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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
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CONAM REALTY INVESTORS 5 L.P.
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(Exact name of registrant as specified in its charter)
California 0-14341 11-2712111
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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 5 L.P. (the "Partnership")
completed the sale (the "Sale") of its two remaining properties, Hamptons at
Quail Hollow Apartments, a 232-unit apartment complex located in Charlotte,
North Carolina and Lakeview Village Apartments, a 240-unit apartment complex
located in Ponte Vedra Beach, Florida (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 IV, 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 Second Amended and Restated 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 $26,000,000 (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 $19,482,000 of cash proceeds from the
Sale, net of closing costs of approximately $110,000 and repayment of
indebtedness of approximately $6,408,000. 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 approved by the Limited Partners. As required by the
Partnership Agreement, the consent
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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 November 30, 1997 (the last fiscal year for which
information is available at the date of this Report) such amounts were
$3,714,870, $2,123,570, $484,182, and $879,851, respectively. Rental income,
property operating expenses, interest expense, and depreciation and
amortization expenses were $2,972,041, $1,546,029, $357,166, and $663,077,
respectively, for the nine months ended August 31, 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
August 31, 1998 consisted of investments in real estate, less accumulated
depreciation, of $14,896,198; restricted cash of $363,408; other assets, net
of accumulated amortization, of $315,268; mortgage payable of $6,103,944 and
security deposits of $82,135. 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
The Hamptons Joint Venture and Lend Lease Real Estate Investments, Inc
dated December 15, 1998, and amendment thereto and assignment thereof,
with respect to Hamptons at Quail Hollow Apartments,.
10.2 Agreement for Purchase and Sale and Joint Escrow Instructions between
Lakeview Village at Ponte Vedra Lakes Joint Venture and DOC Investors,
L.L.C. dated January 26, 1999 with respect to Lakeview Village
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 IV, LTD.,
General Partner of ConAm Realty Investors 5 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
SECOND AMENDED AND RESTATED
CERTIFICATE AND AGREEMENT
OF LIMITED PARTNERSHIP
OF CONAM REALTY INVESTORS 5 LP
This Amendment to Second Amended and Restated Certificate and Agreement of
Limited Partnership, dated as of August 20, 1985, of ConAm Realty Investors 5
LP, a California limited partnership formerly known as Hutton/ConAm Realty
Investors 5 (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 or lease 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 IV, 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 IV, 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
HAMPTONS/QUAIL HOLLOW
This Agreement for Purchase and Sale and Joint Escrow Instructions (this
"Agreement") is entered into as of December 15, 1998, by and between The
Hamptons Joint Venture, a North Carolina joint venture ("Seller"), and Lend
Lease Real Estate Investments, Inc. a Delaware corporation, or its permitted
assignee ("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 4401
Hamptons Ridge Drive, Charlotte, North Carolina 28210, commonly known as
Hamptons/Quail Hollow 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 232-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").
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.
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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 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 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 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 Fourteen Million Four Hundred
Thousand and No/100 Dollars ($14,400,000.00), 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 Forty-Four Thousand and No/100 Dollars ($144,000.00) (the
"Deposit"). Escrow Holder shall promptly deposit the Deposit into a
federally-insured interest-bearing account for the benefit of Buyer upon
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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. Seller shall provide, to
the extent it has not already provided prior to the date of this Agreement,
to Buyer copies of, or access to, the items identified on EXHIBIT C
attached hereto. Buyer acknowledges 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 shall have the right to
investigate, review and approve (and Seller shall use reasonable efforts to
cooperate with Buyer in connection with such investigation and review) 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. The Contingency
Period for such investigation, review and approval shall expire on December
24, 1998. In order to facilitate Buyer's investigation and analysis,
Seller hereby grants 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 deems 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).
Seller may, at its option, have a representative present at any such
inspection or review. 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.
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5.4. STATUS OF TITLE AND SURVEY. Buyer shall have the right to
investigate, review and approve title to the Property; provided, however,
that if Buyer intends to obtain extended coverage title insurance in
connection with this Agreement, then Buyer shall obtain at its sole cost
and expense a current as-built survey of the Property complying with 1992
ALTA/ACSM minimum standards (the "Survey"). The Contingency Period for
such investigation, review and approval shall expire on December 15, 1998.
Buyer shall be deemed to have approved all exceptions to title shown in
that certain owner's title commitment for the Property dated as of
September 14, 1998, issued by the Title Company under its File No. FA-192
587R2 (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
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
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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.
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.
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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.
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.
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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.
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.
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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 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.
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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 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, duly organized,
validly existing and in good standing under the laws of the State of North
Carolina, 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
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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.
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.
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14.9. ZONING. Seller shall, promptly upon receiving any notice of
any contemplated or threatened rezoning of the Property, give Buyer written
notice thereof.
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 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.
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For purposes of this Section 14, "Seller's actual knowledge" shall mean the
knowledge of (i) J. Bradley Forrester, (ii) Ralph Tilley and (iii) Beth Makowski
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 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,
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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
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,
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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 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.
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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 of the sale transaction
contemplated hereby and of amendments to such Managing Venture's partnership
agreement related thereto ("Seller's Consent") from a majority in interest of
the limited partners of ConAm Realty Investors 5, L.P. (the Managing Venturer of
Seller), 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).
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 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,
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<PAGE>
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 such rights to a joint
venture comprised of an affiliate of Continental American Properties, Ltd., a
California limited partnership, and up to two (2) institutional clients of 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.
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<PAGE>
If to Seller:
The Hamptons 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
If to Buyer:
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.
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<PAGE>
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.
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. [INTENTIONALLY DELETED.]
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.
39. RIGHT OF FIRST REFUSAL. Buyer and Seller acknowledge that one or more
of the venturers under the Joint Venture Agreement of Seller holds a right of
first refusal with respect to the Property. Notwithstanding anything to the
contrary contained in this Agreement, the sale transaction contemplated under
this Agreement is subject to the waiver or lapse of such right of first refusal
no later than December 24, 1998.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SELLER:
THE HAMPTONS JOINT VENTURE,
a North Carolina joint venture
By: ConAm Realty Investors 5, L.P.,
a California limited partnership,
its managing venturer
By: ConAm Property Services IV, 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
BUYER:
LEND LEASE REAL ESTATE INVESTORS, INC.,
a Delaware corporation
By: /s/ Ted Klinck
---------------------
Its: Senior 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 December 15, 1998, 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
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>
FIRST AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
HAMPTONS/QUAIL HOLLOW
DATED: To be effective as of December 15, 1998 (the "Effective
Date").
PARTIES: The parties to this First Amendment to Agreement for Purchase
and Sale and Joint Escrow Instructions (the "Amendment") for
the purchase of Hamptons/Quail Hollow are:
(a) The Hamptons Joint Venture, a North Carolina joint
venture ("Seller"); and
(b) Lend Lease Real Estate Investments, Inc., a Delaware
corporation ("Purchaser").
ESCROW AGENT: First American Title Insurance Company
ESCROW NO.: N981616G
RECITALS:
A. Seller and Purchaser entered into that certain Agreement for
Purchase and Sale and Joint Escrow Instructions for the purchase of
Hamptons/Quail Hollow dated as of December 15, 1998 (the "Purchase Agreement").
Capitalized terms not defined herein shall have the meanings ascribed to them in
the Purchase Agreement.
B. The Parties desire to amend the Purchase Agreement all as more
particularly set forth in this Amendment.
AGREEMENTS:
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. INCORPORATION OF RECITALS. All of the foregoing Recitals are
incorporated herein as agreements of the Parties.
2. AMENDMENT TO PURCHASE AGREEMENT. The following paragraphs of the
Purchase Agreement are hereby amended in their entirety as follows:
"3.1. OPENING OF ESCROW. On a date subject to mutual agreement,
but in no event later than February 1, 1999, Buyer shall 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
<PAGE>
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") on
or before February 1, 1999 (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 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 or limit any legal or equitable rights of Buyer
or Seller, except as may be limited by Article 12 below."
3. NO FURTHER AMENDMENTS. Except as set forth in Paragraph 2, all
other terms and conditions of the Purchase Agreement shall remain in full force
and effect.
4. COUNTERPARTS. This Amendment may be executed in any number of
counterparts.
5. TELECOPIES. Telecopies of the executed signature pages of this
Amendment shall be effective and binding upon the parties as if such signatures
were original signatures and Escrow Agent is hereby authorized by the parties
and entitled to accept and treat such telecopies signatures as originals.
Immediately after sending the signature pages, if any, by telecopy, the Party
providing such telecopy shall send the originals of such pages to the other
Party and to the Escrow Agent by hand delivery or overnight courier, as
applicable.
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<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Amendment as of the
Effective Date.
SELLER:
THE HAMPTONS JOINT VENTURE,
a North Carolina joint venture
By: ConAm Realty Investors 5, L.P.,
a California limited partnership,
its managing venturer
By: ConAm Property Services IV, 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
PURCHASER:
LEND LEASE REAL ESTATE INVESTMENTS, INC.,
a Delaware corporation
By: /s/ Ted Klink
---------------------
Its: Senior Vice President
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<PAGE>
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AMENDMENT (hereinafter referred to as the
"Assignment"), made and entered into as of the 26th day of January, 1999 by and
among LEND LEASE REAL ESTATE INVESTMENTS, INC., a Delaware corporation
(hereinafter referred to as "Assignor"), DOC INVESTORS, L.L.C., a Delaware
limited liability company (hereinafter referred to as "Assignee"), and THE
HAMPTONS JOINT VENTURE, a North Carolina joint venture (hereinafter referred to
as "Seller");
W I T N E S S E T H:
WHEREAS, pursuant to that certain Agreement of Purchase and Sale and Joint
Escrow Instructions dated on or about December 15, 1998, by and among Assignor,
as Buyer, and Seller, as Seller (hereinafter referred to as the "Purchase
Agreement"; capitalized terms not otherwise defined in this Assignment shall
have the meanings assigned to such terms in the Purchase Agreement), Assignor
agreed to purchase from Seller certain real property and improvements located at
4401 Hampton Ridge Drive, in the City of Charlotte, North Carolina 28210, and
being more particularly described in the Purchase Agreement; and
WHEREAS, Assignor desires to assign its rights under the Purchase Agreement
and to delegate its obligations under the Purchase Agreement to Assignee,
Assignee desires to accept such assignment and to assume such delegated
obligations and Seller desires to provide its written consent to such
assignment;
NOW, THEREFORE, in consideration of the sum of TEN AND NO/100 DOLLARS
($10.00), the receipt and sufficiency of which are hereby acknowledged,
Assignor, Assignee, and Seller agree as follows:
1. ASSIGNMENT AND ASSUMPTION. Assignor hereby assigns to Assignee all
of Assignor's right, title and interest in and to the Purchase Agreement, and
Assignor hereby delegates to Assignee all of Assignor's duties and obligations
under the Purchase Agreement. Assignee hereby expressly accepts all right,
title and interest of Assignor in and to the Purchase Agreement and hereby
assumes and agrees to perform, discharge, and fulfill all of the duties and
obligations of Assignor under the Purchase Agreement.
2. CONSENT AND RELEASE OF ASSIGNOR. Seller hereby consents to the
assignment and assumption described above and each of Seller and Assignee hereby
releases and discharges Assignor from any liability or obligation under the
Purchase Agreement and Seller agrees to look solely to Assignee for performance
of Buyer's obligations under the Purchase Agreement.
<PAGE>
3. COUNTERPARTS. This Assignment may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of such
counterparts shall constitute one agreement. To facilitate execution and
delivery of this Assignment, the parties may execute and exchange counterparts
of the signature pages by telefax. The signature of any party to any
counterpart may be appended to any other counterpart.
[signatures commence on next page]
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<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Assignment or
have caused the same to be executed and sealed by their authorized
representative the day and year first above written.
ASSIGNOR:
LEND LEASE REAL ESTATE INVESTMENTS, INC.,
a Delaware corporation
By: /s/ Ted Klink
---------------------
Name: Ted J. Klinck
Title: Senior Vice President
ASSIGNEE:
DOC INVESTORS, L.L.C., a Delaware limited liability company
By: Con Am 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
------------------------
Name: J. Bradley Forrestor
Title: Vice President
[signatures continue next page]
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<PAGE>
SELLER:
THE HAMPTONS JOINT VENTURE,
a North Carolina joint venture
By: ConAm Realty Investors 5, L.P.,
a California limited partnership, its managing
venturer
By: ConAm Property Services IV, 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
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<PAGE>
AGREEMENT FOR PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
LAKEVIEW VILLAGE
This Agreement for Purchase and Sale and Joint Escrow Instructions (this
"Agreement") is entered into as of January 26, 1999, by and between Lakeview
Village at Ponte Vedra Lakes 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
100 Lake Vista Drive, Ponte Vedra Beach, Florida 32256, commonly known
as Lakeview Village 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 240-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
-2-
<PAGE>
instructions as the parties may provide. Such cancellation of the Escrow
shall not prejudice 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 Eleven Million Six Hundred
Thousand and No/100 Dollars ($11,600,000.00), 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 Sixteen Thousand and No/100 Dollars ($116,000.00)
(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
-3-
<PAGE>
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 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
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against the Purchase Price the amount required to satisfy or
remove such Mandatory Cure Item(s); or
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.
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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.
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.
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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.
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.
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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.
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.
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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 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
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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 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
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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.
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.
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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.
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
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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 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.
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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 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
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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 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
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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
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.
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<PAGE>
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 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
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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 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
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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 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.
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If to Seller:
Lakeview Village at Ponte Vedra Lakes 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
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
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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.
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, 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). In addition, in the
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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.
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:
LAKEVIEW VILLAGE AT PONTE VEDRA
LAKES JOINT VENTURE,
a Florida general partnership
By: ConAm Realty Investors 5, L.P.,
a California limited partnership,
its general partner
By: ConAm Property Services IV, 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 IV, 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
<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>
