SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) October 2, 1998
PaineWebber Equity Partners One Limited Partnership
---------------------------------------------------
(Exact name of registrant as specified in its charter)
Virginia 0-14857 04-2866287
- --------------------------------------------------------------------------------
(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 EQUITY PARTNERS ONE LIMITED PARTNERSHIP
ITEM 2 - Disposition of Assets
The Chandler's Reach Apartments, Redmond, Washington and the Monterra
Apartments, LaJolla, California
Disposition Date - October 2, 1998
On October 2, 1998, Lake Sammamish Limited Partnership and Crow
PaineWebber LaJolla Limited Partnership, two joint ventures in which Paine
Webber Equity Partners One Limited Partnership ("the Partnership") has an
interest, sold the properties known as the Chandler's Reach Apartments and the
Monterra Apartments to the same unrelated third parties. Chandler's Reach,
located in Redmond, Washington, was sold for $17.85 million, and Monterra,
located in LaJolla, California, was sold for $20.1 million. The Partnership
received net proceeds of approximately $12,359,000 from the sale of Chandler's
Reach after deducting closing costs of approximately $561,000, closing proration
adjustments of approximately $55,000, the repayment of the existing mortgage
note of approximately $3,415,000 and a prepayment penalty of approximately
$354,000, of which $205,000 was paid by the buyer, and a payment of
approximately $1,311,000 to the Partnership's co-venture partner for its share
of the sale proceeds in accordance with the joint venture agreement. The
Partnership received net proceeds of approximately $14,796,000 from the sale of
Monterra after deducting closing costs of approximately $306,000, closing
proration adjustments of approximately $114,000, the repayment of the existing
mortgage note of approximately $4,672,000 and a prepayment penalty of
approximately $500,000, of which $295,000 was paid by the buyer, and a payment
of approximately $7,000 to the Partnership's co-venture partner for its share of
the sale proceeds in accordance with the joint venture agreement.
Despite incurring sizable prepayment penalties on the repayment of both
outstanding first mortgage loans, management believed that the current sale of
the Chandler's Reach and Monterra properties was in the best interests of the
Limited Partners due to the exceptionally strong market conditions that exist at
the present time and which resulted in the achievement of very favorable selling
prices. The Partnership will distribute the majority of the net sales proceeds
from the sales of Chandler's Reach and Monterra in the form of a special
distribution to be paid with the regular quarterly distribution for the quarter
ended September 30, 1998 on November 13, 1998. A portion of the net proceeds
(10% or less) may be retained and added to the Partnership's cash reserves to
ensure that the Partnership has sufficient capital resources to fund its share
of potential capital improvement expenses at its remaining investment
properties. The Managing General Partner is currently analyzing the
Partnership's potential future capital requirements in order to determine the
exact amount, if any, that the Partnership should retain from the net sale
proceeds.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP
ITEM 7 - Financial Statements and Exhibits
(a) Financial Statements: None
(b) Exhibits:
(1)Purchase and Sale Agreement by and between Lake Sammamish Limited
Partnership and R&B Westside, Inc., dated July 10, 1998.
(2)Side Letter Agreement Regarding Extension of Closing Date by Lake
Sammamish Limited Partnership, dated August 10, 1998.
(3)Side Letter Agreement Regarding Further Extension of Closing Date by
Lake Sammamish Limited Partnership, dated September 22, 1998.
(4)Assignment and Assumption of Purchase and Sale Agreement by and between
Lake Sammamish Limited Partnership, R&B Westside, Inc., Sherman Oaks
Holding Company, LLC, and Westside Holding Company, LLC, dated
September 23, 1998.
(5)Special Warranty Deed by Sherman Oaks Holding Company, LLC and Westside
Holding Company, LLC, dated October 1, 1998.
(6)Bill of Sale and General Assignment and Assumption Agreement by and from
Lake Sammamish Limited Partnership to Sherman Oaks Holding Company, LLC
and Westside Holding Company, LLC, dated October 1, 1998.
(7)Seller's Settlement Statement between Lake Sammamish Limited
Partnership and Sherman Oaks Holding Company, LLC, dated October 1, 1998.
(8)Purchase and Sale Agreement by and between Crow PaineWebber LaJolla
Limited Partnership and R&B Westside, Inc., dated July 10, 1998.
(9)Side Letter Agreement Regarding Extension of Closing Date by Crow
PaineWebber LaJolla Limited Partnership, dated August 10, 1998.
(10)Side Letter Agreement Regarding Further Extension of Closing Date
by Crow PaineWebber LaJolla Limited Partnership dated September 22, 1998.
(11)Assignment and Assumption of Purchase and Sale Agreement by and between
Crow PaineWebber LaJolla Limited Partnership, R&B Westside, Inc., Sherman
Oaks Holding Company, LLC, and Westside Holding Company, LLC, dated
September 23, 1998.
(12)Bill of Sale and General Assignment and Assumption Agreement by Crow
PaineWebber LaJolla Limited Partnership to and for the benefit of Sherman
Oaks Holding Company, LLC and Westside Holding Company, LLC, dated October
1, 1998.
(13) Seller's Settlement Statement between Crow PaineWebber LaJolla Limited
and Sherman Oaks Holding Company, LLC and Westside Holding Company, LLC,
dated October 1, 1998.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP
SIGNATURE
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 EQUITY PARTNERS
ONE LIMITED PARTNERSHIP
(Registrant)
By: First Equity Partners, Inc.
By: /s/ Walter V. Arnold
------------------------
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Date: October 16, 1998
<PAGE>
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
LAKE SAMMAMISH LIMITED PARTNERSHIP ("SELLER")
AND
R&B WESTSIDE, INC. ("BUYER")
THE CHANDLER'S REACH APARTMENTS
REDMOND, WASHINGTON
KING COUNTY
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1.....................................................................1
DEFINITIONS.............................................................1
ARTICLE 2.....................................................................3
PURCHASE AND SALE.......................................................3
ARTICLE 3.....................................................................4
PURCHASE PRICE; DEPOSIT; ADJUSTMENTS....................................4
ARTICLE 4.....................................................................6
PRECLOSING OPERATION....................................................6
ARTICLE 5.....................................................................7
ACCESS, INSPECTION, DILIGENCE...........................................7
ARTICLE 6....................................................................12
TITLE AND SURVEY.......................................................12
ARTICLE 7....................................................................14
CONDITIONS PRECEDENT AND CLOSING.......................................14
ARTICLE 8....................................................................17
CASUALTY AND CONDEMNATION..............................................17
ARTICLE 9....................................................................18
BROKERAGE COMMISSIONS..................................................18
ARTICLE 10...................................................................18
DEFAULT, TERMINATION AND REMEDIES......................................18
ARTICLE 11...................................................................20
REPRESENTATIONS AND WARRANTIES.........................................20
ARTICLE 12...................................................................24
MISCELLANEOUS..........................................................24
ARTICLE 13...................................................................28
IRS FORM 1099-S DESIGNATION............................................28
ARTICLE 14...................................................................28
INTENTIONALLY OMITTED..................................................28
LIST OF EXHIBITS
EXHIBIT A - THE LAND
EXHIBIT B - PERSONAL PROPERTY
EXHIBIT C - PROPERTY CONTRACTS
EXHIBIT D - EARNEST MONEY ESCROW INSTRUCTIONS
EXHIBIT E - RENT ROLL
EXHIBIT F - FORM OF ESCROW CLOSING INSTRUCTIONS
EXHIBIT G - DUE DILIGENCE DOCUMENTS
<PAGE>
PURCHASE AND SALE AGREEMENT
Chandler's Reach Apartments
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into as of
the 10th day of July, 1998 by and between Seller and Buyer, upon the following
terms and conditions:
WHEREAS, Seller desires to sell and Buyer desires to purchase, the
Property (hereinafter defined) on the terms and conditions hereinafter set
forth;
NOW THEREFORE, in consideration of the mutual undertakings, covenants and
agreements contained herein, and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
References in this Agreement to the following terms shall have the
following meanings:
Buyer: R&B Westside, Inc., a California corporation
- -----
Deposit: See Section 3.2
- -------
Documents: Those materials listed on Exhibit G attached hereto.
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 or
the use of the Real Property relating to pollution or
protection of 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 into the
environment (including, without limitation, ambient
air, surface water, ground water or land or soil).
Escrowed Amount: See Section 3.2
- ---------------
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 thereunder; (ii) any
"hazardous waste" as now or hereafter defined in the
Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.) or regulations promulgated
thereunder; (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. Hazardous Materials shall
include, without limitation, any substance, the
presence of which on the Real Property requires
reporting, investigation or remediation under
Environmental Requirements.
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,
which buildings, structures and other improvements
include, without limitation, [166] residential rental
units.
<PAGE>
Intangible Property: All of Seller's right, title and interest, if
- ------------------- any, in (i) warranties relating to the Improvements or
Personal Property in the possession of Seller,
(ii) all licenses, permits and approvals relating to
the Real Property, (iii) the use of the names
"Chandler's Reach" or "Chandler's Reach Apartments",
and (iv) all plans and specifications, in each case to
the extent that Seller may legally transfer the same.
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.
Personal Property: 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, including, without
limitation, the Personal Property listed on Exhibit B
attached hereto. Personal Property specifically
excludes: (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.
Property
Contracts: All of Seller's rights, if any, in the
- --------- contracts listed on Exhibit C attached hereto, 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: $17,850,000
- --------------
Real Property: The Land and the Improvements.
- -------------
Seller: Lake Sammamish Limited Partnership, a Texas
limited partnership.
Tenant Deposits: Seller's rights to unapplied security deposits, pet
- --------------- deposits, cleaning deposits under the Leases.
Title Company: Chicago Title Insurance Company
- -------------
ARTICLE 2
PURCHASE AND SALE
2.1 Seller hereby agrees to sell and convey the Property to Buyer and
Buyer hereby agrees to buy the Property from Seller for the Purchase Price and
otherwise subject to the covenants, provisions, terms and conditions contained
herein.
ARTICLE 3
PURCHASE PRICE; DEPOSIT; ADJUSTMENTS
3.1 Initial Non-Refundable, Non-Interest Bearing Payment to Seller.
Contemporaneously with the execution and delivery of this Agreement (and as a
condition precedent to the effectiveness of this Agreement), Buyer shall deliver
to Seller, as independent consideration, a non-refundable payment (the
"Payment") in the amount of One Hundred Thousand and 00/100 Dollars ($100,000),
which amount shall be deemed earned upon the execution and delivery of this
Agreement by Buyer and Seller. The Payment shall be retained by Seller in all
instances; provided, however, that (i) if the Closing occurs, the amount of the
Payment shall be credited towards the Purchase Price, and (ii) if Seller
defaults in its obligations hereunder, the Payment shall be returned to Buyer,
without interest.
<PAGE>
3.2 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 Five Hundred Thousand and 00/100
Dollars ($500,000) (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 3.3 below.
3.3 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 United States dollars by wire transfer
of federal funds, less the Escrowed Amount and the Payment (the "Cash Balance").
3.4 Tax Proration. All due and payable real estate taxes, all general and
special assessments on the Land and ad valorem taxes, if any, on the Personal
Property (based on the most recent ascertainable taxes) attributable to the
Property through the Closing Date shall be prorated and adjusted as of the
Closing Date. In no event shall Seller be charged with or be responsible for any
increase in the taxes on the Property resulting from the sale of the Property or
from any improvements made or leases entered into on or after the Closing Date.
If the tax statements for the fiscal year during which the Closing Date occurs
are not finally determined, then the tax figures for the immediately prior
fiscal year shall be used for the purposes of prorating taxes on the Closing
Date, provided that there shall be no further adjustment to be made after the
Closing Date. 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.
3.5 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.
3.6 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.
3.7 Income and Expense Proration. Collected rents for the then current and
any future period, Tenant Deposits and all expenses and other charges in
connection with the operation of the Property shall be apportioned and 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 Tenant Deposits
shall be credited to Buyer and shall thereafter be deemed transferred to Buyer
and Buyer shall assume and be solely responsible for the payments of Tenant
Deposits to tenants in accordance with the Leases and applicable law. Seller
shall transfer to Buyer and receive a credit for any utility deposits and any
deposits for third parties under any of the Property Contracts. In addition to
the foregoing, at Closing the Purchase Price shall be increased by the amount of
uncollected or past due rent; provided, however, that no adjustment shall be
made for rent which is more than one (1) month past due. Seller shall be
entitled to attempt to collect all rents and other charges which are more than
one (1) month past due but shall not be entitled to pursue eviction proceedings
in connection with such collection efforts.
<PAGE>
3.8 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, Buyer 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.
3.9 Closing Costs.
(a) Seller shall pay: (i) its legal fees and expenses related to the
negotiation and preparation of this Agreement and all documents required
to close the transaction contemplated hereby, and (ii) 50% of the escrow
fees of the Escrow Agent, and (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, other than the cost set forth in
subsection (b)(v) below.
(b) Buyer shall pay: (i) 50% of the escrow fees of the Escrow Agent,
(ii) charges to record the deed, and evidence of Buyer's existence or
authority, (iii) Buyer's legal fees and expenses related to the
negotiation of this Agreement and all documents required to close the
transaction contemplated hereby, (iv) all costs related to the Buyer's
inspection and due diligence, including, without limitation, the cost of
appraisals, architectural, engineering, credit and environmental reports,
(v) all costs associated with any ALTA extended portion of any title
policy premium, and (vi) all costs allocable to preparation of the survey.
(c) All other closing costs, including, without limitation, all
state, county or other taxes associated with the transfer of the property,
shall be paid by Seller or Buyer in accordance with the custom in the
jurisdiction where the Property is located.
ARTICLE 4
PRECLOSING OPERATION
4.1 Leases. A rent roll (the "Rent Roll") containing a list of all
occupants of the Property pursuant to the Leases 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, (ii) be for a term of not more than thirteen (13) months (with
respect to residential Leases only), and (iii) on the Seller's current standard
form of lease. Notwithstanding the foregoing, Seller agrees to obtain Buyer's
prior written consent to any Leases that provide for a term in excess of
thirteen (13) months, which consent Buyer agrees shall not be unreasonably
withheld, and Buyer's consent shall be 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, including
ordinary preparation for occupancy of residential units vacated prior to
Closing.
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 (as defined below), unless Buyer has provided written notice to
Seller of Buyer's election to terminate this Agreement, Buyer shall provide
written notice to Seller of the Property Contracts that Buyer desires to have
terminated by Seller, and Seller will terminate the Property Contracts so
identified at or before Closing, provided that such Property Contracts may be
terminated without cost or liability to Seller and if there is cost or liability
to Seller, Buyer shall be responsible for any such liability, and provided that
Seller may not require termination of any property contract designated
non-terminable on Exhibit C. At Closing, Seller shall assign and Buyer shall
assume the Property Contracts, except those Property Contracts which Seller has
agreed to terminate. Buyer shall indemnify, defend and hold the Seller harmless
from and against any and all claims under the Property Contracts relating to the
period from and after the Closing Date. Notwithstanding the foregoing, Seller's
existing management contract for the Property shall be terminated by Seller
effective as of the Closing Date.
ARTICLE 5
ACCESS, INSPECTION, DILIGENCE
5.1 Access/Purchaser's Responsibilities/Purchaser's Indemnity.
(a) 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 not previously delivered to Buyer
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.
(b) 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 5.5 herein.
(c) Buyer will indemnify, defend, and hold Seller and its partners
and Seller's 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 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.
(d) Buyer acknowledges and agrees that the Documents including,
without limitation, the documents listed in paragraph (e) below are
provided to Buyer for informational purposes only and do not constitute
representations or warranties of Seller or its partners and Seller's
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.
(e) Buyer acknowledges receipt and independent review and evaluation
of the following Documents prior to the date hereof:
(i) Marx/Okubo Building Assessment Report dated March 13,
1998; Proposal for Additional Services (Invasive Investigation)
dated March 26, 1998; and Project Update (Invasive Testing) dated
April 13, 1998 (collectively, the "Assessment"); and
(ii) Phase I Environmental Report dated March 26, 1998,
prepared by Dames & Moore (the "Phase I").
Based upon its independent review and evaluation of the foregoing
documents, Buyer hereby acknowledges and agrees that it waives its right
to terminate this Agreement pursuant to Section 5.2 below for any reason
pertaining to or in connection with information contained in the
Assessment or the Phase I.
5.2 Diligence. Subject to Section 5.1, above, Buyer shall promptly
commence and actively pursue the following due diligence items:
(a) Review title and survey matters;
(b) Review the Property Contracts;
(c) Review applicable zoning and other land use controls, and other
permits, licenses, permissions, approvals and consents;
(d) Review all Leases affecting the Property; and
(e) Subject to the provisions of Section 5.1 above, conduct any and
all other reviews and inspections that Buyer may desire.
Buyer shall complete its due diligence on or before the date which is
thirty (30) days from the date hereof (the "Diligence Date"). Notwithstanding
any other term or provision herein to the contrary, but subject to the
provisions of Section 5.1(e) above, 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).
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 5.3 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.
(a) Seller has delivered to Buyer a copy of the Phase I and the
Assessment.
(b) 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 and all copies of,
excerpts from and analyses of all documents relating to the Property
prepared by Buyer or its agents, representatives or employees.
(c) The return of the Escrowed Amount to Buyer under this Agreement
shall not be contingent upon Buyer's fulfillment of its obligations under
Section 5.3(b); provided, however, that Buyer agrees to use its best
efforts to promptly comply with the requirements of Section 5.3(b).
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, any Document or the
information contained therein 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 such matters with and disclose such
matters 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. 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,
except for the next sentence, 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 WILL HAVE HAD AN OPPORTUNITY TO CONDUCT DILIGENCE ON THE PROPERTY AND
BUYER WILL ACQUIRE THE PROPERTY IN ITS THEN-CURRENT CONDITION AT CLOSING BASED
ON ITS DILIGENCE. BUYER FURTHER ACKNOWLEDGES THAT NEITHER SELLER NOR ITS
PARTNERS NOR THEIR RESPECTIVE 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. THE BUYER ACKNOWLEDGES AND AGREES THAT THE PROPERTY IS TO BE
CONVEYED BY THE SELLER TO THE BUYER "AS IS," "WITH ALL FAULTS" AND IN ITS
THEN-CURRENT CONDITION AT CLOSING. THE BUYER FURTHER ACKNOWLEDGES AND AGREES
THAT, EXCEPT AS EXPRESSLY CONTAINED HEREIN, NEITHER THE SELLER NOR ITS PARTNERS
NOR THEIR RESPECTIVE AGENTS, EMPLOYEES OR OTHER REPRESENTATIVES 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
AND ITS PARTNERS 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 WITH RESPECT
TO THE PROPERTY (OR ANY PART THEREOF) OR INFORMATION SUPPLIED TO BUYER WITH
RESPECT THERETO. FURTHER, THE SELLER AND ITS PARTNERS 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. THE BUYER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED TO
BUYER BY SELLER OR ITS PARTNERS OR THEIR RESPECTIVE AGENTS, EMPLOYEES OR OTHER
REPRESENTATIVES 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 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 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 PARAGRAPHS 5.2,
5.5, 5.6 AND 11.4 SHALL SURVIVE CLOSING, AND BUYER SHALL CONFIRM SUCH PROVISIONS
IN WRITING AT CLOSING.
5.6 Buyer's Release of Seller. SELLER AND ITS PARTNERS AND SELLER'S
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 HAZARDOUS SUBSTANCES, UNDESIRABLE OR SUBJECT
TO REGULATION OR 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
PARTNERS, SELLER'S 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, AND SELLER, ITS PARTNERS, SELLER'S PROPERTY MANAGER AND
THEIR RESPECTIVE AGENTS ARE HEREBY RELEASED FROM ALL RESPONSIBILITY AND
LIABILITY FOR SUCH MATERIALS.
ARTICLE 6
TITLE AND SURVEY
6.1 Title and Survey. Promptly following the execution of this Agreement,
Buyer may obtain a current ALTA as-built survey of the Real Property or an
update of the Survey (as defined in Exhibit G).
If the Survey or matters listed as exceptions in the Title Commitment (as
defined in Exhibit G attached hereto) are not satisfactory to Buyer, Buyer
shall, within ten (10) days following receipt of both the Title Commitment and
the Survey, 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 connection with any such cure undertaken by Seller. If there are
Title Objections which Seller is unable or unwilling to cure, Buyer may
terminate this Agreement as provided in Section 5.3, above or waive such
objections which Seller is not willing or able to cure and proceed to closing.
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 (collectively, the "Permitted Exceptions"):
(a) All Leases;
(b) All zoning, building and other laws applicable to the Property;
(c) All matters which are agreed upon or consented to by Buyer;
(d) 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);
(e) All matters shown on Schedule B of the Title Commitment or of
public record as of the effective date of the Title Commitment and which
Seller does not cure pursuant to Section 6.1, above;
(f) Property contracts not terminated under Section 4.3;
(g) Any matters shown on the Survey; and
(h) All matters, whether or not of record, to the extent caused by
Buyer or its agents, representatives or contractors.
<PAGE>
6.3 Lease Assignment. At the Closing, Seller shall assign the Leases and
the Property Contracts (except those terminated in accordance with Section 4.3)
to Buyer and Buyer shall, from and after the Closing Date, assume Seller's
obligations thereunder and under all other Permitted Exceptions. At closing,
Seller shall convey the Personal Property and Intangible Property to Buyer by
quitclaim bill of sale and general assignment.
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. Each condition may be waived in whole or in part only by written
notice of such waiver from Buyer to Seller.
(a) 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, including, without limitation, Seller's
obligation pursuant to Section 6.2.
Notwithstanding the foregoing, if the conditions set forth in this Section
7.1 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 (i) 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, or (ii) exercise its right of specific performance
pursuant to Article 10 below.
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.
(a) Buyer performing and complying in all material respects with all
of the terms of this Agreement to be performed and complied with by Buyer
prior to or at the Closing, including, without limitation, payment by the
Buyer of the Purchase Price (as adjusted as otherwise provided herein);
and
(b) On the Closing Date, all of the representations of Buyer set
forth in this Agreement shall continue to be true, accurate and complete.
7.3 Closing Date. Subject to Seller's right to extend the Closing Date as
provided in Section 7.1, the consummation of the purchase and sale contemplated
in this Agreement (the "Closing") shall occur thirty (30) days following the
Diligence Date, if such date is a business day, otherwise on the next succeeding
business day (the "Closing Date"), at the office of the Escrow Agent or through
the escrow closing arrangements set forth in the Form of Escrow Closing
Instructions attached hereto as Exhibit F. Notwithstanding anything herein to
the contrary, in no event shall the Closing Date be later than October 30, 1998.
7.4 Closing Deliveries. On the Closing Date, Seller shall deliver or
cause to be delivered:
(a) A duly executed and acknowledged special warranty deed conveying
the Land and the Improvements to Buyer;
(b) A duly executed quitclaim bill of sale and general assignment
conveying the Personal Property and the Intangible Property to Buyer;
(c) A duly executed assignment and assumption of the Leases and
Tenant Deposits (the "Assignment of Leases");
(d) A duly executed assignment and assumption of Property Contracts
being assumed (the "Assignment of Contracts");
(e) A certificate of non-foreign status from Seller;
(f) An updated Rent Roll (including a list of all delinquent and
prepaid rents) certified by the Seller as true and correct as of a date
not earlier than five (5) days before the Closing Date;
(g) 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;
(h) 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;
(i) All keys to all locks on the Property and similar items, to the
extent in Seller's possession; and
(j) A certificate executed by Seller certifying that the
representations and warranties of Seller contained in Section 11.2 herein
are true and correct as of the Closing Date.
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:
(a) 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;
(b) Evidence in form and substance reasonably satisfactory to Escrow
Agent and Seller of Buyer's authority to purchase the Property;
(c) The Assignment of Leases;
(d) The Assignment of Contracts;
(e) Such other instruments as Seller or Escrow Agent may reasonably
request to effectuate the transactions contemplated by this Agreement;
(f) A duly executed counterpart original of the closing statement
setting forth the Purchase Price, the closing adjustments and the
application of such amounts;
(g) 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;
(h) Acknowledgment by Buyer of Buyer's receipt from Seller of the
Tenant Deposits;
(i) An indemnity pursuant to Section 4.3 of this Agreement with
respect to each Property Contract; and
(j) A certificate executed by Buyer certifying that the
representations and warranties of Buyer contained in Section 11.1 herein
are true and correct as of the Closing Date.
7.6 Possession. Possession of the Property shall be delivered to Buyer by
Seller at the Closing, subject only to Permitted Exceptions. 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, the assumption by Buyer of responsibility for
all Deposits, 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 any portion of the Improvements suffers damage in excess
of $1,000,000 from 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:
(a) to purchase the Property in its then condition and pay the
Purchase Price; or
(b) 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).
If Buyer purchases the Property, 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 casualty after the date hereof
up to the amount of the Purchase Price, less any amounts reasonably expended by
Seller for partial restoration and proceeds of rental loss insurance
attributable to the period prior to Closing.
8.2 Condemnation. If any substantial portion of or interest in the
Property (for purposes of this Section 8.2, "substantial portion of or interest
in the Property" shall include any condemnation of access to the Property or of
parking spaces at 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 a substantial portion of or interest in the Property (each an "Eminent
Domain Taking"), Seller shall give notice promptly to Buyer of such event and
Buyer shall have the option to terminate this Agreement by providing notice to
Seller to such effect on or before the date which is ten (10) days from Seller's
notice to Buyer of such Eminent Domain Taking or on the Closing Date, whichever
occurs first, in which event the Escrow Agent shall return the Escrowed Amount
to Buyer, this Agreement shall terminate, and neither Seller nor Buyer shall
have any recourse against the other (except to the extent such recourse arises
in connection with a provision of this Agreement which is intended to survive
termination). If Buyer does not timely notify Seller of its election to
terminate this Agreement, Buyer shall purchase the Property and pay the Purchase
Price, and Seller shall pay over or assign to Buyer on delivery of the deed
awards recovered or recoverable by Seller on account of such Eminent Domain
Taking up to the amount of the Purchase Price, less any amounts reasonably
expended by Seller in obtaining such award.
ARTICLE 9
BROKERAGE COMMISSIONS
Seller 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 CB Commercial Real Estate Group, Inc. (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 attorneys'
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 attorneys' 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 defaults in its obligation
to close hereunder, Buyer shall have the right to either (a) terminate this
Agreement and receive the Escrowed Amount, whereupon this Agreement shall
terminate without further recourse or (b) sue for specific performance of this
Agreement in accordance with its terms. Buyer hereby waives and relinquishes any
right to sue Seller for any reason whatsoever, and agrees that Seller shall not
be liable to Buyer for any actual, punitive, speculative, consequential or other
damages for breach by Seller prior to the Closing, except for payment of the
Escrowed Amount. 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, and 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 the Escrow Agent shall 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.
10.3 INTENTIONALLY OMITTED
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
11.1 Buyer's Representations and Warranties. Buyer represents and warrants
to Seller that:
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(a) Buyer is a California corporation, duly organized and in good
standing under the laws of the State of California, is qualified to do
business in the State of California 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. As of the
date of this Agreement, Buyer has obtained all necessary corporate,
partnership or other organizational authorizations required in connection
with the execution and delivery of this Agreement. Each of the individuals
executing this Agreement on Buyer's behalf is authorized to do so. Buyer
has the financial ability to pay the Purchase Price by tendering the Cash
Balance and performing the other covenants of Buyer set forth in this
Agreement.
(b) 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;
(c) Buyer is not in any way affiliated with Seller;
(d) No approval, consent, order or authorization of, or designation,
registration or declaration with, any of the United States, the State of
California, 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.
(e) 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 limited
partnership existing under the laws of the State of Texas.
(a) Seller has full partnership power and authority and has received
all necessary authorizations from its partners 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.
(b) Seller has directed its manager to deliver or to make available
to Buyer (i) complete copies of all Leases and (ii) the Rent Roll.
(c) Seller has directed its manager to deliver or to make available
to Buyer copies of all Property Contracts.
(d) 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 Richard Coomber
and Clifford Breining, without independent investigation or inquiry.
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 PARTNERS AND SELLER'S 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 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 AND 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 SOIL 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 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, (XII) THE
PRESENCE OF HAZARDOUS SUBSTANCES 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 OR VESTING OR LAND USE, ZONING OR BUILDING ENTITLEMENTS
AFFECTING THE PROPERTY, (XVIII) THE MERCHANTABILITY OF THE PROPERTY OR FITNESS
OF THE PROPERTY FOR ANY PARTICULAR PURPOSE (BUYER AFFIRMING THAT BUYER HAS NOT
RELIED ON SELLER'S, SELLER'S PARTNERS OR SELLER'S 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 PARTNERS
OR SELLER'S 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 SOLELY 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, ITS PARTNERS OR SELLER'S PROPERTY MANAGER OR
ANY AGENT OF ANY OF THEM. 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. 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 Sherman Oaks Country Club Apartments, a California
limited partnership ("Sherman Oaks"), or an affiliated entity controlled by or
under common control with Sherman Oaks, and Buyer shall give written notice of
such nominee to Seller, together with any reasonable evidence of affiliation
requested by Seller, a minimum of fifteen (15) 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 (i) when delivered or refused if sent by hand during
regular business hours, (ii) three (3) days after being sent by United States
Postal Service, registered or certified mail, postage prepaid, return receipt
requested, (iii) on the next business day when sent by 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, or (iv) on the day of receipt if such day
is a business day when sent by a facsimile, otherwise on the next business day
after receipt, as evidenced by a facsimile confirmation receipt. Any notice
given by a party to Escrow Agent shall be simultaneously given to the other
party. Any notice given by a party to the other party relating to its
entitlement to the Escrowed Amount shall be simultaneously given to the Escrow
Agent.
(1) If to Seller:
c/o Paine Webber Properties Incorporated
265 Franklin Street - 16th Floor
Boston, MA 02110
Attn: Mr. Richard Coomber
and
Trammell Crow Residential
4010 Lake Washington Blvd., N.E., Suite 330
Kirkland, Washington 98033
Attn: Clyde Holland
with a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attn: Andrew C. Sucoff, Esq.
(2) If to Buyer:
R&B Westside, Inc.
c/o R&B Realty Group
2222 Corinth Avenue
Los Angeles, California 90064
Attn: N. Christopher Cheatham
with a copy to:
Saltzburg, Ray & Bergman, LLP
10960 Wilshire Boulevard, 10th Floor
Los Angeles, California 90824
Attn: Alan M. Bergman
(3) If to the Escrow Agent:
Chicago Title Insurance Company
700 South Flower Street
Los Angeles, California 90017
Attn: Ms. Connie Rivera
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; provided that persons named as the beneficiary of any waiver or
indemnity in this Agreement are third-party beneficiaries under this Agreement
as to such provisions and may enforce such provisions as if they are parties to
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. Under no circumstances
is any person other than Seller liable for Seller's obligations under this
Agreement or in respect of the transaction contemplated by this Agreement, and
Buyer hereby waives any right that it otherwise might have to pursue any partner
of Seller, any other person who might be liable for Seller's obligations because
of the direct or indirect ownership interest in Seller, or any officer,
director, agent, advisor or affiliate of any such partner or other person.
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) business days
prior to the Closing Date, provided that the failure to timely deliver such
documents shall not constitute a default by Seller hereunder.
12.20 Like-Kind Exchange. Buyer may consummate the purchase of the
Property as part of a so-called like kind exchange (the "Exchange") pursuant to
PP1031 of the Internal Revenue Code of 1986, as amended (the "Code"), provided
that: (i) the Closing shall not be delayed or affected by reason of the Exchange
nor shall the consummation or accomplishment of the Exchange be a condition
precedent or condition subsequent to Buyer's obligations under this Agreement;
(ii) Buyer shall effect the Exchange through an assignment of this Agreement, or
its rights but not its obligations under this Agreement, to a qualified
intermediary; (iii) Seller shall not be required to take an assignment of the
purchase agreement for the relinquished property or be required to acquire or
hold title to any real property for purposes of consummating the Exchange; (iv)
Buyer shall pay any and all additional costs that would not otherwise have been
incurred by Buyer or Seller had Buyer not consummated its purchase through the
Exchange; (v) all documents to be executed by Seller in connection with the
Exchange shall be submitted to Seller at least five (5) business days prior to
Closing and shall be subject to Seller's reasonable approval, and (vi) Seller
shall incur no liability whatsoever in connection with the Exchange and Buyer
agrees to indemnify, defend and save Seller harmless from any and all such
liability. Seller shall not by this agreement or acquiescence to the Exchange
(1) have its rights under this Agreement against Buyer affected or diminished in
any manner or (2) be responsible for compliance with or be deemed to have
warranted to Buyer that the Exchange in fact complies with ?1031 of the Code.
ARTICLE 13
IRS FORM 1099-S DESIGNATION
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 Escrow Agent (the "Designee") as the party who
shall be responsible for reporting the contemplated sale of the Property to the
Internal Revenue Service (the "IRS") on IRS Form 1099-S; (2) to provide the
Designee with the information necessary to complete Form 1099-S; (3) that the
Designee shall not be liable for the actions taken under this Article 13, 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.
ARTICLE 14
INTENTIONALLY OMITTED
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first set forth above.
SELLER:
LAKE SAMMAMISH LIMITED PARTNERSHIP
By: Crow-Western #504-Lake Sammamish Limited
Partnership, its general partner
By: TCF Residential Partnership, Ltd., its
general partner
By: Mill Spring Holdings, Inc., its
general partner
By: /s/ Sarah Puckett
-----------------
Name: Sarah Puckett
Title: Vice President
By: PaineWebber Equity Partners One
Limited Partnership, its general
partner
By: First Equity Partners, Inc., its
general partner
By: /s/ Richard C. Coomber
-----------------------
Name: Richard C. Coomber
Title: Vice President
BUYER:
R&B WESTSIDE, INC.
By: /s/ N. Christopher Cheatum
--------------------------
Name: N. Christopher Cheatum
Title: Vice President
<PAGE>
LAKE SAMMAMISH LIMITED PARTNERSHIP
C/O PAINEWEBBER PROPERTIES INCORPORATED
265 FRANKLIN STREET, 15TH FLOOR
BOSTON, MASSACHUSETTS 02110
August 10, 1998
R&B Westside, Inc.
c/o R&B Realty Group
2222 Corinth Avenue
Los Angeles, California 90824
Attn: N. Christopher Cheatum
Re: The Chandler's Reach Apartments, Redmond, Washington
Dear Mr. Cheatum:
Reference is hereby made to that certain Purchase and Sale Agreement (the
"Agreement"), dated as of July 10, 1998, by and between Lake Sammamish Limited
Partnership (the "Seller") and R&B Westside, Inc. (the "Buyer"). All capitalized
terms not otherwise defined herein shall have the meanings ascribed to them in
the Agreement.
Buyer and Seller hereby agree that for purposes of all due diligence
investigations other than review of the Survey and the Title Commitment (with
respect only matters relating to the Survey) ("Survey Related Review") the
Diligence Date is August 10, 1998. Buyer hereby waives its right to terminate
the Agreement in accordance with Section 5.2 for any reason other than its
Survey Related Review.
Buyer has not yet received an updated Survey. Seller acknowledges and
agrees that Buyer shall have until August 17, 1998 (the "Survey Extension Date")
to complete its Survey Related Review. Buyer shall submit all Title Objections
(limited to matters uncovered in its Survey Related Review) to Seller on or
prior to 5:00 p.m. on the Survey Extension Date, and Seller shall have until ten
(10) days following the Survey Extension Date (the "Title Objection Reply Date")
to give Buyer written notice identifying any such 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 connection with any
such cure undertaken by Seller. If there are any such Title Objections which
Seller is unable or unwilling to cure, Buyer may terminate the Agreement in
accordance with Section 5.2 of the Agreement by written notice submitted to
Seller not later than 5:00 p.m. within three (3) business days of the Title
Objection Reply Date or waive such objections which Seller is not willing or
able to cure and proceed to Closing.
In addition, Seller and Buyer agree that Section 7.3 of the Agreement
is hereby deleted in its entirety and replaced in its entirety by the following:
7.3 Closing Date. Subject to Sellers 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 on September
10, 1998 (the "Closing Date"), at the office of the Escrow Agent or
through the escrow closing arrangements set forth in the Form of Escrow
Closing Instructions attached hereto as Exhibit F. Notwithstanding the
foregoing, Buyer has requested and Seller has granted to Buyer an
extension of the Closing Date to September 17, 1998. Buyer may extend the
Closing Date to September 24, 1998 upon not less than fifteen (15) days'
prior written notice to Seller, together with payment to Seller of
immediately available funds in the amount of Two Hundred Thousand Dollars
($200,000), which sum shall in no event be refundable to Buyer, but which
sum shall be applied towards the Purchase Price payable to the Seller when
the Closing occurs. Notwithstanding anything in this Agreement to the
contrary, in no event shall the closing Date be later than October 30,
1998.
Except as expressly set forth herein, all terms of the Agreement remain
unmodified and in full force and effect.
This letter agreement may be executed in two or more counterparts, each of
which shall be an original but such counterparts shall constitute one and the
same instrument notwithstanding that both Buyer and Seller are not signatory to
the same counterpart. Buyer and Seller acknowledge and agree that the parties
hereto may rely upon facsimile signatures, but shall nevertheless exchange
signed copies of this letter agreement promptly after its execution.
<PAGE>
Please indicate your acceptance of the terms contained herein by executing
this letter agreement in the space below.
Very truly yours,
LAKE SAMMAMISH LIMITED PARTNERSHIP
By: PaineWebber Equity Partners One Limited
Partnership, its general partner
By: First Equity Partners, Inc., its
general partner
By: /s/ Richard C. Coomber
-----------------------
Name: Richard C. Coomber
Title: Vice President
ACKNOWLEDGED AND AGREED:
R&B WESTSIDE, INC.
By: /s/ N. Christopher Cheatum
--------------------------
Name: N. Christopher Cheatum
Title: Vice President
<PAGE>
LAKE SAMMAMISH LIMITED PARTNERSHIP
C/O PAINEWEBBER PROPERTIES INCORPORATED
265 FRANKLIN STREET, 15TH FLOOR
BOSTON, MASSACHUSETTS 02110
September 22, 1998
R&B Westside, Inc.
C/o R&B Realty Group
2222 Corinth Avenue
Los Angeles, California 90824
Attn: N. Christopher Cheatum
Re: The Chandler's Reach Apartments
Dear Mr. Cheatum:
Reference is hereby made to that certain Purchase and Sale Agreement (the
"Agreement"), dated as of July 10, 1998, by and between Lake Sammamish Limited
Partnership (the "Seller") and R&B Westside, Inc. (the "Buyer") as such
Agreement is amended and affected by that certain Side Letter Agreement from
Seller to Buyer, dated August 10, 1998. All capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Agreement.
As of the date hereof, the Escrowed Amount held by Escrow Agent with
respect to the Property is Seven Hundred Thousand Dollars ($700,000).
Buyer has requested that the Closing Date be extended to October 1, 1998.
Seller has agreed to so extend the Closing Date on the condition that and in
consideration for which, Buyer hereby authorizes and directs Escrow Agent to
immediately disburse Three Hundred Fifty Thousand Dollars ($350,000) (the
"Chandler's Extension Consideration") to Seller pursuant to the following wire
instructions:
Bank: Seafirst Bank
ABA #: xxxxxxxxxxxxx
Account #: xxxxxxxxxxxxx
Account Name: Chandler's Reach - West RS as Agent
The Chandler's Extension Consideration shall in no event be refundable to
Buyer, but such sum shall be applied towards the Purchase Price payable to the
Seller at the time of the Closing if, and only if, the Closing occurs.
Time is expressly declared to be of the essence with respect to the
Closing Date as extended as provided herein. Notwithstanding the provisions of
the Agreement or of Paragraph 1 of the Earnest Money Escrow Instructions
attached as Exhibit D to the Agreement and executed by each of the parties to
this Letter (the "Escrow Agreement"), Buyer expressly acknowledges that if Buyer
defaults in its obligations under the Agreement and the Closing does not occur
on the Closing Date as extended as provided herein, Buyer hereby (i) waives all
of its rights pursuant to Section 1 of the Escrow Agreement, including, without
limitation, the right to receive a copy of any Demand delivered by Seller to the
Escrow Agent and the right to consent to the disbursement by the Escrow Agent to
Seller of the remainder of the Escrowed Amount, and (ii) authorizes and directs
Escrow Agent to disburse to Seller the remainder of the Escrowed Amount with
respect to the Property in accordance with the foregoing wire instructions
immediately upon receipt of a Demand or telephonic order from Seller alone.
Except as expressly set forth herein, all terms of the Agreement remain
unmodified and in full force and effect.
This letter agreement may be executed in two or more counterparts, each of
which shall be an original but such counterparts shall constitute one and the
same instrument notwithstanding that Buyer, Seller and Escrow Agent are not
signatory to the same counterpart. Buyer, Seller and Escrow Agent acknowledge
and agree that the parties hereto may rely upon facsimile signatures, but shall
nevertheless exchange signed copies of this letter agreement promptly after its
execution.
<PAGE>
Please indicate your acceptance of the terms contained herein by executing
this letter agreement in the space below.
Very truly yours,
LAKE SAMMAMISH LIMITED PARTNERSHIP
By: PaineWebber Equity Partners One Limited
Partnership, its general partner
By: First Equity Partners, Inc., its
general partner
By: /s/ Richard C. Coomber
-----------------------
Name: Richard C. Coomber
Title: Vice President
ACKNOWLEDGED AND AGREED:
R&B WESTSIDE, INC.
By: /s/ N. Christopher Cheatum
--------------------------
Name: N. Christopher Cheatum
Title: Vice President
<PAGE>
ASSIGNMENT AND ASSUMPTION
OF
PURCHASE AND SALE AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION OF PURCHASE AND SALE AGREEMENT
("Assignment") is dated as of September 23, 1998, by and between Lake Sammamish
Limited Partnership ("Seller"), R&B Westside, Inc. ("R&B"), Sherman Oaks Holding
Company, LLC ("Sherman Oaks LLC"), and Westside Holding Company, LLC ("Westside
LLC").
RECITALS
A. Seller and R&B entered into that certain Purchase and Sale Agreement
(the "Agreement") dated as of July 10, 1998.
B. Paragraph 12.1 of the Agreement permits R&B to elect Sherman Oaks
Country Club Apartments, a California limited partnership (the "Partnership"),
or an affiliate entity controlled by or under common control with the
Partnership as R&B's nominee to purchase that certain real property located in
King County, Washington, as more particularly described in the Agreement (the
"Property").
C. R&B desires to assign its rights, title and interest in the Agreement to
Sherman Oaks LLC and Westside LLC, as their interest may appear, pursuant to
paragraph 12.1 of the Agreement.
D. The sole member of Sherman Oaks LLC is Sherman Oaks Member company, LLC,
a Washington limited liability company, whole member is the Partnership, and the
sole member of Westside LLC is Westside Member Company, LLC whole member is R&B.
The shareholders of R&B are the same as some of the general partners of the
Partnership.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, Seller, R&B, Sherman Oaks LLC and Westside LLC agree as
follows:
1. R&B shall assign by separate agreement its rights, title and interest
in the Agreement to Sherman Oaks LLC and Westside LLC.
2. Seller consents to the assignment of the Agreement by R&B to Sherman
Oaks LLC and Westside LLC.
3. Sherman Oaks LLC and Westside LLC shall assume all of R&B's obligation
as buyer under the Agreement.
4. In accordance with the provisions of Section 12.1 of the Agreement, the
designation of Sherman Oaks LLC and Westside LLC, as buyer of the Property,
shall not release R&B from its obligations under the Agreement.
5. This Agreement may be executed in any number of counterparts, which
together constitute one original instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first stated above.
SELLER: LAKE SAMMAMISH LIMITED PARTNERSHIP,
a Texas limited partnership
By: PaineWebber Equity Partners One Limited
Partnership, its General Partner
By: First Equity Partners, Inc., its
General Partner
By: /s/ Richard C. Coomber
----------------------
Richard C. Coomber
Vice President
R&B R&B WESTSIDE, INC., a California corporation
By: /s/ Darby T. Keen
-----------------
Darby T. Keen
President
By: /s/ N. Christopher Cheatum
---------------------------
N. Christopher Cheatum
Vice President
SIGNATURES CONTINUE ON NEXT PAGE
<PAGE>
SHERMAN OAKS LLC: SHERMAN OAKS HOLDING COMPANY, LLC,
a Washington limited liability company
By: Sherman Oaks Member Company, LLC,
a Washington limited liability company
Its Member
By: Sherman Oaks Country Club
Apartments, a California limited
partnership
Its Member
By: Howard F. Ruby, Trustee of
The Howard F. Ruby Trust, u/a
dated September 5, 1978
Its General Partner
By: /s/ Howard F. Ruby Trustee
--------------------------
/s/ Darby T. Keen
Darby T. Keen,
Attorney-in-fact for
Howard F. Ruby, Trustee
By: /s/ Howard F. Ruby Trustee
--------------------------
/s/ Gary C. Grubbs
Gary C. Grubbs
Attorney-in-fact for
Howard F. Ruby, Trustee
By: Edward R. Broida,
Trustee of
The Edward R. Broida Trust
No. 1, u/s dated April 2,
1976, as amended
Its General Partner
By: /s/ James B. Bertles
--------------------
James B. Bertles
Attorney-in-fact for
Edward R. Broida,
Trustee
<PAGE>
WESTSIDE LLC: WESTSIDE HOLDING COMPANY, LLC,
a Washington limited liability company
By: Westside Member Company, LLC,
a Washington limited liability company
Its Member
By: R&B Westside Inc., a
California corporation
Its Member
By: /s/ Darby T. Keen
-----------------
Darby T. Keen,
President
By: /s/ N. Christopher Cheatum
--------------------------
N, Christopher Cheatum
Vice President
<PAGE>
WHEN RECORDED RETURN TO:
Saltzburg, Ray & Bergman, LLP
10960 Wilshire Boulevard
Tenth Floor
Los Angeles, California 90024
Attn: Sara Dineen Harris
SPECIAL WARRANTY DEED
- --------------------------------------------------------------------------------
The GRANTOR, LAKE SAMMAMISH LIMITED PARTNERSHIP, a Texas limited
partnership, in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, in hand paid, grants, bargains, sells, conveys and
confirms to SHERMAN OAKS HOLDING COMPANY, LLC, a Washington limited liability
company, as to an undivided 68.59% interest, and WESTSIDE HOLDING COMPANY, LLC,
a Washington limited liability company, as to an undivided 31.41% interest, the
following described real estate, situated in the County of King, State of
Washington:
SEE Exhibit A annexed hereto.
SUBJECT TO matters identified on Exhibit B annexed hereto and by
this reference incorporated herein. The recital of the matters
identified on Exhibit B shall not constitute a republication thereof
or estoppel against either the grantor or grantee herein with
respect thereto if they or any of them have expired or become
unenforceable for any reason whatsoever.
The Grantor for itself and for its successor(s) in interest does by these
presents expressly limit the covenants of the deed to those herein expressed,
and excludes all covenants arising or to arise by statutory or other
implication, and does hereby covenant that against all persons whomsoever
lawfully claiming or to claim by, through or under said Grantor and not
otherwise, it will forever warrant and defend the said described real estate.
DATED: October 1, 1998.
LAKE SAMMAMISH LIMITED PARTNERSHIP,
a Texas limited partnership
By: PaineWebber Equity Partners One Limited
Partnership, its general partner
By: First Equity Partners, Inc.,
its general partner
By: /s/ Richard C. Coomber
-----------------------
Richard C. Coomber
Vice President
<PAGE>
CHANDLER'S REACH APARTMENTS
BILL OF SALE AND GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS BILL OF SALE AND GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT (this
"Agreement"), is made as of the 1st day of October, 1998 by and from LAKE
SAMMAMISH LIMITED PARTNERSHIP, a Texas limited partnership, with an address c/o
PaineWebber Properties Incorporated, 265 Franklin Street, 15th Floor, Boston,
Massachusetts 02110 ("Assignor"), to and for the benefit of SHERMAN OAKS HOLDING
COMPANY, LLC, a Washington limited liability company, and WESTSIDE HOLDING
COMPANY, LLC, a Washington limited liability company, both having an address c/o
R&B Realty Group, 2222 Corinth Avenue, Los Angeles, California 90064
(collectively, as tenants-in-common, "Assignee").
R E C I T A L S
Pursuant to the terms of a certain Purchase and Sale Agreement dated as of
July 10, 1998 by and among, Assignor, as seller, and R&B Westside, Inc. ("R&B"),
as buyer, which Purchase and Sale Agreement has been assigned by R&B to
Assignee, pursuant to that certain Assignment and Assumption of Purchase and
Sale Agreement, dated of even date herewith (as so assigned, the "Purchase and
Sale Agreement"), Assignee is, by deed of even date, today acquiring from
Assignor all of Assignor's interest in, and rights with respect to, the property
known as the Chandler's Reach Apartments, being that certain parcel of land,
together with the buildings and other improvements located thereon, located in
Redmond, Washington, as more particularly described in Exhibit A attached hereto
(collectively, the "Property").
NOW THEREFORE, in consideration of such transfer, the conveyance of all of
Assignor's interest in, and rights with respect to, the Property by Assignor to
Assignee, and other valuable consideration, the receipt and sufficiency of which
are hereby mutually acknowledged, the parties agree as follows:
A G R E E M E N T
1. Sale of Assigned Property. Assignor hereby sells, transfers, assigns,
delivers, sets-over and conveys to Assignee, its successors and assigns forever,
all of Assignor's right, title and interest in and to all personal property
owned by Assignor and installed, located at or otherwise used in connection with
the development, ownership, leasing, financing, improvement, operation or
maintenance of the Property, regardless of where such personal property may be
located, including, without limitation: (i) all tangible personal property
relating to the Property, including, without limitation, the tangible personal
property described on Exhibit B attached hereto, if any, and (ii) all intangible
personal property or other assets relating to the Property and the conduct of
Assignor's business thereon, including, without limitation all of Assignor's
right, title and interest in all (a) warranties relating to the Property in
Seller's possession, including, without limitation, the warranties listed on
Exhibit C attached hereto, if any, (b) all consents, authorizations, variances,
waivers, licenses, permits, certificates and approvals from any governmental
authority with respect to the Property, (collectively, the "Permits"), (c) all
logos and trade names currently used in the operation of the Property
(including, without limitation, the right to the name "Chandler's Reach
Apartments,") and (d) all plans and specifications relating to the Property in
Seller's possession, in each case to the extent that the Assignor may legally
transfer the same (collectively, the "Assigned Property").
2. Power and Authority. Assignor represents and warrants to Assignee that it is
fully empowered and authorized to execute and deliver this Agreement, and the
individuals signing this Agreement on behalf of Assignor each represents and
warrants to Assignee that he or she is fully empowered and authorized to do so.
3. As Is. ASSIGNOR MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR PURPOSE
IN RESPECT OF THE ASSIGNED PROPERTY, AND THE SAME IS SOLD IN AN "AS IS, WHERE
IS" CONDITION, WITH ALL FAULTS. BY ACCEPTANCE OF DELIVERY ASSIGNEE AFFIRMS THAT
ASSIGNEE HAS INSPECTED THE ASSIGNED PROPERTY AND IS SATISFIED WITH ITS
CONDITION, AND THAT IT HAS NOT RELIED ON ASSIGNOR'S SKILL OR JUDGMENT TO SELECT
OR FURNISH THE ASSIGNED PROPERTY FOR ANY PARTICULAR PURPOSE, AND THAT ASSIGNOR
MAKES NO WARRANTY THAT THE ASSIGNED PROPERTY IS FIT FOR ANY PARTICULAR PURPOSE
AND THAT THERE ARE NO REPRESENTATIONS AND WARRANTIES, EXPRESSED, IMPLIED, OR
STATUTORY WITH RESPECT THERETO.
4. Assumption. By execution of this Agreement, Assignee hereby accepts the
assignment of the Assigned Property and, subject to the terms of this Agreement,
assumes and agrees to perform all of Assignor's obligations as owner of the
Property under the Assigned Property, if any, first arising after the date
hereof.
5. Intentionally omitted.
<PAGE>
6. Further Assurances. Assignor agrees, at its own expense, upon the reasonable
request of Assignee, to make, execute and deliver any and all documents or
instruments of any kind, to perform all such other conditions that may be
necessary or proper and reasonable to effectuate, confirm, perform or carry out
the terms and provisions of this Agreement.
7. Counterparts. This Agreement may be executed in any number of counterparts
and it shall be sufficient that the signature of each party appear on one or
more such counterparts. All counterparts shall collectively constitute a single
agreement.
8. Governing Law. This Agreement shall be governed by the laws of the State of
Washington and shall be binding upon and inure to the benefit of Assignor and
Assignee and their respective successors and assigns.
DOCUMENT CONTINUES ON NEXT PAGE
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Agreement the day and year first above written.
ASSIGNOR:
LAKE SAMMAMISH LIMITED PARTNERSHIP, a
Texas limited partnership
By: PaineWebber Equity Partners One
Limited Partnership, general partner
By: First Equity Partners, Inc.,
its general partner
By: /s/ Richard C. Coomber
-----------------------
Richard C. Coomber
Vice President
SIGNATURES CONTINUE ON NEXT PAGE
<PAGE>
ASSIGNEE (as tenants-in-common):
SHERMAN OAKS HOLDING COMPANY, LLC,
a Washington limited liability company
By: Sherman Oaks Member Company, LLC,
a Washington limited liability company
Its Member
By: Sherman Oaks Country Club
Apartments,
a California limited partnership
Its Member
By: Howard F. Ruby, Trustee of
The Howard F. Ruby Trust, u/a
dated September 5, 1978
Its General Partner
By: /s/ Gary C. Grubbs
------------------
Gary C. Grubbs,
Attorney-in-fact for
Howard F. Ruby, Trustee
By: /s/ Darby T. Keen
-----------------
Darby T. Keen,
Attorney-in-fact for
Howard F. Ruby, Trustee
By: Edward R. Broida, Trustee of
The Edward R. Broida Trust,
u/a dated April 2, 1976
Its General Partner
By: /s/ James B. Bertles
--------------------
James B. Bertles,
Attorney-in-facts for
Edward R. Broida, Trustee
SIGNATURES CONTINUE ON NEXT PAGE
<PAGE>
and
WESTSIDE HOLDING COMPANY, LLC,
a Washington limited liability company
By: Westside Member Company, LLC,
a Washington limited liability company
Its Member
By: R&B Westside, Inc.,
a California corporation
Its Member
By: /s/ Darby T. Keen
-----------------
Darby T. Keen,
President
By: /s/ N. Christopher Cheatum
--------------------------
N. Christopher Cheatum
Vice President
<PAGE>
CHICAGO TITLE COMPANY
SELLER'S SETTLEMENT STATEMENT
ESCROW NUMBER: 05660-008151311-001 ORDER NUMBER: 05660-008151311
CLOSING DATE: 10/1/98 CLOSER: ROSE MARTINEZ
BUYER: WESTSIDE HOLDING COMPANY, LLC
SECURITY TRUST COMPANY INTERMEDIARY FOR
SHERMAN OAKS HOLDING COMPANY, LLC
SELLER: LAKE SAMMAMISH LIMITED PARTNERSHIP
PROPERTY: THE CHANDLER'S REACH APARTMENTS, REDMOND, WA
CHARGE SELLER CREDIT SELLER
------------- -------------
Sales Price: $ $17,850,000.00
Loan Payoff to THE PRUDENTIAL
INSURANCE CO OF AMERICA 3,401,468.63
Pre-Payment Fee 354,066.00
INTEREST TO 10/1/98 12,592.99
INTEREST FOR 10/1/98 787.06
STANDARD OWNERS POLICY 6,129.00
SALES TAX ON OWNERS POLICY 527.10
2ND 1/2/98 TAXES 57,066.17
EXCISE TAX (1.78%) 317,730.00
CB RICHARD ELLIS/COMMISSIONS 221,000.00
RECORDING RECONVEYANCE (APPROX) 50.00
RELEASED TO SELLER ON 7/10/98 100,000.00
RELEASED TO SELLER ON 9/23/98 350,000.00
1/2ESCROW FEE 3,100.00
PROCESSING PAYOFF 65.00
GOODWIN, PROCTER & HOAR 12,800.00
Prorations and Adjustments
County Taxes from 10/1/98 to 12/31/98 28,533.00
INTEREST EARNED 2,009.59
PREPAID RENTS 994.00
SECURITY DEPOSITS 27,418.00
CREDIT TO SELLER FROM BUYER 205,000.00
Funds Due to Seller at Closing 13,219,748.64 .
-------------- -------------
TOTALS $18,085,542.59 $18,085,542.59
============== ==============
<PAGE>
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
CROW PAINEWEBBER LA JOLLA LIMITED PARTNERSHIP ("SELLER")
AND
R&B WESTSIDE, INC. ("BUYER")
THE MONTERRA APARTMENTS
SAN DIEGO, CALIFORNIA
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1.....................................................................1
DEFINITIONS.............................................................1
ARTICLE 2.....................................................................3
PURCHASE AND SALE.......................................................3
ARTICLE 3.....................................................................4
PURCHASE PRICE; DEPOSIT; ADJUSTMENTS....................................4
ARTICLE 4.....................................................................6
PRECLOSING OPERATION....................................................6
ARTICLE 5.....................................................................7
ACCESS, INSPECTION, DILIGENCE...........................................7
ARTICLE 6....................................................................12
TITLE AND SURVEY.......................................................12
ARTICLE 7....................................................................14
CONDITIONS PRECEDENT AND CLOSING.......................................14
ARTICLE 8....................................................................17
CASUALTY AND CONDEMNATION..............................................17
ARTICLE 9....................................................................18
BROKERAGE COMMISSIONS..................................................18
ARTICLE 10...................................................................18
DEFAULT, TERMINATION AND REMEDIES......................................18
ARTICLE 11...................................................................20
REPRESENTATIONS AND WARRANTIES.........................................20
ARTICLE 12...................................................................24
MISCELLANEOUS..........................................................24
ARTICLE 13...................................................................28
IRS FORM 1099-S DESIGNATION............................................28
ARTICLE 14...................................................................29
INTENTIONALLY OMITTED..................................................29
LIST OF EXHIBITS
EXHIBIT A - THE LAND
EXHIBIT B - PERSONAL PROPERTY
EXHIBIT C - PROPERTY CONTRACTS
EXHIBIT D - EARNEST MONEY ESCROW INSTRUCTIONS
EXHIBIT E - RENT ROLL
EXHIBIT F - FORM OF ESCROW CLOSING INSTRUCTIONS
EXHIBIT G - DUE DILIGENCE DOCUMENTS
<PAGE>
PURCHASE AND SALE AGREEMENT
Monterra Apartments
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into as of
the 10th day of July, 1998 by and between Seller and Buyer, upon the following
terms and conditions:
WHEREAS, Seller desires to sell and Buyer desires to purchase, the
Property (hereinafter defined) on the terms and conditions hereinafter set
forth;
NOW THEREFORE, in consideration of the mutual undertakings, covenants and
agreements contained herein, and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
References in this Agreement to the following terms shall have the
following meanings:
Buyer: R&B Westside, Inc., a California corporation
- -----
Deposit: See Section 3.2
- -------
Documents: Those materials listed on Exhibit G attached hereto.
- ---------
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 or the
use of the Real Property relating to pollution or
protection of 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 into the
environment (including, without limitation, ambient
air, surface water, ground water or land or soil).
Escrowed Amount: See Section 3.2
- ---------------
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 thereunder; (ii) any "hazardous
waste" as now or hereafter defined in the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901
et seq.) or regulations promulgated thereunder;
(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.
Hazardous Materials shall include, without limitation,
any substance, the presence of which on the Real
Property requires reporting, investigation or
remediation under Environmental Requirements.
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,
which buildings, structures and other improvements
include, without limitation, [166] residential rental
units.
<PAGE>
Intangible Property: All of Seller's right, title and interest, if
- ------------------- any, in (i) warranties relating to the Improvements or
Personal Property in the possession of Seller, (ii) all
licenses, permits and approvals relating to the Real
Property, (iii) the use of the name "Monterra
Apartments," and (iv) all plans and specifications, in
each case to the extent that Seller may legally
transfer the same.
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.
Personal Property: 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, including, without
limitation, the Personal Property listed on Exhibit B
attached hereto. Personal Property specifically
excludes: (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.
Property: Contracts: All of Seller's rights, if any, in the
- -------- contracts listed on Exhibit C attached hereto, 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: $20,100,000
- ---------------
Real Property: The Land and the Improvements.
- -------------
Seller: Crow PaineWebber La Jolla Limited Partnership, a
- ------ Texas limited partnership
Tenant Deposits: Seller's rights to unapplied security deposits,
- --------------- pet deposits, cleaning deposits under the Leases.
Title Company: Chicago Title Insurance Company
- -------------
ARTICLE 2
PURCHASE AND SALE
2.1 Seller hereby agrees to sell and convey the Property to Buyer and
Buyer hereby agrees to buy the Property from Seller for the Purchase Price and
otherwise subject to the covenants, provisions, terms and conditions contained
herein.
ARTICLE 3
PURCHASE PRICE; DEPOSIT; ADJUSTMENTS
3.1 Initial Non-Refundable, Non-Interest Bearing Payment to Seller.
Contemporaneously with the execution and delivery of this Agreement (and as a
condition precedent to the effectiveness of this Agreement), Buyer shall deliver
to Seller, as independent consideration, a non-refundable payment (the
"Payment") in the amount of One Hundred Thousand and 00/100 Dollars ($100,000),
which amount shall be deemed earned upon the execution and delivery of this
Agreement by Buyer and Seller. The Payment shall be retained by Seller in all
instances; provided, however, that (i) if the Closing occurs, the amount of the
Payment shall be credited towards the Purchase Price, and (ii) if Seller
defaults in its obligations hereunder, the Payment shall be returned to Buyer,
without interest.
<PAGE>
3.2 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 Five Hundred Thousand Dollars
($500,0000) (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 3.3 below.
3.3 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 United States dollars by wire transfer
of federal funds, less the Escrowed Amount and the Payment (the "Cash Balance").
3.4 Tax Proration. All due and payable real estate taxes, all general and
special assessments on the Land and ad valorem taxes, if any, on the Personal
Property (based on the most recent ascertainable taxes) attributable to the
Property through the Closing Date shall be prorated and adjusted as of the
Closing Date. In no event shall Seller be charged with or be responsible for any
increase in the taxes on the Property resulting from the sale of the Property or
from any improvements made or leases entered into on or after the Closing Date.
If the tax statements for the fiscal year during which the Closing Date occurs
are not finally determined, then the tax figures for the immediately prior
fiscal year shall be used for the purposes of prorating taxes on the Closing
Date, provided that there shall be no further adjustment to be made after the
Closing Date. 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.
3.5 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.
3.6 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.
3.7 Income and Expense Proration. Collected rents for the then current and
any future period, Tenant Deposits, and all expenses and other charges in
connection with the operation of the Property shall be apportioned and 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 Tenant Deposits
shall be credited to Buyer and shall thereafter be deemed transferred to Buyer
and Buyer shall assume and be solely responsible for the payments of Tenant
Deposits to tenants in accordance with the Leases and applicable law. Seller
shall transfer to Buyer and receive a credit for any utility deposits and any
deposits for third parties under any of the Property Contracts. In addition to
the foregoing, at Closing the Purchase Price shall be increased by the amount of
uncollected or past due rent; provided, however, that no adjustment shall be
made for rent which is more than one (1) month past due. Seller shall be
entitled to attempt to collect all rents and other charges which are more than
one (1) month past due but shall not be entitled to pursue eviction proceedings
in connection with such collection efforts.
<PAGE>
3.8 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, Buyer 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.
3.9 Closing Costs.
(a) 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, and (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, other than the cost set forth in subsection
(b)(v) below.
(b) Buyer shall pay: (i) 50% of the escrow fees of the Escrow Agent,
(ii) charges to record the deed, and evidence of Buyer's existence or
authority, (iii) Buyer's legal fees and expenses related to the
negotiation of this Agreement and all documents required to close the
transaction contemplated hereby, (iv) all costs related to the Buyer's
inspection and due diligence, including, without limitation, the cost of
appraisals, architectural, engineering, credit and environmental reports,
(v) all costs associated with any ALTA extended portion of any title
policy premiums, and (vi) all costs allocable to preparation of the
survey.
(c) All other closing costs, including, without limitation, all
state, county or other taxes associated with the transfer of the property,
shall be paid by Seller or Buyer in accordance with the custom in the
jurisdiction where the Property is located.
ARTICLE 4
PRECLOSING OPERATION
4.1 Leases. A rent roll (the "Rent Roll") containing a list of all
occupants of the Property pursuant to the Leases 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, (ii) be for a term of not more than thirteen (13) months (with
respect to residential Leases only), and (iii) on the Seller's current standard
form of lease. Notwithstanding the foregoing, Seller agrees to obtain Buyer's
prior written consent to any Leases that provide for a term in excess of
thirteen (13) months, which consent Buyer agrees shall not be unreasonably
withheld, and Buyer's consent shall be 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, including
ordinary preparation for occupancy of residential units vacated prior to
Closing.
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 (as defined below), unless Buyer has provided written notice to
Seller of Buyer's election to terminate this Agreement, Buyer shall provide
written notice to Seller of the Property Contracts that Buyer desires to have
terminated by Seller, and Seller will terminate the Property Contracts so
identified at or before Closing, provided that such Property Contracts may be
terminated without cost or liability to Seller and if there is cost or liability
to Seller, Buyer shall be responsible for any such liability and provided that
Seller may not require termination of any property contract designated
non-terminable on Exhibit C. At Closing, Seller shall assign and Buyer shall
assume the Property Contracts, except those Property Contracts which Seller has
agreed to terminate. Buyer shall indemnify, defend and hold the Seller harmless
from and against any and all claims under the Property Contracts relating to the
period from and after the Closing Date. Notwithstanding the foregoing, Seller's
existing management contract for the Property shall be terminated by Seller
effective as of the Closing Date.
ARTICLE 5
ACCESS, INSPECTION, DILIGENCE
5.1 Access/Purchaser's Responsibilities/Purchaser's Indemnity.
(a) 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 not previously delivered to Buyer
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.
(b) 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 5.5 herein.
(c) Buyer will indemnify, defend, and hold Seller and its partners
and Seller's 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 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.
(d) Buyer acknowledges and agrees that the Documents including,
without limitation, the documents listed in paragraph (e) below are
provided to Buyer for informational purposes only and do not constitute
representations or warranties of Seller or its partners and Seller's
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.
(e) Buyer acknowledges receipt and independent review and evaluation
of the following Documents prior to the date hereof:
(i) Marx/Okubo Building Assessment Report, dated March 26,
1998 (the "Assessment"); and
(ii) Phase I Site Assessment Report, dated April 17, 1998,
prepared by CTL Environmental (the "Phase I").
Based upon its independent investigation and review of the foregoing
documents, Buyer hereby acknowledges and agrees that it waives its right
to terminate this Agreement pursuant to Section 5.2 below for any reason
pertaining to or in connection with information contained in the
Assessment or the Phase I.
5.2 Diligence. Subject to Section 5.1, above, Buyer shall promptly
commence and actively pursue the following due diligence items:
(a) Review title and survey matters;
(b) Review the Property Contracts;
(c) Review applicable zoning and other land use controls, and other
permits, licenses, permissions, approvals and consents;
(d) Review all Leases affecting the Property; and
(e) Subject to the provisions of Section 5.1 above, conduct any and
all other reviews and inspections that Buyer may desire.
Buyer shall complete its due diligence on or before the date which is
thirty (30) days from the date hereof (the "Diligence Date"). Notwithstanding
any other term or provision herein to the contrary, but subject to the
provisions of Section 5.1(e) above, 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).
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 5.3 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.
(a) Seller has delivered to Buyer a copy of the Phase I and the
Assessment.
(b) 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 and all copies of,
excerpts from and analyses of all documents relating to the Property
prepared by Buyer or its agents, representatives or employees.
(c) The return of the Escrowed Amount to Buyer under this Agreement
shall not be contingent upon Buyer's fulfillment of its obligations under
Section 5.3(b); provided, however, that Buyer agrees to use its best
efforts to promptly comply with the requirements of Section 5.3(b).
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, any Document or the
information contained therein 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 such matters with and disclose such
matters 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. 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,
except for the next sentence, 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 WILL HAVE HAD AN OPPORTUNITY TO CONDUCT DILIGENCE ON THE PROPERTY AND
BUYER WILL ACQUIRE THE PROPERTY IN ITS THEN-CURRENT CONDITION AT CLOSING BASED
ON ITS DILIGENCE. BUYER FURTHER ACKNOWLEDGES THAT NEITHER SELLER NOR ITS
PARTNERS NOR THEIR RESPECTIVE 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. THE BUYER ACKNOWLEDGES AND AGREES THAT THE PROPERTY IS TO BE
CONVEYED BY THE SELLER TO THE BUYER "AS IS," "WITH ALL FAULTS," AND IN ITS
THEN-CURRENT CONDITION AT CLOSING. THE BUYER FURTHER ACKNOWLEDGES AND AGREES
THAT, EXCEPT AS EXPRESSLY CONTAINED HEREIN, NEITHER THE SELLER NOR ITS PARTNERS
NOR THEIR RESPECTIVE AGENTS, EMPLOYEES OR OTHER REPRESENTATIVES 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
AND ITS PARTNERS 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 WITH RESPECT
TO THE PROPERTY (OR ANY PART THEREOF) OR INFORMATION SUPPLIED TO BUYER WITH
RESPECT THERETO. FURTHER, THE SELLER AND ITS PARTNERS 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. THE BUYER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED TO
BUYER BY SELLER OR ITS PARTNERS OR THEIR RESPECTIVE AGENTS, EMPLOYEES OR OTHER
REPRESENTATIVES 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) 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; 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 PARAGRAPHS 5.2,
5.5, 5.6 AND 11.4 SHALL SURVIVE CLOSING, AND BUYER SHALL CONFIRM SUCH PROVISIONS
IN WRITING AT CLOSING.
5.6 Buyer's Release of Seller. SELLER AND ITS PARTNERS AND SELLER'S
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 HAZARDOUS SUBSTANCES, UNDESIRABLE OR SUBJECT
TO REGULATION OR 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
PARTNERS, SELLER'S 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, AND SELLER, ITS PARTNERS, SELLER'S PROPERTY MANAGER AND
THEIR RESPECTIVE AGENTS ARE HEREBY RELEASED FROM ALL RESPONSIBILITY AND
LIABILITY FORM SUCH MATERIALS.
ARTICLE 6
TITLE AND SURVEY
6.1 Title and Survey. Promptly following the execution of this Agreement,
Buyer may obtain a current ALTA as-built survey of the Real Property or an
update of the Survey (as defined in Exhibit G).
If the Survey or matters listed as exceptions in the Title Commitment (as
defined in Exhibit G attached hereto) are not satisfactory to Buyer, Buyer
shall, within ten (10) days following receipt of both the Title Commitment and
the Survey, 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 connection with any such cure undertaken by Seller. If there are
Title Objections which Seller is unable or unwilling to cure, Buyer may
terminate this Agreement as provided in Section 5.3, above or waive such
objections which Seller is not willing or able to cure and proceed to closing.
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 (collectively, the "Permitted Exceptions"):
(a) All Leases;
(b) All zoning, building and other laws applicable to the Property;
(c) All matters which are agreed upon or consented to by Buyer;
(d) 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);
(e) All matters shown on Schedule B of the Title Commitment or of
public record as of the effective date of the Title Commitment and which
Seller does not cure pursuant to Section 6.1, above;
(f) Property contracts not terminated under Section 4.3;
(g) Any matters shown on the Survey; and
(h) 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 and
the Property Contracts (except those terminated in accordance with Section 4.3)
to Buyer and Buyer shall, from and after the Closing Date, assume Seller's
obligations thereunder and under all other Permitted Exceptions. At Closing,
Seller shall convey the Personal Property and Intangible Property to Buyer by
quitclaim bill of sale and general assignment.
<PAGE>
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. Each condition may be waived in whole or in part only by written
notice of such waiver from Buyer to Seller.
(a) 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, including, without limitation, Seller's
obligation pursuant to Section 6.2.
Notwithstanding the foregoing, if the conditions set forth in this Section
7.1 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) Buyer shall have the
right to (i) 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, or (ii) exercise its right of specific performance
pursuant to Article 10 below.
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.
(a) Buyer performing and complying in all material respects with all
of the terms of this Agreement to be performed and complied with by Buyer
prior to or at the Closing, including, without limitation, payment by the
Buyer of the Purchase Price (as adjusted as otherwise provided herein);
and
(b) On the Closing Date, all of the representations of Buyer set
forth in this Agreement shall continue to be true, accurate and complete.
7.3 Closing Date. Subject to Seller's right to extend the Closing Date as
provided in Section 7.1, the consummation of the purchase and sale contemplated
in this Agreement (the "Closing") shall occur thirty (30) days following the
Diligence Date, if such date is a business day, otherwise on the next succeeding
business day (the "Closing Date"), at the office of the Escrow Agent or through
the escrow closing arrangements set forth in the Form of Escrow Closing
Instructions attached hereto as Exhibit F. Notwithstanding anything herein to
the contrary, in no event shall the Closing Date be later than October 30, 1998.
7.4 Closing Deliveries. On the Closing Date, Seller shall deliver or
cause to be delivered:
(a) A duly executed and acknowledged special warranty deed conveying
the Land and the Improvements to Buyer;
(b) A duly executed quitclaim bill of sale and general assignment
conveying the Personal Property and the Intangible Property to Buyer;
(c) A duly executed assignment and assumption of the Leases and
Tenant Deposits (the "Assignment of Leases");
(d) A duly executed assignment and assumption of Property Contracts
being assumed (the "Assignment of Contracts");
(e) A certificate of non-foreign status from Seller;
(f) An updated Rent Roll (including a list of all delinquent and
prepaid rents) certified by the Seller as true and correct as of a date
not earlier than five (5) days before the Closing Date;
(g) 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;
(h) 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;
(i) All keys to all locks on the Property and similar items, to the
extent in Seller's possession; and
(j) A certificate executed by Seller certifying that the
representations and warranties of Seller contained in Section 11.2 herein
are true and correct as of the Closing Date.
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:
(a) 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;
(b) Evidence in form and substance reasonably satisfactory to Escrow
Agent and Seller of Buyer's authority to purchase the Property;
(c) The Assignment of Leases;
(d) The Assignment of Contracts;
(e) Such other instruments as Seller or Escrow Agent may reasonably
request to effectuate the transactions contemplated by this Agreement;
(f) A duly executed counterpart original of the closing statement
setting forth the Purchase Price, the closing adjustments and the
application of such amounts;
(g) 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;
(h) Acknowledgment by Buyer of Buyer's receipt from Seller of the
Tenant Deposits;
(i) An indemnity pursuant to Section 4.3 of this Agreement with
respect to each Property Contract; and
(j) A certificate executed by Buyer certifying that the
representations and warranties of Buyer contained in Section 11.1 herein
are true and correct as of the Closing Date.
7.6 Possession. Possession of the Property shall be delivered to Buyer by
Seller at the Closing, subject only to Permitted Exceptions. 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, the assumption by Buyer of responsibility for
all Deposits, 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 any portion of the Improvements suffers damage in excess
of $1,000,000 from 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:
(a) to purchase the Property in its then condition and pay the
Purchase Price; or
(b) 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).
If Buyer purchases the Property, 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 casualty after the date hereof
up to the amount of the Purchase Price, less any amounts reasonably expended by
Seller for partial restoration and proceeds of rental loss insurance
attributable to the period prior to Closing.
<PAGE>
8.2 Condemnation. If any substantial portion of or interest in the
Property (for purposes of this Section 8.2, "substantial portion of or interest
in the Property" shall include any condemnation of access to the Property or of
parking spaces at 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 a substantial portion of or interest in the Property (each an "Eminent
Domain Taking"), Seller shall give notice promptly to Buyer of such event and
Buyer shall have the option to terminate this Agreement by providing notice to
Seller to such effect on or before the date which is ten (10) days from Seller's
notice to Buyer of such Eminent Domain Taking or on the Closing Date, whichever
occurs first, in which event the Escrow Agent shall return the Escrowed Amount
to Buyer, this Agreement shall terminate, and neither Seller nor Buyer shall
have any recourse against the other (except to the extent such recourse arises
in connection with a provision of this Agreement which is intended to survive
termination). If Buyer does not timely notify Seller of its election to
terminate this Agreement, Buyer shall purchase the Property and pay the Purchase
Price, and Seller shall pay over or assign to Buyer on delivery of the deed
awards recovered or recoverable by Seller on account of such Eminent Domain
Taking up to the amount of the Purchase Price, less any amounts reasonably
expended by Seller in obtaining such award.
ARTICLE 9
BROKERAGE COMMISSIONS
Seller 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 Grubb & Ellis (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 attorneys' 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 attorneys' 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 defaults in its obligation
to close hereunder, Buyer shall have the right to either (a) terminate this
Agreement and receive the Escrowed Amount, whereupon this Agreement shall
terminate without further recourse or (b) sue for specific performance of this
Agreement in accordance with its terms. Buyer hereby waives and relinquishes any
right to sue Seller for any reason whatsoever, and agrees that Seller shall not
be liable to Buyer for any actual, punitive, speculative, consequential or other
damages for breach by Seller prior to the Closing, except for payment of the
Escrowed Amount. 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, and 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 the Escrow Agent shall 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.
10.3 INTENTIONALLY OMITTED
<PAGE>
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
11.1 Buyer's Representations and Warranties. Buyer represents and warrants
to Seller that:
(a) Buyer is a California corporation, duly organized and in good
standing under the laws of the State of California, is qualified to do
business in the State of California 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. As of the
date of this Agreement, Buyer has obtained all necessary corporate,
partnership or other organizational authorizations required in connection
with the execution and delivery of this Agreement. Each of the individuals
executing this Agreement on Buyer's behalf is authorized to do so. Buyer
has the financial ability to pay the Purchase Price by tendering the Cash
Balance and performing the other covenants of Buyer set forth in this
Agreement.
(b) 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;
(c) Buyer is not in any way affiliated with Seller;
(d) No approval, consent, order or authorization of, or designation,
registration or declaration with, any of the United States, the State of
California, 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.
(e) 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 Texas.
(a) Seller has full partnership power and authority and has received
all necessary authorizations from its partners 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.
(b) Seller has directed its manager to deliver or to make available
to Buyer (i) complete copies of all Leases and (ii) the Rent Roll.
(c) Seller has directed its manager to deliver or to make available
copies of all Property Contracts.
(d) 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 Richard Coomber
and Clifford Breining, without independent investigation or inquiry.
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 PARTNERS AND SELLER'S 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 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 AND 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 SOIL 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 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, (XII) THE
PRESENCE OF HAZARDOUS SUBSTANCES 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 OR VESTING OR LAND USE, ZONING OR BUILDING ENTITLEMENTS
AFFECTING THE PROPERTY, (XVIII) THE MERCHANTABILITY OF THE PROPERTY OR FITNESS
OF THE PROPERTY FOR ANY PARTICULAR PURPOSE (BUYER AFFIRMING THAT BUYER HAS NOT
RELIED ON SELLER'S, SELLER'S PARTNERS OR SELLER'S 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 PARTNERS
OR SELLER'S 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 SOLELY 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 AGREED 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, ITS PARTNERS OR SELLER'S PROPERTY MANAGER OR
ANY AGENT OF ANY OF THEM. 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. 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 Sherman Oaks Country Club Apartments, a California
limited partnership ("Sherman Oaks"), or an affiliated entity controlled by or
under common control with Sherman Oaks, and Buyer shall give written notice of
such nominee to Seller, together with any reasonable evidence of affiliation
requested by Seller, a minimum of fifteen (15) 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 (i) when delivered or refused if sent by hand during
regular business hours, (ii) three (3) days after being sent by United States
Postal Service, registered or certified mail, postage prepaid, return receipt
requested, (iii) on the next business day when sent by 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, or (iv) on the day of receipt if such day
is a business day when sent by a facsimile, otherwise on the next business day
after receipt, as evidenced by a facsimile confirmation receipt. Any notice
given by a party to Escrow Agent shall be simultaneously given to the other
party. Any notice given by a party to the other party relating to its
entitlement to the Escrowed Amount shall be simultaneously given to the Escrow
Agent.
(1) If to Seller:
c/o Paine Webber Properties Incorporated
265 Franklin Street - 16th Floor
Boston, MA 02110
Attn: Mr. Richard Coomber
and
Trammell Crow Residential
4010 Lake Washington Blvd., N.E., Suite 330
Kirkland, WA 98033
Attn: Clyde Holland
with a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attn: Andrew C. Sucoff, Esq.
(2) If to Buyer:
R&B Westside, Inc.
c/o R&B Realty Group
2222 Corinth Avenue
Los Angeles, California 90064
Attn: N. Christopher Cheatham
with a copy to:
Saltzburg, Ray & Bergman, LLP
10960 Wilshire Boulevard, 10th Floor
Los Angeles, California 90824
Attn: Alan M. Bergman
(3) If to the Escrow Agent:
Chicago Title Insurance Company
700 South Flower Street
Los Angeles, California 90017
Attn: Ms. Connie Rivera
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; provided that persons named as the beneficiary of any waiver or
indemnity in this Agreement are third-party beneficiaries under this Agreement
as to such provisions and may enforce such provisions as if they are parties to
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. Under no circumstances
is any person other than Seller liable for Seller's obligations under this
Agreement or in respect of the transaction contemplated by this Agreement, and
Buyer hereby waives any right that it otherwise might have to pursue any partner
of Seller, any other person who might be liable for Seller's obligations because
of the direct or indirect ownership interest in Seller, or any officer,
director, agent, advisor or affiliate of any such partner or other person.
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) business days
prior to the Closing Date, provided that the failure to timely deliver such
documents shall not constitute a default by Seller hereunder.
12.20 Like-Kind Exchange. Buyer may consummate the purchase of the
Property as part of a so-called like kind exchange (the "Exchange") pursuant to
?1031 of the Internal Revenue Code of 1986, as amended (the "Code"), provided
that: (i) the Closing shall not be delayed or affected by reason of the Exchange
nor shall the consummation or accomplishment of the Exchange be a condition
precedent or condition subsequent to Buyer's obligations under this Agreement;
(ii) Buyer shall effect the Exchange through an assignment of this Agreement, or
its rights but not its obligations under this Agreement, to a qualified
intermediary; (iii) Seller shall not be required to take an assignment of the
purchase agreement for the relinquished property or be required to acquire or
hold title to any real property for purposes of consummating the Exchange; (iv)
Buyer shall pay any and all additional costs that would not otherwise have been
incurred by Buyer or Seller had Buyer not consummated its purchase through the
Exchange; (v) all documents to be executed by Seller in connection with the
Exchange shall be submitted to Seller at least five (5) business days prior to
Closing and shall be subject to Seller's reasonable approval, and (vi) Seller
shall incur no liability whatsoever in connection with the Exchange and Buyer
agrees to indemnify, defend and save Seller harmless from any and all such
liability. Seller shall not by this agreement or acquiescence to the Exchange
(1) have its rights under this Agreement against Buyer affected or diminished in
any manner or (2) be responsible for compliance with or be deemed to have
warranted to Buyer that the Exchange in fact complies with ?1031 of the Code.
ARTICLE 13
IRS FORM 1099-S DESIGNATION
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 Escrow Agent (the "Designee") as the party who
shall be responsible for reporting the contemplated sale of the Property to the
Internal Revenue Service (the "IRS") on IRS Form 1099-S; (2) to provide the
Designee with the information necessary to complete Form 1099-S; (3) that the
Designee shall not be liable for the actions taken under this Article 13, 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.
ARTICLE 14
INTENTIONALLY OMITTED
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first set forth above.
SELLER:
CROW PAINEWEBBER LA JOLLA LIMITED PARTNERSHIP
By: Crow-Western #302-San Diego Limited
Partnership, its general partner
By: TCF Residential Partnership, Ltd., its
general partner
By: Mill Spring Holdings, Inc., its
general partner
By: /s/ Sarah Puckett
-----------------
Name: Sarah Puckett
Title: Vice President
By: TCF Residential Partnership, Ltd., its
limited partner
By: Mill Spring Holdings, Inc., its
general partner
By: /s/ Sarah Puckett
-----------------
Name: Sarah Puckett
Title: Vice President
By: PaineWebber Equity Partners One Limited
Partnership, its general partner
By: First Equity Partners, Inc., its
general partner
By: /s/ Richard C. Coomber
-----------------------
Name: Richard C. Coomber
Title: Vice President
BUYER: R&B WESTSIDE, INC.
By: /s/ N. Christopher Cheatum
--------------------------
Name: N. Christopher Cheatum
Title: Vice President
<PAGE>
CROW PAINEWEBBER LA JOLLA LIMITED PARTNERSHIP
C/O PAINEWEBBER PROPERTIES INCORPORATED
265 FRANKLIN STREET, 15TH FLOOR
BOSTON, MASSACHUSETTS 02110
August 10, 1998
R&B Westside, Inc.
c/o R&B Realty Group
2222 Corinth Avenue
Los Angeles, California 90824
Attn: N. Christopher Cheatum
Re: The Monterra Apartments, San Diego, California
Dear Mr. Cheatum:
Reference is hereby made to that certain Purchase and Sale Agreement (the
"Agreement"), dated as of July 10, 1998, by and between Crow PaineWebber La
Jolla Limited Partnership (the "Seller") and R&B Westside, Inc. (the "Buyer").
All capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Agreement.
Buyer and Seller hereby agree that for purposes of all due diligence
investigations other than review of the Survey and the Title Commitment (with
respect only matters relating to the Survey) ("Survey Related Review") the
Diligence Date is August 10, 1998. Buyer hereby waives its right to terminate
the Agreement in accordance with Section 5.2 for any reason other than its
Survey Related Review.
Buyer has not yet received an updated Survey. Seller acknowledges and
agrees that Buyer shall have until August 17, 1998 (the "Survey Extension Date")
to complete its Survey Related Review. Buyer shall submit all Title Objections
(limited to matters uncovered in its Survey Related Review) to Seller on or
prior to 5:00 p.m. on the Survey Extension Date, and Seller shall have until ten
(10) days following the Survey Extension Date (the "Title Objection Reply Date")
to give Buyer written notice identifying any such 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 connection with any
such cure undertaken by Seller. If there are any such Title Objections which
Seller is unable or unwilling to cure, Buyer may terminate the Agreement in
accordance with Section 5.2 of the Agreement by written notice submitted to
Seller not later than 5:00 p.m. within three (3) business days of the Title
Objection Reply Date or waive such objections which Seller is not willing or
able to cure and proceed to Closing.
In addition, Seller and Buyer agree that Section 7.3 of the Agreement is
hereby deleted in its entirety and replaced in its entirety by the following:
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 on September
10, 1998 (the "Closing Date"), at the office of the Escrow Agent or
through the escrow closing arrangements set forth in the Form of Escrow
Closing Instructions attached hereto as Exhibit F. Notwithstanding the
foregoing, Buyer has requested and Seller has granted to Buyer an
extension of the Closing Date to September 17, 1998. Buyer may further
extend the Closing Date to September 24, 1998 upon not less than fifteen
(15) days' prior written notice to Seller, together with payment to Seller
of immediately available funds in the amount of Two Hundred Thousand
Dollars ($200,000), which sum shall in no event be refundable to Buyer,
but which sum shall be applied towards the Purchase Price payable to the
Seller when the Closing occurs. Notwithstanding anything in this Agreement
to the contrary, in no event shall the closing Date be later than October
30, 1998.
Except as expressly set forth herein, all terms of the Agreement remain
unmodified and in full force and effect.
This letter agreement may be executed in two or more counterparts, each of
which shall be an original but such counterparts shall constitute one and the
same instrument notwithstanding that both Buyer and Seller are not signatory to
the same counterpart. Buyer and Seller acknowledge and agree that the parties
hereto may rely upon facsimile signatures, but shall nevertheless exchange
signed copies of this letter agreement promptly after its execution.
<PAGE>
Please indicate your acceptance of the terms contained herein by executing
this letter agreement in the space below.
Very truly yours,
CROW PAINEWEBBER LAJOLLA LIMITED PARTNERSHIP
By: PaineWebber Equity Partners One Limited
Partnership, its general partner
By: First Equity Partners, Inc., its general
partner
By: /s/ Richard C. Coomber
-----------------------
Name: Richard C. Coomber
Title: Vice President
ACKNOWLEDGED AND AGREED:
R&B WESTSIDE, INC.
By: /s/ N. Christopher Cheatum
--------------------------
Name: N. Christopher Cheatum
Title: Vice President
<PAGE>
CROW PAINEWEBBER LA JOLLA LIMITED PARTNERSHIP
C/O PAINEWEBBER PROPERTIES INCORPORATED
265 FRANKLIN STREET, 15TH FLOOR
BOSTON, MASSACHUSETTS 02110
September 22, 1998
R&B Westside, Inc.
C/o R&B Realty Group
2222 Corinth Avenue
Los Angeles, California 90824
Attn: N. Christopher Cheatum
Re: The Monterra Apartments
Dear Mr. Cheatum:
Reference is hereby made to that certain Purchase and Sale Agreement (the
"Agreement"), dated as of July 10, 1998, by and between Crow PaineWebber La
Jolla Limited Partnership (the "Seller") and R&B Westside, Inc. (the "Buyer") as
such Agreement is amended and affected by that certain Side Letter Agreement
from Seller to Buyer, dated August 10, 1998. All capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Agreement.
As of the date hereof, the Escrowed Amount held by Escrow Agent with
respect to the Property is Seven Hundred Thousand Dollars ($700,000).
Buyer has requested that the Closing Date be extended to October 1, 1998.
Seller has agreed to so extend the Closing Date on the condition that and in
consideration for which, Buyer hereby authorizes and directs Escrow Agent to
immediately disburse Three Hundred Fifty Thousand Dollars ($350,000) (the
"Monterra Extension Consideration") to Seller pursuant to the following wire
instructions:
Bank: State Street Bank & Trust Company, Inc.
ABA #: xxxxxxxxxx
Account #: xxxxxxxxxx
Account Name: PaineWebber Equity Partners One, L.P.
The Monterra Extension Consideration shall in no event be refundable to
Buyer, but such sum shall be applied towards the Purchase Price payable to the
Seller at the time of the Closing if, and only if, the Closing occurs. Time is
expressly declared to be of the essence with respect to the Closing Date as
extended as provided herein. Notwithstanding the provisions of the Agreement or
of Paragraph 1 of the Earnest Money Escrow Instructions attached as Exhibit D to
the Agreement and executed by each of the parties to this Letter (the "Escrow
Agreement", Buyer expressly acknowledges that if Buyer defaults in its
obligations under the Agreement and the Closing does not occur on the Closing
Date as extended as provided herein, Buyer hereby (i) waives all of its rights
pursuant to Section 1 of the Escrow Agreement, including, without limitation,
the right to receive a copy of any Demand delivered by Seller to the Escrow
Agent and the right to consent to the disbursement by the Escrow Agent to Seller
of the remainder of the Escrowed Amount, and (ii) authorizes and directs Escrow
Agent to disburse to Seller the remainder of the Escrowed Amount with respect to
the Property in accordance with the foregoing wire instructions immediately upon
receipt of a Demand or telephonic order from Seller alone.
Except as expressly set forth herein, all terms of the Agreement remain
unmodified and in full force and effect.
<PAGE>
This letter agreement may be executed in two or more counterparts, each of
which shall be an original but such counterparts shall constitute one and the
same instrument notwithstanding that Buyer, Seller and Escrow Agent are not
signatory to the same counterpart. Buyer, Seller and Escrow Agent acknowledge
and agree that the parties hereto may rely upon facsimile signatures, but shall
nevertheless exchange signed copies of this letter agreement promptly after its
execution.
Please indicate your acceptance of the terms contained herein by executing
this letter agreement in the space below.
Very truly yours,
LAKE SAMMAMISH LIMITED PARTNERSHIP
By: PaineWebber Equity Partners One Limited
Partnership, its general partner
By: First Equity Partners, Inc., its
general partner
By: /s/ Richard C. Coomber
-----------------------
Name: Richard C. Coomber
Title: Vice President
ACKNOWLEDGED AND AGREED:
R&B WESTSIDE, INC.
By: /s/ N. Christopher Cheatum
--------------------------
Name: N. Christopher Cheatum
Title: Vice President
<PAGE>
ASSIGNMENT AND ASSUMPTION
OF
PURCHASE AND SALE AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION OF PURCHASE AND SALE AGREEMENT
("Assignment") is dated as of September 23, 1998, by and between Crow
PaineWebber LaJolla Limited Partnership ("Seller"), R&B Westside, Inc. ("R&B"),
Sherman Oaks Holding Company, LLC ("Sherman Oaks LLC"), and Westside Holding
Company, LLC ("Westside LLC").
RECITALS
A. Seller and R&B entered into that certain Purchase and Sale Agreement
(the "Agreement") dated as of July 10, 1998.
B. Paragraph 12.1 of the Agreement permits R&B to elect Sherman Oaks
Country Club Apartments, a California limited partnership (the "Partnership"),
or an affiliate entity controlled by or under common control with the
Partnership as R&B's nominee to purchase that certain real property located in
San Diego County, California, as more particularly described in the Agreement
(the "Property").
C. R&B desires to assign its rights, title and interest in the Agreement to
Sherman Oaks LLC and Westside LLC, as their interest may appear, pursuant to
paragraph 12.1 of the Agreement.
D. The sole member of Sherman Oaks LLC is Sherman Oaks Member company, LLC,
a Washington limited liability company, whole member is the Partnership, and the
sole member of Westside LLC is Westside Member Company, LLC whole member is R&B.
The shareholders of R&B are the same as some of the general partners of the
Partnership
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, Seller, R&B, Sherman Oaks LLC and Westside LLC agree as
follows:
1. R&B shall assign by separate agreement its rights, title and interest
in the Agreement to Sherman Oaks LLC and Westside LLC.
2. Seller consents to the assignment of the Agreement by R&B to Sherman
Oaks LLC and Westside LLC.
3. Sherman Oaks LLC and Westside LLC shall assume all of R&B's obligation
as buyer under the Agreement.
4. In accordance with the provisions of Section 12.1 of the Agreement, the
designation of Sherman Oaks LLC and Westside LLC, as buyer of the Property,
shall not release R&B from its obligations under the Agreement.
5. This Agreement may be executed in any number of counterparts, which
together constitute one original instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first stated above.
SELLER: CROW PAINEWEBBER LA JOLLA LIMITED
PARTNERSHIP, a Texas limited partnership
By: PaineWebber Equity Partners One Limited
Partnership, its General Partner
By: First Equity Partners, Inc., its
General Partner
By: /s/ Richard C. Coomber
-----------------------
Richard C. Coomber
Vice President
R&B R&B WESTSIDE, INC., a California corporation
By: /s/ Darby T. Keen
-----------------
Darby T. Keen
President
By: /s/ N. Christopher Cheatum
-----------------------
N. Christopher Cheatum
Vice President
SIGNATURES CONTINUE ON NEXT PAGE
<PAGE>
SHERMAN OAKS LLC: SHERMAN OAKS HOLDING COMPANY,
LLC, a Washington limited liability company
By: Sherman Oaks Member Company, LLC,
a Washington limited liability company
Its Member
By: Sherman Oaks Country Club
Apartments, a California limited
partnership
Its Member
By: Howard F. Ruby, Trustee of
The Howard F. Ruby Trust, u/a
dated September 5, 1978
Its General Partner
By: /s/ Howard F. Ruby Trustee
--------------------------
/s/ Darby T. Keen
Darby T. Keen,
Attorney-in-fact for
Howard F. Ruby, Trustee
By: /s/ Howard F. Ruby Trustee
--------------------------
/s/ Gary C. Grubbs
Gary C. Grubbs
Attorney-in-fact for
Howard F. Ruby, Trustee
By: Edward R. Broida,
Trustee of
The Edward R. Broida Trust
No. 1, u/s dated April 2,
1976, as amended
Its General Partner
By: /s/ James B. Bertles
--------------------
James B. Bertles
Attorney-in-fact for
Edward R. Broida, Trustee
<PAGE>
WESTSIDE LLC: WESTSIDE HOLDING COMPANY, LLC,
a Washington limited liability company
By: Westside Member Company, LLC,
a Washington limited liability company
Its Member
By: R&B Westside Inc., a
California corporation
Its Member
By: /s/ Darby T. Keen
-----------------
Darby T. Keen,
President
By: /s/ N. Christopher Cheatum
--------------------------
N. Christopher Cheatum,
Vice President
<PAGE>
MONTERRA APARTMENTS
BILL OF SALE AND GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS BILL OF SALE AND GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT (this
"Agreement"), is made as of the 1st day of October, 1998 by and from CROW
PAINEWEBBER LA JOLLA LIMITED PARTNERSHIP, a Texas limited partnership, with an
address c/o PaineWebber Properties Incorporated, 265 Franklin Street, 15th
Floor, Boston, Massachusetts 02110 ("Assignor"), to and for the benefit of
SHERMAN OAKS HOLDING COMPANY, LLC, a Washington limited liability company, and
WESTSIDE HOLDING COMPANY, LLC, a Washington limited liability company, both
having an address c/o R&B Realty Group, 2222 Corinth Avenue, Los Angeles,
California 90064 (collectively, as tenants-in-common, "Assignee").
R E C I T A L S
Pursuant to the terms of a certain Purchase and Sale Agreement dated as of
July 10, 1998 by and among, Assignor, as seller, and R&B Westside, Inc. ("R&B"),
as buyer, which Purchase and Sale Agreement has been assigned by R&B to Assignee
pursuant to that certain Assignment of Purchase and Sale Agreement, dated of
even date herewith (as so assigned, the "Purchase and Sale Agreement"), Assignee
is, by deed of even date, today acquiring from Assignor all of Assignor's
interest in, and rights with respect to, the property known as The Monterra
Apartments, being that certain parcel of land, together with the buildings and
other improvements located thereon, located in San Diego, California, as more
particularly described in Exhibit A attached hereto (collectively, the
"Property").
NOW THEREFORE, in consideration of such transfer, the conveyance of all of
Assignor's interest in, and rights with respect to, the Property by Assignor to
Assignee, and other valuable consideration, the receipt and sufficiency of which
are hereby mutually acknowledged, the parties agree as follows:
A G R E E M E N T
1. Sale of Assigned Property. Assignor hereby sells, transfers, assigns,
delivers, sets-over and conveys to Assignee, its successors and assigns forever,
all of Assignor's right, title and interest in and to all personal property
owned by Assignor and installed, located at or otherwise used in connection with
the development, ownership, leasing, financing, improvement, operation or
maintenance of the Property, regardless of where such personal property may be
located, including, without limitation: (i) all tangible personal property
relating to the Property, including, without limitation, the tangible personal
property described on Exhibit B attached hereto, if any, and (ii) all intangible
personal property or other assets relating to the Property and the conduct of
Assignor's business thereon, including, without limitation all of Assignor's
right, title and interest in all (a) warranties relating to the Property in
Seller's possession, including, without limitation, the warranties listed on
Exhibit C attached hereto, if any, (b) all consents, authorizations, variances,
waivers, licenses, permits, certificates and approvals from any governmental
authority with respect to the Property, (collectively, the "Permits"), (c) all
logos and trade names currently used in the operation of the Property
(including, without limitation, the right to the name "Monterra Apartments,")
and (d) all plans and specifications relating to the Property in Seller's
possession, in each case to the extent that the Assignor may legally transfer
the same (collectively, the "Assigned Property").
2. Power and Authority. Assignor represents and warrants to Assignee that it is
fully empowered and authorized to execute and deliver this Agreement, and the
individuals signing this Agreement on behalf of Assignor each represents and
warrants to Assignee that he or she is fully empowered and authorized to do so.
3. As Is. ASSIGNOR MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR PURPOSE
IN RESPECT OF THE ASSIGNED PROPERTY, AND THE SAME IS SOLD IN AN "AS IS, WHERE
IS" CONDITION, WITH ALL FAULTS. BY ACCEPTANCE OF DELIVERY ASSIGNEE AFFIRMS THAT
ASSIGNEE HAS INSPECTED THE ASSIGNED PROPERTY AND IS SATISFIED WITH ITS
CONDITION, AND THAT IT HAS NOT RELIED ON ASSIGNOR'S SKILL OR JUDGMENT TO SELECT
OR FURNISH THE ASSIGNED PROPERTY FOR ANY PARTICULAR PURPOSE, AND THAT ASSIGNOR
MAKES NO WARRANTY THAT THE ASSIGNED PROPERTY IS FIT FOR ANY PARTICULAR PURPOSE
AND THAT THERE ARE NO REPRESENTATIONS AND WARRANTIES, EXPRESSED, IMPLIED, OR
STATUTORY WITH RESPECT THERETO.
4. Assumption. By execution of this Agreement, Assignee hereby accepts the
assignment of the Assigned Property and, subject to the terms of this Agreement,
assumes and agrees to perform all of Assignor's obligations as owner of the
Property under the Assigned Property, if any, first arising after the date
hereof.
5. Intentionally omitted.
<PAGE>
6. Further Assurances. Assignor agrees, at its own expense, upon the reasonable
request of Assignee, to make, execute and deliver any and all documents or
instruments of any kind, to perform all such other conditions that may be
necessary or proper and reasonable to effectuate, confirm, perform or carry out
the terms and provisions of this Agreement.
7. Counterparts. This Agreement may be executed in any number of counterparts
and it shall be sufficient that the signature of each party appear on one or
more such counterparts. All counterparts shall collectively constitute a single
agreement.
8. Governing Law. This Agreement shall be governed by the laws of the State of
California and shall be binding upon and inure to the benefit of Assignor and
Assignee and their respective successors and assigns.
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Agreement the day and year first above written.
ASSIGNOR:
CROW PAINEWEBBER LA JOLLA LIMITED
PARTNERSHIP, a Texas limited partnership
By: PaineWebber Equity Partners One
Limited Partnership, general partner
By: First Equity Partners, Inc.,
its general partner
By: /s/Richard C. Coomber
-----------------------
Richard C. Coomber
Vice President
SIGNATURES CONTINUE ON NEXT PAGE
<PAGE>
ASSIGNEE (as tenants-in-common):
SHERMAN OAKS HOLDING COMPANY, LLC,
a Washington limited liability company
By: Sherman Oaks Member Company, LLC,
a Washington limited liability company
Its Member
By: Sherman Oaks Country Club Apartments,
a California limited partnership
Its Member
By: Howard F. Ruby, Trustee of The
Howard F. Ruby Trust, u/a
dated September 5, 1978
Its General Partner
By: /s/ Gary C. Grubbs
------------------
Gary C. Grubbs,
Attorney-in-fact for
Howard F. Ruby, Trustee
By: /s/ Darby T. Keen
-----------------
Darby T. Keen,
Attorney-in-fact for
Howard F. Ruby, Trustee
By: Edward R. Broida, Trustee of
The Edward R. Broida Trust,
u/a dated April 2, 1976
Its General Partner
By: /s/ James B. Bertles
--------------------
James B. Bertles,
Attorney-in-fact for
Edward R. Broida, Trustee
and
WESTSIDE HOLDING COMPANY, LLC,
a Washington limited liability company
By: Westside Member Company, LLC,
a Washington limited liability company
Its Member
By: R&B Westside, Inc.,
a California corporation
Its Member
By: /s/ Darby T. Keen
-----------------
Darby T. Keen,
President
By: /s/ Christopher Cheatum
-----------------------
Christopher Cheatum,
Vice President
<PAGE>
CHICAGO TITLE COMPANY
SELLER'S SETTLEMENT STATEMENT
ESCROW NUMBER: 05660-008151304-001 ORDER NUMBER: 05660-008151304
CLOSING DATE: 10/1/98 CLOSER: ROSE MARTINEZ
BUYER: WESTSIDE HOLDING COMPANY, LLC
SECURITY TRUST COMPANY INTERMEDIARY FOR
SHERMAN OAKS HOLDING COMPANY, LLC
SELLER: CROW PAINEWEBBER LA JOLLA LIMITED PARTNERSHIP
PROPERTY: THE MONTERRA APARTMENTS, SAN DIEGO, CA
CHARGE SELLER CREDIT SELLER
------------- -------------
Sales Price: $ $20,100,000.00
Loan Payoff to THE PRUDENTIAL
INSURANCE CO OF AMERICA 4,653,322.62
Recon/Release Fee 65.00
Pre-Payment Fee 499,643.00
RECORDING FEE 9.00
INTEREST TO 10/1/98 17,475.81
INTEREST FOR 10/1/98 1,092.24
CLTA PORTION OF OWNERS POLICY 11,658.00
DOCUMENTARY TRANSFER TAX 22,110.00
RECORDING RECONVEYANCE (APPROX) 50.00
GRUBB & ELLIS/COMMISSIONS 256,000.00
RELEASED TO SELLER ON 7/10/98 100,000.00
RELEASED TO SELLER ON 9/23/98 350,000.00
1/2ESCROW FEE 3,200.00
PROCESSING PAYOFF 65.00
GOODWIN, PROCTER & HOAR 12,800.00
Prorations and Adjustments
INTEREST EARNED 2,308.79
County Taxes from 7/1/98 to 9/30/98 37,631.00
PREPAID RENTS 955.00
SECURITY DEPOSITS 77,996.00
CREDIT TO SELLER FROM BUYER 295,000.00
Funds Due to Seller at Closing 14,353,236.12
-------------- --------------
TOTALS $20,397,308.79 $20,397,308.79
============== ==============
