SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) November 10, 1998
-----------------
PaineWebber Income Properties Seven Limited Partnership
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-15037 04-2870345
- --------------------------------------------------------------------------------
(State or other jurisdiction) (Commission (IRS Employer
of incorporation File Number) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
--------------
(Former name or address, if changed since last report)
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
ITEM 2 - Disposition of Assets
Concourse Retail Plaza - West Palm Beach, Florida
Disposition Date - November 10, 1998
On November 10, 1998, West Palm Beach Concourse Associates, a joint
venture in which the Partnership has an interest, sold its operating investment
property, The Concourse Retail Plaza, located in West Palm Beach, Florida, to an
unrelated party for $2 million. The sale generated net proceeds of approximately
$225,000, after the assumption of the outstanding first mortgage loan of
approximately $1,539,000, accrued interest of approximately $4,000, net closing
proration adjustments of approximately $2,000 and closing costs of approximately
$230,000. The Partnership received 100% of the net proceeds in accordance with
the terms of the joint venture agreement. The mortgage loan, which was
assumable, contains a prohibition on prepayment through January 10, 2000. As a
result, any sale transaction completed prior to such date had to involve an
assumption of this mortgage loan which carries an interest rate of 11.12% per
annum. The sale price was discounted to reflect this above-market interest rate.
Nonetheless, the Managing General Partner believed that a current sale was in
the best interests of the Limited Partners. The Partnership is expected to make
a special distribution of the net proceeds from the sale of The Concourse to the
Limited Partners by December 15, 1998.
As previously reported, the Partnership had reviewed its options for The
Concourse Retail Plaza and determined that it was the appropriate time to market
the property for sale. For the past four years, 80% of the Plaza's 30,473 square
feet has been leased to four restaurant operators which have performed poorly.
One of these restaurant tenants is currently paying rent on space that was
vacated in 1996 under a lease that can be terminated in July 1999. Two other of
these restaurant tenants closed their operations at the property during the
quarter ended September 30, 1998 as a result of poor sales. One of the options
reviewed for the property was the development of a leasing plan that would put
an emphasis on a greater mixture of office and retail uses. This would have
involved the likely conversion of one of the larger restaurant out parcel
buildings into professional/service office space. Another option was to market
the property for sale currently, with the net proceeds from any such potential
sale transaction being carefully evaluated in comparison to the risks of holding
the property and completing the conversion. The Partnership decided on the
second option and began marketing the property for sale. During the second
quarter of fiscal 1998, the Partnership initiated discussions with area real
estate firms concerning potential marketing strategies for selling The Concourse
and solicited marketing proposals from several of these firms. After reviewing
their respective proposals and conducting interviews to determine their
expertise and track record in selling properties similar to The Concourse, the
Partnership selected a Florida-based firm. During the third quarter, a marketing
package was finalized and comprehensive
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
sale efforts began in early May. On August 14, 1998, a purchase and sale
agreement was signed with an unrelated third party and the closing of this
transaction was completed as described above.
On November 17, 1998, the Partnership completed the sale of another
property, the Colony Square Shopping Center, which will be reported in a
separate Current Report on Form 8-K by December 2, 1998. The Partnership is
currently working on the potential sale of its final investment property and
expects to complete a formal liquidation by the end of the first quarter of
calendar 1999. There are no assurances, however, that the sale of the final
asset and the liquidation of the Partnership will be completed within this time
frame.
ITEM 7 - Financial Statements and Exhibits
(a) Financial Statements: None
(b) Exhibits:
(1) Purchase and Sale Agreement by and between West Palm Beach
Concourse Associates and Susi Enterprises, Inc., dated August 14,
1998.
(2) First Amendment to Purchase and Sale Agreement between West Palm
Beach Concourse Associates and Susi Enterprises, Inc., dated October
9, 1998.
(3) Second Amendment to Purchase and Sale Agreement between West Palm
Beach Concourse Associates and Susi Enterprises, Inc., dated
November 3, 1998.
(4) Third Amendment to Purchase and Sale Agreement between West Palm
Beach Concourse Associates and Susi Enterprises, Inc., dated
November 6, 1998.
(5) Special Warranty Deed between West Palm Beach Concourse Associates
and WPB Concourse Plaza, L.C., dated November 10, 1998.
(6) Assignment and Assumption of Leases and Tenant Deposits between West
Palm Beach Concourse Associates and WPB Concourse Plaza, L.C., dated
November 10, 1998.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
(7) Assignment and Assumption of Property Contracts between West Palm
Beach Concourse Associates and WPB Concourse Plaza, L.C., dated
November 10, 1998.
(8) Bill of Sale by West Palm Beach Concourse Associates in favor of WPB
Concourse Plaza, L.C., dated November 10, 1998.
(9) Closing Statement between West Palm Beach Concourse Associates and
WPB Concourse Plaza, L.C. dated November 9, 1998.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PAINEWEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
-------------------------------------------------------
(Registrant)
By: Seventh Income Properties Fund, Inc.
By: /s/ Walter V. Arnold
--------------------
Walter V. Arnold
Chief Financial Officer and
Senior Vice President
Date: November 23, 1998
<PAGE>
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
WEST PALM BEACH CONCOURSE ASSOCIATES ("SELLER")
AND
SUSI ENTERPRISES, INC. ("BUYER")
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS..................................................1
ARTICLE 2 PURCHASE AND SALE............................................5
ARTICLE 3 PURCHASE PRICE; DEPOSIT; ADJUSTMENTS.........................5
ARTICLE 4 PRECLOSING OPERATION.........................................8
ARTICLE 5 ACCESS, INSPECTION, DILIGENCE................................9
ARTICLE 6 TITLE AND SURVEY............................................13
ARTICLE 7 CONDITIONS PRECEDENT AND CLOSING............................15
ARTICLE 8 CASUALTY AND CONDEMNATION...................................19
ARTICLE 9 BROKERAGE COMMISSIONS.......................................20
ARTICLE 10 DEFAULT, TERMINATION AND REMEDIES...........................20
ARTICLE 11 REPRESENTATIONS AND WARRANTIES..............................21
ARTICLE 12 MISCELLANEOUS...............................................24
ARTICLE 13 IRS FORM 1099-S DESIGNATION.................................27
ARTICLE 14 STATE REQUIREMENTS..........................................28
EXHIBIT A The Land
EXHIBIT B Form of Tenant Estoppel Certificate
EXHIBIT C Property Contracts
EXHIBIT D Form of Earnest Money Escrow Instructions
EXHIBIT E Rent Roll
EXHIBIT F Form of Escrow Closing Instructions
EXHIBIT G List of Loan Documents
SCHEDULE D 1099 Designation Agreement
<PAGE>
Purchase and Sale Agreement
This Purchase and Sale Agreement (this "Agreement") is entered into as of
the 14th day of August, 1998 by and between Seller and Buyer, upon the following
terms and conditions:
ARTICLE 1
DEFINITIONS
References in this Agreement to the following terms shall have the
following meanings:
Agreement: See introductory paragraph.
- ----------
Application Fee: See Section 6.4.3.
- ----------------
Assignment of
Contracts: See Section 7.4.4.
- ----------
Assignment of Leases: See Section 7.4.3.
- --------------------
Buyer: Susi Enterprises, Inc., a Florida corporation.
- -----
Cash Balance: See Section 3.2.2.
- ------------
Closing: See Section 7.3.
- -------
Closing Date: See Section 7.3.
- ------------
Deposit: See Section 3.1.
- -------
Designee: See Article 13.
- --------
Diligence Date: See Section 5.2.
- --------------
Documents: all books, records, plans, studies, site analyses,
- --------- certificates of occupancy, property tax information,
permits, existing title insurance policies, existing
surveys, existing zoning analyses, existing engineering
reports, existing code compliance reports, building
specifications, Property Contracts, Leases, agreements
or other instruments or documents contained in Seller's
files relating to the construction, operation and
maintenance of the Property.
Eminent Domain Taking: See Section 8.2.
- ---------------------
Environmental
Requirements: All laws, ordinances, statutes, codes, rules, regulations,
- ------------ agreements, judgments, orders and decrees now or hereafter
enacted, promulgated, or amended, of the United States, the
states, the counties, the cities or any other political
subdivisions in which the Real Property is located and any
other political subdivision, agency or instrumentality
exercising jurisdiction over the owner of the Real Property,
the Real Property or the use of the Real Property relating
to pollution, the protection or regulation of human health,
natural resources or the environment, or the emission,
discharge, release or threatened release of pollutants,
contaminants, chemicals or industrial, toxic or hazardous
substances or waste or Hazardous Materials into the
environment (including, without limitation, ambient air,
surface water, ground water or land or soil).
Escrow Agent: See Section 3.1.
- ------------
Escrowed Amount: See Section 3.1.
- ---------------
<PAGE>
Existing Loan: That certain loan in the original principal amount of
- ------------- $1,750,000.00 from Lender to Seller, evidenced by the
Note and secured by the Mortgage and the Existing Loan
Documents.
Existing Loan
Documents: That certain Promissory Note (the "Note") in the
- ---------- original principal amount of $1,750,000.00, dated as of
January 10, 1995 made by Seller in favor of Lender
secured by: (y) that certain Mortgage and Security
Agreement (the "Mortgage") dated as of even date
therewith encumbering the RealProperty, and (z) any and
all other documents and instruments evidencing,
security or relating to the Existing Loan from Lender
to Seller executed in connection therewith,
listed on Exhibit G attached hereto and incorporated
herein by reference.
Hazardous
Substances: Any substance which is or contains: (i) any
- ----------- "hazardous substance" as now or hereafter defined in Section
101(14) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Section 9601 et seq.) or any regulations promulgated under
CERCLA; (ii) any "hazardous waste" as now or hereafter defined
in the Recourse Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.) or regulations promulgated under RCRA;
(iii) any substance regulated by the Toxic Substances Control
Act (15 U.S.C. Section 2601 et. seq.); (iv) gasoline, diesel
fuel or other petroleum hydrocarbons; (v) asbestos and
asbestos containing materials, in any form, whether friable or
nonfriable; (vi) polychlorinated biphenyls; (vii) radon gas;
and (viii) any additional substances or materials which are
now or hereafter classified or considered to be hazardous or
toxic under Environmental Requirements or the common law, or
any other applicable law related to the Property. Hazardous
Materials shall include, without limitation, any substance,
the presence of which on the Real Property: (A) requires
reporting, investigation or remediation under Environmental
Requirements; (B) causes or threatens to cause a nuisance on
the Real Property or adjacent property or poses or threatens
to pose a hazard to the health or safety of persons on the
Real Property or adjacent property; or (C) if emanated or
migrated from the Real Property, could constitute a trespass.
Improvements: All buildings, structures and other improvements situated
- ------------ upon the Land and all fixtures, systems and facilities owned
by Seller and located on the Land.
Intangible
Property: All of Seller's right, title and interest, if any,
- -------- in all intangible assets of any nature relating to the Land,
the Improvements or the Personal Property, including, without
limitation, all of Seller's right, title and interest in all
(i) warranties and guaranties relating to the Improvements or
Personal Property in the possession of Seller, (ii) all
licenses, permits and approvals relating to the Real Property,
(iii) all logos and trade names currently used by Seller
exclusively in the operation of the Land and Improvements,
including the use of the name Concourse Shopping Plaza, and
(iv) all plans and specifications, in each case to the extent
that Seller may legally transfer the same.
IRS: See Article 13.
- ---
Land: All of the land described on Exhibit A attached hereto,
- ---- together with all privileges, rights, easements, and
appurtenances belonging to such land and all right, title
and interest (if any) of Seller in and to any streets,
alleys, passages, and other rights-of-way or appurtenances
included in, adjacent to or used in connection with such
land and all right, title and interest (if any) of Seller in
all mineral and development rights appurtenant to such land.
Leases: All of Seller's rights in all leases and other occupancy
- ------- agreements covering any portion of the Land or Improvements.
Lender: Column Financial, Inc., a Delaware corporation.
- ------
<PAGE>
Loan Principal
Balance: See Section 3.2.1.
- --------
Permitted
Exceptions: See Section 6.1.
- ----------
Personal
Property: All of the Seller's right, title and interest, if
- -------- any, in and to all personal property owned by Seller located
at the Real Property, including all furniture, carpeting,
appliances, equipment, machinery, inventories, supplies, signs
and other tangible personal property of every kind and nature,
if any, owned by Seller and installed, located at and used in
connection with the ownership, occupation and operation of the
Real Property, but specifically excluding (i) any items of
personal property owned by tenants at or on the Real Property,
and (ii) any items of personal property owned by third parties
and leased to Seller.
Property: The Real Property, the Personal Property, the Leases, the
- -------- Tenant Deposits, the Intangible Property and the Property
Contracts known as Concourse Shopping Plaza, located at West
Palm Beach, Florida.
Property
Contracts: All of Seller's rights, if any, in the contracts
- --------- listed on Exhibit C attached hereto, being all service, supply
and equipment rental, management, operating and leasing
contracts affecting the Property, to the extent that (i)
Seller is entitled to transfer the same to Buyer, and (ii)
Buyer does not elect to have Seller terminate them in
accordance with Section 4.3 below.
Purchase Price: $2,000,000.00.
- --------------
Real Property: The Land and the Improvements.
- -------------
Rent Roll: See Section 4.1.
- ---------
Seller: West Palm Beach Concourse Associates, a Florida general
- ------- partnership.
Survey: See Section 6.1.
- -------
Tenant Deposits: Seller's rights to unapplied security deposits under the
- --------------- Leases.
Title Commitment: See Section 6.1.
- ----------------
Title Company: First American Title Insurance Company.
- -------------
Title Objections: See Section 6.1.
- ----------------
ARTICLE 2
PURCHASE AND SALE
2.1 In consideration of the undertakings and mutual covenants of the
parties set forth in this Agreement, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, Seller hereby agrees to sell and convey the Property to Buyer and
Buyer hereby agrees to buy and pay the Purchase Price for the Property on the
terms and conditions contained herein.
ARTICLE 3
PURCHASE PRICE; DEPOSIT; ADJUSTMENTS
3.1 Deposit. Contemporaneously with the execution and delivery of this
Agreement (and as a condition precedent to the effectiveness of this Agreement),
Buyer shall deposit immediately available funds with the Title Company
(hereinafter the "Escrow Agent") the sum of ONE HUNDRED THOUSAND AND 00/100
($100,000.00) Dollars (the "Deposit") to secure Buyer's obligations under this
Agreement. The Escrow Agent shall hold the Deposit in a segregated interest
bearing money market account with an FDIC insured bank reasonably acceptable to
Buyer and Seller. The Deposit and all interest accrued on the Deposit
(collectively, the "Escrowed Amount") shall be maintained by the Escrow Agent in
such account or accounts until the Escrow Agent is required to cause the
Escrowed Amount to be disbursed pursuant to the terms and conditions of this
Agreement and the Earnest Money Escrow Instructions attached hereto as Exhibit
D. The Escrowed Amount shall be applied to the Purchase Price if the Closing
occurs, as provided in Section 3.2.3 below.
3.2 Purchase Price. The Purchase Price, subject to adjustment as provided
herein, shall be as specified in Article 1 above and shall be paid on the
Closing Date (as hereinafter defined) in the following manner:
3.2.1 Buyer shall assume, subject to Section 7.1 hereof, the payment
of the existing principal balance of the Existing Loan as of the Closing
Date (the "Loan Principal Balance"), and the payment of interest accruing
thereon from and after the Closing Date and shall agree to perform, assume
and observe all obligations of the Seller under the Existing Loan
Documents evidencing, relating to or securing the Existing Loan.
3.2.2 Buyer shall pay to Seller in United States dollars by wire
transfer of federal funds, the Purchase Price less the Loan Principal
Balance (the "Cash Balance").
3.2.3 The Escrowed Amount shall be applied towards the Cash Balance.
3.3 Tax Proration. All due and payable real estate taxes, all general and
special assessments on the Land and ad valorem taxes, if any, on the Personal
Property (based on the most recent ascertainable taxes) attributable to the
Property through the Closing Date shall be prorated and adjusted as of the
Closing Date, unless such items are paid directly by tenants to the applicable
taxing authority, in which case no adjustment or proration shall be made for the
items paid directly by the tenants. In no event shall Seller be charged with or
be responsible for any increase in the taxes on the Property resulting from the
sale of the Property or from any improvements made or leases entered into on or
after the Closing Date. If the tax statements for the fiscal year during which
the Closing Date occurs are not finally determined, then the tax figures for the
immediately prior fiscal year shall be used for the purposes of prorating taxes
on the Closing Date, provided that there shall be no further adjustment to be
made after the Closing Date. Any tax refunds or proceeds (including interest
thereon) on account of a favorable determination resulting from a challenge,
protest, appeal or similar proceeding relating to taxes and assessments relating
to the Property for all tax periods occurring prior to the applicable tax period
in which the Closing occurs shall be retained by and paid exclusively to Seller.
Neither Seller nor Buyer shall settle any tax protests or proceedings in which
taxes for the tax period for which the other party is responsible are being
adjudicated without the consent of such party, which consent shall not be
unreasonably withheld, conditioned or delayed. After the Closing, Buyer shall be
responsible for and control any tax protests or proceedings for any period for
which taxes are adjusted between the parties under this Agreement and for any
later period. Buyer and Seller shall cooperate in pursuit of any such
proceedings and in responding to reasonable requests of the other for
information concerning the status of and otherwise relating to such proceedings;
provided, however, that neither party shall be obligated to incur any
out-of-pocket fees, costs or expenses in responding to the requests of the
other.
3.4 Contract Proration. To the extent Property Contracts are not
terminated pursuant to Section 4.3, prepaid or past due amounts under any
Property Contracts which are assigned to Buyer at Closing shall be prorated and
adjusted as of the Closing Date.
3.5 Utility Proration. To the extent reasonably feasible, the Seller shall
cause all meters for electricity, gas, water, sewer or other public utility
usage at the Property to be read as of the day immediately preceding the Closing
Date, and the Seller shall pay all charges for such utilities which have accrued
on or prior to the Closing Date; provided, however, that if and to the extent
such charges are paid directly by tenants, no such reading or payment shall be
required. If the utility companies are unable or refuse to read meters for which
payment by the Seller is required, all charges for such utilities to the extent
unpaid shall be prorated and adjusted as of the Closing Date based on the most
recent bills therefor and no further adjustment shall be made. The Seller shall
provide notice to the Buyer within five (5) days of the Closing Date setting
forth (i) whether utility meters will be read as of the Closing Date and (ii) a
copy of the most recent bill for any utility charges which are to be prorated
and adjusted as of the Closing Date.
3.6 Income and Expense Proration. Collected rents for the then current
period; security deposits which have not been previously applied by Seller;
prepaid rentals; collected or prepaid common area maintenance charges; collected
or prepaid promotional charges; collected or prepaid service charges; collected
or prepaid tax charges, and all other collected or prepaid incidental expenses
and charges paid by tenants shall be apportioned and full value shall be
adjusted as of the Closing Date, and the net amount thereof, if in favor of
Seller, shall be added to the Purchase Price, or if in favor of Buyer, shall be
deducted from the Purchase Price. From and after Closing all security deposits
credited to Buyer shall thereafter be deemed transferred to Buyer and Buyer
shall assume and be solely responsible for the payments of security deposits to
tenants in accordance with the Leases and applicable law. Seller shall be
entitled to retain and/or receive a credit for any utility deposits and any
deposits for third parties under any of the Property Contracts. Seller shall
receive a credit for the full amount of any escrows or reserves held by or on
behalf of Lender.
3.6.1 All rentals and other tenant charges payable in arrears and
uncollected and all other uncollected rents (including, but not limited
to, percentage rents, common area maintenance charges and real estate tax
charge annual adjustments thereto) for the current and prior rental
periods, less the reasonable expenses of collection thereof, shall be
apportioned (if and when collected by either party); provided, however,
that Buyer shall proceed in a commercially reasonable manner consistent
with Buyer's customary practice for tenants owing past due rent to it to
collect such uncollected rents from existing tenants listed on the Rent
Roll (as hereinafter defined); provided that Buyer shall not be obligated
to commence suit against any tenant and Buyer shall first apply rents
subsequently received to rent due and owing for rental periods accruing
after the Closing Date. Buyer shall not settle or release (i) tenants from
any obligations for such uncollected rents or (ii) rights under any claims
listed in Section 3.6.2 below, in each case, without Seller's prior
written approval. Buyer shall provide Seller with written evidence of its
collection efforts, such evidence shall include, but not be limited to
providing copies of letters and invoices to tenants, copies of reports
regarding follow-up efforts and cash receipts and aged delinquency
reports. Buyer shall provide such written evidence of its collection
efforts within fifteen (15) days of demand therefor provided that Seller
may request such evidence no more than on a quarterly basis. Seller shall
agree not to commence suit against tenants listed on the Rent Roll for
obligations owed to it.
3.6.2 Seller shall retain all rights to all refunds, receivables,
past due rent and claims, including, but not limited to, termination fees
or damages from all former tenants or occupants of the Property which are
not listed on the Rent Roll, causes of action and rights of reimbursement
from third parties, bonds, accounts receivable and any other claims for
payments Seller may have to the extent arising or relating to the period
prior to the Closing.
3.6.3 In the event, on the Closing Date, the precise figures
necessary for any of the foregoing adjustments are not capable of
determination, then, at Buyer's option, those adjustments shall be made
either (i) on the basis of good faith estimates of Seller and Buyer using
currently available information, and final adjustments shall be made
promptly after precise figures are determined or available or (ii) when
all information for all final adjustments are determined or available.
3.7 Prorations Generally. A statement of prorations and other adjustments
shall be prepared by Seller in conformity with the provisions of this Article 3
and submitted to Buyer for review and approval not less than two (2) business
days prior to the Closing Date. For purposes of making prorations, Seller shall
be deemed to be in title to the Property and entitled to the income from and
responsible for the expenses thereof, on the Closing Date.
3.8 Closing Costs.
3.8.1 Seller shall pay (i) its legal fees and expenses related to
the negotiation and preparation of this Agreement and all documents
required to close the transaction contemplated hereby; (ii) 50% of the
escrow fees of the Escrow Agent; (iii) all costs associated with title
examination and preparation of a title commitment as well as all charges
and premiums for an owner's title policy, (iv) all costs allocable to
preparation of the Survey provided by Seller to Buyer pursuant to Section
6.1 hereof; all state, county or other taxes associates with the transfer
of the property; and (v) 50% of fees and costs charged by the Lender
relating to the assignment and assumption of the Existing Loan (including,
but not limited to application fee, the assumption fee and legal costs,
but excluding title premiums as described in Section 3.8.2(v), below).
3.8.2 Buyer shall pay: (i) 50% of the escrow fees of the Escrow
Agent; (ii) charges to record the deed, and evidence of Buyer's existence
or authority; (iii) Buyer's legal fees and expenses related to the
negotiation of this Agreement and all documents required to close the
transaction contemplated hereby; (iv) all costs related to the Buyer's
inspection and due diligence, including, without limitation, the cost of
appraisals, architectural, engineering, credit and environmental reports
ordered by Buyer; (v) all charges and premiums for a new lender's title
policy or any required endorsements to the Lender's existing policy; (vi)
all costs allocable to any changes requested by Buyer to the Survey
provided by Seller to Buyer pursuant to Section 6.1 hereof; (vii) 50 % of
all fees and costs charged by Lender relating to the assignment and
assumption of the Existing Loan (including, but not limited to application
fee, the assumption fee and legal costs); and (viii) all state, county or
other taxes associated with the assumption of the Existing Loan Documents.
3.8.3 All other closing costs shall be paid by Seller or Buyer in
accordance with the custom in the jurisdiction where the Property is
located.
3.9 The provisions of this Article 3 shall survive the Closing.
ARTICLE 4
PRECLOSING OPERATION
4.1 Leases. A rent roll (the "Rent Roll") containing a list of all
occupants of the Property pursuant to the Leases as of the date hereof is
attached hereto as Exhibit E. During the pendency of this Agreement, Seller may
enter into Leases with new tenants or modifications of Leases with existing
tenants substantially in accordance with Seller's existing leasing practices,
provided that in all events any new or modified Leases shall (i) be at or near
market rent and (ii) on the Seller's current standard form of lease; provided
Seller obtains Buyer's prior written consent to any Leases, which consent Buyer
agrees shall not be unreasonably withheld. Buyer's consent shall deemed to have
been granted if Buyer has not responded within five (5) Business Days following
the submission of a proposed Lease to Buyer for approval.
4.2 Conduct of Business. At all times prior to Closing, Seller shall
continue (a) to conduct business with respect to the Property in the same manner
in which said business has been heretofore conducted, (b) to insure the Property
substantially as currently insured, and (c) maintain the Property in its current
condition, reasonable wear and tear and damage by casualty excepted.
4.3 Property Contracts. Seller shall make copies of all Property Contracts
available for Buyer to review promptly after the date hereof. On or before the
Diligence Date, unless Buyer has provided written notice to Seller of Buyer's
election to terminate this Agreement, Buyer shall provide written notice to
Seller of the Property Contracts that Buyer desires to have terminated by
Seller, and Seller will terminate the Property Contracts so identified at or
before Closing. At Closing, Seller shall assign and Buyer shall assume the
Property Contracts, except those Property Contracts which Buyer has notified
Seller to terminate. Notwithstanding the foregoing, Seller's existing management
contract and exclusive brokerage contract for the Property shall be terminated
by Seller effective as of the Closing Date.
4.4 Tenant Estoppels. Seller shall use commercially reasonable efforts to
obtain tenant estoppel certificates, from all tenants currently occupying their
space under the Lease in the form required under such Leases, or if no form is
so required, in the form attached hereto as Exhibit B. Seller shall not be
obligated to expend more than nominal funds or commence litigation in pursuit of
such estoppel certificates and receipt of such estoppel certificates shall not
be a condition precedent to Closing.
ARTICLE 5
ACCESS, INSPECTION, DILIGENCE
5.1 Access/Purchaser's Responsibilities/Purchaser's Indemnity.
5.1.1 From the date hereof through the Diligence Date (hereinafter
defined), Seller agrees that Buyer and its authorized agents or
representatives shall be entitled to enter upon the Real Property during
normal business hours upon advance written notice to Seller and make such
reasonable, nondestructive investigations, studies and tests including,
without limitation, surveys and engineering studies as Buyer deems
necessary or advisable, provided, however, that Buyer shall not be
permitted to conduct physical testing without Seller's prior written
consent, which consent shall not be unreasonably withheld, conditioned or
delayed. Seller's prior written consent for physical inspections or
testing may be conditioned upon receipt of a detailed description of the
proposed physical inspection or testing, a list of contractors who will be
performing the physical inspection or testing, evidence of insurance
satisfactory to Seller, and such other information as Seller reasonably
requires in connection with such proposed inspection or testing. Seller
also agrees to make all Documents available to Buyer or Buyer's agents
during normal business hours for review and copying at Buyer's expense
upon advance written notice to Seller from the date hereof through the
Diligence Date.
5.1.2 Buyer agrees that in conducting any inspections,
investigations or tests of the Property and/or the Documents, Buyer and
its agents and representatives shall (i) not unreasonably interfere with
the operation and maintenance of the Property, (ii) not unreasonably
disturb the tenants under the Leases or unreasonably interfere with their
use of the Property pursuant to their respective Leases, (iii) not damage
any part of the Property or any personal property owned or held by any
tenant or third party, (iv) not injure or otherwise cause bodily harm to
Seller, the property manager, or their respective guests, agents,
invitees, contractors and employees or any tenant or their guests or
invitees, (v) maintain comprehensive general liability insurance in terms
and amounts reasonably acceptable to Seller covering any accident arising
in connection with the presence of Buyer, its agents and representatives
on the Property, and deliver a certificate of insurance verifying such
coverage to Seller prior to entry upon the Property; (vi) promptly pay
when due the costs of all tests, investigations and examinations done with
regard to the Property; (vii) not permit any liens to attach to the Real
Property by reason of the exercise of Buyer's rights hereunder, (viii)
fully restore the Property to the condition in which the same was found
before any such inspection or tests were undertaken; and (ix) not reveal
or disclose any information obtained during the due diligence period
concerning the Property and the Documents to anyone outside Buyer's
organization, except in accordance with the confidentiality standards set
forth in Section 5.4 herein.
5.1.3 Buyer will indemnify, defend, and hold Seller and its property
manager harmless from all losses, costs, liens, claims, causes of action,
liability, damages and out-of pocket expenses, including, without
limitation, reasonable attorneys' fees incurred by Seller as a result of
the entry upon or inspections, tests or investigations of the Property
conducted by or on behalf of Buyer. This indemnity obligation of Buyer
shall survive the termination of this Agreement for any reason.
5.1.4 Buyer acknowledges and agrees that the Documents are provided
to Buyer for informational purposes only and do not constitute
representations or warranties of Seller or its agents, employees or
representatives of any kind as to the truth, accuracy or completeness of
the Documents or the source(s) thereof. Seller has not undertaken any
independent investigation as to the truth, accuracy or completeness of the
Documents, and is providing the Documents solely as an accommodation to
Buyer.
5.2 Diligence. Subject to Section 5.1, above, Buyer shall promptly
commence and actively pursue the following due diligence items:
5.2.1 Review title and survey matters;
5.2.2 Review Property Contracts;
5.2.3 Obtain and review engineering reports;
5.2.4 Obtain and review environmental reports on oil, hazardous
waste, and asbestos;
5.2.5 Review applicable zoning and other land use controls, and
other permits, licenses, permissions, approvals and consents;
5.2.6 Review all Leases affecting the Property; and
5.2.7 Review the Existing Loan Documents.
Buyer shall complete its due diligence on or before September 15, 1998
(the "Diligence Date"). Notwithstanding any other term or provision herein to
the contrary, in the event that Buyer's due diligence shall reveal any matters
which are not acceptable to Buyer, in Buyer's sole discretion, Buyer may elect,
by written notice to Seller, received by Seller on or before the Diligence Date,
not to proceed with this purchase, in which event this Agreement shall
terminate, the Escrow Agent shall return the Escrowed Amount to the Buyer and
this Agreement shall be null and void without recourse to either party hereto
(except to the extent such recourse arises in connection with a provision of
this Agreement which is intended to survive termination). If Buyer fails to
terminate this Agreement pursuant to this Section, the Escrowed Amount shall
become nonrefundable and shall only be distributed as specifically provided
herein. BUYER ACKNOWLEDGES THAT, PURSUANT TO THE TERMS OF THIS AGREEMENT, BUYER
SHALL BE AFFORDED A FULL OPPORTUNITY TO INSPECT THE PROPERTY, OBSERVE ITS
PHYSICAL CHARACTERISTICS AND EXISTING CONDITIONS AND CONDUCT SUCH INVESTIGATIONS
AND STUDIES ON AND OF SAID PROPERTY AS IT DEEMS NECESSARY AND THAT, UNLESS BUYER
TERMINATES THIS AGREEMENT PURSUANT TO THIS SECTION 5.2 BUYER SHALL BE DEEMED TO
HAVE WAIVED ON THE DILIGENCE DATE ANY AND ALL OBJECTIONS TO OR COMPLAINTS
REGARDING (INCLUDING, BUT NOT LIMITED TO, FEDERAL, STATE OR COMMON LAW BASED
ACTIONS AND ANY PRIVATE RIGHT OF ACTION UNDER STATE AND FEDERAL LAW TO WHICH THE
PROPERTY IS OR MAY BE SUBJECT, INCLUDING BUT NOT LIMITED TO, CERCLA AND RCRA)
PHYSICAL CHARACTERISTICS AND EXISTING CONDITIONS, INCLUDING, WITHOUT LIMITATION,
STRUCTURAL AND GEOLOGIC CONDITIONS, SUBSURFACE SOIL AND WATER CONDITIONS AND
SOLID AND HAZARDOUS WASTE AND HAZARDOUS SUBSTANCES ON, UNDER, ADJACENT TO OR
OTHERWISE AFFECTING THE PROPERTY. BUYER FURTHER HEREBY ASSUMES THE RISK OF
CHANGES IN APPLICABLE LAWS AND REGULATIONS RELATING TO PAST, PRESENT AND FUTURE
ENVIRONMENTAL CONDITIONS ON THE PROPERTY AND THE RISK THAT ADVERSE PHYSICAL
CHARACTERISTICS AND CONDITIONS, INCLUDING, WITHOUT LIMITATION, THE PRESENCE OF
HAZARDOUS SUBSTANCES OR OTHER CONTAMINANTS, MAY NOT HAVE BEEN REVEALED BY ITS
INVESTIGATION.
5.3 Copies of Reports/Return of Documents.
5.3.1 As additional consideration for the transaction contemplated
herein, Buyer shall promptly deliver to Seller copies of any and all
reports, tests or studies involving structural or geologic conditions,
environmental, hazardous waste or Hazardous Substances contamination of
the Property and all other materials obtained in connection with Buyer's
diligence, provided, however, that Buyer shall have no obligation to cause
any such tests or studies to be performed on the Property. If such
reports, tests or studies indicate the existence or reasonable potential
existence of any environmental, hazardous waste or Hazardous Substance
contamination of any portion of the Property, Seller may terminate this
Agreement by giving written notice to Buyer within ten (10) business days
after Buyer provides Seller with copies of such reports, tests or studies.
Upon such termination, in accordance with paragraphs (b) and (c) below,
the Escrowed Amount shall be promptly returned to Buyer and neither Buyer
nor Seller shall have any further obligation or liability to the other
hereunder, except those obligations arising under provisions of this
Agreement which are expressly intended to survive termination.
5.3.2 If this Agreement is terminated for any reason whatsoever,
Buyer shall promptly deliver to Seller all Documents delivered to Buyer or
Buyer's agents, representatives or designees by Seller or Seller's agents,
representatives or employees pursuant to this Agreement.
5.3.3 The return of the Escrowed Amount to Buyer under this
Agreement shall be contingent upon Buyer's fulfillment of its obligations
under Section 5.3.1 and 5.3.2.
5.4 Confidentiality. Buyer acknowledges and agrees that any and all of the
Documents are proprietary and confidential in nature and will be delivered to
Buyer solely to assist Buyer in determining the feasibility of purchasing the
Property. Further, each party hereto agrees to maintain in confidence, and not
to discuss with or to disclose to any person or entity who is not a party to
this Agreement, any material term of this Agreement or any aspect of the
transactions contemplated hereby, except as provided in this Section. Seller may
publicly disclose the existence of this Agreement provided that the identity of
Buyer is not disclosed. Buyer shall not disclose to anyone other than its
partners and financiers the Documents and/or any information disclosed by Seller
to Buyer which is not generally known by the public regarding Seller's
operations and/or the Property. Each party hereto may discuss with and disclose
to its accountants, attorneys, existing or prospective lenders, investment
bankers, underwriters, rating agencies, partners, consultants and other advisors
to the extent such parties reasonably need to know such information and are
bound by a confidentiality obligation identical in all material respects to the
one created by this Section. Additionally, each party may discuss and disclose
such matters to the extent necessary to comply with any requirements of the
Securities and Exchange Commission or in order to comply with any law or
interpretation thereof or court order. This provision shall survive termination
of this Agreement but shall terminate upon the Closing. Any press release to be
made regarding any matter which is the subject of the confidentiality obligation
created in this Section shall be subject to the reasonable approval of Buyer and
the Seller, respectively both as to timing and content.
5.5 Buyer's Acknowledgment. BUYER ACKNOWLEDGES THAT AS OF THE DILIGENCE
DATE IT HAS HAD AN OPPORTUNITY TO CONDUCT DILIGENCE ON THE PROPERTY AND IS
ACQUIRING THE PROPERTY IN ITS CURRENT CONDITION BASED ON ITS DILIGENCE. BUYER
FURTHER ACKNOWLEDGES THAT NEITHER SELLER NOR ITS EMPLOYEES, AGENTS OR
REPRESENTATIVES HAVE MADE ANY REPRESENTATION OR WARRANTY AS TO THE CONDITION OF
THE PROPERTY OR THE PRESENCE OR ABSENCE OF ANY HAZARDOUS MATERIALS ON, IN, UNDER
OR WITHIN THE PROPERTY OR A PORTION THEREOF WHICH SURVIVE CLOSING HEREUNDER. THE
BUYER ACKNOWLEDGES AND AGREES THAT THE PROPERTY IS TO BE CONVEYED BY THE SELLER
TO THE BUYER "AS IS," "WITH ALL FAULTS," AND SUBSTANTIALLY IN ITS CURRENT
CONDITION. THE BUYER FURTHER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY
CONTAINED HEREIN, NEITHER THE SELLER NOR ANY AGENT, EMPLOYEE OR OTHER
REPRESENTATIVE OF THE SELLER (OR PURPORTED AGENT, EMPLOYEE OR OTHER
REPRESENTATIVE OF THE SELLER) HAS MADE ANY GUARANTEE, REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED (AND THE SELLER SHALL NOT HAVE ANY LIABILITY
WHATSOEVER) AS TO THE VALUE, USES, HABITABILITY, CONDITION, DESIGN, OPERATION,
FINANCIAL CONDITION OR PROSPECTS, OR FITNESS FOR PURPOSE OR USE OF THE PROPERTY
(OR ANY PART THEREOF) OR ANY OTHER GUARANTEE, REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY (OR ANY PART
THEREOF) OR INFORMATION SUPPLIED TO BUYER WITH RESPECT THERETO. FURTHER, THE
SELLER SHALL HAVE NO LIABILITY FOR ANY LATENT, HIDDEN, OR PATENT DEFECT AS TO
THE PROPERTY OR THE FAILURE OF THE PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH
ANY APPLICABLE LAWS AND REGULATIONS. IN PARTICULAR, THE BUYER ACKNOWLEDGES AND
AGREES THAT ANY INFORMATION PROVIDED TO BUYER BY SELLER WITH RESPECT TO THE
PROPERTY UNDER THIS AGREEMENT (AND ANY OTHER INFORMATION THE BUYER MAY HAVE
OBTAINED REGARDING IN ANY WAY ANY OF THE PROPERTY, INCLUDING WITHOUT LIMITATION,
ITS OPERATIONS OR ITS FINANCIAL HISTORY OR PROSPECTS FROM THE SELLER OR ITS
AGENTS, EMPLOYEES OR OTHER REPRESENTATIVES) IS DELIVERED TO THE BUYER AS A
COURTESY, WITHOUT REPRESENTATION OR WARRANTY AS TO ITS ACCURACY OR COMPLETENESS,
AND NOT AS AN INDUCEMENT TO ACQUIRE THE PROPERTY; THAT NOTHING CONTAINED IN SUCH
DELIVERIES SHALL CONSTITUTE OR BE DEEMED TO BE A GUARANTEE, REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, IN ANY REGARD AS TO ANY OF THE PROPERTY (EXCEPT AS
EXPRESSLY PROVIDED HEREIN); AND THAT THE BUYER IS RELYING ONLY UPON THE
PROVISIONS OF THIS AGREEMENT AND ITS OWN INDEPENDENT ASSESSMENT OF THE PROPERTY
AND ITS PROSPECTS IN DETERMINING WHETHER TO ACQUIRE THE PROPERTY. THE PROVISIONS
OF THIS PARAGRAPH SHALL SURVIVE CLOSING.
5.6 Buyer's Release of Seller. SELLER AND ITS PROPERTY MANAGER ARE HEREBY
RELEASED FROM ALL RESPONSIBILITY AND LIABILITY REGARDING THE CONDITION
(INCLUDING THE PRESENCE IN THE SOIL, AIR, STRUCTURES AND SURFACE AND SUBSURFACE
WATERS, OF MATERIALS OR SUBSTANCES THAT HAVE BEEN OR MAY BE IN THE FUTURE
DETERMINED TO BE TOXIC, HAZARDOUS, UNDESIRABLE OR SUBJECT TO REGULATION AND THAT
MAY NEED TO BE SPECIALLY TREATED, HANDLED AND/OR REMOVED FROM THE PROPERTY UNDER
CURRENT OR FUTURE FEDERAL, STATE AND LOCAL LAWS, REGULATIONS OR GUIDELINES),
VALUATION, SALABILITY OR UTILITY OF THE PROPERTY, OR ITS SUITABILITY FOR ANY
PURPOSE WHATSOEVER. BUYER ACKNOWLEDGES THAT ANY INFORMATION OF ANY TYPE WHICH
BUYER HAS RECEIVED OR MAY RECEIVE FROM SELLER, ITS PROPERTY MANAGER OR THEIR
RESPECTIVE AGENTS, INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL REPORTS AND
SURVEYS, IS FURNISHED ON THE EXPRESS CONDITION THAT BUYER SHALL MAKE AN
INDEPENDENT VERIFICATION OF THE ACCURACY OF SUCH INFORMATION, ALL SUCH
INFORMATION BEING FURNISHED WITHOUT ANY WARRANTY WHATSOEVER.
ARTICLE 6
TITLE AND SURVEY
6.1 Title and Survey. Promptly following the execution of this Agreement,
Seller shall provide Buyer:
6.1.1 An update of Seller's survey (the "Survey"); and
6.1.2 A commitment for an ALTA Owner's Policy of Title Insurance
from the Escrow Agent (the "Title Commitment").
If the Survey or matters listed as exceptions in the Title Commitment are
not satisfactory to Buyer, Buyer shall, before the Diligence Date, provide
Seller with written notice of such objections (the "Title Objections"). Seller,
at its sole cost and expense shall have the right, but not the obligation, to
cure or remove any Title Objections and shall give Buyer written notice on or
prior to the Diligence Date, identifying those Title Objections, if any, that
Seller agrees to use reasonable efforts to cure; provided, however, that Seller
shall not be obligated to incur any costs or expenses in excess of $10,000 in
connection with any such cure undertaken by Seller. If there are Title
Objections which Seller is unable or unwilling to cure by the Diligence Date,
Buyer may terminate this Agreement as provided in Section 5.2, above or waive
such objections which Seller is not willing or able to cure and proceed to
closing. Those exceptions or title deficiencies which (i) Buyer does not object
to pursuant to this Section 6.1 or (ii) are waived because Seller is unwilling
or unable to cure shall be the "Permitted Exceptions."
6.2 Deed. On the Closing Date, Seller shall convey by good and sufficient
special warranty deed to Buyer good and clear record and marketable fee simple
title to all of the Real Property free and clear of all liens, encumbrances,
conditions, easements, assessments, restrictions and other conditions, except
for the following:
6.2.1 All Leases;
6.2.2 All zoning, building and other laws applicable to the
Property;
6.2.3 All matters which arise after the Diligence Date which are
agreed upon or consented to by Buyer;
6.2.4 The Existing Loan Documents;
6.2.5 The lien, if any, for real estate taxes for current year not
due and payable prior to the Closing Date (subject to proration in
accordance with Section 3.3 herein);
6.2.6 All matters of public record as of the effective date of the
Title Commitment;
6.2.7 The Permitted Exceptions;
6.2.8 Any matters shown on the Survey; and
6.2.9 All matters, whether or not of record, to the extent caused by
Buyer or its agents, representatives or contractors.
6.3 Lease Assignment. At the Closing, Seller shall assign the Leases to
Buyer and Buyer shall assume Seller's obligations thereunder and Seller shall
convey the Personal Property to Buyer by quitclaim bill of sale.
6.4 Existing Loan.
6.4.1 The obligations of Seller under this Agreement are contingent
and conditioned upon the following:
i. Lender's approval of the assignment to Buyer of the
Existing Loan; and
ii. Receipt by Seller from Lender at Closing of a release of
all of its obligations as borrower under the Loan
Documents, including, without limitation, a release by
Lender of Seller from its obligations under the
Hazardous Substances Indemnity Agreement listed on
Exhibit G.
6.4.2 On or before the date hereof, Seller shall provide Buyer with
a true, correct and complete copy of all Loan Documents executed in
connection with the Existing Loan, which documents are listed on Exhibit G
attached hereto.
6.4.3 Subject to Section 3.8 above, Seller shall advance any fees or
costs required by Lender prior to the Closing for applying for Lender's
consent to the assumption of the Existing Loan. Buyer and Seller agree to
diligently pursue such application until Lender grants its approval of the
assignment and assumption of the Existing Loan to Buyer, including, but
not limited to, timely submission of all materials requested by Lender
and/or those documents required to be submitted to Lender pursuant to the
applicable provisions of the Loan Documents.
6.4.4 Buyer and Seller agree to cooperate with Buyer's efforts to
obtain Lender's consent. Subject to the other provisions of this
Agreement, Buyer and Seller each agree to execute and deliver any and all
documents or instruments or take such other action as may be necessary or
proper to effectuate, confirm, perform or carry out the assignment and
assumption of the Existing Loan.
ARTICLE 7
CONDITIONS PRECEDENT AND CLOSING
7.1 Buyer's Conditions Precedent. In addition to any other conditions
precedent in favor of Buyer as may be set forth elsewhere in this Agreement,
Buyer's obligations under this Agreement are expressly subject to the timely
fulfillment of the conditions set forth in this Section 7.1 on or before the
Closing Date, or such earlier date as is set forth below. Each condition may be
waived in whole or in part only by written notice of such waiver from Buyer to
Seller.
7.1.1 Seller performing and complying in all material respects with
all of the terms of this Agreement to be performed and complied with by
Seller prior to or at the Closing;
7.1.2 Satisfaction in full of the requirements of Section 6.4 with
respect to the Existing Loan;
7.1.3 The form of the loan assumption documents being satisfactory
to Buyer in its sole, but reasonable discretion. There shall be no change
in the non-recourse nature of the Loan.
Notwithstanding the foregoing, if the conditions set forth in Sections
7.1.1-7.1.3 or any other condition of Closing (other than an obligation of Buyer
under Section 7.2 below) shall not have been fulfilled on or before the Closing
Date, Seller shall have the right (in its sole discretion), exercisable by
written notice to Buyer at or before the Closing, to extend the Closing Date for
a period of up to forty-five (45) days to provide additional time for the
fulfillment of such conditions. Upon any such extension, the term "Closing Date"
as used herein shall mean the date set forth in such written notice from Seller.
If Buyer's conditions as set forth in this Section 7.1 have not been met as of
the Closing Date (as the same may be extended as aforesaid) then Buyer shall
have the right to terminate this Agreement by written notice to Seller, and upon
receipt of such notice Seller shall direct the Escrow Agent to return the
Escrowed Amount to Buyer and this Agreement shall thereupon terminate and be of
no further force or effect.
7.2 Seller's Conditions Precedent. In addition to any other conditions
precedent in favor of Seller as may be set forth elsewhere in this Agreement,
Seller's obligations under this Agreement are expressly subject to the timely
fulfillment of the conditions set forth in this Section 7.2 on or before the
Closing Date, or such earlier date as is set forth below. Each condition may be
waived in whole or part only by written notice of such waiver from Seller to
Buyer.
7.2.1 Buyer performing and complying in all material respects with
all of the terms of this Agreement to be performed and complied with by
Buyer prior to or at the Closing, including, without limitation, payment
by the Buyer of the Purchase Price (as adjusted as otherwise provided
herein);.
7.2.2 On the Closing Date, all of the representations of Buyer set
forth in this Agreement shall continue to be true, accurate and complete.
7.2.3 Satisfaction of the requirements of Section 6.4 with respect
to the Existing Loan.
7.2.4 The release by Lender of Seller from any and all obligations
and liability under the Existing Loan Documents and the form of the
assumption and release documents being satisfactory to Seller in its sole,
but reasonable discretion.
7.3 Closing Date. Subject to Seller's right to extend the Closing Date as
provided in Section 7.1, the consummation of the purchase and sale contemplated
in this Agreement (the "Closing") shall occur through an escrow closing
arrangement on date that is thirty days from the Diligence Date (the "Closing
Date") through the escrow closing arrangements substantially as set forth in the
Form of Escrow Closing Instructions attached hereto as Exhibit F. It is agreed
that time is of the essence in this Agreement.
7.4 Closing Deliveries. On the Closing Date, Seller shall deliver or
cause to be delivered:
7.4.1 A duly executed and acknowledged special warranty deed
conveying the Land and the Improvements to Buyer;
7.4.2 A duly executed quitclaim bill of sale and general assignment
conveying the Personal Property and the Intangible Property to Buyer;
7.4.3 A duly executed assignment and assumption of the Leases and
Tenant Deposits (the "Assignment of Leases");
7.4.4 A duly executed assignment and assumption of Property
Contracts being assumed (the "Assignment of Contracts");
7.4.5 A certificate or certificates of non-foreign status from
Seller;
7.4.6 Customary affidavits sufficient for the Escrow Agent to delete
any exceptions for mechanic's or materialmen's liens and parties in
possession from Buyer's title policy and such other affidavits relating to
such title policy as the Escrow Agent may reasonably request;
7.4.7 An updated Rent Roll (including a list of all delinquent and
prepaid rents) certified by the Seller as true and correct as of the
Closing Date;
7.4.8 Such other instruments as Buyer, Lender or the Escrow Agent
may reasonably request to effectuate the transactions contemplated by this
Agreement;
7.4.9 A duly executed counterpart original of the closing statement
setting forth the Purchase Price, the closing adjustments and the
application of the Purchase Price as adjusted;
7.4.10 Evidence or documents as may reasonably be required by the
Escrow Agent evidencing the status and capacity of Seller to sell the
Property and the authority of the person or persons executing the various
documents on behalf of Seller in connection with the sale of the Property;
7.4.11 Originals, or where unavailable, copies of all Property
Contracts, Leases (with all amendments and modifications thereto),
operating information, permits, warranties and financial information about
the Property in Seller's possession or control relating to the Property;
7.4.12 All keys to all locks on the Property and similar
items, to the extent in Seller's possession; and
7.4.13 The following documents with respect to the assignment and
assumption of the Existing Loan:
(i) Assignment and Assumption of the Mortgage;
(ii) Assignment of Assignment of Leases and Rents;
(iii) UCC-3 Assignments of Financing Statements; and
(iv) Written approval of Lender to the assignment to Buyer of
the Existing Loan to Buyer.
7.5 Buyer's Deliveries. On the Closing Date, Buyer shall deliver or cause
to be delivered at its expense each of the following to Seller:
7.5.1 The Purchase Price for the Property, as such Purchase Price
may have been adjusted pursuant to the provisions of this Agreement and
credited for any portion of the Escrowed Amount paid to Seller, in the
manner provided for in Article 3;
7.5.2 Evidence in form and substance reasonably satisfactory to
Escrow Agent and Seller of Buyer's authority to purchase the Property;
7.5.3 The Assignment of Leases;
7.5.4 The Assignment of Contracts;
7.5.5 Duly executed assumption agreement regarding the Existing Loan
Documents and such other instruments as Lender may require in connection
with and to evidence the assumption of the Existing Loan Documents by
Buyer;
7.5.6 Such other instruments as Seller or Escrow Agent may
reasonably request to effectuate the transactions contemplated by this
Agreement;
7.5.7 A duly executed counterpart original of the closing statement
setting forth the Purchase Price, the closing adjustments and the
application of such amounts;
7.5.8 Such evidence or documents as may reasonably be required by
the Escrow Agent evidencing the status and capacity of Buyer and the
authority of the person or persons who are executing the various documents
on behalf of Buyer in connection with the purchase of the Property;
7.5.9 Acknowledgment by Buyer of Buyer's receipt from Seller of
the Tenant Deposits; and
7.5.10 The following documents with respect to the assignment and
assumption of the Existing Loan:
(i) Written approval of Lender to the assignment to Buyer
of the Existing Loan;
(ii) Assignment and Assumption of the Mortgage;
(iii) Assignment of Assignment of Leases and Rents;
(iv) UCC-3 Assignments of Financing Statements; and
(v) Release of Seller's obligations under the Loan Documents
(hereinafter defined), including, without limitation, a release of
Seller from its obligations pursuant to the Environmental Indemnity
Agreement executed in connection with the Existing Loan, all in
forms reasonably satisfactory to Seller; and
(vi) Such other documents as may be reasonably requested by
Lender in connection with the assignment of the Existing Loan to
Buyer and the assumption of the obligations under the Existing Loan.
7.5.11 Executed counterparts of any other documents listed in
Section 7.4 required to be signed by Buyer.
7.6 Possession. Possession of the Property shall be delivered to Buyer by
Seller at the Closing, subject only to those items listed in Section 6.2 of this
Agreement and rights arising under any Property Contracts not terminated by
Buyer pursuant to Section 4.3. Seller and Buyer covenant and agree to execute,
at Closing, a written notice of the acquisition of the Property by Buyer, for
duplication and transmittal to all tenants affected by the sale and purchase of
the Property (or otherwise in such manner as will comply with applicable law
respecting notification of tenants). Such notice shall be prepared by Buyer and
approved by Seller, shall notify the tenants of the sale and transfer and shall
contain appropriate instructions relating to the payment of future rentals, the
giving of future notices, and other matters reasonably required by Buyer or
required by law. Unless a different procedure is required by applicable law, in
which event such laws shall be controlling, Buyer agrees to transmit or
otherwise deliver such letters to the tenants promptly after the Closing.
ARTICLE 8
CASUALTY AND CONDEMNATION
8.1 Casualty. If the Improvements are materially damaged by fire or any
other casualty and are not substantially restored to the condition immediately
prior to such casualty before the Closing Date, Buyer shall have the following
elections:
8.1.1 to purchase the Property in its then condition and pay the
Purchase Price, in which event Seller shall pay over or assign to Buyer as
the case may be, on the Closing Date, amounts recovered or recoverable by
Seller on account of any insurance as a result of such casualty, including
but not limited to loss of rent coverage, and amounts equal to any of
Seller's deductible limits, less any amounts reasonably expended by Seller
for partial restoration; or
8.1.2 if any portion of the Improvements suffers damage in excess of
$100,000 from fire or any other casualty which Seller, in its sole option,
elects not to repair, to terminate this Agreement by giving notice of
termination to Seller on or before that date which is thirty (30) days
after the occurrence of the fire or other casualty or on the Closing Date,
whichever occurs first, in which event the Escrow Agent shall return the
Escrowed Amount to Buyer, this Agreement shall terminate and neither
Seller nor Buyer shall have any recourse against the other (except to the
extent such recourse arises in connection with a provision of this
Agreement which is intended to survive termination).
8.2 Condemnation. If any substantial portion of or interest in the
Property shall be taken or is in the process of being taken by exercise of the
power of eminent domain or if any governmental authority notifies Seller prior
to the Closing Date of its intent to take or acquire any portion of or interest
in the Property (each an "Eminent Domain Taking"), Seller shall give notice
promptly to Buyer of such event and Buyer shall have the option to terminate
this Agreement by providing notice to Seller to such effect on or before the
date which is ten (10) days from Seller's notice to Buyer of such Eminent Domain
Taking or on the Closing Date, whichever occurs first, in which event the Escrow
Agent shall return the Escrowed Amount to Buyer, this Agreement shall terminate,
and neither Seller nor Buyer shall have any recourse against the other (except
to the extent such recourse arises in connection with a provision of this
Agreement which is intended to survive termination). If Buyer does not timely
notify Seller of its election to terminate this Agreement, Buyer shall purchase
the Property and pay the Purchase Price, and Seller shall pay over or assign to
Buyer on delivery of the deed awards recovered or recoverable by Seller on
account of such Eminent Domain Taking up to the amount of the Purchase Price,
less any amounts reasonably expended by Seller in obtaining such award which are
not reimbursable by the condemning authority.
ARTICLE 9
BROKERAGE COMMISSIONS
Seller and Buyer each mutually represent and warrant to the other that
they have not dealt with, and are not obligated to pay, any fees or commissions
to any broker in connection with the transaction contemplated by this Agreement
other than RJS/Jackson Group (the "Broker"). Seller agrees to pay all
commissions, payments and fees due to the Broker at the Closing. Buyer agrees to
indemnify, defend and hold Seller harmless from and against all loss,
liabilities, costs, damages and expenses (including reasonable attorney's' fees)
arising from any claims for brokerage or finder's fees, commissions or other
similar fees in connection with the transaction covered by this Agreement
insofar as such claims shall be based upon alleged arrangements or agreements
made by Buyer or on Buyer's behalf. Seller hereby agrees to indemnify, defend
and hold Buyer harmless from and against all loss, liabilities, costs, damages
and expenses (including reasonable attorney's' fees) arising from any claims for
brokerage or finders' fees, commissions or other similar fees, including any
claim made by the Broker, in connection with the transaction covered by this
Agreement as such claims shall be based upon alleged arrangements or agreements
made by Seller or on Seller's behalf. The covenants and agreements contained in
this Article shall survive the termination of this Agreement or the Closing of
the transaction contemplated hereunder.
ARTICLE 10
DEFAULT, TERMINATION AND REMEDIES
10.1 Seller's Default. In the event that Seller shall have failed in any
material respect adverse to Buyer as of the Closing Date to have performed any
of the covenants and agreements contained in this Agreement which are to be
performed by Seller on or before the Closing Date or Seller defaults in its
obligation to close hereunder, Buyer, at Buyer's option, shall have the right to
(i) terminate this Agreement and receive the Escrowed Amount and reimbursement
of actual costs incurred by Buyer in connection with its due diligence up to an
amount of $25,000.00, whereupon this Agreement shall terminate without further
recourse; or (ii) provided an action is filed within thirty (30) days after
Buyer becomes aware of such failure, Buyer may seek specific performance of
Seller's obligation to execute and deliver the conveyance documents required of
it in this Agreement, but not damages. Buyer's failure to seek specific
performance as aforesaid shall constitute its election to proceed under clause
(i) above. IN NO EVENT SHALL SELLER, ITS DIRECT OR INDIRECT PARTNERS,
SHAREHOLDERS, OWNERS OR AFFILIATES, ANY OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF
THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING PERSON THEREOF, HAVE ANY
LIABILITY BEYOND ITS INTEREST IN THE PROPERTY FOR ANY CLAIM, CAUSE OF ACTION OR
OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PROPERTY,
WHETHER BASED ON COMMON LAW, CONTRACT, STATUTE, EQUITY OR OTHERWISE.
10.2 Buyer's Default. In the event that Buyer shall have failed in any
material respect adverse to Seller as of the Closing Date to have performed any
of the covenants and agreements contained in this Agreement which are to be
performed by Buyer on or before the Closing Date, or if Buyer defaults in its
obligation to close hereunder, Seller shall be entitled to receive the Escrowed
Amount as liquidated damages, in lieu of all other remedies available to Seller
at law or in equity for such default, and Buyer shall direct the Escrow Agent to
release the Escrowed Amount to Seller. Seller and Buyer agree that the damages
resulting to Seller as a result of such default by Buyer as of the date of this
Agreement are difficult or impossible to ascertain and the liquidated damages
set forth in the preceding sentence constitute Buyer's and Seller's reasonable
estimate of such damages. Notwithstanding the foregoing, in the event of Buyer's
default or a termination of this Agreement, Seller shall have all remedies
available at law or in equity in the event Buyer or any party related to or
affiliated with Buyer asserts any claims or rights to the Property that would
otherwise delay or prevent Seller from having clear, indefeasible and marketable
title to the Property.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
11.1 Buyer's Representations and Warranties. Buyer represents and warrants
to Seller that:
11.1.1 Buyer is a corporation and has the power and authority to
enter into this Agreement and to execute and deliver this Agreement and to
perform all duties and obligations imposed upon it hereunder. Buyer to the
best of its knowledge, has the financial ability to pay the Purchase Price
by (i) tendering the Cash Balance, and (ii) assuming the Existing Loan,
and to perform the other covenants of Buyer set forth in this Agreement.
11.1.2 Neither the execution nor the delivery of this Agreement, nor
the consummation of the purchase and sale transaction contemplated hereby,
nor the fulfillment of or compliance with the terms and conditions of this
Agreement conflict with or will result in the breach of any of the terms,
conditions or provisions of any agreement or instrument to which Buyer is
a party or by which Buyer or any of Buyer's assets is bound;
11.1.3 Buyer is not in any way affiliated with Seller;
11.1.4 Except for the approval by Lender of Buyer's assumption of
the Existing Loan as described in Section 6.4, no approval, consent, order
or authorization of, or designation, registration or declaration with, any
of the United States, the State of Florida, any department, board, agency,
office, commission or other subdivisions thereof, or any official thereof
or any third party is required in connection with the valid execution and
delivery of, and performance of the covenants of, this Agreement by Buyer.
11.1.5 There are no actions, suits or proceedings pending or, to the
knowledge of Buyer, threatened, against or affecting Buyer which, if
determined adversely to Buyer, would adversely affect its ability to
perform its obligations hereunder.
As a condition precedent to Seller's obligation to close the purchase and
sale transaction contemplated in this Agreement, Buyer's representations and
warranties contained herein must remain and be true and correct as of the
Closing Date. Prior to the Closing Date, Buyer shall notify Seller in writing of
any facts, conditions or circumstances which render any of the representations
and warranties set forth in this Section 11.1 in any way inaccurate, incomplete,
incorrect or misleading.
11.2 Seller's Representations and Warranties. Seller is a general
partnership existing under the laws of the State of Florida.
11.2.1 Seller has full right, power and authority and is duly
authorized to enter into this Agreement, to perform each of the covenants
on its part to be performed hereunder and to execute and deliver, and to
perform its obligations under all documents required to be executed and
delivered by it pursuant to this Agreement and this Agreement constitutes
the valid and binding obligation of Seller enforceable in accordance with
its terms.
11.2.2 A list of all notes, mortgages loan agreements and other
financing documents relating to the Existing Loan is attached to this
Agreement as Exhibit G. To Seller's knowledge, no default exists or is
claimed to exist on the part of the borrower under the Existing Loan, and
to Seller's knowledge, no event or condition exists which, with the giving
of notice, passage of time or both could constitute such a default.
11.2.3 Seller has directed its manager to deliver or to make
available to Buyer (i) complete copies of all Leases and (ii) the Rent
Roll.
11.2.4 Seller has caused its property manager to deliver or to make
available copies of all Property Contracts.
11.2.5 Seller has not been served with notice of any actions, suits,
or proceedings against or affecting the Seller or the Property that either
(i) are not covered by applicable insurance or (ii) if determined
adversely to Seller would materially affect the ownership or operation of
the Property or Seller's ability to perform its obligations under this
Agreement.
Seller reserves the right to update the representations and warranties
made by it herein. All of Seller's representations and warranties shall be
deemed to be updated by information disclosed to or obtained by Purchaser in
connection with its due diligence investigations.
11.3 Seller; Seller's Knowledge. Whenever a representation is made to
"Seller's knowledge", or a term of similar import, the accuracy of such
representation shall be based solely on the actual knowledge of Rock M. D'Errico
("D'Errico"), without independent investigation or inquiry except for inquiry of
Seller's property manager for the Property. D'Errico is the employee of a
general partner of Seller who has had primary responsibility for the sale of the
Property to Buyer. Notwithstanding the foregoing, if, prior to the Closing,
Buyer obtains actual knowledge that any representation or warranty of Seller is
inaccurate and Buyer nonetheless proceeds with the Closing, Seller shall have no
liability for any such matter regarding which Buyer had actual knowledge prior
to Closing.
11.4 Property Conveyed "AS IS". (a) NOTWITHSTANDING ANYTHING CONTAINED
HEREIN TO THE CONTRARY, IT IS UNDERSTOOD AND AGREED THAT, EXCEPT AS EXPRESSLY
SET FORTH HEREIN, SELLER AND ITS PROPERTY MANAGER HAVE NOT MADE AND ARE NOT NOW
MAKING, AND THEY SPECIFICALLY DISCLAIM, ANY OTHER WARRANTIES, REPRESENTATIONS OR
GUARANTIES OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST,
PRESENT OR FUTURE, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES, REPRESENTATIONS OR GUARANTIES AS TO (I) MATTERS OF TITLE (OTHER THAN
SELLER'S WARRANTY OF TITLE SET FORTH IN THE DEED (HEREINAFTER DEFINED) TO BE
DELIVERED AT CLOSING), (II) ENVIRONMENTAL MATTERS RELATING TO THE PROPERTY OR
ANY PORTION THEREOF, (III) GEOLOGICAL CONDITIONS, INCLUDING, WITHOUT LIMITATION,
SUBSIDENCE, SUBSURFACE CONDITIONS, WATER TABLE, UNDERGROUND WATER RESERVOIRS,
LIMITATIONS REGARDING THE WITHDRAWAL OF WATER, AND EARTHQUAKE FAULTS AND THE
RESULTING DAMAGE OF PAST AND/OR FUTURE EARTHQUAKES, (IV) WHETHER, AND TO THE
EXTENT TO WHICH THE PROPERTY OR ANY PORTION THEREOF IS AFFECTED BY ANY STREAM
(SURFACE OR UNDERGROUND), BODY OF WATER, FLOOD PRONE AREA, FLOOD PLAIN, FLOODWAY
OR SPECIAL FLOOD HAZARD, (V) DRAINAGE, (VI) SOIL CONDITIONS, INCLUDING THE
EXISTENCE OF INSTABILITY, PAST SOLID REPAIRS, SOIL ADDITIONS OR CONDITIONS OF
SOIL FILL, OR SUSCEPTIBILITY TO LANDSLIDES, OR THE SUFFICIENCY OF ANY
UNDERSHORING, (VII) ZONING TO WHICH THE PROPERTY OR ANY PORTION THEREOF MAY BE
SUBJECT, (VIII) THE AVAILABILITY OF ANY UTILITIES TO THE PROPERTY OR ANY PORTION
THEREOF INCLUDING, WITHOUT LIMITATION, WATER, SEWAGE, GAS AND ELECTRIC, (IX)
USAGES OF ADJOINING PROPERTY, (X) ACCESS TO THE PROPERTY OR ANY PORTION THEREOF,
(XI) THE VALUE, COMPLIANCE WITH THE PLANS AND SPECIFICATIONS, SIZE, LOCATION,
AGE, USE, DESIGN, QUALITY, DESCRIPTION, SUITABILITY, STRUCTURAL INTEGRITY,
OPERATION, TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION OF THE PROPERTY OR ANY
PORTION THEREOF, OR ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS
OR CLAIMS ON OR AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF, OR
ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS OR CLAIMS ON OR
AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF, (XII) THE PRESENCE
OF HAZARDOUS SUBSTANCES (HEREINAFTER DEFINED) IN OR ON, UNDER OR IN THE VICINITY
OF THE PROPERTY, (XIII) THE CONDITION OR USE OF THE PROPERTY OR COMPLIANCE OF
THE PROPERTY WITH ANY OR ALL PAST, PRESENT OR FUTURE FEDERAL, STATE OR LOCAL
ORDINANCES, RULES, REGULATIONS OR LAWS, BUILDING, FIRE OR ZONING ORDINANCES,
CODES OR OTHER SIMILAR LAWS, (XIV) THE EXISTENCE OR NON-EXISTENCE OF UNDERGROUND
STORAGE TANKS, (XV) ANY OTHER MATTER AFFECTING THE STABILITY OR INTEGRITY OF THE
REAL PROPERTY, (XVI) THE POTENTIAL FOR FURTHER DEVELOPMENT OF THE PROPERTY,
(XVII) THE EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING ENTITLEMENTS
AFFECTING THE PROPERTY, (XVIII) THE MERCHANTABILITY OF THE PROPERTY OR FITNESS
OF THAT PROPERTY FOR ANY PARTICULAR PURPOSE (BUYER AFFIRMING THAT BUYER HAS NOT
RELIED ON SELLER'S OR ITS PROPERTY MANAGER'S SKILL OR JUDGMENT TO SELECT OR
FURNISH THE PROPERTY FOR ANY PARTICULAR PURPOSE, AND THAT SELLER MAKES NO
WARRANTY THAT THE PROPERTY IS FIT FOR ANY PARTICULAR PURPOSE), OR (XIX) TAX
CONSEQUENCES.
(b) BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER
DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLER OR ITS PROPERTY
MANAGER OR ANY OF THEIR RESPECTIVE AGENTS, EXPECT AS EXPRESSLY SET FORTH HEREIN,
AND ACKNOWLEDGES THAT NO OTHER SUCH REPRESENTATIONS HAVE BEEN MADE. BUYER
REPRESENTS THAT IT IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED BUYER OF
REAL ESTATE AND THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF
BUYER'S CONSULTANTS IN PURCHASING THE PROPERTY. BUYER WILL CONDUCT SUCH
INSPECTIONS AND INVESTIGATIONS OF THE PROPERTY AS BUYER DEEMS NECESSARY,
INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS
THEREOF, AND SHALL RELY UPON SAME. UPON CLOSING, BUYER SHALL ASSUME THE RISK
THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL AND
ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S INSPECTIONS AND
INVESTIGATIONS. BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING, SELLER SHALL
SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS",
WITH ALL FAULTS. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT THERE ARE NO ORAL
AGREEMENTS, WARRANTIES OR REPRESENTATIONS, COLLATERAL TO OR AFFECTING THE
PROPERTY BY SELLER, ANY AGENT OF SELLER OR ANY THIRD PARTY. THE TERMS AND
CONDITIONS OF THIS SECTION 11.4(b) SHALL EXPRESSLY SURVIVE THE CLOSING, NOT
MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENTS AND SHALL BE INCORPORATED
INTO THE DEED. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR
WRITTEN STATEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO THE PROPERTY
FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR OTHER PERSON,
UNLESS THE SAME ARE SPECIFICALLY SET FORTH OR REFERRED TO HEREIN. BUYER
ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS THE "AS IS" NATURE OF THIS SALE
AND ANY FAULTS, LIABILITIES, DEFECTS OR OTHER ADVERSE MATTERS THAT MAY BE
ASSOCIATED WITH THE PROPERTY. BUYER HAS FULLY REVIEWED THE DISCLAIMERS AND
WAIVERS SET FORTH IN THIS AGREEMENT WITH ITS COUNSEL AND UNDERSTANDS THE
SIGNIFICANCE AND EFFECT THEREOF.
--------------
Buyer's Initials
ARTICLE 12
MISCELLANEOUS
12.1 Successors and Assigns. Without the prior written consent of Seller,
Buyer shall not, directly or indirectly, assign this Agreement or any of its
rights hereunder. Any attempted assignment in violation hereof shall, at the
election of Seller in its sole discretion, be of no force or effect and shall
constitute a default by Buyer. Notwithstanding the foregoing and so long as it
will not affect the Lender's consent to or the timing of the Closing Buyer may
elect to have a nominee entity accept title to the Property at Closing, provided
that any such nominee must be an affiliated entity controlled by or under common
control with Buyer, and Buyer shall give written notice of such nominee to
Seller, together with any reasonable evidence of affiliation requested by
Seller, a minimum of ten (10) days prior to Closing. No designation of a nominee
to receive title shall release Buyer from its obligations under this Agreement.
12.2 Notices. Except as otherwise specifically provided herein, any notice
required or permitted to be delivered under this Agreement shall be in writing
and shall be deemed given when delivered or refused when sent by (i) hand during
regular business hours or (ii) a reputable overnight express mail service that
provides tracing and proof of receipt or refusal of items mailed, addressed to
Seller or Buyer, as the case may be, at the address or addresses set forth below
or such other addresses as the parties may designate in a notice similarly sent.
Any notice given by a party to Escrow Agent shall be simultaneously given to the
other party. Any notice given by a party to the other party relating to its
entitlement to the Escrowed Amount shall be simultaneously given to the Escrow
Agent. Any notice given by a party's counsel to the other party's counsel shall
be deemed to be notice given to the other party.
(1) If to Seller:
c/o Paine Webber Properties Incorporated
265 Franklin Street - 15th Floor
Boston, MA 02110
Attn: Mr. Rock D'Errico
with a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attn: Melissa Fang, Esq./Andrew C. Sucoff
(2) If to Buyer:
Susi Enterprises, Inc.
c/o Samuel Susi, Esq.
551 N.W. 77th Street
Suite 109
Boca Raton, Florida 33487
(3) If to the Escrow Agent:
First American Title Insurance Company
1 Financial Center
Boston, MA 02111
Attn: Mr. Harry Stoddard, National Counsel
12.3 Construction. Words of any gender used in this Agreement shall be
held and construed to include any other gender, and words of a singular number
shall be held to include the plural and vice versa, unless the context requires
otherwise.
12.4 Captions. The captions used in connection with the Articles of this
Agreement are for convenience only and shall not be deemed to extend, limit or
otherwise define or construe the meaning of the language of this Agreement.
12.5 No Other Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
12.6 Amendments. This Agreement may be amended only by a written
instrument executed by Seller and Buyer (or Buyer's assignee or transferee).
12.7 Severability. If any provision of this Agreement or application to
any party or circumstance shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder of
this Agreement or the application of such provision to such person or
circumstances, other than those as to which it is so determined invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
valid and shall be enforced to the fullest extent permitted by law.
12.8 Applicable Law. This Agreement shall be construed under and in
accordance with the laws of state in which the Property is located.
12.9 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be an original but such counterparts together
shall constitute one and the same instrument notwithstanding that both Buyer and
Seller are not signatory to the same counterpart.
12.10 Time of the Essence. Time is expressly declared to be of the essence
of this Agreement, provided, however that in the event any date hereunder falls
on a Saturday, Sunday or legal holiday, the date applicable shall be the next
business day.
12.11 No Personal Liability. The obligations of Seller hereunder shall be
binding only on the Property and neither Buyer nor anyone claiming by, through
or under Buyer shall be entitled to obtain any judgment extending liability
beyond the Property or creating personal liability on the part of the partners
of the Seller or of the officers, directors, shareholders, advisors or agents of
Seller or Seller's partners or any of their successors.
12.12 No Recordation. Without the prior written consent of Seller, there
shall be no recordation of either this Agreement or any memorandum hereof, or
any affidavit pertaining hereto, and any such recordation of this Agreement or
memorandum hereto by Purchaser without the prior written consent of Seller shall
constitute a default hereunder by Buyer, whereupon this Agreement shall, at the
option of Seller, terminate and be of no further force and effect. Upon
termination, the Escrowed Amount shall be immediately delivered to Seller,
whereupon the parties shall have no further duties or obligations to one another
except as otherwise specifically provided herein.
12.13 Waiver. The excuse or waiver of the performance by a party of any
obligation of the other party under this Agreement shall only be effective if
evidenced by a written statement signed by the party so excusing or waiving. No
delay in exercising any right or remedy shall constitute a waiver thereof, and
no waiver by Seller or Buyer of the breach of any covenant of this Agreement
shall be construed as a waiver of any preceding or succeeding breach of the same
or any other covenant or condition of this Agreement.
12.14 Binding On Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
12.15 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the transactions contemplated herein,
and it supersedes all prior discussions, understandings or agreements between
the parties. All Exhibits and Schedules attached hereto are a part of this
Agreement and are incorporated herein by reference.
12.16 Construction of Agreement. This Agreement shall not be construed
more strictly against one party than against the other merely by virtue of the
fact that it may have been prepared primarily by counsel for one of the parties,
it being recognized that both Buyer and Seller have contributed substantially
and materially to the preparation of this Agreement.
12.17 Further Instruments. Each party, promptly upon the request of the
other, shall execute and have acknowledged and delivered to the other or to
Escrow Agent, as may be appropriate, any and all further instruments reasonably
requested or appropriate to evidence or give effect to the provisions of this
Agreement and which are consistent with the provisions of this Agreement.
12.18 Buyer Represented by Counsel. Buyer hereby represents and warrants
to Seller that (i) Buyer is not in a significantly disparate bargaining position
in relation to Seller, (ii) Buyer is represented by legal counsel in connection
with the transaction contemplated by this Agreement, and (iii) Buyer is buying
the Property for business, commercial, investment or other similar purpose and
not for use as Buyer's residence.
12.19 Preparation of Documents. All of the documents to be executed at the
Closing shall be in the form prepared to the reasonable satisfaction of Seller's
and Buyer's counsel and delivered to Buyer on or before five (5) days prior to
the Closing Date, provided that the failure to timely deliver such documents
shall not constitute a default by Seller hereunder.
ARTICLE 13
IRS FORM 1099-S DESIGNATION
13.1 In order to comply with information reporting requirements of Section
6045(e) of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations thereunder, the parties agree (1) to execute an IRS Form 1099-S
Designation Agreement in the form attached hereto as Schedule D at or prior to
the Closing to designate the Title Company (the "Designee") as the party who
shall be responsible for reporting the contemplated sale of the Property to the
Internal Revenue Service (the "IRS") on IRS Form 1099-S; (2) to provide the
Designee with the information necessary to complete Form 1099-S; (3) that the
Designee shall not be liable for the actions taken under this Agreement, or for
the consequences of those actions, except as they may be the result of gross
negligence or willful misconduct on the part of the Designee; and (4) that the
Designee shall be indemnified by the parties for any costs or expenses incurred
as a result of the actions taken hereunder, except as they may be the result of
gross negligence or willful misconduct on the part of the Designee. The Designee
shall provide all parties to this transaction with copies of the IRS Forms
1099-S filed with the IRS and with any other documents used to complete IRS Form
1099-S.
ARTICLE 14
STATE REQUIREMENTS
14.1 Radon Gas Disclosure. Pursuant to Section 404.056(8), Florida
Statutes (1988) the following notification regarding radon gas is hereby made,
and all parties executing this Agreement acknowledge receipt of this
notification:
Radon Gas: Radon is a naturally occurring radioactive gas that, when it
has accumulated in a building in sufficient quantities, may present health
risks to persons who are exposed to it over time. Levels of radon that
exceed federal and state guidelines have been found in buildings in
Florida. Additional information regarding radon and radon testing may be
obtained from your County Public Health Unit.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this instrument as of the
day and year first set forth above.
SELLER:
WEST PALM BEACH CONCOURSE ASSOCIATES, a
Florida general partnership
By: PaineWebber Income Properties Seven
Limited Partnership, a Delaware
limited partnership, a general
partner
By: Seventh Income Properties
Fund, Inc., a Delaware
corporation, Managing General
Partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
By: Seventh Income Properties Fund,
Inc., a Delaware corporation, a
general partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
<PAGE>
BUYER:
SUSI ENTERPRISES, INC. a Florida
corporation
By: /s/ Samuel Susi
---------------
Name: Samuel Susi
Title: President
<PAGE>
JOINDER BY TITLE COMPANY
First American Title Insurance Company, referred to in this Agreement as
the Escrow Agent, hereby acknowledges that it received this Agreement executed
by Seller and Buyer on the 7th day of August, 1998, and accepts the obligations
of the Escrow Agent as set forth herein. It further acknowledges that it
received the Deposit on the 14th day of August, 1998. The Escrow Agent agrees to
deposit the Deposit and to distribute the Escrowed Amount in accordance with the
terms and provisions of this Agreement.
ESCROW AGENT:
First American Title Insurance Company
By: /s/ Harry G. Stoddard
---------------------
Name: Harry G. Stoddard
Title: Vice President and Counsel
Date: August 18, 1998
<PAGE>
FIRST AMENDMENT
TO
PURCHASE AND SALE
This FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment") is
entered into between WEST PALM BEACH CONCOURSE ASSOCIATES, a Florida general
partnership ("Seller"), and SUSI ENTERPRISES, INC., a Florida corporation
("Buyer") as of October 9, 1998.
WHEREAS, Seller and Buyer entered into that certain Purchase and Sale
Agreement executed by Buyer and Seller effective as of August 14, 1998 (the
"Agreement") for that certain property known as Concourse Shopping Plaza located
in West Palm Beach, Palm Beach County, Florida (the "premises");
WHEREAS, Seller and Buyer desire to amend the Agreement to extend the
Closing Date;
NOW, THEREFORE, for and in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and confessed, Seller and Buyer hereby agree as follows:
Sellerand Buyer each confirms the truth and accuracy of the recitals, each of
which are made part of this Amendment.
All initial capitalized terms not defined herein shall have the meaning
ascribed to such terms in the Agreement.
Section 7.3 of the Agreement is hereby modified as follows:
The first sentence of Section 7.3 is deleted in its entirety and the
following sentence is added in replacement of that deleted sentence:
"Subject to Seller's right to extend the Closing Date as provided in
Section 7.1, the consummation of the purchase and sale contemplated
in this Agreement (the "Closing") shall occur through an escrow
closing arrangement on October 30, 1998 (the "Closing Date"),
through the escrow closing arrangement substantially as set forth in
the Form of Escrow Closing Instructions attached hereto Exhibit F."
Exceptas modified hereby, the terms and conditions of the Agreement shall
continue in full force and effect. This Amendment may be executed in
multiple counterparts, each of which shall be an original and all of which
together shall constitute one agreement. In order to expedite the
execution of this Amendment, a facsimile signature shall be binding and
have the same effect as an original signature.
[SIGNATURES ON NEXT PAGE]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and
year first said above.
SELLER:
WEST PALM BEACH CONCOURSE ASSOCIATES, a
Florida general partnership
By: PaineWebber Income Properties Seven
Limited Partnership, a Delaware
limited partnership, a general
partner
By: Seventh Income Properties
Fund, Inc., a Delaware
corporation, its managing
general partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
and
By: Seventh Income Properties Fund,
Inc., a Delaware corporation, a
general partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
BUYER:
SUSI ENTERPRISES, INC., a Florida
corporation
By: /s/ Samuel Susi
---------------
Samuel Susi, President
<PAGE>
SECOND AMENDMENT
TO
PURCHASE AND SALE
This SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment") is
entered into between WEST PALM BEACH CONCOURSE ASSOCIATES, a Florida general
partnership ("Seller"), and SUSI ENTERPRISES, INC., a Florida corporation
("Buyer") as of November 3, 1998.
WHEREAS, Seller and Buyer entered into that certain Purchase and Sale
Agreement executed by Buyer and Seller effective as of August 14, 1998, as
amended by First Amendment to Purchase and Sale Agreement dated October 9, 1998
(the "Agreement") for that certain property known as Concourse Shopping Plaza
located in West Palm Beach, Palm Beach County, Florida (the "premises");
WHEREAS, Seller and Buyer desire to further amend the Agreement to
extend the Closing Date;
NOW, THEREFORE, for and in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and confessed, Seller and Buyer hereby agree as follows:
Sellerand Buyer each confirms the truth and accuracy of the recitals, each of
which are made part of this Amendment.
All initial capitalized terms not defined herein shall have the meaning
ascribed to such terms in the Agreement.
Section 7.3 of the Agreement is hereby modified as follows:
The first sentence of Section 7.3 is deleted in its entirety and the
following sentence is added in replacement of that deleted sentence:
"Subject to Seller's right to extend the Closing Date as provided in
Section 7.1, the consummation of the purchase and sale contemplated
in this Agreement (the "Closing") shall occur through an escrow
closing arrangement on November 6, 1998 (the "Closing Date"),
through the escrow closing arrangement substantially as set forth in
the Form of Escrow Closing Instructions attached hereto Exhibit F."
Exceptas modified hereby, the terms and conditions of the Agreement shall
continue in full force and effect. This Amendment may be executed in
multiple counterparts, each of which shall be an original and all of which
together shall constitute one agreement. In order to expedite the
execution of this Amendment, a facsimile signature shall be binding and
have the same effect as an original signature.
[SIGNATURES ON NEXT PAGE]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and
year first said above.
SELLER:
WEST PALM BEACH CONCOURSE ASSOCIATES, a
Florida general partnership
By: PaineWebber Income Properties Seven
Limited Partnership, a Delaware
limited partnership, a general
partner
By: Seventh Income Properties
Fund, Inc., a Delaware
corporation, its managing
general partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
and
By: Seventh Income Properties Fund,
Inc., a Delaware corporation, a
general partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
BUYER:
SUSI ENTERPRISES, INC., a Florida
corporation
By: /s/ Samuel Susi
---------------
Samuel Susi, President
<PAGE>
THIRD AMENDMENT
TO
PURCHASE AND SALE
This THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment") is
entered into between WEST PALM BEACH CONCOURSE ASSOCIATES, a Florida general
partnership ("Seller"), and SUSI ENTERPRISES, INC., a Florida corporation
("Buyer") as of November 6, 1998.
WHEREAS, Seller and Buyer entered into that certain Purchase and Sale
Agreement executed by Buyer and Seller effective as of August 14, 1998, as
amended by First Amendment to Purchase and Sale Agreement dated October 9, 1998,
and as further amended by Second Amendment to Purchase and Sale Agreement dated
November 3, 1998 (the "Agreement") for that certain property known as Concourse
Shopping Plaza located in West Palm Beach, Palm Beach County, Florida (the
"premises");
WHEREAS, Seller and Buyer desire to further amend the Agreement to
extend the Closing Date;
NOW, THEREFORE, for and in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and confessed, Seller and Buyer hereby agree as follows:
Sellerand Buyer each confirms the truth and accuracy of the recitals, each of
which are made part of this Amendment.
All initial capitalized terms not defined herein shall have the meaning
ascribed to such terms in the Agreement.
Section 7.3 of the Agreement is hereby modified as follows:
The first sentence of Section 7.3 is deleted in its entirety and the
following sentence is added in replacement of that deleted sentence:
"Subject to Seller's right to extend the Closing Date as provided in
Section 7.1, the consummation of the purchase and sale contemplated
in this Agreement (the "Closing") shall occur through an escrow
closing arrangement on November 9, 1998 (the "Closing Date"),
through the escrow closing arrangement substantially as set forth in
the Form of Escrow Closing Instructions attached hereto Exhibit F."
Exceptas modified hereby, the terms and conditions of the Agreement shall
continue in full force and effect. This Amendment may be executed in
multiple counterparts, each of which shall be an original and all of which
together shall constitute one agreement. In order to expedite the
execution of this Amendment, a facsimile signature shall be binding and
have the same effect as an original signature.
[SIGNATURES ON NEXT PAGE]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and
year first said above.
SELLER:
WEST PALM BEACH CONCOURSE ASSOCIATES, a
Florida general partnership
By: PaineWebber Income Properties Seven
Limited Partnership, a Delaware
limited partnership, a general
partner
By: Seventh Income Properties
Fund, Inc., a Delaware
corporation, its managing
general partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
and
By: Seventh Income Properties Fund,
Inc., a Delaware corporation, a
general partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
BUYER:
SUSI ENTERPRISES, INC., a Florida
corporation
By: /s/ Samuel Susi
---------------
Samuel Susi, President
<PAGE>
This instrument prepared by:
GOODWIN, PROCTER & HOAR LLP
Exchange Place
Boston, MA 02109
SPECIAL WARRANTY DEED
This special warranty deed, made this 10th day of November, 1998, between
WEST PALM BEACH CONCOURSE ASSOCIATES, a Florida general partnership, with an
address c/o PaineWebber Income Properties Seven Limited Partnership, 265
Franklin Street, Boston, Massachusetts 02110 ("Grantor"), and WPB CONCOURSE
PLAZA, L.C., a Florida limited liability company, with an address c/o Samuel
Susi, Esq., 551 N.W. 77th Street, Suite 109, Boca Raton, Florida 33487
("Grantee").
WITNESSETH, that, Grantor, for and in consideration of the sum of TWO
MILLION AND 00/100 DOLLARS ($2,000,000.00), lawful money of the United States of
America, to Grantor in hand paid by Grantee, at or before the ensealing and
delivery of these presents, the receipt whereof is hereby acknowledged, granted,
bargained, sold, aliened, remised, released, conveyed and confirmed, and by
these presents do grant, bargain, sell, alien, remise, release, convey and
confirm unto Grantee, its heirs and assigns forever, all the parcel of land,
situated, lying and being in the County of Palm Beach, State of Florida, and
being more particularly described on Exhibit A attached hereto (the "Premises"):
Together with all and singular the tenements, hereditaments and
appurtenances thereunto belonging or in anywise appertaining, and the reversion
and reversions, remainder and remainders, rents, issues and profits thereof, and
also all the estate right, title, interest, dower and right of dower, separate
estate, property, possession, claim and demand whatsoever, as well as in equity,
of Grantor, of in and to the same, and every part and parcel thereof, with the
appurtenances.
To have and to hold the above granted, bargained and described Premises
with the appurtenances, unto Grantee, its heirs and assigns, to its own proper
use and benefit forever.
And Grantor, for itself and for its heirs, personal representatives and
administrators, does covenant, promise and agree to and with Grantee, its heirs
and assigns, that Grantor, at the time of the ensealing and delivery of these
presents, is lawfully seized of and in all and singular the above granted,
bargained and described Premises, with the appurtenances, and Grantor has good
right, full power and lawful authority to grant, bargain, sell and convey the
same in manner and form aforesaid. And Grantee, its heirs and assigns, shall and
may at all times hereafter peaceably and quietly have, hold, use, occupy,
possess and enjoy the above granted Premises and every part and parcel thereof,
with the appurtenances, without any let, suit, trouble, molestation, eviction or
disturbance of Grantor, its heirs or assigns, or of any other person or persons
lawfully claiming or to claim the same, by, through and under Grantor.
And Grantor, for itself and for its heirs, warrants the above described
and hereby granted and released Premises, and every part and parcel thereof,
with the appurtenances, unto Grantee, its heirs and assigns, against Grantor,
its heirs, and against all and every person or persons whomsoever lawfully
claiming or to claim the same, by, through and under Grantor, shall and will
warrant and by these presents forever defend.
<PAGE>
IN WITNESS WHEREOF, Grantor has hereunto set its hand and seal on the day
and year first above written.
Signed, sealed and delivered in the presence of:
WEST PALM BEACH CONCOURSE
ASSOCIATES, a Florida general
partnership
By: PaineWebber Income Properties
Seven Limited Partnership, a
Delaware limited partnership,
a general partner
By: Seventh Income
Properties Fund, Inc.,
a Delaware corporation,
its managing general
partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
By: Seventh Income
Properties Fund, Inc., a
Delaware corporation, a
general partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
<PAGE>
CONCOURSE PLAZA
WEST PALM BEACH, FLORIDA
ASSIGNMENT AND ASSUMPTION
OF LEASES AND TENANT DEPOSITS
THIS ASSIGNMENT AND ASSUMPTION OF LEASES AND TENANT DEPOSITS (this
"Assignment") is entered into as of the 10th of November, 1998, between West
Palm Beach Concourse Associates ("Assignor"), a Florida general partnership with
an address c/o PaineWebber Income Properties Seven Limited Partnership, 265
Franklin Street, Boston, Massachusetts 02110 and WPB CONCOURSE PLAZA, L.C.
("assignee"), a Florida limited liability company, with an address c/o Samuel
Susi, Esq., 551 N.W. 77th Street, Suite 109, Boca Raton, Florida 33487.
1. Real Property. The "Real Property" means the land located in the City
of West Palm Beach in the County of Palm Beach, State of Florida, commonly known
as "Concourse Plaza," being more particularly described on Exhibit "A" attached
hereto and made a part hereof (the "land"), and buildings, structures and other
improvements situated upon the Land and all other fixtures, systems and
facilities owned by Assignor and now located thereon (collectively, the
"Improvements") and the rights appurtenant thereto.
2. Leases. The "Leases" means those leases, tenancies, rental agreements
and occupancy agreements affecting the Real Property and which are described in
Exhibit B attached to this Assignment.
3. Tenant Deposits. "Tenant Deposits" means those security deposits and
prepaid rents held by or for Assignor on account of tenants under the Leases as
such deposits and with respect to which Assignee received a credit at the
closing of the transaction with respect to which this Assignment has been
executed and delivered. The Tenant Deposits are set forth on attached Exhibit C.
4. Assignment. For good and valuable consideration received by Assignor,
the receipt and sufficiency of which are hereby acknowledged, Assignor hereby
grants, transfers and assigns to Assignee the entire right, title and interest
of Assignor in and to the Leases and the Tenant Deposits.
5. Assumption. Assignee hereby assumes the covenants, agreements and
obligations of Assignor as landlord or lessor under the Leases which are
applicable to the period and required to be performed from and after the date
hereof. Assignee further assumes all liability of Assignor for the proper refund
or return of the Tenant Deposits, to the extent Assignee received a credit at
the closing of the transaction, if, when and as required by the Leases.
6. Attorneys' Fees. If either Assignee or Assignor, or their respective
successors or assigns, files suit to enforce the obligations of the other party
under this Assignment, the prevailing party shall be entitled to recover the
reasonable fees and expenses of its attorneys.
7. Successors and Assigns. This Assignment shall be binding upon and inure
to the benefit of Assignor and Assignee and their respective successors and
assigns.
8. Counterparts. This Assignment may be executed in multiple counterparts,
any or all of which may contain the signatures of fewer than all of the parties,
but all of which shall constitute a single instrument.
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment the day and year first above written.
ASSIGNOR:
WEST PALM BEACH CONCOURSE ASSOCIATES, a
Florida general partnership
By: PaineWebber Income Properties Seven
Limited Partnership, a Delaware limited
partnership, a general partner
By: Seventh Income Properties
Fund, Inc., a Delaware
corporation, its managing
general partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
By: Seventh Income Properties Fund,
Inc., a Delaware corporation, a general
partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
<PAGE>
ASSIGNEE:
WPB CONCOURSE PLAZA, L.C., a Florida
limited liability company
By: WPBCP, INC., a Florida corporation,
its managing partner
By: /s/ Samuel Susi
---------------
Name: Samuel Susi
Title: President
<PAGE>
CONCOURSE PLAZA
WEST PALM BEACH, FLORIDA
ASSIGNMENT AND ASSUMPTION
OF PROPERTY CONTRACTS
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS (this "Assignment") is entered
into as of the 10th day of November, 1998, between West Palm Beach Concourse
Associates, a Florida general partnership, ("Assignor"), with an address c/o
PaineWebber Income Properties Seven Limited Partnership, 265 Franklin Street,
Boston, Massachusetts 02110 and WPB CONCOURSE PLAZA, L.C. ("Assignee"), a
Florida limited liability company, having an address c/o Samuel Susi, Esq., 551
N.W. 77th Street, Suite 109, Boca Raton, Florida 33487.
1. Real Property. The "Real Property" means the land located in the City
of West Palm Beach in the County of Palm Beach, State of Florida, commonly known
as "Concourse Plaza," being more particularly described on Exhibit A attached
hereto and made a part hereof (the "Land"), and the buildings, structures and
other improvements situated upon the Land and all other fixtures, systems and
facilities owned by Assignor and now located thereon (collectively, the
"improvements") and the rights appurtenant thereto.
2. Property Contracts. "Property Contracts" shall mean all of Assignor's
rights, if any, in the contracts listed on Exhibit B attached hereto, being all
service, supply and equipment rental, management, operating and leasing
contracts affecting the Property, to the extent that Assignor is entitled to
transfer the same to Assignee.
3. Lender Escrows. "Lender Escrows" shall mean any escrows or reserves
held by or on behalf of LaSalle National Bank, as Trustees for American
Southwest Financial Security Corp. Series 1995-C1 (successor to Column
Financial, Inc.) ("Lender") related to (i) a certain Promissory Note in the
original principal amount of $1,750,000 dated January 10, 1995 from Assignor to
Lender and (ii) all other documents executed in connection with said Promissory
Note. The Lender Escrows and the current balances held in such Lender Escrows
are set forth in attached Exhibit C.
4. Assignment. For good and valuable consideration received by Assignor,
the receipt and sufficiency of which is hereby acknowledged, Assignor hereby
grants, transfers and assigns to Assignee the entire right, title and interest
of Assignor in and to the Property Contracts and the Lender Escrows.
5. Assumption. Assignee hereby assumes the covenants, agreements and
obligations of Assignor under the Property Contracts which are applicable to the
period and required to be performed from and after the date of this Assignment.
6. Attorneys' Fees. If either Assignee or Assignor or their respective
successors or assigns, file suit to enforce the obligations of the other party
under this Assignment, the prevailing party shall be entitled to recover the
reasonable fees and expenses of its attorneys.
7. Successors and Assigns. This Assignment shall be binding upon and inure
to the benefit of Assignor and Assignee and their respective successors and
assigns.
8. Counterparts. This Assignment may be executed in multiple counterparts,
any or all of which may contain the signatures of fewer than all of the parties,
but all of which shall constitute a single instrument.
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment the day and year first above written.
ASSIGNOR:
WEST PALM BEACH CONCOURSE ASSOCIATES, a
Florida general partnership
By: PaineWebber Income Properties Seven
Limited Partnership, a Delaware
limited partnership, a general
partner
By: Seventh Income Properties
Fund, Inc., a Delaware
corporation, its managing
general partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
By: Seventh Income Properties Fund,
Inc., a Delaware corporation, a
general partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
<PAGE>
ASSIGNEE:
WPB CONCOURSE PLAZA, L.C., a Florida
limited liability company
By: WPBCP, INC., a Florida corporation,
its managing partner
By: /s/ Samuel Susi
---------------
Name: Samuel Susi
Title: President
<PAGE>
CONCOURSE PLAZA
WEST PALM BEACH, FLORIDA
BILL OF SALE
THIS BILL OF SALE (this "Bill of Sale") is dated as of the 10th day of
November, 1998, by West Palm Beach Concourse Associates ("Seller"), a Florida
general partnership having an address c/o PaineWebber Income Properties Seven
Limited Partnership, 265 Franklin Street, Boston, Massachusetts 02110, in favor
of WPB CONCOURSE PLAZA, L.C. ("Purchaser"), a Florida limited liability company,
having an office c/o Samuel Susi, Esq., 551 N.W. 77th Street, Suite 109, Boca
Raton, Florida 33487.
1. Real Property. The "Real Property" shall mean the land located in the
City of West Palm Beach in the County of Palm Beach, State of Florida, commonly
known as "Concourse Plaza," being more particularly described on Exhibit A
attached hereto and made a part hereof (the "Land"), and the buildings,
structures and other improvements situated upon the Land and all fixtures,
systems and facilities owned by Seller and now located thereon (collectively,
the "Improvements") and the rights appurtenant thereto.
2. Personal Property. The "Personal Property" shall mean all of Seller's
right, title and interest, if any, in all personal property owned by Seller
located at the Real Property, including all furniture, carpeting, appliances,
equipment, machinery, inventories, supplies, signs and other tangible personal
property of every kind and nature, if any, owned by Seller and installed,
located at and used in connection with the ownership, occupation and operation
of the Real Property, but specifically excluding (i) any items of personal
property owned by tenants at or on the Real Property, and (ii) any items of
personal property owned by third parties and leased to Seller.
3. Intangible Property. The "Intangible Property" shall mean all of
Seller's right, title and interest, if any, in all intangible assets of any
nature relating to the Land, the Improvements or the Personal Property,
including, without limitation, all of Seller's right, title and interest in all
(i) warranties and guaranties relating to the Improvements or Personal Property
in the possession of Seller, (ii) all licenses, permits and approvals relating
to the Real Property, (iii) all logos and trade names currently used by Seller
exclusively in the operation of the Land and Improvements, including the use of
the name Concourse Plaza, and (iv) all plans and specifications, in each case to
the extent that Seller may legally transfer the same.
4. Sale. For good and valuable consideration received by Seller, the
receipt and sufficiency of which are hereby acknowledged, Seller hereby sells,
assigns and transfers the Personal Property and the Intangible Property to
Purchaser.
5. As Is. The Personal Property and Intangible Property are sold,
transferred and delivered by Seller and hereby accepted by Purchaser in their
current "as is" condition, without any warranties, covenants or representations
by Seller. Without limiting the generality of the foregoing, the Personal
Property are transferred, sold and delivered without any express or implied
warranty of merchantability or fitness.
6. Counterparts. This Bill of Sale may be executed in multiple
counterparts, any or all of which may contain the signatures of fewer than all
of the parties, but all of which shall constitute a single instrument.
<PAGE>
IN WITNESS WHEREOF, Seller has executed this Bill of Sale the day and year
first above written.
WEST PALM BEACH CONCOURSE ASSOCIATES, a
Florida general partnership
By: PaineWebber Income Properties Seven
Limited Partnership, a Florida
limited Partnership, a general
partner
By: Seventh Income Properties
Fund, Inc., a Delaware
corporation, its managing
general partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
By: Seventh Income Properties
Fund, Inc., a Delaware
corporation, a general partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
<PAGE>
FINAL CLOSING STATEMENT
SELLER(s): West Palm Beach Concourse Associates
BUYER(s): WPB Concourse Plaza, L.C.
PROPERTY: Concourse Plaza
DATE: November 9, 1998 (prorations as of 11:59 P.M. on November 8, 1998)
Purchaser's Seller's
Credits Credits
------- -------
Purchase Price $2,000,000.00
Deposit (exclusive of all interest
thereon, which shall be paid to
Purchaser by Escrow Agent) $ 100,000.00
Credit for Indemnification Agreement 100,000.00
Credit for Tree Trimming 2,838.00
Proration of Real Property Taxes
(based on 1998 taxes at November
discount of $84,606.91; 312 days
at $231.80 per diem) 72,321.60
Proration of Personal Property Taxes
(based on 1998 taxes at November
discount of $192.97; 312 days
at $0.529 per diem) 165.05
Assumption of Loan (Includes
11/98 payment)
Principal Balance 1,538,697.03
Interest (11/1 to 11/8)
($1,538,697.03 x 11.12%
360 day year) 3,802.29
Real Estate Tax Escrow 86,093.38
Insurance Escrow 4,766.07
Proration of Rent actually received
by Seller for November, 1998 and
allocable to the period
from and after the Closing Date 14,604.26
Prepaid Rents 5,499.19
Credit for Security Deposits 0.00
------------- -------------
Subtotals $1,837,927.42 $2,090,859.45
Funds due to Seller from Purchaser
at Closing 252,932.03
------------- -------------
TOTALS $2,090,859.45 $2,090,859.45
============= =============
<PAGE>
Cash Due to Seller:
Deposit $100,000.00
Funds due to Seller
from Purchaser at Closing 252,932.03
Closing Costs to be paid on behalf of Seller:
Lender's Costs
Bal. Lender's Atty's fees & Costs ($2,000.00)
Assumption Fee (7,500.00)
Lender's Administration Fee (125.00)
Recording Costs
Documentary Stamps - Deed (14,000.00)
Documentary Stamps - Loan Assump. (5,385.45)
Recording fees (200.00)
Brokerage Costs
Brokerage Commission - RJS/Jackson (90,000.00)
Title Costs
First American Title Insurance Co. -
Owner's Title Insurance Premium on
$2,000 of Coverage(8,475.00)
1/2 Escrow Fees (375.00)
------------
Total Closing Costs $(128,060.45) (128,060.45)
-----------
Net Disbursement to Seller $224,871.58
===========
