FORM 8-K - CURRENT REPORT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 19, 1999
ANGELES INCOME PROPERTIES, LTD. 6
(Exact name of registrant as specified in its charter)
California 0-16210 95-4106139
(State or other jurisdiction (Commission (I.R.S. Employer
incorporation) File Number) Identification Number)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(Registrant's telephone number)
(864) 239-1000
N/A
(Former name or former address, if changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
The Registrant sold one of its investment properties located in Mesa, Arizona on
February 19, 1999. Mesa Dunes Mobile Home Park was sold to Mesa Dunes MHC
Investors, LLC, the majority interest holder, and nine additional investors, all
unrelated parties, for $9,500,000.
The net proceeds of the sale were used to pay off the mortgage indebtedness. The
Registrant is evaluating the feasibility of a distribution of the remaining
proceeds from the sale.
Pro forma financial information will be provided in the Registrant's Form 10-
KSB for the year ended December 31, 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
10.21 Contract of Sale between Registrant and Matthew N. Follett, L.P.,
effective September 8, 1998.
10.22 Reinstatement and Amendment to Contract of Sale between Registrant
and Matthew N. Follett, L.P., effective December 14, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ANGELES INCOME PROPERTIES, LTD. 6
By: Angeles Realty Corporation II
Its General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
Date: March 8, 1999
CONTRACT OF SALE
THIS CONTRACT OF SALE (this "Contract") is made and entered into as of the
Effective Date (as defined in Section 13.13 hereof) by and between ANGELES
INCOME PROPERTIES, LTD.6, a California limited partnership ("Seller"), and
MATTHEW N. FOLLETT ("Purchaser").
ARTICLE I.
SALE OF THE PROPERTY
1.1 Property. For the consideration and upon and subject to the terms,
provisions and conditions of this Contract, Seller agrees to sell to Purchaser,
and Purchaser agrees to purchase from Seller, Seller's respective rights, titles
and interests in and to all of the following described property (collectively,
the "Property"):
(a) All of Seller's rights, titles and interests in and to that certain
tract or parcel of land (the "Land") located in Mesa, Arizona, commonly
referred to as the Mesa Dunes Mobile Home Park, more particularly described on
Exhibit A attached hereto and made a part hereof for all purposes, together with
all improvements, structures and fixtures owned by Seller, if any, which are
located on the Land (the "Improvements"), and all rights, titles and interests
of Seller appurtenant to the Land and Improvements, including, without
limitation, appurtenant easements, adjacent roads, highways and rights-of-way;
(b) All tangible personal property of any kind (the "Personalty") owned by
Seller and attached to or located on the Land or Improvements including, without
limitation, all Seller Owned Mobile Homes (as hereinafter defined);
(c) All of Seller's rights, titles and interests under any leases or other
agreements demising lots for the parking of mobile homes and associated use or
occupancy of the Improvements or Land (the "Tenant Leases"), and all unapplied
deposits, whether security or otherwise ("Deposits"), paid by tenants
("Tenants") under the Tenant Leases; and
(d) All of Seller's rights, titles and interests in and to all service
contracts, warranties, guaranties and bonds in effect at Closing relating to the
Land, the Improvements or the Personalty, to the extent the same are assignable
(the "Contracts").
The Land and Improvements are used for the operation of a mobile home park.
Except for those listed on Schedule 1.1 hereto (the "Seller Owned Mobile
Homes"), if any, none of the mobile homes located on the Land will be conveyed
to Purchaser.
ARTICLE II.
PURCHASE PRICE
2.1 Purchase Price. The total Purchase Price (herein so called) to be
paid by Purchaser to Seller for the Property shall be an amount equal to Eleven
Million One Hundred Sixty Thousand and No/100 Dollars ($11,160,000.00). The
Purchase Price shall be payable in cash or Current Funds (defined below) at the
Closing (hereinafter defined).
ARTICLE III.
EARNEST MONEY DEPOSIT
3.1 Amount and Timing. Within two (2) business days after the Effective
Date (hereinafter defined), Purchaser shall deliver to First American Title
Insurance Company, located at 3200 E. Camelback Road, Suite 105, Phoenix,
Arizona 85018 (the "Title Company"), One Hundred Thousand Dollars ($100,000.00)
(the "Earnest Money Deposit") in cash or Current Funds, to be held by the Title
Company in escrow to be applied or disposed of by the Title Company as is
provided in this Contract. In the event Purchaser fails to deposit the Earnest
Money Deposit with the Title Company as herein provided, this Contract shall
automatically terminate, and neither Seller nor Purchaser shall have any further
obligations hereunder except for provisions of this Contract which expressly
survive the termination of this Contract. As used in this Contract, the term
"Current Funds" shall mean wire transfers, certified funds or a cashier's check
in a form acceptable to the Title Company which would permit the Title Company
to immediately disburse such funds.
3.2 Application and Interest. If the purchase and sale hereunder is
consummated, then the Earnest Money Deposit shall be applied to the Purchase
Price at Closing. In all other events, the Earnest Money Deposit shall be
disposed of by the Title Company as provided in this Contract. The Earnest
Money Deposit shall be invested in an interest-bearing account with a financial
institution and in a manner reasonably acceptable to Purchaser. All interest
earned on the Earnest Money Deposit is part of the Earnest Money Deposit, to be
applied or disposed of in the same manner as the Earnest Money Deposit under
this Contract.
ARTICLE IV.
TITLE AND SURVEY
4.1 Title Commitment. Not later than fifteen (15) days after the
Effective Date, Seller shall cause to be furnished to Purchaser, a current ALTA
Commitment for Title Insurance for the Land and Improvements (the "Title
Commitment") issued by the Title Company. The Title Commitment shall set forth
the state of title to the Land and Improvements, including a list of conditions
or exceptions to title affecting the Land and Improvements that would appear in
an Owner's Policy of Title Insurance, if one were issued. The Title Commitment
shall contain the expressed commitment of the Title Company to issue the Title
Policy (hereinafter defined) to Purchaser in the amount of the Purchase Price,
insuring the title to the Land and Improvements specified in the Title
Commitment. At such time as the Title Commitment is furnished to Purchaser, the
Title Company also shall furnish to Purchaser copies of instruments or documents
(the "Exception Documents") that create or evidence conditions or exceptions to
title affecting the Land and Improvements, as described in the Title Commitment.
4.2 Survey. Not later than fifteen (15) days after the Effective Date,
Seller shall provide to Purchaser a copy of the latest survey of the Land and
Improvements (the "Survey") in Seller's possession. If Seller's Survey is not
satisfactory to Purchaser or the Title Company then Purchaser shall pay the cost
to prepare a survey of the Land and Improvements that is otherwise sufficient
for Purchaser and the Title Company, and that is certified to Seller, Purchaser
and the Title Company.
4.3 Review of Title and Survey. Purchaser shall have until fifteen (15)
days after receipt of the last of the Title Commitment, Exception Documents, and
Survey in which to notify Seller in writing (the "Title Objection Notice") of
any objections Purchaser has to any matters shown or referred to in the Title
Commitment, the Exception Documents or on the Survey; provided, that Purchaser
shall not object to current real estate taxes and assessments or to easements,
restrictions and exceptions affecting the Property which do not materially and
adversely affect the value of the Property or its current use by Seller, all of
which shall be Permitted Exceptions hereunder. Any title encumbrances,
exceptions or other matters which are set forth in the Title Commitment, the
Exception Documents or on the Survey, and to which Purchaser does not object
within the aforementioned ten (10) day period, shall be deemed to be permitted
exceptions to the status of Seller's title (such encumbrances, exceptions or
other matters, together with such other matters included pursuant to other
provisions of this Contract, shall be referred to as the "Permitted
Exceptions").
4.4 Objections to Status of Title and Survey. If Purchaser properly
objects to any item shown or referred to in the Title Commitment, Exception
Documents or Survey within the fifteen (15) day period set forth in Section 4.3,
Seller shall be given until fifteen (15) days after receipt of the Title
Objection Notice to notify Purchaser whether or not Seller will cure, prior to
Closing and at Seller's option and sole discretion but without any obligation to
do so, any objection to the condition of title raised by Purchaser. If Seller
notifies Purchaser that it elects not to cure any such objections, then
Purchaser may, at its option exercisable within five (5) days following the
date of receipt by Purchaser of written notice from Seller stating that Seller
is unable or unwilling to cure such objections, either (a) accept such title as
Seller can deliver, in which case all exceptions to title set forth in the Title
Commitment, Exception Documents and Survey which are not removed shall be deemed
to be Permitted Exceptions, or (b) terminate this Contract by notice in writing
to Seller in which event the Title Company shall return the Earnest Money
Deposit to Purchaser and neither party shall have any further rights, duties or
obligations hereunder, except for provisions of this Contract which expressly
survive termination of this Contract. In the event Purchaser fails to notify
Seller, within such five (5) day period, that Purchaser has elected to proceed
under either subpart (a) or (b) of the immediately preceding sentence, Purchaser
shall be deemed to have elected to proceed under subpart (a), and this Contract
shall remain in full force and effect. If Seller notifies Purchaser that it
elects to cure any such objections but is unable to cure same by Closing or if
Seller fails to notify Purchaser of its intentions with respect to such
objections and fails to cure same by Closing, then Purchaser may, at its option,
either (x) accept such title as Seller can deliver in which case the parties
shall proceed with Closing and all exceptions to title set forth in the Title
Commitment, Exception Documents and Survey which are not removed shall be deemed
to be Permitted Exceptions, or (y) terminate this Contract by notice in writing
to Seller at Closing, in which event the Title Company shall return the Earnest
Money Deposit to Purchaser and neither party shall have any further rights,
duties or obligations hereunder except for provisions of this Contract which
expressly survive termination of this Contract.
4.5 Other Permitted Exceptions. The Permitted Exceptions shall include
those matters shown in the Title Commitment and the Survey which become
Permitted Exceptions pursuant to sections 4.3 and 4.4 above and, in addition,
the following: (a) the Tenant Leases to the extent shown on a rent roll
delivered by Seller to Purchaser at Closing and certified as of date not more
than five (5) business days prior to the Closing Date (the "Closing Rent Roll");
(b) taxes and assessments for the year in which Closing occurs and subsequent
years; (c) liens and encumbrances arising after the date hereof to which
Purchaser consents in writing; and (d) any liens or encumbrances of a definite
or ascertainable amount not exceeding $50,000.00, provided that (i) Seller
causes such liens or encumbrances to be insured or bonded around such that same
do not appear as an exception in the Title Policy issued to Purchaser pursuant
to the Commitment, and (ii) Seller agrees to indemnify Purchaser from all losses
incurred by Purchaser as a result of such liens or encumbrances.
ARTICLE V.
INSPECTION BY PURCHASER
5.1 Inspection Period. Purchaser shall have a period of time commencing
on the Effective Date and expiring at 5:00 p.m., Mesa, Arizona, time on the
thirtieth (30th) day thereafter (the "Inspection Period") within which to
examine the Property and to conduct its feasibility study thereof. The
Inspection Period shall be inclusive of the Effective Date. Seller agrees that,
during the Inspection Period, Seller will allow Purchaser and Purchaser's agents
access to the Property during normal business hours to conduct soil and
engineering, hazardous waste, marketing, feasibility, zoning and other studies
or tests and to otherwise determine the feasibility of the Property for
Purchaser's intended use. Notwithstanding the foregoing, (a) the costs and
expenses of Purchaser's investigation shall be borne solely by Purchaser, (b)
prior to the expiration of the Inspection Period, Purchaser shall restore the
Property to the condition which existed prior to Purchaser's entry thereon and
investigation thereof to the extent the condition of the Property was affected
by or as a result of the actions of Purchaser or its agents, contractors or
representatives, (c) Purchaser shall not interfere, interrupt or disrupt the
operation of Seller's business on the Property and, further, such access by
Purchaser and/or its agents shall be subject to the rights of Tenants under
Tenant Leases, (d) in the event the transaction contemplated by this Contract
does not close for any reason, Purchaser shall deliver to Seller a descriptive
listing of all tests, reports and inspections conducted by Purchaser with
respect to the Property and deliver copies thereof to Seller, (e) Purchaser
shall not permit any mechanic's or materialman's liens or any other liens to
attach to the Property by reason of the performance of any work or the purchase
of any materials by Purchaser or any other party in connection with any studies
or tests conducted pursuant to this Section 5.1, (f) Purchaser shall give notice
to Seller a reasonable time prior to entry onto the Property and shall permit
Seller to have a representative present during all investigations and
inspections conducted with respect to the Property, and (g) Purchaser shall take
all reasonable actions and implement all protections necessary to ensure that
all actions taken in connection with the investigations and inspections of the
Property, and all equipment, materials and substances generated, used or brought
onto the Property pose no material threat to the safety of persons or the
environment and cause no damage to the Property or other property of Seller or
other persons. This Contract, the terms and conditions of this Contract, and
all information made available by Seller to Purchaser in accordance with this
Contract or obtained by Purchaser in the course of its investigations shall be
treated as confidential information by Purchaser, and, prior to the purchase of
the Property by Purchaser, Purchaser shall prevent its agents and employees from
divulging such information to any third parties except as reasonably necessary
to third parties engaged by Purchaser for the limited purpose of analyzing and
investigating such information for the purpose of consummating the transaction
contemplated by this Contract, including Purchaser's attorneys and
representatives, prospective lenders and engineers. Purchaser shall indemnify,
defend and hold Seller harmless for, from and against any claims, liabilities,
causes of action, damages, liens, losses, costs and expenses (including, without
limitation, attorneys' fees) incident to, resulting from or in any way arising
out of any of Purchaser's and its agents', contractors' and representatives'
activities on the Property, including, without limitation, any tests or
inspections conducted by Purchaser or its agents, contractors or representatives
on the Property. The agreements contained in this Section 5.1 shall survive the
Closing and not be merged therein and shall also survive any termination of this
Contract.
5.2 Approval of Inspections. If Purchaser determines prior to the
expiration of the Inspection Period, that the Property is not satisfactory to
Purchaser, then Purchaser may deliver written notice of such determination to
Seller within such Inspection Period, given in accordance with the provisions of
Section 13.1 hereof, stating that Purchaser is not satisfied with the condition
of the Property, in which event the Title Company shall return the Earnest Money
Deposit to Purchaser and neither party shall have any further rights or
liabilities hereunder, except for provisions of this Contract which expressly
survive termination of this Contract. If Purchaser does not timely deliver
written notice of termination within such Inspection Period, the conditions of
this Section 5.2 shall be deemed satisfied, and Purchaser shall be deemed to
have approved the condition of the Property and may not thereafter terminate
this Contract pursuant to this Section 5.2.
5.3 Matters to be Delivered by Seller. No later than ten (10) days from
the Effective Date, Seller shall deliver to Purchaser the following items
(collectively, the "Submission Matters"):
(a) A current rent roll for the Property;
(b) A copy of the form used for Tenant Leases with respect to the
Property, and a copy of any rules and regulations of the Mesa Dunes Mobile Home
Park;
(c) A current inventory of all material items of Personalty owned by
Seller and attached to or located on the Land or Improvements;
(d) Copies of any and all service, maintenance, management or other
contracts in Seller's possession relating to the ownership and operation of the
Property;
(e) Copies of the real estate and personal property tax statements for the
years 1996, 1997 and 1998, if the same are in Seller's possession with respect
to the Property;
(f) Any environmental studies (including, without limitation, the GLCD
Survey described in Section 5.4 hereof) regarding the Property which Seller has
in its possession; provided, that the GLCD Survey does not need to be sent to
Purchaser until five (5) business days after the Seller has received the same;
(g) Copies of the most recent electricity and water bills for the
Property; and
(h) Unaudited operating statements with respect to Seller's operation of
the Property for the calendar year 1997 and year-to-date through July 1998.
5.4 Gas Leak Detection. Prior to the end of the Inspection Period, Seller
will cause a gas leak detection and cathodic protection survey (the "GLCD
Survey") to be performed with respect to the Property by a licensed contractor
and, prior to Closing, Seller will cause to be repaired any detectable leaks to
the extent, and only to the extent, that the aggregate cost of such GLCD Survey
and leak repair does not exceed a total of Five Thousand and No/100 Dollars
($5,000.00). Seller will provide Purchaser with a copy of the GLCD survey not
later than five (5) business days after it receives same. So long as Seller has
performed its obligations under this Section 5.4, Purchaser agrees that it will,
at Closing, assume the risk of any and all gas leaks at the Property and any
other matters revealed by the GLCD Survey.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES; DISCLAIMERS AND WAIVERS
6.1 Representations and Warranties of Purchaser. Purchaser and each of
the persons executing this Contract on its behalf represents and warrants to
Seller as of the date hereof and as of the Closing Date as follows (which
representations and warranties shall survive Closing for a period of 180 days):
(a) Purchaser is an individual residing in the State of California; (b)
Purchaser has full right and authority to enter into this Contract and to
consummate the transactions contemplated herein; (c) each of the persons
executing this Contract on behalf of Purchaser is authorized to do so; and (d)
this Contract constitutes a valid and legally binding obligation of Purchaser,
enforceable in accordance with its terms.
6.2 Representations and Warranties of Seller. Seller represents and
warrants to Purchaser as of the date hereof and as of the Closing Date as
follows (which representations and warranties shall survive Closing for a period
of 180 days): (a) Seller is a limited partnership validly existing and duly
organized under the laws of the State of California; (b) Seller has full right
and authority to enter into this Contract and to consummate the transactions
contemplated herein; (c) each of the persons executing this Contract on behalf
of Seller is authorized to do so; (d) this Contract constitutes a valid and
legally binding obligation of Seller, enforceable in accordance with its terms;
(e) to Seller's current actual knowledge, except as disclosed in any of the
Submission Matters or other documents delivered to Purchaser, Seller has not
received written notice of any violation of any laws applicable to the Property
which is continuing as of the Effective Date; and (f) to Seller's current actual
knowledge, all Submission Matters delivered to Purchaser hereunder are true and
correct copies of such matters in Seller's possession.
As used herein, the term "Seller's current actual knowledge", or similar
terms and phrases, shall mean and refer to only the current actual knowledge of
the Designated Representative (as hereinafter defined) of the Seller and shall
not be construed to refer to the knowledge of any other partner, officer,
director, agent, employee or representative of the Seller, or any affiliate of
the Seller, or to impose upon such Designated Representative any duty to
investigate the matter to which such actual knowledge or the absence thereof
pertains, or to impose upon such Designated Representative any individual
personal liability. As used herein, the term "Designated Representative" shall
refer to Kenneth A. Cobler.
6.3 NO ADDITIONAL REPRESENTATIONS OR WARRANTIES OF SELLER. PURCHASER
ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY SPECIFIED IN SECTION 6.2 OF
THIS CONTRACT OR THE SPECIAL WARRANTY DEED TO BE DELIVERED AT CLOSING, SELLER
HAS NOT MADE, AND SELLER HEREBY SPECIFICALLY DISCLAIMS, ANY WARRANTY, GUARANTY
OR REPRESENTATION, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, OR
CONCERNING, (a) THE NATURE AND CONDITION OF THE PROPERTY, INCLUDING, WITHOUT
LIMITATION, THE WATER, SOIL AND GEOLOGY, AND THE SUITABILITY THEREOF AND OF THE
PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER MAY ELECT TO
CONDUCT THEREON; (b) THE EXISTENCE, NATURE AND EXTENT OF ANY RIGHT-OF-WAY,
LEASE, RIGHT TO POSSESSION OR USE, LIEN, ENCUMBRANCE, LICENSE, RESERVATION,
CONDITION OR OTHER MATTER AFFECTING TITLE TO THE PROPERTY; OR (c) WHETHER THE
USE OR OPERATION OF THE PROPERTY COMPLIES WITH ANY AND ALL LAWS, ORDINANCES OR
REGULATIONS OF ANY GOVERNMENT OR OTHER REGULATORY BODY. PURCHASER AGREES TO
ACCEPT THE PROPERTY AND ACKNOWLEDGES THAT THE SALE OF THE PROPERTY AS PROVIDED
FOR HEREIN IS MADE BY SELLER, ON AN "AS IS, WHERE IS, AND WITH ALL FAULTS"
BASIS. PURCHASER EXPRESSLY ACKNOWLEDGES THAT EXCEPT AS OTHERWISE EXPRESSLY
SPECIFIED IN SECTION 6.2 OF THIS CONTRACT AND EXCEPT FOR ANY WARRANTY OF TITLE
CONTAINED IN THE SPECIAL WARRANTY DEED TO BE DELIVERED BY SELLER TO PURCHASER AT
CLOSING, SELLER MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, ORAL OR
WRITTEN, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW, WITH RESPECT TO THE
PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO
HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE (OTHER
THAN SELLER'S WARRANTY OF TITLE TO BE SET FORTH IN THE SPECIAL WARRANTY DEED),
ZONING, TAX CONSEQUENCES, PHYSICAL OR ENVIRONMENTAL CONDITION, UTILITIES,
OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE
COMPLIANCE OF THE PREMISES WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR
COMPLETENESS OF ANY INFORMATION (INCLUDING, WITHOUT LIMITATION, THE SUBMISSION
MATTERS) PROVIDED BY OR ON BEHALF OF SELLER TO PURCHASER, OR ANY OTHER MATTER OR
THING REGARDING THE PROPERTY. PURCHASER ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY
SPECIFIED IN ANY WRITTEN INSTRUMENT DELIVERED BY SELLER TO PURCHASER, SELLER
MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, ORAL OR WRITTEN, EXPRESS OR
IMPLIED, OR ARISING BY OPERATION OF LAW REGARDING OR WITH RESPECT TO ANY SUCH
INFORMATION (INCLUDING, WITHOUT LIMITATION, THE SUBMISSION MATTERS) PROVIDED OR
TO BE PROVIDED BY SELLER REGARDING THE PROPERTY.
FURTHER, AND WITHOUT IN ANY WAY LIMITING ANY OTHER PROVISION OF THIS
CONTRACT, SELLER HAS MADE AND MAKES NO REPRESENTATION, WARRANTY OR GUARANTY, AND
HEREBY SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR
WRITTEN, PAST, PRESENT OR FUTURE, WITH RESPECT TO THE PRESENCE OR DISPOSAL ON OR
BENEATH THE PROPERTY (OR ANY PARCEL IN PROXIMITY THERETO) OF HAZARDOUS
SUBSTANCES OR MATERIALS WHICH ARE CATEGORIZED AS HAZARDOUS OR TOXIC UNDER ANY
LOCAL, STATE OR FEDERAL LAW, STATUTE, ORDINANCE, RULE OR REGULATION PERTAINING
TO ENVIRONMENTAL OR SUBSTANCE REGULATION, CONTAMINATION, CLEANUP OR DISCLOSURE
(INCLUDING, WITHOUT LIMITATION, ASBESTOS) AND SHALL HAVE NO LIABILITY TO
PURCHASER THEREFOR. WITHOUT LIMITATION OF THE PRECEDING SENTENCE, SELLER
SPECIFICALLY DISCLAIMS ANY REPRESENTATION, WARRANTY OR GUARANTY REGARDING THE
ACCURACY OF ANY ENVIRONMENTAL REPORTS WHICH MAY BE INCLUDED WITHIN THE
SUBMISSION MATTERS. BY ACCEPTANCE OF THIS CONTRACT AND THE SPECIAL WARRANTY DEED
TO BE DELIVERED BY SELLER AT THE CLOSING, PURCHASER ACKNOWLEDGES THAT
PURCHASER'S OPPORTUNITY FOR INSPECTION AND INVESTIGATION OF THE PROPERTY (AND
OTHER PARCELS IN PROXIMITY THERETO) WILL BE ADEQUATE TO ENABLE PURCHASER TO MAKE
PURCHASER'S OWN DETERMINATION WITH RESPECT TO THE PRESENCE OR DISPOSAL ON OR
BENEATH THE PROPERTY (AND OTHER PARCELS IN PROXIMITY THERETO) OF SUCH HAZARDOUS
SUBSTANCES OR MATERIALS, AND PURCHASER ACCEPTS THE RISK OF THE PRESENCE OR
DISPOSAL OF ANY SUCH SUBSTANCES OR MATERIALS. PURCHASER AGREES THAT SHOULD ANY
CLEANUP, REMEDIATION OR REMOVAL OF HAZARDOUS SUBSTANCES OR OTHER ENVIRONMENTAL
CONDITIONS ON THE PROPERTY BE REQUIRED AFTER THE DATE OF CLOSING, SUCH CLEAN-UP,
REMOVAL OR REMEDIATION SHALL BE THE RESPONSIBILITY OF AND SHALL BE PERFORMED AT
THE SOLE COST AND EXPENSE OF PURCHASER.
PURCHASER, AND ANYONE CLAIMING, BY, THROUGH OR UNDER PURCHASER, HEREBY
FULLY RELEASES, DISCHARGES, AND HOLDS HARMLESS SELLER, ITS EMPLOYEES, OFFICERS,
DIRECTORS, PARTNERS, REPRESENTATIVES AND AGENTS, AND THEIR RESPECTIVE PERSONAL
REPRESENTATIVES, HEIRS, SUCCESSORS AND ASSIGNS FROM ANY COST, LOSS, LIABILITY,
DAMAGE, EXPENSE, DEMAND, ACTION OR CAUSE OF ACTION ARISING FROM OR RELATED TO
ANY CONSTRUCTION DEFECTS, ERRORS, OMISSION, OR OTHER CONDITIONS AFFECTING THE
PROPERTY; PROVIDED, THAT THIS SHALL NOT RELEASE SELLER FROM CLAIMS ARISING, IF
ANY, AS A RESULT OF ANY WRITTEN REPRESENTATION OR WARRANTY OF SELLER BEING FALSE
WHEN MADE. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT THIS RELEASE SHALL BE
GIVEN FULL FORCE AND EFFECT ACCORDING TO EACH OF ITS EXPRESSED TERMS AND
PROVISIONS, INCLUDING, BUT NOT LIMITED TO, THOSE RELATING TO UNKNOWN AND
SUSPECTED CLAIMS, DAMAGES AND CAUSES OF ACTION. THIS COVENANT RELEASING SELLER
SHALL BE BINDING UPON PURCHASER, ITS PERSONAL REPRESENTATIVES, HEIRS, SUCCESSORS
AND ASSIGNS.
THE PROVISIONS OF THIS SECTION 6.3 (INCLUDING, WITHOUT LIMITATION, THE
WAIVER AND RELEASE OF CLAIMS CONTAINED HEREIN) SHALL SURVIVE THE CLOSING OR
EARLIER TERMINATION OF THIS CONTRACT.
6.4 No Reliance on Documents. Except as expressly stated in Section 6.2
hereof or in any written instrument delivered by Seller to Purchaser in
connection herewith, Seller makes no representation or warranty as to the truth,
accuracy or completeness of any materials, data or information (including,
without limitation, the Submission Matters) delivered by Seller to Purchaser in
connection with the transaction contemplated hereby. Purchaser acknowledges and
agrees that all materials, data and information (including, without limitation,
the Submission Matters) delivered by Seller to Purchaser in connection with the
transaction contemplated hereby are provided to Purchaser as a convenience only
and that any reliance on or use of such materials, data or information by
Purchaser shall be at the sole risk of Purchaser.
6.5 Effect of Disclaimers. Seller has informed and hereby does inform
Purchaser that the compensation to be paid to Seller for the Property has been
decreased to take into account that the Property is being sold subject to the
provisions of this Article VI.
ARTICLE VII.
CONDITIONS PRECEDENT TO PURCHASER'S AND
SELLER'S PERFORMANCE
7.1 Conditions to Purchaser's Obligations. Purchaser's obligation under
this Contract to purchase the Property is subject to the fulfillment of each of
the following conditions (any or all of which may be waived by Purchaser):
(a) The representations and warranties of Seller contained herein shall be
true, accurate and correct as of the Closing Date;
(b) Seller shall be ready, willing and able to deliver title to the
Property in accordance with the terms and conditions of this Contract; and
(c) Seller shall have delivered all the documents and other items required
pursuant to Section 8.2(a), and shall have performed, in all material respects,
all other covenants, undertakings and obligations, and complied with all
conditions required by this Contract to be performed or complied with by the
Seller at or prior to the Closing.
7.2 Conditions to Seller's Obligations. Seller's obligation under this
Contract to sell the Property to Purchaser is subject to the fulfillment of
each of the following conditions (all or any of which may be waived by Seller):
(a) the representations and warranties of Purchaser contained herein shall
be true, accurate and correct as of the Closing Date; and
(b) Purchaser shall have delivered the funds required hereunder and all
the documents to be executed by Purchaser set forth in Section 8.2(b) and shall
have performed, in all material respects, all other covenants, undertakings and
obligations, and complied with all conditions required by this Contract to be
performed or complied with by Purchaser at or prior to Closing.
ARTICLE VIII.
CLOSING
8.1 Time and Place. The consummation of the purchase and sale of the
Property (the "Closing") shall take place at the office of the Title Company (it
being contemplated that the Closing will occur by the delivery of Closing
documents into escrow with the Title Company) on the forty-fifth (45th) day
after the end of the Inspection Period, or at such earlier date and time as
Purchaser and Seller may mutually agree (the "Closing Date").
8.2 Items to be Delivered at the Closing.
(a) Seller. At the Closing, Seller shall deliver, or cause to be
delivered, to the Title Company, for recording or delivery to the Purchaser, as
applicable, each of the following items:
(i) A standard form ALTA Owner Policy of Title Insurance dated no earlier
than the date of the filing of the deed described in Section 8.2(a)(ii) hereof,
issued by the Title Company, and insuring Purchaser's title in the amount of the
Purchase Price, subject only to the Permitted Exceptions (the "Title Policy").
(ii) A Special Warranty Deed duly executed and acknowledged by Seller in
the form attached hereto as Exhibit B and made a part hereof for all purposes
(with such reasonable changes thereto as may be required by the Title Company in
order to convey the Land and Improvements in accordance with the laws of the
State of Arizona) sufficient to convey to Purchaser good and indefeasible title
to the Land and Improvements free and clear of all liens and encumbrances except
for the Permitted Exceptions.
(iii) An Assignment and Assumption of Leases (the "Assignment of
Leases") duly executed and acknowledged by Seller in the form attached hereto as
Exhibit C and made a part hereof for all purposes.
(iv) A Blanket Conveyance, Bill of Sale and Assignment ("Bill of Sale")
duly executed by Seller in the form attached hereto as Exhibit D and made a part
hereof for all purposes.
(v) Certificates of Title or other appropriate documents necessary to
transfer ownership of the Seller Owned Mobile Homes to Purchaser.
(vi) All original Tenant Leases that are in Seller's possession together
with letters addressed to the Tenants of the Property (the "Notice Letters") in
the form attached hereto as Exhibit F and made a part hereof for all purposes,
or in such other form as may be mutually agreed upon by Seller and Purchaser.
(vii) Original counterparts of all service contracts that are in
Seller's possession and which are to be assumed by Purchaser.
(viii) A Non-Foreign Affidavit in the form attached hereto as Exhibit E
and made a part hereof for all purposes.
(ix) All amounts owing to Purchaser by Seller under Article IX hereof.
(x) Evidence satisfactory to Purchaser and the Title Company that the
person or persons executing this Contract and the closing documents on behalf of
Seller have full right, power and authority to do so.
(xi) A rent roll prepared with respect to the Property in the form normally
prepared by Seller which shall be certified, to Seller's knowledge, as being
true and correct in all material respects as of a date not more than ten (10)
business days prior to Closing.
(xii) Other items reasonably requested by the Title Company for the
sale of the Property in accordance with this Contract or for administrative
requirements for consummating the Closing.
(b) Purchaser. At the Closing, Purchaser shall deliver to the Title
Company, for recording or delivery to Seller, as applicable, each of the
following items:
(i) The Purchase Price in Current Funds.
(ii) The Assignment of Leases, duly executed and acknowledged by
Purchaser.
(iii) The Bill of Sale, duly executed by Purchaser.
(iv) Such additional funds in cash or Current Funds, as may be necessary
to cover Purchaser's share of the closing costs and prorations hereunder.
(v) Evidence satisfactory to Seller and the Title Company that the person
or persons executing this Contract and the closing documents on behalf of
Purchaser have full right, power and authority to do so.
(vi) The Notice Letters duly executed by Purchaser.
(vii) Other items reasonably requested by the Title Company for the
sale of the Property in accordance with this Contract or for administrative
requirements for consummating the Closing.
8.3 Costs of Closing. Except as otherwise herein provided, the escrow
fees of the Title Company, any and all recording costs, documentary stamp taxes,
deed taxes, transfer taxes or other similar taxes, fees or assessments, and any
and all premiums and other costs relating to the Title Policy shall all be paid
equally by Seller and Purchaser. Purchaser shall pay (i) any and all costs and
expenses (including, without limitation, recording costs, loan fees, attorneys'
fees, title insurance premiums, documentary or stamp taxes, transfer taxes,
intangible taxes, mortgage taxes or other similar taxes, fees or assessments)
relating to or incurred in connection with any loans or other financing obtained
by the Purchaser in connection with its purchase of the Property, and (ii) the
cost of obtaining any endorsements or extended or additional coverage with
respect to the Title Policy to be delivered to Purchaser at Closing. All other
expenses incurred by Seller and Purchaser with respect to the Closing,
including, but not limited to, the attorneys' fees and costs and expenses
incurred in connection with negotiating, preparing and closing the transaction
contemplated by this Contract, shall be borne and paid exclusively by the party
incurring same, unless otherwise expressly provided in this Contract.
8.4 Prorations. All normal and customarily proratable items, including,
without limitation, rents, operating expenses and leasing commissions, other
expenses and fees, and payments relating to any agreements affecting the
Property which survive the Closing, shall be prorated as of the Closing Date,
Seller being charged and credited for all of same attributable to the period up
to the Closing Date (and credited for any amounts paid by Seller attributable to
the period on or after the Closing Date) and Purchaser being responsible for,
and credited or charged, as the case may be, for all of same attributable to the
period on and after the Closing Date. All accrued pass-on or pass-through
charges which are payable under the Tenant Leases but are unpaid as of Closing
(the "Accrued Pass Through Charges") shall be assigned to Purchaser without any
representation, warranty or recourse whatsoever; provided, that Purchaser shall
pay to Seller at Closing an amount equal to the aggregate amount of all such
Accrued Pass-Through Charges. All unapplied Deposits under Tenant Leases in the
possession of Seller, if any, shall be transferred by Seller to Purchaser at the
Closing. Any real estate ad valorem or similar taxes for the Property, or any
installment of assessments payable in installments which installment is payable
in the year of Closing, shall be prorated to the date of Closing, based upon
actual days involved. In connection with the proration of real property taxes
or installments of assessments, such proration shall be based upon the assessed
valuation and tax rate figures for the year in which the Closing occurs to the
extent the same are available; provided, that in the event that actual figures
(whether for the assessed value of the Property or for the tax rate) for the
year of Closing are not available at the Closing Date, the proration shall be
made using figures from the preceding year for the figures which are unavailable
for the year of Closing. The proration shall be final and unadjustable except
as provided in the following paragraph. The provisions of this Section 8.4
shall survive the Closing.
If any of the items subject to proration under the foregoing provisions of
this Section 8.4 cannot be prorated at the Closing because of the unavailability
of the information necessary to compute such proration, or if any errors or
omissions in computing prorations at the Closing are discovered subsequent to
the Closing, then such item shall be reapportioned and such errors and omissions
corrected as soon as practicable after the Closing Date and the proper party
reimbursed, which obligation shall survive the Closing for a period (the
"Proration Period") from the Closing Date until the later of (a) one hundred
twenty (120) days after the Closing Date, or (b) December 31, 1998. Neither
party hereto shall have the right to require a recomputation of a Closing
proration or a correction of an error or omission in a Closing proration unless
within the Proration Period one of the parties hereto (i) has obtained the
previously unavailable information or has discovered the error or omission, and
(ii) has given notice thereof to the other party together with a copy of its
good faith recomputation of the proration and copies of all substantiating
information used in such recomputation. The failure of a party to obtain any
previously unavailable information or discover an error or omission with respect
to an item subject to proration hereunder and to give notice thereof as provided
above within the Proration Period shall be deemed a waiver of its right to cause
a recomputation or a correction of an error or omission with respect to such
item after the Closing Date.
8.5 Possession and Closing. Possession of the Property shall be delivered
to Purchaser by Seller at the Closing, subject to the Permitted Exceptions and
the rights of the Tenants. Purchaser shall make its own arrangements for the
provision of public utilities to the Property and Seller shall terminate its
contracts with such utility companies that provide services to the Property.
8.6 Delinquent Rent.
(a) Application of Delinquent Rent. If on the Closing Date any Tenant is
in arrears in the payment of any rent under any Tenant Lease (the "Delinquent
Rent") payable by it, any Delinquent Rent received by Purchaser and Seller from
such Tenant after the Closing shall be applied to amounts due and payable by
such Tenant during the following periods in the following order of priority: (A)
first, to the period of time on or after the Closing Date, and (B) second, to
the period of time before the Closing Date. If Delinquent Rent or any portion
thereof received by Seller or Purchaser before the Closing are due and payable
to the other party by reason of this allocation, the appropriate sum, less a
proportionate share of any reasonable attorneys' fees and costs and expenses
expended in connection with the collection thereof, shall be promptly paid to
the other party. The provisions of this Section 8.6(a) shall survive the
Closing.
(b) Collection of Delinquent Rent. After the Closing, Seller shall
continue to have the right, in its own name, to demand payment of and to collect
Delinquent Rent owed to Seller by any Tenant, which right shall include, without
limitation, the right to continue or commence legal actions or proceedings
against any Tenant, and the delivery of the Assignment of Leases [as defined in
Section 8.2(a)(iii)] shall not constitute a waiver by Seller of such right.
Purchaser agrees to cooperate with Seller in connection with all efforts by
Seller to collection such Delinquent Rent and to take all steps, whether before
or after the Closing Date, as may be necessary to carry out the intention of the
foregoing, including, without limitation, the delivery to Seller, upon demand,
of any relevant books and records (including, without limitation, rent
statements, receipted bills and copies of tenant checks used in payment of such
rent), the execution of any and all consents or other documents, and the
undertaking of any act reasonably necessary for the collection of such
Delinquent Rent by Seller. The provisions of this Section 8.6(b) shall survive
the Closing.
ARTICLE IX.
CONDEMNATION OR CASUALTY
9.1 Condemnation.
(a) In the event that all or any substantial portion of the Property is
condemned or taken by eminent domain or conveyed by deed in lieu thereof, or if
any condemnation proceeding is commenced for all or any substantial portion of
the Property, prior to Closing, Purchaser may elect to terminate this Contract
by written notice thereof to the Seller within ten (10) days after Seller
notifies Purchaser of the condemnation, taking or deed in lieu or institution of
such condemnation proceeding. If Purchaser does not terminate this Contract as
aforesaid, then both parties shall proceed to close the transaction contemplated
herein pursuant to the terms hereof, in which event Seller shall deliver to
Purchaser at the Closing any proceeds actually received by Seller attributable
to the Property from such condemnation, eminent domain proceeding or deed in
lieu thereof or assign its interest in and to any such proceeds, and there shall
be no reduction in the Purchase Price.
(b) For the purpose of this Section 9.1(a), a "substantial portion" of the
Property shall be deemed to be any portion of the Property with either a fair
market value or replacement cost in an amount equal to or greater than
$500,000.00. The provisions of this Section 9.1 shall survive the Closing.
9.2 Casualty.
(a) In the event that all or any substantial portion of the Property shall
be damaged or destroyed by fire or other casualty prior to Closing, Purchaser
may terminate this Contract by written notice thereof to the Seller within ten
(10) days after Seller notifies Purchaser of the casualty. If Purchaser does
not terminate this Contract as aforesaid, then both parties shall proceed to
close the transaction contemplated herein pursuant to the terms hereof, in which
event Seller shall, except as limited in Section 9.2(b) hereof, deliver to
Purchaser at the Closing any insurance proceeds actually received by Seller
attributable to the Property from such casualty (except for proceeds previously
used to repair the Property) and assign to Purchaser all of Seller's right,
title and interest in and to any claims which Seller may have under the
insurance policies covering the Property, and there shall be no reduction in the
Purchase Price. In the event less than a substantial portion of the Property
shall be damaged or destroyed by fire or other casualty prior to Closing, then
the parties shall proceed in accordance with the second sentence in this Section
9.2(a).
(b) For the purposes of Section 9.2(a), a "substantial portion" of the
Property shall be deemed to be any portion of the Property with either a fair
market value or replacement cost in an amount equal to or greater than
$500,000.00. The provisions of this Section 9.2 shall survive the Closing.
ARTICLE X.
DEFAULTS AND REMEDIES
10.1 Default by Purchaser. If Seller shall not be in default hereunder and
Purchaser refuses or fails to consummate the Closing under this Contract for
reasons other than as expressly set forth in Section 4.4, Section 5.2 or Article
IX hereof or other than due to a failure of a condition precedent to Purchaser's
obligation to close as set forth in Section 7.1 hereof, Seller shall, as its
sole and exclusive remedy, terminate this Contract in which event neither party
shall have any further rights, duties, or obligations hereunder except for
provisions of this Contract which expressly survive the termination hereof, and
Seller shall be entitled to receive and retain the Earnest Money Deposit as
liquidated damages (Seller and Purchaser hereby acknowledging that the amount of
damages in the event of Purchaser's default is difficult or impossible to
ascertain but that such amount is a fair estimate of such damage).
Notwithstanding anything contained in this Section to the contrary, all of
Purchaser's obligations to indemnify, defend and hold Seller harmless under this
Contract (including, without limitation, such obligations under Section 5.1,
11.1 and 14.1 hereof) shall survive the Closing or termination of this Contract,
and Seller shall have any and all rights and remedies available at law or in
equity by reason thereof.
10.2 Default by Seller. If Purchaser shall not be in default hereunder and
if Seller refuses or fails to consummate the Closing under this Contract other
than due to a termination permitted hereunder or a failure of a condition
precedent to Seller's obligation to close as set forth in Section 7.2 hereof,
Purchaser may, at Purchaser's sole option and as its sole and exclusive
remedies, either (a) terminate this Contract in which event neither party shall
have any further rights, duties or obligations hereunder except for provisions
of this Contract which expressly survive the termination hereof, and Purchaser
shall be entitled to a refund of the Earnest Money Deposit, or (b) enforce
specific performance of this Contract against Seller. In no event shall Seller
be liable to Purchaser for any damages, including, without limitation, any
actual, punitive, speculative or consequential damages or damages for loss of
opportunity or lost profit as a result of Seller's failure to consummate the
Closing under this Contract. Notwithstanding anything contained in this Section
to the contrary, all of Seller's obligations to indemnify, defend and hold
Purchaser harmless under this Contract (including, without limitation, such
obligations under Section 11.1 hereof) shall survive the Closing or termination
of this Contract, and Purchaser shall have any and all rights and remedies
available at law or in equity by reason thereof.
10.3 Attorneys' Fees. If it shall be necessary for either Purchaser or
Seller to employ an attorney to enforce its rights pursuant to this Contract,
the non-prevailing party shall reimburse the prevailing party for its reasonable
attorneys' fees.
ARTICLE XI.
BROKERAGE COMMISSIONS
11.1 Brokerage Commission. Seller and Purchaser represent each to the
other that each has had no dealings with any broker, finder or other party
concerning the purchase of the Property except John Hall & Associates (the
"Broker"). Purchaser and Seller are aware that the Broker is acting as dual
agent for both parties in this transaction. Seller hereby agrees to pay at
Closing a commission to Broker in an amount equal to two percent (2%) of the
Purchase Price paid at Closing; provided, however, that Seller's obligation to
pay, and Broker's right to receive, this commission or any other amount with
respect to this Contract or the Property is expressly conditioned upon Closing
the sale of the Property and Seller's receipt of the Purchase Price under this
Contract. Broker shall have no right to receive this commission or any other
amount with respect to this Contract or the Property unless and until Closing
shall be final and fully consummated and Seller shall have received the Purchase
Price as provided in this Contract. Seller agrees to indemnify Purchaser and
hold Purchaser harmless from any loss, liability, damage, cost or expense
(including, without limitation, reasonable attorneys' fees) arising out of or
paid or incurred by Purchaser by reason of any claim to any broker's, finder's
or other fee in connection with this transaction by any party claiming by,
through or under Seller (including, without limitation, the Broker). Purchaser
agrees to indemnify Seller and hold Seller harmless from any loss, liability,
damage, cost or expense (including, without limitation, reasonable attorneys'
fees) arising out of or paid or incurred by Seller by reason of any claim to any
broker's, finder's or other fee in connection with this transaction by any party
claiming by, through or under Purchaser. Notwithstanding anything to the
contrary contained herein, the indemnities set forth in this Article XI shall
survive the Closing.
11.2 Purchaser's Disclosure. Purchaser is the President of Follett
Investment Properties, Inc., a California licensed real estate broker.
ARTICLE XII.
OPERATION OF THE PROPERTY PRIOR TO THE CLOSING
Between the Effective Date and the Closing Date, Seller shall (a) lease,
operate, manage and enter into contracts with respect to the Property, in the
same manner done by Seller prior to the date hereof (provided, however, that
without the prior consent of Purchaser, Seller shall not enter into any service
contract that cannot be terminated with thirty (30) days notice); and (b) advise
Purchaser of the commencement of any litigation, condemnation or other judicial
or administrative proceedings affecting the Property of which Seller has current
actual knowledge.
ARTICLE XIII.
MISCELLANEOUS
13.1 Notices. Any notice provided or permitted to be given under this
Contract must be in writing and may be served by (a) depositing same in the
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, (b) delivering the same
in person to such party via a hand delivery service, Federal Express or any
other nationally recognized courier service that provides a return receipt
showing the date of actual delivery of same to the addressee thereof, or (c)
facsimile transmission with confirmation of receipt to the party sending same,
if a copy is deposited in the United States Mail as provided in 13.1(a) above.
Notice given in accordance herewith shall be effective upon receipt at the
address of the addressee. For purposes of notice, the addresses of the parties
shall be as follows:
If to Seller: Angeles Income Properties, Ltd. 6
One Insignia Financial Plaza
P.O. Box 1089
Greenville, South Carolina 29602
Attention: Kenneth A. Cobler
Facsimile No.: 864/239-1066
Telephone No.: 864/239-1025
With a copy to: Liechty & McGinnis, P.C.
10440 North Central Expressway, Suite 1100
Dallas, Texas 75231
Attention: Lorne O. Liechty, Esq.
Facsimile No.: 214/265-0615
Telephone No.: 214/265-0008
If to Purchaser: Matthew N. Follett
11211 Gold Country Blvd., Suite 100
Gold River, California 95670-4461
Facsimile No.: 916/852-0115
Telephone No.: 916/852-0112
With a copy to: Greco, Mollis & O'Hara Law Firm
18400 Von Kurman Avenue, Suite 500
Irvine, California 92612
Attention: Tom Greco, Esq.
Facsimile No.: 949/263-1513
Telephone No.: 949/263-0600
If to Title
Company: First American Title Insurance Company
3200 E. Camelback Road, Suite 105
Phoenix, Arizona 85018
Attention: Irma Hickman
Facsimile No.: 602/468-3601
Telephone No.: 602/468-3300, ext. 12
13.2 GOVERNING LAW. THIS CONTRACT IS BEING EXECUTED AND DELIVERED, AND IS
INTENDED TO BE PERFORMED IN, THE STATE OF ARIZONA, AND THE LAWS OF SUCH STATE
SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THIS
CONTRACT.
13.3 Entirety and Amendments. This Contract embodies the entire agreement
between the parties and supersedes all prior agreements and understandings, if
any, relating to the transaction described herein, and may be amended or
supplemented only by an instrument in writing executed by the party against whom
enforcement is sought.
13.4 Parties Bound. Subject to the provisions of Section 13.5 hereof, this
Contract shall be binding upon and inure to the benefit of Seller and Purchaser,
and their respective heirs, personal representatives, successors and assigns.
13.5 Assignment. Purchaser may assign its rights under this Contract to an
entity controlling, controlled by, or under common control with Purchaser
(including, without limitations, tenants in common or a limited liability
company controlled by Purchaser) without the prior written consent of Seller.
Except as expressly provided in the preceding sentence, this Contract may not be
assigned in whole or in part by Purchaser without the prior written consent of
Seller, which consent may be granted or withheld by Seller in Seller's sole and
absolute discretion. In the event of an assignment of this Contract by
Purchaser, Purchaser shall not be released from any liability or obligations
hereunder, and Purchaser shall promptly deliver to Seller a copy of the
instrument effecting such assignment. Subject to the foregoing, this Contract
shall be binding upon and inure to the benefit of Seller and Purchaser and their
respective heirs, personal representatives, successors and assigns.
13.6 Headings. Headings used in this Contract are used for reference
purposes only and do not constitute substantive matter to be considered in
construing the terms of this Contract.
13.7 Survival. Except as otherwise expressly provided herein, no
representations, warranties, covenants, acknowledgments or agreements contained
in this Contract shall survive the Closing of this Contract and the delivery of
the Special Warranty Deed by Seller to Purchaser.
13.8 Interpretation. The parties acknowledge that each party and its
counsel have reviewed this Contract, and the parties hereby agree that the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Contract or any amendments or exhibits hereto. In case any one or more
of the provisions contained in this Contract shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions hereof, and this Contract
shall be construed as if such invalid, illegal or unenforceable provisions had
never been contained herein. When the context in which words are used in this
Contract indicates that such is the intent, words in the singular number shall
include the plural and vice versa, and words in the masculine gender shall
include the feminine and neuter genders and vice versa.
13.9 Exhibits. All references to "Exhibits" contained herein are
references to exhibits attached hereto, all of which are hereby made a part
hereof for all purposes.
13.10 Time of Essence. It is expressly agreed by the parties hereto
that time is of the essence with respect to this Contract and Closing hereunder.
13.11 Multiple Counterparts. This Contract may be executed in a number
of identical counterparts. If so executed, each of such counterparts is to be
deemed an original for all purposes, and all such counterparts shall,
collectively, constitute one agreement, but, in making proof of this Contract,
it shall not be necessary to produce or account for more than one such
counterpart.
13.12 Risk of Loss. Risk of loss or damage to the Property, or any
part thereof, by fire or any other casualty from the date this Contract is fully
executed up to the time of delivering the special warranty deed transferring
title to the Property to the Purchaser will be on the Seller and, thereafter,
will be on the Purchaser.
13.13 Effective Date. As used herein, the term "Effective Date" shall
mean for all purposes in this Contract the date on which the Title Company
acknowledges receipt of an original of the Contract executed by Purchaser and
Seller with all changes, if any, to the printed portion of this Contract
initialed by Purchaser and Seller.
13.14 Business Days. All references to "business days" contained
herein are references to normal working business days, i.e., Monday through
Friday of each calendar week, exclusive of federal and national bank holidays.
In the event that any event hereunder is to occur, or a time period is to
expire, on a date which is not a business day, such event shall occur or such
time period shall expire on the next succeeding business day.
13.15 No Recordation of Contract. In no event shall this Contract or
any memorandum hereof be recorded in the public records of the place in which
the Property is situated, and any such recordation or attempted recordation
shall constitute a breach of this Contract by the party responsible for such
recordation or attempted recordation.
ARTICLE XIV.
TAX FREE EXCHANGE
14.1 Section 1031 Exchange. Purchaser's acquisition of the Property is to
be the acquisition of replacement property in a qualifying exchange of like-kind
property under Section 1031 of the Internal Revenue Code of 1986, as amended
(the "Exchange"), pursuant to Purchaser's separate Exchange Agreement with
Exchange Solutions, Inc. (the "Intermediary"). Seller agrees to cooperate with
Purchaser (without liability or cost to Seller) in the completion of the
Exchange. Such cooperation shall include, without limitation, but subject to
the limitations contained in this Section 14.1, (i) the assignment of this
Contract by Purchaser to the Intermediary, and the acknowledgment of such
assignment by Seller, (ii) the acceptance of the Purchase Price from the
Intermediary, (iii) the conveyance of the Property to Purchaser pursuant to a
written direction of the Intermediary, and (iv) the reassignment of this
Contract to Purchaser from the Intermediary immediately following the completion
of the Exchange, and the acknowledgment by Seller of such reassignment. In
consideration for the cooperation of Seller, Seller shall not be liable for any
acts or omissions (except for its willful misconduct) arising from its
relationship with the Intermediary. Upon receipt of title to the Property by
Purchaser and payment of the consideration payable to the Seller or for its
benefit, under this Contract, Seller shall not have any further obligations or
responsibilities under this paragraph and Purchaser agrees to fully indemnify
Seller from any resulting liability to third parties (including, but not limited
to, the Intermediary), which indemnity shall be effective from and after the
date of this Contract, shall not merge with the conveyance of the Property and
shall survive the Closing of this transaction.
Purchaser shall in all events be responsible for all costs and expenses
related to the Exchange and shall fully indemnify, defend and hold Seller
harmless for, from and against any and all liability, claims, damages, expenses
(including, without limitation, reasonable attorneys' and paralegal fees other
than those incurred prior to Closing to review documents to facilitate the
Exchange), taxes, fees, proceedings and causes of action of any kind or nature
whatsoever arising out of, connected with or in any manner related to such
Exchange that would not have been incurred by Seller if the transaction did not
involve a Section 1031 Exchange. The provisions of the immediately preceding
sentence shall survive Closing and the transfer of the Property to Purchaser.
Any Section 1031 exchange shall be consummated on behalf of Purchaser through
the use of a facilitator or intermediary, and Seller shall not be required to
acquire title to any real property in connection therewith.
14.2 Disclaimer. PURCHASER HEREBY ACKNOWLEDGES THAT PURCHASER IS AND SHALL
BE SOLELY RESPONSIBLE FOR COMPLIANCE WITH ALL LAWS, RULES AND REGULATIONS
RELATED TO THE EXCHANGE. FURTHER, PURCHASER ACKNOWLEDGES THAT NEITHER SELLER
NOR ANY OF ITS AGENTS, REPRESENTATIVES OR AFFILIATES HAS ADVISED PURCHASER, AND
NO SUCH PERSON OR ENTITY HAS ANY OBLIGATION OR DUTY TO ADVISE PURCHASER, WITH
RESPECT TO WHETHER THE TRANSACTION CONTEMPLATED BY THIS CONTRACT COMPLIES WITH
THE LAWS, RULES AND REGULATIONS APPLICABLE TO THE EXCHANGE. FURTHER, PURCHASER
ACKNOWLEDGES THAT IT HAS RELIED UPON ITS OWN TAX AND LEGAL COUNSEL IN
DETERMINING COMPLIANCE WITH ALL LAWS, RULES AND REGULATIONS APPLICABLE TO THE
EXCHANGE. THE PROVISIONS OF THIS SECTION 14.2 SHALL SURVIVE THE CLOSING OR
TERMINATION OF THIS CONTRACT.
IN WITNESS WHEREOF, the undersigned have executed this Contract effective
as of the Effective Date.
SELLER:
ANGELES INCOME PROPERTIES, LTD. 6,
a California limited partnership
By: Angeles Realty Corporation II,
a California corporation,
its general partner
By:_______________________________
Its:_________________________
Dated:__________________________________
PURCHASER:
________________________________________
Matthew N. Follett
Dated:__________________________________
REINSTATEMENT AND AMENDMENT TO CONTRACT OF SALE
This Reinstatement and Amendment to Contract of Sale is entered into
effective as of December 14, 1998 (this "Amendment"), by and between Angeles
Income Properties, Ltd. 6, a California limited partnership ("Seller"), and
Matthew N. Follett ("Purchaser").
WHEREAS, Seller and Purchaser entered into that certain Contract of Sale
dated effective as of September 8, 1998 (the "Contract"), pursuant to which
Seller has agreed to sell, and Purchaser has agreed to purchase from Seller,
Seller's rights, titles and interests in and to the Property more particularly
described in the Contract; and
WHEREAS, the Contract was terminated pursuant to a letter from Purchaser
dated October 7, 1998; and
WHEREAS, by mutual assent the Seller and Purchaser desire to enter into
this Amendment to revive and reinstate the Contract between the parties, and to
further amend the Contract as hereinafter provided.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser do hereby
agree as follows:
1. Unless otherwise defined in this Amendment or the context otherwise
requires, each term used in this Amendment with its initial letter capitalized
which has been defined in the Contract shall have the same meaning herein as
given to such term in the Contract.
2. The Contract, a copy of which is attached hereto as Annex I, is hereby
revived and all terms and conditions thereof are reinstated in full as though
the same had not been terminated, with the amendments hereinafter set forth.
The Effective Date of the Contract, as revived and reinstated hereby shall
remain as September 8, 1998.
3. The Contract, as revived and reinstated, is hereby amended as follows:
(a) Section 2.1 of the Contract is hereby amended to read in its entirety
as follows:
2.1 Purchase Price. The total Purchase Price (herein so called) to be
paid by Purchaser to Seller for the Property shall be an amount equal to Nine
Million Five Hundred Thousand Dollars ($9,500,000.00). The Purchase Price shall
be payable in cash or Current Funds (defined below) at the Closing (hereinafter
defined).
(b) Section 3.1 of the Contract is hereby amended to read in its entirety
as follows:
3.1 Amount and Timing. Within two (2) business days after the Effective
Date (hereinafter defined), Purchaser shall deliver to First American Title
Insurance Company, located at 3200 E. Camelback Road, Suite 105, Phoenix,
Arizona 85018 (the "Title Company"), One Hundred Thousand Dollars ($100,000.00)
(the "Initial Deposit") in cash or Current Funds, to be held by the Title
Company in escrow to be applied or disposed of by the Title Company as is
provided in this Contract. In the event Purchaser fails to deposit the Initial
Deposit with the Title Company as herein provided, Seller may, at its option,
terminate this Contract prior to the making of the Initial Deposit, in which
event neither Seller nor Purchaser shall have any further rights, liabilities or
obligations hereunder except for provisions of this Contract which expressly
survive the termination of this Contract. Not later than December 15, 1998,
Purchaser shall deposit with the Title Company an additional earnest money
deposit in the amount of One Hundred Thousand and No/100 Dollars ($100,000.00)
(the "Subsequent Deposit") in cash or Current Funds to be held by the Title
Company in escrow to be applied or disposed of by the Title Company as is
provided in this Contract. If the Purchaser fails to deposit the Subsequent
Deposit on or before December 15, 1998, then Seller may, at its option,
terminate this Contract prior to the making of such Subsequent Deposit, in which
event the Title Company shall pay the Initial Deposit to Seller and thereafter
neither Seller nor Purchaser shall have any further rights, liabilities or
obligations hereunder except for provisions of this Contract which expressly
survive the termination of this Contract. The term "Earnest Money Deposit", as
used in this Contract, shall mean (i) the Initial Deposit prior to deposit of
the Subsequent Deposit, (ii) both the Initial Deposit and the Subsequent Deposit
combined after the deposit of the Subsequent Deposit, and (iii) the Initial
Deposit, the Subsequent Deposit and the Extension Deposit (as defined in Section
8.1 hereof) combined after the deposit of the Extension Deposit, if applicable,
in each case together with all interest earned thereon. As used in this
Contract, the term "Current Funds" shall mean wire transfers, certified funds or
a cashier's check in a form acceptable to the Title Company which would permit
the Title Company to immediately disburse such funds.
(c) Section 5.3 of the Contract is hereby amended to provide that the
Submission Matters which have not been delivered prior to the date of this
Amendment shall be delivered not less than ten (10) days after the date of this
Amendment. Seller and Purchaser acknowledge that all Submission Matters
required by Section 5.3 of the Contract have been delivered except the current
inventory of material items of personalty referenced in Section 5.3(c) of the
Contract.
(d) Section 8.1 of the Contract is hereby amended to read in its entirety
as follows:
8.1 Time and Place. The consummation of the purchase and sale of the
Property (the "Closing") shall take place at the office of the Title Company (it
being contemplated that the Closing will occur by the delivery of Closing
Documents into escrow with the Title Company) on February 1, 1999 (the "Closing
Date"); provided, that Purchaser may, at its option, extend the Closing until
March 2, 1999 by delivery to Seller on or before January 28, 1999 a written
notice (the "Extension Notice") that Purchaser has elected to extend the Closing
Date until March 2, 1999; provided, further, however, that if such Extension
Notice is given, it shall not be effective and shall be void and of no effect
unless Purchaser also delivers to the Title Company, on or before January 28,
1999, an additional Earnest Money Deposit (the "Extension Deposit") in the
amount of $50,000.00 in cash or Current Funds to be held by the Title Company in
escrow to be applied or disposed of by the Title Company as is provided in this
Contract.
4. Purchaser hereby authorizes the Title Company to deliver the Earnest
Money Deposit (in the amount of $200,000.00), to Seller immediately upon Title
Company's receipt of a fully executed counterpart of this Amendment.
5. Except as expressly amended by this Amendment, no term or provision of
the Contract is or shall be amended, modified or supplemented.
6. To facilitate execution, this instrument may be executed in as many
counterparts as may be convenient or required. It shall not be necessary that
the signature of, or on behalf of, each party, or that the signature of all
persons required to bind any party, appear on each counterpart. All
counterparts shall collectively constitute a single instrument. It shall not be
necessary in making proof of this instrument to produce or account for more than
a single counterpart containing the respective signatures of, or on behalf of,
each of the parties hereto. Any signature page to any counterpart may be
detached from such counterpart without impairing the legal effect of the
signatures thereon and thereafter attached to another counterpart identical
thereto except having attached to it additional signature pages.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the date first set forth above.
SELLER:
ANGELES INCOME PROPERTIES, LTD. 6,
a California limited partnership
By: Angeles Realty Corporation II,
a California corporation,
its general partner
By:____________________________
Name:____________________
Its:_____________________
Dated:_____________________________________
PURCHASER:
___________________________________________
MATTHEW N. FOLLETT
Dated:_____________________________________
Annex I
Contract of Sale
