SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
--------
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) October 12, 2000
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Paine Webber Income Properties Three Limited Partnership
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(Exact name of registrant as specified in its charter)
Delaware 0-10979 13-3038189
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(State or other jurisdiction) (Commission (IRS Employer
of incorporation File Number) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
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(Former name or address, if changed since last report)
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES THREE LIMITED PARTNERSHIP
ITEM 2 - Disposition of Assets
------------------------------
Northeast Plaza Shopping Center- Sarasota, Florida
Disposition Date - October 12, 2000
On October 12, 2000, PaineWebber Income Properties Three Limited
Partnership ("the Partnership") sold the wholly-owned Northeast Plaza Shopping
Center to an unrelated third party for a gross sale price of $3,712,500. After
deducting closing costs of $32,000, net property proration adjustments totalling
$126,000 and the prepayment of the first mortgage debt secured by the property
of approximately $758,000, the Partnership received net sale proceeds of
approximately $2,796,000. The Partnership was entitled to 100% of these net sale
proceeds because the master lease agreement which had covered the Northeast
Plaza property was terminated prior to the sale. As of August 1, 2000, the
master lease agreement was terminated in return for the Partnership's release of
the master lessee from any liability regarding the known environmental issues at
the property. As discussed further in the Partnership's Quarterly Report on Form
10-Q for the quarter ended June 30, 2000, the Partnership has been focusing on a
sale of the Northeast Plaza Shopping Center, its remaining real estate
investment, and a liquidation of the Partnership. With the sale of the Northeast
Plaza property completed, the Partnership is currently proceeding with an
orderly liquidation. Management currently expects to make a Liquidating
Distribution, which will include the net proceeds of the Northeast Plaza
transaction, along with the remaining Partnership reserves after the payment of
all liquidation-related expenses, on November 15, 2000. The formal liquidation
of the Partnership would be completed shortly thereafter. The total amount of
the Final Distribution is currently estimated to be at least $90 per original
$1,000 investment.
In accordance with the Partnership Agreement, sale or refinancing proceeds
are to be distributed first, 100% to the Limited Partners until the Limited
Partners have received their original capital contributions and a cumulative
annual return of 7% based upon a Limited Partner's Adjusted Capital
Contributions, as defined in the Partnership Agreement. Then a real estate
brokerage commission is payable to the Partnership's Adviser. In connection with
the sale of each property, the Adviser is entitled to receive a real estate
brokerage commission in an amount equal to 0.75% of the selling prices of all of
the properties in the portfolio. Pursuant to this provision, a total of
approximately $511,000 will be paid to the Adviser as a real estate brokerage
commission. Any remaining sale or refinancing proceeds are to be distributed 85%
to the Limited Partners and 15% to the General Partner. Including the Final
Liquidating Distribution discussed further above, Limited Partners who acquired
their Units during the original offering period will have received a full return
of their original capital contributions, their cumulative preferred return of
7%, as defined in the Partnership Agreement, and their proportionate share of
approximately $2 million which represents an 85% share in the remaining sale or
refinancing proceeds after the payment of the brokerage commission to the
Adviser. The General Partner of the Partnership is expected to receive a total
of approximately $350,000 as their 15% residual share noted above.
As discussed further in the Partnership's Quarterly Report on Form 10-Q
for the quarter ended June 30, 2000, during the quarter ended June 30, 1999 the
Partnership was notified by the Northeast Plaza Shopping Center master-lessee of
the presence of groundwater contamination at the Shopping Center which appeared
to have been caused by the operation of dry cleaning equipment at the Center. On
December 13, 1999, the Partnership submitted a Site Assessment Report to the
state regulatory authority that confirmed the presence of the contamination,
described the location of elevated contaminant concentrations, and outlined an
initial analysis of remedial alternatives based on preliminary reports obtained
from the master-lessee and work performed by the Partnership's own environmental
consultants. On April 6, 2000, the Partnership submitted a Supplemental Site
Assessment Report further defining the nature and extent of the contamination.
In early May 2000, the Partnership's environmental consultant prepared a
Remedial Action Plan and submitted the Plan to the state regulatory authority
for review and approval. During the fourth quarter of fiscal 2000, the Plan was
effectively approved by the state regulatory authority subject to the execution
of a voluntary cleanup agreement with the state. The Partnership's environmental
consultant had proposed to implement the Plan at a cost of approximately $1.2
million.
<PAGE>
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES THREE LIMITED PARTNERSHIP
However, while awaiting the approval of the Plan, the Partnership had also
initiated efforts to market and sell the Northeast Plaza property on terms that
would allocate to the purchaser responsibility for pre-existing environmental
conditions. In July 2000, the Partnership distributed four sales packages to
prospective purchasers who were targeted as potential buyers of property with
pre-existing environmental conditions. As a result of that effort, three offers
were received. After evaluating the offers and the strength of the prospective
purchasers, the Partnership selected an offer. A purchase and sale agreement was
subsequently negotiated and signed on August 31, 2000 with this prospective
third-party buyer. After completing its due diligence work in September 2000,
the prospective buyer made two non-refundable deposits totalling $200,000. The
transaction closed as described above on October 12, 2000. In accordance with
the purchase and sale agreement, all liabilities associated with the
pre-existing environmental conditions at the property were transferred to the
buyer at the time of the sale, and the buyer agreed to indemnify the Partnership
against claims arising from known environmental problems. In addition, for the
purpose of addressing risks relating to cleanup cost overruns and any unknown
environmental conditions, the buyer purchased environmental insurance under
which the Partnership is included as an additional insured. As a result, the
Partnership is free to proceed with its planned liquidation which it expects to
complete by November 30, 2000.
ITEM 7 - Financial Statements and Exhibits
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(a) Financial Statements: None
(b) Exhibits:
(1) Closing Statement by and between PaineWebber Income Properties Three
Limited Partnership and Northeast Plaza Venture I, LLC, dated
October 12, 2000
(2) Purchase and Sale Agreement by and between PaineWebber Income
Properties Three Limited Partnership and Landbank Environmental
Properties, LLC dated August 31, 2000
(3) Amendment to Purchase and Sale Agreement dated September 14, 2000
(4) Amendment to Purchase and Sale Agreement dated September 26, 2000
(5) Third Amendment to Purchase and Sale Agreement dated October 2, 2000
(6) Fourth Amendment to Purchase and Sale Agreement dated October 9, 2000
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES THREE LIMITED PARTNERSHIP
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PAINE WEBBER INCOME PROPERTIES THREE LIMITED PARTNERSHIP
(Registrant)
By: THIRD INCOME PROPERTIES, INC.
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(General Partner)
By: /s/ Walter V. Arnold
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Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Date: October 27, 2000
<PAGE>
CLOSING STATEMENT
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PROPERTY: Northeast Plaza Shopping Center
Sarasota, FL
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DESCRIPTION DEBIT CREDIT
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TOTAL CONSIDERATION:
Total Consideration 3,712,500.00
DEPOSITS:
Deposit held and disbursed by Greenberg
Traurig, P.A. 200,000.00
Portion of Purchase Price paid directly to
Seller by Buyer on October 10, 2000 441,765.58
NEW AND EXISTING ENCUMBRANCES:
Principal Balance - Existing 1st Mortgage
Loan from Bank of America 758,234.32
PRORATIONS AND ADJUSTMENTS:
Proration of October Rents 39,303.58
Security Deposits 14,410.21
Proration of estimated 2000 taxes 41,407.91
Leasing Commissions and lost rent relating
to Boombox space 30,740.32
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125,862.02
TITLE FEES AND OTHER CHARGES
State Stamps on Warranty Deed 25,987.50
Record Satisfaction of Mortgage and
Release of Other Documents 10.50
Record Partnership Affidavit 19.50
Record Termination of Short Form Lease 15.00
Attorney's Fees and Costs POC
1/2 of Title Insurance Premium 5,928.75
1/2 of Title Examination Fee 50.00
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32,011.25
Sub Total - Cash due from Buyer at Closing 2,154,626.83
Add: Deposit held and disbursed by Greenberg
Traurig, P.A. 200,000.00
Portion of Purchase Price paid directly to
Seller by Buyer on October 10, 2000 441,765.58
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Total Cash due to Seller 2,796,392.41
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<PAGE>
THIS CLOSING STATEMENT HAS BEEN EXAMINED AND APPROVED, and Greenberg
Traurig, P.A. is authorized to disburse in accordance herewith this 12th day of
October 2000.
SELLER:
PAINEWEBBER INCOME PROPERTIES
THREE LIMITED PARTNERSHIP, a
Delaware limited partnership
By: Third Income Properties, Inc., a
Delaware corporation, its Managing
General Partner
By: /s/ Margaret A. Fitts
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Name: Margaret A. Fitts
Title: Vice President
BUYER:
NORTHEAST PLAZA VENTURE I, LLC, a
Delaware limited liability company
By: Landbank Environmental Properties,
LLC, a Delaware limited liability
company, Managing Member
By: /s/ Roscoe Van Zandt
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Name: Roscoe Van Zandt
Title: Vice President
<PAGE>
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
PAINEWEBBER INCOME PROPERTIES THREE LIMITED PARTNERSHIP
AND
LANDBANK ENVIRONMENTAL PROPERTIES, LLC
FOR
NORTHEAST PLAZA, SARASOTA, FLORIDA
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS......................................................1
ARTICLE 2 PURCHASE AND SALE................................................1
ARTICLE 3 PURCHASE PRICE; DEPOSIT; ADJUSTMENTS.............................2
ARTICLE 4..................................................................4
PRECLOSING OPERATION.................................................4
ARTICLE 5..................................................................5
ACCESS, INSPECTION, DILIGENCE........................................5
ARTICLE 6..................................................................11
TITLE AND SURVEY.....................................................11
ARTICLE 7..................................................................14
CONDITIONS PRECEDENT AND CLOSING.....................................14
ARTICLE 8..................................................................16
CASUALTY AND CONDEMNATION............................................16
ARTICLE 9 BROKERAGE COMMISSIONS............................................17
ARTICLE 10 DEFAULT, TERMINATION AND REMEDIES...............................18
ARTICLE 11 MISCELLANEOUS...................................................18
ARTICLE 12 IRS FORM 1099-S DESIGNATION.....................................21
ARTICLE 13 ESCROW..........................................................21
ARTICLE 14 STATE REQUIREMENTS..............................................22
SCHEDULE A Legal Description of the Real Property
SCHEDULE B Description of Personal Property and Intangible Property
SCHEDULE C Form of Escrow Instructions
SCHEDULE D Form of Special Warranty Deed
SCHEDULE E Form of Bill of Sale
SCHEDULE F Form of Certificate of Non-Foreign Status
SCHEDULE G 1099 Designation Agreement
<PAGE>
Purchase and Sale Agreement
---------------------------
This Purchase and Sale Agreement (this "Agreement") is entered into as of
the 31st day of August, 2000 by and between Seller and Buyer, upon the following
terms and conditions:
ARTICLE 1
DEFINITIONS
References in this Agreement to the following terms shall have the
following meanings:
Buyer: LandBank Environmental Properties, LLC, a Delaware
limited liability company.
Seller: PaineWebber Income Properties Three Limited Partnership,
a Delaware limited partnership.
Property: The Real Property and Personal Property constituting
Northeast Plaza, Sarasota, Florida.
Real Property: The land described in Schedule A attached
hereto and all of Seller's interest in and to the
buildings, structures, improvements, fixtures, machinery
and equipment (collectively, the "Improvements") now
located thereon and the rights appurtenant thereto.
Personal Property: The personal and intangible property, if any, described
in Schedule B attached hereto.
Purchase Price: As Defined in Section 3.1.
Escrow Agent: Greenberg Traurig.
Diligence Date: September 26, 2000.
Closing Date: October 6, 2000.
ARTICLE 2
PURCHASE AND SALE
2.1 In consideration of the undertakings and mutual covenants of the
parties set forth in this Agreement, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, Seller hereby agrees to sell and convey the Property to Buyer and
Buyer hereby agrees to buy and pay the Purchase Price for the Property on the
terms and conditions contained herein.
ARTICLE 3
PURCHASE PRICE; DEPOSIT; ADJUSTMENTS
3.1 Purchase Price. The Purchase Price shall be the sum of (i) Three
Million Seven Hundred Twelve Thousand Five Hundred Dollars ($3,712,500) which
shall be paid to Seller on the Closing Date (as hereinafter defined) by wire
transfer of immediately available federal funds, subject to adjustment to
reflect application of the Escrowed Amount and such other adjustments herein
contained and (ii) all closing costs allocated to Buyer as set forth in Section
3.8 below which shall be satisfied at Closing.
3.2 Deposit. Buyer shall, contemporaneously with execution of this
Agreement, deposit with the Escrow Agent the sum of One Hundred Thousand Dollars
($100,000) (with all interest thereon and additions thereto, the "Escrowed
Amount") to secure Buyer's obligations under this Agreement. Unless this
Agreement has been terminated in accordance with the terms hereof, on September
14, 2000, Buyer shall deposit with the Escrow Agent an additional $100,000 to be
added to the Escrowed Amount. After September 14, 2000, $50,000 of the Escrowed
Amount shall become non-refundable to Buyer and be delivered by Escrow Agent to
Seller, provided Seller has delivered executed copies of the termination of the
Master Lease of the Property between Northeast Plaza Associates, Ltd. and Seller
along with the assignment of contracts and leases affecting the Property and the
property management agreement with JLJ Realty, Inc effective as of the date of
such master lease termination and terminating by its terms on the Closing.
3.3 Tax Proration. All due and payable real estate taxes, all general and
special assessments on the Land and ad valorem taxes, if any, on the Personal
Property (based on the most recent ascertainable taxes) attributable to the
Property through the Closing Date shall be prorated and adjusted as of the
Closing Date. In no event shall Seller be charged with or be responsible for any
increase in the taxes on the Property resulting from the sale of the Property or
from any improvements made or leases entered into on or after the Closing Date.
If the tax statements for the fiscal year during which the Closing Date occurs
are not finally determined, then the tax figures for the immediately prior
fiscal year shall be used for the purposes of prorating taxes on the Closing
Date, provided that there shall be no further adjustment to be made after the
Closing Date. Any tax refunds or proceeds (including interest thereon) on
account of a favorable determination resulting from a challenge, protest, appeal
or similar proceeding relating to taxes and assessments relating to the Property
(i) for all tax periods occurring prior to the applicable tax period in which
the Closing occurs shall be retained by and paid exclusively to Seller and (ii)
for the applicable tax period in which the Closing occurs shall be prorated as
of the Closing Date after reimbursement to Seller and Buyer, as applicable, for
all out of pocket fees, costs and expenses (including reasonable attorneys' and
consultants' fees) actually incurred by Seller or Buyer, as applicable, in
connection with such proceedings such that Seller shall retain and be paid that
portion of such tax refunds or proceeds as is applicable to the portion of the
applicable tax period prior to the Closing Date and Buyer shall retain and be
paid that portion of such tax refunds or proceeds as is applicable to the
portion of the applicable tax period from and after the Closing Date. Neither
Seller nor Buyer shall settle any tax protests or proceedings in which taxes for
the tax period for which the other party is responsible are being adjudicated
without the consent of such party, which consent shall not be unreasonably
withheld, conditioned or delayed. After the Closing, Buyer shall be responsible
for and control any tax protests or proceedings for any period for which taxes
are adjusted between the parties under this Agreement and for any later period.
Buyer and Seller shall cooperate in pursuit of any such proceedings and in
responding to reasonable requests of the other for information concerning the
status of and otherwise relating to such proceedings; provided, however, that
neither party shall be obligated to incur any out-of-pocket fees, costs or
expenses in responding to the requests of the other.
3.4 Contract Proration. To the extent Property Contracts are not
terminated pursuant to Section 4.3, prepaid or past due amounts under any
Property Contracts which are assigned to Buyer at Closing shall be prorated and
adjusted as of the Closing Date.
3.5 Utility Proration. To the extent reasonably feasible, the Seller shall
cause all meters for electricity, gas, water, sewer or other public utility
usage at the Property to be read as of the day immediately preceding the Closing
Date, and the Seller shall pay all charges for such utilities which have accrued
on or prior to the Closing Date; provided, however, that if and to the extent
such charges are paid directly by tenants, no such reading or payment shall be
required. If the utility companies are unable or refuse to read meters for which
payment by the Seller is required, all charges for such utilities to the extent
unpaid shall be prorated and adjusted as of the Closing Date based on the most
recent bills therefor and no further adjustment shall be made. The Seller shall
provide notice to the Buyer within five (5) days of the Closing Date setting
forth (i) whether utility meters will be read as of the Closing Date and (ii) a
copy of the most recent bill for any utility charges which are to be prorated
and adjusted as of the Closing Date.
3.6 Income and Expense Proration. Collected rents for the then current
period; security deposits which have not been previously applied by Seller in
accordance with the terms of any Leases; prepaid rentals; collected or prepaid
common area maintenance charges; collected or prepaid promotional charges;
collected or prepaid service charges; collected or prepaid tax charges, and all
other collected or prepaid incidental expenses and charges paid by tenants shall
be apportioned and full value shall be adjusted as of the Closing Date, and the
net amount thereof, if in favor of Seller, shall be added to the Purchase Price,
or if in favor of Buyer, shall be deducted from the Purchase Price. All
uncollected tenant charges and contributions payable in arrears (including, but
not limited to, percentage rents, common area maintenance charges, insurance and
tax contributions) for the lease year in which the Closing occurs shall be
apportioned between Seller and Buyer as of the Closing. The Purchase Price shall
be increased by the amount of uncollected or past due rent; provided, however,
that no adjustment shall be made for rent, tenant charges or tenant
contributions which are more than two (2) months past due. Common area
maintenance charges and insurance contributions payable in arrears and
uncollected shall be computed based on the budget for the current year and the
pro rata share of such amounts for each tenant. Tax contributions payable in
arrears and uncollected shall be computed as provided in Section 3.3 and based
upon the pro rata share of such amount for each tenant. For purposes of
prorating percentage rent, the percentage rent payable for the lease year in
which the Closing occurs by any tenant which is open for business and obligated
to pay percentage rent shall be determined by using the average annual
percentage rent paid or payable by such tenant during the prior three (3) lease
years. From and after Closing all security deposits credited to Buyer shall
thereafter be deemed transferred to Buyer and Buyer shall assume and be solely
responsible for the payments of security deposits (to the extent Buyer was
credited for such security deposits at Closing) to tenants in accordance with
the Leases (as hereinafter defined) and applicable law. Seller shall be entitled
to retain and/or receive a credit for any utility deposits and any deposits for
third parties under any of the Contracts (as hereinafter defined).
3.7 Prorations Generally. A statement of prorations and other adjustments
shall be prepared by Seller in conformity with the provisions of this Article 3
and submitted to Buyer for review and approval not less than two (2) business
days prior to the Closing Date. For purposes of making prorations, Seller shall
be deemed to be in title to the Property and entitled to the income from and
responsible for the expenses thereof, on the Closing Date.
3.8 Closing Costs.
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3.8.1 Seller shall pay: (i) its legal fees and expenses related to
the negotiation and preparation of this Agreement and all documents
required to close the transaction contemplated hereby, and (ii) 50% of the
escrow fees of the Escrow Agent; (iii) all state, county or other taxes
associated with the transfer of the Property, and (iv) 50% of all costs
associated with title examination and preparation of a title commitment as
well as all charges and premiums for an owner's title policy.
3.8.2 Buyer shall pay: (i) 50% of the escrow fees of the Escrow
Agent, (ii) charges to record the deed, and evidence of Buyer's existence
or authority, (iii) Buyer's legal fees and expenses related to the
negotiation of this Agreement and all documents required to close the
transaction contemplated hereby, (iv) all costs related to the Buyer's
inspection and due diligence, including, without limitation, the cost of
appraisals, architectural, engineering, credit and environmental reports,
(v) 50% of all costs associated with title examination and preparation of
a title commitment as well as all charges and premiums for an owner's
title policy, and (vi) all costs allocable to preparation of the survey.
3.8.3 All other closing costs shall be paid by Seller or Buyer in
accordance with the custom in the jurisdiction where the Property is
located.
ARTICLE 4
PRECLOSING OPERATION
4.1 Leases. A rent roll (the "Rent Roll") containing a list of all
occupants of the Property pursuant to the leases (the "Leases") as of the date
hereof is attached hereto as Exhibit E. Prior to September 14, 2000, Seller may
enter into Leases with new tenants or modifications of Leases with existing
tenants substantially in accordance with Seller's existing leasing practices,
provided that in all events any new or modified Leases shall (i) be at or near
market rent, and (ii) on the Seller's current standard form of lease. Seller
shall deliver copies of any such new leases to Buyer. After September 14, 2000,
Seller shall not enter into any new leases for space in excess of 10,000 square
feet without the Buyer's consent.
4.2 Conduct of Business. At all times prior to Closing, Seller shall
continue (a) to conduct business with respect to the Property in the same manner
in which said business has been heretofore conducted, (b) to insure the Property
substantially as currently insured, and (c) maintain the Property in its current
condition, reasonable wear and tear and damage by casualty excepted.
4.3 Property Contracts. Seller shall make copies of all service, supply,
management, operating and leasing contracts affecting the Property (the
"Property Contracts") available for Buyer to review promptly after the date
hereof. On or before the Diligence Date, unless Buyer has provided written
notice to Seller of Buyer's election to terminate this Agreement, Buyer shall
provide written notice to Seller of the Property Contracts that Buyer desires to
have terminated by Seller, and Seller will terminate the Property Contracts so
identified at or before Closing, provided that such Property Contracts may be
terminated without cost or liability to Seller and if there is cost or liability
to Seller, Buyer shall be responsible for only 30 days of payments under any
such contract. At Closing, Seller shall assign and Buyer shall assume the
Property Contracts, except those Property Contracts which Buyer has requested
termination. Notwithstanding the foregoing, Seller's existing management
contract and exclusive brokerage contract for the Property shall be terminated
by Seller effective as of the Closing Date. Seller shall not, during the
pendency of this Agreement, enter into any Property Contracts or modifications,
renewals or terminations of any existing Property Contracts, in each case that
would be binding upon Buyer or the Property after Closing, without the written
consent of Buyer, which consent Buyer agrees shall not be unreasonably withheld.
If Buyer disapproves any such request, then Buyer's notice shall specify the
reasons for such disapproval.
ARTICLE 5
ACCESS, INSPECTION, DILIGENCE
5.1 Access/Purchaser's Responsibilities/Purchaser's Indemnity.
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5.1.1 From the date hereof through the Diligence Date, Seller agrees
that Buyer and its authorized agents or representatives shall be entitled
to enter upon the Real Property during normal business hours upon advance
written notice to Seller and make such reasonable, nondestructive
investigations, studies and tests including, without limitation, surveys
and engineering studies as Buyer deems necessary or advisable, provided,
however, that Buyer shall not be permitted to conduct physical testing
without Seller's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Any environmental testing
shall be subject to Seller's consent which may be withheld in its sole
discretion. Seller's prior written consent for physical inspections or
testing may be conditioned upon receipt of a detailed description of the
proposed physical inspection or testing, a list of contractors who will be
performing the physical inspection or testing, evidence of insurance
satisfactory to Seller, and such other information as Seller reasonably
requires in connection with such proposed inspection or testing. Seller
agrees to deliver copies of all books, records, plans, studies, permits,
existing surveys, and other documents in Seller's file relating to the
operation of the Property (the "Diligence Documents").
5.1.2 Buyer agrees that in conducting any inspections,
investigations or tests of the Property and/or the Diligence Documents,
Buyer and its agents and representatives shall (i) not unreasonably
interfere with the operation and maintenance of the Property, (ii) not
unreasonably disturb the tenants under the Leases or unreasonably
interfere with their use of the Property pursuant to their respective
Leases, (iii) not damage any part of the Property or any personal property
owned or held by any tenant or third party, (iv) not injure or otherwise
cause bodily harm to Seller, the property manager, or their respective
guests, agents, invitees, contractors and employees or any tenant or their
guests or invitees, (v) maintain comprehensive general liability insurance
in terms and amounts reasonably acceptable to Seller covering any accident
arising in connection with the presence of Buyer, its agents and
representatives on the Property, and deliver a certificate of insurance
verifying such coverage to Seller prior to entry upon the Property; (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 Buyer's rights
hereunder, (viii) fully restore the Property to the condition in which the
same was found before any such inspection or tests were undertaken; and
(ix) not reveal or disclose any information obtained during the due
diligence period concerning the Property and the Diligence Documents to
anyone outside Buyer's organization, except in accordance with the
confidentiality standards set forth in Section 5.5 herein.
5.1.3 Buyer will indemnify, defend, and hold Seller and its property
manager harmless from all losses, costs, liens, claims, causes of action,
liability, damages and out-of pocket expenses, including, without
limitation, reasonable attorneys' fees incurred by Seller as a result of
the entry upon or inspections, tests or investigations of the Property
conducted by or on behalf of Buyer. This indemnity obligation of Buyer
shall survive the termination of this Agreement for any reason.
5.1.4 Buyer acknowledges and agrees that the Diligence Documents are
provided to Buyer for informational purposes only and do not constitute
representations or warranties of Seller or its agents, employees or
representatives of any kind as to the truth, accuracy or completeness of
the Diligence Documents or the source(s) thereof. Seller has not
undertaken any independent investigation as to the truth, accuracy or
completeness of the Diligence Documents, and is providing the Diligence
Documents solely as an accommodation to Buyer.
5.2 Diligence. Subject to Section 5.1, above, Buyer shall promptly
commence and actively pursue the following due diligence items:
5.2.1 Review title and survey matters;
5.2.2 Review Property Contracts;
5.2.3 Obtain and review engineering reports;
5.2.4 Obtain and review environmental reports on oil, hazardous waste, and
asbestos;
5.2.5 Review applicable zoning and other land use controls, and other
permits, licenses, permissions, approvals and consents; and
5.2.6 Review all Leases affecting the Property.
Buyer shall complete its due diligence on or before the Diligence Date.
Notwithstanding any other term or provision herein to the contrary, in the event
that Buyer's due diligence shall reveal any matters which are not acceptable to
Buyer, in Buyer's sole discretion, Buyer may elect, by written notice to Seller,
received by Seller on or before the Diligence Date, not to proceed with this
purchase, in which event this Agreement shall terminate, the Escrow Agent shall
return the Escrowed Amount to the Buyer and this Agreement shall be null and
void without recourse to either party hereto (except to the extent such recourse
arises in connection with a provision of this Agreement which is expressly
intended to survive termination). BUYER ACKNOWLEDGES THAT, PURSUANT TO THE TERMS
OF THIS AGREEMENT, BUYER SHALL BE AFFORDED A FULL OPPORTUNITY TO INSPECT THE
PROPERTY, OBSERVE ITS PHYSICAL CHARACTERISTICS AND EXISTING CONDITIONS AND
CONDUCT SUCH INVESTIGATIONS AND STUDIES ON AND OF SAID PROPERTY AS IT DEEMS
NECESSARY (EXCEPT AS EXPRESSLY SET FORTH IN SECTION 5.6 HEREIN) AND THAT, UNLESS
BUYER TERMINATES THIS AGREEMENT PURSUANT TO THIS SECTION 5.2 BUYER SHALL BE
DEEMED TO HAVE WAIVED ON THE DILIGENCE DATE ANY AND ALL OBJECTIONS TO OR
COMPLAINTS REGARDING (INCLUDING, BUT NOT LIMITED TO, FEDERAL, STATE OR COMMON
LAW BASED ACTIONS AND 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
AND 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 SUBSTANCES ON, UNDER,
ADJACENT TO OR OTHERWISE AFFECTING THE PROPERTY. BUYER 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 SUBSTANCES OR OTHER CONTAMINANTS, MAY NOT HAVE BEEN
REVEALED BY ITS INVESTIGATION.
5.3 Return of Documents.
-------------------
5.3.1 If this Agreement is terminated for any reason whatsoever,
Buyer shall promptly deliver to Seller all Diligence Documents delivered
to Buyer or Buyer's agents, representatives or designees by Seller or
Seller's agents, representatives or employees pursuant to this Agreement
or obtained by Buyer.
5.3.2 The return of the Escrowed Amount to Buyer under this
Agreement shall be contingent upon Buyer's fulfillment of its obligations
under Section 5.4.
5.4 Confidentiality. Buyer acknowledges and agrees that any and all of the
Diligence Documents are proprietary and confidential in nature and will be
delivered to Buyer solely to assist Buyer in determining the feasibility of
purchasing the Property. Further, each party hereto agrees to maintain in
confidence, and not to discuss with or to disclose to any person or entity who
is not a party to this Agreement, any material term of this Agreement or any
aspect of the transactions contemplated hereby, except as provided in this
Section. Seller may publicly disclose the existence of this Agreement provided
that the identity of Buyer is not disclosed. Buyer shall not disclose to anyone
other than its partners and financiers the Diligence Documents and/or any
information disclosed by Seller to Buyer which is not generally known by the
public regarding Seller's operations and/or the Property. Each party hereto may
discuss with and disclose to its accountants, attorneys, existing or prospective
lenders, investment bankers, underwriters, rating agencies, partners,
consultants and other advisors to the extent such parties reasonably need to
know such information and are bound by a confidentiality obligation identical in
all material respects to the one created by this Section. Additionally, each
party may discuss and disclose such matters to the extent necessary to comply
with any requirements of the Securities and Exchange Commission or in order to
comply with any law or interpretation thereof or court order. This provision
shall survive termination of this Agreement but shall terminate upon the
Closing. Any press release to be made regarding any matter which is the subject
of the confidentiality obligation created in this Section shall be subject to
the reasonable approval of Buyer and the Seller, respectively both as to timing
and content.
5.5 Buyer's Acknowledgment. BUYER ACKNOWLEDGES THAT THE PROPERTY HAS BEEN
IMPACTED BY HAZARDOUS MATERIALS AND THAT THEY ARE SOPHISTICATED IN ACQUIRING
CONTAMINATED PROPERTIES. BUYER ACKNOWLEDGES THAT AS OF THE DILIGENCE DATE IT HAS
HAD AN OPPORTUNITY TO CONDUCT DILIGENCE ON THE PROPERTY AND IS ACQUIRING THE
PROPERTY IN ITS CURRENT CONDITION BASED ON ITS DILIGENCE, EXCEPT WITH RESPECT TO
THE EXCLUDED LIABILITIES (AS DEFINED IN SECTION 5.6(B)). BUYER FURTHER
ACKNOWLEDGES THAT NEITHER SELLER NOR ITS EMPLOYEES, AGENTS OR REPRESENTATIVES
HAVE MADE ANY REPRESENTATION OR WARRANTY AS TO THE CONDITION OF THE PROPERTY OR
THE PRESENCE OR ABSENCE OF ANY HAZARDOUS MATERIALS ON, IN, UNDER OR WITHIN THE
PROPERTY OR A PORTION THEREOF WHICH SURVIVE CLOSING HEREUNDER. THE BUYER
ACKNOWLEDGES AND AGREES THAT THE PROPERTY IS TO BE CONVEYED BY THE SELLER TO THE
BUYER "AS IS," "WITH ALL FAULTS," AND SUBSTANTIALLY IN ITS CURRENT CONDITION.
THE BUYER FURTHER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY CONTAINED
HEREIN, NEITHER THE SELLER NOR ANY AGENT, EMPLOYEE OR OTHER REPRESENTATIVE OF
THE SELLER (OR PURPORTED AGENT, EMPLOYEE OR OTHER REPRESENTATIVE OF THE SELLER)
HAS MADE ANY GUARANTEE, REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED (AND THE
SELLER SHALL NOT HAVE ANY LIABILITY WHATSOEVER) AS TO THE VALUE, USES,
HABITABILITY, CONDITION, DESIGN, OPERATION, FINANCIAL CONDITION OR PROSPECTS, OR
FITNESS FOR PURPOSE OR USE OF THE PROPERTY (OR ANY PART THEREOF) OR ANY OTHER
GUARANTEE, REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO THE PROPERTY (OR ANY PART THEREOF) OR INFORMATION SUPPLIED TO BUYER
WITH RESPECT THERETO. FURTHER, EXCEPT WITH RESPECT TO THE EXCLUDED LIABILITIES
(AS DEFINED IN SECTION 5.6(B)) THE SELLER SHALL HAVE NO LIABILITY FOR ANY
LATENT, HIDDEN, OR PATENT DEFECT AS TO THE PROPERTY OR THE FAILURE OF THE
PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY APPLICABLE LAWS AND
REGULATIONS. IN PARTICULAR, THE BUYER ACKNOWLEDGES AND AGREES THAT ANY
INFORMATION PROVIDED TO BUYER BY SELLER WITH RESPECT TO THE PROPERTY UNDER THIS
AGREEMENT (AND ANY OTHER INFORMATION THE BUYER MAY HAVE OBTAINED REGARDING IN
ANY WAY ANY OF THE PROPERTY, INCLUDING WITHOUT LIMITATION, ITS OPERATIONS OR ITS
FINANCIAL HISTORY OR PROSPECTS FROM THE SELLER OR ITS AGENTS, EMPLOYEES OR OTHER
REPRESENTATIVES) IS DELIVERED TO THE BUYER AS A COURTESY, WITHOUT REPRESENTATION
OR WARRANTY AS TO ITS ACCURACY OR COMPLETENESS, AND NOT AS AN INDUCEMENT TO
ACQUIRE THE PROPERTY; THAT NOTHING CONTAINED IN SUCH DELIVERIES SHALL CONSTITUTE
OR BE DEEMED TO BE A GUARANTEE, REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
IN ANY REGARD AS TO ANY OF THE PROPERTY (EXCEPT AS EXPRESSLY PROVIDED HEREIN);
AND THAT THE BUYER IS RELYING ONLY UPON THE PROVISIONS OF THIS AGREEMENT AND ITS
OWN INDEPENDENT ASSESSMENT OF THE PROPERTY AND ITS PROSPECTS IN DETERMINING
WHETHER TO ACQUIRE THE PROPERTY. THE PROVISIONS OF THIS PARAGRAPH SHALL SURVIVE
CLOSING.
--------------
Buyer's Initials
5.6 Buyer's Release and Indemnity of Seller.
---------------------------------------
(a) EXCEPT FOR THE EXCLUDED LIABILITIES (AS DEFINED IN SECTION
5.6(B), UPON BUYER'S ACQUISITION OF THE PROPERTY, SELLER IS HEREBY RELEASED FROM
ALL RESPONSIBILITY AND LIABILITY REGARDING THE CONDITION (INCLUDING THE PRESENCE
IN THE SOIL, AIR, STRUCTURES AND SURFACE AND SUBSURFACE WATERS, OF MATERIALS OR
SUBSTANCES THAT HAVE BEEN OR MAY BE IN THE FUTURE 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. BUYER ACKNOWLEDGES THAT ANY INFORMATION OF ANY TYPE WHICH BUYER HAS
RECEIVED OR MAY RECEIVE FROM SELLER, ITS PROPERTY MANAGER OR THEIR RESPECTIVE
AGENTS, INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL REPORTS AND SURVEYS, IS
FURNISHED ON THE EXPRESS CONDITION THAT BUYER SHALL MAKE AN INDEPENDENT
VERIFICATION OF THE ACCURACY OF SUCH INFORMATION, ALL SUCH INFORMATION BEING
FURNISHED WITHOUT ANY WARRANTY WHATSOEVER.
(b) UPON THE BUYER'S ACQUISITION OF THE PROPERTY, BUYER SHALL
INDEMNIFY SELLER AGAINST ANY CLAIMS, LOSSES OR DAMAGES SUFFERED BY BUYER AS A
RESULT OF THE PRESENCE IN THE SOIL, AIR, STRUCTURES, SURFACE OR SUBSURFACE
WATERS, OF SUBSTANCES THAT MAY HAVE BEEN OR MAY IN THE FUTURE BE DETERMINED TO
BE TOXIC, HAZARDOUS, OR SUBJECT TO REGULATION, EXCEPT THAT BUYER SHALL NOT BE
REQUIRED TO INDEMNIFY SELLER AGAINST THE FOLLOWING: (i) A RELEASE, EMISSION,
SPILL OR MIGRATION OF HAZARDOUS SUBSTANCES WHICH WERE NOT PRESENT ON, UNDER OR
ABOUT THE PROPERTY AS OF THE CLOSING AND DID NOT MIGRATE OR ARISE FROM A SOURCE
OTHER THAN THE PROPERTY PRIOR TO THE CLOSING; (ii) ANY SUCH LIABILITIES AND
OBLIGATIONS ARISING FROM OR RELATED TO ENVIRONMENTAL CONDITIONS AT THE PROPERTY
WHICH WERE CONCEALED FROM BUYER BY SELLER OF WHICH BUYER HAD NO PRIOR KNOWLEDGE;
(iii) ANY LIABILITIES AND OBLIGATIONS FOR CLEAN-UP OF HAZARDOUS SUBSTANCES FROM
THE PROPERTY DISPOSED OF OFF-SITE BY SELLER INCLUDING, WITHOUT LIMITATION,
LANDFILLS OR OTHER RECYCLING OR DISPOSAL FACILITIES, PRIOR TO CLOSING; (iv)
ADDITIONAL REMEDIATION OR CLEAN-UP OBLIGATIONS AND LIABILITIES RESULTING FROM
SELLER'S BREACH OF ITS OBLIGATIONS NOT TO CONTACT REGULATORY AGENCIES (ITEMS
I-IV REFERRED TO COLLECTIVELY AS "EXCLUDED LIABILITIES"). BUYER SHALL OBTAIN
INSURANCE COVERAGE UNDER A REAL ESTATE POLLUTION POLICY AND A REMEDIATION STOP
LOSS POLICY THAT NAME SELLER AS AN ADDITIONAL INSURED. THE REMEDIATION POLICY
WILL BE IN AN AMOUNT EQUAL TO 100% OF BUYER'S ESTIMATED COST TO COMPLETE
REMEDIATION WORK AT THE PROPERTY. THE REAL ESTATE POLLUTION POLICY WILL HAVE A
10-YEAR TERM AND COVERAGE IN AN AMOUNT OF AT LEAST $5,000,000. THE INSURER UNDER
EACH POLICY MUST BE RATED "A VI" OR BETTER. BUYER WILL BE SOLELY RESPONSIBLE FOR
ANY DEDUCTIBLES UNDER THESE INSURANCE POLICIES. BUYER SHALL HAVE THE EXCLUSIVE
RIGHT AND SOLE OBLIGATION TO HANDLE AND PERFORM ANY AND ALL REGULATORY
COMMUNICATION, AND SITE INVESTIGATIONS, RESPONSE ACTIONS, REMEDIATION AND
CLEAN-UP WORK AFTER THE CLOSING. AFTER THE CLOSING, SELLER SHALL NOT HAVE THE
RIGHT TO CONTACT REGULATORY AGENCIES REGARDING ENVIRONMENTAL CONDITION AT THE
PROPERTY.
(c) THE PROVISIONS OF THIS SECTION 5.6 SHALL SURVIVE THE CLOSING.
(d) FOLLOWING THE EXECUTION OF THIS AGREEMENT AND PRIOR TO THE
CLOSING, SELLER SHALL CONTINUE TO OPERATE ANY SOIL AND/OR GROUNDWATER TREATMENT
SYSTEMS OPERATING AT THE PROPERTY. PRIOR TO THE CLOSING, SELLER SHALL REMOVE
FROM THE PROPERTY, TRANSPORT AND DISPOSE OF OR OTHER OTHERWISE LAWFULLY MANAGE
ALL HAZARDOUS MATERIALS STORED IN CONTAINERS ON THE PROPERTY. SELLER SHALL ALSO
CONTINUE TO PERFORM SUCH REMEDIATION AT THE PROPERTY AS MAY BE REQUIRED BY
APPLICABLE LAW OR GOVERNMENT AGENCIES.
(e) FOLLOWING THE EXECUTION OF THIS AGREEMENT AND PRIOR TO THE
CLOSING, BUYER SHALL HAVE THE RIGHT TO CONTACT GOVERNMENTAL AGENCIES, INCLUDING,
WITHOUT LIMITATION, THE FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION,
REGARDING BUYER'S CLEAN-UP ACTIVITIES AND DEVELOPMENT PLANS. BUYER SHALL PROVIDE
SELLER WITH FORTY EIGHT (48) HOURS' WRITTEN NOTICE PRIOR TO MEETING WITH SUCH
AGENCIES, AND SELLER SHALL HAVE THE RIGHT TO BE PRESENT AT ALL MEETINGS WITH
SUCH AGENCIES.
(f) FROM AND AFTER THE EXECUTION OF THIS AGREEMENT AND SO LONG AS
THIS AGREEMENT REMAINS IN EFFECT, SELLER AND ITS AFFILIATES, AND SUBSIDIARIES
AND EACH OF THEIR EMPLOYEES, AGENTS AND REPRESENTATIVES SHALL REFRAIN FROM
ENTERING INTO ANY AGREEMENT OR BIND THE PROPERTY TO ANY AGREEMENT WITH RESPECT
TO THE ENVIRONMENTAL CONDITION OF THE PROPERTY. NOTHING IN THE PRECEDING
SENTENCES SHALL PROHIBIT THE SELLER PARTIES FROM RESPONDING TO ANY LEGAL PROCESS
OR TO ANY INQUIRY FROM ANY AGENCY UPON RECEIPT THEREOF. THE SELLER PARTIES SHALL
DELIVER ANY AND ALL NOTICES AND CORRESPONDENCE RECEIVED FROM ANY GOVERNMENTAL
AGENCY TO BUYER WITHIN TWO (2) BUSINESS DAYS AFTER RECEIPT THEREOF.
ARTICLE 6
TITLE AND SURVEY
6.1 Title and Survey. Promptly following the execution of this Agreement,
Buyer shall obtain:
6.1.1 A current ALTA as-built survey of the Real Property or an update of
Seller's survey (the "Survey"); and
6.1.2 A commitment for an ALTA Owner's Policy of Title Insurance
from the Escrow Agent (the "Title Commitment"). Buyer shall cause a copy
of the completed Title Commitment to be forwarded to Seller.
If the Survey or matters listed as exceptions in the Title Commitment are
not satisfactory to Buyer, Buyer shall, five (5) business days before the
Diligence Date, provide Seller with written notice of such objections (the
"Title Objections"). Seller, at its sole cost and expense shall have the right,
but not the obligation, to cure or remove any Title Objections and shall give
Buyer written notice on or prior to the Diligence Date, identifying those Title
Objections, if any, that Seller agrees to use reasonable efforts to cure;
provided, however, that Seller shall not be obligated to incur any costs or
expenses in excess of $1,000 in connection with any such cure undertaken by
Seller. If there are Title Objections which Seller is unable to cure by its use
of reasonable efforts or unwilling to cure by the Diligence Date, Buyer may
terminate this Agreement as provided in Section 5.3, above or waive such
objections which Seller is not willing or able to cure and proceed to closing.
Those exceptions or title deficiencies which (i) Buyer does not object to
pursuant to this Section 6.1 or (ii) are waived because Seller is unwilling or
unable to cure shall be the "Permitted Exceptions."
6.2 Deed. On the Closing Date, Seller shall convey by good and sufficient
special warranty deed to Buyer good and clear record and marketable fee simple
title to all of the Real Property free and clear of all liens, encumbrances,
conditions, easements, assessments, restrictions and other conditions, except
for the following:
6.2.1 All Leases;
6.2.2 All zoning, building and other laws applicable to the Property;
6.2.3 All matters which arise after the Diligence Date which are agreed
upon or consented to by Buyer;
6.2.4 The lien, if any, for real estate taxes for current year not
due and payable prior to the Closing Date (subject to proration in
accordance with Section 3.3 herein);
6.2.5 All matters shown on Schedule B of the Title Commitment or of
public record as of the effective date of the Title Commitment and which
Seller has not agreed to cure pursuant to Section 6.1, above;
6.2.6 The Permitted Exceptions;
6.2.7 Any matters shown on the Survey; and
6.2.8 All matters, whether or not of record, to the extent caused by
Buyer or its agents, representatives or contractors.
6.3 Lease Assignment. At the Closing, Seller shall assign the Leases to
Buyer and Buyer shall assume Seller's obligations thereunder and Seller shall
convey the Personal Property to Buyer by quitclaim bill of sale.
6.4 Seller's Representations and Warranties. Seller hereby represents and
warrants to Buyer as of the date of this Agreement as follows:
(a) Organization and Power. Seller is a general partnership validly
existing under the laws of the State of Delaware with all necessary legal
power to enter into and perform its obligations hereunder and under any
document or instrument required hereunder to be executed and delivered on
behalf of Seller.; and
(b) Authorization and Execution. As of the date of this Agreement:
(i) the execution and delivery of this Agreement and the consummation of
the transaction contemplated hereby have been duly authorized by all
necessary parties and no other proceedings on the part of Seller are
necessary in order to permit it to consummate the transaction contemplated
hereby, and (ii) this Agreement has been duly executed and delivered by
Seller and (assuming valid execution and delivery by Buyer) is a legal,
valid and binding obligation of Seller enforceable against it in
accordance with its terms.
6.4.1 Each representation or warranty contained in Section 6.4.1 is
subject to being updated by Seller in writing on or before the Diligence Date
and shall be deemed to have been amended and updated by any information
delivered to or made available to Buyer and any other information obtained by
Buyer in connection with its diligence (including but not limited to tenant
estoppel certificates). No representations or warranties made hereunder shall
survive Closing.
6.5 Buyer's Representations and Warranties Buyer hereby represents and
warrants to Seller as of the date of this Agreement as follows:
(a) Organization and Power. Buyer is a limited liability company
organized, existing and in good standing under the laws of the State of
Delaware and has the requisite power and authority to enter into and
perform the terms of this Agreement; and
(b) Authorization and Execution. The execution and delivery of this
Agreement and the consummation of the transaction contemplated hereby have
been duly authorized by all necessary parties and no other proceedings on
the part of Buyer are necessary in order to permit it to consummate the
transaction contemplated hereby. This Agreement has been duly executed and
delivered by Buyer and (assuming valid execution and delivery by Seller)
is a legal, valid and binding obligation of Buyer enforceable against it
in accordance with its terms.
ARTICLE 7
CONDITIONS PRECEDENT AND CLOSING
7.1 Buyer's Conditions Precedent. In addition to any other conditions
precedent in favor of Buyer as may be set forth elsewhere in this Agreement,
Buyer's obligations under this Agreement are expressly subject to the Seller
performing and complying in all material respects, including the representations
of Seller being true as of the Closing with all of the terms of this Agreement
to be performed and complied with by Seller prior to or at the Closing, or such
earlier date as is set forth below. This condition may be waived in whole or in
part only by written notice of such waiver from Buyer to Seller.
7.2 Seller's Conditions Precedent. In addition to any other conditions
precedent in favor of Seller as may be set forth elsewhere in this Agreement,
Seller's obligations under this Agreement are expressly subject to the timely
fulfillment of the conditions set forth in this Section 7.2 on or before the
Closing Date, or such earlier date as is set forth below. Each condition may be
waived in whole or part only by written notice of such waiver from Seller to
Buyer.
7.2.1 Buyer performing and complying in all material respects with
all of the terms of this Agreement to be performed and complied with by
Buyer prior to or at the Closing, including, without limitation, payment
by the Buyer of the Purchase Price (as adjusted as otherwise provided
herein); and
7.2.2 On the Closing Date, all of the representations of Buyer set
forth in this Agreement shall continue to be true, accurate and complete.
7.3 Closing Date. Subject to Seller's right to extend the Closing Date as
provided in Section 7.1, the consummation of the purchase and sale contemplated
in this Agreement (the "Closing") shall occur through an escrow closing
arrangement as described in Schedule F attached hereto on the Closing Date, at
the office of the Escrow Agent or through the escrow closing arrangements set
forth in the Form of Escrow Closing Instructions attached hereto as Schedule F.
It is agreed that time is of the essence in this Agreement.
7.4 Closing Deliveries. On the Closing Date, Seller shall deliver or cause
to be delivered:
7.4.1 A duly executed and acknowledged special warranty deed conveying the
Land and the Improvements to Buyer;
7.4.2 A duly executed quitclaim bill of sale and general assignment
conveying the Personal Property and the Intangible Property to Buyer;
7.4.3 A duly executed assignment and assumption of the Leases and Tenant
Deposits (the "Assignment of Leases");
7.4.4 A duly executed assignment and assumption of Property Contracts being
assumed (the "Assignment of Contracts");
7.4.5 A certificate or certificates of non-foreign status from Seller;
7.4.6 Customary affidavits sufficient for the Escrow Agent to delete any
exceptions for mechanic's or materialmen's liens and parties in possession from
Buyer's title policy and such other affidavits relating to such title policy as
the Escrow Agent may reasonably request;
7.4.7 An updated Rent Roll (including a list of all delinquent and prepaid
rents) certified by the Seller as true and correct as of the Closing Date;
7.4.8 Such other instruments as Buyer or the Escrow Agent may reasonably
request to effectuate the transactions contemplated by this Agreement;
7.4.9 A duly executed counterpart original of the closing statement setting
forth the Purchase Price, the closing adjustments and the application of the
Purchase Price as adjusted;
7.4.10 Evidence or documents as may reasonably be required by the Escrow
Agent evidencing the status and capacity of Seller to sell the Property and the
authority of the person or persons executing the various documents on behalf of
Seller in connection with the sale of the Property;
7.4.11 Originals, or where unavailable, copies of all Property Contracts,
Leases (with all amendments and modifications thereto), operating information,
permits, warranties and financial information about the Property in Seller's
possession or control relating to the Property;
7.4.12 All keys to all locks on the Property and similar items, to the
extent in Seller's possession; and
7.5 Buyer's Deliveries. On the Closing Date, Buyer shall deliver or cause
to be delivered at its expense each of the following to Seller:
7.5.1 The Purchase Price for the Property, as such Purchase Price
may have been adjusted pursuant to the provisions of this Agreement and
credited for any portion of the Escrowed Amount paid to Seller, in the
manner provided for in Article 3;
7.5.2 Evidence in form and substance reasonably satisfactory to
Escrow Agent and Seller of Buyer's authority to purchase the Property;
7.5.3 The Assignment of Leases;
7.5.4 The Assignment of Contracts;
7.5.5 Such other instruments as Seller or Escrow Agent may
reasonably request to effectuate the transactions contemplated by this
Agreement;
7.5.6 A duly executed counterpart original of the closing statement
setting forth the Purchase Price, the closing adjustments and the
application of such amounts;
7.5.7 Such evidence or documents as may reasonably be required by
the Escrow Agent evidencing the status and capacity of Buyer and the
authority of the person or persons who are executing the various documents
on behalf of Buyer in connection with the purchase of the Property;
7.5.8 Acknowledgment by Buyer of Buyer's receipt from Seller of the
Tenant Deposits;
7.5.9 Executed counterparts of any other documents listed in Section
7.4 required to be signed by Buyer; and
7.5.10 Copies of the environmental insurance policies pursuant to
Section 5.6(b) of this Agreement.
7.6 Possession. Possession of the Property shall be delivered to Buyer by
Seller at the Closing, subject only to those items listed in Section 6.2 of this
Agreement and rights arising under any Property Contracts not terminated by
Buyer pursuant to Section 4.3. Seller and Buyer covenant and agree to execute,
at Closing, a written notice of the acquisition of the Property by Buyer, for
duplication and transmittal to all tenants affected by the sale and purchase of
the Property (or otherwise in such manner as will comply with applicable law
respecting notification of tenants). Such notice shall be prepared by Buyer and
approved by Seller, shall notify the tenants of the sale and transfer and shall
contain appropriate instructions relating to the payment of future rentals, the
giving of future notices, and other matters reasonably required by Buyer or
required by law. Unless a different procedure is required by applicable law, in
which event such laws shall be controlling, Buyer agrees to transmit or
otherwise deliver such letters to the tenants promptly after the Closing.
ARTICLE 8
CASUALTY AND CONDEMNATION
8.1 Casualty. If the Property is materially damaged by fire or any other
casualty and are not substantially restored to the condition immediately prior
to such casualty before the Closing Date, Buyer shall have the following
elections:
8.1.1 to purchase the Property in its then condition and pay the
Purchase Price, in which event Seller shall pay over or assign to Buyer as
the case may be, on the Closing Date, amounts recovered or recoverable by
Seller on account of any insurance as a result of such casualty up to the
amount of the Purchase Price, less any amounts reasonably expended by
Seller for partial restoration if such partial restoration is approved and
consented to by Buyer; or
8.1.2 if any portion of the Property suffers damage in excess of
$500,000 from fire or any other casualty which Seller, in its sole option,
elects not to repair, to terminate this Agreement by giving notice of
termination to Seller on or before that date which is thirty (30) days
after the occurrence of the fire or other casualty or on the Closing Date,
whichever occurs first, in which event the Escrow Agent shall return the
Escrowed Amount to Buyer, this Agreement shall terminate and neither
Seller nor Buyer shall have any recourse against the other (except to the
extent such recourse arises in connection with a provision of this
Agreement which is intended to survive termination).
8.2 Condemnation. If any substantial portion of or interest in the
Property shall be taken or is in the process of being taken by exercise of the
power of eminent domain or if any governmental authority notifies Seller prior
to the Closing Date of its intent to take or acquire any portion of or interest
in the Property (each an "Eminent Domain Taking"), Seller shall give notice
promptly to Buyer of such event and Buyer shall have the option to terminate
this Agreement by providing notice to Seller to such effect on or before the
date which is ten (10) days from Seller's notice to Buyer of such Eminent Domain
Taking or on the Closing Date, whichever occurs first, in which event the Escrow
Agent shall return the Escrowed Amount to Buyer, this Agreement shall terminate,
and neither Seller nor Buyer shall have any recourse against the other (except
to the extent such recourse arises in connection with a provision of this
Agreement which is intended to survive termination). If Buyer does not timely
notify Seller of its election to terminate this Agreement, Buyer shall purchase
the Property and pay the Purchase Price, and Seller shall pay over or assign to
Buyer on delivery of the deed awards recovered or recoverable by Seller on
account of such Eminent Domain Taking up to the amount of the Purchase Price,
less any amounts reasonably expended by Seller in obtaining such award.
ARTICLE 9
BROKERAGE COMMISSIONS
Seller represents and warrants to Buyer that Seller has not used or
employed any broker or brokers in connection with the negotiation, execution or
consummation of the transaction contemplated by this Agreement.
Buyer represents and warrants to Seller that Buyer has not used or
employed any broker or brokers in connection with the negotiation, execution or
consummation of the transaction contemplated by this Agreement. Buyer will
indemnify, defend and hold Seller harmless from and against any claims of any
commission, finder's fee, or other compensation in connection with the
transactions contemplated by this Agreement.
Buyer and Seller each hereby agree to indemnify, defend and hold the other
harmless from and against any claims, losses, damages, costs, or expenses
(including, but not limited to, reasonable attorney's fees) of any kind or
character which arise as a result of breach of the foregoing representation and
warranty.
ARTICLE 10
DEFAULT, TERMINATION AND REMEDIES
10.1 In the event that Seller shall have failed in any material respect
adverse to Buyer to have performed any of the covenants and agreements contained
in this Agreement which are to be performed by Seller on or before the Closing
Date, Buyer shall have the right to terminate this Agreement and receive the
Escrowed Amount.
10.2 In the event that Buyer shall have failed in any material respect
adverse to Seller on the Closing Date to have performed any of the covenants and
agreements contained in this Agreement which are to be performed by Buyer on or
before the Closing Date, or if Buyer defaults in its obligation to close
hereunder, Seller shall be entitled to receive the Escrowed Amount as liquidated
damages, in lieu of all other remedies available to Seller at law or in equity
for such default, and Buyer shall direct the Escrow Agent to release the
Escrowed Amount to Seller. Seller and Buyer agree that the damages resulting to
Seller as a result of such default by Buyer as of the date of this Agreement are
difficult or impossible to ascertain and the liquidated damages set forth in the
preceding sentence constitute Buyer's and Seller's reasonable estimate of such
damages.
ARTICLE 11
MISCELLANEOUS
11.1 Without the prior written consent of Seller, Buyer shall not,
directly or indirectly, assign this Agreement or any of its rights hereunder
except to an affiliate of Buyer that is wholly owned by Buyer or is wholly owned
and controlled by the same parties who own and control Buyer. Any attempted
assignment in violation hereof shall, at the election of Seller in its sole
discretion, be of no force or effect and shall constitute a default by Buyer. No
designation of a nominee to receive title or direction to convey to the
Permitted Designee shall release Buyer from its obligations under this
Agreement. The covenants and agreements contained in this Agreement shall extend
to and be obligatory upon the permitted successors and assigns of the respective
parties to this Agreement. After the Closing, Buyer may assign its remaining
obligations under this Agreement in connection with a sale of the Property
without Seller's consent provided such assignee assumes Buyer's obligations
under this Agreement.
11.2 Except as otherwise specifically provided herein, any notice required
or permitted to be delivered under this Agreement shall be in writing and shall
be deemed given if (i) delivered by hand during regular business hours, (ii)
sent by United States Postal Service, registered or certified mail, postage
prepaid, return receipt requested, (iii) sent by a reputable overnight express
mail service that provides tracing and proof of receipt or refusal of items
mailed, or (iv) sent by telecopier or facsimile transmission with confirmation
copy by notice methods (i), (ii) or (iii) above addressed to Seller or Buyer, as
the case may be, at the address or addresses set forth below or such other
addresses as the parties may designate in a notice similarly sent. Any notice
given by a party to Escrow Agent shall be simultaneously given to the other
party. Any notice given by a party to the other party relating to its
entitlement to the Escrowed Amount shall be simultaneously given to the Escrow
Agent.
(1) If to Buyer:
LandBank Environmental Properties
141 Union Boulevard
Suite 330
Lakewood, Colorado 80228
Attention: William P. Lynott, President
Telecopy: (303) 763-5700
with a copy to:
Greenberg Traurig
800 Connecticut Avenue NW
Suite 500
Washington, DC 20006
Attention: Peter Gillon, Esq.
Telecopy: (787) 796-4645
(2) If to Seller:
PaineWebber Income Properties Three Limited Partnership
265 Franklin Street, 15th Floor
Boston, MA 02110
Attention: Mr. Mark Dunne
Telecopy: (617) 345-8725
with a copy to:
Goodwin, Procter and Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Attention: Andrew C. Sucoff, Esq.
Telecopy: (617) 277-8591
(3) If to the Escrow Agent:
Greenberg Traurig
111 North Orange Avenue
Orlando, Florida 32801
Attention: Craig Minegar, Esq.
Telecopy: (407) 420-5909
11.3 Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words of a singular number shall be
held to include the plural and vice versa, unless the context requires
otherwise.
11.4 The captions used in connection with the Articles of this Agreement
are for convenience only and shall not be deemed to extend, limit or otherwise
define or construe the meaning of the language of this Agreement.
11.5 Nothing in this Agreement, express or implied, is intended to confer
upon any person, other than the parties hereto and their respective successors
and assigns, any rights or remedies under or by reason of this Agreement.
11.6 This Agreement may be amended only by a written instrument executed
by Seller and Buyer (or Buyer's assignee or transferee).
11.7 This Agreement embodies the entire agreement between Seller and Buyer
with respect to the transaction contemplated in this Agreement, and there have
been and are no covenants, agreements, representations, warranties or
restrictions between Seller and Buyer with regard thereto other than those set
forth or provided for in this Agreement.
11.8 This Agreement shall be construed under and in accordance with the
laws of the State of Florida, without regard to conflict of law principles.
11.9 This Agreement may be executed in two (2) or more counterparts, each
of which shall be an original but such counterparts together shall constitute
one and the same instrument notwithstanding that both Buyer and Seller are not
signatory to the same counterpart.
11.10 Time is expressly declared to be of the essence of this Agreement.
11.11 The obligations of Seller hereunder shall be binding only on the
Property and neither Buyer nor anyone claiming by, through or under Buyer shall
be entitled to obtain any judgment extending liability beyond the Property or
creating personal liability on the part of the officers, directors,
shareholders, or agents of Seller or any of their successors. The obligations of
Buyer hereunder shall be binding only on the assets of Buyer and neither Seller
nor anyone claiming by, through or under Seller shall be entitled to obtain any
judgment creating personal liability on the part of the partners, officers,
shareholders, or agents of Buyer or any of their successors or any affiliated
entities.
11.12 As used herein, the term "business day" shall mean any day other
than on Saturday, Sunday, or federal holiday. In the event that any date
hereunder falls on a Saturday, Sunday, or federal holiday, the date applicable
shall be the next business day.
ARTICLE 12
IRS FORM 1099-S DESIGNATION
12.1 In order to comply with information reporting requirements of Section
6045(e) of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations thereunder, the parties agree (1) to execute an IRS Form 1099-S
Designation Agreement in the form attached hereto as Schedule G at or prior to
the Closing to designate the Escrow Agent (the "Designee") as the party who
shall be responsible for reporting the contemplated sale of the Property to the
Internal Revenue Service (the "IRS") on IRS Form 1099-S; (2) to provide the
Designee with the information necessary to complete Form 1099-S; (3) that the
Designee shall not be liable for the actions taken under this Agreement, or for
the consequences of those actions, except as they may be the result of gross
negligence or willful misconduct on the part of the Designee; and (4) that the
Designee shall be indemnified by the parties for any costs or expenses incurred
as a result of the actions taken hereunder, except as they may be the result of
gross negligence or willful misconduct on the part of the Designee. The Designee
shall provide all parties to this transaction with copies of the IRS Forms
1099-S filed with the IRS and with any other documents used to complete IRS Form
1099-S.
ARTICLE 13
ESCROW
13.1 The Escrow Agent has executed this Agreement only for the purpose of
agreeing to perform the duties assigned to it under this Agreement. Prior to the
Diligence Date, Escrow Agent is hereby authorized and directed to release the
Escrowed Amount to Buyer promptly upon Buyer's written request, without joinder
by Seller and notwithstanding any objection interposed by Seller. This Agreement
shall terminate upon any such request from Buyer pursuant to Section 4.5 above.
From and after the Diligence Date the Escrow Agent shall, upon receiving a copy
of a notice given by a party in accordance with this Agreement claiming
entitlement to all or a portion of the Escrowed Amount, give a notice to the
other party that such claim of entitlement has been made. The Escrow Agent shall
not cause or permit any portion of the Escrowed Amount to be disbursed until the
expiration of five (5) days of giving such notice whereupon, if the party to
whom such notice was given has not given the Escrow Agent notice of its
objection to a disbursement in accordance with the claim of entitlement, the
Escrow Agent shall cause a disbursement of the Escrowed Amount as requested. If
such party timely objects, however, the Escrow Agent shall retain the Escrowed
Amount and not disburse any portion of the same unless directed by the mutual
written direction of the parties. The Escrow Agent shall at all times disburse
the Escrowed Amount as required in a mutual written direction of the parties.
13.2 In the event of any disagreement between the parties, the Escrow
Agent shall retain all deposits pending instructions mutually agreed to by
Seller and Buyer. In the event there is no mutual agreement by Seller and Buyer
for disbursements, the Escrow Agent shall hold said deposits pending a court
order to disburse. The Escrow Agent may conclusively rely on the authenticity,
validity and effectiveness of any writing delivered to it, and Escrow Agent
shall not be obligated to make any investigation or determination, except as
provided in the case of disputes as to the truth and accuracy of any information
contained therein. Buyer and Seller agree to defend, indemnify and hold Escrow
Agent harmless from any liabilities, suits, claims, or expenses arising from or
out of or in connection with Escrow Agent's acts or failure to act hereunder,
unless caused or created as a result of Escrow Agent's gross negligence, and
Escrow Agent shall be entitled to reimbursement by Buyer and/or Seller for all
reasonable costs and expenses incurred in the performance of its duties
hereunder including, without limitation, all out-of-pocket expenses and
reasonable attorneys' fees of counsel retained by Escrow Agent. Any such costs
and expenses not paid by the parties after billing and supporting documentation
by Escrow Agent may be paid by Escrow Agent out of the Escrowed Amount. If there
is a settlement by Buyer and Seller prior to a court order, Buyer and Seller
will share equally in the expenses incurred by the Escrow Agent. Otherwise, the
non-prevailing party shall assume full responsibility for the Escrow Agent's
expenses. Escrow Agent is not required to advance or expend or risk its own
funds or otherwise incur personal liability in performance of its duties
hereunder and it may require advancement of funds by the parties.
ARTICLE 14
STATE REQUIREMENTS
14.1 Radon Gas Disclosure. Pursuant to Section 404.056(8), Florida
Statutes (1988) the following notification regarding radon gas is hereby made,
and all parties executing this Agreement acknowledge receipt of this
notification:
"Radon Gas: 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 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."
IN WITNESS WHEREOF, the parties have executed this instrument as of the
day and year first set forth above.
SELLER:
PaineWebber Income Properties Three Limited Partnership
By: Third Income Properties, Inc., its
General Partner
By: /s/ Margaret A. Fitts
---------------------
Name: Margaret A. Fitts
Title: Vice President
BUYER:
LandBank Environmental Properties, LLC
By: /s/ William P. Lynott
----------------------
William P. Lynott, Esq.
<PAGE>
SCHEDULE A
----------
Legal Description of Real Property
----------------------------------
Lot No. 1 of Kensington Park Sub., Unit No. 1 recorded in Plat Book 8,
Pages 112 and 112-A, Public Records of Sarasota County, Florida. Together with a
tract 100 feet wide located within said Lot No. 1 of Kensington Park, and being
marked "not included in this plat" on said Plat of Kensington Park Unit No. 1,
LESS a tract 150' x 150' in the S.W. Corner thereof.
All of the above being more particularly described as follows:
Commence at the S.W. corner of Lot No. 1 of Kensington Park Sub., Unit No. 1,
recorded in Plat Book 8, Pages 112 and 112-A, Public Records of Sarasota County,
Florida; thence N 89E 57' 56" E, along the South line of said Lot 1, 150.00' for
a Point of Beginning; thence North and parallel to the West line of said Lot 1,
150.00'; thence S 89E 57' 56" W, 150.00" to said West line of Lot 1; thence
North along said West line of Lot 1, 468.17' to the N.W. corner of said Lot 1;
thence East along the North line of said Lot 1, 905.48' to the P.C. of a curve
to the left; thence Easterly along said curve, having a radius of 640.00', a
distance of 49.21' to the N.E. corner of said Lot 1; thence S 21E 40' 34" E
along the East line of said Lot 1, 165.46' to the P.C. of a curve to the right;
thence Southerly along said curve, having a radius of 65.00', a distance of
22.70' to the P.T.; thence South along the East line of said Lot 1, 443.43' to
the S.E. corner of said Lot 1; thence S 89E 57' 56" W along the South line of
said Lot 1 (and extensions thereof), 870.00' to the Point of Beginning.
<PAGE>
AMENDMENT TO PURCHASE AND SALE AGREEMENT
----------------------------------------
This AMENDMENT TO PURCHASE AND SALE AGREEMENT is entered into by and
between PaineWebber Income Properties Three Limited Partnership, a Delaware
limited partnership ("Seller") and LandBank Environmental Properties, LLC, a
Delaware limited liability company ("Buyer").
WHEREAS, Buyer and Seller entered into that certain Purchase and Sale
Agreement dated as of August 31, 2000 (the "Purchase Agreement"); and
WHEREAS, Buyer and Seller desire to amend the Purchase Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. All capitalized terms not defined herein shall have the meaning
ascribed to such terms in the Purchase Agreement.
2. Section 3.2 of the Purchase Agreement is deleted in its entirety and
restated to read as follows:
3.2 Deposit. Buyer shall, contemporaneously with execution of this
Agreement, deposit with the Escrow Agent the sum of One Hundred
Thousand Dollars ($100,000) (with all interest thereon and additions
thereto, the "Escrowed Amount") to secure Buyer's obligations under
this Agreement. Unless this Agreement has been terminated in accordance
with the terms hereof, on September 14, 2000, Buyer shall deposit with
the Escrow Agent an additional $100,000 to be added to the Escrowed
Amount (for a total of $200,000). After September 18, 2000, at 12:00
p.m. EST (the "First Hard Date") $50,000 of the Escrowed Amount shall
become non-refundable to Buyer and shall be delivered by Escrow Agent
to seller.
3. Prior to the First Hard Date, Buyer may elect, at its sole discretion
by written notice to Seller, to cause an additional $50,000 of the
Escrowed Amount (for a total of $100,000) to become non-refundable to
Buyer and to be delivered to Seller in which case the purchase price
defined in Section 3.1 of the Purchase Agreement shall be reduced from
$3,712,500 to $3,625,000.
4. At Closing, Seller agrees to assign that certain Lease Termination
Agreement between Seller and Northeast Plaza Associates, Ltd. to Buyer,
without warranty or representation by Seller.
5. At Closing, Seller shall receive credit for October, 2000 and November,
2000 rent under that certain lease between Seller and Zade, Inc. as if
such rents had been fully paid to Seller, and Seller shall be
responsible for paying any leasing commissions on such lease at
Closing.
6. October, 2000 rent from Property shall be prorated as if all the rent
for October, 2000 has been paid to Seller as of the Closing. Seller
shall be responsible for collecting any October rent unpaid as of the
Closing. Any prior uncollected rent shall be prorated as provided in
Section 3.6 of the Partnership Agreement.
7. The Closing Date shall be extended from October 6, 2000 to October 9,
2000.
8. Except as provided for herein, the Purchase Agreement shall remain in
full force and effect.
<PAGE>
EXECUTED as of September 14, 2000.
PAINEWEBBER INCOME PROPERTIES THREE LIMITED
PARTNERSHIP
By: Third Income Properties, Inc., its
general partner
By: /s/ Margaret A. Fitts
----------------------
Name: Margaret A. Fitts
Title: Vice President
LANDBANK ENVIRONMENTAL PROPERTIES, LLC
By: /s/ William P. Lynott
----------------------
William P. Lynott, Esq.
<PAGE>
AMENDMENT TO PURCHASE AND SALE AGREEMENT
----------------------------------------
This AMENDMENT TO PURCHASE AND SALE AGREEMENT is entered into by and
between PaineWebber Income Properties Three Limited Partnership, a Delaware
limited partnership ("Seller") and LandBank Environmental Properties, LLC, a
Delaware limited liability company ("Buyer").
WHEREAS, Buyer and Seller entered into that certain Purchase and Sale
Agreement dated as of August 31, 2000 (as amended from time to time, the
"Purchase Agreement"); and
WHEREAS, Buyer and Seller entered into that certain Amendment to Purchase
and Sale Agreement dated as of September 14, 2000 (the "Amendment"); and
WHEREAS, Buyer and Seller desire to amend the Purchase Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. All capitalized terms not defined herein shall have the meaning
ascribed to such terms in the Purchase Agreement.
2. At Closing, Buyer shall receive a credit of $30,740.32 for leasing
commissions and lost rent related to the Boombox space. Buyer shall not
be entitled to any credit related to the proposed Zade lease as
described in Section 5 of the Amendment.
3. Buyer hereby acknowledges that the Diligence Date has passed and Buyer
no longer has the right to terminate the Purchase Agreement under
Section 5.2 of the Purchase Agreement.
4. The Closing shall occur in escrow on October 9, 2000 with the release
of funds by 10:00 AM (EST) on October 10, 2000.
5. Except as provided for herein, the Purchase Agreement shall remain in
full force and effect.
<PAGE>
EXECUTED as of September 26, 2000.
PAINEWEBBER INCOME PROPERTIES THREE LIMITED
PARTNERSHIP
By: Third Income Properties, Inc., its
general partner
By: /s/ Margaret A. Fitts
----------------------
Name: Margaret A. Fitts
Title: Vice President
LANDBANK ENVIRONMENTAL PROPERTIES, LLC
By: /s/ William P. Lynott
----------------------
William P. Lynott, Esq.
<PAGE>
THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT
----------------------------------------------
This THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT is dated this 2nd day
of October, 2000 by and between PaineWebber Income Properties Three Limited
Partnership, a Delaware limited partnership ("Seller") and LandBank
Environmental Properties, LLC, a Delaware limited liability company ("Buyer").
WHEREAS, Buyer and Seller entered into that certain Purchase and Sale
Agreement dated as of August 31, 2000 and Amendment to Purchase and Sale
Agreement dated September 26, 2000 (the "Purchase Agreement"); and
WHEREAS, Buyer and Seller now wish to further amend the Purchase
Agreement, as more fully set forth in this Third Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. All capitalized terms not defined herein shall have the meaning
ascribed to such terms in the Purchase Agreement.
2. In the event that the balance of the Purchase Price (the "Seller
Funds") has not been disbursed to Seller by federal wire transfer on or
before 2:00 p.m. Eastern Standard Time on October 10, 2000 (the "Seller
Fund Deadline"), then Buyer shall pay to Seller, as liquidated damages
an amount (the "Carry Cost Amount") equal to the sum of (a) the per
diem interest payable on such Seller Funds at an annual simple interest
rate of 5.25% and (b) the per diem debt service payable by Seller for
the existing mortgage loan on the Property; provided, however, that the
Carry Cost Amount shall not exceed One Thousand and 00/100 Dollars
($1,000.00). Seller shall not be entitled to declare Buyer in default
until 12:00 p.m. (Eastern Standard Time) on October 11, 2000. Time is
of the essence.
3. Except as otherwise provided for herein, the Purchase Agreement shall
remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties have heretofore set their hand and seals
on the day and year first above written.
PAINEWEBBER INCOME PROPERTIES THREE LIMITED
PARTNERSHIP
By: Third Income Properties, Inc., its
general partner
By: /s/ Margaret A. Fitts
----------------------
Name: Margaret A. Fitts
Title: Vice President
LANDBANK ENVIRONMENTAL PROPERTIES, LLC
By: /s/ William P. Lynott
----------------------
William P. Lynott, President
<PAGE>
FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT
-----------------------------------------------
This FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT is entered into by
and between PaineWebber Income Properties Three Limited Partnership, a Delaware
limited partnership ("Seller") and LandBank Environmental Properties, LLC, a
Delaware limited liability company ("Buyer").
WHEREAS, Buyer and Seller entered into that certain Purchase and Sale
Agreement dated as of August 31, 2000 as amended by Amendment to Purchase and
Sale Agreement dated September 14, 2000, Amendment to Purchase and Sale
Agreement dated September 26, 2000 and Third Amendment to Purchase and Sale
Agreement dated October 2, 2000 (the "Purchase Agreement"); and
WHEREAS, Buyer and Seller desire to amend the Purchase Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. All capitalized terms not defined herein shall have the meaning
ascribed to such terms in the Purchase Agreement.
2. Section 2 of the Third Amendment to Purchase and Sale Agreement is
deleted.
3. The Closing Date shall be extended to the close of business on
Thursday, October 12, 2000.
4. On Tuesday, October 10, 2000 Buyer shall directly transmit $758,234.32
of the Purchase Price to Bank of America by federal wire transfer
sufficient to discharge the mortgage loan currently encumbering the
Property pursuant to the wire instructions attached hereto as Exhibit
A. If such wire transfer occurs after 2:00 p.m. (EST) on Tuesday,
October 10, 2000, Buyer shall be responsible and pay for the additional
per diem interest described on Exhibit A.
5. On Tuesday, October 10, 2000, Buyer shall directly transmit $441,765.68
of the purchase price by federal wire transfer to Seller pursuant to
the wire instructions attached hereto as Exhibit B.
6. On Tuesday, October 10, 2000, the Escrow Agent shall release the
remainder of the Deposit to Seller by federal wire transfer pursuant to
the wire instructions attached hereto as Exhibit B.
7. The funds disbursed pursuant to paragraphs 4, 5 and 6 above shall be
considered earned by Seller and shall be non-refundable to Buyer.
8. Buyer is to cause the net proceeds to Seller to be transmitted to
Seller by federal wire transfer by 5:00 PM (EST) on Thursday, October
12, 2000.
9. Except as provided for herein, the Purchase Agreement shall remain in
full force and effect. Time is of the essence.
<PAGE>
EXECUTED as of October 9, 2000.
PAINEWEBBER INCOME PROPERTIES THREE LIMITED
PARTNERSHIP
By: Third Income Properties, Inc., its
general partner
By: /s/ Margaret A. Fitts
----------------------
Name: Margaret A. Fitts
Title: Vice President
LANDBANK ENVIRONMENTAL PROPERTIES, LLC
By: /s/ William P. Lynott
----------------------
William P. Lynott, President
