for
Purchaser's purposes. Except as to matters specifically set forth in
Section 9.1 below, Purchaser will acquire the Property solely
on the basis of its own physical and financial examinations, reviews
and inspections and the title insurance protection afforded by the
Title Policy.
9.1 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller
represents and warrants to Purchaser that:
(a) CONTRACTS; INSURANCE. To Seller's knowledge, there are no
Contracts, except as set forth in EXHIBIT C hereto. Except as set forth on
EXHIBIT C to Seller's knowledge, there is no default or circumstance which,
with the giving of notice or the passage of time or both, would constitute
a breach or default under the Contracts and except as set forth on EXHIBIT C
all of the Contracts can be terminated without premium or penalty of any
kind upon not more than 30 days' prior written notice. The Property is
currently insured pursuant to the insurance policies described
on EXHIBIT C-1, and the premiums for such policies shall be paid at or
prior to Closing. Seller has continuously maintained so-called "zero
deductible" commercial general liability insurance covering the Property
for at least ten years prior to the date hereof.
(b) LEASES. Except for the Leases described in the Rent Roll
attached as EXHIBIT D and the Specialty License Agreements described in
EXHIBIT E, there are no other leases encumbering the Property, or any
part thereof or interest therein, and no person, other than tenants and
licensees under the Leases or the Specialty License Agreements, have
any right of possession of the Real Property, or any part thereof or
interest therein. Except as set forth on EXHIBIT D or as disclosed
by executed Estoppel Certificates delivered to Purchaser prior to Closing,
to Seller's knowledge there is no breach, default or circumstance which,
with the giving of notice or the passage of time or both, would constitute
a breach or default on the part of Seller or any tenant or licensee under
any of the Leases or Specialty License Agreements.
(c) SELLER'S AUTHORITY. Seller has been duly formed and is validly
existing, in good standing in the State of Texas and is duly qualified to
do business and is in good standing in all states (including Texas) in which
it conducts business and Seller has the full right and authority and has
obtained any and all consents required therefor to enter into this Agreement,
consummate or cause to be consummated all transactions contemplated hereby
and make or cause to be made transfers and assignments contemplated herein;
the persons signing this Agreement on behalf of Seller are authorized to do
so; and this Agreement and all of the documents to be delivered by Seller
at the Closing have been authorized and properly executed and will
constitute the valid and binding obligations of Seller, enforceable against
Seller in accordance with their terms.
(d) PENDING ACTIONS. There are no suits, actions or proceedings
pending against Seller or any part of the Property, and to Seller's knowledge,
there are no suits, actions or proceedings which have been threatened in
writing against Seller or any part of the Property, other than those listed
on EXHIBIT R.
(e) CONDEMNATION. There are no pending or, to Seller's knowledge,
proposed in writing, condemnation or eminent domain proceedings affecting any
portion of or interest in any portion of the Property.
(f) COMPLIANCE. Seller has received no written notice from any
governmental authority having jurisdiction over the Property to the effect
that the Property violates any applicable law, code or ordinance. Seller
has received no written notice from any party to any Lease, Specialty License
Agreement or Anchor Agreement to the effect that Seller is in default under
any such document.
(g) ENVIRONMENTAL NOTICES. Seller has not received written notice
from any governmental authority of any violation of an Environmental Law.
To Seller's knowledge, no violation of any Environmental Law currently exists
with respect to any portion of the Property. As used in this Agreement,
the term "Environmental Law" means the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et. seq.,
as amended by the Superfund Amendments and Reauthorization Act; the Emergency
Planning and Community Right-to-Know Act ("EPCRA"), 42 U.S.C. Sec 11001 et.
seq.; the Toxic Substance Control Act ("TSCA"), 15 U.S.C. Sec 2601 et. seq.;
the Atomic Energy Act, 42 U.S.C. Sec 2011 et. seq. ("AEA"); or any
equivalent or state or local laws or ordinances.
(h) CONSENTS. Except for the release by the beneficiary under the
Mortgage, which shall be a condition of Purchaser's obligation to purchase
the Property, no approval, consent, waiver or filing with any third party,
including, but not limited to, any governmental bodies, agencies or
instrumentalities, is required for the execution, delivery and performance
of this Agreement by Seller or for the consummation of all transactions
contemplated hereby.
(i) SELLER'S CLAIMS. As of the date hereof, Seller has no claim
against any portion of the Property and, in connection therewith, has no
right to assert any claim, lien or other encumbrance against any portion
of the Property.
(j) TRUE INFORMATION. Seller has provided to Purchaser true and
correct copies of the Option and all Leases, Contracts, Anchor Agreements,
Specialty License Agreements and all other Records, with no relevant
documents omitted, including, without limitation, any side agreements or
other special arrangements in respect of Leases, Anchor Agreements or
other agreements with occupants of the Real Property.
(k) TITLE TO PROPERTY. All contractors, subcontractors and other
persons furnishing labor, materials, supplies or services (including,
without limitation, parties to the Contracts) to or on behalf of Seller or
any portion of the Property have been paid in full or, in the usual course
of Seller's business (but in any event at or prior to Closing) will be
paid in full, and, at Closing, there shall be no claims against
any portion of the Property in connection therewith. There is no contract
or agreement between Seller and any entity (other than Purchaser) related
to the acquisition or proposed acquisition by such entity of the Property
or any portion thereof or interest therein.
(l) LEASING COMMISSIONS. No leasing, brokerage or like
commissions, fees or payments are due in respect of any of the Leases or
Specialty License Agreements, or with respect to any other matter or thing
relating to the Property, except for commissions owing to Seller in the
ordinary course of business, and reflected on the Financials (as hereinafter
defined).
(m) FINANCIALS. The Cash Operating Statements for years ended
December 31, 1993, 1994 and 1995 and year-to-date through August, 1996
(collectively, the "Financials") have been prepared by or on behalf of Seller
in the ordinary course of its business.
(n) TAXES. To Seller's knowledge, there are no unpaid or
outstanding real estate or other taxes or assessments (including, without
limitation, mitigation, impact, concurrence, development and utility
tap-in fees and contributions-in-aid-of-construction) on or against the
Property or any part thereof (except only ad valorem taxes not yet due
and payable).
(o) ANCHOR AGREEMENTS. To Seller's knowledge, all agreements (the
"Anchor Agreements") set forth on EXHIBIT Q hereto to which any Anchor is
a party are unmodified and in full force and effect, in accordance with
their respective terms, and constitute the sole agreements and understandings
(written or oral) between Seller and the Anchors (or any of their affiliates)
with respect to the Property or any portion thereof and the copies thereof
furnished by Seller to Purchaser are true and complete.
(p) TENANT IMPROVEMENTS. All tenant improvements or work to be
done, furnished or paid for by Seller for, or in connection with, any of
the Leases or Specialty License Agreements have been completed and paid for.
(q) PERSONALTY. The Personalty described on EXHIBIT F is all the
personal property attached or appurtenant to, or used or usable by Seller
in connection with the occupancy or operation of all or any part of the
Real Property, and all such Personalty is owned by Seller free of any and
all liens, encumbrances, charges or adverse interests other than Permitted
Encumbrances. There is no Personalty located at the Real Property
owned by any party other than Seller.
(r) PLEDGES. No interest in the Specialty License Agreements,
Anchor Agreements, Leases or rents has been assigned, pledged, hypothecated
or otherwise encumbered by Seller, except pursuant to the Mortgages.
(s) EMPLOYEES; EMPLOYMENT AGREEMENTS. Seller has no
employees. There are no employment, management or similar agreements or
arrangements between Seller and any third parties or any of its employees
or others which will be binding on Purchaser, nor are there any outstanding
worker's compensation, discrimination or other employment-related suits or
claims, nor have any incidents occurred which could give rise to any such
suit or claim. There are no pension plans (including, without limitation,
401(k) plans), whether or not fully funded and/or vested, with respect
to any employee of Seller, for which Purchaser shall be liable.
9.2 PURCHASER'S REPRESENTATIONS AND WARRANTIES.
Purchaser represents and warrants to Seller that:
(a) PURCHASER'S AUTHORITY. Purchaser has been duly formed and is
validly existing and Purchaser has the full right and authority and has
obtained any and all consents required therefor to enter into this Agreement,
consummate or cause to be consummated the purchase and accept the transfers
and assignments contemplated herein; the persons signing this Agreement
on behalf of Purchaser are authorized to do so; and this Agreement and
all of the documents to be delivered by Purchaser at the Closing have
been authorized and properly executed and will constitute the valid and
binding obligations of Purchaser, enforceable against Purchaser in
accordance with their terms.
(b) PENDING ACTIONS. There is no action or proceeding pending
against Purchaser, and to Purchaser's knowledge, there are no actions or
proceedings threatened against Purchaser which, if determined adversely
to Purchaser, would have a material adverse affect on Purchaser or Purchaser's
ability to consummate the transactions contemplated under the terms of this
Agreement.
(c) CONSENTS. To Purchaser's knowledge, except for any release
required from a Lender, no approval, consent, waiver or filing with any
third party, including, but not limited to, any governmental bodies,
agencies or instrumentalities, is required for the execution, delivery
and performance of this Agreement by Purchaser.
9.3 "KNOWLEDGE" DEFINED. As used herein, the term "knowledge" as
applied to Seller shall mean the actual knowledge of Julie Strocchia and/or
Glenn Emig, both of whom are familiar with the Property, after their
consultation with the property manager and leasing coordinator of Seller's
third-party property management entity, and the appropriate in-house legal
personnel of JMB Realty Corporation, all of whom have reviewed
Section 9.1 hereof.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made by Seller and Purchaser in this
Agreement shall be deemed to be remade as of the Closing Date and shall
survive the Closing only until December 31, 1996. Notwithstanding anything
contrary contained in this Agreement, if Purchaser shall have actual knowledge
as of Closing that any of the representations or warranties of Seller
contained herein are false or inaccurate or that Seller is in breach
or default of any of its obligations under this Agreement, and
Purchaser nonetheless closes the transactions hereunder and acquires the
Property, then Seller shall have no liability or obligation respecting such
false or inaccurate representations or warranties or other breach or default
(and any cause of action resulting therefrom shall terminate upon such closing
hereunder). With respect to the foregoing, Purchaser shall be deemed to have
actual knowledge of the information contained in any and all reports or
studies prepared by or on behalf of Purchaser in connection with its
due diligence reviews, inspections and examinations of the Property.
9.5 OBLIGATION TO INDEMNIFY.
(a) BY PURCHASER. Purchaser shall hold harmless, indemnify
and defend Seller from and against: (i) any and all third party claims for
Purchaser's torts or breaches of contract related to the Property and arising
out of events or actions occurring on or after the Closing Date, (ii) any
and all loss, damage or third party claims arising from Purchaser's
inspections or examinations of the Property prior to the Closing Date;
and (iii) all costs and expenses, included reasonable attorneys' fees,
incurred by Seller as a result of the foregoing.
(b) BY SELLER. Seller shall hold harmless, indemnify and
defend Purchaser from and against: (i) any and all third party claims for
Seller's torts or breaches of contract related to the Property and arising
out of events or actions occurring prior to the Closing Date and (ii) all
costs and expenses, included reasonable attorneys' fees, incurred
by Purchaser as a result of such claims.
(c) GENERALLY. Each indemnification under this Agreement
shall be subject to the following provisions: the indemnitee shall notify
indemnitor of any such claim against indemnitee within 30 days after it has
notice of such claim, but failure to notify indemnitor shall in no case
prejudice the rights of indemnitee under this Agreement unless
indemnitor shall be prejudiced by such failure and then only to
the extent of such prejudice. Should indemnitor fail to discharge or
undertake to defend indemnitee against such liability within ten days after
the indemnitee gives the indemnitor written notice of the same, then
indemnitee may settle such liability, and indemnitor's liability to
indemnitee shall be conclusively established by such settlement, the
amount of such liability to include both the settlement consideration
and the reasonable costs and expenses, including attorneys' fees, incurred
by indemnitee in effecting such settlement.
ARTICLE 10
DAMAGE OR DESTRUCTION; CONDEMNATION
10.1 DAMAGE OR DESTRUCTION. In the event of any damage to or
destruction of the Property or any portion thereof subsequent to the date
hereof and prior to, or on, the Closing Date, Seller shall provide written
notice of such damage promptly after its occurrence, and Purchaser's rights
shall be as follows:
Whether or not the loss is covered by insurance, within 15 days after
receipt of the notice from Seller of the occurrence of the damage, Purchaser
shall elect, by written notice to Seller, either to:
(a) in the event the reasonably expected cost of restoration
exceeds $250,000, terminate this Agreement, in which event the Deposit
shall be returned immediately to Purchaser, and thereupon all obligations
of the parties hereunder shall cease and this Agreement shall have no further
force and effect; or
(b) proceed with the transaction contemplated under this Agreement
(except that if the Closing Date is less than 15 days following Purchaser's
receipt of such notice, the Closing shall be delayed until Purchaser makes
such election, but in no event more than 30 days after the date of such
receipt), in which event Purchaser shall not have any right to offset or
reduction of the Purchase Price and Purchaser shall receive at
Closing (i) an assignment of (A) all insurance proceeds theretofore paid to
Seller with respect to such damage, (B) all claims against any insurer with
respect to such damage and (C) all claims against third parties with respect
to such damage and (ii) the full amount of Seller's deductible, in cash.
10.2 CONDEMNATION. If, subsequent to the date hereof and prior to,
or on, the Closing Date, (a) any proceeding (judicial, administrative or
otherwise) shall be commenced for the proposed taking of any portion of,
or interest in, the Property by condemnation or eminent domain or any
action in the nature of eminent domain, or (b) Seller shall receive
notice of any such proposed taking, Purchaser shall have the right
and option to terminate this Agreement, in the event the reasonably
expected condemnation award exceeds $250,000, by giving Seller written
notice to such effect within 15 days after Purchaser's receipt of written
notification of the commencement of such proceeding or receipt by Seller
of such notice, as the case may be. In the event (A) the reasonably
expected condemnation award is less than $250,000 or (B) if greater
than $250,000 and Purchaser shall elect to proceed with the transaction
contemplated hereby, Seller shall assign to Purchaser at Closing all
Seller's right to any proceeds from such taking. Seller agrees to furnish
Purchaser written notification with respect to the commencement of any such
proceedings or receipt by Seller of such notice, as the case may be,
immediately upon Seller's notice thereof. Should Purchaser elect to so
terminate this Agreement, the Deposit shall be returned immediately to
Purchaser, and thereupon the parties hereto shall be released from any
and all further obligations hereunder. If the Closing Date is less than
15 days following the last day on which Purchaser is entitled to elect to
terminate this Agreement, then the Closing shall be delayed until Purchaser
makes such election, but in no event more than 30 days after Purchaser's
receipt of the notice.
ARTICLE 11
DEFAULT
11.1 SELLER'S DEFAULT. If Seller shall default in the performance
of any of its obligations hereunder, and if such default is not cured within
ten days after written notice to Seller specifying such default, the sole and
exclusive remedy of Purchaser shall be the right to elect either to
(a) terminate this Agreement in which event the Deposit shall be promptly
returned to Purchaser, or (b) provided Purchaser is not then in material
default beyond the applicable cure period therefor, if any, and is
ready, willing and able to perform hereunder, pursue an action for specific
performance of the terms of this Agreement. Purchaser shall not have the
right to seek, pursue or obtain any other remedy at law, in equity or
otherwise on account of or in connection with any such default by Seller.
11.2 PURCHASER'S DEFAULT. If Purchaser shall default in the
performance of any of its obligations hereunder, and if such default is not
cured within ten days after written notice to Purchaser specifying such
default, Seller shall have the right at its election to terminate this
Agreement in which event the Deposit shall be promptly paid to Seller
as full and complete liquidated damages (and not as a penalty
or forfeiture) in lieu of any and all other legal and equitable rights
and remedies which Seller may have hereunder.
11.3 CLOSING IS A WAIVER. In the event that Closing shall actually
occur, then the occurrence of such Closing shall be deemed a complete waiver
by each party of all of its rights to make any claim against the other for
breach or failure by such breaching party of any of its obligations required
to be performed on or prior to Closing. In no event shall either party
have the right after Closing to make any claim or seek or any remedy
against the other based upon any obligation required to be performed by
the other on or prior to Closing; PROVIDED, HOWEVER, that except
as otherwise set forth herein, the waiver contained herein shall not affect
liability after the Closing Date with respect to any breach of either party's
representations and warranties contained herein.
ARTICLE 12
BROKERAGE COMMISSIONS
Seller and Purchaser represent and warrant each to the other that
(except as set forth in this Article 12) they have not dealt with any real
estate broker, sales person or finder in connection with this transaction
and no person initiated or participated in the negotiation of this
Agreement or showed the Property to Purchaser, and to the knowledge
of Seller and Purchaser, there are no real estate brokerage commissions,
finder's fees, or other similar fees due any person or entity on account
of or as a result of this transaction, except as set forth herein. Seller
and Purchaser each agree to indemnify, defend and hold the other harmless
from and against any loss, cost, liability or expense suffered or
incurred by the other party as a result of a claim or claims for
brokerage commissions, finder's fees or other similar fees from any party
or firm that is based on the act or omission of the party in breach of the
above warranty. Seller is obligated to pay a brokerage commission to
U.S. Equities Realty, Inc., pursuant to a separate written agreement.
ARTICLE 13
NOTICES
13.1 NOTICES. Any notice, request, demand, instruction or other
document to be given or served hereunder or under any document or instrument
executed pursuant hereto shall be in writing and shall be deemed to be
delivered and effective upon the earlier of (a) upon personal delivery to
and receipt by the person to whom delivered, (b) three days after deposit
in United States registered or certified mail, return receipt requested,
(c) one business day after deposit with a nationally recognized
overnight express courier for next day delivery or (d) the business
day of telecopy, in each case, addressed to the parties at their respective
addresses or telecopy numbers (as applicable) set forth below:
If to Purchaser: Brownsville Sunrise Developers, L.P.
1600 Cantrell Road
Little Rock, Arkansas 72201
Attention of James E. Darr, Jr.
Telecopy No.: (501) 376-5031
with a copy to: James A. Moomaw
Hughes & Luce, L.L.P.
1717 Main Street (Suite 2800)
Dallas, Texas 75201
Telecopy No.: (214) 939-5849
If to Seller: Sunrise Brownsville Associates, Ltd.
900 North Michigan Avenue (Suite 1900)
Chicago, Illinois 60611
Attention of Glenn Emig
Telecopy No.: (312) 915-9310
with a copy to: Gary M. Laughlin
Pircher, Nichols & Meeks
1999 Avenue of the Stars
Los Angeles, California 90067
Telecopy No.: (310) 201-8922
and a copy to: U.S. Equities Realty, Inc.
20 North Michigan Avenue (Suite 400)
Chicago, Illinois 60602
Attention of James M. Whittington
Telecopy No.: (312) 456-0056
13.2 CHANGE OF ADDRESS. A party may change its address and
telecopy number for receipt of notices by service of a notice of such
change in accordance herewith.
ARTICLE 14
MISCELLANEOUS
14.1 PARTIES BOUND. All provisions hereof, including, without
limitation, all representations and warranties made hereunder, shall extend
to, be obligatory upon and inure to the benefit of the respective heirs,
devisees, legal representatives, successors, assigns and beneficiaries of
the parties hereto.
14.2 HEADINGS. The article and paragraph headings of this Agreement
are for convenience only and in no way define, limit or enlarge the scope or
meaning of the language hereof.
14.3 INVALIDITY. If any term, provision or condition of this
Agreement is found to be or is rendered invalid or unenforceable, it shall
not affect the remaining terms, provisions and conditions of this Agreement,
and each and every other term, provision and condition of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
14.4 GOVERNING LAW. This Agreement shall, in all respects, be
governed, construed, applied and enforced in accordance with the laws of
the State of Texas.
14.5 NO THIRD PARTY BENEFICIARY. This Agreement is not intended
to give or confer any benefits, rights, privileges, claims, actions or
remedies to any person or entity as a third party beneficiary under any
statutes, laws, codes, ordinances, rules, regulations, orders, decrees
or otherwise.
14.6 AMENDMENTS. This Agreement may be amended or supplemented
only by an instrument in writing executed by the party against whom
enforcement is sought.
14.7 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.
14.8 FURTHER ACTS. In addition to the acts and deeds recited herein
and contemplated to be performed, executed and/or delivered by Seller to
Purchaser, Seller and Purchaser agree to perform, execute and/or deliver
or cause to be performed, executed and/or delivered at the Closing or after
the Closing any and all further acts, deeds and assurances as may be
necessary to consummate the transactions contemplated hereby.
14.9 EXTENSION OF PERFORMANCE. Whenever under the terms of this
Agreement the time for performance of a covenant or condition falls upon a
Saturday, Sunday or holiday, such time for performance shall be extended
to the next business day. Otherwise all references in this Agreement to
days shall mean calendar days.
14.10. TIME. Time is of the essence in the performance of each
and every term, condition and covenant contained in this Agreement.
14.11 ASSIGNMENT. This Agreement and all rights hereunder may be
assigned or transferred by Purchaser without the prior written consent of
Seller.
14.12 ATTORNEYS' FEES. Should either party employ attorneys to
enforce any of the provisions hereof, the party losing in any final judgment
agrees to pay the prevailing party all reasonable costs, charges and expenses,
including attorneys' fees, expended or incurred in connection therewith.
14.13 USE OF PRONOUNS. The use of the neuter singular pronoun to
refer to Seller and Purchaser shall be deemed a proper reference, even though
Seller or Purchaser may be an individual, partnership or a group of two or
more individuals. The necessary grammatical changes required to make the
provisions of this Agreement apply in the plural sense where there is more
than one seller or purchaser and to either partnerships or individuals
(male or female) shall in all instances be assumed as though
in each case fully expressed.
14.14 LIMITATION OF LIABILITY. No constituent partner in or agent of
Seller, nor any advisor, trustee, director, officer, employee, beneficiary,
shareholder, participant, representative or agent of any corporation or
trust that is or becomes a constituent partner in Seller (including, but not
limited to, Carlyle Real Estate Limited Partnership-X and JMB Realty
Corporation) shall have any personal liability, directly or indirectly,
under or in connection with this Agreement or any agreement made or
entered into under or pursuant to the provisions of this Agreement,
or any amendment or amendments to any of the foregoing made at any time or
times, heretofore or hereafter, and Purchaser and its successors and assigns
and, without limitation, all other persons and entities, shall look solely
to Seller's assets for the payment of any claim or for any performance,
and Purchaser, on behalf of itself and its successors and assigns,
hereby waives any and all such personal liability. Notwithstanding anything
contrary in this Agreement, neither the negative capital account of any
constituent partner in Seller, nor any obligation of any constituent partner
in Seller to restore a negative capital account or to contribute capital to
Seller, shall at any time be deemed to be the property or an asset of Seller
or any such other constituent partner (and neither Purchaser nor any of
its successors or assigns shall have any right to collect, enforce or
proceed against or with respect to any such negative capital account of
partner's obligation to restore or contribute).
Notwithstanding anything to the contrary contained herein, if the
closing of the transactions hereunder shall have occurred (and Purchaser
shall not have waived, relinquished or released any applicable rights in
further limitation), the aggregate liability of Seller arising pursuant
to or in connection with the representations, warranties, indemnifications,
covenants or other obligations (whether express or implied) of Seller
under this Agreement (or any document executed or delivered in
connection herewith) shall not exceed $200,000.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the date first above written.
PURCHASER:
BROWNSVILLE SUNRISE DEVELOPERS, L.P.,
a Texas limited partnership,
By: BROWNSVILLE SHOPPING CENTER, INC.,
a Texas corporation,
its general partner,
By: JAMES E DARR, JR.
James E. Darr, Jr.,
Vice President
SELLER:
SUNRISE BROWNSVILLE ASSOCIATES, LTD.,
a Texas limited partnership,
By: CARLYLE REAL ESTATE LIMITED PARTNERSHIP-X,
an Illinois limited partnership,
its general partner,
By: JMB REALTY CORPORATION
a Delaware corporation,
its general partner,
By: ______________________
Name:______________________
Title:______________________
LIST OF EXHIBITS
A - Legal Description of Real Property
B - Permitted Exceptions
C - List of Contracts
C-1 - List of Insurance Policies
D - Rent Roll
E - List of Specialty License Agreements
F - List of Personalty
F - List of Personalty Owned by Others
G - Form of Tenant Estoppel Certificate
H - INTENTIONALLY DELETED
I - Form of Assignment of Contracts
J - Form of Assignment of Leases
K - Mortgages
L - INTENTIONALLY DELETED
M - Form of Assignment of REA
N - Form of Blanket Conveyance
O - INTENTIONALLY DELETED
P - Form of Survey Certification
Q - Anchor Agreements
R - Pending Litigation
S - Form of Assignment of Option
EXECUTION
PURCHASE AND SALE AGREEMENT
by and between
SUNRISE BROWNSVILLE ASSOCIATES, LTD.,
a Texas limited partnership,
and
BROWNSVILLE SUNRISE DEVELOPERS, L.P.,
a Texas limited partnership
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS
1.1 Assignment of Contracts. .
1.2 Assignment of Leases
1.3 Assignment of Option
1.4 Assignment of REA
1.5 Blanket Conveyance
1.6 Closing
1.7 Closing Date
1.8 Contracts
1.9 Defect or Defects
1.10 Escrow
1.11 Escrow Agreement
1.12 Escrowee
1.13 Leases
1.14 Option
1.15 Permitted Exceptions
1.16 Personalty
1.17 Property
1.18 Purchaser
1.19 Real Property
1.20 Records
1.21 Seller
1.22 Specialty License Agreements
1.23 Survey
1.24 Title Commitment
1.25 Title Insurer
1.26 Title Policy
ARTICLE 2 AGREEMENT TO SELL
2.1 Agreement
2.2 Purchase Price
ARTICLE 3 SATISFACTION OF MORTGAGES; REDEVELOPMENT NDITION
3.1 Description of Mortgages .
3.2 Satisfaction
ARTICLE 4 INSPECTION PERIOD
4.1 Completed Due Diligence Reviews
ARTICLE 5 ESCROW; TITLE AND SURVEY
5.1 Escrow
5.2 Escrow and Title Costs . .
5.3 Title Commitment and Survey
5.4 Defects in Title Commitment or Survey
ARTICLE 6 CLOSING
6.1 Closing Date
6.2 Escrow
6.3 Deposits into Escrow
6.4 Closing
ARTICLE 7 PRORATIONS BETWEEN PURCHASER AND SELLER ANSFER OF
ACCOUNTS
7.1 Prorations
(a) General
(b) Rentals
(c) Delinquent Rentals
(d) Operating Cost Pass-Throughs, Etc.
(e) Prepaid Rentals
(f) Taxes and Assessments. .
(g) Operating Expenses
(h) Commissions
(i) Security Deposits
(j) Contracts
(k) Prepaid Expenses
ARTICLE 8 ADDITIONAL AGREEMENTS OF SELLER AND PURCHASER
8.1 Seller's Agreements
8.2 Leasing
(a) Existing Leases
(b) Proposed Leases
(c) Leasing Costs
8.3 Purchaser's Assumption of Obligations
8.4 Possession
8.5 Confidentiality
ARTICLE 9 REPRESENTATIONS AND WARRANTIES
9.1 Seller's Representations and Warranties
(a) Contracts; Insurance
(b) Leases
(c) Seller's Authority
(d) Pending Actions
(e) Condemnation
(f) Compliance
(g) Environmental Notices. .
(h) Consents
(i) Seller's Claims
(j) True Information
(k) Title to Property
(l) Leasing Commissions. . .
(m) Financials
(n) Taxes
(o) Anchor Agreements
(p) Tenant Improvements. . .
(q) Personalty
(r) Pledges
(s) Employees; Employment Agreements
9.2 Purchaser's Representations and Warranties
(a) Purchaser's Authority. .
(b) Pending Actions
(c) Consents
9.3 "Knowledge" Defined
9.4 Survival of Representations and Warranties
9.5 Obligation to Indemnify
(a) By Purchaser
(b) By Seller
(c) Generally
ARTICLE 10 DAMAGE OR DESTRUCTION; CONDEMNATION
10.1 Damage or Destruction . .
10.2 Condemnation
ARTICLE 11 DEFAULT
11.1 Seller's Default
11.2 Purchaser's Default
11.3 Closing is a Waiver
ARTICLE 12 BROKERAGE COMMISSIONS
ARTICLE 13 NOTICES
13.1 Notices
13.2 Change of Address
ARTICLE 14 MISCELLANEOUS . . . .
14.1 Parties Bound
14.2 Headings
14.3 Invalidity
14.4 Governing Law
14.5 No Third Party Beneficiary
14.6 Amendments
14.7 Execution in Counterparts
14.8 Further Acts
14.9 Extension of Performance.
14.10. Time
14.11 Assignment
14.12 Attorneys' Fees
14.13 Use of Pronouns
14.14 Limitation of Liability.
LIST OF EXHIBITS
