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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): January 29, 1999
CONAM REALTY INVESTORS 2 L.P.
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(Exact name of registrant as specified in its charter)
California 0-11085 13-3100545
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(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
1764 San Diego Avenue, San Diego, California 92110
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (619) 297-6771
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(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 29, 1999, ConAm Realty Investors 2 L.P. (the "Partnership")
completed the sale (the "Sale") of its four remaining properties, Creekside Oaks
Apartments, a 120-unit apartment community located in Jacksonville, Florida,
Ponte Vedra Beach Village I Apartments, a 122-unit apartment complex located in
Ponte Vedra Beach, Florida, Rancho Antigua, a 220-unit apartment community
located in Scottsdale, Arizona, and Village at Foothills I Apartments, a 60-unit
apartment community located in Tucson, Arizona (the "Properties"), to DOC
Investors, L.L.C., a Delaware limited liability company (the "Purchaser"). The
members of the Purchaser are two pension funds which own an aggregate 91%
interest in the Purchaser, advised by Lend Lease Real Estate Investments, Inc.
("Lend Lease"), which is unaffiliated with ConAm Property Services II, Ltd., the
general partner of the Partnership (the "General Partner"), and ConAm DOC
Affiliates LLC, an affiliate of the General Partner ("ConAm DOC"), which owns a
9% interest in the Purchaser. As described in the Consent Solicitation Statement
defined below, ConAm DOC has the potential to receive up to an additional 18% of
the profits of the Purchaser after certain priority returns are paid to the
members of the Purchaser. The Purchaser has retained ConAm Management
Corporation, an affiliate of the General Partner, to act as the initial property
manager for the Properties. As required by the Partnership's Certificate and
Agreement of Limited Partnership (the "Partnership Agreement"), the consent of a
majority in interest of the Limited Partners to the Sale was obtained pursuant
to a Consent Solicitation Statement dated December 16, 1998 (the "Consent
Solicitation Statement").
The sale price of the Properties was $29,300,000 (before selling costs
and prorations). The sale price was negotiated between the General Partner, on
behalf of the Partnership, and Lend Lease on behalf of the Purchaser. The
Partnership received approximately $17,217,000 of cash proceeds from the Sale,
net of closing costs of approximately $93,000 and repayment of indebtedness of
approximately $11,990,000. All net cash proceeds from the Sale, less any amount
the General Partner determines to set aside as a reserve for contingencies, will
be distributed to the Limited Partners.
The Purchaser purchased the Properties on an "As Is" basis with only
limited representations and warranties by the Partnership as to the condition of
the Properties or their fitness for any purpose. Any representations made by the
Partnership will survive for only a period of six months following the closing
date. Although it is not expected, the Partnership could ultimately have some
liability to the Purchaser under such representations and warranties.
ITEM 5. OTHER EVENTS.
By amendment dated January 18, 1999 (the "Amendment"), Section 12 of the
Partnership's Partnership Agreement was amended to permit proposed sales of
Partnership properties to "affiliates" of the General Partner, if such proposed
sales are
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approved by the Limited Partners. As required by the Partnership Agreement, the
consent of a majority in interest of the Limited Partners to the Amendment was
obtained pursuant to the Consent Solicitation Statement.
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 Properties by the Partnership, beyond the
date of sale there will be no further rental income, property operating
expenses, interest expense, or depreciation and amortization expenses in the
consolidated financial statements of the Partnership. For the Partnership's
fiscal year ended December 31, 1997 (the last fiscal year for which information
is available at the date of this Report) such amounts were $4,327,499,
$2,329,300, $904,630, and $1,017,912, respectively. Rental income, property
operating expenses, interest expense, and depreciation and amortization expenses
were $3,333,733, $1,682,747, $667,227, and $760,045, respectively, for the nine
months ended September 30, 1998 in the consolidated financial statements of the
Partnership. Also as a result of the Sale of the Properties, there are no
further assets and liabilities related to the Properties in the Partnership's
consolidated financial statements, which at September 30, 1998 consisted of
investments in real estate, less accumulated depreciation, of $16,023,754;
restricted cash of $521,854; other assets, net of accumulated amortization, of
$247,615; mortgages payable of $11,382,614; and security deposits of $92,286.
Following the Sale, the Partnership's only asset will be cash and cash
equivalents; its only liabilities will be distribution payable and accounts
payable and accrued expenses; its only income will be interest income; and its
only expenses will be general and administrative expenses of winding up and
liquidating the Partnership.
(c) Exhibits.
4.1 Amendment, dated January 18, 1999 to Partnership Agreement.
10.1 Agreement for Purchase and Sale and Joint Escrow Instructions between
Creekside Oaks Joint Venture and DOC Investors, L.L.C. dated January
26, 1999 with respect to Creekside Oaks.
10.2 Agreement for Purchase and Sale and Joint Escrow Instructions between
Ponte Vedra Beach Village Joint Venture and DOC Investors, L.L.C. dated
January 26, 1999 with respect to Ponte Vedra Beach Village I
Apartments.
10.3 Agreement for Purchase and Sale and Joint Escrow Instructions between
Rancho Antigua Joint Venture and DOC Investors, L.L.C. dated January
26, 1999 with respect to Rancho Antigua.
10.4 Agreement for Purchase and Sale and Joint Escrow Instructions between
Village at the Foothills (Phase I) Joint Venture Limited Partnership
and DOC Investors, L.L.C. dated January 26, 1999 with respect to
Village at Foothills I Apartments.
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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.
CONAM PROPERTY SERVICES II, LTD.,
General Partner of ConAm Realty Investors 2 L.P.
By: Continental American Development, Inc.,
General Partner
Date: February 12, 1999 By: /s/Daniel J. Epstein
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Daniel J. Epstein
Director, President, and Principal Executive
Officer
Date: February 12, 1999 By: /s/Robert J. Svatos
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Robert J. Svatos
Chief Financial Officer
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AMENDMENT TO
CERTIFICATE AND AGREEMENT
OF LIMITED PARTNERSHIP
OF CONAM REALTY INVESTORS 2 LP
This Amendment to Certificate and Agreement of Limited Partnership of ConAm
Realty Investors 2 LP, a California limited partnership formerly known as
Hutton/ConAm Realty Investors 2 (the "PARTNERSHIP"), is entered into as of
January 18, 1999, and amends the Amended and Restated Certificate and Agreement
of Limited Partnership of the Partnership (as amended to date, the "AGREEMENT"),
as follows:
1. Section 12.d.(xi) of the Agreement is hereby amended as follows:
(xi) Except as provided in Subsection 12f.(vi), permit the
Partnership to purchase or lease property in which a General Partner or any
Affiliate has an interest or sell any Property to a General Partner or any
Affiliate, unless such transaction is specifically approved by Limited
Partners owning a majority of the Units outstanding at that time.
2. Except as expressly amended hereby, all other provisions of the
Agreement shall remain unchanged and shall continue in full force and
effect.
3. The effective date of this Amendment is January 18, 1999.
GENERAL PARTNER:
ConAm Property Services II, Ltd.
By: Continental American Development, Inc.,
its general partner
By: /s/ Scott Dupree
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E. Scott Dupree,
Vice President
LIMITED PARTNERS:
The Limited Partners of the Partnership whose names are
recorded in the records of the Partnership by ConAm
Property Services II, Ltd., their attorney-in-fact
By: Continental American Development, Inc.
By: /s/ Scott Dupree
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E. Scott Dupree,
Vice President
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AGREEMENT FOR PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
CREEKSIDE OAKS
This Agreement for Purchase and Sale and Joint Escrow Instructions (this
"Agreement") is entered into as of January 26, 1999, by and between Creekside
Oaks Joint Venture , a Florida general partnership ("Seller"), and DOC
Investors, LLC, a Delaware limited liability company ("Buyer"), who agree and,
to the extent applicable, instruct First American Title Insurance Company
("Escrow Holder" or "Title Company," as the context may require), as escrow
holder, as follows:
1. This Agreement is made with reference to the following facts:
1.1. Seller owns that certain real property located at 9780
Creekfront Road, Jacksonville, Florida 32216, commonly known as Creekside
Oaks Apartments and more fully described on EXHIBIT A attached hereto (the
"Real Property"), including without limitation all rights, members,
easements, alleys, ways, appurtenances, shrubbery, trees, plants and
privileges located thereon or appertaining thereto, together with any and
all right, title and interest in and to any land lying in the bed or
right-of-way of any street, road, alley or avenue, open or proposed, in
front of or adjoining the land to the centerline thereof, together with any
nonexclusive right to use any and all such land lying within any such
roadbed, right-of-way, street, alley or avenue for ingress and egress to
and from the land, together with any and all right, title and interest in
and to any award made or to be made in lieu thereof, and in and to any
unpaid award for damage to the land by reason of change of grade of any
street. Along with the Real Property, Buyer intends to purchase from
Seller, and Seller intends to sell to Buyer, in accordance with this
Agreement, all improvements constructed in, on or under the Real Property
including a 120-unit residential apartment complex (collectively, the
"Improvements"), all of Seller's tangible personal property located on and
used solely in connection with the Real Property or the Improvements,
including without limitation the tangible personal property identified on
EXHIBIT B attached hereto (the "Personal Property") and all intangible
personal property owned by Seller and now, or hereafter, used in connection
with the Real Property (the "Intangible Property") including, without
limitation, all (i) trade names, (ii) logos, (iii) warranties and
guaranties relating to the construction, operation, maintenance, repair and
use of the Improvements and the Personal Property, including, without
limitation, any and all equipment, HVAC systems, plumbing and roof
warranties and all contractors' and subcontractors' warranties (the
"Warranties"), (iv) certificates of occupancy (or the local equivalents),
permits, licenses, approvals and authorizations issued by any federal,
state or municipal government, branch, authority, district, agency, court,
tribunal, department, board, commission or other instrumentality
("Governmental Authority"), (v) leases and other occupancy agreements (the
"Leases"), and (vi) contracts or other similar arrangements for goods and
services (the "Service Contracts").
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1.2. By this Agreement, Buyer and Seller intend to provide for
the sale of the Real Property, the Improvements, the Personal Property and
the Intangible Property (collectively, the "Property") by Seller to Buyer.
2. PURCHASE AND SALE. Subject to the terms and conditions of this
Agreement, Seller agrees to sell the Property to Buyer and Buyer agrees to
purchase the Property from Seller.
3. ESCROW.
3.1. OPENING OF ESCROW. Buyer shall immediately cause an escrow
(the "Escrow") to be opened at Escrow Holder's office located at 114 East
Fifth Street, Santa Ana, California 92701, Attention: Toni Rice-Groetsch
for the purpose of facilitating the consummation of this Agreement, by
delivering the Deposit (as defined in Section 4.1 below) to Escrow Holder
along with a copy of the fully executed original (or executed counterparts)
of this Agreement within two (2) business days after executing this
Agreement. Escrow Holder shall, immediately upon its receipt of the Deposit
and executed Agreement, execute and deliver to Buyer and Seller the Consent
and Acceptance of Escrow Holder attached to this Agreement, which Consent
and Acceptance of Escrow Holder shall specify the date of such receipt (the
"Escrow Opening Date"). This Agreement constitutes instructions to Escrow
Holder. Buyer and Seller shall execute such additional mutual instructions
as Escrow Holder may reasonably require, provided that such additional
instructions shall be consistent with this Agreement. Any inconsistency
between any such additional instructions and this Agreement shall be
resolved in a manner consistent with this Agreement, and the provisions of
this Agreement shall prevail unless Buyer and Seller waive such
inconsistent provision in writing by specifically referring to the fact of
such inconsistency and their intent to waive it.
3.2. CLOSING DATE. The purchase and sale transaction
contemplated hereunder shall close in accordance with Article 8 below (the
"Closing") by 10:00 a.m. PST on the later of (i) the satisfaction of the
Concurrent Closing Contingency (as defined in Section 36 below) and (ii)
the tenth (10th) business day following the receipt of Seller's Consent (as
defined in Section 22 below) (the "Closing Date"); provided, however, that
if the Closing shall occur on the Closing Date but after 10:00 a.m. PST,
the Closing Date shall be deemed to have occurred on the date of
recordation of the Deed (hereinafter defined) for purposes of calculating
prorations under Article 10 below, and provided further that Buyer shall
have the right, exercisable on written notice given to Seller not less than
five (5) days prior to the date originally scheduled as the Closing Date,
to extend such Closing Date for up to thirty (30) days to accommodate the
requirements of Buyer's lender and provided further that in no event shall
the Closing Date occur after February 1, 1999, unless the parties otherwise
agree in writing. If the Closing does not occur on or before the Closing
Date, then Buyer or Seller, if not in default under this Agreement, may at
any time thereafter give written notice to Escrow Holder to cancel the
Escrow whereupon the Escrow and the subject transaction shall become
terminated and Escrow Holder shall distribute all monies and documents in
Escrow Holder's possession in accordance with this Agreement and all
additional mutual instructions as the parties may provide. Such
cancellation of the Escrow shall not prejudice
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or limit any legal or equitable rights of Buyer or Seller, except as may be
limited by Article 12 below.
4. PURCHASE PRICE. The purchase price payable by Buyer for the Property
(the "Purchase Price") at the Closing is Five Million Five Hundred Thousand and
No/100 Dollars ($5,500,000.00), payable as follows:
4.1. DEPOSIT. Within three (3) business days after Buyer's
delivery of an executed copy of this Agreement to Escrow Holder, Buyer
shall deliver to Escrow Holder immediately available funds in the amount of
One Hundred Thousand and No/100 Dollars ($100,000.00) (the "Deposit").
Escrow Holder shall promptly deposit the Deposit into a federally-insured
interest-bearing account for the benefit of Buyer upon Escrow Holder's
receipt of Buyer's United States taxpayer identification number. The
Deposit, plus any interest accrued thereon, shall be applicable towards the
Purchase Price except as otherwise provided in Section 12 below.
4.2. BALANCE. Not later than one (1) business day prior to the
Closing Date, Buyer shall deposit with Escrow Holder cash or other
immediately available funds in the amount of the balance of the Purchase
Price, plus all other sums required of Buyer under this Agreement to pay
Buyer's costs and Buyer's share of prorations.
5. CONDITIONS PRECEDENT. Buyer's obligations under this Agreement are
subject to satisfaction or Buyer's written waiver of the following conditions
precedent (collectively, "Buyer's Conditions") on or before the expiration of
the applicable contingency period provided for below (collectively, the
"Contingency Periods"). If the respective Buyer's Condition has not been
satisfied or waived in writing, then at Buyer's option, this Agreement and the
Escrow shall be deemed terminated and neither Buyer nor Seller shall have any
further obligation to the other party under this Agreement (except to the extent
of any indemnities under this Agreement with respect to events occurring before
such termination, which indemnities shall survive any such termination). If
either party terminates the Escrow in accordance with the preceding sentence,
Escrow Holder shall, without requiring any further instructions, immediately
return the Deposit plus any interest accrued thereon to Buyer.
5.1. DUE DILIGENCE DELIVERIES BY SELLER. Buyer acknowledges that
Seller prior to the date of this Agreement has provided to Buyer copies of,
or access to, the items identified on EXHIBIT C attached hereto and that
such items are the only items that Buyer has requested from Seller for
Buyer's examination and review of the Property and all aspects thereof.
5.2. DUE DILIGENCE INVESTIGATION. Buyer acknowledges that it has
investigated, reviewed and approved (or has had an adequate opportunity to
investigate and review and accordingly approves) the physical,
developmental and economic status and feasibility of the Property,
including without limitation marketing studies, land use and legal due
diligence, engineering studies, soils tests, physical inspections and
environmental surveys with respect to the Property. In order to facilitate
Buyer's investigation and analysis, Seller
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has granted and will continue to grant to Buyer the right to enter the
Property at any time during normal business hours upon forty-eight (48)
hours' prior written notice to Seller, to conduct such inspections,
reviews, examinations and tests on the Property as Buyer has deemed
necessary or desirable to investigate the physical condition of the
Property, as well as access to relevant information relating to the
Property within Seller's possession or under Seller's control (but Seller
has made and now makes no representation or warranty regarding the accuracy
or completeness of such information). Buyer further acknowledges that it
is acquiring the Property in its "as-is" condition in accordance with
Section 19 below.
5.3. SELLER'S CONSENT. Seller shall have obtained Seller's
Consent in accordance with Article 22 below.
5.4. STATUS OF TITLE AND SURVEY. If Buyer intends to obtain
extended coverage title insurance in connection with this Agreement, then
Buyer shall obtain at its sole cost and expense an as-built survey of the
Property complying with 1992 ALTA/ACSM minimum standards (the "Survey").
Buyer acknowledges that Buyer has approved the exceptions to title shown in
that certain preliminary title report or owner's title commitment for the
Property issued by the Title Company (the "Title Report") and matters shown
on the Survey (if any) other than those exceptions or matters identified on
EXHIBIT D attached hereto ("Disapproved Title Exceptions"), which
Disapproved Title Exceptions Seller shall remove (or cause to be removed)
as exceptions to title prior to the Closing. Buyer shall have the
continuing right to update the Title Report and the Survey from time to
time and to give Seller notice of any additional Disapproved Title
Exceptions first arising after the date of the Title Report or the Survey,
as the case may be. Within ten (10) business days following receipt of any
written notice of such additional Disapproved Title Exceptions from Buyer,
Seller shall notify Buyer in writing of which of such additional
Disapproved Title Exceptions Seller will agree to cure on or before the
Closing Date; provided, however, that Seller shall satisfy and correct, at
or before the Closing, any Disapproved Title Exceptions constituting a
mortgage, deed of trust or other lien encumbering all or any portion of the
Property (other than liens created by Buyer's acts or omissions) or
otherwise created by Seller's acts or omissions on or after the date of
this Agreement ("Mandatory Cure Items"). In the event Seller elects not to
satisfy or cure any such additional Disapproved Title Exceptions of which
it is so notified, then, within ten (10) business days following receipt of
Seller's election, Buyer shall by written notice to Seller elect one of the
following:
5.4.1. To waive such additional Disapproved Title Exceptions and
to close the transaction contemplated hereby in accordance with the
terms of this Agreement; provided, however, that with respect to any
Disapproved Title Exception which is a Mandatory Cure Item, Buyer
shall be entitled to satisfy or remove any such Disapproved Title
Exception(s) at the Closing and to credit against the Purchase Price
the amount required to satisfy or remove such Mandatory Cure Item(s);
or
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5.4.2. To terminate this Agreement, in which event Buyer shall
be entitled to the immediate return of the Deposit and the parties
hereto shall have no further rights, duties or obligations under this
Agreement, except those rights, duties and obligations that, by the
express terms hereof, survive termination of this Agreement.
5.5. OWNER'S POLICY. On or before the Closing, the Title Company
must be prepared to issue to Buyer an Owner's Policy of Title Insurance for
the Property (the "Title Policy") effective as of the Closing, insuring
Buyer in the amount of the Purchase Price that title to the Property is
vested in Buyer at the Closing, subject only to (a) standard pre-printed
exceptions (other than those preprinted exceptions that can be removed with
a customary seller's affidavit), (b) liens for taxes and assessments not
yet delinquent, (c) those exceptions to title described in the
corresponding Title Report other than the Disapproved Title Exceptions and
(d) exceptions created or suffered by Buyer. Buyer may require a policy
without a generic survey exception only if Buyer can timely provide Title
Company with all information necessary in order for the policy to be issued
on or before the Closing Date. Seller shall not suffer any liability in
connection with its failure to remove any title exception; Buyer's sole
remedy for Seller's failure to cause the elimination of a Disapproved Title
Exception shall be termination of this Agreement. Notwithstanding the
foregoing, Seller shall cause the removal of any Mandatory Cure Item at or
before the Closing.
5.6. SELLER'S FINANCIAL CONDITION. Seller has not (i) made an
assignment for the benefit of creditors, (ii) filed a petition in
bankruptcy, (iii) been adjudicated insolvent or bankrupt, (iv) petitioned a
court for the appointment of any receiver of or trustee for it or any
substantial part of its property, (v) commenced any proceeding relating to
Seller under any reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect. There shall not have been commenced and be pending
against Seller any proceeding of the nature described in the first
sentence of this Section 5.6. No order for relief shall have been entered
with respect to Seller under the Federal Bankruptcy Code.
5.7. COVENANTS, REPRESENTATIONS AND WARRANTIES. Seller shall
have complied, and at Closing shall then be in compliance, with each and
all of its covenants contained in this Agreement in all material respects,
and the representations and warranties set forth in Paragraph 7 hereof
shall be true, complete and accurate as of the Closing Date in all material
respects.
5.8. SELLER'S DELIVERIES. Seller shall have delivered to Buyer,
in form and substance in accordance with the requirements herein, all
instruments and documents required on Seller's part to effectuate this
Agreement and the transactions contemplated hereby.
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Except for the Buyer's Condition referenced in Section 5.3 above, which is a
condition to Buyer's and Seller's obligations under this Agreement, any one or
more of the foregoing Buyer's Conditions may be waived by Buyer on or before the
Closing Date.
6. BUYER'S DELIVERIES. Provided that all other conditions to Buyer's
obligation to consummate the Closing shall have been or shall concurrently be
satisfied, Buyer shall deliver to Seller through Escrow Holder, on or before the
Closing Date, for disbursement, delivery and recordation, as provided in this
Agreement, the following funds, instruments and documents, the delivery of which
is material to the consummation of the subject transaction:
6.1. FUNDS. Immediately available funds in the amount required
of Buyer under this Agreement including sufficient funds to meet Buyer's
obligations under Sections 4.2, 9 and 10.
6.2. AUTHORITY. Evidence in form and substance reasonably
satisfactory to Seller and its legal counsel that Buyer is authorized to
enter into and consummate the transactions contemplated by this Agreement.
6.3. ASSIGNMENT OF OCCUPANCY AGREEMENTS AND SERVICE CONTRACTS.
An executed counterpart of the Assignment referenced in Section 7.5 below.
6.4. CLOSING STATEMENT. The Closing Statement summarizing the
prorations and other financial aspects of the transaction.
6.5. OTHER DOCUMENTS. Any documents reasonably required of Buyer
by Title Company or Escrow Holder in order to consummate the subject
transaction.
7. SELLER'S DELIVERIES. Provided that all other conditions to Seller's
obligation to consummate the Closing shall have been or shall concurrently be
satisfied, Seller shall deliver to Buyer through Escrow Holder on or before the
Closing, for disbursement, delivery and recordation, as provided in this
Agreement, the following instruments and documents, the delivery of which is
material to the Closing:
7.1. LIMITED WARRANTY DEED. A limited warranty deed (the "Deed")
in substantially the form set forth as EXHIBIT E attached hereto, conveying
to Buyer good and marketable fee simple title to the Real Estate, together
with all rights, members, easements and appurtenances thereto, expressly
subject to the title exceptions approved by Buyer as provided in Section
5.4 above. In addition, Seller shall deliver an executed Real Estate
Transfer Tax Declaration or local equivalent.
7.2. RELEASE OF EXISTING INDEBTEDNESS. Seller shall cause the
Property to be released from all mortgages, deeds of trust, deeds to secure
debt, security agreements, filings and statements and other security
interests relating to any existing indebtedness that is secured in whole or
in part by the Property.
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7.3. SELLER'S AFFIDAVIT. A Seller's Affidavit in the form set
forth as EXHIBIT F attached hereto and made a part hereof.
7.4. BLANKET BILL OF SALE AND TRANSFER. A blanket bill of sale,
transfer and assignment agreement (the "Bill of Sale") in substantially the
form set forth as EXHIBIT G attached hereto, assigning to Buyer all of
Seller's right, title and interest in and to any and all Personal Property.
7.5. ASSIGNMENT OF LEASES AND SERVICE CONTRACTS. An assignment
and assumption of Leases and Service Contracts and other Intangible
Property (the "Assignment") in substantially the form set forth as
EXHIBIT H attached hereto, assigning to Buyer all of Seller's right, title
and interest in and to the Leases and Service Contracts (that Buyer shall
have elected or elects to assume) and other Intangible Property with a
cross-indemnity between Seller and Buyer, with Seller indemnifying Buyer
with respect to any liability arising under the Leases and Service
Contracts for the period up to, but not including, the Closing Date, and
Buyer indemnifying Seller with respect to any liability arising under the
Leases and Service Contracts arising on and after the Closing Date,
respectively, and with an express assumption by Buyer of Seller's
obligations under the Leases and Service Contracts arising on and after the
Closing Date.
7.6. CERTIFIED RENT ROLL. Seller shall deliver to Buyer a
certificate, in substantially the form of EXHIBIT I attached hereto,
pursuant to which Seller shall certify to Buyer a then current Rent Roll
for the Property.
7.7. SELLER'S CERTIFICATE. A certificate addressed to Buyer
stating that the representations and warranties set forth in Section 14 are
true and correct as of the Closing in all material respects or stating any
exceptions thereto.
7.8. CERTIFICATE OF NON-FOREIGN STATUS. A certificate addressed
to Buyer made in compliance with Paragraph 1445 of the Internal Revenue
Code that Seller is not a foreign person and not subject to withholding
requirements.
7.9. CLOSING STATEMENT. The Closing Statement summarizing the
prorations and other financial aspects of the transaction contemplated by
this Agreement.
7.10. LEASES AND SERVICE CONTRACTS. The original Leases, Service
Contracts, Warranties, certificate(s) of occupancy, permits and licenses.
7.11. AUTHORITY. Evidence in form and substance reasonably
satisfactory to Buyer and its legal counsel that Seller is authorized to
enter into and consummate the transactions contemplated by this Agreement.
7.12. KEYS. Seller shall deliver to Buyer all of the keys in
Seller's possession to any door or lock in or on the Property.
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7.13. TENANT FILES. The current tenant files, including all
correspondence, notices, financial information, sales reports and other
information.
7.14. MATERIALS. All materials pertaining to the operation and
maintenance of the Property.
7.15. OTHER DOCUMENTS. All other documents reasonably required of
Seller by Escrow Holder in order to consummate the subject transaction.
8. CLOSING ESCROW. On the Closing Date, provided that Escrow Holder
shall have received all of the documents, instruments and funds required to be
delivered by Buyer and Seller in accordance with Articles 6 and 7 above (other
than those documents and other items specified in Sections 7.10, 7.12, 7.13 and
7.14 above, which shall be deemed delivered concurrently with delivery of
possession of the Property to Buyer), and provided that Title Company is
prepared to issue the Title Policy upon the Closing and that all other
conditions to the Closing have been satisfied (or waived by the party to this
Agreement which benefits from such condition), Escrow Holder shall promptly
perform all of the following:
8.1. RECORDING. Cause the Deed to be recorded with the real
property records of the county in which the Property is located.
8.2. BUYER'S DELIVERIES. Deliver to Seller all of the items
pursuant to Section 6 above.
8.3. SELLER'S DELIVERIES. Deliver to Buyer the Bill of Sale, the
Assignment and all of the other items pursuant to Article 7 except as
otherwise provided above.
8.4. COSTS AND PRORATIONS. Pay the costs and apply the
prorations in accordance with Articles 9 and 10 below.
8.5. ISSUANCE OF TITLE POLICY. Cause the Title Policy to be
issued and delivered to Buyer.
8.6. DISBURSEMENT OF PURCHASE PRICE. Disburse to Seller, or in
accordance with Seller's instructions (after making appropriate adjustments
for costs and prorations as provided in this Agreement), all funds
deposited with Escrow Holder by Buyer in payment of the Purchase Price.
9. COSTS. Seller shall pay (a) one-half (1/2) of Escrow Holder's fee,
(b) any documentary transfer and stamp taxes payable in connection with the
recordation of the Deed and (c) Escrow Holder's customary charges to a seller
for document drafting, recording and miscellaneous charges. Buyer shall pay (i)
one-half (1/2) of Escrow Holder's fee, (ii) the premiums and other costs for the
Title Policy, including without limitation any endorsements relating thereto,
(iii) Escrow Holder's customary charges to a buyer for document drafting,
recording and miscellaneous charges, and (iv) all costs associated with Buyer's
financing of any or all of the
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Purchase Price, including without limitation any applicable intangible taxes,
documentary stamps and recording costs and any fees for any loan, appraisal,
title insurance policy or other service.
10. PRORATIONS. The following shall be prorated between Buyer and Seller
as of 11:59 p.m. local time of the day immediately preceding the Closing Date,
on the basis of the actual number of days elapsed during the month in which the
Closing occurs: general and special county and city real property taxes and
special assessments (collectively, "Taxes") for the tax period then in effect
and insurance premiums (but only if Buyer is assuming Seller's insurance policy
or policies). Proration of Taxes shall be based on the most recent official tax
bills or notice of valuation available for the fiscal year in which the Closing
occurs, with due allowance to be made for the maximum available discount or
other exemptions to the extent permissible for said year, and to the extent the
tax bills do not accurately reflect the actual Taxes assessed against the
Property (or any portion of the Property) and allocable either to the period
before the Closing or to the period after the Closing, then Buyer and Seller
shall adjust the actual Taxes between Buyer and Seller, outside of Escrow, as
soon as reasonably possible following the Closing. In addition to the foregoing
apportionments, Seller shall receive all rents and other income accrued, and
shall pay all other expenses accrued or incurred, in connection with the
ownership or operation of Property before the Closing Date, and Buyer shall
receive all rents and other income accruing, and shall pay all other expenses
accrued or incurred, in connection with the ownership or operation of Property
on or after the Closing Date, all of which rents, other income and expenses
shall be prorated as of the Closing. Rents and other income, if any, collected
by Buyer after the Closing shall be applied first to any amounts due to Buyer
and then, to the extent such rents or other income relate to the period ending
on or before the Closing, such rents or other income shall be paid to Seller
within ten (10) days after end of the month in which such amounts were
collected. Buyer shall incur no obligation to Seller for Buyer's failure to
collect such rentals or other income. All security and any other refundable
deposits paid by tenants to Seller pursuant to tenant leases shall be delivered
by certified funds to Buyer at the Closing or, at Seller's option, credited to
Buyer against the cash portion of the Purchase Price at the Closing. Escrow
Holder shall not be concerned with any prorations that are to be made after the
Closing pursuant to this Agreement.
11. FAILURE OF ESCROW TO CLOSE. If Escrow fails to close by reason of a
failure of a Buyer's Condition in accordance with Article 5 above, or because of
a default by Seller under this Agreement, Buyer shall be entitled to the
immediate return of the Deposit upon delivery of written notice by Buyer to
Escrow Holder. If this Agreement or Escrow is terminated, Buyer shall return to
Seller, within two (2) business days after the termination of Escrow, all
documents and materials provided by Seller or its agents to Buyer or its agents
in connection with this Agreement or the Property and all copies thereof.
12. LIQUIDATED DAMAGES. THE PARTIES HAVE DISCUSSED AND NEGOTIATED IN GOOD
FAITH THE QUESTION OF THE DAMAGES THAT WOULD BE SUFFERED BY SELLER IF THE
CLOSING DOES NOT OCCUR BECAUSE BUYER BREACHES THIS AGREEMENT AND HAVE ENDEAVORED
TO REASONABLY ESTIMATE SUCH DAMAGES. THEY AGREE THAT (I) SUCH DAMAGES ARE AND
WILL BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, (II) LIQUIDATED
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DAMAGES IN THE AMOUNT OF THE DEPOSIT (AS IT MAY BE INCREASED FROM TIME TO TIME)
ARE AND WOULD BE REASONABLE AS A MEASURE OF SUCH DAMAGES, (III) IN THE EVENT OF
SUCH BREACH, SELLER SHALL BE ENTITLED TO RETAIN THE DEPOSIT AS SUCH LIQUIDATED
DAMAGES, AND (IV) IN CONSIDERATION OF THE PAYMENT OF SUCH LIQUIDATED DAMAGES,
SELLER SHALL BE DEEMED TO HAVE WAIVED ALL OTHER CLAIMS FOR DAMAGES OR RELIEF AT
LAW OR IN EQUITY ON ACCOUNT OF THE FAILURE OF THE CLOSING TO OCCUR, EXCEPT FOR:
(A) CLAIMS FOR THE RETURN OR OTHER DELIVERY OF DOCUMENTS IN CONNECTION WITH THIS
AGREEMENT; (B) ACTIONS TO EXPUNGE A LIS PENDENS OR OTHER CLOUDS ON TITLE CAUSED
BY BUYER; (C) CLAIMS ON ACCOUNT OF BUYER'S INDEMNITY OBLIGATIONS UNDER THIS
AGREEMENT, AND (D) ATTORNEYS' FEES AND COSTS INCURRED BY SELLER INCIDENT TO
CLAUSES (A) THROUGH (C). NOTWITHSTANDING THE FOREGOING, IN THE EVENT BUYER
OBJECTS TO, FAILS TO COOPERATE WITH OR OTHERWISE OPPOSES SELLER'S WITHDRAWAL OF
THE DEPOSIT OUT OF THE ESCROW, SELLER SHALL HAVE ALL OF THE REMEDIES OTHERWISE
AVAILABLE TO SELLER AT LAW OR IN EQUITY.
SELLER'S INITIALS BUYER'S INITIALS
---------- ---------
13. POSSESSION. Seller shall deliver possession of the Property to Buyer
on the Closing Date, subject to the rights of tenants.
14. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to and covenants with Buyer that the following representations and
warranties are complete and accurate as of the date of this Agreement and will
be complete and accurate as of the Closing Date:
14.1. AUTHORITY. Seller is a general partnership, duly organized,
validly existing and in good standing under the laws of the State of
Florida, and Seller has full right, power and authority to enter into this
Agreement and to perform all of the obligations and liabilities of Seller
hereunder. This Agreement has been duly and validly authorized, executed
and delivered by and on behalf of Seller and, assuming the due
authorization, execution and delivery thereof by and on behalf of Buyer,
constitutes a valid and binding obligation of Seller enforceable in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, reorganization, receivership and other similar laws affecting
the rights and remedies of creditors generally and to general equitable
principles (whether considered in a proceeding at law or in equity).
Neither the execution nor delivery of this Agreement or any other documents
executed and delivered, or to be executed and delivered, by Seller in
connection with the transactions described herein will violate any
provision of Seller's organizational documents or of any agreements,
regulations or laws to which Seller is bound.
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14.2. NO OTHER AGREEMENTS. To Seller's actual knowledge, other
than this Agreement, the Leases, the Service Contracts and the matters
identified on EXHIBIT J attached hereto, there are no leases, service
contracts, management agreements or other agreements or instruments in
force or effect that (a) grant to any person or entity any right, title,
interest or benefit in or to all or any part of the Property or (b) any
rights relating to the use, maintenance, operation, construction or
management of all or any part of the Property.
14.3. NO LITIGATION. Except as set forth in EXHIBIT K attached
hereto, Seller has no actual knowledge, nor has Seller received any notice,
of any pending litigation or proceeding brought by any person or entity or
Governmental Authority against Seller with respect to the Property.
14.4. POSSESSION. To Seller's actual knowledge, except for the
tenants in possession of the Property under the Leases, as shown in the
Rent Roll, there are no parties in possession of or claiming any possession
to any portion of the Property as lessees, tenants at sufferance,
licensees, easement holders, trespassers or otherwise.
14.5. NO ASSESSMENTS. Seller has received no notice of any (a)
assessments against the Property that are unpaid, whether or not they have
become liens, except ad valorem taxes for the current year, or (b) any
change in the assessed value or basis for levy of taxes regarding the
Property.
14.6. NOTICE OF CONDEMNATION; RIGHT OF WAY MATTERS. Seller has
received no notice of any threatened or contemplated action by any
Governmental Authority having the power of eminent domain, which might
result in any part of the Property being taken by condemnation or conveyed
in lieu thereof. Seller shall, promptly upon receiving any such notice,
give Buyer written notice thereof.
14.7. VIOLATION OF LAWS. Seller has received no notice that any
Governmental Authority has determined that there are any violations of
zoning, health, environmental, or other statutes, ordinances, or
regulations affecting the Property. In the event Seller receives notice of
any such violations prior to Closing affecting the Property, Seller shall
promptly notify Buyer thereof.
14.8. NO BANKRUPTCY. Seller is not a party to any voluntary or
involuntary proceedings in bankruptcy, reorganization or similar
proceedings under the federal bankruptcy laws or under any state laws
relating to the protection of debtors, or subject to any general assignment
for the benefit of creditors, and to Seller's actual knowledge, no such
action has been threatened.
14.9. ZONING. Seller shall, promptly upon receiving any notice of
any contemplated or threatened rezoning of the Property, give Buyer written
notice thereof.
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14.10. SERVICE CONTRACTS. Attached hereto as EXHIBIT L and
incorporated herein is a complete and accurate list of all of the Service
Contracts and as of the date of this Agreement Seller has delivered to
Buyer complete and accurate copies of all such Service Contracts. Seller
has received no notice of any default, or claim of default, on the part of
any party to any of such Service Contracts, and within five (5) business
days following mutual execution of this Agreement, Buyer shall notify
Seller of any Service Contract that Buyer wishes to assume and Seller, at
its sole cost and expense, shall terminate all other Service Contracts
within five (5) days prior to Closing in accordance with (but only to the
extent permitted under) the governing terms of the applicable Service
Contract.
14.11. LEASES. The copies of the Leases delivered or made
available by Seller to Buyer in accordance with Section 7.10 above are
complete and accurate, and there are no amendments or modifications thereto
not disclosed on the rent roll delivered in accordance with Section 7.6
above or otherwise in writing by Seller to Buyer. Seller hereby covenants
and agrees with Buyer that, so long as this Agreement remains in full force
and effect, Seller will continue to operate and manage the Property in
substantially the same manner as it has been operated and managed in the
past.
14.12. AVAILABILITY OF AGREEMENTS. Seller shall make available to
Buyer for review at Seller's offices at the Property during normal business
hours, and upon reasonable advance notice, full, true, correct and complete
copies of all Service Contracts, Leases and all written amendments,
modifications, agreements, or understandings relating thereto as are in
effect from time to time while this Agreement remains in effect.
14.13. EMPLOYEE LIABILITY. To Seller's actual knowledge, after the
Closing Buyer shall not be obligated to continue the employment of any of
the employees of Seller or Seller's property manager. To Seller's actual
knowledge, all of the employees for the Property are employees of Seller's
property manager and not of Seller.
14.14. HAZARDOUS MATERIALS. To Seller's actual knowledge, Seller
has not generated, disposed of, released or found any Hazardous Materials
(hereinafter defined) on the Property, and Seller has no actual knowledge
of the existence of any areas for the generation, storage or disposal of
any Hazardous Materials on the Property. Seller has received no notice
that any Governmental Authority has determined that there are any
violations of Environmental Laws (as hereinafter defined) affecting the
Property. In the event Seller receives notice of any such Hazardous
Materials on the Property or any such violation affecting the Property
prior to the Closing, Seller immediately shall notify Buyer thereof.
"Hazardous Materials" means petroleum, including crude oil or any fraction
thereof, asbestos, radon gas, polychlorinated biphenyls, and any other
substance identified as hazardous in the following, as the same may have
been amended: the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601, ET SEQ.; the Resource
Conservation Act of 1976, 42 U.S.C. Section 6921, ET SEQ.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601, ET SEQ.; the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section 136; the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251, ET SEQ.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, ET SEQ.;
the
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Federal Solid Waste Disposal Act, 42 U.S.C. Section 6901, ET SEQ.; the
Clean Air Act, 42 U.S.C. Section 7401, ET SEQ.; and any other legislation
or ordinance of any Governmental Authority identified by its terms as
pertaining to hazardous materials, waste or asbestos ("Environmental
Laws").
14.15. AGREEMENTS AFFECTING THE PROPERTY. Subject to the
provisions in Section 14.11 hereof, Seller hereby covenants and agrees with
Buyer that, so long as this Agreement remains in full force and effect,
Seller will not sell, assign, convey (absolutely or as security), grant a
security interest in, or otherwise encumber or dispose of, the Property (or
any interest or estate therein) without the prior written consent of the
Buyer. Seller has not executed and will execute no exclusive or other
brokerage agreements which will survive the Closing Date. Seller shall
not enter into Service Contracts from and after the date of this Agreement
without the prior written consent of Buyer, which consent may be granted or
withheld in Buyer's sole and absolute discretion; provided, however, that
Seller hereby covenants and agrees with Buyer that, so long as this
Agreement remains in full force and effect, Seller will continue to operate
and manage the Property in substantially the same manner as it has been
operated and managed in the past.
14.16. MAINTENANCE OF INSURANCE. Seller shall maintain in full
force and effect all existing policies of insurance relating to the
Property through and including the Closing Date, shall pay all premiums
with respect to such insurance on or before the due date therefor and shall
not knowingly take any action which would cause such insurance not to
remain in full force and effect or fail knowingly to take any action
required to maintain such insurance in full force and effect.
14.17. FIXTURES. All fixtures and articles of Personal Property
included in and which are part of the sale are now, and at the Closing will
be, owned by Seller free and clear of any conditional bills of sale,
chattel mortgages, security agreements or financing statements, or other
liens of security interest created by Seller, and shall be transferred to
Buyer as a part of the transaction.
14.18. SECURITY DEPOSITS. Security deposits shown in the certified
rent roll are a full, true and complete list of all of the security
deposits for the Property and are now held by Seller and Seller's property
manager under the terms of the Leases, and none have been forfeited by any
existing tenant.
14.19. Non-Foreign Status. Seller is not a "foreign person" as
that term is defined in the Internal Revenue Code of 1986, as amended, and
the regulations promulgated pursuant thereto, and Buyer has no obligation
under the Internal Revenue Code Section 1445 to withhold and pay over to
the Internal Revenue Service any part of the "amount realized" by Seller in
the transaction contemplated hereby (as such term is defined in the
regulations issued under Internal Revenue Code Section 1445).
14.20. REPRESENTATIONS, WARRANTIES AND COVENANTS RE-MADE AT
CLOSING. The foregoing warranties and representations are true, and the
foregoing covenants are in full
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force and effect and binding on Seller as of the date hereof and shall be
in full force and effect and deemed to have been automatically reaffirmed
and restated by Seller as of the Closing Date.
For purposes of this Section 14, "Seller's actual knowledge" shall mean the
knowledge of (i) J. Bradley Forrester, (ii) Ralph Tilley and (iii) Michael
Johnson without any duty of investigation or inquiry and "notice" shall mean
written notice. The representations and warranties of Seller shall survive the
Closing for six (6) months, and any claim made by Buyer against Seller with
respect thereto must be asserted within such six-month period.
15. BUYER'S REPRESENTATIONS AND WARRANTIES. The accuracy and completeness
of the following constitute a condition to the Closing, and Buyer represents and
warrants to Seller that the following is complete and accurate as of the date of
this Agreement and shall be complete and accurate as of the Closing, and shall
survive the Closing: Buyer is duly organized and validly existing and is (or
will at the Closing be) qualified to conduct its business and has the legal
power, right and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. All requisite action (corporate,
partnership, trust or otherwise) has been taken by Buyer in connection with
entering into this Agreement and the consummation of the transactions
contemplated by this Agreement. The individual executing this Agreement on
behalf of Buyer has the legal power, right and actual authority to bind Buyer to
the terms and conditions of this Agreement. This Agreement and all documents
required by this Agreement to be executed by Buyer are and are valid, legally
binding obligations of and enforceable against Buyer in accordance with their
terms. The foregoing warranties and representations are true, and the foregoing
covenants are in full force and effect and binding on Buyer as of the date
hereof and shall be in full force and effect and deemed to have been
automatically reaffirmed and restated by Buyer as of the Closing Date.
16. CONDEMNATION. If all or any material portion of the Property is taken
by eminent domain (or is the subject of a pending or contemplated taking which
has not been consummated) before the Closing, then (a) Seller, if Seller has
actual knowledge thereof, shall notify Buyer of such fact and (b) Buyer shall
have the option to terminate this Agreement upon written notice to Escrow Holder
and Seller given no later than thirty (30) business days after Seller has given
such notice. For purposes of the foregoing sentence, a portion of the Property
shall not be deemed material unless the taking thereof diminishes the rentable
area of the building or the recreation facilities or restricts access to the
Property. If this Agreement is so terminated, then (i) Buyer shall pay all
costs associated with the cancellation of the Escrow pursuant to this Section,
(ii) neither Buyer nor Seller shall have any further rights or obligations under
this Agreement (except to the extent of any indemnities under this Agreement
with respect to events occurring before such termination, which indemnities
shall survive any such termination), and (iii) Escrow Holder shall, without
requiring any further instruction from Seller, immediately return to Buyer the
Deposit and all interest accrued thereon. If Buyer does not terminate this
Agreement within such thirty-day period, then (A) Buyer shall not thereafter
have the right to terminate this Agreement by reason of such taking and
(B) Buyer and Seller shall proceed to the Closing in accordance with this
Agreement, without modification of the terms of this Agreement, except that
(1) the Property will not include the property so taken, (2) the Purchase Price
will be reduced
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by the amount of any awards for such taking awarded to Seller as of the Closing
Date, and (3) Seller shall assign and turn over to Buyer, and Buyer shall be
entitled to receive and retain, all awards for such taking not yet awarded as of
the Closing.
17. DESTRUCTION. If the Property or any portion thereof is damaged by
fire or other casualty on or before the Closing Date, Seller immediately shall
notify Buyer of such damage. If the estimated cost to repair the damage is less
than the greater of (i) $400,000 and (ii) five percent (5%) of the Purchase
Price and does not eliminate or materially impair access to the Property, Buyer
and Seller shall proceed to the Closing in accordance with the terms of this
Agreement, without modification of the terms of this Agreement, in which event
Buyer shall be entitled to an assignment of the proceeds of all insurance
relating to such fire or other casualty. If the estimated cost to repair the
damage equals or exceeds the greater of (i) $400,000 and (ii) five percent (5%)
of the Purchase Price, Buyer may elect either (a) to terminate this Agreement
and receive the return of the Deposit (minus any escrow or title cancellation
fees), in which case neither party shall have any additional rights or
obligations under this Agreement, or (b) to proceed to the Closing in accordance
with this Agreement, without modification of the terms of this Agreement, in
which event Buyer shall be entitled to an assignment of the proceeds of all
insurance relating to such fire or other casualty, if any. Such election shall
be made by Buyer within thirty (30) business days following Seller's
notification to Buyer. Buyer's failure to elect to terminate this Agreement
within such thirty-day period shall conclusively be deemed an election to
proceed to the Closing.
18. BROKERS. Each party to this Agreement represents and warrants to the
other that no real estate or business broker, agent, finder, or other person is
responsible for bringing about or negotiating this Agreement and that such party
has not dealt with any real estate broker, agent, finder or person relative to
this Agreement in any manner. Each party to this Agreement shall defend,
indemnify, and hold harmless the other party to this Agreement against all
liabilities, damages, losses, costs, expenses, attorneys' fees and claims
arising from (a) any breach of such representation by such indemnifying party
set forth in the preceding sentence, and (b) any claims that may be made against
such indemnified party by any real estate broker, agent, finder or other person
alleging to have acted on behalf of or to have dealt with such indemnifying
party.
19. NO RELIANCE - AS-IS. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT OR IN ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT HERETO, BUYER
ACKNOWLEDGES THAT IT IS PURCHASING THE PROPERTY IN RELIANCE SOLELY ON:
(I) BUYER'S INSPECTION OF THE REAL PROPERTY, THE PERSONAL PROPERTY AND THE
IMPROVEMENTS; (II) BUYER'S INDEPENDENT VERIFICATION OF THE TRUTH OF ANY
STATEMENTS CONTAINED IN THE DOCUMENTS MADE AVAILABLE TO BUYER; AND (III) THE
OPINIONS AND ADVICE OF CONSULTANTS AND ATTORNEYS ENGAGED BY BUYER CONCERNING THE
PROPERTY. BUYER FURTHER ACKNOWLEDGES THAT BEFORE ITS EXECUTION OF THIS
AGREEMENT BUYER SHALL HAVE PERFORMED OR WILL HAVE HAD AN OPPORTUNITY TO PERFORM
ALL OF ITS DUE DILIGENCE INVESTIGATIONS OF AND WITH RESPECT TO THE PROPERTY AS
BUYER DEEMS APPROPRIATE, INCLUDING ENGINEERING STUDIES, SOILS TESTS,
ENVIRONMENTAL SURVEYS AND TESTING, PHYSICAL INSPECTIONS, ALTA OR OTHER SURVEYS
AND MARKET ANALYSES AS WELL AS BUYER'S EVALUATION OF THE CONDITION AND STATUS OF
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THE PERSONAL PROPERTY AND IMPROVEMENTS AND THE OPERATION AND FUTURE PROSPECTS OF
THE PROPERTY. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN
ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT HERETO, AT THE CLOSING, BUYER
ACCEPTS THE PROPERTY AND ALL MATTERS RELATING TO THE PROPERTY IN THEIR "AS IS,"
"WHERE-IS" AND "WITH ALL FAULTS" CONDITION OR STATUS AS OF THE CLOSING DATE,
INCLUDING SUCH MATTERS AS: SOILS AND GEOLOGICAL CONDITION, TOPOGRAPHY, AREA AND
CONFIGURATION OF THE REAL PROPERTY; THE AGE AND CONDITION OF THE IMPROVEMENTS
AND PERSONAL PROPERTY; THE EXISTENCE OF ANY HAZARDOUS OR TOXIC SUBSTANCES OR
MATERIALS, CONSTRUCTION DEFECTS OR OTHER MATTERS WHICH WOULD OR COULD
NECESSITATE ABATEMENT OR REMEDIATION ACTION BY THE PROPERTY'S OWNER; ANY
PHYSICAL OR MECHANICAL DEFECTS IN THE IMPROVEMENTS OR PERSONAL PROPERTY; ANY
EASEMENT, LICENSE OR ENCROACHMENT WHICH IS NOT A MATTER OF PUBLIC RECORD,
WHETHER OR NOT VISIBLE UPON INSPECTION OF THE PROPERTY; THE ZONING AND OTHER
LAND USE REGULATIONS APPLICABLE TO THE PROPERTY; AND ANY OTHER MATTER RELATING
TO THE PROPERTY INCLUDING, BUT NOT LIMITED TO, VALUE, TITLE, INCOME,
FEASIBILITY, COST, MARKETING AND INVESTMENT RETURN. BUYER ACKNOWLEDGES AND
AGREES THAT SELLER IS NOT MAKING ANY EXPRESS OR IMPLIED WARRANTIES OR
REPRESENTATIONS OF ANY KIND OR CHARACTER WITH RESPECT TO THE PROPERTY. IN
PARTICULAR BUT NOT BY WAY OF LIMITATION OF THE FOREGOING, EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT OR IN ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT
HERETO, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, RELATING
TO COMPLIANCE OF THE IMPROVEMENTS WITH CURRENT BUILDING CODES, INCLUDING WITHOUT
LIMITATION THOSE RELATING TO UPDATED OR REVISED STANDARDS FOR PLUMBING,
ELECTRICAL, STRUCTURAL OR SEISMIC MATTERS. BUYER WARRANTS AND REPRESENTS TO
SELLER THAT BUYER HAS NOT RELIED ON AND WILL NOT RELY ON, EITHER DIRECTLY OR
INDIRECTLY, ANY WARRANTY OR REPRESENTATION OF SELLER NOT EXPLICITLY SET FORTH IN
THIS AGREEMENT.
20. INDEMNITY REGARDING INSPECTION. In consideration of Seller's
permission to Buyer and its agents to perform investigations and testing on and
about the Property prior to the Closing, Buyer shall defend, indemnify and hold
harmless Seller and Seller's partners, and their respective officers, employees,
agents, contractors, successors, assigns, and affiliates (collectively, the
"Indemnitees"), and the Property from all claims, costs, liens, actions and
judgments (including attorneys' fees and other defense costs actually incurred
by Seller) resulting from Buyer's investigation of the Property or its attempts
to obtain any regulatory approvals in connection with the Property, or otherwise
caused by Buyer or any of its employees, agents or independent contractors,
except for the non-negligent release of Hazardous Materials already on the
Property occasioned thereby. Unless and until the Closing occurs, Buyer shall
maintain all the information which it obtains in connection with the Property in
strict confidence and shall not reveal any of such information to any party
other than those parties to which it may otherwise be required to disclose in
accordance with applicable law. Buyer shall, at Buyer's sole cost, promptly
repair any damage resulting from its activities on the Property and restore the
Property to substantially the same condition as before Buyer or any of its
agents first entered the Property. If the Closing does not occur on or before
the Closing Date for any reason other than a breach of this Agreement by Seller,
Buyer shall provide Seller, at Seller's cost, copies of all third-party
engineering and environmental reports and materials derived from Buyer's
investigation of the
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Property, concurrently with reimbursement by Seller of Buyer's out-of-pocket
costs in procuring such reports and materials.
21. BUYER'S REMEDIES. In the event the transaction contemplated hereby is
not consummated as a result of Seller's default hereunder, Buyer's sole and
exclusive remedies shall be either (i) to seek from Escrow Holder the return of
the Deposit and any other documents and funds then held by Escrow Holder and
Seller shall reimburse Buyer for Buyer's reasonable and documented out-of-pocket
expenses incurred in connection with the purchase transaction contemplated under
this Agreement (but in no event to exceed one-fourth percent (1/4%) of Purchase
Price)or (ii) to seek specific performance of Seller's obligations hereunder by
delivering the Purchase Price into the Escrow; provided, however, that as
conditions precedent to such action for specific performance, [A] no uncured
default in the performance of Buyer's obligations under this Agreement shall
exist and no event shall have occurred which with the passage of time or with
notice, or both, could become such an event of default, and [B] Buyer shall not
seek to amend the Purchase Price in such action.
22. SELLER'S PARTNERS' APPROVAL. Notwithstanding anything to the contrary
contained in this Agreement, the Closing shall not occur unless and until Seller
shall have obtained written approval ("Seller's Consent") from those partners of
Seller (or those partners of the partners of Seller, as the case may be) whose
approval is legally required before Seller may sell the Property to Buyer
hereunder. Seller shall seek such approval immediately after the Escrow Opening
Date. If Seller's Consent is not obtained within twenty-one (21) days after the
Escrow Opening Date (as such period may be extended by Seller at Seller's sole
option for up to an additional forty (40) days), Seller or Buyer may terminate
this Agreement by written notice delivered to the other before Seller's Consent
is obtained, in which case Buyer shall be entitled to the return of the Deposit
and neither Buyer nor Seller shall have any further rights or obligations under
this Agreement (except to the extent of any indemnities under this Agreement
with respect to events occurring before such termination, which indemnities
shall survive any such termination and except that Seller shall reimburse Buyer
for Buyer's reasonable and documented out-of-pocket engineering and
environmental expenses (but in no event to exceed $3,600)).
23. FURTHER ASSURANCES. Each party to this Agreement shall execute and
deliver all instruments and documents and take all actions as may be reasonably
required or appropriate to carry out the purposes of this Agreement.
24. COUNTERPARTS AND EXHIBITS. This Agreement may be executed in
counterparts, each of which is deemed an original and all of which together
constitute one document. All exhibits attached to and referenced in this
Agreement are incorporated into this Agreement.
25. TIME OF ESSENCE. Time and strict and punctual performance are of the
essence with respect to each provision of this Agreement.
26. ATTORNEY'S FEES. The prevailing party in any litigation, arbitration,
mediation, bankruptcy, insolvency or other proceeding ("Proceeding") relating to
the enforcement or interpretation of this Agreement may recover from the
unsuccessful party all costs, expenses and
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<PAGE>
actual attorney's fees (including expert witness and other consultants' fees and
costs) relating to or arising out of (a) the Proceeding (whether or not the
Proceeding proceeds to judgment), and (b) any post-judgment or post-award
proceeding including, without limitation, one to enforce or collect any judgment
or award resulting from the Proceeding. All such judgments and awards shall
contain a specific provision for the recovery of all such subsequently incurred
costs, expenses and actual attorney's fees.
27. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state in which the Property is located. Each
party hereby authorizes and accepts service of process sufficient for personal
jurisdiction in any action against it as contemplated by this paragraph by
registered or certified mail, return receipt requested, postage prepaid, to its
address for the giving of notices set forth in this Agreement.
28. MODIFICATION. This Agreement may be modified only by a writing
executed by the party to this Agreement against whom enforcement of the
modification is sought.
29. PRIOR UNDERSTANDINGS. This Agreement and all documents specifically
referred to and executed in connection with this Agreement: (a) contain the
entire and final agreement of the parties to this Agreement with respect to the
subject matter of this Agreement, and (b) supersede all negotiations,
stipulations, understandings, agreements, representations and warranties, if
any, with respect to such subject matter, which precede or accompany the
execution of this Agreement.
30. INTERPRETATION. Whenever the context so requires in this Agreement,
all words used in the singular may include the plural (and vice versa) and the
word "person" includes a natural person, a corporation, a firm, a partnership, a
joint venture, a trust, an estate or any other entity. The terms "includes" and
"including" do not imply any limitation. Unless "business day " is specified,
the term "day" means a calendar day. The term "business day" means any day
other than a Saturday, Sunday or Federal or other holiday in the State in which
the Property is located. If the last day for any act falls on a day other than
a business day, the time for performance shall be extended to the next business
day. No remedy or election under this Agreement is exclusive, but rather, to
the extent permitted by applicable law, each such remedy and election is
cumulative with all other remedies at law or in equity. The paragraph headings
in this Agreement (a) are included only for convenience, (b) do not in any
manner modify or limit any of the provisions of this Agreement and (c) may not
be used in the interpretation of this Agreement. Each provision of this
Agreement is valid and enforceable to the fullest extent permitted by law. If
any provision of this Agreement (or the application of such provision to any
person or circumstance) is or becomes invalid or unenforceable, the remainder of
this Agreement, and the application of such provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected by such invalidity or unenforceability.
31. SUCCESSORS-IN-INTEREST AND ASSIGNS. Buyer may not assign its rights
under this Agreement to any person or entity without the prior written consent
of Seller, which consent may be withheld in Seller's sole and absolute
discretion; provided, however, that Buyer may assign
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<PAGE>
such rights to a subsidiary wholly-owned by Buyer upon written notice given to
Seller not less than five (5) business days prior to the Closing. No assignment
by Buyer of any of its rights or obligations under this Agreement shall relieve
Buyer of any of its obligations under this Agreement unless Seller expressly
agrees to such release in writing. Subject to the foregoing, this Agreement
shall be binding on and shall inure to the benefit of the successors-in-interest
and assigns of each party to this Agreement.
32. NOTICES. Each notice and other communication required or permitted to
be given under this Agreement ("Notice") must be in writing. Notice is duly
given to another party upon: (a) hand delivery to the other party, (b) receipt
by the other party when sent by facsimile to the address and number for such
party set forth below (provided, however, that the Notice is not effective
unless a duplicate copy of the facsimile Notice is promptly given by one of the
other methods permitted under this paragraph), (c) three business days after the
Notice has been deposited with the United States postal service as first class
certified mail, return receipt requested, postage prepaid, and addressed to the
party as set forth below, or (d) the next business day after the Notice has been
deposited with a reputable overnight delivery service, postage prepaid,
addressed to the party as set forth below with next-business-day delivery
guaranteed, provided that the sending party receives a confirmation of delivery
from the delivery-service-provider.
If to Seller:
Creekside Oaks Joint Venture
c/o Continental American Properties, Ltd.
1764 San Diego Avenue
San Diego, California 92110-1906
Attention: Scott Dupree, Esq.
Telephone: (619) 297-6771
Telecopy: (619) 294-2451
With a copy to:
Hughes Hubbard & Reed LLP
350 South Grand Avenue, Suite 3600
Los Angeles, California 90071-3442
Attention: George A. Furst, Esq.
Telephone: (213) 613-2839
Telecopy: (213) 613-2950
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<PAGE>
If to Buyer:
DOC Investors, LLC
c/o Lend Lease Real Estate Investments, Inc.
3424 Peachtree Road, N.E., Suite 800
Atlanta, Georgia 30326
Attention: Theodore Klinck
Telephone: (404) 848-8744
Telecopy: (404) 848-8930
With a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attention: William Fryer, Esq.
Telephone: (404) 572-4600
Telecopy: (404) 572-5148
If to Escrow Holder:
First American Title Insurance Company
114 East Fifth Street
Santa Ana, California 92701
Attention: Toni Rice-Groetsch
Telephone: (800) 854-3643
Telecopy: (714) 558-4702
Each party shall make a reasonable, good faith effort to ensure that it will
accept or receive Notices to it that are given in accordance with this
paragraph. A party may change its address for purposes of this paragraph by
giving the other party(ies) written notice of a new address in the manner set
forth above.
33. WAIVER. Any waiver of a default or provision under this Agreement
must be in writing. No such waiver shall constitute a waiver of any other
default or provision concerning the same or any other provision of this
Agreement. No delay or omission by a party in the exercise of any of its rights
or remedies constitutes a waiver of (or otherwise impairs) such right or remedy.
A consent to or approval of an act does not waive or render unnecessary the
consent to or approval of any other or subsequent act.
34. DRAFTING AMBIGUITIES. Each party to this Agreement and its legal
counsel have reviewed and revised this Agreement. The rule of construction that
ambiguities are to be resolved against the drafting party or in favor of the
party receiving a particular benefit under an agreement shall not be employed in
the interpretation of this Agreement or any amendment to this Agreement.
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<PAGE>
35. THIRD PARTY BENEFICIARIES. Nothing in this Agreement is intended to
confer any rights or remedies on any person other than the parties to this
Agreement and their respective successors-in-interest and permitted assignees.
36. CONCURRENT CLOSING. Notwithstanding anything to the contrary
contained in this Agreement, the Closing shall be subject to and contingent
upon, and shall occur concurrently with, the Closing of the purchase
transactions for the following properties between Seller (or entities affiliated
with Seller) and Buyer (the "Concurrent Closing Contingency"): Autumn Heights,
Lakeview Village, Las Colinas, Oaktree Village, Ponte Vedra Beach Village I,
Ponte Vedra Beach Village II, Rancho Antigua, Shadowood Village, Skyline
Village, Tierra Catalina, Village at the Foothills I, Village at the Foothills
II & III; provided, however, that in the event this purchase transaction or any
of the other purchase transactions enumerated above is terminated as a result of
(i) condemnation or (ii) damage or destruction in accordance with the applicable
purchase agreement, such purchase transaction(s) shall not be taken into account
in determining whether the Concurrent Closing Contingency shall have been
satisfied (unless the aggregate number of purchase transactions so terminated is
two or more, in which event the Concurrent Closing Contingency shall be deemed
not to have been satisfied) and provided further that in the event of (i)
condemnation or (ii) damage or destruction with respect to Shadowood
Village/Oaktree Village (the "Companion Project") whereby the purchase
transaction for the Companion Project is terminated in accordance with the
applicable purchase agreement, this purchase transaction shall also be
terminated but this purchase transaction and the purchase transaction for the
Companion Project shall be deemed to be a single purchase transaction for
purposes of determining the aggregate number of purchase transactions so
terminated. In addition, in the event this purchase transaction or any of the
other purchase transactions enumerated above does not close as a result of a
default by Buyer in the performance of its obligations under this Agreement or
any other respective purchase agreement, Seller shall be entitled (but not
obligated) to exercise its rights under Section 12 above and the corresponding
provisions of each such purchase agreement even though the Concurrent Closing
Contingency shall not have been satisfied.
37. EXCLUSIVITY. So long as this Agreement is in effect, Seller shall
not solicit, negotiate, offer or accept an offer for the purchase of the
Property (or any interest therein) for sale or contract to sell the Property (or
any interest therein) to any party other than Buyer or negotiate, solicit or
entertain any offers to purchase or sell the Property (or any interest therein).
38. CONFIDENTIALITY. Buyer and Seller agree that all documents and
information concerning the Property delivered to Buyer, the subject matter of
this Agreement and all negotiations shall remain confidential, and neither party
shall disclose any terms of this Agreement without the prior approval of the
other party except as may be required by law. Buyer and Seller shall be
entitled to disclose such information only to those parties required to know it,
including without limitation employees of either of the parties, consultants,
attorneys and accountants engaged by either Buyer or Seller, and prospective or
existing investors and lenders. This Section 38 shall expire upon the earlier
of the termination of this Agreement and the Closing.
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39. RADON DISCLOSURE. Seller is required pursuant to Section 404.056(8),
Florida Statutes, to disclose the following: 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.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SELLER:
CREEKSIDE OAKS JOINT VENTURE,
a Florida general partnership
By: ConAm Realty Investors 2, L.P.,
a California limited partnership,
its general partner
By: ConAm Property Services II, Ltd.,
a California limited partnership,
its general partner
By: Continental American Development, Inc.,
a California corporation,
its general partner
By: /s/ Scott Dupree
-------------------------
Its: Vice President
By: ConAm Property Services II, Ltd.,
a California limited partnership,
its general partner
By: Continental American Development, Inc.,
a California corporation,
its general partner
By: /s/ Scott Dupree
------------------------------
Its: Vice President
[Signatures Continued On Next Page]
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<PAGE>
BUYER:
DOC Investors, LLC,
a Delaware limited liability company
By: ConAm DOC Affiliates LLC,
a California limited liability company,
its administrative member
By: Continental American Properties, Ltd.,
a California limited partnership,
its managing member
By: DJE Financial Corp.,
a California corporation,
its general partner
By: /s/ J. Bradley Forrester
-------------------------
Its Vice President
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<PAGE>
CONSENT AND ACCEPTANCE OF ESCROW HOLDER:
The undersigned acknowledges having received an executed original of this
Agreement (or counterparts thereof) and the Deposit on January 26, 1999, which
date is the "Escrow Opening Date" for purposes of this Agreement.
The undersigned hereby consents to and accepts the instructions set forth in the
above Agreement for Purchase and Sale and Joint Escrow Instructions.
First American Title Insurance Company
By: /s/ Richard G. Hines
-----------------------------
Its: Vice President
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<PAGE>
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT SECTION
------- -------
<S> <C>
Exhibit A - Legal Description Section 1.1
Exhibit B - Schedule of Personal Property Section 1.1
Exhibit C - Due Diligence Materials Delivered to Buyer Section 5.1
Exhibit D - Disapproved Title Exceptions Section 5.4
Exhibit E - Form of Deed Section 7.1
Exhibit F - Form of Seller's Affidavit Section 7.3
Exhibit G - Bill of Sale Section 7.4
Exhibit H - Form of Assignment Section 7.5
Exhibit I - Form of Certificate for Rent Roll Section 7.6
Exhibit J - Other Agreements and Instruments Section 14.2
Exhibit K - Pending Litigation or Other Proceedings Section 14.3
Exhibit L - Schedule of Service Contracts Section 14.10
</TABLE>
<PAGE>
AGREEMENT FOR PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
PONTE VEDRA BEACH VILLAGE PHASE I
This Agreement for Purchase and Sale and Joint Escrow Instructions (this
"Agreement") is entered into as of January 26, 1999, by and between Ponte Vedra
Beach Village Joint Venture, a Florida general partnership ("Seller"), and DOC
Investors, LLC, a Delaware limited liability company ("Buyer"), who agree and,
to the extent applicable, instruct First American Title Insurance Company
("Escrow Holder" or "Title Company," as the context may require), as escrow
holder, as follows:
1. This Agreement is made with reference to the following facts:
1.1. Seller owns that certain real property located at 700 Ocean Beach
Road, Ponte Vedra Beach, Florida 32082, commonly known as Ponte Vedra
Beach Village Phase I Apartments and more fully described on EXHIBIT A
attached hereto (the "Real Property"), including without limitation all
rights, members, easements, alleys, ways, appurtenances, shrubbery, trees,
plants and privileges located thereon or appertaining thereto, together
with any and all right, title and interest in and to any land lying in the
bed or right-of-way of any street, road, alley or avenue, open or proposed,
in front of or adjoining the land to the centerline thereof, together with
any nonexclusive right to use any and all such land lying within any such
roadbed, right-of-way, street, alley or avenue for ingress and egress to
and from the land, together with any and all right, title and interest in
and to any award made or to be made in lieu thereof, and in and to any
unpaid award for damage to the land by reason of change of grade of any
street. Along with the Real Property, Buyer intends to purchase from
Seller, and Seller intends to sell to Buyer, in accordance with this
Agreement, all improvements constructed in, on or under the Real Property
including a 122-unit residential apartment complex (collectively, the
"Improvements"), all of Seller's tangible personal property located on and
used solely in connection with the Real Property or the Improvements,
including without limitation the tangible personal property identified on
EXHIBIT B attached hereto (the "Personal Property") and all intangible
personal property owned by Seller and now, or hereafter, used in connection
with the Real Property (the "Intangible Property") including, without
limitation, all (i) trade names, (ii) logos, (iii) warranties and
guaranties relating to the construction, operation, maintenance, repair and
use of the Improvements and the Personal Property, including, without
limitation, any and all equipment, HVAC systems, plumbing and roof
warranties and all contractors' and subcontractors' warranties (the
"Warranties"), (iv) certificates of occupancy (or the local equivalents),
permits, licenses, approvals and authorizations issued by any federal,
state or municipal government, branch, authority, district, agency, court,
tribunal, department, board, commission or other instrumentality
("Governmental Authority"), (v) leases and other occupancy agreements (the
"Leases"), and (vi) contracts or other similar arrangements for goods and
services (the "Service Contracts").
<PAGE>
1.2. By this Agreement, Buyer and Seller intend to provide for
the sale of the Real Property, the Improvements, the Personal Property and
the Intangible Property (collectively, the "Property") by Seller to Buyer.
2. PURCHASE AND SALE. Subject to the terms and conditions of this
Agreement, Seller agrees to sell the Property to Buyer and Buyer agrees to
purchase the Property from Seller.
3. ESCROW.
3.1. OPENING OF ESCROW. Buyer shall immediately cause an
escrow (the "Escrow") to be opened at Escrow Holder's office located at 114
East Fifth Street, Santa Ana, California 92701, Attention: Toni
Rice-Groetsch for the purpose of facilitating the consummation of this
Agreement, by delivering the Deposit (as defined in Section 4.1 below) to
Escrow Holder along with a copy of the fully executed original (or executed
counterparts) of this Agreement within two (2) business days after
executing this Agreement. Escrow Holder shall, immediately upon its receipt
of the Deposit and executed Agreement, execute and deliver to Buyer and
Seller the Consent and Acceptance of Escrow Holder attached to this
Agreement, which Consent and Acceptance of Escrow Holder shall specify the
date of such receipt (the "Escrow Opening Date"). This Agreement
constitutes instructions to Escrow Holder. Buyer and Seller shall execute
such additional mutual instructions as Escrow Holder may reasonably
require, provided that such additional instructions shall be consistent
with this Agreement. Any inconsistency between any such additional
instructions and this Agreement shall be resolved in a manner consistent
with this Agreement, and the provisions of this Agreement shall prevail
unless Buyer and Seller waive such inconsistent provision in writing by
specifically referring to the fact of such inconsistency and their intent
to waive it.
3.2. CLOSING DATE. The purchase and sale transaction
contemplated hereunder shall close in accordance with Article 8 below (the
"Closing") by 10:00 a.m. PST on the later of (i) the satisfaction of the
Concurrent Closing Contingency (as defined in Section 36 below) and (ii)
the tenth (10th) business day following the receipt of Seller's Consent (as
defined in Section 22 below) (the "Closing Date"); provided, however, that
if the Closing shall occur on the Closing Date but after 10:00 a.m. PST,
the Closing Date shall be deemed to have occurred on the date of
recordation of the Deed (hereinafter defined) for purposes of calculating
prorations under Article 10 below, and provided further that Buyer shall
have the right, exercisable on written notice given to Seller not less than
five (5) days prior to the date originally scheduled as the Closing Date,
to extend such Closing Date for up to thirty (30) days to accommodate the
requirements of Buyer's lender and provided further that in no event shall
the Closing Date occur after February 1, 1999, unless the parties otherwise
agree in writing. If the Closing does not occur on or before the Closing
Date, then Buyer or Seller, if not in default under this Agreement, may at
any time thereafter give written notice to Escrow Holder to cancel the
Escrow whereupon the Escrow and the subject transaction shall become
terminated and Escrow Holder shall distribute all monies and documents in
Escrow Holder's possession in accordance with this Agreement and all
additional mutual instructions as the parties may provide. Such
cancellation of the Escrow shall not prejudice
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<PAGE>
or limit any legal or equitable rights of Buyer or Seller, except as may be
limited by Article 12 below.
4. PURCHASE PRICE. The purchase price payable by Buyer for the Property
(the "Purchase Price") at the Closing is Seven Million Seven Hundred Thousand
and No/100 Dollars ($7,700,000.00), payable as follows:
4.1. DEPOSIT. Within three (3) business days after Buyer's
delivery of an executed copy of this Agreement to Escrow Holder, Buyer
shall deliver to Escrow Holder immediately available funds in the amount of
One Hundred Thousand and No/100 Dollars ($100,000.00) (the "Deposit").
Escrow Holder shall promptly deposit the Deposit into a federally-insured
interest-bearing account for the benefit of Buyer upon Escrow Holder's
receipt of Buyer's United States taxpayer identification number. The
Deposit, plus any interest accrued thereon, shall be applicable towards the
Purchase Price except as otherwise provided in Section 12 below.
4.2. BALANCE. Not later than one (1) business day prior to the
Closing Date, Buyer shall deposit with Escrow Holder cash or other
immediately available funds in the amount of the balance of the Purchase
Price, plus all other sums required of Buyer under this Agreement to pay
Buyer's costs and Buyer's share of prorations.
5. CONDITIONS PRECEDENT. Buyer's obligations under this Agreement are
subject to satisfaction or Buyer's written waiver of the following conditions
precedent (collectively, "Buyer's Conditions") on or before the expiration of
the applicable contingency period provided for below (collectively, the
"Contingency Periods"). If the respective Buyer's Condition has not been
satisfied or waived in writing, then at Buyer's option, this Agreement and the
Escrow shall be deemed terminated and neither Buyer nor Seller shall have any
further obligation to the other party under this Agreement (except to the extent
of any indemnities under this Agreement with respect to events occurring before
such termination, which indemnities shall survive any such termination). If
either party terminates the Escrow in accordance with the preceding sentence,
Escrow Holder shall, without requiring any further instructions, immediately
return the Deposit plus any interest accrued thereon to Buyer.
5.1. DUE DILIGENCE DELIVERIES BY SELLER. Buyer acknowledges
that Seller prior to the date of this Agreement has provided to Buyer
copies of, or access to, the items identified on EXHIBIT C attached hereto
and that such items are the only items that Buyer has requested from Seller
for Buyer's examination and review of the Property and all aspects thereof.
5.2. DUE DILIGENCE INVESTIGATION. Buyer acknowledges that it
has investigated, reviewed and approved (or has had an adequate opportunity
to investigate and review and accordingly approves) the physical,
developmental and economic status and feasibility of the Property,
including without limitation marketing studies, land use and legal due
diligence, engineering studies, soils tests, physical inspections and
environmental surveys with respect to the Property. In order to facilitate
Buyer's investigation and analysis, Seller
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<PAGE>
has granted and will continue to grant to Buyer the right to enter the Property
at any time during normal business hours upon forty-eight (48) hours' prior
written notice to Seller, to conduct such inspections, reviews, examinations and
tests on the Property as Buyer has deemed necessary or desirable to investigate
the physical condition of the Property, as well as access to relevant
information relating to the Property within Seller's possession or under
Seller's control (but Seller has made and now makes no representation or
warranty regarding the accuracy or completeness of such information). Buyer
further acknowledges that it is acquiring the Property in its "as-is" condition
in accordance with Section 19 below.
5.3. SELLER'S CONSENT. Seller shall have obtained Seller's
Consent in accordance with Article 22 below.
5.4. STATUS OF TITLE AND SURVEY. If Buyer intends to obtain
extended coverage title insurance in connection with this Agreement, then
Buyer shall obtain at its sole cost and expense an as-built survey of the
Property complying with 1992 ALTA/ACSM minimum standards (the "Survey").
Buyer acknowledges that Buyer has approved the exceptions to title shown in
that certain preliminary title report or owner's title commitment for the
Property issued by the Title Company (the "Title Report") and matters shown
on the Survey (if any) other than those exceptions or matters identified on
EXHIBIT D attached hereto ("Disapproved Title Exceptions"), which
Disapproved Title Exceptions Seller shall remove (or cause to be removed)
as exceptions to title prior to the Closing. Buyer shall have the
continuing right to update the Title Report and the Survey from time to
time and to give Seller notice of any additional Disapproved Title
Exceptions first arising after the date of the Title Report or the Survey,
as the case may be. Within ten (10) business days following receipt of any
written notice of such additional Disapproved Title Exceptions from Buyer,
Seller shall notify Buyer in writing of which of such additional
Disapproved Title Exceptions Seller will agree to cure on or before the
Closing Date; provided, however, that Seller shall satisfy and correct, at
or before the Closing, any Disapproved Title Exceptions constituting a
mortgage, deed of trust or other lien encumbering all or any portion of the
Property (other than liens created by Buyer's acts or omissions) or
otherwise created by Seller's acts or omissions on or after the date of
this Agreement ("Mandatory Cure Items"). In the event Seller elects not to
satisfy or cure any such additional Disapproved Title Exceptions of which
it is so notified, then, within ten (10) business days following receipt of
Seller's election, Buyer shall by written notice to Seller elect one of the
following:
5.4.1. To waive such additional Disapproved Title Exceptions and
to close the transaction contemplated hereby in accordance with the
terms of this Agreement; provided, however, that with respect to any
Disapproved Title Exception which is a Mandatory Cure Item, Buyer
shall be entitled to satisfy or remove any such Disapproved Title
Exception(s) at the Closing and to credit against the Purchase Price
the amount required to satisfy or remove such Mandatory Cure Item(s);
or
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<PAGE>
5.4.2. To terminate this Agreement, in which event Buyer shall
be entitled to the immediate return of the Deposit and the parties
hereto shall have no further rights, duties or obligations under this
Agreement, except those rights, duties and obligations that, by the
express terms hereof, survive termination of this Agreement.
5.5. OWNER'S POLICY. On or before the Closing, the Title Company must
be prepared to issue to Buyer an Owner's Policy of Title Insurance for the
Property (the "Title Policy") effective as of the Closing, insuring Buyer
in the amount of the Purchase Price that title to the Property is vested in
Buyer at the Closing, subject only to (a) standard pre-printed exceptions
(other than those preprinted exceptions that can be removed with a
customary seller's affidavit), (b) liens for taxes and assessments not yet
delinquent, (c) those exceptions to title described in the corresponding
Title Report other than the Disapproved Title Exceptions and (d) exceptions
created or suffered by Buyer. Buyer may require a policy without a generic
survey exception only if Buyer can timely provide Title Company with all
information necessary in order for the policy to be issued on or before the
Closing Date. Seller shall not suffer any liability in connection with its
failure to remove any title exception; Buyer's sole remedy for Seller's
failure to cause the elimination of a Disapproved Title Exception shall be
termination of this Agreement. Notwithstanding the foregoing, Seller shall
cause the removal of any Mandatory Cure Item at or before the Closing.
5.6. SELLER'S FINANCIAL CONDITION. Seller has not (i) made an
assignment for the benefit of creditors, (ii) filed a petition in
bankruptcy, (iii) been adjudicated insolvent or bankrupt, (iv) petitioned a
court for the appointment of any receiver of or trustee for it or any
substantial part of its property, (v) commenced any proceeding relating to
Seller under any reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect. There shall not have been commenced and be pending
against Seller any proceeding of the nature described in the first
sentence of this Section 5.6. No order for relief shall have been entered
with respect to Seller under the Federal Bankruptcy Code.
5.7. COVENANTS, REPRESENTATIONS AND WARRANTIES. Seller shall have
complied, and at Closing shall then be in compliance, with each and all of
its covenants contained in this Agreement in all material respects, and the
representations and warranties set forth in Paragraph 7 hereof shall be
true, complete and accurate as of the Closing Date in all material
respects.
5.8. SELLER'S DELIVERIES. Seller shall have delivered to Buyer, in
form and substance in accordance with the requirements herein, all
instruments and documents required on Seller's part to effectuate this
Agreement and the transactions contemplated hereby.
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<PAGE>
Except for the Buyer's Condition referenced in Section 5.3 above, which is a
condition to Buyer's and Seller's obligations under this Agreement, any one or
more of the foregoing Buyer's Conditions may be waived by Buyer on or before the
Closing Date.
6. BUYER'S DELIVERIES. Provided that all other conditions to Buyer's
obligation to consummate the Closing shall have been or shall concurrently be
satisfied, Buyer shall deliver to Seller through Escrow Holder, on or before the
Closing Date, for disbursement, delivery and recordation, as provided in this
Agreement, the following funds, instruments and documents, the delivery of which
is material to the consummation of the subject transaction:
6.1. FUNDS. Immediately available funds in the amount required
of Buyer under this Agreement including sufficient funds to meet Buyer's
obligations under Sections 4.2, 9 and 10.
6.2. AUTHORITY. Evidence in form and substance reasonably
satisfactory to Seller and its legal counsel that Buyer is authorized to
enter into and consummate the transactions contemplated by this Agreement.
6.3. ASSIGNMENT OF OCCUPANCY AGREEMENTS AND SERVICE CONTRACTS.
An executed counterpart of the Assignment referenced in Section 7.5 below.
6.4. CLOSING STATEMENT. The Closing Statement summarizing the
prorations and other financial aspects of the transaction.
6.5. OTHER DOCUMENTS. Any documents reasonably required of
Buyer by Title Company or Escrow Holder in order to consummate the subject
transaction.
7. SELLER'S DELIVERIES. Provided that all other conditions to Seller's
obligation to consummate the Closing shall have been or shall concurrently be
satisfied, Seller shall deliver to Buyer through Escrow Holder on or before the
Closing, for disbursement, delivery and recordation, as provided in this
Agreement, the following instruments and documents, the delivery of which is
material to the Closing:
7.1. LIMITED WARRANTY DEED. A limited warranty deed (the
"Deed") in substantially the form set forth as EXHIBIT E attached hereto,
conveying to Buyer good and marketable fee simple title to the Real Estate,
together with all rights, members, easements and appurtenances thereto,
expressly subject to the title exceptions approved by Buyer as provided in
Section 5.4 above. In addition, Seller shall deliver an executed Real
Estate Transfer Tax Declaration or local equivalent.
7.2. RELEASE OF EXISTING INDEBTEDNESS. Seller shall cause the
Property to be released from all mortgages, deeds of trust, deeds to secure
debt, security agreements, filings and statements and other security
interests relating to any existing indebtedness that is secured in whole or
in part by the Property.
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7.3. SELLER'S AFFIDAVIT. A Seller's Affidavit in the form set
forth as EXHIBIT F attached hereto and made a part hereof.
7.4. BLANKET BILL OF SALE AND TRANSFER. A blanket bill of
sale, transfer and assignment agreement (the "Bill of Sale") in
substantially the form set forth as EXHIBIT G attached hereto, assigning to
Buyer all of Seller's right, title and interest in and to any and all
Personal Property.
7.5. ASSIGNMENT OF LEASES AND SERVICE CONTRACTS. An assignment
and assumption of Leases and Service Contracts and other Intangible
Property (the "Assignment") in substantially the form set forth as
EXHIBIT H attached hereto, assigning to Buyer all of Seller's right, title
and interest in and to the Leases and Service Contracts (that Buyer shall
have elected or elects to assume) and other Intangible Property with a
cross-indemnity between Seller and Buyer, with Seller indemnifying Buyer
with respect to any liability arising under the Leases and Service
Contracts for the period up to, but not including, the Closing Date, and
Buyer indemnifying Seller with respect to any liability arising under the
Leases and Service Contracts arising on and after the Closing Date,
respectively, and with an express assumption by Buyer of Seller's
obligations under the Leases and Service Contracts arising on and after the
Closing Date.
7.6. CERTIFIED RENT ROLL. Seller shall deliver to Buyer a
certificate, in substantially the form of EXHIBIT I attached hereto,
pursuant to which Seller shall certify to Buyer a then current Rent Roll
for the Property.
7.7. SELLER'S CERTIFICATE. A certificate addressed to Buyer
stating that the representations and warranties set forth in Section 14 are
true and correct as of the Closing in all material respects or stating any
exceptions thereto.
7.8. CERTIFICATE OF NON-FOREIGN STATUS. A certificate
addressed to Buyer made in compliance with Paragraph 1445 of the Internal
Revenue Code that Seller is not a foreign person and not subject to
withholding requirements.
7.9. CLOSING STATEMENT. The Closing Statement summarizing the
prorations and other financial aspects of the transaction contemplated by
this Agreement.
7.10. LEASES AND SERVICE CONTRACTS. The original Leases,
Service Contracts, Warranties, certificate(s) of occupancy, permits and
licenses.
7.11. AUTHORITY. Evidence in form and substance reasonably
satisfactory to Buyer and its legal counsel that Seller is authorized to
enter into and consummate the transactions contemplated by this Agreement.
7.12. KEYS. Seller shall deliver to Buyer all of the keys in
Seller's possession to any door or lock in or on the Property.
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7.13. TENANT FILES. The current tenant files, including all
correspondence, notices, financial information, sales reports and other
information.
7.14. MATERIALS. All materials pertaining to the operation and
maintenance of the Property.
7.15. OTHER DOCUMENTS. All other documents reasonably required
of Seller by Escrow Holder in order to consummate the subject transaction.
8. CLOSING ESCROW. On the Closing Date, provided that Escrow Holder
shall have received all of the documents, instruments and funds required to be
delivered by Buyer and Seller in accordance with Articles 6 and 7 above (other
than those documents and other items specified in Sections 7.10, 7.12, 7.13 and
7.14 above, which shall be deemed delivered concurrently with delivery of
possession of the Property to Buyer), and provided that Title Company is
prepared to issue the Title Policy upon the Closing and that all other
conditions to the Closing have been satisfied (or waived by the party to this
Agreement which benefits from such condition), Escrow Holder shall promptly
perform all of the following:
8.1. RECORDING. Cause the Deed to be recorded with the real
property records of the county in which the Property is located.
8.2. BUYER'S DELIVERIES. Deliver to Seller all of the items
pursuant to Section 6 above.
8.3. SELLER'S DELIVERIES. Deliver to Buyer the Bill of Sale,
the Assignment and all of the other items pursuant to Article 7 except as
otherwise provided above.
8.4. COSTS AND PRORATIONS. Pay the costs and apply the
prorations in accordance with Articles 9 and 10 below.
8.5. ISSUANCE OF TITLE POLICY. Cause the Title Policy to be
issued and delivered to Buyer.
8.6. DISBURSEMENT OF PURCHASE PRICE. Disburse to Seller, or in
accordance with Seller's instructions (after making appropriate adjustments
for costs and prorations as provided in this Agreement), all funds
deposited with Escrow Holder by Buyer in payment of the Purchase Price.
9. COSTS. Seller shall pay (a) one-half (1/2) of Escrow Holder's fee,
(b) any documentary transfer and stamp taxes payable in connection with the
recordation of the Deed and (c) Escrow Holder's customary charges to a seller
for document drafting, recording and miscellaneous charges. Buyer shall pay (i)
one-half (1/2) of Escrow Holder's fee, (ii) the premiums and other costs for the
Title Policy, including without limitation any endorsements relating thereto,
(iii) Escrow Holder's customary charges to a buyer for document drafting,
recording and miscellaneous charges, and (iv) all costs associated with Buyer's
financing of any or all of the
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Purchase Price, including without limitation any applicable intangible taxes,
documentary stamps and recording costs and any fees for any loan, appraisal,
title insurance policy or other service.
10. PRORATIONS. The following shall be prorated between Buyer and Seller
as of 11:59 p.m. local time of the day immediately preceding the Closing Date,
on the basis of the actual number of days elapsed during the month in which the
Closing occurs: general and special county and city real property taxes and
special assessments (collectively, "Taxes") for the tax period then in effect
and insurance premiums (but only if Buyer is assuming Seller's insurance policy
or policies). Proration of Taxes shall be based on the most recent official tax
bills or notice of valuation available for the fiscal year in which the Closing
occurs, with due allowance to be made for the maximum available discount or
other exemptions to the extent permissible for said year, and to the extent the
tax bills do not accurately reflect the actual Taxes assessed against the
Property (or any portion of the Property) and allocable either to the period
before the Closing or to the period after the Closing, then Buyer and Seller
shall adjust the actual Taxes between Buyer and Seller, outside of Escrow, as
soon as reasonably possible following the Closing. In addition to the foregoing
apportionments, Seller shall receive all rents and other income accrued, and
shall pay all other expenses accrued or incurred, in connection with the
ownership or operation of Property before the Closing Date, and Buyer shall
receive all rents and other income accruing, and shall pay all other expenses
accrued or incurred, in connection with the ownership or operation of Property
on or after the Closing Date, all of which rents, other income and expenses
shall be prorated as of the Closing. Rents and other income, if any, collected
by Buyer after the Closing shall be applied first to any amounts due to Buyer
and then, to the extent such rents or other income relate to the period ending
on or before the Closing, such rents or other income shall be paid to Seller
within ten (10) days after end of the month in which such amounts were
collected. Buyer shall incur no obligation to Seller for Buyer's failure to
collect such rentals or other income. All security and any other refundable
deposits paid by tenants to Seller pursuant to tenant leases shall be delivered
by certified funds to Buyer at the Closing or, at Seller's option, credited to
Buyer against the cash portion of the Purchase Price at the Closing. Escrow
Holder shall not be concerned with any prorations that are to be made after the
Closing pursuant to this Agreement.
11. FAILURE OF ESCROW TO CLOSE. If Escrow fails to close by reason of a
failure of a Buyer's Condition in accordance with Article 5 above, or because of
a default by Seller under this Agreement, Buyer shall be entitled to the
immediate return of the Deposit upon delivery of written notice by Buyer to
Escrow Holder. If this Agreement or Escrow is terminated, Buyer shall return to
Seller, within two (2) business days after the termination of Escrow, all
documents and materials provided by Seller or its agents to Buyer or its agents
in connection with this Agreement or the Property and all copies thereof.
12. LIQUIDATED DAMAGES. THE PARTIES HAVE DISCUSSED AND NEGOTIATED IN GOOD
FAITH THE QUESTION OF THE DAMAGES THAT WOULD BE SUFFERED BY SELLER IF THE
CLOSING DOES NOT OCCUR BECAUSE BUYER BREACHES THIS AGREEMENT AND HAVE ENDEAVORED
TO REASONABLY ESTIMATE SUCH DAMAGES. THEY AGREE THAT (I) SUCH DAMAGES ARE AND
WILL BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, (II) LIQUIDATED
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DAMAGES IN THE AMOUNT OF THE DEPOSIT (AS IT MAY BE INCREASED FROM TIME TO TIME)
ARE AND WOULD BE REASONABLE AS A MEASURE OF SUCH DAMAGES, (III) IN THE EVENT OF
SUCH BREACH, SELLER SHALL BE ENTITLED TO RETAIN THE DEPOSIT AS SUCH LIQUIDATED
DAMAGES, AND (IV) IN CONSIDERATION OF THE PAYMENT OF SUCH LIQUIDATED DAMAGES,
SELLER SHALL BE DEEMED TO HAVE WAIVED ALL OTHER CLAIMS FOR DAMAGES OR RELIEF AT
LAW OR IN EQUITY ON ACCOUNT OF THE FAILURE OF THE CLOSING TO OCCUR, EXCEPT FOR:
(A) CLAIMS FOR THE RETURN OR OTHER DELIVERY OF DOCUMENTS IN CONNECTION WITH THIS
AGREEMENT; (B) ACTIONS TO EXPUNGE A LIS PENDENS OR OTHER CLOUDS ON TITLE CAUSED
BY BUYER; (C) CLAIMS ON ACCOUNT OF BUYER'S INDEMNITY OBLIGATIONS UNDER THIS
AGREEMENT, AND (D) ATTORNEYS' FEES AND COSTS INCURRED BY SELLER INCIDENT TO
CLAUSES (A) THROUGH (C). NOTWITHSTANDING THE FOREGOING, IN THE EVENT BUYER
OBJECTS TO, FAILS TO COOPERATE WITH OR OTHERWISE OPPOSES SELLER'S WITHDRAWAL OF
THE DEPOSIT OUT OF THE ESCROW, SELLER SHALL HAVE ALL OF THE REMEDIES OTHERWISE
AVAILABLE TO SELLER AT LAW OR IN EQUITY.
SELLER'S INITIALS BUYER'S INITIALS
---------- ---------
13. POSSESSION. Seller shall deliver possession of the Property to Buyer
on the Closing Date, subject to the rights of tenants.
14. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to and covenants with Buyer that the following representations and
warranties are complete and accurate as of the date of this Agreement and will
be complete and accurate as of the Closing Date:
14.1. AUTHORITY. Seller is a general partnership, duly
organized, validly existing and in good standing under the laws of the
State of Florida, and Seller has full right, power and authority to enter
into this Agreement and to perform all of the obligations and liabilities
of Seller hereunder. This Agreement has been duly and validly authorized,
executed and delivered by and on behalf of Seller and, assuming the due
authorization, execution and delivery thereof by and on behalf of Buyer,
constitutes a valid and binding obligation of Seller enforceable in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, reorganization, receivership and other similar laws affecting
the rights and remedies of creditors generally and to general equitable
principles (whether considered in a proceeding at law or in equity).
Neither the execution nor delivery of this Agreement or any other documents
executed and delivered, or to be executed and delivered, by Seller in
connection with the transactions described herein will violate any
provision of Seller's organizational documents or of any agreements,
regulations or laws to which Seller is bound.
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14.2. NO OTHER AGREEMENTS. To Seller's actual knowledge, other
than this Agreement, the Leases, the Service Contracts and the matters
identified on EXHIBIT J attached hereto, there are no leases, service
contracts, management agreements or other agreements or instruments in
force or effect that (a) grant to any person or entity any right, title,
interest or benefit in or to all or any part of the Property or (b) any
rights relating to the use, maintenance, operation, construction or
management of all or any part of the Property.
14.3. NO LITIGATION. Except as set forth in EXHIBIT K attached
hereto, Seller has no actual knowledge, nor has Seller received any notice,
of any pending litigation or proceeding brought by any person or entity or
Governmental Authority against Seller with respect to the Property.
14.4. POSSESSION. To Seller's actual knowledge, except for the
tenants in possession of the Property under the Leases, as shown in the
Rent Roll, there are no parties in possession of or claiming any possession
to any portion of the Property as lessees, tenants at sufferance,
licensees, easement holders, trespassers or otherwise.
14.5. NO ASSESSMENTS. Seller has received no notice of any (a)
assessments against the Property that are unpaid, whether or not they have
become liens, except ad valorem taxes for the current year, or (b) any
change in the assessed value or basis for levy of taxes regarding the
Property.
14.6. NOTICE OF CONDEMNATION; RIGHT OF WAY MATTERS. Seller has
received no notice of any threatened or contemplated action by any
Governmental Authority having the power of eminent domain, which might
result in any part of the Property being taken by condemnation or conveyed
in lieu thereof. Seller shall, promptly upon receiving any such notice,
give Buyer written notice thereof.
14.7. VIOLATION OF LAWS. Seller has received no notice that any
Governmental Authority has determined that there are any violations of
zoning, health, environmental, or other statutes, ordinances, or
regulations affecting the Property. In the event Seller receives notice of
any such violations prior to Closing affecting the Property, Seller shall
promptly notify Buyer thereof.
14.8. NO BANKRUPTCY. Seller is not a party to any voluntary or
involuntary proceedings in bankruptcy, reorganization or similar
proceedings under the federal bankruptcy laws or under any state laws
relating to the protection of debtors, or subject to any general assignment
for the benefit of creditors, and to Seller's actual knowledge, no such
action has been threatened.
14.9. ZONING. Seller shall, promptly upon receiving any notice
of any contemplated or threatened rezoning of the Property, give Buyer
written notice thereof.
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14.10. SERVICE CONTRACTS. Attached hereto as EXHIBIT L and
incorporated herein is a complete and accurate list of all of the Service
Contracts and as of the date of this Agreement Seller has delivered to
Buyer complete and accurate copies of all such Service Contracts. Seller
has received no notice of any default, or claim of default, on the part of
any party to any of such Service Contracts, and within five (5) business
days following mutual execution of this Agreement, Buyer shall notify
Seller of any Service Contract that Buyer wishes to assume and Seller, at
its sole cost and expense, shall terminate all other Service Contracts
within five (5) days prior to Closing in accordance with (but only to the
extent permitted under) the governing terms of the applicable Service
Contract.
14.11. LEASES. The copies of the Leases delivered or made
available by Seller to Buyer in accordance with Section 7.10 above are
complete and accurate, and there are no amendments or modifications thereto
not disclosed on the rent roll delivered in accordance with Section 7.6
above or otherwise in writing by Seller to Buyer. Seller hereby covenants
and agrees with Buyer that, so long as this Agreement remains in full force
and effect, Seller will continue to operate and manage the Property in
substantially the same manner as it has been operated and managed in the
past.
14.12. AVAILABILITY OF AGREEMENTS. Seller shall make
available to Buyer for review at Seller's offices at the Property during
normal business hours, and upon reasonable advance notice, full, true,
correct and complete copies of all Service Contracts, Leases and all
written amendments, modifications, agreements, or understandings relating
thereto as are in effect from time to time while this Agreement remains in
effect.
14.13. EMPLOYEE LIABILITY. To Seller's actual knowledge,
after the Closing Buyer shall not be obligated to continue the employment
of any of the employees of Seller or Seller's property manager. To
Seller's actual knowledge, all of the employees for the Property are
employees of Seller's property manager and not of Seller.
14.14. HAZARDOUS MATERIALS. To Seller's actual knowledge,
Seller has not generated, disposed of, released or found any Hazardous
Materials (hereinafter defined) on the Property, and Seller has no actual
knowledge of the existence of any areas for the generation, storage or
disposal of any Hazardous Materials on the Property. Seller has received
no notice that any Governmental Authority has determined that there are any
violations of Environmental Laws (as hereinafter defined) affecting the
Property. In the event Seller receives notice of any such Hazardous
Materials on the Property or any such violation affecting the Property
prior to the Closing, Seller immediately shall notify Buyer thereof.
"Hazardous Materials" means petroleum, including crude oil or any fraction
thereof, asbestos, radon gas, polychlorinated biphenyls, and any other
substance identified as hazardous in the following, as the same may have
been amended: the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601, ET SEQ.; the Resource
Conservation Act of 1976, 42 U.S.C. Section 6921, ET SEQ.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601, ET SEQ.; the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section 136; the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251, ET SEQ.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, ET SEQ.;
the
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Federal Solid Waste Disposal Act, 42 U.S.C. Section 6901, ET SEQ.; the
Clean Air Act, 42 U.S.C. Section 7401, ET SEQ.; and any other legislation
or ordinance of any Governmental Authority identified by its terms as
pertaining to hazardous materials, waste or asbestos ("Environmental
Laws").
14.15. AGREEMENTS AFFECTING THE PROPERTY. Subject to the
provisions in Section 14.11 hereof, Seller hereby covenants and agrees with
Buyer that, so long as this Agreement remains in full force and effect,
Seller will not sell, assign, convey (absolutely or as security), grant a
security interest in, or otherwise encumber or dispose of, the Property (or
any interest or estate therein) without the prior written consent of the
Buyer. Seller has not executed and will execute no exclusive or other
brokerage agreements which will survive the Closing Date. Seller shall
not enter into Service Contracts from and after the date of this Agreement
without the prior written consent of Buyer, which consent may be granted or
withheld in Buyer's sole and absolute discretion; provided, however, that
Seller hereby covenants and agrees with Buyer that, so long as this
Agreement remains in full force and effect, Seller will continue to operate
and manage the Property in substantially the same manner as it has been
operated and managed in the past.
14.16. MAINTENANCE OF INSURANCE. Seller shall maintain in
full force and effect all existing policies of insurance relating to the
Property through and including the Closing Date, shall pay all premiums
with respect to such insurance on or before the due date therefor and shall
not knowingly take any action which would cause such insurance not to
remain in full force and effect or fail knowingly to take any action
required to maintain such insurance in full force and effect.
14.17. FIXTURES. All fixtures and articles of Personal
Property included in and which are part of the sale are now, and at the
Closing will be, owned by Seller free and clear of any conditional bills of
sale, chattel mortgages, security agreements or financing statements, or
other liens of security interest created by Seller, and shall be
transferred to Buyer as a part of the transaction.
14.18. SECURITY DEPOSITS. Security deposits shown in the
certified rent roll are a full, true and complete list of all of the
security deposits for the Property and are now held by Seller and Seller's
property manager under the terms of the Leases, and none have been
forfeited by any existing tenant.
14.19. NON-FOREIGN STATUS. Seller is not a "foreign person"
as that term is defined in the Internal Revenue Code of 1986, as amended,
and the regulations promulgated pursuant thereto, and Buyer has no
obligation under the Internal Revenue Code Section 1445 to withhold and pay
over to the Internal Revenue Service any part of the "amount realized" by
Seller in the transaction contemplated hereby (as such term is defined in
the regulations issued under Internal Revenue Code Section 1445).
14.20. REPRESENTATIONS, WARRANTIES AND COVENANTS RE-MADE AT
CLOSING. The foregoing warranties and representations are true, and the
foregoing covenants are in full
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force and effect and binding on Seller as of the date hereof and shall be
in full force and effect and deemed to have been automatically reaffirmed
and restated by Seller as of the Closing Date.
For purposes of this Section 14, "Seller's actual knowledge" shall mean the
knowledge of (i) J. Bradley Forrester, (ii) Ralph Tilley and (iii) Michael
Johnson without any duty of investigation or inquiry and "notice" shall mean
written notice. The representations and warranties of Seller shall survive the
Closing for six (6) months, and any claim made by Buyer against Seller with
respect thereto must be asserted within such six-month period.
15. BUYER'S REPRESENTATIONS AND WARRANTIES. The accuracy and completeness
of the following constitute a condition to the Closing, and Buyer represents and
warrants to Seller that the following is complete and accurate as of the date of
this Agreement and shall be complete and accurate as of the Closing, and shall
survive the Closing: Buyer is duly organized and validly existing and is (or
will at the Closing be) qualified to conduct its business and has the legal
power, right and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. All requisite action (corporate,
partnership, trust or otherwise) has been taken by Buyer in connection with
entering into this Agreement and the consummation of the transactions
contemplated by this Agreement. The individual executing this Agreement on
behalf of Buyer has the legal power, right and actual authority to bind Buyer to
the terms and conditions of this Agreement. This Agreement and all documents
required by this Agreement to be executed by Buyer are and are valid, legally
binding obligations of and enforceable against Buyer in accordance with their
terms. The foregoing warranties and representations are true, and the foregoing
covenants are in full force and effect and binding on Buyer as of the date
hereof and shall be in full force and effect and deemed to have been
automatically reaffirmed and restated by Buyer as of the Closing Date.
16. CONDEMNATION. If all or any material portion of the Property is taken
by eminent domain (or is the subject of a pending or contemplated taking which
has not been consummated) before the Closing, then (a) Seller, if Seller has
actual knowledge thereof, shall notify Buyer of such fact and (b) Buyer shall
have the option to terminate this Agreement upon written notice to Escrow Holder
and Seller given no later than thirty (30) business days after Seller has given
such notice. For purposes of the foregoing sentence, a portion of the Property
shall not be deemed material unless the taking thereof diminishes the rentable
area of the building or the recreation facilities or restricts access to the
Property. If this Agreement is so terminated, then (i) Buyer shall pay all
costs associated with the cancellation of the Escrow pursuant to this Section,
(ii) neither Buyer nor Seller shall have any further rights or obligations under
this Agreement (except to the extent of any indemnities under this Agreement
with respect to events occurring before such termination, which indemnities
shall survive any such termination), and (iii) Escrow Holder shall, without
requiring any further instruction from Seller, immediately return to Buyer the
Deposit and all interest accrued thereon. If Buyer does not terminate this
Agreement within such thirty-day period, then (A) Buyer shall not thereafter
have the right to terminate this Agreement by reason of such taking and
(B) Buyer and Seller shall proceed to the Closing in accordance with this
Agreement, without modification of the terms of this Agreement, except that
(1) the Property will not include the property so taken, (2) the Purchase Price
will be reduced
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by the amount of any awards for such taking awarded to Seller as of the Closing
Date, and (3) Seller shall assign and turn over to Buyer, and Buyer shall be
entitled to receive and retain, all awards for such taking not yet awarded as of
the Closing.
17. DESTRUCTION. If the Property or any portion thereof is damaged by
fire or other casualty on or before the Closing Date, Seller immediately shall
notify Buyer of such damage. If the estimated cost to repair the damage is less
than the greater of (i) $400,000 and (ii) five percent (5%) of the Purchase
Price and does not eliminate or materially impair access to the Property, Buyer
and Seller shall proceed to the Closing in accordance with the terms of this
Agreement, without modification of the terms of this Agreement, in which event
Buyer shall be entitled to an assignment of the proceeds of all insurance
relating to such fire or other casualty. If the estimated cost to repair the
damage equals or exceeds the greater of (i) $400,000 and (ii) five percent (5%)
of the Purchase Price, Buyer may elect either (a) to terminate this Agreement
and receive the return of the Deposit (minus any escrow or title cancellation
fees), in which case neither party shall have any additional rights or
obligations under this Agreement, or (b) to proceed to the Closing in accordance
with this Agreement, without modification of the terms of this Agreement, in
which event Buyer shall be entitled to an assignment of the proceeds of all
insurance relating to such fire or other casualty, if any. Such election shall
be made by Buyer within thirty (30) business days following Seller's
notification to Buyer. Buyer's failure to elect to terminate this Agreement
within such thirty-day period shall conclusively be deemed an election to
proceed to the Closing.
18. BROKERS. Each party to this Agreement represents and warrants to the
other that no real estate or business broker, agent, finder, or other person is
responsible for bringing about or negotiating this Agreement and that such party
has not dealt with any real estate broker, agent, finder or person relative to
this Agreement in any manner. Each party to this Agreement shall defend,
indemnify, and hold harmless the other party to this Agreement against all
liabilities, damages, losses, costs, expenses, attorneys' fees and claims
arising from (a) any breach of such representation by such indemnifying party
set forth in the preceding sentence, and (b) any claims that may be made against
such indemnified party by any real estate broker, agent, finder or other person
alleging to have acted on behalf of or to have dealt with such indemnifying
party.
19. NO RELIANCE - AS-IS. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT OR IN ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT HERETO, BUYER
ACKNOWLEDGES THAT IT IS PURCHASING THE PROPERTY IN RELIANCE SOLELY ON:
(I) BUYER'S INSPECTION OF THE REAL PROPERTY, THE PERSONAL PROPERTY AND THE
IMPROVEMENTS; (II) BUYER'S INDEPENDENT VERIFICATION OF THE TRUTH OF ANY
STATEMENTS CONTAINED IN THE DOCUMENTS MADE AVAILABLE TO BUYER; AND (III) THE
OPINIONS AND ADVICE OF CONSULTANTS AND ATTORNEYS ENGAGED BY BUYER CONCERNING THE
PROPERTY. BUYER FURTHER ACKNOWLEDGES THAT BEFORE ITS EXECUTION OF THIS
AGREEMENT BUYER SHALL HAVE PERFORMED OR WILL HAVE HAD AN OPPORTUNITY TO PERFORM
ALL OF ITS DUE DILIGENCE INVESTIGATIONS OF AND WITH RESPECT TO THE PROPERTY AS
BUYER DEEMS APPROPRIATE, INCLUDING ENGINEERING STUDIES, SOILS TESTS,
ENVIRONMENTAL SURVEYS AND TESTING, PHYSICAL INSPECTIONS, ALTA OR OTHER SURVEYS
AND MARKET ANALYSES AS WELL AS BUYER'S EVALUATION OF THE CONDITION AND STATUS OF
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THE PERSONAL PROPERTY AND IMPROVEMENTS AND THE OPERATION AND FUTURE PROSPECTS OF
THE PROPERTY. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN
ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT HERETO, AT THE CLOSING, BUYER
ACCEPTS THE PROPERTY AND ALL MATTERS RELATING TO THE PROPERTY IN THEIR "AS IS,"
"WHERE-IS" AND "WITH ALL FAULTS" CONDITION OR STATUS AS OF THE CLOSING DATE,
INCLUDING SUCH MATTERS AS: SOILS AND GEOLOGICAL CONDITION, TOPOGRAPHY, AREA AND
CONFIGURATION OF THE REAL PROPERTY; THE AGE AND CONDITION OF THE IMPROVEMENTS
AND PERSONAL PROPERTY; THE EXISTENCE OF ANY HAZARDOUS OR TOXIC SUBSTANCES OR
MATERIALS, CONSTRUCTION DEFECTS OR OTHER MATTERS WHICH WOULD OR COULD
NECESSITATE ABATEMENT OR REMEDIATION ACTION BY THE PROPERTY'S OWNER; ANY
PHYSICAL OR MECHANICAL DEFECTS IN THE IMPROVEMENTS OR PERSONAL PROPERTY; ANY
EASEMENT, LICENSE OR ENCROACHMENT WHICH IS NOT A MATTER OF PUBLIC RECORD,
WHETHER OR NOT VISIBLE UPON INSPECTION OF THE PROPERTY; THE ZONING AND OTHER
LAND USE REGULATIONS APPLICABLE TO THE PROPERTY; AND ANY OTHER MATTER RELATING
TO THE PROPERTY INCLUDING, BUT NOT LIMITED TO, VALUE, TITLE, INCOME,
FEASIBILITY, COST, MARKETING AND INVESTMENT RETURN. BUYER ACKNOWLEDGES AND
AGREES THAT SELLER IS NOT MAKING ANY EXPRESS OR IMPLIED WARRANTIES OR
REPRESENTATIONS OF ANY KIND OR CHARACTER WITH RESPECT TO THE PROPERTY. IN
PARTICULAR BUT NOT BY WAY OF LIMITATION OF THE FOREGOING, EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT OR IN ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT
HERETO, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, RELATING
TO COMPLIANCE OF THE IMPROVEMENTS WITH CURRENT BUILDING CODES, INCLUDING WITHOUT
LIMITATION THOSE RELATING TO UPDATED OR REVISED STANDARDS FOR PLUMBING,
ELECTRICAL, STRUCTURAL OR SEISMIC MATTERS. BUYER WARRANTS AND REPRESENTS TO
SELLER THAT BUYER HAS NOT RELIED ON AND WILL NOT RELY ON, EITHER DIRECTLY OR
INDIRECTLY, ANY WARRANTY OR REPRESENTATION OF SELLER NOT EXPLICITLY SET FORTH IN
THIS AGREEMENT.
20. INDEMNITY REGARDING INSPECTION. In consideration of Seller's
permission to Buyer and its agents to perform investigations and testing on and
about the Property prior to the Closing, Buyer shall defend, indemnify and hold
harmless Seller and Seller's partners, and their respective officers, employees,
agents, contractors, successors, assigns, and affiliates (collectively, the
"Indemnitees"), and the Property from all claims, costs, liens, actions and
judgments (including attorneys' fees and other defense costs actually incurred
by Seller) resulting from Buyer's investigation of the Property or its attempts
to obtain any regulatory approvals in connection with the Property, or otherwise
caused by Buyer or any of its employees, agents or independent contractors,
except for the non-negligent release of Hazardous Materials already on the
Property occasioned thereby. Unless and until the Closing occurs, Buyer shall
maintain all the information which it obtains in connection with the Property in
strict confidence and shall not reveal any of such information to any party
other than those parties to which it may otherwise be required to disclose in
accordance with applicable law. Buyer shall, at Buyer's sole cost, promptly
repair any damage resulting from its activities on the Property and restore the
Property to substantially the same condition as before Buyer or any of its
agents first entered the Property. If the Closing does not occur on or before
the Closing Date for any reason other than a breach of this Agreement by Seller,
Buyer shall provide Seller, at Seller's cost, copies of all third-party
engineering and environmental reports and materials derived from Buyer's
investigation of the
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Property, concurrently with reimbursement by Seller of Buyer's out-of-pocket
costs in procuring such reports and materials.
21. BUYER'S REMEDIES. In the event the transaction contemplated hereby is
not consummated as a result of Seller's default hereunder, Buyer's sole and
exclusive remedies shall be either (i) to seek from Escrow Holder the return of
the Deposit and any other documents and funds then held by Escrow Holder and
Seller shall reimburse Buyer for Buyer's reasonable and documented out-of-pocket
expenses incurred in connection with the purchase transaction contemplated under
this Agreement (but in no event to exceed one-fourth percent (1/4%) of Purchase
Price)or (ii) to seek specific performance of Seller's obligations hereunder by
delivering the Purchase Price into the Escrow; provided, however, that as
conditions precedent to such action for specific performance, [A] no uncured
default in the performance of Buyer's obligations under this Agreement shall
exist and no event shall have occurred which with the passage of time or with
notice, or both, could become such an event of default, and [B] Buyer shall not
seek to amend the Purchase Price in such action.
22. SELLER'S PARTNERS' APPROVAL. Notwithstanding anything to the contrary
contained in this Agreement, the Closing shall not occur unless and until Seller
shall have obtained written approval ("Seller's Consent") from those partners of
Seller (or those partners of the partners of Seller, as the case may be) whose
approval is legally required before Seller may sell the Property to Buyer
hereunder. Seller shall seek such approval immediately after the Escrow Opening
Date. If Seller's Consent is not obtained within twenty-one (21) days after the
Escrow Opening Date (as such period may be extended by Seller at Seller's sole
option for up to an additional forty (40) days), Seller or Buyer may terminate
this Agreement by written notice delivered to the other before Seller's Consent
is obtained, in which case Buyer shall be entitled to the return of the Deposit
and neither Buyer nor Seller shall have any further rights or obligations under
this Agreement (except to the extent of any indemnities under this Agreement
with respect to events occurring before such termination, which indemnities
shall survive any such termination and except that Seller shall reimburse Buyer
for Buyer's reasonable and documented out-of-pocket engineering and
environmental expenses (but in no event to exceed $3,600)).
23. FURTHER ASSURANCES. Each party to this Agreement shall execute and
deliver all instruments and documents and take all actions as may be reasonably
required or appropriate to carry out the purposes of this Agreement.
24. COUNTERPARTS AND EXHIBITS. This Agreement may be executed in
counterparts, each of which is deemed an original and all of which together
constitute one document. All exhibits attached to and referenced in this
Agreement are incorporated into this Agreement.
25. TIME OF ESSENCE. Time and strict and punctual performance are of the
essence with respect to each provision of this Agreement.
26. ATTORNEY'S FEES. The prevailing party in any litigation, arbitration,
mediation, bankruptcy, insolvency or other proceeding ("Proceeding") relating to
the enforcement or interpretation of this Agreement may recover from the
unsuccessful party all costs, expenses and
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actual attorney's fees (including expert witness and other consultants' fees and
costs) relating to or arising out of (a) the Proceeding (whether or not the
Proceeding proceeds to judgment), and (b) any post-judgment or post-award
proceeding including, without limitation, one to enforce or collect any judgment
or award resulting from the Proceeding. All such judgments and awards shall
contain a specific provision for the recovery of all such subsequently incurred
costs, expenses and actual attorney's fees.
27. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state in which the Property is located. Each
party hereby authorizes and accepts service of process sufficient for personal
jurisdiction in any action against it as contemplated by this paragraph by
registered or certified mail, return receipt requested, postage prepaid, to its
address for the giving of notices set forth in this Agreement.
28. MODIFICATION. This Agreement may be modified only by a writing
executed by the party to this Agreement against whom enforcement of the
modification is sought.
29. PRIOR UNDERSTANDINGS. This Agreement and all documents specifically
referred to and executed in connection with this Agreement: (a) contain the
entire and final agreement of the parties to this Agreement with respect to the
subject matter of this Agreement, and (b) supersede all negotiations,
stipulations, understandings, agreements, representations and warranties, if
any, with respect to such subject matter, which precede or accompany the
execution of this Agreement.
30. INTERPRETATION. Whenever the context so requires in this Agreement,
all words used in the singular may include the plural (and vice versa) and the
word "person" includes a natural person, a corporation, a firm, a partnership, a
joint venture, a trust, an estate or any other entity. The terms "includes" and
"including" do not imply any limitation. Unless "business day " is specified,
the term "day" means a calendar day. The term "business day" means any day
other than a Saturday, Sunday or Federal or other holiday in the State in which
the Property is located. If the last day for any act falls on a day other than
a business day, the time for performance shall be extended to the next business
day. No remedy or election under this Agreement is exclusive, but rather, to
the extent permitted by applicable law, each such remedy and election is
cumulative with all other remedies at law or in equity. The paragraph headings
in this Agreement (a) are included only for convenience, (b) do not in any
manner modify or limit any of the provisions of this Agreement and (c) may not
be used in the interpretation of this Agreement. Each provision of this
Agreement is valid and enforceable to the fullest extent permitted by law. If
any provision of this Agreement (or the application of such provision to any
person or circumstance) is or becomes invalid or unenforceable, the remainder of
this Agreement, and the application of such provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected by such invalidity or unenforceability.
31. SUCCESSORS-IN-INTEREST AND ASSIGNS. Buyer may not assign its rights
under this Agreement to any person or entity without the prior written consent
of Seller, which consent may be withheld in Seller's sole and absolute
discretion; provided, however, that Buyer may assign
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such rights to a subsidiary wholly-owned by Buyer upon written notice given to
Seller not less than five (5) business days prior to the Closing. No assignment
by Buyer of any of its rights or obligations under this Agreement shall relieve
Buyer of any of its obligations under this Agreement unless Seller expressly
agrees to such release in writing. Subject to the foregoing, this Agreement
shall be binding on and shall inure to the benefit of the successors-in-interest
and assigns of each party to this Agreement.
32. NOTICES. Each notice and other communication required or permitted to
be given under this Agreement ("Notice") must be in writing. Notice is duly
given to another party upon: (a) hand delivery to the other party, (b) receipt
by the other party when sent by facsimile to the address and number for such
party set forth below (provided, however, that the Notice is not effective
unless a duplicate copy of the facsimile Notice is promptly given by one of the
other methods permitted under this paragraph), (c) three business days after the
Notice has been deposited with the United States postal service as first class
certified mail, return receipt requested, postage prepaid, and addressed to the
party as set forth below, or (d) the next business day after the Notice has been
deposited with a reputable overnight delivery service, postage prepaid,
addressed to the party as set forth below with next-business-day delivery
guaranteed, provided that the sending party receives a confirmation of delivery
from the delivery-service-provider.
If to Seller:
Ponte Vedra Beach Village Joint Venture
c/o Continental American Properties, Ltd.
1764 San Diego Avenue
San Diego, California 92110-1906
Attention: Scott Dupree, Esq.
Telephone: (619) 297-6771
Telecopy: (619) 294-2451
With a copy to:
Hughes Hubbard & Reed LLP
350 South Grand Avenue, Suite 3600
Los Angeles, California 90071-3442
Attention: George A. Furst, Esq.
Telephone: (213) 613-2839
Telecopy: (213) 613-2950
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If to Buyer:
DOC Investors, LLC
c/o Lend Lease Real Estate Investments, Inc.
3424 Peachtree Road, N.E., Suite 800
Atlanta, Georgia 30326
Attention: Theodore Klinck
Telephone: (404) 848-8744
Telecopy: (404) 848-8930
With a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attention: William Fryer, Esq.
Telephone: (404) 572-4600
Telecopy: (404) 572-5148
If to Escrow Holder:
First American Title Insurance Company
114 East Fifth Street
Santa Ana, California 92701
Attention: Toni Rice-Groetsch
Telephone: (800) 854-3643
Telecopy: (714) 558-4702
Each party shall make a reasonable, good faith effort to ensure that it will
accept or receive Notices to it that are given in accordance with this
paragraph. A party may change its address for purposes of this paragraph by
giving the other party(ies) written notice of a new address in the manner set
forth above.
33. WAIVER. Any waiver of a default or provision under this Agreement
must be in writing. No such waiver shall constitute a waiver of any other
default or provision concerning the same or any other provision of this
Agreement. No delay or omission by a party in the exercise of any of its rights
or remedies constitutes a waiver of (or otherwise impairs) such right or remedy.
A consent to or approval of an act does not waive or render unnecessary the
consent to or approval of any other or subsequent act.
34. DRAFTING AMBIGUITIES. Each party to this Agreement and its legal
counsel have reviewed and revised this Agreement. The rule of construction that
ambiguities are to be resolved against the drafting party or in favor of the
party receiving a particular benefit under an agreement shall not be employed in
the interpretation of this Agreement or any amendment to this Agreement.
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<PAGE>
35. THIRD PARTY BENEFICIARIES. Nothing in this Agreement is intended to
confer any rights or remedies on any person other than the parties to this
Agreement and their respective successors-in-interest and permitted assignees.
36. CONCURRENT CLOSING. Notwithstanding anything to the contrary
contained in this Agreement, the Closing shall be subject to and contingent
upon, and shall occur concurrently with, the Closing of the purchase
transactions for the following properties between Seller (or entities affiliated
with Seller) and Buyer (the "Concurrent Closing Contingency"): Autumn Heights,
Creekside Oaks, Lakeview Village, Las Colinas, Oaktree Village, Ponte Vedra
Beach Village II, Rancho Antigua, Shadowood Village, Skyline Village, Tierra
Catalina, Village at the Foothills I, Village at the Foothills II & III;
provided, however, that in the event this purchase transaction or any of the
other purchase transactions enumerated above is terminated as a result of (i)
condemnation or (ii) damage or destruction in accordance with the applicable
purchase agreement, such purchase transaction(s) shall not be taken into account
in determining whether the Concurrent Closing Contingency shall have been
satisfied (unless the aggregate number of purchase transactions so terminated is
two or more, in which event the Concurrent Closing Contingency shall be deemed
not to have been satisfied) and provided further that in the event of (i)
condemnation or (ii) damage or destruction with respect to Ponte Vedra Beach
Village Phase II (the "Companion Project") whereby the purchase transaction for
the Companion Project is terminated in accordance with the applicable purchase
agreement, this purchase transaction shall also be terminated but this purchase
transaction and the purchase transaction for the Companion Project shall be
deemed to be a single purchase transaction for purposes of determining the
aggregate number of purchase transactions so terminated. In addition, in the
event this purchase transaction or any of the other purchase transactions
enumerated above does not close as a result of a default by Buyer in the
performance of its obligations under this Agreement or any other respective
purchase agreement, Seller shall be entitled (but not obligated) to exercise its
rights under Section 12 above and the corresponding provisions of each such
purchase agreement even though the Concurrent Closing Contingency shall not have
been satisfied.
37. EXCLUSIVITY. So long as this Agreement is in effect, Seller shall
not solicit, negotiate, offer or accept an offer for the purchase of the
Property (or any interest therein) for sale or contract to sell the Property (or
any interest therein) to any party other than Buyer or negotiate, solicit or
entertain any offers to purchase or sell the Property (or any interest therein).
38. CONFIDENTIALITY. Buyer and Seller agree that all documents and
information concerning the Property delivered to Buyer, the subject matter of
this Agreement and all negotiations shall remain confidential, and neither party
shall disclose any terms of this Agreement without the prior approval of the
other party except as may be required by law. Buyer and Seller shall be
entitled to disclose such information only to those parties required to know it,
including without limitation employees of either of the parties, consultants,
attorneys and accountants engaged by either Buyer or Seller, and prospective or
existing investors and lenders. This Section 38 shall expire upon the earlier
of the termination of this Agreement and the Closing.
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39. RADON DISCLOSURE. Seller is required pursuant to Section 404.056(8),
Florida Statutes, to disclose the following: 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SELLER:
PONTE VEDRA BEACH VILLAGE JOINT VENTURE,
a Florida general partnership
By: ConAm Realty Investors 2, L.P.,
a California limited partnership,
its general partner
By: ConAm Property Services II, Ltd.,
a California limited partnership,
its general partner
By: Continental American Development, Inc.,
a California corporation, its general partner
By: /s/ Scott Dupree
---------------------------
Its: Vice President
By: ConAm Property Services II, Ltd.,
a California limited partnership
its general partner
By: Continental American Development, Inc.,
a California corporation, its general partner
By: /s/ Scott Dupree
---------------------------
Its: Vice President
[Signatures Continued On Next Page]
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BUYER:
DOC Investors, LLC,
a Delaware limited liability company
By: ConAm DOC Affiliates LLC,
a California limited liability company,
its administrative member
By: Continental American Properties, Ltd.,
a California limited partnership,
its managing member
By: DJE Financial Corp.,
a California corporation,
its general partner
By: /s/ J. Bradley Forrester
--------------------------------
Its Vice President
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<PAGE>
CONSENT AND ACCEPTANCE OF ESCROW HOLDER:
The undersigned acknowledges having received an executed original of this
Agreement (or counterparts thereof) and the Deposit on January 26, 1999, which
date is the "Escrow Opening Date" for purposes of this Agreement.
The undersigned hereby consents to and accepts the instructions set forth in the
above Agreement for Purchase and Sale and Joint Escrow Instructions.
First American Title Insurance Company
By: /s/ Richard G. Hines
----------------------------
Its: Vice President
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INDEX OF EXHIBITS
EXHIBIT SECTION
------- -------
Exhibit A - Legal Description Section 1.1
Exhibit B - Schedule of Personal Property Section 1.1
Exhibit C - Due Diligence Materials Delivered to Buyer Section 5.1
Exhibit D - Disapproved Title Exceptions Section 5.4
Exhibit E - Form of Deed Section 7.1
Exhibit F - Form of Seller's Affidavit Section 7.3
Exhibit G - Bill of Sale Section 7.4
Exhibit H - Form of Assignment Section 7.5
Exhibit I - Form of Certificate for Rent Roll Section 7.6
Exhibit J - Other Agreements and Instruments Section 14.2
Exhibit K - Pending Litigation or Other Proceedings Section 14.3
Exhibit L - Schedule of Service Contracts Section 14.10
<PAGE>
AGREEMENT FOR PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
RANCHO ANTIGUA
This Agreement for Purchase and Sale and Joint Escrow Instructions (this
"Agreement") is entered into as of January 26, 1999, by and between Rancho
Antigua Joint Venture, an Arizona joint venture partnership ("Seller"), and DOC
Investors, LLC, a Delaware limited liability company ("Buyer"), who agree and,
to the extent applicable, instruct First American Title Insurance Company
("Escrow Holder" or "Title Company," as the context may require), as escrow
holder, as follows:
1. This Agreement is made with reference to the following facts:
1.1. Seller owns that certain real property located at 8787 E.
Mountain View Road, Scottsdale, Arizona 85258, commonly known as Rancho
Antigua Apartments and more fully described on EXHIBIT A attached hereto
(the "Real Property"), including without limitation all rights, members,
easements, alleys, ways, appurtenances, shrubbery, trees, plants and
privileges located thereon or appertaining thereto, together with any and
all right, title and interest in and to any land lying in the bed or
right-of-way of any street, road, alley or avenue, open or proposed, in
front of or adjoining the land to the centerline thereof, together with any
nonexclusive right to use any and all such land lying within any such
roadbed, right-of-way, street, alley or avenue for ingress and egress to
and from the land, together with any and all right, title and interest in
and to any award made or to be made in lieu thereof, and in and to any
unpaid award for damage to the land by reason of change of grade of any
street. Along with the Real Property, Buyer intends to purchase from
Seller, and Seller intends to sell to Buyer, in accordance with this
Agreement, all improvements constructed in, on or under the Real Property
including a 220-unit residential apartment complex (collectively, the
"Improvements"), all of Seller's tangible personal property located on and
used solely in connection with the Real Property or the Improvements,
including without limitation the tangible personal property identified on
EXHIBIT B attached hereto (the "Personal Property") and all intangible
personal property owned by Seller and now, or hereafter, used in connection
with the Real Property (the "Intangible Property") including, without
limitation, all (i) trade names, (ii) logos, (iii) warranties and
guaranties relating to the construction, operation, maintenance, repair and
use of the Improvements and the Personal Property, including, without
limitation, any and all equipment, HVAC systems, plumbing and roof
warranties and all contractors' and subcontractors' warranties (the
"Warranties"), (iv) certificates of occupancy (or the local equivalents),
permits, licenses, approvals and authorizations issued by any federal,
state or municipal government, branch, authority, district, agency, court,
tribunal, department, board, commission or other instrumentality
("Governmental Authority"), (v) leases and other occupancy agreements (the
"Leases"), and (vi) contracts or other similar arrangements for goods and
services (the "Service Contracts").
<PAGE>
1.2. By this Agreement, Buyer and Seller intend to provide for
the sale of the Real Property, the Improvements, the Personal Property and
the Intangible Property (collectively, the "Property") by Seller to Buyer.
2. PURCHASE AND SALE. Subject to the terms and conditions of this
Agreement, Seller agrees to sell the Property to Buyer and Buyer agrees to
purchase the Property from Seller.
3. ESCROW.
3.1. OPENING OF ESCROW. Buyer shall immediately cause an escrow
(the "Escrow") to be opened at Escrow Holder's office located at 114 East
Fifth Street, Santa Ana, California 92701, Attention: Toni Rice-Groetsch
for the purpose of facilitating the consummation of this Agreement, by
delivering the Deposit (as defined in Section 4.1 below) to Escrow Holder
along with a copy of the fully executed original (or executed counterparts)
of this Agreement within two (2) business days after executing this
Agreement. Escrow Holder shall, immediately upon its receipt of the Deposit
and executed Agreement, execute and deliver to Buyer and Seller the Consent
and Acceptance of Escrow Holder attached to this Agreement, which Consent
and Acceptance of Escrow Holder shall specify the date of such receipt (the
"Escrow Opening Date"). This Agreement constitutes instructions to Escrow
Holder. Buyer and Seller shall execute such additional mutual instructions
as Escrow Holder may reasonably require, provided that such additional
instructions shall be consistent with this Agreement. Any inconsistency
between any such additional instructions and this Agreement shall be
resolved in a manner consistent with this Agreement, and the provisions of
this Agreement shall prevail unless Buyer and Seller waive such
inconsistent provision in writing by specifically referring to the fact of
such inconsistency and their intent to waive it.
3.2. CLOSING DATE. The purchase and sale transaction
contemplated hereunder shall close in accordance with Article 8 below (the
"Closing") by 10:00 a.m. PST on the later of (i) the satisfaction of the
Concurrent Closing Contingency (as defined in Section 36 below) and (ii)
the tenth (10th) business day following the receipt of Seller's Consent (as
defined in Section 22 below) (the "Closing Date"); provided, however, that
if the Closing shall occur on the Closing Date but after 10:00 a.m. PST,
the Closing Date shall be deemed to have occurred on the date of
recordation of the Deed (hereinafter defined) for purposes of calculating
prorations under Article 10 below, and provided further that Buyer shall
have the right, exercisable on written notice given to Seller not less than
five (5) days prior to the date originally scheduled as the Closing Date,
to extend such Closing Date for up to thirty (30) days to accommodate the
requirements of Buyer's lender and provided further that in no event shall
the Closing Date occur after February 1, 1999, unless the parties otherwise
agree in writing. If the Closing does not occur on or before the Closing
Date, then Buyer or Seller, if not in default under this Agreement, may at
any time thereafter give written notice to Escrow Holder to cancel the
Escrow whereupon the Escrow and the subject transaction shall become
terminated and Escrow Holder shall distribute all monies and documents in
Escrow Holder's possession in accordance with this Agreement and all
additional mutual instructions as the parties may provide. Such
cancellation of the Escrow shall not prejudice
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or limit any legal or equitable rights of Buyer or Seller, except as may be
limited by Article 12 below.
4. PURCHASE PRICE. The purchase price payable by Buyer for the Property
(the "Purchase Price") at the Closing is Thirteen Million Seven Hundred Thousand
and No/100 Dollars ($13,700,000.00), payable as follows:
4.1. DEPOSIT. Within three (3) business days after Buyer's
delivery of an executed copy of this Agreement to Escrow Holder, Buyer
shall deliver to Escrow Holder immediately available funds in the amount of
One Hundred Thirty-Seven Thousand and No/100 Dollars ($137,000.00) (the
"Deposit"). Escrow Holder shall promptly deposit the Deposit into a
federally-insured interest-bearing account for the benefit of Buyer upon
Escrow Holder's receipt of Buyer's United States taxpayer identification
number. The Deposit, plus any interest accrued thereon, shall be
applicable towards the Purchase Price except as otherwise provided in
Section 12 below.
4.2. BALANCE. Not later than one (1) business day prior to the
Closing Date, Buyer shall deposit with Escrow Holder cash or other
immediately available funds in the amount of the balance of the Purchase
Price, plus all other sums required of Buyer under this Agreement to pay
Buyer's costs and Buyer's share of prorations.
5. CONDITIONS PRECEDENT. Buyer's obligations under this Agreement are
subject to satisfaction or Buyer's written waiver of the following conditions
precedent (collectively, "Buyer's Conditions") on or before the expiration of
the applicable contingency period provided for below (collectively, the
"Contingency Periods"). If the respective Buyer's Condition has not been
satisfied or waived in writing, then at Buyer's option, this Agreement and the
Escrow shall be deemed terminated and neither Buyer nor Seller shall have any
further obligation to the other party under this Agreement (except to the extent
of any indemnities under this Agreement with respect to events occurring before
such termination, which indemnities shall survive any such termination). If
either party terminates the Escrow in accordance with the preceding sentence,
Escrow Holder shall, without requiring any further instructions, immediately
return the Deposit plus any interest accrued thereon to Buyer.
5.1. DUE DILIGENCE DELIVERIES BY SELLER. Buyer acknowledges that
Seller prior to the date of this Agreement has provided to Buyer copies of,
or access to, the items identified on EXHIBIT C attached hereto and that
such items are the only items that Buyer has requested from Seller for
Buyer's examination and review of the Property and all aspects thereof.
5.2. DUE DILIGENCE INVESTIGATION. Buyer acknowledges that it has
investigated, reviewed and approved (or has had an adequate opportunity to
investigate and review and accordingly approves) the physical,
developmental and economic status and feasibility of the Property,
including without limitation marketing studies, land use and legal due
diligence, engineering studies, soils tests, physical inspections and
environmental surveys with respect to the Property. In order to facilitate
Buyer's investigation and analysis, Seller
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<PAGE>
has granted and will continue to grant to Buyer the right to enter the
Property at any time during normal business hours upon forty-eight (48)
hours' prior written notice to Seller, to conduct such inspections,
reviews, examinations and tests on the Property as Buyer has deemed
necessary or desirable to investigate the physical condition of the
Property, as well as access to relevant information relating to the
Property within Seller's possession or under Seller's control (but Seller
has made and now makes no representation or warranty regarding the accuracy
or completeness of such information). Buyer further acknowledges that it
is acquiring the Property in its "as-is" condition in accordance with
Section 19 below.
5.3. SELLER'S CONSENT. Seller shall have obtained Seller's
Consent in accordance with Article 22 below.
5.4. STATUS OF TITLE AND SURVEY. If Buyer intends to obtain
extended coverage title insurance in connection with this Agreement, then
Buyer shall obtain at its sole cost and expense an as-built survey of the
Property complying with 1992 ALTA/ACSM minimum standards (the "Survey").
Buyer acknowledges that Buyer has approved the exceptions to title shown in
that certain preliminary title report or owner's title commitment for the
Property issued by the Title Company (the "Title Report") and matters shown
on the Survey (if any) other than those exceptions or matters identified on
EXHIBIT D attached hereto ("Disapproved Title Exceptions"), which
Disapproved Title Exceptions Seller shall remove (or cause to be removed)
as exceptions to title prior to the Closing. Buyer shall have the
continuing right to update the Title Report and the Survey from time to
time and to give Seller notice of any additional Disapproved Title
Exceptions first arising after the date of the Title Report or the Survey,
as the case may be. Within ten (10) business days following receipt of any
written notice of such additional Disapproved Title Exceptions from Buyer,
Seller shall notify Buyer in writing of which of such additional
Disapproved Title Exceptions Seller will agree to cure on or before the
Closing Date; provided, however, that Seller shall satisfy and correct, at
or before the Closing, any Disapproved Title Exceptions constituting a
mortgage, deed of trust or other lien encumbering all or any portion of the
Property (other than liens created by Buyer's acts or omissions) or
otherwise created by Seller's acts or omissions on or after the date of
this Agreement ("Mandatory Cure Items"). In the event Seller elects not to
satisfy or cure any such additional Disapproved Title Exceptions of which
it is so notified, then, within ten (10) business days following receipt of
Seller's election, Buyer shall by written notice to Seller elect one of the
following:
5.4.1. To waive such additional Disapproved Title
Exceptions and to close the transaction contemplated hereby in
accordance with the terms of this Agreement; provided, however,
that with respect to any Disapproved Title Exception which is a
Mandatory Cure Item, Buyer shall be entitled to satisfy or remove
any such Disapproved Title Exception(s) at the Closing and to
credit against the Purchase Price the amount required to satisfy or
remove such Mandatory Cure Item(s); or
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5.4.2. To terminate this Agreement, in which event Buyer
shall be entitled to the immediate return of the Deposit and the
parties hereto shall have no further rights, duties or obligations
under this Agreement, except those rights, duties and obligations
that, by the express terms hereof, survive termination of this
Agreement.
5.5. OWNER'S POLICY. On or before the Closing, the Title Company
must be prepared to issue to Buyer an Owner's Policy of Title Insurance for
the Property (the "Title Policy") effective as of the Closing, insuring
Buyer in the amount of the Purchase Price that title to the Property is
vested in Buyer at the Closing, subject only to (a) standard pre-printed
exceptions (other than those preprinted exceptions that can be removed with
a customary seller's affidavit), (b) liens for taxes and assessments not
yet delinquent, (c) those exceptions to title described in the
corresponding Title Report other than the Disapproved Title Exceptions and
(d) exceptions created or suffered by Buyer. Buyer may require an extended
coverage policy without a generic survey exception only if Buyer can timely
provide Title Company with all information necessary in order for the
extended coverage policy to be issued on or before the Closing Date.
Seller shall not suffer any liability in connection with its failure to
remove any title exception; Buyer's sole remedy for Seller's failure to
cause the elimination of a Disapproved Title Exception shall be termination
of this Agreement. Notwithstanding the foregoing, Seller shall cause the
removal of any Mandatory Cure Item at or before the Closing.
5.6. SELLER'S FINANCIAL CONDITION. Seller has not (i) made an
assignment for the benefit of creditors, (ii) filed a petition in
bankruptcy, (iii) been adjudicated insolvent or bankrupt, (iv) petitioned a
court for the appointment of any receiver of or trustee for it or any
substantial part of its property, (v) commenced any proceeding relating to
Seller under any reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect. There shall not have been commenced and be pending
against Seller any proceeding of the nature described in the first
sentence of this Section 5.6. No order for relief shall have been entered
with respect to Seller under the Federal Bankruptcy Code.
5.7. COVENANTS, REPRESENTATIONS AND WARRANTIES. Seller shall
have complied, and at Closing shall then be in compliance, with each and
all of its covenants contained in this Agreement in all material respects,
and the representations and warranties set forth in Paragraph 7 hereof
shall be true, complete and accurate as of the Closing Date in all material
respects.
5.8. SELLER'S DELIVERIES. Seller shall have delivered to Buyer,
in form and substance in accordance with the requirements herein, all
instruments and documents required on Seller's part to effectuate this
Agreement and the transactions contemplated hereby.
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Except for the Buyer's Condition referenced in Section 5.3 above, which is a
condition to Buyer's and Seller's obligations under this Agreement, any one or
more of the foregoing Buyer's Conditions may be waived by Buyer on or before the
Closing Date.
6. BUYER'S DELIVERIES. Provided that all other conditions to Buyer's
obligation to consummate the Closing shall have been or shall concurrently be
satisfied, Buyer shall deliver to Seller through Escrow Holder, on or before the
Closing Date, for disbursement, delivery and recordation, as provided in this
Agreement, the following funds, instruments and documents, the delivery of which
is material to the consummation of the subject transaction:
6.1. FUNDS. Immediately available funds in the amount required
of Buyer under this Agreement including sufficient funds to meet Buyer's
obligations under Sections 4.2, 9 and 10.
6.2. AUTHORITY. Evidence in form and substance reasonably
satisfactory to Seller and its legal counsel that Buyer is authorized to
enter into and consummate the transactions contemplated by this Agreement.
6.3. ASSIGNMENT OF OCCUPANCY AGREEMENTS AND SERVICE CONTRACTS.
An executed counterpart of the Assignment referenced in Section 7.5 below.
6.4. CLOSING STATEMENT. The Closing Statement summarizing the
prorations and other financial aspects of the transaction.
6.5. OTHER DOCUMENTS. Any documents reasonably required of Buyer
by Title Company or Escrow Holder in order to consummate the subject
transaction.
7. SELLER'S DELIVERIES. Provided that all other conditions to Seller's
obligation to consummate the Closing shall have been or shall concurrently be
satisfied, Seller shall deliver to Buyer through Escrow Holder on or before the
Closing, for disbursement, delivery and recordation, as provided in this
Agreement, the following instruments and documents, the delivery of which is
material to the Closing:
7.1. LIMITED WARRANTY DEED. A limited warranty deed (the "Deed")
in substantially the form set forth as EXHIBIT E attached hereto, conveying
to Buyer good and marketable fee simple title to the Real Estate, together
with all rights, members, easements and appurtenances thereto, expressly
subject to the title exceptions approved by Buyer as provided in Section
5.4 above. In addition, Seller shall deliver an executed Real Estate
Transfer Tax Declaration or local equivalent.
7.2. RELEASE OF EXISTING INDEBTEDNESS. Seller shall cause the
Property to be released from all mortgages, deeds of trust, deeds to secure
debt, security agreements, filings and statements and other security
interests relating to any existing indebtedness that is secured in whole or
in part by the Property.
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7.3. SELLER'S AFFIDAVIT. A Seller's Affidavit in the form set
forth as EXHIBIT F attached hereto and made a part hereof.
7.4. BLANKET BILL OF SALE AND TRANSFER. A blanket bill of sale,
transfer and assignment agreement (the "Bill of Sale") in substantially the
form set forth as EXHIBIT G attached hereto, assigning to Buyer all of
Seller's right, title and interest in and to any and all Personal Property.
7.5. ASSIGNMENT OF LEASES AND SERVICE CONTRACTS. An assignment
and assumption of Leases and Service Contracts and other Intangible
Property (the "Assignment") in substantially the form set forth as
EXHIBIT H attached hereto, assigning to Buyer all of Seller's right, title
and interest in and to the Leases and Service Contracts (that Buyer shall
have elected or elects to assume) and other Intangible Property with a
cross-indemnity between Seller and Buyer, with Seller indemnifying Buyer
with respect to any liability arising under the Leases and Service
Contracts for the period up to, but not including, the Closing Date, and
Buyer indemnifying Seller with respect to any liability arising under the
Leases and Service Contracts arising on and after the Closing Date,
respectively, and with an express assumption by Buyer of Seller's
obligations under the Leases and Service Contracts arising on and after the
Closing Date.
7.6. CERTIFIED RENT ROLL. Seller shall deliver to Buyer a
certificate, in substantially the form of EXHIBIT I attached hereto,
pursuant to which Seller shall certify to Buyer a then current Rent Roll
for the Property.
7.7. SELLER'S CERTIFICATE. A certificate addressed to Buyer
stating that the representations and warranties set forth in Section 14 are
true and correct as of the Closing in all material respects or stating any
exceptions thereto.
7.8. CERTIFICATE OF NON-FOREIGN STATUS. A certificate addressed
to Buyer made in compliance with Paragraph 1445 of the Internal Revenue
Code that Seller is not a foreign person and not subject to withholding
requirements.
7.9. CLOSING STATEMENT. The Closing Statement summarizing the
prorations and other financial aspects of the transaction contemplated by
this Agreement.
7.10. LEASES AND SERVICE CONTRACTS. The original Leases, Service
Contracts, Warranties, certificate(s) of occupancy, permits and licenses.
7.11. AUTHORITY. Evidence in form and substance reasonably
satisfactory to Buyer and its legal counsel that Seller is authorized to
enter into and consummate the transactions contemplated by this Agreement.
7.12. KEYS. Seller shall deliver to Buyer all of the keys in
Seller's possession to any door or lock in or on the Property.
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7.13. TENANT FILES. The current tenant files, including all
correspondence, notices, financial information, sales reports and other
information.
7.14. MATERIALS. All materials pertaining to the operation and
maintenance of the Property.
7.15. OTHER DOCUMENTS. All other documents reasonably required of
Seller by Escrow Holder in order to consummate the subject transaction.
8. CLOSING ESCROW. On the Closing Date, provided that Escrow Holder
shall have received all of the documents, instruments and funds required to be
delivered by Buyer and Seller in accordance with Articles 6 and 7 above (other
than those documents and other items specified in Sections 7.10, 7.12, 7.13 and
7.14 above, which shall be deemed delivered concurrently with delivery of
possession of the Property to Buyer), and provided that Title Company is
prepared to issue the Title Policy upon the Closing and that all other
conditions to the Closing have been satisfied (or waived by the party to this
Agreement which benefits from such condition), Escrow Holder shall promptly
perform all of the following:
8.1. RECORDING. Cause the Deed to be recorded with the real
property records of the county in which the Property is located.
8.2. BUYER'S DELIVERIES. Deliver to Seller all of the items
pursuant to Section 6 above.
8.3. SELLER'S DELIVERIES. Deliver to Buyer the Bill of Sale, the
Assignment and all of the other items pursuant to Article 7 except as
otherwise provided above.
8.4. COSTS AND PRORATIONS. Pay the costs and apply the
prorations in accordance with Articles 9 and 10 below.
8.5. ISSUANCE OF TITLE POLICY. Cause the Title Policy to be
issued and delivered to Buyer.
8.6. DISBURSEMENT OF PURCHASE PRICE. Disburse to Seller, or in
accordance with Seller's instructions (after making appropriate adjustments
for costs and prorations as provided in this Agreement), all funds
deposited with Escrow Holder by Buyer in payment of the Purchase Price.
9. COSTS. Seller shall pay (a) one-half (1/2) of Escrow Holder's fee,
(b) any documentary transfer and stamp taxes payable in connection with the
recordation of the Deed and (c) Escrow Holder's customary charges to a seller
for document drafting, recording and miscellaneous charges. Buyer shall pay (i)
one-half (1/2) of Escrow Holder's fee, (ii) the premiums and other costs for the
Title Policy, including without limitation any endorsements relating thereto,
(iii) Escrow Holder's customary charges to a buyer for document drafting,
recording and miscellaneous charges, and (iv) all costs associated with Buyer's
financing of any or all of the
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Purchase Price, including without limitation any applicable intangible taxes,
documentary stamps and recording costs and any fees for any loan, appraisal,
title insurance policy or other service.
10. PRORATIONS. The following shall be prorated between Buyer and Seller
as of 11:59 p.m. local time of the day immediately preceding the Closing Date,
on the basis of the actual number of days elapsed during the month in which the
Closing occurs: general and special county and city real property taxes and
special assessments (collectively, "Taxes") for the tax period then in effect
and insurance premiums (but only if Buyer is assuming Seller's insurance policy
or policies). Proration of Taxes shall be based on the most recent official tax
bills or notice of valuation available for the fiscal year in which the Closing
occurs, with due allowance to be made for the maximum available discount or
other exemptions to the extent permissible for said year, and to the extent the
tax bills do not accurately reflect the actual Taxes assessed against the
Property (or any portion of the Property) and allocable either to the period
before the Closing or to the period after the Closing, then Buyer and Seller
shall adjust the actual Taxes between Buyer and Seller, outside of Escrow, as
soon as reasonably possible following the Closing. In addition to the foregoing
apportionments, Seller shall receive all rents and other income accrued, and
shall pay all other expenses accrued or incurred, in connection with the
ownership or operation of Property before the Closing Date, and Buyer shall
receive all rents and other income accruing, and shall pay all other expenses
accrued or incurred, in connection with the ownership or operation of Property
on or after the Closing Date, all of which rents, other income and expenses
shall be prorated as of the Closing. Rents and other income, if any, collected
by Buyer after the Closing shall be applied first to any amounts due to Buyer
and then, to the extent such rents or other income relate to the period ending
on or before the Closing, such rents or other income shall be paid to Seller
within ten (10) days after end of the month in which such amounts were
collected. Buyer shall incur no obligation to Seller for Buyer's failure to
collect such rentals or other income. All security and any other refundable
deposits paid by tenants to Seller pursuant to tenant leases shall be delivered
by certified funds to Buyer at the Closing or, at Seller's option, credited to
Buyer against the cash portion of the Purchase Price at the Closing. Escrow
Holder shall not be concerned with any prorations that are to be made after the
Closing pursuant to this Agreement.
11. FAILURE OF ESCROW TO CLOSE. If Escrow fails to close by reason of a
failure of a Buyer's Condition in accordance with Article 5 above, or because of
a default by Seller under this Agreement, Buyer shall be entitled to the
immediate return of the Deposit upon delivery of written notice by Buyer to
Escrow Holder. If this Agreement or Escrow is terminated, Buyer shall return to
Seller, within two (2) business days after the termination of Escrow, all
documents and materials provided by Seller or its agents to Buyer or its agents
in connection with this Agreement or the Property and all copies thereof.
12. LIQUIDATED DAMAGES. THE PARTIES HAVE DISCUSSED AND NEGOTIATED IN GOOD
FAITH THE QUESTION OF THE DAMAGES THAT WOULD BE SUFFERED BY SELLER IF THE
CLOSING DOES NOT OCCUR BECAUSE BUYER BREACHES THIS AGREEMENT AND HAVE ENDEAVORED
TO REASONABLY ESTIMATE SUCH DAMAGES. THEY AGREE THAT (I) SUCH DAMAGES ARE AND
WILL BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, (II) LIQUIDATED
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DAMAGES IN THE AMOUNT OF THE DEPOSIT (AS IT MAY BE INCREASED FROM TIME TO TIME)
ARE AND WOULD BE REASONABLE AS A MEASURE OF SUCH DAMAGES, (III) IN THE EVENT OF
SUCH BREACH, SELLER SHALL BE ENTITLED TO RETAIN THE DEPOSIT AS SUCH LIQUIDATED
DAMAGES, AND (IV) IN CONSIDERATION OF THE PAYMENT OF SUCH LIQUIDATED DAMAGES,
SELLER SHALL BE DEEMED TO HAVE WAIVED ALL OTHER CLAIMS FOR DAMAGES OR RELIEF AT
LAW OR IN EQUITY ON ACCOUNT OF THE FAILURE OF THE CLOSING TO OCCUR, EXCEPT FOR:
(A) CLAIMS FOR THE RETURN OR OTHER DELIVERY OF DOCUMENTS IN CONNECTION WITH THIS
AGREEMENT; (B) ACTIONS TO EXPUNGE A LIS PENDENS OR OTHER CLOUDS ON TITLE CAUSED
BY BUYER; (C) CLAIMS ON ACCOUNT OF BUYER'S INDEMNITY OBLIGATIONS UNDER THIS
AGREEMENT, AND (D) ATTORNEYS' FEES AND COSTS INCURRED BY SELLER INCIDENT TO
CLAUSES (A) THROUGH (C). NOTWITHSTANDING THE FOREGOING, IN THE EVENT BUYER
OBJECTS TO, FAILS TO COOPERATE WITH OR OTHERWISE OPPOSES SELLER'S WITHDRAWAL OF
THE DEPOSIT OUT OF THE ESCROW, SELLER SHALL HAVE ALL OF THE REMEDIES OTHERWISE
AVAILABLE TO SELLER AT LAW OR IN EQUITY.
SELLER'S INITIALS BUYER'S INITIALS
------------ ------------
13. POSSESSION. Seller shall deliver possession of the Property to Buyer
on the Closing Date, subject to the rights of tenants.
14. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to and covenants with Buyer that the following representations and
warranties are complete and accurate as of the date of this Agreement and will
be complete and accurate as of the Closing Date:
14.1. AUTHORITY. Seller is a joint venture partnership, duly
organized, validly existing and in good standing under the laws of the
State of Arizona, and Seller has full right, power and authority to enter
into this Agreement and to perform all of the obligations and liabilities
of Seller hereunder. This Agreement has been duly and validly authorized,
executed and delivered by and on behalf of Seller and, assuming the due
authorization, execution and delivery thereof by and on behalf of Buyer,
constitutes a valid and binding obligation of Seller enforceable in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, reorganization, receivership and other similar laws affecting
the rights and remedies of creditors generally and to general equitable
principles (whether considered in a proceeding at law or in equity).
Neither the execution nor delivery of this Agreement or any other documents
executed and delivered, or to be executed and delivered, by Seller in
connection with the transactions described herein will violate any
provision of Seller's organizational documents or of any agreements,
regulations or laws to which Seller is bound.
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14.2. NO OTHER AGREEMENTS. To Seller's actual knowledge, other
than this Agreement, the Leases, the Service Contracts and the matters
identified on EXHIBIT J attached hereto, there are no leases, service
contracts, management agreements or other agreements or instruments in
force or effect that (a) grant to any person or entity any right, title,
interest or benefit in or to all or any part of the Property or (b) any
rights relating to the use, maintenance, operation, construction or
management of all or any part of the Property.
14.3. NO LITIGATION. Except as set forth in EXHIBIT K attached
hereto, Seller has no actual knowledge, nor has Seller received any notice,
of any pending litigation or proceeding brought by any person or entity or
Governmental Authority against Seller with respect to the Property.
14.4. POSSESSION. To Seller's actual knowledge, except for the
tenants in possession of the Property under the Leases, as shown in the
Rent Roll, there are no parties in possession of or claiming any possession
to any portion of the Property as lessees, tenants at sufferance,
licensees, easement holders, trespassers or otherwise.
14.5. NO ASSESSMENTS. Seller has received no notice of any (a)
assessments against the Property that are unpaid, whether or not they have
become liens, except ad valorem taxes for the current year, or (b) any
change in the assessed value or basis for levy of taxes regarding the
Property.
14.6. NOTICE OF CONDEMNATION; RIGHT OF WAY MATTERS. Seller has
received no notice of any threatened or contemplated action by any
Governmental Authority having the power of eminent domain, which might
result in any part of the Property being taken by condemnation or conveyed
in lieu thereof. Seller shall, promptly upon receiving any such notice,
give Buyer written notice thereof.
14.7. VIOLATION OF LAWS. Seller has received no notice that any
Governmental Authority has determined that there are any violations of
zoning, health, environmental, or other statutes, ordinances, or
regulations affecting the Property. In the event Seller receives notice of
any such violations prior to Closing affecting the Property, Seller shall
promptly notify Buyer thereof.
14.8. NO BANKRUPTCY. Seller is not a party to any voluntary or
involuntary proceedings in bankruptcy, reorganization or similar
proceedings under the federal bankruptcy laws or under any state laws
relating to the protection of debtors, or subject to any general assignment
for the benefit of creditors, and to Seller's actual knowledge, no such
action has been threatened.
14.9. ZONING. Seller shall, promptly upon receiving any notice of
any contemplated or threatened rezoning of the Property, give Buyer written
notice thereof.
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14.10. SERVICE CONTRACTS. Attached hereto as EXHIBIT L and
incorporated herein is a complete and accurate list of all of the Service
Contracts and as of the date of this Agreement Seller has delivered to
Buyer complete and accurate copies of all such Service Contracts. Seller
has received no notice of any default, or claim of default, on the part of
any party to any of such Service Contracts, and within five (5) business
days following mutual execution of this Agreement, Buyer shall notify
Seller of any Service Contract that Buyer wishes to assume and Seller, at
its sole cost and expense, shall terminate all other Service Contracts
within five (5) days prior to Closing in accordance with (but only to the
extent permitted under) the governing terms of the applicable Service
Contract.
14.11. LEASES. The copies of the Leases delivered or made
available by Seller to Buyer in accordance with Section 7.10 above are
complete and accurate, and there are no amendments or modifications thereto
not disclosed on the rent roll delivered in accordance with Section 7.6
above or otherwise in writing by Seller to Buyer. Seller hereby covenants
and agrees with Buyer that, so long as this Agreement remains in full force
and effect, Seller will continue to operate and manage the Property in
substantially the same manner as it has been operated and managed in the
past.
14.12. AVAILABILITY OF AGREEMENTS. Seller shall make available to
Buyer for review at Seller's offices at the Property during normal business
hours, and upon reasonable advance notice, full, true, correct and complete
copies of all Service Contracts, Leases and all written amendments,
modifications, agreements, or understandings relating thereto as are in
effect from time to time while this Agreement remains in effect.
14.13. EMPLOYEE LIABILITY. To Seller's actual knowledge, after the
Closing Buyer shall not be obligated to continue the employment of any of
the employees of Seller or Seller's property manager. To Seller's actual
knowledge, all of the employees for the Property are employees of Seller's
property manager and not of Seller.
14.14. HAZARDOUS MATERIALS. To Seller's actual knowledge, Seller
has not generated, disposed of, released or found any Hazardous Materials
(hereinafter defined) on the Property, and Seller has no actual knowledge
of the existence of any areas for the generation, storage or disposal of
any Hazardous Materials on the Property. Seller has received no notice
that any Governmental Authority has determined that there are any
violations of Environmental Laws (as hereinafter defined) affecting the
Property. In the event Seller receives notice of any such Hazardous
Materials on the Property or any such violation affecting the Property
prior to the Closing, Seller immediately shall notify Buyer thereof.
"Hazardous Materials" means petroleum, including crude oil or any fraction
thereof, asbestos, radon gas, polychlorinated biphenyls, and any other
substance identified as hazardous in the following, as the same may have
been amended: the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601, ET SEQ.; the Resource
Conservation Act of 1976, 42 U.S.C. Section 6921, ET SEQ.; the
Toxic Substances Control Act, 15 U.S.C. Section 2601, ET SEQ.; the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section 136; the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251, ET SEQ.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, ET SEQ.;
the
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Federal Solid Waste Disposal Act, 42 U.S.C. Section 6901, ET SEQ.; the
Clean Air Act, 42 U.S.C. Section 7401, ET SEQ.; and any other legislation
or ordinance of any Governmental Authority identified by its terms as
pertaining to hazardous materials, waste or asbestos ("Environmental
Laws").
14.15. AGREEMENTS AFFECTING THE PROPERTY. Subject to the
provisions in Section 14.11 hereof, Seller hereby covenants and agrees with
Buyer that, so long as this Agreement remains in full force and effect,
Seller will not sell, assign, convey (absolutely or as security), grant a
security interest in, or otherwise encumber or dispose of, the Property (or
any interest or estate therein) without the prior written consent of the
Buyer. Seller has not executed and will execute no exclusive or other
brokerage agreements which will survive the Closing Date. Seller shall
not enter into Service Contracts from and after the date of this Agreement
without the prior written consent of Buyer, which consent may be granted or
withheld in Buyer's sole and absolute discretion; provided, however, that
Seller hereby covenants and agrees with Buyer that, so long as this
Agreement remains in full force and effect, Seller will continue to operate
and manage the Property in substantially the same manner as it has been
operated and managed in the past.
14.16. MAINTENANCE OF INSURANCE. Seller shall maintain in full
force and effect all existing policies of insurance relating to the
Property through and including the Closing Date, shall pay all premiums
with respect to such insurance on or before the due date therefor and shall
not knowingly take any action which would cause such insurance not to
remain in full force and effect or fail knowingly to take any action
required to maintain such insurance in full force and effect.
14.17. FIXTURES. All fixtures and articles of Personal Property
included in and which are part of the sale are now, and at the Closing will
be, owned by Seller free and clear of any conditional bills of sale,
chattel mortgages, security agreements or financing statements, or other
liens of security interest created by Seller, and shall be transferred to
Buyer as a part of the transaction.
14.18. SECURITY DEPOSITS. Security deposits shown in the certified
rent roll are a full, true and complete list of all of the security
deposits for the Property and are now held by Seller and Seller's property
manager under the terms of the Leases, and none have been forfeited by any
existing tenant.
14.19. NON-FOREIGN STATUS. Seller is not a "foreign person" as
that term is defined in the Internal Revenue Code of 1986, as amended, and
the regulations promulgated pursuant thereto, and Buyer has no obligation
under the Internal Revenue Code Section 1445 to withhold and pay over to
the Internal Revenue Service any part of the "amount realized" by Seller in
the transaction contemplated hereby (as such term is defined in the
regulations issued under Internal Revenue Code Section 1445).
14.20. REPRESENTATIONS, WARRANTIES AND COVENANTS RE-MADE AT
CLOSING. The foregoing warranties and representations are true, and the
foregoing covenants are in full
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force and effect and binding on Seller as of the date hereof and shall be
in full force and effect and deemed to have been automatically reaffirmed
and restated by Seller as of the Closing Date.
For purposes of this Section 14, "Seller's actual knowledge" shall mean the
knowledge of (i) J. Bradley Forrester, (ii) Ralph Tilley and (iii) Pam Anderson
without any duty of investigation or inquiry and "notice" shall mean written
notice. The representations and warranties of Seller shall survive the Closing
for six (6) months, and any claim made by Buyer against Seller with respect
thereto must be asserted within such six-month period.
15. BUYER'S REPRESENTATIONS AND WARRANTIES. The accuracy and completeness
of the following constitute a condition to the Closing, and Buyer represents and
warrants to Seller that the following is complete and accurate as of the date of
this Agreement and shall be complete and accurate as of the Closing, and shall
survive the Closing: Buyer is duly organized and validly existing and is (or
will at the Closing be) qualified to conduct its business and has the legal
power, right and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. All requisite action (corporate,
partnership, trust or otherwise) has been taken by Buyer in connection with
entering into this Agreement and the consummation of the transactions
contemplated by this Agreement. The individual executing this Agreement on
behalf of Buyer has the legal power, right and actual authority to bind Buyer to
the terms and conditions of this Agreement. This Agreement and all documents
required by this Agreement to be executed by Buyer are and are valid, legally
binding obligations of and enforceable against Buyer in accordance with their
terms. The foregoing warranties and representations are true, and the foregoing
covenants are in full force and effect and binding on Buyer as of the date
hereof and shall be in full force and effect and deemed to have been
automatically reaffirmed and restated by Buyer as of the Closing Date.
16. CONDEMNATION. If all or any material portion of the Property is taken
by eminent domain (or is the subject of a pending or contemplated taking which
has not been consummated) before the Closing, then (a) Seller, if Seller has
actual knowledge thereof, shall notify Buyer of such fact and (b) Buyer shall
have the option to terminate this Agreement upon written notice to Escrow Holder
and Seller given no later than thirty (30) business days after Seller has given
such notice. For purposes of the foregoing sentence, a portion of the Property
shall not be deemed material unless the taking thereof diminishes the rentable
area of the building or the recreation facilities or restricts access to the
Property. If this Agreement is so terminated, then (i) Buyer shall pay all
costs associated with the cancellation of the Escrow pursuant to this Section,
(ii) neither Buyer nor Seller shall have any further rights or obligations under
this Agreement (except to the extent of any indemnities under this Agreement
with respect to events occurring before such termination, which indemnities
shall survive any such termination), and (iii) Escrow Holder shall, without
requiring any further instruction from Seller, immediately return to Buyer the
Deposit and all interest accrued thereon. If Buyer does not terminate this
Agreement within such thirty-day period, then (A) Buyer shall not thereafter
have the right to terminate this Agreement by reason of such taking and
(B) Buyer and Seller shall proceed to the Closing in accordance with this
Agreement, without modification of the terms of this Agreement, except that
(1) the Property will not include the property so taken, (2) the Purchase Price
will be reduced
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by the amount of any awards for such taking awarded to Seller as of the Closing
Date, and (3) Seller shall assign and turn over to Buyer, and Buyer shall be
entitled to receive and retain, all awards for such taking not yet awarded as of
the Closing.
17. DESTRUCTION. If the Property or any portion thereof is damaged by
fire or other casualty on or before the Closing Date, Seller immediately shall
notify Buyer of such damage. If the estimated cost to repair the damage is less
than the greater of (i) $400,000 and (ii) five percent (5%) of the Purchase
Price and does not eliminate or materially impair access to the Property, Buyer
and Seller shall proceed to the Closing in accordance with the terms of this
Agreement, without modification of the terms of this Agreement, in which event
Buyer shall be entitled to an assignment of the proceeds of all insurance
relating to such fire or other casualty. If the estimated cost to repair the
damage equals or exceeds the greater of (i) $400,000 and (ii) five percent (5%)
of the Purchase Price, Buyer may elect either (a) to terminate this Agreement
and receive the return of the Deposit (minus any escrow or title cancellation
fees), in which case neither party shall have any additional rights or
obligations under this Agreement, or (b) to proceed to the Closing in accordance
with this Agreement, without modification of the terms of this Agreement, in
which event Buyer shall be entitled to an assignment of the proceeds of all
insurance relating to such fire or other casualty, if any. Such election shall
be made by Buyer within thirty (30) business days following Seller's
notification to Buyer. Buyer's failure to elect to terminate this Agreement
within such thirty-day period shall conclusively be deemed an election to
proceed to the Closing.
18. BROKERS. Each party to this Agreement represents and warrants to the
other that no real estate or business broker, agent, finder, or other person is
responsible for bringing about or negotiating this Agreement and that such party
has not dealt with any real estate broker, agent, finder or person relative to
this Agreement in any manner. Each party to this Agreement shall defend,
indemnify, and hold harmless the other party to this Agreement against all
liabilities, damages, losses, costs, expenses, attorneys' fees and claims
arising from (a) any breach of such representation by such indemnifying party
set forth in the preceding sentence, and (b) any claims that may be made against
such indemnified party by any real estate broker, agent, finder or other person
alleging to have acted on behalf of or to have dealt with such indemnifying
party.
19. NO RELIANCE - AS-IS. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT OR IN ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT HERETO, BUYER
ACKNOWLEDGES THAT IT IS PURCHASING THE PROPERTY IN RELIANCE SOLELY ON:
(I) BUYER'S INSPECTION OF THE REAL PROPERTY, THE PERSONAL PROPERTY AND THE
IMPROVEMENTS; (II) BUYER'S INDEPENDENT VERIFICATION OF THE TRUTH OF ANY
STATEMENTS CONTAINED IN THE DOCUMENTS MADE AVAILABLE TO BUYER; AND (III) THE
OPINIONS AND ADVICE OF CONSULTANTS AND ATTORNEYS ENGAGED BY BUYER CONCERNING THE
PROPERTY. BUYER FURTHER ACKNOWLEDGES THAT BEFORE ITS EXECUTION OF THIS
AGREEMENT BUYER SHALL HAVE PERFORMED OR WILL HAVE HAD AN OPPORTUNITY TO PERFORM
ALL OF ITS DUE DILIGENCE INVESTIGATIONS OF AND WITH RESPECT TO THE PROPERTY AS
BUYER DEEMS APPROPRIATE, INCLUDING ENGINEERING STUDIES, SOILS TESTS,
ENVIRONMENTAL SURVEYS AND TESTING, PHYSICAL INSPECTIONS, ALTA OR OTHER SURVEYS
AND MARKET ANALYSES AS WELL AS BUYER'S EVALUATION OF THE CONDITION AND STATUS OF
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THE PERSONAL PROPERTY AND IMPROVEMENTS AND THE OPERATION AND FUTURE PROSPECTS OF
THE PROPERTY. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN
ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT HERETO, AT THE CLOSING, BUYER
ACCEPTS THE PROPERTY AND ALL MATTERS RELATING TO THE PROPERTY IN THEIR "AS IS,"
"WHERE-IS" AND "WITH ALL FAULTS" CONDITION OR STATUS AS OF THE CLOSING DATE,
INCLUDING SUCH MATTERS AS: SOILS AND GEOLOGICAL CONDITION, TOPOGRAPHY, AREA AND
CONFIGURATION OF THE REAL PROPERTY; THE AGE AND CONDITION OF THE IMPROVEMENTS
AND PERSONAL PROPERTY; THE EXISTENCE OF ANY HAZARDOUS OR TOXIC SUBSTANCES OR
MATERIALS, CONSTRUCTION DEFECTS OR OTHER MATTERS WHICH WOULD OR COULD
NECESSITATE ABATEMENT OR REMEDIATION ACTION BY THE PROPERTY'S OWNER; ANY
PHYSICAL OR MECHANICAL DEFECTS IN THE IMPROVEMENTS OR PERSONAL PROPERTY; ANY
EASEMENT, LICENSE OR ENCROACHMENT WHICH IS NOT A MATTER OF PUBLIC RECORD,
WHETHER OR NOT VISIBLE UPON INSPECTION OF THE PROPERTY; THE ZONING AND OTHER
LAND USE REGULATIONS APPLICABLE TO THE PROPERTY; AND ANY OTHER MATTER RELATING
TO THE PROPERTY INCLUDING, BUT NOT LIMITED TO, VALUE, TITLE, INCOME,
FEASIBILITY, COST, MARKETING AND INVESTMENT RETURN. BUYER ACKNOWLEDGES AND
AGREES THAT SELLER IS NOT MAKING ANY EXPRESS OR IMPLIED WARRANTIES OR
REPRESENTATIONS OF ANY KIND OR CHARACTER WITH RESPECT TO THE PROPERTY. IN
PARTICULAR BUT NOT BY WAY OF LIMITATION OF THE FOREGOING, EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT OR IN ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT
HERETO, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, RELATING
TO COMPLIANCE OF THE IMPROVEMENTS WITH CURRENT BUILDING CODES, INCLUDING WITHOUT
LIMITATION THOSE RELATING TO UPDATED OR REVISED STANDARDS FOR PLUMBING,
ELECTRICAL, STRUCTURAL OR SEISMIC MATTERS. BUYER WARRANTS AND REPRESENTS TO
SELLER THAT BUYER HAS NOT RELIED ON AND WILL NOT RELY ON, EITHER DIRECTLY OR
INDIRECTLY, ANY WARRANTY OR REPRESENTATION OF SELLER NOT EXPLICITLY SET FORTH IN
THIS AGREEMENT.
20. INDEMNITY REGARDING INSPECTION. In consideration of Seller's
permission to Buyer and its agents to perform investigations and testing on and
about the Property prior to the Closing, Buyer shall defend, indemnify and hold
harmless Seller and Seller's partners, and their respective officers, employees,
agents, contractors, successors, assigns, and affiliates (collectively, the
"Indemnitees"), and the Property from all claims, costs, liens, actions and
judgments (including attorneys' fees and other defense costs actually incurred
by Seller) resulting from Buyer's investigation of the Property or its attempts
to obtain any regulatory approvals in connection with the Property, or otherwise
caused by Buyer or any of its employees, agents or independent contractors,
except for the non-negligent release of Hazardous Materials already on the
Property occasioned thereby. Unless and until the Closing occurs, Buyer shall
maintain all the information which it obtains in connection with the Property in
strict confidence and shall not reveal any of such information to any party
other than those parties to which it may otherwise be required to disclose in
accordance with applicable law. Buyer shall, at Buyer's sole cost, promptly
repair any damage resulting from its activities on the Property and restore the
Property to substantially the same condition as before Buyer or any of its
agents first entered the Property. If the Closing does not occur on or before
the Closing Date for any reason other than a breach of this Agreement by Seller,
Buyer shall provide Seller, at Seller's cost, copies of all third-party
engineering and environmental reports and materials derived from Buyer's
investigation of the
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Property, concurrently with reimbursement by Seller of Buyer's out-of-pocket
costs in procuring such reports and materials.
21. BUYER'S REMEDIES. In the event the transaction contemplated hereby is
not consummated as a result of Seller's default hereunder, Buyer's sole and
exclusive remedies shall be either (i) to seek from Escrow Holder the return of
the Deposit and any other documents and funds then held by Escrow Holder and
Seller shall reimburse Buyer for Buyer's reasonable and documented out-of-pocket
expenses incurred in connection with the purchase transaction contemplated under
this Agreement (but in no event to exceed one-fourth percent (1/4%) of Purchase
Price)or (ii) to seek specific performance of Seller's obligations hereunder by
delivering the Purchase Price into the Escrow; provided, however, that as
conditions precedent to such action for specific performance, [A] no uncured
default in the performance of Buyer's obligations under this Agreement shall
exist and no event shall have occurred which with the passage of time or with
notice, or both, could become such an event of default, and [B] Buyer shall not
seek to amend the Purchase Price in such action.
22. SELLER'S PARTNERS' APPROVAL. Notwithstanding anything to the contrary
contained in this Agreement, the Closing shall not occur unless and until Seller
shall have obtained written approval ("Seller's Consent") from those partners of
Seller (or those partners of the partners of Seller, as the case may be) whose
approval is legally required before Seller may sell the Property to Buyer
hereunder. Seller shall seek such approval immediately after the Escrow Opening
Date. If Seller's Consent is not obtained within twenty-one (21) days after the
Escrow Opening Date (as such period may be extended by Seller at Seller's sole
option for up to an additional forty (40) days), Seller or Buyer may terminate
this Agreement by written notice delivered to the other before Seller's Consent
is obtained, in which case Buyer shall be entitled to the return of the Deposit
and neither Buyer nor Seller shall have any further rights or obligations under
this Agreement (except to the extent of any indemnities under this Agreement
with respect to events occurring before such termination, which indemnities
shall survive any such termination and except that Seller shall reimburse Buyer
for Buyer's reasonable and documented out-of-pocket engineering and
environmental expenses (but in no event to exceed $3,600)).
23. FURTHER ASSURANCES. Each party to this Agreement shall execute and
deliver all instruments and documents and take all actions as may be reasonably
required or appropriate to carry out the purposes of this Agreement.
24. COUNTERPARTS AND EXHIBITS. This Agreement may be executed in
counterparts, each of which is deemed an original and all of which together
constitute one document. All exhibits attached to and referenced in this
Agreement are incorporated into this Agreement.
25. TIME OF ESSENCE. Time and strict and punctual performance are of the
essence with respect to each provision of this Agreement.
26. ATTORNEY'S FEES. The prevailing party in any litigation, arbitration,
mediation, bankruptcy, insolvency or other proceeding ("Proceeding") relating to
the enforcement or interpretation of this Agreement may recover from the
unsuccessful party all costs, expenses and
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actual attorney's fees (including expert witness and other consultants' fees and
costs) relating to or arising out of (a) the Proceeding (whether or not the
Proceeding proceeds to judgment), and (b) any post-judgment or post-award
proceeding including, without limitation, one to enforce or collect any judgment
or award resulting from the Proceeding. All such judgments and awards shall
contain a specific provision for the recovery of all such subsequently incurred
costs, expenses and actual attorney's fees.
27. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state in which the Property is located. Each
party hereby authorizes and accepts service of process sufficient for personal
jurisdiction in any action against it as contemplated by this paragraph by
registered or certified mail, return receipt requested, postage prepaid, to its
address for the giving of notices set forth in this Agreement.
28. MODIFICATION. This Agreement may be modified only by a writing
executed by the party to this Agreement against whom enforcement of the
modification is sought.
29. PRIOR UNDERSTANDINGS. This Agreement and all documents specifically
referred to and executed in connection with this Agreement: (a) contain the
entire and final agreement of the parties to this Agreement with respect to the
subject matter of this Agreement, and (b) supersede all negotiations,
stipulations, understandings, agreements, representations and warranties, if
any, with respect to such subject matter, which precede or accompany the
execution of this Agreement.
30. INTERPRETATION. Whenever the context so requires in this Agreement,
all words used in the singular may include the plural (and vice versa) and the
word "person" includes a natural person, a corporation, a firm, a partnership, a
joint venture, a trust, an estate or any other entity. The terms "includes" and
"including" do not imply any limitation. Unless "business day" is specified,
the term "day" means a calendar day. The term "business day" means any day
other than a Saturday, Sunday or Federal or other holiday in the State in which
the Property is located. If the last day for any act falls on a day other than
a business day, the time for performance shall be extended to the next business
day. No remedy or election under this Agreement is exclusive, but rather, to
the extent permitted by applicable law, each such remedy and election is
cumulative with all other remedies at law or in equity. The paragraph headings
in this Agreement (a) are included only for convenience, (b) do not in any
manner modify or limit any of the provisions of this Agreement and (c) may not
be used in the interpretation of this Agreement. Each provision of this
Agreement is valid and enforceable to the fullest extent permitted by law. If
any provision of this Agreement (or the application of such provision to any
person or circumstance) is or becomes invalid or unenforceable, the remainder of
this Agreement, and the application of such provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected by such invalidity or unenforceability.
31. SUCCESSORS-IN-INTEREST AND ASSIGNS. Buyer may not assign its rights
under this Agreement to any person or entity without the prior written consent
of Seller, which consent may be withheld in Seller's sole and absolute
discretion; provided, however, that Buyer may assign
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such rights to a subsidiary wholly-owned by Buyer upon written notice given to
Seller not less than five (5) business days prior to the Closing. No assignment
by Buyer of any of its rights or obligations under this Agreement shall relieve
Buyer of any of its obligations under this Agreement unless Seller expressly
agrees to such release in writing. Subject to the foregoing, this Agreement
shall be binding on and shall inure to the benefit of the successors-in-interest
and assigns of each party to this Agreement.
32. NOTICES. Each notice and other communication required or permitted to
be given under this Agreement ("Notice") must be in writing. Notice is duly
given to another party upon: (a) hand delivery to the other party, (b) receipt
by the other party when sent by facsimile to the address and number for such
party set forth below (provided, however, that the Notice is not effective
unless a duplicate copy of the facsimile Notice is promptly given by one of the
other methods permitted under this paragraph), (c) three business days after the
Notice has been deposited with the United States postal service as first class
certified mail, return receipt requested, postage prepaid, and addressed to the
party as set forth below, or (d) the next business day after the Notice has been
deposited with a reputable overnight delivery service, postage prepaid,
addressed to the party as set forth below with next-business-day delivery
guaranteed, provided that the sending party receives a confirmation of delivery
from the delivery-service-provider.
If to Seller:
Rancho Antigua Joint Venture
c/o Continental American Properties, Ltd.
1764 San Diego Avenue
San Diego, California 92110-1906
Attention: Scott Dupree, Esq.
Telephone: (619) 297-6771
Telecopy: (619) 294-2451
With a copy to:
Hughes Hubbard & Reed LLP
350 South Grand Avenue, Suite 3600
Los Angeles, California 90071-3442
Attention: George A. Furst, Esq.
Telephone: (213) 613-2839
Telecopy: (213) 613-2950
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<PAGE>
If to Buyer:
DOC Investors, LLC
c/o Lend Lease Real Estate Investments, Inc.
3424 Peachtree Road, N.E., Suite 800
Atlanta, Georgia 30326
Attention: Theodore Klinck
Telephone: (404) 848-8744
Telecopy: (404) 848-8930
With a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attention: William Fryer, Esq.
Telephone: (404) 572-4600
Telecopy: (404) 572-5148
If to Escrow Holder:
First American Title Insurance Company
114 East Fifth Street
Santa Ana, California 92701
Attention: Toni Rice-Groetsch
Telephone: (800) 854-3643
Telecopy: (714) 558-4702
Each party shall make a reasonable, good faith effort to ensure that it will
accept or receive Notices to it that are given in accordance with this
paragraph. A party may change its address for purposes of this paragraph by
giving the other party(ies) written notice of a new address in the manner set
forth above.
33. WAIVER. Any waiver of a default or provision under this Agreement
must be in writing. No such waiver shall constitute a waiver of any other
default or provision concerning the same or any other provision of this
Agreement. No delay or omission by a party in the exercise of any of its rights
or remedies constitutes a waiver of (or otherwise impairs) such right or remedy.
A consent to or approval of an act does not waive or render unnecessary the
consent to or approval of any other or subsequent act.
34. DRAFTING AMBIGUITIES. Each party to this Agreement and its legal
counsel have reviewed and revised this Agreement. The rule of construction that
ambiguities are to be resolved against the drafting party or in favor of the
party receiving a particular benefit under an
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agreement shall not be employed in the interpretation of this Agreement or any
amendment to this Agreement.
35. THIRD PARTY BENEFICIARIES. Nothing in this Agreement is intended to
confer any rights or remedies on any person other than the parties to this
Agreement and their respective successors-in-interest and permitted assignees.
36. CONCURRENT CLOSING. Notwithstanding anything to the contrary
contained in this Agreement, the Closing shall be subject to and contingent
upon, and shall occur concurrently with, the Closing of the purchase
transactions for the following properties between Seller (or entities affiliated
with Seller) and Buyer (the "Concurrent Closing Contingency"): Autumn Heights,
Creekside Oaks, Lakeview Village, Las Colinas, Oaktree Village, Ponte Vedra
Beach Village I, Ponte Vedra Beach Village II, Shadowood Village, Skyline
Village, Tierra Catalina, Village at the Foothills I and Village at the
Foothills II & III, provided, however, that in the event this purchase
transaction or any of the other purchase transactions enumerated above is
terminated as a result of (i) condemnation or (ii) damage or destruction in
accordance with the applicable purchase agreement, such purchase transaction(s)
shall not be taken into account in determining whether the Concurrent Closing
Contingency shall have been satisfied (unless the aggregate number of purchase
transactions so terminated is two or more, in which event the Concurrent Closing
Contingency shall be deemed not to have been satisfied). In addition, in the
event this purchase transaction or any of the other purchase transactions
enumerated above does not close as a result of a default by Buyer in the
performance of its obligations under this Agreement or any other respective
purchase agreement, Seller shall be entitled (but not obligated) to exercise its
rights under Section 12 above and the corresponding provisions of each such
purchase agreement even though the Concurrent Closing Contingency shall not have
been satisfied.
37. EXCLUSIVITY. So long as this Agreement is in effect, Seller shall
not solicit, negotiate, offer or accept an offer for the purchase of the
Property (or any interest therein) for sale or contract to sell the Property (or
any interest therein) to any party other than Buyer or negotiate, solicit or
entertain any offers to purchase or sell the Property (or any interest therein).
38. CONFIDENTIALITY. Buyer and Seller agree that all documents and
information concerning the Property delivered to Buyer, the subject matter of
this Agreement and all negotiations shall remain confidential, and neither party
shall disclose any terms of this Agreement without the prior approval of the
other party except as may be required by law. Buyer and Seller shall be
entitled to disclose such information only to those parties required to know it,
including without limitation employees of either of the parties, consultants,
attorneys and accountants engaged by either Buyer or Seller, and prospective or
existing investors and lenders. This Section 38 shall expire upon the earlier
of the termination of this Agreement and the Closing.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SELLER:
RANCHO ANTIGUA JOINT VENTURE,
an Arizona joint venture partnership
By: ConAm Realty Investors 2, L.P.,
a California limited partnership,
its managing venturer
By: ConAm Property Services II, Ltd.,
a California limited partnership,
its general partner
By: Continental American Development, Inc.,
a California corporation,
its general partner
By: /s/ Scott Dupree
---------------------------------------
Its: Vice President
[Signatures Continued On Next Page.]
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BUYER:
DOC Investors, LLC,
a Delaware limited liability company
By: ConAm DOC Affiliates LLC,
a California limited liability company,
its administrative member
By: Continental American Properties, Ltd.,
a California limited partnership,
its managing member
By: DJE Financial Corp.,
a California corporation,
its general partner
By: /s/ J. Bradley Forrester
----------------------------------
Its Vice President
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CONSENT AND ACCEPTANCE OF ESCROW HOLDER:
The undersigned acknowledges having received an executed original of this
Agreement (or counterparts thereof) and the Deposit on January 26, 1999, which
date is the "Escrow Opening Date" for purposes of this Agreement.
The undersigned hereby consents to and accepts the instructions set forth in the
above Agreement for Purchase and Sale and Joint Escrow Instructions.
First American Title Insurance Company
By: /s/ Richard G. Hines
---------------------------
Its: Vice President
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INDEX OF EXHIBITS
EXHIBIT SECTION
------- -------
Exhibit A - Legal Description Section 1.1
Exhibit B - Schedule of Personal Property Section 1.1
Exhibit C - Due Diligence Materials Delivered to Buyer Section 5.1
Exhibit D - Disapproved Title Exceptions Section 5.4
Exhibit E - Form of Deed Section 7.1
Exhibit F - Form of Seller's Affidavit Section 7.3
Exhibit G - Bill of Sale Section 7.4
Exhibit H - Form of Assignment Section 7.5
Exhibit I - Form of Certificate for Rent Roll Section 7.6
Exhibit J - Other Agreements and Instruments Section 14.2
Exhibit K - Pending Litigation or Other Proceedings Section 14.3
Exhibit L - Schedule of Service Contracts Section 14.10
<PAGE>
AGREEMENT FOR PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
VILLAGE AT THE FOOTHILLS PHASE I
This Agreement for Purchase and Sale and Joint Escrow Instructions (this
"Agreement") is entered into as of January 26, 1999, by and between Village at
the Foothills (Phase I) Joint Venture Limited Partnership, an Arizona limited
partnership ("Seller"), and DOC Investors, LLC, a Delaware limited liability
company ("Buyer"), who agree and, to the extent applicable, instruct First
American Title Insurance Company ("Escrow Holder" or "Title Company," as the
context may require), as escrow holder, as follows:
1. This Agreement is made with reference to the following facts:
1.1. Seller owns that certain real property located at 2600 W. Ina
Road, Tucson, Arizona 85741, commonly known as Village at the Foothills
Phase I Apartments and more fully described on EXHIBIT A attached hereto
(the "Real Property"), including without limitation all rights, members,
easements, alleys, ways, appurtenances, shrubbery, trees, plants and
privileges located thereon or appertaining thereto, together with any and
all right, title and interest in and to any land lying in the bed or
right-of-way of any street, road, alley or avenue, open or proposed, in
front of or adjoining the land to the centerline thereof, together with any
nonexclusive right to use any and all such land lying within any such
roadbed, right-of-way, street, alley or avenue for ingress and egress to
and from the land, together with any and all right, title and interest in
and to any award made or to be made in lieu thereof, and in and to any
unpaid award for damage to the land by reason of change of grade of any
street. Along with the Real Property, Buyer intends to purchase from
Seller, and Seller intends to sell to Buyer, in accordance with this
Agreement, all improvements constructed in, on or under the Real Property
including a 60-unit residential apartment complex (collectively, the
"Improvements"), all of Seller's tangible personal property located on and
used solely in connection with the Real Property or the Improvements,
including without limitation the tangible personal property identified on
EXHIBIT B attached hereto (the "Personal Property") and all intangible
personal property owned by Seller and now, or hereafter, used in connection
with the Real Property (the "Intangible Property") including, without
limitation, all (i) trade names, (ii) logos, (iii) warranties and
guaranties relating to the construction, operation, maintenance, repair and
use of the Improvements and the Personal Property, including, without
limitation, any and all equipment, HVAC systems, plumbing and roof
warranties and all contractors' and subcontractors' warranties (the
"Warranties"), (iv) certificates of occupancy (or the local equivalents),
permits, licenses, approvals and authorizations issued by any federal,
state or municipal government, branch, authority, district, agency, court,
tribunal, department, board, commission or other instrumentality
("Governmental Authority"), (v) leases and other occupancy agreements (the
"Leases"), and (vi) contracts or other similar arrangements for goods and
services (the "Service Contracts").
<PAGE>
1.2. By this Agreement, Buyer and Seller intend to provide for
the sale of the Real Property, the Improvements, the Personal Property and
the Intangible Property (collectively, the "Property") by Seller to Buyer.
2. PURCHASE AND SALE. Subject to the terms and conditions of this
Agreement, Seller agrees to sell the Property to Buyer and Buyer agrees to
purchase the Property from Seller.
3. ESCROW.
3.1. OPENING OF ESCROW. Buyer shall immediately cause an escrow
(the "Escrow") to be opened at Escrow Holder's office located at 114 East
Fifth Street, Santa Ana, California 92701, Attention: Toni Rice-Groetsch
for the purpose of facilitating the consummation of this Agreement, by
delivering the Deposit (as defined in Section 4.1 below) to Escrow Holder
along with a copy of the fully executed original (or executed counterparts)
of this Agreement within two (2) business days after executing this
Agreement. Escrow Holder shall, immediately upon its receipt of the Deposit
and executed Agreement, execute and deliver to Buyer and Seller the Consent
and Acceptance of Escrow Holder attached to this Agreement, which Consent
and Acceptance of Escrow Holder shall specify the date of such receipt (the
"Escrow Opening Date"). This Agreement constitutes instructions to Escrow
Holder. Buyer and Seller shall execute such additional mutual instructions
as Escrow Holder may reasonably require, provided that such additional
instructions shall be consistent with this Agreement. Any inconsistency
between any such additional instructions and this Agreement shall be
resolved in a manner consistent with this Agreement, and the provisions of
this Agreement shall prevail unless Buyer and Seller waive such
inconsistent provision in writing by specifically referring to the fact of
such inconsistency and their intent to waive it.
3.2. CLOSING DATE. The purchase and sale transaction
contemplated hereunder shall close in accordance with Article 8 below (the
"Closing") by 10:00 a.m. PST on the later of (i) the satisfaction of the
Concurrent Closing Contingency (as defined in Section 36 below) and (ii)
the tenth (10th) business day following the receipt of Seller's Consent (as
defined in Section 22 below) (the "Closing Date"); provided, however, that
if the Closing shall occur on the Closing Date but after 10:00 a.m. PST,
the Closing Date shall be deemed to have occurred on the date of
recordation of the Deed (hereinafter defined) for purposes of calculating
prorations under Article 10 below, and provided further that Buyer shall
have the right, exercisable on written notice given to Seller not less than
five (5) days prior to the date originally scheduled as the Closing Date,
to extend such Closing Date for up to thirty (30) days to accommodate the
requirements of Buyer's lender and provided further that in no event shall
the Closing Date occur after February 1, 1999, unless the parties otherwise
agree in writing. If the Closing does not occur on or before the Closing
Date, then Buyer or Seller, if not in default under this Agreement, may at
any time thereafter give written notice to Escrow Holder to cancel the
Escrow whereupon the Escrow and the subject transaction shall become
terminated and Escrow Holder shall distribute all monies and documents in
Escrow Holder's possession in accordance with this Agreement and all
additional mutual instructions as the parties may provide. Such
cancellation of the Escrow shall not prejudice
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or limit any legal or equitable rights of Buyer or Seller, except as may be
limited by Article 12 below.
4. PURCHASE PRICE. The purchase price payable by Buyer for the Property
(the "Purchase Price") at the Closing is Two Million Four Hundred Thousand and
No/100 Dollars ($2,400,000.00), payable as follows:
4.1. DEPOSIT. Within three (3) business days after Buyer's
delivery of an executed copy of this Agreement to Escrow Holder, Buyer
shall deliver to Escrow Holder immediately available funds in the amount of
One Hundred Thousand and No/100 Dollars ($100,000.00) (the "Deposit").
Escrow Holder shall promptly deposit the Deposit into a federally-insured
interest-bearing account for the benefit of Buyer upon Escrow Holder's
receipt of Buyer's United States taxpayer identification number. The
Deposit, plus any interest accrued thereon, shall be applicable towards the
Purchase Price except as otherwise provided in Section 12 below.
4.2. BALANCE. Not later than one (1) business day prior to the
Closing Date, Buyer shall deposit with Escrow Holder cash or other
immediately available funds in the amount of the balance of the Purchase
Price, plus all other sums required of Buyer under this Agreement to pay
Buyer's costs and Buyer's share of prorations.
5. CONDITIONS PRECEDENT. Buyer's obligations under this Agreement are
subject to satisfaction or Buyer's written waiver of the following conditions
precedent (collectively, "Buyer's Conditions") on or before the expiration of
the applicable contingency period provided for below (collectively, the
"Contingency Periods"). If the respective Buyer's Condition has not been
satisfied or waived in writing, then at Buyer's option, this Agreement and the
Escrow shall be deemed terminated and neither Buyer nor Seller shall have any
further obligation to the other party under this Agreement (except to the extent
of any indemnities under this Agreement with respect to events occurring before
such termination, which indemnities shall survive any such termination). If
either party terminates the Escrow in accordance with the preceding sentence,
Escrow Holder shall, without requiring any further instructions, immediately
return the Deposit plus any interest accrued thereon to Buyer.
5.1. DUE DILIGENCE DELIVERIES BY SELLER. Buyer acknowledges that
Seller prior to the date of this Agreement has provided to Buyer copies of,
or access to, the items identified on EXHIBIT C attached hereto and that
such items are the only items that Buyer has requested from Seller for
Buyer's examination and review of the Property and all aspects thereof.
5.2. DUE DILIGENCE INVESTIGATION. Buyer acknowledges that it has
investigated, reviewed and approved (or has had an adequate opportunity to
investigate and review and accordingly approves) the physical,
developmental and economic status and feasibility of the Property,
including without limitation marketing studies, land use and legal due
diligence, engineering studies, soils tests, physical inspections and
environmental surveys with respect to the Property. In order to facilitate
Buyer's investigation and analysis, Seller
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has granted and will continue to grant to Buyer the right to enter the
Property at any time during normal business hours upon forty-eight (48)
hours' prior written notice to Seller, to conduct such inspections,
reviews, examinations and tests on the Property as Buyer has deemed
necessary or desirable to investigate the physical condition of the
Property, as well as access to relevant information relating to the
Property within Seller's possession or under Seller's control (but Seller
has made and now makes no representation or warranty regarding the accuracy
or completeness of such information). Buyer further acknowledges that it
is acquiring the Property in its "as-is" condition in accordance with
Section 19 below.
5.3. SELLER'S CONSENT. Seller shall have obtained Seller's
Consent in accordance with Article 22 below.
5.4. STATUS OF TITLE AND SURVEY. If Buyer intends to obtain
extended coverage title insurance in connection with this Agreement, then
Buyer shall obtain at its sole cost and expense an as-built survey of the
Property complying with 1992 ALTA/ACSM minimum standards (the "Survey").
Buyer acknowledges that Buyer has approved the exceptions to title shown in
that certain preliminary title report or owner's title commitment for the
Property issued by the Title Company (the "Title Report") and matters shown
on the Survey (if any) other than those exceptions or matters identified on
EXHIBIT D attached hereto ("Disapproved Title Exceptions"), which
Disapproved Title Exceptions Seller shall remove (or cause to be removed)
as exceptions to title prior to the Closing. Buyer shall have the
continuing right to update the Title Report and the Survey from time to
time and to give Seller notice of any additional Disapproved Title
Exceptions first arising after the date of the Title Report or the Survey,
as the case may be. Within ten (10) business days following receipt of any
written notice of such additional Disapproved Title Exceptions from Buyer,
Seller shall notify Buyer in writing of which of such additional
Disapproved Title Exceptions Seller will agree to cure on or before the
Closing Date; provided, however, that Seller shall satisfy and correct, at
or before the Closing, any Disapproved Title Exceptions constituting a
mortgage, deed of trust or other lien encumbering all or any portion of the
Property (other than liens created by Buyer's acts or omissions) or
otherwise created by Seller's acts or omissions on or after the date of
this Agreement ("Mandatory Cure Items"). In the event Seller elects not to
satisfy or cure any such additional Disapproved Title Exceptions of which
it is so notified, then, within ten (10) business days following receipt of
Seller's election, Buyer shall by written notice to Seller elect one of the
following:
5.4.1. To waive such additional Disapproved Title Exceptions and
to close the transaction contemplated hereby in accordance with the
terms of this Agreement; provided, however, that with respect to any
Disapproved Title Exception which is a Mandatory Cure Item, Buyer
shall be entitled to satisfy or remove any such Disapproved Title
Exception(s) at the Closing and to credit against the Purchase Price
the amount required to satisfy or remove such Mandatory Cure Item(s);
or
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5.4.2. To terminate this Agreement, in which event Buyer shall
be entitled to the immediate return of the Deposit and the parties
hereto shall have no further rights, duties or obligations under this
Agreement, except those rights, duties and obligations that, by the
express terms hereof, survive termination of this Agreement.
5.5. OWNER'S POLICY. On or before the Closing, the Title Company
must be prepared to issue to Buyer an Owner's Policy of Title Insurance for
the Property (the "Title Policy") effective as of the Closing, insuring
Buyer in the amount of the Purchase Price that title to the Property is
vested in Buyer at the Closing, subject only to (a) standard pre-printed
exceptions (other than those preprinted exceptions that can be removed with
a customary seller's affidavit), (b) liens for taxes and assessments not
yet delinquent, (c) those exceptions to title described in the
corresponding Title Report other than the Disapproved Title Exceptions and
(d) exceptions created or suffered by Buyer. Buyer may require an extended
coverage policy without a generic survey exception only if Buyer can timely
provide Title Company with all information necessary in order for the
extended coverage policy to be issued on or before the Closing Date.
Seller shall not suffer any liability in connection with its failure to
remove any title exception; Buyer's sole remedy for Seller's failure to
cause the elimination of a Disapproved Title Exception shall be termination
of this Agreement. Notwithstanding the foregoing, Seller shall cause the
removal of any Mandatory Cure Item at or before the Closing.
5.6. SELLER'S FINANCIAL CONDITION. Seller has not (i) made an
assignment for the benefit of creditors, (ii) filed a petition in
bankruptcy, (iii) been adjudicated insolvent or bankrupt, (iv) petitioned a
court for the appointment of any receiver of or trustee for it or any
substantial part of its property, (v) commenced any proceeding relating to
Seller under any reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect. There shall not have been commenced and be pending
against Seller any proceeding of the nature described in the first
sentence of this Section 5.6. No order for relief shall have been entered
with respect to Seller under the Federal Bankruptcy Code.
5.7. COVENANTS, REPRESENTATIONS AND WARRANTIES. Seller shall
have complied, and at Closing shall then be in compliance, with each and
all of its covenants contained in this Agreement in all material respects,
and the representations and warranties set forth in Paragraph 7 hereof
shall be true, complete and accurate as of the Closing Date in all material
respects.
5.8. SELLER'S DELIVERIES. Seller shall have delivered to Buyer,
in form and substance in accordance with the requirements herein, all
instruments and documents required on Seller's part to effectuate this
Agreement and the transactions contemplated hereby.
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Except for the Buyer's Condition referenced in Section 5.3 above, which is a
condition to Buyer's and Seller's obligations under this Agreement, any one or
more of the foregoing Buyer's Conditions may be waived by Buyer on or before the
Closing Date.
6. BUYER'S DELIVERIES. Provided that all other conditions to Buyer's
obligation to consummate the Closing shall have been or shall concurrently be
satisfied, Buyer shall deliver to Seller through Escrow Holder, on or before the
Closing Date, for disbursement, delivery and recordation, as provided in this
Agreement, the following funds, instruments and documents, the delivery of which
is material to the consummation of the subject transaction:
6.1. FUNDS. Immediately available funds in the amount required
of Buyer under this Agreement including sufficient funds to meet Buyer's
obligations under Sections 4.2, 9 and 10.
6.2. AUTHORITY. Evidence in form and substance reasonably
satisfactory to Seller and its legal counsel that Buyer is authorized to
enter into and consummate the transactions contemplated by this Agreement.
6.3. ASSIGNMENT OF OCCUPANCY AGREEMENTS AND SERVICE CONTRACTS.
An executed counterpart of the Assignment referenced in Section 7.5 below.
6.4. CLOSING STATEMENT. The Closing Statement summarizing the
prorations and other financial aspects of the transaction.
6.5. OTHER DOCUMENTS. Any documents reasonably required of Buyer
by Title Company or Escrow Holder in order to consummate the subject
transaction.
7. SELLER'S DELIVERIES. Provided that all other conditions to Seller's
obligation to consummate the Closing shall have been or shall concurrently be
satisfied, Seller shall deliver to Buyer through Escrow Holder on or before the
Closing, for disbursement, delivery and recordation, as provided in this
Agreement, the following instruments and documents, the delivery of which is
material to the Closing:
7.1. LIMITED WARRANTY DEED. A limited warranty deed (the "Deed")
in substantially the form set forth as EXHIBIT E attached hereto, conveying
to Buyer good and marketable fee simple title to the Real Estate, together
with all rights, members, easements and appurtenances thereto, expressly
subject to the title exceptions approved by Buyer as provided in Section
5.4 above. In addition, Seller shall deliver an executed Real Estate
Transfer Tax Declaration or local equivalent.
7.2. RELEASE OF EXISTING INDEBTEDNESS. Seller shall cause the
Property to be released from all mortgages, deeds of trust, deeds to secure
debt, security agreements, filings and statements and other security
interests relating to any existing indebtedness that is secured in whole or
in part by the Property.
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7.3. SELLER'S AFFIDAVIT. A Seller's Affidavit in the form set
forth as EXHIBIT F attached hereto and made a part hereof.
7.4. BLANKET BILL OF SALE AND TRANSFER. A blanket bill of sale,
transfer and assignment agreement (the "Bill of Sale") in substantially the
form set forth as EXHIBIT G attached hereto, assigning to Buyer all of
Seller's right, title and interest in and to any and all Personal Property.
7.5. ASSIGNMENT OF LEASES AND SERVICE CONTRACTS. An assignment
and assumption of Leases and Service Contracts and other Intangible
Property (the "Assignment") in substantially the form set forth as
EXHIBIT H attached hereto, assigning to Buyer all of Seller's right, title
and interest in and to the Leases and Service Contracts (that Buyer shall
have elected or elects to assume) and other Intangible Property with a
cross-indemnity between Seller and Buyer, with Seller indemnifying Buyer
with respect to any liability arising under the Leases and Service
Contracts for the period up to, but not including, the Closing Date, and
Buyer indemnifying Seller with respect to any liability arising under the
Leases and Service Contracts arising on and after the Closing Date,
respectively, and with an express assumption by Buyer of Seller's
obligations under the Leases and Service Contracts arising on and after the
Closing Date.
7.6. CERTIFIED RENT ROLL. Seller shall deliver to Buyer a
certificate, in substantially the form of EXHIBIT I attached hereto,
pursuant to which Seller shall certify to Buyer a then current Rent Roll
for the Property.
7.7. SELLER'S CERTIFICATE. A certificate addressed to Buyer
stating that the representations and warranties set forth in Section 14 are
true and correct as of the Closing in all material respects or stating any
exceptions thereto.
7.8. CERTIFICATE OF NON-FOREIGN STATUS. A certificate addressed
to Buyer made in compliance with Paragraph 1445 of the Internal Revenue
Code that Seller is not a foreign person and not subject to withholding
requirements.
7.9. CLOSING STATEMENT. The Closing Statement summarizing the
prorations and other financial aspects of the transaction contemplated by
this Agreement.
7.10. LEASES AND SERVICE CONTRACTS. The original Leases,
Service Contracts, Warranties, certificate(s) of occupancy, permits and
licenses.
7.11. AUTHORITY. Evidence in form and substance reasonably
satisfactory to Buyer and its legal counsel that Seller is authorized to
enter into and consummate the transactions contemplated by this Agreement.
7.12. KEYS. Seller shall deliver to Buyer all of the keys in
Seller's possession to any door or lock in or on the Property.
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7.13. TENANT FILES. The current tenant files, including all
correspondence, notices, financial information, sales reports and other
information.
7.14. MATERIALS. All materials pertaining to the operation
and maintenance of the Property.
7.15. OTHER DOCUMENTS. All other documents reasonably
required of Seller by Escrow Holder in order to consummate the subject
transaction.
8. CLOSING ESCROW. On the Closing Date, provided that Escrow Holder
shall have received all of the documents, instruments and funds required to be
delivered by Buyer and Seller in accordance with Articles 6 and 7 above (other
than those documents and other items specified in Sections 7.10, 7.12, 7.13 and
7.14 above, which shall be deemed delivered concurrently with delivery of
possession of the Property to Buyer), and provided that Title Company is
prepared to issue the Title Policy upon the Closing and that all other
conditions to the Closing have been satisfied (or waived by the party to this
Agreement which benefits from such condition), Escrow Holder shall promptly
perform all of the following:
8.1. RECORDING. Cause the Deed to be recorded with the real
property records of the county in which the Property is located.
8.2. BUYER'S DELIVERIES. Deliver to Seller all of the items
pursuant to Section 6 above.
8.3. SELLER'S DELIVERIES. Deliver to Buyer the Bill of Sale, the
Assignment and all of the other items pursuant to Article 7 except as
otherwise provided above.
8.4. COSTS AND PRORATIONS. Pay the costs and apply the
prorations in accordance with Articles 9 and 10 below.
8.5. ISSUANCE OF TITLE POLICY. Cause the Title Policy to be
issued and delivered to Buyer.
8.6. DISBURSEMENT OF PURCHASE PRICE. Disburse to Seller, or in
accordance with Seller's instructions (after making appropriate adjustments
for costs and prorations as provided in this Agreement), all funds
deposited with Escrow Holder by Buyer in payment of the Purchase Price.
9. COSTS. Seller shall pay (a) one-half (1/2) of Escrow Holder's fee,
(b) any documentary transfer and stamp taxes payable in connection with the
recordation of the Deed and (c) Escrow Holder's customary charges to a seller
for document drafting, recording and miscellaneous charges. Buyer shall pay (i)
one-half (1/2) of Escrow Holder's fee, (ii) the premiums and other costs for the
Title Policy, including without limitation any endorsements relating thereto,
(iii) Escrow Holder's customary charges to a buyer for document drafting,
recording and miscellaneous charges, and (iv) all costs associated with Buyer's
financing of any or all of the
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Purchase Price, including without limitation any applicable intangible taxes,
documentary stamps and recording costs and any fees for any loan, appraisal,
title insurance policy or other service.
10. PRORATIONS. The following shall be prorated between Buyer and Seller
as of 11:59 p.m. local time of the day immediately preceding the Closing Date,
on the basis of the actual number of days elapsed during the month in which the
Closing occurs: general and special county and city real property taxes and
special assessments (collectively, "Taxes") for the tax period then in effect
and insurance premiums (but only if Buyer is assuming Seller's insurance policy
or policies). Proration of Taxes shall be based on the most recent official tax
bills or notice of valuation available for the fiscal year in which the Closing
occurs, with due allowance to be made for the maximum available discount or
other exemptions to the extent permissible for said year, and to the extent the
tax bills do not accurately reflect the actual Taxes assessed against the
Property (or any portion of the Property) and allocable either to the period
before the Closing or to the period after the Closing, then Buyer and Seller
shall adjust the actual Taxes between Buyer and Seller, outside of Escrow, as
soon as reasonably possible following the Closing. In addition to the foregoing
apportionments, Seller shall receive all rents and other income accrued, and
shall pay all other expenses accrued or incurred, in connection with the
ownership or operation of Property before the Closing Date, and Buyer shall
receive all rents and other income accruing, and shall pay all other expenses
accrued or incurred, in connection with the ownership or operation of Property
on or after the Closing Date, all of which rents, other income and expenses
shall be prorated as of the Closing. Rents and other income, if any, collected
by Buyer after the Closing shall be applied first to any amounts due to Buyer
and then, to the extent such rents or other income relate to the period ending
on or before the Closing, such rents or other income shall be paid to Seller
within ten (10) days after end of the month in which such amounts were
collected. Buyer shall incur no obligation to Seller for Buyer's failure to
collect such rentals or other income. All security and any other refundable
deposits paid by tenants to Seller pursuant to tenant leases shall be delivered
by certified funds to Buyer at the Closing or, at Seller's option, credited to
Buyer against the cash portion of the Purchase Price at the Closing. Escrow
Holder shall not be concerned with any prorations that are to be made after the
Closing pursuant to this Agreement.
11. FAILURE OF ESCROW TO CLOSE. If Escrow fails to close by reason of a
failure of a Buyer's Condition in accordance with Article 5 above, or because of
a default by Seller under this Agreement, Buyer shall be entitled to the
immediate return of the Deposit upon delivery of written notice by Buyer to
Escrow Holder. If this Agreement or Escrow is terminated, Buyer shall return to
Seller, within two (2) business days after the termination of Escrow, all
documents and materials provided by Seller or its agents to Buyer or its agents
in connection with this Agreement or the Property and all copies thereof.
12. LIQUIDATED DAMAGES. THE PARTIES HAVE DISCUSSED AND NEGOTIATED IN GOOD
FAITH THE QUESTION OF THE DAMAGES THAT WOULD BE SUFFERED BY SELLER IF THE
CLOSING DOES NOT OCCUR BECAUSE BUYER BREACHES THIS AGREEMENT AND HAVE ENDEAVORED
TO REASONABLY ESTIMATE SUCH DAMAGES. THEY AGREE THAT (I) SUCH DAMAGES ARE AND
WILL BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, (II) LIQUIDATED
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DAMAGES IN THE AMOUNT OF THE DEPOSIT (AS IT MAY BE INCREASED FROM TIME TO TIME)
ARE AND WOULD BE REASONABLE AS A MEASURE OF SUCH DAMAGES, (III) IN THE EVENT OF
SUCH BREACH, SELLER SHALL BE ENTITLED TO RETAIN THE DEPOSIT AS SUCH LIQUIDATED
DAMAGES, AND (IV) IN CONSIDERATION OF THE PAYMENT OF SUCH LIQUIDATED DAMAGES,
SELLER SHALL BE DEEMED TO HAVE WAIVED ALL OTHER CLAIMS FOR DAMAGES OR RELIEF AT
LAW OR IN EQUITY ON ACCOUNT OF THE FAILURE OF THE CLOSING TO OCCUR, EXCEPT FOR:
(A) CLAIMS FOR THE RETURN OR OTHER DELIVERY OF DOCUMENTS IN CONNECTION WITH THIS
AGREEMENT; (B) ACTIONS TO EXPUNGE A LIS PENDENS OR OTHER CLOUDS ON TITLE CAUSED
BY BUYER; (C) CLAIMS ON ACCOUNT OF BUYER'S INDEMNITY OBLIGATIONS UNDER THIS
AGREEMENT, AND (D) ATTORNEYS' FEES AND COSTS INCURRED BY SELLER INCIDENT TO
CLAUSES (A) THROUGH (C). NOTWITHSTANDING THE FOREGOING, IN THE EVENT BUYER
OBJECTS TO, FAILS TO COOPERATE WITH OR OTHERWISE OPPOSES SELLER'S WITHDRAWAL OF
THE DEPOSIT OUT OF THE ESCROW, SELLER SHALL HAVE ALL OF THE REMEDIES OTHERWISE
AVAILABLE TO SELLER AT LAW OR IN EQUITY.
SELLER'S INITIALS BUYER'S INITIALS
--------- -----------
13. POSSESSION. Seller shall deliver possession of the Property to Buyer
on the Closing Date, subject to the rights of tenants.
14. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to and covenants with Buyer that the following representations and
warranties are complete and accurate as of the date of this Agreement and will
be complete and accurate as of the Closing Date:
14.1. AUTHORITY. Seller is a limited partnership, duly
organized, validly existing and in good standing under the laws of the
State of Arizona, and Seller has full right, power and authority to enter
into this Agreement and to perform all of the obligations and liabilities
of Seller hereunder. This Agreement has been duly and validly authorized,
executed and delivered by and on behalf of Seller and, assuming the due
authorization, execution and delivery thereof by and on behalf of Buyer,
constitutes a valid and binding obligation of Seller enforceable in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, reorganization, receivership and other similar laws affecting
the rights and remedies of creditors generally and to general equitable
principles (whether considered in a proceeding at law or in equity).
Neither the execution nor delivery of this Agreement or any other documents
executed and delivered, or to be executed and delivered, by Seller in
connection with the transactions described herein will violate any
provision of Seller's organizational documents or of any agreements,
regulations or laws to which Seller is bound.
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14.2. NO OTHER AGREEMENTS. To Seller's actual knowledge,
other than this Agreement, the Leases, the Service Contracts and the
matters identified on EXHIBIT J attached hereto, there are no leases,
service contracts, management agreements or other agreements or instruments
in force or effect that (a) grant to any person or entity any right, title,
interest or benefit in or to all or any part of the Property or (b) any
rights relating to the use, maintenance, operation, construction or
management of all or any part of the Property.
14.3. NO LITIGATION. Except as set forth in EXHIBIT K
attached hereto, Seller has no actual knowledge, nor has Seller received
any notice, of any pending litigation or proceeding brought by any person
or entity or Governmental Authority against Seller with respect to the
Property.
14.4. POSSESSION. To Seller's actual knowledge, except for
the tenants in possession of the Property under the Leases, as shown in the
Rent Roll, there are no parties in possession of or claiming any possession
to any portion of the Property as lessees, tenants at sufferance,
licensees, easement holders, trespassers or otherwise.
14.5. NO ASSESSMENTS. Seller has received no notice of any
(a) assessments against the Property that are unpaid, whether or not they
have become liens, except ad valorem taxes for the current year, or (b) any
change in the assessed value or basis for levy of taxes regarding the
Property.
14.6. NOTICE OF CONDEMNATION; RIGHT OF WAY MATTERS. Seller
has received no notice of any threatened or contemplated action by any
Governmental Authority having the power of eminent domain, which might
result in any part of the Property being taken by condemnation or conveyed
in lieu thereof. Seller shall, promptly upon receiving any such notice,
give Buyer written notice thereof.
14.7. VIOLATION OF LAWS. Seller has received no notice that
any Governmental Authority has determined that there are any violations of
zoning, health, environmental, or other statutes, ordinances, or
regulations affecting the Property. In the event Seller receives notice of
any such violations prior to Closing affecting the Property, Seller shall
promptly notify Buyer thereof.
14.8. NO BANKRUPTCY. Seller is not a party to any voluntary
or involuntary proceedings in bankruptcy, reorganization or similar
proceedings under the federal bankruptcy laws or under any state laws
relating to the protection of debtors, or subject to any general assignment
for the benefit of creditors, and to Seller's actual knowledge, no such
action has been threatened.
14.9. ZONING. Seller shall, promptly upon receiving any
notice of any contemplated or threatened rezoning of the Property, give
Buyer written notice thereof.
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14.10. SERVICE CONTRACTS. Attached hereto as EXHIBIT L and
incorporated herein is a complete and accurate list of all of the Service
Contracts and as of the date of this Agreement Seller has delivered to
Buyer complete and accurate copies of all such Service Contracts. Seller
has received no notice of any default, or claim of default, on the part of
any party to any of such Service Contracts, and within five (5) business
days following mutual execution of this Agreement, Buyer shall notify
Seller of any Service Contract that Buyer wishes to assume and Seller, at
its sole cost and expense, shall terminate all other Service Contracts
within five (5) days prior to Closing in accordance with (but only to the
extent permitted under) the governing terms of the applicable Service
Contract.
14.11. LEASES. The copies of the Leases delivered or made
available by Seller to Buyer in accordance with Section 7.10 above are
complete and accurate, and there are no amendments or modifications thereto
not disclosed on the rent roll delivered in accordance with Section 7.6
above or otherwise in writing by Seller to Buyer. Seller hereby covenants
and agrees with Buyer that, so long as this Agreement remains in full force
and effect, Seller will continue to operate and manage the Property in
substantially the same manner as it has been operated and managed in the
past.
14.12. AVAILABILITY OF AGREEMENTS. Seller shall make
available to Buyer for review at Seller's offices at the Property during
normal business hours, and upon reasonable advance notice, full, true,
correct and complete copies of all Service Contracts, Leases and all
written amendments, modifications, agreements, or understandings relating
thereto as are in effect from time to time while this Agreement remains in
effect.
14.13. EMPLOYEE LIABILITY. To Seller's actual knowledge,
after the Closing Buyer shall not be obligated to continue the employment
of any of the employees of Seller or Seller's property manager. To
Seller's actual knowledge, all of the employees for the Property are
employees of Seller's property manager and not of Seller.
14.14. HAZARDOUS MATERIALS. To Seller's actual knowledge,
Seller has not generated, disposed of, released or found any Hazardous
Materials (hereinafter defined) on the Property, and Seller has no actual
knowledge of the existence of any areas for the generation, storage or
disposal of any Hazardous Materials on the Property. Seller has received
no notice that any Governmental Authority has determined that there are any
violations of Environmental Laws (as hereinafter defined) affecting the
Property. In the event Seller receives notice of any such Hazardous
Materials on the Property or any such violation affecting the Property
prior to the Closing, Seller immediately shall notify Buyer thereof.
"Hazardous Materials" means petroleum, including crude oil or any fraction
thereof, asbestos, radon gas, polychlorinated biphenyls, and any other
substance identified as hazardous in the following, as the same may have
been amended: the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601, ET SEQ.; the Resource
Conservation Act of 1976, 42 U.S.C. Section 6921, ET SEQ.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601, ET SEQ.; the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section 136; the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251, ET SEQ.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, ET SEQ.;
the
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Federal Solid Waste Disposal Act, 42 U.S.C. Section 6901, ET SEQ.; the
Clean Air Act, 42 U.S.C. Section 7401, ET SEQ.; and any other legislation
or ordinance of any Governmental Authority identified by its terms as
pertaining to hazardous materials, waste or asbestos ("Environmental
Laws").
14.15. AGREEMENTS AFFECTING THE PROPERTY. Subject to the
provisions in Section 14.11 hereof, Seller hereby covenants and agrees with
Buyer that, so long as this Agreement remains in full force and effect,
Seller will not sell, assign, convey (absolutely or as security), grant a
security interest in, or otherwise encumber or dispose of, the Property (or
any interest or estate therein) without the prior written consent of the
Buyer. Seller has not executed and will execute no exclusive or other
brokerage agreements which will survive the Closing Date. Seller shall
not enter into Service Contracts from and after the date of this Agreement
without the prior written consent of Buyer, which consent may be granted or
withheld in Buyer's sole and absolute discretion; provided, however, that
Seller hereby covenants and agrees with Buyer that, so long as this
Agreement remains in full force and effect, Seller will continue to operate
and manage the Property in substantially the same manner as it has been
operated and managed in the past.
14.16. MAINTENANCE OF INSURANCE. Seller shall maintain in
full force and effect all existing policies of insurance relating to the
Property through and including the Closing Date, shall pay all premiums
with respect to such insurance on or before the due date therefor and shall
not knowingly take any action which would cause such insurance not to
remain in full force and effect or fail knowingly to take any action
required to maintain such insurance in full force and effect.
14.17. FIXTURES. All fixtures and articles of Personal
Property included in and which are part of the sale are now, and at the
Closing will be, owned by Seller free and clear of any conditional bills of
sale, chattel mortgages, security agreements or financing statements, or
other liens of security interest created by Seller, and shall be
transferred to Buyer as a part of the transaction.
14.18. SECURITY DEPOSITS. Security deposits shown in the
certified rent roll are a full, true and complete list of all of the
security deposits for the Property and are now held by Seller and Seller's
property manager under the terms of the Leases, and none have been
forfeited by any existing tenant.
14.19. NON-FOREIGN STATUS. Seller is not a "foreign person"
as that term is defined in the Internal Revenue Code of 1986, as amended,
and the regulations promulgated pursuant thereto, and Buyer has no
obligation under the Internal Revenue Code Section 1445 to withhold and pay
over to the Internal Revenue Service any part of the "amount realized" by
Seller in the transaction contemplated hereby (as such term is defined in
the regulations issued under Internal Revenue Code Section 1445).
14.20. REPRESENTATIONS, WARRANTIES AND COVENANTS RE-MADE AT
CLOSING. The foregoing warranties and representations are true, and the
foregoing covenants are in full
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force and effect and binding on Seller as of the date hereof and shall be
in full force and effect and deemed to have been automatically reaffirmed
and restated by Seller as of the Closing Date.
For purposes of this Section 14, "Seller's actual knowledge" shall mean the
knowledge of (i) J. Bradley Forrester, (ii) Ralph Tilley and (iii) Pam Anderson
without any duty of investigation or inquiry and "notice" shall mean written
notice. The representations and warranties of Seller shall survive the Closing
for six (6) months, and any claim made by Buyer against Seller with respect
thereto must be asserted within such six-month period.
15. BUYER'S REPRESENTATIONS AND WARRANTIES. The accuracy and completeness
of the following constitute a condition to the Closing, and Buyer represents and
warrants to Seller that the following is complete and accurate as of the date of
this Agreement and shall be complete and accurate as of the Closing, and shall
survive the Closing: Buyer is duly organized and validly existing and is (or
will at the Closing be) qualified to conduct its business and has the legal
power, right and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. All requisite action (corporate,
partnership, trust or otherwise) has been taken by Buyer in connection with
entering into this Agreement and the consummation of the transactions
contemplated by this Agreement. The individual executing this Agreement on
behalf of Buyer has the legal power, right and actual authority to bind Buyer to
the terms and conditions of this Agreement. This Agreement and all documents
required by this Agreement to be executed by Buyer are and are valid, legally
binding obligations of and enforceable against Buyer in accordance with their
terms. The foregoing warranties and representations are true, and the foregoing
covenants are in full force and effect and binding on Buyer as of the date
hereof and shall be in full force and effect and deemed to have been
automatically reaffirmed and restated by Buyer as of the Closing Date.
16. CONDEMNATION. If all or any material portion of the Property is taken
by eminent domain (or is the subject of a pending or contemplated taking which
has not been consummated) before the Closing, then (a) Seller, if Seller has
actual knowledge thereof, shall notify Buyer of such fact and (b) Buyer shall
have the option to terminate this Agreement upon written notice to Escrow Holder
and Seller given no later than thirty (30) business days after Seller has given
such notice. For purposes of the foregoing sentence, a portion of the Property
shall not be deemed material unless the taking thereof diminishes the rentable
area of the building or the recreation facilities or restricts access to the
Property. If this Agreement is so terminated, then (i) Buyer shall pay all
costs associated with the cancellation of the Escrow pursuant to this Section,
(ii) neither Buyer nor Seller shall have any further rights or obligations under
this Agreement (except to the extent of any indemnities under this Agreement
with respect to events occurring before such termination, which indemnities
shall survive any such termination), and (iii) Escrow Holder shall, without
requiring any further instruction from Seller, immediately return to Buyer the
Deposit and all interest accrued thereon. If Buyer does not terminate this
Agreement within such thirty-day period, then (A) Buyer shall not thereafter
have the right to terminate this Agreement by reason of such taking and
(B) Buyer and Seller shall proceed to the Closing in accordance with this
Agreement, without modification of the terms of this Agreement, except that
(1) the Property will not include the property so taken, (2) the Purchase Price
will be reduced
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by the amount of any awards for such taking awarded to Seller as of the Closing
Date, and (3) Seller shall assign and turn over to Buyer, and Buyer shall be
entitled to receive and retain, all awards for such taking not yet awarded as of
the Closing.
17. DESTRUCTION. If the Property or any portion thereof is damaged by
fire or other casualty on or before the Closing Date, Seller immediately shall
notify Buyer of such damage. If the estimated cost to repair the damage is less
than the greater of (i) $400,000 and (ii) five percent (5%) of the Purchase
Price and does not eliminate or materially impair access to the Property, Buyer
and Seller shall proceed to the Closing in accordance with the terms of this
Agreement, without modification of the terms of this Agreement, in which event
Buyer shall be entitled to an assignment of the proceeds of all insurance
relating to such fire or other casualty. If the estimated cost to repair the
damage equals or exceeds the greater of (i) $400,000 and (ii) five percent (5%)
of the Purchase Price, Buyer may elect either (a) to terminate this Agreement
and receive the return of the Deposit (minus any escrow or title cancellation
fees), in which case neither party shall have any additional rights or
obligations under this Agreement, or (b) to proceed to the Closing in accordance
with this Agreement, without modification of the terms of this Agreement, in
which event Buyer shall be entitled to an assignment of the proceeds of all
insurance relating to such fire or other casualty, if any. Such election shall
be made by Buyer within thirty (30) business days following Seller's
notification to Buyer. Buyer's failure to elect to terminate this Agreement
within such thirty-day period shall conclusively be deemed an election to
proceed to the Closing.
18. BROKERS. Each party to this Agreement represents and warrants to the
other that no real estate or business broker, agent, finder, or other person is
responsible for bringing about or negotiating this Agreement and that such party
has not dealt with any real estate broker, agent, finder or person relative to
this Agreement in any manner. Each party to this Agreement shall defend,
indemnify, and hold harmless the other party to this Agreement against all
liabilities, damages, losses, costs, expenses, attorneys' fees and claims
arising from (a) any breach of such representation by such indemnifying party
set forth in the preceding sentence, and (b) any claims that may be made against
such indemnified party by any real estate broker, agent, finder or other person
alleging to have acted on behalf of or to have dealt with such indemnifying
party.
19. NO RELIANCE - AS-IS. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT OR IN ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT HERETO, BUYER
ACKNOWLEDGES THAT IT IS PURCHASING THE PROPERTY IN RELIANCE SOLELY ON:
(I) BUYER'S INSPECTION OF THE REAL PROPERTY, THE PERSONAL PROPERTY AND THE
IMPROVEMENTS; (II) BUYER'S INDEPENDENT VERIFICATION OF THE TRUTH OF ANY
STATEMENTS CONTAINED IN THE DOCUMENTS MADE AVAILABLE TO BUYER; AND (III) THE
OPINIONS AND ADVICE OF CONSULTANTS AND ATTORNEYS ENGAGED BY BUYER CONCERNING THE
PROPERTY. BUYER FURTHER ACKNOWLEDGES THAT BEFORE ITS EXECUTION OF THIS
AGREEMENT BUYER SHALL HAVE PERFORMED OR WILL HAVE HAD AN OPPORTUNITY TO PERFORM
ALL OF ITS DUE DILIGENCE INVESTIGATIONS OF AND WITH RESPECT TO THE PROPERTY AS
BUYER DEEMS APPROPRIATE, INCLUDING ENGINEERING STUDIES, SOILS TESTS,
ENVIRONMENTAL SURVEYS AND TESTING, PHYSICAL INSPECTIONS, ALTA OR OTHER SURVEYS
AND MARKET ANALYSES AS WELL AS BUYER'S EVALUATION OF THE CONDITION AND STATUS OF
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THE PERSONAL PROPERTY AND IMPROVEMENTS AND THE OPERATION AND FUTURE PROSPECTS OF
THE PROPERTY. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN
ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT HERETO, AT THE CLOSING, BUYER
ACCEPTS THE PROPERTY AND ALL MATTERS RELATING TO THE PROPERTY IN THEIR "AS IS,"
"WHERE-IS" AND "WITH ALL FAULTS" CONDITION OR STATUS AS OF THE CLOSING DATE,
INCLUDING SUCH MATTERS AS: SOILS AND GEOLOGICAL CONDITION, TOPOGRAPHY, AREA AND
CONFIGURATION OF THE REAL PROPERTY; THE AGE AND CONDITION OF THE IMPROVEMENTS
AND PERSONAL PROPERTY; THE EXISTENCE OF ANY HAZARDOUS OR TOXIC SUBSTANCES OR
MATERIALS, CONSTRUCTION DEFECTS OR OTHER MATTERS WHICH WOULD OR COULD
NECESSITATE ABATEMENT OR REMEDIATION ACTION BY THE PROPERTY'S OWNER; ANY
PHYSICAL OR MECHANICAL DEFECTS IN THE IMPROVEMENTS OR PERSONAL PROPERTY; ANY
EASEMENT, LICENSE OR ENCROACHMENT WHICH IS NOT A MATTER OF PUBLIC RECORD,
WHETHER OR NOT VISIBLE UPON INSPECTION OF THE PROPERTY; THE ZONING AND OTHER
LAND USE REGULATIONS APPLICABLE TO THE PROPERTY; AND ANY OTHER MATTER RELATING
TO THE PROPERTY INCLUDING, BUT NOT LIMITED TO, VALUE, TITLE, INCOME,
FEASIBILITY, COST, MARKETING AND INVESTMENT RETURN. BUYER ACKNOWLEDGES AND
AGREES THAT SELLER IS NOT MAKING ANY EXPRESS OR IMPLIED WARRANTIES OR
REPRESENTATIONS OF ANY KIND OR CHARACTER WITH RESPECT TO THE PROPERTY. IN
PARTICULAR BUT NOT BY WAY OF LIMITATION OF THE FOREGOING, EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT OR IN ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT
HERETO, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, RELATING
TO COMPLIANCE OF THE IMPROVEMENTS WITH CURRENT BUILDING CODES, INCLUDING WITHOUT
LIMITATION THOSE RELATING TO UPDATED OR REVISED STANDARDS FOR PLUMBING,
ELECTRICAL, STRUCTURAL OR SEISMIC MATTERS. BUYER WARRANTS AND REPRESENTS TO
SELLER THAT BUYER HAS NOT RELIED ON AND WILL NOT RELY ON, EITHER DIRECTLY OR
INDIRECTLY, ANY WARRANTY OR REPRESENTATION OF SELLER NOT EXPLICITLY SET FORTH IN
THIS AGREEMENT.
20. INDEMNITY REGARDING INSPECTION. In consideration of Seller's
permission to Buyer and its agents to perform investigations and testing on and
about the Property prior to the Closing, Buyer shall defend, indemnify and hold
harmless Seller and Seller's partners, and their respective officers, employees,
agents, contractors, successors, assigns, and affiliates (collectively, the
"Indemnitees"), and the Property from all claims, costs, liens, actions and
judgments (including attorneys' fees and other defense costs actually incurred
by Seller) resulting from Buyer's investigation of the Property or its attempts
to obtain any regulatory approvals in connection with the Property, or otherwise
caused by Buyer or any of its employees, agents or independent contractors,
except for the non-negligent release of Hazardous Materials already on the
Property occasioned thereby. Unless and until the Closing occurs, Buyer shall
maintain all the information which it obtains in connection with the Property in
strict confidence and shall not reveal any of such information to any party
other than those parties to which it may otherwise be required to disclose in
accordance with applicable law. Buyer shall, at Buyer's sole cost, promptly
repair any damage resulting from its activities on the Property and restore the
Property to substantially the same condition as before Buyer or any of its
agents first entered the Property. If the Closing does not occur on or before
the Closing Date for any reason other than a breach of this Agreement by Seller,
Buyer shall provide Seller, at Seller's cost, copies of all third-party
engineering and environmental reports and materials derived from Buyer's
investigation of the
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Property, concurrently with reimbursement by Seller of Buyer's out-of-pocket
costs in procuring such reports and materials.
21. BUYER'S REMEDIES. In the event the transaction contemplated hereby is
not consummated as a result of Seller's default hereunder, Buyer's sole and
exclusive remedies shall be either (i) to seek from Escrow Holder the return of
the Deposit and any other documents and funds then held by Escrow Holder and
Seller shall reimburse Buyer for Buyer's reasonable and documented out-of-pocket
expenses incurred in connection with the purchase transaction contemplated under
this Agreement (but in no event to exceed one-fourth percent (1/4%) of Purchase
Price)or (ii) to seek specific performance of Seller's obligations hereunder by
delivering the Purchase Price into the Escrow; provided, however, that as
conditions precedent to such action for specific performance, [A] no uncured
default in the performance of Buyer's obligations under this Agreement shall
exist and no event shall have occurred which with the passage of time or with
notice, or both, could become such an event of default, and [B] Buyer shall not
seek to amend the Purchase Price in such action.
22. SELLER'S PARTNERS' APPROVAL. Notwithstanding anything to the contrary
contained in this Agreement, the Closing shall not occur unless and until Seller
shall have obtained written approval ("Seller's Consent") from those partners of
Seller (or those partners of the partners of Seller, as the case may be) whose
approval is legally required before Seller may sell the Property to Buyer
hereunder. Seller shall seek such approval immediately after the Escrow Opening
Date. If Seller's Consent is not obtained within twenty-one (21) days after the
Escrow Opening Date (as such period may be extended by Seller at Seller's sole
option for up to an additional forty (40) days), Seller or Buyer may terminate
this Agreement by written notice delivered to the other before Seller's Consent
is obtained, in which case Buyer shall be entitled to the return of the Deposit
and neither Buyer nor Seller shall have any further rights or obligations under
this Agreement (except to the extent of any indemnities under this Agreement
with respect to events occurring before such termination, which indemnities
shall survive any such termination and except that Seller shall reimburse Buyer
for Buyer's reasonable and documented out-of-pocket engineering and
environmental expenses (but in no event to exceed $3,600)).
23. FURTHER ASSURANCES. Each party to this Agreement shall execute and
deliver all instruments and documents and take all actions as may be reasonably
required or appropriate to carry out the purposes of this Agreement.
24. COUNTERPARTS AND EXHIBITS. This Agreement may be executed in
counterparts, each of which is deemed an original and all of which together
constitute one document. All exhibits attached to and referenced in this
Agreement are incorporated into this Agreement.
25. TIME OF ESSENCE. Time and strict and punctual performance are of the
essence with respect to each provision of this Agreement.
26. ATTORNEY'S FEES. The prevailing party in any litigation, arbitration,
mediation, bankruptcy, insolvency or other proceeding ("Proceeding") relating to
the enforcement or interpretation of this Agreement may recover from the
unsuccessful party all costs, expenses and
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actual attorney's fees (including expert witness and other consultants' fees and
costs) relating to or arising out of (a) the Proceeding (whether or not the
Proceeding proceeds to judgment), and (b) any post-judgment or post-award
proceeding including, without limitation, one to enforce or collect any judgment
or award resulting from the Proceeding. All such judgments and awards shall
contain a specific provision for the recovery of all such subsequently incurred
costs, expenses and actual attorney's fees.
27. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state in which the Property is located. Each
party hereby authorizes and accepts service of process sufficient for personal
jurisdiction in any action against it as contemplated by this paragraph by
registered or certified mail, return receipt requested, postage prepaid, to its
address for the giving of notices set forth in this Agreement.
28. MODIFICATION. This Agreement may be modified only by a writing
executed by the party to this Agreement against whom enforcement of the
modification is sought.
29. PRIOR UNDERSTANDINGS. This Agreement and all documents specifically
referred to and executed in connection with this Agreement: (a) contain the
entire and final agreement of the parties to this Agreement with respect to the
subject matter of this Agreement, and (b) supersede all negotiations,
stipulations, understandings, agreements, representations and warranties, if
any, with respect to such subject matter, which precede or accompany the
execution of this Agreement.
30. INTERPRETATION. Whenever the context so requires in this Agreement,
all words used in the singular may include the plural (and vice versa) and the
word "person" includes a natural person, a corporation, a firm, a partnership, a
joint venture, a trust, an estate or any other entity. The terms "includes" and
"including" do not imply any limitation. Unless "business day " is specified,
the term "day" means a calendar day. The term "business day" means any day
other than a Saturday, Sunday or Federal or other holiday in the State in which
the Property is located. If the last day for any act falls on a day other than
a business day, the time for performance shall be extended to the next business
day. No remedy or election under this Agreement is exclusive, but rather, to
the extent permitted by applicable law, each such remedy and election is
cumulative with all other remedies at law or in equity. The paragraph headings
in this Agreement (a) are included only for convenience, (b) do not in any
manner modify or limit any of the provisions of this Agreement and (c) may not
be used in the interpretation of this Agreement. Each provision of this
Agreement is valid and enforceable to the fullest extent permitted by law. If
any provision of this Agreement (or the application of such provision to any
person or circumstance) is or becomes invalid or unenforceable, the remainder of
this Agreement, and the application of such provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected by such invalidity or unenforceability.
31. SUCCESSORS-IN-INTEREST AND ASSIGNS. Buyer may not assign its rights
under this Agreement to any person or entity without the prior written consent
of Seller, which consent may be withheld in Seller's sole and absolute
discretion; provided, however, that Buyer may assign
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such rights to a subsidiary wholly-owned by Buyer upon written notice given to
Seller not less than five (5) business days prior to the Closing. No assignment
by Buyer of any of its rights or obligations under this Agreement shall relieve
Buyer of any of its obligations under this Agreement unless Seller expressly
agrees to such release in writing. Subject to the foregoing, this Agreement
shall be binding on and shall inure to the benefit of the successors-in-interest
and assigns of each party to this Agreement.
32. NOTICES. Each notice and other communication required or permitted to
be given under this Agreement ("Notice") must be in writing. Notice is duly
given to another party upon: (a) hand delivery to the other party, (b) receipt
by the other party when sent by facsimile to the address and number for such
party set forth below (provided, however, that the Notice is not effective
unless a duplicate copy of the facsimile Notice is promptly given by one of the
other methods permitted under this paragraph), (c) three business days after the
Notice has been deposited with the United States postal service as first class
certified mail, return receipt requested, postage prepaid, and addressed to the
party as set forth below, or (d) the next business day after the Notice has been
deposited with a reputable overnight delivery service, postage prepaid,
addressed to the party as set forth below with next-business-day delivery
guaranteed, provided that the sending party receives a confirmation of delivery
from the delivery-service-provider.
If to Seller:
Village at the Foothills (Phase I)
Joint Venture Limited Partnership
c/o Continental American Properties, Ltd.
1764 San Diego Avenue
San Diego, California 92110-1906
Attention: Scott Dupree, Esq.
Telephone: (619) 297-6771
Telecopy: (619) 294-2451
With a copy to:
Hughes Hubbard & Reed LLP
350 South Grand Avenue, Suite 3600
Los Angeles, California 90071-3442
Attention: George A. Furst, Esq.
Telephone: (213) 613-2839
Telecopy: (213) 613-2950
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If to Buyer:
DOC Investors, LLC
c/o Lend Lease Real Estate Investments, Inc.
3424 Peachtree Road, N.E., Suite 800
Atlanta, Georgia 30326
Attention: Theodore Klinck
Telephone: (404) 848-8744
Telecopy: (404) 848-8930
With a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attention: William Fryer, Esq.
Telephone: (404) 572-4600
Telecopy: (404) 572-5148
If to Escrow Holder:
First American Title Insurance Company
114 East Fifth Street
Santa Ana, California 92701
Attention: Toni Rice-Groetsch
Telephone: (800) 854-3643
Telecopy: (714) 558-4702
Each party shall make a reasonable, good faith effort to ensure that it will
accept or receive Notices to it that are given in accordance with this
paragraph. A party may change its address for purposes of this paragraph by
giving the other party(ies) written notice of a new address in the manner set
forth above.
33. WAIVER. Any waiver of a default or provision under this Agreement must
be in writing. No such waiver shall constitute a waiver of any other default or
provision concerning the same or any other provision of this Agreement. No
delay or omission by a party in the exercise of any of its rights or remedies
constitutes a waiver of (or otherwise impairs) such right or remedy. A consent
to or approval of an act does not waive or render unnecessary the consent to or
approval of any other or subsequent act.
34. DRAFTING AMBIGUITIES. Each party to this Agreement and its legal
counsel have reviewed and revised this Agreement. The rule of construction that
ambiguities are to be resolved against the drafting party or in favor of the
party receiving a particular benefit under an
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agreement shall not be employed in the interpretation of this Agreement or any
amendment to this Agreement.
35. THIRD PARTY BENEFICIARIES. Nothing in this Agreement is intended to
confer any rights or remedies on any person other than the parties to this
Agreement and their respective successors-in-interest and permitted assignees.
36. CONCURRENT CLOSING. Notwithstanding anything to the contrary contained
in this Agreement, the Closing shall be subject to and contingent upon, and
shall occur concurrently with, the Closing of the purchase transactions for the
following properties between Seller (or entities affiliated with Seller) and
Buyer (the "Concurrent Closing Contingency"): Autumn Heights, Creekside Oaks,
Lakeview Village, Las Colinas, Oaktree Village, Ponte Vedra Beach Village I,
Ponte Vedra Beach Village II, Rancho Antigua, Shadowood Village, Skyline
Village, Tierra Catalina, Village at the Foothills II & III; provided, however,
that in the event this purchase transaction or any of the other purchase
transactions enumerated above is terminated as a result of (i) condemnation or
(ii) damage or destruction in accordance with the applicable purchase agreement,
such purchase transaction(s) shall not be taken into account in determining
whether the Concurrent Closing Contingency shall have been satisfied (unless the
aggregate number of purchase transactions so terminated is two or more, in which
event the Concurrent Closing Contingency shall be deemed not to have been
satisfied) and provided further that in the event of (i) condemnation or (ii)
damage or destruction with respect to Village at the Foothills Phases II & III
(the "Companion Project") whereby the purchase transaction for the Companion
Project is terminated in accordance with the applicable purchase agreement, this
purchase transaction shall also be terminated but this purchase transaction and
the purchase transaction for the Companion Project shall be deemed to be a
single purchase transaction for purposes of determining the aggregate number of
purchase transactions so terminated. In addition, in the event this purchase
transaction or any of the other purchase transactions enumerated above does not
close as a result of a default by Buyer in the performance of its obligations
under this Agreement or any other respective purchase agreement, Seller shall be
entitled (but not obligated) to exercise its rights under Section 12 above and
the corresponding provisions of each such purchase agreement even though the
Concurrent Closing Contingency shall not have been satisfied.
37. EXCLUSIVITY. So long as this Agreement is in effect, Seller shall not
solicit, negotiate, offer or accept an offer for the purchase of the Property
(or any interest therein) for sale or contract to sell the Property (or any
interest therein) to any party other than Buyer or negotiate, solicit or
entertain any offers to purchase or sell the Property (or any interest therein).
38. CONFIDENTIALITY. Buyer and Seller agree that all documents and
information concerning the Property delivered to Buyer, the subject matter of
this Agreement and all negotiations shall remain confidential, and neither party
shall disclose any terms of this Agreement without the prior approval of the
other party except as may be required by law. Buyer and Seller shall be
entitled to disclose such information only to those parties required to know it,
including without limitation employees of either of the parties, consultants,
attorneys and accountants engaged by
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either Buyer or Seller, and prospective or existing investors and lenders. This
Section 38 shall expire upon the earlier of the termination of this Agreement
and the Closing.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SELLER:
VILLAGE AT THE FOOTHILLS (PHASE I)
JOINT VENTURE LIMITED PARTNERSHIP,
an Arizona limited partnership
By: ConAm Property Services II, Ltd.,
a California limited partnership,
its general partner
By: Continental American Development, Inc.,
a California corporation,
its general partner
By: /s/ Scott Dupree
------------------------------
Its: Vice President
[Signatures Continued On Next Page.]
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BUYER:
DOC Investors, LLC,
a Delaware limited liability company
By: ConAm DOC Affiliates LLC,
a California limited liability company,
its administrative member
By: Continental American Properties, Ltd.,
a California limited partnership,
its managing member
By: DJE Financial Corp.,
a California corporation,
its general partner
By: /s/ J. Bradley Forrester
------------------------------
Its Vice President
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CONSENT AND ACCEPTANCE OF ESCROW HOLDER:
The undersigned acknowledges having received an executed original of this
Agreement (or counterparts thereof) and the Deposit on January 26, 1999, which
date is the "Escrow Opening Date" for purposes of this Agreement.
The undersigned hereby consents to and accepts the instructions set forth in the
above Agreement for Purchase and Sale and Joint Escrow Instructions.
First American Title Insurance Company
By: /s/ Richard G. Hines
------------------------
Its: Vice President
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INDEX OF EXHIBITS
EXHIBIT SECTION
Exhibit A - Legal Description Section 1.1
Exhibit B - Schedule of Personal Property Section 1.1
Exhibit C - Due Diligence Materials Delivered to Buyer Section 5.1
Exhibit D - Disapproved Title Exceptions Section 5.4
Exhibit E - Form of Deed Section 7.1
Exhibit F - Form of Seller's Affidavit Section 7.3
Exhibit G - Bill of Sale Section 7.4
Exhibit H - Form of Assignment Section 7.5
Exhibit I - Form of Certificate for Rent Roll Section 7.6
Exhibit J - Other Agreements and Instruments Section 14.2
Exhibit K - Pending Litigation or Other Proceedings Section 14.3
Exhibit L - Schedule of Service Contracts Section 14.10
